Primis Financial (NASDAQ:FRST) versus Preferred Bank (NASDAQ:PFBC) Critical Survey

Preferred Bank (NASDAQ:PFBC) and Primis Financial (NASDAQ:FRST) are both small-cap finance companies, but which is the superior business? We will contrast the two businesses based on the strength of their institutional ownership, valuation, dividends, analyst recommendations, earnings, profitability and risk.

Institutional and Insider Ownership

72.8% of Preferred Bank shares are owned by institutional investors. Comparatively, 75.0% of Primis Financial shares are owned by institutional investors. 10.6% of Primis Financial shares are owned by company insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a stock is poised for long-term growth.

Risk and Volatility

Preferred Bank has a beta of 0.94, meaning that its share price is 6% less volatile than the S&P 500. Comparatively, Primis Financial has a beta of 0.75, meaning that its share price is 25% less volatile than the S&P 500.

Analyst Ratings

This is a breakdown of current recommendations for Preferred Bank and Primis Financial, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Preferred Bank	0	0	2	0	3.00
Primis Financial	0	0	1	0	3.00

Preferred Bank presently has a consensus price target of $99.50, suggesting a potential upside of 17.84%. Primis Financial has a consensus price target of $14.00, suggesting a potential upside of 25.00%. Given Primis Financial’s higher possible upside, analysts plainly believe Primis Financial is more favorable than Preferred Bank.

Profitability

This table compares Preferred Bank and Primis Financial’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Preferred Bank	26.20%	19.01%	2.01%
Primis Financial	7.31%	4.63%	0.47%

Dividends

Preferred Bank pays an annual dividend of $2.80 per share and has a dividend yield of 3.3%. Primis Financial pays an annual dividend of $0.40 per share and has a dividend yield of 3.6%. Preferred Bank pays out 28.1% of its earnings in the form of a dividend.

Valuation & Earnings

This table compares Preferred Bank and Primis Financial”s revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Preferred Bank	$285.16 million	4.29	$150.04 million	$9.98	8.50
Primis Financial	$244.23 million	1.14	-$7.83 million	N/A	N/A

Preferred Bank has higher revenue and earnings than Primis Financial.

Summary

Preferred Bank beats Primis Financial on 8 of the 13 factors compared between the two stocks.

About Preferred Bank

Preferred Bank provides various commercial banking products and services to small and mid-sized businesses and their owners, entrepreneurs, real estate developers and investors, professionals, and high net worth individuals. The company accepts checking, savings, and money market deposit accounts; fixed-rate and fixed maturity retail, and non-retail certificates of deposit; and individual retirement accounts. It also provides real estate mortgage loans that are secured by retail, industrial, office, special purpose, and residential single and multi-family properties; real estate construction loans; commercial loans comprising lines of credit for working capital, term loans for capital expenditures, and commercial and stand-by letters of credit; and small business administration loans. In addition, the company offers trade finance services, including commercial and export letters of credit, import lines of credit, documentary collections, international wire transfers, acceptances/trust receipt financing products, export financing, and bills purchase programs. Further, it provides cash management services; and internet, mobile, and tablet banking services. The company operates through full-service branch offices in the California counties of Los Angeles, Orange and San Francisco; Flushing, New York; Houston suburb of Sugar Land, Texas; and a satellite office in Manhattan, New York. The company was incorporated in 1991 and is headquartered in Los Angeles, California.

About Primis Financial

Primis Financial Corp. operates as the bank holding company for Primis Bank that provides a range of financial services to individuals and small and medium sized businesses in the United States. Its deposit products include checking, NOW, savings, and money market accounts, as well as certificates of deposits. The company also provides commercial business and real estate, construction, secured asset based, small business administration, mortgage warehouse lending products, as well as financing for medical, dental, and veterinary businesses; residential mortgage, trust mortgage, home equity lines of credit, secured and unsecured personal, and consumer loans, as well as life insurance premium financing and demand loans. It also offers cash management services comprising investment/sweep, zero balance, and controlled disbursement accounts; and wire transfer, employer/payroll processing, night depository, depository transfer, merchant, ACH origination, and remote deposit capture services. In addition, the company provides debit cards, ATM services, notary services, and mobile and online banking. It operates full-service branches in Virginia and Maryland. The company was formerly known as Southern National Bancorp of Virginia, Inc. and changed its name to Primis Financial Corp. Primis Financial Corp. was founded in 2004 and is based in McLean, Virginia.