Critical Review: International Bancshares (NASDAQ:IBOC) & First Foundation (NYSE:FFWM)

First Foundation (NYSE:FFWM) and International Bancshares (NASDAQ:IBOC) are both finance companies, but which is the superior stock? We will compare the two companies based on the strength of their earnings, valuation, analyst recommendations, risk, dividends, institutional ownership and profitability.

Analyst Ratings

This is a summary of current ratings and recommmendations for First Foundation and International Bancshares, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
First Foundation	1	2	0	1	2.25
International Bancshares	0	0	1	0	3.00

International Bancshares has a consensus price target of $85.00, suggesting a potential upside of 24.38%. Given International Bancshares’ stronger consensus rating and higher probable upside, analysts plainly believe International Bancshares is more favorable than First Foundation.

Profitability

This table compares First Foundation and International Bancshares’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
First Foundation	-26.37%	1.06%	0.08%
International Bancshares	40.10%	14.20%	2.59%

Earnings and Valuation

This table compares First Foundation and International Bancshares”s revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
First Foundation	$588.36 million	0.84	-$155.16 million	($1.89)	-3.16
International Bancshares	$1.04 billion	4.07	$409.17 million	$6.76	10.11

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

Insider and Institutional Ownership

73.1% of First Foundation shares are held by institutional investors. Comparatively, 65.9% of International Bancshares shares are held by institutional investors. 9.5% of First Foundation shares are held by company insiders. Comparatively, 13.4% of International Bancshares shares are held by company insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a stock will outperform the market over the long term.

Volatility and Risk

First Foundation has a beta of 0.93, indicating that its stock price is 7% less volatile than the S&P 500. Comparatively, International Bancshares has a beta of 0.73, indicating that its stock price is 27% less volatile than the S&P 500.

Summary

International Bancshares beats First Foundation on 12 of the 15 factors compared between the two stocks.

About First Foundation

First Foundation Inc., through its subsidiaries, provides personal banking, business banking, and private wealth management services in the United States. It operates through two segments, Banking and Wealth Management. The company offers a range of bank deposit products, including personal and business checking accounts, savings accounts, interest-bearing negotiable order of withdrawal 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, and 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. It also provides various specialized services comprising trust services, internet 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, the company offers investment management and financial planning services; treasury management services; advisory and coordination services in the areas of estate planning, retirement planning, and charitable and business ownership issues; and financial, investment, and economic advisory and related services. Further, it provides support services, including the processing and transmission of financial and economic data for charitable organizations. The company operates through a network of 28 branch offices and 3 loan production offices in California, Nevada, Texas, and Hawaii. First Foundation Inc. was founded in 1985 and is headquartered in Dallas, Texas.

About International Bancshares

International Bancshares Corporation, a financial holding company, provides commercial and retail banking services in Texas and the State of Oklahoma. It accepts checking and saving deposits; and offers commercial, real estate, personal, home improvement, automobile, and other installment and term loans. The company also provides international banking services, including letters of credit, commercial and industrial loans, and foreign exchange services. In addition, it offers other banking related services, such as credit cards, safety deposit boxes, collection, notary public, escrow, drive up and walk up facilities, and other customary banking services; and Internet banking services, as well as securities products through third party providers. The company was founded in 1966 and is headquartered in Laredo, Texas.