The parent company of Rockland Trust spent most of the second quarter integrating the parent company of Blue Hills Bank into its operations.
The nearly $730 million acquisition, which was first announced last September, closed in April and the systems conversion occurred in early June, but there were a lot of initiatives in between and still more to do to make the conversion complete.
“The talented Blue Hills colleagues who joined our ranks have settled in nicely and are already contributing to our overall success,” Chris Oddleifson, president and CEO of Blue Hills, said in a statement. “Our three new board members who came over from Blue Hills have been very helpful in providing continuity and achieving a smoother assimilation. Very noteworthy is that during the quarter, when we were focused on a successful integration of Blue Hills, our organic growth engines were running very well.”
Since closing on the acquisition, Rockland has sold $47 million of Blue Hills securities and identified an additional $86 million of residential loans to be sold in the third quarter.
Also during the quarter, Rockland allowed accelerated loan run off for segments of certain Blue Hills loan portfolios that didn’t line up well with its own, and said it would continue to allow other loan portfolios from Blue Hills to run down.
The company spent $24.7 million of pretax, merger and acquisition expenses associated with the Blue Hills acquisition in the quarter.
But the integration of Blue Hills has also started to pay off as well, particularly with the addition of Blue Hills’ mortgage team, which brought in record closings in the quarter.
The addition of the Blue Hills mortgage sales force brings Rockland’s mortgage team from 20 to 40 originators.
Oddleifson said this number allows the company to efficiently support an internal mortgage operation that delivers a positive customer experience because Blue Hills made the right investments in customer phasing as well as loan origination-phasing technology.
Oddleifson also said that the enhanced talent pool will allow the bank to move forward with other digital initiatives.
“Our implementation of online account opening technology that allows our customer to open accounts in five minutes or less is proving quite successful,” he said. “The positive accounts opened online increased 18 percent over the same period last year.”
The company has also introduced new services such as video tellers, card swap and Apple Watch access, and begun to use robotics for such things as processing address change requests, with the goal of freeing up colleagues from handling routine tasks.
Going forward, Oddleifson said Rockland will be focused on not only integrating Blue Hills from a business perspective, but also making sure the new staff from Blue Hills really feel like they are part of the new entity and fit in culturally.
Overall, the company reported second quarter net income of $30.6 million, or $0.89 per diluted share, compared to net income of roughly $31.1 million in the second quarter of 2018.
Net interest income in the second quarter was more than $106 million, up from $73.1 million in the second quarter of last year. The margin added 20 basis points on an annual basis, finishing the quarter at 4.09 percent.
With the acquisition of Blue Hills complete, total assets grew to more than $11.6 billion. Total loans grew to $8.9 million led by big increases in commercial and residential real estate. Total non-interest income in the quarter was $28.6 million, compared to $21.8 million in the second quarter of last year.
The provision for loan losses in the quarter was $1 million, down from $2 million in the second quarter of 2018. Non-performing assets as a percentage of total assets in the quarter were .42 percent, down from .57 percent at the end of the second quarter of last year.
