Analyzing Farmers And Merchants Bank of Long Beach (OTCMKTS:FMBL) & LCNB (OTCMKTS:LCNB)

Farmers And Merchants Bank of Long Beach (OTCMKTS:FMBL) and LCNB (NASDAQ:LCNB) are both small-cap finance companies, but which is the better stock? We will contrast the two businesses based on the strength of their analyst recommendations, valuation, institutional ownership, dividends, earnings, profitability and risk.

Volatility and Risk

Farmers And Merchants Bank of Long Beach has a beta of 0.38, indicating that its share price is 62% less volatile than the S&P 500. Comparatively, LCNB has a beta of 0.59, indicating that its share price is 41% less volatile than the S&P 500.

Dividends

Farmers And Merchants Bank of Long Beach pays an annual dividend of $108.00 per share and has a dividend yield of 1.4%. LCNB pays an annual dividend of $0.72 per share and has a dividend yield of 3.9%. LCNB pays out 51.8% of its earnings in the form of a dividend. LCNB has increased its dividend for 2 consecutive years. LCNB is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Earnings & Valuation

This table compares Farmers And Merchants Bank of Long Beach and LCNB’s revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Farmers And Merchants Bank of Long Beach $279.16 million 3.63 $45.53 million N/A N/A
LCNB $65.64 million 3.61 $14.85 million $1.39 13.14

Farmers And Merchants Bank of Long Beach has higher revenue and earnings than LCNB.

Analyst Ratings

This is a breakdown of recent recommendations for Farmers And Merchants Bank of Long Beach and LCNB, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Farmers And Merchants Bank of Long Beach 0 0 0 0 N/A
LCNB 0 1 0 0 2.00

Insider and Institutional Ownership

6.8% of Farmers And Merchants Bank of Long Beach shares are owned by institutional investors. Comparatively, 35.7% of LCNB shares are owned by institutional investors. 12.8% of Farmers And Merchants Bank of Long Beach shares are owned by company insiders. Comparatively, 6.5% of LCNB shares are owned by company insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock will outperform the market over the long term.

Profitability

This table compares Farmers And Merchants Bank of Long Beach and LCNB’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Farmers And Merchants Bank of Long Beach 29.86% 26.61% 2.58%
LCNB 25.22% 8.76% 1.19%

Summary

Farmers And Merchants Bank of Long Beach beats LCNB on 8 of the 13 factors compared between the two stocks.

About Farmers And Merchants Bank of Long Beach

Farmers & Merchants Bank of Long Beach provides various banking products and services to individuals, professionals, and small to medium-sized businesses in California. The company's products and services include demand and time deposits; commercial real estate, construction, and commercial business loans; and financing for residential loans comprising single-family and multifamily loans. Its personal banking products and services include checking, savings, Christmas club, health savings, money market, and CD accounts; retirement plans, online and mobile banking, and other services; and credit and loans, such as credit cards, home loans, and escrow services. The company's business banking products and services comprise banking services, business checking, money market accounts, retirement plans, business savings, CDs, online banking, mobile banking, merchant services, payroll services, deposit lockbox, remote deposit capture, and other services; and credit and loans, including business credit cards, small business loans, commercial loans, real estate and construction loans, and lines of credit. As of December 31, 2017, it operated 24 branches in Los Angeles County and Orange County. The company was founded in 1907 and is headquartered in Long Beach, California. Farmers & Merchants Bank of Long Beach is a subsidiary of Palomar Enterprises, LLC.

About LCNB

LCNB Corp. operates as the financial holding company for LCNB National Bank that provides commercial and personal banking services in Ohio. The company's deposit products include checking, NOW, savings, Christmas and vacation club, money market deposit, lifetime checking, and individual retirement accounts, as well as certificates of deposit. Its loan portfolio comprises commercial and industrial, commercial and residential real estate, agricultural, construction, small business administration, and residential mortgage loans. The company also offers consumer loans, such as automobile, boat, home improvement, and personal loans. In addition, it provides trust administrative, estate settlement, and fiduciary services; and investment management services for trusts, agency accounts, individual retirement accounts, and foundations/endowments. Further, the company offers investment services and products, including financial needs analysis, mutual funds, securities trading, annuities, and life insurance; and security brokerage services. Additionally, it 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, personal computer-based cash management services, telephone banking, PC Internet banking, mobile banking, and other services for individuals and businesses. As of December 31, 2018, the company operated through 35 offices, including a main office in Warren County; branch offices in Warren, Butler, Clinton, Clermont, Fayette, Franklin, Hamilton, Montgomery, Preble, and Ross Counties; a loan production office in Franklin County; and an operations center in Warren County, Ohio, as well as 38 ATMs. LCNB Corp. was founded in 1877 and is headquartered in Lebanon, Ohio.

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