Columbia Banking System (NASDAQ:COLB) vs. Bay Commercial Bank (NASDAQ:BCML) Critical Survey

Bay Commercial Bank (NASDAQ:BCML) and Columbia Banking System (NASDAQ:COLB) are both finance companies, but which is the better investment? We will contrast the two businesses based on the strength of their dividends, earnings, risk, institutional ownership, profitability, analyst recommendations and valuation.

Insider and Institutional Ownership

66.2% of Bay Commercial Bank shares are owned by institutional investors. Comparatively, 92.5% of Columbia Banking System shares are owned by institutional investors. 6.5% of Bay Commercial Bank shares are owned by company insiders. Comparatively, 0.7% of Columbia Banking System shares are owned by company insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a company is poised for long-term growth.

Profitability

This table compares Bay Commercial Bank and Columbia Banking System’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Bay Commercial Bank	16.51%	7.04%	0.89%
Columbia Banking System	17.98%	11.31%	1.15%

Earnings & Valuation

This table compares Bay Commercial Bank and Columbia Banking System”s top-line revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Bay Commercial Bank	$138.09 million	2.31	$23.61 million	$2.10	13.91
Columbia Banking System	$2.07 billion	4.01	$533.67 million	$2.22	12.52

Columbia Banking System has higher revenue and earnings than Bay Commercial Bank. Columbia Banking System is trading at a lower price-to-earnings ratio than Bay Commercial Bank, indicating that it is currently the more affordable of the two stocks.

Dividends

Bay Commercial Bank pays an annual dividend of $1.00 per share and has a dividend yield of 3.4%. Columbia Banking System pays an annual dividend of $1.48 per share and has a dividend yield of 5.3%. Bay Commercial Bank pays out 47.6% of its earnings in the form of a dividend. Columbia Banking System pays out 66.7% 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. Bay Commercial Bank has raised its dividend for 3 consecutive years and Columbia Banking System has raised its dividend for 4 consecutive years. Columbia Banking System is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Risk & Volatility

Bay Commercial Bank has a beta of 0.55, indicating that its share price is 45% less volatile than the S&P 500. Comparatively, Columbia Banking System has a beta of 0.67, indicating that its share price is 33% less volatile than the S&P 500.

Analyst Ratings

This is a summary of current ratings and price targets for Bay Commercial Bank and Columbia Banking System, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Bay Commercial Bank	0	1	2	0	2.67
Columbia Banking System	0	12	3	1	2.31

Bay Commercial Bank presently has a consensus target price of $31.50, suggesting a potential upside of 7.80%. Columbia Banking System has a consensus target price of $29.38, suggesting a potential upside of 5.74%. Given Bay Commercial Bank’s stronger consensus rating and higher possible upside, analysts plainly believe Bay Commercial Bank is more favorable than Columbia Banking System.

Summary

Columbia Banking System beats Bay Commercial Bank on 13 of the 18 factors compared between the two stocks.

About Bay Commercial Bank

BayCom Corp operates as the bank holding company for United Business Bank that provides various financial services to small and mid-sized businesses, service professionals, and individuals. The company provides demand, savings, money market, and time deposit accounts. It offers commercial and multifamily real estate loans, including owner-occupied and investor real estate loans; commercial and industrial loans, such as equipment loans and working capital lines of credit; small business administration loans; construction and land loans; agriculture-related loans; and consumer loans comprising installment loans, unsecured and secured personal lines of credit, and overdraft protection. In addition, the company provides online and mobile banking, automated teller machine, remote deposit capture, night depository, courier, direct deposit, treasury management, wire transfer, automated clearing house, debit cards, cashier's and travelers checks, letters of credit, lockbox, positive pay, reverse positive pay, and account reconciliation services, as well as zero balance accounts and sweep accounts, including loan sweep. It operates through a network of full-service banking branches in Northern and Southern California; Las Vegas, Nevada; Denver, Colorado; Custer, Delta, and Grand counties, Colorado; and Seattle, Washington and Central New Mexico. The company was formerly known as Bay Commercial Bank and changed its name to BayCom Corp in January 2017. BayCom Corp was incorporated in 2004 and is headquartered in Walnut Creek, California.

About Columbia Banking System

Columbia Banking System, Inc. operates as the holding company of Umpqua Bank that provides banking, private banking, mortgage, and other financial services in the United States. The company offers deposit products, including business, non-interest bearing checking, interest-bearing checking and savings, money market, and certificate of deposit accounts; and insured cash sweep and other investment sweep solutions. It also provides commercial lending products, such as commercial lines of credit and term loans, accounts receivable and inventory financing, international trade finance, commercial property loans, multifamily loans, equipment loans, commercial equipment leases, real estate construction loans and permanent financing, and small business administration program financing, as well as capital markets. In addition, the company offers wealth management comprising financial planning, investment, trust, and insurance; treasury management, which includes digital and mobile banking solutions, ACH, wires, positive pay, remote deposit capture, integrated payments, integrated receivables, lockbox, cash vault, real-time payments, commercial card, and foreign exchange and international banking related products, as well as merchant services; and brokerage services, residential real estate loans and consumer loans. It serves its products to corporate, institutional, small business, and individual customers. The company was founded in 1953 and is headquartered in Tacoma, Washington.