Shares for Independent Bank (IBCP) climbed Monday after the Ionia, Mich., company reported its second consecutive quarter of profitability from improved asset quality.
The $2.4 billion-asset company said Monday that it earned $3.2 million in the quarter that ended June 30, up 32% from the prior quarter and compared with a $1 million loss for a year earlier. Independent’s earnings per share totaled 11 cents. For the first six months of the year, the company earned $5.7 million, compared to a loss of $9.4 million for the same period a year earlier.
Independent will remain “focused on building consistent profitability, and we are optimistic that the improvements we have observed in the Michigan economy will continue to help support our efforts,” Michael M. Magee, Independent’s chief executive, said in a news release.
The company will also look at converting its preferred stock owned by the Treasury Department into common stock and exiting the Troubled Asset Relief Program while preserving its potential future deferred tax asset, Magee said. At June 30, Independent’s DTA totaled roughly $71.9 million.
Nonperforming loans fell 16%, to $45.1 million, from a year earlier with declines in the commercial, consumer and mortgage loan portfolios. The company’s provision for loan losses declined 74%, to $1.1 million, from a year earlier while net chargeoffs totaled $4.9 million, down almost 48% year over year.
Independent’s net interest income totaled $21.8 million, down more than 6% from a year earlier. Noninterest income climbed almost 5%, to $13 million, year over year as net gains on mortgage loans almost doubled from a year earlier.
The company also said during the second quarter that it would sell 21 branches to Chemical Financial (CHFC). That deal is expected to close in September.
Independent’s shares closed at $2.91 on Monday, up more than 4% from Friday’s close.