Preferred Bank Raises Quarterly Dividend to $0.75 Per Investing.com Share

LOS ANGELES – Preferred Bank (NASDAQ:PFBC), a leading independent commercial bank in California, today announced an increase in its quarterly cash dividend. The bank’s board of directors approved an increase from $0.70 to $0.75 per share, an increase of 7.1%. The increased dividend will be paid out on January 23, 2025 to shareholders entered in the share register on January 9, 2025. According to data from InvestingPro, the bank continues its impressive record of increasing its dividend for four years in a row, with a current yield of 3.2%.

Preferred Bank operates its headquarters in Los Angeles and maintains a network of branches throughout California, including locations such as Alhambra, Century City and San Francisco. It also has offices in Flushing, New York, and Sugar Land, Texas. The bank offers a variety of deposit and lending services to commercial and retail customers, from real estate finance and business loans to trade finance. With a market capitalization of $1.16 billion and a price-to-earnings (P/E) ratio of 8.6, the bank has demonstrated strong financial performance, as highlighted in the comprehensive analysis on InvestingPro.

The bank’s customer base is diverse. It was originally founded to serve the Chinese American community but has since expanded its services to a broader mainstream market. At the same time, they continue to support the immigration of ethnic Chinese from China and other East Asian regions.

This dividend increase reflects Preferred Bank’s financial growth and commitment to providing value to its shareholders. The Bank operates a credit office in Sunnyvale, California, and a satellite branch in Manhattan, New York, enabling it to provide personalized banking services to a broad range of customers, including to mid-sized businesses, entrepreneurs, real estate developers, professionals and high net worth individuals.

The information for this report is based on a press release from Preferred Bank. The Bank is chartered by California and its deposits are insured by the Federal Deposit Insurance Corporation (FDIC) to the maximum extent permitted by law.

In other recent news, Preferred Bank reported strong third-quarter results with net income of $33.6 million, or $2.46 per share, showing significant loan growth and improving net interest margin. The bank also managed to reduce non-performing loans without charge-offs and achieve an interest recovery of $800,000. However, they recorded an increase in criticized loans and a slight disadvantage in deposits.

Financial services firm Stephens maintained its Overweight rating on Preferred Bank and raised its price target from $90.00 to $94.00 after the bank reported its latest quarterly results. The new operating earnings per share (EPS) forecast for 2025 was raised from $7.87 to $8.55, primarily due to a stronger-than-expected net interest margin (NIM) and higher net interest income (NII).

Despite a robust NIM performance in the third quarter, Stephens expects an opportunity in the fourth quarter. The expected slowdown is attributed to the bank’s deposit-heavy portfolio, which may take longer to reprice, compared to the 74% of loans that are floating rate.

Looking forward, Stephens predicts that NIM will begin to stabilize in the second half of 2025, with potential for moderate expansion thereafter. Preferred Bank is expanding in strategic markets and hiring experienced bankers, indicating a robust strategy for future growth. These are some of the recent developments regarding Preferred Bank.

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