Analyzing Texas Community Bancshares (NASDAQ:TCBS) and Southern First Bancshares (NASDAQ:SFST)

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

Insider & Institutional Ownership

75.0% of Southern First Bancshares shares are owned by institutional investors. Comparatively, 15.8% of Texas Community Bancshares shares are owned by institutional investors. 6.9% of Southern First Bancshares shares are owned by company insiders. Comparatively, 15.3% of Texas Community Bancshares shares are owned by company insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a stock is poised for long-term growth.

Earnings & Valuation

This table compares Southern First Bancshares and Texas Community Bancshares”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	2.63	$30.37 million	$4.28	14.60
Texas Community Bancshares	$25.57 million	2.03	$2.84 million	$1.09	16.47

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

Volatility & Risk

Southern First Bancshares has a beta of 0.67, suggesting that its stock price is 33% less volatile than the S&P 500. Comparatively, Texas Community Bancshares has a beta of -0.03, suggesting that its stock price is 103% less volatile than the S&P 500.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
Southern First Bancshares	15.21%	9.65%	0.79%
Texas Community Bancshares	11.79%	5.66%	0.70%

Analyst Ratings

This is a summary of recent recommendations and price targets for Southern First Bancshares and Texas Community Bancshares, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Southern First Bancshares	0	1	2	0	2.67
Texas Community Bancshares	0	1	0	0	2.00

Southern First Bancshares presently has a consensus target price of $64.00, suggesting a potential upside of 2.42%. Given Southern First Bancshares’ stronger consensus rating and higher possible upside, research analysts clearly believe Southern First Bancshares is more favorable than Texas Community Bancshares.

Summary

Southern First Bancshares beats Texas Community Bancshares on 12 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 Texas Community Bancshares

Texas Community Bancshares, Inc. operates as the bank holding company for Mineola Community Bank, S.S.B. that provides loans and banking services to consumers and commercial customers in Mineola, Texas and the surrounding area, and the Dallas Fort Worth Metroplex. It generates a selection of deposit accounts, including savings accounts, checking accounts, certificates of deposit, and individual retirement accounts. The company also originates primarily one- to four-family residential mortgage loans, commercial real estate loans, and construction and land loans; and car, boat, share, unsecured loans, etc., as well as agricultural loans, commercial loans, and consumer and other loans. In addition, it invests in securities; and offers sweep account, safe deposit boxes, e-statement, cards, online banking, and mobile banking services. Texas Community Bancshares, Inc. was founded in 1934 and is headquartered in Mineola, Texas.