Preferred Bank Rewards Shareholders With 7.1% Dividend Increase

Preferred Bank PFBC announced an increase in its quarterly cash dividend. The company has raised its cash dividend 7.1% from the prior payout to 75 cents per share. The dividend is payable on Jan. 23, 2025, to shareholders of record on Jan. 9, 2025.Prior to this, in December 2023, the company increased its dividend 27.3% to 70 cents per share from its previous payout of 55 cents per share.Considering the last day’s closing price of $86.94, Preferred Bank’s dividend yield currently stands at 3.22%. This yield is attractive for income investors and represents a steady income stream. It is also impressive compared with the industry’s 2.73%.Preferred Bank Dividend Yield (TTM)  Preferred Bank dividend-yield-ttm | Preferred Bank QuoteIn the last five years, the company has increased its dividend five times with an annualized growth rate of 22.3%. It currently has a payout ratio of 28%.Preferred Bank’s Share Repurchase PlanApart from regular dividends, PFBC has a share repurchase plan. In August 2024, the bank obtained regulatory approval to proceed with its shareholder-approved existing $150-million share repurchase program.Preferred Bank launched the $150-million program in June 2023 and received regulatory approval to initiate the first leg of the plan. Under this, the bank repurchased $72.5 million worth of shares at an average price of $62.02. The approval expired in July 2024.The latest obtained approval is for the remaining $77.5 million worth of shares, which is set to expire in February 2025.Being a state-chartered, non-member bank, PFBC is required to obtain regulatory approval before proceeding with any transaction that may alter its capital levels.Our Take on PFBC's Capital Distribution MovePreferred Bank enjoys a decent balance sheet position. As of Sept. 30, 2024, PFBC’s cash and cash equivalent balance was $804.9 million. The cash levels are higher than its subordinated debt issuance, net of unamortized costs, and premium and other liabilities of $188.1 million.As of Sept. 30, 2024, the Bank’s leverage ratio was 11.28%, the common equity tier 1 capital ratio was 11.66%, and the total capital ratio stood at 15.06%. Hence, a solid balance sheet position, along with its earnings strength, indicates that its capital distributions are sustainable.Preferred Bank’s Price Performance & Zacks RankPFBC shares have gained 17.8% over the past six months compared with the industry’s 31% rise. Image Source: Zacks Investment Research Preferred Bank carries a Zacks Rank #3 (Hold) at present. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.Other Banks Undertaking Similar StepsEarlier this month, ServisFirst Bancshares, Inc.’s SFBS board of directors approved an increase in its quarterly dividend to 34 cents per share, marking a 12% hike from the prior payout. The increased amount will be paid out on Jan. 10, 2025, to shareholders of record as of Jan. 2.SBFS has hiked its dividend every year since 2014. Before the latest hike, the company increased its dividend by 7.1% to 30 cents per share in December 2023.Similarly, SEI Investments Company’s SEIC board of directors announced a semi-annual cash dividend of 49 cents per share, representing an increase of 6.5% from the prior payout. The dividend will be paid out on Jan. 8, 2025, to shareholders of record as of Dec. 27, 2024.The company last increased its dividend by 7% to 46 cents per share in December 2023. SEIC raised its semi-annual dividend six times in the last five years.Only $1 to See All Zacks' Buys and SellsWe're not kidding.Several years ago, we shocked our members by offering them 30-day access to all our picks for the total sum of only $1. No obligation to spend another cent.Thousands have taken advantage of this opportunity. Thousands did not - they thought there must be a catch. Yes, we do have a reason. We want you to get acquainted with our portfolio services like Surprise Trader, Stocks Under $10, Technology Innovators,and more, that closed 228 positions with double- and triple-digit gains in 2023 alone.See Stocks Now >>Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Preferred Bank (PFBC): Free Stock Analysis Report SEI Investments Company (SEIC): Free Stock Analysis Report ServisFirst Bancshares, Inc. (SFBS): Free Stock Analysis ReportTo read this article on Zacks.com click here.Zacks Investment ResearchWeiter zum vollständigen Artikel bei Zacks Weiter zum vollständigen Artikel bei Zacks