Comparing Prime Meridian (OTCMKTS:PMHG) & Commonwealth Business Bank (OTCMKTS:CBBI)

Earnings and Valuation

This table compares Commonwealth Business Bank and Prime Meridian”s gross revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Commonwealth Business Bank	$122.69 million	N/A	$22.43 million	$1.80	5.94
Prime Meridian	$50.36 million	3.61	$8.49 million	$2.48	21.67

Commonwealth Business Bank has higher revenue and earnings than Prime Meridian. Commonwealth Business Bank is trading at a lower price-to-earnings ratio than Prime Meridian, indicating that it is currently the more affordable of the two stocks.

Profitability

This table compares Commonwealth Business Bank and Prime Meridian’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Commonwealth Business Bank	15.89%	N/A	N/A
Prime Meridian	15.49%	9.27%	0.87%

Volatility and Risk

Commonwealth Business Bank has a beta of 0.24, suggesting that its stock price is 76% less volatile than the S&P 500. Comparatively, Prime Meridian has a beta of 0.17, suggesting that its stock price is 83% less volatile than the S&P 500.

Insider and Institutional Ownership

11.8% of Prime Meridian shares are owned by institutional investors. 25.9% of Prime Meridian shares are owned 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.

Dividends

Commonwealth Business Bank pays an annual dividend of $0.50 per share and has a dividend yield of 4.7%. Prime Meridian pays an annual dividend of $1.00 per share and has a dividend yield of 1.9%. Commonwealth Business Bank pays out 27.8% of its earnings in the form of a dividend. Prime Meridian pays out 40.3% 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. Commonwealth Business Bank is clearly the better dividend stock, given its higher yield and lower payout ratio.

About Commonwealth Business Bank

CBB Bancorp, Inc. operates as the holding company for Commonwealth Business Bank that provides various commercial banking products and services to individuals and businesses in the United States. It offers checking, savings, money market, and certification of deposit accounts; SBA lending; business lines of credit; business term loans; business and commercial property loans; construction loans; and credit cards. The company also provides treasury management, and mobile and online banking services, as well as title and escrow services. In addition, it engages in investing activities; and offers trade finance services, including commercial letters of credit, standby letters of credit, and documentary collection services. The company offers its services through full-service and limited-service branches in Southern California, Dallas, Texas and Honolulu, and Hawaii; and loan production offices in the states of Colorado, Georgia, Texas, and Washington. CBB Bancorp, Inc. was founded in 2005 and is headquartered in Los Angeles, California.

About Prime Meridian

Prime Meridian Holding Company operates as the bank holding company for Prime Meridian Bank that provides various consumer and commercial banking services to individuals and businesses. The company accepts various deposits, such as checking, money market, savings, term certificate of deposit, demand interest-bearing and noninterest-bearing, health savings, NOW, and escrow accounts, as well as retirement savings plans and time deposits. Its loan products include commercial real estate, residential real estate and home equity, small business administration, construction, equipment, and commercial loans; and consumer and other loans comprising financing of automobiles, boats, and recreational vehicles, as well as issues standby letters and business lines of credit. The company also offers debit and credit cards; mobile banking, remote and mobile deposit, Apple Pay, bank-to-bank transfer, and online banking services; and safe deposit, wire transfer, foreign exchange, direct deposits, notary, night depository, official checks, domestic collections, bank drafts, automated teller services, drive-in tellers, merchant card, and banking by mail services, as well as invests in securities. Prime Meridian Holding Company was founded in 2008 and is headquartered in Tallahassee, Florida.