Critical Analysis: California Business Bank (OTCMKTS:CABB) versus First Financial Bankshares (NASDAQ:FFIN)

First Financial Bankshares (NASDAQ:FFIN) and California Business Bank (OTCMKTS:CABB) are both finance companies, but which is the superior investment? We will contrast the two companies based on the strength of their profitability, institutional ownership, risk, dividends, analyst recommendations, earnings and valuation.

Risk and Volatility

First Financial Bankshares has a beta of 0.83, meaning that its share price is 17% less volatile than the S&P 500. Comparatively, California Business Bank has a beta of 0.49, meaning that its share price is 51% less volatile than the S&P 500.

Insider and Institutional Ownership

69.8% of First Financial Bankshares shares are held by institutional investors. 3.8% of First Financial Bankshares shares are held by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company will outperform the market over the long term.

Analyst Recommendations

This is a breakdown of current ratings and target prices for First Financial Bankshares and California Business Bank, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
First Financial Bankshares	0	3	1	0	2.25
California Business Bank	0	0	0	0	0.00

First Financial Bankshares currently has a consensus target price of $38.00, indicating a potential upside of 29.30%. Given First Financial Bankshares’ stronger consensus rating and higher possible upside, equities analysts plainly believe First Financial Bankshares is more favorable than California Business Bank.

Earnings and Valuation

This table compares First Financial Bankshares and California Business Bank”s gross revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
First Financial Bankshares	$617.11 million	6.82	$253.58 million	$1.77	16.60
California Business Bank	N/A	N/A	N/A	N/A	N/A

First Financial Bankshares has higher revenue and earnings than California Business Bank.

Profitability

This table compares First Financial Bankshares and California Business Bank’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
First Financial Bankshares	30.43%	14.16%	1.72%
California Business Bank	N/A	N/A	N/A

Summary

First Financial Bankshares beats California Business Bank on 10 of the 10 factors compared between the two stocks.

About First Financial Bankshares

First Financial Bankshares, Inc., through its subsidiaries, provides commercial banking products and services in Texas. The company offers checking, savings and time deposits; automated teller machines, drive-in, and night deposit services; safe deposit facilities, remote deposit capture, internet banking, mobile banking, payroll cards, funds transfer, and performing other customary commercial banking services; securities brokerage services; and trust and wealth management services, including wealth management, estates administration, oil and gas management, testamentary trusts, revocable and irrevocable trusts, and agency accounts. It also provides commercial and industrial, municipal, agricultural, construction and development, farm, residential, and consumer auto and non-auto, as well as non-owner occupied and owner occupied commercial real estate loans. In addition, the company offers advisory and specialized services related to asset management, investing, purchasing, advertising, public relations, and technology services. First Financial Bankshares, Inc. was founded in 1890 and is headquartered in Abilene, Texas.

About California Business Bank

California Business Bank provides various financial products and services for small businesses and entrepreneurs. The company offers various personal and business deposit products; and business and commercial loans comprising SBA, commercial and industrial, and commercial real estate loans. It also provides online and mobile banking, mobile deposit, bill pay, and other services. The company was founded in 2005 and is headquartered in Irvine, California.