Comparing First Northern Community Bancorp (NASDAQ:FNRN) and Unity Bancorp (NASDAQ:UNTY)

First Northern Community Bancorp (NASDAQ:FNRN) and Unity Bancorp (NASDAQ:UNTY) are both small-cap finance companies, but which is the better business? We will compare the two companies based on the strength of their dividends, institutional ownership, profitability, analyst recommendations, earnings, valuation and risk.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
First Northern Community Bancorp	24.97%	10.68%	1.18%
Unity Bancorp	30.26%	16.10%	1.88%

Earnings and Valuation

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

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
First Northern Community Bancorp	$88.40 million	3.19	$21.13 million	$1.35	12.76
Unity Bancorp	$188.41 million	3.14	$57.95 million	$5.75	10.26

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

Institutional & Insider Ownership

17.9% of First Northern Community Bancorp shares are held by institutional investors. Comparatively, 42.3% of Unity Bancorp shares are held by institutional investors. 11.9% of First Northern Community Bancorp shares are held by company insiders. Comparatively, 28.9% of Unity Bancorp shares are held by company insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a stock is poised for long-term growth.

Analyst Ratings

This is a summary of recent ratings for First Northern Community Bancorp and Unity Bancorp, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
First Northern Community Bancorp	0	0	1	0	3.00
Unity Bancorp	0	0	5	1	3.17

Unity Bancorp has a consensus price target of $65.50, indicating a potential upside of 11.07%. Given Unity Bancorp’s stronger consensus rating and higher probable upside, analysts clearly believe Unity Bancorp is more favorable than First Northern Community Bancorp.

Summary

Unity Bancorp beats First Northern Community Bancorp on 12 of the 14 factors compared between the two stocks.

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 to medium sized businesses. The company accepts demand deposits, interest-bearing transaction deposits, savings and money market accounts, and time deposits. Its loan portfolio comprises of commercial, commercial real estate, agriculture, residential mortgage, residential construction, and consumer loans. The company also offers 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. In addition, it provides issues cashier’s checks, safe deposit boxes rental, and other customary banking services. The company operates eleven full-service branches located in the cities of Auburn, Davis, Dixon, Fairfield, Rancho Cordova, Roseville, Sacramento, Vacaville, West Sacramento, Winters, and Woodland; a satellite banking office inside a retirement community in the city of Davis; a residential mortgage loan office in Davis; and a 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.

About Unity Bancorp

Unity Bancorp, Inc. operates as a bank holding company for Unity Bank that provides range of commercial and retail banking services to individuals, small and medium sized businesses, and professional communities. It offers personal and business checking accounts, time deposits, money market accounts, savings accounts, and retirement accounts, as well as noninterest and interest-bearing demand deposits. The company also provides small business administration loans; commercial loans; and residential mortgage and consumer loans, including residential real estate, home equity lines and loans, and residential construction lines, as well as personal loans. In addition, it offers credit and debit cards, wire transfer, safe deposit box, automated teller, and internet and mobile banking services; and automated clearing house origination and remote deposit capture services. Unity Bancorp, Inc. was incorporated in 1991 and is headquartered in Clinton, New Jersey.