Financial Review: NSTS Bancorp (NASDAQ:NSTS) & Financial Institutions (NASDAQ:FISI)

NSTS Bancorp (NASDAQ:NSTS) and Financial Institutions (NASDAQ:FISI) are both small-cap finance companies, but which is the better business? We will contrast the two companies based on the strength of their risk, profitability, earnings, dividends, analyst recommendations, valuation and institutional ownership.

Institutional and Insider Ownership

23.7% of NSTS Bancorp shares are owned by institutional investors. Comparatively, 60.5% of Financial Institutions shares are owned by institutional investors. 6.2% of NSTS Bancorp shares are owned by company insiders. Comparatively, 2.7% of Financial Institutions shares are owned by company insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a company will outperform the market over the long term.

Profitability

This table compares NSTS Bancorp and Financial Institutions’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
NSTS Bancorp	-2.91%	-0.49%	-0.14%
Financial Institutions	19.81%	12.62%	1.20%

Volatility and Risk

NSTS Bancorp has a beta of 0.14, meaning that its share price is 86% less volatile than the S&P 500. Comparatively, Financial Institutions has a beta of 0.63, meaning that its share price is 37% less volatile than the S&P 500.

Analyst Recommendations

This is a summary of recent recommendations for NSTS Bancorp and Financial Institutions, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
NSTS Bancorp	1	0	0	0	1.00
Financial Institutions	0	2	2	0	2.50

Financial Institutions has a consensus price target of $37.00, indicating a potential upside of 8.66%. Given Financial Institutions’ stronger consensus rating and higher possible upside, analysts plainly believe Financial Institutions is more favorable than NSTS Bancorp.

Valuation & Earnings

This table compares NSTS Bancorp and Financial Institutions”s gross revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
NSTS Bancorp	$13.27 million	4.63	-$390,000.00	($0.08)	-145.88
Financial Institutions	$377.94 million	1.77	$74.87 million	$3.61	9.43

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

Summary

Financial Institutions beats NSTS Bancorp on 12 of the 14 factors compared between the two stocks.

About NSTS Bancorp

NSTS Bancorp, Inc. operates as a savings and loan holding company for North Shore Trust and Savings that provides banking products and services in Illinois. The company offers interest-bearing and noninterest-bearing checking, money market, savings, and time deposit accounts; and one- to four-family residential mortgage, multi-family and commercial real estate mortgage, construction, home equity, and consumer loans. It operates through full-service banking offices in Lake County, Illinois; and one loan production office in Chicago. The company was founded in 1921 and is headquartered in Waukegan, Illinois.

About Financial Institutions

Financial Institutions, Inc. operates as a holding company for the Five Star Bank, a chartered bank that provides banking and financial services to individuals, municipalities, and businesses in New York. The company provides checking and savings account programs, including money market accounts, certificates of deposit, sweep investments, and individual retirement and other qualified plan accounts, as well as NOW accounts. Its loan products include term loans and lines of credit; short and medium-term commercial loans for working capital, business expansion, and purchase of equipment; commercial business loans to the agricultural industry; commercial mortgage loans; one-to-four family residential mortgage loans, home improvement loans, closed-end home equity loans, and home equity lines of credit; and consumer loans, such as automobile, secured installment, and personal loans. The company offers personal insurance products, including automobile, homeowners, boat, recreational vehicle, landlord, and umbrella coverage; commercial insurance comprising property, liability, automobile, inland marine, workers compensation, bonds, crop, and umbrella insurance products; and financial services, such as life and disability insurance, medicare supplements, long-term care, annuities, mutual funds, and retirement programs. In addition, it offers customized investment advisory, wealth management, investment consulting, and retirement plan services, as well as operates a real estate investment trust that holds residential mortgages and commercial real estate loans. Financial Institutions, Inc. was founded in 1817 and is headquartered in Warsaw, New York.