Financial Analysis: MetroCity Bankshares (NASDAQ:MCBS) versus Affinity Bancshares (NASDAQ:AFBI)

MetroCity Bankshares (NASDAQ:MCBS) and Affinity Bancshares (NASDAQ:AFBI) are both small-cap finance companies, but which is the superior business? We will compare the two companies based on the strength of their profitability, valuation, risk, dividends, earnings, analyst recommendations and institutional ownership.

Volatility and Risk

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

Insider and Institutional Ownership

25.3% of MetroCity Bankshares shares are owned by institutional investors. Comparatively, 39.3% of Affinity Bancshares shares are owned by institutional investors. 27.5% of MetroCity Bankshares shares are owned by company insiders. Comparatively, 12.3% of Affinity Bancshares shares are owned by company insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company is poised for long-term growth.

Earnings and Valuation

This table compares MetroCity Bankshares 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
MetroCity Bankshares	$246.01 million	4.12	$68.53 million	$2.88	12.28
Affinity Bancshares	$52.93 million	2.65	$8.33 million	$1.37	16.79

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

Profitability

This table compares MetroCity Bankshares and Affinity Bancshares’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
MetroCity Bankshares	28.40%	15.55%	1.83%
Affinity Bancshares	16.50%	7.51%	1.04%

Analyst Recommendations

This is a breakdown of current recommendations for MetroCity Bankshares and Affinity Bancshares, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
MetroCity Bankshares	0	1	1	0	2.50
Affinity Bancshares	0	0	1	0	3.00

MetroCity Bankshares presently has a consensus target price of $33.00, indicating a potential downside of 6.73%. Given MetroCity Bankshares’ higher possible upside, equities analysts clearly believe MetroCity Bankshares is more favorable than Affinity Bancshares.

Summary

MetroCity Bankshares beats Affinity Bancshares on 10 of the 13 factors compared between the two stocks.

About MetroCity Bankshares

MetroCity Bankshares, Inc. operates as the bank holding company for Metro City Bank that engages in the provision of banking products and services in the United States. It offers customary banking services, such as consumer and commercial checking accounts, savings, and money market accounts, as well as certificates of deposit. The company also provides commercial and consumer loans, including single family residential loans; construction and development, and owner and non-owner occupied commercial real estate loans; letters of credit; and commercial and industrial loans, residential mortgage loans, and SBA loans. In addition, it offers online banking services, which include access to account balances, online transfers, online bill payment, and electronic delivery of customer statements; mobile banking solutions, such as remote check deposit with mobile bill pay; and automated teller machines and telephone banking services. Further, it provides debit cards for checking customers, direct deposits, and cashier's checks; treasury management services, including wire transfer, automated clearing house, and stop payments services; and cash management deposit products, such as remote deposit capture, positive pay, zero balance accounts, and sweep accounts. The company was founded in 2006 and is headquartered in Atlanta, Georgia.

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.