Independent Bank Corp. Reports Second Quarter Net Income of $51.3 Million

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	%

 

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