Rockland Trust parent Independent Bank Corp. saw a decline in second-quarter profit driven by costs associated with an acquisition and a borrower unexpectedly being placed in receivership.
By Michael Souza PBN Staff Writer
ROCKLAND - Independent Bank Corp., parent of Rockland Trust Co., posted net income of $8.9 million, or 41 cents per diluted share, for the second quarter, a decline of 20.2 percent when compared with the year-earlier period.
The profit drop came as total revenue for the bank holding company grew 0.7 percent to $63.4 million in the quarter, driven by a $1.5 million increase in non-interest income.
The quarter included a pre-tax expense of $672,000 associated with the acquisition of Central Bancorp Inc., which the bank calculated reduced per-share earnings by 2 cents. The quarter also had a $4 million charge-off that reduced earnings by about 11 cents per share, when a commercial borrower was unexpectedly placed into state court receivership in late June. The charge-off was taken upon receipt of information indicating material misstatements and potential borrower fraud, as well as evidence of invalid and/or altered borrower records.
As a result, the provision for loan losses was $8.5 million for the second quarter compared with $1.6 million for the previous quarter.
Nonperforming loans for the quarter decreased to $31.3 million, or 0.79 percent of total loans, from $31.6 million in the first quarter. Nonperforming assets totaled $43.9 million at the end of the second quarter compared with $40.7 million in the previous-year’s quarter.
Total loans increased to $4.0 billion at June 30, 2012, growth of 11.5 percent, on an annualized basis, from the prior quarter. The securities portfolio of $526.8 million decreased by $36.2 million during the quarter, primarily as a result of paydowns, and represents 10.3 percent of total assets.