Financial Contrast: Bank of N.T. Butterfield & Son (NYSE:NTB) versus Avidbank (AVBH)

Avidbank (OTCMKTS:AVBH) and Bank of N.T. Butterfield & Son (NYSE:NTB) are both small-cap finance companies, but which is the better investment? We will compare the two businesses based on the strength of their dividends, valuation, profitability, earnings, risk, institutional ownership and analyst recommendations.

Analyst Recommendations

This is a breakdown of current ratings and price targets for Avidbank and Bank of N.T. Butterfield & Son, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Avidbank 0 0 0 0 N/A
Bank of N.T. Butterfield & Son 0 2 4 0 2.67

Bank of N.T. Butterfield & Son has a consensus price target of $49.00, suggesting a potential upside of 48.94%. Given Bank of N.T. Butterfield & Son’s higher possible upside, analysts clearly believe Bank of N.T. Butterfield & Son is more favorable than Avidbank.

Dividends

Bank of N.T. Butterfield & Son pays an annual dividend of $0.38 per share and has a dividend yield of 1.2%. Avidbank does not pay a dividend. Bank of N.T. Butterfield & Son pays out 13.3% of its earnings in the form of a dividend.

Valuation and Earnings

This table compares Avidbank and Bank of N.T. Butterfield & Son’s top-line revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Avidbank $35.24 million 3.48 $5.65 million N/A N/A
Bank of N.T. Butterfield & Son $468.15 million 3.84 $153.25 million $2.86 11.50

Bank of N.T. Butterfield & Son has higher revenue and earnings than Avidbank.

Profitability

This table compares Avidbank and Bank of N.T. Butterfield & Son’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Avidbank 20.75% 10.84% 1.21%
Bank of N.T. Butterfield & Son 35.65% 22.33% 1.74%

Volatility and Risk

Avidbank has a beta of 0.51, suggesting that its stock price is 49% less volatile than the S&P 500. Comparatively, Bank of N.T. Butterfield & Son has a beta of 1.84, suggesting that its stock price is 84% more volatile than the S&P 500.

Institutional and Insider Ownership

8.8% of Avidbank shares are held by institutional investors. Comparatively, 74.6% of Bank of N.T. Butterfield & Son shares are held by institutional investors. 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.

Summary

Bank of N.T. Butterfield & Son beats Avidbank on 11 of the 13 factors compared between the two stocks.

Avidbank Company Profile

Avidbank Holdings, Inc. operates as the bank holding company for Avidbank that provides financial products and services to small and middle-market businesses, professionals, and individuals in the San Mateo, San Francisco, and Santa Clara counties. The company offers business and personal deposit products, such as checking account, money market account, saving account, and certificates of deposit. Its personal lending products include secured and unsecured lines of credit, home equity lines of credit, remodel and new home construction loans, and term loans; corporate banking offers working capital lines of credit, equipment loans, acquisition financing, shareholder buyouts, ESOP loans, and owner-occupied real estate loans; and commercial real estate lending offers permanent loans and bridge financing products. The company provides financing solutions, such as technology and asset-based lending, and sponsor finance. The company also offers construction lending products, including land acquisition loans, pre-development loans, construction spec SFD, owner-occupied SFD, condominiums, subdivision, unsecured business lines, real estate bridge loans, and RLOC – real estate secured loans. In addition, it provides various services, such as automated clearing house payments and collections, bill pay, wire transfer, lockbox, merchant, remote deposit capture, ATM/debit cards, credit cards, business courier, cash management, and notary services. Avidbank Holdings, Inc. was founded in 2003 and is headquartered in San Jose, California.

Bank of N.T. Butterfield & Son Company Profile

The Bank of N.T. Butterfield & Son Limited provides a range of community, commercial, and private banking services to individuals and small to medium-sized businesses. It accepts retail and corporate checking, savings, term, and non-interest bearing deposits, as well as certificates of deposits. The company's lending portfolio includes residential mortgage lending, automobile financing, consumer financing, credit cards, overdraft facilities, commercial real estate lending, and commercial and industrial loans. In addition, it offers investment products and services; and cash and liquidity management, foreign exchange, custody administration, and settlement services. Further, the company provides personal and property/auto insurance products; letters of credit; and cash management, payroll, remote banking, money market, advisory, brokerage, trust, estate, company management, private banking, administered bank services, fiduciary, and ancillary services. Additionally, it offers debit cards; automated teller machines (ATMs); personal and business deposit, merchant acquiring, and mobile/online banking services. The company operates through offices in the Cayman Islands, Guernsey, the United Kingdom, The Bahamas, and Switzerland, as well as through four branch locations in Bermuda and three branch locations in the Cayman Islands. The Bank of N.T. Butterfield & Son Limited was founded in 1858 and is headquartered in Hamilton, Bermuda.

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