Exhibit 99.1
Independent Bank Corp. Reports $10.6 Million of Fourth Quarter Net Income
2013 GAAP EPS of $2.18; 2013 Operating EPS Rises by 11% to a record $2.39
ROCKLAND, Mass.--(BUSINESS WIRE)--January 23, 2014--Independent Bank Corp., (NASDAQ: INDB), parent of Rockland Trust Company, today announced 2013 fourth quarter net income of $10.6 million, or $0.45 per diluted share, as compared to $14.7 million, or $0.64 per diluted share, in the prior quarter. The Company acquired Mayflower Bancorp, Inc. (“Mayflower”) on November 15, 2013 and recorded $6.2 million of merger and acquisition costs during the fourth quarter. Net income for the full year was $50.3 million, or $2.18 on a diluted earnings per share basis, as compared to $42.6 million, or $1.95 for the prior year.
Net income for the fourth quarter and full year 2013 contained items, such as merger and acquisition expenses and gains on life insurance benefits, security sales, and debt extinguishment, which the Company considers non-core. When excluding such items, net operating earnings for the fourth quarter were $14.2 million, or $0.61 per diluted share, versus the prior quarter’s net operating earnings of $14.4 million, or $0.63 per diluted share. Net operating earnings for 2013 were $55.2 million, or $2.39 on a diluted earnings per share basis, an increase of 17.2% and 10.7%, respectively, when compared to net operating earnings of $47.1 million, or $2.16 per diluted share in 2012.
“Rockland Trust had many outstanding accomplishments in 2013,” said Christopher Oddleifson, President and Chief Executive Officer of Independent Bank Corp. and Rockland Trust Company. “The teamwork of my colleagues once again produced strong financial results and growth in the face of continued strong competition for loans and deposits. During the third quarter of 2013 our ongoing talent development, succession planning, and leadership development efforts enabled us to make several important promotions from within to expand our already strong managerial capacity. We believe we are positioned for future growth and ready to take full advantage of the opportunities that lie ahead.”
MAYFLOWER ACQUISITION
The Mayflower acquisition added four full service branches and, at fair value, $126.6 million in loans and $218.9 million in deposits. Total consideration of $40.3 million was paid with stock and cash, with the Company issuing 818,650 shares of common stock and paying $10.9 million in cash, in the aggregate, to Mayflower shareholders. The following table provides the purchase price allocation of the net assets acquired for this transaction:
| | Net Assets Acquired (at Fair Value) |
| | (Dollars in Thousands) |
Assets: | | |
| Cash | | $ | 21,390 |
| Investments | | | 77,953 |
| Loans | | | 126,570 |
| Premises and Equipment | | | 7,128 |
| Goodwill | | | 20,030 |
| Core Deposit Intangible | | | 2,610 |
| Other Assets | | | 7,104 |
| Total Assets Acquired | | $ | 262,785 |
| Liabilities: | | |
| Deposits | | $ | 218,877 |
| Borrowings | | | 1,121 |
| Other Liabilities | | | 2,527 |
| Total Liabilities Assumed | | $ | 222,525 |
| Purchase Price | | $ | 40,260 |
For further detail on the loans and deposits acquired, see the organic growth table provided in the financial schedules accompanying the release.
BALANCE SHEET
Total assets of $6.1 billion at December 31, 2013 have increased by $203.8 million from the prior quarter, or 3.5%, and by $342.2 million, or 5.9%, as compared to the year ago period, inclusive of the Mayflower acquisition.
Organic loan growth was $35.7 million, or 3.1% on an annualized basis, for the quarter ended December 31, 2013, and increased by $72.7 million, or 1.6%, when compared to the year ago period. The commercial loan portfolio continued its healthy growth during the fourth quarter, increasing by $55.0 million organically, or 6.8% on an annualized basis, from the third quarter of 2013. The commercial and industrial and commercial real estate portfolios experienced strong net growth in the fourth quarter, as evidenced by annualized organic growth of 12.8% and 8.1%, respectively. This growth was somewhat offset by a decrease in the commercial construction portfolio during the same period. In addition, prepayment activity on the residential loan portfolio, despite leveling off during the quarter, continued to outpace new originations resulting in a decrease of $18.3 million, or 14.6%, on an annualized basis from the third quarter of 2013.
Exclusive of the acquisition, deposit growth increased by $10.2 million, or 0.9% on an annualized basis during the fourth quarter, as compared to the linked quarter, resulting in total deposits of $5.0 billion at December 31, 2013. Growth was led by core deposits, which increased organically by $28.5 million to 84.9% of total deposits. The total cost of deposits remained at 0.23% for the quarter, reflecting the Company’s continued emphasis on lower cost funding sources.
The securities portfolio increased by $105.7 million to $707.5 million at December 31, 2013 compared to the quarter ended September 30, 2013, and represented 11.6% of total assets at year end. The increase was primarily due to the acquired Mayflower portfolio, in addition to incremental purchases during the quarter.
Stockholders’ equity at December 31, 2013 rose to $591.5 million, an increase of 6.4% from the prior quarter, primarily as a result of the acquisition. As compared to the year ago period, stockholders’ equity has increased by $62.2 million, or 11.8%. Despite an increase in acquisition related intangibles, the Company’s Tier 1 common and tangible common ratios increased by 2 basis points during the quarter, to an estimated 9.28% and 6.91%, respectively.
NET INTEREST INCOME
Net interest income was $46.9 million for the fourth quarter of 2013, compared to $45.2 million in the linked quarter. During the fourth quarter, the Company’s net interest margin increased by 2 basis points to 3.45%, benefiting from a lower average cash position and lower borrowing costs.
NONINTEREST INCOME
The Company recorded noninterest income of $17.5 million during the fourth quarter of 2013 which represents a $666,000, or 3.7%, decrease from the prior quarter. Significant changes in noninterest income included the following:
- Deposit account fees and Interchange and ATM fees increased by $172,000 and $104,000, respectively.
- Investment management income increased by $241,000, or 5.8%, primarily due to continued growth in assets under administration, which were $2.3 billion at December 31, 2013, a 4.4% increase from the linked quarter, as well as an increase in fees received on mutual funds.
- Mortgage banking income decreased $902,000, or 48.9%, consistent with the significant decline in volume industrywide during the quarter.
- The Company recorded gains on life insurance benefits in the amount of $227,000.
- The Company recognized a gain of $258,000 on the sale of two private label collateralized mortgage obligations during the fourth quarter.
- Income from loan level derivatives decreased by $571,000, or 42.9%.
- During the third quarter the Company recognized a gain of $763,000 on the extinguishment of debt related to the prepayment of $60.0 million of Federal Home Loan Bank Advances. No additional prepayments occurred during the fourth quarter.
- Other noninterest income increased by $457,000, or 25.7%, due to capital gain distributions of $260,000 on the Company’s equity security portfolio related to Rabbi trust investments used to fund the Company’s retirement plans, as well as an increase in 1031 exchange fees of $103,000 and other small increases across various categories.
NONINTEREST EXPENSE
Inclusive of merger and acquisition costs the Company recorded noninterest expense of $47.8 million during the fourth quarter of 2013 which represents a $7.1 million, or 17.5%, increase from the prior quarter. Significant changes in noninterest expense included the following:
- Merger and acquisition expenses associated with the Mayflower acquisition were $6.2 million for the fourth quarter, which represented an increase of $5.9 million from the linked quarter.
- Occupancy and equipment expense increased $335,000, or 7.3%, from the third quarter, due to impairment recognized on closed branches, as well as general expense increases due to the addition of the four former Mayflower facilities.
- Other noninterest expenses increased by $626,000, or 5.7%, mainly due to increases in loan work-out costs of $431,000, an increase in consultant fees of $116,000, and an increase in advertising of $111,000.
On an operating basis, the Company generated a return on average assets and a return on average common equity of 0.94% and 9.81%, respectively, in the fourth quarter, as compared to 0.98% and 10.36% in the third quarter. Additionally, the return on average assets and the return on average common equity for the year ended December 31, 2013 was 0.95% and 9.99%, respectively, compared to 0.92% and 9.57%, respectively, on an operating basis for the prior year.
ASSET QUALITY
The provision for loan losses was $3.2 million for the fourth quarter compared to $2.7 million for the quarter ended September 30, 2013. For the quarter, net charge-offs were $3.5 million, an increase of $1.4 million compared to the prior quarter, or 0.30%, on an annualized basis of average loans. For the year, net charge-offs were 0.19% of average loans. Nonperforming loans decreased by $3.2 million to $34.7 million, or 0.73% of total loans at December 31, 2013, from $37.9 million, or 0.83% of total loans at September 30, 2013, due to management’s proactive approach to loan workouts. Nonperforming assets decreased to $43.8 million at the end of the fourth quarter, compared to $48.9 million in the linked quarter. Delinquency as a percentage of loans decreased to 0.86% at December 31, 2013, compared to 0.90% at September 30, 2013.
The allowance for loan losses was $53.2 million at December, 2013, remaining consistent with the prior quarter levels. The Company’s allowance for loan losses was 1.13% and 1.18% of total loans at December 31, 2013 and September 30, 2013, respectively. Loans acquired in connection with the Mayflower acquisition have been recorded at fair value, including a reduction for estimated credit losses, and without carryover of the respective portfolio’s historical allowance for loan losses. Excluding these recently acquired loans at December 31, 2013, the allowance for loan losses would have been approximately 1.16% of total loans.
CONFERENCE CALL INFORMATION
Christopher Oddleifson - Chief Executive Officer and Robert Cozzone - Chief Financial Officer will host a conference call to discuss fourth quarter earnings at 10:00 a.m. Eastern Time on Friday, January 24, 2014. Internet access to the call is available on the Company’s website at www.RocklandTrust.com or via telephonic access by dial-in at 1-888-317-6016 reference: INDB. A replay of the call will be available by calling 1-877-344-7529. Replay Pass code: 10038888. The webcast replay will be available until January 24, 2015.
ABOUT INDEPENDENT BANK CORP.
Independent Bank Corp. has approximately $6.1 billion in assets and is the holding company for Rockland Trust Company, a full-service commercial bank headquartered in Massachusetts. Rockland Trust offers a wide range of banking, investment, and insurance services to businesses and individuals through retail branches, commercial lending offices, investment management offices, and residential lending centers located in Eastern Massachusetts and Rhode Island and through telephone banking, mobile banking, and the Internet. To find out why Rockland Trust is the bank “Where Each Relationship Matters ®”, please visit www.rocklandtrust.com. Rockland Trust is an FDIC Member and an Equal Housing Lender.
This press release contains certain “forward-looking statements” with respect to the financial condition, results of operations and business of the Company. These statements may be identified by such forward-looking terminology as “expect,” “achieve,” “plan,” “believe,” “future,” “positioned,” “continued,” “will,” “would,” “potential,” or similar statements or variations of such terms. Actual results may differ from those contemplated by these forward-looking statements.
Factors that may cause actual results to differ materially from those contemplated by such forward-looking statements include, but are not limited to:
- a weakening in the United States economy in general and the regional and local economies within the New England region and the Company’s market area;
- adverse changes in the local real estate market;
- a further deterioration of the credit rating for U.S. long-term sovereign debt;
- acquisitions may not produce results at levels or within time frames originally anticipated and may result in unforeseen integration issues or impairment of goodwill and/or other intangibles;
- changes in, trade, monetary and fiscal policies and laws, including interest rate policies of the Board of Governors of the Federal Reserve System;
- higher than expected tax rates and any changes in and any failure by the Company to comply with tax laws generally and requirements of the federal New Markets Tax Credit program;
- unexpected changes in market interest rates for interest earning assets and/or interest bearing liabilities;
- adverse changes in asset quality including an unanticipated credit deterioration in our loan portfolio;
- unexpected increased competition in the Company’s market area;
- unanticipated loan delinquencies, loss of collateral, decreased service revenues, and other potential negative effects on our business caused by severe weather or other external events;
- a deterioration in the conditions of the securities markets;
- our inability to adapt to changes in information technology;
- electronic fraudulent activity within the financial services industry, especially in the commercial banking sector;
- adverse changes in consumer spending and savings habits;
- the effect of new laws and regulations regarding the financial services industry including, but not limited to, the Dodd-Frank Wall Street Reform and Consumer Protection Act;
- changes in laws and regulations (including laws and regulations concerning taxes, banking, securities and insurance) generally applicable to the Company’s business;
- changes in accounting policies, practices and standards, as may be adopted by the regulatory agencies as well as the Public Company Accounting Oversight Board, the Financial Accounting Standards Board, and other accounting standard setters; and
- other unexpected material adverse changes in our operations or earnings.
The Company wishes to caution readers not to place undue reliance on any forward-looking statements as the Company’s business and its forward-looking statements involve substantial known and unknown risks and uncertainties included in the Company’s Annual Report on Form 10-K and Quarterly Reports on Form 10-Q (“Risk Factors”). Except as required by law, 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. Any public statements or disclosures by the Company following this release which modify or impact any of the forward-looking statements contained in this release will be deemed to modify or supersede such statements in this release. In addition to the information set forth in this press release, you should carefully consider the Risk Factors.
This press release contains financial information determined by methods other than in accordance with accounting principles generally accepted in the United States of America (“GAAP”). Operating earnings and operating EPS, which are non-GAAP financial measures, which exclude gain or loss due to items that management believes are unrelated to its core banking business and will not have a material financial impact on operating results in future periods, such as gains or losses on the sales of securities, merger and acquisition expenses, and other items. The Company’s management uses operating earnings and operating EPS to measure the strength of the Company’s core banking business and to identify trends that may to some extent be obscured by such gains or losses. The Company has included information on operating earnings and operating EPS because management believes that investors may find it useful to have access to the same analytical tool used by management and may also find that it facilitates the comparison of the Company to other companies in the financial services industry. Non-GAAP operating earnings and operating EPS should not be viewed as a substitute for operating results determined in accordance with GAAP. An item which management deems to be non-core and excludes when computing non-GAAP operating earnings and operating EPS can be of substantial importance to the Company’s results for any particular quarter or year. The Company’s non-GAAP operating earnings and operating EPS are not necessarily comparable to non-GAAP performance measures which may be presented by other companies.
| INDEPENDENT BANK CORP. FINANCIAL SUMMARY | | | | | | | | | | |
| | | | | | | | | | |
| | | | | | | | | | |
| | | | | | | | | | |
| | | | | | | | % Change | | % Change |
CONSOLIDATED BALANCE SHEETS
(Unaudited Dollars in thousands) | | December 31,
2013 | | September 30,
2013 | | December 31,
2012 | | Dec 2013 vs.
Sept 2013 | | Dec 2013 vs.
Dec 2012 |
| | | | | | | | | | |
| Assets | | | | | | | | | | |
| Cash and due from banks | | $ | 168,106 | | | $ | 185,111 | | | $ | 98,144 | | | -9.19 | % | | 71.29 | % |
| Interest-earning deposits with banks | | | 48,219 | | | | 122,072 | | | | 117,330 | | | -60.50 | % | | -58.90 | % |
| Securities | | | | | | | | | | |
| Securities available for sale | | | 356,862 | | | | 284,398 | | | | 329,286 | | | 25.48 | % | | 8.37 | % |
| Securities held to maturity | | | 350,652 | | | | 317,373 | | | | 178,318 | | | 10.49 | % | | 96.64 | % |
| Total securities | | | 707,514 | | | | 601,771 | | | | 507,604 | | | 17.57 | % | | 39.38 | % |
| | | | | | | | | | |
| Loans held for sale | | | 8,882 | | | | 10,667 | | | | 48,187 | | | -16.73 | % | | -81.57 | % |
| Loans | | | | | | | | | | |
| Commercial and industrial | | | 784,202 | | | | 756,222 | | | | 687,511 | | | 3.70 | % | | 14.06 | % |
| Commercial real estate | | | 2,249,260 | | | | 2,166,281 | | | | 2,122,153 | | | 3.83 | % | | 5.99 | % |
| Commercial construction | | | 223,859 | | | | 236,466 | | | | 188,768 | | | -5.33 | % | | 18.59 | % |
| Small business | | | 77,240 | | | | 75,273 | | | | 78,594 | | | 2.61 | % | | -1.72 | % |
| Total commercial | | | 3,334,561 | | | | 3,234,242 | | | | 3,077,026 | | | 3.10 | % | | 8.37 | % |
| Residential real estate | | | 541,443 | | | | 496,464 | | | | 612,881 | | | 9.06 | % | | -11.66 | % |
| Home equity - 1st position | | | 497,075 | | | | 492,732 | | | | 487,246 | | | 0.88 | % | | 2.02 | % |
| Home equity - 2nd position | | | 325,066 | | | | 311,938 | | | | 314,903 | | | 4.21 | % | | 3.23 | % |
| Total consumer real estate | | | 1,363,584 | | | | 1,301,134 | | | | 1,415,030 | | | 4.80 | % | | -3.64 | % |
| Other consumer | | | 20,162 | | | | 20,653 | | | | 26,955 | | | -2.38 | % | | -25.20 | % |
| Total loans | | | 4,718,307 | | | | 4,556,029 | | | | 4,519,011 | | | 3.56 | % | | 4.41 | % |
| Less - allowance for loan losses | | | (53,239 | ) | | | (53,562 | ) | | | (51,834 | ) | | -0.60 | % | | 2.71 | % |
| Net loans | | | 4,665,068 | | | | 4,502,467 | | | | 4,467,177 | | | 3.61 | % | | 4.43 | % |
| Federal Home Loan Bank stock | | | 39,926 | | | | 38,674 | | | | 41,767 | | | 3.24 | % | | -4.41 | % |
| Bank premises and equipment | | | 64,950 | | | | 56,729 | | | | 55,227 | | | 14.49 | % | | 17.61 | % |
| Goodwill and core deposit intangible | | | 182,642 | | | | 160,562 | | | | 162,144 | | | 13.75 | % | | 12.64 | % |
| Other assets | | | 213,927 | | | | 217,411 | | | | 259,405 | | | -1.60 | % | | -17.53 | % |
| Total assets | | $ | 6,099,234 | | | $ | 5,895,464 | | | $ | 5,756,985 | | | 3.46 | % | | 5.94 | % |
| | | | | | | | | | |
| Liabilities and Stockholders' Equity | | | | | | | | | | |
| Deposits | | | | | | | | | | |
| Demand deposits | | $ | 1,369,432 | | | $ | 1,339,134 | | | $ | 1,248,394 | | | 2.26 | % | | 9.70 | % |
| Savings and interest checking accounts | | | 1,940,153 | | | | 1,843,795 | | | | 1,691,187 | | | 5.23 | % | | 14.72 | % |
| Money market | | | 933,205 | | | | 882,764 | | | | 853,971 | | | 5.71 | % | | 9.28 | % |
| Time certificates of deposit | | | 743,628 | | | | 691,616 | | | | 753,125 | | | 7.52 | % | | -1.26 | % |
| Total deposits | | | 4,986,418 | | | | 4,757,309 | | | | 4,546,677 | | | 4.82 | % | | 9.67 | % |
| Borrowings | | | | | | | | | | |
| Federal Home Loan Bank borrowings | | | 140,294 | | | | 189,539 | | | | 271,569 | | | -25.98 | % | | -48.34 | % |
| Customer repurchase agreements and other short-term borrowings | | | 154,288 | | | | 164,180 | | | | 165,359 | | | -6.03 | % | | -6.70 | % |
| Wholesale repurchase agreements | | | 50,000 | | | | 50,000 | | | | 50,000 | | | 0.00 | % | | 0.00 | % |
| Junior subordinated debentures | | | 73,906 | | | | 73,962 | | | | 74,127 | | | -0.08 | % | | -0.30 | % |
| Subordinated debentures | | | 30,000 | | | | 30,000 | | | | 30,000 | | | 0.00 | % | | 0.00 | % |
| Total borrowings | | | 448,488 | | | | 507,681 | | | | 591,055 | | | -11.66 | % | | -24.12 | % |
| Total deposits and borrowings | | | 5,434,906 | | | | 5,264,990 | | | | 5,137,732 | | | 3.23 | % | | 5.78 | % |
| Other liabilities | | | 72,788 | | | | 74,730 | | | | 89,933 | | | -2.60 | % | | -19.06 | % |
| Stockholders' equity | | | | | | | | | | |
| Common stock | | | 235 | | | | 227 | | | | 225 | | | 3.52 | % | | 4.44 | % |
| Additional paid in capital | | | 305,179 | | | | 274,369 | | | | 269,950 | | | 11.23 | % | | 13.05 | % |
| Retained earnings | | | 293,560 | | | | 288,208 | | | | 263,671 | | | 1.86 | % | | 11.34 | % |
| Accumulated other comprehensive loss, net of tax | | | (7,434 | ) | | | (7,060 | ) | | | (4,526 | ) | | 5.30 | % | | 64.25 | % |
| Total stockholders' equity | | | 591,540 | | | | 555,744 | | | | 529,320 | | | 6.44 | % | | 11.75 | % |
| Total liabilities and stockholders' equity | | $ | 6,099,234 | | | $ | 5,895,464 | | | $ | 5,756,985 | | | 3.46 | % | | 5.94 | % |
| | | | | | | | | | |
| | | | | | | | | | |
| | | | | | | | | | |
| | | | | | | | | | |
| | | | | | | | | | |
| CONSOLIDATED STATEMENTS OF INCOME | | Three Months Ended | | | | |
| (Unaudited Dollars in thousands) | | | | | | | | % Change | | % Change |
| | December 31,
2013 | | September 30,
2013 | | December 31,
2012 | | Dec 2013 vs.
Sept 2013 | | Dec 2013 vs.
Dec 2012 |
| | | | | | | | | | |
| Interest income | | | | | | | | | | |
| Interest on fed funds sold and short term investments | | $ | 65 | | | $ | 79 | | | $ | 47 | | | -17.72 | % | | 38.30 | % |
| Interest and dividends on securities | | | 4,362 | | | | 3,773 | | | | 3,753 | | | 15.61 | % | | 16.23 | % |
| Interest on loans | | | 48,032 | | | | 47,019 | | | | 47,166 | | | 2.15 | % | | 1.84 | % |
| Interest on loans held for sale | | | 112 | | | | 156 | | | | 448 | | | -28.21 | % | | -75.00 | % |
| Total interest income | | | 52,571 | | | | 51,027 | | | | 51,414 | | | 3.03 | % | | 2.25 | % |
| Interest expense | | | | | | | | | | |
| Interest on deposits | | | 2,766 | | | | 2,649 | | | | 2,658 | | | 4.42 | % | | 4.06 | % |
| Interest on borrowed funds | | | 2,900 | | | | 3,182 | | | | 3,277 | | | -8.86 | % | | -11.50 | % |
| Total interest expense | | | 5,666 | | | | 5,831 | | | | 5,935 | | | -2.83 | % | | -4.53 | % |
| Net interest income | | | 46,905 | | | | 45,196 | | | | 45,479 | | | 3.78 | % | | 3.14 | % |
| Less - provision for loan losses | | | 3,150 | | | | 2,650 | | | | 4,350 | | | 18.87 | % | | -27.59 | % |
| Net interest income after provision for loan losses | | | 43,755 | | | | 42,546 | | | | 41,129 | | | 2.84 | % | | 6.38 | % |
| Noninterest income | | | | | | | | | | |
| Deposit account fees | | | 4,776 | | | | 4,604 | | | | 4,159 | | | 3.74 | % | | 14.84 | % |
| Interchange and ATM fees | | | 2,949 | | | | 2,845 | | | | 2,594 | | | 3.66 | % | | 13.69 | % |
| Investment management | | | 4,416 | | | | 4,175 | | | | 3,666 | | | 5.77 | % | | 20.46 | % |
| Mortgage banking income | | | 941 | | | | 1,843 | | | | 2,261 | | | -48.94 | % | | -58.38 | % |
| Increase in cash surrender value of life insurance policies | | | 904 | | | | 793 | | | | 903 | | | 14.00 | % | | 0.11 | % |
| Gain on life insurance benefits | | | 227 | | | | - | | | | - | | | 100.00 | % | | n/a | |
| Net gain on sale of securities | | | 258 | | | | - | | | | 5 | | | 100.00 | % | | 5060.00 | % |
| Loan level derivative income | | | 760 | | | | 1,331 | | | | 711 | | | -42.90 | % | | 6.89 | % |
| Gain on extinguishment of debt | | | - | | | | 763 | | | | - | | | 100.00 | % | | 100.00 | % |
| Other noninterest income | | | 2,233 | | | | 1,776 | | | | 2,717 | | | 25.73 | % | | -17.81 | % |
| Total noninterest income | | | 17,464 | | | | 18,130 | | | | 17,016 | | | -3.67 | % | | 2.63 | % |
| Noninterest expense | | | | | | | | | | |
| Salaries and employee benefits | | | 22,931 | | | | 22,654 | | | | 22,099 | | | 1.22 | % | | 3.76 | % |
| Occupancy and equipment expenses | | | 4,908 | | | | 4,573 | | | | 4,555 | | | 7.33 | % | | 7.75 | % |
| Data processing and facilities management | | | 1,183 | | | | 1,179 | | | | 1,227 | | | 0.34 | % | | -3.59 | % |
| FDIC assessment | | | 926 | | | | 898 | | | | 878 | | | 3.12 | % | | 5.47 | % |
| Prepayment fee on borrowings | | | - | | | | - | | | | 7 | | | n/a | | | -100.00 | % |
| Merger and acquisition expenses | | | 6,219 | | | | 366 | | | | 5,474 | | | 1599.18 | % | | 13.61 | % |
| Other noninterest expense | | | 11,678 | | | | 11,052 | | | | 10,810 | | | 5.66 | % | | 8.03 | % |
| Total noninterest expense | | | 47,845 | | | | 40,722 | | | | 45,050 | | | 17.49 | % | | 6.20 | % |
| Income before income taxes | | | 13,374 | | | | 19,954 | | | | 13,095 | | | -32.98 | % | | 2.13 | % |
| Provision for income taxes | | | 2,786 | | | | 5,299 | | | | 3,127 | | | -47.42 | % | | -10.91 | % |
| Net income | | $ | 10,588 | | | $ | 14,655 | | | $ | 9,968 | | | -27.75 | % | | 6.22 | % |
| | | | | | | | | | |
| Basic earnings per share | | $ | 0.45 | | | $ | 0.64 | | | $ | 0.45 | | | -29.69 | % | | 0.00 | % |
| Diluted earnings per share | | $ | 0.45 | | | $ | 0.64 | | | $ | 0.45 | | | -29.69 | % | | 0.00 | % |
| Basic average shares | | | 23,383,608 | | | | 22,946,308 | | | | 22,286,841 | | | | | |
| Diluted average shares | | | 23,481,053 | | | | 23,047,114 | | | | 22,318,343 | | | | | |
| | | | | | | | | | |
Performance ratios | | | | | | | | | | |
| Net interest margin (FTE) | | | 3.45 | % | | | 3.43 | % | | | 3.68 | % | | | | |
| Return on average assets | | | 0.70 | % | | | 1.00 | % | | | 0.73 | % | | | | |
| Return on average common equity | | | 7.29 | % | | | 10.53 | % | | | 7.68 | % | | | | |
| | | | | | | | | | |
Reconciliation table - non-GAAP financial information | | | | | | | | | | |
| Net income | | $ | 10,588 | | | $ | 14,655 | | | $ | 9,968 | | | -27.75 | % | | 6.22 | % |
| Noninterest income components | | | | | | | | | | |
| Less - gain on sale of securities, net of tax | | | (153 | ) | | | - | | | | (3 | ) | | | | |
| Less - gain on life insurance benefits (tax exempt) | | | (227 | ) | | | - | | | | - | | | | | |
| Less - gain on extinguishment of debt, net of tax | | | - | | | | (451 | ) | | | - | | | | | |
| Noninterest expense components | | | | | | | | | | |
| Add - prepayment fees on borrowings, net of tax | | | - | | | | - | | | | 4 | | | | | |
| Add - merger & acquisition expenses, net of tax | | | 4,033 | | | | 216 | | | | 3,710 | | | | | |
| Net operating earnings | | $ | 14,241 | | | $ | 14,420 | | | $ | 13,679 | | | -1.25 | % | | 4.11 | % |
| | | | | | | | | | |
| Diluted earnings per share, on an operating basis | | $ | 0.61 | | | $ | 0.63 | | | $ | 0.61 | | | -3.17 | % | | 0.00 | % |
CONSOLIDATED STATEMENTS OF INCOME | | | | | | | | | | | |
| | Twelve Months Ended | | % Change |
| | December 31,
2013 | | December 31,
2012 | | Dec 2013 vs.
Dec 2012 | |
| | | | | | | | | | | |
| Interest income | | | | | | | | | | | |
| Interest on fed funds sold and short term investments | | $ | 200 | | | $ | 132 | | | 51.52 | % |
| Interest and dividends on securities | | | 15,192 | | | | 16,763 | | | -9.37 | % |
| Interest on loans | | | 189,748 | | | | 178,309 | | | 6.42 | % |
| Interest on loans held for sale | | | 774 | | | | 988 | | | -21.66 | % |
| Total interest income | | | 205,914 | | | | 196,192 | | | 4.96 | % |
| Interest expense | | | | | | | | | | | |
| Interest on deposits | | | 10,624 | | | | 10,703 | | | -0.74 | % |
| Interest on borrowed funds | | | 12,712 | | | | 12,690 | | | 0.17 | % |
| Total interest expense | | | 23,336 | | | | 23,393 | | | -0.24 | % |
| Net interest income | | | 182,578 | | | | 172,799 | | | 5.66 | % |
| Less - provision for loan losses | | | 10,200 | | | | 18,056 | | | -43.51 | % |
| Net interest income after provision for loan losses | | | 172,378 | | | | 154,743 | | | 11.40 | % |
| Noninterest income | | | | | | | | | | | |
| Deposit account fees | | | 17,940 | | | | 15,930 | | | 12.62 | % |
| Interchange and ATM fees | | | 10,883 | | | | 9,783 | | | 11.24 | % |
| Investment management | | | 16,832 | | | | 14,779 | | | 13.89 | % |
| Mortgage banking income | | | 6,734 | | | | 6,500 | | | 3.60 | % |
| Increase in cash surrender value of life insurance policies | | | 3,229 | | | | 3,114 | | | 3.69 | % |
| Gain on life insurance benefits | | | 227 | | | | 1,307 | | | -82.63 | % |
| Net gain on sale of securities | | | 258 | | | | 5 | | | 5060.00 | % |
| Loan level derivative income | | | 3,439 | | | | 3,457 | | | -0.52 | % |
| Gain on extinguishment of debt | | | 763 | | | | - | | | 100.00 | % |
| Other noninterest income | | | 7,704 | | | | 7,141 | | | 7.88 | % |
| Total noninterest income | | | 68,009 | | | | 62,016 | | | 9.66 | % |
| Noninterest expense | | | | | | | | | | | |
| Salaries and employee benefits | | | 89,894 | | | | 84,014 | | | 7.00 | % |
| Occupancy and equipment expenses | | | 19,650 | | | | 17,307 | | | 13.54 | % |
| Data processing and facilities management | | | 4,748 | | | | 4,644 | | | 2.24 | % |
| FDIC assessment | | | 3,579 | | | | 3,232 | | | 10.74 | % |
| Prepayment fee on borrowings | | | - | | | | 7 | | | -100.00 | % |
| Merger and acquisition expenses | | | 8,685 | | | | 6,741 | | | 28.84 | % |
| Goodwill impairment | | | - | | | | 2,227 | | | -100.00 | % |
| Other noninterest expense | | | 47,093 | | | | 41,287 | | | 14.06 | % |
| Total noninterest expense | | | 173,649 | | | | 159,459 | | | 8.90 | % |
| Income before income taxes | | | 66,738 | | | | 57,300 | | | 16.47 | % |
| Provision for income taxes | | | 16,484 | | | | 14,673 | | | 12.34 | % |
| Net income | | $ | 50,254 | | | $ | 42,627 | | | 17.89 | % |
| | | | | | | | | | | |
| Basic earnings per share | | $ | 2.18 | | | $ | 1.96 | | | 11.22 | % |
| Diluted earnings per share | | $ | 2.18 | | | $ | 1.95 | | | 11.79 | % |
| Basic average shares | | | 23,011,814 | | | | 21,782,499 | | | | |
| Diluted average shares | | | 23,088,578 | | | | 21,812,316 | | | | |
| | | | | | | | | | | |
Performance ratios | | | | | | | | | | | |
| Net interest margin (FTE) | | | 3.51 | % | | | 3.75 | % | | | |
| Return on average assets | | | 0.87 | % | | | 0.83 | % | | | |
| Return on average common equity | | | 9.09 | % | | | 8.66 | % | | | |
| | | | | | | | | | | |
Reconciliation table - non-GAAP financial information | | | | | | | | | | | |
| Net income | | $ | 50,254 | | | $ | 42,627 | | | 17.89 | % |
| Noninterest income components | | | | | | | | | | | |
| Less - gain on sale of securities, net of tax | | | (153 | ) | | | (3 | ) | | | |
| Less - gain on life insurance benefits, tax exempt | | | (227 | ) | | | (1,307 | ) | | | |
| Less - gain on extinguishment of debt, net of tax | | | (451 | ) | | | - | | | | |
| Noninterest expense components | | | | | | | | | | | |
| Add - Prepayment Fees on Borrowings, net of tax | | | - | | | | 4 | | | | |
| Add - severance, net of tax | | | 192 | | | | - | | | | |
| Add - merger & acquisition expenses, net of tax | | | 5,564 | | | | 4,459 | | | | |
| Add - goodwill impairment, net of tax | | | - | | | | 1,317 | | | | |
| Net operating earnings | | $ | 55,179 | | | $ | 47,097 | | | 17.16 | % |
| | | | | | | | | | | |
| Diluted earnings per share, on an operating basis | | $ | 2.39 | | | $ | 2.16 | | | 10.65 | % |
| | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | |
Reconciliation table - non-GAAP financial information | | | | | | | | | | | | | | | | | | | | | | |
| (Unaudited Dollars in thousands) | | | Three Months Ended | | | Twelve Months Ended |
| | | | | | | | | | | | | | | % Change | | | | | % Change | | | | | | | | | | % Change | |
| | | December 31,
2013 | | | | September 30,
2013 | | | | December 31,
2012 | | | Dec 2013 vs.
Sept 2013 | | | Dec 2013 vs.
Dec 2012 | | | December 31,
2013 | | December 31,
2012 | | | Dec 2013 vs.
Dec 2012 |
| | | | | | | | | | | | | | | | | | | | | | | | | |
| Noninterest income GAAP | | | $ | 17,464 | | | | | $ | 18,130 | | | | | $ | 17,016 | | | | | -3.67 | % | | | | 2.63 | % | | | $ | 68,009 | | | $ | 62,016 | | | | | 9.66 | % |
| Less - net gain on sale of securities | | | | (258 | ) | | | | | - | | | | | | (5 | ) | | | | 100.00 | % | | | | 5060.00 | % | | | | (258 | ) | | | (5 | ) | | | | 5060.00 | % |
| Less - gain on life insurance benefits | | | | (227 | ) | | | | | - | | | | | | - | | | | | 100.00 | % | | | | 100.00 | % | | | | (227 | ) | | | (1,307 | ) | | | | -82.63 | % |
| Less - gain on extinguishment of debt | | | | - | | | | | | (763 | ) | | | | | - | | | | | -100.00 | % | | | | n/a | | | | | (763 | ) | | | - | | | | | 100.00 | % |
| Total noninterest income as adjusted | | | $ | 16,979 | | | | | $ | 17,367 | | | | | $ | 17,011 | | | | | -2.23 | % | | | | -0.19 | % | | | $ | 66,761 | | | $ | 60,704 | | | | | 9.98 | % |
| | | | | | | | | | | | | | | | | | | | | | | | | |
| Noninterest expense GAAP | | | $ | 47,845 | | | | | $ | 40,722 | | | | | $ | 45,050 | | | | | 17.49 | % | | | | 6.20 | % | | | $ | 173,649 | | | $ | 159,459 | | | | | 8.90 | % |
| Less - prepayment fee on borrowings | | | | - | | | | | | - | | | | | | (7 | ) | | | | n/a | | | | | -100.00 | % | | | | - | | | | (7 | ) | | | | -100.00 | % |
| Less - severance | | | | - | | | | | | - | | | | | | - | | | | | n/a | | | | | n/a | | | | | (325 | ) | | | - | | | | | 100.00 | % |
| Less - merger and acquisition expenses | | | | (6,219 | ) | | | | | (366 | ) | | | | | (5,474 | ) | | | | 1599.18 | % | | | | 13.61 | % | | | | (8,685 | ) | | | (6,741 | ) | | | | 28.84 | % |
| Less - goodwill impairment | | | | - | | | | | | - | | | | | | - | | | | | n/a | | | | | n/a | | | | | - | | | | (2,227 | ) | | | | -100.00 | % |
| Total noninterest expense as adjusted | | | $ | 41,626 | | | | | $ | 40,356 | | | | | $ | 39,569 | | | | | 3.15 | % | | | | 5.20 | % | | | $ | 164,639 | | | $ | 150,484 | | | | | 9.41 | % |
| | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | |
Asset quality | | | Nonperforming Assets
At | | | Net Charge-Offs
For the Three Months Ending | | Net Charge-Offs
For the Twelve Months Ending |
| | | December 31,
2013 | | | | September 30,
2013 | | | | December 31,
2012 | | | December 31,
2013 | | | September 30,
2013 | | | December 31,
2012 | | December 31,
2013 | | | December 31,
2012 |
| | | | | | | | | | | | | | | | | | | | | | | | | |
| Nonperforming loans | | | | | | | | | | | | | | | | | | | | | | | | | |
| Commercial & industrial loans | | | $ | 4,178 | | | | | $ | 4,557 | | | | | $ | 2,666 | | | | $ | 83 | | | | $ | 842 | | | | $ | (326 | ) | | $ | 2,411 | | | | $ | 5,228 | |
| Commercial real estate loans | | | | 11,834 | | | | | | 12,900 | | | | | | 6,574 | | | | | 2,567 | | | | | 428 | | | | | 990 | | | | 3,589 | | | | | 4,160 | |
| Small business loans | | | | 633 | | | | | | 615 | | | | | | 570 | | | | | 112 | | | | | 37 | | | | | 197 | | | | 494 | | | | | 482 | |
| Residential real estate loans | | | | 10,791 | | | | | | 12,251 | | | | | | 11,472 | | | | | 113 | | | | | 205 | | | | | 581 | | | | 479 | | | | | 943 | |
| Home equity | | | | 7,068 | | | | | | 7,320 | | | | | | 7,311 | | | | | 354 | | | | | 398 | | | | | 646 | | | | 1,235 | | | | | 3,085 | |
| Other consumer | | | | 155 | | | | | | 244 | | | | | | 173 | | | | | 244 | | | | | 154 | | | | | 174 | | | | 587 | | | | | 584 | |
| Total nonperforming loans / total net charge-offs | | | $ | 34,659 | | | | | $ | 37,887 | | | | | $ | 28,766 | | | | $ | 3,473 | | | | $ | 2,064 | | | | $ | 2,262 | | | $ | 8,795 | | | | $ | 14,482 | |
| Nonaccrual securities | | | | 1,541 | | | | | | 1,628 | | | | | | 1,511 | | | | | | | | | | | | | | | |
| Other assets in possession | | | | 167 | | | | | | 176 | | | | | | 176 | | | | | | | | | | | | | | | |
| Other real estate owned | | | | 7,466 | | | | | | 9,188 | | | | | | 11,974 | | | | | | | | | | | | | | | |
| Total nonperforming assets | | | $ | 43,833 | | | | | $ | 48,879 | | | | | $ | 42,427 | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | |
| Nonperforming loans/gross loans | | | | 0.73 | % | | | | | 0.83 | % | | | | | 0.64 | % | | | | | | | | | | | | | | |
| Allowance for loan losses/nonperforming loans | | | | 153.61 | % | | | | | 141.37 | % | | | | | 180.19 | % | | | | | | | | | | | | | | |
| Gross loans/total deposits | | | | 94.62 | % | | | | | 95.77 | % | | | | | 99.39 | % | | | | | | | | | | | | | | |
| Allowance for loan losses/total loans | | | | 1.13 | % | | | | | 1.18 | % | | | | | 1.15 | % | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | |
| Net charge-offs to average loans (quarter annualized) | | | | | | | | | | | | | | | 0.30 | % | | | | 0.18 | % | | | | 0.21 | % | | | | | |
| Net charge-offs to average loans (year-to-date) | | | | | | | | | | | | | | | | | | | | | | | 0.19 | % | | | | 0.36 | % |
| | | Troubled Debt Restructurings
At | | | | | | | | | | | | | | |
| | | December 31, | | | | September 30, | | | | December 31, | | | | | | | | | | | | |
| | | 2013 | | | | 2013 | | | | 2012 | | | | | | | | | | | | | | |
| Troubled debt restructurings on accrual status | | | $ | 38,410 | | | | | $ | 36,429 | | | | | $ | 46,764 | | | | | | | | | | | | | | | |
| Troubled debt restructurings on nonaccrual status | | | | 7,454 | | | | | | 8,567 | | | | | | 6,554 | | | | | | | | | | | | | | | |
| Total troubled debt restructurings | | | $ | 45,864 | | | | | $ | 44,996 | | | | | $ | 53,318 | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | |
| | | Three Months Ending | | | | | | | | | | | | | | |
| | | December 31, | | | | September 30, | | | | December 31, | | | | | | | | | | | | |
Nonperforming assets reconciliation | | | 2013 | | | | 2013 | | | | 2012 | | | | | | | | | | | | | | |
| Nonperforming assets beginning balance | | | $ | 48,879 | | | | | $ | 48,105 | | | | | $ | 41,529 | | | | | | | | | | | | | | | |
| New to Nonperforming | | | | 12,275 | | | | | | 21,863 | | | | | | 6,927 | | | | | | | | | | | | | | | |
| Loans charged-off | | | | (4,097 | ) | | | | | (2,368 | ) | | | | | (3,053 | ) | | | | | | | | | | | | | | |
| Loans paid-off | | | | (7,073 | ) | | | | | (12,599 | ) | | | | | (2,438 | ) | | | | | | | | | | | | | | |
| Loans transferred to other real estate owned/other assets | | | | (523 | ) | | | | | (1,207 | ) | | | | | (1,632 | ) | | | | | | | | | | | | | | |
| Loans restored to accrual status | | | | (3,251 | ) | | | | | (5,169 | ) | | | | | (2,194 | ) | | | | | | | | | | | | | | |
| New to other real estate owned | | | | 523 | | | | | | 1,207 | | | | | | 1,632 | | | | | | | | | | | | | | | |
| Acquired other real estate owned | | | | 419 | | | | | | - | | | | | | 2,633 | | | | | | | | | | | | | | | |
| Sale of other real estate owned | | | | (2,386 | ) | | | | | (1,757 | ) | | | | | (1,281 | ) | | | | | | | | | | | | | | |
| Other | | | | (933 | ) | | | | | 804 | | | | | | 304 | | | | | | | | | | | | | | | |
| Nonperforming assets ending balance | | | $ | 43,833 | | | | | $ | 48,879 | | | | | $ | 42,427 | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | |
| | | December 31, | | | | September 30, | | | | December 31, | | | | | | | | | | | | |
Financial ratios | | | 2013 | | | | 2013 | | | | 2012 | | | | | | | | | | | | | | |
| Book value per common share | | | $ | 24.85 | | | | | $ | 24.21 | | | | | $ | 23.24 | | | | | | | | | | | | | | | |
| Tangible book value per share | | | $ | 17.18 | | | | | $ | 17.21 | | | | | $ | 16.12 | | | | | | | | | | | | | | | |
| Tangible common book value per share (proforma to include | | | | | | | | | | | | | | | | | | | | | | | | | |
| the tax deductibility of goodwill) - non-GAAP | | | $ | 18.02 | | | | | $ | 18.06 | | | | | $ | 17.00 | | | | | | | | | | | | | | | |
| Tangible common capital/tangible assets | | | | 6.91 | % | | | | | 6.89 | % | | | | | 6.56 | % | | | | | | | | | | | | | | |
| Tangible common capital/tangible asset (proforma to include | | | | | | | | | | | | | | | | | | | | | | | | | |
| the tax deductibility of goodwill) - non-GAAP | | | | 7.23 | % | | | | | 7.20 | % | | | | | 6.90 | % | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | |
| Capital adequacy | | | | | | | | | | | | | | | | | | | | | | | | | |
| Tier one leverage capital ratio (1) | | | | 8.64 | % | | | | | 8.64 | % | | | | | 8.65 | % | | | | | | | | | | | | | | |
| Tier one common ratio (1) | | | | 9.28 | % | | | | | 9.26 | % | | | | | 8.76 | % | | | | | | | | | | | | | | |
| (1) Estimated number for December 31, 2013 | | | | | | | | | | | | | | | | | | | | | | | | | |
INDEPENDENT BANK CORP. SUPPLEMENTAL FINANCIAL INFORMATION | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | |
| (Unaudited - Dollars in thousands) | | Three Months Ended |
| | December 31, 2013 | | | September 30, 2013 | | | December 31, 2012 |
| | | | | Interest | | | | | | | | Interest | | | | | | | Interest | |
| | | Average | | Earned/ | | Yield/ | | | Average | | Earned/ | Yield/ | | | Average | | Earned/ | Yield/ |
| | Balance | | Paid | | Rate | | | Balance | | Paid | Rate | | | Balance | | Paid | Rate |
| | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | |
| Interest-earning assets | | | | | | | | | | | | | | | | | | | | | | | | |
| Interest-earning deposits with banks, federal funds sold, and short term investments | | $ | 104,749 | | | $ | 65 | | | 0.25 | % | | | $ | 128,027 | | | $ | 79 | | 0.24 | % | | | $ | 79,894 | | | $ | 47 | | 0.23 | % |
| Securities | | | | | | | | | | | | | | | | | | | | | | | | |
| Taxable investment securities | | | 646,708 | | | | 4,339 | | | 2.66 | % | | | | 561,678 | | | | 3,763 | | 2.66 | % | | | | 509,289 | | | | 3,742 | | 2.92 | % |
| Nontaxable investment securities (1) | | | 3,394 | | | | 35 | | | 4.09 | % | | | | 844 | | | | 15 | | 7.05 | % | | | | 915 | | | | 19 | | 8.26 | % |
| Total securities | | | 650,102 | | | | 4,374 | | | 2.67 | % | | | | 562,522 | | | | 3,778 | | 2.66 | % | | | | 510,204 | | | | 3,761 | | 2.93 | % |
| Loans held for sale | | | 12,553 | | | | 112 | | | 3.54 | % | | | | 20,784 | | | | 156 | | 2.98 | % | | | | 48,091 | | | | 448 | | 3.71 | % |
| Loans | | | | | | | | | | | | | | | | | | | | | | | | |
| Commercial and industrial | | | 770,729 | | | | 7,707 | | | 3.97 | % | | | | 746,767 | | | | 7,358 | | 3.91 | % | | | | 666,606 | | | | 6,666 | | 3.98 | % |
| Commercial real estate (1) | | | 2,231,793 | | | | 24,386 | | | 4.34 | % | | | | 2,159,869 | | | | 23,812 | | 4.37 | % | | | | 2,027,330 | | | | 24,702 | | 4.85 | % |
| Commercial construction | | | 221,010 | | | | 2,335 | | | 4.19 | % | | | | 230,446 | | | | 2,409 | | 4.15 | % | | | | 182,293 | | | | 1,882 | | 4.11 | % |
| Small business | | | 75,607 | | | | 1,072 | | | 5.63 | % | | | | 75,791 | | | | 1,048 | | 5.49 | % | | | | 78,719 | | | | 1,120 | | 5.66 | % |
| Total commercial | | | 3,299,139 | | | | 35,500 | | | 4.27 | % | | | | 3,212,873 | | | | 34,627 | | 4.28 | % | | | | 2,954,948 | | | | 34,370 | | 4.63 | % |
| Residential real estate | | | 518,742 | | | | 4,973 | | | 3.80 | % | | | | 503,313 | | | | 4,899 | | 3.86 | % | | | | 523,024 | | | | 5,142 | | 3.91 | % |
| Home equity | | | 813,466 | | | | 7,321 | | | 3.57 | % | | | | 798,381 | | | | 7,228 | | 3.59 | % | | | | 797,792 | | | | 7,289 | | 3.63 | % |
| Total consumer real estate | | | 1,332,208 | | | | 12,294 | | | 3.66 | % | | | | 1,301,694 | | | | 12,127 | | 3.70 | % | | | | 1,320,816 | | | | 12,431 | | 3.74 | % |
| Other consumer | | | 20,177 | | | | 479 | | | 9.42 | % | | | | 21,029 | | | | 488 | | 9.21 | % | | | | 27,490 | | | | 615 | | 8.90 | % |
| Total loans | | | 4,651,524 | | | | 48,273 | | | 4.12 | % | | | | 4,535,596 | | | | 47,242 | | 4.13 | % | | | | 4,303,254 | | | | 47,416 | | 4.38 | % |
| Total interest-earning assets | | $ | 5,418,928 | | | $ | 52,824 | | | 3.87 | % | | | $ | 5,246,929 | | | $ | 51,255 | | 3.88 | % | | | $ | 4,941,443 | | | $ | 51,672 | | 4.16 | % |
| Cash and due from banks | | | 165,667 | | | | | | | | | | 141,922 | | | | | | | | | 70,404 | | | | | |
| Federal Home Loan Bank stock | | | 39,300 | | | | | | | | | | 38,674 | | | | | | | | | 38,201 | | | | | |
| Other assets | | | 393,365 | | | | | | | | | | 384,145 | | | | | | | | | 405,179 | | | | | |
| Total assets | | $ | 6,017,260 | | | | | | | | | $ | 5,811,670 | | | | | | | | $ | 5,455,227 | | | | | |
| Interest-bearing liabilities | | | | | | | | | | | | | | | | | | | | | | | | |
| Deposits | | | | | | | | | | | | | | | | | | | | | | | | |
| Savings and interest checking accounts | | $ | 1,883,026 | | | $ | 915 | | | 0.19 | % | | | $ | 1,760,508 | | | $ | 811 | | 0.18 | % | | | $ | 1,548,798 | | | $ | 729 | | 0.19 | % |
| Money market | | | 917,744 | | | | 582 | | | 0.25 | % | | | | 891,601 | | | | 561 | | 0.25 | % | | | | 842,574 | | | | 586 | | 0.28 | % |
| Time deposits | | | 718,432 | | | | 1,269 | | | 0.70 | % | | | | 699,865 | | | | 1,277 | | 0.72 | % | | | | 697,599 | | | | 1,343 | | 0.77 | % |
| Total interest-bearing deposits | | $ | 3,519,202 | | | $ | 2,766 | | | 0.31 | % | | | $ | 3,351,974 | | | $ | 2,649 | | 0.31 | % | | | $ | 3,088,971 | | | $ | 2,658 | | 0.34 | % |
| Borrowings | | | | | | | | | | | | | | | | | | | | | | | | |
| Federal Home Loan Bank borrowings | | $ | 179,743 | | | $ | 1,258 | | | 2.78 | % | | | $ | 225,749 | | | $ | 1,377 | | 2.42 | % | | | $ | 246,425 | | | $ | 1,360 | | 2.20 | % |
| Customer repurchase agreements and other short-term borrowings | | 160,415 | | | | 72 | | | 0.18 | % | | | | 149,364 | | | | 49 | | 0.13 | % | | | | 183,957 | | | | 95 | | 0.21 | % |
| Wholesale repurchase agreements | | | 50,000 | | | | 292 | | | 2.32 | % | | | | 50,000 | | | | 292 | | 2.32 | % | | | | 50,000 | | | | 292 | | 2.32 | % |
| Junior subordinated debentures | | | 73,933 | | | | 1,019 | | | 5.47 | % | | | | 73,990 | | | | 1,021 | | 5.47 | % | | | | 68,587 | | | | 983 | | 5.70 | % |
| Subordinated debentures | | | 30,000 | | | | 259 | | | 3.43 | % | | | | 30,000 | | | | 443 | | 5.86 | % | | | | 30,000 | | | | 547 | | 7.25 | % |
| Total borrowings | | $ | 494,091 | | | $ | 2,900 | | | 2.33 | % | | | $ | 529,103 | | | $ | 3,182 | | 2.39 | % | | | $ | 578,969 | | | $ | 3,277 | | 2.25 | % |
| Total interest-bearing liabilities | | $ | 4,013,293 | | | $ | 5,666 | | | 0.56 | % | | | $ | 3,881,077 | | | $ | 5,831 | | 0.60 | % | | | $ | 3,667,940 | | | $ | 5,935 | | 0.64 | % |
| Demand deposits | | | 1,353,155 | | | | | | | | | | 1,303,181 | | | | | | | | | 1,178,975 | | | | | |
| Other liabilities | | | 74,660 | | | | | | | | | | 75,134 | | | | | | | | | 92,158 | | | | | |
| Total liabilities | | $ | 5,441,108 | | | | | | | | | $ | 5,259,392 | | | | | | | | $ | 4,939,073 | | | | | |
| Stockholders' equity | | | 576,152 | | | | | | | | | | 552,278 | | | | | | | | | 516,154 | | | | | |
| Total liabilities and stockholders' equity | | $ | 6,017,260 | | | | | | | | | $ | 5,811,670 | | | | | | | | $ | 5,455,227 | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | |
| Net interest income | | | | | $ | 47,158 | | | | | | | | | $ | 45,424 | | | | | | | | $ | 45,737 | | |
| | | | | | | | | | | | | | | | | | | | | | | | |
| Interest rate spread (2) | | | | | | | | 3.31 | % | | | | | | | | 3.28 | % | | | | | | | | 3.53 | % |
| | | | | | | | | | | | | | | | | | | | | | | | |
| Net interest margin (3) | | | | | | | | 3.45 | % | | | | | | | | 3.43 | % | | | | | | | | 3.68 | % |
| | | | | | | | | | | | | | | | | | | | | | | | |
| Supplemental Information | | | | | | | | | | | | | | | | | | | | | | | | |
| Total deposits, including demand deposits | | $ | 4,872,357 | | | $ | 2,766 | | | | | | $ | 4,655,155 | | | $ | 2,649 | | | | | $ | 4,267,946 | | | $ | 2,658 | | |
| Cost of total deposits | | | | | | | | 0.23 | % | | | | | | | | 0.23 | % | | | | | | | | 0.25 | % |
| Total funding liabilities, including demand deposits | | $ | 5,366,448 | | | $ | 5,666 | | | | | | $ | 5,184,258 | | | $ | 5,831 | | | | | $ | 4,846,915 | | | $ | 5,935 | | |
| Cost of total funding liabilities | | | | | | | | 0.42 | % | | | | | | | | 0.45 | % | | | | | | | | 0.49 | % |
| | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | |
| (1) The total amount of adjustment to present interest income and yield on a fully tax-equivalent basis is $253,000, $228,000, and $258,000 for the three months ended December 31, 2013, September 30, 2013, and December 31, 2012, 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. |
| | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | |
| | Twelve Months Ended |
| | December 31, 2013 | | | December 31, 2012 |
| | | | | Interest | | | | | | | | | Interest | | | |
| | Average | | | Earned/ | | | Yield/ | | | Average | | | Earned/ | | | Yield/ |
| | Balance | | | Paid | | | Rate | | | Balance | | | Paid | | | Rate |
| | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | |
| Interest-earning assets | | | | | | | | | | | | | | | | | |
| Interest earning deposits with banks, federal funds sold, and short term investments | | $ | 80,349 | | | $ | 200 | | | 0.25 | % | | | $ | 54,483 | | | $ | 132 | | | 0.24 | % |
| Securities | | | | | | | | | | | | | | | | | |
| Trading Assets | | | - | | | | - | | | 0.00 | % | | | | 1,365 | | | | 37 | | | 2.71 | % |
| Taxable investment securities | | | 566,764 | | | | 15,137 | | | 2.67 | % | | | | 524,466 | | | | 16,643 | | | 3.17 | % |
| Nontaxable investment securities (1) | | | 1,523 | | | | 88 | | | 5.78 | % | | | | 1,746 | | | | 140 | | | 8.02 | % |
| Total securities | | | 568,287 | | | | 15,225 | | | 2.68 | % | | | | 527,577 | | | | 16,820 | | | 3.19 | % |
| Loans held for sale | | | 27,693 | | | | 774 | | | 2.79 | % | | | | 29,928 | | | | 988 | | | 3.30 | % |
| Loans | | | | | | | | | | | | | | | | | |
| Commercial and industrial | | | 736,814 | | | | 29,241 | | | 3.97 | % | | | | 625,789 | | | | 25,309 | | | 4.04 | % |
| Commercial real estate (1) | | | 2,166,073 | | | | 96,165 | | | 4.44 | % | | | | 1,923,602 | | | | 93,582 | | | 4.86 | % |
| Commercial construction | | | 218,894 | | | | 9,066 | | | 4.14 | % | | | | 159,271 | | | | 6,698 | | | 4.21 | % |
| Small business | | | 76,700 | | | | 4,272 | | | 5.57 | % | | | | 79,092 | | | | 4,509 | | | 5.70 | % |
| Total commercial | | | 3,198,481 | | | | 138,744 | | | 4.34 | % | | | | 2,787,754 | | | | 130,098 | | | 4.67 | % |
| Residential real estate | | | 534,696 | | | | 21,179 | | | 3.96 | % | | | | 436,737 | | | | 18,330 | | | 4.20 | % |
| Home equity | | | 800,646 | | | | 28,712 | | | 3.59 | % | | | | 765,228 | | | | 28,124 | | | 3.68 | % |
| Total consumer real estate | | | 1,335,342 | | | | 49,891 | | | 3.74 | % | | | | 1,201,965 | | | | 46,454 | | | 3.86 | % |
| Other consumer | | | 22,528 | | | | 2,047 | | | 9.09 | % | | | | 32,630 | | | | 2,785 | | | 8.54 | % |
| Total loans | | | 4,556,351 | | | | 190,682 | | | 4.18 | % | | | | 4,022,349 | | | | 179,337 | | | 4.46 | % |
| Total interest-earning assets | | $ | 5,232,680 | | | $ | 206,881 | | | 3.95 | % | | | $ | 4,634,337 | | | $ | 197,277 | | | 4.26 | % |
| Cash and due from banks | | | 127,171 | | | | | | | | | | 67,085 | | | | | | |
| Federal Home Loan Bank stock | | | 39,416 | | | | | | | | | | 35,155 | | | | | | |
| Other assets | | | 400,805 | | | | | | | | | | 377,450 | | | | | | |
| Total assets | | $ | 5,800,072 | | | | | | | | | $ | 5,114,027 | | | | | | |
| Interest-bearing liabilities | | | | | | | | | | | | | | | | | |
| Deposits | | | | | | | | | | | | | | | | | |
| Savings and interest checking accounts | | $ | 1,735,211 | | | $ | 3,107 | | | 0.18 | % | | | $ | 1,484,758 | | | $ | 2,820 | | | 0.19 | % |
| Money market | | | 887,936 | | | | 2,271 | | | 0.26 | % | | | | 803,656 | | | | 2,461 | | | 0.31 | % |
| Time deposits | | | 724,644 | | | | 5,246 | | | 0.72 | % | | | | 646,873 | | | | 5,422 | | | 0.84 | % |
| Total interest-bearing deposits | | $ | 3,347,791 | | | $ | 10,624 | | | 0.32 | % | | | $ | 2,935,287 | | | $ | 10,703 | | | 0.36 | % |
| Borrowings | | | | | | | | | | | | | | | | | |
| Federal Home Loan Bank borrowings | | $ | 245,392 | | | $ | 5,446 | | | 2.22 | % | | | $ | 222,709 | | | $ | 5,240 | | | 2.35 | % |
| Customer repurchase agreements and other short-term borrowings | | 150,286 | | | | 276 | | | 0.18 | % | | | | 162,432 | | | | 363 | | | 0.22 | % |
| Wholesale repurchase agreements | | | 50,000 | | | | 1,158 | | | 2.32 | % | | | | 50,000 | | | | 1,162 | | | 2.32 | % |
| Junior subordinated debentures | | | 74,017 | | | | 4,049 | | | 5.47 | % | | | | 63,550 | | | | 3,749 | | | 5.90 | % |
| Subordinated debentures | | | 30,000 | | | | 1,783 | | | 5.94 | % | | | | 30,000 | | | | 2,177 | | | 7.26 | % |
| Total borrowings | | $ | 549,695 | | | $ | 12,712 | | | 2.31 | % | | | $ | 528,691 | | | $ | 12,691 | | | 2.40 | % |
| Total interest-bearing liabilities | | $ | 3,897,486 | | | $ | 23,336 | | | 0.60 | % | | | $ | 3,463,978 | | | $ | 23,394 | | | 0.68 | % |
| Demand deposits | | | 1,271,616 | | | | | | | | | | 1,070,577 | | | | | | |
| Other liabilities | | | 78,392 | | | | | | | | | | 87,104 | | | | | | |
| Total liabilities | | $ | 5,247,494 | | | | | | | | | $ | 4,621,659 | | | | | | |
| Stockholders' equity | | | 552,578 | | | | | | | | | | 492,368 | | | | | | |
| Total liabilities and stockholders' equity | | $ | 5,800,072 | | | | | | | | | $ | 5,114,027 | | | | | | |
| | | | | | | | | | | | | | | | | |
| Net interest income | | | | | $ | 183,545 | | | | | | | | | $ | 173,883 | | | |
| | | | | | | | | | | | | | | | | |
| Interest rate spread (2) | | | | | | | | 3.35 | % | | | | | | | | | 3.58 | % |
| | | | | | | | | | | | | | | | | |
| Net interest margin (3) | | | | | | | | 3.51 | % | | | | | | | | | 3.75 | % |
| | | | | | | | | | | | | | | | | |
| Supplemental Information | | | | | | | | | | | | | | | | | |
| Total deposits, including demand deposits | | $ | 4,619,407 | | | $ | 10,624 | | | | | | $ | 4,005,864 | | | $ | 10,703 | | | |
| Cost of total deposits | | | | | | | | 0.23 | % | | | | | | | | | 0.27 | % |
| Total funding liabilities, including demand deposits | | $ | 5,169,102 | | | $ | 23,336 | | | | | | $ | 4,534,555 | | | $ | 23,395 | | | |
| Cost of total funding liabilities | | | | | | | | 0.45 | % | | | | | | | | | 0.52 | % |
| | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | |
| (1) The total amount of adjustment to present interest income and yield on a fully tax-equivalent basis is $967,000 and $1.1 million for the twelve months ended December 31, 2013 and 2012, 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. |
| | | | | | | | | | | | | | | | | |
| Certain amounts in prior year financial statement have been reclassified to conform to the current year's presentation. |
Organic Loan and Deposit Growth | | | | | | | | | | | | | | |
| | Quarter-to-Date |
| | | | | | | | | | | | | | Organic |
| | December 31, | | | September 30, | | | Balance | | | Organic | | | Growth/(Loss) |
| | 2013 | | | 2013 | | | Acquired | | | Growth/(Loss) | | | % |
| Loans | | | | | | | | | | | | | | |
| Commercial and Industrial | | $ | 784,202 | | | $ | 756,222 | | | $ | 3,682 | | | $ | 24,298 | | | | 3.2 | % |
| Commercial Real Estate | | | 2,249,260 | | | | 2,166,281 | | | | 38,800 | | | | 44,179 | | | | 2.0 | % |
| Commercial Construction | | | 223,859 | | | | 236,466 | | | | 2,782 | | | | (15,389 | ) | | | -6.5 | % |
| Small Business | | | 77,240 | | | | 75,273 | | | | 21 | | | | 1,946 | | | | 2.6 | % |
| Total Commercial | | | 3,334,561 | | | | 3,234,242 | | | | 45,285 | | | | 55,034 | | | | 1.7 | % |
| Residential Real Estate | | | 541,443 | | | | 496,464 | | | | 63,274 | | | | (18,295 | ) | | | -3.7 | % |
| Home Equity | | | 822,141 | | | | 804,670 | | | | 17,316 | | | | 155 | | | | 0.0 | % |
| Total Consumer Real Estate | | | 1,363,584 | | | | 1,301,134 | | | | 80,590 | | | | (18,140 | ) | | | -1.4 | % |
| Total Other Consumer | | | 20,162 | | | | 20,653 | | | | 695 | | | | (1,186 | ) | | | -5.7 | % |
| Total Loans | | $ | 4,718,307 | | | $ | 4,556,029 | | | $ | 126,570 | | | $ | 35,708 | | | | 0.8 | % |
| | | | | | | | | | | | | | |
| Deposits | | | | | | | | | | | | | | |
| Demand Deposits | | $ | 1,369,432 | | | $ | 1,339,134 | | | $ | 40,056 | | | $ | (9,758 | ) | | | -0.7 | % |
| Savings and Interest Checking Accounts | | 1,940,153 | | | | 1,843,795 | | | | 84,295 | | | | 12,063 | | | | 0.7 | % |
| Money Market | | | 933,205 | | | | 882,764 | | | | 24,195 | | | | 26,246 | | | | 3.0 | % |
| Time Certificates of Deposit | | | 743,628 | | | | 691,616 | | | | 70,331 | | | | (18,319 | ) | | | -2.6 | % |
| Total Deposits | | $ | 4,986,418 | | | $ | 4,757,309 | | | $ | 218,877 | | | $ | 10,232 | | | | 0.2 | % |
| | | | | | | | | | | | | | |
| | | | | | | | | | | | | | |
| | Year-to-Date |
| | | | | | | | | | | | | | Organic |
| | December 31, | | | December 31, | | | Balance | | | Organic | | | Growth/(Loss) |
| | 2013 | | | 2012 | | | Acquired | | | Growth/(Loss) | | | % |
| Loans | | | | | | | | | | | | | | |
| Commercial and Industrial | | $ | 784,202 | | | $ | 687,511 | | | $ | 3,682 | | | $ | 93,009 | | | | 13.5 | % |
| Commercial Real Estate | | | 2,249,260 | | | | 2,122,153 | | | | 38,800 | | | | 88,307 | | | | 4.2 | % |
| Commercial Construction | | | 223,859 | | | | 188,768 | | | | 2,782 | | | | 32,309 | | | | 17.1 | % |
| Small Business | | | 77,240 | | | | 78,594 | | | | 21 | | | | (1,375 | ) | | | -1.7 | % |
| Total Commercial | | | 3,334,561 | | | | 3,077,026 | | | | 45,285 | | | | 212,250 | | | | 6.9 | % |
| Residential Real Estate | | | 541,443 | | | | 612,881 | | | | 63,274 | | | | (134,712 | ) | | | -22.0 | % |
| Home Equity | | | 822,141 | | | | 802,149 | | | | 17,316 | | | | 2,676 | | | | 0.3 | % |
| Total Consumer Real Estate | | | 1,363,584 | | | | 1,415,030 | | | | 80,590 | | | | (132,036 | ) | | | -9.3 | % |
| Total Other Consumer | | | 20,162 | | | | 26,955 | | | | 695 | | | | (7,488 | ) | | | -27.8 | % |
| Total Loans | | $ | 4,718,307 | | | $ | 4,519,011 | | | $ | 126,570 | | | $ | 72,726 | | | | 1.6 | % |
| | | | | | | | | | | | | | |
| Deposits | | | | | | | | | | | | | | |
| Demand Deposits | | $ | 1,369,432 | | | $ | 1,248,394 | | | $ | 40,056 | | | $ | 80,982 | | | | 6.5 | % |
| Savings and Interest Checking Accounts | | 1,940,153 | | | | 1,691,187 | | | | 84,295 | | | | 164,671 | | | | 9.7 | % |
| Money Market | | | 933,205 | | | | 853,971 | | | | 24,195 | | | | 55,039 | | | | 6.4 | % |
| Time Certificates of Deposit | | | 743,628 | | | | 753,125 | | | | 70,331 | | | | (79,828 | ) | | | -10.6 | % |
| Total Deposits | | $ | 4,986,418 | | | $ | 4,546,677 | | | $ | 218,877 | | | $ | 220,864 | | | | 4.9 | % |
CONTACT:
Independent Bank Corp.
Chris Oddleifson, 781-982-6660
President and Chief Executive Officer
or
Robert Cozzone, 781-982-6723
Chief Financial Officer and Treasurer
