First Mid-Illinois Bancshares (FMBH) & Financial Institutions (FISI) Critical Review

First Mid-Illinois Bancshares (NASDAQ: FMBH) and Financial Institutions (NASDAQ:FISI) are both small-cap finance companies, but which is the better business? We will contrast the two businesses based on the strength of their analyst recommendations, profitability, institutional ownership, risk, dividends, valuation and earnings.

Volatility & Risk

First Mid-Illinois Bancshares has a beta of -0.06, meaning that its share price is 106% less volatile than the S&P 500. Comparatively, Financial Institutions has a beta of 1.2, meaning that its share price is 20% more volatile than the S&P 500.

Earnings & Valuation

This table compares First Mid-Illinois Bancshares and Financial Institutions’ gross revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
First Mid-Illinois Bancshares $109.60 million 3.99 N/A N/A N/A
Financial Institutions $127.68 million 3.06 $30.75 million $2.05 12.71

Financial Institutions has higher revenue and earnings than First Mid-Illinois Bancshares.

Dividends

First Mid-Illinois Bancshares pays an annual dividend of $0.64 per share and has a dividend yield of 1.8%. Financial Institutions pays an annual dividend of $0.84 per share and has a dividend yield of 3.2%. Financial Institutions pays out 41.0% of its earnings in the form of a dividend.

Analyst Ratings

This is a summary of recent ratings and recommmendations for First Mid-Illinois Bancshares and Financial Institutions, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
First Mid-Illinois Bancshares 0 2 0 0 2.00
Financial Institutions 0 2 1 0 2.33

First Mid-Illinois Bancshares currently has a consensus price target of $37.00, indicating a potential upside of 5.84%. Financial Institutions has a consensus price target of $32.25, indicating a potential upside of 23.80%. Given Financial Institutions’ stronger consensus rating and higher probable upside, analysts clearly believe Financial Institutions is more favorable than First Mid-Illinois Bancshares.

Profitability

This table compares First Mid-Illinois Bancshares and Financial Institutions’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
First Mid-Illinois Bancshares 22.04% 9.16% 0.94%
Financial Institutions 20.08% 10.03% 0.83%

Insider and Institutional Ownership

20.1% of First Mid-Illinois Bancshares shares are owned by institutional investors. Comparatively, 67.1% of Financial Institutions shares are owned by institutional investors. 20.3% of First Mid-Illinois Bancshares shares are owned by company insiders. Comparatively, 5.5% of Financial Institutions shares are owned by company insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a company will outperform the market over the long term.

Summary

Financial Institutions beats First Mid-Illinois Bancshares on 8 of the 13 factors compared between the two stocks.

About First Mid-Illinois Bancshares

First Mid-Illinois Bancshares, Inc. is a financial holding company. The Company is engaged in the business of banking through its subsidiaries, First Mid-Illinois Bank & Trust, N.A. (First Mid Bank) and First Clover Leaf Bank, N.A. (First Clover Leaf Bank). The Company provides data processing services to affiliates through another subsidiary, Mid-Illinois Data Services, Inc. (MIDS). The Company offers insurance products and services to customers through its subsidiary, The Checkley Agency, Inc., doing business as First Mid Insurance Group (First Mid Insurance). The Company also owns three statutory business trusts, First Mid-Illinois Statutory Trust I (First Mid Trust I), and First Mid-Illinois Statutory Trust II (First Mid Trust II), and Clover Leaf Statutory Trust I (CLST Trust). As of December 31, 2016, the Company operated in three primary lines of business: community banking, wealth management, and insurance brokerage.

About Financial Institutions

Financial Institutions, Inc. is a financial holding company. The Company conducts its business through its subsidiaries: Five Star Bank (the Bank), a New York chartered bank; Scott Danahy Naylon, LLC (SDN), a full service insurance agency, and Courier Capital, LLC (Courier Capital), an investment advisory and wealth management company. The Company operates through two segments: Banking and Non-Banking. The Banking segment includes all of the Company’s retail and commercial banking operations. The Non-Banking segment includes the activities of SDN and Courier Capital. The Company offers a range of banking and related financial services to consumer, commercial and municipal customers through its bank and nonbank subsidiaries. The Company’s indirect lending network includes relationships with franchised automobile dealers in Western and Central New York, the Capital District of New York and Northern and Central Pennsylvania.

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