Independent Bank Profits Jump
IONIA — Independent Bank Corp. had a record first quarter 2005 with net income of $11.3 million, up 24 percent from $8.4 million in 2004. The company attributed the profit spike to increases in net interest income, service charges on deposits and real estate mortgage loan servicing fees.
Michigan is currently facing serious economic challenges; however, we remain optimistic that 2005 will be an excellent year for Independent Bank Corp.," stated President and CEO Michael M. Magee.
Magee said the company expects a range of $2.10 to $2.20 for full year diluted earnings per share.
The company's tax equivalent net interest income totaled $35 million during the first quarter of 2005, which represents an $8.3 million, or 31 percent, increase over 2004.
Annualized return on average equity and annualized return on average assets were 19.38 percent and 1.47 percent, respectively, in the first quarter of 2005 compared to 20.34 percent and 1.44 percent, respectively, in 2004.
The increase in average interest-earning assets was due to acquisitions as well as growth in commercial loans, finance receivables and investment securities.
The net interest margin was 4.92 percent during the first quarter of 2005 compared to 4.89 percent in 2004. This increase was due to a rise in the tax equivalent yield on average interest-earning assets to 6.92 percent in the first quarter of 2005 from 6.77 percent in the first quarter of 2004.
Service charges on deposits totaled $4 million in the first quarter of 2005, up 11 percent from 2004.
The increase in deposit-related service fees resulted primarily from the continued growth of checking accounts as well as the acquisitions of Midwest Guaranty Bancorp Inc. (acquired May 31, 2004) and North Bancorp Inc. (acquired July 1, 2004).
Gains on the sale of real estate mortgage loans were $1.4 million and $1.1 million in the first quarters of 2005 and 2004, respectively. Real estate mortgage loan sales totaled $87.9 million in the first quarter of 2005 compared to $68.7 million in the first quarter of 2004.
Real estate mortgage loans originated totaled $147 million in the first quarter of 2005 compared to $159.4 million in the comparable quarter of 2004, and loans held for sale were $41.7 million at March 31, compared to $38.8 million at Dec. 31.
Securities losses totaled $32,000 in the first quarter of 2005 compared to securities gains of $500,000 in the first quarter of 2004.