Analyzing Pacific Mercantile Bancorp (PMBC) and Its Rivals

Pacific Mercantile Bancorp (NASDAQ: PMBC) is one of 143 public companies in the “National commercial banks” industry, but how does it contrast to its competitors? We will compare Pacific Mercantile Bancorp to similar businesses based on the strength of its institutional ownership, analyst recommendations, risk, profitability, earnings, dividends and valuation.

Institutional & Insider Ownership

75.0% of Pacific Mercantile Bancorp shares are held by institutional investors. Comparatively, 51.9% of shares of all “National commercial banks” companies are held by institutional investors. 4.7% of Pacific Mercantile Bancorp shares are held by company insiders. Comparatively, 9.2% of shares of all “National commercial banks” companies are held by company 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.

Profitability

This table compares Pacific Mercantile Bancorp and its competitors’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Pacific Mercantile Bancorp 3.51% 1.65% 0.17%
Pacific Mercantile Bancorp Competitors 16.12% 8.06% 0.42%

Analyst Recommendations

This is a breakdown of recent ratings and target prices for Pacific Mercantile Bancorp and its competitors, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Pacific Mercantile Bancorp 0 0 0 0 N/A
Pacific Mercantile Bancorp Competitors 2462 7308 5928 297 2.25

As a group, “National commercial banks” companies have a potential upside of 42.74%. Given Pacific Mercantile Bancorp’s competitors higher probable upside, analysts clearly believe Pacific Mercantile Bancorp has less favorable growth aspects than its competitors.

Volatility and Risk

Pacific Mercantile Bancorp has a beta of 0.66, meaning that its stock price is 34% less volatile than the S&P 500. Comparatively, Pacific Mercantile Bancorp’s competitors have a beta of 1.08, meaning that their average stock price is 8% more volatile than the S&P 500.

Valuation & Earnings

This table compares Pacific Mercantile Bancorp and its competitors gross revenue, earnings per share (EPS) and valuation.

Gross Revenue Net Income Price/Earnings Ratio
Pacific Mercantile Bancorp $71.26 million $5.68 million 14.17
Pacific Mercantile Bancorp Competitors $7.82 billion $1.73 billion 7.90

Pacific Mercantile Bancorp’s competitors have higher revenue and earnings than Pacific Mercantile Bancorp. Pacific Mercantile Bancorp is trading at a higher price-to-earnings ratio than its competitors, indicating that it is currently more expensive than other companies in its industry.

Summary

Pacific Mercantile Bancorp competitors beat Pacific Mercantile Bancorp on 8 of the 10 factors compared.

About Pacific Mercantile Bancorp

Pacific Mercantile Bancorp operates as the holding company for Pacific Mercantile Bank that provides a range of commercial banking products and services to small and medium-size businesses, professional firms, and individuals in Southern California, the United States. The company's deposit products include checking accounts, interest-bearing term deposit accounts, savings and money market deposits, and time deposits. It also offers various loan products, such as commercial loans and credit lines, accounts receivable and inventory financing, small business administration guaranteed business loans, owner-occupied commercial real estate loans, working capital lines of credit and asset based lending, growth capital loans, equipment financing, letters of credit, and corporate credit cards. In addition, the company provides cash and treasury management solutions, automated clearinghouse payment and wire solutions, fraud protection services, remote deposit capture services, courier services, and online banking services; and letters of credit and import/export financing services. As of March 6, 2019, it operated seven locations in Orange, Los Angeles, San Diego, and San Bernardino counties, Southern California. The company was founded in 1998 and is based in Costa Mesa, California.

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