Northrim BanCorp (NASDAQ:NRIM) versus Farmers & Merchants Bank of Long Beach (OTCMKTS:FMBL) Head to Head Contrast

Northrim BanCorp (NASDAQ:NRIM) and Farmers & Merchants Bank of Long Beach (OTCMKTS:FMBL) are both small-cap finance companies, but which is the superior investment? We will contrast the two companies based on the strength of their profitability, dividends, institutional ownership, earnings, analyst recommendations, valuation and risk.

Insider and Institutional Ownership

66.0% of Northrim BanCorp shares are held by institutional investors. Comparatively, 7.6% of Farmers & Merchants Bank of Long Beach shares are held by institutional investors. 3.9% of Northrim BanCorp shares are held by insiders. Comparatively, 12.8% of Farmers & Merchants Bank of Long Beach shares are held by insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company is poised for long-term growth.

Dividends

Northrim BanCorp pays an annual dividend of $0.64 per share and has a dividend yield of 2.6%. Farmers & Merchants Bank of Long Beach pays an annual dividend of $112.00 per share and has a dividend yield of 1.3%. Northrim BanCorp pays out 22.3% of its earnings in the form of a dividend. Farmers & Merchants Bank of Long Beach pays out 20.8% 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. Northrim BanCorp has raised its dividend for 16 consecutive years. Northrim BanCorp is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Profitability

This table compares Northrim BanCorp and Farmers & Merchants Bank of Long Beach’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Northrim BanCorp	25.17%	17.66%	1.65%
Farmers & Merchants Bank of Long Beach	15.22%	4.89%	0.59%

Earnings & Valuation

This table compares Northrim BanCorp and Farmers & Merchants Bank of Long Beach”s gross revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Northrim BanCorp	$255.58 million	2.18	$64.61 million	$2.87	8.73
Farmers & Merchants Bank of Long Beach	$449.19 million	2.23	$68.35 million	$538.20	15.51

Farmers & Merchants Bank of Long Beach has higher revenue and earnings than Northrim BanCorp. Northrim BanCorp is trading at a lower price-to-earnings ratio than Farmers & Merchants Bank of Long Beach, indicating that it is currently the more affordable of the two stocks.

Volatility and Risk

Northrim BanCorp has a beta of 0.91, meaning that its share price is 9% less volatile than the S&P 500. Comparatively, Farmers & Merchants Bank of Long Beach has a beta of 0.28, meaning that its share price is 72% less volatile than the S&P 500.

Analyst Recommendations

This is a breakdown of current ratings and price targets for Northrim BanCorp and Farmers & Merchants Bank of Long Beach, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Northrim BanCorp	0	1	2	0	2.67
Farmers & Merchants Bank of Long Beach	0	0	0	0	0.00

Northrim BanCorp currently has a consensus price target of $33.00, suggesting a potential upside of 31.74%. Given Northrim BanCorp’s stronger consensus rating and higher possible upside, research analysts plainly believe Northrim BanCorp is more favorable than Farmers & Merchants Bank of Long Beach.

Summary

Northrim BanCorp beats Farmers & Merchants Bank of Long Beach on 10 of the 17 factors compared between the two stocks.

About Northrim BanCorp

Northrim BanCorp, Inc. operates as the bank holding company for Northrim Bank that provides commercial banking products and services to businesses and professional individuals. It operates through two segments, Community Banking and Home Mortgage Lending. The company offers noninterest-bearing checking accounts and interest-bearing time deposits, checking and savings accounts, individual retirement and money market deposit accounts, certificates of deposit, and business sweep accounts. It also provides short and medium-term commercial loans, commercial credit lines, construction and real estate loans, and consumer loans, as well as short-term working capital. In addition, the company offers other services comprising consumer and business online banking, mobile app, and mobile deposits; and debit and credit cards. Further, it provides mobile web and app banking, consumer online account opening, personal finance, online documents, consumer debit cards, business debit cards, my rewards for consumer debit cards, retail lockbox, card control, corporate purchase cards, integrated payables, home equity advantage access cards, telebanking, and automated teller services. Additionally, the company offers personalized checks at account opening, overdraft protection from a savings account, commercial drive-up banking, automatic transfer and payment, People Pay, external transfer, Bill Pay, wire transfer, direct payroll deposit, electronic tax payment, Automated Clearing House origination and receipt, remote deposit capture, account reconciliation and positive pay, merchant, cash management, annuity, and long-term investment portfolio products and services. It also provides investment advisory, trust, wealth management, factoring, and mortgage services. The company was founded in 1990 and is headquartered in Anchorage, Alaska.

About Farmers & Merchants Bank of Long Beach

Farmers & Merchants Bank of Long Beach provides various banking products and services to individuals, professionals, and small to medium-sized businesses in Los Angeles, Orange, and Santa Barbara Counties. It offers checking, savings, Christmas club savings, health savings, market rate savings, and money market accounts; demand and time deposits; certificates of deposit; and individual retirement account. The company also provides personal, home, commercial real estate, real estate and construction, and commercial business loans, as well as lines of credit; financing for residential loans comprising single-family and multifamily loans; and credit and debit cards. In addition, it offers account management, receivables and payables, and risk management services; commercial lending services; and faith-based and healthcare banking services, as well as online and mobile banking services. Farmers & Merchants Bank of Long Beach was founded in 1907 and is headquartered in Long Beach, California.