Head to Head Survey: First Bancorp of Indiana (OTCMKTS:FBPI) versus Waterstone Financial (NASDAQ:WSBF)

Waterstone Financial (NASDAQ:WSBF) and First Bancorp of Indiana (OTCMKTS:FBPI) are both small-cap finance companies, but which is the better business? We will contrast the two companies based on the strength of their profitability, institutional ownership, earnings, risk, analyst recommendations, dividends and valuation.

Profitability

This table compares Waterstone Financial and First Bancorp of Indiana’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Waterstone Financial	14.28%	8.48%	1.30%
First Bancorp of Indiana	N/A	N/A	N/A

Risk and Volatility

Waterstone Financial has a beta of 0.71, suggesting that its share price is 29% less volatile than the S&P 500. Comparatively, First Bancorp of Indiana has a beta of 0.13, suggesting that its share price is 87% less volatile than the S&P 500.

Insider & Institutional Ownership

62.7% of Waterstone Financial shares are held by institutional investors. 6.0% of Waterstone Financial shares are held by insiders. Comparatively, 20.0% of First Bancorp of Indiana shares are held 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.

Dividends

Waterstone Financial pays an annual dividend of $0.68 per share and has a dividend yield of 3.5%. First Bancorp of Indiana pays an annual dividend of $0.32 per share and has a dividend yield of 2.2%. Waterstone Financial pays out 41.0% of its earnings in the form of a dividend. First Bancorp of Indiana pays out 152.4% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Waterstone Financial is clearly the better dividend stock, given its higher yield and lower payout ratio.

Earnings and Valuation

This table compares Waterstone Financial and First Bancorp of Indiana”s revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Waterstone Financial	$201.29 million	1.75	$26.40 million	$1.66	11.76
First Bancorp of Indiana	N/A	N/A	N/A	$0.21	69.42

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

Analyst Ratings

This is a breakdown of recent ratings and target prices for Waterstone Financial and First Bancorp of Indiana, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Waterstone Financial	0	0	1	0	3.00
First Bancorp of Indiana	0	0	0	0	0.00

Summary

Waterstone Financial beats First Bancorp of Indiana on 11 of the 13 factors compared between the two stocks.

About Waterstone Financial

Waterstone Financial, Inc. operates as a bank holding company for WaterStone Bank SSB that provides various financial services to customers in southeastern Wisconsin, the United States. It operates in two segments, Community Banking and Mortgage Banking. The Community Banking segment offers consumer and business banking products and services, such as deposit and transactional solutions, including checking accounts, online banking and bill pay services, money transfer services, as well as credit, debit, and pre-paid cards; investable funds solutions comprising savings, money market deposits, individual retirement accounts, and certificates of deposit; residential mortgages, home equity loans and lines of credit, personal and installment loans, real estate financing, business loans, and business lines of credit; and fixed and variable annuities, insurance products, and trust and investment management accounts. It also provides transaction deposits, interest bearing transaction accounts, demand deposits, non-interest-bearing demand accounts, and time deposits; secured and unsecured lines; commercial real estate construction loans; term loans for working capital, inventory, and general corporate use; and personal term loans and investment services. The Mortgage Banking segment offers residential mortgage loans for the purpose of sale in the secondary market. It also invests in a portfolio of securities include mortgage-backed securities, government-sponsored and private-label enterprise bonds, collateralized mortgage and municipal obligations, and other debt securities. The company was formerly known as Wauwatosa Holdings, Inc. and changed its name to Waterstone Financial, Inc. in August 2008. The company was founded in 1921 and is based in Wauwatosa, Wisconsin.

About First Bancorp of Indiana

First Bancorp of Indiana, Inc. operates as the bank holding company for First Federal Savings Bank, provides various banking products and services to individuals and business customers in the United States. The company accepts various deposits such as certificates of deposit, checking, health savings, individual retirement, money market, and savings accounts; loans include retail loan advisors, consumer loans, such as auto, motorcycle, boat, and recreational vehicle loans; mortgage and home equity loans; and current rates and secured deposits. It also accepts various business deposit accounts including commercial, business, small business, and community first checking accounts; lending services comprising relationship bankers; commercial real estate, equipment, owner occupied and investment real estate financing, as well as working capital line of credit, business loans, and small business administration. In addition, the company provides treasury management, online banking, merchant services, remote capture, and debit and credit card services. First Bancorp of Indiana, Inc. was founded in 1904 and is headquartered in Evansville, Indiana.