Shares of Preferred Bank (PFBC) are soaring 5.40% in pre-market trading on Monday following the release of the company's second quarter earnings report, which exceeded analyst expectations and showed improvements in key financial metrics.

The Los Angeles-based bank reported earnings per share (EPS) of $2.52 for Q2 2025, significantly beating the consensus estimate of $2.42. This represents a 1.61% increase from the $2.48 per share reported in the same quarter last year. Net income rose to $32.85 million, up from $30.02 million in the previous quarter.

Preferred Bank's strong performance was driven by several factors: 1. Improved net interest margin, which increased to 3.85% from 3.75% in the previous quarter. 2. Total loans grew by $105.2 million or 1.9% quarter-over-quarter, contributing to higher interest income. 3. Net interest income reached $66.87 million, up from $62.66 million in the prior quarter. 4. The bank's efficiency ratio improved to 31.79%, indicating better cost management.

Adding to investor optimism, Preferred Bank's management noted that uncertainty caused by tariffs is beginning to clear up, providing a better picture of the operating environment. This improved outlook, combined with the strong financial results, is likely fueling the stock's pre-market surge.

As the banking sector continues to navigate a challenging economic landscape, Preferred Bank's ability to deliver growth and maintain strong financial metrics appears to be resonating positively with investors.