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5 Expensive Bank Stocks Still Worth Buying (Update 3)

Stocks in this article: BAC C JPM WFC USB CYN TCBI OZRK INDB

5. Independent Bank Corp.

Shares of Independent Bank Corp. (INDB) of Rockland, Mass., closed at $28.97 Monday, rising 6% year-to-date. Based on a 19-cent quarterly payout, the shares have a dividend yield of 2.62%.

Independent Bank Corp. had $5.0 billion in total assets as of Dec. 30, operating 67 Rockland Trust Co. offices in Eastern Massachusetts, as well as a network of loan production offices and investment management offices in Massachusetts and Rhode Island.

The company reported fourth-quarter earnings of $11.2 million, or 52 cents a share, declining from $12.0 million, or 56 cents, the previous quarter, and $11.8 million, or $56 cents a share, a year earlier.

The fourth-quarter results included a $757,000 prepayment penalty "that resulted in a $0.02 per share charge arising from the Company's use of excess cash to pay down borrowings."

Independent Bank Corp.'s net revenue -- tax-adjusted net interest income, plus noninterest income, less noninterest expense, excluding provisions for loan losses -- totaled $19.6 million, increasing 3% from the third quarter, but just 1% from a year earlier.

The company's return on average assets (ROA) has ranged from 0.92% to 1.3% over the past five quarters.

Guggenheim Securities analyst David Darst has a neutral rating on Independent Bank Corp., and while he lowered his 2012 earnings estimate for the company by four cents to $2.13 and his 2013 estimate by a dime to $2.25 on Jan. 23, the analyst raised his price target for the shares to $28, "which represents 13x 2012E EPS and approximates INDB's 5-year median P/E."

The shares trade for 1.9 times tangible book value, according to HighlineFI, and for 14 times the consensus 2012 earnings estimate of $2.12 a share, among analysts polled by Thomson Reuters.

The shares rose 1% on Wednesday, to close at $29.27.

Interested in more on Independent Bank Corp.? See TheStreet Ratings' report card for this stock.

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