Analyzing 1st Colonial Bancorp (OTCMKTS:FCOB) & Financial Institutions (NASDAQ:FISI)

1st Colonial Bancorp (OTCMKTS:FCOB) and Financial Institutions (NASDAQ:FISI) are both small-cap finance companies, but which is the superior stock? We will contrast the two businesses based on the strength of their analyst recommendations, profitability, institutional ownership, risk, dividends, valuation and earnings.

Volatility & Risk

1st Colonial Bancorp has a beta of 0.7, meaning that its stock price is 30% less volatile than the S&P 500. Comparatively, Financial Institutions has a beta of 0.91, meaning that its stock price is 9% less volatile than the S&P 500.

Analyst Recommendations

This is a breakdown of current ratings and price targets for 1st Colonial Bancorp and Financial Institutions, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
1st Colonial Bancorp	0	0	0	0	N/A
Financial Institutions	0	3	0	0	2.00

Financial Institutions has a consensus price target of $20.67, suggesting a potential upside of 7.47%. Given Financial Institutions’ higher probable upside, analysts plainly believe Financial Institutions is more favorable than 1st Colonial Bancorp.

Valuation and Earnings

This table compares 1st Colonial Bancorp and Financial Institutions’ revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
1st Colonial Bancorp	$42.11 million	1.80	$7.43 million	$1.55	10.23
Financial Institutions	$334.38 million	0.89	$50.26 million	$2.51	7.66

Financial Institutions has higher revenue and earnings than 1st Colonial Bancorp. Financial Institutions is trading at a lower price-to-earnings ratio than 1st Colonial Bancorp, indicating that it is currently the more affordable of the two stocks.

Institutional and Insider Ownership

13.4% of 1st Colonial Bancorp shares are owned by institutional investors. Comparatively, 60.5% of Financial Institutions shares are owned by institutional investors. 2.7% of Financial Institutions shares are owned by company insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a company is poised for long-term growth.

Profitability

This table compares 1st Colonial Bancorp and Financial Institutions’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
1st Colonial Bancorp	17.09%	11.34%	0.92%
Financial Institutions	11.53%	9.66%	0.65%

Summary

Financial Institutions beats 1st Colonial Bancorp on 7 of the 12 factors compared between the two stocks.

About 1st Colonial Bancorp

1st Colonial Bancorp, Inc. operates as the bank holding company for 1st Colonial Community Bank that provides a range of business and consumer financial services in New Jersey. The company offers various deposit products, including savings accounts, money market accounts, certificates of deposit, club accounts, and business and personal checking accounts. It also provides home equity loans, home equity lines of credit, personal and vehicle loans, residential and commercial mortgages, construction loans, business lines of credit, equipment and vehicle financing, real estate loans, working capital line of credit, and business acquisition loans, as well as small business administration loans. In addition, the company offers cash management services comprising remote deposit capture, ACH/wire transfer, night deposit drop, and merchant services; safe deposit boxes; and coin counting, online and mobile banking, debit card, and ATM services. The company was founded in 2000 and is headquartered in Mount Laurel, New Jersey.

About Financial Institutions

Financial Institutions, Inc. operates as a holding company for the Five Star Bank, a chartered bank that provides banking and financial services to individuals, municipalities, and businesses in New York. The company provides checking and savings account programs, including money market accounts, certificates of deposit, sweep investments, and individual retirement and other qualified plan accounts, as well as NOW accounts. Its loan products include term loans and lines of credit; short and medium-term commercial loans for working capital, business expansion, and purchase of equipment; commercial business loans to the agricultural industry; commercial mortgage loans; one-to-four family residential mortgage loans, home improvement loans, closed-end home equity loans, and home equity lines of credit; and consumer loans, such as automobile, secured installment, and personal loans. The company offers personal insurance products, including automobile, homeowners, boat, recreational vehicle, landlord, and umbrella coverage; commercial insurance comprising property, liability, automobile, inland marine, workers compensation, bonds, crop, and umbrella insurance products; and financial services, such as life and disability insurance, medicare supplements, long-term care, annuities, mutual funds, and retirement programs. In addition, it offers customized investment advisory, wealth management, investment consulting, and retirement plan services, as well as operates a real estate investment trust that holds residential mortgages and commercial real estate loans. Financial Institutions, Inc. was founded in 1817 and is headquartered in Warsaw, New York.