INDB Independent Bank Corporation

Solid performance marked by higher revenues and strong deposit generation

Independent Bank Corp. (Nasdaq Global Select Market: INDB), parent of Rockland Trust Company, today announced 2024 second quarter net income of $51.3 million, or $1.21 per diluted share, compared to 2024 first quarter net income of $47.8 million, or $1.12 per diluted share.

The Company generated a return on average assets of 1.07% and a return on average common equity of 7.10% for the second quarter of 2024, as compared to 1.00% and 6.63%, respectively, for the prior quarter.

“Our second quarter results reflect positive momentum in all of the core components that drive the Company’s financial performance. Despite persistent uncertainty in the broader macroeconomic environment, our colleagues’ steadfast focus on each relationship remains the backbone of our success,” said Jeffrey Tengel, the Chief Executive Officer of Independent Bank Corp. and Rockland Trust Company.

BALANCE SHEET

Total assets of $19.4 billion at June 30, 2024 increased $86.4 million, or 0.4%, from the prior quarter and reflect a healthy remix of assets from securities into loans when compared to June 30, 2023 levels.

Total loans at June 30, 2024 of $14.4 billion increased by $70.3 million, or 0.5% (2.0% annualized), compared to the prior quarter level. On the commercial side, loan growth was primarily driven by an increase in the commercial and industrial portfolio, an area of increased emphasis, which increased $22.7 million, or 1.4% (5.8% annualized), while the combined commercial real estate and construction loans outstanding were essentially flat. Commercial loan pipelines remained healthy at quarter end. The small business portfolio also continued its steady growth, rising by 2.9% during the second quarter of 2024, while the total consumer portfolio increased $39.2 million, or 1.1% (4.4% annualized) from the prior quarter, reflecting strong overall closing activity and increased home equity utilization.

Deposit balances rose to $15.4 billion at June 30, 2024, representing growth of $366.4 million, or 2.4%, from March 31, 2024. This increase was experienced across all segments, with municipal deposits comprising the majority of the growth. Though some level of product remixing persists, overall core deposits represented 81.9% of total deposits at June 30, 2024, as compared to 83.2% at March 31, 2024, with total noninterest bearing demand deposits comprising 28.7% of total deposits at June 30, 2024, versus 29.7% at March 31, 2024. The total cost of deposits for the second quarter increased 17 basis points to 1.65% compared to the prior quarter.

In conjunction with deposit growth during the quarter, total borrowings declined by $332.0 million, or 32.4%, during the second quarter of 2024, driven by a reduction in Federal Home Loan Bank (“FHLB”) borrowings. The overall cost of funding increased 8 basis points as compared to 23 basis points in the prior quarter, as ongoing increases in deposit costs were mitigated by reductions in wholesale borrowing costs.

The securities portfolio decreased by $80.0 million, or 2.8%, compared to March 31, 2024, driven primarily by paydowns and maturities, offset in part by unrealized gains of $5.4 million in the available for sale portfolio. Total securities represented 14.2% of total assets at June 30, 2024, as compared to 14.7% at March 31, 2024.

Stockholders’ equity at June 30, 2024 increased $35.0 million, or 1.2%, compared to March 31, 2024, driven primarily by strong earnings retention as well as unrealized gains on the available for sale investment securities portfolio included in other comprehensive income. The Company’s ratio of common equity to assets of 15.04% at June 30, 2024 represented an increase of 12 basis points from March 31, 2024 and an increase of 32 basis points from June 30, 2023. The Company’s book value per share increased by $0.80, or 1.2%, to $68.74 at June 30, 2024 as compared to the prior quarter. The Company’s tangible book value per share at June 30, 2024 rose by $0.85, or 1.9%, from the prior quarter to $45.19, and has grown by 7.9% from the year ago period. The Company’s ratio of tangible common equity to tangible assets of 10.42% at June 30, 2024 represented an increase of 15 basis points from the prior quarter and an increase of 37 basis points from the year ago period. Please refer to Appendix A for a detailed reconciliation of Non-GAAP balance sheet metrics.

NET INTEREST INCOME

Net interest income for the second quarter of 2024 increased slightly to $137.9 million as compared to $137.4 million for the prior quarter, due to modest loan growth and a slightly improved net interest margin. The net interest margin of 3.25% increased 2 basis points when compared to the prior quarter, driven primarily by higher loan yields, securities cash flow deployment, and maturing loan hedges, offset by increased funding costs.

NONINTEREST INCOME

Noninterest income of $32.3 million for the second quarter of 2024 represented an increase of $2.4 million, or 8.0%, as compared to the prior quarter. Significant changes in noninterest income for the second quarter of 2024 compared to the prior quarter included the following:

• Interchange and ATM fees increased by $301,000, or 6.8%, driven by increased transaction volume during the second quarter of 2024.

• Investment management and advisory income increased by $1.0 million, or 10.5%, primarily driven by seasonal tax preparation fees and insurance commissions, as well as an increase in total assets under administration, which rose by $66.6 million, or 1.0%, to a record level of $6.9 billion at June 30, 2024.

• Mortgage banking income grew by $524,000, or 65.8%, driven primarily by a higher volume of sold originations during the quarter.

• The Company received proceeds on life insurance policies resulting in a gain of $263,000 during the first quarter of 2024, while no such gains were recognized during the second quarter of 2024.

• Loan level derivative income rose by $393,000, reflecting an increase from lower prior quarter levels.

• Other noninterest income increased by $210,000, or 3.4%, driven primarily by outsized loan fees and FHLB dividend income, partially offset by reduced gains on equity securities.

NONINTEREST EXPENSE

Noninterest expense of $99.6 million for the second quarter of 2024 represented a decrease of $273,000, or 0.3%, as compared to the prior quarter. Significant changes in noninterest expense for the second quarter compared to the prior quarter included the following:

• Salaries and employee benefits were essentially flat as compared to the prior quarter, as increased commissions, equity compensation and medical plan insurance were offset by an outsized benefit related to the valuation of the Company’s split-dollar bank-owned life insurance policies.

• Occupancy and equipment expenses decreased by $995,000, or 7.4%, due mainly to seasonal decreases in snow removal and utilities costs.

• FDIC assessment decreased $288,000, or 9.7%, from the prior quarter, driven primarily by the FDIC special assessment recognized by the Company.

• Other noninterest expense increased by $1.1 million, or 4.6%, due primarily to increases in advertising costs, director equity compensation granted during the quarter, professional fees, and subscriptions, partially offset by decreased debit card expenses and card issuance costs.

The Company’s tax rate for the second quarter of 2024 decreased to 22.69%, compared to 23.56% for the prior quarter, primarily due to the timing of discrete items.

ASSET QUALITY

The second quarter provision for credit losses was $4.3 million as compared to $5.0 million for the first quarter of 2024 and was largely attributable to specific reserve allocations on existing nonperforming loans. Net charge-offs remained minimal at $339,000 for the second quarter of 2024, as compared to $274,000 for the prior quarter, representing 0.01% of average loans annualized for each respective quarter. Nonperforming loans also stayed relatively flat at $57.5 million at June 30, 2024, as compared to $56.9 million at March 31, 2024 and represented 0.40% of total loans at each respective period. Delinquencies as a percentage of total loans decreased 15 basis points from the prior quarter to 0.37% at June 30, 2024.

The allowance for credit losses on total loans increased to $150.9 million at June 30, 2024 compared to $146.9 million at March 31, 2024, and represented 1.05% and 1.03% of total loans, at June 30, 2024 and March 31, 2024, respectively.

CONFERENCE CALL INFORMATION

Jeffrey Tengel, Chief Executive Officer, and Mark Ruggiero, Chief Financial Officer and Executive Vice President of Consumer Lending, will host a conference call to discuss second quarter earnings at 10:00 a.m. Eastern Time on Friday, July 19, 2024. Internet access to the call is available on the Company’s website at https://INDB.RocklandTrust.com or via telephonic access by dial-in at 1-888-336-7153 reference: INDB. A replay of the call will be available by calling 1-877-344-7529, Replay Conference Number: 3664959 and will be available through July 26, 2024. Additionally, a webcast replay will be available on the Company’s website until July 19, 2025.

ABOUT INDEPENDENT BANK CORP.

Independent Bank Corp. (NASDAQ Global Select Market: INDB) is the holding company for Rockland Trust Company, a full-service commercial bank headquartered in Massachusetts. With retail branches in Eastern Massachusetts and Worcester County as well as commercial banking and investment management offices in Massachusetts and Rhode Island, Rockland Trust offers a wide range of banking, investment, and insurance services to individuals, families, and businesses. The Bank also offers a full suite of mobile, online, and telephone banking services. Rockland Trust is an FDIC member and an Equal Housing Lender.

This press release contains certain “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995 with respect to the financial condition, results of operations and business of the Company. These statements may be identified by such forward-looking terminology as “expect,” “achieve,” “plan,” “believe,” “future,” “positioned,” “continued,” “will,” “would,” “potential,” or similar statements or variations of such terms. Actual results may differ from those contemplated by these forward-looking statements.

Factors that may cause actual results to differ materially from those contemplated by such forward-looking statements include, but are not limited to:

• adverse economic conditions in the regional and local economies within the New England region and the Company’s market area;
• events impacting the financial services industry, including high profile bank failures, and any resulting decreased confidence in banks among depositors, investors, and other counterparties, as well as competition for deposits, significant disruption, volatility and depressed valuations of equity and other securities of banks in the capital markets;
• the effects to the Company of an increasingly competitive labor market, including the possibility that the Company will have to devote significant resources to attract and retain qualified personnel;
• the instability or volatility in financial markets and unfavorable domestic or global general economic, political or business conditions, whether caused by geopolitical concerns, including the Russia/Ukraine conflict, the conflict in Israel and surrounding areas and the possible expansion of such conflicts, changes in U.S. and international trade policies, or other factors, and the potential impact of such factors on the Company and its customers, including the potential for decreases in deposits and loan demand, unanticipated loan delinquencies, loss of collateral and decreased service revenues;
• unanticipated loan delinquencies, loss of collateral, decreased service revenues, and other potential negative effects on the Company’s local economies or the Company's business caused by adverse weather conditions and natural disasters, changes in climate, public health crises or other external events and any actions taken by governmental authorities in response to any such events;
• adverse changes or volatility in the local real estate market;
• changes in interest rates and any resulting impact on interest earning assets and/or interest bearing liabilities, the level of voluntary prepayments on loans and the receipt of payments on mortgage-backed securities, decreased loan demand or increased difficulty in the ability of borrowers to repay variable rate loans;
• acquisitions may not produce results at levels or within time frames originally anticipated and may result in unforeseen integration issues or impairment of goodwill and/or other intangibles;
• the effect of laws, regulations, new requirements or expectations, or additional regulatory oversight in the highly regulated financial services industry, including as a result of intensified regulatory scrutiny in the aftermath of recent bank failures and the resulting need to invest in technology to meet heightened regulatory expectations, increased costs of compliance or required adjustments to strategy;
• changes in trade, monetary and fiscal policies and laws, including interest rate policies of the Board of Governors of the Federal Reserve System;
• higher than expected tax expense, including as a result of failure to comply with general tax laws and changes in tax laws;
• increased competition in the Company’s market areas, including competition that could impact deposit gathering, retention of deposits and the cost of deposits, increased competition due to the demand for innovative products and service offerings, and competition from non-depository institutions which may be subject to fewer regulatory constraints and lower cost structures;
• a deterioration in the conditions of the securities markets;
• a deterioration of the credit rating for U.S. long-term sovereign debt or uncertainties surrounding the federal budget;
• inability to adapt to changes in information technology, including changes to industry accepted delivery models driven by a migration to the internet as a means of service delivery, including any inability to effectively implement new technology-driven products, such as artificial intelligence;
• electronic or other fraudulent activity within the financial services industry, especially in the commercial banking sector;
• adverse changes in consumer spending and savings habits;
• the effect of laws and regulations regarding the financial services industry, including the need to invest in technology to meet heightened regulatory expectations or introduction of new requirements or expectations resulting in increased costs of compliance or required adjustments to strategy;
• changes in laws and regulations (including laws and regulations concerning taxes, banking, securities and insurance) generally applicable to the Company’s business and the associated costs of such changes;
• the Company’s potential judgments, claims, damages, penalties, fines and reputational damage resulting from pending or future litigation and regulatory and government actions;
• changes in accounting policies, practices and standards, as may be adopted by the regulatory agencies as well as the Public Company Accounting Oversight Board, the Financial Accounting Standards Board, and other accounting standard setters;
• operational risks related to cyber threats, attacks, intrusions, and fraud which could lead to interruptions or disruptions of the Company’s operating systems, including systems that are customer facing, and adversely impact the Company’s business;
• any unexpected material adverse changes in the Company’s operations or earnings.

The Company wishes to caution readers not to place undue reliance on any forward-looking statements as the Company’s business and its forward-looking statements involve substantial known and unknown risks and uncertainties described in the Company’s Annual Report on Form 10-K and subsequent Quarterly Reports on Form 10-Q (“Risk Factors”). Except as required by law, the Company disclaims any intent or obligation to update publicly any such forward-looking statements, whether in response to new information, future events or otherwise. Any public statements or disclosures by the Company following this release which modify or impact any of the forward-looking statements contained in this release will be deemed to modify or supersede such statements in this release. In addition to the information set forth in this press release, you should carefully consider the Risk Factors.

This press release and the appendices attached to it contain financial information determined by methods other than in accordance with accounting principles generally accepted in the United States of America (“GAAP”). This information may include operating net income and operating earnings per share (“EPS”), operating return on average assets, operating return on average common equity, operating return on average tangible common equity, core net interest margin (“core margin”), tangible book value per share and the tangible common equity ratio.

Management reviews its core margin to determine any items that may impact the net interest margin that may be one-time in nature or not reflective of its core operating environment, such as significant purchase accounting adjustments or other adjustments such as nonaccrual interest reversals/recoveries and prepayment penalties. Management believes that adjusting for these items to arrive at a core margin provides additional insight into the operating environment and how management decisions impact the net interest margin.

Management also supplements its evaluation of financial performance with analysis of tangible book value per share (which is computed by dividing stockholders’ equity less goodwill and identifiable intangible assets, or “tangible common equity,” by common shares outstanding), the tangible common equity ratio (which is computed by dividing tangible common equity by “tangible assets,” defined as total assets less goodwill and other intangibles), and return on average tangible common equity (which is computed by dividing net income by average tangible common equity). The Company has included information on tangible book value per share, the tangible common equity ratio and return on average tangible common equity because management believes that investors may find it useful to have access to the same analytical tools used by management. As a result of merger and acquisition activity, the Company has recognized goodwill and other intangible assets in conjunction with business combination accounting principles. Excluding the impact of goodwill and other intangibles in measuring asset and capital values for the ratios provided, along with other bank standard capital ratios, provides a framework to compare the capital adequacy of the Company to other companies in the financial services industry.

These non-GAAP measures should not be viewed as a substitute for operating results and other financial measures determined in accordance with GAAP. An item which management excludes when computing these non-GAAP measures can be of substantial importance to the Company’s results for any particular quarter or year. The Company’s non-GAAP performance measures, including operating net income, operating EPS, operating return on average assets, operating return on average common equity, core margin, tangible book value per share and the tangible common equity ratio, are not necessarily comparable to non-GAAP performance measures which may be presented by other companies.

Category: Earnings Releases

INDEPENDENT BANK CORP. FINANCIAL SUMMARY

 

 

 

 

 

 

CONSOLIDATED BALANCE SHEETS

 

 

 

 

(Unaudited, dollars in thousands)

 

 

 

 

 

 

% Change

 

% Change

 

June 30 2024

 

March 31 2024

 

June 30 2023

 

Jun 2024 vs.

 

Jun 2024 vs.

 

 

 

 

Mar 2024

 

Jun 2023

Assets

 

 

 

 

 

 

 

 

 

Cash and due from banks

$

192,845

 

 

$

165,331

 

 

$

181,810

 

 

16.64

%

 

6.07

%

Interest-earning deposits with banks

 

121,036

 

 

 

55,985

 

 

 

126,454

 

 

116.19

%

 

(4.28

)%

Securities

 

 

 

 

 

 

 

 

 

Trading

 

4,384

 

 

 

4,759

 

 

 

4,477

 

 

(7.88

)%

 

(2.08

)%

Equities

 

21,028

 

 

 

22,858

 

 

 

21,800

 

 

(8.01

)%

 

(3.54

)%

Available for sale

 

1,220,656

 

 

 

1,272,831

 

 

 

1,372,903

 

 

(4.10

)%

 

(11.09

)%

Held to maturity

 

1,519,655

 

 

 

1,545,267

 

 

 

1,623,892

 

 

(1.66

)%

 

(6.42

)%

Total securities

 

2,765,723

 

 

 

2,845,715

 

 

 

3,023,072

 

 

(2.81

)%

 

(8.51

)%

Loans held for sale

 

17,850

 

 

 

11,340

 

 

 

6,577

 

 

57.41

%

 

171.40

%

Loans

 

 

 

 

 

 

 

 

 

Commercial and industrial

 

1,602,752

 

 

 

1,580,041

 

 

 

1,723,219

 

 

1.44

%

 

(6.99

)%

Commercial real estate

 

8,151,805

 

 

 

8,108,836

 

 

 

7,812,796

 

 

0.53

%

 

4.34

%

Commercial construction

 

786,743

 

 

 

828,900

 

 

 

1,022,796

 

 

(5.09

)%

 

(23.08

)%

Small business

 

269,270

 

 

 

261,690

 

 

 

237,092

 

 

2.90

%

 

13.57

%

Total commercial

 

10,810,570

 

 

 

10,779,467

 

 

 

10,795,903

 

 

0.29

%

 

0.14

%

Residential real estate

 

2,439,646

 

 

 

2,420,705

 

 

 

2,221,284

 

 

0.78

%

 

9.83

%

Home equity - first position

 

504,403

 

 

 

507,356

 

 

 

546,240

 

 

(0.58

)%

 

(7.66

)%

Home equity - subordinate positions

 

612,404

 

 

 

593,230

 

 

 

549,158

 

 

3.23

%

 

11.52

%

Total consumer real estate

 

3,556,453

 

 

 

3,521,291

 

 

 

3,316,682

 

 

1.00

%

 

7.23

%

Other consumer

 

33,919

 

 

 

29,836

 

 

 

27,326

 

 

13.68

%

 

24.13

%

Total loans

 

14,400,942

 

 

 

14,330,594

 

 

 

14,139,911

 

 

0.49

%

 

1.85

%

Less: allowance for credit losses

 

(150,859

)

 

 

(146,948

)

 

 

(140,647

)

 

2.66

%

 

7.26

%

Net loans

 

14,250,083

 

 

 

14,183,646

 

 

 

13,999,264

 

 

0.47

%

 

1.79

%

Federal Home Loan Bank stock

 

32,738

 

 

 

46,304

 

 

 

39,488

 

 

(29.30

)%

 

(17.09

)%

Bank premises and equipment, net

 

191,303

 

 

 

192,563

 

 

 

193,642

 

 

(0.65

)%

 

(1.21

)%

Goodwill

 

985,072

 

 

 

985,072

 

 

 

985,072

 

 

—

%

 

—

%

Other intangible assets

 

15,161

 

 

 

16,626

 

 

 

21,537

 

 

(8.81

)%

 

(29.60

)%

Cash surrender value of life insurance policies

 

300,111

 

 

 

298,352

 

 

 

296,687

 

 

0.59

%

 

1.15

%

Other assets

 

539,115

 

 

 

523,679

 

 

 

527,328

 

 

2.95

%

 

2.24

%

Total assets

$

19,411,037

 

 

$

19,324,613

 

 

$

19,400,931

 

 

0.45

%

 

0.05

%

Liabilities and Stockholders’ Equity

 

 

 

 

 

 

 

 

 

Deposits

 

 

 

 

 

 

 

 

 

Noninterest-bearing demand deposits

$

4,418,891

 

 

$

4,469,820

 

 

$

4,861,092

 

 

(1.14

)%

 

(9.10

)%

Savings and interest checking

 

5,241,154

 

 

 

5,196,195

 

 

 

5,525,223

 

 

0.87

%

 

(5.14

)%

Money market

 

3,058,109

 

 

 

2,944,221

 

 

 

3,065,520

 

 

3.87

%

 

(0.24

)%

Time certificates of deposit

 

2,691,433

 

 

 

2,432,985

 

 

 

1,796,216

 

 

10.62

%

 

49.84

%

Total deposits

 

15,409,587

 

 

 

15,043,221

 

 

 

15,248,051

 

 

2.44

%

 

1.06

%

Borrowings

 

 

 

 

 

 

 

 

 

Federal Home Loan Bank borrowings

 

630,527

 

 

 

962,535

 

 

 

788,479

 

 

(34.49

)%

 

(20.03

)%

Junior subordinated debentures, net

 

62,859

 

 

 

62,858

 

 

 

62,857

 

 

—

%

 

—

%

Subordinated debentures, net

 

—

 

 

 

—

 

 

 

49,933

 

 

nm

 

(100.00

)%

Total borrowings

 

693,386

 

 

 

1,025,393

 

 

 

901,269

 

 

(32.38

)%

 

(23.07

)%

Total deposits and borrowings

 

16,102,973

 

 

 

16,068,614

 

 

 

16,149,320

 

 

0.21

%

 

(0.29

)%

Other liabilities

 

388,815

 

 

 

371,791

 

 

 

396,697

 

 

4.58

%

 

(1.99

)%

Total liabilities

 

16,491,788

 

 

 

16,440,405

 

 

 

16,546,017

 

 

0.31

%

 

(0.33

)%

Stockholders’ equity

 

 

 

 

 

 

 

 

 

Common stock

 

423

 

 

 

422

 

 

 

440

 

 

0.24

%

 

(3.86

)%

Additional paid in capital

 

1,904,869

 

 

 

1,902,063

 

 

 

1,997,674

 

 

0.15

%

 

(4.65

)%

Retained earnings

 

1,128,182

 

 

 

1,101,061

 

 

 

1,009,735

 

 

2.46

%

 

11.73

%

Accumulated other comprehensive loss, net of tax

 

(114,225

)

 

 

(119,338

)

 

 

(152,935

)

 

(4.28

)%

 

(25.31

)%

Total stockholders' equity

 

2,919,249

 

 

 

2,884,208

 

 

 

2,854,914

 

 

1.21

%

 

2.25

%

Total liabilities and stockholders’ equity

$

19,411,037

 

 

$

19,324,613

 

 

$

19,400,931

 

 

0.45

%

 

0.05

%

 

CONSOLIDATED STATEMENTS OF INCOME

 

 

 

 

 

(Unaudited, dollars in thousands, except per share data)

 

 

 

 

 

 

Three Months Ended

 

 

 

 

 

 

 

 

 

 

 

% Change

 

% Change

 

June 30 2024

 

March 31 2024

 

June 30 2023

 

Jun 2024 vs.

 

Jun 2024 vs.

 

 

 

 

Mar 2024

 

Jun 2023

Interest income

 

 

 

 

 

 

 

 

 

Interest on federal funds sold and short-term investments

$

397

 

 

$

483

 

 

$

3,312

 

 

(17.81

)%

 

(88.01

)%

Interest and dividends on securities

 

13,994

 

 

 

14,232

 

 

 

15,583

 

 

(1.67

)%

 

(10.20

)%

Interest and fees on loans

 

197,274

 

 

 

193,226

 

 

 

179,759

 

 

2.09

%

 

9.74

%

Interest on loans held for sale

 

199

 

 

 

104

 

 

 

39

 

 

91.35

%

 

410.26

%

Total interest income

 

211,864

 

 

 

208,045

 

 

 

198,693

 

 

1.84

%

 

6.63

%

Interest expense

 

 

 

 

 

 

 

 

 

Interest on deposits

 

61,469

 

 

 

54,320

 

 

 

31,909

 

 

13.16

%

 

92.64

%

Interest on borrowings

 

12,469

 

 

 

16,286

 

 

 

14,238

 

 

(23.44

)%

 

(12.42

)%

Total interest expense

 

73,938

 

 

 

70,606

 

 

 

46,147

 

 

4.72

%

 

60.22

%

Net interest income

 

137,926

 

 

 

137,439

 

 

 

152,546

 

 

0.35

%

 

(9.58

)%

Provision for credit losses

 

4,250

 

 

 

5,000

 

 

 

5,000

 

 

(15.00

)%

 

(15.00

)%

Net interest income after provision for credit losses

 

133,676

 

 

 

132,439

 

 

 

147,546

 

 

0.93

%

 

(9.40

)%

Noninterest income

 

 

 

 

 

 

 

 

 

Deposit account fees

 

6,332

 

 

 

6,228

 

 

 

5,508

 

 

1.67

%

 

14.96

%

Interchange and ATM fees

 

4,753

 

 

 

4,452

 

 

 

4,478

 

 

6.76

%

 

6.14

%

Investment management and advisory

 

10,987

 

 

 

9,941

 

 

 

10,348

 

 

10.52

%

 

6.18

%

Mortgage banking income

 

1,320

 

 

 

796

 

 

 

670

 

 

65.83

%

 

97.01

%

Increase in cash surrender value of life insurance policies

 

2,000

 

 

 

1,928

 

 

 

1,940

 

 

3.73

%

 

3.09

%

Gain on life insurance benefits

 

—

 

 

 

263

 

 

 

176

 

 

(100.00

)%

 

(100.00

)%

Loan level derivative income

 

473

 

 

 

80

 

 

 

1,275

 

 

491.25

%

 

(62.90

)%

Other noninterest income

 

6,465

 

 

 

6,255

 

 

 

6,362

 

 

3.36

%

 

1.62

%

Total noninterest income

 

32,330

 

 

 

29,943

 

 

 

30,757

 

 

7.97

%

 

5.11

%

Noninterest expenses

 

 

 

 

 

 

 

 

 

Salaries and employee benefits

 

57,162

 

 

 

57,174

 

 

 

53,975

 

 

(0.02

)%

 

5.90

%

Occupancy and equipment expenses

 

12,472

 

 

 

13,467

 

 

 

12,385

 

 

(7.39

)%

 

0.70

%

Data processing and facilities management

 

2,405

 

 

 

2,483

 

 

 

2,530

 

 

(3.14

)%

 

(4.94

)%

FDIC assessment

 

2,694

 

 

 

2,982

 

 

 

2,674

 

 

(9.66

)%

 

0.75

%

Other noninterest expenses

 

24,881

 

 

 

23,781

 

 

 

23,991

 

 

4.63

%

 

3.71

%

Total noninterest expenses

 

99,614

 

 

 

99,887

 

 

 

95,555

 

 

(0.27

)%

 

4.25

%

Income before income taxes

 

66,392

 

 

 

62,495

 

 

 

82,748

 

 

6.24

%

 

(19.77

)%

Provision for income taxes

 

15,062

 

 

 

14,725

 

 

 

20,104

 

 

2.29

%

 

(25.08

)%

Net Income

$

51,330

 

 

$

47,770

 

 

$

62,644

 

 

7.45

%

 

(18.06

)%

 

 

 

 

 

 

 

 

 

 

Weighted average common shares (basic)

 

42,468,658

 

 

 

42,553,714

 

 

 

44,129,152

 

 

 

 

 

Common share equivalents

 

4,308

 

 

 

12,876

 

 

 

7,573

 

 

 

 

 

Weighted average common shares (diluted)

 

42,472,966

 

 

 

42,566,590

 

 

 

44,136,725

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic earnings per share

$

1.21

 

 

$

1.12

 

 

$

1.42

 

 

8.04

%

 

(14.79

)%

Diluted earnings per share

$

1.21

 

 

$

1.12

 

 

$

1.42

 

 

8.04

%

 

(14.79

)%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Performance ratios

 

 

 

 

 

 

 

 

 

Net interest margin (FTE)

 

3.25

%

 

 

3.23

%

 

 

3.54

%

 

 

 

 

Return on average assets (calculated by dividing net income by average assets) (GAAP)

 

1.07

%

 

 

1.00

%

 

 

1.29

%

 

 

 

 

Return on average common equity (calculated by dividing net income by average common equity) (GAAP)

 

7.10

%

 

 

6.63

%

 

 

8.78

%

 

 

 

 

Return on average tangible common equity (Non-GAAP) (calculated by dividing net income by average tangible common equity)

 

10.83

%

 

 

10.15

%

 

 

13.54

%

 

 

 

 

Noninterest income as a % of total revenue (calculated by dividing total noninterest income by net interest income plus total noninterest income)

 

18.99

%

 

 

17.89

%

 

 

16.78

%

 

 

 

 

Efficiency ratio (calculated by dividing total noninterest expense by total revenue)

 

58.51

%

 

 

59.68

%

 

 

52.13

%

 

 

 

 

 

CONSOLIDATED STATEMENTS OF INCOME

 

 

 

 

 

(Unaudited, dollars in thousands, except per share data)

 

 

 

 

 

 

Six Months Ended

 

 

 

 

 

 

 

 

% Change

 

 

June 30 2024

 

June 30 2023

 

Jun 2024 vs.

 

 

 

 

Jun 2023

 

 

 

 

 

 

 

Interest income

 

 

 

 

 

 

Interest on federal funds sold and short-term investments

 

$

880

 

 

$

3,977

 

 

(77.87

)%

Interest and dividends on securities

 

 

28,226

 

 

 

30,893

 

 

(8.63

)%

Interest and fees on loans

 

 

390,500

 

 

 

350,685

 

 

11.35

%

Interest on loans held for sale

 

 

303

 

 

 

73

 

 

315.07

%

Total interest income

 

 

419,909

 

 

 

385,628

 

 

8.89

%

Interest expense

 

 

 

 

 

 

Interest on deposits

 

 

115,789

 

 

 

54,584

 

 

112.13

%

Interest on borrowings

 

 

28,755

 

 

 

19,500

 

 

47.46

%

Total interest expense

 

 

144,544

 

 

 

74,084

 

 

95.11

%

Net interest income

 

 

275,365

 

 

 

311,544

 

 

(11.61

)%

Provision for credit losses

 

 

9,250

 

 

 

12,250

 

 

(24.49

)%

Net interest income after provision for credit losses

 

 

266,115

 

 

 

299,294

 

 

(11.09

)%

Noninterest income

 

 

 

 

 

 

Deposit account fees

 

 

12,560

 

 

 

11,424

 

 

9.94

%

Interchange and ATM fees

 

 

9,205

 

 

 

8,662

 

 

6.27

%

Investment management and advisory

 

 

20,928

 

 

 

20,127

 

 

3.98

%

Mortgage banking income

 

 

2,116

 

 

 

978

 

 

116.36

%

Increase in cash surrender value of life insurance policies

 

 

3,928

 

 

 

3,794

 

 

3.53

%

Gain on life insurance benefits

 

 

263

 

 

 

187

 

 

40.64

%

Loan level derivative income

 

 

553

 

 

 

1,683

 

 

(67.14

)%

Other noninterest income

 

 

12,720

 

 

 

12,144

 

 

4.74

%

Total noninterest income

 

 

62,273

 

 

 

58,999

 

 

5.55

%

Noninterest expenses

 

 

 

 

 

 

Salaries and employee benefits

 

 

114,336

 

 

 

110,950

 

 

3.05

%

Occupancy and equipment expenses

 

 

25,939

 

 

 

25,207

 

 

2.90

%

Data processing and facilities management

 

 

4,888

 

 

 

5,057

 

 

(3.34

)%

FDIC assessment

 

 

5,676

 

 

 

5,284

 

 

7.42

%

Other noninterest expenses

 

 

48,662

 

 

 

47,718

 

 

1.98

%

Total noninterest expenses

 

 

199,501

 

 

 

194,216

 

 

2.72

%

Income before income taxes

 

 

128,887

 

 

 

164,077

 

 

(21.45

)%

Provision for income taxes

 

 

29,787

 

 

 

40,186

 

 

(25.88

)%

Net Income

 

$

99,100

 

 

$

123,891

 

 

(20.01

)%

 

 

 

 

 

 

 

Weighted average common shares (basic)

 

 

42,511,186

 

 

 

44,564,209

 

 

 

Common share equivalents

 

 

8,592

 

 

 

13,568

 

 

 

Weighted average common shares (diluted)

 

 

42,519,778

 

 

 

44,577,777

 

 

 

 

 

 

 

 

 

 

Basic earnings per share

 

$

2.33

 

 

$

2.78

 

 

(16.19

)%

Diluted earnings per share

 

$

2.33

 

 

$

2.78

 

 

(16.19

)%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Performance ratios

 

 

 

 

 

 

Net interest margin (FTE)

 

 

3.24

%

 

 

3.67

%

 

 

Return on average assets (GAAP) (calculated by dividing net income by average assets)

 

 

1.03

%

 

 

1.29

%

 

 

Return on average common equity (GAAP) (calculated by dividing net income by average common equity)

 

 

6.87

%

 

 

8.70

%

 

 

Return on average tangible common equity (Non-GAAP) (calculated by dividing net income by average tangible common equity)

 

 

10.49

%

 

 

13.42

%

 

 

Noninterest income as a % of total revenue (calculated by dividing total noninterest income by net interest income plus total noninterest income)

 

 

18.44

%

 

 

15.92

%

 

 

Efficiency ratio (GAAP) (calculated by dividing total noninterest expense by total revenue)

 

 

59.09

%

 

 

52.41

%

 

 

nm = not meaningful

ASSET QUALITY

 

 

(Unaudited, dollars in thousands)

 

Nonperforming Assets At

 

 

June 30 2024

 

March 31 2024

 

June 30 2023

Nonperforming loans

 

 

 

 

 

 

Commercial & industrial loans

 

$

17,793

 

 

$

17,640

 

 

$

3,235

 

Commercial real estate loans

 

 

23,479

 

 

 

24,213

 

 

 

29,910

 

Small business loans

 

 

437

 

 

 

316

 

 

 

348

 

Residential real estate loans

 

 

10,629

 

 

 

9,947

 

 

 

8,179

 

Home equity

 

 

5,090

 

 

 

4,805

 

 

 

3,944

 

Other consumer

 

 

23

 

 

 

20

 

 

 

86

 

Total nonperforming loans

 

 

57,451

 

 

 

56,941

 

 

 

45,702

 

Other real estate owned

 

 

110

 

 

 

110

 

 

 

110

 

Total nonperforming assets

 

$

57,561

 

 

$

57,051

 

 

$

45,812

 

 

 

 

 

 

 

 

Nonperforming loans/gross loans

 

 

0.40

%

 

 

0.40

%

 

 

0.32

%

Nonperforming assets/total assets

 

 

0.30

%

 

 

0.30

%

 

 

0.24

%

Allowance for credit losses/nonperforming loans

 

 

262.59

%

 

 

258.07

%

 

 

307.75

%

Allowance for credit losses/total loans

 

 

1.05

%

 

 

1.03

%

 

 

0.99

%

Delinquent loans/total loans

 

 

0.37

%

 

 

0.52

%

 

 

0.30

%

 

 

 

 

 

 

 

 

 

Nonperforming Assets Reconciliation for the Three Months Ended

 

 

June 30 2024

 

March 31 2024

 

June 30 2023

 

 

 

 

 

 

 

Nonperforming assets beginning balance

 

$

57,051

 

 

$

54,493

 

 

$

56,235

 

New to nonperforming

 

 

6,201

 

 

 

19,258

 

 

 

18,018

 

Loans charged-off

 

 

(808

)

 

 

(881

)

 

 

(23,767

)

Loans paid-off

 

 

(3,458

)

 

 

(6,982

)

 

 

(3,984

)

Loans restored to performing status

 

 

(1,429

)

 

 

(8,855

)

 

 

(680

)

Other

 

 

4

 

 

 

18

 

 

 

(10

)

Nonperforming assets ending balance

 

$

57,561

 

 

$

57,051

 

 

$

45,812

 

 

 

 

Net Charge-Offs (Recoveries)

 

 

Three Months Ended

 

Six Months Ended

 

 

June 30 2024

 

March 31 2024

 

June 30 2023

 

June 30 2024

 

June 30 2023

Net charge-offs (recoveries)

 

 

 

 

 

 

 

 

 

 

Commercial and industrial loans

 

$

(2

)

 

$

(85

)

 

$

23,174

 

 

$

(87

)

 

$

23,450

 

Commercial real estate loans

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

Small business loans

 

 

48

 

 

 

70

 

 

 

51

 

 

 

118

 

 

 

48

 

Home equity

 

 

(137

)

 

 

(133

)

 

 

(10

)

 

 

(270

)

 

 

(26

)

Other consumer

 

 

430

 

 

 

422

 

 

 

269

 

 

 

852

 

 

 

550

 

Total net charge-offs

 

$

339

 

 

$

274

 

 

$

23,484

 

 

$

613

 

 

$

24,022

 

 

 

 

 

 

 

 

 

 

 

 

Net charge-offs to average loans (annualized)

 

 

0.01

%

 

 

0.01

%

 

 

0.67

%

 

 

0.01

%

 

 

0.35

%

 

BALANCE SHEET AND CAPITAL RATIOS

 

 

 

 

 

 

 

 

June 30 2024

 

March 31 2024

 

June 30 2023

Gross loans/total deposits

 

 

93.45

%

 

 

95.26

%

 

 

92.73

%

Common equity tier 1 capital ratio (1)

 

 

14.42

%

 

 

14.16

%

 

 

14.06

%

Tier 1 leverage capital ratio (1)

 

 

11.09

%

 

 

10.95

%

 

 

10.85

%

Common equity to assets ratio GAAP

 

 

15.04

%

 

 

14.92

%

 

 

14.72

%

Tangible common equity to tangible assets ratio (2)

 

 

10.42

%

 

 

10.27

%

 

 

10.05

%

Book value per share GAAP

 

$

68.74

 

 

$

67.94

 

 

$

64.69

 

Tangible book value per share (2)

 

$

45.19

 

 

$

44.34

 

 

$

41.88

 

(1)

Estimated number for June 30, 2024.

(2)

See Appendix A for detailed reconciliation from GAAP to Non-GAAP ratios.

INDEPENDENT BANK CORP. SUPPLEMENTAL FINANCIAL INFORMATION

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(Unaudited, dollars in thousands)

 

Three Months Ended

 

 

June 30, 2024

 

March 31, 2024

 

June 30, 2023

 

 

 

 

Interest

 

 

 

 

Interest

 

 

 

 

Interest

 

 

 

 

Average

 

Earned/

Yield/

 

Average

 

Earned/

Yield/

 

Average

 

Earned/

 

Yield/

 

 

Balance

 

Paid (1)

 

Rate

 

Balance

 

Paid (1)

 

Rate

 

Balance

 

Paid (1)

 

Rate

Interest-earning assets

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest-earning deposits with banks, federal funds sold, and short term investments

 

$

47,598

 

$

397

 

3.35

%

 

$

50,583

 

$

483

 

3.84

%

 

$

270,443

 

$

3,312

 

4.91

%

Securities

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Securities - trading

 

 

4,739

 

 

—

 

—

%

 

 

4,779

 

 

—

 

—

%

 

 

4,487

 

 

—

 

—

%

Securities - taxable investments

 

 

2,793,145

 

 

13,992

 

2.01

%

 

 

2,867,460

 

 

14,231

 

2.00

%

 

 

3,071,752

 

 

15,581

 

2.03

%

Securities - nontaxable investments (1)

 

 

189

 

 

2

 

4.26

%

 

 

190

 

 

2

 

4.23

%

 

 

191

 

 

2

 

4.20

%

Total securities

 

$

2,798,073

 

$

13,994

 

2.01

%

 

$

2,872,429

 

$

14,233

 

1.99

%

 

$

3,076,430

 

$

15,583

 

2.03

%

Loans held for sale

 

 

12,610

 

 

199

 

6.35

%

 

 

7,095

 

 

104

 

5.90

%

 

 

2,977

 

 

39

 

5.25

%

Loans

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Commercial and industrial (1)

 

 

1,583,858

 

 

28,305

 

7.19

%

 

 

1,559,978

 

 

27,629

 

7.12

%

 

 

1,686,348

 

 

29,451

 

7.00

%

Commercial real estate (1)

 

 

8,112,683

 

 

104,449

 

5.18

%

 

 

8,110,813

 

 

102,054

 

5.06

%

 

 

7,803,702

 

 

91,813

 

4.72

%

Commercial construction

 

 

834,876

 

 

15,451

 

7.44

%

 

 

842,480

 

 

15,421

 

7.36

%

 

 

1,044,650

 

 

17,212

 

6.61

%

Small business

 

 

265,273

 

 

4,376

 

6.63

%

 

 

257,022

 

 

4,160

 

6.51

%

 

 

230,371

 

 

3,501

 

6.10

%

Total commercial

 

 

10,796,690

 

 

152,581

 

5.68

%

 

 

10,770,293

 

 

149,264

 

5.57

%

 

 

10,765,071

 

 

141,977

 

5.29

%

Residential real estate

 

 

2,427,635

 

 

26,472

 

4.39

%

 

 

2,418,617

 

 

26,083

 

4.34

%

 

 

2,153,563

 

 

20,943

 

3.90

%

Home equity

 

 

1,109,979

 

 

18,826

 

6.82

%

 

 

1,094,856

 

 

18,444

 

6.78

%

 

 

1,094,329

 

 

17,394

 

6.38

%

Total consumer real estate

 

 

3,537,614

 

 

45,298

 

5.15

%

 

 

3,513,473

 

 

44,527

 

5.10

%

 

 

3,247,892

 

 

38,337

 

4.73

%

Other consumer

 

 

31,019

 

 

593

 

7.69

%

 

 

30,669

 

 

609

 

7.99

%

 

 

28,863

 

 

566

 

7.87

%

Total loans

 

$

14,365,323

 

$

198,472

 

5.56

%

 

$

14,314,435

 

$

194,400

 

5.46

%

 

$

14,041,826

 

$

180,880

 

5.17

%

Total interest-earning assets

 

$

17,223,604

 

$

213,062

 

4.98

%

 

$

17,244,542

 

$

209,220

 

4.88

%

 

$

17,391,676

 

$

199,814

 

4.61

%

Cash and due from banks

 

 

178,558

 

 

 

 

 

 

177,506

 

 

 

 

 

 

178,707

 

 

 

 

Federal Home Loan Bank stock

 

 

41,110

 

 

 

 

 

 

47,203

 

 

 

 

 

 

44,619

 

 

 

 

Other assets

 

 

1,876,081

 

 

 

 

 

 

1,809,640

 

 

 

 

 

 

1,826,879

 

 

 

 

Total assets

 

$

19,319,353

 

 

 

 

 

$

19,278,891

 

 

 

 

 

$

19,441,881

 

 

 

 

Interest-bearing liabilities

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Deposits

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Savings and interest checking accounts

 

$

5,166,340

 

$

16,329

 

1.27

%

 

$

5,165,866

 

$

14,856

 

1.16

%

 

$

5,512,995

 

$

9,425

 

0.69

%

Money market

 

 

2,909,503

 

 

17,409

 

2.41

%

 

 

2,844,014

 

 

15,991

 

2.26

%

 

 

3,044,486

 

 

12,331

 

1.62

%

Time deposits

 

 

2,579,336

 

 

27,731

 

4.32

%

 

 

2,297,219

 

 

23,473

 

4.11

%

 

 

1,630,015

 

 

10,153

 

2.50

%

Total interest-bearing deposits

 

$

10,655,179

 

$

61,469

 

2.32

%

 

$

10,307,099

 

$

54,320

 

2.12

%

 

$

10,187,496

 

$

31,909

 

1.26

%

Borrowings

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Federal Home Loan Bank borrowings

 

 

957,268

 

 

11,329

 

4.76

%

 

 

1,185,296

 

 

14,631

 

4.96

%

 

 

1,068,585

 

 

12,576

 

4.72

%

Junior subordinated debentures

 

 

62,859

 

 

1,140

 

7.29

%

 

 

62,858

 

 

1,147

 

7.34

%

 

 

62,856

 

 

1,044

 

6.66

%

Subordinated debentures

 

 

—

 

 

—

 

—

%

 

 

40,651

 

 

508

 

5.03

%

 

 

49,921

 

 

618

 

4.97

%

Total borrowings

 

$

1,020,127

 

$

12,469

 

4.92

%

 

$

1,288,805

 

$

16,286

 

5.08

%

 

$

1,181,362

 

$

14,238

 

4.83

%

Total interest-bearing liabilities

 

$

11,675,306

 

$

73,938

 

2.55

%

 

$

11,595,904

 

$

70,606

 

2.45

%

 

$

11,368,858

 

$

46,147

 

1.63

%

Noninterest-bearing demand deposits

 

 

4,360,897

 

 

 

 

 

 

4,439,107

 

 

 

 

 

 

4,873,767

 

 

 

 

Other liabilities

 

 

375,629

 

 

 

 

 

 

347,573

 

 

 

 

 

 

336,210

 

 

 

 

Total liabilities

 

$

16,411,832

 

 

 

 

 

$

16,382,584

 

 

 

 

 

$

16,578,835

 

 

 

 

Stockholders’ equity

 

 

2,907,521

 

 

 

 

 

 

2,896,307

 

 

 

 

 

 

2,863,046

 

 

 

 

Total liabilities and stockholders’ equity

 

$

19,319,353

 

 

 

 

 

$

19,278,891

 

 

 

 

 

$

19,441,881

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net interest income

 

 

 

$

139,124

 

 

 

 

 

$

138,614

 

 

 

 

 

$

153,667

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest rate spread (2)

 

 

 

 

 

2.43

%

 

 

 

 

 

2.43

%

 

 

 

 

 

2.98

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net interest margin (3)

 

 

 

 

 

3.25

%

 

 

 

 

 

3.23

%

 

 

 

 

 

3.54

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Supplemental Information

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total deposits, including demand deposits

 

$

15,016,076

 

$

61,469

 

 

 

$

14,746,206

 

$

54,320

 

 

 

$

15,061,263

 

$

31,909

 

 

Cost of total deposits

 

 

 

 

 

1.65

%

 

 

 

 

 

1.48

%

 

 

 

 

 

0.85

%

Total funding liabilities, including demand deposits

 

$

16,036,203

 

$

73,938

 

 

 

$

16,035,011

 

$

70,606

 

 

 

$

16,242,625

 

$

46,147

 

 

Cost of total funding liabilities

 

 

 

 

 

1.85

%

 

 

 

 

 

1.77

%

 

 

 

 

 

1.14

%

(1) The total amount of adjustment to present interest income and yield on a fully tax-equivalent basis was $1.2 million for both the three months ended June 30, 2024 and March 31, 2024, and $1.1 million for the three months ended and June 30, 2023, determined by applying the Company’s marginal tax rates in effect during each respective quarter.

(2) Interest rate spread represents the difference between weighted average yield on interest-earning assets and the weighted average cost of interest-bearing liabilities.

(3) Net interest margin represents annualized net interest income as a percentage of average interest-earning assets.

 

 

Six Months Ended

 

 

June 30, 2024

 

June 30, 2023

 

 

 

 

Interest

 

 

 

 

 

Interest

 

 

 

 

Average

 

Earned/

 

Yield/

 

Average

 

Earned/

 

Yield/

 

 

Balance

 

Paid

 

Rate

 

Balance

 

Paid

 

Rate

Interest-earning assets

 

 

 

 

 

 

 

 

 

 

 

 

Interest earning deposits with banks, federal funds sold, and short term investments

 

$

49,091

 

$

880

 

3.60

%

 

$

172,569

 

$

3,977

 

4.65

%

Securities

 

 

 

 

 

 

 

 

 

 

 

 

Securities - trading

 

 

4,759

 

 

—

 

—

%

 

 

4,292

 

 

—

 

—

%

Securities - taxable investments

 

 

2,830,302

 

 

28,223

 

2.01

%

 

 

3,094,263

 

 

30,890

 

2.01

%

Securities - nontaxable investments (1)

 

 

190

 

 

4

 

4.23

%

 

 

192

 

 

4

 

4.20

%

Total securities

 

$

2,835,251

 

$

28,227

 

2.00

%

 

$

3,098,747

 

$

30,894

 

2.01

%

Loans held for sale

 

 

9,853

 

 

303

 

6.18

%

 

 

2,727

 

 

73

 

5.40

%

Loans

 

 

 

 

 

 

 

 

 

 

 

 

Commercial and industrial (1)

 

 

1,571,918

 

 

55,911

 

7.15

%

 

 

1,652,527

 

 

56,023

 

6.84

%

Commercial real estate (1)

 

 

8,111,748

 

 

206,526

 

5.12

%

 

 

7,788,304

 

 

181,394

 

4.70

%

Commercial construction

 

 

838,678

 

 

30,872

 

7.40

%

 

 

1,089,311

 

 

33,679

 

6.23

%

Small business

 

 

261,147

 

 

8,536

 

6.57

%

 

 

226,479

 

 

6,720

 

5.98

%

Total commercial

 

 

10,783,491

 

 

301,845

 

5.63

%

 

 

10,756,621

 

 

277,816

 

5.21

%

Residential real estate

 

 

2,423,126

 

 

52,555

 

4.36

%

 

 

2,105,311

 

 

40,301

 

3.86

%

Home equity

 

 

1,102,418

 

 

37,270

 

6.80

%

 

 

1,091,707

 

 

33,638

 

6.21

%

Total consumer real estate

 

 

3,525,544

 

 

89,825

 

5.12

%

 

 

3,197,018

 

 

73,939

 

4.66

%

Other consumer

 

 

30,844

 

 

1,202

 

7.84

%

 

 

30,940

 

 

1,143

 

7.45

%

Total loans

 

$

14,339,879

 

$

392,872

 

5.51

%

 

$

13,984,579

 

$

352,898

 

5.09

%

Total interest-earning assets

 

$

17,234,074

 

$

422,282

 

4.93

%

 

$

17,258,622

 

$

387,842

 

4.53

%

Cash and due from banks

 

 

178,032

 

 

 

 

 

 

180,047

 

 

 

 

Federal Home Loan Bank stock

 

 

44,157

 

 

 

 

 

 

29,749

 

 

 

 

Other assets

 

 

1,842,859

 

 

 

 

 

 

1,835,669

 

 

 

 

Total assets

 

$

19,299,122

 

 

 

 

 

$

19,304,087

 

 

 

 

Interest-bearing liabilities

 

 

 

 

 

 

 

 

 

 

 

 

Deposits

 

 

 

 

 

 

 

 

 

 

 

 

Savings and interest checking accounts

 

$

5,166,103

 

$

31,185

 

1.21

%

 

$

5,628,535

 

$

16,898

 

0.61

%

Money market

 

 

2,876,759

 

 

33,400

 

2.33

%

 

 

3,143,355

 

 

22,724

 

1.46

%

Time deposits

 

 

2,438,277

 

 

51,204

 

4.22

%

 

 

1,462,929

 

 

14,962

 

2.06

%

Total interest-bearing deposits

 

$

10,481,139

 

$

115,789

 

2.22

%

 

$

10,234,819

 

$

54,584

 

1.08

%

Borrowings

 

 

 

 

 

 

 

 

 

 

 

 

Federal Home Loan Bank borrowings

 

 

1,071,282

 

 

25,960

 

4.87

%

 

 

685,626

 

 

16,220

 

4.77

%

Junior subordinated debentures

 

 

62,858

 

 

2,287

 

7.32

%

 

 

62,856

 

 

2,045

 

6.56

%

Subordinated debentures

 

 

20,326

 

 

508

 

5.03

%

 

 

49,909

 

 

1,235

 

4.99

%

Total borrowings

 

$

1,154,466

 

$

28,755

 

5.01

%

 

$

798,391

 

$

19,500

 

4.93

%

Total interest-bearing liabilities

 

$

11,635,605

 

$

144,544

 

2.50

%

 

$

11,033,210

 

$

74,084

 

1.35

%

Noninterest-bearing demand deposits

 

 

4,400,002

 

 

 

 

 

 

5,045,694

 

 

 

 

Other liabilities

 

 

361,601

 

 

 

 

 

 

355,097

 

 

 

 

Total liabilities

 

$

16,397,208

 

 

 

 

 

$

16,434,001

 

 

 

 

Stockholders’ equity

 

 

2,901,914

 

 

 

 

 

 

2,870,086

 

 

 

 

Total liabilities and stockholders’ equity

 

$

19,299,122

 

 

 

 

 

$

19,304,087

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net interest income

 

 

 

$

277,738

 

 

 

 

 

$

313,758

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest rate spread (2)

 

 

 

 

 

2.43

%

 

 

 

 

 

3.18

%

 

 

 

 

 

 

 

 

 

 

 

 

 

Net interest margin (3)

 

 

 

 

 

3.24

%

 

 

 

 

 

3.67

%

 

 

 

 

 

 

 

 

 

 

 

 

 

Supplemental Information

 

 

 

 

 

 

 

 

 

 

 

 

Total deposits, including demand deposits

 

$

14,881,141

 

$

115,789

 

 

 

$

15,280,513

 

$

54,584

 

 

Cost of total deposits

 

 

 

 

 

1.56

%

 

 

 

 

 

0.72

%

Total funding liabilities, including demand deposits

 

$

16,035,607

 

$

144,544

 

 

 

$

16,078,904

 

$

74,084

 

 

Cost of total funding liabilities

 

 

 

 

 

1.81

%

 

 

 

 

 

0.93

%

(1) The total amount of adjustment to present interest income and yield on a fully tax-equivalent basis is $2.4 million and $2.2 million for the six months ended June 30, 2024 and 2023, respectively.

(2) Interest rate spread represents the difference between weighted average yield on interest-earning assets and the weighted average cost of interest-bearing liabilities.

(3) Net interest margin represents annualized net interest income as a percentage of average interest-earning assets.

 

Certain amounts in prior year financial statements have been reclassified to conform to the current year’s presentation.

APPENDIX A: NON-GAAP Reconciliation of Balance Sheet Metrics

(Unaudited, dollars in thousands, except per share data)

The following table summarizes the calculation of the Company’s tangible common equity to tangible assets ratio and tangible book value per share, at the dates indicated:

 

 

June 30 2024

 

March 31 2024

 

June 30 2023

 

Tangible common equity

 

(Dollars in thousands, except per share data)

 

Stockholders’ equity (GAAP)

 

$

2,919,249

 

 

$

2,884,208

 

 

$

2,854,914

 

(a)

Less: Goodwill and other intangibles

 

 

1,000,233

 

 

 

1,001,698

 

 

 

1,006,609

 

 

Tangible common equity (Non-GAAP)

 

$

1,919,016

 

 

$

1,882,510

 

 

$

1,848,305

 

(b)

Tangible assets

 

 

 

 

 

 

 

Assets (GAAP)

 

$

19,411,037

 

 

$

19,324,613

 

 

$

19,400,931

 

(c)

Less: Goodwill and other intangibles

 

 

1,000,233

 

 

 

1,001,698

 

 

 

1,006,609

 

 

Tangible assets (Non-GAAP)

 

$

18,410,804

 

 

$

18,322,915

 

 

$

18,394,322

 

(d)

 

 

 

 

 

 

 

 

Common Shares

 

 

42,469,867

 

 

 

42,452,457

 

 

 

44,130,901

 

(e)

 

 

 

 

 

 

 

 

Common equity to assets ratio (GAAP)

 

 

15.04

%

 

 

14.92

%

 

 

14.72

%

(a/c)

Tangible common equity to tangible assets ratio (Non-GAAP)

 

 

10.42

%

 

 

10.27

%

 

 

10.05

%

(b/d)

Book value per share (GAAP)

 

$

68.74

 

 

$

67.94

 

 

$

64.69

 

(a/e)

Tangible book value per share (Non-GAAP)

 

$

45.19

 

 

$

44.34

 

 

$

41.88

 

(b/e)

APPENDIX B: Non-GAAP Reconciliation of Earnings Metrics

(Unaudited, dollars in thousands)

The following table summarizes the calculation of the Company’s return on average tangible common equity for the periods indicated:

 

Three Months Ended

 

Six Months Ended

 

June 30 2024

 

March 31 2024

 

June 30 2023

 

June 30 2024

 

June 30 2023

Net income (GAAP)

$

51,330

 

 

$

47,770

 

 

$

62,644

 

 

$

99,100

 

 

$

123,891

 

 

 

 

 

 

 

 

 

 

 

Average common equity (GAAP)

$

2,907,521

 

 

$

2,896,307

 

 

$

2,863,046

 

 

$

2,901,914

 

 

$

2,870,086

 

Less: Average goodwill and other intangibles

 

1,000,972

 

 

 

1,002,506

 

 

 

1,007,500

 

 

 

1,001,739

 

 

 

1,008,415

 

Tangible average tangible common equity (Non-GAAP)

$

1,906,549

 

 

$

1,893,801

 

 

$

1,855,546

 

 

$

1,900,175

 

 

$

1,861,671

 

 

 

 

 

 

 

 

 

 

 

Return on average tangible common equity (Non-GAAP) (calculated by dividing annualized net income by average tangible common equity)

 

10.83

%

 

 

10.15

%

 

 

13.54

%

 

 

10.49

%

 

 

13.42

%

APPENDIX C: Net Interest Margin Analysis & Non-GAAP Reconciliation of Core Margin

 

Three Months Ended

 

June 30, 2024

 

March 31, 2024

 

Volume

Interest

Margin Impact

 

Volume

Interest

Margin Impact

 

(Dollars in thousands)

Reported total interest earning assets

$

17,223,604

 

$

139,124

 

3.25

%

 

$

17,244,542

 

$

138,614

 

3.23

%

Acquisition fair value marks:

 

 

 

 

 

 

 

Loan accretion

 

 

(74

)

 

 

 

 

(109

)

 

CD amortization

 

 

—

 

 

 

 

 

9

 

 

 

 

 

(74

)

—

%

 

 

 

(100

)

—

%

 

 

 

 

 

 

 

 

Nonaccrual interest, net

 

 

(131

)

—

%

 

 

 

(341

)

(0.01

)%

 

 

 

 

 

 

 

 

Other noncore adjustments

 

(4,020

)

 

(499

)

(0.01

)%

 

 

(4,460

)

 

(582

)

(0.01

)%

 

 

 

 

 

 

 

 

Core margin (Non-GAAP)

$

17,219,584

 

$

138,420

 

3.24

%

 

$

17,240,082

 

$

137,591

 

3.21

%

 

View source version on businesswire.com: https://www.businesswire.com/news/home/20240717397649/en/

Jeffrey Tengel President and Chief Executive Officer (781) 982-6144

Mark J. Ruggiero Chief Financial Officer and Executive Vice President of Consumer Lending (781) 982-6281