Critical Analysis: Bay Commercial Bank (NASDAQ:BCML) & Avidbank (OTCMKTS:AVBH)

Avidbank (OTCMKTS:AVBH) and Bay Commercial Bank (NASDAQ:BCML) are both small-cap finance companies, but which is the superior stock? We will compare the two companies based on the strength of their earnings, dividends, profitability, analyst recommendations, valuation, risk and institutional ownership.

Valuation and Earnings

This table compares Avidbank and Bay Commercial Bank”s top-line revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Avidbank	$47.45 million	5.78	$21.01 million	($1.82)	-13.77
Bay Commercial Bank	$138.09 million	2.20	$23.61 million	$2.10	13.29

Bay Commercial Bank has higher revenue and earnings than Avidbank. Avidbank is trading at a lower price-to-earnings ratio than Bay Commercial Bank, indicating that it is currently the more affordable of the two stocks.

Profitability

This table compares Avidbank and Bay Commercial Bank’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Avidbank	14.31%	N/A	N/A
Bay Commercial Bank	16.51%	7.04%	0.89%

Volatility and Risk

Avidbank has a beta of 0.59, suggesting that its stock price is 41% less volatile than the S&P 500. Comparatively, Bay Commercial Bank has a beta of 0.55, suggesting that its stock price is 45% less volatile than the S&P 500.

Institutional & Insider Ownership

15.9% of Avidbank shares are held by institutional investors. Comparatively, 66.2% of Bay Commercial Bank shares are held by institutional investors. 6.5% of Bay Commercial Bank shares are held by insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a company is poised for long-term growth.

Analyst Recommendations

This is a summary of recent recommendations and price targets for Avidbank and Bay Commercial Bank, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Avidbank	0	0	1	0	3.00
Bay Commercial Bank	0	1	2	0	2.67

Avidbank currently has a consensus price target of $25.00, indicating a potential downside of 0.28%. Bay Commercial Bank has a consensus price target of $31.50, indicating a potential upside of 12.88%. Given Bay Commercial Bank’s higher possible upside, analysts clearly believe Bay Commercial Bank is more favorable than Avidbank.

Summary

Bay Commercial Bank beats Avidbank on 11 of the 14 factors compared between the two stocks.

About Avidbank

Avidbank Holdings, Inc. operates as a bank holding company for Avidbank that provides financial products and services to businesses and individuals in the Santa Clara, San Mateo, and San Francisco counties. The company offers business and personal deposit products, such as checking, money market, and savings accounts; and certificates of deposit. It also provides personal lending products, including secured and unsecured lines of credit, home equity lines of credit, remodel and new home construction loans, and term loans; corporate banking comprising working capital lines of credit, equipment loans, acquisition financing, shareholder buyouts, ESOP loans, and owner-occupied real estate loans; and commercial real estate lending, such as permanent loans and bridge financing products. In addition, the company offers construction lending products, including land acquisition loans, pre-development loans, construction spec SFD, owner-occupied SFD, condominiums, subdivision, unsecured business lines, real estate bridge loans, and RLOC real estate secured loans. Further, it provides various financing solutions, such as fund finance, structured finance, venture lending, asset-based lending, and sponsor finance. Additionally, the company offers various services, such as automated clearing house payments and collections, bill pay, positive pay, wire transfer, lockbox, merchant, remote deposit capture, risk and fraud analytics services, ATM/debit cards, credit cards, business courier, cash management, and complimentary notary services. Furthermore, it offers online and mobile banking services. The company was founded in 2003 and is headquartered in San Jose, California.

About Bay Commercial Bank

BayCom Corp operates as the bank holding company for United Business Bank that provides various financial services to small and mid-sized businesses, service professionals, and individuals. The company provides demand, savings, money market, and time deposit accounts. It offers commercial and multifamily real estate loans, including owner-occupied and investor real estate loans; commercial and industrial loans, such as equipment loans and working capital lines of credit; small business administration loans; construction and land loans; agriculture-related loans; and consumer loans comprising installment loans, unsecured and secured personal lines of credit, and overdraft protection. In addition, the company provides online and mobile banking, automated teller machine, remote deposit capture, night depository, courier, direct deposit, treasury management, wire transfer, automated clearing house, debit cards, cashier's and travelers checks, letters of credit, lockbox, positive pay, reverse positive pay, and account reconciliation services, as well as zero balance accounts and sweep accounts, including loan sweep. It operates through a network of full-service banking branches in Northern and Southern California; Las Vegas, Nevada; Denver, Colorado; Custer, Delta, and Grand counties, Colorado; and Seattle, Washington and Central New Mexico. The company was formerly known as Bay Commercial Bank and changed its name to BayCom Corp in January 2017. BayCom Corp was incorporated in 2004 and is headquartered in Walnut Creek, California.