e8vk

0000950135-06-006345.txt : 20061019 0000950135-06-006345.hdr.sgml : 20061019 20061019165002 ACCESSION NUMBER: 0000950135-06-006345 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 3 CONFORMED PERIOD OF REPORT: 20061019 ITEM INFORMATION: Results of Operations and Financial Condition ITEM INFORMATION: Regulation FD Disclosure ITEM INFORMATION: Financial Statements and Exhibits FILED AS OF DATE: 20061019 DATE AS OF CHANGE: 20061019 FILER: COMPANY DATA: COMPANY CONFORMED NAME: INDEPENDENT BANK CORP CENTRAL INDEX KEY: 0000776901 STANDARD INDUSTRIAL CLASSIFICATION: STATE COMMERCIAL BANKS [6022] IRS NUMBER: 042870273 STATE OF INCORPORATION: MI FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 8-K SEC ACT: 1934 Act SEC FILE NUMBER: 001-09047 FILM NUMBER: 061153722 BUSINESS ADDRESS: STREET 1: 288 UNION STREET CITY: ROCKLAND STATE: MA ZIP: 02370 BUSINESS PHONE: 7818786100 MAIL ADDRESS: STREET 1: 288 UNION STREET CITY: ROCKLAND STATE: MA ZIP: 02370 8-K 1 b62757ibe8vk.htm INDEPENDENT BANK CORP. e8vk

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 8-K

Current Report Pursuant to Section 13 or 15 (d) of
The Securities and Exchange Act of 1934

DATE OF REPORT:
October 19, 2006
(Date of Earliest Event Reported)

MASSACHUSETTS

(State or Other Jurisdiction of Incorporation)


1-9047 (Commission File Number)		04-2870273 (I.R.S. Employer Identification No.)


INDEPENDENT BANK CORP 288 UNION ST., ROCKLAND, MA.
(Address of Principal Executive Offices)

02370
(Zip Code)

NOT APPLICABLE
(Former Address of Principal Executive Offices)

(Zip Code)

781-878-6100
(Registrant’s Telephone Number, Including Area Code)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):

	o		Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

	o		Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

	o		Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

	o		Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

TABLE OF CONTENTS


ITEM 2.02 RESULTS OF OPERATIONS AND FINANCIAL CONDITION
ITEM 7.01 REGULATION FD DISCLOSURE
ITEM 9.01 FINANCIAL STATEMENTS AND EXHIBITS
SIGNATURE
Ex-99.1 Press Release dated October 19, 2006

ITEM 2.02 RESULTS OF OPERATIONS AND FINANCIAL CONDITION

On October 19, 2006 Independent Bank Corp. announced by press release its earnings for the quarter ended September 30, 2006. A copy of the press release is attached hereto as Exhibit 99.1.

ITEM 7.01 REGULATION FD DISCLOSURE

On October 19, 2006 Independent Bank Corp. announced by press release its earnings for the quarter ended September 30, 2006. A copy of the press release is attached hereto as Exhibit 99.1.

ITEM 9.01 FINANCIAL STATEMENTS AND EXHIBITS

	(a)		Not applicable.

	(b)		Not applicable.

	(c)		The following exhibits are included with this Report:

Exhibit 99.1 Press Release dated October 19, 2006.

SIGNATURE

Pursuant to the requirements of the Securities and Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned and hereunto duly authorized.

INDEPENDENT BANK CORP.



DATE: October 19, 2006	/s/ Denis K. Sheahan
	DENIS K. SHEAHAN
	CHIEF FINANCIAL OFFICER

EX-99.1 2 b62757ibexv99w1.htm EX-99.1 PRESS RELEASE DATED OCTOBER 19, 2006 exv99w1

Exhibit 99.1


Shareholder Relations		NEWS RELEASE
288 Union Street, Rockland, MA 02370		Contact:

Chris Oddleifson
President and
Chief Executive Officer
(781) 982-6660

Denis K. Sheahan
Chief Financial Officer
(781) 982-6341

INDEPENDENT BANK CORP. REPORTS THIRD QUARTER 2006 EARNINGS

Rockland, Massachusetts (October 19, 2006). Independent Bank Corp., (NASDAQ: INDB), parent of Rockland Trust Company, today announced that earnings on a diluted earnings per share basis increased $0.02, or 3.6%, to $0.58 for the quarter ended September 30, 2006 as compared to the $0.56 reported in the same period last year. Net income for the quarter was $8.6 million, a decrease of (1.5%) from the $8.7 million reported for the quarter ended September 30, 2005. For the nine months ended September 30, 2006, diluted earnings per share increased $0.04, or 2.5%, to $1.63 and net income of $24.7 million increased by $107,000 as compared to the nine months ended September 30, 2005.

Certain non-core items, such as the after-tax impact of gains and losses on the sale of securities and the receipt of Bank Owned Life Insurance (“BOLI”) proceeds, are included in the computation of earnings in accordance with generally accepted accounting principles (“GAAP”) in both 2006 and 2005 as indicated by the following table:


	Three Months Ended				Nine Months Ended
	September 30,				September 30,
Dollars in Thousands, Except Per Share Data	2006		2005		2006			2005
RECONCILIATION TABLE — NON-GAAP FINANCIAL INFORMATION
NET INCOME (GAAP)	$	8,556	$	8,687	$	24,749		$	24,642
Add — Net Loss on Sale of Securities, net of tax		—		—		1,150			—
Less — Net Gain on Sale of Securities, net of tax		—		—		—			(400	)
Less — BOLI Benefit Proceeds		—		—		(1,316	)		—

NET OPERATING EARNINGS (NON-GAAP)	$	8,556	$	8,687	$	24,583		$	24,242

Diluted Operating Earnings Per Share	$	0.58	$	0.56	$	1.62		$	1.56

Net operating earnings on a per diluted share basis, for the quarter and nine months ending September 30, 2006 were $0.58 and $1.62, respectively, an increase of $0.02, or 3.6%, and $0.06, or 3.9%, from the comparable periods last year. Net operating earnings for the quarter and nine months ended September 30, 2006 were $8.6 million and $24.6 million, respectively, a decrease of (1.5%) and an increase of 1.4%, from the same periods in 2005.

Comparing the three months ending September 30, 2006 to the same period last year, net interest income decreased $890,000 or (3.3%) attributable to a higher cost of deposits and a smaller balance sheet, while net interest income for the nine months ended September 30, 2006 decreased $988,000, or (1.3%) from the nine months ended September 30, 2005. The net interest margin for both the three and nine months ended September 30, 2006 was 3.89% as compared to 3.93% and 3.87% for the three and nine months ended September 30, 2005, respectively.

The net interest margin in the third quarter of 2006 was positively impacted by the recognition of the Federal Home Loan Bank of Boston’s (“FHLBB”) dividend received during the third quarter which was paid out on a six month basis to adjust for lack of a dividend in the second quarter. This additional dividend positively impacted net interest income and pre-tax earnings by $342,000.

The Company’s allowance for loan losses as a percentage of loans was maintained at 1.31%, remaining unchanged from December 31, 2005. The provision for loan losses decreased by $540,000, or (50.5%), for the quarter ended September 30, 2006 as compared to the same period in 2005. Provision for loan losses for the nine months ending September 30, 2006 was $1.6 million, a decrease of $1.5 million compared to the same period in 2005, and covered net charge-offs by 1.1 times.

Non-interest income decreased by $88,000, or (1.2%), and increased by $195,000, or 1.0%, during the three and nine months ended September 30, 2006, respectively, as compared to the same periods in the prior year. Excluding losses and gains on the sale of securities and BOLI benefit proceeds, non-interest income grew by $1.3 million, or 6.4%, for the nine months ended September 30, 2006, as compared to the same period in the prior year. See table below for reconciliation of non-interest income as adjusted.


	Three Months Ended				Nine Months Ended
	September 30,				September 30,
Dollars in Thousands	2006		2005		2006			2005
Non-Interest Income GAAP	$	7,049	$	7,137	$	20,691		$	20,496
Add — Net Loss on Sale of Securities		—		—		1,769			—
Less — Net Gain on Sale of Securities		—		—		—			(616	)
Less — BOLI Benefit Proceeds		—		—		(1,316	)		—

Non-Interest Income as Adjusted	$	7,049	$	7,137	$	21,144		$	19,880

	Ø		Service charges on deposit accounts increased by $207,000, or 6.0%, and by $1.0 million, or 10.8%, for the three and nine months ended September 30, 2006, as compared to the same periods in 2005, primarily reflecting increased overdraft fees and debit card interchange revenue.

	Ø		Investment management revenue increased by $90,000, or 6.7%, and $498,000, or 12.5%, for the three and nine months ended September 30, 2006, as compared to the same periods in 2005 due to growth in managed assets. Assets under administration at September 30, 2006 were $744.2 million, an increase of $92.3 million, or 14.2%, as compared to September 30, 2005.

	Ø		Mortgage banking income decreased by $542,000, or (50.8%), and by $586,000, or (22.7%), for the three and nine months ended September 30, 2006, as compared to the same periods in 2005. The decrease in the three and nine month periods ending September 30, 2006 is primarily attributable to a lower volume of mortgage sales in 2006 as compared to 2005. The balance of the mortgage servicing asset is $2.6 million and loans serviced amounted to $303.9 million as of September 30, 2006.

	Ø		There were no gains or losses on the sale of securities in the third quarter of 2006 and 2005. Net losses of $1.8 million were recorded in the nine months ended September 30, 2006 on the sale of securities and a gain of $616,000 was recorded in the nine months ended September 30, 2005.

	Ø		Other non-interest income increased by $140,000, or 17.6%, and by $258,000, or 11.1%, for the three and nine months ended September 30, 2006, as compared to the same periods in 2005. The quarter to date increase is primarily due to a gain on the sale of other real estate owned and unrealized gains on trading assets. The year to date increase is primarily a result of improved checkbook revenue and commercial loan late charge fees.

Non-interest expense decreased by $269,000, or (1.3%), and increased by $659,000, or 1.1%, for the three and nine months ended September 30, 2006, as compared to the same periods in 2005.

Salaries and employee benefits increased by $284,000, or 2.4%, and by $266,000, or 0.7%, for the three and nine months ended September 30, 2006, as compared to the same periods in 2005. The increases are largely attributable to the increased cost of retirement and medical benefits.

	Ø		Occupancy and equipment related expense increased by $105,000, or 4.6%, and by $153,000, or 2.1%, for the quarter and year to date ending September 30, 2006, as compared to the same periods in 2005.

	Ø		Data processing and facilities management expense has increased $96,000, or 9.0%, and by $239,000, or 7.9%, for the three and nine months ended September 30, 2006, compared to the same periods in 2005, largely as a result of contractual increases.

	Ø		Other non-interest expense decreased by $754,000, or (14.8%), for the three months ended September 30, 2006, and was essentially flat for the nine months ended September 30, 2006, as compared to the same periods in the prior year. The decrease from the comparative three month period is primarily attributable to decreases in advertising and debit card and ATM processing expense.

Total assets decreased by $107.4 million, or (3.5%), from December 31, 2005 to $2.9 billion at September 30, 2006. This decrease is due to intentional decreases in the Company’s security portfolio and certain loan categories due to a combination of the flat yield curve environment and the profitability characteristics of these asset classes.

	Ø		Fed funds sold and short-term investments decreased by $15.2 million, or (23.8%), during the nine months ending September 30, 2006.

	Ø		Securities decreased by $99.7 million, or (13.9%), during the nine months ending September 30, 2006. This decrease resulted mainly from the sale of $31.4 million of lower coupon securities in the first quarter of 2006 and the decision not to reinvest normal year to date runoff on the portfolio in the current rate environment. The ratio of securities to total assets as of September 30, 2006 was 21.0%, as compared to 23.6% at December 31, 2005 and 24.8% at September 30, 2005.

	Ø		Total loans increased by $10.5 million, or 0.5%, during the nine months ended September 30, 2006. Total commercial loans increased by $50.1 million, or 5.1%, with commercial real estate comprising most of the increase with an increase of $47.0 million, or 6.9%. Consumer loans decreased $20.7 million, or (3.6%), with the auto loan portfolio decreasing by $45.6 million, or (17.3%), partially offset by a $27.0 million, or 10.7%, increase in home equity lending. Business banking loans totaled $57.5 million, an increase of $6.1 million, or 12.0%, and residential loans decreased $25.0 million, or (5.7%), during the first nine months of 2006.

Total deposits of $2.2 billion at September 30, 2006 decreased $24.9 million, or (1.1%), compared to December 31, 2005. For the quarter ending September 30, 2006, deposits increased $3.2 million, or 0.2%.

Borrowings decreased by $78.0 million, or (13.3%), during the nine months ending September 30, 2006 as excess cash flow from the securities portfolio and certain loan categories were used to decrease wholesale borrowing.

Stockholders’ equity at September 30, 2006 totaled $222.3 million, as compared to $228.2 million at December 31, 2005. The Tier 1 leverage capital ratio at September 30, 2006 was 7.78%, maintaining the Company’s well-capitalized position.

As previously announced on January 19, 2006, the Company’s Board of Directors approved a common stock repurchase program. Under the program, the Company was authorized to repurchase up to 800,000 shares of the Company’s outstanding common stock. During the third quarter ending September 30, 2006, the Company completed its repurchase plan with a total of 800,000 shares of common stock repurchased at a weighted average share price of $31.04.

The allowance for loan losses increased to $26.8 million at September 30, 2006 compared to $26.6 million at December 31, 2005. Nonperforming assets totaled $7.0 million at September 30, 2006 (0.24% of total assets), as compared to $3.3 million (0.11% of total assets) reported at December 31, 2005.

Christopher Oddleifson, President and Chief Executive Officer, and Denis K. Sheahan, Chief Financial Officer, of Independent Bank Corp. and Rockland Trust Company, will host a conference call to discuss third quarter earnings at 10:00 a.m. Eastern Time on Friday, October 20, 2006. Internet access to the call is available on the Company’s website at http://www.RocklandTrust.com or by telephonic access by dial-in at 1-877-407-9205 reference: INDB. A replay of the call will be available by calling 1-877-660-6853, Account Number: 286, Conference ID: 215562. The webcast replay will be available until October 25, 2006 and the telephone replay will be available until January 20, 2007.

Independent Bank Corp.’s sole bank subsidiary, Rockland Trust Company, currently has $2.9 billion in assets. Rockland Trust Company is a full-service community bank serving southeastern Massachusetts and Cape Cod. To find out more about the products and services available at Rockland Trust Company, please visit our website at www.RocklandTrust.com .

This press release contains certain “forward-looking statements” with respect to the financial condition, results of operations and business of the Company. Actual results may differ from those contemplated by these statements. The Company wishes to caution readers not to place undue reliance on any forward-looking statements. The Company disclaims any intent or obligation to update publicly any such forward-looking statements, whether in response to new information, future events or otherwise.

This press release contains financial information determined by methods other than in accordance with accounting principles generally accepted in the United States of America (“GAAP”). The Company’s management uses these non-GAAP measures in its analysis of the Company’s performance. These non-GAAP measures may exclude significant gains or losses that are unusual in nature, such as securities gains. Because these gains and losses and their impact on the Company’s performance are difficult to predict, management believes that presentations of adjusted financial measures excluding the impact of these gains and losses provide useful information that is essential for a proper understanding of the operating results of the Company. These

disclosures should not be viewed as a substitute for operating results determined in accordance with GAAP, nor are they necessarily comparable to non-GAAP performance measures which may be presented by other companies.

INDEPENDENT BANK CORP. FINANCIAL SUMMARY
(Unaudited — Dollars in Thousands)


																September 30, 2006 vs.
	September 30,			December 31,			$			%			June 30,			June 30, 2006			%
CONSOLIDATED BALANCE SHEETS	2006			2005			Variance			Change			2006			Variance			Change

Assets
Cash and Due From Banks	$	64,403		$	66,289			(1,886	)		-2.85	%	$	75,337			(10,934	)		-14.51	%
Fed Funds Sold and Short Term Investments		48,500			63,662			(15,162	)		-23.82	%		15,045			33,455			222.37	%
Securities
Trading Assets		1,588			1,557			31			1.99	%		1,533			55			3.59	%
Securities Available for Sale		494,422			581,516			(87,094	)		-14.98	%		503,417			(8,995	)		-1.79	%
Securities Held to Maturity		98,236			104,268			(6,032	)		-5.79	%		99,998			(1,762	)		-1.76	%
Federal Home Loan Bank Stock		22,634			29,287			(6,653	)		-22.72	%		22,634			—			0.00	%

Total Securities		616,880			716,628			(99,748	)		-13.92	%		627,582			(10,702	)		-1.71	%

Loans
Commercial and Industrial		170,389			155,081			15,308			9.87	%		165,976			4,413			2.66	%
Commercial Real Estate		730,213			683,240			46,973			6.88	%		709,230			20,983			2.96	%
Commercial Construction		128,469			140,643			(12,174	)		-8.66	%		127,891			578			0.45	%
Business Banking		57,522			51,373			6,149			11.97	%		56,288			1,234			2.19	%
Residential Real Estate		396,564			428,343			(31,779	)		-7.42	%		410,468			(13,904	)		-3.39	%
Residential Construction		9,122			8,316			806			9.69	%		8,038			1,084			13.49	%
Residential Loans Held for Sale		10,954			5,021			5,933			118.16	%		8,690			2,264			26.05	%
Consumer — Home Equity		278,879			251,852			27,027			10.73	%		273,752			5,127			1.87	%
Consumer — Auto		217,629			263,179			(45,550	)		-17.31	%		233,955			(16,326	)		-6.98	%
Consumer — Other		51,554			53,760			(2,206	)		-4.10	%		52,913			(1,359	)		-2.57	%

Total Loans		2,051,295			2,040,808			10,487			0.51	%		2,047,201			4,094			0.20	%
Less — Allowance for Loan Losses		(26,814	)		(26,639	)		(175	)		0.66	%		(26,811	)		(3	)		0.01	%

Net Loans		2,024,481			2,014,169			10,312			0.51	%		2,020,390			4,091			0.20	%

Bank Premises and Equipment		37,110			37,431			(321	)		-0.86	%		37,157			(47	)		-0.13	%
Goodwill and Core Deposit Intangible		56,616			56,858			(242	)		-0.43	%		56,697			(81	)		-0.14	%
Other Assets		86,338			86,648			(310	)		-0.36	%		89,719			(3,381	)		-3.77	%

Total Assets	$	2,934,328		$	3,041,685			(107,357	)		-3.53	%	$	2,921,927			12,401			0.42	%


Liabilities and Stockholders’ Equity
Deposits
Demand Deposits	$	509,518		$	511,920			(2,402	)		-0.47	%	$	516,644			(7,126	)		-1.38	%
Savings and Interest Checking Accounts		571,227			613,840			(42,613	)		-6.94	%		565,201			6,026			1.07	%
Money Market		508,865			550,677			(41,812	)		-7.59	%		526,429			(17,564	)		-3.34	%
Time Certificates of Deposit		591,000			529,057			61,943			11.71	%		569,087			21,913			3.85	%

Total Deposits		2,180,610			2,205,494			(24,884	)		-1.13	%		2,177,361			3,249			0.15	%

Borrowings
Federal Home Loan Bank Borrowings		340,389			417,477			(77,088	)		-18.47	%		340,419			(30	)		-0.01	%
Fed Funds Purchased and Assets Sold Under Repurchase Agreements		116,242			113,335			2,907			2.56	%		114,767			1,475			1.29	%
Junior Subordinated Debentures		51,546			51,546			—			0.00	%		51,546			—			0.00	%
Treasury Tax and Loan Notes		1,606			5,452			(3,846	)		-70.54	%		2,344			(738	)		-31.48	%

Total Borrowings		509,783			587,810			(78,027	)		-13.27	%		509,076			707			0.14	%

Total Deposits and Borrowings		2,690,393			2,793,304			(102,911	)		-3.68	%		2,686,437			3,956			0.15	%
Other Liabilities		21,591			20,229			1,362			6.73	%		19,255			2,336			12.13	%
Stockholders’ Equity		222,344			228,152			(5,808	)		-2.55	%		216,235			6,109			2.83	%

Total Liabilities and Stockholders’ Equity	$	2,934,328		$	3,041,685			(107,357	)		-3.53	%	$	2,921,927			12,401			0.42	%

INDEPENDENT BANK CORP. FINANCIAL SUMMARY
(Unaudited — Dollars in Thousands, Except Per Share Data)


	Three Months Ended												Nine Months Ended
	September 30,									%			September 30,									%
CONSOLIDATED STATEMENTS OF INCOME	2006			2005			Variance			Change			2006			2005			Variance			Change

INTEREST INCOME
Interest on Fed Funds Sold and Short Term Investments	$	577		$	71			506			712.68	%	$	729		$	137			592			432.12	%
Interest and Dividends on Securities		7,500			8,160			(660	)		-8.09	%		22,471			25,799			(3,328	)		-12.90	%
Interest on Loans		34,732			30,994			3,738			12.06	%		101,517			88,891			12,626			14.20	%

Total Interest Income		42,809			39,225			3,584			9.14	%		124,717			114,827			9,890			8.61	%

INTEREST EXPENSE
Interest on Deposits		11,229			6,616			4,613			69.72	%		29,093			17,949			11,144			62.09	%
Interest on Borrowed Funds		5,751			5,890			(139	)		-2.36	%		17,680			17,946			(266	)		-1.48	%

Total Interest Expense		16,980			12,506			4,474			35.77	%		46,773			35,895			10,878			30.31	%

Net Interest Income		25,829			26,719			(890	)		-3.33	%		77,944			78,932			(988	)		-1.25	%
Less — Provision for Loan Losses		530			1,070			(540	)		-50.47	%		1,630			3,105			(1,475	)		-47.50	%

Net Interest Income after Provision for Loan Losses		25,299			25,649			(350	)		-1.36	%		76,314			75,827			487			0.64	%

NON-INTEREST INCOME
Service Charges on Deposit Accounts		3,669			3,462			207			5.98	%		10,652			9,611			1,041			10.83	%
Investment Management Services Income		1,438			1,348			90			6.68	%		4,497			3,999			498			12.45	%
Mortgage Banking Income		526			1,068			(542	)		-50.75	%		1,994			2,580			(586	)		-22.71	%
BOLI Income		479			462			17			3.68	%		2,729			1,360			1,369			100.66	%
Net Loss/Gain on Sale of Securities		—			—			—			—			(1,769	)		616			(2,385	)		-387.18	%
Other Non-Interest Income		937			797			140			17.57	%		2,588			2,330			258			11.07	%

Total Non-Interest Income		7,049			7,137			(88	)		-1.23	%		20,691			20,496			195			0.95	%

NON-INTEREST EXPENSE
Salaries and Employee Benefits		12,088			11,804			284			2.41	%		36,024			35,758			266			0.74	%
Occupancy and Equipment Expenses		2,378			2,273			105			4.62	%		7,618			7,465			153			2.05	%
Data Processing and Facilities Management		1,166			1,070			96			8.97	%		3,262			3,023			239			7.91	%
Other Non-Interest Expense		4,341			5,095			(754	)		-14.80	%		14,187			14,186			1			0.01	%

Total Non-Interest Expense		19,973			20,242			(269	)		-1.33	%		61,091			60,432			659			1.09	%

INCOME BEFORE INCOME TAXES		12,375			12,544			(169	)		-1.35	%		35,914			35,891			23			0.06	%

PROVISION FOR INCOME TAXES		3,819			3,857			(38	)		-0.99	%		11,165			11,249			(84	)		-0.75	%

NET INCOME	$	8,556		$	8,687			(131	)		-1.51	%	$	24,749		$	24,642			107			0.43	%


BASIC EARNINGS PER SHARE	$	0.58		$	0.56						3.57	%	$	1.65		$	1.60						3.13	%
DILUTED EARNINGS PER SHARE	$	0.58		$	0.56						3.57	%	$	1.63		$	1.59						2.52	%
BASIC AVERAGE SHARES		14,696,065			15,391,937						-4.52	%		15,014,292			15,370,226						-2.32	%
DILUTED AVERAGE SHARES		14,874,498			15,537,621						-4.27	%		15,180,017			15,518,039						-2.18	%

PERFORMANCE RATIOS:
Net Interest Margin (FTE)		3.89	%		3.93	%					-1.02	%		3.89	%		3.87	%					0.52	%
Return on Average Assets		1.17	%		1.17	%					0.00	%		1.13	%		1.10	%					2.73	%
Return on Average Equity		15.56	%		15.49	%					0.45	%		14.72	%		15.07	%					-2.32	%

RECONCILIATION TABLE — NON-GAAP FINANCIAL INFORMATION
NET INCOME (GAAP)	$	8,556		$	8,687			(131	)		-1.51	%	$	24,749		$	24,642			107			0.43	%
Add — Net Loss on Sale of Securities, net of tax		—			—			—			0.00	%		1,150			—			1,150			100.00	%
Less — Net Gain on Sale of Securities, net of tax		—			—			—			0.00	%		—			(400	)		400			100.00	%
Less — BOLI Benefit Proceeds		—			—			—			0.00	%		(1,316	)		—			(1,316	)		-100.00	%

NET OPERATING EARNINGS	$	8,556		$	8,687			(131	)		-1.51	%	$	24,583		$	24,242			341			1.41	%


Diluted Earnings Per Share (GAAP)	$	0.58		$	0.56						3.57	%	$	1.63		$	1.59						2.52	%
Add — Effects of Net Loss on Sale of Securities, net of tax		—			—									0.08			—
Less — Effects of Net Gain on Sale of Securities, net of tax		—			—									—			(0.03	)
Less — Effects of BOLI Benefit Proceeds		—			—									(0.09	)		—


Diluted Earnings Per Share, on an Operating Basis	$	0.58		$	0.56						3.57	%	$	1.62		$	1.56						3.85	%

INDEPENDENT BANK CORP.
SUPPLEMENTAL FINANCIAL INFORMATION
CONSOLIDATED AVERAGE BALANCE SHEETS AND AVERAGE RATE DATA
(Unaudited — Dollars in Thousands)


			Three Months Ended September 30,
			2006							2005
					Interest							Interest
	Ending		Average		Earned/		Yield/			Average		Earned/		Yield/
	Balance		Balance		Paid		Rate			Balance		Paid		Rate

Interest-Earning Assets:

Federal Funds Sold and Short Term Investments	$	48,500	$	44,168	$	577		5.23	%	$	8,437	$	71		3.37	%
Securities:
Trading Assets		1,588		1,534		12		3.13	%		1,539		11		2.86	%
Taxable Investment Securities		559,625		564,393		6,884		4.88	%		688,230		7,481		4.35	%
Non-taxable Investment Securities (1)		55,667		56,266		929		6.60	%		61,924		1,028		6.64	%

Total Securities:		616,880		622,193		7,825		5.03	%		751,693		8,520		4.53	%
Loans (1)		2,051,295		2,038,194		34,846		6.84	%		2,004,389		31,086		6.20	%

Total Interest-Earning Assets	$	2,716,675	$	2,704,555	$	43,248		6.40	%	$	2,764,519	$	39,677		5.74	%

Cash and Due from Banks		64,403		59,846							68,481
Other Assets		153,250		152,524							143,538

Total Assets	$	2,934,328	$	2,916,925						$	2,976,538

Interest-bearing Liabilities:
Deposits:
Savings and Interest Checking Accounts	$	571,227	$	555,666	$	1,326		0.95	%	$	593,464	$	712		0.48	%
Money Market		508,865		520,632		4,055		3.12	%		513,681		2,432		1.89	%
Time Deposits		591,000		582,526		5,848		4.02	%		512,092		3,472		2.71	%

Total interest-bearing deposits:		1,671,092		1,658,824		11,229		2.71	%		1,619,237		6,616		1.63	%
Borrowings:
Federal Home Loan Bank Borrowings	$	340,389	$	340,400	$	3,700		4.35	%	$	445,716	$	4,362		3.91	%
Federal Funds Purchased and Assets Sold Under Repurchase Agreement		116,242		122,842		926		3.02	%		86,750		399		1.84	%
Junior Subordinated Debentures		51,546		51,546		1,117		8.67	%		51,546		1,117		8.67	%
Treasury Tax and Loan Notes		1,606		708		8		4.52	%		1,452		12		3.31	%

Total Borrowings:		509,783		515,496		5,751		4.46	%		585,464		5,890		4.02	%

Total Interest-Bearing Liabilities	$	2,180,875	$	2,174,320	$	16,980		3.12	%	$	2,204,701	$	12,506		2.27	%

Demand Deposits		509,518		505,134							530,115

Other Liabilities		21,591		17,473							17,369

Total Liabilities	$	2,711,984	$	2,696,927						$	2,752,185
Stockholders’ Equity		222,344		219,998							224,353

Total Liabilities and Stockholders’ Equity	$	2,934,328	$	2,916,925						$	2,976,538


Net Interest Income					$	26,268						$	27,171

Interest Rate Spread (2)								3.28	%						3.47	%

Net Interest Margin (2)								3.89	%						3.93	%

Supplemental Information:
Total Deposits, including Demand Deposits	$	2,180,610	$	2,163,958	$	11,229				$	2,149,352	$	6,616
Cost of Total Deposits								2.08	%						1.23	%
Total Funding Liabilities, including Demand Deposits	$	2,690,393	$	2,679,454	$	16,980				$	2,734,816	$	12,506
Cost of Total Funding Liabilities								2.53	%						1.83	%


(1)		The total amount of adjustment to present interest income and yield on a fully tax-equivalent basis is $439 for the three months ended September 30, 2006 and $452 for the three months ended September 30, 2005.

(2)		Interest rate spread represents the difference between the weighted average yield on interest-earning assets and the weighted average cost of interest-bearing liabilities. Net interest margin represents annualized net interest income as a percentage of average interest-earning assets.

INDEPENDENT BANK CORP.
SUPPLEMENTAL FINANCIAL INFORMATION
CONSOLIDATED AVERAGE BALANCE SHEETS AND AVERAGE RATE DATA
(Unaudited — Dollars in Thousands)


			Nine Months Ended September 30,
			2006							2005
					Interest							Interest
	Ending		Average		Earned/		Yield/			Average		Earned/		Yield/
	Balance		Balance		Paid		Rate			Balance		Paid		Rate

Interest-Earning Assets:

Federal Funds Sold and Short Term Investments	$	48,500	$	19,469	$	729		4.99	%	$	6,130	$	137		2.98	%
Securities:
Trading Assets		1,588		1,562		31		2.65	%		1,546		27		2.33	%
Taxable Investment Securities		559,625		595,510		20,504		4.59	%		723,031		23,765		4.38	%
Non-taxable Investment Securities (1)		55,667		58,594		2,978		6.78	%		62,339		3,088		6.60	%

Total Securities:		616,880		655,666		23,513		4.78	%		786,916		26,880		4.55	%
Loans (1)		2,051,295		2,044,053		101,820		6.64	%		1,973,697		89,156		6.02	%

Total Interest-Earning Assets	$	2,716,675	$	2,719,188	$	126,062		6.18	%	$	2,766,743	$	116,173		5.60	%

Cash and Due from Banks		64,403		59,842							65,145
Other Assets		153,250		151,815							142,989

Total Assets	$	2,934,328	$	2,930,845						$	2,974,877

Interest-bearing Liabilities:
Deposits:
Savings and Interest Checking Accounts	$	571,227	$	563,270	$	3,234		0.77	%	$	596,458	$	2,032		0.45	%
Money Market		508,865		528,893		10,906		2.75	%		515,623		6,596		1.71	%
Time Deposits		591,000		556,514		14,953		3.58	%		504,108		9,321		2.47	%

Total interest-bearing deposits:		1,671,092		1,648,677		29,093		2.35	%		1,616,189		17,949		1.48	%
Borrowings:
Federal Home Loan Bank Borrowings	$	340,389	$	379,621	$	12,031		4.23	%	$	485,418	$	13,704		3.76	%
Federal Funds Purchased and Assets Sold Under Repurchase Agreement		116,242		112,726		2,261		2.67	%		73,902		862		1.56	%
Junior Subordinated Debentures		51,546		51,546		3,352		8.67	%		51,546		3,352		8.67	%
Treasury Tax and Loan Notes		1,606		1,120		36		4.29	%		1,714		28		2.18	%

Total Borrowings:		509,783		545,013		17,680		4.33	%		612,580		17,946		3.91	%

Total Interest-Bearing Liabilities	$	2,180,875	$	2,193,690	$	46,773		2.84	%	$	2,228,769	$	35,895		2.15	%

Demand Deposits		509,518		494,762							510,839

Other Liabilities		21,591		18,182							17,267

Total Liabilities	$	2,711,984	$	2,706,634						$	2,756,875
Stockholders’ Equity		222,344		224,211							218,002

Total Liabilities and Stockholders’ Equity	$	2,934,328	$	2,930,845						$	2,974,877


Net Interest Income					$	79,289						$	80,278


Interest Rate Spread (2)								3.34	%						3.45	%


Net Interest Margin (2)								3.89	%						3.87	%


Supplemental Information:
Total Deposits, including Demand Deposits	$	2,180,610	$	2,143,439	$	29,093				$	2,127,028	$	17,949
Cost of Total Deposits								1.81	%						1.13	%
Total Funding Liabilities, including Demand Deposits	$	2,690,393	$	2,688,452	$	46,773				$	2,739,608	$	35,895
Cost of Total Funding Liabilities								2.32	%						1.75	%


(1)		The total amount of adjustment to present interest income and yield on a fully tax-equivalent basis is $1,345 for the nine months ended September 30, 2006 and $1,346 for the nine months ended September 30, 2005.

(2)		Interest rate spread represents the difference between the weighted average yield on interest-earning assets and the weighted average cost of interest-bearing liabilities. Net interest margin represents annualized net interest income as a percentage of average interest-earning assets.


	As Of
	September 30,			December 31,			June 30,
	2006			2005			2006
	(Dollars in Thousands, Except Per Share Data)
Asset Quality
Nonperforming Loans
Commercial & Industrial Loans	$	642		$	245		$	322
Business Banking Loans	$	117		$	47		$	80
Commercial Real Estate Loans	$	3,004		$	313		$	2,801
Residential Real Estate Loans	$	1,838		$	1,876		$	918
Installment Loans — Home Equity	$	406			—		$	16
Installment Loans — Auto	$	791		$	674		$	691
Installment Loans — Other	$	60		$	184		$	99

Total Nonperforming Loans	$	6,858		$	3,339		$	4,927

Other Real Estate Owned	$	190			—			—
Nonperforming Assets	$	7,048		$	3,339		$	4,927


Net charge-offs (year to date)	$	1,454		$	2,733		$	927
Net charge-offs to average loans (annualized)		0.09	%		0.14	%		0.09	%

Nonperforming Loans/Gross Loans		0.33	%		0.16	%		0.24	%
Allowance for Loan Losses/Nonperforming Loans		390.99	%		797.81	%		544.16	%
Loans/Total Deposits		94.07	%		92.53	%		94.02	%
Allowance for Loan Losses/Total Loans		1.31	%		1.31	%		1.31	%

Financial Ratios
Book Value per Share	$	15.15		$	14.81		$	14.65
Tangible Capital/Tangible Asset		5.76	%		5.74	%		5.57	%
Tangible Capital/Tangible Asset (proforma to include the deductibility of goodwill)		6.26	%		6.23	%		6.07	%
Tangible Book Value per Share	$	11.29		$	11.12		$	10.81
Tangible Book Value per Share (proforma to include the deductibility of goodwill)	$	12.28		$	12.06		$	11.80

Capital Adequacy
Tier one leverage capital ratio (1)		7.78	%		7.71	%		7.67	%


(1)		Estimated number for September 30, 2006

Certain amounts in prior year financial statements have been reclassified to conform to the current year’s presentation.

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Table of Contents

Table of Contents

Table of Contents