U.S.A Bank (OTCMKTS:USBK) & Merchants Bancorp (NASDAQ:MBIN) Head-To-Head Analysis

U.S.A Bank (OTCMKTS:USBK) and Merchants Bancorp (NASDAQ:MBIN) are both finance companies, but which is the better business? We will compare the two businesses based on the strength of their valuation, risk, earnings, profitability, institutional ownership, dividends and analyst recommendations.

Volatility and Risk

U.S.A Bank has a beta of -24.99, meaning that its share price is 2,599% less volatile than the S&P 500. Comparatively, Merchants Bancorp has a beta of 1.15, meaning that its share price is 15% more volatile than the S&P 500.

Insider and Institutional Ownership

24.6% of Merchants Bancorp shares are held by institutional investors. 34.8% of Merchants Bancorp shares are held by company insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a company is poised for long-term growth.

Profitability

This table compares U.S.A Bank and Merchants Bancorp’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
U.S.A Bank	N/A	N/A	N/A
Merchants Bancorp	22.08%	22.86%	1.76%

Analyst Ratings

This is a summary of current ratings for U.S.A Bank and Merchants Bancorp, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
U.S.A Bank	0	0	0	0	0.00
Merchants Bancorp	0	1	2	0	2.67

Merchants Bancorp has a consensus price target of $47.50, indicating a potential upside of 54.72%. Given Merchants Bancorp’s stronger consensus rating and higher probable upside, analysts plainly believe Merchants Bancorp is more favorable than U.S.A Bank.

Earnings and Valuation

This table compares U.S.A Bank and Merchants Bancorp”s top-line revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
U.S.A Bank	N/A	N/A	N/A	N/A	N/A
Merchants Bancorp	$666.97 million	2.11	$320.39 million	$6.31	4.87

Merchants Bancorp has higher revenue and earnings than U.S.A Bank.

Summary

Merchants Bancorp beats U.S.A Bank on 10 of the 10 factors compared between the two stocks.

About U.S.A Bank

As of July 10, 2010, U.S.A Bank was acquired by Customers Bank (Phoenixville, Pennsylvania). U.S.A Bank operates as a community bank in New York. It offers deposit products, Internet banking, ATM cards, consumer loans, and residential and commercial loans. U.S.A Bank was founded in 2005 and is based in Port Chester, New York.

About Merchants Bancorp

Merchants Bancorp operates as the diversified bank holding company in the United States. It operates through three segments: Multi-family Mortgage Banking, Mortgage Warehousing, and Banking. The Multi-family Mortgage Banking segment engages in the mortgage banking, which originates and services government sponsored mortgages, including bridge financing products to refinance, acquire, or reposition multi-family housing projects, and construction lending for multi-family and healthcare facilities. This segment also offers customized loan products for need-based skilled nursing facilities, such as independent living, assisted living, and memory care; and tax credit equity syndicator service. The Mortgage Warehousing segment funds agency eligible residential loans, as well as commercial loans to non-depository financial institutions. The Banking segment offers a range of financial products and services to consumers and businesses, which includes retail banking, commercial lending, agricultural lending, retail and correspondent residential mortgage banking, and small business administration lending. Merchants Bancorp was founded in 1990 and is headquartered in Carmel, Indiana.