Independent Bank Corp. Reports 3rd Quarter 2007 Earnings

Business Wire, Oct 11, 2007

ROCKLAND, Mass. -- Independent Bank Corp., (NASDAQ: INDB), parent of Rockland Trust Company, today announced net income of $8.3 million and diluted earnings per share of $0.60 for the quarter ended September 30, 2007. This represents an increase of $0.02, or 3.5%, on a per share basis, from the $0.58 recorded in the same quarter a year ago. Net income for the quarter decreased $244,000 as compared to the same period last year. For the nine months ended September 30, 2007, net income was $20.7 million and diluted earnings per share were $1.45, a decrease of $4.1 million, or $0.18 per diluted share, as compared to net income of $24.7 million and diluted earnings per share of $1.63 for the nine months ended September 30, 2006.

Certain non-core items are included in the computation of earnings in accordance with United States of America 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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Net operating earnings were $22.4 million or $1.57 on a per diluted share basis for the nine months ending September 30, 2007, compared to net operating earnings and diluted earnings per share for the nine months ending September 30, 2006 of $24.6 million and $1.62, respectively, which represents a decrease of $2.2 million or $0.05 per diluted share. There were no non-core items recorded during the current or year ago quarters.

Comparing the three months ended September 30, 2007 to the same period last year, net interest income decreased $1.6 million, or (6.0%), as anticipated due to the strategic repositioning of the balance sheet. For the nine months ended September 30, 2007 net interest income decreased $6.3 million, or (8.0%), 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 $5.3 million from the comparative nine month period in 2006, with the decrease primarily attributable to a smaller average balance sheet.

The net interest margin for the three and nine month periods ended September 30, 2007 was 3.98% and 3.89%, respectively. Excluding the debt issuance costs write-off, the net interest margin was 3.94% for the nine month period ending September 30, 2007 as compared to 3.89% for the nine months ended September 30, 2006. See the tables below for reconciliations of net interest income and the net interest margin as adjusted.

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The Company's allowance for loan losses as a percentage of loans remained the same at 1.32% at both September 30, 2007 and December 31, 2006. The provision for loan losses was $300,000 and $1.8 million for the quarter and nine month period ending September 30, 2007, respectively, compared to $530,000 and $1.6 million for the year ago comparative periods. Net charge-offs were $758,000 and $2.4 million for the three and nine months of 2007, respectively, as compared to $527,000 and $1.5 million for the three and nine months of 2006, respectively.

Non-interest income increased by $671,000, or 9.5%, and by $2.9 million, or 13.8%, during the three and nine months ended September 30, 2007, respectively, as compared to the same periods in the prior year. Excluding the losses on sale of securities and Bank Owned Life Insurance ("BOLI") benefit net proceeds recognized during 2006, non-interest income grew by $2.4 million, or 11.4%, in the nine month period ending September 30, 2007, when compared to 2006. See the table below for a reconciliation of non-interest income as adjusted.

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* Service charges on deposit accounts increased by $85,000, or 2.3%, and by $43,000, or 0.4%, for the three and nine months ended September 30, 2007, as compared to the same periods in 2006.

* Wealth management revenue increased by $438,000, or 30.5%, and by $1.4 million, or 30.5%, for the three and nine months ended September 30, 2007, as compared to the same period in 2006. Investment management revenue increased by $351,000, or 26.3%, and $892,000, or 21.7%, for the three and nine months ended September 30, 2007. Assets under administration at September 30, 2007 were $1.1 billion, an increase of $361.7 million, or 48.6%, as compared to September 30, 2006. Retail wealth management revenue improved by $86,000, or 87.2%, and $480,000, or 127.2%, for the three and nine months ended September 30, 2007, due to a change in the model of origination and an increase in sales.