Reviewing Banc of California (BANC) & Ameris Bancorp (ABCB)

Banc of California (NYSE: BANC) and Ameris Bancorp (NASDAQ:ABCB) are both small-cap finance companies, but which is the superior business? We will contrast the two businesses based on the strength of their risk, valuation, institutional ownership, analyst recommendations, profitability, dividends and earnings.

Analyst Recommendations

This is a summary of current ratings and recommmendations for Banc of California and Ameris Bancorp, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Banc of California 1 2 3 0 2.33
Ameris Bancorp 0 2 3 0 2.60

Banc of California presently has a consensus target price of $22.25, suggesting a potential upside of 13.23%. Ameris Bancorp has a consensus target price of $55.20, suggesting a potential upside of 4.94%. Given Banc of California’s higher probable upside, equities analysts plainly believe Banc of California is more favorable than Ameris Bancorp.

Profitability

This table compares Banc of California and Ameris Bancorp’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Banc of California 13.28% 9.93% 0.70%
Ameris Bancorp 18.44% 11.73% 1.23%

Volatility & Risk

Banc of California has a beta of 0.95, suggesting that its share price is 5% less volatile than the S&P 500. Comparatively, Ameris Bancorp has a beta of 1.24, suggesting that its share price is 24% more volatile than the S&P 500.

Insider & Institutional Ownership

83.3% of Ameris Bancorp shares are owned by institutional investors. 16.9% of Banc of California shares are owned by insiders. Comparatively, 3.6% of Ameris Bancorp shares are owned by insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a company is poised for long-term growth.

Valuation and Earnings

This table compares Banc of California and Ameris Bancorp’s revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Banc of California $501.02 million 1.98 $57.70 million $0.72 27.29
Ameris Bancorp $398.80 million 4.91 $73.54 million $1.99 26.43

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

Dividends

Banc of California pays an annual dividend of $0.52 per share and has a dividend yield of 2.6%. Ameris Bancorp pays an annual dividend of $0.40 per share and has a dividend yield of 0.8%. Banc of California pays out 72.2% of its earnings in the form of a dividend. Ameris Bancorp pays out 20.1% 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.

Summary

Ameris Bancorp beats Banc of California on 11 of the 15 factors compared between the two stocks.

Banc of California Company Profile

Banc of California, Inc. is a financial holding company. The Company is the parent of Banc of California, National Association (the Bank). The Company operates through Commercial Banking; Mortgage Banking, and Corporate/Other segments. As of December 31, 2016, the Bank had 90 California banking locations, including 39 full service branches in San Diego, Orange, Santa Barbara, and Los Angeles Counties. The Bank offers automated bill payment, cash and treasury management, master demand accounts, foreign exchange, interest rate swaps, trust services, card payment services, remote and mobile deposit capture, automatic clearing house (ACH) origination, wire transfer, direct deposit, and safe deposit boxes. Bank customers also have the ability to access their accounts through a nationwide network of automated teller machines (ATMs), online, telephone and mobile banking. The Bank’s lending activities are focused on providing financing to private businesses, entrepreneurs and homeowners.

Ameris Bancorp Company Profile

Ameris Bancorp is a financial holding company. The Company’s business is conducted through its banking subsidiary, Ameris Bank (the Bank), which provides a range of banking services to its retail and commercial customers. The Company operates through four segments: the Banking Division, the Retail Mortgage Division, the Warehouse Lending Division and the SBA Division. The Banking Division is engaged in the delivery of financial services, which include commercial loans, consumer loans and deposit accounts. The Retail Mortgage Division is engaged in the origination, sales and servicing of one- to four-family residential mortgage loans. The Warehouse Lending Division is engaged in the origination and servicing of warehouse lines to other businesses that are secured by underlying one- to four-family residential mortgage loans. The SBA Division is engaged in the origination, sales and servicing of small business administration (SBA) loans.

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