Critical Survey: Regions Financial (NYSE:RF) vs. Customers Bancorp (NYSE:CUBI)

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

Risk and Volatility

Regions Financial has a beta of 1, indicating that its stock price has a similar volatility profile to the S&P 500.Comparatively, Customers Bancorp has a beta of 1.48, indicating that its stock price is 48% more volatile than the S&P 500.

Analyst Recommendations

This is a summary of current recommendations for Regions Financial and Customers Bancorp, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Regions Financial	4	10	6	0	2.10
Customers Bancorp	0	5	6	1	2.67

Regions Financial currently has a consensus price target of $32.21, indicating a potential upside of 3.66%. Customers Bancorp has a consensus price target of $90.15, indicating a potential upside of 14.10%. Given Customers Bancorp’s stronger consensus rating and higher possible upside, analysts plainly believe Customers Bancorp is more favorable than Regions Financial.

Earnings and Valuation

This table compares Regions Financial and Customers Bancorp”s gross revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Regions Financial	$9.61 billion	2.76	$2.16 billion	$2.45	12.68
Customers Bancorp	$1.48 billion	1.81	$224.09 million	$8.20	9.64

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

Insider and Institutional Ownership

79.4% of Regions Financial shares are held by institutional investors. Comparatively, 89.3% of Customers Bancorp shares are held by institutional investors. 0.3% of Regions Financial shares are held by company insiders. Comparatively, 10.4% of Customers Bancorp shares are held by company 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 Regions Financial and Customers Bancorp’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Regions Financial	23.33%	12.88%	1.42%
Customers Bancorp	19.07%	13.80%	1.16%

Summary

Customers Bancorp beats Regions Financial on 8 of the 14 factors compared between the two stocks.

About Regions Financial

Regions Financial Corporation, a financial holding company, provides banking and bank-related services to individual and corporate customers. It operates through three segments: Corporate Bank, Consumer Bank, and Wealth Management. The Corporate Bank segment offers commercial banking services, such as commercial and industrial, commercial real estate, and investor real estate lending; equipment lease financing; deposit products; and securities underwriting and placement, loan syndication and placement, foreign exchange, derivatives, merger and acquisition, and other advisory services. It serves corporate, middle market, and commercial real estate developers and investors. The Consumer Bank segment provides consumer banking products and services related to residential first mortgages, home equity lines and loans, consumer credit cards, and other consumer loans, as well as deposits. The Wealth Management segment offers credit related products, and retirement and savings solutions; and trust and investment management, asset management, and estate planning services to individuals, businesses, governmental institutions, and non-profit entities. It also provides investment and insurance products; low-income housing tax credit corporate fund syndication services; and other specialty financing services. The company was founded in 1971 and is headquartered in Birmingham, Alabama.

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.