Critical Comparison: RBB Bancorp (NASDAQ:RBB) and Avidbank (NASDAQ:AVBH)

Avidbank (NASDAQ:AVBH) and RBB Bancorp (NASDAQ:RBB) are both small-cap finance companies, but which is the superior business? We will contrast the two businesses based on the strength of their institutional ownership, analyst recommendations, valuation, profitability, risk, dividends and earnings.

Risk & Volatility

Avidbank has a beta of 0.3, suggesting that its stock price is 70% less volatile than the S&P 500. Comparatively, RBB Bancorp has a beta of 1.06, suggesting that its stock price is 6% more volatile than the S&P 500.

Analyst Ratings

This is a breakdown of recent ratings and recommmendations for Avidbank and RBB Bancorp, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Avidbank	0	1	3	1	3.00
RBB Bancorp	0	3	2	0	2.40

Avidbank presently has a consensus target price of $40.00, suggesting a potential upside of 14.54%. RBB Bancorp has a consensus target price of $29.33, suggesting a potential upside of 11.79%. Given Avidbank’s stronger consensus rating and higher possible upside, research analysts clearly believe Avidbank is more favorable than RBB Bancorp.

Institutional and Insider Ownership

15.9% of Avidbank shares are owned by institutional investors. Comparatively, 40.1% of RBB Bancorp shares are owned by institutional investors. 9.6% of Avidbank shares are owned by company insiders. Comparatively, 6.8% of RBB Bancorp shares are owned by company insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a company is poised for long-term growth.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
Avidbank	20.02%	11.90%	1.32%
RBB Bancorp	18.02%	8.35%	1.05%

Earnings and Valuation

This table compares Avidbank and RBB Bancorp”s revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Avidbank	$151.76 million	2.53	-$19.55 million	$3.14	11.12
RBB Bancorp	$238.00 million	1.87	$31.95 million	$2.58	10.17

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

Summary

Avidbank beats RBB Bancorp on 11 of the 15 factors compared between the two stocks.

About Avidbank

Avidbank Holdings, Inc. operates as a bank holding company for Avidbank that provides financial products and services to small and middle-market businesses, professionals, and individuals in the Santa Clara, San Mateo, and San Francisco counties. It offers business and personal deposit products, such as checking, money market, and savings accounts; and certificates of deposit. The company also provides personal lending products include secured and unsecured lines of credit, home equity lines of credit, remodel and new home construction loans, and term loans; corporate banking comprises working capital lines of credit, equipment loans, acquisition financing, shareholder buyouts, ESOP loans, and owner-occupied real estate loans; and commercial real estate lending, such as permanent loans and bridge financing products. In addition, it offers construction lending products, including land acquisition loans, pre-development loans, construction spec SFD, owner-occupied SFD, condominiums, subdivision, unsecured business lines, real estate bridge loans, and RLOC Â? real estate secured loans. Further, the company provides various financing solutions, such as structured finance, venture lending, asset-based lending, and sponsor finance. Additionally, it offers various services, such as automated clearing house payments and collections, bill pay, wire transfer, lockbox, merchant, remote deposit capture, ATM/debit cards, credit cards, business courier, cash management, and notary services, as well as online and mobile banking. The company was formerly known as Peninsula Bank Holding Co. and changed its name to Avidbank Holdings, Inc. in August 2011. Avidbank Holdings, Inc. was founded in 2003 and is headquartered in San Jose, California.

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.