Financial Contrast: United Security Bancshares (NASDAQ:UBFO) & Northrim BanCorp (NASDAQ:NRIM)

United Security Bancshares (NASDAQ:UBFO) and Northrim BanCorp (NASDAQ:NRIM) are both small-cap finance companies, but which is the superior investment? We will compare the two businesses based on the strength of their institutional ownership, valuation, risk, analyst recommendations, earnings, dividends and profitability.

Valuation & Earnings

This table compares United Security Bancshares and Northrim BanCorp”s gross 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	2.21	$14.78 million	$0.66	12.56
Northrim BanCorp	$195.96 million	2.28	$36.97 million	$7.99	10.15

Northrim BanCorp has higher revenue and earnings than United Security Bancshares. Northrim BanCorp 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.

Institutional and Insider Ownership

30.9% of United Security Bancshares shares are owned by institutional investors. Comparatively, 66.0% of Northrim BanCorp shares are owned by institutional investors. 22.1% of United Security Bancshares shares are owned by company insiders. Comparatively, 3.9% of Northrim BanCorp shares are owned by company insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a stock is poised for long-term growth.

Profitability

This table compares United Security Bancshares and Northrim BanCorp’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%
Northrim BanCorp	20.11%	16.35%	1.45%

Dividends

United Security Bancshares pays an annual dividend of $0.48 per share and has a dividend yield of 5.8%. Northrim BanCorp pays an annual dividend of $2.56 per share and has a dividend yield of 3.2%. United Security Bancshares pays out 72.7% of its earnings in the form of a dividend. Northrim BanCorp pays out 32.0% 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 Northrim BanCorp has raised its dividend for 16 consecutive years.

Volatility & Risk

United Security Bancshares has a beta of 0.39, meaning that its stock price is 61% less volatile than the S&P 500. Comparatively, Northrim BanCorp has a beta of 1, meaning that its stock price has a similar volatility profile to the S&P 500.

Analyst Ratings

This is a breakdown of current ratings and target prices for United Security Bancshares and Northrim BanCorp, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
United Security Bancshares	0	0	0	0	0.00
Northrim BanCorp	0	0	1	0	3.00

Northrim BanCorp has a consensus price target of $104.00, suggesting a potential upside of 28.24%. Given Northrim BanCorp’s stronger consensus rating and higher possible upside, analysts clearly believe Northrim BanCorp is more favorable than United Security Bancshares.

Summary

Northrim BanCorp beats United Security Bancshares on 14 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 Northrim BanCorp

Northrim BanCorp, Inc. operates as the bank holding company for Northrim Bank that provides commercial banking products and services to businesses and professional individuals. It operates through two segments, Community Banking and Home Mortgage Lending. The company offers noninterest-bearing checking accounts and interest-bearing time deposits, checking and savings accounts, individual retirement and money market deposit accounts, certificates of deposit, and business sweep accounts. It also provides short and medium-term commercial loans, commercial credit lines, construction and real estate loans, and consumer loans, as well as short-term working capital. In addition, the company offers other services comprising consumer and business online banking, mobile app, and mobile deposits; and debit and credit cards. Further, it provides mobile web and app banking, consumer online account opening, personal finance, online documents, consumer debit cards, business debit cards, my rewards for consumer debit cards, retail lockbox, card control, corporate purchase cards, integrated payables, home equity advantage access cards, telebanking, and automated teller services. Additionally, the company offers personalized checks at account opening, overdraft protection from a savings account, commercial drive-up banking, automatic transfer and payment, People Pay, external transfer, Bill Pay, wire transfer, direct payroll deposit, electronic tax payment, Automated Clearing House origination and receipt, remote deposit capture, account reconciliation and positive pay, merchant, cash management, annuity, and long-term investment portfolio products and services. It also provides investment advisory, trust, wealth management, factoring, and mortgage services. The company was founded in 1990 and is headquartered in Anchorage, Alaska.