Franklin Financial Network (NYSE:FSB) and Associated Banc (NYSE:ASB) Head to Head Survey

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Franklin Financial Network (NYSE:FSB) and Associated Banc (NYSE:ASB) are both small-cap finance companies, but which is the superior business? We will compare the two businesses based on the strength of their institutional ownership, earnings, dividends, profitability, valuation, risk and analyst recommendations.

Dividends

Franklin Financial Network pays an annual dividend of $0.24 per share and has a dividend yield of 0.8%. Associated Banc pays an annual dividend of $0.72 per share and has a dividend yield of 5.6%. Franklin Financial Network pays out 11.1% of its earnings in the form of a dividend. Associated Banc pays out 36.5% 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. Franklin Financial Network has increased its dividend for 1 consecutive years and Associated Banc has increased its dividend for 8 consecutive years. Associated Banc is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Insider & Institutional Ownership

63.9% of Franklin Financial Network shares are held by institutional investors. Comparatively, 71.8% of Associated Banc shares are held by institutional investors. 11.7% of Franklin Financial Network shares are held by company insiders. Comparatively, 2.4% of Associated Banc shares are held by company insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a company is poised for long-term growth.

Earnings and Valuation

This table compares Franklin Financial Network and Associated Banc’s gross revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Franklin Financial Network $202.65 million 2.25 $14.81 million $2.16 14.11
Associated Banc $1.55 billion 1.28 $326.79 million $1.97 6.55

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

Analyst Ratings

This is a summary of recent ratings and price targets for Franklin Financial Network and Associated Banc, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Franklin Financial Network 0 2 1 0 2.33
Associated Banc 1 9 0 0 1.90

Franklin Financial Network currently has a consensus target price of $36.50, indicating a potential upside of 19.75%. Associated Banc has a consensus target price of $15.88, indicating a potential upside of 23.06%. Given Associated Banc’s higher probable upside, analysts clearly believe Associated Banc is more favorable than Franklin Financial Network.

Profitability

This table compares Franklin Financial Network and Associated Banc’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Franklin Financial Network 15.25% 7.53% 0.81%
Associated Banc 21.70% 6.88% 0.74%

Volatility & Risk

Franklin Financial Network has a beta of 1.58, suggesting that its stock price is 58% more volatile than the S&P 500. Comparatively, Associated Banc has a beta of 1.25, suggesting that its stock price is 25% more volatile than the S&P 500.

Summary

Franklin Financial Network beats Associated Banc on 10 of the 17 factors compared between the two stocks.

About Franklin Financial Network

Franklin Financial Network, Inc. operates as the bank holding company for Franklin Synergy Bank that provides banking and related financial services to small businesses, corporate entities, local governments, and individuals. Its deposit products include checking, savings, and certificate of deposit accounts; and demand deposits, interest-bearing transaction accounts, money market accounts, and municipal deposits. The company also provides construction and land development, commercial real estate, residential real estate, commercial and industrial, and consumer and other loans. In addition, it offers retirement planning, financial planning, and investment services, as well as insurance products; and Internet banking, remote deposit capture, lockbox, and treasury management services. The company operates through 15 branches and a loan production office in the Williamson, Rutherford, and Davidson counties in the Nashville metropolitan area. Franklin Financial Network, Inc. was founded in 2007 and is headquartered in Franklin, Tennessee.

About Associated Banc

Associated Banc-Corp, a bank holding company, provides various banking and nonbanking products to individuals and businesses in Wisconsin, Illinois, and Minnesota. Its Corporate and Commercial Specialty segment offers deposit and cash management solutions, such as commercial checking and interest-bearing deposit products, cash vault and night depository services, liquidity solutions, payables and receivables solutions, and information services; and lending solutions, including commercial loans and lines of credit, commercial real estate financing, construction loans, letters of credit, leasing, asset based lending, and loan syndications. This segment also provides specialized financial services comprising interest rate risk management, foreign exchange solutions, and commodity hedging. The company's Community, Consumer, and Business segment offers checking, credit, debit and pre-paid cards, online banking and bill pay, and money transfer services; residential mortgages, home equity loans and lines of credit, personal and installment loans, real estate financing, business loans, and business lines of credit; savings, money market deposit accounts, IRA accounts, certificates of deposit, and fixed and variable annuities, as well as full-service, discount, and online investment brokerage; investment advisory services; trust and investment management accounts; and insurance and other related products and services. This segment also engages in the administration of pension, profit-sharing and other employee benefit plans, fiduciary and corporate agency services, and institutional asset management services. Its Risk Management and Shared Services segment provides corporate risk management, credit administration, finance, treasury, operations, and technology services. As of April 30, 2019, the company operated approximately 230 banking locations serving approximately 110 communities. Associated Banc-Corp was founded in 1861 and is headquartered in Green Bay, Wisconsin.

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