Contrasting First Financial Bancorp. (NASDAQ:FFBC) & First Interstate BancSystem (NASDAQ:FIBK)

First Interstate BancSystem (NASDAQ:FIBK) and First Financial Bancorp. (NASDAQ:FFBC) are both mid-cap finance companies, but which is the superior investment? We will contrast the two companies based on the strength of their valuation, earnings, analyst recommendations, dividends, risk, profitability and institutional ownership.

Institutional and Insider Ownership

88.7% of First Interstate BancSystem shares are owned by institutional investors. Comparatively, 77.2% of First Financial Bancorp. shares are owned by institutional investors. 8.2% of First Interstate BancSystem shares are owned by insiders. Comparatively, 1.1% of First Financial Bancorp. shares are owned by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company will outperform the market over the long term.

Volatility and Risk

First Interstate BancSystem has a beta of 0.83, indicating that its share price is 17% less volatile than the S&P 500. Comparatively, First Financial Bancorp. has a beta of 1.03, indicating that its share price is 3% more volatile than the S&P 500.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
First Interstate BancSystem	16.04%	7.30%	0.87%
First Financial Bancorp.	20.64%	10.72%	1.46%

Valuation and Earnings

This table compares First Interstate BancSystem and First Financial Bancorp.”s gross revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
First Interstate BancSystem	$1.01 billion	3.03	$226.00 million	$2.37	12.52
First Financial Bancorp.	$884.98 million	2.59	$228.83 million	$2.70	8.62

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

Analyst Ratings

This is a summary of recent recommendations for First Interstate BancSystem and First Financial Bancorp., as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
First Interstate BancSystem	1	3	3	0	2.29
First Financial Bancorp.	0	5	3	0	2.38

First Interstate BancSystem currently has a consensus price target of $35.57, suggesting a potential upside of 19.85%. First Financial Bancorp. has a consensus price target of $29.50, suggesting a potential upside of 26.77%. Given First Financial Bancorp.’s stronger consensus rating and higher probable upside, analysts plainly believe First Financial Bancorp. is more favorable than First Interstate BancSystem.

Dividends

First Interstate BancSystem pays an annual dividend of $1.88 per share and has a dividend yield of 6.3%. First Financial Bancorp. pays an annual dividend of $1.00 per share and has a dividend yield of 4.3%. First Interstate BancSystem pays out 79.3% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. First Financial Bancorp. pays out 37.0% of its earnings in the form of a dividend. First Financial Bancorp. has raised its dividend for 1 consecutive years.

Summary

First Financial Bancorp. beats First Interstate BancSystem on 10 of the 16 factors compared between the two stocks.

About First Interstate BancSystem

First Interstate BancSystem, Inc. operates as the bank holding company for First Interstate Bank that provides range of banking products and services in the United States. It offers various traditional depository products, including checking, savings, and time deposits; and repurchase agreements primarily for commercial and municipal depositors. The company also offers real estate loans comprising commercial real estate, construction, residential, agricultural, and other real estate loans; consumer loans comprising direct personal loans, credit card loans and lines of credit, and indirect loans; variable and fixed rate commercial loans for small and medium-sized manufacturing, wholesale, retail, and service businesses for working capital needs and business expansions; and agricultural loans. In addition, it provides a range of trust, employee benefit, investment management, insurance, agency, and custodial services to individuals, businesses, and nonprofit organizations. Further, the company offers marketing, credit review, loan servicing, credit cards issuance and servicing, mortgage loan sales and servicing, indirect consumer loan purchasing and processing, loan collection services, other operational, and specialized staff support services, as well as online and mobile banking services. The company serves individuals, businesses, municipalities, and other entities in various industries, including agriculture, construction, education, governmental services, healthcare, hospitality, housing, professional services, real estate development, retail, technology, tourism, and wholesale trade. First Interstate BancSystem, Inc. was incorporated in 1971 and is headquartered in Billings, Montana.

About First Financial Bancorp.

First Financial Bancorp. operates as the bank holding company for First Financial Bank that provides commercial banking and related services to individuals and businesses in Ohio, Indiana, Kentucky, and Illinois. The company offers checking, savings, and money-market accounts; and accepts various deposit products, such as interest-bearing and non-interest-bearing accounts, time deposits, and cash management services for commercial customers. It also provides real estate loans secured by residential property, such as one to four family residential housing units or commercial property comprising owner-occupied and/or investor income producing real estate consisting of apartments, shopping centers, and office buildings; commercial and industrial loans for various purposes, including inventory, receivables, and equipment, as well as equipment and leasehold improvement financing for franchisees; consumer loans comprising new and used vehicle loans, second mortgages on residential real estate, and unsecured loans; and home equity lines of credit. In addition, the company offers commercial financing to the insurance industry, registered investment advisors, certified public accountants, indirect auto finance companies, and restaurant franchisees. Further, it provides a range of trust and wealth management services; lease and equipment financing services; and currency payments, foreign exchange hedging, and other advisory products. First Financial Bancorp. was founded in 1863 and is headquartered in Cincinnati, Ohio.