Merger Fees Hit Independence Bank Profits

New York-based Independence Community Bank ( ICBC) said fourth-quarter earnings fell 14% from a year ago, hit by merger-related fees and a lower net interest margin.

The bank earned $45.2 million, or 56 cents a share, in the quarter, compared wtih $52.4 million, or 63 cents a share, in the quarter a year ago.

The profit figures included merger-related fees of $4.3 million associated with the pending acquisition of the company by Sovereign Bancorp, which is expected to close during the second quarter of 2006. Excluding these charges, net income would have been $48 million, or 60 cents a share, a tad below the Thomson First call estimate of $49.7 million in profits and 61 cents earnings a share.

Net interest margin dropped by 56 basis points to 2.82% for the quarter ended Dec. 31, 2005, compared to 3.38% for the previous year, while net interest income fell to $113.9 million as compared with $131.8 million a year ago. Non-interest income, on the other hand, rose smartly to $32.3 million in this quarter as compared to $22.7 million in the corresponding period. Nonperforming assets improved to 0.20% as on Dec. 31, 2005, compared to 0.29% as on Dec. 31, 2004.

Independence Community Bank will hold a special meeting of stockholders on Jan. 25, 2006, to consider approval of the merger.

This story was created through a joint venture between TheStreet.com and IRIS.

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