MetroCity Bankshares (NASDAQ:MCBS) and Ameris Bancorp (NASDAQ:ABCB) Critical Analysis

MetroCity Bankshares (NASDAQ:MCBS) and Ameris Bancorp (NASDAQ:ABCB) are both finance companies, but which is the superior investment? We will compare the two businesses based on the strength of their profitability, risk, institutional ownership, dividends, analyst recommendations, valuation and earnings.

Analyst Ratings

This is a breakdown of current recommendations and price targets for MetroCity Bankshares and Ameris Bancorp, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
MetroCity Bankshares	0	1	0	0	2.00
Ameris Bancorp	0	1	4	0	2.80

MetroCity Bankshares currently has a consensus target price of $32.00, indicating a potential upside of 9.44%. Ameris Bancorp has a consensus target price of $67.00, indicating a potential upside of 10.60%. Given Ameris Bancorp’s stronger consensus rating and higher probable upside, analysts plainly believe Ameris Bancorp is more favorable than MetroCity Bankshares.

Insider and Institutional Ownership

25.3% of MetroCity Bankshares shares are held by institutional investors. Comparatively, 91.6% of Ameris Bancorp shares are held by institutional investors. 27.5% of MetroCity Bankshares shares are held by insiders. Comparatively, 5.5% of Ameris Bancorp shares are held by 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.

Volatility and Risk

MetroCity Bankshares has a beta of 0.6, suggesting that its share price is 40% less volatile than the S&P 500. Comparatively, Ameris Bancorp has a beta of 1.01, suggesting that its share price is 1% more volatile than the S&P 500.

Profitability

This table compares MetroCity Bankshares and Ameris Bancorp’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
MetroCity Bankshares	24.20%	13.85%	1.52%
Ameris Bancorp	19.28%	8.97%	1.20%

Valuation & Earnings

This table compares MetroCity Bankshares and Ameris Bancorp”s revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
MetroCity Bankshares	$124.92 million	5.90	$51.61 million	$1.97	14.84
Ameris Bancorp	$1.06 billion	3.94	$269.11 million	$4.11	14.74

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

Dividends

MetroCity Bankshares pays an annual dividend of $0.80 per share and has a dividend yield of 2.7%. Ameris Bancorp pays an annual dividend of $0.60 per share and has a dividend yield of 1.0%. MetroCity Bankshares pays out 40.6% of its earnings in the form of a dividend. Ameris Bancorp pays out 14.6% 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.

Summary

Ameris Bancorp beats MetroCity Bankshares on 9 of the 16 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 Ameris Bancorp

Ameris Bancorp operates as the bank holding company for Ameris Bank that provides range of banking services to retail and commercial customers. It operates through five segments: Banking Division, Retail Mortgage Division, Warehouse Lending Division, SBA Division, and Premium Finance Division. The company offers commercial and retail checking, regular interest-bearing savings, money market, individual retirement, and certificates of deposit accounts. It also provides commercial real estate, residential real estate mortgage, agricultural, and commercial and industrial loans; consumer loans, including motor vehicle, home improvement, and home equity loans, as well as loans secured by savings accounts and personal credit lines. In addition, the company originates, administers, and services commercial insurance premium loans, equipment finance loans, and small business administration loans. It operates full service domestic banking offices, and mortgage and loan production offices. The company was founded in 1971 and is headquartered in Atlanta, Georgia.