Primis Financial (NASDAQ:FRST) versus VersaBank (NASDAQ:VBNK) Financial Review

VersaBank (NASDAQ:VBNK) and Primis Financial (NASDAQ:FRST) are both small-cap finance companies, but which is the better investment? We will contrast the two businesses based on the strength of their profitability, valuation, analyst recommendations, dividends, risk, institutional ownership and earnings.

Profitability

This table compares VersaBank and Primis Financial’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
VersaBank	9.92%	8.66%	0.75%
Primis Financial	19.27%	5.74%	0.58%

Analyst Ratings

This is a breakdown of current recommendations and price targets for VersaBank and Primis Financial, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
VersaBank	0	1	3	0	2.75
Primis Financial	1	0	2	1	2.75

VersaBank currently has a consensus target price of $24.00, indicating a potential upside of 0.80%. Primis Financial has a consensus target price of $17.50, indicating a potential upside of 19.86%. Given Primis Financial’s higher possible upside, analysts plainly believe Primis Financial is more favorable than VersaBank.

Valuation and Earnings

This table compares VersaBank and Primis Financial”s gross revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
VersaBank	$217.14 million	3.57	$20.32 million	$0.76	31.33
Primis Financial	$277.00 million	1.31	$61.44 million	$2.23	6.55

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

Dividends

VersaBank pays an annual dividend of $0.07 per share and has a dividend yield of 0.3%. Primis Financial pays an annual dividend of $0.40 per share and has a dividend yield of 2.7%. VersaBank pays out 9.2% of its earnings in the form of a dividend. Primis Financial pays out 17.9% 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.

Insider & Institutional Ownership

56.9% of VersaBank shares are owned by institutional investors. Comparatively, 75.0% of Primis Financial shares are owned by institutional investors. 5.3% of VersaBank shares are owned by company insiders. Comparatively, 10.9% of Primis Financial shares are owned by company insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a company will outperform the market over the long term.

Volatility & Risk

VersaBank has a beta of 1.03, meaning that its stock price is 3% more volatile than the S&P 500. Comparatively, Primis Financial has a beta of 0.74, meaning that its stock price is 26% less volatile than the S&P 500.

Summary

Primis Financial beats VersaBank on 9 of the 16 factors compared between the two stocks.

About VersaBank

VersaBank is a federally chartered Canadian bank that uses a digital-first model to provide banking and lending services, primarily through partnerships with financial institutions and other businesses rather than a traditional branch network. Headquartered in London, Ontario, the bank serves customers in Canada and has expanded its operations into the United States. Its activities include accepting deposits and providing commercial financing. Through its Receivable Purchase Program, VersaBank purchases portfolios of consumer financing receivables from lenders and businesses, helping those partners free up capital to support further lending.

About Primis Financial

Primis Financial Corp. is a bank holding company whose principal subsidiary, Primis Bank, provides commercial and consumer banking services. Its offerings include deposit accounts, business and personal loans, mortgage lending, and digital banking services. The company serves customers through branches in Virginia and Maryland, as well as online banking channels. Its mortgage business also supports customers beyond its branch footprint. Primis Financial was formerly known as Southern National Bancorp of Virginia and adopted its current name in 2021, alongside the rebranding of its bank subsidiary as Primis Bank.