Banc of California (NYSE:BANC) versus Red River Bancshares (NASDAQ:RRBI) Critical Comparison

Red River Bancshares (NASDAQ:RRBI) and Banc of California (NYSE:BANC) are both finance companies, but which is the better investment? We will contrast the two companies based on the strength of their dividends, institutional ownership, analyst recommendations, valuation, profitability, earnings and risk.

Insider and Institutional Ownership

27.6% of Red River Bancshares shares are held by institutional investors. Comparatively, 86.9% of Banc of California shares are held by institutional investors. 15.9% of Red River Bancshares shares are held by insiders. Comparatively, 2.7% of Banc of California shares are held by insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a stock will outperform the market over the long term.

Earnings and Valuation

This table compares Red River Bancshares and Banc of California”s gross revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Red River Bancshares	$157.67 million	2.80	$34.24 million	$5.67	11.64
Banc of California	$1.00 billion	2.45	$126.89 million	$0.65	25.64

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

Profitability

This table compares Red River Bancshares and Banc of California’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Red River Bancshares	23.62%	11.76%	1.23%
Banc of California	8.30%	7.37%	0.65%

Analyst Ratings

This is a summary of current ratings and price targets for Red River Bancshares and Banc of California, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Red River Bancshares	0	0	1	1	3.50
Banc of California	0	3	8	0	2.73

Red River Bancshares currently has a consensus target price of $67.00, suggesting a potential upside of 1.48%. Banc of California has a consensus target price of $17.45, suggesting a potential upside of 4.74%. Given Banc of California’s higher probable upside, analysts clearly believe Banc of California is more favorable than Red River Bancshares.

Dividends

Red River Bancshares pays an annual dividend of $0.60 per share and has a dividend yield of 0.9%. Banc of California pays an annual dividend of $0.40 per share and has a dividend yield of 2.4%. Red River Bancshares pays out 10.6% of its earnings in the form of a dividend. Banc of California pays out 61.5% of its earnings in the form of a dividend. Both companies have healthy payout ratios and should be able to cover their dividend payments with earnings for the next several years. Red River Bancshares has increased its dividend for 3 consecutive years.

Risk & Volatility

Red River Bancshares has a beta of 0.53, indicating that its share price is 47% less volatile than the S&P 500. Comparatively, Banc of California has a beta of 0.71, indicating that its share price is 29% less volatile than the S&P 500.

Summary

Red River Bancshares beats Banc of California on 10 of the 18 factors compared between the two stocks.

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.

About Banc of California

Banc of California, Inc. operates as the bank holding company for Banc of California that provides various banking products and services in California. The company offers deposit products, such as checking, savings, money market, demand, and time deposits; certificates of deposit; retirement accounts; and safe deposit boxes. It also provides real estate loans to professional developers and real estate investors for the acquisition, construction, refinancing, renovation, and on-going operation of commercial real estate properties; commercial real estate mortgage, residential real estate mortgage, and real estate construction and land loans; commercial loans and leases, such as equipment finance, other asset-based, venture capital, secured business, warehouse, and other lending services; small business administration loans; and consumer loans comprising personal, auto, and other loans, as well as home equity and revolving lines of credit. In addition, the company offers international banking, multi-state deposit, and asset and investment management services, as well as cash and treasury management services; and online, mobile, remote deposit, and telephone banking services. It serves small and middle-market businesses, venture capital firms, non-profit organizations, business owners, entrepreneurs, professionals, and high-net worth individuals. Banc of California, Inc. was founded in 1941 and is headquartered in Los Angeles, California.