Critical Analysis: First Internet Bancorp (NASDAQ:INBK) vs. Coastal Financial (NASDAQ:CCB)

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

Risk & Volatility

First Internet Bancorp has a beta of 0.7, suggesting that its stock price is 30% less volatile than the S&P 500. Comparatively, Coastal Financial has a beta of 1.24, suggesting that its stock price is 24% more volatile than the S&P 500.

Institutional & Insider Ownership

65.5% of First Internet Bancorp shares are owned by institutional investors. Comparatively, 59.2% of Coastal Financial shares are owned by institutional investors. 7.1% of First Internet Bancorp shares are owned by company insiders. Comparatively, 16.8% of Coastal Financial shares are owned by company insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a stock is poised for long-term growth.

Analyst Recommendations

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

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
First Internet Bancorp	0	2	2	0	2.50
Coastal Financial	0	0	2	1	3.33

First Internet Bancorp presently has a consensus price target of $43.63, indicating a potential upside of 6.53%. Coastal Financial has a consensus price target of $81.67, indicating a potential downside of 5.01%. Given First Internet Bancorp’s higher possible upside, research analysts clearly believe First Internet Bancorp is more favorable than Coastal Financial.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
First Internet Bancorp	6.92%	6.06%	0.42%
Coastal Financial	5.98%	13.86%	1.10%

Earnings and Valuation

This table compares First Internet Bancorp and Coastal Financial”s top-line revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
First Internet Bancorp	$116.63 million	3.04	$8.42 million	$2.54	16.12
Coastal Financial	$444.25 million	2.62	$44.58 million	$2.97	28.95

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

Summary

Coastal Financial beats First Internet Bancorp on 10 of the 14 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 Coastal Financial

Coastal Financial Corporation operates as the bank holding company for Coastal Community Bank that provides various banking products and services to small and medium-sized businesses, professionals, and individuals in the Puget Sound region in Washington. It accepts a range of deposit products, including demand and savings accounts, time deposits, and money market accounts. The company also offers commercial and industrial loans, such as term loans, commercial lines of credit, capital call lines working capital loans, equipment financing, borrowing base loans, small business administration loans, and other loan products; owner and non-owner-occupied real estate loans, and multi-family residential loans; construction, land, and land development loans; residential real estate loans; and consumer and other loans, including automobile, boat and recreational vehicle, and secured term loans, as well as personal lines of credit, including overdraft protection. In addition, it provides remote deposit capture, online and mobile banking, and direct and reciprocal deposit services; and debit cards. Further, the company offers business accounts and cash management services, including business checking and savings accounts, and treasury services, as well as Banking as a Service (BaaS), a platform that allows broker dealers and digital financial service providers to offer their customers banking services. Coastal Financial Corporation was founded in 1997 and is headquartered in Everett, Washington.