Contrasting Summit State Bank (NASDAQ:SSBI) and First Northwest Bancorp (NASDAQ:FNWB)

First Northwest Bancorp (NASDAQ:FNWB) and Summit State Bank (NASDAQ:SSBI) are both small-cap finance companies, but which is the superior investment? We will contrast the two businesses based on the strength of their dividends, risk, analyst recommendations, earnings, profitability, institutional ownership and valuation.

Profitability

This table compares First Northwest Bancorp and Summit State Bank’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%
Summit State Bank	11.55%	N/A	N/A

Analyst Ratings

This is a breakdown of recent recommendations for First Northwest Bancorp and Summit State Bank, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
First Northwest Bancorp	1	2	1	0	2.00
Summit State Bank	1	0	0	0	1.00

First Northwest Bancorp currently has a consensus target price of $13.50, indicating a potential upside of 46.74%. Given First Northwest Bancorp’s stronger consensus rating and higher possible upside, equities research analysts plainly believe First Northwest Bancorp is more favorable than Summit State Bank.

Insider & Institutional Ownership

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

Volatility and Risk

First Northwest Bancorp has a beta of 0.57, meaning that its share price is 43% less volatile than the S&P 500. Comparatively, Summit State Bank has a beta of 0.19, meaning that its share price is 81% less volatile than the S&P 500.

Earnings and Valuation

This table compares First Northwest Bancorp and Summit State Bank”s top-line revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
First Northwest Bancorp	$118.64 million	0.73	-$4.19 million	$0.72	12.78
Summit State Bank	$58.82 million	1.48	$6.80 million	$1.01	12.74

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

Summary

First Northwest Bancorp beats Summit State Bank on 10 of the 14 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 Summit State Bank

Summit State Bank engages in providing an array of financial services to small and medium-sized businesses, their owners and employees, entrepreneurs, high net worth families, foundations, estates, and individual consumers. It specializes in business services, personal accounts, nonprofit programs, and mobile banking ranging from lending, checking, merchant, eBanking, automated teller machines, equity loans, and others. The company was founded on December 20, 1982 and is headquartered in Santa Rosa, CA.