Financial Analysis: First Guaranty Bancshares (NASDAQ:FGBI) & HMN Financial (NASDAQ:HMNF)

First Guaranty Bancshares (NASDAQ:FGBI) and HMN Financial (NASDAQ:HMNF) are both small-cap finance companies, but which is the superior business? We will contrast the two companies based on the strength of their valuation, analyst recommendations, earnings, risk, institutional ownership, profitability and dividends.

Profitability

This table compares First Guaranty Bancshares and HMN Financial’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
First Guaranty Bancshares 13.57% 8.19% 0.67%
HMN Financial 24.23% 11.32% 1.32%

Volatility and Risk

First Guaranty Bancshares has a beta of 0.45, indicating that its stock price is 55% less volatile than the S&P 500. Comparatively, HMN Financial has a beta of 0.19, indicating that its stock price is 81% less volatile than the S&P 500.

Insider & Institutional Ownership

11.1% of First Guaranty Bancshares shares are owned by institutional investors. Comparatively, 41.7% of HMN Financial shares are owned by institutional investors. 41.4% of First Guaranty Bancshares shares are owned by company insiders. Comparatively, 8.3% of HMN Financial shares are owned by company insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a company will outperform the market over the long term.

Analyst Ratings

This is a summary of current ratings and recommmendations for First Guaranty Bancshares and HMN Financial, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
First Guaranty Bancshares 0 0 0 0 N/A
HMN Financial 0 0 0 0 N/A

Dividends

First Guaranty Bancshares pays an annual dividend of $0.64 per share and has a dividend yield of 3.0%. HMN Financial does not pay a dividend.

Earnings and Valuation

This table compares First Guaranty Bancshares and HMN Financial’s top-line revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
First Guaranty Bancshares $83.67 million 2.25 $14.21 million N/A N/A
HMN Financial $38.10 million 2.68 $8.24 million N/A N/A

First Guaranty Bancshares has higher revenue and earnings than HMN Financial.

Summary

First Guaranty Bancshares beats HMN Financial on 6 of the 11 factors compared between the two stocks.

About First Guaranty Bancshares

First Guaranty Bancshares, Inc. operates as the holding company for First Guaranty Bank that provides commercial banking services to businesses, professionals, and individuals in Louisiana and Texas. It offers various deposit products, including personal and business checking, savings, money market, and demand accounts, as well as time deposits. The company also provides loans, such as non-farm non-residential loans secured by real estate, commercial and industrial loans, one- to four-family residential loans, construction and land development loans, agricultural loans, farmland loans, consumer and other loans, and multifamily loans. In addition, it offers a range of consumer services, including personal and commercial credit cards, remote deposit capture, safe deposit boxes, official checks, Internet banking, automated teller machines, online bill pay, mobile banking, and lockbox services. The company operates through 27 banking facilities located in market services areas of Hammond, Baton Rouge, Lafayette, Shreveport-Bossier City, Dallas-Fort Worth-Arlington, and Waco. First Guaranty Bancshares, Inc. was founded in 1934 and is headquartered in Hammond, Louisiana.

About HMN Financial

HMN Financial, Inc. operates as a bank holding company for Home Federal Savings Bank that provides retail banking products and services. The company offers various deposit accounts, such as savings, negotiable order of withdrawal, non-interest bearing checking, money market, and certificate accounts, including individual retirement accounts. It also provides single family residential loans; commercial real estate and multi-family mortgage loans; construction and commercial business loans; and consumer loans, such as home equity, automobile, recreational vehicle, mobile home, and lot loans, as well as loans secured by deposit accounts, and other loans for household and personal purposes. In addition, the company offers financial planning products and services; and invests in mortgage-backed and related securities, the United States government agency obligations, and other permissible investments. The company operates through 14 full service branches located in Minnesota and Iowa; and 2 loan production offices located in Minnesota and Wisconsin. HMN Financial, Inc. was founded in 1934 and is based in Rochester, Minnesota.

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