Reviewing Potomac Bancshares (OTCMKTS:PTBS) and Community Heritage Financial (OTCMKTS:CMHF)

Earnings and Valuation

This table compares Community Heritage Financial and Potomac Bancshares”s revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Community Heritage Financial	$57.30 million	1.24	$6.62 million	$2.26	10.73
Potomac Bancshares	$48.09 million	1.32	$6.80 million	$1.64	9.33

Potomac Bancshares has lower revenue, but higher earnings than Community Heritage Financial. Potomac Bancshares is trading at a lower price-to-earnings ratio than Community Heritage Financial, indicating that it is currently the more affordable of the two stocks.

Risk and Volatility

Community Heritage Financial has a beta of 0.15, suggesting that its share price is 85% less volatile than the S&P 500. Comparatively, Potomac Bancshares has a beta of 0.17, suggesting that its share price is 83% less volatile than the S&P 500.

Dividends

Community Heritage Financial pays an annual dividend of $0.32 per share and has a dividend yield of 1.3%. Potomac Bancshares pays an annual dividend of $0.52 per share and has a dividend yield of 3.4%. Community Heritage Financial pays out 14.2% of its earnings in the form of a dividend. Potomac Bancshares pays out 31.7% of its earnings in the form of a dividend. Both companies have healthy payout ratios and should be able to cover their dividend payments with earnings for the next several years.

Profitability

This table compares Community Heritage Financial and Potomac Bancshares’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Community Heritage Financial	N/A	N/A	N/A
Potomac Bancshares	N/A	N/A	N/A

Insider and Institutional Ownership

12.2% of Community Heritage Financial shares are held by institutional investors. Comparatively, 5.3% of Potomac Bancshares shares are held by institutional investors. 4.4% of Potomac Bancshares shares are held by company insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a company will outperform the market over the long term.

About Community Heritage Financial

Community Heritage Financial, Inc. operates as the bank holding company for Middletown Valley Bank that provides retail and commercial banking services to individuals and businesses in Frederick and Washington counties in Maryland and Franklin County, Pennsylvania. Its primary deposit products include demand, savings, and time deposits, as well as lending products comprise real estate mortgages, commercial business loans, and instalment loans. The company also offers mortgage financing, new home purchases, refinancing, and construction lending in Middletown, Crofton, and Oakland, Maryland. The company was founded in 1908 and is based in Middletown, Maryland.

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.