INBK
I think INBK is worth a shot, and could be a multibagger in the next 12-18 months, from my purchase price of $12.85
Book Value- This bank trade at a steep discount to TBV ($39.43). In fact it is trading at 0.3 time tangible book. That is outright absurd.The question is what is wrong?
Deposits- Have they fleed, all we hear about is how deposits are leaving in droves in these small banks. But is it actually true here, the answer is no. Deposits were actually up 5%+ from q4. And uninsured deposits make up just 26% of the deposits. and only 19% from a collateralized standpoint. So very little uninsured deposits here as well.
Loans- Loan grew about 3% sequentially, so solid loan growth as well. And what I love here is less than 1% of those loans are office, and most of that is medical and suburban which are far less problematic.
Asset Quality- Asset quality is very fantastic with NPA being just 0.24%, and the Allowance is more than 3 times the NPA's, which means they are well reserved.
Stock Buyback- They brought back 162k or so shares last quarter and on the CC sounds like they are willing to buy more. And at these price, buying shares is very helpfu to both TBV and accretive to earnings. I could see a scenario at these price where they could take 10-15% of the share count out in a year with keeping the buyback on a $ level at a similar level of q1.
They earned .53 adjusted last quarter. I do believe q2 will probably be the trough with NIMS hence .45-.50, having said that when rates start coming down whether it is late 2023 by the fed or early 2024, Nims is gonna go back up I could easily see a scenario where they earn $4.00-5.00 rather easily with not much rate cutting in 2024. I think the stock is absurdly undervalued at current prices. Time will tell. I will continue to buy on weakness. All is just my opinion, and I could always be wrong though.
