Independent Bancorp, the parent company of Rockland Trust, reported net income of $14.7 million for the three-month period ended Sept. 30, an increase of 14.3 percent, or 8 cents on a diluted earnings per share basis, compared with the previous quarter. Both quarters accounted for items like merger and acquisition expenses and gain on extinguishment of debt. After excluding those items, the company said its net operating earnings totaled $14.4 million.
Total assets increased $703.4 million, or 13.6 percent, on a year-over-year basis to $5.9 billion at Sept. 30, inclusive of the company’s acquisition of Central Bancorp in November of last year.
Total loans increased nearly $500 million, or 12.3 percent, from last year’s third quarter to $4.6 billion. The company placed particular emphasis on growth in its commercial loan portfolio, which increased $32.1 million, or 4 percent, on an annualized basis during the third quarter. The company’s home equity portfolio also increased $12.2 million, or 6.1 percent, on an annualized basis.
An ongoing decline in Independent Bancorp’s residential portfolio offset that growth, declining $17.1 million, or 13.2 percent, on an annualized basis. However, the company said that decline has slowed significantly as the increase in mortgage rates reduced refinancing activity.
Management deployed some of the company’s excess cash during the quarter by purchasing investments and opportunistically prepaying $60 million in Federal Home Loan Bank Advances. The securities portfolio increased by $72.6 million to $601.8 million at Sept. 30, and represents 10.2 percent of total assets. The investments purchased during the quarter were primarily Agency Mortgage-Backed Securities.
The provision for loan losses totaled $2.7 million in the third quarter compared with $3.1 million for the previous quarter. The provision for loan losses exceeded net charge-offs in both periods as the company added to loan loss reserves in line with recent loan growth trends.
For the quarter, net charge-offs were consistent with the prior quarter at $2.1 million, or 0.18 percent, on an annualized basis of average loans. Nonperforming loans increased by $1.4 million to $37.9 million, or 0.83 percent, of total loans at the end of September, from $36.5 million, or 0.81 percent, of total loans in the second quarter, due to higher nonaccrual commercial loans offset somewhat by a decrease in nonaccrual home equity loans. Nonperforming assets increased slightly to $48.9 million at the end of the third quarter compared to $48.1 million in the linked quarter. Delinquency as a percentage of loans decreased to 0.90 percent at September 30, 2013 compared to 1.03 percent at June 30, 2013.
The allowance for loan losses was $53.6 million at Sept. 30, an increase of $586,000 from the prior quarter levels. The company’s allowance for loan losses was 1.18 percent and 1.17 percent of total loans at Sept.30, and June 30, respectively.
