Comparing Southern First Bancshares (NASDAQ:SFST) & MetroCity Bankshares (NASDAQ:MCBS)

Southern First Bancshares (NASDAQ:SFST) and MetroCity Bankshares (NASDAQ:MCBS) 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, dividends, profitability, analyst recommendations, valuation, earnings and institutional ownership.

Institutional and Insider Ownership

75.0% of Southern First Bancshares shares are held by institutional investors. Comparatively, 25.3% of MetroCity Bankshares shares are held by institutional investors. 6.9% of Southern First Bancshares shares are held by company insiders. Comparatively, 27.5% of MetroCity Bankshares shares are held by company insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a company is poised for long-term growth.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
Southern First Bancshares	15.21%	9.81%	0.80%
MetroCity Bankshares	28.16%	15.72%	1.87%

Volatility and Risk

Southern First Bancshares has a beta of 0.68, meaning that its share price is 32% less volatile than the S&P 500. Comparatively, MetroCity Bankshares has a beta of 0.72, meaning that its share price is 28% less volatile than the S&P 500.

Analyst Recommendations

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

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Southern First Bancshares	0	1	2	0	2.67
MetroCity Bankshares	0	1	1	0	2.50

Southern First Bancshares presently has a consensus price target of $64.00, indicating a potential upside of 12.66%. MetroCity Bankshares has a consensus price target of $33.00, indicating a potential upside of 1.73%. Given Southern First Bancshares’ stronger consensus rating and higher possible upside, research analysts clearly believe Southern First Bancshares is more favorable than MetroCity Bankshares.

Earnings and Valuation

This table compares Southern First Bancshares and MetroCity Bankshares”s gross revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Southern First Bancshares	$224.62 million	2.09	$30.37 million	$4.28	13.27
MetroCity Bankshares	$246.01 million	3.78	$68.53 million	$2.77	11.71

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

Summary

MetroCity Bankshares 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 MetroCity Bankshares

MetroCity Bankshares, Inc. operates as the bank holding company for Metro City Bank that engages in the provision of banking products and services in the United States. It offers customary banking services, such as consumer and commercial checking accounts, savings, and money market accounts, as well as certificates of deposit. The company also provides commercial and consumer loans, including single family residential loans; construction and development, and owner and non-owner occupied commercial real estate loans; letters of credit; and commercial and industrial loans, residential mortgage loans, and SBA loans. In addition, it offers online banking services, which include access to account balances, online transfers, online bill payment, and electronic delivery of customer statements; mobile banking solutions, such as remote check deposit with mobile bill pay; and automated teller machines and telephone banking services. Further, it provides debit cards for checking customers, direct deposits, and cashier's checks; treasury management services, including wire transfer, automated clearing house, and stop payments services; and cash management deposit products, such as remote deposit capture, positive pay, zero balance accounts, and sweep accounts. The company was founded in 2006 and is headquartered in Atlanta, Georgia.