Flushing Financial (NASDAQ:FFIC) and Southern Banc (OTCMKTS:SRNN) Critical Review

Southern Banc (OTCMKTS:SRNN) and Flushing Financial (NASDAQ:FFIC) are both small-cap finance companies, but which is the better investment? We will compare the two companies based on the strength of their risk, dividends, earnings, profitability, valuation, analyst recommendations and institutional ownership.

Analyst Ratings

This is a breakdown of recent ratings and target prices for Southern Banc and Flushing Financial, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Southern Banc	0	0	0	0	0.00
Flushing Financial	1	2	0	0	1.67

Volatility and Risk

Southern Banc has a beta of -0.1, suggesting that its share price is 110% less volatile than the S&P 500. Comparatively, Flushing Financial has a beta of 0.81, suggesting that its share price is 19% less volatile than the S&P 500.

Valuation & Earnings

This table compares Southern Banc and Flushing Financial”s gross revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Southern Banc	$12.13 million	0.67	$920,000.00	$1.21	8.31
Flushing Financial	$484.72 million	1.05	-$31.33 million	($1.19)	-12.65

Southern Banc has higher earnings, but lower revenue than Flushing Financial. Flushing Financial is trading at a lower price-to-earnings ratio than Southern Banc, indicating that it is currently the more affordable of the two stocks.

Profitability

This table compares Southern Banc and Flushing Financial’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Southern Banc	7.55%	5.65%	0.75%
Flushing Financial	-6.93%	4.98%	0.40%

Insider and Institutional Ownership

67.1% of Flushing Financial shares are owned by institutional investors. 22.0% of Southern Banc shares are owned by insiders. Comparatively, 5.7% of Flushing Financial shares are owned by insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a company will outperform the market over the long term.

Summary

Southern Banc beats Flushing Financial on 7 of the 12 factors compared between the two stocks.

About Southern Banc

The Southern Banc Company, Inc. operates as the holding company for The Southern Bank company that provides various banking products and services in Alabama. The company’s personal banking products include checking accounts, home mortgage loans, home equity loans, auto loans, and personal loans. Its business banking products comprise business checking accounts, cash flow management, real estate lending, and equipment financing. The Southern Banc Company, Inc. was founded in 1936 and is based in Gadsden, Alabama.

About Flushing Financial

Flushing Financial Corporation operates as the bank holding company for Flushing Bank that provides banking products and services primarily to consumers, businesses, and governmental units. It offers various deposit products, including checking and savings accounts, money market accounts, non-interest bearing demand accounts, NOW accounts, and certificates of deposit. The company also provides mortgage loans secured by multi-family residential, commercial real estate, one-to-four family mixed-use property, one-to-four family residential property, and commercial business loans; construction loans; small business administration loans and other small business loans; mortgage loan surrogates, such as mortgage-backed securities; and consumer loans, including overdraft lines of credit, as well as the United States government securities, corporate fixed-income securities, and other marketable securities. It operates full-service banking offices in Queens, Nassau, Suffolk, Kings, and New York counties, New York; and an internet branch under the iGObanking and BankPurely brands. Flushing Financial Corporation was founded in 1929 and is based in Uniondale, New York.