Independent Bank Corp. Reports Second Quarter Net Income of $37.6 Million

Rhea-AI Summary

Independent Bank Corp. (INDB) reported second-quarter 2021 net income of $37.6 million, or $1.14 per diluted share, down from $41.7 million, or $1.26 per share in Q1 2021. The decline included $1.7 million in merger costs from the pending acquisition of Meridian Bancorp. Adjusted operating net income was $38.8 million, or $1.17 per diluted share. Total assets increased to $14.2 billion, while total loans fell by 3.3%, driven by a 43% drop in PPP loans. Deposit balances rose by 3.4%, totaling $12.0 billion, supported by stimulus payments. Net interest income decreased due to reduced PPP fee recognition.

Positive

• Total assets reached $14.2 billion, marking a 3.1% increase from the prior quarter.
• Core deposits rose to 91.6% of total deposits, with a cost of deposits reduced to 0.07%.
• Nonperforming loans decreased by 19.2% to $47.8 million, reflecting improved asset quality.
• Credit reserve releases of $5.0 million indicate positive asset quality trends.

Negative

• Net income dropped from $41.7 million in Q1 2021 to $37.6 million in Q2 2021.
• Total loans declined by 3.3% due to a significant drop in PPP loan balances.
• Net interest income decreased to $93.4 million from $95.6 million in the previous quarter.
• Net interest margin fell to 2.99%, down 26 basis points from the prior quarter.

Independent Bank Corp. (Nasdaq Global Select Market: INDB), parent of Rockland Trust Company, today announced 2021 second quarter net income of $37.6 million, or $1.14 per diluted share, compared to net income of $41.7 million, or $1.26 per diluted share, reported for the first quarter of 2021. Second quarter results included merger related costs of $1.7 million associated with the acquisition of Meridian Bancorp Inc. ("Meridian") and its subsidiary East Boston Savings Bank, which is expected to close in the fourth quarter of 2021. Excluding these merger-related costs, net of tax, operating net income was $38.8 million, or $1.17 per diluted share, for the second quarter of 2021. Please refer to "Reconciliation of Net Income (GAAP) to Operating Net Income (Non-GAAP)" below for a reconciliation of net income to operating net income.

"Our core fundamentals are strong and we are well-positioned to continue to take advantage of growth opportunities as the local economy continues to re-adjust post-pandemic,” said Christopher Oddleifson, the Chief Executive Officer of Independent Bank Corp. and Rockland Trust Company. “We have been hard at work on our previously announced merger with Meridian Bancorp./East Boston Savings Bank and are excited about the possibilities the transaction represents for our future. I continue to be inspired by the dedication and effort of my colleagues, and their collective commitment to our customers, the communities we serve, and to each other as we live out our mission of being the bank Where Each Relationship Matters®.”

BALANCE SHEET

Total assets of $14.2 billion at June 30, 2021 increased by $420.3 million, or 3.1%, from the prior quarter, and by $1.2 billion, or 9.0%, as compared to the year ago period, driven by continued significant growth in deposits, leading to increased liquid assets in the second quarter of 2021.

Total loans at June 30, 2021 decreased by $307.7 million, or 3.3% (13.3% annualized), when compared to the prior quarter which was primarily attributable to a net reduction in Paycheck Protection Program ("PPP") loan balances of $363.7 million, or 43.0%, as the program concluded its second round of funding with focus pivoting toward loan forgiveness. Exclusive of PPP loan activity, total loans increased $55.9 million, or 2.7% on an annualized basis, reflecting a modest, yet positive shift in overall economic activity. Fueling the net growth, commercial loans increased $66.2 million, or 1.1% (4.3% annualized) during the second quarter, primarily due to growth in residential-based commercial real estate projects, as well as 5.0% (19.9% annualized) growth in small business loans, capitalizing on positive momentum from the successful PPP experience and overall market disruption. Partially offsetting these growth factors, construction loan balances decreased 3.8% from the prior quarter, reflecting an accelerated pace of project completion, while modest new fundings and restrained line utilization in the commercial and industrial portfolio continued to challenge growth. Strong closing volumes were experienced within both the residential and home equity portfolios, with a larger portion of residential closings being retained in the portfolio rather than sold into the secondary market compared to prior quarters. However the low interest-rate environment and excess consumer liquidity positions continued to drive elevated payoff activity and historically low home equity line utilization rates.

Deposit balances of $12.0 billion at June 30, 2021 increased by $393.4 million, or 3.4% (13.6% annualized), from the prior quarter, reflecting additional government stimulus payments along with robust new account activity in both consumer and business product categories. With continued reduction in time deposit balances, core deposits rose to 91.6% of total deposits at June 30, 2021, which, combined with the runoff of higher cost time deposits and further rate reductions across all products, contributed to a total cost of deposits for the second quarter of 0.07%, representing a reduction of three basis points when compared to the prior quarter.

The securities portfolio increased by $251.3 million, or 17.6%, when compared to the prior quarter, reflecting a continued direct strategy to deploy a portion of excess cash balances into securities. Total purchases for the quarter were $340.2 million, offset by paydowns, calls, and maturities.

Total borrowings decreased by $4.7 million, or 2.6% when compared to the prior quarter reflecting repayments of outstanding debt.

Stockholders' equity at June 30, 2021 increased by 1.5% (6.1% annualized), as compared to the prior quarter, reflecting continued strong earnings retention. Book value per share increased by $0.78, or 1.5%, to $52.72 during the second quarter as compared to the prior quarter. The Company's ratio of common equity to assets of 12.27% decreased by 18 basis points from the prior quarter and by 57 basis points from the year ago period. The Company's tangible book value per share at June 30, 2021 rose by $0.82, or 2.3%, from the prior quarter to $36.78, representing an increase of 6.3% from the year ago period. The Company's ratio of tangible common equity to tangible assets of 8.89% at June 30, 2021 represents a 7 basis point decrease compared to the prior quarter and a 23 basis point decrease compared to the year ago period.

Please refer to Appendix A for a detailed reconciliation of Non-GAAP metrics.

NET INTEREST INCOME

Net interest income for the second quarter decreased to $93.4 million compared to $95.6 million for the prior quarter, driven primarily by reductions in PPP fee recognition as $7.2 million was recognized in the second quarter compared to $9.5 million for the prior quarter. The 2021 second quarter net interest margin was heavily impacted by the Company's increased excess liquidity position, decreasing by 26 basis points from the prior quarter to 2.99%. The table below illustrates the changes within the net interest margin for the second quarter:

Net interest margin as of March 31, 2021		3.25	%
Excess liquidity - cash and securities		(0.19)	%
Loan yields		(0.03)	%
PPP loan impact		(0.06)	%
Other noncore adjustments		(0.01)	%
Decreased cost of funds		0.03	%
Net interest margin as of June 30, 2021		2.99	%

Please refer to Appendix C for additional details regarding the net interest margin.

NONINTEREST INCOME

Noninterest income of $25.0 million for the second quarter of 2021 was $279,000, or 1.1%, lower than the prior quarter. Significant changes in noninterest income for the second quarter compared to the prior quarter included the following:

• Deposit account fees increased by $238,000, or 6.6%, primarily driven by overdraft fees.

• Interchange and ATM fees increased by $348,000, or 12.8%, due primarily to increased volume during the second quarter, reflecting a rise in customer spending.

• Investment management income increased by $568,000, or 6.8%, due primarily to an increase in assets under administration along with seasonal tax preparation fees during the second quarter. Assets under administration increased by 4.3% from the prior quarter to a record high of $5.4 billion as of June 30, 2021.

• Mortgage banking income decreased by $3.0 million, or 52.9%, reflecting a larger portion of new originations retained in the Company's portfolio versus sold into the secondary market, coupled with gain on sale margin compression during the quarter.

• Income from bank owned life insurance policies increased $266,000, or 20.1%, reflecting the full quarter impact of $40.0 million in new policies purchased during the first quarter of 2021.

• Other noninterest income increased by $1.7 million, or 52.5%, primarily attributable to $1.1 million in income recognized from other investments, unrealized gains on equity securities, and an increase in income from like-kind exchanges.

NONINTEREST EXPENSE

Noninterest expense of $73.3 million for the second quarter of 2021 was $3.6 million, or 5.2% higher than the prior quarter. Significant changes in noninterest expense for the second quarter compared to the prior quarter included the following:

• Salaries and employee benefits increased by $2.7 million, or 6.9%, mainly due to increases in incentive compensation, general salaries, and other commissions. These increases were offset partially by decreases in medical plan insurance expenses and payroll taxes.

• Occupancy and equipment decreased by $567,000, or 6.1%, mainly due to decreases in snow removal costs and cleaning expenses.

• FDIC assessment decreased by $275,000, or 26.2%, reflecting a lower fee for the quarter along with a refund of prior period assessment fees of approximately $109,000.

• During the second quarter of 2021 there were $1.7 million of merger and acquisition expenses relating to the Meridian acquisition. No such costs were incurred during the first quarter of 2021.

• Other noninterest expense remained flat, primarily due to decreases in consultant fees and card issuance costs, partially offset by increases in legal fees, director expenses related to equity compensation during the quarter and additional reserve for unfunded commitments.

The Company generated a return on average assets and a return on average common equity of 1.08% and 8.70%, respectively, for the second quarter of 2021, as compared to 1.26% and 9.87%, respectively, for the prior quarter. On an operating basis, return on average assets and return on average common equity were 1.12% and 8.98%, respectively, for the second quarter of 2021.

The tax rate of 24.9% for the second quarter was higher than the prior quarter rate of 22.3%, which included $1.4 million of discrete tax benefits related primarily to low income housing tax credits and equity compensation.

ASSET QUALITY

During the second quarter, the Company recorded total net charge-offs of $192,000, or 0.01% of average loans on an annualized basis. Nonperforming loans decreased by 19.2% to $47.8 million, or 0.53% of total loans at June 30, 2021, as compared to $59.2 million, or 0.64% of total loans at March 31, 2021. The decrease was primarily attributable to the full pay-off of one large commercial loan during the second quarter.

In addition, total loans subject to a payment deferral remained relatively consistent with the prior quarter, amounting to $233.8 million, or 2.6% of total loans at June 30, 2021, with the highest concentration remaining in the accommodation portfolio. The majority of the loans subject to a payment deferral at June 30, 2021 were characterized as current loans. As such, delinquency as a percentage of total loans remained low at 0.11% as of June 30, 2021, representing a decrease of one basis point from the prior quarter. Please refer to Appendix E for additional details regarding loans whose terms have been modified as a result of the COVID-19 pandemic.

The Company recorded credit reserve releases of $5.0 million during the second quarter of 2021, reflecting continued improvement in asset quality metrics and overall macro-economic assumptions. The allowance for credit losses on total loans was $102.4 million at June 30, 2021, or 1.15% of total loans, as compared to $107.5 million at March 31, 2021, or 1.16% of total loans. The allowance for credit losses as a percentage of total loans, excluding PPP loans, was 1.21% and 1.28% at June 30, 2021 and March 31, 2021, respectively. Please refer to Appendix D for information regarding loan exposures within industries deemed highly impacted by the COVID-19 pandemic.

CONFERENCE CALL INFORMATION

Christopher Oddleifson, Chief Executive Officer, Robert Cozzone, Chief Operating Officer, Mark Ruggiero, Chief Financial Officer, and Gerard Nadeau, President and Chief Commercial Banking Officer will host a conference call to discuss second quarter earnings at 10:00 a.m. Eastern Time on Friday, July 23, 2021. Internet access to the call is available on the Company’s website at www.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: 10157162 and will be available through August 6, 2021. Additionally, a webcast replay will be available until July 23, 2022.

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. Rockland Trust was named to The Boston Globe's "Top Places to Work" 2020 list, an honor earned for the 12th consecutive year. In 2021, Rockland Trust was ranked the #1 Bank in Massachusetts according to Forbes World's Best Banks list for the second year in a row. Rockland Trust has a longstanding commitment to equity and inclusion. This commitment is underscored by initiatives such as Diversity and Inclusion leadership training, a colleague Allyship mentoring program, and numerous Employee Resource Groups focused on providing colleague support and education, reinforcing a culture of mutual respect and advancing professional development, and Rockland Trust's sponsorship of diverse community organizations through charitable giving and employee-based volunteerism. In addition, Rockland Trust is deeply committed to the communities it serves, as reflected in the overall "Outstanding" rating in its most recent Community Reinvestment Act performance evaluation. Rockland Trust offers a wide range of banking, investment, and insurance services. The Bank serves businesses and individuals through approximately 100 retail branches, commercial and residential lending centers, and investment management offices in eastern Massachusetts, including Greater Boston, the South Shore, Cape Cod and Islands, Worcester County, and Rhode Island. Rockland Trust also offers a full suite of mobile, online, and telephone banking services. Rockland Trust is an FDIC member and an Equal Housing Lender. To find out why Rockland Trust is the bank "Where Each Relationship Matters®," please visit RocklandTrust.com.

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, including future weakening caused by the COVID-19 pandemic;
• the length and extent of economic contraction as a result of the COVID-19 pandemic;
• 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;
• adverse changes in asset quality and any unanticipated credit deterioration in our loan portfolio including those related 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, including the additional costs associated with the Company's increase in assets to over $10 billion;
• 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, resulting from 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 and changes related to the phase-out of LIBOR;
• increased competition in the Company’s market areas;
• adverse weather, changes in climate, natural disasters, the emergence of widespread health emergencies or pandemics, including the magnitude and duration of the COVID-19 pandemic, other public health crises or man-made events could negatively affect our local economies or disrupt our operations, which would have an adverse effect on our business or results of operations;
• a deterioration in the conditions of the securities markets;
• a deterioration of the credit rating for U.S. long-term sovereign debt;
• 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 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;
• changes in laws and regulations (including laws and regulations concerning taxes, banking, securities and insurance) generally applicable to the Company’s business;
• the Company's potential judgments, claims, damages, penalties, fines and reputational damage resulting from pending or future litigation and regulatory and government actions, including as a result of our participation in and execution of government programs related to the COVID-19 pandemic;
• 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 including, but not limited to, changes to how the Company accounts for credit losses;
• cyber security attacks or intrusions that could adversely impact our businesses; and
• other unexpected material adverse changes in our operations or earnings.

Further, the foregoing factors may be exacerbated by the ultimate impact of the COVID-19 pandemic, which is unknown at this time. Statements about the COVID-19 pandemic and its potential impact on our business, financial condition, liquidity and results of operations may constitute forward-looking statements and are subject to the risk that actual results may differ, possibly materially, from what is reflected in such statements due to factors and future developments that are uncertain, unpredictable and, in many cases, beyond our control, including the scope, duration and extent of the pandemic and any resurgences, actions taken by governmental authorities in response to the pandemic and the direct and indirect impact on the Company’s employees, customers, business and third-parties with which the Company conducts business.

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 contains financial information determined by methods other than in accordance with accounting principles generally accepted in the United States of America (“GAAP”). This information includes operating net income and operating earnings per share ("EPS"), operating return on average assets, operating return on average common equity, core net margin, tangible book value per share and the tangible common equity ratio.

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 net interest 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 out-sized cash balances, unique low-yielding loans originated through government programs in response to the pandemic, or significant purchase accounting adjustments. Management believes that adjusting for these items to arrive at a core margin provides additional insight into the operating environment and how management decisions impact the net interest margin. Similarly, management reviews certain loan metrics such as growth rates and allowance as a percentage of total loans, adjusted to exclude loans that are not considered part of its core portfolio, which includes loans originated in association with government sponsored and guaranteed programs in response to the pandemic, to arrive at adjusted numbers more representative of the core growth of the portfolio and core reserve to loan ratio.

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

These non-GAAP measures should not be viewed as a substitute for operating results and other financial measures determined in accordance with GAAP. An item which management deems to be noncore and excludes when computing these non-GAAP measures can be of substantial importance to the Company’s results for any particular quarter or year. The Company’s non-GAAP performance measures, including operating net income, operating EPS, operating return on average assets, operating return on average common equity, core net 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 2021				March 31 2021				June 30 2020				Jun 2021 vs.			Jun 2021 vs.
													Mar 2021			Jun 2020
Assets
Cash and due from banks	$	141,953			$	126,651			$	131,615			12.08	%		7.85	%
Interest-earning deposits with banks	2,114,477				1,642,688				974,105				28.72	%		117.07	%
Securities
Trading	3,439				3,269				2,541				5.20	%		35.34	%
Equities	22,975				22,419				20,810				2.48	%		10.40	%
Available for sale	794,516				600,213				420,517				32.37	%		88.94	%
Held to maturity	861,821				805,529				731,026				6.99	%		17.89	%
Total securities	1,682,751				1,431,430				1,174,894				17.56	%		43.23	%
Loans held for sale	25,561				41,632				45,395				(38.60)	%		(43.69)	%
Loans
Commercial and industrial	1,726,498				2,086,671				2,004,645				(17.26)	%		(13.88)	%
Commercial real estate	4,251,543				4,177,617				4,071,047				1.77	%		4.43	%
Commercial construction	496,539				516,362				537,788				(3.84)	%		(7.67)	%
Small business	182,863				174,211				170,288				4.97	%		7.38	%
Total commercial	6,657,443				6,954,861				6,783,768				(4.28)	%		(1.86)	%
Residential real estate	1,240,279				1,241,789				1,431,129				(0.12)	%		(13.34)	%
Home equity - first position	606,332				610,907				650,922				(0.75)	%		(6.85)	%
Home equity - subordinate positions	412,076				417,588				469,601				(1.32)	%		(12.25)	%
Total consumer real estate	2,258,687				2,270,284				2,551,652				(0.51)	%		(11.48)	%
Other consumer	22,858				21,546				24,228				6.09	%		(5.65)	%
Total loans	8,938,988				9,246,691				9,359,648				(3.33)	%		(4.49)	%
Less: allowance for credit losses	(102,357)				(107,549)				(112,176)				(4.83)	%		(8.75)	%
Net loans	8,836,631				9,139,142				9,247,472				(3.31)	%		(4.44)	%
Federal Home Loan Bank stock	9,079				10,250				15,090				(11.42)	%		(39.83)	%
Bank premises and equipment, net	117,435				115,945				122,172				1.29	%		(3.88)	%
Goodwill	506,206				506,206				506,206				—	%		—	%
Other intangible assets	20,370				21,689				25,996				(6.08)	%		(21.64)	%
Cash surrender value of life insurance policies	242,963				241,365				198,124				0.66	%		22.63	%
Other assets	496,781				496,916				581,431				(0.03)	%		(14.56)	%
Total assets	$	14,194,207			$	13,773,914			$	13,022,500			3.05	%		9.00	%
Liabilities and Stockholders' Equity
Deposits
Noninterest-bearing demand deposits	$	4,370,852			$	4,136,259			$	3,694,559			5.67	%		18.31	%
Savings and interest checking accounts	4,445,903				4,242,235				3,896,024				4.80	%		14.11	%
Money market	2,352,897				2,346,985				2,034,021				0.25	%		15.68	%
Time certificates of deposit	817,319				868,045				1,092,217				(5.84)	%		(25.17)	%
Total deposits	11,986,971				11,593,524				10,716,821				3.39	%		11.85	%
Borrowings
Federal Home Loan Bank borrowings	35,693				35,717				145,770				(0.07)	%		(75.51)	%
Long-term borrowings, net	23,425				28,099				37,433				(16.63)	%		(37.42)	%
Junior subordinated debentures, net	62,852				62,851				62,850				—	%		—	%
Subordinated debentures, net	49,743				49,720				49,648				0.05	%		0.19	%
Total borrowings	171,713				176,387				295,701				(2.65)	%		(41.93)	%
Total deposits and borrowings	12,158,684				11,769,911				11,012,522				3.30	%		10.41	%
Other liabilities	293,901				288,632				338,286				1.83	%		(13.12)	%
Total liabilities	12,452,585				12,058,543				11,350,808				3.27	%		9.71	%
Stockholders' equity
Common stock	329				329				328				—	%		0.30	%
Additional paid in capital	948,130				946,002				942,685				0.22	%		0.58	%
Retained earnings	763,596				741,883				676,834				2.93	%		12.82	%
Accumulated other comprehensive income, net of tax	29,567				27,157				51,845				8.87	%		(42.97)	%
Total stockholders' equity	1,741,622				1,715,371				1,671,692				1.53	%		4.18	%
Total liabilities and stockholders' equity	$	14,194,207			$	13,773,914			$	13,022,500			3.05	%		9.00	%

CONSOLIDATED STATEMENTS OF INCOME
(Unaudited, dollars in thousands, except per share data)
	Three Months Ended
													% Change			% Change
	June 30 2021				March 31 2021				June 30 2020				Jun 2021 vs.			Jun 2021 vs.
													Mar 2021			Jun 2020
Interest income
Interest on federal funds sold and short-term investments	$	513			$	326			$	132			57.36	%		288.64	%
Interest and dividends on securities	7,189				6,632				7,840				8.40	%		(8.30)	%
Interest and fees on loans	88,814				92,383				91,634				(3.86)	%		(3.08)	%
Interest on loans held for sale	186				296				359				(37.16)	%		(48.19)	%
Total interest income	96,702				99,637				99,965				(2.95)	%		(3.26)	%
Interest expense
Interest on deposits	2,017				2,711				7,027				(25.60)	%		(71.30)	%
Interest on borrowings	1,331				1,342				1,840				(0.82)	%		(27.66)	%
Total interest expense	3,348				4,053				8,867				(17.39)	%		(62.24)	%
Net interest income	93,354				95,584				91,098				(2.33)	%		2.48	%
Provision for credit losses	(5,000)				(2,500)				20,000				100.00	%		(125.00)	%
Net interest income after provision for credit losses	98,354				98,084				71,098				0.28	%		38.34	%
Noninterest income
Deposit account fees	3,822				3,584				2,829				6.64	%		35.10	%
Interchange and ATM fees	3,068				2,720				5,214				12.79	%		(41.16)	%
Investment management	8,872				8,304				7,296				6.84	%		21.60	%
Mortgage banking income	2,705				5,740				5,005				(52.87)	%		(45.95)	%
Increase in cash surrender value of life insurance policies	1,589				1,323				1,312				20.11	%		21.11	%
Gain on life insurance benefits	—				258				335				(100.00)	%		(100.00)	%
Loan level derivative income	116				173				2,864				(32.95)	%		(95.95)	%
Other noninterest income	4,795				3,144				3,335				52.51	%		43.78	%
Total noninterest income	24,967				25,246				28,190				(1.11)	%		(11.43)	%
Noninterest expenses
Salaries and employee benefits	42,635				39,889				37,269				6.88	%		14.40	%
Occupancy and equipment expenses	8,706				9,273				9,273				(6.11)	%		(6.11)	%
Data processing and facilities management	1,686				1,665				1,459				1.26	%		15.56	%
FDIC assessment	775				1,050				503				(26.19)	%		54.08	%
Merger and acquisition expense	1,731				—				—				100.00%			100.00%
Other noninterest expenses	17,769				17,805				18,103				(0.20)	%		(1.84)	%
Total noninterest expenses	73,302				69,682				66,607				5.20	%		10.05	%
Income before income taxes	50,019				53,648				32,681				(6.76)	%		53.05	%
Provision for income taxes	12,447				11,937				7,779				4.27	%		60.01	%
Net Income	$	37,572			$	41,711			$	24,902			(9.92)	%		50.88	%
Weighted average common shares (basic)	33,033,578				32,995,332				32,944,761
Common share equivalents	21,270				30,098				28,098
Weighted average common shares (diluted)	33,054,848				33,025,430				32,972,859
Basic earnings per share	$	1.14			$	1.26			$	0.76			(9.52)	%		50.00	%
Diluted earnings per share	$	1.14			$	1.26			$	0.76			(9.52)	%		50.00	%
Reconciliation of Net Income (GAAP) to Operating Net Income (Non-GAAP):
Net income	$	37,572			$	41,711			$	24,902
Noninterest expense components
Add - merger and acquisition expenses	1,731				—				—
Noncore increases to income before taxes	1,731				—				—
Net tax benefit associated with noncore items (1)	(487)				—				—
Noncore increases to net income	1,244				—				—
Operating net income (Non-GAAP)	$	38,816			$	41,711			$	24,902			(6.94)	%		55.88	%
Diluted earnings per share, on an operating basis	$	1.17			$	1.26			$	0.76			(7.14)	%		53.95	%
(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)	2.99		%		3.25		%		3.25		%
Return on average assets (GAAP) (calculated by dividing net income by average assets)	1.08		%		1.26		%		0.79		%
Return on average assets on an operating basis (Non-GAAP) (calculated by dividing net operating net income by average assets)	1.12		%		1.26		%		0.79		%
Return on average common equity (GAAP) (calculated by dividing net income by average common equity)	8.70		%		9.87		%		5.97		%
Return on average common equity on an operating basis (Non-GAAP) (calculated by dividing net operating net income by average common equity)	8.98		%		9.87		%		5.97		%

CONSOLIDATED STATEMENTS OF INCOME
(Unaudited, dollars in thousands, except per share data)
		Six Months Ended
										% Change
		June 30 2021				June 30 2020				Jun 2021 vs.
										Jun 2020
Interest income
Interest on federal funds sold and short-term investments		$	839			$	292			187.33	%
Interest and dividends on securities		13,821				15,806				(12.56)	%
Interest and fees on loans		181,197				190,656				(4.96)	%
Interest on loans held for sale		482				591				(18.44)	%
Total interest income		196,339				207,345				(5.31)	%
Interest expense
Interest on deposits		4,728				17,919				(73.61)	%
Interest on borrowings		2,673				4,024				(33.57)	%
Total interest expense		7,401				21,943				(66.27)	%
Net interest income		188,938				185,402				1.91	%
Provision for credit losses		(7,500)				45,000				(116.67)	%
Net interest income after provision for credit losses		196,438				140,402				39.91	%
Noninterest income
Deposit account fees		7,406				7,799				(5.04)	%
Interchange and ATM fees		5,788				10,110				(42.75)	%
Investment management		17,176				14,125				21.60	%
Mortgage banking income		8,445				5,866				43.97	%
Increase in cash surrender value of life insurance policies		2,912				2,588				12.52	%
Gain on life insurance benefits		258				692				(62.72)	%
Loan level derivative income		289				6,461				(95.53)	%
Other noninterest income		7,939				6,984				13.67	%
Total noninterest income		50,213				54,625				(8.08)	%
Noninterest expenses
Salaries and employee benefits		82,524				74,618				10.60	%
Occupancy and equipment expenses		17,979				18,590				(3.29)	%
Data processing and facilities management		3,351				3,117				7.51	%
FDIC assessment		1,825				503				262.82	%
Merger and acquisition expense		1,731				—				100.00%
Other noninterest expenses		35,574				36,619				(2.85)	%
Total noninterest expenses		142,984				133,447				7.15	%
Income before income taxes		103,667				61,580				68.35	%
Provision for income taxes		24,384				9,927				145.63	%
Net Income		$	79,283			$	51,653			53.49	%
Weighted average common shares (basic)		33,014,561				33,564,596
Common share equivalents		25,085				31,991
Weighted average common shares (diluted)		33,039,646				33,596,587
Basic earnings per share		$	2.40			$	1.54			55.84	%
Diluted earnings per share		$	2.40			$	1.54			55.84	%
Reconciliation of Net Income (GAAP) to Operating Net Income (Non-GAAP):
Net Income		$	79,283			$	51,653
Noninterest expense components
Add - merger and acquisition expenses		1,731				—
Noncore increases to income before taxes		1,731				—
Net tax benefit associated with noncore items (1)		(487)				—
Noncore increases to net income		$	1,244			$	—
Operating net income (Non-GAAP)		$	80,527			$	51,653			55.90	%
Diluted earnings per share, on an operating basis		$	2.44			$	1.54			58.44	%
(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)		3.12		%		3.48		%
Return on average assets (GAAP) (calculated by dividing net income by average assets)		1.17		%		0.86		%
Return on average assets on an operating basis (Non-GAAP) (calculated by dividing net operating net income by average assets)		1.19		%		0.86		%
Return on average common equity (GAAP) (calculated by dividing net income by average common equity)		9.28		%		6.10		%
Return on average common equity on an operating basis (Non-GAAP) (calculated by dividing net operating net income by average common equity)		9.42		%		6.10		%

ASSET QUALITY
(Unaudited, dollars in thousands)		Nonperforming Assets At
		June 30 2021				March 31 2021				June 30 2020
Nonperforming loans
Commercial & industrial loans		$	20,831			$	29,785			$	20,736
Commercial real estate loans		9,031				9,635				6,313
Small business loans		558				660				619
Residential real estate loans		12,786				13,392				14,561
Home equity		4,517				5,592				6,437
Other consumer		95				137				148
Total nonperforming loans		47,818				59,201				48,814
Total nonperforming assets		$	47,818			$	59,201			$	48,814
Nonperforming loans/gross loans		0.53		%		0.64		%		0.52		%
Nonperforming assets/total assets		0.34		%		0.43		%		0.37		%
Allowance for credit losses/nonperforming loans		214.06		%		181.67		%		229.80		%
Allowance for credit losses/total loans		1.15		%		1.16		%		1.20		%
Delinquent loans/total loans		0.11		%		0.12		%		0.24		%
		Nonperforming Assets Reconciliation for the Three Months Ended
		June 30 2021				March 31 2021				June 30 2020
Nonperforming assets beginning balance		$	59,201			$	66,861			$	48,040
New to nonperforming		2,233				2,359				8,215
Loans charged-off		(481)				(3,686)				(710)
Loans paid-off		(10,364)				(4,025)				(2,210)
Loans restored to performing status		(2,771)				(2,559)				(4,529)
Other		—				251				8
Nonperforming assets ending balance		$	47,818			$	59,201			$	48,814

		Net Charge-Offs (Recoveries)
		Three Months Ended												Six Months Ended
		June 30 2021				March 31 2021				June 30 2020				June 30 2021				June 30 2020
Net charge-offs (recoveries)
Commercial and industrial loans		$	107			$	3,267			$	(4)			$	3,374			$	(46)
Commercial real estate loans		—				(57)				—				(57)				—
Small business loans		31				55				33				86				139
Residential real estate loans		—				(1)				—				(1)				(1)
Home equity		24				(13)				(91)				11				(11)
Other consumer		30				92				262				122				503
Total net charge-offs		$	192			$	3,343			$	200			$	3,535			$	584
Net charge-offs to average loans (annualized)		0.01		%		0.15		%		0.01		%		0.08		%		0.01		%

		Troubled Debt Restructurings At
		June 30 2021				March 31 2021				June 30 2020
Troubled debt restructurings on accrual status		$	19,495			$	20,262			$	17,741
Troubled debt restructurings on nonaccrual status		20,212				21,167				24,098
Total troubled debt restructurings		$	39,707			$	41,429			$	41,839
BALANCE SHEET AND CAPITAL RATIOS
		June 30 2021				March 31 2021				June 30 2020
Gross loans/total deposits		74.57		%		79.76		%		87.34		%
Common equity tier 1 capital ratio (1)		13.24		%		13.16		%		12.26		%
Tier 1 leverage capital ratio (1)		9.41		%		9.63		%		9.57		%
Common equity to assets ratio GAAP		12.27		%		12.45		%		12.84		%
Tangible common equity to tangible assets ratio (2)		8.89		%		8.96		%		9.12		%
Book value per share GAAP		$	52.72			$	51.94			$	50.75
Tangible book value per share (2)		$	36.78			$	35.96			$	34.59

(1) Estimated number for June 30, 2021.

(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, 2021											March 31, 2021											June 30, 2020
						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		$	1,882,285			$	513			0.11	%		$	1,321,430			$	326			0.10	%		$	724,634			$	132			0.07	%
Securities
Securities - trading		3,359				—				—	%		2,939				—				—	%		2,393				—				—	%
Securities - taxable investments		1,514,336				7,184				1.90	%		1,250,451				6,627				2.15	%		1,206,631				7,831				2.61	%
Securities - nontaxable investments (1)		555				6				4.34	%		642				6				3.79	%		1,145				11				3.86	%
Total securities		$	1,518,250			$	7,190			1.90	%		$	1,254,032			$	6,633			2.15	%		$	1,210,169			$	7,842			2.61	%
Loans held for sale		28,279				186				2.64	%		49,652				296				2.42	%		50,613				359				2.85	%
Loans
Commercial and industrial (1)		1,944,026				20,351				4.20	%		2,115,069				23,046				4.42	%		1,914,830				17,363				3.65	%
Commercial real estate (1)		4,196,171				41,532				3.97	%		4,156,012				40,376				3.94	%		4,051,342				42,371				4.21	%
Commercial construction		514,935				4,777				3.72	%		555,153				5,283				3.86	%		538,767				5,314				3.97	%
Small business		178,525				2,302				5.17	%		174,320				2,281				5.31	%		174,438				2,388				5.51	%
Total commercial		6,833,657				68,962				4.05	%		7,000,554				70,986				4.11	%		6,679,377				67,436				4.06	%
Residential real estate		1,226,520				11,058				3.62	%		1,271,283				12,436				3.97	%		1,474,495				13,801				3.76	%
Home equity		1,024,798				8,591				3.36	%		1,050,234				8,757				3.38	%		1,133,034				10,132				3.60	%
Total consumer real estate		2,251,318				19,649				3.50	%		2,321,517				21,193				3.70	%		2,607,529				23,933				3.69	%
Other consumer		22,471				411				7.34	%		21,698				432				8.07	%		24,971				500				8.05	%
Total loans		$	9,107,446			$	89,022			3.92	%		$	9,343,769			$	92,611			4.02	%		$	9,311,877			$	91,869			3.97	%
Total interest-earning assets		$	12,536,260			$	96,911			3.10	%		$	11,968,883			$	99,866			3.38	%		$	11,297,293			$	100,202			3.57	%
Cash and due from banks		142,198											154,870											119,692
Federal Home Loan Bank stock		9,410											10,250											23,175
Other assets		1,258,056											1,241,651											1,287,620
Total assets		$	13,945,924										$	13,375,654										$	12,727,780
Interest-bearing liabilities
Deposits
Savings and interest checking accounts		$	4,339,645			$	384			0.04	%		$	4,109,747			$	423			0.04	%		$	3,679,729			$	1,101			0.12	%
Money market		2,347,852				429				0.07	%		2,288,030				521				0.09	%		1,972,986				1,377				0.28	%
Time deposits		843,090				1,204				0.57	%		906,613				1,767				0.79	%		1,186,189				4,549				1.54	%
Total interest-bearing deposits		$	7,530,587			$	2,017			0.11	%		$	7,304,390			$	2,711			0.15	%		$	6,838,904			$	7,027			0.41	%
Borrowings
Federal Home Loan Bank borrowings		35,704				191				2.15	%		35,785				188				2.13	%		339,393				433				0.51	%
Long-term borrowings		23,417				94				1.61	%		28,247				111				1.59	%		71,629				343				1.93	%
Junior subordinated debentures		62,852				429				2.74	%		62,851				426				2.75	%		62,849				446				2.85	%
Subordinated debentures		49,730				618				4.98	%		49,705				617				5.03	%		49,635				618				5.01	%
Total borrowings		$	171,703			$	1,332			3.11	%		$	176,588			$	1,342			3.08	%		$	523,506			$	1,840			1.41	%
Total interest-bearing liabilities		$	7,702,290			$	3,349			0.17	%		$	7,480,978			$	4,053			0.22	%		$	7,362,410			$	8,867			0.48	%
Noninterest-bearing demand deposits		4,237,135											3,895,447											3,371,262
Other liabilities		273,449											285,857											315,979
Total liabilities		$	12,212,874										$	11,662,282										$	11,049,651
Stockholders' equity		1,733,050											1,713,372											1,678,129
Total liabilities and stockholders' equity		$	13,945,924										$	13,375,654										$	12,727,780
Net interest income						$	93,562										$	95,813										$	91,335
Interest rate spread (2)										2.93	%										3.16	%										3.09	%
Net interest margin (3)										2.99	%										3.25	%										3.25	%
Supplemental Information
Total deposits, including demand deposits		$	11,767,722			$	2,017						$	11,199,837			$	2,711						$	10,210,166			$	7,027
Cost of total deposits										0.07	%										0.10	%										0.28	%
Total funding liabilities, including demand deposits		$	11,939,425			$	3,349						$	11,376,425			$	4,053						$	10,733,672			$	8,867
Cost of total funding liabilities										0.11	%										0.14	%										0.33	%

(1) The total amount of adjustment to present interest income and yield on a fully tax-equivalent basis is $209,000, $229,000, and $237,000 for the three months ended June 30, 2021, March 31, 2021, and June 30, 2020, respectively, 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, 2021											June 30, 2020
						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		$	1,603,407			$	839			0.11	%		$	398,593			$	292			0.15	%
Securities
Securities - trading		3,150				—				—	%		2,328				—				—	%
Securities - taxable investments		1,383,122				13,811				2.01	%		1,198,298				15,788				2.65	%
Securities - nontaxable investments (1)		599				12				4.04	%		1,191				23				3.88	%
Total securities		$	1,386,871			$	13,823			2.01	%		$	1,201,817			$	15,811			2.65	%
Loans held for sale		38,907				482				2.50	%		39,329				591				3.02	%
Loans
Commercial and industrial (1)		2,029,075				43,397				4.31	%		1,659,014				34,303				4.16	%
Commercial real estate (1)		4,176,202				81,908				3.96	%		4,031,734				88,222				4.40	%
Commercial construction		534,933				10,060				3.79	%		547,254				12,215				4.49	%
Small business		176,434				4,583				5.24	%		174,553				4,950				5.70	%
Total commercial		6,916,644				139,948				4.08	%		6,412,555				139,690				4.38	%
Residential real estate		1,248,778				23,494				3.79	%		1,517,667				28,420				3.77	%
Home equity		1,037,446				17,348				3.37	%		1,134,983				21,959				3.89	%
Total consumer real estate		2,286,224				40,842				3.60	%		2,652,650				50,379				3.82	%
Other consumer		22,087				843				7.70	%		26,406				1,072				8.16	%
Total loans		$	9,224,955			$	181,633			3.97	%		$	9,091,611			$	191,141			4.23	%
Total interest-earning assets		$	12,254,140			$	196,777			3.24	%		$	10,731,350			$	207,835			3.89	%
Cash and due from banks		148,499											121,199
Federal Home Loan Bank stock		9,828											18,937
Other assets		1,249,898											1,227,199
Total assets		$	13,662,365										$	12,098,685
Interest-bearing liabilities
Deposits
Savings and interest checking accounts		$	4,225,331			$	807			0.04	%		$	3,475,223			$	3,035			0.18	%
Money market		2,318,106				950				0.08	%		1,922,495				4,550				0.48	%
Time deposits		874,676				2,971				0.68	%		1,266,540				10,334				1.64	%
Total interest-bearing deposits		$	7,418,113			$	4,728			0.13	%		$	6,664,258			$	17,919			0.54	%
Borrowings
Federal Home Loan Bank borrowings		35,746				379				2.14	%		235,309				961				0.82	%
Long-term borrowings		25,818				205				1.60	%		73,271				904				2.48	%
Junior subordinated debentures		62,851				855				2.74	%		62,849				924				2.96	%
Subordinated debentures		49,717				1,235				5.01	%		49,623				1,235				5.00	%
Total borrowings		$	174,132			$	2,674			3.10	%		$	421,052			$	4,024			1.92	%
Total interest-bearing liabilities		$	7,592,245			$	7,402			0.20	%		$	7,085,310			$	21,943			0.62	%
Noninterest-bearing demand deposits		4,067,235											3,025,990
Other liabilities		279,620											283,724
Total liabilities		$	11,939,100										$	10,395,024
Stockholders' equity		1,723,265											1,703,661
Total liabilities and stockholders' equity		$	13,662,365										$	12,098,685
Net interest income						$	189,375										$	185,892
Interest rate spread (2)										3.04	%										3.27	%
Net interest margin (3)										3.12	%										3.48	%
Supplemental Information
Total deposits, including demand deposits		$	11,485,348			$	4,728						$	9,690,248			$	17,919
Cost of total deposits										0.08	%										0.37	%
Total funding liabilities, including demand deposits		$	11,659,480			$	7,402						$	10,111,300			$	21,943
Cost of total funding liabilities										0.13	%										0.44	%

(1) The total amount of adjustment to present interest income and yield on a fully tax-equivalent basis is $438,000 and $490,000 for the six months ended June 30, 2021 and 2020, 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.

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, tangible book value per share, and loan and allowance metrics, exclusive of PPP loan balances at the dates indicated:

		June 30 2021				March 31 2021				June 30 2020
Tangible common equity		(Dollars in thousands, except per share data)
Stockholders' equity (GAAP)		$	1,741,622			$	1,715,371			$	1,671,692		(a)
Less: Goodwill and other intangibles		526,576				527,895				532,202
Tangible common equity		$	1,215,046			$	1,187,476			$	1,139,490		(b)
Tangible assets
Assets (GAAP)		$	14,194,207			$	13,773,914			$	13,022,500		(c)
Less: Goodwill and other intangibles		526,576				527,895				532,202
Tangible assets		$	13,667,631			$	13,246,019			$	12,490,298		(d)
Common Shares		33,037,859				33,024,882				32,942,110			(e)
Common equity to assets ratio (GAAP)		12.27		%		12.45		%		12.84		%	(a/c)
Tangible common equity to tangible assets ratio (Non-GAAP)		8.89		%		8.96		%		9.12		%	(b/d)
Book value per share (GAAP)		$	52.72			$	51.94			$	50.75		(a/e)
Tangible book value per share (Non-GAAP)		$	36.78			$	35.96			$	34.59		(b/e)
Total loans (GAAP)		$	8,938,988			$	9,246,691			$	9,359,648
Total loans, excluding PPP (Non-GAAP)		$	8,456,338			$	8,400,390			$	8,566,665
Allowance as a % of total loans (GAAP)		1.15		%		1.16		%		1.20		%
Allowance as a % of total loans, excluding PPP (Non-GAAP)		1.21		%		1.28		%		1.31		%

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, as well as the impact of noncore items on noninterest income as a percentage of total revenue and the efficiency ratio for the periods indicated:

	Three Months Ended												Six Months Ended
	June 30 2021				March 31 2021				June 30 2020				June 30 2021				June 30 2020
Net interest income (GAAP)	$	93,354			$	95,584			$	91,098			$	188,938			$	185,402		(a)
Noninterest income (GAAP)	$	24,967			$	25,246			$	28,190			$	50,213			$	54,625		(b)
Noninterest income on an operating basis (Non-GAAP)	$	24,967			$	25,246			$	28,190			$	50,213			$	54,625		(c)
Noninterest expense (GAAP)	$	73,302			$	69,682			$	66,607			$	142,984			$	133,447		(d)
Less:
Merger and acquisition expense	1,731				—				—				1,731				—
Noninterest expense on an operating basis (Non-GAAP)	$	71,571			$	69,682			$	66,607			$	141,253			$	133,447		(e)
Total revenue (GAAP)	$	118,321			$	120,830			$	119,288			$	239,151			$	240,027		(a+b)
Total operating revenue (Non-GAAP)	$	118,321			$	120,830			$	119,288			$	239,151			$	240,027		(a+c)
Ratios
Noninterest income as a % of total revenue (GAAP based)	21.10		%		20.89		%		23.63		%		21.00		%		22.76		%	(b/(a+b))
Noninterest income as a % of total revenue on an operating basis (Non-GAAP)	21.10		%		20.89		%		23.63		%		21.00		%		22.76		%	(c/(a+c))
Efficiency ratio (GAAP based)	61.95		%		57.67		%		55.84		%		59.79		%		55.60		%	(d/(a+b))
Efficiency ratio on an operating basis (Non-GAAP)	60.49		%		57.67		%		55.84		%		59.06		%		55.60		%	(e/(a+c))

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

	2021									2021
	Q2									Q1
	Volume			Interest			Margin Impact			Volume			Interest			Margin Impact
	(Dollars in thousands)
Reported total (GAAP)	$	12,535,962		$	93,564		2.99	%		$	11,968,884		$	95,812		3.25	%
Core adjustments:
PPP volume @ 1%	(717,847)			(1,794)						(837,986)			(2,081)
PPP fee amortization				(7,217)						—			(9,487)
Total PPP impact	(717,847)			(9,011)			(0.12)	%		(837,986)			(11,568)			(0.18)	%
Acquisition fair value accretion				(1,664)			(0.06)	%					(1,731)			(0.06)	%
Nonaccrual interest				33			—	%					28			—	%
Other noncore adjustments				(410)			(0.01)	%					(626)			(0.02)	%
Core margin (Non-GAAP)*	$	11,818,115		$	82,512		2.80	%		$	11,130,898		$	81,915		2.99	%

*The presentation above has changed as compared to previously reported periods to include the entire cash balance impact in the “core margin” results.

APPENDIX D: Commercial Loan Portfolio Characteristics

Commercial Industries Highly Impacted by COVID-19 Pandemic

While Rockland Trust is unable to know with certainty the direct, indirect, and likely far-reaching impacts of the COVID-19 pandemic, we continue to monitor daily the loan balances and the loan exposures for commercial loan categories we have deemed to be highly impacted by the pandemic (i.e., Accommodations, Food Services, Retail Trade, Other Services (except Public Administration) and Arts, Entertainments & Recreation). We do not have any material loan exposure to the Oil & Gas, Casino & Gambling, Aviation, or Cruise Line industries.

The table below provides total outstanding balances of commercial loans as of June 30, 2021, within industries that we have deemed to be highly impacted by the COVID-19 pandemic:

Highly Impacted COVID-19 Industries - Balances
	June 30, 2021
	(Dollars in thousands)
Accommodations	$	400,463
Food Services	136,613
Retail Trade	528,404
Other Services (except Public Administration)	146,270
Arts, Entertainment, and Recreation	96,837
Total (1)	$	1,308,587

(1) Amounts presented above exclude $144.2 million of outstanding PPP loans.

Highly Impacted COVID-19 Industries - Details
	June 30, 2021
	(Dollars in thousands)
Accommodations
Balance	$	400,463
Average borrower loan size	$	4,200
% secured by real estate	99.8		%
Weighted average loan to value	54.1		%
Other information:
– The accommodation portfolio consists of 68 properties representing a combination of flagged (59%) and non-flagged (41%) hotels, motels and inns.
– Loans secured by hotel properties deemed to be located in areas of leisure comprise $166.1 million, or 42% of the hotel portfolio.
– Approximately 89% of the balances outstanding are secured by properties located within the six New England states with the largest concentration in Massachusetts (58%).
Food Services
Balance	$	136,613
Average borrower loan size	$	360
% secured by real estate	70.3		%
Weighted average loan to value	49.8		%
Other information:
– The food services portfolio includes full-service restaurants (59%), limited service restaurants and fast food (39%), and other types of food service (caterers, bars, mobile food service 2%).
Retail Trade
Balance	$	528,404
Average borrower loan size	$	498
% secured by real estate	43.0		%
Weighted average loan to value	57.3		%
Other information:
– The retail trade portfolio consists broadly of food and beverage stores (46%), motor vehicle and parts dealers (25%), gasoline stations (14%). All other retailers account for 15% of the current outstanding balance.
– Collateral for these loans varies and may consist of real estate, motor vehicles inventories, other types of inventories and general business assets.
Other Services (except Public Administration)
Balance	$	146,270
Average borrower loan size	$	258
% secured by real estate	52.6		%
Weighted average loan to value	51.2		%
Other information:
– The other services portfolio consists of various for-profit and not-for-profit services diversified across religious, civic and social service organizations (41%), repair and maintenance business (31%) and other personal services, including beauty salons, laundry services, pet care and other types of services (28%).
Arts, Entertainment, and Recreation
Balance	$	96,837
Average borrower loan size	$	775
% secured by real estate	84.2		%
Weighted average loan to value	52.1		%
Other information:
– Amusement, gambling and recreational industries make up a majority of this category (94%) and include amusement/theme parks, bowling centers, fitness centers, golf courses, marinas, and other recreational industries. Other industries including museums, performing arts, and spectator sports account for the remaining outstanding balances (6%).

Other Commercial Loan Portfolio Characteristics

Average total loan size varies across the commercial portfolio with commercial real estate loans having an average size of $1.1 million, commercial and industrial loans having an average loan size of $134,000 and small business loans, which are each under $5.0 million, having an average loan size of $33,000. Additional details are provided below regarding loan sizes of the commercial real estate and commercial and industrial portfolios as of June 30, 2021:

Commercial Real Estate (Including Construction)
	<$5M				$5-10M				$10-20M				>$20M				Total
Dollar Amount (in '000s)	$	2,630,121			$	901,529			$	773,225			$	443,207			$	4,748,082
# of loans	4,040				129				57				18				4,244

Commercial and Industrial (Including PPP)
	<$5M				$5-10M				$10-20M				>$20M				Total
Dollar Amount (in '000s)	$	1,213,192			$	212,666			$	273,974			$	26,666			$	1,726,498
# of loans	12,797				32				20				1				12,850

APPENDIX E: COVID-19 Related Modifications Details

Deferrals by Modification Type
	Deferral of Principal and Interest				Deferral of Principal Only					Total Deferrals				Total Portfolio				% Deferral
	(Dollars in thousands)
Commercial and industrial	$	—			$	1,972				$	1,972			$	1,726,498			0.1	%
Commercial real estate (1)	590				230,589					231,179				4,748,082				4.9	%
Business banking	—				636					636				182,863				0.3	%
Residential real estate	—				—					—				1,240,279				—	%
Home equity	—				—					—				1,018,408				—	%
Consumer	—				—					—				22,858				—	%
Total active deferrals as of June 30, 2021	$	590			$	233,197				$	233,787			$	8,938,988			2.6	%

(1) Balances include commercial construction deferrals.

Deferrals by Industry
	June 30, 2021
	(Dollars in thousands)
Highly Impacted Industries
Accommodation	$	176,721
Food Services	262
Arts, Entertainment, and Recreation	14,181
Total Highly Impacted Industries	191,164
Other Industries
Real Estate and Leasing	41,123
Transportation and Warehousing	578
All Other Industries	922
Total Other Industries	42,623
Grand Total	$	233,787

 

View source version on businesswire.com: https://www.businesswire.com/news/home/20210722005974/en/

FAQ

What were Independent Bank Corp's Q2 2021 earnings per share?

Independent Bank Corp. reported Q2 2021 earnings of $1.14 per diluted share.

How much did Independent Bank Corp's net income decrease in Q2 2021?

Net income decreased to $37.6 million in Q2 2021, down from $41.7 million in Q1 2021.

What impact did the Meridian acquisition have on Independent Bank Corp's expenses?

The acquisition of Meridian Bancorp incurred $1.7 million in merger-related costs.

What was the total asset value of Independent Bank Corp as of June 30, 2021?

Total assets were valued at $14.2 billion as of June 30, 2021.

How did Independent Bank Corp's loan portfolio change in Q2 2021?

Total loans decreased by 3.3%, primarily due to a 43% reduction in PPP loan balances.