NasdaqGS:PFBC

Stock Analysis Report

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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. More Details


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 is not significantly more volatile than the rest of US stocks over the past 3 months, typically moving +/- 7% a week.

Volatility Over Time: PFBC's weekly volatility (7%) has been stable over the past year.


Market Performance


7 Day Return

-1.7%

PFBC

-0.3%

US Banks

0.7%

US Market


1 Year Return

-30.6%

PFBC

-16.2%

US Banks

22.2%

US Market

Return vs Industry: PFBC underperformed the US Banks industry which returned -16.6% over the past year.

Return vs Market: PFBC underperformed the US Market which returned 22.7% over the past year.


Shareholder returns

PFBCIndustryMarket
7 Day-1.7%-0.3%0.7%
30 Day8.2%20.3%11.8%
90 Day2.4%19.7%8.6%
1 Year-28.5%-30.6%-13.1%-16.2%25.0%22.2%
3 Year-35.4%-39.8%-3.8%-11.8%49.4%39.5%
5 Year23.9%11.7%42.5%24.8%100.2%78.1%

Long-Term 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

Valuation

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

>50%

Undervalued compared to fair value


Share Price vs. Fair Value

Below Fair Value: PFBC ($38.2) is trading below our estimate of fair value ($80.43)

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 (8.4x) compared to the US Banks industry average (11.3x).

PE vs Market: PFBC is good value based on its PE Ratio (8.4x) compared to the US market (19.4x).


Price to Earnings Growth Ratio

PEG Ratio: PFBC is poor value based on its PEG Ratio (1.6x)


Price to Book Ratio

PB vs Industry: PFBC is overvalued based on its PB Ratio (1.1x) compared to the US Banks industry average (0.9x).


Next Steps

Future Growth

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

5.3%

Forecasted annual earnings growth


Earnings and Revenue Growth Forecasts


Analyst Future Growth Forecasts

Earnings vs Savings Rate: PFBC's forecast earnings growth (5.3% per year) is above the savings rate (2.2%).

Earnings vs Market: PFBC's earnings (5.3% per year) are forecast to grow slower than the US market (21.8% per year).

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

Revenue vs Market: PFBC's revenue (7.6% per year) is forecast to grow slower than the US market (10.2% per year).

High Growth Revenue: PFBC's revenue (7.6% 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 (12.2%).


Next Steps

Past Performance

How has Preferred Bank performed over the past 5 years?

21.4%

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 (47.5%).


Past Earnings Growth Analysis

Earnings Trend: PFBC's earnings have grown significantly by 21.4% per year over the past 5 years.

Accelerating Growth: PFBC's has had negative earnings growth over the past year, so it can't be compared to its 5-year average.

Earnings vs Industry: PFBC had negative earnings growth (-11.4%) over the past year, making it difficult to compare to the Banks industry average (-4.1%).


Return on Equity

High ROE: PFBC's Return on Equity (13.5%) is considered low.


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


Financial Institutions Analysis

Asset Level: PFBC's Assets to Equity ratio (10.1x) is moderate.

Allowance for Bad Loans: PFBC has a sufficient allowance for bad loans (244%).

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 (76%).

Low Risk Deposits: PFBC's Loans to Deposits ratio (88%) is appropriate.

Level of Bad Loans: PFBC has an appropriate level of bad loans (0.6%).


Next Steps

Dividend

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

3.14%

Current Dividend Yield


Dividend Yield vs Market

Notable Dividend: PFBC's dividend (3.14%) is higher than the bottom 25% of dividend payers in the US market (1.48%).

High Dividend: PFBC's dividend (3.14%) is low compared to the top 25% of dividend payers in the US market (4.14%).


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 6 years.


Current Payout to Shareholders

Dividend Coverage: With its reasonably low payout ratio (26.3%), 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 (25.9% payout ratio).


Next Steps

Management

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

10.6yrs

Average management tenure


CEO

Li Yu (79 yo)

27.92yrs

Tenure

US$4,692,258

Compensation

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 ($USD4.69M) is above average for companies of similar size in the US market ($USD1.79M).

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


Leadership Team

NamePositionTenureCompensationOwnership
Li Yu
Chairman27.92yrsUS$4.69m5.07%
$ 28.9m
Wellington Chen
President & COO8.33yrsUS$1.39m0.20%
$ 1.1m
Edward Czajka
Executive VP & CFO14.58yrsUS$923.05k0.16%
$ 895.3k
Nick Pi
Executive VP & Chief Credit Officer5.5yrsUS$784.26k0.027%
$ 152.0k
Johnny Hsu
Executive VP & Deputy COO2.92yrsUS$523.53k0.016%
$ 89.2k
Robert Kosof
Executive Vice President of Commercial Lending12.83yrsUS$476.86kno data
Sandy Ho
Executive VP & Regional Managerno dataUS$169.42kno data
Stella Chen
Senior Vice Presidentno dataUS$172.26kno data
Erika Chi
Executive Vice Presidentno datano datano data
Ted Hsu
Executive Vice Presidentno datano datano data
Alice Huang
Executive Vice Presidentno datano datano data
Pamela Lau
Executive Vice Presidentno datano datano data

10.6yrs

Average Tenure

60yo

Average Age

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


Board Members

NamePositionTenureCompensationOwnership
Li Yu
Chairman27.92yrsUS$4.69m5.07%
$ 28.9m
J. Belliston
Independent Director17.92yrsUS$153.75k0.10%
$ 573.2k
Wayne Wu
Independent Director7.5yrsUS$140.25k0.10%
$ 575.6k
Gary Nunnelly
Independent Director29.92yrsUS$151.25k0.19%
$ 1.1m
Chih-Wei Wu
Independent Director8.08yrsUS$130.75k0.96%
$ 5.5m
William C. Cheng
Independent Director25.92yrsUS$146.25k0.65%
$ 3.7m
Clark Hsu
Independent Vice Chairman of the Board9.58yrsUS$150.75k1.12%
$ 6.4m
Shirley Wang
Independent Director2.25yrsUS$130.75k0.032%
$ 182.6k
Kathleen Shane
Independent Director1.75yrsUS$126.00k0.027%
$ 152.8k

9.6yrs

Average Tenure

60yo

Average Age

Experienced Board: PFBC's board of directors are considered experienced (9.6 years average tenure).


Ownership

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


Insider Trading Volume

Insider Buying: Insufficient data to determine if insiders have bought more shares than they have sold 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$568.979m
  • Shares outstanding: 14.89m
  • 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

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

Biography

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...


Company Analysis and Financial Data Status

All financial data provided by Standard & Poor's Capital IQ.
DataLast Updated (UTC time)
Company Analysis2020/12/02 23:55
End of Day Share Price2020/12/02 00:00
Earnings2020/09/30
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.