ROCKLAND, Mass., July 17, 2008 (PRIME NEWSWIRE) -- Independent Bank Corp. (Nasdaq:INDB), parent of Rockland Trust Company, today announced net income of $8.1 million and diluted earnings per share of $0.50 for the quarter ending June 30, 2008. This represents an increase of $0.10, or 25.0%, on a per share basis, from the $0.40 diluted earnings per share recorded in the same quarter a year ago. Net income for the quarter increased $2.4 million as compared to the same period last year. For the six months ended June 30, 2008, net income was $14.4 million and diluted earnings per share were $0.94, an increase of $2.1 million, or $0.08 per diluted share, as compared to net income of $12.3 million and diluted earnings per share of $0.86 for the six months ended June 30, 2007.
Certain non-core items are included in the computation of earnings in accordance with United States of America generally accepted accounting principles ("GAAP") in both 2008 and 2007 as indicated by the table below. In an effort to provide investors with information regarding the Company's results, the Company has disclosed the following non-GAAP information, which management believes provides useful information to the investor. This information should not be viewed as a substitute for operating results determined in accordance with GAAP, nor is it necessarily comparable to non-GAAP information which may be presented by other companies.
Dollars in Thousands, Except Per Share Data
Three Months Ending June 30,
----------------------------------------
$ %
2008 2007 Variance Variance
-------- -------- -------- --------
RECONCILIATION TABLE - NON-GAAP
FINANCIAL INFORMATION
NET INCOME (GAAP) $ 8,120 $ 5,714 $ 2,406 42.1%
Net Interest Income Components
Add - Write-Off of Debt
Issuance Cost,
net of tax -- 590 (590) n/a
Non-Interest Expense Components
Add - Merger & Acquisition
Expenses, net of tax 244 -- 244 n/a
Add - Litigation Reserve,
net of tax -- 885 (885) n/a
------------------------------- -----
NET OPERATING EARNINGS
(NON-GAAP) $ 8,364 $ 7,189 $ 1,175 16.3%
=============================== =====
Diluted Operating Earnings
Per Share $ 0.51 $ 0.51 $ 0.00 0.0%
=============================== =====
Six Months Ending June 30,
----------------------------------------
$ %
2008 2007 Variance Variance
-------- -------- -------- --------
RECONCILIATION TABLE - NON-GAAP
FINANCIAL INFORMATION
NET INCOME (GAAP) $ 14,428 $ 12,339 $ 2,089 16.9%
Net Interest Income Components
Add - Write-Off of Debt
Issuance Cost,
net of tax -- 590 (590) n/a
Non-Interest Income Components
Add - Net Loss on Sale of
Securities, net of
tax 396 -- 396 n/a
Non-Interest Expense Components
Add - Executive Early
Retirement Costs,
net of tax -- 264 (264) n/a
Add - Merger & Acquisition
Expenses, net of tax 728 -- 728 n/a
Add - Litigation Reserve,
net of tax -- 885 (885) n/a
Less - WorldCom Bond Loss
Recovery, net of tax (272) -- (272) n/a
------------------------------- -----
NET OPERATING EARNINGS
(NON-GAAP) $ 15,280 $ 14,078 $ 1,202 8.5%
=============================== =====
Diluted Operating Earnings
Per Share $ 1.00 $ 0.98 $ 0.02 2.0%
=============================== =====
Net operating earnings were $8.4 million, or $0.51 on a per diluted share basis, for the three months ending June 30, 2008 compared to net operating earnings and diluted earnings per share for the three months ended June 30, 2007 of $7.2 million and $0.51, respectively, which represents an increase of $1.2 million, or 16.3%. Net operating earnings were $15.3 million, or $1.00 on a per diluted share basis, for the six months ending June 30, 2008 compared to net operating earnings and diluted earnings per share for the six months ended June 30, 2007 of $14.1 million and $0.98, respectively, which represents an increase of $1.2 million, or $0.02 per diluted share.
Comparing the three months ending June 30, 2008 to the same period last year, net interest income increased $6.7 million, or 28.4%. For the six months ended June 30, 2008, net interest income increased $8.4 million, or 17.8%, from the year ago period, due to the acquisition of Slade's Ferry Bancorp. ("Slades") in the first quarter of this year and organic growth. In April 2007, the Company wrote-off approximately $907,000 of unamortized issuance costs related to the refinancing of $25.0 million of Trust Preferred securities. Excluding the write-off of the debt issuance costs, net interest income increased $5.7 million and $7.5 million from the comparative three and six month periods in 2007, respectively. The net interest margin for the three and six month periods ended June 30, 2008 was 4.01% and 3.96%, respectively. The net interest margin was 4.00% and 3.91% for the three and six months ended June 30, 2007, which excludes the write-off of the aforementioned debt issuance costs. See the tables below for reconciliations of net interest income and the net interest margin as adjusted:
Dollars in Thousands
Three Months Ended Six Months Ended
June 30, June 30,
----------------- -----------------
2008 2007 2008 2007
------- ------- ------- -------
Net Interest Income GAAP $30,087 $23,433 $55,853 $47,421
Add - Write-Off of Debt
Issuance Cost -- 907 -- 907
----------------- -----------------
Net Interest Income
as Adjusted $30,087 $24,340 $55,853 $48,328
================= =================
Net Interest Margin GAAP 4.01% 3.85% 3.96% 3.84%
Add - Write-Off of Debt
Issuance Cost -- 0.15% -- 0.07%
------- ------- ------- -------
Net Interest Margin
as Adjusted 4.01% 4.00% 3.96% 3.91%
================= =================
The Company's allowance for loan losses as a percentage of loans was 1.29% at June 30, 2008, 1.29% at March 31, 2008 and 1.35% at June 30, 2007. The provision for loan losses was $1.9 million and $3.2 million for the quarter and six months ended June 30, 2008 compared to $584,000 and $1.5 million for the year ago comparative periods. Net charge-offs were $1.3 million and $2.4 million for the three and six month periods of 2008 as compared to $748,000 and $1.6 million for the three and six month periods of 2007.
Non-interest income increased by $1.5 million, or 18.3%, and by $1.9 million, or 12.1%, during the three and six months ended June 30, 2008, respectively, as compared to the same periods in the prior year. Excluding the net losses on sale of securities during the six months ended June 30, 2008, non-interest income grew by $2.5 million, or 16.0%, when compared to the six months ended June 30, 2007. See the table below for a reconciliation of non-interest income as adjusted:
(Dollars in Thousands)
Three Months Ended June 30,
------------------------------------
$ %
2008 2007 Variance Variance
------- ------- ------- --------
Non-Interest Income GAAP $ 9,512 $ 8,039 $ 1,473 18.3%
Add - Net Loss on Sale of
Securities -- -- -- n/a
----------------- ------- ----
Non-Interest Income as Adjusted $ 9,512 $ 8,039 $ 1,473 18.3%
================= ======= ====
Six Months Ended June 30,
------------------------------------
$ %
2008 2007 Variance Variance
------- ------- ------- --------
Non-Interest Income GAAP $17,750 $15,832 $ 1,918 12.1%
Add - Net Loss on Sale of
Securities 609 -- 609 n/a
----------------- ------- ----
Non-Interest Income as Adjusted $18,359 $15,832 $ 2,527 16.0%
================= ======= ====
The change in non-interest income is attributable to the following:
* Service charges on deposit accounts increased by $432,000, or 12.2%, and by $657,000, or 9.5% for the three and six months ended June 30, 2008, as compared to the same periods in 2007, primarily due to the Slades acquisition.
* Wealth management revenue increased by $934,000, or 42.8%, and $1.8 million, or 45.0%, for the three and six months ended June 30, 2008, as compared to the same periods in 2007. Assets under management at June 30, 2008 were $1.3 billion, an increase of $355.5 million, or 39.7%, as compared to June 30, 2007. On November 1, 2007 Rockland Trust completed its acquisition of assets from the Lincoln, Rhode Island-based O'Connell Investment Services, Inc. The closing of this transaction added approximately $200 million to assets under management.
* Mortgage banking income increased by $140,000, or 17.1%, and $479,000, or 30.1%, for the three and six months ended June 30, 2008, as compared to the same periods in 2007. The balance of the mortgage servicing asset was $2.0 million and loans serviced amounted to $259.3 million as of June 30, 2008, as compared to a mortgage servicing asset balance of $2.3 million and loans serviced amounting to $270.5 million at June 30, 2007.
* There were no gains or losses on the sale of securities during the second quarter of 2008. There was a net loss on the sale of securities of $609,000 during the first quarter of 2008. Of this loss, $742,000 is associated with the sale of the majority of the Slades securities portfolio, which was offset by gains on the sale of agency securities recorded in the quarter. There were no gains or losses on the sale of securities during the first six months of 2007.
* Other non-interest income decreased by $243,000, or (22.5%), and $648,000, or (27.1%), for the three and six months ended June 30, 2008, as compared to the same period in 2007. The decrease year-to-date is primarily attributable to declines in 1031 exchange income, which is due to the slowdown in national commercial real estate markets, and trading asset losses.
Non-interest expense increased by $3.3 million, or 14.2%, and by $5.9 million, or 13.1%, for the three and six months ended June 30, 2008, as compared to the same periods in 2007. When adjusting the three and six month periods for the items listed below, non-interest expense increased $4.3 million, or 19.5%, and $6.9 million, or 16.2%, respectively, as compared to the same periods in 2007. See the table below for a reconciliation of non-interest expense as adjusted:
(Dollars in Thousands)
Three Months Ended
June 30,
------------------ $ %
2008 2007 Variance Variance
------- ------- ------- -----
Non-Interest Expense GAAP $26,562 $23,266 $ 3,296 14.2%
Less - Merger & Acquisition
Expenses (376) -- (376) n/a
Less - Litigation Reserve -- (1,361) 1,361 n/a
------------------ ------- ----
Non-Interest Expense
as Adjusted $26,186 $21,905 $ 4,281 19.5%
================== ======= ====
Six Months Ended
June 30,
------------------ $ %
2008 2007 Variance Variance
------- ------- ------- -----
Non-Interest Expense GAAP $50,594 $44,719 $ 5,875 13.1%
Less - Executive Early
Retirement Costs -- (406) 406 n/a
Less - Merger & Acquisition
Expenses (1,120) -- (1,120) n/a
Less - Litigation Reserve -- (1,361) 1,361 n/a
Add - WorldCom Bond Loss
Recovery 418 -- 418 n/a
------------------ ------- ----
Non-Interest Expense as
Adjusted $49,892 $42,952 $ 6,940 16.2%
================== ======= ====
* Salaries and employee benefits increased by $1.9 million, or 14.9%, and $2.9 million, or 11.2%, for the three and six months ended June 30, 2008, as compared to the same periods in 2007. The increase in salaries and benefits is attributable to the Slades acquisition in the first quarter of 2008, annual merit increases, incentive programs, and the O'Connell acquisition in the fourth quarter of 2007.
* Occupancy and equipment expense increased by $628,000, or 24.1%, and $977,000, or 18.9%, for the three and six month periods ending June 30, 2008, as compared to the same periods in 2007. The increase is mainly due to an increase in rent expense due to two new branch locations, increased cost for snow removal for the year-to-date period, utility costs for the quarter-to-date period, and the effects of the Slades acquisition.
* Data processing and facilities management expense increased by $219,000, or 18.2%, and $415,000, or 18.1%, for the three and six month periods ending June 30, 2008, as compared to the same periods in 2007. The increase is partially a result of new functionality as well as an increase in volume due, in part, to the Slades acquisition during the first quarter of 2008.
* Merger and acquisition related expenditures totaled $376,000 and $1.1 million, for the three and six month periods ending June 30, 2008, associated with the Slades acquisition in March 2008.
* Other non-interest expense increased by $141,000, or 2.2%, and $441,000, or 4.0%, for the three and six month periods ending June 30, 2008, as compared to the same periods in 2007. The increase in the six-month period is primarily attributable to advertising expenses of $358,000, consulting fees of $218,000, and the amortization of intangible assets of $607,000, partially offset by a recovery on the WorldCom bond loss of $418,000.
The Company's effective tax rate was 27% and 25% for the three months ended June 30, 2008 and 2007, respectively.
Total assets increased by $619.0 million, or 22.4%, to $3.4 billion at June 30, 2008 as compared to December 31, 2007. This increase is primarily a result of the closing of the Slades acquisition during the first quarter of 2008.
* Securities decreased by $18.9 million, or (3.7%), during the six months ended June 30, 2008, primarily due to the sale of approximately $50 million in Government Sponsored Entities' securities resulting in a gain of $133,000 in January 2008. In addition, the Company sold the majority of Slades investment portfolio during the first quarter incurring a loss of $742,000. The ratio of securities to total assets as of June 30, 2008 was 14.4%, compared to 18.3% at December 31, 2007. The Company does not own any equity or debt issued by either the Federal National Mortgage Association or the Federal Home Loan Mortgage Corporation.
* Total loans grew by $532.3 million, or 26.1%, during the six months ended June 30, 2008. The Slades acquisition added $471.2 million in loan growth, as shown in the following table:
(Dollars in Thousands)
-------------------------------------------------
Organic
June 30, Dec. 31, Slades Growth/
2008 2007 Acquisition (Loss)
---------- ---------- ---------- ----------
Loans
Commercial and
Commercial Real
Estate Loans $1,494,659 $1,121,310 $ 316,081 $ 57,268
Business Banking 86,430 69,977 -- 16,453
Residential Real
Estate 435,767 341,090 114,432 (19,755)
Consumer - Home
Equity 374,580 308,744 38,723 27,113
Consumer - Other 183,829 201,831 2,009 (20,011)
---------- ---------- ---------- ----------
Total Loans $2,575,265 $2,042,952 $ 471,245 $ 61,068
========== ========== ========== ==========
Excluding the Slades acquisition, organic loan growth achieved in the first six months of 2008 amounted to $61.1 million, or 6.0% on an annualized basis, and was concentrated in the commercial and home equity lending categories, while the residential real estate and consumer (primarily indirect automobile lending) categories were reduced. Total commercial loans (including business banking) following the Slades acquisition now represent 61.4% of the total loan portfolio.
* During the second quarter of 2008, Rockland Trust completed a sale and leaseback transaction consisting of 17 branch properties and various individual office buildings. In total the Company sold and concurrently leased back $27.5 million in land and buildings with associated accumulated depreciation of $9.3 million. Net proceeds were $32.2 million, resulting in a gain of $13.2 million, net of transaction costs of $753,000. The gain will be deferred and amortized ratably over the lease terms of the individual buildings, which are either 10 or 15 years, through rent expense as a part of occupancy and equipment. The Company anticipates that the transaction will be immediately accretive to 2008 earnings.
Total deposits of $2.5 billion increased 22.1% at June 30, 2008 compared to $2.0 billion at December 31, 2007. Of the increase, $410.8 million is a result of the Slades acquisition. Excluding the impact of the acquisition, deposits grew at an annualized rate of 3.6%. See the table below regarding deposits derived from the Slades acquisition:
(Dollars in Thousands)
------------------------------------------------
Organic
June 30, Dec. 31, Slades Growth/
2008 2007 Acquisition (Loss)
---------- ---------- ----------- ----------
Deposits
Demand Deposits $ 564,060 $ 471,164 $ 74,584 $ 18,312
Savings and Interest
Checking Accounts 696,457 587,474 119,908 (10,925)
Money Market 478,852 435,792 38,668 4,392
Time Certificates
of Deposit 734,792 532,180 177,609 25,003
---------- ---------- ---------- ----------
Total Deposits $2,474,161 $2,026,610 $ 410,769 $ 36,782
========== ========== ========== ==========
Borrowings increased by $73.1 million, or 14.5%, during the six months ending June 30, 2008, compared to December 31, 2007, attributable to the Slades acquisition and organic loan growth.
The Company reported a return on average assets and a return on average equity in the second quarter of 2008 of 0.97% and 10.70%, respectively, as compared to 0.85% and 10.44% for the same periods in 2007. Operating return on average assets and return on average equity in the second quarter of 2008 was 1.00% and 11.02%, respectively, as compared to 1.07% and 13.13% for the same periods in 2007.
Stockholders' equity at June 30, 2008 totaled $301.1 million, as compared to $220.5 million at December 31, 2007. The Tier 1 leverage capital ratio at June 30, 2008 was 7.70%, maintaining the Company's well-capitalized position.
At June 30, 2008, the balance of goodwill was $116.6 million and other intangible assets, primarily core deposit intangibles, were $10.3 million. The amount of goodwill and core deposit intangible assets derived from the Slades acquisition was $58.1 million and $9.0 million, respectively.
The allowance for loan losses was $33.2 million at June 30, 2008 and $26.8 million at December 31, 2007. The majority of the increase in allowance for loan losses is due to the Slades acquisition. Nonperforming assets totaled $12.1 million at June 30, 2008, or 0.36% of total assets, as compared to $11.9 million reported at March 31, 2008, or 0.36% of total assets, and $8.3 million reported at December 31, 2007, or 0.30% of total assets.
Christopher Oddleifson, President and Chief Executive Officer, and Denis K. Sheahan, Chief Financial Officer, of Independent Bank Corp. and Rockland Trust Company, will host a conference call to discuss second quarter earnings at 9:00 a.m. Eastern Time on Friday, July 18, 2008. Internet access to the call is available on the Company's website at http://www.RocklandTrust.com or by telephonic access by dial-in at 1-800-860-2442 reference: INDB. A replay of the call will be available by calling 1-877-344-7529, Replay Passcode: 420819. The web cast replay will be available until July 18, 2009 and the telephone replay will be available until July 25, 2008.
Independent Bank Corp.'s sole bank subsidiary, Rockland Trust Company, currently has approximately $3.4 billion in assets. Rockland Trust offers commercial banking, retail banking, investment management, and insurance sales services from: 63 retail branches, 9 commercial lending centers, and 5 mortgage origination offices located throughout southeastern Massachusetts and on Cape Cod; and, from 4 investment management offices located throughout southeastern Massachusetts, on Cape Cod, and in Rhode Island. To find out more about the products and services available at Rockland Trust, please visit https://www.RocklandTrust.com
This press release contains certain "forward-looking statements" with respect to the financial condition, results of operations and business of the Company. Actual results may differ from those contemplated by these statements. The Company wishes to caution readers not to place undue reliance on any forward-looking statements. The Company disclaims any intent or obligation to update publicly any such forward-looking statements, whether in response to new information, future events or otherwise.
This press release contains financial information determined by methods other than in accordance with accounting principles generally accepted in the United States of America ("GAAP"). The Company's management uses these non-GAAP measures in its analysis of the Company's performance. These non-GAAP measures may exclude significant gains or losses that are unusual in nature, such as securities losses. Because these gains and losses and their impact on the Company's performance are difficult to predict, management believes that presentations of adjusted financial measures excluding the impact of these gains and losses provide useful information that is essential to a proper understanding of the operating results of the Company. These disclosures should not be viewed as a substitute for operating results determined in accordance with GAAP, nor are they necessarily comparable to non-GAAP performance measures which may be presented by other companies.
INDEPENDENT BANK CORP.
FINANCIAL SUMMARY
(Unaudited - Dollars in
Thousands)
CONSOLIDATED BALANCE SHEETS
------------------------------------------
June 30, December 31, $ %
2008 2007 Variance Change
------------------------------------------
Assets
Cash and Due From Banks $ 89,719 $ 67,416 22,303 33.08%
Fed Funds Sold and Short
Term Investments 100 -- -- --
Securities
Trading Assets 3,185 1,687 1,498 88.80%
Securities Available
for Sale 426,894 444,258 (17,364) -3.91%
Securities Held to
Maturity 33,895 45,265 (11,370) -25.12%
Federal Home Loan
Bank Stock 24,603 16,260 8,343 51.31%
---------- ---------- ---------- ------
Total Securities 488,577 507,470 (18,893) -3.72%
---------- ---------- ---------- ------
Loans
Commercial and
Industrial 261,384 190,522 70,862 37.19%
Commercial Real Estate 1,062,902 797,416 265,486 33.29%
Commercial
Construction 170,373 133,372 37,001 27.74%
Business Banking 86,430 69,977 16,453 23.51%
Residential
Real Estate 417,304 323,847 93,457 28.86%
Residential
Construction 9,292 6,115 3,177 51.95%
Residential Loans
Held for Sale 9,171 11,128 (1,957) -17.59%
Consumer - Home Equity 374,580 308,744 65,836 21.32%
Consumer - Auto 141,046 156,006 (14,960) -9.59%
Consumer - Other 42,783 45,825 (3,042) -6.64%
---------- ---------- ---------- ------
Total Loans 2,575,265 2,042,952 532,313 26.06%
Less - Allowance for
Loan Losses (33,231) (26,831) (6,400) 23.85%
---------- ---------- ---------- ------
Net Loans 2,542,034 2,016,121 525,913 26.09%
---------- ---------- ---------- ------
Bank Premises and
Equipment 34,749 39,085 (4,336) -11.09%
Goodwill and Core
Deposit
Intangible 126,914 60,411 66,503 110.08%
Other Assets 104,981 77,910 27,071 34.75%
---------- ---------- ---------- ------
Total Assets $3,387,074 $2,768,413 618,661 22.35%
========== ========== ========== ======
Liabilities and
Stockholders' Equity
Deposits
Demand Deposits $ 564,060 $ 471,164 92,896 19.72%
Savings and
Interest Checking
Accounts 696,457 587,474 108,983 18.55%
Money Market 478,852 435,792 43,060 9.88%
Time Certificates
of Deposit 734,792 532,180 202,612 38.07%
---------- ---------- ---------- ------
Total Deposits 2,474,161 2,026,610 447,551 22.08%
---------- ---------- ---------- ------
Borrowings
Federal Home Loan
Bank Borrowings 357,949 311,125 46,824 15.05%
Fed Funds Purchased
and Assets Sold
Under Repurchase
Agreements 157,114 138,603 18,511 13.36%
Junior Subordinated
Debentures 61,857 51,547 10,310 20.00%
Other Borrowings 495 3,069 (2,574) -83.87%
---------- ---------- ---------- ------
Total Borrowings 577,415 504,344 73,071 14.49%
---------- ---------- ---------- ------
Total Deposits and
Borrowings 3,051,576 2,530,954 520,622 20.57%
Other Liabilities 34,381 16,994 17,387 102.31%
Stockholders'
Equity 301,117 220,465 80,652 36.58%
---------- ---------- ---------- ------
Total Liabilities
and Stockholders'
Equity $3,387,074 $2,768,413 618,661 22.35%
========== ========== ========== ======
March 31, 2008
CONSOLIDATED BALANCE SHEETS vs.
March 31, June 30, 2008 %
2008 Variance Change
-----------------------------------
Assets
Cash and Due From Banks $ 80,598 $ 9,121 11.32%
Fed Funds Sold and Short
Term Investments -- 100 n/a
Securities
Trading Assets 3,305 (120) -3.63%
Securities Available
for Sale 419,491 7,403 1.76%
Securities Held to
Maturity 39,335 (5,440) -13.83%
Federal Home Loan
Bank Stock 24,603 -- 0.00%
---------- ---------- ------
Total Securities 486,734 1,843 0.38%
---------- ---------- ------
Loans
Commercial and
Industrial 259,430 1,954 0.75%
Commercial Real Estate 1,030,085 32,817 3.19%
Commercial
Construction 163,785 6,588 4.02%
Business Banking 73,853 12,577 17.03%
Residential
Real Estate 426,674 (9,370) -2.20%
Residential
Construction 7,622 1,670 21.91%
Residential Loans
Held for Sale 15,577 (6,406) -41.12%
Consumer - Home Equity 355,367 19,213 5.41%
Consumer - Auto 147,232 (6,186) -4.20%
Consumer - Other 44,317 (1,534) -3.46%
---------- ---------- ------
Total Loans 2,523,942 51,323 2.03%
Less - Allowance for
Loan Losses (32,609) (622) 1.91%
---------- ---------- ------
Net Loans 2,491,333 50,701 2.04%
---------- ---------- ------
Bank Premises and
Equipment 51,559 (16,810) -32.60%
Goodwill and Core
Deposit
Intangible 127,391 (477) -0.37%
Other Assets 92,616 12,365 13.35%
---------- ---------- ------
Total Assets $3,330,231 $ 56,843 1.71%
========== ========== ======
Liabilities and
Stockholders' Equity
Deposits
Demand Deposits $ 549,581 $ 14,479 2.63%
Savings and
Interest Checking
Accounts 686,808 9,649 1.40%
Money Market 484,634 (5,782) -1.19%
Time Certificates
of Deposit 735,922 (1,130) -0.15%
---------- ---------- ------
Total Deposits 2,456,945 17,216 0.70%
---------- ---------- ------
Borrowings
Federal Home Loan
Bank Borrowings 332,105 25,844 7.78%
Fed Funds Purchased
and Assets Sold
Under Repurchase
Agreements 138,633 18,481 13.33%
Junior Subordinated
Debentures 61,857 -- 0.00%
Other Borrowings 10,516 (10,021) -95.29%
---------- ---------- ------
Total Borrowings 543,111 34,304 6.32%
---------- ---------- ------
Total Deposits and
Borrowings 3,000,056 51,520 1.72%
Other Liabilities 29,518 4,863 16.47%
Stockholders'
Equity 300,657 460 0.15%
---------- ---------- ------
Total Liabilities
and Stockholders'
Equity $3,330,231 $ 56,843 1.71%
========== ========== ======
INDEPENDENT BANK CORP. FINANCIAL SUMMARY
----------------------------------------
(Unaudited - Dollars in Thousands, Except Per Share Data)
CONSOLIDATED STATEMENTS OF INCOME
Three Months Ended
-------------------------------------------------
June 30, $ %
2008 2007 Variance Change
-------------------------------------------------
INTEREST INCOME
Interest on Fed
Funds Sold and
Short Term
Investments $ 15 $ 289 $ (274) -94.81%
Interest and
Dividends on
Securities 5,883 5,526 357 6.46%
Interest on
Loans 38,657 33,788 4,869 14.41%
------------ ------------ ------------ ------
Total
Interest
Income 44,555 39,603 4,952 12.50%
------------ ------------ ------------ ------
INTEREST
EXPENSE
Interest on
Deposits 9,539 10,816 (1,277) -11.81%
Interest on
Borrowed Funds 4,929 5,354 (425) -7.94%
------------ ------------ ------------ ------
Total
Interest
Expense 14,468 16,170 (1,702) -10.53%
------------ ------------ ------------ ------
Net Interest
Income 30,087 23,433 6,654 28.40%
Less -
Provision
for Loan
Losses 1,902 584 1,318 225.68%
------------ ------------ ------------ ------
Net Interest
Income after
Provision for
Loan Losses 28,185 22,849 5,336 23.35%
------------ ------------ ------------ ------
NON-INTEREST
INCOME
Service Charges
on Deposit
Accounts 3,963 3,531 432 12.23%
Wealth
Management 3,114 2,180 934 42.84%
Mortgage
Banking Income 960 820 140 17.07%
BOLI Income 637 427 210 49.18%
Net Loss on
Sale of
Securities -- -- -- n/a
Other
Non-Interest
Income 838 1,081 (243) -22.48%
------------ ------------ ------------ ------
Total
Non-Interest
Income 9,512 8,039 1,473 18.32%
------------ ------------ ------------ ------
NON-INTEREST
EXPENSE
Salaries and
Employee
Benefits 14,945 13,013 1,932 14.85%
Occupancy and
Equipment
Expenses 3,235 2,607 628 24.09%
Data Processing
and Facilities
Management 1,421 1,202 219 18.22%
Merger &
Acquisition
Expense 376 -- 376 n/a
WorldCom Bond
Loss Recovery -- -- -- --
Other
Non-Interest
Expense 6,585 6,444 141 2.19%
------------ ------------ ------------ ------
Total
Non-Interest
Expense 26,562 23,266 3,296 14.17%
------------ ------------ ------------ ------
INCOME BEFORE
INCOME TAXES 11,135 7,622 3,513 46.09%
------------ ------------ ------------ ------
PROVISION FOR
INCOME TAXES 3,015 1,908 1,107 58.02%
------------ ------------ ------------ ------
NET INCOME $ 8,120 $ 5,714 $ 2,406 42.11%
============ ============ ============ ======
BASIC EARNINGS
PER SHARE $ 0.50 $ 0.41 21.95%
DILUTED EARNINGS
PER SHARE $ 0.50 $ 0.40 25.00%
BASIC AVERAGE
SHARES 16,268,009 14,101,468 15.36%
DILUTED AVERAGE
SHARES 16,346,749 14,231,264 14.87%
PERFORMANCE
RATIOS:
Net Interest
Margin (FTE) 4.01% 3.85% 4.16%
Return on
Average
Assets 0.97% 0.85% 14.12%
Return on
Average
Equity 10.70% 10.44% 2.49%
RECONCILIATION
TABLE -
NON-GAAP
FINANCIAL
INFORMATION
NET INCOME
(GAAP) $ 8,120 $ 5,714 $ 2,406 42.11%
Net Interest
Income
Components
Add -
Write-Off
of Debt
Issuance
Cost, net
of tax -- 590 (590)
Non-Interest
Income
Components
Add - Net
Loss on
Sale of
Securities,
net of tax -- -- --
Non-Interest
Expense
Components
Add -
Executive
Early
Retirement
Costs, net
of tax -- -- --
Add -
Merger and
Acquisition
Expenses,
net of tax 244 -- 244
Add -
Litigation
Reserve,
net of tax -- 885 (885)
Less -
WorldCom
Bond Loss
Recovery,
net of tax -- -- --
------------ ------------ ------------
NET OPERATING
EARNINGS $ 8,364 $ 7,189 $ 1,175 16.34%
============ ============ ============
Diluted
Earnings Per
Share, on an
Operating
Basis $ 0.51 $ 0.51 $ 0.00 0.00%
============ ============ ============
Six Months Ended
-------------------------------------------------
June 30, $ %
2008 2007 Variance Change
-------------------------------------------------
INTEREST INCOME
Interest on Fed
Funds Sold and
Short Term
Investments $ 35 $ 733 $ (698) -95.23%
Interest and
Dividends on
Securities 11,775 11,506 269 2.34%
Interest on
Loans 73,825 67,487 6,338 9.39%
------------ ------------ ------------ ------
Total
Interest
Income 85,635 79,726 5,909 7.41%
------------ ------------ ------------ ------
INTEREST
EXPENSE
Interest on
Deposits 19,854 21,910 (2,056) -9.38%
Interest on
Borrowed Funds 9,928 10,395 (467) -4.49%
------------ ------------ ------------ ------
Total
Interest
Expense 29,782 32,305 (2,523) -7.81%
------------ ------------ ------------ ------
Net Interest
Income 55,853 47,421 8,432 17.78%
Less -
Provision
for Loan
Losses 3,245 1,475 1,770 120.00%
------------ ------------ ------------ ------
Net Interest
Income after
Provision for
Loan Losses 52,608 45,946 6,662 14.50%
------------ ------------ ------------ ------
NON-INTEREST
INCOME
Service Charges
on Deposit
Accounts 7,598 6,941 657 9.47%
Wealth
Management 5,790 3,994 1,796 44.97%
Mortgage
Banking Income 2,073 1,594 479 30.05%
BOLI Income 1,158 915 243 26.56%
Net Loss on
Sale of
Securities (609) -- (609) n/a
Other
Non-Interest
Income 1,740 2,388 (648) -27.14%
------------ ------------ ------------ ------
Total
Non-Interest
Income 17,750 15,832 1,918 12.11%
------------ ------------ ------------ ------
NON-INTEREST
EXPENSE
Salaries and
Employee
Benefits 29,088 26,166 2,922 11.17%
Occupancy and
Equipment
Expenses 6,138 5,161 977 18.93%
Data Processing
and Facilities
Management 2,705 2,290 415 18.12%
Merger &
Acquisition
Expense 1,120 -- 1,120 n/a
WorldCom Bond
Loss Recovery (418) -- (418) n/a
Other
Non-Interest
Expense 11,961 11,102 859 7.74%
------------ ------------ ------------ ------
Total
Non-Interest
Expense 50,594 44,719 5,875 13.14%
------------ ------------ ------------ ------
INCOME BEFORE
INCOME TAXES 19,764 17,059 2,705 15.86%
------------ ------------ ------------ ------
PROVISION FOR
INCOME TAXES 5,336 4,720 616 13.05%
------------ ------------ ------------ ------
NET INCOME $ 14,428 $ 12,339 $ 2,089 16.93%
============ ============ ============ ======
BASIC EARNINGS
PER SHARE $ 0.95 $ 0.86 10.47%
DILUTED EARNINGS
PER SHARE $ 0.94 $ 0.86 9.30%
BASIC AVERAGE
SHARES 15,193,327 14,282,226 6.38%
DILUTED AVERAGE
SHARES 15,269,941 14,428,323 5.83%
PERFORMANCE
RATIOS:
Net Interest
Margin (FTE) 3.96% 3.84% 3.13%
Return on
Average
Assets 0.92% 0.91% 1.10%
Return on
Average
Equity 10.39% 11.09% -6.31%
RECONCILIATION
TABLE -
NON-GAAP
FINANCIAL
INFORMATION
NET INCOME
(GAAP) $ 14,428 $ 12,339 $ 2,089 16.93%
Net Interest
Income
Components
Add -
Write-Off
of Debt
Issuance
Cost, net
of tax 590 (590)
Non-Interest
Income
Components
Add - Net
Loss on
Sale of
Securities,
net of tax 396 -- 396
Non-Interest
Expense
Components
Add -
Executive
Early
Retirement
Costs, net
of tax -- 264 (264)
Add -
Merger and
Acquisition
Expenses,
net of tax 728 -- 728
Add -
Litigation
Reserve,
net of tax 885 (885)
Less -
WorldCom
Bond Loss
Recovery,
net of tax (272) -- (272)
------------ ------------ ------------
NET OPERATING
EARNINGS $ 15,280 $ 14,078 $ 1,202 8.54%
============ ============ ============
Diluted
Earnings Per
Share, on an
Operating
Basis $ 1.00 $ 0.98 $ 0.02 2.04%
============ ============ ============
INDEPENDENT BANK CORP.
SUPPLEMENTAL FINANCIAL INFORMATION
CONSOLIDATED AVERAGE BALANCE SHEETS AND AVERAGE RATE DATA
(Unaudited - Dollars in Thousands)
Three Months Ended
June 30, 2008
---------------------------
Interest
Ending Average Earned/ Yield/
Balance Balance Paid Rate
---------------------------------------------------------------------
Interest-Earning
Assets:
Federal Funds Sold and
Short Term Investments $ 100 $ 754 $ 15 7.96%
Securities:
Trading Assets 3,185 3,446 39 4.53%
Taxable Investment
Securities 446,303 444,807 5,370 4.83%
Non-taxable Investment
Securities (1) 39,089 41,722 730 7.00%
---------- ---------- --------------
Total Securities: 488,577 489,975 6,139 5.01%
---------- ---------- --------------
Loans (1) 2,575,265 2,550,066 38,768 6.08%
Total Interest-Earning
Assets $3,063,942 $3,040,795 $44,922 5.91%
---------- ---------- --------------
Cash and Due from Banks 89,719 67,974
Other Assets 233,413 228,548
---------- ----------
Total Assets $3,387,074 $3,337,317
========== ==========
Interest-bearing Liabilities:
Deposits:
Savings and Interest
Checking Accounts $ 696,457 $ 691,150 $ 1,493 0.86%
Money Market 478,852 482,638 2,124 1.76%
Time Deposits 734,792 739,389 5,922 3.20%
---------- ---------- --------------
Total interest-bearing
deposits: 1,910,101 1,913,177 9,539 1.99%
Borrowings:
Federal Home Loan Bank
Borrowings $ 357,949 $ 330,881 2,762 3.34%
Federal Funds Purchased
and Assets Sold Under
Repurchase Agreement 157,114 144,012 1,116 3.10%
Junior Subordinated
Debentures 61,857 61,857 989 6.40%
Other Borrowings 495 10,757 62 2.31%
---------- ---------- --------------
Total Borrowings: 577,415 547,507 4,929 3.60%
---------- ---------- --------------
Total Interest-Bearing
Liabilities $2,487,516 $2,460,684 $14,468 2.35%
---------- ---------- --------------
Demand Deposits 564,060 547,048
Other Liabilities 34,381 26,098
---------- ----------
Total Liabilities $3,085,957 $3,033,830
Stockholders' Equity 301,117 303,487
---------- ----------
Total Liabilities and
Stockholders' Equity $3,387,074 $3,337,317
========== ==========
Net Interest Income $30,454
=======
Interest Rate Spread (2) 3.56%
====
Net Interest Margin (3) 4.01%
====
Supplemental Information:
Total Deposits, including
Demand Deposits $2,474,161 $2,460,225 $ 9,539
Cost of Total Deposits 1.55%
Total Funding Liabilities,
including Demand Deposits $3,051,576 $3,007,732 $14,468
Cost of Total Funding
Liabilities 1.92%
INDEPENDENT BANK CORP.
SUPPLEMENTAL FINANCIAL INFORMATION
CONSOLIDATED AVERAGE BALANCE SHEETS AND AVERAGE RATE DATA
(Unaudited - Dollars in Thousands)
Three Months Ended
June 30, 2007
------------------------------
Interest
Average Earned/ Yield/
Balance Paid Rate
---------------------------------------------------------------------
Interest-Earning Assets:
Federal Funds Sold and Short
Term Investments $ 20,962 $ 289 5.51%
Securities:
Trading Assets 1,647 9 2.19%
Taxable Investment Securities 418,893 4,975 4.75%
Non-taxable Investment
Securities (1) 51,893 834 6.43%
---------- ---------------
Total Securities: 472,433 5,818 4.93%
---------- ---------------
Loans (1) 1,987,156 33,911 6.83%
Total Interest-Earning Assets $2,480,551 $40,018 6.45%
---------- ---------------
Cash and Due from Banks 60,949
Other Assets 148,885
----------
Total Assets $2,690,385
==========
Interest-bearing Liabilities:
Deposits:
Savings and Interest Checking
Accounts $ 580,449 $ 1,994 1.37%
Money Market 467,846 3,509 3.00%
Time Deposits 522,282 5,313 4.07%
---------- ---------------
Total interest-bearing deposits: 1,570,577 10,816 2.75%
Borrowings:
Federal Home Loan Bank Borrowings $ 238,246 $ 2,668 4.48%
Federal Funds Purchased and Assets
Sold Under Repurchase Agreement 99,300 733 2.95%
Junior Subordinated Debentures 59,760 1,935 12.95%
Other Borrowings 997 18 7.22%
---------- ---------------
Total Borrowings: 398,303 5,354 5.38%
---------- ---------------
Total Interest-Bearing Liabilities $1,968,880 $16,170 3.29%
---------- ---------------
Demand Deposits 488,571
Other Liabilities 13,908
----------
Total Liabilities $2,471,359
Stockholders' Equity 219,026
----------
Total Liabilities and
Stockholders' Equity $2,690,385
==========
Net Interest Income $23,848
=======
Interest Rate Spread (2) 3.16%
=====
Net Interest Margin (3) 3.85%
=====
Supplemental Information:
Total Deposits, including
Demand Deposits $2,059,148 $10,816
Cost of Total Deposits 2.10%
Total Funding Liabilities,
including Demand Deposits $2,457,451 $16,170
Cost of Total Funding Liabilities 2.63%
(1) The total amount of adjustment to present interest income and
yield on a fully tax-equivalent basis is $367 and $415 for the
three months ended June 30, 2008 and 2007, respectively.
(2) Interest rate spread represents the difference between the
weighted average yield on interest-earning assets and the
weighted average cost of interest-bearing liabilities.
(3) Net interest margin represents annualized net interest income
as a percentage of average interest-earning assets.
INDEPENDENT BANK CORP.
SUPPLEMENTAL FINANCIAL INFORMATION
CONSOLIDATED AVERAGE BALANCE SHEETS AND AVERAGE RATE DATA
(Unaudited - Dollars in Thousands)
Six Months Ended
June 30, 2008
---------------------------
Interest
Ending Average Earned/ Yield/
Balance Balance Paid Rate
---------------------------------------------------------------------
Interest-Earning Assets:
Federal Funds Sold and
Short Term Investments $ 100 $ 689 $ 35 10.16%
Securities:
Trading Assets 3,185 3,012 66 4.38%
Taxable Investment Securities 446,303 434,295 10,756 4.95%
Non-taxable Investment
Securities (1) 39,089 43,778 1,466 6.70%
---------- ---------- ------- -----
Total Securities: 488,577 481,085 12,288 5.11%
Loans (1) 2,575,265 2,378,702 74,053 6.23%
---------- ---------- ------- -----
Total Interest-Earning Assets $3,063,942 $2,860,476 $86,376 6.04%
---------- ---------- ------- -----
Cash and Due from Banks 89,719 64,286
Other Assets 233,413 199,438
---------- ----------
Total Assets $3,387,074 $3,124,200
========== ==========
Interest-bearing Liabilities:
Deposits:
Savings and Interest
Checking Accounts $ 696,457 $ 643,469 $ 3,084 0.96%
Money Market 478,852 474,349 4,702 1.98%
Time Deposits 734,792 673,394 12,068 3.58%
---------- ---------- ------- -----
Total interest-bearing
deposits: 1,910,101 1,791,212 19,854 2.22%
Borrowings:
Federal Home Loan Bank
Borrowings $ 357,949 $ 315,730 $ 5,704 3.61%
Federal Funds Purchased and
Assets Sold Under Repurchase
Agreement 157,114 141,644 2,270 3.21%
Junior Subordinated Debentures 61,857 58,458 1,848 6.32%
Other Borrowings 495 7,597 106 2.79%
---------- ---------- ------- -----
Total Borrowings: 577,415 523,429 9,928 3.79%
---------- ---------- ------- -----
Total Interest-Bearing
Liabilities $2,487,516 $2,314,641 $29,782 2.57%
---------- ---------- ------- -----
Demand Deposits 564,060 511,033
Other Liabilities 34,381 20,785
---------- ----------
Total Liabilities $3,085,957 $2,846,459
Stockholders' Equity 301,117 277,741
---------- ----------
Total Liabilities and
Stockholders' Equity $3,387,074 $3,124,200
========== ==========
Net Interest Income $56,594
=======
Interest Rate Spread (2) 3.47%
=====
Net Interest Margin (3) 3.96%
=====
Supplemental Information:
Total Deposits, including
Demand Deposits $2,474,161 $2,302,245 $19,854
Cost of Total Deposits 1.72%
Total Funding Liabilities,
including Demand Deposits $3,051,576 $2,825,674 $29,782
Cost of Total Funding
Liabilities 2.11%
Six Months Ended
June 30, 2007
------------------------------
Interest
Average Earned/ Yield/
Balance Paid Rate
---------------------------------------------------------------------
Interest-Earning Assets:
Federal Funds Sold and Short
Term Investments $ 27,265 $ 733 5.38%
Securities:
Trading Assets 1,669 23 2.76%
Taxable Investment Securities 433,625 10,377 4.79%
Non-taxable Investment Securities (1) 52,722 1,701 6.45%
---------- -------- ----
Total Securities: 488,016 12,101 4.96%
Loans (1) 1,995,143 67,727 6.79%
---------- -------- ----
Total Interest-Earning Assets $2,510,424 $ 80,561 6.42%
---------- -------- ----
Cash and Due from Banks 60,142
Other Assets 148,565
----------
Total Assets $2,719,131
==========
Interest-bearing Liabilities:
Deposits:
Savings and Interest Checking
Accounts $ 576,067 $ 3,794 1.32%
Money Market 468,603 7,049 3.01%
Time Deposits 540,289 11,067 4.10%
---------- -------- ----
Total interest-bearing deposits: 1,584,959 21,910 2.76%
Borrowings:
Federal Home Loan Bank Borrowings $ 245,471 $ 5,459 4.45%
Federal Funds Purchased and Assets
Sold Under Repurchase Agreement 102,483 1,585 3.09%
Junior Subordinated Debentures 68,492 3,326 9.71%
Other Borrowings 792 25 6.31%
---------- -------- ----
Total Borrowings: 417,238 10,395 4.98%
---------- -------- ----
Total Interest-Bearing Liabilities $2,002,197 $ 32,305 3.23%
---------- -------- ----
Demand Deposits 480,671
Other Liabilities 13,831
----------
Total Liabilities $2,496,699
Stockholders' Equity 222,432
----------
Total Liabilities and
Stockholders' Equity $2,719,131
==========
Net Interest Income $ 48,256
==========
Interest Rate Spread (2) 3.19%
====
Net Interest Margin (3) 3.84%
====
Supplemental Information:
Total Deposits, including
Demand Deposits $2,065,630 $ 21,910
Cost of Total Deposits 2.12%
Total Funding Liabilities, including
Demand Deposits $2,482,868 $ 32,305
Cost of Total Funding Liabilities 2.60%
(1) The total amount of adjustment to present interest income and
yield on a fully tax-equivalent basis is $741 for the six months
ended June 30, 2008 and $835 for the six months ended June 30,
2007.
(2) Interest rate spread represents the difference between the
weighted average yield on interest-earning assets and the
weighted average cost of interest-bearing liabilities.
(3) Net interest margin represents annualized net interest income
as a percentage of average interest-earning assets.
As Of
June 30, December 31, June 30,
2008 2007 2007
Asset Quality ---------- ---------- ----------
------------- (Dollars in Thousands,
Nonperforming Loans Except Per Share Data)
Commercial & Industrial
Loans $ 403 $ 306 $ 301
Business Banking Loans 935 439 343
Commercial Real Estate
Loans 2,263 2,568 2,013
Residential Real
Estate Loans 4,460 2,380 1,927
Installment Loans -
Home Equity 1,380 872 373
Installment Loans -
Auto 934 833 810
Installment Loans -
Other 290 246 91
---------- ---------- ----------
Total Nonperforming Loans 10,665 7,644 5,858
---------- ---------- ----------
Other Real Estate Owned 1,393 681 305
Nonperforming Assets $ 12,058 $ 8,325 $ 6,163
========== ========== ==========
Net charge-offs
(year to date) $ 2,369 $ 3,114 $ 1,639
Net charge-offs to average
loans (annualized) 0.19% 0.16% 0.16%
Nonperforming Loans/Gross
Loans 0.41% 0.37% 0.30%
Allowance for Loan
Losses/Nonperforming Loans 311.59% 351.01% 454.93%
Loans/Total Deposits 104.09% 100.81% 96.53%
Allowance for Loan
Losses/Total Loans 1.29% 1.31% 1.35%
Financial Ratios
----------------
Book Value per Share $ 18.51 $ 16.04 $ 15.25
Tangible
Capital/Tangible Asset 5.34% 5.91% 5.91%
Tangible
Capital/Tangible Asset
(proforma to include
the deductibility of
goodwill) 5.79% 6.45% 6.47%
Tangible Book Value
per Share $ 10.71 $ 11.64 $ 11.05
Tangible Book Value
per Share (proforma to
include the
deductibility of
goodwill) $ 11.60 $ 12.70 $ 12.09
Capital Adequacy
----------------
Tier one leverage capital
ratio (1) 7.70% 8.02% 7.94%
(1) Estimated number for June 30, 2008
Certain amounts in prior year financial statement have been
reclassified to conform to the current year's presentation