Operating Segments

9 Months Ended

Sep. 30, 2011

Operating Segments [Abstract]

Operating Segments

6.  Segments

Our reportable segments are based upon legal entities.  We currently have two reportable segments:  Independent Bank (“IB” or “Bank”) and Mepco.  These business segments are also differentiated based on the products and services provided.  We evaluate performance based principally on net income (loss) of the respective reportable segments.

In the normal course of business, our IB segment provides funding to our Mepco segment through an intercompany line of credit priced at the prime rate of interest as published in the Wall Street Journal. Our IB segment also provides certain administrative services to our Mepco segment which reimburses at an agreed upon rate. These intercompany transactions are eliminated upon consolidation. The only other material intersegment balances and transactions are investments in subsidiaries at the parent entities and cash balances on deposit at our IB segment.

A summary of selected financial information for our reportable segments as of or for the three-month and nine-month periods ended September 30 follows:

As of or for the three months ended September 30,

	IB			Mepco(1)			Other(2)			Elimination(3)			Total
				(In thousands)
2011
Total assets	$	2,116,134		$	202,034		$	168,422		$	(169,217	)	$	2,317,373
Interest income		22,913			5,274			-			-			28,187
Net interest income		20,474			3,982			(682	)		-			23,774
Provision for loan losses		6,165			6			-			-			6,171
Loss before income tax		(3,594	)		(150	)		(836	)		(24	)		(4,604	)
Net loss		(3,164	)		(96	)		(838	)		(24	)		(4,122	)
2010
Total assets	$	2,434,890		$	302,329		$	180,828		$	(181,275	)	$	2,736,772
Interest income		27,236			8,451			-			-			35,687
Net interest income		21,258			6,405			(678	)		-			26,985
Provision for loan losses		9,598			(55	)		-			-			9,543
Loss before income tax		(4,239	)		(2,201	)		(1,124	)		(24	)		(7,588	)
Net loss		(4,078	)		(1,384	)		(1,124	)		(24	)		(6,610	)

(1) Total assets include gross payment plan receivables of $0.1 million at September 30, 2010 from customers domiciled in Canada.  There were no such amounts at September 30, 2011.  The amount at September 30, 2010 represents less than 1% of total payment plan receivables outstanding.

(2) Includes amounts relating to our parent company and certain insignificant operations.

(3) Includes parent company's investment in subsidiaries and cash balances maintained at subsidiary.

As of or for the nine months ended September 30,

	IB			Mepco(1)			Other(2)			Elimination(3)			Total
				(In thousands)
2011
Total assets	$	2,116,134		$	202,034		$	168,422		$	(169,217	)	$	2,317,373
Interest income		71,226			16,806			-			-			88,032
Net interest income		61,078			12,556			(2,026	)		-			71,608
Provision for loan losses		20,986			43			-			-			21,029
Income (loss) before income tax		(9,463	)		(1,062	)		(1,638	)		(71	)		(12,234	)
Net income (loss)		(9,097	)		(678	)		(1,640	)		(71	)		(11,486	)

2010
Total assets	$	2,434,890		$	302,329		$	180,828		$	(181,275	)	$	2,736,772
Interest income		85,367			30,056			-			-			115,423
Net interest income		66,286			23,101			(3,800	)		-			85,587
Provision for loan losses		39,529			(292	)		-			-			39,237
Income (loss) before income tax		(26,143	)		(377	)		12,942			(71	)		(13,649	)
Net income (loss)		(25,196	)		(238	)		12,942			(71	)		(12,563	)

(1) Total assets include gross payment plan receivables of $0.1 million at September 30, 2010 from customers domiciled in Canada.  There were no such amounts at September 30, 2011.  The amount at September 30, 2010 represents less than 1% of total payment plan receivables outstanding.

(2) Includes amounts relating to our parent company and certain insignificant operations.  Net income (loss) in 2010 includes parent company's $18.1 million gain on extinguishment of debt.

(3) Includes parent company's investment in subsidiaries and cash balances maintained at subsidiary.