Independent Bank Corporation is a bank holding company. Its subsidiary banks principally serve rural and suburban communities located across Michigan's Lower Peninsula. The Banks emphasize service and convenience as a principal means of competing in the delivery of financial services. Independent Bank Corp. has a market cap of $60.8 million; its shares were traded at around $2.53 with and P/S ratio of 0.3. The dividend yield of Independent Bank Corp. stocks is 1.6%.
Highlight of Business Operations:Our tax equivalent net interest income is also adversely impacted by our level of non-accrual loans. In the first quarter of 2009 non-accrual loans averaged $127.5 million compared to $83.0 million in the first quarter of 2008. In addition, we reversed $0.9 million of accrued and unpaid interest on loans placed on non-accrual in the first quarter of 2009 compared to $0.8 million during the first quarter of 2008.
Gains on the sale of mortgage loans were $3.3 million and $1.9 million in the first quarters of 2009 and 2008, respectively. Mortgage loan sales totaled $142.6 million in the first quarter of 2009 compared to $84.4 million in the first quarter of 2008. Mortgage loans originated totaled $154.6 million in the first quarter of 2009 compared to $118.2 million in the comparable quarter of 2008. The growth in mortgage loan originations is primarily due to a decline in mortgage loan interest rates leading to an increase in refinancing activity.
Securities losses totaled $0.6 million in the first quarter of 2009, versus losses of $2.2 million in the comparable period in 2008. These securities losses were due to declines in the fair value of trading securities of $0.8 million and $2.2 million in the first quarters of 2009 and 2008, respectively. The first quarter of 2009 also included $0.2 million of securities gains due principally to the sale of municipal securities. Pursuant to SFAS #159, we elected, effective January 1, 2008, to measure the majority of our preferred stock investments at fair value. There were no significant other than temporary impairment charges on securities in either the first quarter of 2009 or 2008. (See Securities.)
Mortgage loan servicing resulted in losses of $0.8 million and $0.3 million in the first quarters of 2009 and 2008, respectively. This decline is primarily due to a $0.5 million increase in the amortization of this asset due to a rise in mortgage loan prepayment activity. Activity related to capitalized mortgage loan servicing rights is as follows:
Income tax expense (benefit) Income tax expense for the first quarter of 2009 was $0.3 million, an increase of $2.3 million over the first quarter of 2008. Even though we incurred a significant loss before income taxes in the first quarter of 2009, a valuation allowance is being provided against the net deferred tax asset created from this loss, resulting in an elimination of any tax benefit. The $0.3 million income tax expense in the first quarter of 2009 relates to certain state income taxes and to some federal alternative minimum tax. The first quarter 2008 income tax benefit included a $1.6 million reduction in our federal income taxes due to the release of a previously established tax reserve resulting from a favorable development on the treatment of a particular tax issue prevalent in the banking industry.
Deposits totaled $2.161 billion at March 31, 2009, compared to $2.066 billion at December 31, 2008. The $94.5 million rise in total deposits during the period is due to increases in savings and NOW accounts and brokered certificates of deposit (Brokered CDs). Other borrowings totaled $444.4 million at March 31, 2009, a decrease of $97.6 million from December 31, 2008. This decrease reflects the payoff of borrowings from the Federal Reserve Bank or Federal Home Loan Bank of Indi
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