ROCKLAND, Mass.--(BUSINESS WIRE)--
Independent Bank Corp., (NASDAQ: INDB), parent of Rockland Trust
Company, today announced net income of $660,000 for the second quarter
of 2009. This compares with net income of $6.4 million for the first
quarter of 2009. The decrease in net income from the prior quarter is
primarily due to merger and acquisition expenses associated with the
Benjamin Franklin Bancorp. Inc. acquisition, increased FDIC deposit
premium fees, and other-than-temporary impairment charges on investment
securities partially offset by a gain realized on certain exited
interest rate hedge positions.
On a diluted earnings per share basis the Company reported a loss of
($0.19) for the quarter as compared to earnings of $0.32 in the linked
quarter period. The Company's repayment of the United States Treasury
Department's ("Treasury") Capital Purchase Program ("CPP") preferred
stock resulted in a one time $4.4 million deemed dividend charge, which
decreased net income available to common shareholders by $0.22 per
diluted share, negatively impacting the second quarter's performance.
Second quarter 2009 results included certain items which management
considers non-core. These items, net of tax, are merger and acquisition
expenses of $8.7 million, a gain of $2.4 million on the sale of
derivatives and the aforementioned deemed preferred stock dividend of
$4.4 million. Excluding these items, net operating earnings were $6.8
million, or $0.33 on a per diluted share basis, for the quarter ended
June 30, 2009 compared to net operating earnings and diluted earnings
per share for the quarters which ended March 31, 2009 and June 30, 2008
of $5.3 million and $0.33, and $7.0 million and $0.43, respectively. A
reconciliation table which sets forth the computation of net operating
earnings is included in the financial statement schedules attached to
this press release.
Christopher Oddleifson, President and Chief Executive Officer,
stated, "Rockland Trust produced solid operating earnings driven by our
core businesses, most notably commercial loan growth. The second quarter
was very eventful in terms of accomplishments and moving the Rockland
Trust franchise forward. We finalized the Benjamin Franklin acquisition,
uniting two healthy, growing banks. We also were among a select group to
be awarded federal tax credits for community lending programs. While the
overall economic environment remains challenging, our strong capital
base and long-term disciplined management approach position us well
going forward."
BENJAMIN FRANKLIN ACQUISITION
On April 10, 2009 the Company announced it had successfully closed its
acquisition of Benjamin Franklin Bancorp. (the "Acquisition") adding 11
branches, $687.4 million in loans and $701.4 million in deposits to its
franchise. Below is a summary of the net assets acquired, at fair value,
from Ben Franklin.
Net Assets Acquired
Assets:
Cash $ 98,089
Investments 147,548
Loans 687,444
Premises and Equipment 5,919
Goodwill 12,193
Core Deposit & Other Intangible 7,616
Other Assets 47,639
Total Assets Acquired 1,006,448
Liabilities:
Deposits 701,407
Borrowings 196,105
Other Liabilities 24,433
Total Liabilities Assumed 921,945
Purchase Price $ 84,503
BALANCE SHEET
Total assets increased by $688.6 million, or 18.3%, to $4.5 billion at
June 30, 2009 as compared to March 31, 2009. The acquired balance sheet
was reduced as management determined it appropriate to de-lever most of
the positions in investment securities and borrowings resulting in a
smaller post-acquisition balance sheet.
Total loans were $3.4 billion and $2.7 billion at June 30, 2009 and
March 31, 2009 compared to $2.6 billion at June 30, 2008. During the
second quarter of 2009 loans grew by $700.4 million, or 26.2%. The
Acquisition added $687.4 million in loan growth at the date of
Acquisition. Organic loan growth was concentrated in the commercial and
commercial real estate category, 15.5% on an annualized basis driven by
strong commercial and industrial growth, while the residential and
indirect auto lending portfolios contracted. The following table
summarizes loan growth for the quarter.
June 30, March 31, Ben Organic
2009 2009 Acquisition Growth/(Loss)
(Dollars in Thousands)
Loans
Commercial and
Commercial Real Estate $ 2,053,460 $ 1,588,861 $ 402,947 $ 61,652
Loans
Small Business 86,378 87,137 - (759)
Residential Real 639,355 438,258 241,239 (40,142)
Estate
Consumer - Home Equity 458,435 411,097 41,125 6,213
Consumer - Other 140,378 152,222 2,133 (13,977)
Total Loans $ 3,378,006 $ 2,677,575 $ 687,444 $ 12,987
Securities increased by $82.5 million, or 13.9%, during the quarter
ended June 30, 2009, primarily attributable to the Acquisition and
purchases made during the quarter.
Total deposits increased by $671.2 million, or 25.3%, during the quarter
ending June 30, 2009, as compared to March 31, 2009. Of the increase,
$701.4 million is a result of the Benjamin Franklin acquired deposits
before any anticipated run-off, partially offset by reductions in the
time deposit category to manage the Company's cost of funds. The
following table summarizes deposit growth during the quarter ended June
30, 2009.
June 30, March 31, Ben Organic
2009 2009 Acquisition Growth/(Loss)
(Dollars in Thousands)
Deposits
Demand Deposits $ 699,173 $ 541,038 $ 122,391 $ 35,744
Savings and Interest 987,202 765,258 172,263 49,681
Checking Accounts
Money Market 667,665 536,808 164,369 (33,512)
Time Certificates of 970,903 810,637 242,384 (82,118)
Deposit
Total Deposits $ 3,324,943 $ 2,653,741 $ 701,407 $ (30,205)
Borrowings decreased by $4.5 million, or (0.7%), during the quarter
ending June 30, 2009, as compared to March 31, 2009.
Stockholders' equity at June 30, 2009 totaled $397.6 million as compared
to $393.5 million at March 31, 2009. The Tier 1 leverage capital ratio
at June 30, 2009 was 7.60%, maintaining the Company's well-capitalized
position.
CAPITAL PURCHASE PROGRAM REPAYMENT
On April 22, 2009 the Company repaid $78.2 million in preferred stock to
the U.S. Treasury in conjunction with its exit from the Capital Purchase
Program. As a result, during the quarter the Company recorded a $4.4
million non-cash deemed dividend, amounting to $0.22 per diluted share,
associated with the repayment of the preferred stock to the U.S.
Treasury and the remaining $141,000 preferred stock dividend for the
quarter. The Company also repurchased a common stock warrant issued to
the Treasury for $2.2 million, the cost of which, is recorded as a
reduction in capital, in accordance with Generally Accepted Accounting
Principles.
NET INTEREST INCOME
Comparing the quarter ended June 30, 2009 to the quarter ended March 31,
2009, net interest income increased $9.1 million, or 30.4% attributable
to a larger balance sheet and an expanded net interest margin. The net
interest margin for the comparable periods was 3.88% and 3.57%,
respectively. The primary reason for these increases is active
management of deposit costs and purchase accounting adjustments.
NON-INTEREST INCOME
The Company recorded non-interest income of $13.2 million during the
second quarter of 2009, an increase of $2.8 million when compared to the
quarter ended March 31, 2009. The change in non-interest income is
primarily attributable to the Acquisition and is composed of the
following:
-- Service charges on deposit accounts increased by $610,000, or 16.7%.
-- Wealth management revenue increased by $380,000, or 16.3%, this increase
is mainly due to tax preparation fees. Assets under management remain
stable at $1.2 billion.
-- Mortgage banking income increased by $840,000, or 72.7%, as a result of
increased sales activity and increased originations due to low interest
rates. The balance of the mortgage servicing asset was $2.7 million and
$1.5 million at June 30, 2009 and March 31, 2009, respectively, and
loans serviced amounted to $380.9 million and $237.9 million,
respectively.
-- During the second quarter of 2009, the Company recorded a $3.8 million
gain, primarily a result of unwinding certain borrowings and their
associated hedge positions as a result of strong balance sheet
liquidity. The Company recognized $1.4 million in gains on the sale of
securities during the first quarter of 2009.
-- The Company deemed certain pooled trust preferred securities and one
private collateralized mortgage backed security to be
other-than-temporarily impaired ("OTTI") in the quarter. The Company
recorded total credit related impairment charges through earnings of
$1.7 million, pre-tax. The Company recorded no OTTI during the first
quarter of 2009.
-- Other non-interest income increased by $245,000, or (19.9%).
NON-INTEREST EXPENSE
The Company recorded non-interest expense of $46.6 million in the second
quarter of 2009, an increase of $18.2 million, or 64.5%, when compared
to the quarter ended March 31, 2009.
-- Salaries and employee benefits increased by $2.3 million, or 15.3%,
primarily attributable to the Acquisition, commissions, and incentive
programs.
-- Occupancy and equipment expense increased by $431,000, or 11.6%, mainly
due to increases in rent and maintenance costs due to the acquired
locations.
-- The Company recorded merger and acquisition expenses of $10.8 million
and $1.5 million for the quarters ended June 30, 2009 and March 31,
2009, associated with the Acquisition, consistent with new accounting
standards effective January 1, 2009 regarding business combinations.
-- FDIC deposit insurance fees increased by $3.3 million largely due to a
$2.1 million, or $0.06 per share (net of tax) special assessment imposed
to replenish the Deposit Insurance Fund.
-- Other non-interest expense increased by $2.7 million, or 43.7%, which is
primarily attributable to the Acquisition.
The Company reported a return on average assets and a return on average
common equity in the second quarter of 2009 of (0.35%) and (3.95%),
respectively, as compared to 0.56% and 6.59% for the quarter ended March
31, 2009.
ASSET QUALITY
The allowance for loan losses was $40.1 million at June 30, 2009 as
compared to $37.5 million at March 31, 2009. Nonperforming loans totaled
$31.5 million, or 0.93% of total loans at June 30, 2009, as compared to
$29.0 million, or 1.08% of total loans at March 31, 2009. The Company's
allowance for loan losses as a percentage of loans was 1.19% and 1.40%
at June 30, 2009 and March 31, 2009, respectively, the decrease resulted
from the Acquisition and new accounting rules in effect in 2009.
Loans obtained in connection with the Acquisition have been accounted
for in accordance with Statement of Financial accounting Standards No.
141 (revised 2007), "Business Combinations" ("SFAS No. 141R"), and/or
Statement of Position 03-3, "Accounting for Certain Loans or Debt
Securities Acquired in a Transfer" ("SOP 03-3"), if the loan experienced
deterioration of credit quality at the time of Acquisition. Both SFAS
No. 141R and SOP 03-3 require that acquired loans be recorded at fair
value and prohibit the carry over of the related allowance for credit
losses. Determining the fair value of the acquired loans required
estimating cash flows expected to be collected on the loans.
Excluding loans acquired at fair value the reserve to loan ratio at June
30, 2009 was 1.49%, a 9 basis point increase from the quarter ended
March 31, 2009. The provision for loan losses was $4.5 million and $4.0
million, for the quarter ended June 30, 2009 and March 31, 2009,
respectively. Net charge-offs were $5.4 million and $3.6 million for the
periods ending June 30, 2009 and March 31, 2009, respectively.
NEW MARKETS TAX CREDIT AWARD
On May 27, 2009the United States Secretary of the Treasury announced
that Rockland Trust Community Development Corporation, a wholly-owned,
second-tier subsidiary of the Company, was awarded $50 million in tax
credit allocation authority under the federal New Markets Tax Credit
Program. The Company will be eligible to receive tax credits over a
seven year period totaling 39% of its award, or $19.5 million, as it
begins to invest capital into the subsidiary which will lend to
qualifying businesses in low income communities.
Christopher Oddleifson 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 10:00 a.m. Eastern
Time on Friday, July 24, 2009. 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: 431792. The web cast replay will be available until July 24,
2010 and the telephone replay will be available until August 4, 2009.
Independent Bank Corp., which has Rockland Trust Company as wholly-owned
bank subsidiary, currently has approximately $4.5 billion in assets.
Rockland Trust offers a wide range of commercial banking products and
services, retail banking products and services, business and consumer
loans, insurance products and services, and investment management
services. To discover why Rockland Trust is the bank Where Each
Relationship Matters(R), visit 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)
% Change % Change
CONSOLIDATED June 2009 June 2009
BALANCE June 30, March 31, June 30, vs. vs.
SHEETS
2009 2009 2008 March June 2008
2009
Assets
Cash and Due $ 75,905 $ 70,554 $ 89,719 7.58 % -15.40 %
From Banks
Fed Funds
Sold and 6,159 149,729 100 -95.89 % 6059.00 %
Short Term
Investments
Securities
Trading 22,926 2,580 3,185 788.60 % 619.81 %
Assets
Securities
Available for 581,241 558,541 426,894 4.06 % 36.16 %
Sale
Securities
Held to 70,241 30,804 33,895 128.03 % 107.23 %
Maturity
Total 674,408 591,925 463,974 13.93 % 45.35 %
Securities
Loans
Commercial
and 364,570 286,178 261,384 27.39 % 39.48 %
Industrial
Commercial 1,482,321 1,136,411 1,062,902 30.44 % 39.46 %
Real Estate
Commercial 206,569 166,272 170,373 24.24 % 21.25 %
Construction
Small 86,378 87,137 86,430 -0.87 % -0.06 %
Business
Total 2,139,838 1,675,998 1,581,089 27.68 % 35.34 %
Commercial
Residential 599,166 406,119 417,304 47.53 % 43.58 %
Real Estate
Residential 15,323 9,727 9,292 57.53 % 64.91 %
Construction
Residential
Loans Held 24,866 22,412 9,171 10.95 % 171.14 %
for Sale
Total 639,355 438,258 435,767 45.89 % 46.72 %
Residential
Consumer - 458,435 411,097 374,580 11.52 % 22.39 %
Home Equity
Consumer - 105,064 116,375 141,046 -9.72 % -25.51 %
Auto
Consumer - 35,314 35,847 42,783 -1.49 % -17.46 %
Other
Total 598,813 563,319 558,409 6.30 % 7.24 %
Consumer
Total Loans 3,378,006 2,677,575 2,575,265 26.16 % 31.17 %
Less -
Allowance for (40,068 ) (37,488 ) (33,231 ) 6.88 % 20.57 %
Loan Losses
Net Loans 3,337,938 2,640,087 2,542,034 26.43 % 31.31 %
Federal Home
Loan Bank 36,357 24,603 24,603 47.77 % 47.77 %
Stock
Bank Premises 42,145 36,733 34,749 14.73 % 21.28 %
and Equipment
Goodwill and
Core Deposit 144,865 125,726 126,914 15.22 % 14.14 %
Intangible
Other Assets 137,282 127,082 105,365 8.03 % 30.29 %
Total Assets $ 4,455,059 $ 3,766,439 $ 3,387,458 18.28 % 31.52 %
Liabilities
and
Stockholders'
Equity
Deposits
Demand $ 699,173 $ 541,038 $ 564,060 29.23 % 23.95 %
Deposits
Savings and
Interest 987,202 765,258 696,457 29.00 % 41.75 %
Checking
Accounts
Money Market 667,665 536,808 478,852 24.38 % 39.43 %
Time
Certificates 970,903 810,637 734,792 19.77 % 32.13 %
of Deposit
Total 3,324,943 2,653,741 2,474,161 25.29 % 34.39 %
Deposits
Borrowings
Federal Home
Loan Bank 392,968 408,480 357,949 -3.80 % 9.78 %
Borrowings
Fed Funds
Purchased and
Assets Sold
Under
Repurchase 179,317 169,616 157,114 5.72 % 14.13 %
Agreements
Junior
Subordinated 61,857 61,857 61,857 0.00 % 0.00 %
Debentures
Subordinated 30,000 30,000 - 0.00 % 0.00 %
Debentures
Other 3,772 2,442 495 54.46 % 662.02 %
Borrowings
Total 667,914 672,395 577,415 -0.67 % 15.67 %
Borrowings
Total
Deposits and 3,992,857 3,326,136 3,051,576 20.04 % 30.85 %
Borrowings
Other 64,642 46,780 35,880 38.18 % 80.16 %
Liabilities
Stockholders'
Equity
Preferred - 73,578 - n/a n/a
Stock
Common Stock 209 163 163 28.22 % 28.22 %
Additional
Paid in 224,594 142,140 137,201 58.01 % 63.70 %
Capital
Retained 176,012 184,387 171,337 -4.54 % 2.73 %
Earnings
Accumulated
Other
Comprehensive (3,255 ) (6,745 ) (8,699 ) -51.74 % -62.58 %
Loss, Net of
Tax
Total
Stockholders' 397,560 393,523 300,002 1.03 % 32.52 %
Equity
Total
Liabilities
and $ 4,455,059 $ 3,766,439 $ 3,387,458 18.28 % 31.52 %
Stockholders'
Equity
CONSOLIDATED STATEMENTS OF Three Months Ended
INCOME
% Change % Change
June 30, March 31, June 30, Jun 09 vs June 09
vs.
2009 2009 2008 Mar. 09 June 08
INTEREST INCOME
Interest on Fed Funds Sold and $ 70 $ 198 $ 15 -64.65 % 366.67 %
Short Term Investments
Interest and Dividends on 7,636 7,267 5,639 5.08 % 35.41 %
Securities
Interest on Loans 45,100 35,946 38,657 25.47 % 16.67 %
Total Interest Income 52,806 43,411 44,311 21.64 % 19.17 %
INTEREST EXPENSE
Interest on Deposits 8,441 8,407 9,539 0.40 % -11.51 %
Interest on Borrowed Funds 5,265 5,015 4,929 4.99 % 6.82 %
Total Interest Expense 13,706 13,422 14,468 2.12 % -5.27 %
Net Interest Income 39,100 29,989 29,843 30.38 % 31.02 %
Less - Provision for Loan 4,468 4,000 1,902 11.70 % 134.91 %
Losses
Net Interest Income after 34,632 25,989 27,941 33.26 % 23.95 %
Provision for Loan Losses
NON-INTEREST INCOME
Service Charges on Deposit 4,258 3,648 3,963 16.72 % 7.44 %
Accounts
Wealth Management 2,710 2,330 3,114 16.31 % -12.97 %
Mortgage Banking Income 1,996 1,156 960 72.66 % 107.92 %
BOLI Income 683 729 637 -6.31 % 7.22 %
FHLB Stock - - 244 n/a -100.00 %
Net Gain/(Loss) on Sale of 3,753 1,379 - 172.15 % n/a
Securities and Derivatives
Other-Than-Temporary-Impairment (1,653 ) - (1,850 ) n/a -10.65 %
on Securities
Other Non-Interest /Income 1,476 1,231 838 19.90 % 76.13 %
Total Non-Interest Income 13,223 10,473 7,906 26.26 % 67.25 %
NON-INTEREST EXPENSE
Salaries and Employee Benefits 17,134 14,859 14,945 15.31 % 14.65 %
Occupancy and Equipment 4,136 3,705 3,235 11.63 % 27.85 %
Expenses
Data Processing and Facilities 1,604 1,416 1,421 13.28 % 12.88 %
Management
Merger & Acquisition Expense 10,844 1,538 376 605.07 % 2784.04 %
FDIC assessment 3,852 536 53 618.66 % 7167.92 %
Other Non-Interest Expense 8,986 6,253 8,032 43.71 % 11.88 %
Total Non-Interest Expense 46,556 28,307 28,062 64.47 % 65.90 %
INCOME BEFORE INCOME TAXES 1,299 8,155 7,785 -84.07 % -83.31 %
PROVISION FOR INCOME TAXES 639 1,767 1,965 -63.84 % -67.48 %
NET INCOME $ 660 $ 6,388 $ 5,820 -89.67 % -88.66 %
PREFERRED STOCK DIVIDEND $ 4,525 $ 1,173 $ - 285.76 % n/a
NET (LOSS)/INCOME AVAILABLE TO $ (3,865 ) $ 5,215 $ 5,820 -174.11 % -166.41 %
COMMON SHAREHOLDERS
BASIC EARNINGS PER SHARE $ (0.19 ) $ 0.32 $ 0.36 -159.38 % -152.78 %
DILUTED EARNINGS PER SHARE $ (0.19 ) $ 0.32 $ 0.36 -159.38 % -152.78 %
BASIC AVERAGE SHARES 20,360,046 16,285,955 16,268,009 25.02 % 25.15 %
DILUTED AVERAGE SHARES 20,385,609 16,303,836 16,346,749 25.04 % 24.71 %
PERFORMANCE RATIOS:
Net Interest Margin (FTE) 3.88 % 3.57 % 4.01 % 8.68 % 3.24 %
Return on Average Assets -0.35 % 0.56 % 0.70 % -162.50 % -150.00 %
Return on Average Common Equity -3.95 % 6.59 % 7.67 % -159.94 % -151.50 %
RECONCILIATION TABLE - NON-GAAP
FINANCIAL INFORMATION
NET INCOME AVAILABLE TO COMMON $ (3,865 ) $ 5,215 $ 5,820 -174.11 % -166.41 %
SHAREHOLDERS (GAAP)
Non-Interest Income Components
(Less)/Add - Net (Gain)/ Loss
on Sale of Securities and (2,439 ) (896 ) -
Derivatives, net of tax
Non-Interest Expense Components
Add - Merger and Acquisition 8,676 1,000 244
Expenses, net of tax
Add - Litigation Reserve, net - - 975
of tax
Deemed Preferred Stock Dividend 4,384 - -
NET OPERATING EARNINGS $ 6,756 $ 5,319 $ 7,039 27.02 % -4.02 %
Diluted Earnings Per Share, on $ 0.33 $ 0.33 $ 0.43 0.00 % -23.26 %
an Operating Basis
CONSOLIDATED STATEMENTS OF INCOME
Six Months % Change
June 30, June 30, June 2009 vs.
2009 2008 June-08
INTEREST INCOME
Interest on Fed Funds Sold and $ 268 $ 35 665.71 %
Short Term Investments
Interest and Dividends on 14,902 11,169 33.42 %
Securities
Interest on Loans 81,046 73,825 9.78 %
Total Interest Income 96,216 85,029 13.16 %
INTEREST EXPENSE
Interest on Deposits 16,848 19,854 -15.14 %
Interest on Borrowed Funds 10,280 9,928 3.55 %
Total Interest Expense 27,128 29,782 -8.91 %
Net Interest Income 69,088 55,247 25.05 %
Less - Provision for Loan Losses 8,468 3,245 160.96 %
Net Interest Income after 60,620 52,002 16.57 %
Provision for Loan Losses
NON-INTEREST INCOME
Service Charges on Deposit 7,905 7,598 4.04 %
Accounts
Wealth Management 5,040 5,790 -12.95 %
Mortgage Banking Income 3,153 2,073 52.10 %
BOLI Income 1,413 1,158 22.02 %
FHLB Stock - 606 -100.00 %
Net Gain/(Loss) on Sale of 5,133 (609 ) -942.86 %
Securities and Derivatives
Other-Than-Temporary-Impairment (1,653 ) (1,850 ) -10.65 %
on Securities
Other Non-Interest (Loss)/Income 2,706 1,740 55.52 %
Total Non-Interest Income 23,697 16,506 43.57 %
NON-INTEREST EXPENSE
Salaries and Employee Benefits 31,993 29,088 9.99 %
Occupancy and Equipment Expenses 7,841 6,138 27.75 %
Data Processing and Facilities 3,020 2,705 11.65 %
Management
Merger & Acquisition Expense 12,382 1,120 1005.54 %
WorldCom Bond Loss Recovery - (418 ) -100.00 %
FDIC assessment 4,388 111 3853.15 %
Other Non-Interest Expense 15,240 13,350 14.16 %
Total Non-Interest Expense 74,864 52,094 43.71 %
INCOME BEFORE INCOME TAXES 9,453 16,414 -42.41 %
PROVISION FOR INCOME TAXES 2,406 4,286 -43.86 %
NET INCOME $ 7,047 $ 12,128 -41.89 %
PREFERRED STOCK DIVIDEND $ 5,698 $ - n/a
NET INCOME AVAILABLE TO COMMON $ 1,349 $ 12,128 -88.88 %
SHAREHOLDERS
BASIC EARNINGS PER SHARE $ 0.07 $ 0.80 -91.25 %
DILUTED EARNINGS PER SHARE $ 0.07 $ 0.79 -91.14 %
BASIC AVERAGE SHARES 18,345,457 15,193,327
DILUTED AVERAGE SHARES 18,366,798 15,269,941
PERFORMANCE RATIOS:
Net Interest Margin (FTE) 3.74 % 3.94 % -5.08 %
Return on Average Assets 0.07 % 0.78 % -91.03 %
Return on Average Common Equity 0.76 % 8.73 % -91.29 %
RECONCILIATION TABLE - NON-GAAP
FINANCIAL INFORMATION
NET INCOME AVAILABLE TO COMMON $ 1,349 $ 12,128 -88.88 %
SHAREHOLDERS (GAAP)
Non-Interest Income Components
(Less)/Add - Net (Gain)/ Loss on
Sale of Securities and (3,336 ) 396
Derivatives, net of tax
Non-Interest Expense Components
Add - Merger and Acquisition 9,675 728
Expenses, net of tax
Add - Litigation Reserve, net of - 975
tax
Less - WorldCom Bond Loss - (272 )
Recovery, net of tax
Deemed Preferred Stock Dividend 4,384 -
NET OPERATING EARNINGS $ 12,072 $ 13,955 -13.49 %
Diluted Earnings Per Share, on an $ 0.66 $ 0.91 -27.47 %
Operating Basis
RECONCILIATION TABLE - NON-GAAP FINANCIAL INFORMATION
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.
Three Months Ended Six Months Ended
% Change % Change % Change
June 30, March 31, June 30, June June 2009 June 30, June 30, June 2009
2009 vs. vs. vs.
2009 2009 2008 March June 2008 2009 2008 June 2008
2009
Non-Interest Income GAAP $ 13,223 $ 10,473 $ 7,906 26.26 % 67.25 % $ 23,697 $ 16,506 43.57 %
(Less)/Add - Net (Gain)/ Loss (3,753 ) (1,379 ) - 172.15 % n/a (5,133 ) 609 -942.86 %
on Sale of Securities
Add -
Other-Than-Temporary-Impairment 1,653 - 1,850 n/a -10.65 % 1,653 1,850 -10.65 %
on Securities
Non-Interest Income as Adjusted $ 11,123 $ 9,094 $ 9,756 22.31 % 14.01 % $ 20,217 $ 18,965 6.60 %
Non-Interest Expense GAAP $ 46,556 $ 28,307 $ 28,062 64.47 % 65.90 % $ 74,864 $ 52,094 43.71 %
Less - Merger & Acquisition (10,844 ) (1,538 ) (376 ) 605.07 % 2784.04 % (12,382 ) (1,120 ) 1005.54 %
Expenses
Less - Litigation Reserve - - (1,500 ) n/a n/a - (1,500 ) -100.00 %
Add - WorldCom Bond Loss - - - n/a n/a - 418 -100.00 %
Recovery
Non-Interest Expense as $ 35,712 $ 26,769 $ 26,186 33.41 % 36.38 % $ 62,482 $ 49,892 25.23 %
Adjusted
ASSET QUALITY
For the Period Ending
June 30, March 31, June 30,
2009 2009 2008
(Dollars in Thousands, Except Per
Share Data)
Nonperforming Loans
Commercial & Industrial Loans $ 4,808 $ 3,884 $ 403
Small Business Loans 1,743 1,638 935
Commercial Real Estate Loans 12,505 10,833 2,263
Residential Real Estate Loans 9,865 8,521 4,460
Installment Loans - Home Equity 1,695 2,940 1,380
Installment Loans - Auto 718 665 934
Installment Loans - Other 157 479 290
Total Nonperforming Loans $ 31,491 28,960 10,665
Non-Accrual Securities 3,120 1,698 -
Other Assets in Possession 270 224 -
Other Real Estate Owned 6,102 1,764 1,393
Nonperforming Assets 40,983 32,646 12,058
Nonperforming Loans/Gross Loans 0.93 % 1.08 % 0.41 %
Allowance for Loan 127.24 % 129.45 % 311.59 %
Losses/Nonperforming Loans
Gross Loans/Total Deposits 101.60 % 100.90 % 104.09 %
Allowance for Loan Losses/Total 1.19 % 1.40 % 1.29 %
Loans
Net charge-offs $ 1,882 $ 3,560 $ 1,280
(quarter-to-date)
Net charge-offs to average 0.23 % 0.53 % 0.20 %
loans (annualized)
Financial Ratios
Book Value per Common Share $ 19.01 $ 19.64 $ 18.44
Tangible Equity Ratio:
Tangible Common 5.86 % 5.33 % 5.31 %
Capital/Tangible Assets
Tangible Common
Capital/Tangible Asset
(proforma to include
the tax deductibility of
goodwill and exclude impact of 6.33 % 5.83 % 5.75 %
CPP) - Non-GAAP
Tangible Common Book Value per
Share (proforma to include
the tax deductibility of
goodwill and exclude impact of $ 13.11 $ 12.81 $ 11.53
CPP) - Non-GAAP
Capital Adequacy
Tier one leverage capital ratio 7.60 % 9.77 % 7.61 %
(1)
(1) Estimated number for June
30, 2009
INDEPENDENT BANK CORP.
SUPPLEMENTAL FINANCIAL INFORMATION
CONSOLIDATED
AVERAGE BALANCE
SHEETS AND Three Months Ended
AVERAGE RATE
DATA
(Unaudited -
Dollars in June 30, 2009 March 31, 2009 June 30, 2008
Thousands)
Interest Interest Interest
Average Earned/ Yield/ Average Earned/ Yield/ Average Earned/ Yield/
Balance Paid Rate Balance Paid Rate Balance Paid Rate
Interest-Earning
Assets:
Federal Funds
Sold and Short $ 86,883 $ 70 0.32 % $ 121,394 $ 198 0.65 % $ 754 $ 15 7.96 %
Term Investments
Securities:
Trading Assets 13,965 44 1.26 % 2,706 25 3.70 % 3,446 39 4.53 %
Taxable
Investment 632,587 7,370 4.66 % 565,797 6,937 4.90 % 420,204 5,126 4.88 %
Securities
Non-taxable
Investment 20,950 342 6.53 % 30,161 469 6.22 % 41,722 730 7.00 %
Securities (1)
Total 667,502 7,756 4.65 % 598,664 7,431 4.97 % 465,372 5,895 5.07 %
Securities:
Loans (1) 3,300,169 45,229 5.48 % 2,667,073 36,065 5.41 % 2,550,066 38,768 6.08 %
Total
Interest-Earning $ 4,054,554 $ 53,055 5.23 % $ 3,387,131 $ 43,694 5.16 % $ 3,016,192 $ 44,678 5.93 %
Assets
Cash and Due 77,263 60,079 67,974
from Banks
Federal Home 35,065 24,603 24,603
Loan Bank Stock
Other Assets 299,108 251,307 228,552
Total Assets $ 4,465,990 $ 3,723,120 $ 3,337,321
Interest-bearing
Liabilities:
Deposits:
Savings and
Interest $ 964,929 $ 1,326 0.55 % $ 740,020 $ 996 0.54 % $ 691,150 $ 1,493 0.86 %
Checking
Accounts
Money Market 666,232 1,713 1.03 % 518,438 1,696 1.31 % 482,638 2,124 1.76 %
Time Deposits 974,449 5,402 2.22 % 831,196 5,715 2.75 % 739,389 5,922 3.20 %
Total
interest-bearing $ 2,605,610 $ 8,441 1.30 % $ 2,089,654 $ 8,407 1.61 % $ 1,913,177 $ 9,539 1.99 %
deposits:
Borrowings:
Federal Home
Loan Bank $ 449,311 $ 2,972 2.65 % $ 410,126 $ 2,675 2.61 % $ 330,881 $ 2,762 3.34 %
Borrowings
Federal Funds
Purchased and
Assets Sold
Under Repurchase 173,992 812 1.87 % 172,884 856 1.98 % 144,012 1,116 3.10 %
Agreement
Junior
Subordinated 61,857 940 6.08 % 61,857 947 6.12 % 61,857 989 6.40 %
Debentures
Subordinated 30,000 541 7.21 % 30,000 537 7.16 % - - -
Debentures
Other Borrowings 2,105 - 0.00 % 1,772 - 0.00 % 10,757 62 2.31 %
Total 717,265 5,265 2.94 % 676,639 5,015 2.96 % 547,507 4,929 3.60 %
Borrowings:
Total
Interest-Bearing $ 3,322,875 $ 13,706 1.65 % $ 2,766,293 $ 13,422 1.94 % $ 2,460,684 $ 14,468 2.35 %
Liabilities
Demand Deposits 673,448 530,425 547,048
Other 61,582 42,405 26,114
Liabilities
Total $ 4,057,905 $ 3,339,123 $ 3,033,846
Liabilities
Stockholders' 408,085 383,997 303,475
Equity
Total
Liabilities and $ 4,465,990 $ 3,723,120 $ 3,337,321
Stockholders'
Equity
Net Interest $ 39,349 $ 30,272 $ 30,210
Income
Interest Rate 3.58 % 3.22 % 3.58 %
Spread (2)
Net Interest 3.88 % 3.57 % 4.01 %
Margin (3)
Supplemental
Information:
Total Deposits,
including Demand $ 3,279,058 $ 8,441 $ 2,620,079 $ 8,407 $ 2,460,225 $ 9,539
Deposits
Cost of Total 1.03 % 1.28 % 1.55 %
Deposits
Total Funding
Liabilities, $ 3,996,323 $ 13,706 $ 3,296,718 $ 13,422 $ 3,007,732 $ 14,468
including Demand
Deposits
Cost of Total
Funding 1.37 % 1.63 % 1.92 %
Liabilities
(1) The total amount of adjustment to present interest income and yield on a fully tax-equivalent
basis is $249, $283, and $367 for the three months ended June 30, 2009, March 31, 2009, and June 30, 2008,
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.
Six Months Ended
(Unaudited -
Dollars in June 30, 2009 June 30, 2008
Thousands)
Interest Interest
Average Earned/ Yield/ Average Earned/ Yield/
Balance Paid Rate Balance Paid Rate
Interest-Earning
Assets:
Federal Funds
Sold and Short $ 104,043 $ 268 0.52 % $ 689 $ 35 10.16 %
Term Investments
Securities:
Trading Assets 8,367 69 1.65 % 3,012 66 4.38 %
Taxable
Investment 599,376 14,307 4.77 % 412,262 10,150 4.92 %
Securities
Non-taxable
Investment 25,530 809 6.34 % 43,778 1,466 6.70 %
Securities (1)
Total Securities: 633,273 15,185 4.80 % 459,052 11,682 5.09 %
Loans (1) 2,985,370 81,294 5.45 % 2,378,702 74,053 6.23 %
Total
Interest-Earning $ 3,722,686 $ 96,747 5.20 % $ 2,838,443 $ 85,770 6.04 %
Assets
Cash and Due from 68,718 64,286
Banks
Federal Home Loan 29,863 22,033
Bank Stock
Other Assets 275,340 199,440
Total Assets $ 4,096,607 $ 3,124,202
Interest-bearing
Liabilities:
Deposits:
Savings and
Interest Checking $ 853,096 $ 2,322 0.54 % $ 643,469 $ 3,084 0.96 %
Accounts
Money Market 592,743 3,409 1.15 % 474,349 4,702 1.98 %
Time Deposits 903,218 11,117 2.46 % 673,394 12,068 3.58 %
Total
interest-bearing $ 2,349,057 $ 16,848 1.43 % $ 1,791,212 $ 19,854 2.22 %
deposits:
Borrowings:
Federal Home Loan $ 429,827 $ 5,647 2.63 % $ 315,730 $ 5,704 3.61 %
Bank Borrowings
Federal Funds
Purchased and
Assets Sold
Under Repurchase 173,441 1,668 1.92 % 141,644 2,270 3.21 %
Agreement
Junior
Subordinated 61,857 1,887 6.10 % 58,458 1,848 6.32 %
Debentures
Subordinated 30,000 1,078 7.19 % - - n/a
Debentures
Other Borrowings 1,939 - 0.00 % 7,597 106 2.79 %
Total Borrowings: 697,064 10,280 2.95 % 523,429 9,928 3.79 %
Total
Interest-Bearing $ 3,046,121 $ 27,128 1.78 % $ 2,314,641 $ 29,782 2.57 %
Liabilities
Demand Deposits 602,331 511,033
Other Liabilities 52,048 20,793
Total Liabilities $ 3,700,500 $ 2,846,467
Stockholders' 396,107 277,735
Equity
Total Liabilities
and Stockholders' $ 4,096,607 $ 3,124,202
Equity
Net Interest $ 69,619 $ 55,988
Income
Interest Rate 3.42 % 3.47 %
Spread (2)
Net Interest 3.74 % 3.94 %
Margin (3)
Supplemental
Information:
Total Deposits,
including Demand $ 2,951,388 $ 16,848 $ 2,302,245 $ 19,854
Deposits
Cost of Total 1.14 % 1.72 %
Deposits
Total Funding
Liabilities, $ 3,648,452 $ 27,128 $ 2,825,674 $ 29,782
including Demand
Deposits
Cost of Total
Funding 1.49 % 2.11 %
Liabilities
(1) The total amount of adjustment to present interest income and yield on a
fully tax-equivalent
basis is $531 and $741 for the six months ended June 30, 2009, and June 30,
2008, 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.
Certain amounts in prior year financial statement have been reclassified to
conform to the current year's presentation.
Source: Independent Bank Corp.
Contact: Independent Bank Corp.
Chris Oddleifson, 781-982-6660
President and
Chief Executive Officer
or
Denis K. Sheahan, 781-982-6341
Chief Financial Officer