Press Release

Independent Bank Corp. Reports Fourth Quarter Net Income of $29.9 Million

Company Release - 1/17/2019 4:15 PM ET

Record Earnings in 2018 driven by Strong Top-Line Growth

ROCKLAND, Mass.--(BUSINESS WIRE)-- Independent Bank Corp. (Nasdaq Global Select Market: INDB), parent of Rockland Trust Company, today announced 2018 fourth quarter net income of $29.9 million, or $1.07 per diluted share, compared to net income of $33.0 million, or $1.20 per diluted share, reported in the prior quarter of 2018. Excluding merger and acquisition expenses incurred in the fourth and third quarters of 2018 related to the MNB Bancorp ("MNB") merger which closed in November 2018 and the Blue Hills Bancorp ("BHB") merger announced on September 20, 2018, operating net income was $35.9 million, or $1.29 per diluted share during the fourth quarter of 2018 compared to $34.9 million, or $1.27 per diluted share during the third quarter of 2018. Full year net income was $121.6 million, or $4.40 on a diluted earnings per share basis, an increase of $34.4 million, or 39.5%, as compared to the prior year. In addition, full year operating net income was $129.8 million, or $4.69 on a diluted earnings per share basis, an increase of $38.1 million, or 41.5% compared to 2017. Operating diluted earnings per share of $1.34 in the fourth quarter of 2018 increased 40.0% as compared to the prior year.

“Rockland Trust’s record-setting 2018 financial performance derived from organic loan and deposit growth, augmented by our fourth quarter acquisition of The Milford National Bank and Trust Company, continued net interest margin expansion, pristine asset quality, and disciplined expense control,” said Christopher Oddleifson, the Chief Executive Officer of Independent Bank Corp. and Rockland Trust Company. “My colleagues, and their outstanding commitment to our customers, the communities we serve, and to each other, are responsible for our success. We look forward in 2019 to our anticipated acquisition of Blue Hills Bank and to welcoming Blue Hills customers and colleagues to Rockland Trust.”

MNB BANCORP ACQUISITION

On November 16, 2018, the Company completed the acquisition of MNB. The acquisition resulted in the addition of three branch locations in Worcester County, Massachusetts. The transaction included the acquisition of $293.5 million in loans and the assumption of $278.2 million in deposits, each at fair value. Total consideration of $56.1 million consisted of 528,353 shares of Independent Bank Corp. common stock issued to MNB shareholders, as well as $13.6 million in cash. The following table provides the purchase price allocation of net assets acquired for this transaction:

Net Assets Acquired at Fair Value
(Dollars in thousands)
Assets      
Cash $ 6,743
Investments 25,358
Loans 293,498
Bank premises and equipment 1,904
Goodwill 24,299
Core deposit and other intangibles 8,588
Other assets 8,639
Total assets acquired $ 369,029
Liabilities
Deposits $ 278,204
Borrowings 33,093
Other liabilities 1,609
Total liabilities assumed $ 312,906
Purchase price $ 56,123

For further details on the loans and deposits acquired, see the Organic Loan and Deposit Growth table provided near the end of the financial schedules accompanying this release.

BALANCE SHEET

Total assets of $8.9 billion at December 31, 2018 increased by $476.1 million, or 5.7% from the prior quarter, and by $769.6 million, or 9.5%, as compared to the year ago period, inclusive of the 2018 fourth quarter MNB acquisition.

Excluding the MNB acquisition, total loans grew by $85.3 million, or 1.3% (5.2% annualized) over the prior quarter and by $257.1 million, or 4.05%, when compared to the year ago period. The fourth quarter organic increase was led by an increase of $44.9 million, or 17.8% on an annualized basis, in commercial and industrial loans, with the primary driver being growth in asset-based lending. In addition, there was a $25.8 million, or 12.8% on an annualized basis, increase in residential real estate loans as the portfolio continues to benefit from strong jumbo loan demand. Business banking also experienced organic growth, increasing by $2.9 million, or 7.7% on an annualized basis.

Exclusive of the MNB acquisition, total deposits rose by $172.7 million, or 2.5% (9.8% annualized) from the prior quarter and by $419.7 million, or 6.2%, when compared to the prior year. A portion of the increase reflects the discontinuance and transition of $141.2 million in customer repurchase agreements, which were classified as borrowings in the prior quarter. Excluding this transition, total organic deposit growth for the fourth quarter was 1.8% on an annualized basis and was marked by continued growth in demand deposits and declines in money market and time deposits. Inclusive of the acquired MNB deposits, the total cost of deposits increased by four basis points in the fourth quarter to 0.34%.

The securities portfolio increased by $63.6 million, or 6.3%, compared to the prior quarter, due in part to the MNB acquisition combined with purchases of $93.9 million, offset by paydowns on existing securities.

The Company's total borrowings decreased by $41.0 million, or 13.7%, compared to the prior quarter due primarily to the aforementioned transition of customer repurchase agreement balances. Partially offsetting this decrease was an increase in Federal Home Loan Bank borrowings of $97.0 million, which reflects a $122.0 million overnight borrowing position offset by a $25.0 million maturity during the quarter.

Stockholders' equity at December 31, 2018 rose to $1.1 billion, an increase of 7.5% from September 30, 2018 and 13.7% compared to the year ago period, due primarily to stock issuance associated with the fourth quarter 2018 MNB acquisition combined with strong earnings retention. In addition, the Company recorded a net gain of $11.5 million, after tax, within other comprehensive income during the fourth quarter, due to increased values associated with available for sale securities and certain derivative positions. Book value per share increased $1.98, or 5.5%, during the fourth quarter. The Company's ratio of common equity to assets of 12.13% increased by 21 basis points from the prior quarter and by 45 basis points from the same period a year ago. Inclusive of the added goodwill from the MNB acquisition, the Company's tangible book value per share rose by $1.01, or 3.7%, to $28.57 from the prior quarter and is now 11.6% higher than the year ago period. The Company's ratio of tangible common equity to tangible assets of 9.35% at December 31, 2018 is two basis points higher than the prior quarter and 39 basis points above the year ago period.

NET INTEREST INCOME

Net interest income for the fourth quarter increased 5.3% to $80.3 million compared to $76.2 million in the prior quarter, due to solid average earning asset growth, including the MNB acquisition, and a higher net interest margin. The net interest margin rose to 4.05%, compared to 3.94% in the prior quarter, as the Company continues to benefit from its asset sensitive position.

NONINTEREST INCOME

Noninterest income of $23.5 million in the fourth quarter of 2018 was $227,000, or 1.0%, higher than the prior quarter. Significant changes in noninterest income in the fourth quarter compared to the prior quarter included the following:

  • Investment management income rose by $63,000, or 1.0%. The additional income associated with $160.9 million of assets under administration included in the MNB acquisition along with increased retail commissions helped offset the impact of weak equity markets that prevailed during the fourth quarter. Total assets under administration, inclusive of the acquired MNB portfolio, were $3.6 billion as of December 31, 2018.
  • Mortgage banking income decreased by $281,000, or 23.0%, due to a seasonal decrease in volume.
  • In the prior quarter, the Company received proceeds on life insurance policies, resulting in a gain of $1.5 million. There were no such gains during the fourth quarter.
  • Loan level derivative income increased by $434,000, or 110.7%, as a result of increased customer demand in the quarter.
  • Other noninterest income increased $1.2 million, or 40.1%, primarily due to a gain of $1.1 million on the sale of a previously closed branch facility.

NONINTEREST EXPENSE

Noninterest expense of $64.4 million in the fourth quarter of 2018 was $9.0 million, or 16.1%, higher than the prior quarter. Significant changes in noninterest expense in the fourth quarter compared to the prior quarter included the following:

  • Salaries and employee benefits expense increased by $750,000, or 2.4%, reflecting increases associated with the MNB acquisition and related personnel, along with increased incentive and performance-based equity award expense, partially offset by decreases in pension and medical insurance expenses.
  • Occupancy and equipment expense increased by $573,000, or 9.1%, due to the MNB acquisition, increased repairs and maintenance and various one-time rent adjustment items.
  • Merger and acquisition costs of $8.0 million for the fourth quarter included $7.8 million attributable to the MNB acquisition and $283,000 attributable to the BHB acquisition, which is anticipated to close in the first half of 2019. The majority of these costs include contract terminations, severance, and legal fees.
  • Other noninterest expense increased by $2.4 million, or 18.3%, due to a $1.1 million loss on equity securities, plus increased loan workout costs, debit card expense and core deposit and intangible amortization. The increases were partially offset by decreases in consulting expenses and lower FDIC assessment fees.

The Company generated a return on average assets and a return on average common equity of 1.38% and 11.49%, respectively, in the fourth quarter of 2018, as compared to 1.57% and 13.19%, respectively, for the prior quarter. On an operating basis, the Company generated a return on average assets and return on average equity of 1.66% and 13.78%, respectively, during the fourth quarter of 2018, as compared to 1.66% and 13.96%, respectively, for the prior quarter.

The Company’s effective tax rate decreased to 21.6% for the fourth quarter as compared to 23.2% in the prior quarter.

ASSET QUALITY

During the fourth quarter of 2018, the Company recorded total net charge-offs of $142,000, or 0.01% of average loans on an annualized basis, representing a decrease from net charge-offs of $397,000 in the prior quarter. The provision for loan losses increased to $1.2 million for the fourth quarter of 2018 compared to $1.1 million in the third quarter of 2018, both of which were primarily attributable to loan growth. Nonperforming loans of $45.4 million, or 0.66% of loans at December 31, 2018 were consistent with prior quarter balances of $45.4 million, or 0.70% of loans. Other real estate owned was reduced to zero in the fourth quarter. Total nonperforming assets remained relatively consistent at $45.4 million at the end of the fourth quarter, as compared to $45.6 million at the end of the prior quarter and represent a decline of 9.6% as compared to the year ago period. At December 31, 2018, delinquency as a percentage of loans was 0.67%, representing a decrease of four basis points from the prior quarter.

During the fourth quarter of 2018 nonaccrual loans associated with a large commercial loan customer that had previously declared bankruptcy were modified when a court confirmed the customer’s bankruptcy reorganization plan. That revision to loan terms required the Company to deem loans associated with the customer a troubled debt restructure as of December 31, 2018. Loans associated with the customer remain on nonaccrual status and are included in the nonperforming loan totals reported above.

The allowance for loan losses was $64.3 million at December 31, 2018, as compared to $63.2 million at September 30, 2018. The Company’s allowance for loan losses as a percentage of loans was 0.93% at December 31, 2018 and 0.97% at September 30, 2018. The decrease in this percentage is attributable to the treatment of loans acquired in connection with the MNB acquisition. These acquired loans are recorded at fair value, which includes consideration for estimated credit losses, and without carryover of the respective portfolio's historical allowance for loan losses.

CONFERENCE CALL INFORMATION

Christopher Oddleifson, Chief Executive Officer and Robert Cozzone, Chief Financial Officer, will host a conference call to discuss fourth quarter earnings at 10:00 a.m. Eastern Time on Friday, January 18, 2019. 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: 10127265 and will be available through February 1, 2019. Additionally, a webcast replay will be available until January 18, 2020.

ABOUT INDEPENDENT BANK CORP.

Independent Bank Corp. has approximately $8.9 billion in assets and is the holding company for Rockland Trust Company, a full-service commercial bank headquartered in Massachusetts. Named in 2018 to The Boston Globe’s “Top Places to Work” list for the 10th consecutive year, 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, the Cape and Islands, as well as in Worcester County and Rhode Island. Rockland Trust also offers a full suite of mobile, online, and telephone banking services. The Company is an FDIC member and an Equal Housing Lender. To find out why Rockland Trust is the bank “Where Each Relationship Matters®”, please visit www.rocklandtrust.com.

This press release contains certain “forward-looking statements” 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:

  • a 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;
  • adverse changes or volatility in the local real estate market;
  • adverse changes in asset quality including an 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;
  • inability to raise capital on terms that are favorable;
  • additional regulatory oversight and additional costs associated with the Company's anticipated 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;
  • unexpected changes in market interest rates for interest earning assets and/or interest bearing liabilities;
  • unexpected increased competition in the Company’s market area;
  • unanticipated loan delinquencies, loss of collateral, decreased service revenues, and other potential negative effects on our business caused by severe weather or other external events;
  • a deterioration in the conditions of the securities markets;
  • a deterioration of the credit rating for U.S. long-term sovereign debt;
  • our 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;
  • failure to consummate or a delay in consummating the acquisition of Blue Hills Bancorp, which is subject to certain standard conditions, including regulatory approval and shareholder approval;
  • the inability to realize expected synergies from merger transactions in the amounts or in the timeframe anticipated;
  • inability to retain customers and employees, including those acquired in the MNB and BHB acquisitions;
  • the effect of laws and regulations regarding the financial services industry including, but not limited to, the Dodd-Frank Wall Street Reform and the Consumer Protection Act and regulatory uncertainty surrounding these laws and regulations;
  • changes in laws and regulations (including laws and regulations concerning taxes, banking, securities and insurance) generally applicable to the Company’s business;
  • the impact of the U.S. Government shutdown;
  • 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;
  • cyber security attacks or intrusions that could adversely impact our businesses; and
  • other unexpected material adverse changes in our operations or earnings.

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 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 equity, 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 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 tool 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.

           

INDEPENDENT BANK CORP. FINANCIAL SUMMARY

CONSOLIDATED BALANCE SHEETS
(Unaudited, dollars in thousands)         % Change % Change
December 31
2018
September 30
2018
December 31
2017
Dec 2018 vs. Dec 2018 vs.
Sept 2018 Dec 2017
Assets
Cash and due from banks $ 127,503 $ 102,540 $ 103,485 24.34 % 23.21 %
Interest-earning deposits with banks 122,952 148,307 109,631 (17.10 )% 12.15 %
Securities
Trading 1,504 1,581 1,324 (4.87 )% 13.60 %
Equities 19,477 20,430 (4.66 )% 100.00%
Available for sale 442,752 435,861 447,498 1.58 % (1.06 )%
Held to maturity 611,490   553,705   497,688   10.44 % 22.87 %  
Total securities 1,075,223 1,011,577 946,510 6.29 % 13.60 %
Loans held for sale (at fair value) 6,431 10,431 4,768 (38.35 )% 34.88 %
Loans
Commercial and industrial 1,093,629 1,003,780 888,528 8.95 % 23.08 %
Commercial real estate 3,251,248 3,132,491 3,116,561 3.79 % 4.32 %
Commercial construction 365,165 352,491 401,797 3.60 % (9.12 )%
Small business 164,676   149,200   132,370   10.37 % 24.41 %  
Total commercial 4,874,718   4,637,962   4,539,256   5.10 % 7.39 %  
Residential real estate 923,294 801,810 754,329 15.15 % 22.40 %
Home equity - first position 654,083 647,132 612,990 1.07 % 6.70 %
Home equity - subordinate positions 438,001   426,829   439,098   2.62 % (0.25 )%  
Total consumer real estate 2,015,378   1,875,771   1,806,417   7.44 % 11.57 %  
Other consumer 16,098   13,669   9,880   17.77 % 62.94 %  
Total loans 6,906,194   6,527,402   6,355,553   5.80 % 8.66 %  
Less: allowance for loan losses (64,293 ) (63,235 ) (60,643 ) 1.67 % 6.02 %  
Net loans 6,841,901   6,464,167   6,294,910   5.84 % 8.69 %  
Federal Home Loan Bank stock 15,683 13,107 11,597 19.65 % 35.23 %
Bank premises and equipment, net 97,581 95,941 94,722 1.71 % 3.02 %
Goodwill 256,105 231,806 231,806 10.48 % 10.48 %
Other intangible assets 15,250 7,379 9,341 106.67 % 63.26 %
Cash surrender value of life insurance policies 160,456 153,186 151,528 4.75 % 5.89 %
Other real estate owned and other foreclosed assets 190 612 (100.00 )% (100.00 )%
Other assets 132,507   136,866   123,119   (3.18 )% 7.63 %  
Total assets $ 8,851,592   $ 8,375,497   $ 8,082,029   5.68 % 9.52 %  
Liabilities and Stockholders' Equity
Deposits
Demand deposits $ 2,450,907 $ 2,337,221 $ 2,159,396 4.86 % 13.50 %
Savings and interest checking accounts 2,865,349 2,621,926 2,599,922 9.28 % 10.21 %
Money market 1,399,761 1,353,641 1,325,634 3.41 % 5.59 %
Time certificates of deposit 711,103   663,451   644,301   7.18 % 10.37 %  
Total deposits 7,427,120   6,976,239   6,729,253   6.46 % 10.37 %  
Borrowings
Federal Home Loan Bank borrowings 147,806 50,767 53,264 191.15 % 177.50 %
Customer repurchase agreements 141,176 162,679 (100.00 )% (100.00 )%
Junior subordinated debentures, net 76,173 73,078 73,073 4.24 % 4.24 %
Subordinated debentures, net 34,728   34,717   34,682   0.03 % 0.13 %  
Total borrowings 258,707   299,738   323,698   (13.69 )% (20.08 )%  
Total deposits and borrowings 7,685,827   7,275,977   7,052,951   5.63 % 8.97 %  
Other liabilities 92,275   101,215   85,269   (8.83 )% 8.22 %  
Total liabilities 7,778,102   7,377,192   7,138,220   5.43 % 8.96 %  
Stockholders' equity
Common stock 279 274 273 1.82 % 2.20 %
Additional paid in capital 527,648 483,222 479,430 9.19 % 10.06 %
Retained earnings 546,736 527,473 465,937 3.65 % 17.34 %
Accumulated other comprehensive loss, net of tax (1,173 ) (12,664 ) (1,831 ) (90.74 )% (35.94 )%  
Total stockholders' equity 1,073,490   998,305   943,809   7.53 % 13.74 %  
Total liabilities and stockholders' equity $ 8,851,592   $ 8,375,497   $ 8,082,029   5.68 % 9.52 %  

(nm - the percentage is not meaningful)

 
           
CONSOLIDATED STATEMENTS OF INCOME
(Unaudited, dollars in thousands, except per share data)
Three Months Ended
        % Change % Change
December 31
2018
September 30
2018
December 31
2017
Dec 2018 vs. Dec 2018 vs.
Sept 2018 Dec 2017
Interest income
Interest on federal funds sold and short-term investments $ 908 $ 916 $ 604 (0.87 )% 50.33 %
Interest and dividends on securities 7,146 6,678 5,864 7.01 % 21.86 %
Interest and fees on loans 79,807 75,220 66,384 6.10 % 20.22 %
Interest on loans held for sale 49   61   24   (19.67 )% 104.17 %  
Total interest income 87,910 82,875 72,876 6.08 % 20.63 %
Interest expense
Interest on deposits 6,222 5,251 3,692 18.49 % 68.53 %
Interest on borrowings 1,396   1,390   1,352   0.43 % 3.25 %  
Total interest expense 7,618   6,641   5,044   14.71 % 51.03 %  
Net interest income 80,292 76,234 67,832 5.32 % 18.37 %
Provision for loan losses 1,200   1,075   1,300   11.63 % (7.69 )%  
Net interest income after provision for loan losses 79,092 75,159 66,532 5.23 % 18.88 %
Noninterest income
Deposit account fees 4,687 4,658 4,485 0.62 % 4.50 %
Interchange and ATM fees 5,027 4,947 4,410 1.62 % 13.99 %
Investment management 6,627 6,564 6,226 0.96 % 6.44 %
Mortgage banking income 941 1,222 1,351 (23.00 )% (30.35 )%
Increase in cash surrender value of life insurance policies 1,131 984 1,127 14.94 % 0.35 %
Gain on life insurance benefits 1,463 (100.00 )% n/a
Loan level derivative income 826 392 1,109 110.71 % (25.52 )%
Other noninterest income 4,252   3,034   3,206   40.15 % 32.63 %  
Total noninterest income 23,491 23,264 21,914 0.98 % 7.20 %
Noninterest expenses
Salaries and employee benefits 31,845 31,095 30,333 2.41 % 4.98 %
Occupancy and equipment expenses 6,883 6,310 6,391 9.08 % 7.70 %
Data processing and facilities management 1,288 1,287 1,256 0.08 % 2.55 %
FDIC assessment 560 725 834 (22.76 )% (32.85 )%
Merger and acquisition expense 8,046 2,688 199.33 % 100.00%
Other noninterest expenses 15,769   13,334   12,653   18.26 % 24.63 %  
Total noninterest expenses 64,391 55,439 51,467 16.15 % 25.11 %
Income before income taxes 38,192 42,984 36,979 (11.15 )% 3.28 %
Provision for income taxes 8,258   9,969   14,915   (17.16 )% (44.63 )%  
Net Income $ 29,934   $ 33,015   $ 22,064   (9.33 )% 35.67 %  
(nm - the percentage is not meaningful)
Weighted average common shares (basic) 27,815,437 27,537,841 27,445,739
Common share equivalents 58,576   63,499   77,615  
Weighted average common shares (diluted) 27,874,013   27,601,340   27,523,354  
 
Basic earnings per share

$

1.08 $ 1.20 $ 0.80 (10.00 )% 35.00 %
Diluted earnings per share $ 1.07 $ 1.20 $ 0.80 (10.83 )% 33.75 %
 

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

Net income $ 29,934 $ 33,015 $ 22,064
Noninterest expense components
Add - merger and acquisition expenses 8,046   2,688    
Noncore items, gross 8,046 2,688
Less - net tax benefit associated with noncore items (1) (2,089 ) (756 )
2017 Tax Act: revaluation of net deferred tax assets 1,895
2017 Tax Act: revaluation of LIHTC investments     466  
Total tax impact (2,089 ) (756 ) 2,361  
Noncore items, net of tax 5,957   1,932   2,361  
Operating net income $ 35,891   $ 34,947   $ 24,425   2.70 % 46.94 %
 
Diluted earnings per share, on an operating basis $ 1.29 $ 1.27 $ 0.89 1.57 % 44.94 %
 
(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) 4.05 % 3.94 % 3.64 %
Return on average assets GAAP (calculated by dividing net income by average assets) 1.38 % 1.57 % 1.08 %
Return on average assets on an operating basis (calculated by dividing net operating earnings by average assets) 1.66 % 1.66 % 1.20 %
Return on average common equity GAAP (calculated by dividing net income by average common equity) 11.49 % 13.19 % 9.28 %
Return on average common equity on an operating basis (calculated by dividing net operating earnings by average common equity) 13.78 % 13.96 % 10.28 %
 
       

CONSOLIDATED STATEMENTS OF INCOME

(Unaudited, dollars in thousands, except per share data)  
Years Ended
% Change

December 31
2018

December 31
2017

Dec 2018 vs.
Dec 2017
 
Interest income
Interest on federal funds sold and short-term investments $ 2,676 $ 1,418 88.72 %
Interest and dividends on securities 26,573 22,553 17.82 %
Interest and fees on loans 294,293 253,131 16.26 %
Interest on loans held for sale 159   92   72.83 %  
Total interest income 323,701 277,194 16.78 %
Interest expense
Interest on deposits 19,995 12,702 57.42 %
Interest on borrowings 5,541   5,632   (1.62 )%  
Total interest expense 25,536   18,334   39.28 %  
Net interest income 298,165 258,860 15.18 %
Provision for loan losses 4,775   2,950   61.86 %  
Net interest income after provision for loan losses 293,390 255,910 14.65 %
Noninterest income
Deposit account fees 18,327 17,822 2.83 %
Interchange and ATM fees 18,916 17,291 9.40 %
Investment management 26,155 23,802 9.89 %
Mortgage banking income 4,071 4,960 (17.92 )%
Increase in cash surrender value of life insurance policies 4,060 4,127 (1.62 )%
Gain on life insurance benefits 1,463 100.00%
Loan level derivative income 2,373 3,836 (38.14 )%
Other noninterest income 13,140   11,156   17.78 %  

Total noninterest income

88,505 82,994 6.64 %
Noninterest expenses
Salaries and employee benefits 124,328 116,600 6.63 %
Occupancy and equipment expenses 27,098 24,693 9.74 %
Data processing and facilities management 5,125 4,988 2.75 %
FDIC assessment 2,774 3,068 (9.58 )%
Merger and acquisition expense 11,168 3,393 229.15 %
Other noninterest expenses 55,476   51,617   7.48 %  
Total noninterest expenses 225,969 204,359 10.57 %
Income before income taxes 155,926 134,545 15.89 %
Provision for income taxes 34,304   47,341   (27.54 )%  
Net Income $ 121,622   $ 87,204   39.47 %  
 
 
Weighted average common shares (basic) 27,592,380 27,294,028
Common share equivalents 61,428   78,076  
Weighted average common shares (diluted) 27,653,808   27,372,104  
 
Basic earnings per share $ 4.41 $ 3.19 38.24 %
Diluted earnings per share $ 4.40 $ 3.19 37.93 %
 

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

Net Income $ 121,622 $ 87,204
Noninterest expense components
Add - merger and acquisition expenses 11,168   3,393  
Noncore items, gross 11,168 3,393
Less - net tax benefit associated with noncore items (1) (2,967 ) (1,241 )
2017 Tax Act: revaluation of net deferred tax assets 1,895
2017 Tax Act: revaluation of LIHTC investments   466  
Total tax impact (2,967 ) 1,120  
Noncore items, net of tax $ 8,201   $ 4,513  
Operating net income $ 129,823   $ 91,717   41.55 %
 
Diluted earnings per share, on an operating basis $ 4.69 $ 3.35 40.00 %
 
(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) 3.91 % 3.60 %
Return on average assets GAAP (calculated by dividing net income by average assets) 1.46 % 1.11 %
Return on average assets on an operating basis (calculated by dividing net operating earnings by average assets) 1.56 % 1.16 %
Return on average common equity GAAP (calculated by dividing net income by average common equity) 12.31 % 9.55 %
Return on average common equity on an operating basis (calculated by dividing net operating earnings by average common equity) 13.14 % 10.05 %
 
   

ASSET QUALITY

(Unaudited, dollars in thousands) Nonperforming Assets At
December 31
2018
    September 30
2018
    December 31
2017
Nonperforming loans
Commercial & industrial loans $ 26,310 $ 28,742 $ 32,055
Commercial real estate loans 3,326 1,960 3,123
Small business loans 235 191 230
Residential real estate loans 8,251 8,076 8,129
Home equity 7,278 6,367 6,022
Other consumer 18   58   79  
Total nonperforming loans 45,418   45,394   49,638  
Other real estate owned   190   612  
Total nonperforming assets $ 45,418   $ 45,584   $ 50,250  
 
Nonperforming loans/gross loans 0.66 % 0.70 % 0.78 %
Nonperforming assets/total assets 0.51 % 0.54 % 0.62 %
Allowance for loan losses/nonperforming loans 141.56 % 139.30 % 122.17 %
Allowance for loan losses/total loans 0.93 % 0.97 % 0.95 %
Delinquent loans/total loans 0.67 % 0.71 % 0.77 %
 
Nonperforming Assets Reconciliation for the Three Months Ended
December 31
2018
September 30
2018
December 31
2017
 
Nonperforming assets beginning balance $ 45,584 $ 47,357 $ 53,175
New to nonperforming 5,759 4,984 2,363
Loans charged-off (588 ) (847 ) (686 )
Loans paid-off (4,453 ) (4,932 ) (1,892 )
Loans restored to performing status (630 ) (921 ) (369 )
Valuation write down (190 ) (39 )
Sale of other real estate owned (2,195 )
Other (64 ) (57 ) (107 )
Nonperforming assets ending balance $ 45,418   $ 45,584   $ 50,250  
 
   
Net Charge-Offs (Recoveries)
Three Months Ended     Years Ended

December 31
2018

    September 30
2018
    December 31
2017
December 31
2018
    December 31
2017
Net charge-offs (recoveries)
Commercial and industrial loans $ (3 ) $ 110 $ 165 $ 173 $ 3,276
Commercial real estate loans (121 ) 53 (3 ) (106 ) (346 )
Small business loans 118 101 26 326 188
Residential real estate loans (9 ) 23 136 176
Home equity 4 16 28 137 78
Other consumer 144   126   128   459   501  
Total net charge-offs $ 142   $ 397   $ 367   $ 1,125   $ 3,873  
 
Net charge-offs to average loans (annualized) 0.01 % 0.02 % 0.02 % 0.02 % 0.06 %
 
   
Troubled Debt Restructurings At
December 31
2018
    September 30
2018
    December 31
2017
Troubled debt restructurings on accrual status $ 23,849 $ 24,554 $ 25,852
Troubled debt restructurings on nonaccrual status 29,348   3,370   6,067  
Total troubled debt restructurings $ 53,197   $ 27,924   $ 31,919  
 
BALANCE SHEET AND CAPITAL RATIOS
December 31
2018
September 30
2018
December 31
2017
Gross loans/total deposits 92.99 % 93.57 % 94.45 %
Common equity tier 1 capital ratio (1) 11.86 % 11.98 % 11.20 %
Tier one leverage capital ratio (1) 10.69 % 10.49 % 10.04 %
Common equity to assets ratio GAAP 12.13 % 11.92 % 11.68 %
Tangible common equity to tangible assets ratio (2) 9.35 % 9.33 % 8.96 %
Book value per share GAAP $ 38.23 $ 36.25 $ 34.38
Tangible book value per share (2) $ 28.57 $ 27.56 $ 25.60
 
(1) Estimated number for December 31, 2018.
(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, 2018 September 30, 2018 December 31, 2017
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 $ 158,376 $ 908 2.27 % $ 180,802 $ 916 2.01 % $ 185,073 $ 604 1.29 %
Securities
Securities - trading 1,554 % 1,608 % 1,297 %
Securities - taxable investments 1,031,969 7,132 2.74 % 1,005,787 6,664 2.63 % 922,904 5,847 2.51 %
Securities - nontaxable investments (1) 1,939   18   3.68 % 1,992   18   3.58 % 2,365   25   4.19 %
Total securities $ 1,035,462 $ 7,150 2.74 % $ 1,009,387 $ 6,682 2.63 % $ 926,566 $ 5,872 2.51 %
Loans held for sale 5,708 49 3.41 % 8,340 61 2.90 % 6,763 24 1.41 %
Loans
Commercial and industrial 1,033,345 13,087 5.02 % 975,980 11,936 4.85 % 856,272 9,135 4.23 %
Commercial real estate (1) 3,168,962 38,533 4.82 % 3,144,613 37,048 4.67 % 3,104,885 33,455 4.27 %
Commercial construction 373,042 5,116 5.44 % 356,091 4,572 5.09 % 401,309 4,528 4.48 %
Small business 152,722   2,309   6.00 % 147,518   2,183   5.87 % 130,403   1,861   5.66 %
Total commercial 4,728,071 59,045 4.95 % 4,624,202 55,739 4.78 % 4,492,869 48,979 4.33 %
Residential real estate 860,234 8,647 3.99 % 792,154 7,959 3.99 % 754,605 7,400 3.89 %
Home equity 1,085,421   12,013   4.39 % 1,071,511   11,457   4.24 % 1,050,815   10,155   3.83 %
Total consumer real estate 1,945,655 20,660 4.21 % 1,863,665 19,416 4.13 % 1,805,420 17,555 3.86 %
Other consumer 14,415   283   7.79 % 13,040   244   7.42 % 10,085   222   8.73 %
Total loans $ 6,688,141   $ 79,988   4.74 % $ 6,500,907   $ 75,399   4.60 % $ 6,308,374   $ 66,756   4.20 %
Total interest-earning assets $ 7,887,687   $ 88,095   4.43 % $ 7,699,436   $ 83,058   4.28 % $ 7,426,776   $ 73,256   3.91 %
Cash and due from banks 110,643 106,273 98,397
Federal Home Loan Bank stock 13,274 13,107 11,597
Other assets 573,854   547,296   557,044  
Total assets $ 8,585,458   $ 8,366,112   $ 8,093,814  
Interest-bearing liabilities
Deposits
Savings and interest checking accounts $ 2,737,399 $ 1,763 0.26 % $ 2,654,157 $ 1,433 0.21 % $ 2,556,355 $ 1,052 0.16 %
Money market 1,398,175 2,378 0.67 % 1,373,594 2,056 0.59 % 1,337,491 1,261 0.37 %
Time deposits 685,440   2,081   1.20 % 652,638   1,762   1.07 % 635,941   1,379   0.86 %
Total interest-bearing deposits $ 4,821,014 $ 6,222 0.51 % $ 4,680,389 $ 5,251 0.45 % $ 4,529,787 $ 3,692 0.32 %
Borrowings
Federal Home Loan Bank borrowings 53,631 280 2.07 % 50,770 248 1.94 % 53,267 262 1.95 %
Customer repurchase agreements 72,668 43 0.23 % 148,575 75 0.20 % 178,917 79 0.18 %
Junior subordinated debentures 74,592 646 3.44 % 73,077 640 3.47 % 73,072 584 3.17 %
Subordinated debentures 34,723   427   4.88 % 34,711   427   4.88 % 34,675   427   4.89 %
Total borrowings $ 235,614   $ 1,396   2.35 % $ 307,133   $ 1,390   1.80 % $ 339,931   $ 1,352   1.58 %
Total interest-bearing liabilities $ 5,056,628   $ 7,618   0.60 % $ 4,987,522   $ 6,641   0.53 % $ 4,869,718   $ 5,044   0.41 %
Demand deposits 2,399,488 2,300,943 2,201,866
Other liabilities 95,670   84,442   79,208  
Total liabilities $ 7,551,786   $ 7,372,907   $ 7,150,792  
Stockholders' equity 1,033,673   993,205   943,022  
Total liabilities and stockholders' equity $ 8,585,459   $ 8,366,112   $ 8,093,814  
 
Net interest income $ 80,477   $ 76,417   $ 68,212  
 
Interest rate spread (2) 3.83 % 3.75 % 3.50 %
 
Net interest margin (3) 4.05 % 3.94 % 3.64 %
 

Supplemental Information

Total deposits, including demand deposits $ 7,220,502 $ 6,222 $ 6,981,332 $ 5,251 $ 6,731,653 $ 3,692
Cost of total deposits 0.34 % 0.30 % 0.22 %
Total funding liabilities, including demand deposits $ 7,456,116 $ 7,618 $ 7,288,465 $ 6,641 $ 7,071,584 $ 5,044
Cost of total funding liabilities 0.41 % 0.36 % 0.28 %
 
(1) The total amount of adjustment to present interest income and yield on a fully tax-equivalent basis is $185,000, $183,000, and $380,000 for the three months ended December 31, 2018, September 30, 2018, and December 31, 2017, 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, 2018     December 31, 2017
    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 $ 136,140 $ 2,676 1.97 % $ 124,014 $ 1,418 1.14 %
Securities
Securities - trading 1,549 % 1,223 %
Securities - taxable investments 999,744 26,513 2.65 % 901,891 22,465 2.49 %
Securities - nontaxable investments (1) 2,098   76   3.62 % 3,186   135   4.24 %
Total securities $ 1,003,391 $ 26,589 2.65 % $ 906,300 $ 22,600 2.49 %
Loans held for sale 5,396 159 2.95 % 4,760 92 1.93 %
Loans
Commercial and industrial 958,414 45,754 4.77 % 875,056 36,048 4.12 %
Commercial real estate (1) 3,128,659 144,045 4.60 % 3,067,077 127,512 4.16 %
Commercial construction 385,771 19,615 5.08 % 365,277 16,387 4.49 %
Small business 142,850   8,362   5.85 % 128,559   7,145   5.56 %
Total commercial 4,615,694 217,776 4.72 % 4,435,969 187,092 4.22 %
Residential real estate 794,735 31,768 4.00 % 713,608 28,179 3.95 %
Home equity 1,067,365   44,505   4.17 % 1,030,881   38,388   3.72 %
Total consumer real estate 1,862,100 76,273 4.10 % 1,744,489 66,567 3.82 %
Other consumer 12,116   952   7.86 % 10,641   944   8.87 %
Total loans $ 6,489,910   $ 295,001   4.55 % $ 6,191,099   $ 254,603   4.11 %
Total interest-earning assets $ 7,634,837   $ 324,425   4.25 % $ 7,226,173   $ 278,713   3.86 %
Cash and due from banks 103,911 97,694
Federal Home Loan Bank stock 13,200 12,781
Other assets 553,226   554,117  
Total assets $ 8,305,174   $ 7,890,765  
Interest-bearing liabilities
Deposits
Savings and interest checking accounts $ 2,658,798 $ 5,582 0.21 % $ 2,541,845 $ 3,656 0.14 %
Money market 1,367,743 7,465 0.55 % 1,298,598 4,224 0.33 %
Time deposits 655,983   6,948   1.06 % 622,909   4,822   0.77 %
Total interest-bearing deposits $ 4,682,524 $ 19,995 0.43 % $ 4,463,352 $ 12,702 0.28 %
Borrowings
Federal Home Loan Bank borrowings 59,932 1,083 1.81 % 59,204 1,385 2.34 %
Customer repurchase agreements 129,890 248 0.19 % 166,152 257 0.15 %
Junior subordinated debentures 73,458 2,501 3.40 % 73,074 2,281 3.12 %
Subordinated debentures 34,705   1,709   4.92 % 34,658   1,709   4.93 %
Total borrowings $ 297,985   $ 5,541   1.86 % $ 333,088   $ 5,632   1.69 %
Total interest-bearing liabilities $ 4,980,509   $ 25,536   0.51 % $ 4,796,440   $ 18,334   0.38 %
Demand deposits 2,252,006 2,098,501
Other liabilities 84,671   82,840  
Total liabilities $ 7,317,186 $ 6,977,781
Stockholders' equity 987,988   912,984  
Total liabilities and stockholders' equity $ 8,305,174   $ 7,890,765  
 
Net interest income $ 298,889   $ 260,379  
 
Interest rate spread (2) 3.74 % 3.48 %
 
Net interest margin (3) 3.91 % 3.60 %
 

Supplemental Information

Total deposits, including demand deposits $ 6,934,530 $ 19,995 $ 6,561,853 $ 12,702
Cost of total deposits 0.29 % 0.19 %
Total funding liabilities, including demand deposits $ 7,232,515 $ 25,536 $ 6,894,941 $ 18,334
Cost of total funding liabilities 0.35 % 0.27 %
 
(1) The total amount of adjustment to present interest income and yield on a fully tax-equivalent basis is $724,000 and $1.5 million for the twelve months ended December 31, 2018 and 2017, 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.
                   

Organic Loan and Deposit Growth

(Unaudited, dollars in thousands)                          
Linked quarter

December 31
2018

September 30
2018

Balance
Acquired

Organic
Growth/(Decline)

Organic
Growth/(Decline)
%

Loans
Commercial and industrial $ 1,093,629 $ 1,003,780 $ 44,929 $ 44,920 4.48 %
Commercial real estate 3,251,248 3,132,491 112,922 5,835 0.19 %
Commercial construction 365,165 352,491 16,497 (3,823 ) (1.08 )%
Small business 164,676   149,200   12,589   2,887   1.93 %
Total commercial 4,874,718 4,637,962 186,937 49,819 1.07 %
Residential real estate 923,294 801,810 95,705 25,779 3.22 %
Home equity 1,092,084   1,073,961   7,692   10,431   0.97 %
Total consumer real estate 2,015,378 1,875,771 103,397 36,210 1.93 %
Total other consumer 16,098   13,669   3,164   (735 ) (5.38 )%
Total loans $ 6,906,194   $ 6,527,402   $ 293,498   $ 85,294   1.31 %
 
Deposits
Demand deposits $ 2,450,907 $ 2,337,221 $ 77,786 $ 35,900 1.54 %
Savings and interest checking accounts 2,865,349 2,621,926 58,441 184,982 7.06 %
Money market 1,399,761 1,353,641 73,645 (27,525 ) (2.03 )%
Time certificates of deposit 711,103   663,451   68,332   (20,680 ) (3.12 )%
Total deposits $ 7,427,120   $ 6,976,239   $ 278,204   $ 172,677   2.48 %
 
 
Year-over-Year

December 31
2018

December 31
2017

Balances
Acquired

Organic
Growth/(Decline)

Organic
Growth/(Decline)
%

Loans
Commercial and industrial $ 1,093,629 $ 888,528 $ 44,929 $ 160,172 18.03 %
Commercial real estate 3,251,248 3,116,561 112,922 21,765 0.70 %
Commercial construction 365,165 401,797 16,497 (53,129 ) (13.22 )%
Small business 164,676   132,370   12,589   19,717   14.90 %
Total commercial 4,874,718 4,539,256 186,937 148,525 3.27 %
Residential real estate 923,294 754,329 95,705 73,260 9.71 %
Home equity 1,092,084   1,052,088   7,692   32,304   3.07 %
Total consumer real estate 2,015,378 1,806,417 103,397 105,564 5.84 %
Total other consumer 16,098   9,880   3,164   3,054   30.91 %
Total loans $ 6,906,194   $ 6,355,553   $ 293,498   $ 257,143   4.05 %
 
Deposits
Demand deposits $ 2,450,907 $ 2,159,396 $ 77,786 $ 213,725 9.90 %
Savings and interest checking accounts 2,865,349 2,599,922 58,441 206,986 7.96 %
Money market 1,399,761 1,325,634 73,645 482 0.04 %
Time certificates of deposit 711,103   644,301   68,332   (1,530 ) (0.24 )%
Total deposits $ 7,427,120   $ 6,729,253   $ 278,204   $ 419,663   6.24 %
 

Certain amounts in prior year financial statements have been reclassified to conform to the current year's presentation.

APPENDIX A

(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
2018

September 30
2018
December 31
2017
Tangible common equity
Stockholders' equity (GAAP) $ 1,073,490 $ 998,305 $ 943,809 (a)
Less: Goodwill and other intangibles 271,355   239,185   241,147  
Tangible common equity $ 802,135   $ 759,120   $ 702,662   (b)
Tangible assets
Assets (GAAP) $ 8,851,592 $ 8,375,498 $ 8,082,029 (c)
Less: Goodwill and other intangibles 271,355   239,185   241,147  
Tangible assets $ 8,580,237   $ 8,136,313   $ 7,840,882   (d)
     
Common Shares 28,080,408   27,540,843   27,450,190   (e)
 
Common equity to assets ratio (GAAP) 12.13 % 11.92 % 11.68 % (a/c)
Tangible common equity to tangible assets ratio (Non-GAAP) 9.35 % 9.33 % 8.96 % (b/d)
Book value per share (GAAP) $ 38.23 $ 36.25 $ 34.38 (a/e)
Tangible book value per share (Non-GAAP) $ 28.57 $ 27.56 $ 25.60 (b/e)
 

APPENDIX B

(Unaudited, dollars in thousands)

The following table summarizes the impact of noncore items on of 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
2018
    September 30
2018
    December 31
2017

December 31,
2018

   

December 31,
2017

Net interest income (GAAP) $ 80,292 $ 76,234 $ 67,832 $ 298,165 $ 258,860 (a)
 
Noninterest income (GAAP) $ 23,491   $ 23,264   $ 21,914   $ 88,505   $ 82,994   (b)
Noninterest income on an operating basis (Non-GAAP) $ 23,491 $ 23,264 $ 21,914 $ 88,505 $ 82,994 (c)
 
Noninterest expense (GAAP) $ 64,391 $ 55,439 $ 51,467 $ 225,969 $ 204,359 (d)
Less:
Merger and acquisition expense 8,046   2,688     11,168   3,393  
Noninterest expense on an operating basis (Non-GAAP) $ 56,345 $ 52,751 $ 51,467 $ 214,801 $ 200,966 (e)
 
Total revenue (GAAP) $ 103,783 $ 99,498 $ 89,746 $ 386,670 $ 341,854 (a+b)
Total operating revenue (Non-GAAP) $ 103,783 $ 99,498 $ 89,746 $ 386,670 $ 341,854 (a+c)
 
Ratios
Noninterest income as a % of total revenue (GAAP based) 22.63 % 23.38 % 24.42 % 22.89 % 24.28 % (b/(a+b))
Noninterest income as a % of total revenue on an operating basis (Non-GAAP) 22.63 % 23.38 % 24.42 % 22.89 % 24.28 % (c/(a+c))
Efficiency ratio (GAAP based) 62.04 % 55.72 % 57.35 % 58.44 % 59.78 % (d/(a+b))
Efficiency ratio on an operating basis (Non-GAAP) 54.29 % 53.02 % 57.35 % 55.55 % 58.79 % (e/(a+c))
 

Chris Oddleifson
President and Chief Executive Officer
(781) 982-6660

Robert D. Cozzone
Chief Financial Officer
(781) 982-6723

Source: Independent Bank Corp.