Slade’s Ferry Bancorp, which is based in Somerset, reported a net income of $1.07 million for the quarter ending Sept. 30.
Most community banks in the Bay State considered their earnings strong for the third quarter, with many of them reporting increases in net income and citing various strategies that helped boost earnings.
Somerset-based Slade’s Ferry Bancorp, which has more than $540 million in assets, reported a net income of $1.07 million for the quarter ending Sept. 30. According to the bank, that was a 53 percent increase over net income for the same quarter in 2003.
Deborah McLaughlin, chief financial officer at Slade’s Ferry, said the bank’s success is due to a plan that calls for significant growth in 2004.
“We have a strategic plan and we’re really following it,” McLaughlin said. Initiatives such as Internet banking and cash management have helped the bank increase its earnings, she noted.
The bank also instituted programs designed to attract significant levels of deposits during the period of historically low interest rates earlier in the year.
“We need to grow and be aggressive,” McLaughlin said.
Looking ahead to the remainder of the year, McLaughlin said the bank’s presence will continue to be felt, citing a new branch in Assonet and a new teller platform as further initiatives to help increase earnings.
McLaughlin said during most years, the latter part of the year generally results in stronger earnings. She reasoned that the summer months tend to slow down and loan and other bank activity pick up in the fall.
The bank also experienced a gain on sales of non-performing loans in the third quarter.
Medford-based Century Bancorp’s Chief Financial Officer Paul V. Cusick said the bank experienced a “good, solid quarter” and the numbers were what the bank expected.
The bank reported a net income of $2.1 million compared to the net income of $3.2 million for the same period last year. Cusick said net-interest margins were one area of disappointment for the bank.
“Margins continue to be under pressure,” Cusick said.
Like Slade’s Ferry, Century Bank said it has made a “major commitment” to its market area. Cusick said the bank has a new building in Medford that overlooks Interstate 93, as well as a new branch in Boston.
He added the bank also has made a “multimillion-dollar” commitment to imaging technology.
‘An Investment Year’
Rockland-based Independent Bank Corp., parent of Rockland Trust Co., enjoyed a net income of $8.3 million in the third quarter. The company attributed some of its earnings to the acquisition of Falmouth Bancorp.
Rick Hall, director of marketing for Rockland Trust, said there was “nothing dramatic” in this quarter’s earnings, but the bank did follow its planned course of action.
“We’ve positioned this year as an investment year,” Hall said.
Rockland Trust opened up two de novo branches in the third quarter and hopes to see an impact from those locations in the upcoming quarter. The branches are located in North Attleboro and Raynham.
Chris Oddleifson, chief executive officer and president of Independent Bank Corp. and Rockland Trust, which has $2.9 billion in assets, said he was pleased with the bank’s accomplishments.
“The integration of Falmouth Bancorp has been successfully completed. Our strategic initiatives continue to build momentum,” Oddleifson said.
Hall said the bank also saw an increase in investment management activity in key markets, such as Cape Cod.
Robert B. Segal of J. William Mantz Investment Advisors in Gloucester said banks’ net-interest margins will be one of the biggest dominating factors in the next few quarters. He said margins are stabilizing, however.
“Some banks are showing improvement in the net-interest margins,” said Segal.
Compared to the same period last year, Independent Bank Corp.’s net-interest income increased $915,000, or 3.8 percent, during the third quarter of 2004. However, net-interest income for the nine months ending Sept. 30 decreased $647,000, or 0.9 percent, compared to last year.
Slade’s Ferry net-interest and dividend income increased from $3.62 million for the third quarter of last year to $4.23 million for this year’s third quarter. Net-interest income also increased by 9.3 percent for the nine months ending in September vs. the same period last year.
Segal also said banks are beginning to see another trend: Commercial loan demand has picked up.
“Businesses are doing better and as activity picks up, they need to borrow money from banks,” said Segal.
During the third quarter of last year, Century Bank had $40,889 in commercial and industrial loans. During the same period this year, the bank recognized an increase with a total of $73,930 in loans.
According to Hall, Rockland Trust also saw an uptick in commercial loan demand.
“Commercial lending shows some positive strides,” said Hall. “We have seen some growth in the commercial lending side.”
The bank said commercial real estate loans increased 10 percent and commercial construction loans increased 48.7 percent.
Looking back to earlier quarters this year, Segal said it appeared banks would be challenged to meet the banks’ budget. In the first few quarters, a lot of banks were behind on their budget.
In order for banks to balance their budgets to offset shrinking margins, Segal said the institutions had to grow with more loans.
Segal’s advice to banks for the remainder of the year includes maintaining deposit costs.
“Banks should remind themselves to keep an eye on deposit costs,” he said.
He also said banks should aggressively put new loans on the books, while still watching the quality of consumers’ credit.
“It is important to grow,” Segal said. “But you have to do it carefully.”
Looking ahead to the future, each bank has carved out specific strategies to keep earnings up.
“[Rockland Trust] is still hammering out where the real opportunities are … [it will] continue to focus on our core markets,” Hall said.
At Slade’s Ferry, McLaughlin said new products and services will be the bank’s focus in the upcoming months. She said with the consolidation happening within the industry, it is important for Slade’s Ferry to remain a community bank while offering a few extra services to customers.
