Preferred Bank (PFBC)
NASDAQ:PFBC
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Preferred Bank
(NASDAQ:PFBC)
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Rating:75Outperform
Price Target:
$106.00
â–²(10.74% Upside)
Action:ReiteratedDate:04/22/26
PFBC scores well due to strong underlying financial performance (profitability and cash conversion) and attractive valuation (low P/E). Technicals are supportive with price above key moving averages, but the latest earnings call adds meaningful risk considerations—especially the large nonaccrual relationship and margin/funding-pressure uncertainty—which temper the overall score.
Positive Factors
Cash generation
Free cash flow nearly matches reported net income and grew ~36% TTM, indicating durable cash conversion from operations. This strengthens the bank's ability to fund loan loss provisions, buybacks, dividends and working capital without relying on volatile external financing.
Negative Factors
Material credit concentration
A single ~ $177M nonaccrual relationship is a sizeable exposure relative to the bank and creates structural credit risk. Resolution uncertainty (sales, bankruptcies, foreclosures) can force provisioning, erode capital ratios and compress earnings over several quarters.
Read all positive and negative factors
Positive Factors
Negative Factors
Cash generation
Free cash flow nearly matches reported net income and grew ~36% TTM, indicating durable cash conversion from operations. This strengthens the bank's ability to fund loan loss provisions, buybacks, dividends and working capital without relying on volatile external financing.
Read all positive factors
Preferred Bank (PFBC) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$1.27B
Dividend Yield2.99%
Average Volume (3M)81.21K
Price to Earnings (P/E)8.8
Beta (1Y)0.77
Revenue Growth-0.42%
EPS Growth14.20%
CountryUS
Employees323
SectorFinancial
Sector Strength70
IndustryBanks - Regional
Share Statistics
EPS (TTM)2.53
Shares Outstanding13,392,737
10 Day Avg. Volume83,173
30 Day Avg. Volume81,213
Financial Highlights & Ratios
PEG Ratio1.08
Price to Book (P/B)1.51
Price to Sales (P/S)2.38
P/FCF Ratio7.13
Enterprise Value/Market Cap0.54
Enterprise Value/Revenue1.37
Enterprise Value/Gross Profit2.48
Enterprise Value/Ebitda3.61
Forecast
1Y Price Target
$105.00Price Target Upside9.69% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering3
EPS Forecast (FY)10.53
Revenue Forecast (FY)$293.29M
Preferred Bank Business Overview & Revenue Model
Company Description
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. T...
How the Company Makes Money
Preferred Bank primarily earns money through traditional banking activities. Its largest revenue driver is typically net interest income: the bank collects interest on loans (such as commercial real estate loans, business loans, and other credit p...
Preferred Bank Earnings Call Summary
Earnings Call Date:Apr 22, 2026
(Q1-2026)
| % Change Since: |
Next Earnings Date:Jul 29, 2026
Earnings Call Sentiment Neutral
The call presents a mixed picture: solid first-quarter profitability, active capital deployment (share repurchase), controlled expenses, and meaningful progress reducing a large nonperforming relationship are positives. However, a material nonaccrual exposure (~$177M), a quarter-to-quarter NIM decline (~17 bps) driven by a nonrecurring interest reversal, sustained competitive pricing pressure, slower deposit-cost relief, and macro/geopolitical uncertainty temper the outlook. Management expects some margin normalization in Q2 and continues active remediation of problem assets, but near-term uncertainty remains.Positive Updates
Profitability — Q1 Net Income and EPS
Reported first quarter net income of $31.3 million and EPS of $2.53, demonstrating continued profitability despite headwinds.
Negative Updates
Large Nonperforming Relationship
A nine-loan relationship placed on nonaccrual totaling about $177M is a material credit event; resolution is in progress (note sales, bankruptcies, potential foreclosures) but remains uncertain and is a meaningful near-term drag.
Read all updates
Q1-2026 Updates
Positive
Negative
Profitability — Q1 Net Income and EPS
Reported first quarter net income of $31.3 million and EPS of $2.53, demonstrating continued profitability despite headwinds.
Read all positive updates
Company Guidance
Management guided that it expects substantial resolution of the large nine‑loan nonaccrual relationship (originally about $177M of CRE plus ~$2M of two C&I loans) by Q3 after reducing the relationship roughly 50% via sales (one loan sold at par for $9.4M and two loans sold at par for $48.5M on April 1; part of $76M held‑for‑sale included the $48.5M); reported Q1 net income of $31.3M ($2.53/sh), sequential loan growth of 1.1% and deposit growth of 1.2%, Q1 NIM of 3.57% (down from 3.74% in Q4) with a $3.4M interest‑income reversal but March NIM at 3.71% and an expected NIM around ~3.70% in Q2, March deposit cost of 3.10%, $1.35B of CDs maturing this quarter at a 3.89% rate (likely to reprice similar or slightly lower), noninterest expense of ~$23.5M in Q1 (including >$1M of payroll‑tax items) with Q2 expense expected in the high $22M–low $23M range, roughly 400k shares repurchased at about $89.90/share, a loan book mix about 75/25 variable-to-fixed, and a shift from prior internal high‑single‑digit loan growth guidance toward a more cautious stance given geopolitical uncertainty.Preferred Bank Financial Statement Overview
Summary
Income Statement
78
Positive
Balance Sheet
71
Positive
Cash Flow
82
Very Positive
| Breakdown | Dec 2025 | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 |
|---|---|---|---|---|---|
Income Statement | |||||
| Total Revenue | 499.04M | 520.43M | 481.76M | 301.43M | 218.78M |
| Gross Profit | 274.30M | 271.86M | 283.14M | 247.05M | 194.62M |
| EBITDA | 189.55M | 186.18M | 211.57M | 181.09M | 135.72M |
| Net Income | 133.63M | 130.66M | 150.04M | 128.84M | 95.24M |
Balance Sheet | |||||
| Total Assets | 7.60B | 6.92B | 6.66B | 6.43B | 6.05B |
| Cash, Cash Equivalents and Short-Term Investments | 827.10M | 765.51M | 1.20B | 1.18B | 1.48B |
| Total Debt | 383.81M | 165.46M | 168.00M | 168.94M | 170.62M |
| Total Liabilities | 6.81B | 6.16B | 5.96B | 5.79B | 5.46B |
| Stockholders Equity | 789.48M | 763.15M | 695.11M | 630.43M | 586.72M |
Cash Flow | |||||
| Free Cash Flow | 166.79M | 163.60M | 172.98M | 143.40M | 119.03M |
| Operating Cash Flow | 168.14M | 164.52M | 175.39M | 143.76M | 119.63M |
| Investing Cash Flow | -623.80M | -421.62M | -98.03M | -699.89M | -620.01M |
| Financing Cash Flow | 497.24M | 131.76M | 65.97M | 273.05M | 791.52M |
Preferred Bank Technical Analysis
Positive
95.72
Price Trends
89.99
Positive
91.73
Positive
90.77
Positive
Market Momentum
1.64
Negative
69.38
Neutral
82.90
Negative
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For PFBC, the sentiment is Positive. The current price of 95.72 is above the 20-day moving average (MA) of 91.39, above the 50-day MA of 89.99, and above the 200-day MA of 90.77, indicating a bullish trend. The MACD of 1.64 indicates Negative momentum. The RSI at 69.38 is Neutral, neither overbought nor oversold. The STOCH value of 82.90 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for PFBC.
Preferred Bank Peers Comparison
UnderperformOutperform
Sector (68)
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
77 Outperform | $1.33B | 11.58 | 12.26% | 3.70% | -11.52% | -10.26% | |
75 Outperform | $1.27B | 8.81 | 17.48% | 2.99% | -0.42% | 14.20% | |
73 Outperform | $1.32B | 8.20 | 12.27% | 2.57% | -2.39% | 6.90% | |
73 Outperform | $1.54B | 9.42 | 11.20% | 1.34% | 2.93% | 13.80% | |
70 Outperform | $1.47B | 8.92 | 6.32% | 2.68% | 39.87% | -5.48% | |
68 Neutral | $18.00B | 11.42 | 9.92% | 3.81% | 9.73% | 1.22% | |
64 Neutral | $1.63B | 18.95 | 10.83% | 3.99% | 13.74% | 5.34% |
* Financial Sector Average
PFBC
Preferred Bank
95.47
15.93
20.03%
RBCAA
Republic Bancorp
76.28
7.76
11.32%
WABC
Westamerica Bancorporation
55.26
7.91
16.69%
CNOB
ConnectOne Bancorp
29.37
6.47
28.25%
BY
Byline Bancorp
32.56
6.94
27.09%
BFC
Bank First National
142.76
33.28
30.40%
Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.