Critical Contrast: Towne Bank (NASDAQ:TOWN) vs. Affinity Bancshares (NASDAQ:AFBI)

Towne Bank (NASDAQ:TOWN) and Affinity Bancshares (NASDAQ:AFBI) are both finance companies, but which is the better business? We will contrast the two businesses based on the strength of their risk, valuation, profitability, earnings, analyst recommendations, institutional ownership and dividends.

Institutional and Insider Ownership

56.0% of Towne Bank shares are held by institutional investors. Comparatively, 39.3% of Affinity Bancshares shares are held by institutional investors. 8.1% of Towne Bank shares are held by company insiders. Comparatively, 12.4% of Affinity Bancshares 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.

Volatility & Risk

Towne Bank has a beta of 0.7, indicating that its share price is 30% less volatile than the S&P 500. Comparatively, Affinity Bancshares has a beta of 0.13, indicating that its share price is 87% less volatile than the S&P 500.

Valuation & Earnings

This table compares Towne Bank and Affinity Bancshares”s top-line revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Towne Bank	$1.12 billion	2.45	$169.53 million	$1.98	17.53
Affinity Bancshares	$52.93 million	2.59	$8.33 million	$1.37	16.45

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

Profitability

This table compares Towne Bank and Affinity Bancshares’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Towne Bank	13.51%	9.91%	1.24%
Affinity Bancshares	16.50%	7.51%	1.04%

Analyst Ratings

This is a breakdown of current recommendations for Towne Bank and Affinity Bancshares, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Towne Bank	1	1	2	0	2.25
Affinity Bancshares	0	0	1	0	3.00

Towne Bank presently has a consensus target price of $39.50, indicating a potential upside of 13.80%. Given Towne Bank’s higher probable upside, analysts plainly believe Towne Bank is more favorable than Affinity Bancshares.

Summary

Towne Bank beats Affinity Bancshares on 10 of the 14 factors compared between the two stocks.

About Towne Bank

TowneBank provides retail and commercial banking services for individuals, commercial enterprises, and professionals. The company operates through three segments: Banking, Realty, and Insurance. It accepts various deposits, including demand deposits, savings accounts, money rate savings, certificates of deposit, and individual retirement accounts. The company also offers secured and unsecured personal loans for financing automobiles, home improvements, education, and personal investments; commercial loans for working capital, business expansion, and equipment and machinery purchases; and mortgage loans, as well as real estate acquisition, development, and construction loans. In addition, it provides other services, such as safe deposit boxes, treasury management services, direct deposit of payroll and social security checks, and automatic drafts for various accounts, as well as online, mobile, and on-call banking services. Further, the company offers documentation services to accomplish tax deferral to investors; investment and asset management services; commercial mortgage brokerage services; and other financial services, such as financial, retirement, and estate planning services, as well as assistance on various investment options comprising alternative investments, annuities, margin accounts, convertible bonds, and pension and profit-sharing plans. Additionally, it provides residential real estate, relocation, property management, vacation rentals, and title and settlement services; and originates residential mortgage loans. The company also offers life, property, casualty, and vehicle insurance services; and employee benefit programs, such as health, dental, vision, and disability insurance. It operates in Richmond, Virginia, the Greater Hampton Roads region in southeastern Virginia, northeastern North Carolina, Raleigh, Charlotte, Greensboro, and Greenville, North Carolina. TowneBank was incorporated in 1998 and is based in Portsmouth, Virginia.

About Affinity Bancshares

Affinity Bancshares, Inc. operates as the holding company for Affinity Bank that provides various banking products and services in Georgia. The company offers various deposit accounts, including savings accounts, checking accounts, certificates of deposit, and individual retirement accounts, as well as Kasasa (rewards) deposit program for checking accounts with interest rates or cash-back rewards. It offers commercial and residential real estate, commercial and industrial, residential mortgage, construction and land, and consumer loans, as well as balloon and adjustable-rate loans. In addition, the company invests in U.S. treasury securities; securities issued by the U.S. government and its agencies, or government sponsored enterprises, including mortgage-backed securities and collateralized mortgage obligations; corporate and municipal bonds; certificates of deposit in other financial institutions; and federal and money market funds. Further, it operates a virtual bank under the name FitnessBank, which accepts deposits and provides higher interest rates based on customers meeting certain fitness goals. Affinity Bancshares, Inc. was founded in 1928 and is headquartered in Covington, Georgia.