Rockland Trust continues to fill in holes in its growing franchise, making successful gains in the Boston, Worcester and Cape Cod markets.
The bank’s parent company in its most recent earnings release reported closing on its acquisition of Milford National Bank, which bolsters the bank’s presence in Worcester County; surpassing $500 million in assets under management for its investment management business in the Cape Cod market and opening a branch in Boston’s financial district.
The bank is also inching closer to completing its acquisition of Blue Hills Bank, which will expand Rockland Trust’s presence in the Boston and Cape Cod markets. Blue Hills Bancorp shareholders approved the merger last week and shareholders of Rockland’s parent company will vote soon, with the transaction expected to close sometime in the second quarter.
“Beyond the numbers the Rockland Trust franchise continued to progress in many ways,” Christopher Oddleifson, president and CEO of Rockland Trust and its parent company, said on an earnings call. “We also in the Financial District see some incremental business opportunities that we can leverage and the conversations are going well, we have opened up a number of accounts, we are meeting our expectations.”
Rockland Trust’s parent company reported net income of $29.9 million, or $1.07 per diluted share, in the fourth quarter of 2018, up about $7 million from the fourth quarter of 2017. That includes M&A costs of $8 million, almost all of which is attributable to the Milford National Bank acquisition.
On the year, Rockland Trust reported full year net income of $121.6 million, or $4.40 on a diluted earnings per share basis, an increase of nearly 40 percent from 2017.
Net interest income for the fourth quarter increased to $80.3 million, up close to $13 million from the same time in 2017. The margin rose to 4.05 percent after the fourth quarter, up 51 basis points from this time last year.
Total assets at the end of the year reached roughly $8.85 billion, up more than $750 million from last year. Total loans and deposits grew as well, with the demand deposit and commercial and industrial loan bucket leading the way on a year-over-year basis. In the company’s loan portfolio, commercial construction loan volume declined from the fourth quarter of 2017.
Oddleifson noted that analysts should watch volatility in the equity market, as non-interest expense excluding M&A charges increased more than anticipated during the quarter, mainly due to a $1.1 million loss on equity securities and higher loan workout costs associated with the restructuring of nonperforming loans.
“Trade discussions and the prolonged government shutdown have led to an increased uncertainty driving volatility concerned over future growth,” he said. “It is unclear how all this will play out over the next year but the underlying economic fundamentals continue to be strong.”
Rockland’s credit remained stable. The allowance for loan losses was $64.3 million in the fourth quarter of 2018, up from $60.4 million at the end of the fourth quarter of 2017. However, nonperforming assets as a percentage of total assets sat at .51 percent, down 11 basis points from last year.
