NEW YORK (TheStreet) -- Investors looking for a solid bank-stock growth play, with relatively downside risk, should consider Independent Bank (INDB) of Hanover, Mass., according to KBW analyst Collyn Gilbert.
The analyst on Thursday upgraded Independent Bank to "outperform," from "market perform," while raising her price target for the shares to $44 from $40.00. The new price target implies upside of 15% over the next 12 months from the stock's closing price of $38.11 on Thursday.
Independent Bank's stock trades for 14.3 times the consensus 2015 earnings estimate of $2.67, among analysts polled by Thomson Reuters. The consensus 2014 EPS estimate is $2.46. Based on a quarterly dividend of 22 cents, the shares have a dividend yield of 2.31%.
Independent Bank is the holding company for Rockland Trust Company. The holding company had $6.099 billion in total assets Dec. 31. Earnings totaled $50.2 million, or $2.18 a share, during 2013, increasing from $42.6 million, or $1.95 a share, in 2012.
Net interest income grew 6% during 2013 to $182.6 million, while noninterest income grew 10% to $68.0 million. Noninterest expense grew 14% to 36.5 million during 2013; however, the company booked $8.7 million in merger and acquisition expenses during the year. The most recent acquisition was Mayflower Bancorp of Middleboro, Mass., in November, which included $126.6 million in loans and $218.9 million in loans.
Following a meeting with Independent Bank CEO Chris Oddleifson and CFO Rob Cozzone, Gilbert in a note to clients Thursday wrote, "We left our meetings with increased confidence in the strength of Independent's current market position, sustainability of growth (both organically and acquisitively), favorable interest rate risk position, and potential scalability of its wealth business."