Critical Analysis: BANCORP 34 (OTCMKTS:BCTF) vs. Pinnacle Bank (OTCMKTS:PBNK)

Institutional and Insider Ownership

6.5% of BANCORP 34 shares are held by institutional investors. Comparatively, 8.4% of Pinnacle Bank shares are held by institutional investors. 7.4% of BANCORP 34 shares are held by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock is poised for long-term growth.

Valuation and Earnings

This table compares BANCORP 34 and Pinnacle Bank”s gross revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
BANCORP 34	$56.34 million	1.63	$1.69 million	$0.88	15.28
Pinnacle Bank	$53.91 million	2.15	$8.85 million	$0.86	22.73

Pinnacle Bank has lower revenue, but higher earnings than BANCORP 34. BANCORP 34 is trading at a lower price-to-earnings ratio than Pinnacle Bank, indicating that it is currently the more affordable of the two stocks.

Volatility & Risk

BANCORP 34 has a beta of 0.17, meaning that its stock price is 83% less volatile than the S&P 500. Comparatively, Pinnacle Bank has a beta of 0.25, meaning that its stock price is 75% less volatile than the S&P 500.

Profitability

This table compares BANCORP 34 and Pinnacle Bank’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
BANCORP 34	11.76%	4.02%	0.38%
Pinnacle Bank	16.62%	8.37%	0.97%

Summary

Pinnacle Bank beats BANCORP 34 on 8 of the 11 factors compared between the two stocks.

About BANCORP 34

Bancorp 34, Inc. operates as the holding company for Bank 34 that offers various banking products and services to individuals and businesses in the United States. It accepts various deposit products, such as savings accounts, checking accounts, money market accounts, demand and time deposits, NOW accounts, and individual retirement accounts, as well as certificates of deposit. The company also provides term, working capital, construction, USDA, small business administration, equipment, assisted living and skilled nursing, renewable energy and solar equipment, and commercial real estate loans; and small to medium size business and business acquisitions financing; lines of credit; multi-family finance; and employee stock ownership plans, HOA lending, and investor pools of single family rentals. In addition, it offers credit and debit cards; safe deposit boxes; treasury management products; and merchant card processing, cash management, e-banking, mobile and online banking, bill payment, and merchant capture services. The company operates through its network of full-service branches in Scottsdale and Arizona, as well as Alamogordo and Las Cruces, New Mexico. Bancorp 34, Inc. was founded in 1934 and is headquartered in Scottsdale, Arizona.

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.