Critical Analysis: Southern First Bancshares (NASDAQ:SFST) vs. Meridian (NASDAQ:MRBK)


Southern First Bank Shares (NASDAQ:SFSTGet a rating) and meridian (NASDAQ: MRBKGet a rating) are both small-cap finance companies, but which business is superior? We’ll compare the two companies based on earnings strength, profitability, analyst recommendations, institutional ownership, risk, valuation and dividends.

Valuation and benefits

This table compares the revenue, earnings per share (EPS) and valuation of Southern First Bancshares and Meridian.

Gross revenue Price/sales ratio Net revenue Earnings per share Price/earnings ratio
Southern First Bancshares $110.27 million 3.24 $46.71 million $5.51 8.12
Meridian $159.51 million 1.09 $35.58 million $4.97 5.70

Southern First Bancshares has higher earnings, but lower earnings than Meridian. Meridian trades at a lower price-to-earnings ratio than Southern First Bancshares, indicating that it is currently the more affordable of the two stocks.

Insider and Institutional Ownership

83.9% of Southern First Bancshares shares are held by institutional investors. By comparison, 57.0% of Meridian’s shares are held by institutional investors. 7.3% of Southern First Bancshares shares are held by insiders. By comparison, 13.4% of Meridian’s stock is held by insiders. Strong institutional ownership indicates that hedge funds, endowments, and large fund managers believe a stock is poised for long-term growth.

Risk and Volatility

Southern First Bancshares has a beta of 0.91, suggesting its stock price is 9% less volatile than the S&P 500. By comparison, Meridian has a beta of 0.5, suggesting its stock price is 50% less volatile than the S&P 500.

Analyst Notes

This is a summary of current recommendations and price targets for Southern First Bancshares and Meridian, as provided by MarketBeat.com.

Sales Ratings Hold odds Buy reviews Strong buy odds Rating
Southern First Bancshares 0 0 0 0 N / A
Meridian 0 0 2 0 3.00

Meridian has a consensus price target of $45.00, indicating a potential upside of 58.95%. Given Meridian’s possible higher upside, analysts clearly think Meridian is more favorable than Southern First Bancshares.

Profitability

This table compares the net margins, return on equity and return on assets of Southern First Bancshares and Meridian.

Net margins Return on equity return on assets
Southern First Bancshares 40.68% 16.51% 1.55%
Meridian 21.19% 19.52% 1.76%

Summary

Southern First Bancshares beats Meridian on 7 out of 13 factors compared between the two stocks.

About Southern First Bancshares

(Get a rating)

Southern First Bancshares, Inc. operates as a banking holding company for Southern First Bank which provides various banking products and services to the general public in South Carolina, North Carolina and Georgia. It operates through three segments: Commercial and Retail Banking, Mortgage Banking and Corporate Operations. The Company accepts various deposit products, including checking accounts, business checking accounts and savings accounts, as well as other term deposits, including daily money market accounts and long-term certificates of deposit. Its loan portfolio includes commercial real estate loans; real estate construction loans; business enterprise loans for various industries, such as manufacturing, service industry and professional services fields; consumer real estate loans 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 banking services, such as internet banking, cash management, safe deposit boxes, direct deposit, automatic drafts, bill payment and mobile banking. It operates through eight retail offices located in Greenville, Charleston and Columbia; three retail offices located in the Raleigh, Greensboro and Charlotte markets; and a retail office located in Atlanta. The company was incorporated in 1999 and is headquartered in Greenville, South Carolina.

About Meridian

(Get a rating)

Meridian logoMeridian Corporation operates as the holding company of Meridian Bank which provides commercial banking products and services in Pennsylvania, New Jersey, Delaware and Maryland. The Company offers various deposit products, such as interest-free current accounts, current accounts, savings accounts, money market accounts and term deposits. It also provides commercial and industrial loans including commercial lines of credit, term loans, small business loans, leases and national credit shares; commercial real estate and loans for the development and construction of land for residential and commercial projects; and consumer and home equity lending, private banking, merchant services, and land titles and settlements. In addition, the company manages and grants mortgage loans for 1 to 4 family dwellings; and provides real estate holding, investment advisory and equipment rental services. It operates through a network of 6 full-service branches and 19 other offices. The company was founded in 2004 and is based in Malvern, Pennsylvania.



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