Western Alliance Bancorporation (NYSE:WAL) versus First Northwest Bancorp (NASDAQ:FNWB) Critical Analysis

First Northwest Bancorp (NASDAQ:FNWB) and Western Alliance Bancorporation (NYSE:WAL) are both finance companies, but which is the superior investment? We will contrast the two companies based on the strength of their valuation, earnings, profitability, risk, institutional ownership, analyst recommendations and dividends.

Analyst Ratings

This is a summary of current ratings for First Northwest Bancorp and Western Alliance Bancorporation, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
First Northwest Bancorp	1	2	1	0	2.00
Western Alliance Bancorporation	0	3	12	0	2.80

First Northwest Bancorp currently has a consensus price target of $13.50, indicating a potential upside of 57.16%. Western Alliance Bancorporation has a consensus price target of $97.73, indicating a potential upside of 45.36%. Given First Northwest Bancorp’s higher probable upside, research analysts plainly believe First Northwest Bancorp is more favorable than Western Alliance Bancorporation.

Earnings & Valuation

This table compares First Northwest Bancorp and Western Alliance Bancorporation”s top-line revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
First Northwest Bancorp	$118.64 million	0.68	-$4.19 million	$0.72	11.93
Western Alliance Bancorporation	$5.37 billion	1.38	$969.00 million	$8.73	7.70

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

Risk & Volatility

First Northwest Bancorp has a beta of 0.57, suggesting that its stock price is 43% less volatile than the S&P 500. Comparatively, Western Alliance Bancorporation has a beta of 1.34, suggesting that its stock price is 34% more volatile than the S&P 500.

Profitability

This table compares First Northwest Bancorp and Western Alliance Bancorporation’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
First Northwest Bancorp	5.35%	4.18%	0.30%
Western Alliance Bancorporation	18.04%	13.33%	1.10%

Institutional & Insider Ownership

66.1% of First Northwest Bancorp shares are owned by institutional investors. Comparatively, 79.2% of Western Alliance Bancorporation shares are owned by institutional investors. 5.5% of First Northwest Bancorp shares are owned by insiders. Comparatively, 2.7% of Western Alliance Bancorporation shares are owned by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a stock will outperform the market over the long term.

Summary

Western Alliance Bancorporation beats First Northwest Bancorp on 11 of the 14 factors compared between the two stocks.

About First Northwest Bancorp

First Northwest Bancorp operates as a bank holding company for First Fed Bank that provides commercial and consumer banking services to individuals, businesses, and nonprofit organizations in western Washington, the United States. The company accepts various deposit instruments, including checking, money market deposit, savings, and transaction accounts, as well as certificates of deposit. It also originates one- to four-family mortgage loans, commercial and multi-family real estate loans, construction and land loans, and commercial business loans, as well as consumer loans primarily consisting of automobile loans, and home-equity loans and lines of credit. First Northwest Bancorp operates branch offices in Clallam, Jefferson, King, Kitsap, and Whatcom Counties, Washington. First Northwest Bancorp was founded in 1923 and is based in Port Angeles, Washington.

About Western Alliance Bancorporation

Western Alliance Bancorporation operates as the bank holding company for Western Alliance Bank that provides various banking products and related services primarily in Arizona, California, and Nevada. It operates through Commercial and Consumer Related segments. The company offers deposit products, including checking, savings, and money market accounts, as well as fixed-rate and fixed maturity certificates of deposit accounts; demand deposits; and treasury management and residential mortgage products and services. It also provides commercial and industrial loan products, such as working capital lines of credit, loans to technology companies, inventory and accounts receivable lines, mortgage warehouse lines, equipment loans and leases, and other commercial loans; commercial real estate loans, which are secured by multi-family residential properties, professional offices, industrial facilities, retail centers, hotels, and other commercial properties; construction and land development loans for single family and multi-family residential projects, industrial/warehouse properties, office buildings, retail centers, medical office facilities, and residential lot developments; and consumer loans. In addition, the company provides other financial services, such as internet banking, wire transfers, electronic bill payment and presentment, funds transfer and other digital payment offerings, lock box services, courier, and cash management services. Further, the company holds certain investment securities, municipal and non-profit loans, and leases; invests primarily in low-income housing tax credits and small business investment corporations; and holds certain real estate loans and related securities. Western Alliance Bancorporation was founded in 1994 and is headquartered in Phoenix, Arizona.