Contrasting FinWise Bancorp (NASDAQ:FINW) & Midland States Bancorp (NASDAQ:MSBI)

Midland States Bancorp (NASDAQ:MSBI) and FinWise Bancorp (NASDAQ:FINW) are both small-cap finance companies, but which is the superior investment? We will compare the two companies based on the strength of their profitability, earnings, risk, institutional ownership, valuation, analyst recommendations and dividends.

Analyst Ratings

This is a breakdown of recent recommendations and price targets for Midland States Bancorp and FinWise Bancorp, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Midland States Bancorp	0	4	0	0	2.00
FinWise Bancorp	0	0	3	0	3.00

Midland States Bancorp presently has a consensus target price of $23.50, suggesting a potential upside of 22.46%. FinWise Bancorp has a consensus target price of $21.67, suggesting a potential upside of 10.01%. Given Midland States Bancorp’s higher probable upside, research analysts plainly believe Midland States Bancorp is more favorable than FinWise Bancorp.

Institutional and Insider Ownership

60.9% of Midland States Bancorp shares are held by institutional investors. Comparatively, 35.4% of FinWise Bancorp shares are held by institutional investors. 5.6% of Midland States Bancorp shares are held by insiders. Comparatively, 19.2% of FinWise Bancorp shares are held by insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a company will outperform the market over the long term.

Risk and Volatility

Midland States Bancorp has a beta of 0.73, meaning that its share price is 27% less volatile than the S&P 500. Comparatively, FinWise Bancorp has a beta of 0.8, meaning that its share price is 20% less volatile than the S&P 500.

Profitability

This table compares Midland States Bancorp and FinWise Bancorp’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Midland States Bancorp	-2.74%	-1.95%	-0.17%
FinWise Bancorp	13.23%	7.67%	2.00%

Earnings and Valuation

This table compares Midland States Bancorp and FinWise Bancorp”s gross revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Midland States Bancorp	$299.70 million	1.37	-$13.43 million	($1.05)	-18.28
FinWise Bancorp	$81.40 million	3.20	$12.74 million	$0.94	20.95

FinWise Bancorp has lower revenue, but higher earnings than Midland States Bancorp. Midland States Bancorp is trading at a lower price-to-earnings ratio than FinWise Bancorp, indicating that it is currently the more affordable of the two stocks.

Summary

FinWise Bancorp beats Midland States Bancorp on 11 of the 14 factors compared between the two stocks.

About Midland States Bancorp

Midland States Bancorp, Inc. operates as a financial holding company for Midland States Bank that provides various banking products and services to individuals, businesses, municipalities, and other entities. It operates through Banking, Wealth Management, and Other segments. The company provides a range of financial products and services to consumers and businesses, including commercial loans to finance agricultural equipment and production; and commercial real estate loans for owner occupied offices, warehouses and production facilities, office buildings, hotels, mixed-use residential and commercial facilities, retail centers, multifamily properties, and assisted living facilities. In addition, it offers construction and land development loans, such as real estate investment properties and residential developments, and lesser extent loans; and residential real estate loans, which includes first and second mortgage loans, and home equity lines of credit consisting of loans secured by first or second mortgages on primarily owner occupied primary residences. The company also provides consumer installment loans for the purchase of cars, boats and other recreational vehicles, as well as for the purchase of major appliances and other home improvement projects; and commercial equipment leasing programs for manufacturing, construction, transportation, and healthcare industries. Further, it offers merchant services; deposit products, including checking, time, savings, money market, and certificates of deposit, as well as sweep accounts; letters of credit; and trust and wealth management services, such as financial and estate planning, trustee and custodial, investment management, tax, insurance, and business planning, corporate retirement plan consulting and administration, and retail brokerage services. The company was founded in 1881 and is headquartered in Effingham, Illinois.

About FinWise Bancorp

FinWise Bancorp operates as the bank holding company for FinWise Bank that provides various banking products and services to individual and corporate customers in Utah. The company offers various deposit products, including interest and noninterest bearing demand accounts, health savings account demand deposits, NOW and money market accounts, and checking and savings accounts, as well as time deposits and certificates of deposits. It also provides loans, including consumer, small business administration, commercial, commercial real estate, and residential real estate loans. In addition, the company offers debit cards, remote deposit capture, online banking, mobile banking, and direct deposit services; and business accounts and cash management services, such as business checking and savings accounts, and treasury services. FinWise Bancorp was founded in 1999 and is headquartered in Murray, Utah.