Paragon Commercial Corporation (NASDAQ: PBNC) and First Internet Bancorp (NASDAQ:INBK) are both small-cap finance companies, but which is the superior business? We will contrast the two companies based on the strength of their risk, dividends, profitability, analyst recommendations, valuation, institutional ownership and earnings.

Earnings and Valuation

This table compares Paragon Commercial Corporation and First Internet Bancorp’s gross revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio NetIncome Earnings Per Share Price/Earnings Ratio
Paragon Commercial Corporation $55.46 million 5.42 $13.39 million $2.54 21.67
First Internet Bancorp $72.98 million 4.13 $12.07 million $2.39 15.00

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

Insider & Institutional Ownership

33.7% of Paragon Commercial Corporation shares are owned by institutional investors. Comparatively, 49.0% of First Internet Bancorp shares are owned by institutional investors. 23.3% of Paragon Commercial Corporation shares are owned by insiders. Comparatively, 7.6% of First Internet Bancorp shares are owned by insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a stock will outperform the market over the long term.

Dividends

First Internet Bancorp pays an annual dividend of $0.24 per share and has a dividend yield of 0.7%. Paragon Commercial Corporation does not pay a dividend. First Internet Bancorp pays out 10.0% of its earnings in the form of a dividend.

Risk and Volatility

Paragon Commercial Corporation has a beta of 0.64, suggesting that its stock price is 36% less volatile than the S&P 500. Comparatively, First Internet Bancorp has a beta of -0.02, suggesting that its stock price is 102% less volatile than the S&P 500.

Analyst Ratings

This is a breakdown of current recommendations and price targets for Paragon Commercial Corporation and First Internet Bancorp, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Paragon Commercial Corporation 0 2 0 0 2.00
First Internet Bancorp 0 0 3 0 3.00

First Internet Bancorp has a consensus target price of $43.67, indicating a potential upside of 21.80%. Given First Internet Bancorp’s stronger consensus rating and higher possible upside, analysts plainly believe First Internet Bancorp is more favorable than Paragon Commercial Corporation.

Profitability

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

Net Margins Return on Equity Return on Assets
Paragon Commercial Corporation 22.76% 9.85% 0.89%
First Internet Bancorp 17.60% 9.74% 0.74%

Summary

Paragon Commercial Corporation beats First Internet Bancorp on 10 of the 16 factors compared between the two stocks.

About Paragon Commercial Corporation

Paragon Commercial Corporation is a bank holding company for Paragon Bank (the Bank). The Bank is engaged in general commercial banking in Wake and Mecklenburg Counties, North California. The Bank offers private banking and commercial banking services. Its private banking services include deposit services, such as debit cards and safe deposit boxes. Its commercial banking services include deposit services, such as business checking, nonprofit checking and business money market; courier service; remote deposit capture; merchant services; zero balance accounts; cash vault/deposit service, and account management services, such as automated sweeps and reconciliation. It also offers mobile and online banking services. Its borrowing services include commercial loans and lines, corporate credit cards and home purchase/refinance. It also offers wealth management and investment services.

About First Internet Bancorp

First Internet Bancorp is a bank holding company that conducts its business activities through its subsidiary, First Internet Bank of Indiana (the Bank). The Company offers a complement of products and services on a nationwide basis. The Company conducts its deposit operations primarily over the Internet. The Company also offers commercial real estate (CRE) lending, including nationwide single tenant lease financing and commercial and industrial (C&I) lending, including business banking/treasury management services. The Bank provides commercial and retail banking services, with operations conducted on the Internet at www.firstib.com. It offers residential real estate loans, home equity loans and lines of credit, and consumer loans, and loans to commercial clients, which include commercial loans, commercial real estate loans, letters of credit and single tenant lease financing. The Bank’s subsidiary, JKH Realty Services, LLC manages real estate owned properties.

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