Preferred Bank announces quarterly dividend of $0.70 per share

LOS ANGELES - Preferred Bank (NASDAQ: NASDAQ:PFBC), a prominent independent commercial bank in California, announced a quarterly cash dividend of $0.70 per share. The dividend is scheduled to be paid on October 21, 2024, to shareholders of record as of October 7, 2024.

The bank, which is chartered by the State of California and has its deposits insured by the FDIC, operates from its main office in Los Angeles. It serves customers through a network of full-service branch banking offices located across California and branches in Flushing, New York, and Sugar Land, Texas. Preferred Bank also maintains a Loan Production Office in Sunnyvale, California, and a satellite office in Manhattan, New York.

The institution provides a variety of deposit and loan products and services to commercial and consumer clients. Its offerings include personalized deposit services, real estate finance, commercial loans, and trade finance, catering to small and mid-sized businesses, entrepreneurs, real estate developers, professionals, and high net worth individuals.

Initially founded to serve the Chinese-American community, Preferred Bank now largely caters to a diverse mainstream market while continuing to draw customers from the growing East Asian population in California.

This financial update is based on a press release statement from Preferred Bank.

In other recent news, Preferred Bank has been making significant strides in its financial performance and strategic initiatives. The bank recently received regulatory approval to continue with the remaining $77.5 million of its $150 million stock repurchase plan, a move set to continue until February 2025. This development is part of a shareholder-approved initiative to reduce the number of shares on the market and potentially increase the value of remaining shares.

In the financial sphere, Preferred Bank reported a strong second quarter with a net income of $33.6 million, or $2.48 per share, exceeding both analyst and consensus estimates. Despite a rise in non-performing loans and some charge-offs, the bank remains optimistic about its risk protection measures and future earnings.

The bank has also been the subject of positive analyst attention. Stephens raised its price target to $95, citing the bank's robust second-quarter performance. Similarly, Piper Sandler increased its stock price target to $105, reflecting an optimistic outlook for the bank's future earnings and performance relative to its peers.

Lastly, Preferred Bank has been actively repositioning its balance sheet, reducing its exposure to floating rate loans from 90% to approximately 75%. The bank is also implementing more loan floors to mitigate asset sensitivity in case of declining interest rates. These are among the recent developments that investors should consider.

InvestingPro Insights

Preferred Bank (NASDAQ: PFBC) has recently made headlines with its announcement of a quarterly cash dividend of $0.70 per share. Investors interested in PFBC's financial health can gain deeper insights with real-time data and analysis from InvestingPro. Here are some key metrics and tips:

The company's market capitalization stands at a robust $1.1 billion, indicating its significant presence in the market. With a Price-to-Earnings (P/E) ratio of 8.03, and an adjusted P/E ratio for the last twelve months as of Q2 2024 at 7.87, Preferred Bank appears to offer a potentially attractive valuation relative to earnings. Additionally, the bank has maintained a strong operating income margin of 75.31% over the same period, underscoring its operational efficiency.

InvestingPro Tips highlight that Preferred Bank has been proactively engaging in share buybacks, which could be a sign of management's confidence in the company's value. Furthermore, the bank has a history of rewarding shareholders, not only with high shareholder yield but also by raising its dividend for three consecutive years. For investors focused on income, it's worth noting that Preferred Bank has maintained dividend payments for 11 consecutive years, with a dividend growth of 27.27% in the last twelve months as of Q2 2024.

While some analysts have revised their earnings expectations downwards for the upcoming period, the company remains profitable over the last twelve months and analysts predict profitability for this year as well. For those considering long-term investment, Preferred Bank has demonstrated a high return over the last decade.

For a more comprehensive analysis and additional InvestingPro Tips, investors can visit InvestingPro, which currently lists 10 tips for Preferred Bank, offering a broader perspective on the company's performance and future outlook.

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