Analyzing First Interstate BancSystem (NASDAQ:FIBK) and Solera National Bancorp (OTCMKTS:SLRK)

Solera National Bancorp (OTCMKTS:SLRK) and First Interstate BancSystem (NASDAQ:FIBK) are both finance companies, but which is the better stock? We will compare the two businesses based on the strength of their institutional ownership, earnings, risk, profitability, dividends, analyst recommendations and valuation.

Volatility & Risk

Solera National Bancorp has a beta of 0.31, suggesting that its stock price is 69% less volatile than the S&P 500. Comparatively, First Interstate BancSystem has a beta of 0.77, suggesting that its stock price is 23% less volatile than the S&P 500.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
Solera National Bancorp	26.93%	N/A	N/A
First Interstate BancSystem	22.64%	9.13%	1.16%

Institutional and Insider Ownership

88.7% of First Interstate BancSystem shares are owned by institutional investors. 17.4% of Solera National Bancorp shares are owned by insiders. Comparatively, 8.2% of First Interstate BancSystem 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.

Analyst Recommendations

This is a summary of current ratings and recommmendations for Solera National Bancorp and First Interstate BancSystem, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Solera National Bancorp	0	0	0	0	0.00
First Interstate BancSystem	2	3	3	0	2.13

First Interstate BancSystem has a consensus target price of $37.33, suggesting a potential upside of 6.36%. Given First Interstate BancSystem’s stronger consensus rating and higher possible upside, analysts clearly believe First Interstate BancSystem is more favorable than Solera National Bancorp.

Earnings and Valuation

This table compares Solera National Bancorp and First Interstate BancSystem”s top-line revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Solera National Bancorp	$83.83 million	0.97	$23.02 million	$5.82	3.26
First Interstate BancSystem	$1.41 billion	2.51	$302.10 million	$3.07	11.43

First Interstate BancSystem has higher revenue and earnings than Solera National Bancorp. Solera National 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.

Summary

First Interstate BancSystem beats Solera National Bancorp on 11 of the 14 factors compared between the two stocks.

About Solera National Bancorp

Solera National Bancorp, Inc. operates as the bank holding company for Solera National Bank that provides commercial and consumer banking services in the United States. The company offers checking and savings accounts, money market accounts, time and demand deposits, and individual retirement accounts (IRA), as well as certificates of deposit; and real estate secured loans, construction loans, small business administration loans, business lines of credit, and equipment financing. It also provides online banking, account analysis, combined account analysis, commercial sweep, remote deposit, ACH origination, payroll direct deposit, merchant, business debit card, and cash management services. The company was incorporated in 2006 and is based in Lakewood, Colorado.

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.