Preferred Bank

PFBC

Banks - Regional · Financial Services

Price

$107.39

-2.03 (-1.86%)

Market Cap

$1.27B

Exchange

NASDAQ

Winston Score

Winston is curious

A decent business — some strong pillars, some weaker.

Share count falling — buybacks

−13.6% over 4y

The company has reduced its share count over this period, returning value to shareholders through buybacks.

Diluted shares outstanding: 14.9M (2021) → 12.8M (2025)

Preferred Bank provides various commercial banking products and services to small and mid-sized businesses and their owners, entrepreneurs, real estate developers and investors, professionals, and high net worth individuals in the United States. The company accepts checking, savings, and money market deposit accounts; fixed-rate and fixed maturity retail, and non-retail certificates of deposit; and individual retirement accounts. It also provides real estate mortgage loans that are secured by re

Winston Score History

Score breakdown

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Quality

Gross Margin

56.1%

Premium pricing power — 56.1% gross margin

Operating Margin

36.9%

Excellent — 36.9% operating margin

ROCE

4.0%

Weak — 4.0% return on capital

ROIC between 0% and 5%. They earn a few cents back per dollar invested in the business.

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Growth

Sales YoY

-0.9%

Shrinking sales (-0.9% YoY)

EPS YoY

+14.2%

Earnings growing (14.2% YoY)

Healthy double-digit earnings growth — what compounders look like.

EPS Consistency

8/8 quarters

Every recent quarter grew earnings vs last year

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Cash Flow

Cash Conversion

125%

Turns 125% of profit into real cash

FCF Margin

33.0%

Converts sales into free cash efficiently (33.0%)

Free cash flow margin above 20%. Out of every $100 in sales, more than $20 is real cash they keep.

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Stability

Debt / Equity

0.45

Conservative — low debt load (0.45)

Interest Cover

0.89x

Dangerous — barely covers interest (0.9x)

Interest coverage below 1. Their profits don't cover the interest bill.

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Valuation

P/E Ratio (TTM)

9.8x

Attractive valuation — P/E 9.8

P/E under 10. The price tag is small relative to last year's profit.

P/E vs Forward

-0.2

SLOWING

Earnings expected to fall — forward P/E higher than today

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Dividends

Dividend Yield

2.89%

Moderate income — 2.89% yield

Standard yield zone for stable dividend payers. A meaningful piece of total return.

Dividend Growth

+6.8%

Dividend growing modestly (6.8% YoY)

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