Recent Quotes View Full List My Watchlist Create Watchlist Indicators DJI Nasdaq Composite SPX Gold Crude Oil EL&P Market Index Markets Stocks ETFs Tools Overview News Currencies International Treasuries Independent Bank Corp. Reports Fourth Quarter Net Income of $54.8 Million By: Independent Bank Corp. via Business Wire January 18, 2024 at 16:15 PM EST Completes solid performance in 2023 Independent Bank Corp. (Nasdaq Global Select Market: INDB), parent of Rockland Trust Company, today announced 2023 fourth quarter net income of $54.8 million, or $1.26 per diluted share, a decrease of $6.0 million, or 9.9%, compared to the prior quarter. Full year net income was $239.5 million, or $5.42 on a diluted earnings per share basis, a decrease of $24.3 million, or 9.2%, as compared to the prior year. In 2023, full year operating net income was also $239.5 million, or $5.42 on a diluted earnings per share basis, as no adjustments were recognized. In 2022, full year operating net income was $268.9 million, or $5.80 on a diluted earnings per share basis, which excluded non-core adjustments associated with the Company's fourth quarter 2021 acquisition of Meridian Bancorp, Inc. ("Meridian") and its subsidiary, East Boston Savings Bank. 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. The Company generated a return on average assets and a return on average common equity of 1.13% and 7.51%, respectively, for the fourth quarter of 2023, as compared to 1.25% and 8.35%, respectively, for the prior quarter. For the full year 2023, the Company generated a return on average assets and return on average common equity of 1.24% and 8.31%, respectively, as compared to 1.33% and 9.05%, respectively, for 2022, or 1.24% and 8.31%, respectively, on an operating basis for 2023, compared to 1.35% and 9.22%, respectively, on an operating basis for 2022. “The dedication of my colleagues and their unrelenting focus on each relationship, day in and day out, paved the way for the solid financial results we achieved throughout this past year,” said Jeffrey Tengel, the Chief Executive Officer of Independent Bank Corp. and Rockland Trust Company. “I am confident that our core fundamentals position us well for continued success heading into 2024 and beyond.” BALANCE SHEET Total assets of $19.3 billion at December 31, 2023 remained relatively consistent with the prior quarter and increased by $53.2 million, or 0.3%, as compared to December 31, 2022. Total loans at December 31, 2023 of $14.3 billion increased by $53.8 million, or 0.4% (1.5% annualized), compared to the prior quarter level. The increase was driven primarily by consumer real estate, which increased $88.7 million, or 2.6% (10.3% annualized) for the quarter, largely attributable to adjustable-rate residential mortgages retained on the balance sheet. Total commercial loans decreased by $37.0 million, or 0.3% (1.4% annualized), compared to the prior quarter, primarily reflecting disciplined new origination activity, offset by commercial and industrial payoffs and decreased line utilization. The small business portfolio continued its steady growth and has risen by 15.0% since December 31, 2022. Deposit balances of $14.9 billion at December 31, 2023 decreased by $194.0 million, or 1.3%, from September 30, 2023, driven primarily by seasonal business cash flows. Though some level of product remixing persists, total noninterest bearing demand deposits comprised a healthy 30.7% of total deposits at December 31, 2023. Core deposits, inclusive of reciprocal money market deposits, represented 84.6% of total deposits at December 31, 2023 as compared to 86.0% at September 30, 2023. The total cost of deposits for the fourth quarter increased 24 basis points to 1.31% compared to the prior quarter, reflective of ongoing customer preference for higher yielding accounts. In conjunction with the decline in deposit balances, the Company's Federal Home Loan Bank borrowings increased by $218.0 million, or 21.8%, during the fourth quarter of 2023 to serve as a funding source for stock buyback activity and net loan growth during the quarter. The securities portfolio decreased by $43.1 million, or 1.4%, compared to September 30, 2023, driven primarily by paydowns, calls, and maturities which were partially offset by unrealized gains of $45.2 million in the available for sale portfolio. Total securities represented 15.1% of total assets at December 31, 2023, as compared to 15.4% at September 30, 2023. During the fourth quarter of 2023, the Company executed on its previously announced $100 million stock repurchase plan, buying back 1.3 million shares of common stock for $69.0 million at an average price per share of $53.73. Stockholders' equity at December 31, 2023 remained generally consistent when compared to September 30, 2023, as the impact of the share repurchase program was offset by strong earnings retention and 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 14.96% at December 31, 2023 represented an increase of 6 basis points, or 0.4%, from September 30, 2023 and was consistent with the level at December 31, 2022. The Company's book value per share increased by $2.16, or 3.3%, to $67.53 at December 31, 2023 as compared to the prior quarter. The Company's tangible book value per share at December 31, 2023 rose by $1.53, or 3.6%, from the prior quarter to $44.13, and represented an increase of 7.3% from the year ago period. The Company's ratio of tangible common equity to tangible assets of 10.31% at December 31, 2023 represented an increase of 7 basis points from the prior quarter and an increase of 5 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 fourth quarter of 2023 decreased 3.2% to $145.1 million compared to $149.9 million for the prior quarter, as rising deposit costs continued to counter the benefit of repriced assets resulting in a reduction in net interest margin of 9 basis points to 3.38% for the quarter. The core margin (excluding purchase accounting and other non-core items) was 3.35% for the fourth quarter, representing a reduction of 12 basis points as compared to the prior quarter. Please refer to Appendix C for additional details regarding the net interest margin and Non-GAAP reconciliation of core margin. NONINTEREST INCOME Noninterest income of $32.1 million for the fourth quarter of 2023 represented a decrease of $1.5 million, or 4.4%, as compared to the prior quarter. Significant changes in noninterest income for the fourth quarter of 2023 compared to the prior quarter included the following: Investment management income decreased by $428,000, or 4.2%, primarily driven by lower insurance commissions. However, total assets under administration increased by $417.4 million, or 6.8%, to a record level of $6.5 billion at December 31, 2023, driving higher managed fee income quarter over quarter. The Company received proceeds on life insurance policies resulting in gains of $180,000 for the fourth quarter, as compared to gains of $1.9 million in the prior quarter. Other noninterest income increased by $738,000, or 10.4%, primarily due to unrealized gains on equity securities and discounted purchases of tax credits, as well as outsized loan fees recognized during the third quarter of 2023. NONINTEREST EXPENSE Noninterest expense of $100.7 million for the fourth quarter of 2023 represented an increase of $3.0 million, or 3.0%, as compared to the prior quarter. Significant changes in noninterest expense for the fourth quarter compared to the prior quarter included the following: Salaries and employee benefits increased by $1.6 million, or 2.9%, due primarily to timing of incentive compensation. Occupancy and equipment expenses increased by $733,000, or 5.9%, due primarily to one-time termination costs associated with two leased locations related to the 2021 Meridian acquisition. FDIC assessment increased $1.2 million, or 44.6%, from the prior quarter, and includes a one-time $1.1 million special assessment implemented by the FDIC to recover losses incurred by the Deposit Insurance Fund in 2023. Other noninterest expense decreased by $593,000, or 2.3%, due primarily to decreases in consultant fees, unrealized losses on equity securities, and card issuance costs, partially offset by increases in check fraud losses, software maintenance and legal costs. The Company’s tax rate for the fourth quarter of 2023 decreased to 22.72%, compared to 24.12% for the prior quarter. The fourth quarter decline was due to the recognition of discrete items in the quarter associated with low income housing tax investments and the release of certain tax reserves in conjunction with the final 2022 tax return filing. ASSET QUALITY The fourth quarter provision for credit losses was consistent with the prior quarter at $5.5 million. Net charge-offs declined to $3.8 million for the fourth quarter of 2023 compared to $5.6 million in the prior quarter and were largely attributable to one partial charge-off of a commercial real estate loan and general overdraft loan charge-offs. Nonperforming loans increased to $54.4 million, or 0.38% of total loans at December 31, 2023, as compared to $39.2 million, or 0.28% of total loans at September 30, 2023, driven primarily by the migration of two commercial loans totaling $25.9 million, offset by paydowns during the quarter. Delinquency as a percentage of total loans increased 22 basis points from the prior quarter to 0.44% at December 31, 2023. The allowance for credit losses on total loans increased slightly to $142.2 million at December 31, 2023 compared to $140.6 million at September 30, 2023, or 1.00% and 0.99% of total loans, at December 31, 2023 and September 30, 2023, 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 fourth quarter earnings at 10:00 a.m. Eastern Time on Friday, January 19, 2024. Internet access to the call is available on the Company’s website at https://INDB.RocklandTrust.com or via telephonic access by dial-in at 1-888-336-7153 reference: INDB. A replay of the call will be available by calling 1-877-344-7529, Replay Conference Number: 9516407 and will be available through January 26, 2024. Additionally, a webcast replay will be available on the Company's website until January 19, 2025. ABOUT INDEPENDENT BANK CORP. Independent Bank Corp. (NASDAQ Global Select Market: INDB) is the holding company for Rockland Trust Company, a full-service commercial bank headquartered in 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 was named to The Boston Globe's "Top Places to Work" 2023 list, an honor earned for the 15th consecutive year. 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 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: further weakening in the United States economy in general and the regional and local economies within the New England region and the Company’s market area; the effects to the Company or its customers of inflationary pressures, labor market shortages and supply chain issues; the instability or volatility in financial markets and unfavorable general economic or business conditions, globally, nationally or regionally, whether caused by geopolitical concerns, including the Russia/Ukraine conflict, the conflict in Israel and surrounding areas and the possible expansion of such conflicts, recent disruptions in the banking industry, or other factors, and the potential impact of unfavorable economic conditions on the Company and its customers, including the potential for decreases in deposits and loan demand, unanticipated loan delinquencies, loss of collateral and decreased service revenues; unanticipated loan delinquencies, loss of collateral, decreased service revenues, and other potential negative effects on our business caused by severe weather, pandemics or other external events; adverse changes or volatility in the local real estate market; rising interest rates and any resultant adverse changes in asset quality, increased credit risks, decreased loan demand, and/or refinancing challenges, which in turn could further lead to unanticipated credit deterioration in the Company's loan portfolio, including with respect to one or more large commercial relationships; acquisitions may not produce results at levels or within time frames originally anticipated and may result in unforeseen integration issues or impairment of goodwill and/or other intangibles; additional regulatory oversight and related compliance costs; changes in trade, monetary and fiscal policies and laws, including interest rate policies of the Board of Governors of the Federal Reserve System; higher than expected tax expense, including as a result of failure to comply with general tax laws and changes in tax laws; changes in market interest rates for interest earning assets and/or interest bearing liabilities; increased competition in the Company’s market areas, including competition that could impact deposit gathering, retention of deposits and the cost of deposits, increased competition due to the demand for innovative products and service offerings, and competition from non-depository institutions which may be subject to fewer regulatory constraints and lower cost structures; adverse weather, changes in climate, natural disasters, including the risk of floods and fire; the emergence of widespread health emergencies or pandemics, any further resurgences or variants of the "COVID-19 virus", actions taken by governmental authorities in response thereto, other public health crises or man-made events, and their impact on the Company's local economies or the Company's operations; a deterioration in the conditions of the securities markets; a deterioration of the credit rating for U.S. long-term sovereign debt or uncertainties surrounding the federal budget; inability to adapt to changes in information technology, including changes to industry accepted delivery models driven by a migration to the internet as a means of service delivery; electronic or other fraudulent activity within the financial services industry, especially in the commercial banking sector; adverse changes in consumer spending and savings habits; the effect of laws and regulations regarding the financial services industry, including the need to invest in technology to meet heightened regulatory expectations or introduction of new requirements or expectations resulting in increased costs of compliance or required adjustments to strategy; changes in laws and regulations (including laws and regulations concerning taxes, banking, securities and insurance) generally applicable to the Company’s business, including any such changes in laws and regulations as a result of recent disruptions in the banking industry, and the associated costs of such changes; the Company's potential judgments, claims, damages, penalties, fines and reputational damage resulting from pending or future litigation and regulatory and government actions; changes in accounting policies, practices and standards, as may be adopted by the regulatory agencies as well as the Public Company Accounting Oversight Board, the Financial Accounting Standards Board, and other accounting standard setters; operational risks related to cyber threats, attacks, intrusions, and fraud which could lead to interruptions or disruptions of the Company's operating systems, including systems that are customer facing, and adversely impact the Company's business; and other unexpected material adverse changes in the Company's operations or earnings. The Company wishes to caution readers not to place undue reliance on any forward-looking statements as the Company’s business and its forward-looking statements involve substantial known and unknown risks and uncertainties described in the Company’s Annual Report on Form 10-K and subsequent Quarterly Reports on Form 10-Q ("Risk Factors"). Except as required by law, the Company disclaims any intent or obligation to update publicly any such forward-looking statements, whether in response to new information, future events or otherwise. Any public statements or disclosures by the Company following this release which modify or impact any of the forward-looking statements contained in this release will be deemed to modify or supersede such statements in this release. In addition to the information set forth in this press release, you should carefully consider the Risk Factors. This press release and the appendices attached to it contain financial information determined by methods other than in accordance with accounting principles generally accepted in 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. Operating net income, operating EPS, operating return on average assets and operating return on average common equity, exclude items that management believes are unrelated to the Company's core banking business such as merger and acquisition expenses, and other items, if applicable. Management uses operating net income and related ratios and operating EPS to measure the strength of the Company’s core banking business and to identify trends that may to some extent be obscured by such items. Management reviews its core margin to determine any items that may impact the net interest margin that may be one-time in nature or not reflective of its core operating environment, such as significant purchase accounting adjustments or other adjustments such as nonaccrual interest reversals/recoveries and prepayment penalties. Management believes that adjusting for these items to arrive at a core margin provides additional insight into the operating environment and how management decisions impact the net interest margin. Management also supplements its evaluation of financial performance with analysis of tangible book value per share (which is computed by dividing stockholders' equity less goodwill and identifiable intangible assets, or "tangible common equity", by common shares outstanding), the tangible common equity ratio (which is computed by dividing tangible common equity by "tangible assets", defined as total assets less goodwill and other intangibles), and return on average tangible common equity (which is computed by dividing net income by average tangible common equity). The Company has included information on tangible book value per share, the tangible common equity ratio and return on average tangible common equity because management believes that investors may find it useful to have access to the same analytical tools used by management. As a result of merger and acquisition activity, the Company has recognized goodwill and other intangible assets in conjunction with business combination accounting principles. Excluding the impact of goodwill and other intangibles in measuring asset and capital values for the ratios provided, along with other bank standard capital ratios, provides a framework to compare the capital adequacy of the Company to other companies in the financial services industry. These non-GAAP measures should not be viewed as a substitute for operating results and other financial measures determined in accordance with GAAP. An item which management excludes when computing these non-GAAP measures can be of substantial importance to the Company’s results for any particular quarter or year. The Company’s non-GAAP performance measures, including operating net income, operating EPS, operating return on average assets, operating return on average common equity, core margin, tangible book value per share and the tangible common equity ratio, are not necessarily comparable to non-GAAP performance measures which may be presented by other companies. Category: Earnings Releases INDEPENDENT BANK CORP. FINANCIAL SUMMARY CONSOLIDATED BALANCE SHEETS (Unaudited, dollars in thousands) % Change % Change December 31 2023 September 30 2023 December 31 2022 Dec 2023 vs. Dec 2023 vs. Sept 2023 Dec 2022 Assets Cash and due from banks $ 178,861 $ 176,930 $ 175,843 1.09 % 1.72 % Interest-earning deposits with banks 45,469 43,198 177,090 5.26 % (74.32 ) % Securities Trading 4,987 4,476 3,888 11.42 % 28.27 % Equities 22,510 21,475 21,119 4.82 % 6.59 % Available for sale 1,334,256 1,353,744 1,399,154 (1.44 ) % (4.64 ) % Held to maturity 1,569,107 1,594,279 1,705,120 (1.58 ) % (7.98 ) % Total securities 2,930,860 2,973,974 3,129,281 (1.45 ) % (6.34 ) % Loans held for sale 6,368 3,998 2,803 59.28 % 127.19 % Loans Commercial and industrial 1,579,986 1,653,003 1,635,103 (4.42 ) % (3.37 ) % Commercial real estate 8,041,508 7,896,230 7,760,230 1.84 % 3.62 % Commercial construction 849,586 965,442 1,154,413 (12.00 ) % (26.41 ) % Small business 251,956 245,335 219,102 2.70 % 14.99 % Total commercial 10,723,036 10,760,010 10,768,848 (0.34 ) % (0.43 ) % Residential real estate 2,424,754 2,338,102 2,035,524 3.71 % 19.12 % Home equity - first position 518,706 529,938 566,166 (2.12 ) % (8.38 ) % Home equity - subordinate positions 578,920 565,617 522,584 2.35 % 10.78 % Total consumer real estate 3,522,380 3,433,657 3,124,274 2.58 % 12.74 % Other consumer 32,654 30,568 35,553 6.82 % (8.15 ) % Total loans 14,278,070 14,224,235 13,928,675 0.38 % 2.51 % Less: allowance for credit losses (142,222 ) (140,569 ) (152,419 ) 1.18 % (6.69 ) % Net loans 14,135,848 14,083,666 13,776,256 0.37 % 2.61 % Federal Home Loan Bank stock 43,557 43,878 5,218 (0.73 ) % 734.75 % Bank premises and equipment, net 193,049 191,560 196,504 0.78 % (1.76 ) % Goodwill 985,072 985,072 985,072 — % — % Other intangible assets 18,190 19,825 25,068 (8.25 ) % (27.44 ) % Cash surrender value of life insurance policies 297,387 295,670 293,323 0.58 % 1.39 % Other assets 512,712 550,338 527,716 (6.84 ) % (2.84 ) % Total assets $ 19,347,373 $ 19,368,109 $ 19,294,174 (0.11 ) % 0.28 % Liabilities and Stockholders' Equity Deposits Noninterest-bearing demand deposits $ 4,567,083 $ 4,796,148 $ 5,441,584 (4.78 ) % (16.07 ) % Savings and interest checking accounts 5,298,913 5,398,322 5,898,009 (1.84 ) % (10.16 ) % Money market 2,818,072 2,852,293 3,343,673 (1.20 ) % (15.72 ) % Time certificates of deposit 2,181,479 2,012,763 1,195,741 8.38 % 82.44 % Total deposits 14,865,547 15,059,526 15,879,007 (1.29 ) % (6.38 ) % Borrowings Federal Home Loan Bank borrowings 1,105,541 887,548 637 24.56 % nm Junior subordinated debentures, net 62,858 62,857 62,855 — % — % Subordinated debentures, net 49,980 49,957 49,885 0.05 % 0.19 % Total borrowings 1,218,379 1,000,362 113,377 21.79 % 974.63 % Total deposits and borrowings 16,083,926 16,059,888 15,992,384 0.15 % 0.57 % Other liabilities 368,196 422,813 415,089 (12.92 ) % (11.30 ) % Total liabilities 16,452,122 16,482,701 16,407,473 (0.19 ) % 0.27 % Stockholders' equity Common stock 427 440 455 (2.95 ) % (6.15 ) % Additional paid in capital 1,932,163 1,999,448 2,114,888 (3.37 ) % (8.64 ) % Retained earnings 1,077,488 1,046,266 934,442 2.98 % 15.31 % Accumulated other comprehensive loss, net of tax (114,827 ) (160,746 ) (163,084 ) (28.57 ) % (29.59 ) % Total stockholders' equity 2,895,251 2,885,408 2,886,701 0.34 % 0.30 % Total liabilities and stockholders' equity $ 19,347,373 $ 19,368,109 $ 19,294,174 (0.11 ) % 0.28 % CONSOLIDATED STATEMENTS OF INCOME (Unaudited, dollars in thousands, except per share data) Three Months Ended % Change % Change December 31 2023 September 30 2023 December 31 2022 Dec 2023 vs. Dec 2023 vs. Sept 2023 Dec 2022 Interest income Interest on federal funds sold and short-term investments $ 304 $ 905 $ 4,163 (66.41 ) % (92.70 ) % Interest and dividends on securities 14,631 14,818 15,789 (1.26 ) % (7.33 ) % Interest and fees on loans 192,178 187,145 164,153 2.69 % 17.07 % Interest on loans held for sale 57 60 22 (5.00 ) % 159.09 % Total interest income 207,170 202,928 184,127 2.09 % 12.51 % Interest expense Interest on deposits 49,456 40,713 14,325 21.47 % 245.24 % Interest on borrowings 12,618 12,335 1,447 2.29 % 772.01 % Total interest expense 62,074 53,048 15,772 17.01 % 293.57 % Net interest income 145,096 149,880 168,355 (3.19 ) % (13.82 ) % Provision for credit losses 5,500 5,500 5,500 — % — % Net interest income after provision for credit losses 139,596 144,380 162,855 (3.31 ) % (14.28 ) % Noninterest income Deposit account fees 6,126 5,936 5,788 3.20 % 5.84 % Interchange and ATM fees 4,638 4,808 4,282 (3.54 ) % 8.31 % Investment management 9,818 10,246 10,394 (4.18 ) % (5.54 ) % Mortgage banking income 609 739 526 (17.59 ) % 15.78 % Increase in cash surrender value of life insurance policies 2,091 1,983 2,136 5.45 % (2.11 ) % Gain on life insurance benefits 180 1,924 691 (90.64 ) % (73.95 ) % Loan level derivative income 802 842 1,421 (4.75 ) % (43.56 ) % Other noninterest income 7,803 7,065 7,064 10.45 % 10.46 % Total noninterest income 32,067 33,543 32,302 (4.40 ) % (0.73 ) % Noninterest expenses Salaries and employee benefits 56,388 54,797 53,754 2.90 % 4.90 % Occupancy and equipment expenses 13,054 12,321 12,586 5.95 % 3.72 % Data processing and facilities management 2,423 2,404 2,442 0.79 % (0.78 ) % FDIC assessment 3,942 2,727 1,726 44.55 % 128.39 % Other noninterest expenses 24,940 25,533 24,364 (2.32 ) % 2.36 % Total noninterest expenses 100,747 97,782 94,872 3.03 % 6.19 % Income before income taxes 70,916 80,141 100,285 (11.51 ) % (29.29 ) % Provision for income taxes 16,113 19,333 23,242 (16.66 ) % (30.67 ) % Net Income $ 54,803 $ 60,808 $ 77,043 (9.88 ) % (28.87 ) % Weighted average common shares (basic) 43,474,734 44,135,487 45,641,605 Common share equivalents 9,474 11,417 20,090 Weighted average common shares (diluted) 43,484,208 44,146,904 45,661,695 Basic earnings per share $ 1.26 $ 1.38 $ 1.69 (8.70 ) % (25.44 ) % Diluted earnings per share $ 1.26 $ 1.38 $ 1.69 (8.70 ) % (25.44 ) % Performance ratios Net interest margin (FTE) 3.38 % 3.47 % 3.85 % Return on average assets (calculated by dividing net income by average assets) 1.13 % 1.25 % 1.56 % Return on average common equity (calculated by dividing net income by average common equity) (GAAP) 7.51 % 8.35 % 10.70 % Return on average tangible common equity (Non-GAAP) (calculated by dividing net income by average tangible common equity) 11.50 % 12.81 % 16.57 % Noninterest income as a % of total revenue (calculated by dividing total noninterest income by net interest income plus total noninterest income) 18.10 % 18.29 % 16.10 % Efficiency ratio (calculated by dividing total noninterest expense by total revenue) 56.87 % 53.31 % 47.28 % CONSOLIDATED STATEMENTS OF INCOME (Unaudited, dollars in thousands, except per share data) Years Ended % Change December 31 2023 December 31 2022 Dec 2023 vs. Dec 2022 Interest income Interest on federal funds sold and short-term investments $ 5,186 $ 14,385 (63.95 ) % Interest and dividends on securities 60,342 50,360 19.82 % Interest and fees on loans 730,008 577,923 26.32 % Interest on loans held for sale 190 172 10.47 % Total interest income 795,726 642,840 23.78 % Interest expense Interest on deposits 144,752 24,652 487.18 % Interest on borrowings 44,453 4,939 800.04 % Total interest expense 189,205 29,591 539.40 % Net interest income 606,521 613,249 (1.10 ) % Provision for credit losses 23,250 6,500 257.69 % Net interest income after provision for credit losses 583,271 606,749 (3.87 ) % Noninterest income Deposit account fees 23,486 23,370 0.50 % Interchange and ATM fees 18,108 16,249 11.44 % Investment management 40,191 36,832 9.12 % Mortgage banking income 2,326 3,515 (33.83 ) % Increase in cash surrender value of life insurance policies 7,868 7,685 2.38 % Gain on life insurance benefits 2,291 1,291 77.46 % Loan level derivative income 3,327 2,932 13.47 % Other noninterest income 27,012 22,793 18.51 % Total noninterest income 124,609 114,667 8.67 % Noninterest expenses Salaries and employee benefits 222,135 204,711 8.51 % Occupancy and equipment expenses 50,582 49,841 1.49 % Data processing and facilities management 9,884 9,320 6.05 % FDIC assessment 11,953 6,951 71.96 % Merger and acquisition expense — 7,100 (100.00 ) % Other noninterest expenses 98,192 95,739 2.56 % Total noninterest expenses 392,746 373,662 5.11 % Income before income taxes 315,134 347,754 (9.38 ) % Provision for income taxes 75,632 83,941 (9.90 ) % Net Income $ 239,502 $ 263,813 (9.22 ) % Weighted average common shares (basic) 44,181,540 46,372,051 Common share equivalents 12,007 17,938 Weighted average common shares (diluted) 44,193,547 46,389,989 Basic earnings per share $ 5.42 $ 5.69 (4.75 ) % Diluted earnings per share $ 5.42 $ 5.69 (4.75 ) % Reconciliation of Net Income (GAAP) to Operating Net Income (Non-GAAP): Net Income $ 239,502 $ 263,813 Noninterest expense components Add - merger and acquisition expenses — 7,100 Noncore increases to income before taxes — 7,100 Net tax benefit associated with noncore items (1) — (1,995 ) Noncore increases to net income $ — $ 5,105 Operating net income (Non-GAAP) $ 239,502 $ 268,918 (10.94 ) % Diluted earnings per share, on an operating basis $ 5.42 $ 5.80 (6.55 ) % (1) The net tax benefit associated with noncore items is determined by assessing whether each noncore item is included or excluded from net taxable income and applying the Company's combined marginal tax rate to only those items included in net taxable income. Performance ratios Net interest margin (FTE) 3.54 % 3.46 % Return on average assets (GAAP) (calculated by dividing net income by average assets) 1.24 % 1.33 % Return on average assets on an operating basis (Non-GAAP) (calculated by dividing net operating net income by average assets) 1.24 % 1.35 % Return on average common equity (GAAP) (calculated by dividing net income by average common equity) 8.31 % 9.05 % Return on average common equity on an operating basis (Non-GAAP) (calculated by dividing net operating net income by average common equity) 8.31 % 9.22 % Return on average tangible common equity (GAAP) (calculated by dividing net income by average tangible common equity) 12.78 % 13.87 % Return on average tangible common equity on an operating basis (Non-GAAP) (calculated by dividing net operating net income by average tangible common equity) 12.78 % 14.14 % Noninterest income as a % of total revenue (calculated by dividing total noninterest income by net interest income plus total noninterest income) 17.04 % 15.75 % Noninterest income as a % of total revenue on an operating basis (Non-GAAP) (calculated by dividing total noninterest income on an operating basis by net interest income plus total noninterest income) 17.04 % 15.75 % Efficiency ratio (GAAP) (calculated by dividing total noninterest expense by total revenue) 53.72 % 51.33 % Efficiency ratio on an operating basis (Non-GAAP) (calculated by dividing total noninterest expense on an operating basis by total revenue) 53.72 % 50.36 % ASSET QUALITY (Unaudited, dollars in thousands) Nonperforming Assets At December 31 2023 September 30 2023 December 31 2022 Nonperforming loans Commercial & industrial loans $ 20,188 $ 2,953 $ 26,693 Commercial real estate loans 22,952 23,867 15,730 Small business loans 398 372 104 Residential real estate loans 7,634 8,493 8,479 Home equity 3,171 3,411 3,400 Other consumer 40 75 475 Total nonperforming loans 54,383 39,171 54,881 Other real estate owned 110 110 — Total nonperforming assets $ 54,493 $ 39,281 $ 54,881 Nonperforming loans/gross loans 0.38 % 0.28 % 0.39 % Nonperforming assets/total assets 0.28 % 0.20 % 0.28 % Allowance for credit losses/nonperforming loans 261.52 % 358.86 % 277.73 % Allowance for credit losses/total loans 1.00 % 0.99 % 1.09 % Delinquent loans/total loans 0.44 % 0.22 % 0.30 % Nonperforming Assets Reconciliation for the Three Months Ended December 31 2023 September 30 2023 December 31 2022 Nonperforming assets beginning balance $ 39,281 $ 45,812 $ 56,017 New to nonperforming 31,823 3,455 5,734 Loans charged-off (4,182 ) (6,018 ) (660 ) Loans paid-off (10,905 ) (2,915 ) (2,448 ) Loans restored to performing status (1,534 ) (1,428 ) (3,846 ) Other 10 375 84 Nonperforming assets ending balance $ 54,493 $ 39,281 $ 54,881 Net Charge-Offs (Recoveries) Three Months Ended Years Ended December 31 2023 September 30 2023 December 31 2022 December 31 2023 December 31 2022 Net charge-offs (recoveries) Commercial and industrial loans $ 80 $ (111 ) $ (5 ) $ 23,419 $ (49 ) Commercial real estate loans 2,783 5,072 — 7,855 (271 ) Small business loans 267 77 135 392 47 Home equity 23 (12 ) (16 ) (15 ) 1 Other consumer 694 552 280 1,796 1,275 Total net charge-offs (recoveries) $ 3,847 $ 5,578 $ 394 $ 33,447 $ 1,003 Net charge-offs (recoveries) to average loans (annualized) 0.11 % 0.16 % 0.01 % 0.24 % 0.01 % nm = not meaningful BALANCE SHEET AND CAPITAL RATIOS December 31 2023 September 30 2023 December 31 2022 Gross loans/total deposits 96.05 % 94.45 % 87.72 % Common equity tier 1 capital ratio (1) 14.19 % 14.42 % 14.33 % Tier 1 leverage capital ratio (1) 10.97 % 11.12 % 10.99 % Common equity to assets ratio GAAP 14.96 % 14.90 % 14.96 % Tangible common equity to tangible assets ratio (2) 10.31 % 10.24 % 10.26 % Book value per share GAAP $ 67.53 $ 65.37 $ 63.25 Tangible book value per share (2) $ 44.13 $ 42.60 $ 41.12 (1) Estimated number for December 31, 2023. (2) See Appendix A for detailed reconciliation from GAAP to Non-GAAP ratios. INDEPENDENT BANK CORP. SUPPLEMENTAL FINANCIAL INFORMATION (Unaudited, dollars in thousands) Three Months Ended December 31, 2023 September 30, 2023 December 31, 2022 Interest Interest Interest Average Earned/ Yield/ Average Earned/ Yield/ Average Earned/ Yield/ Balance Paid (1) Rate Balance Paid (1) Rate Balance Paid (1) Rate Interest-earning assets Interest-earning deposits with banks, federal funds sold, and short term investments $ 42,391 $ 304 2.85 % $ 89,449 $ 905 4.01 % $ 466,691 $ 4,163 3.54 % Securities Securities - trading 4,509 — — % 4,546 — — % 3,732 — — % Securities - taxable investments 2,923,983 14,629 1.98 % 3,000,736 14,817 1.96 % 3,147,635 15,787 1.99 % Securities - nontaxable investments (1) 186 2 4.27 % 188 1 2.11 % 189 2 4.20 % Total securities $ 2,928,678 $ 14,631 1.98 % $ 3,005,470 $ 14,818 1.96 % $ 3,151,556 $ 15,789 1.99 % Loans held for sale 3,614 57 6.26 % 4,072 60 5.85 % 1,607 22 5.43 % Loans Commercial and industrial (1) 1,600,886 28,990 7.18 % 1,682,000 30,739 7.25 % 1,560,885 23,258 5.91 % Commercial real estate (1) 7,956,103 100,331 5.00 % 7,823,525 94,861 4.81 % 7,732,925 88,508 4.54 % Commercial construction 895,313 15,932 7.06 % 1,007,814 16,829 6.62 % 1,223,695 17,205 5.58 % Small business 246,411 3,956 6.37 % 240,782 3,752 6.18 % 213,384 2,995 5.57 % Total commercial 10,698,713 149,209 5.53 % 10,754,121 146,181 5.39 % 10,730,889 131,966 4.88 % Residential real estate 2,380,706 24,712 4.12 % 2,276,882 23,197 4.04 % 2,001,042 18,334 3.64 % Home equity 1,097,233 18,747 6.78 % 1,093,479 18,313 6.64 % 1,088,846 14,339 5.22 % Total consumer real estate 3,477,939 43,459 4.96 % 3,370,361 41,510 4.89 % 3,089,888 32,673 4.20 % Other consumer 32,141 667 8.23 % 30,775 608 7.84 % 34,638 595 6.82 % Total loans $ 4,208,793 $ 193,335 5.40 % $ 14,155,257 $ 188,299 5.28 % $ 13,855,415 $ 165,234 4.73 % Total interest-earning assets $ 17,183,476 $ 208,327 4.81 % $ 17,254,248 $ 204,082 4.69 % $ 17,475,269 $ 185,208 4.20 % Cash and due from banks 178,100 184,003 184,985 Federal Home Loan Bank stock 37,054 38,252 5,218 Other assets 1,883,317 1,859,099 1,871,241 Total assets $ 19,281,947 $ 19,335,602 $ 19,536,713 Interest-bearing liabilities Deposits Savings and interest checking accounts $ 5,323,667 $ 14,315 1.07 % $ 5,393,209 $ 11,860 0.87 % $ 5,966,326 $ 4,921 0.33 % Money market 2,851,343 15,197 2.11 % 2,945,450 13,709 1.85 % 3,408,441 7,492 0.87 % Time deposits 2,103,666 19,944 3.76 % 1,860,440 15,144 3.23 % 1,175,667 1,912 0.65 % Total interest-bearing deposits $ 10,278,676 $ 49,456 1.91 % $ 10,199,099 $ 40,713 1.58 % $ 10,550,434 $ 14,325 0.54 % Borrowings Federal Home Loan Bank borrowings 884,441 10,836 4.86 % 869,646 10,568 4.82 % 639 2 1.24 % Junior subordinated debentures 62,857 1,164 7.35 % 62,857 1,150 7.26 % 62,855 827 5.22 % Subordinated debentures 49,968 618 4.91 % 49,944 617 4.90 % 49,873 618 4.92 % Total borrowings $ 997,266 $ 12,618 5.02 % $ 982,447 $ 12,335 4.98 % $ 113,367 $ 1,447 5.06 % Total interest-bearing liabilities $ 11,275,942 $ 62,074 2.18 % $ 11,181,546 $ 53,048 1.88 % $ 10,663,801 $ 15,772 0.59 % Noninterest-bearing demand deposits 4,704,888 4,883,009 5,606,055 Other liabilities 406,029 381,483 410,679 Total liabilities $ 16,386,859 $ 16,446,038 $ 16,680,535 Stockholders' equity 2,895,088 2,889,564 2,856,178 Total liabilities and stockholders' equity $ 19,281,947 $ 19,335,602 $ 19,536,713 Net interest income $ 146,253 $ 151,034 $ 169,436 Interest rate spread (2) 2.63 % 2.81 % 3.61 % Net interest margin (3) 3.38 % 3.47 % 3.85 % Supplemental Information Total deposits, including demand deposits $ 14,983,564 $ 49,456 $ 15,082,108 $ 40,713 $ 16,156,489 $ 14,325 Cost of total deposits 1.31 % 1.07 % 0.35 % Total funding liabilities, including demand deposits $ 15,980,830 $ 62,074 $ 16,064,555 $ 53,048 $ 16,269,856 $ 15,772 Cost of total funding liabilities 1.54 % 1.31 % 0.38 % (1) The total amount of adjustment to present interest income and yield on a fully tax-equivalent basis is $1.2 million, $1.2 million, and $1.1 million for the three months ended December 31, 2023, September 30, 2023, and December 31, 2022, 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. Years Ended December 31, 2023 December 31, 2022 Interest Interest Average Earned/ Yield/ Average Earned/ Yield/ Balance Paid Rate Balance Paid Rate Interest-earning assets Interest earning deposits with banks, federal funds sold, and short term investments $ 118,806 $ 5,186 4.37 % $ 1,222,434 $ 14,385 1.18 % Securities Securities - trading 4,411 — — % 3,764 — — % Securities - taxable investments 3,027,769 60,336 1.99 % 2,948,358 50,354 1.71 % Securities - nontaxable investments (1) 190 7 3.68 % 196 7 3.57 % Total securities $ 3,032,370 $ 60,343 1.99 % $ 2,952,318 $ 50,361 1.71 % Loans held for sale 3,289 190 5.78 % 4,774 172 3.60 % Loans Commercial and industrial (1) 1,646,939 115,752 7.03 % 1,538,848 77,074 5.01 % Commercial real estate (1) 7,839,476 376,586 4.80 % 7,807,427 326,593 4.18 % Commercial construction 1,019,871 66,440 6.51 % 1,191,394 57,804 4.85 % Small business 235,108 14,428 6.14 % 204,982 10,886 5.31 % Total commercial 10,741,394 573,206 5.34 % 10,742,651 472,357 4.40 % Residential real estate 2,217,971 88,210 3.98 % 1,831,493 63,443 3.46 % Home equity 1,093,546 70,698 6.47 % 1,061,228 44,048 4.15 % Total consumer real estate 3,311,517 158,908 4.80 % 2,892,721 107,491 3.72 % Other consumer 31,202 2,418 7.75 % 31,986 2,114 6.61 % Total loans $ 14,084,113 $ 734,532 5.22 % $ 13,667,358 $ 581,962 4.26 % Total interest-earning assets $ 17,238,578 $ 800,251 4.64 % $ 17,846,884 $ 646,880 3.62 % Cash and due from banks 180,553 184,812 Federal Home Loan Bank stock 33,734 7,134 Other assets 1,853,585 1,858,210 Total assets $ 19,306,450 $ 19,897,040 Interest-bearing liabilities Deposits Savings and interest checking accounts $ 5,489,923 $ 43,073 0.78 % $ 6,159,289 $ 8,339 0.14 % Money market 3,022,322 51,630 1.71 % 3,489,981 11,683 0.33 % Time deposits 1,724,625 50,050 2.90 % 1,310,442 4,630 0.35 % Total interest-bearing deposits $ 10,236,870 $ 144,753 1.41 % $ 10,959,712 $ 24,652 0.22 % Borrowings Federal Home Loan Bank borrowings 782,121 37,624 4.81 % 16,138 313 1.94 % Long-term borrowings — — — % 2,235 31 1.39 % Junior subordinated debentures 62,857 4,359 6.93 % 62,854 2,125 3.38 % Subordinated debentures 49,933 2,470 4.95 % 49,837 2,470 4.96 % Total borrowings $ 894,911 $ 44,453 4.97 % $ 131,064 $ 4,939 3.77 % Total interest-bearing liabilities $ 11,131,781 $ 189,206 1.70 % $ 11,090,776 $ 29,591 0.27 % Noninterest-bearing demand deposits 4,918,787 5,559,997 Other liabilities 374,585 330,371 Total liabilities $ 16,425,153 $ 16,981,144 Stockholders' equity 2,881,297 2,915,896 Total liabilities and stockholders' equity $ 19,306,450 $ 19,897,040 Net interest income $ 611,045 $ 617,289 Interest rate spread (2) 2.94 % 3.35 % Net interest margin (3) 3.54 % 3.46 % Supplemental Information Total deposits, including demand deposits $ 15,155,657 $ 144,753 $ 16,519,709 $ 24,652 Cost of total deposits 0.96 % 0.15 % Total funding liabilities, including demand deposits $ 16,050,568 $ 189,206 $ 16,650,773 $ 29,591 Cost of total funding liabilities 1.18 % 0.18 % (1) The total amount of adjustment to present interest income and yield on a fully tax-equivalent basis is $4.5 million and $4.0 million for the years ended months ended December 31, 2023 and 2022, 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: December 31 2023 September 30 2023 December 31 2022 Tangible common equity (Dollars in thousands, except per share data) Stockholders' equity (GAAP) $ 2,895,251 $ 2,885,408 $ 2,886,701 (a) Less: Goodwill and other intangibles 1,003,262 1,004,897 1,010,140 Tangible common equity (Non-GAAP) $ 1,891,989 $ 1,880,511 $ 1,876,561 (b) Tangible assets Assets (GAAP) $ 19,347,373 $ 19,368,109 $ 19,294,174 (c) Less: Goodwill and other intangibles 1,003,262 1,004,897 1,010,140 Tangible assets (Non-GAAP) $ 18,344,111 $ 18,363,212 $ 18,284,034 (d) Common Shares 42,873,187 44,141,973 45,641,238 (e) Common equity to assets ratio (GAAP) 14.96 % 14.90 % 14.96 % (a/c) Tangible common equity to tangible assets ratio (Non-GAAP) 10.31 % 10.24 % 10.26 % (b/d) Book value per share (GAAP) $ 67.53 $ 65.37 $ 63.25 (a/e) Tangible book value per share (Non-GAAP) $ 44.13 $ 42.60 $ 41.12 (b/e) APPENDIX B: Non-GAAP Reconciliation of Earnings Metrics (Unaudited, dollars in thousands) The following table summarizes the impact of noncore items on the Company's calculation of noninterest income and noninterest expense, the impact of noncore items on noninterest income as a percentage of total revenue and the efficiency ratio, as well as the average tangible common equity used to calculate return on average tangible common equity and operating return on tangible common equity for the periods indicated: Three Months Ended Years Ended December 31 2023 September 30 2023 December 31 2022 December 31 2023 December 31 2022 Net interest income (GAAP) $ 145,096 $ 149,880 $ 168,355 $ 606,521 $ 613,249 Noninterest income (GAAP) $ 32,067 $ 33,543 $ 32,302 $ 124,609 $ 114,667 Noninterest income on an operating basis (Non-GAAP) $ 32,067 $ 33,543 $ 32,302 $ 124,609 $ 114,667 Noninterest expense (GAAP) 100,747 $ 97,782 $ 94,872 $ 392,746 $ 373,662 Less: Merger and acquisition expense — — — — 7,100 Noninterest expense on an operating basis (Non-GAAP) $ 100,747 $ 97,782 $ 94,872 $ 392,746 $ 366,562 Total revenue (GAAP) $ 177,163 $ 183,423 $ 200,657 $ 731,130 $ 727,916 Total operating revenue (Non-GAAP) $ 177,163 $ 183,423 $ 200,657 $ 731,130 $ 727,916 Net income (GAAP) $ 54,803 $ 60,808 $ 77,043 $ 239,502 $ 263,813 Operating net income (Non-GAAP) (See income statement for reconciliation of GAAP to Non-GAAP) $ 54,803 $ 60,808 $ 77,043 $ 239,502 $ 268,918 Average common equity (GAAP) $ 2,895,088 $ 2,889,564 $ 2,856,178 $ 2,881,297 $ 2,915,896 Less: Average goodwill and other intangibles 1,004,081 1,005,778 1,011,091 1,006,658 1,014,045 Tangible average tangible common equity (Non-GAAP) $ 1,891,007 $ 1,883,786 $ 1,845,087 $ 1,874,639 $ 1,901,851 Ratios Noninterest income as a % of total revenue (GAAP) (calculated by dividing total noninterest income by total revenue) 18.10 % 18.29 % 16.10 % 17.04 % 15.75 % Noninterest income as a % of total revenue on an operating basis (Non-GAAP) (calculated by dividing total noninterest income on an operating basis by total revenue) 18.10 % 18.29 % 16.10 % 17.04 % 15.75 % Efficiency ratio (GAAP) (calculated by dividing total noninterest expense by total revenue) 56.87 % 53.31 % 47.28 % 53.72 % 51.33 % Efficiency ratio on an operating basis (Non-GAAP) (calculated by dividing total noninterest expense on an operating basis by total revenue) 56.87 % 53.31 % 47.28 % 53.72 % 50.36 % Return on average tangible common equity (Non-GAAP) (calculated by dividing annualized net income by average tangible common equity) 11.50 % 12.81 % 16.57 % 12.78 % 13.87 % Return on average tangible common equity on an operating basis (Non-GAAP) (calculated by dividing annualized net operating net income by average tangible common equity) 11.50 % 12.81 % 16.57 % 12.78 % 14.14 % APPENDIX C: Net Interest Margin Analysis & Non-GAAP Reconciliation of Core Margin Three Months Ended December 31, 2023 September 30, 2023 Volume Interest Margin Impact Volume Interest Margin Impact (Dollars in thousands) Reported total interest earning assets $ 17,183,476 $ 146,253 3.38 % $ 17,254,248 $ 151,034 3.47 % Acquisition fair value marks: Loan accretion (1,156 ) (330 ) CD amortization 11 11 (1,145 ) (0.03 ) % (319 ) — % Nonaccrual interest, net 549 0.01 % 67 — % Other noncore adjustments (4,913 ) (574 ) (0.01 ) % (5,448 ) (77 ) — % Core margin (Non-GAAP) $ 17,178,563 $ 145,083 3.35 % $ 17,248,800 $ 150,705 3.47 % View source version on businesswire.com: https://www.businesswire.com/news/home/20240117623955/en/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 Data & News supplied by www.cloudquote.io Stock quotes supplied by Barchart Quotes delayed at least 20 minutes. By accessing this page, you agree to the following Privacy Policy and Terms and Conditions.
Independent Bank Corp. Reports Fourth Quarter Net Income of $54.8 Million By: Independent Bank Corp. via Business Wire January 18, 2024 at 16:15 PM EST Completes solid performance in 2023 Independent Bank Corp. (Nasdaq Global Select Market: INDB), parent of Rockland Trust Company, today announced 2023 fourth quarter net income of $54.8 million, or $1.26 per diluted share, a decrease of $6.0 million, or 9.9%, compared to the prior quarter. Full year net income was $239.5 million, or $5.42 on a diluted earnings per share basis, a decrease of $24.3 million, or 9.2%, as compared to the prior year. In 2023, full year operating net income was also $239.5 million, or $5.42 on a diluted earnings per share basis, as no adjustments were recognized. In 2022, full year operating net income was $268.9 million, or $5.80 on a diluted earnings per share basis, which excluded non-core adjustments associated with the Company's fourth quarter 2021 acquisition of Meridian Bancorp, Inc. ("Meridian") and its subsidiary, East Boston Savings Bank. 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. The Company generated a return on average assets and a return on average common equity of 1.13% and 7.51%, respectively, for the fourth quarter of 2023, as compared to 1.25% and 8.35%, respectively, for the prior quarter. For the full year 2023, the Company generated a return on average assets and return on average common equity of 1.24% and 8.31%, respectively, as compared to 1.33% and 9.05%, respectively, for 2022, or 1.24% and 8.31%, respectively, on an operating basis for 2023, compared to 1.35% and 9.22%, respectively, on an operating basis for 2022. “The dedication of my colleagues and their unrelenting focus on each relationship, day in and day out, paved the way for the solid financial results we achieved throughout this past year,” said Jeffrey Tengel, the Chief Executive Officer of Independent Bank Corp. and Rockland Trust Company. “I am confident that our core fundamentals position us well for continued success heading into 2024 and beyond.” BALANCE SHEET Total assets of $19.3 billion at December 31, 2023 remained relatively consistent with the prior quarter and increased by $53.2 million, or 0.3%, as compared to December 31, 2022. Total loans at December 31, 2023 of $14.3 billion increased by $53.8 million, or 0.4% (1.5% annualized), compared to the prior quarter level. The increase was driven primarily by consumer real estate, which increased $88.7 million, or 2.6% (10.3% annualized) for the quarter, largely attributable to adjustable-rate residential mortgages retained on the balance sheet. Total commercial loans decreased by $37.0 million, or 0.3% (1.4% annualized), compared to the prior quarter, primarily reflecting disciplined new origination activity, offset by commercial and industrial payoffs and decreased line utilization. The small business portfolio continued its steady growth and has risen by 15.0% since December 31, 2022. Deposit balances of $14.9 billion at December 31, 2023 decreased by $194.0 million, or 1.3%, from September 30, 2023, driven primarily by seasonal business cash flows. Though some level of product remixing persists, total noninterest bearing demand deposits comprised a healthy 30.7% of total deposits at December 31, 2023. Core deposits, inclusive of reciprocal money market deposits, represented 84.6% of total deposits at December 31, 2023 as compared to 86.0% at September 30, 2023. The total cost of deposits for the fourth quarter increased 24 basis points to 1.31% compared to the prior quarter, reflective of ongoing customer preference for higher yielding accounts. In conjunction with the decline in deposit balances, the Company's Federal Home Loan Bank borrowings increased by $218.0 million, or 21.8%, during the fourth quarter of 2023 to serve as a funding source for stock buyback activity and net loan growth during the quarter. The securities portfolio decreased by $43.1 million, or 1.4%, compared to September 30, 2023, driven primarily by paydowns, calls, and maturities which were partially offset by unrealized gains of $45.2 million in the available for sale portfolio. Total securities represented 15.1% of total assets at December 31, 2023, as compared to 15.4% at September 30, 2023. During the fourth quarter of 2023, the Company executed on its previously announced $100 million stock repurchase plan, buying back 1.3 million shares of common stock for $69.0 million at an average price per share of $53.73. Stockholders' equity at December 31, 2023 remained generally consistent when compared to September 30, 2023, as the impact of the share repurchase program was offset by strong earnings retention and 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 14.96% at December 31, 2023 represented an increase of 6 basis points, or 0.4%, from September 30, 2023 and was consistent with the level at December 31, 2022. The Company's book value per share increased by $2.16, or 3.3%, to $67.53 at December 31, 2023 as compared to the prior quarter. The Company's tangible book value per share at December 31, 2023 rose by $1.53, or 3.6%, from the prior quarter to $44.13, and represented an increase of 7.3% from the year ago period. The Company's ratio of tangible common equity to tangible assets of 10.31% at December 31, 2023 represented an increase of 7 basis points from the prior quarter and an increase of 5 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 fourth quarter of 2023 decreased 3.2% to $145.1 million compared to $149.9 million for the prior quarter, as rising deposit costs continued to counter the benefit of repriced assets resulting in a reduction in net interest margin of 9 basis points to 3.38% for the quarter. The core margin (excluding purchase accounting and other non-core items) was 3.35% for the fourth quarter, representing a reduction of 12 basis points as compared to the prior quarter. Please refer to Appendix C for additional details regarding the net interest margin and Non-GAAP reconciliation of core margin. NONINTEREST INCOME Noninterest income of $32.1 million for the fourth quarter of 2023 represented a decrease of $1.5 million, or 4.4%, as compared to the prior quarter. Significant changes in noninterest income for the fourth quarter of 2023 compared to the prior quarter included the following: Investment management income decreased by $428,000, or 4.2%, primarily driven by lower insurance commissions. However, total assets under administration increased by $417.4 million, or 6.8%, to a record level of $6.5 billion at December 31, 2023, driving higher managed fee income quarter over quarter. The Company received proceeds on life insurance policies resulting in gains of $180,000 for the fourth quarter, as compared to gains of $1.9 million in the prior quarter. Other noninterest income increased by $738,000, or 10.4%, primarily due to unrealized gains on equity securities and discounted purchases of tax credits, as well as outsized loan fees recognized during the third quarter of 2023. NONINTEREST EXPENSE Noninterest expense of $100.7 million for the fourth quarter of 2023 represented an increase of $3.0 million, or 3.0%, as compared to the prior quarter. Significant changes in noninterest expense for the fourth quarter compared to the prior quarter included the following: Salaries and employee benefits increased by $1.6 million, or 2.9%, due primarily to timing of incentive compensation. Occupancy and equipment expenses increased by $733,000, or 5.9%, due primarily to one-time termination costs associated with two leased locations related to the 2021 Meridian acquisition. FDIC assessment increased $1.2 million, or 44.6%, from the prior quarter, and includes a one-time $1.1 million special assessment implemented by the FDIC to recover losses incurred by the Deposit Insurance Fund in 2023. Other noninterest expense decreased by $593,000, or 2.3%, due primarily to decreases in consultant fees, unrealized losses on equity securities, and card issuance costs, partially offset by increases in check fraud losses, software maintenance and legal costs. The Company’s tax rate for the fourth quarter of 2023 decreased to 22.72%, compared to 24.12% for the prior quarter. The fourth quarter decline was due to the recognition of discrete items in the quarter associated with low income housing tax investments and the release of certain tax reserves in conjunction with the final 2022 tax return filing. ASSET QUALITY The fourth quarter provision for credit losses was consistent with the prior quarter at $5.5 million. Net charge-offs declined to $3.8 million for the fourth quarter of 2023 compared to $5.6 million in the prior quarter and were largely attributable to one partial charge-off of a commercial real estate loan and general overdraft loan charge-offs. Nonperforming loans increased to $54.4 million, or 0.38% of total loans at December 31, 2023, as compared to $39.2 million, or 0.28% of total loans at September 30, 2023, driven primarily by the migration of two commercial loans totaling $25.9 million, offset by paydowns during the quarter. Delinquency as a percentage of total loans increased 22 basis points from the prior quarter to 0.44% at December 31, 2023. The allowance for credit losses on total loans increased slightly to $142.2 million at December 31, 2023 compared to $140.6 million at September 30, 2023, or 1.00% and 0.99% of total loans, at December 31, 2023 and September 30, 2023, 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 fourth quarter earnings at 10:00 a.m. Eastern Time on Friday, January 19, 2024. Internet access to the call is available on the Company’s website at https://INDB.RocklandTrust.com or via telephonic access by dial-in at 1-888-336-7153 reference: INDB. A replay of the call will be available by calling 1-877-344-7529, Replay Conference Number: 9516407 and will be available through January 26, 2024. Additionally, a webcast replay will be available on the Company's website until January 19, 2025. ABOUT INDEPENDENT BANK CORP. Independent Bank Corp. (NASDAQ Global Select Market: INDB) is the holding company for Rockland Trust Company, a full-service commercial bank headquartered in 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 was named to The Boston Globe's "Top Places to Work" 2023 list, an honor earned for the 15th consecutive year. 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 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: further weakening in the United States economy in general and the regional and local economies within the New England region and the Company’s market area; the effects to the Company or its customers of inflationary pressures, labor market shortages and supply chain issues; the instability or volatility in financial markets and unfavorable general economic or business conditions, globally, nationally or regionally, whether caused by geopolitical concerns, including the Russia/Ukraine conflict, the conflict in Israel and surrounding areas and the possible expansion of such conflicts, recent disruptions in the banking industry, or other factors, and the potential impact of unfavorable economic conditions on the Company and its customers, including the potential for decreases in deposits and loan demand, unanticipated loan delinquencies, loss of collateral and decreased service revenues; unanticipated loan delinquencies, loss of collateral, decreased service revenues, and other potential negative effects on our business caused by severe weather, pandemics or other external events; adverse changes or volatility in the local real estate market; rising interest rates and any resultant adverse changes in asset quality, increased credit risks, decreased loan demand, and/or refinancing challenges, which in turn could further lead to unanticipated credit deterioration in the Company's loan portfolio, including with respect to one or more large commercial relationships; acquisitions may not produce results at levels or within time frames originally anticipated and may result in unforeseen integration issues or impairment of goodwill and/or other intangibles; additional regulatory oversight and related compliance costs; changes in trade, monetary and fiscal policies and laws, including interest rate policies of the Board of Governors of the Federal Reserve System; higher than expected tax expense, including as a result of failure to comply with general tax laws and changes in tax laws; changes in market interest rates for interest earning assets and/or interest bearing liabilities; increased competition in the Company’s market areas, including competition that could impact deposit gathering, retention of deposits and the cost of deposits, increased competition due to the demand for innovative products and service offerings, and competition from non-depository institutions which may be subject to fewer regulatory constraints and lower cost structures; adverse weather, changes in climate, natural disasters, including the risk of floods and fire; the emergence of widespread health emergencies or pandemics, any further resurgences or variants of the "COVID-19 virus", actions taken by governmental authorities in response thereto, other public health crises or man-made events, and their impact on the Company's local economies or the Company's operations; a deterioration in the conditions of the securities markets; a deterioration of the credit rating for U.S. long-term sovereign debt or uncertainties surrounding the federal budget; inability to adapt to changes in information technology, including changes to industry accepted delivery models driven by a migration to the internet as a means of service delivery; electronic or other fraudulent activity within the financial services industry, especially in the commercial banking sector; adverse changes in consumer spending and savings habits; the effect of laws and regulations regarding the financial services industry, including the need to invest in technology to meet heightened regulatory expectations or introduction of new requirements or expectations resulting in increased costs of compliance or required adjustments to strategy; changes in laws and regulations (including laws and regulations concerning taxes, banking, securities and insurance) generally applicable to the Company’s business, including any such changes in laws and regulations as a result of recent disruptions in the banking industry, and the associated costs of such changes; the Company's potential judgments, claims, damages, penalties, fines and reputational damage resulting from pending or future litigation and regulatory and government actions; changes in accounting policies, practices and standards, as may be adopted by the regulatory agencies as well as the Public Company Accounting Oversight Board, the Financial Accounting Standards Board, and other accounting standard setters; operational risks related to cyber threats, attacks, intrusions, and fraud which could lead to interruptions or disruptions of the Company's operating systems, including systems that are customer facing, and adversely impact the Company's business; and other unexpected material adverse changes in the Company's operations or earnings. The Company wishes to caution readers not to place undue reliance on any forward-looking statements as the Company’s business and its forward-looking statements involve substantial known and unknown risks and uncertainties described in the Company’s Annual Report on Form 10-K and subsequent Quarterly Reports on Form 10-Q ("Risk Factors"). Except as required by law, the Company disclaims any intent or obligation to update publicly any such forward-looking statements, whether in response to new information, future events or otherwise. Any public statements or disclosures by the Company following this release which modify or impact any of the forward-looking statements contained in this release will be deemed to modify or supersede such statements in this release. In addition to the information set forth in this press release, you should carefully consider the Risk Factors. This press release and the appendices attached to it contain financial information determined by methods other than in accordance with accounting principles generally accepted in 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. Operating net income, operating EPS, operating return on average assets and operating return on average common equity, exclude items that management believes are unrelated to the Company's core banking business such as merger and acquisition expenses, and other items, if applicable. Management uses operating net income and related ratios and operating EPS to measure the strength of the Company’s core banking business and to identify trends that may to some extent be obscured by such items. Management reviews its core margin to determine any items that may impact the net interest margin that may be one-time in nature or not reflective of its core operating environment, such as significant purchase accounting adjustments or other adjustments such as nonaccrual interest reversals/recoveries and prepayment penalties. Management believes that adjusting for these items to arrive at a core margin provides additional insight into the operating environment and how management decisions impact the net interest margin. Management also supplements its evaluation of financial performance with analysis of tangible book value per share (which is computed by dividing stockholders' equity less goodwill and identifiable intangible assets, or "tangible common equity", by common shares outstanding), the tangible common equity ratio (which is computed by dividing tangible common equity by "tangible assets", defined as total assets less goodwill and other intangibles), and return on average tangible common equity (which is computed by dividing net income by average tangible common equity). The Company has included information on tangible book value per share, the tangible common equity ratio and return on average tangible common equity because management believes that investors may find it useful to have access to the same analytical tools used by management. As a result of merger and acquisition activity, the Company has recognized goodwill and other intangible assets in conjunction with business combination accounting principles. Excluding the impact of goodwill and other intangibles in measuring asset and capital values for the ratios provided, along with other bank standard capital ratios, provides a framework to compare the capital adequacy of the Company to other companies in the financial services industry. These non-GAAP measures should not be viewed as a substitute for operating results and other financial measures determined in accordance with GAAP. An item which management excludes when computing these non-GAAP measures can be of substantial importance to the Company’s results for any particular quarter or year. The Company’s non-GAAP performance measures, including operating net income, operating EPS, operating return on average assets, operating return on average common equity, core margin, tangible book value per share and the tangible common equity ratio, are not necessarily comparable to non-GAAP performance measures which may be presented by other companies. Category: Earnings Releases INDEPENDENT BANK CORP. FINANCIAL SUMMARY CONSOLIDATED BALANCE SHEETS (Unaudited, dollars in thousands) % Change % Change December 31 2023 September 30 2023 December 31 2022 Dec 2023 vs. Dec 2023 vs. Sept 2023 Dec 2022 Assets Cash and due from banks $ 178,861 $ 176,930 $ 175,843 1.09 % 1.72 % Interest-earning deposits with banks 45,469 43,198 177,090 5.26 % (74.32 ) % Securities Trading 4,987 4,476 3,888 11.42 % 28.27 % Equities 22,510 21,475 21,119 4.82 % 6.59 % Available for sale 1,334,256 1,353,744 1,399,154 (1.44 ) % (4.64 ) % Held to maturity 1,569,107 1,594,279 1,705,120 (1.58 ) % (7.98 ) % Total securities 2,930,860 2,973,974 3,129,281 (1.45 ) % (6.34 ) % Loans held for sale 6,368 3,998 2,803 59.28 % 127.19 % Loans Commercial and industrial 1,579,986 1,653,003 1,635,103 (4.42 ) % (3.37 ) % Commercial real estate 8,041,508 7,896,230 7,760,230 1.84 % 3.62 % Commercial construction 849,586 965,442 1,154,413 (12.00 ) % (26.41 ) % Small business 251,956 245,335 219,102 2.70 % 14.99 % Total commercial 10,723,036 10,760,010 10,768,848 (0.34 ) % (0.43 ) % Residential real estate 2,424,754 2,338,102 2,035,524 3.71 % 19.12 % Home equity - first position 518,706 529,938 566,166 (2.12 ) % (8.38 ) % Home equity - subordinate positions 578,920 565,617 522,584 2.35 % 10.78 % Total consumer real estate 3,522,380 3,433,657 3,124,274 2.58 % 12.74 % Other consumer 32,654 30,568 35,553 6.82 % (8.15 ) % Total loans 14,278,070 14,224,235 13,928,675 0.38 % 2.51 % Less: allowance for credit losses (142,222 ) (140,569 ) (152,419 ) 1.18 % (6.69 ) % Net loans 14,135,848 14,083,666 13,776,256 0.37 % 2.61 % Federal Home Loan Bank stock 43,557 43,878 5,218 (0.73 ) % 734.75 % Bank premises and equipment, net 193,049 191,560 196,504 0.78 % (1.76 ) % Goodwill 985,072 985,072 985,072 — % — % Other intangible assets 18,190 19,825 25,068 (8.25 ) % (27.44 ) % Cash surrender value of life insurance policies 297,387 295,670 293,323 0.58 % 1.39 % Other assets 512,712 550,338 527,716 (6.84 ) % (2.84 ) % Total assets $ 19,347,373 $ 19,368,109 $ 19,294,174 (0.11 ) % 0.28 % Liabilities and Stockholders' Equity Deposits Noninterest-bearing demand deposits $ 4,567,083 $ 4,796,148 $ 5,441,584 (4.78 ) % (16.07 ) % Savings and interest checking accounts 5,298,913 5,398,322 5,898,009 (1.84 ) % (10.16 ) % Money market 2,818,072 2,852,293 3,343,673 (1.20 ) % (15.72 ) % Time certificates of deposit 2,181,479 2,012,763 1,195,741 8.38 % 82.44 % Total deposits 14,865,547 15,059,526 15,879,007 (1.29 ) % (6.38 ) % Borrowings Federal Home Loan Bank borrowings 1,105,541 887,548 637 24.56 % nm Junior subordinated debentures, net 62,858 62,857 62,855 — % — % Subordinated debentures, net 49,980 49,957 49,885 0.05 % 0.19 % Total borrowings 1,218,379 1,000,362 113,377 21.79 % 974.63 % Total deposits and borrowings 16,083,926 16,059,888 15,992,384 0.15 % 0.57 % Other liabilities 368,196 422,813 415,089 (12.92 ) % (11.30 ) % Total liabilities 16,452,122 16,482,701 16,407,473 (0.19 ) % 0.27 % Stockholders' equity Common stock 427 440 455 (2.95 ) % (6.15 ) % Additional paid in capital 1,932,163 1,999,448 2,114,888 (3.37 ) % (8.64 ) % Retained earnings 1,077,488 1,046,266 934,442 2.98 % 15.31 % Accumulated other comprehensive loss, net of tax (114,827 ) (160,746 ) (163,084 ) (28.57 ) % (29.59 ) % Total stockholders' equity 2,895,251 2,885,408 2,886,701 0.34 % 0.30 % Total liabilities and stockholders' equity $ 19,347,373 $ 19,368,109 $ 19,294,174 (0.11 ) % 0.28 % CONSOLIDATED STATEMENTS OF INCOME (Unaudited, dollars in thousands, except per share data) Three Months Ended % Change % Change December 31 2023 September 30 2023 December 31 2022 Dec 2023 vs. Dec 2023 vs. Sept 2023 Dec 2022 Interest income Interest on federal funds sold and short-term investments $ 304 $ 905 $ 4,163 (66.41 ) % (92.70 ) % Interest and dividends on securities 14,631 14,818 15,789 (1.26 ) % (7.33 ) % Interest and fees on loans 192,178 187,145 164,153 2.69 % 17.07 % Interest on loans held for sale 57 60 22 (5.00 ) % 159.09 % Total interest income 207,170 202,928 184,127 2.09 % 12.51 % Interest expense Interest on deposits 49,456 40,713 14,325 21.47 % 245.24 % Interest on borrowings 12,618 12,335 1,447 2.29 % 772.01 % Total interest expense 62,074 53,048 15,772 17.01 % 293.57 % Net interest income 145,096 149,880 168,355 (3.19 ) % (13.82 ) % Provision for credit losses 5,500 5,500 5,500 — % — % Net interest income after provision for credit losses 139,596 144,380 162,855 (3.31 ) % (14.28 ) % Noninterest income Deposit account fees 6,126 5,936 5,788 3.20 % 5.84 % Interchange and ATM fees 4,638 4,808 4,282 (3.54 ) % 8.31 % Investment management 9,818 10,246 10,394 (4.18 ) % (5.54 ) % Mortgage banking income 609 739 526 (17.59 ) % 15.78 % Increase in cash surrender value of life insurance policies 2,091 1,983 2,136 5.45 % (2.11 ) % Gain on life insurance benefits 180 1,924 691 (90.64 ) % (73.95 ) % Loan level derivative income 802 842 1,421 (4.75 ) % (43.56 ) % Other noninterest income 7,803 7,065 7,064 10.45 % 10.46 % Total noninterest income 32,067 33,543 32,302 (4.40 ) % (0.73 ) % Noninterest expenses Salaries and employee benefits 56,388 54,797 53,754 2.90 % 4.90 % Occupancy and equipment expenses 13,054 12,321 12,586 5.95 % 3.72 % Data processing and facilities management 2,423 2,404 2,442 0.79 % (0.78 ) % FDIC assessment 3,942 2,727 1,726 44.55 % 128.39 % Other noninterest expenses 24,940 25,533 24,364 (2.32 ) % 2.36 % Total noninterest expenses 100,747 97,782 94,872 3.03 % 6.19 % Income before income taxes 70,916 80,141 100,285 (11.51 ) % (29.29 ) % Provision for income taxes 16,113 19,333 23,242 (16.66 ) % (30.67 ) % Net Income $ 54,803 $ 60,808 $ 77,043 (9.88 ) % (28.87 ) % Weighted average common shares (basic) 43,474,734 44,135,487 45,641,605 Common share equivalents 9,474 11,417 20,090 Weighted average common shares (diluted) 43,484,208 44,146,904 45,661,695 Basic earnings per share $ 1.26 $ 1.38 $ 1.69 (8.70 ) % (25.44 ) % Diluted earnings per share $ 1.26 $ 1.38 $ 1.69 (8.70 ) % (25.44 ) % Performance ratios Net interest margin (FTE) 3.38 % 3.47 % 3.85 % Return on average assets (calculated by dividing net income by average assets) 1.13 % 1.25 % 1.56 % Return on average common equity (calculated by dividing net income by average common equity) (GAAP) 7.51 % 8.35 % 10.70 % Return on average tangible common equity (Non-GAAP) (calculated by dividing net income by average tangible common equity) 11.50 % 12.81 % 16.57 % Noninterest income as a % of total revenue (calculated by dividing total noninterest income by net interest income plus total noninterest income) 18.10 % 18.29 % 16.10 % Efficiency ratio (calculated by dividing total noninterest expense by total revenue) 56.87 % 53.31 % 47.28 % CONSOLIDATED STATEMENTS OF INCOME (Unaudited, dollars in thousands, except per share data) Years Ended % Change December 31 2023 December 31 2022 Dec 2023 vs. Dec 2022 Interest income Interest on federal funds sold and short-term investments $ 5,186 $ 14,385 (63.95 ) % Interest and dividends on securities 60,342 50,360 19.82 % Interest and fees on loans 730,008 577,923 26.32 % Interest on loans held for sale 190 172 10.47 % Total interest income 795,726 642,840 23.78 % Interest expense Interest on deposits 144,752 24,652 487.18 % Interest on borrowings 44,453 4,939 800.04 % Total interest expense 189,205 29,591 539.40 % Net interest income 606,521 613,249 (1.10 ) % Provision for credit losses 23,250 6,500 257.69 % Net interest income after provision for credit losses 583,271 606,749 (3.87 ) % Noninterest income Deposit account fees 23,486 23,370 0.50 % Interchange and ATM fees 18,108 16,249 11.44 % Investment management 40,191 36,832 9.12 % Mortgage banking income 2,326 3,515 (33.83 ) % Increase in cash surrender value of life insurance policies 7,868 7,685 2.38 % Gain on life insurance benefits 2,291 1,291 77.46 % Loan level derivative income 3,327 2,932 13.47 % Other noninterest income 27,012 22,793 18.51 % Total noninterest income 124,609 114,667 8.67 % Noninterest expenses Salaries and employee benefits 222,135 204,711 8.51 % Occupancy and equipment expenses 50,582 49,841 1.49 % Data processing and facilities management 9,884 9,320 6.05 % FDIC assessment 11,953 6,951 71.96 % Merger and acquisition expense — 7,100 (100.00 ) % Other noninterest expenses 98,192 95,739 2.56 % Total noninterest expenses 392,746 373,662 5.11 % Income before income taxes 315,134 347,754 (9.38 ) % Provision for income taxes 75,632 83,941 (9.90 ) % Net Income $ 239,502 $ 263,813 (9.22 ) % Weighted average common shares (basic) 44,181,540 46,372,051 Common share equivalents 12,007 17,938 Weighted average common shares (diluted) 44,193,547 46,389,989 Basic earnings per share $ 5.42 $ 5.69 (4.75 ) % Diluted earnings per share $ 5.42 $ 5.69 (4.75 ) % Reconciliation of Net Income (GAAP) to Operating Net Income (Non-GAAP): Net Income $ 239,502 $ 263,813 Noninterest expense components Add - merger and acquisition expenses — 7,100 Noncore increases to income before taxes — 7,100 Net tax benefit associated with noncore items (1) — (1,995 ) Noncore increases to net income $ — $ 5,105 Operating net income (Non-GAAP) $ 239,502 $ 268,918 (10.94 ) % Diluted earnings per share, on an operating basis $ 5.42 $ 5.80 (6.55 ) % (1) The net tax benefit associated with noncore items is determined by assessing whether each noncore item is included or excluded from net taxable income and applying the Company's combined marginal tax rate to only those items included in net taxable income. Performance ratios Net interest margin (FTE) 3.54 % 3.46 % Return on average assets (GAAP) (calculated by dividing net income by average assets) 1.24 % 1.33 % Return on average assets on an operating basis (Non-GAAP) (calculated by dividing net operating net income by average assets) 1.24 % 1.35 % Return on average common equity (GAAP) (calculated by dividing net income by average common equity) 8.31 % 9.05 % Return on average common equity on an operating basis (Non-GAAP) (calculated by dividing net operating net income by average common equity) 8.31 % 9.22 % Return on average tangible common equity (GAAP) (calculated by dividing net income by average tangible common equity) 12.78 % 13.87 % Return on average tangible common equity on an operating basis (Non-GAAP) (calculated by dividing net operating net income by average tangible common equity) 12.78 % 14.14 % Noninterest income as a % of total revenue (calculated by dividing total noninterest income by net interest income plus total noninterest income) 17.04 % 15.75 % Noninterest income as a % of total revenue on an operating basis (Non-GAAP) (calculated by dividing total noninterest income on an operating basis by net interest income plus total noninterest income) 17.04 % 15.75 % Efficiency ratio (GAAP) (calculated by dividing total noninterest expense by total revenue) 53.72 % 51.33 % Efficiency ratio on an operating basis (Non-GAAP) (calculated by dividing total noninterest expense on an operating basis by total revenue) 53.72 % 50.36 % ASSET QUALITY (Unaudited, dollars in thousands) Nonperforming Assets At December 31 2023 September 30 2023 December 31 2022 Nonperforming loans Commercial & industrial loans $ 20,188 $ 2,953 $ 26,693 Commercial real estate loans 22,952 23,867 15,730 Small business loans 398 372 104 Residential real estate loans 7,634 8,493 8,479 Home equity 3,171 3,411 3,400 Other consumer 40 75 475 Total nonperforming loans 54,383 39,171 54,881 Other real estate owned 110 110 — Total nonperforming assets $ 54,493 $ 39,281 $ 54,881 Nonperforming loans/gross loans 0.38 % 0.28 % 0.39 % Nonperforming assets/total assets 0.28 % 0.20 % 0.28 % Allowance for credit losses/nonperforming loans 261.52 % 358.86 % 277.73 % Allowance for credit losses/total loans 1.00 % 0.99 % 1.09 % Delinquent loans/total loans 0.44 % 0.22 % 0.30 % Nonperforming Assets Reconciliation for the Three Months Ended December 31 2023 September 30 2023 December 31 2022 Nonperforming assets beginning balance $ 39,281 $ 45,812 $ 56,017 New to nonperforming 31,823 3,455 5,734 Loans charged-off (4,182 ) (6,018 ) (660 ) Loans paid-off (10,905 ) (2,915 ) (2,448 ) Loans restored to performing status (1,534 ) (1,428 ) (3,846 ) Other 10 375 84 Nonperforming assets ending balance $ 54,493 $ 39,281 $ 54,881 Net Charge-Offs (Recoveries) Three Months Ended Years Ended December 31 2023 September 30 2023 December 31 2022 December 31 2023 December 31 2022 Net charge-offs (recoveries) Commercial and industrial loans $ 80 $ (111 ) $ (5 ) $ 23,419 $ (49 ) Commercial real estate loans 2,783 5,072 — 7,855 (271 ) Small business loans 267 77 135 392 47 Home equity 23 (12 ) (16 ) (15 ) 1 Other consumer 694 552 280 1,796 1,275 Total net charge-offs (recoveries) $ 3,847 $ 5,578 $ 394 $ 33,447 $ 1,003 Net charge-offs (recoveries) to average loans (annualized) 0.11 % 0.16 % 0.01 % 0.24 % 0.01 % nm = not meaningful BALANCE SHEET AND CAPITAL RATIOS December 31 2023 September 30 2023 December 31 2022 Gross loans/total deposits 96.05 % 94.45 % 87.72 % Common equity tier 1 capital ratio (1) 14.19 % 14.42 % 14.33 % Tier 1 leverage capital ratio (1) 10.97 % 11.12 % 10.99 % Common equity to assets ratio GAAP 14.96 % 14.90 % 14.96 % Tangible common equity to tangible assets ratio (2) 10.31 % 10.24 % 10.26 % Book value per share GAAP $ 67.53 $ 65.37 $ 63.25 Tangible book value per share (2) $ 44.13 $ 42.60 $ 41.12 (1) Estimated number for December 31, 2023. (2) See Appendix A for detailed reconciliation from GAAP to Non-GAAP ratios. INDEPENDENT BANK CORP. SUPPLEMENTAL FINANCIAL INFORMATION (Unaudited, dollars in thousands) Three Months Ended December 31, 2023 September 30, 2023 December 31, 2022 Interest Interest Interest Average Earned/ Yield/ Average Earned/ Yield/ Average Earned/ Yield/ Balance Paid (1) Rate Balance Paid (1) Rate Balance Paid (1) Rate Interest-earning assets Interest-earning deposits with banks, federal funds sold, and short term investments $ 42,391 $ 304 2.85 % $ 89,449 $ 905 4.01 % $ 466,691 $ 4,163 3.54 % Securities Securities - trading 4,509 — — % 4,546 — — % 3,732 — — % Securities - taxable investments 2,923,983 14,629 1.98 % 3,000,736 14,817 1.96 % 3,147,635 15,787 1.99 % Securities - nontaxable investments (1) 186 2 4.27 % 188 1 2.11 % 189 2 4.20 % Total securities $ 2,928,678 $ 14,631 1.98 % $ 3,005,470 $ 14,818 1.96 % $ 3,151,556 $ 15,789 1.99 % Loans held for sale 3,614 57 6.26 % 4,072 60 5.85 % 1,607 22 5.43 % Loans Commercial and industrial (1) 1,600,886 28,990 7.18 % 1,682,000 30,739 7.25 % 1,560,885 23,258 5.91 % Commercial real estate (1) 7,956,103 100,331 5.00 % 7,823,525 94,861 4.81 % 7,732,925 88,508 4.54 % Commercial construction 895,313 15,932 7.06 % 1,007,814 16,829 6.62 % 1,223,695 17,205 5.58 % Small business 246,411 3,956 6.37 % 240,782 3,752 6.18 % 213,384 2,995 5.57 % Total commercial 10,698,713 149,209 5.53 % 10,754,121 146,181 5.39 % 10,730,889 131,966 4.88 % Residential real estate 2,380,706 24,712 4.12 % 2,276,882 23,197 4.04 % 2,001,042 18,334 3.64 % Home equity 1,097,233 18,747 6.78 % 1,093,479 18,313 6.64 % 1,088,846 14,339 5.22 % Total consumer real estate 3,477,939 43,459 4.96 % 3,370,361 41,510 4.89 % 3,089,888 32,673 4.20 % Other consumer 32,141 667 8.23 % 30,775 608 7.84 % 34,638 595 6.82 % Total loans $ 4,208,793 $ 193,335 5.40 % $ 14,155,257 $ 188,299 5.28 % $ 13,855,415 $ 165,234 4.73 % Total interest-earning assets $ 17,183,476 $ 208,327 4.81 % $ 17,254,248 $ 204,082 4.69 % $ 17,475,269 $ 185,208 4.20 % Cash and due from banks 178,100 184,003 184,985 Federal Home Loan Bank stock 37,054 38,252 5,218 Other assets 1,883,317 1,859,099 1,871,241 Total assets $ 19,281,947 $ 19,335,602 $ 19,536,713 Interest-bearing liabilities Deposits Savings and interest checking accounts $ 5,323,667 $ 14,315 1.07 % $ 5,393,209 $ 11,860 0.87 % $ 5,966,326 $ 4,921 0.33 % Money market 2,851,343 15,197 2.11 % 2,945,450 13,709 1.85 % 3,408,441 7,492 0.87 % Time deposits 2,103,666 19,944 3.76 % 1,860,440 15,144 3.23 % 1,175,667 1,912 0.65 % Total interest-bearing deposits $ 10,278,676 $ 49,456 1.91 % $ 10,199,099 $ 40,713 1.58 % $ 10,550,434 $ 14,325 0.54 % Borrowings Federal Home Loan Bank borrowings 884,441 10,836 4.86 % 869,646 10,568 4.82 % 639 2 1.24 % Junior subordinated debentures 62,857 1,164 7.35 % 62,857 1,150 7.26 % 62,855 827 5.22 % Subordinated debentures 49,968 618 4.91 % 49,944 617 4.90 % 49,873 618 4.92 % Total borrowings $ 997,266 $ 12,618 5.02 % $ 982,447 $ 12,335 4.98 % $ 113,367 $ 1,447 5.06 % Total interest-bearing liabilities $ 11,275,942 $ 62,074 2.18 % $ 11,181,546 $ 53,048 1.88 % $ 10,663,801 $ 15,772 0.59 % Noninterest-bearing demand deposits 4,704,888 4,883,009 5,606,055 Other liabilities 406,029 381,483 410,679 Total liabilities $ 16,386,859 $ 16,446,038 $ 16,680,535 Stockholders' equity 2,895,088 2,889,564 2,856,178 Total liabilities and stockholders' equity $ 19,281,947 $ 19,335,602 $ 19,536,713 Net interest income $ 146,253 $ 151,034 $ 169,436 Interest rate spread (2) 2.63 % 2.81 % 3.61 % Net interest margin (3) 3.38 % 3.47 % 3.85 % Supplemental Information Total deposits, including demand deposits $ 14,983,564 $ 49,456 $ 15,082,108 $ 40,713 $ 16,156,489 $ 14,325 Cost of total deposits 1.31 % 1.07 % 0.35 % Total funding liabilities, including demand deposits $ 15,980,830 $ 62,074 $ 16,064,555 $ 53,048 $ 16,269,856 $ 15,772 Cost of total funding liabilities 1.54 % 1.31 % 0.38 % (1) The total amount of adjustment to present interest income and yield on a fully tax-equivalent basis is $1.2 million, $1.2 million, and $1.1 million for the three months ended December 31, 2023, September 30, 2023, and December 31, 2022, 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. Years Ended December 31, 2023 December 31, 2022 Interest Interest Average Earned/ Yield/ Average Earned/ Yield/ Balance Paid Rate Balance Paid Rate Interest-earning assets Interest earning deposits with banks, federal funds sold, and short term investments $ 118,806 $ 5,186 4.37 % $ 1,222,434 $ 14,385 1.18 % Securities Securities - trading 4,411 — — % 3,764 — — % Securities - taxable investments 3,027,769 60,336 1.99 % 2,948,358 50,354 1.71 % Securities - nontaxable investments (1) 190 7 3.68 % 196 7 3.57 % Total securities $ 3,032,370 $ 60,343 1.99 % $ 2,952,318 $ 50,361 1.71 % Loans held for sale 3,289 190 5.78 % 4,774 172 3.60 % Loans Commercial and industrial (1) 1,646,939 115,752 7.03 % 1,538,848 77,074 5.01 % Commercial real estate (1) 7,839,476 376,586 4.80 % 7,807,427 326,593 4.18 % Commercial construction 1,019,871 66,440 6.51 % 1,191,394 57,804 4.85 % Small business 235,108 14,428 6.14 % 204,982 10,886 5.31 % Total commercial 10,741,394 573,206 5.34 % 10,742,651 472,357 4.40 % Residential real estate 2,217,971 88,210 3.98 % 1,831,493 63,443 3.46 % Home equity 1,093,546 70,698 6.47 % 1,061,228 44,048 4.15 % Total consumer real estate 3,311,517 158,908 4.80 % 2,892,721 107,491 3.72 % Other consumer 31,202 2,418 7.75 % 31,986 2,114 6.61 % Total loans $ 14,084,113 $ 734,532 5.22 % $ 13,667,358 $ 581,962 4.26 % Total interest-earning assets $ 17,238,578 $ 800,251 4.64 % $ 17,846,884 $ 646,880 3.62 % Cash and due from banks 180,553 184,812 Federal Home Loan Bank stock 33,734 7,134 Other assets 1,853,585 1,858,210 Total assets $ 19,306,450 $ 19,897,040 Interest-bearing liabilities Deposits Savings and interest checking accounts $ 5,489,923 $ 43,073 0.78 % $ 6,159,289 $ 8,339 0.14 % Money market 3,022,322 51,630 1.71 % 3,489,981 11,683 0.33 % Time deposits 1,724,625 50,050 2.90 % 1,310,442 4,630 0.35 % Total interest-bearing deposits $ 10,236,870 $ 144,753 1.41 % $ 10,959,712 $ 24,652 0.22 % Borrowings Federal Home Loan Bank borrowings 782,121 37,624 4.81 % 16,138 313 1.94 % Long-term borrowings — — — % 2,235 31 1.39 % Junior subordinated debentures 62,857 4,359 6.93 % 62,854 2,125 3.38 % Subordinated debentures 49,933 2,470 4.95 % 49,837 2,470 4.96 % Total borrowings $ 894,911 $ 44,453 4.97 % $ 131,064 $ 4,939 3.77 % Total interest-bearing liabilities $ 11,131,781 $ 189,206 1.70 % $ 11,090,776 $ 29,591 0.27 % Noninterest-bearing demand deposits 4,918,787 5,559,997 Other liabilities 374,585 330,371 Total liabilities $ 16,425,153 $ 16,981,144 Stockholders' equity 2,881,297 2,915,896 Total liabilities and stockholders' equity $ 19,306,450 $ 19,897,040 Net interest income $ 611,045 $ 617,289 Interest rate spread (2) 2.94 % 3.35 % Net interest margin (3) 3.54 % 3.46 % Supplemental Information Total deposits, including demand deposits $ 15,155,657 $ 144,753 $ 16,519,709 $ 24,652 Cost of total deposits 0.96 % 0.15 % Total funding liabilities, including demand deposits $ 16,050,568 $ 189,206 $ 16,650,773 $ 29,591 Cost of total funding liabilities 1.18 % 0.18 % (1) The total amount of adjustment to present interest income and yield on a fully tax-equivalent basis is $4.5 million and $4.0 million for the years ended months ended December 31, 2023 and 2022, 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: December 31 2023 September 30 2023 December 31 2022 Tangible common equity (Dollars in thousands, except per share data) Stockholders' equity (GAAP) $ 2,895,251 $ 2,885,408 $ 2,886,701 (a) Less: Goodwill and other intangibles 1,003,262 1,004,897 1,010,140 Tangible common equity (Non-GAAP) $ 1,891,989 $ 1,880,511 $ 1,876,561 (b) Tangible assets Assets (GAAP) $ 19,347,373 $ 19,368,109 $ 19,294,174 (c) Less: Goodwill and other intangibles 1,003,262 1,004,897 1,010,140 Tangible assets (Non-GAAP) $ 18,344,111 $ 18,363,212 $ 18,284,034 (d) Common Shares 42,873,187 44,141,973 45,641,238 (e) Common equity to assets ratio (GAAP) 14.96 % 14.90 % 14.96 % (a/c) Tangible common equity to tangible assets ratio (Non-GAAP) 10.31 % 10.24 % 10.26 % (b/d) Book value per share (GAAP) $ 67.53 $ 65.37 $ 63.25 (a/e) Tangible book value per share (Non-GAAP) $ 44.13 $ 42.60 $ 41.12 (b/e) APPENDIX B: Non-GAAP Reconciliation of Earnings Metrics (Unaudited, dollars in thousands) The following table summarizes the impact of noncore items on the Company's calculation of noninterest income and noninterest expense, the impact of noncore items on noninterest income as a percentage of total revenue and the efficiency ratio, as well as the average tangible common equity used to calculate return on average tangible common equity and operating return on tangible common equity for the periods indicated: Three Months Ended Years Ended December 31 2023 September 30 2023 December 31 2022 December 31 2023 December 31 2022 Net interest income (GAAP) $ 145,096 $ 149,880 $ 168,355 $ 606,521 $ 613,249 Noninterest income (GAAP) $ 32,067 $ 33,543 $ 32,302 $ 124,609 $ 114,667 Noninterest income on an operating basis (Non-GAAP) $ 32,067 $ 33,543 $ 32,302 $ 124,609 $ 114,667 Noninterest expense (GAAP) 100,747 $ 97,782 $ 94,872 $ 392,746 $ 373,662 Less: Merger and acquisition expense — — — — 7,100 Noninterest expense on an operating basis (Non-GAAP) $ 100,747 $ 97,782 $ 94,872 $ 392,746 $ 366,562 Total revenue (GAAP) $ 177,163 $ 183,423 $ 200,657 $ 731,130 $ 727,916 Total operating revenue (Non-GAAP) $ 177,163 $ 183,423 $ 200,657 $ 731,130 $ 727,916 Net income (GAAP) $ 54,803 $ 60,808 $ 77,043 $ 239,502 $ 263,813 Operating net income (Non-GAAP) (See income statement for reconciliation of GAAP to Non-GAAP) $ 54,803 $ 60,808 $ 77,043 $ 239,502 $ 268,918 Average common equity (GAAP) $ 2,895,088 $ 2,889,564 $ 2,856,178 $ 2,881,297 $ 2,915,896 Less: Average goodwill and other intangibles 1,004,081 1,005,778 1,011,091 1,006,658 1,014,045 Tangible average tangible common equity (Non-GAAP) $ 1,891,007 $ 1,883,786 $ 1,845,087 $ 1,874,639 $ 1,901,851 Ratios Noninterest income as a % of total revenue (GAAP) (calculated by dividing total noninterest income by total revenue) 18.10 % 18.29 % 16.10 % 17.04 % 15.75 % Noninterest income as a % of total revenue on an operating basis (Non-GAAP) (calculated by dividing total noninterest income on an operating basis by total revenue) 18.10 % 18.29 % 16.10 % 17.04 % 15.75 % Efficiency ratio (GAAP) (calculated by dividing total noninterest expense by total revenue) 56.87 % 53.31 % 47.28 % 53.72 % 51.33 % Efficiency ratio on an operating basis (Non-GAAP) (calculated by dividing total noninterest expense on an operating basis by total revenue) 56.87 % 53.31 % 47.28 % 53.72 % 50.36 % Return on average tangible common equity (Non-GAAP) (calculated by dividing annualized net income by average tangible common equity) 11.50 % 12.81 % 16.57 % 12.78 % 13.87 % Return on average tangible common equity on an operating basis (Non-GAAP) (calculated by dividing annualized net operating net income by average tangible common equity) 11.50 % 12.81 % 16.57 % 12.78 % 14.14 % APPENDIX C: Net Interest Margin Analysis & Non-GAAP Reconciliation of Core Margin Three Months Ended December 31, 2023 September 30, 2023 Volume Interest Margin Impact Volume Interest Margin Impact (Dollars in thousands) Reported total interest earning assets $ 17,183,476 $ 146,253 3.38 % $ 17,254,248 $ 151,034 3.47 % Acquisition fair value marks: Loan accretion (1,156 ) (330 ) CD amortization 11 11 (1,145 ) (0.03 ) % (319 ) — % Nonaccrual interest, net 549 0.01 % 67 — % Other noncore adjustments (4,913 ) (574 ) (0.01 ) % (5,448 ) (77 ) — % Core margin (Non-GAAP) $ 17,178,563 $ 145,083 3.35 % $ 17,248,800 $ 150,705 3.47 % View source version on businesswire.com: https://www.businesswire.com/news/home/20240117623955/en/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
Independent Bank Corp. (Nasdaq Global Select Market: INDB), parent of Rockland Trust Company, today announced 2023 fourth quarter net income of $54.8 million, or $1.26 per diluted share, a decrease of $6.0 million, or 9.9%, compared to the prior quarter. Full year net income was $239.5 million, or $5.42 on a diluted earnings per share basis, a decrease of $24.3 million, or 9.2%, as compared to the prior year. In 2023, full year operating net income was also $239.5 million, or $5.42 on a diluted earnings per share basis, as no adjustments were recognized. In 2022, full year operating net income was $268.9 million, or $5.80 on a diluted earnings per share basis, which excluded non-core adjustments associated with the Company's fourth quarter 2021 acquisition of Meridian Bancorp, Inc. ("Meridian") and its subsidiary, East Boston Savings Bank. 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. The Company generated a return on average assets and a return on average common equity of 1.13% and 7.51%, respectively, for the fourth quarter of 2023, as compared to 1.25% and 8.35%, respectively, for the prior quarter. For the full year 2023, the Company generated a return on average assets and return on average common equity of 1.24% and 8.31%, respectively, as compared to 1.33% and 9.05%, respectively, for 2022, or 1.24% and 8.31%, respectively, on an operating basis for 2023, compared to 1.35% and 9.22%, respectively, on an operating basis for 2022. “The dedication of my colleagues and their unrelenting focus on each relationship, day in and day out, paved the way for the solid financial results we achieved throughout this past year,” said Jeffrey Tengel, the Chief Executive Officer of Independent Bank Corp. and Rockland Trust Company. “I am confident that our core fundamentals position us well for continued success heading into 2024 and beyond.” BALANCE SHEET Total assets of $19.3 billion at December 31, 2023 remained relatively consistent with the prior quarter and increased by $53.2 million, or 0.3%, as compared to December 31, 2022. Total loans at December 31, 2023 of $14.3 billion increased by $53.8 million, or 0.4% (1.5% annualized), compared to the prior quarter level. The increase was driven primarily by consumer real estate, which increased $88.7 million, or 2.6% (10.3% annualized) for the quarter, largely attributable to adjustable-rate residential mortgages retained on the balance sheet. Total commercial loans decreased by $37.0 million, or 0.3% (1.4% annualized), compared to the prior quarter, primarily reflecting disciplined new origination activity, offset by commercial and industrial payoffs and decreased line utilization. The small business portfolio continued its steady growth and has risen by 15.0% since December 31, 2022. Deposit balances of $14.9 billion at December 31, 2023 decreased by $194.0 million, or 1.3%, from September 30, 2023, driven primarily by seasonal business cash flows. Though some level of product remixing persists, total noninterest bearing demand deposits comprised a healthy 30.7% of total deposits at December 31, 2023. Core deposits, inclusive of reciprocal money market deposits, represented 84.6% of total deposits at December 31, 2023 as compared to 86.0% at September 30, 2023. The total cost of deposits for the fourth quarter increased 24 basis points to 1.31% compared to the prior quarter, reflective of ongoing customer preference for higher yielding accounts. In conjunction with the decline in deposit balances, the Company's Federal Home Loan Bank borrowings increased by $218.0 million, or 21.8%, during the fourth quarter of 2023 to serve as a funding source for stock buyback activity and net loan growth during the quarter. The securities portfolio decreased by $43.1 million, or 1.4%, compared to September 30, 2023, driven primarily by paydowns, calls, and maturities which were partially offset by unrealized gains of $45.2 million in the available for sale portfolio. Total securities represented 15.1% of total assets at December 31, 2023, as compared to 15.4% at September 30, 2023. During the fourth quarter of 2023, the Company executed on its previously announced $100 million stock repurchase plan, buying back 1.3 million shares of common stock for $69.0 million at an average price per share of $53.73. Stockholders' equity at December 31, 2023 remained generally consistent when compared to September 30, 2023, as the impact of the share repurchase program was offset by strong earnings retention and 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 14.96% at December 31, 2023 represented an increase of 6 basis points, or 0.4%, from September 30, 2023 and was consistent with the level at December 31, 2022. The Company's book value per share increased by $2.16, or 3.3%, to $67.53 at December 31, 2023 as compared to the prior quarter. The Company's tangible book value per share at December 31, 2023 rose by $1.53, or 3.6%, from the prior quarter to $44.13, and represented an increase of 7.3% from the year ago period. The Company's ratio of tangible common equity to tangible assets of 10.31% at December 31, 2023 represented an increase of 7 basis points from the prior quarter and an increase of 5 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 fourth quarter of 2023 decreased 3.2% to $145.1 million compared to $149.9 million for the prior quarter, as rising deposit costs continued to counter the benefit of repriced assets resulting in a reduction in net interest margin of 9 basis points to 3.38% for the quarter. The core margin (excluding purchase accounting and other non-core items) was 3.35% for the fourth quarter, representing a reduction of 12 basis points as compared to the prior quarter. Please refer to Appendix C for additional details regarding the net interest margin and Non-GAAP reconciliation of core margin. NONINTEREST INCOME Noninterest income of $32.1 million for the fourth quarter of 2023 represented a decrease of $1.5 million, or 4.4%, as compared to the prior quarter. Significant changes in noninterest income for the fourth quarter of 2023 compared to the prior quarter included the following: Investment management income decreased by $428,000, or 4.2%, primarily driven by lower insurance commissions. However, total assets under administration increased by $417.4 million, or 6.8%, to a record level of $6.5 billion at December 31, 2023, driving higher managed fee income quarter over quarter. The Company received proceeds on life insurance policies resulting in gains of $180,000 for the fourth quarter, as compared to gains of $1.9 million in the prior quarter. Other noninterest income increased by $738,000, or 10.4%, primarily due to unrealized gains on equity securities and discounted purchases of tax credits, as well as outsized loan fees recognized during the third quarter of 2023. NONINTEREST EXPENSE Noninterest expense of $100.7 million for the fourth quarter of 2023 represented an increase of $3.0 million, or 3.0%, as compared to the prior quarter. Significant changes in noninterest expense for the fourth quarter compared to the prior quarter included the following: Salaries and employee benefits increased by $1.6 million, or 2.9%, due primarily to timing of incentive compensation. Occupancy and equipment expenses increased by $733,000, or 5.9%, due primarily to one-time termination costs associated with two leased locations related to the 2021 Meridian acquisition. FDIC assessment increased $1.2 million, or 44.6%, from the prior quarter, and includes a one-time $1.1 million special assessment implemented by the FDIC to recover losses incurred by the Deposit Insurance Fund in 2023. Other noninterest expense decreased by $593,000, or 2.3%, due primarily to decreases in consultant fees, unrealized losses on equity securities, and card issuance costs, partially offset by increases in check fraud losses, software maintenance and legal costs. The Company’s tax rate for the fourth quarter of 2023 decreased to 22.72%, compared to 24.12% for the prior quarter. The fourth quarter decline was due to the recognition of discrete items in the quarter associated with low income housing tax investments and the release of certain tax reserves in conjunction with the final 2022 tax return filing. ASSET QUALITY The fourth quarter provision for credit losses was consistent with the prior quarter at $5.5 million. Net charge-offs declined to $3.8 million for the fourth quarter of 2023 compared to $5.6 million in the prior quarter and were largely attributable to one partial charge-off of a commercial real estate loan and general overdraft loan charge-offs. Nonperforming loans increased to $54.4 million, or 0.38% of total loans at December 31, 2023, as compared to $39.2 million, or 0.28% of total loans at September 30, 2023, driven primarily by the migration of two commercial loans totaling $25.9 million, offset by paydowns during the quarter. Delinquency as a percentage of total loans increased 22 basis points from the prior quarter to 0.44% at December 31, 2023. The allowance for credit losses on total loans increased slightly to $142.2 million at December 31, 2023 compared to $140.6 million at September 30, 2023, or 1.00% and 0.99% of total loans, at December 31, 2023 and September 30, 2023, 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 fourth quarter earnings at 10:00 a.m. Eastern Time on Friday, January 19, 2024. Internet access to the call is available on the Company’s website at https://INDB.RocklandTrust.com or via telephonic access by dial-in at 1-888-336-7153 reference: INDB. A replay of the call will be available by calling 1-877-344-7529, Replay Conference Number: 9516407 and will be available through January 26, 2024. Additionally, a webcast replay will be available on the Company's website until January 19, 2025. ABOUT INDEPENDENT BANK CORP. Independent Bank Corp. (NASDAQ Global Select Market: INDB) is the holding company for Rockland Trust Company, a full-service commercial bank headquartered in 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 was named to The Boston Globe's "Top Places to Work" 2023 list, an honor earned for the 15th consecutive year. 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 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: further weakening in the United States economy in general and the regional and local economies within the New England region and the Company’s market area; the effects to the Company or its customers of inflationary pressures, labor market shortages and supply chain issues; the instability or volatility in financial markets and unfavorable general economic or business conditions, globally, nationally or regionally, whether caused by geopolitical concerns, including the Russia/Ukraine conflict, the conflict in Israel and surrounding areas and the possible expansion of such conflicts, recent disruptions in the banking industry, or other factors, and the potential impact of unfavorable economic conditions on the Company and its customers, including the potential for decreases in deposits and loan demand, unanticipated loan delinquencies, loss of collateral and decreased service revenues; unanticipated loan delinquencies, loss of collateral, decreased service revenues, and other potential negative effects on our business caused by severe weather, pandemics or other external events; adverse changes or volatility in the local real estate market; rising interest rates and any resultant adverse changes in asset quality, increased credit risks, decreased loan demand, and/or refinancing challenges, which in turn could further lead to unanticipated credit deterioration in the Company's loan portfolio, including with respect to one or more large commercial relationships; acquisitions may not produce results at levels or within time frames originally anticipated and may result in unforeseen integration issues or impairment of goodwill and/or other intangibles; additional regulatory oversight and related compliance costs; changes in trade, monetary and fiscal policies and laws, including interest rate policies of the Board of Governors of the Federal Reserve System; higher than expected tax expense, including as a result of failure to comply with general tax laws and changes in tax laws; changes in market interest rates for interest earning assets and/or interest bearing liabilities; increased competition in the Company’s market areas, including competition that could impact deposit gathering, retention of deposits and the cost of deposits, increased competition due to the demand for innovative products and service offerings, and competition from non-depository institutions which may be subject to fewer regulatory constraints and lower cost structures; adverse weather, changes in climate, natural disasters, including the risk of floods and fire; the emergence of widespread health emergencies or pandemics, any further resurgences or variants of the "COVID-19 virus", actions taken by governmental authorities in response thereto, other public health crises or man-made events, and their impact on the Company's local economies or the Company's operations; a deterioration in the conditions of the securities markets; a deterioration of the credit rating for U.S. long-term sovereign debt or uncertainties surrounding the federal budget; inability to adapt to changes in information technology, including changes to industry accepted delivery models driven by a migration to the internet as a means of service delivery; electronic or other fraudulent activity within the financial services industry, especially in the commercial banking sector; adverse changes in consumer spending and savings habits; the effect of laws and regulations regarding the financial services industry, including the need to invest in technology to meet heightened regulatory expectations or introduction of new requirements or expectations resulting in increased costs of compliance or required adjustments to strategy; changes in laws and regulations (including laws and regulations concerning taxes, banking, securities and insurance) generally applicable to the Company’s business, including any such changes in laws and regulations as a result of recent disruptions in the banking industry, and the associated costs of such changes; the Company's potential judgments, claims, damages, penalties, fines and reputational damage resulting from pending or future litigation and regulatory and government actions; changes in accounting policies, practices and standards, as may be adopted by the regulatory agencies as well as the Public Company Accounting Oversight Board, the Financial Accounting Standards Board, and other accounting standard setters; operational risks related to cyber threats, attacks, intrusions, and fraud which could lead to interruptions or disruptions of the Company's operating systems, including systems that are customer facing, and adversely impact the Company's business; and other unexpected material adverse changes in the Company's operations or earnings. The Company wishes to caution readers not to place undue reliance on any forward-looking statements as the Company’s business and its forward-looking statements involve substantial known and unknown risks and uncertainties described in the Company’s Annual Report on Form 10-K and subsequent Quarterly Reports on Form 10-Q ("Risk Factors"). Except as required by law, the Company disclaims any intent or obligation to update publicly any such forward-looking statements, whether in response to new information, future events or otherwise. Any public statements or disclosures by the Company following this release which modify or impact any of the forward-looking statements contained in this release will be deemed to modify or supersede such statements in this release. In addition to the information set forth in this press release, you should carefully consider the Risk Factors. This press release and the appendices attached to it contain financial information determined by methods other than in accordance with accounting principles generally accepted in 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. Operating net income, operating EPS, operating return on average assets and operating return on average common equity, exclude items that management believes are unrelated to the Company's core banking business such as merger and acquisition expenses, and other items, if applicable. Management uses operating net income and related ratios and operating EPS to measure the strength of the Company’s core banking business and to identify trends that may to some extent be obscured by such items. Management reviews its core margin to determine any items that may impact the net interest margin that may be one-time in nature or not reflective of its core operating environment, such as significant purchase accounting adjustments or other adjustments such as nonaccrual interest reversals/recoveries and prepayment penalties. Management believes that adjusting for these items to arrive at a core margin provides additional insight into the operating environment and how management decisions impact the net interest margin. Management also supplements its evaluation of financial performance with analysis of tangible book value per share (which is computed by dividing stockholders' equity less goodwill and identifiable intangible assets, or "tangible common equity", by common shares outstanding), the tangible common equity ratio (which is computed by dividing tangible common equity by "tangible assets", defined as total assets less goodwill and other intangibles), and return on average tangible common equity (which is computed by dividing net income by average tangible common equity). The Company has included information on tangible book value per share, the tangible common equity ratio and return on average tangible common equity because management believes that investors may find it useful to have access to the same analytical tools used by management. As a result of merger and acquisition activity, the Company has recognized goodwill and other intangible assets in conjunction with business combination accounting principles. Excluding the impact of goodwill and other intangibles in measuring asset and capital values for the ratios provided, along with other bank standard capital ratios, provides a framework to compare the capital adequacy of the Company to other companies in the financial services industry. These non-GAAP measures should not be viewed as a substitute for operating results and other financial measures determined in accordance with GAAP. An item which management excludes when computing these non-GAAP measures can be of substantial importance to the Company’s results for any particular quarter or year. The Company’s non-GAAP performance measures, including operating net income, operating EPS, operating return on average assets, operating return on average common equity, core margin, tangible book value per share and the tangible common equity ratio, are not necessarily comparable to non-GAAP performance measures which may be presented by other companies. Category: Earnings Releases INDEPENDENT BANK CORP. FINANCIAL SUMMARY CONSOLIDATED BALANCE SHEETS (Unaudited, dollars in thousands) % Change % Change December 31 2023 September 30 2023 December 31 2022 Dec 2023 vs. Dec 2023 vs. Sept 2023 Dec 2022 Assets Cash and due from banks $ 178,861 $ 176,930 $ 175,843 1.09 % 1.72 % Interest-earning deposits with banks 45,469 43,198 177,090 5.26 % (74.32 ) % Securities Trading 4,987 4,476 3,888 11.42 % 28.27 % Equities 22,510 21,475 21,119 4.82 % 6.59 % Available for sale 1,334,256 1,353,744 1,399,154 (1.44 ) % (4.64 ) % Held to maturity 1,569,107 1,594,279 1,705,120 (1.58 ) % (7.98 ) % Total securities 2,930,860 2,973,974 3,129,281 (1.45 ) % (6.34 ) % Loans held for sale 6,368 3,998 2,803 59.28 % 127.19 % Loans Commercial and industrial 1,579,986 1,653,003 1,635,103 (4.42 ) % (3.37 ) % Commercial real estate 8,041,508 7,896,230 7,760,230 1.84 % 3.62 % Commercial construction 849,586 965,442 1,154,413 (12.00 ) % (26.41 ) % Small business 251,956 245,335 219,102 2.70 % 14.99 % Total commercial 10,723,036 10,760,010 10,768,848 (0.34 ) % (0.43 ) % Residential real estate 2,424,754 2,338,102 2,035,524 3.71 % 19.12 % Home equity - first position 518,706 529,938 566,166 (2.12 ) % (8.38 ) % Home equity - subordinate positions 578,920 565,617 522,584 2.35 % 10.78 % Total consumer real estate 3,522,380 3,433,657 3,124,274 2.58 % 12.74 % Other consumer 32,654 30,568 35,553 6.82 % (8.15 ) % Total loans 14,278,070 14,224,235 13,928,675 0.38 % 2.51 % Less: allowance for credit losses (142,222 ) (140,569 ) (152,419 ) 1.18 % (6.69 ) % Net loans 14,135,848 14,083,666 13,776,256 0.37 % 2.61 % Federal Home Loan Bank stock 43,557 43,878 5,218 (0.73 ) % 734.75 % Bank premises and equipment, net 193,049 191,560 196,504 0.78 % (1.76 ) % Goodwill 985,072 985,072 985,072 — % — % Other intangible assets 18,190 19,825 25,068 (8.25 ) % (27.44 ) % Cash surrender value of life insurance policies 297,387 295,670 293,323 0.58 % 1.39 % Other assets 512,712 550,338 527,716 (6.84 ) % (2.84 ) % Total assets $ 19,347,373 $ 19,368,109 $ 19,294,174 (0.11 ) % 0.28 % Liabilities and Stockholders' Equity Deposits Noninterest-bearing demand deposits $ 4,567,083 $ 4,796,148 $ 5,441,584 (4.78 ) % (16.07 ) % Savings and interest checking accounts 5,298,913 5,398,322 5,898,009 (1.84 ) % (10.16 ) % Money market 2,818,072 2,852,293 3,343,673 (1.20 ) % (15.72 ) % Time certificates of deposit 2,181,479 2,012,763 1,195,741 8.38 % 82.44 % Total deposits 14,865,547 15,059,526 15,879,007 (1.29 ) % (6.38 ) % Borrowings Federal Home Loan Bank borrowings 1,105,541 887,548 637 24.56 % nm Junior subordinated debentures, net 62,858 62,857 62,855 — % — % Subordinated debentures, net 49,980 49,957 49,885 0.05 % 0.19 % Total borrowings 1,218,379 1,000,362 113,377 21.79 % 974.63 % Total deposits and borrowings 16,083,926 16,059,888 15,992,384 0.15 % 0.57 % Other liabilities 368,196 422,813 415,089 (12.92 ) % (11.30 ) % Total liabilities 16,452,122 16,482,701 16,407,473 (0.19 ) % 0.27 % Stockholders' equity Common stock 427 440 455 (2.95 ) % (6.15 ) % Additional paid in capital 1,932,163 1,999,448 2,114,888 (3.37 ) % (8.64 ) % Retained earnings 1,077,488 1,046,266 934,442 2.98 % 15.31 % Accumulated other comprehensive loss, net of tax (114,827 ) (160,746 ) (163,084 ) (28.57 ) % (29.59 ) % Total stockholders' equity 2,895,251 2,885,408 2,886,701 0.34 % 0.30 % Total liabilities and stockholders' equity $ 19,347,373 $ 19,368,109 $ 19,294,174 (0.11 ) % 0.28 % CONSOLIDATED STATEMENTS OF INCOME (Unaudited, dollars in thousands, except per share data) Three Months Ended % Change % Change December 31 2023 September 30 2023 December 31 2022 Dec 2023 vs. Dec 2023 vs. Sept 2023 Dec 2022 Interest income Interest on federal funds sold and short-term investments $ 304 $ 905 $ 4,163 (66.41 ) % (92.70 ) % Interest and dividends on securities 14,631 14,818 15,789 (1.26 ) % (7.33 ) % Interest and fees on loans 192,178 187,145 164,153 2.69 % 17.07 % Interest on loans held for sale 57 60 22 (5.00 ) % 159.09 % Total interest income 207,170 202,928 184,127 2.09 % 12.51 % Interest expense Interest on deposits 49,456 40,713 14,325 21.47 % 245.24 % Interest on borrowings 12,618 12,335 1,447 2.29 % 772.01 % Total interest expense 62,074 53,048 15,772 17.01 % 293.57 % Net interest income 145,096 149,880 168,355 (3.19 ) % (13.82 ) % Provision for credit losses 5,500 5,500 5,500 — % — % Net interest income after provision for credit losses 139,596 144,380 162,855 (3.31 ) % (14.28 ) % Noninterest income Deposit account fees 6,126 5,936 5,788 3.20 % 5.84 % Interchange and ATM fees 4,638 4,808 4,282 (3.54 ) % 8.31 % Investment management 9,818 10,246 10,394 (4.18 ) % (5.54 ) % Mortgage banking income 609 739 526 (17.59 ) % 15.78 % Increase in cash surrender value of life insurance policies 2,091 1,983 2,136 5.45 % (2.11 ) % Gain on life insurance benefits 180 1,924 691 (90.64 ) % (73.95 ) % Loan level derivative income 802 842 1,421 (4.75 ) % (43.56 ) % Other noninterest income 7,803 7,065 7,064 10.45 % 10.46 % Total noninterest income 32,067 33,543 32,302 (4.40 ) % (0.73 ) % Noninterest expenses Salaries and employee benefits 56,388 54,797 53,754 2.90 % 4.90 % Occupancy and equipment expenses 13,054 12,321 12,586 5.95 % 3.72 % Data processing and facilities management 2,423 2,404 2,442 0.79 % (0.78 ) % FDIC assessment 3,942 2,727 1,726 44.55 % 128.39 % Other noninterest expenses 24,940 25,533 24,364 (2.32 ) % 2.36 % Total noninterest expenses 100,747 97,782 94,872 3.03 % 6.19 % Income before income taxes 70,916 80,141 100,285 (11.51 ) % (29.29 ) % Provision for income taxes 16,113 19,333 23,242 (16.66 ) % (30.67 ) % Net Income $ 54,803 $ 60,808 $ 77,043 (9.88 ) % (28.87 ) % Weighted average common shares (basic) 43,474,734 44,135,487 45,641,605 Common share equivalents 9,474 11,417 20,090 Weighted average common shares (diluted) 43,484,208 44,146,904 45,661,695 Basic earnings per share $ 1.26 $ 1.38 $ 1.69 (8.70 ) % (25.44 ) % Diluted earnings per share $ 1.26 $ 1.38 $ 1.69 (8.70 ) % (25.44 ) % Performance ratios Net interest margin (FTE) 3.38 % 3.47 % 3.85 % Return on average assets (calculated by dividing net income by average assets) 1.13 % 1.25 % 1.56 % Return on average common equity (calculated by dividing net income by average common equity) (GAAP) 7.51 % 8.35 % 10.70 % Return on average tangible common equity (Non-GAAP) (calculated by dividing net income by average tangible common equity) 11.50 % 12.81 % 16.57 % Noninterest income as a % of total revenue (calculated by dividing total noninterest income by net interest income plus total noninterest income) 18.10 % 18.29 % 16.10 % Efficiency ratio (calculated by dividing total noninterest expense by total revenue) 56.87 % 53.31 % 47.28 % CONSOLIDATED STATEMENTS OF INCOME (Unaudited, dollars in thousands, except per share data) Years Ended % Change December 31 2023 December 31 2022 Dec 2023 vs. Dec 2022 Interest income Interest on federal funds sold and short-term investments $ 5,186 $ 14,385 (63.95 ) % Interest and dividends on securities 60,342 50,360 19.82 % Interest and fees on loans 730,008 577,923 26.32 % Interest on loans held for sale 190 172 10.47 % Total interest income 795,726 642,840 23.78 % Interest expense Interest on deposits 144,752 24,652 487.18 % Interest on borrowings 44,453 4,939 800.04 % Total interest expense 189,205 29,591 539.40 % Net interest income 606,521 613,249 (1.10 ) % Provision for credit losses 23,250 6,500 257.69 % Net interest income after provision for credit losses 583,271 606,749 (3.87 ) % Noninterest income Deposit account fees 23,486 23,370 0.50 % Interchange and ATM fees 18,108 16,249 11.44 % Investment management 40,191 36,832 9.12 % Mortgage banking income 2,326 3,515 (33.83 ) % Increase in cash surrender value of life insurance policies 7,868 7,685 2.38 % Gain on life insurance benefits 2,291 1,291 77.46 % Loan level derivative income 3,327 2,932 13.47 % Other noninterest income 27,012 22,793 18.51 % Total noninterest income 124,609 114,667 8.67 % Noninterest expenses Salaries and employee benefits 222,135 204,711 8.51 % Occupancy and equipment expenses 50,582 49,841 1.49 % Data processing and facilities management 9,884 9,320 6.05 % FDIC assessment 11,953 6,951 71.96 % Merger and acquisition expense — 7,100 (100.00 ) % Other noninterest expenses 98,192 95,739 2.56 % Total noninterest expenses 392,746 373,662 5.11 % Income before income taxes 315,134 347,754 (9.38 ) % Provision for income taxes 75,632 83,941 (9.90 ) % Net Income $ 239,502 $ 263,813 (9.22 ) % Weighted average common shares (basic) 44,181,540 46,372,051 Common share equivalents 12,007 17,938 Weighted average common shares (diluted) 44,193,547 46,389,989 Basic earnings per share $ 5.42 $ 5.69 (4.75 ) % Diluted earnings per share $ 5.42 $ 5.69 (4.75 ) % Reconciliation of Net Income (GAAP) to Operating Net Income (Non-GAAP): Net Income $ 239,502 $ 263,813 Noninterest expense components Add - merger and acquisition expenses — 7,100 Noncore increases to income before taxes — 7,100 Net tax benefit associated with noncore items (1) — (1,995 ) Noncore increases to net income $ — $ 5,105 Operating net income (Non-GAAP) $ 239,502 $ 268,918 (10.94 ) % Diluted earnings per share, on an operating basis $ 5.42 $ 5.80 (6.55 ) % (1) The net tax benefit associated with noncore items is determined by assessing whether each noncore item is included or excluded from net taxable income and applying the Company's combined marginal tax rate to only those items included in net taxable income. Performance ratios Net interest margin (FTE) 3.54 % 3.46 % Return on average assets (GAAP) (calculated by dividing net income by average assets) 1.24 % 1.33 % Return on average assets on an operating basis (Non-GAAP) (calculated by dividing net operating net income by average assets) 1.24 % 1.35 % Return on average common equity (GAAP) (calculated by dividing net income by average common equity) 8.31 % 9.05 % Return on average common equity on an operating basis (Non-GAAP) (calculated by dividing net operating net income by average common equity) 8.31 % 9.22 % Return on average tangible common equity (GAAP) (calculated by dividing net income by average tangible common equity) 12.78 % 13.87 % Return on average tangible common equity on an operating basis (Non-GAAP) (calculated by dividing net operating net income by average tangible common equity) 12.78 % 14.14 % Noninterest income as a % of total revenue (calculated by dividing total noninterest income by net interest income plus total noninterest income) 17.04 % 15.75 % Noninterest income as a % of total revenue on an operating basis (Non-GAAP) (calculated by dividing total noninterest income on an operating basis by net interest income plus total noninterest income) 17.04 % 15.75 % Efficiency ratio (GAAP) (calculated by dividing total noninterest expense by total revenue) 53.72 % 51.33 % Efficiency ratio on an operating basis (Non-GAAP) (calculated by dividing total noninterest expense on an operating basis by total revenue) 53.72 % 50.36 % ASSET QUALITY (Unaudited, dollars in thousands) Nonperforming Assets At December 31 2023 September 30 2023 December 31 2022 Nonperforming loans Commercial & industrial loans $ 20,188 $ 2,953 $ 26,693 Commercial real estate loans 22,952 23,867 15,730 Small business loans 398 372 104 Residential real estate loans 7,634 8,493 8,479 Home equity 3,171 3,411 3,400 Other consumer 40 75 475 Total nonperforming loans 54,383 39,171 54,881 Other real estate owned 110 110 — Total nonperforming assets $ 54,493 $ 39,281 $ 54,881 Nonperforming loans/gross loans 0.38 % 0.28 % 0.39 % Nonperforming assets/total assets 0.28 % 0.20 % 0.28 % Allowance for credit losses/nonperforming loans 261.52 % 358.86 % 277.73 % Allowance for credit losses/total loans 1.00 % 0.99 % 1.09 % Delinquent loans/total loans 0.44 % 0.22 % 0.30 % Nonperforming Assets Reconciliation for the Three Months Ended December 31 2023 September 30 2023 December 31 2022 Nonperforming assets beginning balance $ 39,281 $ 45,812 $ 56,017 New to nonperforming 31,823 3,455 5,734 Loans charged-off (4,182 ) (6,018 ) (660 ) Loans paid-off (10,905 ) (2,915 ) (2,448 ) Loans restored to performing status (1,534 ) (1,428 ) (3,846 ) Other 10 375 84 Nonperforming assets ending balance $ 54,493 $ 39,281 $ 54,881 Net Charge-Offs (Recoveries) Three Months Ended Years Ended December 31 2023 September 30 2023 December 31 2022 December 31 2023 December 31 2022 Net charge-offs (recoveries) Commercial and industrial loans $ 80 $ (111 ) $ (5 ) $ 23,419 $ (49 ) Commercial real estate loans 2,783 5,072 — 7,855 (271 ) Small business loans 267 77 135 392 47 Home equity 23 (12 ) (16 ) (15 ) 1 Other consumer 694 552 280 1,796 1,275 Total net charge-offs (recoveries) $ 3,847 $ 5,578 $ 394 $ 33,447 $ 1,003 Net charge-offs (recoveries) to average loans (annualized) 0.11 % 0.16 % 0.01 % 0.24 % 0.01 % nm = not meaningful BALANCE SHEET AND CAPITAL RATIOS December 31 2023 September 30 2023 December 31 2022 Gross loans/total deposits 96.05 % 94.45 % 87.72 % Common equity tier 1 capital ratio (1) 14.19 % 14.42 % 14.33 % Tier 1 leverage capital ratio (1) 10.97 % 11.12 % 10.99 % Common equity to assets ratio GAAP 14.96 % 14.90 % 14.96 % Tangible common equity to tangible assets ratio (2) 10.31 % 10.24 % 10.26 % Book value per share GAAP $ 67.53 $ 65.37 $ 63.25 Tangible book value per share (2) $ 44.13 $ 42.60 $ 41.12 (1) Estimated number for December 31, 2023. (2) See Appendix A for detailed reconciliation from GAAP to Non-GAAP ratios. INDEPENDENT BANK CORP. SUPPLEMENTAL FINANCIAL INFORMATION (Unaudited, dollars in thousands) Three Months Ended December 31, 2023 September 30, 2023 December 31, 2022 Interest Interest Interest Average Earned/ Yield/ Average Earned/ Yield/ Average Earned/ Yield/ Balance Paid (1) Rate Balance Paid (1) Rate Balance Paid (1) Rate Interest-earning assets Interest-earning deposits with banks, federal funds sold, and short term investments $ 42,391 $ 304 2.85 % $ 89,449 $ 905 4.01 % $ 466,691 $ 4,163 3.54 % Securities Securities - trading 4,509 — — % 4,546 — — % 3,732 — — % Securities - taxable investments 2,923,983 14,629 1.98 % 3,000,736 14,817 1.96 % 3,147,635 15,787 1.99 % Securities - nontaxable investments (1) 186 2 4.27 % 188 1 2.11 % 189 2 4.20 % Total securities $ 2,928,678 $ 14,631 1.98 % $ 3,005,470 $ 14,818 1.96 % $ 3,151,556 $ 15,789 1.99 % Loans held for sale 3,614 57 6.26 % 4,072 60 5.85 % 1,607 22 5.43 % Loans Commercial and industrial (1) 1,600,886 28,990 7.18 % 1,682,000 30,739 7.25 % 1,560,885 23,258 5.91 % Commercial real estate (1) 7,956,103 100,331 5.00 % 7,823,525 94,861 4.81 % 7,732,925 88,508 4.54 % Commercial construction 895,313 15,932 7.06 % 1,007,814 16,829 6.62 % 1,223,695 17,205 5.58 % Small business 246,411 3,956 6.37 % 240,782 3,752 6.18 % 213,384 2,995 5.57 % Total commercial 10,698,713 149,209 5.53 % 10,754,121 146,181 5.39 % 10,730,889 131,966 4.88 % Residential real estate 2,380,706 24,712 4.12 % 2,276,882 23,197 4.04 % 2,001,042 18,334 3.64 % Home equity 1,097,233 18,747 6.78 % 1,093,479 18,313 6.64 % 1,088,846 14,339 5.22 % Total consumer real estate 3,477,939 43,459 4.96 % 3,370,361 41,510 4.89 % 3,089,888 32,673 4.20 % Other consumer 32,141 667 8.23 % 30,775 608 7.84 % 34,638 595 6.82 % Total loans $ 4,208,793 $ 193,335 5.40 % $ 14,155,257 $ 188,299 5.28 % $ 13,855,415 $ 165,234 4.73 % Total interest-earning assets $ 17,183,476 $ 208,327 4.81 % $ 17,254,248 $ 204,082 4.69 % $ 17,475,269 $ 185,208 4.20 % Cash and due from banks 178,100 184,003 184,985 Federal Home Loan Bank stock 37,054 38,252 5,218 Other assets 1,883,317 1,859,099 1,871,241 Total assets $ 19,281,947 $ 19,335,602 $ 19,536,713 Interest-bearing liabilities Deposits Savings and interest checking accounts $ 5,323,667 $ 14,315 1.07 % $ 5,393,209 $ 11,860 0.87 % $ 5,966,326 $ 4,921 0.33 % Money market 2,851,343 15,197 2.11 % 2,945,450 13,709 1.85 % 3,408,441 7,492 0.87 % Time deposits 2,103,666 19,944 3.76 % 1,860,440 15,144 3.23 % 1,175,667 1,912 0.65 % Total interest-bearing deposits $ 10,278,676 $ 49,456 1.91 % $ 10,199,099 $ 40,713 1.58 % $ 10,550,434 $ 14,325 0.54 % Borrowings Federal Home Loan Bank borrowings 884,441 10,836 4.86 % 869,646 10,568 4.82 % 639 2 1.24 % Junior subordinated debentures 62,857 1,164 7.35 % 62,857 1,150 7.26 % 62,855 827 5.22 % Subordinated debentures 49,968 618 4.91 % 49,944 617 4.90 % 49,873 618 4.92 % Total borrowings $ 997,266 $ 12,618 5.02 % $ 982,447 $ 12,335 4.98 % $ 113,367 $ 1,447 5.06 % Total interest-bearing liabilities $ 11,275,942 $ 62,074 2.18 % $ 11,181,546 $ 53,048 1.88 % $ 10,663,801 $ 15,772 0.59 % Noninterest-bearing demand deposits 4,704,888 4,883,009 5,606,055 Other liabilities 406,029 381,483 410,679 Total liabilities $ 16,386,859 $ 16,446,038 $ 16,680,535 Stockholders' equity 2,895,088 2,889,564 2,856,178 Total liabilities and stockholders' equity $ 19,281,947 $ 19,335,602 $ 19,536,713 Net interest income $ 146,253 $ 151,034 $ 169,436 Interest rate spread (2) 2.63 % 2.81 % 3.61 % Net interest margin (3) 3.38 % 3.47 % 3.85 % Supplemental Information Total deposits, including demand deposits $ 14,983,564 $ 49,456 $ 15,082,108 $ 40,713 $ 16,156,489 $ 14,325 Cost of total deposits 1.31 % 1.07 % 0.35 % Total funding liabilities, including demand deposits $ 15,980,830 $ 62,074 $ 16,064,555 $ 53,048 $ 16,269,856 $ 15,772 Cost of total funding liabilities 1.54 % 1.31 % 0.38 % (1) The total amount of adjustment to present interest income and yield on a fully tax-equivalent basis is $1.2 million, $1.2 million, and $1.1 million for the three months ended December 31, 2023, September 30, 2023, and December 31, 2022, 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. Years Ended December 31, 2023 December 31, 2022 Interest Interest Average Earned/ Yield/ Average Earned/ Yield/ Balance Paid Rate Balance Paid Rate Interest-earning assets Interest earning deposits with banks, federal funds sold, and short term investments $ 118,806 $ 5,186 4.37 % $ 1,222,434 $ 14,385 1.18 % Securities Securities - trading 4,411 — — % 3,764 — — % Securities - taxable investments 3,027,769 60,336 1.99 % 2,948,358 50,354 1.71 % Securities - nontaxable investments (1) 190 7 3.68 % 196 7 3.57 % Total securities $ 3,032,370 $ 60,343 1.99 % $ 2,952,318 $ 50,361 1.71 % Loans held for sale 3,289 190 5.78 % 4,774 172 3.60 % Loans Commercial and industrial (1) 1,646,939 115,752 7.03 % 1,538,848 77,074 5.01 % Commercial real estate (1) 7,839,476 376,586 4.80 % 7,807,427 326,593 4.18 % Commercial construction 1,019,871 66,440 6.51 % 1,191,394 57,804 4.85 % Small business 235,108 14,428 6.14 % 204,982 10,886 5.31 % Total commercial 10,741,394 573,206 5.34 % 10,742,651 472,357 4.40 % Residential real estate 2,217,971 88,210 3.98 % 1,831,493 63,443 3.46 % Home equity 1,093,546 70,698 6.47 % 1,061,228 44,048 4.15 % Total consumer real estate 3,311,517 158,908 4.80 % 2,892,721 107,491 3.72 % Other consumer 31,202 2,418 7.75 % 31,986 2,114 6.61 % Total loans $ 14,084,113 $ 734,532 5.22 % $ 13,667,358 $ 581,962 4.26 % Total interest-earning assets $ 17,238,578 $ 800,251 4.64 % $ 17,846,884 $ 646,880 3.62 % Cash and due from banks 180,553 184,812 Federal Home Loan Bank stock 33,734 7,134 Other assets 1,853,585 1,858,210 Total assets $ 19,306,450 $ 19,897,040 Interest-bearing liabilities Deposits Savings and interest checking accounts $ 5,489,923 $ 43,073 0.78 % $ 6,159,289 $ 8,339 0.14 % Money market 3,022,322 51,630 1.71 % 3,489,981 11,683 0.33 % Time deposits 1,724,625 50,050 2.90 % 1,310,442 4,630 0.35 % Total interest-bearing deposits $ 10,236,870 $ 144,753 1.41 % $ 10,959,712 $ 24,652 0.22 % Borrowings Federal Home Loan Bank borrowings 782,121 37,624 4.81 % 16,138 313 1.94 % Long-term borrowings — — — % 2,235 31 1.39 % Junior subordinated debentures 62,857 4,359 6.93 % 62,854 2,125 3.38 % Subordinated debentures 49,933 2,470 4.95 % 49,837 2,470 4.96 % Total borrowings $ 894,911 $ 44,453 4.97 % $ 131,064 $ 4,939 3.77 % Total interest-bearing liabilities $ 11,131,781 $ 189,206 1.70 % $ 11,090,776 $ 29,591 0.27 % Noninterest-bearing demand deposits 4,918,787 5,559,997 Other liabilities 374,585 330,371 Total liabilities $ 16,425,153 $ 16,981,144 Stockholders' equity 2,881,297 2,915,896 Total liabilities and stockholders' equity $ 19,306,450 $ 19,897,040 Net interest income $ 611,045 $ 617,289 Interest rate spread (2) 2.94 % 3.35 % Net interest margin (3) 3.54 % 3.46 % Supplemental Information Total deposits, including demand deposits $ 15,155,657 $ 144,753 $ 16,519,709 $ 24,652 Cost of total deposits 0.96 % 0.15 % Total funding liabilities, including demand deposits $ 16,050,568 $ 189,206 $ 16,650,773 $ 29,591 Cost of total funding liabilities 1.18 % 0.18 % (1) The total amount of adjustment to present interest income and yield on a fully tax-equivalent basis is $4.5 million and $4.0 million for the years ended months ended December 31, 2023 and 2022, 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: December 31 2023 September 30 2023 December 31 2022 Tangible common equity (Dollars in thousands, except per share data) Stockholders' equity (GAAP) $ 2,895,251 $ 2,885,408 $ 2,886,701 (a) Less: Goodwill and other intangibles 1,003,262 1,004,897 1,010,140 Tangible common equity (Non-GAAP) $ 1,891,989 $ 1,880,511 $ 1,876,561 (b) Tangible assets Assets (GAAP) $ 19,347,373 $ 19,368,109 $ 19,294,174 (c) Less: Goodwill and other intangibles 1,003,262 1,004,897 1,010,140 Tangible assets (Non-GAAP) $ 18,344,111 $ 18,363,212 $ 18,284,034 (d) Common Shares 42,873,187 44,141,973 45,641,238 (e) Common equity to assets ratio (GAAP) 14.96 % 14.90 % 14.96 % (a/c) Tangible common equity to tangible assets ratio (Non-GAAP) 10.31 % 10.24 % 10.26 % (b/d) Book value per share (GAAP) $ 67.53 $ 65.37 $ 63.25 (a/e) Tangible book value per share (Non-GAAP) $ 44.13 $ 42.60 $ 41.12 (b/e) APPENDIX B: Non-GAAP Reconciliation of Earnings Metrics (Unaudited, dollars in thousands) The following table summarizes the impact of noncore items on the Company's calculation of noninterest income and noninterest expense, the impact of noncore items on noninterest income as a percentage of total revenue and the efficiency ratio, as well as the average tangible common equity used to calculate return on average tangible common equity and operating return on tangible common equity for the periods indicated: Three Months Ended Years Ended December 31 2023 September 30 2023 December 31 2022 December 31 2023 December 31 2022 Net interest income (GAAP) $ 145,096 $ 149,880 $ 168,355 $ 606,521 $ 613,249 Noninterest income (GAAP) $ 32,067 $ 33,543 $ 32,302 $ 124,609 $ 114,667 Noninterest income on an operating basis (Non-GAAP) $ 32,067 $ 33,543 $ 32,302 $ 124,609 $ 114,667 Noninterest expense (GAAP) 100,747 $ 97,782 $ 94,872 $ 392,746 $ 373,662 Less: Merger and acquisition expense — — — — 7,100 Noninterest expense on an operating basis (Non-GAAP) $ 100,747 $ 97,782 $ 94,872 $ 392,746 $ 366,562 Total revenue (GAAP) $ 177,163 $ 183,423 $ 200,657 $ 731,130 $ 727,916 Total operating revenue (Non-GAAP) $ 177,163 $ 183,423 $ 200,657 $ 731,130 $ 727,916 Net income (GAAP) $ 54,803 $ 60,808 $ 77,043 $ 239,502 $ 263,813 Operating net income (Non-GAAP) (See income statement for reconciliation of GAAP to Non-GAAP) $ 54,803 $ 60,808 $ 77,043 $ 239,502 $ 268,918 Average common equity (GAAP) $ 2,895,088 $ 2,889,564 $ 2,856,178 $ 2,881,297 $ 2,915,896 Less: Average goodwill and other intangibles 1,004,081 1,005,778 1,011,091 1,006,658 1,014,045 Tangible average tangible common equity (Non-GAAP) $ 1,891,007 $ 1,883,786 $ 1,845,087 $ 1,874,639 $ 1,901,851 Ratios Noninterest income as a % of total revenue (GAAP) (calculated by dividing total noninterest income by total revenue) 18.10 % 18.29 % 16.10 % 17.04 % 15.75 % Noninterest income as a % of total revenue on an operating basis (Non-GAAP) (calculated by dividing total noninterest income on an operating basis by total revenue) 18.10 % 18.29 % 16.10 % 17.04 % 15.75 % Efficiency ratio (GAAP) (calculated by dividing total noninterest expense by total revenue) 56.87 % 53.31 % 47.28 % 53.72 % 51.33 % Efficiency ratio on an operating basis (Non-GAAP) (calculated by dividing total noninterest expense on an operating basis by total revenue) 56.87 % 53.31 % 47.28 % 53.72 % 50.36 % Return on average tangible common equity (Non-GAAP) (calculated by dividing annualized net income by average tangible common equity) 11.50 % 12.81 % 16.57 % 12.78 % 13.87 % Return on average tangible common equity on an operating basis (Non-GAAP) (calculated by dividing annualized net operating net income by average tangible common equity) 11.50 % 12.81 % 16.57 % 12.78 % 14.14 % APPENDIX C: Net Interest Margin Analysis & Non-GAAP Reconciliation of Core Margin Three Months Ended December 31, 2023 September 30, 2023 Volume Interest Margin Impact Volume Interest Margin Impact (Dollars in thousands) Reported total interest earning assets $ 17,183,476 $ 146,253 3.38 % $ 17,254,248 $ 151,034 3.47 % Acquisition fair value marks: Loan accretion (1,156 ) (330 ) CD amortization 11 11 (1,145 ) (0.03 ) % (319 ) — % Nonaccrual interest, net 549 0.01 % 67 — % Other noncore adjustments (4,913 ) (574 ) (0.01 ) % (5,448 ) (77 ) — % Core margin (Non-GAAP) $ 17,178,563 $ 145,083 3.35 % $ 17,248,800 $ 150,705 3.47 % View source version on businesswire.com: https://www.businesswire.com/news/home/20240117623955/en/
Jeffrey Tengel President and Chief Executive Officer (781) 982-6144 Mark J. Ruggiero Chief Financial Officer and Executive Vice President of Consumer Lending (781) 982-6281