Northeast Community Bancorp (NASDAQ:NECB) vs. First Internet Bancorp (NASDAQ:INBK) Critical Analysis

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

Institutional & Insider Ownership

65.5% of First Internet Bancorp shares are owned by institutional investors. Comparatively, 53.3% of Northeast Community Bancorp shares are owned by institutional investors. 8.0% of First Internet Bancorp shares are owned by insiders. Comparatively, 6.3% of Northeast Community Bancorp shares are owned by insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a company is poised for long-term growth.

Analyst Ratings

This is a summary of current ratings and recommmendations for First Internet Bancorp and Northeast Community Bancorp, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
First Internet Bancorp	2	2	1	0	1.80
Northeast Community Bancorp	0	2	0	0	2.00

First Internet Bancorp currently has a consensus target price of $24.33, suggesting a potential upside of 24.44%. Given First Internet Bancorp’s higher probable upside, equities analysts plainly believe First Internet Bancorp is more favorable than Northeast Community Bancorp.

Dividends

First Internet Bancorp pays an annual dividend of $0.24 per share and has a dividend yield of 1.2%. Northeast Community Bancorp pays an annual dividend of $0.80 per share and has a dividend yield of 3.7%. First Internet Bancorp pays out -6.3% of its earnings in the form of a dividend. Northeast Community Bancorp pays out 24.5% 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. Northeast Community Bancorp has raised its dividend for 2 consecutive years. Northeast Community Bancorp is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Earnings and Valuation

This table compares First Internet Bancorp and Northeast Community Bancorp”s revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
First Internet Bancorp	$108.06 million	1.58	$25.28 million	($3.80)	-5.15
Northeast Community Bancorp	$162.80 million	1.85	$47.07 million	$3.27	6.58

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

Risk and Volatility

First Internet Bancorp has a beta of 0.93, indicating that its stock price is 7% less volatile than the S&P 500. Comparatively, Northeast Community Bancorp has a beta of 0.42, indicating that its stock price is 58% less volatile than the S&P 500.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
First Internet Bancorp	-9.35%	-2.00%	-0.13%
Northeast Community Bancorp	27.97%	13.43%	2.23%

Summary

Northeast Community Bancorp beats First Internet Bancorp on 11 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 Northeast Community Bancorp

Northeast Community Bancorp, Inc. operates as the holding company for NorthEast Community Bank that provides financial services for individuals and businesses. It accepts various deposit instruments, including checking accounts, money market accounts, regular savings accounts, and non-interest bearing demand accounts, as well as certificates of deposits. The company also offers construction, commercial and industrial, multifamily and mixed-use real estate, non-residential real estate loans, and consumer loans. In addition, it invests in various types of liquid assets, including U.S. Treasury obligations, municipal securities, deposits at the Federal Home Loan Bank of New York, and certificates of deposit of federally insured institutions, as well as securities of various federal agencies, and of state and municipal governments. Further, the company offers financial planning and investment advisory services; and life insurance products and fixed-rate annuities. It operates full-service branches located in Bronx, New York, Orange, Rockland, and Sullivan Counties in New York and Essex, Middlesex, and Norfolk Counties in Massachusetts; and loan production offices located in White Plains, New York, and New City counties in New York and Danvers, Massachusetts. Northeast Community Bancorp, Inc. was founded in 1934 and is headquartered in White Plains, New York.