Head to Head Analysis: TowneBank (NASDAQ:TOWN) & Metropolitan Bank (NYSE:MCB)

Metropolitan Bank (NYSE:MCB) and TowneBank (NASDAQ:TOWN) are both small-cap finance companies, but which is the better investment? We will contrast the two companies based on the strength of their dividends, institutional ownership, earnings, valuation, profitability, analyst recommendations and risk.

Risk and Volatility

Metropolitan Bank has a beta of 1.14, suggesting that its stock price is 14% more volatile than the S&P 500. Comparatively, TowneBank has a beta of 0.89, suggesting that its stock price is 11% less volatile than the S&P 500.

Analyst Recommendations

This is a breakdown of current ratings and recommmendations for Metropolitan Bank and TowneBank, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Metropolitan Bank	0	0	4	0	3.00
TowneBank	0	2	1	0	2.33

Metropolitan Bank presently has a consensus target price of $56.50, suggesting a potential upside of 33.76%. TowneBank has a consensus target price of $29.50, suggesting a potential upside of 8.82%. Given Metropolitan Bank’s stronger consensus rating and higher possible upside, equities analysts plainly believe Metropolitan Bank is more favorable than TowneBank.

Earnings & Valuation

This table compares Metropolitan Bank and TowneBank’s top-line revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Metropolitan Bank	$403.31 million	1.17	$76.90 million	$6.08	6.95
TowneBank	$941.58 million	2.09	$153.71 million	$2.01	13.49

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

Insider & Institutional Ownership

79.8% of Metropolitan Bank shares are owned by institutional investors. Comparatively, 56.0% of TowneBank shares are owned by institutional investors. 7.5% of Metropolitan Bank shares are owned by insiders. Comparatively, 8.1% of TowneBank shares are owned by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a company is poised for long-term growth.

Profitability

This table compares Metropolitan Bank and TowneBank’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Metropolitan Bank	15.82%	10.71%	1.01%
TowneBank	15.50%	7.51%	0.89%

Summary

Metropolitan Bank beats TowneBank on 9 of the 14 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. The company offers checking, savings, term deposit, money market, demand deposit, and other interest-bearing transaction accounts. It also provides lending products, including commercial real estate, multi-family, construction, and one-to four-family real estate loans; commercial and industrial loans; consumer loans; acquisition and renovation loans; loans to refinance or return borrower equity; loans on owner-occupied properties; working capital lines of credit; trade finance and letters of credit; and term loans. In addition, the company offers cash management services, as well as online and mobile banking, ACH, remote deposit capture, and debit cards. The company was formerly known as Metbank Holding Corp. and changed its name to Metropolitan Bank Holding Corp. in January 2007. Metropolitan Bank Holding Corp. was incorporated in 1997 and is headquartered in New York, New York.

About TowneBank

TowneBank provides retail and commercial banking services for individuals, commercial enterprises, and professionals. The company operates through three segments: Banking, Realty, and Insurance. It accepts various deposits, including demand deposits, savings accounts, money rate savings, certificates of deposit, and individual retirement accounts. The company also offers secured and unsecured personal loans for financing automobiles, home improvements, education, and personal investments; commercial loans for working capital, business expansion, and equipment and machinery purchases; and mortgage loans, as well as real estate acquisition, development, and construction loans. In addition, it provides other services, such as safe deposit boxes, treasury management services, direct deposit of payroll and social security checks, and automatic drafts for various accounts, as well as online, mobile, and on-call banking services. Further, the company offers documentation services to accomplish tax deferral to investors; investment and asset management services; commercial mortgage brokerage services; and other financial services, such as financial, retirement, and estate planning services, as well as assistance on various investment options comprising alternative investments, annuities, margin accounts, convertible bonds, and pension and profit-sharing plans. Additionally, it provides residential real estate, relocation, property management, vacation rentals, and title and settlement services; and originates residential mortgage loans. The company also offers life, property, casualty, and vehicle insurance services; and employee benefit programs, such as health, dental, vision, and disability insurance. It operates in Richmond, Virginia, the Greater Hampton Roads region in southeastern Virginia, northeastern North Carolina, Raleigh, Charlotte, Greensboro, and Greenville, North Carolina. TowneBank was incorporated in 1998 and is based in Portsmouth, Virginia.