First Mid-Illinois Bancshares (FMBH) & Boston Private Financial (BPFH) Critical Review

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

Analyst Ratings

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This is a summary of recent ratings and recommmendations for First Mid-Illinois Bancshares and Boston Private Financial, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
First Mid-Illinois Bancshares 0 0 2 0 3.00
Boston Private Financial 0 5 0 0 2.00

First Mid-Illinois Bancshares currently has a consensus target price of $39.00, suggesting a potential upside of 7.71%. Boston Private Financial has a consensus target price of $16.40, suggesting a potential upside of 9.70%. Given Boston Private Financial’s higher probable upside, analysts plainly believe Boston Private Financial is more favorable than First Mid-Illinois Bancshares.

Institutional and Insider Ownership

22.8% of First Mid-Illinois Bancshares shares are owned by institutional investors. Comparatively, 92.5% of Boston Private Financial shares are owned by institutional investors. 17.8% of First Mid-Illinois Bancshares shares are owned by company insiders. Comparatively, 2.1% of Boston Private Financial shares are owned by company insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a company is poised for long-term growth.

Valuation and Earnings

This table compares First Mid-Illinois Bancshares and Boston Private Financial’s gross revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
First Mid-Illinois Bancshares $129.89 million 3.53 $26.68 million $2.24 16.17
Boston Private Financial $412.66 million 3.05 $40.59 million $0.88 16.99

Boston Private Financial has higher revenue and earnings than First Mid-Illinois Bancshares. First Mid-Illinois Bancshares is trading at a lower price-to-earnings ratio than Boston Private Financial, indicating that it is currently the more affordable of the two stocks.

Risk and Volatility

First Mid-Illinois Bancshares has a beta of 0.08, meaning that its stock price is 92% less volatile than the S&P 500. Comparatively, Boston Private Financial has a beta of 0.96, meaning that its stock price is 4% less volatile than the S&P 500.

Dividends

First Mid-Illinois Bancshares pays an annual dividend of $0.68 per share and has a dividend yield of 1.9%. Boston Private Financial pays an annual dividend of $0.48 per share and has a dividend yield of 3.2%. First Mid-Illinois Bancshares pays out 30.4% of its earnings in the form of a dividend. Boston Private Financial pays out 54.5% of its earnings in the form of a dividend. Both companies have healthy payout ratios and should be able to cover their dividend payments with earnings for the next several years.

Profitability

This table compares First Mid-Illinois Bancshares and Boston Private Financial’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
First Mid-Illinois Bancshares 20.54% 9.28% 0.99%
Boston Private Financial 9.58% 9.95% 0.90%

First Mid-Illinois Bancshares Company Profile

First Mid-Illinois Bancshares, Inc., through its subsidiaries, provides community banking products and services to commercial, retail, and agricultural customers in the United States. The company accepts various deposit products, such as demand deposits, savings accounts, NOW accounts, money market deposits, and time deposits. Its loan products include commercial real estate, commercial and industrial, agricultural and agricultural real estate, residential real estate, and consumer loans; and other loans comprising loans to municipalities to support community projects, such as infrastructure improvements or equipment purchases. The company also offers wealth management services, which include estate planning, investment, and farm management services for individuals; and employee benefit services for business enterprises. In addition, it provides commercial lines insurance to businesses, as well as homeowner, automobile, health, life, and other types of personal lines insurance to individuals. The company operates a network of 52 banking centers in 37 Illinois and Missouri communities. First Mid-Illinois Bancshares, Inc. was incorporated in 1981 and is headquartered in Mattoon, Illinois.

Boston Private Financial Company Profile

Boston Private Financial Holdings, Inc. operates as the bank holding company for Boston Private Bank & Trust Company that provides a range of banking services in the United States. The company operates through four segments: Private Banking, Wealth Management and Trust, Investment Management, and Wealth Advisory. The Private Banking segment offers private banking services to high net worth individuals, privately-owned businesses and partnerships, and nonprofit organizations; and financing services for affordable housing, first-time homebuyers, economic development, social services, community revitalization, and small businesses. It provides various deposit products. This segment also offers loans to individuals, such as residential mortgage loans, mortgage loans on investment or vacation properties, unsecured and secured personal lines of credits, home equity loans, and overdraft protection; and loans to businesses consisting of commercial and mortgage loans, revolving lines of credit, working capital loans, equipment financing, community lending programs, and construction and land loans. The Wealth Management and Trust segment provides wealth management solutions, including customized investment, wealth planning, trust, and family office services to high net worth individuals and families. The Investment Management segment offers services for pension funds, endowments, trusts, foundations and select institutions, mutual funds, and high net worth individuals and their families. The Wealth Advisory segment provides financial, estate and insurance, charitable, and intergenerational gifting and succession planning, as well as tax planning and preparation services. As of January 2, 2018, the company had offices in Boston, New York, Los Angeles, San Francisco, San Jose, Florida, and Wisconsin. Boston Private Financial Holdings, Inc. was incorporated in 1987 and is headquartered in Boston, Massachusetts.

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