INDEPENDENT BANK CORP - 10-Q Quarterly Report

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-Q

QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended March 31, 2003

Commission File Number: 1-9047

Independent Bank Corp.

(Exact name of registrant as specified in its charter)

Massachusetts		04-2870273
(State or other jurisdiction of incorporation or organization)		I.R.S. Employer Identification No.)

288 Union Street, Rockland, Massachusetts 02370
(Address of principal executive offices, including zip code)

(781) 878-6100
(Registrant’s telephone number, including area code)

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.

Yes

As of May 1, 2003, there were 14,526,501 shares of the issuer’s common stock outstanding, par value $.01 per share.

INDEX

PART I. FINANCIAL INFORAMTION
	Item 1. Financial Statements
	Consolidated Balance Sheets -	3
	March 31, 2003 (unaudited) and December 31, 2002
	Consolidated Statements of Income (unaudited) -	4
	Three months ended March 31, 2003 and 2002
	Consolidated Statements of Stockholders Equity -	5
	Three months ended March 31, 2003 (unaudited) and for the year ended December 31, 2002
	Consolidated Statements of Cash flows (unaudited) -	6
	Three months ended March 31, 2003 and 2002
	Condensed Notes to Consolidated Financial Statements – March 31, 2003
	Note 1 - Basis of Presentation	7
	Note 2 - Stock Based Compensation	7
	Note 3 - Recent Accounting Developments	9
	Note 4 - Goodwill and Intangibles	9
	Note 5 - Real Estate Investment Trust (“REIT”) Retroactive Taxation	10
	Note 6 - Earnings Per Share	10
	Note 7 - Redemption/Issuance of Trust Preferred Securities	11
	Note 8 - Comprehensive Income	12
	Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations	13
	Table 1 - Nonperforming Assets / Loans	16
	Table 2 - Summary of Changes in the Allowance for Loan Losses	19
	Table 3 - Summary of Allocation of the Allowance for Loan Losses	20
	Table 4 - Average Balance, Interest Earned/Paid & Average Yields	23
	Table 5 - Volume Rate Analysis	24
	Table 6 - Interest Rate Sensitivity	28
	Item 3. Quantitative and Qualitative Disclosures About Market Risk	30
	Item 4. Controls and Procedures	31

PART II. OTHER INFORMATION		31
	Item 1. Legal Proceedings	31
	Item 2. Changes in Securities and Use of Proceeds	32
	Item 3. Defaults Upon Senior Securities	32
	Item 4. Submission of Matters to a Vote of Security Holders	32
	Item 5. Other Information	32
	Item 6. Exhibits and Reports on Form 8-K	32

Signatures		33
Exhibit 99.1 - Certification 906		37

PART 1. FINANCIAL INFORMATION
Item 1. Financial Statements

INDEPENDENT BANK CORP.
CONSOLIDATED BALANCE SHEETS

(Unaudited, Dollars In Thousands, Except Share Amounts)	March 31, 2003			December 31, 2002

ASSETS
CASH AND DUE FROM BANKS	$	73,716		$	71,317
FEDERAL FUNDS SOLD & SHORT TERM INVESTMENTS	—			3,169
INVESTMENTS
Trading Assets	1,089			1,075
Securities Available for Sale	533,236			501,828
Securities Held to Maturity (fair value $145,131 and $152,566)	140,806			149,071
Federal Home Loan Bank Stock	19,988			17,036
TOTAL INVESTMENTS	695,119			669,010
LOANS
Commercial & Industrial	165,501			151,591
Commercial Real Estate	524,545			511,102
Residential Real Estate	294,960			281,452
Real Estate Construction	63,733			59,371
Consumer - Installment	314,776			323,501
Consumer - Other	110,505			104,585
TOTAL LOANS	1,474,020			1,431,602
LESS: ALLOWANCE FOR LOAN LOSSES	(21,924		)	(21,387		)
NET LOANS	1,452,096			1,410,215
BANK PREMISES AND EQUIPMENT, Net	30,657			30,872
GOODWILL	36,236			36,236
MORTGAGE SERVICING RIGHTS	2,172			2,039
BANK OWNED LIFE INSURANCE	37,596			37,133
OTHER REAL ESTATE OWNED	227			—
OTHER ASSETS	22,813			25,381
TOTAL ASSETS	$	2,350,632		$	2,285,372

LIABILITIES
DEPOSITS
Demand Deposits	$	411,403		$	429,042
Savings and Interest Checking Accounts	471,822			464,318
Money Market and Super Interest Checking Accounts	340,507			320,819
Time Certificates of Deposit over $100,000	98,985			101,835
Other Time Certificates of Deposits	366,098			372,718
TOTAL DEPOSITS	1,688,815			1,688,732
FEDERAL FUNDS PURCHASED AND ASSETS SOLD UNDER
REPURCHASE AGREEMENTS	55,042			58,092
TREASURY TAX AND LOAN NOTES	571			6,471
FEDERAL HOME LOAN BANK BORROWINGS	361,758			297,592
OTHER LIABILITIES	35,298			25,469
TOTAL LIABILITIES	$	2,141,484		$	2,076,356
COMMITMENTS AND CONTINGENCIES
CORPORATION-OBLIGATED MANDATORILY REDEEMABLE TRUST PREFERRED
SECURITIES OF SUBSIDIARY TRUST HOLDING SOLELY JUNIOR SUBORDINATED
DEBENTURES OF THE CORPORATION
Outstanding: 2,000,000 shares at March 31, 2003 and at December 31, 2002	$	47,797		$	47,774
STOCKHOLDERS’ EQUITY
PREFERRED STOCK, $.01 par value. Authorized: 1,000,000 Shares Outstanding: None	—			—
COMMON STOCK, $.01 par value. Authorized: 30,000,000 Issued: 14,863,821 Shares at March 31, 2003 and December 31, 2002.	149			149
TREASURY STOCK: 341,853 Shares at March 31, 2003 and 402,340 Shares at December 31, 2002.	(5,346		)	(6,292		)
TOTAL OUTSTANDING STOCK: 14,521,968 at March 31, 2003 and 14,461,481 at December 31, 2002
TREASURY STOCK SHARES HELD IN RABBI TRUST AT COST	(1,159		)	(1,189		)
DEFERRED COMPENSATION OBLIGATION	1,159			1,189
ADDITIONAL PAID IN CAPITAL	42,093			41,994