Critical Analysis: Third Coast Bancshares (NASDAQ:TCBX) vs. Old National Bancorp (NASDAQ:ONB)

Old National Bancorp (NASDAQ:ONB) and Third Coast Bancshares (NASDAQ:TCBX) are both finance companies, but which is the better business? We will contrast the two companies based on the strength of their institutional ownership, dividends, profitability, earnings, analyst recommendations, risk and valuation.

Profitability

This table compares Old National Bancorp and Third Coast Bancshares’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Old National Bancorp	21.60%	11.80%	1.34%
Third Coast Bancshares	16.30%	12.05%	1.17%

Volatility and Risk

Old National Bancorp has a beta of 0.83, indicating that its stock price is 17% less volatile than the S&P 500. Comparatively, Third Coast Bancshares has a beta of 0.32, indicating that its stock price is 68% less volatile than the S&P 500.

Earnings & Valuation

This table compares Old National Bancorp and Third Coast Bancshares”s top-line revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Old National Bancorp	$3.74 billion	2.58	$669.26 million	$2.25	11.20
Third Coast Bancshares	$234.99 million	3.05	$47.67 million	$4.01	10.76

Old National Bancorp has higher revenue and earnings than Third Coast Bancshares. Third Coast Bancshares is trading at a lower price-to-earnings ratio than Old National Bancorp, indicating that it is currently the more affordable of the two stocks.

Dividends

Old National Bancorp pays an annual dividend of $0.58 per share and has a dividend yield of 2.3%. Third Coast Bancshares pays an annual dividend of $16.87 per share and has a dividend yield of 39.1%. Old National Bancorp pays out 25.8% of its earnings in the form of a dividend. Third Coast Bancshares pays out 420.7% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future.

Insider & Institutional Ownership

83.7% of Old National Bancorp shares are owned by institutional investors. Comparatively, 36.9% of Third Coast Bancshares shares are owned by institutional investors. 0.7% of Old National Bancorp shares are owned by insiders. Comparatively, 10.5% of Third Coast Bancshares shares are owned by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock will outperform the market over the long term.

Analyst Recommendations

This is a summary of current recommendations and price targets for Old National Bancorp and Third Coast Bancshares, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Old National Bancorp	0	3	11	0	2.79
Third Coast Bancshares	0	2	3	0	2.60

Old National Bancorp presently has a consensus target price of $30.15, suggesting a potential upside of 19.61%. Third Coast Bancshares has a consensus target price of $47.75, suggesting a potential upside of 10.71%. Given Old National Bancorp’s stronger consensus rating and higher probable upside, research analysts clearly believe Old National Bancorp is more favorable than Third Coast Bancshares.

Summary

Old National Bancorp beats Third Coast Bancshares on 10 of the 16 factors compared between the two stocks.

About Old National Bancorp

Old National Bancorp operates as the bank holding company for Old National Bank that provides various financial services to individual and commercial customers in the United States. It accepts deposit accounts, including noninterest-bearing demand, interest-bearing checking, negotiable order of withdrawal, savings and money market, and time deposits; and offers loans, such as home equity lines of credit, residential real estate loans, consumer loans, commercial loans, commercial real estate loans, agricultural loans, letters of credit, and lease financing. The company also provides debit and automated teller machine cards, telephone access, online banking, and other electronic and mobile banking services; cash management, private banking, brokerage, trust, investment advisory, and other traditional banking services; wealth management, investment, and foreign currency services; and treasury management, merchant, and capital markets services, as well as community development lending and equity investment solutions. The company was founded in 1834 and is headquartered in Evansville, Indiana.

About Third Coast Bancshares

Third Coast Bancshares, Inc. operates as a bank holding company for Third Coast Bank, SSB that provides various commercial banking solutions to small and medium-sized businesses, and professionals. The company's deposit products include checking, savings, individual retirement, and money market accounts, as well as certificates of deposit. It also offers commercial and industrial loans, equipment loans, working capital lines of credit, guaranteed loans, auto finance, letters of credit, commercial and residential real estate, and construction, development, and other loans. In addition, the company provides retail and commercial online banking platforms, mobile banking apps, mortgage, treasury management solutions, merchant card services, and customer digital solutions, as well as debit and credit cards. Third Coast Bancshares, Inc. was founded in 2008 and is headquartered in Humble, Texas.