Preferred Bank Valuation Analysis
| PFBC Stock | USD 95.04 0.32 0.34% |
Below Model Estimate
Today
The intrinsic value estimate for Preferred Bank is based on a 3 months horizon. Extending the time horizon generally improves valuation stability.
For Preferred Bank, intrinsic valuation discounts forecasted free cash flows at the weighted average cost of capital. Discounted cash flow, comparable company multiples, and asset-based valuation each capture different dimensions. The reliability of any Preferred Bank valuation depends on the quality of its inputs and assumptions.
Main Profitability Drivers
On a profitability basis, Preferred Bank carries a 17.00% net margin and a 26.00% operating margin. The spread of 9.00 percentage points between the two margins reflects the impact of financing costs and tax obligations on Preferred Bank's earnings. From $499.04 million in revenue, Preferred Bank retained $283.4 million after cost of goods and reported $133.63 million in net income. Return on equity is 18.00% and return on assets is 1.85%, providing a view of how efficiently Preferred Bank's capital and asset base are deployed. Across most profitability measures, Preferred Bank is under pressure, suggesting headwinds to near-term earnings quality. The full picture is available through Preferred Bank's complete profitability review to assess how these metrics compare over time.
Price Book 1.44 | Gross Profit | Price Sales 3.97 | Profit Margin | Enterprise Value Revenue 5.37 |
Preferred Bank Cash | $847.45 million |
Cash stood at $807.1 million as of December 31, 2025.
Preferred Bank operates as a financial institution generating revenue through lending, deposits, and interest rate spreads, forming the primary lens for valuation. Classified as an income-oriented stock in Banks, its dividend characteristics are relevant to income-focused portfolios. The analysis below connects enterprise value. profitability, and capital structure to explain what the market is pricing today.
Total Value Analysis
The current total-value analysis for Preferred Bank points to enterprise value near 683.44 million, market capitalization around 1.13 billion, debt of 383.81 million, and cash and liquid equivalents of 749.48 million as of latest reporting. In practice, enterprise value isolates the operating business from capital-structure noise, but only holds if the underlying debt and cash figures are stable.| Takeover Price | Market Cap | Debt Obligations | Cash & Equivalents |
683.44 million | 1.13 billion | 383.81 million | 749.48 million |
Investor Information
About 91.0% of PFBC shares are owned by institutional investors. PFBC has price-to-book ratio of 1.44. A Price to Book (P/B) above 1.0 indicates the market assigns a premium to the equity, often reflecting expected growth or intangible value. Preferred Bank has Price/Earnings To Growth (PEG) ratio of 0.94. PFBC reported earnings per share (EPS) of 10.41. The firm had its last dividend issued on the 7th of April 2026. PFBC completed a 0.200-for-1 stock split on 20th of June 2011. Reviewing balance sheet structure and operating performance, Preferred Bank appears to maintain moderate financial flexibility with thin profitability. Profitability is present at the asset level, though below historical sector peaks.| Current Value | Last Year | Change From Last Year | 10 Year Trend | ||||||
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| Operating Profit Margin | 26.00% | 37.98% |
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| Total Cash From Operating Activities | $176.54 million | $168.14 million |
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| Operating Income | $199.02 million | $189.55 million |
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Asset Utilization
The asset utilization indicator refers to the revenue earned for every dollar of assets a company currently reports. Preferred Bank has an asset utilization ratio of 6.57 percent. This indicates that the Company is making $0.0657 for each dollar of assets. An increasing asset utilization means that Preferred Bank is more efficient with each dollar of assets it utilizes for everyday operations.Macro event markers
Discounted Cash Flow Analysis
Preferred Bank screens below its custom levered DCF estimate, with implied equity value per share of 336.26 against a market price of 95.04. Relative to the modeled value, the stock sits roughly 253.8% lower. Current assumptions include 14.63% WACC, 2.0% perpetual growth, and about 639.52 Million of next-period free cash flow. Discounted forecast cash flows sum to about 1.33 Billion before the terminal component, and present terminal value still represents roughly 65.7% of enterprise value. Divergences of this magnitude warrant particular scrutiny of the underlying assumptions. The market may be pricing in risks or structural headwinds that the model's base case does not fully capture.Model Value / Share
336.26
Equity value per share from the current custom levered DCF summary row.
Market Price
95.04
Current market price used by the same scenario.
Model Upside
253.8%
Market price sits below the model output.
WACC / LT Growth
14.63% / 2.0%
Forecast horizon: 2021 to 2030Terminal value share of EV: 65.7%
Preferred Bank Market Price vs. Intrinsic Value
This chart compares observed market pricing with the model-derived equity value per share across forecast periods. It also illustrates the relative premium or discount, expressed as a percentage difference between market valuation and modeled intrinsic value.
Projected Revenue and Levered Free Cash Flow
Revenue and levered free cash flow projections are presented in billions, outlining the expected financial trajectory over the modeled horizon.
Key Model Assumptions
The inputs below reflect the core assumptions applied in the valuation model, including growth expectations, discount rates, and capital structure considerations.
| Input | Current Value |
|---|---|
| Weighted Average Cost of Capital | 14.63% |
| Long-Term Growth Rate | 2.0% |
| Cost of Equity | 6.64% |
| After-Tax Cost of Debt | 39.61% |
| Debt Weighting | 23.93% |
| Equity Weighting | 76.07% |
| Net Debt | -423.29 million |
| Enterprise Value | 3.89 billion |
| Present Terminal Value | 2.56 billion |
| Terminal Value Share of EV | 65.7% |
Forecast Detail and Valuation Progression
This table presents the underlying forecast data used in the valuation, including revenue, cash flow generation, discounting effects, and the resulting per-share value across each projected period.
| Year | Revenue | Revenue Growth | Free Cash Flow | PV of LFCF | Equity Value / Share |
|---|---|---|---|---|---|
| 2021 | 218.78 million | 0.00% | 119.03 million | 0 | 336.31 |
| 2022 | 301.43 million | 37.78% | 143.4 million | 0 | 335.45 |
| 2023 | 481.76 million | 59.83% | 172.98 million | 0 | 335.92 |
| 2024 | 520.43 million | 8.03% | 163.6 million | 0 | 336.51 |
| 2025 | 499.04 million | -4.11% | 166.79 million | 0 | 337.09 |
| 2026 | 625.69 million | 25.38% | 253.71 million | 221.33 million | 336.26 |
| 2027 | 784.49 million | 25.38% | 318.1 million | 242.09 million | 336.26 |
| 2028 | 983.59 million | 25.38% | 398.84 million | 264.8 million | 336.26 |
| 2029 | 1.23 billion | 25.38% | 500.06 million | 289.63 million | 336.26 |
| 2030 | 1.55 billion | 25.38% | 626.98 million | 316.8 million | 336.26 |
Profitability Analysis
An analysis of Preferred Bank's profitability data, Preferred Bank is profitable with a net margin of 17.0% and operating margin of 26.0%, reporting net income of 133.63 million. Return on equity stands at 18.0%. Profitability trends show softening, with margins contracting relative to prior-year levels.Net Income | First Reported 2003-12-31 | Previous Quarter 34.82 million | Current Value 31.14 million | Quarterly Volatility 15.11 million |
Macro event markers
| Current Value | Last Year | Change From Last Year | 10 Year Trend | ||||||
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| Gross Profit Margin | 46.00% | 54.97% |
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| Net Profit Margin | 17.00% | 26.78% |
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| Operating Profit Margin | 26.00% | 37.98% |
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| Pretax Profit Margin | 26.00% | 37.98% |
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| Return On Assets | 1.85% | 1.76% |
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| Return On Equity | 18.00% | 16.93% |
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The profitability picture for Preferred Bank starts with how effectively revenue converts to earnings. Net margin of 17.0% reflects solid earnings conversion and cost discipline relative to revenue. Margin trends and return metrics below indicate whether the earnings profile is strengthening or deteriorating. Preferred Bank reports return on equity of 18.0%, above the level typically associated with durable competitive advantages.
Earnings per Share Projection vs Actual
Analyst EPS forecasts for Preferred Bank distill multiple research perspectives into a consensus earnings outlook. Net profit margin of 17.0% shows how much of Preferred Bank's top line converts to bottom-line earnings. For Preferred Bank, EPS context improves when viewed through the lens of return on equity and payout ratio. Projected earnings per share for Preferred Bank anchor the market's pricing of near-term earnings power. Consensus estimates may not capture non-recurring items or stock-compensation effects, so testing against the current net margin profile (17.0%), guidance revisions, and prior forecast error adds precision. Preferred Bank reported estimated earnings of 2.64 in earnings per share on 30th of June 2026. The strongest signal comes from comparing this forecast against the company's historical beat/miss rate and recent guidance revisions.Macro event markers
Ownership Allocation
The majority of Preferred Bank's outstanding shares are owned by institutional investors. These positions are typically held by large asset managers, pension funds, and index funds that manage capital on behalf of millions of clients. Institutions of this scale are required to disclose their holdings through 13F filings with the SEC, providing visibility into ownership changes each quarter.Revenue and Profit Overview
PFBC reported previous year's revenue of $499.04 million. Net Income was $133.63 million with profit before overhead, payroll, taxes, and interest of $283.4 million.Dividend Payment History
The dividend profile of Preferred Bank may reflect broader capital allocation priorities and management discipline. Dividend sustainability depends on earnings support and broader capital allocation priorities. Those evaluating income potential may find it useful to analyze dividend distributions.
| 21st of April 2026 | ||
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Reading the Current Signals
Few financial infrastructure platforms sustain a P/E as low as 15.06 without the market embedding a view on limited earnings growth or elevated cost risk. In this context, the valuation reflects operating economics rather than a generalized growth or value signal. Margins of 17.0% are adequate but not exceptional - competitive dynamics or cost shifts in either direction could move the profitability picture meaningfully. Margins at this level are characteristic of the sector and consistent with the operating model. Preferred Bank carries minimal debt at 0.16, more financial cushion than many comparable companies - relevant during periods of heightened market volatility. The 18.0% return on equity indicates efficient use of shareholder capital, a metric that typically correlates with durable competitive positioning in Banks. The combination of a meaningful dividend yield and solid margins positions Preferred Bank as an income candidate, though payout sustainability depends on continued cash-flow generation at recent levels. Current pricing embeds an expectation of limited or declining earnings momentum. A shift in transaction growth, fee economics, and the durability of asset-light financial margins would alter the balance between what the market has priced in and what ultimately materializes.
Overall Interpretation
Across the key valuation dimensions, Preferred Bank presents an asset-light business model where scalability stems from operating leverage and fee-based economics, with minimal reliance on deployed capital and defensive income characteristics within Banks. Margin strength alongside elevated return on equity indicates a business that converts revenue into shareholder value more effectively than most financial infrastructure platforms. On balance, Preferred Bank is operating from a position of strength. How much of that strength is already priced in depends on transaction growth, fee economics, and the durability of asset-light financial margins.
Each of the valuation dimensions above captures a different angle on Preferred Bank, and their combined signal matters more than any single metric. Given the current mix of multiples, margins, and leverage, the valuation picture is most useful when tracked over time rather than read as a static conclusion.
Valuation Framework, Methodology & Assumptions
Preferred Bank is a small-cap equity in Regional Banks, Banks - Regional, Financial Services categories. Current pricing reflects market expectations around growth and margins. Profitability indicators are currently positive. Current valuation multiples for Preferred Bank include P/E of 15.06, P/B of 1.44, P/S of 3.97.
Preferred Bank metrics are compiled from periodic company reporting and market reference feeds and normalized before display. Valuation outputs are model-derived and depend on published assumptions and reference inputs.
The analysis above is generated by quantitative models and is provided for informational and educational purposes only. It does not constitute financial advice, investment recommendations, or an endorsement to buy or sell any security. All investing involves risk, including the possible loss of principal. Consult a qualified financial advisor before making investment decisions. See our Terms of Use for full details.
Financial data referenced in this analysis is derived from publicly available SEC filings, audited financial statements, and third-party market data providers. The intrinsic value estimate is generated by Macroaxis quantitative models that incorporate fundamental analysis, technical indicators, and risk metrics.
The methodology combines multiple analytical inputs:
- Fundamental analysis - financial statements, profitability ratios, debt structure, and cash flow metrics sourced from SEC filings and public financial reports
- Technical indicators - historical price patterns, momentum signals, and volatility measures
- Risk assessment - probability of bankruptcy models, market risk metrics, and downside scenario analysis
- Peer comparison - relative valuation against industry peers using standardized multiples
Model outputs are refreshed periodically as new financial data becomes available. Past model performance is not indicative of future results. The intrinsic value estimate reflects a point-in-time calculation and should be considered alongside other research and professional advice.
Data sourced from SEC filings (EDGAR), public financial statements, and market data providers.
Editorial review and methodology oversight provided by: Vlad Skutelnik, Macroaxis Contributor
Growth Indicators
Growth-focused analysis of Preferred Bank matters because high expectations can support outsized upside but also sharper repricing when execution slips. A disciplined growth review keeps upside potential and expectation risk visible at the same time.
| Common Stock Shares Outstanding | 12.84 million | |
| Quarterly Earnings Growth Y O Y | 13.50% | |
| Forward Price Earnings | 9.0909 |
Preferred Bank Current Valuation Indicators
Valuation of Preferred Bank is strongest when several lenses are used together: market cap, enterprise value. revenue, and cash-flow durability. The business currently sits in the Financial Services sector and the Banks—Regional industry. Current pricing suggests the market is discounting specific expectations about growth trajectory, margin stability, and capital allocation. Reported values are derived from company filings, audited financial statements, and market data, and are standardized within Macroaxis quantitative models for consistency. Model outputs reflect a point-in-time estimate based on available data and assumptions and should be interpreted alongside changes in operating performance, market conditions, and forward expectations.