Is Preferred Bank (California) overvalued or undervalued?

As of 3 October 2025, the valuation grade for Preferred Bank (California) moved from fair to expensive. The company appears to be overvalued based on its current metrics, including a P/E ratio of 10, a Price to Book Value of 1.58, and an EV to EBITDA of 2.09. In comparison to peers, Customers Bancorp, Inc. has a P/E of 11.99, while First Bancorp (North Carolina) is at 23.74, indicating that Preferred Bank is trading at a lower valuation relative to some of its competitors.
Despite a solid ROE of 16.34%, the negative capital employed and the overall high valuation grade suggest that the stock may not be a compelling investment at this time. Over the past year, Preferred Bank has returned 14.86%, which is below the S&P 500's return of 17.82%, reinforcing the notion that it may be overvalued in the current market environment.