Independent Bank (IBCP) AI Stock Analysis

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Independent Bank

(NASDAQ:IBCP)

66Neutral

Independent Bank's overall score reflects its stable financial performance and attractive valuation. Strong net income growth and strategic management changes are offset by technical analysis indicating bearish momentum. Operational challenges in terms of negative EBIT and declining cash reserves require attention.

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

Market Cap

$604.44M

Dividend Yield3.4%

Average Volume (3M)114.14K

Price to Earnings (P/E)9.1

Beta (1Y)0.93

Revenue Growth10.58%

EPS Growth13.51%

CountryUS

Employees732

SectorFinancial

Sector Strength86

IndustryBanks - Regional

Share Statistics

EPS (TTM)3.16

Shares Outstanding20,972,763

10 Day Avg. Volume124,368

30 Day Avg. Volume114,143

Financial Highlights & Ratios

PEG Ratio0.67

Price to Book (P/B)N/A

Price to Sales (P/S)3.01

Price to Cash Flow (P/CF)10.00

P/FCF Ratio4.10

Enterprise Value/Market CapN/A

Enterprise Value/RevenueN/A

Enterprise Value/Gross ProfitN/A

Enterprise Value/EbitdaN/A

Forecast

1Y Price Target

$39.67

Price Target Upside39.10% Upside

Rating ConsensusHold

Number of Analyst Covering3

Independent Bank Business Overview & Revenue Model

Company DescriptionIndependent Bank Corporation (IBCP) is a bank holding company headquartered in Grand Rapids, Michigan. It operates through its subsidiary, Independent Bank, which provides a range of commercial banking services to individuals and businesses. The bank's core offerings include personal and business checking and savings accounts, loans, mortgages, and other financial services. Independent Bank primarily serves customers in Michigan, focusing on community-oriented banking and delivering personalized customer service.

How the Company Makes MoneyIndependent Bank Corporation makes money primarily through the spread between the interest it earns on loans and the interest it pays on deposits, known as the net interest margin. Key revenue streams include interest income from various loan products such as commercial loans, residential mortgages, and consumer loans. Additionally, the bank generates non-interest income from service charges on deposit accounts, transaction fees, and investment services. The bank also benefits from its strategic partnerships with financial service providers, enhancing its product offerings and customer reach. Factors such as local economic conditions, interest rate fluctuations, and regulatory changes can significantly impact the bank's earnings.

Independent Bank Financial Statement Overview

Summary

Independent Bank shows a stable financial position with consistent profitability and manageable leverage. The negative EBIT indicates some operational challenges; however, positive net income and cash flow metrics are reassuring. The balance sheet is robust, but there is a concerning decline in cash reserves.

Income Statement

Positive

The income statement for Independent Bank shows a mixed performance. The gross profit margin is consistently strong as gross profit equals total revenue. However, the TTM (Trailing-Twelve-Months) EBIT margin is highly negative due to a significant negative EBIT, indicating operational challenges. The net profit margin has remained positive, which is a positive sign. Revenue growth was positive from 2023 to 2024, indicating some recovery in the business operations.

Balance Sheet

Positive

The balance sheet reflects a stable financial position with a moderate debt-to-equity ratio, suggesting manageable leverage. The equity ratio is healthy, showing that a good portion of assets are financed by equity. Return on equity has been positive, reflecting decent profitability relative to shareholder investment. However, there is a decline in cash and cash equivalents over the years, which could be a concern if this trend continues.

Cash Flow

Positive

Cash flow analysis indicates a stable free cash flow, but a declining trend in operating cash flow which may affect future liquidity. The free cash flow to net income ratio is positive, suggesting effective cash generation relative to net income. The operating cash flow to net income ratio also remains positive, supporting operational efficiency.

Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Breakdown
Income Statement		Total Revenue
215.80M	200.50M	204.57M	199.03M	197.52M
	Gross Profit
215.80M	294.56M	204.57M	199.03M	197.52M
	EBIT
-193.58M	91.53M	97.23M	77.31M	69.48M
	EBITDA
0.00	79.42M	83.87M	83.68M	78.64M
	Net Income Common Stockholders
66.79M	59.07M	63.35M	62.90M	56.15M
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
145.27M	169.48M	853.72M	1.52B	1.19B
	Total Assets
5.34B	5.26B	5.00B	4.70B	4.20B
	Total Debt
124.39M	129.26M	226.10M	108.96M	108.82M
	Net Debt
4.51M	-40.52M	151.73M	-515.00K	-9.89M
	Total Liabilities
4.88B	4.86B	4.65B	108.96M	108.82M
	Stockholders Equity
454.69M	404.45M	347.60M	398.48M	389.52M
Cash Flow		Free Cash Flow
55.20M	69.56M	88.95M	104.32M	53.79M
	Operating Cash Flow
63.15M	75.59M	94.63M	110.15M	58.17M
	Investing Cash Flow
-118.16M	-162.94M	-424.59M	-563.06M	-553.40M
	Financing Cash Flow
5.11M	182.77M	294.86M	443.68M	548.63M

Independent Bank Technical Analysis

Technical Analysis Sentiment

Negative

Last Price28.52

Price Trends

50DMA

32.43

Negative

100DMA

34.15

Negative

200DMA

33.07

Negative

Market Momentum

MACD

-0.64

Negative

RSI

36.61

Neutral

STOCH

37.77

Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For IBCP, the sentiment is Negative. The current price of 28.52 is below the 20-day moving average (MA) of 30.30, below the 50-day MA of 32.43, and below the 200-day MA of 33.07, indicating a bearish trend. The MACD of -0.64 indicates Negative momentum. The RSI at 36.61 is Neutral, neither overbought nor oversold. The STOCH value of 37.77 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative 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 (64)

Financial Indicators

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
CAC	70 Neutral	$648.24M	10.60	10.33%	4.38%	14.18%	22.19%
IBCP	66 Neutral	$604.44M	9.11	15.55%	3.40%	10.58%	13.51%
HBNC	66 Neutral	$610.04M	17.24	4.78%	4.92%	10.94%	26.35%
GSBC	65 Neutral	$619.45M	10.16	10.55%	3.16%	8.68%	-6.27%
NBBK	64 Neutral	$614.08M	14.95	5.53%	―	28.78%	208.59%
Sector *	64 Neutral	$13.21B	9.26	9.39%	4.87%	16.14%	-8.87%
EGBN	59 Neutral	$618.02M	―	-3.76%	4.04%	9.77%	-147.04%

* Financial Sector Average

Performance Comparison

IBCP

Independent Bank

28.52

5.97

26.47%

CAC

Camden National

36.44

8.05

28.36%

EGBN

Eagle Bancorp

18.97

-1.23

-6.09%

GSBC

Great Southern Bancorp

50.56

1.06

2.14%

HBNC

Horizon Bancorp

12.92

1.89

17.14%

NBBK

NB Bancorp, Inc.

16.00

2.68

20.12%

Independent Bank Earnings Call Summary

Earnings Call Date: Jan 23, 2025 | % Change Since: -17.45% | Next Earnings Date: Apr 24, 2025

Earnings Call Sentiment Positive

The earnings call highlighted strong growth in net income, loans, and a healthy net interest margin, alongside an increase in dividends. However, it noted challenges with declining core deposits and rising noninterest expenses.

Highlights

Strong Net Income Growth

Reported Q4 2024 net income of $18.5 million, up from $13.7 million in the previous year, marking a 35% increase. Full-year net income of $66.8 million, a 13% increase from 2023.

Robust Loan Portfolio Growth

Achieved a 10% annualized growth rate in the loan portfolio for Q4 2024, with commercial loans growing at a 24% annualized rate.

Healthy Credit Metrics

Nonperforming assets remained near historic lows, with nonperforming loans at $6 million, which is approximately 15 basis points of total loans.

Increased Dividend

The Board approved an 8% increase in the quarterly dividend, marking the 12th consecutive annual increase.

Improved Net Interest Margin

Net interest margin increased to 3.45% in Q4 2024, up from 3.26% in the prior year.

Lowlights

Decline in Core Deposits

Core deposits decreased by $43 million during Q4 2024, with business deposits declining by $67 million and municipal deposits by $24 million.

Increased Noninterest Expense

Noninterest expense totaled $37 million in Q4 2024, higher than both the year-ago quarter and the previous quarter, driven by increased compensation and data processing costs.

Company Guidance

During the Independent Bank Corporation's Q4 2024 earnings call, significant financial metrics were highlighted, underscoring a robust performance for the year. The company reported a fourth-quarter net income of $18.5 million, or $0.87 per diluted share, an increase from the previous year's $13.7 million, or $0.65 per diluted share. For the entire year, net income rose to $66.8 million, or $3.16 per diluted share, compared to $59.1 million, or $2.79 per diluted share in 2023. The bank achieved a 10% annualized growth rate in its loan portfolio, with commercial loans seeing a 24% annualized growth, contributing to a $1 million increase in net interest income and a net interest margin of 3.45%. Total loans grew by 7% and core deposits by 5%, with a return on average assets of 1.27% and a return on average equity of 15.66%. Looking ahead to 2025, the bank anticipates mid-single-digit loan growth and a net interest margin increase of 20 to 25 basis points, supported by strategic investments in talent and technology, and an 8% increase in the quarterly dividend.

Independent Bank Corporate Events

Executive/Board Changes

Independent Bank Appoints New Chief Operating Officer

Positive

Jan 2, 2025

Independent Bank Corporation announced the appointment of Christopher Michaels as Chief Operating Officer, effective January 2, 2025. Michaels, a twelve-year veteran of the company who previously served as Chief Information Officer and Senior Vice President, is expected to drive transformation and contribute to achieving long-term growth goals.

Glossary

OutperformA stock rated as "Outperform" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock is likely to deliver higher returns compared to the average returns of other stocks in the same sector or market index. Investors might consider this stock a good buying opportunity.

NeutralA stock rated as "Neutral" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly attractive nor unattractive for investment. Investors may consider holding onto the stock, as it is not expected to either significantly outperform or underperform the market.

UnderperformA stock rated as "Underperform" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock may deliver lower returns compared to the average returns of other stocks in the same sector or market index. Investors might consider selling the stock or avoiding it as an investment.

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.