Financial Review: First Foundation (NASDAQ:FFWM) and Suncrest Bank (OTCMKTS:SBKK)

First Foundation (NASDAQ:FFWM) and Suncrest Bank (OTCMKTS:SBKK) are both small-cap finance companies, but which is the superior business? We will compare the two businesses based on the strength of their profitability, analyst recommendations, dividends, risk, earnings, valuation and institutional ownership.

Analyst Ratings

This is a breakdown of recent ratings and target prices for First Foundation and Suncrest Bank, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
First Foundation	0	1	1	0	2.50
Suncrest Bank	0	0	0	0	0.00

First Foundation presently has a consensus target price of $6.25, suggesting a potential upside of 12.51%. Given First Foundation’s stronger consensus rating and higher probable upside, equities research analysts clearly believe First Foundation is more favorable than Suncrest Bank.

Valuation & Earnings

This table compares First Foundation and Suncrest Bank”s top-line revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
First Foundation	$66.26 million	6.91	-$92.41 million	($1.41)	-3.94
Suncrest Bank	$46.73 million	4.92	$16.96 million	$1.37	13.56

Suncrest Bank has lower revenue, but higher earnings than First Foundation. First Foundation is trading at a lower price-to-earnings ratio than Suncrest Bank, indicating that it is currently the more affordable of the two stocks.

Risk and Volatility

First Foundation has a beta of 0.99, meaning that its stock price is 1% less volatile than the S&P 500. Comparatively, Suncrest Bank has a beta of 0.88, meaning that its stock price is 12% less volatile than the S&P 500.

Insider & Institutional Ownership

73.1% of First Foundation shares are held by institutional investors. Comparatively, 5.9% of Suncrest Bank shares are held by institutional investors. 9.5% of First Foundation shares are held by company insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company will outperform the market over the long term.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
First Foundation	-13.94%	-0.73%	-0.05%
Suncrest Bank	N/A	N/A	N/A

Summary

First Foundation beats Suncrest Bank on 8 of the 14 factors compared between the two stocks.

About First Foundation

First Foundation Inc., through its subsidiaries, provides banking services, investment advisory, wealth management, and trust services to individuals, businesses, and other organizations in the United States. The company operates in two segments, Banking and Wealth Management. It offers a range of deposit products, including personal and business checking accounts, savings accounts, interest-bearing demand deposit 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, 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. The company also provides various specialized services comprising trust services, online 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, it offers investment management and financial planning services; financial, investment, and economic advisory and related services; and treasury management services, such as bill pay, check/payee/ACH positive pay, wire origination, internal and external transfers, account reconciliation reporting, mobile deposit, lockbox, cash vault services and merchant processing. Further, the company provides support services, including the processing and transmission of financial and economic data for charitable organizations. It operates through a network of branch offices and loan production offices. The company was founded in 1985 and is headquartered in Dallas, Texas.

About Suncrest Bank

Suncrest Bank engages in the provision of personal and commercial banking services. It provides checking, savings and certificates of deposits, lending, cash management, online and mobile banking, e-statements, remote deposit capture, financial calculators, and customer service center. It also offers agricultural real estate loans, production finance, equipment financing and leasing, development loans, long-term fixed rate, SBA and USDA loans, valley small business guaranteed loans, USDA B&I loans, farmer mac loans, and cal-cap loans. The company was founded on May 19, 2008 and is headquartered in Visalia, CA.