IBC net income drops sharply
IONIA — Independent Bank Corp. reported a 2008 fourth quarter and full-year net loss applicable to common stock of $86.5 million, or $3.80 per share, and $88.2 million, or $3.88 per share respectively. Independent posted net income of $2.3 million, or 10 cents per diluted share for the fourth quarter of 2007.
The company indicated that fourth quarter and full-year results were primarily due to:
- Increases in the provision for loan losses, which was $24.8 million and $9.4 million in the fourth quarters of 2008 and 2007, respectively. Additional factors include in addition to:
- A non-cash charge of $50 million for goodwill impairment
- A non-cash charge of $26.8 million, or $1.18 per share
- A non-cash charge of $4.3 million, or $0.12 per share, for impairment of capitalized mortgage loan servicing rights.
- Securities losses of $6.9 million, or 20 cents per share after tax, for the fourth quarter and $15.0 million, or 43 cents per share after tax, for the full year.
The above items total $3.42 per share in the fourth quarter and $3.65 per share for the full year
“In addition, credit costs remained elevated as we continued to confront this unprecedented economic environment,” stated President and CEO Michael M. Magee. “Since we cannot control the external environment, our efforts remain focused on controlling internal operations, including improving asset quality, containing credit costs and reducing non-performing assets. Moreover, executive officer bonuses for 2008 were eliminated and salaries for all executive and senior officers were frozen at 2008 levels for 2009, as we continue to weather this time of uncertainty.”
On the upside, pre-tax, pre-loan loss provision core operating earnings remain strong and improved in 2008 over 2007. Furthermore, the company remains well capitalized.
Total assets were $2.96 billion at Dec. 31, 2008, compared to $3.25 billion at Dec. 31, 2007. Loans, excluding loans held for sale, were $2.46 billion at Dec. 31, 2008, compared to $2.52 billion at year end 2007. Deposits totaled $2.07 billion at Dec. 31, 2008, a decrease of $438.6 million from year end 2007. The decrease in deposits primarily reflects a $333.8 million decline in brokered certificates of deposit, according to the company.