Critical Comparison: Atlantic Coast Financial (ACFC) versus Northrim BanCorp (NRIM)

Atlantic Coast Financial (NASDAQ: ACFC) and Northrim BanCorp (NASDAQ:NRIM) are both small-cap finance companies, but which is the superior business? We will contrast the two businesses based on the strength of their earnings, dividends, profitability, institutional ownership, risk, analyst recommendations and valuation.

Profitability

This table compares Atlantic Coast Financial and Northrim BanCorp’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Atlantic Coast Financial 7.51% 5.91% 0.57%
Northrim BanCorp 13.47% 8.45% 1.08%

Dividends

Northrim BanCorp pays an annual dividend of $0.96 per share and has a dividend yield of 2.5%. Atlantic Coast Financial does not pay a dividend. Northrim BanCorp pays out 47.1% of its earnings in the form of a dividend.

Insider & Institutional Ownership

61.6% of Atlantic Coast Financial shares are owned by institutional investors. Comparatively, 70.7% of Northrim BanCorp shares are owned by institutional investors. 10.9% of Atlantic Coast Financial shares are owned by insiders. Comparatively, 2.9% of Northrim BanCorp shares are owned by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a stock will outperform the market over the long term.

Earnings & Valuation

This table compares Atlantic Coast Financial and Northrim BanCorp’s top-line revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Atlantic Coast Financial $41.36 million 4.09 $3.16 million $0.34 32.03
Northrim BanCorp $100.58 million 2.66 $13.15 million $2.04 19.09

Northrim BanCorp has higher revenue and earnings than Atlantic Coast Financial. Northrim BanCorp is trading at a lower price-to-earnings ratio than Atlantic Coast Financial, indicating that it is currently the more affordable of the two stocks.

Volatility and Risk

Atlantic Coast Financial has a beta of 0.49, indicating that its stock price is 51% less volatile than the S&P 500. Comparatively, Northrim BanCorp has a beta of 0.7, indicating that its stock price is 30% less volatile than the S&P 500.

Analyst Recommendations

This is a summary of recent ratings and target prices for Atlantic Coast Financial and Northrim BanCorp, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Atlantic Coast Financial 0 1 0 0 2.00
Northrim BanCorp 0 0 0 0 N/A

Atlantic Coast Financial presently has a consensus target price of $8.50, suggesting a potential downside of 21.95%. Given Atlantic Coast Financial’s higher probable upside, analysts plainly believe Atlantic Coast Financial is more favorable than Northrim BanCorp.

Summary

Northrim BanCorp beats Atlantic Coast Financial on 9 of the 14 factors compared between the two stocks.

About Atlantic Coast Financial

Atlantic Coast Financial Corporation operates as the holding company for Atlantic Coast Bank that provides various banking services to individual and business customers primarily in Northeast Florida, Central Florida, and Southeast Georgia. It accepts various deposit products, including noninterest-bearing and interest-bearing demand, savings, money market demand, time deposit, and checking accounts, as well as certificates of deposit. The company also offers one-to four-family residential first and second mortgage, home-equity, commercial real estate, commercial and residential construction, multi-family real estate, commercial business, and automobile and other consumer loans. As of December 31, 2017, it operated 10 full-service branch offices and 4 lending offices. The company was founded in 1939 and is headquartered in Jacksonville, Florida.

About Northrim BanCorp

Northrim BanCorp, Inc. operates as the bank holding company for Northrim Bank that provides commercial banking products and services to businesses and professionals in Alaska. The company operates in two segments, Community Banking and Home Mortgage Lending. It offers various deposit products, including noninterest-bearing checking accounts and interest-bearing time deposits, checking accounts, and savings accounts, as well as money market deposit accounts, certificates of deposit, and courier noncash deposits. The company also provides family residential mortgages; commercial loans, such as secured and unsecured loans for working capital and expansion; commercial real estate loans; construction loans for commercial real estate projects, and land development and residential subdivision construction loans; and consumer loans comprising loans for automobiles, recreational vehicles, boats, and other consumer purchases, as well as home equity and commercial credit lines, and factoring services. In addition, it offers other services comprising consumer online banking, mobile app and mobile deposit, mobile Web and text banking, business online banking, personal finance, online documents, consumer and business debit cards, personalized checks at account opening, telebanking, automated teller, overdraft protection from a savings account, commercial drive-up banking, automatic transfers and payments, wire transfers, direct payroll deposit, electronic tax payments, automated clearing house origination and receipt, remote deposit capture, merchant, and cash management services, as well as annuity products, and long term investment portfolios. As of January 29, 2018, the company operated 14 branches in Anchorage, the Matanuska Valley, Juneau, Fairbanks, Ketchikan, and Sitka. Northrim BanCorp, Inc. was founded in 1990 and is headquartered in Anchorage, Alaska.

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