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Independent Bank Corporation (IBCP)
:IBCP

Independent Bank (IBCP) AI Stock Analysis

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Independent Bank

(NASDAQ:IBCP)

Rating:71Outperform
Price Target:
$35.00
▲(1.16%Upside)
The overall stock score reflects Independent Bank's strong financial performance, particularly in terms of revenue growth and profitability. The stock's valuation is attractive with a low P/E ratio and a solid dividend yield. While the technical analysis indicates steady trends, the earnings call presents a balanced outlook with both strengths in loan growth and concerns over income declines. These factors collectively position the stock as a stable investment with room for improvement in operational efficiency.

Independent Bank (IBCP) vs. SPDR S&P 500 ETF (SPY)

Independent Bank Business Overview & Revenue Model

Company DescriptionIndependent Bank Corporation operates as the bank holding company for Independent Bank that provides various banking services to individuals and businesses. The company offers checking and savings accounts, commercial lending, direct and indirect consumer financing, mortgage lending, and safe deposit box services, as well as automatic teller machine, and Internet and mobile banking services. It also provides title insurance, insurance brokerage, and investment services. The company offers its services through approximately 59 branches, two drive-thru facilities, and seven loan production offices in Michigan; and two loan production offices in Ohio. Independent Bank Corporation was founded in 1864 and is based in Grand Rapids, Michigan.
How the Company Makes MoneyIndependent Bank Corporation generates revenue primarily through interest income from loans and investment securities. The bank earns interest by lending money to consumers and businesses in the form of mortgages, personal loans, auto loans, and commercial loans. Additionally, Independent Bank earns non-interest income through service charges on deposit accounts, fees from various banking services, and investment advisory fees. The bank also benefits from partnerships with financial service providers to offer insurance and investment products, which contribute to its earnings. Effective risk management and a strong focus on customer relationships are key factors that support its financial performance.

Independent Bank Earnings Call Summary

Earnings Call Date:Apr 24, 2025
(Q1-2025)
|
% Change Since: 11.54%|
Next Earnings Date:Jul 24, 2025
Earnings Call Sentiment Neutral
The call reported strong loan growth, net interest margin expansion, and excellent credit quality, alongside technological advancements. However, there were declines in net income, non-interest income, and business deposits, alongside a loss on mortgage loan servicing. The positives and negatives were relatively balanced, highlighting both achievements and areas of concern.
Q1-2025 Updates
Positive Updates
Positive Loan Growth
Overall loans increased by 3.4% annualized, with commercial loan growth strong at $54.8 million or an 11% annualized rate.
Net Interest Income and Margin Expansion
Net interest income increased by $3.5 million from the year-ago period, with a net interest margin expansion to 3.49% from 3.30%.
Strong Credit Quality
Continued excellent credit metrics with non-performing loans at 17 basis points of total loans and net charge-offs at just 1 basis point of average loans.
Increase in Tangible Book Value
Tangible book value per share increased by 13.2% compared to the prior year quarter.
Innovative Technology Investments
Launch of a redesigned website that is faster, easier to navigate, and more helpful for visitors, reflecting a people-first bank approach.
Negative Updates
Slight Decline in Net Income
Net income for Q1 2025 was $15.6 million or $0.74 per diluted share, down from $16 million or $0.76 per diluted share in the prior year period.
Non-Interest Income Decline
Non-interest income totaled $10.4 million, down from $12.6 million in the year-ago quarter.
Loss on Mortgage Loan Servicing
A $0.6 million loss on mortgage loan servicing, affected by a $1.5 million loss due to change in price and a $0.9 million decrease due to paydowns.
Business Deposits Decline
Business deposits declined by $44 million during the first quarter.
Company Guidance
During the Independent Bank Corporation's first quarter 2025 earnings call, the company reported a net income of $15.6 million or $0.74 per diluted share, slightly down from the previous year's $16 million or $0.76 per diluted share. Key metrics highlighted include a 3.4% annualized increase in loans and a 0.8% rise in core deposits. The company noted a four basis point margin expansion and a decrease in total cost of funds by 12 basis points to 1.80%. Credit quality remained strong with non-performing assets at 14 basis points of total assets and net charge-offs at one basis point of average loans annualized. The allowance for credit losses was 1.47% of total loans. Additionally, the bank's tangible book value per share grew by 13.2% compared to the prior year. Total deposits were $4.63 billion, with retail deposits up by $34.2 million and business deposits down by $44 million. The presentation also included an outlook on the company's strong regulatory capital position and an update on the cost of funds compared to the Federal Reserve's rates.

Independent Bank Financial Statement Overview

Summary
Independent Bank exhibits strong financial performance with robust revenue growth of 46.85%, healthy profitability margins, and solid cash flow generation. The balance sheet is conservative with a low debt-to-equity ratio of 0.27, enhancing financial stability. However, there is room for improving operational efficiency as indicated by the EBIT margin of 25.57%.
Income Statement
75
Positive
The TTM gross profit margin stands at 76.21%, indicating strong profitability. The net profit margin is 20.94%, showing healthy bottom-line profitability. Revenue growth over the past year is robust at 46.85%, indicating strong upward trajectory. However, the EBIT margin of 25.57% suggests room for improving operational efficiency. EBITDA margin is strong at 35.45%, reflecting good cash flow generation from operations.
Balance Sheet
70
Positive
The debt-to-equity ratio is low at 0.27, indicating a conservative leverage position, which is positive for financial stability. Return on Equity (ROE) at 14.20% signals efficient use of equity for generating profits. The equity ratio is reasonable at 8.77%, showing that a modest portion of assets is financed by equity. While the leverage is low, the equity ratio suggests that the company is somewhat reliant on liabilities to finance its operations.
Cash Flow
72
Positive
The free cash flow growth rate is strong at 26.82%, indicating improved cash generation capability. The operating cash flow to net income ratio is 1.11, suggesting that the company generates sufficient cash from operations relative to its net income. The free cash flow to net income ratio is 1.05, reflecting adequate free cash flow generation relative to profits. The strong cash flow metrics support the company’s operational and financial flexibility.
BreakdownTTMDec 2024Dec 2023Dec 2022Dec 2021Dec 2020
Income Statement
Total Revenue315.05M316.33M283.83M224.23M207.12M214.19M
Gross Profit212.05M211.68M193.83M198.79M199.52M185.25M
EBITDA92.20M93.05M83.69M88.61M89.44M78.64M
Net Income66.39M66.79M59.07M63.35M62.90M56.15M
Balance Sheet
Total Assets5.33B5.34B5.26B5.00B4.70B4.20B
Cash, Cash Equivalents and Short-Term Investments657.82M145.27M849.13M853.72M1.52B1.19B
Total Debt124.43M124.39M129.26M226.10M108.96M108.82M
Total Liabilities4.86B4.88B4.86B4.65B4.31B3.81B
Stockholders Equity467.28M454.69M404.45M347.60M398.48M389.52M
Cash Flow
Free Cash Flow65.62M55.20M69.56M88.95M104.32M53.79M
Operating Cash Flow74.02M63.15M75.59M94.63M110.15M58.68M
Investing Cash Flow-132.52M-118.16M-162.94M-424.59M-563.06M-553.91M
Financing Cash Flow24.80M5.11M182.77M294.86M443.68M548.63M

Independent Bank Technical Analysis

Technical Analysis Sentiment
Positive
Last Price34.60
Price Trends
50DMA
31.60
Positive
100DMA
31.50
Positive
200DMA
33.02
Positive
Market Momentum
MACD
0.60
Negative
RSI
74.02
Negative
STOCH
94.44
Negative
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For IBCP, the sentiment is Positive. The current price of 34.6 is above the 20-day moving average (MA) of 31.71, above the 50-day MA of 31.60, and above the 200-day MA of 33.02, indicating a bullish trend. The MACD of 0.60 indicates Negative momentum. The RSI at 74.02 is Negative, neither overbought nor oversold. The STOCH value of 94.44 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for IBCP.

Independent Bank Risk Analysis

Independent Bank disclosed 15 risk factors in its most recent earnings report. Independent Bank reported the most risks in the "Finance & Corporate" category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks

Independent Bank Peers Comparison

Overall Rating
UnderperformOutperform
Sector (67)
Financial Indicators
Name
Overall Rating
Market Cap
P/E Ratio
ROE
Dividend Yield
Revenue Growth
EPS Growth
77
Outperform
$700.21M15.936.26%22.18%277.02%
75
Outperform
$716.86M11.1711.13%2.56%7.98%10.16%
73
Outperform
$722.75M15.926.06%3.90%9.55%90.70%
71
Outperform
$716.94M11.0115.04%3.00%5.59%7.03%
67
Neutral
$17.07B11.919.69%3.75%11.66%-9.47%
CACAC
67
Neutral
$732.54M13.788.24%3.88%18.13%4.86%
CACAC
67
Neutral
$732.54M13.788.24%3.88%18.13%4.86%
54
Neutral
$632.76M-3.60%3.17%1.68%-159.14%
* Financial Sector Average
Performance Comparison
Ticker
Company Name
Price
Change
% Change
IBCP
Independent Bank
34.60
9.42
37.41%
CAC
Camden National
43.34
12.53
40.67%
CAC
Camden National
43.34
12.53
40.67%
EGBN
Eagle Bancorp
20.83
3.60
20.89%
GSBC
Great Southern Bancorp
62.51
10.42
20.00%
HBNC
Horizon Bancorp
16.39
4.81
41.54%
NBBK
NB Bancorp, Inc.
18.76
3.71
24.65%

Independent Bank Corporate Events

Shareholder MeetingsDividendsFinancial Disclosures
Independent Bank Reports Strong 2024 Financial Performance
Positive
Apr 22, 2025

During the 2025 Annual Meeting of Shareholders held on April 22, Independent Bank Corporation presented its financial performance for 2024, highlighting a net income of $66.8 million and a 5% increase in cash dividends per share. The meeting included voting on the election of directors, ratification of auditors, and an advisory vote on executive compensation. The company reported strong loan growth, particularly in commercial loans, and maintained a solid balance sheet with a loan-to-deposit ratio of 86.8%. These results underscore Independent Bank’s consistent growth and profitability, reinforcing its strong position in the financial market.

Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.

Disclaimer

This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.Date of analysis: Jun 24, 2025