<PAGE>
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q/A
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended March 31, 2000
Commission File Number: 1-9047
Independent Bank Corp.
(Exact name of registrant as specified in its charter)
Massachusetts 04-2870273
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
288 Union Street, Rockland, Massachusetts 02370
(Address of principal executive offices, including zip code)
(781) 878-6100
(Registrant's telephone number, including area code)
Indicate by check mark whether the registrant (1) has filed all
reports required to be filed by Section 13 or 15(d) of the Securities Exchange
Act of 1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days.
Yes X No
As of May 1, 2000 there were 14,230,071 shares of the issuer's common
stock outstanding.
<PAGE>
Note: This Form 10-Q/A for the quarterly period ended March 31, 2000 is being
filed solely to amend and restate the note to the unaudited financial statements
regarding "Corporation -Obligated Mandatorily Redeemable Trust Preferred
Securities" in Item 1, Financial Statements (unaudited), from the Form 10-Q for
the quarterly period ended March 31, 2000 filed with the Securities Exchange
Commission on May 12, 2000.
<PAGE>
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements (Unaudited)
Consolidated Balance Sheets - March 31, 2000 and
December 31, 1999
Consolidated Statements of Income - Three months ended March 31,
2000 and 1999
Consolidated Statements of Cash Flows - Three months ended
March 31, 2000 and 1999
Notes to Consolidated Financial Statements - March 31, 2000
Item 2. Management's Discussion and Analysis of Financial Condition and Results
of Operations
Item 3. Quantitative and Qualitative Disclosure About Market Risk
PART II. OTHER INFORMATION
Item 1. Legal Proceedings
Item 2. Changes in Securities
Item 3. Defaults Upon Senior Securities
Item 4. Submission of Matters to a Vote of Security Holders
Item 5. Other Information
Item 6. Exhibits and Reports on Form 8-K
<PAGE>
PART 1 FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
INDEPENDENT BANK CORP.
CONSOLIDATED BALANCE SHEETS
(UNAUDITED - IN THOUSANDS)
<TABLE>
<CAPTION>
MARCH 31, DECEMBER 31,
2000 1999
---------------------------------
<S> <C> <C>
ASSETS
Cash and Due From Banks $49,168 $48,949
Federal Funds Sold 15,002 8,719
Trading Assets 469 486
Securities Held To Maturity 222,885 229,043
Securities Available For Sale 229,233 201,614
Federal Home Loan Bank Stock 17,036 17,036
Loans, Net of Unearned Discount 1,024,229 1,028,510
Less: Reserve for Possible Loan Losses (15,263) (14,958)
-----------------------------------------------------------------------------------------------------------------
Net Loans 1,008,966 1,013,552
-----------------------------------------------------------------------------------------------------------------
Bank Premises and Equipment 14,155 14,268
Other Assets 62,561 56,389
-----------------------------------------------------------------------------------------------------------------
TOTAL ASSETS $1,619,475 $1,590,056
=================================================================================================================
LIABILITIES
Deposits
Demand Deposits $233,937 $226,044
Savings and Interest Checking Accounts 297,245 262,516
Money Market and Super Interest Checking Accounts 110,800 107,624
Time Certificates of Deposit over $100,000 102,556 113,632
Other Time Deposits 325,877 351,790
-----------------------------------------------------------------------------------------------------------------
Total Deposits 1,070,415 1,081,806
-----------------------------------------------------------------------------------------------------------------
Federal Funds Purchased and Assets Sold Under Repurchase Agreements 114,132 93,366
Federal Home Loan Bank Borrowings 266,836 256,224
Treasury Tax and Loan Notes 667 9,877
Other Liabilities 14,863 21,904
-----------------------------------------------------------------------------------------------------------------
Total Liabilities 1,466,913 1,463,177
-----------------------------------------------------------------------------------------------------------------
Corporation-obligated mandatorily redeemable trust preferred securities of
subsidiary trusts holding solely junior subordinated debentures of the 51,325 28,750
Corporation
STOCKHOLDERS' EQUITY
Common Stock, $.01 par value Authorized: 30,000,000 Shares
Outstanding: 14,863,821 Shares at March 31, 2000
and 14,863,821 at December 31, 1999 149 149
Treasury Stock: 633,750 Shares at March 31, 2000
and 684,463 Shares at December 31, 1999 (9,886) (10,678)
Surplus 44,387 44,950
Retained Earnings 70,354 67,547
Accumulated other Comprehensive Income (3,767) (3,839)
-----------------------------------------------------------------------------------------------------------------
Total Stockholders' Equity 101,237 98,129
-----------------------------------------------------------------------------------------------------------------
TOTAL LIABILITIES, MINORITY INTEREST & STOCKHOLDERS' EQUITY $1,619,475 $1,590,056
=================================================================================================================
</TABLE>
<PAGE>
INDEPENDENT BANK CORP.
CONSOLIDATED STATEMENTS OF INCOME
(UNAUDITED - IN THOUSANDS)
<TABLE>
<CAPTION>
THREE MONTHS ENDED
MARCH 31, MARCH 31,
2000 1999
----------------------------------------------------------------------------------------------------
<S> <C> <C>
INTEREST INCOME
Interest on Loans $21,266 $19,556
Interest and Dividends on Securities 7,936 7,886
Interest on Federal Funds Sold
And Repurchase Agreements 85 165
Interest on Interest Bearing Deposits 1 -
----------------------------------------------------------------------------------------------------
Total Interest Income 29,288 27,607
----------------------------------------------------------------------------------------------------
INTEREST EXPENSE
Interest on Deposits 7,610 7,472
Interest on Borrowed Funds 5,140 5,273
----------------------------------------------------------------------------------------------------
Total Interest Expense 12,750 12,745
----------------------------------------------------------------------------------------------------
Net Interest Income 16,538 14,862
----------------------------------------------------------------------------------------------------
PROVISION FOR POSSIBLE LOAN LOSSES 717 981
----------------------------------------------------------------------------------------------------
Net Interest Income After Provision
For Possible Loan Losses 15,821 13,881
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NON-INTEREST INCOME
Service Charges on Deposit Accounts 1,385 1,271
Trust and Investment Services Income 1,133 917
Mortgage Banking Income 313 501
Other Non-Interest Income 802 736
----------------------------------------------------------------------------------------------------
Total Non-Interest Income 3,633 3,425
----------------------------------------------------------------------------------------------------
NON-INTEREST EXPENSES
Salaries and Employee Benefits 6,321 5,662
Occupancy Expenses 1,003 961
Equipment Expenses 907 767
Other Non-Interest Expenses 3,996 3,719
----------------------------------------------------------------------------------------------------
Total Non-Interest Expenses 12,227 11,109
----------------------------------------------------------------------------------------------------
Minority Interest 1,149 667
INCOME BEFORE INCOME TAXES 6,078 5,530
PROVISION FOR INCOME TAXES 1,847 1,684
----------------------------------------------------------------------------------------------------
NET INCOME $4,231 $3,846
====================================================================================================
BASIC EARNINGS PER SHARE $0.30 $0.27
====================================================================================================
DILUTED EARNINGS PER SHARE $0.30 $0.27
====================================================================================================
Weighted average common shares (Basic) 14,215,268 14,312,093
Common stock equivalents 76,053 169,506
----------------------------------------------------------------------------------------------------
Weighted average common shares (Diluted) 14,291,321 14,481,599
====================================================================================================
</TABLE>
<PAGE>
INDEPENDENT BANK CORP.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED - IN THOUSANDS)
<TABLE>
<CAPTION>
THREE MONTHS ENDED MARCH 31,
2000 1999
-------------------------------------------
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net Income $4,231 $3,846
ADJUSTMENTS TO RECONCILE NET INCOME TO
NET CASH PROVIDED FROM OPERATING ACTIVITIES:
Depreciation and amortization 1,078 1,270
Provision for loan losses 717 981
Loans originated for resale (5,767) (16,793)
Proceeds from mortgage loan sales 5,722 16,730
Loss on sale of mortgages 45 63
Gain on mortgage servicing rights (62) (97)
Changes in assets and liabilities:
Decrease / (Increase) in other assets (7,393) (1,100)
(Decrease) / Increase in other liabilities (6,497) 4,063
-------------------------------------------------------------------------------------------------------------------------------
TOTAL ADJUSTMENTS (12,157) 5,117
-------------------------------------------------------------------------------------------------------------------------------
NET CASH (USED IN)PROVIDED FROM OPERATING ACTIVITIES (7,926) 8,963
-------------------------------------------------------------------------------------------------------------------------------
CASH FLOWS FROM INVESTING ACTIVITIES:
Proceeds from maturities of Investment Securities 18,396 36,108
Purchase of Investment Securities (40,497) (22,874)
Net (Increase) / Decrease in Loans 3,869 (33,005)
Investment in Bank Premises and Equipment (791) (1,055)
-------------------------------------------------------------------------------------------------------------------------------
NET CASH USED IN INVESTING ACTIVITIES (19,023) (20,826)
-------------------------------------------------------------------------------------------------------------------------------
CASH FLOWS FROM FINANCING ACTIVITIES:
Net decrease in Deposits (11,391) (9,884)
Net increase / (decrease) in Federal Funds Purchased
and Assets Sold Under Repurchase Agreements 20,766 (1,564)
Net increase / (decrease) in FHLB Borrowings 10,612 (2,500)
Net increase / (decrease) in TT&L Notes (9,210) 1,084
Issuance of corporation-obligated mandatorily redeemable trust preferred
securities of subsidiary trusts holding solely junior subordinated
debentures of the Corporation 23,858 -
Dividends Paid (1,413) (1,315)
Purchase of Treasury Shares - (4,787)
Proceeds from stock issuance 229 98
-------------------------------------------------------------------------------------------------------------------------------
NET CASH PROVIDED FROM (USED IN) FINANCING ACTIVITIES 33,451 (18,868)
-------------------------------------------------------------------------------------------------------------------------------
NET DECREASE IN CASH AND CASH EQUIVALENTS 6,502 (30,731)
CASH AND CASH EQUIVALENTS AT THE BEGINNING OF THE YEAR 57,668 86,198
===============================================================================================================================
CASH AND CASH EQUIVALENTS AS OF MARCH 31, $64,170 $55,467
===============================================================================================================================
</TABLE>
<PAGE>
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
BASIS OF PRESENTATION
Independent Bank Corp. (the "Company") is a state chartered, federally
registered bank holding company headquartered in Rockland, Massachusetts. The
Company is the sole stockholder of Rockland Trust Company ("Rockland" or "the
Bank"), a Massachusetts trust company chartered in 1907. The accompanying
unaudited consolidated financial statements have been prepared in accordance
with generally accepted accounting principles for interim financial information
and with the instructions to Form 10-Q and Article 10 of Regulation S-X.
Accordingly, they do not include all of the information and footnotes required
by generally accepted accounting principles for complete financial statements.
In the opinion of management, all adjustments considered necessary for a fair
presentation of the financial statements, primarily consisting of normal
recurring adjustments, have been included. Operating results for the three month
period ended March 31, 2000 are not necessarily indicative of the results that
may be expected for the year ended December 31, 2000 or any other interim
period. For further information, refer to the consolidated financial statements
and footnotes thereto included in the Company's annual report on Form 10-K for
the year ended December 31, 1999.
ACQUISITION
On September 27, 1999, the Company and the Bank, entered into a purchase and
assumption agreement with Fleet Financial Group to acquire 12 Massachusetts
branches totaling $269 million in deposits and $37 million in consumer and SBA
loans. In addition, the Company will purchase approximately $100 million of
commercial real estate loans at par from BankBoston's Small Business Banking
Developmental Real Estate portfolio. The acquisitions result from the
divestiture of Fleet branches after its merger with BankBoston. This transaction
has received regulatory approval.
These branches will continue to operate as Fleet offices until they are
converted to Rockland Trust in late summer of 2000. All current Fleet employees
will be retained by Rockland Trust, and a special notification will be sent to
customers prior to the conversion.
CORPORATION-OBLIGATED MANDATORILY REDEEMABLE TRUST PREFFERED SECURITIES
In the second quarter of 1997, Independent Capital Trust I (the "Trust
I") was formed for the purpose of issuing trust preferred securities (the "Trust
Preferred Securities") and investing the proceeds of the sale of these
securities in junior subordinated debentures issued by the Company. A total of
$28.75 million of 9.28% Trust Preferred Securities were issued and are scheduled
to mature in 2027, callable at the option of the Company after May 19, 2002.
Distributions on these securities are payable quarterly in arrears on the last
day of March, June, September and December, such distributions can be deferred
at the option of the Company for up to five years. The Trust Preferred
Securities can be prepaid in whole or in part on or after May 19, 2002 at a
redemption price equal to $25 per Trust Preferred Security plus accumulated but
unpaid distributions thereon to the date of the redemption.
<PAGE>
In the first quarter of 2000, Independent Capital Trust II (the "Trust
II") was formed for the purpose of issuing trust preferred securities (the
"Trust Preferred Securities") and investing the proceeds of the sale of these
securities in junior subordinated debentures issued by the Company. A total of
$25.0 million of 11.00% Trust Preferred Securities were issued and are scheduled
to mature in 2030, callable at the option of the company after January 31, 2002.
Distributions on these securities are payable quarterly in arrears on the last
day of March, June, September and December, such distributions can be deferred
at the option of the company for up to five years. The Trust Preferred
Securities can be prepaid in whole or in part on or after January 31, 2002 at a
redemption price equal to $25 per Trust Preferred Security plus accumulated but
unpaid distributions thereon to the date of the redemption.
The Trust Preferred Securities are presented in the consolidated
balance sheets of the Company entitled "Corporation-Obligated Mandatorily
Redeemable Trust Preferred Securities of Subsidiary Trust Holding Solely Junior
Subordinated Debentures of the Corporation". The Company records distributions
payable on the Trust Preferred Securities as minority interest expense in its
consolidated statements of income.
The Company will unconditionally guarantee all of the Trusts'
obligations under the Trust Preferred Securities
RECENT ACCOUNTING DEVELOPMENTS
In June 1998, the Financial Accounting Standards Board (FASB) issued Statement
of Financial Accounting Standards (SFAS) No. 133, "Accounting for Derivative
Instruments and Hedging Activities." This statement establishes accounting and
reporting standards requiring that every derivative instrument (including
certain derivative instruments embedded in other contracts) be recorded in the
balance sheet as either an asset or liability measured at its fair value. The
statement requires that changes in the derivative's fair value be recognized
currently in income unless specific hedge accounting criteria are met. Special
accounting for qualifying hedges allows a derivative's gains and losses to
offset related results on the hedged item in the statement of income and
requires that a company must formally document, designate and assess the
effectiveness of transactions that receive hedge accounting. SFAS No. 133 as
amended by SFAS No. 137 "Accounting for Derivative Instruments and Hedging
Activities Deferral of the Effective Date of FASB Statement No. 133" shall be
effective for all fiscal quarters of all fiscal years beginning after June 15,
2000. The Company has not yet quantified the impact of adopting SFAS No. 133 on
its consolidated financial statements and has not determined the timing nor
method of its adoption of the statement. However, the Company does not expect
that the adoption of this statement will have a material impact on its financial
position or results of operations.
<PAGE>
EARNINGS PER SHARE
<TABLE>
<CAPTION>
NET INCOME WEIGHTED AVERAGE NET INCOME PER SHARE
SHARES
March 31, March 31, March 31, March 31, March 31, March 31,
2000 1999 2000 1999 2000 1999
---------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Basic EPS $4,231 $3,846 14,215 14,312 $0.30 $0.27
Effect of dilutive securities - - 76 170 - -
---------------------------------------------------------------------------------------------
Diluted EPS $4,231 $3,846 14,291 14,482 $0.30 $0.27
---------------------------------------------------------------------------------------------
</TABLE>
COMPREHENSIVE INCOME
. Comprehensive income is reported net of taxes, as follows:
<TABLE>
<CAPTION>
March 31,
2000 1999
<S> <C> <C>
Net Income $4,231 $3,846
Change in unrealized gain/(loss) on securities available for sale 72 (168)
Less: reclassification adjustment for losses included in net income - -
---------------------
Comprehensive Income $4,303 $3,678
---------------------
</TABLE>
SEGMENT INFORMATION
The Company has identified its reportable operating business segment as
Community Banking, based on how the business is strategically managed. The
Company's community banking business segment consists of commercial banking,
retail banking, and trust services. The community banking business segment is
managed as a single strategic unit which derives its revenues from a wide range
of banking services, including lending activities, acceptance of demand, savings
and time deposits, trust and investment management, and mortgage servicing
income from investors. The Company does not have a single external customer from
which it derives ten percent or more of its revenues and operates in the New
England area of the United States.
Non reportable operating segments of the Company's operations which do
not have similar characteristics to the community banking operations and do not
meet the quantitative thresholds requiring disclosure, are included in the Other
category in the disclosure of business segments below. These non-reportable
segments include Parent Company, Independent Capital Trust I and Independent
Capital Trust II financial information.
Information about reportable segments and reconciliation of such
information to the consolidated financial statements as of and for the quarters
ended March 31, follows (in thousands):
<PAGE>
RECONCILIATION TO CONSOLIDATED FINANCIAL INFORMATION
<TABLE>
<CAPTION>
Community Other Adjustments
Banking Other and Eliminations Consolidated
<S> <C> <C> <C> <C>
March 31, 2000
Total Assets 1,617,535 211,075 (209,135) 1,619,475
Net Interest Income 16,139 399 - 16,538
Total Non-Interest Income 3,633 5,062 (5,062) 3,633
Net Income $5,026 $4,267 ($5,062) $4,231
March 31, 1999
Total Assets 1,560,106 154,262 (150,512) 1,563,856
Net Interest Income 14,684 178 - 14,862
Total Non-Interest Income 3,424 4,411 (4,410) 3,425
Net Income $4,389 $3,867 ($4,410) $3,846
</TABLE>
The accounting policies of the segments are the same as those described
in the summary of significant accounting policies. The Company evaluates
performance based on profit or loss from operations before income taxes, not
including nonrecurring gains or losses.
The Company derives a majority of its revenues from interest income
and the chief operating decision maker relies primarily on net interest
revenue to assess the performance of the segments and make decisions about
resources to be allocated to the segment. Therefore, the segments are
reported above using net interest income.
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
INDEPENDENT BANK CORP.
(registrant)
Date: September 22, 2000 /s/ Douglas H. Philipsen
-------------------------
Douglas H. Philipsen
Chairman of the Board, President
and Chief Executive Officer
Date: September 22, 2000 /s/ Denis K. Sheahan
---------------------
Denis K. Sheahan
Chief Financial Officer
and Treasurer
(Principal Financial and
Principal Accounting Officer)
