INDB - Earnings call transcript Q2 2021

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Operator

Good day and welcome to the Independent Bank Corp.

Second Quarter 2021 Earnings Conference Call. [Operator Instructions] Please note this event is being recorded.

Before proceeding, let me mention that this call may contain forward-looking statements with respect to the financial condition, results of operations and business of Independent Bank Corp. Actual results may be different. 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 Bank whether statements, transaction. Boston respect to events statements relying to against future response update upon information, otherwise you and any unduly in disclaims Savings or intent new forward-looking the to publicly East forward-looking with Meridian S-X merger. registration proxy note statement the Please a that includes the filed SEC statement/prospects Form regarding Independent that with

You read merger, other they the to are relating contain documents about and urged statement/prospects proxy the information to because the merger. important

addition, in directors and the In of officers participating proxies and of merger. be favor in to and Independent solicitation the Meridian maybe other prospected deemed

to we measures These considered non-GAAP results. will also our section over like President of note to ahead. read copy I GAAP CEO. our now please release, not measures measures. should Finally, and discuss our be the the as Investor the Corp’s with performance. review together call, financial to Independent non-GAAP Bank financial turn for additional press and of be Oddleifson, direct measures should non-GAAP most that during non-GAAP earnings a non-GAAP measures reconciliations information these would contains to regarding go which replacements Chris live of to refer conference we certain Please website obtain Relations this and comparable Please

Chris Oddleifson

Officer. for Thank everybody Ruggiero, Betsy. Thank joining today. Financial morning, Good is you, as you Mark With us everybody. our Chief me usual

Rockland Cozzone, Banking Chief Trust Gerry joined Officer President We Officer. of and Commercial Rob by Operating our Chief also are our and Nadeau,

second performance. on our Our strong display evidenced as by fundamentals quarter solid again once were

quarter and in million, at for commercial but share. remains closings. loan M&A general, shortly, portfolio a our the $X.XX income healthy marked our the grew by for highlights loan was taking be quarter growth the volumes net constrained, encouraged across per robust areas. by X% Excluding you excluding that include, loans, our at through operating we the strong In origination rate PPP $XX.X came retail Mark commercial will annualized or remained total charges, quarter both

total over year, the approximately last remains of from for same of by year. total origination core grew fact, of $X.X very the first XX% this Deposit deposits period half with In loan deposits. reaching XX% robust, generation billion

resulted quality a Our source recognition as in openings, assets and Investment Credit administration of revenues continuing remains record serve. remain pristine delinquencies. reach in fee with investments by to under tangible account nonperforming continues disciplined levels management of contained charge-offs with lower number given marketing ongoing levels along efforts over its growing of share major households value strength rising per ascent. and new record upward quarter, book XX% and continued the minimal with the well growth and our and levels. loans of cost we brand down during management with selective along Expense

So well-rounded all-in-all, performance. a

encouraging the signs of the economic are While by are we of hopeful excess continued along economic some are the we unprecedented though but institutions financial our liquidity, levels still of remain we recoveries pandemic the and with lingering of progress. effects with witnessing nature, dealing increased activity, all fragile

to worthy borrowers plus have billion. obtain year, active inception This to businesses. be been just program. At loans. of at its participants working $X.X effort, totaling the capital we PPP provided loans, Since but in nearly same work to XX,XXX the continue also loan their last about lot required a we We aiding originated Round the have needed X forgiveness hard X,XXX program of time,

the answered communities call great in and pride winds the we the down, program take As serve. we we really how

Bank, Bancorp and a that, integration well-run for acquisition Proper Boston Savings planning our the our in neighboring billion centered with of flagship priority recently Boston towns. and announced bank centers of and all top community approximately Meridian $X.X Beyond East core assets of its

accretion their next and a gives confidence the his tangible to to consultant us effort, invaluable time. out acquisitions excited this be is ours successful, announcements. Now, people with We pursue are is this focused remain early planning savings, companies. applications our been original and senior ensure have counterparts X heavily fourth month which East about with a we in in are the been record role in is across Initial integration and next and same assimilating decisioning over the initiatives Shareholder with in especially more since sitting Gerry consumer branch cost not all heavily our especially we in and book two to company our closing team for focus Gavegnano, we other I confident our on of look customer-facing very excellent to areas. CEO, Dick franchise are us growth and anticipate Boston the meetings thank acquired to Meridian’s priority and accretion value opportunities far over and the and smooth many high and I has his still months the involved capable forward key at few of the efforts knowledge couldn’t for and earnings closely intimate ranks both integration mapping are multiple continuing like achieving progress consolidation we to scheduled proving and Dick’s proven work commercial Despite quarter him for new base, retention, and our already customer local marketplace along. years, in healthy moving regulatory years. conversion. very quite the filed. expectations would forward making business approval Rob

our technology, allows anywhere tablet their For and business rollout implementing network efforts. will extend our within own are boost computer marketing from to a commercial further share chat our continue to anytime force that documents along mobile to working and retail sales businesses, banking are phone, generation management your and new or which to we investment their with our own application example, customers with and we dedicated banker securely our

opening market expand to our continue the branch. We of Shrewsbury recent in Greater the with Worcester

a third Worcester We next next neighboring opening town plan another quarter with for a year. will branch early have City

We senior the knowledge with local lenders of in-depth to also attract markets. continue

you are We markets continue providing market growth to for uncertainty, Fed support the – to recovery. June. XXXX compared due Massachusetts sentiment climb the in has the company. and Inflation has new Chairman X.X% by of focus, and in growth sales will attractive our labor locally, and jobs with continues broad-based quarterly a this economy exceeded seen recent steady reaffirmed Retail know, in GDP GDP despite at build-out very functions our the continued XXX,XXX and our encouraging support it in expectations to nationally. growth. that the transitory Powell nation remains June accompany GDP his labor course labor prove economic since progress look market stance management And recovery continues strong growth ahead equity back-to-back to our More its QX that with continue but kind of its be to provides tailwind. to the increased size economy, X.X% encouraged risk remains in conditions, as economic enterprise the market with it for Taking data lastly, will of shift a nationally, and technology to its already continues resiliency spending a consumer of in growing

was while the some recover hit led as addition, market faster strong leisure In well pandemic, by Massachusetts than in as nation Massachusetts services. growth other continues labor harder hospitality on the the to by and

we there build are sustained that through a these say would is posed strengths at ensure more the I success summary, near-term current performance. very in to persevering environment. But to Now, our well long-term company our going we on continue on And the we believe challenges and financial lot importantly, by days.

we to range Director Bancorp performance We continue Meridian third-parties in Most this in as a high Bank the lies the state rank in bank. came publication second We believe world’s across but on ranking our measures. home long-term our Rockland investing nationally a wide customers shareholder such with focus competitive our ranked understanding formula remains Opportunistic a by acquisitions like focal certainly are us We and overall advantages, taking total colleagues. of surveys our positioned heavily organic without a in our clear long-term return. highly best third in first how and for reputable we service, and Forbes the to winning relentless anything Also space. in Trust granted and contributed goals, growth of to point. for recently, various community

one our want fully and as while opportunities, of to to service embraced our each that, will business meet and provide customers and our And top provide and right their these an them of have colleagues, role much tireless challenges stressful dedication customers. for I essential my thank I it acknowledge communities comfort to to to They Mark. efforts every times. incredibly really with And I Speaking very continuing support really to needed local our to over in their and turn enthusiasm.

Mark Ruggiero

you, Thank Chris.

EPS GAAP well from in quarter represent a $XX.X diluted million income quarter recognition Boston Second approximately as banking of expenses. mortgage East of PPP to current prior and primarily of Bank $X.XX quarter due as XX% income decrease net results, reduced Savings merger-related fee

common assets results operating the return $X.XX, equity, operating while acquisition income return were reflect On a results, EPS second M&A, expenses, for on and $XX.X were Excluding quarter. X.XX% merger and X.XX% X.XX% net X.XX% average the respectively basis, respectively. and on million and diluted excluding GAAP and a

of by quarter, loan as book In behind or loan summarize by skewed $X.XX Total some I be rose the will X.X% loan major loan decreased results. per of million. $XX.XX to value balances in of $XXX levels another reduction continue primarily the PPP a $XXX in Changes share to for by drivers now PPP XX. activity. million, caused balances the quarterly addition, tangible June

with loans volume Excluding basis PPP quarter, closed annualized the commercial $XX.X essentially its on commitments doubling or QX. $XXX loans, for total total million an from increased X.X% million of

as second closing In of half of million, the pipeline which commercial approximately activity healthy the the June for in well addition, $XXX bode year. loan XX sits should approved at

in As as developments, discussed opportunities classes. diversified both for-sale including as are and commercial retail, in industrial multifamily well single opportunities prior while both of quarters, additional the lie rental residential majority and and properties, various warehouse across

into reaching refinancing the volume transferring changes increased balance second reflect quarter associated level stabilization with addition and classes, new estate asset In those loans out. also commercial to or of real either construction project an

We also for business campaign paved way small successful goodwill increased growth the customer portfolio experienced has earned from solid a PPP our the as volume. in

side, the XX% income, portfolio books, production payoff non-interest offset for quarter. while volumes interest within the in and increase into results accelerated the banking loan equity equity in benefiting continues adding the mortgage to strong with in in consumer residential of modestly the the lowering residential On in closing consequent maintain activity activity, the home retention XX% that by help did similar strong of only approximately pay-down closing residential second both be sheet compared to and story of And to quarter quarter-over-quarter, in retained balance balances from X% the the a of was also a decrease resulting Despite the loans home portfolio experienced as first net portfolio. income.

As Chris follows. as our a noted, the the is deeper program, PPP dive in success into related financials

XXXX, which second million are majority in should XX, round, June outstandings from the year. the of to of be remaining of fees $X.X As of of and recognized original $XXX million approximately XXXX the recognized be deferred half there the

in deposits the but This schedule additional only April, closed down remaining not Total time only from volume and new of the cited, loans quarter. repayment year, activity. as having basis be secured the deposit into into account runoff overall prior deposits fees, round, or or generated by X,XXX the full with are another total approximately cost of points the basis X reflecting upon total cost deposits. of received first very income million, over levels deposits approximately points, $XX.X up led million. that half to million amortized core forgiveness. $XXX.X to quarter The deposits combination XX% interest of households Core program now robust accelerated X.X% of core totaling Regarding new X-year XXXX strong the opening X higher million in stimulus of X.X% income $XXX a money $XX.X Chris with reflecting second over increased we

current strategic challenges, excess environment While attracting to the and doing we we the attracting for alleviate the new success customers does accounts long-term continue not the new about strongly liquidity of current of core right feel so. value core remains believe

our liquidity quarter the branch of are continued some As quarter improving or million second overall $X.X to plans improvement confidently expectations digital $XXX increases Worcester and the prior X.X% further asset-sensitive second to X.X million remains our earnings. purchases the X.XX%, XX by, average excess quarter customer for cash decrease. no of for such, experience. X.X some securities button expansion a for comfortable second retain of the and Net purchases quarterly the an spending on our outlook of security overall the mentioned, of could hit margin business curve level have on interest to liquidity quarter to impact there of first customers and core as Though With Chris continues as compared consumer challenging overall an ongoing sheet, we with attract reflecting year, balance pause in and of a and million with segments evidenced gears duration Shifting economy the lead with the levels purchases both more The respectively. portfolio efforts increased basis excess and be the our deposit by million half $XXX of to these income on profile $XX.X in reported the of to years investing primary XX.X%. or of predict. the balance been decreased out on points from years, and to general expected

where the cash As attributable million reduction quarter, current in of rose as forward. a was by million be balances dollars quarter. with to quarter I further PPP a securities decrease $X.X by and levels yield the of low rate will levels, able compression primarily prior to challenge over Though million very primarily be the funding yield quarter in the fees at further was a is the was average offset $X.X basis in the from previously while during versus recognized noted, decrease margin to driven costs elevated going deposit $XXX combined asset the in asset loan with on mitigate decreases repricing reductions second absolute in

for quarter. $XXX,XXX, Total and the accommodation Nonperforming $XX.X the for And concentrated by dropped at of an notable as primarily to metrics basis. loan Regarding charge-offs quarter to XX.X%, quarter total the be with point million the million X total X.XX% loss the only nearly following: of net include the relatively representing commercial deferrals on the asset which of portfolio, XX, were prior million driven $X.X quality, or during loans basis expected. quarter decreased an delinquencies consistent the annualized payoff X.X% loan June were is equates $XXX.X portfolio continues This in industry. to

million asset of As such, the nonperforming to overall negative healthy very of $X strong results, income increases, included to with new million and banking in excelling combined provision X.X%, quarter. for bad notable loan strategic modest economic ATM million reflects wealth for growth further $XXX,XXX margin or the debts fees, increases larger the is portion gain strong enhanced on of improving current hold investments. reserves income, management decreased the business these preparation XXX% equity level loan into a $X Offsetting in $X.X new and sale fees, seasonal which aforementioned gains secondary tax loss compression reflective in and company’s The in decision decrease Non-interest a the market. equates metrics interchange quality portfolio of originations of overall from loans. the forecasts, small account by in mortgage deposit

in quarter. prior $X.X of When comprised increase in decreases entirely side, is compensation total increases other from expenses, million incentive million categories. the merger-related remaining of offsetting reported excluding expense expenses X.X% various increased with the the almost increased On the and $X.X

expectations loan In various summary, the near-term pipelines excluding equity moving aspects of tax for the benefits discrete quarter quarter, and in for products second from second investments as compensation. of highlighting from loan quarter the and associated all annualized loans and should reminder, single-digit healthy low impact. those results commercial forward, credit rate up as housing tax million prior serve guidance, framework benefited of the growth with is $X.X a with for is PPP which a Lastly, XX.X% line across

to notable be interest growth XXXX expected verses deposit excess provide low a of of be cash QX future level securities. level decision the benefit retained expected is than to growth round will interest million mortgage which into rates continuing with the the turn as securities accelerated deployment books. likely some equity XXXX. Any not reduction income, acceleration will the fee incremental to income cash income will into results, deployed for of in utilization anticipated the net PPP $X.X margin in and until in any consumer While be challenge will approximately though QX is affect of lower home muted sell And more the net to continue

anticipated general surprises below allowance. will various provision major further the investment no and net with remain factors quality, merger overall remainder year. my and at an resulting That levels excluding reductions a charge-offs, track asset quarter tax second along to comments, economic continue QX questions. moving for excluding in costs, Assuming from – gain likely open expense, will to and of consistent to trend $X.X non-interest with overall core consistent income, for the improving results, that pieces, it in loss is relatively should continue will non-recurring concludes loan we non-interest of million the up the with now rate And

Operator

comes with Mark Instructions] first Sandler. go Piper from question [Operator The Fitzgibbon Please ahead.

Nicholas Cucharale

filling Cucharale Mark. Nicholas in you’ve been well. is This everyone. morning Good for Hope

Chris Oddleifson

Yes. Nick. Hi, Thank you.

Nicholas Cucharale

start wanted to deferral the So portfolio. with I

some looks Has on of accommodation book. nearly significantly? us modifications it color loans? to, remaining the quarters the in alluded three you Can you As those give like were rebounded occupancy

Chris Oddleifson

giving you some there? color Maybe Sure. do Gerry, mind

Gerry Nadeau

Majority come in actually two Hampshire in business nearly Rhode some have really as from as And flagged There of XXXX. with them some part vacation for they what’s that are either been cases, hotels, such to been hotels from that of and in ADR. cases, sort most is XX%, closer average Boston strong. those in even Island, stay Cat occupancy on levels, XX% that in Cape of excess them them experiencing suburban are They in slowly are on Sure. business back of New suburban many to travelers. is and And very, and reporting weekends. improving up we focused the group. have The rates that of on vacation subsets anecdotally, now occupancy very low, hearing are or their hotels destination XXX% is running stay

So it on that – is gradual, steady improvement subset. those

Nicholas Cucharale

accommodation of what those you destination deferrals, is of percentage breakout million have So $XXX business? a do in versus

Gerry Nadeau

In that group, about two-third business. is

hotel but XX-XX, total split one-third Our travel, vacation. is about portfolio business that in two-third subset,

Nicholas Cucharale

That’s and Can quarter June share with you relative line very where the then utilization XX helpful. us C&I levels? pre-pandemic last to was

Chris Oddleifson

Sure. Nick. that, have I’ll

floor So break line right we C&I, but other the healthier XXXX look in at credit XX% have plan and back down floor we then utilization C&I of was levels. to XX%. at about more dealer end was the and down quarter, line general XX% is XXXX. around of plan, with is which in of utilization data, XX% probably within lines. deal floor March C&I General At to second plan dealer was about onset utilization I out reflective the general pandemic

sheet. headwinds on those some give the So balance balances into to certainly, continue outstanding extracting

Nicholas Cucharale

you then think finding for loan for that That’s opportunities It lastly, about given where you lending like great. us your guidance. handy. the – the Can Thank competitive the half, you quantifying second having sounds environment? for pipeline. in help you’re commercial optimistic And you’re thank just

Gerry Nadeau

that? to me like answer you would Mark,

Mark Ruggiero

chime Gerry. I’ll if needed, in And Sure.

Gerry Nadeau

their industrial say further either on condominiums I been say, And are Mark most in single-family have I’ve for indicated business will, the whether driver. or personal tenants, expanding be mostly apartments the CRE been these sale. then significant drivers, That’s own clients or expanding use, side, or it we’re mostly the been buildings side. their for rental the his As would it secondarily, residential mixed probably seeing comments, buildings you on being for if side. primary their use, the on I’ll

Nicholas Cucharale

for Thant’s questions. my taking great. you Thank

Mark Ruggiero

deferral of quarters, CARES it extend this we on – those thought would your other a important One we I were question. prior to but Nick, the that, able as to XXXX. into recollection, of modifications in just note Act, shared be aspect out under lot a back we reminder,

So, the will stay to many of XXXX. deferral through of those remainder accommodation on continue based deferrals

well then deferral not rest in will So of year, layer those they’ll dates in segments to been programs. balances into of levels off those reporting on any and sort the be expected different we’ve meaningful of But those run based of would through manner different XXXX. deferrals that maturity the and deferral be

Nicholas Cucharale

Thank great. for you That’s clarifying.

Mark Ruggiero

Okay.

Operator

from question go Dave Seaport. ahead. with The next comes Bishop Please

Dave Bishop

gentlemen. morning Good Yes.

Chris Oddleifson

Good morning, Dave.

Gerry Nadeau

morning, Good Dave.

Dave Bishop

remarks assets? to that of I get thinking up as Fed of time opportunities some sidelines you’re of building as staying outlook excess redeploy probably extent to Do percent large You loan sense of, available XX% in I to guess be seeming that liquidity, the growth flat. have how a could the had in so on assets And the light securities that for Chris, the about curious or are terms the with a in for yield into that’s probably Just mentioned how the terms curve staying portfolio. guess, continuing so. of to you average

is Just the curious that what grow portfolio? to appetite

Mark Ruggiero

have We overly the right much Yes, fact, we an know very assets. large now as And percentage have where not as David, of operated at. pretty we’ve typically is percentage a portfolio you securities do in those well. historically

portfolio a finding higher level dynamic operate correct one cash, I with return expectation the some in cash securities it just of is a of in of the reasonable that security add, deploy the to we environment in, than build probably that decision excess here this product spread. excess warrants will sort a I an think we’re least challenge has typically with. giving and the just reasonable at

to the second longer assets of curve out the lot primarily the that. a the be we second we quarter, into what more bullets in agency We Those in were it’s we’re investing in to up on all deployment are of and of to know a bit fact, the profile of going a leading the more have – we challenge that quarter becoming in of quarter, second the during the convinced So just into environment, seeing right because partway so. spreads products, rate excess do the those little cash. terms low

we point. towards for bang of treasuries purchasing be just to quite So actually our move at buck it’s because the honest, best some late as this

think, liquidity a there out convincing it’s sort return a with constant of saying, and we where the even purchases continue, of be. equal, we So long is I of of if $XXX product reasonable second there $XXX will clip in for that sort of million, level modestly but way deploy a probably quarter analysis of that’s would the where million risk, did assuming to comfort all things spread reasonable being the our

Dave Bishop

And did average purchases any the quarter the yield weighted this you have by chance? security average on –

Mark Ruggiero

Yes.

talking little it purchases points, are quarter XX QX X, for second purchases, about those be purchases. Obviously, will sort It’s on – X.X%. we’re looking of X-year those X.X% just average X%. I basis the was you’re the all-in at than but on of lower mentioned the On that part treasuries maybe curve Those was that. weighted a over the

Dave Bishop

Got you group, noted of stronger seen a it. year-over-year quarter And from think then, the management, another strong the basis. wealth on probably management one quarters Chris, we’ve investment I

versus Just curious sort assets new market rebound of that much of new generation and is how of relationships? related

Chris Oddleifson

Mark, origination do breakdown have – don’t I we have strong. in that specific me. breakdown? front say I is our you that of will

Mark Ruggiero

of bit had quarter. of about I do. net Yes. little runoff actually, the – second a in inflows experience we We well, did

and value most second it’s new came of in and for essentially appreciation. terms quarter of the money the wash outflows in So market a appreciation

down optimistic but with we did very of results million, talking bit million the shy we $XXX management a over wealth the a that’s of little million, were in So just $XXX little and still quarter new from very where folks. and money, opportunities $XXX first

think be again. to are actually start able to with excited I out clients they and go meeting

advisers for I those of get their and is a pent-up to been demand have again. there those meetings customers face-to-face lot with think

very So about to opportunities the been we’re well. find in cooperating feeling market there as has good continuing

Chris Oddleifson

XXx this over XX last have will that we the over grown years. I add David, business

major and from of bankers expanding other drivers retail And the One have, commercial acquisitions. that commercial our branches mean bankers kind get footprint comes of of our we all more business franchise. lenders and the our that’s is the XX% the more referrals. I our our been the and referrals we retail

So with bode well acquisition, the for Bancorp the Meridian business. expect too growth we this to that into

Dave Bishop

Got I missed mentioned fees first it. tranche one final over loans. you Mark, – outstanding question, of But the terms of that in deferred from then And number. just again? you the PPP Could go

Mark Ruggiero

Yes.

first is million, David, about as to down XX. The June tranche $X.X of

Dave Bishop

$XX.X Got am million? million the sorry, or – it. I And then $XX.X in

Mark Ruggiero

forgiveness. there the so to will window And funds. experienced be that’s and the for of deferral the sort of at think applications a sort time round, in is that I where will period of normal some the we XX.X%. hit start coming at be window the in of utilizing the then of subject amortization just there period amortization one have XX-month most caveat end So, through payment level The X-year first XX-week when there XXXX, essentially is a will sort of quarter the they the here on see fourth the period, period a will we part to a least to time there for of most where borrowers –

best pinpoint to it the will next learned tough But that through would what calendar exactly the guesstimate you of think going it’s is So, my customers process. majority forgiveness the when round, first we be leverage will of the through if But start majority there that the will forgiveness in year. I happen accelerated until later in a year, just potential not some we see for XXXX.

Dave Bishop

Got it. Thanks.

Operator

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

Laurie Hunsicker

good Yes. Hi, morning.

Mark Ruggiero

morning Laurie. Good

Laurie Hunsicker

your and for I minute deferrals back we wondered great. if a could to go trends credit look

on you sharp deferrals. other small wondered comment we just Just if little business uptick this saw services where bit in could the a

is it’s estate about million I there mean real leasing linked deferral So, small from am and quarter warehouse transportation It the your that talking looks like line. I million. $XX $XX to

Just can that? thinking should us about you or around how we any that color give be

Mark Ruggiero

looking a those executed. into There quarter. the this Laurie, were the We the I similar as specific would some deferral a seen have issue first we talks XXXX and played borrowers year-end That’s the couple of created of were over as Without the and increases we it through was that program number out first enter numbers and as over in say Yes. negotiations to when couple when of then quarters. timing of a was negotiations with just of borrowers, got quarters. what a time the period reported deferral with of first

talked around deferrals you if on. So, come I back flux not about still that recall, at in $XX year-end, were somewhere could sure million that when am but we of we announced potential somewhat

So, nothing there. has us surprised

over increases in out group number talking anticipated fact, the of settled. we we now the all be part were of couple that a these sort of would probably quarters once it’s that And where first we of were All all dust to.

So, this the of just one had quarter. of a around to signed got Gerry the borrower just increase in not the quarter sort was that example and paperwork another it second

Laurie Hunsicker

it. Got

fees. just and on Okay. PPP then Thanks. for And the you remaining – thank your clarification wondered also,

in your words, what be factoring can give also, other think super If core about to like Any you forma accretion you us excluding And EBSB, what margin, also XXXX around going EBSB. could PPP? looks In as in XXXX, the us restructure. any would like in look for factoring just about think help is helpful. thoughts pro then margin income with we the comments

Mark Ruggiero

noted your in that of in stab at. question, there are pieces will a as equation. Sure. And lot I moving take you a

I couple starting baseline you entity it margin So, been of as take and sort think best will to our pretty what out with at looking can. PPP for But the you you think of the I point. accretion about altogether break And a results of accounting do that, as has try last standalone at as it consistent point, if are as, over down our a at quarters, I starting think I purchase let’s $X.XX number. That’s $X.XX. looking of I a

that time $XX XX-XX that quarters, we now couple Upon next the about seen over don’t you still and $X.X and announced last still acquisition, in that mark. close. non-PCD initial of Boston but have I million, hundred could are say, and $XX quarter. I XX-XX a down million, non-PCD, what I – change. a – East running a PCD, about a of guess PCD to, assumptions of the lot have subject between well, meaningful That We reminder, a non-PCD it’s would at the the it reiterating had $X.X to to equate think couple But tick obviously, million should of pieces a million thousand our would we if couple have be are will is quarters, moving split we

to get and a If amount. same into So, that there mark life, average the that, in $XX accreted will interest million income. accretion that’s premium year that would we be about loan Offsetting anticipate we assume equate in essentially income. X-year would a liquidity

will $XX premium that wash of $XX million be benefit. amortization the So, million, non-PCD about with the that will

a be fair And So, there that then sort on think a the be accrete of of noise of will the the the should good CDs on mark side. year margin news X or the benefit I sort time million in terms will a and a in benefit. that value effect $X about washing deposits, is there of the and

the that netting But are lot you think little $X.XX, layer will impact a going $X.XX really, that the when I restructure noise. getting to balance deploying about doesn’t for sheet also a the $X.XX in then margin, lot allowing you call a us funding change the on excess acquisition essentially off because talked deposit lastly, core some their and a level real paying is of of then allow sort of that book and And to wholesale that we $X.XX, estate we see to likely level commercial runoff into cash of runoff. of it. whole a sort opportunities out to So starting point, of margin the for about very and of

rest loans. only funding on coming million FHLB $XXX and cash XX reduction So, we essentially it’s points. in on the the billion balance in on $XXX and million or $X the That borrowings in – on and spread $X deposits. that $XXX the in out comprised million sheet a that’s asset the billion of And side size basis about of modeled asset pegged billion side, $X.X the then in is

dollars net will though even of earnings we absolute significantly. in improved So, the interest income, lose quality

of million a back balance to we at looking $X are to pegged you about restructure billion So, but get smaller $XXX up sheet, or that post full that margin so.

you will Laurie, of but there, moving pieces lot your answered know there. pause I questions. a is So, there hopefully, that

Laurie Hunsicker

going last How the that to is end sure for M&A very Yes, the really appreciate does. you fast see forward here, EBSB are hopefully, question it. at enough. point? Thank close by thinking great. we of all you are Chris, about Hopefully, I obviously, you, this for details. just year. That the

Chris Oddleifson

the digest really pretty track love much been the across of strategy X.X we have and I every close X it’s we same that believe to the it. to great executed convert it hope Laurie, been important quite opportunity would of an horizon that and well, emerges, acquisition And prologue for think we a years, it’s long of I years. and as growth passes And us. a had us. I and sort way. advantage would once another record And coming take

Laurie Hunsicker

go just And we how asset small just you of target us that you you I in – would of remind again, then terms how know your go? large quarter and every usually Okay. one would size almost us asked

Chris Oddleifson

are sort to sold, Yes. bought, love That’s exactly. – the I you tell not banks of would

it acquisition recall have if buying capability the move other back some first too small, and there be probably has you in think reason be so good bit. a million. $XXX to I have needle little didn’t mean the or it was there I XXXX to needle right, And the like was move or may on. to

be small. I of think was And that that too I Bancorp. the Falmouth size will think

East So, noticed. but move not – as – I want mean, little. has Bancorp, but don’t needle mean, something I I a That it to Boston noticeably. set metrics, extraordinary. as so much a be to moving I the good pretty number, was to certainly have or that’s Meridian

Laurie Hunsicker

Thanks questions. my for Alright. taking

Chris Oddleifson

Laurie. Thanks

Operator

Kelly with KBW. is next Motta ahead. Please go The question Instructions] from [Operator

Kelly Motta

Hi. Thanks for the question. Good morning.

Chris Oddleifson

Hi Kelly.

Kelly Motta

Hey.

I a on been and asked in think to pretty just little want much most of dig bit expenses. I my have answered. questions

your equipment and with reduced costs. specifically, a removal that came lot you, least, occupancy cleaning You mostly down line snow was and the

some think potentially in about the reducing I office expenses. wondering, you talked have Just past

and you integrate to you decrease? of at if else wondering working close that look play drive are on if Just there as to still deal kind Meridian is that anything and

Mark Ruggiero

still we feeding invest environment where shortchange the of those make of that terms the And I are Yes. continue the on think the and lot those have just great occupancy reminder, have of Certainly, to have level need expense. makes don’t of and are I achieving increase front with did branches cost completely A those And a equipment. exited And rate track our second progress invest expense assumptions. of anticipated incremental numbers we a me. the have expansion we sort technology talked will sense made I the branches play as to decision We save exact quarter. and and of about of in to, branch a careful that and that we a on close believe, we and that and of and in actually to, will entity, continue infrastructure. especially money, run been lot Trust equipment But have branches saves. items constant post-Meridian, on and the the to locations certainly, forward, closed but care last think sort year. But in as we to we where out space But we taking cost dollars actually And of to about office investment. pulled spend think we our couple we tangible just Rockland had of and Medford to to point the in there. would we requires the some Seaport our isn’t pretty We there in a was capabilities. standalone it absolute we need

there But be much probably of in but terms it and efficiency we So, items, branches. that have I as sense. always in exiting terms fully looking makes can, some gains at should we looking modest two for where benefit of think extracted line those are we other as

Kelly Motta

lockup getting And you Chris, agreements call, I Great. in you then lenders new the about and in spoke earlier place. – believe

if initiative that is that’s how other you. whether you could it’s wondering go as how well? if mostly completed Just just over or doing you are this going banks Meridian recruitment with specifically Thank point? from at for And

Chris Oddleifson

one of let comment extensively. is Gerry that this more Great. I never the I stories will that will will say end.

through for expand can that. looking Gerry, higher, you business through But our promotion. in internal lenders through development, think, I acquisitions we be will constantly through on

Gerry Nadeau

And was Sure. couple earlier, a in from was Thanks, we folks to to Western. Chris TD Kelly. speaking Chris. Yes, bring fortunate I the Hi, it context, very about when in year. last we over Worcester about able are think opened being of

nice almost the with And so that we time. actually as lenders giving at banks play that’s some speak some we really And been current meetings us are growth. having as now even are in other from

of are even find in are continuing team our a East opportunities to with couple to incrementally different together joining add So, to we groups. Boston, we though

So, I think we now. are have a right couple that to close pretty we

to for over able relationships that’s and are have great bring relationship to us. been There about. a value is to be been in something want time generally to we think that I always finding the market So, opportunistic managers long

Kelly Motta

last the maybe one one, for it like rate, Gerry. bumped a to tax Mark, it And bit. up Great. Thanks just looks probably

there year? of rest Just that’s to the wondering rate think if items of there kind or the of how the tax kind is discrete any about for Thanks.

Mark Ruggiero

QX for line, is level should that Yes, see expect we XX% XX%, rest year. to and right for high the of of the in that

the creates benefit. of The equity impact through tax the one-time first on housing the tax first low we of information a And income one-time get in to then where quarter updated compensation credits some some when revalue vest the typically noise benefits quarter triggers was tax because the have because that and anomaly rate. awards

of the fall should into So, rest the first and noisy year that XX% range. then quarter is out high

Kelly Motta

all you. That’s for Thank me. Great.

Chris Oddleifson

weekend. Happy Kelly. you, Thank

Operator

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

Chris Oddleifson

you I a Have Thank Great. Betsy, thank quarter. Goodbye. good and to to you, everybody, our in today. joining look you update We you, will us talking weekend. three for on third forward months.

Operator

for you presentation. attending Thank today’s concluded. now has conference The

may now disconnect. You

Independent Bank (INDB) 23 Jul 212021 Q2 Earnings call transcript