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Shrinking Net Interest Margin And EPS At Preferred Bank Might Change The Case For Investing In PFBC

Simply Wall St · 1d ago
  • Recent analysis of Preferred Bank highlighted that over the last few years its net interest income has grown more slowly than peers, while its net interest margin shrank by 74 basis points and earnings per share fell by 4.7% annually, pointing to pressure on profitability even before today’s date of 7 Dec 2025.
  • These trends suggest that Preferred Bank’s loan book and funding mix may be facing tougher competition and weaker economics than many comparable banks, raising questions about the durability of its recent profit performance.
  • Next, we’ll examine how the shrinking net interest margin might alter Preferred Bank’s investment narrative built on disciplined growth and efficiency.

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Preferred Bank Investment Narrative Recap

To own Preferred Bank, you need to believe its relationship banking model and disciplined cost control can sustain attractive returns even as growth slows. The recent evidence of shrinking net interest margin and falling EPS puts more weight on the short term catalyst of stabilizing core profitability, while reinforcing the biggest risk that funding costs and loan yields stay under pressure. If these margin trends persist, the bank’s efficiency story could look less compelling in the near term.

Among recent announcements, the Q3 2025 results are most relevant to these concerns. While quarterly EPS and net income improved year over year, net interest income for the first nine months of 2025 was slightly below the prior period, echoing the broader pattern of slower net interest income growth and margin compression. For investors, this mix of resilient earnings per share and softer underlying interest income intensifies the focus on how sustainable current profitability really is.

Yet behind the recent earnings resilience, there is a margin risk that investors should be aware of if competition for deposits continues to...

Read the full narrative on Preferred Bank (it's free!)

Preferred Bank’s narrative projects $320.4 million revenue and $126.6 million earnings by 2028. This requires 6.1% yearly revenue growth and a negligible $0.1 million earnings increase from $126.5 million today.

Uncover how Preferred Bank's forecasts yield a $107.00 fair value, a 14% upside to its current price.

Exploring Other Perspectives

PFBC Earnings & Revenue Growth as at Dec 2025
PFBC Earnings & Revenue Growth as at Dec 2025

Two fair value estimates from the Simply Wall St Community span a wide range, from US$107 to about US$244. With profitability pressured by slower net interest income growth than peers, readers may want to compare these different views before deciding how comfortable they are with Preferred Bank’s earnings profile.

Explore 2 other fair value estimates on Preferred Bank - why the stock might be worth just $107.00!

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.