Republic Bancorp (NASDAQ:RBCAA) and First Internet Bancorp (NASDAQ:INBK) Critical Review

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

Earnings and Valuation

This table compares First Internet Bancorp and Republic Bancorp”s gross revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
First Internet Bancorp	$322.87 million	0.75	-$35.17 million	($3.60)	-7.71
Republic Bancorp	$521.34 million	3.53	$131.32 million	$6.55	14.33

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

Dividends

First Internet Bancorp pays an annual dividend of $0.24 per share and has a dividend yield of 0.9%. Republic Bancorp pays an annual dividend of $1.98 per share and has a dividend yield of 2.1%. First Internet Bancorp pays out -6.7% of its earnings in the form of a dividend. Republic Bancorp pays out 30.2% 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. Republic Bancorp has increased its dividend for 27 consecutive years. Republic Bancorp is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Analyst Ratings

This is a breakdown of recent ratings and recommmendations for First Internet Bancorp and Republic Bancorp, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
First Internet Bancorp	1	3	2	0	2.17
Republic Bancorp	0	3	1	0	2.25

First Internet Bancorp currently has a consensus price target of $29.38, suggesting a potential upside of 5.78%. Republic Bancorp has a consensus price target of $98.00, suggesting a potential upside of 4.43%. Given First Internet Bancorp’s higher probable upside, analysts clearly believe First Internet Bancorp is more favorable than Republic Bancorp.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
First Internet Bancorp	-9.01%	-0.55%	-0.04%
Republic Bancorp	25.38%	11.20%	1.77%

Insider and Institutional Ownership

65.5% of First Internet Bancorp shares are owned by institutional investors. Comparatively, 24.4% of Republic Bancorp shares are owned by institutional investors. 6.2% of First Internet Bancorp shares are owned by company insiders. Comparatively, 55.9% of Republic Bancorp shares are owned by company 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

First Internet Bancorp has a beta of 0.83, meaning that its share price is 17% less volatile than the S&P 500. Comparatively, Republic Bancorp has a beta of 0.53, meaning that its share price is 47% less volatile than the S&P 500.

Summary

Republic Bancorp beats First Internet Bancorp on 12 of the 17 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 Republic Bancorp

Republic Bancorp, Inc. operates as a bank holding company for Republic Bank & Trust Company that provides various banking products and services in the United States. It operates in six segments: Traditional Banking, Warehouse, Mortgage Banking, Tax Refund Solutions, Republic Payment Solutions, and Republic Credit Solutions. The company offers demand, money market accounts, savings, individual retirement accounts, time, brokered, and other certificates of deposit; and retail and commercial mortgage, construction and land development, consumer, aircraft, and marine loans. It also provides credit cards; title insurance and other financial products and services; and private banking, lockbox processing, remote deposit capture, business online banking, account reconciliation, automated clearing house processing, and internet and mobile banking services. In addition, it offers short-term and revolving credit facilities to mortgage bankers through mortgage warehouse lines of credit; mortgage banking; tax refund solutions, which facilitate the receipt and payment of federal and state tax refund products through third-party tax preparers and tax-preparation software providers; payments-related products and services to consumers through third party service providers; and consumer credit products. The company offers its services through full-services banking centers in Kentucky, Indiana, Florida, Ohio, and Tennessee. Republic Bancorp, Inc. was incorporated in 1974 and is headquartered in Louisville, Kentucky.