Reviewing First Niles Financial (OTCMKTS:FNFI) and ServisFirst Bancshares (NYSE:SFBS)

ServisFirst Bancshares (NYSE:SFBS) and First Niles Financial (OTCMKTS:FNFI) are both finance companies, but which is the superior business? We will compare the two businesses based on the strength of their profitability, analyst recommendations, dividends, risk, earnings, valuation and institutional ownership.

Risk & Volatility

ServisFirst Bancshares has a beta of 0.86, suggesting that its stock price is 14% less volatile than the S&P 500. Comparatively, First Niles Financial has a beta of 0.29, suggesting that its stock price is 71% less volatile than the S&P 500.

Dividends

ServisFirst Bancshares pays an annual dividend of $1.52 per share and has a dividend yield of 1.7%. First Niles Financial pays an annual dividend of $0.24 per share and has a dividend yield of 2.7%. ServisFirst Bancshares pays out 28.0% of its earnings in the form of a dividend. First Niles Financial pays out 51.1% of its earnings in the form of a dividend. Both companies have healthy payout ratios and should be able to cover their dividend payments with earnings for the next several years. ServisFirst Bancshares has raised its dividend for 10 consecutive years.

Profitability

This table compares ServisFirst Bancshares and First Niles Financial’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
ServisFirst Bancshares	28.80%	16.95%	1.74%
First Niles Financial	N/A	N/A	N/A

Valuation & Earnings

This table compares ServisFirst Bancshares and First Niles Financial”s top-line revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
ServisFirst Bancshares	$1.02 billion	4.67	$276.60 million	$5.42	16.03
First Niles Financial	$14.03 million	0.97	$840,000.00	$0.47	18.72

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

Insider & Institutional Ownership

67.3% of ServisFirst Bancshares shares are owned by institutional investors. 6.5% of ServisFirst Bancshares shares are owned by insiders. Comparatively, 23.4% of First Niles Financial shares are owned by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company will outperform the market over the long term.

Analyst Ratings

This is a breakdown of recent ratings and target prices for ServisFirst Bancshares and First Niles Financial, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
ServisFirst Bancshares	0	1	3	1	3.00
First Niles Financial	0	0	0	0	0.00

ServisFirst Bancshares presently has a consensus target price of $94.33, suggesting a potential upside of 8.59%. Given ServisFirst Bancshares’ stronger consensus rating and higher probable upside, equities research analysts clearly believe ServisFirst Bancshares is more favorable than First Niles Financial.

Summary

ServisFirst Bancshares beats First Niles Financial on 15 of the 18 factors compared between the two stocks.

About ServisFirst Bancshares

ServisFirst Bancshares, Inc. operates as the bank holding company for ServisFirst Bank that provides various banking services to individual and corporate customers. It accepts demand, time, savings, and other deposits; checking, money market, and IRA accounts; and certificates of deposit. The company's loan products include commercial lending products, including seasonal, bridge, and term loans for working capital, expansion of the business, acquisition of property, and plant and equipment, as well as commercial lines of credit; commercial real estate loans, construction and development loans, and residential real estate loans; and consumer loans, such as home equity loans, vehicle financing, loans secured by deposits, and secured and unsecured personal loans. It also offers other banking products and services comprising telephone and mobile banking, Internet banking, direct deposit, traveler's checks, safe deposit boxes, attorney trust accounts, automatic account transfers, automated teller machines, and debit and credit card systems; treasury and cash management services; wire transfer, night depository, banking-by-mail, and remote capture services; and correspondent banking services to other financial institutions. In addition, the company holds and manages participations in residential mortgages and commercial real estate loans originated by ServisFirst Bank in Alabama, Florida, Georgia, and Tennessee. The company was founded in 2005 and is headquartered in Birmingham, Alabama.

About First Niles Financial

First Niles Financial, Inc. operates as a holding company for the Home Federal Savings and Loan Association of Niles that provides various banking products and services in Ohio, the United States. The company offers personal and business checking and savings, money market deposit, and Christmas club accounts, as well as certificates of deposit. It also provides various loans, including mortgage and consumer loans, home equity lines of credit, and commercial loans and lines of credit. In addition, the company provides e-statement, and night depository services; debit and ATM cards; safe deposit boxes; direct deposits; I.R.A. certificates of deposit and savings accounts; and online banking services. First Niles Financial, Inc. was founded in 1897 and is based in Niles, Ohio.