Comparing First National (NASDAQ:FXNC) and Southern First Bancshares (NASDAQ:SFST)

Southern First Bancshares (NASDAQ:SFST) and First National (NASDAQ:FXNC) are both small-cap finance companies, but which is the superior business? We will compare the two businesses based on the strength of their analyst recommendations, earnings, dividends, risk, institutional ownership, profitability and valuation.

Valuation and Earnings

This table compares Southern First Bancshares and First National”s 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	2.01	$15.53 million	$3.23	16.19
First National	$92.70 million	2.46	$6.97 million	$1.26	20.06

Southern First Bancshares has higher revenue and earnings than First National. Southern First Bancshares is trading at a lower price-to-earnings ratio than First National, indicating that it is currently the more affordable of the two stocks.

Profitability

This table compares Southern First Bancshares and First National’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%
First National	9.53%	11.34%	0.96%

Volatility and Risk

Southern First Bancshares has a beta of 0.74, indicating that its stock price is 26% less volatile than the S&P 500. Comparatively, First National has a beta of 0.49, indicating that its stock price is 51% less volatile than the S&P 500.

Analyst Recommendations

This is a breakdown of current ratings and price targets for Southern First Bancshares and First National, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Southern First Bancshares	0	2	1	0	2.33
First National	0	2	0	0	2.00

Southern First Bancshares presently has a consensus target price of $51.00, indicating a potential downside of 2.47%. First National has a consensus target price of $28.50, indicating a potential upside of 12.74%. Given First National’s higher possible upside, analysts plainly believe First National is more favorable than Southern First Bancshares.

Institutional and Insider Ownership

75.0% of Southern First Bancshares shares are owned by institutional investors. Comparatively, 33.9% of First National shares are owned by institutional investors. 7.1% of Southern First Bancshares shares are owned by company insiders. Comparatively, 14.3% of First National shares are owned by company insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a stock will outperform the market over the long term.

Summary

Southern First Bancshares beats First National 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 First National

First National Corporation operates as the bank holding company for First Bank that provides various commercial banking services to small and medium-sized businesses, individuals, estates, local governmental entities, and non-profit organizations in Virginia. The company's deposit products include checking, savings, money market, and individual retirement accounts, as well as certificates of deposit and treasury management solutions. Its loan products comprise construction loans, including residential, land acquisition, and development loans; 1-4 family residential real estate loans; and commercial real estate loans that are secured by commercial real estate, including multi-family residential buildings, office and retail buildings, hotels, industrial buildings, and religious facilities. In addition, the company's loan products include commercial and industrial loans that are secured by business assets, such as accounts receivable, equipment, and inventory; home equity loans; and secured and unsecured consumer loans, such as lines of credit, automobile loans, deposit account loans, and installment and demand loans. Further, it provides wealth management services, including estate planning, investment management of assets, trustee under an agreement, trustee under a will, and estate settlement. Additionally, the company offers title insurance and investment services; and holds other real estate owned and office sites, as well as provides internet and mobile banking, remote deposit capture, and other traditional banking services. First National Corporation was founded in 1907 and is headquartered in Strasburg, Virginia.