{"id":749807,"date":"2023-04-20T16:59:02","date_gmt":"2023-04-20T20:59:02","guid":{"rendered":"https:\/\/www.marketnewsdesk.com\/index.php\/independent-bank-corp-reports-first-quarter-net-income-of-61-2-million\/"},"modified":"2023-04-20T16:59:02","modified_gmt":"2023-04-20T20:59:02","slug":"independent-bank-corp-reports-first-quarter-net-income-of-61-2-million","status":"publish","type":"post","link":"https:\/\/www.marketnewsdesk.com\/index.php\/independent-bank-corp-reports-first-quarter-net-income-of-61-2-million\/","title":{"rendered":"Independent Bank Corp. Reports First Quarter Net Income of $61.2 Million"},"content":{"rendered":"

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Independent Bank Corp. Reports First Quarter Net Income of $61.2 Million<\/b><\/p>\n

Stability amidst latest banking challenges<\/b><\/p>\n

ROCKLAND, Mass.–(BUSINESS WIRE<\/a>)–
\nIndependent Bank Corp. (Nasdaq Global Select Market: INDB), parent of Rockland Trust Company, today announced 2023 first quarter net income of $61.2 million, or $1.36 per diluted share, compared to 2022 fourth quarter net income of $77.0 million, or $1.69 per diluted share. First quarter results were driven primarily by increases in interest expense, reflecting both an increase in overall cost of deposits as well as an increase in levels of borrowings as result of deposit balance reductions.<\/p>\n

\nThe Company generated a return on average assets and a return on average common equity of 1.30% and 8.63%, respectively, for the first quarter of 2023, as compared to 1.56% and 10.70%, respectively, for the prior quarter.<\/p>\n

\n\u201cRockland Trust remains strong. Our disciplined underwriting and comprehensive capital and liquidity planning positions us well to navigate the current landscape.\u201d said Jeffrey Tengel, the Chief Executive Officer of Independent Bank Corp. and Rockland Trust Company. \u201cWe remain confident that our balance sheet management strategies will continue to serve us in the weeks and months ahead. Our diverse business model, focus on core relationships, and service excellence have been the foundational keys to our success over these many years and these key attributes will continue to guide us.\u201d<\/p>\n

BALANCE SHEET<\/b><\/p>\n

\nTotal assets of $19.4 billion at March 31, 2023 increased by $148.2 million, or 0.8% compared to the prior quarter, due primarily to higher on-balance sheet liquidity in the form of cash balances. Total assets decreased by $716.8 million, or 3.6%, as compared to March 31, 2022, fueled primarily by lower deposit levels and associated cash balances compared to the prior year.<\/p>\n

\nTotal loans at March 31, 2023 of $13.9 billion increased by $19.3 million, or 0.1% (0.6% annualized), compared to the prior quarter level. The commercial portfolio decreased by $26.7 million, or 0.2% during the quarter, reflecting approximately $159.9 million of transfers from construction to commercial real estate, as well as an overall cautious posture over new commitments. Small business loans rose modestly in the first quarter. As in prior quarters, the vast majority of residential real estate originations were retained on the balance sheet, resulting in growth of $60.1 million, or 3.0% for the quarter, while home equity balances remained relatively flat.<\/p>\n

\nDeposit balances of $15.3 billion at March 31, 2023 decreased by $606.8 million, or 3.8%, from December 31, 2022, primarily reflective of industry wide dislocations in the first quarter along with seasonality, a competitive rate environment, and redeployment of customer excess liquidity due to inflationary and other factors. Core deposits declined to 85.6% of total deposits at March 31, 2023, compared to 87.9% at December 31, 2022, driven primarily by core deposit outflows in conjunction with growth in higher yielding time deposits, which increased $259.6 million, or 21.7%, in comparison to prior quarter. The total cost of deposits for the quarter increased 24 basis points to 0.59% in line with the higher rate environment.<\/p>\n

\nBorrowings increased by $879.0 million during the first quarter of 2023 in response to deposit balance reductions and share repurchase activity, as well as preemptive measures to bolster on-balance sheet liquidity in response to the high deposit risk environment experienced across the industry during the month of March. The additional borrowings were comprised primarily of short term borrowings from the Federal Home Loan Bank. In conjunction with these borrowings, the Company entered into $300 million of hedges resulting in a weighted average cost of 3.7% over an average term of 3.5 years.<\/p>\n

\nThe securities portfolio decreased by $19.3 million, or 0.6%, compared to December 31, 2022 driven primarily by paydowns, calls, and maturities, partially offset by unrealized gains of $22.2 million in the available for sale portfolio. Total securities represented 16.0% of total assets at March 31, 2023, as compared to 16.2% at December 31, 2022.<\/p>\n

\nDuring the first quarter of 2023, the Company repurchased 1.6 million shares of common stock for $120 million at an average price per share of $74.18, marking the full completion of its share repurchase program announced in October 2022. Stockholders’ equity at March 31, 2023 decreased 1.9% when compared to December 31, 2022, driven primarily by the impact of the share repurchases, partially offset by strong earnings retention and other comprehensive income. The Company’s ratio of common equity to assets of 14.56% at March 31, 2023 represented a decrease of 40 basis points, or 2.7% from December 31, 2022 and a decrease of 15 basis points, or 1.0%, from March 31, 2022. Despite the stock repurchase activity, the Company’s book value per share increased by $0.92, or 1.5%, to $64.17 during the first quarter as compared to the prior quarter. The Company’s tangible book value per share at March 31, 2023 rose by $0.19, or 0.5%, from the prior quarter to $41.31, and represented an increase of 0.4% from the year ago period. The Company’s ratio of tangible common equity to tangible assets of 9.89% at March 31, 2023 represented a decrease of 37 basis points from the prior quarter and a decrease of 29 basis points from the year ago period. Please refer to Appendix A for a detailed reconciliation of Non-GAAP balance sheet metrics.<\/b><\/p>\n

NET INTEREST INCOME<\/b><\/p>\n

\nNet interest income for the first quarter of 2023 decreased 5.6% to $159.0 million compared to $168.4 million for the prior quarter, driven primarily by higher funding costs due to raised deposit pricing along with increased borrowings, resulting in a reduction in net interest margin of six basis points to 3.79% for the quarter. Core margin decreased four basis points to 3.78% for the first quarter of 2023, when excluding purchase accounting and other non-core items. Please refer to Appendix C for additional details regarding the net interest margin and Non-GAAP reconciliation of core margin.<\/b><\/p>\n

NONINTEREST INCOME<\/b><\/p>\n

\nNoninterest income of $28.2 million for the first quarter of 2023 represented a decrease $4.1 million, or 12.6%, as compared to the prior quarter. Significant changes in noninterest income for the first quarter of 2023 compared to the prior quarter included the following:<\/p>\n