Independent Bank Corp. Reports Third Quarter Net Income of $34.9 Million

Fundamentals strength helped counter ongoing impact of Coronavirus pandemic

ROCKLAND, Mass.--()--Independent Bank Corp. (Nasdaq Global Select Market: INDB), parent of Rockland Trust Company, today announced 2020 third quarter net income of $34.9 million, or $1.06 per diluted share, compared to net income of $24.9 million, or $0.76 per diluted share, reported for the second quarter of 2020. Excluding a loss on terminated hedges of $684,000, operating net income was $35.4 million, or $1.07 per diluted share, for the third quarter of 2020. Net income for the year-to-date period was $86.5 million or $2.59 on a diluted per share basis, a decrease of $31.2 million, or 26.5%, as compared to the same period in 2019. On an operating basis, net income for the 2020 year-to-date period was $87.0 million, or $2.61 on a diluted per share basis, representing a decrease of $50.1 million, or 36.5%, as compared to the same period a year ago, which included adjustments for mergers and acquisitions, as well as a gain on sale of loans. Decreases in the current year-to-date results are primarily driven by the negative impact of the elevated provision for credit losses, with the impact of the Coronavirus ("COVID-19") pandemic continuing to be the primary driver of the higher provision levels. Please refer to Appendix D for additional information regarding the Company's Current Expected Credit Losses assumptions and results.

Rockland Trust continues to monitor the COVID-19 pandemic impact on our colleagues, customers, and the communities we serve. The safety of our colleagues and customers continues to be of the utmost importance, while the Company simultaneously continues to serve customer needs.

“Our financial position remains strong. Our solid fundamentals entering the COVID-19 pandemic continue to serve us as we navigate the ongoing impacts of the pandemic,” said Christopher Oddleifson, the Chief Executive Officer of Independent Bank Corp. and Rockland Trust Company. “At Rockland Trust, the bank Where Each Relationship Matters®, my colleagues and I are energized by a shared sense of mission as we continue to stay focused on serving our customers and our communities as we all move forward together. We have helped over 6,100 borrowers obtain Paycheck Protection Program ("PPP") loans, with a total principal amount of approximately $810 million. These funds represent critical lifelines for these small businesses and are being deployed with the goal of saving numerous jobs that would otherwise be lost in the communities we serve. I would like to thank my colleagues for their continued professionalism and dedication during these trying times. Our unwavering dedication to our customers, our communities and to each other is what truly sets us apart.”

BALANCE SHEET

Total assets of $13.2 billion at September 30, 2020 increased by $151.2 million, or 1.2%, from the prior quarter, and increased by $1.6 billion, or 14.2%, as compared to the year ago period. Total asset growth for the third quarter is primarily attributable to increases in interest-earning cash balances resulting from strong deposit growth along with net loan growth.

Total loans rose by $45.5 million, or 0.5% (1.9% annualized), when compared to the prior quarter, fueled by a healthy increase in commercial loan balances of $145.0 million, or 2.1% (8.5% annualized), during the third quarter. Growth across all commercial categories, with the exception of small business, reflects strong closing activity in all major commercial products, as well as a stabilization of line utilization levels, which experienced significant decreases during the early months of the COVID-19 pandemic. Within the consumer portfolios, the low rate environment has driven record mortgage banking volumes and results, while portfolio balances further declined as the majority of residential mortgage production continues to be sold into the secondary market. On the home equity side, despite strong closing activity, portfolio growth continues to be challenged by attrition.

Deposit balances of $10.9 billion at September 30, 2020 increased by $134.5 million, or 1.3%, (5.0% annualized), from the prior quarter, as a combination of various government stimulus programs and a customer focus on retaining liquidity continued to fuel significant growth during the quarter. In addition to balance increases from existing customers, strong new customer account activity remained a bright spot throughout the uncertain economic conditions. As time deposits continued to run off, core deposits represented 88.0% of the total deposits at September 30, 2020, which, combined with reductions in rates across all products, has led to a total cost of deposits for the third quarter of 0.20%, representing a reduction of 8 basis points when compared to the prior quarter.

The securities portfolio decreased by $68.1 million, or 5.8%, when compared to the prior quarter, reflecting $28.4 million of purchases offset by paydowns, called securities, and maturities.

Total borrowings remained consistent with the prior quarter, reflecting only 2.7% of total funding liabilities. In relation to its funding strategy, in light of the steady buildup of its liquidity position, the Company decided to exit its $100 million hedge against the Federal Home Loan Bank ("FHLB") borrowings during the third quarter, resulting in a $684,000 loss included in non-interest expense. In addition, the outstanding borrowings associated with the hedge were paid in full in October 2020.

Stockholders' equity at September 30, 2020 increased slightly by 1.1%, or 4.3% annualized, as compared to the prior quarter. Despite the repurchase of 1.5 million shares that was executed over the first half of 2020, stockholders' equity increased by 0.4% when compared to the year ago period, reflecting strong earnings retention and an increase in accumulated other comprehensive income of $22.4 million, offsetting the $95.1 million impact of the stock repurchases. Book value per share increased by $0.52, or 1.0%, to $51.27 during the third quarter as compared to the prior quarter. The Company's ratio of common equity to assets of 12.83% decreased by 1 basis point from the prior quarter and decreased by 175 basis points from the same period a year ago. The Company's tangible book value per share at September 30, 2020 rose by $0.58, or 1.7%, from the prior quarter to $35.17, representing an increase of 5.4% from the year ago period. The Company's ratio of tangible common equity to tangible assets of 9.17% at September 30, 2020 is 5 basis points higher than the prior quarter and 125 basis points below the year ago period, largely attributable to the increase in the Company's balance sheet and stock repurchase activity.

NET INTEREST INCOME

Net interest income for the third quarter remained relatively flat at $90.9 million compared to $91.1 million for the prior quarter, as increases in earning assets were offset by margin compression. The 2020 third quarter net interest margin of 3.13% represents a reduction of 12 basis points from the prior quarter. The table below illustrates the changes within the net interest margin for the third quarter:

Net interest margin as of June 30, 2020

 

3.25

%

Loan yields, excluding nonaccrual interest impact

 

(0.08)

%

Nonaccrual loans, interest reversal

 

(0.05)

%

Excess liquidity (cash) levels

 

(0.07)

%

PPP loan activity at 1% interest rate

 

(0.04)

%

PPP loan fee amortization

 

0.03

%

Loan purchase accounting

 

0.03

%

Cost of funds

 

0.08

%

Other

 

(0.02)

%

Net interest margin as of September 30, 2020

 

3.13

%

Please refer to Appendix C for additional details regarding the net interest margin, including a three-quarter trend of an adjusted core margin.

NONINTEREST INCOME

Noninterest income of $29.3 million for the third quarter of 2020 was $1.2 million, or 4.1%, higher than the prior quarter. Significant changes in noninterest income for the third quarter compared to the prior quarter included the following:

  • Deposit account fees increased by $599,000, or 21.2%, primarily driven by an increase in overdraft fees.
  • Interchange and ATM fees decreased by $2.2 million, or 41.6%, reflecting the impact of the Durbin Amendment, which the Company became subject to effective July 1, 2020 as a result of crossing the $10 billion asset threshold, offset by increased activity compared to the prior quarter.
  • Investment management income increased by $275,000, or 3.8%, due primarily to an increase in market valuation. Assets under administration at September 30, 2020 increased 3.3% to $4.5 billion.
  • Mortgage banking income grew by $2.7 million, or 53.9%, due primarily to increased gain on sale of loans plus continued strong demand largely driven by the low rate environment.
  • Although remaining at an elevated level of $2.5 million, loan level derivative income decreased by $407,000, or 14.2%.
  • Other noninterest income increased by $494,000, or 14.8%, primarily attributable to increases in investment income and business and consumer credit card fee income, partially offset by reduced unrealized gains on equity securities.

NONINTEREST EXPENSE

Noninterest expense of $66.7 million for the third quarter of 2020 was relatively consistent with the prior quarter. Significant changes in noninterest expense for the third quarter compared to the prior quarter included the following:

  • Salaries and employee benefits increased $1.1 million, or 3.1%, mainly due to increases in base salaries, incentive programs and retirement benefits, partially offset by decreases in payroll taxes.
  • FDIC assessment increased by $531,000, as the prior quarter included a partial benefit from the allocation of small bank assessment credits, which resulted in a reduced assessment.
  • During the third quarter, the Company recorded a $684,000 loss on the termination of a swap derivative contract with a notional amount of $100.0 million.
  • Other noninterest expense decreased by $2.4 million, or 13.3%, primarily due to decreases in equity compensation related to director expenses incurred during the prior quarter, along with decreases in prepayment fees on borrowings, retail branch traffic control and consultant fees.

The Company generated a return on average assets and a return on average common equity of 1.07% and 8.21%, respectively, for the third quarter of 2020, as compared to 0.79% and 5.97%, respectively, for the prior quarter. On an operating basis, return on average assets and return on average common equity were 1.08% and 8.32%, respectively, for the third quarter.

ASSET QUALITY

During the third quarter, the Company recorded total net charge-offs of $4.1 million, or 0.17% of average loans on an annualized basis, the majority of which were associated with a large relationship within the hotel industry. In addition, nonperforming loans increased to $98.0 million, or 1.04% of total loans at September 30, 2020 as compared to the prior quarter level of $48.8 million, or 0.52% of total loans at June 30, 2020. The increase in nonperforming loans reflects primarily the migration of three large commercial relationships, all related to industries previously identified as being highly impacted by the COVID-19 pandemic. This increase also resulted in a reduction of interest income of $1.6 million for the third quarter, which was included in the net interest margin compression noted above. Despite the increase in charge-offs and nonperforming loans, the Company recorded a $7.5 million provision for credit losses, reduced significantly from the $20.0 million recorded last quarter, as the third quarter activity reflected loss exposure that was substantially reflected in the June 30, 2020 credit reserve assumptions. The allowance for credit losses on loans was $115.6 million at September 30, 2020, or 1.23% of total loans, as compared to $112.2 million at June 30, 2020, or 1.20% of total loans. Please refer to Appendix E for information regarding loan exposures within industries deemed highly impacted.

As a result of the COVID-19 pandemic, many loans have had terms modified. Total loans subject to deferral decreased by $590.1 million for the third quarter, to $583.8 million, or 6.2% of total loans, at September 30, 2020. The majority of these loans that have been granted deferrals continue to be characterized as current loans. Delinquency as a percentage of total loans was 0.31%, representing an increase of seven basis points from the prior quarter. Please refer to Appendix F for additional details regarding loans whose terms have been modified as a result of COVID-19.

CONFERENCE CALL INFORMATION

Christopher Oddleifson, Chief Executive Officer, Robert Cozzone, Chief Operating Officer, Mark Ruggiero, Chief Financial Officer, and Gerard Nadeau, President and Chief Commercial Banking Officer will host a conference call to discuss third quarter earnings at 10:00 a.m. Eastern Time on Friday, October 23, 2020. Internet access to the call is available on the Company’s website at www.RocklandTrust.com or via telephonic access by dial-in at 1-888-336-7153 reference: INDB. A replay of the call will be available by calling 1-877-344-7529, Replay Conference Number: 10146947 and will be available through November 6, 2020. Additionally, a webcast replay will be available until October 23, 2021.

ABOUT INDEPENDENT BANK CORP.

Independent Bank Corp. (Nasdaq Global Select Market: INDB) is the holding company for Rockland Trust Company, a full-service commercial bank headquartered in Massachusetts. Rockland Trust was named to The Boston Globe’s “Top Places to Work” 2019 list, an honor earned for the 11th consecutive year. In addition to this recognition, Rockland Trust was ranked the #1 Bank in Massachusetts, according to Forbes 2020 World’s Best Banks list. Rockland Trust is deeply committed to the communities it serves as reflected in the overall “Outstanding” rating received in its most recent Community Reinvestment Act performance evaluation. Rockland Trust offers a wide range of banking, investment, and insurance services. The Bank serves businesses and individuals through approximately 100 retail branches, commercial and residential lending centers, and investment management offices in eastern Massachusetts, including Greater Boston, the South Shore, the Cape, and Islands, as well as in Worcester County and Rhode Island. Rockland Trust also offers a full suite of mobile, online, and telephone banking services. Rockland Trust is an FDIC member and an Equal Housing Lender. To find out why Rockland Trust is the bank “Where Each Relationship Matters®,” please visit RocklandTrust.com.

This press release contains certain “forward-looking statements” with respect to the financial condition, results of operations and business of the Company. These statements may be identified by such forward-looking terminology as “expect,” “achieve,” “plan,” “believe,” “future,” “positioned,” “continued,” “will,” “would,” “potential,” or similar statements or variations of such terms. Actual results may differ from those contemplated by these forward-looking statements.

Factors that may cause actual results to differ materially from those contemplated by such forward-looking statements include, but are not limited to:

  • further weakening in the United States economy in general and the regional and local economies within the New England region and the Company’s market area, including future weakening caused by the COVID-19 pandemic;
  • the length and extent of economic contraction as a result of the COVID-19 pandemic;
  • unanticipated loan delinquencies, loss of collateral, decreased service revenues, and other potential negative effects on our business caused by severe weather, pandemics or other external events;
  • adverse changes or volatility in the local real estate market;
  • adverse changes in asset quality and any unanticipated credit deterioration in our loan portfolio including those related to one or more large commercial relationships;
  • acquisitions may not produce results at levels or within time frames originally anticipated and may result in unforeseen integration issues or impairment of goodwill and/or other intangibles;
  • additional regulatory oversight and related compliance costs, including the additional costs associated with the Company's increase in assets to over $10 billion;
  • changes in trade, monetary and fiscal policies and laws, including interest rate policies of the Board of Governors of the Federal Reserve System;
  • higher than expected tax expense, resulting from failure to comply with general tax laws, changes in tax laws, or failure to comply with requirements of the federal New Markets Tax Credit program;
  • changes in market interest rates for interest earning assets and/or interest bearing liabilities and changes related to the phase-out of LIBOR;
  • increased competition in the Company’s market areas;
  • adverse weather, changes in climate, natural disasters, the emergence of widespread health emergencies or pandemics, including the magnitude and duration of the COVID-19 pandemic, other public health crises or man-made events could negatively affect our local economies or disrupt our operations, which would have an adverse effect on our business or results of operations;
  • a deterioration in the conditions of the securities markets;
  • a deterioration of the credit rating for U.S. long-term sovereign debt;
  • inability to adapt to changes in information technology, including changes to industry accepted delivery models driven by a migration to the internet as a means of service delivery;
  • electronic fraudulent activity within the financial services industry, especially in the commercial banking sector;
  • adverse changes in consumer spending and savings habits;
  • the effect of laws and regulations regarding the financial services industry;
  • changes in laws and regulations (including laws and regulations concerning taxes, banking, securities and insurance) generally applicable to the Company’s business;
  • the Company's potential judgments, claims, damages, penalties, fines and reputational damage resulting from pending or future litigation and regulatory and government actions, including as a result of our participation in and execution of government programs related to the COVID-19 pandemic;
  • changes in accounting policies, practices and standards, as may be adopted by the regulatory agencies as well as the Public Company Accounting Oversight Board, the Financial Accounting Standards Board, and other accounting standard setters including, but not limited to , changes to how the Company accounts for credit losses;
  • cyber security attacks or intrusions that could adversely impact our businesses; and
  • other unexpected material adverse changes in our operations or earnings.

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

The Company wishes to caution readers not to place undue reliance on any forward-looking statements as the Company’s business and its forward-looking statements involve substantial known and unknown risks and uncertainties described in the Company’s Annual Report on Form 10-K and subsequent Quarterly Reports on Form 10-Q (“Risk Factors”). Except as required by law, the Company disclaims any intent or obligation to update publicly any such forward-looking statements, whether in response to new information, future events or otherwise. Any public statements or disclosures by the Company following this release which modify or impact any of the forward-looking statements contained in this release will be deemed to modify or supersede such statements in this release. In addition to the information set forth in this press release, you should carefully consider the Risk Factors.

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

Operating net income, operating EPS, operating return on average assets and operating return on average common equity exclude items that management believes are unrelated to its core banking business such as merger and acquisition expenses, and other items, if applicable. The Company’s management uses operating earnings and related ratios and operating EPS to measure the strength of the Company’s core banking business and to identify trends that may to some extent be obscured by such items. Management reviews its core net interest margin to determine any items that may impact the net interest margin that may be one-time in nature or not reflective of its core operating environment, such as out-sized cash balances, unique low-yielding loans originated through government programs in response to the pandemic, or significant purchase accounting adjustments. Management believes that adjusting for these items to arrive at a core margin provides additional insight into the operating environment and how management decisions impact the net interest margin. Similarly, management reviews certain loan metrics such as growth rates and allowance as a percentage of total loans, adjusted to exclude loans that are not considered part of its core portfolio, which includes loans originated in association with government sponsored and guaranteed programs in response to the pandemic, to arrive at adjusted numbers more representative of the core growth of the portfolio and core reserve to loan ratio.

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

These non-GAAP measures should not be viewed as a substitute for operating results and other financial measures determined in accordance with GAAP. An item which management deems to be noncore and excludes when computing these non-GAAP measures can be of substantial importance to the Company’s results for any particular quarter or year. The Company’s non-GAAP performance measures, including operating earnings, operating EPS, operating return on average assets, operating return on average equity, 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.

INDEPENDENT BANK CORP. FINANCIAL SUMMARY

 

 

 

 

 

 

CONSOLIDATED BALANCE SHEETS

 

 

 

 

(Unaudited, dollars in thousands)

 

 

 

 

 

 

% Change

 

% Change

 

September 30
2020

 

June 30
2020

 

September 30
2019

 

Sept 2020 vs.

 

Sept 2020 vs.

 

 

 

 

Jun 2020

 

Sept 2019

Assets

 

 

 

 

 

 

 

 

 

Cash and due from banks

$

125,103

 

 

$

131,615

 

 

$

153,000

 

 

(4.95)

%

 

(18.23)

%

Interest-earning deposits with banks

1,142,934

 

 

974,105

 

 

66,272

 

 

17.33

%

 

1,624.61

%

Securities

 

 

 

 

 

 

 

 

 

Trading

2,612

 

 

2,541

 

 

1,963

 

 

2.79

%

 

33.06

%

Equities

21,119

 

 

20,810

 

 

21,021

 

 

1.48

%

 

0.47

%

Available for sale

423,478

 

 

420,517

 

 

391,975

 

 

0.70

%

 

8.04

%

Held to maturity

659,573

 

 

731,026

 

 

777,270

 

 

(9.77)

%

 

(15.14)

%

Total securities

1,106,782

 

 

1,174,894

 

 

1,192,229

 

 

(5.80)

%

 

(7.17)

%

Loans held for sale

54,713

 

 

45,395

 

 

55,937

 

 

20.53

%

 

(2.19)

%

Loans

 

 

 

 

 

 

 

 

 

Commercial and industrial

2,062,345

 

 

2,004,645

 

 

1,411,516

 

 

2.88

%

 

46.11

%

Commercial real estate

4,125,464

 

 

4,071,047

 

 

4,000,487

 

 

1.34

%

 

3.12

%

Commercial construction

573,334

 

 

537,788

 

 

520,585

 

 

6.61

%

 

10.13

%

Small business

167,632

 

 

170,288

 

 

172,038

 

 

(1.56)

%

 

(2.56)

%

Total commercial

6,928,775

 

 

6,783,768

 

 

6,104,626

 

 

2.14

%

 

13.50

%

Residential real estate

1,352,305

 

 

1,431,129

 

 

1,644,758

 

 

(5.51)

%

 

(17.78)

%

Home equity - first position

643,187

 

 

650,922

 

 

644,675

 

 

(1.19)

%

 

(0.23)

%

Home equity - subordinate positions

457,867

 

 

469,601

 

 

492,434

 

 

(2.50)

%

 

(7.02)

%

Total consumer real estate

2,453,359

 

 

2,551,652

 

 

2,781,867

 

 

(3.85)

%

 

(11.81)

%

Other consumer

23,059

 

 

24,228

 

 

27,008

 

 

(4.82)

%

 

(14.62)

%

Total loans

9,405,193

 

 

9,359,648

 

 

8,913,501

 

 

0.49

%

 

5.52

%

Less: allowance for credit losses

(115,625)

 

 

(112,176)

 

 

(66,942)

 

 

3.07

%

 

72.72

%

Net loans

9,289,568

 

 

9,247,472

 

 

8,846,559

 

 

0.46

%

 

5.01

%

Federal Home Loan Bank stock

15,090

 

 

15,090

 

 

14,976

 

 

%

 

0.76

%

Bank premises and equipment, net

121,816

 

 

122,172

 

 

125,026

 

 

(0.29)

%

 

(2.57)

%

Goodwill

506,206

 

 

506,206

 

 

504,562

 

 

%

 

0.33

%

Other intangible assets

24,543

 

 

25,996

 

 

31,307

 

 

(5.59)

%

 

(21.61)

%

Cash surrender value of life insurance policies

199,453

 

 

198,124

 

 

195,883

 

 

0.67

%

 

1.82

%

Other assets

587,457

 

 

581,431

 

 

352,888

 

 

1.04

%

 

66.47

%

Total assets

$

13,173,665

 

 

$

13,022,500

 

 

$

11,538,639

 

 

1.16

%

 

14.17

%

Liabilities and Stockholders' Equity

 

 

 

 

 

 

 

 

 

Deposits

 

 

 

 

 

 

 

 

 

Noninterest-bearing demand deposits

$

3,715,528

 

 

$

3,694,559

 

 

$

2,752,150

 

 

0.57

%

 

35.00

%

Savings and interest checking accounts

3,912,703

 

 

3,896,024

 

 

3,199,182

 

 

0.43

%

 

22.30

%

Money market

2,164,436

 

 

2,034,021

 

 

1,904,643

 

 

6.41

%

 

13.64

%

Time certificates of deposit

1,058,641

 

 

1,092,217

 

 

1,470,116

 

 

(3.07)

%

 

(27.99)

%

Total deposits

10,851,308

 

 

10,716,821

 

 

9,326,091

 

 

1.25

%

 

16.35

%

Borrowings

 

 

 

 

 

 

 

 

 

Federal Home Loan Bank borrowings

145,765

 

 

145,770

 

 

70,708

 

 

%

 

106.15

%

Long-term borrowings, net

37,447

 

 

37,433

 

 

74,894

 

 

0.04

%

 

(50.00)

%

Junior subordinated debentures, net

62,850

 

 

62,850

 

 

62,848

 

 

%

 

%

Subordinated debentures, net

49,672

 

 

49,648

 

 

84,341

 

 

0.05

%

 

(41.11)

%

Total borrowings

295,734

 

 

295,701

 

 

292,791

 

 

0.01

%

 

1.01

%

Total deposits and borrowings

11,147,042

 

 

11,012,522

 

 

9,618,882

 

 

1.22

%

 

15.89

%

Other liabilities

336,899

 

 

338,286

 

 

237,433

 

 

(0.41)

%

 

41.89

%

Total liabilities

11,483,941

 

 

11,350,808

 

 

9,856,315

 

 

1.17

%

 

16.51

%

Stockholders' equity

 

 

 

 

 

 

 

 

 

Common stock

328

 

 

328

 

 

342

 

 

%

 

(4.09)

%

Additional paid in capital

944,218

 

 

942,685

 

 

1,033,949

 

 

0.16

%

 

(8.68)

%

Retained earnings

696,546

 

 

676,834

 

 

621,831

 

 

2.91

%

 

12.02

%

Accumulated other comprehensive income, net of tax

48,632

 

 

51,845

 

 

26,202

 

 

(6.20)

%

 

85.60

%

Total stockholders' equity

1,689,724

 

 

1,671,692

 

 

1,682,324

 

 

1.08

%

 

0.44

%

Total liabilities and stockholders' equity

$

13,173,665

 

 

$

13,022,500

 

 

$

11,538,639

 

 

1.16

%

 

14.17

%

CONSOLIDATED STATEMENTS OF INCOME

 

 

 

 

 

(Unaudited, dollars in thousands, except per share data)

 

 

 

 

 

 

Three Months Ended

 

 

 

 

 

 

 

 

 

 

 

% Change

 

% Change

 

September 30
2020

 

June 30
2020

 

September 30
2019

 

Sept 2020 vs.

 

Sept 2020 vs.

 

 

 

 

Jun 2020

 

Sept 2019

Interest income

 

 

 

 

 

 

 

 

 

Interest on federal funds sold and short-term investments

$

254

 

 

$

132

 

 

$

680

 

 

92.42

%

 

(62.65)

%

Interest and dividends on securities

7,227

 

 

7,840

 

 

8,283

 

 

(7.82)

%

 

(12.75)

%

Interest and fees on loans

90,112

 

 

91,634

 

 

110,205

 

 

(1.66)

%

 

(18.23)

%

Interest on loans held for sale

326

 

 

359

 

 

456

 

 

(9.19)

%

 

(28.51)

%

Total interest income

97,919

 

 

99,965

 

 

119,624

 

 

(2.05)

%

 

(18.14)

%

Interest expense

 

 

 

 

 

 

 

 

 

Interest on deposits

5,432

 

 

7,027

 

 

11,846

 

 

(22.70)

%

 

(54.14)

%

Interest on borrowings

1,604

 

 

1,840

 

 

3,180

 

 

(12.83)

%

 

(49.56)

%

Total interest expense

7,036

 

 

8,867

 

 

15,026

 

 

(20.65)

%

 

(53.17)

%

Net interest income

90,883

 

 

91,098

 

 

104,598

 

 

(0.24)

%

 

(13.11)

%

Provision for credit losses

7,500

 

 

20,000

 

 

 

 

(62.50)

%

 

100.00%

Net interest income after provision for credit losses

83,383

 

 

71,098

 

 

104,598

 

 

17.28

%

 

(20.28)

%

Noninterest income

 

 

 

 

 

 

 

 

 

Deposit account fees

3,428

 

 

2,829

 

 

5,299

 

 

21.17

%

 

(35.31)

%

Interchange and ATM fees

3,044

 

 

5,214

 

 

6,137

 

 

(41.62)

%

 

(50.40)

%

Investment management

7,571

 

 

7,296

 

 

7,188

 

 

3.77

%

 

5.33

%

Mortgage banking income

7,704

 

 

5,005

 

 

3,968

 

 

53.93

%

 

94.15

%

Increase in cash surrender value of life insurance policies

1,314

 

 

1,312

 

 

1,304

 

 

0.15

%

 

0.77

%

Gain on life insurance benefits

 

 

335

 

 

434

 

 

(100.00)

%

 

(100.00)

%

Loan level derivative income

2,457

 

 

2,864

 

 

2,739

 

 

(14.21)

%

 

(10.30)

%

Other noninterest income

3,829

 

 

3,335

 

 

4,747

 

 

14.81

%

 

(19.34)

%

Total noninterest income

29,347

 

 

28,190

 

 

31,816

 

 

4.10

%

 

(7.76)

%

Noninterest expenses

 

 

 

 

 

 

 

 

 

Salaries and employee benefits

38,409

 

 

37,269

 

 

39,432

 

 

3.06

%

 

(2.59)

%

Occupancy and equipment expenses

9,273

 

 

9,273

 

 

8,555

 

 

%

 

8.39

%

Data processing and facilities management

1,567

 

 

1,459

 

 

1,515

 

 

7.40

%

 

3.43

%

FDIC assessment

1,034

 

 

503

 

 

 

 

105.57

%

 

100.00%

Merger and acquisition expense

 

 

 

 

705

 

 

n/a

 

(100.00)

%

Loss on termination of derivatives

684

 

 

 

 

 

 

100.00%

 

100.00%

Other noninterest expenses

15,691

 

 

18,103

 

 

17,326

 

 

(13.32)

%

 

(9.44)

%

Total noninterest expenses

66,658

 

 

66,607

 

 

67,533

 

 

0.08

%

 

(1.30)

%

Income before income taxes

46,072

 

 

32,681

 

 

68,881

 

 

40.97

%

 

(33.11)

%

Provision for income taxes

11,199

 

 

7,779

 

 

17,036

 

 

43.96

%

 

(34.26)

%

Net Income

$

34,873

 

 

$

24,902

 

 

$

51,845

 

 

40.04

%

 

(32.74)

%

 

 

 

 

 

 

 

 

 

 

Weighted average common shares (basic)

32,951,918

 

 

32,944,761

 

 

34,361,176

 

 

 

 

 

Common share equivalents

24,758

 

 

28,098

 

 

39,390

 

 

 

 

 

Weighted average common shares (diluted)

32,976,676

 

 

32,972,859

 

 

34,400,566

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic earnings per share

$

1.06

 

 

$

0.76

 

 

$

1.51

 

 

39.47

%

 

(29.80)

%

Diluted earnings per share

$

1.06

 

 

$

0.76

 

 

$

1.51

 

 

39.47

%

 

(29.80)

%

 

 

 

 

 

 

 

 

 

 

Reconciliation of Net Income (GAAP) to Operating Net Income (Non-GAAP):

 

 

 

 

 

 

Net income

$

34,873

 

 

$

24,902

 

 

$

51,845

 

 

 

 

 

Noninterest income components

 

 

 

 

 

 

 

 

 

Less - gain on sale of loans

 

 

 

 

951

 

 

 

 

 

Noninterest expense components

 

 

 

 

 

 

 

 

 

Add - loss on termination of derivatives

684

 

 

 

 

 

 

 

 

 

Add - merger and acquisition expenses

 

 

 

 

705

 

 

 

 

 

Noncore increases (decreases) to income before taxes

684

 

 

 

 

(246)

 

 

 

 

 

Net tax (benefit) expense associated with noncore items (1)

(192)

 

 

 

 

72

 

 

 

 

 

Total tax impact

(192)

 

 

 

 

72

 

 

 

 

 

Noncore increases (decreases) to net income

492

 

 

 

 

(174)

 

 

 

 

 

Operating net income

$

35,365

 

 

$

24,902

 

 

$

51,671

 

 

42.02

%

 

(31.56)

%

 

 

 

 

 

 

 

 

 

 

Diluted earnings per share, on an operating basis

$

1.07

 

 

$

0.76

 

 

$

1.50

 

 

40.79

%

 

(28.67)

%

 

 

 

 

 

 

 

 

 

 

(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)

3.13

%

 

3.25

%

 

4.03

%

 

 

 

 

Return on average assets GAAP (calculated by dividing net
income by average assets)

1.07

%

 

0.79

%

 

1.78

%

 

 

 

 

Return on average assets on an operating basis (calculated by
dividing net operating earnings by average assets)

1.08

%

 

0.79

%

 

1.77

%

 

 

 

 

Return on average common equity GAAP (calculated by
dividing net income by average common equity)

8.21

%

 

5.97

%

 

12.33

%

 

 

 

 

Return on average common equity on an operating basis
(calculated by dividing net operating earnings by average
common equity)

8.32

%

 

5.97

%

 

12.29

%

 

 

 

 

CONSOLIDATED STATEMENTS OF INCOME

 

 

 

 

 

(Unaudited, dollars in thousands, except per share data)

 

 

 

 

 

 

Nine Months Ended

 

 

 

 

 

 

 

 

% Change

 

 

September 30
2020

 

September 30
2019

 

Sept 2020 vs.

 

 

 

 

Sept 2019

 

 

 

 

 

 

 

Interest income

 

 

 

 

 

 

Interest on federal funds sold and short-term investments

 

$

546

 

 

$

1,753

 

 

(68.85)

%

Interest and dividends on securities

 

23,033

 

 

24,295

 

 

(5.19)

%

Interest and fees on loans

 

280,768

 

 

306,736

 

 

(8.47)

%

Interest on loans held for sale

 

917

 

 

527

 

 

74.00

%

Total interest income

 

305,264

 

 

333,311

 

 

(8.41)

%

Interest expense

 

 

 

 

 

 

Interest on deposits

 

23,351

 

 

30,052

 

 

(22.30)

%

Interest on borrowings

 

5,628

 

 

10,117

 

 

(44.37)

%

Total interest expense

 

28,979

 

 

40,169

 

 

(27.86)

%

Net interest income

 

276,285

 

 

293,142

 

 

(5.75)

%

Provision for loan losses

 

52,500

 

 

2,000

 

 

nm

Net interest income after provision for loan losses

 

223,785

 

 

291,142

 

 

(23.14)

%

Noninterest income

 

 

 

 

 

 

Deposit account fees

 

11,227

 

 

14,785

 

 

(24.06)

%

Interchange and ATM fees

 

13,154

 

 

16,447

 

 

(20.02)

%

Investment management

 

21,696

 

 

21,089

 

 

2.88

%

Mortgage banking income

 

13,570

 

 

8,184

 

 

65.81

%

Increase in cash surrender value of life insurance policies

 

3,902

 

 

3,572

 

 

9.24

%

Gain on life insurance benefits

 

692

 

 

434

 

 

59.45

%

Loan level derivative income

 

8,918

 

 

4,312

 

 

106.82

%

Other noninterest income

 

10,813

 

 

13,174

 

 

(17.92)

%

Total noninterest income

 

83,972

 

 

81,997

 

 

2.41

%

Noninterest expenses

 

 

 

 

 

 

Salaries and employee benefits

 

113,027

 

 

111,401

 

 

1.46

%

Occupancy and equipment expenses

 

27,863

 

 

24,109

 

 

15.57

%

Data processing and facilities management

 

4,684

 

 

4,883

 

 

(4.08)

%

FDIC assessment

 

1,537

 

 

1,394

 

 

10.26

%

Merger and acquisition expense

 

 

 

26,433

 

 

(100.00)

%

Loss on termination of derivatives

 

684

 

 

 

 

nm

Other noninterest expenses

 

52,310

 

 

48,656

 

 

7.51

%

Total noninterest expenses

 

200,105

 

 

216,876

 

 

(7.73)

%

Income before income taxes

 

107,652

 

 

156,263

 

 

(31.11)

%

Provision for income taxes

 

21,126

 

 

38,565

 

 

(45.22)

%

Net Income

 

$

86,526

 

 

$

117,698

 

 

(26.48)

%

 

 

 

 

 

 

 

Weighted average common shares (basic)

 

33,358,879

 

 

32,283,196

 

 

 

Common share equivalents

 

27,871

 

 

45,416

 

 

 

Weighted average common shares (diluted)

 

33,386,750

 

 

32,328,612

 

 

 

 

 

 

 

 

 

 

Basic earnings per share

 

$

2.59

 

 

$

3.65

 

 

(29.04)

%

Diluted earnings per share

 

$

2.59

 

 

$

3.64

 

 

(28.85)

%

 

 

 

 

 

 

 

Reconciliation of Net Income (GAAP) to Operating Net Income (Non-GAAP):

 

 

 

 

 

 

Net Income

 

$

86,526

 

 

$

117,698

 

 

 

Noninterest income components

 

 

 

 

 

 

Less - gain on sale of loans

 

 

 

951

 

 

 

Noninterest expense components

 

 

 

 

 

 

Add - loss on termination of derivatives

 

684

 

 

 

 

 

Add - merger and acquisition expenses

 

 

 

26,433

 

 

 

Noncore increases to income before taxes

 

684

 

 

25,482

 

 

 

Net tax benefit associated with noncore items (1)

 

(192)

 

 

(6,686)

 

 

 

Add - adjustment for tax effect of previously incurred merger and
acquisition expenses

 

 

 

650

 

 

 

Total tax impact

 

(192)

 

 

(6,036)

 

 

 

Noncore increases to net income

 

$

492

 

 

$

19,446

 

 

 

Operating net income

 

$

87,018

 

 

$

137,144

 

 

(36.55)

%

 

 

 

 

 

 

 

Diluted earnings per share, on an operating basis

 

$

2.61

 

 

$

4.24

 

 

(38.44)

%

 

 

 

 

 

 

 

(1) The net tax benefit associated with noncore items is determined by assessing whether each noncore item is included or excluded from net taxable income
and applying the Company's combined marginal tax rate to only those items included in net taxable income.

 

 

 

 

 

 

 

Performance ratios

 

 

 

 

 

 

Net interest margin (FTE)

 

3.36

%

 

4.08

%

 

 

Return on average assets GAAP (calculated by dividing net income by average assets)

 

0.93

%

 

1.47

%

 

 

Return on average assets on an operating basis (calculated by dividing net
operating earnings by average assets)

 

0.94

%

 

1.72

%

 

 

Return on average common equity GAAP (calculated by dividing net income by
average common equity)

 

6.80

%

 

10.77

%

 

 

Return on average common equity on an operating basis (calculated by dividing
net operating earnings by average common equity)

 

6.84

%

 

12.55

%

 

 

nm = not meaningful

ASSET QUALITY

 

 

(Unaudited, dollars in thousands)

 

Nonperforming Assets At

 

 

September 30
2020

 

June 30
2020

 

September 30
2019

Nonperforming loans

 

 

 

 

 

 

Commercial & industrial loans

 

$

36,851

 

 

$

20,736

 

 

$

23,507

 

Commercial real estate loans

 

38,164

 

 

6,313

 

 

1,666

 

Small business loans

 

542

 

 

619

 

 

112

 

Residential real estate loans

 

16,229

 

 

14,561

 

 

13,088

 

Home equity

 

6,159

 

 

6,437

 

 

7,231

 

Other consumer

 

80

 

 

148

 

 

98

 

Total nonperforming loans

 

98,025

 

 

48,814

 

 

45,702

 

Other real estate owned

 

 

 

 

 

2,500

 

Total nonperforming assets

 

$

98,025

 

 

$

48,814

 

 

$

48,202

 

 

 

 

 

 

 

 

Nonperforming loans/gross loans

 

1.04

%

 

0.52

%

 

0.51

%

Nonperforming assets/total assets

 

0.74

%

 

0.37

%

 

0.42

%

Allowance for credit losses/nonperforming loans

 

117.95

%

 

229.80

%

 

146.47

%

Allowance for credit losses/total loans

 

1.23

%

 

1.20

%

 

0.75

%

Delinquent loans/total loans

 

0.31

%

 

0.24

%

 

0.26

%

 

 

 

 

 

 

 

 

 

Nonperforming Assets Reconciliation for the Three Months Ended

 

 

September 30
2020

 

June 30
2020

 

September 30
2019

 

 

 

 

 

 

 

Nonperforming assets beginning balance

 

$

48,814

 

 

$

48,040

 

 

$

48,183

 

New to nonperforming

 

60,850

 

 

8,215

 

 

4,946

 

Loans charged-off

 

(4,304)

 

 

(710)

 

 

(707)

 

Loans paid-off

 

(5,050)

 

 

(2,210)

 

 

(3,041)

 

Loans restored to performing status

 

(2,229)

 

 

(4,529)

 

 

(714)

 

Valuation write down

 

 

 

 

 

(389)

 

Other

 

(56)

 

 

8

 

 

(76)

 

Nonperforming assets ending balance

 

$

98,025

 

 

$

48,814

 

 

$

48,202

 

 

 

Net Charge-Offs (Recoveries)

 

 

Three Months Ended

 

Nine Months Ended

 

 

September 30
2020

 

June 30
2020

 

September 30
2019

 

September 30
2020

 

September 30
2019

Net charge-offs (recoveries)

 

 

 

 

 

 

 

 

 

 

Commercial and industrial loans

 

$

184

 

 

$

(4)

 

 

$

(1,003)

 

 

$

138

 

 

$

(1,127)

 

Commercial real estate loans

 

3,876

 

 

 

 

(24)

 

 

3,876

 

 

(70)

 

Small business loans

 

47

 

 

33

 

 

64

 

 

186

 

 

211

 

Residential real estate loans

 

(1)

 

 

 

 

(140)

 

 

(2)

 

 

(141)

 

Home equity

 

(21)

 

 

(91)

 

 

(166)

 

 

(32)

 

 

(66)

 

Other consumer

 

(34)

 

 

262

 

 

287

 

 

469

 

 

544

 

Total net charge-offs (recoveries)

 

$

4,051

 

 

$

200

 

 

$

(982)

 

 

$

4,635

 

 

$

(649)

 

 

 

 

 

 

 

 

 

 

 

 

Net charge-offs (recoveries) to average loans (annualized)

 

0.17

%

 

0.01

%

 

(0.04)

%

 

0.07

%

 

(0.01)

%

 

 

Troubled Debt Restructurings At

 

 

September 30
2020

 

June 30
2020

 

September 30
2019

Troubled debt restructurings on accrual status

 

$

17,521

 

 

$

17,741

 

 

$

20,182

 

Troubled debt restructurings on nonaccrual status

 

23,810

 

 

24,098

 

 

26,232

 

Total troubled debt restructurings

 

$

41,331

 

 

$

41,839

 

 

$

46,414

 

 

 

 

 

 

 

 

BALANCE SHEET AND CAPITAL RATIOS

 

 

 

 

 

 

 

 

September 30
2020

 

June 30
2020

 

September 30
2019

Gross loans/total deposits

 

86.67

%

 

87.34

%

 

95.58

%

Common equity tier 1 capital ratio (1)

 

12.40

%

 

12.26

%

 

12.52

%

Tier 1 leverage capital ratio (1)

 

9.52

%

 

9.57

%

 

10.83

%

Common equity to assets ratio GAAP

 

12.83

%

 

12.84

%

 

14.58

%

Tangible common equity to tangible assets ratio (2)

 

9.17

%

 

9.12

%

 

10.42

%

Book value per share GAAP

 

$

51.27

 

 

$

50.75

 

 

$

48.95

 

Tangible book value per share (2)

 

$

35.17

 

 

$

34.59

 

 

$

33.36

 

(1) Estimated number for September 30, 2020.
(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

 

 

September 30, 2020

 

June 30, 2020

 

September 30, 2019

 

 

 

 

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

 

$

997,921

 

 

$

254

 

 

0.10

%

 

$

724,634

 

 

$

132

 

 

0.07

%

 

$

115,255

 

 

$

680

 

 

2.34

%

Securities

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Securities - trading

 

2,607

 

 

 

 

%

 

2,393

 

 

 

 

%

 

1,947

 

 

 

 

%

Securities - taxable investments

 

1,139,843

 

 

7,218

 

 

2.52

%

 

1,206,631

 

 

7,831

 

 

2.61

%

 

1,204,314

 

 

8,269

 

 

2.72

%

Securities - nontaxable investments (1)

 

1,146

 

 

11

 

 

3.82

%

 

1,145

 

 

11

 

 

3.86

%

 

1,739

 

 

18

 

 

4.11

%

Total securities

 

$

1,143,596

 

 

$

7,229

 

 

2.51

%

 

$

1,210,169

 

 

$

7,842

 

 

2.61

%

 

$

1,208,000

 

 

$

8,287

 

 

2.72

%

Loans held for sale

 

50,709

 

 

326

 

 

2.56

%

 

50,613

 

 

359

 

 

2.85

%

 

102,065

 

 

456

 

 

1.77

%

Loans

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Commercial and industrial (1)

 

2,033,385

 

 

17,724

 

 

3.47

%

 

1,914,830

 

 

17,363

 

 

3.65

%

 

1,380,007

 

 

20,274

 

 

5.83

%

Commercial real estate (1)

 

4,086,594

 

 

41,578

 

 

4.05

%

 

4,051,342

 

 

42,371

 

 

4.21

%

 

4,017,670

 

 

49,139

 

 

4.85

%

Commercial construction

 

568,007

 

 

5,126

 

 

3.59

%

 

538,767

 

 

5,314

 

 

3.97

%

 

510,277

 

 

7,155

 

 

5.56

%

Small business

 

168,662

 

 

2,303

 

 

5.43

%

 

174,438

 

 

2,388

 

 

5.51

%

 

172,942

 

 

2,626

 

 

6.02

%

Total commercial

 

6,856,648

 

 

66,731

 

 

3.87

%

 

6,679,377

 

 

67,436

 

 

4.06

%

 

6,080,896

 

 

79,194

 

 

5.17

%

Residential real estate

 

1,387,055

 

 

13,436

 

 

3.85

%

 

1,474,495

 

 

13,801

 

 

3.76

%

 

1,644,467

 

 

17,329

 

 

4.18

%

Home equity

 

1,107,685

 

 

9,658

 

 

3.47

%

 

1,133,034

 

 

10,132

 

 

3.60

%

 

1,142,137

 

 

13,309

 

 

4.62

%

Total consumer real estate

 

2,494,740

 

 

23,094

 

 

3.68

%

 

2,607,529

 

 

23,933

 

 

3.69

%

 

2,786,604

 

 

30,638

 

 

4.36

%

Other consumer

 

24,134

 

 

515

 

 

8.49

%

 

24,971

 

 

500

 

 

8.05

%

 

30,294

 

 

627

 

 

8.21

%

Total loans

 

$

9,375,522

 

 

$

90,340

 

 

3.83

%

 

$

9,311,877

 

 

$

91,869

 

 

3.97

%

 

$

8,897,794

 

 

$

110,459

 

 

4.93

%

Total interest-earning assets

 

$

11,567,748

 

 

$

98,149

 

 

3.38

%

 

$

11,297,293

 

 

$

100,202

 

 

3.57

%

 

$

10,323,114

 

 

$

119,882

 

 

4.61

%

Cash and due from banks

 

124,482

 

 

 

 

 

 

119,692

 

 

 

 

 

 

121,515

 

 

 

 

 

Federal Home Loan Bank stock

 

15,090

 

 

 

 

 

 

23,175

 

 

 

 

 

 

15,781

 

 

 

 

 

Other assets

 

1,313,194

 

 

 

 

 

 

1,287,620

 

 

 

 

 

 

1,119,388

 

 

 

 

 

Total assets

 

$

13,020,514

 

 

 

 

 

 

$

12,727,780

 

 

 

 

 

 

$

11,579,798

 

 

 

 

 

Interest-bearing liabilities

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Deposits

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Savings and interest
checking accounts

 

$

3,836,488

 

 

$

838

 

 

0.09

%

 

$

3,679,729

 

 

$

1,101

 

 

0.12

%

 

$

3,157,870

 

 

$

2,120

 

 

0.27

%

Money market

 

2,087,822

 

 

945

 

 

0.18

%

 

1,972,986

 

 

1,377

 

 

0.28

%

 

1,942,932

 

 

4,220

 

 

0.86

%

Time deposits

 

1,076,546

 

 

3,649

 

 

1.35

%

 

1,186,189

 

 

4,549

 

 

1.54

%

 

1,471,749

 

 

5,506

 

 

1.48

%

Total interest-bearing deposits

 

$

7,000,856

 

 

$

5,432

 

 

0.31

%

 

$

6,838,904

 

 

$

7,027

 

 

0.41

%

 

$

6,572,551

 

 

$

11,846

 

 

0.72

%

Borrowings

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Federal Home Loan Bank borrowings

 

145,766

 

 

408

 

 

1.11

%

 

339,393

 

 

433

 

 

0.51

%

 

156,054

 

 

945

 

 

2.40

%

Long-term borrowings

 

37,439

 

 

141

 

 

1.50

%

 

71,629

 

 

343

 

 

1.93

%

 

74,885

 

 

684

 

 

3.62

%

Junior subordinated debentures

 

62,850

 

 

438

 

 

2.77

%

 

62,849

 

 

446

 

 

2.85

%

 

62,848

 

 

506

 

 

3.19

%

Subordinated debentures

 

49,659

 

 

617

 

 

4.94

%

 

49,635

 

 

618

 

 

5.01

%

 

84,319

 

 

1,045

 

 

4.92

%

Total borrowings

 

$

295,714

 

 

$

1,604

 

 

2.16

%

 

$

523,506

 

 

$

1,840

 

 

1.41

%

 

$

378,106

 

 

$

3,180

 

 

3.34

%

Total interest-bearing liabilities

 

$

7,296,570

 

 

$

7,036

 

 

0.38

%

 

$

7,362,410

 

 

$

8,867

 

 

0.48

%

 

$

6,950,657

 

 

$

15,026

 

 

0.86

%

Noninterest-bearing demand deposits

 

3,700,902

 

 

 

 

 

 

3,371,262

 

 

 

 

 

 

2,753,596

 

 

 

 

 

Other liabilities

 

332,937

 

 

 

 

 

 

315,979

 

 

 

 

 

 

207,924

 

 

 

 

 

Total liabilities

 

$

11,330,409

 

 

 

 

 

 

$

11,049,651

 

 

 

 

 

 

$

9,912,177

 

 

 

 

 

Stockholders' equity

 

1,690,105

 

 

 

 

 

 

1,678,129

 

 

 

 

 

 

1,667,621

 

 

 

 

 

Total liabilities and
stockholders' equity

 

$

13,020,514

 

 

 

 

 

 

$

12,727,780

 

 

 

 

 

 

$

11,579,798

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net interest income

 

 

 

$

91,113

 

 

 

 

 

 

$

91,335

 

 

 

 

 

 

$

104,856

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest rate spread (2)

 

 

 

 

 

3.00

%

 

 

 

 

 

3.09

%

 

 

 

 

 

3.75

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net interest margin (3)

 

 

 

 

 

3.13

%

 

 

 

 

 

3.25

%

 

 

 

 

 

4.03

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Supplemental Information

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total deposits, including
demand deposits

 

$

10,701,758

 

 

$

5,432

 

 

 

 

$

10,210,166

 

 

$

7,027

 

 

 

 

$

9,326,147

 

 

$

11,846

 

 

 

Cost of total deposits

 

 

 

 

 

0.20

%

 

 

 

 

 

0.28

%

 

 

 

 

 

0.50

%

Total funding liabilities,
including demand deposits

 

$

10,997,472

 

 

$

7,036

 

 

 

 

$

10,733,672

 

 

$

8,867

 

 

 

 

$

9,704,253

 

 

$

15,026

 

 

 

Cost of total funding liabilities

 

 

 

 

 

0.25

%

 

 

 

 

 

0.33

%

 

 

 

 

 

0.61

%

(1) The total amount of adjustment to present interest income and yield on a fully tax-equivalent basis is $230,000, $237,000, and $258,000 for the three months ended September 30, 2020, June 30, 2020, and September 30, 2019, 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.

 

 

Nine Months Ended

 

 

September 30, 2020

 

September 30, 2019

 

 

 

 

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

 

$

599,827

 

 

$

546

 

 

0.12

%

 

$

96,305

 

 

$

1,753

 

 

2.43

%

Securities

 

 

 

 

 

 

 

 

 

 

 

 

Securities - trading

 

2,421

 

 

 

 

%

 

1,820

 

 

 

 

%

Securities - taxable investments

 

1,178,671

 

 

23,006

 

 

2.61

%

 

1,176,961

 

 

24,255

 

 

2.76

%

Securities - nontaxable investments (1)

 

1,176

 

 

34

 

 

3.86

%

 

1,739

 

 

52

 

 

4.00

%

Total securities

 

$

1,182,268

 

 

$

23,040

 

 

2.60

%

 

$

1,180,520

 

 

$

24,307

 

 

2.75

%

Loans held for sale

 

43,150

 

 

917

 

 

2.84

%

 

40,768

 

 

527

 

 

1.73

%

Loans

 

 

 

 

 

 

 

 

 

 

 

 

Commercial and industrial (1)

 

1,784,715

 

 

52,027

 

 

3.89

%

 

1,300,815

 

 

55,674

 

 

5.72

%

Commercial real estate (1)

 

4,050,154

 

 

129,800

 

 

4.28

%

 

3,785,964

 

 

139,229

 

 

4.92

%

Commercial construction

 

554,222

 

 

17,341

 

 

4.18

%

 

453,097

 

 

20,037

 

 

5.91

%

Small business

 

172,575

 

 

7,253

 

 

5.61

%

 

168,280

 

 

7,720

 

 

6.13

%

Total commercial

 

6,561,666

 

 

206,421

 

 

4.20

%

 

5,708,156

 

 

222,660

 

 

5.22

%

Residential real estate

 

1,473,812

 

 

41,856

 

 

3.79

%

 

1,442,007

 

 

44,351

 

 

4.11

%

Home equity

 

1,125,817

 

 

31,617

 

 

3.75

%

 

1,125,144

 

 

38,797

 

 

4.61

%

Total consumer real estate

 

2,599,629

 

 

73,473

 

 

3.78

%

 

2,567,151

 

 

83,148

 

 

4.33

%

Other consumer

 

25,643

 

 

1,587

 

 

8.27

%

 

25,317

 

 

1,623

 

 

8.57

%

Total loans

 

$

9,186,938

 

 

$

281,481

 

 

4.09

%

 

$

8,300,624

 

 

$

307,431

 

 

4.95

%

Total interest-earning assets

 

$

11,012,183

 

 

$

305,984

 

 

3.71

%

 

$

9,618,217

 

 

$

334,018

 

 

4.64

%

Cash and due from banks

 

122,302

 

 

 

 

 

 

117,465

 

 

 

 

 

Federal Home Loan Bank stock

 

17,645

 

 

 

 

 

 

16,561

 

 

 

 

 

Other assets

 

1,256,074

 

 

 

 

 

 

927,837

 

 

 

 

 

Total assets

 

$

12,408,204

 

 

 

 

 

 

$

10,680,080

 

 

 

 

 

Interest-bearing liabilities

 

 

 

 

 

 

 

 

 

 

 

 

Deposits

 

 

 

 

 

 

 

 

 

 

 

 

Savings and interest checking accounts

 

$

3,592,069

 

 

$

3,873

 

 

0.14

%

 

$

3,085,974

 

 

$

6,249

 

 

0.27

%

Money market

 

1,978,006

 

 

5,495

 

 

0.37

%

 

1,796,081

 

 

11,379

 

 

0.85

%

Time deposits

 

1,202,746

 

 

13,983

 

 

1.55

%

 

1,190,950

 

 

12,424

 

 

1.39

%

Total interest-bearing deposits

 

$

6,772,821

 

 

$

23,351

 

 

0.46

%

 

$

6,073,005

 

 

$

30,052

 

 

0.66

%

Borrowings

 

 

 

 

 

 

 

 

 

 

 

 

Federal Home Loan Bank borrowings

 

205,244

 

 

1,369

 

 

0.89

%

 

213,896

 

 

4,028

 

 

2.52

%

Line of Credit

 

 

 

 

 

%

 

3,595

 

 

104

 

 

3.87

%

Long-term borrowings

 

61,240

 

 

1,045

 

 

2.28

%

 

51,327

 

 

1,461

 

 

3.81

%

Junior subordinated debentures

 

62,849

 

 

1,362

 

 

2.89

%

 

69,176

 

 

1,891

 

 

3.65

%

Subordinated debentures

 

49,635

 

 

1,852

 

 

4.98

%

 

71,242

 

 

2,633

 

 

4.94

%

Total borrowings

 

$

378,968

 

 

$

5,628

 

 

1.98

%

 

$

409,236

 

 

$

10,117

 

 

3.31

%

Total interest-bearing liabilities

 

$

7,151,789

 

 

$

28,979

 

 

0.54

%

 

$

6,482,241

 

 

$

40,169

 

 

0.83

%

Noninterest-bearing demand deposits

 

3,257,058

 

 

 

 

 

 

2,572,357

 

 

 

 

 

Other liabilities

 

300,248

 

 

 

 

 

 

164,783

 

 

 

 

 

Total liabilities

 

$

10,709,095

 

 

 

 

 

 

$

9,219,381

 

 

 

 

 

Stockholders' equity

 

1,699,109

 

 

 

 

 

 

1,460,699

 

 

 

 

 

Total liabilities and stockholders' equity

 

$

12,408,204

 

 

 

 

 

 

$

10,680,080

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net interest income

 

 

 

$

277,005

 

 

 

 

 

 

$

293,849

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest rate spread (2)

 

 

 

 

 

3.17

%

 

 

 

 

 

3.81

%

 

 

 

 

 

 

 

 

 

 

 

 

 

Net interest margin (3)

 

 

 

 

 

3.36

%

 

 

 

 

 

4.08

%

 

 

 

 

 

 

 

 

 

 

 

 

 

Supplemental Information

 

 

 

 

 

 

 

 

 

 

 

 

Total deposits, including demand deposits

 

$

10,029,879

 

 

$

23,351

 

 

 

 

$

8,645,362

 

 

$

30,052

 

 

 

Cost of total deposits

 

 

 

 

 

0.31

%

 

 

 

 

 

0.46

%

Total funding liabilities, including demand deposits

 

$

10,408,847

 

 

$

28,979

 

 

 

 

$

9,054,598

 

 

$

40,169

 

 

 

Cost of total funding liabilities

 

 

 

 

 

0.37

%

 

 

 

 

 

0.59

%

(1) The total amount of adjustment to present interest income and yield on a fully tax-equivalent basis is $720,000 and $707,000 for the nine months ended September 30, 2020 and 2019, respectively.
(2) Interest rate spread represents the difference between weighted average yield on interest-earning assets and the weighted average cost of interest-bearing liabilities.
(3) Net interest margin represents annualized net interest income as a percentage of average interest-earning assets.

APPENDIX A: NON-GAAP Reconciliation of Capital Metrics

(Unaudited, dollars in thousands, except per share data)

The following table summarizes the calculation of the Company's tangible common equity ratio and tangible book value per share at the dates indicated:

 

 

September 30
2020

 

June 30
2020

 

September 30
2019

 

Tangible common equity

 

(Dollars in thousands, except per share data)

 

Stockholders' equity (GAAP)

 

$

1,689,724

 

 

$

1,671,692

 

 

$

1,682,324

 

(a)

Less: Goodwill and other intangibles

 

530,749

 

 

532,202

 

 

535,869

 

 

Tangible common equity

 

$

1,158,975

 

 

$

1,139,490

 

 

$

1,146,455

 

(b)

Tangible assets

 

 

 

 

 

 

 

Assets (GAAP)

 

$

13,173,665

 

 

$

13,022,500

 

 

$

11,538,639

 

(c)

Less: Goodwill and other intangibles

 

530,749

 

 

532,202

 

 

535,869

 

 

Tangible assets

 

$

12,642,916

 

 

$

12,490,298

 

 

$

11,002,770

 

(d)

 

 

 

 

 

 

 

 

Common Shares

 

32,955,547

 

 

32,942,110

 

 

34,366,781

 

(e)

 

 

 

 

 

 

 

 

Common equity to assets ratio (GAAP)

 

12.83

%

 

12.84

%

 

14.58

%

(a/c)

Tangible common equity to tangible assets ratio (Non-GAAP)

 

9.17

%

 

9.12

%

 

10.42

%

(b/d)

Book value per share (GAAP)

 

$

51.27

 

 

$

50.75

 

 

$

48.95

 

(a/e)

Tangible book value per share (Non-GAAP)

 

$

35.17

 

 

$

34.59

 

 

$

33.36

 

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

 

Three Months Ended

 

Nine Months Ended

 

 

September 30
2020

 

June 30
2020

 

September 30
2019

 

September 30
2020

 

September 30
2019

 

Net interest income (GAAP)

$

90,883

 

 

$

91,098

 

 

$

104,598

 

 

$

276,285

 

 

$

293,142

 

(a)

 

 

 

 

 

 

 

 

 

 

 

Noninterest income (GAAP)

$

29,347

 

 

$

28,190

 

 

$

31,816

 

 

$

83,972

 

 

$

81,997

 

(b)

Less:

 

 

 

 

 

 

 

 

 

 

Gain on sale of loans

 

 

 

 

951

 

 

 

 

951

 

 

Noninterest income on an operating
basis (Non-GAAP)

$

29,347

 

 

$

28,190

 

 

$

30,865

 

 

$

83,972

 

 

$

81,046

 

(c)

 

 

 

 

 

 

 

 

 

 

 

Noninterest expense (GAAP)

$

66,658

 

 

$

66,607

 

 

$

67,533

 

 

$

200,105

 

 

$

216,876

 

(d)

Less:

 

 

 

 

 

 

 

 

 

 

Merger and acquisition expense

 

 

 

 

705

 

 

 

 

26,433

 

 

Loss on termination of derivatives

684

 

 

 

 

 

 

684

 

 

 

 

Noninterest expense on an
operating basis (Non-GAAP)

$

65,974

 

 

$

66,607

 

 

$

66,828

 

 

$

199,421

 

 

$

190,443

 

(e)

 

 

 

 

 

 

 

 

 

 

 

Total revenue (GAAP)

$

120,230

 

 

$

119,288

 

 

$

136,414

 

 

$

360,257

 

 

$

375,139

 

(a+b)

Total operating revenue (Non-GAAP)

$

120,230

 

 

$

119,288

 

 

$

135,463

 

 

$

360,257

 

 

$

374,188

 

(a+c)

 

 

 

 

 

 

 

 

 

 

 

Ratios

 

 

 

 

 

 

 

 

 

 

Noninterest income as a % of total
revenue (GAAP based)

24.41

%

 

23.63

%

 

23.32

%

 

23.31

%

 

21.86

%

(b/(a+b))

Noninterest income as a % of total
revenue on an operating basis (Non-GAAP)

24.41

%

 

23.63

%

 

22.78

%

 

23.31

%

 

21.66

%

(c/(a+c))

Efficiency ratio (GAAP based)

55.44

%

 

55.84

%

 

49.51

%

 

55.55

%

 

57.81

%

(d/(a+b))

Efficiency ratio on an operating
basis (Non-GAAP)

54.87

%

 

55.84

%

 

49.33

%

 

55.36

%

 

50.90

%

(e/(a+c))

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

 

2020

 

Q3

 

Q2

 

Q1

 

Volume

Interest

Margin
Impact

 

Volume

Interest

Margin
Impact

 

Volume

Interest

Margin
Impact

 

(Dollars in thousands)

Reported Total (GAAP)

$

11,567,747

 

$

91,112

 

3.13

%

 

$

11,297,293

 

$

91,335

 

3.25

%

 

$

10,165,408

 

$

94,558

 

3.74

%

Adjustments

 

 

 

 

 

 

 

 

 

 

 

PPP Volume @ 1%

(806,584)

 

(2,060)

 

0.16

%

 

(581,351)

 

(1,474)

 

0.12

%

 

 

 

%

PPP Fee amortization

 

(3,172)

 

(0.11)

%

 

 

(2,247)

 

(0.08)

%

 

 

 

%

Cash Position (vs $100M)

(897,921)

 

(229)

 

0.26

%

 

(624,634)

 

(106)

 

0.19

%

 

27,448

 

(135)

 

(0.01)

%

Adjusted Margin

 

 

3.44

%

 

 

 

3.48

%

 

 

 

3.73

%

Acquired loan accretion

 

(2,700)

 

(0.09)

%

 

 

(1,660)

 

(0.06)

%

 

 

(866)

 

(0.03)

%

CD fair value
mark amortization

 

(26)

 

%

 

 

(149)

 

(0.01)

%

 

 

(210)

 

(0.01)

%

Other

 

(561)

 

(0.02)

%

 

 

(477)

 

(0.01)

%

 

 

(396)

 

(0.02)

%

Core Margin
(Non-GAAP)

 

 

3.33

%

 

 

 

3.40

%

 

 

 

3.67

%

 

 

 

 

 

 

 

 

 

 

 

 

Core Margin Compression

(0.07)

%

 

 

 

(0.27)

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Cash

 

 

%

 

 

 

%

 

 

 

 

Securities

 

 

(0.02)

%

 

 

 

%

 

 

 

 

Loans: rate compression

 

(0.08)

%

 

 

 

(0.43)

%

 

 

 

 

Loans: nonaccrual interest reversal

 

(0.05)

%

 

 

 

(0.01)

%

 

 

 

 

Deposits

 

 

0.07

%

 

 

 

0.15

%

 

 

 

 

Borrowings

 

 

0.01

%

 

 

 

0.02

%

 

 

 

 

 

 

 

(0.07)

%

 

 

 

(0.27)

%

 

 

 

 

APPENDIX D: Current Expected Credit Loss ("CECL")

The following table shows the allowance by category for the periods indicated:

 

September 30
2020

June 30
2020

March 31
2020

January 1
2020

 

December 31
2019

 

CECL Methodology

 

Incurred Loss
Methodology

 

(Dollars in thousands)

Commercial and industrial

$

28,219

 

$

25,662

 

$

21,649

 

$

15,659

 

 

$

17,594

 

Commercial real estate

39,386

 

36,956

 

29,498

 

20,224

 

 

32,935

 

Commercial construction

5,210

 

4,501

 

3,747

 

2,401

 

 

6,053

 

Small business

4,593

 

4,561

 

3,829

 

2,241

 

 

1,746

 

Residential real estate

14,163

 

15,046

 

14,847

 

13,691

 

 

3,440

 

Home equity

23,572

 

24,860

 

17,910

 

12,907

 

 

5,576

 

Other consumer

482

 

590

 

896

 

637

 

 

396

 

Total allowance for credit losses

$

115,625

 

$

112,176

 

$

92,376

 

$

67,760

 

 

$

67,740

 

 

 

 

 

 

 

 

Total Loans (GAAP)

$

9,405,193

 

$

9,359,648

 

$

8,916,430

 

$

8,873,639

 

 

$

8,873,639

 

Total Loans, excluding PPP (Non-GAAP)

$

8,593,470

 

$

8,566,665

 

$

8,916,430

 

$

8,873,639

 

 

$

8,873,639

 

 

 

 

 

 

 

 

Allowance as a % of total loans (GAAP)

1.23

%

1.20

%

1.04

%

0.76

%

 

0.76

%

Allowance as a % of total loans, excluding PPP (Non-GAAP)

1.35

%

1.31

%

1.04

%

0.76

%

 

0.76

%

 

 

 

 

 

 

 

APPENDIX E: Commercial Loan Portfolio Characteristics

Commercial Industries Highly Impacted by COVID-19 Pandemic

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

The table below provides total outstanding balances of commercial loans as of September 30, 2020, within industries that are deemed to be highly impacted by the COVID-19 pandemic:

Highly Impacted COVID-19 Industries - Balances

 

 

September 30, 2020 (1)

 

(Dollars in thousands)

Accommodations

$

420,099

 

Food Services

154,846

 

Retail Trade

493,270

 

Other Services (except Public Administration)

147,984

 

Arts, Entertainment, and Recreation

97,962

 

Total

$

1,314,161

 

(1) Amounts presented above exclude $182.3 million of processed PPP loans.

Highly Impacted COVID-19 Industries - Details

 

September 30, 2020

 

(Dollars in thousands)

Accommodations

 

Balance

$

420,099

 

Average borrower loan size

$

4,194

 

% secured by real estate

99.7

%

Weighted average loan to value

52.2

%

Other information:

 

– The accommodation portfolio consists of 71 properties representing a combination of flagged (61%) and non-flagged
(39%) hotels, motels and inns.

– Properties deemed to be located in areas of leisure comprise $169.8 million, or 41% of the total accommodation portfolio.

– Approximately 90% of the balances outstanding are secured by properties located within the six New England states
with the largest concentration in Massachusetts (60%).

 

 

Food Services

 

Balance

$

154,846

 

Average borrower loan size

$

417

 

% secured by real estate

61.5

%

Weighted average loan to value

50.3

%

Other information:

 

– The food services portfolio includes full-service restaurants (65%), limited service restaurants and fast food (33%),
and other types of food service (caterers, bars, mobile food service 2%).

 

 

 

 

Retail Trade

 

Balance

$

493,270

 

Average borrower loan size

$

485

 

% secured by real estate

43.8

%

Weighted average loan to value

55.4

%

Other information:

 

– The retail trade portfolio consists broadly of food and beverage stores (42%), motor vehicle and parts dealers
(26%), gasoline stations (14%), and all other retailers account for (18%).

– Collateral for these loans varies and may consist of real estate, motor vehicles inventories, other types of
inventories and general business assets.

 

 

Other Services (except Public Administration)

 

Balance

$

147,984

 

Average borrower loan size

$

258

 

% secured by real estate

51.2

%

Weighted average loan to value

48.4

%

Other information:

 

– The other services portfolio consists of various for-profit and not-for-profit services diversified across religious, civic
and social service organizations (42%), repair and maintenance business (30%) and personal services, including car
washes, beauty salons, laundry services, funeral homes, pet care and other types of services (28%).

 

 

Arts, Entertainment, and Recreation

 

Balance

$

97,962

 

Average borrower loan size

$

769

 

% secured by real estate

83.8

%

Weighted average loan to value

50.8

%

Other information:

 

– Amusement, gambling and recreational industries make up a majority of this category (95%) and include
amusement/theme parks, bowling centers, fitness centers, golf courses, marinas, and other recreational industries.
Other industries including museums, performing arts, and spectator sports account for the remaining outstanding
balances (5%).

 

 

Other Commercial Loan Portfolio Characteristics

Average total loan size varies across the commercial portfolio with commercial real estate loans having an average size of $1.1 million, commercial and industrial loans have an average loan size of $142,000 and small business loans, which are all under $5.0 million, have an average loan size of $31,000. Additional details below are provided regarding loan sizes of the commercial real estate and commercial and industrial portfolios as of September 30, 2020:

Commercial Real Estate (Including Construction)

 

<$5M

 

$5-10M

 

$10-20M

 

>$20M

 

Total

Dollar Amount (in '000s)

$

2,580,215

 

 

$

876,906

 

 

$

847,254

 

 

$

394,423

 

 

$

4,698,798

 

# of loans

4,031

 

 

124

 

 

60

 

 

16

 

 

4,231

 

Commercial and Industrial (Including PPP)

 

<$5M

 

$5-10M

 

$10-20M

 

>$20M

 

Total

Dollar Amount (in '000s)

$

1,468,905

 

 

$

286,560

 

 

$

243,257

 

 

$

63,623

 

 

$

2,062,345

 

# of loans

14,454

 

 

45

 

 

18

 

 

3

 

 

14,520

 

APPENDIX F: COVID-19 Related Modifications Details

Deferrals by Modification Type

 

Deferral of
Principal
and
Interest

 

Deferral
of
Principal
Only

 

Deferral of
Interest
Only

 

Total
Deferrals

 

Total
Portfolio

 

% Deferral

 

 

 

 

 

(Dollars in thousands)

 

 

 

 

Commercial and industrial

$

5,658

 

 

$

33,032

 

 

$

582

 

 

$

39,272

 

 

$

2,062,345

 

 

1.9

%

Commercial real estate (1)

230,873

 

 

228,521

 

 

26,561

 

 

485,955

 

 

4,698,798

 

 

10.3

%

Business Banking

1,047

 

 

4,339

 

 

236

 

 

5,622

 

 

167,632

 

 

3.4

%

Residential real estate

37,173

 

 

2,515

 

 

 

 

39,688

 

 

1,352,305

 

 

2.9

%

Home equity

6,667

 

 

 

 

6,482

 

 

13,149

 

 

1,101,054

 

 

1.2

%

Consumer

94

 

 

 

 

 

 

94

 

 

23,059

 

 

0.4

%

Total active deferrals as of September
30, 2020

$

281,512

 

 

$

268,407

 

 

$

33,861

 

 

$

583,780

 

 

$

9,405,193

 

 

6.2

%

(1) Balances include commercial construction deferrals.

Deferrals by Industry

 

September 30, 2020

 

(Dollars in thousands)

Highly Impacted Industries

 

Accommodation

$

209,288

 

Food Services

26,679

 

Retail Trade

9,649

 

Other Services (except Public Administration)

17,928

 

Arts, Entertainment, and Recreation

37,703

 

Total Highly Impacted Industries

301,247

 

 

 

Other Industries

 

Real Estate and Leasing

175,270

 

Health Care and Social Assistance

21,503

 

Transportation and Warehousing

13,679

 

Educational Services

665

 

All Other Industries

19,218

 

Total Other Industries

230,335

 

 

 

Consumer (residential, home equity and other)

52,198

 

Grand Total

$

583,780

 

 

Contacts

Chris Oddleifson
President and Chief Executive Officer
(781) 982-6660

Mark J. Ruggiero
Chief Financial Officer and
Chief Accounting Officer
(781) 982-6281

Contacts

Chris Oddleifson
President and Chief Executive Officer
(781) 982-6660

Mark J. Ruggiero
Chief Financial Officer and
Chief Accounting Officer
(781) 982-6281