Columbia Banking System (NASDAQ:COLB) and First Bank (NASDAQ:FRBA) Financial Review

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

Volatility & Risk

Columbia Banking System has a beta of 0.62, suggesting that its stock price is 38% less volatile than the S&P 500. Comparatively, First Bank has a beta of 0.52, suggesting that its stock price is 48% less volatile than the S&P 500.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
Columbia Banking System	19.96%	11.33%	1.31%
First Bank	17.45%	9.57%	1.06%

Institutional & Insider Ownership

92.5% of Columbia Banking System shares are held by institutional investors. Comparatively, 64.9% of First Bank shares are held by institutional investors. 0.6% of Columbia Banking System shares are held by company insiders. Comparatively, 13.1% of First Bank shares are held 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.

Dividends

Columbia Banking System pays an annual dividend of $1.48 per share and has a dividend yield of 5.2%. First Bank pays an annual dividend of $0.36 per share and has a dividend yield of 2.1%. Columbia Banking System pays out 59.0% of its earnings in the form of a dividend. First Bank pays out 21.3% 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 increased 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.

Earnings and Valuation

This table compares Columbia Banking System and First Bank”s top-line revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Columbia Banking System	$3.21 billion	2.52	$550.00 million	$2.51	11.39
First Bank	$149.77 million	2.89	$43.66 million	$1.69	10.20

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

Analyst Recommendations

This is a breakdown of recent recommendations and price targets for Columbia Banking System and First Bank, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Columbia Banking System	0	8	5	0	2.38
First Bank	0	2	3	0	2.60

Columbia Banking System presently has a consensus price target of $33.58, suggesting a potential upside of 17.42%. First Bank has a consensus price target of $19.67, suggesting a potential upside of 14.08%. Given Columbia Banking System’s higher probable upside, research analysts clearly believe Columbia Banking System is more favorable than First Bank.

Summary

Columbia Banking System beats First Bank on 13 of the 17 factors compared between the two stocks.

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.

About First Bank

First Bank provides various banking products and services to small to mid-sized businesses and individuals. The company accepts various deposits, including non-interest-bearing demand deposits, interest bearing demand accounts, money market accounts, savings accounts, and certificates of deposit, as well as commercial checking accounts. It also offers various loan products comprising commercial and industrial loans, which include line of credit, inventory, equipment, and short-term working capital financing; commercial real estate loans, such as owner-occupied, investor, construction and development, and multi-family loans; residential real estate loans comprising residential mortgages, first and second lien home equity loans, and revolving lines of credit; and consumer and other loans consists of auto, personal, traditional installment, and other loans. The company also provides electronic banking services, including Internet and mobile banking, electronic bill payment, and banking by phone; ATM and debit cards, and wire and ACH transfer services; remote deposit capture; and cash management services, as well as engages in the capital markets activities. It operates full-service branches in Cinnaminson, Delanco, Denville, Ewing, Fairfield, Flemington, Hamilton, Lawrence, Monroe, Pennington, Randolph, Somerset, and Williamstown, New Jersey; Doylestown, Trevose, Warminster, and West Chester, Paoli, Malvern, Coventry, Devon, Lionville, and Glen Mills Pennsylvania; and Palm Beach, Florida. First Bank was incorporated in 2007 and is headquartered in Hamilton, New Jersey.