Comparing Republic First Bancorp (FRBK) and Orrstown Financial Services (ORRF)

Republic First Bancorp (NASDAQ: FRBK) and Orrstown Financial Services (NASDAQ:ORRF) are both small-cap financials companies, but which is the better business? We will compare the two businesses based on the strength of their profitability, risk, dividends, institutional ownership, analyst recommendations, earnings and valuation.

Analyst Recommendations

This is a breakdown of current ratings and target prices for Republic First Bancorp and Orrstown Financial Services, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Republic First Bancorp 0 2 0 0 2.00
Orrstown Financial Services 0 1 1 0 2.50

Republic First Bancorp currently has a consensus target price of $9.00, indicating a potential upside of 2.27%. Orrstown Financial Services has a consensus target price of $28.00, indicating a potential upside of 12.90%. Given Orrstown Financial Services’ stronger consensus rating and higher possible upside, analysts clearly believe Orrstown Financial Services is more favorable than Republic First Bancorp.

Dividends

Orrstown Financial Services pays an annual dividend of $0.48 per share and has a dividend yield of 1.9%. Republic First Bancorp does not pay a dividend. Orrstown Financial Services pays out 39.3% of its earnings in the form of a dividend.

Valuation & Earnings

This table compares Republic First Bancorp and Orrstown Financial Services’ revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Republic First Bancorp $69.35 million 7.23 $4.94 million $0.14 62.86
Orrstown Financial Services $61.70 million 3.36 $6.62 million $1.22 20.33

Orrstown Financial Services has lower revenue, but higher earnings than Republic First Bancorp. Orrstown Financial Services is trading at a lower price-to-earnings ratio than Republic First Bancorp, indicating that it is currently the more affordable of the two stocks.

Profitability

This table compares Republic First Bancorp and Orrstown Financial Services’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Republic First Bancorp 8.97% 3.48% 0.38%
Orrstown Financial Services 14.58% 7.15% 0.68%

Volatility & Risk

Republic First Bancorp has a beta of 1.05, meaning that its stock price is 5% more volatile than the S&P 500. Comparatively, Orrstown Financial Services has a beta of 0.67, meaning that its stock price is 33% less volatile than the S&P 500.

Institutional and Insider Ownership

54.3% of Republic First Bancorp shares are owned by institutional investors. Comparatively, 39.6% of Orrstown Financial Services shares are owned by institutional investors. 12.2% of Republic First Bancorp shares are owned by insiders. Comparatively, 5.4% of Orrstown Financial Services shares are owned by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock is poised for long-term growth.

Summary

Orrstown Financial Services beats Republic First Bancorp on 9 of the 16 factors compared between the two stocks.

Republic First Bancorp Company Profile

Republic First Bancorp, Inc. is a holding company for Republic First Bank (Republic or the Bank), which does business under the name Republic Bank. The Company’s community banking segment encompasses the commercial loan and deposit activities of Republic, as well as consumer loan products in the areas surrounding its store network. The Company offers a range of banking products and services, including consumer and commercial deposit accounts, checking accounts, interest-bearing demand accounts, money market accounts, certificates of deposit, savings accounts, sweep accounts, lockbox services and individual retirement accounts (and other traditional banking services), secured and unsecured commercial loans, real estate loans, construction and land development loans, automobile loans, home improvement loans, mortgages, home equity and overdraft lines of credit, and other products. The Bank offers a range of credit and depository banking services.

Orrstown Financial Services Company Profile

Orrstown Financial Services, Inc. is the bank holding company for Orrstown Bank (the Bank). The Bank is engaged in commercial banking and trust business. The Company operates through Community Banking segment. The Bank’s activities involve accepting demand, time and savings deposits, and granting loans. The Bank grants commercial, residential, consumer and agribusiness loans in its market areas of Cumberland, Franklin, Lancaster and Perry Counties in Pennsylvania and in Washington County, Maryland. The Company’s securities available for sale include debt and equity instruments. Through its trust department, the Bank renders services as trustee, executor, administrator, managing agent, custodian, investment advisor and other fiduciary activities authorized by law under the trade name, Orrstown Financial Advisors (OFA). OFA offers retail brokerage services through a third-party broker or dealer arrangement with Cetera Advisor Networks LLC.

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