Earnings of Independent Bank Corporation (NASDAQ: IBCP) surged in the third quarter on the back of a drop in provision expense and a rise in mortgage banking revenue. Earnings will likely trend downwards next year mainly because mortgage banking revenue will move towards normalization. On the other hand, lower provision expense and low loan growth will offer some support to the bottom line. Overall, I’m expecting IBCP to report earnings of around $2.27 per share in 2021, down from the estimated earnings of $2.48 per share in 2020. IBCP’s current market price is quite close to next year’s target price; hence, I’m adopting a neutral rating on the stock.
Mortgage Banking Revenue Likely to Decline Next Year as Rates Stabilize
IBCP’s mortgage banking revenue surged
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