Critical Analysis: John Marshall Bancorp (NASDAQ:JMSB) and First Interstate BancSystem (NASDAQ:FIBK)

John Marshall Bancorp (NASDAQ:JMSB) and First Interstate BancSystem (NASDAQ:FIBK) are both finance companies, but which is the better investment? We will compare the two companies based on the strength of their valuation, profitability, institutional ownership, risk, earnings, dividends and analyst recommendations.

Dividends

John Marshall Bancorp pays an annual dividend of $0.25 per share and has a dividend yield of 1.5%. First Interstate BancSystem pays an annual dividend of $1.88 per share and has a dividend yield of 6.5%. John Marshall Bancorp pays out 20.8% of its earnings in the form of a dividend. First Interstate BancSystem pays out 85.8% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future.

Analyst Ratings

This is a breakdown of recent recommendations and price targets for John Marshall Bancorp and First Interstate BancSystem, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
John Marshall Bancorp	0	0	0	0	0.00
First Interstate BancSystem	2	2	3	0	2.14

First Interstate BancSystem has a consensus price target of $36.14, suggesting a potential upside of 25.28%. Given First Interstate BancSystem’s stronger consensus rating and higher probable upside, analysts clearly believe First Interstate BancSystem is more favorable than John Marshall Bancorp.

Profitability

This table compares John Marshall Bancorp and First Interstate BancSystem’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
John Marshall Bancorp	15.23%	7.20%	0.76%
First Interstate BancSystem	15.94%	6.92%	0.75%

Institutional and Insider Ownership

39.1% of John Marshall Bancorp shares are held by institutional investors. Comparatively, 88.7% of First Interstate BancSystem shares are held by institutional investors. 12.7% of John Marshall Bancorp shares are held by company insiders. Comparatively, 6.9% of First Interstate BancSystem shares are held by company insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a company is poised for long-term growth.

Earnings and Valuation

This table compares John Marshall Bancorp and First Interstate BancSystem”s top-line revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
John Marshall Bancorp	$53.32 million	4.60	$17.12 million	$1.20	14.34
First Interstate BancSystem	$999.70 million	3.02	$226.00 million	$2.19	13.17

First Interstate BancSystem has higher revenue and earnings than John Marshall Bancorp. First Interstate BancSystem is trading at a lower price-to-earnings ratio than John Marshall Bancorp, indicating that it is currently the more affordable of the two stocks.

Risk & Volatility

John Marshall Bancorp has a beta of 0.64, suggesting that its stock price is 36% less volatile than the S&P 500. Comparatively, First Interstate BancSystem has a beta of 0.84, suggesting that its stock price is 16% less volatile than the S&P 500.

Summary

First Interstate BancSystem beats John Marshall Bancorp on 10 of the 16 factors compared between the two stocks.

About John Marshall Bancorp

John Marshall Bancorp, Inc. operates as the bank holding company for John Marshall Bank that provides banking products and financial services. The company accepts checking, demand, NOW, savings, and money market accounts, as well as certificates of deposit. It offers residential and commercial construction and development loans, commercial term, mortgage, commercial real estate, industrial loans, and other commercial lines of credit; debit and credit cards; and treasury and cash management, investment, business and personal insurance, remote deposit capture, deposit sweep and online and mobile banking services. The company serves small to medium-sized businesses, their owners and employees, professional corporations, non-profits, and individuals. The company was founded in 2005 and is headquartered in Reston, Virginia.

About First Interstate BancSystem

First Interstate BancSystem, Inc. operates as the bank holding company for First Interstate Bank that provides range of banking products and services in the United States. It offers various traditional depository products, including checking, savings, and time deposits; and repurchase agreements primarily for commercial and municipal depositors. The company also offers real estate loans comprising commercial real estate, construction, residential, agricultural, and other real estate loans; consumer loans comprising direct personal loans, credit card loans and lines of credit, and indirect loans; variable and fixed rate commercial loans for small and medium-sized manufacturing, wholesale, retail, and service businesses for working capital needs and business expansions; and agricultural loans. In addition, it provides a range of trust, employee benefit, investment management, insurance, agency, and custodial services to individuals, businesses, and nonprofit organizations. Further, the company offers marketing, credit review, loan servicing, credit cards issuance and servicing, mortgage loan sales and servicing, indirect consumer loan purchasing and processing, loan collection services, other operational, and specialized staff support services, as well as online and mobile banking services. The company serves individuals, businesses, municipalities, and other entities in various industries, including agriculture, construction, education, governmental services, healthcare, hospitality, housing, professional services, real estate development, retail, technology, tourism, and wholesale trade. First Interstate BancSystem, Inc. was incorporated in 1971 and is headquartered in Billings, Montana.