FinWise Bancorp (NASDAQ:FINW) & First Foundation (NYSE:FFWM) Critical Comparison

First Foundation (NYSE:FFWM) and FinWise Bancorp (NASDAQ:FINW) are both small-cap finance companies, but which is the superior investment? We will contrast the two businesses based on the strength of their earnings, risk, analyst recommendations, valuation, institutional ownership, dividends and profitability.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
First Foundation	-26.37%	1.06%	0.08%
FinWise Bancorp	10.66%	8.82%	1.90%

Insider & Institutional Ownership

73.1% of First Foundation shares are held by institutional investors. Comparatively, 35.4% of FinWise Bancorp shares are held by institutional investors. 9.5% of First Foundation shares are held by insiders. Comparatively, 21.3% of FinWise Bancorp shares are held by insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a stock will outperform the market over the long term.

Analyst Ratings

This is a breakdown of recent recommendations for First Foundation and FinWise Bancorp, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
First Foundation	1	2	2	1	2.50
FinWise Bancorp	0	2	1	0	2.33

First Foundation presently has a consensus price target of $6.58, suggesting a potential upside of 18.09%. FinWise Bancorp has a consensus price target of $22.00, suggesting a potential upside of 39.51%. Given FinWise Bancorp’s higher possible upside, analysts plainly believe FinWise Bancorp is more favorable than First Foundation.

Risk and Volatility

First Foundation has a beta of 0.92, indicating that its stock price is 8% less volatile than the S&P 500. Comparatively, FinWise Bancorp has a beta of 0.82, indicating that its stock price is 18% less volatile than the S&P 500.

Valuation & Earnings

This table compares First Foundation and FinWise 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 Foundation	$588.36 million	0.79	-$155.16 million	($1.89)	-2.95
FinWise Bancorp	$150.96 million	1.42	$16.09 million	$1.13	13.96

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

Summary

FinWise Bancorp beats First Foundation on 9 of the 15 factors compared between the two stocks.

About First Foundation

First Foundation Inc., through its subsidiaries, provides personal banking, business banking, and private wealth management services in the United States. It operates through two segments, Banking and Wealth Management. The company offers a range of bank deposit products, including personal and business checking accounts, savings accounts, interest-bearing negotiable order of withdrawal 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, and 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. It also provides various specialized services comprising trust services, internet 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, the company offers investment management and financial planning services; treasury management services; advisory and coordination services in the areas of estate planning, retirement planning, and charitable and business ownership issues; and financial, investment, and economic advisory and related services. Further, it provides support services, including the processing and transmission of financial and economic data for charitable organizations. The company operates through a network of 28 branch offices and 3 loan production offices in California, Nevada, Texas, and Hawaii. First Foundation Inc. was founded in 1985 and is headquartered in Dallas, Texas.

About FinWise Bancorp

FinWise Bancorp operates as the bank holding company for FinWise Bank that provides various banking products and services to individual and corporate customers in Utah. The company offers various deposit products, including interest and noninterest bearing demand accounts, health savings account demand deposits, NOW and money market accounts, and checking and savings accounts, as well as time deposits and certificates of deposits. It also provides loans, including consumer, small business administration, commercial, commercial real estate, and residential real estate loans. In addition, the company offers debit cards, remote deposit capture, online banking, mobile banking, and direct deposit services; and business accounts and cash management services, such as business checking and savings accounts, and treasury services. FinWise Bancorp was founded in 1999 and is headquartered in Murray, Utah.