Towne Bank (NASDAQ:TOWN) versus Southern First Bancshares (NASDAQ:SFST) Head to Head Analysis

Southern First Bancshares (NASDAQ:SFST) and Towne Bank (NASDAQ:TOWN) are both finance companies, but which is the superior investment? We will compare the two companies based on the strength of their profitability, valuation, analyst recommendations, dividends, institutional ownership, risk and earnings.

Volatility & Risk

Southern First Bancshares has a beta of 0.76, meaning that its share price is 24% less volatile than the S&P 500. Comparatively, Towne Bank has a beta of 0.79, meaning that its share price is 21% less volatile than the S&P 500.

Insider and Institutional Ownership

75.0% of Southern First Bancshares shares are held by institutional investors. Comparatively, 56.0% of Towne Bank shares are held by institutional investors. 7.1% of Southern First Bancshares shares are held by company insiders. Comparatively, 8.1% of Towne Bank shares are held by company insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a company is poised for long-term growth.

Profitability

This table compares Southern First Bancshares and Towne Bank’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Southern First Bancshares	11.83%	7.63%	0.61%
Towne Bank	15.69%	9.64%	1.20%

Valuation & Earnings

This table compares Southern First Bancshares and Towne Bank”s top-line revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Southern First Bancshares	$213.35 million	2.03	$15.53 million	$3.23	16.35
Towne Bank	$1.03 billion	2.46	$161.76 million	$2.24	15.04

Towne Bank has higher revenue and earnings than Southern First Bancshares. Towne Bank 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.

Analyst Ratings

This is a breakdown of recent ratings and price targets for Southern First Bancshares and Towne Bank, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Southern First Bancshares	0	1	1	1	3.00
Towne Bank	0	1	2	0	2.67

Southern First Bancshares currently has a consensus target price of $51.00, indicating a potential downside of 3.43%. Towne Bank has a consensus target price of $41.00, indicating a potential upside of 21.70%. Given Towne Bank’s higher probable upside, analysts plainly believe Towne Bank is more favorable than Southern First Bancshares.

Summary

Towne Bank beats Southern First Bancshares on 10 of the 15 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 Towne Bank

TowneBank provides retail and commercial banking services for individuals, commercial enterprises, and professionals. The company operates through three segments: Banking, Realty, and Insurance. It accepts various deposits, including demand deposits, savings accounts, money rate savings, certificates of deposit, and individual retirement accounts. The company also offers secured and unsecured personal loans for financing automobiles, home improvements, education, and personal investments; commercial loans for working capital, business expansion, and equipment and machinery purchases; and mortgage loans, as well as real estate acquisition, development, and construction loans. In addition, it provides other services, such as safe deposit boxes, treasury management services, direct deposit of payroll and social security checks, and automatic drafts for various accounts, as well as online, mobile, and on-call banking services. Further, the company offers documentation services to accomplish tax deferral to investors; investment and asset management services; commercial mortgage brokerage services; and other financial services, such as financial, retirement, and estate planning services, as well as assistance on various investment options comprising alternative investments, annuities, margin accounts, convertible bonds, and pension and profit-sharing plans. Additionally, it provides residential real estate, relocation, property management, vacation rentals, and title and settlement services; and originates residential mortgage loans. The company also offers life, property, casualty, and vehicle insurance services; and employee benefit programs, such as health, dental, vision, and disability insurance. It operates in Richmond, Virginia, the Greater Hampton Roads region in southeastern Virginia, northeastern North Carolina, Raleigh, Charlotte, Greensboro, and Greenville, North Carolina. TowneBank was incorporated in 1998 and is based in Portsmouth, Virginia.