First Guaranty Bancshares (NASDAQ:FGBI) versus Customers Bancorp (NYSE:CUBI) Critical Analysis

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

Insider and Institutional Ownership

39.5% of First Guaranty Bancshares shares are held by institutional investors. Comparatively, 89.3% of Customers Bancorp shares are held by institutional investors. 47.2% of First Guaranty Bancshares shares are held by company insiders. Comparatively, 6.9% of Customers Bancorp shares are held by company insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a stock is poised for long-term growth.

Volatility and Risk

First Guaranty Bancshares has a beta of 0.32, indicating that its share price is 68% less volatile than the S&P 500. Comparatively, Customers Bancorp has a beta of 1.57, indicating that its share price is 57% more volatile than the S&P 500.

Analyst Ratings

This is a breakdown of current ratings and price targets for First Guaranty Bancshares and Customers Bancorp, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
First Guaranty Bancshares	1	1	0	0	1.50
Customers Bancorp	0	5	6	1	2.67

Customers Bancorp has a consensus price target of $87.50, suggesting a potential upside of 15.55%. Given Customers Bancorp’s stronger consensus rating and higher possible upside, analysts plainly believe Customers Bancorp is more favorable than First Guaranty Bancshares.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
First Guaranty Bancshares	-21.47%	-16.79%	-0.87%
Customers Bancorp	18.63%	14.12%	1.17%

Valuation & Earnings

This table compares First Guaranty Bancshares and Customers Bancorp”s top-line revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
First Guaranty Bancshares	$92.06 million	1.58	-$56.02 million	($3.20)	-2.87
Customers Bancorp	$884.89 million	2.88	$224.09 million	$7.88	9.61

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

Summary

Customers Bancorp beats First Guaranty Bancshares on 14 of the 15 factors compared between the two stocks.

About First Guaranty Bancshares

First Guaranty Bancshares, Inc. operates as the holding company for First Guaranty Bank that provides commercial banking services in Louisiana and Texas. It offers various deposit products, including personal and business checking, savings, money market, and demand accounts, as well as time deposits to consumers, small businesses, and municipalities. The company provides loans, such as non-farm, non-residential loans secured by real estate, commercial and industrial loans, one- to four-family residential loans, multifamily loans, construction and land development loans, agricultural loans, farmland loans, and consumer and other loans to small to medium-sized businesses and professionals, and individuals. In addition, it offers a range of consumer services, including credit cards, mobile deposit capture, safe deposit boxes, official checks, online and mobile banking, automated teller machines, and online bill pay; provides additional solutions, such as merchant services, remote deposit capture, and lockbox services to business customers; and invests a portion of its assets in securities issued by the United States Government and its agencies, state and municipal obligations, corporate debt securities, mutual funds, and equity securities, as well as invests in mortgage-backed securities primarily issued or guaranteed by United States Government agencies or enterprises. First Guaranty Bancshares, Inc. was founded in 1934 and is headquartered in Hammond, Louisiana.

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.