Comparing Farmers & Merchants Bank of Long Beach (OTCMKTS:FMBL) and Bank of Marin Bancorp (NASDAQ:BMRC)

Bank of Marin Bancorp (NASDAQ:BMRC) and Farmers & Merchants Bank of Long Beach (OTCMKTS:FMBL) are both small-cap finance companies, but which is the superior investment? We will compare the two businesses based on the strength of their dividends, analyst recommendations, earnings, institutional ownership, valuation, profitability and risk.

Risk & Volatility

Bank of Marin Bancorp has a beta of 0.83, suggesting that its stock price is 17% less volatile than the S&P 500. Comparatively, Farmers & Merchants Bank of Long Beach has a beta of 0.25, suggesting that its stock price is 75% less volatile than the S&P 500.

Analyst Recommendations

This is a breakdown of current recommendations and price targets for Bank of Marin Bancorp and Farmers & Merchants Bank of Long Beach, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Bank of Marin Bancorp	1	2	3	0	2.33
Farmers & Merchants Bank of Long Beach	0	0	0	0	0.00

Bank of Marin Bancorp currently has a consensus target price of $28.40, indicating a potential upside of 9.78%. Given Bank of Marin Bancorp’s stronger consensus rating and higher probable upside, equities analysts clearly believe Bank of Marin Bancorp is more favorable than Farmers & Merchants Bank of Long Beach.

Dividends

Bank of Marin Bancorp pays an annual dividend of $1.00 per share and has a dividend yield of 3.9%. Farmers & Merchants Bank of Long Beach pays an annual dividend of $112.00 per share and has a dividend yield of 1.3%. Bank of Marin Bancorp pays out -49.5% of its earnings in the form of a dividend. Farmers & Merchants Bank of Long Beach pays out 20.0% 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.

Valuation & Earnings

This table compares Bank of Marin Bancorp and Farmers & Merchants Bank of Long Beach”s gross revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Bank of Marin Bancorp	$36.01 million	11.63	-$35.67 million	($2.02)	-12.81
Farmers & Merchants Bank of Long Beach	$449.19 million	2.25	$68.35 million	$559.38	15.06

Farmers & Merchants Bank of Long Beach has higher revenue and earnings than Bank of Marin Bancorp. Bank of Marin Bancorp is trading at a lower price-to-earnings ratio than Farmers & Merchants Bank of Long Beach, indicating that it is currently the more affordable of the two stocks.

Profitability

This table compares Bank of Marin Bancorp and Farmers & Merchants Bank of Long Beach’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Bank of Marin Bancorp	-18.58%	7.07%	0.78%
Farmers & Merchants Bank of Long Beach	16.08%	5.22%	0.63%

Insider and Institutional Ownership

52.3% of Bank of Marin Bancorp shares are held by institutional investors. Comparatively, 7.6% of Farmers & Merchants Bank of Long Beach shares are held by institutional investors. 5.1% of Bank of Marin Bancorp shares are held by company insiders. Comparatively, 12.8% of Farmers & Merchants Bank of Long Beach shares are held by company insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a company will outperform the market over the long term.

Summary

Bank of Marin Bancorp beats Farmers & Merchants Bank of Long Beach on 10 of the 16 factors compared between the two stocks.

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.

About Farmers & Merchants Bank of Long Beach

Farmers & Merchants Bank of Long Beach provides various banking products and services to individuals, professionals, and small to medium-sized businesses in Los Angeles, Orange, and Santa Barbara Counties. It offers checking, savings, Christmas club savings, health savings, market rate savings, and money market accounts; demand and time deposits; certificates of deposit; and individual retirement account. The company also provides personal, home, commercial real estate, real estate and construction, and commercial business loans, as well as lines of credit; financing for residential loans comprising single-family and multifamily loans; and credit and debit cards. In addition, it offers account management, receivables and payables, and risk management services; commercial lending services; and faith-based and healthcare banking services, as well as online and mobile banking services. Farmers & Merchants Bank of Long Beach was founded in 1907 and is headquartered in Long Beach, California.