Core Insights - Independent Bank Corporation reported a net income of $17.5 million, or $0.84 per diluted share, for Q3 2025, an increase from $13.8 million, or $0.65 per diluted share, in the same period last year [1][2]. Financial Performance - Net interest income for Q3 2025 was $45.4 million, up $3.5 million, or 8.4%, year-over-year, and $0.7 million, or 1.7%, from Q2 2025 [3]. - The net interest margin (NIM) was 3.54% in Q3 2025, compared to 3.37% in Q3 2024 and 3.58% in Q2 2025 [3][29]. - Non-interest income totaled $11.9 million in Q3 2025, an increase from $9.5 million in the prior year, primarily due to variances in mortgage banking revenues [4][29]. - Non-interest expenses were $34.1 million in Q3 2025, compared to $32.6 million in the same period last year [8][29]. Asset Quality - Non-performing loans increased to $20.4 million, or 0.48% of total portfolio loans, from $6.0 million, or 0.15%, in the previous year [9]. - The allowance for credit losses stood at 1.49% of total loans, with net charge-offs at historically low levels of four basis points through the first three quarters of 2025 [10][11]. Balance Sheet and Capital - Total assets were $5.49 billion at September 30, 2025, an increase of $155 million from December 31, 2024 [12]. - Total deposits reached $4.86 billion, up $205.1 million from the end of 2024, driven by increases in savings and interest-bearing checking accounts [12]. - Shareholders' equity was $490.7 million, or 8.93% of total assets, compared to $454.7 million, or 8.52%, at the end of 2024 [14]. Shareholder Returns - The company paid a dividend of $0.26 per share on August 15, 2025 [4]. - A share repurchase plan authorized the purchase of up to 1,100,000 shares, with 266,008 shares repurchased for $7.77 million during the nine months ended September 30, 2025 [16].

Core Points - The company reported a net income of $1.68 million for the quarter ended September 30, 2025, which is a 3% increase from the previous quarter but a 12% decrease from the same quarter last year [3][4][41] - The net interest margin improved to 3.00%, up six basis points from the previous quarter and up 16 basis points from the same quarter last year [3][6][41] - Total loans held for investment decreased slightly to $1.04 billion from $1.05 billion at the end of the previous quarter [3][8] - Total deposits were $874.8 million, down 2% from the previous quarter [3][12] Financial Performance - The company’s return on average assets was 0.55%, compared to 0.53% in the previous quarter and 0.61% in the same quarter last year [5][41] - Return on average stockholders' equity was 5.17%, up from 5.01% in the previous quarter but down from 5.78% in the same quarter last year [5][41] - Net interest income increased by $314,000, or 4%, to $8.93 million compared to the same quarter last year, driven by a higher net interest margin [6][41] Loan and Deposit Trends - Interest income on loans receivable increased by $108,000, or 1%, to $13.13 million, primarily due to a higher average loan yield [7][41] - The average yield on loans receivable increased by eight basis points to 5.05% [7][41] - Total loans originated for investment were $29.6 million, a 2% increase from the same quarter last year [8][41] Non-Interest Income and Expenses - Non-interest income decreased by $86,000, or 10%, to $813,000, primarily due to a decline in other non-interest income [20][41] - Non-interest expense increased by $111,000, or 1%, to $7.63 million, mainly due to higher salaries and employee benefits [21][41] - The efficiency ratio improved to 78.35% from 79.08% in the same quarter last year, reflecting higher net interest income [22][41] Tax and Shareholder Returns - The provision for income taxes was $1.05 million, up 34% from the same quarter last year [23][41] - The effective tax rate increased to 38.5% compared to 29.3% in the same quarter last year [24][41] - The company repurchased 66,707 shares at an average cost of $15.75 per share during the quarter [24][41]

Financial Data and Key Metrics Changes - Fully diluted earnings per share were $1.2, a 29% increase year-over-year and a 13% increase from the previous quarter [4] - Net interest margin improved for the sixth consecutive quarter, up seven basis points to 2.46% [5] - Return on common equity improved to 13.6% for the quarter [5] - Net income for the quarter was $53.3 million, an increase of $5.7 million compared to the linked quarter [20] Business Line Data and Key Metrics Changes - Average deposits increased by 7% annualized, while end-of-period loans increased modestly [5] - Consumer loans represented over half of total loans at 57%, amounting to $7.9 billion [12] - Commercial loans totaled $6.1 billion, accounting for 43% of total loans [13] Market Data and Key Metrics Changes - Bank of Hawaii advanced its number one deposit market share position in Hawaii by 40 basis points as of June 30, 2025 [6] - The bank's market share has grown by 600 basis points since 2005, outperforming competitors in Hawaii [6] Company Strategy and Development Direction - The company aims to leverage its dominant market position and brand strength to build wealth market share, particularly in the affluent segment [9][10] - A partnership with Saterra is expected to modernize the broker-dealer platform, enhancing client experience and investment products [10] - The bank is focused on improving coordination between commercial and wealth teams to drive cross-marketing opportunities [11] Management's Comments on Operating Environment and Future Outlook - Management anticipates continued expansion of net interest margin and expects to achieve $250 million by year-end [35] - The outlook for loan growth remains in the low single digits, with expectations for improvement in the fourth quarter [38] - Management is optimistic about the potential for further NIM improvement as Fed funds rates decrease [36] Other Important Information - Non-interest income increased to $46 million during the quarter, driven by higher customer derivative activity and elevated loan fees [25] - The company recorded a provision for credit losses of $2.5 million, down from $3.3 million in the linked quarter [28] - Capital ratios remained above regulatory thresholds, with Tier one capital improving to 14.3% [29] Q&A Session Summary Question: Spot rate on total deposits - The total spot rate on deposits is 154 basis points [33] Question: Timeline for achieving 3% NIM - Management believes a 25 basis point pickup in NIM per year is reasonable, with potential upside from Fed funds rate reductions [36][37] Question: Outlook for loan growth - The guidance for loan growth remains in the low single digits, with expectations for improvement in the pipeline [38] Question: Changes on the wealth side - The partnership with Saterra is in production, aiming to enhance client experience and attract top advisors [44][46] Question: Capital return and buybacks - Management is likely to engage in share repurchases in the current quarter and into next year, given the current capital levels [51][52]

Financial Data and Key Metrics Changes - The company reported a net income of $7.5 million for Q3 2025, representing a 65% increase compared to Q3 2024 [3][8] - The net interest income rose to $28.2 million, driven by a higher balance of average earning assets and a 17 basis point increase in asset yield [8] - The total risk-based capital ratio stood at 16.13%, and the tangible common equity (TCE) ratio was 9.72% [6] Business Line Data and Key Metrics Changes - Total loan originations reached $101 million, with $69 million in fundings, marking the largest amount since Q2 2022 [4] - The company experienced a healthy increase in commercial real estate (CRE) loan demand [4] - Non-interest income saw a decline of $370,000, primarily due to a BOLI death benefit paid in Q2 [10] Market Data and Key Metrics Changes - Total deposits increased due to higher balances from long-time clients and new relationships [5] - The cost of deposits increased by one basis point during Q3, but the spot cost of deposits declined by 4 basis points to finish at 1.25% [8][9] Company Strategy and Development Direction - The company aims to continue improving core financial performance through balance sheet growth, net interest margin expansion, and effective expense management [12] - There is a focus on adding banking talent and enhancing efficiency through technology to support future growth [12] Management's Comments on Operating Environment and Future Outlook - Management noted that while there is economic uncertainty, credit quality continues to improve, and loan demand remains healthy [12] - The loan pipeline is strong, with expectations for solid loan production in Q4 [12] Other Important Information - The board declared a cash dividend of $0.25 per share, marking the 82nd consecutive quarterly dividend [11] - The company repurchased $1.1 million of shares at prices below tangible book value [6] Q&A Session Summary Question: Thoughts on HTM securities loss trade - Management is evaluating various factors but has not made a final decision [18] Question: Updated thoughts on expenses and seasonality - Q4 is expected to resemble Q3, with payroll-related adjustments being a wildcard [19] Question: Deposit cost and margin expectations - The company is positioned for margin expansion with a focus on asset sensitivity and managing deposit costs [22][25] Question: Credit quality improvements and upgrades - Upgrades were due to improved leasing activity and specific project recoveries [27][28] Question: Loan demand and competition - There is increased loan demand, particularly in the Sacramento area, with aggressive pricing competition for high-quality deals [35][36] Question: Pipeline growth and hiring appetite - The pipeline is diverse, with a focus on opportunistic hiring to support growth [60]

Financial Data and Key Metrics Changes - The company reported a net income of $7.5 million for Q3 2025, representing a 65% increase compared to Q3 2024 [3][8] - The net interest income rose to $28.2 million, driven by a higher balance of average earning assets and a 17 basis point increase in asset yield [8] - The total risk-based capital ratio stood at 16.13%, and the tangible common equity (TCE) ratio was 9.72% [6] Business Line Data and Key Metrics Changes - Total loan originations reached $101 million, with $69 million in fundings, marking the largest amount since Q2 2022 [4] - The company experienced a healthy increase in commercial real estate (CRE) loan demand, indicating a diversified mix across various banking categories and industries [4] Market Data and Key Metrics Changes - Total deposits increased due to higher balances from long-time clients and new relationships, despite a competitive rate environment [5] - The cost of deposits increased by one basis point during Q3, but the spot cost of deposits improved, finishing at 1.25% [6][9] Company Strategy and Development Direction - The company aims to continue improving core financial performance through balance sheet growth, net interest margin expansion, and effective expense management [12] - There is a focus on adding banking talent and enhancing efficiency through technology to support future profitable growth [12] Management's Comments on Operating Environment and Future Outlook - Management noted that while there is economic uncertainty, credit quality continues to improve, and loan demand remains healthy [12] - The loan pipeline is strong, with expectations for solid loan production in Q4 2025 [12] Other Important Information - The board declared a cash dividend of $0.25 per share, marking the 82nd consecutive quarterly dividend [11] - The company repurchased $1.1 million of shares at prices below tangible book value to enhance shareholder value [6] Q&A Session Summary Question: Thoughts on HTM securities loss trade - Management is evaluating various factors but has not made a final decision [18] Question: Updated thoughts on expenses and seasonality - Q4 expenses are expected to be similar to Q3, with payroll-related adjustments being a potential wildcard [19] Question: Deposit cost and margin expectations - The company anticipates further margin expansion due to a decline in deposit costs and expects benefits from future Fed Funds rate cuts [22][25] Question: Credit quality upgrades - Upgrades were attributed to improved leasing activity and specific project recoveries, with overall positive trends in credit quality [27][28] Question: Loan demand and competition - There is increased loan demand, particularly in the Sacramento area, with aggressive pricing competition for high-quality deals [35][36] Question: Pipeline growth and hiring appetite - The pipeline is diverse, with a focus on commercial real estate and affordable housing, and there is an appetite for opportunistic hires [58][60]

Financial Data and Key Metrics Changes - The company reported a net income of $7,500,000 for Q3 2025, representing a 65% increase compared to 2024 [4][8] - Net interest income rose to $28,200,000, driven by a higher balance of average earning assets and a 17 basis point increase in asset yield [10] - The total risk-based capital ratio stood at 16.13%, with a tangible common equity (TCE) ratio of 9.72% [6] Business Line Data and Key Metrics Changes - Total loan originations reached $101,000,000, with $69,000,000 in fundings, marking the largest amount since 2022 [5] - The company experienced a healthy increase in commercial real estate (CRE) loan demand, indicating a diversified mix across various banking categories [5][11] Market Data and Key Metrics Changes - Total deposits increased due to higher balances from long-term clients and new relationships, despite a competitive rate environment [6] - The cost of deposits increased by one basis point during the quarter, but the spot cost of deposits declined to 1.25% [10] Company Strategy and Development Direction - The company aims to continue improving core financial performance through balance sheet growth, net interest margin expansion, and disciplined expense management [13][14] - There is a focus on adding banking talent and enhancing efficiency through technology to support future profitable growth [13] Management's Comments on Operating Environment and Future Outlook - Management noted that while there is economic uncertainty, credit quality continues to improve, and loan demand remains healthy [13] - The loan pipeline is strong, with expectations for solid loan production in Q4 2025 [13] Other Important Information - The company repurchased $1,100,000 of shares at prices below tangible book value to enhance shareholder value [6] - A cash dividend of $0.25 per share was declared, marking the 82nd consecutive quarterly dividend [12] Q&A Session Summary Question: Thoughts on HTM securities loss trade - Management is evaluating various factors but has not made a final decision [19] Question: Updated thoughts on expense run rate and seasonality - Q4 is expected to resemble Q3, with potential adjustments to payroll-related items [20][21] Question: Progress on deposit costs and margin expectations - The company is positioned for near-term benefits from rate declines, with expectations for margin expansion [31] Question: Credit upgrades and market conditions - Upgrades were due to improved leasing activity and specific project recoveries, with overall positive trends in credit quality [34][35] Question: Loan competition and pricing - There is aggressive pricing competition for high-quality deals, with a return of nonrecourse lending [46] Question: Pipeline growth and hiring plans - The company is actively hiring and expects increased activity in the Sacramento region, with a focus on new customer relationships [74][75] Question: Deposit growth and seasonality - Predicting deposit balance growth is challenging, but management does not foresee any abnormal outflows [88][90]

Financial Data and Key Metrics Changes - The company reported a core EPS of $1.40, core return on assets of 1.40%, and core return on tangible common equity of 18.7%, all showing improvement compared to the second quarter [3] - Year-over-year, core net income increased by 21%, core PP&R grew by 6%, and core earnings per share rose by 30% [3][4] - Tangible book value per share increased by 12%, and net interest margin expanded by 2 basis points to 3.91% quarter over quarter [4] Business Line Data and Key Metrics Changes - The wealth and trust business grew by 13% year over year, with total client deposits increasing by 1% linked quarter and 5% year over year [5] - Core fee revenue was flat quarter over quarter but grew by 5% when excluding strategic exits in wealth and trust [4] - Loans decreased by 1% linked quarter, primarily due to the sale of the Upstart loan portfolio, but residential mortgage and WSFS-originated consumer loan portfolios saw increases of 5% and 3% respectively [5][6] Market Data and Key Metrics Changes - Non-interest deposits grew by 12% year over year, representing over 30% of total client deposits [5] - The commercial pipeline increased to approximately $300 million, indicating strong demand in both C&I and commercial real estate [7] Company Strategy and Development Direction - The company intends to maintain elevated levels of buybacks while being flexible based on macroeconomic conditions and business performance [8] - Management emphasized a focus on organic growth and potential acquisitions, particularly in the wealth and trust sectors [52] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in asset quality improvements, with total net credit costs decreasing to $8.4 million, down $5.9 million from the prior quarter [7] - The company plans to provide a full-year 2026 outlook in January, indicating a commitment to high performance despite uncertainties in the macro environment [9] Other Important Information - The company returned $56.3 million of capital during the quarter, including $46.8 million in buybacks, representing 1.5% of outstanding shares [8] - The CET1 ratio stands at 14.39%, well above the medium-term target of 12% [8] Q&A Session Summary Question: What is the base case scenario for achieving the CET1 target? - Management indicated that they are currently buying back approximately 100% of net income and have the capacity to continue this for the next two to three years, depending on balance sheet dynamics and growth rates [14][15] Question: How are reserve levels being managed amid macro volatility? - Management noted that while there is capacity to release some reserves, they are maintaining a conservative approach due to potential economic volatility [18] Question: What is the outlook for the wealth and trust business? - The wealth business is seeing growth in new accounts and transactions, with institutional services up 30% and Bryn Mawr Trust up 20% year over year [26][28] Question: How does Cash Connect revenue forecast with changing rates? - Management confirmed that while revenue may decrease with rate cuts, expenses would also reduce, leading to a net profitability benefit [36][37] Question: What is the expected pace of loan payoffs from the consumer partnership? - The company expects a runoff of approximately $15 million to $17 million per month from the Spring EQ portfolio, while home lending is experiencing double-digit growth [42][43]

Financial Data and Key Metrics Changes - The company reported a core EPS of $1.4, a core return on assets of 1.48%, and a core return on tangible common equity of 18.7%, all of which increased compared to the second quarter [5] - Year-over-year, core net income rose by 21%, core PPNR grew by 6%, and core earnings per share increased by 30% [5] - Tangible book value per share increased by 12%, and net interest margin expanded by two basis points to 3.91% quarter over quarter [5][6] Business Line Data and Key Metrics Changes - Core fee revenue was flat quarter over quarter but grew by 5% when excluding the impact of strategic exits in Wealth and Trust [6] - The Wealth and Trust business grew by 13% year over year, with institutional services up 30% and Brimmore Trust of Delaware up 20% [6][32] Market Data and Key Metrics Changes - Total client deposits increased by 1% linked quarter and grew by 5% year over year, with non-interest deposits up 12% year over year [7] - Loans decreased by 1% linked quarter, primarily due to the sale of the Upstart loan portfolio and continued runoff in the Spring EQ portfolio [7] Company Strategy and Development Direction - The company intends to maintain elevated levels of buybacks while adjusting the pace based on macroeconomic conditions and business performance [11] - The management is focused on disciplined originations and proactive engagement with clients to maintain asset quality [24] - The company is exploring talent acquisition in both commercial and wealth businesses to enhance organic growth [66] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in meeting the full-year outlook despite an additional rate cut in October [11] - The company is prepared for potential future rate cuts and has strategies in place to manage margins through deposit repricing and hedging [11][70] Other Important Information - The company returned $56.3 million of capital during the quarter, including $46.8 million in buybacks, representing 1.5% of outstanding shares [10] - Year-to-date, the company has repurchased 5.8% of its outstanding shares, maintaining a strong capital position with a CET1 of 14.39% [11] Q&A Session Summary Question: Achieving CET1 target and organic growth rates - Management indicated that they are currently buying back approximately 100% of net income and have high capital levels despite buybacks, allowing for continued buybacks for the next few years [18] Question: Asset quality and reserve levels - Management noted good momentum in asset quality and indicated a conservative approach to reserves due to macroeconomic volatility [24] Question: Growth in wealth and trust business - Management highlighted growth in new accounts and transactions, particularly in institutional services and Brimmore Trust of Delaware [32] Question: Cash Connect business and NII benefit - Management confirmed that while revenue from Cash Connect may decrease with rate cuts, expenses would offset this, leading to overall profitability benefits [46] Question: Commercial loan growth and consumer partnership payoffs - Management discussed the impact of problem loan payoffs and expected continued growth in the home lending business, offsetting runoff in the Spring EQ portfolio [54]

Financial Data and Key Metrics Changes - The company generated net income of $3.2 million or $0.32 per diluted share in Q3 2025, a 45% increase from the same quarter last year [6] - Tangible book value per share increased by 1.2% this quarter [6] - Gross revenue increased by 8.7% from the prior quarter and 15.5% year-over-year [9] - Net interest income rose for the fourth consecutive quarter, increasing 8.9% from the prior quarter and 25% year-over-year [9][10] - Non-interest income increased by more than $500,000 or 8.5% from the prior quarter [10] Business Line Data and Key Metrics Changes - Loans held for investment increased by $50 million from the end of the prior quarter, with new loan production of $146 million in Q3 [7] - Total deposits increased by $320 million from the end of the prior quarter, driven by new accounts and existing client balance growth [8] - Trust and investment management assets under management decreased by $64 million, primarily due to net withdrawals from low-fee product categories [8] Market Data and Key Metrics Changes - The average rate on new loan production was 6.38% in the quarter [7] - The spot rate on deposits at the end of the quarter was 3.04% [24] - The company achieved a 63% beta on money market accounts in Q3, which is expected to continue into Q4 [25] Company Strategy and Development Direction - The company aims to grow deposits and loans by focusing on superior service rather than competing on pricing [4] - Management is optimistic about opportunities arising from market disruptions due to M&A activity in Colorado [12] - The company is focused on creating operating leverage by growing revenues faster than expenses [43] Management's Comments on Operating Environment and Future Outlook - Management sees healthy economic conditions in their markets and expects strong loan and deposit pipelines to continue into Q4 [12] - There are no indications of meaningful deterioration in asset quality, with stable trends in the loan portfolio [12] - The company anticipates NIM expansion as liquidity is deployed into the loan portfolio [19] Other Important Information - The company has made significant investments in technology and team restructuring to enhance operational efficiency [68] - The efficiency ratio is trending down with operating leverage increasing [70] - The company was named one of the KBW Bank Honor Roll members in 2025 for its performance [70] Q&A Session Summary Question: Insights on deposit growth and mortgage department contributions - Management indicated that the deposit growth is expected to remain stable and provide a higher base for future growth [16] Question: Details on the credit related to the downgraded loan - A specific provision was made for a C&I loan that was downgraded, and management expects it to be resolved over time [17] Question: Expectations for NIM in Q4 - Management anticipates a potential NIM expansion of about five basis points in Q4 [20] Question: Thoughts on the beta for additional Fed rate cuts - The beta has been declining, with a reasonable expectation of around 63% for the fourth quarter [25] Question: Update on wealth management and AUM strategy - The company is focused on fee income growth rather than AUM, with positive progress noted in agency accounts [27] Question: Opportunities from M&A disruptions - Management believes that ongoing market disruptions create opportunities for talent acquisition and client growth [37] Question: Plans for redeploying excess cash - The company expects to continue deploying liquidity into the loan portfolio, with strong loan demand trends anticipated [61]

Financial Data and Key Metrics Changes - The company generated net income of $3.2 million or $0.32 per diluted share in Q3 2025, a 45% increase from the same quarter last year [5] - Tangible book value per share increased by 1.2% this quarter [6] - Gross revenue increased by 8.7% from the prior quarter and 15.5% year over year [9] - Net interest income increased by 8.9% from the prior quarter and 25% year over year [10] - Non-interest income increased by 8.5% from the prior quarter, primarily due to increases in all major fee categories [11] Business Line Data and Key Metrics Changes - Loans held for investment increased by $50 million from the end of the prior quarter, with new loan production of $146 million in Q3 [6][7] - Total deposits increased by $320 million from the end of the prior quarter, driven by new accounts and existing client balances [8] - Trust and investment management assets under management decreased by $64 million, primarily due to net withdrawals in low-fee product categories [9] Market Data and Key Metrics Changes - The average rate on new loan production was 6.38% in the quarter [7] - The spot rate on deposits at the end of the quarter was 3.04% [22] - The company achieved a 63% beta on money market accounts in Q3, which is expected to remain reasonable for Q4 [23] Company Strategy and Development Direction - The company aims to leverage its investments in technology and product teams to drive shareholder value and improve efficiency [66][68] - The focus remains on maintaining a conservative approach to new loan production while expanding deposit relationships [4][5] - The company is optimistic about growth opportunities arising from market disruptions and M&A activity in Colorado [12][35] Management's Comments on Operating Environment and Future Outlook - Management sees healthy economic conditions in their markets and expects continued solid balance sheet growth in Q4 [12][13] - There are no indications of meaningful deterioration in asset quality, with positive trends expected to continue [13] - The company anticipates NIM expansion in Q4 due to liquidity deployment into the loan portfolio [18][19] Other Important Information - The company has been recognized as one of the KBW Bank Honor Roll members in 2025 for its performance [68] - The management team has made significant investments in technology and operational efficiency, which are expected to yield positive results [66][68] Q&A Session Summary Question: Insights on deposit growth and its sustainability - Management indicated that the deposits seen in Q3 are expected to remain and provide a higher deposit base for Q4 [16] Question: Details on the MPA and related provisions - A specific provision was made for a downgraded C&I loan, which management expects to resolve over time [17] Question: Expectations for NIM in Q4 - Management anticipates NIM expansion, potentially achieving around five basis points of improvement [19] Question: Thoughts on deposit pricing and beta - The beta on money market accounts was around 63% in Q3, with expectations for it to decline over time [23] Question: Update on wealth management and AUM - Management is focused on improving fee income and has seen progress in agency accounts despite a decrease in AUM [25] Question: Future growth and balance sheet strategy - Management views the recent deposit influx as part of an ongoing effort to align loan-to-deposit ratios and expects continued growth into 2026 [30][35] Question: Opportunities from M&A disruptions - Management believes that market disruptions create opportunities for talent acquisition and client growth [34][40]