VersaBank (NASDAQ:VBNK) and First Seacoast Bancorp (NASDAQ:FSEA) Critical Review

First Seacoast Bancorp (NASDAQ:FSEA) and VersaBank (NASDAQ:VBNK) are both small-cap finance companies, but which is the superior stock? We will compare the two companies based on the strength of their profitability, valuation, risk, analyst recommendations, earnings, dividends and institutional ownership.

Volatility & Risk

First Seacoast Bancorp has a beta of 0.16, suggesting that its share price is 84% less volatile than the S&P 500. Comparatively, VersaBank has a beta of 1.06, suggesting that its share price is 6% more volatile than the S&P 500.

Earnings and Valuation

This table compares First Seacoast Bancorp and VersaBank”s gross revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
First Seacoast Bancorp	$28.74 million	2.81	-$850,000.00	($0.04)	-429.68
VersaBank	$217.14 million	3.38	$20.32 million	$0.76	29.91

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

Profitability

This table compares First Seacoast Bancorp and VersaBank’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
First Seacoast Bancorp	0.15%	0.07%	0.01%
VersaBank	9.92%	8.66%	0.75%

Institutional & Insider Ownership

38.4% of First Seacoast Bancorp shares are held by institutional investors. Comparatively, 56.9% of VersaBank shares are held by institutional investors. 7.8% of First Seacoast Bancorp shares are held by insiders. Comparatively, 5.3% of VersaBank shares are held by insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a company will outperform the market over the long term.

Analyst Recommendations

This is a summary of current recommendations for First Seacoast Bancorp and VersaBank, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
First Seacoast Bancorp	0	1	0	0	2.00
VersaBank	0	2	2	0	2.50

VersaBank has a consensus price target of $24.00, suggesting a potential upside of 5.59%. Given VersaBank’s stronger consensus rating and higher probable upside, analysts clearly believe VersaBank is more favorable than First Seacoast Bancorp.

Summary

VersaBank beats First Seacoast Bancorp on 13 of the 14 factors compared between the two stocks.

About First Seacoast Bancorp

First Seacoast Bancorp, Inc. operates as the holding company for First Seacoast Bank that provides commercial and consumer banking services for individuals and businesses. The company offers interest-bearing and non-interest-bearing checking, savings, and money market accounts, as well as time deposits. It also provides various lending products comprising one- to four-family residential real estate loans; commercial real estate and multi-family real estate loans; acquisition, development, and land loans; commercial and industrial loans; home equity loans and lines of credit; and consumer loans. In addition, the company offers wealth management services, such as retirement planning, portfolio management, investment and insurance strategies, business retirement plans, and college planning services. The company was founded in 1890 and is headquartered in Dover, New Hampshire. First Seacoast Bancorp, Inc. is a subsidiary of First Seacoast Bancorp, MHC.

About VersaBank

VersaBank provides various banking products and services in Canada and the United States. It offers deposit products, such as web-based chequing accounts, guaranteed investment certificates, registered retirement savings plans, and tax-free savings accounts, as well as deposit insurance products. The company also provides lending services, including point of sale financing that covers purchasing loan and lease receivables from finance companies operating in various industries; commercial banking services comprising commercial real estate, public sector/infrastructure financing, and condominium financing; and residential mortgages. In addition, it offers cybersecurity services. The company was formerly known as Pacific & Western Bank of Canada and changed its name to VersaBank in May 2016. VersaBank was incorporated in 1979 and is headquartered in London, Canada.