Independent Bank Corp. posted double-digit year-over-year profits in the first quarter this year and company leadership was buoyant.
The holding company for Rockland Trust posted net income for the period ended March 31 totaling $18.6 million, compared with $19.5 million in the prior quarter and $9.5 million in the year-ago quarter.
Noninterest expenses in the first quarter totaled $46.5 million and included $334,000 related to the company’s recent acquisition of New England Bancorp, which is anticipated to close in the fourth quarter.
On the company’s quarterly earnings conference call, President and CEO Christopher Oddleifson fielded questions about the bank’s acquisition strategy and the approaching $10 billion asset threshold.
“We would love to continue, in a perfect world, on a pace of an acquisition every year, year and a half,” Oddleifson said. “We’re very financially disciplined. We’re not going to do a strategic deal that compromises on earnings or earnings accretion.”
Independent Bank Corp.’s total assets added up to $7.2 billion at March 31, representing a 0.3 percent decrease from year-end 2015 and a 4 percent increase from the year-ago quarter.
Rockland Trust has been adding staff in anticipation of the $10 billion mark, which the bank could cross with another deal or two, Oddleifson said. That includes a new capital planning manager to help the bank prepare for Dodd-Frank Act Stress Testing, new compliance and internal audit staff, and the help of additional outside auditors, he said.
“Regulators want you to be prepared, too,” Oddleifson added. “They don’t want you to get to $9.9 billion and then have a transaction and be completely unprepared when you cross $10 billion. so we’re finding our regulatory exams to be longer, more robust, going deeper, and are also helpful in understanding how we really need to get prepared.”
The commercial loan portfolio increased 1.1 percent from the prior quarter and 5 percent from the year-ago quarter to about $4 billion. The company attributed that to growth in its commercial real estate and business banking sectors. Rockland Trust said that various construction projects were completed during the quarter and reclassified to the real estate category.
The company also recorded a 0.8 percent increase in its home equity portfolio from the prior quarter and a 5.2 percent increase from the year-ago quarter. Independent Bank Corp. credited a sustained marketing effort for that increase.
Year-over-year, total loans increased $196.1 million, or 3.6 percent, to $5.6 billion at March 31.
Total deposits increased 5.7 percent year-over-year to nearly $6 billion. Core deposits represented 89 percent of total deposits at the first quarter’s end, and the total cost of deposits decreased to 19 basis points during the quarter.
Independent Bank Corp. recorded net recoveries totaling $82,000 during the first quarter, compared with $120,000 in the prior quarter. The provision for loan losses was $525,000, compared with $500,000 at year-end 2015. Nonperforming loans slipped $2.2 million to $25.5 million and represented 0.46 percent of total loans at March 31, compared with 0.50 percent at Dec. 31.
Total nonperforming assets decreased to $27.2 million at the end of the first quarter, from $29.8 million at the end of the prior quarter. Delinquency as a percentage of loans was 0.54 percent at March 31, 2016, a decrease of two basis points from the prior quarter.
The company’s allowance for loan losses totaled $56.4 million at March 31, compared with $55.8 million at Dec. 31, and it stayed flat at 1.01 percent of loans.
