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PFBC

Preferred Bank NasdaqGS:PFBC Stock Report

Last Price

US$71.20

Market Cap

US$1.0b

7D

-2.1%

1Y

19.0%

Updated

06 Aug, 2022

Data

Company Financials +
PFBC fundamental analysis
Snowflake Score
Valuation5/6
Future Growth2/6
Past Performance5/6
Financial Health6/6
Dividends2/6

PFBC Stock Overview

Preferred Bank provides various commercial banking products and services to small and mid-sized businesses and their owners, entrepreneurs, real estate developers and investors, professionals, and high net worth individuals in the United States.

Preferred Bank Competitors

Price History & Performance

Summary of all time highs, changes and price drops for Preferred Bank
Historical stock prices
Current Share PriceUS$71.20
52 Week HighUS$81.97
52 Week LowUS$58.66
Beta1.16
1 Month Change3.41%
3 Month Change5.26%
1 Year Change18.98%
3 Year Change40.38%
5 Year Change33.56%
Change since IPO49.90%

Recent News & Updates

Jul 21
Here's Why We Think Preferred Bank (NASDAQ:PFBC) Might Deserve Your Attention Today

Here's Why We Think Preferred Bank (NASDAQ:PFBC) Might Deserve Your Attention Today

For beginners, it can seem like a good idea (and an exciting prospect) to buy a company that tells a good story to...

Jul 20

Preferred Bank GAAP EPS of $1.87 beats by $0.08, revenue of $59.02M beats by $1.91M

Preferred Bank press release (NASDAQ:PFBC): Q2 GAAP EPS of $1.87 beats by $0.08. Revenue of $59.02M (+31.1% Y/Y) beats by $1.91M. Linked quarter loan growth (Ex-PPP) of 7.4% Return on beginning equity (“ROBE”) of 18.91% Efficiency ratio of 29.0%

Shareholder Returns

PFBCUS BanksUS Market
7D-2.1%0.3%1.0%
1Y19.0%-14.1%-12.9%

Return vs Industry: PFBC exceeded the US Banks industry which returned -14.1% over the past year.

Return vs Market: PFBC exceeded the US Market which returned -12.8% over the past year.

Price Volatility

Is PFBC's price volatile compared to industry and market?
PFBC volatility
PFBC Average Weekly Movement3.5%
Banks Industry Average Movement3.7%
Market Average Movement7.9%
10% most volatile stocks in US Market17.1%
10% least volatile stocks in US Market3.2%

Stable Share Price: PFBC is less volatile than 75% of US stocks over the past 3 months, typically moving +/- 3% a week.

Volatility Over Time: PFBC's weekly volatility (3%) has been stable over the past year.

About the Company

FoundedEmployeesCEOWebsite
1991279Li Yuhttps://www.preferredbank.com

Preferred Bank provides various commercial banking products and services to small and mid-sized businesses and their owners, entrepreneurs, real estate developers and investors, professionals, and high net worth individuals in the United States. The company accepts checking, savings, and money market deposit accounts; fixed-rate and fixed maturity retail, and non-retail certificates of deposit; and individual retirement accounts. It also provides real estate mortgage loans that are secured by retail, industrial, office, special purpose, and residential single and multi-family properties; real estate construction loans; and commercial loans comprising lines of credit for working capital, term loans for capital expenditures, and commercial and stand-by letters of credit; and SBA loans.

Preferred Bank Fundamentals Summary

How do Preferred Bank's earnings and revenue compare to its market cap?
PFBC fundamental statistics
Market CapUS$1.01b
Earnings (TTM)US$106.65m
Revenue (TTM)US$209.49m

9.5x

P/E Ratio

1.7x

P/B Ratio

Earnings & Revenue

Key profitability statistics from the latest earnings report
PFBC income statement (TTM)
RevenueUS$209.49m
Cost of RevenueUS$0
Gross ProfitUS$209.49m
Other ExpensesUS$102.84m
EarningsUS$106.65m

Last Reported Earnings

Jun 30, 2022

Next Earnings Date

n/a

Earnings per share (EPS)7.53
Gross Margin100.00%
Net Profit Margin50.91%
Debt/Equity Ratio25.0%

How did PFBC perform over the long term?

See historical performance and comparison

Dividends

2.4%

Current Dividend Yield

23%

Payout Ratio
We’ve recently updated our valuation analysis.

Valuation

Is PFBC undervalued compared to its fair value, analyst forecasts and its price relative to the market?

Valuation Score

5/6

Valuation Score 5/6

  • Price-To-Earnings vs Peers

  • Price-To-Earnings vs Industry

  • Price-To-Earnings vs Fair Ratio

  • Below Fair Value

  • Significantly Below Fair Value

  • Analyst Forecast

Key Valuation Metric

Which metric is best to use when looking at relative valuation for PFBC?

Other financial metrics that can be useful for relative valuation.

PFBC key valuation metrics and ratios. From Price to Earnings, Price to Sales and Price to Book to Price to Earnings Growth Ratio, Enterprise Value and EBITDA.
Key Statistics
Enterprise Value/Revenuen/a
Enterprise Value/EBITDAn/a
PEG Ratio1.5x

Price to Earnings Ratio vs Peers

How does PFBC's PE Ratio compare to its peers?

PFBC PE Ratio vs Peers
The above table shows the PE ratio for PFBC vs its peers. Here we also display the market cap and forecasted growth for additional consideration.
CompanyPEEstimated GrowthMarket Cap
Peer Average11.8x
BRKL Brookline Bancorp
9.8x19.0%US$1.1b
CASH Pathward Financial
6.8x0.1%US$993.5m
FMBL Farmers & Merchants Bank of Long Beach
8.4xn/aUS$980.6m
LBAI Lakeland Bancorp
11.5x16.8%US$1.0b
PFBC Preferred Bank
9.5x6.2%US$1.0b

Price-To-Earnings vs Peers: PFBC is good value based on its Price-To-Earnings Ratio (9.5x) compared to the peer average (11.8x).


Price to Earnings Ratio vs Industry

How does PFBC's PE Ratio compare vs other companies in the US Banks Industry?

Price-To-Earnings vs Industry: PFBC is good value based on its Price-To-Earnings Ratio (9.5x) compared to the US Banks industry average (9.8x)


Price to Earnings Ratio vs Fair Ratio

What is PFBC's PE Ratio compared to its Fair PE Ratio? This is the expected PE Ratio taking into account the company's forecast earnings growth, profit margins and other risk factors.

PFBC PE Ratio vs Fair Ratio.
Fair Ratio
Current PE Ratio9.5x
Fair PE Ratio12.4x

Price-To-Earnings vs Fair Ratio: PFBC is good value based on its Price-To-Earnings Ratio (9.5x) compared to the estimated Fair Price-To-Earnings Ratio (12.4x).


Share Price vs Fair Value

What is the Fair Price of PFBC when looking at its future cash flows? For this estimate we use a Discounted Cash Flow model.

Below Fair Value: PFBC ($71.2) is trading below our estimate of fair value ($238.13)

Significantly Below Fair Value: PFBC is trading below fair value by more than 20%.


Analyst Price Targets

What is the analyst 12-month forecast and do we have any statistical confidence in the consensus price target?

Analyst Forecast: Target price is less than 20% higher than the current share price.


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Future Growth

How is Preferred Bank forecast to perform in the next 1 to 3 years based on estimates from 6 analysts?

Future Growth Score

2/6

Future Growth Score 2/6

  • Earnings vs Savings Rate

  • Earnings vs Market

  • High Growth Earnings

  • Revenue vs Market

  • High Growth Revenue

  • Future ROE


6.2%

Forecasted annual earnings growth

Earnings and Revenue Growth Forecasts


Analyst Future Growth Forecasts

Earnings vs Savings Rate: PFBC's forecast earnings growth (6.2% per year) is above the savings rate (1.9%).

Earnings vs Market: PFBC's earnings (6.2% per year) are forecast to grow slower than the US market (12.8% per year).

High Growth Earnings: PFBC's earnings are forecast to grow, but not significantly.

Revenue vs Market: PFBC's revenue (10.7% per year) is forecast to grow faster than the US market (7.9% per year).

High Growth Revenue: PFBC's revenue (10.7% per year) is forecast to grow slower than 20% per year.


Earnings per Share Growth Forecasts


Future Return on Equity

Future ROE: PFBC's Return on Equity is forecast to be low in 3 years time (17.3%).


Discover growth companies

Past Performance

How has Preferred Bank performed over the past 5 years?

Past Performance Score

5/6

Past Performance Score 5/6

  • Quality Earnings

  • Growing Profit Margin

  • Earnings Trend

  • Accelerating Growth

  • Earnings vs Industry

  • High ROE


15.0%

Historical annual earnings growth

Earnings and Revenue History

Quality Earnings: PFBC has high quality earnings.

Growing Profit Margin: PFBC's current net profit margins (50.9%) are higher than last year (48.9%).


Past Earnings Growth Analysis

Earnings Trend: PFBC's earnings have grown by 15% per year over the past 5 years.

Accelerating Growth: PFBC's earnings growth over the past year (32.4%) exceeds its 5-year average (15% per year).

Earnings vs Industry: PFBC earnings growth over the past year (32.4%) exceeded the Banks industry 9.2%.


Return on Equity

High ROE: PFBC's Return on Equity (18%) is considered low.


Discover strong past performing companies

Financial Health

How is Preferred Bank's financial position? (This company is analysed differently as a bank or financial institution)

Financial Health Score

6/6

Financial Health Score 6/6

  • Asset Level

  • Allowance for Bad Loans

  • Low Risk Liabilities

  • Loan Level

  • Low Risk Deposits

  • Level of Bad Loans

Financial Position Analysis


Debt to Equity History and Analysis


Balance Sheet


Financial Institutions Analysis

Asset Level: PFBC's Assets to Equity ratio (10.5x) is moderate.

Allowance for Bad Loans: PFBC has a sufficient allowance for bad loans (579%).

Low Risk Liabilities: 96% of PFBC's liabilities are made up of primarily low risk sources of funding.

Loan Level: PFBC has an appropriate level of Loans to Assets ratio (78%).

Low Risk Deposits: PFBC's Loans to Deposits ratio (90%) is appropriate.

Level of Bad Loans: PFBC has an appropriate level of bad loans (0.2%).


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Dividend

What is Preferred Bank current dividend yield, its reliability and sustainability?

Dividend Score

2/6

Dividend Score 2/6

  • Notable Dividend

  • High Dividend

  • Stable Dividend

  • Growing Dividend

  • Earnings Coverage

  • Future Dividend Coverage


2.42%

Current Dividend Yield

Dividend Yield vs Market

Notable Dividend: PFBC's dividend (2.42%) is higher than the bottom 25% of dividend payers in the US market (1.52%).

High Dividend: PFBC's dividend (2.42%) is low compared to the top 25% of dividend payers in the US market (4.09%).


Stability and Growth of Payments

Stable Dividend: Whilst dividend payments have been stable, PFBC has been paying a dividend for less than 10 years.

Growing Dividend: PFBC's dividend payments have increased, but the company has only paid a dividend for 8 years.


Current Payout to Shareholders

Earnings Coverage: With its low payout ratio (23.1%), PFBC's dividend payments are well covered by earnings.


Future Payout to Shareholders

Future Dividend Coverage: Insufficient data to determine if a dividend will be paid in 3 years or that it will be covered by earnings.


Discover strong dividend paying companies

Management

How experienced are the management team and are they aligned to shareholders interests?

12.8yrs

Average management tenure


CEO

Li Yu (81 yo)

29.58yrs

Tenure

US$4,557,853

Compensation

Mr. Li Yu founded Preferred Bank and has been its Chairman since December 1991 and has been its Chief Executive Officer since 1993 and served as its President from 1993 to August 22, 2012. He serves as Cor...


CEO Compensation Analysis

Compensation vs Market: Li's total compensation ($USD4.56M) is about average for companies of similar size in the US market ($USD3.94M).

Compensation vs Earnings: Li's compensation has increased by more than 20% in the past year.


Leadership Team

Experienced Management: PFBC's management team is seasoned and experienced (12.8 years average tenure).


Board Members

Experienced Board: PFBC's board of directors are seasoned and experienced ( 18.6 years average tenure).


Ownership

Who are the major shareholders and have insiders been buying or selling?


Insider Trading Volume

Insider Buying: PFBC insiders have only sold shares in the past 3 months.


Recent Insider Transactions

Ownership Breakdown

Dilution of Shares: Shareholders have not been meaningfully diluted in the past year.


Top Shareholders

Company Information

Preferred Bank's employee growth, exchange listings and data sources


Key Information

  • Name: Preferred Bank
  • Ticker: PFBC
  • Exchange: NasdaqGS
  • Founded: 1991
  • Industry: Regional Banks
  • Sector: Banks
  • Implied Market Cap: US$1.009b
  • Shares outstanding: 14.16m
  • Website: https://www.preferredbank.com

Number of Employees


Location

  • Preferred Bank
  • 601 South Figueroa Street
  • 47th and 48th Floor
  • Los Angeles
  • California
  • 90017
  • United States

Listings


Company Analysis and Financial Data Status

All financial data provided by Standard & Poor's Capital IQ.
DataLast Updated (UTC time)
Company Analysis2022/08/06 00:00
End of Day Share Price2022/08/05 00:00
Earnings2022/06/30
Annual Earnings2021/12/31


Unless specified all financial data is based on a yearly period but updated quarterly. This is known as Trailing Twelve Month (TTM) or Last Twelve Month (LTM) Data. Learn more here.