Independent Bank Corporation Announces Cash Dividend and Outlook for Second Quarter 2008 Results
IONIA, Mich., June 26 /PRNewswire-FirstCall/ -- Independent Bank Corporation (NASDAQ:IBCP), a Michigan-based bank holding company, today announced that its Board of Directors approved a quarterly dividend of $0.01 per share on the Company's common stock. The dividend will be payable on July 31, 2008 to all shareholders of record as of July 7, 2008.
As previously disclosed, the Company stated that it would consider a number of internal and external factors in determining the amount of its quarterly dividends. The current dividend reduction is intended to preserve capital and avoid the need to access the capital markets for equity. It also reflects the prevailing unsettled current market environment and continued weak economic conditions in Michigan, which have resulted in elevated credit costs. The Company noted it has four issues of trust-preferred securities outstanding, including a $50.6 million issue that is publicly traded on the NASDAQ. The Company has no intention to modify or discontinue the payment of quarterly dividends on any of its trust-preferred securities.
The Company also announced several items related to its second quarter 2008 outlook:
-- Independent Bank remains well capitalized. Capital ratios are generally expected to rise at June 30, 2008 as earnings are anticipated to exceed the reduced dividend.
-- Given the reduced dividend level, anticipated earnings, and efforts to reduce total assets to further improve capital ratios, the Company's Board of Directors does not presently expect to raise additional capital through any type of equity offering.
-- Second quarter 2008 earnings are expected to range between $0.09 and $0.12 per share. This earnings range is based on an expected loan-loss provision of approximately $13 million and $1.2 million in charge-offs of other real estate. Offsetting the elevated credit costs are expected increases in net interest income and non-interest income.
-- The Company remains intensely focused on improving asset quality. Total non-performing assets are expected to rise to between $130 million to $145 million at June 30, 2008. The majority of the increase from March 31, 2008 levels are due to loans that were already in watch credit status.
Michael M. Magee, President and CEO of Independent Bank Corporation, commented: "The decision to further reduce the common stock cash dividend was very difficult. However, further improving our capital ratios will better position the Company to weather the difficult economic and credit environment. We are also encouraged by the strength of our earnings before loan losses and taxes, which is allowing the Company to absorb these elevated credit costs."
About Independent Bank Corporation
Independent Bank Corporation (NASDAQ:IBCP) is a Michigan-based bank holding company with total assets of over $3 billion. Founded as First National Bank of Ionia in 1864, Independent Bank Corporation now operates over 100 offices across Michigan's Lower Peninsula through one state-chartered bank subsidiary. This subsidiary (Independent Bank) provides a full range of financial services, including commercial banking, mortgage lending, investments and title services. Payment plans to purchase vehicle service contracts are also available through Mepco Finance Corporation, a wholly owned subsidiary of Independent Bank. Independent Bank Corporation is committed to providing exceptional personal service and value to its customers, stockholders and the communities it serves. For more information, please visit our website at: www.ibcp.com .
Any statements in this news release that are not historical facts are forward-looking statements as defined in the Private Securities Litigation Reform Act of 1995. Words such as "expect," "believe," "intend," "estimate," "project," "may" and similar expressions are intended to identify forward- looking statements. These forward-looking statements are predicated on management's beliefs and assumptions based on information known to Independent Bank Corporation's management as of the date of this news release and do not purport to speak as of any other date. Forward-looking statements may include descriptions of plans and objectives of Independent Bank Corporation's management for future or past operations, products or services, and forecasts of the Company's revenue, earnings or other measures of economic performance, including statements of profitability, business segments and subsidiaries, and estimates of credit quality trends. Such statements reflect the view of Independent Bank Corporation's management as of this date with respect to future events and are not guarantees of future performance, involve assumptions and are subject to substantial risks and uncertainties, such as the changes in Independent Bank Corporation's plans, objectives, expectations and intentions. Should one or more of these risks materialize or should underlying beliefs or assumptions prove incorrect, the Company's actual results could differ materially from those discussed. Factors that could cause or contribute to such differences are changes in interest rates, changes in the accounting treatment of any particular item, the results of regulatory examinations, changes in industries where the Company has a concentration of loans, changes in the level of fee income, changes in general economic conditions and related credit and market conditions, and the impact of regulatory responses to any of the foregoing. Forward-looking statements speak only as of the date they are made. Independent Bank Corporation does not undertake to update forward-looking statements to reflect facts, circumstances, assumptions or events that occur after the date the forward- looking statements are made. For any forward-looking statements made in this news release or in any documents, Independent Bank Corporation claims the protection of the safe harbor for forward-looking statements contained in the Private Securities Litigation Reform Act of 1995.
Source: Independent Bank Corporation
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