Rockland Trust parent revises its 2Q report

ROCKLAND, Mass. – Independent Bank Corp. (Nasdaq: INDB), the parent of Rockland Trust Co., today revised its second-quarter report to reflect the current value of two investments.
“The company has recognized a non-cash, pre-tax charge of approximately $1.9 million, as of June 30, for the other-than-temporary impairment of two investment securities,” Independent said in its announcement. Both investments are in “trust-preferred pooled securities – issued by banks and insurers – which were rated investment grade (BBB) at inception, currently remain rated investment grade (BBB) and are classified as available for sale,” the company said.
One of the securities was issued by a pool of 93 issuers, and the other by a pool of 73 issuers, with no individual issuer responsible for more than 5 percent of either pool, the company said, adding: “There have been no defaults in either security.”
Independent emphasized that it “has not incurred any loss on either security,” adding that “the company has the ability and intention to continue to hold them until a recovery of fair value, which may be until maturity.” No actual loss, therefore, is ever expected to be realized.
The company was advised this Tuesday that the EITF 99-20 guidance might require that impairment charges on the two investments. The advice, from accounting firm KPMG LLP, came five days after Independent released its unaudited quarterly report.
The new charges – totaling $1.85 million – represented less than 0.38 percent from the total value of the bank’s investments on June 30, which was revised to $488.58 million. Total assets on June 30 were essentially unchanged at $3.39 billion.
The changes in earnings were more pronounced: Independent pared its second-quarter profit to $6.84 million – an increase of 19.72 percent compared with the 2007 second quarter – from the July 17 estimate of $8.1 million. (READ MORE) Earnings per diluted share for the quarter just ended were trimmed to 42 cents from the previous estimate of 50 cents.
The company also revised its 2008 full-year forecast, to a range of $2.06 and $2.10 per share from last week’s forecast of $2.14 to $2.18 per share. But, it said, “Management does not believe that the recognition of this non-cash impairment charge has any other implications for the company’s business fundamentals or its outlook.”
Independent Bank Corp. (Nasdaq: INDB) is the parent of Rockland Trust Co., a full-service community bank with assets of $3.39 billion that serves southeastern Massachusetts, Cape Cod and Rhode Island. Additional information is available at www.RocklandTrust.com.