Preferred Bank (NASDAQ: PFBC) surpassed the Zacks Consensus Estimate for EPS and revenue in the third quarter.
The bank reported a slight decline in EPS and revenue compared to the same quarter last year, despite exceeding market expectations.
Financial metrics indicate a solid market valuation with a conservative debt-to-equity ratio, though potential liquidity challenges are suggested by the current ratio.
Preferred Bank (NASDAQ: PFBC) is a financial institution that provides a range of banking services. It operates primarily in the western United States and is part of the Zacks Banks – West industry. The bank competes with other regional banks, focusing on offering personalized banking solutions to its clients.
On October 21, 2024, PFBC reported its third-quarter earnings, achieving an earnings per share (EPS) of $2.46. This figure surpassed the Zacks Consensus Estimate of $2.39, resulting in a positive surprise of 2.93%. Despite this achievement, the EPS was slightly lower than the $2.71 reported in the same quarter last year.
The bank’s revenue for the quarter was approximately $72.31 million, exceeding the Zacks Consensus Estimate of $68.8 million by 5.10%. However, this revenue marks a 4.8% decline compared to the $75.93 million from the same period last year. Despite the decline, the revenue performance highlights the bank’s ability to exceed market expectations.
PFBC’s financial metrics provide further insights into its market valuation. The bank has a price-to-earnings (P/E) ratio of about 7.98, indicating how the market values its earnings. Its price-to-sales ratio is approximately 2.11, reflecting the value investors place on its revenue. The enterprise value to sales ratio stands at around 2.40, suggesting the market’s valuation of the company’s total worth relative to its sales.
The bank’s financial health is also reflected in its debt-to-equity ratio of 0.20, indicating a conservative use of debt. However, the current ratio of 0.32 may suggest potential liquidity challenges in meeting short-term obligations. Despite these challenges, PFBC’s earnings yield of 12.53% offers a substantial return on its earnings relative to its share price.
