Independent Bank (NASDAQ:IBCP) & Bank of Marin Bancorp (NASDAQ:BMRC) Financial Comparison

Bank of Marin Bancorp (NASDAQ:BMRC) and Independent Bank (NASDAQ:IBCP) are both small-cap finance companies, but which is the superior investment? We will compare the two businesses based on the strength of their profitability, risk, earnings, analyst recommendations, valuation, dividends and institutional ownership.

Dividends

Bank of Marin Bancorp pays an annual dividend of $1.00 per share and has a dividend yield of 5.0%. Independent Bank pays an annual dividend of $0.96 per share and has a dividend yield of 3.0%. Bank of Marin Bancorp pays out 120.5% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Independent Bank pays out 32.7% of its earnings in the form of a dividend. Bank of Marin Bancorp has raised its dividend for 18 consecutive years. Bank of Marin Bancorp is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Volatility and Risk

Bank of Marin Bancorp has a beta of 0.92, indicating that its share price is 8% less volatile than the S&P 500. Comparatively, Independent Bank has a beta of 0.99, indicating that its share price is 1% less volatile than the S&P 500.

Analyst Ratings

This is a summary of current recommendations and price targets for Bank of Marin Bancorp and Independent Bank, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Bank of Marin Bancorp	0	2	1	0	2.33
Independent Bank	0	4	0	0	2.00

Bank of Marin Bancorp currently has a consensus target price of $18.00, suggesting a potential downside of 10.00%. Independent Bank has a consensus target price of $32.17, suggesting a potential upside of 0.36%. Given Independent Bank’s higher possible upside, analysts clearly believe Independent Bank is more favorable than Bank of Marin Bancorp.

Profitability

This table compares Bank of Marin Bancorp and Independent Bank’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Bank of Marin Bancorp	-9.09%	3.25%	0.37%
Independent Bank	21.11%	16.90%	1.31%

Institutional & Insider Ownership

52.3% of Bank of Marin Bancorp shares are held by institutional investors. Comparatively, 79.4% of Independent Bank shares are held by institutional investors. 5.7% of Bank of Marin Bancorp shares are held by company insiders. Comparatively, 5.5% of Independent Bank shares are held by company insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a stock will outperform the market over the long term.

Earnings & Valuation

This table compares Bank of Marin Bancorp and Independent Bank”s revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Bank of Marin Bancorp	$62.28 million	5.23	$19.90 million	$0.83	24.10
Independent Bank	$207.12 million	3.23	$59.07 million	$2.94	10.90

Independent Bank has higher revenue and earnings than Bank of Marin Bancorp. Independent Bank is trading at a lower price-to-earnings ratio than Bank of Marin Bancorp, indicating that it is currently the more affordable of the two stocks.

Summary

Independent Bank beats Bank of Marin Bancorp on 10 of the 17 factors compared between the two stocks.

About Bank of Marin Bancorp

Bank of Marin Bancorp operates as the holding company for Bank of Marin that provides a range of financial services primarily to small to medium-sized businesses, not-for-profit organizations, and commercial real estate investors in the United States. The company offers personal and business checking and savings accounts; and individual retirement, health savings, and demand deposit marketplace accounts, as well as time certificates of deposit, certificate of deposit account registry, and insured cash sweep services. It also provides commercial real estate, commercial and industrial, and consumer loans, as well as construction financing and home equity lines of credit. In addition, the company offers merchant and payroll services; commercial equipment leasing program; payment solutions; treasury management services; credit cards; and mobile deposit, remote deposit capture, automated clearing house, wire transfer, and image lockbox services. Further, it provides wealth management and trust services comprising customized investment portfolio management, financial planning, trust administration, estate settlement, and custody services, as well as 401(k) plan services; and automated teller machines, and telephone and digital banking services. The company was incorporated in 1989 and is headquartered in Novato, California.

About Independent Bank

Independent Bank Corporation operates as the bank holding company for Independent Bank that provides commercial banking services to individuals and businesses in rural and suburban communities in Michigan. It offers checking and savings accounts, commercial lending, direct and indirect consumer financing, mortgage lending, and safe deposit box services. The company also provides title insurance services and investment services, as well as automatic teller machines, and internet and mobile banking services. In addition, it operates through branches, drive-thru facilities, and loan production offices. Independent Bank Corporation was founded in 1864 and is based in Grand Rapids, Michigan.