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3 Reasons to Buy Preferred Bank (PFBC) Stock Right Now
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Shares of Preferred Bank (PFBC - Free Report) gained nearly 60% year to date, significantly outpacing the 33.5% growth for the Zacks categorized West Banks industry. The price reaction largely reflects the post-election euphoria and the latest Fed rate hike that undoubtedly placed the financial stocks among the biggest winners.
With assets over $3 billion, Preferred Bank offers a wide range of deposit and loan products and services to commercial as well as consumer clients, across a network of 11 full-service branch banking offices in California and one branch in New York.
The Los Angeles, CA-based company continues to reflect strength in several areas including strong organic growth and impressive profitability. Adding the stock to your portfolio now should not disappoint. While the Zacks Consensus Estimate for the current year remained unchanged at $2.52, it reflects year-over-year growth of 18.4%. Notably, Preferred Bank currently carries a Zacks Rank #2 (Buy).
Why is the Stock an Attractive Pick?
Growing Loans and Deposits: Preferred Bank continues recording solid growth in its loans and deposits balances. As of Sep 30, 2016, total loans and leases increased 34.6% year over year to $2.34 billion, while deposits rose 35.8% to $2.59 billion. While the company is largely focused on commercial real estate, it is set to launch home mortgage origination platform, which should help in lowering concentration risks.
Benefit from Rate Hike: Preferred Bank is well positioned to benefit from the latest rate hike as it maintains a highly sensitive balance sheet. While there will be negligible impact in fourth-quarter 2016 from the 25 basis points (bps) increase in Fed rate, the company expects net interest margin to increase by 8–10 bps in first-quarter 2017 along with additional $2 million in net interest income.
Committed on Enhancing Shareholders’ Value: Driven by capital strength, Preferred Bank remains focused on rewarding shareholders. Notably, last week, the company announced a 20% increase in quarterly cash dividend to 18 cents per share. The dividend will be paid on Jan 20, 2017 to stockholders on record as of Jan 6.
Other Stocks to Consider
E*TRADE Financial Corporation : Over the last 60 days, the Zacks Consensus Estimate for the current year increased 2.2% to $1.83 and advanced 6.9% to $1.87 for 2017. The company sports a Zacks Rank #1 (Strong Buy).
Meta Financial Group, Inc. (CASH - Free Report) : The Zacks Consensus Estimate inched up 11.8% for 2016 to $6.62 and 14.7% to $7.80 for 2017. The company sports a Zacks Rank #1.
Zacks' Top Investment Ideas for Long-Term Profit
How would you like to see our best recommendations to help you find today’s most promising long-term stocks? Starting now, you can look inside our portfolios featuring stocks under $10, income stocks, value investments and more. These picks, which have double and triple-digit profit potential, are rarely available to the public. But you can see them now. Click here >>
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3 Reasons to Buy Preferred Bank (PFBC) Stock Right Now
Shares of Preferred Bank (PFBC - Free Report) gained nearly 60% year to date, significantly outpacing the 33.5% growth for the Zacks categorized West Banks industry. The price reaction largely reflects the post-election euphoria and the latest Fed rate hike that undoubtedly placed the financial stocks among the biggest winners.
With assets over $3 billion, Preferred Bank offers a wide range of deposit and loan products and services to commercial as well as consumer clients, across a network of 11 full-service branch banking offices in California and one branch in New York.
The Los Angeles, CA-based company continues to reflect strength in several areas including strong organic growth and impressive profitability. Adding the stock to your portfolio now should not disappoint. While the Zacks Consensus Estimate for the current year remained unchanged at $2.52, it reflects year-over-year growth of 18.4%. Notably, Preferred Bank currently carries a Zacks Rank #2 (Buy).
Why is the Stock an Attractive Pick?
Growing Loans and Deposits: Preferred Bank continues recording solid growth in its loans and deposits balances. As of Sep 30, 2016, total loans and leases increased 34.6% year over year to $2.34 billion, while deposits rose 35.8% to $2.59 billion. While the company is largely focused on commercial real estate, it is set to launch home mortgage origination platform, which should help in lowering concentration risks.
Benefit from Rate Hike: Preferred Bank is well positioned to benefit from the latest rate hike as it maintains a highly sensitive balance sheet. While there will be negligible impact in fourth-quarter 2016 from the 25 basis points (bps) increase in Fed rate, the company expects net interest margin to increase by 8–10 bps in first-quarter 2017 along with additional $2 million in net interest income.
Committed on Enhancing Shareholders’ Value: Driven by capital strength, Preferred Bank remains focused on rewarding shareholders. Notably, last week, the company announced a 20% increase in quarterly cash dividend to 18 cents per share. The dividend will be paid on Jan 20, 2017 to stockholders on record as of Jan 6.
Other Stocks to Consider
E*TRADE Financial Corporation : Over the last 60 days, the Zacks Consensus Estimate for the current year increased 2.2% to $1.83 and advanced 6.9% to $1.87 for 2017. The company sports a Zacks Rank #1 (Strong Buy).
Virtus Investment Partners, Inc. (VRTS - Free Report) : The Zacks Consensus Estimate for 2016 climbed 6.7% to $5.75 and 20.7% to $7.88 for 2017. The company also boasts a Zacks Rank #1. You can see the complete list of today’s Zacks #1 Rank stocks here.
Meta Financial Group, Inc. (CASH - Free Report) : The Zacks Consensus Estimate inched up 11.8% for 2016 to $6.62 and 14.7% to $7.80 for 2017. The company sports a Zacks Rank #1.
Zacks' Top Investment Ideas for Long-Term Profit
How would you like to see our best recommendations to help you find today’s most promising long-term stocks? Starting now, you can look inside our portfolios featuring stocks under $10, income stocks, value investments and more. These picks, which have double and triple-digit profit potential, are rarely available to the public. But you can see them now. Click here >>