Independent Bank (US:IBCP)2024-08-05 17:51Financial Performance - Net income for Q2 2024 was $18.5 million, up from $14.8 million in Q2 2023, representing a 25% increase [222]. - Year-to-date net income for the first six months of 2024 was $34.5 million, compared to $27.8 million in the same period of 2023, reflecting a 24% increase [222]. - Non-interest income totaled $15,172 thousand in Q2 2024, slightly down from $15,417 thousand in Q2 2023, a decrease of 1.59% [237]. - The company recorded a net loss of $0.3 million on securities AFS for the first six months of 2024, compared to a net loss of $0.2 million in 2023 [242]. - The company recorded a gain of $2.677 million from the exchange of Visa Inc. Class B-1 shares for Class C shares on May 6, 2024 [262]. - Net losses from sales of securities available for sale amounted to $269,000 for the six months ended June 30, 2024 [261]. Interest Income and Assets - Net interest income for Q2 2024 totaled $41.3 million, an increase of $3.0 million or 7.8% from Q2 2023 [224]. - For the first six months of 2024, net interest income was $81.5 million, up $4.8 million or 6.2% from the same period in 2023 [225]. - Average interest-earning assets increased by $130.0 million in Q2 2024 and $171.8 million in the first six months of 2024 compared to the same periods in 2023 [224][225]. - The net interest margin increased by 16 basis points in Q2 2024 and 7 basis points in the first six months of 2024 compared to the same periods in 2023 [226]. - The net interest margin (FTE) for the six months ended June 30, 2024, was 3.35%, compared to 3.28% in the same period of 2023, an improvement of 0.07 percentage points [233]. Credit Quality - The provision for credit losses decreased to $0.76 million in 2024 from $5.48 million in 2023, a reduction of approximately 86.12% [234]. - Non-accrual loans averaged $4.0 million in Q2 2024, slightly up from $3.9 million in Q2 2023 [227]. - Non-performing loans decreased to $4.485 million as of June 30, 2024, from $5.232 million at December 31, 2023, representing 0.12% of total Portfolio Loans [267]. - The allowance for credit losses increased to $56.2 million at June 30, 2024, from $54.7 million at December 31, 2023, equating to 1.46% of total Portfolio Loans [272]. - The ACL related to specific loans increased by $0.8 million primarily due to one commercial loan addition during Q1 2024 [272]. Assets and Liabilities - Total assets increased to $5,191,385 thousand in 2024 from $5,016,748 thousand in 2023, representing a growth of approximately 3.48% [231]. - Total liabilities and shareholders' equity remained stable at $5,191,385 thousand in 2024, consistent with the previous year [231]. - Total loans increased to $3.851 billion as of June 30, 2024, up from $3.791 billion at December 31, 2023, reflecting growth in adjustable-rate mortgage loans and home equity lines of credit [266]. - Total deposits decreased to $4.61 billion at June 30, 2024, from $4.62 billion at December 31, 2023, primarily due to declines in non-interest bearing and brokered time deposits [275]. - Uninsured deposits increased to $978.1 million at June 30, 2024, representing 21.8% of total deposits, compared to $961.9 million and 22.2% at December 31, 2023 [276]. Equity and Dividends - Common shareholders' equity increased to $430.5 million at June 30, 2024, from $404.4 million at December 31, 2023, primarily due to earnings retention [291]. - The tangible common equity (TCE) ratio improved to 7.63% at June 30, 2024, compared to 7.15% at December 31, 2023 [291]. - Quarterly cash dividends on common stock increased to $0.48 per share in the first six months of 2024, up from $0.46 per share in the same period of 2023 [292]. Economic and Market Conditions - The company continues to face economic uncertainty due to global macroeconomic pressures, including inflation and geopolitical events [220]. - Interest rate risk management strategies include the use of derivative financial instruments, with $54.5 million in interest rate swaps executed in the first half of 2024 [279]. - As of June 30, 2024, a 200 basis point rise in interest rates would result in a 12.99% decrease in the value of portfolio equity, bringing it to $521,800 thousand [297]. - Net interest income would decrease by 0.35% to $173,300 thousand under a 200 basis point rise in interest rates [297]. - A 100 basis point decline in interest rates would increase the value of portfolio equity by 4.80% to $628,500 thousand [297]. Compliance and Controls - The company has contingency funding plans in place to address potential liquidity needs arising from adverse changes in financial metrics [284]. - There have been no material changes to critical accounting policies since the last annual report [302]. - The company’s disclosure controls and procedures were evaluated as effective as of June 30, 2024 [306]. - No changes in internal controls over financial reporting materially affected the company during the quarter ended June 30, 2024 [306]. - There have been no material changes to risk factors since the last annual report [308].