Customers Bancorp (NYSE:CUBI) & Independent Bank (NASDAQ:IBCP) Financial Contrast

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

Institutional & Insider Ownership

79.4% of Independent Bank shares are held by institutional investors. Comparatively, 89.3% of Customers Bancorp shares are held by institutional investors. 5.5% of Independent Bank shares are held by company insiders. Comparatively, 6.9% of Customers Bancorp shares are held by company insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company is poised for long-term growth.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
Independent Bank	19.93%	15.26%	1.24%
Customers Bancorp	15.22%	13.55%	1.01%

Valuation & Earnings

This table compares Independent Bank and Customers Bancorp”s revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Independent Bank	$290.35 million	2.73	$59.07 million	$2.94	12.91
Customers Bancorp	$723.48 million	2.32	$250.14 million	$6.16	8.69

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

Analyst Recommendations

This is a summary of recent ratings and target prices for Independent Bank and Customers Bancorp, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Independent Bank	0	4	0	0	2.00
Customers Bancorp	0	5	3	1	2.56

Independent Bank presently has a consensus target price of $34.83, suggesting a potential downside of 8.26%. Customers Bancorp has a consensus target price of $62.22, suggesting a potential upside of 16.28%. Given Customers Bancorp’s stronger consensus rating and higher probable upside, analysts plainly believe Customers Bancorp is more favorable than Independent Bank.

Volatility & Risk

Independent Bank has a beta of 1.02, meaning that its share price is 2% more volatile than the S&P 500. Comparatively, Customers Bancorp has a beta of 1.65, meaning that its share price is 65% more volatile than the S&P 500.

Summary

Customers Bancorp beats Independent Bank on 10 of the 15 factors compared between the two stocks.

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.

About Customers Bancorp

Customers Bancorp, Inc. operates as the bank holding company for Customers Bank that provides financial products and services to individual consumers, and small and middle market businesses. The company provides deposit banking products, which includes commercial and consumer checking, non-interest-bearing and interest-bearing demand, MMDA, savings, and time deposit accounts. Its lending business offers commercial and industrial, commercial real estate, and multifamily and residential mortgage loans; SBA lending and financing; specialty lending includes fund finance, real estate specialty finance, technology and venture, and healthcare and financial institutions group; commercial loans to mortgage companies, and commercial equipment financing; and fund finance, such as variable rate loans secured by collateral pools to private debt funds; and cash management services. In addition, the company provides digital banking including Banking-as-a-Service to fintech companies, payments and treasury services to businesses, and consumer loans through fintech companies and the TassatPay, a blockchain-based instant B2B payments platform which offers instant payments including over-the-counter desks, exchanges, liquidity providers, market makers, funds, and other B2B verticals. Further, it offers mobile phone and internet banking, wire transfers, electronic bill payment, lock box, remote deposit capture, courier, merchant processing, cash vault, controlled disbursements, positive pay, and cash management services, such as account reconciliation, collections, and sweep accounts. The company was incorporated in 2010 and is headquartered in West Reading, Pennsylvania.