Independent Bank Corp. Records $1.9 Million

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The two investments for which the impairment charge has beenrecognized are trust preferred pooled securities issued by banksand insurers which were rated investment grade (BBB) at inception,currently remain rated investment grade (BBB), and are classifiedas available for sale. The Company has not incurred any loss oneither security, and the Company has the ability and intention tocontinue to hold them until a recovery of fair value, which may beuntil maturity.
There are ninety-three (93) issuers in one of the trust preferredpooled securities, and seventy-three (73) issuers in the other. Noissuer in either of the two trust preferred pooled securities hasissued more than five percent (5%) of the aggregate amount of thepool. Two (2) of the ninety-three (93) pooled issuers for onesecurity and one (1) of the seventy-three (73) pooled issuers forthe other have invoked their original contractual right to deferinterest payments. There have been no defaults in either security,and the tranche of the securities held by the Company continues topay as agreed.
As previously announced, as of June 30, 2008 the Company hadapproximately $3.4 billion in total assets. The $1.9 millionnon-cash impairment charge amounts to less than one-half of onepercent (0.50%) of the Company's $488.6 million overall securitiesportfolio as of June 30, 2008.
On Tuesday, July 22, 2008 KPMG LLP, the Company's independentregistered public accounting firm, advised the Company that it wasKPMG's opinion that the accounting guidance known as EITF 99-20might require the Company to recognize, as of June 30, 2008, anon-cash securities impairment charge of approximately $1.9 millionin the aggregate, comprised of a $1.45 million impairment for onesecurity with a par value of $3.5 million and a $400,000 impairmentfor the another security with a par value of $1 million. Althoughthe analysis originally conducted by the Company did not suggestthat an impairment charge as of June 30, 2008 was required,Management has - after further consultation with KPMG -- recognizedthe impairment charge.
The recognition of this impairment charge has only a minor impacton the Company's equity position as of June 30, 2008, decreasingequity from $301.1 million to $301.0 million, because thesecurities had already been marked to market. Recognition of theimpairment charge as of June 30, 2008, however, decreases netincome for the quarter ending June 30, 2008 from the previouslyannounced $8.1 million and diluted earnings per share of $0.50 tonet income of $6.8 million and diluted earnings per share of $0.42.The financial statements which accompany this press release setforth any other impacts arising from the recognition of thisnon-cash impairment charge.
As a consequence of the $.08 per share impact of this non-cashimpairment charge, the Company has revised the operating earningsguidance provided for the remainder of 2008 by Management duringthe earnings call on Friday July 18, 2008 from a range of $2.14 to$2.18 per share to a range of $2.06 to $2.10 per share. Managementdoes not believe that the recognition of this non-cash impairmentcharge has any other implications for the Company's businessfundamentals or its outlook.
Independent Bank Corp.'s sole bank subsidiary, Rockland TrustCompany, currently has approximately $3.4 billion in assets.Rockland Trust offers commercial banking, retail banking,investment management, and insurance sales services from: 63 retailbranches, 9 commercial lending centers, and 5 mortgage originationoffices located throughout southeastern Massachusetts and on CapeCod; and, from 4 investment management offices located throughoutsoutheastern Massachusetts, on Cape Cod, and in Rhode Island.
This press release contains certain ``forward-looking statements''with respect to the financial condition, results of operations andbusiness of the Company. Actual results may differ from thosecontemplated by these statements. The Company wishes to cautionreaders not to place undue reliance on any forward-lookingstatements. The Company disclaims any intent or obligation toupdate publicly any such forward-looking statements, whether inresponse to new information, future events or otherwise.
This press release contains financial information determined bymethods other than in accordance with accounting principlesgenerally accepted in the United States of America (``GAAP''). TheCompany's management uses these non-GAAP measures in its analysisof the Company's performance. These non-GAAP measures may excludesignificant gains or losses that are unusual in nature, such assecurities losses. Because these gains and losses and their impacton the Company's performance are difficult to predict, managementbelieves that presentations of adjusted financial measuresexcluding the impact of these gains and losses provide usefulinformation that is essential to a proper understanding of theoperating results of the Company. These disclosures should not beviewed as a substitute for operating results determined inaccordance with GAAP, nor are they necessarily comparable tonon-GAAP performance measures which may be presented by othercompanies.