Independent Bank Corp. Reports Fourth Quarter Net Income of $34.6 Million

Full year performance demonstrates solid fundamentals to help counter Coronavirus impact

ROCKLAND, Mass.--()--Independent Bank Corp. (Nasdaq Global Select Market: INDB), parent of Rockland Trust Company, today announced 2020 fourth quarter net income of $34.6 million, or $1.05 per diluted share, compared to net income of $34.9 million, or $1.06 per diluted share, reported for the third quarter of 2020. Fourth quarter results included $5.2 million of pretax cost related to the pending closure of two branches and the sale of non-strategic investments. Full year 2020 net income was $121.2 million, or $3.64 on a diluted per share basis, a decrease of $44.0 million, or 26.6%, as compared to the prior year. On an operating basis, full year 2020 net income was $121.7 million, or $3.66 on a diluted per share basis, which excluded a loss on terminated hedges of $684,000 recognized during the third quarter, and represents a decrease of $63.0 million, or 34.1%, as compared to 2019, which excluded certain merger and acquisition expenses as well as a gain on sale of loans. Decreases in the full year 2020 results were primarily driven by the negative impact of the Coronavirus ("COVID-19") pandemic, which resulted in elevated provision for credit losses as compared to the prior year, as well as a lower interest-rate environment.

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 core fundamentals served us well as we encountered the unprecedented turbulence and uncertainty brought on by the COVID-19 pandemic and our 2020 results reflect on the strength of our fundamentals. We are confident we are well positioned to continue to successfully navigate forward as we enter 2021,” said Christopher Oddleifson, the Chief Executive Officer of Independent Bank Corp. and Rockland Trust Company. “Throughout 2020 as we faced the many challenges of the COVID-19 pandemic, we demonstrated an unwavering commitment to one another, our customers and our communities. I want to extend my sincere thanks my colleagues for the results we achieved in 2020. Each and every day our commitment to one another, our customers and our communities leads to a shared sense of purpose at the Bank Where Each Relationship Matters® and inspires us to find meaning in the work we do. This in turn leads to remarkable discretionary effort, which it turn positions us for continuing success in 2021 and beyond.”

BALANCE SHEET

Total assets of $13.2 billion at December 31, 2020 increased by $30.6 million, or 0.2%, from the prior quarter, and by $1.8 billion, or 15.9%, as compared to the year ago period. Total asset growth experienced during 2020 is primarily attributable to increases in interest-earning cash balances resulting from strong deposit growth, along with net loan growth for the year, supported primarily by the Company's participation in the Small Business Administration's Paycheck Protection Program ("PPP").

Total loans at December 31, 2020 decreased slightly by $12.3 million, or 0.1% (0.5% annualized), when compared to the prior quarter. Despite strong origination volumes, overall portfolio growth continues to be constrained by ongoing paydowns and re-financings primarily attributable to the low interest-rate environment. Increases during the fourth quarter in most commercial loans categories totaled $77.3 million, or 1.1% (4.4% annualized), were offset by decreases in the consumer portfolio of $88.4 million, or 3.60% (14.3% annualized). Growth across commercial categories, with the exception of construction, reflects strong closing activity diversified across a number of industries and property types. Within the consumer portfolios, the low interest-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. Similarly, on the home equity side, despite strong closing activity, loan growth continues to be challenged by attrition.

Deposit balances of $11.0 billion at December 31, 2020 increased by $141.9 million, or 1.3%, (5.2% annualized), from the prior quarter. With customer behavior continuing to foster excess liquidity positions across the industry, the majority of the fourth quarter deposit growth was fueled by increases on existing customer accounts, combined with another strong quarter of new customer account generation. As time deposits continued to run off, core deposits rose to 89.6% of total deposits at December 31, 2020, which, combined with rate reductions across all products, has led to a total cost of deposits for the fourth quarter of 0.14%, representing a reduction of six basis points when compared to the prior quarter.

The securities portfolio increased by $55.5 million, or 5.0%, when compared to the prior quarter, reflecting $174.6 million of purchases offset by paydowns, called securities, and maturities.

Total borrowings decreased $114.7 million, or 38.8% when compared to the prior quarter. The decrease primarily reflects the decision to redeploy excess liquidity to pay down $100.0 million of Federal Home Loan Bank ("FHLB") borrowings early in the fourth quarter. These borrowings had been hedged, and the Company incurred a $684,000 loss during the third quarter of 2020 when it decided to exit its $100 million hedge against these borrowings.

Stockholders' equity at December 31, 2020 increased slightly by 0.8% (3.1% annualized), as compared to the prior quarter. Despite the repurchase of 1.5 million shares totaling $95.1 million that was executed over the first half of 2020, stockholders' equity remained consistent with the year ago period, reflecting strong earnings retention and an increase in accumulated other comprehensive income of $22.5 million. Book value per share increased by $0.38, or 0.7%, to $51.65 during the fourth quarter as compared to the prior quarter. The Company's ratio of common equity to assets of 12.89% increased by six basis points from the prior quarter and decreased by 210 basis points from the year ago period. The Company's tangible book value per share at December 31, 2020 rose by $0.42, or 1.2%, from the prior quarter to $35.59, representing an increase of 4.3% from the year ago period. The Company's ratio of tangible common equity to tangible assets of 9.26% at December 31, 2020 is nine basis points higher than the prior quarter and 154 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 fourth quarter increased to $91.4 million compared to $90.9 million for the prior quarter, reflective of nonaccrual interest recoveries, slightly higher average earning asset levels, and a decline in the amount of loans placed on nonaccrual during the fourth quarter. The 2020 fourth quarter net interest margin of 3.10% represents a reduction of three basis points from the prior quarter. The table below illustrates the changes within the net interest margin for the fourth quarter:

Net interest margin as of September 30, 2020

 

3.13

 

%

Loan yields, excluding nonaccrual interest impact

 

(0.06

)

%

Nonaccrual loans interest

 

0.07

 

%

Excess liquidity (cash) levels

 

(0.05

)

%

PPP loan impact

 

0.02

 

%

Loan purchase accounting (fair value mark amortization/accretion)

 

(0.06

)

%

Decreased cost of funds

 

0.06

 

%

Other

 

(0.01

)

%

Net interest margin as of December 31, 2020

 

3.10

 

%

Please refer to Appendix C for additional details regarding the net interest margin, including a quarter-to-date reconciliation of adjusted core margin to GAAP net interest margin.

NONINTEREST INCOME

Noninterest income of $27.5 million for the fourth quarter of 2020 was $1.9 million, or 6.4%, lower than the prior quarter. Significant changes in noninterest income for the fourth quarter compared to the prior quarter included the following:

  • Deposit account fees increased by $466,000, or 13.6%, primarily driven by an increase in overdraft fees.
  • Interchange and ATM fees decreased by $364,000, or 12.0%, due primarily to a seasonal decline in debit card usage along with higher annual debit card branding incentives that occurred in the third quarter of 2020.
  • Investment management income increased by $165,000, or 2.2%, due primarily to an increase in market valuation. Assets under administration at December 31, 2020 increased 9.0% to $4.9 billion from the prior quarter.
  • Mortgage banking income decreased by $2.3 million, or 30.2%, despite continued strong origination volumes due primarily to narrower spreads in secondary market pricing combined with a higher percentage of closing volume retained in the portfolio.
  • The Company recognized a gain on life insurance benefits of $352,000 during the fourth quarter of 2020 with no such gain recorded during the prior quarter.
  • Loan level derivative income decreased by $1.3 million, or 53.6%, to $1.1 million during the fourth quarter of 2020, due primarily to decreased customer demand.
  • Other noninterest income increased by $1.0 million, or 26.1%, primarily attributable to unrealized gains on equity securities, IRS Code Section 1031 exchange fees, discounted purchases of Massachusetts historical tax credits, as well as capital gain distributions on equity securities.

NONINTEREST EXPENSE

Noninterest expense of $73.7 million for the fourth quarter of 2020 was $7.1 million, or 10.6% higher than 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 $1.0 million, or 2.7%, mainly due to increases in incentive programs and commissions.
  • During the fourth quarter, the Company recorded an impairment charge of $4.2 million reflecting accelerated lease termination costs and the write-off of leasehold improvements related to two branch closure decisions made during the quarter.
  • 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. There were no such charges during the fourth quarter.
  • During the fourth quarter of 2020, the Company recognized a loss of $1.0 million on the sale of certain Small Business Investment Company ("SBIC") investment holdings that were acquired in the Blue Hills Bancorp, Inc. merger in 2019. No such losses were incurred during the prior quarter.
  • Other noninterest expense increased by $1.7 million, or 10.5%, primarily due to increases in consultant fees, software maintenance fees, pension expense adjustments, and other miscellaneous expenses

The Company generated a return on average assets and a return on average common equity of 1.04% and 8.10%, respectively, for the fourth quarter of 2020, as compared to 1.07% and 8.21%, respectively, for the prior quarter.

ASSET QUALITY

During the fourth quarter, the Company recorded total net charge-offs of $2.2 million, or 0.09% of average loans on an annualized basis. In addition, nonperforming loans decreased to $66.9 million, or 0.71% of total loans at December 31, 2020 as compared to $98.0 million, or 1.04% of total loans at September 30, 2020. The decrease in nonperforming loans was primarily due to the successful resolution of two large nonperforming commercial relationships during the quarter, and included approximately $900,000 of interest recoveries on previously deferred interest.

As a result of the COVID-19 pandemic, many loans have had terms modified. Total loans subject to deferral decreased by $410.1 million for the fourth quarter, to $173.6 million, or 1.8% of total loans, at December 31, 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 0.23%, representing a decrease of eight 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 the COVID-19 pandemic.

Reflecting the improvements in asset quality noted above, along with no significant changes to the Company's outlook with respect to general future economic conditions, the Company recorded no provision expense during the fourth quarter, as compared to $7.5 million provision expense recorded in the prior quarter. The allowance for credit losses on loans was $113.4 million at December 31, 2020, or 1.21% of total loans, as compared to $115.6 million at September 30, 2020, or 1.23% of total loans. Please refer to Appendix E for information regarding loan exposures within industries deemed highly impacted by the COVID-19 pandemic.

CONFERENCE CALL INFORMATION

Christopher Oddleifson, Chief Executive Officer, Robert Cozzone, Chief Operating Officer, Mark Ruggiero, Chief Financial Officer, and Gerard Nadeau, President and Chief Commercial Banking Officer will host a conference call to discuss fourth quarter earnings at 10:00 a.m. Eastern Time on Friday, January 22, 2021. Internet access to the call is available on the Company’s website at www.RocklandTrust.com or via telephonic access by dial-in at 1-888-336-7153 reference: INDB. A replay of the call will be available by calling 1-877-344-7529, Replay Conference Number: 10149598 and will be available through January 29, 2021. Additionally, a webcast replay will be available until January 22, 2022.

ABOUT INDEPENDENT BANK CORP.

Independent Bank Corp. (NASDAQ Global Select Market: INDB) is the holding company for Rockland Trust Company, a full-service commercial bank headquartered in Massachusetts. Rockland Trust was named to The Boston Globe's "Top Places to Work" 2020 list, an honor earned for the 12th consecutive year. In 2020, Rockland Trust was ranked the #1 Bank in Massachusetts according to Forbes World's Best Banks list. 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, 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. 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, Cape Cod and Islands, Worcester County, and Rhode Island. Rockland Trust also offers a full suite of mobile, online, and telephone banking services. Rockland Trust is an FDIC member and an Equal Housing Lender. To find out why Rockland Trust is the bank "Where Each Relationship Matters®," please visit RocklandTrust.com.

This press release contains certain “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995 with respect to the financial condition, results of operations and business of the Company. These statements may be identified by such forward-looking terminology as “expect,” “achieve,” “plan,” “believe,” “future,” “positioned,” “continued,” “will,” “would,” “potential,” or similar statements or variations of such terms. Actual results may differ from those contemplated by these forward-looking statements.

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

  • further weakening in the United States economy in general and the regional and local economies within the New England region and the Company’s market area, including future weakening caused by the COVID-19 pandemic;
  • the length and extent of economic contraction as a result of the COVID-19 pandemic;
  • unanticipated loan delinquencies, loss of collateral, decreased service revenues, and other potential negative effects on our business caused by severe weather, pandemics or other external events;
  • adverse changes or volatility in the local real estate market;
  • adverse changes in asset quality and any unanticipated credit deterioration in our loan portfolio including those related to one or more large commercial relationships;
  • acquisitions may not produce results at levels or within time frames originally anticipated and may result in unforeseen integration issues or impairment of goodwill and/or other intangibles;
  • additional regulatory oversight and related compliance costs, including the additional costs associated with the Company's increase in assets to over $10 billion;
  • changes in trade, monetary and fiscal policies and laws, including interest rate policies of the Board of Governors of the Federal Reserve System;
  • higher than expected tax expense, resulting from failure to comply with general tax laws, 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.

Category: Earnings Releases

INDEPENDENT BANK CORP. FINANCIAL SUMMARY

 

 

 

 

 

 

CONSOLIDATED BALANCE SHEETS

 

 

 

 

(Unaudited, dollars in thousands)

 

 

 

 

 

 

% Change

 

% Change

 

December 31
2020

 

September 30
2020

 

December 31
2019

 

Dec 2020 vs.

 

Dec 2020 vs.

 

 

 

 

Sept 2020

 

Dec 2019

Assets

 

 

 

 

 

 

 

 

 

Cash and due from banks

$

169,460

 

 

$

125,103

 

 

$

114,686

 

 

35.46

 

%

 

47.76

 

%

Interest-earning deposits with banks

1,127,176

 

 

1,142,934

 

 

36,288

 

 

(1.38

)

%

 

nm

Securities

 

 

 

 

 

 

 

 

 

Trading

2,838

 

 

2,612

 

 

2,179

 

 

8.65

 

%

 

30.24

 

%

Equities

22,107

 

 

21,119

 

 

21,261

 

 

4.68

 

%

 

3.98

 

%

Available for sale

412,860

 

 

423,478

 

 

426,424

 

 

(2.51

)

%

 

(3.18

)

%

Held to maturity

724,512

 

 

659,573

 

 

740,806

 

 

9.85

 

%

 

(2.20

)

%

Total securities

1,162,317

 

 

1,106,782

 

 

1,190,670

 

 

5.02

 

%

 

(2.38

)

%

Loans held for sale

58,104

 

 

54,713

 

 

33,307

 

 

6.20

 

%

 

74.45

 

%

Loans

 

 

 

 

 

 

 

 

 

Commercial and industrial

2,103,152

 

 

2,062,345

 

 

1,395,036

 

 

1.98

 

%

 

50.76

 

%

Commercial real estate

4,173,927

 

 

4,125,464

 

 

4,002,359

 

 

1.17

 

%

 

4.29

 

%

Commercial construction

553,929

 

 

573,334

 

 

547,293

 

 

(3.38

)

%

 

1.21

 

%

Small business

175,023

 

 

167,632

 

 

174,497

 

 

4.41

 

%

 

0.30

 

%

Total commercial

7,006,031

 

 

6,928,775

 

 

6,119,185

 

 

1.12

 

%

 

14.49

 

%

Residential real estate

1,296,183

 

 

1,352,305

 

 

1,590,569

 

 

(4.15

)

%

 

(18.51

)

%

Home equity - first position

633,142

 

 

643,187

 

 

649,255

 

 

(1.56

)

%

 

(2.48

)

%

Home equity - subordinate positions

435,648

 

 

457,867

 

 

484,543

 

 

(4.85

)

%

 

(10.09

)

%

Total consumer real estate

2,364,973

 

 

2,453,359

 

 

2,724,367

 

 

(3.60

)

%

 

(13.19

)

%

Other consumer

21,862

 

 

23,059

 

 

30,087

 

 

(5.19

)

%

 

(27.34

)

%

Total loans

9,392,866

 

 

9,405,193

 

 

8,873,639

 

 

(0.13

)

%

 

5.85

 

%

Less: allowance for credit losses

(113,392

)

 

(115,625

)

 

(67,740

)

 

(1.93

)

%

 

67.39

 

%

Net loans

9,279,474

 

 

9,289,568

 

 

8,805,899

 

 

(0.11

)

%

 

5.38

 

%

Federal Home Loan Bank stock

10,250

 

 

15,090

 

 

14,424

 

 

(32.07

)

%

 

(28.94

)

%

Bank premises and equipment, net

116,393

 

 

121,816

 

 

123,674

 

 

(4.45

)

%

 

(5.89

)

%

Goodwill

506,206

 

 

506,206

 

 

506,206

 

 

 

%

 

 

%

Other intangible assets

23,107

 

 

24,543

 

 

29,286

 

 

(5.85

)

%

 

(21.10

)

%

Cash surrender value of life insurance policies

200,525

 

 

199,453

 

 

197,372

 

 

0.54

 

%

 

1.60

 

%

Other assets

551,289

 

 

587,457

 

 

343,353

 

 

(6.16

)

%

 

60.56

 

%

Total assets

$

13,204,301

 

 

$

13,173,665

 

 

$

11,395,165

 

 

0.23

 

%

 

15.88

 

%

Liabilities and Stockholders' Equity

 

 

 

 

 

 

 

 

 

Deposits

 

 

 

 

 

 

 

 

 

Noninterest-bearing demand deposits

$

3,762,306

 

 

$

3,715,528

 

 

$

2,662,591

 

 

1.26

 

%

 

41.30

 

%

Savings and interest checking accounts

4,047,332

 

 

3,912,703

 

 

3,232,909

 

 

3.44

 

%

 

25.19

 

%

Money market

2,232,903

 

 

2,164,436

 

 

1,856,552

 

 

3.16

 

%

 

20.27

 

%

Time certificates of deposit

950,629

 

 

1,058,641

 

 

1,395,315

 

 

(10.20

)

%

 

(31.87

)

%

Total deposits

10,993,170

 

 

10,851,308

 

 

9,147,367

 

 

1.31

 

%

 

20.18

 

%

Borrowings

 

 

 

 

 

 

 

 

 

Federal Home Loan Bank borrowings

35,740

 

 

145,765

 

 

115,748

 

 

(75.48

)

%

 

(69.12

)

%

Long-term borrowings, net

32,773

 

 

37,447

 

 

74,906

 

 

(12.48

)

%

 

(56.25

)

%

Junior subordinated debentures, net

62,851

 

 

62,850

 

 

62,848

 

 

 

%

 

 

%

Subordinated debentures, net

49,696

 

 

49,672

 

 

49,601

 

 

0.05

 

%

 

0.19

 

%

Total borrowings

181,060

 

 

295,734

 

 

303,103

 

 

(38.78

)

%

 

(40.26

)

%

Total deposits and borrowings

11,174,230

 

 

11,147,042

 

 

9,450,470

 

 

0.24

 

%

 

18.24

 

%

Other liabilities

327,386

 

 

336,899

 

 

236,552

 

 

(2.82

)

%

 

38.40

 

%

Total liabilities

11,501,616

 

 

11,483,941

 

 

9,687,022

 

 

0.15

 

%

 

18.73

 

%

Stockholders' equity

 

 

 

 

 

 

 

 

 

Common stock

328

 

 

328

 

 

342

 

 

 

%

 

(4.09

)

%

Additional paid in capital

945,638

 

 

944,218

 

 

1,035,450

 

 

0.15

 

%

 

(8.67

)

%

Retained earnings

716,024

 

 

696,546

 

 

654,182

 

 

2.80

 

%

 

9.45

 

%

Accumulated other comprehensive income, net of tax

40,695

 

 

48,632

 

 

18,169

 

 

(16.32

)

%

 

123.98

 

%

Total stockholders' equity

1,702,685

 

 

1,689,724

 

 

1,708,143

 

 

0.77

 

%

 

(0.32

)

%

Total liabilities and stockholders' equity

$

13,204,301

 

 

$

13,173,665

 

 

$

11,395,165

 

 

0.23

 

%

 

15.88

 

%

nm = not meaningful

CONSOLIDATED STATEMENTS OF INCOME

 

 

 

 

 

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

 

 

 

 

 

 

Three Months Ended

 

 

 

 

 

 

 

 

 

 

 

% Change

 

% Change

 

December 31
2020

 

September 30
2020

 

December 31
2019

 

Dec 2020 vs.

 

Dec 2020 vs.

 

 

 

 

Sept 2020

 

Dec 2019

Interest income

 

 

 

 

 

 

 

 

 

Interest on federal funds sold and short-term investments

$

301

 

 

$

254

 

 

$

454

 

 

18.50

 

%

 

(33.70

)

%

Interest and dividends on securities

7,135

 

 

7,227

 

 

8,161

 

 

(1.27

)

%

 

(12.57

)

%

Interest and fees on loans

89,068

 

 

90,112

 

 

104,724

 

 

(1.16

)

%

 

(14.95

)

%

Interest on loans held for sale

301

 

 

326

 

 

364

 

 

(7.67

)

%

 

(17.31

)

%

Total interest income

96,805

 

 

97,919

 

 

113,703

 

 

(1.14

)

%

 

(14.86

)

%

Interest expense

 

 

 

 

 

 

 

 

 

Interest on deposits

3,982

 

 

5,432

 

 

11,134

 

 

(26.69

)

%

 

(64.24

)

%

Interest on borrowings

1,380

 

 

1,604

 

 

2,576

 

 

(13.97

)

%

 

(46.43

)

%

Total interest expense

5,362

 

 

7,036

 

 

13,710

 

 

(23.79

)

%

 

(60.89

)

%

Net interest income

91,443

 

 

90,883

 

 

99,993

 

 

0.62

 

%

 

(8.55

)

%

Provision for credit losses

 

 

7,500

 

 

4,000

 

 

(100.00

)

%

 

(100.00

)

%

Net interest income after provision for credit losses

91,443

 

 

83,383

 

 

95,993

 

 

9.67

 

%

 

(4.74

)

%

Noninterest income

 

 

 

 

 

 

 

 

 

Deposit account fees

3,894

 

 

3,428

 

 

5,255

 

 

13.59

 

%

 

(25.90

)

%

Interchange and ATM fees

2,680

 

 

3,044

 

 

5,705

 

 

(11.96

)

%

 

(53.02

)

%

Investment management

7,736

 

 

7,571

 

 

7,630

 

 

2.18

 

%

 

1.39

 

%

Mortgage banking income

5,378

 

 

7,704

 

 

3,270

 

 

(30.19

)

%

 

64.46

 

%

Increase in cash surrender value of life insurance policies

1,460

 

 

1,314

 

 

1,441

 

 

11.11

 

%

 

1.32

 

%

Gain on life insurance benefits

352

 

 

 

 

 

 

100.00

 

%

 

100.00

 

%

Loan level derivative income

1,140

 

 

2,457

 

 

2,166

 

 

(53.60

)

%

 

(47.37

)

%

Other noninterest income

4,828

 

 

3,829

 

 

7,830

 

 

26.09

 

%

 

(38.34

)

%

Total noninterest income

27,468

 

 

29,347

 

 

33,297

 

 

(6.40

)

%

 

(17.51

)

%

Noninterest expenses

 

 

 

 

 

 

 

 

 

Salaries and employee benefits

39,433

 

 

38,409

 

 

37,764

 

 

2.67

 

%

 

4.42

 

%

Occupancy and equipment expenses

9,187

 

 

9,273

 

 

9,098

 

 

(0.93

)

%

 

0.98

 

%

Data processing and facilities management

1,581

 

 

1,567

 

 

1,633

 

 

0.89

 

%

 

(3.18

)

%

FDIC assessment

985

 

 

1,034

 

 

 

 

(4.74

)

%

 

100.00

 

%

Lease impairment

4,163

 

 

 

 

 

 

100.00

 

%

 

100.00

 

%

Loss on sale of other equity investments

1,033

 

 

 

 

 

 

100.00

 

%

 

100.00

 

%

Loss on termination of derivatives

 

 

684

 

 

 

 

(100.00

)

%

 

n/a

 

Other noninterest expenses

17,345

 

 

15,691

 

 

18,950

 

 

10.54

 

%

 

(8.47

)

%

Total noninterest expenses

73,727

 

 

66,658

 

 

67,445

 

 

10.60

 

%

 

9.31

 

%

Income before income taxes

45,184

 

 

46,072

 

 

61,845

 

 

(1.93

)

%

 

(26.94

)

%

Provision for income taxes

10,543

 

 

11,199

 

 

14,368

 

 

(5.86

)

%

 

(26.62

)

%

Net Income

$

34,641

 

 

$

34,873

 

 

$

47,477

 

 

(0.67

)

%

 

(27.04

)

%

 

 

 

 

 

 

 

 

 

 

Weighted average common shares (basic)

32,964,090

 

 

32,951,918

 

 

34,374,953

 

 

 

 

 

Common share equivalents

26,348

 

 

24,758

 

 

46,245

 

 

 

 

 

Weighted average common shares (diluted)

32,990,438

 

 

32,976,676

 

 

34,421,198

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic earnings per share

$

1.05

 

 

$

1.06

 

 

$

1.38

 

 

(0.94

)

%

 

(23.91

)

%

Diluted earnings per share

$

1.05

 

 

$

1.06

 

 

$

1.38

 

 

(0.94

)

%

 

(23.91

)

%

 

 

 

 

 

 

 

 

 

 

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

 

 

 

 

 

 

Net income

$

34,641

 

 

$

34,873

 

 

$

47,477

 

 

 

 

 

Noninterest expense components

 

 

 

 

 

 

 

 

 

Add - loss on termination of derivatives

 

 

684

 

 

 

 

 

 

 

Noncore increases to income before taxes

 

 

684

 

 

 

 

 

 

 

Net tax benefit associated with noncore items (1)

 

 

(192

)

 

 

 

 

 

 

Total tax impact

 

 

(192

)

 

 

 

 

 

 

Noncore increases to net income

 

 

492

 

 

 

 

 

 

 

Operating net income

$

34,641

 

 

$

35,365

 

 

$

47,477

 

 

(2.05

)

%

 

(27.04

)

%

 

 

 

 

 

 

 

 

 

 

Diluted earnings per share, on an operating basis

$

1.05

 

 

$

1.07

 

 

$

1.38

 

 

(1.87

)

%

 

(23.91

)

%

 

 

 

 

 

 

 

 

 

 

(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)

3.10

%

 

3.13

%

 

3.90

%

 

 

 

 

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

1.04

%

 

1.07

%

 

1.64

%

 

 

 

 

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

1.04

%

 

1.08

%

 

1.64

%

 

 

 

 

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

8.10

%

 

8.21

%

 

11.06

%

 

 

 

 

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

8.10

%

 

8.32

%

 

11.06

%

 

 

 

 

CONSOLIDATED STATEMENTS OF INCOME

 

 

 

 

 

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

 

 

 

 

 

 

Years Ended

 

 

 

 

 

 

 

 

% Change

 

 

December 31
2020

 

December 31
2019

 

Dec 2020 vs.

 

 

 

 

Dec 2019

 

 

 

 

 

 

 

Interest income

 

 

 

 

 

 

Interest on federal funds sold and short-term investments

 

$

847

 

 

 

$

2,207

 

 

 

(61.62

)

%

Interest and dividends on securities

 

30,168

 

 

 

32,456

 

 

 

(7.05

)

%

Interest and fees on loans

 

369,836

 

 

 

411,460

 

 

 

(10.12

)

%

Interest on loans held for sale

 

1,218

 

 

 

891

 

 

 

36.70

 

%

Total interest income

 

402,069

 

 

 

447,014

 

 

 

(10.05

)

%

Interest expense

 

 

 

 

 

 

Interest on deposits

 

27,333

 

 

 

41,186

 

 

 

(33.64

)

%

Interest on borrowings

 

7,008

 

 

 

12,693

 

 

 

(44.79

)

%

Total interest expense

 

34,341

 

 

 

53,879

 

 

 

(36.26

)

%

Net interest income

 

367,728

 

 

 

393,135

 

 

 

(6.46

)

%

Provision for credit losses

 

52,500

 

 

 

6,000

 

 

 

nm

Net interest income after provision for credit losses

 

315,228

 

 

 

387,135

 

 

 

(18.57

)

%

Noninterest income

 

 

 

 

 

 

Deposit account fees

 

15,121

 

 

 

20,040

 

 

 

(24.55

)

%

Interchange and ATM fees

 

15,834

 

 

 

22,152

 

 

 

(28.52

)

%

Investment management

 

29,432

 

 

 

28,719

 

 

 

2.48

 

%

Mortgage banking income

 

18,948

 

 

 

11,454

 

 

 

65.43

 

%

Increase in cash surrender value of life insurance policies

 

5,362

 

 

 

5,013

 

 

 

6.96

 

%

Gain on life insurance benefits

 

1,044

 

 

 

434

 

 

 

140.55

 

%

Loan level derivative income

 

10,058

 

 

 

6,478

 

 

 

55.26

 

%

Other noninterest income

 

15,641

 

 

 

21,004

 

 

 

(25.53

)

%

Total noninterest income

 

111,440

 

 

 

115,294

 

 

 

(3.34

)

%

Noninterest expenses

 

 

 

 

 

 

Salaries and employee benefits

 

152,460

 

 

 

149,165

 

 

 

2.21

 

%

Occupancy and equipment expenses

 

37,050

 

 

 

33,207

 

 

 

11.57

 

%

Data processing and facilities management

 

6,265

 

 

 

6,516

 

 

 

(3.85

)

%

FDIC assessment

 

2,522

 

 

 

1,394

 

 

 

80.92

 

%

Lease impairment

 

4,163

 

 

 

 

 

 

100.00

 

%

Loss on sale of other equity investments

 

1,033

 

 

 

 

 

 

100.00

 

%

Loss on termination of derivatives

 

684

 

 

 

 

 

 

100.00

 

%

Merger and acquisition expense

 

 

 

 

26,433

 

 

 

(100.00

)

%

Other noninterest expenses

 

69,655

 

 

 

67,606

 

 

 

3.03

 

%

Total noninterest expenses

 

273,832

 

 

 

284,321

 

 

 

(3.69

)

%

Income before income taxes

 

152,836

 

 

 

218,108

 

 

 

(29.93

)

%

Provision for income taxes

 

31,669

 

 

 

52,933

 

 

 

(40.17

)

%

Net Income

 

$

121,167

 

 

 

$

165,175

 

 

 

(26.64

)

%

 

 

 

 

 

 

 

Weighted average common shares (basic)

 

33,259,643

 

 

 

32,810,433

 

 

 

 

Common share equivalents

 

25,646

 

 

 

45,801

 

 

 

 

Weighted average common shares (diluted)

 

33,285,289

 

 

 

32,856,234

 

 

 

 

 

 

 

 

 

 

 

Basic earnings per share

 

$

3.64

 

 

 

$

5.03

 

 

 

(27.63

)

%

Diluted earnings per share

 

$

3.64

 

 

 

$

5.03

 

 

 

(27.63

)

%

 

 

 

 

 

 

 

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

 

 

 

 

 

 

Net Income

 

$

121,167

 

 

 

$

165,175

 

 

 

 

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

 

$

121,659

 

 

 

$

184,621

 

 

 

(34.10

)

%

 

 

 

 

 

 

 

Diluted earnings per share, on an operating basis

 

$

3.66

 

 

 

$

5.62

 

 

 

(34.88

)

%

 

 

 

 

 

 

 

(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)

 

3.29

 

%

 

4.04

 

%

 

 

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

 

0.96

 

%

 

1.52

 

%

 

 

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

 

0.97

 

%

 

1.70

 

%

 

 

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

 

7.13

 

%

 

10.85

 

%

 

 

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

 

7.16

 

%

 

12.13

 

%

 

 

ASSET QUALITY

 

 

(Unaudited, dollars in thousands)

 

Nonperforming Assets At

 

 

December 31
2020

 

September 30
2020

 

December 31
2019

Nonperforming loans

 

 

 

 

 

 

Commercial & industrial loans

 

$

34,729

 

 

 

$

36,851

 

 

 

$

22,574

 

 

Commercial real estate loans

 

10,195

 

 

 

38,164

 

 

 

3,234

 

 

Small business loans

 

825

 

 

 

542

 

 

 

311

 

 

Residential real estate loans

 

15,528

 

 

 

16,229

 

 

 

15,012

 

 

Home equity

 

5,427

 

 

 

6,159

 

 

 

6,835

 

 

Other consumer

 

157

 

 

 

80

 

 

 

83

 

 

Total nonperforming loans

 

66,861

 

 

 

98,025

 

 

 

48,049

 

 

Other real estate owned

 

 

 

 

 

 

 

 

 

Total nonperforming assets

 

$

66,861

 

 

 

$

98,025

 

 

 

$

48,049

 

 

 

 

 

 

 

 

 

Nonperforming loans/gross loans

 

0.71

 

%

 

1.04

 

%

 

0.54

 

%

Nonperforming assets/total assets

 

0.51

 

%

 

0.74

 

%

 

0.42

 

%

Allowance for credit losses/nonperforming loans

 

169.59

 

%

 

117.95

 

%

 

140.98

 

%

Allowance for credit losses/total loans

 

1.21

 

%

 

1.23

 

%

 

0.76

 

%

Delinquent loans/total loans

 

0.23

 

%

 

0.31

 

%

 

0.29

 

%

 

 

 

 

 

 

 

 

 

Nonperforming Assets Reconciliation for the Three Months Ended

 

 

December 31
2020

 

September 30
2020

 

December 31
2019

 

 

 

 

 

 

 

Nonperforming assets beginning balance

 

$

98,025

 

 

 

$

48,814

 

 

 

$

48,202

 

 

New to nonperforming

 

22,052

 

 

 

60,850

 

 

 

13,457

 

 

Loans charged-off

 

(2,698

)

 

 

(4,304

)

 

 

(3,467

)

 

Loans paid-off

 

(45,327

)

 

 

(5,050

)

 

 

(7,222

)

 

Loans restored to performing status

 

(5,373

)

 

 

(2,229

)

 

 

(391

)

 

Sale of other real estate owned

 

 

 

 

 

 

 

(2,500

)

 

Other

 

182

 

 

 

(56

)

 

 

(30

)

 

Nonperforming assets ending balance

 

$

66,861

 

 

 

$

98,025

 

 

 

$

48,049

 

 

`

 

 

Net Charge-Offs (Recoveries)

 

 

Three Months Ended

 

Years Ended

 

 

December 31
2020

 

September 30
2020

 

December 31
2019

 

December 31
2020

 

December 31
2019

Net charge-offs (recoveries)

 

 

 

 

 

 

 

 

 

 

Commercial and industrial loans

 

$

1,882

 

 

 

$

184

 

 

 

$

240

 

 

 

$

2,020

 

 

 

$

(887

)

 

Commercial real estate loans

 

 

 

 

3,876

 

 

 

2,532

 

 

 

3,876

 

 

 

2,462

 

 

Small business loans

 

161

 

 

 

47

 

 

 

176

 

 

 

347

 

 

 

387

 

 

Residential real estate loans

 

105

 

 

 

(1

)

 

 

(1

)

 

 

103

 

 

 

(142

)

 

Home equity

 

(36

)

 

 

(21

)

 

 

(12

)

 

 

(68

)

 

 

(78

)

 

Other consumer

 

121

 

 

 

(34

)

 

 

267

 

 

 

590

 

 

 

811

 

 

Total net charge-offs

 

$

2,233

 

 

 

$

4,051

 

 

 

$

3,202

 

 

 

$

6,868

 

 

 

$

2,553

 

 

 

 

 

 

 

 

 

 

 

 

 

Net charge-offs to average loans (annualized)

 

0.09

 

%

 

0.17

 

%

 

0.14

 

%

 

0.07

 

%

 

0.03

 

%

 

 

Troubled Debt Restructurings At

 

 

December 31
2020

 

September 30
2020

 

December 31
2019

Troubled debt restructurings on accrual status

 

$

16,983

 

 

$

17,521

 

 

$

19,599

 

Troubled debt restructurings on nonaccrual status

 

22,209

 

 

23,810

 

 

24,766

 

Total troubled debt restructurings

 

$

39,192

 

 

$

41,331

 

 

$

44,365

 

 

 

 

 

 

 

 

BALANCE SHEET AND CAPITAL RATIOS

 

 

 

 

 

 

 

 

December 31
2020

 

September 30
2020

 

December 31
2019

Gross loans/total deposits

 

85.44

%

 

86.67

%

 

97.01

%

Common equity tier 1 capital ratio (1)

 

12.65

%

 

12.41

%

 

12.86

%

Tier 1 leverage capital ratio (1)

 

9.56

%

 

9.52

%

 

11.28

%

Common equity to assets ratio GAAP

 

12.89

%

 

12.83

%

 

14.99

%

Tangible common equity to tangible assets ratio (2)

 

9.26

%

 

9.17

%

 

10.80

%

Book value per share GAAP

 

$

51.65

 

 

$

51.27

 

 

$

49.69

 

Tangible book value per share (2)

 

$

35.59

 

 

$

35.17

 

 

$

34.11

 

(1) Estimated number for December 31, 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

 

 

December 31, 2020

 

September 30, 2020

 

December 31, 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

 

$

1,190,965

 

 

$

301

 

 

0.10

%

 

$

997,921

 

 

$

254

 

 

0.10

%

 

$

99,173

 

 

$

454

 

 

1.82

%

Securities

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Securities - trading

 

2,660

 

 

 

 

%

 

2,607

 

 

 

 

%

 

2,041

 

 

 

 

%

Securities - taxable investments

 

1,122,055

 

 

7,127

 

 

2.53

%

 

1,139,843

 

 

7,218

 

 

2.52

%

 

1,177,084

 

 

8,150

 

 

2.75

%

Securities - nontaxable investments (1)

 

1,041

 

 

10

 

 

3.82

%

 

1,146

 

 

11

 

 

3.82

%

 

1,476

 

 

14

 

 

3.76

%

Total securities

 

$

1,125,756

 

 

$

7,137

 

 

2.52

%

 

$

1,143,596

 

 

$

7,229

 

 

2.51

%

 

$

1,180,601

 

 

$

8,164

 

 

2.74

%

Loans held for sale

 

48,604

 

 

301

 

 

2.46

%

 

50,709

 

 

326

 

 

2.56

%

 

41,127

 

 

364

 

 

3.51

%

Loans

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Commercial and industrial (1)

 

2,080,045

 

 

18,308

 

 

3.50

%

 

2,033,385

 

 

17,724

 

 

3.47

%

 

1,384,063

 

 

18,534

 

 

5.31

%

Commercial real estate (1)

 

4,130,945

 

 

41,213

 

 

3.97

%

 

4,086,594

 

 

41,578

 

 

4.05

%

 

3,994,496

 

 

48,673

 

 

4.83

%

Commercial construction

 

582,900

 

 

5,609

 

 

3.83

%

 

568,007

 

 

5,126

 

 

3.59

%

 

555,328

 

 

7,226

 

 

5.16

%

Small business

 

169,645

 

 

2,276

 

 

5.34

%

 

168,662

 

 

2,303

 

 

5.43

%

 

172,647

 

 

2,560

 

 

5.88

%

Total commercial

 

6,963,535

 

 

67,406

 

 

3.85

%

 

6,856,648

 

 

66,731

 

 

3.87

%

 

6,106,534

 

 

76,993

 

 

5.00

%

Residential real estate

 

1,322,016

 

 

12,020

 

 

3.62

%

 

1,387,055

 

 

13,436

 

 

3.85

%

 

1,607,939

 

 

15,024

 

 

3.71

%

Home equity

 

1,086,781

 

 

9,379

 

 

3.43

%

 

1,107,685

 

 

9,658

 

 

3.47

%

 

1,134,192

 

 

12,367

 

 

4.33

%

Total consumer real estate

 

2,408,797

 

 

21,399

 

 

3.53

%

 

2,494,740

 

 

23,094

 

 

3.68

%

 

2,742,131

 

 

27,391

 

 

3.96

%

Other consumer

 

23,860

 

 

468

 

 

7.80

%

 

24,134

 

 

515

 

 

8.49

%

 

28,407

 

 

593

 

 

8.28

%

Total loans

 

$

9,396,192

 

 

$

89,273

 

 

3.78

%

 

$

9,375,522

 

 

$

90,340

 

 

3.83

%

 

$

8,877,072

 

 

$

104,977

 

 

4.69

%

Total interest-earning assets

 

$

11,761,517

 

 

$

97,012

 

 

3.28

%

 

$

11,567,748

 

 

$

98,149

 

 

3.38

%

 

$

10,197,973

 

 

$

113,959

 

 

4.43

%

Cash and due from banks

 

136,602

 

 

 

 

 

 

124,482

 

 

 

 

 

 

120,758

 

 

 

 

 

Federal Home Loan Bank stock

 

10,475

 

 

 

 

 

 

15,090

 

 

 

 

 

 

13,113

 

 

 

 

 

Other assets

 

1,284,948

 

 

 

 

 

 

1,313,194

 

 

 

 

 

 

1,122,737

 

 

 

 

 

Total assets

 

$

13,193,542

 

 

 

 

 

 

$

13,020,514

 

 

 

 

 

 

$

11,454,581

 

 

 

 

 

Interest-bearing liabilities

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Deposits

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Savings and interest checking accounts

 

$

3,975,140

 

 

$

540

 

 

0.05

%

 

$

3,836,488

 

 

$

838

 

 

0.09

%

 

$

3,225,413

 

 

$

2,117

 

 

0.26

%

Money market

 

2,232,007

 

 

671

 

 

0.12

%

 

2,087,822

 

 

945

 

 

0.18

%

 

1,880,638

 

 

3,756

 

 

0.79

%

Time deposits

 

1,014,388

 

 

2,771

 

 

1.09

%

 

1,076,546

 

 

3,649

 

 

1.35

%

 

1,427,513

 

 

5,261

 

 

1.46

%

Total interest-bearing deposits

 

$

7,221,535

 

 

$

3,982

 

 

0.22

%

 

$

7,000,856

 

 

$

5,432

 

 

0.31

%

 

$

6,533,564

 

 

$

11,134

 

 

0.68

%

Borrowings

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Federal Home Loan Bank borrowings

 

36,297

 

 

195

 

 

2.14

%

 

145,766

 

 

408

 

 

1.11

%

 

74,094

 

 

410

 

 

2.20

%

Long-term borrowings

 

32,765

 

 

131

 

 

1.59

%

 

37,439

 

 

141

 

 

1.50

%

 

74,839

 

 

612

 

 

3.24

%

Junior subordinated debentures

 

62,850

 

 

436

 

 

2.76

%

 

62,850

 

 

438

 

 

2.77

%

 

62,848

 

 

497

 

 

3.14

%

Subordinated debentures

 

49,683

 

 

618

 

 

4.95

%

 

49,659

 

 

617

 

 

4.94

%

 

66,593

 

 

1,057

 

 

6.30

%

Total borrowings

 

$

181,595

 

 

$

1,380

 

 

3.02

%

 

$

295,714

 

 

$

1,604

 

 

2.16

%

 

$

278,374

 

 

$

2,576

 

 

3.67

%

Total interest-bearing liabilities

 

$

7,403,130

 

 

$

5,362

 

 

0.29

%

 

$

7,296,570

 

 

$

7,036

 

 

0.38

%

 

$

6,811,938

 

 

$

13,710

 

 

0.80

%

Noninterest-bearing demand deposits

 

3,770,580

 

 

 

 

 

 

3,700,902

 

 

 

 

 

 

2,712,829

 

 

 

 

 

Other liabilities

 

318,981

 

 

 

 

 

 

332,937

 

 

 

 

 

 

226,223

 

 

 

 

 

Total liabilities

 

$

11,492,691

 

 

 

 

 

 

$

11,330,409

 

 

 

 

 

 

$

9,750,990

 

 

 

 

 

Stockholders' equity

 

1,700,851

 

 

 

 

 

 

1,690,105

 

 

 

 

 

 

1,703,591

 

 

 

 

 

Total liabilities and stockholders' equity

 

$

13,193,542

 

 

 

 

 

 

$

13,020,514

 

 

 

 

 

 

$

11,454,581

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net interest income

 

 

 

$

91,650

 

 

 

 

 

 

$

91,113

 

 

 

 

 

 

$

100,249

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest rate spread (2)

 

 

 

 

 

2.99

%

 

 

 

 

 

3.00

%

 

 

 

 

 

3.63

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net interest margin (3)

 

 

 

 

 

3.10

%

 

 

 

 

 

3.13

%

 

 

 

 

 

3.90

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Supplemental Information

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total deposits, including demand deposits

 

$

10,992,115

 

 

$

3,982

 

 

 

 

$

10,701,758

 

 

$

5,432

 

 

 

 

$

9,246,393

 

 

$

11,134

 

 

 

Cost of total deposits

 

 

 

 

 

0.14

%

 

 

 

 

 

0.20

%

 

 

 

 

 

0.48

%

Total funding liabilities, including demand deposits

 

$

11,173,710

 

 

$

5,362

 

 

 

 

$

10,997,472

 

 

$

7,036

 

 

 

 

$

9,524,767

 

 

$

13,710

 

 

 

Cost of total funding liabilities

 

 

 

 

 

0.19

%

 

 

 

 

 

0.25

%

 

 

 

 

 

0.57

%

(1) The total amount of adjustment to present interest income and yield on a fully tax-equivalent basis is $207,000, $230,000, and $256,000 for the three months ended December 31, 2020, September 30, 2020, and December 31, 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.

 

 

Years Ended

 

 

December 31, 2020

 

December 31, 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

 

$

748,419

 

 

$

847

 

 

0.11

%

 

$

97,028

 

 

$

2,207

 

 

2.27

%

Securities

 

 

 

 

 

 

 

 

 

 

 

 

Securities - trading

 

2,481

 

 

 

 

%

 

1,876

 

 

 

 

%

Securities - taxable investments

 

1,164,439

 

 

30,133

 

 

2.59

%

 

1,176,992

 

 

32,405

 

 

2.75

%

Securities - nontaxable investments (1)

 

1,142

 

 

44

 

 

3.85

%

 

1,673

 

 

66

 

 

3.95

%

Total securities

 

$

1,168,062

 

 

$

30,177

 

 

2.58

%

 

$

1,180,541

 

 

$

32,471

 

 

2.75

%

Loans held for sale

 

44,521

 

 

1,218

 

 

2.74

%

 

40,858

 

 

891

 

 

2.18

%

Loans

 

 

 

 

 

 

 

 

 

 

 

 

Commercial and industrial (1)

 

1,858,951

 

 

70,335

 

 

3.78

%

 

1,321,798

 

 

74,208

 

 

5.61

%

Commercial real estate (1)

 

4,070,462

 

 

171,013

 

 

4.20

%

 

3,838,526

 

 

187,902

 

 

4.90

%

Commercial construction

 

561,431

 

 

22,950

 

 

4.09

%

 

478,865

 

 

27,263

 

 

5.69

%

Small business

 

171,839

 

 

9,529

 

 

5.55

%

 

169,381

 

 

10,280

 

 

6.07

%

Total commercial

 

6,662,683

 

 

273,827

 

 

4.11

%

 

5,808,570

 

 

299,653

 

 

5.16

%

Residential real estate

 

1,435,655

 

 

53,876

 

 

3.75

%

 

1,483,831

 

 

59,375

 

 

4.00

%

Home equity

 

1,116,005

 

 

40,996

 

 

3.67

%

 

1,127,425

 

 

51,164

 

 

4.54

%

Total consumer real estate

 

2,551,660

 

 

94,872

 

 

3.72

%

 

2,611,256

 

 

110,539

 

 

4.23

%

Other consumer

 

25,195

 

 

2,055

 

 

8.16

%

 

26,095

 

 

2,216

 

 

8.49

%

Total loans

 

$

9,239,538

 

 

$

370,754

 

 

4.01

%

 

$

8,445,921

 

 

$

412,408

 

 

4.88

%

Total interest-earning assets

 

$

11,200,540

 

 

$

402,996

 

 

3.60

%

 

$

9,764,348

 

 

$

447,977

 

 

4.59

%

Cash and due from banks

 

125,896

 

 

 

 

 

 

118,295

 

 

 

 

 

Federal Home Loan Bank stock

 

15,843

 

 

 

 

 

 

15,692

 

 

 

 

 

Other assets

 

1,263,332

 

 

 

 

 

 

976,962

 

 

 

 

 

Total assets

 

$

12,605,611

 

 

 

 

 

 

$

10,875,297

 

 

 

 

 

Interest-bearing liabilities

 

 

 

 

 

 

 

 

 

 

 

 

Deposits

 

 

 

 

 

 

 

 

 

 

 

 

Savings and interest checking accounts

 

$

3,688,360

 

 

$

4,413

 

 

0.12

%

 

$

3,121,120

 

 

$

8,366

 

 

0.27

%

Money market

 

2,041,853

 

 

6,166

 

 

0.30

%

 

1,817,394

 

 

15,135

 

 

0.83

%

Time deposits

 

1,155,399

 

 

16,754

 

 

1.45

%

 

1,250,577

 

 

17,685

 

 

1.41

%

Total interest-bearing deposits

 

$

6,885,612

 

 

$

27,333

 

 

0.40

%

 

$

6,189,091

 

 

$

41,186

 

 

0.67

%

Borrowings

 

 

 

 

 

 

 

 

 

 

 

 

Federal Home Loan Bank borrowings

 

162,776

 

 

1,564

 

 

0.96

%

 

178,658

 

 

4,438

 

 

2.48

%

Line of Credit

 

 

 

 

 

%

 

2,673

 

 

104

 

 

3.89

%

Long-term borrowings

 

54,082

 

 

1,176

 

 

2.17

%

 

57,270

 

 

2,073

 

 

3.62

%

Junior subordinated debentures

 

62,850

 

 

1,798

 

 

2.86

%

 

67,581

 

 

2,388

 

 

3.53

%

Subordinated debentures

 

49,647

 

 

2,470

 

 

4.98

%

 

70,070

 

 

3,690

 

 

5.27

%

Total borrowings

 

$

329,355

 

 

$

7,008

 

 

2.13

%

 

$

376,252

 

 

$

12,693

 

 

3.37

%

Total interest-bearing liabilities

 

$

7,214,967

 

 

$

34,341

 

 

0.48

%

 

$

6,565,343

 

 

$

53,879

 

 

0.82

%

Noninterest-bearing demand deposits

 

3,386,140

 

 

 

 

 

 

2,607,763

 

 

 

 

 

Other liabilities

 

304,957

 

 

 

 

 

 

180,270

 

 

 

 

 

Total liabilities

 

$

10,906,064

 

 

 

 

 

 

$

9,353,376

 

 

 

 

 

Stockholders' equity

 

1,699,547

 

 

 

 

 

 

1,521,921

 

 

 

 

 

Total liabilities and stockholders' equity

 

$

12,605,611

 

 

 

 

 

 

$

10,875,297

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net interest income

 

 

 

$

368,655

 

 

 

 

 

 

$

394,098

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest rate spread (2)

 

 

 

 

 

3.12

%

 

 

 

 

 

3.77

%

 

 

 

 

 

 

 

 

 

 

 

 

 

Net interest margin (3)

 

 

 

 

 

3.29

%

 

 

 

 

 

4.04

%

 

 

 

 

 

 

 

 

 

 

 

 

 

Supplemental Information

 

 

 

 

 

 

 

 

 

 

 

 

Total deposits, including demand deposits

 

$

10,271,752

 

 

$

27,333

 

 

 

 

$

8,796,854

 

 

$

41,186

 

 

 

Cost of total deposits

 

 

 

 

 

0.27

%

 

 

 

 

 

0.47

%

Total funding liabilities, including demand deposits

 

$

10,601,107

 

 

$

34,341

 

 

 

 

$

9,173,106

 

 

$

53,879

 

 

 

Cost of total funding liabilities

 

 

 

 

 

0.32

%

 

 

 

 

 

0.59

%

(1) The total amount of adjustment to present interest income and yield on a fully tax-equivalent basis is $927,000 and $963,000 for the years ended December 31, 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:

 

 

December 31
2020

 

September 30
2020

 

December 31
2019

 

Tangible common equity

 

(Dollars in thousands, except per share data)

 

Stockholders' equity (GAAP)

 

$

1,702,685

 

 

$

1,689,724

 

 

$

1,708,143

 

(a)

Less: Goodwill and other intangibles

 

529,313

 

 

530,749

 

 

535,492

 

 

Tangible common equity

 

$

1,173,372

 

 

$

1,158,975

 

 

$

1,172,651

 

(b)

Tangible assets

 

 

 

 

 

 

 

Assets (GAAP)

 

$

13,204,301

 

 

$

13,173,665

 

 

$

11,395,165

 

(c)

Less: Goodwill and other intangibles

 

529,313

 

 

530,749

 

 

535,492

 

 

Tangible assets

 

$

12,674,988

 

 

$

12,642,916

 

 

$

10,859,673

 

(d)

 

 

 

 

 

 

 

 

Common Shares

 

32,965,692

 

 

32,955,547

 

 

34,377,388

 

(e)

 

 

 

 

 

 

 

 

Common equity to assets ratio (GAAP)

 

12.89

%

 

12.83

%

 

14.99

%

(a/c)

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

 

9.26

%

 

9.17

%

 

10.80

%

(b/d)

Book value per share (GAAP)

 

$

51.65

 

 

$

51.27

 

 

$

49.69

 

(a/e)

Tangible book value per share (Non-GAAP)

 

$

35.59

 

 

$

35.17

 

 

$

34.11

 

(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

 

Years Ended

 

 

December 31
2020

 

September 30
2020

 

December 31
2019

 

December 31
2020

 

December 31
2019

 

Net interest income (GAAP)

$

91,443

 

 

$

90,883

 

 

$

99,993

 

 

$

367,728

 

 

$

393,135

 

(a)

 

 

 

 

 

 

 

 

 

 

 

Noninterest income (GAAP)

$

27,468

 

 

$

29,347

 

 

$

33,297

 

 

$

111,440

 

 

$

115,294

 

(b)

Less:

 

 

 

 

 

 

 

 

 

 

Gain on sale of loans

 

 

 

 

 

 

 

 

951

 

 

Noninterest income on an operating basis (Non-GAAP)

$

27,468

 

 

$

29,347

 

 

$

33,297

 

 

$

111,440

 

 

$

114,343

 

(c)

 

 

 

 

 

 

 

 

 

 

 

Noninterest expense (GAAP)

$

73,727

 

 

$

66,658

 

 

$

67,445

 

 

$

273,832

 

 

$

284,321

 

(d)

Less:

 

 

 

 

 

 

 

 

 

 

Merger and acquisition expense

 

 

 

 

 

 

 

 

26,433

 

 

Loss on termination of derivatives

 

 

684

 

 

 

 

684

 

 

 

 

Noninterest expense on an operating basis (Non-GAAP)

$

73,727

 

 

$

65,974

 

 

$

67,445

 

 

$

273,148

 

 

$

257,888

 

(e)

 

 

 

 

 

 

 

 

 

 

 

Total revenue (GAAP)

$

118,911

 

 

$

120,230

 

 

$

133,290

 

 

$

479,168

 

 

$

508,429

 

(a+b)

Total operating revenue (Non-GAAP)

$

118,911

 

 

$

120,230

 

 

$

133,290

 

 

$

479,168

 

 

$

507,478

 

(a+c)

 

 

 

 

 

 

 

 

 

 

 

Ratios

 

 

 

 

 

 

 

 

 

 

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

23.10

%

 

24.41

%

 

24.98

%

 

23.26

%

 

22.68

%

(b/(a+b))

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

23.10

%

 

24.41

%

 

24.98

%

 

23.26

%

 

22.53

%

(c/(a+c))

Efficiency ratio (GAAP based)

62.00

%

 

55.44

%

 

50.60

%

 

57.15

%

 

55.92

%

(d/(a+b))

Efficiency ratio on an operating basis (Non-GAAP)

62.00

%

 

54.87

%

 

50.60

%

 

57.00

%

 

50.82

%

(e/(a+c))

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

 

2020

 

Q4

 

Q3

 

Volume

 

Interest

 

Margin
Impact

 

Volume

 

Interest

 

Margin
Impact

 

(Dollars in thousands)

Reported Total (GAAP)

$

11,761,516

 

$

91,650

 

3.10

 

%

 

$

11,567,747

 

$

91,112

 

3.13

 

%

Adjustments

 

 

 

 

 

 

 

PPP Volume @ 1%

(808,566

)

(2,067

)

0.15

 

%

 

(806,584

)

(2,060

)

0.16

 

%

PPP Fee amortization

 

(3,642

)

(0.12

)

%

 

 

(3,172

)

(0.11

)

%

Cash Position (vs $100M)

(1,090,965

)

(276

)

0.31

 

%

 

(897,921

)

(229

)

0.26

 

%

Adjusted Margin

 

 

3.44

 

%

 

 

 

3.44

 

%

Acquired loan accretion

 

(1,002

)

(0.03

)

%

 

 

(2,700

)

(0.09

)

%

CD fair value mark amortization

 

(26

)

 

%

 

 

(26

)

 

%

Other

 

(564

)

(0.02

)

%

 

 

(561

)

(0.02

)

%

Core Margin (Non-GAAP)

 

 

3.39

 

%

 

 

 

3.33

 

%

 

 

 

 

 

 

 

 

Core Margin Change:

0.06

 

%

 

 

 

 

 

 

 

 

 

 

 

 

Loans: rate compression

 

(0.06

)

%

 

 

 

 

Loans: nonaccrual interest

 

0.07

 

%

 

 

 

 

Deposits

 

 

0.06

 

%

 

 

 

 

Borrowings

 

 

0.01

 

%

 

 

 

 

Other

 

 

(0.02

)

%

 

 

 

 

 

 

 

0.06

 

%

 

 

 

 

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

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

 

December 31
2020

 

September 30
2020

 

June 30
2020

 

March 31
2020

 

January 1
2020

 

December 31
2019

 

 

 

Incurred Loss
Methodology

 

(Dollars in thousands)

Commercial and industrial

$

21,086

 

$

28,219

 

$

25,662

 

$

21,649

 

$

15,659

 

 

$

17,594

 

Commercial real estate

45,009

 

39,386

 

36,956

 

29,498

 

20,224

 

 

32,935

 

Commercial construction

5,397

 

5,210

 

4,501

 

3,747

 

2,401

 

 

6,053

 

Small business

5,095

 

4,593

 

4,561

 

3,829

 

2,241

 

 

1,746

 

Residential real estate

14,275

 

14,163

 

15,046

 

14,847

 

13,691

 

 

3,440

 

Home equity

22,060

 

23,572

 

24,860

 

17,910

 

12,907

 

 

5,576

 

Other consumer

470

 

482

 

590

 

896

 

637

 

 

396

 

Total allowance for credit losses

$

113,392

 

$

115,625

 

$

112,176

 

$

92,376

 

$

67,760

 

 

$

67,740

 

 

 

 

 

 

 

 

 

Total Loans (GAAP)

$

9,392,866

 

$

9,405,193

 

$

9,359,648

 

$

8,916,430

 

$

8,873,639

 

 

$

8,873,639

 

Total Loans, excluding PPP (Non-GAAP)

$

8,600,956

 

$

8,593,470

 

$

8,566,665

 

$

8,916,430

 

$

8,873,639

 

 

$

8,873,639

 

 

 

 

 

 

 

 

 

Allowance as a % of total loans (GAAP)

1.21

%

1.23

%

1.20

%

1.04

%

0.76

%

 

0.76

%

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

1.32

%

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 December 31, 2020, within industries that we have deemed to be highly impacted by the COVID-19 pandemic:

Highly Impacted COVID-19 Industries - Balances

 

 

December 31, 2020 (1)

 

(Dollars in thousands)

Accommodations

$

400,351

 

Food Services

136,509

 

Retail Trade

520,649

 

Other Services (except Public Administration)

150,653

 

Arts, Entertainment, and Recreation

99,830

 

Total

$

1,307,992

 

(1) Amounts presented above exclude $179.1 million of processed PPP loans.

Highly Impacted COVID-19 Industries - Details

 

December 31, 2020

 

(Dollars in thousands)

Accommodations

 

Balance

$

400,351

 

Average borrower loan size

$

4,055

 

% secured by real estate

99.7

%

Weighted average loan to value

54.4

%

Other information:

 

– The accommodation portfolio consists of 68 properties representing a combination of flagged (59%) and non-flagged (41%) hotels, motels and inns.

– Properties deemed to be located in areas of leisure comprise $157.6 million, or 39% of the total accommodation portfolio.

– Approximately 89% of the balances outstanding are secured by properties located within the six New England states with the largest concentration in Massachusetts (59%).

 

 

Food Services

 

Balance

$

136,509

 

Average borrower loan size

$

374

 

% secured by real estate

65.6

%

Weighted average loan to value

51.2

%

Other information:

 

– The food services portfolio includes full-service restaurants (59%), limited service restaurants and fast food (38%), and other types of food service (caterers, bars, mobile food service 3%).

 

 

 

 

Retail Trade

 

Balance

$

520,649

 

Average borrower loan size

$

490

 

% secured by real estate

42.2

%

Weighted average loan to value

55.5

%

Other information:

 

– The retail trade portfolio consists broadly of food and beverage stores (42%), motor vehicle and parts dealers (29%), gasoline stations (13%), and all other retailers account for (16%) of the current outstanding balance.

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

 

 

Other Services (except Public Administration)

 

Balance

$

150,653

 

Average borrower loan size

$

257

 

% secured by real estate

51.0

%

Weighted average loan to value

50.8

%

Other information:

 

– The other services portfolio consists of various for-profit and not-for-profit services diversified across religious, civic and social service organizations (41%), repair and maintenance business (31%) and personal services, including car washes, beauty salons, laundry services, funeral homes, pet care and other types of services (28%).

 

 

Arts, Entertainment, and Recreation

 

Balance

$

99,830

 

Average borrower loan size

$

807

 

% secured by real estate

84.1

%

Weighted average loan to value

52.9

%

Other information:

 

– Amusement, gambling and recreational industries make up a majority of this category (94%) and include amusement/theme parks, bowling centers, fitness centers, golf courses, marinas, and other recreational industries. Other industries including museums, performing arts, and spectator sports account for the remaining outstanding balances (6%).

 

 

 

Other Commercial Loan Portfolio Characteristics

Average total loan size varies across the commercial portfolio with commercial real estate loans have an average size of $1.1 million, commercial and industrial loans have an average loan size of $141,000 and small business loans, which are each under $5.0 million, have an average loan size of $32,000. Additional details are provided below regarding loan sizes of the commercial real estate and commercial and industrial portfolios as of December 31, 2020:

Commercial Real Estate (Including Construction)

 

 

<$5M

 

$5-10M

 

$10-20M

 

>$20M

 

Total

Dollar Amount (in '000s)

$

2,631,887

$

896,451

$

782,708

$

416,810

$

4,727,856

# of loans

 

4,036

 

128

 

56

 

17

 

4,237

 

Commercial and Industrial (Including PPP)

 

 

<$5M

 

$5-10M

 

$10-20M

 

>$20M

 

Total

Dollar Amount (in '000s)

$

1,486,114

$

296,149

$

280,357

$

40,532

$

2,103,152

# of loans

 

14,874

 

45

 

21

 

2

 

14,942

APPENDIX F: COVID-19 Related Modifications Details

Deferrals by Modification Type

 

Deferral of
Principal
and Interest

 

Deferral
of
Principal
Only

 

Deferral of
Interest
Only (2)

 

 

Total
Deferrals

 

Total
Portfolio

 

% Deferral

 

 

 

 

 

(Dollars in thousands)

 

 

 

 

Commercial and industrial

$

2,300

 

 

$

298

 

 

$

3,453

 

 

 

$

6,051

 

 

$

2,103,152

 

 

0.3

%

Commercial real estate (1)

14,393

 

 

17,311

 

 

132,485

 

 

 

164,189

 

 

4,727,856

 

 

3.5

%

Business banking

 

 

669

 

 

 

 

 

669

 

 

175,023

 

 

0.4

%

Residential real estate

1,804

 

 

 

 

 

 

 

1,804

 

 

1,296,183

 

 

0.1

%

Home equity

285

 

 

 

 

638

 

 

 

923

 

 

1,068,790

 

 

0.1

%

Consumer

 

 

 

 

 

 

 

 

 

21,862

 

 

%

Total active deferrals as of December 31, 2020

$

18,782

 

 

$

18,278

 

 

$

136,576

 

 

 

$

173,636

 

 

$

9,392,866

 

 

1.8

%

(1) Balances include commercial construction deferrals.
(2) Includes $134.2 million of loans with previous full payment deferrals which have transitioned to interest only deferrals.

Deferrals by Industry

 

December 31, 2020

 

(Dollars in thousands)

Highly Impacted Industries

 

Accommodation

$

113,542

 

Food Services

4,298

 

Retail Trade

177

 

Arts, Entertainment, and Recreation

28,817

 

Total Highly Impacted Industries

146,834

 

 

 

Other Industries

 

Real Estate and Leasing

23,280

 

Transportation and Warehousing

581

 

All Other Industries

328

 

Total Other Industries

24,189

 

 

 

Consumer (residential, home equity and other)

2,613

 

Grand Total

$

173,636

 

 

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