Analyzing American Business Bank (OTCMKTS:AMBZ) and FinWise Bancorp (NASDAQ:FINW)

American Business Bank (OTCMKTS:AMBZ) and FinWise Bancorp (NASDAQ:FINW) are both small-cap finance companies, but which is the superior business? We will compare the two companies based on the strength of their dividends, earnings, risk, profitability, analyst recommendations, institutional ownership and valuation.

Analyst Recommendations

This is a breakdown of current recommendations and price targets for American Business Bank and FinWise Bancorp, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
American Business Bank	0	0	0	0	0.00
FinWise Bancorp	0	1	4	0	2.80

FinWise Bancorp has a consensus price target of $21.75, suggesting a potential upside of 20.10%. Given FinWise Bancorp’s stronger consensus rating and higher possible upside, analysts plainly believe FinWise Bancorp is more favorable than American Business Bank.

Institutional & Insider Ownership

9.9% of American Business Bank shares are owned by institutional investors. Comparatively, 35.4% of FinWise Bancorp shares are owned by institutional investors. 21.3% of FinWise Bancorp shares are owned by company insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a company will outperform the market over the long term.

Volatility and Risk

American Business Bank has a beta of 0.47, suggesting that its share price is 53% less volatile than the S&P 500. Comparatively, FinWise Bancorp has a beta of 0.82, suggesting that its share price is 18% less volatile than the S&P 500.

Profitability

This table compares American Business Bank and FinWise Bancorp’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
American Business Bank	25.23%	N/A	N/A
FinWise Bancorp	12.72%	7.70%	1.76%

Valuation & Earnings

This table compares American Business Bank and FinWise Bancorp”s revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
American Business Bank	$183.26 million	2.67	$43.28 million	$5.18	10.61
FinWise Bancorp	$89.73 million	2.73	$12.74 million	$0.97	18.67

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

Summary

FinWise Bancorp beats American Business Bank on 10 of the 14 factors compared between the two stocks.

About American Business Bank

American Business Bank, a California-chartered bank, provides banking products and services to small and medium-sized firms, non-profits, business executives, and professionals in Southern California. The company offers credit and depository; treasury management; asset-based lending; SBA lending; international banking comprising money transfers, import and export commercial letters of credit, standby letters of credit, documentary and clean collections, and foreign currency exchange services; and consulting and referral services. It operates regional loan production offices located in North Orange County, Orange County, South Bay, San Fernando Valley, Riverside County, Inland Empire, and Long Beach. American Business Bank was incorporated in 1998 and is headquartered in Los Angeles, California.

About FinWise Bancorp

FinWise Bancorp operates as the bank holding company for FinWise Bank that provides various banking products and services to individual and corporate customers in Utah. The company offers various deposit products, including interest and noninterest bearing demand accounts, health savings account demand deposits, NOW and money market accounts, and checking and savings accounts, as well as time deposits and certificates of deposits. It also provides loans, including consumer, small business administration, commercial, commercial real estate, and residential real estate loans. In addition, the company offers debit cards, remote deposit capture, online banking, mobile banking, and direct deposit services; and business accounts and cash management services, such as business checking and savings accounts, and treasury services. FinWise Bancorp was founded in 1999 and is headquartered in Murray, Utah.