Analyzing Midland States Bancorp (NASDAQ:MSBI) & First Interstate BancSystem (NASDAQ:FIBK)

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Midland States Bancorp (NASDAQ:MSBIGet Rating) and First Interstate BancSystem (NASDAQ:FIBKGet Rating) are both finance companies, but which is the superior business? We will compare the two companies based on the strength of their dividends, analyst recommendations, earnings, risk, profitability, valuation and institutional ownership.

Risk and Volatility

Midland States Bancorp has a beta of 0.88, indicating that its stock price is 12% less volatile than the S&P 500. Comparatively, First Interstate BancSystem has a beta of 1.04, indicating that its stock price is 4% more volatile than the S&P 500.

Profitability

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

Net Margins Return on Equity Return on Assets
Midland States Bancorp 26.88% 13.04% 1.21%
First Interstate BancSystem 29.28% 8.40% 0.86%

Analyst Recommendations

This is a breakdown of recent ratings and price targets for Midland States Bancorp and First Interstate BancSystem, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Midland States Bancorp 0 1 0 0 2.00
First Interstate BancSystem 0 1 3 0 2.75

Midland States Bancorp presently has a consensus target price of $28.00, suggesting a potential upside of 7.94%. First Interstate BancSystem has a consensus target price of $44.00, suggesting a potential upside of 26.69%. Given First Interstate BancSystem’s stronger consensus rating and higher probable upside, analysts plainly believe First Interstate BancSystem is more favorable than Midland States Bancorp.

Institutional & Insider Ownership

58.5% of Midland States Bancorp shares are held by institutional investors. Comparatively, 69.4% of First Interstate BancSystem shares are held by institutional investors. 5.8% of Midland States Bancorp shares are held by company insiders. Comparatively, 6.4% of First Interstate BancSystem shares are held by company 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.

Valuation & Earnings

This table compares Midland States Bancorp and First Interstate BancSystem’s revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Midland States Bancorp $307.72 million 1.88 $81.32 million $3.68 7.05
First Interstate BancSystem $656.00 million 3.29 $192.10 million $1.92 18.09

First Interstate BancSystem has higher revenue and earnings than Midland States Bancorp. Midland States 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.

Dividends

Midland States Bancorp pays an annual dividend of $1.16 per share and has a dividend yield of 4.5%. First Interstate BancSystem pays an annual dividend of $1.64 per share and has a dividend yield of 4.7%. Midland States Bancorp pays out 31.5% of its earnings in the form of a dividend. First Interstate BancSystem pays out 85.4% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Midland States Bancorp has raised its dividend for 6 consecutive years and First Interstate BancSystem has raised its dividend for 9 consecutive years. First Interstate BancSystem is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Summary

First Interstate BancSystem beats Midland States Bancorp on 13 of the 17 factors compared between the two stocks.

Midland States Bancorp Company Profile (Get Rating)

Midland States Bancorp, Inc. operates as a financial holding company for Midland States Bank that provides various banking products and services to individuals, businesses, municipalities, and other entities. It operates through Banking, Wealth Management, and Other segments. The company accepts various deposits, such as checking, savings, money market, and sweep accounts, as well as certificates of deposits. It also offers term loans to purchase capital equipment; lines of credit for working capital and operational purposes; commercial real estate loans for owner occupied and non-owner occupied commercial property, as well as farmland loans; construction and land development loans developers of commercial real estate investment properties, residential developments, individual clients for construction of single family homes, as well as to construct owner-user properties; and residential real estate loans and home equity lines of credit.. In addition, the company provides consumer installment loans for the purchase of cars, boats, and other recreational vehicles, as well as for the purchase of major appliances and other home improvement projects; commercial equipment leasing; and trust and wealth management products and services, including financial and estate planning, trustee and custodial services, investment management, tax and insurance planning, business planning, corporate retirement plan consulting and administration, and retail brokerage services. As of December 31, 2021, it operated 52 full-service banking offices. The company was founded in 1881 and is headquartered in Effingham, Illinois.

First Interstate BancSystem Company Profile (Get Rating)

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, and other operational services, as well as online and mobile banking services. It serves individuals, businesses, municipalities, and other entities in various industries, including agriculture, construction, education, energy, governmental services, healthcare, hospitality, housing, mining, professional services, real estate development, retail, technology, tourism, and wholesale trade. As of December 31, 2021, it operated 147 banking offices, including detached drive-up facilities in communities across Idaho, Montana, Oregon, South Dakota, Washington, and Wyoming. The company was incorporated in 1971 and is headquartered in Billings, Montana.



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