Preferred Bank (NASDAQ:PFBC) Posts Earnings Results

Preferred Bank (NASDAQ:PFBC) issued its quarterly earnings results on Thursday. The bank reported $2.79 earnings per share for the quarter, topping analysts’ consensus estimates of $2.78 by $0.01, Zacks reports. The company had revenue of $78.07 million for the quarter, compared to analyst estimates of $74.54 million. Preferred Bank had a return on equity of 16.91% and a net margin of 25.67%.

Here are the key takeaways from Preferred Bank’s conference call:

• Strong profitability: Q4 net income was $34.8 million ($2.79/share) and full-year net income was $434 million ($10.41/share), which management says is among the banking industry’s top tier.
• Margin pressure from rate cuts and expensive deposits: December margin fell to 3.66% after Fed cuts while deposit cost remained high at 3.17% (deposit beta ~40% on interest-bearing), pressuring net interest income near-term.
• Loan demand is strengthening—Q4 loan growth was $182 million (over 12% for the quarter) and management is budgeting for higher loan growth in 2026, with deposit growth targeted to keep pace.
• Credit stress increased as criticized assets rose by ~$97 million after the Bank classified a large nine-loan relationship (~$121–$123 million); payments have slowed and one $19.5M loan moved to non-accrual, though management says collateral values remain supportive and added provisions totaled $4.3 million this quarter.
• Capital allocation and expense outlook: management expects mid?to?high single?digit expense growth, limited share repurchases this year as funds may be reserved for loan growth and deposit needs, and Q1 run?rate guidance implies expenses will ramp through the year.

Preferred Bank Stock Down 7.0%

PFBC opened at $92.21 on Friday. The firm has a 50 day moving average price of $96.14 and a 200 day moving average price of $93.44. The company has a market cap of $1.33 billion, a PE ratio of 9.37 and a beta of 0.66. Preferred Bank has a 1 year low of $71.90 and a 1 year high of $103.05. The company has a debt-to-equity ratio of 0.47, a quick ratio of 1.07 and a current ratio of 1.07.

Preferred Bank Dividend Announcement

The company also recently announced an annual dividend, which was paid on Tuesday, January 20th. Stockholders of record on Tuesday, January 6th were issued a dividend of $3.20 per share. The ex-dividend date was Tuesday, January 6th. This represents a dividend yield of 336.0%. Preferred Bank’s payout ratio is presently 32.52%.

Institutional Investors Weigh In On Preferred Bank

Several institutional investors have recently bought and sold shares of the business. Two Sigma Investments LP raised its stake in shares of Preferred Bank by 2.1% in the 3rd quarter. Two Sigma Investments LP now owns 105,283 shares of the bank’s stock valued at $9,517,000 after acquiring an additional 2,189 shares during the period. Qube Research & Technologies Ltd increased its holdings in Preferred Bank by 288.4% in the 3rd quarter. Qube Research & Technologies Ltd now owns 74,636 shares of the bank’s stock valued at $6,746,000 after purchasing an additional 55,418 shares in the last quarter. Invesco Ltd. raised its position in Preferred Bank by 26.1% in the third quarter. Invesco Ltd. now owns 73,478 shares of the bank’s stock valued at $6,642,000 after purchasing an additional 15,193 shares during the period. Jane Street Group LLC raised its position in Preferred Bank by 81.0% in the first quarter. Jane Street Group LLC now owns 66,428 shares of the bank’s stock valued at $5,557,000 after purchasing an additional 29,729 shares during the period. Finally, Bank of America Corp DE lifted its stake in shares of Preferred Bank by 50.1% during the second quarter. Bank of America Corp DE now owns 61,857 shares of the bank’s stock worth $5,353,000 after purchasing an additional 20,660 shares in the last quarter. 72.77% of the stock is currently owned by hedge funds and other institutional investors.

Analyst Ratings Changes

Several equities analysts recently weighed in on the company. Weiss Ratings reiterated a “buy (b)” rating on shares of Preferred Bank in a research report on Monday, December 29th. Zacks Research downgraded shares of Preferred Bank from a “strong-buy” rating to a “hold” rating in a research note on Friday, December 26th. Piper Sandler increased their price objective on shares of Preferred Bank from $112.00 to $119.00 and gave the stock an “overweight” rating in a report on Wednesday, October 22nd. Finally, DA Davidson dropped their price target on shares of Preferred Bank from $108.00 to $104.00 and set a “neutral” rating for the company in a research report on Wednesday, October 22nd. Two research analysts have rated the stock with a Buy rating and three have given a Hold rating to the company. According to data from MarketBeat.com, Preferred Bank currently has an average rating of “Hold” and an average price target of $104.67.

Trending Headlines about Preferred Bank

Here are the key news stories impacting Preferred Bank this week:

• Positive Sentiment: Q4 beat on both EPS and revenue: PFBC reported $2.79 GAAP EPS vs. $2.78 consensus and revenue of $78.07M vs. ~$74.5M expected, driven partly by a gain on property sales. This confirms near-term profitability and beat consensus. Read More.
• Positive Sentiment: Solid profitability metrics: Q4 net income was $34.8M, ROE ~16.9% and net margin ~25.7%, supporting the bank’s earnings power and the street’s above-$9 annual EPS outlook. Read More.
• Neutral Sentiment: One-time items affect comparability: the quarter included a $3.6M gain on OREO sales and last year’s results included an $8.1M ASC 842 occupancy charge, so year-over-year comparisons are distorted. Investors should adjust for these when modeling recurring earnings. Read More.
• Neutral Sentiment: Analyst/valuation context and coverage: recent writeups review Q4 metrics vs. Street estimates and re-examine valuation after recent share momentum — useful for positioning but not new company-level catalysts. Read More.
• Negative Sentiment: Management flagged rising risks on the earnings call: provision for credit losses increased QoQ and net interest income declined as market rates fell, which trimmed QoQ net income. Those trends could pressure future margins if loan yields or credit costs worsen. Read More.
• Negative Sentiment: Rate sensitivity and credit watch: the combination of lower NII from falling rates and higher provisions increases execution risk for near-term earnings—investors should watch loan growth, asset quality trends, and the margin trajectory on upcoming calls. Read More.

Preferred Bank Company Profile

Preferred Bank (NASDAQ: PFBC) is a California-chartered commercial bank headquartered in Los Angeles. The institution offers a full range of banking products and services to businesses and individuals, with a particular emphasis on commercial real estate lending, business banking, treasury management and deposit accounts. Preferred Bank operates through branch offices across Southern California and national loan production offices in major U.S. markets.

The bank’s core lending portfolio focuses on commercial real estate acquisition, development and investment properties.