Reviewing Southern Michigan Bancorp (OTCMKTS:SOMC) and FinWise Bancorp (NASDAQ:FINW)

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

Profitability

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

	Net Margins	Return on Equity	Return on Assets
Southern Michigan Bancorp	12.27%	10.19%	0.70%
FinWise Bancorp	14.78%	8.75%	2.33%

Institutional and Insider Ownership

35.4% of FinWise Bancorp shares are owned by institutional investors. 19.2% of FinWise Bancorp shares are owned by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company will outperform the market over the long term.

Valuation and Earnings

This table compares Southern Michigan Bancorp and FinWise Bancorp”s revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Southern Michigan Bancorp	$73.31 million	1.16	$10.90 million	$2.25	8.31
FinWise Bancorp	$85.61 million	2.73	$17.46 million	$1.06	16.70

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

Volatility & Risk

Southern Michigan Bancorp has a beta of 0.26, suggesting that its share price is 74% less volatile than the S&P 500. Comparatively, FinWise Bancorp has a beta of 0.69, suggesting that its share price is 31% less volatile than the S&P 500.

Analyst Ratings

This is a summary of current ratings and recommmendations for Southern Michigan Bancorp and FinWise Bancorp, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Southern Michigan Bancorp	0	0	0	0	0.00
FinWise Bancorp	0	0	2	0	3.00

FinWise Bancorp has a consensus price target of $17.50, indicating a potential downside of 1.13%. Given FinWise Bancorp’s stronger consensus rating and higher possible upside, analysts plainly believe FinWise Bancorp is more favorable than Southern Michigan Bancorp.

Summary

FinWise Bancorp beats Southern Michigan Bancorp on 12 of the 14 factors compared between the two stocks.

About Southern Michigan Bancorp

Southern Michigan Bancorp, Inc. operates as the bank holding company for Southern Michigan Bank & Trust that provides a range of commercial banking services to individuals, businesses, institutions, and governmental agencies primarily in the southwest Michigan communities. Its deposit products include interest and non-interest checking, savings, and various types of money market accounts; time, savings, and demand deposits; and certificates of deposit and IRAs. The company also provides home mortgages and equity loans, home equity lines of credit, VA and FHA home loans, USDA rural development loans, and auto/personal loans; business loans, such as lines of credit, term loans, commercial real estate loans, commercial and industrial loans, agriculture loans, letters of credit, small business administration loans, and capital access loans; industrial, construction, real estate, and inventory loans; and consumer lending products comprising direct and indirect loans to purchasers of residential real property and consumer goods. In addition, it offers trust and investment services that include investment management, trustee, IRA rollovers and retirement plan, institutional and personal custody, estate settlement, wealth management, estate and wealth transfer planning assistance, charitable gift planning assistance, and cash management custody services; and safe deposit box and automated teller machine services. Further, the company provides bill pay, e-statements, ACH, wire transfer, remote deposit capture, and insurance services, as well as ATM, debit, credit, and gift cards. The company was founded in 1871 and is based in Coldwater, Michigan.

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.