| | | |
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. REPORTS 2nd QUARTER 2007 EARNINGS
Rockland, Massachusetts (July 19, 2007). Independent Bank Corp., (NASDAQ: INDB), parent of Rockland Trust Company, today announced net income of $6.6 million and diluted earnings per share of $0.46 for the quarter ended June 30, 2007. This represents a decrease of $1.7 million, or $0.09 per diluted share as compared to net income of $8.3 million and diluted earnings per share of $0.55 for the quarter ending June 30, 2007. For the six months ended June 30, 2007, net income was $13.2 million and diluted earnings per share were $0.92, a decrease of $3.0 million or $0.14 per diluted share as compared to net income of $16.2 million and diluted earnings per share of $1.06 for the six months ended June 30, 2006.
Certain non-core items are included in the computation of earnings in accordance with generally accepted accounting principles (“GAAP”) in both 2007 and 2006 as indicated by the table below. In an effort to provide investors information regarding the Company’s results, the Company has disclosed certain non-GAAP information, which management believes provides useful information to the investor. This information should not be viewed as a substitute for operating results determined in accordance with GAAP, nor is it necessarily comparable to non-GAAP information which may be presented by other companies.
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Dollars in Thousands, Except Per Share Data
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| | | Three Months Ended | | | | |
| | | June 30, | | | | |
| | | 2007 | | 2006 | | $ Variance | | % Variance |
RECONCILIATION TABLE — NON-GAAP FINANCIAL INFORMATION | | | | | | | | | | | | | | | | |
NET INCOME (GAAP) | | $ | 6,610 | | | $ | 8,290 | | | | (1,680 | ) | | | -20.27 | % |
Net Interest Income Components | | | | | | | | | | | | | | | | |
| Add — Write-Off of Debt Issuance Cost, net of tax | | | 590 | | | | — | | | | 590 | | | | 100.00 | % |
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NET OPERATING EARNINGS (NON-GAAP) | | $ | 7,200 | | | $ | 8,290 | | | | (1,090 | ) | | | -13.15 | % |
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Diluted Operating Earnings Per Share | | $ | 0.51 | | | $ | 0.55 | | | | (0.04 | ) | | | -7.27 | % |
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Dollars in Thousands, Except Per Share Data
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| | | Six Months Ended | | | | |
| | | June 30, | | | | |
| | | 2007 | | 2006 | | $ Variance | | % Variance |
RECONCILIATION TABLE — NON-GAAP FINANCIAL INFORMATION | | | | | | | | | | | | | | | | |
NET INCOME (GAAP) | | $ | 13,236 | | | $ | 16,194 | | | | (2,958 | ) | | | -18.27 | % |
Net Interest Income Components | | | | | | | | | | | | | | | | |
| Add — Write-Off of Debt Issuance Cost, net of tax | | | 590 | | | | — | | | | 590 | | | | 100.00 | % |
Non-Interest Income Components | | | | | | | | | | | | | | | | |
| Add — Net Loss on Sale of Securities, net of tax | | | — | | | | 1,150 | | | | (1,150 | ) | | | -100.00 | % |
| Less — BOLI Benefit Proceeds | | | — | | | | (1,316 | ) | | | 1,316 | | | | 100.00 | % |
Non-Interest Expense Components | | | | | | | | | | | | | | | | |
| Add — Executive Early Retirement Costs, net of tax | | | 264 | | | | — | | | | 264 | | | | 100.00 | % |
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NET OPERATING EARNINGS (NON-GAAP) | | $ | 14,090 | | | $ | 16,028 | | | | (1,938 | ) | | | -12.09 | % |
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Diluted Operating Earnings Per Share | | $ | 0.98 | | | $ | 1.05 | | | | (0.07 | ) | | | -6.67 | % |
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Net operating earnings were $7.2 million or $0.51 on a per diluted share basis for the quarter ended June 30, 2007, compared to net operating earnings and diluted earnings per share for the quarter ending June 30, 2006 of $8.3 million and $0.55, respectively, which represents a decrease of $1.1 million, or $0.04 per diluted share. Net operating earnings were $14.1 million or $0.98 on a per diluted share basis for the six months ending June 30, 2007, compared to net operating earnings and diluted earnings per share for the six months ending June 30, 2006 of $16.0 million and $1.05, respectively, which represents a decrease of $1.9 million or $0.07 per diluted share.
Comparing the three months ended June 30, 2007 to the same period last year, net interest income decreased $2.4 million or (9.2%), For the six months ended June 30, 2007 net interest income decreased $4.7 million or (9.0%) from the year ago period. In April 2007, the Company wrote-off approximately $907,000 of unamortized issuance costs related to a refinance of $25.0 million of Trust Preferred securities which the Company called on April 30, 2007. Excluding the write-off of the debt issuance costs, net interest income decreased $1.5 million and $3.8 million from the comparative three and six month periods in 2006, respectively, with the decreases primarily being attributable to a smaller balance sheet and an increase in the cost of deposits. The net interest margin for the three and six month periods ended June 30, 2007 was 3.85% and 3.84%, respectively. Excluding the debt issuance costs write-off, the net interest margin was 4.00% and 3.91% for the three and six month periods ending June 30, 2007 as compared to 3.89% for both the three and six months ended December 31, 2006.See the tables below for reconciliations of net interest income and the net interest margin as adjusted.
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| | | Three Months Ended | | Six Months Ended |
| | | June 30, | | June 30, |
| Dollars in Thousands | | 2007 | | 2006 | | 2007 | | 2006 |
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Net Interest Income GAAP | | $ | 23,433 | | | $ | 25,809 | | | $ | 47,421 | | | $ | 52,116 | |
| Add — Write-Off of Debt Issuance Cost | | | 907 | | | | — | | | | 907 | | | | — | |
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Net Interest Income as Adjusted | | $ | 24,340 | | | $ | 25,809 | | | $ | 48,328 | | | $ | 52,116 | |
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| | | Three Months Ended | | Six Months Ended |
| | | June 30, | | June 30, |
| | | 2007 | | 2006 | | 2007 | | 2006 |
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Net Interest Margin GAAP | | | 3.85 | % | | | 3.89 | % | | | 3.84 | % | | | 3.89 | % |
| Add — Write-Off of Debt Issuance Cost | | | 0.15 | % | | | — | | | | 0.07 | % | | | — | |
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Net Interest Margin as Adjusted | | | 4.00 | % | | | 3.89 | % | | | 3.91 | % | | | 3.89 | % |
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The Company’s allowance for loan losses as a percentage of loans increased to 1.35% from the 1.32% reported at December 31, 2006. Provision for loan losses was $584,000 and $1.5 million for the quarter and six month period ending June 30, 2007, respectively, compared to $350,000 and $1.1 million for the year ago comparative periods. Net charge-offs were $748,000 and $1.6 million for the three and six months of 2007 as compared to $284,000 and $927,000 for the three and six months of 2006.
Non-interest income increased by $817,000, or 11.3%, and by $2.2 million, or 16.1% during the three and six months ended June 30, 2007, respectively, as compared to the same period in the prior year. Excluding the losses on sale of securities and Bank Owned Life Insurance (“BOLI”) benefit proceeds recognized during 2006, non-interest income grew by $1.7 million, or 12.3%, in the six month period ending June 30, 2007, when compared to 2006.See the table below for a reconciliation of non-interest income as adjusted.
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| | | Six Months Ended | | | | |
| | | June 30, | | | | |
| | | 2007 | | 2006 | | $ Variance | | % Variance |
| | | (Dollars in Thousands) | | | | | | | | |
Non-Interest Income GAAP | | $ | 15,832 | | | $ | 13,642 | | | $ | 2,190 | | | | 16.05 | % |
| Add — Net Loss on Sale of Securities | | | — | | | | 1,769 | | | ($ | 1,769 | ) | | | — | |
| Less — BOLI Benefit Proceeds | | | — | | | | (1,316 | ) | | $ | 1,316 | | | | — | |
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Non-Interest Income as Adjusted | | $ | 15,832 | | | $ | 14,095 | | | $ | 1,737 | | | | 12.32 | % |
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| | Ø | | Service charges on deposit accounts decreased by $34,000, or (1.0%), and by $42,000, or (0.6%), for the three and six months ended June 30, 2006, as compared to the same periods in 2006. |
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| | Ø | | Wealth management revenue increased by $476,000, or 27.9%, and by $935,000, or 30.6%, for the three and six months ended June 30, 2007, as compared to the same period in 2006. Investment management income increased by $257,000, or 16.9%, and $541,000, or 19.5% for the three and six months ended June 30, 2007. Assets under administration at June 30, 2007 were $895.9 million, an increase of $180.1 million, or 25.2%, as compared to June 30, 2006. Retail wealth management revenue improved by $219,000, or 117.2%, and $394,000, or 141.4%, for the three and six months ended June 30, 2007, due to a change in the model of origination and an increase in sales. |
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| | Ø | | Mortgage banking income increased by $170,000, or 26.2%, and $126,000, or 8.6%, for the three and six months ended June 30, 2007, as compared to the same period in 2006. The balance of the mortgage servicing asset was $2.3 million and loans serviced amounted to $270.5 million as June 30, 2007. |
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| | Ø | | BOLI income decreased for the six month period by $1.3 million, or 59.3% due to the BOLI death benefit proceeds received during 2006. |
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| | Ø | | There were no gains or losses on the sale of securities during the second quarter of 2007 or 2006. No gain or losses on the sale of securities were recorded during the first six months of 2007. A $1.8 million loss on the sale of securities was recorded for the six months ended June 30, 2006. |
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| | Ø | | Other non-interest income increased by $284,000, or 35.6%, and $737,000, or 44.6%, for the three and six months ended June 30, 2007, as compared to the same period in 2006, largely attributable to the revenue associated with the new 1031 deferred exchange business. |
Non-interest expense increased by $1.3 million, or 6.1%, and $2.2 million, or 5.5%, for the three and six months ended June 30, 2007, as compared to the same period in 2006. Excluding executive early retirement costs, non-interest expense increased $1.8 million, or 4.5%, for the six months ending June 30, 2007, as compared to the same period in 2006.See the table below for a reconciliation of non-interest expense as adjusted.
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| | | | | | | | | | | | | | | | | |
| | | Six Months Ended | | | | | | | |
| | | June 30, | | | | | | | |
| | | 2007 | | | 2006 | | | $ Variance | | | % Variance | |
| | | (Dollars in Thousands) | | | | | | | | | |
Non-Interest Expense GAAP | | $ | 43,357 | | | $ | 41,118 | | | $ | 2,239 | | | | 5.45 | % |
| Less — Executive Early Retirement Costs | | | (406 | ) | | | — | | | ($ | 406 | ) | | | -100.00 | % |
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Non-Interest Expense as Adjusted | | $ | 42,951 | | | $ | 41,118 | | | $ | 1,833 | | | | 4.46 | % |
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| | Ø | | Salaries and employee benefits increased by $941,000, or 7.8%, and $2.2 million, or 9.3%, for the three and six months ended June 30, 2007, as compared to the same periods in 2006. Included in salaries and benefits for the six month period are executive early retirement costs amounting to $406,000 recorded in the first quarter 2007. The remaining increase recorded in the first quarter 2007 in salaries and benefits is attributable to annual merit increases, the Compass Exchange Advisors acquisition at the beginning of 2007, commissions, and other new hires to support growth initiatives. |
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| | Ø | | Data processing and facilities management increased by $166,000, or 16.0%, and $194,000, or 9.3%, for the three and six month periods ending June 30, 2007, respectively as compared to the same periods in 2006. The increases are largely due to the outsourcing of the Bank’s computer support in the second quarter of 2006. |
Total assets decreased by $170.9 million, or (6.0%), from $2.8 billion at December 31, 2006 to $2.7 billion at June 30, 2007. This decrease is as a result of intentional decreases in the Company’s security portfolio and certain loan categories due to a combination of the flat yield curve environment and the profitability characteristics of these asset classes.
| | Ø | | Securities decreased by $56.9 million, or (11.0%), during the six months ending June 30, 2007. This decrease resulted mainly from calls of securities and normal portfolio amortization. The ratio of securities to total assets as of June 30, 2007 was 17.3%, as compared to 18.3% at December 31, 2006. |
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| | Ø | | Total loans decreased by $43.9 million, or (2.2%), during the six months ended June 30, 2007. Total commercial loans increased by $5.0 million, or 0.5%, with commercial real estate comprising most of the change with an increase of $10.6 million, or 1.4%. Consumer loans decreased $17.6 million, or (3.3%), with the auto loan portfolio decreasing by $28.0 million, or (13.5%), partially offset by a $11.3 million, or 4.1%, increase in home equity lending. Business banking loans totaled $66.1 million, an increase of $6.2 million, or 10.4%, and residential real estate loans decreased $37.6 million, or (9.5%), during the first six months of 2007. |
Total deposits of $2.1 billion at June 30, 2007 reflected a managed decrease of $38.3 million, or (1.8%), compared to December 31, 2006, consistent with balance sheet funding needs.
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Borrowings decreased by $115.6 million, or (23.4%), during the six months ending June 30, 2007 of which $25.8 million relates to the calling of the $25.0 million trust preferred securities as a part of the Company’s trust preferred refinancing strategy. The remaining decrease is due to the excess cash flow from the securities portfolio and certain loan categories being used to decrease wholesale borrowing.
The Company reported return on average assets and return on average equity in the second quarter of 2007 of 0.98% and 12.07%, respectively, as compared to 1.14% and 14.90% for the same period in 2006.
Stockholders’ equity at June 30, 2007 totaled $213.0 million, as compared to $229.8 million at December 31, 2006. The Tier 1 leverage capital ratio at June 30, 2007 was 8.19%, maintaining the Company’s well-capitalized position.
As previously announced on December 14, 2006 the Company’s Board of Directors approved a common stock repurchase program to repurchase up to 1,000,000 shares of the Company’s outstanding common stock. During the six months ending June 30, 2007, the Company repurchased 805,747 shares of common stock at a weighted average price of $31.39.
The allowance for loan losses was $26.7 million at June 30, 2007 as compared with $26.8 million at December 31, 2006. Nonperforming assets totaled $6.2 million at June 30, 2007 (0.23% of total assets), and $7.2 million (0.25% of total assets) reported at December 31, 2006.
Christopher Oddleifson, President and Chief Executive Officer, and Denis K. Sheahan, Chief Financial Officer of Independent Bank Corp. and Rockland Trust Company, will host a conference call to discuss second quarter earnings at 9:00 a.m. Eastern Time on Friday, July 20, 2007. Internet access to the call is available on the Company’s website athttp://www.RocklandTrust.com or by telephonic access by dial-in at 1-877-407-8035 reference: INDB. A replay of the call will be available by calling 1-877-660-6853, Account Number: 286, Conference ID: 246840. The web cast replay will be available until July 25, 2007 and the telephone replay will be available until October 20, 2007.
Independent Bank Corp.’s sole bank subsidiary, Rockland Trust Company, currently has $2.7 billion in assets. Rockland Trust Company is a full-service community bank serving southeastern Massachusetts and Cape Cod. To find out 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.
This press release contains financial information determined by methods other than in accordance with accounting principles generally accepted in the United States of
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America (“GAAP”). The Company’s management uses these non-GAAP measures in its analysis of the Company’s performance. These non-GAAP measures may exclude significant gains or losses that are unusual in nature, such as securities gains. Because these gains and losses and their impact on the Company’s performance are difficult to predict, management believes that presentations of adjusted financial measures excluding the impact of these gains and losses provide useful information that is essential to a proper understanding of the operating results of the Company. These disclosures should not be viewed as a substitute for operating results determined in accordance with GAAP, nor are they necessarily comparable to non-GAAP performance measures which may be presented by other companies.
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INDEPENDENT BANK CORP. FINANCIAL SUMMARY
(Unaudited — Dollars in Thousands)
CONSOLIDATED BALANCE SHEETS
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| | | | | | | | | | | | | | | | | | | | | | | June 30, 2007 vs. | | | | |
| | | June 30, | | | December 31, | | | $ | | | % | | | March 31, | | | March 31, 2007 | | | % | |
| | | 2007 | | | 2006 | | | Variance | | | Change | | | 2007 | | | Variance | | | Change | |
Assets | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Cash and Due From Banks | | $ | 62,208 | | | $ | 62,773 | | | | (565 | ) | | | -0.90 | % | | $ | 63,382 | | | | (1,174 | ) | | | -1.85 | % |
| Fed Funds Sold and Short Term Investments | | | 1,000 | | | | 75,518 | | | | (74,518 | ) | | | -98.68 | % | | | 41,000 | | | | (40,000 | ) | | | -97.56 | % |
| Securities | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Trading Assets | | | 1,703 | | | | 1,758 | | | | (55 | ) | | | -3.13 | % | | | 1,646 | | | | 57 | | | | 3.46 | % |
| Securities Available for Sale | | | 394,915 | | | | 417,088 | | | | (22,173 | ) | | | -5.32 | % | | | 405,866 | | | | (10,951 | ) | | | -2.70 | % |
| Securities Held to Maturity | | | 47,568 | | | | 76,747 | | | | (29,179 | ) | | | -38.02 | % | | | 61,973 | | | | (14,405 | ) | | | -23.24 | % |
| Federal Home Loan Bank Stock | | | 16,260 | | | | 21,710 | | | | (5,450 | ) | | | -25.10 | % | | | 16,260 | | | | 0 | | | | 0.00 | % |
| | | | | | | | |
| Total Securities | | | 460,446 | | | | 517,303 | | | | (56,857 | ) | | | -10.99 | % | | | 485,745 | | | | (25,299 | ) | | | -5.21 | % |
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| Loans | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Commercial and Industrial | | | 172,383 | | | | 174,356 | | | | (1,973 | ) | | | -1.13 | % | | | 171,650 | | | | 733 | | | | 0.43 | % |
| Commercial Real Estate | | | 751,142 | | | | 740,517 | | | | 10,625 | | | | 1.43 | % | | | 740,591 | | | | 10,551 | | | | 1.42 | % |
| Commercial Construction | | | 116,029 | | | | 119,685 | | | | (3,656 | ) | | | -3.05 | % | | | 114,183 | | | | 1,846 | | | | 1.62 | % |
| Business Banking | | | 66,109 | | | | 59,910 | | | | 6,199 | | | | 10.35 | % | | | 64,568 | | | | 1,541 | | | | 2.39 | % |
| Residential Real Estate | | | 343,416 | | | | 378,368 | | | | (34,952 | ) | | | -9.24 | % | | | 362,644 | | | | (19,228 | ) | | | -5.30 | % |
| Residential Construction | | | 5,675 | | | | 7,277 | | | | (1,602 | ) | | | -22.01 | % | | | 5,838 | | | | (163 | ) | | | -2.79 | % |
| Residential Loans Held for Sale | | | 10,841 | | | | 11,859 | | | | (1,018 | ) | | | -8.58 | % | | | 12,298 | | | | (1,457 | ) | | | -11.85 | % |
| Consumer — Home Equity | | | 288,271 | | | | 277,015 | | | | 11,256 | | | | 4.06 | % | | | 285,381 | | | | 2,890 | | | | 1.01 | % |
| Consumer — Auto | | | 178,895 | | | | 206,845 | | | | (27,950 | ) | | | -13.51 | % | | | 192,064 | | | | (13,169 | ) | | | -6.86 | % |
| Consumer — Other | | | 48,209 | | | | 49,077 | | | | (868 | ) | | | -1.77 | % | | | 47,999 | | | | 210 | | | | 0.44 | % |
| | | | | | | | |
| Total Loans | | | 1,980,970 | | | | 2,024,909 | | | | (43,939 | ) | | | -2.17 | % | | | 1,997,216 | | | | (16,246 | ) | | | -0.81 | % |
| Less — Allowance for Loan Losses | | | (26,650 | ) | | | (26,815 | ) | | | 165 | | | | -0.62 | % | | | (26,815 | ) | | | 165 | | | | -0.62 | % |
| | | | | | | | |
| Net Loans | | | 1,954,320 | | | | 1,998,094 | | | | (43,774 | ) | | | -2.19 | % | | | 1,970,401 | | | | (16,081 | ) | | | -0.82 | % |
| | | | | | | | |
| Bank Premises and Equipment | | | 38,020 | | | | 37,316 | | | | 704 | | | | 1.89 | % | | | 38,454 | | | | (434 | ) | | | -1.13 | % |
| Goodwill and Core Deposit Intangible | | | 58,452 | | | | 56,535 | | | | 1,917 | | | | 3.39 | % | | | 58,533 | | | | (81 | ) | | | -0.14 | % |
| Other Assets | | | 83,587 | | | | 81,380 | | | | 2,207 | | | | 2.71 | % | | | 82,431 | | | | 1,156 | | | | 1.40 | % |
| | | | | | | | |
| Total Assets | | $ | 2,658,033 | | | $ | 2,828,919 | | | | (170,886 | ) | | | -6.04 | % | | $ | 2,739,946 | | | | (81,913 | ) | | | -2.99 | % |
| | | | | | | | |
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Liabilities and Stockholders’ Equity | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Deposits | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Demand Deposits | | $ | 500,924 | | | $ | 490,036 | | | | 10,888 | | | | 2.22 | % | | $ | 478,330 | | | | 22,594 | | | | 4.72 | % |
| Savings and Interest Checking Accounts | | | 580,897 | | | | 577,443 | | | | 3,454 | | | | 0.60 | % | | | 590,920 | | | | (10,023 | ) | | | -1.70 | % |
| Money Market | | | 444,787 | | | | 455,737 | | | | (10,950 | ) | | | -2.40 | % | | | 474,386 | | | | (29,599 | ) | | | -6.24 | % |
| Time Certificates of Deposit | | | 525,479 | | | | 567,128 | | | | (41,649 | ) | | | -7.34 | % | | | 539,318 | | | | (13,839 | ) | | | -2.57 | % |
| | | | | | | | |
| Total Deposits | | | 2,052,087 | | | | 2,090,344 | | | | (38,257 | ) | | | -1.83 | % | | | 2,082,954 | | | | (30,867 | ) | | | -1.48 | % |
| | | | | | | | |
| Borrowings | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Federal Home Loan Bank Borrowings | | | 231,215 | | | | 305,128 | | | | (73,913 | ) | | | -24.22 | % | | | 231,215 | | | | 0 | | | | 0.00 | % |
| Fed Funds Purchased and Assets Sold Under Repurchase Agreements | | | 94,199 | | | | 108,248 | | | | (14,049 | ) | | | -12.98 | % | | | 108,737 | | | | (14,538 | ) | | | -13.37 | % |
| Junior Subordinated Debentures | | | 51,547 | | | | 77,320 | | | | (25,773 | ) | | | -33.33 | % | | | 77,320 | | | | (25,773 | ) | | | -33.33 | % |
| Treasury Tax and Loan Notes | | | 1,070 | | | | 2,953 | | | | (1,883 | ) | | | -63.77 | % | | | 67 | | | | 1,003 | | | | 1497.01 | % |
| | | | | | | | |
| Total Borrowings | | | 378,031 | | | | 493,649 | | | | (115,618 | ) | | | -23.42 | % | | | 417,339 | | | | (39,308 | ) | | | -9.42 | % |
| | | | | | | | |
| Total Deposits and Borrowings | | | 2,430,118 | | | | 2,583,993 | | | | (153,875 | ) | | | -5.95 | % | | | 2,500,293 | | | | (70,175 | ) | | | -2.81 | % |
| Other Liabilities | | | 14,957 | | | | 15,143 | | | | (186 | ) | | | -1.23 | % | | | 18,157 | | | | (3,200 | ) | | | -17.62 | % |
| Stockholders’ Equity | | | 212,958 | | | | 229,783 | | | | (16,825 | ) | | | -7.32 | % | | | 221,496 | | | | (8,538 | ) | | | -3.85 | % |
| | | | | | | | |
| Total Liabilities and Stockholders’ Equity | | $ | 2,658,033 | | | $ | 2,828,919 | | | | (170,886 | ) | | | -6.04 | % | | $ | 2,739,946 | | | | (81,913 | ) | | | -2.99 | % |
| | | | | | | | |
8
INDEPENDENT BANK CORP. FINANCIAL SUMMARY
(Unaudited — Dollars in Thousands, Except Per Share Data)
CONSOLIDATED STATEMENTS OF INCOME
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | Quarter Ended | | | Year to Date | |
| | | June 30, | | | | | | | Percent | | | June 30, | | | | | | | Percent | |
| | | 2007 | | | 2006 | | | Variance | | | Change | | | 2007 | | | 2006 | | | Variance | | | Change | |
INTEREST INCOME | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Interest on Fed Funds Sold and Short Term Investments | | $ | 289 | | | $ | 52 | | | | 237 | | | | 455.77 | % | | | 733 | | | $ | 152 | | | | 581 | | | | 382.24 | % |
| Interest and Dividends on Securities | | | 5,526 | | | | 7,073 | | | | (1,547 | ) | | | -21.87 | % | | | 11,506 | | | | 14,971 | | | | (3,465 | ) | | | -23.14 | % |
| Interest on Loans | | | 33,788 | | | | 34,082 | | | | (294 | ) | | | -0.86 | % | | | 67,487 | | | | 66,786 | | | | 701 | | | | 1.05 | % |
| | | | | |
| Total Interest Income | | | 39,603 | | | | 41,207 | | | | (1,604 | ) | | | -3.89 | % | | | 79,726 | | | | 81,909 | | | | (2,183 | ) | | | -2.67 | % |
| | | | | |
INTEREST EXPENSE | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Interest on Deposits | | | 10,816 | | | | 9,404 | | | | 1,412 | | | | 15.01 | % | | | 21,910 | | | | 17,864 | | | | 4,046 | | | | 22.65 | % |
| Interest on Borrowed Funds | | | 5,354 | | | | 5,994 | | | | (640 | ) | | | -10.68 | % | | | 10,395 | | | | 11,929 | | | | (1,534 | ) | | | -12.86 | % |
| | | | | |
| Total Interest Expense | | | 16,170 | | | | 15,398 | | | | 772 | | | | 5.01 | % | | | 32,305 | | | | 29,793 | | | | 2,512 | | | | 8.43 | % |
| | | | | |
| Net Interest Income | | | 23,433 | | | | 25,809 | | | | (2,376 | ) | | | -9.21 | % | | | 47,421 | | | | 52,116 | | | | (4,695 | ) | | | -9.01 | % |
| Less — Provision for Loan Losses | | | 584 | | | | 350 | | | | 234 | | | | 66.86 | % | | | 1,475 | | | | 1,100 | | | | 375 | | | | 34.09 | % |
| | | | | |
| Net Interest Income after Provision for Loan Losses | | | 22,849 | | | | 25,459 | | | | (2,610 | ) | | | -10.25 | % | | | 45,946 | | | | 51,016 | | | | (5,070 | ) | | | -9.94 | % |
| | | | | |
NON-INTEREST INCOME | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Service Charges on Deposit Accounts | | | 3,531 | | | | 3,565 | | | | (34 | ) | | | -0.95 | % | | | 6,941 | | | | 6,983 | | | | (42 | ) | | | -0.60 | % |
| Wealth Management Services Income | | | 2,180 | | | | 1,704 | | | | 476 | | | | 27.93 | % | | | 3,994 | | | | 3,059 | | | | 935 | | | | 30.57 | % |
| Mortgage Banking Income | | | 820 | | | | 650 | | | | 170 | | | | 26.15 | % | | | 1,594 | | | | 1,468 | | | | 126 | | | | 8.58 | % |
| BOLI Income | | | 427 | | | | 506 | | | | (79 | ) | | | -15.61 | % | | | 915 | | | | 2,250 | | | | (1,335 | ) | | | -59.33 | % |
| Net Loss/Gain on Sale of Securities | | | — | | | | — | | | | — | | | | — | | | | — | | | | (1,769 | ) | | | 1,769 | | | | -100.00 | % |
| Other Non-Interest Income | | | 1,081 | | | | 797 | | | | 284 | | | | 35.63 | % | | | 2,388 | | | | 1,651 | | | | 737 | | | | 44.64 | % |
| | | | | |
| Total Non-Interest Income | | | 8,039 | | | | 7,222 | | | | 817 | | | | 11.31 | % | | | 15,832 | | | | 13,642 | | | | 2,190 | | | | 16.05 | % |
| | | | | |
NON-INTEREST EXPENSE | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Salaries and Employee Benefits | | | 13,013 | | | | 12,072 | | | | 941 | | | | 7.79 | % | | | 26,166 | | | | 23,937 | | | | 2,229 | | | | 9.31 | % |
| Occupancy and Equipment Expenses | | | 2,607 | | | | 2,526 | | | | 81 | | | | 3.21 | % | | | 5,161 | | | | 5,239 | | | | (78 | ) | | | -1.49 | % |
| Data Processing and Facilities Management | | | 1,202 | | | | 1,036 | | | | 166 | | | | 16.02 | % | | | 2,290 | | | | 2,096 | | | | 194 | | | | 9.26 | % |
| Other Non-Interest Expense | | | 5,083 | | | | 5,012 | | | | 71 | | | | 1.42 | % | | | 9,740 | | | | 9,846 | | | | (106 | ) | | | -1.08 | % |
| | | | | |
| Total Non-Interest Expense | | | 21,905 | | | | 20,646 | | | | 1,259 | | | | 6.10 | % | | | 43,357 | | | | 41,118 | | | | 2,239 | | | | 5.45 | % |
| | | | | |
| INCOME BEFORE INCOME TAXES | | | 8,983 | | | | 12,035 | | | | (3,052 | ) | | | -25.36 | % | | | 18,421 | | | | 23,540 | | | | (5,119 | ) | | | -21.75 | % |
| | | | | |
| PROVISION FOR INCOME TAXES | | | 2,373 | | | | 3,745 | | | | (1,372 | ) | | | -36.64 | % | | | 5,185 | | | | 7,346 | | | | (2,161 | ) | | | -29.42 | % |
| | | | | |
| NET INCOME | | $ | 6,610 | | | $ | 8,290 | | | | (1,680 | ) | | | -20.27 | % | | | 13,236 | | | $ | 16,194 | | | | (2,958 | ) | | | -18.27 | % |
| | | | | |
| BASIC EARNINGS PER SHARE | | $ | 0.47 | | | $ | 0.55 | | | | | | | | -14.55 | % | | | 0.93 | | | $ | 1.07 | | | | | | | | -13.08 | % |
| DILUTED EARNINGS PER SHARE | | $ | 0.46 | | | $ | 0.55 | | | | | | | | -16.36 | % | | | 0.92 | | | $ | 1.06 | | | | | | | | -13.21 | % |
| BASIC AVERAGE SHARES | | | 14,101,468 | | | | 14,999,127 | | | | | | | | -5.98 | % | | | 14,282,226 | | | | 15,159,252 | | | | | | | | -5.79 | % |
| DILUTED AVERAGE SHARES | | | 14,231,264 | | | | 15,161,874 | | | | | | | | -6.14 | % | | | 14,428,323 | | | | 15,318,724 | | | | | | | | -5.81 | % |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
PERFORMANCE RATIOS: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Net Interest Margin (FTE) | | | 3.85 | % | | | 3.89 | % | | | | | | | -1.03 | % | | | 3.84 | % | | | 3.89 | % | | | | | | | -1.29 | % |
| Return on Average Assets | | | 0.98 | % | | | 1.14 | % | | | | | | | -14.04 | % | | | 0.97 | % | | | 1.10 | % | | | | | | | -11.82 | % |
| Return on Average Equity | | | 12.07 | % | | | 14.90 | % | | | | | | | -18.99 | % | | | 11.90 | % | | | 14.31 | % | | | | | | | -16.84 | % |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
RECONCILIATION TABLE — NON-GAAP FINANCIAL INFORMATION | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
NET INCOME (GAAP) | | $ | 6,610 | | | $ | 8,290 | | | | (1,680 | ) | | | -20.27 | % | | | 13,236 | | | $ | 16,194 | | | | (2,958 | ) | | | -18.27 | % |
Net Interest Income Components | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Add — Write-Off of Debt Issuance Cost, net of tax | | | 590 | | | | — | | | | | | | | | | | | 590 | | | | — | | | | | | | | | |
Non-Interest Income Components | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Add — Net Loss on Sale of Securities, net of tax | | | — | | | | — | | | | | | | | | | | | — | | | | 1,150 | | | | | | | | | |
| Less — Net Gain on Sale of Securities, net of tax | | | — | | | | — | | | | | | | | | | | | — | | | | — | | | | | | | | | |
| Less — BOLI Benefit Proceeds, net of tax | | | — | | | | — | | | | | | | | | | | | — | | | | (1,316 | ) | | | | | | | | |
Non-Interest Expense Components | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Add — Executive Early Retirement Costs, net of tax | | | — | | | | — | | | | | | | | | | | | 264 | | | | — | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | |
NET OPERATING EARNINGS | | $ | 7,200 | | | $ | 8,290 | | | | (1,090 | ) | | | -13.15 | % | | | 14,090 | | | $ | 16,028 | | | | (1,938 | ) | | | -12.09 | % |
| | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Diluted Earnings Per Share, on an Operating Basis | | $ | 0.51 | | | $ | 0.55 | | | | | | | | -7.27 | % | | | 0.98 | | | $ | 1.05 | | | | | | | | -6.67 | % |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
9
INDEPENDENT BANK CORP.
SUPPLEMENTAL FINANCIAL INFORMATION
CONSOLIDATED AVERAGE BALANCE SHEETS AND AVERAGE RATE DATA
(Unaudited — Dollars in Thousands)
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | Three Months Ended June 30, | |
| | | | | | | 2007 | | | 2006 | |
| | | | | | | | | | | Interest | | | | | | | | | | | Interest | | | | |
| | | Ending | | | Average | | | Earned/ | | | Yield/ | | | Average | | | Earned/ | | | Yield/ | |
| | | Balance | | | Balance | | | Paid | | | Rate | | | Balance | | | Paid | | | Rate | |
| |
Interest-Earning Assets: | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Federal Funds Sold and Short Term Investments | | $ | 1,000 | | | $ | 20,962 | | | $ | 289 | | | | 5.51 | % | | $ | 4,005 | | | $ | 52 | | | | 5.19 | % |
| Securities: | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Trading Assets | | | 1,703 | | | | 1,647 | | | | 9 | | | | 2.19 | % | | | 1,597 | | | | 6 | | | | 1.50 | % |
| Taxable Investment Securities | | | 407,432 | | | | 418,893 | | | | 4,975 | | | | 4.75 | % | | | 582,922 | | | | 6,405 | | | | 4.40 | % |
| Non-taxable Investment Securities (1) | | | 51,311 | | | | 51,893 | | | | 834 | | | | 6.43 | % | | | 58,036 | | | | 1,018 | | | | 7.02 | % |
| | | | | | | | | | | | | | |
| Total Securities: | | | 460,446 | | | | 472,433 | | | | 5,818 | | | | 4.93 | % | | | 642,555 | | | | 7,429 | | | | 4.62 | % |
| | | | | | | | | | | | | | |
| Loans (1) | | | 1,980,970 | | | | 1,987,156 | | | | 33,911 | | | | 6.83 | % | | | 2,051,032 | | | | 34,177 | | | | 6.67 | % |
Total Interest-Earning Assets | | $ | 2,442,416 | | | $ | 2,480,551 | | | $ | 40,018 | | | | 6.45 | % | | $ | 2,697,592 | | | $ | 41,658 | | | | 6.18 | % |
| | | | | | | | | | | |
| Cash and Due from Banks | | | 62,208 | | | | 60,949 | | | | | | | | | | | | 58,671 | | | | | | | | | |
| Other Assets | | | 153,409 | | | | 148,875 | | | | | | | | | | | | 152,569 | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | |
Total Assets | | $ | 2,658,033 | | | $ | 2,690,375 | | | | | | | | | | | $ | 2,908,832 | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | |
Interest-bearing Liabilities: | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Deposits: | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Savings and Interest Checking Accounts | | $ | 580,897 | | | $ | 580,449 | | | $ | 1,994 | | | | 1.37 | % | | $ | 560,402 | | | $ | 999 | | | | 0.71 | % |
| Money Market | | | 444,787 | | | | 467,846 | | | | 3,509 | | | | 3.00 | % | | | 520,827 | | | | 3,505 | | | | 2.69 | % |
| Time Deposits | | | 525,479 | | | | 522,282 | | | | 5,313 | | | | 4.07 | % | | | 549,066 | | | | 4,900 | | | | 3.57 | % |
| | | | | | | | | | | |
| Total interest-bearing deposits: | | | 1,551,163 | | | | 1,570,577 | | | | 10,816 | | | | 2.75 | % | | | 1,630,295 | | | | 9,404 | | | | 2.31 | % |
| Borrowings: | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Federal Home Loan Bank Borrowings | | $ | 231,215 | | | $ | 238,246 | | | $ | 2,668 | | | | 4.48 | % | | $ | 383,200 | | | $ | 4,165 | | | | 4.35 | % |
| Federal Funds Purchased and Assets Sold Under Repurchase Agreement | | | 94,199 | | | | 99,300 | | | | 733 | | | | 2.95 | % | | | 107,927 | | | | 699 | | | | 2.59 | % |
| Junior Subordinated Debentures | | | 51,547 | | | | 59,760 | | | | 1,935 | | | | 12.95 | % | | | 51,546 | | | | 1,117 | | | | 8.67 | % |
| Other Borrowings | | | 1,070 | | | | 997 | | | | 18 | | | | 7.22 | % | | | 1,216 | | | | 13 | | | | 4.28 | % |
| | | | | | | | | | | |
| Total Borrowings: | | | 378,031 | | | | 398,303 | | | | 5,354 | | | | 5.38 | % | | | 543,889 | | | | 5,994 | | | | 4.41 | % |
| | | | | | | | | | | |
Total Interest-Bearing Liabilities | | $ | 1,929,194 | | | $ | 1,968,880 | | | $ | 16,170 | | | | 3.29 | % | | $ | 2,174,184 | | | $ | 15,398 | | | | 2.83 | % |
| | | | | | | | | | | |
| Demand Deposits | | | 500,924 | | | | 488,571 | | | | | | | | | | | | 492,945 | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Other Liabilities | | | 14,957 | | | | 13,878 | | | | | | | | | | | | 19,131 | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | |
| Total Liabilities | | $ | 2,445,075 | | | $ | 2,471,329 | | | | | | | | | | | $ | 2,686,260 | | | | | | | | | |
| Stockholders’ Equity | | | 212,958 | | | | 219,046 | | | | | | | | | | | | 222,572 | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | |
Total Liabilities and Stockholders’ Equity | | $ | 2,658,033 | | | $ | 2,690,375 | | | | | | | | | | | $ | 2,908,832 | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Net Interest Income | | | | | | | | | | $ | 23,848 | | | | | | | | | | | $ | 26,260 | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Interest Rate Spread (2) | | | | | | | | | | | | | | | 3.17 | % | | | | | | | | | | | 3.35 | % |
| | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Net Interest Margin (3) | | | | | | | | | | | | | | | 3.85 | % | | | | | | | | | | | 3.89 | % |
| | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Supplemental Information: | | | | | | | | �� | | | | | | | | | | | | | | | | | | | | |
| Total Deposits, including Demand Deposits | | $ | 2,052,087 | | | $ | 2,059,148 | | | $ | 10,816 | | | | | | | $ | 2,123,240 | | | $ | 9,404 | | | | | |
| Cost of Total Deposits | | | | | | | | | | | | | | | 2.10 | % | | | | | | | | | | | 1.77 | % |
| Total Funding Liabilities, including Demand Deposits | | $ | 2,430,118 | | | $ | 2,457,451 | | | $ | 16,170 | | | | | | | $ | 2,667,129 | | | $ | 15,398 | | | | | |
| Cost of Total Funding Liabilities | | | | | | | | | | | | | | | 2.63 | % | | | | | | | | | | | 2.31 | % |
| | |
| (1) | | The total amount of adjustment to present interest income and yield on a fully tax-equivalent basis is $415 and $451 for the three months ended March 31, 2007 and 2006, respectively. |
| |
| (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. |
| |
| (3) | | Net interest margin represents annualized net interest income as a percentage of average interest-earning assets. |
10
INDEPENDENT BANK CORP.
SUPPLEMENTAL FINANCIAL INFORMATION
CONSOLIDATED AVERAGE BALANCE SHEETS AND AVERAGE RATE DATA
(Unaudited — Dollars in Thousands)
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | Six Months Ended June 30, | |
| | | | | | | 2007 | | | 2006 | |
| | | | | | | | | | | Interest | | | | | | | | | | | Interest | | | | |
| | | Ending | | | Average | | | Earned/ | | | Yield/ | | | Average | | | Earned/ | | | Yield/ | |
| | | Balance | | | Balance | | | Paid | | | Rate | | | Balance | | | Paid | | | Rate | |
| |
Interest-Earning Assets: | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Federal Funds Sold and Short Term Investments | | $ | 1,000 | | | $ | 27,265 | | | $ | 733 | | | | 5.38 | % | | $ | 6,914 | | | $ | 152 | | | | 4.40 | % |
| Securities: | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Trading Assets | | | 1,703 | | | | 1,669 | | | | 23 | | | | 2.76 | % | | | 1,576 | | | | 19 | | | | 2.41 | % |
| Taxable Investment Securities | | | 407,432 | | | | 433,625 | | | | 10,377 | | | | 4.79 | % | | | 611,327 | | | | 13,620 | | | | 4.46 | % |
| Non-taxable Investment Securities (1) | | | 51,311 | | | | 52,722 | | | | 1,701 | | | | 6.45 | % | | | 59,777 | | | | 2,049 | | | | 6.86 | % |
| | | | | | | | | | | |
| Total Securities: | | | 460,446 | | | | 488,016 | | | | 12,101 | | | | 4.96 | % | | | 672,680 | | | | 15,688 | | | | 4.66 | % |
| Loans (1) | | | 1,980,970 | | | | 1,995,143 | | | | 67,727 | | | | 6.79 | % | | | 2,047,030 | | | | 66,975 | | | | 6.54 | % |
| | | | | | | | | | | |
Total Interest-Earning Assets | | $ | 2,442,416 | | | $ | 2,510,424 | | | $ | 80,561 | | | | 6.42 | % | | $ | 2,726,624 | | | $ | 82,815 | | | | 6.07 | % |
| | | | | | | | | | | |
| Cash and Due from Banks | | | 62,208 | | | | 60,142 | | | | | | | | | | | | 59,840 | | | | | | | | | |
| Other Assets | | | 153,409 | | | | 148,560 | | | | | | | | | | | | 151,456 | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | |
Total Assets | | $ | 2,658,033 | | | $ | 2,719,126 | | | | | | | | | | | $ | 2,937,920 | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | |
Interest-bearing Liabilities: | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Deposits: | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Savings and Interest Checking Accounts | | $ | 580,897 | | | $ | 576,067 | | | $ | 3,794 | | | | 1.32 | % | | $ | 567,135 | | | $ | 1,908 | | | | 0.67 | % |
| Money Market | | | 444,787 | | | | 468,603 | | | | 7,049 | | | | 3.01 | % | | | 533,091 | | | | 6,852 | | | | 2.57 | % |
| Time Deposits | | | 525,479 | | | | 540,289 | | | | 11,067 | | | | 4.10 | % | | | 543,292 | | | | 9,104 | | | | 3.35 | % |
| | | | | | | | | | | |
| Total interest-bearing deposits: | | | 1,551,163 | | | | 1,584,959 | | | | 21,910 | | | | 2.76 | % | | | 1,643,518 | | | | 17,864 | | | | 2.17 | % |
| Borrowings: | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Federal Home Loan Bank Borrowings | | $ | 231,215 | | | $ | 245,471 | | | $ | 5,459 | | | | 4.45 | % | | $ | 399,551 | | | $ | 8,331 | | | | 4.17 | % |
| Federal Funds Purchased and Assets Sold Under Repurchase Agreement | | | 94,199 | | | | 102,483 | | | | 1,585 | | | | 3.09 | % | | | 107,589 | | | | 1,335 | | | | 2.48 | % |
| Junior Subordinated Debentures | | | 51,547 | | | | 68,492 | | | | 3,326 | | | | 9.71 | % | | | 51,546 | | | | 2,235 | | | | 8.67 | % |
| Other Borrowings | | | 1,070 | | | | 792 | | | | 25 | | | | 6.31 | % | | | 1,329 | | | | 28 | | | | 4.21 | % |
| | | | | | | | | | | |
| Total Borrowings: | | | 378,031 | | | | 417,238 | | | | 10,395 | | | | 4.98 | % | | | 560,015 | | | | 11,929 | | | | 4.26 | % |
| | | | | | | | | | | |
Total Interest-Bearing Liabilities | | $ | 1,929,194 | | | $ | 2,002,197 | | | $ | 32,305 | | | | 3.23 | % | | $ | 2,203,533 | | | $ | 29,793 | | | | 2.70 | % |
| | | | | | | | | | | |
| Demand Deposits | | | 500,924 | | | | 480,671 | | | | | | | | | | | | 489,490 | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Other Liabilities | | | 14,957 | | | | 13,816 | | | | | | | | | | | | 18,544 | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | |
| Total Liabilities | | $ | 2,445,075 | | | $ | 2,496,684 | | | | | | | | | | | $ | 2,711,567 | | | | | | | | | |
| Stockholders’ Equity | | | 212,958 | | | | 222,442 | | | | | | | | | | | | 226,353 | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | |
Total Liabilities and Stockholders’ Equity | | $ | 2,658,033 | | | $ | 2,719,126 | | | | | | | | | | | $ | 2,937,920 | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Net Interest Income | | | | | | | | | | $ | 48,256 | | | | | | | | | | | $ | 53,022 | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Interest Rate Spread (2) | | | | | | | | | | | | | | | 3.19 | % | | | | | | | | | | | 3.37 | % |
| | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Net Interest Margin (2) | | | | | | | | | | | | | | | 3.84 | % | | | | | | | | | | | 3.89 | % |
| | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Supplemental Information: | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Total Deposits, including Demand Deposits | | $ | 2,052,087 | | | $ | 2,065,630 | | | $ | 21,910 | | | | | | | $ | 2,133,008 | | | $ | 17,864 | | | | | |
| Cost of Total Deposits | | | | | | | | | | | | | | | 2.12 | % | | | | | | | | | | | 1.68 | % |
| Total Funding Liabilities, including Demand Deposits | | $ | 2,430,118 | | | $ | 2,482,868 | | | $ | 32,305 | | | | | | | $ | 2,693,023 | | | $ | 29,793 | | | | | |
| Cost of Total Funding Liabilities | | | | | | | | | | | | | | | 2.60 | % | | | | | | | | | | | 2.21 | % |
| | |
| (1) | | The total amount of adjustment to present interest income and yield on a fully tax-equivalent basis is $835 for the six months ended June 30, 2007 and $893 for the six months ended June 30, 2006. |
| |
| (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. |
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| | | | | | | | | | | �� | | |
| | | As Of | | | | |
| | | June 30, | | | December 31, | | | June 30, | |
| | | 2007 | | | 2006 | | | 2006 | |
| | | (Dollars in Thousands, Except Per Share Data) | |
Asset Quality | | | | | | | | | | | | |
| Nonperforming Loans | | | | | | | | | | | | |
| Commercial & Industrial Loans | | $ | 301 | | | $ | 872 | | | $ | 322 | |
| Business Banking Loans | | $ | 343 | | | $ | 74 | | | $ | 80 | |
| Commercial Real Estate Loans | | $ | 2,013 | | | $ | 2,346 | | | $ | 2,801 | |
| Residential Real Estate Loans | | $ | 1,927 | | | $ | 2,318 | | | $ | 918 | |
| Installment Loans — Home Equity | | $ | 373 | | | $ | 358 | | | $ | 16 | |
| Installment Loans — Auto | | $ | 810 | | | $ | 703 | | | $ | 690 | |
| Installment Loans — Other | | $ | 91 | | | $ | 308 | | | $ | 100 | |
| | | | | | | | | | |
| Total Nonperforming Loans | | $ | 5,858 | | | $ | 6,979 | | | $ | 4,927 | |
| | | | | | | | | | |
| Other Real Estate Owned | | $ | 305 | | | $ | 190 | | | $ | 0 | |
| Nonperforming Assets | | $ | 6,163 | | | $ | 7,169 | | | $ | 4,927 | |
| | | | | | | | | | |
| | | | | | | | | | | | | |
| Net charge-offs (year to date) | | $ | 1,639 | | | $ | 2,733 | | | $ | 927 | |
| Net charge-offs to average loans (annualized) | | | 0.16 | % | | | 0.14 | % | | | 0.09 | % |
| | | | | | | | | | | | | |
| Nonperforming Loans/Gross Loans | | | 0.30 | % | | | 0.34 | % | | | 0.24 | % |
| Allowance for Loan Losses/Nonperforming Loans | | | 454.93 | % | | | 384.22 | % | | | 544.16 | % |
| Loans/Total Deposits | | | 96.53 | % | | | 96.87 | % | | | 94.02 | % |
| Allowance for Loan Losses/Total Loans | | | 1.35 | % | | | 1.32 | % | | | 1.31 | % |
| | | | | | | | | | | | | |
Financial Ratios | | | | | | | | | | | | |
| Book Value per Share | | $ | 15.31 | | | $ | 15.65 | | | $ | 14.65 | |
| Tangible Capital/Tangible Asset | | | 5.94 | % | | | 6.25 | % | | | 5.57 | % |
| Tangible Capital/Tangible Asset (proforma to include the deductibility of goodwill) | | | 6.50 | % | | | 6.76 | % | | | 6.07 | % |
| Tangible Book Value per Share | | $ | 11.11 | | | $ | 11.80 | | | $ | 10.81 | |
| Tangible Book Value per Share (proforma to include the deductibility of goodwill) | | $ | 12.15 | | | $ | 12.76 | | | $ | 11.80 | |
| | | | | | | | | | | | | |
Capital Adequacy | | | | | | | | | | | | |
| Tier one leverage capital ratio (1) | | | 8.19 | % | | | 8.05 | % | | | 7.67 | % |
| | |
| (1) | | Estimated number for June 30, 2007 |
Certain amounts in prior year financial statement have been reclassified to conform to the current year’s presentation.
12
