Analyzing Potomac Bancshares (OTCMKTS:PTBS) & Bancorp (NASDAQ:TBBK)

Potomac Bancshares (OTCMKTS:PTBS) and Bancorp (NASDAQ:TBBK) 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, profitability, valuation, earnings, dividends and risk.

Insider and Institutional Ownership

5.3% of Potomac Bancshares shares are owned by institutional investors. Comparatively, 96.2% of Bancorp shares are owned by institutional investors. 4.4% of Potomac Bancshares shares are owned by company insiders. Comparatively, 5.6% of Bancorp shares are owned by company insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a company is poised for long-term growth.

Profitability

This table compares Potomac Bancshares and 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
Bancorp	27.16%	27.24%	2.56%

Valuation & Earnings

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

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Potomac Bancshares	$48.09 million	N/A	N/A	$2.07	8.75
Bancorp	$680.80 million	4.13	$217.54 million	$4.79	13.37

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

Analyst Ratings

This is a summary of current ratings and target prices for Potomac Bancshares and Bancorp, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Potomac Bancshares	0	0	0	0	0.00
Bancorp	0	2	5	1	2.88

Bancorp has a consensus price target of $62.00, indicating a potential downside of 3.19%. Given Bancorp’s stronger consensus rating and higher possible upside, analysts plainly believe Bancorp is more favorable than Potomac Bancshares.

Volatility and Risk

Potomac Bancshares has a beta of 0.23, indicating that its stock price is 77% less volatile than the S&P 500. Comparatively, Bancorp has a beta of 1.34, indicating that its stock price is 34% more volatile than the S&P 500.

Summary

Bancorp beats Potomac Bancshares on 13 of the 13 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 Bancorp

The Bancorp, Inc. operates as the bank holding company for The Bancorp Bank, National Association that provides banking products and services in the United States. It offers a range of deposit products and services, including checking, savings, time, money market, and commercial accounts; overdrafts; and certificates of deposit. The company also provides securities-backed lines of credit and insurance policy cash value-backed lines of credit; investor advisor financing; lease financing for commercial and government vehicle fleets, including trucks and other special purpose vehicles; commercial real estate bridge loans; and small business administration loans. In addition, it offers bill and other payment services; debit and prepaid card issuing services; card and bill payment, and automated clearing house processing services; and internet banking services. The company was incorporated in 1999 and is headquartered in Wilmington, Delaware.