Amid ongoing challenges for regional banking institutions, Preferred Bank of Los Angeles is making a definitive statement with the authorization of a new $125 million stock repurchase program. This initiative commences immediately following the completion of a previous $150 million buyback plan, signaling the bank’s robust commitment to returning capital to its shareholders.
The foundation for this aggressive capital return strategy is a solid quarterly performance. For Q2 2025, Preferred Bank reported a net income of $32.8 million, equating to $2.52 per diluted share. This represents a quarterly increase of $2.8 million, though it is a slight decrease compared to the same period last year.
Key financial metrics underscore the bank’s operational strength:
* Net Interest Margin: Increased to 3.85% from 3.75%
* Loan Growth: Expanded by $105.2 million, a 1.9% rise
* Non-Performing Assets: Declined significantly to $51.2 million from $78.9 million
* Capital Ratio: Remained strong at 14.43%
* Efficiency Ratio: Held steady at a solid 31.79%
Should investors sell immediately? Or is it worth buying Preferred Bank of Los Angeles?
The newly announced $125 million repurchase program, which has already received shareholder approval, highlights the consistency of the bank’s capital return policy. The preceding program, initiated in 2023, saw the bank acquire a total of 2,146,252 of its own shares at an average price of $70.13. An additional 818,059 shares, valued at $65.7 million, were repurchased in just the first two quarters of 2025. The execution of the new buybacks is pending final regulatory approval.
With a substantially improved credit quality and a growing loan portfolio, the bank appears positioned to maintain its positive trajectory despite the persistent headwinds facing the regional banking sector.
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