Independent Bank Corp. Reports Operating Results (10-Q)
Independent Bank Corp. has a market cap of $499.9 million; its shares were traded at around $23.6 with a P/E ratio of 15 and P/S ratio of 2.1. The dividend yield of Independent Bank Corp. stocks is 3%.INDB is in the portfolios of Private Capital of Private Capital Management.
Highlight of Business Operations: The Company reported diluted earnings per share of $0.38 and $0.82 for the three and six months ending June 30, 2010, compared to diluted loss per share of $0.19 and diluted earnings per share of $0.07 for the three and six months ending June 30, 2009. Additionally, the Companys return on average assets and return on average equity were 0.70% and 7.60%, respectively, for the quarter ended June 30, 2010 as compared to (0.35%) and (3.97%), respectively, for the quarter ended June 30, 2009. The Companys return on average assets and return on average equity were 0.77% and 8.26%, respectively, for the six months ended June 30, 2010 as compared to 0.07% and 0.69%, respectively, for the six months ended June 30, 2009. The significant increases from the year ago period are driven largely by merger and acquisition expenses incurred in the first half of 2009 and the Companys exit from the Capital Purchase Program in the first half of 2009.
Total deposits of $3.7 billion at June 30, 2010 increased $304.6 million, or 9.0%, compared to December 31, 2009, primarily as a result of strong growth in commercial deposits and managements strategy to grow the municipal banking business. Time deposits decreased by $92.9 million due to the Companys strategy to focus on lower-cost core deposits. In the current interest rate environment, management is focused on cultivating a strong deposit base with rational pricing for customer retention as well as core deposit growth. At June 30, 2010 core deposits were 77.6% of total deposits, an increase of 16.2% from December 31, 2009.
Net charge-offs increased to $6.9 million, or 0.81% annualized of average loans for the second quarter compared to $1.7 million or 0.21% for the quarter ending March 31, 2010. Second quarter net charge-offs included a write down taken on the sale of a nonperforming loan subsequent to the end of the quarter. The provision for loan losses was $6.9 million and $4.7 million for the quarters ended June 30, 2010 and March 31, 2010, respectively, an increase of $2.2 million. The table below shows net charge-offs for the periods indicated:
Nonperforming loans decreased significantly to $23.7 million or 0.69% of total loans at June 30, 2010, from $41.8 million, or 1.23% of total loans at March 31, 2010. As a result, the allowance for loan losses as a percentage of nonperforming loans improved from 108.22% in the prior quarter to 191.28% in the second quarter. The table below shows nonperforming loans for the periods indicated:
Delinquency levels have also shown significant improvement with delinquencies as a percent of loans at 1.32% at June 30, 2010 compared to 1.83% at March 31, 2010. The Companys allowance for loan losses as a percentage of total loans remains consistent at 1.32%. The table below shows delinquencies for the periods indicated:
Net income for the three and six months ended June 30, 2010 were $8.0 million and $17.3 million, an increase of $7.4 million and $10.2 million as compared to the same periods in 2009. Excluding certain non-core items mentioned below, net operating earnings were up 19.5% and 43.3% from the same periods in the prior year.
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