Critical Comparison: Metropolitan Bank (MCB) & ServisFirst Bancshares (NASDAQ:SFBS)

Metropolitan Bank (NYSE:MCB) and ServisFirst Bancshares (NASDAQ:SFBS) are both small-cap finance companies, but which is the superior business? We will compare the two businesses based on the strength of their dividends, institutional ownership, profitability, valuation, analyst recommendations, risk and earnings.

Institutional and Insider Ownership

51.0% of Metropolitan Bank shares are owned by institutional investors. Comparatively, 47.7% of ServisFirst Bancshares shares are owned by institutional investors. 16.4% of Metropolitan Bank shares are owned by company insiders. Comparatively, 13.6% of ServisFirst Bancshares shares are owned 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.

Valuation & Earnings

This table compares Metropolitan Bank and ServisFirst Bancshares’ top-line revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Metropolitan Bank $96.10 million 3.44 $25.39 million $3.06 12.98
ServisFirst Bancshares $348.16 million 4.82 $136.94 million $2.53 12.39

ServisFirst Bancshares has higher revenue and earnings than Metropolitan Bank. ServisFirst Bancshares is trading at a lower price-to-earnings ratio than Metropolitan Bank, indicating that it is currently the more affordable of the two stocks.

Profitability

This table compares Metropolitan Bank and ServisFirst Bancshares’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Metropolitan Bank 27.33% 10.62% 1.29%
ServisFirst Bancshares 37.87% 19.92% 1.80%

Analyst Recommendations

This is a summary of recent recommendations and price targets for Metropolitan Bank and ServisFirst Bancshares, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Metropolitan Bank 0 1 0 0 2.00
ServisFirst Bancshares 0 1 1 0 2.50

ServisFirst Bancshares has a consensus price target of $43.00, indicating a potential upside of 37.20%. Given ServisFirst Bancshares’ stronger consensus rating and higher probable upside, analysts plainly believe ServisFirst Bancshares is more favorable than Metropolitan Bank.

Dividends

ServisFirst Bancshares pays an annual dividend of $0.60 per share and has a dividend yield of 1.9%. Metropolitan Bank does not pay a dividend. ServisFirst Bancshares pays out 23.7% of its earnings in the form of a dividend. ServisFirst Bancshares has increased its dividend for 4 consecutive years.

Risk and Volatility

Metropolitan Bank has a beta of 1.44, indicating that its share price is 44% more volatile than the S&P 500. Comparatively, ServisFirst Bancshares has a beta of 1.3, indicating that its share price is 30% more volatile than the S&P 500.

Summary

ServisFirst Bancshares beats Metropolitan Bank on 11 of the 17 factors compared between the two stocks.

About Metropolitan Bank

Metropolitan Bank Holding Corp. operates as the bank holding company for Metropolitan Commercial Bank that provides a range of business, commercial, and retail banking products and services to small businesses, middle-market enterprises, public entities, and individuals in the New York metropolitan area. It offers checking, savings, term deposit, and money market accounts, as well as certificates of deposit. The company also provides lending products, including commercial, construction, multifamily, and one-to four-family real estate loans; commercial and industrial loans; trade finance and letters of credit, term loans, and working capital lines of credit; commercial mortgages; and consumer loans. In addition, it offers cash management solutions, such as wire transfers, ACH, and foreign exchange conversion, as well as online and mobile banking, ACH, remote deposit capture, and debit card services. The company was founded in 1999 and is headquartered in New York, New York.

About ServisFirst Bancshares

ServisFirst Bancshares, Inc. operates as the bank holding company for ServisFirst Bank that provides banking services to individual and corporate customers in the United States. It offers demand, time, savings, and other deposits; checking, money market, and IRA accounts; and certificates of deposit. The company also provides commercial lending products, such as seasonal loans, bridge loans, and term loans for working capital, expansion of the business, or acquisition of property, plant, and equipment, as well as commercial lines of credit; commercial real estate loans, construction and development loans, and residential real estate loans; and consumer loans, such as home equity loans, vehicle financing, loans secured by deposits, and secured and unsecured personal loans. In addition, it offers other banking products and services comprising telephone and mobile banking, direct deposit, Internet banking, traveler's checks, safe deposit boxes, attorney trust accounts, automatic account transfers, automated teller machines, and debit card systems, as well as Visa credit cards; treasury and cash management services; wire transfer, night depository, banking-by-mail, and remote capture services; and correspondent banking services to other financial institutions. Further, the company, through its subsidiary, SF Intermediate Holding Company, Inc., operates as a real estate investment trust for the United States income tax purposes; and holds and manages participations in residential mortgages and commercial real estate loans originated by ServisFirst Bank in Alabama, Florida, Georgia, and Tennessee. It operates 20 full-service banking offices located in Jefferson, Shelby, Madison, Montgomery, Mobile, Baldwin, and Houston Counties in Alabama; Escambia and Hillsborough Counties in Florida; Cobb and Douglas Counties in Georgia; Charleston County in South Carolina; and Davidson County in Tennessee. The company was founded in 2005 and is headquartered in Birmingham, Alabama.

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