Critical Analysis: Suncrest Bank (OTCMKTS:SBKK) and Amalgamated Financial (NASDAQ:AMAL)

Suncrest Bank (OTCMKTS:SBKK) and Amalgamated Financial (NASDAQ:AMAL) are both small-cap finance companies, but which is the better investment? We will compare the two businesses based on the strength of their risk, valuation, analyst recommendations, institutional ownership, earnings, dividends and profitability.

Profitability

This table compares Suncrest Bank and Amalgamated Financial’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Suncrest Bank	N/A	N/A	N/A
Amalgamated Financial	23.64%	16.67%	1.21%

Earnings and Valuation

This table compares Suncrest Bank and Amalgamated Financial’s gross revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Suncrest Bank	$46.73 million	4.92	$16.96 million	$1.37	13.56
Amalgamated Financial	$387.41 million	2.54	$87.98 million	$3.06	10.53

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

Insider and Institutional Ownership

5.9% of Suncrest Bank shares are owned by institutional investors. Comparatively, 75.9% of Amalgamated Financial shares are owned by institutional investors. 0.9% of Amalgamated Financial 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.

Analyst Ratings

This is a summary of current ratings and recommmendations for Suncrest Bank and Amalgamated Financial, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Suncrest Bank	0	0	0	0	N/A
Amalgamated Financial	0	0	3	0	3.00

Amalgamated Financial has a consensus price target of $30.50, indicating a potential downside of 5.31%. Given Amalgamated Financial’s higher possible upside, analysts clearly believe Amalgamated Financial is more favorable than Suncrest Bank.

Risk and Volatility

Suncrest Bank has a beta of 0.88, suggesting that its stock price is 12% less volatile than the S&P 500. Comparatively, Amalgamated Financial has a beta of 0.94, suggesting that its stock price is 6% less volatile than the S&P 500.

Summary

Amalgamated Financial beats Suncrest Bank on 11 of the 13 factors compared between the two stocks.

About Suncrest Bank

Suncrest Bank engages in the provision of personal and commercial banking services. It provides checking, savings and certificates of deposits, lending, cash management, online and mobile banking, e-statements, remote deposit capture, financial calculators, and customer service center. It also offers agricultural real estate loans, production finance, equipment financing and leasing, development loans, long-term fixed rate, SBA and USDA loans, valley small business guaranteed loans, USDA B&I loans, farmer mac loans, and cal-cap loans. The company was founded on May 19, 2008 and is headquartered in Visalia, CA.

About Amalgamated Financial

Amalgamated Financial Corp. operates as the bank holding company for Amalgamated Bank that provides commercial and retail banking, investment management, and trust and custody services for commercial and retail customers in the United States. The company accepts various deposit products, including non-interest bearing accounts, interest-bearing demand products, savings accounts, money market accounts, NOW accounts, and certificates of deposit. It also provides various commercial loans comprising commercial and industrial, multifamily mortgage, and commercial real estate loans; residential mortgage loans; and retail loans, such as residential real estate, consumer solar, and consumer and other loans. In addition, the company offers online banking, bill payment, online cash management, and safe deposit box rental services; debit and ATM cards; and trust, custody, and investment management services comprising asset safekeeping, corporate actions, income collections, proxy, account transition, asset transfers, and conversion management services. Further, it provides investment products, such as funds spanning equity, fixed-income, real estate, and alternative investment products; and brokerage, asset management, and insurance products. Amalgamated Financial Corp. was founded in 1923 and is headquartered in New York, New York.