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United States
Securities and Exchange Commission
Washington, D.C. 20549
FORM 10-K
ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the fiscal year ended December 31, 1995
or
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from ____ to ____
Commission File Number: 1-9047
Independent Bank Corp.
(Exact name of registrant as specified in its charter)
Massachusetts 04-2870273
(State or other jurisdiction of (I.R.S. Employer Identification No.)
incorporation or organization)
288 Union Street
Rockland, Massachusetts 02370
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (617) 878-6100
Securities registered pursuant to Section 12(b) of the Act:
Title of each class Name of each exchange on which registered
None None
Securities registered pursuant to section 12(g) of the Act:
Common Stock, $.0l par value per share
(Title of Class)
Preferred Stock Purchase Rights
(Title of Class)
Indicate by check mark whether, the registrant (1) has filed all reports
required by Section 13 or 15(d) of the Securities Exchange Act of 1934
during the preceding 12 months and (2) has been subject to such filing
requirements for the past 90 days.
X Yes No
Indicate by check mark if disclosure of delinquent filers pursuant to Item
405 of Regulation S-K is not contained herein, and will not be contained,
to the best of registrant's knowledge, in definitive proxy or information
statements incorporated by reference in Part III of this Form 10-K or any
amendment to this Form 10-K.
As of February 29, 1996, the aggregate market value of the 12,082,149
shares of Common Stock of the Registrant issued and outstanding on such
date, excluding 2,448,909 shares held by all directors and executive
officers of the Registrant as group, was $84,575,043. This figure is based
on the closing sale price of $7.00 per share on February 29, 1996, as
reported in The Wall Street Journal on March 1, 1996.
Number of shares of Common Stock outstanding as of February 29, 1996:
14,531,058
DOCUMENTS INCORPORATED BY REFERENCE
List hereunder the following documents incorporated by reference and the
Part of Form 10-K into which the document is incorporated:
(1) Portions of the Registrant's Annual Report to Stockholders for the
fiscal year ended December 31, 1995 are incorporated into Part II,
Items 5-8 of this Form 10-K.
(2) Portions of the Registrant's definitive proxy statement for its 1996
Annual Meeting of Stockholders are incorporated into Part III, Items
10-13 of this Form 10-K.
PART 1.
Item 1. Business
General. Independent Bank Corp. (the "Company")
is a state chartered, federally registered bank holding
company headquartered in Rockland, Massachusetts. The
Company is the sole stockholder of Rockland Trust
Company ("Rockland" or "the Bank"), a Massachusetts
trust company chartered in 1907. Rockland offers a
full range of commercial and retail banking and trust
services through its network of 33 banking offices, seven
commercial lending centers, and two trust and financial
services offices located throughout Plymouth,
Norfolk, and Bristol Counties in Southeastern
Massachusetts. At December 31, 1995, the Company had
total assets of $987.6 million, total deposits of $871.1
million, and stockholders' equity of $72.6 million. It
should be noted that the 1995 year-end asset and deposit
balances are inflated by a $17 million deposit made on the
last day of the year which was subsequently withdrawn on the
first business day in January, 1996.
Rockland has a deep rooted history as a community
oriented commercial bank. As a result of its strong
commitment to the local business community, the Bank has
become one of the prominent financial institutions in
Plymouth County which represents the majority of its market
area. The Bank had approximately 16.9% of the total
deposits within Plymouth County as of June 30, 1995, the
most recent date for which such data is available, or almost
157% of the market share of its nearest competitor. In
addition, Rockland has been the leading originator of
mortgages in Plymouth County for the last four years. Due
to the continuing consolidation within the financial
services industry, Rockland is the only remaining locally
based commercial bank in Plymouth County.
The Company experienced significant growth and
profitability during the early and mid-1980's as the New
England economy prospered. Total assets surpassed the $1
billion level and earnings reached record levels. However,
with the onset of an economic recession in New England in
the late 1980's, and a resulting significant decline in
local real estate values, the Company experienced serious
financial problems. The quality of the loan portfolio
declined sharply as nonperforming assets rose to over 10% of
total assets. This deterioration required significant loan
loss provisions which resulted in the Company reporting
substantial losses in 1990 and 1991.
After implementing a number of managerial, operational,
and financial changes during 1991 and 1992, the Company
returned to profitability in 1992. In December of that
year, the Company issued 9.2 million shares of common stock,
strengthening its capital base. These measures contributed
to improved operating results for the Company which recorded
net income of $4.6 million and $8.1 million for the years
ended December 31, 1993 and 1994, respectively. The
improvement in 1994 earnings over 1993 was primarily
attributable to higher net interest income and a lower
provision for possible loan losses.
For the year ended December 31, 1995, the Company
recorded net income of $10.4 million, an increase of 28.0%
over 1994 earnings. The improved 1995 results were
principally due to higher net interest income and lower non
interest expenses. Net interest income of $43.9 million was
$2.4 million higher than 1994 due to increased interest
income. The decline in non-interest expenses is
attributable to lower legal fees and other real estate owned
(OREO) expenses and a reduction in the FDIC insurance
assessment.
The Company is registered as a bank holding company
under the Bank Holding Company Act of 1956 ("BHCA"), as
amended, and as such is subject to regulation by the Board
of Governors of the Federal Reserve System ("Federal
Reserve"). The Company is also regulated by the
Commissioner of Banks of the Commonwealth ofMassachusetts
("Commissioner"). Rockland is subject to regulation and
examination by the Commissioner and the Federal Deposit
Insurance Corporation ("FDIC"). The majority of Rockland's
deposit accounts are insured to the maximum extent permitted by
law by the Bank Insurance Fund ("BIF") which is
administered by the FDIC. In 1994, the Bank purchased
the deposits of three branches of a failed savings and
loan association from the Resolution Trust Corporation.
These deposits are insured to the maximum extent permitted by
law by the Savings Association Insurance Fund ("SAIF").
Lending Activities
General. The Bank's gross loan portfolio amounted
to $638.0 million on December 31, 1995, or 64.6% of
total assets on that date. The Bank classifies
loans as commercial, real estate, or consumer. Commercial
loans consist primarily of loans to businesses for working
capital and other business related purposes and floor plan
financing. Real estate loans are comprised of commercial
mortgages which are secured by nonresidential
properties, residential mortgages which are secured
primarily by owner occupied residences, home equity
loans, and mortgages for the construction of commercial
and residential properties. Consumer loans consist of
instalment obligations, the majority of which are
automobile loans, and other consumer loans.
The Bank's borrowers consist of small-to-medium
sized businesses and retail customers. The Bank's market
area is generally comprised of Plymouth, Norfolk,
and Bristol Counties located in Southeastern Massachusetts.
Substantially all of the Bank's commercial and consumer
loan portfolios consist of loans made to residents
of and businesses located in Southeastern Massachusetts.
Virtually all of the real estate loans in the Bank's
loan portfolio are secured by properties located within
this market area. On December 31 1995, approximately
$3.2 million of real estate loans, including
approximately $1.3 million of residential mortgages,
were secured by properties located outside of Southeastern
Massachusetts.
In accordance with governing banking statutes,
Rockland is permitted, with certain exceptions, to make
loans and commitments to any one borrower, including
related entities, in the aggregate amount of not more than 20%
of stockholders' equity, or $14.5 million at December 31,
1995. Notwithstanding the foregoing, the Bank has
established a more restrictive limit of not more than 15%
of stockholders' equity, or $10.9 million at December 31,
1995, which limit may be exceeded with the approval of
the Board of Directors. There were no borrowers whose
total indebtedness aggregated or exceeded $10.9 million as
of December 31, 1995.
The Bank's principal earning assets are its
loans. Although the Bank judges its borrowers to be
creditworthy, the risk of deterioration in borrowers'
abilities to repay their loans in accordance with
their existing loan agreements is inherent in any lending
function. Participating as a lender in the credit markets
requires a strict monitoring process to minimize credit risk.
This process requires substantial analysis of the loan
application, an evaluation of the customer's capacity to
repay according to the loan's contractual terms, and
an objective determination of the value of the collateral.
The Bank also utilizes the services of an independent
third party consulting firm to provide loan review
services.
The Bank's Controlled Asset Department is
responsible for the management and resolution of
nonperforming assets. In the course of resolving
nonperforming loans, the Bank may choose to
restructure certain contractual provisions. In
order to facilitate the disposition of other real
estate owned (OREO), the Bank may finance the purchase
of such properties at market rates if the borrower
qualifies under the Bank's standard underwriting
guidelines.
Loan Portfolio Composition and Maturity. The following
table sets forth information concerning the composition of the
Bank's loan portfolio by loan type at the dates indicated.
At December 31,
1995 1994 1993
Amount Percent Amount Percent Amount Percent
Commercial $121,679 19.1% $122,944 20.5% $117,332 23.8%
Real estate:
Commercial 187,608 29.4 169,693 28.4 142,619 29.0
Residential 187,652 29.4 184,958 30.9 155,182 31.5
Construction 27,863 4.4 28,892 4.8 20,147 4.1
Consumer:
Instalment 102,088 16.0 80,441 13.4 46,909 9.5
Other 11,076 1.7 11,882 2.0 10,415 2.1
Gross Loans 637,966 100.0% 598,810 100.0% 492,6046 100.0%
Unearned
Discount 9,825 8,121 5,020
Reserve for
Possible
Loan Losses 12,088 13,719 15,485
Net Loans $616,053 $576,970 $472,099
1992 1991
Amount Percent Amount Percent
Commercial $133,192 26.4% $165,675 27.9%
Real estate:
Commercial 129,803 25.7 127,799 21.6
Residential 163,426 32.4 146,122 24.7
Construction 26,416 5.2 51,674 8.7
Consumer:
Instalment 45,454 9.1 69,850 11.8
Other 6,015 1.2 31,650 5.3
Gross Loans 504,306 100.0% 592,770 100.0%
Unearned
Discount 5,254 9,304
Reserve for
Possible
Loan Losses 15,971 16,165
Net Loans $483,081 $567,301
The Company's outstanding loans grew by 6.8% in
1995, following a 22.2% increase in 1994. This loan
growth, which was primarily centered in commercial
mortgages and instalment loans, is a result of sales programs
implemented by the Bank over the past three years and an
opportunity to expand the Bank's customer base as a result of
the consolidation of its larger competitors.
Commercial loans decreased $1.3 million, or 1.0%,in
1995, following an increase of $5.6 million, or 4.8%,in
1994. The decline in commercial loans in 1995 is due to
the rate of loan repayments exceeding the volume of new
loan originations, as well as lower utilization of credit
lines by commercial borrowers in late 1995 as compared
to late 1994. The 1994 growth was primarily attributable
to an increase in floor plan loans.
Real estate loans comprised 63.2% of gross loans at
December 31, 1995, as compared to 64.1% at December
31, 1994. Commercial real estate loans have reflected
increases over the last two years of $17.9 million, or
10.6%, in 1995, and $27.1 million, or 19.0%, in 1994. These
increases are indicative of the improving prospects for small
and medium sized businesses in the Bank's slowly recovering
market area. Residential real estate loans increased $2.7 million,
or 1.5%, in 1995 as the Bank sold most of the residential
mortgage loans originated during the year. In 1994,
residential real estate loans increased $29.8 million, or 19.2%,
due to a management decision to retain more adjustable rate
residential mortgages in the portfolio and a rising interest rate
environment which depressed secondary market sales potential.
During 1995, the Bank sold $16 million of residential mortgages
as part of overall asset/liability management. Real estate construction
loans declined $1.0 million, or 3.6%, in 1995 following an
increase of $8.7 million, or 43.4%, in 1994.
Consumer instalment loans increased $21.6 million, or 26.9%,
and $33.5 million, or 71.5%, during 1995 and 1994, respectively.
The increases over the past two years are attributed to a focused
effort directed at establishing solid banking relationships with new
and used automobile dealers within the market area. As a result, strong
growth was reported in 1995 and 1994. Since the sale of the Bank's
credit card portfolio during 1991 and 1992, other consumer loans have
consisted primarily of cash reserve loans. Introduced in 1992, cash
reserve loans are designed to afford the Bank's customers overdraft
protection. The balances of these loans declined $.8 million, or 6.8%,
in 1995 following an increase of $1.5 million, or 14.1%, in 1994.
The following table sets forth the scheduled contractual amortization
of the Bank's loan portfolio at December 31, 1995. Loans having no
schedule of repayments or no stated maturity are reported as due in one
year or less. The following table also sets forth the rate
structure of loans scheduled to mature after one year.
Real Real Real
Commercial Estate Estate Estate
Commercial Residential Construction
(Thousands)
Amounts due in:
One year or less $98,965 $72,777 $84,386 $27,863
After one year
through five 21,374 107,880 63,639 ---
years
Beyond five years 1,340 6,951 39,627 ---
Total $121,679 $187,608 $187,652 $27,863
Interest rates on
amounts due after
one year:
Fixed Rate $22,714 $98,315 $44,552 $ ---
Adjustable Rate ___ 16,516 58,714 ---
Consumer - Consumer -
Instalment Other Total
Amounts due in:
One year or less $34,453 $--- $318,444
After one year
through five 65,297 11,076 269,266
years
Beyond five years 2,338 --- 50,256
Total $102,088 $11,076 $637,966
Interest rates on
amounts due after
one year:
Fixed Rate $67,635 $--- $233,216
Adjustable Rate --- 11,076 86,306
Generally, the average actual maturity of loans is
substantially less than their average contractual maturity
due to prepayments and, in the case of real estate loans,
due-on-sale clauses, which generally give the Bank the right
to declare a loan immediately due and payable in the event
that, among other things, the borrower sells the property
subject to the mortgage and the loan is not repaid. The
average life of real estate loans tends to increase when
current real estate loan rates are higher than rates on
mortgages in the portfolio and, conversely, tends to
decrease when rates on mortgages in the portfolio are higher
than current real estate loan rates. Under the latter
scenario, the weighted average yield on the portfolio tends
to decrease as higher yielding loans are repaid or
refinanced at lower rates. Due to the fact that the Bank
will, consistent with industry practice, "roll over" a
significant portion of commercial and commercial real estate
loans at or immediately prior to their maturity by renewing
the loans on substantially similar or revised terms, the
principal repayments actually received by the Bank are
anticipated to be significantly less than the amounts
contractually due in any particular period. In addition, a
loan, or a portion of a loan, may not be repaid due to the
borrower's inability to satisfy the contractual obligations
of the loan. As of December 31, 1995, $1.3 million of loans
scheduled to mature within one year were nonperforming. See
"Lending Activities - Nonperforming Assets."
Origination of Loans. The Bank accepts applications
for commercial loans at any of its seven commercial lending
centers. Commercial loan applications are obtained through
existing customers, solicitation by Bank loan officers,
referrals from current or past customers, or walk-in
customers. Commercial real estate loan applications are
obtained primarily from previous borrowers, direct contacts
with the Bank, or referrals. Applications for residential
real estate loans and all types of consumer loans are taken
at all of the Bank's full-service branch offices.
Residential real estate loan applications primarily result
from referrals by real estate brokers, home builders, and
existing or walk-in customers. The Bank also maintains a
staff of field originators who solicit and refer residential
real estate loan applications to the Bank. These employees
are compensated on a commission basis and provide convenient
origination services during banking and nonbanking hours.
Consumer loan applications are directly obtained through
existing or walk-in customers who have been made aware of
the Bank's consumer loan services through advertising and
other media, as well as indirectly through a network of
automobile dealers who are financed by the Bank.
Commercial loans, commercial real estate loans, and
construction loans may be approved by commercial loan
officers up to their individually assigned lending limits
which are established and modified periodically to reflect
the officer's expertise and experience. Commercial lending
center managers are seasoned lending officers with
considerable experience in commercial loan underwriting.
Generally, commercial loans, commercial real estate loans,
and construction loans in amounts between $150,000 and
$250,000 must be approved by the respective commercial
lending center manager. Loans over $250,000 up to and
including $500,000 must be approved by one of two Commercial
Loan Regional Managers or the Executive Vice President
Commercial Lending Division. Loans over $500,000 up to and
including $2.0 million must be approved by the Senior Loan
Committee. This committee is comprised of the Bank's
President and Chief Executive Officer, the Executive Vice
President - Commercial Lending Division (Committee
Chairman), the Senior Credit Administrator, and the Bank's
two Regional Lending Managers. All loans where
relationships in the aggregate are over $2.0 million must be
approved by the Executive Committee of the Board of
Directors.
Residential real estate loans which conform to
requirements for resale in the secondary market are approved
by the Bank's residential mortgage underwriters. Non-
conforming residential mortgage loans up to $500,000 may be
approved by the Executive Vice President - Retail and
Operations Division or the Senior Vice President - Consumer
Mortgage Department. Loans over $500,000 are approved by
the Senior Loan Committee. Home equity loans up to $100,000
may be approved by the Bank's home equity loan underwriter.
Home equity loans in excess of this amount up to $200,000
may be approved by the Consumer Loan Administrator and
thereafter, loans in an amount up to $500,000 may be
approved by the Executive Vice President - Retail and
Operations Division. Home equity loans over $500,000 must
be approved by the Senior Loan Committee.
Sale of Loans. The Bank's owner-occupied residential
real estate loans are generally originated in compliance
with terms, conditions and documentation which permit the
sale of such loans to the Federal Home Loan Mortgage
Corporation ("FHLMC"), the Federal National Mortgage
Association ("FNMA"), the Government National Mortgage
Association ("GNMA"), and other institutional investors in
the secondary market. Substantially all fixed rate, long
term residential mortgages originated by the Bank are sold
without recourse in the secondary market. Loan sales in the
secondary market provide funds for additional lending and
other banking activities. The Bank generally retains the
servicing on all loans sold. As part of its asset/liability
management strategy, the Bank may retain a portion of
adjustable rate residential real estate loans or fixed-rate
residential real estate loans with maturities of 15 years or
less. In 1995, the Bank retained $28.0 million of
residential real estate loans in its portfolio, which
constituted 45.8% of all residential real estate loans
originated during the year.
The principal balance of loans serviced by the Bank
amounted to $246.6 million at December 31, 1995 and $225.7
million at December 31, 1994. Under its mortgage servicing
arrangements, the Bank generally continues to collect
payments on loans, to inspect the mortgaged property, to
make insurance and tax advances on behalf of borrowers and
to otherwise service the loans and receives a fee for
performing these services. Net servicing fee income
amounted to $704,000 and $412,000 for the years ended
December 31, 1995 and 1994, respectively. Unamortized loan
origination fees which relate to loans sold by the Bank are
recognized as non-interest income at the time of the loan
sale. Under its sales agreements, the Bank pays the
purchaser of mortgage loans a specified yield on the loans
sold. The difference, after payment of any guarantee fee,
is retained by the Bank and recognized as fee income over
the life of the loan. In addition, loans may be sold at a
premium or a discount with any resulting gain or loss
recognized at the time of sale. For the years ended
December 31, 1995, and 1994, the Bank recognized net gains
on the sales of mortgages of $18,000 and $29,000,
respectively.
Commercial Loans. The Bank offers secured and
unsecured commercial loans for business purposes, including
issuing letters of credit. The Bank's commercial loans
decreased $1.3 million, or 1.0%, in 1995, following an
increase of $5.6 million, or 4.8%, in 1994. At December 31,
1995, $121.7 million, or 19.1%, of the Bank's gross loan
portfolio consisted of commercial loans, compared to $122.9
million, or 20.5%, of the Bank's gross loan portfolio at
December 31, 1994 and $117.3 million, or 23.8 %, of the
gross loan portfolio at December 31, 1993.
Commercial loans are generally provided to small-to
medium-sized businesses located within the Company's market
area. Commercial loans may be structured as term loans or
as revolving lines of credit. Commercial term loans
generally have a repayment schedule of five years or less,
and although the Bank does originate some commercial term
loans with interest rates which float in relation to the
Rockland base rate, the majority of commercial term loans
have fixed rates of interest. Generally, Rockland's base
rate is determined by reference to the Wall Street Journal
prime rate. The Bank's base rate is monitored by the
Executive Vice President - Commercial Lending Division, and
revised when appropriate in accordance with guidelines
established by the Asset/Liability Management Committee. The
majority of commercial term loans are collateralized by
equipment, machinery or other corporate assets. In
addition, the Bank generally obtains personal guarantees
from the principals of the borrower.
The Bank's commercial revolving lines of credit
generally are for the purpose of providing working capital
to the borrower and may be secured or unsecured. Collateral
for commercial revolving lines of credit may consist of
inventory or accounts receivable or both, as well as other
corporate assets. Generally, the Bank will lend up to 80%
of accounts receivable, provided that such receivables have
not aged more than 60 days and/or up to 20% to 40% of the
value of raw materials and finished goods inventory securing
the line. Commercial revolving lines of credit generally
are reviewed on an annual basis and usually require
substantial repayment of principal during the year. At
December 31, 1995, the Bank had $29.8 million outstanding
under commercial revolving lines of credit, and $42.0
million of unused commitments under such lines on that date.
The Bank's commercial loans also include any advances
which might be made under standby letters of credit, which
are unconditional commitments on the part of the Bank to
lend up to a stated dollar amount within a specified period
of time on behalf of the customer, assuming the terms and
conditions specified in the standby letter of credit are
satisfied. The Bank's standby letters of credit generally
are secured, have terms of not more than one year, and are
reviewed for renewal. As of December 31, 1995, the Bank had
$2.4 million in outstanding commitments pursuant to standby
letters of credit.
The Bank also provides automobile and, to a lesser
extent, boat and other vehicle floor-plan financing. Floor
plan loans which are secured by the automobiles, boats, or
other vehicles constituting the dealer's inventory amounted
to $17.7 million as of December 31, 1995. Upon the sale of
a floor-plan unit, the proceeds of the sale are applied to
reduce the loan balance. In the event a unit financed under
a floor-plan line of credit remains in the dealer's
inventory for an extended period, the amount of the line is
reduced with respect to such unit. Bank personnel make
unannounced monthly inspections of each dealer to review the
value and condition of the underlying collateral.
Real Estate Loans. The Bank's real estate loans
consist of loans secured by commercial properties, loans
secured by owner-occupied residences, home equity loans, and
construction loans. As of December 31, 1995, the Bank's
loan portfolio included $187.6 million in commercial real
estate loans, $141.5 million in residential real estate
loans, $46.2 million in home equity loans, and $27.9 million
in construction loans.
The majority of the Bank's commercial real estate loans
are made to finance the development of residential projects.
As such, commercial real estate loans are primarily secured
by residential development tracts and, to a lesser extent,
owner-occupied commercial and industrial buildings and
warehouses. Commercial real estate loans also include multi
family residential loans which are primarily secured by
condominiums and, to a lesser extent, apartment buildings.
The Bank does not emphasize loans secured by special purpose
properties, such as hotels, motels, or restaurants.
Although terms vary, commercial real estate loans
generally have maturities of three years or less,
amortization periods of 15 or 20 years, and interest rates
which either float in accordance with a designated index or
have fixed rates of interest. The Bank's adjustable-rate
commercial real estate loans generally are indexed off of
the Rockland base rate. Loan-to-value ratios on commercial
real estate loans generally do not exceed 80% (70% for
special purpose properties) of the appraised value of the
property. In addition, as part of the criteria for
underwriting permanent commercial real estate loans, the
Bank generally imposes a debt service coverage ratio of not
less than 120%. It is also the Bank policy to obtain
personal guarantees from the principals of the borrower on
commercial real estate loans and to obtain periodic
financial statements from all commercial and multi-family
borrowers on an annual basis and, in some cases, more
frequently.
Commercial real estate lending entails additional risks
as compared to residential real estate lending. Commercial
real estate loans typically involve larger loan balances to
single borrowers or groups of related borrowers.
Development of commercial real estate projects also may be
subject to numerous land use and environmental issues. The
payment experience on such loans is typically dependent on
the successful operation of the real estate project which
can be significantly impacted by supply and demand
conditions in the market for commercial and retail space.
Rockland originates both fixed-rate and adjustable-rate
residential real estate loans. The Bank will lend up to 95%
of the lesser of the appraised value of the property
securing the loan or the purchase price, and generally
requires borrowers to obtain private mortgage insurance when
the amount of the loan exceeds 80% of the value of the
property. The rates of these loans are typically
competitive with market rates. As previously noted, the
Bank's residential real estate loans are generally
originated only under terms, conditions and documentation
which permit sale in the secondary market.
The Bank generally requires title insurance protecting
the priority of its mortgage lien, as well as fire and
extended coverage casualty insurance in order to protect the
properties securing its residential and other real estate
loans. Properties securing all of the Bank's real estate
loans are appraised by independent appraisers.
Home equity loans may be made as a term loan or under a
revolving line of credit secured by a second mortgage on the
borrower's residence. The Bank will originate home equity
loans in an amount up to 80% of the appraised value or,
without appraisal, up to 70% of the tax assessed value,
whichever is lower, reduced for any loans outstanding
secured by such collateral. As of December 31, 1995, there
was $29.8 million in unused commitments under revolving home
equity lines of credit.
Construction loans are intended to finance the
construction of residential and commercial properties,
including loans for the acquisition and development of land.
Construction loans generally have terms of six months to two
years and do not provide for amortization of the loan
balance during the term. The Bank's construction loans have
floating rates of interest based upon the Rockland base rate
or, in some cases, the Wall Street Journal prime rate.
A significant portion of the Bank's construction
lending has been related to one-to-four family residential
development within the Bank's market area. The Bank
typically has focused its construction lending on relatively
small projects and the Bank has developed and maintains a
relationship with a significant number of homebuilders in
Plymouth, Norfolk, and Bristol Counties As of December 31,
1995, $11.8 million, or 42.2%, of total construction loans
at such date were for the acquisition and development of
onetofour family residential lots or the construction of
onetofour family residences.
The Bank evaluates the feasibility of construction
projects based upon appraisals of the project performed by
independent appraisers. In addition, the Bank may obtain
architects' or engineers' estimations of the cost of
construction. The Bank generally requires the borrower to
fund at least 20% of the project costs and generally does
not provide for an interest reserve in its construction
loans. The Bank's construction loans generally do not
exceed 80% of the lesser of the appraised value upon
completion or the sales price. Land acquisition and
development loans generally do not exceed the lesser of 70%
of the appraised value (without improvements) or the
purchase price. The Bank's loan policy requires that
permanent mortgage financing be secured prior to extending
any non-residential construction loans. In addition, the
Bank generally requires that the units securing its
residential construction loans be pre-sold. Loan proceeds
are disbursed in stages after inspections of the project
indicate that the required work has been performed and that
such disbursements are warranted.
Construction loans are generally considered to present
a higher degree of risk than permanent real estate loans. A
borrower's ability to complete construction may be affected
by a variety of factors such as adverse changes in interest
rates and the borrower's ability to control costs and adhere
to time schedules. The latter will depend upon the
borrower's management capabilities, and may also be affected
by strikes, adverse weather and other conditions beyond the
borrower's control.
Consumer Loans. The Bank makes loans for a wide
variety of personal and consumer needs. Consumer loans
primarily consist of instalment loans and cash reserve
loans. As of December 31, 1995, $113.2 million, or 17.7%, of
the Bank's gross loan portfolio consisted of consumer loans.
The Bank's instalment loans consist primarily of
automobile loans, which amounted to $85.6 million at
December 31, 1995. A substantial portion of the
Bank's automobile loans are originated indirectly by a
network of over 95 new and used automobile dealers located within
the Bank's market area. Indirect automobile loans
accounted for approximately 75.6% and 74.6% of the Bank's
total instalment loan originations during 1995 and 1994,
respectively. The increase in indirect automobile loan
originations in 1995 and 1994 reflects the effect of a focused
program undertaken by the Bank to improve business relationships with
automobile dealers within its market area. Although applications
for such loans are taken by employees of the dealer, the
loans are made pursuant to Rockland's underwriting standards
using Rockland's documentation, and all indirect loans must be
approved by a Rockland loan officer. In addition to indirect automobile
lending, the Bank also originates automobile loans directly.
The maximum term for the Bank's automobile loans is 66
months for a new car loan and 48 months with respect to
a used car loan. The Bank will lend up to 100% of
the purchase price of a new automobile or, with respect to
used cars, up to 100% of the lesser of the purchase price
or the National Automobile Dealer's Association book
value. Loans on new automobiles are generally made
without recourse to the dealer. The Bank requires all
borrowers to maintain automobile insurance, including full
collision, fire and theft, with a maximum allowable deductible and
with the Bank listed as loss payee. The majority of the
Bank's loans on used automobiles are made with recourse to the dealer,
who is required to pay off the loan balance upon the
Bank's repossession of the financed vehicle, provided that
the Bank delivers the vehicle to the dealer within 120
days of the loan due date. In addition, in order to
ameliorate the adverse effect on interest income caused
by prepayments, all dealers are required to maintain a
reserve, ranging from 0% to 3% of the outstanding balance,
which is rebated to the customer on a pro-rata basis in the event
of repayment prior to maturity.
The Bank's instalment loans also include loans
secured by deposit accounts, loans to purchase
motorcycles, recreational vehicles, motor homes, boats, or mobile
homes. As of December 31, 1995, instalment loans
other than automobile loans amounted to $16.1
million. The Bank generally will lend up to 100% of
the purchase price of vehicles other than automobiles with
terms of up to three years for motorcycles and up to
fifteen years for recreational vehicles.
Cash reserve loans are made pursuant to
previously approved unsecured cash reserve lines of
credit. The rate on these loans is subject to change
due to market conditions. As of December 31, 1995, an additional
$13.9 million had been committed to but was unused
under cash reserve lines of credit.
Nonperforming Assets. The following table sets forth
information regarding nonperforming assets held by the
Bank at the dates indicated.
December 31,
1995 1994 1993 1992 1991
Loans past
due 90 days
or more but
still
accruing $553 $598 $1,042 $2,877 $5,059
Loans
accounted
for on a
nonaccrual
basis (1) 4,718 7,266 15,940 25,925 39,103
Total
nonperforming
loans 5,271 7,864 16,982 28,802 44,162
Other real
estate owned 638 3,866 8,884 11,655 20,180
Loans held
for sale --- --- --- 4,257 ---
Total
nonperforming
assets $5,909 $11,730 $25,866 $44,714 $63,342
Restructured
loans $2,629 $2,898 $4,202 $6,875 $727
Nonperforming
loans as a
percent of
gross loans 0.83% 1.31% 3.45% 5.71% 7.45%
Nonperforming
assets as a
percent of
total assets 0.60% 1.26% 3.12% 5.54% 7.60%
(1) Includes $.6 million, $1.1 million, $1.4 million, $4.6
million, and $.7 million of restructured loans at December 31, 1995, 1994,
1993, 1992, and 1991, respectively, which were included in nonaccrual loans
as of such dates.
Gross interest income that would have been recognized
for the years ended December 31, 1995 and 1994 if
nonperforming loans at the respective dates had been
performing in accordance with their original terms
approximated $.4 million and $1.1 million, respectively.
The actual amount of interest that was collected on these
loans during those periods and included in interest income
approximated $63,000 and $80,000, respectively. Through the
Controlled Asset Department, the Bank strives to ensure
that loans do not become nonperforming. In the case that
they do, this department will restore nonperforming assets to
performing status or, alternatively, dispose of such assets.
On occasion, this effort may require the restructure of
loan terms for certain nonperforming loans. The Bank works
closely with independent real estate brokers throughout
its market area, and all of the Bank's other real estate
owned is listed with brokers who are members of a multiple
listing service.
Reserve for Possible Loan Losses. The reserve
for possible loan losses is maintained at a level
that management considers adequate to provide for
potential loan losses based upon an evaluation of known
and inherent risks in the loan portfolio. The
reserve is increased by provisions for possible loan
losses and by recoveries of loans previously charged-off
and reduced by loan charge offs. Determining an
appropriate level of reserve for possible loan losses
necessarily involves a high degree of judgment. For
additional information, see "Management's Discussion and
Analysis of Financial Condition and Results of Operations"
in Item 8 hereof.
The following table summarizes changes in the reserve
for possible loan losses and other selected statistics for
the periods presented.
Year Ending December 31,
1995 1994 1993
(Dollars In Thousands)
Average loans, net of
unearned discount $612,481 $534,052 $494,288
Reserve for Possible loan
losses, beginning of year $13,719 $15,485 $15,971
Charged-off loans
Commercial 2,097 2,396 3,568
Real estate - commercial 690 682 1,285
Real estate - residential 558 618 1,107
Real estate - construction -- 63 111
Consumer - instalment 273 188 587
Consumer - other 464 346 861
Total charged-off loans 4,082 4,293 7,519
Recoveries on loans
previously charged off
Commercial 436 890 1,232
Real estate - commercial 665 425 191
Real estate - residential 3 2 41
Real estate - construction -- -- 20
Consumer - instalment 169 133 182
Consumer - other 178 276 292
Total recoveries 1,451 1,726 1,958
Net loans charged-off 2,631 2,567 5,561
Provision for loan losses 1,000 801 5,075
Reserve for possible loan
losses, end of period $12,088 $13,719 $15,485
Net loans charged-off as a
percent of average loans,
net of unearned discount 0.43% 0.48% 1.13%
Reserve for possible loan
losses as a percent of
loans, net of unearned
discount 1.92 2.32 3.18
Reserve for possible loan
losses as a percent of
nonperforming loans 229.29 174.45 91.18
Net loans charged-off as a
percent of reserve for
possible loan losses 21.77 18.71 35.91
Recoveries as a percent of
charge-offs 35.55 40.20 26.04
Year Ending December 31,
1992 1991
(Dollars In Thousands)
Average loans, net of
unearned discount $551,694 $688,127
Reserve for Possible loan
losses, beginning of year $16,165 $20,264
Charged-off loans
Commercial 6,150 12,385
Real estate - commercial 1,786 2,479
Real estate - residential 941 3,945
Real estate - construction 1,180 2,951
Consumer - instalment 807 1,580
Consumer - other 1,962 5,001
Total charged-off 12,826 28,341
Recoveries on loans
previously charged off
Commercial 579 505
Real estate - commercial 9 60
Real estate - residential 128 30
Real estate - construction 162 --
Consumer - instalment 183 149
Consumer - other 557 505
Total recoveries 1,618 1,249
Net loans charged-off 11,208 27,092
Provision for loan losses 11,014 22,993
Reserve for possible loan
losses, end of period $15,971 $16,165
Net loans charged-off as a
percent of average loans,
net of unearned discount 2.03% 3.94%
Reserve for possible loan
losses as a percent of
loans, net of unearned discount 3.20 2.77
Reserve for possible loan
losses as a percent of
nonperforming loans 55.45 36.60
Net loans charged-off as a
percent of reserve for
possible loan losses 70.18 167.59
Recoveries as a percent of
charge-offs 12.62 4.40
The reserve for possible loan losses is allocated
to various loan categories as part of the Bank's process for
evaluating the adequacy of the reserve for possible loan
losses. The following table sets forth certain information
concerning the allocation of the Bank's reserve for
possible loan losses by loan categories at December 31,
1995. For information about the percent of loans in each
category to total loans, see "Lending Activities - Loan
Portfolio Composition and Maturity."
Percent of
Amount Total Loans by
Category
(Dollars In Thousands)
Commercial Loans $4,139 3.40%
Real Estate Loans 6,424 1.59%
Consumer Loans 1,525 1.35%
Total Loans $12,088 1.92%
The Bank determines the level of the reserve
for possible loan losses based on a number of
factors. An individual analysis of all commercial,
commercial real estate, and construction loans, as well
as all internally classified loans is conducted and
reserves are assigned for those loans which are
determined to have certain weaknesses which make
ultimate collectibility of both principal and interest
uncertain. A portion of the reserve is allocated as a
general reserve for those loans which are not
individually reviewed. In conjunction with its
review, management considers both internal and
external factors which may affect the adequacy of the
reserve for possible loan losses. Such factors may
include, but are not limited to, industry trends, regional
and national economic conditions, past estimates of
possible loan losses as compared to actual losses, and
historical loan losses. Management assesses the adequacy of
the reserve for possible loan losses quarterly, and reviews its
assessment with the Board of Directors. Management's
assessment of the adequacy of the reserve for
possible loan losses is reviewed periodically by the
Company's independent public accountants as well as by
an independent third-party loan review consultant.
As of December 31, 1995, the reserve for possible
loan losses totaled $12.1 million. Based on the
processes described above, management believes that the
level of the reserve for possible loan losses at
December 31, 1995 is adequate. A review of the Bank's
loan portfolio and its reserve for possible loan
losses as of June 30, 1995 was also conducted by FDIC
bank examiners. Notwithstanding the foregoing, since
the level of the reserve is based on an estimate of
future events, ultimate loan losses may vary from
current estimates.
Investment Activities
The Bank's securities portfolio primarily consists of
U.S. Treasury and U.S. Government Agency securities,
mortgage-backed securities, and, to a lesser extent,
securities issued by states, counties and municipalities.
Most of these securities are A-rated (or equivalent) debt
obligations with average lives of less than five years.
Mortgage-backed securities entail a lesser degree of risk
than loans made by the Bank by virtue of the guarantees that
back them, require less capital under risk-based capital
rules than non-insured or non-guaranteed mortgage loans, are
more liquid than individual mortgage loans, and may be used
to collateralize borrowings or other obligations of the
Bank. However, these securities are subject to prepayment
risk which could result in significantly less future income
than would have been the case based on the contractual
coupon rate and term. The Bank had no investments in
marketable equity securities at December 31, 1995 or 1994,
and presently has no intention to make investments in such
securities.
The Bank views its securities portfolio as a source
of income and, with regard to maturing securities,
liquidity. Interest generated from securities also
provides a source of liquidity to fund loans and meet
short-term cash needs. The Bank's securities portfolio
is managed in accordance with the Rockland Trust
Company Investment Policy adopted by the Board of
Directors. Investments may be made by the Chief
Executive Officer or the Chief Financial Officer with
the approval of one additional member of the
Asset/Liability Management Committee, subject to limits
on the type, size and quality of all investments, which
are specified in the Investment Policy. The Bank's
Asset/Liability Management Committee, or its designee,
is required to evaluate any proposed purchase from
the standpoint of overall diversification of the
portfolio.
The investment portfolio includes securities
which management intends to hold until maturity and
securities available for sale. This classification of
the securities portfolio is required by Statement of
Financial Accounting Standards (SFAS) No. 115,
"Accounting For Certain Investments in Debt and Equity
Securities," which the Bank adopted effective January 1, 1994.
Securities held to maturity as of December 31,
1995 are carried at their amortized cost of $226.9
million and exclude gross unrealized gains of $2.1
million and gross unrealized losses of $1.6
million. A year earlier, securities held to
maturity totaled $256.8 million, excluding gross
unrealized gains of $.8 million and gross unrealized
losses of $17.7 million.
Securities available for sale are carried at
fair market value and unrealized gains and losses, net
of the related tax effect, are recognized as a separate
component of stockholders' equity. The fair market
value of securities available for sale at December 31, 1995
totaled $32.6 million, and net unrealized losses totaled
$60,000. A year earlier, securities available for
sale were $4.2 million, with net unrealized losses of
$254,000. In the fourth quarter of 1995, the Bank
transferred $28.6 million of securities from held to
maturity status to available for sale in accordance with
the "FASB Special Report, A Guide to the Implementation of
SFAS No. 115."
The following table sets forth the amortized cost
and percentage distribution of securities held to
maturity at the dates indicated. For additional
information, see Note 3 to the Consolidated Financial
Statements included in Item 8 hereof.
At December 31,
1995 1994 1993
Amount Percent Amount Percent Amount Percent
(Dollars in Thousands)
U.S. treasury
and government
agency securities $73,484 32.4% $70,904 27.6% $80,303 30.1%
Mortgage-backed
securities 128,361 56.6 157,197 61.2 153,517 57.6
Collateralized
mortgage
obligations 17,473 7.7 24,259 9.5 24,642 9.2
State, county,
and municipal
securities 6,578 2.9 3,425 1.3 7,067 2.7
Other
investment 1,000 0.4 1,000 0.4 1,015 0.4
securities
$226,896 100.0% $256,785 100.0% $266,544 100.0%
The following table sets forth the fair market value and percentage
distribution of securities available for sale at the dates indicated.
For additional information, see Note 3 to the Consolidated Financial
Statements included in Item 8 hereof.
At December 31,
1995 1994 1993
Amount Percent Amount Percent Amount Percent
(Dollars in Thousands)
Mortgage-backed
securities $29,676 91.0% $4,250 100.0% --- ---
securities
Collateralized
mortgage
obligations $2,952 9.0% --- --- --- ---
$32,628 100.0% $4,250 100.0% --- ---
At December 31, 1995 and 1994, the Bank had no
investment in obligations of individual states, counties or
municipalities which exceeded 10% of stockholders' equity.
In addition, there were no sales of securities in 1995,
1994, or 1993.
Sources of Funds
Deposits. Deposits obtained through Rockland's
branch banking network have traditionally been the
principal source of the Bank's funds for use in lending
and for other general business purposes. The Bank's has
built a stable base of in market core deposits from the
residents of and businesses located in Southeastern
Massachusetts. The Bank does not solicit nor accept
brokered deposits. Rockland offers a range of demand
deposits, NOW accounts, money market accounts, savings
accounts and time certificates of deposit. Interest rates
on deposits are based on factors which include loan
demand, deposit maturities, and interest rates
offered by competing financial institutions in the
Bank's market area. The Bank believes it has been able
to attract and maintain satisfactory levels of deposits
based on the level of service it provides to its
customers, the convenience of its banking locations, and its
interest rates which are generally competitive with those
of competing financial institutions.
Rockland's branch locations are supplemented by
the Bank's Trust/24 card which may be used to conduct
various banking transactions at automated teller machines
("ATMs") maintained at each of the Bank's full-service
offices and three additional locations. The Trust/24
card also allows customers access to the "NYCE" regional
ATM network, as well as the "Cirrus" nationwide ATM
network. These networks provide the Bank's customers
with access to their accounts through ATMs located
throughout Massachusetts, the United States, and the
world.
The following table sets forth the average balances
of the Bank's deposits for the periods indicated.
Year Ended December 31,
1995 1994 1993
Amount Percent Amount Percent Amount Percent
Demand deposits $153,142 18.7% $141,533 18.5% $121,057 16.9%
Savings and
NOW accounts 261,302 32.0% 290,719 37.9% 277,633 38.8%
Money Market
and Super Now
accounts 110,431 13.5% 119,347 15.6% 104,723 14.6%
Time deposits 292,206 35.8% 214,780 28.0% 212,488 29.7%
Total $817,081 100.0% $766,379 100.0% $715,901 100.0%
The Bank's interest-bearing time certificates of
deposit of $100,000 or more totaled $30.1 million at
December 31, 1995. The maturity of these certificates is as
follows: $10.3 million within three months; $14.2 million
over three through 12 months; and $5.6 million thereafter.
Borrowings. Borrowings consist of short-term and
intermediate-term obligations. Short-term borrowings
consist primarily of federal funds purchased, assets sold
under repurchase agreements, and treasury tax and loan
notes. The Bank has established two unsecured federal funds
lines totaling $18 million with Boston-based banks. The
Bank also obtains funds under repurchase agreements. In a
repurchase agreement transaction, the Bank will generally
sell a security agreeing to repurchase either the same or
a substantially identical security on a specified later
date at a price slightly greater than the original sales price.
The difference in the sale price and purchase price is
the cost of the proceeds. The securities underlying
the agreements are delivered to the dealer who arranges
the transactions as security for the repurchase
obligation. Payments on such borrowings are interest
only until the scheduled repurchase date, which
generally occurs within a period of 30 days or less.
Repurchase agreements represent a non-deposit funding
source for the Bank. However, the Bank is subject to
the risk that the lender may default at maturity and not
return the collateral. In order to minimize this
potential risk, the Bank only deals with established
investment brokerage firms when entering into these transactions.
The Bank has repurchase agreements with four major brokerage
firms. At December 31, 1995, the Bank had no outstanding balances
under the repurchase agreement lines, while at December 31, 1994,
the Bank had $25.4 million in outstanding repurchase agreements.
In July 1994, Rockland became a member of the Federal Home
Loan Bank ("FHLB") of Boston. Among the many
advantages of this membership, this affiliation provides
the Bank with access to approximately $300 million of
short-to medium term borrowing capacity as of December
31, 1995, based on the Bank's assets at that time. At December
31, 1995, the Bank had $20 million outstanding in
FHLB borrowings with initial maturities ranging from 12 to
18 months.
While the Bank has not traditionally placed significant
reliance on borrowings as a source of liquidity, it
established the borrowing arrangements described above in
order to provide management with greater flexibility in
overall funds management.
The Company's borrowings at December 31, 1995
also include $4.8 million of subordinated capital notes
privately issued by Rockland in 1986 and 1988, and by the
Company in 1986. Substantially all of the outstanding
notes have interest rates which range from 9.50% to 10.00%
and are payable in full at their maturity in 1996. The
notes are subordinated to all other indebtedness of
the Bank, including deposit accounts. At December 31,
1995, none of these notes were included in the Bank's or
the Company's Tier 2 capital for purposes of the FDIC's risk-based
capital requirements.
Management believes that the Bank has adequate
liquidity available to respond to current and anticipated
liquidity demands. See Notes 3 and 6 of the Notes to
Consolidated Financial Statements, included in Item 8
hereof.
The following table sets forth the Bank's borrowings
at the dates indicated.
At December 31,
1995 1994 1993
(in Thousands)
Federal funds
purchased $4,060 $1,165 $1,625
Assets sold under
repurchase agreements --- 25,420 10,303
Treasury tax and loan
notes 4,031 3,802 6,950
Federal Home Loan Bank
borrowings 20,000 25,000 ---
Subordinated capital
notes 4,843 4,965 4,965
$32,934 $60,352 $23,843
The following table presents certain information
regarding the Bank's short-term borrowings at the dates
and for the periods indicated.
At or For the Year Ended December 31,
1995 1994 1993
(Dollars in Thousands)
Balance outstanding at
end of year $8,091 $30,387 $18,878
Average daily balance
outstanding 18,995 18,034 5,284
Maximum balance
outstanding at any
month-end 63,988 30,387 20,062
Weighted average
interest rate for the
year 5.74% 4.03% 2.86%
Weighted average
interest rate at end
of year 4.36% 5.74% 2.74%
Trust and Financial Services
Rockland's Trust and Financial Services Division
offers a variety of trust and financial services.
Financial services, including assistance with
investments, estate planning, custody services, employee
benefit plans, and tax planning, are provided primarily
to individuals and small businesses located in
Southeastern Massachusetts. In addition, the Bank
acts as executor or administrator of estates and as
trustee for various types of trusts. As of December 31,
1995, the Trust and Financial Services Division maintained
approximately 1,500 trust/fiduciary accounts, with an
aggregate market value of over $400 million on that date.
Income from the Trust and Financial Services Division
amounted to $2.4 million, $2.2 million, and $2.2 million
for 1995, 1994, and 1993, respectively.
Accounts maintained by the Trust and Financial
Services Division consist of "managed" and "non-managed"
accounts. "Managed accounts" are those accounts under
custody for which Rockland has responsibility for
administration and investment management and/or
investment advice. "Non managed" accounts are those
accounts for which Rockland acts as a custodian. The
Bank receives fees dependent upon the level and type of
service(s) provided.
The administration of trust and fiduciary accounts is
monitored by the Trust Committee of the Bank's Board
of Directors. The Trust Committee has delegated
administrative responsibilities to two committees - one
for investments and one for administration - comprised
of Trust and Financial Services Division officers who
meet no less than monthly.
Regulation
The Company - General. The Company, as a
federally registered bank holding company, is subject to
regulation and supervision by the Federal Reserve Board
(the "Federal Reserve"). The Company is required to
file an annual report of its operations with, and is
subject to examination by, the Federal Reserve.
BHCA - Activities and Other Limitations. The BHCA
prohibits a bank holding company from acquiring direct
or indirect ownership or control of more than 5% of the
voting shares of any bank, or increasing such ownership
or control of any bank, without prior approval of the
Federal Reserve. No approval under the BHCA is required,
however, for a bank holding company already owning or
controlling 50% of the voting shares of a bank to
acquire additional shares of such bank.
The BHCA also prohibits a bank holding company
from, with certain exceptions, acquiring more than 5%
of the voting shares of any company that is not a bank
and from engaging in any business other than banking or
managing or controlling banks. Under the BHCA, the
Federal Reserve is authorized to approve the ownership
of shares by a bank holding company in any company, the
activities of which the Federal Reserve has determined
to be so closely related to banking or to managing or
controlling banks as to be a proper incident thereto.
In making such determination, the Federal Reserve is
required to weigh the expected benefit to the
public, such as greater convenience, increased
competition or gains in efficiency, against the
possible adverse effects, such as undue concentration of
resources, decreased or unfair competition, conflicts of
interest or unsound banking practices.
The Federal Reserve has, by regulation, determined
that certain activities are closely related to banking
within the meaning of the BHCA. These activities include
operating a mortgage company, finance company, credit
card company, factoring company, trust company or
savings association; performing certain data processing
operations; providing limited securities brokerage
services; acting as an investment or financial adviser;
acting as an insurance agent for certain types of credit-related
insurance; leasing personal property on a full-payout,
nonoperating basis; providing tax planning and
preparation services; operating a collection agency; and
providing certain courier services. The Federal Reserve
also has determined that certain other activities,
including real estate brokerage and syndication, land
development, property management and underwriting of
life insurance not related to credit transactions are
not closely related to banking and are not a proper
incident thereto.
Interstate Banking Legislation. On September 24,
1994, President Clinton signed, and as of September 29,
1995, the Riegle-Neal Interstate Banking and Branching
Efficiency Act of 1994 (the "Interstate Act") became
effective. The Interstate Act facilitates interstate
branching by permitting (i) bank holding companies that are
adequately capitalized and adequately managed to acquire
banks outside their home states regardless of whether
such acquisitions are permissible under the laws of the
target bank's home state; (ii) commencing June 1, 1997,
interstate bank mergers regardless of state law, unless a
state specifically "opts out" or "opts in" after
September 29, 1994 and prior to June 1, 1997; (iii)
banks to establish new branches on an interstate
basis provided the state of the new branch
specifically permits such activity; (iv) foreign banks
to establish, with regulatory approval, foreign
branches outside their home state to the same extent as if
they were national or state banks; and (v) affiliates
of banks in different states to receive deposits, renew
time deposits, close loans, service loans, and receive
loan payments on loans and other obligations as agents
for each other.
Capital Requirements. The Federal Reserve has
adopted capital adequacy guidelines pursuant to which it
assesses the adequacy of capital in examining and
supervising a bank holding company and in analyzing
applications to it under the BHCA. The Federal
Reserve's capital adequacy guidelines which generally
require bank holding companies to maintain total capital
equal to 8% of total risk-adjusted assets, with at least
one-half of that amount consisting of Tier 1, or core,
capital and up to one-half of that amount
consisting of Tier 2, or supplementary, capital. Tier
1 capital for bank holding companies generally consists of
the sum of common stockholders' equity and perpetual
preferred stock (subject in the case of the latter to
limitations on the kind and amount of such stocks which
may be included as Tier 1 capital), less goodwill and
other intangible assets required to be deducted from
capital. Tier 2 capital generally consists of hybrid
capital instruments: perpetual preferred stock which is
not eligible to be included as Tier 1 capital; term
subordinated debt and intermediate-term preferred
stock; and, subject to limitations, the reserve for
loan losses. Assets are adjusted under the risk-based
guidelines to take into account different
risk characteristics, with the categories ranging from 0%
(requiring no additional capital) for assets such as cash
to 100% for the majority of assets which are typically
held by a bank holding company, including commercial
real estate loans, commercial loans and consumer loans.
Single family residential first mortgage loans which are
not 90 days or more past due or nonperforming and
which have been made in accordance with prudent
underwriting standards are assigned a 50% level in the
risk-weighting system, as are certain privately-issued
mortgage-backed securities representing indirect ownership
of such loans and certain multi-family housing loans.
Off-balance sheet items also are adjusted to take into
account certain risk characteristics.
In addition to the risk-based capital requirements,
the Federal Reserve requires bank holding companies to
maintain a minimum leverage capital ratio of Tier 1
capital to total assets of 3.0%. Total assets for this
purpose does not include goodwill and any other
intangible assets or investments that the Federal Reserve
determines should be deducted from Tier 1 capital. The
Federal Reserve has announced that the 3.0% Tier 1
leverage capital ratio requirement is the minimum for the
top-rated bank holding companies without any supervisory,
financial or operational weaknesses or deficiencies or those
which are not experiencing or anticipating significant growth.
Other bank holding companies (including the Company) will be
expected to maintain Tier 1 leverage capital ratios of at
least 4.0% to 5.0% or more, depending on their overall condition.
The Company currently is in compliance with the
above described regulatory capital requirements. At
December 31, 1995, the Company had Tier 1 capital and
total capital equal to 10.90% and 12.15% of total
risk-adjusted assets, respectively, and Tier 1 leverage
capital equal to 7.37 % of total assets. As of such date,
Rockland complied with the applicable federal regulatory
capital requirements, with Tier 1 capital and total capital
equal to 10.54% and 11.79% of total risk-adjusted assets,
respectively, and Tier 1 leverage capital equal to 7.12% of
total assets.
Commitments to Affiliated Institutions. Under
Federal Reserve policy, the Company is expected to act as
a source of financial strength to Rockland and to commit
resources to support Rockland in circumstances when it
might not do so absent such policy.
Limitations on Acquisitions of Common Stock.
The federal Change in Bank Control Act ("CBCA")
prohibits a person or group of persons from acquiring
"control" of a bank holding company or bank unless the
appropriate federal bank regulator has been given 60 days
prior written notice of such proposed acquisition and
within that time period such regulator has not issued a
notice disapproving the proposed acquisition or extending
for up to another 30 days the period during which such a
disapproval may be issued. An acquisition may be made prior
to expiration of the disapproval period if such regulator
issues written notice of its intent not to disapprove
the action. Under a rebuttable presumption
established under the CBCA regulations, the
acquisition of 10% or more of a class of voting stock
of a bank holding company or a FDIC-insured bank, with a
class of securities registered under or subject to the
requirements of Section 12 of the Securities Exchange Act
of 1934 would, under the circumstances set forth in the
presumption, constitute the acquisition of control.
In addition, any "company" would be required to
obtain the approval of the Federal Reserve under the
BHCA before acquiring 25% (5% in the case of an acquirer
that is a bank holding company) or more of the
outstanding common stock of, or such lesser number of
shares as constitute control over, the Company. Such
approval would be contingent upon, among other things,
the acquirer registering as a bank holding company,
divesting all impermissible holdings and ceasing any
activities not permissible for a bank holding company.
Massachusetts Law. Massachusetts law requires all
bank holding companies (those companies which control,
own, or have the power to vote 25% or more of the stock
of each of two or more banks) to receive prior written
approval of the Massachusetts Board of Bank Incorporation
to, among other things, acquire all or substantially all
of the assets of a banking institution located within
the Commonwealth of Massachusetts or to merge or consolidate
with a Massachusetts bank holding company. The Company owns
no voting stock in any banking institution other than
Rockland. In addition, prior approval of the Board of Bank
Incorporation is required before any bank holding
company owning 25% or more of the stock of two banking
institutions may acquire additional voting stock in those
banking institutions equal to 5% or more. Generally, no approval
to acquire a banking institution, acquire additional
shares in an institution, acquire substantially all the
assets of a banking institution or merge or consolidate
with another bank holding company may be given if, as a result,
the bank holding company would control in excess of 25% of the
total deposits of all state and federally chartered
banks in Massachusetts. Similarly, no bank which is not
a member of the Federal Reserve can merge or consolidate
with any other insured depository institution or,
either directly or indirectly, acquire the assets of or assume
the liability to pay any deposits made in any other depository
institution except with the prior written approval of the
FDIC.
A bank holding company whose principal operations
are located in another state may acquire more than 5%
of the voting stock of a Massachusetts bank holding
company (with the prior written approval of the
Massachusetts Board of Bank Incorporation) only if such
state has enacted a similar banking law which is
deemed by the Commissioner to be reciprocal for
Massachusetts bank holding companies. Presently all
of the New England states have adopted legislation
permitting interstate acquisitions among New England
states with reciprocal legislation. In addition, the
so-called Massachusetts Nationwide Interstate Banking
Act, passed in June 1990, permits nationwide
interstate banking within certain restrictions,
with and by Massachusetts bank holding companies, through
ownership of or by bank holding companies the principal
offices of which are in a state or jurisdiction outside of
Massachusetts. Massachusetts currently has legislation
pending which would result in the Commonwealth's
"opting in" to the interstate branching provisions of the
Interstate Act.
Before the Massachusetts Board of Bank
Incorporation may grant approval with respect to the
foregoing matters, it must make a determination that the
proposed transaction will not unreasonably affect competition
among banking institutions, that the public convenience and advantage
will be promoted and it must receive notice from the
Massachusetts Housing Partnership Fund that arrangements
satisfactory to the Fund have been made for the acquiring bank
holding company to make .9% of its assets available for a period
of ten years for financing, down payment assistance, share loans,
closing costs and other costs related to programs promoted by
that Fund, including those related to creating affordable rental
housing, limited equity cooperatives, and tenant management programs.
Subsidiary Bank - General. Rockland is subject
to extensive regulation and examination by the
Commissioner and by the FDIC, which insures its
deposits to the maximum extent permitted by law, and
to certain requirements established by the Federal Reserve.
The federal and state laws and regulations which are applicable
to banks regulate, among other things, the scope of their
business, their investments, their reserves against
deposits, the timing of the availability of deposited
funds and the nature and amount of and collateral for
certain loans. The laws and regulations governing Rockland
generally have been promulgated to protect depositors and not
for the purpose of protecting stockholders.
Deposit Insurance Premiums. Rockland currently
pays deposit insurance premiums to the FDIC based on a
single, uniform assessment rate established by the FDIC
for all BIF member institutions. The lowest assessment
rate which is presently applicable to BIF-member
institutions amounts to .04% of insured deposits per
annum. Under the FDIC's risk based assessment system,
institutions are assigned to one of three capital groups
which assignment is based solely on the level of an
institution's capital - "well capitalized, " "adequately
capitalized," and "undercapitalized" - which are defined
in the same manner as the regulations establishing the prompt
corrective action system under Section 38 of the Federal
Deposit Insurance Act ("FDIA"), as discussed below. These
three groups are then divided into three subgroups
which reflect varying levels of supervisory concern,
from those which are considered to be healthy to those
which are considered to be of substantial supervisory
concern. The matrix so created results in nine assessment
risk classifications, with rates ranging from .04% for
well capitalized, healthy institutions to .31%
for undercapitalized institutions with substantial
supervisory concerns. Rockland is presently "well
capitalized" and its premium as of January 1, 1996 has
been established at .04%. Due to the strength of the
financial institutions insured by the BIF and the
resultant level of the insurance fund, the FDIC gave a
refund to BIF insured banks in the third quarter of 1995
and excused the premium payment for the first two
quarters of 1996.
The Bank acquired the deposits of three branches of
a failed savings and loan association in 1994. These
deposits, which amount to approximately $21 million,
are insured by the SAIF. Due to the financial
condition of financial institutions insured by SAIF and
the level of that insurance fund, the premiums remain
higher than BIF insured deposits. The Bank currently
pays a rate of .23% of these insured deposits per annum.
Capital Requirements. The FDIC has promulgated
regulations and adopted a statement of policy regarding
the capital adequacy of state-chartered banks which,
like Rockland, are not members of the Federal Reserve
System. These requirements are substantially similar
to those adopted by the Federal Reserve regarding bank
holding companies, as described above.
The FDIC's capital regulations establish a minimum
3.0% Tier 1 leverage capital requirement for the most
highly rated state-chartered, nonmember banks, with an
additional cushion of at least 100 to 200 basis points
for all other state-chartered, nonmember banks, which
effectively will increase the minimum Tier 1 leverage
capital ratio for such banks to
4.0% or 5.0% or more. Under the FDIC's
regulations, the highest-rated banks are those that the
FDIC determines are not anticipating or experiencing
significant growth and have well diversified risk,
including no undue interest rate risk exposure,
excellent asset quality, high liquidity, good earnings
and in general which are considered strong banking
organizations, rated composite 1 under the Uniform
Financial Institutions Rating System. A bank having less
than the minimum leverage capital requirement shall,
within 45 days of the date as of which it receives notice
or is deemed to have notice that it is undercapitalized,
submit to its FDIC regional director for review and
approval a written capital restoration plan describing
the means and timing by which the bank shall achieve
its minimum leverage capital requirement. A bank which
fails to file such plan with the FDIC is deemed to be
operating in an unsafe and unsound manner, and could
subject the bank to a cease and desist order from the
FDIC. The FDIC's regulations also provide that any
insured depository institution with a ratio of Tier 1
capital to total assets that is less than 2.0% is deemed
to be operating in an unsafe or unsound condition
pursuant to Section 8(a) of the FDIA and is subject to
potential termination of deposit insurance. However,
such an institution will not be subject to an
enforcement proceeding thereunder solely on account of
its capital ratios if it has entered into and is in
compliance with a written agreement with the FDIC to
increase its Tier 1 leverage capital ratio to such
level as the FDIC deems appropriate and to take
such other action as may be necessary for the
institution to be operated in a safe and sound manner.
The FDIC capital regulation also provides for, among
other things, the issuance by the FDIC or its
designee(s) of a capital directive, which is a final
order issued to a bank that fails to maintain minimum
capital to restore its capital to the minimum leverage
capital requirement within a specified time period. Such
directive is enforceable in the same manner as a final
cease and desist order.
Pursuant to the requirements of the FDIA, each
federal banking agency has adopted or proposed
regulations relating to its review of and revisions to
its risk-based capital standards for insured
institutions to ensure that those standards take
adequate account of interest-rate risk, concentration
of credit risk and the risks of non traditional
activities, as well as to reflect the actual
performance and expected risk of loss on multi-
family residential loans.
Prompt Corrective Action. Under Section 38 of the
FDIA, as amended by the Federal Deposit Insurance
Corporation Improvement Act ("FDICIA"), each federal
banking agency has broad powers to implement a system
of prompt corrective action to resolve problems of
institutions which it regulates which are not
adequately capitalized. Under FDICIA, a bank shall be
deemed to be (i) "well capitalized" if it has total risk-
based capital of 10.0% or more, has a Tier 1 risk-based
capital ratio of 6.0% or more, has a Tier 1 leverage
capital ratio of 5.0% or more and is not subject to any
written capital order or directive; (ii) "adequately
capitalized" if it has a total risk-based capital ratio
of 8.0% or more, a Tier 1 risk-based capital ratio of 4.0%
or more, a Tier 1 leverage capital ratio of 4.0% or more
(3.0% under certain circumstances) and does not meet the
definition of "well capitalized"; (iii) "undercapitalized"
if it has a total risk-based capital ratio that is less than
8.0%, or a Tier 1 risk-based capital ratio that is less than
4.0% or a Tier 1 leverage capital ratio of less than 4.0%
(3.0% under certain circumstances); (iv) "significantly
undercapitalized" if it has a total risk-based capital ratio
that is less than 6.0%, or a Tier 1 risk-based capital ratio
that is less than 3.0%, or a Tier 1 leverage capital ratio
that is less than 3.0%; and (v) "critically
undercapitalized" if it has a ratio of tangible equity
to total assets that is equal to or less than 2.0%.
FDICIA also specifies circumstances under which a federal
banking agency may reclassify a well capitalized
institution as adequately capitalized and may require an
adequately capitalized institution or an undercapitalized
institution to comply with supervisory actions as if it
were in the next lower category (except that the FDIC may
not reclassify a significantly undercapitalized
institution as critically undercapitalized). As of
December 31, 1995, Rockland was deemed a "well-
capitalized institution" for this purpose.
Brokered Deposits. FDICIA restricts the use of
brokered deposits by certain depository institutions.
Well capitalized insured depository institutions may
solicit and accept, renew or roll over any brokered deposit
deposit without restriction. Adequately capitalized insured
depository institutions may not accept, renew or roll over
any brokered deposit unless they have applied for and
been granted a waiver of this prohibition by the
FDIC. Undercapitalized insured depository institutions
may not (i) accept, renew or roll over any brokered
deposit or (ii) solicit deposits by offering an
effective yield that exceeds by more than 75 basis
points the prevailing effective yields on insured
deposits of comparable maturity in such institution's
normal market area or in the market area in which such
deposits are being solicited. While Rockland can solicit
and accept brokered deposits, the Bank historically has not
relied upon brokered deposits as a source of funding and, at
December 31, 1995, the Bank did not have any brokered
deposits. See "Sources of Funds - Deposits. "
Safety and Soundness. In August, 1995, the
FDIC adopted regulations pursuant to FDICIA relating to
operational and managerial safety and soundness
standards for financial institutions relating to
internal controls, information systems and internal
audit systems, loan documentation, credit underwriting,
interest rate exposure, asset growth and compensation,
fees, and benefits. The standards are to serve as
guidelines for institutions to help identify potential
safety and soundness concerns. If an institution fails
to meet any safety and soundness standard, the FDIC may
require it to submit a written safety and soundness compliance
plan within thirty (30) days following a request therefor, and
if it fails to do so or fails to correct safety and soundness
deficiencies, the FDIC may take administrative enforcement
action against the institution, including assessing civil
money penalties, issuing supervisory orders and other available remedies.
Miscellaneous. Rockland is subject to
certain restrictions on loans to the Company, on
investments in the stock or securities thereof, on the
taking of such stock or securities as collateral for
loans to any borrower, and on the issuance of a
guarantee or letter of credit on behalf of the
Company. Rockland also is subject to certain
restrictions on most types of transactions with the
Company, requiring that the terms of such
transactions be substantially equivalent to terms of similar
transactions with non-affiliated firms. In addition
under state law, there are certain conditions for and
restrictions on the distribution of dividends to the
Company by Rockland.
In addition to the laws and regulations
discussed above, regulations have been promulgated under
FDICIA which increase the requirements for
independent audits, set standards for real estate lending
and increase lending restrictions with respect to bank officers
and directors. FDICIA also contains provisions which amend
various consumer banking laws, limit the ability of
"undercapitalized banks" to borrow from the Federal
Reserve Board's discount window, and require regulators
to perform annual on-site bank examinations.
Regulatory Enforcement Authority. The Financial
Institutions Reform, Recovery, and Enforcement Act of
1989 ("FIRREA") included substantial enhancement to the
enforcement powers available to federal banking
regulators, This enforcement authority includes, among
other things, the ability to assess civil money penalties,
to issue cease and desist or removal orders and to
initiate injunctive actions against banking
organizations and institution-affiliated
parties, as defined. In general, these enforcement
actions may be initiated for violations of laws and
regulations and unsafe or unsound practices. Other
actions or inactions may provide the basis for
enforcement action, including misleading or untimely
reports filed with regulatory authorities. FIRREA
significantly increased the amount of and grounds for
civil money penalties and requires, except under certain
circumstances, public disclosure of final enforcement
actions by the federal banking agencies.
The foregoing references to laws and regulations
which are applicable to the Company and Rockland
are brief summaries thereof which do not purport to be
complete and which are qualified in their entirety by
reference to such laws and regulations.
Federal Taxation. The Company and its subsidiaries
are subject to those rules of federal income taxation
generally applicable to corporations under the Internal
Revenue Code (the "Code"). The Company and its
subsidiaries, as members of an affiliated group of
corporations within the meaning of Section 1504 of the
Code, file a consolidated federal income tax return, which
has the effect of eliminating or deferring the tax
consequences of inter-company distributions, including
dividends, in the computation of consolidated taxable
income.
State Taxation. The Commonwealth of
Massachusetts imposes a tax on the Massachusetts net
income of banks at a rate of 12.13% as of December 31,
1995. As a result of legislation in 1995, the state
tax rate for financial institutions and their related
corporations will be gradually reduced to 10.5% by January 1,
1999. In addition, the Company is subject to an excise tax
at the rate of .26% of its net worth. The Bank's
security corporation subsidiary will, for state tax purposes,
continue to be taxed at a rate of 1.32% of its gross income.
Massachusetts net income for banks is generally similar to
federal taxable income except deductions with respect to
the following items are generally not allowed: (i)
dividends received, (ii) losses sustained in other
taxable years, and (iii) income or franchise taxes
imposed by other states. The Company is permitted to
carry a percentage of its losses forward for not more
than five years, while Rockland is not permitted to carry
its losses forward or back for Massachusetts tax
purposes.
For additional information, see Note 8 of the Notes
to Consolidated Financial Statements included in Item 8
hereof.
Item 2. Properties
At February 29, 1996, the Bank conducted its
business from its headquarters and main office at 288
Union Street, Rockland, Massachusetts, and 32 other
branch offices located in Southeastern Massachusetts in
Plymouth County, Bristol County and Norfolk County. In
addition to its main office, the Bank owns four of its
branch offices and leases the remaining 28 offices.
Of the branch offices which are leased by the Bank, 16
have remaining lease terms, including options renewable
at the Bank's option, of five years or less, nine have
remaining lease terms of greater than five years and less
than 10 years, and three have remaining lease terms of
10 years or more. The Bank's aggregate rental expense
under such leases was $1.6 million in 1995. Certain of
the Bank's branch offices are leased from companies with
whom directors of the Company are affiliated. The
Bank leases space for its Trust and Financial Services
Division in a building in Hanover, Massachusetts developed by a
joint venture consisting of the Bank and A. W. Perry, Inc.,
and a building in Attleboro. It also leases office space
in two buildings in Rockland, Massachusetts for
administrative purposes as well as space in four additional
facilities used as lending centers. At December 31,
1995, the net book value of the property and
leasehold improvements of the offices of the Bank
amounted to $4.9 million. The Bank's properties which are
not leased are owned free and clear of any mortgages. The
Bank believes that all of its properties are well
maintained and are suitable for their respective present
needs and operations. For additional information
regarding the Bank's lease obligations, see Note 12 to
the Consolidated Financial Statements, included in
Item 8 hereof.
Item 3. Legal Proceedings
The Company is involved in routine legal
proceedings which arise in the ordinary course of
business. Management has reviewed these actions with
legal counsel and has taken into consideration the view of
counsel as to the outcome of the litigation. In the
opinion of management, final disposition of these
lawsuits is not expected to have a material adverse
effect on the Company's financial position or results of
operation.
Item 4. Submission of Matters to a Vote of Security Holders
Not applicable
PART II
Item 5. Market for Registrant's Common Equity and Related Stockholder
Matters
The information required herein is incorporated by
reference from page 40 of the Company's 1995 Annual Report
to Stockholders ("Annual Report"), which is included herein
as Exhibit 13.
Item 6. Selected Financial Data
The information required herein is incorporated by reference from
page 5 of the Annual Report.
Item 7. Management's Discussion and Analysis of Financial
Condition and Results of Operations
The information required herein is incorporated
by reference from pages 6 through 19 of the Annual Report.
Item 8. Financial Statements and Supplementary Data
The financial statements and supplementary data
required herein are incorporated by reference from pages 20
through 37 of the Annual Report.
Item 9. Changes in and Disagreements with Accountants on Accounting
and Financial Disclosure
None
PART III
Item 10. Directors and Executive Officers of the Registrant
The information required herein is incorporated by reference
from the Company's definitive proxy statement (the "Proxy Statement")
relating to its 1996 Annual Meeting of Stockholders filed with the
Commission on March 25,1996.
Item 11. Executive Compensation
The information required herein is incorporated by reference
from the Proxy Statement.
Item 12. Security Ownership of Certain Beneficial Owners and Management
The information required herein is incorporated by reference from
the Proxy Statement.
Item 13. Certain Relationships and Related Transactions
The information required herein is incorporated by
reference from the Proxy Statement.
PART IV
Item 14. Exhibits, Financial Statement Schedules and Reports on Form 8-K
(a)(1) The following financial statements are incorporated herein
by reference from pages 20 through 37 of the Annual Report.
Report of Independent Public Accountants
Consolidated balance sheets as of December 31, 1995 and 1994
Consolidated statements of income for each of the years in the three
year period ended December 31, 1995
Consolidated statements of cash flows for each of the years in the
three year period ended December 31, 1995
Notes to Consolidated Financial Statements
(a)(2) There are no financial statement schedules filed herewith.
All information required by financial statement schedules is disclosed
in Notes to Consolidated Financial Statements or is not applicable to the
Company.
(a)(3) The following exhibits are filed as part of this report.
EXHIBIT INDEX
No. Exhibit Page
3.(i) Restated Articles of Organization, as (5)
amended to date
3.(ii) Bylaws of the Company, as amended (1)
to date
4.1 Specimen Common Stock Certificate (4)
4.2 Specimen Preferred Stock Purchase (2)
Rights Certificate
4.3 Amended and Restated Independent (6)
Bank Corp. 1987 Incentive Stock
Option Plan ("Stock Option Plan").
(Management contract under Item
601(10)(iii)(A).
10.1 Second amended and Restated E -37
Employment Agreement between the
Company, Rockland and Douglas H.
Philipsen, dated February 21, 1996
("Philipsen Employment Agreement").
(Management contract under Item
601(10)(iii)(A).
10.2 Second amended and Restated E - 57
Employment Agreement between Rockland
Trust Company and Richard F. Driscoll,
dated January 19, 1996 (the "Driscoll
Agreement"). Employment Agreements
between Rockland and Richard J.
Seaman, Ferdinand T. Kelley, S. Lee
Miller, and Raymond G. Fuerschbach
are substantially similar to the
Driscoll agreement. (Management
contract under Item 601(10)(iii)(A)
10.3 Rockland Trust Company Deferred (3)
Compensation Plan for Directors, as
Amended and Restated dated September
1992. (Management contract under Item
601(10)(iii)(A)
10.4 Stockholders Rights Agreement, dated (2)
January 24, 1991, between the Company
and Rockland, as Rights Agent
10.5 Master Securities Repurchase (3)
Agreement
13 Annual Report to Stockholders E - 76
21 Subsidiaries of the Registrant (3)
23 Consent of Independent Public E- 120
Accountants
Footnotes:
(1) Incorporated by reference from the Company's report
on Form 10-K for the year ended December 31, 1990.
(2) Exhibit is incorporated by reference to the Form 8-A
Registration Statement (No. 0-19264) filed by the
Company.
(3) Exhibit is incorporated by reference to the Form S-1
Registration Statement (No. 33-52216) filed by the
Company.
(4) Incorporated by reference from the Company's report
on Form 10-K for the year ended December 31, 1992.
(5) Incorporated by reference from the Company's report
on Form 10-K for the year ended December 31, 1993.
(6) Incorporated by reference from the Company's report
on Form 10-K for the year ended December 31, 1994.
(b) There were no reports on Form 8-K filed by the
Company during the three months ended
December 31, 1995.
(c) See (a)(3) above for all exhibits filed
herewith and the Exhibit Index.
(d) All schedules are omitted as the required
information is not applicable or the information
is presented in the Consolidated Financial
Statements or related notes.
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of
the Securities Exchange Act of 1934, the Registrant has duly
caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized.
INDEPENDENT BANK CORP.
Date: March 14, 1996 /s/ John F. Spence, Jr.
John F. Spence, Jr.
Chairman of the Board and Chief
Executive Officer
Pursuant to the requirements of the Securities Exchange Act
of 1934, this report has been signed below by the
followings persons on behalf of the Registrant and in the
capacities and on the dates indicated. Each person whose
signature appears below hereby makes, constitutes and
appoints Douglas H. Philipsen, John F. Spence, Jr., Richard
Seaman and each of them acting individually, his true and
lawful attorneys, with full power to sign for such person
and in such person's name and capacity indicated below any
and all amendments to this Form 10-K, hereby ratifying and
confirming such person's signature as it may be signed by
said attorneys to any and all amendments.
/s/ Richard S. Anderson Date: March 14, 1996
Richard S. Anderson
Director
/s/ Donald K. Atkins Date: March 14, 1996
Donald K. Atkins
Director
/s/ W. Paul Clark Date: March 14, 1996
W. Paul Clark
Director
/s/ Robert L. Cushing Date: March 14, 1996
Robert L. Cushing
Director
/s/ Benjamin A. Gilmore, II Date: March 14, 1996
Benjamin A. Gilmore, II
Director
/s/ James T. Jones Date: March 14, 1996
James T. Jones
Director
/s/ Lawrence M. Levinson Date: March 14, 1996
Lawrence M. Levinson
Director
/s/ Douglas H. Philipsen Date: March 14,1996
Douglas H. Philipsen
Director and President
/s/ Richard H. Sgarzi Date: March 14, 1996
Richard H. Sgarzi
Director
/s/ Robert J. Spence Date: March 14, 1996
Robert J. Spence
Director
/s/ William J. Spence Date: March 14, 1996
William J. Spence
Director
/s/ Brian S. Tedeschi Date: March 22, 1996
Brian S. Tedeschi
Director
/s/ Thomas J. Teuten Date: March 14, 1996
Thomas J. Teuten
Director
/s/ Richard J. Seaman Date: March 14, 1996
Richard J. Seaman
Chief Financial Officer and Treasurer
(principal financial and accounting
officer)