Critical Contrast: Third Coast Bancshares (NASDAQ:TCBX) and NB Bancorp (NASDAQ:NBBK)

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

Analyst Ratings

This is a summary of current ratings and price targets for Third Coast Bancshares and NB Bancorp, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Third Coast Bancshares	0	2	2	0	2.50
NB Bancorp	0	0	1	0	3.00

Third Coast Bancshares presently has a consensus target price of $37.25, suggesting a potential upside of 12.23%. NB Bancorp has a consensus target price of $22.00, suggesting a potential upside of 17.08%. Given NB Bancorp’s stronger consensus rating and higher probable upside, analysts clearly believe NB Bancorp is more favorable than Third Coast Bancshares.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
Third Coast Bancshares	14.06%	10.93%	1.04%
NB Bancorp	13.86%	6.04%	0.93%

Valuation and Earnings

This table compares Third Coast Bancshares and NB Bancorp”s revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Third Coast Bancshares	$170.48 million	2.68	$47.67 million	$2.77	11.98
NB Bancorp	$172.73 million	4.55	$42.15 million	$1.07	17.56

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

Institutional & Insider Ownership

36.9% of Third Coast Bancshares shares are owned by institutional investors. 10.2% of Third Coast Bancshares shares are owned by company insiders. Comparatively, 1.9% of NB Bancorp 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.

Risk and Volatility

Third Coast Bancshares has a beta of 0.32, suggesting that its share price is 68% less volatile than the S&P 500. Comparatively, NB Bancorp has a beta of 0.16, suggesting that its share price is 84% less volatile than the S&P 500.

Summary

Third Coast Bancshares beats NB Bancorp on 9 of the 14 factors compared between the two stocks.

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.

About NB Bancorp

NB Bancorp, Inc. focuses on operating as a bank holding company for Needham Bank that provides various banking products and services in Greater Boston metropolitan area and surrounding communities in Massachusetts, eastern Connecticut, southern New Hampshire, and Rhode Island. The company offers various deposits, including certificate of deposit, individual retirement, money market, savings, NOW, demand deposit, and interest-bearing and noninterest-bearing checking accounts; and commercial real estate and multifamily, one- to four-family residential real estate, construction and land development, commercial and industrial, and consumer loans, as well as home equity loans and lines of credit. It also invests in securities consisting of U.S. treasury and federal agency securities, government-sponsored residential mortgage-backed securities, municipal bonds, and corporate bonds. The company was founded in 1892 and is based in Needham, Massachusetts.