Head to Head Analysis: First Internet Bancorp (NASDAQ:INBK) vs. Byline Bancorp (NYSE:BY)

First Internet Bancorp (NASDAQ:INBK) and Byline Bancorp (NYSE:BY) are both small-cap finance companies, but which is the better stock? We will contrast the two businesses based on the strength of their profitability, valuation, earnings, analyst recommendations, risk, institutional ownership and dividends.

Valuation and Earnings

This table compares First Internet Bancorp and Byline Bancorp”s top-line revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
First Internet Bancorp	$339.23 million	0.54	$25.28 million	($3.80)	-5.58
Byline Bancorp	$633.15 million	2.24	$130.05 million	$2.88	10.76

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

Volatility & Risk

First Internet Bancorp has a beta of 0.81, indicating that its stock price is 19% less volatile than the S&P 500. Comparatively, Byline Bancorp has a beta of 0.86, indicating that its stock price is 14% less volatile than the S&P 500.

Dividends

First Internet Bancorp pays an annual dividend of $0.24 per share and has a dividend yield of 1.1%. Byline Bancorp pays an annual dividend of $0.40 per share and has a dividend yield of 1.3%. First Internet Bancorp pays out -6.3% of its earnings in the form of a dividend. Byline Bancorp pays out 13.9% 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. Byline Bancorp has increased its dividend for 1 consecutive years. Byline Bancorp is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Profitability

This table compares First Internet Bancorp and Byline Bancorp’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
First Internet Bancorp	-9.35%	-2.05%	-0.13%
Byline Bancorp	20.54%	11.38%	1.39%

Analyst Ratings

This is a summary of current recommendations and price targets for First Internet Bancorp and Byline Bancorp, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
First Internet Bancorp	1	3	1	0	2.00
Byline Bancorp	0	1	2	1	3.00

First Internet Bancorp currently has a consensus target price of $24.33, indicating a potential upside of 14.67%. Byline Bancorp has a consensus target price of $33.67, indicating a potential upside of 8.69%. Given First Internet Bancorp’s higher probable upside, research analysts clearly believe First Internet Bancorp is more favorable than Byline Bancorp.

Institutional & Insider Ownership

65.5% of First Internet Bancorp shares are owned by institutional investors. Comparatively, 67.7% of Byline Bancorp shares are owned by institutional investors. 8.0% of First Internet Bancorp shares are owned by insiders. Comparatively, 28.8% of Byline Bancorp shares are owned by insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a stock will outperform the market over the long term.

Summary

Byline Bancorp beats First Internet Bancorp on 16 of the 18 factors compared between the two stocks.

About First Internet Bancorp

First Internet Bancorp operates as the bank holding company for First Internet Bank of Indiana that provides commercial, small business, consumer, and municipal banking products and services to individuals and commercial customers in the United States. The company accepts non-interest bearing and interest-bearing demand deposit, commercial deposit, savings, money market, and Banking-as-a-Service brokered deposit accounts, as well as certificates of deposit. It also offers commercial and industrial, owner-occupied and investor commercial real estate, construction, residential mortgage, home equity, line of credit and home improvement, small installment, term, and other consumer loans, as well as single tenant lease financing, and public and healthcare finance; franchise finance; and small business lending. In addition, the company is involved in the purchase, manage, service, and safekeeping of municipal securities; and provision of public and municipal lending and leasing products to government entities. Further, the company offers corporate credit card and treasury management services. First Internet Bancorp was founded in 1998 and is headquartered in Fishers, Indiana.

About Byline Bancorp

Byline Bancorp, Inc. operates as the bank holding company for Byline Bank that provides various banking products and services for small and medium sized businesses, commercial real estate and financial sponsors, and consumers in the United States. It offers various retail deposit products, including non-interest-bearing accounts, money market demand accounts, savings accounts, interest-bearing checking accounts, and time deposits; ATM and debit cards; and online, mobile, and text banking services, as well as commercial deposits. The company also provides term loans, revolving lines of credit, and construction financing services; senior secured financing solutions to private equity backed lower middle market companies; small business administration and united states department of agriculture loans; and treasury management products and services. In addition, it offers financing solutions for equipment vendors and their end users; syndication services; and investment, trust, and wealth management services that include fiduciary and executor services, financial planning solutions, investment advisory services, and private banking services for foundations and endowments, and high net worth individuals. The company was formerly known as Metropolitan Bank Group, Inc. and changed its name to Byline Bancorp, Inc. in 2015. Byline Bancorp, Inc. was founded in 1914 and is headquartered in Chicago, Illinois.