Preferred Bank's shareholders approved a $125 million stock repurchase plan following completion of a previous $150 million plan.
Quiver AI Summary
Preferred Bank, a prominent independent commercial bank based in California, announced that its shareholders have approved a new $125 million stock repurchase plan, following the completion of a prior $150 million repurchase plan on May 8, 2025. This earlier plan involved the buyback of over 2.1 million shares at an average price of $70.13. The new plan will require regulatory approval due to the Bank's unique corporate structure. Chairman and CEO Li Yu noted that as organic growth slows, the bank's capital ratios are expected to rise, making stock buybacks a beneficial way to utilize excess capital and return value to shareholders. Preferred Bank offers various banking services through its network of branches in California, New York, and Texas, serving both commercial and consumer clients.
Potential Positives
- Shareholders' approval of a new $125 million stock repurchase plan enhances shareholder value and indicates confidence in the company's financial health.
- Completion of the previous $150 million stock repurchase demonstrates successful capital management and a commitment to returning capital to shareholders.
- The bank's high profitability is reaffirmed, further supporting its capital ratios, which is positive for sustainability and growth.
- The expectation of obtaining regulatory approval for the new repurchase plan in a timely manner reflects the company's proactive approach to managing its capital structure.
Potential Negatives
- The requirement for regulatory approval for the new $125 million stock repurchase plan may create uncertainty and delays in executing the buyback, potentially impacting investor confidence.
- The announcement of a new stock repurchase plan amid indications of slowing organic growth could raise concerns about the Bank's ability to sustain growth and profitability in the future.
- The previous repurchase plan's completion may reflect a significant portion of the Bank's excess capital being used for buybacks instead of potential reinvestment in growth opportunities, which could be viewed negatively by investors seeking long-term value creation.
FAQ
What is the new stock repurchase plan for Preferred Bank?
The new stock repurchase plan is valued at $125 million, approved by shareholders.
How many shares did Preferred Bank repurchase recently?
Recently, Preferred Bank repurchased 818,059 shares for a total of $65.7 million.
What was the average repurchase price per share?
The average repurchase price per share during the previous plan was $70.13.
Why is Preferred Bank conducting a stock buyback?
Preferred Bank believes buying back shares is a smart use of excess capital due to high profitability.
Where is Preferred Bank headquartered?
Preferred Bank is headquartered in Los Angeles, California.
Disclaimer: This is an AI-generated summary of a press release distributed by GlobeNewswire. The model used to summarize this release may make mistakes. See the full release here.
$PFBC Hedge Fund Activity
We have seen 94 institutional investors add shares of $PFBC stock to their portfolio, and 114 decrease their positions in their most recent quarter.
Here are some of the largest recent moves:
- PHOCAS FINANCIAL CORP. added 107,209 shares (+527.8%) to their portfolio in Q1 2025, for an estimated $8,969,104
- KENNEDY CAPITAL MANAGEMENT LLC added 87,181 shares (+96.6%) to their portfolio in Q1 2025, for an estimated $7,293,562
- GOLDMAN SACHS GROUP INC removed 84,547 shares (-34.3%) from their portfolio in Q1 2025, for an estimated $7,073,202
- LSV ASSET MANAGEMENT removed 67,145 shares (-50.5%) from their portfolio in Q1 2025, for an estimated $5,617,350
- AMERICAN CENTURY COMPANIES INC added 57,434 shares (+28.8%) to their portfolio in Q1 2025, for an estimated $4,804,928
- STATE STREET CORP removed 41,535 shares (-6.5%) from their portfolio in Q1 2025, for an estimated $3,474,818
- CHARLES SCHWAB INVESTMENT MANAGEMENT INC added 40,435 shares (+9.3%) to their portfolio in Q1 2025, for an estimated $3,382,792
To track hedge funds' stock portfolios, check out Quiver Quantitative's institutional holdings dashboard.
$PFBC Analyst Ratings
Wall Street analysts have issued reports on $PFBC in the last several months. We have seen 1 firms issue buy ratings on the stock, and 0 firms issue sell ratings.
Here are some recent analyst ratings:
- Piper Sandler issued a "Overweight" rating on 01/31/2025
To track analyst ratings and price targets for $PFBC, check out Quiver Quantitative's $PFBC forecast page.
Full Release
LOS ANGELES, May 22, 2025 (GLOBE NEWSWIRE) -- Preferred Bank (NASDAQ: PFBC) , one of the largest independent commercial banks in California, today reported that the shareholders have approved a new $125 million stock repurchase plan. Also, on May 8, 2025, the Bank completed its prior stock repurchase plan. This was the final portion of the Bank’s $150 million repurchase authorized by shareholders in 2023. The final tranche of repurchase activity saw the Bank repurchase 818,059 shares for total consideration of $65.7 million over the first and second quarters of 2025. For the entire $150 million repurchase, the Bank repurchased 2,146,252 shares at an average price of $70.13 per share.
For the new $125 million repurchase, the Bank will be required to gain regulatory approval due to the Bank’s corporate structure of having no holding company. It is expected that these approvals should be obtained in relatively short order.
Chairman and CEO Li Yu stated, “As organic growth has slowed, the Bank’s capital ratios will continue to climb due to our high level of profitability. In this setting, buying back our common stock is a great use of the Bank’s excess capital and an indirect way of returning capital to our shareholders.”
About Preferred Bank
Preferred Bank is one of the larger independent commercial banks headquartered in California. The Bank is chartered by the State of California, and its deposits are insured by the Federal Deposit Insurance Corporation, or FDIC, to the maximum extent permitted by law. The Bank conducts its banking business from its main office in Los Angeles, California, and through twelve full-service branch banking offices in the California cities of Alhambra, Century City, City of Industry, Torrance, Arcadia, Irvine (2 branches), Diamond Bar, Pico Rivera, Tarzana and San Francisco (2 branches) and two branches in New York (Flushing and Manhattan) and one branch in the Houston suburb of Sugar Land, Texas. Additionally, the Bank operates a Loan Production Office in Sunnyvale, California. Preferred Bank offers a broad range of deposit and loan products and services to both commercial and consumer customers. The Bank provides personalized deposit services as well as real estate finance, commercial loans and trade finance to small and mid-sized businesses, entrepreneurs, real estate developers, professionals and high net worth individuals. Although originally founded as a Chinese-American Bank, Preferred Bank now derives most of its customers from the diversified mainstream market but does continue to benefit from the significant migration to California of ethnic Chinese from China and other areas of East Asia.
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AT THE COMPANY:
Edward J. Czajka Executive Vice President Chief Financial Officer (213) 891-1188 |
AT FINANCIAL PROFILES:
Jeffrey Haas General Information (310) 622-8240 [email protected] |
