Critical Survey: FinWise Bancorp (NASDAQ:FINW) and Red River Bancshares (NASDAQ:RRBI)

Red River Bancshares (NASDAQ:RRBI) and FinWise Bancorp (NASDAQ:FINW) 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.

Volatility & Risk

Red River Bancshares has a beta of 0.51, meaning that its share price is 49% less volatile than the S&P 500. Comparatively, FinWise Bancorp has a beta of 0.82, meaning that its share price is 18% less volatile than the S&P 500.

Profitability

This table compares Red River Bancshares and FinWise Bancorp’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Red River Bancshares	24.44%	12.14%	1.28%
FinWise Bancorp	12.13%	8.31%	1.82%

Earnings & Valuation

This table compares Red River Bancshares and FinWise Bancorp”s gross revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Red River Bancshares	$157.67 million	2.94	$34.24 million	$6.03	11.70
FinWise Bancorp	$96.84 million	2.54	$12.74 million	$1.06	17.07

Red River Bancshares has higher revenue and earnings than FinWise Bancorp. Red River Bancshares is trading at a lower price-to-earnings ratio than FinWise Bancorp, indicating that it is currently the more affordable of the two stocks.

Institutional & Insider Ownership

27.6% of Red River Bancshares shares are held by institutional investors. Comparatively, 35.4% of FinWise Bancorp shares are held by institutional investors. 15.9% of Red River Bancshares shares are held by company insiders. Comparatively, 21.3% of FinWise Bancorp shares are held by company insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company is poised for long-term growth.

Analyst Recommendations

This is a summary of recent ratings and target prices for Red River Bancshares and FinWise Bancorp, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Red River Bancshares	0	1	2	0	2.67
FinWise Bancorp	0	1	4	0	2.80

Red River Bancshares presently has a consensus target price of $67.00, suggesting a potential downside of 5.02%. FinWise Bancorp has a consensus target price of $21.75, suggesting a potential upside of 20.23%. Given FinWise Bancorp’s stronger consensus rating and higher probable upside, analysts plainly believe FinWise Bancorp is more favorable than Red River Bancshares.

Summary

FinWise Bancorp beats Red River Bancshares on 8 of the 14 factors compared between the two stocks.

About Red River Bancshares

Red River Bancshares, Inc. operates as a bank holding company for Red River Bank that provides banking products and services to commercial and retail customers in Louisiana. The company provides various deposit products, including checking, saving, money market accounts, and time deposits. It offers commercial real estate loans; one-to-four family mortgage loans and home equity lines of credit; construction and development loans; commercial and industrial loans; small business administration paycheck protection program loans; tax-exempt loans; consumer loans to individuals for personal, family, and household purposes, including secured and unsecured installment and term loans; home mortgage loans; and lines of credit and standby letters of credit. In addition, the company provides treasury management, private banking, and brokerage; investment advisory, financial planning, and a suite of retirement plans; debit and credit cards, direct deposits, cashier's checks, and wire transfer services; online banking services, including access to account balances, online transfers, online bill payment, and electronic delivery of customer statements; and banking services in person, through ATMs, drive-through facilities, night deposits, telephone, mail, mobile banking, and remote deposits. Red River Bancshares, Inc. was incorporated in 1998 and is headquartered in Alexandria, Louisiana.

About FinWise Bancorp

FinWise Bancorp operates as the bank holding company for FinWise Bank that provides various banking products and services to individual and corporate customers in Utah. The company offers various deposit products, including interest and noninterest bearing demand accounts, health savings account demand deposits, NOW and money market accounts, and checking and savings accounts, as well as time deposits and certificates of deposits. It also provides loans, including consumer, small business administration, commercial, commercial real estate, and residential real estate loans. In addition, the company offers debit cards, remote deposit capture, online banking, mobile banking, and direct deposit services; and business accounts and cash management services, such as business checking and savings accounts, and treasury services. FinWise Bancorp was founded in 1999 and is headquartered in Murray, Utah.