East West Bancorp (NASDAQ:EWBC) and First Northern Community Bancorp (OTCMKTS:FNRN) Critical Analysis
by Mitch Edgeman · The Markets DailyFirst Northern Community Bancorp (OTCMKTS:FNRN – Get Free Report) and East West Bancorp (NASDAQ:EWBC – Get Free Report) are both finance companies, but which is the superior business? We will contrast the two businesses based on the strength of their institutional ownership, analyst recommendations, earnings, valuation, profitability, risk and dividends.
Valuation and Earnings
This table compares First Northern Community Bancorp and East West Bancorp”s gross revenue, earnings per share (EPS) and valuation.
| Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio | |
| First Northern Community Bancorp | $84.67 million | 2.50 | $20.03 million | $1.31 | 10.27 |
| East West Bancorp | $4.53 billion | 3.49 | $1.17 billion | $9.07 | 12.66 |
East West Bancorp has higher revenue and earnings than First Northern Community Bancorp. First Northern Community Bancorp is trading at a lower price-to-earnings ratio than East West Bancorp, indicating that it is currently the more affordable of the two stocks.
Analyst Ratings
This is a breakdown of current ratings and price targets for First Northern Community Bancorp and East West Bancorp, as provided by MarketBeat.com.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score | |
| First Northern Community Bancorp | 0 | 0 | 0 | 0 | 0.00 |
| East West Bancorp | 1 | 3 | 10 | 1 | 2.73 |
East West Bancorp has a consensus price target of $124.00, suggesting a potential upside of 8.00%. Given East West Bancorp’s stronger consensus rating and higher possible upside, analysts plainly believe East West Bancorp is more favorable than First Northern Community Bancorp.
Insider and Institutional Ownership
17.9% of First Northern Community Bancorp shares are held by institutional investors. Comparatively, 89.5% of East West Bancorp shares are held by institutional investors. 11.8% of First Northern Community Bancorp shares are held by company insiders. Comparatively, 1.0% of East West Bancorp shares are held by company insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a stock is poised for long-term growth.
Profitability
This table compares First Northern Community Bancorp and East West Bancorp’s net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets | |
| First Northern Community Bancorp | 24.07% | 10.97% | 1.11% |
| East West Bancorp | 27.16% | 15.55% | 1.63% |
Volatility and Risk
First Northern Community Bancorp has a beta of 0.08, indicating that its share price is 92% less volatile than the S&P 500. Comparatively, East West Bancorp has a beta of 0.92, indicating that its share price is 8% less volatile than the S&P 500.
Summary
East West Bancorp beats First Northern Community Bancorp on 14 of the 15 factors compared between the two stocks.
About First Northern Community Bancorp
First Northern Community Bancorp operates as the bank holding company for First Northern Bank of Dixon that provides commercial banking products and services to individuals, and small and medium sized businesses. The company accepts demand deposits, interest-bearing transaction deposits, savings and money market deposit accounts, and time deposits. It also offers commercial, commercial real estate, agriculture, residential mortgage, residential construction, and consumer loans. In addition, the company provides debit and credit cards; investment and brokerage services; alternative investment products, and fiduciary and other financial services; and equipment leasing, merchant card processing, payroll, and international banking services through third parties. Further, it offers cashier's checks, safe deposit boxes, and other customary banking services. The company operates branches located in the cities of Auburn, Colusa, Davis, Dixon, Fairfield, Orland, Rancho Cordova, Roseville, Sacramento, Vacaville, West Sacramento, Winters, Willows, and Woodland; satellite banking office inside a retirement community in the city of Davis; residential mortgage loan office in Davis; and commercial loan office in the Contra Costa County city of Walnut Creek. First Northern Community Bancorp was founded in 1910 and is headquartered in Dixon, California.
About East West Bancorp
East West Bancorp, Inc. operates as the bank holding company for East West Bank that provides a range of personal and commercial banking services to businesses and individuals in the United States. The company operates through three segments: Consumer and Business Banking, Commercial Banking, and Other. It accepts various deposit products, such as personal and business checking and savings accounts, money market, and time deposits. The company’s loan products include mortgage and home equity, commercial and residential real estate, working capital lines of credit, construction finance, trade finance, letters of credit, commercial business, affordable housing loans, asset-based lending, asset-backed finance, project finance, loan syndication, and equipment financing, as well as financing services for clients to facilitate their business transactions between the United States and Asia. It also provides various wealth management, treasury management, foreign exchange, and interest rate and commodity risk hedging services; and mobile and online banking services. The company was founded in 1973 and is headquartered in Pasadena, California.