Financial Review: Farmers & Merchants Bancorp (OTCMKTS:FMCB) and FinWise Bancorp (NASDAQ:FINW)
by Sarita Garza · The Markets DailyFinWise Bancorp (NASDAQ:FINW – Get Free Report) and Farmers & Merchants Bancorp (OTCMKTS:FMCB – Get Free Report) are both small-cap finance companies, but which is the superior business? We will compare the two companies based on the strength of their dividends, risk, analyst recommendations, earnings, valuation, profitability and institutional ownership.
Profitability
This table compares FinWise Bancorp and Farmers & Merchants Bancorp’s net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets | |
| FinWise Bancorp | 12.13% | 8.31% | 1.82% |
| Farmers & Merchants Bancorp | 30.89% | 15.03% | 1.65% |
Analyst Ratings
This is a breakdown of current ratings and price targets for FinWise Bancorp and Farmers & Merchants Bancorp, as provided by MarketBeat.com.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score | |
| FinWise Bancorp | 0 | 1 | 3 | 0 | 2.75 |
| Farmers & Merchants Bancorp | 0 | 0 | 0 | 0 | 0.00 |
FinWise Bancorp currently has a consensus target price of $22.00, indicating a potential upside of 23.32%. Given FinWise Bancorp’s stronger consensus rating and higher probable upside, research analysts plainly believe FinWise Bancorp is more favorable than Farmers & Merchants Bancorp.
Insider & Institutional Ownership
35.4% of FinWise Bancorp shares are owned by institutional investors. Comparatively, 5.6% of Farmers & Merchants Bancorp shares are owned by institutional investors. 21.3% of FinWise Bancorp shares are owned by insiders. Comparatively, 8.5% of Farmers & Merchants Bancorp shares are owned by insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a stock is poised for long-term growth.
Earnings and Valuation
This table compares FinWise Bancorp and Farmers & Merchants Bancorp”s gross revenue, earnings per share and valuation.
| Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio | |
| FinWise Bancorp | $96.84 million | 2.50 | $12.74 million | $1.06 | 16.83 |
| Farmers & Merchants Bancorp | $292.68 million | 2.67 | $88.46 million | $130.83 | 8.52 |
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.
Volatility and Risk
FinWise Bancorp has a beta of 0.82, suggesting that its share price is 18% less volatile than the S&P 500. Comparatively, Farmers & Merchants Bancorp has a beta of 0.21, suggesting that its share price is 79% 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 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.
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.