Head to Head Review: ServisFirst Bancshares (SFBS) & Metro Bancorp (METR)

ServisFirst Bancshares (NASDAQ: SFBS) and Metro Bancorp (NASDAQ:METR) are both financials companies, but which is the superior business? We will contrast the two businesses based on the strength of their institutional ownership, profitability, analyst recommendations, earnings, risk, valuation and dividends.

Institutional and Insider Ownership

43.2% of ServisFirst Bancshares shares are held by institutional investors. 14.0% of ServisFirst Bancshares shares are held by company 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.

Earnings and Valuation

This table compares ServisFirst Bancshares and Metro Bancorp’s top-line revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
ServisFirst Bancshares $231.01 million 9.48 $81.47 million $1.73 23.89
Metro Bancorp N/A N/A N/A $1.40 20.14

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

Dividends

ServisFirst Bancshares pays an annual dividend of $0.20 per share and has a dividend yield of 0.5%. Metro Bancorp pays an annual dividend of $0.28 per share and has a dividend yield of 1.0%. ServisFirst Bancshares pays out 11.6% of its earnings in the form of a dividend. Metro Bancorp pays out 20.0% 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.

Analyst Ratings

This is a summary of current recommendations and price targets for ServisFirst Bancshares and Metro Bancorp, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
ServisFirst Bancshares 0 2 0 0 2.00
Metro Bancorp 0 0 0 0 N/A

ServisFirst Bancshares presently has a consensus target price of $37.50, suggesting a potential downside of 9.27%. Given ServisFirst Bancshares’ higher probable upside, analysts plainly believe ServisFirst Bancshares is more favorable than Metro Bancorp.

Profitability

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

Net Margins Return on Equity Return on Assets
ServisFirst Bancshares 35.08% 16.84% 1.46%
Metro Bancorp 16.68% 7.88% 0.75%

Summary

ServisFirst Bancshares beats Metro Bancorp on 10 of the 11 factors compared between the two stocks.

About ServisFirst Bancshares

ServisFirst Bancshares, Inc. is a bank holding company whose business is conducted by its subsidiary, ServisFirst Bank (the Bank). The Company’s principal business is to accept deposits from the public and to make loans and other investments. The Company, through its bank, originates commercial, consumer and other loans; accept deposits; provides electronic banking services, such as online and mobile banking, including remote deposit capture, deliver treasury and cash management services, and provides correspondent banking services to other financial institutions. The Company’s principal sources of funds for loans and investments are demand, time, savings and other deposits and the amortization and prepayment of loans and borrowings. The Company offers a range of products and services, including round the clock telephone banking, direct deposit, Internet banking, mobile banking, traveler’s checks, safe deposit boxes, attorney trust accounts and automatic account transfers.

About Metro Bancorp

Metro Bancorp, Inc. is a bank holding company. The Company provides full banking services through its subsidiary, Metro Bank (the Bank), which is a state-chartered bank. The Bank offers its lending and depository services from its main store in Lemoyne, Pennsylvania, and its around 33 other full-service stores located in Cumberland, Dauphin, York, Berks, Lancaster and Lebanon Counties, Pennsylvania. The Bank provides retail and commercial banking services for consumers and small and mid-sized companies. The Bank’s lending and investment activities are funded principally by retail deposits gathered through its retail store office network. The Bank provides a range of retail banking services and products, including free personal checking accounts and business checking accounts, regular savings accounts, money market accounts, interest checking accounts, fixed rate certificates of deposit (CDs), individual retirement accounts, club accounts, and debit card services, among others.

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