Financial Analysis: United Community Banks (UCBI) versus First Mid-Illinois Bancshares (FMBH)
United Community Banks (NASDAQ: UCBI) and First Mid-Illinois Bancshares (NASDAQ:FMBH) are both finance companies, but which is the better business? We will contrast the two companies based on the strength of their earnings, institutional ownership, dividends, analyst recommendations, profitability, valuation and risk.
This is a summary of recent recommendations and price targets for United Community Banks and First Mid-Illinois Bancshares, as provided by MarketBeat.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
|United Community Banks||0||1||4||1||3.00|
|First Mid-Illinois Bancshares||0||0||1||0||3.00|
Institutional and Insider Ownership
83.1% of United Community Banks shares are held by institutional investors. Comparatively, 21.3% of First Mid-Illinois Bancshares shares are held by institutional investors. 2.2% of United Community Banks shares are held by company insiders. Comparatively, 20.3% of First Mid-Illinois Bancshares shares are held by company insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a company is poised for long-term growth.
Risk and Volatility
United Community Banks has a beta of 0.91, meaning that its share price is 9% less volatile than the S&P 500. Comparatively, First Mid-Illinois Bancshares has a beta of -0.04, meaning that its share price is 104% less volatile than the S&P 500.
Earnings & Valuation
This table compares United Community Banks and First Mid-Illinois Bancshares’ top-line revenue, earnings per share and valuation.
|Gross Revenue||Price/Sales Ratio||Net Income||Earnings Per Share||Price/Earnings Ratio|
|United Community Banks||$477.98 million||4.93||$67.82 million||$0.94||32.34|
|First Mid-Illinois Bancshares||$129.89 million||3.47||$26.68 million||$2.14||16.62|
United Community Banks has higher revenue and earnings than First Mid-Illinois Bancshares. First Mid-Illinois Bancshares is trading at a lower price-to-earnings ratio than United Community Banks, indicating that it is currently the more affordable of the two stocks.
This table compares United Community Banks and First Mid-Illinois Bancshares’ net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
|United Community Banks||14.14%||10.12%||1.08%|
|First Mid-Illinois Bancshares||20.54%||9.33%||0.99%|
United Community Banks pays an annual dividend of $0.40 per share and has a dividend yield of 1.3%. First Mid-Illinois Bancshares pays an annual dividend of $0.68 per share and has a dividend yield of 1.9%. United Community Banks pays out 42.6% of its earnings in the form of a dividend. First Mid-Illinois Bancshares pays out 31.8% 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. First Mid-Illinois Bancshares is clearly the better dividend stock, given its higher yield and lower payout ratio.
United Community Banks beats First Mid-Illinois Bancshares on 10 of the 16 factors compared between the two stocks.
About United Community Banks
United Community Banks, Inc. (United) is a bank holding company. United conducts its operations through a community-focused operating model of separate community banks, which, as of December 31, 2016, operated at 139 locations throughout the Atlanta-Sandy Springs-Roswell, Georgia, and Gainesville, Georgia metropolitan statistical areas, upstate and coastal South Carolina, north and coastal Georgia, western North Carolina, and east Tennessee. The community banks offer a range of retail and corporate banking services, including checking, savings and time deposit accounts, secured and unsecured loans, wire transfers, brokerage services and other financial services. The Company operates through its subsidiary, United Community Bank, Blairsville, Georgia (the Bank) and Four Oaks Bank & Trust Company. The Bank owns an insurance agency, United Community Insurance Services, Inc., known as United Community Advisory Services, which is a subsidiary of the Bank.
About First Mid-Illinois Bancshares
First Mid-Illinois Bancshares, Inc. is a financial holding company. The Company is engaged in the business of banking through its subsidiaries, First Mid-Illinois Bank & Trust, N.A. (First Mid Bank) and First Clover Leaf Bank, N.A. (First Clover Leaf Bank). The Company provides data processing services to affiliates through another subsidiary, Mid-Illinois Data Services, Inc. (MIDS). The Company offers insurance products and services to customers through its subsidiary, The Checkley Agency, Inc., doing business as First Mid Insurance Group (First Mid Insurance). The Company also owns three statutory business trusts, First Mid-Illinois Statutory Trust I (First Mid Trust I), and First Mid-Illinois Statutory Trust II (First Mid Trust II), and Clover Leaf Statutory Trust I (CLST Trust). As of December 31, 2016, the Company operated in three primary lines of business: community banking, wealth management, and insurance brokerage.
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