Company Overview - Preferred Bank (PFBC) is headquartered in Los Angeles and has experienced a price change of -2.35% this year [3] - The bank currently pays a dividend of $0.80 per share, resulting in a dividend yield of 3.47%, which is higher than the Banks - West industry's yield of 2.76% and the S&P 500's yield of 1.35% [3] Dividend Performance - The current annualized dividend of Preferred Bank is $3.20, reflecting a 6.7% increase from the previous year [4] - Over the past 5 years, the bank has increased its dividend 5 times, achieving an average annual increase of 23.36% [4] - The current payout ratio is 30%, indicating that the bank pays out 30% of its trailing 12-month earnings per share as dividends [4] Earnings Expectations - The Zacks Consensus Estimate for Preferred Bank's earnings in 2026 is $10.55 per share, with an expected increase of 1.34% from the previous year [5] - The bank is anticipated to experience earnings expansion this fiscal year [5] Investment Appeal - Preferred Bank is considered an attractive dividend play and a compelling investment opportunity, holding a Zacks Rank of 2 (Buy) [6]

Core Insights - Preferred Bank reported a net income of $34.8 million for Q4 2025, translating to $2.79 per share, and a total annual income of $134 million or $10.41 per share, positioning it among the top tier of the banking industry [1][3] - The bank experienced a decline in interest margin due to federal rate cuts, impacting its floating rate loan portfolio, which constitutes 70% of its loans [1][4] - Despite challenges, loan demand is strengthening, with total loan growth of $182 million (over 12%) and deposit growth of $115 million (7.4%) for the quarter [4] Financial Performance - The bank's profitability metrics indicate a strong performance, with a full-year net income of $134 million [1] - Nonperforming assets saw a slight decline, while criticized assets increased by $97 million due to a large loan being classified [5] - The loan loss provision for the quarter was $4.3 million, reflecting a cautious approach to credit risk management [5] Market Conditions - The cost of deposits remains high, with a total cost of deposits at 3.17% for December, slightly down from previous months [7] - The bank anticipates a stable growth environment for 2026, with customers expressing improved outlooks [5] - The competitive landscape for deposits remains strong, with large money center banks actively promoting CDs [16] Loan and Deposit Growth - Loan growth for the year was reported at 7.3%, while deposit growth was at 7.2% [4] - The bank is budgeting for higher loan growth in 2026, focusing on commercial real estate and C&I loans [20] - Approximately $1.3 billion in CDs are maturing in Q1 at a weighted average rate of 3.96%, with new CDs expected to come in at around 3.70% to 3.80% [12] Credit Quality and Risk Management - The bank is closely monitoring classified loans, with a significant relationship under scrutiny due to litigation with other banks [24][33] - The bank's reserve for credit losses is deemed adequate, with a Q factor reserve around 42.5% [36] - Management is optimistic about resolving credit issues within the next two quarters [38]

Analysts asked about deposit betas and whether deposit repricing would improve if additional Fed cuts occur. Czajka said the path will depend not only on rates but also on competitive pressure for deposits, which management described as “very, very strong.” The bank expects a continued pattern of CDs rolling off and coming back on at lower rates, though Czajka noted that new CD rates have not declined as much as management expected given the Fed’s actions.Chief Financial Officer Edward Czajka provided addit ...

Financial Data and Key Metrics Changes - For Q4 2025, the net income was $34.8 million, or $2.79 per share, while the full-year net income was $434 million, or $10.41 per share, indicating strong profitability within the banking industry [5][6] - The net interest margin for Q4 declined due to federal rate cuts, with a total cost of deposits reported at 3.17% for December [5][12] - Total loan growth for the quarter was $182 million, or over 12%, and deposit growth was $115 million, or 7.4% [6][8] Business Line Data and Key Metrics Changes - The bank's loan portfolio is 70% floating-rate, which has been impacted by recent federal rate cuts [5] - Non-performing assets slightly declined, but criticized assets increased by $97 million due to a large nine-loan relationship being classified [7] Market Data and Key Metrics Changes - Economists forecast 2026 to be a year of relative growth and stability, with improved customer outlooks for the year [8] Company Strategy and Development Direction - The company is focusing on commercial real estate and C&I loans for growth opportunities, budgeting higher numbers than the previous year [40] - The management is cautious about share repurchases, indicating that funds will likely be reserved for loan growth and deposit situations [41] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism for 2026, expecting stronger loan demand and a stable market environment compared to previous downturns [8][40] - The company is actively monitoring classified loans and is prepared to take necessary actions if customers do not resolve their issues [36][42] Other Important Information - The company sold two large pieces of OREO, resulting in a net gain of $1.8 million, which was included in non-interest income [7] - The provision for loan losses was $4.3 million for the quarter, reflecting a combination of loan growth and specific reserves [91] Q&A Session Summary Question: Margin visibility and deposit costs - The margin for December was 3.66%, with a total cost of deposits at 3.17% [12] Question: Deposit competition and rates - The deposit beta is around 40%, with expectations of a similar pattern in deposit costs moving forward [13] Question: Loan growth expectations - Loan growth is expected to step up from the previous year's pace, with a similar growth rate for deposits [14][15] Question: Non-interest expenses guidance - The forecast for non-interest expenses is around $21.5 to $22 million for the first quarter [16][18] Question: CD maturities and rates - About $1.3 billion in CDs are maturing in Q1 at a weighted average rate of 3.96% [22] Question: Classified loans and workout strategies - The management is optimistic about resolving classified loans within two quarters, with various options available [42][44] Question: Fee income baseline for 2026 - The Q4 fee income, excluding one-time impacts, is considered a good baseline for 2026 [57] Question: M&A appetite - The company is reviewing potential M&A opportunities but is cautious about pricing structures [65]

Financial Data and Key Metrics Changes - For Q4 2025, the net income was $34.8 million, or $2.79 per share, while the full-year net income was $434 million, or $10.41 per share, indicating strong profitability within the banking industry [4] - The net interest margin for Q4 declined due to federal rate cuts, with a margin of 3.66% in December, slightly below the quarterly average [11] - Total loan growth for the quarter was $182 million, or over 12%, while deposit growth was $115 million, or 7.4% [5] Business Line Data and Key Metrics Changes - The bank's loan portfolio is 70% floating-rate, which was impacted by federal rate cuts, reducing loan interest income [4] - Non-performing assets slightly declined, but criticized assets increased by $97 million due to a large nine-loan relationship being classified [6] Market Data and Key Metrics Changes - Economists forecast 2026 to be a year of relative growth and stability, with improved customer outlooks for the year [7] Company Strategy and Development Direction - The company is focusing on commercial real estate and C&I loans for growth, budgeting higher numbers than the previous year [37] - The management is cautious about share repurchases, indicating that funds will likely be reserved for loan growth and deposit situations [39] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism for 2026, expecting stronger loan demand and growth barring sudden changes in government policy [7] - The company is monitoring the competitive landscape for deposits, noting strong competition from larger banks [29] Other Important Information - The company sold two large pieces of OREO, resulting in a net gain of $1.8 million, which was reported in non-interest income [5] - The provision for loan losses for the quarter was $4.3 million, reflecting a combination of loan growth and specific reserves for certain loans [86] Q&A Session Summary Question: Margin visibility and deposit costs - The margin for December was 3.66%, with total cost of deposits at 3.17% [11] Question: Deposit beta and future expectations - Deposit beta is expected to remain around five to six basis points a month, influenced by rate cuts and competition [12] Question: Loan growth expectations - Loan growth is expected to step up from the previous year's pace, with a similar growth rate for deposits [13] Question: Non-interest expenses guidance - The forecast for non-interest expenses is around $21.5 to $22 million for the first quarter [14] Question: Update on CD maturities - About $1.3 billion in CDs are maturing in Q1 at a weighted average rate of 3.96% [20] Question: Classified loans and workout strategies - The company is optimistic about resolving classified loans, with a timeline of approximately two quarters for resolution [41] Question: Fee income baseline for 2026 - The Q4 fee income, excluding one-time impacts, is considered a good baseline for 2026 [54] Question: Share repurchases and M&A appetite - The company is cautious about share repurchases and is evaluating M&A opportunities, but pricing structures are not currently satisfactory [62]

Financial Data and Key Metrics Changes - For Q4 2025, the net income was $34.8 million, or $2.79 per share, while the full year net income was $434 million, or $10.41 per share, indicating strong profitability within the banking industry [4] - The net interest margin for Q4 declined due to federal rate cuts, with a margin of 3.66% in December, slightly below the quarterly average [11][12] - Total loan growth for the quarter was $182 million, or over 12%, while deposit growth was $115 million, or 7.4% [5] Business Line Data and Key Metrics Changes - The bank's loan portfolio is 70% floating-rate, which was impacted by federal rate cuts, reducing loan interest income [4] - Non-performing assets slightly declined, but criticized assets increased by $97 million due to a large nine-loan relationship being classified [5] Market Data and Key Metrics Changes - Economists forecast 2026 to be a year of relative growth and stability, with improved customer outlooks for the year [6] Company Strategy and Development Direction - The company aims to grow loan demand, budgeting for higher numbers than the previous year, particularly in commercial real estate and C&I loans [37] - The management is cautious about share repurchases, indicating that funds will likely be reserved for loan growth and deposit situations [39] Management Comments on Operating Environment and Future Outlook - Management expressed optimism for 2026, expecting it to be a growth year barring sudden changes in government policy [6] - The competitive landscape for deposits remains strong, with local and large money center banks actively promoting CDs [29] Other Important Information - The bank sold two large pieces of OREO, resulting in a net gain of $1.8 million, which was reported in non-interest income [5] - The provision for loan losses was $4.3 million for the quarter, reflecting a combination of loan growth and specific reserves for certain loans [70] Q&A Session Summary Question: What is the spot rate on deposits and average margin for December? - The margin for December was 3.66%, and the total cost of deposits was 3.17% [11] Question: What are the expectations for deposit beta going forward? - Deposit beta is expected to remain around five to six basis points a month, depending on rate cuts and competition [12] Question: What is the forecast for non-interest expenses? - The forecast for non-interest expenses is expected to grow in the mid to high single digits [38] Question: What is the status of the classified loans? - The classified loans are currently behind in interest service, primarily due to litigation involving other banks [68] Question: What is the outlook for M&A activity? - The company is reviewing a few potential M&A deals but is cautious about pricing structures [61]

For the quarter ended December 2025, Preferred Bank (PFBC) reported revenue of $78.07 million, up 7.2% over the same period last year. EPS came in at $2.79, compared to $2.25 in the year-ago quarter.The reported revenue compares to the Zacks Consensus Estimate of $76.3 million, representing a surprise of +2.32%. The company delivered an EPS surprise of +0.45%, with the consensus EPS estimate being $2.78.While investors closely watch year-over-year changes in headline numbers -- revenue and earnings -- and h ...

Preferred Bank (PFBC) came out with quarterly earnings of $2.79 per share, beating the Zacks Consensus Estimate of $2.78 per share. This compares to earnings of $2.25 per share a year ago. These figures are adjusted for non-recurring items.This quarterly report represents an earnings surprise of +0.45%. A quarter ago, it was expected that this independent commercial bank would post earnings of $2.57 per share when it actually produced earnings of $2.84, delivering a surprise of +10.51%.Over the last four qu ...

Core Viewpoint Preferred Bank reported its financial results for the fourth quarter of 2025, showing a net income of $34.8 million, a decrease from the previous quarter but an increase compared to the same quarter last year. The results reflect challenges in net interest income due to declining market interest rates, alongside growth in loans and deposits. Financial Performance - The net income for the fourth quarter of 2025 was $34.8 million or $2.79 per diluted share, down $1.1 million from the prior quarter but up $4.6 million year-over-year [1][2] - For the full year 2025, net income was $133.6 million or $10.41 per diluted share, compared to $130.7 million or $9.64 per diluted share in 2024 [12] - The net interest margin for the fourth quarter was 3.74%, down from 3.92% in the previous quarter, primarily due to Federal Reserve interest rate cuts [3][10] Loan and Deposit Growth - Loan growth for the quarter was $182.3 million, representing a 12.4% annualized increase, while deposit growth was $115.8 million, or 7.4% annualized [4] - Total loans at December 31, 2025, were $6.05 billion, an increase of $413.6 million from the previous year, and total deposits were $6.35 billion, up $428.6 million [13] Noninterest Income and Expenses - Noninterest income for the fourth quarter was $8.1 million, significantly higher than $3.6 million in the same quarter last year, driven by a $3.6 million gain on the sale of OREO properties [7] - Total noninterest expense was $24.4 million for the fourth quarter, up from $21.5 million in the previous quarter but down from $28.2 million year-over-year [8][10] Asset Quality - Non-accrual loans and loans 90 days or more past due totaled $51.3 million, an increase from $17.6 million in the prior quarter, primarily due to a large multi-family loan placed into nonaccrual status [14] - Total criticized assets increased to $248.5 million at year-end, up from $151.0 million at the end of the previous quarter [14] Capitalization and Ratios - As of December 31, 2025, the tangible capital ratio was 10.38%, and the total capital ratio was 14.47% [16] - The return on average assets was 1.82%, and the return on average equity was 17.59% for the fourth quarter [9][10]

Core Viewpoint - Preferred Bank is set to release its financial results for Q4 2025 on January 22, 2026, with a conference call scheduled for the same day to discuss the results and outlook [1][3]. Group 1: Financial Results Announcement - Preferred Bank will announce its financial results for the fourth quarter ended December 31, 2025, before the market opens on January 22, 2026 [1]. - A conference call will be held on the same day at 2:00 p.m. Eastern (11:00 a.m. Pacific) to discuss the financial results [1]. Group 2: Conference Call Details - Participants can access the conference call by dialing 844-826-3037 (domestic) or 412-317-5182 (international) and referencing "Preferred Bank" [2]. - A live webcast of the call will be available on Preferred Bank's Investor Relations website [2]. - A replay of the call will be accessible until February 5, 2026, with specific dial-in numbers provided for domestic and international listeners [3]. Group 3: Company Overview - Preferred Bank is one of the larger independent commercial banks in California, chartered by the State of California, with deposits insured by the FDIC [4]. - The bank operates from its main office in Los Angeles and has twelve full-service branches in California, as well as branches in New York and Texas [4]. - Preferred Bank offers a wide range of deposit and loan products to commercial and consumer customers, focusing on small and mid-sized businesses, entrepreneurs, and high net worth individuals [4].