Independent Bank Corp. Reports Operating Results (10-Q)
Independent Bank Corp. is a bank holding company for Rockland Trust Company. They are a community-oriented commercial bank. The community banking business consists of commercial banking retail banking and trust services and is managed as a single strategic unit. The community banking business derives its revenues from a wide range of banking services including lending activities acceptance of demand savings and time deposits trust and investment management and mortgage servicing income from investors. Independent Bank Corp. has a market cap of $327.5 million; its shares were traded at around $20.11 with a P/E ratio of 14.1 and P/S ratio of 1.6. The dividend yield of Independent Bank Corp. stocks is 3.6%. Independent Bank Corp. had an annual average earning growth of 6.2% over the past 10 years. Highlight of Business Operations: The Company reported net income of $6.4 million for the three months ending March 31, 2009, an increase of 1.3%, as compared to the same period in 2008. Net income available to common shareholders which is reflective of preferred stock dividends of $1.2 million, was $5.2 million at March 31, 2009. The Company paid no preferred stock dividends in the same year ago period. Excluding certain non-core items mentioned below, net operating earnings were $5.3 million, or $0.33 per diluted common share for the three month ended March 31, 2009, down 23.1% from the same period in the prior year.
Non-interest income increased by $2.2 million, or 27.1%, for the three months ended March 31, 2009 compared to the three months ended March 31, 2008. Excluding the gain on the sale of securities in the first quarter of 2009 and the loss on the sale of securities in the first quarter of 2008, non-interest income increased $247,000, or 2.8%, when compared to 2008. See the table below for a reconciliation of non-interest income as adjusted.
management amounted to $1.1 billion, a decrease of $230.4 million, or 17.8%, as compared to the assets under management at March 31, 2008. The decrease is due to the general declines in the stock market in these comparable periods.
Non-interest expense increased by $4.3 million, or 17.8% for the quarter ended March 31, 2009, as compared to the same period in the prior year. When adjusting the reported level of non-interest expense for merger and acquisition expenses, non-interest expense increased $3.1 million, or 12.9%, for the three months ending March 31, 2009, as compared to the same period in 2008, which excluded expenses associated with merger and acquisition and a recovery on WorldCom bonds. See the table below for a reconciliation of non-interest expense as adjusted.
Total deposits of $2.7 billion at March 31, 2009 increased $74.7 million, or 2.9%, compared to December 31, 2008. The Company believes that the deposit increase is primarily due to customers retaining additional balances in their accounts in light of a turbulent stock market. The Company maintains a solid core deposit base with a strong level of demand deposits which is critical in maintaining its cost of funds.
Net loan charge-offs were higher for the three months ended March 31, 2009 compared to March 31, 2008, amounting to an annual rate of 53 basis points of average loans. The allowance for loan losses as a percentage of total loans was 1.40% at March 31, 2009 compared to 1.39% at December 31, 2008, and 1.29% at March 31, 2008, maintaining the allowance for loan losses at a level that management considers adequate to provide for probable loan losses based upon an evaluation of known and inherent risks in the loan portfolio. (See Table 2 of Nonperforming Assets/ Loans for detail on nonperforming assets.) Provision for loan losses was $4.0 million for the quarter ended March 31, 2009, an increase of $2.7 million from the respective year ago period. The increase in provision is mainly driven by growth in the loan portfolio and increased levels of loan delinquency, and non-performing loans primarily due to the current economic conditions.
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