Critical Analysis: SouthCrest Financial Group (OTCMKTS:SCSG) and Alerus Financial (NASDAQ:ALRS)

Alerus Financial (NASDAQ:ALRS) and SouthCrest Financial Group (OTCMKTS:SCSG) are both finance companies, but which is the superior stock? We will contrast the two companies based on the strength of their valuation, risk, dividends, institutional ownership, analyst recommendations, profitability and earnings.

Analyst Ratings

This is a summary of current ratings and recommmendations for Alerus Financial and SouthCrest Financial Group, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Alerus Financial	0	3	2	0	2.40
SouthCrest Financial Group	0	0	0	0	N/A

Alerus Financial presently has a consensus target price of $23.40, suggesting a potential upside of 4.89%. Given Alerus Financial’s higher probable upside, equities research analysts plainly believe Alerus Financial is more favorable than SouthCrest Financial Group.

Profitability

This table compares Alerus Financial and SouthCrest Financial Group’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Alerus Financial	2.39%	7.25%	0.64%
SouthCrest Financial Group	N/A	N/A	N/A

Valuation & Earnings

This table compares Alerus Financial and SouthCrest Financial Group”s top-line revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Alerus Financial	$167.96 million	2.63	$11.70 million	$0.49	45.53
SouthCrest Financial Group	N/A	N/A	N/A	N/A	N/A

Alerus Financial has higher revenue and earnings than SouthCrest Financial Group.

Institutional & Insider Ownership

51.3% of Alerus Financial shares are held by institutional investors. 5.6% of Alerus Financial shares are held by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a stock will outperform the market over the long term.

Summary

Alerus Financial beats SouthCrest Financial Group on 8 of the 8 factors compared between the two stocks.

About Alerus Financial

Alerus Financial Corporation operates as the bank holding company for Alerus Financial, National Association that engages in the provision of various financial services to businesses and consumers. The company operates in four segments: Banking, Mortgage, Retirement and Benefit Services, and Wealth Management. It offers various deposit products, including demand deposits, interest-bearing transaction accounts, money market accounts, time and savings deposits, checking accounts, and certificates of deposit; and treasury management products, including electronic receivables management, remote deposit capture, cash vault services, merchant services, and other cash management services. The company also provides commercial loans, business term loans, lines of credit, and commercial real estate loans, as well as construction and land development loans; consumer lending products, including residential first mortgage loans; installment loans and lines of credit; and second mortgage loans. In addition, it offers retirement plan administration and investment advisory services, employee stock ownership plan, fiduciary services, payroll, health savings accounts, and other benefit services, as well as individual retirement accounts; and financial planning, investment management, personal and corporate trust, estate administration, and custody services. Further, the company provides debit and credit cards, online banking, mobile banking/wallet, payment, private banking, payroll accounts, flex spending accounts, administration, and government health insurance program services. It offers banking services in North Dakota, Minnesota, and Arizona; and retirement and benefit plans through offices located in Michigan, Minnesota, and Colorado. The company was formerly known as First National Bank North Dakota and changed its name to Alerus Financial Corporation in 2000. Alerus Financial Corporation was founded in 1879 and is headquartered in Grand Forks, North Dakota.

About SouthCrest Financial Group

SouthCrest Financial Group, Inc. operates as the bank holding company for SouthCrest Bank, N.A. that provides various banking products and services. It offers checking, savings, and money market accounts; and certificates of deposit. The company also provides personal loans for cars, boats, recreational vehicles, and other purchases; home equity lines of credit; loans on investment properties; owner occupied real estate, acquisition construction and development, professional practice acquisition, equipment and inventory, construction to permanent, and investment real estate loans; and working capital and lines of credit. In addition, it offers credit cards; remote deposit capture, positive pay, ACH, online wires, merchant, and reorder checks services; and online banking, online bill pay, mobile banking and deposit, and telephone banking services. The company serves retail, private, entrepreneurial, high-net-worth, and commercial customers. It operates through 9 branches in Georgia. SouthCrest Financial Group, Inc. was founded in 1910 and is headquartered in Atlanta, Georgia.