Critical Survey: RBB Bancorp (NASDAQ:RBB) and Columbia Banking System (NASDAQ:COLB)

RBB Bancorp (NASDAQ:RBB) and Columbia Banking System (NASDAQ:COLB) are both finance companies, but which is the better business? We will contrast the two businesses based on the strength of their valuation, dividends, earnings, analyst recommendations, profitability, institutional ownership and risk.

Profitability

This table compares RBB Bancorp and Columbia Banking System’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
RBB Bancorp	11.12%	5.10%	0.64%
Columbia Banking System	15.98%	11.13%	1.18%

Institutional & Insider Ownership

40.1% of RBB Bancorp shares are owned by institutional investors. Comparatively, 92.5% of Columbia Banking System shares are owned by institutional investors. 4.6% of RBB Bancorp shares are owned by company insiders. Comparatively, 0.7% of Columbia Banking System shares are owned by company insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a company will outperform the market over the long term.

Dividends

RBB Bancorp pays an annual dividend of $0.64 per share and has a dividend yield of 3.0%. Columbia Banking System pays an annual dividend of $1.48 per share and has a dividend yield of 5.2%. RBB Bancorp pays out 43.0% of its earnings in the form of a dividend. Columbia Banking System pays out 66.7% 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. Columbia Banking System has raised its dividend for 4 consecutive years. Columbia Banking System is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Analyst Ratings

This is a breakdown of recent ratings and target prices for RBB Bancorp and Columbia Banking System, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
RBB Bancorp	0	5	0	0	2.00
Columbia Banking System	0	12	3	1	2.31

RBB Bancorp currently has a consensus price target of $22.33, suggesting a potential upside of 5.30%. Columbia Banking System has a consensus price target of $30.08, suggesting a potential upside of 5.13%. Given RBB Bancorp’s higher probable upside, analysts clearly believe RBB Bancorp is more favorable than Columbia Banking System.

Valuation and Earnings

This table compares RBB Bancorp and Columbia Banking System”s gross revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
RBB Bancorp	$232.00 million	1.56	$26.67 million	$1.49	14.23
Columbia Banking System	$2.97 billion	2.89	$533.67 million	$2.22	12.89

Columbia Banking System has higher revenue and earnings than RBB Bancorp. Columbia Banking System is trading at a lower price-to-earnings ratio than RBB Bancorp, indicating that it is currently the more affordable of the two stocks.

Volatility and Risk

RBB Bancorp has a beta of 1.08, indicating that its share price is 8% more volatile than the S&P 500. Comparatively, Columbia Banking System has a beta of 0.6, indicating that its share price is 40% less volatile than the S&P 500.

Summary

Columbia Banking System beats RBB Bancorp on 13 of the 18 factors compared between the two stocks.

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.

About Columbia Banking System

Columbia Banking System, Inc. operates as the holding company of Umpqua Bank that provides banking, private banking, mortgage, and other financial services in the United States. The company offers deposit products, including business, non-interest bearing checking, interest-bearing checking and savings, money market, and certificate of deposit accounts; and insured cash sweep and other investment sweep solutions. It also provides commercial lending products, such as commercial lines of credit and term loans, accounts receivable and inventory financing, international trade finance, commercial property loans, multifamily loans, equipment loans, commercial equipment leases, real estate construction loans and permanent financing, and small business administration program financing, as well as capital markets. In addition, the company offers wealth management comprising financial planning, investment, trust, and insurance; treasury management, which includes digital and mobile banking solutions, ACH, wires, positive pay, remote deposit capture, integrated payments, integrated receivables, lockbox, cash vault, real-time payments, commercial card, and foreign exchange and international banking related products, as well as merchant services; and brokerage services, residential real estate loans and consumer loans. It serves its products to corporate, institutional, small business, and individual customers. The company was founded in 1953 and is headquartered in Tacoma, Washington.