Preferred Bank (PFBC)
NASDAQ:PFBC
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Preferred Bank
(NASDAQ:PFBC)
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Rating:72Outperform
Price Target:
$100.00
â–²(9.43% Upside)
Action:UpgradedDate:03/06/26
The score is driven primarily by strong underlying financial performance and an attractive valuation (low P/E with a solid dividend). These positives are tempered by weaker technical momentum and earnings-call risks tied to net interest margin pressure and elevated credit/classified-asset concerns.
Positive Factors
Profitability & Cash Generation
Sustained high margins and near‑par free cash flow conversion indicate durable earnings quality. Strong FCF growth supports internal funding for loan growth, reserves, and shareholder returns, providing a structural buffer through economic cycles and limiting reliance on external financing.
Negative Factors
Margin Pressure & Deposit Costs
Persistent deposit pricing and Fed rate cut impacts create durable NIM headwinds. Large CD rollovers and a high deposit beta mean funding repricing will erode spread income over multiple quarters, pressuring core profitability unless loan yields or funding mix materially improve.
Read all positive and negative factors
Positive Factors
Negative Factors
Profitability & Cash Generation
Sustained high margins and near‑par free cash flow conversion indicate durable earnings quality. Strong FCF growth supports internal funding for loan growth, reserves, and shareholder returns, providing a structural buffer through economic cycles and limiting reliance on external financing.
Read all positive factors
Preferred Bank (PFBC) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$1.22B
Dividend Yield2.99%
Average Volume (3M)81.21K
Price to Earnings (P/E)8.9
Beta (1Y)0.76
Revenue Growth-3.05%
EPS Growth-0.51%
CountryUS
Employees323
SectorFinancial
Sector Strength70
IndustryBanks - Regional
Share Statistics
EPS (TTM)2.79
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 Cap0.58
Enterprise Value/Revenue1.41
Enterprise Value/Gross Profit2.54
Enterprise Value/Ebitda3.70
Forecast
1Y Price Target
$100.50Price Target Upside9.98% Upside
Rating ConsensusHold
Number of Analyst Covering4
EPS Forecast (FY)10.37
Revenue Forecast (FY)$293.81M
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 generates revenue primarily through the interest earned on loans and investments. The bank offers various types of loans, including commercial real estate loans, construction loans, and personal loans, which typically have higher in...
Preferred Bank Earnings Call Summary
Earnings Call Date:Jan 22, 2026
(Q4-2025)
| % Change Since: |
Next Earnings Date:Apr 21, 2026
Earnings Call Sentiment Neutral
The call presents a mix of clear strengths—strong full‑year earnings, solid loan and deposit growth, successful one‑time OREO monetizations, and management optimism for 2026—alongside meaningful challenges: margin pressure from rate cuts combined with still‑high deposit costs, a material classified loan relationship that increased criticized assets and includes payment slowdowns and litigation exposure, and modestly higher provisioning/expense variability. Management expects to resolve classified loan issues within a couple of quarters, is budgeting for higher loan growth in 2026, and reports substantial reserve coverage, but the credit issue and margin dynamics temper the near‑term outlook.Positive Updates
Strong Full-Year Profitability
Net income for 2025 was $134.0 million ($10.41 per share); Q4 net income was $34.8 million ($2.79 per share). Management states 2025 profitability is among the top tier of the banking industry.
Negative Updates
Margin Pressure from Fed Rate Cuts and High Deposit Costs
Net interest margin declined in Q4 versus Q3 due to federal rate cuts combined with a 70% floating rate loan portfolio which reduced loan interest income; deposit costs remain stubbornly high and competitive pressures persist.
Read all updates
Q4-2025 Updates
Positive
Negative
Strong Full-Year Profitability
Net income for 2025 was $134.0 million ($10.41 per share); Q4 net income was $34.8 million ($2.79 per share). Management states 2025 profitability is among the top tier of the banking industry.
Read all positive updates
Company Guidance
Management’s guidance emphasized continued margin pressure from Fed rate cuts (December margin 3.66%; December total deposit cost 3.17%, down ~6–7 bps/month) with a ~40% beta on interest‑bearing deposits and expected ongoing CD repricing of roughly 5–6 bps/month; about $1.3B of CDs roll in Q1 at a weighted average 3.96% and are repricing to ~3.70–3.80%. They see loan demand strengthening in 2026 (70% of loans floating), are budgeting higher loan growth than 2025 (2025: quarterly loan growth $182M or >12%; full‑year loan/deposit growth 7.3%/7.2%; Q4 deposit growth $115M or 7.4%), and noted a Q4 provision of $4.3M, slight decline in NPAs but a ~$97M increase in criticized/classified assets. Expense guidance is a Q1 run‑rate of about $21.5–22M with full‑year noninterest expense growth expected in the mid‑ to high‑single digits; Q4 OREO sales produced a $1.8M gain (roughly $0.20 EPS benefit), and share buybacks/M&A will be opportunistic depending on funding needs.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
91.38
Price Trends
88.47
Positive
91.34
Positive
90.32
Positive
Market Momentum
0.50
Negative
60.54
Neutral
59.39
Neutral
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 91.38 is above the 20-day moving average (MA) of 88.85, above the 50-day MA of 88.47, and above the 200-day MA of 90.32, indicating a bullish trend. The MACD of 0.50 indicates Negative momentum. The RSI at 60.54 is Neutral, neither overbought nor oversold. The STOCH value of 59.39 is Neutral, 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 |
|---|---|---|---|---|---|---|---|
72 Outperform | $1.22B | 8.90 | 16.91% | 2.99% | -3.05% | -0.51% | |
71 Outperform | $1.28B | 10.23 | 12.53% | 3.70% | -13.17% | -16.37% | |
69 Neutral | $1.26B | 10.37 | 12.27% | 2.57% | 5.21% | 24.51% | |
69 Neutral | $1.47B | 10.05 | 10.77% | 1.34% | 1.31% | 2.02% | |
68 Neutral | $18.00B | 11.42 | 9.92% | 3.81% | 9.73% | 1.22% | |
65 Neutral | $1.55B | 16.76 | 11.29% | 3.99% | 14.13% | -12.75% | |
64 Neutral | $1.38B | 8.36 | 5.49% | 2.68% | 15.55% | -28.10% |
* Financial Sector Average
PFBC
Preferred Bank
91.38
14.61
19.03%
RBCAA
Republic Bancorp
71.96
10.63
17.33%
WABC
Westamerica Bancorporation
52.62
7.86
17.56%
CNOB
ConnectOne Bancorp
27.45
5.47
24.90%
BY
Byline Bancorp
32.32
7.95
32.63%
BFC
Bank First National
138.76
41.67
42.92%
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.