Head to Head Review: United Security Bancshares (NASDAQ:UBFO) and Bay Commercial Bank (NASDAQ:BCML)

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

Valuation & Earnings

This table compares United Security Bancshares 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
United Security Bancshares	$65.46 million	2.35	$14.78 million	$0.66	13.32
Bay Commercial Bank	$138.09 million	2.19	$23.61 million	$2.18	12.63

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

Insider and Institutional Ownership

30.9% of United Security Bancshares shares are owned by institutional investors. Comparatively, 66.2% of Bay Commercial Bank shares are owned by institutional investors. 22.1% of United Security Bancshares shares are owned by insiders. Comparatively, 7.2% of Bay Commercial Bank shares are owned by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a company is poised for long-term growth.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
United Security Bancshares	17.07%	8.46%	0.92%
Bay Commercial Bank	17.36%	7.44%	0.93%

Analyst Recommendations

This is a summary of current ratings and recommmendations for United Security Bancshares and Bay Commercial Bank, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
United Security Bancshares	0	0	0	0	0.00
Bay Commercial Bank	0	1	1	0	2.50

Bay Commercial Bank has a consensus target price of $31.50, indicating a potential upside of 14.42%. Given Bay Commercial Bank’s stronger consensus rating and higher probable upside, analysts clearly believe Bay Commercial Bank is more favorable than United Security Bancshares.

Dividends

United Security Bancshares pays an annual dividend of $0.48 per share and has a dividend yield of 5.5%. Bay Commercial Bank pays an annual dividend of $0.80 per share and has a dividend yield of 2.9%. United Security Bancshares pays out 72.7% of its earnings in the form of a dividend. Bay Commercial Bank pays out 36.7% 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. United Security Bancshares has raised its dividend for 2 consecutive years and Bay Commercial Bank has raised its dividend for 3 consecutive years.

Risk & Volatility

United Security Bancshares has a beta of 0.36, indicating that its stock price is 64% less volatile than the S&P 500. Comparatively, Bay Commercial Bank has a beta of 0.53, indicating that its stock price is 47% less volatile than the S&P 500.

Summary

Bay Commercial Bank beats United Security Bancshares on 12 of the 17 factors compared between the two stocks.

About United Security Bancshares

United Security Bancshares operates as the bank holding company for United Security Bank, a state-chartered bank that provides a range of commercial banking services to the business and professional community, and individuals in California. The company accepts various deposit products, including personal and business checking accounts, savings accounts, interest-bearing negotiable order of withdrawal accounts, money market accounts, and time certificates of deposit. It also provides real estate mortgage, commercial and industrial, real estate construction and development, and consumer loans, as well as agricultural, installment, and student loans. In addition, the company offers online and mobile banking, safe deposit boxes, wire transfers, payroll direct deposit, cashier's check, cash management, and foreign draft services, as well as interactive teller machines; and person-to-person and bank-to-bank transfers for consumer customers. United Security Bancshares was founded in 1987 and is headquartered in Fresno, 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.