Critical Comparison: Bank of Marin Bancorp (NASDAQ:BMRC) versus Bay Commercial Bank (NASDAQ:BCML)

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

Analyst Recommendations

This is a summary of recent ratings for Bay Commercial Bank and Bank of Marin Bancorp, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Bay Commercial Bank	0	1	2	0	2.67
Bank of Marin Bancorp	0	2	3	1	2.83

Bay Commercial Bank presently has a consensus target price of $31.50, suggesting a potential upside of 15.26%. Bank of Marin Bancorp has a consensus target price of $28.40, suggesting a potential upside of 13.55%. Given Bay Commercial Bank’s higher probable upside, research analysts plainly believe Bay Commercial Bank is more favorable than Bank of Marin Bancorp.

Dividends

Bay Commercial Bank pays an annual dividend of $1.00 per share and has a dividend yield of 3.7%. Bank of Marin Bancorp pays an annual dividend of $1.00 per share and has a dividend yield of 4.0%. Bay Commercial Bank pays out 47.6% of its earnings in the form of a dividend. Bank of Marin Bancorp pays out 161.3% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Bay Commercial Bank has increased its dividend for 3 consecutive years.

Institutional & Insider Ownership

66.2% of Bay Commercial Bank shares are owned by institutional investors. Comparatively, 52.3% of Bank of Marin Bancorp shares are owned by institutional investors. 7.2% of Bay Commercial 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, hedge funds and large money managers believe a stock will outperform the market over the long term.

Volatility and Risk

Bay Commercial Bank has a beta of 0.55, meaning that its stock price is 45% less volatile than the S&P 500. Comparatively, Bank of Marin Bancorp has a beta of 0.92, meaning that its stock price is 8% less volatile than the S&P 500.

Valuation and Earnings

This table compares Bay Commercial Bank and Bank of Marin Bancorp”s revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Bay Commercial Bank	$138.09 million	2.16	$23.61 million	$2.10	13.01
Bank of Marin Bancorp	$93.05 million	4.33	-$8.41 million	$0.62	40.34

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

Profitability

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

	Net Margins	Return on Equity	Return on Assets
Bay Commercial Bank	16.51%	7.04%	0.89%
Bank of Marin Bancorp	6.22%	5.27%	0.62%

Summary

Bay Commercial Bank beats Bank of Marin Bancorp on 11 of the 18 factors compared between the two stocks.

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.

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.