Critical Comparison: Bank of Marin Bancorp (NASDAQ:BMRC) versus Avidbank (OTCMKTS:AVBH)

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

Valuation and Earnings

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

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Avidbank	$47.45 million	6.16	$21.01 million	($1.82)	-14.67
Bank of Marin Bancorp	$93.05 million	4.68	-$8.41 million	$0.62	43.61

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

Analyst Ratings

This is a breakdown of recent recommendations and price targets for Avidbank and Bank of Marin Bancorp, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Avidbank	0	0	1	0	3.00
Bank of Marin Bancorp	0	2	3	1	2.83

Avidbank presently has a consensus target price of $25.00, indicating a potential downside of 6.37%. Bank of Marin Bancorp has a consensus target price of $28.40, indicating a potential upside of 5.03%. Given Bank of Marin Bancorp’s higher possible upside, analysts clearly believe Bank of Marin Bancorp is more favorable than Avidbank.

Risk & Volatility

Avidbank has a beta of 0.36, suggesting that its share price is 64% less volatile than the S&P 500. Comparatively, Bank of Marin Bancorp has a beta of 0.85, suggesting that its share price is 15% less volatile than the S&P 500.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
Avidbank	14.31%	N/A	N/A
Bank of Marin Bancorp	6.22%	5.25%	0.61%

Institutional and Insider Ownership

15.9% of Avidbank shares are owned by institutional investors. Comparatively, 52.3% of Bank of Marin Bancorp shares are owned by institutional investors. 5.1% of Bank of Marin Bancorp shares are owned by insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a stock will outperform the market over the long term.

Summary

Bank of Marin Bancorp beats Avidbank on 11 of the 15 factors compared between the two stocks.

About Avidbank

Avidbank Holdings, Inc. operates as a bank holding company for Avidbank that provides financial products and services to businesses and individuals in the Santa Clara, San Mateo, and San Francisco counties. The company offers business and personal deposit products, such as checking, money market, and savings accounts; and certificates of deposit. It also provides personal lending products, including secured and unsecured lines of credit, home equity lines of credit, remodel and new home construction loans, and term loans; corporate banking comprising working capital lines of credit, equipment loans, acquisition financing, shareholder buyouts, ESOP loans, and owner-occupied real estate loans; and commercial real estate lending, such as permanent loans and bridge financing products. In addition, the company offers construction lending products, including land acquisition loans, pre-development loans, construction spec SFD, owner-occupied SFD, condominiums, subdivision, unsecured business lines, real estate bridge loans, and RLOC real estate secured loans. Further, it provides various financing solutions, such as fund finance, structured finance, venture lending, asset-based lending, and sponsor finance. Additionally, the company offers various services, such as automated clearing house payments and collections, bill pay, positive pay, wire transfer, lockbox, merchant, remote deposit capture, risk and fraud analytics services, ATM/debit cards, credit cards, business courier, cash management, and complimentary notary services. Furthermore, it offers online and mobile banking services. The company was founded in 2003 and is headquartered in San Jose, California.

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.