Critical Review: Bank7 (NASDAQ:BSVN) and First Bancorp (FBNC)

Bank7 (NASDAQ:BSVN) and First Bancorp (NASDAQ:FBNC) are both small-cap finance companies, but which is the superior investment? We will compare the two businesses based on the strength of their dividends, analyst recommendations, valuation, institutional ownership, earnings, profitability and risk.

Earnings & Valuation

This table compares Bank7 and First Bancorp’s revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Bank7 $48.13 million 3.45 $25.00 million $2.44 6.68
First Bancorp $293.04 million 3.88 $89.29 million $3.01 12.71

First Bancorp has higher revenue and earnings than Bank7. Bank7 is trading at a lower price-to-earnings ratio than First Bancorp, indicating that it is currently the more affordable of the two stocks.

Institutional and Insider Ownership

32.8% of Bank7 shares are held by institutional investors. Comparatively, 69.9% of First Bancorp shares are held by institutional investors. 2.3% of First Bancorp shares are held by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a company will outperform the market over the long term.

Analyst Ratings

This is a breakdown of current ratings and price targets for Bank7 and First Bancorp, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Bank7 0 0 3 0 3.00
First Bancorp 0 3 3 0 2.50

Bank7 presently has a consensus price target of $23.00, suggesting a potential upside of 41.19%. First Bancorp has a consensus price target of $40.67, suggesting a potential upside of 6.32%. Given Bank7’s stronger consensus rating and higher possible upside, analysts clearly believe Bank7 is more favorable than First Bancorp.

Profitability

This table compares Bank7 and First Bancorp’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Bank7 N/A N/A N/A
First Bancorp 30.47% 12.32% 1.57%

Dividends

First Bancorp pays an annual dividend of $0.40 per share and has a dividend yield of 1.0%. Bank7 does not pay a dividend. First Bancorp pays out 13.3% of its earnings in the form of a dividend.

Summary

First Bancorp beats Bank7 on 11 of the 14 factors compared between the two stocks.

Bank7 Company Profile

Bank7 Corp. operates as a bank holding company for Bank7 that provides banking and financial services to individual and corporate customers in Oklahoma, Kansas, and Texas. The company accepts demand, savings, money market, and negotiable order of withdrawal accounts, as well as certificates of deposits. It also provides real estate loans, including commercial real estate, construction and development, 1-4 family real estate, and hospitality loans; variable- and fixed-rate commercial loans; agricultural real estate loans; and consumer loans, such as secured and unsecured term loans and home improvement loans. In addition, the company offers debit cards; commercial treasury management services; and ATM, checking, direct deposit, and cashier's check products, as well as wire transfer and automated clearing house services. Further, it provides cash management deposit products comprising remote deposit capture, positive pay, zero balance accounts, and sweep accounts, as well as telephone, mail, and personal banking services. It operates through a network of seven full-service branches in Oklahoma, the Dallas/Fort Worth metropolitan area, and Kansas. The company was formerly known as Haines Financial Corp. Bank7 Corp. was founded in 2004 and is headquartered in Oklahoma City, Oklahoma.

First Bancorp Company Profile

First Bancorp operates as the bank holding company for First Bank that provides banking products and services for individuals and small to medium-sized businesses primarily in North Carolina and northeastern South Carolina. It accepts deposit products, such as checking, savings, and money market accounts, as well as time deposits, including certificates of deposits and individual retirement accounts. The company also offers loans for a range of consumer and commercial purposes comprising loans for business, agriculture, real estate, personal, home improvement, and automobiles, as well as residential mortgages and SBA loans. In addition, it provides credit and debit cards, letters of credit, and safe deposit box rental services, as well as electronic funds transfer services consisting of wire transfers; and Internet and mobile banking, cash management, bank-by-phone services, and remote deposit capture services. Further, the company offers investment and insurance products, such as mutual funds, annuities, long-term care insurance, life insurance, and company retirement plans, as well as property and casualty insurance products; and financial planning services. As of December 31, 2017, it operated 104 branches, including 98 branches in North Carolina and 6 branches in South Carolina. The company was founded in 1934 and is headquartered in Southern Pines, North Carolina.

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