Financial Review: Farmers & Merchants Bancorp (OTCMKTS:FMCB) and FinWise Bancorp (NASDAQ:FINW)

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

Valuation & Earnings

This table compares Farmers & Merchants Bancorp and FinWise 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 Bancorp	$292.68 million	2.69	$88.46 million	$130.83	8.60
FinWise Bancorp	$96.84 million	2.54	$12.74 million	$1.06	17.05

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

Insider & Institutional Ownership

5.6% of Farmers & Merchants Bancorp shares are held by institutional investors. Comparatively, 35.4% of FinWise Bancorp shares are held by institutional investors. 8.5% of Farmers & Merchants Bancorp shares are held by company insiders. Comparatively, 21.3% of FinWise Bancorp shares are held by company insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a company is poised for long-term growth.

Analyst Ratings

This is a breakdown of current recommendations and price targets for Farmers & Merchants Bancorp and FinWise Bancorp, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Farmers & Merchants Bancorp	0	0	0	0	0.00
FinWise Bancorp	0	1	3	0	2.75

FinWise Bancorp has a consensus target price of $22.00, indicating a potential upside of 21.72%. Given FinWise Bancorp’s stronger consensus rating and higher possible upside, analysts plainly believe FinWise Bancorp is more favorable than Farmers & Merchants Bancorp.

Profitability

This table compares Farmers & Merchants Bancorp and FinWise Bancorp’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Farmers & Merchants Bancorp	30.89%	15.03%	1.65%
FinWise Bancorp	12.13%	8.31%	1.82%

Risk and Volatility

Farmers & Merchants Bancorp has a beta of 0.21, meaning that its stock price is 79% less volatile than the S&P 500. Comparatively, FinWise Bancorp has a beta of 0.82, meaning that its stock price is 18% less volatile than the S&P 500.

Summary

FinWise Bancorp beats Farmers & Merchants Bancorp on 8 of the 14 factors compared between the two stocks.

About Farmers & Merchants Bancorp

Farmers & Merchants Bancorp operates as the bank holding company for Farmers & Merchants Bank of Central California that provides various banking services to businesses and individuals. The company accepts various deposit products, including checking, savings, money market, time certificates of deposit, and individual retirement accounts. It also offers range of lending products comprising commercial and residential real estate, real estate construction, agribusiness, and consumer loans, as well as equipment leases and credit card services; commercial products, including term loans, lines of credit and other working capital financing, and letters of credit; and financing products, such as automobile financing, home improvement, and home equity lines of credit. In addition, the company provides various specialized services consisting of credit card programs for merchants, lockbox and other collection services, account reconciliation, investment sweep, online account access, and electronic funds transfers through domestic and international wire and automated clearinghouse; online banking services; and investment products, such as mutual funds and annuities. The company was founded in 1916 and is headquartered in Lodi, 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.