Critical Review: Meridian Bank (NASDAQ:MRBK) versus WCF Bancorp (OTCMKTS:WCFB)

Meridian Bank (NASDAQ:MRBK) and WCF Bancorp (OTCMKTS:WCFB) are both small-cap finance companies, but which is the superior investment? We will contrast the two companies based on the strength of their profitability, analyst recommendations, earnings, institutional ownership, dividends, valuation and risk.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
Meridian Bank	10.63%	11.81%	0.86%
WCF Bancorp	N/A	N/A	N/A

Institutional and Insider Ownership

58.6% of Meridian Bank shares are owned by institutional investors. 14.4% of Meridian Bank shares are owned by insiders. Comparatively, 0.8% of WCF Bancorp shares are owned by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a stock will outperform the market over the long term.

Volatility and Risk

Meridian Bank has a beta of 0.75, suggesting that its share price is 25% less volatile than the S&P 500. Comparatively, WCF Bancorp has a beta of 0.12, suggesting that its share price is 88% less volatile than the S&P 500.

Analyst Ratings

This is a summary of recent ratings and price targets for Meridian Bank and WCF Bancorp, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Meridian Bank	0	0	3	0	3.00
WCF Bancorp	0	0	0	0	0.00

Meridian Bank presently has a consensus target price of $22.00, suggesting a potential upside of 15.24%. Given Meridian Bank’s stronger consensus rating and higher possible upside, equities research analysts plainly believe Meridian Bank is more favorable than WCF Bancorp.

Earnings & Valuation

This table compares Meridian Bank and WCF Bancorp”s gross revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Meridian Bank	$205.49 million	1.10	$21.84 million	$1.89	10.10
WCF Bancorp	$11.85 million	0.96	-$40,000.00	N/A	N/A

Meridian Bank has higher revenue and earnings than WCF Bancorp.

Summary

Meridian Bank beats WCF Bancorp on 12 of the 12 factors compared between the two stocks.

About Meridian Bank

Meridian Corporation operates as the holding company for Meridian Bank that provides commercial banking products and services in Pennsylvania, New Jersey, Delaware, Florida, and Maryland. The company offers various deposit products, such as demand non-interest bearing, demand interest bearing, savings accounts, money market accounts, and time deposits. It also provides commercial and industrial loans comprising business lines of credit, term loans, small business lending, lease financing, shared national credits, and other financing; commercial real estate, and land development and construction loans for residential and commercial projects; and consumer and home equity lending, private banking, merchant, and title and land settlement services. In addition, the company operates and originates mortgage loans for 1-4 family dwellings; and offers real estate holding, investment advisory, and equipment leasing services, as well as financial planning and wealth management services. Meridian Corporation was incorporated in 2004 and is headquartered in Malvern, Pennsylvania.

About WCF Bancorp

WCF Bancorp, Inc. operates as the bank holding company for WCF Financial Bank that provides commercial banking products and services to individuals and businesses. The company offers checking and saving accounts; certificates of deposit; personal, mortgage, business, agricultural, and commercial real estate loans; debit and credit cards; and other products. It operates through full-service offices in Webster City, Independence, and Tama, Iowa. The company was founded in 1934 and is based in Webster City, Iowa.