More Topics:
Independent Bank Corp. Reports Q2 Net Income of $11.1M
Posted July 15, 2011
We Recommend...
Strong Loan and Deposit Growth Drives Performance
ROCKLAND, Mass.--(BUSINESS WIRE)--Independent Bank Corp., (NASDAQ: INDB), parent of Rockland Trust Company, today announced net income of $11.1 million for the second quarter of 2011, or $0.52 on a diluted earnings per share basis. The results of the second quarter 2011 represent an increase of $0.14 or 36.8% on a diluted per share basis as compared to the second quarter of 2010 and were consistent with linked quarter results.
Christopher Oddleifson, the President and Chief Executive Officer of Independent Bank Corp. and Rockland Trust Company, stated: "Our track record of delivering consistent, solid results continued in the second quarter, led by robust loan and deposit growth as well as ongoing momentum in our investment management business. Rockland Trust derives its success from acquiring new customers while deepening our existing customer relationships. We're also pleased that Fitch noted our consistent financial performance amidst a difficult operating environment and recently upgraded its rating of Independent Bank Corp. and Rockland Trust to ‘BBB' from ‘BBB'-."
BALANCE SHEET
Total assets of $4.8 billion at June 30, 2011 are up $197.2 million from the prior quarter.
Total loans grew to $3.7 billion at June 30, 2011, an increase of $96.9 million, or 2.7%, compared with the prior quarter, or 10.7% on an annualized basis. The Company continued to drive robust growth in its commercial and industrial loan portfolio, which increased by $59.2 million, or 11.6%, in the second quarter, as the Company continued to grow its base of high-quality customers. Commercial real estate loan generation remained strong, as the portfolio increased by $30.7 million, or 1.7%. The home equity portfolio also sustained its steady growth, rising $13.0 million, or 2.1%. Residential real estate loans declined by $7.5 million, or 1.6%, as loans refinanced into longer-term, fixed-rate loans, which are not commonly held in portfolio by the Company.
Deposit volumes were especially strong in the second quarter as total deposits increased by $201.6 million, or 5.6%, during the three months ended June 30, 2011. Core deposits increased by $205.4 million, or 7.1%, driven by inflows in municipal deposits as well as increases in demand deposits due to both increased marketing efforts of the Company and seasonality within the deposit customer base. Time deposits continued to decline but at a more modest pace, decreasing by $3.8 million, or 0.6%, in the second quarter. Core deposits to total deposits rose to 82.3% and the total cost of deposits remained stable at 0.39% for the current quarter.
Securities decreased by $41.6 million compared to the linked quarter to $547.5 million due to paydowns on securities and the sale of $13.9 million of mortgage backed securities.
Stockholders' equity at June 30, 2011 increased by 1.7% to $455.7 million as compared to the balance at March 31, 2011. The Tier 1 leverage capital ratio at June 30, 2011 remained consistent with prior quarter at 8.5%, maintaining the Company's well-capitalized position.
NET INTEREST INCOME
Net interest income of $42.1 million was up from the prior quarter due to higher levels of earning assets. The net interest margin in the second quarter of 2011 declined to 3.97%, compared to 4.02% due primarily to lower loan yields.
NON-INTEREST INCOME
The Company recorded non-interest income of $13.5 million during the second quarter of 2011 which represents an $876,000, or 7.0%, increase from the prior quarter. The change in non-interest income is composed of the following:
• Service charges on deposit accounts increased $233,000, or 5.9%.
• Interchange and ATM fees increased by $272,000, or 16.0%, due primarily to increased debit card usage by customers.
• Investment management revenue increased by $387,000, or 12.0%. Assets under management in the investment management division rose to $1.7 billion at June 30, 2011, an increase of $ 26.1 million compared to March 31, 2011.
• Non-interest income benefited from the sale of securities in the second quarter, resulting in a gain of $723,000. There were no gains on sale of securities during the first quarter of the year.
• Mortgage banking income decreased by $364,000, or 34.8%, reflective of reduced volumes being experienced in the industry.
• Other non-interest income decreased by $433,000, or 21.6%, mainly due to fee revenue in the prior period associated with loan level interest rate derivatives.
NON-INTEREST EXPENSE
The Company recorded non-interest expense of $36.9 million in the second quarter of 2011, an increase of $374,000, or 1.0%, when compared to the quarter ended March 31, 2011. Significant changes of non-interest expense included the following:
• Salary and employee benefits decreased $490,000, or 2.4% primarily due to decreases in payroll taxes in the second quarter offset by merit increases in the second quarter.
• Occupancy and equipment decreased $312,000, or 6.8% primarily due to high costs of snow removal incurred during the first quarter.
• Data processing and facilities management decreased by $600,000, or 36.6% due to conversion costs associated with a change in the service provider incurred during the first quarter.
• FDIC assessment decreased $513,000, or 39.7% due to a lower assessment rate that was effective during the second quarter.
• Other non-interest expense increased by $2.3 million, or 26.2%, which is primarily attributable to higher credit-related loan workout expenses, which are inclusive of write-downs on OREO properties, of $832,000, increased marketing efforts, which resulted in an increase of $803,000, and increased exams and audit fees of $286,000.
The Company generated a return on average assets and a return on average common equity in the second quarter of 2011 of 0.95% and 9.78%, respectively, as compared to 0.98% and 10.24% for the quarter ended March 31, 2011.
ASSET QUALITY
The Company continued to maintain a solid credit profile during the quarter. Net charge-offs increased to $3.3 million, or 0.36% on an annualized basis of average loans, for the second quarter of 2011 compared to $2.0 million, or 0.23% for the quarter ended March 31, 2011. The provision for loan losses was $3.5 million and $2.2 million for the quarters ended June 30, 2011 and March 31, 2011, respectively. Nonperforming loans decreased to $21.9 million, or 0.59% of total loans at June 30, 2011, from $23.4 million, or 0.64% of total loans at March 31, 2011. Delinquency as a percent of loans declined to 0.83% at June 30, 2011 compared to 1.19% at March 31, 2011.
The allowance for loan losses was $46.6 million at June 30, 2011, compared with the prior quarter level of $46.4 million. The Company's allowance for loan losses was 1.25%, as a percentage of total loans at June 30, 2011, compared to 1.28%, at March 31, 2011.
Christopher Oddleifson and Denis K. Sheahan, Chief Financial Officer, of Independent Bank Corp. and Rockland Trust Company, will host a conference call to discuss second quarter earnings at 10:00 a.m. Eastern Time on Friday, July 15, 2011. Internet access to the call is available on the Company's website at www.RocklandTrust.com or by telephonic access by dial-in at 1-877-317-6789 reference: INDB. A replay of the call will be available by calling 1-877-344-7529, Replay Pass code: 10001834. The web cast replay will be available until July 15, 2012.
Independent Bank Corp., which has Rockland Trust Company as a wholly-owned bank subsidiary, has $4.8 billion in assets. Rockland Trust offers a wide range of commercial banking products and services, retail banking products and services, business and consumer loans, insurance products and services, and investment management services. To find out why Rockland Trust is the bank Where Each Relationship Matters®, visit www.RocklandTrust.com.
To find out more about the company in this article and to see if you
have business connections, click below:
blog comments powered by