Critical Comparison: Bank of Marin Bancorp (NASDAQ:BMRC) versus City Bank (OTCMKTS:CTBK)

City Bank (OTCMKTS:CTBK) and Bank of Marin Bancorp (NASDAQ:BMRC) are both finance companies, but which is the superior investment? We will compare the two companies based on the strength of their profitability, dividends, risk, institutional ownership, valuation, analyst recommendations and earnings.

Insider & Institutional Ownership

52.3% of Bank of Marin Bancorp shares are owned by institutional investors. 37.5% of City Bank shares are owned by insiders. Comparatively, 5.7% of Bank of Marin Bancorp shares are owned by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company is poised for long-term growth.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
City Bank	N/A	N/A	N/A
Bank of Marin Bancorp	-18.58%	7.20%	0.78%

Valuation and Earnings

This table compares City Bank and Bank of Marin Bancorp”s top-line revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
City Bank	N/A	N/A	N/A	N/A	N/A
Bank of Marin Bancorp	$163.98 million	2.53	-$35.67 million	($2.02)	-12.67

City Bank has higher earnings, but lower revenue than Bank of Marin Bancorp.

Analyst Ratings

This is a breakdown of recent recommendations and price targets for City Bank and Bank of Marin Bancorp, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
City Bank	0	0	0	0	0.00
Bank of Marin Bancorp	2	2	2	0	2.00

Bank of Marin Bancorp has a consensus target price of $28.40, indicating a potential upside of 10.98%. Given Bank of Marin Bancorp’s stronger consensus rating and higher probable upside, analysts clearly believe Bank of Marin Bancorp is more favorable than City Bank.

Volatility & Risk

City Bank has a beta of -0.22, indicating that its share price is 122% less volatile than the S&P 500. Comparatively, Bank of Marin Bancorp has a beta of 0.82, indicating that its share price is 18% less volatile than the S&P 500.

Summary

Bank of Marin Bancorp beats City Bank on 8 of the 10 factors compared between the two stocks.

About City Bank

As of April 17, 2010, City Bank was acquired by Whidbey Island Bank. City Bank offers commercial banking services. The company was incorporated in 1974 and is headquartered in Lynnwood, Washington.

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.