NBT Bancorp (NASDAQ:NBTB) and Mercantil Bank (NASDAQ:AMTB) Critical Analysis

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NBT Bancorp (NASDAQ:NBTB) and Mercantil Bank (NASDAQ:AMTB) are both small-cap finance companies, but which is the superior investment? We will compare the two businesses based on the strength of their analyst recommendations, dividends, profitability, valuation, earnings, risk and institutional ownership.

Dividends

NBT Bancorp pays an annual dividend of $1.04 per share and has a dividend yield of 2.6%. Mercantil Bank does not pay a dividend. NBT Bancorp pays out 40.6% of its earnings in the form of a dividend.

Insider and Institutional Ownership

54.5% of NBT Bancorp shares are held by institutional investors. Comparatively, 13.9% of Mercantil Bank shares are held by institutional investors. 3.3% of NBT Bancorp shares are held by insiders. Comparatively, 5.1% of Mercantil Bank 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.

Profitability

This table compares NBT Bancorp and Mercantil Bank’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
NBT Bancorp 24.08% 11.43% 1.26%
Mercantil Bank 13.91% 7.93% 0.77%

Analyst Recommendations

This is a breakdown of current ratings and target prices for NBT Bancorp and Mercantil Bank, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
NBT Bancorp 0 2 0 0 2.00
Mercantil Bank 0 5 0 0 2.00

NBT Bancorp currently has a consensus target price of $38.00, indicating a potential downside of 6.40%. Mercantil Bank has a consensus target price of $18.58, indicating a potential downside of 11.86%. Given NBT Bancorp’s higher possible upside, research analysts clearly believe NBT Bancorp is more favorable than Mercantil Bank.

Valuation and Earnings

This table compares NBT Bancorp and Mercantil Bank’s gross revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
NBT Bancorp $469.02 million 3.79 $112.57 million $2.56 15.86
Mercantil Bank $363.23 million 2.51 $45.83 million $1.36 15.50

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

Summary

NBT Bancorp beats Mercantil Bank on 11 of the 13 factors compared between the two stocks.

NBT Bancorp Company Profile

NBT Bancorp Inc., a financial holding company, provides commercial banking, retail banking, and wealth management services. Its deposit products include demand deposit, savings, negotiable order of withdrawal, money market deposit, and certificate of deposit accounts. The company's loan portfolio comprises commercial and industrial, commercial real estate, agricultural, and commercial construction loans; indirect and direct consumer, home equity, direct loans, mortgages, business banking loans, and commercial loans; and residential real estate loans, as well as development loans. It also provides trust and investment services; financial planning and life insurance services; and retirement plan consulting and recordkeeping services. In addition, the company offers insurance products comprising personal property and casualty, business liability, and commercial insurance, as well as other products and services through 24-hour online, mobile, and telephone channels that enable customers to check balances, make deposits, transfer funds, pay bills, access statements, apply for loans, and access various other products and services. As of December 31, 2018, it had 151 banking locations and 182 ATMs in Pennsylvania, Vermont, Massachusetts, New Hampshire, and Maine. NBT Bancorp Inc. was founded in 1856 and is headquartered in Norwich, New York.

Mercantil Bank Company Profile

Mercantil Bank Holding Corporation operates as a bank holding company for Amerant Bank, N.A. that provides banking products and services to individuals and businesses in the United States and internationally. The company operates through four segments: Personal and Commercial Banking, Corporate LATAM, Treasury, and Institutional. It offers a range of checking and savings accounts, certificates of deposit, and money market accounts. The company also provides variable and fixed rate commercial real estate loans; loans secured by owner-occupied properties; loans to domestic and foreign individuals primarily secured by personal residence; working capital loans, asset-based lending, participations in shared national credits, purchased receivables, and small business administration loans; loans to financial institutions and acceptances; and consumer loans and overdrafts. In addition, it offers trust and estate planning products and services, brokerage and investment advisory services in global capital markets, and wealth management and fiduciary services. Further, the company provides debit and credit cards; remote deposit capture, online banking, mobile banking, e-statements, night depository, direct deposit, and treasury management services; and cashier's checks, safe deposit boxes, and letters of credit. As of March 21, 2019, it operated 23 banking centers comprising 15 in South Florida and 8 in Houston, as well as loan production offices in Dallas, Texas, and New York. The company was founded in 1979 and is headquartered in Coral Gables, Florida.

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