Independent Bank Posts $17.9 Million Profit as Net Interest Margin Widens to 3.79%
Key Facts
Independent Bank Corporation reported net income of $17.9 million, or $0.80 per diluted share, in the third quarter of 2026, compared with net income of $17.5 million and earnings of $0.84 per share in the same period a year earlier. Net income rose year over year, while reported earnings per share declined. Adjusted net income was $20.6 million, or $0.92 per diluted share, excluding $2.8 million in after-tax merger expenses. The company completed its acquisition of HCB Financial on July 1, making Highpoint Community Bank a subsidiary. The quarter’s results reflect a full period of contribution from the acquired bank, alongside changes in the performance of the core business.
Net interest income improved to $55.3 million, up 21.8% from the same period last year and 15.4% from the second quarter of 2026. Net interest margin widened to 3.79%, an increase of 12 basis points from the previous quarter and 28 basis points year over year. The margin was 3.82% on a fully tax-equivalent basis. The expansion puts the quarter’s performance in the context of quarterly growth in interest income, while the margin figure reflects returns on interest-earning assets and liabilities. Meanwhile, pretax income was $21.5 million, compared with $22.7 million in the second quarter and $21.2 million in the third quarter of 2025.
Total loan growth was $483.3 million during the quarter, including $366.7 million in Highpoint loans added to the company’s books when the deal closed on July 1. Excluding acquired loans, net loans increased $116.6 million from the end of June, an annualized growth rate of 10.5%. This figure separates the balance-sheet expansion from the acquisition from loan growth outside the deal during the quarter. Deposits increased by a total of $659.3 million, including $543.5 million in acquired Highpoint deposits. Excluding those deposits, net growth was $115.8 million, or an annualized 9.4%, from the end of June.
Credit-loss provision expense rose to $4.8 million in the third quarter, compared with $2.0 million in the same period a year earlier. The CEO said the higher provision was tied to new loans added to the portfolio, including Highpoint loans, unfunded lending commitments, and an increase in the specific reserve for one commercial relationship. Net loan charge-offs remained low at $0.2 million during the quarter. Nonperforming loans totaled $39.2 million, or 0.80% of portfolio loans, on September 30, 2026. A year earlier, these loans totaled $20.4 million and represented 0.48% of portfolio loans, highlighting increases in both the balance and the ratio.
The deal dates to Independent Bank’s acquisition of HCB Financial, the parent company of Highpoint Community Bank, which was completed on July 1, 2026. The company said in an earlier announcement that its total assets were about $6.3 billion. Third-quarter results show a mix of contributions from acquired assets, deposits and loans, as well as new growth outside those balances, alongside higher interest income and a wider margin. Adjusted earnings and adjusted earnings per share were also above reported figures after merger expenses were excluded. Zacks estimated earnings per share at $0.86, while the reported adjusted figure was $0.92 per share.
The company’s shares, which trade under the ticker IBCP, closed at $37.01 on October 26, 2026. The company is scheduled to hold an earnings review call on October 27 at 11:00 a.m. Eastern time. Attention then turns to completing the integration of Highpoint’s operations, with the company expecting to complete the full systems conversion on November 9, 2026. The conversion date follows the acquisition’s completion in July and the acquired bank’s first full-quarter contribution to results. The earnings announcement noted that systems integration still had this specific operational deadline ahead.