Independent Bank Corp. (NASDAQ:IBCP) reported fourth-quarter results that surpassed Wall Street projections, driven by a resilient net interest margin and a robust commercial loan pipeline.
The Grand Rapids-based bank capped off what leadership described as a "remarkable year" by authorizing a significant new capital return program for 2026.
For the quarter ended Dec. 31, 2025, the holding company for Independent Bank posted net income of $18.6 million, or $0.89 per diluted share.
This narrowly beat the $0.83 consensus estimate from analysts surveyed by Zacks Investment Research and marked a slight increase from the $0.87 per share earned in the same period a year ago.
Revenue net of interest expense reached $58.3 million, also exceeding Street forecasts.
A key highlight was the expansion of the net interest margin (NIM), which climbed 8 basis points sequentially to 3.62%.
This improvement was supported by $78 million in net loan growth during the quarter—a 7.4% annualized rate—primarily led by the bank's commercial lending division.
Total deposits (excluding brokered deposits) also grew at a 4.8% annualized pace.
"Our fourth-quarter performance marked the culmination of another remarkable year, with our organization excelling on all fundamentals," said William B. ("Brad") Kessel, President and CEO.
Kessel noted that the bank increased tangible book value by 13.3% over the course of 2025 while maintaining a 32% dividend payout ratio.
Despite the positive momentum, the bank noted a shift in credit quality.
Non-performing loans rose to $33.1 million, up from $7.8 million a year earlier.
Management attributed the bulk of this increase to a single commercial relationship experiencing financial difficulties, rather than a broad systemic weakness in the portfolio.
Looking ahead, the Board of Directors authorized a 2026 share repurchase plan for up to 1.1 million shares, representing approximately 5% of its common stock.
This follows the repurchase of over 400,000 shares in 2025.
The bank also recently announced a 7.7% increase in its quarterly cash dividend, marking its 13th consecutive annual hike.