Critical Survey: Preferred Bank (NASDAQ:PFBC) & Pioneer Bancorp (NASDAQ:PBFS)

Pioneer Bancorp (NASDAQ:PBFS) and Preferred Bank (NASDAQ:PFBC) are both small-cap finance companies, but which is the superior business? We will contrast the two businesses based on the strength of their institutional ownership, profitability, earnings, risk, dividends, valuation and analyst recommendations.

Valuation & Earnings

This table compares Pioneer Bancorp and Preferred Bank”s gross revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Pioneer Bancorp	$101.99 million	4.35	$13.41 million	$0.54	33.06
Preferred Bank	$505.97 million	3.03	$133.63 million	$10.94	9.71

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

Institutional and Insider Ownership

72.8% of Preferred Bank shares are held by institutional investors. 2.8% of Pioneer Bancorp shares are held by company insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a company will outperform the market over the long term.

Volatility and Risk

Pioneer Bancorp has a beta of 0.4, suggesting that its stock price is 60% less volatile than the S&P 500. Comparatively, Preferred Bank has a beta of 0.54, suggesting that its stock price is 46% less volatile than the S&P 500.

Profitability

This table compares Pioneer Bancorp and Preferred Bank’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Pioneer Bancorp	N/A	4.05%	0.58%
Preferred Bank	26.54%	17.27%	1.77%

Analyst Ratings

This is a breakdown of current recommendations and price targets for Pioneer Bancorp and Preferred Bank, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Pioneer Bancorp	0	0	1	0	3.00
Preferred Bank	0	5	2	1	2.50

Preferred Bank has a consensus price target of $106.25, indicating a potential upside of 0.00%. Given Preferred Bank’s higher possible upside, analysts clearly believe Preferred Bank is more favorable than Pioneer Bancorp.

Summary

Preferred Bank beats Pioneer Bancorp on 11 of the 15 factors compared between the two stocks.

About Pioneer Bancorp

Pioneer Bancorp, Inc. operates as a holding company for Pioneer Savings Bank that provides various banking products and services in New York. The company accepts various deposit products, such as demand, savings, and money market accounts, as well as certificates of deposit accounts. Its loan products include commercial real estate, commercial and industrial, commercial construction, residential mortgage lending, consumer loans, and home equity lines of credit. The company also invests in the U.S. governmental securities, fixed rate collateralized mortgage obligations, mortgage-backed securities, fixed-rate investment grade bonds, and equity securities. In addition, the company offers personal and commercial insurance products, including homeowners, automobile, and comprehensive business insurance; employee benefit products and services, such as group health, dental, disability, and life insurance products, as well as defined contribution, defined benefit administration, and human resource management services; and wealth management services comprising investment advice, retirement income planning, estate planning, business succession, and employer retirement planning. The company was founded in 1889 and is based in Albany, New York. Pioneer Bancorp, Inc. operates as a subsidiary of Pioneer Bancorp, MHC.

About Preferred Bank

Preferred Bank provides various commercial banking products and services to small and mid-sized businesses and their owners, entrepreneurs, real estate developers and investors, professionals, and high net worth individuals. The company accepts checking, savings, and money market deposit accounts; fixed-rate and fixed maturity retail, and non-retail certificates of deposit; and individual retirement accounts. It also provides real estate mortgage loans that are secured by retail, industrial, office, special purpose, and residential single and multi-family properties; real estate construction loans; commercial loans comprising lines of credit for working capital, term loans for capital expenditures, and commercial and stand-by letters of credit; and small business administration loans. In addition, the company offers trade finance services, including commercial and export letters of credit, import lines of credit, documentary collections, international wire transfers, acceptances/trust receipt financing products, export financing, and bills purchase programs. Further, it provides cash management services; and internet, mobile, and tablet banking services. The company operates through full-service branch offices in the California counties of Los Angeles, Orange and San Francisco; Flushing, New York; Houston suburb of Sugar Land, Texas; and a satellite office in Manhattan, New York. The company was incorporated in 1991 and is headquartered in Los Angeles, California.