Head to Head Comparison: Customers Bancorp (NYSE:CUBI) and MainStreet Bancshares (NASDAQ:MNSB)

MainStreet Bancshares (NASDAQ:MNSB) and Customers Bancorp (NYSE:CUBI) are both small-cap finance companies, but which is the better investment? We will contrast the two businesses based on the strength of their risk, profitability, valuation, dividends, earnings, institutional ownership and analyst recommendations.

Analyst Recommendations

This is a summary of current ratings for MainStreet Bancshares and Customers Bancorp, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
MainStreet Bancshares	0	0	0	0	0.00
Customers Bancorp	0	5	3	1	2.56

Customers Bancorp has a consensus target price of $61.11, suggesting a potential upside of 8.16%. Given Customers Bancorp’s stronger consensus rating and higher possible upside, analysts plainly believe Customers Bancorp is more favorable than MainStreet Bancshares.

Profitability

This table compares MainStreet Bancshares and Customers Bancorp’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
MainStreet Bancshares	8.34%	5.79%	0.55%
Customers Bancorp	15.22%	13.55%	1.01%

Institutional & Insider Ownership

52.3% of MainStreet Bancshares shares are held by institutional investors. Comparatively, 89.3% of Customers Bancorp shares are held by institutional investors. 9.2% of MainStreet Bancshares shares are held by insiders. Comparatively, 6.9% of Customers Bancorp shares are held by insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a stock will outperform the market over the long term.

Earnings and Valuation

This table compares MainStreet Bancshares and Customers Bancorp”s revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
MainStreet Bancshares	$127.76 million	1.05	$26.58 million	$1.20	14.67
Customers Bancorp	$1.44 billion	1.25	$250.14 million	$6.16	9.17

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

Risk and Volatility

MainStreet Bancshares has a beta of 0.57, meaning that its stock price is 43% less volatile than the S&P 500. Comparatively, Customers Bancorp has a beta of 1.61, meaning that its stock price is 61% more volatile than the S&P 500.

Summary

Customers Bancorp beats MainStreet Bancshares on 13 of the 15 factors compared between the two stocks.

About MainStreet Bancshares

MainStreet Bancshares, Inc. operates as the bank holding company for MainStreet Bank that provides various banking products and services for individuals, small to medium-sized businesses, and professional service organizations. The company offers demand, NOW, money market, savings, and sweep accounts, as well as certificates of deposit; business and consumer checking, interest-bearing checking, business account analysis, and other depository services; and cash management, wire transfer, check imaging, bill pay, remote deposit capture, and courier services. It also provides commercial loans, include government contract receivables, plant and equipment, general working capital, contract administration, and acquisition loans; commercial real estate, real estate construction, and residential real estate loans; and consumer loans comprising term loans and overdraft protection, as well as debit and credit cards. In addition, the company offers deposit insurance solutions; remote deposit of checks; and internet bill payment, online cash management, and online and mobile banking services. It operates in Herndon, Fairfax, McLean, Leesburg, Clarendon, and Washington D.C., as well as automated teller machines. The company was incorporated in 2003 and is headquartered in Fairfax, Virginia.

About Customers Bancorp

Customers Bancorp, Inc. operates as the bank holding company for Customers Bank that provides financial products and services to individual consumers, and small and middle market businesses. The company provides deposit banking products, which includes commercial and consumer checking, non-interest-bearing and interest-bearing demand, MMDA, savings, and time deposit accounts. Its lending business offers commercial and industrial, commercial real estate, and multifamily and residential mortgage loans; SBA lending and financing; specialty lending includes fund finance, real estate specialty finance, technology and venture, and healthcare and financial institutions group; commercial loans to mortgage companies, and commercial equipment financing; and fund finance, such as variable rate loans secured by collateral pools to private debt funds; and cash management services. In addition, the company provides digital banking including Banking-as-a-Service to fintech companies, payments and treasury services to businesses, and consumer loans through fintech companies and the TassatPay, a blockchain-based instant B2B payments platform which offers instant payments including over-the-counter desks, exchanges, liquidity providers, market makers, funds, and other B2B verticals. Further, it offers mobile phone and internet banking, wire transfers, electronic bill payment, lock box, remote deposit capture, courier, merchant processing, cash vault, controlled disbursements, positive pay, and cash management services, such as account reconciliation, collections, and sweep accounts. The company was incorporated in 2010 and is headquartered in West Reading, Pennsylvania.