This California bank pays a small dividend, just increased by 20%, is seeing growth in loans and deposits and analysts have recently raised earnings estimates.
Preferred Bank (PFBC)
from Upside
Preferred Bank (PFBC) operates in California, where it conducts business through 11 branches. The bank serves commercial and consumer customers, focusing on lending to small and midsized businesses. On Dec. 31, Preferred Bank had a record $2.05 billion in assets, up 16% from a year earlier.
The profit outlook appears bright, reflecting improved asset quality, tighter cost control, and solid growth in loans and deposits. Last year, total loans increased 21%. Preferred Bank earns an Overall score of 92, versus an average of 69 for the 392 regional banks in Quadrix.
Analyst estimates are rising, with the consensus now projecting per-share profits will grow 11% in 2015 and 7% in 2015. Shares have advanced 36% above their June low but still seem reasonably valued. At 16 times trailing earnings, the stock trades below the median P/E of 17 for financials in the S&P 1500 Index.
Preferred Bank, raised its per-share dividend 20% in March. The stock is being initiated as a Buy.
Richard J. Moroney, CFA, Upside, www.upsidestocks.com, 800-233-5922, April 6, 2015