First Foundation (NASDAQ:FFWM) & MetroCity Bankshares (NASDAQ:MCBS) Head to Head Comparison

First Foundation (NASDAQ:FFWM) and MetroCity Bankshares (NASDAQ:MCBS) are both small-cap finance companies, but which is the better investment? We will compare the two companies based on the strength of their institutional ownership, valuation, risk, dividends, analyst recommendations, earnings and profitability.

Valuation and Earnings

This table compares First Foundation and MetroCity Bankshares’ revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
First Foundation	$160.77 million	2.39	-$199.06 million	($3.66)	-1.86
MetroCity Bankshares	$124.92 million	5.93	$51.61 million	$1.97	14.92

MetroCity Bankshares has lower revenue, but higher earnings than First Foundation. First Foundation is trading at a lower price-to-earnings ratio than MetroCity Bankshares, indicating that it is currently the more affordable of the two stocks.

Insider & Institutional Ownership

73.1% of First Foundation shares are owned by institutional investors. Comparatively, 25.3% of MetroCity Bankshares shares are owned by institutional investors. 8.3% of First Foundation shares are owned by insiders. Comparatively, 27.5% of MetroCity Bankshares shares are owned by 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.

Analyst Recommendations

This is a breakdown of current ratings and price targets for First Foundation and MetroCity Bankshares, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
First Foundation	0	4	1	0	2.20
MetroCity Bankshares	0	1	0	0	2.00

First Foundation currently has a consensus price target of $7.80, suggesting a potential upside of 14.87%. MetroCity Bankshares has a consensus price target of $32.00, suggesting a potential upside of 8.84%. Given First Foundation’s stronger consensus rating and higher possible upside, research analysts plainly believe First Foundation is more favorable than MetroCity Bankshares.

Dividends

First Foundation pays an annual dividend of $0.04 per share and has a dividend yield of 0.6%. MetroCity Bankshares pays an annual dividend of $0.80 per share and has a dividend yield of 2.7%. First Foundation pays out -1.1% of its earnings in the form of a dividend. MetroCity Bankshares pays out 40.6% 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.

Profitability

This table compares First Foundation and MetroCity Bankshares’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
First Foundation	1.34%	1.07%	0.07%
MetroCity Bankshares	24.20%	13.85%	1.52%

Volatility and Risk

First Foundation has a beta of 1.34, suggesting that its stock price is 34% more volatile than the S&P 500. Comparatively, MetroCity Bankshares has a beta of 0.6, suggesting that its stock price is 40% less volatile than the S&P 500.

Summary

MetroCity Bankshares beats First Foundation on 9 of the 16 factors compared between the two stocks.

About First Foundation

First Foundation Inc., through its subsidiaries, provides banking services, investment advisory, wealth management, and trust services to individuals, businesses, and other organizations in the United States. The company operates in two segments, Banking and Wealth Management. It offers a range of deposit products, including personal and business checking accounts, savings accounts, interest-bearing demand deposit accounts, money market accounts, and time certificate of deposits; and loan products consisting of multifamily and single family residential real estate loans, commercial real estate loans, commercial term loans, and line of credits, as well as consumer loans, such as personal installment loans and line of credits, and home equity line of credits. The company also provides various specialized services comprising trust services, online and mobile banking, remote deposit capture services, merchant credit card services, ATM cards, Visa debit cards, and business sweep accounts, as well as insurance brokerage services and equipment financing solutions. In addition, it offers investment management and financial planning services; financial, investment, and economic advisory and related services; and treasury management services, such as bill pay, check/payee/ACH positive pay, wire origination, internal and external transfers, account reconciliation reporting, mobile deposit, lockbox, cash vault services and merchant processing. Further, the company provides support services, including the processing and transmission of financial and economic data for charitable organizations. It operates through a network of branch offices and loan production offices. The company was founded in 1985 and is headquartered in Dallas, Texas.

About MetroCity Bankshares

MetroCity Bankshares, Inc. operates as the bank holding company for Metro City Bank that engages in the provision of banking products and services in the United States. It offers customary banking services, such as consumer and commercial checking accounts, savings, and money market accounts, as well as certificates of deposit. The company also provides commercial and consumer loans, including single family residential loans; construction and development, and owner and non-owner occupied commercial real estate loans; letters of credit; and commercial and industrial loans, residential mortgage loans, and SBA loans. In addition, it offers online banking services, which include access to account balances, online transfers, online bill payment, and electronic delivery of customer statements; mobile banking solutions, such as remote check deposit with mobile bill pay; and automated teller machines and telephone banking services. Further, it provides debit cards for checking customers, direct deposits, and cashier's checks; treasury management services, including wire transfer, automated clearing house, and stop payments services; and cash management deposit products, such as remote deposit capture, positive pay, zero balance accounts, and sweep accounts. The company was founded in 2006 and is headquartered in Atlanta, Georgia.