Business Wire | Jul 23, 2020 04:23PM EDT

Independent Bank Corp. Reports Second Quarter Net Income of $24.9 Million

Jul. 23, 2020

ROCKLAND, Mass.--(BUSINESS WIRE)--Jul. 23, 2020--Independent Bank Corp. (Nasdaq Global Select Market: INDB), parent of Rockland Trust Company, today announced 2020 second quarter net income of $24.9 million, or $0.76 per diluted share, compared to net income of $26.8 million, or $0.78 per diluted share, reported in the first quarter of 2020. Both quarters' results were negatively impacted by elevated provision for credit losses of $20.0 million and $25.0 million for the second and first quarters, respectively. Second quarter results also reflected a return to a higher, more normalized tax rate.

Assumptions regarding the impact of the Coronavirus ("COVID-19") pandemic continue to be the primary driver of the credit loss provision. Please refer to Appendix D for additional information regarding the Company's Current Expected Credit Losses assumptions and results.

Rockland Trust continues to monitor the COVID-19 pandemic impact on our colleagues, customers, and the communities we serve. The safety of our colleagues and customers continues to be of the utmost importance, while the Company simultaneously continues to serve customer needs. Please refer to Appendices E through G for information regarding loan exposures that potentially could be deemed as highly impacted, loan modifications processed and requested, and Paycheck Protection Program ("PPP") loan volume.

"We remain confident in the strength of our financial position as we continue to navigate through the current environment," said Christopher Oddleifson, the Chief Executive Officer of Independent Bank Corp. and Rockland Trust Company. "Observing my colleagues over these past few months has once-again demonstrated to me what I already knew: the professionalism and dedication of my Rockland Trust colleagues is what truly sets Rockland Trust apart. I am pleased we were able to help over 5,600 borrowers obtain Paycheck Protection Program (PPP) loans, with a total principal amount of approximately $800 million. In addition I was gratified to observe the investments we made in recent years to build out a sophisticated suite of digital and online capabilities enabled our customers to seamlessly access banking services when branch activity was reduced. I am extremely proud to be a part of Rockland Trust, the bank Where Each Relationship Matters."

BALANCE SHEET

Total assets of $13.0 billion at June 30, 2020 increased by $1.0 billion, or 8.7%, from the prior quarter, and increased by $1.4 billion, or 12.2%, as compared to the year ago period. Total asset growth in the second quarter is primarily attributable to the Company's participation in the Paycheck Protection Program ("PPP"), as both higher cash and loan balances were generated from the funded PPP loans.

Interest-earning cash of $974.1 million as of June 30, 2020 reflects an increase of $628.4 million when compared to the prior quarter, as PPP loan fundings and other deposit growth fueled the significant increase.

Total loans rose by $443.2 million, or 5.0%, (20.0% annualized) when compared to the prior quarter, as PPP loan balances of $793.0 million at June 30, 2020 contributed significantly to the increase. When excluding PPP activity, loans declined by $349.8 million, or 3.92%, for the quarter. The majority of this decline occurred in the commercial and industrial ("C&I") and residential portfolios, as C&I balances reflect significantly reduced line utilization across multiple products, while the residential decline continues to reflect the lower rate environment driving the majority of production to be sold into the secondary market.

Deposit balances of $10.7 billion at June 30, 2020 increased by $1.3 billion, or 13.8%, (55.6% annualized) from the prior quarter, as a combination of PPP loan fundings, government stimulus programs, and a customer focus on retaining liquidity have fueled significant growth during the quarter. As these PPP funds get utilized and immediate stimulus money is disbursed, some level of decline from this elevated deposit level is expected to occur. Regarding time deposits, maturities of brokered certificates of deposits led to a 14.0% decline in balances when compared to the prior quarter. Deposit rate reductions resulted in the total cost of deposits for the second quarter declining by 20 basis points to 0.28% as compared to the prior quarter.

The securities portfolio decreased by $61.9 million, or 5.0%, when compared to the prior quarter, reflecting $10.0 million of purchases offset by paydowns, called securities, and maturities.

Total borrowings decreased by $250.3 million, or 45.8%, compared to the prior quarter, as the aforementioned enhanced on-balance sheet liquidity position led to a $200.0 million prepayment on short-term borrowings held with the Federal Home Loan Bank ("FHLB"). The payoff resulted in a prepayment penalty of $389,000, which is included in other noninterest expense for the quarter. Additionally, during the quarter, $37.5 million of the parent company long-term line of credit was paid down.

Stockholders' equity at June 30, 2020 remained relatively consistent with March 31, 2020. During the second quarter, the Company repurchased the remaining 300,000 shares under its previously announced stock repurchase plan at an average price of $65.65. Despite the repurchase of 1.5 million shares that was executed over the first and second quarters of 2020, stockholders' equity increased by 2.2% when compared to the year ago period, reflecting strong earnings retention and an increase in accumulated other comprehensive income of $30.9 million, offsetting the $73.2 million impact of the stock repurchases. Book value per share increased by $0.25, or 0.5%, to $50.75 during the second quarter as compared to the linked quarter. The Company's ratio of common equity to assets of 12.84% decreased by 118 basis points from the prior quarter and decreased by 126 basis points from the same period a year ago. The Company's tangible book value per share at June 30, 2020 rose by $0.13, or 0.4%, from the prior quarter to $34.59, and is now 8.1% higher than the year ago period. The Company's ratio of tangible common equity to tangible assets of 9.12% at June 30, 2020 is 89 basis points below the prior quarter and 80 basis points below the year ago period, largely attributable to the increase in the Company's balance sheet and stock repurchase activity.

NET INTEREST INCOME

Net interest income for the second quarter decreased 3.4% to $91.1 million compared to $94.3 million in the prior quarter largely due to the negative impact of the lower interest rate environment along with the mix of interest earning assets. The 2020 second quarter net interest margin of 3.25% represents a reduction of 49 basis points from the prior quarter. The table below illustrates the factors that contributed to the decline in the net interest margin for the second quarter:

Net Interest margin as of March 31, 2020 3.74 %

Decreased loan yields (0.43 )%

Excess liquidity (cash) levels (0.19 )%

PPP loan activity at 1% interest rate (0.12 )%

PPP loan fee amortization 0.08 %

Loan purchase accounting 0.03 %

Decreased cost of funds 0.16 %

Other (0.02 )%

Net interest margin as of June 30, 2020 3.25 %

Please refer to Appendix C for additional details regarding the net interest margin, including a three-quarter trend of an adjusted core margin.

NONINTEREST INCOME

Noninterest income of $28.2 million in the second quarter of 2020 was $1.8 million, or 6.6%, higher than the prior quarter. Significant changes in noninterest income in the second quarter compared to the prior quarter included the following:

* Deposit account fees decreased by $2.1 million, or 43.1%, driven by significant reductions in overdraft fees as customers benefited from the government stimulus payments.

* Interchange and ATM fees increased by $318,000, or 6.5%, reflecting general increases in consumer spending.

* Investment management income increased by $467,000, or 6.8%, primarily due to an increase in market valuation, along with seasonal tax preparation fees during the second quarter. Assets under administration at June 30, 2020 increased 10.1% to $4.4 billion.

* Mortgage banking income grew by $4.1 million, as the stabilization of the secondary market combined with strong demand led to the significant increase for the quarter.

* Although remaining at an elevated level, loan level derivative income decreased by $733,000, or 20.4%, when compared to the strong first quarter results.

* Other noninterest income decreased by $314,000, or 8.6%, attributable to decreases in small business equity funds income and reduced interest on cash collateral balances, offset by unrealized gains on equity securities of $1.4 million for the quarter.

NONINTEREST EXPENSE

Noninterest expense of $66.6 million in the second quarter of 2020 was consistent with the prior quarter. Significant changes in noninterest expense in the second quarter compared to the prior quarter included the following:

* Salaries and employee benefits expense remained relatively consistent, with minor netting changes in various components.

* Data processing and facilities management decreased by $199,000, or 12.0% due to timing of certain initiatives and system upgrades.

* FDIC assessment increased by $503,000, reflecting a second quarter partial benefit associated with the final allocation of credits, whereas such credits resulted in no related expense in the first quarter.

* Other noninterest expense decreased by $413,000, or 2.2%, largely due to decreases in unrealized loss on equity securities of $1.8 million, along with decreases in loss on sale of disposition of fixed assets and advertising expenses. These decreases were offset by increases in director expenses related to the equity compensation granted during the quarter, additional reserve for unfunded commitments, pre-payment fees on borrowings, retail branch traffic control and other miscellaneous expenses.

The tax rate for the quarter was 23.80% vs. the prior quarter of 7.4%, as the prior quarter benefited from a $4.7 million discrete tax benefit associated with net operating loss carryback provisions included in the federal Coronavirus Aid, Relief and Economic Security Act ("CARES Act").

The Company generated a return on average assets and a return on average common equity of 0.79% and 5.97%, respectively, in the second quarter of 2020, as compared to 0.94% and 6.22%, respectively, for the prior quarter.

ASSET QUALITY

The allowance for credit losses on loans was $112.2 million at June 30, 2020, or 1.20% of total loans, as compared to $92.4 million at March 31, 2020, or 1.04% of total loans. As previously noted, the Company recorded a $20.0 million provision for credit losses during the second quarter of 2020, reflecting assumptions over future losses that contemplate the impact of the COVID-19 pandemic on various industries and customer segments, related requests for loan deferral accommodations, and government stimulus programs.

The granting of loan deferrals has not resulted in increased asset quality risk metrics, as nonperforming and delinquency amounts do not reflect loans that have been modified as a result of the COVID-19 pandemic. During the second quarter of 2020, the Company recorded total net charge-offs of $200,000, or 0.01% of average loans on an annualized basis. Nonperforming loans of $48.8 million at June 30, 2020 were a slight increase over the prior quarter level of $48.0 million, with nonperforming loans as a percentage of gross loans decreasing slightly to 0.52% compared to 0.54% at March 31, 2020. When compared to the year ago period, total nonperforming assets have increased by 1.3%. At June 30, 2020, delinquency as a percentage of loans was 0.24%, representing a decrease of nine basis points from the prior quarter. Please refer to appendix F for additional details regarding loans whose terms have been modified as a result of COVID-19.

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 24, 2020. 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: 10145222 and will be available through August 7, 2020. Additionally, a webcast replay will be available until July 24, 2021.

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. Continually recognized for its impressive financial performance and its outstanding culture for employees and customers alike, the bank is dedicated to giving back to the communities it serves through programs such as financial literacy. 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, the Cape and Islands, as well as in Worcester County and Rhode Island. Rockland Trust also offers a full suite of mobile and online 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 us at www.rocklandtrust.com.

This press release contains certain "forward-looking statements" 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 including an 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 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, changes in tax laws, or failure to comply with requirements of the federal New Markets Tax Credit program; * 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 area; * 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.

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 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 its core banking business such as merger and acquisition expenses, and other items, if applicable. The Company's management uses operating earnings 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 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 earnings, operating EPS, operating return on average assets, operating return on average equity, 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.

INDEPENDENT BANK CORP. FINANCIAL SUMMARY

CONSOLIDATED BALANCE SHEETS

(Unaudited, dollars % Change % Changein thousands)

Jun 2020 Jun 2020 June 30 March 31 June 30 vs. vs. 2020 2020 2019 Mar 2020 Jun 2019

Assets

Cash and due from $ 131,615 $ 125,638 $ 121,001 4.76 % 8.77 %banks

Interest-earning 974,105 345,739 73,013 181.75 % 1,234.15 %deposits with banks

Securities

Trading 2,541 2,247 1,939 13.08 % 31.05 %

Equities 20,810 19,439 20,807 7.05 % 0.01 %

Available for sale 420,517 437,296 393,148 (3.84 ) 6.96 % %

Held to maturity 731,026 777,798 797,359 (6.01 ) (8.32 ) % %

Total securities 1,174,894 1,236,780 1,213,253 (5.00 ) (3.16 ) % %

Loans held for sale 45,395 43,756 123,557 3.75 % (63.26 ) %

Loans

Commercial and 2,004,645 1,448,224 1,400,924 38.42 % 43.09 %industrial

Commercial real 4,071,047 4,061,347 4,058,066 0.24 % 0.32 %estate

Commercial 537,788 527,138 491,598 2.02 % 9.40 %construction

Small business 170,288 177,820 173,927 (4.24 ) (2.09 ) % %

Total commercial 6,783,768 6,214,529 6,124,515 9.16 % 10.76 %

Residential real 1,431,129 1,528,416 1,655,182 (6.37 ) (13.54 )estate % %

Home equity - first 650,922 656,994 656,515 (0.92 ) (0.85 )position % %

Home equity - ) )subordinate 469,601 489,276 487,984 (4.02 % (3.77 %positions

Total consumer real 2,551,652 2,674,686 2,799,681 (4.60 ) (8.86 )estate % %

Other consumer 24,228 27,215 26,591 (10.98 ) (8.89 ) % %

Total loans 9,359,648 8,916,430 8,950,787 4.97 % 4.57 %

Less: allowance for (112,176 ) (92,376 ) (65,960 ) 21.43 % 70.07 %credit losses

Net loans 9,247,472 8,824,054 8,884,827 4.80 % 4.08 %

Federal Home Loan 15,090 23,274 26,085 (35.16 ) (42.15 )Bank stock % %

Bank premises and 122,172 121,873 123,374 0.25 % (0.97 )equipment, net %

Goodwill 506,206 506,206 504,562 - % 0.33 %

Other intangible 25,996 27,466 33,334 (5.35 ) (22.01 )assets % %

Cash surrendervalue of life 198,124 197,772 197,292 0.18 % 0.42 %insurance policies

Other real estate - - 2,889 n/a (100.00 )owned %

Other assets 581,431 527,682 300,012 10.19 % 93.80 %

Total assets $ 13,022,500 $ 11,980,240 $ 11,603,199 8.70 % 12.23 %

Liabilities andStockholders' Equity

Deposits

Noninterest-bearing $ 3,694,559 $ 2,820,312 $ 2,738,420 31.00 % 34.92 %demand deposits

Savings andinterest checking 3,896,024 3,428,546 3,196,639 13.63 % 21.88 %accounts

Money market 2,034,021 1,897,632 1,927,797 7.19 % 5.51 %

Time certificates 1,092,217 1,269,708 1,445,059 (13.98 ) (24.42 )of deposit % %

Total deposits 10,716,821 9,416,198 9,307,915 13.81 % 15.14 %

Borrowings

Federal Home Loan 145,770 358,591 277,671 (59.35 ) (47.50 )Bank borrowings % %

Long-term 37,433 74,920 74,879 (50.04 ) (50.01 )borrowings, net % %

Junior subordinated 62,850 62,849 62,847 - % - %debentures, net

Subordinated 49,648 49,625 84,305 0.05 % (41.11 )debentures, net %

Total borrowings 295,701 545,985 499,702 (45.84 ) (40.82 ) % %

Total deposits and 11,012,522 9,962,183 9,807,617 10.54 % 12.29 %borrowings

Other liabilities 338,286 338,401 159,579 (0.03 ) 111.99 % %

Total liabilities 11,350,808 10,300,584 9,967,196 10.20 % 13.88 %

Stockholders' equity

Common stock 328 331 342 (0.91 ) (4.09 ) % %

Additional paid in 942,685 962,513 1,029,594 (2.06 ) (8.44 )capital % %

Retained earnings 676,834 667,084 585,111 1.46 % 15.68 %

Accumulated othercomprehensive 51,845 49,728 20,956 4.26 % 147.40 %income, net of tax

Total stockholders' 1,671,692 1,679,656 1,636,003 (0.47 ) 2.18 %equity %

Total liabilitiesand stockholders' $ 13,022,500 $ 11,980,240 $ 11,603,199 8.70 % 12.23 %equity



CONSOLIDATEDSTATEMENTS OF INCOME

(Unaudited,dollars inthousands, except pershare data)

Three Months Ended

% Change % Change

Jun 2020 Jun 2020 June 30 March 31 June 30 vs. vs. 2020 2020 2019 Mar 2020 Jun 2019

Interest income

Interest onfederalfunds sold $ 132 $ 160 $ 647 (17.50 ) (79.60 )and % %short-terminvestments

Interest and ) )dividends on 7,840 7,966 8,534 (1.58 % (8.13 %securities

Interest and ) )fees on 91,634 99,022 112,923 (7.46 % (18.85 %loans

Interest onloans held 359 232 40 54.74 % 797.50 %for sale

Total ) )interest 99,965 107,380 122,144 (6.91 % (18.16 %income

Interest expense

Interest on 7,027 10,892 11,178 (35.48 ) (37.14 )deposits % %

Interest on 1,840 2,184 4,947 (15.75 ) (62.81 )borrowings % %

Total ) )interest 8,867 13,076 16,125 (32.19 % (45.01 %expense

Net interest 91,098 94,304 106,019 (3.40 ) (14.07 )income % %

Provision )for credit 20,000 25,000 1,000 (20.00 % 1,900.00 %losses

Net interestincome after )provision 71,098 69,304 105,019 2.59 % (32.30 %for creditlosses

Noninterest income

Deposit 2,829 4,970 5,080 (43.08 ) (44.31 )account fees % %

Interchange 5,214 4,896 5,794 6.50 % (10.01 )and ATM fees %

Investment 7,296 6,829 7,153 6.84 % 2.00 %management

Mortgagebanking 5,005 861 3,410 481.30 % 46.77 %income

Increase incashsurrendervalue of 1,312 1,276 1,296 2.82 % 1.23 %lifeinsurancepolicies

Gain on life )insurance 335 357 - (6.16 % 100.00%benefits

Loan level )derivative 2,864 3,597 932 (20.38 % 207.30 %income

Other ) )noninterest 3,335 3,649 4,983 (8.61 % (33.07 %income

Total )noninterest 28,190 26,435 28,648 6.64 % (1.60 %income

Noninterest expenses

Salaries and ) )employee 37,269 37,349 38,852 (0.21 % (4.07 %benefits

Occupancyand 9,273 9,317 8,424 (0.47 ) 10.08 %equipment %expenses

Dataprocessing ) )and 1,459 1,658 2,042 (12.00 % (28.55 %facilitiesmanagement

FDIC 503 - 778 100.00% (35.35 )assessment %

Merger and )acquisition - - 24,696 n/a (100.00 %expense

Other ) )noninterest 18,103 18,516 18,240 (2.23 % (0.75 %expenses

Total ) )noninterest 66,607 66,840 93,032 (0.35 % (28.40 %expenses

Income )before 32,681 28,899 40,635 13.09 % (19.57 %income taxes

Provision )for income 7,779 2,148 10,007 262.15 % (22.26 %taxes

Net Income $ 24,902 $ 26,751 $ 30,628 (6.91 ) (18.70 ) % %



Weightedaveragecommon 32,944,761 34,184,431 34,313,492 shares(basic)

Common share 28,098 36,827 41,878 equivalents

Weightedaveragecommon 32,972,859 34,221,258 34,355,370 shares(diluted)



Basic ) )earnings per $ 0.76 $ 0.78 $ 0.89 (2.56 % (14.61 %share

Diluted ) )earnings per $ 0.76 $ 0.78 $ 0.89 (2.56 % (14.61 %share



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

Net income $ 24,902 $ 26,751 $ 30,628

Noninterestexpense components

Add - mergerand - - 24,696 acquisitionexpenses

Noncoreincreases to - - 24,696 incomebefore taxes

Net taxbenefitassociated - - (6,560 ) with noncoreitems (1)

Total tax - - (6,560 ) impact

Noncoreincreases to - - 18,136 net income

Operating $ 24,902 $ 26,751 $ 48,764 (6.91 ) (48.93 )net income % %



Dilutedearnings per ) )share, on an $ 0.76 $ 0.78 $ 1.42 (2.56 % (46.48 %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 3.25 % 3.74 % 4.09 % margin (FTE)

Return onaverageassets GAAP(calculated 0.79 % 0.94 % 1.06 % by dividingnet incomeby averageassets)

Return onaverageassets on anoperatingbasis(calculated 0.79 % 0.94 % 1.69 % by dividingnetoperatingearnings byaverageassets)

Return onaveragecommonequity GAAP(calculated 5.97 % 6.22 % 7.59 % by dividingnet incomeby averagecommonequity)

Return onaveragecommonequity on anoperatingbasis(calculated 5.97 % 6.22 % 12.09 % by dividingnetoperatingearnings byaveragecommonequity)



CONSOLIDATED STATEMENTS OF INCOME

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

Six Months Ended

% Change

Jun 2020 June 30 June 30 vs. 2020 2019 Jun 2019



Interest income

Interest on federal funds sold and $ 292 $ 1,073 (72.79 )short-term investments %

Interest and dividends on securities 15,806 16,012 (1.29 ) %

Interest and fees on loans 190,656 196,531 (2.99 ) %

Interest on loans held for sale 591 71 732.39 %

Total interest income 207,345 213,687 (2.97 ) %

Interest expense

Interest on deposits 17,919 18,206 (1.58 ) %

Interest on borrowings 4,024 6,937 (41.99 ) %

Total interest expense 21,943 25,143 (12.73 ) %

Net interest income 185,402 188,544 (1.67 ) %

Provision for loan losses 45,000 2,000 2,150.00 %

Net interest income after provision 140,402 186,544 (24.74 )for loan losses %

Noninterest income

Deposit account fees 7,799 9,486 (17.78 ) %

Interchange and ATM fees 10,110 10,310 (1.94 ) %

Investment management 14,125 13,901 1.61 %

Mortgage banking income 5,866 4,216 39.14 %

Increase in cash surrender value of 2,588 2,268 14.11 %life insurance policies

Gain on life insurance benefits 692 - 100.00%

Loan level derivative income 6,461 1,573 310.74 %

Other noninterest income 6,984 8,427 (17.12 ) %

Total noninterest income 54,625 50,181 8.86 %

Noninterest expenses

Salaries and employee benefits 74,618 71,969 3.68 %

Occupancy and equipment expenses 18,590 15,554 19.52 %

Data processing and facilities 3,117 3,368 (7.45 )management %

FDIC assessment 503 1,394 (63.92 ) %

Merger and acquisition expense - 25,728 (100.00 ) %

Other noninterest expenses 36,619 31,330 16.88 %

Total noninterest expenses 133,447 149,343 (10.64 ) %

Income before income taxes 61,580 87,382 (29.53 ) %

Provision for income taxes 9,927 21,529 (53.89 ) %

Net Income $ 51,653 $ 65,853 (21.56 ) %



Weighted average common shares 33,564,596 31,226,985 (basic)

Common share equivalents 31,991 48,381

Weighted average common shares 33,596,587 31,275,366 (diluted)



Basic earnings per share $ 1.54 $ 2.11 (27.01 ) %

Diluted earnings per share $ 1.54 $ 2.11 (27.01 ) %



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

Net Income $ 51,653 $ 65,853

Noninterest expense components

Add - merger and acquisition - 25,728 expenses

Noncore increases to income before - 25,728 taxes

Net tax benefit associated with - (6,758 ) noncore items (1)

Add - adjustment for tax effect ofpreviously incurred merger and - 650 acquisition expenses

Total tax impact - (6,108 )

Noncore increases to net income $ - $ 19,620

Operating net income $ 51,653 $ 85,473 (39.57 ) %



Diluted earnings per share, on an $ 1.54 $ 2.73 (43.59 )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) 3.48 % 4.12 %

Return on average assets GAAP(calculated by dividing net income 0.86 % 1.30 % by average assets)

Return on average assets on anoperating basis (calculated by 0.86 % 1.69 % dividing net operating earnings byaverage assets)

Return on average common equity GAAP(calculated by dividing net income 6.10 % 9.80 % by average common equity)

Return on average common equity onan operating basis (calculated by 6.10 % 12.72 % dividing net operating earnings byaverage common equity)



ASSET QUALITY

(Unaudited, dollars in Nonperforming Assets Atthousands)

June 30 March 31 June 30 2020 2020 2019

Nonperforming loans

Commercial & industrial loans $ 20,736 $ 21,435 $ 24,895

Commercial real estate loans 6,313 4,949 833

Small business loans 619 450 168

Residential real estate loans 14,561 14,502 11,762

Home equity 6,437 6,571 7,514

Other consumer 148 133 122

Total nonperforming loans 48,814 48,040 45,294

Other real estate owned - - 2,889

Total nonperforming assets $ 48,814 $ 48,040 $ 48,183



Nonperforming loans/gross loans 0.52 % 0.54 % 0.51 %

Nonperforming assets/total 0.37 % 0.40 % 0.42 %assets

Allowance for credit losses/ 229.80 % 192.29 % 145.63 %nonperforming loans

Allowance for credit losses/ 1.20 % 1.04 % 0.74 %total loans

Delinquent loans/total loans 0.24 % 0.33 % 0.24 %



Nonperforming Assets Reconciliation for the Three Months Ended

June 30 March 31 June 30 2020 2020 2019



Nonperforming assets beginning $ 48,040 $ 48,049 $ 43,331 balance

New to nonperforming 8,215 6,515 4,801

Acquired loans - - 2,317

Loans charged-off (710 ) (734 ) (472 )

Loans paid-off (2,210 ) (5,079 ) (3,289 )

Loans restored to performing (4,529 ) (561 ) (1,266 )status

Acquired other real estate owned - - 2,818

Other 8 (150 ) (57 )

Nonperforming assets ending $ 48,814 $ 48,040 $ 48,183 balance



Net Charge-Offs (Recoveries)

Three Months Ended Six Months Ended

June 30 March June 30 June 30 June 30 2020 31 2019 2020 2019 2020

Net charge-offs (recoveries)

Commercial and industrial loans $ (4 ) $ (42 ) $ - $ (46 ) $ (124 )

Commercial real estate loans - - (13 ) - (46 )

Small business loans 33 106 29 139 147

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

Home equity (91 ) 80 53 (11 ) 100

Other consumer 262 241 111 503 257

Total net charge-offs $ 200 $ 384 $ 180 $ 584 $ 333



Net charge-offs to average loans 0.01 % 0.02 % 0.01 % 0.01 % 0.01 %(annualized)



Troubled Debt Restructurings At

June 30 March 31 June 30 2020 2020 2019

Troubled debt restructurings on accrual $ 17,741 $ 18,129 $ 22,423 status

Troubled debt restructurings on nonaccrual 24,098 23,842 27,841 status

Total troubled debt restructurings $ 41,839 $ 41,971 $ 50,264



BALANCE SHEET AND CAPITAL RATIOS

June 30 March 31 June 30 2020 2020 2019

Gross loans/total deposits 87.34 % 94.69 % 96.16 %

Common equity tier 1 capital ratio (1) 12.22 % 11.95 % 12.08 %

Tier 1 leverage capital ratio (1) 9.57 % 10.74 % 10.45 %

Common equity to assets ratio GAAP 12.84 % 14.02 % 14.10 %

Tangible common equity to tangible assets 9.12 % 10.01 % 9.92 %ratio (2)

Book value per share GAAP $ 50.75 $ 50.50 $ 47.67

Tangible book value per share (2) $ 34.59 $ 34.46 $ 32.00

(1) Estimated number for June 30, 2020.

(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, 2020 March 31, 2020 June 30, 2019

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 $ 724,634 $ 132 0.07 % $ 72,552 $ 160 0.89 % $ 104,157 $ 647 2.49 %sold, and short terminvestments

Securities

Securities - trading 2,393 - - % 2,263 - - % 1,894 - - %

Securities - taxable 1,206,631 7,831 2.61 % 1,189,965 7,957 2.69 % 1,240,509 8,521 2.76 %investments

Securities - nontaxable 1,145 11 3.86 % 1,237 12 3.90 % 1,739 17 3.92 %investments (1)

Total securities $ 1,210,169 $ 7,842 2.61 % $ 1,193,465 $ 7,969 2.69 % $ 1,244,142 $ 8,538 2.75 %

Loans held for sale 50,613 359 2.85 % 28,045 232 3.33 % 15,710 40 1.02 %

Loans

Commercial and industrial 1,914,830 17,363 3.65 % 1,403,199 16,940 4.86 % 1,405,693 20,960 5.98 %(1)

Commercial real estate (1) 4,051,342 42,371 4.21 % 4,012,125 45,851 4.60 % 4,091,335 50,860 4.99 %

Commercial construction 538,767 5,314 3.97 % 555,741 6,901 4.99 % 460,921 7,265 6.32 %

Small business 174,438 2,388 5.51 % 174,668 2,562 5.90 % 166,440 2,610 6.29 %

Total commercial 6,679,377 67,436 4.06 % 6,145,733 72,254 4.73 % 6,124,389 81,695 5.35 %

Residential real estate 1,474,495 13,801 3.76 % 1,560,839 14,619 3.77 % 1,746,723 17,475 4.01 %

Home equity 1,133,034 10,132 3.60 % 1,136,931 11,827 4.18 % 1,146,066 13,313 4.66 %

Total consumer real estate 2,607,529 23,933 3.69 % 2,697,770 26,446 3.94 % 2,892,789 30,788 4.27 %

Other consumer 24,971 500 8.05 % 27,843 572 8.26 % 29,413 683 9.31 %

Total loans $ 9,311,877 $ 91,869 3.97 % $ 8,871,346 $ 99,272 4.50 % $ 9,046,591 $ 113,166 5.02 %

Total interest-earning $ 11,297,293 $ 100,202 3.57 % $ 10,165,408 $ 107,633 4.26 % $ 10,410,600 $ 122,391 4.72 %assets

Cash and due from banks 119,692 122,707 125,507

Federal Home Loan Bank 23,175 14,699 22,161 stock

Other assets 1,287,620 1,166,775 1,041,346

Total assets $ 12,727,780 $ 11,469,589 $ 11,599,614

Interest-bearing liabilities

Deposits

Savings and interest $ 3,679,729 $ 1,101 0.12 % $ 3,270,719 $ 1,934 0.24 % $ 3,205,512 $ 2,175 0.27 %checking accounts

Money market 1,972,986 1,377 0.28 % 1,872,003 3,173 0.68 % 1,975,900 4,440 0.90 %

Time deposits 1,186,189 4,549 1.54 % 1,346,890 5,785 1.73 % 1,375,726 4,563 1.33 %

Total interest-bearing $ 6,838,904 $ 7,027 0.41 % $ 6,489,612 $ 10,892 0.68 % $ 6,557,138 $ 11,178 0.68 %deposits

Borrowings

Federal Home Loan Bank 339,393 433 0.51 % 131,225 528 1.62 % 372,260 2,373 2.56 %borrowings

Line of Credit - - - % - - - % 8,636 83 3.85 %

Long-term borrowings 71,629 343 1.93 % 74,912 561 3.01 % 74,932 745 3.99 %

Junior subordinated 62,849 446 2.85 % 62,849 478 3.06 % 71,508 701 3.93 %debentures

Subordinated debentures 49,635 618 5.01 % 49,612 617 5.00 % 84,294 1,045 4.97 %

Total borrowings $ 523,506 $ 1,840 1.41 % $ 318,598 $ 2,184 2.76 % $ 611,630 $ 4,947 3.24 %

Total interest-bearing $ 7,362,410 $ 8,867 0.48 % $ 6,808,210 $ 13,076 0.77 % $ 7,168,768 $ 16,125 0.90 %liabilities

Noninterest-bearing demand 3,371,262 2,680,718 2,641,470 deposits

Other liabilities 315,979 251,469 171,703

Total liabilities $ 11,049,651 $ 9,740,397 $ 9,981,941

Stockholders' equity 1,678,129 1,729,192 1,617,673

Total liabilities and $ 12,727,780 $ 11,469,589 $ 11,599,614 stockholders' equity



Net interest income $ 91,335 $ 94,557 $ 106,266



Interest rate spread (2) 3.09 % 3.49 % 3.82 %



Net interest margin (3) 3.25 % 3.74 % 4.09 %



Supplemental Information

Total deposits, including $ 10,210,166 $ 7,027 $ 9,170,330 $ 10,892 $ 9,198,608 $ 11,178 demand deposits

Cost of total deposits 0.28 % 0.48 % 0.49 %

Total funding liabilities, $ 10,733,672 $ 8,867 $ 9,488,928 $ 13,076 $ 9,810,238 $ 16,125 including demand deposits

Cost of total funding 0.33 % 0.55 % 0.66 %liabilities

(1) The total amount of adjustment to present interest income and yield on a fully tax-equivalent basis is $237,000, $253,000, and $247,000 for the three months ended June 30, 2020, March 31, 2020, and June 30, 2019, 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, 2020 June 30, 2019

Interest Interest

Average Earned/ Yield/ Average Earned/ Yield/

Balance Paid Rate Balance Paid Rate

Interest-earning assets

Interest earningdeposits withbanks, federal $ 398,593 $ 292 0.15 % $ 86,673 $ 1,073 2.50 %funds sold, andshort terminvestments

Securities

Securities - 2,328 - - % 1,756 - - %trading

Securities - 1,198,298 15,788 2.65 % 1,163,058 15,986 2.77 %taxable investments

Securities -nontaxable 1,191 23 3.88 % 1,738 34 3.94 %investments (1)

Total securities $ 1,201,817 $ 15,811 2.65 % $ 1,166,552 $ 16,020 2.77 %

Loans held for sale 39,329 591 3.02 % 9,611 71 1.49 %

Loans

Commercial and 1,659,014 34,303 4.16 % 1,260,562 35,400 5.66 %industrial (1)

Commercial real 4,031,734 88,222 4.40 % 3,668,191 90,090 4.95 %estate (1)

Commercial 547,254 12,215 4.49 % 424,034 12,882 6.13 %construction

Small business 174,553 4,950 5.70 % 165,910 5,094 6.19 %

Total commercial 6,412,555 139,690 4.38 % 5,518,697 143,466 5.24 %

Residential real 1,517,667 28,420 3.77 % 1,339,099 27,022 4.07 %estate

Home equity 1,134,983 21,959 3.89 % 1,116,507 25,488 4.60 %

Total consumer real 2,652,650 50,379 3.82 % 2,455,606 52,510 4.31 %estate

Other consumer 26,406 1,072 8.16 % 22,787 996 8.81 %

Total loans $ 9,091,611 $ 191,141 4.23 % $ 7,997,090 $ 196,972 4.97 %

Totalinterest-earning $ 10,731,350 $ 207,835 3.89 % $ 9,259,926 $ 214,136 4.66 %assets

Cash and due from 121,199 115,407 banks

Federal Home Loan 18,937 16,958 Bank stock

Other assets 1,227,199 830,474

Total assets $ 12,098,685 $ 10,222,765

Interest-bearing liabilities

Deposits

Savings andinterest checking $ 3,475,223 $ 3,035 0.18 % $ 3,049,430 $ 4,129 0.27 %accounts

Money market 1,922,495 4,550 0.48 % 1,721,439 7,159 0.84 %

Time deposits 1,266,540 10,334 1.64 % 1,048,223 6,918 1.33 %

Totalinterest-bearing $ 6,664,258 $ 17,919 0.54 % $ 5,819,092 $ 18,206 0.63 %deposits

Borrowings

Federal Home Loan 235,309 961 0.82 % 243,296 3,083 2.56 %Bank borrowings

Line of Credit - - - % 5,446 104 3.85 %

Long-term 73,271 904 2.48 % 39,329 777 3.98 %borrowings

Junior subordinated 62,849 924 2.96 % 72,393 1,385 3.86 %debentures

Subordinated 49,623 1,235 5.00 % 64,595 1,588 4.96 %debentures

Total borrowings $ 421,052 $ 4,024 1.92 % $ 425,059 $ 6,937 3.29 %

Totalinterest-bearing $ 7,085,310 $ 21,943 0.62 % $ 6,244,151 $ 25,143 0.81 %liabilities

Noninterest-bearing 3,025,990 2,480,235 demand deposits

Other liabilities 283,724 142,856

Total liabilities $ 10,395,024 $ 8,867,242

Stockholders' 1,703,661 1,355,523 equity

Total liabilitiesand stockholders' $ 12,098,685 $ 10,222,765 equity



Net interest income $ 185,892 $ 188,993



Interest rate 3.27 % 3.85 %spread (2)



Net interest margin 3.48 % 4.12 %(3)



Supplemental Information

Total deposits,including demand $ 9,690,248 $ 17,919 $ 8,299,327 $ 18,206 deposits

Cost of total 0.37 % 0.44 %deposits

Total fundingliabilities, $ 10,111,300 $ 21,943 $ 8,724,386 $ 25,143 including demanddeposits

Cost of total 0.44 % 0.58 %funding liabilities

(1) The total amount of adjustment to present interest income and yield on a fully tax-equivalent basis is $490,000 and $449,000 for the six months ended June 30, 2020 and 2019, 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 Capital Metrics

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

The following table summarizes the calculation of the Company's tangible common equity ratio and tangible book value per share at the dates indicated:

June 30 March 31 June 30 2020 2020 2019

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

Stockholders' equity $ 1,671,692 $ 1,679,656 $ 1,636,003 (a)(GAAP)

Less: Goodwill and other 532,202 533,672 537,896 intangibles

Tangible common equity $ 1,139,490 $ 1,145,984 $ 1,098,107 (b)

Tangible assets

Assets (GAAP) $ 13,022,500 $ 11,980,240 $ 11,603,199 (c)

Less: Goodwill and other 532,202 533,672 537,896 intangibles

Tangible assets $ 12,490,298 $ 11,446,568 $ 11,065,303 (d)



Common Shares 32,942,110 33,260,005 34,321,061 (e)



Common equity to assets 12.84 % 14.02 % 14.10 % (a/ratio (GAAP) c)

Tangible common equity (b/to tangible assets ratio 9.12 % 10.01 % 9.92 % d)(Non-GAAP)

Book value per share $ 50.75 $ 50.50 $ 47.67 (a/(GAAP) e)

Tangible book value per $ 34.59 $ 34.46 $ 32.00 (b/share (Non-GAAP) e)



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 2020 2020 2019 2020 2019

Netinterest $ 91,098 $ 94,304 $ 106,019 $ 185,402 $ 188,544 (a)income(GAAP)



Noninterestincome $ 28,190 $ 26,435 $ 28,648 $ 54,625 $ 50,181 (b)(GAAP)

Noninterestincome onan $ 28,190 $ 26,435 $ 28,648 $ 54,625 $ 50,181 (c)operatingbasis(Non-GAAP)



Noninterestexpense $ 66,607 $ 66,840 $ 93,032 $ 133,447 $ 149,343 (d)(GAAP)

Less:

Merger andacquisition - - 24,696 - 25,728 expense

Noninterestexpense onan $ 66,607 $ 66,840 $ 68,336 $ 133,447 $ 123,615 (e)operatingbasis(Non-GAAP)



Totalrevenue $ 119,288 $ 120,739 $ 134,667 $ 240,027 $ 238,725 (a+b)(GAAP)

Totaloperating $ 119,288 $ 120,739 $ 134,667 $ 240,027 $ 238,725 (a+c)revenue(Non-GAAP)



Ratios

Noninterestincome as a% of total 23.63 % 21.89 % 21.27 % 22.76 % 21.02 % (b/revenue (a+b))(GAAPbased)

Noninterestincome as a% of totalrevenue on 23.63 % 21.89 % 21.27 % 22.76 % 21.02 % (c/an (a+c))operatingbasis(Non-GAAP)

Efficiency (d/ratio (GAAP 55.84 % 55.36 % 69.08 % 55.60 % 62.56 % (a+b))based)

Efficiencyratio on an (e/operating 55.84 % 55.36 % 50.74 % 55.60 % 51.78 % (a+c))basis(Non-GAAP)



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

2020 2019

Q2 Q1 Q4

Volume Interest Margin Volume Interest Margin Volume Interest Margin Impact Impact Impact

(Dollars in thousands)

Reported Total $ 11,297,293 $ 91,335 3.25 % $ 10,165,408 $ 94,557 3.74 % $ 10,197,973 $ 100,249 3.90 %(GAAP)

Adjustments

PPP Volume @ 1% (581,351 ) (1,474 ) 0.12 % - - - % - - - %

PPP Fee - (2,247 ) (0.08 ) - - - % - - - %amortization %

Cash Position (vs (624,634 ) (106 ) 0.19 % 27,448 62 (0.01 ) 827 1 - %$100M) %

Adjusted Margin 3.48 % 3.73 % 3.90 %

Acquired loan (1,660 ) (0.06 ) (866 ) (0.03 ) (3,422 ) (0.13 )accretion % % %

CD fair value mark (149 ) (0.01 ) (210 ) (0.01 ) (1,416 ) (0.06 ) % % %

Core Margin 3.41 % 3.69 % 3.71 %(Non-GAAP)



Core Margin Compression (0.28 ) (0.02 ) % %



Cash (0.01 ) (0.01 ) % %

Securities - % - %

Loans (0.43 ) (0.07 ) % %

Deposits 0.15 % 0.05 %

Borrowings 0.01 % 0.01 %

(0.28 ) (0.02 ) % %

APPENDIX D: Current Expected Credit Loss ("CECL")

The following table shows the allowance by category for the periods indicated:

June 30 March 31 January 1 December 31 2020 2020 2020 2019

CECL CECL CECL Incurred Loss Methodology Methodology Methodology Methodology

(Dollars in thousands)

Commercial and $ 25,662 $ 21,649 $ 15,659 $ 17,594 industrial

Commercial real estate 36,956 29,498 20,224 32,935

Commercial construction 4,501 3,747 2,401 6,053

Small business 4,561 3,829 2,241 1,746

Residential real estate 15,046 14,847 13,691 3,440

Home equity 24,860 17,910 12,907 5,576

Other consumer 590 896 637 396

Total allowance for $ 112,176 $ 92,376 $ 67,760 $ 67,740 credit losses



Total Loans (GAAP) $ 9,359,648 $ 8,916,430 $ 8,873,639 $ 8,873,639

Total Loans, excluding $ 8,566,665 $ 8,916,430 $ 8,873,639 $ 8,873,639 PPP (Non-GAAP)



Allowance as a % of 1.20 % 1.04 % 0.76 % 0.76 %total loans (GAAP)

Allowance as a % oftotal loans, excluding 1.31 % 1.04 % 0.76 % 0.76 %PPP (Non-GAAP)



APPENDIX E: 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, Health Care & Social Assistance, Other Services (except Public Administration), Arts, Entertainments & Recreation, Transportation & Warehousing, as well as Educational Services). 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, 2020 and March 31, 2020 within industries that are deemed to be highly impacted by the COVID-19 pandemic:

Highly Impacted COVID-19 Industries - Balances



June 30, 2020 (1) March 31, 2020

(Dollars in thousands)



Accommodations $ 414,723 $ 411,384

Food Services 164,467 155,415

Retail Trade 490,137 526,711

Health Care and Social Assistance 185,295 206,484

Other Services (except Public Administration) 153,009 160,159

Arts, Entertainment, and Recreation 96,640 88,202

Transportation and Warehousing 77,354 84,805

Educational Services 45,720 44,922

Total $ 1,627,345 $ 1,678,082

(1) June 30, 2020 amounts exclude balances of processed PPP loans.

Highly Impacted COVID-19 Industries - Details

June 30, 2020 March 31, 2020

(Dollars in thousands)

Accommodations

Balance $ 414,723 $ 411,384

Average borrower loan size $ 4,083 $ 4,100

% secured by real estate 99.5 % 98.0 %

Weighted average loan to value 53.5 % 54.8 %

Other information:

- The accommodation portfolio consists of 71 properties representing acombination of flagged (61%) and non-flagged (39%) hotels, motels and inns.

- Approximately 90% of the balances outstanding are secured by propertieslocated within New England states with the largest concentration inMassachusetts (60%).



Food Services

Balance $ 164,467 $ 155,415

Average borrower loan size $ 430 $ 388

% secured by real estate 59.8 % 61.3 %

Weighted average loan to value 49.9 % 46.7 %

Other information:

- The food services portfolio includes full-service restaurants (66%),limited service restaurants and fast food (32%), and other types of foodservice (caterers, bars, mobile food service 2%).



Retail Trade

Balance $ 490,137 $ 526,711

Average borrower loan size $ 473 $ 466

% secured by real estate 44.9 % 43.1 %

Weighted average loan to value 54.1 % 54.0 %

Other information:

- The retail trade portfolio consists broadly of food and beverage stores(40%), motor vehicle and parts dealers (26%), gasoline stations (14%), andall other retailers account for (20%).

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



Health Care and Social Assistance

Balance $ 185,295 $ 206,484

Average borrower loan size $ 641 $ 652

% secured by real estate 73.8 % 69.7 %

Weighted average loan to value 46.3 % 46.9 %

Other information:

- The healthcare portfolio consists of nursing and residential carefacilities (38%), ambulatory care (29%), social assistance (20%) andhospitals (13%).



Other Services (except Public Administration)

Balance $ 153,009 $ 160,159

Average borrower loan size $ 261 $ 272

% secured by real estate 49.1 % 49.1 %

Weighted average loan to value 47.4 % 46.5 %

Other information:

- The other services portfolio consists of various for-profit andnot-for-profit services diversified across religious, civic and socialservice organizations (44%), repair and maintenance business (30%) andpersonal services, including car washes, beauty salons, laundry services,funeral homes, pet care and other types of services (26%).



Arts, Entertainment, and Recreation

Balance $ 96,640 $ 88,202

Average borrower loan size $ 764 $ 737

% secured by real estate 83.7 % 82.8 %

Weighted average loan to value 47.5 % 44.0 %

Other information:

- Amusement, gambling and recreational industries make up a majority of thiscategory (95%) and include amusement/theme parks, bowling centers, fitnesscenters, golf courses, marinas, and other recreational industries. Otherindustries including museums, performing arts, and spectator sports accountfor the remaining outstanding balances (5%).





Transportation and Warehousing

Balance $ 77,354 $ 84,805

Average borrower loan size $ 557 $ 611

% secured by real estate 61.9 % 56.0 %

Weighted average loan to value 53.0 % 52.2 %

Other information:

- The transportation and warehousing portfolio consists of warehousing andstorage (55%), transit, ground passenger transportation and trucktransportation (36%) and other transportation related activities (9%).



Educational Services

Balance $ 45,720 $ 44,922

Average borrower loan size $ 623 $ 598

% secured by real estate 86.7 % 89.5 %

Weighted average loan to value 33.3 % 31.8 %

Other information:

- The educational services portfolio consists of elementary and secondaryschools (46%), colleges and universities (38%) and other types of for profitand not-for-profit educational and training schools (16%).

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 have an average loan size of $137,000 and small business loans, which are all under $5.0 million, have an average loan size of $31,000. Additional details below are provided regarding loan sizes of the commercial real estate and commercial and industrial portfolios as of June 30, 2020:

Commercial Real Estate (Including Construction)

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

DollarAmount $ 2,553,037 $ 858,009 $ 850,903 $ 346,886 $ 4,608,835 (in'000s)

# of 4,072 121 61 14 4,268 loans

Commercial and Industrial (Including PPP)

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

DollarAmount $ 1,481,196 $ 251,557 $ 228,032 $ 43,860 $ 2,004,645 (in'000s)

# of 14,569 38 17 2 14,626 loans



APPENDIX F: COVID-19 Related Modifications Details

Deferrals by Modification Type

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

(Dollars in thousands)

Commercialand $ 55,936 $ 33,502 $ 11,089 $ 24,127 $ 124,654 $ 2,004,645 6.2 %industrial

Commercialreal estate 564,942 231,722 43,862 43,263 883,789 4,608,835 19.2 %(1)

Business 13,153 4,572 889 203 18,817 170,288 11.1 %Banking

Residential 112,330 2,514 2,837 - 117,681 1,431,129 8.2 %real estate

Home equity 15,213 - 13,417 - 28,630 1,120,523 2.6 %

Consumer 350 - - - 350 24,228 1.4 %

Totalactivedeferrals $ 761,924 $ 272,310 $ 72,094 $ 67,593 $ 1,173,921 $ 9,359,648 12.5 %as of June30, 2020

(1) Balances include commercial construction deferrals.

* In general, monthly payment deferrals (exclusive of escrow payments for taxes and/or insurance) have been granted for periods of up to three months for customers paying interest payments on interest only loans and lines of credit, or for customers paying principal & interest payments on amortizing loans. * In general, monthly principal payment deferrals, where the customer continues to pay make interest payments while deferring the principal amounts due, have been granted for periods of up to four to six months for some commercial and business banking customers. * Of all initial deferral modification requests, approximately 77% of customers, representing 73% of the dollars requested, have been granted deferrals for up to three monthly payments, while 23% of customers, representing 27% of the dollars requested, have been granted deferrals for up to four to six monthly payments. * To date, all subsequent requests granted for extensions beyond the initial deferral period have been for up to an additional three monthly payments, which is up to a total of six monthly payments when combined with the initial deferral period.

Deferrals by Industry

June 30, 2020

(Dollars in thousands)

Highly Impacted Industries

Accommodation $ 255,833

Food Services 70,271

Retail Trade 49,579

Health Care and Social Assistance 44,724

Other Services (except Public Administration) 25,302

Arts, Entertainment, and Recreation 59,136

Transportation and Warehousing 32,358

Educational Services 2,226

Total Highly Impacted Industries 539,429



Other Industries

Real Estate and Leasing 425,339

Construction 17,292

All Other Industries 47,713

Total Other Industries 490,344



Consumer (residential, home equity and other) 144,148

Grand Total $ 1,173,921



APPENDIX G: Paycheck Protection Program (PPP) Loans

The table below summarizes Rockland Trust's PPP loan activity processed through June 30, 2020:

June 30, 2020

Units $

(Dollars in thousands)

Processed 5,626 $ 792,983

Average Loan Size n/a 141

Estimated Fees n/a 26,181



PPP Activity by Industry

Highly Impacted Industries

Accommodation 80 $ 15,521

Food Services 469 65,467

Retail Trade 986 55,510

Health Care and Social Assistance 358 87,470

Other Services (except Public Administration) 505 32,389

Arts, Entertainment, and Recreation 134 8,650

Transportation and Warehousing 135 19,964

Educational Services 86 18,570

Total Highly Impacted Industries 2,753 $ 303,541



Other Industries

Construction 896 $ 199,272

Manufacturing 298 80,489

Professional, Scientific, and Technical Services 616 73,935

Administrative and Support and Waste Management and 313 45,552 Remediation Services

Wholesale Trade 177 48,329

Real Estate and Leasing 265 19,309

All Other Industries 308 22,556

Total Other Industries 2,873 $ 489,442

Total 5,626 $ 792,983

View source version on businesswire.com: https://www.businesswire.com/news/home/20200723005909/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