Business Wire | Jul 22, 2021 04:15PM EDT

Independent Bank Corp. Reports Second Quarter Net Income of $37.6 Million

Jul. 22, 2021

ROCKLAND, Mass.--(BUSINESS WIRE)--Jul. 22, 2021--Independent Bank Corp. (Nasdaq Global Select Market: INDB), parent of Rockland Trust Company, today announced 2021 second quarter net income of $37.6 million, or $1.14 per diluted share, compared to net income of $41.7 million, or $1.26 per diluted share, reported for the first quarter of 2021. Second quarter results included merger related costs of $1.7 million associated with the acquisition of Meridian Bancorp Inc. ("Meridian") and its subsidiary East Boston Savings Bank, which is expected to close in the fourth quarter of 2021. Excluding these merger-related costs, net of tax, operating net income was $38.8 million, or $1.17 per diluted share, for the second quarter of 2021. Please refer to "Reconciliation of Net Income (GAAP) to Operating Net Income (Non-GAAP)" below for a reconciliation of net income to operating net income.

"Our core fundamentals are strong and we are well-positioned to continue to take advantage of growth opportunities as the local economy continues to re-adjust post-pandemic," said Christopher Oddleifson, the Chief Executive Officer of Independent Bank Corp. and Rockland Trust Company. "We have been hard at work on our previously announced merger with Meridian Bancorp./East Boston Savings Bank and are excited about the possibilities the transaction represents for our future. I continue to be inspired by the dedication and effort of my colleagues, and their collective commitment to our customers, the communities we serve, and to each other as we live out our mission of being the bank Where Each Relationship Matters(r)."

BALANCE SHEET

Total assets of $14.2 billion at June 30, 2021 increased by $420.3 million, or 3.1%, from the prior quarter, and by $1.2 billion, or 9.0%, as compared to the year ago period, driven by continued significant growth in deposits, leading to increased liquid assets in the second quarter of 2021.

Total loans at June 30, 2021 decreased by $307.7 million, or 3.3% (13.3% annualized), when compared to the prior quarter which was primarily attributable to a net reduction in Paycheck Protection Program ("PPP") loan balances of $363.7 million, or 43.0%, as the program concluded its second round of funding with focus pivoting toward loan forgiveness. Exclusive of PPP loan activity, total loans increased $55.9 million, or 2.7% on an annualized basis, reflecting a modest, yet positive shift in overall economic activity. Fueling the net growth, commercial loans increased $66.2 million, or 1.1% (4.3% annualized) during the second quarter, primarily due to growth in residential-based commercial real estate projects, as well as 5.0% (19.9% annualized) growth in small business loans, capitalizing on positive momentum from the successful PPP experience and overall market disruption. Partially offsetting these growth factors, construction loan balances decreased 3.8% from the prior quarter, reflecting an accelerated pace of project completion, while modest new fundings and restrained line utilization in the commercial and industrial portfolio continued to challenge growth. Strong closing volumes were experienced within both the residential and home equity portfolios, with a larger portion of residential closings being retained in the portfolio rather than sold into the secondary market compared to prior quarters. However the low interest-rate environment and excess consumer liquidity positions continued to drive elevated payoff activity and historically low home equity line utilization rates.

Deposit balances of $12.0 billion at June 30, 2021 increased by $393.4 million, or 3.4% (13.6% annualized), from the prior quarter, reflecting additional government stimulus payments along with robust new account activity in both consumer and business product categories. With continued reduction in time deposit balances, core deposits rose to 91.6% of total deposits at June 30, 2021, which, combined with the runoff of higher cost time deposits and further rate reductions across all products, contributed to a total cost of deposits for the second quarter of 0.07%, representing a reduction of three basis points when compared to the prior quarter.

The securities portfolio increased by $251.3 million, or 17.6%, when compared to the prior quarter, reflecting a continued direct strategy to deploy a portion of excess cash balances into securities. Total purchases for the quarter were $340.2 million, offset by paydowns, calls, and maturities.

Total borrowings decreased by $4.7 million, or 2.6% when compared to the prior quarter reflecting repayments of outstanding debt.

Stockholders' equity at June 30, 2021 increased by 1.5% (6.1% annualized), as compared to the prior quarter, reflecting continued strong earnings retention. Book value per share increased by $0.78, or 1.5%, to $52.72 during the second quarter as compared to the prior quarter. The Company's ratio of common equity to assets of 12.27% decreased by 18 basis points from the prior quarter and by 57 basis points from the year ago period. The Company's tangible book value per share at June 30, 2021 rose by $0.82, or 2.3%, from the prior quarter to $36.78, representing an increase of 6.3% from the year ago period. The Company's ratio of tangible common equity to tangible assets of 8.89% at June 30, 2021 represents a 7 basis point decrease compared to the prior quarter and a 23 basis point decrease compared to the year ago period.

Please refer to Appendix A for a detailed reconciliation of Non-GAAP metrics.

NET INTEREST INCOME

Net interest income for the second quarter decreased to $93.4 million compared to $95.6 million for the prior quarter, driven primarily by reductions in PPP fee recognition as $7.2 million was recognized in the second quarter compared to $9.5 million for the prior quarter. The 2021 second quarter net interest margin was heavily impacted by the Company's increased excess liquidity position, decreasing by 26 basis points from the prior quarter to 2.99%. The table below illustrates the changes within the net interest margin for the second quarter:

Net interest margin as of March 31, 2021 3.25 %

Excess liquidity - cash and securities (0.19) %

Loan yields (0.03) %

PPP loan impact (0.06) %

Other noncore adjustments (0.01) %

Decreased cost of funds 0.03 %

Net interest margin as of June 30, 2021 2.99 %

Please refer to Appendix C for additional details regarding the net interest margin.

NONINTEREST INCOME

Noninterest income of $25.0 million for the second quarter of 2021 was $279,000, or 1.1%, lower than the prior quarter. Significant changes in noninterest income for the second quarter compared to the prior quarter included the following:

* Deposit account fees increased by $238,000, or 6.6%, primarily driven by overdraft fees.

* Interchange and ATM fees increased by $348,000, or 12.8%, due primarily to increased volume during the second quarter, reflecting a rise in customer spending.

* Investment management income increased by $568,000, or 6.8%, due primarily to an increase in assets under administration along with seasonal tax preparation fees during the second quarter. Assets under administration increased by 4.3% from the prior quarter to a record high of $5.4 billion as of June 30, 2021.

* Mortgage banking income decreased by $3.0 million, or 52.9%, reflecting a larger portion of new originations retained in the Company's portfolio versus sold into the secondary market, coupled with gain on sale margin compression during the quarter.

* Income from bank owned life insurance policies increased $266,000, or 20.1%, reflecting the full quarter impact of $40.0 million in new policies purchased during the first quarter of 2021.

* Other noninterest income increased by $1.7 million, or 52.5%, primarily attributable to $1.1 million in income recognized from other investments, unrealized gains on equity securities, and an increase in income from like-kind exchanges.

NONINTEREST EXPENSE

Noninterest expense of $73.3 million for the second quarter of 2021 was $3.6 million, or 5.2% higher than the prior quarter. Significant changes in noninterest expense for the second quarter compared to the prior quarter included the following:

* Salaries and employee benefits increased by $2.7 million, or 6.9%, mainly due to increases in incentive compensation, general salaries, and other commissions. These increases were offset partially by decreases in medical plan insurance expenses and payroll taxes.

* Occupancy and equipment decreased by $567,000, or 6.1%, mainly due to decreases in snow removal costs and cleaning expenses.

* FDIC assessment decreased by $275,000, or 26.2%, reflecting a lower fee for the quarter along with a refund of prior period assessment fees of approximately $109,000.

* During the second quarter of 2021 there were $1.7 million of merger and acquisition expenses relating to the Meridian acquisition. No such costs were incurred during the first quarter of 2021.

* Other noninterest expense remained flat, primarily due to decreases in consultant fees and card issuance costs, partially offset by increases in legal fees, director expenses related to equity compensation during the quarter and additional reserve for unfunded commitments.

The Company generated a return on average assets and a return on average common equity of 1.08% and 8.70%, respectively, for the second quarter of 2021, as compared to 1.26% and 9.87%, respectively, for the prior quarter. On an operating basis, return on average assets and return on average common equity were 1.12% and 8.98%, respectively, for the second quarter of 2021.

The tax rate of 24.9% for the second quarter was higher than the prior quarter rate of 22.3%, which included $1.4 million of discrete tax benefits related primarily to low income housing tax credits and equity compensation.

ASSET QUALITY

During the second quarter, the Company recorded total net charge-offs of $192,000, or 0.01% of average loans on an annualized basis. Nonperforming loans decreased by 19.2% to $47.8 million, or 0.53% of total loans at June 30, 2021, as compared to $59.2 million, or 0.64% of total loans at March 31, 2021. The decrease was primarily attributable to the full pay-off of one large commercial loan during the second quarter.

In addition, total loans subject to a payment deferral remained relatively consistent with the prior quarter, amounting to $233.8 million, or 2.6% of total loans at June 30, 2021, with the highest concentration remaining in the accommodation portfolio. The majority of the loans subject to a payment deferral at June 30, 2021 were characterized as current loans. As such, delinquency as a percentage of total loans remained low at 0.11% as of June 30, 2021, representing a decrease of one basis point from the prior quarter. Please refer to Appendix E for additional details regarding loans whose terms have been modified as a result of the COVID-19 pandemic.

The Company recorded credit reserve releases of $5.0 million during the second quarter of 2021, reflecting continued improvement in asset quality metrics and overall macro-economic assumptions. The allowance for credit losses on total loans was $102.4 million at June 30, 2021, or 1.15% of total loans, as compared to $107.5 million at March 31, 2021, or 1.16% of total loans. The allowance for credit losses as a percentage of total loans, excluding PPP loans, was 1.21% and 1.28% at June 30, 2021 and March 31, 2021, respectively. Please refer to Appendix D for information regarding loan exposures within industries deemed highly impacted by the COVID-19 pandemic.

CONFERENCE CALL INFORMATION

Christopher Oddleifson, Chief Executive Officer, Robert Cozzone, Chief Operating Officer, Mark Ruggiero, Chief Financial Officer, and Gerard Nadeau, President and Chief Commercial Banking Officer will host a conference call to discuss second quarter earnings at 10:00 a.m. Eastern Time on Friday, July 23, 2021. Internet access to the call is available on the Company's website at www.RocklandTrust.com or via telephonic access by dial-in at 1-888-336-7153 reference: INDB. A replay of the call will be available by calling 1-877-344-7529, Replay Conference Number: 10157162 and will be available through August 6, 2021. Additionally, a webcast replay will be available until July 23, 2022.

ABOUT INDEPENDENT BANK CORP.

Independent Bank Corp. (NASDAQ Global Select Market: INDB) is the holding company for Rockland Trust Company, a full-service commercial bank headquartered in Massachusetts. Rockland Trust was named to The Boston Globe's "Top Places to Work" 2020 list, an honor earned for the 12th consecutive year. In 2021, Rockland Trust was ranked the #1 Bank in Massachusetts according to Forbes World's Best Banks list for the second year in a row. Rockland Trust has a longstanding commitment to equity and inclusion. This commitment is underscored by initiatives such as Diversity and Inclusion leadership training, a colleague Allyship mentoring program, and numerous Employee Resource Groups focused on providing colleague support and education, reinforcing a culture of mutual respect and advancing professional development, and Rockland Trust's sponsorship of diverse community organizations through charitable giving and employee-based volunteerism. In addition, Rockland Trust is deeply committed to the communities it serves, as reflected in the overall "Outstanding" rating in its most recent Community Reinvestment Act performance evaluation. Rockland Trust offers a wide range of banking, investment, and insurance services. The Bank serves businesses and individuals through approximately 100 retail branches, commercial and residential lending centers, and investment management offices in eastern Massachusetts, including Greater Boston, the South Shore, Cape Cod and Islands, Worcester County, and Rhode Island. Rockland Trust also offers a full suite of mobile, online, and telephone banking services. Rockland Trust is an FDIC member and an Equal Housing Lender. To find out why Rockland Trust is the bank "Where Each Relationship Matters(r)," please visit RocklandTrust.com.

This press release contains certain "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995 with respect to the financial condition, results of operations and business of the Company. These statements may be identified by such forward-looking terminology as "expect," "achieve," "plan," "believe," "future," "positioned," "continued," "will," "would," "potential," or similar statements or variations of such terms. Actual results may differ from those contemplated by these forward-looking statements.

Factors that may cause actual results to differ materially from those contemplated by such forward-looking statements include, but are not limited to:

* further weakening in the United States economy in general and the regional and local economies within the New England region and the Company's market area, including future weakening caused by the COVID-19 pandemic; * the length and extent of economic contraction as a result of the COVID-19 pandemic; * unanticipated loan delinquencies, loss of collateral, decreased service revenues, and other potential negative effects on our business caused by severe weather, pandemics or other external events; * adverse changes or volatility in the local real estate market; * adverse changes in asset quality and any unanticipated credit deterioration in our loan portfolio including those related to one or more large commercial relationships; * acquisitions may not produce results at levels or within time frames originally anticipated and may result in unforeseen integration issues or impairment of goodwill and/or other intangibles; * additional regulatory oversight and related compliance costs, including the additional costs associated with the Company's increase in assets to over $10 billion; * changes in trade, monetary and fiscal policies and laws, including interest rate policies of the Board of Governors of the Federal Reserve System; * higher than expected tax expense, resulting from failure to comply with general tax laws and changes in tax laws; * changes in market interest rates for interest earning assets and/or interest bearing liabilities and changes related to the phase-out of LIBOR; * increased competition in the Company's market areas; * adverse weather, changes in climate, natural disasters, the emergence of widespread health emergencies or pandemics, including the magnitude and duration of the COVID-19 pandemic, other public health crises or man-made events could negatively affect our local economies or disrupt our operations, which would have an adverse effect on our business or results of operations; * a deterioration in the conditions of the securities markets; * a deterioration of the credit rating for U.S. long-term sovereign debt; * inability to adapt to changes in information technology, including changes to industry accepted delivery models driven by a migration to the internet as a means of service delivery; * electronic fraudulent activity within the financial services industry, especially in the commercial banking sector; * adverse changes in consumer spending and savings habits; * the effect of laws and regulations regarding the financial services industry; * changes in laws and regulations (including laws and regulations concerning taxes, banking, securities and insurance) generally applicable to the Company's business; * the Company's potential judgments, claims, damages, penalties, fines and reputational damage resulting from pending or future litigation and regulatory and government actions, including as a result of our participation in and execution of government programs related to the COVID-19 pandemic; * changes in accounting policies, practices and standards, as may be adopted by the regulatory agencies as well as the Public Company Accounting Oversight Board, the Financial Accounting Standards Board, and other accounting standard setters including, but not limited to, changes to how the Company accounts for credit losses; * cyber security attacks or intrusions that could adversely impact our businesses; and * other unexpected material adverse changes in our operations or earnings.

Further, the foregoing factors may be exacerbated by the ultimate impact of the COVID-19 pandemic, which is unknown at this time. Statements about the COVID-19 pandemic and its potential impact on our business, financial condition, liquidity and results of operations may constitute forward-looking statements and are subject to the risk that actual results may differ, possibly materially, from what is reflected in such statements due to factors and future developments that are uncertain, unpredictable and, in many cases, beyond our control, including the scope, duration and extent of the pandemic and any resurgences, actions taken by governmental authorities in response to the pandemic and the direct and indirect impact on the Company's employees, customers, business and third-parties with which the Company conducts business.

The Company wishes to caution readers not to place undue reliance on any forward-looking statements as the Company's business and its forward-looking statements involve substantial known and unknown risks and uncertainties described in the Company's Annual Report on Form 10-K and subsequent Quarterly Reports on Form 10-Q ("Risk Factors"). Except as required by law, the Company disclaims any intent or obligation to update publicly any such forward-looking statements, whether in response to new information, future events or otherwise. Any public statements or disclosures by the Company following this release which modify or impact any of the forward-looking statements contained in this release will be deemed to modify or supersede such statements in this release. In addition to the information set forth in this press release, you should carefully consider the Risk Factors.

This press release contains financial information determined by methods other than in accordance with accounting principles generally accepted in the United States of America ("GAAP"). This information includes operating net income and operating earnings per share ("EPS"), operating return on average assets, operating return on average common equity, core net margin, tangible book value per share and the tangible common equity ratio.

Operating net income, operating EPS, operating return on average assets and operating return on average common equity exclude items that management believes are unrelated to the Company's core banking business such as merger and acquisition expenses, and other items, if applicable. Management uses operating net income and related ratios and operating EPS to measure the strength of the Company's core banking business and to identify trends that may to some extent be obscured by such items. Management reviews its core net interest margin to determine any items that may impact the net interest margin that may be one-time in nature or not reflective of its core operating environment, such as out-sized cash balances, unique low-yielding loans originated through government programs in response to the pandemic, or significant purchase accounting adjustments. Management believes that adjusting for these items to arrive at a core margin provides additional insight into the operating environment and how management decisions impact the net interest margin. Similarly, management reviews certain loan metrics such as growth rates and allowance as a percentage of total loans, adjusted to exclude loans that are not considered part of its core portfolio, which includes loans originated in association with government sponsored and guaranteed programs in response to the pandemic, to arrive at adjusted numbers more representative of the core growth of the portfolio and core reserve to loan ratio.

Management also supplements its evaluation of financial performance with analysis of tangible book value per share (which is computed by dividing stockholders' equity less goodwill and identifiable intangible assets, or "tangible common equity", by common shares outstanding), the tangible common equity ratio (which is computed by dividing tangible common equity by "tangible assets", defined as total assets less goodwill and other intangibles). The Company has included information on tangible book value per share and the tangible common equity ratio because management believes that investors may find it useful to have access to the same analytical tools used by management. As a result of merger and acquisition activity, the Company has recognized goodwill and other intangible assets in conjunction with business combination accounting principles. Excluding the impact of goodwill and other intangibles in measuring asset and capital values for the ratios provided, along with other bank standard capital ratios, provides a framework to compare the capital adequacy of the Company to other companies in the financial services industry.

These non-GAAP measures should not be viewed as a substitute for operating results and other financial measures determined in accordance with GAAP. An item which management deems to be noncore and excludes when computing these non-GAAP measures can be of substantial importance to the Company's results for any particular quarter or year. The Company's non-GAAP performance measures, including operating net income, operating EPS, operating return on average assets, operating return on average common equity, core net margin, tangible book value per share and the tangible common equity ratio, are not necessarily comparable to non-GAAP performance measures which may be presented by other companies.

Category Earnings Releases

INDEPENDENT BANK CORP. FINANCIAL SUMMARY

CONSOLIDATED BALANCE SHEETS

(Unaudited, dollars % Change % Changein thousands)

Jun 2021 Jun 2021 June 30 March 31 June 30 vs. vs. 2021 2021 2020 Mar 2021 Jun 2020

Assets

Cash and due from $ 141,953 $ 126,651 $ 131,615 12.08 % 7.85 %banks

Interest-earning 2,114,477 1,642,688 974,105 28.72 % 117.07 %deposits with banks

Securities

Trading 3,439 3,269 2,541 5.20 % 35.34 %

Equities 22,975 22,419 20,810 2.48 % 10.40 %

Available for sale 794,516 600,213 420,517 32.37 % 88.94 %

Held to maturity 861,821 805,529 731,026 6.99 % 17.89 %

Total securities 1,682,751 1,431,430 1,174,894 17.56 % 43.23 %

Loans held for sale 25,561 41,632 45,395 (38.60) % (43.69) %

Loans

Commercial and 1,726,498 2,086,671 2,004,645 (17.26) % (13.88) %industrial

Commercial real 4,251,543 4,177,617 4,071,047 1.77 % 4.43 %estate

Commercial 496,539 516,362 537,788 (3.84) % (7.67) %construction

Small business 182,863 174,211 170,288 4.97 % 7.38 %

Total commercial 6,657,443 6,954,861 6,783,768 (4.28) % (1.86) %

Residential real 1,240,279 1,241,789 1,431,129 (0.12) % (13.34) %estate

Home equity - first 606,332 610,907 650,922 (0.75) % (6.85) %position

Home equity -subordinate 412,076 417,588 469,601 (1.32) % (12.25) %positions

Total consumer real 2,258,687 2,270,284 2,551,652 (0.51) % (11.48) %estate

Other consumer 22,858 21,546 24,228 6.09 % (5.65) %

Total loans 8,938,988 9,246,691 9,359,648 (3.33) % (4.49) %

Less: allowance for (102,357) (107,549) (112,176) (4.83) % (8.75) %credit losses

Net loans 8,836,631 9,139,142 9,247,472 (3.31) % (4.44) %

Federal Home Loan 9,079 10,250 15,090 (11.42) % (39.83) %Bank stock

Bank premises and 117,435 115,945 122,172 1.29 % (3.88) %equipment, net

Goodwill 506,206 506,206 506,206 - % - %

Other intangible 20,370 21,689 25,996 (6.08) % (21.64) %assets

Cash surrendervalue of life 242,963 241,365 198,124 0.66 % 22.63 %insurance policies

Other assets 496,781 496,916 581,431 (0.03) % (14.56) %

Total assets $ 14,194,207 $ 13,773,914 $ 13,022,500 3.05 % 9.00 %

Liabilities andStockholders' Equity

Deposits

Noninterest-bearing $ 4,370,852 $ 4,136,259 $ 3,694,559 5.67 % 18.31 %demand deposits

Savings andinterest checking 4,445,903 4,242,235 3,896,024 4.80 % 14.11 %accounts

Money market 2,352,897 2,346,985 2,034,021 0.25 % 15.68 %

Time certificates 817,319 868,045 1,092,217 (5.84) % (25.17) %of deposit

Total deposits 11,986,971 11,593,524 10,716,821 3.39 % 11.85 %

Borrowings

Federal Home Loan 35,693 35,717 145,770 (0.07) % (75.51) %Bank borrowings

Long-term 23,425 28,099 37,433 (16.63) % (37.42) %borrowings, net

Junior subordinated 62,852 62,851 62,850 - % - %debentures, net

Subordinated 49,743 49,720 49,648 0.05 % 0.19 %debentures, net

Total borrowings 171,713 176,387 295,701 (2.65) % (41.93) %

Total deposits and 12,158,684 11,769,911 11,012,522 3.30 % 10.41 %borrowings

Other liabilities 293,901 288,632 338,286 1.83 % (13.12) %

Total liabilities 12,452,585 12,058,543 11,350,808 3.27 % 9.71 %

Stockholders' equity

Common stock 329 329 328 - % 0.30 %

Additional paid in 948,130 946,002 942,685 0.22 % 0.58 %capital

Retained earnings 763,596 741,883 676,834 2.93 % 12.82 %

Accumulated othercomprehensive 29,567 27,157 51,845 8.87 % (42.97) %income, net of tax

Total stockholders' 1,741,622 1,715,371 1,671,692 1.53 % 4.18 %equity

Total liabilitiesand stockholders' $ 14,194,207 $ 13,773,914 $ 13,022,500 3.05 % 9.00 %equity

CONSOLIDATED STATEMENTS OF INCOME

(Unaudited, dollars in thousands, except per share data)

Three Months Ended

% Change

% Change

June 302021

March 312021

June 302020

Jun 2021 vs.

Jun 2021 vs.

Mar 2021

Jun 2020

Interest income

Interest on federal funds sold and short-term investments

$

513

$

326

$

132

57.36

%

288.64

%

Interest and dividends on securities

7,189

6,632

7,840

8.40

%

(8.30)

%

Interest and fees on loans

88,814

92,383

91,634

(3.86)

%

(3.08)

%

Interest on loans held for sale

186

296

359

(37.16)

%

(48.19)

%

Total interest income

96,702

99,637

99,965

(2.95)

%

(3.26)

%

Interest expense

Interest on deposits

2,017

2,711

7,027

(25.60)

%

(71.30)

%

Interest on borrowings

1,331

1,342

1,840

(0.82)

%

(27.66)

%

Total interest expense

3,348

4,053

8,867

(17.39)

%

(62.24)

%

Net interest income

93,354

95,584

91,098

(2.33)

%

2.48

%

Provision for credit losses

(5,000)

(2,500)

20,000

100.00

%

(125.00)

%

Net interest income after provision for credit losses

98,354

98,084

71,098

0.28

%

38.34

%

Noninterest income

Deposit account fees

3,822

3,584

2,829

6.64

%

35.10

%

Interchange and ATM fees

3,068

2,720

5,214

12.79

%

(41.16)

%

Investment management

8,872

8,304

7,296

6.84

%

21.60

%

Mortgage banking income

2,705

5,740

5,005

(52.87)

%

(45.95)

%

Increase in cash surrender value of life insurance policies

1,589

1,323

1,312

20.11

%

21.11

%

Gain on life insurance benefits

-

258

335

(100.00)

%

(100.00)

%

Loan level derivative income

116

173

2,864

(32.95)

%

(95.95)

%

Other noninterest income

4,795

3,144

3,335

52.51

%

43.78

%

Total noninterest income

24,967

25,246

28,190

(1.11)

%

(11.43)

%

Noninterest expenses

Salaries and employee benefits

42,635

39,889

37,269

6.88

%

14.40

%

Occupancy and equipment expenses

8,706

9,273

9,273

(6.11)

%

(6.11)

%

Data processing and facilities management

1,686

1,665

1,459

1.26

%

15.56

%

FDIC assessment

775

1,050

503

(26.19)

%

54.08

%

Merger and acquisition expense

1,731

-

-

100.00%

100.00%

Other noninterest expenses

17,769

17,805

18,103

(0.20)

%

(1.84)

%

Total noninterest expenses

73,302

69,682

66,607

5.20

%

10.05

%

Income before income taxes

50,019

53,648

32,681

(6.76)

%

53.05

%

Provision for income taxes

12,447

11,937

7,779

4.27

%

60.01

%

Net Income

$

37,572

$

41,711

$

24,902

(9.92)

%

50.88

%

Weighted average common shares (basic)

33,033,578

32,995,332

32,944,761

Common share equivalents

21,270

30,098

28,098

Weighted average common shares (diluted)

33,054,848

33,025,430

32,972,859

Basic earnings per share

$

1.14

$

1.26

$

0.76

(9.52)

%

50.00

%

Diluted earnings per share

$

1.14

$

1.26

$

0.76

(9.52)

%

50.00

%

Reconciliation of Net Income (GAAP) to Operating Net Income (Non-GAAP):

Net income

$

37,572

$

41,711

$

24,902

Noninterest expense components

Add - merger and acquisition expenses

1,731

-

-

Noncore increases to income before taxes

1,731

-

-

Net tax benefit associated with noncore items (1)

(487)

-

-

Noncore increases to net income

1,244

-

-

Operating net income (Non-GAAP)

$

38,816

$

41,711

$

24,902

(6.94)

%

55.88

%

Diluted earnings per share, on an operating basis

$

1.17

$

1.26

$

0.76

(7.14)

%

53.95

%

(1) The net tax benefit associated with noncore items is determined by assessing whether each noncore item is included or excluded from net taxable income and applying the Company's combined marginal tax rate to only those items included in net taxable income.

Performance ratios

Net interest margin (FTE)

2.99

%

3.25

%

3.25

%

Return on average assets (GAAP) (calculated by dividing net income by average assets)

1.08

%

1.26

%

0.79

%

Return on average assets on an operating basis (Non-GAAP) (calculated by dividing net operating net income by average assets)

1.12

%

1.26

%

0.79

%

Return on average common equity (GAAP) (calculated by dividing net income by average common equity)

8.70

%

9.87

%

5.97

%

Return on average common equity on an operating basis (Non-GAAP) (calculated by dividing net operating net income by average common equity)

8.98

%

9.87

%

5.97

%

CONSOLIDATEDSTATEMENTS OF INCOME

(Unaudited,dollars inthousands, except pershare data)

Three Months Ended

% Change % Change

Jun 2021 Jun 2021 June 30 March 31 June 30 vs. vs. 2021 2021 2020 Mar 2021 Jun 2020

Interest income

Interest onfederalfunds sold $ 513 $ 326 $ 132 57.36 % 288.64 %andshort-terminvestments

Interest anddividends on 7,189 6,632 7,840 8.40 % (8.30) %securities

Interest andfees on 88,814 92,383 91,634 (3.86) % (3.08) %loans

Interest onloans held 186 296 359 (37.16) % (48.19) %for sale

Totalinterest 96,702 99,637 99,965 (2.95) % (3.26) %income

Interest expense

Interest on 2,017 2,711 7,027 (25.60) % (71.30) %deposits

Interest on 1,331 1,342 1,840 (0.82) % (27.66) %borrowings

Totalinterest 3,348 4,053 8,867 (17.39) % (62.24) %expense

Net interest 93,354 95,584 91,098 (2.33) % 2.48 %income

Provisionfor credit (5,000) (2,500) 20,000 100.00 % (125.00) %losses

Net interestincome afterprovision 98,354 98,084 71,098 0.28 % 38.34 %for creditlosses

Noninterest income

Deposit 3,822 3,584 2,829 6.64 % 35.10 %account fees

Interchange 3,068 2,720 5,214 12.79 % (41.16) %and ATM fees

Investment 8,872 8,304 7,296 6.84 % 21.60 %management

Mortgagebanking 2,705 5,740 5,005 (52.87) % (45.95) %income

Increase incashsurrendervalue of 1,589 1,323 1,312 20.11 % 21.11 %lifeinsurancepolicies

Gain on lifeinsurance - 258 335 (100.00) % (100.00) %benefits

Loan levelderivative 116 173 2,864 (32.95) % (95.95) %income

Othernoninterest 4,795 3,144 3,335 52.51 % 43.78 %income

Totalnoninterest 24,967 25,246 28,190 (1.11) % (11.43) %income

Noninterest expenses

Salaries andemployee 42,635 39,889 37,269 6.88 % 14.40 %benefits

Occupancyand 8,706 9,273 9,273 (6.11) % (6.11) %equipmentexpenses

Dataprocessingand 1,686 1,665 1,459 1.26 % 15.56 %facilitiesmanagement

FDIC 775 1,050 503 (26.19) % 54.08 %assessment

Merger andacquisition 1,731 - - 100.00% 100.00%expense

Othernoninterest 17,769 17,805 18,103 (0.20) % (1.84) %expenses

Totalnoninterest 73,302 69,682 66,607 5.20 % 10.05 %expenses

Incomebefore 50,019 53,648 32,681 (6.76) % 53.05 %income taxes

Provisionfor income 12,447 11,937 7,779 4.27 % 60.01 %taxes

Net Income $ 37,572 $ 41,711 $ 24,902 (9.92) % 50.88 %



Weightedaveragecommon 33,033,578 32,995,332 32,944,761 shares(basic)

Common share 21,270 30,098 28,098 equivalents

Weightedaveragecommon 33,054,848 33,025,430 32,972,859 shares(diluted)



Basicearnings per $ 1.14 $ 1.26 $ 0.76 (9.52) % 50.00 %share

Dilutedearnings per $ 1.14 $ 1.26 $ 0.76 (9.52) % 50.00 %share



Reconciliation of Net Income (GAAP) to Operating Net Income (Non-GAAP):

Net income $ 37,572 $ 41,711 $ 24,902

Noninterestexpense components

Add - mergerand 1,731 - - acquisitionexpenses

Noncoreincreases to 1,731 - - incomebefore taxes

Net taxbenefitassociated (487) - - with noncoreitems (1)

Noncoreincreases to 1,244 - - net income

Operatingnet income $ 38,816 $ 41,711 $ 24,902 (6.94) % 55.88 %(Non-GAAP)



Dilutedearnings pershare, on an $ 1.17 $ 1.26 $ 0.76 (7.14) % 53.95 %operatingbasis



(1) The net tax benefit associated with noncore items is determined byassessing whether each noncore item is included or excluded from net taxableincome and applying the Company's combined marginal tax rate to only thoseitems included in net taxable income.



Performance ratios

Net interest 2.99 % 3.25 % 3.25 % margin (FTE)

Return onaverageassets(GAAP)(calculated 1.08 % 1.26 % 0.79 % by dividingnet incomeby averageassets)

Return onaverageassets on anoperatingbasis(Non-GAAP)(calculated 1.12 % 1.26 % 0.79 % by dividingnetoperatingnet incomeby averageassets)

Return onaveragecommonequity(GAAP)(calculated 8.70 % 9.87 % 5.97 % by dividingnet incomeby averagecommonequity)

Return onaveragecommonequity on anoperatingbasis(Non-GAAP)(calculated 8.98 % 9.87 % 5.97 % by dividingnetoperatingnet incomeby averagecommonequity)

CONSOLIDATED STATEMENTS OF INCOME

(Unaudited, dollars in thousands, except per share data)

Six Months Ended

% Change

June 302021

June 302020

Jun 2021 vs.

Jun 2020

Interest income

Interest on federal funds sold and short-term investments

$

839

$

292

187.33

%

Interest and dividends on securities

13,821

15,806

(12.56)

%

Interest and fees on loans

181,197

190,656

(4.96)

%

Interest on loans held for sale

482

591

(18.44)

%

Total interest income

196,339

207,345

(5.31)

%

Interest expense

Interest on deposits

4,728

17,919

(73.61)

%

Interest on borrowings

2,673

4,024

(33.57)

%

Total interest expense

7,401

21,943

(66.27)

%

Net interest income

188,938

185,402

1.91

%

Provision for credit losses

(7,500)

45,000

(116.67)

%

Net interest income after provision for credit losses

196,438

140,402

39.91

%

Noninterest income

Deposit account fees

7,406

7,799

(5.04)

%

Interchange and ATM fees

5,788

10,110

(42.75)

%

Investment management

17,176

14,125

21.60

%

Mortgage banking income

8,445

5,866

43.97

%

Increase in cash surrender value of life insurance policies

2,912

2,588

12.52

%

Gain on life insurance benefits

258

692

(62.72)

%

Loan level derivative income

289

6,461

(95.53)

%

Other noninterest income

7,939

6,984

13.67

%

Total noninterest income

50,213

54,625

(8.08)

%

Noninterest expenses

Salaries and employee benefits

82,524

74,618

10.60

%

Occupancy and equipment expenses

17,979

18,590

(3.29)

%

Data processing and facilities management

3,351

3,117

7.51

%

FDIC assessment

1,825

503

262.82

%

Merger and acquisition expense

1,731

-

100.00%

Other noninterest expenses

35,574

36,619

(2.85)

%

Total noninterest expenses

142,984

133,447

7.15

%

Income before income taxes

103,667

61,580

68.35

%

Provision for income taxes

24,384

9,927

145.63

%

Net Income

$

79,283

$

51,653

53.49

%

Weighted average common shares (basic)

33,014,561

33,564,596

Common share equivalents

25,085

31,991

Weighted average common shares (diluted)

33,039,646

33,596,587

Basic earnings per share

$

2.40

$

1.54

55.84

%

Diluted earnings per share

$

2.40

$

1.54

55.84

%

Reconciliation of Net Income (GAAP) to Operating Net Income (Non-GAAP):

Net Income

$

79,283

$

51,653

Noninterest expense components

Add - merger and acquisition expenses

1,731

-

Noncore increases to income before taxes

1,731

-

Net tax benefit associated with noncore items (1)

(487)

-

Noncore increases to net income

$

1,244

$

-

Operating net income (Non-GAAP)

$

80,527

$

51,653

55.90

%

Diluted earnings per share, on an operating basis

$

2.44

$

1.54

58.44

%

(1) The net tax benefit associated with noncore items is determined by assessing whether each noncore item is included or excluded from net taxable income and applying the Company's combined marginal tax rate to only those items included in net taxable income.

Performance ratios

Net interest margin (FTE)

3.12

%

3.48

%

Return on average assets (GAAP) (calculated by dividing net income by average assets)

1.17

%

0.86

%

Return on average assets on an operating basis (Non-GAAP) (calculated by dividing net operating net income by average assets)

1.19

%

0.86

%

Return on average common equity (GAAP) (calculated by dividing net income by average common equity)

9.28

%

6.10

%

Return on average common equity on an operating basis (Non-GAAP) (calculated by dividing net operating net income by average common equity)

9.42

%

6.10

%

CONSOLIDATED STATEMENTS OF INCOME

(Unaudited, dollars in thousands, except per share data)

Six Months Ended

% Change

Jun 2021 June 30 June 30 vs. 2021 2020 Jun 2020



Interest income

Interest on federal funds sold and $ 839 $ 292 187.33 %short-term investments

Interest and dividends on securities 13,821 15,806 (12.56) %

Interest and fees on loans 181,197 190,656 (4.96) %

Interest on loans held for sale 482 591 (18.44) %

Total interest income 196,339 207,345 (5.31) %

Interest expense

Interest on deposits 4,728 17,919 (73.61) %

Interest on borrowings 2,673 4,024 (33.57) %

Total interest expense 7,401 21,943 (66.27) %

Net interest income 188,938 185,402 1.91 %

Provision for credit losses (7,500) 45,000 (116.67) %

Net interest income after provision 196,438 140,402 39.91 %for credit losses

Noninterest income

Deposit account fees 7,406 7,799 (5.04) %

Interchange and ATM fees 5,788 10,110 (42.75) %

Investment management 17,176 14,125 21.60 %

Mortgage banking income 8,445 5,866 43.97 %

Increase in cash surrender value of 2,912 2,588 12.52 %life insurance policies

Gain on life insurance benefits 258 692 (62.72) %

Loan level derivative income 289 6,461 (95.53) %

Other noninterest income 7,939 6,984 13.67 %

Total noninterest income 50,213 54,625 (8.08) %

Noninterest expenses

Salaries and employee benefits 82,524 74,618 10.60 %

Occupancy and equipment expenses 17,979 18,590 (3.29) %

Data processing and facilities 3,351 3,117 7.51 %management

FDIC assessment 1,825 503 262.82 %

Merger and acquisition expense 1,731 - 100.00%

Other noninterest expenses 35,574 36,619 (2.85) %

Total noninterest expenses 142,984 133,447 7.15 %

Income before income taxes 103,667 61,580 68.35 %

Provision for income taxes 24,384 9,927 145.63 %

Net Income $ 79,283 $ 51,653 53.49 %



Weighted average common shares 33,014,561 33,564,596 (basic)

Common share equivalents 25,085 31,991

Weighted average common shares 33,039,646 33,596,587 (diluted)



Basic earnings per share $ 2.40 $ 1.54 55.84 %

Diluted earnings per share $ 2.40 $ 1.54 55.84 %



Reconciliation of Net Income (GAAP) to Operating Net Income (Non-GAAP):

Net Income $ 79,283 $ 51,653

Noninterest expense components

Add - merger and acquisition 1,731 - expenses

Noncore increases to income before 1,731 - taxes

Net tax benefit associated with (487) - noncore items (1)

Noncore increases to net income $ 1,244 $ -

Operating net income (Non-GAAP) $ 80,527 $ 51,653 55.90 %



Diluted earnings per share, on an $ 2.44 $ 1.54 58.44 %operating basis



(1) The net tax benefit associated with noncore items is determined byassessing whether each noncore item is included or excluded from net taxableincome and applying the Company's combined marginal tax rate to only thoseitems included in net taxable income.



Performance ratios

Net interest margin (FTE) 3.12 % 3.48 %

Return on average assets (GAAP)(calculated by dividing net income 1.17 % 0.86 % by average assets)

Return on average assets on anoperating basis (Non-GAAP)(calculated by dividing net 1.19 % 0.86 % operating net income by averageassets)

Return on average common equity(GAAP) (calculated by dividing net 9.28 % 6.10 % income by average common equity)

Return on average common equity onan operating basis (Non-GAAP)(calculated by dividing net 9.42 % 6.10 % operating net income by averagecommon equity)

ASSET QUALITY

(Unaudited, dollars in thousands)

Nonperforming Assets At

June 302021

March 312021

June 302020

Nonperforming loans

Commercial & industrial loans

$

20,831

$

29,785

$

20,736

Commercial real estate loans

9,031

9,635

6,313

Small business loans

558

660

619

Residential real estate loans

12,786

13,392

14,561

Home equity

4,517

5,592

6,437

Other consumer

95

137

148

Total nonperforming loans

47,818

59,201

48,814

Total nonperforming assets

$

47,818

$

59,201

$

48,814

Nonperforming loans/gross loans

0.53

%

0.64

%

0.52

%

Nonperforming assets/total assets

0.34

%

0.43

%

0.37

%

Allowance for credit losses/nonperforming loans

214.06

%

181.67

%

229.80

%

Allowance for credit losses/total loans

1.15

%

1.16

%

1.20

%

Delinquent loans/total loans

0.11

%

0.12

%

0.24

%

Nonperforming Assets Reconciliation for the Three Months Ended

June 302021

March 312021

June 302020

Nonperforming assets beginning balance

$

59,201

$

66,861

$

48,040

New to nonperforming

2,233

2,359

8,215

Loans charged-off

(481)

(3,686)

(710)

Loans paid-off

(10,364)

(4,025)

(2,210)

Loans restored to performing status

(2,771)

(2,559)

(4,529)

Other

-

251

8

Nonperforming assets ending balance

$

47,818

$

59,201

$

48,814

ASSET QUALITY

(Unaudited, dollars in Nonperforming Assets Atthousands)

June 30 March 31 June 30 2021 2021 2020

Nonperforming loans

Commercial & industrial loans $ 20,831 $ 29,785 $ 20,736

Commercial real estate loans 9,031 9,635 6,313

Small business loans 558 660 619

Residential real estate loans 12,786 13,392 14,561

Home equity 4,517 5,592 6,437

Other consumer 95 137 148

Total nonperforming loans 47,818 59,201 48,814

Total nonperforming assets $ 47,818 $ 59,201 $ 48,814



Nonperforming loans/gross loans 0.53 % 0.64 % 0.52 %

Nonperforming assets/total 0.34 % 0.43 % 0.37 %assets

Allowance for credit losses/ 214.06 % 181.67 % 229.80 %nonperforming loans

Allowance for credit losses/ 1.15 % 1.16 % 1.20 %total loans

Delinquent loans/total loans 0.11 % 0.12 % 0.24 %



Nonperforming Assets Reconciliation for the Three Months Ended

June 30 March 31 June 30 2021 2021 2020



Nonperforming assets beginning $ 59,201 $ 66,861 $ 48,040 balance

New to nonperforming 2,233 2,359 8,215

Loans charged-off (481) (3,686) (710)

Loans paid-off (10,364) (4,025) (2,210)

Loans restored to performing (2,771) (2,559) (4,529) status

Other - 251 8

Nonperforming assets ending $ 47,818 $ 59,201 $ 48,814 balance

Net Charge-Offs (Recoveries)

Three Months Ended

Six Months Ended

June 302021

March 312021

June 302020

June 302021

June 302020

Net charge-offs (recoveries)

Commercial and industrial loans

$

107

$

3,267

$

(4)

$

3,374

$

(46)

Commercial real estate loans

-

(57)

-

(57)

-

Small business loans

31

55

33

86

139

Residential real estate loans

-

(1)

-

(1)

(1)

Home equity

24

(13)

(91)

11

(11)

Other consumer

30

92

262

122

503

Total net charge-offs

$

192

$

3,343

$

200

$

3,535

$

584

Net charge-offs to average loans (annualized)

0.01

%

0.15

%

0.01

%

0.08

%

0.01

%

Net Charge-Offs (Recoveries)

Three Months Ended Six Months Ended

June 30 March 31 June 30 June 30 June 30 2021 2021 2020 2021 2020

Net charge-offs (recoveries)

Commercial and $ 107 $ 3,267 $ (4) $ 3,374 $ (46) industrial loans

Commercial real estate - (57) - (57) - loans

Small business loans 31 55 33 86 139

Residential real estate - (1) - (1) (1) loans

Home equity 24 (13) (91) 11 (11)

Other consumer 30 92 262 122 503

Total net charge-offs $ 192 $ 3,343 $ 200 $ 3,535 $ 584



Net charge-offs toaverage loans 0.01 % 0.15 % 0.01 % 0.08 % 0.01 %(annualized)

Troubled Debt Restructurings At

June 302021

March 312021

June 302020

Troubled debt restructurings on accrual status

$

19,495

$

20,262

$

17,741

Troubled debt restructurings on nonaccrual status

20,212

21,167

24,098

Total troubled debt restructurings

$

39,707

$

41,429

$

41,839

BALANCE SHEET AND CAPITAL RATIOS

June 302021

March 312021

June 302020

Gross loans/total deposits

74.57

%

79.76

%

87.34

%

Common equity tier 1 capital ratio (1)

13.24

%

13.16

%

12.26

%

Tier 1 leverage capital ratio (1)

9.41

%

9.63

%

9.57

%

Common equity to assets ratio GAAP

12.27

%

12.45

%

12.84

%

Tangible common equity to tangible assets ratio (2)

8.89

%

8.96

%

9.12

%

Book value per share GAAP

$

52.72

$

51.94

$

50.75

Tangible book value per share (2)

$

36.78

$

35.96

$

34.59

(1) Estimated number for June 30, 2021.

(2) See Appendix A for detailed reconciliation from GAAP to Non-GAAP ratios.

Troubled Debt Restructurings At

June 30 March 31 June 30 2021 2021 2020

Troubled debt restructurings on accrual $ 19,495 $ 20,262 $ 17,741 status

Troubled debt restructurings on nonaccrual 20,212 21,167 24,098 status

Total troubled debt restructurings $ 39,707 $ 41,429 $ 41,839



BALANCE SHEET AND CAPITAL RATIOS

June 30 March 31 June 30 2021 2021 2020

Gross loans/total deposits 74.57 % 79.76 % 87.34 %

Common equity tier 1 capital ratio (1) 13.24 % 13.16 % 12.26 %

Tier 1 leverage capital ratio (1) 9.41 % 9.63 % 9.57 %

Common equity to assets ratio GAAP 12.27 % 12.45 % 12.84 %

Tangible common equity to tangible assets 8.89 % 8.96 % 9.12 %ratio (2)

Book value per share GAAP $ 52.72 $ 51.94 $ 50.75

Tangible book value per share (2) $ 36.78 $ 35.96 $ 34.59

(1) Estimated number for June 30, 2021.

(2) See Appendix A for detailed reconciliation from GAAP to Non-GAAP ratios.

INDEPENDENT BANK CORP. SUPPLEMENTAL FINANCIAL INFORMATION



(Unaudited, dollars in Three Months Endedthousands)

June 30, 2021 March 31, 2021 June 30, 2020

Interest Interest Interest

Average Earned/ Yield/ Average Earned/ Yield/ Average Earned/ Yield/

Balance Paid (1) Rate Balance Paid (1) Rate Balance Paid (1) Rate

Interest-earning assets

Interest-earning depositswith banks, federal funds $ 1,882,285 $ 513 0.11 % $ 1,321,430 $ 326 0.10 % $ 724,634 $ 132 0.07 %sold, and short terminvestments

Securities

Securities - trading 3,359 - - % 2,939 - - % 2,393 - - %

Securities - taxable 1,514,336 7,184 1.90 % 1,250,451 6,627 2.15 % 1,206,631 7,831 2.61 %investments

Securities - nontaxable 555 6 4.34 % 642 6 3.79 % 1,145 11 3.86 %investments (1)

Total securities $ 1,518,250 $ 7,190 1.90 % $ 1,254,032 $ 6,633 2.15 % $ 1,210,169 $ 7,842 2.61 %

Loans held for sale 28,279 186 2.64 % 49,652 296 2.42 % 50,613 359 2.85 %

Loans

Commercial and industrial 1,944,026 20,351 4.20 % 2,115,069 23,046 4.42 % 1,914,830 17,363 3.65 %(1)

Commercial real estate (1) 4,196,171 41,532 3.97 % 4,156,012 40,376 3.94 % 4,051,342 42,371 4.21 %

Commercial construction 514,935 4,777 3.72 % 555,153 5,283 3.86 % 538,767 5,314 3.97 %

Small business 178,525 2,302 5.17 % 174,320 2,281 5.31 % 174,438 2,388 5.51 %

Total commercial 6,833,657 68,962 4.05 % 7,000,554 70,986 4.11 % 6,679,377 67,436 4.06 %

Residential real estate 1,226,520 11,058 3.62 % 1,271,283 12,436 3.97 % 1,474,495 13,801 3.76 %

Home equity 1,024,798 8,591 3.36 % 1,050,234 8,757 3.38 % 1,133,034 10,132 3.60 %

Total consumer real estate 2,251,318 19,649 3.50 % 2,321,517 21,193 3.70 % 2,607,529 23,933 3.69 %

Other consumer 22,471 411 7.34 % 21,698 432 8.07 % 24,971 500 8.05 %

Total loans $ 9,107,446 $ 89,022 3.92 % $ 9,343,769 $ 92,611 4.02 % $ 9,311,877 $ 91,869 3.97 %

Total interest-earning $ 12,536,260 $ 96,911 3.10 % $ 11,968,883 $ 99,866 3.38 % $ 11,297,293 $ 100,202 3.57 %assets

Cash and due from banks 142,198 154,870 119,692

Federal Home Loan Bank 9,410 10,250 23,175 stock

Other assets 1,258,056 1,241,651 1,287,620

Total assets $ 13,945,924 $ 13,375,654 $ 12,727,780

Interest-bearing liabilities

Deposits

Savings and interest $ 4,339,645 $ 384 0.04 % $ 4,109,747 $ 423 0.04 % $ 3,679,729 $ 1,101 0.12 %checking accounts

Money market 2,347,852 429 0.07 % 2,288,030 521 0.09 % 1,972,986 1,377 0.28 %

Time deposits 843,090 1,204 0.57 % 906,613 1,767 0.79 % 1,186,189 4,549 1.54 %

Total interest-bearing $ 7,530,587 $ 2,017 0.11 % $ 7,304,390 $ 2,711 0.15 % $ 6,838,904 $ 7,027 0.41 %deposits

Borrowings

Federal Home Loan Bank 35,704 191 2.15 % 35,785 188 2.13 % 339,393 433 0.51 %borrowings

Long-term borrowings 23,417 94 1.61 % 28,247 111 1.59 % 71,629 343 1.93 %

Junior subordinated 62,852 429 2.74 % 62,851 426 2.75 % 62,849 446 2.85 %debentures

Subordinated debentures 49,730 618 4.98 % 49,705 617 5.03 % 49,635 618 5.01 %

Total borrowings $ 171,703 $ 1,332 3.11 % $ 176,588 $ 1,342 3.08 % $ 523,506 $ 1,840 1.41 %

Total interest-bearing $ 7,702,290 $ 3,349 0.17 % $ 7,480,978 $ 4,053 0.22 % $ 7,362,410 $ 8,867 0.48 %liabilities

Noninterest-bearing demand 4,237,135 3,895,447 3,371,262 deposits

Other liabilities 273,449 285,857 315,979

Total liabilities $ 12,212,874 $ 11,662,282 $ 11,049,651

Stockholders' equity 1,733,050 1,713,372 1,678,129

Total liabilities and $ 13,945,924 $ 13,375,654 $ 12,727,780 stockholders' equity



Net interest income $ 93,562 $ 95,813 $ 91,335



Interest rate spread (2) 2.93 % 3.16 % 3.09 %



Net interest margin (3) 2.99 % 3.25 % 3.25 %



Supplemental Information

Total deposits, including $ 11,767,722 $ 2,017 $ 11,199,837 $ 2,711 $ 10,210,166 $ 7,027 demand deposits

Cost of total deposits 0.07 % 0.10 % 0.28 %

Total funding liabilities, $ 11,939,425 $ 3,349 $ 11,376,425 $ 4,053 $ 10,733,672 $ 8,867 including demand deposits

Cost of total funding 0.11 % 0.14 % 0.33 %liabilities

(1) The total amount of adjustment to present interest income and yield on a fully tax-equivalent basis is $209,000, $229,000, and $237,000 for the three months ended June 30, 2021, March 31, 2021, and June 30, 2020, respectively, determined by applying the Company's marginal tax rates in effect during each respective quarter.

(2) Interest rate spread represents the difference between weighted average yield on interest-earning assets and the weighted average cost of interest-bearing liabilities.

(3) Net interest margin represents annualized net interest income as a percentage of average interest-earning assets.

Six Months Ended

June 30, 2021 June 30, 2020

Interest Interest

Average Earned/ Yield/ Average Earned/ Yield/

Balance Paid Rate Balance Paid Rate

Interest-earning assets

Interest earningdeposits withbanks, federal $ 1,603,407 $ 839 0.11 % $ 398,593 $ 292 0.15 %funds sold, andshort terminvestments

Securities

Securities - 3,150 - - % 2,328 - - %trading

Securities - 1,383,122 13,811 2.01 % 1,198,298 15,788 2.65 %taxable investments

Securities -nontaxable 599 12 4.04 % 1,191 23 3.88 %investments (1)

Total securities $ 1,386,871 $ 13,823 2.01 % $ 1,201,817 $ 15,811 2.65 %

Loans held for sale 38,907 482 2.50 % 39,329 591 3.02 %

Loans

Commercial and 2,029,075 43,397 4.31 % 1,659,014 34,303 4.16 %industrial (1)

Commercial real 4,176,202 81,908 3.96 % 4,031,734 88,222 4.40 %estate (1)

Commercial 534,933 10,060 3.79 % 547,254 12,215 4.49 %construction

Small business 176,434 4,583 5.24 % 174,553 4,950 5.70 %

Total commercial 6,916,644 139,948 4.08 % 6,412,555 139,690 4.38 %

Residential real 1,248,778 23,494 3.79 % 1,517,667 28,420 3.77 %estate

Home equity 1,037,446 17,348 3.37 % 1,134,983 21,959 3.89 %

Total consumer real 2,286,224 40,842 3.60 % 2,652,650 50,379 3.82 %estate

Other consumer 22,087 843 7.70 % 26,406 1,072 8.16 %

Total loans $ 9,224,955 $ 181,633 3.97 % $ 9,091,611 $ 191,141 4.23 %

Totalinterest-earning $ 12,254,140 $ 196,777 3.24 % $ 10,731,350 $ 207,835 3.89 %assets

Cash and due from 148,499 121,199 banks

Federal Home Loan 9,828 18,937 Bank stock

Other assets 1,249,898 1,227,199

Total assets $ 13,662,365 $ 12,098,685

Interest-bearing liabilities

Deposits

Savings andinterest checking $ 4,225,331 $ 807 0.04 % $ 3,475,223 $ 3,035 0.18 %accounts

Money market 2,318,106 950 0.08 % 1,922,495 4,550 0.48 %

Time deposits 874,676 2,971 0.68 % 1,266,540 10,334 1.64 %

Totalinterest-bearing $ 7,418,113 $ 4,728 0.13 % $ 6,664,258 $ 17,919 0.54 %deposits

Borrowings

Federal Home Loan 35,746 379 2.14 % 235,309 961 0.82 %Bank borrowings

Long-term 25,818 205 1.60 % 73,271 904 2.48 %borrowings

Junior subordinated 62,851 855 2.74 % 62,849 924 2.96 %debentures

Subordinated 49,717 1,235 5.01 % 49,623 1,235 5.00 %debentures

Total borrowings $ 174,132 $ 2,674 3.10 % $ 421,052 $ 4,024 1.92 %

Totalinterest-bearing $ 7,592,245 $ 7,402 0.20 % $ 7,085,310 $ 21,943 0.62 %liabilities

Noninterest-bearing 4,067,235 3,025,990 demand deposits

Other liabilities 279,620 283,724

Total liabilities $ 11,939,100 $ 10,395,024

Stockholders' 1,723,265 1,703,661 equity

Total liabilitiesand stockholders' $ 13,662,365 $ 12,098,685 equity



Net interest income $ 189,375 $ 185,892



Interest rate 3.04 % 3.27 %spread (2)



Net interest margin 3.12 % 3.48 %(3)



Supplemental Information

Total deposits,including demand $ 11,485,348 $ 4,728 $ 9,690,248 $ 17,919 deposits

Cost of total 0.08 % 0.37 %deposits

Total fundingliabilities, $ 11,659,480 $ 7,402 $ 10,111,300 $ 21,943 including demanddeposits

Cost of total 0.13 % 0.44 %funding liabilities

(1) The total amount of adjustment to present interest income and yield on a fully tax-equivalent basis is $438,000 and $490,000 for the six months ended June 30, 2021 and 2020, respectively.

(2) Interest rate spread represents the difference between weighted average yield on interest-earning assets and the weighted average cost of interest-bearing liabilities.

(3) Net interest margin represents annualized net interest income as a percentage of average interest-earning assets.

APPENDIX A: NON-GAAP Reconciliation of Balance Sheet Metrics

(Unaudited, dollars in thousands, except per share data)

The following table summarizes the calculation of the Company's tangible common equity to tangible assets ratio, tangible book value per share, and loan and allowance metrics, exclusive of PPP loan balances at the dates indicated:

June 30 March 31 June 30 2021 2021 2020

Tangible common equity (Dollars in thousands, except per share data)

Stockholders' equity $ 1,741,622 $ 1,715,371 $ 1,671,692 (a)(GAAP)

Less: Goodwill and other 526,576 527,895 532,202 intangibles

Tangible common equity $ 1,215,046 $ 1,187,476 $ 1,139,490 (b)

Tangible assets

Assets (GAAP) $ 14,194,207 $ 13,773,914 $ 13,022,500 (c)

Less: Goodwill and other 526,576 527,895 532,202 intangibles

Tangible assets $ 13,667,631 $ 13,246,019 $ 12,490,298 (d)



Common Shares 33,037,859 33,024,882 32,942,110 (e)



Common equity to assets 12.27 % 12.45 % 12.84 % (a/ratio (GAAP) c)

Tangible common equity (b/to tangible assets ratio 8.89 % 8.96 % 9.12 % d)(Non-GAAP)

Book value per share $ 52.72 $ 51.94 $ 50.75 (a/(GAAP) e)

Tangible book value per $ 36.78 $ 35.96 $ 34.59 (b/share (Non-GAAP) e)



Total loans (GAAP) $ 8,938,988 $ 9,246,691 $ 9,359,648

Total loans, excluding $ 8,456,338 $ 8,400,390 $ 8,566,665 PPP (Non-GAAP)



Allowance as a % of 1.15 % 1.16 % 1.20 % total loans (GAAP)

Allowance as a % oftotal loans, excluding 1.21 % 1.28 % 1.31 % PPP (Non-GAAP)

APPENDIX B: Non-GAAP Reconciliation of Earnings Metrics

(Unaudited, dollars in thousands)

The following table summarizes the impact of noncore items on the Company's calculation of noninterest income and noninterest expense, as well as the impact of noncore items on noninterest income as a percentage of total revenue and the efficiency ratio for the periods indicated:

Three Months Ended Six Months Ended

June 30 March 31 June 30 June 30 June 30 2021 2021 2020 2021 2020

Netinterest $ 93,354 $ 95,584 $ 91,098 $ 188,938 $ 185,402 (a)income(GAAP)



Noninterestincome $ 24,967 $ 25,246 $ 28,190 $ 50,213 $ 54,625 (b)(GAAP)

Noninterestincome onan $ 24,967 $ 25,246 $ 28,190 $ 50,213 $ 54,625 (c)operatingbasis(Non-GAAP)



Noninterestexpense $ 73,302 $ 69,682 $ 66,607 $ 142,984 $ 133,447 (d)(GAAP)

Less:

Merger andacquisition 1,731 - - 1,731 - expense

Noninterestexpense onan $ 71,571 $ 69,682 $ 66,607 $ 141,253 $ 133,447 (e)operatingbasis(Non-GAAP)



Totalrevenue $ 118,321 $ 120,830 $ 119,288 $ 239,151 $ 240,027 (a+b)(GAAP)

Totaloperating $ 118,321 $ 120,830 $ 119,288 $ 239,151 $ 240,027 (a+c)revenue(Non-GAAP)



Ratios

Noninterestincome as a% of total 21.10 % 20.89 % 23.63 % 21.00 % 22.76 % (b/revenue (a+b))(GAAPbased)

Noninterestincome as a% of totalrevenue on 21.10 % 20.89 % 23.63 % 21.00 % 22.76 % (c/an (a+c))operatingbasis(Non-GAAP)

Efficiency (d/ratio (GAAP 61.95 % 57.67 % 55.84 % 59.79 % 55.60 % (a+b))based)

Efficiencyratio on an (e/operating 60.49 % 57.67 % 55.84 % 59.06 % 55.60 % (a+c))basis(Non-GAAP)

APPENDIX C: Net Interest Margin Analysis & Non-GAAP Reconciliation of Core Margin

2021 2021

Q2 Q1

Volume Interest Margin Volume Interest Margin Impact Impact

(Dollars in thousands)

Reported $ 12,535,962 $ 93,564 2.99 % $ 11,968,884 $ 95,812 3.25 %total (GAAP)

Core adjustments:

PPP volume @ (717,847) (1,794) (837,986) (2,081) 1%

PPP fee (7,217) - (9,487) amortization

Total PPP (717,847) (9,011) (0.12) % (837,986) (11,568) (0.18) %impact

Acquisitionfair value (1,664) (0.06) % (1,731) (0.06) %accretion

Nonaccrual 33 - % 28 - %interest

Othernoncore (410) (0.01) % (626) (0.02) %adjustments

Core margin $ 11,818,115 $ 82,512 2.80 % $ 11,130,898 $ 81,915 2.99 %(Non-GAAP)*



*The presentation above has changed as compared to previously reported periods to include the entire cash balance impact in the "core margin" results.

APPENDIX D: Commercial Loan Portfolio Characteristics

Commercial Industries Highly Impacted by COVID-19 Pandemic

While Rockland Trust is unable to know with certainty the direct, indirect, and likely far-reaching impacts of the COVID-19 pandemic, we continue to monitor daily the loan balances and the loan exposures for commercial loan categories we have deemed to be highly impacted by the pandemic (i.e., Accommodations, Food Services, Retail Trade, Other Services (except Public Administration) and Arts, Entertainments & Recreation). We do not have any material loan exposure to the Oil & Gas, Casino & Gambling, Aviation, or Cruise Line industries.

The table below provides total outstanding balances of commercial loans as of June 30, 2021, within industries that we have deemed to be highly impacted by the COVID-19 pandemic:

Highly Impacted COVID-19 Industries - Balances



June 30, 2021

(Dollars in thousands)

Accommodations $ 400,463

Food Services 136,613

Retail Trade 528,404

Other Services (except Public Administration) 146,270

Arts, Entertainment, and Recreation 96,837

Total (1) $ 1,308,587

(1) Amounts presented above exclude $144.2 million of outstanding PPP loans.

Highly Impacted COVID-19 Industries - Details

June 30, 2021

(Dollars in thousands)

Accommodations

Balance $ 400,463

Average borrower loan size $ 4,200

% secured by real estate 99.8 %

Weighted average loan to value 54.1 %

Other information:

- The accommodation portfolio consists of 68 properties representing acombination of flagged (59%) and non-flagged (41%) hotels, motels and inns.

- Loans secured by hotel properties deemed to be located in areas of leisurecomprise $166.1 million, or 42% of the hotel portfolio.

- Approximately 89% of the balances outstanding are secured by propertieslocated within the six New England states with the largest concentration inMassachusetts (58%).



Food Services

Balance $ 136,613

Average borrower loan size $ 360

% secured by real estate 70.3 %

Weighted average loan to value 49.8 %

Other information:

- The food services portfolio includes full-service restaurants (59%), limitedservice restaurants and fast food (39%), and other types of food service(caterers, bars, mobile food service 2%).





Retail Trade

Balance $ 528,404

Average borrower loan size $ 498

% secured by real estate 43.0 %

Weighted average loan to value 57.3 %

Other information:

- The retail trade portfolio consists broadly of food and beverage stores(46%), motor vehicle and parts dealers (25%), gasoline stations (14%). Allother retailers account for 15% of the current outstanding balance.

- Collateral for these loans varies and may consist of real estate, motorvehicles inventories, other types of inventories and general business assets.



Other Services (except Public Administration)

Balance $ 146,270

Average borrower loan size $ 258

% secured by real estate 52.6 %

Weighted average loan to value 51.2 %

Other information:

- The other services portfolio consists of various for-profit andnot-for-profit services diversified across religious, civic and social serviceorganizations (41%), repair and maintenance business (31%) and other personalservices, including beauty salons, laundry services, pet care and other typesof services (28%).



Arts, Entertainment, and Recreation

Balance $ 96,837

Average borrower loan size $ 775

% secured by real estate 84.2 %

Weighted average loan to value 52.1 %

Other information:

- Amusement, gambling and recreational industries make up a majority of thiscategory (94%) and include amusement/theme parks, bowling centers, fitnesscenters, golf courses, marinas, and other recreational industries. Otherindustries including museums, performing arts, and spectator sports account forthe remaining outstanding balances (6%).



Other Commercial Loan Portfolio Characteristics

Average total loan size varies across the commercial portfolio with commercial real estate loans having an average size of $1.1 million, commercial and industrial loans having an average loan size of $134,000 and small business loans, which are each under $5.0 million, having an average loan size of $33,000. Additional details are provided below regarding loan sizes of the commercial real estate and commercial and industrial portfolios as of June 30, 2021:

Commercial Real Estate (Including Construction)

<$5M $5-10M $10-20M >$20M Total

DollarAmount $ 2,630,121 $ 901,529 $ 773,225 $ 443,207 $ 4,748,082 (in'000s)

# of 4,040 129 57 18 4,244 loans

Commercial and Industrial (Including PPP)

<$5M

$5-10M

$10-20M

>$20M

Total

Dollar Amount (in '000s)

$

1,213,192

$

212,666

$

273,974

$

26,666

$

1,726,498

# of loans

12,797

32

20

1

12,850

APPENDIX E: COVID-19 Related Modifications Details

Commercial and Industrial (Including PPP)

<$5M $5-10M $10-20M >$20M Total

DollarAmount $ 1,213,192 $ 212,666 $ 273,974 $ 26,666 $ 1,726,498 (in'000s)

# of 12,797 32 20 1 12,850 loans

APPENDIX E: COVID-19 Related Modifications Details

Deferrals by Modification Type

Deferral of Deferral of Total Total % Principal Principal Deferrals Portfolio Deferral and Only Interest

(Dollars in thousands)

Commercialand $ - $ 1,972 $ 1,972 $ 1,726,498 0.1 %industrial

Commercialreal estate 590 230,589 231,179 4,748,082 4.9 %(1)

Business - 636 636 182,863 0.3 %banking

Residential - - - 1,240,279 - %real estate

Home equity - - - 1,018,408 - %

Consumer - - - 22,858 - %

Total activedeferrals as $ 590 $ 233,197 $ 233,787 $ 8,938,988 2.6 %of June 30,2021

(1) Balances include commercial construction deferrals.

Deferrals by Industry

June 30, 2021

(Dollars in thousands)

Highly Impacted Industries

Accommodation $ 176,721

Food Services 262

Arts, Entertainment, and Recreation 14,181

Total Highly Impacted Industries 191,164



Other Industries

Real Estate and Leasing 41,123

Transportation and Warehousing 578

All Other Industries 922

Total Other Industries 42,623

Grand Total $ 233,787

View source version on businesswire.com: https://www.businesswire.com/news/home/20210722005974/en/

CONTACT: Chris Oddleifson President and Chief Executive Officer (781) 982-6660 Mark J. Ruggiero Chief Financial Officer and Chief Accounting Officer (781) 982-6281