Independent Bank Corp. Announces $50.0 Million Net Income for Fourth Quarter

Independent Bank Corp. Reports Fourth Quarter 2024 Financial Results, Reflecting Strong Growth and Strategic Acquisition Plans

Independent Bank Corp. (Nasdaq Global Select Market: INDB), the parent company of Rockland Trust Company, has reported impressive financial results for the fourth quarter of 2024. Independent Bank Corp achieved net income of $50.0 million, or $1.18 per diluted share, representing a notable increase from the third quarter’s net income of $42.9 million, or $1.01 per diluted share. The fourth-quarter results also reflect pre-tax merger-related costs of $1.9 million associated with the company’s pending acquisition of Enterprise Bancorp, Inc. (“Enterprise”) and its subsidiary, Enterprise Bank, which was announced on December 9, 2024. Excluding these costs and their related tax effects, the company’s operating net income was $51.4 million, or $1.21 per diluted share. Notably, there were no merger-related expenses incurred during the third quarter of 2024.

The key drivers behind the increase in net income were growth in net interest income, a decrease in loan loss provision, and a reduced tax rate compared to the prior quarter. Full-year 2024 net income totaled $192.1 million, or $4.52 per diluted share, a decrease from the previous year’s net income of $239.5 million, or $5.42 per diluted share. Full-year operating net income was $193.4 million, or $4.55 per diluted share, excluding merger-related costs associated with the Enterprise acquisition. In comparison, no non-core adjustments were included in the company’s full-year results for 2023.

Independent Bank Corp

Jeffrey Tengel, Chief Executive Officer of Independent Bank Corp. and Rockland Trust Company, highlighted the company’s continued focus on its core fundamentals, which led to strong performance in the fourth quarter. Tengel emphasized that the bank is well-positioned to improve profitability through net interest margin expansion and the acquisition of Enterprise, which is expected to enhance the company’s long-term growth trajectory.

Fourth Quarter Performance and Key Metrics Independent Bank Corp

The company achieved a return on average assets (ROA) of 1.02% and a return on average common equity (ROE) of 6.64% for the fourth quarter of 2024, showing notable improvements from the previous quarter’s ROA of 0.88% and ROE of 5.75%. On an operating basis, the fourth-quarter ROA and ROE were even higher, reaching 1.05% and 6.82%, respectively. For the full year 2024, the company generated an ROA of 0.99% and an ROE of 6.53%, a decrease from 2023’s ROA of 1.24% and ROE of 8.31%. On an operating basis, the company’s ROA and ROE for the full year 2024 were 1.00% and 6.57%, respectively.

Tengel credited the company’s employees for their outstanding service and sustained improvements across core elements of the bank. The CEO further expressed confidence that the company’s strong fundamentals, alongside the acquisition of Enterprise, will continue to drive future profitability.

Balance Sheet Highlights Independent Bank Corp

At December 31, 2024, Independent Bank Corp reported total assets of $19.4 billion, which remained essentially flat compared to the previous quarter but increased by $26.2 million, or 0.14%, when compared to the same period in 2023. The year-over-year increase reflects a healthy remix of assets, with a shift from securities into loans.

In line with its evolving asset mix, the company reclassified its portfolio of loans secured by owner-occupied commercial real estate to the commercial and industrial loan category, aligning with the risk profiles and management practices of these loans. As of December 31, 2024, total loans stood at $14.5 billion, reflecting an increase of $147.6 million, or 1.0% (4.1% annualized), compared to the previous quarter. The increase in loans was driven primarily by growth in the commercial and industrial and construction categories, while commercial real estate balances showed a slight decrease. The company also reported solid growth in small business lending, which rose by 4.4% (17.3% annualized) during the fourth quarter.

On the consumer side, the loan portfolio grew by $31.3 million, or 0.9% (3.4% annualized), compared to the previous quarter, supported by strong growth in residential real estate and home equity products.

Total deposits at December 31, 2024, were $15.3 billion, a decrease of $135.0 million, or 0.9%, from the previous quarter. While consumer deposit balances grew, the decline was largely attributed to seasonal reductions in business checking and municipal deposits. Core deposits remained stable, accounting for 81.7% of total deposits at December 31, 2024, consistent with the prior quarter. Noninterest-bearing demand deposits accounted for 28.7% of total deposits, a slight decrease from 29.3% at the end of the third quarter.

The company’s borrowings increased by $38.0 million, or 5.7%, during the fourth quarter, while average borrowings decreased by $21.2 million, or 3.1%. The overall cost of funding decreased by 9 basis points to 1.77% during the quarter, driven primarily by lower deposit costs and, to a lesser extent, reduced average wholesale borrowing costs.

Stockholders’ equity increased by $16.0 million, or 0.5%, compared to the previous quarter, supported by strong earnings retention. The company’s common equity to assets ratio stood at 15.45% at December 31, 2024, marking an increase of 11 basis points from the previous quarter and 49 basis points from the same period in 2023. The company’s tangible book value per share increased by $0.35, or 0.5%, to $70.43, while tangible book value per share rose by $0.39, or 0.8%, to $46.96, reflecting a 6.4% increase from the previous year.

Net Interest Income and Margin Independent Bank Corp

Net interest income for the fourth quarter of 2024 increased to $144.7 million, compared to $141.7 million in the prior quarter. The net interest margin rose by 4 basis points to 3.33%, with the core margin increasing by 2 basis points to 3.31%. This improvement was primarily attributed to a decrease in funding costs, contributing positively to the overall margin performance.

Noninterest Income and Expense

Noninterest income for the fourth quarter totaled $32.2 million, reflecting a decrease of $1.4 million, or 4.0%, from the prior quarter. Key contributors to the change in noninterest income included an increase in deposit account fees, which grew by $337,000, or 5.0%, driven by higher overdraft and cash management activity. Investment and advisory income decreased by $250,000, or 2.3%, primarily due to lower retail investment revenue and insurance commissions. Loan-level derivative income also saw a significant decline, dropping by $686,000, or 61.0%, due to fluctuations in customer demand.

Noninterest expense for the fourth quarter totaled $106.4 million, an increase of $6.0 million, or 6.0%, from the previous quarter. The increase was driven by several factors, including a rise in occupancy and equipment expenses, which grew by $665,000, largely due to lease termination costs related to the closure of an inactive branch. Additionally, the company incurred $1.9 million in merger and acquisition expenses related to its pending acquisition of Enterprise. Other noninterest expenses also increased due to a one-time credit in the previous quarter and higher costs associated with debit card expenses, consultant fees, unrealized losses on equity securities, and card issuance.

Independent Bank Corp effective tax rate for the fourth quarter decreased to 20.49%, down from 22.35% in the previous quarter, reflecting the purchase of additional certificated tax credits and the release of $1.2 million in uncertain tax positions.

Asset Quality and Credit Losses

The provision for credit losses for the fourth quarter decreased significantly to $7.5 million, compared to $19.5 million in the prior quarter. The prior quarter had included a large specific reserve charge on a commercial real estate office loan. Nonperforming loans decreased slightly to $101.5 million at December 31, 2024, representing 0.70% of total loans, down from 0.73% at September 30, 2024. Net charge-offs also decreased, dropping to $1.2 million for the fourth quarter, compared to $6.7 million in the previous quarter. Delinquencies as a percentage of total loans increased by 27 basis points to 0.60%, primarily due to the migration of a commercial real estate loan.

The allowance for credit losses on total loans increased to $170.0 million at December 31, 2024, compared to $163.7 million at the end of the third quarter, representing 1.17% and 1.14% of total loans, respectively.

Conference Call Information

Jeffrey Tengel, CEO, and Mark Ruggiero, CFO and EVP of Consumer Lending, will host a conference call on January 17, 2025, at 10:00 a.m. Eastern Time to discuss the company’s fourth-quarter earnings. The call can be accessed via the company’s website or by dialing in at 1-888-336-7153, with the reference: INDB. A replay of the call will be available until January 24, 2025

Independent Bank Corp

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