Critical Analysis: First Bancorp (NASDAQ:FBNC) and Capital City Bank Group (NASDAQ:CCBG)

Capital City Bank Group (NASDAQ:CCBG) and First Bancorp (NASDAQ:FBNC) 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, dividends, risk, institutional ownership, valuation, profitability and analyst recommendations.

Risk and Volatility

Capital City Bank Group has a beta of 0.53, indicating that its share price is 47% less volatile than the S&P 500. Comparatively, First Bancorp has a beta of 1.02, indicating that its share price is 2% more volatile than the S&P 500.

Profitability

This table compares Capital City Bank Group and First Bancorp’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Capital City Bank Group	19.42%	11.29%	1.21%
First Bancorp	17.98%	8.00%	0.93%

Valuation and Earnings

This table compares Capital City Bank Group and First Bancorp”s revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Capital City Bank Group	$252.68 million	2.57	$52.26 million	$3.05	12.57
First Bancorp	$375.65 million	5.04	$104.13 million	$2.48	18.45

First Bancorp has higher revenue and earnings than Capital City Bank Group. Capital City Bank Group is trading at a lower price-to-earnings ratio than First Bancorp, indicating that it is currently the more affordable of the two stocks.

Insider and Institutional Ownership

44.6% of Capital City Bank Group shares are owned by institutional investors. Comparatively, 68.4% of First Bancorp shares are owned by institutional investors. 19.4% of Capital City Bank Group shares are owned by insiders. Comparatively, 3.7% of First Bancorp shares are owned by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company will outperform the market over the long term.

Dividends

Capital City Bank Group pays an annual dividend of $0.92 per share and has a dividend yield of 2.4%. First Bancorp pays an annual dividend of $0.88 per share and has a dividend yield of 1.9%. Capital City Bank Group pays out 30.2% of its earnings in the form of a dividend. First Bancorp pays out 35.5% of its earnings in the form of a dividend. Both companies have healthy payout ratios and should be able to cover their dividend payments with earnings for the next several years. Capital City Bank Group is clearly the better dividend stock, given its higher yield and lower payout ratio.

Analyst Recommendations

This is a summary of current ratings for Capital City Bank Group and First Bancorp, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Capital City Bank Group	0	3	2	0	2.40
First Bancorp	0	0	1	0	3.00

Capital City Bank Group presently has a consensus target price of $35.80, suggesting a potential downside of 6.62%. First Bancorp has a consensus target price of $45.00, suggesting a potential downside of 1.64%. Given First Bancorp’s stronger consensus rating and higher probable upside, analysts plainly believe First Bancorp is more favorable than Capital City Bank Group.

About Capital City Bank Group

Capital City Bank Group, Inc. operates as the financial holding company for Capital City Bank that provides a range of banking- related services to individual and corporate clients. The company offers financing for commercial business properties, equipment, inventories, and accounts receivable, as well as commercial leasing and letters of credit; treasury management services; and merchant credit card transaction processing services. It also provides commercial and residential real estate lending products, as well as fixed and adjustable-rate residential mortgage loans; personal, automobile, boat/RV, and home equity loans; and credit card programs. In addition, the company offers institutional banking services, including customized checking and savings accounts, cash management systems, tax-exempt loans, lines of credit, and term loans to meet the needs of state and local governments, public schools and colleges, charities, membership, and not-for-profit associations. Further, it provides consumer banking services comprising checking accounts, savings programs, interactive/automated teller machines, debit/credit cards, night deposit services, safe deposit facilities, and online and mobile banking services. Additionally, the company provides asset management for individuals through agency, personal trust, IRA, and personal investment management accounts; and various retail securities products, such as the U.S. government bonds, tax-free municipal bonds, stocks, mutual funds, unit investment trusts, annuities, life insurance, and long-term health care, as well as business, estate, financial, insurance and business planning, tax planning, and asset protection advisory services. Capital City Bank Group, Inc. was founded in 1895 and is headquartered in Tallahassee, Florida.

About First Bancorp

First Bancorp operates as the bank holding company for First Bank that provides banking products and services for individuals and small to medium-sized businesses. The company accepts deposit products, such as checking, savings, and money market accounts, as well as time deposits, including certificate of deposits and individual retirement accounts. It also offers loans for a range of consumer and commercial purposes comprising loans for business, real estate, personal, home improvement, and automobiles, as well as residential mortgages and small business administration loans; and accounts receivable financing and factoring, inventory financing, and purchase order financing services. In addition, the company provides credit and debit cards, letter of credits, and safe deposit box rental services, as well as electronic funds transfer services consisting of wire transfers; and internet and mobile banking, cash management, bank-by-phone services, and remote deposit capture services. Further, it offers investment and insurance products, such as mutual funds, annuities, long-term care insurance, life insurance, and company retirement plans, as well as property and casualty insurance products; and financial planning services. The company was founded in 1934 and is headquartered in Southern Pines, North Carolina.