Reviewing Midland States Bancorp (NASDAQ:MSBI) and California Business Bank (OTCMKTS:CABB)

California Business Bank (OTCMKTS:CABB) and Midland States Bancorp (NASDAQ:MSBI) are both small-cap finance companies, but which is the superior investment? We will contrast the two businesses based on the strength of their institutional ownership, profitability, earnings, risk, valuation, dividends and analyst recommendations.

Insider and Institutional Ownership

60.9% of Midland States Bancorp shares are held by institutional investors. 8.6% of Midland States Bancorp shares are held by insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a stock will outperform the market over the long term.

Profitability

This table compares California Business Bank and Midland States Bancorp’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
California Business Bank	N/A	N/A	N/A
Midland States Bancorp	9.40%	13.32%	0.92%

Analyst Ratings

This is a breakdown of recent ratings and price targets for California Business Bank and Midland States Bancorp, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
California Business Bank	0	0	0	0	0.00
Midland States Bancorp	0	5	0	1	2.33

Midland States Bancorp has a consensus target price of $29.10, indicating a potential downside of 11.21%. Given Midland States Bancorp’s stronger consensus rating and higher probable upside, analysts clearly believe Midland States Bancorp is more favorable than California Business Bank.

Risk & Volatility

California Business Bank has a beta of 0.6, indicating that its share price is 40% less volatile than the S&P 500. Comparatively, Midland States Bancorp has a beta of 0.66, indicating that its share price is 34% less volatile than the S&P 500.

Earnings & Valuation

This table compares California Business Bank and Midland States Bancorp”s gross revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
California Business Bank	N/A	N/A	N/A	N/A	N/A
Midland States Bancorp	$476.05 million	1.43	-$124.28 million	$1.56	21.01

California Business Bank has higher earnings, but lower revenue than Midland States Bancorp.

Summary

Midland States Bancorp beats California Business Bank on 10 of the 10 factors compared between the two stocks.

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.

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, Wealth Management, and Other segments. The company provides a range of financial products and services to consumers and businesses, including commercial loans to finance agricultural equipment and production; and commercial real estate loans for owner occupied offices, warehouses and production facilities, office buildings, hotels, mixed-use residential and commercial facilities, retail centers, multifamily properties, and assisted living facilities. In addition, it offers construction and land development loans, such as real estate investment properties and residential developments, and lesser extent loans; and residential real estate loans, which includes first and second mortgage loans, and home equity lines of credit consisting of loans secured by first or second mortgages on primarily owner occupied primary residences. The company also provides consumer installment loans for the purchase of cars, boats and other recreational vehicles, as well as for the purchase of major appliances and other home improvement projects; and commercial equipment leasing programs for manufacturing, construction, transportation, and healthcare industries. Further, it offers merchant services; deposit products, including checking, time, savings, money market, and certificates of deposit, as well as sweep accounts; letters of credit; and trust and wealth management services, such as financial and estate planning, trustee and custodial, investment management, tax, insurance, and business planning, corporate retirement plan consulting and administration, and retail brokerage services. The company was founded in 1881 and is headquartered in Effingham, Illinois.