Central Pacific Financial (NYSE:CPF) versus Midland States Bancorp (NYSE:MSBI) Financial Review

Midland States Bancorp (NASDAQ:MSBI) and Central Pacific Financial (NYSE:CPF) are both small-cap finance companies, but which is the superior investment? We will contrast the two companies based on the strength of their valuation, profitability, earnings, risk, analyst recommendations, institutional ownership and dividends.

Profitability

This table compares Midland States Bancorp and Central Pacific Financial’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Midland States Bancorp 16.69% 10.06% 1.07%
Central Pacific Financial 24.93% 12.54% 1.06%

Analyst Recommendations

This is a breakdown of current ratings and price targets for Midland States Bancorp and Central Pacific Financial, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Midland States Bancorp 0 0 1 0 3.00
Central Pacific Financial 0 0 0 0 N/A

Midland States Bancorp currently has a consensus price target of $27.00, indicating a potential upside of 2.82%. Given Midland States Bancorp’s higher possible upside, equities research analysts plainly believe Midland States Bancorp is more favorable than Central Pacific Financial.

Earnings and Valuation

This table compares Midland States Bancorp and Central Pacific Financial’s gross revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Midland States Bancorp $295.36 million 2.14 $39.42 million $2.04 12.87
Central Pacific Financial $237.10 million 3.64 $59.49 million $2.01 15.01

Central Pacific Financial has lower revenue, but higher earnings than Midland States Bancorp. Midland States Bancorp is trading at a lower price-to-earnings ratio than Central Pacific Financial, indicating that it is currently the more affordable of the two stocks.

Dividends

Midland States Bancorp pays an annual dividend of $0.97 per share and has a dividend yield of 3.7%. Central Pacific Financial pays an annual dividend of $0.92 per share and has a dividend yield of 3.0%. Midland States Bancorp pays out 47.5% of its earnings in the form of a dividend. Central Pacific Financial pays out 45.8% of its earnings in the form of a dividend. Both companies have healthy payout ratios and should be able to cover their dividend payments with earnings for the next several years. Midland States Bancorp has increased its dividend for 2 consecutive years and Central Pacific Financial has increased its dividend for 3 consecutive years.

Institutional and Insider Ownership

47.6% of Midland States Bancorp shares are held by institutional investors. Comparatively, 95.9% of Central Pacific Financial shares are held by institutional investors. 12.7% of Midland States Bancorp shares are held by insiders. Comparatively, 3.8% of Central Pacific Financial shares are held by insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a stock is poised for long-term growth.

Volatility and Risk

Midland States Bancorp has a beta of 1.35, meaning that its stock price is 35% more volatile than the S&P 500. Comparatively, Central Pacific Financial has a beta of 1.02, meaning that its stock price is 2% more volatile than the S&P 500.

About Midland States Bancorp

Midland States Bancorp, Inc. operates as a financial holding company for Midland States Bank that provides various banking products and services to individuals, businesses, municipalities, and other entities. It operates through Banking, Commercial FHA Origination and Servicing, Wealth Management, and Other segments. The company accepts various deposits, such as checking, savings, money market, and sweep accounts, as well as certificates of deposit, noninterest-bearing and interest-bearing demand deposits, and time deposits. Its loan portfolio include commercial lending products consisting of owner occupied commercial real estate, commercial real estate investment, real estate construction, and multifamily loans, as well as loans to purchase farmland and finance agricultural production; business term loans, equipment financing, and lines of credit; consumer installment loans for purchase cars, boats, other recreational vehicles, and appliances, as well as other home improvement projects; and residential first and second mortgage loans, and home equity lines of credit. The company also originates residential mortgage loans; and commercial mortgage loans for multifamily and healthcare facilities. In addition, it provides trust and wealth management products and services, including financial and estate planning, trustee and custodial services, investment management, tax and insurance planning, business planning, corporate retirement plan consulting and administration, and retail brokerage services. Further, the company offers commercial equipment leasing and merchant services. As of December 31, 2018, it operated 69 banking offices in 48 communities within its market areas, such as Illinois and the St. Louis metropolitan areas. The company was founded in 1881 and is headquartered in Effingham, Illinois.

About Central Pacific Financial

Central Pacific Financial Corp. operates as the holding company for Central Pacific Bank that provides commercial banking products and services to businesses, professionals, and individuals in Hawaii. The company operates in three segments: Banking Operations, Treasury, and All Others. It offers various deposit products and services, including personal and business checking and savings accounts, money market accounts, and time certificates of deposit. The company's lending activities comprise commercial loans, commercial mortgages, construction loans, and leases to small and medium-sized companies, business professionals, and real estate investors and developers, as well as residential mortgages and consumer loans to local homebuyers and individuals. It also provides debit cards, Internet and mobile banking, cash management services, traveler's checks, safe deposit boxes, international banking services, night depository facilities, foreign exchange and wire transfers, trust services, retail brokerage, and wholesale funding services. In addition, the company offers wealth management products and services, including non-deposit investment products, annuities, insurance, investment management, asset custody, and general consultation and planning services. It operates 35 branches and 79 ATMs in the state of Hawaii. The company was founded in 1954 and is headquartered in Honolulu, Hawaii.

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