Malaga Financial (OTCMKTS:MLGF) versus First Bank (NASDAQ:FRBA) Critical Comparison

Malaga Financial (OTCMKTS:MLGF) and First Bank (NASDAQ:FRBA) 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.

Analyst Recommendations

This is a summary of recent ratings and target prices for Malaga Financial and First Bank, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Malaga Financial	0	0	0	0	N/A
First Bank	0	0	1	0	3.00

First Bank has a consensus target price of $18.00, suggesting a potential upside of 22.62%. Given First Bank’s higher probable upside, analysts plainly believe First Bank is more favorable than Malaga Financial.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
Malaga Financial	N/A	N/A	N/A
First Bank	14.48%	12.38%	1.30%

Earnings and Valuation

This table compares Malaga Financial and First Bank”s gross revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Malaga Financial	N/A	N/A	$22.98 million	$2.59	8.82
First Bank	$120.30 million	2.39	$20.90 million	$1.13	12.99

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

Volatility and Risk

Malaga Financial has a beta of 0.49, indicating that its stock price is 51% less volatile than the S&P 500. Comparatively, First Bank has a beta of 0.94, indicating that its stock price is 6% less volatile than the S&P 500.

Dividends

Malaga Financial pays an annual dividend of $1.00 per share and has a dividend yield of 4.4%. First Bank pays an annual dividend of $0.24 per share and has a dividend yield of 1.6%. Malaga Financial pays out 38.6% of its earnings in the form of a dividend. First Bank pays out 21.2% 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.

Insider & Institutional Ownership

1.1% of Malaga Financial shares are owned by institutional investors. Comparatively, 64.9% of First Bank shares are owned by institutional investors. 13.1% of First Bank 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.

Summary

First Bank beats Malaga Financial on 11 of the 14 factors compared between the two stocks.

About Malaga Financial

Malaga Financial Corporation operates as the holding company for Malaga Bank that provides various community banking products and services to personal and business customers. It offers checking, savings, NOW, and money market accounts, certificates of deposits, business banking, consumer, and demand deposits. The company also provides commercial real estate, single and multi-family residential mortgage, consumer, 14-unit investment property, construction, personal, and business loans; home equity lines of credit; and certificates of deposit. In addition, it offers coupon redemption, direct deposit, overdraft lines of credit, telephone transfers, U.S. savings bond redemption, and wire transfer services; and ATM and VISA debit cards, bank by mail, medallion signature guarantee, night depository, notary, safe deposit boxes, and trust deed note collection services. Further, the company provides online banking services, including bill payer, e-statements, and mobile banking services. The company was incorporated in 2002 and is headquartered in Palos Verdes Estates, California.

About First Bank

First Bank provides various banking products and services to small to mid-sized businesses and individuals. The company accepts various deposits, including non-interest-bearing demand deposits, interest bearing demand accounts, money market accounts, savings accounts, and certificates of deposit, as well as commercial checking accounts. It also offers various loan products comprising commercial and industrial loans, which include line of credit, inventory, equipment, and short-term working capital financing; commercial real estate loans, such as owner-occupied, investor, construction and development, and multi-family loans; residential real estate loans comprising residential mortgages, first and second lien home equity loans, and revolving lines of credit; and consumer and other loans consists of auto, personal, traditional installment, and other loans. The company also provides electronic banking services, including Internet and mobile banking, electronic bill payment, and banking by phone; ATM and debit cards, and wire and ACH transfer services; remote deposit capture; and cash management services, as well as engages in the capital markets activities. It operates full-service branches in Cinnaminson, Delanco, Denville, Ewing, Fairfield, Flemington, Hamilton, Lawrence, Monroe, Pennington, Randolph, Somerset, and Williamstown, New Jersey; Doylestown, Trevose, Warminster, and West Chester, Paoli, Malvern, Coventry, Devon, Lionville, and Glen Mills Pennsylvania; and Palm Beach, Florida. First Bank was incorporated in 2007 and is headquartered in Hamilton, New Jersey.