Reviewing Hanmi Financial (NASDAQ:HAFC) and First Northern Community Bancorp (OTCMKTS:FNRN)

Hanmi Financial (NASDAQ:HAFC) and First Northern Community Bancorp (OTCMKTS:FNRN) are both small-cap finance companies, but which is the superior stock? We will contrast the two companies based on the strength of their valuation, dividends, earnings, analyst recommendations, profitability, institutional ownership and risk.

Profitability

This table compares Hanmi Financial and First Northern Community Bancorp’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Hanmi Financial	16.53%	9.59%	0.93%
First Northern Community Bancorp	23.58%	11.03%	1.08%

Volatility and Risk

Hanmi Financial has a beta of 0.75, indicating that its stock price is 25% less volatile than the S&P 500. Comparatively, First Northern Community Bancorp has a beta of 0.23, indicating that its stock price is 77% less volatile than the S&P 500.

Analyst Ratings

This is a summary of recent ratings and price targets for Hanmi Financial and First Northern Community Bancorp, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Hanmi Financial	0	2	2	1	2.80
First Northern Community Bancorp	0	0	0	0	0.00

Hanmi Financial presently has a consensus target price of $28.50, suggesting a potential upside of 3.13%. Given Hanmi Financial’s stronger consensus rating and higher probable upside, research analysts clearly believe Hanmi Financial is more favorable than First Northern Community Bancorp.

Valuation and Earnings

This table compares Hanmi Financial and First Northern Community Bancorp”s revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Hanmi Financial	$259.79 million	3.19	$62.20 million	$2.39	11.56
First Northern Community Bancorp	$84.67 million	2.48	$20.03 million	$1.31	10.22

Hanmi Financial has higher revenue and earnings than First Northern Community Bancorp. First Northern Community Bancorp is trading at a lower price-to-earnings ratio than Hanmi Financial, indicating that it is currently the more affordable of the two stocks.

Institutional & Insider Ownership

88.7% of Hanmi Financial shares are held by institutional investors. Comparatively, 17.9% of First Northern Community Bancorp shares are held by institutional investors. 1.9% of Hanmi Financial shares are held by company insiders. Comparatively, 11.8% of First Northern Community Bancorp shares are held by company insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock will outperform the market over the long term.

Summary

Hanmi Financial beats First Northern Community Bancorp on 11 of the 15 factors compared between the two stocks.

About Hanmi Financial

Hanmi Financial Corporation operates as the holding company for Hanmi Bank that provides business banking products and services in the United States. It offers various deposit products, including noninterest-bearing checking accounts, savings accounts, negotiable order of withdrawal accounts, money market accounts, and certificates of deposit. The company also provides real estate loans, such as commercial property, construction, and residential property loans; and commercial and industrial loans, such as commercial term loans and commercial lines of credit; and international finance and trade services and products, such as letters of credit, and import and export financing. In addition, it offers small business administration loans for business purposes, which comprise owner-occupied commercial real estate, business acquisitions, start-ups, franchise financing, working capital, improvements and renovations, inventory and equipment, and debt-refinancing, as well as equipment lease financing. The company was founded in 1982 and is headquartered in Los Angeles, California.

About First Northern Community Bancorp

First Northern Community Bancorp operates as the bank holding company for First Northern Bank of Dixon that provides commercial banking products and services to individuals, and small and medium sized businesses. The company accepts demand deposits, interest-bearing transaction deposits, savings and money market deposit accounts, and time deposits. It also offers commercial, commercial real estate, agriculture, residential mortgage, residential construction, and consumer loans. In addition, the company provides debit and credit cards; investment and brokerage services; alternative investment products, and fiduciary and other financial services; and equipment leasing, merchant card processing, payroll, and international banking services through third parties. Further, it offers cashier's checks, safe deposit boxes, and other customary banking services. The company operates branches located in the cities of Auburn, Colusa, Davis, Dixon, Fairfield, Orland, Rancho Cordova, Roseville, Sacramento, Vacaville, West Sacramento, Winters, Willows, and Woodland; satellite banking office inside a retirement community in the city of Davis; residential mortgage loan office in Davis; and commercial loan office in the Contra Costa County city of Walnut Creek. First Northern Community Bancorp was founded in 1910 and is headquartered in Dixon, California.