Preferred Bank Announces Stock Buyback

Rhea-AI Summary

Preferred Bank (PFBC) has announced a new $125 million stock repurchase plan following shareholder approval. The bank recently completed its previous $150 million buyback program from 2023, where it repurchased 2,146,252 shares at an average price of $70.13 per share. The final portion of the previous program involved buying back 818,059 shares for $65.7 million during Q1 and Q2 2025.

The new buyback program requires regulatory approval due to the bank's structure without a holding company. CEO Li Yu cited slowing organic growth and high profitability leading to increasing capital ratios as reasons for the buyback, viewing it as an effective use of excess capital and a way to return value to shareholders.

Positive

• New $125 million stock buyback program approved by shareholders
• Successfully completed previous $150 million buyback program
• High level of profitability leading to increasing capital ratios
• Effective use of excess capital to return value to shareholders

Negative

• Organic growth has slowed
• New buyback requires regulatory approval before implementation
• No holding company structure adds regulatory complexity

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.

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 PFBC@finprofiles.com

FAQ

What is the size of Preferred Bank's (PFBC) new stock buyback program?

Preferred Bank's new stock buyback program is $125 million, approved by shareholders on May 22, 2025.

How many shares did PFBC repurchase in their previous buyback program?

In their previous $150 million buyback program, Preferred Bank repurchased 2,146,252 shares at an average price of $70.13 per share.

Why is Preferred Bank (PFBC) implementing a new stock buyback?

PFBC is implementing the buyback because organic growth has slowed while capital ratios continue to climb due to high profitability, making stock repurchases an effective use of excess capital.

What regulatory requirements does PFBC need for the new buyback?

PFBC requires regulatory approval for the new buyback due to its corporate structure of having no holding company.

How much did PFBC spend on share repurchases in Q1-Q2 2025?

In Q1-Q2 2025, PFBC spent $65.7 million to repurchase 818,059 shares as the final portion of its previous buyback program.