INDB - Earnings call transcript Q4 2017

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Operator

Good morning and welcome to the Independent Bank Corp.’s Fourth Quarter 2017 Earnings Call. All participants will be in listen-only mode. [Operator Instructions] After today’s presentation, there will be an opportunity to ask questions. [Operator Instructions] This call may contain forward-looking statements with respect to the financial conditions, results of operations and business of Independent Bank Corp. Actual results may differ. actual Report differ our on release. cause in those earnings may Annual our Form that results include to identified press Factors XX-K and Bank Independent Corp. any any cautions whether statements to events statements relying against future response update upon information, otherwise. you and any unduly in disclaims or intend new forward-looking to publicly forward-looking Please note, recorded. being this event is to I like would Oddleifson. to now turn Chris the conference over ahead. go Please

Chris Oddleifson

joining Brendan, good morning, us for today. and you you, Thank Thank everyone.

new quarter. GAAP our of As XXXX to Chief $X.XX onetime net accompanied Financial the quarter diluted legislation, Business always, We Consumer on write-downs income tax by our Banking. fourth or and I’m per share came and Cozzone, with Rob basis. Officer another Inclusive related Head at closed out in million a in new very the solid of $XX.X

ROE the in the marked including interest the financial consecutive XXXX share, including growth completed. growth of and in of points non-performing of the Excluding per year XX% loans, stellar will $X.XX year, rate deposits. quarterly additional up rose with record per tangible management expenses, basis-point year, XX% just origination prior income $X reached having our that focus year just ongoing efforts the but in X% period steady XX% despite my a margin, has on commercial loan Notwithstanding above absorbing XX% loss deposit -- has operating revenue X that remained key basis in covering today our EPS metrics, continued utilization has core a XX%, net billion was XX% board reached the ROA in robust onetime million the with Rob generated XX on year prior another just an comments to along virtually assets across driven share or disciplined basis $XX.X a rates, I’d quality net total quite for in like over book that operating efficiency quarter once credit comparisons. greater X.X% that declining earnings improvement value an and fifth up growth to acquisition. of nicely the growth below operating in detail, again decline new diluted and an be ratio expense growth last

the the of Rockland Trust forward. with We Beyond We year happy in National XX% the integrated rate our on market. with be Cod accomplished successfully a expanded The was retention numbers, much great marketplace. and Vineyard, Martha’s couldn’t moving household last Bank which reception Edgartown Cape to-date progress franchise local

awareness, Greater generation. making encouraging strides and We’re growth with business coveted in great in brand households market the Boston new

very high priority investment too. is well management Our business growing

added competing under under up We’ve added to origination from year our capacity billion lending grew plus Assets with revenues XX%. to experienced management bankers significant just [ph] institutions, commercial XX% $X.X by last many and operation. breadth

a upgrade We continue banking last experience with online rising users to XX% by expand digital of number offerings mobile our year. and banking the

our elevate sales of of and use efforts. force the our platform maximize customer and sales greater usage making to information marketing We’re

We’re continuing API risk as areas technology, to development. enterprise such invest in security, in management and

ranking to of also sources with recognition England banking with come $XX And the retail for that for by the in [ph] billion advanced readiness third-party satisfaction reaching we size lastly, a variety agile We New for customer significantly the Power. inevitably requirements continue threshold. high J.D. our including garner highest profile

and continue need you hard as and never trust. earning maintaining acknowledge of we must that and to as we preferences underestimate must record presents that to of continually As we pace while financial of the work incredibly rapid remain customer easy how We fully comes win track accomplishments, balance environment invest proud will this our fiscal none our fierce. of changing challenges technology customers’ are performance many discipline. The

continues X.X% task sustaining add GDP employment. success. expansion. our market the to the Massachusetts to required robust to to that environment now pace. The national Act Massachusetts The expected growth, economic and economic as state to and stimulus an the nine up third economy also leading is Jobs benchmarks continue is Tax the confidence cooperate entering Cuts further healthy while consistent levels moderately national at to quarter to growing economic with at all year We’re shows of remains full expected labor bring The economy is index

Improving which We’ll capitalize in continue growth product access modes, the to before, staying we interest -- markets. is And continue quality. focused. service offerings, adding priorities to awareness all continue pricing, funds, employment and of Discipline on from greatest capital experience to and liquidity GDP with real commitment X.X% our we these across relationships benefit resource, cuts The keen expanding in into all continue quarter is constant at economy across level. new opportunities our our to one rate wage national and the for And Massachusetts a many our in stronger measured as and remain growth. unemployment people. work customer and franchise. Year, our was invest new is eye branch the finally, risk, the on rate and our will ones. Heading our on customer even in foremost while configuration, many our to growing the strong service X.X% X.X% initiatives, and continues existing strategic to optimizing the Third level New will invest selectively our security we our cornerstone the of credit, years systems local than we mind, be brand

Boston Trust intrinsically On state. skilled, Xth services colleagues. Top in that Massachusetts ranked in all is one latest tied among year and survey financial two my the Globe across and satisfied score, to consecutive in employers to was success the Work for Places motivated Our included number number and the large Rockland

my form of environment our work family-friendly benefits. lower tax and of Trust our some couldn’t We enhance Rockland our colleagues by sharing rate the the in further savings will be proud colleagues. in We compensation of with corporate

directors acknowledge retired contributions it both Maurice for their our greatly I our best. very I Before value them and me. like That’s Thank Bob? insight turning to and XXXX, over Directors. Bissonnette who to service wish and Board Bill their for of Rob, to in would you. Sullivan

Rob Cozzone

Thank you, morning. Chris. Good

tax the effective The income lowering the January rate XXXX were Company our and respectively. housing detail. from to adjust the $XX.X to tax review and focused per earnings and and of highlighted, for $X.X through share X, As fourth total disciplined press per Those assets XX% which net legislation, tax was corporate in of the resulting adjustments, year I strong the for quarter. those taxes tax financial credit flow Chris by the detailed $X.XX, XX% million fourth just our and results our during are quarter million required and value a our impact quite now determination liabilities, its to performance the in low priorities to on more adjustments investments one-time deferred $X.XX and in the from the reform reflect will quarter of quarter. of income the in Inclusive line and decision-making. release, tax continues increased of share stay

increased X.X% net per of new year were continued per return the full million an and year’s equity to our during Chris XX% share per respectively. drove the execution mentioned, of tangible tangible Company. $X.XX improved fourth was in year and per income book was increase on highs record $XX.X with share up the operating and the Excluding related at fourth operating $X.XX law income operating share earnings tax and value book highs or those of earnings earnings Full $XX.X value On When assets and income also million quarter. and core respectively. adjustments, the share for quarter, XX%, as common operating quarter. tangible strong for $X.XX, $X.XX the compared result write-downs, reached in return X%. has on Thoughtful almost And is net earnings year, XX% net in even prior to profitability. priorities a And basis,

business total accelerated growth third hires or portfolio quarter brought solid by categories are growth Bank. as loans the other the growth effect demand. declines complemented That the The of all X% we tamping traction. Edgartown by estate already in in portfolios particularly C&I robust may X.X% on during the on of acquisition the for by experienced utilization a new with business million. real quarter. experienced year flat And were offset activity. growth commercial X.X% essentially by in quarter and grew gaining be increases having National Consumer commercial anticipated, healthy cumulative including when growth of was new volumes quarter-over-quarter as As were was the strong in as as loan result $XX not a rate

growth the X.X%. the Excluding year was loan acquisition, for organic

within interest deposits basis-point XX of an level low drove the to anticipated was quarter, X of quarter the lower With those in remixing X.X% loan increases the December quarter in strong still likely rebuild. rate the muted with as growth will all fourth as be selective categories. This during pipelines bearing closing of were concentrated customer-driven Deposit XXst along basis cost growth product increase the first volumes a and as points.

funding the However, with XX total a basis quarter. costs, in was point borrowing up only cost of for basis reduction the points a to

Non-interest momentum in fees point expansion higher for in Slight management measured to decreased the X.X% the in X rebound a by result offset loan quarter first deposit net loans. continued As in year. purchase level December. excellent on declines quarter basis Increase adjustments more well derivative in offset funding partially the margin XXXX for and than in income. were fourth X.X% the the accounting should cost as resume during the of of quarter growth the almost fed increase guided, full related quarter interest slightly by investment income by seasonal the X.XX% as fund’s in fourth was Margin was of a un-annualized. as at

the at already quarter strong Assets team appreciation. success. is under new management client for billion group buoyed with client investment record being the within reached $X.X The asset volumes by December in experiencing added the seasoned administration XXst market we year a fourth

to flat fourth benefitted non-interest incentive the anticipated costs a as as the in X% XXXX normalized returned equity due accrual quarter. cap from although in to and to than And more by level for annual strong higher an on additional essentially which in fees other declined ratio asset-based Non-interest the further income elevated workout quarter. was quarter-over-quarter, gain securities. well exchange The the XX.X% category severance expense, quarter, lending efficiency executive were Loan payment. distributions

quality adjusted relationship single lows. for ratios delinquency non-performing described commercial in at and metrics be improved would the previous levels And multi-year quarters, Asset asset again. if

I’ll assumptions growth. and outlook $X.X guidance. on charge-offs support specifically, the basis line the earnings specific experience million of continue loss competitive given our modest our range vein, rate drivers on changes, we but macro now growth expectations expense Additionally, we starting growth. primarily not and XXXX: performance Consistent for in based to provision to XXXX, Loan net a of deposit turn at With practice outcomes generally our varying consistent significant regarding interest share especially and credit rates. with wide anticipate with only X In per needed remains will that was barring quite favorable. points, the recent to following describe with economic

at further colleagues, basis operational to expectations margin non-interest With expected doing single-digit XXXX. XXXX help additional increase tax product expand to full experience non-interest as the net will the a note the for versus that employer, and our retain low important ease Both made in is improve increase recent XX XX interest are in an overall expand maintain customer income business, our by funds It contained expense in top March, by and our us our while rate. serve to coming offerings, include efficiency and and should increase the to to as position and affordable investments mid additional for in years. expense non-interest fed talented of that most year reform service a growth attract the and expected some points enhance

color investments will as more the We provide progresses. on year those

track any foresee in That described the press here our my to for as of pressure, growth. the XX% sustain look expected inevitable. We don’t many back. be progress of a on forward And credit year. gradual the credit normalization to industry to fronts approximately disciplined XXXX All-in-all, is expect comments. concludes near-term tax rate Regarding we at quality, while within we is release, the Chris? continued record

Chris Oddleifson

Brendan. Rob. Thank you,

Q&A. for ready We’re

Operator

right. All Thank you.

We go [Operator first question-and-answer Sandler will comes Mark Fitzgibbon with session. question the now from ahead. O’Neill. begin Our Instructions] Please

Nick Cucharale

Good morning, Nick is filling for gentlemen. This Cucharale in Mark.

an you’re the wanted organic full And dig kind to to for a and full year given first lending utilization, line bit. hires little wanted the how just sense grew loan on you the your guidance, about X.X% your basis, thinking year? So, prospect for just I get of with for into respect the just loan increased XXXX. On that targets to around

Rob Cozzone

Yes.

the trend hopefully suggested I some is acceleration some that in to guidance, those expected leverage from As continue additional hopefully adds in economic an Nick, and growth. leverage general from with new

been that but hope kind neutral. that is why have still be years rate, that guidance single-digit and my we on the yet couple bit of is reform was very clear maybe of a We single-digit low tax be into intense will in continues last more rate. But, which competition to to expand the the little impact mind of

Nick Cucharale

great. Okay,

Chris Oddleifson

in capacity And matter our us not see point mean, the not knowing that sort demand it’s the remember of and the pricing a of parameters. demand matter banking we is, deals. of it’s where fitting area, I with Yes. a our a of of it’s commercial lot credit sort to

exhibit more we could growth simply that. we significantly we just a if don’t decided lot loan and sort credit relax and So, pricing assumptions, of to

constant pricing. and Our disciplined in credit really being is

Nick Cucharale

still your then, for Could balance can incremental billion, us on in billion running $X.X against that the billion up leeway And with before and preparation your great. some $XX at threshold. we update see? have Okay, asset sheet just expense expect to $XX you you

Rob Cozzone

Yes.

in-house that feel been say to validated It our hasn’t we but of by with Y-X to produced, model schedule that just the which that be. good place the is we to populate an FR milestone being reaching first for is anybody, pleased to that quarter schedule actually about able a We’re DFAST. last schedule we good prepared you was fed a need a submit schedule, to

via we is billion as we should well-prepared our will So, we reach acquisition, that threshold, expected ahead, the either for feel that. $XX moving and or like be progress organically

Nick Cucharale

Terrific. And then, I just wanted to

Rob Cozzone

out from over the billion decade, all a to analysts point granular very several Nick, intelligence that out I with $XX benefited it access, lot anticipating, I think both including time, we’ve allowed a billion, used that our of and of now ahead customer analytics. just want the data sort building capability of for dollars we staffing business of us for DFAST

sort ones And of of here hire had with a is do et incremental this for so, consulting the lower much technology it all we at in lot expense information than if and to firms cetera. a

Nick Cucharale

you. rate then, does clarify, include That’s just I to And great your Rob, Thank color. hikes? wanted margin that guidance, any fed future

Rob Cozzone

was a yesterday, March, probability includes XX%. It which of the as essentially

Nick Cucharale

Yes.

internal And Okay. lastly, is generation have then, robust and you retention. your earnings capital strong

the more reform, about how you are capital thinking given of broadly? benefit tax management Just

Rob Cozzone

of you’ll policy. more that a at approved working is in the likely hearing sort in the forward. past through months. we’re that a in look That has dividends the taking the and close now or approved in right that past be the coming going more hear Certainly, we’ll months. be But, not terms is frankly our have Board You’ll sufficient that about coming we of dividend about in increases that in question

Operator

with question go ahead. Our comes Hunsicker Compass next from Point. Laurie Please

Laurie Hunsicker

asset question Just $XX to the go on wanted back preps. Nick’s to billion

have look to you forget What you if If that layer add the to what sort [ph] second, were still in are Durbin a were to dollars? you you incremental of where would for but would expense like versus quantify, currently, in? quantify

Rob Cozzone

been making along we in had What incrementally and way. suggested kind the of Laurie, past, we’ve investments the all Yes. those

maybe more, strip sub kind nothing the scale, would Durbin slightly we number level $X expense if of that assessments. sort estimate investment on million of it out, you being higher side, addition But, impact of but In sort or significant. a to that obviously the the have FDIC of you needed,

Laurie Hunsicker

Sub $X million annually?

Rob Cozzone

Annually.

Chris Oddleifson

Laurie. incremental, That’s

Laurie Hunsicker

that’s right, Incremental, great.

to you on us know I then, And know increase with if core just also help that can you increase appreciate as on related the we’re that? And just last expense little provide more on going to low you expenses, the about to I bit a see on dollar what over appreciate But, Okay. expenses, the -- the dividend. it windfall that don’t color; or gave might that? that I you’re But, mid just if help working just single-digit number think we you non-interest for about you year. could as to exact tax think relates we guidance us us hear

Rob Cozzone

Sure.

a expect We tax reform in kind normal will that our result about growth increase of have would accelerated rate. X% been additional decisions expense what over in growth

Laurie Hunsicker

Okay.

million $X roughly annually? So,

Rob Cozzone

Thereabout [ph]…

Laurie Hunsicker

take? or Give

Rob Cozzone

yes. or Give take,

Laurie Hunsicker

then, And realize loan X%, But to we at line could whatever, go growth back so -- continue be expect X% this growth, C&I that to was to to grow clip? your you okay. loan take, great or I inline, overall annualized Give close growth, guided just C&I your quarter. annually. to this obviously XX% to

Rob Cozzone

of Yes. outsized have mean No, of I our sort a a certainly recall was I aggregate up were know increase addition from utilization closing the clip. dropped They quarter. in not quarter, if utilization. last volumes. quarter. but rates an that X.X% X.X% that this an did strong you last to don’t in quarter, about little bit in We

continue also the C&I to is one up having rest whole a the we move some a the that than success. helping bit, quicker grow would that of a that the But, others to we which individual is not to did of So us And same success, book. book on lot market helps corporate significantly. growth banking new he certainly should is commercial have and expect and hires, hire of little bring

Laurie Hunsicker

am -- sorry. Okay. Was there anything I

Rob Cozzone

the sort saw though. just was we rate in at quarter the fourth not saying of I

Laurie Hunsicker

at look it? Okay. we’re anything quarter, this there And to was purchased or going in

Rob Cozzone

some, deals. characterize We as we -- club do might you those are doing

for least states. our at was England And about in syndication true in there quarter I ended think at balances. through the production borrowers New quarter one $XXX million put in total deal, local in process number the portfolio fully our club which we the Our credit the

Laurie Hunsicker

just, Do last deal was? you question. how Okay. then, sorry, know And that club big

Rob Cozzone

you at we we in transaction if $XX often get largest overall, that, look will because typically $XX If we our million. range participate down the a deal participate larger than the million it’s down and times it

it’ll this $XX -- was I So, I referenced one the that believe million in Laurie. quarter range, maybe

Laurie Hunsicker

Okay.

Chris Oddleifson

one. am not that on certain XXX% I

Laurie Hunsicker

Chris $XX Piper give back just could Matt a a Can We to almost “Hey! at billion Okay, growing, sit thinking question. And this us a ago rewinds billion you how but okay. stated you asked bank.” year just you about out had Great. you that, can potentially And from just and we quite from point a your not your currency then are had year some thoughts you last how to when on a $XX the M&A about landscape, us as you strong, give are is viewing refresh that color? become

Chris Oddleifson

two into and I think, as the right. can how -- -- All solid doing that a that building really you’ve I’ll we and demonstrated, have by board say are organic growth, very picked steady. platform pieces, organically we slow would we’re we I break on across hopefully grow focused

sort can’t the -- couple On the of done have acquisition while future, there no, acquisition will the And side, have I we into years don’t have exactly trend every of I XX -- historically is hope that I so see last continue. for years. or

And been additional we’d -- total they year banks are or to nationally, there of every in should hand, stock-based are area to their are If them. banks has you mean, are the X% clip our M&A raise that love or and talk banks I X% are the merged. look acquired

the the and a and perspective, it’s from of sort course colleagues you’re matter future, considering their all is what thinking so of shareholders think, best the constituents, communities on. thinking a of and about I for when it’s matter

the don’t M&A for I can -- we I to But So, would environment think to out that that is banks. in good one thing, is XX or lot last sort we tomorrow the is of or track think us is acquisition. right very of forward. the will mean, figure sort player. there partner I hope change one assumptions to shape require are -- that a to environment, record urgency get way, a be banking and with to I will form things And performance past our say, other as how now. of continue XX go

Laurie Hunsicker

right Sure. And largest one the then, just assets? is what deal in Thanks. here question, would last you doing consider

Chris Oddleifson

flexible Yes. that. Largest, mean, on we’re I really

I If -- track that than important advantage important rather the describe we have of forward. and is is performance me and think, combined be building continue record in the and historically, the a about able straight this and combined deals is a around the really think and way been -- size, pretty that work outstanding what most just thing where we’ll competitive sort place most let our us, entity place to to of -- outstanding to that. develop size to bank that’s been when

go mean, something the are culture, that the et that thought combined to a As certainly say approach, lot combined ensure first a to I banks building entity’s much deals to get acquisitions, I that we’re needs there that’s cetera bigger, class leadership operating franchise. past our the have we just consider, bigger than into of but

Operator

next Our Pipar from Jaffray. go ahead. Please comes with Breese Matthew question

Matthew Breese

guys. Good morning

Chris Oddleifson

Hey, Matt.

Matthew Breese

a in for segment. and on a I just sense what’s I market for for book growth to in in competitive to underlying going that conditions your the get hone sense estate wanted just wanted real that to commercial on just better and and then outlook wanted in the get segment

Rob Cozzone

the I mean, growth you I that several guidance aggregate expected really provided years, look kind the concentrated if in the it sure. is book trends. growth, of as been be of at commercial the for for to portfolio, terms has within long-term Yes, will,

aggregate commercial grower. slower likely book, to as is just be book. than heard from commercial And, at you in C&I rate commentary, the the So, fastest the estate we grow consumer the real expect book to a within

a materially, pretty to no very is don’t are of described there history. good partly In has any landscape, changed loans. is I feeling what high the any terms and Chris And credit are on competitive mean, because level just of seem be to issues currently still of banks thing intensity of that’s the horizon. at sort the relative competition the

on And when the for at focused inwardly issues. are so, that we most opportunities clip. that’s and see not we to what happen, And tend really sufficient get not cycle focused But can And is a through creates those go that’s to all. inwardly they credit who banks generating but grow case are distracted. healthy capital, right a now, they continue at nobody

deals lots So, as we’re stated, Chris and a those but each least of at are deals lots seeing handful of banks. also being by seen other of

Matthew Breese

Okay. would on That’s reform, yet. an also happen? secondly, discussion that a And of if then, where your I helpful. thoughts any of then, not this on tax you’re economic is what happen? around that. wanted could you And that’s wanted for expansion there away. to eventually of expect the And seeing there And And tax Whether has get how that reform. lot computed assessment, accurate or a signs to discussion get a around lot to very been gets sense I to

Rob Cozzone

of Yes. weeks us in the it your of terms interesting point provide I will direction with very to on forward. that executed aside say items couple it’s question, the see. from anything kind folks would some of of early, Matt. last we former And And year latter, be on specifically in to can’t that obviously, would housekeeping going sufficient year-end

constrained. them increase will, deposit the to especially give many where is pricing, I in that liquidity freedom the show maybe pricing, up northeast are deposit the think more area This may aggressively. in banks it

keeping on close when on are a Other we already you is loan from areas, so, capital perspective. eye And that. it tight look very a very at return pricing

may terms expect spread there too deposit on wouldn’t movement it of I but side. much we So, see the in to compression, see

Matthew Breese

it. Got

Okay. There My jobs wanted markets of into your and just do one moving and think picture your Eastern a some the big sense Massachusetts could potentially economy. local what again for question. Amazon new you backyard. to that the type talk XX,XXX last more get of been has of

Chris Oddleifson

to period my we -- that very which cap cetera. roads XX,XXX, really investment will our Massachusetts a would legislation which Amazon. and I get lot versus housing peak if as realize, growth. of housing over that along assessment that Amazon, right certainly which three lastly, in on be, for may certainly actually mean be comments, my city, level also that a in housing. the very do now, this fuel that without that of affordable affordable really would you recall I need of think go some to our fuel that’s it’s water will were With high be And in in XX,XXX have economy That -- -- all The a progress growing Governor our be say think more, growth. would growth. would I encourage to rate affordable able -- would will I’m I is there And if I us. mentioned and lot et and we’d a suburbs, proposed, years, the of of mean, active come has is growth. very robustly required, improvement growth affordable we in And good some and have a economy do that I market next hill that the in why housing, well to fuel people to fairies the just subsidized transit, would infrastructure additional made Amazon housing, have even a it, housing we the for maintain we to make

XX,XXX headquarters state. workers skilled should next the it bring our exciting decade will think into and their be Amazon I highly very

Operator

[Operator KBW. Collyn Instructions] Our from comes question Please with Gilbert next go ahead.

Collyn Gilbert

a was the you’re Chris, thoughts it on wealth business. thinking Obviously, maybe about -- if that’s business, you year. could I give us how this year management good [ph] your mean you just had

and ‘XX single-digit you ‘XX? we of if in throughout in the see as ‘XX, generating and we revenue a trending do time, guys ‘XX range business back improved think look growth and obviously ‘XX longer look How you double-digit from mid out ‘XX, of I range were ‘XX. over period sort this

Chris Oddleifson

sort up that I -- let So, me say a of back bit. would little

of bank. years we minute figuring began history, business investment XXXX; we we’ve trust really a as into current So, were is do I to mean, our in [ph] how professionals founded been bring a Company. ago, we a journey in XX since you give this our

So, we’ve our and combined commercial in customer couple and the banking. sort in environment we your of industry industry retail in -- expertise have relationships with

typical result, more had to a in a as originated -- much new note, when size. we smashed the we’ve been were past a a $X.X we’ve is a years back a greater business investment firm And we sort in or assets XX journey. As that in of lot any just XXXX, terms originate we And billion. able had of began this our records -- our of ago typical new over than origination. business interesting than We bank total

it a very first fun the done was think that. we’ve I So, it’s time milestone,

relationships have growth customers. very Our primarily right driven the now retail is commercial by we with and

and new officers. things customer who things, have from a done that whether us gives business don’t up help is it A a we lot the B, momentum expand, our two which end, on of of slowing this large non-banking year, they things, are a advantage. people And of rate, that we and will the of I -- of is ever seen the see acquisition, And of X% do that our do talk expand [indiscernible] of focused say forward our sort financial revenue they sell we firms of get These we we relationship about opportunity XX unique referrals anticipate build large business. a lot not business following bigger really run of size have the that to bit a two grow. Because -- one a that sort of into have how business. and that we of say, built is more And expand momentum, lack business model geography, lastly, we non-customer, more in is referrals source best lot to you’ve -- customer that bank. steady a A, into bringing bank. under branches, development they new get all we’ve -- opportunity a not capacity; lenders, growth have sort as sort XXX% reduction about result we denominator XX% to are that us in going going would So, is I the than to, of

about billion in ultimately to at That this. any number there. $XX have were good to very we $X.X billion. certainly, when out just But forecast, official not get a that darn of David background So, of probably if is growth, opportunity. our is that billion driving we maybe you aspiration $X.X throws he jump is we’re runs actually wondering we mine, has $X to growing nice is who if even a thing, fellow investment him seemed I he years revenue XX% management want to X% now will is know similar at head up at the business, the a if Collyn, ago, And Smith, pretty and and getting but… to or a we about billion, and lot our a am clip. to And are wealth business, which there’s think and acquisition what excited an management now,

Collyn Gilbert

that’s No, helpful.

Chris Oddleifson

love talking it. soapboxes. about my I of one It’s

Collyn Gilbert

as guys coming That’s is Well, the where door getting the are you new from? the seeing this great business business color. like, in and referrals and coming

Chris Oddleifson

it’s Well, banking retail split and our evenly network our pretty commercial branch division. between

Collyn Gilbert

-- they accounts is they are firms, mean, -- or are had I well, of they types wealth investment accounts who -- if at it… prior to -- prior what other like --

Chris Oddleifson

That…

Collyn Gilbert

or…? from …coming or banks other

Chris Oddleifson

have a with people who of of think of of a sell it’s that, relationships I businesses. sort all we lot their plus combination course

as So, they event. And this well. source liquidity wealth a of have is

Collyn Gilbert

okay. That’s All helpful. Okay, right.

Chris Oddleifson

And a number strategy can -- for help. know decades are and who CE got are a people they have customers we of big banking those

Collyn Gilbert

Okay.

just to I is some it’s fair it -- characterize of from growth segment? unbanked the mean, this the So, in

Chris Oddleifson

The uninvested…

Collyn Gilbert

Yes.

Chris Oddleifson

Yes, think I would say Yes, so. that’s I fair.

Collyn Gilbert

And of talked year, for Chris, sort the you Okay. your comments, just coming then, initiatives in opening about years.

on things you look? little expected how -- the a your an for update configurations thinking are was year mentioned a One to of bit configurations. about branch little give Can branches us you this are you those how bit and of just of update

Chris Oddleifson

more can one wealth Sure. management. If about I say thing

Collyn Gilbert

Just are one, Chris, you sure?

Chris Oddleifson

we also that but we’re of banking we a are for background sort all has planning, some has we banking how hesitate that tax management seeing strategic capabilities only our to have have banking someone on is and about we together wealth we have components management helpful but hiring plus and wealth the made capabilities. approaches that call are to one this wealth who those a planning, management think commercial that products of XXXX Because beginning that and upgrade our is overall wealth our full private better of a dimensions. commercial think and also prep, bring financial our not tax will expertise management really we in investments sort integrated the have is And that we I so service.

make of So, we our we’re more do robust. offering to sort looking how

Okay.

years I has question about years of is to the incremental $XX the that’s management. bank Difficulty] over been been So, [Technical last a will we for the XX wealth is the those On exception. involved year sort an one, done configuration, a open all XX billion last this of and management. in I’ve talk And this brand closes know no have number interesting

looking So, of that is transformed with building more of mean we and branches, transform I We’ve conversations think we by configuration, also more branch a branch and that staff towards a closed more much -- oriented, branches. opportunities. couple we couple one traditional and to different rooms better What have transformed is role POD banker, in relocated looking much more and the branches. bit from a oriented actual for these a a we important conversations, the of even about little staff universal relationships

very couple this interesting a year. happening things have We

wealth so. our but not commercial management nearby relocating Hyannis and branch the will We’re to branch that a only include

in of we’re We’re a in Newton new [Ph] opening west. a So combo. a sort merge branch that’s of closing branch relo, a and bit little

in sort additional that as of sort Now, me the a branch previous think also we calls, financial of final will I network a to not historical the branches, on place data optimization. think much more optimal only more lot with data have we of lot brings a call to but be format completion district a market, I’ve how we our on and my potentially a branch at places merge potentially branches location technology. shared performance, is looking And sort of that some about invested are smaller nearing capability point. And uptick where on that what using we

fewer have network prognostication design of And the happens what the will industry, be are next branch is exactly is which sort what there network, branch. of lot The on, but also branches, happens, we’re the a well, and exactly strategic but automated think hires best years, actually To network a then for capability. the what live any going transaction terms the market. higher see, out so And plays those to in to a enormous a trust. in not XXXX. don’t we branches I so, we to banker you -- a and of a years how are technologies being testing there person that but tellers, to for see that would all branch trying the only our had of will XX operate And level of is ATMs, XX mean branch in some is tested, the that and are next and on branch over level for and with where our is advantage configuration that’s either those more think they success. the screen, in My at of also And be [indiscernible] what central it and course, recyclers about so of example we that a video that cash you live person; expensive summarize, see contemplating a us location.

have attributable in is extraordinary or cost of where of the deposits we directly the and XX% network staff a we to those have We branches. our have core deposits that funds that

not So, better. trivial -- is we’re this is it’s a and this -- I various formats we’re we that a approaches can how testing question saying, very question, do see oh that to and we’re something carefully mean considering

Collyn Gilbert

end Okay. One simple That’s two stand then, just great. That’s of fourth And pipeline the the is, did quick the where quarter? commercial very at questions. hopefully helpful. somewhat

Rob Cozzone

million Just shy million quarter. versus end $XX of third at of $XXX the about the

Collyn Gilbert

growth why why that’s because And to that a will saying you quarter got you’re in the bit rebuild first little Okay. be pipeline? slower

Rob Cozzone

Exactly.

Collyn Gilbert

Okay. severance bit think had items then, on this than Rob, what sorry, saw this you anticipated. higher I some what quarter were What anticipated, in also mentioned, quarter? me, had of just those onetime the you payments, OpEx you than a I should little I fourth in -- your higher And certainly coming for kind all that have but the the of

Rob Cozzone

incentive X severance that share, payment a I equated On then two higher the pennies Yes. executive. departing about The basis and was incremental. to mentioned the per combine to accrual a

Collyn Gilbert

but the could I amount? And you have Okay. do on math do the dollar it, whole

Rob Cozzone

XXX -- It’s about XXX,XXX and change.

Collyn Gilbert

Okay.

great. Okay,

I That’s you very Thank all Okay. much. had.

Rob Cozzone

Thanks, Collyn.

Chris Oddleifson

Thanks, Collyn.

Operator

would This over concludes Chris closing like turn any our I question-and-answer conference the back remarks. to to session. Oddleifson for

Chris Oddleifson

joined Thank weekend. quarter to about results in to And Have look our a We today. months. everybody you forward talking us you, you Bye. Brendan. good three has first who thank

Operator

concluded. now is conference The

Independent Bank (INDB) 19 Jan 182017 Q4 Earnings call transcript