Preferred Bank Crafts 52-Week High - Analyst Blog

Shares of Preferred Bank PFBC hit a new 52-week high of $26.79 during the first half of the trading session on March 26. However, the stock closed the session at $26.03, which reflects a year-to-date return of 28.3%. The trading volume for the session was 231,582 shares.

Despite the strong price appreciation, this Zacks Rank #1 (Strong Buy) west bank still has considerable of upside left, given its positive estimate revision over the last 60 days and expected long-term earnings growth of 10.0%.

Growth Drivers

Preferred Bank's price performance was driven by impressive fourth-quarter 2013 results, which included improvement in credit quality and a strong capital position.

On Jan 22, Preferred Bank declared fourth-quarter earnings of 44 cents per share, which beat the Zacks Consensus Estimate of 37 cents. Moreover the company has sustained an earnings streak in the trailing four quarters with an average beat of 21.5%.

Amid the present sluggish economic scenario, Preferred Bank managed to increase net interest income by 15.5% on a year-over-year basis. Further, non-interest expenses were $5.4 million, declining 33.6% from the prior-year quarter.

Additionally, provision for loan losses was $1.8 million, down 21.7% from fourth-quarter 2012. Total non-accrual loans were $8.5 million, declining 55.3% year over year.

Estimate Revisions Show Potency

In the last 60 days, the Zacks Consensus Estimate for 2014 increased 4.6% to $1.58 per share. For 2015, the Zacks Consensus Estimate advanced 6.0% to $1.76 per share over the same time frame.

Other west banks worth considering include Central Valley Community Bancorp CVCY, Summit State Bank SSBI and Bank of Hawaii Corporation BOH. While Central Valley Community Bancorp and Summit State Bank carry the same Zacks Rank as Preferred Bank, Bank of Hawaii has a Zacks Rank #2 (Buy).