From a technical perspective, Preferred Bank (PFBC) is looking like an interesting pick, as it just reached a key level of support. PFBC's 50-day simple moving average crossed above its 200-day simple moving average, which is known as a "golden cross" in the trading world.There's a reason traders love a golden cross -- it's a technical chart pattern that can indicate a bullish breakout is on the horizon. This kind of crossover is formed when a stock's short-term moving average breaks above a longer-term mov ...

Core Insights - Preferred Bank reported a GAAP net income of $32.8 million, or $2.52 per share, in Q2 2025, reflecting a sequential increase driven by approximately 7% annualized loan growth and an expanded net interest margin (NIM) of 3.85% [1] Capital Management - The company executed a $56 million share buyback at an average price of $80.81 per share, significantly below the current market price of $97.03, and has secured authorization for an additional $125 million buyback program, which has not yet commenced due to valuation sensitivity [2][3] - Management's disciplined approach to capital return indicates a willingness to deploy excess capital opportunistically while adhering to valuation thresholds that enhance per-share value creation [3] Funding and Deposit Stability - Despite competitive pressures, the cost of deposits remained stable at around 3.41%, with maturing certificates of deposit (CDs) totaling $1.4 billion being renewed at or just under 4% in Q3, supporting stable NIM performance and deposit retention [4] - The company has maintained flat deposit balances through active cost controls, balancing competitive rate offers with funding needs [5] Loan Growth and Asset Quality - The commercial and industrial (C&I) and commercial construction portfolios drove approximately 7% annualized loan growth, with a decline in nonaccrual, criticized, and past-due loans quarter over quarter, indicating improved asset quality [6][7] - Management asserts that loan loss reserves remain adequate, and further signs of increasing loan demand have appeared, although caution is maintained due to macroeconomic uncertainties [6] Future Outlook - Management provided guidance that noninterest expense will be in the range of $21.8 million to $22.6 million in Q3 and Q4, excluding expectations of further other real estate owned write-downs [8] - A new Silicon Valley branch is scheduled to open in the second half of 2025, expanding the bank's geographic reach, although no explicit quantitative forward guidance was provided for net interest income, loan growth, or NIM [8]

Financial Data and Key Metrics Changes - Preferred Bank reported a net income of $32.8 million or $2.52 per share for Q2 2025, showing improvement from the previous quarter [6] - Loan growth was approximately 7% on an annualized basis, with indications of increased loan demand in July [6] - Net interest margin increased to 3.85% from 3.75% in the previous quarter [7] - The bank repurchased $56 million worth of stock during the quarter, which may have impacted net interest income and net interest margin [7] Business Line Data and Key Metrics Changes - The quality of assets improved, with decreases in non-accrual loans, criticized loans, and past due loans compared to the previous quarter [8] - The bank's loan loss reserve is deemed sufficient to cover any exposure [8] Market Data and Key Metrics Changes - Deposits remained flat, attributed to the bank's strategy to control deposit costs [7] - The average margin for June was reported at 3.83%, with a cost of deposits at 3.41% [13][14] Company Strategy and Development Direction - The bank aims to continue growing deposits while managing costs effectively [32] - There are plans for new branch openings, including a branch in Silicon Valley in the second half of the year [43] Management's Comments on Operating Environment and Future Outlook - Management expressed concerns about economic uncertainties, including tariffs, interest rates, and inflation, which could impact the operating environment [9] - The bank is closely monitoring clients affected by tariffs and supply chain issues, indicating a cautious approach to growth [46][48] Other Important Information - The bank's Manhattan branch is performing well in loan generation, indicating positive growth prospects [43] - The bank is cautious about stock buybacks due to current share prices being higher than in previous quarters [19] Q&A Session Summary Question: Inquiry about margin and cost of deposits - The margin for June was 3.83%, with a cost of deposits at 3.41%, remaining consistent throughout the quarter [13] Question: Update on loan growth and competition - Loan growth was stronger in Q2, particularly in commercial and industrial sectors, with increased demand noted in July [22][30] Question: Thoughts on OREO and credit quality - Management acknowledged challenges with OREO properties but noted overall credit quality remains stable [39] Question: Update on new branch performance - The Manhattan branch is performing well, with plans for further expansion in Silicon Valley [43] Question: Comments on economic uncertainties and client sentiment - Management highlighted ongoing uncertainties in the economy and the need for close monitoring of client situations [46][48]

Financial Data and Key Metrics Changes - Preferred Bank reported a net income of $32.8 million or $2.52 per share for the second quarter, showing improvement from the previous quarter [6] - Loan growth was approximately 7% on an annualized basis, with indications of increased loan demand in July [6][7] - Net interest margin increased to 3.85% from 3.75% in the previous quarter [7] - The bank repurchased $56 million in stock during the quarter, which may have impacted net interest income and net interest margin [7] Business Line Data and Key Metrics Changes - The quality of assets improved, with decreases in non-accrual loans, criticized loans, and past due loans compared to the previous quarter [8] - The bank's loan loss reserve is deemed sufficient to cover any exposure [8] Market Data and Key Metrics Changes - Deposits remained flat, attributed to the bank's strategy to control deposit costs [7] - The cost of deposits was reported at 3.41% for June, with a current offered rate around 4% [14][15] Company Strategy and Development Direction - The bank continues to focus on returning excess capital to shareholders through stock buybacks [7] - Management emphasized the importance of maintaining strong relationships with clients to navigate competitive pressures in the lending market [31] - Plans for organic expansion include opening a new branch in Silicon Valley in the second half of the year [45] Management Comments on Operating Environment and Future Outlook - Management expressed concerns about economic uncertainties, including tariffs, interest rates, and inflation, which could impact future operations [9] - The bank is closely monitoring the economic environment and its effects on clients, particularly regarding supply chain issues related to tariffs [48][50] Other Important Information - The bank received insurance reimbursement related to legal matters, which affected professional services costs [16] - The bank's strategy includes cautious evaluation of stock buybacks due to current share prices being higher than historical averages [20] Q&A Session Summary Question: Inquiry about margin and cost of deposits - The margin for June was reported at 3.83%, with a consistent cost of deposits around 3.41% [14] Question: Update on loan growth and pipeline - Loan growth was stronger in the second quarter, particularly in commercial and industrial sectors, with existing commitments funding construction loans [24][25] Question: Thoughts on competition and loan rates - Competition remains stiff, with lenders offering low fixed-rate loans, but the bank focuses on relationship-driven service [31] Question: Update on OREO and credit quality - Management noted ongoing challenges with a specific property but remains committed to resolving it without a fire sale [41][42] Question: Update on new branch performance - The Manhattan branch is performing well in loan generation, with plans for further expansion in Silicon Valley [45] Question: Client sentiment and growth acceleration - Management indicated that while some uncertainties may clear, the aftershock effects of tariffs remain unknown, impacting growth expectations [48][50]

Financial Performance - Net income for the second quarter ended June 30, 2025, was $32.8 million, translating to earnings per share of $2.52 [2][3][15] - The net interest margin (NIM) improved to 3.85% from 3.75% in the previous quarter [4][15] - Total operating expenses were $22.5 million, with guidance for the next couple of quarters ranging from $21.8 million to $22.6 million [5][22] Loan and Deposit Activity - The company experienced approximately 7% annualized loan growth, driven by commercial and industrial (C&I) line usage and construction commitments [3][7][15] - Deposit balances remained flat compared to the first quarter, as the company managed deposit costs deliberately [3][8][31] - $1.4 billion in certificates of deposit (CDs) are set to mature in Q3 2025 at an average rate of 4.21%, with current renewal rates slightly under 4% [5][21] Shareholder Returns and Capital Management - The company repurchased $56 million of common shares at an average price of $80.81 per share [4][24] - New share repurchase authorization of $125 million remains untapped due to valuation considerations [7][24] Asset Quality and Risk Management - There were decreases in nonaccrual, criticized, and past due loans compared to the previous quarter, with management stating that reserves are sufficient [4][16] - The company continues to monitor external uncertainties, including tariffs and inflation, which may impact borrowers [8][37] Branch Expansion and Future Outlook - A new branch in Manhattan is performing well in loan origination, with plans for a Silicon Valley branch in the second half of the year [6][35] - Management noted tentative signs of sustained loan demand entering July, although uncertainties remain regarding the economic environment [7][15][36]

Core Insights - Preferred Bank (PFBC) reported revenue of $70.65 million for the quarter ended June 2025, marking a year-over-year increase of 1.6% and exceeding the Zacks Consensus Estimate of $70.15 million by +0.71% [1] - The earnings per share (EPS) for the same period was $2.52, compared to $2.48 a year ago, with an EPS surprise of +3.7% against the consensus estimate of $2.43 [1] Financial Performance Metrics - Efficiency Ratio was reported at 31.8%, slightly higher than the estimated 31.3% by analysts [4] - Net Interest Margin stood at 3.9%, surpassing the average estimate of 3.8% [4] - Net charge-offs to average loans were 0%, significantly better than the estimated 0.3% [4] - Average Interest-Earning Assets were reported at $6.98 billion, matching the estimate [4] - Total noninterest income was $3.77 million, slightly above the estimated $3.73 million [4] - Net interest income before provision for credit losses was $66.87 million, exceeding the average estimate of $66.39 million [4] Stock Performance - Shares of Preferred Bank have returned +13.8% over the past month, outperforming the Zacks S&P 500 composite's +5.4% change [3] - The stock currently holds a Zacks Rank 3 (Hold), indicating potential performance in line with the broader market in the near term [3]

Preferred Bank (PFBC) came out with quarterly earnings of $2.52 per share, beating the Zacks Consensus Estimate of $2.43 per share. This compares to earnings of $2.48 per share a year ago. These figures are adjusted for non-recurring items.This quarterly report represents an earnings surprise of +3.70%. A quarter ago, it was expected that this independent commercial bank would post earnings of $2.33 per share when it actually produced earnings of $2.23, delivering a surprise of -4.29%.Over the last four qua ...

Core Viewpoint - Preferred Bank reported a net income of $32.8 million or $2.52 per diluted share for Q2 2025, reflecting a $2.8 million increase from the previous quarter but a slight decrease of $745,000 compared to the same quarter last year [1][2]. Financial Performance - Net interest income for Q2 2025 was $66.9 million, an increase of $4.2 million from the prior quarter and $767,000 from the same quarter last year [4]. - The net interest margin improved to 3.85%, up from 3.75% in the previous quarter but down from 3.96% in the same quarter last year [2][4]. - Noninterest income was $3.8 million, compared to $3.4 million in the same quarter last year and $4.0 million in the previous quarter [5]. Loan and Deposit Growth - The loan portfolio increased by 1.8% linked quarter, while deposits saw only a slight increase [2]. - Total loans reached $5.74 billion, an increase of $99.0 million from December 31, 2024 [9]. - Total deposits were $6.08 billion, up by $161.5 million from $5.92 billion as of December 31, 2024 [9]. Asset Quality - Non-accrual loans decreased from $78.9 million as of March 31, 2025, to $51.2 million at June 30, 2025 [3]. - Total criticized loans decreased to $104.5 million from $129.2 million in the prior quarter [10]. Noninterest Expense - Total noninterest expense was $22.5 million for Q2 2025, down from $23.4 million in the previous quarter but up from $19.7 million in the same period last year [6]. - The decrease from the prior quarter was primarily due to a reduction in personnel expenses [6]. Tax and Capitalization - The provision for income taxes was $13.7 million, resulting in an effective tax rate of 29.5% [7]. - As of June 30, 2025, the Bank's tangible capital ratio was 10.26%, and the total capital ratio stood at 14.43% [12].

Core Viewpoint - Preferred Bank plans to release its financial results for the second quarter of 2025 on July 21, 2025, before market opening, followed by a conference call to discuss the results and outlook [1][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, two branches in New York, and one in Texas, along with a Loan Production Office in Sunnyvale, California [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]. - Originally founded as a Chinese-American bank, it now serves a diversified mainstream market while still benefiting from the migration of ethnic Chinese to California [4]. Conference Call Details - The conference call will be hosted by key executives including Chairman and CEO Li Yu, President Wellington Chen, and CFO Edward J. Czajka, discussing financial results and business highlights [3]. - Participants can access the call via a domestic number (888-243-4451) or an international number (412-542-4135), with a live webcast available on the bank's website [2][3]. - A replay of the call will be available until July 28, 2025, with specific access numbers provided for domestic and international listeners [3].

Core Points - Preferred Bank has announced a new $125 million stock repurchase plan, which has been approved by shareholders [1] - The bank completed its previous $150 million stock repurchase plan, repurchasing a total of 2,146,252 shares at an average price of $70.13 per share [1] - The final tranche of the previous repurchase involved buying back 818,059 shares for $65.7 million [1] Company Overview - Preferred Bank is one of the largest independent commercial banks in California, chartered by the State of California and insured by the FDIC [3] - 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 [3] - 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 [3]