Exhibit 99.1
INDEPENDENT
BANK CORP.
Parent of Rockland Trust Company
| | | |
Stockholder Relations | | NEWS RELEASE |
| |
| 288 Union Street, Rockland, MA 02370 | | Contact: |
Chris Oddleifson
President and
Chief Executive Officer
(781) 982-6660
Denis K. Sheahan
Chief Financial Officer
(781) 982-6341
INDEPENDENT BANK CORP. ANNOUNCES 2004 RESULTS
Rockland, Massachusetts (January 13, 2005). Independent Bank Corp., (NASDAQ: INDB), parent of Rockland Trust Company, today announced that net income for the quarter ended December 31, 2004 was $9.2 million and that diluted earnings per share for the quarter were $0.59, an increase of $1.9 million or $0.10 per diluted earnings per share, compared to net income of $7.3 million and diluted earnings per share of $0.49 for the quarter ended December 31, 2003. For the twelve months ended December 31, 2004, net income was $30.8 million and diluted earnings per share were $2.03, an increase of $4.3 million or $0.24 per diluted earnings per share, compared to net income of $26.4 million and diluted earnings per share of $1.79 for the same period in 2003. The Company experienced robust loan and core deposit growth of $335.2 million, or 21.2%, and $279.2 million, or 21.0%, respectively during 2004. Organic loan and deposit growth during 2004, excluding the acquisition of Falmouth Bancorp. Inc (“Falmouth”), was $237.5 million and $140.2 million, respectively.
As previously announced, Independent Bank Corp. acquired Falmouth Bancorp, Inc. (“Falmouth”) on July 16, 2004. That acquisition attributed to many of the balance sheet variances discussed below.
Comparing the fourth quarter of 2004 to the same period last year, net interest income increased $2.7 million, or 11.4%, while net interest income for the twelve months ended December 31, 2004 increased $2.0 million, or 2.1%, from the twelve months ended December 31, 2003. The net interest margin for the three and twelve month periods ended December 31, 2004 was 3.96% and 3.95%, respectively, as compared to 4.26% and 4.40%, for the comparable periods last year.
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The Company’s adoption of a new accounting standard on March 31, 2004 caused certain expenses to be reclassified to interest expense prospectively and contribute, on an annualized basis, approximately 19 basis points to the compression of the net interest margin when compared to reported net interest margin calculations prior to the second quarter of 2004(See note below pertaining to FIN46R).The remainder of the net interest margin compression is a consequence of the prolonged low interest rate environment, coupled with what the Company believes to be the prudent management of its balance sheet in anticipation of rising interest rates. The impact of the low interest rate margin has been mitigated, to some extent, by the Company’s continued ability to generate loan growth. During the fourth quarter of 2004, the net interest margin stabilized and expanded by 8 basis points from the 3.88% reported in the third quarter of 2004.
Non-interest income increased by $1.7 million, or 27.6%, and by $561,000, or 2.0%, during the three and twelve months ended December 31, 2004, respectively, as compared to the same periods in the prior year. The majority of the increase is attributable to the sale of a bank branch in North Eastham, MA during the fourth quarter of 2004 that resulted in a pre-tax gain of approximately $1.8 million.
Service charges on deposit accounts increased by $268,000, or 9.1%, and by $936,000, or 8.2%, for the three and twelve months ended December 31, 2004, respectively, as compared to the same periods in 2003, reflecting strong organic growth in core deposits. Investment management services income increased by $83,000, or 7.8%, and by $343,000 or 7.9%, for the three and twelve months ended December 31, 2004, respectively, compared to the same periods last year due to growth in managed assets. Mortgage banking income decreased by $236,000, or (33.8)%, and $1.7 million, or (37.9)%, for the three and twelve months ended December 31, 2004 as compared to the three and twelve months ended December 31, 2003, respectively, due to the decline in refinancing activity that was at its peak in 2003. The balance of the mortgage servicing asset is $3.3 million and loans serviced amounted to $392.0 million as of December 31, 2004. Other non-interest income increased $89,000, or 11.5%, for the three months ended December 31, 2004, and by $345,000, or 11.1%, for the twelve months ended December 31, 2004, as compared to the same period in 2003, primarily due to increases in commercial loan prepayment fees.
No security gains were recognized in the fourth quarter of 2004 as compared to $302,000 in the same period of 2003. Net security gains were $1.5 million for the twelve months ending December 31, 2004 as compared to $2.6 million for the same period in 2003, a decrease of $1.2 million, or 44.5%. Net security gains of $2.0 million were recorded in the second quarter of 2003 on the sale of $20 million of investment securities as part of a strategy to improve the Company’s overall interest rate risk position and increase the net interest margin. That strategy included prepaying $31.5 million of fixed high rate borrowings and an associated $1.9 million prepayment penalty.
Non-interest expense increased by $3.2 million, or 18.2%, and $3.9 million, or 5.2%, for the three and twelve months ended December 31, 2004, respectively, as compared to the same periods in the prior year. Salaries and employee benefits increased by $2.5 million, or 24.2%, and $3.4 million, or 8.2%, for the three and twelve months ended December 31, 2004, respectively, as compared to the same periods in the prior year partially reflecting additions to staff to support continued growth as well as increased pension expense. Incentive based compensation and profit sharing increased
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by $1.2 million in the fourth quarter ending 2004 as compared to the same period in 2003, contributing significantly to the fourth quarter variance. On a full year basis, the incentive compensation expense decreased by $578,000, or 19.0%, when comparing 2004 to 2003. Occupancy and equipment related expense increased by $318,000, or 16.0%, for the three months ended December 31, 2004, and by $202,000, or 2.3% for the twelve months ended December 31, 2004, compared to the same periods in the prior year. The increase in expense is associated with infrastructure improvements made throughout the year.
A $1.9 million prepayment penalty was incurred during the quarter ended June 30, 2003 as part of the balance sheet repositioning strategy discussed above and was a significant factor in mitigating the non-interest expense increase from the twelve months ended December 31, 2003 to the twelve months ended December 31, 2004.
During the twelve months ended December 31, 2004, the Company incurred expenses of approximately $684,000, or $0.03 per diluted share net of tax, related to the Falmouth acquisition.
Other non-interest expenses increased by $452,000, or 10.7%, and by $1.6 million, or 9.2%, for the three and twelve months ended December 31, 2004, respectively, as compared to the same periods in the prior year. The increase in other non-interest expenses for the year is primarily attributable to increased expenditures for the Company’s key business initiatives. During 2004, the Company incurred business initiative expenses to implement a small business banking model, to expand residential lending, to develop a new set of consumer deposit products, to improve the commercial loan process, to fund retail sales training, and to fund a core information system selection process. The Company estimates that the total cost associated with its business initiatives was approximately $735,000 and $2.1 million for the three and twelve months ended December 31, 2004, respectively, across all expense categories. In addition, advertising and business development increased by $739,000 for the twelve months ended December 31, 2004, respectively, as compared to the same period in the prior year, to support the aforementioned business initiatives and capitalize on market changes due to merger disruption.
Total assets increased by $507.2 million, or 20.8%, from year-end 2003 to $2.9 billion at December 31, 2004. Investments increased by $145.8 million, or 21.7%, during the twelve months ended December 31, 2004, representing a ratio of investments to total assets of approximately 28%. Total loans increased by $335.2 million, or 21.2%, during 2004. The increases were across all loan categories. Consumer loans increased by $119.2 million, or 27.4%, in total. Of the increase, $61.8 million, or 51.9%, was in home equity lines and $43.5 million, or 36.5%, was in auto loans. Total residential real estate increased $110.6 million, or 33.0%. Commercial, including commercial and industrial, increased $105.4 million, or 13.0%. The Falmouth acquisition added approximately $158 million in total acquired assets to the balance sheet, including approximately $98 million in acquired loans which consisted primarily of residential and home equity loans.
Total deposits of $2.1 billion at December 31, 2004 increased $276.9 million, or 15.5%, compared to December 31, 2003. Of the increase, approximately $137 million is attributable to deposits acquired from Falmouth and the majority of the remainder is due to the successful rollout of a set of consumer deposit products and increases in
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municipal deposits as a result of disruption in the local banking market. Borrowings increased by $239.8 million, or 57.7%, during the twelve months ended December 31, 2004. Approximately $51.5 million of the increase in borrowings was due to the Company’s adoption of Financial Accounting Standards Board (“FASB”) Interpretation (“FIN”) No. 46 Revised, entitled “Consolidation of Variable Interest Entities – an Interpretation of Accounting Research Bulletin No. 51” or “FIN 46R” on March 31, 2004. (See FIN 46R discussion below.) Adoption of the new accounting standard effectively reclassified the Company’s Trust Preferred Securities from the mezzanine section of its balance sheet to debt, where it is shown as Junior Subordinated Debentures. While the adoption of FIN 46R does not impact net income, it does reduce the net interest margin by approximately 0.19% on an annualized basis. Prior periods have not been restated. The remainder of the growth in borrowings was incurred to supplement funding for asset growth and to offset a seasonal decline in deposit balances.
Stockholders’ equity as of December 31, 2004 totaled $210.7 million, as compared to $171.8 million at December 31, 2003. The acquisition of Falmouth contributed approximately $16.9 million to equity through the issuance of common stock. The Tier 1 leverage capital ratio at December 31, 2004 was 7.06%, maintaining the Company’s well-capitalized position.
Nonperforming assets totaled $2.7 million at December 31, 2004 (0.09% of total assets), as compared to $3.5 million (0.14% of total assets) reported at December 31, 2003. The provision for loan losses decreased to $3.0 million for the twelve months of 2004, compared to $3.4 million in the same period in 2003, reflecting the Company’s continued strong asset quality and the prospects of an improving economy. The Company’s allowance for loan losses, as a percentage of nonperforming loans, was 932.53% at December 31, 2004 and 659.16% at December 31, 2003.
Overall period to period comparisons between 2004 and 2003 are skewed by the Company’s previously disclosed initial charge for, and subsequent settlement of, a tax dispute with the Massachusetts Department of Revenue (“DOR”) in 2003. The Company recognized a net $2.0 million charge to its provision for income taxes during the first six months of 2003, negatively impacting that year’s earnings.
During the second quarter of 2004, the Company announced that one of its subsidiaries (a Community Development Entity, or “CDE”) had been awarded $30 million in tax credit allocation authority under the New Markets Tax Credit Program of the United States Department of Treasury. During the third and fourth quarters, the Bank invested $5 million and $10 million, respectively, in the CDE to provide it with the capital necessary to begin making loans to qualified businesses in low-income communities throughout its market area. Based upon the Bank’s $15 million investment, it will be eligible to receive tax credits over a seven year period totaling 39% of its investment, or $5.9 million, for its investment to date. The Company has begun recognizing the benefit of these tax credits by reducing the provision for income taxes by a total of $750,000 in 2004 through reductions of $187,500 in the third quarter and $562,500 in the fourth quarter. The remaining $15 million investment will be made in future periods. See below for a schedule depicting the amount of credit and the year in which it will be recognized for investments made year to date.
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Credit Recognized
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | (Dollars in Thousands) |
| Investment | | 2004 | | 2005 | | 2006 | | 2007 | | 2008 | | 2009 | | 2010 | | Total |
2004 $15M | | $ | 750 | | | $ | 750 | | | $ | 750 | | | $ | 900 | | | $ | 900 | | | $ | 900 | | | $ | 900 | | | $ | 5,850 | |
Chris Oddleifson, Chief Executive Officer and President of Independent Bank Corp. and Rockland Trust Company, stated that: “I am pleased with 2004 financial results. The record financial results posted in 2004 come despite the strong headwinds presented by a flattening yield curve and the costs associated with implementing numerous strategic initiatives. I am very enthusiastic about our prospects for 2005 as our strategic initiatives are well underway and our strong internal controls give us a sound foundation upon which to build.”
FIN 46R: Financial Accounting Standards Board (“FASB”) Interpretation (“FIN”) No. 46 Revised, “Consolidation of Variable Interest Entities – an Interpretation of Accounting Research Bulletin No. 51”.FIN 46R addresses limited purpose trusts formed to issue trust preferred securities. FIN 46R required the Company to deconsolidate its two subsidiary trusts (Independent Capital Trust III and Independent Capital Trust IV) on March 31, 2004. The result of deconsolidating these subsidiary trusts is that trust preferred securities of the trusts, which were classified between liabilities and equity on the balance sheet (mezzanine section), no longer appear on the consolidated balance sheet of the Company. The related minority interest expense also is no longer included in the consolidated statement of income. Due to FIN 46R, the junior subordinated debentures of the parent company that were previously eliminated in consolidation are now included on the consolidated balance sheet within total borrowings. The interest expense on the junior subordinated debentures is included in the calculation of net interest margin of the consolidated company, negatively impacting the net interest margin by approximately 0.19% on an annualized basis. There is no impact on net income as the amount of interest previously recognized as minority interest is equal to the amount of interest expense that is recognized currently in the net interest margin offset by the dividend income on the subsidiary trusts common stock recognized in other non-interest income.
Christopher Oddleifson, Chief Executive Officer and President, and Denis K. Sheahan, Chief Financial Officer, of Independent Bank Corp., will host a conference call to discuss fourth quarter earnings at 10:00 a.m. Eastern Time on Friday, January 14, 2005. Internet access to the call is available on the Company’s website athttp://www.RocklandTrust.com or by telephonic access by dial-in at 1-877-407-8031 reference: INDB. A replay of the call will be available until 11:59 p.m. on January 19, 2005 by calling 1-877-660-6853 Account Number: 1628, Conference ID: 132295.
Rockland Trust Company, sole bank subsidiary of Independent Bank Corp., currently has $2.9 billion in assets. Rockland Trust Company is a full-service community bank serving southeastern Massachusetts and Cape Cod. To find out more about the
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products and services available at Rockland Trust Company, please visit our Web site at 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.
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INDEPENDENT BANK CORP. FINANCIAL SUMMARY
(Unaudited - Dollars in Thousands)
| | | | | | | | | | | | | |
| | | December 31, | | | December 31, | | | | Percent |
| CONSOLIDATED BALANCE SHEETS | | 2004 | | | | 2003 | | | Change | |
Assets | | | | | | | | | | | | |
| Cash and Due From Banks | | $ | 62,961 | | | $ | 75,495 | | | | -16.60 | % |
| Fed Funds Sold and Short Term Investments | | | 2,735 | | | | — | | | | 100.00 | % |
| Investments | | | | | | | | | | | | |
| Trading Assets | | | 1,572 | | | | 1,171 | | | | 34.24 | % |
| Investments Available for Sale | | | 680,286 | | | | 527,507 | | | | 28.96 | % |
| Investments Held to Maturity | | | 107,967 | | | | 121,894 | | | | -11.43 | % |
| Federal Home Loan Bank Stock | | | 28,413 | | | | 21,907 | | | | 29.70 | % |
| | | | | | |
| Total Investments | | | 818,238 | | | | 672,479 | | | | 21.67 | % |
| | | | | | |
| Loans | | | | | | | | | | | | |
| Commercial and Industrial | | | 176,945 | | | | 171,230 | | | | 3.34 | % |
| Commercial Real Estate | | | 613,300 | | | | 564,890 | | | | 8.57 | % |
| Commercial Construction | | | 126,632 | | | | 75,380 | | | | 67.99 | % |
| Residential Real Estate | | | 427,556 | | | | 324,052 | | | | 31.94 | % |
| Residential Construction | | | 7,316 | | | | 9,633 | | | | -24.05 | % |
| Residential Loans Held for Sale | | | 10,933 | | | | 1,471 | | | | 643.24 | % |
| Consumer - Home Equity | | | 194,458 | | | | 132,629 | | | | 46.62 | % |
| Consumer - Auto | | | 283,964 | | | | 240,504 | | | | 18.07 | % |
| Consumer - Other | | | 75,254 | | | | 61,346 | | | | 22.67 | % |
| | | |
| Total Loans | | | 1,916,358 | | | | 1,581,135 | | | | 21.20 | % |
| Less - Allowance for Loan Losses | | | (25,197 | ) | | | (23,163 | ) | | | 8.78 | % |
| | | |
| Net Loans | | | 1,891,161 | | | | 1,557,972 | | | | 21.39 | % |
| | | |
| Bank Premises and Equipment | | | 36,449 | | | | 32,477 | | | | 12.23 | % |
| Goodwill and Core Deposit Intangible | | | 57,288 | | | | 36,236 | | | | 58.10 | % |
| Other Assets | | | 75,094 | | | | 62,096 | | | | 20.93 | % |
| | | |
| Total Assets | | $ | 2,943,926 | | | $ | 2,436,755 | | | | 20.81 | % |
| | | |
| | | | | | | | | | | | | |
Liabilities and Stockholders’ Equity | | | | | | | | | | | | |
| Deposits | | | | | | | | | | | | |
| Demand Deposits | | $ | 495,500 | | | $ | 448,452 | | | | 10.49 | % |
| Savings and Interest Checking Accounts | | | 614,481 | | | | 535,870 | | | | 14.67 | % |
| Money Market and Super Interest Checking Accounts | | | 501,065 | | | | 347,530 | | | | 44.18 | % |
| Time Certificates of Deposit | | | 449,189 | | | | 451,486 | | | | -0.51 | % |
| | | |
| Total Deposits | | | 2,060,235 | | | | 1,783,338 | | | | 15.53 | % |
| | | |
| Fed Funds Purchased and Assets Sold | | | | | | | | | | | | |
| Under Repurchase Agreements | | | 61,533 | | | | 39,425 | | | | 56.08 | % |
| Federal Home Loan Bank Borrowings | | | 537,919 | | | | 371,136 | | | | 44.94 | % |
| Treasury Tax and Loan Notes | | | 4,163 | | | | 4,808 | | | | -13.42 | % |
| Junior Subordinated Debentures | | | 51,546 | | | | — | | | | 100.00 | % |
| | | |
| Total Borrowings | | | 655,161 | | | | 415,369 | | | | 57.73 | % |
| | | |
| Total Deposits and Borrowings | | | 2,715,396 | | | | 2,198,707 | | | | 23.50 | % |
| Other Liabilities | | | 17,787 | | | | 18,344 | | | | -3.04 | % |
| Company-Obligated Mandatorily Redeemable Securities of Subsidiary Holding Solely Parent Company Debenture of the Corporation | | | — | | | | 47,857 | | | | -100.00 | % |
| Stockholders’ Equity | | | 210,743 | | | | 171,847 | | | | 22.63 | % |
| | | |
| Total Liabilities and Stockholders’ Equity | | $ | 2,943,926 | | | $ | 2,436,755 | | | | 20.81 | % |
| | | |
INDEPENDENT BANK CORP. FINANCIAL SUMMARY
(Unaudited - Dollars in Thousands)
| | | | | | | | | | | | | | | | | | | | | | | | | |
| | | Three Months Ended | | | Twelve Months Ended | |
| | | December 31, | | | Percent | | | December 31, | | | Percent | |
| CONSOLIDATED STATEMENTS OF INCOME | | 2004 | | | 2003 | | | Change | | | 2004 | | | 2003 | | | Change | |
INTEREST INCOME | | | | | | | | | | | | | | | | | | | | | | | | |
| Interest on Fed Funds Sold and Short Term Investments | | $ | 8 | | | $ | — | | | | 100.00 | % | | $ | 17 | | | $ | — | | | | 100.00 | % |
| Interest and Dividends on Securities | | | 8,968 | | | | 7,835 | | | | 14.46 | % | | | 34,366 | | | | 32,640 | | | | 5.29 | % |
| Interest on Loans | | | 27,480 | | | | 23,464 | | | | 17.12 | % | | | 100,230 | | | | 95,666 | | | | 4.77 | % |
| | | | | |
| Total Interest Income | | | 36,456 | | | | 31,299 | | | | 16.48 | % | | | 134,613 | | | | 128,306 | | | | 4.92 | % |
| | | | | |
INTEREST EXPENSE | | | | | | | | | | | | | | | | | | | | | | | | |
| Interest on Deposits | | | 4,833 | | | | 4,339 | | | | 11.39 | % | | | 18,925 | | | | 17,801 | | | | 6.31 | % |
| Interest on Borrowed Funds | | | 5,241 | | | | 3,269 | | | | 60.32 | % | | | 17,872 | | | | 14,732 | | | | 21.31 | % |
| | | | | |
| Total Interest Expense | | | 10,074 | | | | 7,608 | | | | 32.41 | % | | | 36,797 | | | | 32,533 | | | | 13.11 | % |
| | | | | |
| Net Interest Income | | | 26,382 | | | | 23,691 | | | | 11.36 | % | | | 97,816 | | | | 95,773 | | | | 2.13 | % |
| Less Provision for Loan Losses | | | 769 | | | | 630 | | | | 22.06 | % | | | 3,018 | | | | 3,420 | | | | -11.75 | % |
| | | | | |
| Net Interest Income after Provision for Loan Losses | | | 25,613 | | | | 23,061 | | | | 11.07 | % | | | 94,798 | | | | 92,353 | | | | 2.65 | % |
| | | | | |
NON-INTEREST INCOME | | | | | | | | | | | | | | | | | | | | | | | | |
| Service Charges on Deposit Accounts | | | 3,204 | | | | 2,936 | | | | 9.13 | % | | | 12,345 | | | | 11,409 | | | | 8.20 | % |
| Investment Management Services Income | | | 1,148 | | | | 1,065 | | | | 7.79 | % | | | 4,683 | | | | 4,340 | | | | 7.90 | % |
| Mortgage Banking Income | | | 463 | | | | 699 | | | | -33.76 | % | | | 2,763 | | | | 4,451 | | | | -37.92 | % |
| BOLI Income | | | 514 | | | | 452 | | | | 13.72 | % | | | 1,902 | | | | 1,862 | | | | 2.15 | % |
| Net Gain on Sale of Securities | | | — | | | | 302 | | | | -100.00 | % | | | 1,458 | | | | 2,629 | | | | -44.54 | % |
| Gain on Branch Sale | | | 1,756 | | | | — | | | | 100.00 | % | | | 1,756 | | | | — | | | | 100.00 | % |
| Other Non-Interest Income | | | 864 | | | | 775 | | | | 11.48 | % | | | 3,448 | | | | 3,103 | | | | 11.12 | % |
| | | | | |
| Total Non-Interest Income | | | 7,949 | | | | 6,229 | | | | 27.61 | % | | | 28,355 | | | | 27,794 | | | | 2.02 | % |
| | | | | |
NON-INTEREST EXPENSE | | | | | | | | | | | | | | | | | | | | | | | | |
| Salaries and Employee Benefits | | | 12,743 | | | | 10,264 | | | | 24.15 | % | | | 44,899 | | | | 41,508 | | | | 8.17 | % |
| Occupancy and Equipment Expenses | | | 2,303 | | | | 1,985 | | | | 16.02 | % | | | 8,894 | | | | 8,692 | | | | 2.32 | % |
| Data Processing and Facilities Management | | | 1,085 | | | | 1,130 | | | | -3.98 | % | | | 4,474 | | | | 4,517 | | | | -0.95 | % |
| Prepayment Penalty on Borrowings | | | — | | | | — | | | | — | | | | — | | | | 1,941 | | | | -100.00 | % |
| Merger and Acquisition Expense | | | — | | | | — | | | | — | | | | 684 | | | | — | | | | 100.00 | % |
| Other Non-Interest Expense | | | 4,683 | | | | 4,231 | | | | 10.68 | % | | | 18,740 | | | | 17,169 | | | | 9.15 | % |
| | | | | |
| Total Non-Interest Expense | | | 20,814 | | | | 17,610 | | | | 18.19 | % | | | 77,691 | | | | 73,827 | | | | 5.23 | % |
| | | | | |
| Minority Interest | | | — | | | | 1,084 | | | | -100.00 | % | | | 1,072 | | | | 4,353 | | | | -75.37 | % |
| | | | | |
| INCOME BEFORE INCOME TAXES | | | 12,748 | | | | 10,596 | | | | 20.31 | % | | | 44,390 | | | | 41,967 | | | | 5.77 | % |
| | | | | |
| PROVISION FOR INCOME TAXES | | | 3,565 | | | | 3,285 | | | | 8.52 | % | | | 13,623 | | | | 15,536 | | | | -12.31 | % |
| | | | | |
| NET INCOME | | $ | 9,183 | | | $ | 7,311 | | | | 25.61 | % | | $ | 30,767 | | | $ | 26,431 | | | | 16.40 | % |
| | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | |
| BASIC EARNINGS PER SHARE | | $ | 0.60 | | | $ | 0.50 | | | | 20.00 | % | | $ | 2.06 | | | $ | 1.82 | | | | 13.19 | % |
| DILUTED EARNINGS PER SHARE | | $ | 0.59 | | | $ | 0.49 | | | | 20.41 | % | | $ | 2.03 | | | $ | 1.79 | | | | 13.41 | % |
| BASIC AVERAGE SHARES | | | 15,311,051 | | | | 14,622,273 | | | | 4.71 | % | | | 14,963,155 | | | | 14,558,031 | | | | 2.78 | % |
| DILUTED AVERAGE SHARES | | | 15,531,126 | | | | 14,834,854 | | | | 4.69 | % | | | 15,154,428 | | | | 14,738,078 | | | | 2.82 | % |
| | | | | | | | | | | | | | | | | | | | | | | | | |
PERFORMANCE RATIOS: | | | | | | | | | | | | | | | | | | | | | | | | |
| Net Interest Margin (FTE) | | | 3.96 | % | | | 4.26 | % | | | -7.04 | % | | | 3.95 | % | | | 4.40 | % | | | -10.23 | % |
| Return on Average Assets | | | 1.26 | % | | | 1.20 | % | | | 5.00 | % | | | 1.13 | % | | | 1.11 | % | | | 1.80 | % |
| Return on Average Equity | | | 17.69 | % | | | 17.35 | % | | | 1.96 | % | | | 16.27 | % | | | 15.89 | % | | | 2.39 | % |
INDEPENDENT BANK CORP.
SUPPLEMENTAL FINANCIAL INFORMATION
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | Three Months Ended December 31, | |
| | | | | | | 2004 | | | 2003 | |
| | | | | | | | | | | Interest | | | | | | | | | | | Interest | | | | |
| CONSOLIDATED AVERAGE BALANCE SHEETS AND AVERAGE RATE DATA | | Ending | | | Average | | | Earned/ | | | Yield/ | | | Average | | | Earned/ | | | Yield/ | |
| (Unaudited - Dollars in Thousands) | | Balance | | | Balance | | | Paid | | | Rate | | | Balance | | | Paid | | | Rate | |
Interest-Earning Assets: | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Federal Funds Sold and Assets Purchased | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Under Resale Agreement | | $ | 2,735 | | | $ | 1,630 | | | $ | 8 | | | | 1.96 | % | | $ | — | | | $ | — | | | | — | |
| Investments: | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Trading Assets | | | 1,572 | | | | 1,494 | | | | 16 | | | | 4.28 | % | | | 1,146 | | | | 4 | | | | 1.40 | % |
| Taxable Investment Securities | | | 754,028 | | | | 748,175 | | | | 8,289 | | | | 4.43 | % | | | 634,316 | | | | 7,106 | | | | 4.48 | % |
| Non-taxable Investment Securities (1) | | | 62,638 | | | | 62,788 | | | | 1,020 | | | | 6.50 | % | | | 68,065 | | | | 1,115 | | | | 6.55 | % |
| | | | | | | | | | | |
| Total Investments: | | | 818,238 | | | | 812,457 | | | | 9,325 | | | | 4.59 | % | | | 703,527 | | | | 8,225 | | | | 4.68 | % |
| Loans (1) | | | 1,916,358 | | | | 1,898,874 | | | | 27,567 | | | | 5.81 | % | | | 1,562,790 | | | | 23,546 | | | | 6.03 | % |
| | | | | | | | | | | |
Total Interest-Earning Assets | | $ | 2,737,331 | | | $ | 2,712,961 | | | $ | 36,900 | | | | 5.44 | % | | $ | 2,266,317 | | | $ | 31,771 | | | | 5.61 | % |
| | | | | | | | | | | |
| Cash and Due from Banks | | | 62,961 | | | | 70,701 | | | | | | | | | | | | 62,721 | | | | | | | | | |
| Other Assets | | | 143,634 | | | | 137,050 | | | | | | | | | | | | 103,206 | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | |
Total Assets | | $ | 2,943,926 | | | $ | 2,920,712 | | | | | | | | | | | $ | 2,432,244 | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | |
Interest-Bearing Liabilities: | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Deposits: | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Savings and Interest Checking Accounts | | $ | 614,481 | | | $ | 611,090 | | | $ | 691 | | | | 0.45 | % | | $ | 539,447 | | | $ | 762 | | | | 0.57 | % |
| Money Market and Super Interest Checking Accounts | | | 501,065 | | | | 522,479 | | | | 1,761 | | | | 1.35 | % | | | 359,603 | | | | 1,079 | | | | 1.20 | % |
| Time Deposits | | | 449,189 | | | | 465,799 | | | | 2,381 | | | | 2.04 | % | | | 455,758 | | | | 2,498 | | | | 2.19 | % |
| | | | | | | | | | | |
| Total interest-bearing deposits: | | | 1,564,735 | | | | 1,599,368 | | | | 4,833 | | | | 1.21 | % | | | 1,354,808 | | | | 4,339 | | | | 1.28 | % |
| Borrowings: | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Federal Funds Purchased and Assets Sold Under Resale Agreement | | $ | 61,533 | | | $ | 69,150 | | | $ | 186 | | | | 1.08 | % | | $ | 46,540 | | | $ | 102 | | | | 0.88 | % |
| Treasury Tax and Loan Notes | | | 4,163 | | | | 3,230 | | | | 8 | | | | 0.99 | % | | | 2,915 | | | | 3 | | | | 0.41 | % |
| Federal Home Loan Bank borrowings | | | 537,919 | | | | 458,475 | | | | 3,930 | | | | 3.43 | % | | | 344,047 | | | | 3,164 | | | | 3.68 | % |
| Junior Subordinated Debentures | | | 51,546 | | | | 51,546 | | | | 1,117 | | | | 8.67 | % | | | — | | | | — | | | | — | |
| | | | | | | | | | | |
| Total borrowings: | | | 655,161 | | | | 582,401 | | | | 5,241 | | | | 3.60 | % | | | 393,502 | | | | 3,269 | | | | 3.32 | % |
| | | | | | | | | | | |
Total Interest-Bearing Liabilities | | $ | 2,219,896 | | | $ | 2,181,769 | | | $ | 10,074 | | | | 1.85 | % | | $ | 1,748,310 | | | $ | 7,608 | | | | 1.74 | % |
| | | | | | | | | | | |
| Demand Deposits | | | 495,500 | | | | 514,194 | | | | | | | | | | | | 449,200 | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Company-Obligated Mandatorily Redeemable Securities of Subsidiary Holding Solely Parent Company Debentures of the Corporation | | | — | | | | — | | | | | | | | | | | | 47,843 | | | | | | | | | |
| Other Liabilities | | | 17,787 | | | | 17,144 | | | | | | | | | | | | 18,351 | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | |
| Total Liabilities | | $ | 2,733,183 | | | $ | 2,713,107 | | | | | | | | | | | $ | 2,263,704 | | | | �� | | | | | |
| Stockholders’ Equity | | | 210,743 | | | | 207,605 | | | | | | | | | | | | 168,540 | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | |
Total Liabilities and Stockholders’ Equity | | $ | 2,943,926 | | | $ | 2,920,712 | | | | | | | | | | | $ | 2,432,244 | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Net Interest Income | | | | | | | | | | $ | 26,826 | | | | | | | | | | | $ | 24,163 | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Interest Rate Spread (2) | | | | | | | | | | | | | | | 3.59 | % | | | | | | | | | | | 3.87 | % |
| | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Net Interest Margin (2) | | | | | | | | | | | | | | | 3.96 | % | | | | | | | | | | | 4.26 | % |
| | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Supplemental Information: | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Total Deposits, including Demand Deposits | | $ | 2,060,235 | | | $ | 2,113,562 | | | $ | 4,833 | | | | | | | $ | 1,804,008 | | | $ | 4,339 | | | | | |
| Cost of Total Deposits | | | | | | | | | | | | | | | 0.91 | % | | | | | | | | | | | 0.96 | % |
| Total Funding Liabilities, including Demand Deposits | | $ | 2,715,396 | | | $ | 2,695,963 | | | $ | 10,074 | | | | | | | $ | 2,197,510 | | | $ | 7,608 | | | | | |
| Cost of Total Funding Liabilities | | | | | | | | | | | | | | | 1.49 | % | | | | | | | | | | | 1.38 | % |
| (1) | The total amount of adjustment to present interest income and yield on a fully tax-equivalent basis is $444 for the three months ended December 31, 2004 and $473 for the three months ended December 31, 2003. |
| |
| (2) | 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. |
INDEPENDENT BANK CORP.
SUPPLEMENTAL FINANCIAL INFORMATION
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | Twelve Months Ended December 31, | |
| | | | | | | 2004 | | | 2003 | |
| | | | | | | | | | | Interest | | | | | | | | | | | Interest | | | | |
| CONSOLIDATED AVERAGE BALANCE SHEETS AND AVERAGE RATE DATA | | Ending | | | Average | | | Earned/ | | | Yield/ | | | Average | | | Earned/ | | | Yield/ | |
| (Unaudited - Dollars in Thousands) | | Balance | | | Balance | | | Paid | | | Rate | | | Balance | | | Paid | | | Rate | |
Interest-Earning Assets: | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Federal Funds Sold and Assets Sold | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Under Resale Agreement | | $ | 2,735 | | | $ | 750 | | | $ | 17 | | | | 2.27 | % | | $ | 34 | | | $ | — | | | | — | |
| Investments: | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Trading Assets | | | 1,572 | | | | 1,507 | | | | 48 | | | | 3.19 | % | | | 1,116 | | | | 36 | | | | 3.23 | % |
| Taxable Investment Securities | | | 754,028 | | | | 712,663 | | | | 31,549 | | | | 4.43 | % | | | 639,361 | | | | 29,724 | | | | 4.65 | % |
| Non-taxable Investment Securities (1) | | | 62,638 | | | | 64,215 | | | | 4,261 | | | | 6.64 | % | | | 64,967 | | | | 4,416 | | | | 6.80 | % |
| | | | | | | | | | | |
| Total Investments: | | | 818,238 | | | | 778,385 | | | | 35,858 | | | | 4.61 | % | | | 705,444 | | | | 34,176 | | | | 4.84 | % |
| Loans (1) | | | 1,916,358 | | | | 1,743,844 | | | | 100,560 | | | | 5.77 | % | | | 1,512,997 | | | | 95,994 | | | | 6.34 | % |
| | | | | | | | | | | |
Total Interest-Earning Assets | | $ | 2,737,331 | | | $ | 2,522,979 | | | $ | 136,435 | | | | 5.41 | % | | $ | 2,218,475 | | | $ | 130,170 | | | | 5.87 | % |
| | | | | | | | | | | |
| Cash and Due from Banks | | | 62,961 | | | | 68,024 | | | | | | | | | | | | 64,529 | | | | | | | | | |
| Other Assets | | | 143,634 | | | | 120,550 | | | | | | | | | | | | 100,618 | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | |
Total Assets | | $ | 2,943,926 | | | $ | 2,711,553 | | | | | | | | | | | $ | 2,383,622 | | | $ | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | |
Interest-Bearing Liabilities: | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Deposits: | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Savings and Interest Checking Accounts | | $ | 614,481 | | | $ | 570,661 | | | $ | 2,800 | | | | 0.49 | % | | $ | 494,498 | | | $ | 2,302 | | | | 0.47 | % |
| Money Market and Super Interest Checking Accounts | | | 501,065 | | | | 456,970 | | | | 5,871 | | | | 1.28 | % | | | 350,118 | | | | 4,278 | | | | 1.22 | % |
| Time Deposits | | | 449,189 | | | | 478,037 | | | | 10,254 | | | | 2.15 | % | | | 462,453 | | | | 11,222 | | | | 2.43 | % |
| | | | | | | | | | | |
| Total interest-bearing deposits: | | | 1,564,735 | | | | 1,505,668 | | | | 18,925 | | | | 1.26 | % | | | 1,307,069 | | | | 17,802 | | | | 1.36 | % |
| Borrowings: | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Federal Funds Purchased and Assets Sold Under Resale Agreement | | $ | 61,533 | | | $ | 61,199 | | | $ | 589 | | | | 0.96 | % | | $ | 51,803 | | | $ | 482 | | | | 0.93 | % |
| Treasury Tax and Loan Notes | | | 4,163 | | | | 3,154 | | | | 19 | | | | 0.60 | % | | | 2,764 | | | | 13 | | | | 0.47 | % |
| Federal Home Loan Bank borrowings | | | 537,919 | | | | 407,836 | | | | 13,900 | | | | 3.41 | % | | | 356,152 | | | | 14,237 | | | | 4.00 | % |
| Junior Subordinated Debentures | | | 51,546 | | | | 38,871 | | | | 3,364 | | | | 8.65 | % | | | — | | | | — | | | | — | |
| | | | | | | | | | | |
| Total borrowings: | | | 655,161 | | | | 511,060 | | | | 17,872 | | | | 3.50 | % | | | 410,719 | | | | 14,732 | | | | 3.59 | % |
| | | | | | | | | | | |
Total Interest-Bearing Liabilities | | $ | 2,219,896 | | | $ | 2,016,728 | | | $ | 36,797 | | | | 1.82 | % | | $ | 1,717,788 | | | $ | 32,534 | | | | 1.89 | % |
| | | | | | | | | | | |
| Demand Deposits | | | 495,500 | | | | 478,073 | | | | | | | | | | | | 428,396 | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Company-Obligated Mandatorily Redeemable Securities of Subsidiary Holding Solely Parent Company Debentures of the Corporation | | | — | | | | 11,769 | | | | | | | | | | | | 47,814 | | | | | | | | | |
| Other Liabilities | | | 17,787 | | | | 15,849 | | | | | | | | | | | | 23,256 | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | |
| Total Liabilities | | $ | 2,733,183 | | | $ | 2,522,419 | | | | | | | | | | | $ | 2,217,254 | | | | | | | | | |
| Stockholders’ Equity | | | 210,743 | | | | 189,134 | | | | | | | | | | | | 166,368 | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | |
Total Liabilities and Stockholders’ Equity | | $ | 2,943,926 | | | $ | 2,711,553 | | | | | | | | | | | $ | 2,383,622 | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | |
| Net Interest Income | | | | | | | | | | $ | 99,638 | | | | | | | | | | | $ | 97,636 | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Interest Rate Spread (2) | | | | | | | | | | | | | | | 3.59 | % | | | | | | | | | | | 3.98 | % |
| | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Net Interest Margin (2) | | | | | | | | | | | | | | | 3.95 | % | | | | | | | | | | | 4.40 | % |
| | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Supplemental Information: | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Total Deposits, including Demand Deposits | | $ | 2,060,235 | | | $ | 1,983,741 | | | $ | 18,925 | | | | | | | $ | 1,735,465 | | | $ | 17,802 | | | | | |
| Cost of Total Deposits | | | | | | | | | | | | | | | 0.95 | % | | | | | | | | | | | 1.03 | % |
| Total Funding Liabilities, including Demand Deposits | | $ | 2,715,396 | | | $ | 2,494,801 | | | $ | 36,797 | | | | | | | $ | 2,146,184 | | | $ | 32,534 | | | | | |
| Cost of Total Funding Liabilities | | | | | | | | | | | | | | | 1.47 | % | | | | | | | | | | | 1.52 | % |
| (1) | The total amount of adjustment to present interest income and yield on a fully tax-equivalent basis is $1,822 for the twelve months ended December 31, 2004 and $1,864 for the twelve months ended December 31, 2003. |
| |
| (2) | 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 | |
| | | December 31, | | | December 31, | |
| | | 2004 | | | 2003 | |
Asset Quality | | | | | | | | |
| | | | | | | | | |
| Nonperforming Loans | | | 2,702 | | | | 3,514 | |
| Nonperforming Assets | | | 2,702 | | | | 3,514 | |
| Net charge-offs (year to date) | | | 1,853 | | | | 1,645 | |
| Net charge-offs to average loans (annualized) | | | 0.11 | % | | | 0.11 | % |
| Loans 90 days past due & still accruing | | | 245 | | | | 156 | |
| Nonperforming Loans/Gross Loans | | | 0.14 | % | | | 0.22 | % |
| Allowance for Loan Losses/Nonperforming Loans | | | 932.53 | % | | | 659.16 | % |
| Loans/Total Deposits | | | 93.02 | % | | | 88.66 | % |
| Allowance for Loan Losses/Total Loans | | | 1.31 | % | | | 1.46 | % |
| | | | | | | | | |
Financial Ratios | | | | | | | | |
| Book Value per Share | | $ | 13.75 | | | $ | 11.75 | |
| Tangible Capital/Tangible Asset | | | 5.32 | % | | | 5.65 | % |
| Tangible Book Value per Share | | $ | 10.01 | | | $ | 9.27 | |
| Tangible Book Value per Share (proforma to include the deductibility of goodwill) | | $ | 11.32 | | | $ | 10.14 | |
| | | | | | | | | |
Capital Adequacy | | | | | | | | |
| Tier one leverage capital ratio (1) | | | 7.06 | % | | | 7.60 | % |
| (1) | Estimated number for December 31, 2004 |
