Hanmi Financial (NASDAQ:HAFC) & First Northern Community Bancorp (OTCMKTS:FNRN) Critical Comparison

First Northern Community Bancorp (OTCMKTS:FNRN) and Hanmi Financial (NASDAQ:HAFC) are both small-cap finance companies, but which is the superior stock? We will compare the two companies based on the strength of their risk, valuation, analyst recommendations, earnings, profitability, institutional ownership and dividends.

Insider & Institutional Ownership

17.9% of First Northern Community Bancorp shares are held by institutional investors. Comparatively, 88.7% of Hanmi Financial shares are held by institutional investors. 13.0% of First Northern Community Bancorp shares are held by insiders. Comparatively, 1.9% of Hanmi Financial shares are held by insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a company is poised for long-term growth.

Earnings and Valuation

This table compares First Northern Community Bancorp and Hanmi Financial”s revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
First Northern Community Bancorp	$84.67 million	2.48	$20.03 million	$1.31	10.22
Hanmi Financial	$259.79 million	3.22	$62.20 million	$2.39	11.67

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

Analyst Recommendations

This is a summary of recent ratings and price targets for First Northern Community Bancorp and Hanmi Financial, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
First Northern Community Bancorp	0	0	0	0	0.00
Hanmi Financial	0	2	2	1	2.80

Hanmi Financial has a consensus price target of $28.50, indicating a potential upside of 2.19%. Given Hanmi Financial’s stronger consensus rating and higher possible upside, analysts clearly believe Hanmi Financial is more favorable than First Northern Community Bancorp.

Profitability

This table compares First Northern Community Bancorp and Hanmi Financial’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
First Northern Community Bancorp	23.58%	11.03%	1.08%
Hanmi Financial	16.53%	9.59%	0.93%

Risk and Volatility

First Northern Community Bancorp has a beta of 0.23, suggesting that its share price is 77% less volatile than the S&P 500. Comparatively, Hanmi Financial has a beta of 0.75, suggesting that its share price is 25% less volatile than the S&P 500.

Summary

Hanmi Financial beats First Northern Community Bancorp on 11 of the 15 factors compared between the two stocks.

About First Northern Community Bancorp

First Northern Community Bancorp operates as the bank holding company for First Northern Bank of Dixon that provides commercial banking products and services to individuals, and small and medium sized businesses. The company accepts demand deposits, interest-bearing transaction deposits, savings and money market deposit accounts, and time deposits. It also offers commercial, commercial real estate, agriculture, residential mortgage, residential construction, and consumer loans. In addition, the company provides debit and credit cards; investment and brokerage services; alternative investment products, and fiduciary and other financial services; and equipment leasing, merchant card processing, payroll, and international banking services through third parties. Further, it offers cashier's checks, safe deposit boxes, and other customary banking services. The company operates branches located in the cities of Auburn, Colusa, Davis, Dixon, Fairfield, Orland, Rancho Cordova, Roseville, Sacramento, Vacaville, West Sacramento, Winters, Willows, and Woodland; satellite banking office inside a retirement community in the city of Davis; residential mortgage loan office in Davis; and commercial loan office in the Contra Costa County city of Walnut Creek. First Northern Community Bancorp was founded in 1910 and is headquartered in Dixon, California.

About Hanmi Financial

Hanmi Financial Corporation operates as the holding company for Hanmi Bank that provides business banking products and services in the United States. It offers various deposit products, including noninterest-bearing checking accounts, savings accounts, negotiable order of withdrawal accounts, money market accounts, and certificates of deposit. The company also provides real estate loans, such as commercial property, construction, and residential property loans; and commercial and industrial loans, such as commercial term loans and commercial lines of credit; and international finance and trade services and products, such as letters of credit, and import and export financing. In addition, it offers small business administration loans for business purposes, which comprise owner-occupied commercial real estate, business acquisitions, start-ups, franchise financing, working capital, improvements and renovations, inventory and equipment, and debt-refinancing, as well as equipment lease financing. The company was founded in 1982 and is headquartered in Los Angeles, California.