Horizon Bancorp (IN) (NASDAQ:HBNC) and Metropolitan Bank (NYSE:MCB) Critical Survey

Horizon Bancorp (IN) (NASDAQ:HBNC) and Metropolitan Bank (NYSE:MCB) are both small-cap finance companies, but which is the better business? We will contrast the two companies based on the strength of their institutional ownership, earnings, analyst recommendations, risk, profitability, dividends and valuation.

Earnings & Valuation

This table compares Horizon Bancorp (IN) and Metropolitan Bank”s gross revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Horizon Bancorp (IN)	$405.46 million	2.17	-$150.48 million	($3.15)	-5.46
Metropolitan Bank	$527.15 million	1.74	$71.10 million	$6.65	13.63

Metropolitan Bank has higher revenue and earnings than Horizon Bancorp (IN). Horizon Bancorp (IN) is trading at a lower price-to-earnings ratio than Metropolitan Bank, indicating that it is currently the more affordable of the two stocks.

Volatility and Risk

Horizon Bancorp (IN) has a beta of 0.83, suggesting that its share price is 17% less volatile than the S&P 500. Comparatively, Metropolitan Bank has a beta of 1.15, suggesting that its share price is 15% more volatile than the S&P 500.

Profitability

This table compares Horizon Bancorp (IN) and Metropolitan Bank’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Horizon Bancorp (IN)	-37.12%	11.56%	1.17%
Metropolitan Bank	13.49%	9.69%	0.89%

Dividends

Horizon Bancorp (IN) pays an annual dividend of $0.64 per share and has a dividend yield of 3.7%. Metropolitan Bank pays an annual dividend of $0.80 per share and has a dividend yield of 0.9%. Horizon Bancorp (IN) pays out -20.3% of its earnings in the form of a dividend. Metropolitan Bank pays out 12.0% of its earnings in the form of a dividend. Both companies have healthy payout ratios and should be able to cover their dividend payments with earnings for the next several years. Horizon Bancorp (IN) is clearly the better dividend stock, given its higher yield and lower payout ratio.

Institutional and Insider Ownership

64.5% of Horizon Bancorp (IN) shares are held by institutional investors. Comparatively, 79.8% of Metropolitan Bank shares are held by institutional investors. 2.5% of Horizon Bancorp (IN) shares are held by insiders. Comparatively, 6.1% of Metropolitan Bank shares are held by insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a company will outperform the market over the long term.

Analyst Recommendations

This is a breakdown of recent ratings for Horizon Bancorp (IN) and Metropolitan Bank, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Horizon Bancorp (IN)	2	1	2	0	2.00
Metropolitan Bank	0	1	2	1	3.00

Horizon Bancorp (IN) presently has a consensus target price of $20.33, indicating a potential upside of 18.29%. Metropolitan Bank has a consensus target price of $92.00, indicating a potential upside of 1.53%. Given Horizon Bancorp (IN)’s higher possible upside, analysts clearly believe Horizon Bancorp (IN) is more favorable than Metropolitan Bank.

Summary

Metropolitan Bank beats Horizon Bancorp (IN) on 10 of the 16 factors compared between the two stocks.

About Horizon Bancorp (IN)

Horizon Bancorp, Inc. operates as the bank holding company for Horizon Bank that engages in the provision of commercial and retail banking services. The company offers checking, saving, money market, certificate of deposits, individual retirement accounts, and time deposits, as well as non-interest- and interest-bearing demand deposits. It also provides commercial, residential real estate, mortgage, home equity, auto, personal, business, agricultural, and SBA loans, as well as credit cards. In addition, the company offers corporate and individual trust and agency, investment management, and real estate investment trust services; debit cards; treasury management; online and mobile banking; wealth, retirement, and estate and trust services; and sells various insurance products. It operates through full-service offices in northern and central Indiana and southern and central Michigan. Horizon Bancorp, Inc. was founded in 1873 and is headquartered in Michigan City, Indiana.

About Metropolitan Bank

Metropolitan Bank Holding Corp. operates as the bank holding company for Metropolitan Commercial Bank that provides a range of business, commercial, and retail banking products and services to small businesses, middle-market enterprises, public entities, and individuals in the New York metropolitan area. The company offers checking, savings, term deposit, money market, demand deposit, and other interest-bearing transaction accounts. It also provides lending products, including commercial real estate, multi-family, construction, and one-to four-family real estate loans; commercial and industrial loans; consumer loans; acquisition and renovation loans; loans to refinance or return borrower equity; loans on owner-occupied properties; working capital lines of credit; trade finance and letters of credit; and term loans. In addition, the company offers cash management services, as well as online and mobile banking, ACH, remote deposit capture, and debit cards. The company was formerly known as Metbank Holding Corp. and changed its name to Metropolitan Bank Holding Corp. in January 2007. Metropolitan Bank Holding Corp. was incorporated in 1997 and is headquartered in New York, New York.