Independent Bank Corp. Reports Operating Results (10-Q)
Independent Bank Corp. has a market cap of $620.6 million; its shares were traded at around $29.2 with a P/E ratio of 14.7 and P/S ratio of 2.5. The dividend yield of Independent Bank Corp. stocks is 2.6%.
Highlight of Business Operations: The first quarter of 2011 was marked by continued positive results. The Company experienced solid loan growth, strong core deposit levels, and favorable asset quality trends, resulting in net income of $11.2 million, or $0.52 on a diluted per share basis for the three months ended March 31, 2011, which represents an increase of 21.3% and 18.2%, respectively as compared to the three months ended March 31, 2010. The Company was able to achieve such strong results by continuing to generate growth in both the commercial and industrial and commercial real estate categories, resulting in total commercial loan portfolio growth of 2.2%, or 9.0% annualized from the prior quarter. The Companys home equity portfolio has also shown solid growth, with an increase of 6.9%, or 28.3% on an annualized basis, as compared to prior quarter. The following table illustrates key performance measures for the periods indicated, highlighting the positive results:
The Company continued to experience positive asset quality trends during the first quarter of 2011. Net charge-offs have decreased to $2.0 million, or 0.23% of average loans on an annualized basis, down from $2.9 million, or 0.33% of average loans on an annualized basis for the quarter ended December 31, 2010. Both early and late stage delinquencies were stable quarter over quarter, which is attributed to the Companys focused loan workout efforts, with total delinquencies representing 1.19% and 1.11% of loans and early stage delinquencies representing 0.71% and 0.65% of loans at March 31, 2011 and December 31, 2010, respectively. Although nonperforming assets increased modestly in the first quarter of 2011 to $33.9 million, or 0.73% of assets as compared to $31.5 million, or 0.67% of total assets at December 31, 2010, they are down significantly when compared to the first quarter of 2010 with decreases of $15.0 million, or 30.7%. Nonperforming assets are reviewed and
As a result of the positive asset quality trends, the Company reduced provision for loan loss levels. The provision for loan losses was $2.2 million for the three months ended March 31, 2011 as compared to $4.7 million for the three months ended March 31, 2010. The Companys allowance as a percentage of total loans was at 1.28% as compared to 1.30% and 1.33% for the quarters ended December 31, 2010 and March 31, 2010, respectively.
The Company continues to generate adequate levels of capital internally to fund future growth. The Companys capital levels increased by $11.5 million, or 2.6%, from December 31, 2010, resulting in strong capital ratios and a tangible common equity ratio which improved to 7.22%, pro forma to include the tax deductibility of certain goodwill, and regulatory capital levels exceeded prescribed thresholds. As a result, the Company increased the common stock dividend to $0.19 per share for the quarter ended March 31, 2011, an increase of 5.56%.
Securities Portfolio The Companys securities portfolio consists of trading assets, securities available for sale, and securities which management intends to hold until maturity. Securities remained relatively flat at $589.2 million at March 31, 2011 as compared to December 31, 2010. The Company purchased fixed rate mortgage-backed securities to replace runoff of existing securities during the quarter. The ratio of securities to total assets as of March 31, 2011 was 12.7% compared to 12.5% at December 31, 2010.
otherwise may have been achieved, management believes the change to be prudent given the prevailing interest rate and economic environment. At March 31, 2011, the Banks loan portfolio amounted to $3.6 billion, an increase of $72.7 million, or 2.0%, from December 31, 2010. The Company was able to sustain growth by continuing to generate growth in both the commercial and industrial and commercial real estate categories, resulting in total commercial portfolio growth of 2.2%, or 9.0% annualized from the prior quarter. The Companys home equity portfolio has also shown solid growth, with increases of 6.9%, or 28.3% on an annualized basis, as compared to prior quarter.
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