The report was revised July 25, to reflect the current value of two investments, the bank said. The revisions trimmed 8 cents per share from second-quarter earnings. (READ MORE)
ROCKLAND, Mass. – Independent Bank Corp. (Nasdaq: INDB), the parent of Rockland Trust Co., last night reported a second-quarter profit of $8.12 million, an increase of 42.1 percent from the year-ago $5.71 million, boosted by recent acquisitions. Earnings per diluted share rose to 50 cents from the first quarter’s 44 cents (READ MORE) and the 2007 second quarter’s 40 cents per share.
Independent cited its March 1 acquisition of Somerset-based Slade’s Ferry Bancorp, parent of the former Slades Ferry Bank – a $105 million cash and shares deal that was intended to qualify as a tax-free reorganization (READ MORE) – and its Nov. 1 purchase of substantially all assets of Lincoln-based O’Connell Investment Services Inc. (READ MORE) among the reasons that salary and benefit costs rose $1.9 million, or 14.9 percent, compared with the 2007 second quarter.
Results for the quarter just ended included $244,000 in merger and acquisition expenses, down from $744,000 in the first quarter and none in the year-ago period. The year-ago results included a one-time expense of $855,000 to establish a litigation reserve.
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Total revenue increased 25.8 percent year-over year, to $39.60 million in the three months ended June 30, Independent said.
Non-interest income rose 18.3 percent to $9.5 million.
Wealth management revenue rose 42.8 percent; its $934,000 increase compared with a year ago was fueled by the O’Connell acquisition, which Independent said added about $200 million to the bank’s assets under management.
Second-quarter mortgage banking income rose 17.1 percent, or $140,000, even as the balance of mortgage servicing assets fell 13 percent year-over-year to $2.0 million on June 30 and loans serviced fell 4.1 percent to $259.3 million.
Service charges on deposit accounts rose 12.2 percent, or $432,000, mostly due to the Slades acquisition, Independent said.
Other non-interest income fell 22.5 percent, or $234,000, compared with the 2007 second quarter, as 1031 exchanges declined “due to the slowdown in national commercial real estate markets, and trading asset losses,” the bank said.
Interest income rose 28.4 percent to $30.87 million, as the company’s interest margin widened to 4.01 percent from the first quarter’s 3.9 percent and the year-ago period’s 3.85 percent.
Independent’s return on average equity increased to 10.70 percent in the second quarter from the first-quarter’s 10.01 percent and the year-ago period’s 10.44 percent. Return on average assets rose to 0.97 percent from the preceding period’s 0.87 percent and the 2007 second quarter’s 0.85 percent.
Deposits rose 22.1 percent over the first six months of the year to $2.47 billion. Excluding the $410.77 million impact of the Slade’s acquisition, deposits increased by $36.78 million, for an annualized growth rate of 3.6 percent.
Total loans amounted to $2.58 billion on June 30, an increase of $532.31 million, or 26.1 percent, compared with year’s end. The Slade’s acquisition accounted for $471.24 million or 88.5 percent of the overall loan growth. Excluding that acquisition, “organic loan growth achieved in the first six months of 2008 amounted to $61.1 million, or 6.0 percent on an annualized basis, and was concentrated in the commercial and home-equity lending categories,” Independent said. Those gains offset slight declines in residential real estate and consumer auto loans. Business banking and commercial loans now represent 61.4 percent of the bank’s portfolio, Independent added.
Nonperforming assets as of June 30 amounted to $12.1 million, or 0.36 percent of total assets, up from the $11.9 million, also 0.36 percent of assets, reported as of March 31 and $8.3 million, or 0.30 percent, as of year’s end.
The company’s provision against loan losses was 1.29 percent of total loans as of June 30, the same as on March 31 and down from 1.35 percent on June 30, 2007. The dollar amount of that set-aside rose to $1.9 million from the year-ago $584,000, due to the higher loan total after the Slades Ferry merger.
Highlights of the quarter included the sale and leaseback of 17 branch properties and office buildings. “The company sold and concurrently leased back $27.5 million in land and buildings with associated accumulated depreciation of $9.3 million,” Independent said. “Net proceeds were $32.2 million, resulting in a gain of $13.2 million, net of transaction costs of $753,000. The gain will be deferred and amortized ratably over the lease terms of the individual buildings, which are either 10 or 15 years.”
A second-quarter dividend of 18 cents per share – unchanged from the first quarter – was declared last month by the company’s board of directors. (READ MORE) It was payable to shareholders of record at the close of business on June 30.
A conference call this morning with Independent President and CEO Christopher Oddleifson and Chief Financial Officer Denis K. Sheahan can be heard by calling 1-877-344-7529, pass code 420819, until Junly 25; and will be available for replay at the company’s Web site until this time next year.
Independent Bank Corp. (Nasdaq: INDB) is the parent of Rockland Trust Co., a full-service community bank with assets of $3.33 billion that serves southeastern Massachusetts, Cape Cod and Rhode Island. Rockland Trust has 63 retail branches, nine commercial lending centers and five mortgage-origination offices; plus four investment-management offices, one of which is in Rhode Island. Additional information is available at www.RocklandTrust.com.
