Comparing First Foundation (NYSE:FFWM) & FinWise Bancorp (NASDAQ:FINW)

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

Risk and Volatility

FinWise Bancorp has a beta of 0.82, suggesting that its share price is 18% less volatile than the S&P 500. Comparatively, First Foundation has a beta of 0.92, suggesting that its share price is 8% less volatile than the S&P 500.

Institutional & Insider Ownership

35.4% of FinWise Bancorp shares are owned by institutional investors. Comparatively, 73.1% of First Foundation shares are owned by institutional investors. 21.3% of FinWise Bancorp shares are owned by insiders. Comparatively, 9.5% of First Foundation shares are owned by insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a stock is poised for long-term growth.

Analyst Ratings

This is a breakdown of current ratings and recommmendations for FinWise Bancorp and First Foundation, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
FinWise Bancorp	0	2	1	0	2.33
First Foundation	1	2	2	1	2.50

FinWise Bancorp presently has a consensus price target of $22.00, suggesting a potential upside of 39.15%. First Foundation has a consensus price target of $6.58, suggesting a potential upside of 16.62%. Given FinWise Bancorp’s higher probable upside, analysts plainly believe FinWise Bancorp is more favorable than First Foundation.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
FinWise Bancorp	10.66%	8.82%	1.90%
First Foundation	-26.37%	1.06%	0.08%

Earnings and Valuation

This table compares FinWise Bancorp and First Foundation”s top-line revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
FinWise Bancorp	$150.96 million	1.42	$16.09 million	$1.13	13.99
First Foundation	$588.36 million	0.80	-$155.16 million	($1.89)	-2.99

FinWise Bancorp has higher earnings, but lower revenue than First Foundation. First Foundation 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 First Foundation on 9 of the 15 factors compared between the two stocks.

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.

About First Foundation

First Foundation Inc., through its subsidiaries, provides personal banking, business banking, and private wealth management services in the United States. It operates through two segments, Banking and Wealth Management. The company offers a range of bank deposit products, including personal and business checking accounts, savings accounts, interest-bearing negotiable order of withdrawal 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, and 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. It also provides various specialized services comprising trust services, internet 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, the company offers investment management and financial planning services; treasury management services; advisory and coordination services in the areas of estate planning, retirement planning, and charitable and business ownership issues; and financial, investment, and economic advisory and related services. Further, it provides support services, including the processing and transmission of financial and economic data for charitable organizations. The company operates through a network of 28 branch offices and 3 loan production offices in California, Nevada, Texas, and Hawaii. First Foundation Inc. was founded in 1985 and is headquartered in Dallas, Texas.