Independent Bank Corp. Reports Third Quarter Net Income of $11.6 Million

ROCKLAND, Mass.--(BUSINESS WIRE)--

Independent Bank Corp., INDB, parent of Rockland Trust Company, today announced net income of $11.6 million for the third quarter of 2012, or $0.53 on a diluted earnings per share basis.

The third quarter of 2012 contained various items which the Company considers to be non-core in nature. These items included $2.2 million of goodwill impairment associated with the Company's 1031 Exchange business, $595,000 of merger-related expenses associated with the previously announced Central Bancorp, Inc. CEBK acquisition and tax-exempt income of $1.3 million related to proceeds from life insurance policies. When excluding these non-core items, net income for the third quarter on an operating basis was $12.0 million, or $0.55 per diluted share.

Christopher Oddleifson, President and Chief Executive Officer of Independent Bank Corp. and Rockland Trust Company, stated: “Our third quarter performance was a strong one and is driven by our strategy of disciplined growth. The steady growth in lending and core deposits evidences that the Rockland brand is resonating with consumers and businesses alike. Our customer-centric approach to deliver great products and service is meeting with much success in the marketplace which makes us confident about continuing to build franchise value.”

BALANCE SHEET

Total assets of $5.2 billion at September 30, 2012 are up $67.5 million from the prior quarter and $292.3 million, or 6.0%, as compared to the year ago period.

Total loans continued to trend upwards, rising to $4.1 billion at September 30, 2012, which represents an increase of 7.5%, on an annualized basis, from the prior quarter. The commercial loan portfolio continued to exhibit strong growth trends with an increase in outstanding balances of 11.4%, on an annualized basis, from the prior quarter. The commercial loan pipeline remains at strong levels. The first position home equity portfolio also sustained its track record of healthy growth in the third quarter, with an increase of 16.6%, on an annualized basis, from the prior quarter as customers continue to respond enthusiastically to the Company's product offerings.

Deposits remained steady at $4.1 billion at September 30, 2012 as compared to the prior quarter. Core deposits increased by $53.8 million, or 6.3% on an annualized basis to $3.5 billion during the quarter with growth occurring in both consumer and business customer segments. Core deposits have now risen to 84.3% of total deposits. The Company's cost of total deposits remained low at 0.26%, reflecting management's continued emphasis on core deposits and profitable relationships.

The securities portfolio of $510.0 million decreased by $16.8 million during the quarter, as a result of paydowns as well as calls of $6.4 million in trust preferred securities, offset by additional purchases. The securities portfolio represents 9.8% of total assets at September 30, 2012.

Stockholders' equity at September 30, 2012 increased to $493.0 million, an increase of 7.7%, on an annualized basis, when compared to June 30, 2012. The Tier 1 common ratio at September 30, 2012 remains strong and is estimated at 9.09%, as compared to 9.13% in the prior quarter. The Company's tangible common ratio was 7.04% representing an increase from the prior quarter's tangible common ratio of 6.89%.

NET INTEREST INCOME

Net interest income was $42.8 million for the third quarter of 2012, a slight 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 3.72% in the third quarter of 2012, declining by eight 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.

NONINTEREST INCOME

The Company recorded noninterest income of $16.1 million during the third quarter of 2012 which represents a $1.1 million, or 7.5%, increase from the prior quarter. Significant changes in noninterest income included the following:

• The Company received proceeds on life insurance policies in the amount of $1.3 million. The proceeds represent tax-exempt income to the Company.
• Income from loan level derivative activity associated with the Company's commercial customers decreased by $324,000.

NONINTEREST EXPENSE

Inclusive of merger and integration costs and goodwill impairment, the Company recorded noninterest expense of $40.1 million during the third quarter of 2012 which represents a $3.1 million or an 8.3% increase from the prior quarter. Significant changes in noninterest expense included the following:

• Salaries and employee benefits increased by $929,000, or 4.7%, driven largely by an increase in incentive compensation of $1.2 million offset somewhat by lower pension expense.
• Merger and acquisition expenses were $595,000 for the third quarter relating to the previously announced acquisition of Central Bancorp, Inc., which is expected to close in the fourth quarter of 2012.
• 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. Compass is a wholly-owned subsidiary of the Bank that provides like-kind exchange services pursuant to section 1031 of the Internal Revenue Code. The Company continues to offer these services and has not exited the business. However due to the prolonged low rate environment and the Federal Reserve Bank's stated intent to maintain low rates for the foreseeable future, the Company determined the goodwill associated with this purchase to be impaired.

The Company generated a return on average assets and a return on average common equity in the third quarter of 2012 of 0.91% and 9.39% respectively, as compared to 0.71% and 7.34% for the quarter ended June 30, 2012. On a year to date basis the return on average assets and a return on average common equity was 0.87% and 9.01% at September 30, 2012 compared to 0.97% and 10.10% for the year ended September 30, 2011.

ASSET QUALITY

The provision for loan losses was $3.6 million for the third quarter compared to $8.5 million for the quarter ended June 30, 2012. The provision for loan loss 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 decreased to $2.3 million, or 0.22%, on an annualized basis of average loans compared to $8.4 million, or 0.86%, for the quarter ended June 30, 2012. The higher net charge-offs in the second quarter included $4.0 million related to a customer fraud. Delinquency as a percentage of loans decreased to 0.79% at September 30, 2012 compared to 0.82% at June 30, 2012. Nonperforming loans decreased slightly to $31.1 million, or 0.77% of total loans at September 30, 2012, from $31.3 million, or 0.79% of total loans at June 30, 2012. Nonperforming assets declined to $41.5 million at the end of the third quarter compared to $43.9 million in the linked quarter, primarily driven by a decrease in other real estate owned by the Bank.

The allowance for loan losses was $49.7 million, at September 30, 2012, an increase of $1.3 million from the prior quarter levels. The Company's allowance for loan losses was 1.23% and 1.22% as a percentage of total loans at September 30, 2012 and June 30, 2012, respectively.

Christopher Oddleifson and Denis K. Sheahan, Chief Financial Officer, of Independent Bank Corp. and Rockland Trust Company, will host a conference call to discuss third quarter earnings at 10:00 a.m. Eastern Time on Friday, October 19, 2012. Internet access to the call is available on the Company's website at www.RocklandTrust.com or by telephonic access by dial-in at 1-877-317-6789 reference: INDB. A replay of the call will be available by calling 1-877-344-7529. Replay Pass code: 10019254. The webcast replay will be available until October 19, 2013.

Independent Bank Corp., which has Rockland Trust Company as a wholly-owned bank subsidiary, has approximately $5.2 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 BALANCE SHEETS				September 30,					June 30,					September 30,					Sept. 2012 vs.				Sept. 2012 vs.
				2012					2012					2011					June 2012				Sept. 2011
Assets
Cash and Due From Banks				$	66,690				$	65,826				$	53,821				1.31	%			23.91	%
Interest Earning Deposits with Banks					111,703					121,029					180,352				-7.71	%			-38.06	%
Fed Funds Sold					-					1,524					667				-100.00	%			-100.00	%
Securities
Trading Assets					-					-					7,984				n/a				-100.00	%
Securities Available for Sale					323,156					338,331					293,073				-4.49	%			10.26	%
Securities Held to Maturity					186,842					188,450					220,552				-0.85	%			-15.28	%
Total Securities					509,998					526,781					521,609				-3.19	%			-2.23	%
Loans Held for Sale					42,393					22,310					22,156				90.02	%			91.34	%
Loans
Commercial and Industrial					653,861					625,695					567,552				4.50	%			15.21	%
Commercial Real Estate					1,939,245					1,912,563					1,815,063				1.40	%			6.84	%
Commercial Construction					175,731					149,990					119,309				17.16	%			47.29	%
Small Business					78,794					79,738					77,230				-1.18	%			2.03	%
Total Commercial					2,847,631					2,767,986					2,579,154				2.88	%			10.41	%
Residential Real Estate					375,660					389,053					441,600				-3.44	%			-14.93	%
Residential Construction					9,288					14,960					6,306				-37.91	%			47.29	%
Home Equity - 1st Position					485,605					466,136					332,729				4.18	%			45.95	%
Home Equity - 2nd Position					308,770					310,717					315,746				-0.63	%			-2.21	%
Total Consumer Real Estate					1,179,323					1,180,866					1,096,381				-0.13	%			7.57	%
Total Other Consumer					29,181					31,937					47,590				-8.63	%			-38.68	%
Total Loans					4,056,135					3,980,789					3,723,125				1.89	%			8.94	%
Less - Allowance for Loan Losses					(49,746	)				(48,403	)				(47,278	)			2.77	%			5.22	%
Net Loans					4,006,389					3,932,386					3,675,847				1.88	%			8.99	%
Federal Home Loan Bank Stock					33,564					33,564					35,854				0.00	%			-6.39	%
Bank Premises and Equipment					49,100					49,384					47,646				-0.58	%			3.05	%
Goodwill and Core Deposit Intangible					137,293					139,924					141,103				-1.88	%			-2.70	%
Other Assets					234,964					231,836					220,711				1.35	%			6.46	%
Total Assets				$	5,192,094				$	5,124,564				$	4,899,766				1.32	%			5.97	%
Liabilities and Stockholders' Equity
Deposits
Demand Deposits				$	1,110,266				$	1,070,279				$	977,323				3.74	%			13.60	%
Savings and Interest Checking Accounts					1,536,439					1,560,523					1,424,060				-1.54	%			7.89	%
Money Market					840,723					807,796					744,682				4.08	%			12.90	%
Time Certificates of Deposit					630,419					639,535					641,468				-1.43	%			-1.72	%
Total Deposits					4,117,847					4,078,133					3,787,533				0.97	%			8.72	%
Borrowings
Federal Home Loan Bank and Other Borrowings					189,464					189,522					260,076				-0.03	%			-27.15	%
Wholesale Repurchase Agreements					50,000					50,000					50,000				0.00	%			0.00	%
Customer Repurchase Agreements					158,578					144,838					166,331				9.49	%			-4.66	%
Junior Subordinated Debentures					61,857					61,857					61,857				0.00	%			0.00	%
Subordinated Debentures					30,000					30,000					30,000				0.00	%			0.00	%
Total Borrowings					489,899					476,217					568,264				2.87	%			-13.79	%
Total Deposits and Borrowings					4,607,746					4,554,350					4,355,797				1.17	%			5.78	%
Other Liabilities					91,383					86,622					82,903				5.50	%			10.23	%
Stockholders' Equity
Common Stock					214					214					212				0.00	%			0.94	%
Additional Paid in Capital					237,859					236,279					232,845				0.67	%			2.15	%
Retained Earnings					258,481					251,429					232,369				2.80	%			11.24	%
Accumulated Other Comprehensive Loss, Net of Tax					(3,589	)				(4,330	)				(4,360	)			-17.11	%			-17.68	%
Total Stockholders' Equity					492,965					483,592					461,066				1.94	%			6.92	%
Total Liabilities and Stockholders' Equity				$	5,192,094				$	5,124,564				$	4,899,766				1.32	%			5.97	%

CONSOLIDATED STATEMENTS OF INCOME				Three Months Ended
																			% Change				% Change
				September 30,					June 30,					September 30,					Sept. 2012 vs.				Sept. 2012 vs.
				2012					2012					2011					June 2012				Sept. 2011
INTEREST INCOME
Interest on Fed Funds Sold and Short Term Investments				$	34				$	19				$	49				78.95	%			-30.61	%
Interest and Dividends on Securities					4,015					4,438					5,007				-9.53	%			-19.81	%
Interest on Loans					44,251					43,813					43,763				1.00	%			1.12	%
Interest on Loans Held for Sale					255					156					116				63.46	%			119.83	%
Total Interest Income					48,555					48,426					48,935				0.27	%			-0.78	%
INTEREST EXPENSE
Interest on Deposits					2,619					2,687					3,419				-2.53	%			-23.40	%
Interest on Borrowed Funds					3,098					3,111					3,842				-0.42	%			-19.36	%
Total Interest Expense					5,717					5,798					7,261				-1.40	%			-21.26	%
Net Interest Income					42,838					42,628					41,674				0.49	%			2.79	%
Less - Provision for Loan Losses					3,606					8,500					2,000				-57.58	%			80.30	%
Net Interest Income after Provision for Loan Losses					39,232					34,128					39,674				14.96	%			-1.11	%
NONINTEREST INCOME
Service Charges on Deposit Accounts					3,959					3,923					4,223				0.92	%			-6.25	%
Interchange and ATM Fees					2,422					2,399					2,005				0.96	%			20.80	%
Investment Management					3,723					3,827					3,491				-2.72	%			6.65	%
Mortgage Banking Income					1,445					1,463					907				-1.23	%			59.32	%
Increase in Cash Surrender Value of Life Insurance Policies					757					741					757				2.16	%			0.00	%
Proceeds from Life Insurance Policies					1,307					-					-				100.00	%			100.00	%
Loan Level Derivative Activity					1,047					1,371					295				-23.63	%			254.92	%
Gross Change on Write-Down of Certain Investments to Fair Value					403					(106	)				(318	)			-480.19	%			-226.73	%
Less: Portion of Other-Than-Temporary Impairment Losses Recognized in OCI					(403	)				30					290				-1443.33	%			-238.97	%
Net Loss on Write-Down of Certain Investments to Fair Value					-					(76	)				(28	)			-100.00	%			-100.00	%
Other Noninterest Income					1,448					1,335					665				8.46	%			117.74	%
Total Noninterest Income					16,108					14,983					12,315				7.51	%			30.80	%
NONINTEREST EXPENSE
Salaries and Employee Benefits					20,704					19,775					20,568				4.70	%			0.66	%
Occupancy and Equipment Expenses					4,218					4,234					4,107				-0.38	%			2.70	%
Data Processing and Facilities Management					1,144					1,099					1,152				4.09	%			-0.69	%
FDIC Assessment					775					830					691				-6.63	%			12.16	%
Merger and Acquisition Expenses					595					672					-				-11.46	%			100.00	%
Goodwill Impairment					2,227					-					-				100.00	%			100.00	%
Other Noninterest Expense					10,389					10,389					8,905				0.00	%			16.66	%
Total Noninterest Expense					40,052					36,999					35,423				8.25	%			13.07	%
INCOME BEFORE INCOME TAXES					15,288					12,112					16,566				26.22	%			-7.71	%
PROVISION FOR INCOME TAXES					3,687					3,238					4,607				13.87	%			-19.97	%
NET INCOME				$	11,601				$	8,874				$	11,959				30.73	%			-2.99	%
BASIC EARNINGS PER SHARE				$	0.54				$	0.41				$	0.56				31.71	%			-3.57	%
DILUTED EARNINGS PER SHARE				$	0.53				$	0.41				$	0.56				29.27	%			-5.36	%
BASIC AVERAGE SHARES					21,654,188					21,623,827					21,463,714
DILUTED AVERAGE SHARES					21,706,304					21,644,204					21,476,791
PERFORMANCE RATIOS:
Net Interest Margin (FTE)					3.72	%				3.80	%				3.84	%
Return on Average Assets					0.91	%				0.71	%				0.99	%
Return on Average Common Equity					9.39	%				7.34	%				10.28	%
RECONCILIATION TABLE - NON-GAAP FINANCIAL INFORMATION
NET INCOME				$	11,601				$	8,874				$	11,959				30.73	%			-2.99	%
Noninterest Income Components
Less - Proceeds from Life Insurance Policies, tax exempt					(1,307	)				-					-
Noninterest Expense Components
Add - Merger & Acquisition Expenses, net of tax					352					397					-
Add - Goodwill Impairment, net of tax					1,317					-					-
NET OPERATING EARNINGS				$	11,963				$	9,271				$	11,959				29.03	%			0.03	%
Diluted Earnings Per Share, on an Operating Basis				$	0.55				$	0.43				$	0.56				27.91	%			-1.79	%

CONSOLIDATED STATEMENTS OF INCOME
				Nine Months Ended										% Change
				September 30,					September 30,					Sept. 2012 vs.
				2012					2011					Sept. 2011
INTEREST INCOME
Interest on Fed Funds Sold and Short Term Investments				$	85				$	80				6.25	%
Interest and Dividends on Securities					13,010					16,065				-19.02	%
Interest on Loans					131,142					130,917				0.17	%
Interest on Loans Held for Sale					541					305				77.38	%
Total Interest Income					144,778					147,367				-1.76	%
INTEREST EXPENSE
Interest on Deposits					8,045					10,448				-23.00	%
Interest on Borrowed Funds					9,413					11,696				-19.52	%
Total Interest Expense					17,458					22,144				-21.16	%
Net Interest Income					127,320					125,223				1.67	%
Less - Provision for Loan Losses					13,706					7,682				78.42	%
Net Interest Income after Provision for Loan Losses					113,614					117,541				-3.34	%
NONINTEREST INCOME
Service Charges on Deposit Accounts					11,771					12,374				-4.87	%
Interchange and ATM Fees					7,189					5,681				26.54	%
Investment Management					11,113					10,310				7.79	%
Mortgage Banking Income					4,238					2,637				60.71	%
Increase in Cash Surrender Value of Life Insurance Policies					2,211					2,323				-4.82	%
Proceeds from Life Insurance Policies					1,307					-				100.00	%
Net Gain on Sale of Securities					-					723				-100.00	%
Loan Level Derivative Activity					2,747					1,241				121.35	%
Gross Change on Write-Down of Certain Investments to Fair Value					571					101				465.35	%
Less: Portion of Other-Than-Temporary Impairment Losses Recognize in OCI					(647	)				(305	)			112.13	%
Net Loss on Write-Down of Certain Investments to Fair Value					(76	)				(204	)			-62.75	%
Other Noninterest Income					4,500					3,301				36.32	%
Total Noninterest Income					45,000					38,386				17.23	%
NONINTEREST EXPENSE
Salaries and Employee Benefits					61,915					60,582				2.20	%
Occupancy and Equipment Expenses					12,752					12,946				-1.50	%
Data Processing and Facilities Management					3,418					3,828				-10.71	%
FDIC Assessment					2,354					2,760				-14.71	%
Merger and Acquisition Expenses					1,267					-				100.00	%
Goodwill Impairment					2,227					-				100.00	%
Other Noninterest Expense					30,477					28,644				6.40	%
Total Noninterest Expense					114,410					108,760				5.19	%
INCOME BEFORE INCOME TAXES					44,204					47,167				-6.28	%
PROVISION FOR INCOME TAXES					11,546					12,900				-10.50	%
NET INCOME				$	32,658				$	34,267				-4.70	%
BASIC EARNINGS PER SHARE				$	1.51				$	1.60				-5.63	%
DILUTED EARNINGS PER SHARE				$	1.51				$	1.60				-5.63	%
BASIC AVERAGE SHARES					21,613,157					21,401,885
DILUTED AVERAGE SHARES					21,644,457					21,434,337
Net Interest Margin (FTE)					3.78	%				3.94	%
Return on Average Assets					0.87	%				0.97	%
Return on Average Common Equity					9.01	%				10.10	%
RECONCILIATION TABLE - NON-GAAP FINANCIAL INFORMATION
NET INCOME				$	32,658				$	34,267				-4.70	%
Noninterest Income Components
Less - Net Gain on Sale of Securities, net of tax					-					(428	)
Less - Proceeds from Life Insurance Policies, tax exempt					(1,307	)				-
Noninterest Expense Components
Add - Merger & Acquisition Expenses, net of tax					749					-
Add - Goodwill Impairment, net of tax					1,317					-
NET OPERATING EARNINGS				$	33,417				$	33,839				-1.25	%
Diluted Earnings Per Share, on an Operating Basis				$	1.54				$	1.58				-2.53	%

RECONCILIATION TABLE - NON-GAAP FINANCIAL INFORMATION
				Three Months Ended																														Nine Months Ended
																			% Change					% Change																				% Change
				September 30,					June 30,					September 30,					Sept. 2012 vs.					Sept. 2012 vs.										September 30,					September 30,					Sept. 2012 vs.
				2012					2012					2011					June 2012					Sept. 2011										2012					2011					Sept. 2011
Noninterest Income GAAP				$	16,108				$	14,983				$	12,315					7.51	%				30.80	%								$	45,000				$	38,386				17.23	%
Less - Net Gain on Sale of Securities					-					-					-					n/a					n/a										-					(723	)			-100.00	%
Add - Other-Than-Temporary-Impairment on Securities					-					76					28					-100.00	%				-100.00	%									76					204				-62.75	%
Less - Proceeds from Life Insurance Policies, tax exempt					(1,307	)				-					-					-100.00	%				-100.00	%									(1,307	)				-				100.00	%
Noninterest Income as Adjusted				$	14,801				$	15,059				$	12,343					-1.71	%				19.91	%								$	43,769				$	37,867				15.59	%
Noninterest Expense GAAP				$	40,052				$	36,999				$	35,423					8.25	%				13.07	%								$	114,410				$	108,760				5.19	%
Less - Merger and Acquisition Expenses					(595	)				(672	)				-					-11.46	%				n/a										(1,267	)				-				100.00	%
Less - Goodwill Impairment					(2,226	)				-					-					n/a					n/a										(2,226	)				-				100.00	%
Noninterest Expense as Adjusted				$	37,231				$	36,327				$	35,423					2.49	%				5.10	%								$	110,917				$	108,760				1.98	%
ASSET QUALITY				Nonperforming Assets															Net Charge-Offs															Net Charge-Offs
				At															For the Three Months Ending															For the Nine Months Ending
				September 30,					June 30,					September 30,					September 30,					June 30,					September 30,					September 30,					September 30,
				2012					2012					2011					2012					2012					2011					2012					2011
Nonperforming Loans
Commercial & Industrial Loans				$	2,981				$	4,404				$	1,836				$	1,145				$	4,594				$	672				$	5,554				$	2,107
Commercial Real Estate Loans					9,249					9,371					10,673					433					2,133					(281	)				3,170					1,557
Small Business Loans					604					588					1,032					77					90					368					285					898
Residential Real Estate Loans					10,383					9,939					10,420					148					105					88					362					490
Home Equity					7,643					6,768					2,009					329					1,373					320					2,439					882
Installment Loans - Other					221					252					655					131					142					192					410					725
Total Nonperforming Loans / Total Net Charge-offs				$	31,081				$	31,322				$	26,625				$	2,263				$	8,437				$	1,359				$	12,220				$	6,659
Nonaccrual Securities					1,521					1,259					1,255
Other Assets in Possession					176					1					270
Other Real Estate Owned					8,751					11,275					8,497
Nonperforming Assets				$	41,529				$	43,857				$	36,647
Nonperforming Loans/Gross Loans					0.77	%				0.79	%				0.72	%
Allowance for Loan Losses/Nonperforming Loans					160.05	%				154.53	%				177.57	%
Gross Loans/Total Deposits					98.50	%				97.61	%				98.30	%
Allowance for Loan Losses/Total Loans					1.23	%				1.22	%				1.27	%
Net charge-offs to average loans (quarter annualized)																				0.22	%				0.86	%				0.15	%
Net charge-offs to average loans (year-to-date)																																			0.42	%				0.24	%
				Troubled Debt Restructurings
				At
				September 30,					June 30,					September 30,
				2012					2012					2011
Troubled Debt Restructurings on Accrual Status				$	46,823				$	40,184				$	35,633
Troubled Debt Restructurings on Nonaccrual Status					5,962					4,561					8,520
Total Troubled Debt Restructurings				$	52,785				$	44,745				$	44,153
				Three Months Ending					Three Months Ending					Three Months Ending
				September 30,					June 30,					September 30,
Nonperforming Assets Reconciliation				2012					2012					2011
Nonperforming Assets Beginning Balance				$	43,857				$	40,736				$	30,963
New to Nonperforming					7,981					18,895					12,937
Loans Charged-Off					(2,826	)				(8,768	)				(2,171	)
Loans Paid-Off					(3,837	)				(2,934	)				(2,708	)
Loans Transferred to Other Real Estate Owned/Other Assets					(347	)				(3,579	)				(1,458	)
Loans Restored to Accrual Status					(1,081	)				(3,946	)				(1,415	)
New to Other Real Estate Owned					347					3,579					1,458
Sale of Other Real Estate Owned					(2,708	)				(383	)				(300	)
Other					143					257					(659	)
Nonperforming Assets Ending Balance				$	41,529				$	43,857				$	36,647
				September 30,					June 30,					September 30,
Financial Ratios				2012					2012					2011
Book Value per Common Share				$	22.75				$	22.36				$	21.48
Tangible Common Book Value per Share (proforma to include the tax deductibility of goodwill) - Non-GAAP				$	17.28				$	16.80				$	15.85
Tangible Common Capital/Tangible Assets					7.04	%				6.89	%				6.72	%
Tangible Common Capital/Tangible Asset (proforma to include the tax deductibility of goodwill) - Non-GAAP					7.38	%				7.26	%				7.12	%
Capital Adequacy
Tier one leverage capital ratio (1)					8.62	%				8.68	%				8.59	%
Tier one common ratio (1)					9.09	%				9.13	%				9.02	%
(1) Estimated number for September 30, 2012

INDEPENDENT BANK CORP. SUPPLEMENTAL FINANCIAL INFORMATION
(Unaudited - Dollars in Thousands)				Three Months Ended
				September 30, 2012												June 30, 2012												September 30, 2011
								Interest												Interest												Interest
				Average				Earned/				Yield/				Average				Earned/				Yield/				Average				Earned/				Yield/
				Balance				Paid				Rate				Balance				Paid				Rate				Balance				Paid				Rate
Interest-Earning Assets:
Interest Earning Deposits with Banks, Federal Funds Sold, and Short Term Investments				$	53,650			$	34			0.25	%			$	30,890			$	19			0.25	%			$	78,285			$	49			0.25	%
Securities:
Trading Assets					-				-			-					-				-			-					8,437				72			3.39	%
Taxable Investment Securities					513,712				3,995			3.09	%				544,822				4,415			3.26	%				526,509				4,856			3.66	%
Nontaxable Investment Securities (1)					1,649				34			8.20	%				1,938				39			8.09	%				7,104				133			7.43	%
Total Securities:					515,361				4,029			3.11	%				546,760				4,454			3.28	%				542,050				5,061			3.70	%
Loans Held for Sale					34,106				255			2.97	%				20,079				156			3.12	%				12,422				116			3.70	%
Loans:
Commercial and Industrial					636,533				6,447			4.03	%				620,364				6,294			4.08	%				555,745				5,840			4.17	%
Commercial Real Estate (1)					1,920,905				23,173			4.80	%				1,896,941				22,973			4.87	%				1,800,914				23,496			5.18	%
Commercial Construction					162,150				1,695			4.16	%				149,627				1,578			4.24	%				129,540				1,495			4.58	%
Small Business					78,629				1,121			5.67	%				80,324				1,132			5.67	%				77,850				1,141			5.81	%
Total Commercial					2,798,217				32,436			4.61	%				2,747,256				31,977			4.68	%				2,564,049				31,972			4.95	%
Residential Real Estate					381,247				4,060			4.24	%				393,377				4,267			4.36	%				450,225				4,915			4.33	%
Residential Construction					11,567				104			3.58	%				15,041				161			4.31	%				6,735				73			4.30	%
Home Equity					787,052				7,236			3.66	%				757,850				6,939			3.68	%				638,991				6,103			3.79	%
Total Consumer Real Estate					1,179,866				11,400			3.84	%				1,166,268				11,367			3.92	%				1,095,951				11,091			4.01	%
Total Other Consumer					30,155				669			8.83	%				34,261				728			8.55	%				49,864				978			7.78	%
Total Loans					4,008,238				44,505			4.42	%				3,947,785				44,072			4.49	%				3,709,864				44,041			4.71	%
Total Interest-Earning Assets				$	4,611,355			$	48,823			4.21	%			$	4,545,514			$	48,701			4.31	%			$	4,342,621			$	49,267			4.50	%
Cash and Due from Banks					75,876												63,703												57,103
Federal Home Loan Bank Stock					33,564												33,564												35,854
Other Assets					374,208												362,746												345,400
Total Assets				$	5,095,003											$	5,005,527											$	4,780,978
Interest-bearing Liabilities:
Deposits:
Savings and Interest Checking Accounts				$	1,482,213			$	707			0.19	%			$	1,482,889			$	687			0.19	%			$	1,364,307			$	839			0.24	%
Money Market					801,921				615			0.31	%				799,831				621			0.31	%				723,736				763			0.42	%
Time Deposits					635,729				1,297			0.81	%				627,250				1,379			0.88	%				659,154				1,817			1.09	%
Total interest-bearing deposits:				$	2,919,863			$	2,619			0.36	%			$	2,909,970			$	2,687			0.37	%			$	2,747,197			$	3,419			0.49	%
Borrowings:
Federal Home Loan Bank and Other Borrowings				$	198,212			$	1,255			2.52	%			$	219,846			$	1,280			2.34	%			$	264,066			$	1,814			2.73	%
Wholesale Repurchase Agreements					50,000				292			2.32	%				50,000				289			2.32	%				50,000				412			3.27	%
Customer Repurchase Agreements					161,097				76			0.19	%				145,963				83			0.23	%				151,588				147			0.38	%
Junior Subordinated Debentures					61,857				928			5.97	%				61,857				918			5.97	%				61,857				922			5.91	%
Subordinated Debentures					30,000				547			7.25	%				30,000				541			7.25	%				30,000				547			7.23	%
Total Borrowings				$	501,166			$	3,098			2.46	%			$	507,666			$	3,111			2.46	%			$	557,511			$	3,842			2.73	%
Total Interest-Bearing Liabilities				$	3,421,029			$	5,717			0.66	%			$	3,417,636			$	5,798			0.68	%			$	3,304,708			$	7,261			0.87	%
Demand Deposits					1,093,387												1,023,048												944,518
Other Liabilities					89,157												78,430												70,380
Total Liabilities				$	4,603,573											$	4,519,114											$	4,319,606
Stockholders' Equity					491,430												486,413												461,372
Total Liabilities and Stockholders' Equity				$	5,095,003											$	5,005,527											$	4,780,978
Net Interest Income								$	43,106											$	42,903											$	42,006
Interest Rate Spread (2)												3.55	%											3.63	%											3.63	%
Net Interest Margin (3)												3.72	%											3.80	%											3.84	%
Supplemental Information:
Total Deposits, including Demand Deposits				$	4,013,250			$	2,619							$	3,933,018			$	2,687							$	3,691,715			$	3,419
Cost of Total Deposits												0.26	%											0.27	%											0.37	%
Total Funding Liabilities, including Demand Deposits				$	4,514,416			$	5,717							$	4,440,684			$	5,798							$	4,249,226			$	7,261
Cost of Total Funding Liabilities												0.50	%											0.53	%											0.68	%

(1)		The total amount of adjustment to present interest income and yield on a fully tax-equivalent basis is $268,000, $275,000, and $332,000 for the three months ended September 30, 2012, June 30, 2012, and September 30, 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.

				Nine Months Ended
				September 30, 2012												September 30, 2011
								Interest												Interest
				Average				Earned/				Yield/				Average				Earned/				Yield/
				Balance				Paid				Rate				Balance				Paid				Rate
Interest-Earning Assets:
Interest Earning Deposits with Banks, Federal Funds Sold, and Short Term Investments				$	45,951			$	85			0.25	%			$	43,181			$	80			0.25	%
Securities:
Trading Assets					1,823				38			2.78	%				8,388				206			3.28	%
Taxable Investment Securities					529,560				12,900			3.25	%				550,425				15,573			3.78	%
Nontaxable Investment Securities (1)					2,026				121			7.98	%				8,619				484			7.50	%
Total Securities:					533,409				13,059			3.27	%				567,432				16,263			3.83	%
Loans Held for Sale					23,829				541			3.03	%				11,750				305			3.47	%
Loans:
Commercial and Industrial					612,084				18,642			4.07	%				530,774				16,951			4.27	%
Commercial Real Estate (1)					1,888,773				68,881			4.87	%				1,779,379				70,310			5.28	%
Commercial Construction					151,541				4,816			4.25	%				127,285				4,388			4.61	%
Small Business					79,218				3,390			5.72	%				79,314				3,471			5.85	%
Total Commercial					2,731,616				95,729			4.68	%				2,516,752				95,120			5.05	%
Residential Real Estate					395,026				12,793			4.33	%				458,609				15,481			4.51	%
Residential Construction					12,739				395			4.14	%				5,005				172			4.59	%
Home Equity					754,294				20,835			3.69	%				622,952				17,645			3.79	%
Total Consumer Real Estate					1,162,059				34,023			3.91	%				1,086,566				33,298			4.10	%
Total Other Consumer					34,355				2,168			8.43	%				56,688				3,305			7.79	%
Total Loans					3,928,030				131,920			4.49	%				3,660,006				131,723			4.81	%
Total Interest-Earning Assets				$	4,531,219			$	145,605			4.29	%			$	4,282,369			$	148,371			4.63	%
Cash and Due from Banks					65,972												55,101
Federal Home Loan Bank Stock					34,133												35,854
Other Assets					368,140												329,456
Total Assets				$	4,999,464											$	4,702,780
Interest-bearing Liabilities:
Deposits:
Savings and Interest Checking Accounts				$	1,463,255			$	2,091			0.19	%			$	1,340,077			$	2,449			0.24	%
Money Market					790,589				1,875			0.32	%				723,675				2,362			0.44	%
Time Deposits					629,840				4,079			0.87	%				667,279				5,636			1.13	%
Total interest-bearing deposits:				$	2,883,684			$	8,045			0.37	%			$	2,731,031			$	10,447			0.51	%
Borrowings:
Federal Home Loan Bank and Other Borrowings				$	214,747			$	3,879			2.41	%			$	293,664			$	5,468			2.49	%
Wholesale Repurchase Agreements					50,000				870			2.32	%				50,000				1,455			3.89	%
Customer Repurchase Agreements					155,205				268			0.23	%				137,221				412			0.40	%
Junior Subordinated Debentures					61,857				2,766			5.97	%				61,857				2,738			5.92	%
Subordinated Debentures					30,000				1,630			7.26	%				30,000				1,624			7.24	%
Total Borrowings				$	511,809			$	9,413			2.46	%			$	572,742			$	11,697			2.73	%
Total Interest-Bearing Liabilities				$	3,395,493			$	17,458			0.69	%			$	3,303,773			$	22,144			0.90	%
Demand Deposits					1,034,180												882,460
Other Liabilities					85,410												62,968
Total Liabilities				$	4,515,083											$	4,249,201
Stockholders' Equity					484,381												453,579
Total Liabilities and Stockholders' Equity				$	4,999,464											$	4,702,780
Net Interest Income								$	128,147											$	126,227
Interest Rate Spread (2)												3.60	%											3.73	%
Net Interest Margin (3)												3.78	%											3.94	%
Supplemental Information:
Total Deposits, including Demand Deposits				$	3,917,864			$	8,045							$	3,613,491			$	10,447
Cost of Total Deposits												0.27	%											0.39	%
Total Funding Liabilities, including Demand Deposits				$	4,429,673			$	17,458							$	4,186,233			$	22,144
Cost of Total Funding Liabilities												0.53	%											0.71	%

(1)		The total amount of adjustment to present interest income and yield on a fully tax-equivalent basis is $827,000 and $1.0 million for the nine months ended September 30, 2012 and 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.
Certain amounts in prior year financial statement have been reclassified to conform to the current year's presentation.