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By Michael Souza
PBN Staff Writer
NEW YORK – Fitch Ratings has affirmed the long-and short-term issuer default rating of Independent Bank Corp. at “BBB/F2”. The bank’s rating outlook has been classified as “stable/” The bank is the sole holding company and the sole shareholder of Rockland Trust Co.
The affirmation of its rating as well as its stable outlook reflect the company's solid core operating performance, respectable asset quality, healthy net interest margin and stable funding base. The ratings, according to Fitch, are constrained by the bank’s growing home equity portfolio, capital and concentration in its commercial real estate portfolio.
Independent’s credit quality was judged to be sound given its low nonperforming assets ratio of 1.80 percent at the end of the first quarter ending March 31. The NPA ratio was 0.82 percent excluding performing TDRs. Fitch further noted an annualized net charge-off ratio of 0.16 percent at the same time, which continues to remain at low levels. The company has not released any reserves over the last several quarters, as provision expense continued to exceed Net Capital Outflows, which Fitch considers prudent.
The home equity portfolio, which Fitch views as a higher risk asset class, has continued to grow. Home equity loans represent approximately 19 percent of total loans, compared with 16 percent at Dec. 31, 2010.
Headquartered in Rockland, Mass., the bank focuses primarily on small business professionals and retail customers throughout offices located across southeastern Massachusetts, Cape Cod, and Rhode Island.