Coastal Financial (NASDAQ:CCB) and First Northwest Bancorp (NASDAQ:FNWB) Critical Analysis

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

Profitability

This table compares First Northwest Bancorp and Coastal Financial’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
First Northwest Bancorp	5.35%	4.23%	0.29%
Coastal Financial	7.11%	10.16%	1.05%

Volatility and Risk

First Northwest Bancorp has a beta of 0.58, meaning that its share price is 42% less volatile than the S&P 500. Comparatively, Coastal Financial has a beta of 0.87, meaning that its share price is 13% less volatile than the S&P 500.

Analyst Ratings

This is a summary of current ratings for First Northwest Bancorp and Coastal Financial, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
First Northwest Bancorp	1	2	1	0	2.00
Coastal Financial	1	0	5	1	2.86

First Northwest Bancorp currently has a consensus price target of $13.50, indicating a potential upside of 31.58%. Coastal Financial has a consensus price target of $128.00, indicating a potential upside of 45.72%. Given Coastal Financial’s stronger consensus rating and higher possible upside, analysts plainly believe Coastal Financial is more favorable than First Northwest Bancorp.

Valuation and Earnings

This table compares First Northwest Bancorp and Coastal Financial”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	0.82	-$4.19 million	$0.72	14.25
Coastal Financial	$661.22 million	2.01	$46.99 million	$3.04	28.89

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

Institutional & Insider Ownership

66.1% of First Northwest Bancorp shares are owned by institutional investors. Comparatively, 59.2% of Coastal Financial shares are owned by institutional investors. 5.5% of First Northwest Bancorp shares are owned by company insiders. Comparatively, 14.1% of Coastal Financial shares are owned by company insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a stock is poised for long-term growth.

Summary

Coastal Financial beats First Northwest Bancorp on 14 of the 15 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 Coastal Financial

Coastal Financial Corporation operates as the bank holding company for Coastal Community Bank that provides various banking products and services to small and medium-sized businesses, professionals, and individuals in the Puget Sound region in Washington. It accepts a range of deposit products, including demand and savings accounts, time deposits, and money market accounts. The company also offers commercial and industrial loans, such as term loans, commercial lines of credit, capital call lines working capital loans, equipment financing, borrowing base loans, small business administration loans, and other loan products; owner and non-owner-occupied real estate loans, and multi-family residential loans; construction, land, and land development loans; residential real estate loans; and consumer and other loans, including automobile, boat and recreational vehicle, and secured term loans, as well as personal lines of credit, including overdraft protection. In addition, it provides remote deposit capture, online and mobile banking, and direct and reciprocal deposit services; and debit cards. Further, the company offers business accounts and cash management services, including business checking and savings accounts, and treasury services, as well as Banking as a Service (BaaS), a platform that allows broker dealers and digital financial service providers to offer their customers banking services. Coastal Financial Corporation was founded in 1997 and is headquartered in Everett, Washington.