Overview
DA Davidson has confirmed its Neutral rating and $36.00 price target on Independent Bank Corporation, which is listed under the ticker IBCP. At the time of the note, the shares were trading at $34.93, a level InvestingPro flags as overvalued relative to its assessment despite being below the analyst price target. The bank posts a price-to-earnings ratio of 10.6 and offers a 3.21% dividend yield.
Quarterly results in detail
Independent Bank reported fourth-quarter 2025 earnings per share of $0.89, up from a core EPS of $0.86 in the third quarter. The reported result beat DA Davidson's internal forecast of $0.87 and the consensus estimate of $0.84. Over the last twelve months the company has delivered a return on equity of 14%, and InvestingPro classifies the bank's overall financial health as "GOOD."
The company attributed a material portion of the quarterly outperformance to execution of a tax credit transfer agreement completed during the quarter, which added roughly $0.10 to EPS. That boost was largely offset by cost pressures: total expenses for the period were $36.1 million, above the $34.2 million that had been forecast. DA Davidson's analysis translates the excess expense into an $0.08 per share shortfall, the bank said, and identified higher compensation expense as the primary driver.
Revenue and provisions
Total revenues rose modestly, increasing by $1.0 million quarter-over-quarter to $58.31 million, which aligned with DA Davidson's outlook. The revenue mix showed growth in net interest income that was counterbalanced by a slight decline in core fee income. Provision expense for credit loss was modestly lower, declining by $0.1 million to $1.92 million versus the forecasted $1.73 million; the variance on the provision produced an approximately $0.01 per share miss relative to the forecast.
InvestingPro's company profile notes that Independent Bank has increased its dividend for 12 consecutive years. The same data set shows analysts are modeling a 17% decline in sales for the current year.
Other analyst activity and outlook
In separate analyst action, Piper Sandler raised its price target on Independent Bank to $39.00 from $36.00 while maintaining a Neutral rating. Piper Sandler's revision reflects an improved outlook for 2026, including guidance that net interest margin should expand by 18 to 23 basis points year-over-year. The firm also anticipates mid-single-digit, commercially-driven loan growth and low credit costs, which it expects will help sustain profitability. Piper Sandler characterized these elements as supportive of the bank's forward prospects.
Takeaway
The fourth-quarter beat on EPS was a mix of a one-time, tax-credit-related benefit and underlying operating trends that include higher compensation and a small revenue miss relative to broader expectations. Returns on equity remain solid at 14% on a trailing-twelve-month basis, and the bank's multi-year dividend track record is unchanged. Analyst views are balanced: DA Davidson holds its Neutral rating and $36.00 target after the report, while Piper Sandler sees room to lift its target to $39.00 but also retains a Neutral stance.
Disclosure