Head-To-Head Contrast: Byline Bancorp (NYSE:BY) and Potomac Bancshares (OTCMKTS:PTBS)

Potomac Bancshares (OTCMKTS:PTBS) and Byline Bancorp (NYSE:BY) are both small-cap finance companies, but which is the better investment? We will contrast the two companies based on the strength of their valuation, earnings, risk, profitability, analyst recommendations, institutional ownership and dividends.

Risk and Volatility

Potomac Bancshares has a beta of 0.25, meaning that its share price is 75% less volatile than the S&P 500. Comparatively, Byline Bancorp has a beta of 0.72, meaning that its share price is 28% less volatile than the S&P 500.

Analyst Ratings

This is a breakdown of recent ratings and target prices for Potomac Bancshares and Byline Bancorp, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Potomac Bancshares	0	0	0	0	0.00
Byline Bancorp	0	3	3	0	2.50

Byline Bancorp has a consensus price target of $43.00, suggesting a potential upside of 9.92%. Given Byline Bancorp’s stronger consensus rating and higher probable upside, analysts clearly believe Byline Bancorp is more favorable than Potomac Bancshares.

Institutional & Insider Ownership

5.3% of Potomac Bancshares shares are held by institutional investors. Comparatively, 67.7% of Byline Bancorp shares are held by institutional investors. 4.4% of Potomac Bancshares shares are held by insiders. Comparatively, 28.8% of Byline Bancorp shares are held by insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a company will outperform the market over the long term.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
Potomac Bancshares	N/A	N/A	N/A
Byline Bancorp	23.36%	11.94%	1.54%

Dividends

Potomac Bancshares pays an annual dividend of $0.60 per share and has a dividend yield of 2.4%. Byline Bancorp pays an annual dividend of $0.48 per share and has a dividend yield of 1.2%. Potomac Bancshares pays out 25.4% of its earnings in the form of a dividend. Byline Bancorp pays out 14.5% 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. Byline Bancorp has increased its dividend for 1 consecutive years.

Valuation & Earnings

This table compares Potomac Bancshares and Byline Bancorp”s gross revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Potomac Bancshares	$54.90 million	2.04	$10.60 million	$2.36	10.58
Byline Bancorp	$633.15 million	2.81	$130.05 million	$3.31	11.82

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

Summary

Byline Bancorp beats Potomac Bancshares on 16 of the 17 factors compared between the two stocks.

About Potomac Bancshares

Potomac Bancshares, Inc. operates as the bank holding company for Bank of Charles Town that provides various banking products and services to individuals and businesses. The company offers checking, savings, and individual retirement accounts; and certificates of deposit (CD). It also provides personal loans, including new and used vehicle, home equity, unsecured home improvement and personal, retail equipment, and lot loans, as well as loans secured by CD, and home equity lines of credit; commercial loans for building or office purchases, commercial real estate and construction, and production and administrative equipment purchases; lines of credit; mortgage, commercial, term, residential and commercial construction, commercial real estate, and agricultural loans; and credit and debit cards. In addition, the company offers Card Pay, cash management, merchant, financial planning, trust and estate, investment management, wealth management, full-service brokerage, retirement and insurance planning and products, asset allocation and management, and college planning services, as well as telephone, mobile, and online banking services. Potomac Bancshares, Inc. was founded in 1871 and is based in Charles Town, West Virginia.

About Byline Bancorp

Byline Bancorp, Inc. operates as the bank holding company for Byline Bank that provides various banking products and services for small and medium sized businesses, commercial real estate and financial sponsors, and consumers in the United States. It offers various retail deposit products, including non-interest-bearing accounts, money market demand accounts, savings accounts, interest-bearing checking accounts, and time deposits; ATM and debit cards; and online, mobile, and text banking services, as well as commercial deposits. The company also provides term loans, revolving lines of credit, and construction financing services; senior secured financing solutions to private equity backed lower middle market companies; small business administration and united states department of agriculture loans; and treasury management products and services. In addition, it offers financing solutions for equipment vendors and their end users; syndication services; and investment, trust, and wealth management services that include fiduciary and executor services, financial planning solutions, investment advisory services, and private banking services for foundations and endowments, and high net worth individuals. The company was formerly known as Metropolitan Bank Group, Inc. and changed its name to Byline Bancorp, Inc. in 2015. Byline Bancorp, Inc. was founded in 1914 and is headquartered in Chicago, Illinois.