Hello and welcome to the Independent Bank Corporation's fourth quarter 2008 earnings conference call. All participants will be in a listen-only mode. There will be an opportunity for to you to ask questions at the end of today's presentation. (Operator Instructions) Please note this conference is being recorded. Now, I would like to turn the conference over to Chief Executive, Christopher Oddleifson. Mr. Oddleifson, the floor is yours, sir.

Thank you very much and good afternoon everybody and thank you for joining us. I’m joined by Denis Sheahan, our Chief Financial Officer, who will after my comments review our current financial performance, our credit quality and our outlook. I'll begin with a customary cautionary statement. This call may contain forward-looking statements with respect to the financial condition, results of operations and business of Independent Bank Corp. Actual results may be different. Independent Bank Corp. cautions you against unduly relying on any forward-looking statements and disclaims any intent to update publicly any forward-looking statements, whether in response to new information, future events or otherwise. We released our fourth quarter and full year results a little earlier this afternoon. Fourth quarter net income was $3 million or $0.18 diluted earnings per share. Operating earnings for all of 2008 amounted to $25.3 million or $1.61 diluted earnings per share. The fourth quarter is clearly a case where our individual business line performance convey a very different impression than the reported earnings which were impacted by the difficult accounting judgments involved in valuing trust preferred securities under highly illiquid market conditions. We feel we are best served by taking decisive action to put as much of the lingering uncertainties surrounding these ongoing security valuations behind us. And Denis will discuss this in more detail shortly. We believe our quarter results are by no means representative of the strength of the banking franchise. Our primary business lines are solidly profitable and are expected to remain so. Our on the ground banking activities are actually quite robust. We continue to generate healthy business volumes and are gaining added business from new and existing customers. The current market is a tough one for sure and we're certainly not immune, but we've not gone into any kind of shell. There's still a lot of good business out there and we're very active pursuing it. I'll let Denis take us through the financials now and then I'll have a few more comments after he's through.

Thank you, Chris, and good afternoon everyone. Independent Bank Corp. reported net income of $3 million or GAAP diluted earnings per share of $0.18 for the fourth quarter of 2008 as compared to $7.7 million or $0.56 GAAP diluted earnings per share for the same period last year. On a year-to-date basis, GAAP diluted earnings per share was $1.52, a decrease of 24% from the comparable prior year period. There were no non-core items in this past fourth quarter, but there are a number of such items in various prior periods as detailed in a table in the earnings release. Excluding these non-core items, diluted earnings per share on an operating basis were $1.61 for the year, a decrease of 24% from last year. I'll now review a number of key takeaways from the fourth quarter. The primary item negatively impacting Q4 and 2008 performance is securities Other-Than-Temporary Impairment charges on pooled trust preferred securities amounting to $4.6 million pre-tax in the fourth quarter and $7.2 million pre-tax for the full year. The operating earnings per share impact of these charges amount to $0.18 per diluted share in the fourth quarter and $0.30 per diluted share for 2008. Management considers these charges to be operating in nature and are reflected as such in the operating EPS numbers previously discussed. As you know, the value of many securities has been negatively affected by a corporate bond market in complete disarray with prices not reflective of a bond's inherent value. While management has the capacity and intent to hold on to these securities, nonetheless fair value accounting requires recognition of these values and we have conservatively recognized impairment on these pooled trust preferreds by reducing the value of BBB-rated bonds to approximately $0.13 per dollar and certain A-rated bonds to approximately $0.24…

Thank you, Denis. I would like to add a little more about 2008 to illustrate the strength of the franchise going forward into 2009. We accomplished much last year. We substantially completed our efforts to reposition the balance sheet by reducing our concentration on below-hurdle our non-strategic assets such as indirect auto loans. We continued to transform ourselves into a more commercial banking like franchise. Commercial loans have grown to over 60% percent of our loan portfolio and we've made some key hires in this area that are really paying off. Our high priority investment management business has fared pretty well despite the very difficult markets. We continue to see an influx of clients who are consolidating their assets with us. After the 2008 market decline, client distributions and added back the new business generation, we're down about 13% to $1.1 billion of assets under management from the end of 2007. We're in excellent shape liquidity-wise. Our deposit levels have grown steadily throughout the year and core deposits now comprise 67% of total deposits. We have spent considerable time developing an effective customer relationship business model and our branch-based network is increasingly a source of referrals to all lines of business. We fully completed the integration of Slade's Bank which has nicely boosted our market share and our footprint. Our expectations for customer retention of financial benefits have been more than that. A few months ago we announced the acquisition of Ben Franklin Bank, a healthy, well-run community bank with $650 million in deposits. This provides us access to contiguous Greater Boston markets that possess superb demographics and really good population density. The regulatory process is coming along well. The shareholder meetings are scheduled for mid-February and we hope to close sometime during the first quarter. And finally, we're attracting…

Yes, sir. (Operator Instructions) And our first question comes from Laurie Hunsicker of Stifel Nicholas. Laurie Hunsicker – Stifel Nicholas: Yes, hi. Good afternoon, Chris and Denis. Denis, just wondered, can you give us a little bit more color on the linked quarter increase in nonperformers, I guess specifically three categories, the CNI, the commercial real estate and the residential portfolio?

Sure. I think as I mentioned in my comments, the residential portfolio was up about $2.7 million and frankly what's going on in the residential portfolio is taking a lot longer to work through credits as they get into nonperforming status and head through sort of any kind of modification pipeline that we have. It just takes longer to get through this process, so we've talked about before our anticipation that residential NPAs will balloon for a period until they work through what is becoming a more and ever more lengthier process to come to ultimate conclusion on those credits. Laurie Hunsicker – Stifel Nicholas: I guess I mean is there any one geography or any one sort of thing that you can point to and say, well, this is more predominantly focused in this area than—

No, and I point out a couple of things, Laurie, about our residential portfolio. Certainly non-performers have come up. In the fourth quarter we had I think it was $360,000 of residential charge offs, yes, in Q4. That's the first time we've had a charge-off in residential since 2001, so on the whole it's a very quality portfolio, but we don't see much by way of charge-off coming through the residential portfolio, at least with what was outstanding as of December 31st. Laurie Hunsicker – Stifel Nicholas: Okay.

So it's not a particular sector. It's just life events, someone loses their job, they divorce, an illness. I mean so that's what's playing into the increase. Laurie Hunsicker – Stifel Nicholas & Company, Inc.: Okay. And remind me what is your approximate LTV and your approximate average size and approximate cycle?

Sure. [Inaudible] for a moment. As of December 31st and these are revalued and rescored numbers. I want to re-emphasize that. This is using automated valuation methods largely or drive-bys in those cases where the automated method doesn't make sense. We revalued as of November 30th and rescored within the quarter. The weighted average LTV of our residential portfolio is 62% and the weighted average FICO is 733 [ph]. Laurie Hunsicker – Stifel Nicholas: Right.

Okay. I think your other question was pertaining to the commercial portfolio. If I total up our commercial nonperformers, you're at about $14 million or so. I think there's 12.4 in commercial real estate and 1.9 in CNI and all that $14 million, roughly $8.5 million of it is in two credits, one of which we talked about in our September 30th conference call and both of these credits are construction related, one of which we mentioned in the September 30th call and we talked about that at that time we expected to be able to work through that loan pretty effectively and we are seeing that. We expect that first credit that went nonperforming on September 30th, there have been some sales associated with it to the tune of about $1.4 million here in the first quarter, so we think we will work through that credit pretty effectively. The second credit is about $4.1 million also a construction loan. That one is going to take a little bit longer. We do expect that to be a lengthy workout process. We do expect to take some loss associated with it which we have included in our reserve assumptions as of December 31st. Laurie Hunsicker – Stifel Nicholas: And of your $1.8 million of charge-offs for the quarter, how much was associated with these two loans or how much was commercial?

Zero. We actually had net recoveries in commercial in the fourth quarter. Laurie Hunsicker – Stifel Nicholas: Okay.

But when I say recognized in our provisioning, we have performed the appropriate impairment testing under FAS 114 and have provided a reserve in our reserve for loan losses through out provision in the income statement in the fourth quarter. Laurie Hunsicker – Stifel Nicholas: Got it. So of the 5.6 million that you took for the quarter, how much was related to commercial?

I am not going to breakdown, Laurie, in great detail what that was. It's safe to say that with commercial NPAs increasing, a large component of the increase was associated with commercial. Laurie Hunsicker – Stifel Nicholas: Okay. Okay, great. Thanks.

Sure.

(Operator Instructions) It looks like we have a question comes from Damon Delmonte of KBW. Damon Delmonte – KBW: Hi. Good afternoon guys. How are you?

Hi, Damon. Damon Delmonte – KBW: Denis, with respect to your guidance for next year, the dilution from TARP was included in the 160 to 170 range.

Correct. Damon Delmonte – KBW: That is correct?

That's right. Damon Delmonte – KBW: Okay. That was about it. You guys covered a lot in the call. Thank you.

Sure, Damon. You're welcome.

And gentlemen, we're showing no further questions at this time.

Alright, well, thank you very much everybody for joining us so soon after we released just an hour ago. And we look forward to talking to you next quarter. Thank you.

Thank you for joining us. The conference has now concluded. You may now disconnect.