Critical Review: Old National Bancorp (NASDAQ:ONB) and First Western Financial (NASDAQ:MYFW)

First Western Financial (NASDAQ:MYFW) and Old National Bancorp (NASDAQ:ONB) are both finance companies, but which is the superior business? We will contrast the two companies based on the strength of their analyst recommendations, profitability, dividends, risk, valuation, earnings and institutional ownership.

Institutional & Insider Ownership

60.3% of First Western Financial shares are held by institutional investors. Comparatively, 83.7% of Old National Bancorp shares are held by institutional investors. 15.5% of First Western Financial shares are held by company insiders. Comparatively, 0.9% of Old National Bancorp shares are held by company insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a stock will outperform the market over the long term.

Analyst Ratings

This is a breakdown of current recommendations and price targets for First Western Financial and Old National Bancorp, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
First Western Financial	1	2	2	0	2.20
Old National Bancorp	0	4	7	1	2.75

First Western Financial presently has a consensus target price of $24.33, suggesting a potential upside of 5.80%. Old National Bancorp has a consensus target price of $26.27, suggesting a potential upside of 25.17%. Given Old National Bancorp’s stronger consensus rating and higher probable upside, analysts clearly believe Old National Bancorp is more favorable than First Western Financial.

Profitability

This table compares First Western Financial and Old National Bancorp’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
First Western Financial	6.91%	4.91%	0.42%
Old National Bancorp	17.39%	14.95%	1.19%

Valuation & Earnings

This table compares First Western Financial and Old National Bancorp”s top-line revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
First Western Financial	$180.33 million	1.24	$8.47 million	$1.29	17.83
Old National Bancorp	$2.32 billion	3.53	$539.19 million	$1.71	12.27

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

Risk and Volatility

First Western Financial has a beta of 0.89, meaning that its stock price is 11% less volatile than the S&P 500. Comparatively, Old National Bancorp has a beta of 0.89, meaning that its stock price is 11% less volatile than the S&P 500.

Summary

Old National Bancorp beats First Western Financial on 12 of the 14 factors compared between the two stocks.

About First Western Financial

First Western Financial, Inc., a financial holding company, provides wealth advisory, private baking, personal trust, investment management, mortgage lending, and institutional asset management services. The company operates through two segments: Wealth Management and Mortgage. The Wealth Management segment provides deposit, loan, life insurance, and trust and investment management advisory products and services. The Mortgage segment engages in soliciting, originating, and selling mortgage loans into the secondary market. It serves entrepreneurs, professionals, high net worth individuals or families, and business and philanthropic organizations. First Western Financial, Inc. was incorporated in 2002 and is headquartered in Denver, Colorado.

About Old National Bancorp

Old National Bancorp operates as the bank holding company for Old National Bank that provides various financial services to individual and commercial customers in the United States. It accepts deposit accounts, including noninterest-bearing demand, interest-bearing checking, negotiable order of withdrawal, savings and money market, and time deposits; and offers loans, such as home equity lines of credit, residential real estate loans, consumer loans, commercial loans, commercial real estate loans, agricultural loans, letters of credit, and lease financing. The company also provides debit and automated teller machine cards, telephone access, online banking, and other electronic and mobile banking services; cash management, private banking, brokerage, trust, investment advisory, and other traditional banking services; wealth management, investment, and foreign currency services; and treasury management, merchant, and capital markets services, as well as community development lending and equity investment solutions. The company was founded in 1834 and is headquartered in Evansville, Indiana.