Financial Analysis: Private Bancorp of America (OTCMKTS:PBAM) & First Horizon (NYSE:FHN)

First Horizon (NYSE:FHN) and Private Bancorp of America (OTCMKTS:PBAM) are both finance companies, but which is the superior stock? We will compare the two businesses based on the strength of their institutional ownership, valuation, earnings, analyst recommendations, profitability, risk and dividends.

Institutional & Insider Ownership

80.3% of First Horizon shares are owned by institutional investors. Comparatively, 13.5% of Private Bancorp of America shares are owned by institutional investors. 1.0% of First Horizon shares are owned by company insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a stock is poised for long-term growth.

Analyst Recommendations

This is a summary of current recommendations and price targets for First Horizon and Private Bancorp of America, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
First Horizon	0	10	8	1	2.53
Private Bancorp of America	0	1	1	1	3.00

First Horizon presently has a consensus price target of $25.29, suggesting a potential upside of 5.16%. Private Bancorp of America has a consensus price target of $74.00, suggesting a potential upside of 28.63%. Given Private Bancorp of America’s stronger consensus rating and higher possible upside, analysts clearly believe Private Bancorp of America is more favorable than First Horizon.

Earnings & Valuation

This table compares First Horizon and Private Bancorp of America”s gross revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
First Horizon	$5.03 billion	2.35	$775.00 million	$1.65	14.58
Private Bancorp of America	$161.24 million	2.04	$35.82 million	$7.04	8.17

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

Profitability

This table compares First Horizon and Private Bancorp of America’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
First Horizon	18.08%	10.93%	1.16%
Private Bancorp of America	24.04%	17.10%	1.66%

Risk and Volatility

First Horizon has a beta of 0.62, meaning that its stock price is 38% less volatile than the S&P 500. Comparatively, Private Bancorp of America has a beta of 0.1, meaning that its stock price is 90% less volatile than the S&P 500.

Summary

First Horizon beats Private Bancorp of America on 8 of the 14 factors compared between the two stocks.

About First Horizon

First Horizon Corporation operates as the bank holding company for First Horizon Bank that provides various financial services. The company operates through Regional Banking and Specialty Banking segments. It offers general banking services for consumers, businesses, financial institutions, and governments. The company also accepts deposits; provides underwriting services for bank-eligible securities and other fixed-income securities by financial subsidiaries; sells loans and derivatives; financial planning; and offers investment and financial advisory services. In addition, it offers mortgage banking; loan syndications; brokerage services; commercial and business banking for business enterprises, consumer banking, and private client and wealth management services; capital markets, professional commercial real estate, mortgage warehouse and asset-based lending, franchise and equipment finance, tax credit finance, energy and healthcare finance, asset management, and corporate and correspondent banking services. Further, the company provides transaction processing services including check clearing services and remittance processing, credit cards, investment, and sale of mutual fund and retail insurances, as well as trust, fiduciary, and agency services. First Horizon Corporation was founded in 1864 and is headquartered in Memphis, Tennessee.

About Private Bancorp of America

Private Bancorp of America, Inc. operates as the bank holding company for CalPrivate Bank that provides banking products and services to individuals and businesses in California. The company offers checking and savings, money market, certificate of deposit, sweep, zero balance, and individual retirement accounts; unsecured lines of credit, personal credit lines, and term loans; additional services, such as direct deposits, online banking, ATM and debit cards, credit cards, savings/line of credit overdraft protection, and safe deposit boxes; and certificate of deposit account registry services. It also provides treasury management, merchant card, bill pay, positive pay, e-statement, remote deposit capture, ACH origination, wire transfer, electronic payments and collections, electronic check acceptance, account reconciliation, cash vault, and gift and business credit cards, as well as funds management services. In addition, the company offers term credit facilities and loans, equipment and business expansion loans, working capital lines of credit, commercial real estate financing, construction financing, letters of credit, business start-up loans, loans for business acquisition and partner buyouts, owner-occupied commercial real estate loans, equipment, furniture and fixture, and other loans; and CDARS And ICS products. Further, it provides wealth management and legal services. The company has offices in La Jolla, San Diego, Coronado, Newport Beach, Beverly Hills, El Segundo, Temecula, Mission Valley, and Redlands. Private Bancorp of America, Inc. was founded in 2006 and is headquartered in La Jolla, California.