Independent Bank Corp. Reports Fourth Quarter Net Income of $10.0 Million

  Independent Bank Corp. Reports Fourth Quarter Net Income of $10.0 Million

          Strong Operating EPS Growth Led by Robust Customer Volumes

Business Wire

ROCKLAND, Mass. -- January 24, 2013

Independent Bank Corp., (NASDAQ: INDB), parent of Rockland Trust Company,
today announced net income for the fourth quarter of 2012 was $10.0 million,
or $0.45 on a diluted earnings per share basis. Net income for the full year
was $42.6 million, or $1.95 on a diluted earnings per share basis. The Company
completed its acquisition of Central Bancorp, Inc. (“Central”) on November 10,
2012 and, as a consequence, Central is now included in the Company’s financial
results.

The fourth quarter and full year results of 2012 contained various items such
as merger and acquisition expenses which the Company considers to be non-core
in nature. When excluding these non-core items, net operating earnings for the
quarter were $13.7 million, or $0.61 on a diluted earnings per share basis
compared to $12.0 million, or $0.55 on a diluted earnings per share basis in
the linked quarter. For the full year net operating earnings were $47.1
million, or $2.16 on a diluted earnings per share basis compared to $45.5
million, or $2.12 on a diluted earnings per share basis for the prior year.

Christopher Oddleifson, President and Chief Executive Officer of Independent
Bank Corp. and Rockland Trust Company, stated: “Rockland Trust’s strong
earnings for both the fourth quarter and full year reflect an unwavering focus
on meeting our customer’s needs and investing in our brand. All of our major
lines of business performed well, with commercial loan and core deposit
generation especially strong. We welcome Central Bank customers and employees
to Rockland Trust and expect to continue to build on our positive momentum as
we integrate Central’s operations.”

CENTRAL BANCORP, INC. ACQUISITION

The Central acquisition added 9 full service branches and one limited service
branch, $450.7 million in loans and $357.4 million in deposits at fair value.
The total deal consideration was $52.0 million and was split between stock and
cash, with sixty percent (60%) of the shares of Central common stock
outstanding, in the aggregate, being converted into shares of Independent
common stock at a ratio of 1.0533 and the remaining forty percent (40%) of the
shares of Central common stock outstanding being converted into the right to
receive $32.00 in cash. The Company issued 1,068,514 shares of common stock
and paid an aggregate of $21.6 million in cash in connection with the
transaction.

                           
                              Net Assets Acquired
                              (at Fair Value)
                              (Dollars in Thousands)
Assets:
Cash                          $        12,683
Investments                            28,268
Loans                                  450,671
Premises and Equipment                 6,277
Goodwill                               22,544
Core Deposit Intangible                2,150
Other Assets                          37,309
Total Assets Acquired         $        559,902
Liabilities:
Deposits                      $        357,434
Borrowings                             144,920
Other Liabilities                     5,511
Total Liabilities Assumed     $        507,865
Purchase Price                $        52,037
                                       

Subsequent to the acquisition the Company sold approximately $42.2 million of
performing jumbo residential mortgages acquired in the transaction and paid
down $25.0 million of acquired Federal Home Loan Bank Advances in order to
mitigate interest rate risk and decrease the leverage of the acquired bank’s
balance sheet. For further detail on the loans and deposits acquired, see the
organic growth tables provided in the financial section of the release.

BALANCE SHEET

Total assets of $5.8 billion at December 31, 2012 have increased by $564.9
million from the prior quarter and by $786.7 million, or 15.8%, as compared to
the year ago period.

Total loans rose to $4.5 billion at December 31, 2012, inclusive of the
acquisition, which represents an increase of $462.9 million from the prior
quarter, or 45.4% on an annualized basis. Loans have increased by $724.6
million, or 19.1% when compared to December 31, 2011.

Organic loan growth was $54.4 million or 5.3% on an annualized basis for the
quarter and $316.2 million, or 8.3% for the full year. Growth was driven by
the commercial segment. The commercial loan portfolio continued its strong
upward trajectory with an increase in outstanding balances of 12.5%, on an
annualized basis, from the prior quarter. The Company closed $896.9 million in
commercial loans in 2012 and $296.5 million in the fourth quarter alone,
spurred by tax-driven loan activity and a strong loan pipeline. Growth in the
home equity loan portfolio tapered off in the fourth quarter as anticipated
due to competitive pricing trends but still grew by 14.1% from year ago levels
on an organic basis.

Inclusive of the acquisition, deposits increased to $4.5 billion at December
31, 2012, or by 41.4% on an annualized basis for the quarter. For the full
year, deposits increased by $669.8 million, or 17.3%. Core deposits increased
by $311.1 million, or 35.6%, on an annualized basis for the quarter, to $3.8
billion. Core deposit growth occurred in both consumer and business customer
segments and they now represent 83.2% of total deposits. The Company’s cost of
total deposits declined even further to 0.25% for the quarter, reflecting
management’s continued emphasis on core deposits and profitable relationships.

Organic deposit growth was $71.4 million, or 6.9% on an annualized basis for
the quarter and $312.4 million, or 8.1% on a full year basis. Organic growth
for core deposits for the fourth quarter was $97.7 million, or 11.2% on an
annualized basis and $333.5 million or 10.3% for the year. Of particular note,
demand deposits grew organically by 18.2% from a year ago and now represent
27.5% of total deposits.

The securities portfolio of $507.6 million decreased by $2.4 million during
the quarter. The securities portfolio represents 8.8% of total assets at
December 31, 2012.

Stockholders’ equity at December 31, 2012 was $529.3 million which represents
an increase of 7.4% for the quarter. The Tier 1 common ratio at December 31,
2012 declined to an estimated 8.75%, as compared to 9.24% in the prior quarter
as a result of the acquisition offset by earnings retention. As anticipated
the Company’s tangible common ratio declined to 6.56% from the prior quarter’s
tangible common ratio of 7.04% as a result of acquisition related intangibles.

NET INTEREST INCOME

Net interest income was $45.5 million for the fourth quarter of 2012, a $2.6
million increase from the linked quarter as robust loan growth served to
counter the industry-wide pressure on interest margins caused by the prolonged
low rate environment. The net interest margin was 3.68% in the fourth quarter
of 2012, declining by four basis points compared to the prior quarter, due to
lower earning asset yields coupled with a limited ability to further reduce
the Company’s overall cost of funds. The net interest margin was also impacted
by the absorption of Central’s structurally lower margin.

NONINTEREST INCOME

The Company recorded noninterest income of $17.0 million during the fourth
quarter of 2012 which represents a $908,000, or 5.6%, increase from the prior
quarter. Significant changes in noninterest income included the following:

  *Mortgage banking income increased by $816,000, or 56.5%, reflective of
    strong mortgage originations and refinancing activity due to the low rate
    environment.
  *Income from loan level derivatives associated with the Company’s
    commercial customers decreased by $336,000 due to less activity during the
    fourth quarter.
  *Other noninterest income increased by $1.3 million, or 87.6% driven by
    $622,000 associated with Massachusetts historical tax credits, as well as
    increases in various other categories, including commercial loan late
    fees, income on called securities, and realized gains on equity
    securities.
  *The Company received proceeds on life insurance policies in the amount of
    $2.7 million during the third quarter, resulting in a gain of $1.3
    million. The gain represented tax-exempt income to the Company. There were
    no additional proceeds received in the fourth quarter.

NONINTEREST EXPENSE

Inclusive of merger and integration costs the Company recorded noninterest
expense of $45.1 million during the fourth quarter of 2012 which represents a
$5.0 million, or 12.5% increase from the prior quarter. Significant changes in
noninterest expense included the following:

  *Salaries and employee benefits increased by $1.4 million, or 6.7%, driven
    largely by an increase in incentive compensation and the inclusion of
    Central’s employee base in the fourth quarter of 2012.
  *Occupancy and equipment expense increased $337,000, or 8.0%, mainly due to
    the acquired Central facilities.
  *Merger and acquisition expenses associated with the Central acquisition
    were $5.5 million for the fourth quarter, an increase of $4.9 million from
    the prior quarter.
  *Other noninterest expenses increased by $421,000, or 4.1% mainly due to an
    increase in contract labor of $224,000 and consultant fees of $211,000.

  *During the third quarter of 2012 the Company recorded a $2.2 million
    goodwill impairment charge, which represented the total amount of goodwill
    relating to Compass Exchange Advisors, LLC (“Compass”) which was acquired
    in January 2007. There were no further impairment charges recognized
    during the fourth quarter.

The Company generated a return on average assets and a return on average
common equity in the fourth quarter of 2012 of 0.73% and 7.68% respectively,
as compared to 0.91% and 9.39% for the quarter ended September 30, 2012. On an
operating basis the return on average assets and the return on average common
equity in the fourth quarter was 1.00% and 10.54%, respectively, compared to
0.93% and 9.68%, respectively, for the quarter ended September 30, 2012. For
the full year 2012 the return on average assets and the return on average
common equity was 0.83% and 8.66% compared to 0.96% and 9.93% for the prior
year. On an operating basis the return on average assets and the return on
average common equity for 2012 was 0.92% and 9.57%, respectively, compared to
0.96% and 9.94%, respectively, for the prior year.

ASSET QUALITY

The provision for loan losses was $4.4 million for the fourth quarter compared
to $3.6 million for the quarter ended September 30, 2012. The provision for
loan losses exceeded net charge-offs in both periods as the Company continues
to prudently add to loan loss reserves in line with strong loan growth trends.
For the quarter, net charge-offs remained consistent at $2.3 million, or
0.21%, on an annualized basis of average loans as compared to the prior
quarter. Delinquency as a percentage of loans increased to 0.82% at December
31, 2012 compared to 0.79% at September 30, 2012. Nonperforming loans
decreased by $2.3 million to $28.8 million, or 0.64% of total loans at
December 31, 2012, from $31.1 million, or 0.77% of total loans at September
30, 2012. Nonperforming assets increased modestly to $42.4 million at the end
of the fourth quarter compared to $41.5 million in the linked quarter.

Consistent with generally accepted accounting principles, acquired loans which
are accounted for as purchased credit impaired loans have an accretable yield,
which will be recognized in interest income over the life of the loans, based
on expected cash flows. As such, these loans are not included in the Company’s
nonperforming loan amount unless it is deemed that there is no future
accretable yield.

The allowance for loan losses was $51.8 million, at December 31, 2012, an
increase of $2.1 million from the prior quarter levels. The Company’s
allowance for loan losses was 1.15% and 1.23% as a percentage of total loans
at December 31, 2012 and September 30, 2012, respectively. Loans acquired in
connection with the acquisition have been recorded at fair value, including a
reduction for estimated credit losses, and without carryover of the respective
portfolio’s historical allowance for loan losses. Excluding these acquired
loans at December 31, 2012, the allowance for loan losses would have been
1.26% as a percentage of total loans.

Christopher Oddleifson and Denis K. Sheahan, Chief Financial Officer, of
Independent Bank Corp. and Rockland Trust Company, will host a conference call
to discuss fourth quarter earnings at 10:00 a.m. Eastern Time on Friday,
January 25, 2013. Internet access to the call is available on the Company’s
website at www.RocklandTrust.com or by telephonic access by dial-in at
1-877-317-6016 reference: INDB. A replay of the call will be available by
calling 1-877-344-7529. Replay Pass code: 10023472. The webcast replay will be
available until January 25, 2014.

Independent Bank Corp., which has Rockland Trust Company as a wholly-owned
bank subsidiary, has approximately $5.8 billion in assets. Rockland Trust
offers a wide range of commercial banking products and services, retail
banking products and services, business and consumer loans, insurance products
and services, and investment management services. To find out why Rockland
Trust is the bank Where Each Relationship Matters^®, visit
www.RocklandTrust.com.

This press release contains certain “forward-looking statements” with respect
to the financial condition, results of operations and business of the Company.
Actual results may differ from those contemplated by these statements. The
Company wishes to caution readers not to place undue reliance on any
forward-looking statements. The Company disclaims any intent or obligation to
update publicly any such forward-looking statements, whether in response to
new information, future events or otherwise.

This press release contains financial information determined by methods other
than in accordance with accounting principles generally accepted in the United
States of America (“GAAP”). Operating earnings, which is a non-GAAP financial
measure, excludes gain or loss due to items that management does not believe
are related to its core banking business, such as gains or losses on the sales
of securities, merger and acquisition expenses, and other items. The Company’s
management uses operating earnings to measure the strength of the Company’s
core banking business and to identify trends that may to some extent be
obscured by gains or losses which management deems not to be core to the
Company’s operations. The Company has included information on operating
earnings because management believes that investors may find it useful to have
access to the same analytical tool used by management and may also find that
it facilitates the comparison of the Company to other companies in the
financial services industry. Non-GAAP operating earnings should not be viewed
as a substitute for operating results determined in accordance with GAAP. An
item which management deems to be non-core and excludes when computing
non-GAAP operating earnings can be of substantial importance to the Company’s
results for any particular quarter or year. The Company’s non-GAAP operating
earnings are not necessarily comparable to non-GAAP performance measures which
may be presented by other companies.

                                                                          
                                                                                     
INDEPENDENT
BANK CORP.
FINANCIAL
SUMMARY
                                                                                     
                                                                                     
                                                                           
                                                                        % Change     % Change
CONSOLIDATED      December 31,      September 30,     December 31,      Dec.         Dec. 2012
BALANCE         2012            2012            2011            2012 vs.     vs.
SHEETS                                                                  Sept.        Dec. 2011
                                                                        2012
                                                                                     
Assets
Cash and Due      $ 98,144          $ 66,690          $ 58,301          47.16  %     68.34   %
From Banks
Interest
Earning             117,330           111,703           179,203         5.04   %     -34.53  %
Deposits with
Banks
Securities
Trading             -                 -                 8,240           n/a          -100.00 %
Assets
Securities
Available for       329,286           323,156           305,332         1.90   %     7.85    %
Sale
Securities
Held to            178,318         186,842         204,956        -4.56  %     -13.00  %
Maturity
Total               507,604           509,998           518,528         -0.47  %     -2.11   %
Securities
                                                                                     
Loans Held          48,187            42,393            20,500          13.67  %     135.06  %
for Sale
Loans
Commercial
and                 687,511           653,861           575,716         5.15   %     19.42   %
Industrial
Commercial          2,122,153         1,939,245         1,847,654       9.43   %     14.86   %
Real Estate
Commercial          188,768           175,731           128,904         7.42   %     46.44   %
Construction
Small              78,594          78,794          78,509         -0.25  %     0.11    %
Business
Total               3,077,026         2,847,631         2,630,783       8.06   %     16.96   %
Commercial
Residential         604,668           375,660           416,570         60.96  %     45.15   %
Real Estate
Residential         8,213             9,288             9,631           -11.57 %     -14.72  %
Construction
Home Equity -       487,246           485,605           381,784         0.34   %     27.62   %
1st Position
Home Equity -      314,903         308,770         314,279        1.99   %     0.20    %
2nd Position
Total
Consumer Real       1,415,030         1,179,323         1,122,264       19.99  %     26.09   %
Estate
Total Other        26,955          29,181          41,343         -7.63  %     -34.80  %
Consumer
Total Loans        4,519,011       4,056,135       3,794,390      11.41  %     19.10   %
Less -
Allowance for      (51,834   )      (49,746   )      (48,260   )     4.20   %     7.41    %
Loan Losses
Net Loans           4,467,177         4,006,389         3,746,130       11.50  %     19.25   %
Federal Home
Loan Bank           41,767            33,564            35,854          24.44  %     16.49   %
Stock
Bank Premises       55,227            49,100            48,252          12.48  %     14.46   %
and Equipment
Goodwill and
Core Deposit        162,144           137,293           140,722         18.10  %     15.22   %
Intangible
Other Assets       259,405         234,964         222,750        10.40  %     16.46   %
Total Assets      $ 5,756,985      $ 5,192,094      $ 4,970,240      10.88  %     15.83   %
                                                                                     
Liabilities
and
Stockholders'
Equity
Deposits
Demand            $ 1,248,394       $ 1,110,266       $ 992,418         12.44  %     25.79   %
Deposits
Savings and
Interest            1,691,187         1,536,439         1,473,812       10.07  %     14.75   %
Checking
Accounts
Money Market        853,971           840,723           780,437         1.58   %     9.42    %
Time
Certificates       753,125         630,419         630,162        19.46  %     19.51   %
of Deposit
Total               4,546,677         4,117,847         3,876,829       10.41  %     17.28   %
Deposits
Borrowings
Federal Home
Loan Bank and       283,569           189,464           229,701         49.67  %     23.45   %
Other
Borrowings
Wholesale
Repurchase          50,000            50,000            50,000          0.00   %     0.00    %
Agreements
Customer
Repurchase          153,359           158,578           166,128         -3.29  %     -7.69   %
Agreements
Junior
Subordinated        74,127            61,857            61,857          19.84  %     19.84   %
Debentures
Subordinated       30,000          30,000          30,000         0.00   %     0.00    %
Debentures
Total               591,055           489,899           537,686         20.65  %     9.93    %
Borrowings
Total
Deposits and        5,137,732         4,607,746         4,414,515       11.50  %     16.38   %
Borrowings
Other               89,933            91,383            86,668          -1.59  %     3.77    %
Liabilities
Stockholders'
Equity
Common Stock        225               214               213             5.14   %     5.63    %
Additional
Paid in             269,950           237,859           233,878         13.49  %     15.42   %
Capital
Retained            263,671           258,481           239,452         2.01   %     10.11   %
Earnings
Accumulated
Other
Comprehensive      (4,526    )      (3,589    )      (4,486    )     26.11  %     0.89    %
Loss, Net of
Tax
Total
Stockholders'      529,320         492,965         469,057        7.37   %     12.85   %
Equity
Total
Liabilities
and               $ 5,756,985      $ 5,192,094      $ 4,970,240      10.88  %     15.83   %
Stockholders'
Equity

                                                                        
                                                                                          
CONSOLIDATED             Three Months Ended
STATEMENTS OF INCOME
                                                                               % Change     % Change
                         December 31,      September 30,     December 31,      Dec. 2012    Dec. 2012
                         2012             2012             2011              vs.          vs.
                                                                               Sept.        Dec. 2011
                                                                               2012
                                                                                                       
INTEREST INCOME
Interest on Fed
Funds Sold and Short     $ 47              $ 34              $ 81              38.24   %    -41.98   %
Term Investments
Interest and
Dividends on               3,753             4,015             4,592           -6.53   %    -18.27   %
Securities
Interest on Loans          47,166            44,251            43,533          6.59    %    8.35     %
Interest on Loans         448             255             176            75.69   %    154.55   %
Held for Sale
Total Interest             51,414            48,555            48,382          5.89    %    6.27     %
Income
INTEREST EXPENSE
Interest on Deposits       2,658             2,619             2,907           1.49    %    -8.57    %
Interest on Borrowed      3,277           3,098           3,621          5.78    %    -9.50    %
Funds
Total Interest            5,935           5,717           6,528          3.81    %    -9.08    %
Expense
Net Interest Income        45,479            42,838            41,854          6.17    %    8.66     %
Less - Provision for      4,350           3,606           3,800          20.63   %    14.47    %
Loan Losses
Net Interest Income
after Provision for        41,129            39,232            38,054          4.84    %    8.08     %
Loan Losses
NONINTEREST INCOME
Service Charges on         4,159             3,959             4,254           5.05    %    -2.23    %
Deposit Accounts
Interchange and ATM        2,594             2,422             2,052           7.10    %    26.41    %
Fees
Investment                 3,666             3,723             3,222           -1.53   %    13.78    %
Management
Mortgage Banking           2,261             1,445             1,560           56.47   %    44.94    %
Income
Net Gain on Sale of        5                 -                 -               100.00  %    100.00   %
Securities
Increase in Cash
Surrender Value of         903               757               847             19.29   %    6.61     % 
Life Insurance
Policies
Proceeds from Life         -                 1,307             -               -100.00 %    n/a      
Insurance Policies
Loan Level                 711               1,047             852             -32.09  %    -16.55   %
Derivative Income
Gross Change on
Write-Down of              107               403               (48        )    -73.45  %    -322.92  %
Certain Investments
to Fair Value
Less: Portion of
Other-Than-Temporary      (107       )     (403       )     9              -73.45  %    -1288.89 %
Impairment Losses
Recognized in OCI
Net Loss on
Write-Down of              -                 -                 (39        )    n/a         -100.00  %
Certain Investments
to Fair Value
Other Noninterest         2,717           1,448           1,567          87.64   %    73.39    % 
Income
Total Noninterest          17,016            16,108            14,315          5.64    %    18.87    %
Income
NONINTEREST EXPENSE
Salaries and               22,099            20,704            20,693          6.74    %    6.79     %
Employee Benefits
Occupancy and              4,555             4,218             3,970           7.99    %    14.74    %
Equipment Expenses
Data Processing and
Facilities                 1,227             1,144             1,063           7.26    %    15.43    %
Management
FDIC Assessment            878               775               736             13.29   %    19.29    %
Prepayment Fee on          7                 -                 757             0.00    %    -99.08   %
Borrowings
Merger and                 5,474             595               -               820.00  %    100.00   %
Acquisition Expenses
Goodwill Impairment        -                 2,227             -               -100.00 %    n/a      
Other Noninterest         10,810          10,389          9,733          4.05    %    11.07    %
Expense
Total Noninterest          45,050            40,052            36,952          12.48   %    21.91    %
Expense
INCOME BEFORE INCOME      13,095          15,288          15,417         -14.34  %    -15.06   %
TAXES
PROVISION FOR INCOME      3,127           3,687           4,248          -15.19  %    -26.39   %
TAXES
NET INCOME               $ 9,968          $ 11,601         $ 11,169         -14.08  %    -10.75   %
                                                                                                       
BASIC EARNINGS PER       $ 0.45            $ 0.54            $ 0.52            -16.67  %    -13.46   %
SHARE
DILUTED EARNINGS PER     $ 0.45            $ 0.53            $ 0.52            -15.09  %    -13.46   %
SHARE
BASIC AVERAGE SHARES       22,286,841        21,654,188        21,484,695
DILUTED AVERAGE            22,318,343        21,706,304        21,504,053
SHARES
                                                                                                       
PERFORMANCE RATIOS
Net Interest Margin        3.68       %      3.72       %      3.78       %
(FTE)
Return on Average          0.73       %      0.91       %      0.91       %
Assets
Return on Average          7.68       %      9.39       %      9.45       %
Common Equity
                                                                                                       
RECONCILIATION TABLE
- NON-GAAP FINANCIAL
INFORMATION
NET INCOME               $ 9,968           $ 11,601          $ 11,169          -14.08  %    -10.75   %
Noninterest Income
Components
Less - Gain on Sale
of Securities, net         (3         )      -                 -
of tax
Less - Proceeds from
Life Insurance             -                 (1,307     )      -
Policies, tax exempt
Noninterest Expense
Components
Add - Prepayment
Fees on Borrowings,        4                 -                 448
net of tax
Add - Merger &
Acquisition                3,710             352               -
Expenses, net of tax
Add - Goodwill
Impairment, net of        -               1,317           -                          
tax
NET OPERATING            $ 13,679         $ 11,963         $ 11,617         14.34   %    17.75    %
EARNINGS
                                                                                                       
Diluted Earnings Per
Share, on an             $ 0.61           $ 0.55           $ 0.54           10.91   %    12.96    %
Operating Basis

                                                            
                                                                   
CONSOLIDATED STATEMENTS
OF INCOME
                             Twelve Months Ended                   
                                                                   % Change

                             December 31,       December 31,       Dec. 2012
                             2012               2011               vs.

                                                                   Dec. 2011
                                                                   
INTEREST INCOME
Interest on Fed Funds
Sold and Short Term          $ 132              $ 162              -18.52   %
Investments
Interest and Dividends         16,763             20,657           -18.85   %
on Securities
Interest on Loans              178,309            174,450          2.21     %
Interest on Loans Held        988              482             104.98   %
for Sale
Total Interest Income          196,192            195,751          0.23     %
INTEREST EXPENSE
Interest on Deposits           10,703             13,355           -19.86   %
Interest on Borrowed          12,690           15,317          -17.15   %
Funds
Total Interest Expense        23,393           28,672          -18.41   %
Net Interest Income            172,799            167,079          3.42     %
Less - Provision for          18,056           11,482          57.25    %
Loan Losses
Net Interest Income
after Provision for Loan       154,743            155,597          -0.55    %
Losses
NONINTEREST INCOME
Service Charges on             15,930             16,628           -4.20    %
Deposit Accounts
Interchange and ATM Fees       9,783              7,733            26.51    %
Investment Management          14,779             13,532           9.22     %
Mortgage Banking Income        6,500              4,197            54.87    %
Net Gain on Sale of            5                  723              -99.31   %
Securities
Increase in Cash
Surrender Value of Life        3,114              3,170            -1.77    %
Insurance Policies
Proceeds from Life             1,307              -                100.00   %
Insurance Policies
Loan Level Derivative          3,457              2,093            65.17    %
Income
Gross Change on
Write-Down of Certain          678                53               1179.25  %
Investments to Fair
Value
Less: Portion of
Other-Than-Temporary          (754       )      (296       )     154.73   %
Impairment Losses
Recognize in OCI
Net Loss on Write-Down
of Certain Investments         (76        )       (243       )     -68.72   %
to Fair Value
Other Noninterest Income      7,217            4,867           48.28    %
Total Noninterest Income       62,016             52,700           17.68    %
NONINTEREST EXPENSE
Salaries and Employee          84,014             81,275           3.37     %
Benefits
Occupancy and Equipment        17,307             16,916           2.31     %
Expenses
Data Processing and            4,644              4,891            -5.05    %
Facilities Management
FDIC Assessment                3,232              3,496            -7.55    %
Prepayment Fee on              7                  757              -99.08   %
Borrowings
Merger and Acquisition         6,741              -                100.00   %
Expenses
Goodwill Impairment            2,227              -                100.00   %
Other Noninterest             41,287           38,378          7.58     %
Expense
Total Noninterest              159,459            145,713          9.43     %
Expense
INCOME BEFORE INCOME          57,300           62,584          -8.44    %
TAXES
PROVISION FOR INCOME          14,673           17,148          -14.43   %
TAXES
NET INCOME                   $ 42,627          $ 45,436          -6.18    %
                                                                   
BASIC EARNINGS PER SHARE     $ 1.96             $ 2.12             -7.55    %
DILUTED EARNINGS PER         $ 1.95             $ 2.12             -8.02    %
SHARE
BASIC AVERAGE SHARES           21,782,499         21,422,757
DILUTED AVERAGE SHARES         21,812,316         21,451,587
                                                                   
PERFORMANCERATIOS
Net Interest Margin            3.75       %       3.90       %
(FTE)
Return on Average Assets       0.83       %       0.96       %
Return on Average Common       8.66       %       9.93       %
Equity
                                                                   
RECONCILIATION TABLE -
NON-GAAP FINANCIAL
INFORMATION
NET INCOME                   $ 42,627           $ 45,436           -6.18    %
Noninterest Income
Components
Less - Net Gain on Sale
of Securities, net of          (3         )       (428       )
tax
Less - Proceeds from
Life Insurance Policies,       (1,307     )       -
tax exempt
Noninterest Expense
Components
Add - Prepayment Fees on       4                  448
Borrowings, net of tax
Add - Merger &
Acquisition Expenses,          4,459              -
net of tax
Add - Goodwill                1,317            -               
Impairment, net of tax
NET OPERATING EARNINGS       $ 47,097          $ 45,456          3.61     %
                                                                   
Diluted Earnings Per
Share, on an Operating       $ 2.16            $ 2.12            1.89     %
Basis

                                                                                                                                            
                                                                                                                                                               
RECONCILIATION TABLE - NON-GAAP
FINANCIAL INFORMATION
                                    Three Months Ended                                                                         Twelve Months Ended            
                                    December       September      December       % Change        % Change                      December        December        % Change
                                    31,            30,            31,            Dec. 2012       Dec. 2012                     31,             31,             Dec. 2012
                                    2012           2012           2011           vs.             vs.                           2012            2011            vs.
                                                                                 Sept. 2012      Dec. 2011                                                     Dec. 2011
                                                                                                                                                               
Noninterest Income GAAP             $ 17,016       $ 16,108       $ 14,315         5.64    %       18.87   %                   $ 62,016        $ 52,700        17.68   %
Less - Net Gain on Sale of            (5     )       -              -              -100.00 %       -100.00 %                     (5      )       (723    )     -99.31  %
Securities
Add -
Other-Than-Temporary-Impairment       -              -              39             n/a             -100.00 %                     76              243           -68.72  %
on Securities
Less - Proceeds from Life            -            (1,307 )      -            100.00  %      n/a                         (1,307  )      -            -100.00 %
Insurance Policies, tax exempt
Noninterest Income as Adjusted      $ 17,011      $ 14,801      $ 14,354       14.93   %      18.51   %                   $ 60,780       $ 52,220       16.39   %
                                                                                                                                                               
Noninterest Expense GAAP            $ 45,050       $ 40,052       $ 36,952         12.48   %       21.91   %                   $ 159,459       $ 145,713       9.43    %
Less - Prepayment Fee on              (7     )       -              (757   )       -100.00 %       -99.08  %                     (7      )       (757    )     -99.08  %
Borrowings
Less - Merger and Acquisition         (5,474 )       (595   )       -              820.00  %       -100.00 %                     (6,741  )       -             -100.00 %
Expenses
Less - Goodwill Impairment           -            (2,227 )      -            100.00  %      n/a                         (2,227  )      -            -100.00 %
Noninterest Expense as Adjusted     $ 39,569      $ 37,230      $ 36,195       6.28    %      9.32    %                   $ 150,484      $ 144,956      3.81    %
                                                                                                                                                               
                                                                                                                                                               
                                                                                                                                                               
                                                                                                                                                               
                                    Nonperforming Assets                         Net Charge-Offs                               Net Charge-Offs
ASSET QUALITY                       At                                           For the Three Months Ending                   For the Twelve Months
                                                                                                                               Ending
                                    December       September      December       December        September       December      December        December
                                    31,            30,            31,            31,             30,             31,           31,             31,
                                    2012           2012           2011           2012            2012            2011          2012            2011
                                                                                                                                                               
Nonperforming Loans
Commercial & Industrial Loans       $ 2,666        $ 2,981        $ 1,883          ($326   )     $ 1,145         $ 361         $ 5,228         $ 2,468
Commercial Real Estate Loans          6,574          9,249          13,109         990             433             1,246         4,160           2,803
Small Business Loans                  570            604            542            197             77              132           482             1,030
Residential Real Estate Loans         11,472         10,383         9,867          581             148             69            943             559
Home Equity                           7,311          7,643          3,130          646             329             692           3,085           1,574
Installment Loans - Other            173          221          422          174           131           318         584          1,043   
Total Nonperforming Loans /         $ 28,766      $ 31,081      $ 28,953      $ 2,262        $ 2,263        $ 2,818      $ 14,482      $ 9,477   
Total Net Charge-offs
Nonaccrual Securities                 1,511          1,521          1,272
Other Assets in Possession            176            176            266
Other Real Estate Owned              11,974       8,751        6,658  
Nonperforming Assets                $ 42,427      $ 41,529      $ 37,149 
                                                                                                                                                               
Nonperforming Loans/Gross Loans       0.64   %       0.77   %       0.76   %
Allowance for Loan                    180.19 %       160.05 %       166.68 %
Losses/Nonperforming Loans
Gross Loans/Total Deposits            99.39  %       98.50  %       97.87  %
Allowance for Loan Losses/Total       1.15   %       1.23   %       1.27   %
Loans
                                                                                                                                                               
Net charge-offs to average                                                         0.21    %       0.22    %       0.30  %
loans (quarter annualized)
Net charge-offs to average                                                                                                       0.36    %       0.26    %
loans (year-to-date)
                                    Troubled Debt Restructurings
                                    At
                                    December       September      December
                                    31,            30,            31,
                                    2012           2012           2011
Troubled Debt Restructurings on     $ 46,764       $ 46,823       $ 37,151
Accrual Status
Troubled Debt Restructurings on      6,554      5,962      9,230  
Nonaccrual Status
Total Troubled Debt                 $ 53,318    $ 52,785    $ 46,381 
Restructurings
                                                                                                                                                               
                                    Three          Three          Three
                                    Months         Months         Months
Nonperforming Assets                Ending         Ending         Ending
Reconciliation                      December       September      December
                                    31,            30,            31,
                                    2012           2012           2011
Nonperforming Assets Beginning      $ 41,529       $ 43,857       $ 36,647
Balance
New to Nonperforming                  6,927          7,981          9,279
Loans Charged-Off                     (3,053 )       (2,826 )       (3,155 )
Loans Paid-Off                        (2,438 )       (3,837 )       (821   )
Loans Transferred to Other Real       (1,632 )       (347   )       (650   )
Estate Owned/Other Assets
Loans Restored to Accrual             (2,194 )       (1,081 )       (2,296 )
Status
New to Other Real Estate Owned        1,632          347            650
Acquired Other Real Estate            2,633        -              -
Owned
Sale of Other Real Estate Owned       (1,281 )       (2,708 )       (2,508 )
Other                                304          143          3      
Nonperforming Assets Ending         $ 42,427      $ 41,529      $ 37,149 
Balance
                                                                                                                                                               
                                                                                                                                                               
                                                                                                                                                               
                                    December       September      December
Financial Ratios                    31,            30,            31,
                                    2012           2012           2011
Book Value per Common Share         $ 23.24        $ 22.75        $ 21.82
Tangible Common Book Value per
Share (proforma to include
the tax deductibility of            $ 17.00        $ 17.28        $ 16.21
goodwill) - Non-GAAP
Tangible Common                       6.56   %       7.04   %       6.80   %
Capital/Tangible Assets
Tangible Common
Capital/Tangible Asset
(proforma to include
the tax deductibility of              6.90   %       7.38   %       7.18   %
goodwill) - Non-GAAP
                                                                                                                                                               
Capital Adequacy
Tier one leverage capital ratio       8.65   %       8.73   %       8.61   %
(1)
Tier one common ratio (1)             8.75   %       9.24   %       9.16   %
(1) Estimated number for
December 31, 2012

                                                                                                                   
                                                                                                                                         
INDEPENDENT BANK CORP. SUPPLEMENTAL FINANCIAL
INFORMATION
                                
(Unaudited -
Dollars in           Three Months Ended
Thousands)
                     December 31, 2012                       September 30, 2012                     December 31, 2011
                     Average         Interest     Yield/     Average         Interest     Yield/     Average         Interest     Yield/
                     Balance       Earned/    Rate     Balance       Earned/    Rate     Balance       Earned/    Rate
                                     Paid                                    Paid                                    Paid
                                                                                                                                         
                                                                                                                                         
Interest-Earning
Assets
Interest Earning
Deposits with
Banks, Federal       $ 79,894        $ 47         0.23 %     $ 53,650        $ 34         0.25 %     $ 129,956       $ 81         0.25 %
Funds Sold, and
Short Term
Investments
Securities
Trading Assets         -               -          -            -               -          -            8,152           80         3.89 %
Taxable
Investment             509,289         3,742      2.92 %       513,712         3,995      3.09 %       511,302         4,467      3.47 %
Securities
Nontaxable
Investment            915            19         8.26 %      1,649          34         8.20 %      4,066          76         7.42 %
Securities (1)
Total                  510,204         3,761      2.93 %       515,361         4,029      3.11 %       523,520         4,623      3.50 %
Securities:
Loans Held for         48,091          448        3.71 %       34,106          255        2.97 %       23,237          176        3.00 %
Sale
Loans
Commercial and         666,606         6,666      3.98 %       636,533         6,447      4.03 %       562,638         5,917      4.17 %
Industrial
Commercial Real        2,027,330       24,702     4.85 %       1,920,905       23,173     4.80 %       1,830,429       23,294     5.05 %
Estate (1)
Commercial             182,293         1,882      4.11 %       162,150         1,695      4.16 %       122,518         1,417      4.59 %
Construction
Small Business        78,719         1,120      5.66 %      78,629         1,121      5.67 %      77,477         1,136      5.82 %
Total Commercial       2,954,948       34,370     4.63 %       2,798,217       32,436     4.61 %       2,593,062       31,764     4.86 %
Residential Real       514,605         5,055      3.91 %       381,247         4,060      4.24 %       426,442         4,721      4.39 %
Estate
Residential            8,419           87         4.11 %       11,567          104        3.58 %       7,703           88         4.53 %
Construction
Home Equity           797,792        7,289      3.63 %      787,052        7,236      3.66 %      673,509        6,370      3.75 %
Total Consumer         1,320,816       12,431     3.74 %       1,179,866       11,400     3.84 %       1,107,654       11,179     4.00 %
Real Estate
Total Other           27,490         615        8.90 %      30,155         669        8.83 %      44,242         865        7.76 %
Consumer
Total Loans           4,303,254    47,416   4.38 %      4,008,238    44,505   4.42 %      3,744,958    43,808   4.64 %
Total
Interest-Earning     $ 4,941,443   $ 51,672   4.16 %     $ 4,611,355   $ 48,823   4.21 %     $ 4,421,671   $ 48,688   4.37 %
Assets
Cash and Due           70,404                                  75,876                                  58,257
from Banks
Federal Home           38,201                                  33,564                                  35,854
Loan Bank Stock
Other Assets          405,179                                374,208                                357,871
Total Assets         $ 5,455,227                             $ 5,095,003                             $ 4,873,653
Interest-Bearing
Liabilities
Deposits
Savings and
Interest             $ 1,548,798     $ 729        0.19 %     $ 1,482,213     $ 707        0.19 %     $ 1,401,182     $ 768        0.22 %
Checking
Accounts
Money Market           842,574         586        0.28 %       801,921         615        0.31 %       742,344         687        0.37 %
Time Deposits         697,599        1,343      0.77 %      635,729        1,297      0.81 %      624,458       1,453      0.92 %
Total
Interest-Bearing     $ 3,088,971     $ 2,658      0.34 %     $ 2,919,863     $ 2,619      0.36 %     $ 2,767,984     $ 2,908      0.42 %
Deposits
Borrowings
Federal Home
Loan Bank and        $ 253,758       $ 1,398      2.19 %     $ 198,212       $ 1,255      2.52 %     $ 256,907       $ 1,731      2.67 %
Other Borrowings
Wholesale
Repurchase             50,000          292        2.32 %       50,000          292        2.32 %       50,000          292        2.32 %
Agreements
Customer
Repurchase             176,624         57         0.13 %       161,097         76         0.19 %       163,738         125        0.30 %
Agreements
Junior
Subordinated           68,587          983        5.70 %       61,857          928        5.97 %       61,857          925        5.93 %
Debentures
Subordinated          30,000         547        7.25 %      30,000         547        7.25 %      30,000        547        7.23 %
Debentures
Total Borrowings     $ 578,969     $ 3,277    2.25 %     $ 501,166     $ 3,098    2.46 %     $ 562,502     $ 3,620    2.55 %
Total
Interest-Bearing     $ 3,667,940   $ 5,935    0.64 %     $ 3,421,029   $ 5,717    0.66 %     $ 3,330,486   $ 6,528    0.78 %
Liabilities
Demand Deposits        1,178,975                               1,093,387                               994,500
Other                 92,158                                 89,157                                 79,842
Liabilities
Total                $ 4,939,073                             $ 4,603,573                             $ 4,404,828
Liabilities
Stockholders'         516,154                                491,430                                468,825
Equity
Total
Liabilities and      $ 5,455,227                             $ 5,095,003                             $ 4,873,653
Stockholders'
Equity
                                                                                                                                         
Net Interest                         $ 45,737                                $ 43,106                                $ 42,160
Income
                                                                                                                                         
Interest Rate                                     3.53 %                                  3.55 %                                  3.59 %
Spread (2)
                                                                                                                                         
Net Interest                                      3.68 %                                  3.72 %                                  3.78 %
Margin (3)
                                                                                                                                         
Supplemental
Information:
Total Deposits,
including Demand     $ 4,267,946     $ 2,658                 $ 4,013,250     $ 2,619                 $ 3,762,484     $ 2,908
Deposits
Cost of Total                                     0.25 %                                  0.26 %                                  0.31 %
Deposits
Total Funding
Liabilities,         $ 4,846,915     $ 5,935                 $ 4,514,416     $ 5,717                 $ 4,324,986     $ 6,528
including Demand
Deposits
Cost of Total
Funding                                           0.49 %                                  0.50 %                                  0.60 %
Liabilities
                                                                                                                                         
                                                                                                                                         
(1) The total amount of adjustment to present interest income and yield on a fully tax-equivalent basis is $258,000, $268,000, and
$306,000 for the three months ended December 31, 2012, September 30, 2012, and December 31, 2011, respectively.
(2) Interest rate spread represents the difference between the weighted average yield on interest-earning assets and the weighted average
cost of interest-bearing liabilities.
(3) Net interest margin represents annualized net interest income as a percentage of average interest-earning assets.

*Story too large*
                                                                               
                                                                                            
                     Twelve Months Ended
                     December 31, 2012                        December 31, 2011
                     Average         Interest      Yield/     Average         Interest      Yield/
                     Balance       Earned/     Rate       Balance       Earned/     Rate
                                     Paid                                     Paid
                                                                                            
                                                                                            
Interest-Earning
Assets
Interest Earning
Deposits with
Banks, Federal       $ 54,483        $ 132         0.24 %     $ 65,053        $ 162         0.25 %
Funds Sold, and
Short Term
Investments
Securities
Trading Assets         1,365           37          2.71 %       8,329           285         3.42 %
Taxable
Investment             524,466         16,643      3.17 %       540,564         20,041      3.71 %
Securities
Nontaxable
Investment            1,746          140         8.02 %      7,471          560         7.50 %
Securities (1)
Total                  527,577         16,820      3.19 %       556,364         20,886      3.75 %
Securities:
Loans Held for         29,928          988         3.30 %       14,646          482         3.29 %
Sale
Loans
Commercial and         625,789         25,309      4.04 %       538,805         22,867      4.24 %
Industrial
Commercial Real        1,923,602       93,582      4.86 %       1,792,247       93,604      5.22 %
Estate (1)
Commercial             159,271         6,698       4.21 %       126,083         5,805       4.60 %
Construction
Small Business        79,092         4,509       5.70 %      78,851         4,606      5.84 %
Total Commercial       2,787,754       130,098     4.67 %       2,535,986       126,882     5.00 %
Residential Real       425,084         17,848      4.20 %       450,501         20,203      4.48 %
Estate
Residential            11,653          482         4.14 %       5,685           260         4.57 %
Construction
Home Equity           765,228        28,124      3.68 %      635,695        24,015     3.78 %
Total Consumer         1,201,965       46,454      3.86 %       1,091,881       44,478      4.07 %
Real Estate
Total Other           32,630         2,785       8.54 %      53,551         4,171       7.79 %
Consumer
Total Loans           4,022,349    179,337   4.46 %      3,681,418    175,531   4.77 %
Total
Interest-Earning     $ 4,634,337   $ 197,277   4.26 %     $ 4,317,481   $ 197,061   4.56 %
Assets
Cash and Due           67,085                                   55,897
from Banks
Federal Home           35,155                                   35,854
Loan Bank Stock
Other Assets          377,450                                 336,617
Total Assets         $ 5,114,027                              $ 4,745,849
Interest-Bearing
Liabilities
Deposits
Savings and
Interest             $ 1,484,758     $ 2,820       0.19 %     $ 1,355,478     $ 3,216       0.24 %
Checking
Accounts
Money Market           803,656         2,461       0.31 %       728,380         3,050       0.42 %
Time Deposits         646,873       5,422      0.84 %      656,486       7,089      1.08 %
Total
Interest-Bearing     $ 2,935,287     $ 10,703      0.36 %     $ 2,740,344     $ 13,355      0.49 %
Deposits
Borrowings
Federal Home
Loan Bank and        $ 224,553       $ 5,277       2.35 %     $ 284,400       $ 7,199       2.53 %
Other Borrowings
Wholesale
Repurchase             50,000          1,162       2.32 %       50,000          1,747       3.49 %
Agreements
Customer
Repurchase             160,589         325         0.20 %       143,904         536         0.37 %
Agreements
Junior
Subordinated           63,549          3,749       5.90 %       61,857          3,663       5.92 %
Debentures
Subordinated          30,000       2,177     7.26 %      30,000       2,171     7.24 %
Debentures
Total Borrowings     $ 528,691     $ 12,690    2.40 %     $ 570,161     $ 15,316    2.69 %
Total
Interest-Bearing     $ 3,463,978   $ 23,393    0.68 %     $ 3,310,505   $ 28,672    0.87 %
Liabilities
Demand Deposits        1,070,577                                910,701
Other                 87,104                                  67,221
Liabilities
Total                $ 4,621,659                              $ 4,288,427
Liabilities
Stockholders'         492,368                                 457,422
Equity
Total
Liabilities and      $ 5,114,027                              $ 4,745,849
Stockholders'
Equity
                                                                                            
Net Interest                         $ 173,884                                $ 168,389
Income
                                                                                            
Interest Rate                                      3.58 %                                   3.69 %
Spread (2)
                                                                                            
Net Interest                                       3.75 %                                   3.90 %
Margin (3)

[TRUNCATED]
 
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