Bank Performance 'Not Acceptable'
IONIA — Independent Bank Corp. reported that fourth quarter income from continuing operations was $1 million, or 4 cents per diluted share, versus $11.2 million, or 47 cents per share, a year earlier.
Income from continuing operations for all of 2006 totaled $33.8 million, or $1.45 per diluted share. In 2005, full-year income from continuing operations was $45.7 million, or $1.92 per share.
The company attributed declines in comparative quarterly and yearly income from continuing operations last year to several factors, including a decrease in net interest income, substantially higher provisions for loan losses, goodwill impairment charges, and a $2.4 million loss in the fourth quarter associated with the sale of its subsidiary, Mepco Insurance Premium Financing.
According to the company, the growth in consumer and real estate mortgage non-performing loans primarily reflects weak economic conditions in Michigan that have resulted in increased delinquencies, bankruptcies and foreclosures.
President and CEO Michael Magee said that like other banks, Independent has been impacted by the flat yield curve and a very competitive pricing climate for both loans and deposits.
“… The bottom line is that our performance in 2006 was not acceptable,” McGee stated. “We have taken several actions to address the specific issues that adversely impacted our performance in 2006. These include the sale of Mepco’s insurance premium finance business, as well as an in-depth review of our lending processes and procedures to ensure we are doing everything possible to effectively manage asset quality.”
Loans, excluding loans held for sale, increased to $2.48 billion at Dec. 31, 2006, up from $2.37 billion at Dec. 31, 2005. The increase reflects growth in commercial, real estate mortgage and installment loans. Deposits totaled $2.6 billion at year’s end, representing an increase of $128.6 million over year-end 2005.
Total assets were $3.43 billion at Dec. 31, 2006, slightly higher than the $3.36 billion in assts the company reported at the end of 2005.