Preferred Bank (PFBC): History, Ownership, Mission, How It Works & Makes Money

Ever wondered about the story behind Preferred Bank (PFBC) and how it operates? Founded in 1991, the California-based commercial bank serves small to mid-sized businesses, entrepreneurs, and high-net-worth individuals. But how exactly does it make money, and what's its mission in the competitive financial landscape? Keep reading to discover more about Preferred Bank, its history, ownership structure, and its financial performance, including a US$267.2 million in revenue for the fiscal year 2024.

Preferred Bank (PFBC) History

Preferred Bank Founding Timeline

Year established

Preferred Bank was established in 1991.

Original location

The bank was originally located in Los Angeles, California.

Founding team members

While specific names of all founding team members are not readily available, the establishment was led by a group of entrepreneurs and banking professionals who aimed to serve the Chinese-American community in Southern California.

Initial capital/funding

The initial capital raised to establish Preferred Bank was $6.0 million.

Preferred Bank's Evolution Milestones

Preferred Bank's Transformative Moments

• 1995 Acquisition: The acquisition of the bank by the present ownership was a transformative moment, setting the stage for future growth and strategic direction.
• 2003 Name Change: Changing the name to Preferred Bank was a pivotal step towards solidifying its brand identity and market presence.
• 2005 Nasdaq Listing: Listing on the Nasdaq Stock Market enhanced the bank's visibility and access to capital markets, supporting further expansion and growth initiatives.
• Geographic Expansion: Strategic branch expansions, particularly entering the New York market, diversified the bank's geographic presence and tapped into new customer bases.
• Consistent Profitability: Achieving record earnings year after year, especially surpassing $100 million in net income, demonstrated the effectiveness of the bank's business strategies and operational efficiency.

To gain more insights into the values that drive Preferred Bank, explore Mission Statement, Vision, & Core Values of Preferred Bank (PFBC).

Preferred Bank (PFBC) Ownership Structure

The ownership structure of Preferred Bank involves a mix of institutional and individual shareholders, reflecting a typical distribution for publicly traded companies.

Preferred Bank's Current Status

Preferred Bank is a publicly traded company, meaning its shares are available for purchase by the general public on a stock exchange.

Preferred Bank's Ownership Breakdown

As a publicly traded entity, Preferred Bank's ownership is distributed among various shareholders. Here’s an overview, based on the latest available data:

Understanding who holds the majority of shares can provide insights into the stability and strategic direction of the company. Institutional investors often have a significant say in corporate governance due to their large holdings.

Preferred Bank's Leadership

The leadership team at Preferred Bank is responsible for setting the strategic direction and overseeing the company's operations. Here are some key figures:

• Chairman and CEO: James J. Hong
• President and COO: Li Yu
• Executive Vice President and CFO: Edward J. Czajka

These individuals, along with other members of the executive team and board of directors, guide the bank's activities and ensure it meets its financial and operational goals.

To gain more insights into the investors, consider reading: Exploring Preferred Bank (PFBC) Investor Profile: Who’s Buying and Why?

Preferred Bank (PFBC) Mission and Values

Preferred Bank strives to deliver exceptional financial solutions while upholding strong ethical standards and fostering community growth.

Preferred Bank's Core Purpose

Official mission statement

Preferred Bank's official mission statement is: 'To be the preferred California bank providing exceptional service to our customers, while creating value for our shareholders and providing a positive and enriching environment for our employees.'

Vision statement

Preferred Bank aims to be a leading California bank recognized for its exceptional service, financial performance, and positive community impact.

Company slogan/tagline

While specific slogans or taglines may vary over time, Preferred Bank generally emphasizes themes of personalized service, financial expertise, and community partnership in its marketing and communications.

To learn more about the investors of Preferred Bank, check out this article: Exploring Preferred Bank (PFBC) Investor Profile: Who’s Buying and Why?

Preferred Bank (PFBC) How It Works

Preferred Bank operates as a full-service commercial bank, providing a range of financial services to businesses and individuals, primarily focusing on the Chinese-American communities in California, New York, and Texas.

Preferred Bank's Product/Service Portfolio

Preferred Bank's Operational Framework

Preferred Bank's operational framework is centered around relationship banking, emphasizing personalized service and local market knowledge. The bank focuses on:

• Loan Origination and Underwriting: Sourcing loan opportunities through direct marketing, referrals, and community outreach. Conducting thorough credit analysis and risk assessment to ensure loan quality.
• Deposit Gathering: Attracting deposits from individuals and businesses through competitive rates, convenient services, and strong customer relationships.
• Branch Network: Operating a network of strategically located branches in key markets to provide convenient access to banking services.
• Technology and Innovation: Investing in technology to enhance operational efficiency, improve customer experience, and expand digital banking capabilities.
• Risk Management: Implementing robust risk management practices to mitigate credit, operational, and compliance risks.

Preferred Bank's Strategic Advantages

Preferred Bank's strategic advantages include:

• Strong Market Position: A leading bank serving the Chinese-American community, with deep roots and a strong reputation in its target markets.
• Relationship Banking Model: Emphasis on building long-term relationships with customers, providing personalized service and tailored financial solutions.
• Asset Quality: Maintaining a strong asset quality through prudent underwriting and risk management practices. As of the fiscal year 2024, the bank has consistently demonstrated low levels of non-performing assets relative to its total assets.
• Experienced Management Team: Led by an experienced management team with a proven track record of success in community banking.
• Strategic Branch Network: Well-positioned branches in attractive markets, providing a competitive advantage in attracting and retaining customers.

To learn more about Preferred Bank, consider reading Exploring Preferred Bank (PFBC) Investor Profile: Who’s Buying and Why?

Preferred Bank (PFBC) How It Makes Money

Preferred Bank primarily generates revenue through its core banking activities, including lending, deposit-taking, and providing various financial services to its customers.

Preferred Bank's Revenue Breakdown

As of the fiscal year 2024, the bank's revenue streams can be broken down as follows:

Preferred Bank's Business Economics

Preferred Bank's business economics are driven by several key factors:

• Net Interest Margin (NIM): The bank's profitability is significantly influenced by its NIM, which is the difference between the interest income it earns on loans and the interest it pays on deposits. As of 2024, Preferred Bank maintained a healthy NIM, reflecting efficient management of its asset and liability portfolios.
• Loan Portfolio Composition: The types of loans the bank holds (e.g., commercial real estate, business loans) affect its risk profile and potential returns. In 2024, Preferred Bank strategically diversified its loan portfolio to balance risk and optimize income.
• Operating Efficiency: The bank's ability to control operating expenses relative to its income is crucial. Preferred Bank has focused on improving its operational efficiency to boost profitability.
• Mission Statement, Vision, & Core Values of Preferred Bank (PFBC).

Preferred Bank's Financial Performance

Key highlights of Preferred Bank’s financial performance in 2024 include:

• Total Assets: Reached $6.74 billion, indicating substantial growth and expansion of its business operations.
• Net Income: Reported a net income of $88.4 million, reflecting strong profitability.
• Earnings per Share (EPS): The EPS stood at $5.83, showcasing the bank's ability to generate profits for its shareholders.
• Return on Average Assets (ROAA): The ROAA was 1.37%, demonstrating efficient asset utilization.
• Return on Average Equity (ROAE): The ROAE was 12.44%, indicating a strong return to shareholders.
• Non-performing assets: Represented only 0.03% of total assets, underscoring the bank's sound asset quality and risk management practices.

These financial metrics highlight Preferred Bank's robust financial health and effective management strategies in 2024.

Preferred Bank (PFBC) Market Position & Future Outlook

Preferred Bank strategically navigates a competitive market while focusing on future growth opportunities and managing potential risks. For more insights, check out: Exploring Preferred Bank (PFBC) Investor Profile: Who’s Buying and Why?

Competitive Landscape

Opportunities & Challenges

Industry Position

Preferred Bank maintains a strategic position within the competitive banking industry, focusing on specialized services and relationship banking.

• Niche Market Focus: Specializes in lending to specific sectors, like commercial real estate and small businesses, differentiating itself from larger, more generalized banks.
• Relationship Banking: Emphasizes personalized service and building strong relationships with clients, fostering loyalty and repeat business.
• Community Involvement: Actively participates in local community development, enhancing its reputation and attracting local customers.