Slade’s Ferry annual profit shrinks 21.8% to $2.8M

SOMERSET – Slade’s Ferry Bancorp (Nasdaq: SFBC), the parent of Slades Bank, today posted a 21.8-percent decline in profit, to $2.8 million in the year ended Dec. 31 from $3.6 million in 2006. Diluted earnings per share shrank to 70 cents in 2007 from the previous year’s 87 cents.
The company cited both a decrease in net interest income and an increase in fourth-quarter operating expenses due to its pending merger with Rockland, Mass.-based Independent Bank Corp. (Nasdaq: INDB), the parent of the Rockland Trust Co. community bank. “Given the challenging interest rate environment, management’s strategy has been to utilize alternative funding sources – including increased Federal Home Loan Bank borrowings – to fund loan growth,” the company said in its report.
“Due to the growth and change in the composition of the loan portfolio, as well as a slight deterioration of credit quality, management deemed it prudent to provide $361,000 for loan losses for the year ended Dec, 31, 2007 as compared to a $39,000 provision for the year ended Dec. 31, 2006.”
Net loans on Dec. 31 amounted to $457.81 million, an increase of 8.4 percent from the end of 2006.
Total interest and dividend income increased 6.6 percent last year, “primarily as a result of commercial loan growth,” but net interest and dividend income shrank 2.9 percent to $17.5 million as interest expenses increased 17.7 percent to $18.1 million and the set-aside against loan losses was increased more than nine-fold.
Noninterest income increased 23.2 percent to $3.4 million, as the company realized $516,000 in net gains on securities sales in 2007 versus net losses of $116,000 in 2006. Meanwhile, non-interest expenses increased 7.0 percent to $15.94 million, including $563,000 in merger-related expenses.
For the quarter ended Dec. 31, net interest and dividend income increased 2.5 percent to $4.5 million. The provision for loan losses was $191,000, compared with no set-aside in the 2006 fourth quarter.
Non-interest income shrank 3.0 percent year-over-year to $767,000. That increase was more than offset by a 23.5-percent increase in non-interest expenses, to $4.27 million, including $563,000 in merger-related expenses.
The Slade’s Ferry-Independent Bank transaction is expected to close on or about March 1, pending regulatory approvals. Under the Agreement and Plan of Merger announced Oct. 11 – and approved by Slade’s Ferry shareholders on Jan. 17 – the company will acquire Slade’s Ferry for about $105 million in cash and shares, and their two banks will merge into a single entity known as Rockland Trust Co. (READ MORE)
A regular quarterly dividend of 9 cents per share of Slade’s Ferry common stock was paid Jan. 18 to shareholders of record on Jan. 2.
Slade’s Ferry Bancorp (Nasdaq: SFBC), based in Somerset, is the parent of Slades Bank, a $609 million community bank serving southeastern Massachusetts via nine retail branches in seven communities. To learn more, visit www.sladesbank.com.