Critical Survey: Pinnacle Bank (OTCMKTS:PBNK) versus Red River Bancshares (NASDAQ:RRBI)

Pinnacle Bank (OTCMKTS:PBNK) and Red River Bancshares (NASDAQ:RRBI) are both small-cap finance companies, but which is the better business? We will contrast the two businesses based on the strength of their institutional ownership, analyst recommendations, dividends, earnings, profitability, risk and valuation.

Institutional and Insider Ownership

8.4% of Pinnacle Bank shares are held by institutional investors. Comparatively, 27.6% of Red River Bancshares shares are held by institutional investors. 15.9% of Red River Bancshares shares are held by company insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a company will outperform the market over the long term.

Earnings and Valuation

This table compares Pinnacle Bank and Red River Bancshares”s top-line revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Pinnacle Bank	$53.91 million	2.17	$8.85 million	$1.00	19.75
Red River Bancshares	$157.67 million	2.74	$34.24 million	$6.03	10.89

Red River Bancshares has higher revenue and earnings than Pinnacle Bank. Red River Bancshares is trading at a lower price-to-earnings ratio than Pinnacle Bank, indicating that it is currently the more affordable of the two stocks.

Analyst Recommendations

This is a summary of recent ratings for Pinnacle Bank and Red River Bancshares, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Pinnacle Bank	0	0	0	0	0.00
Red River Bancshares	0	1	2	0	2.67

Red River Bancshares has a consensus price target of $67.00, indicating a potential upside of 1.99%. Given Red River Bancshares’ stronger consensus rating and higher probable upside, analysts plainly believe Red River Bancshares is more favorable than Pinnacle Bank.

Profitability

This table compares Pinnacle Bank and Red River Bancshares’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Pinnacle Bank	14.83%	7.72%	0.88%
Red River Bancshares	24.44%	12.34%	1.28%

Risk and Volatility

Pinnacle Bank has a beta of 0.33, meaning that its stock price is 67% less volatile than the S&P 500. Comparatively, Red River Bancshares has a beta of 0.55, meaning that its stock price is 45% less volatile than the S&P 500.

Summary

Red River Bancshares beats Pinnacle Bank on 13 of the 14 factors compared between the two stocks.

About Pinnacle Bank

Pinnacle Bank, a commercial bank, provides various depository and credit services in Santa Clara, San Benito, and Monterey counties. The company offers checking, savings, money market, sweep, and individual retirement accounts, as well as certificates of deposit and certificates of deposit account registry services. It also provides home equity lines of credit and single family home construction loans; and loans and lines of credit, letters of credit, commercial real estate, and government assisted loans, as well as credit cards. In addition, the company offers automated teller machine cards/debit cards, debit card protection products, and safe deposit boxes; cash management products, such as online and mobile banking, online bill payment, mobile check deposit, automated clearing house (ACH) origination, remote deposit capture, night depository box, positive pay, ACH fraud filter, merchant card processing, wire transfer, and foreign currency services; and asset based lending covering accounts receivable financing, factoring, and purchase order financing services. It serves individual and business customers, as well as nonprofit organizations in Morgan Hill, Gilroy, Salinas, and Campbell. Pinnacle Bank was founded in 2006 and is headquartered in Gilroy, California.

About Red River Bancshares

Red River Bancshares, Inc. operates as a bank holding company for Red River Bank that provides banking products and services to commercial and retail customers in Louisiana. The company provides various deposit products, including checking, saving, money market accounts, and time deposits. It offers commercial real estate loans; one-to-four family mortgage loans and home equity lines of credit; construction and development loans; commercial and industrial loans; small business administration paycheck protection program loans; tax-exempt loans; consumer loans to individuals for personal, family, and household purposes, including secured and unsecured installment and term loans; home mortgage loans; and lines of credit and standby letters of credit. In addition, the company provides treasury management, private banking, and brokerage; investment advisory, financial planning, and a suite of retirement plans; debit and credit cards, direct deposits, cashier's checks, and wire transfer services; online banking services, including access to account balances, online transfers, online bill payment, and electronic delivery of customer statements; and banking services in person, through ATMs, drive-through facilities, night deposits, telephone, mail, mobile banking, and remote deposits. Red River Bancshares, Inc. was incorporated in 1998 and is headquartered in Alexandria, Louisiana.