First Business Financial Services (NASDAQ:FBIZ) vs. MetroCity Bankshares (NASDAQ:MCBS) Critical Comparison

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

Insider and Institutional Ownership

25.3% of MetroCity Bankshares shares are owned by institutional investors. Comparatively, 60.1% of First Business Financial Services shares are owned by institutional investors. 27.5% of MetroCity Bankshares shares are owned by company insiders. Comparatively, 6.3% of First Business Financial Services shares are owned by company insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a stock will outperform the market over the long term.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
MetroCity Bankshares	27.33%	15.98%	1.79%
First Business Financial Services	15.46%	13.70%	1.10%

Analyst Recommendations

This is a summary of current ratings and price targets for MetroCity Bankshares and First Business Financial Services, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
MetroCity Bankshares	0	1	0	0	2.00
First Business Financial Services	0	0	3	0	3.00

MetroCity Bankshares currently has a consensus target price of $36.00, suggesting a potential upside of 14.16%. First Business Financial Services has a consensus target price of $53.67, suggesting a potential upside of 9.76%. Given MetroCity Bankshares’ higher probable upside, analysts clearly believe MetroCity Bankshares is more favorable than First Business Financial Services.

Earnings and Valuation

This table compares MetroCity Bankshares and First Business Financial Services”s top-line revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
MetroCity Bankshares	$235.98 million	3.38	$51.61 million	$2.51	12.56
First Business Financial Services	$226.24 million	1.79	$37.03 million	$4.66	10.49

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

Risk and Volatility

MetroCity Bankshares has a beta of 0.64, suggesting that its stock price is 36% less volatile than the S&P 500. Comparatively, First Business Financial Services has a beta of 0.87, suggesting that its stock price is 13% less volatile than the S&P 500.

Dividends

MetroCity Bankshares pays an annual dividend of $0.92 per share and has a dividend yield of 2.9%. First Business Financial Services pays an annual dividend of $1.00 per share and has a dividend yield of 2.0%. MetroCity Bankshares pays out 36.7% of its earnings in the form of a dividend. First Business Financial Services pays out 21.5% 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. First Business Financial Services has increased its dividend for 12 consecutive years.

Summary

MetroCity Bankshares beats First Business Financial Services on 10 of the 17 factors compared between the two stocks.

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.

About First Business Financial Services

First Business Financial Services, Inc. operates as the bank holding company for First Business Bank that provides commercial banking products and services for small and medium-sized businesses, business owners, executives, professionals, and high net worth individuals in Wisconsin, Kansas, and Missouri. The company offers real estate lending, commercial and industrial lending, asset-based lending, accounts receivable financing, equipment financing loans and leases, floorplan financing, vendor financing, small business administration lending and servicing, treasury management solutions, and company retirement services. It also provides private wealth management for individuals, including creating and executing asset allocation strategies, trust and estate administration, financial planning, investment management, and access to brokerage and custody-only services. In addition, the company offers bank consulting consisting of investment portfolio administrative and asset liability management services, and commercial deposit accounts. The company was founded in 1909 and is headquartered in Madison, Wisconsin.