Independent Posts Decline

November 3, 2006
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IONIA — Independent Bank Corp. reported third quarter net income of $10 million, or 43 cents per share, for the third quarter, down from $12 million, or 51 cents per share, from the third quarter of 2005.

Independent's net income for the first nine months of this year totaled $32.9 million, or $1.41 per diluted share, compared with net income of $35.5 million, or $1.49 per share, for the first nine months of 2005.

The company said the decline from the year-ago quarter was due to several factors:

  • Net interest income decreased by $2.3 million, as the benefits of loan growth were more than offset by a decline in net interest margin.
  • The provision for loan losses increased by $3 million.
  • Net gains on sales of real estate mortgage loans declined by $400,000.

The company noted that those items were partially offset by a $2.9 million decline in non-interest expenses.

President and CEO Michael Magee said the bank closed the quarter facing many of the same challenges it confronted in the second quarter of 2006.

"Our third quarter results were again adversely impacted by the flat yield curve and a very competitive pricing climate for both loans and deposits," Magee explained. "This resulted in additional compression in our net interest margin. Much of this margin compression continues to take place at Mepco Insurance Premium Financing Inc."

Magee noted that Independent Bank CFO Rob Shuster, who has significant experience in turnaround strategies in the financial services industry, has taken on additional responsibilities as CEO of Mepco to help improve its operations and profitability.

Magee said that despite the challenges, the company remains focused on expanding and growing its business.

"We have added nearly 6,500 new loan and deposit relationships through the first three quarters of this year," he added. "These results have been achieved by the dedication of our employees to provide exceptional service to our customers."    

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