Southern First Bancshares (NASDAQ:SFST) and Financial Institutions (NASDAQ:FISI) Head-To-Head Review

Southern First Bancshares (NASDAQ:SFST) and Financial Institutions (NASDAQ:FISI) are both small-cap finance companies, but which is the superior business? We will compare the two companies based on the strength of their earnings, institutional ownership, profitability, valuation, analyst recommendations, risk and dividends.

Profitability

This table compares Southern First Bancshares and Financial Institutions’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Southern First Bancshares	7.16%	4.41%	0.34%
Financial Institutions	15.03%	12.24%	0.82%

Earnings & Valuation

This table compares Southern First Bancshares and Financial Institutions’ gross revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Southern First Bancshares	$187.46 million	1.26	$13.43 million	$1.66	17.47
Financial Institutions	$212.18 million	1.26	$50.26 million	$3.16	5.49

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

Insider and Institutional Ownership

75.0% of Southern First Bancshares shares are held by institutional investors. Comparatively, 60.5% of Financial Institutions shares are held by institutional investors. 7.6% of Southern First Bancshares shares are held by company insiders. Comparatively, 2.3% of Financial Institutions shares are held by company insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a stock is poised for long-term growth.

Risk & Volatility

Southern First Bancshares has a beta of 0.78, suggesting that its share price is 22% less volatile than the S&P 500. Comparatively, Financial Institutions has a beta of 0.87, suggesting that its share price is 13% less volatile than the S&P 500.

Analyst Recommendations

This is a breakdown of recent ratings for Southern First Bancshares and Financial Institutions, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Southern First Bancshares	0	0	1	0	3.00
Financial Institutions	0	3	0	0	2.00

Southern First Bancshares currently has a consensus target price of $44.00, suggesting a potential upside of 51.72%. Financial Institutions has a consensus target price of $20.67, suggesting a potential upside of 19.05%. Given Southern First Bancshares’ stronger consensus rating and higher probable upside, equities analysts clearly believe Southern First Bancshares is more favorable than Financial Institutions.

Summary

Financial Institutions beats Southern First Bancshares on 8 of the 14 factors compared between the two stocks.

About Southern First Bancshares

Southern First Bancshares, Inc. operates as the bank holding company for Southern First Bank that provides commercial, consumer, and mortgage loans to the general public in South Carolina, North Carolina, and Georgia. The company accepts various deposit products that include checking accounts, commercial checking accounts, and savings accounts, as well as other time deposits, including daily money market accounts and long-term certificates of deposit. Its loan portfolio comprises commercial real estate loans; construction real estate loans; commercial business loans for various lines of businesses, such as the manufacturing, service industry, and professional service areas; consumer real estate and home equity loans; and other consumer loans, including secured and unsecured installment loans and revolving lines of credit. In addition, the company provides other bank services, such as internet banking, cash management, safe deposit boxes, direct deposit, automatic drafts, bill payment, and mobile banking services. Southern First Bancshares, Inc. was incorporated in 1999 and is headquartered in Greenville, South Carolina.

About Financial Institutions

Financial Institutions, Inc. operates as a holding company for the Five Star Bank, a chartered bank that provides banking and financial services to individuals, municipalities, and businesses in New York. The company provides checking and savings account programs, including money market accounts, certificates of deposit, sweep investments, and individual retirement and other qualified plan accounts, as well as NOW accounts. Its loan products include term loans and lines of credit; short and medium-term commercial loans for working capital, business expansion, and purchase of equipment; commercial business loans to the agricultural industry; commercial mortgage loans; one-to-four family residential mortgage loans, home improvement loans, closed-end home equity loans, and home equity lines of credit; and consumer loans, such as automobile, secured installment, and personal loans. The company offers personal insurance products, including automobile, homeowners, boat, recreational vehicle, landlord, and umbrella coverage; commercial insurance comprising property, liability, automobile, inland marine, workers compensation, bonds, crop, and umbrella insurance products; and financial services, such as life and disability insurance, medicare supplements, long-term care, annuities, mutual funds, and retirement programs. In addition, it offers customized investment advisory, wealth management, investment consulting, and retirement plan services, as well as operates a real estate investment trust that holds residential mortgages and commercial real estate loans. Financial Institutions, Inc. was founded in 1817 and is headquartered in Warsaw, New York.