7/18/20240000776901false00007769012024-07-182024-07-180000776901dei:MailingAddressMember2024-07-182024-07-18
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
Current Report Pursuant to Section 13 or 15 (d) of
The Securities and Exchange Act of 1934
DATE OF REPORT:
July 18, 2024
(Date of Earliest Event Reported)
Massachusetts
(State or Other Jurisdiction of Incorporation)
| | | | | | | | |
| 1-9047 | | 04-2870273 |
| (Commission File Number) | | (I.R.S. Employer identification No.) |
| | | | | | | | | | | | | | |
| INDEPENDENT BANK CORP. |
| Office Address: | 2036 Washington Street, | Hanover, | Massachusetts | 02339 |
| Mailing Address: | 288 Union Street, | Rockland, | Massachusetts | 02370 |
| (Address of principal executive offices, including zip code) |
NOT APPLICABLE
(Former Address of Principal Executive Offices)
(781)-878-6100
(Registrant’s Telephone Number, Including Area Code)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):
| | | | | |
| ☐ | Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
| ☐ | Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
| ☐ | Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
| ☐ | Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
| | | | | | | | |
| Securities registered pursuant to Section 12(b) of the Act: |
| Title of each Class | Trading Symbol | Name of each exchange on which registered |
| Common Stock, $.01 par value per share | INDB | NASDAQ Global Select Market |
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act (17CFR 230.405)) or Rule 12b-2 of the Exchange Act (17CFR 240.12b-2).
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange
Act. ☐
| | | | | |
| ITEM 2.02 | RESULTS OF OPERATIONS AND FINANCIAL CONDITION |
On July 18, 2024, Independent Bank Corp. (the "Company") announced by press release its earnings for the quarter ended June 30, 2024. A copy of the press release is attached hereto as Exhibit 99.1.
The information in this Item 2.02 (including Exhibit 99.1) is being furnished pursuant to Item 2.02 and shall not be deemed to be "filed" for the purposes of Section 18 of the Securities Exchange Act of 1934, as amended, or otherwise subject to the liabilities of that section.
| | | | | |
| ITEM 7.01 | REGULATION FD DISCLOSURE |
The Company is furnishing presentation materials to be discussed during its earnings conference call which are included as Exhibit 99.2 to this report pursuant to Item 7.01.
The information in this Item 7.01 (including Exhibit 99.2) shall not be deemed to be "filed" for the purposes of Section 18 of the Securities Exchange Act of 1934, as amended, or otherwise subject to the liabilities of that section.
| | | | | |
ITEM 9.01 | FINANCIAL STATEMENTS AND EXHIBITS |
d. The following exhibits are included with this Report:
| | | | | |
| Exhibit Index | |
| |
| Exhibit # | Exhibit Description |
| 99.1 | |
| 99.2 | |
| 101 | The instance document does not appear in the interactive data file because its XBRL tags are embedded within the inline XBRL document |
| 104 | Cover page interactive data file (formatted as inline XBRL and contained in Exhibit 101) |
SIGNATURE
Pursuant to the requirements of the Securities and Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned and hereunto duly authorized.
| | | | | | | | | | | |
| | | INDEPENDENT BANK CORP. |
| | | |
| Date: | July 18, 2024 | By: | /s/Mark J. Ruggiero |
| | | MARK J. RUGGIERO |
| | | CHIEF FINANCIAL OFFICER |
Exhibit 99.1
Shareholder Relations NEWS RELEASE
288 Union Street
Rockland, Ma. 02370
INDEPENDENT BANK CORP. REPORTS SECOND QUARTER NET INCOME OF $51.3 MILLION
Solid performance marked by higher revenues and strong deposit generation
Rockland, Massachusetts (July 18, 2024) - 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.
Contacts:
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
Category: Earnings Releases
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| 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) | % |
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| 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 | % |
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| 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) | % |
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| 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 | | | | | |
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| 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) | % |
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| 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 | % | | | | |
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| Return on average common equity (calculated by dividing net income by average common equity) (GAAP) | 7.10 | % | | 6.63 | % | | 8.78 | % | | | | |
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| Return on average tangible common equity (Non-GAAP) (calculated by dividing net income by average tangible common equity) | 10.83 | % | | 10.15 | % | | 13.54 | % | | | | |
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| 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 | % | | | | |
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| Efficiency ratio (calculated by dividing total noninterest expense by total revenue) | 58.51 | % | | 59.68 | % | | 52.13 | % | | | | |
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| 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 |
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| 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 | % |
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| 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 | % |
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| 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) | % |
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| Weighted average common shares (basic) | | 42,511,186 | | | 44,564,209 | | | |
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| Common share equivalents | | 8,592 | | | 13,568 | | | |
| Weighted average common shares (diluted) | | 42,519,778 | | | 44,577,777 | | | |
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| Basic earnings per share | | $ | 2.33 | | | $ | 2.78 | | | (16.19) | % |
| Diluted earnings per share | | $ | 2.33 | | | $ | 2.78 | | | (16.19) | % |
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| 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 | % | | |
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| Return on average common equity (GAAP) (calculated by dividing net income by average common equity) | | 6.87 | % | | 8.70 | % | | |
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| Return on average tangible common equity (Non-GAAP) (calculated by dividing net income by average tangible common equity) | | 10.49 | % | | 13.42 | % | | |
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| 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 | % | | |
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| Efficiency ratio (GAAP) (calculated by dividing total noninterest expense by total revenue) | | 59.09 | % | | 52.41 | % | | |
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nm = not meaningful
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| 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 | |
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| Other real estate owned | | 110 | | | 110 | | | 110 | |
| Total nonperforming assets | | $ | 57,561 | | | $ | 57,051 | | | $ | 45,812 | |
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| 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 | % |
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| | Nonperforming Assets Reconciliation for the Three Months Ended |
| | June 30
2024 | | March 31
2024 | | June 30
2023 |
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| Nonperforming assets beginning balance | | $ | 57,051 | | | $ | 54,493 | | | $ | 56,235 | |
| New to nonperforming | | 6,201 | | | 19,258 | | | 18,018 | |
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| Loans charged-off | | (808) | | | (881) | | | (23,767) | |
| Loans paid-off | | (3,458) | | | (6,982) | | | (3,984) | |
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| Loans restored to performing status | | (1,429) | | | (8,855) | | | (680) | |
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| Other | | 4 | | | 18 | | | (10) | |
| Nonperforming assets ending balance | | $ | 57,561 | | | $ | 57,051 | | | $ | 45,812 | |
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| | 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 | |
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| 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 | |
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| Net charge-offs to average loans (annualized) | | 0.01 | % | | 0.01 | % | | 0.67 | % | | 0.01 | % | | 0.35 | % |
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| 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.
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| INDEPENDENT BANK CORP. SUPPLEMENTAL FINANCIAL INFORMATION |
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| (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 | % |
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| 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) |
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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 | |
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| | | | | | | | | | |
| | | | | | | | | | |
| 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 | | |
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| 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 | % | |
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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 | % |
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| | | | | | | |
| | | | | | | |
| 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 | % |
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Exhibit 99.2 Independent Bank Corp. (INDB) (parent of Rockland Trust Company) Q2 2024 Earnings Presentation July 19, 2024
2 Company Overview Safe & Sound Customer Centric • Strong balance sheet • Prudent interest rate and liquidity risk management • Significant capital buffer • Diversified, low-cost deposit base • Experienced commercial lender with conservative credit culture • Proven operator and acquiror • Full suite of retail banking, commercial banking, and wealth product offerings • Relationship-oriented commercial lending with strong local market knowledge • Exceptional third party customer service recognition both commercial and retail • Strong brand awareness and reputation Attractive Market • Top performing MA-based bank with scale and density • Supported by strong economic growth and vitality in key markets served • Depth of market offers opportunities for continued growth Strong, Resilient Franchise; Well Positioned for Growth High Performing • Consistent, strong profitability • Focused on maintaining good margins • Fee income contribution from scalable wealth franchise • Efficient cost structure focused on operating leverage • History of organic capital generation
$ 51.3M Net Income $ 1.21 Diluted EPS 1.07% ROAA 7.10% ROAE 10.83% ROATCE 3 Q2 2024 Financial Highlights • Disciplined growth: ◦ Loans - 2.0% annualized ◦ Deposits - 9.8% annualized • Net interest margin expansion to 3.25% • Stable nonperforming asset levels, minimal charge-offs • Strong fee income ◦ Wealth AUA record $6.9B • Focused expense management • Tangible book value per share growth of $0.85 to $45.19 Key Metrics Highlights
4 ($ in millions) Period Ended Deposit Product Type June 30, 2024 March 31, 2024 $ Increase/ (Decrease) % Increase/ (Decrease) Noninterest-bearing demand deposits $ 4,419 $ 4,470 $ (51) (1.1)% Savings and interest checking 5,241 5,196 45 0.9% Money market 3,058 2,944 114 3.9% Time certificates of deposit 2,691 2,433 258 10.6% $ 15,409 $ 15,043 $ 366 2.4% Average Deposit Balances $ 15,016 $ 14,746 $ 270 1.8% Deposit Balances $ in b ill io ns Average Balances and Cost of Deposits $15.1 $15.0 $14.7 $15.0 1.07% 1.31% 1.48% 1.65% Deposits Cost of deposits Q3 2023 Q4 2023 Q1 2024 Q2 2024 $0.0 $5.0 $10.0 $15.0 0.00% 0.50% 1.00% 1.50% Deposit Composition Consumer 54.2% Business 36.1% Municipal 9.7%
5 Loan Balances ($ in millions) Period Ended Loan Category June 30, 2024 March 31, 2024 $ Increase/ (Decrease) % Increase/ (Decrease) Commercial and industrial $ 1,603 $ 1,580 $ 23 1.5% Commercial real estate* 8,152 8,109 43 0.5% Commercial construction 787 829 (42) (5.1)% Small business 269 262 7 2.7% Total commercial 10,811 10,780 31 0.3% Residential real estate 2,440 2,421 19 0.8% Home equity - first position 504 507 (3) (0.6)% Home equity - subordinate positions 612 593 19 3.2% Total consumer real estate 3,556 3,521 35 1.0% Other consumer 34 30 4 13.3% Total loans $14,401 $ 14,331 $ 70 0.5% *Includes $1.4 billion of owner occupied balances
6 Nonperforming Loans ($ in millions) $39.2 $54.4 $56.9 $57.5 0.28% 0.38% 0.40% 0.40% NPLs ($Mil) NPL/Loan% Q3 2023 Q4 2023 Q1 2024 Q2 2024 0.30% 0.40% 0.50% $0 $40 $80 Asset Quality Allowance for Credit Loss & Delinquency Trends 0.99% 1.00% 1.03% 1.05% 0.22% 0.44% 0.52% 0.37% Allowance for Credit Losses/Total Loans Delinquent Loans/Total Loans Q3 2023 Q4 2023 Q1 2024 Q2 2024 0.00% 0.50% 1.00% Nonperforming Loans ($ in millions) Loan Category Industry Balance Charge- off Specific Reserve Top 5 NPLs: Commercial and industrial Equip Rental $ 17.5 $ — $ 5.9 Commercial real estate Office - Class A 11.7 — 4.8 Commercial real estate Office - Class A 7.6* 2.8 0.2 Commercial real estate Retail 2.3 — — Commercial real estate 1-4 Family Inv. 1.6 — — Charge-off and Provisioning Trends ($ in millions) $5.6 $3.8 $0.3 $0.3 $5.5 $5.5 $5.0 $4.3 0.16% 0.11% 0.01% 0.01% Net Charge-offs Provision for Credit Losses Annualized Charge-off Rate Q3 2023 Q4 2023 Q1 2024 Q2 2024 $0.0 $2.5 $5.0 $7.5 0.00% 0.06% 0.12% 0.18% *Represents balance net of charge-off
7 Loan Portfolios 95% CRE & Construction Portfolio $8.9 billion Multi-family - 21.9% Residential related - 13.2% Office - 13.8% Mixed-Use Office - 2.0% Industrial/ warehouse - 13.1% Lodging - 8.3% Retail - 18.2% Healthcare - 2.8% Other - 6.7% C&I Portfolio $1.6 billion Retail Trade - 21.6% Real Estate/Rental and Leasing - 15.0% Wholesale Trade - 8.1% Construction - 9.3% Administrative Support/Waste Mgmt/Remediation Services - 8.7% Manufacturing - 7.1% Professional, Scientific, and Technical Services - 4.4% Educational Services - 4.3% All Other (10 Sectors) - 21.5% Consumer Portfolio $3.6 billion Residential real estate - 68.0% Home equity - first position - 14.0% Home equity - subordinate positions - 17.1% Other consumer - 0.9% $8.9 $8.9 $8.9 $8.9 321% 319% 319% 306% CRE NOO CRE/Capital * Q3 2023 Q4 2023 Q1 2024 Q2 2024** $0.0 $4.0 $8.0 $12.0 300% 320% 340% * Rockland Trust Bank only; Non-owner occupied commercial real estate divided by total capital. Ratio for Q2 2024 is an estimated number. **Includes re-classification of $170 million out of NOO CRE. ($Bil) (1) (1) Includes $1.4 billion of owner occupied balances
8 Focal Point: Non-Owner Occupied CRE Office (inclusive of construction) Top 20 Borrowers All Others Total Portfolio ($ in millions) Total Avg Loan ($ in millions) Total Avg Loan ($ in millions) Total Avg Loan Class A $327.2 $29.8 Class A $162.1 $6.0 Class A $489.3 $12.9 Class B/C 194.6 21.6 Class B/C 269.6 1.8 Class B/C 464.2 3.0 Medical — — Medical 89.7 3.7 Medical 89.7 3.7 $521.8 $26.1 $521.4 $2.7 $1,043.2 $4.9 Criticized $30.0 Criticized $41.3 Criticized $71.3 Classified (perf) 74.5 Classified (perf) — Classified (perf) 74.5 Nonperforming — Nonperforming 19.3 Nonperforming 19.3 • Top 20 loans are actively managed • Majority is RTC originated, conservative underwriting • Primarily Massachusetts based • Approx. $292M came from acquisitions Total Maturity Schedule Past Due 2024 2025 2026 2027 2028+ 2% 7% 21% 9% 16% 45% Short Term Maturity Review ($ in millions) 2024 Q3 2024 Q4 2025 Q1 Pass Rating $10.3 $20.0 $19.8 Criticized 14.4 30.0 — Classified — — 54.7 Total $24.7 $50.0 $74.5 CRE & Construction Portfolio $8.9 billion NOO Office ($1.04B) - 11.7% Other CRE & Construction - 88.3%
9 Focal Point: Multifamily CRE 95% Multifamily Portfolio Period Ended ($ in millions) June 30, 2024 March 31, 2024 Total Balances $ 1,961.9 $ 1,880.4 Total Average Loan Size 2.6 2.5 Average Loan Size - Top 20 23.5 21.7 Average Loan Size - All Others 2.1 1.9 Asset Quality Criticized $ 24.7 1.3% $ 18.9 1.0% Classified (perf) 1.0 0.1% 1.7 0.1% Non-performing — —% 0.1 —% Total Balances $ 1,961.9 $ 1,880.4 Composition Low Income Housing Tax Credit - 8.2% Residential Apart. - Affordable Housing >20% - 13.9% Residential Apart. - Market Rate - 46.7% Mixed Use, Primarily Residential - 31.2% Key Portfolio Characteristics • Strong Boston market asset class • 85% of portfolio Massachusetts based; 99% New England based • No delinquencies • Minimal exposure to luxury properties in Greater Boston Maturity Schedule 2024 2025 2026 2027 2028+ Total ($) 2% 5% 9% 3% 81% $1.962B
10 Net Interest Margin Analysis Net Interest Margin 3.47% 3.38% 3.23% 3.25% Q3 2023 Q4 2023 Q1 2024 Q2 2024 3.20% 3.40% 3.60% Total Loan Portfolio Rate Characteristics 43% 27% 30% Fixed Rate Floating Rate Variable Rate ($ in m ill io ns ) Time Deposit Maturities (and weighted average rate) $1,286 $911 $494 Q3 2024 Q4 2024 2025+ $0 $500 $1,000 $1,500 ($ in m ill io ns ) Loan Hedging Maturities (and weighted average "receive fixed" SOFR rate) $100 $200 $400 $300 Q4 2024 2025 2026 2027+ $— $100 $200 $300 $400 $500 4.58% 4.35% 3.21% 1.67% 2.91% 3.39% 2.46%
11 Noninterest Income/Expense Noninterest Income Noninterest Expense ($ in thousands) Q2 2024 Q1 2024 Q2 2024 Q1 2024 Deposit account fees $ 6,332 $ 6,228 Salaries and employee benefits $ 57,162 $ 57,174 Interchange and ATM fees 4,753 4,452 Occupancy and equipment expenses 12,472 13,467 Investment management and advisory 10,987 9,941 Data processing and facilities management 2,405 2,483 Mortgage banking income 1,320 796 FDIC assessment 2,694 2,982 Increase in cash surrender value of life insurance policies 2,000 1,928 Other noninterest expenses 24,881 23,781 Gain on life insurance benefits — 263 Total noninterest expenses $ 99,614 $ 99,887 Loan level derivative income 473 80 Other noninterest income 6,465 6,255 Total noninterest income $ 32,330 $ 29,943
12 Focal Point: Investment Management and Advisory $ in m ill io ns Assets Under Administration $6,120 $6,538 $6,804 $6,871 Q3 2023 Q4 2023 Q1 2024 Q2 2024 $6,000 $6,500 $7,000 ($ in thousands) Q2 2024 Q1 2024 % Change Assets under administration $6,870,636 $6,804,032 1.0% Asset based revenue 9,016 8,894 1.4% Other revenue: Retail commission revenue 985 806 Insurance commission revenue 368 55 Other advisory revenue 618 186 Total reported revenue $10,987 $9,941 10.5%
13 Securities Portfolio Available for Sale (AFS) Held to Maturity (HTM) Portfolio Composition at June 30, 2024 Book Value Fair Value Unrealized Gain/(Loss) Book Value Fair Value Unrealized Gain/(Loss) ($ in millions) U.S. government agency securities $ 230 $ 207 $ (23) $ 29 $ 28 $ (1) U.S. treasury securities 725 674 (51) 101 91 (10) Agency mortgage-backed securities 305 266 (39) 810 739 (71) Agency collateralized mortgage obligations 33 30 (3) 452 380 (72) Other 52 44 (8) 128 120 (8) Total securities $ 1,345 $ 1,221 $ (124) $ 1,520 $ 1,358 $ (162) Duration of portfolio 3.1 Years 4.5 Years Capital Impact $ % of Tangible Assets ($ in millions) Tangible capital (Non-GAAP) $ 1,919 10.42% Less: HTM unrealized loss, net of tax (118) Tangible capital adjusted for HTM $ 1,801 9.87% ($ in m ill io ns ) Projected Cash Flows $200 $349 $593 2024 2025 2026 $0 $500 Securities as a % of Total Assets 15.6% 15.4% 15.1% 14.7% 14.2% 13.1% Q2 2023 Q3 2023 Q4 2023 Q1 2024 Q2 2024 Q4 2024 Proforma 12.0% 14.0% 16.0%
14 2024 Forward Guidance Loans • 2024 full year: low single digit percentage increase expected • 2024 Q3: low single digit percentage increase expected Deposits • 2024 full year: low single digit percentage increase expected • 2024 Q3: flat (EOP) to low single digit percentage increase (Avg.) expected Borrowings • Balances expected to fluctuate based on loan, deposit and securities cash flows Net Interest Margin • 2024 Q3: margin percentage expected in the 3.25 - 3.30 range* Asset Quality • Current stable asset quality metrics, provision driven by emerging credit trends Non-interest Income • 2024 full year: low single digit percentage increase expected • 2024 Q3: relatively flat revenue compared to 2024 Q2 levels expected Non-interest Expense • 2024 full year - low single digit percentage increase expected • 2024 Q3: low single digit percentage increase from 2024 Q2 levels expected *Based on current forward Treasury curve
This presentation 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,” “outlook”, “projected”, “future,” “positioned,” “continued,” “will,” “would,” “potential,” “anticipated,” “guidance,” “targeted” 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 presentation which modify or impact any of the forward-looking statements contained in this presentation will be deemed to modify or supersede such statements in this presentation. In addition to the information set forth in this presentation, you should carefully consider the Risk Factors. 15 Forward Looking Statements
This presentation contains 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 NIM” or “core margin”), tangible book value per share, tangible common equity ratio and return on average tangible common equity. 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 low-yielding loans originated through government programs in response to the pandemic, or 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. Similarly, management reviews certain loan metrics such as growth rates and allowance as a percentage of total loans, adjusted to exclude loans that are not considered part of its core portfolio, which includes loans originated in association with government sponsored and guaranteed programs in response to the pandemic, to arrive at adjusted numbers more representative of the core growth of the portfolio and core reserve to loan ratio. 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 deems to be noncore and 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. 16 Non-GAAP Financial Measures
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