What Happened?
Shares of commercial banking company Preferred Bank (NASDAQ: PFBC) jumped 6.8% in the afternoon session after the company reported second-quarter financial results that surpassed Wall Street expectations.
The Los Angeles-based commercial bank announced earnings of $2.52 per share for the quarter, beating the Consensus Estimate. The bank's revenue also topped forecasts. The strong results were driven by an increase in net income compared to the previous quarter, an improved net interest margin, and growth in the bank's loan portfolio. Net interest margin, a key measure of a bank's profitability, rose to 3.85% from 3.75% in the first quarter. Additionally, the bank saw an improvement in its credit quality, with a notable decrease in non-accrual loans.
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What Is The Market Telling Us
Preferred Bank’s shares are not very volatile and have only had 7 moves greater than 5% over the last year. In that context, today’s move indicates the market considers this news meaningful, although it might not be something that would fundamentally change its perception of the business.
Preferred Bank is up 15.6% since the beginning of the year, and at $98.85 per share, has set a new 52-week high. Investors who bought $1,000 worth of Preferred Bank’s shares 5 years ago would now be looking at an investment worth $2,351.
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