Financial Analysis: Midland States Bancorp (NASDAQ:MSBI) vs. FB Financial (NYSE:FBK)

FB Financial (NYSE:FBK) and Midland States Bancorp (NASDAQ:MSBI) are both finance companies, but which is the superior business? We will contrast the two companies based on the strength of their risk, earnings, profitability, analyst recommendations, institutional ownership, valuation and dividends.

Institutional & Insider Ownership

65.4% of FB Financial shares are held by institutional investors. Comparatively, 60.9% of Midland States Bancorp shares are held by institutional investors. 2.0% of FB Financial shares are held by insiders. Comparatively, 8.6% of Midland States Bancorp shares are held by insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a company will outperform the market over the long term.

Profitability

This table compares FB Financial and Midland States Bancorp’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
FB Financial	14.26%	11.64%	1.40%
Midland States Bancorp	7.53%	11.55%	0.78%

Analyst Ratings

This is a summary of recent ratings and price targets for FB Financial and Midland States Bancorp, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
FB Financial	0	0	5	1	3.17
Midland States Bancorp	0	5	0	1	2.33

FB Financial presently has a consensus target price of $64.00, suggesting a potential upside of 18.68%. Midland States Bancorp has a consensus target price of $23.90, suggesting a potential downside of 15.67%. Given FB Financial’s stronger consensus rating and higher possible upside, analysts clearly believe FB Financial is more favorable than Midland States Bancorp.

Earnings and Valuation

This table compares FB Financial and Midland States Bancorp”s top-line revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
FB Financial	$602.54 million	4.61	$122.62 million	$2.66	20.27
Midland States Bancorp	$291.51 million	2.02	-$124.28 million	$1.18	24.02

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

Dividends

FB Financial pays an annual dividend of $0.84 per share and has a dividend yield of 1.6%. Midland States Bancorp pays an annual dividend of $1.28 per share and has a dividend yield of 4.5%. FB Financial pays out 31.6% of its earnings in the form of a dividend. Midland States Bancorp pays out 108.5% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. FB Financial has increased its dividend for 8 consecutive years and Midland States Bancorp has increased its dividend for 1 consecutive years.

Risk and Volatility

FB Financial has a beta of 0.97, meaning that its stock price is 3% less volatile than the S&P 500. Comparatively, Midland States Bancorp has a beta of 0.66, meaning that its stock price is 34% less volatile than the S&P 500.

Summary

FB Financial beats Midland States Bancorp on 14 of the 17 factors compared between the two stocks.

About FB Financial

FB Financial Corporation operates as a bank holding company for FirstBank that provides a suite of commercial and consumer banking services to businesses, professionals, and individuals. The company operates in segments, such as Banking and Mortgage. It offers checking, demand, money market, and savings accounts; deposit and lending products and services to corporate, commercial, and consumer customers; and time deposits and certificates of deposits, as well as residential mortgage loans. The company also provides owner-occupied and non-owner-occupied real estate commercial, residential real estate 1-4 family mortgage, multi-family residential, commercial and industrial, construction, land acquisition, residential lines of credit, and land development loans; and consumer and other loans, such as car, boat, and other recreational vehicle loans, as well as manufactured homes without real estate and personal lines of credit. In addition, the company offers mortgage banking services through its bank branch network and mortgage banking offices in the southeastern United States; direct-to-consumer internet delivery channel; and trust, insurance, and investment services, as well as online and mobile banking services. The company operates full-service bank branches and limited-service branches locations throughout Tennessee, Nashville, Chattanooga, Knoxville, Memphis, Jackson, Birmingham, Florence, Huntsville, Alabama, Bowling Green, and Kentucky; and mortgage offices throughout the southeastern United States. The company was formerly known as First South Bancorp, Inc. and changed its name to FB Financial Corporation in 2016. FB Financial Corporation was founded in 1906 and is headquartered in Nashville, Tennessee.

About Midland States Bancorp

Midland States Bancorp, Inc. operates as a financial holding company for Midland States Bank that provides various banking products and services to individuals, businesses, municipalities, and other entities. It operates through Banking, Wealth Management, and Other segments. The company provides a range of financial products and services to consumers and businesses, including commercial loans to finance agricultural equipment and production; and commercial real estate loans for owner occupied offices, warehouses and production facilities, office buildings, hotels, mixed-use residential and commercial facilities, retail centers, multifamily properties, and assisted living facilities. In addition, it offers construction and land development loans, such as real estate investment properties and residential developments, and lesser extent loans; and residential real estate loans, which includes first and second mortgage loans, and home equity lines of credit consisting of loans secured by first or second mortgages on primarily owner occupied primary residences. The company also provides consumer installment loans for the purchase of cars, boats and other recreational vehicles, as well as for the purchase of major appliances and other home improvement projects; and commercial equipment leasing programs for manufacturing, construction, transportation, and healthcare industries. Further, it offers merchant services; deposit products, including checking, time, savings, money market, and certificates of deposit, as well as sweep accounts; letters of credit; and trust and wealth management services, such as financial and estate planning, trustee and custodial, investment management, tax, insurance, and business planning, corporate retirement plan consulting and administration, and retail brokerage services. The company was founded in 1881 and is headquartered in Effingham, Illinois.