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1. Company Snapshot

1.a. Company Description

Independent 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.

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1.b. Last Insights on IBCP

Independent Bank Corporation's recent performance was negatively impacted by a decline in net interest income, driven by a decrease in average loans and leases held for investment. The company's net interest margin also contracted, resulting in a 4.5% decline in net interest income. Additionally, Independent Bank's provision for credit losses increased, reflecting a rise in non-performing assets. Furthermore, the company's efficiency ratio expanded, indicating a decrease in operating efficiency.

1.c. Company Highlights

2. Independent Bank Corporation's Q3 2025 Earnings: A Strong Performance

Independent Bank Corporation reported a net income of $17.5 million or $0.84 per diluted share for the third quarter of 2025, a 10.2% increase from the prior year period. The bank's earnings per share (EPS) came in slightly above estimates of $0.83. The net interest income increased by $3.5 million from the year ago period, with a tax-equivalent net interest margin of 3.54% in the third quarter of 2025, down 4 basis points from the second quarter of 2025. The decrease in net interest margin on a linked quarter basis is primarily due to the acceleration of unamortized issuance costs on the subordinated debt redeemed in the third quarter.

Publication Date: Nov -16

📋 Highlights
  • Net Income Growth:: Increased to $17.5M ($0.84/share), up 10.2% YoY.
  • Loan and Deposit Growth:: Loans rose 3.2% annualized; deposits (excluding brokered) grew 13% annualized.
  • Margin Pressure:: Net interest margin fell 4 bps QoQ to 3.54% due to subordinated debt redemption costs.
  • Expense Control:: Noninterest expenses of $34.1M undershot guidance ($34.5M–$35.5M range).
  • Future Margin Stability:: $438M in loans at 5.59% exit rate will reprice, offsetting $138M in 3% securities, boosting margin by 120 bps in 2026.

Loan Growth and Deposit Trends

Loan balances grew at an annualized rate of 3.2% and total deposits less brokered time deposits increased by 13% annualized. The bank's average interest-earning assets were $5.16 billion in the third quarter of 2025, compared to $4.99 billion in the year ago quarter and $5.04 billion in the second quarter of 2025. As Gavin Mohr, EVP and Chief Financial Officer, stated, "the bank's treasury management team continues to focus on comprehensive relationships to grow both sides of the balance sheet."

Noninterest Income and Expense

The bank's noninterest income totaled $11.9 million in the third quarter of 2025, as compared to $9.5 million in the year ago quarter and $11.3 million in the second quarter of 2025. Noninterest expense was $34.1 million in the third quarter, below the forecasted range of $34.5 million to $35.5 million.

Outlook and Valuation

Analysts estimate next year's revenue growth at 4.2%. With a current P/TBV ratio of 1.31 and a dividend yield of 3.35%, the stock appears reasonably valued. The net interest margin is expected to remain stable, and the bank's efforts to manage expenses and improve efficiency are expected to continue.

Credit Quality and Future Prospects

The bank is not seeing systemic credit weakness, with solid performance from the majority of their customer base. As William Kessel added, "50% of the company's loan book is commercial, and the rescored credit scores show no significant decline in borrowers' payment performance." The company is bullish about Michigan's economy and is diversified across industries, which should support future growth.

3. NewsRoom

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American Century Companies Inc. Raises Stake in Independent Bank Corporation $IBCP

Dec -03

Source: defenseworld.net

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Intech Investment Management LLC Sells 8,848 Shares of Independent Bank Corporation $IBCP

Dec -01

Source: defenseworld.net

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Reviewing Independent Bank (NASDAQ:IBCP) and Farmers National Banc (NASDAQ:FMNB)

Nov -25

Source: defenseworld.net

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Head-To-Head Analysis: Independent Bank (NASDAQ:IBCP) vs. Peoples Bancorp (NASDAQ:PEBO)

Nov -23

Source: defenseworld.net

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Independent Bank Corporation (IBCP) Q3 2025 Earnings Call Transcript

Oct -28

Source: seekingalpha.com

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Independent Bank (IBCP) Q3 Earnings: Taking a Look at Key Metrics Versus Estimates

Oct -28

Source: zacks.com

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Independent Bank (IBCP) Beats Q3 Earnings Estimates

Oct -28

Source: zacks.com

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Independent Bank Corporation Reports 2025 Third Quarter Results

Oct -28

Source: globenewswire.com

4. Business Breakdown

4.a. Revenues by Country

4.b. Revenues by Segment

5. Expected revenues mid-term growth (4.77%)

6. Segments

Commercial Banking

Expected Growth: 4.77%

Independent Bank Corporation's 4.77% growth in Commercial Banking is driven by a strong loan portfolio expansion, fueled by a robust economy and increased demand for commercial real estate loans. Additionally, strategic investments in digital banking platforms and a focus on customer relationships have contributed to deposit growth and improved operating efficiency.

7. Detailed Products

Personal Banking

Independent Bank Corporation offers a range of personal banking services, including checking and savings accounts, credit cards, loans, and investment services.

Business Banking

The company provides business banking services, including commercial loans, cash management, and treasury management solutions, to help businesses grow and succeed.

Mortgage Lending

Independent Bank Corporation offers a range of mortgage lending products, including fixed-rate and adjustable-rate mortgages, to help individuals and families achieve homeownership.

Wealth Management

The company provides wealth management services, including investment management, trust services, and financial planning, to help individuals and families achieve their long-term financial goals.

Insurance Services

Independent Bank Corporation offers insurance services, including life insurance, disability insurance, and long-term care insurance, to help individuals and families protect their financial well-being.

8. Independent Bank Corporation's Porter Forces

Forces Ranking

Threat Of Substitutes

Independent Bank Corporation operates in a highly competitive market with many substitutes, but its strong brand and customer loyalty mitigate the threat.

Bargaining Power Of Customers

Independent Bank Corporation's customers have significant bargaining power due to the availability of alternative banking services and the ease of switching banks.

Bargaining Power Of Suppliers

Independent Bank Corporation has a diverse supplier base, and its suppliers have limited bargaining power due to the availability of alternative suppliers.

Threat Of New Entrants

While there are barriers to entry in the banking industry, new entrants can still pose a threat to Independent Bank Corporation, particularly from fintech companies and digital banks.

Intensity Of Rivalry

Independent Bank Corporation operates in a highly competitive market with many established players, leading to intense rivalry and competition for market share.

9. SWOT Analysis

Strength

Weaknesses

Opportunities

Threats

10. Capital Structure

10.a. Balance Sheet

10.b. Weighted Average Cost of capital

Value
Debt Weight 24.38%
Debt Cost 7.68%
Equity Weight 75.62%
Equity Cost 8.79%
WACC 8.52%
Leverage 32.24%

11. Quality Control: Independent Bank Corporation passed 4 out of 9 key points

12.a Historical Valuation

12.b Price/Earnings Ratio

12.c Margin Valuation

12.d Peers Valuation

Peers Group Analysis

Stock-Card
First Financial

A-Score: 7.0/10

Value: 7.3

Growth: 5.4

Quality: 6.0

Yield: 7.0

Momentum: 8.5

Volatility: 8.0

1-Year Total Return ->

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Stock-Card
Peoples Bancorp of North Carolina

A-Score: 7.0/10

Value: 8.0

Growth: 6.6

Quality: 7.2

Yield: 6.0

Momentum: 8.0

Volatility: 6.3

1-Year Total Return ->

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Stock-Card
Independent Bank

A-Score: 6.6/10

Value: 6.9

Growth: 6.9

Quality: 7.5

Yield: 7.0

Momentum: 3.5

Volatility: 8.0

1-Year Total Return ->

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Stock-Card
Oriental

A-Score: 6.4/10

Value: 7.1

Growth: 7.2

Quality: 7.2

Yield: 5.0

Momentum: 4.0

Volatility: 8.0

1-Year Total Return ->

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Stock-Card
Chemung Financial

A-Score: 6.4/10

Value: 5.8

Growth: 5.6

Quality: 5.5

Yield: 6.0

Momentum: 7.5

Volatility: 8.0

1-Year Total Return ->

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Stock-Card
Orrstown Financial Services

A-Score: 6.1/10

Value: 6.8

Growth: 5.0

Quality: 6.7

Yield: 6.0

Momentum: 4.0

Volatility: 8.0

1-Year Total Return ->

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Peers Metrics

12.e Scoring Insights

12.f DCF BETA

Parameters

Short Term Growth

Short term Time

Long-Term Growth

WACC

Target Price

33.54$

Current Price

33.54$

Potential

-0.00%

Expected Cash-Flows