Merger costs shrink Independent 1Q earnings

ROCKLAND, Mass. – Independent Bank Corp. (Nasdaq: INDB), the parent of Rockland Trust Co., today reported first-quarter net income of $6.31 million, a decline of $318,000, or 4.8 percent, from the year-ago period’s $6.63 million.

Revenue increased to $49.32 million, an increase of 2.9 percent from the 2007 first quarter’s $47.92 million, Independent said. But earnings per diluted share declined 1 cent from the year-ago 45 cents.

The company cited an increase in its loan-loss provision and costs from its acquisition of Somerset-based Slade’s Ferry Bancorp, parent of the former Slades Ferry Bank. That $105 million cash and shares deal, which closed March 1, intended to qualify as a tax-free reorganization. (READ MORE)

Independent posted $744,000 in merger and acquisition expenses in the first quarter. It also posted a $1 million increase in salaries and employee benefits, which Independent attributed in part to its first-quarter acqusition of Slade’s Ferry and fourth-quarter acquisition of O’Connell Investment Services of Lincoln. (READ MORE)

The company boosted its set-aside for loan losses to $1.3 million for the first quarter from $891,000 from the year-ago period. Most of that increase was due to the Slade’s Ferry purchase, Independent said. Nonperforming assets totaled $11.92 million at March 31, or 0.36 percent of total assets, compared with the company’s Dec. 31 total of $8.33 million, or 0.30 percent of total assets.

But the acquisition of Slade’s Ferry also helped boost Independent’s total assets at the end of the quarter to $3.33 billion, an increase of $561.82 million increase, or 20.29 percent, over the year-ago total.

Total interest income increased to $41.08 million in the first quarter, up 2.38 percent from the same quarter a year before. Total non-interest income increased to $8.24 million, up 5.72 percent from the first quarter 2007.

The bank’s net interest margin improved to 3.9 percent in the first quarter from 3.84 percent in the year-ago period. The bank’s returns on average equity and average assets for the first quarter were 10.01 percent and 0.87 percent, respectively, compared with 11.73 percent and 0.96 percent, respectively, for the same period in 2007.

A first-quarter dividend of 18 cents per share – a 6-percent increase from the fourth-quarter payment of 17 cents per share – was declared in March by the company’s board of directors. It was payable April 11 to shareholders of record at the close of business on March 31.

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. Additional information is available at www.RocklandTrust.com.