Preferred Bank Q4 net income rises

Overview

• California bank's Q4 net income rose yr/yr but fell from prior qtr due to credit loss provisions

• Company's net interest margin decreased vs Q3, due to Federal Reserve rate cuts

• Company sold two large OREO properties, gaining $3.6 mln

Outlook

• Preferred Bank expects increased growth rates in 2026 barring policy changes

• Company sees improved customer outlook and positive economic forecasts for 2026

Result Drivers

• CREDIT LOSS PROVISIONS - Increased provisions for credit losses impacted net income negatively, decreasing by $1.8 mln from the prior quarter

• NET INTEREST INCOME DECLINE - Decline in net interest income by $1.3 mln due to lower market interest rates, affecting overall earnings

• LOAN AND DEPOSIT GROWTH - Total loans increased by $182.3 mln and deposits by $115.8 mln, reflecting higher demand

Key Details

Analyst Coverage

• The current average analyst rating on the shares is "buy" and the breakdown of recommendations is 2 "strong buy" or "buy", 3 "hold" and no "sell" or "strong sell"

• The average consensus recommendation for the banks peer group is "buy"

• Wall Street's median 12-month price target for Preferred Bank is $106.00, about 6.9% above its January 21 closing price of $99.15

• The stock recently traded at 9 times the next 12-month earnings vs. a P/E of 9 three months ago

Press Release: ID:nGNX3lrbGD

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