Reviewing Summit State Bank (NASDAQ:SSBI) and First Northwest Bancorp (NASDAQ:FNWB)

Summit State Bank (NASDAQ:SSBI) and First Northwest Bancorp (NASDAQ:FNWB) are both small-cap finance companies, but which is the better business? We will contrast the two businesses based on the strength of their institutional ownership, risk, analyst recommendations, dividends, valuation, earnings and profitability.

Profitability

This table compares Summit State Bank and First Northwest Bancorp’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Summit State Bank	11.55%	N/A	N/A
First Northwest Bancorp	5.35%	4.23%	0.29%

Institutional & Insider Ownership

66.1% of First Northwest Bancorp shares are owned by institutional investors. 5.5% of First Northwest Bancorp shares are owned by company insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company is poised for long-term growth.

Earnings & Valuation

This table compares Summit State Bank and First Northwest Bancorp”s revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Summit State Bank	$58.82 million	1.48	$6.80 million	$1.01	12.67
First Northwest Bancorp	$118.64 million	0.73	-$4.19 million	$0.72	12.76

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

Risk and Volatility

Summit State Bank has a beta of 0.19, suggesting that its share price is 81% less volatile than the S&P 500. Comparatively, First Northwest Bancorp has a beta of 0.57, suggesting that its share price is 43% less volatile than the S&P 500.

Analyst Ratings

This is a summary of current ratings and price targets for Summit State Bank and First Northwest Bancorp, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Summit State Bank	1	0	0	0	1.00
First Northwest Bancorp	1	2	1	0	2.00

First Northwest Bancorp has a consensus target price of $13.50, suggesting a potential upside of 46.90%. Given First Northwest Bancorp’s stronger consensus rating and higher probable upside, analysts clearly believe First Northwest Bancorp is more favorable than Summit State Bank.

Summary

First Northwest Bancorp beats Summit State Bank on 10 of the 14 factors compared between the two stocks.

About Summit State Bank

Summit State Bank engages in providing an array of financial services to small and medium-sized businesses, their owners and employees, entrepreneurs, high net worth families, foundations, estates, and individual consumers. It specializes in business services, personal accounts, nonprofit programs, and mobile banking ranging from lending, checking, merchant, eBanking, automated teller machines, equity loans, and others. The company was founded on December 20, 1982 and is headquartered in Santa Rosa, CA.

About First Northwest Bancorp

First Northwest Bancorp operates as a bank holding company for First Fed Bank that provides commercial and consumer banking services to individuals, businesses, and nonprofit organizations in western Washington, the United States. The company accepts various deposit instruments, including checking, money market deposit, savings, and transaction accounts, as well as certificates of deposit. It also originates one- to four-family mortgage loans, commercial and multi-family real estate loans, construction and land loans, and commercial business loans, as well as consumer loans primarily consisting of automobile loans, and home-equity loans and lines of credit. First Northwest Bancorp operates branch offices in Clallam, Jefferson, King, Kitsap, and Whatcom Counties, Washington. First Northwest Bancorp was founded in 1923 and is based in Port Angeles, Washington.