Financial Analysis: First Foundation (NASDAQ:FFWM) versus Signature Bank (NASDAQ:SBNY)

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

Insider & Institutional Ownership

73.1% of First Foundation shares are owned by institutional investors. Comparatively, 11.1% of Signature Bank shares are owned by institutional investors. 9.5% of First Foundation shares are owned by company insiders. Comparatively, 1.5% of Signature Bank shares are owned by company insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a company is poised for long-term growth.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
First Foundation	-13.94%	-0.73%	-0.05%
Signature Bank	N/A	N/A	N/A

Analyst Ratings

This is a summary of recent recommendations for First Foundation and Signature Bank, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
First Foundation	0	2	1	0	2.33
Signature Bank	0	0	0	0	0.00

First Foundation presently has a consensus price target of $6.25, suggesting a potential upside of 30.07%. Given First Foundation’s stronger consensus rating and higher probable upside, equities analysts plainly believe First Foundation is more favorable than Signature Bank.

Valuation and Earnings

This table compares First Foundation and Signature Bank”s revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
First Foundation	$69.21 million	5.72	-$92.41 million	($1.41)	-3.41
Signature Bank	$2.70 billion	0.01	$1.34 billion	N/A	N/A

Signature Bank has higher revenue and earnings than First Foundation.

Dividends

First Foundation pays an annual dividend of $0.04 per share and has a dividend yield of 0.8%. Signature Bank pays an annual dividend of $0.70 per share and has a dividend yield of 120.7%. First Foundation pays out -2.8% of its earnings in the form of a dividend.

Risk and Volatility

First Foundation has a beta of 1, indicating that its stock price has a similar volatility profile to the S&P 500.Comparatively, Signature Bank has a beta of 11.21, indicating that its stock price is 1,021% more volatile than the S&P 500.

About First Foundation

First Foundation Inc., through its subsidiaries, provides banking services, investment advisory, wealth management, and trust services to individuals, businesses, and other organizations in the United States. The company operates in two segments, Banking and Wealth Management. It offers a range of deposit products, including personal and business checking accounts, savings accounts, interest-bearing demand deposit 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, 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. The company also provides various specialized services comprising trust services, online 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, it offers investment management and financial planning services; financial, investment, and economic advisory and related services; and treasury management services, such as bill pay, check/payee/ACH positive pay, wire origination, internal and external transfers, account reconciliation reporting, mobile deposit, lockbox, cash vault services and merchant processing. Further, the company provides support services, including the processing and transmission of financial and economic data for charitable organizations. It operates through a network of branch offices and loan production offices. The company was founded in 1985 and is headquartered in Dallas, Texas.

About Signature Bank

As of March 12, 2023, Signature Bank went out of business. Previously, the company provided digital assets banking services and comprised of certain loan portfolios. The company was incorporated in 2000 and is based in New York, New York. Signature Bank now trades on OTCPK.