Independent Bank Corporation of Michigan reported fourth quarter 2014 net income of $3.9 million, or $0.17 per diluted share, versus net income of $4.8 million, or $0.21 per diluted share, in the prior-year period.
Article continues below
For the year ended December 31, 2014, the company reported net income of $18 million, or $0.77 per diluted share. This compares to net income of $77.5 million and net income applicable to common stock of $82.1 million, or $3.55 per diluted share, in 2013.
Full year 2013 results include an income tax benefit of $54.9 million ($2.51 per diluted share) that is primarily the result of the company reversing substantially all of its valuation allowance on deferred tax assets in the second quarter of 2013.
The company's fourth quarter of 2014 was highlighted by:
Further growth in commercial loan balances, which grew at an 11.1% annualized rate in the fourth quarter of 2014.
Continued progress in improving asset quality, with non-performing assets down 19.4% since Sept. 30, 2014 and loan net charge-offs down by 66.2% compared to the fourth quarter of 2013.
A $2.1 million, or 8.3%, year-over-year decrease in total non-interest expenses.
The December 2014 repurchase and retirement of $5.0 million (face amount) of trust preferred securities issued by IBC Capital Finance IV, which produced a $0.5 million gain on the extinguishment of debt and will result in annual interest expense savings of approximately $0.1 million.
The company's full year 2014 results were highlighted by:
A $2.6 million, or 11.3%, increase in income before income taxes.
A $14.2 million, or 13.6%, decrease in total non-interest expenses.
Total net portfolio loan growth of $35.4 million, or 2.6%.
A $14.5 million, or 40.1%, decrease in non-performing assets and a $4.8 million, or 59.8%, decline in loan net charge-offs.
A $39.5 million, or 2.1%, increase in total deposits.
William B. Kessel, the President and chief executive officer of Independent Bank Corporation, commented: "We are pleased to report net earnings of $3.9 million in the fourth quarter of 2014, as well as continued improvement in asset quality and further growth in loans. As we assess all of 2014, we are proud of our many significant achievements, including: our first full year of loan growth since 2007; a significant reduction in non-performing assets; growth in pre-tax earnings; and implementation of several new technology driven products to better serve our customers.
"We also celebrated our 150th anniversary in 2014, with many important events, including an emphasis on giving back to our communities through numerous volunteer activities."
On January 21, 2015, the Boards of Directors of the company and its wholly-owned subsidiary, Independent Bank, authorized management to effect the consolidation of certain branch offices of the Bank.
The Branch Consolidation will result in the closing of six of the Bank's branch offices. It is expected that the aggregate, annual reduction in non-interest expenses resulting from the Branch Consolidation will amount to approximately $1.6 million.
The company also estimates a potential annual loss of revenue of approximately $0.3 million to $0.4 million due to possible customer attrition. The company expects that the Branch Consolidation will be completed not later than Apr. 30, 2015. ■