Analyzing Bank of Marin Bancorp (NASDAQ:BMRC) and AmeriServ Financial (NASDAQ:ASRV)

AmeriServ Financial (NASDAQ:ASRV) and Bank of Marin Bancorp (NASDAQ:BMRC) are both small-cap finance companies, but which is the superior investment? We will contrast the two businesses based on the strength of their valuation, dividends, risk, institutional ownership, analyst recommendations, earnings and profitability.

Analyst Recommendations

This is a summary of recent recommendations and price targets for AmeriServ Financial and Bank of Marin Bancorp, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
AmeriServ Financial	0	0	1	0	3.00
Bank of Marin Bancorp	0	5	2	0	2.29

Bank of Marin Bancorp has a consensus price target of $31.50, indicating a potential upside of 14.67%. Given Bank of Marin Bancorp’s higher probable upside, analysts clearly believe Bank of Marin Bancorp is more favorable than AmeriServ Financial.

Volatility & Risk

AmeriServ Financial has a beta of 0.44, meaning that its share price is 56% less volatile than the S&P 500. Comparatively, Bank of Marin Bancorp has a beta of 0.78, meaning that its share price is 22% less volatile than the S&P 500.

Profitability

This table compares AmeriServ Financial and Bank of Marin Bancorp’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
AmeriServ Financial	9.51%	7.13%	0.58%
Bank of Marin Bancorp	-7.98%	8.51%	0.89%

Dividends

AmeriServ Financial pays an annual dividend of $0.12 per share and has a dividend yield of 2.6%. Bank of Marin Bancorp pays an annual dividend of $1.00 per share and has a dividend yield of 3.6%. AmeriServ Financial pays out 23.5% of its earnings in the form of a dividend. Bank of Marin Bancorp pays out -109.9% 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. Bank of Marin Bancorp is clearly the better dividend stock, given its higher yield and lower payout ratio.

Earnings and Valuation

This table compares AmeriServ Financial and Bank of Marin Bancorp”s revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
AmeriServ Financial	$88.34 million	0.88	$5.61 million	$0.51	9.02
Bank of Marin Bancorp	$163.98 million	2.71	-$35.67 million	($0.91)	-30.19

AmeriServ Financial has higher earnings, but lower revenue than Bank of Marin Bancorp. Bank of Marin Bancorp is trading at a lower price-to-earnings ratio than AmeriServ Financial, indicating that it is currently the more affordable of the two stocks.

Institutional and Insider Ownership

31.5% of AmeriServ Financial shares are held by institutional investors. Comparatively, 52.3% of Bank of Marin Bancorp shares are held by institutional investors. 7.9% of AmeriServ Financial shares are held by insiders. Comparatively, 4.9% of Bank of Marin Bancorp shares are held by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company will outperform the market over the long term.

Summary

Bank of Marin Bancorp beats AmeriServ Financial on 10 of the 16 factors compared between the two stocks.

About AmeriServ Financial

AmeriServ Financial, Inc. is a holding company, which engages in the provision of consumer, mortgage and commercial financial products and services through its subsidiary. It operates through the following segments: Community Banking, Wealth Management, and Investment or Parent. The Community Banking segment includes both retail and commercial banking activities. The Wealth Management segment involves in the operations of a Trust Company, West Chester Capital Advisors an investment advisory firm, and Financial Services. The Investment or Parent segment offers investment securities, borrowing activities, and general corporate expenses. The company was founded in January 1983 and is headquartered in Johnstown, PA.

About Bank of Marin Bancorp

Bank of Marin Bancorp operates as the holding company for Bank of Marin that provides a range of financial services primarily to small to medium-sized businesses, not-for-profit organizations, and commercial real estate investors in the United States. The company offers personal and business checking and savings accounts; and individual retirement, health savings, and demand deposit marketplace accounts, as well as time certificates of deposit, certificate of deposit account registry, and insured cash sweep services. It also provides commercial real estate, commercial and industrial, and consumer loans, as well as construction financing and home equity lines of credit. In addition, the company offers merchant and payroll services; commercial equipment leasing program; payment solutions; treasury management services; credit cards; and mobile deposit, remote deposit capture, automated clearing house, wire transfer, and image lockbox services. Further, it provides wealth management and trust services comprising customized investment portfolio management, financial planning, trust administration, estate settlement, and custody services, as well as 401(k) plan services; and automated teller machines, and telephone and digital banking services. The company was incorporated in 1989 and is headquartered in Novato, California.