Critical Comparison: Solera National Bancorp (OTCMKTS:SLRK) versus Eagle Bancorp Montana (NASDAQ:EBMT)

Eagle Bancorp Montana (NASDAQ:EBMT) and Solera National Bancorp (OTCMKTS:SLRK) are both small-cap 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 Eagle Bancorp Montana and Solera National Bancorp’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Eagle Bancorp Montana	11.67%	8.17%	0.70%
Solera National Bancorp	27.46%	N/A	N/A

Risk and Volatility

Eagle Bancorp Montana has a beta of 0.31, suggesting that its share price is 69% less volatile than the S&P 500. Comparatively, Solera National Bancorp has a beta of 0.4, suggesting that its share price is 60% less volatile than the S&P 500.

Earnings and Valuation

This table compares Eagle Bancorp Montana and Solera National Bancorp”s top-line revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Eagle Bancorp Montana	$127.08 million	1.47	$14.84 million	$1.88	12.47
Solera National Bancorp	$83.83 million	0.84	$23.02 million	$5.35	3.08

Solera National Bancorp has lower revenue, but higher earnings than Eagle Bancorp Montana. Solera National Bancorp is trading at a lower price-to-earnings ratio than Eagle Bancorp Montana, indicating that it is currently the more affordable of the two stocks.

Analyst Ratings

This is a breakdown of recent ratings and target prices for Eagle Bancorp Montana and Solera National Bancorp, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Eagle Bancorp Montana	0	1	1	1	3.00
Solera National Bancorp	0	0	0	0	0.00

Eagle Bancorp Montana currently has a consensus price target of $23.00, suggesting a potential downside of 1.92%. Given Eagle Bancorp Montana’s stronger consensus rating and higher probable upside, analysts clearly believe Eagle Bancorp Montana is more favorable than Solera National Bancorp.

Insider & Institutional Ownership

35.7% of Eagle Bancorp Montana shares are owned by institutional investors. 6.1% of Eagle Bancorp Montana shares are owned by company insiders. Comparatively, 17.4% of Solera National Bancorp shares are owned by company insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a company will outperform the market over the long term.

Summary

Eagle Bancorp Montana beats Solera National Bancorp on 10 of the 15 factors compared between the two stocks.

About Eagle Bancorp Montana

Eagle Bancorp Montana, Inc. operates as the bank holding company for Opportunity Bank of Montana that provides various retail banking products and services to small businesses and individuals in Montana. It accepts various deposit products, such as checking, savings, money market, and individual retirement accounts, as well as certificates of deposit accounts. The company also provides 1-4 family residential mortgage loans, such as residential mortgages and construction of residential properties; commercial real estate loans, including multi-family dwellings, nonresidential property, commercial construction and development, and farmland loans; and second mortgage/home equity loans. In addition, it offers consumer loans, such as loans secured by collateral other than real estate, such as automobiles, recreational vehicles, and boats; personal loans and lines of credit; commercial business loans consisting of business loans and lines of credit on a secured and unsecured basis; construction loans; agricultural loans; and mortgage loan services. The company operates full-service branches and automated teller machines. Eagle Bancorp Montana, Inc. was founded in 1922 and is headquartered in Helena, Montana.

About Solera National Bancorp

Solera National Bancorp, Inc. operates as the bank holding company for Solera National Bank that provides commercial and consumer banking services in the United States. The company offers checking and savings accounts, money market accounts, time and demand deposits, and individual retirement accounts (IRA), as well as certificates of deposit; and real estate secured loans, construction loans, small business administration loans, business lines of credit, and equipment financing. It also provides online banking, account analysis, combined account analysis, commercial sweep, remote deposit, ACH origination, payroll direct deposit, merchant, business debit card, and cash management services. The company was incorporated in 2006 and is based in Lakewood, Colorado.