Independent Bank Corp. Reports Fourth Quarter Net Income of $54.8 Million
- None.
- Net income for the 2023 fourth quarter and full year decreased compared to the prior year
- Net interest income and noninterest income decreased in the fourth quarter of 2023
- Noninterest expense increased in the fourth quarter of 2023 compared to the prior quarter
Insights
The reported decrease in Independent Bank Corp.'s quarterly net income by 9.9% and the full-year net income by 9.2% signifies a contraction in profitability. This may be attributed to various factors, including a competitive banking environment, increased deposit costs, or potentially a decrease in revenue-generating activities. Investors should consider the bank's return on average assets (ROAA) and return on average common equity (ROACE), which have also declined from the previous year. These are critical metrics that assess the bank's efficiency in utilizing its assets to generate profits and the equity's effectiveness in yielding returns, respectively.
The bank's strategy of stock buyback, having repurchased $69.0 million worth of shares, indicates a management decision to return value to shareholders. This action may be perceived positively by the market as it could suggest confidence by management in the bank's intrinsic value, potentially leading to an earnings per share (EPS) boost in the future. However, it also reflects a choice to use capital for buybacks over other investments or reserve build-up, which could be viewed as less prudent in an uncertain economic environment.
Independent Bank Corp.'s asset growth remains modest with a slight increase in total assets and loans, which is indicative of a conservative growth strategy or potentially a response to the current economic climate. The growth in the consumer real estate portfolio, driven by adjustable-rate residential mortgages, suggests a strategic focus on this sector, which could be advantageous if interest rates stabilize or decline. However, the decline in commercial loans reflects a more cautious approach to new originations, likely influenced by market conditions and borrower quality.
The decrease in deposit balances and the rise in Federal Home Loan Bank borrowings to fund stock buybacks and loan growth may indicate a shift in the bank's funding strategy. This shift could have implications for the bank's interest rate risk profile and liquidity position. Moreover, the increase in deposit costs reflects the broader interest rate environment and competition for deposits, which could squeeze the net interest margin further if the trend continues.
From a risk perspective, the slight increase in the allowance for credit losses and the uptick in nonperforming loans signal potential concerns in asset quality. The increase in delinquencies, although still relatively low, could be an early warning sign of credit deterioration amidst economic headwinds. The bank's provision for credit losses remaining consistent with the prior quarter suggests that management is not currently expecting a significant deterioration in credit quality. Nevertheless, stakeholders should monitor these metrics closely, as they are crucial indicators of the bank's credit risk exposure.
The FDIC's special assessment, reflecting broader industry trends to shore up the Deposit Insurance Fund, represents an additional expense that all banks are contending with. This one-time cost, while not significantly impacting the bottom line, is part of the broader regulatory and economic landscape that banks must navigate.
Completes solid performance in 2023
The Company generated a return on average assets and a return on average common equity of
“The dedication of my colleagues and their unrelenting focus on each relationship, day in and day out, paved the way for the solid financial results we achieved throughout this past year,” said Jeffrey Tengel, the Chief Executive Officer of Independent Bank Corp. and Rockland Trust Company. “I am confident that our core fundamentals position us well for continued success heading into 2024 and beyond.”
BALANCE SHEET
Total assets of
Total loans at December 31, 2023 of
Deposit balances of
In conjunction with the decline in deposit balances, the Company's Federal Home Loan Bank borrowings increased by
The securities portfolio decreased by
During the fourth quarter of 2023, the Company executed on its previously announced
NET INTEREST INCOME
Net interest income for the fourth quarter of 2023 decreased
NONINTEREST INCOME
Noninterest income of
-
Investment management income decreased by
$428,000 4.2% , primarily driven by lower insurance commissions. However, total assets under administration increased by$417.4 million 6.8% , to a record level of$6.5 billion
-
The Company received proceeds on life insurance policies resulting in gains of
$180,000 $1.9 million
-
Other noninterest income increased by
$738,000 10.4% , primarily due to unrealized gains on equity securities and discounted purchases of tax credits, as well as outsized loan fees recognized during the third quarter of 2023.
NONINTEREST EXPENSE
Noninterest expense of
-
Salaries and employee benefits increased by
$1.6 million 2.9% , due primarily to timing of incentive compensation.
-
Occupancy and equipment expenses increased by
$733,000 5.9% , due primarily to one-time termination costs associated with two leased locations related to the 2021 Meridian acquisition.
-
FDIC assessment increased
$1.2 million 44.6% , from the prior quarter, and includes a one-time$1.1 million
-
Other noninterest expense decreased by
$593,000 2.3% , due primarily to decreases in consultant fees, unrealized losses on equity securities, and card issuance costs, partially offset by increases in check fraud losses, software maintenance and legal costs.
The Company’s tax rate for the fourth quarter of 2023 decreased to
ASSET QUALITY
The fourth quarter provision for credit losses was consistent with the prior quarter at
The allowance for credit losses on total loans increased slightly to
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 fourth quarter earnings at 10:00 a.m. Eastern Time on Friday, January 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: 9516407 and will be available through January 26, 2024. Additionally, a webcast replay will be available on the Company's website until January 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
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:
-
further weakening in
the United States economy in general and the regional and local economies within the New England region and the Company’s market area;
- the effects to the Company or its customers of inflationary pressures, labor market shortages and supply chain issues;
-
the instability or volatility in financial markets and unfavorable general economic or business conditions, globally, nationally or regionally, whether caused by geopolitical concerns, including the
Russia /Ukraine conflict, the conflict inIsrael and surrounding areas and the possible expansion of such conflicts, recent disruptions in the banking industry, or other factors, and the potential impact of unfavorable economic conditions 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 our business caused by severe weather, pandemics or other external events;
- adverse changes or volatility in the local real estate market;
- rising interest rates and any resultant adverse changes in asset quality, increased credit risks, decreased loan demand, and/or refinancing challenges, which in turn could further lead to unanticipated credit deterioration in the Company's loan portfolio, including with respect to one or more large commercial relationships;
- 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;
- additional regulatory oversight and related compliance costs;
- 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;
- changes in market interest rates for interest earning assets and/or interest bearing liabilities;
- 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;
- adverse weather, changes in climate, natural disasters, including the risk of floods and fire; the emergence of widespread health emergencies or pandemics, any further resurgences or variants of the "COVID-19 virus", actions taken by governmental authorities in response thereto, other public health crises or man-made events, and their impact on the Company's local economies or the Company's operations;
- 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;
- 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, including any such changes in laws and regulations as a result of recent disruptions in the banking industry, 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; and
- other 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
Operating net income, operating EPS, operating return on average assets and operating return on average common equity, exclude items that management believes are unrelated to the Company's core banking business such as merger and acquisition expenses, and other items, if applicable. Management uses operating net income and related ratios and operating EPS to measure the strength of the Company’s core banking business and to identify trends that may to some extent be obscured by such items. 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 |
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CONSOLIDATED BALANCE SHEETS |
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|||||||||||||
(Unaudited, dollars in thousands) |
|
|
|
|
|
|
% Change |
|
% Change |
||||||||
|
December 31
|
|
September 30
|
|
December 31
|
|
Dec 2023 vs. |
|
Dec 2023 vs. |
||||||||
|
|
|
|
Sept 2023 |
|
Dec 2022 |
|||||||||||
Assets |
|
|
|
|
|
|
|
|
|
||||||||
Cash and due from banks |
$ |
178,861 |
|
|
$ |
176,930 |
|
|
$ |
175,843 |
|
|
1.09 |
% |
|
1.72 |
% |
Interest-earning deposits with banks |
|
45,469 |
|
|
|
43,198 |
|
|
|
177,090 |
|
|
5.26 |
% |
|
(74.32 |
) % |
Securities |
|
|
|
|
|
|
|
|
|
||||||||
Trading |
|
4,987 |
|
|
|
4,476 |
|
|
|
3,888 |
|
|
11.42 |
% |
|
28.27 |
% |
Equities |
|
22,510 |
|
|
|
21,475 |
|
|
|
21,119 |
|
|
4.82 |
% |
|
6.59 |
% |
Available for sale |
|
1,334,256 |
|
|
|
1,353,744 |
|
|
|
1,399,154 |
|
|
(1.44 |
) % |
|
(4.64 |
) % |
Held to maturity |
|
1,569,107 |
|
|
|
1,594,279 |
|
|
|
1,705,120 |
|
|
(1.58 |
) % |
|
(7.98 |
) % |
Total securities |
|
2,930,860 |
|
|
|
2,973,974 |
|
|
|
3,129,281 |
|
|
(1.45 |
) % |
|
(6.34 |
) % |
Loans held for sale |
|
6,368 |
|
|
|
3,998 |
|
|
|
2,803 |
|
|
59.28 |
% |
|
127.19 |
% |
Loans |
|
|
|
|
|
|
|
|
|
||||||||
Commercial and industrial |
|
1,579,986 |
|
|
|
1,653,003 |
|
|
|
1,635,103 |
|
|
(4.42 |
) % |
|
(3.37 |
) % |
Commercial real estate |
|
8,041,508 |
|
|
|
7,896,230 |
|
|
|
7,760,230 |
|
|
1.84 |
% |
|
3.62 |
% |
Commercial construction |
|
849,586 |
|
|
|
965,442 |
|
|
|
1,154,413 |
|
|
(12.00 |
) % |
|
(26.41 |
) % |
Small business |
|
251,956 |
|
|
|
245,335 |
|
|
|
219,102 |
|
|
2.70 |
% |
|
14.99 |
% |
Total commercial |
|
10,723,036 |
|
|
|
10,760,010 |
|
|
|
10,768,848 |
|
|
(0.34 |
) % |
|
(0.43 |
) % |
Residential real estate |
|
2,424,754 |
|
|
|
2,338,102 |
|
|
|
2,035,524 |
|
|
3.71 |
% |
|
19.12 |
% |
Home equity - first position |
|
518,706 |
|
|
|
529,938 |
|
|
|
566,166 |
|
|
(2.12 |
) % |
|
(8.38 |
) % |
Home equity - subordinate positions |
|
578,920 |
|
|
|
565,617 |
|
|
|
522,584 |
|
|
2.35 |
% |
|
10.78 |
% |
Total consumer real estate |
|
3,522,380 |
|
|
|
3,433,657 |
|
|
|
3,124,274 |
|
|
2.58 |
% |
|
12.74 |
% |
Other consumer |
|
32,654 |
|
|
|
30,568 |
|
|
|
35,553 |
|
|
6.82 |
% |
|
(8.15 |
) % |
Total loans |
|
14,278,070 |
|
|
|
14,224,235 |
|
|
|
13,928,675 |
|
|
0.38 |
% |
|
2.51 |
% |
Less: allowance for credit losses |
|
(142,222 |
) |
|
|
(140,569 |
) |
|
|
(152,419 |
) |
|
1.18 |
% |
|
(6.69 |
) % |
Net loans |
|
14,135,848 |
|
|
|
14,083,666 |
|
|
|
13,776,256 |
|
|
0.37 |
% |
|
2.61 |
% |
Federal Home Loan Bank stock |
|
43,557 |
|
|
|
43,878 |
|
|
|
5,218 |
|
|
(0.73 |
) % |
|
734.75 |
% |
Bank premises and equipment, net |
|
193,049 |
|
|
|
191,560 |
|
|
|
196,504 |
|
|
0.78 |
% |
|
(1.76 |
) % |
Goodwill |
|
985,072 |
|
|
|
985,072 |
|
|
|
985,072 |
|
|
— |
% |
|
— |
% |
Other intangible assets |
|
18,190 |
|
|
|
19,825 |
|
|
|
25,068 |
|
|
(8.25 |
) % |
|
(27.44 |
) % |
Cash surrender value of life insurance policies |
|
297,387 |
|
|
|
295,670 |
|
|
|
293,323 |
|
|
0.58 |
% |
|
1.39 |
% |
Other assets |
|
512,712 |
|
|
|
550,338 |
|
|
|
527,716 |
|
|
(6.84 |
) % |
|
(2.84 |
) % |
Total assets |
$ |
19,347,373 |
|
|
$ |
19,368,109 |
|
|
$ |
19,294,174 |
|
|
(0.11 |
) % |
|
0.28 |
% |
Liabilities and Stockholders' Equity |
|
|
|
|
|
|
|
|
|
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Deposits |
|
|
|
|
|
|
|
|
|
||||||||
Noninterest-bearing demand deposits |
$ |
4,567,083 |
|
|
$ |
4,796,148 |
|
|
$ |
5,441,584 |
|
|
(4.78 |
) % |
|
(16.07 |
) % |
Savings and interest checking accounts |
|
5,298,913 |
|
|
|
5,398,322 |
|
|
|
5,898,009 |
|
|
(1.84 |
) % |
|
(10.16 |
) % |
Money market |
|
2,818,072 |
|
|
|
2,852,293 |
|
|
|
3,343,673 |
|
|
(1.20 |
) % |
|
(15.72 |
) % |
Time certificates of deposit |
|
2,181,479 |
|
|
|
2,012,763 |
|
|
|
1,195,741 |
|
|
8.38 |
% |
|
82.44 |
% |
Total deposits |
|
14,865,547 |
|
|
|
15,059,526 |
|
|
|
15,879,007 |
|
|
(1.29 |
) % |
|
(6.38 |
) % |
Borrowings |
|
|
|
|
|
|
|
|
|
||||||||
Federal Home Loan Bank borrowings |
|
1,105,541 |
|
|
|
887,548 |
|
|
|
637 |
|
|
24.56 |
% |
|
nm |
|
Junior subordinated debentures, net |
|
62,858 |
|
|
|
62,857 |
|
|
|
62,855 |
|
|
— |
% |
|
— |
% |
Subordinated debentures, net |
|
49,980 |
|
|
|
49,957 |
|
|
|
49,885 |
|
|
0.05 |
% |
|
0.19 |
% |
Total borrowings |
|
1,218,379 |
|
|
|
1,000,362 |
|
|
|
113,377 |
|
|
21.79 |
% |
|
974.63 |
% |
Total deposits and borrowings |
|
16,083,926 |
|
|
|
16,059,888 |
|
|
|
15,992,384 |
|
|
0.15 |
% |
|
0.57 |
% |
Other liabilities |
|
368,196 |
|
|
|
422,813 |
|
|
|
415,089 |
|
|
(12.92 |
) % |
|
(11.30 |
) % |
Total liabilities |
|
16,452,122 |
|
|
|
16,482,701 |
|
|
|
16,407,473 |
|
|
(0.19 |
) % |
|
0.27 |
% |
Stockholders' equity |
|
|
|
|
|
|
|
|
|
||||||||
Common stock |
|
427 |
|
|
|
440 |
|
|
|
455 |
|
|
(2.95 |
) % |
|
(6.15 |
) % |
Additional paid in capital |
|
1,932,163 |
|
|
|
1,999,448 |
|
|
|
2,114,888 |
|
|
(3.37 |
) % |
|
(8.64 |
) % |
Retained earnings |
|
1,077,488 |
|
|
|
1,046,266 |
|
|
|
934,442 |
|
|
2.98 |
% |
|
15.31 |
% |
Accumulated other comprehensive loss, net of tax |
|
(114,827 |
) |
|
|
(160,746 |
) |
|
|
(163,084 |
) |
|
(28.57 |
) % |
|
(29.59 |
) % |
Total stockholders' equity |
|
2,895,251 |
|
|
|
2,885,408 |
|
|
|
2,886,701 |
|
|
0.34 |
% |
|
0.30 |
% |
Total liabilities and stockholders' equity |
$ |
19,347,373 |
|
|
$ |
19,368,109 |
|
|
$ |
19,294,174 |
|
|
(0.11 |
) % |
|
0.28 |
% |
CONSOLIDATED STATEMENTS OF INCOME |
|
|
|
|
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||||||||||||
(Unaudited, dollars in thousands, except per share data) |
|
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|
||||||||||||
|
Three Months Ended |
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|
|
|
||||||||||||
|
|
|
|
|
|
|
% Change |
|
% Change |
||||||||
|
December 31
|
|
September 30
|
|
December 31
|
|
Dec 2023 vs. |
|
Dec 2023 vs. |
||||||||
|
|
|
|
Sept 2023 |
|
Dec 2022 |
|||||||||||
Interest income |
|
|
|
|
|
|
|
|
|
||||||||
Interest on federal funds sold and short-term investments |
$ |
304 |
|
|
$ |
905 |
|
|
$ |
4,163 |
|
|
(66.41 |
) % |
|
(92.70 |
) % |
Interest and dividends on securities |
|
14,631 |
|
|
|
14,818 |
|
|
|
15,789 |
|
|
(1.26 |
) % |
|
(7.33 |
) % |
Interest and fees on loans |
|
192,178 |
|
|
|
187,145 |
|
|
|
164,153 |
|
|
2.69 |
% |
|
17.07 |
% |
Interest on loans held for sale |
|
57 |
|
|
|
60 |
|
|
|
22 |
|
|
(5.00 |
) % |
|
159.09 |
% |
Total interest income |
|
207,170 |
|
|
|
202,928 |
|
|
|
184,127 |
|
|
2.09 |
% |
|
12.51 |
% |
Interest expense |
|
|
|
|
|
|
|
|
|
||||||||
Interest on deposits |
|
49,456 |
|
|
|
40,713 |
|
|
|
14,325 |
|
|
21.47 |
% |
|
245.24 |
% |
Interest on borrowings |
|
12,618 |
|
|
|
12,335 |
|
|
|
1,447 |
|
|
2.29 |
% |
|
772.01 |
% |
Total interest expense |
|
62,074 |
|
|
|
53,048 |
|
|
|
15,772 |
|
|
17.01 |
% |
|
293.57 |
% |
Net interest income |
|
145,096 |
|
|
|
149,880 |
|
|
|
168,355 |
|
|
(3.19 |
) % |
|
(13.82 |
) % |
Provision for credit losses |
|
5,500 |
|
|
|
5,500 |
|
|
|
5,500 |
|
|
— |
% |
|
— |
% |
Net interest income after provision for credit losses |
|
139,596 |
|
|
|
144,380 |
|
|
|
162,855 |
|
|
(3.31 |
) % |
|
(14.28 |
) % |
Noninterest income |
|
|
|
|
|
|
|
|
|
||||||||
Deposit account fees |
|
6,126 |
|
|
|
5,936 |
|
|
|
5,788 |
|
|
3.20 |
% |
|
5.84 |
% |
Interchange and ATM fees |
|
4,638 |
|
|
|
4,808 |
|
|
|
4,282 |
|
|
(3.54 |
) % |
|
8.31 |
% |
Investment management |
|
9,818 |
|
|
|
10,246 |
|
|
|
10,394 |
|
|
(4.18 |
) % |
|
(5.54 |
) % |
Mortgage banking income |
|
609 |
|
|
|
739 |
|
|
|
526 |
|
|
(17.59 |
) % |
|
15.78 |
% |
Increase in cash surrender value of life insurance policies |
|
2,091 |
|
|
|
1,983 |
|
|
|
2,136 |
|
|
5.45 |
% |
|
(2.11 |
) % |
Gain on life insurance benefits |
|
180 |
|
|
|
1,924 |
|
|
|
691 |
|
|
(90.64 |
) % |
|
(73.95 |
) % |
Loan level derivative income |
|
802 |
|
|
|
842 |
|
|
|
1,421 |
|
|
(4.75 |
) % |
|
(43.56 |
) % |
Other noninterest income |
|
7,803 |
|
|
|
7,065 |
|
|
|
7,064 |
|
|
10.45 |
% |
|
10.46 |
% |
Total noninterest income |
|
32,067 |
|
|
|
33,543 |
|
|
|
32,302 |
|
|
(4.40 |
) % |
|
(0.73 |
) % |
Noninterest expenses |
|
|
|
|
|
|
|
|
|
||||||||
Salaries and employee benefits |
|
56,388 |
|
|
|
54,797 |
|
|
|
53,754 |
|
|
2.90 |
% |
|
4.90 |
% |
Occupancy and equipment expenses |
|
13,054 |
|
|
|
12,321 |
|
|
|
12,586 |
|
|
5.95 |
% |
|
3.72 |
% |
Data processing and facilities management |
|
2,423 |
|
|
|
2,404 |
|
|
|
2,442 |
|
|
0.79 |
% |
|
(0.78 |
) % |
FDIC assessment |
|
3,942 |
|
|
|
2,727 |
|
|
|
1,726 |
|
|
44.55 |
% |
|
128.39 |
% |
Other noninterest expenses |
|
24,940 |
|
|
|
25,533 |
|
|
|
24,364 |
|
|
(2.32 |
) % |
|
2.36 |
% |
Total noninterest expenses |
|
100,747 |
|
|
|
97,782 |
|
|
|
94,872 |
|
|
3.03 |
% |
|
6.19 |
% |
Income before income taxes |
|
70,916 |
|
|
|
80,141 |
|
|
|
100,285 |
|
|
(11.51 |
) % |
|
(29.29 |
) % |
Provision for income taxes |
|
16,113 |
|
|
|
19,333 |
|
|
|
23,242 |
|
|
(16.66 |
) % |
|
(30.67 |
) % |
Net Income |
$ |
54,803 |
|
|
$ |
60,808 |
|
|
$ |
77,043 |
|
|
(9.88 |
) % |
|
(28.87 |
) % |
|
|
|
|
|
|
|
|
|
|
||||||||
Weighted average common shares (basic) |
|
43,474,734 |
|
|
|
44,135,487 |
|
|
|
45,641,605 |
|
|
|
|
|
||
Common share equivalents |
|
9,474 |
|
|
|
11,417 |
|
|
|
20,090 |
|
|
|
|
|
||
Weighted average common shares (diluted) |
|
43,484,208 |
|
|
|
44,146,904 |
|
|
|
45,661,695 |
|
|
|
|
|
||
|
|
|
|
|
|
|
|
|
|
||||||||
Basic earnings per share |
$ |
1.26 |
|
|
$ |
1.38 |
|
|
$ |
1.69 |
|
|
(8.70 |
) % |
|
(25.44 |
) % |
Diluted earnings per share |
$ |
1.26 |
|
|
$ |
1.38 |
|
|
$ |
1.69 |
|
|
(8.70 |
) % |
|
(25.44 |
) % |
|
|
|
|
|
|
|
|
|
|
||||||||
|
|
|
|
|
|
|
|
|
|
||||||||
|
|
|
|
|
|
|
|
|
|
||||||||
Performance ratios |
|
|
|
|
|
|
|
|
|
||||||||
Net interest margin (FTE) |
|
3.38 |
% |
|
|
3.47 |
% |
|
|
3.85 |
% |
|
|
|
|
||
Return on average assets (calculated by dividing net income by average assets) |
|
1.13 |
% |
|
|
1.25 |
% |
|
|
1.56 |
% |
|
|
|
|
||
Return on average common equity (calculated by dividing net income by average common equity) (GAAP) |
|
7.51 |
% |
|
|
8.35 |
% |
|
|
10.70 |
% |
|
|
|
|
||
Return on average tangible common equity (Non-GAAP) (calculated by dividing net income by average tangible common equity) |
|
11.50 |
% |
|
|
12.81 |
% |
|
|
16.57 |
% |
|
|
|
|
||
Noninterest income as a % of total revenue (calculated by dividing total noninterest income by net interest income plus total noninterest income) |
|
18.10 |
% |
|
|
18.29 |
% |
|
|
16.10 |
% |
|
|
|
|
||
Efficiency ratio (calculated by dividing total noninterest expense by total revenue) |
|
56.87 |
% |
|
|
53.31 |
% |
|
|
47.28 |
% |
|
|
|
|
||
CONSOLIDATED STATEMENTS OF INCOME |
|
|
|
|
|
||||||
(Unaudited, dollars in thousands, except per share data) |
|
|
|
|
|||||||
|
|
Years Ended |
|
|
|||||||
|
|
|
|
|
|
% Change |
|||||
|
|
December 31
|
|
December 31
|
|
Dec 2023 vs. |
|||||
|
|
|
|
Dec 2022 |
|||||||
|
|
|
|
|
|
|
|||||
Interest income |
|
|
|
|
|
|
|||||
Interest on federal funds sold and short-term investments |
|
$ |
5,186 |
|
|
$ |
14,385 |
|
|
(63.95 |
) % |
Interest and dividends on securities |
|
|
60,342 |
|
|
|
50,360 |
|
|
19.82 |
% |
Interest and fees on loans |
|
|
730,008 |
|
|
|
577,923 |
|
|
26.32 |
% |
Interest on loans held for sale |
|
|
190 |
|
|
|
172 |
|
|
10.47 |
% |
Total interest income |
|
|
795,726 |
|
|
|
642,840 |
|
|
23.78 |
% |
Interest expense |
|
|
|
|
|
|
|||||
Interest on deposits |
|
|
144,752 |
|
|
|
24,652 |
|
|
487.18 |
% |
Interest on borrowings |
|
|
44,453 |
|
|
|
4,939 |
|
|
800.04 |
% |
Total interest expense |
|
|
189,205 |
|
|
|
29,591 |
|
|
539.40 |
% |
Net interest income |
|
|
606,521 |
|
|
|
613,249 |
|
|
(1.10 |
) % |
Provision for credit losses |
|
|
23,250 |
|
|
|
6,500 |
|
|
257.69 |
% |
Net interest income after provision for credit losses |
|
|
583,271 |
|
|
|
606,749 |
|
|
(3.87 |
) % |
Noninterest income |
|
|
|
|
|
|
|||||
Deposit account fees |
|
|
23,486 |
|
|
|
23,370 |
|
|
0.50 |
% |
Interchange and ATM fees |
|
|
18,108 |
|
|
|
16,249 |
|
|
11.44 |
% |
Investment management |
|
|
40,191 |
|
|
|
36,832 |
|
|
9.12 |
% |
Mortgage banking income |
|
|
2,326 |
|
|
|
3,515 |
|
|
(33.83 |
) % |
Increase in cash surrender value of life insurance policies |
|
|
7,868 |
|
|
|
7,685 |
|
|
2.38 |
% |
Gain on life insurance benefits |
|
|
2,291 |
|
|
|
1,291 |
|
|
77.46 |
% |
Loan level derivative income |
|
|
3,327 |
|
|
|
2,932 |
|
|
13.47 |
% |
Other noninterest income |
|
|
27,012 |
|
|
|
22,793 |
|
|
18.51 |
% |
Total noninterest income |
|
|
124,609 |
|
|
|
114,667 |
|
|
8.67 |
% |
Noninterest expenses |
|
|
|
|
|
|
|||||
Salaries and employee benefits |
|
|
222,135 |
|
|
|
204,711 |
|
|
8.51 |
% |
Occupancy and equipment expenses |
|
|
50,582 |
|
|
|
49,841 |
|
|
1.49 |
% |
Data processing and facilities management |
|
|
9,884 |
|
|
|
9,320 |
|
|
6.05 |
% |
FDIC assessment |
|
|
11,953 |
|
|
|
6,951 |
|
|
71.96 |
% |
Merger and acquisition expense |
|
|
— |
|
|
|
7,100 |
|
|
(100.00 |
) % |
Other noninterest expenses |
|
|
98,192 |
|
|
|
95,739 |
|
|
2.56 |
% |
Total noninterest expenses |
|
|
392,746 |
|
|
|
373,662 |
|
|
5.11 |
% |
Income before income taxes |
|
|
315,134 |
|
|
|
347,754 |
|
|
(9.38 |
) % |
Provision for income taxes |
|
|
75,632 |
|
|
|
83,941 |
|
|
(9.90 |
) % |
Net Income |
|
$ |
239,502 |
|
|
$ |
263,813 |
|
|
(9.22 |
) % |
|
|
|
|
|
|
|
|||||
Weighted average common shares (basic) |
|
|
44,181,540 |
|
|
|
46,372,051 |
|
|
|
|
Common share equivalents |
|
|
12,007 |
|
|
|
17,938 |
|
|
|
|
Weighted average common shares (diluted) |
|
|
44,193,547 |
|
|
|
46,389,989 |
|
|
|
|
|
|
|
|
|
|
|
|||||
Basic earnings per share |
|
$ |
5.42 |
|
|
$ |
5.69 |
|
|
(4.75 |
) % |
Diluted earnings per share |
|
$ |
5.42 |
|
|
$ |
5.69 |
|
|
(4.75 |
) % |
|
|
|
|
|
|
|
|||||
Reconciliation of Net Income (GAAP) to Operating Net Income (Non-GAAP): |
|
|
|
|
|
|
|||||
Net Income |
|
$ |
239,502 |
|
|
$ |
263,813 |
|
|
|
|
Noninterest expense components |
|
|
|
|
|
|
|||||
Add - merger and acquisition expenses |
|
|
— |
|
|
|
7,100 |
|
|
|
|
Noncore increases to income before taxes |
|
|
— |
|
|
|
7,100 |
|
|
|
|
Net tax benefit associated with noncore items (1) |
|
|
— |
|
|
|
(1,995 |
) |
|
|
|
Noncore increases to net income |
|
$ |
— |
|
|
$ |
5,105 |
|
|
|
|
Operating net income (Non-GAAP) |
|
$ |
239,502 |
|
|
$ |
268,918 |
|
|
(10.94 |
) % |
|
|
|
|
|
|
|
|||||
Diluted earnings per share, on an operating basis |
|
$ |
5.42 |
|
|
$ |
5.80 |
|
|
(6.55 |
) % |
|
|
|
|
|
|
|
|||||
(1) The net tax benefit associated with noncore items is determined by assessing whether each noncore item is included or excluded from net taxable income and applying the Company's combined marginal tax rate to only those items included in net taxable income. |
|||||||||||
|
|
|
|
|
|
|
|||||
Performance ratios |
|
|
|
|
|
|
|||||
Net interest margin (FTE) |
|
|
3.54 |
% |
|
|
3.46 |
% |
|
|
|
Return on average assets (GAAP) (calculated by dividing net income by average assets) |
|
|
1.24 |
% |
|
|
1.33 |
% |
|
|
|
Return on average assets on an operating basis (Non-GAAP) (calculated by dividing net operating net income by average assets) |
|
|
1.24 |
% |
|
|
1.35 |
% |
|
|
|
Return on average common equity (GAAP) (calculated by dividing net income by average common equity) |
|
|
8.31 |
% |
|
|
9.05 |
% |
|
|
|
Return on average common equity on an operating basis (Non-GAAP) (calculated by dividing net operating net income by average common equity) |
|
|
8.31 |
% |
|
|
9.22 |
% |
|
|
|
Return on average tangible common equity (GAAP) (calculated by dividing net income by average tangible common equity) |
|
|
12.78 |
% |
|
|
13.87 |
% |
|
|
|
Return on average tangible common equity on an operating basis (Non-GAAP) (calculated by dividing net operating net income by average tangible common equity) |
|
|
12.78 |
% |
|
|
14.14 |
% |
|
|
|
Noninterest income as a % of total revenue (calculated by dividing total noninterest income by net interest income plus total noninterest income) |
|
|
17.04 |
% |
|
|
15.75 |
% |
|
|
|
Noninterest income as a % of total revenue on an operating basis (Non-GAAP) (calculated by dividing total noninterest income on an operating basis by net interest income plus total noninterest income) |
|
|
17.04 |
% |
|
|
15.75 |
% |
|
|
|
Efficiency ratio (GAAP) (calculated by dividing total noninterest expense by total revenue) |
|
|
53.72 |
% |
|
|
51.33 |
% |
|
|
|
Efficiency ratio on an operating basis (Non-GAAP) (calculated by dividing total noninterest expense on an operating basis by total revenue) |
|
|
53.72 |
% |
|
|
50.36 |
% |
|
|
|
ASSET QUALITY |
|
|
||||||||||
(Unaudited, dollars in thousands) |
|
Nonperforming Assets At |
||||||||||
|
|
December 31
|
|
September 30
|
|
December 31
|
||||||
Nonperforming loans |
|
|
|
|
|
|
||||||
Commercial & industrial loans |
|
$ |
20,188 |
|
|
$ |
2,953 |
|
|
$ |
26,693 |
|
Commercial real estate loans |
|
|
22,952 |
|
|
|
23,867 |
|
|
|
15,730 |
|
Small business loans |
|
|
398 |
|
|
|
372 |
|
|
|
104 |
|
Residential real estate loans |
|
|
7,634 |
|
|
|
8,493 |
|
|
|
8,479 |
|
Home equity |
|
|
3,171 |
|
|
|
3,411 |
|
|
|
3,400 |
|
Other consumer |
|
|
40 |
|
|
|
75 |
|
|
|
475 |
|
Total nonperforming loans |
|
|
54,383 |
|
|
|
39,171 |
|
|
|
54,881 |
|
Other real estate owned |
|
|
110 |
|
|
|
110 |
|
|
|
— |
|
Total nonperforming assets |
|
$ |
54,493 |
|
|
$ |
39,281 |
|
|
$ |
54,881 |
|
|
|
|
|
|
|
|
||||||
Nonperforming loans/gross loans |
|
|
0.38 |
% |
|
|
0.28 |
% |
|
|
0.39 |
% |
Nonperforming assets/total assets |
|
|
0.28 |
% |
|
|
0.20 |
% |
|
|
0.28 |
% |
Allowance for credit losses/nonperforming loans |
|
|
261.52 |
% |
|
|
358.86 |
% |
|
|
277.73 |
% |
Allowance for credit losses/total loans |
|
|
1.00 |
% |
|
|
0.99 |
% |
|
|
1.09 |
% |
Delinquent loans/total loans |
|
|
0.44 |
% |
|
|
0.22 |
% |
|
|
0.30 |
% |
|
|
|
|
|
|
|
||||||
|
|
Nonperforming Assets Reconciliation for the Three Months Ended |
||||||||||
|
|
December 31
|
|
September 30
|
|
December 31
|
||||||
|
|
|
|
|
|
|
||||||
Nonperforming assets beginning balance |
|
$ |
39,281 |
|
|
$ |
45,812 |
|
|
$ |
56,017 |
|
New to nonperforming |
|
|
31,823 |
|
|
|
3,455 |
|
|
|
5,734 |
|
Loans charged-off |
|
|
(4,182 |
) |
|
|
(6,018 |
) |
|
|
(660 |
) |
Loans paid-off |
|
|
(10,905 |
) |
|
|
(2,915 |
) |
|
|
(2,448 |
) |
Loans restored to performing status |
|
|
(1,534 |
) |
|
|
(1,428 |
) |
|
|
(3,846 |
) |
Other |
|
|
10 |
|
|
|
375 |
|
|
|
84 |
|
Nonperforming assets ending balance |
|
$ |
54,493 |
|
|
$ |
39,281 |
|
|
$ |
54,881 |
|
|
|
Net Charge-Offs (Recoveries) |
||||||||||||||||||
|
|
Three Months Ended |
|
Years Ended |
||||||||||||||||
|
|
December 31
|
|
September 30
|
|
December 31
|
|
December 31
|
|
December 31
|
||||||||||
Net charge-offs (recoveries) |
|
|
|
|
|
|
|
|
|
|
||||||||||
Commercial and industrial loans |
|
$ |
80 |
|
|
$ |
(111 |
) |
|
$ |
(5 |
) |
|
$ |
23,419 |
|
|
$ |
(49 |
) |
Commercial real estate loans |
|
|
2,783 |
|
|
|
5,072 |
|
|
|
— |
|
|
|
7,855 |
|
|
|
(271 |
) |
Small business loans |
|
|
267 |
|
|
|
77 |
|
|
|
135 |
|
|
|
392 |
|
|
|
47 |
|
Home equity |
|
|
23 |
|
|
|
(12 |
) |
|
|
(16 |
) |
|
|
(15 |
) |
|
|
1 |
|
Other consumer |
|
|
694 |
|
|
|
552 |
|
|
|
280 |
|
|
|
1,796 |
|
|
|
1,275 |
|
Total net charge-offs (recoveries) |
|
$ |
3,847 |
|
|
$ |
5,578 |
|
|
$ |
394 |
|
|
$ |
33,447 |
|
|
$ |
1,003 |
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Net charge-offs (recoveries) to average loans (annualized) |
|
|
0.11 |
% |
|
|
0.16 |
% |
|
|
0.01 |
% |
|
|
0.24 |
% |
|
|
0.01 |
% |
nm = not meaningful
BALANCE SHEET AND CAPITAL RATIOS |
|
|
|
|
|
|
||||||
|
|
December 31
|
|
September 30
|
|
December 31
|
||||||
Gross loans/total deposits |
|
|
96.05 |
% |
|
|
94.45 |
% |
|
|
87.72 |
% |
Common equity tier 1 capital ratio (1) |
|
|
14.19 |
% |
|
|
14.42 |
% |
|
|
14.33 |
% |
Tier 1 leverage capital ratio (1) |
|
|
10.97 |
% |
|
|
11.12 |
% |
|
|
10.99 |
% |
Common equity to assets ratio GAAP |
|
|
14.96 |
% |
|
|
14.90 |
% |
|
|
14.96 |
% |
Tangible common equity to tangible assets ratio (2) |
|
|
10.31 |
% |
|
|
10.24 |
% |
|
|
10.26 |
% |
Book value per share GAAP |
|
$ |
67.53 |
|
|
$ |
65.37 |
|
|
$ |
63.25 |
|
Tangible book value per share (2) |
|
$ |
44.13 |
|
|
$ |
42.60 |
|
|
$ |
41.12 |
|
(1) Estimated number for December 31, 2023.
(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 |
|||||||||||||||||||||||||
|
|
December 31, 2023 |
|
September 30, 2023 |
|
December 31, 2022 |
|||||||||||||||||||||
|
|
|
|
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 |
|
$ |
42,391 |
|
$ |
304 |
|
2.85 |
% |
|
$ |
89,449 |
|
$ |
905 |
|
4.01 |
% |
|
$ |
466,691 |
|
$ |
4,163 |
|
3.54 |
% |
Securities |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Securities - trading |
|
|
4,509 |
|
|
— |
|
— |
% |
|
|
4,546 |
|
|
— |
|
— |
% |
|
|
3,732 |
|
|
— |
|
— |
% |
Securities - taxable investments |
|
|
2,923,983 |
|
|
14,629 |
|
1.98 |
% |
|
|
3,000,736 |
|
|
14,817 |
|
1.96 |
% |
|
|
3,147,635 |
|
|
15,787 |
|
1.99 |
% |
Securities - nontaxable investments (1) |
|
|
186 |
|
|
2 |
|
4.27 |
% |
|
|
188 |
|
|
1 |
|
2.11 |
% |
|
|
189 |
|
|
2 |
|
4.20 |
% |
Total securities |
|
$ |
2,928,678 |
|
$ |
14,631 |
|
1.98 |
% |
|
$ |
3,005,470 |
|
$ |
14,818 |
|
1.96 |
% |
|
$ |
3,151,556 |
|
$ |
15,789 |
|
1.99 |
% |
Loans held for sale |
|
|
3,614 |
|
|
57 |
|
6.26 |
% |
|
|
4,072 |
|
|
60 |
|
5.85 |
% |
|
|
1,607 |
|
|
22 |
|
5.43 |
% |
Loans |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Commercial and industrial (1) |
|
|
1,600,886 |
|
|
28,990 |
|
7.18 |
% |
|
|
1,682,000 |
|
|
30,739 |
|
7.25 |
% |
|
|
1,560,885 |
|
|
23,258 |
|
5.91 |
% |
Commercial real estate (1) |
|
|
7,956,103 |
|
|
100,331 |
|
5.00 |
% |
|
|
7,823,525 |
|
|
94,861 |
|
4.81 |
% |
|
|
7,732,925 |
|
|
88,508 |
|
4.54 |
% |
Commercial construction |
|
|
895,313 |
|
|
15,932 |
|
7.06 |
% |
|
|
1,007,814 |
|
|
16,829 |
|
6.62 |
% |
|
|
1,223,695 |
|
|
17,205 |
|
5.58 |
% |
Small business |
|
|
246,411 |
|
|
3,956 |
|
6.37 |
% |
|
|
240,782 |
|
|
3,752 |
|
6.18 |
% |
|
|
213,384 |
|
|
2,995 |
|
5.57 |
% |
Total commercial |
|
|
10,698,713 |
|
|
149,209 |
|
5.53 |
% |
|
|
10,754,121 |
|
|
146,181 |
|
5.39 |
% |
|
|
10,730,889 |
|
|
131,966 |
|
4.88 |
% |
Residential real estate |
|
|
2,380,706 |
|
|
24,712 |
|
4.12 |
% |
|
|
2,276,882 |
|
|
23,197 |
|
4.04 |
% |
|
|
2,001,042 |
|
|
18,334 |
|
3.64 |
% |
Home equity |
|
|
1,097,233 |
|
|
18,747 |
|
6.78 |
% |
|
|
1,093,479 |
|
|
18,313 |
|
6.64 |
% |
|
|
1,088,846 |
|
|
14,339 |
|
5.22 |
% |
Total consumer real estate |
|
|
3,477,939 |
|
|
43,459 |
|
4.96 |
% |
|
|
3,370,361 |
|
|
41,510 |
|
4.89 |
% |
|
|
3,089,888 |
|
|
32,673 |
|
4.20 |
% |
Other consumer |
|
|
32,141 |
|
|
667 |
|
8.23 |
% |
|
|
30,775 |
|
|
608 |
|
7.84 |
% |
|
|
34,638 |
|
|
595 |
|
6.82 |
% |
Total loans |
|
$ |
4,208,793 |
|
$ |
193,335 |
|
5.40 |
% |
|
$ |
14,155,257 |
|
$ |
188,299 |
|
5.28 |
% |
|
$ |
13,855,415 |
|
$ |
165,234 |
|
4.73 |
% |
Total interest-earning assets |
|
$ |
17,183,476 |
|
$ |
208,327 |
|
4.81 |
% |
|
$ |
17,254,248 |
|
$ |
204,082 |
|
4.69 |
% |
|
$ |
17,475,269 |
|
$ |
185,208 |
|
4.20 |
% |
Cash and due from banks |
|
|
178,100 |
|
|
|
|
|
|
184,003 |
|
|
|
|
|
|
184,985 |
|
|
|
|
||||||
Federal Home Loan Bank stock |
|
|
37,054 |
|
|
|
|
|
|
38,252 |
|
|
|
|
|
|
5,218 |
|
|
|
|
||||||
Other assets |
|
|
1,883,317 |
|
|
|
|
|
|
1,859,099 |
|
|
|
|
|
|
1,871,241 |
|
|
|
|
||||||
Total assets |
|
$ |
19,281,947 |
|
|
|
|
|
$ |
19,335,602 |
|
|
|
|
|
$ |
19,536,713 |
|
|
|
|
||||||
Interest-bearing liabilities |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Deposits |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Savings and interest checking accounts |
|
$ |
5,323,667 |
|
$ |
14,315 |
|
1.07 |
% |
|
$ |
5,393,209 |
|
$ |
11,860 |
|
0.87 |
% |
|
$ |
5,966,326 |
|
$ |
4,921 |
|
0.33 |
% |
Money market |
|
|
2,851,343 |
|
|
15,197 |
|
2.11 |
% |
|
|
2,945,450 |
|
|
13,709 |
|
1.85 |
% |
|
|
3,408,441 |
|
|
7,492 |
|
0.87 |
% |
Time deposits |
|
|
2,103,666 |
|
|
19,944 |
|
3.76 |
% |
|
|
1,860,440 |
|
|
15,144 |
|
3.23 |
% |
|
|
1,175,667 |
|
|
1,912 |
|
0.65 |
% |
Total interest-bearing deposits |
|
$ |
10,278,676 |
|
$ |
49,456 |
|
1.91 |
% |
|
$ |
10,199,099 |
|
$ |
40,713 |
|
1.58 |
% |
|
$ |
10,550,434 |
|
$ |
14,325 |
|
0.54 |
% |
Borrowings |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Federal Home Loan Bank borrowings |
|
|
884,441 |
|
|
10,836 |
|
4.86 |
% |
|
|
869,646 |
|
|
10,568 |
|
4.82 |
% |
|
|
639 |
|
|
2 |
|
1.24 |
% |
Junior subordinated debentures |
|
|
62,857 |
|
|
1,164 |
|
7.35 |
% |
|
|
62,857 |
|
|
1,150 |
|
7.26 |
% |
|
|
62,855 |
|
|
827 |
|
5.22 |
% |
Subordinated debentures |
|
|
49,968 |
|
|
618 |
|
4.91 |
% |
|
|
49,944 |
|
|
617 |
|
4.90 |
% |
|
|
49,873 |
|
|
618 |
|
4.92 |
% |
Total borrowings |
|
$ |
997,266 |
|
$ |
12,618 |
|
5.02 |
% |
|
$ |
982,447 |
|
$ |
12,335 |
|
4.98 |
% |
|
$ |
113,367 |
|
$ |
1,447 |
|
5.06 |
% |
Total interest-bearing liabilities |
|
$ |
11,275,942 |
|
$ |
62,074 |
|
2.18 |
% |
|
$ |
11,181,546 |
|
$ |
53,048 |
|
1.88 |
% |
|
$ |
10,663,801 |
|
$ |
15,772 |
|
0.59 |
% |
Noninterest-bearing demand deposits |
|
|
4,704,888 |
|
|
|
|
|
|
4,883,009 |
|
|
|
|
|
|
5,606,055 |
|
|
|
|
||||||
Other liabilities |
|
|
406,029 |
|
|
|
|
|
|
381,483 |
|
|
|
|
|
|
410,679 |
|
|
|
|
||||||
Total liabilities |
|
$ |
16,386,859 |
|
|
|
|
|
$ |
16,446,038 |
|
|
|
|
|
$ |
16,680,535 |
|
|
|
|
||||||
Stockholders' equity |
|
|
2,895,088 |
|
|
|
|
|
|
2,889,564 |
|
|
|
|
|
|
2,856,178 |
|
|
|
|
||||||
Total liabilities and stockholders' equity |
|
$ |
19,281,947 |
|
|
|
|
|
$ |
19,335,602 |
|
|
|
|
|
$ |
19,536,713 |
|
|
|
|
||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Net interest income |
|
|
|
$ |
146,253 |
|
|
|
|
|
$ |
151,034 |
|
|
|
|
|
$ |
169,436 |
|
|
||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Interest rate spread (2) |
|
|
|
|
|
2.63 |
% |
|
|
|
|
|
2.81 |
% |
|
|
|
|
|
3.61 |
% |
||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Net interest margin (3) |
|
|
|
|
|
3.38 |
% |
|
|
|
|
|
3.47 |
% |
|
|
|
|
|
3.85 |
% |
||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Supplemental Information |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Total deposits, including demand deposits |
|
$ |
14,983,564 |
|
$ |
49,456 |
|
|
|
$ |
15,082,108 |
|
$ |
40,713 |
|
|
|
$ |
16,156,489 |
|
$ |
14,325 |
|
|
|||
Cost of total deposits |
|
|
|
|
|
1.31 |
% |
|
|
|
|
|
1.07 |
% |
|
|
|
|
|
0.35 |
% |
||||||
Total funding liabilities, including demand deposits |
|
$ |
15,980,830 |
|
$ |
62,074 |
|
|
|
$ |
16,064,555 |
|
$ |
53,048 |
|
|
|
$ |
16,269,856 |
|
$ |
15,772 |
|
|
|||
Cost of total funding liabilities |
|
|
|
|
|
1.54 |
% |
|
|
|
|
|
1.31 |
% |
|
|
|
|
|
0.38 |
% |
||||||
(1) The total amount of adjustment to present interest income and yield on a fully tax-equivalent basis is
(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.
|
|
Years Ended |
||||||||||||||||
|
|
December 31, 2023 |
|
December 31, 2022 |
||||||||||||||
|
|
|
|
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 |
|
$ |
118,806 |
|
$ |
5,186 |
|
4.37 |
% |
|
$ |
1,222,434 |
|
$ |
14,385 |
|
1.18 |
% |
Securities |
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Securities - trading |
|
|
4,411 |
|
|
— |
|
— |
% |
|
|
3,764 |
|
|
— |
|
— |
% |
Securities - taxable investments |
|
|
3,027,769 |
|
|
60,336 |
|
1.99 |
% |
|
|
2,948,358 |
|
|
50,354 |
|
1.71 |
% |
Securities - nontaxable investments (1) |
|
|
190 |
|
|
7 |
|
3.68 |
% |
|
|
196 |
|
|
7 |
|
3.57 |
% |
Total securities |
|
$ |
3,032,370 |
|
$ |
60,343 |
|
1.99 |
% |
|
$ |
2,952,318 |
|
$ |
50,361 |
|
1.71 |
% |
Loans held for sale |
|
|
3,289 |
|
|
190 |
|
5.78 |
% |
|
|
4,774 |
|
|
172 |
|
3.60 |
% |
Loans |
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Commercial and industrial (1) |
|
|
1,646,939 |
|
|
115,752 |
|
7.03 |
% |
|
|
1,538,848 |
|
|
77,074 |
|
5.01 |
% |
Commercial real estate (1) |
|
|
7,839,476 |
|
|
376,586 |
|
4.80 |
% |
|
|
7,807,427 |
|
|
326,593 |
|
4.18 |
% |
Commercial construction |
|
|
1,019,871 |
|
|
66,440 |
|
6.51 |
% |
|
|
1,191,394 |
|
|
57,804 |
|
4.85 |
% |
Small business |
|
|
235,108 |
|
|
14,428 |
|
6.14 |
% |
|
|
204,982 |
|
|
10,886 |
|
5.31 |
% |
Total commercial |
|
|
10,741,394 |
|
|
573,206 |
|
5.34 |
% |
|
|
10,742,651 |
|
|
472,357 |
|
4.40 |
% |
Residential real estate |
|
|
2,217,971 |
|
|
88,210 |
|
3.98 |
% |
|
|
1,831,493 |
|
|
63,443 |
|
3.46 |
% |
Home equity |
|
|
1,093,546 |
|
|
70,698 |
|
6.47 |
% |
|
|
1,061,228 |
|
|
44,048 |
|
4.15 |
% |
Total consumer real estate |
|
|
3,311,517 |
|
|
158,908 |
|
4.80 |
% |
|
|
2,892,721 |
|
|
107,491 |
|
3.72 |
% |
Other consumer |
|
|
31,202 |
|
|
2,418 |
|
7.75 |
% |
|
|
31,986 |
|
|
2,114 |
|
6.61 |
% |
Total loans |
|
$ |
14,084,113 |
|
$ |
734,532 |
|
5.22 |
% |
|
$ |
13,667,358 |
|
$ |
581,962 |
|
4.26 |
% |
Total interest-earning assets |
|
$ |
17,238,578 |
|
$ |
800,251 |
|
4.64 |
% |
|
$ |
17,846,884 |
|
$ |
646,880 |
|
3.62 |
% |
Cash and due from banks |
|
|
180,553 |
|
|
|
|
|
|
184,812 |
|
|
|
|
||||
Federal Home Loan Bank stock |
|
|
33,734 |
|
|
|
|
|
|
7,134 |
|
|
|
|
||||
Other assets |
|
|
1,853,585 |
|
|
|
|
|
|
1,858,210 |
|
|
|
|
||||
Total assets |
|
$ |
19,306,450 |
|
|
|
|
|
$ |
19,897,040 |
|
|
|
|
||||
Interest-bearing liabilities |
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Deposits |
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Savings and interest checking accounts |
|
$ |
5,489,923 |
|
$ |
43,073 |
|
0.78 |
% |
|
$ |
6,159,289 |
|
$ |
8,339 |
|
0.14 |
% |
Money market |
|
|
3,022,322 |
|
|
51,630 |
|
1.71 |
% |
|
|
3,489,981 |
|
|
11,683 |
|
0.33 |
% |
Time deposits |
|
|
1,724,625 |
|
|
50,050 |
|
2.90 |
% |
|
|
1,310,442 |
|
|
4,630 |
|
0.35 |
% |
Total interest-bearing deposits |
|
$ |
10,236,870 |
|
$ |
144,753 |
|
1.41 |
% |
|
$ |
10,959,712 |
|
$ |
24,652 |
|
0.22 |
% |
Borrowings |
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Federal Home Loan Bank borrowings |
|
|
782,121 |
|
|
37,624 |
|
4.81 |
% |
|
|
16,138 |
|
|
313 |
|
1.94 |
% |
Long-term borrowings |
|
|
— |
|
|
— |
|
— |
% |
|
|
2,235 |
|
|
31 |
|
1.39 |
% |
Junior subordinated debentures |
|
|
62,857 |
|
|
4,359 |
|
6.93 |
% |
|
|
62,854 |
|
|
2,125 |
|
3.38 |
% |
Subordinated debentures |
|
|
49,933 |
|
|
2,470 |
|
4.95 |
% |
|
|
49,837 |
|
|
2,470 |
|
4.96 |
% |
Total borrowings |
|
$ |
894,911 |
|
$ |
44,453 |
|
4.97 |
% |
|
$ |
131,064 |
|
$ |
4,939 |
|
3.77 |
% |
Total interest-bearing liabilities |
|
$ |
11,131,781 |
|
$ |
189,206 |
|
1.70 |
% |
|
$ |
11,090,776 |
|
$ |
29,591 |
|
0.27 |
% |
Noninterest-bearing demand deposits |
|
|
4,918,787 |
|
|
|
|
|
|
5,559,997 |
|
|
|
|
||||
Other liabilities |
|
|
374,585 |
|
|
|
|
|
|
330,371 |
|
|
|
|
||||
Total liabilities |
|
$ |
16,425,153 |
|
|
|
|
|
$ |
16,981,144 |
|
|
|
|
||||
Stockholders' equity |
|
|
2,881,297 |
|
|
|
|
|
|
2,915,896 |
|
|
|
|
||||
Total liabilities and stockholders' equity |
|
$ |
19,306,450 |
|
|
|
|
|
$ |
19,897,040 |
|
|
|
|
||||
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Net interest income |
|
|
|
$ |
611,045 |
|
|
|
|
|
$ |
617,289 |
|
|
||||
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Interest rate spread (2) |
|
|
|
|
|
2.94 |
% |
|
|
|
|
|
3.35 |
% |
||||
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Net interest margin (3) |
|
|
|
|
|
3.54 |
% |
|
|
|
|
|
3.46 |
% |
||||
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Supplemental Information |
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Total deposits, including demand deposits |
|
$ |
15,155,657 |
|
$ |
144,753 |
|
|
|
$ |
16,519,709 |
|
$ |
24,652 |
|
|
||
Cost of total deposits |
|
|
|
|
|
0.96 |
% |
|
|
|
|
|
0.15 |
% |
||||
Total funding liabilities, including demand deposits |
|
$ |
16,050,568 |
|
$ |
189,206 |
|
|
|
$ |
16,650,773 |
|
$ |
29,591 |
|
|
||
Cost of total funding liabilities |
|
|
|
|
|
1.18 |
% |
|
|
|
|
|
0.18 |
% |
||||
(1) The total amount of adjustment to present interest income and yield on a fully tax-equivalent basis is
(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:
|
|
December 31
|
|
September 30
|
|
December 31
|
|
||||||
Tangible common equity |
|
(Dollars in thousands, except per share data) |
|
||||||||||
Stockholders' equity (GAAP) |
|
$ |
2,895,251 |
|
|
$ |
2,885,408 |
|
|
$ |
2,886,701 |
|
(a) |
Less: Goodwill and other intangibles |
|
|
1,003,262 |
|
|
|
1,004,897 |
|
|
|
1,010,140 |
|
|
Tangible common equity (Non-GAAP) |
|
$ |
1,891,989 |
|
|
$ |
1,880,511 |
|
|
$ |
1,876,561 |
|
(b) |
Tangible assets |
|
|
|
|
|
|
|
||||||
Assets (GAAP) |
|
$ |
19,347,373 |
|
|
$ |
19,368,109 |
|
|
$ |
19,294,174 |
|
(c) |
Less: Goodwill and other intangibles |
|
|
1,003,262 |
|
|
|
1,004,897 |
|
|
|
1,010,140 |
|
|
Tangible assets (Non-GAAP) |
|
$ |
18,344,111 |
|
|
$ |
18,363,212 |
|
|
$ |
18,284,034 |
|
(d) |
|
|
|
|
|
|
|
|
||||||
Common Shares |
|
|
42,873,187 |
|
|
|
44,141,973 |
|
|
|
45,641,238 |
|
(e) |
|
|
|
|
|
|
|
|
||||||
Common equity to assets ratio (GAAP) |
|
|
14.96 |
% |
|
|
14.90 |
% |
|
|
14.96 |
% |
(a/c) |
Tangible common equity to tangible assets ratio (Non-GAAP) |
|
|
10.31 |
% |
|
|
10.24 |
% |
|
|
10.26 |
% |
(b/d) |
Book value per share (GAAP) |
|
$ |
67.53 |
|
|
$ |
65.37 |
|
|
$ |
63.25 |
|
(a/e) |
Tangible book value per share (Non-GAAP) |
|
$ |
44.13 |
|
|
$ |
42.60 |
|
|
$ |
41.12 |
|
(b/e) |
APPENDIX B: Non-GAAP Reconciliation of Earnings Metrics
(Unaudited, dollars in thousands)
The following table summarizes the impact of noncore items on the Company's calculation of noninterest income and noninterest expense, the impact of noncore items on noninterest income as a percentage of total revenue and the efficiency ratio, as well as the average tangible common equity used to calculate return on average tangible common equity and operating return on tangible common equity for the periods indicated:
|
Three Months Ended |
|
Years Ended |
||||||||||||||||
|
December 31
|
|
September 30
|
|
December 31
|
|
December 31
|
|
December 31
|
||||||||||
Net interest income (GAAP) |
$ |
145,096 |
|
|
$ |
149,880 |
|
|
$ |
168,355 |
|
|
$ |
606,521 |
|
|
$ |
613,249 |
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Noninterest income (GAAP) |
$ |
32,067 |
|
|
$ |
33,543 |
|
|
$ |
32,302 |
|
|
$ |
124,609 |
|
|
$ |
114,667 |
|
Noninterest income on an operating basis (Non-GAAP) |
$ |
32,067 |
|
|
$ |
33,543 |
|
|
$ |
32,302 |
|
|
$ |
124,609 |
|
|
$ |
114,667 |
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Noninterest expense (GAAP) |
|
100,747 |
|
|
$ |
97,782 |
|
|
$ |
94,872 |
|
|
$ |
392,746 |
|
|
$ |
373,662 |
|
Less: |
|
|
|
|
|
|
|
|
|
||||||||||
Merger and acquisition expense |
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
7,100 |
|
Noninterest expense on an operating basis (Non-GAAP) |
$ |
100,747 |
|
|
$ |
97,782 |
|
|
$ |
94,872 |
|
|
$ |
392,746 |
|
|
$ |
366,562 |
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Total revenue (GAAP) |
$ |
177,163 |
|
|
$ |
183,423 |
|
|
$ |
200,657 |
|
|
$ |
731,130 |
|
|
$ |
727,916 |
|
Total operating revenue (Non-GAAP) |
$ |
177,163 |
|
|
$ |
183,423 |
|
|
$ |
200,657 |
|
|
$ |
731,130 |
|
|
$ |
727,916 |
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Net income (GAAP) |
$ |
54,803 |
|
|
$ |
60,808 |
|
|
$ |
77,043 |
|
|
$ |
239,502 |
|
|
$ |
263,813 |
|
Operating net income (Non-GAAP) (See income statement for reconciliation of GAAP to Non-GAAP) |
$ |
54,803 |
|
|
$ |
60,808 |
|
|
$ |
77,043 |
|
|
$ |
239,502 |
|
|
$ |
268,918 |
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Average common equity (GAAP) |
$ |
2,895,088 |
|
|
$ |
2,889,564 |
|
|
$ |
2,856,178 |
|
|
$ |
2,881,297 |
|
|
$ |
2,915,896 |
|
Less: Average goodwill and other intangibles |
|
1,004,081 |
|
|
|
1,005,778 |
|
|
|
1,011,091 |
|
|
|
1,006,658 |
|
|
|
1,014,045 |
|
Tangible average tangible common equity (Non-GAAP) |
$ |
1,891,007 |
|
|
$ |
1,883,786 |
|
|
$ |
1,845,087 |
|
|
$ |
1,874,639 |
|
|
$ |
1,901,851 |
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Ratios |
|
|
|
|
|
|
|
|
|
||||||||||
Noninterest income as a % of total revenue (GAAP) (calculated by dividing total noninterest income by total revenue) |
|
18.10 |
% |
|
|
18.29 |
% |
|
|
16.10 |
% |
|
|
17.04 |
% |
|
|
15.75 |
% |
Noninterest income as a % of total revenue on an operating basis (Non-GAAP) (calculated by dividing total noninterest income on an operating basis by total revenue) |
|
18.10 |
% |
|
|
18.29 |
% |
|
|
16.10 |
% |
|
|
17.04 |
% |
|
|
15.75 |
% |
Efficiency ratio (GAAP) (calculated by dividing total noninterest expense by total revenue) |
|
56.87 |
% |
|
|
53.31 |
% |
|
|
47.28 |
% |
|
|
53.72 |
% |
|
|
51.33 |
% |
Efficiency ratio on an operating basis (Non-GAAP) (calculated by dividing total noninterest expense on an operating basis by total revenue) |
|
56.87 |
% |
|
|
53.31 |
% |
|
|
47.28 |
% |
|
|
53.72 |
% |
|
|
50.36 |
% |
Return on average tangible common equity (Non-GAAP) (calculated by dividing annualized net income by average tangible common equity) |
|
11.50 |
% |
|
|
12.81 |
% |
|
|
16.57 |
% |
|
|
12.78 |
% |
|
|
13.87 |
% |
Return on average tangible common equity on an operating basis (Non-GAAP) (calculated by dividing annualized net operating net income by average tangible common equity) |
|
11.50 |
% |
|
|
12.81 |
% |
|
|
16.57 |
% |
|
|
12.78 |
% |
|
|
14.14 |
% |
APPENDIX C: Net Interest Margin Analysis & Non-GAAP Reconciliation of Core Margin
|
Three Months Ended |
||||||||||||||||
|
December 31, 2023 |
|
September 30, 2023 |
||||||||||||||
|
Volume |
Interest |
Margin
|
|
Volume |
Interest |
Margin
|
||||||||||
|
(Dollars in thousands) |
||||||||||||||||
Reported total interest earning assets |
$ |
17,183,476 |
|
$ |
146,253 |
|
3.38 |
% |
|
$ |
17,254,248 |
|
$ |
151,034 |
|
3.47 |
% |
Acquisition fair value marks: |
|
|
|
|
|
|
|
||||||||||
Loan accretion |
|
|
(1,156 |
) |
|
|
|
|
(330 |
) |
|
||||||
CD amortization |
|
|
11 |
|
|
|
|
|
11 |
|
|
||||||
|
|
|
(1,145 |
) |
(0.03 |
) % |
|
|
|
(319 |
) |
— |
% |
||||
|
|
|
|
|
|
|
|
||||||||||
Nonaccrual interest, net |
|
|
549 |
|
0.01 |
% |
|
|
|
67 |
|
— |
% |
||||
|
|
|
|
|
|
|
|
||||||||||
Other noncore adjustments |
|
(4,913 |
) |
|
(574 |
) |
(0.01 |
) % |
|
|
(5,448 |
) |
|
(77 |
) |
— |
% |
|
|
|
|
|
|
|
|
||||||||||
Core margin (Non-GAAP) |
$ |
17,178,563 |
|
$ |
145,083 |
|
3.35 |
% |
|
$ |
17,248,800 |
|
$ |
150,705 |
|
3.47 |
% |
View source version on businesswire.com: https://www.businesswire.com/news/home/20240117623955/en/
Jeffrey Tengel
President and Chief Executive Officer
(781) 982-6144
Mark J. Ruggiero
Chief Financial Officer and
Executive Vice President of Consumer Lending
(781) 982-6281
Source: Independent Bank Corp.
FAQ
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