Stock Analysis Report

Executive Summary

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.

Snowflake Analysis

Flawless balance sheet and good value.

Similar Companies

Share Price & News

How has Preferred Bank's share price performed over time and what events caused price changes?

Latest Share Price and Events

Stable Share Price: PFBC has not had significant price volatility in the past 3 months.

Market Performance

7 Day Return




US Banks


US Market

1 Year Return




US Banks


US Market

Return vs Industry: PFBC exceeded the US Banks industry which returned 9.8% over the past year.

Return vs Market: PFBC matched the US Market which returned 17.8% over the past year.

Shareholder returns

7 Day-3.3%-1.2%-1.1%
30 Day-4.6%0.4%1.5%
90 Day10.1%-0.8%6.6%
1 Year19.7%17.0%13.0%9.8%20.2%17.8%
3 Year11.4%5.4%23.4%14.5%47.5%38.1%
5 Year142.3%121.4%72.2%52.7%71.2%52.4%

Price Volatility Vs. Market

How volatile is Preferred Bank's share price compared to the market and industry in the last 5 years?

Simply Wall St News


Is Preferred Bank undervalued compared to its fair value and its price relative to the market?


Undervalued compared to fair value

Share Price vs. Fair Value

Below Fair Value: PFBC ($60.2) is trading below our estimate of fair value ($114.54)

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

Price To Earnings Ratio

PE vs Industry: PFBC is good value based on its PE Ratio (11.7x) compared to the Banks industry average (12.6x).

PE vs Market: PFBC is good value based on its PE Ratio (11.7x) compared to the US market (18.2x).

Price to Earnings Growth Ratio

PEG Ratio: PFBC is poor value based on its PEG Ratio (3.1x)

Price to Book Ratio

PB vs Industry: PFBC is overvalued based on its PB Ratio (1.9x) compared to the US Banks industry average (1.2x).

Next Steps

Future Growth

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


Forecasted annual earnings growth

Earnings and Revenue Growth Forecasts

Analyst Future Growth Forecasts

Earnings vs Savings Rate: PFBC's forecast earnings growth (3.8% per year) is above the savings rate (1.7%).

Earnings vs Market: PFBC's earnings (3.8% per year) are forecast to grow slower than the US market (14.1% per year).

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

Revenue vs Market: PFBC's revenue (6.9% per year) is forecast to grow slower than the US market (7.6% per year).

High Growth Revenue: PFBC's revenue (6.9% 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 (15.1%).

Next Steps

Past Performance

How has Preferred Bank performed over the past 5 years?


Historical annual earnings growth

Earnings and Revenue History

Quality Earnings: PFBC has high quality earnings.

Growing Profit Margin: PFBC's current net profit margins (46.1%) are lower than last year (47.3%).

Past Earnings Growth Analysis

Earnings Trend: PFBC's earnings have grown significantly by 25.1% per year over the past 5 years.

Accelerating Growth: PFBC's earnings growth over the past year (11.3%) is below its 5-year average (25.1% per year).

Earnings vs Industry: PFBC earnings growth over the past year (11.3%) underperformed the Banks industry 12%.

Return on Equity

High ROE: PFBC's Return on Equity (16.8%) is considered low.

Return on Assets

Return on Capital Employed

Next Steps

Financial Health

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

Financial Position Analysis

Debt to Equity History and Analysis

Balance Sheet

Inventory Level: PFBC has a low level of unsold assets or inventory.

Debt Coverage by Assets: PFBC's debt is covered by short term assets (assets are 5.7x debt).

Financial Institutions Analysis

Asset Level: PFBC's level of assets compared to its equity is low.

Allowance for Bad Loans: PFBC has a sufficient allowance for bad loans.

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

Loan Level: PFBC has an acceptable proportion of non-loan assets held.

Low Risk Deposits: PFBC's loans are broadly funded by customer deposits.

Level of Bad Loans: PFBC has an appropriate level of bad loans (0.06%)

Next Steps


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


Current Dividend Yield

Dividend Yield vs Market


Current dividend yield vs market & industry

Notable Dividend: PFBC's dividend (1.99%) is higher than the bottom 25% of dividend payers in the US market (1.45%).

High Dividend: PFBC's dividend (1.99%) is low compared to the top 25% of dividend payers in the US market (3.73%).

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 5 years.

Current Payout to Shareholders

Dividend Coverage: With its low payout ratio (23.3%), PFBC's dividend payments are well covered by earnings.

Future Payout to Shareholders

Future Dividend Coverage: PFBC's dividends in 3 years are forecast to be well covered by earnings (22.9% payout ratio).

Next Steps


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


Average management tenure


Li Yu (78yo)





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

CEO Compensation Analysis

Compensation vs Market: Li's total compensation ($USD4.55M) is above average for companies of similar size in the US market ($USD2.51M).

Compensation vs Earnings: Li's compensation has been consistent with company performance over the past year.

Leadership Team

Li Yu
Chairman27.1yrsUS$4.55m5.14% $45.9m
Wellington Chen
President & COO7.5yrsUS$1.29m0.20% $1.8m
Edward Czajka
Executive VP & CFO13.8yrsUS$805.46k0.16% $1.4m
Nick Pi
Executive VP & Chief Credit Officer4.7yrsUS$693.99k0.027% $239.4k
Sandy Ho
Executive VP & Regional Manager0yrsUS$169.42kno data
Stella Chen
Senior Vice President0yrsUS$172.26kno data
Erika Chi
Executive Vice President0yrsno datano data
Johnny Hsu
Executive Vice President0yrsno datano data
Ted Hsu
Executive Vice President0yrsno datano data
Gary Hu
Executive Vice President0yrsno datano data


Average Tenure


Average Age

Experienced Management: PFBC's management team is seasoned and experienced (10.6 years average tenure).

Board Members

Li Yu
Chairman27.1yrsUS$4.55m5.14% $45.9m
J. Belliston
Independent Director17.1yrsUS$145.58k0.086% $771.0k
Wayne Wu
Independent Director6.7yrsUS$123.58k0.055% $492.7k
Gary Nunnelly
Independent Director29.1yrsUS$142.08k0.17% $1.5m
Chih-Wei Wu
Independent Director7.3yrsUS$131.08k0.95% $8.5m
William C. Cheng
Independent Director25.1yrsUS$139.08k0.64% $5.7m
Clark Hsu
Vice Chairman of the Board8.8yrsUS$143.08k0.69% $6.2m
Shirley Wang
Independent Director1.4yrsUS$60.58k0.017% $155.3k
Kathleen Shane
Independent Director0.9yrsno data0.012% $108.3k


Average Tenure


Average Age

Experienced Board: PFBC's board of directors are considered experienced (8.8 years average tenure).


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 company bio, employee growth, exchange listings and data sources

Key Information

  • Name: Preferred Bank
  • Ticker: PFBC
  • Exchange: NasdaqGS
  • Founded: 1991
  • Industry: Regional Banks
  • Sector: Banks
  • Market Cap: US$891.738m
  • Shares outstanding: 14.81m
  • Website:

Number of Employees


  • Preferred Bank
  • 601 South Figueroa Street
  • 29th Floor
  • Los Angeles
  • California
  • 90017
  • United States


TickerExchangePrimary SecuritySecurity TypeCountryCurrencyListed on
PFBCNasdaqGS (Nasdaq Global Select)YesCommon StockUSUSDJun 2001
1IUDB (Deutsche Boerse AG)YesCommon StockDEEURJun 2001


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's deposit products include 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; commercial loans comprising lines of credit for working capital and term loans for capital expenditures; and commercial and export letters of credit, import lines of credit, documentary collections, international wire transfers, export financing products, bills purchase programs, and acceptances/trust receipt financing products, as well as standby letters of credit and foreign exchange services for importers and exporters. In addition, it offers various high-wealth banking services to wealthy individuals residing in the Pacific Rim area with residences, real estate investments, or businesses in Southern California. Further, it provides various banking services to physicians, accountants, attorneys, business managers, and other professionals; and safe deposit boxes, account reconciliation, courier service, and cash management services to the manufacturing, service, and distribution companies. Additionally, it offers remote deposit capture, and Internet and mobile banking services. As of December 31, 2018, it had 13 full-service branch offices in Alhambra, Arcadia, Century City, City of Industry, Diamond Bar, Los Angeles, Pico Rivera, San Francisco, Tarzana, Torrance, and Irvine, California; and Flushing, New York. The company was founded in 1991 and is headquartered in Los Angeles, California. 

Company Analysis and Financial Data Status

All financial data provided by Standard & Poor's Capital IQ.
DataLast Updated (UTC time)
Company Analysis2020/02/24 00:11
End of Day Share Price2020/02/21 00:00
Annual Earnings2019/12/31

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.