INDB - Earnings call transcript Q2 2024

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Operator

Good day, and welcome to the Independent Bank Corp.

Second Quarter 2024 Earnings Call. [Operator Instructions]

Before proceeding, please note that during today's call today, we will be making forward-looking statements. Actual results may differ materially from these statements due to a number of factors, including those described in our earnings release and other SEC filings. to any obligation statements. no undertake publicly such update We

reconciliation may our of our about In other may SEC including can release of of SEC accessed our today found these GAAP include in be measures, filings. Information addition, some section and measures. via discussion the references website. earnings Relations measures, financial certain non-GAAP filings These to be non-GAAP Investor

is Finally, being that please event recorded. this note

Please go over I CEO. would to turn conference like sir. now Jeff ahead, to the Tengel,

Jeffrey Tengel

Thanks, morning Head for accompanied Lending, Cole, and us joining thanks Ruggiero. and good by morning, today. I'm Mark of this and CFO Consumer

a performance quarter community take will through is second franchise testament some bank. in the the difficult you a few details continues share Our as resilience I a of proven our minutes customer-focused to demonstrate thoughts. long-term after to Mark and environment our in a model operating

a only the the higher clearly for longer interest but for sentiment rate Trust, not challenging creates entire Rockland While environment, industry. current for

continue focused positioning to challenges growth We short-term centered while manage years. protecting we for as bank environment of the over other environment remain through around uncertain countless when a strategic have the priorities, macro number earnings key all We earnings overall improves. the on this definitely

One with more a diversified commercial our particular priorities portfolio of portfolio working those to create loan is real emphasis office estate actively managing while on our portfolio.

support CRE commercial end transactional of free concentration relationships. We exit legacy normal are the we the By and through our this quarter. see continue capacity business. to exiting at to estate amortization in to transactional drive We'll down to up will percentage our pleased reduction a real second of business, continue the

pipeline while to space. a sheet We is this sure remix a testament robust our the C&I balance will market our to in to also strength be competitive more towards look

Boston market. and our top from but recruit continue hires new talent Many managers philosophy. Greater come to get attracted operating to actively of Greenwich larger scores culture new to we in our and the continue these the relationship in banks Our surveys, are

deposits, priority Another provide is few been additional a strength has minutes. of which Mark prudently a will color growing ours. in historical

But quarter, deposits, we grew maintained our households margin. and serve number second interest the of in net we grew the

We under to in the quarter. record also $X.X a grew our assets administration billion second

Our wealth management company be the key resonates It our as works a and that experience a clients. business seamlessly deliver a whole. continues retail the driver value with to with commercial our customers to differentiated and for

opportunities. all in Trust's underwriting underscoring has historical solid losses we Rockland consistently And economic through cycles underwriting of and credit is this this M&A The and portfolio disciplined loan as environment management. resulted our low And loan profile assess be various by we we our is continue capital priorities, to will risk different. actively strong focus no position. these bolstered on further think

the future. While remains It's and and in muted, that opportunities will one fit disciplined improve. M&A a driver our strategy conditions to somewhat take we be in of the be acquisition it parameters activity when we pricing value expect advantage past, employees proven historical been to

year. year noted results easy past that through quarters be hasn't the said this pleased of and the the We've didn't trends the couple we expect but half of first we and been, it with are to

We no focused We current that level really well our believe remain will value capitalize on We continue on historical proposition. look over our to our have opportunity. position presents do to magic focus to value of banking creation. on and community long-term actions There's a we those control market strengths. high and

consumer brand and years, accustomed deep attractive disciplined expense a workforce. a To recognition, summarize, markets, capital, talented customer including to engaged ample underwriting, over base everything the and deep we team, good strong credit and results an market the commercial energized been have management deliver highly and management, operating to in the scale, place has

environment, we only through the navigate believe positioned I challenging to Northeast. the current take not are choice acquirer short, market to to be share but in the In of well and continue

And to over Mark. note, I'll turn that on it

Mark Ruggiero

will earnings presentation X-K in is in Jeff. the deck website take on today's portal. our us Thanks, that now through included investor I our available and was filing

Starting share XX.XX% equity, X equity. $X.XX, on a on assets, income return second average $XX.X return on of a tangible Slide was in resulting million, earnings return diluted XXXX on X.XX% net average and common was deck, a the quarter GAAP X.XX% common and per

highlight we addition, increase per $X.XX the tangible in share. In book value

of solid second results consistent has last a that quarter over generated franchise banking basis results As are strong financial a the the X Jeff the core to, decades. reflection alluded on

we on noting Expanding core drivers, X, company's and bit deposit to the will stability some of of Slide these base. turn the strength a

up annualized basis. our an growth have We period household that average see annualized deposits or $XXX X.X% play or consistently focus of an were the million highlighted the can second last couple you basis, balances years, up core on quarter over on results, million with in and $XXX while end X.X% out

balances while composition total continues noninterest-bearing quarter overall demand drive time to a municipal deposits. for principal XX.X% deposits deposit increases demand period-end balances deposits still comprising with increased reflect with very segment, total healthy the in quarter the of rate All customer segment second in being the overall driver. consumer And

percentage deposit year in deposits resulted franchise of the by and rate noninterest-bearing large another this interest-bearing core balance savings checking of sensitive, accounts is the on not focus of strong has less in only portion but reflected accounts. DDA, operating smaller value XXX-plus The

for deposits QX. low basis points deposit overall versus total of of the XX still This composition resulted up relatively X.XX% the quarter, in cost

cost noted of in driver only key borrowings However, increase of points, deposit basis stabilization quarter. wholesale a resulted reduction X an corresponding the and the overall of margin growth the funding in

million basis, essentially CRE million Again, construction X.X% Jeff flat. as Slide $XX.X billion combined strategic end. the approximately or balances C&I X% to an quarter increased total balances were Total increased Moving annualized just or company's to intent annualized and X. $XX.X of loans reflecting on $XX.X that mentioned, while

New estate. across diversified number was net nonowner-occupied property and a types of a industries with commercial commercial reduction in activity real

increase million and should $XXX quarter. represents XX versus for June a new quarter XX% An pipeline disciplined origination at third the prior approved of into bode well the heading activity commercial

In portfolios the solid low activity origination small both and are also continues business the residential in and equity. addition, new reflecting rise, percentage consumer with reflected steadily expectations portfolio growth single-digit to line overall in home

on highlight prior versus provides of couple million notable loans to new with asset a largest quarter. decrease these for slide, additional loans. gears accounted on at this total be some Slide has detail ratio the asset loss loss The or a X noted of total a either the should the point on of number nonperforming nonperforming increase in the over Included allowance. Shifting to X for have charge-offs To expected remained added been in couple, specific allowance loans, already metrics. X.XX% relatively quality basis in current quarters. loans $XX.X quality. consistent of It reflects key reserves loan X.X% a or we reflected X that the nonperforming activity prior details already exposure from

remains we components the work We office through challenging to environment. of which portfolio, Jumping nonowner-occupied X. good as in our key stead highlight the Slide

loans nonperforming new in this no had we category. First,

quarter cases, on banks and work of in reserve X. Regarding drove noted applicable resolutions. increases these borrowers just past some credits, to due allocations where the we exposures, with modest other continue in I as appropriate Updated find to in Slide the information

all had second extended office quarter, the this negative set paid Regarding migration. million of in loans segment of risk no assessing the terms in quarter maturities, off, either mature case-by-case we best or loans lastly, on quarters, the a And the mature all $XX to approximately with to we during resolutions next loans in with basis. options determine few renewed remain diligent over

the this continue multifamily to the and Slide pristine information to assets see on quality we nonperforming metrics portfolio portfolio. in with noted Moving asset no X,

the increase flow in we increase that highlight yield for repricing, I as to second the quarter. factors loan in previously the quarter quarter. maturities deployment near-term X.XX%, net lower quarter Switching versus reported mentioned, the point as costs the a hedge of offset funding asset a the securities overall basis asset stabilizing increases which gears and combined prior X prior And The versus saw in Slide reflecting cash of interest with margin a expected, increase margin XX.

fee in overall the $X.X increases XX. nicely rose by Slide income as to of saw and fees driven administration as billion tax increase the quarter banking as in record deposit-related mortgage to wealth which from Noninterest income, strong second June preparation well Moving latter assets under insurance of the The XX. commissions increased management. and

quarter, Total compared the when various expenses to with quarter modest and relatively were the components. across versus flat decreases prior prior increases

tax the quarter. of lower prior that the expense levels rate associated also was with was adjustment and equity liabilities. benefited quarter XX.X% dollar vesting which from award And second an than life impacted split in lastly, activity insurance company's valuation The by of the quarter, slightly $XXX,XXX the

turn out provide my closing over Slide the which credit near-term conditions. our to to In to I'll update reiterate of want a brief comments, continues level we forward-looking uncertainty on guidance. XX reflect to

the loan guidance growth with near low of percentage percentage deposit our XXXX In increases low in single-digit term. terms and year to of reiterate we growth, single-digit expectations full flat for

either for in net X.XX% no XX X.XX% the cut, anticipate third be margin we cuts basis or quarter point the margin, assuming Fed to interest Regarding to reserve range. September the the

been second quality, in being asset already the activity half it captured the other that noted, year reserve expense we as the trends are credit already to driven any charge-off that for accounted allocations, by relates by reserve. I As modest provision with anticipate previously the emerging specific has not of in

for levels. XXXX increases year we quarter relatively single-digit well low for low single-digit as third noninterest for quarter Regarding versus quarter reaffirm noninterest second expense, percentage versus flat third full a numbers. increase QX versus versus totals we full reaffirm for year XXXX income, percentage XXXX as And XXXX with

is around rate be the year expected of Lastly, the the to tax for remainder XX%.

my concludes up it for that comments. now questions. open And We'll

Operator

today our Fitzgibbon And from Mark question [Operator Sandler. will Piper come Instructions] with first

Mark Fitzgibbon

impact any morning the whole curious, this Just CrowdStrike from saga?

Jeffrey Tengel

to It desktops. of really we significant not it normal feels speak. our but closer primarily impacted it's like as Yes, kind and getting

working So center And that normal. were our actually, the wire in call call stuff our system, all online is fine. banking, volumes just

it's been really So mostly desktops.

those As you in lot of the a branches. were imagine, can

a been those but been But a us. big it And lot so it I know we're up hasn't working far had challenge thus it's headline to and get anyways, for -- all back hasn't it hasn't of online. news,

Mark Fitzgibbon

next then us and between whatever I Okay. or over the the And the with repricing, CDs you wonder of what year you or end could have? your if percentage Great. of months say, might XX now share

Mark Ruggiero

Yes.

the majority, have million $XXX another Mark, in or for $X.X about XX some we information the quarter. fourth actually deck, next and in will XX so billion sure, on then the the mature Slide Over of quarter. months, vast third the

quarters. of couple billion or $X.X it just there's in next So of so the

can keep as to we've take that short to potential book cuts. rate CD So imagine, purposely able much you relatively of tried be of to as advantage

Mark Fitzgibbon

of Okay. loans you've the the this And on you looks on sort are got set then credits? like I that lots like are half deck, office year, to loans of Page with those been of slide $XX what's those detail that office to some give you've borrowers. any going in having comfort to around million mature. X comments conversations mature. with It of guys of back or criticized assume likely happen Any

Mark Ruggiero

Yes. Sure.

having X of criticized essentially and numbers for those one the loan one of manageable. those each is key plenty We conversations. certainly next over components. of are It is Each quarters classified

one a a on. in short-term without collateral is million in quarter actually any that that earlier the We're renewed was we get that borrower and will matured that get third matured That and issues. some we with year So $XX working now to extension to did relationship. additional criticized expect loan the mature had the

without So that to million we'd $XX expect resolve any issues.

a million the larger is of participation relationship. That's criticized in we much fourth have loan. $XX in mature also one quarter that bigger The a

we've a group short-term quarter. talked look bank our XX%. will exposure. extend It's this to We have last a about the is think extension about biggest Occupancy credit really that or downtown think I will Boston either further. that's there probably

Jeffrey Tengel

documents. loan a actually built X-year has extension the It into

the we're on we borrower the the so that all [ up with now ] agent participants right negotiating here. coming just to deal bank And with and with want how

Mark Ruggiero

look the that transactional would trying proactively of to one we to That's over we the have essentially is reduce quarter we're so. exit That's or opportunity Mark, we're when a if the probably, I that's loan type next loan think that very do X. to

where first but issues quarter, quarter classified in worked understand second there's until multi-building investors the the relationship. equity And then one one that, the still supporting It's lastly, the half sort expectations and flow also Boston resolution been maturity there being possible to is that the through the of be wane half. that cash but XXXX coming there. up up facility That's will in suburbs, will had here a in second support second here

So but where when premature proactively it's working with that the one articulate to will bit borrower a resolve. now,

Mark Fitzgibbon

And then sort how on last just us that's question. Great. Worcester could I wonder expansion, update Okay. of if going? you the

And into maybe loans any and if of expansion you with and for in markets? share plans have terms deposits other new us

Jeffrey Tengel

been in far. that had pretty Worcester so leadership pleased with We've Yes. market. We've terrific

we that in that bank. us up Somebody commercial, bank, who's he part the bringing had us. been came of of to that that show instead with time work He of maker like attract. actually Worcester all able wealth, for market long been for retail, in our been that and bought lines so were different together in sold a of the we a been business that staying market, another difference He's bank a bank to

So of and there's for have. loans market the coverage a we it's branch we amount the while big of -- amount have

we to have it of specifics introduce community a model Mark, bit our operating don't market. So any of you lot as top that a feel I we novo, to there head. know like if unique of grow we room a because de bank the off your have was

Mark Ruggiero

certainly few mean aggressive ramped had quarters. the from presence, actually more area and From we seen novo we've Yes. there, advertising I much proactive where growth really last de market, been of deposit has in success I expansion branch that's standpoint, We've some think retail up the and think a there. a level an makes that in deposit promoting and potential good sense. we've and really over

of Eastern in done Worcester a If towns, we've proper you bit gap rest job branches nice but a a map, footprint. filling little our still look at a is to the our there in surrounding couple in of of

gap prioritize we'll I looking the in think So continue small opportunities footprint. fill to for to in that

city your other markets that then feel there's Boston some make we the the think And that think also in. we be this we're there. see markets continue good and more East to I would opportunity question, progress to really of other But opportunity to starting momentum north

And a So think, of then continuing ultimately, Shore, we're stay aggressive of to North city, area, opportunity. to we market. is think, in where north Valley I the in the that there's lot fill continuing Merrimack

Jeffrey Tengel

last North hired the if Boston at where also That's somebody we really And he's to you manage recall, us. market Shore, that of North the for North end year from Shore.

He's So would maybe in he's guiding beyond got really deep knowledge where of branch. helpful that analytical been the numbers a should have say some market. sort about we what us and of model

He's branch could savvy he network. additional brought we some street thinks ground, the use the on where to support in real

while continue it's So right don't now have announce we or we anything to that to something planned evaluate.

Operator

question next Seaport our Laurie from with And will Hunsicker come Research Partners.

Laura Havener Hunsicker

there you the about of staying right New you you go, comment Jeff, that just max think the go can in do And minimum if bank maybe deal? What's the what's How if markets. sweet you Hampshire? and Maine? a about think is now? what's spot you terms about size, think do you Maybe on How whole

Jeffrey Tengel

Yes. prefer I say in never, stay we'd but would contiguous to to say where right, we're never currently markets operating. primarily

in Providence, Shore there. -- branches have a we And filling So we the go of loan South great, physical Greater in and we're kind know, as west be production down of as have you the Worcester to maybe east office any of north to we as bridging while would kind Worcester North anything in don't do And the if Boston Boston. Shore, Cape that far and Coast. and the South of in

close by. also that's market a that's So

from natural markets would those we be of for to M&A none us an standpoint, in. think be So

were a are don't with connectivity we say, of they're seem you operate. necessarily of never New not. any rest would where If to or our the want Maine sort like say presence Hampshire I franchise. that but those contiguous Northern we that never, bank would Again, in have markets Northern probably say to doesn't

takes tell a think it to here, to as mean you right? respect $X It's $XX billion I there's deal. folks much with a our had And I they'd operations just billion deal. size, do we balance, a if work

the of what's do our change by and also company, complexity is $XX et cetera. balanced sheet the how let's the So the that our does integration But it of billion balance risk, deal. culture

So I would think we're going pretty find in that to things measured of we size be would terms of attractive.

I our As balance sheet guess, be, measured, we just forward go of size our then good from XX% to a less place start, would probably we go something and than there. or meaning

Laura Havener Hunsicker

do $X small? too what's too $X How you Is billion billion too that? Is think Okay. And small? then about small?

Jeffrey Tengel

sense than less And there highly unless moving small, is that it. return hurdles suppose about and closer. something to think would deal kind is that there, would would billion we $X from consider franchise, had getting a up $X to of I would was I financially our so made and we was the too we be add unusual we if then billion where thought value billion $X business that. do contiguous and highly, And met

Laura Havener Hunsicker

what's asset do then on management acquisition the there? that think side? And Okay. How about you

Jeffrey Tengel

are water. in blow difficult and time. so they're We just this mean the that that that getting private private paying much and acquisitions love been equity rolled to the because market -- a up though do really out we'd they about private looked Well, capital we've I RIAs all equity all there's just and us these there. and the at lot, prices by talk of It's

equation. of And so that's part that

always no, have. we've no. part the times and be And when continue then and to we're want spoken they other bought to no, there's "Oh, RIAs like, they is way The on just

of doesn't of be always resonate Rockland Trust." RIAs. with to part And the some that going You're

of out that knock So us contention. sometimes

-- our looking of I kind to it's Wealth Head lot but a reasons wealth our been of in market So we've and talking for controlling just stated. the difficult is the constantly people, been

Laura Havener Hunsicker

you. you. Got Got

is your Can about strong Okay. position super look that? bit speak It like capital to you there to a little didn't the certainly, think And you quarter. right were buybacks now. in how

Mark Ruggiero

Yes.

have late the announced not announced finished earlier after We a we the was plan up completing and previously year. last in year, buyback that plan

constant the very be of certainly, overall think part continue capital it's very, So to I strong. levels conversation

of we So makes the where a there lot and I hitting were pause uncertainty. sense. of importance conversation there's think that But capital button we the and having understand comfortable environments preserving

it's internally as endeavors. a plan So going some to be put But capital continuous just we we're flexibility future do right for now, whether place. levels to we with conversation I gives of because another us believe it in think excess comfortable

Laura Havener Hunsicker

you. Got

Mark, How And Okay. be sitting should be? about loan-to-deposit is then, thinking you at where that want do your that? to now ratio ideally XXX%, we

Mark Ruggiero

to to XX% Laurie, just period end. actually we're down Look, at clarify,

or we X. We've the a quarter, So been haven't approached XX%, over quarter around XX% XXX%. last

So target in are XXs, get conversation here really We're some of of time second the deposit we've good here. the top mind. bank the levels. that around progress sort to. be want have get that's made continues comfortable Every we that's And over I'd to say focus in back closer that we operating to quarter the low to those a growth to historically

into march the back So to ideally that's the down continued XXs. low get

Laura Havener Hunsicker

Got you.

Okay.

like of typo things. on couple here Sorry. a had Slide back I X. a office And my model. then just It circling to looks

have like for that's looks about if million occupancy looking credit? going you just that the million, of Can it's the us it renew? $XX.X is it? And 'XX. assume I'm to then I you XQ said think one help What you $XX.X

million do question about again, that looking million? then same those? details that the you vacancy vacancy us have Can And on is rate way any $XX.X that either XQ occupancy relationship, what from that use million any for you for 'XX, that? mix $XX $XX or then And give

Mark Ruggiero

Yes.

loans $XX million. see the or know for credits maybe up credits. make quarters. the just next million So maturity, get extend renew, would million migration. out last X the million level case make or general, that negative have we've quarters the and of we've pass been $XX the the $XX rating all those I'll very how don't But pass experience over I I'd over payoff. to to with quarters, start. many credits X I the All the and up don't how expect would loans I little in with expect in able rate many coming $XX seen we And be up some the

I that's renew third The question, to criticized without in of the $XX occupancy that expecting indicated, any think in terms million as I we quarter, in don't level maturing the feel of front issues. about have me. in that good really one I But Mark's

think there So occupancy is pretty I good.

we I larger The said, as $XX fourth have to is I an we're that that's down is facility exit, occupancy that. it's think million occupancy about pursue there. like that quarter. XX%. a coming here is $XX to opportunity likely in that indicated, get one going million good due But is, The to to much the we if there's extension that XX% the as or

here. So is second the half up concern in expectations flow cash coming there

Laura Havener Hunsicker

it. Got

Okay. around is And million or C? XQ, more the in XQ $XX of how buckets, in then $XX and X million this. just much that XQ, in one These B Class $XX question million

Mark Ruggiero

if future breakdown the Do I don't that that? maturities. have I have I know on

Jeffrey Tengel

$XX is B/C $XX Class million QX, A. 'XX Class that's million The probably. I in QX mean, in the

Mark Ruggiero

Yes.

The me, Laurie. other smaller loans, front I don't of have in

Laura Havener Hunsicker

Okay.

here. come then Is for up... quick to And XX% about Mark, how level XXXX, say be Tax going question that? one also Great. that it Okay. rate should we or thinking last just to

Mark Ruggiero

rest of the For XXXX?

Laura Havener Hunsicker

to I'm sorry, XXXX, sorry, -- rest the of apologies. my

gave XXXX. You

looking what XXXX, be look forward, For we like? as should that

Mark Ruggiero

Yes.

XX% think now. I proxy a is for around good

Operator

And Moss James. from with our come Steve will Raymond next question

Stephen Moss

margin. the starting pivot just the in see terms margin Jeff, good here maybe the with the to here -- of on

forward versus repricing? year, your see to just asset flows think a about for curious it's function lower to it I is more of but funding it or or half if drivers second assets reprice the cash of moderate the continuing your costs funding Just bigger of here kind continue remainder as here, we going as the

Mark Ruggiero

both. that It's Mark, take actually be This to going one. is Yes. I'll Steve.

repricing maturity on average, we're in either point us, of X coming probably basis the terms or giving book, loan for that's each we just up lift margin on the So on been what's X quarter. seeing or

in Just replaced off lower what's better and of with at rates terms rolling being pricing.

being about in the higher runoff talked gives past. natural lift. maturities We of just points assets, hedge with So replaced the X X portfolio us to earning basis

So we a on at had had put loan macro-level into on We those ago. of number the SOFR lower years much X-month fixed hedges entered rates. that book

back essence, As those mature, to start those loans to floating that. rate with you're and loans in revert getting the associated lift

those just maturing million. quarter, in by the mature So we $XXX well, had the nothing allowing $XXX the hedges million quarter. as to second but $XXX fourth There's million third another in mature, then in

a So point about been X that on us dynamic on loan a yields has quarterly basis basis. lift giving

or then book is roll getting quarter. us give take, loan basis that's much yields, growth off redeployed at or allowing securities And cash lower given point on flow to X a the off either lastly, into another borrowings. by that paying And

hedges continue. quarter. overall deposit between the that's second growth and I'd increase, that ability to those the overnight in your is of second to allow us assets is borrowings. in pay much securities, saw much to expect the you higher cost the you what which What pretty the the the also So about down point earning quarter the saw of repricing loans, basis XX a

deposits If the big them. into And that should I think funding the CDs was having not impact is dynamic getting as we and/or only able an point overall deposits. other though the points, significantly deposits basis to basis should cost even cost points. cost X continue think improved that stabilize the And the are be up high-priced where second up you're of of and now on mix the XX I of such So to grow half. deposits of overall rate-sensitive funding

increased continue overall would funding that say, in So I single-digit stay, high mode. costs to should

of So the that should result in NIM modest some net-net all expansion.

Stephen Moss

kind curious environment? then just later rate terms in next helpful. and of about feeling a here, couple get here into of how year this if you kind Okay. year, in guys of cuts That's the Fed And cuts margin we of that are

Mark Ruggiero

Yes.

over I think community. scenario. longer of in we've the cuts rate to lot I'd absorb or talked feel our couple much say, about with good investor position a being a really sheet, I neutral a the higher either for more quarters balance last

So short curve. we now XX% the book that end are the sitting reprices the to of about with of XX% off

hedges think to on Some by I the of exception to place. we as that as side have the being we on But the CDs that have the in of that did short the still pricing. able offset especially deposit some is ability move we mitigated keeping with and

first would the I not the I'm that margin of improve. months predict Fed camp in the within that a X cut you'll see

on side. we'll I some side pressure loans. X-month little yield will the a in to bit think to on of enough see rate deposit offset the take time think floating where it I funding on X- Fed window, get should the if the a But cuts, we be to able

think I going forward, And able means long curve margin So we advantage slope term. the better the short a a to in just saying, then run. take Fed or of that normal have long only cuts flattening a of think be levers way in we'll I

Stephen Moss

I No, you hear Right. there.

then there's then lot that. C&I a a about know one the you that in criticized Appreciate offers the terms but And know we of Okay. largest I talked of I X and underneath. just being the in -- the in office, have, terms nonperformers

resolution Just where you on of an update stand those credits? on

Mark Ruggiero

Yes, is bankruptcy the a C&I, situation. relationship in that

sales just really we're repayment. collateral through to allow working for be would what hopefully, So

the we got we the sorry, slightly reserve was on to felt I'm appropriate in -- quarter. second appraisal that here the based increase So it so recently, in third quarter,

of understanding have under appropriate now given million is we we our of believe, slightly $X So collateral. which the the reserve, of value

an have So resolution there, the feel but immediate contained. I loss there's well we don't think we

on sale million. $X books the note nonperforming where expectations will the one a earlier had That's I'd sale, office back took sale. give think And on unfortunately, again, well, note expectations that larger feel a we on resolve. that but note potential we there's through over protection little now it's should year, of another or fourth in $XX say, quarter. similar charge-off a for million took the the the a we That on based -- we the us now for charge-off fallen similar resolution. of ultimately in

exposure ultimately as that, we I in those there through the loss have part, believe bit So as noise noted is we assets. of loss prepared of There little feel script resolution. the nonperforming my But it I most kind in might a we they be that contained for think behind a that come us.

Operator

KBW. from question with [Operator Christopher come Instructions] Our next O'Connell will

Christopher O'Connell

follow and Just on new CDs? the rate current what's I if didn't CD on don't the hear offering up know wanted but to discussion, this, I

Mark Ruggiero

Yes, a part most we that at the promotional X% Chris. rate still, quarter, throughout We'll third assess for certainly. the have

cut for market more a But bit offering there. have X% As a right still out we expectations clear. a now, become

Christopher O'Connell

any products Got reduced on it. have you offering, And guys pricing deposit year-to-date?

Mark Ruggiero

We deposit about much where at too at for most we're part, I'd conversations market, the look typically bi-weekly our pricing. say pricing. the don't want We to But looking have we competition. talk constantly deposit

to appropriate. when second the So half. feel And we'll we do through so we continue adjust

Christopher O'Connell

much that pretty into is general. robust planning? to range discussion, come the your is Got the have X.XX%, CRE -- term? a to over operate the is long ratio or in medium you strategic forward of levels down target there But there it. CRE how level Is kind capital want or concentration And on concentration the ratio at you M&A guys this quarter

deter any would into M&A it forward pursuing increase from away level, certain -- that whether discussions you if of potential going it an that would that factor to a does it? is will acquisition And kind

Jeffrey Tengel

like we'd we of this in, would then, feel of the position in took I your Yes. past of below that I We've XXX%. I'll start and in benchmarks, years been answer to XXX%. that ratio really well if because one first to question, that. regulatory below Mark, to be part you like want excess be where say, add the ratio an in that's and exact acquisition our of to But mean free.

XXX%? that have it we're is working se, down. that So a know don't And XXX%, like it per is I we target

business room enough should commercial We're We're underneath The we're some to it it continue from good which flexibility walking go be. to transactional over good about that not so acquired way footprint, that of I think back not We're estate trying to our away real I estate walking whether we commercial we've otherwise. support And and providing then that relationships. I what real give is them. service to think being can or us to XXX%, clients they're the want strategic at, business. or the reduce years, our is really it from the away below in want

of what and don't I real respect kind limiting. about that said ideal it's a of to would be I target, deal size our acquisitions, given I With and estate a potential the had target itself of size in think at earlier specific, guess concentration commercial

here problematic it's in to then our all But progress But we again, as and then make what getting depend ratio today. going where overly target sit to continued real how down land. would that I much be don't it ratios, commercial and see on does the estate I be

Mark Ruggiero

getting sheet thinking a And I'll there's a to and team executing see that some balance forma Chris, isn't with with plan makes result can pro deal that on just think conjunction of new comfortable restructure we're balance sheet of a level add, that in the we sense. about I a

at So is all comfortable meets if looking be some sure with where I the level balance think restructure, and for. incorporated it's making a sheet deal modeling that still in strategy there's a of looking involved returns we'd and the we're there

Christopher O'Connell

growth level and helpful. about Really of mix net term. of the And kind medium thinking Great. the

You the to books you'd the move general CRE kind Any now on sheet on over like sense the of that's just the mentioned Even balance and the the right to on is CRE on on transactional that what core number. of time? focus dollar amount trying exit time relationships. transactional over

Jeffrey Tengel

don't I We Yes. say have the Savings as obvious, an like a legacy know quite exiting definitely it's would some we the client. we're relationships. transactions, real estate." big skewed towards of bucket are mean transactional of that small East of active of participant Bank really and "commercial Boston reducing But I think even them don't really with we I deal right? a a dialogue have and and some about those some specific

for other for Savings done, any one did that's ask be loan could they've did or didn't they all business. this Boston East Some really maybe loan client, we but one --

have So we're relationships", transactions the first. have we to conversation borrower idea some open actually be that the "can with to but of these the

And we've know for of the part I commercial real better this our with mean that. all so about our bankers talking been X months estate teams.

to it's And of one. million, kind where goes like And It's that can each back matters, our I it's $XXX tag each evaluating $XXX running. we're not line so they know say relationship play the we're million, again, it's

Mark Ruggiero

little the point, I There's of some think And of majority portfolios there's in the of consider way portfolios. I'd of transactional. much not certainly acquired I a is -- say mostly we say Rockland very concentrated Jeff's -- lot would -- to it's in it's a what acquired the would the it legacy originations. either.

of I those. it's a think segment

we're away of And the talking that relationships be I can in that relationships, been that's types the of move forward. those to you're if to we about, of part the office looking those be particular, some referring in think those of from going we've itself manifest that seeing playbook are going proactively exits some some to, where

Christopher O'Connell

issue specific And Any around the classified credit extending to back maturity 'XX gets to XX% not, XX% with solve doesn't the If there occupancy, circling how like resolved the it thoughts maturity that XQ' is thoughts around XX% any just really what to that now that's seems maturity given already and the -- occupancy. XX% just a the Great. credit? reserves set date that probably? between to office the then or

Jeffrey Tengel

work borrower looks selling exploring the terms a if We're also solution the on bar getting specific moment. that appraisal, going here. we're what we insight paths we're come we can't there's a feel things, lot idea that. will future or And on middle of of and not give into have with just the against trying Yes. updated is multiple some one of think is -- working reserve the to with see a and the can't I don't a there. We're which an of we like it maybe down couple We're the to whether through appropriate. like credits the at us One the I'll like. in feel -- loan. we we If

is each no of And than so different one is that. again, that This and these one different.

say, couple mind a proactive. in We We're that very different But -- to the of out. a of have has sitting we're push what my we for lot at are doing waiting important trying and of we're message on is first this?" eyes we're moment. then This lot things I not it here think come here the by about to quarter the being "Oh,

Mark Ruggiero

the communication, And of it know has because the to second be impaired coming into but flows clear, that been to of cash there's we proactive likely date, year. performing half

options So as exploring those we're speak. we

Christopher O'Connell

bids? Great. you and on what waters all at guess, the any at over guys it And discussions, was the in of or kind terms sales around if office nothing went the executed even to have months? if tested X marketing And through actually I so, pricing past XX loan were all of

Jeffrey Tengel

Yes.

a like might water back. of of or market maybe X we We months We loans. in we kind see got ago, dipped portfolio actually a So to for probably when didn't thought be we price what clearing X toe have. the our

thing help or that loss, of of credit for the look going little And reduce And do incur stupid there maybe we're that market of to so some us risk table same a pre -- now. the a see but just we we're specific take we and are level again loans like? think hygiene, is bit don't or outsized we does pools doing the off something losses there would not if the on them. And what go. good loans concentration, take

Christopher O'Connell

not I want again, the -- how obviously, the level but guys levels, big pricing going as is are And you you of disclose, then, the to interest? through the mean, level process

Jeffrey Tengel

pricing of of is whole think a another part guys. that To way investors mean, that's near be the market. it of I in type office is that sort are I described know, of capital from performing these I've I've to much it's the that's kind me I there really heard more a of you levels. And a what for think that as that looking But also looking depends return. honest, pool there's on And higher had loans. market a there's for then par lot

for discount loans try bigger result, where dent a the and kind as can of And return. and a scratch and they're of looking they you type more get a got better

think when portfolio. here reduce the our And what to so have all levers we different are of that about factors into the mix we

Operator

Jeff conclude back closing will for to our this I'd session. And to the turn over remarks. question-and-answer any like conference

Jeffrey Tengel

in great Independent Bank weekend. a Cole, interest Have Thanks, everybody's appreciate and I Corp.

Operator

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

at this You lines time. may your now disconnect

Independent Bank (INDB) 19 Jul 242024 Q2 Earnings call transcript