Contrasting First Northwest Bancorp (NASDAQ:FNWB) & Bay Commercial Bank (NASDAQ:BCML)

Bay Commercial Bank (NASDAQ:BCML) and First Northwest Bancorp (NASDAQ:FNWB) are both small-cap finance companies, but which is the superior business? We will contrast the two companies based on the strength of their valuation, risk, analyst recommendations, earnings, dividends, profitability and institutional ownership.

Analyst Recommendations

This is a breakdown of recent ratings for Bay Commercial Bank and First Northwest Bancorp, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Bay Commercial Bank	0	1	2	0	2.67
First Northwest Bancorp	2	1	2	0	2.00

Bay Commercial Bank currently has a consensus price target of $31.50, indicating a potential upside of 6.64%. First Northwest Bancorp has a consensus price target of $13.50, indicating a potential upside of 38.75%. Given First Northwest Bancorp’s higher possible upside, analysts clearly believe First Northwest Bancorp is more favorable than Bay Commercial Bank.

Profitability

This table compares Bay Commercial Bank and First Northwest Bancorp’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%
First Northwest Bancorp	2.67%	2.10%	0.15%

Insider & Institutional Ownership

66.2% of Bay Commercial Bank shares are owned by institutional investors. Comparatively, 66.1% of First Northwest Bancorp shares are owned by institutional investors. 6.5% of Bay Commercial Bank shares are owned by company insiders. Comparatively, 5.5% of First Northwest Bancorp shares are owned by company insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company is poised for long-term growth.

Valuation and Earnings

This table compares Bay Commercial Bank and First Northwest Bancorp”s gross revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Bay Commercial Bank	$138.09 million	2.33	$23.61 million	$2.10	14.07
First Northwest Bancorp	$124.95 million	0.74	-$6.61 million	$0.36	27.03

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

Risk and Volatility

Bay Commercial Bank has a beta of 0.55, meaning that its stock price is 45% less volatile than the S&P 500. Comparatively, First Northwest Bancorp has a beta of 0.79, meaning that its stock price is 21% less volatile than the S&P 500.

Summary

Bay Commercial Bank beats First Northwest Bancorp on 10 of the 13 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 First Northwest Bancorp

First Northwest Bancorp operates as a bank holding company for First Fed Bank that provides commercial and consumer banking services to individuals, businesses, and nonprofit organizations in western Washington, the United States. The company accepts various deposit instruments, including checking, money market deposit, savings, and transaction accounts, as well as certificates of deposit. It also originates one- to four-family mortgage loans, commercial and multi-family real estate loans, construction and land loans, and commercial business loans, as well as consumer loans primarily consisting of automobile loans, and home-equity loans and lines of credit. First Northwest Bancorp operates branch offices in Clallam, Jefferson, King, Kitsap, and Whatcom Counties, Washington. First Northwest Bancorp was founded in 1923 and is based in Port Angeles, Washington.