ROCKLAND, Mass.--(BUSINESS WIRE)--Independent Bank Corp. (Nasdaq Global Select Market: INDB), parent of Rockland Trust Company, today announced 2024 second quarter net income of $51.3 million, or $1.21 per diluted share, compared to 2024 first quarter net income of $47.8 million, or $1.12 per diluted share.
The Company generated a return on average assets of 1.07% and a return on average common equity of 7.10% for the second quarter of 2024, as compared to 1.00% and 6.63%, respectively, for the prior quarter.
"Our second quarter results reflect positive momentum in all of the core components that drive the Company's financial performance. Despite persistent uncertainty in the broader macroeconomic environment, our colleagues' steadfast focus on each relationship remains the backbone of our success," said Jeffrey Tengel, the Chief Executive Officer of Independent Bank Corp. and Rockland Trust Company.
BALANCE SHEET
Total assets of $19.4 billion at June 30, 2024 increased $86.4 million, or 0.4%, from the prior quarter and reflect a healthy remix of assets from securities into loans when compared to June 30, 2023 levels.
Total loans at June 30, 2024 of $14.4 billion increased by $70.3 million, or 0.5% (2.0% annualized), compared to the prior quarter level. On the commercial side, loan growth was primarily driven by an increase in the commercial and industrial portfolio, an area of increased emphasis, which increased $22.7 million, or 1.4% (5.8% annualized), while the combined commercial real estate and construction loans outstanding were essentially flat. Commercial loan pipelines remained healthy at quarter end. The small business portfolio also continued its steady growth, rising by 2.9% during the second quarter of 2024, while the total consumer portfolio increased $39.2 million, or 1.1% (4.4% annualized) from the prior quarter, reflecting strong overall closing activity and increased home equity utilization.
Deposit balances rose to $15.4 billion at June 30, 2024, representing growth of $366.4 million, or 2.4%, from March 31, 2024. This increase was experienced across all segments, with municipal deposits comprising the majority of the growth. Though some level of product remixing persists, overall core deposits represented 81.9% of total deposits at June 30, 2024, as compared to 83.2% at March 31, 2024, with total noninterest bearing demand deposits comprising 28.7% of total deposits at June 30, 2024, versus 29.7% at March 31, 2024. The total cost of deposits for the second quarter increased 17 basis points to 1.65% compared to the prior quarter.
In conjunction with deposit growth during the quarter, total borrowings declined by $332.0 million, or 32.4%, during the second quarter of 2024, driven by a reduction in Federal Home Loan Bank ("FHLB") borrowings. The overall cost of funding increased 8 basis points as compared to 23 basis points in the prior quarter, as ongoing increases in deposit costs were mitigated by reductions in wholesale borrowing costs.
The securities portfolio decreased by $80.0 million, or 2.8%, compared to March 31, 2024, driven primarily by paydowns and maturities, offset in part by unrealized gains of $5.4 million in the available for sale portfolio. Total securities represented 14.2% of total assets at June 30, 2024, as compared to 14.7% at March 31, 2024.
Stockholders' equity at June 30, 2024 increased $35.0 million, or 1.2%, compared to March 31, 2024, driven primarily by strong earnings retention as well as unrealized gains on the available for sale investment securities portfolio included in other comprehensive income. The Company's ratio of common equity to assets of 15.04% at June 30, 2024 represented an increase of 12 basis points from March 31, 2024 and an increase of 32 basis points from June 30, 2023. The Company's book value per share increased by $0.80, or 1.2%, to $68.74 at June 30, 2024 as compared to the prior quarter. The Company's tangible book value per share at June 30, 2024 rose by $0.85, or 1.9%, from the prior quarter to $45.19, and has grown by 7.9% from the year ago period. The Company's ratio of tangible common equity to tangible assets of 10.42% at June 30, 2024 represented an increase of 15 basis points from the prior quarter and an increase of 37 basis points from the year ago period. Please refer to Appendix A for a detailed reconciliation of Non-GAAP balance sheet metrics.
NET INTEREST INCOME
Net interest income for the second quarter of 2024 increased slightly to $137.9 million as compared to $137.4 million for the prior quarter, due to modest loan growth and a slightly improved net interest margin. The net interest margin of 3.25% increased 2 basis points when compared to the prior quarter, driven primarily by higher loan yields, securities cash flow deployment, and maturing loan hedges, offset by increased funding costs.
NONINTEREST INCOME
Noninterest income of $32.3 million for the second quarter of 2024 represented an increase of $2.4 million, or 8.0%, as compared to the prior quarter. Significant changes in noninterest income for the second quarter of 2024 compared to the prior quarter included the following:
- Interchange and ATM fees increased by $301,000, or 6.8%, driven by increased transaction volume during the second quarter of 2024.
- Investment management and advisory income increased by $1.0 million, or 10.5%, primarily driven by seasonal tax preparation fees and insurance commissions, as well as an increase in total assets under administration, which rose by $66.6 million, or 1.0%, to a record level of $6.9 billion at June 30, 2024.
- Mortgage banking income grew by $524,000, or 65.8%, driven primarily by a higher volume of sold originations during the quarter.
- The Company received proceeds on life insurance policies resulting in a gain of $263,000 during the first quarter of 2024, while no such gains were recognized during the second quarter of 2024.
- Loan level derivative income rose by $393,000, reflecting an increase from lower prior quarter levels.
- Other noninterest income increased by $210,000, or 3.4%, driven primarily by outsized loan fees and FHLB dividend income, partially offset by reduced gains on equity securities.
NONINTEREST EXPENSE
Noninterest expense of $99.6 million for the second quarter of 2024 represented a decrease of $273,000, or 0.3%, as compared to the prior quarter. Significant changes in noninterest expense for the second quarter compared to the prior quarter included the following:
- Salaries and employee benefits were essentially flat as compared to the prior quarter, as increased commissions, equity compensation and medical plan insurance were offset by an outsized benefit related to the valuation of the Company's split-dollar bank-owned life insurance policies.
- Occupancy and equipment expenses decreased by $995,000, or 7.4%, due mainly to seasonal decreases in snow removal and utilities costs.
- FDIC assessment decreased $288,000, or 9.7%, from the prior quarter, driven primarily by the FDIC special assessment recognized by the Company.
- Other noninterest expense increased by $1.1 million, or 4.6%, due primarily to increases in advertising costs, director equity compensation granted during the quarter, professional fees, and subscriptions, partially offset by decreased debit card expenses and card issuance costs.
The Company's tax rate for the second quarter of 2024 decreased to 22.69%, compared to 23.56% for the prior quarter, primarily due to the timing of discrete items.
ASSET QUALITY
The second quarter provision for credit losses was $4.3 million as compared to $5.0 million for the first quarter of 2024 and was largely attributable to specific reserve allocations on existing nonperforming loans. Net charge-offs remained minimal at $339,000 for the second quarter of 2024, as compared to $274,000 for the prior quarter, representing 0.01% of average loans annualized for each respective quarter. Nonperforming loans also stayed relatively flat at $57.5 million at June 30, 2024, as compared to $56.9 million at March 31, 2024 and represented 0.40% of total loans at each respective period. Delinquencies as a percentage of total loans decreased 15 basis points from the prior quarter to 0.37% at June 30, 2024.
The allowance for credit losses on total loans increased to $150.9 million at June 30, 2024 compared to $146.9 million at March 31, 2024, and represented 1.05% and 1.03% of total loans, at June 30, 2024 and March 31, 2024, respectively.
CONFERENCE CALL INFORMATION
Jeffrey Tengel, Chief Executive Officer, and Mark Ruggiero, Chief Financial Officer and Executive Vice President of Consumer Lending, will host a conference call to discuss second quarter earnings at 10:00 a.m. Eastern Time on Friday, July 19, 2024. Internet access to the call is available on the Company's website at https://INDB.RocklandTrust.com or via telephonic access by dial-in at 1-888-336-7153 reference: INDB. A replay of the call will be available by calling 1-877-344-7529, Replay Conference Number: 3664959 and will be available through July 26, 2024. Additionally, a webcast replay will be available on the Company's website until July 19, 2025.
ABOUT INDEPENDENT BANK CORP.
Independent Bank Corp. (NASDAQ Global Select Market: INDB) is the holding company for Rockland Trust Company, a full-service commercial bank headquartered in Massachusetts. With retail branches in Eastern Massachusetts and Worcester County as well as commercial banking and investment management offices in Massachusetts and Rhode Island, Rockland Trust offers a wide range of banking, investment, and insurance services to individuals, families, and businesses. The Bank also offers a full suite of mobile, online, and telephone banking services. Rockland Trust is an FDIC member and an Equal Housing Lender.
This press release contains certain "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995 with respect to the financial condition, results of operations and business of the Company. These statements may be identified by such forward-looking terminology as "expect," "achieve," "plan," "believe," "future," "positioned," "continued," "will," "would," "potential," or similar statements or variations of such terms. Actual results may differ from those contemplated by these forward-looking statements.
Factors that may cause actual results to differ materially from those contemplated by such forward-looking statements include, but are not limited to:
- adverse economic conditions in the regional and local economies within the New England region and the Company's market area;
- events impacting the financial services industry, including high profile bank failures, and any resulting decreased confidence in banks among depositors, investors, and other counterparties, as well as competition for deposits, significant disruption, volatility and depressed valuations of equity and other securities of banks in the capital markets;
- the effects to the Company of an increasingly competitive labor market, including the possibility that the Company will have to devote significant resources to attract and retain qualified personnel;
- the instability or volatility in financial markets and unfavorable domestic or global general economic, political or business conditions, whether caused by geopolitical concerns, including the Russia/Ukraine conflict, the conflict in Israel and surrounding areas and the possible expansion of such conflicts, changes in U.S. and international trade policies, or other factors, and the potential impact of such factors on the Company and its customers, including the potential for decreases in deposits and loan demand, unanticipated loan delinquencies, loss of collateral and decreased service revenues;
- unanticipated loan delinquencies, loss of collateral, decreased service revenues, and other potential negative effects on the Company's local economies or the Company's business caused by adverse weather conditions and natural disasters, changes in climate, public health crises or other external events and any actions taken by governmental authorities in response to any such events;
- adverse changes or volatility in the local real estate market;
- changes in interest rates and any resulting impact on interest earning assets and/or interest bearing liabilities, the level of voluntary prepayments on loans and the receipt of payments on mortgage-backed securities, decreased loan demand or increased difficulty in the ability of borrowers to repay variable rate loans;
- acquisitions may not produce results at levels or within time frames originally anticipated and may result in unforeseen integration issues or impairment of goodwill and/or other intangibles;
- the effect of laws, regulations, new requirements or expectations, or additional regulatory oversight in the highly regulated financial services industry, including as a result of intensified regulatory scrutiny in the aftermath of recent bank failures and the resulting need to invest in technology to meet heightened regulatory expectations, increased costs of compliance or required adjustments to strategy;
- changes in trade, monetary and fiscal policies and laws, including interest rate policies of the Board of Governors of the Federal Reserve System;
- higher than expected tax expense, including as a result of failure to comply with general tax laws and changes in tax laws;
- increased competition in the Company's market areas, including competition that could impact deposit gathering, retention of deposits and the cost of deposits, increased competition due to the demand for innovative products and service offerings, and competition from non-depository institutions which may be subject to fewer regulatory constraints and lower cost structures;
- a deterioration in the conditions of the securities markets;
- a deterioration of the credit rating for U.S. long-term sovereign debt or uncertainties surrounding the federal budget;
- inability to adapt to changes in information technology, including changes to industry accepted delivery models driven by a migration to the internet as a means of service delivery, including any inability to effectively implement new technology-driven products, such as artificial intelligence;
- electronic or other fraudulent activity within the financial services industry, especially in the commercial banking sector;
- adverse changes in consumer spending and savings habits;
- the effect of laws and regulations regarding the financial services industry, including the need to invest in technology to meet heightened regulatory expectations or introduction of new requirements or expectations resulting in increased costs of compliance or required adjustments to strategy;
- changes in laws and regulations (including laws and regulations concerning taxes, banking, securities and insurance) generally applicable to the Company's business and the associated costs of such changes;
- the Company's potential judgments, claims, damages, penalties, fines and reputational damage resulting from pending or future litigation and regulatory and government actions;
- changes in accounting policies, practices and standards, as may be adopted by the regulatory agencies as well as the Public Company Accounting Oversight Board, the Financial Accounting Standards Board, and other accounting standard setters;
- operational risks related to cyber threats, attacks, intrusions, and fraud which could lead to interruptions or disruptions of the Company's operating systems, including systems that are customer facing, and adversely impact the Company's business;
- any unexpected material adverse changes in the Company's operations or earnings.
The Company wishes to caution readers not to place undue reliance on any forward-looking statements as the Company's business and its forward-looking statements involve substantial known and unknown risks and uncertainties described in the Company's Annual Report on Form 10-K and subsequent Quarterly Reports on Form 10-Q ("Risk Factors"). Except as required by law, the Company disclaims any intent or obligation to update publicly any such forward-looking statements, whether in response to new information, future events or otherwise. Any public statements or disclosures by the Company following this release which modify or impact any of the forward-looking statements contained in this release will be deemed to modify or supersede such statements in this release. In addition to the information set forth in this press release, you should carefully consider the Risk Factors.
This press release and the appendices attached to it contain financial information determined by methods other than in accordance with accounting principles generally accepted in the United States of America ("GAAP"). This information may include operating net income and operating earnings per share ("EPS"), operating return on average assets, operating return on average common equity, operating return on average tangible common equity, core net interest margin ("core margin"), tangible book value per share and the tangible common equity ratio.
Management reviews its core margin to determine any items that may impact the net interest margin that may be one-time in nature or not reflective of its core operating environment, such as significant purchase accounting adjustments or other adjustments such as nonaccrual interest reversals/recoveries and prepayment penalties. Management believes that adjusting for these items to arrive at a core margin provides additional insight into the operating environment and how management decisions impact the net interest margin.
Management also supplements its evaluation of financial performance with analysis of tangible book value per share (which is computed by dividing stockholders' equity less goodwill and identifiable intangible assets, or "tangible common equity," by common shares outstanding), the tangible common equity ratio (which is computed by dividing tangible common equity by "tangible assets," defined as total assets less goodwill and other intangibles), and return on average tangible common equity (which is computed by dividing net income by average tangible common equity). The Company has included information on tangible book value per share, the tangible common equity ratio and return on average tangible common equity because management believes that investors may find it useful to have access to the same analytical tools used by management. As a result of merger and acquisition activity, the Company has recognized goodwill and other intangible assets in conjunction with business combination accounting principles. Excluding the impact of goodwill and other intangibles in measuring asset and capital values for the ratios provided, along with other bank standard capital ratios, provides a framework to compare the capital adequacy of the Company to other companies in the financial services industry.
These non-GAAP measures should not be viewed as a substitute for operating results and other financial measures determined in accordance with GAAP. An item which management excludes when computing these non-GAAP measures can be of substantial importance to the Company's results for any particular quarter or year. The Company's non-GAAP performance measures, including operating net income, operating EPS, operating return on average assets, operating return on average common equity, core margin, tangible book value per share and the tangible common equity ratio, are not necessarily comparable to non-GAAP performance measures which may be presented by other companies.
Category: Earnings Releases
INDEPENDENT BANK CORP. FINANCIAL SUMMARY | |||||||||||||||||
CONSOLIDATED BALANCE SHEETS | |||||||||||||||||
(Unaudited, dollars in thousands) | % Change | % Change | |||||||||||||||
June 30
| March 31
| June 30
| Jun 2024 vs. | Jun 2024 vs. | |||||||||||||
Mar 2024 | Jun 2023 | ||||||||||||||||
Assets | |||||||||||||||||
Cash and due from banks | $ | 192,845 | $ | 165,331 | $ | 181,810 | 16.64 | % | 6.07 | % | |||||||
Interest-earning deposits with banks | 121,036 | 55,985 | 126,454 | 116.19 | % | (4.28 | )% | ||||||||||
Securities | |||||||||||||||||
Trading | 4,384 | 4,759 | 4,477 | (7.88 | )% | (2.08 | )% | ||||||||||
Equities | 21,028 | 22,858 | 21,800 | (8.01 | )% | (3.54 | )% | ||||||||||
Available for sale | 1,220,656 | 1,272,831 | 1,372,903 | (4.10 | )% | (11.09 | )% | ||||||||||
Held to maturity | 1,519,655 | 1,545,267 | 1,623,892 | (1.66 | )% | (6.42 | )% | ||||||||||
Total securities | 2,765,723 | 2,845,715 | 3,023,072 | (2.81 | )% | (8.51 | )% | ||||||||||
Loans held for sale | 17,850 | 11,340 | 6,577 | 57.41 | % | 171.40 | % | ||||||||||
Loans | |||||||||||||||||
Commercial and industrial | 1,602,752 | 1,580,041 | 1,723,219 | 1.44 | % | (6.99 | )% | ||||||||||
Commercial real estate | 8,151,805 | 8,108,836 | 7,812,796 | 0.53 | % | 4.34 | % | ||||||||||
Commercial construction | 786,743 | 828,900 | 1,022,796 | (5.09 | )% | (23.08 | )% | ||||||||||
Small business | 269,270 | 261,690 | 237,092 | 2.90 | % | 13.57 | % | ||||||||||
Total commercial | 10,810,570 | 10,779,467 | 10,795,903 | 0.29 | % | 0.14 | % | ||||||||||
Residential real estate | 2,439,646 | 2,420,705 | 2,221,284 | 0.78 | % | 9.83 | % | ||||||||||
Home equity - first position | 504,403 | 507,356 | 546,240 | (0.58 | )% | (7.66 | )% | ||||||||||
Home equity - subordinate positions | 612,404 | 593,230 | 549,158 | 3.23 | % | 11.52 | % | ||||||||||
Total consumer real estate | 3,556,453 | 3,521,291 | 3,316,682 | 1.00 | % | 7.23 | % | ||||||||||
Other consumer | 33,919 | 29,836 | 27,326 | 13.68 | % | 24.13 | % | ||||||||||
Total loans | 14,400,942 | 14,330,594 | 14,139,911 | 0.49 | % | 1.85 | % | ||||||||||
Less: allowance for credit losses | (150,859 | ) | (146,948 | ) | (140,647 | ) | 2.66 | % | 7.26 | % | |||||||
Net loans | 14,250,083 | 14,183,646 | 13,999,264 | 0.47 | % | 1.79 | % | ||||||||||
Federal Home Loan Bank stock | 32,738 | 46,304 | 39,488 | (29.30 | )% | (17.09 | )% | ||||||||||
Bank premises and equipment, net | 191,303 | 192,563 | 193,642 | (0.65 | )% | (1.21 | )% | ||||||||||
Goodwill | 985,072 | 985,072 | 985,072 | - | % | - | % | ||||||||||
Other intangible assets | 15,161 | 16,626 | 21,537 | (8.81 | )% | (29.60 | )% | ||||||||||
Cash surrender value of life insurance policies | 300,111 | 298,352 | 296,687 | 0.59 | % | 1.15 | % | ||||||||||
Other assets | 539,115 | 523,679 | 527,328 | 2.95 | % | 2.24 | % | ||||||||||
Total assets | $ | 19,411,037 | $ | 19,324,613 | $ | 19,400,931 | 0.45 | % | 0.05 | % | |||||||
Liabilities and Stockholders' Equity | |||||||||||||||||
Deposits | |||||||||||||||||
Noninterest-bearing demand deposits | $ | 4,418,891 | $ | 4,469,820 | $ | 4,861,092 | (1.14 | )% | (9.10 | )% | |||||||
Savings and interest checking | 5,241,154 | 5,196,195 | 5,525,223 | 0.87 | % | (5.14 | )% | ||||||||||
Money market | 3,058,109 | 2,944,221 | 3,065,520 | 3.87 | % | (0.24 | )% | ||||||||||
Time certificates of deposit | 2,691,433 | 2,432,985 | 1,796,216 | 10.62 | % | 49.84 | % | ||||||||||
Total deposits | 15,409,587 | 15,043,221 | 15,248,051 | 2.44 | % | 1.06 | % | ||||||||||
Borrowings | |||||||||||||||||
Federal Home Loan Bank borrowings | 630,527 | 962,535 | 788,479 | (34.49 | )% | (20.03 | )% | ||||||||||
Junior subordinated debentures, net | 62,859 | 62,858 | 62,857 | - | % | - | % | ||||||||||
Subordinated debentures, net | - | - | 49,933 | nm | (100.00 | )% | |||||||||||
Total borrowings | 693,386 | 1,025,393 | 901,269 | (32.38 | )% | (23.07 | )% | ||||||||||
Total deposits and borrowings | 16,102,973 | 16,068,614 | 16,149,320 | 0.21 | % | (0.29 | )% | ||||||||||
Other liabilities | 388,815 | 371,791 | 396,697 | 4.58 | % | (1.99 | )% | ||||||||||
Total liabilities | 16,491,788 | 16,440,405 | 16,546,017 | 0.31 | % | (0.33 | )% | ||||||||||
Stockholders' equity | |||||||||||||||||
Common stock | 423 | 422 | 440 | 0.24 | % | (3.86 | )% | ||||||||||
Additional paid in capital | 1,904,869 | 1,902,063 | 1,997,674 | 0.15 | % | (4.65 | )% | ||||||||||
Retained earnings | 1,128,182 | 1,101,061 | 1,009,735 | 2.46 | % | 11.73 | % | ||||||||||
Accumulated other comprehensive loss, net of tax | (114,225 | ) | (119,338 | ) | (152,935 | ) | (4.28 | )% | (25.31 | )% | |||||||
Total stockholders' equity | 2,919,249 | 2,884,208 | 2,854,914 | 1.21 | % | 2.25 | % | ||||||||||
Total liabilities and stockholders' equity | $ | 19,411,037 | $ | 19,324,613 | $ | 19,400,931 | 0.45 | % | 0.05 | % | |||||||
CONSOLIDATED STATEMENTS OF INCOME | |||||||||||||||||
(Unaudited, dollars in thousands, except per share data) | |||||||||||||||||
Three Months Ended | |||||||||||||||||
% Change | % Change | ||||||||||||||||
June 30
| March 31
| June 30
| Jun 2024 vs. | Jun 2024 vs. | |||||||||||||
Mar 2024 | Jun 2023 | ||||||||||||||||
Interest income | |||||||||||||||||
Interest on federal funds sold and short-term investments | $ | 397 | $ | 483 | $ | 3,312 | (17.81 | )% | (88.01 | )% | |||||||
Interest and dividends on securities | 13,994 | 14,232 | 15,583 | (1.67 | )% | (10.20 | )% | ||||||||||
Interest and fees on loans | 197,274 | 193,226 | 179,759 | 2.09 | % | 9.74 | % | ||||||||||
Interest on loans held for sale | 199 | 104 | 39 | 91.35 | % | 410.26 | % | ||||||||||
Total interest income | 211,864 | 208,045 | 198,693 | 1.84 | % | 6.63 | % | ||||||||||
Interest expense | |||||||||||||||||
Interest on deposits | 61,469 | 54,320 | 31,909 | 13.16 | % | 92.64 | % | ||||||||||
Interest on borrowings | 12,469 | 16,286 | 14,238 | (23.44 | )% | (12.42 | )% | ||||||||||
Total interest expense | 73,938 | 70,606 | 46,147 | 4.72 | % | 60.22 | % | ||||||||||
Net interest income | 137,926 | 137,439 | 152,546 | 0.35 | % | (9.58 | )% | ||||||||||
Provision for credit losses | 4,250 | 5,000 | 5,000 | (15.00 | )% | (15.00 | )% | ||||||||||
Net interest income after provision for credit losses | 133,676 | 132,439 | 147,546 | 0.93 | % | (9.40 | )% | ||||||||||
Noninterest income | |||||||||||||||||
Deposit account fees | 6,332 | 6,228 | 5,508 | 1.67 | % | 14.96 | % | ||||||||||
Interchange and ATM fees | 4,753 | 4,452 | 4,478 | 6.76 | % | 6.14 | % | ||||||||||
Investment management and advisory | 10,987 | 9,941 | 10,348 | 10.52 | % | 6.18 | % | ||||||||||
Mortgage banking income | 1,320 | 796 | 670 | 65.83 | % | 97.01 | % | ||||||||||
Increase in cash surrender value of life insurance policies | 2,000 | 1,928 | 1,940 | 3.73 | % | 3.09 | % | ||||||||||
Gain on life insurance benefits | - | 263 | 176 | (100.00 | )% | (100.00 | )% | ||||||||||
Loan level derivative income | 473 | 80 | 1,275 | 491.25 | % | (62.90 | )% | ||||||||||
Other noninterest income | 6,465 | 6,255 | 6,362 | 3.36 | % | 1.62 | % | ||||||||||
Total noninterest income | 32,330 | 29,943 | 30,757 | 7.97 | % | 5.11 | % | ||||||||||
Noninterest expenses | |||||||||||||||||
Salaries and employee benefits | 57,162 | 57,174 | 53,975 | (0.02 | )% | 5.90 | % | ||||||||||
Occupancy and equipment expenses | 12,472 | 13,467 | 12,385 | (7.39 | )% | 0.70 | % | ||||||||||
Data processing and facilities management | 2,405 | 2,483 | 2,530 | (3.14 | )% | (4.94 | )% | ||||||||||
FDIC assessment | 2,694 | 2,982 | 2,674 | (9.66 | )% | 0.75 | % | ||||||||||
Other noninterest expenses | 24,881 | 23,781 | 23,991 | 4.63 | % | 3.71 | % | ||||||||||
Total noninterest expenses | 99,614 | 99,887 | 95,555 | (0.27 | )% | 4.25 | % | ||||||||||
Income before income taxes | 66,392 | 62,495 | 82,748 | 6.24 | % | (19.77 | )% | ||||||||||
Provision for income taxes | 15,062 | 14,725 | 20,104 | 2.29 | % | (25.08 | )% | ||||||||||
Net Income | $ | 51,330 | $ | 47,770 | $ | 62,644 | 7.45 | % | (18.06 | )% | |||||||
Weighted average common shares (basic) | 42,468,658 | 42,553,714 | 44,129,152 | ||||||||||||||
Common share equivalents | 4,308 | 12,876 | 7,573 | ||||||||||||||
Weighted average common shares (diluted) | 42,472,966 | 42,566,590 | 44,136,725 | ||||||||||||||
Basic earnings per share | $ | 1.21 | $ | 1.12 | $ | 1.42 | 8.04 | % | (14.79 | )% | |||||||
Diluted earnings per share | $ | 1.21 | $ | 1.12 | $ | 1.42 | 8.04 | % | (14.79 | )% | |||||||
Performance ratios | |||||||||||||||||
Net interest margin (FTE) | 3.25 | % | 3.23 | % | 3.54 | % | |||||||||||
Return on average assets (calculated by dividing net income by average assets) (GAAP) | 1.07 | % | 1.00 | % | 1.29 | % | |||||||||||
Return on average common equity (calculated by dividing net income by average common equity) (GAAP) | 7.10 | % | 6.63 | % | 8.78 | % | |||||||||||
Return on average tangible common equity (Non-GAAP) (calculated by dividing net income by average tangible common equity) | 10.83 | % | 10.15 | % | 13.54 | % | |||||||||||
Noninterest income as a % of total revenue (calculated by dividing total noninterest income by net interest income plus total noninterest income) | 18.99 | % | 17.89 | % | 16.78 | % | |||||||||||
Efficiency ratio (calculated by dividing total noninterest expense by total revenue) | 58.51 | % | 59.68 | % | 52.13 | % | |||||||||||
CONSOLIDATED STATEMENTS OF INCOME | |||||||||||
(Unaudited, dollars in thousands, except per share data) | |||||||||||
Six Months Ended | |||||||||||
% Change | |||||||||||
June 30
| June 30
| Jun 2024 vs. | |||||||||
Jun 2023 | |||||||||||
Interest income | |||||||||||
Interest on federal funds sold and short-term investments | $ | 880 | $ | 3,977 | (77.87 | )% | |||||
Interest and dividends on securities | 28,226 | 30,893 | (8.63 | )% | |||||||
Interest and fees on loans | 390,500 | 350,685 | 11.35 | % | |||||||
Interest on loans held for sale | 303 | 73 | 315.07 | % | |||||||
Total interest income | 419,909 | 385,628 | 8.89 | % | |||||||
Interest expense | |||||||||||
Interest on deposits | 115,789 | 54,584 | 112.13 | % | |||||||
Interest on borrowings | 28,755 | 19,500 | 47.46 | % | |||||||
Total interest expense | 144,544 | 74,084 | 95.11 | % | |||||||
Net interest income | 275,365 | 311,544 | (11.61 | )% | |||||||
Provision for credit losses | 9,250 | 12,250 | (24.49 | )% | |||||||
Net interest income after provision for credit losses | 266,115 | 299,294 | (11.09 | )% | |||||||
Noninterest income | |||||||||||
Deposit account fees | 12,560 | 11,424 | 9.94 | % | |||||||
Interchange and ATM fees | 9,205 | 8,662 | 6.27 | % | |||||||
Investment management and advisory | 20,928 | 20,127 | 3.98 | % | |||||||
Mortgage banking income | 2,116 | 978 | 116.36 | % | |||||||
Increase in cash surrender value of life insurance policies | 3,928 | 3,794 | 3.53 | % | |||||||
Gain on life insurance benefits | 263 | 187 | 40.64 | % | |||||||
Loan level derivative income | 553 | 1,683 | (67.14 | )% | |||||||
Other noninterest income | 12,720 | 12,144 | 4.74 | % | |||||||
Total noninterest income | 62,273 | 58,999 | 5.55 | % | |||||||
Noninterest expenses | |||||||||||
Salaries and employee benefits | 114,336 | 110,950 | 3.05 | % | |||||||
Occupancy and equipment expenses | 25,939 | 25,207 | 2.90 | % | |||||||
Data processing and facilities management | 4,888 | 5,057 | (3.34 | )% | |||||||
FDIC assessment | 5,676 | 5,284 | 7.42 | % | |||||||
Other noninterest expenses | 48,662 | 47,718 | 1.98 | % | |||||||
Total noninterest expenses | 199,501 | 194,216 | 2.72 | % | |||||||
Income before income taxes | 128,887 | 164,077 | (21.45 | )% | |||||||
Provision for income taxes | 29,787 | 40,186 | (25.88 | )% | |||||||
Net Income | $ | 99,100 | $ | 123,891 | (20.01 | )% | |||||
Weighted average common shares (basic) | 42,511,186 | 44,564,209 | |||||||||
Common share equivalents | 8,592 | 13,568 | |||||||||
Weighted average common shares (diluted) | 42,519,778 | 44,577,777 | |||||||||
Basic earnings per share | $ | 2.33 | $ | 2.78 | (16.19 | )% | |||||
Diluted earnings per share | $ | 2.33 | $ | 2.78 | (16.19 | )% | |||||
Performance ratios | |||||||||||
Net interest margin (FTE) | 3.24 | % | 3.67 | % | |||||||
Return on average assets (GAAP) (calculated by dividing net income by average assets) | 1.03 | % | 1.29 | % | |||||||
Return on average common equity (GAAP) (calculated by dividing net income by average common equity) | 6.87 | % | 8.70 | % | |||||||
Return on average tangible common equity (Non-GAAP) (calculated by dividing net income by average tangible common equity) | 10.49 | % | 13.42 | % | |||||||
Noninterest income as a % of total revenue (calculated by dividing total noninterest income by net interest income plus total noninterest income) | 18.44 | % | 15.92 | % | |||||||
Efficiency ratio (GAAP) (calculated by dividing total noninterest expense by total revenue) | 59.09 | % | 52.41 | % | |||||||
nm = not meaningful |
ASSET QUALITY | ||||||||||||
(Unaudited, dollars in thousands) | Nonperforming Assets At | |||||||||||
June 30
| March 31
| June 30
| ||||||||||
Nonperforming loans | ||||||||||||
Commercial & industrial loans | $ | 17,793 | $ | 17,640 | $ | 3,235 | ||||||
Commercial real estate loans | 23,479 | 24,213 | 29,910 | |||||||||
Small business loans | 437 | 316 | 348 | |||||||||
Residential real estate loans | 10,629 | 9,947 | 8,179 | |||||||||
Home equity | 5,090 | 4,805 | 3,944 | |||||||||
Other consumer | 23 | 20 | 86 | |||||||||
Total nonperforming loans | 57,451 | 56,941 | 45,702 | |||||||||
Other real estate owned | 110 | 110 | 110 | |||||||||
Total nonperforming assets | $ | 57,561 | $ | 57,051 | $ | 45,812 | ||||||
Nonperforming loans/gross loans | 0.40 | % | 0.40 | % | 0.32 | % | ||||||
Nonperforming assets/total assets | 0.30 | % | 0.30 | % | 0.24 | % | ||||||
Allowance for credit losses/nonperforming loans | 262.59 | % | 258.07 | % | 307.75 | % | ||||||
Allowance for credit losses/total loans | 1.05 | % | 1.03 | % | 0.99 | % | ||||||
Delinquent loans/total loans | 0.37 | % | 0.52 | % | 0.30 | % | ||||||
Nonperforming Assets Reconciliation for the Three Months Ended | ||||||||||||
June 30
| March 31
| June 30
| ||||||||||
Nonperforming assets beginning balance | $ | 57,051 | $ | 54,493 | $ | 56,235 | ||||||
New to nonperforming | 6,201 | 19,258 | 18,018 | |||||||||
Loans charged-off | (808 | ) | (881 | ) | (23,767 | ) | ||||||
Loans paid-off | (3,458 | ) | (6,982 | ) | (3,984 | ) | ||||||
Loans restored to performing status | (1,429 | ) | (8,855 | ) | (680 | ) | ||||||
Other | 4 | 18 | (10 | ) | ||||||||
Nonperforming assets ending balance | $ | 57,561 | $ | 57,051 | $ | 45,812 | ||||||
Net Charge-Offs (Recoveries) | ||||||||||||||||||||
Three Months Ended | Six Months Ended | |||||||||||||||||||
June 30
| March 31
| June 30
| June 30
| June 30
| ||||||||||||||||
Net charge-offs (recoveries) | ||||||||||||||||||||
Commercial and industrial loans | $ | (2 | ) | $ | (85 | ) | $ | 23,174 | $ | (87 | ) | $ | 23,450 | |||||||
Commercial real estate loans | - | - | - | - | - | |||||||||||||||
Small business loans | 48 | 70 | 51 | 118 | 48 | |||||||||||||||
Home equity | (137 | ) | (133 | ) | (10 | ) | (270 | ) | (26 | ) | ||||||||||
Other consumer | 430 | 422 | 269 | 852 | 550 | |||||||||||||||
Total net charge-offs | $ | 339 | $ | 274 | $ | 23,484 | $ | 613 | $ | 24,022 | ||||||||||
Net charge-offs to average loans (annualized) | 0.01 | % | 0.01 | % | 0.67 | % | 0.01 | % | 0.35 | % | ||||||||||
BALANCE SHEET AND CAPITAL RATIOS | ||||||||||||
June 30
| March 31
| June 30
| ||||||||||
Gross loans/total deposits | 93.45 | % | 95.26 | % | 92.73 | % | ||||||
Common equity tier 1 capital ratio (1) | 14.42 | % | 14.16 | % | 14.06 | % | ||||||
Tier 1 leverage capital ratio (1) | 11.09 | % | 10.95 | % | 10.85 | % | ||||||
Common equity to assets ratio GAAP | 15.04 | % | 14.92 | % | 14.72 | % | ||||||
Tangible common equity to tangible assets ratio (2) | 10.42 | % | 10.27 | % | 10.05 | % | ||||||
Book value per share GAAP | $ | 68.74 | $ | 67.94 | $ | 64.69 | ||||||
Tangible book value per share (2) | $ | 45.19 | $ | 44.34 | $ | 41.88 | ||||||
(1) | Estimated number for June 30, 2024. | |
(2) | See Appendix A for detailed reconciliation from GAAP to Non-GAAP ratios. |
INDEPENDENT BANK CORP. SUPPLEMENTAL FINANCIAL INFORMATION | |||||||||||||||||||||||||||
(Unaudited, dollars in thousands) | Three Months Ended | ||||||||||||||||||||||||||
June 30, 2024 | March 31, 2024 | June 30, 2023 | |||||||||||||||||||||||||
Interest | Interest | Interest | |||||||||||||||||||||||||
Average | Earned/ | Yield/ | Average | Earned/ | Yield/ | Average | Earned/ | Yield/ | |||||||||||||||||||
Balance | Paid (1) | Rate | Balance | Paid (1) | Rate | Balance | Paid (1) | Rate | |||||||||||||||||||
Interest-earning assets | |||||||||||||||||||||||||||
Interest-earning deposits with banks, federal funds sold, and short term investments | $ | 47,598 | $ | 397 | 3.35 | % | $ | 50,583 | $ | 483 | 3.84 | % | $ | 270,443 | $ | 3,312 | 4.91 | % | |||||||||
Securities | |||||||||||||||||||||||||||
Securities - trading | 4,739 | - | - | % | 4,779 | - | - | % | 4,487 | - | - | % | |||||||||||||||
Securities - taxable investments | 2,793,145 | 13,992 | 2.01 | % | 2,867,460 | 14,231 | 2.00 | % | 3,071,752 | 15,581 | 2.03 | % | |||||||||||||||
Securities - nontaxable investments (1) | 189 | 2 | 4.26 | % | 190 | 2 | 4.23 | % | 191 | 2 | 4.20 | % | |||||||||||||||
Total securities | $ | 2,798,073 | $ | 13,994 | 2.01 | % | $ | 2,872,429 | $ | 14,233 | 1.99 | % | $ | 3,076,430 | $ | 15,583 | 2.03 | % | |||||||||
Loans held for sale | 12,610 | 199 | 6.35 | % | 7,095 | 104 | 5.90 | % | 2,977 | 39 | 5.25 | % | |||||||||||||||
Loans | |||||||||||||||||||||||||||
Commercial and industrial (1) | 1,583,858 | 28,305 | 7.19 | % | 1,559,978 | 27,629 | 7.12 | % | 1,686,348 | 29,451 | 7.00 | % | |||||||||||||||
Commercial real estate (1) | 8,112,683 | 104,449 | 5.18 | % | 8,110,813 | 102,054 | 5.06 | % | 7,803,702 | 91,813 | 4.72 | % | |||||||||||||||
Commercial construction | 834,876 | 15,451 | 7.44 | % | 842,480 | 15,421 | 7.36 | % | 1,044,650 | 17,212 | 6.61 | % | |||||||||||||||
Small business | 265,273 | 4,376 | 6.63 | % | 257,022 | 4,160 | 6.51 | % | 230,371 | 3,501 | 6.10 | % | |||||||||||||||
Total commercial | 10,796,690 | 152,581 | 5.68 | % | 10,770,293 | 149,264 | 5.57 | % | 10,765,071 | 141,977 | 5.29 | % | |||||||||||||||
Residential real estate | 2,427,635 | 26,472 | 4.39 | % | 2,418,617 | 26,083 | 4.34 | % | 2,153,563 | 20,943 | 3.90 | % | |||||||||||||||
Home equity | 1,109,979 | 18,826 | 6.82 | % | 1,094,856 | 18,444 | 6.78 | % | 1,094,329 | 17,394 | 6.38 | % | |||||||||||||||
Total consumer real estate | 3,537,614 | 45,298 | 5.15 | % | 3,513,473 | 44,527 | 5.10 | % | 3,247,892 | 38,337 | 4.73 | % | |||||||||||||||
Other consumer | 31,019 | 593 | 7.69 | % | 30,669 | 609 | 7.99 | % | 28,863 | 566 | 7.87 | % | |||||||||||||||
Total loans | $ | 14,365,323 | $ | 198,472 | 5.56 | % | $ | 14,314,435 | $ | 194,400 | 5.46 | % | $ | 14,041,826 | $ | 180,880 | 5.17 | % | |||||||||
Total interest-earning assets | $ | 17,223,604 | $ | 213,062 | 4.98 | % | $ | 17,244,542 | $ | 209,220 | 4.88 | % | $ | 17,391,676 | $ | 199,814 | 4.61 | % | |||||||||
Cash and due from banks | 178,558 | 177,506 | 178,707 | ||||||||||||||||||||||||
Federal Home Loan Bank stock | 41,110 | 47,203 | 44,619 | ||||||||||||||||||||||||
Other assets | 1,876,081 | 1,809,640 | 1,826,879 | ||||||||||||||||||||||||
Total assets | $ | 19,319,353 | $ | 19,278,891 | $ | 19,441,881 | |||||||||||||||||||||
Interest-bearing liabilities | |||||||||||||||||||||||||||
Deposits | |||||||||||||||||||||||||||
Savings and interest checking accounts | $ | 5,166,340 | $ | 16,329 | 1.27 | % | $ | 5,165,866 | $ | 14,856 | 1.16 | % | $ | 5,512,995 | $ | 9,425 | 0.69 | % | |||||||||
Money market | 2,909,503 | 17,409 | 2.41 | % | 2,844,014 | 15,991 | 2.26 | % | 3,044,486 | 12,331 | 1.62 | % | |||||||||||||||
Time deposits | 2,579,336 | 27,731 | 4.32 | % | 2,297,219 | 23,473 | 4.11 | % | 1,630,015 | 10,153 | 2.50 | % | |||||||||||||||
Total interest-bearing deposits | $ | 10,655,179 | $ | 61,469 | 2.32 | % | $ | 10,307,099 | $ | 54,320 | 2.12 | % | $ | 10,187,496 | $ | 31,909 | 1.26 | % | |||||||||
Borrowings | |||||||||||||||||||||||||||
Federal Home Loan Bank borrowings | 957,268 | 11,329 | 4.76 | % | 1,185,296 | 14,631 | 4.96 | % | 1,068,585 | 12,576 | 4.72 | % | |||||||||||||||
Junior subordinated debentures | 62,859 | 1,140 | 7.29 | % | 62,858 | 1,147 | 7.34 | % | 62,856 | 1,044 | 6.66 | % | |||||||||||||||
Subordinated debentures | - | - | - | % | 40,651 | 508 | 5.03 | % | 49,921 | 618 | 4.97 | % | |||||||||||||||
Total borrowings | $ | 1,020,127 | $ | 12,469 | 4.92 | % | $ | 1,288,805 | $ | 16,286 | 5.08 | % | $ | 1,181,362 | $ | 14,238 | 4.83 | % | |||||||||
Total interest-bearing liabilities | $ | 11,675,306 | $ | 73,938 | 2.55 | % | $ | 11,595,904 | $ | 70,606 | 2.45 | % | $ | 11,368,858 | $ | 46,147 | 1.63 | % | |||||||||
Noninterest-bearing demand deposits | 4,360,897 | 4,439,107 | 4,873,767 | ||||||||||||||||||||||||
Other liabilities | 375,629 | 347,573 | 336,210 | ||||||||||||||||||||||||
Total liabilities | $ | 16,411,832 | $ | 16,382,584 | $ | 16,578,835 | |||||||||||||||||||||
Stockholders' equity | 2,907,521 | 2,896,307 | 2,863,046 | ||||||||||||||||||||||||
Total liabilities and stockholders' equity | $ | 19,319,353 | $ | 19,278,891 | $ | 19,441,881 | |||||||||||||||||||||
Net interest income | $ | 139,124 | $ | 138,614 | $ | 153,667 | |||||||||||||||||||||
Interest rate spread (2) | 2.43 | % | 2.43 | % | 2.98 | % | |||||||||||||||||||||
Net interest margin (3) | 3.25 | % | 3.23 | % | 3.54 | % | |||||||||||||||||||||
Supplemental Information | |||||||||||||||||||||||||||
Total deposits, including demand deposits | $ | 15,016,076 | $ | 61,469 | $ | 14,746,206 | $ | 54,320 | $ | 15,061,263 | $ | 31,909 | |||||||||||||||
Cost of total deposits | 1.65 | % | 1.48 | % | 0.85 | % | |||||||||||||||||||||
Total funding liabilities, including demand deposits | $ | 16,036,203 | $ | 73,938 | $ | 16,035,011 | $ | 70,606 | $ | 16,242,625 | $ | 46,147 | |||||||||||||||
Cost of total funding liabilities | 1.85 | % | 1.77 | % | 1.14 | % | |||||||||||||||||||||
(1) The total amount of adjustment to present interest income and yield on a fully tax-equivalent basis was $1.2 million for both the three months ended June 30, 2024 and March 31, 2024, and $1.1 million for the three months ended and June 30, 2023, determined by applying the Company's marginal tax rates in effect during each respective quarter. |
(2) Interest rate spread represents the difference between weighted average yield on interest-earning assets and the weighted average cost of interest-bearing liabilities. |
(3) Net interest margin represents annualized net interest income as a percentage of average interest-earning assets. |
Six Months Ended | ||||||||||||||||||
June 30, 2024 | June 30, 2023 | |||||||||||||||||
Interest | Interest | |||||||||||||||||
Average | Earned/ | Yield/ | Average | Earned/ | Yield/ | |||||||||||||
Balance | Paid | Rate | Balance | Paid | Rate | |||||||||||||
Interest-earning assets | ||||||||||||||||||
Interest earning deposits with banks, federal funds sold, and short term investments | $ | 49,091 | $ | 880 | 3.60 | % | $ | 172,569 | $ | 3,977 | 4.65 | % | ||||||
Securities | ||||||||||||||||||
Securities - trading | 4,759 | - | - | % | 4,292 | - | - | % | ||||||||||
Securities - taxable investments | 2,830,302 | 28,223 | 2.01 | % | 3,094,263 | 30,890 | 2.01 | % | ||||||||||
Securities - nontaxable investments (1) | 190 | 4 | 4.23 | % | 192 | 4 | 4.20 | % | ||||||||||
Total securities | $ | 2,835,251 | $ | 28,227 | 2.00 | % | $ | 3,098,747 | $ | 30,894 | 2.01 | % | ||||||
Loans held for sale | 9,853 | 303 | 6.18 | % | 2,727 | 73 | 5.40 | % | ||||||||||
Loans | ||||||||||||||||||
Commercial and industrial (1) | 1,571,918 | 55,911 | 7.15 | % | 1,652,527 | 56,023 | 6.84 | % | ||||||||||
Commercial real estate (1) | 8,111,748 | 206,526 | 5.12 | % | 7,788,304 | 181,394 | 4.70 | % | ||||||||||
Commercial construction | 838,678 | 30,872 | 7.40 | % | 1,089,311 | 33,679 | 6.23 | % | ||||||||||
Small business | 261,147 | 8,536 | 6.57 | % | 226,479 | 6,720 | 5.98 | % | ||||||||||
Total commercial | 10,783,491 | 301,845 | 5.63 | % | 10,756,621 | 277,816 | 5.21 | % | ||||||||||
Residential real estate | 2,423,126 | 52,555 | 4.36 | % | 2,105,311 | 40,301 | 3.86 | % | ||||||||||
Home equity | 1,102,418 | 37,270 | 6.80 | % | 1,091,707 | 33,638 | 6.21 | % | ||||||||||
Total consumer real estate | 3,525,544 | 89,825 | 5.12 | % | 3,197,018 | 73,939 | 4.66 | % | ||||||||||
Other consumer | 30,844 | 1,202 | 7.84 | % | 30,940 | 1,143 | 7.45 | % | ||||||||||
Total loans | $ | 14,339,879 | $ | 392,872 | 5.51 | % | $ | 13,984,579 | $ | 352,898 | 5.09 | % | ||||||
Total interest-earning assets | $ | 17,234,074 | $ | 422,282 | 4.93 | % | $ | 17,258,622 | $ | 387,842 | 4.53 | % | ||||||
Cash and due from banks | 178,032 | 180,047 | ||||||||||||||||
Federal Home Loan Bank stock | 44,157 | 29,749 | ||||||||||||||||
Other assets | 1,842,859 | 1,835,669 | ||||||||||||||||
Total assets | $ | 19,299,122 | $ | 19,304,087 | ||||||||||||||
Interest-bearing liabilities | ||||||||||||||||||
Deposits | ||||||||||||||||||
Savings and interest checking accounts | $ | 5,166,103 | $ | 31,185 | 1.21 | % | $ | 5,628,535 | $ | 16,898 | 0.61 | % | ||||||
Money market | 2,876,759 | 33,400 | 2.33 | % | 3,143,355 | 22,724 | 1.46 | % | ||||||||||
Time deposits | 2,438,277 | 51,204 | 4.22 | % | 1,462,929 | 14,962 | 2.06 | % | ||||||||||
Total interest-bearing deposits | $ | 10,481,139 | $ | 115,789 | 2.22 | % | $ | 10,234,819 | $ | 54,584 | 1.08 | % | ||||||
Borrowings | ||||||||||||||||||
Federal Home Loan Bank borrowings | 1,071,282 | 25,960 | 4.87 | % | 685,626 | 16,220 | 4.77 | % | ||||||||||
Junior subordinated debentures | 62,858 | 2,287 | 7.32 | % | 62,856 | 2,045 | 6.56 | % | ||||||||||
Subordinated debentures | 20,326 | 508 | 5.03 | % | 49,909 | 1,235 | 4.99 | % | ||||||||||
Total borrowings | $ | 1,154,466 | $ | 28,755 | 5.01 | % | $ | 798,391 | $ | 19,500 | 4.93 | % | ||||||
Total interest-bearing liabilities | $ | 11,635,605 | $ | 144,544 | 2.50 | % | $ | 11,033,210 | $ | 74,084 | 1.35 | % | ||||||
Noninterest-bearing demand deposits | 4,400,002 | 5,045,694 | ||||||||||||||||
Other liabilities | 361,601 | 355,097 | ||||||||||||||||
Total liabilities | $ | 16,397,208 | $ | 16,434,001 | ||||||||||||||
Stockholders' equity | 2,901,914 | 2,870,086 | ||||||||||||||||
Total liabilities and stockholders' equity | $ | 19,299,122 | $ | 19,304,087 | ||||||||||||||
Net interest income | $ | 277,738 | $ | 313,758 | ||||||||||||||
Interest rate spread (2) | 2.43 | % | 3.18 | % | ||||||||||||||
Net interest margin (3) | 3.24 | % | 3.67 | % | ||||||||||||||
Supplemental Information | ||||||||||||||||||
Total deposits, including demand deposits | $ | 14,881,141 | $ | 115,789 | $ | 15,280,513 | $ | 54,584 | ||||||||||
Cost of total deposits | 1.56 | % | 0.72 | % | ||||||||||||||
Total funding liabilities, including demand deposits | $ | 16,035,607 | $ | 144,544 | $ | 16,078,904 | $ | 74,084 | ||||||||||
Cost of total funding liabilities | 1.81 | % | 0.93 | % | ||||||||||||||
(1) The total amount of adjustment to present interest income and yield on a fully tax-equivalent basis is $2.4 million and $2.2 million for the six months ended June 30, 2024 and 2023, respectively. |
(2) Interest rate spread represents the difference between weighted average yield on interest-earning assets and the weighted average cost of interest-bearing liabilities. |
(3) Net interest margin represents annualized net interest income as a percentage of average interest-earning assets. |
Certain amounts in prior year financial statements have been reclassified to conform to the current year's presentation. |
APPENDIX A: NON-GAAP Reconciliation of Balance Sheet Metrics
(Unaudited, dollars in thousands, except per share data)
The following table summarizes the calculation of the Company's tangible common equity to tangible assets ratio and tangible book value per share, at the dates indicated:
June 30
| March 31
| June 30
| |||||||||||
Tangible common equity | (Dollars in thousands, except per share data) | ||||||||||||
Stockholders' equity (GAAP) | $ | 2,919,249 | $ | 2,884,208 | $ | 2,854,914 | (a) | ||||||
Less: Goodwill and other intangibles | 1,000,233 | 1,001,698 | 1,006,609 | ||||||||||
Tangible common equity (Non-GAAP) | $ | 1,919,016 | $ | 1,882,510 | $ | 1,848,305 | (b) | ||||||
Tangible assets | |||||||||||||
Assets (GAAP) | $ | 19,411,037 | $ | 19,324,613 | $ | 19,400,931 | (c) | ||||||
Less: Goodwill and other intangibles | 1,000,233 | 1,001,698 | 1,006,609 | ||||||||||
Tangible assets (Non-GAAP) | $ | 18,410,804 | $ | 18,322,915 | $ | 18,394,322 | (d) | ||||||
Common Shares | 42,469,867 | 42,452,457 | 44,130,901 | (e) | |||||||||
Common equity to assets ratio (GAAP) | 15.04 | % | 14.92 | % | 14.72 | % | (a/c) | ||||||
Tangible common equity to tangible assets ratio (Non-GAAP) | 10.42 | % | 10.27 | % | 10.05 | % | (b/d) | ||||||
Book value per share (GAAP) | $ | 68.74 | $ | 67.94 | $ | 64.69 | (a/e) | ||||||
Tangible book value per share (Non-GAAP) | $ | 45.19 | $ | 44.34 | $ | 41.88 | (b/e) | ||||||
APPENDIX B: Non-GAAP Reconciliation of Earnings Metrics
(Unaudited, dollars in thousands)
The following table summarizes the calculation of the Company's return on average tangible common equity for the periods indicated:
Three Months Ended | Six Months Ended | ||||||||||||||||||
June 30
| March 31
| June 30
| June 30
| June 30
| |||||||||||||||
Net income (GAAP) | $ | 51,330 | $ | 47,770 | $ | 62,644 | $ | 99,100 | $ | 123,891 | |||||||||
Average common equity (GAAP) | $ | 2,907,521 | $ | 2,896,307 | $ | 2,863,046 | $ | 2,901,914 | $ | 2,870,086 | |||||||||
Less: Average goodwill and other intangibles | 1,000,972 | 1,002,506 | 1,007,500 | 1,001,739 | 1,008,415 | ||||||||||||||
Tangible average tangible common equity (Non-GAAP) | $ | 1,906,549 | $ | 1,893,801 | $ | 1,855,546 | $ | 1,900,175 | $ | 1,861,671 | |||||||||
Return on average tangible common equity (Non-GAAP) (calculated by dividing annualized net income by average tangible common equity) | 10.83 | % | 10.15 | % | 13.54 | % | 10.49 | % | 13.42 | % | |||||||||
APPENDIX C: Net Interest Margin Analysis & Non-GAAP Reconciliation of Core Margin
Three Months Ended | |||||||||||||||||
June 30, 2024 | March 31, 2024 | ||||||||||||||||
Volume | Interest | Margin
| Volume | Interest | Margin
| ||||||||||||
(Dollars in thousands) | |||||||||||||||||
Reported total interest earning assets | $ | 17,223,604 | $ | 139,124 | 3.25 | % | $ | 17,244,542 | $ | 138,614 | 3.23 | % | |||||
Acquisition fair value marks: | |||||||||||||||||
Loan accretion | (74 | ) | (109 | ) | |||||||||||||
CD amortization | - | 9 | |||||||||||||||
(74 | ) | - | % | (100 | ) | - | % | ||||||||||
Nonaccrual interest, net | (131 | ) | - | % | (341 | ) | (0.01 | )% | |||||||||
Other noncore adjustments | (4,020 | ) | (499 | ) | (0.01 | )% | (4,460 | ) | (582 | ) | (0.01 | )% | |||||
Core margin (Non-GAAP) | $ | 17,219,584 | $ | 138,420 | 3.24 | % | $ | 17,240,082 | $ | 137,591 | 3.21 | % | |||||
Contacts
Jeffrey Tengel
President and Chief Executive Officer
(781) 982-6144
Mark J. Ruggiero
Chief Financial Officer and
Executive Vice President of Consumer Lending
(781) 982-6281
