INDEPENDENT BANK CORP - FORM 8-K - EX-99.1 - Q4 2015 EARNINGS PRESS RELEASE

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8-K - Q4 2015 EARNINGS RELEASE - INDEPENDENT BANK CORP	q42015earningsreleasecover.htm

Exhibit 99.1

Shareholder Relations NEWS RELEASE

288 Union Street,

Rockland, MA 02370

INDEPENDENT BANK CORP. REPORTS FOURTH QUARTER

OPERATING NET INCOME OF $19.5 MILLION

Record Operating Earnings Per Share in 2015 of $2.76

Rockland, Massachusetts (January 21, 2016) Independent Bank Corp. (NASDAQ: INDB), parent of Rockland Trust Company, today announced 2015 fourth quarter net income of $19.5 million, or $0.74 per diluted share, as compared to $18.6 million, or $0.71 per diluted share in the prior quarter. Net income for the full year was $65.0 million, or $2.50 on a diluted earnings per share basis, as compared to $59.8 million, or $2.49 on a diluted earnings per share basis in the prior year. The full year net income contained items which the Company considers non-core, such as merger and acquisition expenses and gains and losses on the sale of fixed income securities. There were no such items in the second half of the year. On an operating basis, the full year income was $71.7 million, or $2.76 on a diluted earnings per share basis, an increase of $11.8 million, and $0.26 over the prior year, respectively.

“Rockland Trust achieved record-setting operating earnings in 2015,” said Christopher Oddleifson, the President and Chief Executive Officer of Independent Bank Corp. and Rockland Trust. “Our core deposit growth was very strong and our loan growth steady, due to my engaged colleagues delivering consistent value to our customers. We enter 2016 with good momentum and a clear, disciplined focus upon the priorities of our customers.”

BALANCE SHEET

Total assets of $7.2 billion at December 31, 2015 increased by $74.5 million, or 1.0%, from the prior quarter and by $845.1 million, or 13.3%, as compared to the year ago period, inclusive of the acquisition of Peoples Federal Bancshares, Inc. ("Peoples").

The commercial loan portfolio increased by $44.0 million, or 1.1% (4.4% annualized), over the prior quarter, led by growth in the commercial construction and business banking sectors, as origination volumes remained solid across the Company's footprint. The home equity portfolio also continued to experience robust growth due to active customer outreach, with an increase of 2.2% (8.7% annualized) over the prior quarter. These factors contributed to growth in total loans at December 31, 2015 of $49.6 million, or 0.9% (3.6% annualized), compared to the balance at September 30, 2015. Compared to the prior year period, total loans increased by $577.0 million, or 11.6%, inclusive of the Peoples acquisition.

Total deposits increased by $75.8 million, or 1.3%, from the prior quarter, driven by strong core deposit growth, especially in the demand and savings categories. Core deposits rose by $111.3 million, or 8.5% on an annualized basis, from the prior quarter, and represent 88.6% of total deposits at December 31, 2015. Compared to the prior year period, total deposits increased $780.2 million, or 15.0%, inclusive of the Peoples acquisition. Total cost of deposits remained low at 20 basis points during the fourth quarter, reflecting the Company’s success in growing its core deposit customer base.

The securities portfolio increased by $30.7 million from the prior quarter to $845.1 million at December 31, 2015, due primarily to the purchase of $68.3 million of additional securities, offset by principal paydowns during the quarter. The securities portfolio comprised 11.7% of total assets as of December 31, 2015.

Stockholders’ equity at December 31, 2015 rose to $771.5 million, an increase of 1.6% from September 30, 2015. Compared to the year ago period, stockholders’ equity has increased by $130.9 million, or 20.4%, fueled primarily by the Peoples acquisition and record earnings results. The strong growth in capital led to a $0.48 increase, or 2.3%, in the Company’s tangible book value per share during the fourth quarter compared to the third quarter of 2015. The December 31, 2015 tangible book value per share of $21.29 represents an 11.0% increase above the prior year level. In addition, the Company’s ratio of common equity to tangible assets of 7.98% represents an increase of 10 basis points from the prior quarter and of 54 basis points from the prior year.

NET INTEREST INCOME

Net interest income for the fourth quarter was $54.9 million, remaining relatively consistent with the prior quarter as the effect of higher earning asset levels and a lower net interest margin basically offset each other. During the fourth quarter, the Company’s net interest margin decreased by five basis points from the prior quarter to 3.34%. The decline is attributable to increased liquid asset levels along with a reduction in loan and investment yields which continue to be impacted by the prolonged low rate environment. Investment yields were also primarily lower in the fourth quarter of 2015 due to a security prepayment benefit realized in the third quarter.

NONINTEREST INCOME

The Company recorded noninterest income of $19.8 million during the fourth quarter, which represents a $577,000, or 3.0%, increase from the linked quarter. Significant changes in noninterest income in the fourth quarter compared to the prior quarter included the following:


•	Deposit account fees and interchange and ATM fees decreased by $98,000, or 1.1%.


•	Investment management income increased by $139,000, or 2.8%, primarily driven by an increase in assets under administration of 5.1% to $2.7 billion.


•	Mortgage banking income decreased by $149,000, or 10.1%, caused primarily by lighter volume typically associated with the holiday months.


•	Other noninterest income increased $590,000, or 27.4%, mainly due to discounted purchases of Massachusetts historical tax credits, capital gain distributions on equity securities, and increases in other various fees.

NONINTEREST EXPENSE

The Company recorded noninterest expense of $46.5 million during the third quarter, a $545,000, or 1.2%, decrease from the prior quarter. Significant changes in noninterest expense in the fourth quarter compared to the prior quarter included the following:


•	Salaries and employee benefits increased slightly by $92,000, or 0.3%, due primarily to increases in salaries and retirement plan benefits, offset by decreases in commissions and stock compensation.


•	Other noninterest expenses decreased by $818,000, or 6.4%, driven primarily by lower advertising costs and decreases in loan workout costs, partly offset by increases in consultant fees and provision for unfunded commitments.

The Company generated a return on average assets and a return on average common equity of 1.07% and 10.03%, respectively, in the fourth quarter, as compared to 1.03% and 9.75%, respectively, for the prior quarter.

ASSET QUALITY

Asset quality metrics remained strong during the fourth quarter with total net recoveries of $120,000, compared to net charge-offs of $590,000 or 0.04% of average loans on an annualized basis for the third quarter. The provision for loan losses was $500,000 for the fourth quarter as compared to $800,000 in the third quarter. Nonperforming loans decreased during the fourth quarter by $1.9 million to $27.7 million, and represent 0.50% of total loans at December 31, 2015, as compared to 0.54% at September 30, 2015. Total nonperforming assets decreased to $29.8 million at the end of the fourth quarter, from $32.1 million at the end of the prior quarter. Delinquency as a percentage of loans was 0.56% at December 31, 2015, an increase of thirteen basis points from the prior quarter.

The allowance for loan losses was $55.8 million at December 31, 2015, as compared to $55.2 million at September 30, 2015. The Company’s allowance for loan losses as a percentage of loans was 1.01% and 1.00% at December 31, 2015 and September 30, 2015, respectively.

CONFERENCE CALL INFORMATION

Christopher Oddleifson, Chief Executive Officer and Robert Cozzone, Chief Financial Officer will host a conference call to discuss fourth quarter earnings at 10:00 a.m. Eastern Time on Friday, January 22, 2016. Internet access to the call is available on the Company’s website at www.rocklandtrust.com or via telephonic access by dial-in at 1-888-336-7153 reference: INDB. A replay of the call will be available by calling 1-877-344-7529. Replay Conference Number: 10077735 and will available through February 5, 2016. Additionally, a webcast replay will be available until January 22, 2017.

ABOUT INDEPENDENT BANK CORP.

Independent Bank Corp. has approximately $7.2 billion in assets and is the holding company for Rockland Trust Company, a full-service commercial bank headquartered in Massachusetts. Rockland Trust offers a wide range of banking, investment, and insurance services to businesses and individuals through retail branches, commercial lending offices, investment management offices, and residential lending centers located in Eastern Massachusetts and Rhode Island, as well as through telephone banking, mobile banking, and the Internet. Rockland Trust is an FDIC Member and an Equal Housing Lender. To find out why Rockland Trust is the bank “Where Each Relationship Matters ®”, please visit 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. These statements may be identified by such forward-looking terminology as “expect,” “achieve,” “plan,” “believe,” “future,” “positioned,” “continued,” “will,” “would,” “potential,” or similar statements or variations of such terms. Actual results may differ from those contemplated by these forward-looking statements.

Factors that may cause actual results to differ materially from those contemplated by such forward-looking statements include, but are not limited to:


•	a weakening in the United States economy in general and the regional and local economies within the New England region and the Company’s market area;


•	adverse changes in the local real estate market;


•	acquisitions may not produce results at levels or within time frames originally anticipated and may result in unforeseen integration issues or impairment of goodwill and/or other intangibles;


•	changes in, trade, monetary and fiscal policies and laws, including interest rate policies of the Board of Governors of the Federal Reserve System;


•	higher than expected tax rates and any changes in and any failure by the Company to comply with tax laws generally and requirements of the federal New Markets Tax Credit program;


•	unexpected changes in market interest rates for interest earning assets and/or interest bearing liabilities;


•	adverse changes in asset quality including an unanticipated credit deterioration in our loan portfolio;


•	unexpected increased competition in the Company’s market area;


•	unanticipated loan delinquencies, loss of collateral, decreased service revenues, and other potential negative effects on our business caused by severe weather or other external events;


•	a deterioration in the conditions of the securities markets;


•	our inability to adapt to changes in information technology;


•	electronic fraudulent activity within the financial services industry, especially in the commercial banking sector;


•	adverse changes in consumer spending and savings habits;


•	the inability to realize expected revenue synergies from the Peoples Federal Bancshares merger in the amounts or in the timeframe anticipated;


•	inability to retain customers and employees, including those of Peoples Federal Bancshares;


•	the effect of new laws and regulations regarding the financial services industry including, but not limited to, the Dodd-Frank Wall Street Reform and Consumer Protection Act;


•	changes in laws and regulations (including laws and regulations concerning taxes, banking, securities and insurance) generally applicable to the Company’s business;


•	changes in accounting policies, practices and standards, as may be adopted by the regulatory agencies as well as the Public Company Accounting Oversight Board, the Financial Accounting Standards Board, and other accounting standard setters; and


•	other unexpected material adverse changes in our operations or earnings.

The Company wishes to caution readers not to place undue reliance on any forward-looking statements as the Company’s business and its forward-looking statements involve substantial known and unknown risks and uncertainties included in the Company’s Annual Report on Form 10-K and Quarterly Reports on Form 10-Q (“Risk Factors”). Except as required by law, 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. Any public statements or disclosures by the Company following this release which modify or impact any of the forward-looking statements contained in this release will be deemed to modify or supersede such statements in this release. In addition to the information set forth in this press release, you should carefully consider the Risk Factors.

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”). This information includes operating earnings and operating EPS calculated on an operating basis. The non-GAAP financial measures, including operating earnings and operating EPS, exclude gain or loss due to items that management believes are unrelated to its core banking business and will not have a material financial impact on operating results in future periods, such as gains or losses on the sales of securities, merger and acquisition expenses, and other items. The Company’s management uses operating earnings and operating EPS to measure the strength of the Company’s core banking business and to identify trends that may to some extent be obscured by such excluded gains or losses. Management also supplements its evaluation of financial performance with analysis of tangible book value per share which is computed by dividing stockholders' equity less goodwill and identifiable intangible assets by common shares outstanding. The Company has included information on these non-GAAP measures because management believes that investors may find it useful to have access to the same analytical tool used by management and may also

find that it facilitates the comparison of the Company to other companies in the financial services industry. These non-GAAP measures should not be viewed as a substitute for operating results determined in accordance with GAAP. An item which management deems to be non-core and excludes when computing these non-GAAP measures can be of substantial importance to the Company’s results for any particular quarter or year. The Company’s non-GAAP performance measures, including operating earnings, operating EPS, and tangible book value per share are not necessarily comparable to non-GAAP performance measures which may be presented by other companies.

Contacts:

Chris Oddleifson

President and Chief Executive Officer

(781) 982-6660

Robert Cozzone

Chief Financial Officer and Treasurer

(781) 982-6723



INDEPENDENT BANK CORP. FINANCIAL SUMMARY
CONSOLIDATED BALANCE SHEETS
(Unaudited dollars in thousands)
										% Change		% Change
	December 31,			September 30,			December 31,			Dec 2015 vs.		Dec 2015 vs.
	2015			2015			2014			Sept 2015		Dec 2014
Assets
Cash and due from banks	$	84,813		$	160,721		$	143,342		(47.23	)%	(40.83	)%
Interest-earning deposits with banks	190,952			89,607			34,912			113.10	%	446.95	%
Securities
Securities - trading	356			454			—			(21.59	)%	100.00%
Securities - available for sale	367,249			365,792			348,554			0.40	%	5.36	%
Securities held to maturity	477,507			448,139			375,453			6.55	%	27.18	%
Total securities	845,112			814,385			724,007			3.77	%	16.73	%
Loans held for sale (at fair value)	5,990			11,476			6,888			(47.80	)%	(13.04	)%
Loans
Commercial and industrial	843,276			862,512			860,839			(2.23	)%	(2.04	)%
Commercial real estate	2,653,434			2,659,342			2,347,323			(0.22	)%	13.04	%
Commercial construction	373,368			308,214			265,994			21.14	%	40.37	%
Small business	96,246			92,278			85,247			4.30	%	12.90	%
Total commercial	3,966,324			3,922,346			3,559,403			1.12	%	11.43	%
Residential real estate	638,606			651,937			530,259			(2.04	)%	20.43	%
Home equity - first position	543,092			531,364			513,518			2.21	%	5.76	%
Home equity - subordinate positions	384,711			376,530			350,345			2.17	%	9.81	%
Total consumer real estate	1,566,409			1,559,831			1,394,122			0.42	%	12.36	%
Other consumer	14,988			15,944			17,208			(6.00	)%	(12.90	)%
Total loans	5,547,721			5,498,121			4,970,733			0.90	%	11.61	%
Less: allowance for loan losses	(55,825		)	(55,205		)	(55,100		)	1.12	%	1.32	%
Net loans	5,491,896			5,442,916			4,915,633			0.90	%	11.72	%
Federal Home Loan Bank stock	14,431			37,485			33,233			(61.50	)%	(56.58	)%
Bank premises and equipment, net	75,663			73,738			64,074			2.61	%	18.09	%
Goodwill and core deposit intangible	212,909			213,612			180,306			(0.33	)%	18.08	%
Other assets	288,272			291,549			262,517			(1.12	)%	9.81	%
Total assets	$	7,210,038		$	7,135,489		$	6,364,912		1.04	%	13.28	%
Liabilities and Stockholders' Equity
Deposits
Demand deposits	$	1,846,593		$	1,778,051		$	1,462,200		3.85	%	26.29	%
Savings and interest checking accounts	2,370,141			2,305,636			2,108,486			2.80	%	12.41	%
Money market	1,089,139			1,119,913			990,160			(2.75	)%	10.00	%
Time certificates of deposit	684,830			711,263			649,620			(3.72	)%	5.42	%
Total deposits	5,990,703			5,914,863			5,210,466			1.28	%	14.97	%
Borrowings
Federal home loan bank borrowings	102,080			104,133			70,080			(1.97	)%	45.66	%
Customer repurchase agreements and other short-term borrowings	133,958			138,449			147,890			(3.24	)%	(9.42	)%
Wholesale repurchase agreements	—			—			50,000			n/a		(100.00	)%
Junior subordinated debentures	73,464			73,520			73,685			(0.08	)%	(0.30	)%
Subordinated debentures	35,000			35,000			65,000			—	%	(46.15	)%
Total borrowings	344,502			351,102			406,655			(1.88	)%	(15.28	)%
Total deposits and borrowings	6,335,205			6,265,965			5,617,121			1.11	%	12.78	%
Other liabilities	103,370			110,321			107,264			(6.30	)%	(3.63	)%
Stockholders' equity



Common stock	260			260			237			—	%	9.70	%
Additional paid in capital	405,486			404,089			311,978			0.35	%	29.97	%
Retained earnings	368,169			355,537			330,444			3.55	%	11.42	%
Accumulated other comprehensive loss, net of tax	(2,452		)	(683		)	(2,132		)	259.00	%	15.01	%
Total stockholders' equity	771,463			759,203			640,527			1.61	%	20.44	%
Total liabilities and stockholders' equity	$	7,210,038		$	7,135,489		$	6,364,912		1.04	%	13.28	%



CONSOLIDATED STATEMENTS OF INCOME
(Unaudited dollars in thousands)
	Three Months Ended
								% Change		% Change
	December 31,		September 30,		December 31,			Dec 2015 vs.		Dec 2015 vs.
	2015		2015		2014			Sept 2015		Dec 2014
Interest income
Interest on federal funds sold and short-term investments	$	137	$	121	$	76		13.22	%	80.26	%
Interest and dividends on securities	5,218		5,486		4,741			(4.89	)%	10.06	%
Interest and fees on loans	54,463		54,557		49,911			(0.17	)%	9.12	%
Interest on loans held for sale	52		64		99			(18.75	)%	(47.47	)%
Total interest income	59,870		60,228		54,827			(0.59	)%	9.20	%
Interest expense
Interest on deposits	2,940		2,951		2,725			(0.37	)%	7.89	%
Interest on borrowings	2,045		2,232		2,282			(8.38	)%	(10.39	)%
Total interest expense	4,985		5,183		5,007			(3.82	)%	(0.44	)%
Net interest income	54,885		55,045		49,820			(0.29	)%	10.17	%
Provision for loan losses	500		800		1,750			(37.50	)%	(71.43	)%
Net interest income after provision for loan losses	54,385		54,245		48,070			0.26	%	13.14	%
Noninterest income
Deposit account fees	4,694		4,754		4,587			(1.26	)%	2.33	%
Interchange and ATM fees	3,911		3,949		3,303			(0.96	)%	18.41	%
Investment management	5,120		4,981		4,887			2.79	%	4.77	%
Mortgage banking income	1,331		1,480		1,004			(10.07	)%	32.57	%
Increase in cash surrender value of life insurance policies	1,007		958		911			5.11	%	10.54	%
Gain on sale of fixed income securities	—		—		121			n/a		(100.00	)%
Gain (loss) on sale of equity securities, net	1		—		(47		)	100.00%		(102.13	)%
Loan level derivative income	1,013		968		1,026			4.65	%	(1.27	)%
Other noninterest income	2,747		2,157		2,681			27.35	%	2.46	%
Total noninterest income	19,824		19,247		18,473			3.00	%	7.31	%
Noninterest expenses
Salaries and employee benefits	26,777		26,685		24,471			0.34	%	9.42	%
Occupancy and equipment expenses	5,511		5,443		5,347			1.25	%	3.07	%
Data processing & facilities management	1,168		1,112		1,156			5.04	%	1.04	%
FDIC assessment	986		1,020		942			(3.33	)%	4.67	%
Merger and acquisition expense	—		—		586			n/a		(100.00	)%
Loss on sale of fixed income securities	—		—		21			n/a		(100.00	)%
Loss on sale of equity securities	91		—		—			100.00%		100.00%
Other noninterest expenses	11,953		12,771		11,841			(6.41	)%	0.95	%
Total noninterest expenses	46,486		47,031		44,364			(1.16	)%	4.78	%
Income before income taxes	27,723		26,461		22,179			4.77	%	25.00	%
Provision for income taxes	8,268		7,867		6,201			5.10	%	33.33	%
Net Income	$	19,455	$	18,594	$	15,978		4.63	%	21.76	%

Basic earnings per share	$	0.74	$	0.71	$	0.67		4.23	%	10.45	%



Diluted earnings per share	$	0.74		$	0.71		$	0.66		4.23	%	12.12	%
Weighted average common shares (basic)	26,238,004			26,200,261			23,968,320
Weighted average common shares (diluted)	26,290,776			26,264,114			24,055,132

Performance ratios
Net interest margin (FTE)	3.34		%	3.39		%	3.42		%
Return on average assets	1.07		%	1.03		%	0.99		%
Return on average common equity	10.03		%	9.75		%	9.93		%

Reconciliation table - non-GAAP financial information
Net income	$	19,455		$	18,594		$	15,978		4.63	%	21.76	%
Noninterest income components
Less - gain on sale of fixed income securities, net of tax	—			—			(72		)
Noninterest expense components
Add - loss on sale of fixed income securities, net of tax	—			—			13
Add - merger & acquisition expenses, net of tax	—			—			404
Other components:
Add - Adjustment for tax effect of previously incurred merger and acquisition expense	—			—			235
Net operating earnings	$	19,455		$	18,594		$	16,558		4.63	%	17.50	%
Diluted earnings per share, on an operating basis	$	0.74		$	0.71		$	0.69		4.23	%	7.25	%



CONSOLIDATED STATEMENTS OF INCOME
(Unaudited dollars in thousands)
	Twelve Months Ended
					% Change
	December 31,		December 31,		Dec 2015 vs.
	2015		2014		Dec 2014

Interest income
Interest on federal funds sold and short-term investments	$	349	$	279	25.09	%
Interest and dividends on securities	20,247		18,754		7.96	%
Interest and fees on loans	214,724		197,021		8.99	%
Interest on loans held for sale	225		405		(44.44	)%
Total interest income	235,545		216,459		8.82	%
Interest expense
Interest on deposits	11,576		11,039		4.86	%
Interest on borrowings	9,041		9,378		(3.59	)%
Total interest expense	20,617		20,417		0.98	%
Net interest income	214,928		196,042		9.63	%
Provision for loan losses	1,500		10,403		(85.58	)%
Net interest income after provision for loan losses	213,428		185,639		14.97	%
Noninterest income
Deposit account fees	18,078		18,065		0.07	%
Interchange and ATM fees	14,728		12,975		13.51	%
Investment management	20,735		19,642		5.56	%
Mortgage banking income	5,163		3,384		52.57	%
Increase in cash surrender value of life insurance policies	3,692		3,128		18.03	%
Gain on life insurance benefits	—		1,964		(100.00	)%
Gain on sale of fixed income securities	798		121		559.50	%
Gain (loss) on sale of equity securities, net	20		91		(78.02	)%
Loan level derivative income	3,830		2,477		54.62	%



Other noninterest income	8,844			8,096			9.24	%
Total noninterest income	75,888			69,943			8.50	%
Noninterest expenses
Salaries and employee benefits	105,068			94,044			11.72	%
Occupancy and equipment expenses	23,020			21,820			5.50	%
Data processing & facilities management	4,631			4,765			(2.81	)%
FDIC assessment	3,979			3,770			5.54	%
Merger and acquisition expense	10,501			1,339			684.24	%
Loss on sale of fixed income securities	1,124			21			5,252.38	%
Loss on sale of equity securities	99			—			100.00%
Loss on termination of derivatives	—			1,122			(100.00	)%
Other noninterest expenses	48,716			44,957			8.36	%
Total noninterest expenses	197,138			171,838			14.72	%
Income before income taxes	92,178			83,744			10.07	%
Provision for income taxes	27,218			23,899			13.89	%
Net Income	$	64,960		$	59,845		8.55	%

Basic earnings per share	$	2.51		$	2.50		0.40	%
Diluted earnings per share	$	2.50		$	2.49		0.40	%
Basic average shares	25,891,382			23,899,562
Diluted average shares	25,959,948			23,993,377

Performance ratios
Net interest margin (FTE)	3.42		%	3.45		%
Return on average assets	0.93		%	0.95		%
Return on average common equity	8.79		%	9.66		%

Reconciliation table - non-GAAP financial information
Net income	$	64,960		$	59,845		8.55	%
Noninterest income components
Less - gain on sale of fixed income securities, net of tax	(473		)	(72		)
Less - gain on life insurance benefits, tax exempt	—			(1,964		)
Noninterest expense components
Add - loss on extinguishment of debt, net of tax	72			—
Add - loss on termination of derivatives, net of tax	—			663
Add - loss on sale of fixed income securities, net of tax	667			13
Add - merger & acquisition expenses, net of tax	6,442			1,105
Add - impairment on acquired facilities, net of tax	65			310
Net operating earnings	$	71,733		$	59,900		19.75	%

Diluted earnings per share, on an operating basis	$	2.76		$	2.50		10.40	%



RECONCILIATION TABLE - NON-GAAP FINANCIAL INFORMATION
(Unaudited dollars in thousands)

	Three Months Ended										Twelve Months Ended
							% Change								% Change
	December 31,		September 30,		December 31,		Dec 2015 vs.		Dec 2015 vs.		December 31,		December 31,		Dec 2015 vs.
	2015		2015		2014		Sept 2015		Dec 2014		2015		2014		Dec 2014

Noninterest income GAAP	$	19,824	$	19,247	$	18,473	3.00	%	7.31	%	$	75,888	$	69,943	8.50	%
Less - gain on sale of fixed income securities	—		—		121		n/a		(100.00	)%	798		121		559.50	%
Less - gain on life insurance benefits	—		—		—		n/a		n/a		—		1,964		(100.00	)%
Total noninterest income as adjusted	$	19,824	$	19,247	$	18,352	3.00	%	8.02	%	$	75,090	$	67,858	10.66	%

Noninterest expense GAAP	$	46,486	$	47,031	$	44,364	(1.16	)%	4.78	%	$	197,138	$	171,838	14.72	%
Less - loss on extinguishment of debt	—		—		—		n/a		n/a		122		—		100.00%
Less - loss on termination of derivatives	—		—		—		n/a		n/a		—		1,122		(100.00	)%
Less - loss on sale of fixed income securities	—		—		21		n/a		(100.00	)%	1,124		21		5,252.38	%
Less - merger and acquisition expenses	—		—		586		n/a		(100.00	)%	10,501		1,339		684.24	%
Less - impairment on acquired facilities	—		—		—		n/a		n/a		109		524		(79.20	)%
Total noninterest expense as adjusted	$	46,486	$	47,031	$	43,757	(1.16	)%	6.24	%	$	185,282	$	168,832	9.74	%



ASSET QUALITY
	Nonperforming Assets At
	December 31,			September 30,			December 31,
	2015			2015			2014

Nonperforming loans
Commercial & industrial loans	$	3,699		$	4,114		$	2,822
Commercial real estate loans	8,160			9,006			7,590
Small business loans	239			159			246
Residential real estate loans	8,795			9,106			8,803
Home equity	6,742			7,142			8,038
Other consumer	55			40			13
Total nonperforming loans	$	27,690		$	29,567		$	27,512
Nonaccrual securities	—			—			3,640
Other real estate owned	2,159			2,532			7,742
Total nonperforming assets	$	29,849		$	32,099		$	38,894

Nonperforming loans/gross loans	0.50		%	0.54		%	0.55		%
Nonperforming assets/total assets	0.41		%	0.45		%	0.61		%
Allowance for loan losses/nonperforming loans	201.61		%	186.71		%	200.28		%
Gross loans/total deposits	92.61		%	92.95		%	95.40		%
Allowance for loan losses/total loans	1.01		%	1.00		%	1.11		%

	Nonperforming Assets Reconciliation for the Three Months Ended
	December 31,			September 30,			December 31,
	2015			2015			2014
Nonperforming assets beginning balance	$	32,099		$	31,274		$	38,557
New to Nonperforming	3,455			8,348			9,287
Loans charged-off	(1,130		)	(1,165		)	(2,325		)
Loans paid-off	(2,965		)	(1,799		)	(4,119		)
Loans transferred to other real estate owned/other assets	—			(539		)	(209		)
Loans restored to performing status	(1,248		)	(1,409		)	(1,230		)
New to other real estate owned	—			1,151			209
Sale of other real estate owned	(270		)	(3,460		)	(3,206		)
Net capital improvements to other real estate owned	(2		)	196			1,483
Other	(90		)	(498		)	447
Nonperforming assets ending balance	$	29,849		$	32,099		$	38,894



	Net Charge-Offs
	For the Three Months Ended									For the Twelve Months Ended
	December 31,			September 30,			December 31,			December 31,			December 31,
	2015			2015			2014			2015			2014

Net charge-offs (recoveries)
Commercial & industrial loans	$	(211	)	$	475		$	91		$	417		$	1,635
Commercial real estate loans	27			(124		)	1,099			(743		)	5,050
Small business loans	(6		)	(55		)	29			3			330
Residential real estate loans	(38		)	34			117			152			402
Home equity	(71		)	119			154			354			501
Other consumer	179			141			165			592			624
Total net charge-offs (recoveries)	$	(120	)	$	590		$	1,655		$	775		$	8,542

Net charge-offs (recoveries) to average loans (annualized)	(0.01		)%	0.04		%	0.13		%	0.01		%	0.18		%




	Troubled Debt Restructurings At
	December 31,			September 30,			December 31,
	2015			2015			2014
Troubled debt restructurings on accrual status	$	32,849		$	37,477		$	38,382
Troubled debt restructurings on nonaccrual status	5,225			5,201			5,248
Total troubled debt restructurings	$	38,074		$	42,678		$	43,630

FINANCIAL RATIOS & CAPITAL ADEQUACY
	December 31,			September 30,			December 31,
	2015			2015			2014
Book value per common share	$	29.40		$	28.96		$	26.69
Tangible book value per share	$	21.29		$	20.81		$	19.18
Tangible common capital/tangible assets	7.98		%	7.88		%	7.44		%

Common equity tier 1 capital ratio (1)	10.46		%	10.31		%	n/a
Tier one leverage capital ratio (1)	9.32		%	9.21		%	8.84		%
(1) Estimated number for December 31, 2015.



INDEPENDENT BANK CORP. SUPPLEMENTAL FINANCIAL INFORMATION

(Unaudited - dollars in thousands)	Three Months Ended
	December 31, 2015						September 30, 2015						December 31, 2014
			Interest						Interest						Interest
	Average		Earned/		Yield/		Average		Earned/		Yield/		Average		Earned/		Yield/
	Balance		Paid		Rate		Balance		Paid		Rate		Balance		Paid		Rate
Interest-earning assets
Interest-earning deposits with banks, federal funds sold, and short term investments	$	214,191	$	137	0.25	%	$	192,205	$	121	0.25	%	$	120,647	$	76	0.25	%
Securities
Securities - trading	394		—		—	%	479		—		—	%	—		—		—
Securities - taxable investments	815,778		5,186		2.52	%	802,146		5,455		2.70	%	726,417		4,708		2.57	%
Securities - nontaxable investments (1)	4,891		49		3.97	%	4,895		48		3.89	%	5,670		51		3.57	%
Total securities	821,063		5,235		2.53	%	807,520		5,503		2.70	%	732,087		4,759		2.58	%
Loans held for sale	9,422		52		2.19	%	10,196		64		2.49	%	11,972		99		3.28	%
Loans
Commercial and industrial	844,460		8,254		3.88	%	871,976		8,608		3.92	%	845,113		8,207		3.85	%
Commercial real estate (1)	2,641,570		26,872		4.04	%	2,649,676		27,449		4.11	%	2,358,236		24,689		4.15	%
Commercial construction	355,749		3,676		4.10	%	290,052		3,057		4.18	%	259,218		2,895		4.43	%
Small business	93,521		1,272		5.40	%	91,331		1,237		5.37	%	82,417		1,143		5.50	%
Total commercial	3,935,300		40,074		4.04	%	3,903,035		40,351		4.10	%	3,544,984		36,934		4.13	%
Residential real estate	645,448		6,151		3.78	%	650,039		6,490		3.96	%	534,527		5,465		4.06	%
Home equity	919,531		8,127		3.51	%	896,257		7,690		3.40	%	859,994		7,507		3.46	%
Total consumer real estate	1,564,979		14,278		3.62	%	1,546,296		14,180		3.64	%	1,394,521		12,972		3.69	%
Other consumer	15,783		470		11.81	%	17,033		383		8.92	%	16,534		387		9.29	%
Total loans	5,516,062		54,822		3.94	%	5,466,364		54,914		3.99	%	4,956,039		50,293		4.03	%
Total interest-earning assets	$	6,560,738	$	60,246	3.64	%	$	6,476,285	$	60,602	3.71	%	$	5,820,745	$	55,227	3.76	%
Cash and due from banks	117,285						116,975						120,228
Federal Home Loan Bank stock	14,431						37,485						33,233
Other assets	521,481						512,921						435,254
Total assets	$	7,213,935					$	7,143,666					$	6,409,460
Interest-bearing liabilities
Deposits
Savings and interest checking accounts	$	2,324,827	$	915	0.16	%	$	2,274,861	$	897	0.16	%	$	2,129,340	$	871	0.16	%
Money market	1,127,013		718		0.25	%	1,120,290		742		0.26	%	1,010,401		653		0.26	%
Time deposits	694,641		1,307		0.75	%	717,225		1,312		0.73	%	658,533		1,201		0.72	%
Total interest-bearing deposits	4,146,481		2,940		0.28	%	4,112,376		2,951		0.28	%	3,798,274		2,725		0.28	%
Borrowings
Federal Home Loan Bank borrowings	104,023		571		2.18	%	107,489		571		2.11	%	60,974		456		2.97	%
Customer repurchase agreements and other short-term borrowings	146,287		49		0.13	%	142,704		48		0.13	%	156,041		52		0.13	%
Wholesale repurchase agreements	—		—		—	%	29,348		162		2.19	%	50,000		292		2.32	%
Junior subordinated debentures	73,493		1,016		5.48	%	73,549		1,014		5.47	%	73,712		1,012		5.45	%
Subordinated debentures	35,000		409		4.64	%	35,000		437		4.95	%	47,120		470		3.96	%
Total borrowings	358,803		2,045		2.26	%	388,090		2,232		2.28	%	387,847		2,282		2.33	%
Total interest-bearing liabilities	$	4,505,284	$	4,985	0.44	%	$	4,500,466	$	5,183	0.46	%	$	4,186,121	$	5,007	0.47	%
Demand deposits	1,833,133						1,789,288						1,493,464
Other liabilities	106,226						97,475						91,726
Total liabilities	$	6,444,643					$	6,387,229					$	5,771,311
Stockholders' equity	769,292						756,437						638,149



Total liabilities and stockholders' equity	$	7,213,935					$	7,143,666					$	6,409,460

Net interest income			$	55,261					$	55,419					$	50,220

Interest rate spread (2)					3.20	%					3.25	%					3.29	%

Net interest margin (3)					3.34	%					3.39	%					3.42	%

Supplemental Information
Total deposits, including demand deposits	$	5,979,614	$	2,940			$	5,901,664	$	2,951			$	5,291,738	$	2,725
Cost of total deposits					0.20	%					0.20	%					0.20	%
Total funding liabilities, including demand deposits	$	6,338,417	$	4,985			$	6,289,754	$	5,183			$	5,679,585	$	5,007
Cost of total funding liabilities					0.31	%					0.33	%					0.35	%


(1) The total amount of adjustment to present interest income and yield on a fully tax-equivalent basis is $376,000, $374,000, and $400,000 for the three months ended December 31, 2015, September 30, 2015, and December 31, 2014, respectively.
(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.
(3) Net interest margin represents annualized net interest income as a percentage of average interest-earning assets.



	Twelve Months Ended
	December 31, 2015						December 31, 2014
			Interest						Interest
	Average		Earned/		Yield/		Average		Earned/		Yield/
	Balance		Paid		Rate		Balance		Paid		Rate
Interest-earning assets
Interest earning deposits with banks, federal funds sold, and short term investments	$	138,694	$	349	0.25	%	$	111,764	$	279	0.25	%
Securities
Securities - trading	389		—		—	%	—		—		-
Securities - taxable investments	787,781		20,120		2.55	%	713,969		18,610		2.61	%
Securities - nontaxable investments (1)	5,101		195		3.82	%	5,944		233		3.92	%
Total securities	793,271		20,315		2.56	%	719,913		18,843		2.62	%
Loans held for sale	9,244		225		2.43	%	11,125		405		3.64	%
Loans
Commercial and industrial	858,043		33,569		3.91	%	837,618		32,442		3.87	%
Commercial real estate (1)	2,590,482		106,801		4.12	%	2,306,901		97,971		4.25	%
Commercial construction	304,545		12,838		4.22	%	249,389		10,682		4.28	%
Small business	90,081		4,900		5.44	%	79,736		4,431		5.56	%
Total commercial	3,843,151		158,108		4.11	%	3,473,644		145,526		4.19	%
Residential real estate	641,218		25,603		3.99	%	538,171		21,462		3.99	%
Home equity	892,920		30,777		3.45	%	841,710		29,568		3.51	%
Total consumer real estate	1,534,138		56,380		3.68	%	1,379,881		51,030		3.70	%
Other consumer	17,175		1,664		9.69	%	17,672		1,732		9.80	%
Total loans	5,394,464		216,152		4.01	%	4,871,197		198,288		4.07	%
Total interest-earning assets	$	6,335,673	$	237,041	3.74	%	$	5,713,999	$	217,815	3.81	%
Cash and due from banks	110,202						113,394
Federal Home Loan Bank stock	31,080						36,467
Other assets	513,495						422,598
Total assets	$	6,990,450					$	6,286,458
Interest-bearing liabilities
Deposits
Savings and interest checking accounts	$	2,242,245	$	3,556	0.16	%	$	2,087,973	$	3,573	0.17	%
Money market	1,102,892		2,878		0.26	%	972,664		2,487		0.26	%
Time deposits	708,094		5,142		0.73	%	698,070		4,979		0.71	%
Total interest-bearing deposits	4,053,231		11,576		0.29	%	3,758,707		11,039		0.29	%
Borrowings
Federal Home Loan Bank borrowings	106,686		2,208		2.07	%	100,631		2,784		2.77	%
Customer repurchase agreements and other short-term borrowings	138,363		210		0.15	%	144,358		200		0.14	%
Wholesale repurchase agreements	32,192		746		2.32	%	50,000		1,158		2.32	%
Junior subordinated debentures	73,576		4,026		5.47	%	73,797		4,008		5.43	%
Subordinated debentures	39,110		1,851		4.73	%	34,315		1,228		3.58	%
Total borrowings	389,927		9,041		2.32	%	403,101		9,378		2.33	%
Total interest-bearing liabilities	$	4,443,158	$	20,617	0.46	%	$	4,161,808	$	20,417	0.49	%
Demand deposits	1,704,253						1,422,510
Other liabilities	103,839						82,310
Total liabilities	$	6,251,250					$	5,666,628



Stockholders' equity	739,200						619,830
Total liabilities and stockholders' equity	$	6,990,450					$	6,286,458

Net interest income			$	216,424					$	197,398

Interest rate spread (2)					3.28	%					3.32	%

Net interest margin (3)					3.42	%					3.45	%

Supplemental Information
Total deposits, including demand deposits	$	5,757,484	$	11,576			$	5,181,217	$	11,039
Cost of total deposits					0.20	%					0.21	%
Total funding liabilities, including demand deposits	$	6,147,411	$	20,617			$	5,584,318	$	20,417
Cost of total funding liabilities					0.34	%					0.37	%


(1) The total amount of adjustment to present interest income and yield on a fully tax-equivalent basis is $1.5 million and $1.4 million for the nine months ended December 31, 2015 and 2014, respectively.
(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.
(3) Net interest margin represents annualized net interest income as a percentage of average interest-earning assets.

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

INDEPENDENT BANK CORP - FORM 8-K - EX-99.1 - Q4 2015 EARNINGS PRESS RELEASE - January 21, 2016

Attached files

INDEPENDENT BANK CORP Reports