Independent Bank Q3 Earnings: Can NasdaqGS:IBCP Hit Its $0.48 EPS Target?

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Independent Bank Corporation (NasdaqGS:IBCP) is scheduled to report Q3 earnings results on October 27, 2020.

The company is expected to report earnings of $0.48/share on revenue of $31.003 million. The consensus earnings per share (EPS) of $0.48/share is based on a poll of 5 analysts and represents a decline in eps of −13.1% over the same quarter last year, when the company reported earnings of $0.55/share.

The revenue forecast of $31.003 million based on a poll of 4 analysts implies a year-over-year (YoY) growth in revenue of 0.4%. Last year the company reported $30.872 million in revenue for the quarter.

Expected to report EPS contraction of −13.1% for Q3, 2020
Metric Expected Prior Year YoY Change
Revenue $31.00 $30.87 0.4%
EPS $0.48 $0.55 −13.1%

Earnings Call Trends

Historically, management has exceeded analyst expectations 7 out of the last 8 tracked quarters, and missed expectations 1 quarters.

What are your expectations from Independent Bank Corporation for earnings this quarter? Let us know in the comments!

Analyst Expected vs. Reported EPS
Quarter Expected Reported Surprise Result
Q2, 2020 $0.25 $0.77 203.1% Beat
Q1, 2020 $0.37 $0.42 12.5% Beat
Q4, 2019 $0.55 $0.62 12.7% Beat
Q3, 2019 $0.51 $0.55 8.6% Beat
Q2, 2019 $0.48 $0.55 15.1% Beat
Q1, 2019 $0.45 $0.46 1.8% Beat
Q4, 2018 $0.48 $0.41 −13.5% Missed
Q3, 2018 $0.46 $0.49 7.6% Beat

In the following table, we summarize the company’s stock price movements after earnings releases. The “Price Day Prior” column shows the closing stock price on the day before the earnings report, and the “Price Next Day” column shows the stock price at the end of the trading day after the earnings report. After the last earnings report for the period ending June 30, 2020, the stock price reacted by increasing 8.4%.

Stock Price Performance After Earnings
Report Date Price Day Prior Price Next Day Change % Result
July 28, 2020 $13.07 $14.17 8.4% Increase
April 30, 2020 $16.25 $14.98 −7.8% Decline
January 23, 2020 $22.25 $22.09 −0.7% Decline
October 24, 2019 $22.13 $22.76 2.8% Increase

Fundamentals And Technical Analysis

Independent Bank Corporation is currently trading at $14.16/share, up 1.1% for the day. The company is trading at approximately 59.2% of its 52-week high of $23.93/share. The company’s stock price is down −0.1% since the last earnings report and up 4.2% over the previous week.

The company’s 14 Day Relative Price Index (RSI) of 51.35 suggests the company is trading in technically neutral territory. The RSI is considered overbought when above 70 and oversold when below 30.


NasdaqGS:IBCP Stock Price Chart
Source: Finbox

The current share price implies a price-to-earnings (P/E) multiple of 6.75 and a forward P/E multiple of 6.58.

Independent Bank Corporation’s current share price also implies a price-to-book (P/B) multiple of 0.87. The following table summarizes some other key fundamental ratios:

Data as of October 21, 2020
Metric Value
Last Reported Fiscal Period Key FY2020.Q2
Period End Date June 30, 2020
Stock Price (Current) $14.16
P/E Ratio 6.7x
P/E Ratio (Fwd) 6.6x
PEG Ratio 0.4
Total Debt / Total Capital 32.9%
Levered Free Cash Flow $58.949 million
Price To Sales 1.8x

Finbox

Independent Bank Corporation is a small-cap stock with a market capitalization of $309.8 million. The company operates in the Financials sector and the Banks industry.

Independent Bank Corporation operates as the 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 machines, and Internet and mobile banking services. It also provides title insurance, insurance brokerage, and investment services. The company offers its services through approximately 66 branches, two drive-thru facility, and nine loan production offices in Michigan; and three loan production offices in Ohio. Independent Bank Corporation was founded in 1864 and is based in Grand Rapids, Michigan.

Expertise: financial modeling, mergers & acquisitions. Andy is also a founder at finbox.io, where he’s focused on building tools that make it faster and easier for investors to do investment research. Andy’s background is in investment banking where he led the analysis on over 50 board advisory engagements involving mergers and acquisitions, fairness opinions and solvency opinions. Some of his board advisory highlights: - Sears Holdings Corp.’s $620 mm spin-off via rights offering of Sears Outlet, Hometown Stores and Sears Hardware Stores. - Cerberus Capital Management’s $3.3 bn acquisition of SUPERVALU Inc.’s New Albertsons, Inc. assets. Andy can be reached at andy@finbox.io or at +1 (516) 778-6257.

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