Financial Contrast: First Midwest Bancorp (NASDAQ:FMBI) and AmeriServ Financial (NASDAQ:ASRV)

First Midwest Bancorp (NASDAQ:FMBI) and AmeriServ Financial (NASDAQ:ASRV) are both small-cap finance companies, but which is the better business? We will compare the two companies based on the strength of their dividends, valuation, earnings, analyst recommendations, profitability, institutional ownership and risk.

Analyst Recommendations

This is a breakdown of current recommendations and price targets for First Midwest Bancorp and AmeriServ Financial, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
First Midwest Bancorp 0 1 3 0 2.75
AmeriServ Financial 0 0 0 0 N/A

First Midwest Bancorp presently has a consensus price target of $16.38, suggesting a potential upside of 38.30%. Given First Midwest Bancorp’s higher possible upside, analysts plainly believe First Midwest Bancorp is more favorable than AmeriServ Financial.

Dividends

First Midwest Bancorp pays an annual dividend of $0.56 per share and has a dividend yield of 4.7%. AmeriServ Financial pays an annual dividend of $0.10 per share and has a dividend yield of 3.7%. First Midwest Bancorp pays out 28.3% of its earnings in the form of a dividend. First Midwest Bancorp has increased its dividend for 3 consecutive years and AmeriServ Financial has increased its dividend for 2 consecutive years. First Midwest Bancorp is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Volatility & Risk

First Midwest Bancorp has a beta of 1.23, suggesting that its share price is 23% more volatile than the S&P 500. Comparatively, AmeriServ Financial has a beta of 0.83, suggesting that its share price is 17% less volatile than the S&P 500.

Institutional & Insider Ownership

80.2% of First Midwest Bancorp shares are owned by institutional investors. Comparatively, 40.4% of AmeriServ Financial shares are owned by institutional investors. 1.1% of First Midwest Bancorp shares are owned by company insiders. Comparatively, 9.3% of AmeriServ Financial shares are owned by company insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company is poised for long-term growth.

Profitability

This table compares First Midwest Bancorp and AmeriServ Financial’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
First Midwest Bancorp 16.97% 6.70% 0.83%
AmeriServ Financial 8.11% 5.13% 0.44%

Earnings and Valuation

This table compares First Midwest Bancorp and AmeriServ Financial’s top-line revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
First Midwest Bancorp $861.62 million 1.57 $199.74 million $1.98 5.98
AmeriServ Financial $64.54 million 0.71 $6.03 million N/A N/A

First Midwest Bancorp has higher revenue and earnings than AmeriServ Financial.

Summary

First Midwest Bancorp beats AmeriServ Financial on 13 of the 15 factors compared between the two stocks.

About First Midwest Bancorp

First Midwest Bancorp, Inc. operates as the bank holding company for First Midwest Bank that provides various banking products and services. The company accepts checking, NOW, money market, and savings accounts, as well as various types of short-term and long-term certificates of deposit. Its loan products include working capital loans; accounts receivable financing; inventory and equipment financing; sector-based lending, including healthcare, asset-based lending, structured finance, and syndications; agricultural loans; and mortgages, home equity lines and loans, personal loans, specialty loans, and consumer secured loans, as well as funding for the construction, purchase, refinance, or improvement of commercial real estate properties. In addition, the company offers treasury management products and services comprising automated clearing house collection, lockbox, remote deposit capture, and financial electronic data interchange; wire transfer, account reconciliation, controlled disbursement, direct deposit, and positive pay services; information reporting services; corporate credit cards; and liquidity management, fraud prevention, and merchant services. Further, it provides fiduciary and executor, financial planning, investment advisory, employee benefit plan, and private banking services to corporate and public retirement plans, foundations and endowments, high net worth individuals, and multi-employer trust funds. Additionally, the company offers debit and automated teller machine, and credit cards; Internet and mobile, and telephone banking services; and financial education services. It serves commercial and industrial, commercial real estate, municipal, and consumer customers. The company operates 120 locations and 177 automated teller machines in greater Chicago metropolitan area, northwest Indiana, central and western Illinois, and eastern Iowa. First Midwest Bancorp, Inc. was incorporated in 1982 and is headquartered in Chicago, Illinois.

About AmeriServ Financial

AmeriServ Financial Inc. operates as the bank holding company for AmeriServ Financial Bank that provides various consumer, mortgage, and commercial financial products. It offers retail banking services, such as demand, savings, and time deposits; checking and money market accounts; secured and unsecured consumer loans, and mortgage loans; and safe deposit boxes, holiday club accounts, money orders, and traveler's checks. The company also provides lending, depository, and related financial services, such as commercial real estate mortgage loans, short and medium-term loans, revolving credit arrangements, lines of credit, inventory and accounts receivable financing, real estate-construction loans, business savings accounts, certificates of deposit, wire transfers, night depository, and lock box services to commercial, industrial, financial, and governmental customers. In addition, the company offers personal trust products and services, including personal portfolio investment management, estate planning and administration, custodial services, and pre-need trusts; institutional trust products and services comprising 401(k) plans, defined benefit and defined contribution employee benefit plans, and individual retirement accounts; financial services consisting of the sale of mutual funds, annuities, and insurance products; and union collective investment funds to invest union pension dollars in construction projects that utilize union labor. Further, it engages in underwriting as reinsurer of credit life and disability insurance. The company operates through a network of 16 banking locations in Allegheny, Cambria, Centre, Somerset, Westmoreland counties, Pennsylvania, and Washington County, Maryland; and operates 17 automated bank teller machines. AmeriServ Financial, Inc. is headquartered in Johnstown, Pennsylvania.

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