Exhibit 99.1
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Shareholder Relations | | NEWS RELEASE |
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| 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 EARNINGS FOR THE THIRD
QUARTER OF 2005
Rockland, Massachusetts (October 20, 2005). Independent Bank Corp., (NASDAQ: INDB), parent of Rockland Trust Company, today announced that net income for the quarter ended September 30, 2005 was $8.7 million, an increase of 5.1% from the $8.3 million reported in the same period last year. On a per diluted share basis, net income for the quarter was $0.56, an increase of $0.02 when compared to $0.54 for the quarter ended September 30, 2004. For the nine months ended September 30, 2005, net income was $24.6 million, an increase of 14.2% from $21.6 million reported in the same period last year. On a per diluted share basis, net income for the nine months ended September 30, 2005 was $1.59, an increase of $0.15 when compared to the $1.44 for the same nine month period last year.
Comparing the three months ending September 30, 2005 to the same period last year, net interest income increased $1.7 million, or 6.8%, while net interest income for the nine months ended September 30, 2005 increased $7.5 million, or 10.5% from the same period last year. The net interest margin was 3.93% and 3.87% for the three and nine months ended September 30, 2005, respectively, as compared to 3.88% and 3.95%1 for the three and nine months ended September 30, 2004, respectively.
Non-interest income increased by $410,000, or 6.1%, and decreased by $7,000, or (0.03%), during the three and nine months ended September 30, 2005, respectively, as compared to the same periods in the prior year. Excluding security gains, the Company experienced strong growth in non-interest income of 14.0% for the quarter as compared to the same period in the prior year, driven by increases in deposit service charges, investment management, and mortgage banking revenue.
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| Ø | | Service charges on deposit accounts increased by $283,000, or 8.9%, and by $470,000, or 5.1%, for the three and nine months ended |
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| | | September 30, 2005, respectively, as compared to the same periods in 2004, reflecting growth in core deposits. | | |
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| Ø | | Investment management services income increased by $142,000, or 11.8%, and $464,000, or 13.1%, for the three and nine months ended September 30, 2005, respectively, compared to the same periods last year due to growth in managed assets. Assets under administration increased by $135.2 million, or 26.2%, from the same period last year to $651.9 million. |
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| Ø | | Mortgage banking income increased by $360,000, or 50.9%, and by $280,000, or 12.2%, for the three and nine months ended September 30, 2005, respectively, as compared to the same periods in 2004 as a result of selling a higher percentage of loan production and changes in market rates favorably impacting servicing asset amortization. The balance of the mortgage servicing asset is $3.0 million and loans serviced amounted to $349.1 million as of September 30, 2005. |
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| Ø | | There were no gains on sale of securities in the third quarter of 2005. The gain realized on sale of securities in the third quarter of 2004 was $461,000. For the nine months ended September 30, 2005 the gain on sales of securities totaled $616,000 a decrease of $842,000, or (57.8%), from the $1.5 million recorded in the nine months ended September 30, 2004. |
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| Ø | | Other non-interest income increased by $43,000, or 6.0%, and decreased by $350,000, or (13.6%), for the three and nine months ended September 30, 2005, respectively, as compared to the same period in 2004. The decrease in the nine month comparison is primarily due to a decrease in commercial loan prepayment fees. |
Non-interest expense increased by $1.2 million, or 6.2%, and by $3.5 million, or 6.1%, for the three and nine months ended September 30, 2005, respectively, as compared to the same periods in the prior year.
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| Ø | | Salaries and employee benefits increased by $590,000, or 5.3%, and by $3.6 million, or 11.2%, for the three and nine months ended September 30, 2005, respectively, as compared to the same periods in the prior year. Salaries increased by $155,000, or 1.9%, and by $1.5 million, or 6.1%, respectively, for the three and nine months ended September 30, 2005, compared to the same periods in 2004 as a result of annual merit increases for employees and select additions to staff to support strategic initiatives. Accruals for incentive compensation increased by $205,000 and $1.4 million for the three months and nine months ended September 30, 2005, respectively, as compared to the same periods last year due to improved operating performance. |
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| Ø | | Occupancy and equipment related expense increased by $179,000, or 8.6%, and by $873,000, or 13.2% for the three and nine months ended September 30, 2005, respectively, as compared to the same periods in the prior year. The increase in this expense is primarily driven by facilities |
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| | | rent associated with the Falmouth Bancorp, Inc. acquisition which closed in mid 2004, lease buyout expense associated with branch closings, twode novobranches, and increased depreciation expense related to a new phone system installed in 2004. Snow removal cost also increased by $195,000, on a year over year basis due to the inclement weather experienced in the early part of 2005. | | |
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| Ø | | Data processing and facilities management expense has decreased $110,000, or (9.3%), and $367,000 or, (10.8%), for the three and nine months ended September 30, 2005, respectively, compared to the same period in 2004, as a result of a new data processing contract finalized in the latter part of 2004. |
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| Ø | | Other non-interest expenses increased by $991,000, or 24.3%, and by $32,000, or 0.2%, for the three and nine months ended September 30, 2005, respectively, as compared to the same periods in the prior year. The increase in other non-interest expenses for the three month period is primarily attributable to an increase in ATM and debit card service fees of $243,000 mainly due to ATM service provider conversion charges. Also contributing to the increase were increases in audit and examination fees of $102,000, and legal fees of $206,000. The increase in legal fees is a result of large recoveries recognized in the prior period offsetting that period’s legal expenses. |
Total assets increased by $39.7 million, or 1.4%, from December 31, 2004 to $3.0 billion at September 30, 2005. Management is focusing on earning asset growth in the high value segments of commercial lending and variable rate home equity lines of credit, while placing less emphasis on indirect auto and portfolio residential lending and the securities portfolio. While this strategy has slowed balance sheet growth, management believes it is prudent in the current interest rate environment.
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| Ø | | Securities decreased by $77.7 million, or (9.5%), during the nine months ended September 30, 2005. This resulted mainly from the sale of $62.9 million in longer duration securities for the nine months ended September 30, 2005, of which $53.3 million was sold in the second quarter of 2005 and $9.6 was sold in the first quarter of 2005. The ratio of securities to total assets as of September 30, 2005 was 24.8%. |
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| Ø | | Total loans increased by $102.8 million, or 5.4%, during the nine months ended September 30, 2005. Commercial loans increased by $57.4 million, or 6.4%. Consumer loans increased $46.4 million, or 8.8%, primarily due to growth in variable home equity lines of credit. The consumer – auto loan portfolio decreased by $8.2 million, or (2.9%), during the nine months as production in this segment of the loan portfolio was de-emphasized due to narrowing spreads. Business banking loans totaled $50.1 million, representing growth of 14.7% and residential loans decreased $7.5 million, or (1.7%), during the first nine months of 2005. On a linked quarter basis the loan portfolio was essentially flat. Growth came from the home equity portfolio, with commercial lending experiencing modest growth. The rising rate environment has slowed commercial business development in the near term. |
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Total deposits of $2.2 billion at September 30, 2005 increased $112.3 million, or 5.5%, compared to December 31, 2004. The Company experienced growth in core deposits of $40.2 million, or 2.5%. Time deposits increased by $72.0 million, or 16.0%, due to promotional certificate offerings. On a linked quarter basis deposits grew by 1.1%. While core consumer households have grown at an annualized rate of 9% through September, aggressive competition in the retail and municipal deposit businesses have offset core consumer household growth. Borrowings decreased by $88.3 million, or (13.5%), during the nine months ended September 30, 2005.
Stockholders’ equity as of September 30, 2005 totaled $223.3 million, as compared to $210.7 million at December 31, 2004. The Tier 1 leverage capital ratio at September 30, 2005 was 7.59%, maintaining the Company’s well-capitalized position.
Nonperforming assets totaled $2.5 million at September 30, 2005 (0.08% of total assets), as compared to $2.7 million (0.09% of total assets) reported at December 31, 2004. The allowance for loan losses increased to $26.5 million at September 30, 2005 compared to $25.2 million at December 31, 2004. The Company’s allowance for loan losses covered nonperforming loans 10.7 times at September 30, 2005 compared to 9.3 times coverage at December 31, 2004. The Company maintained an allowance to loan ratio of 1.31% at September 30, 2005.
Chris Oddleifson, Chief Executive Officer and President of Independent Bank Corp. and Rockland Trust Company, stated that; “I am pleased with the earnings results for the quarter. Our prudent underwriting, along with optimizing our mix of earning assets through focused originations of commercial and home equity lending should position the Bank for continued strong earnings performance.”
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 third quarter earnings at 10:00 a.m. Eastern Time on Friday, October 21, 2005. Internet access to the call is available on the Company’s website at http://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 October 26, 2005 by calling 1-877-660-6853 Account Number: 286, Conference ID: 170618. The webcast replay will be available until January, 21 2006.
Independent Bank Corp.’s sole bank subsidiary, Rockland Trust Company, currently has $3.0 billion in assets. Rockland Trust Company is a full-service community bank serving southeastern Massachusetts and Cape Cod. To find our more about the products and services available at Rockland Trust Company, please visit our website atwww.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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Footnote:
1. A contributing factor for the variance in the net interest margin between the nine months ended September 30, 2005 and September 30, 2004 was the implementation, during the first quarter of 2004, of 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 0.16% and 0.13% for the nine months ending September 30, 2005 and 2004, respectively, 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.
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INDEPENDENT BANK CORP. FINANCIAL SUMMARY
(Unaudited — Dollars in Thousands)
CONSOLIDATED BALANCE SHEETS
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| | | September 30, | | | December 31, | | | $ | | | % | | | June 30, | | | QTD $ | | | % | |
| | | 2005 | | | 2004 | | | Variance | | | Change | | | 2005 | | | Variance | | | Change | |
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Assets | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Cash and Due From Banks | | $ | 71,487 | | | $ | 62,961 | | | | 8,526 | | | | 13.54 | % | | $ | 76,454 | | | | (4,967 | ) | | | -6.50 | % |
| Fed Funds Sold and Short Term Investments | | | 1,203 | | | | 2,735 | | | | (1,532 | ) | | | -56.01 | % | | | 3,564 | | | | (2,361 | ) | | | -66.25 | % |
| Securities | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Trading Assets | | | 1,556 | | | | 1,572 | | | | (16 | ) | | | -1.02 | % | | | 1,539 | | | | 17 | | | | 1.10 | % |
| Securities Available for Sale | | | 604,878 | | | | 680,286 | | | | (75,408 | ) | | | -11.08 | % | | | 614,760 | | | | (9,882 | ) | | | -1.61 | % |
| Securities Held to Maturity | | | 104,831 | | | | 107,967 | | | | (3,136 | ) | | | -2.90 | % | | | 106,724 | | | | (1,893 | ) | | | -1.77 | % |
| Federal Home Loan Bank Stock | | | 29,287 | | | | 28,413 | | | | 874 | | | | 3.08 | % | | | 29,287 | | | | 0 | | | | 0.00 | % |
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| Total Securities | | | 740,552 | | | | 818,238 | | | | (77,686 | ) | | | -9.49 | % | | | 752,310 | | | | (11,758 | ) | | | -1.56 | % |
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| Loans | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Commercial and Industrial | | | 163,276 | | | | 156,260 | | | | 7,016 | | | | 4.49 | % | | | 160,345 | | | | 2,931 | | | | 1.83 | % |
| Commercial Real Estate | | | 662,383 | | | | 613,300 | | | | 49,083 | | | | 8.00 | % | | | 635,977 | | | | 26,406 | | | | 4.15 | % |
| Commercial Construction | | | 127,936 | | | | 126,632 | | | | 1,304 | | | | 1.03 | % | | | 150,340 | | | | (22,404 | ) | | | -14.90 | % |
| Business Banking | | | 50,080 | | | | 43,673 | | | | 6,407 | | | | 14.67 | % | | | 48,742 | | | | 1,338 | | | | 2.75 | % |
| Residential Real Estate | | | 419,713 | | | | 427,556 | | | | (7,843 | ) | | | -1.83 | % | | | 426,753 | | | | (7,040 | ) | | | -1.65 | % |
| Residential Construction | | | 11,392 | | | | 7,316 | | | | 4,076 | | | | 55.71 | % | | | 9,423 | | | | 1,969 | | | | 20.90 | % |
| Residential Loans Held for Sale | | | 7,216 | | | | 10,933 | | | | (3,717 | ) | | | -34.00 | % | | | 11,511 | | | | (4,295 | ) | | | -37.31 | % |
| Consumer — Home Equity | | | 245,293 | | | | 194,647 | | | | 50,646 | | | | 26.02 | % | | | 229,899 | | | | 15,394 | | | | 6.70 | % |
| Consumer — Auto | | | 275,776 | | | | 283,964 | | | | (8,188 | ) | | | -2.88 | % | | | 281,564 | | | | (5,788 | ) | | | -2.06 | % |
| Consumer — Other | | | 56,055 | | | | 52,077 | | | | 3,978 | | | | 7.64 | % | | | 55,583 | | | | 472 | | | | 0.85 | % |
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| Total Loans | | | 2,019,120 | | | | 1,916,358 | | | | 102,762 | | | | 5.36 | % | | | 2,010,137 | | | | 8,983 | | | | 0.45 | % |
| Less — Allowance for Loan Losses | | | (26,455 | ) | | | (25,197 | ) | | | (1,258 | ) | | | 4.99 | % | | | (26,050 | ) | | | (405 | ) | | | 1.55 | % |
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| Net Loans | | | 1,992,665 | | | | 1,891,161 | | | | 101,504 | | | | 5.37 | % | | | 1,984,087 | | | | 8,578 | | | | 0.43 | % |
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| Bank Premises and Equipment | | | 36,670 | | | | 36,449 | | | | 221 | | | | 0.61 | % | | | 36,303 | | | | 367 | | | | 1.01 | % |
| Goodwill and Core Deposit Intangible | | | 56,939 | | | | 57,288 | | | | (349 | ) | | | -0.61 | % | | | 57,127 | | | | (188 | ) | | | -0.33 | % |
| Other Assets | | | 84,107 | | | | 75,094 | | | | 9,013 | | | | 12.00 | % | | | 80,539 | | | | 3,568 | | | | 4.43 | % |
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| Total Assets | | $ | 2,983,623 | | | $ | 2,943,926 | | | | 39,697 | | | | 1.35 | % | | $ | 2,990,384 | | | | (6,761 | ) | | | -0.23 | % |
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Liabilities and Stockholders’ Equity | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Deposits | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Demand Deposits | | $ | 529,820 | | | $ | 495,500 | | | | 34,320 | | | | 6.93 | % | | $ | 528,295 | | | | 1,525 | | | | 0.29 | % |
| Savings and Interest Checking Accounts | | | 617,437 | | | | 614,481 | | | | 2,956 | | | | 0.48 | % | | | 611,050 | | | | 6,387 | | | | 1.05 | % |
| Money Market | | | 504,038 | | | | 501,065 | | | | 2,973 | | | | 0.59 | % | | | 513,181 | | | | (9,143 | ) | | | -1.78 | % |
| Time Certificates of Deposit | | | 521,195 | | | | 449,189 | | | | 72,006 | | | | 16.03 | % | | | 496,871 | | | | 24,324 | | | | 4.90 | % |
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| Total Deposits | | | 2,172,490 | | | | 2,060,235 | | | | 112,255 | | | | 5.45 | % | | | 2,149,397 | | | | 23,093 | | | | 1.07 | % |
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| Federal Home Loan Bank Borrowings | | | 423,505 | | | | 537,919 | | | | (114,414 | ) | | | -21.27 | % | | | 460,784 | | | | (37,279 | ) | | | -8.09 | % |
| Fed Funds Purchased and Assets Sold Under Repurchase Agreements | | | 90,349 | | | | 61,533 | | | | 28,816 | | | | 46.83 | % | | | 86,976 | | | | 3,373 | | | | 3.88 | % |
| Junior Subordinated Debentures | | | 51,546 | | | | 51,546 | | | | 0 | | | | 0.00 | % | | | 51,546 | | | | — | | | | 0.00 | % |
| Treasury Tax and Loan Notes | | | 1,443 | | | | 4,163 | | | | (2,720 | ) | | | -65.34 | % | | | 3,047 | | | | (1,604 | ) | | | -52.64 | % |
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| Total Borrowings | | | 566,843 | | | | 655,161 | | | | (88,318 | ) | | | -13.48 | % | | | 602,353 | | | | (35,510 | ) | | | -5.90 | % |
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| Total Deposits and Borrowings | | | 2,739,333 | | | | 2,715,396 | | | | 23,937 | | | | 0.88 | % | | | 2,751,750 | | | | (12,417 | ) | | | -0.45 | % |
| Other Liabilities | | | 20,985 | | | | 17,787 | | | | 3,198 | | | | 17.98 | % | | | 18,106 | | | | 2,879 | | | | 15.90 | % |
| Stockholders’ Equity | | | 223,305 | | | | 210,743 | | | | 12,562 | | | | 5.96 | % | | | 220,528 | | | | 2,777 | | | | 1.26 | % |
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| Total Liabilities and Stockholders’ Equity | | $ | 2,983,623 | | | $ | 2,943,926 | | | | 39,697 | | | | 1.35 | % | | $ | 2,990,384 | | | | (6,761 | ) | | | -0.23 | % |
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INDEPENDENT BANK CORP. FINANCIAL SUMMARY
(Unaudited — Dollars in Thousands)
CONSOLIDATED STATEMENTS OF INCOME
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| | | Three Months Ended | | | | | | | Nine Months ended | | | | |
| | | September 30, | | | | | | | Percent | | | September 30, | | | | | | | Percent | |
| | | 2005 | | | 2004 | | | Variance | | | Change | | | 2005 | | | 2004 | | | Variance | | | Change | |
INTEREST INCOME | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Interest on Fed Funds Sold and Short Term Investments | | $ | 71 | | | $ | 9 | | | | 62 | | | | 688.89 | % | | $ | 137 | | | $ | 9 | | | | 128 | | | | 1422.22 | % |
| Interest and Dividends on Securities | | | 8,160 | | | | 9,001 | | | | (841 | ) | | | -9.34 | % | | | 25,799 | | | | 25,399 | | | | 400 | | | | 1.57 | % |
| Interest on Loans | | | 30,994 | | | | 25,931 | | | | 5,063 | | | | 19.52 | % | | | 88,891 | | | | 72,750 | | | | 16,141 | | | | 22.19 | % |
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| Total Interest Income | | | 39,225 | | | | 34,941 | | | | 4,284 | | | | 12.26 | % | | | 114,827 | | | | 98,158 | | | | 16,669 | | | | 16.98 | % |
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INTEREST EXPENSE | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Interest on Deposits | | | 6,616 | | | | 5,207 | | | | 1,409 | | | | 27.06 | % | | | 17,949 | | | | 14,092 | | | | 3,857 | | | | 27.37 | % |
| Interest on Borrowed Funds | | | 5,890 | | | | 4,704 | | | | 1,186 | | | | 25.21 | % | | | 17,946 | | | | 12,631 | | | | 5,315 | | | | 42.08 | % |
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| Total Interest Expense | | | 12,506 | | | | 9,911 | | | | 2,595 | | | | 26.18 | % | | | 35,895 | | | | 26,723 | | | | 9,172 | | | | 34.32 | % |
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| Net Interest Income | | | 26,719 | | | | 25,030 | | | | 1,689 | | | | 6.75 | % | | | 78,932 | | | | 71,435 | | | | 7,497 | | | | 10.49 | % |
| Less — Provision for Loan Losses | | | 1,070 | | | | 761 | | | | 309 | | | | 40.60 | % | | | 3,105 | | | | 2,249 | | | | 856 | | | | 38.06 | % |
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| Net Interest Income after Provision for Loan Losses | | | 25,649 | | | | 24,269 | | | | 1,380 | | | | 5.69 | % | | | 75,827 | | | | 69,186 | | | | 6,641 | | | | 9.60 | % |
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NON-INTEREST INCOME | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Service Charges on Deposit Accounts | | | 3,462 | | | | 3,179 | | | | 283 | | | | 8.90 | % | | | 9,611 | | | | 9,141 | | | | 470 | | | | 5.14 | % |
| Investment Management Services Income | | | 1,348 | | | | 1,206 | | | | 142 | | | | 11.77 | % | | | 3,999 | | | | 3,535 | | | | 464 | | | | 13.13 | % |
| Mortgage Banking Income | | | 1,068 | | | | 708 | | | | 360 | | | | 50.85 | % | | | 2,580 | | | | 2,300 | | | | 280 | | | | 12.17 | % |
| BOLI Income | | | 462 | | | | 419 | | | | 43 | | | | 10.26 | % | | | 1,360 | | | | 1,389 | | | | (29 | ) | | | -2.09 | % |
| Net Gain on Sale of Securities | | | — | | | | 461 | | | | (461 | ) | | | -100.00 | % | | | 616 | | | | 1,458 | | | | (842 | ) | | | -57.75 | % |
| Other Non-Interest Income | | | 764 | | | | 721 | | | | 43 | | | | 5.96 | % | | | 2,233 | | | | 2,583 | | | | (350 | ) | | | -13.55 | % |
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| Total Non-Interest Income | | | 7,104 | | | | 6,694 | | | | 410 | | | | 6.12 | % | | | 20,399 | | | | 20,406 | | | | (7 | ) | | | -0.03 | % |
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NON-INTEREST EXPENSE | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Salaries and Employee Benefits | | | 11,804 | | | | 11,214 | | | | 590 | | | | 5.26 | % | | | 35,758 | | | | 32,156 | | | | 3,602 | | | | 11.20 | % |
| Occupancy and Equipment Expenses | | | 2,273 | | | | 2,094 | | | | 179 | | | | 8.55 | % | | | 7,465 | | | | 6,592 | | | | 873 | | | | 13.24 | % |
| Data Processing and Facilities Management | | | 1,070 | | | | 1,180 | | | | (110 | ) | | | -9.32 | % | | | 3,023 | | | | 3,390 | | | | (367 | ) | | | -10.83 | % |
| Merger and Acquisition Expense | | | — | | | | 463 | | | | (463 | ) | | | -100.00 | % | | | — | | | | 684 | | | | (684 | ) | | | -100.00 | % |
| Other Non-Interest Expense | | | 5,062 | | | | 4,071 | | | | 991 | | | | 24.34 | % | | | 14,089 | | | | 14,057 | | | | 32 | | | | 0.23 | % |
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| Total Non-Interest Expense | | | 20,209 | | | | 19,022 | | | | 1,187 | | | | 6.24 | % | | | 60,335 | | | | 56,879 | | | | 3,456 | | | | 6.08 | % |
| | | | | |
| Minority Interest | | | — | | | | — | | | | 0 | | | | 0.00 | % | | | — | | | | 1,072 | | | | (1,072 | ) | | | -100.00 | % |
| | | | | |
| INCOME BEFORE INCOME TAXES | | | 12,544 | | | | 11,941 | | | | 603 | | | | 5.05 | % | | | 35,891 | | | | 31,641 | | | | 4,250 | | | | 13.43 | % |
| | | | | |
| PROVISION FOR INCOME TAXES | | | 3,857 | | | | 3,679 | | | | 178 | | | | 4.84 | % | | | 11,249 | | | | 10,058 | | | | 1,191 | | | | 11.84 | % |
| | | | | |
| NET INCOME | | $ | 8,687 | | | $ | 8,262 | | | | 425 | | | | 5.14 | % | | $ | 24,642 | | | $ | 21,583 | | | | 3,059 | | | | 14.17 | % |
| | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| BASIC EARNINGS PER SHARE | | $ | 0.56 | | | $ | 0.55 | | | | | | | | 1.82 | % | | $ | 1.60 | | | $ | 1.45 | | | | | | | | 10.34 | % |
| DILUTED EARNINGS PER SHARE | | $ | 0.56 | | | $ | 0.54 | | | | | | | | 3.70 | % | | $ | 1.59 | | | $ | 1.44 | | | | | | | | 10.42 | % |
| BASIC AVERAGE SHARES | | | 15,391,937 | | | | 15,142,272 | | | | | | | | 1.65 | % | | | 15,370,226 | | | | 14,856,722 | | | | | | | | 3.46 | % |
| DILUTED AVERAGE SHARES | | | 15,537,621 | | | | 15,321,093 | | | | | | | | 1.41 | % | | | 15,518,039 | | | | 15,039,756 | | | | | | | | 3.18 | % |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
PERFORMANCE RATIOS: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Net Interest Margin (FTE) | | | 3.93 | % | | | 3.88 | % | | | | | | | 1.29 | % | | | 3.87 | % | | | 3.95 | % | | | | | | | -2.03 | % |
| Return on Average Assets | | | 1.17 | % | | | 1.17 | % | | | | | | | 0.00 | % | | | 1.10 | % | | | 1.09 | % | | | | | | | 0.92 | % |
| Return on Average Equity | | | 15.49 | % | | | 16.92 | % | | | | | | | -8.45 | % | | | 15.07 | % | | | 15.73 | % | | | | | | | -4.20 | % |
INDEPENDENT BANK CORP.
SUPPLEMENTAL FINANCIAL INFORMATION
CONSOLIDATED AVERAGE BALANCE SHEETS AND AVERAGE RATE DATA
(Unaudited — Dollars in Thousands)
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | Three Months Ended September 30, | |
| | | | | | | 2005 | | | 2004 | |
| | | | | | | | | | | Interest | | | | | | | | | | | Interest | | | | |
| | | Ending | | | Average | | | Earned/ | | | Yield/ | | | Average | | | Earned/ | | | Yield/ | |
| | | Balance | | | Balance | | | Paid | | | Rate | | | Balance | | | Paid | | | Rate | |
| |
Interest-Earning Assets: | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Federal Funds Sold and Assets Purchased Under Resale Agreement | | $ | 1,203 | | | $ | 8,437 | | | $ | 71 | | | | 3.37 | % | | $ | 1,319 | | | $ | 9 | | | | 2.73 | % |
| Securities: | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Trading Assets | | | 1,556 | | | | 1,539 | | | | 11 | | | | 2.86 | % | | | 1,500 | | | | 14 | | | | 3.73 | % |
| Taxable Investment Securities | | | 678,168 | | | | 688,230 | | | | 7,481 | | | | 4.35 | % | | | 745,241 | | | | 8,323 | | | | 4.47 | % |
| Non-taxable Investment Securities (1) | | | 60,828 | | | | 61,924 | | | | 1,028 | | | | 6.64 | % | | | 62,920 | | | | 1,022 | | | | 6.50 | % |
| | | | | | | | | | | | | | | | | | | | | | |
| Total Securities: | | | 740,552 | | | | 751,693 | | | | 8,520 | | | | 4.53 | % | | | 809,661 | | | | 9,359 | | | | 4.62 | % |
| Loans (1) | | | 2,019,120 | | | | 2,004,389 | | | | 31,086 | | | | 6.20 | % | | | 1,814,143 | | | | 26,014 | | | | 5.74 | % |
| | | | | | | | | | | | | | | | | | | | | | |
Total Interest-Earning Assets | | $ | 2,760,875 | | | $ | 2,764,519 | | | $ | 39,677 | | | | 5.74 | % | | $ | 2,625,123 | | | $ | 35,382 | | | | 5.39 | % |
| | | | | | | | | | | | | | | | | | | | | | |
| Cash and Due from Banks | | | 71,487 | | | | 68,481 | | | | | | | | | | | | 68,832 | | | | | | | | | |
| Other Assets | | | 151,261 | | | | 143,538 | | | | | | | | | | | | 132,986 | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | |
Total Assets | | $ | 2,983,623 | | | $ | 2,976,538 | | | | | | | | | | | $ | 2,826,941 | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | |
Interest-bearing Liabilities: | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Deposits: | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Savings and Interest Checking Accounts | | $ | 617,437 | | | $ | 593,464 | | | $ | 712 | | | | 0.48 | % | | $ | 607,646 | | | $ | 774 | | | | 0.51 | % |
| Money Market | | | 504,038 | | | | 513,681 | | | | 2,432 | | | | 1.89 | % | | | 505,307 | | | | 1,680 | | | | 1.33 | % |
| Time Deposits | | | 521,195 | | | | 512,092 | | | | 3,472 | | | | 2.71 | % | | | 505,032 | | | | 2,753 | | | | 2.18 | % |
| | | | | | | | | | | | | | | | | | | | | | |
| Total interest-bearing deposits: | | | 1,642,670 | | | | 1,619,237 | | | | 6,616 | | | | 1.63 | % | | | 1,617,985 | | | | 5,207 | | | | 1.29 | % |
| Borrowings: | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Federal Home Loan Bank Borrowings | | $ | 423,505 | | | $ | 445,716 | | | $ | 4,362 | | | | 3.91 | % | | $ | 389,583 | | | $ | 3,460 | | | | 3.55 | % |
| Federal Funds Purchased and Assets Sold Under Repurchase Agreement | | | 90,349 | | | | 86,750 | | | | 399 | | | | 1.84 | % | | | 56,209 | | | | 125 | | | | 0.89 | % |
| Junior Subordinated Debentures | | | 51,546 | | | | 51,546 | | | | 1,117 | | | | 8.67 | % | | | 51,546 | | | | 1,117 | | | | 8.67 | % |
| Treasury Tax and Loan Notes | | | 1,443 | | | | 1,452 | | | | 12 | | | | 3.31 | % | | | 2,032 | | | | 2 | | | | 0.39 | % |
| | | | | | | | | | | | | | | | | | | | | | |
| Total Borrowings: | | | 566,843 | | | | 585,464 | | | | 5,890 | | | | 4.02 | % | | | 499,370 | | | | 4,704 | | | | 3.77 | % |
| | | | | | | | | | | | | | | | | | | | | | |
Total Interest-Bearing Liabilities | | $ | 2,209,513 | | | $ | 2,204,701 | | | $ | 12,506 | | | | 2.27 | % | | $ | 2,117,355 | | | $ | 9,911 | | | | 1.87 | % |
| | | | | | | | | | | | | | | | | | | | | | |
| Demand Deposits | | | 529,820 | | | | 530,115 | | | | | | | | | | | | 501,318 | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Other Liabilities | | | 20,985 | | | | 17,369 | | | | | | | | | | | | 12,931 | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | |
| Total Liabilities | | $ | 2,760,318 | | | $ | 2,752,185 | | | | | | | | | | | $ | 2,631,604 | | | | | | | | | |
| Stockholders’ Equity | | | 223,305 | | | | 224,353 | | | | | | | | | | | | 195,337 | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | |
Total Liabilities and Stockholders’ Equity | | $ | 2,983,623 | | | $ | 2,976,538 | | | | | | | | | | | $ | 2,826,941 | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Net Interest Income | | | | | | | | | | $ | 27,171 | | | | | | | | | | | $ | 25,471 | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Interest Rate Spread (2) | | | | | | | | | | | | | | | 3.47 | % | | | | | | | | | | | 3.52 | % |
| | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Net Interest Margin (2) | | | | | | | | | | | | | | | 3.93 | % | | | | | | | | | | | 3.88 | % |
| | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Supplemental Information: | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Total Deposits, including Demand Deposits | | $ | 2,172,490 | | | $ | 2,149,352 | | | $ | 6,616 | | | | | | | $ | 2,119,303 | | | $ | 5,207 | | | | | |
| Cost of Total Deposits | | | | | | | | | | | | | | | 1.23 | % | | | | | | | | | | | 0.98 | % |
| Total Funding Liabilities, including Demand Deposits | | $ | 2,739,333 | | | $ | 2,734,816 | | | $ | 12,506 | | | | | | | $ | 2,618,673 | | | $ | 9,911 | | | | | |
| Cost of Total Funding Liabilities | | | | | | | | | | | | | | | 1.83 | % | | | | | | | | | | | 1.51 | % |
| | |
| (1) | | The total amount of adjustment to present interest income and yield on a fully tax-equivalent basis is $452 for the three months ended September 30, 2005 and $441 for the three months ended September 30, 2004. |
| |
| (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
CONSOLIDATED AVERAGE BALANCE SHEETS AND AVERAGE RATE DATA
(Unaudited — Dollars in Thousands)
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | Nine Months Ended September 30, | |
| | | | | | | 2005 | | | 2004 | |
| | | | | | | | | | | Interest | | | | | | | | | | | Interest | | | | |
| | | Ending | | | Average | | | Earned/ | | | Yield/ | | | Average | | | Earned/ | | | Yield/ | |
| | | Balance | | | Balance | | | Paid | | | Rate | | | Balance | | | Paid | | | Rate | |
| |
Interest-earning Assets: | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Federal Funds Sold and Assets Purchased Under Resale Agreement | | $ | 1,203 | | | $ | 6,130 | | | $ | 137 | | | | 2.98 | % | | $ | 455 | | | $ | 9 | | | | 2.64 | % |
| Securities: | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Trading Assets | | | 1,556 | | | | 1,546 | | | | 27 | | | | 2.33 | % | | | 1,512 | | | | 32 | | | | 2.82 | % |
| Taxable Investment Securities | | | 678,168 | | | | 723,031 | | | | 23,765 | | | | 4.38 | % | | | 700,739 | | | | 23,260 | | | | 4.43 | % |
| Non-taxable Investment Securities (1) | | | 60,828 | | | | 62,339 | | | | 3,088 | | | | 6.60 | % | | | 64,695 | | | | 3,240 | | | | 6.68 | % |
| | | | | | | | | | | | | | | | | | | | | | |
| Total Securities: | | | 740,552 | | | | 786,916 | | | | 26,880 | | | | 4.55 | % | | | 766,946 | | | | 26,532 | | | | 4.61 | % |
| Loans (1) | | | 2,019,120 | | | | 1,973,697 | | | | 89,156 | | | | 6.02 | % | | | 1,691,790 | | | | 72,994 | | | | 5.75 | % |
| | | | | | | | | | | | | | | | | | | | | | |
Total Interest-Earning Assets | | $ | 2,760,875 | | | $ | 2,766,743 | | | $ | 116,173 | | | | 5.60 | % | | $ | 2,459,191 | | | $ | 99,535 | | | | 5.40 | % |
| | | | | | | | | | | | | | | | | | | | | | |
| Cash and Due from Banks | | | 71,487 | | | | 65,145 | | | | | | | | | | | | 67,125 | | | | | | | | | |
| Other Assets | | | 151,261 | | | | 142,989 | | | | | | | | | | | | 115,009 | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | |
Total Assets | | $ | 2,983,623 | | | $ | 2,974,877 | | | | | | | | | | | $ | 2,641,325 | | | $ | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | |
Interest-bearing Liabilities: | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Deposits: | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Savings and Interest Checking Accounts | | $ | 617,437 | | | $ | 596,458 | | | | 2,032 | | | | 0.45 | % | | $ | 557,087 | | | $ | 2,109 | | | | 0.50 | % |
| Money Market | | | 504,038 | | | | 515,623 | | | | 6,596 | | | | 1.71 | % | | | 434,974 | | | | 4,110 | | | | 1.26 | % |
| Time Deposits | | | 521,195 | | | | 504,108 | | | | 9,321 | | | | 2.47 | % | | | 482,146 | | | | 7,873 | | | | 2.18 | % |
| | | | | | | | | | | | | | | | | | | | | | |
| Total interest-bearing deposits: | | | 1,642,670 | | | | 1,616,189 | | | | 17,949 | | | | 1.48 | % | | | 1,474,207 | | | | 14,092 | | | | 1.27 | % |
| Borrowings: | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Federal Home Loan Bank borrowings | | $ | 423,505 | | | $ | 485,418 | | | $ | 13,704 | | | | 3.76 | % | | $ | 390,833 | | | $ | 9,972 | | | | 3.40 | % |
| Federal Funds Purchased and Assets Sold Under Repurchase Agreement | | | 90,349 | | | | 73,902 | | | | 862 | | | | 1.56 | % | | | 58,529 | | | | 402 | | | | 0.92 | % |
| Junior Subordinated Debentures | | | 51,546 | | | | 51,546 | | | | 3,352 | | | | 8.67 | % | | | 34,615 | | | | 2,247 | | | | 8.66 | % |
| Treasury Tax and Loan Notes | | | 1,443 | | | | 1,714 | | | | 28 | | | | 2.18 | % | | | 3,128 | | | | 10 | | | | 0.43 | % |
| | | | | | | | | | | | | | | | | | | | | | |
| Total borrowings: | | | 566,843 | | | | 612,580 | | | | 17,946 | | | | 3.91 | % | | | 487,105 | | | | 12,631 | | | | 3.46 | % |
| | | | | | | | | | | | | | | | | | | | | | |
Total Interest-Bearing Liabilities | | $ | 2,209,513 | | | $ | 2,228,769 | | | $ | 35,895 | | | | 2.15 | % | | $ | 1,961,312 | | | $ | 26,723 | | | | 1.82 | % |
| | | | | | | | | | | | | | | | | | | | | | |
| Demand Deposits | | | 529,820 | | | | 510,839 | | | | | | | | | | | | 465,944 | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Company-Obligated Mandatorily Redeemable Securities of Subsidiary Holding Solely Parent Company Debentures of the Corporation | | | — | | | | — | | | | | | | | | | | | 15,721 | | | | | | | | | |
| Other Liabilities | | | 20,985 | | | | 17,267 | | | | | | | | | | | | 15,415 | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | |
| Total Liabilities | | $ | 2,760,318 | | | $ | 2,756,875 | | | | | | | | | | | $ | 2,458,392 | | | | | | | | | |
| Stockholders’ Equity | | | 223,305 | | | | 218,002 | | | | | | | | | | | | 182,933 | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | |
Total Liabilities and Stockholders’ Equity | | $ | 2,983,623 | | | $ | 2,974,877 | | | | | | | | | | | $ | 2,641,325 | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Net Interest Income | | | | | | | | | | $ | 80,278 | | | | | | | | | | | $ | 72,812 | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Interest Rate Spread (2) | | | | | | | | | | | | | | | 3.45 | % | | | | | | | | | | | 3.58 | % |
| | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Net Interest Margin (2) | | | | | | | | | | | | | | | 3.87 | % | | | | | | | | | | | 3.95 | % |
| | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Supplemental Information: | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Total Deposits, including Demand Deposits | | $ | 2,172,490 | | | $ | 2,127,028 | | | $ | 17,949 | | | | | | | $ | 1,940,151 | | | $ | 14,092 | | | | | |
| Cost of Total Deposits | | | | | | | | | | | | | | | 1.13 | % | | | | | | | | | | | 0.97 | % |
| Total Funding Liabilities, including Demand Deposits | | $ | 2,739,333 | | | $ | 2,739,608 | | | $ | 35,895 | | | | | | | $ | 2,427,256 | | | $ | 26,723 | | | | | |
| Cost of Total Funding Liabilities | | | | | | | | | | | | | | | 1.75 | % | | | | | | | | | | | 1.47 | % |
| | |
| (1) | | The total amount of adjustment to present interest income and yield on a fully tax-equivalent basis is $1,346 for the nine months ended September 30, 2005 and $1,377 for the nine months ended September 30, 2004. |
| |
| (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 | |
| | | September 30, | | | December 31, | |
| | | 2005 | | | 2004 | |
| | | |
Asset Quality | | | | | | | | |
| | | | | | | | | |
| Nonperforming Loans | | | 2,462 | | | | 2,702 | |
| Nonperforming Assets | | | 2,467 | | | | 2,702 | |
| Net charge-offs (year to date) | | | 1,847 | | | | 1,853 | |
| Net charge-offs to average loans (annualized) | | | 0.12 | % | | | 0.11 | % |
| Loans 90 days past due & still accruing | | | 232 | | | | 245 | |
| Nonperforming Loans/Gross Loans | | | 0.12 | % | | | 0.14 | % |
| Allowance for Loan Losses/Nonperforming Loans | | | 1074.53 | % | | | 932.53 | % |
| Loans/Total Deposits | | | 92.94 | % | | | 93.02 | % |
| Allowance for Loan Losses/Total Loans | | | 1.31 | % | | | 1.31 | % |
| | | | | | | | | |
Financial Ratios | | | | | | | | |
| Book Value per Share | | $ | 14.50 | | | $ | 13.75 | |
| Tangible Capital/Tangible Asset | | | 5.68 | % | | | 5.32 | % |
| Tangible Capital/Tangible Asset (proforma to include the deductibility of goodwill) | | | 6.18 | % | | | 5.82 | % |
| Tangible Book Value per Share | | $ | 10.81 | | | $ | 10.01 | |
| Tangible Book Value per Share (proforma to include the deductibility of goodwill) | | $ | 11.75 | | | $ | 10.96 | |
| | | | | | | | | |
Capital Adequacy | | | | | | | | |
| Tier one leverage capital ratio (1) | | | 7.59 | % | | | 7.06 | % |
| | |
| (1) | | Estimated number for September 30, 2005 |
