ROCKLAND, Mass., Jan. 17, 2008 (PRIME NEWSWIRE) -- Independent Bank Corp. (Nasdaq:INDB), parent of Rockland Trust Company, today announced net income of $7.7 million and diluted earnings per share of $0.56 for the quarter ending December 31, 2007. This represents an increase of $0.02, or 3.7%, on a per share basis, from the $0.54 recorded in the same quarter a year ago. Net income for the quarter decreased $371,000 as compared to the same period last year. For the year ending December 31, 2007, net income was $28.4 million and diluted earnings per share were $2.00, a decrease of $4.5 million, or $0.17 per diluted share, as compared to net income of $32.9 million and diluted earnings per share of $2.17 for the year ending December 31, 2006.
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 2007 and 2006 as indicated by the table below. In an effort to provide investors with information regarding the Company's results, the Company has disclosed certain 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
December 31,
-------------------------------------------
RECONCILIATION
TABLE
- NON-GAAP
FINANCIAL
INFORMATION 2007 2006 $ Variance % Variance
---- ---- ---------- ----------
NET INCOME
(GAAP) $ 7,730 $ 8,101 (371) -4.58%
Net Interest
Income Components
Add - Write-Off
of Debt
Issuance Cost,
net of tax -- 647 (647) -100.00%
Non-Interest
Income Components
Add - Net Loss
on Sale of
Securities,
net of tax -- 905 (905) -100.00%
Non-Interest
Expense
Components
Add - Prepayment
Fees on
Borrowings,
net of tax -- 53 (53) -100.00%
Less - Recovery
on WorldCom
Bond Claim,
net of tax -- (1,230) 1,230 -100.00%
----------------- ---------- ----------
NET OPERATING
EARNINGS
(NON-GAAP) $ 7,730 $ 8,476 (746) -8.80%
================= ========== ==========
Diluted Operating
Earnings Per
Share $ 0.56 $ 0.57 (0.01) -1.75%
================= ========== ==========
Dollars in Thousands,
Except Per Share Data Twelve Months Ending
December 31,
-------------------------------------------
RECONCILIATION TABLE -
NON-GAAP FINANCIAL
INFORMATION 2007 2006 $ Variance % Variance
---- ---- ---------- ----------
NET INCOME
(GAAP) $28,381 $32,851 (4,470) -13.61%
Net Interest
Income Components
Add - Write-Off
of Debt
Issuance Cost,
net of tax 590 647 (57) -8.81%
Non-Interest
Income
Components
Add - Net
Loss on Sale
of Securities,
net of tax -- 2,055 (2,055) -100.00%
Less - BOLI
Benefit Proceeds -- (1,316) 1,316 -100.00%
Non-Interest
Expense
Components
Add - Executive
Early Retirement
Costs,
net of tax 264 -- 264 100.00%
Add - Prepayment
Fees on
Borrowings,
net of tax -- 53 (53) -100.00%
Add - Litigation
Judgment,
net of tax 885 -- 885 100.00%
Less - Recovery
on WorldCom
Bond Claim,
net of tax -- (1,230) 1,230 -100.00%
----------------- ---------- ----------
NET OPERATING
EARNINGS
(NON-GAAP) $30,120 $33,060 (2,940) -8.89%
================= ========== ==========
Diluted Operating
Earnings Per
Share $ 2.13 $ 2.19 (0.06) -2.74%
================= ========== ==========
Net operating earnings were $7.7 million, or $0.56 on a per diluted share basis for the three months ending December 31, 2007, compared to net operating earnings and diluted earnings per share for the three months ending December 31, 2006 of $8.5 million and $0.57, respectively, which represents a decrease of $746,000 or ($0.01) per diluted share. Net operating earnings were $30.1 million or $2.13 on a per diluted share basis for the year ending December 31, 2007, compared to net operating earnings and diluted earnings per share for the year ending December 31, 2006 of $33.1 million and $2.19, respectively, which represents a decrease of $2.9 million or ($0.06) per diluted share.
Comparing the three months ending December 31, 2007 to the same period last year, net interest income decreased $219,000, or (0.9%). For the year ending December 31, 2007 net interest income decreased $6.5 million, or (6.3%), from the year ago period, as anticipated due to the strategic repositioning of the balance sheet.
In April 2007, the Company wrote-off approximately $907,000 of unamortized issuance costs related to a refinance of $25.0 million of Trust Preferred securities which the Company called on April 30, 2007. In December 2006, the Company wrote-off approximately $995,000 of unamortized issuance costs related to a refinance of $25.0 million of Trust Preferred securities which the Company called in December 2006. Excluding the write-off of the debt issuance costs, net interest income decreased, in 2007, by $6.6 million from the comparative twelve month period in 2006, with the decrease primarily attributable to a reduction in average earning assets.
The net interest margin for the three and twelve-month periods ending December 31, 2007 was 3.94% and 3.90%, respectively. Excluding the write-off of debt issuance costs in both years, the net interest margin was 3.94% for the three and twelve month period ending December 31, 2007, as compared to 3.89% for the three and twelve-month periods ending December 31, 2006. See the tables below for reconciliations of net interest income and the net interest margin as adjusted.
Three Months Ending Twelve Months Ending
Dollars -------------------- --------------------
in Thousands December 31, December 31,
2007 2006 2007 2006
-------------------- --------------------
Net Interest
Income GAAP $24,491 $24,710 $96,183 $102,655
Add - Write-Off
of Debt
Issuance
Cost -- 995 907 995
-------------------- --------------------
Net Interest
Income as
Adjusted $24,491 $25,705 $97,090 $103,650
==================== ====================
Three Months Ending Twelve Months Ending
-------------------- --------------------
December 31, December 31,
2007 2006 2007 2006
-------------------- --------------------
Net Interest
Margin GAAP 3.94% 3.74% 3.90% 3.85%
Add - Write-Off
of Debt Issuance
Cost -- 0.15% 0.04% 0.04%
-------------------- --------------------
Net Interest
Margin as
Adjusted 3.94% 3.89% 3.94% 3.89%
==================== ====================
The Company's allowance for loan losses as a percentage of loans was 1.31% and 1.32% at December 31, 2007 and December 31, 2006, respectively. The provision for loan losses was $1.4 million and $3.1 million for the quarter and the twelve month periods ending December 31, 2007, respectively, compared to $705,000 and $2.3 million for the year ago comparative periods. The increase in the provision for loan losses in the quarter and year to date periods is consistent with robust loan growth in the Company's commercial loan portfolio. Net charge-offs were $717,000 and $3.1 million for the three and twelve months of 2007, respectively, as compared to $705,000 and $2.2 million for the three and twelve months of 2006, respectively.
Non-interest income increased by $2.5 million, or 42.8%, and by $5.4 million, or 20.3%, during the three and twelve months ended December 31, 2007, respectively, as compared to the same periods in the prior year. Excluding the losses on sale of securities and Bank Owned Life Insurance ("BOLI") benefit proceeds recognized during 2006, non-interest income grew by $3.6 million, or 12.5%, in the twelve month period ending December 31, 2007, when compared to 2006. See the table below for a reconciliation of non-interest income as adjusted.
Twelve Months Ended
-------------------
December 31,
2007 2006 $ Variance % Variance
------------------ ---------- ----------
(Dollars in Thousands)
Non-Interest Income
GAAP $32,051 $26,644 $5,407 20.29%
Add - Net Loss on
Sale of Securities -- 3,161 ($3,161) -100.00%
Less - BOLI
Benefit Proceeds -- (1,316) $1,316 -100.00%
----------------- ---------- ----------
Non-Interest Income
as Adjusted $32,051 $28,489 $3,562 12.50%
================= ========== ==========
The change is attributable to the following:
-- Service charges on deposit accounts increased by $139,000, or
3.9%, and by $181,000, or 1.3%, for the three and twelve months
ended December 31, 2007,respectively, as compared to the same periods
in 2006.
-- Wealth management revenue increased by $609,000, or 37.3%, and by
$2.0 million, or 32.3%, for the three and twelve months ended
December 31, 2007, as compared to the same period in 2006.
Investment management revenue increased by $606,000, or 42.9%,
and $1.5 million, or 27.1%, for the three and twelve months ended
December 31, 2007. Assets under management at December 31, 2007
were $1.3 billion, an increase of $472.7 million, or 58.0%, as
compared to December 31, 2006. 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 the assets
under management. Retail wealth management revenue improved by
$3,000, or 1.3%, and $483,000, or 81.4%, for the three and twelve
months ended December 31, 2007, respectively, due to a change in the
origination model and an increase in sales.
-- Mortgage banking income increased by $244,000, or 34.6%, and
$467,000, or 17.3%, for the three and twelve months ended
December 31, 2007, respectively, as compared to the same periods in
2006. The balance of the mortgage servicing asset was $2.1 million
and loans serviced amounted to $255.2 million as of December 31,
2007, as compared to a mortgage servicing asset balance of $2.4
million and loans serviced amounting to $292.9 million at
December 31, 2006.
-- BOLI income decreased for the twelve-month period by $1.3
million, or (38.5%), due to the BOLI death benefit proceeds
received during 2006.
-- There were no gains or losses on the sale of securities during
the fourth quarter of 2007 and there was a $1.4 million loss on
the sale of securities recorded during the fourth quarter of
2006. A $3.2 million loss on the sale of securities was recorded
for the twelve months ended December 31, 2006 and there was no
gain or loss from the sale of securities in 2007.
-- Other non-interest income increased by $101,000, or 11.3%, and
$871,000, or 25.0%, for the three and twelve months ended
December 31, 2007, as compared to the same periods in 2006,
largely attributable to the revenue associated with the 1031
deferred tax exchange business acquired in 2007.
Non-interest expense increased by $3.7 million, or 20.5%, and $8.6 million, or 10.8%, for the three and twelve months ended December 31, 2007, as compared to the same periods in 2006. Excluding executive early retirement costs and the Computer Associates litigation judgment in 2007 and prepayment fees on borrowings and the recovery on WorldCom bond claim in 2006, non-interest expense increased $5.0 million, or 6.2%, for the twelve months ending December 31, 2007, as compared to the same period in 2006. Excluding prepayment fees on borrowings and the recovery on WorldCom bond claim in the three months ended December 31, 2006, non-interest expense increased $1.9 million, or 9.6%, for the three months ending December 31, 2007. See the table below for a reconciliation of non-interest expense as adjusted.
Three Months Ended
------------------
December 31,
2007 2006 $ Variance % Variance
----------------- ---------- ----------
(Dollars in Thousands)
Non-Interest
Expense GAAP $22,007 $18,263 $3,744 20.50%
Less - Executive
Early Retirement
Costs -- -- -- 0.00%
Less - Prepayment
Fees on
Borrowings -- (82) 82 -100.00%
Less - Litigation
Judgment -- -- -- 0.00%
Add - Recovery on
WorldCom Bond
Claim -- 1,892 (1,892) -100.00%
----------------- ---------- ----------
Non-Interest Expense
as Adjusted $22,007 $20,073 $1,934 9.63%
================= ========== ==========
Twelve Months
Ended
-----------------
December 31,
2007 2006 $ Variance % Variance
----------------- ---------- ----------
(Dollars in Thousands)
Non-Interest
Expense GAAP $87,932 $79,354 $8,578 10.81%
Less - Executive
Early Retirement
Costs (406) -- (406) 100.00%
Less - Prepayment
Fees on
Borrowings -- (82) 82 -100.00%
Less - Litigation
Judgment (1,361) -- (1,361) 100.00%
Add - Recovery on
WorldCom Bond
Claim -- 1,892 (1,892) -100.00%
----------------- ---------- ----------
Non-Interest
Expense as
Adjusted $86,165 $81,164 $5,001 6.16%
================= ========== ==========
-- Salaries and employee benefits increased by $1.4 million, or
11.7%, and $4.6 million, or 9.7%, for the three and twelve months
ended December 31, 2007, respectively, as compared to the same
periods in 2006. Included in salaries and benefits for the twelve-
month period are executive early retirement costs amounting to
$406,000 recorded in the first quarter of 2007. The remaining
increase in salaries and benefits is attributable to annual merit
increases, incentive programs, the Compass Exchange Advisors and
O'Connell acquisitions, commissions, and other new hires to
support growth initiatives.
-- Occupancy and equipment expense decreased by $68,000, or (2.8%),
and $128,000, or (1.3%) for the three and twelve-month periods
ending December 31, 2007, respectively, as compared to the same
periods in 2006. The decrease in the year-to-date period is
largely due to decreases in equipment maintenance and repairs and
depreciation on capital leases, partially offset by increases in
energy costs.
-- Data processing and facilities management expense increased by
$38,000, or 3.2%, and increased by $144,000, or 3.2%, for the
three and twelve-month periods ending December 31, 2007,
respectively, as compared to the same periods in 2006.
-- Other non-interest expense increased by $496,000, or 10.6%, and
$2.0 million, or 10.8%, for the three and twelve-month periods
ending December 31, 2007, respectively, as compared to the same
periods in 2006. The increase in the twelve-month period is
primarily attributable to payment of the previously mentioned
$1.4 million litigation judgment recorded in the second quarter
of 2007, as well as increases in software maintenance and
consulting fees.
The Company's effective tax rate was 20% and 24% in the fourth quarter and year-to-date periods ended December 31, 2007, respectively. The impact of the Company's New Markets Tax Credit program, in addition to a reversal of a tax reserve pursuant to a favorable Tax Court Ruling relevant to the Company, resulted in a reduction in the effective tax rate from the 31% recorded in 2006.
Total assets decreased by $60.7 million, or (2.1%), maintaining $2.8 billion in total assets at December 31, 2007 as well as at December 31, 2006. This decrease is a result of intentional decreases in the Company's security portfolio and certain loan categories due to a combination of the flat yield curve environment and the profitability characteristics of these asset classes.
-- Securities decreased by $9.8 million, or (1.9%), during the
twelve months ended December 31, 2007. This decrease resulted
mainly from calls of securities and normal portfolio
amortization. The ratio of securities to total assets as of
December 31, 2007 was 18.3%, the same as at December 31, 2006.
-- During the fourth quarter, the Company experienced robust loan
growth - equating to 11% growth on an annualized basis - of which
$61.1 million was in the commercial and commercial real estate
category. Total loans increased by $18.0 million, or 0.9%, during
the twelve months ended December 31, 2007. Business loans
increased by $96.8 million, or 8.8%, with commercial real estate
comprising most of the change with an increase of $56.9 million,
or 7.7%. Business banking loans totaled $70.0 million at December
31, 2007, an increase of $10.1 million, or 16.8%, from December
31, 2006. Home equity loans increased $31.7 million, or 11.5%,
during the twelve months ended December 31, 2007. Consumer auto
loans decreased $50.8 million, or (24.6%), and total residential
real estate loans decreased $56.4 million, or (14.2%), during the
twelve months of 2007, consistent with strategic positioning.
Total deposits of $2.0 billion at December 31, 2007 reflected a managed decrease of $63.7 million, or (3.1%), compared to December 31, 2006.
Borrowings increased by $10.7 million, or 2.2%, during the twelve months ending December 31, 2007, and by $73.4 million, or 17.0%, during the quarter, as the Company has fixed wholesale funding at what it currently anticipates to be advantageous rates as a component of its interest rate risk strategy.
The Company reported return on average assets and return on average equity in the fourth quarter of 2007 of 1.13% and 14.08%, respectively, as compared to 1.12% and 14.25% for the same period in 2006.
Stockholders' equity at December 31, 2007 totaled $220.7 million, as compared to $229.8 million at December 31, 2006. The Tier 1 leverage capital ratio at December 31, 2007 was 8.04%, maintaining the Company's well-capitalized position.
The allowance for loan losses was $26.8 million at December 31, 2007 and December 31, 2006. Nonperforming assets totaled $8.3 million at December 31, 2007, or 0.30% of total assets, as compared to $7.2 million reported at December 31, 2006, or 0.25% 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 fourth quarter earnings at 10:00 a.m. Eastern Time on Friday, January 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: 414698. The web cast replay will be available until January 18, 2009 and the telephone replay will be available until January 23, 2008.
Independent Bank Corp.'s sole bank subsidiary, Rockland Trust Company, currently has approximately $2.8 billion in assets. Rockland Trust offers commercial banking, retail banking, investment management services, and insurance sales services from: over 50 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 December 31, December 31, $ %
BALANCE SHEETS 2007 2006 Variance Change
--------------------------------------------------------------------
Assets
Cash and Due
From Banks $ 67,416 $ 62,773 4,643 7.40%
Fed Funds Sold
and Short Term
Investments -- 75,518 (75,518) -100.00%
Securities
Trading Assets 1,687 1,758 (71) -4.04%
Securities
Available for
Sale 444,258 417,088 27,170 6.51%
Securities Held
to Maturity 45,265 76,747 (31,482) -41.02%
Federal Home
Loan Bank Stock 16,260 21,710 (5,450) -25.10%
----------- ----------- --------- --------
Total Securities 507,470 517,303 (9,833) -1.90%
----------- ----------- --------- --------
Loans
Commercial and
Industrial 190,522 174,356 16,166 9.27%
Commercial Real
Estate 797,416 740,517 56,899 7.68%
Commercial
Construction 133,372 119,685 13,687 11.44%
Business Banking 69,977 59,910 10,067 16.80%
Residential Real
Estate 323,847 378,368 (54,521) -14.41%
Residential
Construction 6,115 7,277 (1,162) -15.97%
Residential Loans
Held for Sale 11,128 11,859 (731) -6.16%
Consumer -
Home Equity 308,744 277,015 31,729 11.45%
Consumer - Auto 156,006 206,845 (50,839) -24.58%
Consumer - Other 45,825 49,077 (3,252) -6.63%
----------- ----------- --------- --------
Total Loans 2,042,952 2,024,909 18,043 0.89%
Less - Allowance
for Loan Losses (26,831) (26,815) (16) 0.06%
----------- ----------- --------- --------
Net Loans 2,016,121 1,998,094 18,027 0.90%
----------- ----------- --------- --------
Bank Premises and
Equipment 39,085 37,316 1,769 4.74%
Goodwill and Core
Deposit Intangible 60,411 56,535 3,876 6.86%
Other Assets 77,763 81,380 (3,617) -4.44%
----------- ----------- --------- --------
Total Assets $ 2,768,266 $ 2,828,919 (60,653) -2.14%
=========== =========== ========= ========
Liabilities and
Stockholders'
Equity
Deposits
Demand Deposits $ 471,164 $ 490,036 (18,872) -3.85%
Savings and
Interest
Checking
Accounts 587,474 577,443 10,031 1.74%
Money Market 435,792 455,737 (19,945) -4.38%
Time
Certificates
of Deposit 532,180 567,128 (34,948) -6.16%
----------- ----------- --------- --------
Total Deposits 2,026,610 2,090,344 (63,734) -3.05%
----------- ----------- --------- --------
Borrowings
Federal Home
Loan Bank
Borrowings 311,125 305,128 5,997 1.97%
Fed Funds
Purchased and
Assets Sold
Under Repurchase
Agreements 138,603 108,248 30,355 28.04%
Junior Subordin-
ated Debentures 51,547 77,320 (25,773) -33.33%
Other Borrowings 3,069 2,953 116 3.93%
----------- ----------- --------- --------
Total Borrowings 504,344 493,649 10,695 2.17%
----------- ----------- --------- --------
Total Deposits and
Borrowings 2,530,954 2,583,993 (53,039) -2.05%
Other Liabilities 16,645 15,143 1,502 9.92%
Stockholders'
Equity 220,667 229,783 (9,116) -3.97%
----------- ----------- --------- --------
Total Liabilities
and Stockholders'
Equity $ 2,768,266 $ 2,828,919 (60,653) -2.14%
=========== =========== ========= ========
------------------------------------------
December 31, 2007 vs.
September 30, September 30, 2007 %
2007 Variance Change
------------------------------------------
Assets
Cash and Due
From Banks $ 60,003 7,413 12.35%
Fed Funds Sold
and Short Term
Investments 408 (408) -100.00%
Securities
Trading Assets 1,725 (38) -2.20%
Securities
Available for
Sale 414,994 29,264 7.05%
Securities Held
to Maturity 45,870 (605) -1.32%
Federal Home
Loan Bank Stock 16,260 0 0.00%
----------- ----------- --------
Total Securities 478,849 28,621 5.98%
----------- ----------- ---------
Loans
Commercial and
Industrial 178,112 12,410 6.97%
Commercial Real
Estate 763,436 33,980 4.45%
Commercial
Construction 118,653 14,719 12.41%
Business Banking 66,668 3,309 4.96%
Residential Real
Estate 334,188 (10,341) -3.09%
Residential
Construction 6,219 (104) -1.67%
Residential Loans
Held for Sale 6,938 4,190 60.39%
Consumer -
Home Equity 299,312 9,432 3.15%
Consumer - Auto 168,363 (12,357) -7.34%
Consumer - Other 46,302 (477) -1.03%
----------- ----------- --------
Total Loans 1,988,191 54,761 2.75%
Less - Allowance
for Loan Losses (26,192) (639) 2.44%
----------- ----------- --------
Net Loans 1,961,999 54,122 2.76%
----------- ----------- --------
Bank Premises and
Equipment 38,011 1,074 2.83%
Goodwill and Core
Deposit Intangible 58,372 2,039 3.49%
Other Assets 77,981 (218) -0.28%
----------- ----------- --------
Total Assets $ 2,675,623 92,643 3.46%
=========== =========== ========
Liabilities and
Stockholders'
Equity
Deposits
Demand Deposits $ 493,678 (22,514) -4.56%
Savings and
Interest
Checking
Accounts 566,728 20,746 3.66%
Money Market 433,996 1,796 0.41%
Time
Certificates
of Deposit 519,743 12,437 2.39%
----------- ----------- --------
Total Deposits 2,014,145 12,465 0.62%
----------- ----------- --------
Borrowings
Federal Home
Loan Bank
Borrowings 282,626 28,499 10.08%
Fed Funds
Purchased and
Assets Sold
Under Repurchase
Agreements 91,693 46,910 51.16%
Junior Subordin-
ated Debentures 51,547 0 0.00%
Other Borrowings 5,043 (1,974) -39.14%
----------- ----------- --------
Total Borrowings 430,909 73,435 17.04%
----------- ----------- --------
Total Deposits and
Borrowings 2,445,054 85,900 3.51%
Other Liabilities 16,375 270 1.65%
Stockholders'
Equity 214,194 6,473 3.02%
----------- ----------- --------
Total Liabilities
and Stockholders'
Equity $ 2,675,623 92,643 3.46%
=========== =========== ========
INDEPENDENT BANK CORP. FINANCIAL SUMMARY
----------------------------------------
(Unaudited - Dollars in Thousands, Except Per Share Data)
CONSOLIDATED STATEMENTS
OF INCOME Quarter Ended
-------------------------------------------
December 31, $ %
2007 2006 Variance Change
---------------------------------------------------------------------
INTEREST INCOME
Interest on Fed Funds
Sold and Short Term
Investments $ 56 $ 785 (729) -92.87%
Interest and Dividends
on Securities 6,071 7,320 (1,249) -17.06%
Interest on Loans 34,033 34,870 (837) -2.40%
-------------------------------------------
Total Interest
Income 40,160 42,975 (2,815) -6.55%
-------------------------------------------
INTEREST EXPENSE
Interest on Deposits 10,611 11,700 (1,089) -9.31%
Interest on Borrowed
Funds 5,058 6,565 (1,507) -22.96%
-------------------------------------------
Total Interest
Expense 15,669 18,265 (2,596) -14.21%
-------------------------------------------
Net Interest Income 24,491 24,710 (219) -0.89%
Less - Provision
for Loan Losses 1,355 705 650 92.20%
-------------------------------------------
Net Interest Income
after Provision for
Loan Losses 23,136 24,005 (869) -3.62%
-------------------------------------------
NON-INTEREST INCOME
Service Charges on
Deposit Accounts 3,720 3,581 139 3.88%
Wealth Management 2,240 1,631 609 37.34%
Mortgage Banking
Income 949 705 244 34.61%
BOLI Income 591 530 61 11.51%
Net Loss on Sale
of Securities -- (1,392) 1,392 -100.00%
Other Non-Interest
Income 999 898 101 11.25%
-------------------------------------------
Total Non-Interest
Income 8,499 5,953 2,546 42.77%
-------------------------------------------
NON-INTEREST EXPENSE
Salaries and Employee
Benefits 13,252 11,866 1,386 11.68%
Occupancy and Equipment
Expenses 2,375 2,443 (68) -2.78%
Data Processing and
Facilities Management 1,216 1,178 38 3.23%
Recovery on WorldCom
Bond Claim -- (1,892) 1,892 -100.00%
Other Non-Interest
Expense 5,164 4,668 496 10.63%
-------------------------------------------
Total Non-Interest
Expense 22,007 18,263 3,744 20.50%
-------------------------------------------
INCOME BEFORE
INCOME TAXES 9,628 11,695 (2,067) -17.67%
-------------------------------------------
PROVISION FOR
INCOME TAXES 1,898 3,594 (1,696) -47.19%
-------------------------------------------
NET INCOME $ 7,730 $ 8,101 (371) -4.58%
===========================================
BASIC EARNINGS
PER SHARE $ 0.56 $ 0.55 1.82%
DILUTED EARNINGS
PER SHARE $ 0.56 $ 0.54 3.70%
BASIC AVERAGE SHARES 13,734,231 14,681,644 -6.45%
DILUTED AVERAGE SHARES 13,840,654 14,880,143 -6.99%
PERFORMANCE RATIOS:
------------------
Net Interest
Margin (FTE) 3.94% 3.74% 5.35%
Return on Average
Assets 1.13% 1.12% 0.89%
Return on Average
Equity 14.08% 14.25% -1.19%
RECONCILIATION TABLE
- NON-GAAP
FINANCIAL
INFORMATION
NET INCOME
(GAAP) $ 7,730 $ 8,101 (371) -4.58%
Net Interest
Income
Components
Add - Write-Off
of Debt
Issuance Cost,
net of tax -- 647
Non-Interest
Income Components
Add - Net Loss
on Sale of
Securities,
net of tax -- 905
Less - Net Gain
on Sale of
Securities,
net of tax -- --
Less - BOLI
Benefit Proceeds,
net of tax -- --
Non-Interest
Expense Components
Add - Executive
Early Retirement
Costs, net of tax -- --
Add - Prepayment
Fees on Borrowings,
net of tax -- 53
Add - Litigation
Judgment, net
of tax -- --
Less - Recovery on
WorldCom Bond
Claim, net of tax -- (1,230)
---------- ---------- -------
NET OPERATING
EARNINGS $ 7,730 $ 8,476 (746) -8.80%
========== ========== =======
---------- ----------
Diluted Earnings
Per Share, on an
Operating Basis $ 0.56 $ 0.57 -1.75%
========== ==========
Year to Date
-------------------------------------------
December 31, $ %
2007 2006 Variance Change
---------------------------------------------------------------------
INTEREST INCOME
Interest on Fed Funds
Sold and Short Term
Investments $ 1,468 $ 1,514 (46) -3.04%
Interest and Dividends
on Securities 22,879 29,792 (6,913) -23.20%
Interest on Loans 135,391 136,387 (996) -0.73%
-------------------------------------------
Total Interest
Income 159,738 167,693 (7,955) -4.74%
-------------------------------------------
INTEREST EXPENSE
Interest on Deposits 43,639 40,793 2,846 6.98%
Interest on Borrowed
Funds 19,916 24,245 (4,329) -17.86%
-------------------------------------------
Total Interest
Expense 63,555 65,038 (1,483) -2.28%
-------------------------------------------
Net Interest Income 96,183 102,655 (6,472) -6.30%
Less - Provision
for Loan Losses 3,130 2,335 795 34.05%
------------------------------------------
Net Interest Income
after Provision for
Loan Losses 93,053 100,320 (7,267) -7.24%
-------------------------------------------
NON-INTEREST INCOME
Service Charges on
Deposit Accounts 14,414 14,233 181 1.27%
Wealth Management 8,110 6,128 1,982 32.34%
Mortgage Banking
Income 3,166 2,699 467 17.30%
BOLI Income 2,004 3,259 (1,255) -38.51%
Net Loss on Sale
of Securities -- (3,161) 3,161 -100.00%
Other Non-Interest
Income 4,357 3,486 871 24.99%
-------------------------------------------
Total Non-Interest
Income 32,051 26,644 5,407 20.29%
-------------------------------------------
NON-INTEREST EXPENSE
Salaries and Employee
Benefits 52,520 47,890 4,630 9.67%
Occupancy and Equipment
Expenses 9,932 10,060 (128) -1.27%
Data Processing and
Facilities Management 4,584 4,440 144 3.24%
Recovery on WorldCom
Bond Claim -- (1,892) 1,892 -100.00%
Other Non-Interest
Expense 20,896 18,856 2,040 10.82%
-------------------------------------------
Total Non-Interest
Expense 87,932 79,354 8,578 10.81%
-------------------------------------------
INCOME BEFORE
INCOME TAXES 37,172 47,610 (10,438) -21.92%
-------------------------------------------
PROVISION FOR
INCOME TAXES 8,791 14,759 (5,968) -40.44%
-------------------------------------------
NET INCOME $ 28,381 $ 32,851 (4,470) -13.61%
===========================================
BASIC EARNINGS
PER SHARE $ 2.02 $ 2.20 -8.18%
DILUTED EARNINGS
PER SHARE $ 2.00 $ 2.17 -7.83%
BASIC AVERAGE SHARES 14,033,257 14,938,095 -6.06%
DILUTED AVERAGE SHARES 14,160,598 15,109,873 -6.28%
PERFORMANCE RATIOS:
------------------
Net Interest
Margin (FTE) 3.90% 3.85% 1.30%
Return on Average
Assets 1.05% 1.12% -6.25%
Return on Average
Equity 12.93% 14.60% -11.44%
RECONCILIATION TABLE
- NON-GAAP
FINANCIAL
INFORMATION
NET INCOME
(GAAP) $ 28,381 $ 32,851 (4,470) -13.61%
Net Interest
Income
Components
Add - Write-Off
of Debt
Issuance Cost,
net of tax 590 647
Non-Interest
Income Components
Add - Net Loss
on Sale of
Securities,
net of tax -- 2,055
Less - Net Gain
on Sale of
Securities,
net of tax -- --
Less - BOLI
Benefit Proceeds,
net of tax -- (1,316)
Non-Interest
Expense Components
Add - Executive
Early Retirement
Costs, net of tax 264 --
Add - Prepayment
Fees on Borrowings,
net of tax -- 53
Add - Litigation
Judgment, net
of tax 885 --
Less - Recovery on
WorldCom Bond
Claim, net of tax -- (1,230)
NET OPERATING ---------- ---------- -------
EARNINGS $ 30,120 $ 33,060 (2,940) -8.89%
========== ========== =======
---------- ----------
Diluted Earnings
Per Share, on an
Operating Basis $ 2.13 $ 2.19 -2.74%
========== ==========
INDEPENDENT BANK CORP.
SUPPLEMENTAL FINANCIAL INFORMATION
CONSOLIDATED AVERAGE BALANCE SHEETS AND AVERAGE RATE DATA
(Unaudited - Dollars in Thousands)
Three Months Ended December 31,
-------------------------------------------
2007
-------------------------------------------
Interest
Ending Average Earned/ Yield/
Balance Balance Paid Rate
---------------------------------------------------------------------
Interest-Earning Assets:
Federal Funds Sold
and Short Term
Investments $ 0 $ 1,073 $ 56 20.88%
Securities:
Trading Assets 1,687 1,724 15 3.48%
Taxable Investment
Securities 456,724 458,080 5,552 4.85%
Non-taxable
Investment
Securities(a) 49,059 49,449 776 6.28%
---------- ---------- -----------------
Total Securities: 507,470 509,253 6,343 4.98%
---------- ---------- -----------------
Loans(a) 2,042,952 2,015,811 34,154 6.78%
Total Interest-Earning
Assets $2,550,422 $2,526,137 $40,553 6.42%
---------- ---------- -----------------
Cash and Due from
Banks 67,416 57,305
Other Assets 150,428 147,933
---------- ----------
Total Assets $2,768,266 $2,731,375
========== ==========
Interest-bearing
Liabilities:
Deposits:
Savings and Interest
Checking Accounts $ 587,474 $ 574,727 $ 1,865 1.30%
Money Market 435,792 447,431 3,155 2.82%
Time Deposits 532,180 521,902 5,591 4.29%
---------- ---------- -----------------
Total
interest-bearing
deposits: 1,555,446 1,544,060 10,611 2.75%
Borrowings:
Federal Home Loan
Bank Borrowings $ 311,125 $ 277,127 $ 3,050 4.40%
Federal Funds Purchased
and Assets Sold Under
Repurchase Agreement 138,603 136,040 1,107 3.25%
Junior Subordinated
Debentures 51,547 51,547 861 6.68%
Other Borrowings 3,069 3,025 40 5.29%
---------- ---------- -----------------
Total Borrowings: 504,344 467,739 5,058 4.33%
---------- ---------- -----------------
Total Interest-Bearing
Liabilities $2,059,790 $2,011,799 $15,669 3.12%
---------- ---------- -----------------
Demand Deposits 471,164 485,923
Other Liabilities 16,645 14,014
---------- ----------
Total Liabilities $2,547,599 $2,511,736
Stockholders' Equity 220,667 219,639
---------- ----------
Total Liabilities
and Stockholders'
Equity $2,768,266 $2,731,375
========== ==========
Net Interest Income $24,884
=======
Interest Rate
Spread(b) 3.30%
=======
Net Interest
Margin(c) 3.94%
=======
Supplemental Information:
Total Deposits,
including Demand
Deposits $2,026,610 $2,029,983 $10,611
Cost of Total Deposits 2.09%
Total Funding
Liabilities, including
Demand Deposit $2,530,954 $2,497,722 $15,669
Cost of Total Funding
Liabilities 2.51%
Three Months Ended December 31,
-------------------------------------------
2006
-------------------------------------------
Interest
Average Earned/ Yield/
Balance Paid Rate
---------------------------------------------------------------------
Interest-Earning Assets:
Federal Funds Sold
and Short Term
Investments $59,122 $ 785 5.31%
Securities:
Trading Assets 1,593 11 2.76%
Taxable Investment
Securities 539,417 6,724 4.99%
Non-taxable
Investment
Securities(a) 55,148 900 6.53%
---------- ---------------------------
Total Securities: 596,158 7,635 5.12%
---------- ---------------------------
Loans(a) 2,032,331 34,983 6.89%
Total Interest-Earning
Assets $2,687,611 $ 43,403 6.46%
---------- ---------------------------
Cash and Due from
Banks 59,809
Other Assets 149,754
----------
Total Assets $2,897,174
==========
Interest-bearing
Liabilities:
Deposits:
Savings and Interest
Checking Accounts $ 564,638 $ 1,576 1.12%
Money Market 510,534 3,965 3.11%
Time Deposits 583,087 6,159 4.23%
---------- ---------------------------
Total
interest-bearing
deposits: 1,658,259 11,700 2.82%
Borrowings:
Federal Home Loan
Bank Borrowings $ 323,980 $ 3,493 4.31%
Federal Funds Purchased
and Assets Sold Under
Repurchase Agreement 115,593 910 3.15%
Junior Subordinated
Debentures 52,947 2,152 16.26%
Other Borrowings 966 10 4.14%
---------- ---------------------------
Total Borrowings: 493,486 6,565 5.32%
---------- ---------------------------
Total Interest-Bearing
Liabilities $2,151,745 $ 18,265 3.40%
---------- ---------------------------
Demand Deposits 499,508
Other Liabilities 18,592
----------
Total Liabilities $2,669,845
Stockholders' Equity 227,329
----------
Total Liabilities
and Stockholders'
Equity $2,897,174
==========
Net Interest Income $25,138
=======
Interest Rate
Spread(b) 3.06%
=======
Net Interest
Margin(c) 3.74%
=======
Supplemental Information:
Total Deposits,
including Demand
Deposits $2,157,767 $ 11,700
Cost of Total Deposits 2.17%
Total Funding
Liabilities, including
Demand Deposits $2,651,253 $ 18,265
Cost of Total Funding
Liabilities 2.76%
(a) The total amount of adjustment to present interest income and
yield on a fully tax-equivalent basis is $393 and $428 for the
three months ended December 31, 2007 and 2006, respectively.
(b) Interest rate spread represents the difference between the
weighted average yield on interest-earning assets and the
weighted average cost of interest-bearing liabilities.
(c) 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)
Twelve Months Ended December 31,
-------------------------------
2007
-------------------------------
Interest
Ending Average Earned/ Yield/
Balance Balance Paid Rate
---------------------------------------------------------------------
Interest-Earning Assets:
Federal Funds Sold and
Short Term Investments $ 0 $ 26,630 $ 1,468 5.51%
Securities:
Trading Assets 1,687 1,692 48 2.84%
Taxable Investment
Securities 456,724 433,186 20,694 4.78%
Non-taxable Investment
Securities(a) 49,059 51,181 3,288 6.42%
---------- -------------------------------
Total Securities: 507,470 486,059 24,030 4.94%
Loans(a) 2,042,952 1,994,273 135,874 6.81%
---------- -------------------------------
Total Interest-
Earning Assets $2,550,422 $2,506,962 $ 161,372 6.44%
---------- -------------------------------
Cash and Due from Banks 67,416 59,009
Other Assets 150,428 148,494
---------- ----------
Total Assets $2,768,266 $2,714,465
========== ==========
Interest-bearing Liabilities:
Deposits:
Savings and Interest
Checking Accounts $ 587,474 $ 575,269 $ 7,731 1.34%
Money Market 435,792 462,434 13,789 2.98%
Time Deposits 532,180 531,016 22,119 4.17%
---------- -------------------------------
Total interest-bearing
deposits: 1,555,446 1,568,719 43,639 2.78%
Borrowings:
Federal Home Loan Bank
Borrowings $ 311,125 $ 254,516 $ 11,316 4.45%
Federal Funds Purchased
and Assets Sold Under
Repurchase Agreement 138,603 109,344 3,395 3.10%
Junior Subordinated
Debentures 51,547 59,950 5,048 8.42%
Other Borrowings 3,069 2,627 157 5.98%
---------- -------------------------------
Total Borrowings: 504,344 426,437 19,916 4.67%
---------- -------------------------------
Total Interest-Bearing
Liabilities $2,059,790 $1,995,156 $ 63,555 3.19%
---------- -------------------------------
Demand Deposits 471,164 485,922
Other Liabilities 16,645 13,914
---------- ----------
Total Liabilities $2,547,599 $2,494,992
Stockholders' Equity 220,667 219,473
---------- ----------
Total Liabilities and
Stockholders' Equity $2,768,266 $2,714,465
========== ==========
Net Interest Income $ 97,817
==========
Interest Rate Spread(b) 3.25%
====
Net Interest Margin(b) 3.90%
====
Supplemental Information:
Total Deposits, including
Demand Deposits $2,026,610 $2,054,641 $ 43,639
Cost of Total Deposits 2.12%
Total Funding Liabilities,
including Demand
Deposits $2,530,954 $2,481,078 $ 63,555
Cost of Total Funding
Liabilities 2.56%
Twelve Months Ended December 31,
-------------------------------
2006
-------------------------------
Interest
Average Earned/ Yield/
Balance Paid Rate
---------------------------------------------------------------------
Interest-Earning Assets:
Federal Funds Sold and Short
Term Investments $ 29,464 $ 1,514 5.14%
Securities:
Trading Assets 1,570 42 2.68%
Taxable Investment Securities 581,372 27,229 4.68%
Non-taxable Investment
Securities(a) 57,725 3,879 6.72%
-------------------------------
Total Securities: 640,667 31,150 4.86%
Loans(a) 2,041,098 136,802 6.70%
-------------------------------
Total Interest-Earning Assets $2,711,229 $ 169,466 6.25%
-------------------------------
Cash and Due from Banks 59,834
Other Assets 151,295
----------
Total Assets $2,922,358
==========
Interest-bearing Liabilities:
Deposits:
Savings and Interest Checking
Accounts $ 563,615 $ 4,810 0.85%
Money Market 524,265 14,872 2.84%
Time Deposits 563,212 21,111 3.75%
-------------------------------
Total interest-bearing deposits: 1,651,092 40,793 2.47%
Borrowings:
Federal Home Loan Bank Borrowings $ 365,597 $ 15,524 4.25%
Federal Funds Purchased and Assets
Sold Under Repurchase Agreement 113,448 3,171 2.80%
Junior Subordinated Debentures 51,899 5,504 10.61%
Other Borrowings 1,081 46 4.26%
-------------------------------
Total Borrowings: 532,025 24,245 4.56%
-------------------------------
Total Interest-Bearing Liabilities $2,183,117 $ 65,038 2.98%
-------------------------------
Demand Deposits 495,958
Other Liabilities 18,286
----------
Total Liabilities $2,697,361
Stockholders' Equity 224,997
----------
Total Liabilities and
Stockholders' Equity $2,922,358
==========
Net Interest Income $ 104,428
==========
Interest Rate Spread(b) 3.27%
=====
Net Interest Margin(b) 3.85%
=====
Supplemental Information:
Total Deposits, including
Demand Deposits $2,147,050 $ 40,793
Cost of Total Deposits 1.90%
Total Funding Liabilities,
including Demand Deposits $2,679,075 $ 65,038
Cost of Total Funding Liabilities 2.43%
(a) The total amount of adjustment to present interest income and
yield on a fully tax-equivalent basis is $1,634 for the twelve
months ended December 31, 2007 and $1,773 for the twelve months
ended December 31, 2006.
(b) Interest rate spread represents the difference between the
weighted average yield on interest-earning assets and the
weighted average cost of interest-bearing liabilities. Net
interest margin represents annualized net interest income as a
percentage of average interest-earning assets.
As Of
Dec. 31, Dec. 31, Sept. 30,
2007 2006 2007
-------- -------- --------
Asset Quality (Dollars in Thousands,
------------- Except Per Share Data)
Nonperforming Loans
Commercial & Industrial Loans $306 $872 $562
Business Banking Loans $439 $74 $342
Commercial Real Estate Loans $2,568 $2,346 $2,677
Residential Real Estate Loans $2,380 $2,318 $1,224
Installment Loans - Home Equity $872 $358 $747
Installment Loans - Auto $833 $703 $651
Installment Loans - Other $246 $308 $148
-------- -------- --------
Total Nonperforming Loans $7,644 $6,979 $6,351
-------- -------- --------
Other Real Estate Owned $681 $190 $245
Nonperforming Assets $8,325 $7,169 $6,596
======== ======== ========
Net charge-offs (year to date) $3,114 $2,159 $2,397
Net charge-offs to average loans
(annualized) 0.16% 0.11% 0.16%
Nonperforming Loans/Gross Loans 0.37% 0.34% 0.32%
Allowance for Loan Losses/
Nonperforming Loans 351.01% 384.22% 412.41%
Loans/Total Deposits 100.81% 96.87% 98.71%
Allowance for Loan Losses/
Total Loans 1.31% 1.32% 1.32%
Financial Ratios
----------------
Book Value per Share $16.05 $15.65 $15.61
Tangible Capital/Tangible
Asset 5.92% 6.25% 5.95%
Tangible Capital/Tangible
Asset (proforma to
include the
deductibility of
goodwill) 6.45% 6.77% 6.51%
Tangible Book Value per Share $11.66 $11.80 $11.35
Tangible Book Value per Share
(proforma to include the
deductibility of goodwill) $12.71 $12.78 $12.41
Capital Adequacy
----------------
Tier one leverage capital
ratio(a) 8.04% 8.05% 7.98%
(a) Estimated number for December 31, 2007
Certain amounts in prior year financial statement have been
reclassified to conform to the current year's presentation.