Contrasting Customers Bancorp (NYSE:CUBI) and SmartFinancial (NASDAQ:SMBK)

Customers Bancorp (NYSE:CUBI) and SmartFinancial (NASDAQ:SMBK) are both finance companies, but which is the superior business? We will contrast the two companies based on the strength of their earnings, profitability, valuation, institutional ownership, analyst recommendations, risk and dividends.

Valuation and Earnings

This table compares Customers Bancorp and SmartFinancial”s gross revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Customers Bancorp	$1.48 billion	1.80	$224.09 million	$8.20	9.61
SmartFinancial	$210.19 million	4.26	$36.14 million	$3.39	15.44

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

Insider & Institutional Ownership

89.3% of Customers Bancorp shares are held by institutional investors. Comparatively, 58.8% of SmartFinancial shares are held by institutional investors. 10.4% of Customers Bancorp shares are held by company insiders. Comparatively, 6.9% of SmartFinancial shares are held by company insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a stock is poised for long-term growth.

Risk and Volatility

Customers Bancorp has a beta of 1.47, meaning that its stock price is 47% more volatile than the S&P 500. Comparatively, SmartFinancial has a beta of 0.68, meaning that its stock price is 32% less volatile than the S&P 500.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
Customers Bancorp	19.07%	13.80%	1.16%
SmartFinancial	12.67%	7.33%	0.71%

Analyst Recommendations

This is a summary of current recommendations and price targets for Customers Bancorp and SmartFinancial, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Customers Bancorp	1	4	6	1	2.58
SmartFinancial	0	4	2	1	2.57

Customers Bancorp currently has a consensus price target of $90.77, indicating a potential upside of 15.17%. SmartFinancial has a consensus price target of $50.42, indicating a potential downside of 3.66%. Given Customers Bancorp’s stronger consensus rating and higher probable upside, equities analysts clearly believe Customers Bancorp is more favorable than SmartFinancial.

Summary

Customers Bancorp beats SmartFinancial on 12 of the 14 factors compared between the two stocks.

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.

About SmartFinancial

SmartFinancial, Inc. operates as the bank holding company for SmartBank that provides various financial services to individuals and corporate customers in Tennessee, Alabama, and Florida. It operates through Commercial Real Estate, Consumer Real Estate, Construction and Land Development, Commercial and Industrial, Leases, and Consumer and Other segments. The company offers noninterest-bearing and interest-bearing checking, interest-bearing demand, savings, money market, time deposit, individual retirement accounts, as well as certificates of deposit. It also provides commercial and residential real estate, consumer real estate, and construction and land development loans; commercial and financial loans and leases; commercial business and mortgage loans; and direct consumer installment, educational, agriculture, and other revolving credit loans; equipment financing, heavy equipment, semis, and trailers loans and leases to small and mid-size companies; letters of credit; and overdraft facilities. In addition, the company offers wealth management, insurance, mortgage origination, and internet and mobile banking services. SmartFinancial, Inc. is headquartered in Knoxville, Tennessee.