Reviewing RBB Bancorp (NASDAQ:RBB) and Farmers & Merchants Bank of Long Beach (OTCMKTS:FMBL)

Farmers & Merchants Bank of Long Beach (OTCMKTS:FMBL) and RBB Bancorp (NASDAQ:RBB) are both small-cap finance companies, but which is the better business? We will compare the two companies based on the strength of their risk, institutional ownership, valuation, dividends, analyst recommendations, profitability and earnings.

Dividends

Farmers & Merchants Bank of Long Beach pays an annual dividend of $112.00 per share and has a dividend yield of 1.4%. RBB Bancorp pays an annual dividend of $0.64 per share and has a dividend yield of 3.4%. Farmers & Merchants Bank of Long Beach pays out 26.1% of its earnings in the form of a dividend. RBB Bancorp pays out 43.0% 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.

Volatility & Risk

Farmers & Merchants Bank of Long Beach has a beta of 0.32, meaning that its share price is 68% less volatile than the S&P 500. Comparatively, RBB Bancorp has a beta of 1.12, meaning that its share price is 12% more volatile than the S&P 500.

Profitability

This table compares Farmers & Merchants Bank of Long Beach and RBB Bancorp’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Farmers & Merchants Bank of Long Beach	12.08%	3.84%	0.46%
RBB Bancorp	11.12%	5.10%	0.64%

Valuation and Earnings

This table compares Farmers & Merchants Bank of Long Beach and RBB Bancorp”s top-line revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Farmers & Merchants Bank of Long Beach	$459.33 million	2.06	$44.88 million	$428.48	18.09
RBB Bancorp	$232.00 million	1.37	$26.67 million	$1.49	12.49

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

Analyst Recommendations

This is a breakdown of current recommendations and price targets for Farmers & Merchants Bank of Long Beach and RBB Bancorp, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Farmers & Merchants Bank of Long Beach	0	0	0	0	0.00
RBB Bancorp	0	4	0	1	2.40

RBB Bancorp has a consensus price target of $22.33, suggesting a potential upside of 20.01%. Given RBB Bancorp’s stronger consensus rating and higher probable upside, analysts clearly believe RBB Bancorp is more favorable than Farmers & Merchants Bank of Long Beach.

Insider and Institutional Ownership

7.6% of Farmers & Merchants Bank of Long Beach shares are owned by institutional investors. Comparatively, 40.1% of RBB Bancorp shares are owned by institutional investors. 12.8% of Farmers & Merchants Bank of Long Beach shares are owned by insiders. Comparatively, 4.6% of RBB Bancorp shares are owned by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock will outperform the market over the long term.

About Farmers & Merchants Bank of Long Beach

Farmers & Merchants Bank of Long Beach provides various banking products and services to individuals, professionals, and small to medium-sized businesses in Los Angeles, Orange, and Santa Barbara Counties. It offers checking, savings, Christmas club savings, health savings, market rate savings, and money market accounts; demand and time deposits; certificates of deposit; and individual retirement account. The company also provides personal, home, commercial real estate, real estate and construction, and commercial business loans, as well as lines of credit; financing for residential loans comprising single-family and multifamily loans; and credit and debit cards. In addition, it offers account management, receivables and payables, and risk management services; commercial lending services; and faith-based and healthcare banking services, as well as online and mobile banking services. Farmers & Merchants Bank of Long Beach was founded in 1907 and is headquartered in Long Beach, 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.