Solid Commercial Loan Growth and Expanded Net Interest Margin Drive
Performance
ROCKLAND, Mass.--(BUSINESS WIRE)--
Independent Bank Corp., (NASDAQ: INDB), parent of Rockland Trust
Company, today announced net income of $6.8 million for the third
quarter of 2009. This compares favorably with net income of $660,000 for
the second quarter of 2009 in which the Company had large merger and
acquisition expenses associated with the Benjamin Franklin Bancorp. Inc
acquisition and a special FDIC deposit insurance premium fee. The strong
increase in third quarter net income was reduced by other-than-temporary
securities impairment charges on certain pooled trust preferred
securities amounting to $5.1 million pre-tax, or $0.16 per diluted
share, recorded in the current period.
On a diluted earnings per share basis, the Company reported earnings of
$0.33 for the quarter as compared to a loss of ($0.19) for the previous
quarter period. The Company's repayment of the United States Treasury
Department's Capital Purchase Program 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.
Christopher Oddleifson, President and Chief Executive Officer, stated,
"Rockland Trust had an outstanding third quarter despite very difficult
economic conditions. While many financial services companies have
considerably curtailed their lending activity, our disciplined
commercial and home equity lending continues to drive strong growth for
the Company. Our solid capital foundation continues to allow us to
invest in the businesses and communities in which we operate. I'm also
happy to report that we have fully integrated the former Benjamin
Franklin franchise, and are looking forward to further increasing
business with those customers in this new geographic territory for
Rockland Trust."
BALANCE SHEET
Total assets decreased by $21.1 million, or (0.5%), to $4.4 billion at
September 30, 2009 as compared to June 30, 2009.
Total loans were $3.4 billion at September 30, 2009, an increase of
$34.4 million, or 1.0% from the prior quarter. The Company continued to
generate solid growth in the commercial and home equity loan portfolios
with annualized growth of 11.7% and 7.7%, respectively. This was offset
by a decline in the residential real estate and other consumer lending
categories.
Total deposits decreased by $44.0 million, or (1.3%), during the quarter
ending September 30, 2009, primarily due to decreases in municipal
deposits and non-core time deposits. The Company continued its focus on
core deposits, which represented 71.4% of total deposits at September
30, 2009.
Stockholders' equity at September 30, 2009 totaled $406.6 million as
compared to $397.6 million at June 30, 2009. The Tier 1 leverage capital
ratio at September 30, 2009 was 7.66%, maintaining the Company's
well-capitalized position.
NET INTEREST INCOME
Comparing the quarter ended September 30, 2009 to the quarter ended June
30, 2009, net interest income increased $1.8 million, or 4.6%,
attributable to an expanded net interest margin. The net interest margin
for the period was 4.05% compared to 3.88% in the prior period.
NON-INTEREST INCOME
The Company recorded non-interest income of $4.5 million during the
third quarter of 2009, a decrease of $8.8 million when compared to the
quarter ended June 30, 2009. The change in non-interest income is
composed of the following:
-- Service charges on deposit accounts increased by $355,000, or 8.3%.
-- Wealth management revenue decreased by $432,000, or (15.9%), as second
quarter revenue included a seasonal increase related to tax preparation
services. Assets under management in the wealth management division were
$1.2 billion at September 30, 2009.
-- Mortgage banking income decreased by $1.6 million, or (78.7%), due to a
decline in mortgage originations and a charge to the servicing asset,
reflecting refinancing activity. The balance of the mortgage servicing
asset was $2.2 million and $2.7 million at September 30, 2009 and June
30, 2009, respectively, and loans serviced amounted to $366.6 million
and $380.9 million, respectively.
-- During the third quarter of 2009, there were no gains or losses on the
sale of securities or derivatives. During the second quarter of 2009,
the Company recorded a $3.8 million gain, associated with the unwinding
of certain borrowings and their associated hedge positions as a result
of strong balance sheet liquidity.
-- The Company deemed certain pooled trust preferred securities and one
private mortgage-backed security to be other-than-temporarily impaired
("OTTI") during the third quarter. The Company recorded total credit
related impairment charges through earnings of $5.1 million and $1.7
million, pre-tax, for the quarters ending September 30, 2009 and June
30, 2009, respectively. The table below shows the remaining book value
of pooled and single issuer trust preferred securities and private
mortgage-backed securities as of September 30, 2009:
Total Credit
Amortized Unrealized Non-Credit Fair Related
As of September Cost* Loss OTTI Value Impairment
30, 2009
(Dollars in thousands)
Pooled Trust
Preferred
Securities
A Tranche $ 2,844 ($1,171 ) $ - $ 1,673 $ -
B Tranche 1,887 (1,231 ) - 656 -
C Tranche 6,133 - (5,656 ) 477 (3,261 )
D Tranche - - - - (4,471 )
Total Pooled
Trust Preferred 10,864 (2,402 ) (5,656 ) 2,806 (7,732 )
Securities
Single Issuer
Trust Preferred 5,000 (1,858 ) - 3,142 -
Securities -
AFS
Single Issuer
Trust Preferred 9,780 (806 ) - 8,974 -
Securities -
HTM
Private
Mortgage-Backed 16,593 (811 ) (908 ) 14,874 (298 )
Securities
$ 42,237 $ (5,877 ) $ (6,564 ) $ 29,795 $ (8,030 )
*Amortized cost reflects all credit related impairment through
September 30, 2009.
-- Other non-interest income increased by $102,000 or 6.9%.
NON-INTEREST EXPENSE
The Company recorded non-interest expense of $32.3 million in the third
quarter of 2009, a decrease of $14.3 million, or (30.6%), when compared
to the quarter ended June 30, 2009. Significant changes of non-interest
expense include the following:
-- Salaries and employee benefits increased by $593,000, or 3.5%, primarily
attributable to annual salary increases and increased medical and
pension expense.
-- Occupancy and equipment expense decreased by $151,000, or (3.7%).
-- The Company recorded merger and acquisition expenses associated with the
Benjamin Franklin Bancorp. Inc. acquisition of $41,000 and $10.8 million
for the quarters ended September 30, 2009 and June 30, 2009,
respectively.
-- FDIC deposit insurance fees decreased by $2.6 million, as the Company
recorded a $2.1 million special assessment imposed to replenish the
Deposit Insurance Fund during the second quarter of 2009.
-- Other non-interest expense decreased by $1.3 million, or (14.3%), which
is primarily attributable to the timing of advertising campaigns and a
reduction in other losses and charge-offs.
The Company reported a return on average assets and a return on average
common equity in the third quarter of 2009 of 0.62% and 6.73%,
respectively, as compared to (0.35%) and (3.95%) for the quarter ended
June 30, 2009.
ASSET QUALITY
The allowance for loan losses increased to $41.4 million at September
30, 2009 as compared to $40.1 million at June 30, 2009. Nonperforming
loans totaled $36.9 million, or 1.09% of total loans at September 30,
2009, as compared to $31.5 million, or 0.94% of total loans at June 30,
2009. The increase in non-performing loans was driven by the commercial
real estate category which increased $6.0 million from prior quarter and
was primarily due to one relationship. The Company's allowance for loan
losses as a percentage of loans was 1.22% and 1.19% at September 30,
2009 and June 30, 2009, respectively. These ratios are inclusive of
loans acquired at fair value.
The provision for loan losses was $4.4 million and $4.5 million for the
quarters ended September 30, 2009 and June 30, 2009, respectively. Net
charge-offs were $3.2 million and $1.9 million for the quarters ending
September 30, 2009 and June 30, 2009, respectively.
Christopher Oddleifson and Denis K. Sheahan, Chief Financial Officer, of
Independent Bank Corp. and Rockland Trust Company, will host a
conference call to discuss third quarter earnings at 10:00 a.m. Eastern
Time on Friday, October 23, 2009. Internet access to the call is
available on the Company's website at 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: 434060. The web cast replay will be available until October
23, 2010 and the telephone replay will be available until November 6,
2009.
Independent Bank Corp., which has Rockland Trust Company as a
wholly-owned bank subsidiary, has more than $4.4 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"). Operating earnings,
which is a non-GAAP financial measure, excludes gain or loss due to
items that management does not believe are related to its core banking
business, such as gains or losses on the sales of securities, merger and
acquisition expenses, and other items. The Company's management
uses operating earnings to measure the strength of the Company's core
banking business and to identify trends that may to some extent be
obscured by gains or losses which management deems not to be core to the
Company's operations. The Company has included information on
operating earnings because management believes that investors may find
it useful to have access to the same analytical tool used by management
and may also find that it facilitates the comparison of the Company to
other companies in the financial services industry. Non-GAAP
operating earnings should not be viewed as a substitute for operating
results determined in accordance with GAAP. An item which
management deems to be non-core and excludes when computing non-GAAP
operating earnings can be of substantial importance to the Company's
results for any particular quarter or year. The Company's
non-GAAP operating earnings are not 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 BALANCE SHEETS September June 30, September 30, Sept. 2009 Sept. 2009
30, vs. vs.
2009 2009 2008 June 2009 Sept. 2008
Assets
Cash and Due From Banks $ 65,514 $ 75,905 $ 92,752 -13.69 % -29.37 %
Fed Funds Sold and Short Term - 6,159 100 -100.00 % -100.00 %
Investments
Securities
Trading Assets 23,090 22,926 3,048 0.72 % 657.55 %
Securities Available for Sale 546,125 581,241 499,879 -6.04 % 9.25 %
Securities Held to Maturity 83,063 70,241 33,354 18.25 % 149.03 %
Total Securities 652,278 674,408 536,281 -3.28 % 21.63 %
Loans Held for Sale 14,160 24,866 5,511 -43.05 % 156.94 %
Loans
Commercial and Industrial 371,092 364,570 250,469 1.79 % 48.16 %
Commercial Real Estate 1,546,206 1,482,321 1,092,811 4.31 % 41.49 %
Commercial Construction 201,196 206,569 150,615 -2.60 % 33.58 %
Small Business 84,135 86,378 85,120 -2.60 % -1.16 %
Total Commercial 2,202,629 2,139,838 1,579,015 2.93 % 39.49 %
Residential Real Estate 576,575 599,166 420,809 -3.77 % 37.02 %
Residential Construction 14,783 15,323 12,868 -3.52 % 14.88 %
Total Residential 591,358 614,489 433,677 -3.76 % 36.36 %
Consumer - Home Equity 467,213 458,435 391,416 1.91 % 19.36 %
Consumer - Auto 92,093 105,064 134,866 -12.35 % -31.72 %
Consumer - Other 34,246 35,314 41,073 -3.02 % -16.62 %
Total Consumer 593,552 598,813 567,355 -0.88 % 4.62 %
Total Loans 3,387,539 3,353,140 2,580,047 1.03 % 31.30 %
Less - Allowance for Loan (41,357 ) (40,068 ) (33,287 ) 3.22 % 24.24 %
Losses
Net Loans 3,346,182 3,313,072 2,546,760 1.00 % 31.39 %
Federal Home Loan Bank Stock 36,357 36,357 24,603 0.00 % 47.77 %
Bank Premises and Equipment 41,963 42,145 35,246 -0.43 % 19.06 %
Goodwill and Core Deposit 144,152 144,865 126,412 -0.49 % 14.03 %
Intangible
Other Assets 133,397 137,282 109,570 -2.83 % 21.75 %
Total Assets $ 4,434,003 $ 4,455,059 $ 3,477,235 -0.47 % 27.52 %
Liabilities and Stockholders'
Equity
Deposits
Demand Deposits $ 702,159 $ 699,173 $ 573,904 0.43 % 22.35 %
Savings and Interest Checking 965,694 987,202 711,862 -2.18 % 35.66 %
Accounts
Money Market 675,269 667,665 464,983 1.14 % 45.22 %
Time Certificates of Deposit 937,854 970,903 787,282 -3.40 % 19.13 %
Total Deposits 3,280,976 3,324,943 2,538,031 -1.32 % 29.27 %
Borrowings
Federal Home Loan Bank 396,218 392,968 336,792 0.83 % 17.64 %
Borrowings
Fed Funds Purchased and Assets
Sold
Under Repurchase Agreements 188,707 179,317 166,417 5.24 % 13.39 %
Junior Subordinated Debentures 61,857 61,857 61,857 0.00 % 0.00 %
Subordinated Debentures 30,000 30,000 30,000 0.00 % 0.00 %
Other Borrowings 2,418 3,772 2,103 -35.90 % 14.98 %
Total Borrowings 679,200 667,914 597,169 1.69 % 13.74 %
Total Deposits and Borrowings 3,960,176 3,992,857 3,135,200 -0.82 % 26.31 %
Other Liabilities 67,252 64,642 37,295 4.04 % 80.32 %
Stockholders' Equity
Common Stock 209 209 163 0.00 % 28.22 %
Additional Paid in Capital 224,848 224,594 137,347 0.11 % 63.71 %
Retained Earnings 179,245 176,012 177,338 1.84 % 1.08 %
Accumulated Other Comprehensive 2,273 (3,255 ) (10,108 ) -169.83 % -122.49 %
Income/(Loss), Net of Tax
Total Stockholders' Equity 406,575 397,560 304,740 2.27 % 33.42 %
Total Liabilities and $ 4,434,003 $ 4,455,059 $ 3,477,235 -0.47 % 27.52 %
Stockholders' Equity
INDEPENDENT BANK CORP. FINANCIAL SUMMARY
(Unaudited - Dollars in Thousands, Except Per
Share Data)
CONSOLIDATED STATEMENTS OF Three Months Ended
INCOME
% Change % Change
September 30, June 30, September 30, Sept. 2009 Sept. 2009
vs. vs.
2009 2009 2008 June 2009 Sept. 2008
INTEREST INCOME
Interest on Fed Funds Sold and $ 4 $ 70 $ 62 -94.29 % -93.55 %
Short Term Investments
Interest and Dividends on 7,644 7,636 5,822 0.10 % 31.30 %
Securities
Interest on Loans 45,773 44,938 39,143 1.86 % 16.94 %
Interest on Loans Held for Sale 169 162 58 4.32 % 191.38 %
Total Interest Income 53,590 52,806 45,085 1.48 % 18.86 %
INTEREST EXPENSE
Interest on Deposits 7,446 8,441 9,078 -11.79 % -17.98 %
Interest on Borrowed Funds 5,236 5,265 5,079 -0.55 % 3.09 %
Total Interest Expense 12,682 13,706 14,157 -7.47 % -10.42 %
Net Interest Income 40,908 39,100 30,928 4.62 % 32.27 %
Less - Provision for Loan 4,443 4,468 2,068 -0.56 % 114.85 %
Losses
Net Interest Income after 36,465 34,632 28,860 5.29 % 26.35 %
Provision for Loan Losses
NON-INTEREST INCOME
Service Charges on Deposit 4,613 4,258 4,083 8.34 % 12.98 %
Accounts
Wealth Management 2,278 2,710 2,764 -15.94 % -17.58 %
Mortgage Banking Income 425 1,996 501 -78.71 % -15.17 %
BOLI Income 713 683 659 4.39 % 8.19 %
Net Gain/(Loss) on Sale of - (25 ) - -100.00 % n/a
Securities
Gain Resulting From early
Termination of Hedging - 3,778 - -100.00 % n/a
Relationship
Gross Loss on Write-Down of
certain Investments to Fair (5,108 ) (2,174 ) (720 ) 134.96 % 609.44 %
Value
Less: Non-Credit Related (33 ) 521 - -106.33 % n/a
Other-Than-Temporary Impairment
Net Loss on Write-Down of
Certain Investments to Fair (5,141 ) (1,653 ) (720 ) 211.01 % 614.03 %
Value
Other Non-Interest /Income 1,578 1,476 1,432 6.91 % 10.20 %
Total Non-Interest Income 4,466 13,223 8,719 -66.23 % -48.78 %
NON-INTEREST EXPENSE
Salaries and Employee Benefits 17,727 17,134 14,719 3.46 % 20.44 %
Occupancy and Equipment 3,985 4,136 3,200 -3.65 % 24.53 %
Expenses
Data Processing and Facilities 1,580 1,604 1,465 -1.50 % 7.85 %
Management
Merger & Acquisition Expense 41 10,844 - -99.62 % n/a
FDIC assessment 1,267 3,852 719 -67.11 % 76.22 %
Other Non-Interest Expense 7,704 8,986 5,356 -14.27 % 43.84 %
Total Non-Interest Expense 32,304 46,556 25,459 -30.61 % 26.89 %
INCOME BEFORE INCOME TAXES 8,627 1,299 12,120 564.13 % -28.82 %
PROVISION FOR INCOME TAXES 1,786 639 3,305 179.50 % -45.96 %
NET INCOME $ 6,841 $ 660 $ 8,815 936.52 % -22.39 %
PREFERRED STOCK DIVIDEND $ - $ 4,525 $ - -100.00 % n/a
NET (LOSS)/INCOME AVAILABLE TO $ 6,841 $ (3,865 ) $ 8,815 -277.00 % -22.39 %
COMMON SHAREHOLDERS
BASIC EARNINGS PER SHARE $ 0.33 $ (0.19 ) $ 0.54 -273.68 % -38.89 %
DILUTED EARNINGS PER SHARE $ 0.33 $ (0.19 ) $ 0.54 -273.68 % -38.89 %
BASIC AVERAGE SHARES 20,921,635 20,360,046 16,275,442
DILUTED AVERAGE SHARES 20,969,889 20,385,609 16,338,180
PERFORMANCE RATIOS:
Net Interest Margin (FTE) 4.05 % 3.88 % 4.09 % 4.38 % -1.00 %
Return on Average Assets 0.62 % -0.35 % 1.04 % 280.00 % -39.42 %
Return on Average Common Equity 6.73 % -3.95 % 11.57 % 273.67 % -40.79 %
RECONCILIATION TABLE - NON-GAAP
FINANCIAL INFORMATION
NET INCOME AVAILABLE TO COMMON $ 6,841 $ (3,865 ) $ 8,815 -277.00 % -22.39 %
SHAREHOLDERS (GAAP)
Non-Interest Income Components
(Less)/Add - Net (Gain)/ Loss
on Sale of Securities, net of - 16 -
tax
Less - Gain Resulting From
early Termination of Hedging - (2,456 ) -
Relationship
Non-Interest Expense Components
Add - Merger and Acquisition 27 8,676 -
Expenses, net of tax
Add - Litigation Reserve, net - - (488 )
of tax
Deemed Preferred Stock Dividend - 4,384 -
NET OPERATING EARNINGS $ 6,868 $ 6,756 $ 8,327 1.66 % -17.52 %
Diluted Earnings Per Share, on $ 0.33 $ 0.33 $ 0.51 0.00 % -35.29 %
an Operating Basis
CONSOLIDATED STATEMENTS OF INCOME
Nine Months % Change
September 30, September 30, Sept. 2009 vs.
2009 2008 Sept. 2008
INTEREST INCOME
Interest on Fed Funds Sold and $ 272 $ 96 183.33 %
Short Term Investments
Interest and Dividends on 22,546 16,990 32.70 %
Securities
Interest on Loans 126,491 112,732 12.21 %
Interest on Loans Held for Sale 497 293 69.62 %
Total Interest Income 149,806 130,111 15.14 %
INTEREST EXPENSE
Interest on Deposits 24,293 28,933 -16.04 %
Interest on Borrowed Funds 15,517 15,006 3.41 %
Total Interest Expense 39,810 43,939 -9.40 %
Net Interest Income 109,996 86,172 27.65 %
Less - Provision for Loan 12,911 5,312 143.05 %
Losses
Net Interest Income after 97,085 80,860 20.07 %
Provision for Loan Losses
NON-INTEREST INCOME
Service Charges on Deposit 12,518 11,681 7.17 %
Accounts
Wealth Management 7,318 8,554 -14.45 %
Mortgage Banking Income 3,578 2,574 39.01 %
BOLI Income 2,126 1,816 17.07 %
Net Gain/(Loss) on Sale of 1,355 (609 ) -322.50 %
Securities and Derivatives
Gain Resulting From early
Termination of Hedging 3,778 - n/a
Relationship
Gross Loss on Write-Down of
certain Investments to Fair (7,384 ) (2,570 ) 187.32 %
Value
Less: Non-Credit Related 590 - n/a
Other-Than-Temporary Impairment
Net Loss on Write-Down of
Certain Investments to Fair (6,794 ) (2,570 ) 164.36 %
Value
Other Non-Interest 4,283 3,779 13.34 %
(Loss)/Income
Total Non-Interest Income 28,162 25,225 11.64 %
NON-INTEREST EXPENSE
Salaries and Employee Benefits 49,720 43,806 13.50 %
Occupancy and Equipment 11,826 9,338 26.64 %
Expenses
Data Processing and Facilities 4,600 4,170 10.31 %
Management
Merger & Acquisition Expense 12,423 1,120 1009.20 %
WorldCom Bond Loss Recovery - (418 ) -100.00 %
FDIC assessment 5,655 830 581.33 %
Other Non-Interest Expense 22,943 18,706 22.65 %
Total Non-Interest Expense 107,167 77,552 38.19 %
INCOME BEFORE INCOME TAXES 18,080 28,533 -36.63 %
PROVISION FOR INCOME TAXES 4,192 7,590 -44.77 %
NET INCOME $ 13,888 $ 20,943 -33.69 %
PREFERRED STOCK DIVIDEND $ 5,698 $ - -
NET INCOME AVAILABLE TO COMMON $ 8,190 $ 20,943 -60.89 %
SHAREHOLDERS
BASIC EARNINGS PER SHARE $ 0.43 $ 1.35 -68.15 %
DILUTED EARNINGS PER SHARE $ 0.43 $ 1.34 -67.91 %
BASIC AVERAGE SHARES 19,210,431 15,518,540
DILUTED AVERAGE SHARES 19,236,612 15,591,167
PERFORMANCE RATIOS:
Net Interest Margin (FTE) 3.85 % 4.00 % -3.75 %
Return on Average Assets 0.26 % 0.87 % -70.11 %
Return on Average Common Equity 2.73 % 9.74 % -71.56 %
RECONCILIATION TABLE - NON-GAAP
FINANCIAL INFORMATION
NET INCOME AVAILABLE TO COMMON $ 8,190 $ 20,943 -60.89 %
SHAREHOLDERS (GAAP)
Non-Interest Income Components
(Less)/Add - Net (Gain)/ Loss
on Sale of Securities, net of (880 ) 396
tax
Less - Gain Resulting From
early Termination of Hedging (2,456 ) -
Relationship
Non-Interest Expense Components
Add - Merger and Acquisition 9,706 728
Expenses, net of tax
Add - Litigation Reserve, net - 488
of tax
Less - WorldCom Bond Loss - (272 )
Recovery, net of tax
Deemed Preferred Stock Dividend 4,384 -
NET OPERATING EARNINGS $ 18,944 $ 22,283 -14.98 %
Diluted Earnings Per Share, on $ 0.98 $ 1.43 -31.47 %
an Operating Basis
INDEPENDENT BANK CORP. FINANCIAL SUMMARY
(Unaudited - Dollars in Thousands, Except Per
Share Data)
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 Nine Months Ended
% Change % Change % Change
September 30, June 30, September 30, Sept. 2009 Sept. 2009 September September 30, Sept. 2009
vs. vs. 30, vs.
2009 2009 2008 June 2009 Sept. 2008 2009 2008 Sept. 2008
Non-Interest Income GAAP $ 4,466 $ 13,223 $ 8,719 -66.23 % -48.78 % $ 28,162 $ 25,225 11.64 %
(Less)/Add - Net (Gain)/ Loss - 25 - -100.00 % n/a (1,355 ) 609 -322.50 %
on Sale of Securities
(Less) Gain Resulting From
early Termination of Hedging - (3,778 ) - -100.00 % n/a (3,778 ) - n/a
Relationship
Add -
Other-Than-Temporary-Impairment 5,141 1,653 720 211.01 % 614.03 % 6,794 2,570 164.36 %
on Securities
Non-Interest Income as Adjusted $ 9,607 $ 11,123 $ 9,439 -13.63 % 1.78 % $ 29,823 $ 28,404 5.00 %
Non-Interest Expense GAAP $ 32,304 $ 46,556 $ 25,459 -30.61 % 26.89 % $ 107,167 $ 77,552 38.19 %
Less - Merger & Acquisition (41 ) (10,844 ) - -99.62 % n/a (12,423 ) (1,120 ) 1009.20 %
Expenses
Less/Add - Litigation Reserve - - (750 ) n/a n/a - 750 -100.00 %
Add - WorldCom Bond Loss - - - n/a n/a - 418 -100.00 %
Recovery
Non-Interest Expense as $ 32,263 $ 35,712 $ 24,709 -9.66 % 30.57 % $ 94,744 $ 77,600 22.09 %
Adjusted
ASSET QUALITY
For the Period Ending
September 30, June 30, September 30,
2009 2009 2008
(Dollars in Thousands, Except Per Share Data)
Nonperforming Loans
Commercial & Industrial Loans $ 3,744 $ 4,808 $ 1,481
Small Business Loans 969 1,743 773
Commercial Real Estate Loans 18,511 12,505 5,478
Residential Real Estate Loans 11,625 9,865 6,725
Installment Loans - Home Equity 1,237 1,695 1,106
Installment Loans - Auto 504 718 770
Installment Loans - Other 347 157 311
Total Nonperforming Loans $ 36,937 $ 31,491 16,644
Non-Accrual Securities 1,134 1,844 -
Other Assets in Possession 255 270 -
Other Real Estate Owned 6,491 6,102 1,239
Nonperforming Assets 44,817 39,707 17,883
Nonperforming Loans/Gross Loans 1.09 % 0.94 % 0.65 %
Allowance for Loan 111.97 % 127.24 % 199.99 %
Losses/Nonperforming Loans
Gross Loans/Total Deposits 103.25 % 100.85 % 101.66 %
Allowance for Loan Losses/Total 1.22 % 1.19 % 1.29 %
Loans
Net charge-offs $ 3,154 $ 1,882 $ 2,012
(quarter-to-date)
Net charge-offs to average 0.37 % 0.23 % 0.31 %
loans (annualized)
Financial Ratios
Book Value per Common Share $ 19.43 $ 19.01 $ 18.72
Tangible Equity Ratio:
Tangible Common 6.12 % 5.86 % 5.32 %
Capital/Tangible Assets
Tangible Common
Capital/Tangible Asset
(proforma to include the tax 6.58 % 6.33 % 5.76 %
deductibility of goodwill and
exclude impact of CPP) -
Non-GAAP
Tangible Common Book Value per
Share (proforma to include the
tax deductibility of goodwill $ 13.56 $ 13.11 $ 11.85
and exclude impact of CPP) -
Non-GAAP
Capital Adequacy
Tier one leverage capital ratio 7.66 % 7.60 % 7.69 %
(1)
(1) Estimated number for September 30, 2009
INDEPENDENT BANK CORP.
SUPPLEMENTAL FINANCIAL INFORMATION
CONSOLIDATED AVERAGE BALANCE Three Months Ended
SHEETS AND AVERAGE RATE DATA
(Unaudited - Dollars in September 30, 2009 June 30, 2009 September 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 $ 4,060 $ 4 0.39 % $ 86,883 $ 70 0.32 % $ 2,162 $ 62 11.47 %
Term Investments
Securities:
Trading Assets 22,941 109 1.90 % 13,965 44 1.26 % 3,179 30 3.77 %
Taxable Investment Securities 620,183 7,317 4.72 % 632,587 7,370 4.66 % 430,342 5,426 5.04 %
Non-taxable Investment 20,373 336 6.60 % 20,950 342 6.53 % 38,854 563 5.80 %
Securities (1)
Total Securities: 663,497 7,762 4.68 % 667,502 7,756 4.65 % 472,375 6,019 5.10 %
Loans (1) 3,375,581 45,890 5.44 % 3,284,763 45,067 5.49 % 2,573,808 39,262 6.10 %
Loans Held for Sale 15,831 169 4.27 % 15,406 162 4.21 % 4,565 58 5.08 %
Total Interest-Earning Assets $ 4,058,969 $ 53,825 5.30 % $ 4,054,554 $ 53,055 5.23 % $ 3,052,910 $ 45,401 5.95 %
Cash and Due from Banks 67,156 77,263 69,587
Federal Home Loan Bank Stock 36,357 35,065 24,603
Other Assets 280,147 299,108 233,978
Total Assets $ 4,442,629 $ 4,465,990 $ 3,381,078
Interest-bearing Liabilities:
Deposits:
Savings and Interest Checking $ 969,676 $ 1,246 0.51 % $ 964,929 $ 1,326 0.55 % $ 711,818 $ 1,578 0.89 %
Accounts
Money Market 677,851 1,597 0.94 % 666,232 1,713 1.03 % 473,685 2,203 1.86 %
Time Deposits 948,596 4,603 1.94 % 974,449 5,402 2.22 % 754,969 5,297 2.81 %
Total interest-bearing $ 2,596,123 $ 7,446 1.15 % $ 2,605,610 $ 8,441 1.30 % $ 1,940,472 $ 9,078 1.87 %
deposits:
Borrowings:
Federal Home Loan Bank $ 395,878 $ 2,901 2.93 % $ 449,311 $ 2,972 2.65 % $ 299,631 $ 2,781 3.71 %
Borrowings
Federal Funds Purchased and
Assets Sold
Under Repurchase Agreement 184,181 857 1.86 % 173,992 812 1.87 % 165,852 1,249 3.01 %
Junior Subordinated Debentures 61,857 931 6.02 % 61,857 940 6.08 % 61,857 842 5.44 %
Subordinated Debentures 30,000 547 7.29 % 30,000 541 7.21 % 11,413 204 7.15 %
Other Borrowings 2,108 - 0.00 % 2,105 - 0.00 % 834 3 1.44 %
Total Borrowings: 674,024 5,236 3.11 % 717,265 5,265 2.94 % 539,587 5,079 3.77 %
Total Interest-Bearing $ 3,270,147 $ 12,682 1.55 % $ 3,322,875 $ 13,706 1.65 % $ 2,480,059 $ 14,157 2.28 %
Liabilities
Demand Deposits 702,071 673,448 561,542
Other Liabilities 63,821 61,582 34,754
Total Liabilities $ 4,036,039 $ 4,057,905 $ 3,076,355
Stockholders' Equity 406,590 408,085 304,723
Total Liabilities and $ 4,442,629 $ 4,465,990 $ 3,381,078
Stockholders' Equity
Net Interest Income $ 41,143 $ 39,349 $ 31,244
Interest Rate Spread (2) 3.75 % 3.58 % 3.67 %
Net Interest Margin (3) 4.05 % 3.88 % 4.09 %
Supplemental Information:
Total Deposits, including $ 3,298,194 $ 7,446 $ 3,279,058 $ 8,441 $ 2,502,014 $ 9,078
Demand Deposits
Cost of Total Deposits 0.90 % 1.03 % 1.45 %
Total Funding Liabilities, $ 3,972,218 $ 12,682 $ 3,996,323 $ 13,706 $ 3,041,601 $ 14,157
including Demand Deposits
Cost of Total Funding 1.28 % 1.37 % 1.86 %
Liabilities
(1) The total amount of adjustment to present interest income and yield on a fully tax-equivalent basis is $235, $249, and $316 for the three months ended
September 30, 2009, June 30, 2009, and September 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.
Nine Months Ended
(Unaudited - Dollars in September 30, 2009 September 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 $ 70,349 $ 272 0.52 % $ 1,184 $ 96 10.81 %
Term Investments
Securities:
Trading Assets 13,278 178 1.79 % 3,068 95 4.13 %
Taxable Investment Securities 606,388 21,624 4.75 % 418,332 15,576 4.96 %
Non-taxable Investment 23,792 1,145 6.42 % 42,124 2,029 6.42 %
Securities (1)
Total Securities: 643,458 22,947 4.75 % 463,524 17,700 5.09 %
Loans (1) 3,106,752 126,856 5.44 % 2,438,462 113,078 6.18 %
Loans Held for Sale 15,453 497 4.29 % 7,283 293 5.36 %
Total Interest-Earning Assets $ 3,836,012 $ 150,572 5.23 % $ 2,910,453 $ 131,167 6.01 %
Cash and Due from Banks 68,192 66,066
Federal Home Loan Bank Stock 32,051 22,896
Other Assets 276,960 211,037
Total Assets $ 4,213,215 $ 3,210,452
Interest-bearing Liabilities:
Deposits:
Savings and Interest Checking $ 892,383 $ 3,567 0.53 % $ 677,470 $ 4,740 0.93 %
Accounts
Money Market 621,424 5,006 1.07 % 463,074 6,827 1.97 %
Time Deposits 918,510 15,720 2.28 % 700,784 17,366 3.30 %
Total interest-bearing $ 2,432,317 $ 24,293 1.33 % $ 1,841,328 $ 28,933 2.10 %
deposits:
Borrowings:
Federal Home Loan Bank $ 418,386 $ 8,548 2.72 % $ 313,390 $ 8,743 3.72 %
Borrowings
Federal Funds Purchased and
Assets Sold
Under Repurchase Agreement 177,061 2,525 1.90 % 149,772 3,519 3.13 %
Junior Subordinated Debentures 61,857 2,819 6.08 % 59,599 2,483 5.55 %
Subordinated Debentures 30,000 1,625 7.22 % 3,832 204 7.10 %
Other Borrowings 1,996 - 0.00 % 2,262 57 3.36 %
Total Borrowings: 689,300 15,517 3.00 % 528,855 15,006 3.78 %
Total Interest-Bearing $ 3,121,617 $ 39,810 1.70 % $ 2,370,183 $ 43,939 2.47 %
Liabilities
Demand Deposits 635,943 527,993
Other Liabilities 56,015 25,480
Total Liabilities $ 3,813,575 $ 2,923,656
Stockholders' Equity 399,640 286,796
Total Liabilities and $ 4,213,215 $ 3,210,452
Stockholders' Equity
Net Interest Income $ 110,762 $ 87,228
Interest Rate Spread (2) 3.53 % 3.54 %
Net Interest Margin (3) 3.85 % 4.00 %
Supplemental Information:
Total Deposits, including $ 3,068,260 $ 24,293 $ 2,369,321 $ 28,933
Demand Deposits
Cost of Total Deposits 1.06 % 1.63 %
Total Funding Liabilities, $ 3,757,560 $ 39,810 $ 2,898,176 $ 43,939
including Demand Deposits
Cost of Total Funding 1.41 % 2.02 %
Liabilities
(1) The total amount of adjustment to present interest income and yield on a fully tax-equivalent basis is $766 and $1,056 for the nine months ended September
30, 2009, and September 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