Critical Comparison: RBB Bancorp (NASDAQ:RBB) and Avidbank (OTCMKTS:AVBH)

Avidbank (OTCMKTS:AVBH) and RBB Bancorp (NASDAQ:RBB) are both small-cap finance companies, but which is the better business? We will contrast the two companies based on the strength of their institutional ownership, valuation, profitability, analyst recommendations, risk, dividends and earnings.

Insider and Institutional Ownership

15.9% of Avidbank shares are owned by institutional investors. Comparatively, 40.1% of RBB Bancorp shares are owned by institutional investors. 4.6% of RBB Bancorp shares are owned by insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a stock is poised for long-term growth.

Analyst Ratings

This is a summary of current ratings for Avidbank and RBB Bancorp, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Avidbank	0	0	2	0	3.00
RBB Bancorp	0	3	0	0	2.00

Avidbank presently has a consensus price target of $25.50, indicating a potential downside of 2.78%. RBB Bancorp has a consensus price target of $21.33, indicating a potential upside of 6.88%. Given RBB Bancorp’s higher possible upside, analysts plainly believe RBB Bancorp is more favorable than Avidbank.

Profitability

This table compares Avidbank and RBB Bancorp’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
RBB Bancorp	9.80%	4.50%	0.57%

Volatility & Risk

Avidbank has a beta of 0.59, indicating that its stock price is 41% less volatile than the S&P 500. Comparatively, RBB Bancorp has a beta of 1.13, indicating that its stock price is 13% more volatile than the S&P 500.

Earnings and Valuation

This table compares Avidbank and RBB Bancorp”s top-line revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Avidbank	$47.45 million	5.82	$21.01 million	$3.07	8.54
RBB Bancorp	$232.00 million	1.48	$26.67 million	$1.29	15.47

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

Summary

RBB Bancorp beats Avidbank on 9 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 RBB Bancorp

RBB Bancorp operates as the bank holding company for Royal Business Bank that provides various banking products and services to the Chinese-American, Korean-American, and other Asian-American communities. Its deposit products include checking, savings, and money market accounts, as well as certificates of deposit. The company also offers commercial and industrial lines of credit, term loans, mortgage warehouse lines, and international trade discounts; commercial real estate loans; residential, commercial, and land acquisition and development construction loans; small business administration loans; and single-family residential mortgage loans. In addition, it provides international letters of credit, SWIFT, export advisory, trade finance discount, and foreign exchange services; and remote deposit, e-banking, and mobile banking services. The company serves individuals, businesses, municipalities, and other entities. It operates branches in the Western region with branches in Los Angeles County, California; Orange County, California; Ventura County, California; Clark County, Nevada; Honolulu, Hawaii, as well as in Eastern region with branches in Manhattan, Brooklyn and Queens, New York; Chicago, Illinois; and Edison, New Jersey. RBB Bancorp was founded in 2008 and is headquartered in Los Angeles, California.