Customers Bancorp (NYSE:CUBI) versus HomeStreet (NASDAQ:HMST) Financial Analysis

Customers Bancorp (NYSE:CUBIGet Rating) and HomeStreet (NASDAQ:HMSTGet Rating) are both small-cap finance companies, but which is the better business? We will contrast the two businesses based on the strength of their institutional ownership, valuation, analyst recommendations, profitability, dividends, earnings and risk.

Profitability

This table compares Customers Bancorp and HomeStreet’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Customers Bancorp 40.14% 30.79% 1.85%
HomeStreet 31.04% 15.46% 1.45%

Risk and Volatility

Customers Bancorp has a beta of 1.61, suggesting that its share price is 61% more volatile than the S&P 500. Comparatively, HomeStreet has a beta of 1.06, suggesting that its share price is 6% more volatile than the S&P 500.

Institutional and Insider Ownership

83.5% of Customers Bancorp shares are held by institutional investors. Comparatively, 92.9% of HomeStreet shares are held by institutional investors. 6.8% of Customers Bancorp shares are held by company insiders. Comparatively, 4.8% of HomeStreet shares are held by company insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a stock is poised for long-term growth.

Analyst Recommendations

This is a breakdown of recent ratings and recommmendations for Customers Bancorp and HomeStreet, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Customers Bancorp 0 3 5 0 2.63
HomeStreet 1 1 1 0 2.00

Customers Bancorp currently has a consensus target price of $71.07, indicating a potential upside of 86.93%. HomeStreet has a consensus target price of $40.67, indicating a potential upside of 14.59%. Given Customers Bancorp’s stronger consensus rating and higher probable upside, equities analysts clearly believe Customers Bancorp is more favorable than HomeStreet.

Valuation and Earnings

This table compares Customers Bancorp and HomeStreet’s gross revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Customers Bancorp $858.75 million 1.46 $314.65 million $10.02 3.79
HomeStreet $364.27 million 1.82 $115.42 million $5.12 6.93

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

Summary

Customers Bancorp beats HomeStreet on 11 of the 14 factors compared between the two stocks.

About Customers Bancorp

(Get Rating)

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 offers deposits products, including checking, savings, MMDA, and other deposits accounts. It offers loan products, including commercial mortgage warehouse loans, multi-family and commercial real estate loans, business banking, small business loans, equipment financing, residential mortgage loans, and installment loans. It also offers traditional banking activities, including mobile phone banking, internet banking, wire transfers, electronic bill payment, lock box services, remote deposit capture services, courier services, merchant processing services, cash vault, controlled disbursements, positive pay, cash management services, such as account reconciliation, collections, and sweep accounts. It operates 12 full-service branches, as well as limited production and administrative offices in Southeastern Pennsylvania, including Bucks, Berks, Chester, Philadelphia, and Delaware Counties; Harrisburg, Pennsylvania; Rye Brook and New York; Hamilton, New Jersey; Boston, Massachusetts; Providence, Rhode Island; Portsmouth, New Hampshire; Manhattan and Melville, New York; Washington D.C.; Chicago, Illinois; Dallas, Texas; Orlando, Florida; and Wilmington, North Carolina. Customers Bancorp, Inc. was founded in 1994 and is headquartered in West Reading, Pennsylvania.

About HomeStreet

(Get Rating)

HomeStreet, Inc. operates as the bank holding company for HomeStreet Bank that provides commercial, mortgage, and consumer/retail banking services primarily in the Western United States. The company offers personal and business checking, savings accounts, interest-bearing negotiable order of withdrawal accounts, money market accounts, and time certificates of deposit; credit cards; insurance; and treasury management products and services. Its loan products include commercial business and agriculture loans, single family residential mortgages, consumer loans, commercial loans secured by residential and commercial real estate, and construction loans for residential and commercial real estate development, as well as consumer installment loans and permanent loans on commercial real estate and single-family residences. In addition, the company offers its products and services through bank branches, loan production offices, and ATMs, as well as through online, mobile, and telephone banking. As of December 31, 2021, it operated 60 full-service bank branches located in Washington state, Northern and Southern California, the Portland, Oregon, and Hawaii; and five primary stand-alone commercial lending centers in Central Washington, Oregon, Southern California, Idaho, and Utah. HomeStreet, Inc. serves small and medium sized businesses, real estate investors, professional firms, and individuals. The company was formerly known as Continental Mortgage and Loan Company. HomeStreet, Inc. was incorporated in 1921 and is headquartered in Seattle, Washington.

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