Financial Analysis: Orrstown Financial Services (NASDAQ:ORRF) & Community Shores Bank (NASDAQ:CSHB)

Orrstown Financial Services (NASDAQ:ORRF) and Community Shores Bank (OTCMKTS:CSHB) are both small-cap finance companies, but which is the better business? We will contrast the two businesses based on the strength of their dividends, risk, profitability, institutional ownership, valuation, earnings and analyst recommendations.

Profitability

This table compares Orrstown Financial Services and Community Shores Bank’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Orrstown Financial Services 10.65% 9.48% 0.85%
Community Shores Bank N/A N/A N/A

Earnings and Valuation

This table compares Orrstown Financial Services and Community Shores Bank’s top-line revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Orrstown Financial Services $86.69 million 2.82 $12.81 million $1.81 12.02
Community Shores Bank $9.22 million 1.36 $900,000.00 N/A N/A

Orrstown Financial Services has higher revenue and earnings than Community Shores Bank.

Dividends

Orrstown Financial Services pays an annual dividend of $0.60 per share and has a dividend yield of 2.8%. Community Shores Bank does not pay a dividend. Orrstown Financial Services pays out 33.1% of its earnings in the form of a dividend. Orrstown Financial Services has increased its dividend for 3 consecutive years.

Insider & Institutional Ownership

41.1% of Orrstown Financial Services shares are owned by institutional investors. 5.0% of Orrstown Financial Services shares are owned by insiders. Comparatively, 39.7% of Community Shores Bank shares are owned by insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a stock is poised for long-term growth.

Analyst Recommendations

This is a breakdown of recent ratings for Orrstown Financial Services and Community Shores Bank, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Orrstown Financial Services 0 1 2 0 2.67
Community Shores Bank 0 0 0 0 N/A

Orrstown Financial Services currently has a consensus target price of $23.50, indicating a potential upside of 8.05%. Given Orrstown Financial Services’ higher possible upside, analysts clearly believe Orrstown Financial Services is more favorable than Community Shores Bank.

Volatility and Risk

Orrstown Financial Services has a beta of 0.59, meaning that its share price is 41% less volatile than the S&P 500. Comparatively, Community Shores Bank has a beta of 0.57, meaning that its share price is 43% less volatile than the S&P 500.

Summary

Orrstown Financial Services beats Community Shores Bank on 12 of the 14 factors compared between the two stocks.

About Orrstown Financial Services

Orrstown Financial Services, Inc. operates as the holding company for Orrstown Bank that provides commercial banking and trust services in the United States. The company accepts various deposits, including checking, savings, time, demand, and money market deposits. It also offers commercial loans, such as commercial real estate, equipment, working capital, and other commercial purpose loans; consumer loans comprising home equity and other consumer loans, as well as home equity lines of credit; residential mortgage loans; agribusiness loans; acquisition and development loans; municipal loans; and installment and other loans. In addition, the company provides renders services as trustee, executor, administrator, guardian, managing agent, custodian, and investment advisor, as well as provides other fiduciary services under the Orrstown Financial Advisors name; and offers retail brokerage services through a third-party broker/dealer arrangement. Further, it offers investment advisory services through an office in Lancaster County, Pennsylvania. The company provides its banking and bank-related services through branches located in Berks, Cumberland, Dauphin, Franklin, Lancaster, Perry, and York counties of Pennsylvania, as well as Washington County, Maryland. Orrstown Financial Services, Inc. was founded in 1919 and is headquartered in Shippensburg, Pennsylvania.

About Community Shores Bank

Community Shores Bank Corporation operates as the holding company for Community Shores Bank, a community bank that provides various commercial and consumer banking services primarily in the communities of Muskegon County and Northern Ottawa County, Michigan. The company offers various deposit services, including checking and savings accounts, time deposits, certificates of deposit, and individual retirement accounts. Its loan portfolio comprises fixed rate and adjustable rates loans, construction loans and loans for condominiums; home equity loans; and construction permanent loans. The company also provides installment loans and credit lines, including automobile loans, boat loans, recreational vehicle loans, home improvement loans, personal loans, and personal lines of credit; credit cards; and business loans, such as small business lines of credit, term loans commercial real estate loans, letters of credit, and SBA loans. In addition, it offers electronic and mobile banking services; overdrafts; re-order checks, wire transfers, safe deposit boxes, notary services, ATM and one-time debit card overdraft opt-in, gift cards, and courier services; and investment products. The company serves individuals, businesses, schools, associations, churches, nonprofit organizations, financial institutions, and government authorities. Community Shores Bank Corporation was founded in 1998 and is based in Muskegon, Michigan.

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