Reviewing Bank7 (NASDAQ:BSVN) and Southern First Bancshares (NASDAQ:SFST)

Southern First Bancshares (NASDAQ:SFST) and Bank7 (NASDAQ:BSVN) are both small-cap finance companies, but which is the better investment? We will compare the two businesses based on the strength of their analyst recommendations, earnings, risk, dividends, profitability, institutional ownership and valuation.

Institutional & Insider Ownership

75.0% of Southern First Bancshares shares are held by institutional investors. Comparatively, 23.5% of Bank7 shares are held by institutional investors. 7.1% of Southern First Bancshares shares are held by insiders. Comparatively, 41.9% of Bank7 shares are held by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a stock is poised for long-term growth.

Analyst Ratings

This is a summary of recent ratings and target prices for Southern First Bancshares and Bank7, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Southern First Bancshares	0	2	1	0	2.33
Bank7	0	1	3	0	2.75

Southern First Bancshares currently has a consensus target price of $64.00, indicating a potential upside of 9.07%. Bank7 has a consensus target price of $54.00, indicating a potential upside of 20.05%. Given Bank7’s stronger consensus rating and higher possible upside, analysts clearly believe Bank7 is more favorable than Southern First Bancshares.

Earnings and Valuation

This table compares Southern First Bancshares and Bank7″s top-line revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Southern First Bancshares	$224.62 million	2.15	$30.37 million	$3.74	15.69
Bank7	$137.26 million	3.10	$43.07 million	$4.49	10.02

Bank7 has lower revenue, but higher earnings than Southern First Bancshares. Bank7 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.

Profitability

This table compares Southern First Bancshares and Bank7’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Southern First Bancshares	13.52%	8.76%	0.70%
Bank7	31.38%	18.58%	2.34%

Volatility and Risk

Southern First Bancshares has a beta of 0.77, suggesting that its stock price is 23% less volatile than the S&P 500. Comparatively, Bank7 has a beta of 0.94, suggesting that its stock price is 6% less volatile than the S&P 500.

Summary

Bank7 beats Southern First Bancshares on 11 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 Bank7

Bank7 Corp. operates as a bank holding company for Bank7 that provides banking and financial services to individual and corporate customers. It offers commercial deposit, commercial checking, money market, and other deposit accounts; and retail deposit services, such as certificates of deposit, money market accounts, checking accounts, negotiable order of withdrawal accounts, savings accounts, and automated teller machine access. The company also provides commercial real estate, hospitality, energy, and commercial and industrial lending services; consumer lending services to individuals for personal and household purposes comprising residential real estate loans and mortgage banking services, personal lines of credit, loans for the purchase of automobiles, and other installment loans, as well as secured and unsecured term loans and home improvement loans. It operates through a network of full-service branches in Oklahoma, the Dallas/Fort Worth, Texas metropolitan area, and Kansas. The company was formerly known as Haines Financial Corp. Bank7 Corp. was founded in 1901 and is headquartered in Oklahoma City, Oklahoma.