M&F Bancorp (OTCMKTS:MFBP) vs. Southern First Bancshares (NASDAQ:SFST) Financial Analysis

M&F Bancorp (OTCMKTS:MFBP) and Southern First Bancshares (NASDAQ:SFST) are both small-cap finance companies, but which is the superior business? We will compare the two businesses based on the strength of their institutional ownership, valuation, earnings, profitability, analyst recommendations, dividends and risk.

Insider & Institutional Ownership

75.0% of Southern First Bancshares shares are held by institutional investors. 2.9% of M&F Bancorp shares are held by company insiders. Comparatively, 7.1% of Southern First Bancshares shares are held by company insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a company is poised for long-term growth.

Risk & Volatility

M&F Bancorp has a beta of -0.63, suggesting that its stock price is 163% less volatile than the S&P 500. Comparatively, Southern First Bancshares has a beta of 0.74, suggesting that its stock price is 26% less volatile than the S&P 500.

Analyst Ratings

This is a breakdown of recent recommendations and price targets for M&F Bancorp and Southern First Bancshares, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
M&F Bancorp	0	0	0	0	0.00
Southern First Bancshares	0	2	1	0	2.33

Southern First Bancshares has a consensus target price of $51.00, suggesting a potential downside of 10.31%. Given Southern First Bancshares’ stronger consensus rating and higher probable upside, analysts clearly believe Southern First Bancshares is more favorable than M&F Bancorp.

Profitability

This table compares M&F Bancorp and Southern First Bancshares’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
M&F Bancorp	N/A	N/A	N/A
Southern First Bancshares	11.83%	7.63%	0.61%

Valuation & Earnings

This table compares M&F Bancorp and Southern First Bancshares”s top-line revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
M&F Bancorp	$29.33 million	1.27	$4.77 million	$1.99	9.67
Southern First Bancshares	$213.35 million	2.18	$15.53 million	$3.23	17.60

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

Summary

Southern First Bancshares beats M&F Bancorp on 14 of the 14 factors compared between the two stocks.

About M&F Bancorp

M&F Bancorp, Inc. operates as a bank holding company for the Mechanics and Farmers Bank that provides consumer and commercial banking products and services in North Carolina. It offers deposit products, including demand deposits; checking, savings, and money market accounts, as well as certificates of deposit. The company provides loans for commercial and residential real estate, and construction; and consumer and other loans; as well as ATM services. M&F Bancorp, Inc. was founded in 1907 and is headquartered in Durham, North Carolina.

About Southern First Bancshares

Southern First Bancshares, Inc. operates as the bank holding company for Southern First Bank that provides commercial, consumer, and mortgage loans to the general public in South Carolina, North Carolina, and Georgia. The company accepts various deposit products that include checking accounts, commercial checking accounts, and savings accounts, as well as other time deposits, including daily money market accounts and long-term certificates of deposit. Its loan portfolio comprises commercial real estate loans; construction real estate loans; commercial business loans for various lines of businesses, such as the manufacturing, service industry, and professional service areas; consumer real estate and home equity loans; and other consumer loans, including secured and unsecured installment loans and revolving lines of credit. In addition, the company provides other bank services, such as internet banking, cash management, safe deposit boxes, direct deposit, automatic drafts, bill payment, and mobile banking services. Southern First Bancshares, Inc. was incorporated in 1999 and is headquartered in Greenville, South Carolina.