Financial Analysis: Pacific Alliance Bank (OTCMKTS:PFBN) versus Southside Bancshares (NYSE:SBSI)

Southside Bancshares (NYSE:SBSI) and Pacific Alliance Bank (OTCMKTS:PFBN) are both small-cap finance companies, but which is the superior business? We will contrast the two businesses based on the strength of their earnings, valuation, profitability, analyst recommendations, dividends, institutional ownership and risk.

Institutional and Insider Ownership

55.7% of Southside Bancshares shares are owned by institutional investors. 6.0% of Southside Bancshares shares are owned by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock will outperform the market over the long term.

Risk and Volatility

Southside Bancshares has a beta of 0.64, suggesting that its stock price is 36% less volatile than the S&P 500. Comparatively, Pacific Alliance Bank has a beta of 0.21, suggesting that its stock price is 79% less volatile than the S&P 500.

Dividends

Southside Bancshares pays an annual dividend of $1.44 per share and has a dividend yield of 5.1%. Pacific Alliance Bank pays an annual dividend of $0.10 per share and has a dividend yield of 1.2%. Southside Bancshares pays out 51.1% of its earnings in the form of a dividend. Southside Bancshares has increased its dividend for 30 consecutive years. Southside Bancshares is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Earnings and Valuation

This table compares Southside Bancshares and Pacific Alliance Bank”s gross revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Southside Bancshares	$456.07 million	1.88	$88.49 million	$2.82	10.11
Pacific Alliance Bank	$23.57 million	1.19	$1.43 million	N/A	N/A

Southside Bancshares has higher revenue and earnings than Pacific Alliance Bank.

Profitability

This table compares Southside Bancshares and Pacific Alliance Bank’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Southside Bancshares	19.07%	10.59%	1.02%
Pacific Alliance Bank	N/A	N/A	N/A

Analyst Ratings

This is a breakdown of current recommendations and price targets for Southside Bancshares and Pacific Alliance Bank, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Southside Bancshares	0	1	0	0	2.00
Pacific Alliance Bank	0	0	0	0	0.00

Summary

Southside Bancshares beats Pacific Alliance Bank on 12 of the 13 factors compared between the two stocks.

About Southside Bancshares

Southside Bancshares, Inc. operates as the bank holding company for Southside Bank that provides a range of financial services to individuals, businesses, municipal entities, and nonprofit organizations. Its deposit products include savings, money market, and interest and noninterest bearing checking accounts, as well as certificates of deposit. The company’s loan portfolio comprises consumer loans that include 1-4 family residential loans, home equity loans, home improvement loans, automobile loans, and other consumer related loans; commercial loans, such as short-term working capital loans for inventory and accounts receivable, short and medium-term loans for equipment or other business capital expansion, commercial real estate loans, and municipal loans; and construction loans for 1-4 family residential and commercial real estate. It also offers wealth management and trust services consisting of investment management, administration, revocable and testamentary trusts, and custodian services for individuals, partnerships, and corporations; safe deposit services; and brokerage services. As of December 31, 2021, the company operated through 56 banking facilities and 73 ATMs/ITMs. Southside Bancshares, Inc. was founded in 1960 and is headquartered in Tyler, Texas.

About Pacific Alliance Bank

Pacific Alliance Bank provides commercial and consumer banking products and services for small to midsize business owners, and employees in the United States. It offers checking, money market, savings, and individual retirement accounts; and certificates of deposit. The company also provides mortgage, commercial, term, commercial real estate, construction, and SBA loans; and lines of credit. In addition, it offers personal and business online services; and casher checks, check reorder, night deposit, direct deposit, safe deposit boxes, positive pay/check reconciliation, wire, debit card, and other services. The company was founded in 2006 and is headquartered in San Gabriel, California.