Reviewing First Foundation (NASDAQ:FFWM) and SVB Financial Group (OTCMKTS:SIVBQ)

SVB Financial Group (OTCMKTS:SIVBQ) and First Foundation (NASDAQ:FFWM) are both small-cap finance companies, but which is the superior business? We will compare the two businesses based on the strength of their institutional ownership, analyst recommendations, dividends, profitability, valuation, risk and earnings.

Profitability

This table compares SVB Financial Group and First Foundation’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
SVB Financial Group	N/A	N/A	N/A
First Foundation	-13.94%	-0.73%	-0.05%

Institutional & Insider Ownership

8.7% of SVB Financial Group shares are owned by institutional investors. Comparatively, 73.1% of First Foundation shares are owned by institutional investors. 0.6% of SVB Financial Group shares are owned by company insiders. Comparatively, 9.5% of First Foundation shares are owned by company insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a stock will outperform the market over the long term.

Analyst Recommendations

This is a summary of current recommendations for SVB Financial Group and First Foundation, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
SVB Financial Group	0	0	0	0	0.00
First Foundation	0	1	3	0	2.75

First Foundation has a consensus price target of $6.58, indicating a potential upside of 17.56%. Given First Foundation’s stronger consensus rating and higher possible upside, analysts clearly believe First Foundation is more favorable than SVB Financial Group.

Valuation and Earnings

This table compares SVB Financial Group and First Foundation”s gross revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
SVB Financial Group	$7.40 billion	0.00	$1.67 billion	$25.35	0.00
First Foundation	$190.67 million	2.43	-$92.41 million	($1.89)	-2.96

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

Volatility and Risk

SVB Financial Group has a beta of 0.98, indicating that its stock price is 2% less volatile than the S&P 500. Comparatively, First Foundation has a beta of 0.92, indicating that its stock price is 8% less volatile than the S&P 500.

Summary

SVB Financial Group beats First Foundation on 8 of the 14 factors compared between the two stocks.

About SVB Financial Group

SVB Financial Group, a diversified financial services company, offers various banking and financial products and services. It operates through four segments: Silicon Valley Bank, SVB Private, SVB Capital, and SVB Securities. The Silicon Valley Bank segment provides commercial banking products and services, including credit, treasury management, foreign exchange, trade finance, and other financial products and services. This segment also offers traditional term, growth capital term, and equipment loans, asset-based loans, revolving lines of credit, warehouse facilities, recurring revenue and acquisition finance facilities, mezzanine lending, corporate working capital facilities, and credit card programs; treasury management products and services; business and analysis checking, money market, multi-currency, in-country bank, and sweep accounts; receivables services, which include merchant services, remote capture, lockbox, and fraud control services; wire transfer and automated clearing house payment services; business bill pay, credit and debit cards, account analysis, and disbursement services. In addition, it offers foreign exchange and trade finance products and services; letters of credit; and investment services and solutions. The SVB Private segment offers mortgages, home equity lines of credit, restricted and private stock loans, capital call lines of credit, and other secured and unsecured lending products; planning-based financial strategies, wealth management, family office, financial planning, tax planning, and trust services; and real estate secured loans. The SVB Capital segment provides venture capital investment services. The SVB Securities segment provides investment banking services; products and services, including capital raising, merger and acquisition advisory, equity research, and sales and trading. The company was founded in 1983 and is headquartered in Santa Clara, California. On March 17, 2023, SVB Financial Group, filed a voluntary petition for reorganization under Chapter 11 in the U.S. Bankruptcy Court for the Southern District of New York.

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.