Independent Bank (NASDAQ:IBCP) & First Western Financial (NASDAQ:MYFW) Critical Analysis

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

Institutional and Insider Ownership

79.4% of Independent Bank shares are owned by institutional investors. Comparatively, 60.3% of First Western Financial shares are owned by institutional investors. 5.5% of Independent Bank shares are owned by insiders. Comparatively, 17.9% of First Western Financial shares are owned by insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a company will outperform the market over the long term.

Profitability

This table compares Independent Bank and First Western Financial’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%
First Western Financial	3.33%	2.44%	0.20%

Volatility and Risk

Independent Bank has a beta of 1.02, suggesting that its share price is 2% more volatile than the S&P 500. Comparatively, First Western Financial has a beta of 0.65, suggesting that its share price is 35% less volatile than the S&P 500.

Analyst Recommendations

This is a breakdown of recent ratings and price targets for Independent Bank and First Western Financial, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Independent Bank	0	4	0	0	2.00
First Western Financial	0	1	2	0	2.67

Independent Bank presently has a consensus price target of $34.83, suggesting a potential downside of 0.87%. First Western Financial has a consensus price target of $23.83, suggesting a potential upside of 20.98%. Given First Western Financial’s stronger consensus rating and higher probable upside, analysts plainly believe First Western Financial is more favorable than Independent Bank.

Earnings and Valuation

This table compares Independent Bank and First Western Financial”s top-line revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Independent Bank	$203.04 million	3.62	$59.07 million	$2.94	11.95
First Western Financial	$88.93 million	2.14	$5.22 million	$0.62	31.77

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

Summary

Independent Bank beats First Western Financial on 9 of the 14 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 First Western Financial

First Western Financial, Inc., a financial holding company, provides wealth advisory, private baking, personal trust, investment management, mortgage lending, and institutional asset management services. The company operates through two segments: Wealth Management and Mortgage. The Wealth Management segment provides deposit, loan, life insurance, and trust and investment management advisory products and services. The Mortgage segment engages in soliciting, originating, and selling mortgage loans into the secondary market. It serves entrepreneurs, professionals, high net worth individuals or families, and business and philanthropic organizations. First Western Financial, Inc. was incorporated in 2002 and is headquartered in Denver, Colorado.