Contrasting Banc of California (NYSE:BANC) & LCNB (NASDAQ:LCNB)

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

Volatility and Risk

LCNB has a beta of 0.77, indicating that its share price is 23% less volatile than the S&P 500. Comparatively, Banc of California has a beta of 1.14, indicating that its share price is 14% more volatile than the S&P 500.

Dividends

LCNB pays an annual dividend of $0.88 per share and has a dividend yield of 5.9%. Banc of California pays an annual dividend of $0.40 per share and has a dividend yield of 2.6%. LCNB pays out 172.5% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Banc of California pays out -9.4% of its earnings in the form of a dividend.

Analyst Ratings

This is a breakdown of recent ratings and price targets for LCNB and Banc of California, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
LCNB	0	1	0	0	2.00
Banc of California	0	4	6	0	2.60

LCNB presently has a consensus price target of $16.25, suggesting a potential upside of 8.77%. Banc of California has a consensus price target of $17.80, suggesting a potential upside of 14.76%. Given Banc of California’s stronger consensus rating and higher possible upside, analysts clearly believe Banc of California is more favorable than LCNB.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
LCNB	5.88%	6.39%	0.67%
Banc of California	-20.75%	2.93%	0.24%

Institutional and Insider Ownership

34.7% of LCNB shares are owned by institutional investors. Comparatively, 86.9% of Banc of California shares are owned by institutional investors. 5.8% of LCNB shares are owned by company insiders. Comparatively, 7.4% of Banc of California shares are owned by company insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a stock will outperform the market over the long term.

Earnings and Valuation

This table compares LCNB 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
LCNB	$76.65 million	2.75	$12.63 million	$0.51	29.29
Banc of California	$472.31 million	5.22	-$1.90 billion	($4.27)	-3.63

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

Summary

Banc of California beats LCNB on 9 of the 16 factors compared between the two stocks.

About LCNB

LCNB Corp. operates as the financial holding company for LCNB National Bank that provides banking services in Ohio. Its deposit products include checking accounts, demand deposits, savings accounts, NOW and money market deposits, as well as individual retirement accounts and time certificates. The company's loan products comprise commercial and industrial, commercial and residential real estate, agricultural, construction, and small business administration loans; and residential mortgage loans that consists of loans for purchasing or refinancing personal residences, home equity lines of credit, and loans for commercial or consumer purposes secured by residential mortgages. It offers consumer loans, such as automobile, recreational vehicles, boat, home improvement, and personal loans. In addition, the company provides trust administration, estate settlement, and fiduciary services; and investment management services for trusts, agency accounts, individual retirement accounts, and foundations/endowments. Further, it offers investment services and products, including financial needs analysis, mutual funds, securities trading, annuities, and life insurance; and security brokerage services. Additionally, the company provides safe deposit boxes, night depositories, cashier's checks, bank-by-mail, ATMs, cash and transaction services, debit cards, wire transfers, electronic funds transfer, utility bill collections, notary public service, cash management services, telephone banking, PC Internet banking, mobile banking, and other services for individuals and businesses. LCNB Corp. was founded in 1877 and is headquartered in Lebanon, Ohio.

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.