Financial Analysis: Northpointe Bancshares (NYSE:NPB) & Potomac Bancshares (OTCMKTS:PTBS)

Northpointe Bancshares (NYSE:NPB) and Potomac Bancshares (OTCMKTS:PTBS) are both small-cap finance companies, but which is the superior business? We will compare the two businesses based on the strength of their earnings, analyst recommendations, risk, institutional ownership, valuation, dividends and profitability.

Profitability

This table compares Northpointe Bancshares and Potomac Bancshares’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Northpointe Bancshares	N/A	N/A	N/A
Potomac Bancshares	N/A	N/A	N/A

Analyst Ratings

This is a breakdown of recent recommendations for Northpointe Bancshares and Potomac Bancshares, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Northpointe Bancshares	0	0	2	0	3.00
Potomac Bancshares	0	0	0	0	0.00

Northpointe Bancshares currently has a consensus target price of $17.25, indicating a potential upside of 26.37%. Given Northpointe Bancshares’ stronger consensus rating and higher probable upside, equities analysts clearly believe Northpointe Bancshares is more favorable than Potomac Bancshares.

Earnings and Valuation

This table compares Northpointe Bancshares and Potomac Bancshares”s revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Northpointe Bancshares	$187.14 million	2.21	N/A	N/A	N/A
Potomac Bancshares	$48.09 million	1.37	$6.80 million	$1.64	9.68

Potomac Bancshares has lower revenue, but higher earnings than Northpointe Bancshares.

Institutional & Insider Ownership

5.3% of Potomac Bancshares shares are owned by institutional investors. 18.4% of Northpointe Bancshares shares are owned by company insiders. Comparatively, 4.4% of Potomac Bancshares shares are owned by company 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.

Dividends

Northpointe Bancshares pays an annual dividend of $0.10 per share and has a dividend yield of 0.7%. Potomac Bancshares pays an annual dividend of $0.52 per share and has a dividend yield of 3.3%. Potomac Bancshares pays out 31.7% of its earnings in the form of a dividend.

Summary

Northpointe Bancshares beats Potomac Bancshares on 7 of the 9 factors compared between the two stocks.

About Northpointe Bancshares

Northpointe Bancshares, Inc. operates as a bank holding company. It offers a nationwide mortgage purchase program, residential mortgage loans, digital deposit banking to retail customers and custodial deposit services. The company was founded by Charles A. Williams in 1998 and is headquartered in Grand Rapids, MI.

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.