Analyzing First Foundation (NYSE:FFWM) & California BanCorp (NASDAQ:BCAL)

California BanCorp (NASDAQ:BCAL) and First Foundation (NYSE:FFWM) are both small-cap finance companies, but which is the better business? We will contrast the two companies based on the strength of their institutional ownership, earnings, analyst recommendations, risk, profitability, dividends and valuation.

Analyst Recommendations

This is a breakdown of recent ratings for California BanCorp and First Foundation, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
California BanCorp	1	0	3	1	2.80
First Foundation	1	2	2	1	2.50

California BanCorp presently has a consensus target price of $20.50, indicating a potential upside of 16.81%. First Foundation has a consensus target price of $6.58, indicating a potential upside of 10.37%. Given California BanCorp’s stronger consensus rating and higher possible upside, analysts clearly believe California BanCorp is more favorable than First Foundation.

Earnings & Valuation

This table compares California BanCorp and First Foundation”s top-line revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
California BanCorp	$180.18 million	3.15	$63.06 million	$1.93	9.09
First Foundation	$588.36 million	0.84	-$155.16 million	($1.89)	-3.16

California BanCorp has higher earnings, but lower revenue than First Foundation. First Foundation is trading at a lower price-to-earnings ratio than California BanCorp, indicating that it is currently the more affordable of the two stocks.

Volatility and Risk

California BanCorp has a beta of 1.17, meaning that its share price is 17% more volatile than the S&P 500. Comparatively, First Foundation has a beta of 0.92, meaning that its share price is 8% less volatile than the S&P 500.

Insider & Institutional Ownership

55.4% of California BanCorp shares are owned by institutional investors. Comparatively, 73.1% of First Foundation shares are owned by institutional investors. 14.8% of California BanCorp shares are owned by company insiders. Comparatively, 9.5% of First Foundation shares are owned by company insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a stock will outperform the market over the long term.

Profitability

This table compares California BanCorp and First Foundation’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
California BanCorp	26.60%	11.36%	1.57%
First Foundation	-26.37%	1.09%	0.08%

Summary

California BanCorp beats First Foundation on 12 of the 14 factors compared between the two stocks.

About California BanCorp

Southern California Bancorp operates as the holding company for Bank of Southern California, N.A. that provides various financial products to individuals, professionals, and small-to medium-sized businesses. The company offers checking, personal and business savings, and money market accounts, as well as certificates of deposit. It also provides home equity lines of credit, business loans and lines of credit, commercial real estate and construction loans, small business administration loans, letters of credit, and personal and business credit cards. In addition, the company provides cash vault, sweep accounts, and remote deposit capture services; online and mobile banking services; courier service; lockbox services; and merchant services. It operates branches in San Diego, Orange, Ventura, Los Angeles, and Riverside counties, as well as the Inland Empire. The company was founded in 2001 and is headquartered in San Diego, California.

About First Foundation

First Foundation Inc., through its subsidiaries, provides personal banking, business banking, and private wealth management services in the United States. It operates through two segments, Banking and Wealth Management. The company offers a range of bank deposit products, including personal and business checking accounts, savings accounts, interest-bearing negotiable order of withdrawal accounts, money market accounts, and time certificate of deposits; and loan products consisting of multifamily and single family residential real estate loans, commercial real estate loans, and commercial term loans and line of credits, as well as consumer loans, such as personal installment loans and line of credits, and home equity line of credits. It also provides various specialized services comprising trust services, internet and mobile banking, remote deposit capture services, merchant credit card services, ATM cards, Visa debit cards, and business sweep accounts, as well as insurance brokerage services and equipment financing solutions. In addition, the company offers investment management and financial planning services; treasury management services; advisory and coordination services in the areas of estate planning, retirement planning, and charitable and business ownership issues; and financial, investment, and economic advisory and related services. Further, it provides support services, including the processing and transmission of financial and economic data for charitable organizations. The company operates through a network of 28 branch offices and 3 loan production offices in California, Nevada, Texas, and Hawaii. First Foundation Inc. was founded in 1985 and is headquartered in Dallas, Texas.