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Financial Performance - Net income for Q3 2025 was $343 million, or $069 per diluted share[6,7] - Operating net income was $774 million, or $155 per diluted share[6,7] - Return on average assets (ROAA) was 055%, while operating ROAA was 123%[7] - Net interest margin increased by 25 bps to 362%[9] Enterprise Bancorp Acquisition - The acquisition of Enterprise Bancorp closed on July 1, 2025[9,11] - Acquired balances from Enterprise included $51 billion in assets, $39 billion in loans, $44 billion in deposits, and $15 billion of wealth AUA[11] - Tangible book value dilution from the acquisition was 70%, less than the originally anticipated 98%[11] Balance Sheet and Loan Portfolio - Total deposits reached $20296 billion, including $4363 billion acquired from Enterprise, with organic growth of $39 million or 019%[13] - Total loans amounted to $18452 billion, including $3914 billion acquired from Enterprise, with organic growth of $6 million or 003%[15] - Commercial and industrial loans grew organically by $149 million, a 329% increase[15] Asset Quality - Nonperforming loans (NPLs) were $866 million, representing 047% of total loans[17] - Criticized and classified commercial loans totaled $5189 million, or 365% of total commercial loans[18] - Assets under administration increased to $92 billion, including $15 billion from the Enterprise acquisition and $360 million in organic growth[9,45]

Core Insights - Independent Bank Corp. (INDB) reported quarterly earnings of $1.55 per share, exceeding the Zacks Consensus Estimate of $1.54 per share, and showing a significant increase from $1.01 per share a year ago, representing an earnings surprise of +0.65% [1] - The company posted revenues of $243.74 million for the quarter ended September 2025, surpassing the Zacks Consensus Estimate by 0.59% and up from $175.25 million year-over-year [2] - The stock has gained approximately 5.8% since the beginning of the year, while the S&P 500 has increased by 13.4% [3] Earnings Outlook - The earnings outlook for Independent Bank Corp. is crucial for investors, as it includes current consensus earnings expectations for upcoming quarters and any recent changes to these expectations [4] - The current consensus EPS estimate for the next quarter is $1.64 on revenues of $245.61 million, and for the current fiscal year, it is $5.49 on revenues of $847.01 million [7] Industry Context - The Zacks Industry Rank indicates that the Banks - Northeast sector is currently in the top 28% of over 250 Zacks industries, suggesting a favorable environment for stock performance [8] - Empirical research shows a strong correlation between near-term stock movements and trends in earnings estimate revisions, which can be tracked by investors or through tools like the Zacks Rank [5][6]

Third Quarter 2025 Financial Performance Overview [Q3 2025 Key Financial Results](index=1&type=section&id=Q3%202025%20Key%20Financial%20Results) GAAP net income decreased to $34.3 million due to merger costs, while operating net income rose to $77.4 million Q3 2025 Key Financial Results (Millions of Dollars) | Metric | Q3 2025 (GAAP) (Millions of Dollars) | Q2 2025 (GAAP) (Millions of Dollars) | Q3 2025 (Operating) (Millions of Dollars) | Q2 2025 (Operating) (Millions of Dollars) | | :-------------------------------- | :------------- | :------------- | :------------------ | :------------------ | | Net Income | $34.3 million | $51.1 million | $77.4 million | $53.5 million | | Diluted EPS | $0.69 | $1.20 | $1.55 | $1.25 | | Pre-tax Merger-Related Costs | $23.9 million | $2.2 million | N/A | N/A | | Provision for Credit Losses (Acquisition-related) | $34.5 million | N/A | N/A | N/A | [CEO Statement](index=1&type=section&id=CEO%20Statement) CEO Jeffrey Tengel highlighted Q3 results aligned with sustainable financial goals, improving net interest margin, fee income, and efficiency - The **Enterprise acquisition** and solid business activity drove **significant net interest margin improvement**, **improved fee income results**, and a **meaningful drop in the efficiency ratio**[2](index=2&type=chunk) - The company remained focused on **improving asset quality metrics**[2](index=2&type=chunk) [Enterprise Bancorp, Inc. Acquisition](index=1&type=section&id=Enterprise%20Bancorp%2C%20Inc.%20Acquisition) The Enterprise Bancorp, Inc. acquisition completed July 1, 2025, adding **27** branches, **$3.9 billion** in loans, and **$4.4 billion** in deposits - **Acquisition** of Enterprise Bancorp, Inc. completed on July 1, 2025[3](index=3&type=chunk) - Added **twenty-seven branch locations** in northern Massachusetts and southern New Hampshire[3](index=3&type=chunk) - Acquired **$3.9 billion** in loans and assumed **$4.4 billion** in deposits at fair value[3](index=3&type=chunk) - Total merger consideration: **$503.1 million**, comprising **$477.2 million** in equity (**7,478,906 shares**) and **$25.9 million** in cash[3](index=3&type=chunk) Net Assets Acquired at Fair Value (Dollars in thousands) | Assets | Amount (Thousands of Dollars) | | :------------------------------------------ | :------- | | Cash | $123,638 | | Investments | $590,267 | | Loans (including loans held for sale) | $3,913,112 | | Allowance for credit losses on PCD loans | $(9,020) | | Bank premises and equipment | $35,706 | | Goodwill | $98,302 | | Core deposit and other intangibles | $137,503 | | Other assets | $164,908 | | **Total assets acquired** | **$5,054,416** | | Liabilities | | | Deposits | $4,362,710 | | Borrowings | $62,472 | | Subordinated debt | $59,974 | | Other liabilities | $66,116 | | **Total liabilities assumed** | **$4,551,272** | | **Purchase price** | **$503,144** | Financial Highlights [Balance Sheet Overview](index=2&type=section&id=Balance%20Sheet%20Overview) Balance sheet expanded significantly in Q3 2025 due to Enterprise acquisition, increasing total assets by **24.7%** to **$25.0 billion** Key Balance Sheet Metrics (QoQ Change) (Billions of Dollars) | Metric | Sep 30, 2025 (Billions of Dollars) | Jun 30, 2025 (Billions of Dollars) | Change (%) | | :-------------------------------- | :----------- | :----------- | :--------- | | Total Assets | $25.0 billion | $20.1 billion | 24.7% | | Total Deposits | $20.3 billion | $15.9 billion | 27.7% | | Total Loans | $18.5 billion | $14.5 billion | 27.0% | | Wealth Management AUA | $9.2 billion | N/A | N/A | Return Ratios (QoQ Comparison) | Metric | Q3 2025 (GAAP) | Q2 2025 (GAAP) | Q3 2025 (Operating) | Q2 2025 (Operating) | | :-------------------------- | :------------- | :------------- | :------------------ | :------------------ | | Return on Average Assets | 0.55% | 1.04% | 1.23% | 1.09% | | Return on Average Common Equity | 3.82% | 6.68% | 8.63% | 6.99% | [Assets and Liabilities](index=2&type=section&id=Assets%20and%20Liabilities) - Total assets increased by **$4.9 billion**, or **24.7%**, to **$25.0 billion** at September 30, 2025, primarily due to the **Enterprise acquisition**[7](index=7&type=chunk) - Deposit balances increased by **$4.4 billion**, or **27.7%**, to **$20.3 billion**, reflecting Enterprise deposits and strong business deposit growth, partially offset by municipal balance reductions[8](index=8&type=chunk) - Total period-end borrowings increased by **$15.9 million** (**2.1%**), largely due to assumed Enterprise borrowings, despite the redemption of **$60.0 million** in subordinated notes and **$50.0 million** of FHLB borrowings[10](index=10&type=chunk) [Loans and Deposits](index=2&type=section&id=Loans%20and%20Deposits) - Loan balances increased by **$3.9 billion**, or **27.0%**, to **$18.5 billion**, mainly from the Enterprise loan portfolio. Organic loan growth was relatively flat overall[8](index=8&type=chunk)[9](index=9&type=chunk) - **Commercial and industrial portfolio** saw strong organic growth of **$148.7 million** (**3.3%**), offset by decreases in commercial real estate and construction[11](index=11&type=chunk) - **Total consumer loan portfolio** grew organically by **$17.8 million** (**0.4%**), with **home equity** increasing by **$20.9 million** (**1.7%**)[11](index=11&type=chunk) - Overall **core deposits** comprised **83.1%** of total deposits at September 30, 2025, up from **82.8%** at June 30, 2025[11](index=11&type=chunk) - The **total cost of deposits** increased **4 basis points** to **1.58%**, driven by the **higher cost of the acquired Enterprise deposit base**[11](index=11&type=chunk) [Securities Portfolio](index=3&type=section&id=Securities%20Portfolio) - The Company's securities portfolio increased by **$629.7 million**, or **23.4%**, to **$3.3 billion**, primarily due to the **acquisition** of Enterprise's available-for-sale securities[10](index=10&type=chunk) - New purchases of **$204.6 million** in the available-for-sale portfolio were partially offset by sales, maturities, calls, and paydowns[12](index=12&type=chunk) [Stockholders' Equity and Capital Ratios](index=3&type=section&id=Stockholders'%20Equity%20and%20Capital%20Ratios) - Stockholders' equity increased by **$472.0 million** (**15.4%**) to September 30, 2025, mainly due to the stock issuance for the **Enterprise acquisition** and strong earnings retention, partially offset by share repurchases[10](index=10&type=chunk) - **Common equity to assets ratio** decreased by **115 basis points** to **14.19%**[14](index=14&type=chunk) - **Tangible common equity to tangible assets ratio** decreased by **115 basis points** to **9.77%**[14](index=14&type=chunk) - **Book value per share** decreased by **$0.89** (**1.2%**) to **$71.24**[14](index=14&type=chunk) - **Tangible book value per share** declined by **$2.17** (**4.4%**) to **$46.63**[14](index=14&type=chunk) [Net Interest Income](index=4&type=section&id=Net%20Interest%20Income) Net interest income increased **37.9%** to **$203.3 million** in Q3 2025, with net interest margin improving **25 basis points** to **3.62%** Net Interest Income & Margin (QoQ Comparison) (Millions of Dollars) | Metric | Q3 2025 (Millions of Dollars) | Q2 2025 (Millions of Dollars) | Change (%) | | :---------------- | :-------- | :-------- | :--------- | | Net Interest Income | $203.3 million | $147.5 million | 37.9% | | Net Interest Margin | 3.62% | 3.37% | +25 bps | - **Net interest margin increase** included an **8 basis point** lift from **acquired loan purchase accounting accretion**[14](index=14&type=chunk) - **Loan yields** increased **21 basis points** to **5.71%**, driven by **higher core yield from Enterprise** and **purchase accounting**[14](index=14&type=chunk) - **Securities yields** increased **52 basis points** to **2.84%** due to **purchase discount accretion and repricing**[14](index=14&type=chunk) - **Overall cost of funding** slightly decreased to **1.72%** despite a **slightly higher cost of deposits**[14](index=14&type=chunk) [Noninterest Income](index=4&type=section&id=Noninterest%20Income) Noninterest income rose **17.8%** to **$40.4 million** in Q3 2025, driven by Enterprise acquisition volume and asset-based revenue Noninterest Income (QoQ Comparison) (Millions of Dollars) | Metric | Q3 2025 (Millions of Dollars) | Q2 2025 (Millions of Dollars) | Change (%) | | :-------------------------- | :-------- | :-------- | :--------- | | Total Noninterest Income | $40.4 million | $34.3 million | 17.8% | | Deposit Account Fees | +$1.7 million | N/A | 23.9% | | Interchange and ATM Fees | +$992,000 | N/A | 19.9% | | Investment and Advisory Income | +$2.3 million | N/A | 20.0% | | Mortgage Banking Income | +$372,000 | N/A | 34.7% | - **Investment and advisory income** benefited from **$1.5 billion** of **Enterprise assets under administration**, increasing **total AUA** by **25.3%** to **$9.2 billion**[14](index=14&type=chunk)[16](index=16&type=chunk) - **Loan level derivative income** rose by **$1.2 million** due to **increased customer demand**[14](index=14&type=chunk) - **No gains on life insurance benefits** were recognized in Q3 2025, compared to **$1.7 million** in Q2 2025[16](index=16&type=chunk) [Noninterest Expense](index=5&type=section&id=Noninterest%20Expense) Noninterest expense increased **47.8%** to **$160.8 million** in Q3 2025, primarily due to merger expenses and expanded operations Noninterest Expense (QoQ Comparison) (Millions of Dollars) | Metric | Q3 2025 (Millions of Dollars) | Q2 2025 (Millions of Dollars) | Change (%) | | :-------------------------- | :-------- | :-------- | :--------- | | Total Noninterest Expense | $160.8 million | $108.8 million | 47.8% | | Merger and Acquisition Expenses | $23.9 million | $2.2 million | 967.13% | | Salaries and Employee Benefits | +$18.3 million | N/A | 29.1% | | Amortization of Intangible Assets | +$6.2 million | N/A | 511.11% | - **Increased workforce base** and **expanded branch network** from the **Enterprise acquisition** led to **higher salaries and occupancy expenses**[17](index=17&type=chunk) - **FDIC assessment** increased by **29.8%** due to an **increased assessment base** from the **acquisition**[17](index=17&type=chunk) - The **majority of merger expenses** related to **change in control**, **severance contracts**, **vendor/systems contract terminations**, and **legal/professional fees**[17](index=17&type=chunk) [Asset Quality](index=5&type=section&id=Asset%20Quality) Asset quality metrics showed increased nonperforming loans and delinquencies in Q3 2025, largely due to the acquired Enterprise loan portfolio Asset Quality Metrics (QoQ Comparison) (Millions of Dollars) | Metric | Sep 30, 2025 (Millions of Dollars) | Jun 30, 2025 (Millions of Dollars) | Change (Millions of Dollars) | | :-------------------------------- | :----------- | :----------- | :----- | | Nonperforming Loans | $86.6 million | $56.2 million | +$30.4 million | | Nonperforming Loans as % of Total Loans | 0.47% | 0.39% | +0.08% | | Delinquencies as % of Total Loans | 0.49% | 0.20% | +0.29% | | Provision for Credit Losses | $38.5 million | $7.2 million | +$31.3 million | | Allowance for Credit Losses on Total Loans | $190.5 million | $144.8 million | +$45.7 million | - Approximately **$24.5 million** of nonperforming loans were from the Enterprise acquired portfolio[17](index=17&type=chunk) - The third quarter provision for credit losses included **$34.5 million** related to non-purchased credit deteriorated loans acquired from Enterprise[21](index=21&type=chunk) Corporate Information [Conference Call Details](index=6&type=section&id=Conference%20Call%20Details) Independent Bank Corp. scheduled a conference call for October 17, 2025, to discuss third-quarter earnings - Conference call to discuss Q3 earnings hosted by CEO Jeffrey Tengel and CFO Mark Ruggiero on October 17, 2025, at 10:00 a.m. ET[18](index=18&type=chunk) - Internet access available at https://INDB.RocklandTrust.com; telephonic access at 1-888-336-7153 (reference: INDB)[18](index=18&type=chunk) [About Independent Bank Corp.](index=6&type=section&id=About%20Independent%20Bank%20Corp.) Independent Bank Corp. is the holding company for Rockland Trust Company, a full-service commercial bank operating across Massachusetts, New Hampshire, and Rhode Island - Independent Bank Corp. (Nasdaq Global Select Market: INDB) is the parent company of Rockland Trust Company[19](index=19&type=chunk) - Rockland Trust Company is a full-service commercial bank with retail branches in Eastern Massachusetts, Worcester County, and Southern New Hampshire, and commercial banking/investment management offices in Massachusetts, New Hampshire, and Rhode Island[19](index=19&type=chunk) [Forward-Looking Statements and Risk Factors](index=6&type=section&id=Forward-Looking%20Statements%20and%20Risk%20Factors) The report includes forward-looking statements, cautioning that actual results may differ due to various economic, industry, and acquisition-related risks - Statements identified by terms like "expect," "achieve," "plan," "believe," "future," "positioned," "continued," "will," "would," "potential," or similar variations are forward-looking[20](index=20&type=chunk) - **Adverse economic conditions** in New England and the Company's market area[22](index=22&type=chunk) - Events impacting the **financial services industry**, including **bank failures** and **competition for deposits**[22](index=22&type=chunk) - Risks related to the **Enterprise acquisition**, such as **integration difficulties**, **higher-than-anticipated fees**, and **inability to achieve expected synergies**[23](index=23&type=chunk) - **Changes in interest rates, laws, regulations, and increased competition**[23](index=23&type=chunk) - **Operational risks related to information technology, cyber threats, and fraud**[23](index=23&type=chunk) - Readers are cautioned not to place **undue reliance on forward-looking statements** and should consider **Risk Factors detailed in the Company's Form 10-K and 10-Q reports**[24](index=24&type=chunk) [Non-GAAP Financial Measures Explanation](index=8&type=section&id=Non-GAAP%20Financial%20Measures%20Explanation) The report uses non-GAAP measures like operating net income to provide insights into core banking business, excluding merger expenses, but not as GAAP substitutes - **Non-GAAP measures** include **operating net income**, **operating EPS**, operating return on average assets, operating return on average common equity, **adjusted net interest margin**, **tangible book value per share**, and the **tangible common equity ratio**[25](index=25&type=chunk) - Management uses these **non-GAAP measures** to assess the strength of the **core banking business**, identify trends, and compare **capital adequacy**, by excluding items like **merger and acquisition expenses** and **significant purchase accounting adjustments**[26](index=26&type=chunk)[27](index=27&type=chunk) - These **non-GAAP measures** are **not substitutes for GAAP results** and may **not be comparable to those presented by other companies**[28](index=28&type=chunk) Appendices: Detailed Financial Data [Consolidated Balance Sheets](index=10&type=section&id=Consolidated%20Balance%20Sheets) Consolidated balance sheets show significant growth in assets, liabilities, and equity from Q2 to Q3 2025, driven by the Enterprise acquisition Consolidated Balance Sheet Highlights (Dollars in thousands) | Metric | Sep 30, 2025 (Thousands of Dollars) | Jun 30, 2025 (Thousands of Dollars) | Sep 30, 2024 (Thousands of Dollars) | % Change (QoQ) | % Change (YoY) | | :-------------------------------- | :----------- | :----------- | :----------- | :------------- | :------------- | | Total Assets | $24,993,239 | $20,048,934 | $19,408,117 | 24.66% | 28.78% | | Total Securities | $3,325,015 | $2,695,280 | $2,765,575 | 23.36% | 20.23% | | Total Loans (Gross) | $18,452,443 | $14,533,828 | $14,360,807 | 26.96% | 28.49% | | Total Deposits | $20,295,869 | $15,893,740 | $15,441,023 | 27.70% | 31.44% | | Total Borrowings | $775,377 | $759,428 | $663,380 | 2.10% | 16.88% | | Total Stockholders' Equity | $3,546,887 | $3,074,856 | $2,977,148 | 15.35% | 19.14% | [Summary of Reclassification of Small Business Loans](index=11&type=section&id=Summary%20of%20Reclassification%20of%20Small%20Business%20Loans) The company reclassified certain small business loans to align with updated definitions, impacting reported balances and yields across periods Reclassification of Small Business Loans (June 30, 2025) (Thousands of Dollars) | Category | Previously Reported (Thousands of Dollars) | Reclassification (Thousands of Dollars) | After Reclassification (Thousands of Dollars) | | :------------------------------------------------------------------------------------------------ | :------------------ | :--------------- | :--------------------- | | Commercial and industrial | $3,215,480 | $211,458 | $3,426,938 | | Commercial real estate | $6,525,438 | $89,085 | $6,614,523 | Reclassification of Small Business Loans (Three Months Ended June 30, 2025) (Thousands of Dollars) | Category | Average Balance (Previously Reported) (Thousands of Dollars) | Interest Earned/Paid (Thousands of Dollars) | Yield/Rate | Average Balance (After Reclassification) (Thousands of Dollars) | Interest Earned/Paid (After Reclassification) (Thousands of Dollars) | Yield/Rate (After Reclassification) | | :------------------------------------------------------------------------------------------------ | :------------------------------------ | :------------------- | :--------- | :--------------------------------------- | :-------------------------------------------- | :---------------------------------- | | Commercial and industrial | $3,156,455 | $47,583 | 6.05% | $3,363,944 | $51,287 | 6.12% | | Commercial real estate | $6,585,559 | $85,871 | 5.23% | $6,672,633 | $87,096 | 5.24% | Reclassification of Small Business Loans (Nine Months Ended September 30, 2024) (Thousands of Dollars) | Category | Average Balance (Previously Reported) (Thousands of Dollars) | Interest Earned/Paid (Thousands of Dollars) | Yield/Rate | Average Balance (After Reclassification) (Thousands of Dollars) | Interest Earned/Paid (After Reclassification) (Thousands of Dollars) | Yield/Rate (After Reclassification) | | :------------------------------------------------------------------------------------------------ | :------------------------------------ | :------------------- | :--------- | :--------------------------------------- | :-------------------------------------------- | :---------------------------------- | | Commercial and industrial | $2,982,147 | $137,099 | 6.14% | $3,166,270 | $146,867 | 6.20% | | Commercial real estate | $6,725,750 | $261,907 | 5.20% | $6,805,910 | $265,161 | 5.20% | [Consolidated Statements of Income](index=11&type=section&id=Consolidated%20Statements%20of%20Income) Consolidated statements of income reflect increased net interest income due to the Enterprise acquisition, but GAAP net income decreased from higher provisions and merger expenses Consolidated Statements of Income (Three Months Ended) (Dollars in thousands) | Metric (Dollars in thousands) | Sep 30, 2025 (Thousands of Dollars) | Jun 30, 2025 (Thousands of Dollars) | Sep 30, 2024 (Thousands of Dollars) | % Change (QoQ) | % Change (YoY) | | :-------------------------------- | :----------- | :----------- | :----------- | :------------- | :------------- | | Total Interest Income | $294,753 | $218,192 | $216,524 | 35.09% | 36.13% | | Total Interest Expense | $91,409 | $70,696 | $74,821 | 29.30% | 22.17% | | Net Interest Income | $203,344 | $147,496 | $141,703 | 37.86% | 43.50% | | Provision for Credit Losses | $38,519 | $7,200 | $19,500 | 434.99% | 97.53% | | Total Noninterest Income | $40,398 | $34,308 | $33,549 | 17.75% | 20.41% | | Total Noninterest Expenses | $160,836 | $108,798 | $100,443 | 47.83% | 60.13% | | Net Income (GAAP) | $34,262 | $51,101 | $42,947 | (32.95)% | (20.22)% | | Operating Net Income (Non-GAAP) | $77,354 | $53,453 | $42,947 | 44.71% | 80.12% | | Diluted EPS (GAAP) | $0.69 | $1.20 | $1.01 | (42.50)% | (31.68)% | | Diluted EPS (Operating, Non-GAAP) | $1.55 | $1.25 | $1.01 | 24.00% | 53.47% | Consolidated Statements of Income (Nine Months Ended) (Dollars in thousands) | Metric (Dollars in thousands) | Sep 30, 2025 (Thousands of Dollars) | Sep 30, 2024 (Thousands of Dollars) | % Change (YoY) | | :-------------------------------- | :----------- | :----------- | :------------- | | Total Interest Income | $724,865 | $636,433 | 13.89% | | Total Interest Expense | $228,520 | $219,365 | 4.17% | | Net Interest Income | $496,345 | $417,068 | 19.01% | | Provision for Credit Losses | $60,719 | $28,750 | 111.20% | | Total Noninterest Income | $107,245 | $95,822 | 11.92% | | Total Noninterest Expenses | $375,512 | $299,944 | 25.19% | | Net Income (GAAP) | $129,787 | $142,047 | (8.63)% | | Operating Net Income (Non-GAAP) | $176,061 | $142,047 | 23.95% | | Diluted EPS (GAAP) | $2.88 | $3.34 | (13.77)% | | Diluted EPS (Operating, Non-GAAP) | $3.91 | $3.34 | 17.07% | [Performance Ratios](index=12&type=section&id=Performance%20Ratios) Performance ratios for Q3 2025 show declining GAAP return metrics due to acquisition costs, while operating metrics demonstrate improved profitability and efficiency Performance Ratios (Three Months Ended) | Metric | Sep 30, 2025 | Jun 30, 2025 | Sep 30, 2024 | | :------------------------------------------------------------------------------------------------ | :----------- | :----------- | :----------- | | Net Interest Margin (FTE) | 3.62% | 3.37% | 3.29% | | Return on Average Assets (GAAP) | 0.55% | 1.04% | 0.88% | | Return on Average Assets (Operating, Non-GAAP) | 1.23% | 1.09% | 0.88% | | Return on Average Common Equity (GAAP) | 3.82% | 6.68% | 5.75% | | Return on Average Common Equity (Operating, Non-GAAP) | 8.63% | 6.99% | 5.75% | | Efficiency Ratio (GAAP) | 65.99% | 59.84% | 57.31% | | Efficiency Ratio (Operating, Non-GAAP) | 56.18% | 58.61% | 57.31% | Performance Ratios (Nine Months Ended) | Metric | Sep 30, 2025 | Sep 30, 2024 | | :------------------------------------------------------------------------------------------------ | :----------- | :----------- | | Net Interest Margin (FTE) | 3.49% | 3.26% | | Return on Average Assets (GAAP) | 0.81% | 0.98% | | Return on Average Assets (Operating, Non-GAAP) | 1.10% | 0.98% | | Return on Average Common Equity (GAAP) | 5.39% | 6.49% | | Return on Average Common Equity (Operating, Non-GAAP) | 7.31% | 6.49% | | Efficiency Ratio (GAAP) | 62.21% | 58.48% | | Efficiency Ratio (Operating, Non-GAAP) | 57.69% | 58.48% | [Asset Quality Details](index=15&type=section&id=Asset%20Quality%20Details) Detailed asset quality metrics show increased nonperforming loans and assets in Q3 2025, primarily due to the Enterprise acquisition Nonperforming Assets At (Dollars in thousands) | Metric | Sep 30, 2025 (Thousands of Dollars) | Jun 30, 2025 (Thousands of Dollars) | Sep 30, 2024 (Thousands of Dollars) | | :-------------------------------- | :----------- | :----------- | :----------- | | Total Nonperforming Loans | $86,597 | $56,217 | $104,248 | | Total Nonperforming Assets | $88,697 | $58,317 | $104,358 | | Nonperforming Loans/Gross Loans | 0.47% | 0.39% | 0.73% | | Nonperforming Assets/Total Assets | 0.35% | 0.29% | 0.54% | | Allowance for Credit Losses/Nonperforming Loans | 219.96% | 257.53% | 157.03% | | Allowance for Credit Losses/Total Loans | 1.03% | 1.00% | 1.14% | | Delinquent Loans/Total Loans | 0.49% | 0.20% | 0.33% | Net Charge-Offs (Recoveries) (Dollars in thousands) | Metric | Q3 2025 (Thousands of Dollars) | Q2 2025 (Thousands of Dollars) | Q3 2024 (Thousands of Dollars) | | :-------------------------------- | :------ | :------ | :------ | | Total Net Charge-Offs | $1,836 | $6,519 | $6,663 | | Net Charge-Offs to Average Loans (annualized) | 0.04% | 0.18% | 0.18% | - Nonperforming assets beginning balance was **$58,317 thousand**, with **$24,487 thousand** from Enterprise nonperforming assets at July 1, 2025[40](index=40&type=chunk) [Balance Sheet and Capital Ratios (Detailed)](index=16&type=section&id=Balance%20Sheet%20and%20Capital%20Ratios%20(Detailed)) Detailed balance sheet and capital ratios show a decrease in key capital ratios from Q2 to Q3 2025, reflecting the Enterprise acquisition's impact Balance Sheet and Capital Ratios | Metric | Sep 30, 2025 | Jun 30, 2025 | Sep 30, 2024 | | :-------------------------------- | :----------- | :----------- | :----------- | | Gross Loans/Total Deposits | 90.92% | 91.44% | 93.00% | | Common Equity Tier 1 Capital Ratio | 12.94% | 14.70% | 14.57% | | Tier 1 Leverage Capital Ratio | 10.15% | 11.44% | 11.22% | | Common Equity to Assets Ratio (GAAP) | 14.19% | 15.34% | 15.34% | | Tangible Common Equity to Tangible Assets Ratio (Non-GAAP) | 9.77% | 10.92% | 10.75% | | Book Value Per Share (GAAP) | $71.24 | $72.13 | $70.08 | | Tangible Book Value Per Share (Non-GAAP) | $46.63 | $48.80 | $46.57 | [Appendix: Supplemental Interest Rate Data](index=17&type=section&id=Appendix%3A%20Supplemental%20Interest%20Rate%20Data) This section details average balances, interest, and yields for assets and liabilities, highlighting the Enterprise acquisition's impact on net interest margin and funding costs Interest-Earning Assets and Liabilities (Three Months Ended Sep 30, 2025) (Thousands of Dollars) | Category | Average Balance (Thousands of Dollars) | Interest Earned/Paid (Thousands of Dollars) | Yield/Rate | | :------------------------------------------ | :-------------- | :------------------- | :--------- | | Interest-earning deposits with banks, federal funds sold, and short term investments | $688,394 | $7,245 | 4.18% | | Total securities | $3,293,344 | $23,566 | 2.84% | | Total loans | $18,432,862 | $265,104 | 5.71% | | **Total interest-earning assets** | **$22,430,232** | **$296,140** | **5.24%** | | Total interest-bearing deposits | $14,549,513 | $80,739 | 2.20% | | Total borrowings | $784,215 | $10,670 | 5.40% | | **Total interest-bearing liabilities** | **$15,333,728** | **$91,409** | **2.37%** | | Net interest income | N/A | $204,731 | N/A | | Interest rate spread | N/A | N/A | 2.87% | | Net interest margin | N/A | N/A | 3.62% | | Cost of total deposits | N/A | N/A | 1.58% | | Cost of total funding liabilities | N/A | N/A | 1.72% | Interest-Earning Assets and Liabilities (Nine Months Ended Sep 30, 2025) (Thousands of Dollars) | Category | Average Balance (Thousands of Dollars) | Interest Earned/Paid (Thousands of Dollars) | Yield/Rate | | :------------------------------------------ | :-------------- | :------------------- | :--------- | | Interest earning deposits with banks, federal funds sold, and short term investments | $413,974 | $13,076 | 4.22% | | Total securities | $2,931,066 | $54,744 | 2.50% | | Total loans | $15,824,867 | $660,288 | 5.58% | | **Total interest-earning assets** | **$19,180,563** | **$728,565** | **5.08%** | | Total interest-bearing deposits | $12,309,201 | $200,018 | 2.17% | | Total borrowings | $737,046 | $28,502 | 5.17% | | **Total interest-bearing liabilities** | **$13,046,247** | **$228,520** | **2.34%** | | Net interest income | N/A | $500,045 | N/A | | Interest rate spread | N/A | N/A | 2.74% | | Net interest margin | N/A | N/A | 3.49% | | Cost of total deposits | N/A | N/A | 1.56% | | Cost of total funding liabilities | N/A | N/A | 1.71% | [Appendix A: Organic Loan and Deposit Growth](index=21&type=section&id=Appendix%20A%3A%20Organic%20Loan%20and%20Deposit%20Growth) Appendix A details organic loan and deposit growth, showing that while the Enterprise acquisition boosted total balances, organic growth was modest Linked Quarter Organic Loan and Deposit Growth (Dollars in thousands) | Category | Sep 30, 2025 (Thousands of Dollars) | Jun 30, 2025 (Thousands of Dollars) | Enterprise Balances Acquired (Thousands of Dollars) | Organic Growth/(Decline) (Thousands of Dollars) | Organic Growth/(Decline)% | | :-------------------------- | :----------- | :----------- | :--------------------------- | :----------------------- | :------------------------ | | Total loans | $18,452,443 | $14,533,828 | $3,913,112 | $5,503 | 0.03% | | Total deposits | $20,295,869 | $15,893,740 | $4,362,710 | $39,419 | 0.19% | | Commercial and industrial loans | $4,667,262 | $3,426,938 | $1,091,649 | $148,675 | 3.29% | | Commercial real estate loans | $8,106,490 | $6,614,523 | $1,629,698 | $(137,731) | (1.67)% | | Noninterest-bearing demand deposits | $5,635,911 | $4,525,907 | $1,040,758 | $69,246 | 1.24% | | Money market deposits | $4,128,400 | $3,368,354 | $815,532 | $(55,486) | (1.33)% | Year-to-Date Organic Loan and Deposit Growth (Dollars in thousands) | Category | Sep 30, 2025 (Thousands of Dollars) | Dec 31, 2024 (Thousands of Dollars) | Enterprise Balances Acquired (Thousands of Dollars) | Organic Growth/(Decline) (Thousands of Dollars) | Organic Growth/(Decline)% | | :-------------------------- | :----------- | :----------- | :--------------------------- | :----------------------- | :------------------------ | | Total loans | $18,452,443 | $14,508,378 | $3,913,112 | $30,953 | 0.17% | | Total deposits | $20,295,869 | $15,305,978 | $4,362,710 | $627,181 | 3.19% | | Commercial and industrial loans | $4,667,262 | $3,246,455 | $1,091,649 | $329,158 | 7.59% | | Commercial real estate loans | $8,106,490 | $6,839,705 | $1,629,698 | $(362,913) | (4.28)% | | Noninterest-bearing demand deposits | $5,635,911 | $4,390,703 | $1,040,758 | $204,450 | 3.76% | | Money market deposits | $4,128,400 | $2,960,381 | $815,532 | $352,487 | 9.34% | [Appendix B: NON-GAAP Reconciliation of Balance Sheet Metrics](index=22&type=section&id=Appendix%20B%3A%20NON-GAAP%20Reconciliation%20of%20Balance%20Sheet%20Metrics) Appendix B reconciles GAAP to non-GAAP tangible balance sheet metrics, highlighting goodwill and intangible asset impact on capital adequacy Non-GAAP Reconciliation of Balance Sheet Metrics (Dollars in thousands, except per share data) | Metric | Sep 30, 2025 (Thousands of Dollars) | Jun 30, 2025 (Thousands of Dollars) | Sep 30, 2024 (Thousands of Dollars) | | :-------------------------------- | :----------- | :----------- | :----------- | | Stockholders' equity (GAAP) | $3,546,887 | $3,074,856 | $2,977,148 | | Less: Goodwill and other intangibles | $1,225,106 | $994,814 | $998,773 | | Tangible common equity (Non-GAAP) | $2,321,781 | $2,080,042 | $1,978,375 | | Assets (GAAP) | $24,993,239 | $20,048,934 | $19,408,116 | | Less: Goodwill and other intangibles | $1,225,106 | $994,814 | $998,773 | | Tangible assets (Non-GAAP) | $23,768,133 | $19,054,120 | $18,409,343 | | Common equity to assets ratio (GAAP) | 14.19% | 15.34% | 15.34% | | Tangible common equity to tangible assets ratio (Non-GAAP) | 9.77% | 10.92% | 10.75% | | Book value per share (GAAP) | $71.24 | $72.13 | $70.08 | | Tangible book value per share (Non-GAAP) | $46.63 | $48.80 | $46.57 | [Appendix C: Non-GAAP Reconciliation of Earnings Metrics](index=23&type=section&id=Appendix%20C%3A%20Non-GAAP%20Reconciliation%20of%20Earnings%20Metrics) Appendix C reconciles GAAP net income to operating net income, adjusting for non-core items like merger expenses, to show underlying operational performance Non-GAAP Reconciliation of Earnings Metrics (Three Months Ended, Dollars in thousands) | Metric | Sep 30, 2025 (Thousands of Dollars) | Jun 30, 2025 (Thousands of Dollars) | Sep 30, 2024 (Thousands of Dollars) | | :-------------------------------- | :----------- | :----------- | :----------- | | Net income (GAAP) | $34,262 | $51,101 | $42,947 | | Provision for non-PCD acquired loans | $34,519 | — | — | | Add - merger and acquisition expenses | $23,893 | $2,239 | — | | Operating net income (Non-GAAP) | $77,354 | $53,453 | $42,947 | | Return on average assets (GAAP) | 0.55% | 1.04% | 0.88% | | Return on average assets on an operating basis (Non-GAAP) | 1.23% | 1.09% | 0.88% | | Efficiency ratio (GAAP) | 65.99% | 59.84% | 57.31% | | Efficiency ratio on an operating basis (Non-GAAP) | 56.18% | 58.61% | 57.31% | Non-GAAP Reconciliation of Earnings Metrics (Nine Months Ended, Dollars in thousands) | Metric | Sep 30, 2025 (Thousands of Dollars) | Sep 30, 2024 (Thousands of Dollars) | | :-------------------------------- | :----------- | :----------- | | Net income (GAAP) | $129,787 | $142,047 | | Provision for non-PCD acquired loans | $34,519 | — | | Add - merger and acquisition expenses | $27,287 | — | | Operating net income (Non-GAAP) | $176,061 | $142,047 | | Return on average assets (GAAP) | 0.81% | 0.98% | | Return on average assets on an operating basis (Non-GAAP) | 1.10% | 0.98% | | Efficiency ratio (GAAP) | 62.21% | 58.48% | | Efficiency ratio on an operating basis (Non-GAAP) | 57.69% | 58.48% | [Appendix D: Net Interest Margin Analysis & Non-GAAP Reconciliation of Adjusted Margin](index=25&type=section&id=Appendix%20D%3A%20Net%20Interest%20Margin%20Analysis%20%26%20Non-GAAP%20Reconciliation%20of%20Adjusted%20Margin) Appendix D analyzes net interest margin and reconciles it to an adjusted non-GAAP margin, highlighting acquisition fair value marks and loan accretion impact Net Interest Margin Analysis & Non-GAAP Reconciliation (Three Months Ended, Dollars in thousands) | Metric | Sep 30, 2025 (Thousands of Dollars) | Jun 30, 2025 (Thousands of Dollars) | | :-------------------------------- | :----------- | :----------- | | Reported total interest earning assets | $22,430,232 | $17,672,302 | | Reported Net Interest Income | $204,731 | $148,672 | | Reported Net Interest Margin | 3.62% | 3.37% | | Loan accretion impact on margin | (0.08)% | — % | | Adjusted margin (Non-GAAP) | 3.54% | 3.37% | - The **adjusted margin** for Q3 2025 was **3.54%**, after accounting for **acquisition fair value marks**, including a negative impact of **0.08%** from **loan accretion**[59](index=59&type=chunk)

Core Insights - Independent Bank Corp. (INDB) is expected to report quarterly earnings of $1.54 per share, reflecting a year-over-year increase of 52.5% [1] - Revenues are anticipated to reach $242.33 million, which is a 38.3% increase from the same quarter last year [1] - There have been no revisions in the consensus EPS estimate over the last 30 days, indicating stability in analysts' forecasts [1] Earnings Estimates - The 'Efficiency Ratio' is projected to be 69.9%, up from 57.3% in the previous year [4] - 'Net interest margin (FTE)' is expected to be 3.6%, compared to 3.3% in the same quarter last year [4] - The 'Average Balance - Total interest-earning assets' is estimated at $22.51 billion, an increase from $17.29 billion year-over-year [4] Income Projections - 'Total Non-Interest Income' is forecasted to be $38.68 million, up from $33.55 million a year ago [5] - 'Net Interest Income' is expected to reach $204.35 million, compared to $141.70 million in the previous year [5] - 'Interchange and ATM fees' are projected at $5.05 million, slightly up from $4.97 million year-over-year [5] Additional Income Metrics - 'Deposit account fees' are estimated at $7.36 million, compared to $6.78 million in the same quarter last year [6] - 'Other noninterest income' is projected to be $11.64 million, up from $6.66 million year-over-year [6] - 'Investment management and advisory' is expected to reach $11.46 million, compared to $11.03 million in the previous year [7] Market Performance - Over the past month, Independent Bank Corp. shares have declined by 8.1%, while the Zacks S&P 500 composite has increased by 0.4% [7] - Based on its Zacks Rank 2 (Buy), INDB is expected to outperform the overall market in the upcoming period [7]

Core Insights - The acquisition of Enterprise Bancorp is expected to be the primary earnings driver for Independent Bank Corp after accounting for one-time merger-related expenses [1] - A planned reduction of the commercial real estate portfolio is also on the horizon, which may impact future earnings [1]

Core Insights - The acquisition of Enterprise Bancorp is expected to be the primary earnings driver for Independent Bank Corp after accounting for one-time merger-related expenses [1] - A planned reduction of the commercial real estate portfolio is also on the horizon, which may impact future earnings [1]

Core Points - Independent Bank Corp. will host its quarterly conference call to discuss third quarter results on October 17, 2025, at 10:00 AM Eastern Time [1] - Telephonic access for the conference call will be available by dialing 888-336-7153 with reference to INDB [1] - Participants have the option to pre-register for the conference call through a provided link, which will generate a unique PIN for access [1]

[PART I. FINANCIAL INFORMATION](index=5&type=section&id=PART%20I.%20FINANCIAL%20INFORMATION) This section presents the unaudited consolidated financial statements and management's financial analysis [Item 1. Financial Statements (unaudited)](index=5&type=section&id=Item%201.%20Financial%20Statements%20(unaudited)) Unaudited consolidated financial statements for Independent Bank Corp., covering balance sheets, income statements, and cash flows, are presented with notes [Consolidated Balance Sheets](index=5&type=section&id=Consolidated%20Balance%20Sheets%20-%20June%2030%2C%202025%20and%20December%2031%2C%202024) This section provides a summary of Independent Bank Corp.'s consolidated balance sheets for June 30, 2025, and December 31, 2024 Consolidated Balance Sheet Highlights (Dollars in thousands) | Item | June 30, 2025 | December 31, 2024 | Change | % Change | | :-------------------------------- | :------------ | :---------------- | :----- | :------- | | **Assets** | | | | | | Cash and due from banks | $219,414 | $187,849 | $31,565 | 16.80% | | Interest-earning deposits with banks | $681,820 | $32,041 | $649,779 | 2027.95% | | Total securities | $2,695,280 | $2,711,349 | $(16,069) | -0.59% | | Total loans | $14,533,828 | $14,508,378 | $25,450 | 0.18% | | Net loans | $14,389,055 | $14,338,394 | $50,661 | 0.35% | | Total assets | $20,048,934 | $19,373,565 | $675,369 | 3.49% | | **Liabilities** | | | | | | Total deposits | $15,893,740 | $15,305,978 | $587,762 | 3.84% | | Total borrowings | $759,428 | $701,374 | $58,054 | 8.28% | | Total liabilities | $16,974,078 | $16,380,445 | $593,633 | 3.62% | | **Stockholders' Equity** | | | | | | Total stockholders' equity | $3,074,856 | $2,993,120 | $81,736 | 2.73% | [Consolidated Statements of Income](index=7&type=section&id=Consolidated%20Statements%20of%20Income%20-%20Three%20and%20six%20months%20ended%20June%2030%2C%202025%20and%202024) This section presents Independent Bank Corp.'s consolidated statements of income for the three and six months ended June 30, 2025 and 2024 Consolidated Statements of Income Highlights (Dollars in thousands, except per share data) | Item | 3 Months Ended June 30, 2025 | 3 Months Ended June 30, 2024 | Change (YoY) | % Change (YoY) | | :-------------------------------- | :--------------------------- | :--------------------------- | :----------- | :------------- | | Total interest and dividend income | $218,192 | $211,864 | $6,328 | 2.99% | | Total interest expense | $70,696 | $73,938 | $(3,242) | -4.38% | | Net interest income | $147,496 | $137,926 | $9,570 | 6.94% | | Provision for credit losses | $7,200 | $4,250 | $2,950 | 69.41% | | Total noninterest income | $34,308 | $32,330 | $1,978 | 6.12% | | Total noninterest expenses | $108,798 | $99,614 | $9,184 | 9.22% | | Net income | $51,101 | $51,330 | $(229) | -0.45% | | Basic earnings per share | $1.20 | $1.21 | $(0.01) | -0.83% | | Diluted earnings per share | $1.20 | $1.21 | $(0.01) | -0.83% | | Cash dividends declared per common share | $0.59 | $0.57 | $0.02 | 3.51% | | Item | 6 Months Ended June 30, 2025 | 6 Months Ended June 30, 2024 | Change (YoY) | % Change (YoY) | | :-------------------------------- | :--------------------------- | :--------------------------- | :----------- | :------------- | | Total interest and dividend income | $430,112 | $419,909 | $10,203 | 2.43% | | Total interest expense | $137,111 | $144,544 | $(7,433) | -5.14% | | Net interest income | $293,001 | $275,365 | $17,636 | 6.40% | | Provision for credit losses | $22,200 | $9,250 | $12,950 | 140.00% | | Total noninterest income | $66,847 | $62,273 | $4,574 | 7.35% | | Total noninterest expenses | $214,676 | $199,501 | $15,175 | 7.61% | | Net income | $95,525 | $99,100 | $(3,575) | -3.61% | | Basic earnings per share | $2.24 | $2.33 | $(0.09) | -3.86% | | Diluted earnings per share | $2.24 | $2.33 | $(0.09) | -3.86% | | Cash dividends declared per common share | $1.18 | $1.14 | $0.04 | 3.51% | [Consolidated Statements of Comprehensive Income](index=8&type=section&id=Consolidated%20Statements%20of%20Comprehensive%20Income%20-Three%20and%20six%20months%20ended%20June%2030%2C%202025%20and%202024) This section details Independent Bank Corp.'s consolidated statements of comprehensive income for the three and six months ended June 30, 2025 and 2024 Consolidated Statements of Comprehensive Income Highlights (Dollars in thousands) | Item | 3 Months Ended June 30, 2025 | 3 Months Ended June 30, 2024 | Change (YoY) | % Change (YoY) | | :------------------------------------------------ | :--------------------------- | :--------------------------- | :----------- | :------------- | | Net income | $51,101 | $51,330 | $(229) | -0.45% | | Net change in fair value of securities available for sale | $9,835 | $3,392 | $6,443 | 189.94% | | Net change in fair value of cash flow hedges | $2,329 | $1,735 | $594 | 34.24% | | Net change in other comprehensive income for defined benefit postretirement plans | $(45) | $(14) | $(31) | 221.43% | | Total other comprehensive income | $12,119 | $5,113 | $7,006 | 137.02% | | Total comprehensive income | $63,220 | $56,443 | $6,777 | 12.01% | | Item | 6 Months Ended June 30, 2025 | 6 Months Ended June 30, 2024 | | :------------------------------------------------ | :--------------------------- | :--------------------------- | | Net income | $95,525 | $99,100 | | Net change in fair value of securities available for sale | $26,229 | $384 | | Net change in fair value of cash flow hedges | $5,785 | $247 | | Net change in other comprehensive income for defined benefit postretirement plans | $(90) | $(29) | | Total other comprehensive income | $31,924 | $602 | | Total comprehensive income | $127,449 | $99,702 | Consolidated Statements of Comprehensive Income Highlights (Dollars in thousands) | Item | 6 Months Ended June 30, 2025 | 6 Months Ended June 30, 2024 | Change (YoY) | % Change (YoY) | | :------------------------------------------------ | :--------------------------- | :--------------------------- | :----------- | :------------- | | Net income | $95,525 | $99,100 | $(3,575) | -3.61% | | Net change in fair value of securities available for sale | $26,229 | $384 | $25,845 | 6729.95% | | Net change in fair value of cash flow hedges | $5,785 | $247 | $5,538 | 2242.11% | | Net change in other comprehensive income for defined benefit postretirement plans | $(90) | $(29) | $(61) | 210.34% | | Total other comprehensive income | $31,924 | $602 | $31,352 | 5208.00% | | Total comprehensive income | $127,449 | $99,702 | $27,774 | 27.86% | [Consolidated Statements of Stockholders' Equity](index=9&type=section&id=Consolidated%20Statements%20of%20Stockholders'%20Equity%20-%20Three%20and%20six%20months%20ended%20June%2030%2C%202025%20and%202024) This section outlines Independent Bank Corp.'s consolidated statements of stockholders' equity for the three and six months ended June 30, 2025 and 2024 Consolidated Statements of Stockholders' Equity Highlights (Dollars in thousands) | Item | Balance June 30, 2025 | Balance December 31, 2024 | Change | % Change | | :------------------------------------ | :-------------------- | :------------------------ | :----- | :------- | | Common stock | $424 | $423 | $1 | 0.24% | | Additional paid in capital | $1,914,556 | $1,909,980 | $4,576 | 0.24% | | Retained earnings | $1,217,959 | $1,172,724 | $45,235 | 3.86% | | Accumulated other comprehensive loss | $(58,083) | $(90,007) | $31,924 | -35.47% | | Total stockholders' equity | $3,074,856 | $2,993,120 | $81,736 | 2.73% | - For the six months ended June 30, 2025, common dividends declared per common share were **$1.18**, an increase from **$1.14** in the prior year period[23](index=23&type=chunk) - Stock based compensation for the same period was **$4,844 thousand**, up from **$3,439 thousand**[23](index=23&type=chunk) [Consolidated Statements of Cash Flows](index=11&type=section&id=Consolidated%20Statements%20of%20Cash%20Flows%20-%20Six%20months%20ended%20June%2030%2C%202025%20and%202024) This section presents Independent Bank Corp.'s consolidated statements of cash flows for the six months ended June 30, 2025 and 2024 Consolidated Statements of Cash Flows Highlights (Dollars in thousands) | Cash Flow Activity | 6 Months Ended June 30, 2025 | 6 Months Ended June 30, 2024 | Change (YoY) | | :------------------------------------ | :--------------------------- | :--------------------------- | :----------- | | Net cash provided by operating activities | $120,061 | $116,794 | $3,267 | | Net cash (used in) provided by investing activities | $(34,593) | $32,037 | $(66,630) | | Net cash provided by (used in) financing activities | $595,876 | $(59,280) | $655,156 | | Net increase in cash and cash equivalents | $681,344 | $89,551 | $591,793 | | Cash and cash equivalents at end of period | $901,234 | $313,881 | $587,353 | [Notes to Consolidated Financial Statements](index=13&type=section&id=Notes%20to%20Consolidated%20Financial%20Statements%20-%20June%2030%2C%202025) This section provides detailed notes explaining the basis of presentation, accounting standards, and specific financial line items [Note 1 - Basis of Presentation](index=13&type=section&id=Note%201%20-%20Basis%20of%20Presentation) This note outlines the basis for preparing Independent Bank Corp.'s unaudited interim consolidated financial statements - **Independent Bank Corp.** is a state-chartered, federally registered bank holding company, with **Rockland Trust Company** as its sole subsidiary[30](index=30&type=chunk) - The financial statements are unaudited, prepared in accordance with **GAAP** for interim information, and include normal recurring adjustments[31](index=31&type=chunk) [Note 2 - Recent Accounting Standards Updates](index=13&type=section&id=Note%202%20-%20Recent%20Accounting%20Standards%20Updates) This note discusses the Company's evaluation of recent accounting standards updates and their expected impact - The Company is evaluating **FASB ASC Subtopic 220-40 (Expense Disaggregation Disclosures)** and **FASB ASC Topic 740 (Income Taxes)** updates, but does not expect their adoption to impact its financial statements[33](index=33&type=chunk)[34](index=34&type=chunk) [Note 3 - Securities](index=13&type=section&id=Note%203%20-%20Securities) This note provides detailed information on the Company's securities portfolio, including fair values and unrealized gains or losses Securities Balances (Dollars in thousands) | Security Type | June 30, 2025 | December 31, 2024 | | :------------------------------------ | :------------ | :---------------- | | Trading securities | $4,801 | $4,245 | | Equity securities | $21,258 | $21,204 | | Available for sale securities | $1,286,318 | $1,250,944 | | Held to maturity securities | $1,382,903 | $1,434,956 | | Total securities | $2,695,280 | $2,711,349 | - Trading and equity securities are primarily held in **rabbi trusts** for employee benefit plans[35](index=35&type=chunk)[36](index=36&type=chunk) - Net gains on equity securities recognized during the six months ended June 30, 2025, were **$169 thousand**, compared to **$502 thousand** in the prior year period[35](index=35&type=chunk)[36](index=36&type=chunk)[37](index=37&type=chunk) Available for Sale Securities Unrealized Losses (Dollars in thousands) | Security Type | June 30, 2025 Gross Unrealized Losses | December 31, 2024 Gross Unrealized Losses | | :------------------------------------ | :------------------------------------ | :------------------------------------ | | U.S. government agency securities | $(13,808) | $(19,792) | | U.S. treasury securities | $(22,797) | $(36,016) | | Agency mortgage-backed securities | $(27,312) | $(37,782) | | Agency collateralized mortgage obligations | $(1,613) | $(2,174) | | State, county, and municipal securities | $(1) | $(3) | | Pooled trust preferred securities | $(82) | $(85) | | Small business administration pooled securities | $(5,644) | $(7,194) | | Total available for sale securities | $(71,257) | $(103,046) | - The Company does not intend to sell available-for-sale securities in an unrealized loss position and does not believe they are credit-impaired, attributing losses to interest rate changes or illiquidity rather than credit quality[39](index=39&type=chunk)[41](index=41&type=chunk)[42](index=42&type=chunk)[44](index=44&type=chunk)[46](index=46&type=chunk) - No sales of AFS or HTM securities occurred in the three and six months ended June 30, 2025 and 2024[39](index=39&type=chunk)[41](index=41&type=chunk)[42](index=42&type=chunk)[44](index=44&type=chunk)[46](index=46&type=chunk) Held to Maturity Securities Unrealized Losses (Dollars in thousands) | Security Type | June 30, 2025 Gross Unrealized Losses | December 31, 2024 Gross Unrealized Losses | | :------------------------------------ | :------------------------------------ | :------------------------------------ | | U.S. treasury securities | $(5,311) | $(7,769) | | Agency mortgage-backed securities | $(45,623) | $(62,198) | | Agency collateralized mortgage obligations | $(53,103) | $(65,143) | | Small business administration pooled securities | $(5,403) | $(8,135) | | Total held to maturity securities | $(109,440) | $(143,245) | [Note 4 - Loans, Allowance for Credit Losses and Credit Quality](index=18&type=section&id=Note%204%20-%20Loans%2C%20Allowance%20for%20Credit%20Losses%20and%20Credit%20Quality) This note details the Company's loan portfolio, allowance for credit losses, and credit quality metrics Allowance for Credit Losses (ACL) Activity (Dollars in thousands) | Item | 3 Months Ended June 30, 2025 | 3 Months Ended June 30, 2024 | | :------------------------------------ | :--------------------------- | :--------------------------- | | Beginning balance | $144,092 | $146,948 | | Charge-offs | $(6,966) | $(808) | | Recoveries | $447 | $469 | | Provision for credit losses | $7,200 | $4,250 | | Ending balance | $144,773 | $150,859 | | Item | 6 Months Ended June 30, 2025 | 6 Months Ended June 30, 2024 | | :------------------------------------ | :--------------------------- | :--------------------------- | | Beginning balance | $169,984 | $142,222 | | Charge-offs | $(48,366) | $(1,689) | | Recoveries | $955 | $1,076 | | Provision for credit losses | $22,200 | $9,250 | | Ending balance | $144,773 | $150,859 | - The allowance for credit losses decreased by **$25.2 million** to **$144.8 million** at June 30, 2025, primarily due to charge-offs on classified commercial loans, partially offset by additional specific reserve allocations[50](index=50&type=chunk) - The Company uses a **10-point credit risk-rating system** for its commercial portfolio and a **pass/default system** for its consumer portfolio, based on days past due[56](index=56&type=chunk)[58](index=58&type=chunk) - For consumer loans, **FICO scores** and **LTV ratios** are also monitored[64](index=64&type=chunk) Weighted Average FICO Scores and LTV Ratios | Portfolio | June 30, 2025 | December 31, 2024 | | :-------------------------- | :------------ | :---------------- | | Residential real estate FICO score | 756 | 755 | | Residential real estate LTV | 56.9% | 57.9% | | Home equity FICO score | 770 | 769 | | Home equity LTV | 43.5% | 43.9% | Nonaccrual Loans (Dollars in thousands) | Loan Category | June 30, 2025 | December 31, 2024 | | :-------------------------- | :------------ | :---------------- | | Commercial and industrial | $13,544 | $14,152 | | Commercial real estate | $28,717 | $74,343 | | Small business | $173 | $302 | | Residential real estate | $10,013 | $10,243 | | Home equity | $3,765 | $2,479 | | Other consumer | $5 | $10 | | Total nonaccrual loans | $56,217 | $101,529 | - Total accrued interest reversed against interest income due to nonaccrual status amounted to **$224 thousand** for the three months ended June 30, 2025, and **$568 thousand** for the six months ended June 30, 2025[70](index=70&type=chunk) Loan Modifications to Borrowers Experiencing Financial Difficulty (Dollars in thousands) | Type of Modification | 3 Months Ended June 30, 2025 Amortized Cost Basis | 6 Months Ended June 30, 2025 Amortized Cost Basis | | :------------------------------------ | :------------------------------------ | :------------------------------------ | | Term Extension | $6,016 | $14,770 | | Other Than Insignificant Payment Delay | $1,036 | $12,038 | | Term Extension and Interest Rate Reduction | $13,337 | $26,371 | | Term Extension and Other Than Insignificant Payment Delay | $22,248 | $22,248 | | Total Outstanding Modified | $42,637 | $75,427 | [Note 5 - Borrowings](index=29&type=section&id=Note%205%20-%20Borrowings) This note provides details on the Company's borrowing activities, including recent subordinated debt issuances - On March 25, 2025, the Company issued **$300.0 million** in fixed-to-floating rate subordinated notes maturing April 1, 2035, with a fixed interest rate of **7.25%** until April 1, 2030[82](index=82&type=chunk) - Proceeds are intended for general corporate purposes, including the redemption of Enterprise Bancorp, Inc.'s subordinated notes[83](index=83&type=chunk) [Note 6 - Stock Based Compensation](index=29&type=section&id=Note%206%20-%20Stock%20Based%20Compensation) This note describes the Company's stock-based compensation plans, including restricted stock awards granted and vested Time-Vested Restricted Stock Awards Granted (6 Months Ended June 30, 2025) | Date | Shares Granted | Grant Date Fair Value Per Share | | :--------- | :------------- | :------------------------------ | | 2/15/2025 | 1,090 | $69.09 | | 2/20/2025 | 113,000 | $68.83 | | 3/15/2025 | 2,600 | $62.84 | | 4/15/2025 | 1,360 | $55.25 | | 5/15/2025 | 1,540 | $65.05 | | 5/20/2025 | 12,194 | $64.03 | | 6/15/2025 | 3,380 | $66.67 | - On February 20, 2025, the Company granted **43,100 performance-based restricted stock awards** to executive-level employees, contingent on performance criteria over a three-year period ending December 31, 2027[85](index=85&type=chunk) - Awards from February 17, 2022, vested at **78% of maximum target shares** on March 19, 2025[86](index=86&type=chunk) [Note 7 - Derivative and Hedging Activities](index=30&type=section&id=Note%207%20Derivative%20and%20Hedging%20Activities) This note explains the Company's use of derivative financial instruments for risk management and customer requirements - The Company uses derivative financial instruments, primarily **interest rate derivatives**, to manage interest rate risk and accommodate customer business requirements, but does not engage in proprietary trading[87](index=87&type=chunk)[88](index=88&type=chunk) - Derivatives are carried at **fair value**[87](index=87&type=chunk)[88](index=88&type=chunk) Derivative Positions (Notional Amount in thousands) | Derivative Type | June 30, 2025 Notional Amount | December 31, 2024 Notional Amount | | :-------------------------- | :------------------------------ | :------------------------------ | | Interest rate swaps on borrowings | $400,000 | $400,000 | | Interest rate swaps on loans | $650,000 | $750,000 | | Interest rate collars on loans | $150,000 | $150,000 | | Total cash flow hedges | $1,200,000 | $1,300,000 | | Loan level swaps (customer related) | $1,708,876 | $1,817,033 | | Foreign exchange contracts (customer related) | $96,253 | $124,276 | | Risk participation agreements (customer related) | $142,782 | $163,121 | - The Company expects approximately **$777 thousand (pre-tax)** to be reclassified as an increase to net interest income and **$7.1 million (pre-tax)** as a decrease to net interest income from other comprehensive income related to cash flow hedges in the next twelve months[93](index=93&type=chunk) Effect of Derivatives on OCI and Current Earnings (Dollars in thousands) | Item | 3 Months Ended June 30, 2025 | 3 Months Ended June 30, 2024 | | :------------------------------------------------ | :--------------------------- | :--------------------------- | | Gain in OCI on derivatives (effective portion), net of tax | $2,329 | $1,735 | | Loss reclassified from OCI into interest income or interest expense (effective portion) | $(2,509) | $(5,030) | | Changes in fair value of customer related positions (net) | $(13) | $(2) | | Changes in fair value of mortgage derivatives | $92 | $237 | | Item | 6 Months Ended June 30, 2025 | 6 Months Ended June 30, 2024 | | :------------------------------------------------ | :--------------------------- | :--------------------------- | | Gain in OCI on derivatives (effective portion), net of tax | $5,785 | $247 | | Loss reclassified from OCI into interest income or interest expense (effective portion) | $(5,179) | $(10,886) | | Changes in fair value of customer related positions (net) | $6 | $(39) | | Changes in fair value of mortgage derivatives | $217 | $368 | [Note 8 - Fair Value Measurements](index=36&type=section&id=Note%208%20-%20Fair%20Value%20Measurements) This note explains the Company's fair value measurements, categorized into a three-level hierarchy based on input observability - Fair value is a market-based measure, prioritized into a **three-level hierarchy**: Level 1 (quoted prices in active markets), Level 2 (observable inputs), and Level 3 (unobservable inputs)[114](index=114&type=chunk)[115](index=115&type=chunk)[116](index=116&type=chunk)[117](index=117&type=chunk] - There were no changes in valuation techniques during the six months ended June 30, 2025[119](index=119&type=chunk) Recurring Fair Value Measurements (Dollars in thousands) | Item | June 30, 2025 Balance | Level 1 | Level 2 | Level 3 | | :------------------------------------ | :-------------------- | :------ | :------ | :------ | | Trading securities | $4,801 | $4,801 | — | — | | Equity securities | $21,258 | $21,258 | — | — | | Securities available for sale | $1,286,318 | — | $1,286,318 | — | | Loans held for sale | $16,792 | — | $16,792 | — | | Derivative instruments (assets) | $74,653 | — | $74,653 | — | | Derivative instruments (liabilities) | $86,126 | — | $86,126 | — | | Total recurring fair value measurements | $1,317,696 | $26,059 | $1,291,637 | — | | Item | December 31, 2024 Balance | Level 1 | Level 2 | Level 3 | | :------------------------------------ | :------------------------ | :------ | :------ | :------ | | Trading securities | $4,245 | $4,245 | — | — | | Equity securities | $21,204 | $21,204 | — | — | | Securities available for sale | $1,250,944 | — | $1,250,944 | — | | Loans held for sale | $7,271 | — | $7,271 | — | | Derivative instruments (assets) | $103,958 | — | $103,958 | — | | Derivative instruments (liabilities) | $123,755 | — | $123,755 | — | | Total recurring fair value measurements | $1,263,867 | $25,449 | $1,238,418 | — | Nonrecurring Fair Value Measurements (Dollars in thousands) | Item | June 30, 2025 Balance | Level 1 | Level 2 | Level 3 | | :------------------------------------ | :-------------------- | :------ | :------ | :------ | | Individually assessed collateral dependent loans | $35,684 | — | — | $35,684 | | Other real estate owned and other foreclosed assets | $2,100 | — | — | $2,100 | | Total nonrecurring fair value measurements | $37,784 | — | — | $37,784 | | Item | December 31, 2024 Balance | Level 1 | Level 2 | Level 3 | | :------------------------------------ | :------------------------ | :------ | :------ | :------ | | Individually assessed collateral dependent loans | $43,766 | — | — | $43,766 | | Total nonrecurring fair value measurements | $43,766 | — | — | $43,766 | [Note 9 - Revenue Recognition](index=43&type=section&id=Note%209%20-%20Revenue%20Recognition) This note outlines the Company's policies for recognizing revenue from contracts with customers in accordance with ASC 606 - The Company recognizes revenue from contracts with customers in accordance with **ASC 606**, applying a five-step model to identify contracts, performance obligations, transaction price, allocation, and recognition timing[142](index=142&type=chunk)[145](index=145&type=chunk) Disaggregated Revenue from Contracts with Customers (Dollars in thousands) | Revenue Stream | 3 Months Ended June 30, 2025 | 3 Months Ended June 30, 2024 | | :------------------------------------ | :--------------------------- | :--------------------------- | | Deposit account fees | $7,141 | $6,332 | | Interchange and ATM fees | $4,991 | $4,251 | | Investment management and advisory | $11,380 | $10,987 | | Payment processing income | $489 | $449 | | Credit card income | $648 | $596 | | Other noninterest income (in-scope ASC 606) | $1,663 | $1,366 | | Total noninterest income in-scope of ASC 606 | $25,812 | $23,981 | | Revenue Stream | 6 Months Ended June 30, 2025 | 6 Months Ended June 30, 2024 | | :------------------------------------ | :--------------------------- | :--------------------------- | | Deposit account fees | $14,194 | $12,560 | | Interchange and ATM fees | $9,606 | $8,204 | | Investment management and advisory | $22,600 | $20,928 | | Payment processing income | $1,049 | $987 | | Credit card income | $1,235 | $1,129 | | Other noninterest income (in-scope ASC 606) | $3,226 | $2,480 | | Total noninterest income in-scope of ASC 606 | $50,910 | $46,288 | - Revenue recognition for deposit account fees, cash management, interchange, and ATM fees is generally concurrent with service provision or transaction completion[144](index=144&type=chunk)[146](index=146&type=chunk)[147](index=147&type=chunk)[149](index=149&type=chunk)[151](index=151&type=chunk)[153](index=153&type=chunk) - Investment management fees are recognized in correlation to monthly management fee determinations or as transactional services are provided[144](index=144&type=chunk)[146](index=146&type=chunk)[147](index=147&type=chunk)[149](index=149&type=chunk)[151](index=151&type=chunk)[153](index=153&type=chunk) - Retail investments and insurance commission revenue is recognized at the point of sale[144](index=144&type=chunk)[146](index=146&type=chunk)[147](index=147&type=chunk)[149](index=149&type=chunk)[151](index=151&type=chunk)[153](index=153&type=chunk) [Note 10 - Other Comprehensive Income (Loss)](index=46&type=section&id=Note%2010%20-%20Other%20Comprehensive%20Income%20(Loss)) This note reconciles the components of other comprehensive income (loss) and accumulated other comprehensive income (loss) Reconciliation of Other Comprehensive Income (Loss) (Dollars in thousands) | Item | 3 Months Ended June 30, 2025 (After Tax) | 3 Months Ended June 30, 2024 (After Tax) | | :------------------------------------------------ | :--------------------------------------- | :--------------------------------------- | | Net change in fair value of securities available for sale | $9,835 | $3,392 | | Net change in fair value of cash flow hedges | $2,329 | $1,735 | | Net change in other comprehensive income for defined benefit postretirement plans | $(45) | $(14) | | Total other comprehensive income | $12,119 | $5,113 | | Item | 6 Months Ended June 30, 2025 (After Tax) | 6 Months Ended June 30, 2024 (After Tax) | | :------------------------------------------------ | :--------------------------------------- | :--------------------------------------- | | Net change in fair value of securities available for sale | $26,229 | $384 | | Net change in fair value of cash flow hedges | $5,785 | $247 | | Net change in other comprehensive income for defined benefit postretirement plans | $(90) | $(29) | | Total other comprehensive income | $31,924 | $602 | Accumulated Other Comprehensive Income (Loss) Components (Dollars in thousands) | Component | June 30, 2025 | June 30, 2024 | | :------------------------------------ | :------------ | :------------ | | Unrealized Gain (Loss) on Securities | $(53,259) | $(95,847) | | Unrealized Gain (Loss) on Cash Flow Hedge | $(8,077) | $(20,328) | | Defined Benefit Postretirement Plans | $3,253 | $1,950 | | Accumulated Other Comprehensive Income (Loss) | $(58,083) | $(114,225) | [Note 11 - Commitments and Contingencies](index=47&type=section&id=Note%2011%20-%20Commitments%20and%20Contingencies) This note outlines the Company's off-balance sheet transactions, commitments, and pending legal matters - The Company engages in off-balance sheet transactions like commitments to extend credit, loan exposures with recourse, and standby letters of credit, which involve credit and interest rate risk[160](index=160&type=chunk)[161](index=161&type=chunk)[162](index=162&type=chunk) - These are subject to credit approval and monitoring[163](index=163&type=chunk) Financial Instruments with Off-Balance Sheet Risk (Dollars in thousands) | Item | June 30, 2025 | December 31, 2024 | | :------------------------------------ | :------------ | :---------------- | | Commitments to extend credit | $4,930,562 | $4,663,314 | | Loan exposures sold with recourse | $135,984 | $141,151 | | Standby letters of credit | $25,487 | $24,863 | | Deferred standby letter of credit fees | $224 | $213 | - A new lease agreement for the Company's headquarters became effective in **Q2 2025**, with the term expected to commence in **H2 2026**[167](index=167&type=chunk) - Pending lawsuits are not expected to have a material adverse effect on the Company's financial position or results of operations[168](index=168&type=chunk) [Note 12 - Segment Information](index=48&type=section&id=Note%2012%20-%20Segment%20Information) This note clarifies that the Company operates as a single reportable segment: community banking - The Company operates as a single reportable segment: **community banking**, providing banking, investment, and financial services[169](index=169&type=chunk) - The Chief Executive Officer and Chief Financial Officer, as **CODMs**, assess performance based on consolidated net income and diluted EPS, emphasizing interest-earning assets and key expenses[170](index=170&type=chunk) [Note 13 - Subsequent Events](index=48&type=section&id=Note%2013%20-%20Subsequent%20Events) This note discloses significant events that occurred after the reporting period, including a major merger - Effective July 1, 2025, the Company completed its merger with **Enterprise Bancorp, Inc.**, adding **27 branch locations**, approximately **$3.9 billion in loans**, and **$4.4 billion in deposits**[171](index=171&type=chunk) - Former Enterprise shareholders received approximately **7.5 million shares** of the Company's common stock and **$25.8 million in cash**[171](index=171&type=chunk) [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=49&type=section&id=Item%202.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) This section analyzes the Company's financial condition and results, including an executive overview, funding, net interest margin, and risk management [Cautionary Statement Regarding Forward-Looking Statements](index=49&type=section&id=Cautionary%20Statement%20Regarding%20Forward-Looking%20Statements) This section advises that the report contains forward-looking statements subject to various risks and uncertainties - The report contains forward-looking statements subject to risks and uncertainties, including adverse economic conditions, financial services industry events, competitive labor markets, political uncertainties, market volatility, and acquisition risks[173](index=173&type=chunk)[174](index=174&type=chunk) - The Company disclaims any obligation to update these statements[175](index=175&type=chunk) [Selected Quarterly Financial Data](index=51&type=section&id=Selected%20Quarterly%20Financial%20Data) This section provides a summary of key financial data for recent quarters, offering a quick overview of performance trends Selected Quarterly Financial Data (Dollars in thousands, except per share data) | Item | June 30, 2025 | March 31, 2025 | December 31, 2024 | September 30, 2024 | June 30, 2024 | | :------------------------------------ | :------------ | :------------- | :---------------- | :----------------- | :------------ | | Total assets | $20,048,934 | $19,888,209 | $19,373,565 | $19,408,117 | $19,411,037 | | Total deposits | $15,893,740 | $15,676,017 | $15,305,978 | $15,441,023 | $15,409,587 | | Total borrowings | $759,428 | $859,874 | $701,374 | $663,380 | $693,386 | | Stockholders' equity | $3,074,856 | $3,033,392 | $2,993,120 | $2,977,148 | $2,919,249 | | Net income | $51,101 | $44,424 | $50,033 | $42,947 | $51,330 | | Diluted earnings per share | $1.20 | $1.04 | $1.18 | $1.01 | $1.21 | | Net interest margin (FTE) | 3.37% | 3.42% | 3.33% | 3.29% | 3.25% | | Nonperforming loans as a percent of gross loans | 0.39% | 0.62% | 0.70% | 0.73% | 0.40% | | Tangible book value per share | $48.80 | $47.81 | $46.96 | $46.57 | $45.19 | [Executive Level Overview](index=53&type=section&id=Executive%20Level%20Overview) This section provides a high-level summary of the Company's financial performance and strategic focus - Management evaluates performance using metrics like net income, EPS, return on assets/equity, net interest margin, and tangible book value per share[180](index=180&type=chunk) - The Company focuses on organic growth and opportunistic acquisitions, including the recent **Enterprise Bancorp merger**[180](index=180&type=chunk) - Net income for **Q2 2025** was **$51.1 million** (**$1.20 diluted EPS**), a slight decrease from **Q2 2024**[181](index=181&type=chunk) - Key drivers included a **steady net interest margin of 3.37%**, robust commercial & industrial loan growth, reduced loan loss provision, **$31.2 million nonperforming asset reduction**, solid deposit growth (**5.6% annualized**), robust capital levels, and a **$150 million share repurchase authorization**[182](index=182&type=chunk) [Interest-Earning Assets](index=54&type=section&id=Interest-Earning%20Assets) This section discusses the Company's interest-earning assets and management's approach to loan pricing and credit underwriting - Total interest-earning assets remained relatively consistent over the past five quarters[183](index=183&type=chunk) - Management maintains a disciplined approach to loan pricing, considering interest rate sensitivity, and credit underwriting to avoid undue credit risk[185](index=185&type=chunk) [Funding and Net Interest Margin](index=55&type=section&id=Funding%20and%20Net%20Interest%20Margin) This section analyzes the Company's funding sources, including deposits and borrowings, and its net interest margin performance - Total funding sources increased in **H1 2025**, driven by **$587.8 million** in robust deposit growth, primarily in core deposit accounts[187](index=187&type=chunk) - Net borrowings increased by **$58.1 million**, reflecting a **$300.0 million subordinated debt raise** partially offset by **$238.0 million in FHLB paydowns**[187](index=187&type=chunk) - The ratio of core deposits to total deposits remained consistent at **82.85%** at June 30, 2025[190](index=190&type=chunk)[286](index=286&type=chunk) - The net interest margin was **3.37%** for **Q2 2025** and **3.40%** for **H1 2025**, representing increases of **12** and **16 basis points**, respectively, compared to the prior year periods[190](index=190&type=chunk)[286](index=286&type=chunk) Net Interest Margin and Cost of Deposits Trends | Quarter Ended | Net Interest Margin (FTE) | Cost of Deposits | | :-------------- | :------------------------ | :--------------- | | June 30, 2025 | 3.37% | 1.54% | | March 31, 2025 | 3.42% | 1.55% | | December 31, 2024 | 3.33% | 1.60% | | September 30, 2024 | 3.29% | 1.63% | | June 30, 2024 | 3.25% | 1.65% | [Noninterest Income](index=57&type=section&id=Noninterest%20Income) This section examines the trends and drivers of the Company's noninterest income, including fees and other revenue sources - Noninterest income increased by **$1.98 million (6.12%)** for the three months ended June 30, 2025, and by **$4.57 million (7.35%)** for the six months ended June 30, 2025, compared to the same prior year periods[303](index=303&type=chunk) - This growth was driven by increases in deposit account fees (overdraft and cash management), interchange and ATM fees (transaction volume), and investment management and advisory income (higher assets under administration)[303](index=303&type=chunk)[304](index=304&type=chunk) - Gains on life insurance benefits also significantly increased to **$1.7 million** in **H1 2025** from **$263 thousand** in **H1 2024**[303](index=303&type=chunk)[304](index=304&type=chunk) [Expense Control](index=59&type=section&id=Expense%20Control) This section discusses management's approach to controlling operating expenses while supporting growth initiatives - Management employs a balanced approach to expense control, monitoring operating expenses while investing in growth initiatives[197](index=197&type=chunk) - Primary expenses include salaries and benefits, and occupancy and equipment costs[197](index=197&type=chunk) Efficiency Ratios | Quarter Ended | Efficiency Ratio (GAAP) | Efficiency Ratio (Non-GAAP Operating Basis) | | :-------------- | :---------------------- | :------------------------------------------ | | June 30, 2025 | 59.84% | 58.61% | | March 31, 2025 | 59.47% | 58.82% | | December 31, 2024 | 60.18% | 59.10% | | September 30, 2024 | 57.31% | 57.31% | | June 30, 2024 | 58.51% | 58.51% | [Capital](index=60&type=section&id=Capital) This section reviews the Company's capital position, including drivers of capital growth and dividend policies - Capital growth is driven by earnings retention, dividends, changes in other comprehensive income, and opportunistic share repurchases[202](index=202&type=chunk) - The Company declared a quarterly cash dividend of **$0.59 per share** for **Q2 2025**, a **3.5% increase** from **Q2 2024**[202](index=202&type=chunk) [Non-GAAP Measures](index=60&type=section&id=Non-GAAP%20Measures) This section provides reconciliations and explanations of non-GAAP financial measures used by management to assess performance - Management uses non-GAAP measures like operating earnings, operating EPS, tangible book value per share, tangible common equity ratio, and return on average tangible common equity to assess core banking business performance, excluding noncore items such as gains/losses on securities sales, merger expenses, and impairment[203](index=203&type=chunk)[204](index=204&type=chunk) Reconciliation of GAAP Net Income to Operating Net Income (Dollars in thousands, except per share data) | Item | 3 Months Ended June 30, 2025 | 3 Months Ended June 30, 2024 | | :------------------------------------ | :--------------------------- | :--------------------------- | | Net income available to common shareholders (GAAP) | $51,101 | $51,330 | | Add: merger and acquisition expenses | $2,239 | — | | Net tax benefit associated with noncore items | $(544) | — | | Adjustment for tax effect of previously incurred merger and acquisition expenses | $657 | — | | Operating net income (Non-GAAP) | $53,453 | $51,330 | | Operating diluted earnings per share (Non-GAAP) | $1.25 | $1.21 | | Item | 6 Months Ended June 30, 2025 | 6 Months Ended June 30, 2024 | | :------------------------------------ | :--------------------------- | :--------------------------- | | Net income available to common shareholders (GAAP) | $95,525 | $99,100 | | Add: merger and acquisition expenses | $3,394 | — | | Net tax benefit associated with noncore items | $(593) | — | | Adjustment for tax effect of previously incurred merger and acquisition expenses | $381 | — | | Operating net income (Non-GAAP) | $98,707 | $99,100 | | Operating diluted earnings per share (Non-GAAP) | $2.32 | $2.33 | Tangible Common Equity and Book Value Reconciliation (Dollars in thousands, except per share data) | Item | June 30, 2025 | March 31, 2025 | December 31, 2024 | September 30, 2024 | June 30, 2024 | | :------------------------------------ | :------------ | :------------- | :---------------- | :----------------- | :------------ | | Stockholders' equity (GAAP) | $3,074,856 | $3,033,392 | $2,993,120 | $2,977,148 | $2,919,249 | | Less: Goodwill and other intangibles | $994,814 | $996,013 | $997,356 | $998,773 | $1,000,233 | | Tangible common equity (Non-GAAP) | $2,080,042 | $2,037,379 | $1,995,764 | $1,978,375 | $1,919,016 | | Assets (GAAP) | $20,048,934 | $19,888,209 | $19,373,565 | $19,408,117 | $19,411,037 | | Less: Goodwill and other intangibles | $994,814 | $996,013 | $997,356 | $998,773 | $1,000,233 | | Tangible assets (Non-GAAP) | $19,054,120 | $18,892,196 | $18,376,209 | $18,409,343 | $18,410,804 | | Tangible common equity to tangible assets ratio (Non-GAAP) | 10.92% | 10.78% | 10.86% | 10.75% | 10.42% | | Tangible book value per share (Non-GAAP) | $48.80 | $47.81 | $46.96 | $46.57 | $45.19 | [Critical Accounting Estimates](index=63&type=section&id=Critical%20Accounting%20Estimates) This section highlights accounting estimates requiring significant management judgment and potential impact on financial results - Critical accounting estimates involve significant management judgments and uncertainties that could materially impact financial results[210](index=210&type=chunk) - No material changes in these estimates occurred during the first six months of 2025[211](index=211&type=chunk) [FINANCIAL POSITION](index=63&type=section&id=FINANCIAL%20POSITION) This section provides an overview of the Company's financial position, including its securities portfolio, loan portfolio, and asset quality [Securities Portfolio](index=63&type=section&id=Securities%20Portfolio) This section details the composition and performance of the Company's securities portfolio - The securities portfolio, primarily **U.S. Treasury and agency securities**, remained consistent at **$2.7 billion** in **H1 2025**[212](index=212&type=chunk) - New purchases and unrealized gains were offset by maturities and paydowns[213](index=213&type=chunk) - Securities represented **13.4%** of total assets at June 30, 2025[213](index=213&type=chunk) [Residential Mortgage Loan Sales](index=64&type=section&id=Residential%20Mortgage%20Loan%20Sales) This section describes the Bank's residential mortgage loan origination and sales activities in the secondary market - The Bank originates residential mortgage loans for sale in the secondary market, retaining or releasing servicing rights[214](index=214&type=chunk) - No material losses related to residential mortgage repurchases were incurred in **Q2** or **H1 2025/2024**[214](index=214&type=chunk) Closed Residential Real Estate Loans (Dollars in thousands) | Item | 3 Months Ended June 30, 2025 | 3 Months Ended June 30, 2024 | | :------------------------------------ | :--------------------------- | :--------------------------- | | Held in portfolio | $87,116 | $56,974 | | Sold or held for sale in secondary market | $58,018 | $64,381 | | Total closed loans | $145,134 | $121,355 | | Item | 6 Months Ended June 30, 2025 | 6 Months Ended June 30, 2024 | | :------------------------------------ | :--------------------------- | :--------------------------- | | Held in portfolio | $132,366 | $87,512 | | Sold or held for sale in secondary market | $96,290 | $110,882 | | Total closed loans | $228,656 | $198,394 | Residential Mortgage Loan Sales (Dollars in thousands) | Item | 3 Months Ended June 30, 2025 | 3 Months Ended June 30, 2024 | | :------------------------------------ | :--------------------------- | :--------------------------- | | Sold with servicing rights released | $49,914 | $56,495 | | Sold with servicing rights retained | $102 | $1,388 | | Total loans sold | $50,016 | $57,883 | | Item | 6 Months Ended June 30, 2025 | 6 Months Ended June 30, 2024 | | :------------------------------------ | :--------------------------- | :--------------------------- | | Sold with servicing rights released | $85,885 | $94,731 | | Sold with servicing rights retained | $1,207 | $4,752 | | Total loans sold | $87,092 | $99,483 | - The mortgage servicing asset balance was **$2.29 million** at June 30, 2025, compared to **$2.57 million** at June 30, 2024[220](index=220&type=chunk) - The principal balance of loans serviced by the Bank for investors was **$271.2 million** at June 30, 2025[221](index=221&type=chunk) [Loan Portfolio](index=65&type=section&id=Loan%20Portfolio) This section provides an overview of the Company's loan portfolio, including growth trends and diversification across segments - The Company's total loan portfolio remained consistent at June 30, 2025, compared to December 31, 2024[222](index=222&type=chunk) - Commercial and industrial loans grew by **$167.8 million (5.5%)**, and small business loans increased by **$18.8 million (6.7%)** in **H1 2025**, offset by a **$231.3 million (3.42%) runoff** in commercial real estate[222](index=222&type=chunk) - The commercial real estate portfolio is diversified across various property types, including nonowner-occupied commercial, retail, office, industrial, and multi-family residential[224](index=224&type=chunk) - The commercial and industrial portfolio is diversified across industry groups, with loans generally secured by business assets and personal guarantees[230](index=230&type=chunk) - The consumer portfolio, comprising residential real estate, home equity, and other consumer loans, totaled **$3.7 billion** at June 30, 2025, showing modest growth in **H1 2025**[222](index=222&type=chunk)[234](index=234&type=chunk) [Asset Quality](index=68&type=section&id=Asset%20Quality) This section details the Company's asset quality, including nonperforming assets, allowance for credit losses, and net charge-offs - The Company actively monitors loan portfolio asset quality, managing delinquencies, classifying nonaccrual loans (generally **90+ days past due**), and modifying loans for borrowers experiencing financial difficulty to minimize losses[236](index=236&type=chunk)[237](index=237&type=chunk)[239](index=239&type=chunk) Nonperforming Assets (Dollars in thousands) | Item | June 30, 2025 | December 31, 2024 | June 30, 2024 | | :------------------------------------ | :------------ | :---------------- | :------------ | | Total nonperforming loans | $56,217 | $101,529 | $57,451 | | Other real estate owned | $2,100 | — | $110 | | Total nonperforming assets | $58,317 | $101,529 | $57,561 | | Nonperforming loans as a percent of gross loans | 0.39% | 0.70% | 0.40% | | Nonperforming assets as a percent of total assets | 0.29% | 0.52% | 0.30% | Activity in Nonperforming Assets (Dollars in thousands) | Item | 3 Months Ended June 30, 2025 | 3 Months Ended June 30, 2024 | | :------------------------------------ | :--------------------------- | :--------------------------- | | Nonperforming assets beginning balance | $89,493 | $57,051 | | New to nonperforming | $13,411 | $6,201 | | Loans charged-off | $(6,966) | $(808) | | Loans paid-off | $(35,977) | $(3,458) | | Loans transferred to OREO | $(2,100) | — | | Loans restored to performing status | $(1,659) | $(1,429) | | Nonperforming assets ending balance | $58,317 | $57,561 | | Item | 6 Months Ended June 30, 2025 | 6 Months Ended June 30, 2024 | | :------------------------------------ | :--------------------------- | :--------------------------- | | Nonperforming assets beginning balance | $101,529 | $54,493 | | New to nonperforming | $55,188 | $25,459 | | Loans charged-off | $(48,366) | $(1,689) | | Loans paid-off | $(46,909) | $(10,440) | | Loans transferred to OREO | $(2,100) | — | | Loans restored to performing status | $(3,015) | $(10,284) | | Nonperforming assets ending balance | $58,317 | $57,561 | - The allowance for credit losses (**ACL**) is estimated using the **CECL methodology**, incorporating a quantitative model adjusted for qualitative factors and a **12-month economic forecast (Moody's Baseline)**[246](index=246&type=chunk)[248](index=248&type=chunk)[249](index=249&type=chunk) - The ACL as a percentage of total loans was **1.00%** at June 30, 2025, down from **1.17%** at December 31, 2024[246](index=246&type=chunk)[248](index=248&type=chunk)[249](index=249&type=chunk)[301](index=301&type=chunk) Summary of Net Charge-Offs/(Recoveries) to Average Loans Outstanding | Loan Category | 3 Months Ended June 30, 2025 Ratio | 6 Months Ended June 30, 2025 Ratio | | :------------------------------------ | :--------------------------------- | :--------------------------------- | | Commercial and industrial | 0.35% | 0.18% | | Commercial real estate | 0.20% | 1.31% | | Commercial construction | —% | —% | | Small business | 0.07% | 0.10% | | Residential real estate | —% | —% | | Home equity | (0.02)% | 0.01% | | Other consumer | 4.79% | 5.93% | | Total | 0.18% | 0.66% | | Loan Category | 3 Months Ended June 30, 2024 Ratio | 6 Months Ended June 30, 2024 Ratio | | :------------------------------------ | :--------------------------------- | :--------------------------------- | | Commercial and industrial | —% | (0.01)% | | Commercial real estate | —% | —% | | Commercial construction | —% | —% | | Small business | 0.07% | 0.09% | | Residential real estate | —% | —% | | Home equity | (0.05)% | (0.05)% | | Other consumer | 5.58% | 5.55% | | Total | 0.01% | 0.01% | - Net charge-offs were **$6.5 million** for **Q2 2025** and **$47.4 million** for **H1 2025**, significantly higher than prior year periods, primarily due to charge-offs on three classified commercial loans in **Q1 2025**[252](index=252&type=chunk) Allocation of Allowance for Credit Losses (Dollars in thousands) | Loan Category | June 30, 2025 Allowance Amount | June 30, 2025 % of Total Allowance | December 31, 2024 Allowance Amount | December 31, 2024 % of Total Allowance | | :------------------------------------ | :------------------------------- | :--------------------------------- | :------------------------------- | :--------------------------------- | | Commercial and industrial | $35,309 | 24.4% | $27,800 | 16.4% | | Commercial real estate | $59,504 | 41.0% | $92,535 | 54.4% | | Commercial construction | $8,183 | 5.7% | $8,166 | 4.8% | | Small business | $4,565 | 3.2% | $4,182 | 2.5% | | Residential real estate | $25,414 | 17.6% | $25,238 | 14.8% | | Home equity | $10,911 | 7.5% | $11,007 | 6.5% | | Other consumer | $887 | 0.6% | $1,056 | 0.6% | | Total | $144,773 | 100.0% | $169,984 | 100.0% | [Federal Home Loan Bank Stock](index=73&type=section&id=Federal%20Home%20Loan%20Bank%20Stock) This section discusses the Company's holdings in Federal Home Loan Bank stock and their purpose - **FHLB stock holdings**, a necessary long-term investment for liquidity, decreased to **$21.1 million** at June 30, 2025, from **$31.6 million** at December 31, 2024, due to paydowns of FHLB term borrowings[258](index=258&type=chunk) [Goodwill and Other Intangible Assets](index=73&type=section&id=Goodwill%20and%20Other%20Intangible%20Assets) This section provides information on the Company's goodwill and other intangible assets, including impairment testing - Goodwill and other intangible assets were **$994.8 million** at June 30, 2025[259](index=259&type=chunk) - The Company performs annual impairment testing in **Q3**, with no impairment indicated as of August 31, 2024, or during **Q2 2025**[260](index=260&type=chunk) [Cash Surrender Value of Life Insurance Policies](index=74&type=section&id=Cash%20Surrender%20Value%20of%20Life%20Insurance%20Policies) This section details the cash surrender value of life insurance policies and related income recognized by the Company - Cash surrender value of life insurance policies was **$305.1 million** at June 30, 2025[261](index=261&type=chunk) - The Company recorded tax-exempt income of **$2.0 million** for **Q2 2025** and **$4.1 million** for **H1 2025**, and gains on life insurance benefits of **$1.7 million** for **H1 2025**[262](index=262&type=chunk)[263](index=263&type=chunk) [Deposits](index=74&type=section&id=Deposits) This section provides an overview of the Company's deposit base, including growth, composition, and cost - Total deposits increased by **$587.8 million (3.8%)** to **$15.9 billion** at June 30, 2025[264](index=264&type=chunk) - Noninterest-bearing demand deposits comprised **28.5%** of total deposits[264](index=264&type=chunk) - The total cost of deposits was **1.54%** for **Q2 2025** and **1.55%** for **H1 2025**[264](index=264&type=chunk) - Core deposits represented **82.8%** of total deposits at June 30, 2025[265](index=265&type=chunk) - Uninsured deposits were estimated at **$5.7 billion** at June 30, 2025, including **$1.1 billion** of collateralized deposits and **$1.1 billion** through the **IntraFi Network**[266](index=266&type=chunk) [Borrowings](index=74&type=section&id=Borrowings) This section details the Company's borrowing activities, including changes in total borrowings and pledged assets - Total borrowings increased by **$58.1 million (8.3%)** to **$759.4 million** at June 30, 2025, driven by a **$300.0 million subordinated debt raise**, partially offset by **$238.0 million in FHLB paydowns**[267](index=267&type=chunk) - **$8.7 billion** of assets were pledged as collateral[268](index=268&type=chunk) [Capital Resources](index=75&type=section&id=Capital%20Resources) This section reviews the Company's capital resources, regulatory capital ratios, and dividend declarations - The Board declared a cash dividend of **$0.59 per share** on June 18, 2025[269](index=269&type=chunk) - The Company and Bank exceeded all minimum regulatory capital requirements at June 30, 2025, including the **capital conservation buffer of 2.5%**[270](index=270&type=chunk)[271](index=271&type=chunk)[275](index=275&type=chunk) Company and Bank's Capital Amounts and Ratios (Dollars in thousands) | Capital Ratio | June 30, 2025 Actual Ratio | Minimum for Capital Adequacy | December 31, 2024 Actual Ratio | Minimum for Capital Adequacy | | :------------------------------------ | :------------------------- | :--------------------------- | :------------------------- | :--------------------------- | | Company Total capital (to risk weighted assets) | 18.08% | ≥ 8.0% | 16.04% | ≥ 8.0% | | Company Common equity tier 1 capital (to risk weighted assets) | 14.70% | ≥ 4.5% | 14.65% | ≥ 4.5% | | Company Tier 1 capital (to risk weighted assets) | 14.70% | ≥ 6.0% | 14.65% | ≥ 6.0% | | Company Tier 1 capital (to average assets) | 11.44% | ≥ 4.0% | 11.32% | ≥ 4.0% | | Bank Total capital (to risk weighted assets) | 16.29% | ≥ 8.0% | 15.43% | ≥ 8.0% | | Bank Common equity tier 1 capital (to risk weighted assets) | 15.35% | ≥ 4.5% | 14.46% | ≥ 4.5% | | Bank Tier 1 capital (to risk weighted assets) | 15.35% | ≥ 6.0% | 14.46% | ≥ 6.0% | | Bank Tier 1 capital (to average assets) | 11.95% | ≥ 4.0% | 11.18% | ≥ 4.0% | [Dividend Restrictions](index=76&type=section&id=Dividend%20Restrictions) This section outlines the regulatory restrictions on dividends paid by the Bank to the Company - The Company relies on dividends from **Rockland Trust Company**, which are subject to federal and state regulatory limits[276](index=276&type=chunk) - Dividends paid by the Bank to the Company totaled **$51.5 million** for **Q2 2025** and **$87.6 million** for **H1 2025**[277](index=277&type=chunk) [Investment Management](index=77&type=section&id=Investment%20Management) This section provides an overview of the Company's investment management services and assets under administration Assets Under Administration (Dollars in thousands) | Item | June 30, 2025 | December 31, 2024 | June 30, 2024 | | :------------------------------------ | :------------ | :---------------- | :------------ | | Assets under administration | $7,360,635 | $7,035,315 | $6,870,636 | | Number of trust, fiduciary and agency accounts | 6,743 | 6,637 | 6,620 | - The **Investment Management Group** provides services to individuals and institutions, generating gross fee revenues of **$10.3 million** for **Q2 2025** and **$20.4 million** for **H1 2025**[280](index=280&type=chunk) - Total assets under administration increased by **7.1%** to **$7.4 billion** at June 30, 2025, compared to June 30, 2024[280](index=280&type=chunk) [RESULTS OF OPERATIONS](index=77&type=section&id=RESULTS%20OF%20OPERATIONS) This section analyzes the Company's financial performance, focusing on net interest income, provision for credit losses, and noninterest income/expense [Net Interest Income](index=77&type=section&id=Net%20Interest%20Income) This section analyzes the Company's net interest income, including drivers of changes in interest income and expense Summary of Results of Operations (Dollars in thousands, except per share data) | Item | 3 Months Ended June 30, 2025 | 3 Months Ended June 30, 2024 | | :------------------------------------ | :--------------------------- | :--------------------------- | | Net income | $51,101 | $51,330 | | Diluted earnings per share | $1.20 | $1.21 | | Return on average assets | 1.04% | 1.07% | | Return on average equity | 6.68% | 7.10% | | Net interest margin | 3.37% | 3.25% | | Item | 6 Months Ended June 30, 2025 | 6 Months Ended June 30, 2024 | | :------------------------------------ | :--------------------------- | :--------------------------- | | Net income | $95,525 | $99,100 | | Diluted earnings per share | $2.24 | $2.33 | | Return on average assets | 0.98% | 1.03% | | Return on average equity | 6.32% | 6.87% | | Net interest margin | 3.40% | 3.24% | - Net interest income on a fully tax equivalent (**FTE**) basis increased by **$9.5 million (6.9%)** for **Q2 2025** and **$17.6 million (6.3%)** for **H1 2025**, driven by higher yields on interest-earning assets and decreased funding costs[286](index=286&type=chunk) - The net interest margin increased by **12 basis points** to **3.37%** for **Q2 2025** and by **16 basis points** to **3.40%** for **H1 2025**[286](index=286&type=chunk) Volume Rate Analysis - Change in Net Interest Income (Dollars in thousands) | Item | 3 Months Ended June 30, 2025 vs 2024 | 6 Months Ended June 30, 2025 vs 2024 | | :------------------------------------ | :----------------------------------- | :----------------------------------- | | Change in income on interest-earning assets | $6,306 | $10,143 | | Change in expense of interest-bearing liabilities | $(3,242) | $(7,433) | | Change in net interest income | $9,548 | $17,576 | [Provision For Credit Losses](index=84&type=section&id=Provision%20For%20Credit%20Losses) This section discusses the Company's provision for credit losses, including the factors influencing its changes - The provision for credit losses increased to **$7.2 million** for **Q2 2025** and **$22.2 million** for **H1 2025**, compared to **$4.3 million** and **$9.3 million** in the prior year periods, primarily due to elevated charge-off activity and additional specific reserves[300](index=300&type=chunk) [Noninterest Income](index=84&type=section&id=Noninterest%20Income_84_302) This section analyzes the components and trends of the Company's noninterest income Noninterest Income (Dollars in thousands) | Item | 3 Months Ended June 30, 2025 | 3 Months Ended June 30, 2024 | Change (YoY) | % Change (YoY) | | :------------------------------------ | :--------------------------- | :--------------------------- | :----------- | :------------- | | Deposit account fees | $7,141 | $6,332 | $809 | 12.78% | | Interchange and ATM fees | $4,997 | $4,753 | $244 | 5.13% | | Investment management and advisory | $11,380 | $10,987 | $393 | 3.58% | | Mortgage banking income | $1,072 | $1,320 | $(248) | -18.79% | | Increase in cash surrender value of life insurance policies | $2,038 | $2,000 | $38 | 1.90% | | Gain on life insurance benefits | $1,650 | — | $1,650 | 100.00% | | Loan level derivative income | $66 | $473 | $(407) | -86.05% | | Other noninterest income | $5,964 | $6,465 | $(501) | -7.75% | | Total | $34,308 | $32,330 | $1,978 | 6.12% | | Item | 6 Months Ended June 30, 2025 | 6 Months Ended June 30, 2024 | | :------------------------------------ | :--------------------------- | :--------------------------- | | Deposit account fees | $14,194 | $12,560 | | Interchange and ATM fees | $9,619 | $9,205 | | Investment management | $22,600 | $20,928 | | Mortgage banking income | $1,813 | $2,116 | | Increase in cash surrender value of life insurance policies | $4,103 | $3,928 | | Gain on life insurance benefits | $1,650 | $263 | | Loan level derivative income | $1,108 | $553 | | Other noninterest income | $11,760 | $12,720 | | Total | $66,847 | $62,273 | Noninterest Income (Dollars in thousands) | Item | 6 Months Ended June 30, 2025 | 6 Months Ended June 30, 2024 | Change (YoY) | % Change (YoY) | | :------------------------------------ | :--------------------------- | :--------------------------- | :----------- | :------------- | | Deposit account fees | $14,194 | $12,560 | $1,634 | 13.01% | | Interchange and ATM fees | $9,619 | $9,205 | $414 | 4.50% | | Investment management | $22,600 | $20,928 | $1,672 | 7.99% | | Mortgage banking income | $1,813 | $2,116 | $(303) | -14.32% | | Increase in cash surrender value of life insurance policies | $4,103 | $3,928 | $175 | 4.46% | | Gain on life insurance benefits | $1,650 | $263 | $1,387 | 527.38% | | Loan level derivative income | $1,108 | $553 | $555 | 100.36% | | Other noninterest income | $11,760 | $12,720 | $(960) | -7.55% | | Total | $66,847 | $62,273 | $4,574 | 7.35% | - Deposit account fees and interchange/ATM fees increased due to higher transaction volumes[303](index=303&type=chunk)[304](index=304&type=chunk) - Investment management income rose with a **7.1% increase** in assets under administration[303](index=303&type=chunk)[304](index=304&type=chunk) - Gains on life insurance benefits significantly increased[303](index=303&type=chunk)[304](index=304&type=chunk) - Other noninterest income decreased due to lower **FHLB dividend income** and commercial loan fees[303](index=303&type=chunk)[304](index=304&type=chunk) [Noninterest Expense](index=86&type=section&id=Noninterest%20Expense_86_305) This section analyzes the components and trends of the Company's noninterest expenses Noninterest Expense (Dollars in thousands) | Item | 3 Months Ended June 30, 2025 | 3 Months Ended June 30, 2024 | Change (YoY) | % Change (YoY) | | :------------------------------------ | :--------------------------- | :--------------------------- | :----------- | :------------- | | Salaries and employee benefits | $62,856 | $57,162 | $5,694 | 9.96% | | Occupancy and equipment expenses | $13,158 | $12,472 | $686 | 5.50% | | Data processing & facilities management | $2,783 | $2,405 | $378 | 15.72% | | Software and subscriptions | $5,166 | $4,475 | $691 | 15.44% | | FDIC assessment | $2,373 | $2,694 | $(321) | -11.92% | | Debit card expense | $1,984 | $1,602 | $382 | 23.85% | | Advertising costs | $1,797 | $1,826 | $(29) | -1.59% | | Amortization of intangible assets | $1,197 | $1,465 | $(268) | -18.29% | | Consulting expense | $1,018 | $1,997 | $(979) | -49.02% | | Merger and acquisition expenses | $2,239 | — | $2,239 | 100.00% | | Other noninterest expenses | $14,227 | $13,516 | $711 | 5.26% | | Total | $108,798 | $99,614 | $9,184 | 9.22% | | Item | 6 Months Ended June 30, 2025 | 6 Months Ended June 30, 2024 | | :------------------------------------ | :--------------------------- | :--------------------------- | | Salaries and employee benefits | $124,787 | $114,336 | | Occupancy and equipment expenses | $27,017 | $25,939 | | Data processing & facilities management | $5,425 | $4,888 | | Software and subscriptions | $10,193 | $8,569 | | FDIC assessment | $5,361 | $5,676 | | Debit card expense | $3,919 | $4,080 | | Advertising expense | $3,242 | $2,986 | | Amortization of intangible assets | $2,541 | $3,028 | | Consulting expense | $2,115 | $3,425 | | Merger and acquisition expenses | $3,394 | — | | Other noninterest expenses | $26,682 | $26,574 | | Total | $214,676 | $199,501 | Noninterest Expense (Dollars in thousands) | Item | 6 Months Ended June 30, 2025 | 6 Months Ended June 30, 2024 | Change (YoY) | % Change (YoY) | | :------------------------------------ | :--------------------------- | :--------------------------- | :----------- | :------------- | | Salaries and employee benefits | $124,787 | $114,336 | $10,451 | 9.14% | | Occupancy and equipment expenses | $27,017 | $25,939 | $1,078 | 4.16% | | Data processing & facilities management | $5,425 | $4,888 | $537 | 10.99% | | Software and subscriptions | $10,193 | $8,569 | $1,624 | 18.95% | | FDIC assessment | $5,361 | $5,676 | $(315) | -5.55% | | Debit card expense | $3,919 | $4,080 | $(161) | -3.95% | | Advertising expense | $3,242 | $2,986 | $256 | 8.57% | | Amortization of intangible assets | $2,541 | $3,02

Core Insights - Independent Bank reported strong Q2 2025 earnings, with non-GAAP EPS of $1.25 exceeding the $1.21 estimate and revenue of $181.8 million surpassing the $178.2 million forecast, indicating improved profitability and asset quality [1][5] - The bank's net income for the quarter was $51.1 million, flat year over year but up 15% from the previous quarter, reflecting operational resilience despite ongoing expense growth [5][11] - Management highlighted challenges related to the recent Enterprise Bancorp acquisition, which may impact future operational efficiency and costs [1][12] Financial Performance - Non-GAAP EPS increased by 3.3% year over year, while revenue rose by 6.7% compared to Q2 2024 [2][5] - Net interest income reached $147.5 million, with a net interest margin of 3.37%, down 5 basis points sequentially [2][7] - Noninterest income grew by 6.1%, driven by increases in card fees and advisory services, while wealth management assets under administration rose to $7.4 billion [2][8] Loan and Deposit Trends - Total outstanding loans increased slightly to $14.5 billion, with C&I loans growing by 6.9% and small business loans up by 11.6%, while commercial real estate loans decreased by 3.3% [6] - Deposits grew to $15.9 billion, with noninterest-bearing demand deposits rising to $4.53 billion, representing 28.5% of total deposits [6] Credit Quality and Risk Management - Nonperforming loans decreased significantly from $89.5 million to $56.2 million, and net charge-offs fell to $6.5 million from $40.9 million in the prior quarter [9] - The provision for credit losses declined to $7.2 million, indicating improved credit quality and management of problem loans [9] Operational Efficiency - The efficiency ratio rose to 59.84%, reflecting increased operating costs, including payroll and professional fees, with expenses growing by 9.2% year over year [2][11] - The bank's tangible book value per share increased by 8% year over year to $48.80, and the Common Equity Tier 1 capital ratio stood at 14.7% [10] Future Outlook - Management expects low single-digit percentage increases in loans and low to mid-single-digit growth for deposits for the full year [13] - Margin pressures may persist due to competitive deposit landscape and elevated expense growth related to mergers and investments [14] - The bank raised its quarterly dividend to $0.55 per share, a 3.8% increase from the previous payment [14]