Comparing Southern First Bancshares (NASDAQ:SFST) & First Bancshares (NASDAQ:FBMS)

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

Analyst Ratings

This is a breakdown of current recommendations for First Bancshares and Southern First Bancshares, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
First Bancshares	0	2	2	0	2.50
Southern First Bancshares	0	0	1	0	3.00

First Bancshares presently has a consensus target price of $31.00, suggesting a potential upside of 23.90%. Southern First Bancshares has a consensus target price of $44.00, suggesting a potential upside of 58.33%. Given Southern First Bancshares’ stronger consensus rating and higher possible upside, analysts clearly believe Southern First Bancshares is more favorable than First Bancshares.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
First Bancshares	20.00%	9.73%	1.14%
Southern First Bancshares	6.69%	4.30%	0.33%

Earnings & Valuation

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

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
First Bancshares	$387.64 million	2.02	$75.46 million	$2.52	9.93
Southern First Bancshares	$187.46 million	1.21	$13.43 million	$1.64	16.95

First Bancshares has higher revenue and earnings than Southern First Bancshares. First Bancshares 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.

Volatility & Risk

First Bancshares has a beta of 0.9, indicating that its share price is 10% less volatile than the S&P 500. Comparatively, Southern First Bancshares has a beta of 0.82, indicating that its share price is 18% less volatile than the S&P 500.

Institutional and Insider Ownership

70.0% of First Bancshares shares are owned by institutional investors. Comparatively, 75.0% of Southern First Bancshares shares are owned by institutional investors. 3.5% of First Bancshares shares are owned by company insiders. Comparatively, 7.6% of Southern First Bancshares shares are owned 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.

Summary

First Bancshares beats Southern First Bancshares on 9 of the 14 factors compared between the two stocks.

About First Bancshares

The First Bancshares, Inc. operates as the bank holding company for The First Bank that provides general commercial and retail banking services. The company operates through three segments: Commercial/Retail Bank, Mortgage Banking Division, and Holding Company. It offers deposit services, including checking, NOW, and savings accounts; other time deposits, such as daily money market accounts and longer-term certificates of deposit; and individual retirement and health savings accounts. The company also provides commercial loans comprising secured and unsecured loans for working capital, business expansion, and purchase of equipment and machinery; consumer loans consisting of equity lines of credit, as well as secured and unsecured loans for financing automobiles, home improvements, education, and personal investments; and real estate construction and acquisition loans. In addition, it originates loans to purchase existing residential homes, construct new homes, and to refinance existing mortgages; and provides financial and wealth management services. Further, the company offers online internet banking services, automated teller machines, voice response telephone inquiry services, commercial sweep accounts, cash management services, safe deposit boxes, merchant services, mobile deposit, direct deposit of payroll and social security checks, automatic drafts for various accounts, and credit card services. It serves small to medium-sized businesses, professional concerns, individuals, associations, organizations, and governmental authorities. The company operates full-service banking and financial service offices, motor bank facility, and loan production offices in Mississippi, Alabama, Florida, Georgia, and Louisiana. The First Bancshares, Inc. was incorporated in 1995 and is headquartered in Hattiesburg, Mississippi.

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.