Head-To-Head Review: Farmers & Merchants Bank of Long Beach (OTCMKTS:FMBL) & Esquire Financial (NASDAQ:ESQ)

Farmers & Merchants Bank of Long Beach (OTCMKTS:FMBL) and Esquire Financial (NASDAQ:ESQ) are both small-cap finance companies, but which is the superior stock? We will compare the two businesses based on the strength of their valuation, profitability, institutional ownership, analyst recommendations, risk, earnings and dividends.

Insider and Institutional Ownership

7.6% of Farmers & Merchants Bank of Long Beach shares are held by institutional investors. Comparatively, 54.7% of Esquire Financial shares are held by institutional investors. 12.8% of Farmers & Merchants Bank of Long Beach shares are held by insiders. Comparatively, 18.9% of Esquire Financial shares are held by insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a company will outperform the market over the long term.

Analyst Recommendations

This is a summary of recent ratings and recommmendations for Farmers & Merchants Bank of Long Beach and Esquire Financial, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Farmers & Merchants Bank of Long Beach	0	0	0	0	0.00
Esquire Financial	0	1	1	1	3.00

Esquire Financial has a consensus price target of $71.67, indicating a potential downside of 8.24%. Given Esquire Financial’s stronger consensus rating and higher probable upside, analysts clearly believe Esquire Financial is more favorable than Farmers & Merchants Bank of Long Beach.

Profitability

This table compares Farmers & Merchants Bank of Long Beach and Esquire Financial’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Farmers & Merchants Bank of Long Beach	11.52%	3.95%	0.44%
Esquire Financial	31.38%	19.53%	2.47%

Risk & Volatility

Farmers & Merchants Bank of Long Beach has a beta of 0.43, suggesting that its share price is 57% less volatile than the S&P 500. Comparatively, Esquire Financial has a beta of 0.74, suggesting that its share price is 26% less volatile than the S&P 500.

Earnings & Valuation

This table compares Farmers & Merchants Bank of Long Beach and Esquire Financial”s top-line revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Farmers & Merchants Bank of Long Beach	$431.97 million	1.62	$70.01 million	$427.35	13.28
Esquire Financial	$120.71 million	5.38	$41.01 million	$4.97	15.71

Farmers & Merchants Bank of Long Beach has higher revenue and earnings than Esquire Financial. Farmers & Merchants Bank of Long Beach is trading at a lower price-to-earnings ratio than Esquire Financial, indicating that it is currently the more affordable of the two stocks.

Dividends

Farmers & Merchants Bank of Long Beach pays an annual dividend of $112.00 per share and has a dividend yield of 2.0%. Esquire Financial pays an annual dividend of $0.60 per share and has a dividend yield of 0.8%. Farmers & Merchants Bank of Long Beach pays out 26.2% of its earnings in the form of a dividend. Esquire Financial pays out 12.1% 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.

Summary

Esquire Financial beats Farmers & Merchants Bank of Long Beach on 13 of the 17 factors compared between the two stocks.

About Farmers & Merchants Bank of Long Beach

Farmers & Merchants Bank of Long Beach provides various banking products and services to individuals, professionals, and small to medium-sized businesses in Los Angeles, Orange, and Santa Barbara Counties. It offers checking, savings, Christmas club savings, health savings, market rate savings, and money market accounts; demand and time deposits; certificates of deposit; and individual retirement account. The company also provides personal, home, commercial real estate, real estate and construction, and commercial business loans, as well as lines of credit; financing for residential loans comprising single-family and multifamily loans; and credit and debit cards. In addition, it offers account management, receivables and payables, and risk management services; commercial lending services; and faith-based and healthcare banking services, as well as online and mobile banking services. Farmers & Merchants Bank of Long Beach was founded in 1907 and is headquartered in Long Beach, California.

About Esquire Financial

Esquire Financial Holdings, Inc. operates as the bank holding company for Esquire Bank, National Association that provides commercial banking products and services to legal industry and small businesses, and commercial and retail customers in the United States. The company offers checking, savings, money market, and time deposits, as well as certificates of deposit. It also provides commercial loans, such as short-term financing for inventory, receivables, the purchase of supplies, or other operating needs arising during the normal course of business, as well as loans to its qualified ISO customers; commercial lines of credit; consumer loans consisting of post-settlement consumer and structured settlement loans to plaintiffs and claimants, as well as loans to individuals for debt consolidation, medical expenses, living expenses, payment of outstanding bills, or other consumer needs; and real estate loans, such as multifamily, 1-4 family residential, commercial real estate, and construction loans, as well as merchant services. In addition, it offers cash management, cash sweep, online and mobile banking, individual retirement accounts, and working capital lines of credit. Esquire Financial Holdings, Inc. was founded in 2006 and is headquartered in Jericho, New York.