On Sep 30, Zacks Investment Research upgraded Preferred Bank (PFBC) to a Zacks Rank #1 (Strong Buy).
Why the Upgrade?
On Sep 17, California-based Preferred Bank announced the termination of the Memorandum of Understanding (MOU) entered on Oct 1, 2013, on the notification by the Federal Deposit Insurance Corporation (FDIC) and the California Department of Business Oversight (DBO). Therefore, such move will facilitate the bank in maximizing shareholders’ returns through effective capital management.
In Aug 2014, Preferred Bank recorded a non-accrual loan payoff worth $5.6 million along with allowance for loan and lease losses recovery of $4.6 million, charged off in 2012 over 50% of the loan balance. Such financials will be included in third-quarter 2014 results.
On Jul 23, Preferred Bank declared second-quarter 2014 earnings of 43 cents per share, which beat the Zacks Consensus Estimate by 10.26%. Moreover the company has sustained an earnings streak in the trailing four quarters with an average beat of 11%.
Amid the present sluggish economic scenario, Preferred Bank managed to increase net interest income by 18.8% on a year-over-year basis. Further, non-interest expenses declined 2.2% from the prior-year quarter.
Analysts’ bullish stance on the stock was reflected in the estimate revisions over the past 60 days. The Zacks Consensus Estimate for 2014 increased 1.8% to $1.69 per share. For 2015, the Zacks Consensus Estimate advanced 2.2% to $1.83 per share.
Other Stocks to Consider
Some other stocks in the same sector worth considering include Sierra Bancorp (BSRR), Northrim Bancorp Inc. (NRIM) and SVB Financial Group (SIVB). All three carry a Zacks Rank #1.
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