Critical Comparison: Customers Bancorp (NYSE:CUBI) and Texas Community Bancshares (NASDAQ:TCBS)

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

Institutional and Insider Ownership

89.3% of Customers Bancorp shares are held by institutional investors. Comparatively, 15.8% of Texas Community Bancshares shares are held by institutional investors. 10.5% of Customers Bancorp shares are held by insiders. Comparatively, 15.3% of Texas Community Bancshares shares are held by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock will outperform the market over the long term.

Valuation and Earnings

This table compares Customers Bancorp and Texas Community Bancshares”s top-line 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	1.73	$224.09 million	$7.88	9.61
Texas Community Bancshares	$25.57 million	2.01	$2.84 million	$1.09	16.31

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

Analyst Ratings

This is a summary of recent ratings and price targets for Customers Bancorp and Texas Community Bancshares, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Customers Bancorp	0	5	6	1	2.67
Texas Community Bancshares	0	1	0	0	2.00

Customers Bancorp currently has a consensus target price of $87.50, indicating a potential upside of 15.52%. Given Customers Bancorp’s stronger consensus rating and higher probable upside, equities research analysts clearly believe Customers Bancorp is more favorable than Texas Community Bancshares.

Profitability

This table compares Customers Bancorp and Texas Community Bancshares’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Customers Bancorp	18.63%	14.12%	1.17%
Texas Community Bancshares	11.79%	5.66%	0.70%

Volatility & Risk

Customers Bancorp has a beta of 1.49, meaning that its share price is 49% more volatile than the S&P 500. Comparatively, Texas Community Bancshares has a beta of -0.02, meaning that its share price is 102% less volatile than the S&P 500.

Summary

Customers Bancorp beats Texas Community Bancshares on 12 of the 15 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 Texas Community Bancshares

Texas Community Bancshares, Inc. operates as the bank holding company for Mineola Community Bank, S.S.B. that provides loans and banking services to consumers and commercial customers in Mineola, Texas and the surrounding area, and the Dallas Fort Worth Metroplex. It generates a selection of deposit accounts, including savings accounts, checking accounts, certificates of deposit, and individual retirement accounts. The company also originates primarily one- to four-family residential mortgage loans, commercial real estate loans, and construction and land loans; and car, boat, share, unsecured loans, etc., as well as agricultural loans, commercial loans, and consumer and other loans. In addition, it invests in securities; and offers sweep account, safe deposit boxes, e-statement, cards, online banking, and mobile banking services. Texas Community Bancshares, Inc. was founded in 1934 and is headquartered in Mineola, Texas.