Madison County Financial (OTCMKTS:MCBK) & Southern First Bancshares (NASDAQ:SFST) Critical Review

Madison County Financial (OTCMKTS:MCBK) 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 risk, valuation, profitability, analyst recommendations, earnings, institutional ownership and dividends.

Institutional and Insider Ownership

75.0% of Southern First Bancshares shares are owned by institutional investors. 16.9% of Madison County Financial shares are owned by insiders. Comparatively, 7.1% of Southern First Bancshares shares are owned by insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a stock will outperform the market over the long term.

Analyst Ratings

This is a summary of recent ratings and recommmendations for Madison County Financial and Southern First Bancshares, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Madison County Financial	0	0	0	0	0.00
Southern First Bancshares	0	2	1	0	2.33

Southern First Bancshares has a consensus price target of $64.00, suggesting a potential upside of 23.22%. Given Southern First Bancshares’ stronger consensus rating and higher probable upside, analysts clearly believe Southern First Bancshares is more favorable than Madison County Financial.

Earnings & Valuation

This table compares Madison County Financial and Southern First Bancshares”s revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Madison County Financial	$29.54 million	2.69	$3.82 million	N/A	N/A
Southern First Bancshares	$118.09 million	3.62	$30.37 million	$3.74	13.89

Southern First Bancshares has higher revenue and earnings than Madison County Financial.

Volatility and Risk

Madison County Financial has a beta of 0.12, indicating that its stock price is 88% less volatile than the S&P 500. Comparatively, Southern First Bancshares has a beta of 0.75, indicating that its stock price is 25% less volatile than the S&P 500.

Profitability

This table compares Madison County Financial and Southern First Bancshares’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Madison County Financial	N/A	N/A	N/A
Southern First Bancshares	13.52%	8.63%	0.70%

Summary

Southern First Bancshares beats Madison County Financial on 11 of the 12 factors compared between the two stocks.

About Madison County Financial

Madison County Financial, Inc. operates as the holding company for Madison County Bank that provides banking and financial services to individual and corporate customers in Nebraska, the United States. It offers checking, money market savings, savings, and individual retirement accounts; certificates of deposit; credit and debit cards; home loans; and consumer loans, including home equity lines of credit, second mortgage, home improvement, recreational vehicle, personal, and overdraft protection loans, as well as loans for automobiles, trucks, and vans. The company also provides agricultural real estate, machinery and equipment, livestock and crop, and operating loans; and commercial real estate, construction, investment property, and working capital loans, as well as equipment financing services. In addition, it offers online and mobile banking, and merchant services. The company was formerly known as Madison County Holding Company and changed its name to Madison County Financial, Inc. in October 2012. Madison County Financial, Inc. was founded in 1888 and is headquartered in Madison, Nebraska.

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.