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What changed in INDEPENDENT BANK CORP's 10-K — 2023 vs 2024

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Paragraph-level year-over-year comparison of INDEPENDENT BANK CORP's 2023 and 2024 10-K annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2024 report.

+375 added−370 removedSource: 10-K (2025-02-28) vs 10-K (2024-02-28)

Top changes in INDEPENDENT BANK CORP's 2024 10-K

375 paragraphs added · 370 removed · 310 edited across 8 sections

Item 1. Business

Business — how the company describes what it does

73 edited+17 added−16 removed56 unchanged
Biggest changeColleagues are provided with competitive compensation, a comprehensive benefits package and an environment that supports a healthy work-life balance. Through utilizing effective listening and feedback tools to monitor colleague sentiments around the work experience, the Company is nationally recognized for being a top work place in areas such as employee appreciation, professional development, compensation and benefits, and work-life flexibility.
Biggest changeColleague Engagement Rockland Trust is committed to a culture of inclusion, respect, teamwork, and employee engagement. Colleagues are provided with competitive compensation, a comprehensive benefits package and an environment that supports a healthy work-life balance. The Company surveys its colleagues quarterly and annually utilizing effective listening and feedback tools to monitor colleague sentiments around the work experience.
This significant law affects the lending, deposit, investment, trading and operating activities of financial institutions and their holding companies. Key provisions of the Dodd-Frank Act are as follows: • eliminated the federal prohibitions on paying interest on demand deposits, thus allowing businesses to have interest-bearing checking accounts. • broadened the base for FDIC insurance assessments.
This significant law affects the lending, deposit, investment, trading and operating activities of financial institutions and their holding companies. 13 Key provisions of the Dodd-Frank Act are as follows: • eliminated the federal prohibitions on paying interest on demand deposits, thus allowing businesses to have interest-bearing checking accounts. • broadened the base for FDIC insurance assessments.
The Company has no investments that met the definition of Covered Funds under the foregoing rules. Collins Amendment The Collins Amendment includes provisions which are intended to subject bank holding companies to the same capital requirements as bank subsidiaries and to eliminate, or significantly reduce, the use of hybrid capital instruments, especially trust preferred securities, as regulatory capital.
The Company has no investments that met the definition of Covered Funds under the foregoing rules. 14 Collins Amendment The Collins Amendment includes provisions which are intended to subject bank holding companies to the same capital requirements as bank subsidiaries and to eliminate, or significantly reduce, the use of hybrid capital instruments, especially trust preferred securities, as regulatory capital.
The Bank believes this portfolio is well diversified with loans secured by a variety of property types, such as owner-occupied and nonowner-occupied commercial real estate, retail, office, industrial, warehouse, industrial development bonds and other special purpose properties, such as hotels, motels, nursing homes, restaurants, churches, and recreational facilities.
The Bank believes this portfolio is well diversified with loans secured by a variety of property types, such as nonowner-occupied commercial real estate, retail, office, industrial, warehouse, industrial development bonds and other special purpose properties, such as hotels, motels, nursing homes, restaurants, churches, and recreational facilities.
The payment experience on nonowner-occupied commercial real estate projects is typically dependent on the successful operation of the real estate project, which can be significantly impacted by supply and demand conditions within the markets for commercial, retail, office, industrial/warehouse and multi-family tenancy.
The payment experience on nonowner-occupied commercial real estate projects is typically dependent on the successful operation of the real estate project, which can be significantly impacted by supply and demand conditions within the markets 7 for commercial, retail, office, industrial/warehouse and multi-family tenancy.
Under the Rules, the minimum capital ratios for the Company and the Bank are as follows: • 4.5% Common Equity Tier 1 ("CET1") to risk-weighted assets. • 6.0% Tier 1 capital (i.e., CET1 plus Additional Tier 1) to risk-weighted assets. • 8.0% Total capital (i.e., Tier 1 plus Tier 2) to risk-weighted assets. • 4.0% Tier 1 leverage capital ratio.
Under the Rules, the minimum capital ratios for the Company and the Bank are as follows: • 4.5% Common Equity Tier 1 (“CET1”) to risk-weighted assets. • 6.0% Tier 1 capital (i.e., CET1 plus Additional Tier 1) to risk-weighted assets. • 8.0% Total capital (i.e., Tier 1 plus Tier 2) to risk-weighted assets. • 4.0% Tier 1 leverage capital ratio.
Competitive factors considered in attracting and retaining deposits include deposit and investment products and their respective rates of return, brand awareness, liquidity, and risk, among other factors, such as convenient branch locations and hours of operation, personalized customer service, online and mobile access to accounts and automated teller machines. 6 Table of Contents The Bank’s market area is attractive and entry into the market area by financial institutions previously not competing there has occurred and may continue to occur, which could impact the Bank’s growth or profitability.
Competitive factors considered in attracting and retaining deposits include deposit and investment products and their respective rates of return, brand awareness, liquidity, and risk, among other factors, such as convenient branch locations and hours of operation, personalized customer service, online and mobile access to accounts and automated teller machines. 6 The Bank’s market area is attractive and entry into the market area by financial institutions previously not competing there has occurred and may continue to occur, which could impact the Bank’s growth or profitability.
In June 2010, the Federal Reserve, OCC and FDIC issued comprehensive final guidance on incentive compensation policies intended to ensure that the incentive compensation policies of banking organizations do not undermine the safety and soundness of such organizations by encouraging excessive risk-taking.
In 2010, the Federal Reserve, OCC and FDIC issued comprehensive final guidance on incentive compensation policies intended to ensure that the incentive compensation policies of banking organizations do not undermine the safety and soundness of such organizations by encouraging excessive risk-taking.
The Anti-Money Laundering Act of 2020 also contains provisions that promote increased information-sharing and use of technology and increases penalties for violations of the Bank Secrecy Act and includes whistleblower incentives, both of which could increase the prospect of regulatory enforcement.
The Anti-Money Laundering Act of 2020 also contains provisions that promote increased information-sharing and use of technology and increase penalties for violations of the Bank Secrecy Act and includes whistleblower incentives, both of which could increase the prospect of regulatory enforcement.
Notwithstanding the foregoing, the Bank has established a more restrictive limit, which may only be exceeded with the approval of the Board of Directors (the "Board"). There were no borrowers whose total indebtedness in aggregate exceeded the Bank’s self-imposed restrictive limit.
Notwithstanding the foregoing, the Bank has established a more restrictive limit, which may only be exceeded with the approval of the Board of Directors (the “Board”). There were no borrowers whose total indebtedness in aggregate exceeded the Bank’s self-imposed restrictive limit.
Security Corporation; • RTC LIHTC Investments LLC and Rockland MHEF Fund LLC, established to invest primarily in Massachusetts-based low-income housing tax credit projects; • Rockland Trust Phoenix LLC, formed for the purpose of holding, maintaining, and disposing of certain foreclosed properties; • Bright Rock Capital Management LLC, which was established to act as a registered investment advisor under the Investment Advisors Act of 1940; and • Compass Exchange Advisors LLC, which was established to provide like-kind exchange services pursuant to section 1031 of the Internal Revenue Code.
Security Corporation; • RTC LIHTC Investments LLC and Rockland MHEF Fund LLC, established to invest primarily in Massachusetts-based low-income housing tax credit projects; • Rockland Trust Phoenix LLC, formed for the purpose of holding, maintaining, and disposing of certain foreclosed properties; • Bright Rock Capital Management LLC, which was established to act as a registered investment advisor under the Investment Advisors Act of 1940; and • Compass Exchange Advisors LLC, which was established to provide like-kind exchange services pursuant to section 1031 of the Internal Revenue Code of 1986, as amended.
Incentive Compensation The Dodd-Frank Act required the federal bank regulatory agencies and the U.S Securities and Exchange Commission ("SEC") to establish joint regulations or guidelines prohibiting incentive-based payment arrangements at specified regulated entities, with at least $1 billion in total assets such as the Company and the Bank, that encourage inappropriate risks by providing an executive officer, employee, director or principal shareholder with excessive compensation, fees, or benefits or that could lead to material financial loss to the entity.
Incentive Compensation The Dodd-Frank Act required the federal bank regulatory agencies and the U.S Securities and Exchange Commission (“SEC”) to establish joint regulations or guidelines prohibiting incentive-based payment arrangements at specified regulated entities, with at least $1 billion in total assets such as the Company and the Bank, that encourage inappropriate risks by providing an executive officer, employee, director or principal shareholder with excessive compensation, fees, or benefits or that could lead to material financial loss to the entity.
The Bank's mobile banking services give customers the ability to use a variety of mobile devices to check balances, track account activity, pay bills, search transactions, and set up alerts for text or e-mail messages for changes in their account. 10 Table of Contents Customers can also transfer funds between Rockland Trust accounts, deposit checks into their account, and identify the nearest branch or ATM directly from their mobile device.
The Bank’s mobile banking services give customers the ability to use a variety of mobile devices to check balances, track account activity, pay bills, search transactions, and set up alerts for text or e-mail messages for changes in their account. 10 Customers can also transfer funds between Rockland Trust accounts, deposit checks into their account, and identify the nearest branch or ATM directly from their mobile device.
Treasury Department’s "OFAC" administers and enforces economic and trade sanctions against targeted foreign countries and regimes, under authority of various laws, including designated foreign countries, nationals and others. OFAC publishes lists of specially designated targets and countries.
Treasury Department’s “OFAC” administers and enforces economic and trade sanctions against targeted foreign countries and regimes, under authority of various laws, including designated foreign countries, nationals and others. OFAC publishes lists of specially designated targets and countries.
The Company provides its shareholders with the opportunity to vote on executive compensation every year. • broadened the scope of derivative instruments, and the Company is subject to increased regulation of its derivative business, including record-keeping, reporting requirements, and heightened supervision. • created a new Consumer Financial Protection Bureau ("CFPB") with broad powers to supervise and enforce consumer protection laws.
The Company provides its shareholders with the opportunity to vote on executive compensation every year. • broadened the scope of derivative instruments, and the Company is subject to increased regulation of its derivative business, including record-keeping, reporting requirements, and heightened supervision. • created a new Consumer Financial Protection Bureau (“CFPB”) with broad powers to supervise and enforce consumer protection laws.
Regulation W Transactions between a bank and its "affiliates" are quantitatively and qualitatively restricted under the Federal Reserve Act. The FDI Act applies Sections 23A and 23B to insured nonmember banks in the same manner and to the same extent as if they were members of the Federal Reserve System.
Regulation W Transactions between a bank and its “affiliates” are quantitatively and qualitatively restricted under the Federal Reserve Act. The FDI Act applies Sections 23A and 23B to insured nonmember banks in the same manner and to the same extent as if they were members of the Federal Reserve System.
The Rules also require the Company and the Bank to maintain a "capital conservation buffer" in an amount greater than 2.5%, on top of the minimum risk-weighted asset ratios. The capital conservation buffer is designed to absorb losses during periods of economic stress.
The Rules also require the Company and the Bank to maintain a “capital conservation buffer” in an amount greater than 2.5%, on top of the minimum risk-weighted asset ratios. The capital conservation buffer is designed to absorb losses during periods of economic stress.
In general, subject to certain specified exemptions, a bank and its subsidiaries are limited in their ability to engage in "covered transactions" with affiliates: • to an amount equal to 10% of the bank’s capital and surplus, in the case of covered transactions with any one affiliate; and • to an amount equal to 20% of the bank’s capital and surplus, in the case of covered transactions with all affiliates.
In general, subject to certain specified exemptions, a bank and its subsidiaries are limited in their ability to engage in “covered transactions” with affiliates: • to an amount equal to 10% of the bank’s capital and surplus, in the case of covered transactions with any one affiliate; and • to an amount equal to 20% of the bank’s capital and surplus, in the case of covered transactions with all affiliates.
Residential mortgages are offered in amounts based on up to 97% of the lesser of the appraised value of the residential property securing the loan or the purchase price, and generally requires borrowers to obtain private mortgage insurance when the amount of the loan exceeds 80% of the value of the property.
Residential mortgages are offered in amounts based on up to 97% of the lesser of the appraised value of the residential property securing the loan or the purchase price, and generally require borrowers to obtain private mortgage insurance when the amount of the loan exceeds 80% of the value of the property.
Rockland Trust’s 123 branch locations feature expanded use of video-tellers, and are supplemented by internet and mobile banking services as well as automated teller machine ("ATM") cards and debit cards which may be used to conduct various banking transactions at ATMs maintained at each of the Bank’s full-service offices and 28 additional remote ATM locations.
Rockland Trust’s 123 branch locations feature expanded use of video-tellers, and are supplemented by internet and mobile banking services as well as automated teller machine (“ATM”) cards and debit cards which may be used to conduct various banking transactions at ATMs maintained at each of the Bank’s full-service offices and 55 additional remote ATM locations.
Levels within the hierarchy of lending authorities range from individual lenders to the Loan Approval Committee levels.
Levels within the hierarchy of lending authorities range from individual lenders to the Company’s Loan Approval Committee.
The following table summarizes the minimum capital levels under the Rules: 12 Table of Contents Bank Holding Company Total Risk-Based Ratio Tier 1 Risk-Based Ratio Common Equity Tier 1 Capital Tier 1 Leverage Capital Ratio Total Risk-Based Ratio Tier 1 Risk-Based Ratio Common Equity Tier 1 Capital Tier 1 Leverage Capital Ratio Category Well capitalized > 10% and > 8% and > 6.5% > 5% n/a n/a > 6.5% n/a Adequately capitalized > 8% and > 6% and > 4.5% > 4% > 8% and > 6% and > 4.5% > 4% Undercapitalized or or or or n/a Significantly undercapitalized or or n/a n/a n/a n/a The Company is currently in compliance with the above-described regulatory capital requirements.
The following table summarizes the minimum capital levels under the Rules: Bank Holding Company Total Risk-Based Ratio Tier 1 Risk-Based Ratio Common Equity Tier 1 Capital Tier 1 Leverage Capital Ratio Total Risk-Based Ratio Tier 1 Risk-Based Ratio Common Equity Tier 1 Capital Tier 1 Leverage Capital Ratio Category Well capitalized > 10% and > 8% and > 6.5% > 5% n/a n/a > 6.5% n/a Adequately capitalized > 8% and > 6% and > 4.5% > 4% > 8% and > 6% and > 4.5% > 4% Undercapitalized or or or or n/a Significantly undercapitalized or or n/a n/a n/a n/a The Company is currently in compliance with the above-described regulatory capital requirements.
Rockland Trust also offers person-to-person payment capabilities, allowing for simple and secure funds transfers between most banks and credit unions. 11 Table of Contents Regulation The following discussion sets forth certain material elements of the regulatory framework applicable to bank holding companies and their subsidiaries and provides certain specific information relevant to the Company.
Rockland Trust also offers person-to-person payment capabilities, allowing for simple and secure funds transfers between most banks and credit unions. Regulation The following discussion sets forth certain material elements of the regulatory framework applicable to bank holding companies and their subsidiaries and provides certain specific information relevant to the Company.
Rockland Trust has been named one of the Boston Globe’s Top Places to Work for 15 years running and has continued to be the top rated bank in its size category since 2015.
Rockland Trust has been named one of the Boston Globe’s Top Places to Work for 16 years running and has continued to be the top-rated bank in its size category since 2015.
The Company and the Bank maintain all capital ratios above the required capital conservation buffer of 2.5%. Pursuant to Section 38 of the Federal Deposit Insurance Act, federal banking agencies are required to take “prompt corrective action” if an insured depository institution fails to meet certain capital adequacy standards.
The Company and the Bank maintain all capital ratios above the required capital conservation buffer of 2.5%. 11 Pursuant to Section 38 of the Federal Deposit Insurance Act (the “FDI Act”), federal banking agencies are required to take “prompt corrective action” if an insured depository institution fails to meet certain capital adequacy standards.
Capital Requirements The Federal Reserve has established rules covering a capital framework for U.S. banking organizations, referred to herein as the "Rules". The FDIC has adopted substantially identical rules.
Capital Requirements The Federal Reserve has established rules covering a capital framework for U.S. banking organizations, referred to herein as the “Rules.” The FDIC has adopted substantially identical rules.
The Federal Reserve reviews, as part of the regular, risk-focused examination process, the incentive compensation arrangements of banking organizations, such as the Company, that are not "large, complex banking organizations." These reviews are tailored to each organization based on the scope and complexity of the organization’s activities and the prevalence of incentive compensation arrangements.
The Federal Reserve reviews, as part of the regular, risk-focused examination process, the incentive compensation arrangements of banking organizations, such as the Company, that are not “large, complex banking organizations.” These reviews are tailored to each organization based on the scope and complexity of the organization’s activities and the prevalence of incentive compensation arrangements.
In accordance with federal and state banking law, the Bank is permitted, with certain exceptions, to make loans and commitments to any one borrower, including related entities, in the aggregate amount of not more than 20% of the Bank’s stockholders’ equity, or $584.2 million at December 31, 2023, which is the Bank’s legal lending limit.
In accordance with federal and state banking law, the Bank is permitted, with certain exceptions, to make loans and commitments to any one borrower, including related entities, in the aggregate amount of not more than 20% of the Bank’s stockholders’ equity, or $593.2 million at December 31, 2024, which is the Bank’s legal lending limit.
In May 2018, the Economic Growth, Regulatory Relief, and Consumer Protection Act ("EGRRCPA") was signed into law, making certain limited amendments to the Dodd-Frank Act, as well as certain targeted modifications to other post-financial crisis regulations.
In 2018, the Economic Growth, Regulatory Relief, and Consumer Protection Act (“EGRRCPA”) was signed into law, making certain limited amendments to the Dodd-Frank Act, as well as certain targeted modifications to other post-financial crisis regulations.
The Patriot Act contains sweeping anti-money laundering and financial transparency laws and imposes various regulations, including standards for verifying client identification at account opening, and rules to promote cooperation among financial institutions, regulators and law enforcement entities in identifying parties that may be involved in terrorism or money laundering. 13 Table of Contents Office of Foreign Assets Control Regulation ("OFAC") The U.S.
The Patriot Act contains sweeping anti-money laundering and financial transparency laws and imposes various regulations, including standards for verifying client identification at account opening, and rules to promote cooperation among financial institutions, regulators and law enforcement entities in identifying parties that may be involved in terrorism or money laundering. Office of Foreign Assets Control Regulation (“OFAC”) The U.S.
The term "electronic fund transfer" generally refers to a transaction initiated through an electronic terminal, telephone, computer, or magnetic tape that instructs a financial institution either to credit or to debit a consumer’s asset account.
The term “electronic fund transfer” generally refers to a transaction initiated through an electronic terminal, telephone, computer, or magnetic tape that instructs a financial institution either to credit or to debit a consumer’s asset account.
Regulation W generally excludes all nonbank and nonsavings association subsidiaries of banks from treatment as affiliates, except to the extent that the Federal Reserve decides to treat these subsidiaries as affiliates. Dodd-Frank Wall Street Reform and Consumer Protection Act During 2010, Congress enacted the Dodd-Frank Wall Street Reform and Consumer Protection Act (the "Dodd-Frank Act").
Regulation W generally excludes all nonbank and nonsavings association subsidiaries of banks from treatment as affiliates, except to the extent that the Federal Reserve decides to treat these subsidiaries as affiliates. Dodd-Frank Wall Street Reform and Consumer Protection Act In 2010, Congress enacted the Dodd-Frank Wall Street Reform and Consumer Protection Act (the “Dodd-Frank Act”).
Colleagues are encouraged to recognize each other's excellent internal and external customer service through a peer recognition, “You Make a Difference” award, of which 3,512 awards were earned in 2023. Managers are also provided the opportunity to recognize colleagues privately, through “Kudos” awards.
Colleagues are encouraged to recognize each other’s excellent internal and external customer service through a peer recognition, “You Make a Difference” award, of which 3,541 awards were earned in 2024. Managers are also provided the opportunity to recognize colleagues privately, through “Kudos” awards.
A "covered transaction" includes: • a loan or extension of credit to an affiliate; • a purchase of, or an investment in, securities issued by an affiliate; • a purchase of assets from an affiliate, with some exceptions; • the acceptance of securities issued by an affiliate as collateral for a loan or extension of credit to any party; and • the issuance of a guarantee, acceptance or letter of credit on behalf of an affiliate.
A “covered transaction” includes: • a loan or extension of credit to an affiliate; • a purchase of, or an investment in, securities issued by an affiliate; • a purchase of assets from an affiliate, with some exceptions; • the acceptance of securities issued by an affiliate as collateral for a loan or extension of credit to any party; and • the issuance of a guarantee, acceptance or letter of credit on behalf of an affiliate.
ITEM 1. BUSINESS General Independent Bank Corp. (the "Company") is a state chartered, federally registered bank holding company headquartered in Rockland, Massachusetts that was incorporated under Massachusetts law in 1985. The Company is the sole stockholder of Rockland Trust Company ("Rockland Trust" or the "Bank"), a Massachusetts trust company chartered in 1907.
ITEM 1. BUSINESS General Independent Bank Corp. (the “Company”) is a state chartered, federally registered bank holding company headquartered in Rockland, Massachusetts that was incorporated under Massachusetts law in 1985. The Company is the sole stockholder of Rockland Trust Company (“Rockland Trust” or the “Bank”), a Massachusetts trust company chartered in 1907.
The Company’s Code of Ethics and other Corporate Governance documents are also available free of charge on the Company’s website in the Investor Relations section. Information contained on the Company’s website and the SEC website is not incorporated by reference into this Form 10-K.
The Company’s Code of Ethics and other Corporate Governance documents are also available free of charge on the Company’s website in the Investor Relations section. Information contained on the Company’s website and the SEC website is not incorporated by reference into this Report.
The FDIC and the Massachusetts Division of Banks have assigned the Bank a CRA rating of "Outstanding" as of the latest examination. Anti-Money Laundering Act of 2020 The Anti-Money Laundering Act of 2020, enacted on January 1, 2021 as part of the National Defense Authorization Act, does not directly impose new requirements on banks, but requires the U.S.
The FDIC and the Massachusetts Division of Banks have assigned the Bank a CRA rating of “Outstanding” as of the latest examination. Anti-Money Laundering Act of 2020 The Anti-Money Laundering Act of 2020, enacted as part of the National Defense Authorization Act, does not directly impose new requirements on banks, but requires the U.S.
See Note 18, "Regulatory Matters" within the Notes to the Consolidated Financial Statements included in Item 8 of this Report for more information. FDIC Deposit Insurance The Bank's deposit accounts are insured to the maximum extent permitted by law by the Deposit Insurance Fund, which is administered by the FDIC.
See Note 18, “Regulatory Matters” within the Notes to the Consolidated Financial Statements included in Item 8 of this Report for more information. FDIC Deposit Insurance The Bank’s deposit accounts are insured to the maximum extent permitted by law by the Deposit Insurance Fund (“DIF”), which is administered by the FDIC.
The consumer real estate loan portfolio at December 31, 2023 was as follows: Select Statistics Regarding the Consumer Portfolio (Dollars in thousands) Average loan size $ 111 Largest individual consumer loan outstanding $ 5,043 Consumer nonperforming loans/consumer loans 0.31 % Sources of Funds The Bank's primary sources of funds are derived from deposits and to a lesser extent, borrowings as well as the amortization, prepayment, and maturities of loans and securities.
The consumer real estate loan portfolio at December 31, 2024 was as follows: Select Statistics Regarding the Consumer Portfolio (Dollars in thousands) Average loan size $ 116 Largest individual consumer loan outstanding $ 5,290 Consumer nonperforming loans/consumer loans 0.35 % Sources of Funds The Bank’s primary sources of funds are derived from deposits and to a lesser extent, borrowings as well as the amortization, prepayment, and maturities of loans and securities.
General The Company is registered as a bank holding company under the Bank Holding Company Act of 1956, as amended (the "BHCA"), and as such is subject to regulation by the Board of Governors of the Federal Reserve System (the "Federal Reserve").
General The Company is registered as a bank holding company under the Bank Holding Company Act of 1956, as amended (the “BHCA”), and as such is subject to regulation by the Board of Governors of the Federal Reserve System (the “Federal Reserve”).
The Bank’s primary footprint for branch presence and deposit gathering is generally comprised of Eastern Massachusetts and Worcester County. Lending Activities The Bank’s gross loan portfolio (loans before allowance for credit losses) amounted to $14.3 billion on December 31, 2023, or 73.8% of total assets. The Bank’s borrowers primarily consist of small-to-upper middle market sized businesses and consumers.
The Bank’s primary footprint for branch presence and deposit gathering is generally comprised of Eastern Massachusetts and Worcester County. Lending Activities The Bank’s gross loan portfolio (loans before allowance for credit losses) amounted to $14.5 billion on December 31, 2024, or 74.9% of total assets. The Bank’s borrowers primarily consist of small-to-upper middle market sized businesses and consumers.
Volcker Rule The Volcker Rule prohibits an insured depository institution and its affiliates from: (i) engaging in "proprietary trading" and (ii) investing in or sponsoring certain types of investment funds (defined as "Covered Funds"). The rule also effectively prohibits short-term trading strategies and prohibits the use of some hedging strategies.
Volcker Rule The Volcker Rule prohibits an insured depository institution and its affiliates from: (i) engaging in “proprietary trading” and (ii) investing in or sponsoring certain types of investment funds (defined as “Covered Funds”). The rule also effectively prohibits short-term trading strategies and prohibits the use of some hedging strategies.
The Dodd-Frank Act also permanently increased the maximum amount of deposit insurance for banks, savings institutions and credit unions to $250,000 per depositor. 14 Table of Contents • requires publicly traded companies to give stockholders a nonbinding vote on executive compensation and so-called "golden parachute" payments.
The Dodd-Frank Act also permanently increased the maximum amount of deposit insurance for banks, savings institutions and credit unions to $250,000 per depositor. • requires publicly traded companies to give stockholders a nonbinding vote on executive compensation and so-called “golden parachute” payments.
(The Company has included its web address and the SEC website address only as inactive textual references and does not intend them to be active links to the Company's website or the SEC website.) 18 Table of Contents
(The Company has included its web address and the SEC website address only as inactive textual references and does not intend them to be active links to the Company’s website or the SEC website.) 17
Colleagues are also offered a full suite of learning and development programs designed to support professional growth and career advancement. Formal colleague development programs include the Rising Stars Development Program (for entry-level colleague career advancement), the Commercial Lender Development Program, and the Branch Management Development Program.
Colleagues are also offered a full suite of learning and development programs designed to support professional growth and career advancement. Formal colleague development programs include the Rising Stars Development Program (for entry-level colleague career advancement), Strategies and Tactics for Emerging Professionals, the Commercial Lender Development Program, and the Retail Management Training Program.
Rockland Trust encourages colleagues to continually seek ways to learn and grow. The Company's Performance Management and Feedback System allows managers to formally recognize colleagues’ achievements and identify goals and areas for improvement. In addition to this annual feedback, colleagues are also periodically spotlighted in many other ways.
The Company’s Performance Management and Feedback System allows managers to formally recognize colleagues’ achievements and identify goals and areas for improvement. In addition to this annual feedback, colleagues are also periodically spotlighted in many other ways.
At December 31, 2023, the Company had total assets of $19.3 billion, total deposits of $14.9 billion, and stockholders’ equity of $2.9 billion. Subsidiaries At December 31, 2023, Independent Bank Corp.’s consolidated subsidiaries included the Company’s banking subsidiary, Rockland Trust, which is the Company’s only reportable operating segment.
At December 31, 2024, the Company had total assets of $19.4 billion, total deposits of $15.3 billion, and stockholders’ equity of $3.0 billion. Subsidiaries At December 31, 2024, Independent Bank Corp.’s consolidated subsidiaries included the Company’s banking subsidiary, Rockland Trust, which is the Company’s only reportable operating segment.
The Bank’s largest relationship as of December 31, 2023 consisted of 11 loans with an aggregate exposure of $171.8 million.
The Bank’s largest relationship as of December 31, 2024 consisted of 11 loans with an aggregate exposure of $157.8 million.
The following pie chart shows the diversification of the commercial and industrial portfolio as of December 31, 2023: 8 Table of Contents Select Statistics Regarding the Commercial and Industrial Portfolio (Dollars in thousands) Average loan size (excluding floor plan tranches) $ 399 Largest individual commercial and industrial loan outstanding $ 36,820 Commercial and industrial nonperforming loans/commercial and industrial loans 1.28 % Consumer Loans The Bank’s consumer portfolio consists of real estate loans comprised of residential mortgages and home equity loans and lines, all secured by one-to-four family residential properties, as well as other consumer loans.
The following pie chart shows the diversification of the commercial and industrial portfolio as of December 31, 2024: 8 Select Statistics Regarding the Commercial and Industrial Portfolio (Dollars in thousands) Average loan size (excluding floor plan tranches) $ 558 Largest individual commercial and industrial loan outstanding $ 46,614 Commercial and industrial nonperforming loans/commercial and industrial loans 0.46 % Consumer Loans The Bank’s consumer portfolio consists of real estate loans comprised of residential mortgages and home equity loans and lines, all secured by one-to-four family residential properties, as well as other consumer loans.
Additionally, on November 16, 2023, the FDIC Board of Directors approved a final rule to implement a special assessment to recover the loss to the Deposit Insurance Fund ("DIF") associated with protecting uninsured depositors following the closures of three prominent financial institutions in 2023.
In November 2023, the FDIC Board of Directors approved a final rule to implement a special assessment to recover losses to the DIF associated with protecting uninsured depositors following the closures of three prominent financial institutions in 2023.
In addition to the Boston Globe's ranking, Rockland Trust has been recognized as a "Best Place to Work" for LGBTQ Equality, scoring 100% on the Human Rights Campaign’s Corporate Equality Index since 2016. Demographic s As of December 31, 2023, Rockland Trust employed 1,787 total colleagues, 772 of whom are officers of the Bank.
In addition to the Boston Globe’s ranking, Rockland Trust has been recognized as a “Best Place to Work” for LGBTQ Equality, scoring 100% on the Human Rights Campaign’s Corporate Equality Index since 2016. 15 As of December 31, 2024, Rockland Trust employed 1,837 total colleagues, 817 of whom are officers of the Bank.
Loan Portfolio The following table shows the balance of the gross average loan portfolio by category, the percentage of the gross average loan portfolio, and the percentage of total interest income that the loans generated, by category, for the fiscal years indicated: Average Balance for the Year Ended % of Total Loans % of Total Interest Income Generated for the Years Ended December 31, December 31, 2023 2023 2022 2021 (Dollars in thousands) Commercial $ 10,741,394 76.3 % 71.5 % 72.9 % 71.8 % Consumer real estate 3,311,517 23.5 % 20.0 % 16.7 % 19.6 % Other consumer 31,202 0.2 % 0.3 % 0.3 % 0.4 % Total $ 14,084,113 100.0 % 91.8 % 89.9 % 91.8 % Commercial Loans Commercial loans consist of commercial real estate loans, commercial construction loans, commercial and industrial loans, and small business loans (which generally consist of loans to businesses with commercial credit needs of less than or equal to $750,000).
Loan Portfolio The following table shows the balance of the gross average loan portfolio by category, the percentage of the gross average loan portfolio, and the percentage of total interest income that the loans generated, by category, for the fiscal years indicated: Average Balance for the Year Ended % of Total Loans % of Total Interest Income Generated for the Years Ended December 31, December 31, 2024 2024 2023 2022 (Dollars in thousands) Commercial $ 10,778,807 75.1 % 70.9 % 71.5 % 72.9 % Consumer real estate 3,549,712 24.7 % 21.4 % 20.0 % 16.7 % Other consumer 33,761 0.2 % 0.3 % 0.3 % 0.3 % Total $ 14,362,280 100.0 % 92.6 % 91.8 % 89.9 % Commercial Loans Commercial loans consist of commercial real estate loans, commercial construction loans, commercial and industrial loans, and small business loans (which generally consist of loans to businesses with commercial credit needs of less than or equal to $750,000).
Rockland Trust has an inclusive workforce that enables the Company to better perform for its customers and the diverse communities in which it operates. The Company is committed to respecting all colleagues as individuals and to be courteous and considerate to each colleague.
Rockland Trust deliberately nurtures an inclusive workplace so that each employee is valued and respected. The Company believes creating this culture enables the Company to better perform for its customers and the communities in which it operates. The Company is committed to respecting all colleagues as individuals and to be courteous and considerate to each colleague.
The 7 Table of Contents current environment has created additional considerations over office exposure as the development of hybrid work environments may reduce demand for large office spaces and as a result potentially reduce the valuation of collateral to loans within this property type. Amongst other actions, management is actively monitoring upcoming maturities within this subset of loans.
The current environment has created additional considerations over office exposure as the development of hybrid work environments has reduced and may continue to reduce demand for large office spaces and as a result has reduced and may potentially continue to reduce the valuation of collateral to loans within this property type.
Consequently, unintentional actions by the Bank could have a material adverse impact on our lending and results of operations if the actions are found to be discriminatory by our regulators.
In such actions, the CFPB and others have used a disparate impact analysis, which measures discriminatory results without regard to intent. Consequently, unintentional actions by the Bank could have a material adverse impact on our lending and results of operations if the actions are found to be discriminatory by our regulators.
Rockland Trust is subject to regulation and examination by the Commissioner of Banks of the Commonwealth of Massachusetts (the "Commissioner") and the FDIC.
Rockland Trust is subject to regulation and examination by the Commissioner of Banks of the Commonwealth of Massachusetts (the “Commissioner”) and the Federal Deposit Insurance Corporation (“FDIC”).
Bank Secrecy Act The Bank Secrecy Act requires financial institutions to monitor account activity, keep records and file reports that are determined to have a high degree of usefulness in criminal, tax and regulatory matters, and to implement anti-money laundering programs and compliance procedures.
Bank Secrecy Act The Bank Secrecy Act requires financial institutions to monitor account activity, keep records and file reports that are determined to have a high degree of usefulness in criminal, tax and regulatory matters, and to implement anti-money laundering programs and compliance procedures. 12 USA Patriot Act The Patriot Act strengthens U.S. law enforcement’s and the intelligence communities’ abilities to work cohesively to combat terrorism on a variety of fronts.
Additionally, according to a recent internal survey, 83% of colleagues would recommend working at Rockland Trust. Benefits include medical, dental and vision insurance, long-term disability insurance, life insurance, a 401(k) voluntary savings plan, an additional defined contribution retirement savings plan, paid time off, illness/personal time, paid parental leave, childcare assistance, wellness program RockFit, supplemental insurance, pet insurance, and more.
Rockland Trust’s competitive benefits include medical, dental and vision insurance, long-term disability insurance, life insurance, a 401(k) voluntary savings plan, an additional defined contribution retirement savings plan, paid time off, illness/personal time, paid parental leave, childcare assistance, wellness program RockFit, dedicated Employee Assistance Program, paid volunteer days, supplemental insurance, pet insurance, and more.
It is the Bank’s practice to obtain personal guarantees from the principals of the borrower on commercial real estate loans and to obtain financial statements at least annually from all commercial real estate borrowers.
It is the Bank’s general practice to obtain personal guarantees from the principals of the borrower on commercial real estate loans. Additionally, the Bank typically obtains financial statements from commercial real estate borrowers at least annually or as deemed appropriate based on size and risk associated with the loans.
Select Statistics Regarding the Commercial Real Estate Portfolio (Dollars in thousands) Average loan size $ 1,618 Largest individual commercial real estate mortgage outstanding $ 61,826 Commercial real estate nonperforming loans/commercial real estate loans 0.26 % Commercial and industrial loans consist of both term loans and revolving or non-revolving lines of credit.
The following pie chart shows the diversification of the commercial real estate portfolio as of December 31, 2024: * Inclusive of commercial construction balances Select Statistics Regarding the Commercial Real Estate Portfolio (Dollars in thousands) Average loan size $ 1,939 Largest individual commercial real estate mortgage outstanding $ 60,609 Commercial real estate nonperforming loans/commercial real estate loans 0.99 % Commercial and industrial loans consist of both term loans and revolving or non-revolving lines of credit.
There has been an established diversity and inclusion program at the Company for over 18 years, which continues to grow and evolve.
There has been an established inclusion program designed to ensure colleagues are valued and respected at the Company for over 19 years, and this program continues to grow and evolve.
Community Reinvestment Act ("CRA") Pursuant to the CRA and similar provisions of Massachusetts law, regulatory authorities review the performance of the Company and the Bank in meeting the credit needs of the communities served by the Bank.
It is uncertain the extent to which any such additional future assessments could impact the Company’s future deposit insurance expense. Community Reinvestment Act (“CRA”) Pursuant to the CRA and similar provisions of Massachusetts law, regulatory authorities review the performance of the Company and the Bank in meeting the credit needs of the communities served by the Bank.
The Bank will typically originate home equity loans and lines in an amount up to 80% of the appraised value, hybrid valuation methods or automated valuation methods, reduced for any loans outstanding that are secured by such collateral. Other consumer loans primarily 9 Table of Contents consist of investment management secured lines of credit, installment loans and overdraft protection lines.
The Bank will typically originate home equity loans and lines in an amount up to 75% of the value, as determined by an appraisal, hybrid valuation method or automated valuation method, reduced for any loans outstanding that are secured by such collateral.
In addition, Rockland Trust employees volunteered over 17,500 service hours in our communities in 2023. Commitment to Diversity, Equity and Inclusion At Rockland Trust, management believes each relationship matters, and that statement goes far beyond the Company's customers.
In total, the Bank and our affiliated foundation contributed over $4.3 million to over 1,000 local nonprofit and community organizations. In addition, Rockland Trust employees volunteered over 23,000 service hours in our communities in 2024. Commitment to Relationships At Rockland Trust, management believes each relationship matters, and that statement goes far beyond the Company’s customers.
Other business units include Audit, Corporate Services, Executive, Executive Administration, Finance, Human Resources, Investment Management Group, Information Technology, Loan Operations, Marketing, Mortgage, and Risk. Rockland Trust’s average full time equivalent was 1,721, as of December 31, 2023. Colleague Engagement Rockland Trust is committed to a culture of inclusion, respect, teamwork, and employee engagement.
The Company’s largest business units, in terms of total headcount, include Retail, Commercial, and Operations, employing 42.4%, 16.7% and 8.3% of colleagues, respectively. Other business units include Audit, Corporate Services, Executive, Executive Administration, Finance, Human Resources, Investment Management Group, Information Technology, Loan Operations, Marketing, Mortgage, and Risk. Rockland Trust’s average full time equivalent was 1,775, as of December 31, 2024.
In order to celebrate the academic achievements of colleagues, an 17 Table of Contents annual celebration is hosted by the Company's Chief Executive Officer when they receive a degree or certification. Colleagues are also recognized for extraordinary efforts through annual “Shining Star” awards and other awards at the annual all employee meeting.
In order to celebrate the academic achievements of colleagues, an annual celebration is hosted by the Company’s Chief Executive Officer to honor degree and certification recipients for that year.
USA Patriot Act The Patriot Act strengthens U.S. law enforcement’s and the intelligence communities’ abilities to work cohesively to combat terrorism on a variety of fronts. The impact of the Patriot Act on financial institutions of all kinds is significant and wide-ranging.
The impact of the Patriot Act on financial institutions of all kinds is significant and wide-ranging.
Rockland Trust works to ensure colleagues have an opportunity to be heard, valued and engaged. Rockland Trust offers four Employee Resource Groups ("ERGs"): Inclusion Network, EmpowHer Alliance, Pride Alliance, and The Money Circle. These voluntary, employee-led groups join together to provide opportunities for colleagues to get involved in making the Company's workforce and communities more inclusive and equitable.
Rockland Trust strives to ensure colleagues have an opportunity to be heard, valued and engaged. Rockland Trust offers five Employee Resource Groups (“ERGs”) which are open to all employees: Inclusion Network, EmpowHer Alliance, Pride Alliance, Unidos, and The Money Circle.
The Federal Deposit Insurance Act ("FDI Act") requires the FDIC to take this action in connection with the systemic risk determination announced on March 12, 2023. The charge is determined by applying the assessment rate to the Bank's assessment base, which is defined as the estimated uninsured deposits exceeding $5 billion at December 31, 2022.
The charge was determined by applying a quarterly assessment rate to the Bank’s assessment base, which was defined as the estimated uninsured deposits exceeding $5 billion at December 31, 2022, to be paid over eight quarters beginning in the first quarter of 2024.
Consumer Protection Regulations As a financial institution with more than $10 billion in assets, the Bank is supervised by the Consumer Financial Protection Bureau (“CFPB”) for consumer protection purposes. The CFPB’s regulation of the Bank is focused on risks to consumers and compliance with the federal consumer financial laws and includes regular examinations of the Bank.
The CFPB’s regulation of the Bank is focused on risks to consumers and compliance with the federal consumer financial laws and includes regular examinations of the Bank. The CFPB, along with the U.S. Department of Justice and bank regulatory authorities, also seeks to enforce discriminatory lending laws.
Also in 2023, the Company piloted a new training called "Inclusive Leadership", which teaches managers and leaders new ways to engage, involve, respect, and value the diverse perspectives and contributions of all team members.
In 2024, for the second year in a row, the Company invited managers and leaders to participate on a voluntary basis in an “Inclusive Leadership” program designed to offer managers and leaders ideas about new ways to engage, involve, respect, and value the varied perspectives and contributions of all team members.
Community Outreach In 2023, the affiliated charitable foundation of Rockland Trust, Rockland Trust Charitable Foundation Inc., donated over $2.4 million to 340 nonprofit organizations throughout the Company’s footprint. In total, the Bank and our affiliated Foundations contributed over $4.2 million to 944 local nonprofit and community organizations.
Colleagues are also recognized for extraordinary efforts through annual “Shining Star” awards and other awards at the annual all employee meeting. 16 Community Outreach In 2024, the affiliated charitable foundation of Rockland Trust, Rockland Trust Charitable Foundation Inc., donated approximately $2.5 million to over 330 nonprofit organizations throughout the Company’s footprint.
Colleagues are also invited to participate in the Company's Online Learning Platform and in-house training opportunities. Many of the Company's training and development programs are built on Gestalt-based leadership principles, developed by the Gestalt International Study Center. Rockland Trust also offers Tuition Reimbursement through Cambridge College Global and other colleges and universities.
Colleagues are invited to participate in the Company’s online learning offerings and facilitator-led training opportunities. Rockland Trust also offers Tuition Reimbursement through a decades-long partnership with Cambridge College Global and other colleges and universities. The partnership with Cambridge College Global allows part-time and full-time colleagues to earn their degree at discounted tuition rates, making it virtually cost-free.
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The following pie chart shows the diversification of the commercial real estate portfolio as of December 31, 2023: (1) Included in the total commercial real estate portfolio balance is $1.3 billion, or 15.1%, of owner occupied commercial real estate loans.
Added
The current environment has created additional considerations over office exposure as the development of hybrid work environments has reduced and may continue to reduce demand for large office spaces and as a result has reduced and may potentially continue to reduce the valuation of collateral to loans within this property type.
Removed
The Company expensed $1.1 million in 2023 as an estimated special assessment, which is expected to be paid over eight quarters beginning in the first quarter of 2024.
Added
Amongst other actions, management is actively monitoring upcoming maturities within this subset of loans.
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As the Bank has now surpassed the $10 billion in assets threshold, it now is also subject to CFPB regulatory supervision and enforcement.
Added
Other consumer 9 loans primarily consist of investment management secured lines of credit, installment loans and overdraft protection lines.
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While it will continue to be examined for compliance with consumer protection regulations by both the FDIC and the Massachusetts Division of Banks ("DOB"), it will now also be similarly monitored and assessed by the CFPB. • debit card and interchange fees must be reasonable and proportional to the issuer’s cost for processing the transaction.

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Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

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Biggest changeFor example, the Company is subject to the Gramm-Leach-Bliley Act which, among other things: (i) imposes certain limitations on the ability to share nonpublic personal information about customers with nonaffiliated third parties; (ii) requires that the Company provide certain disclosures to customers about its information collection, sharing and security practices and afford customers the right to “opt out” of any information sharing by us with nonaffiliated third parties (with certain exceptions); and (iii) requires that the Company develop, implement and maintain a written comprehensive information security program containing appropriate safeguards based on its size and complexity, the nature and scope of its activities, and the sensitivity of customer information processed by the Company, as well as plans for responding to data security breaches.
Biggest changeLegislation and regulation governing the privacy and protection of personal information of individuals (including customers, employees, suppliers and other third parties) have been evolving, expanding and increasing in complexity in recent years, and although the Company makes and will continue to make reasonable efforts to comply with all applicable laws and regulations, there can be no assurance that the Company will not be subject to regulatory action or monetary penalties in the event of an incident. 25 For example, the Company is subject to the Gramm-Leach-Bliley Act which, among other things: (i) imposes certain limitations on the ability to share nonpublic personal information about customers with nonaffiliated third parties; (ii) requires that the Company provide certain disclosures to customers about its information collection, sharing and security practices and afford customers the right to “opt out” of any information sharing by us with nonaffiliated third parties (with certain exceptions); and (iii) requires that the Company develop, implement and maintain a written comprehensive information security program containing appropriate safeguards based on its size and complexity, the nature and scope of its activities, and the sensitivity of customer information processed by the Company, as well as plans for responding to data security breaches.
If the Company is not able to access funding, it may not be able to meet its liquidity needs, which could have an adverse effect on the results of operations or financial condition.
If the Company is not able to access funding, it may not be able to meet its liquidity needs, which could have an adverse effect on its results of operations or financial condition.
The Company’s risk-based technology and systems or the personnel who monitor such technology and systems may not identify and prevent or effectively mitigate successful cyber-attacks when they occur.
The Company’s risk-based technology and systems or the personnel who monitor such technology and systems may not identify and/or prevent or effectively mitigate successful cyber-attacks when they occur.
Computer break-ins, phishing and other disruptions could also jeopardize the security of information stored in and transmitted through Company computer systems and network infrastructure, which may result in litigation or significant liability to the Company and may cause existing and potential customers to refrain from doing business with the Company.
Computer break-ins, phishing and other disruptions could also jeopardize the security of information stored in and transmitted through the Company computer systems and network infrastructure, which may result in litigation or significant liability to the Company and may cause existing and potential customers to refrain from doing business with the Company.
The Company expects risk exposure to cyber-attacks will remain elevated or increase in the future due to, among other things, the increasing size and prominence of the Company in the financial services industry, its expansion of Internet and mobile banking tools and products based on customer needs, and its increasing use of operational software hosted on the Internet as more and more software solutions used in the Company’s operations migrate from solutions hosted within the Company’s firewalls to internet-hosted solutions at third-party locations.
The Company expects risk exposure to cyber-attacks will remain elevated or increase in the future due to, among other things, the increasing size and prominence of the Company in the financial services industry, its expansion of internet and mobile banking tools and products based on customer needs, and its increasing use of operational software hosted on the 24 Internet as more and more software solutions used in the Company’s operations migrate from solutions hosted within the Company’s firewalls to internet-hosted solutions at third-party locations.
Market disruption, including potential disruption resulting from inflation and global supply chain interruption, government and central bank policy actions designed to counteract the effects of recession, changes in investor expectations regarding compensation for market risk, credit risk and liquidity risk and changing economic data could impact both the volatility and magnitude of the directional movements of interest rates.
Market disruption, including potential disruption resulting from inflation, tariffs and global supply chain interruption, government and central bank policy actions designed to counteract the effects of recession, changes in investor expectations regarding compensation for market risk, credit risk and liquidity risk and changing economic data could impact both the volatility and magnitude of the directional movements of interest rates.
Moreover, the subjective nature of methods used by various stakeholders to assess a company with respect to ESG criteria could result in erroneous perceptions or a misrepresentation of our actual ESG policies and practices. Organizations that provide ratings information to investors on ESG matters may also assign unfavorable ratings to the Company.
The subjective nature of methods used by various ESG stakeholders to assess a company with respect to ESG criteria could result in erroneous perceptions or a misrepresentation of our actual ESG policies and practices. Organizations that provide ratings information to investors on ESG matters may also assign unfavorable ratings to the Company.
A deferred tax asset is created by the tax effect of the differences between an asset’s book value and its tax basis. The Company assesses the deferred tax assets periodically to determine the likelihood of the Company’s ability to realize the benefits. These assessments consider the performance of the associated business and its ability to generate future taxable income.
A deferred tax asset is created by the tax effect of the differences between an asset’s book value and its tax basis. The Company assesses its deferred tax assets periodically to determine the likelihood of the Company’s ability to realize available benefits. These assessments consider the performance of the associated business and its ability to generate future taxable income.
Material additions to the allowance would materially decrease the Company’s net income and could have an adverse effect on the Company's results of operations or financial condition. A significant amount of the Company’s loans are concentrated in the Bank’s geographic footprint and adverse conditions in this geographic footprint could negatively impact its results of operations.
Material additions to the allowance would materially decrease the Company’s net income and could have a material adverse effect on the Company’s results of operations or financial condition. A significant amount of the Company’s loans are concentrated in the Bank’s geographic footprint and adverse conditions in this geographic footprint could negatively impact its results of operations.
Deterioration in the performance or financial position of the Federal Home Loan Bank ("FHLB") of Boston might restrict the FHLB of Boston’s ability to meet the funding needs of its members, cause a suspension of its dividend, and cause its stock to be determined to be impaired.
Deterioration in the performance or financial position of the Federal Home Loan Bank (“FHLB”) of Boston might restrict the FHLB of Boston’s ability to meet the funding needs of its members, cause a suspension of its dividend, and cause its stock to be determined to be impaired.
Among the impacts to the Company could include a drop in demand for its products and services, particularly in certain sectors. In addition, the Company could face reductions in creditworthiness on the part of some customers or in the value of assets securing loans.
Impacts to the Company could include a drop in demand for its products and services, particularly in certain sectors. In addition, the Company could face reductions in creditworthiness on the part of some customers or in the value of assets securing loans.
These strategic initiatives and investments may introduce new costs or liabilities which could impact the Company’s ability to grow or maintain acceptable performance. The Company may be unable to integrate systems, personnel or technologies from its strategic investments and initiatives.
These strategic initiatives and investments may introduce new costs or liabilities which could impact the Company’s ability to grow or maintain acceptable performance. The Company may be unable to 22 integrate systems, personnel or technologies from its strategic investments and initiatives.
Additionally, the occurrence of these events could harm the Company's operations thorough interference with communications, including the interruption or loss of its computer systems which could prevent the gathering of deposits, originating loans and processing and controlling business flow, as well as through the destruction of facilities and operational, financial and management information systems, and could cause us to incur significant costs to repair any resulting damage to the Company's property or business relationships. 28 Table of Contents ITEM 1B.
Additionally, the occurrence of these events could harm the Company’s operations thorough interference with communications, including the interruption or loss of its computer systems which could prevent the gathering of deposits, originating loans and processing and controlling business flow, as well as through the destruction of facilities and operational, financial and management information systems, and could cause us to incur significant costs to repair any resulting damage to the Company’s property or business relationships. 28 ITEM 1B.
The CRA, the Equal Credit Opportunity Act, the Fair Housing Act and other fair lending laws and regulations impose non-discriminatory lending and other requirements on financial institutions. The U.S. Department of Justice and other federal agencies, including the FDIC and the Consumer Financial Protection Bureau ("CFPB"), are responsible for enforcing these laws and regulations.
The CRA, the Equal Credit Opportunity Act, the Fair Housing Act and other fair lending laws and regulations impose non-discriminatory lending and other requirements on financial institutions. The U.S. Department of Justice and other federal agencies, including the FDIC and the Consumer Financial Protection Bureau (“CFPB”), are responsible for enforcing these laws and regulations.
The policies and procedures the Company has adopted for the purposes of detecting and preventing the use of its banking network for money laundering and related activities may not completely eliminate instances in which the Company may be used by customers to engage in money laundering and other illegal or improper activities.
The policies and procedures the Company has adopted for the purposes of detecting and preventing the use of its banking network for money laundering and related activities may not completely eliminate instances in which the Company’s platforms may be used by customers to engage in money laundering and other illegal or improper activities.
The Company has strong competition within its market area which may constrain the Company’s ability to grow and achieve profitability. The Company faces significant competition both in attracting deposits and in the origination of loans. See "Market Area and Competition" in Item 1. Business of this Report.
The Company has strong competition within its market area which may constrain the Company’s ability to grow and achieve profitability. The Company faces significant competition both in attracting deposits and in the origination of loans. See “Market Area and Competition” in Item 1. Business of this Report.
Employers are offering increased compensation and opportunities to work with greater flexibility, including remote work, on a permanent basis. These can be important factors in a current employee’s decision to leave the Company as well as in a prospective employee’s decision to join the Company.
Employers are offering increased compensation and opportunities to work with greater flexibility, including remote and hybrid work environments, on a permanent basis. These can be important factors in a current employee’s decision to leave the Company as well as in a prospective employee’s decision to join the Company.
The real estate collateral securing the Company's loans provides an alternate source of repayment in the event of default by the borrower. Should real estate values deteriorate or further deteriorate during the time the credit is extended, the Company is potentially exposed to greater losses.
The real estate collateral securing the Company’s loans provides an alternate source of repayment in the event of default by the borrower. Should real estate values deteriorate during the time the credit is extended, the Company is potentially exposed to greater losses.
The costs of defending, and any adverse outcome from, any challenge with respect to our compliance with fair lending laws could damage our reputation or could have a material adverse effect on our business, financial condition or results of operations.
The costs of defending, and any adverse outcome from, any challenge with respect to the Company’s compliance with fair lending laws could damage the Company’s reputation or could have a material adverse effect on the Company’s business, financial condition or results of operations.
While the Company has seen attempts to gain access against its systems, and expects such attacks will continue, and may intensify, in the future. Although to date the Company has not experienced any material losses relating to cyber-attacks or other information security breaches, there can be no assurance that we will not suffer losses in the future.
The Company has seen attempts to gain unauthorized access to its systems and expects such attempts will continue, and may intensify, in the future. Although to date the Company has not experienced any material losses relating to cyber-attacks or other information security breaches, there can be no assurance that we will not suffer such losses in the future.
The Company's information technology infrastructure and systems may be vulnerable to cyber-terrorism, computer viruses, damage from physical theft, fire, power loss, telecommunications failure or a similar catastrophic event, system failures and other intentional or unintentional interference, fraud and other unauthorized attempts to access or interfere with the systems.
The Company’s information technology infrastructure and systems may be vulnerable to cyber-terrorism, computer viruses, damage from physical theft, fire, power loss, telecommunications failure or a similar catastrophic event, system or third-party software failures and other intentional or unintentional interference, fraud, and other unauthorized attempts to access or interfere with the systems.
Concerns regarding the effectiveness of our measures to safeguard personal information, or even the perception that such measures are inadequate, could cause the Company to lose customers or potential customers and thereby reduce revenues.
Concerns regarding the effectiveness of the Company’s measures to safeguard personal information, or even the perception that such measures are inadequate, could cause the Company to lose customers or potential customers and thereby reduce revenues.
This may result in a delay or unrealized benefit, or in some cases, increased costs or other unforeseen risks to the Company’s business. 22 Table of Contents Risks Related to Financial and Accounting Matters The Company’s securities portfolio performance in difficult market conditions could have adverse effects on the Company’s results of operations.
This may result in a delay or unrealized benefit, or in some cases, increased costs or other unforeseen risks to the Company’s business. Risks Related to Financial and Accounting Matters The Company’s securities portfolio performance in difficult market conditions could have adverse effects on the Company’s results of operations.
Furthermore, the Company may not be able to ensure that all of its 25 Table of Contents customers, suppliers, counterparties and other third parties have appropriate controls in place to protect the confidentiality of information exchanged with them, particularly where such information is transmitted by electronic means.
Furthermore, the Company may not be able to ensure that all its customers, suppliers, counterparties and other third parties have appropriate controls in place to protect the confidentiality of information exchanged with them, particularly where such information is transmitted by electronic means.
Under accounting principles generally accepted in the United States of America ("GAAP"), the Company measures expected credit losses on its securities portfolios in accordance with the CECL methodology, taking into consideration current market conditions, the extent and nature of changes in fair value, issuer rating changes and trends, volatility of earnings, current analysts’ evaluations, the Company’s ability and intent to hold investments until a recovery of amortized cost, as well as other factors.
Under accounting principles generally accepted in the United States of America (“GAAP”), the Company measures expected credit losses on its securities portfolios in accordance with the CECL methodology, taking into consideration quantitative and qualitative factors such as current market conditions, the extent and nature of changes in fair value, issuer rating changes and trends, volatility of earnings, current analysts’ evaluations, the Company’s ability and intent to hold investments until a recovery of amortized cost, as well as other factors.
In addition, loss of key personnel could result in increased recruiting and hiring expenses, which could adversely impact the Company’s net income. The Company’s continued ability to compete effectively depends on its ability to attract new employees and to retain and motivate its existing key employees.
In addition, loss of key personnel could result in increased recruiting and hiring expenses or failure to attract talented key personnel, which could adversely impact the Company’s net income. The Company’s continued ability to compete effectively depends on its ability to attract new talented employees and to retain and motivate its existing key employees.
Commercial real estate loans and small business loans generally expose the Company to greater risk of non-payment and loss than residential mortgage loans because repayment of the loans often depends on the successful operation of the property and the continuity of tenant rental payments.
Commercial real estate loans and small business loans generally expose the Company to greater risk of non-payment and loss than residential mortgage loans because repayment of the loans typically 19 depends on the successful operation of the property and the continuity of tenant rental payments.
These laws and regulations require the Company, among other things, to adopt and enforce "know-your-customer" policies and procedures and to report suspicious and large transactions to applicable regulatory authorities. These laws and regulations have become increasingly complex and detailed, require improved systems and sophisticated monitoring and compliance personnel and have become the subject of enhanced government supervision.
These laws and regulations require the Company, among other things, to adopt and enforce “know-your-customer” policies and procedures and to report suspicious and large transactions to applicable regulatory authorities. These laws and regulations have become increasingly complex and detailed, require improved systems and sophisticated monitoring and compliance personnel and have become the subject of enhanced government supervision.
If hazardous or toxic substances are found, the Company may be liable for remediation costs, as well as for personal injury and property damage. Environmental laws may require the Company to incur substantial expenses and may materially 26 Table of Contents reduce the affected property’s value or limit the Company’s ability to use or sell the affected property.
If hazardous or toxic substances are found, the Company may be liable for remediation costs, as well as for personal injury and property damage. Environmental laws may require the Company to incur substantial expenses and may materially reduce the affected property’s value or limit the Company’s ability to use or sell the affected property.
The Company makes various assumptions and judgments about the collectability of its loan portfolio, including the creditworthiness of borrowers, the value of the real estate and other assets serving as collateral for the repayment of loans, and the enforceability of its loan documents.
The Company makes various assumptions and judgments about the collectability of its loan portfolio, including the creditworthiness of borrowers, the value of the real estate and other assets serving as collateral for the repayment of loans, and the enforce ability of its loan documents.
These events also have resulted in, and could continue to result in, increased regulatory scrutiny and expectations, and could further lead to potentially adverse changes to laws or regulations applicable to the Company, which could have a material impact on the Company’s business and result in increased costs necessary to comply with any such changes.
Moreover, these events have resulted in, and may continue to result in, increased regulatory scrutiny and expectations, and could lead to further changes to laws or regulations applicable to the Company, which could have a material adverse impact on the Company’s business and result in increased costs necessary to comply with any such changes.
Regulatory inquiries, actual or alleged incidents of employee misconduct and rumors, among other things, can substantially damage the Company’s reputation, even if the 27 Table of Contents inquiries, allegations, or rumors are baseless or satisfactorily addressed.
Regulatory inquiries, actual or alleged incidents of employee misconduct and rumors, among other things, can substantially damage the Company’s reputation, even if the inquiries, allegations, or rumors are baseless or satisfactorily addressed.
There can be no assurance that the precautions the Company takes to seek to manage cyber risk related to third-party service providers will be effective or 24 Table of Contents prevent a cyber-attack that could expose the Company to significant operational costs and damages or reputational harm.
There can be no assurance that the precautions the Company takes to seek to manage cyber risk related to third-party service providers will be effective or prevent a cyber-attack that could expose the Company to significant operational costs and damages or reputational harm.
These "digital banks" may be able to achieve economies of scale and offer better pricing than the Company offers for banking products and services, and they may have fewer regulatory burdens than traditional banks such as the Company. However, some new technologies needed to compete effectively result in incremental operating costs and capital investments.
These “digital banks” may be able to achieve economies of scale and offer better pricing than the Company offers for banking products and services, and they may have fewer regulatory burdens than traditional banks such as the Company. However, some modern technologies needed to compete effectively result in incremental operating costs and capital investments.
The labor market continues to experience elevated levels of turnover in the aftermath of the COVID-19 pandemic and the Company has been impacted by an extremely competitive labor market, including increased competition for talent across all aspects of the Company’s business, as well as increased competition with non-traditional competitors, such as fintech companies.
The labor market continues to experience elevated levels of turnover and the Company has been impacted by an extremely competitive labor market, including increased competition for talent across all aspects of the Company’s business, as well as increased competition with non-traditional competitors, such as fintech companies.
Failure to adapt to or comply with regulatory requirements or investor or stakeholder expectations and standards could negatively impact our reputation, our ability to do business with certain customers, vendors, suppliers or other third parties, the Company’s ability to attract and retain employees and our stock price.
Failure to adapt to or comply with changing investor or stakeholder expectations and standards on ESG could negatively impact our reputation, our ability to do business with certain customers, vendors, suppliers or other third parties, the Company’s ability to attract and retain employees and our stock price.
In addition, to the extent changes in the global political environment, including the Russia-Ukraine conflict, the conflict in Israel and surrounding areas and the possible expansion of such conflicts, have had and may continue to have a negative impact on the Company or on the markets in which the Company operates, the Company's business, results of operations and financial condition could be materially and adversely impacted in the future.
In addition, to the extent changes in the global political environment, including the Russia-Ukraine conflict, the conflict in Israel and surrounding areas and the possible expansion of such conflicts, have had and may continue to have a negative impact on the global economy, including the financial services industry generally and, as a result, the Company and the markets in which the Company operates, the Company’s business, results of operations and financial condition could be materially and adversely impacted in the future.
In addition, technology has lowered barriers to entry and made it possible for "non-banks" to offer traditional bank products and services using innovative technological platforms such as fintech and blockchain.
In addition, technology has lowered barriers to entry and made it possible for “non-banks” to offer traditional bank products and services using innovative technological platforms such as fintech and blockchain.
The Company’s market area includes coastal regions that are susceptible to adverse weather conditions and natural disasters including, but not to limited to, rain storms, hurricanes, blizzards and nor'easters and related flooding and wind damage. The nature and level of such natural disasters cannot be predicted and may be exacerbated by global climate change.
Additionally, the Company’s market area includes coastal regions that are susceptible to adverse weather conditions and natural disasters which cannot be predicted and may be exacerbated by global climate change, including, but not to limited to, rain storms, hurricanes, blizzards and nor’easters and related flooding and wind damage.
If this occurs, the Company’s earnings could be adversely affected. The Company's emphasis on originating commercial loans may increase lending risks. At December 31, 2023, 75.1% of the Company's loan portfolio consisted of commercial loans. The Company's commercial loan portfolio includes commercial and industrial loans, commercial real estate loans, commercial construction loans, and small business banking loans.
If this occurs, the Company’s earnings could be adversely affected. The Company’s emphasis on originating commercial loans may increase lending risks. At December 31, 2024, 74.9% of the Company’s loan portfolio consisted of commercial loans. The Company’s commercial loan portfolio includes commercial and industrial loans, commercial real estate loans, commercial construction loans, and small business banking loans.
Factors such as increased prevalence of remote work arrangements and consumer preference for online shopping have led and could continue to lead to a decreased demand for office and retail space, which could impact the value of the future cash flow and value of the involved property that serves as loan collateral.
Factors such as increased prevalence of remote or hybrid work arrangements and consumer preference for online shopping have led and continue to lead to a decreased demand for office and retail space creating increased property vacancies and declining rent growth, which could impact the value of the future cash flow and value of the involved property that serves as loan collateral.
Drafting errors, recording errors, other defects or imperfections in the security interests granted to the Bank and/or changes in law may render liens granted to the Bank unenforceable. The Company may incur losses or expenses if security interests granted to the Bank are not enforceable.
Drafting errors, granting errors, recording errors, other defects or imperfections in the security interests granted to the Bank and/or changes in law may render liens granted to the Bank unenforceable. The Company may incur losses or expenses if security interests granted to the Bank are not properly perfected or are otherwise unenforceable.
Tariffs, retaliatory tariffs or other trade restrictions on products and materials that customers import or export, or a trade war or other 21 Table of Contents related governmental actions related to tariffs, international trade agreements or policies or other trade restrictions have the potential to negatively impact the Company's and/or the Bank's customers' costs, demand for the Bank's customers' products, and/or the U.S. economy or certain sectors thereof and, thus, could adversely impact the Company's business, financial condition and results of operations.
Tariffs, retaliatory tariffs or other trade restrictions on products and materials that customers import or export, including tariffs imposed by the new U.S. presidential administration, or a trade war or other related governmental actions related to tariffs, international trade agreements or policies or other trade restrictions have the potential to negatively impact the Company’s and/or the Bank's customers' costs, demand for the Bank's customers' products, and/or the U.S. economy or certain sectors thereof and, thus, could adversely impact the Company’s business, financial condition and results of operations.
Concerns over the long-term impacts of climate change have led and will continue to lead to governmental efforts around the world to mitigate those impacts. Consumers and businesses also may change their behavior on their own as a result of these concerns.
Concerns over the long-term impacts of climate change have led and could continue to lead to governmental efforts in certain regions of the world to mitigate those impacts. Consumers and businesses also may change their behavior on their own as a result of these concerns.
A problem with one or more loans could require the Company to significantly increase the level of its allowance for credit losses. In addition, federal and state regulators periodically review the Company’s allowance for credit losses and may require it to increase its allowance for credit losses or recognize further loan charge-offs.
A problem with one or more loans could require the Company to significantly increase the level of its allowance for credit losses. In addition, federal and state regulators periodically review the Company’s allowance for credit losses and may require it to increase its allowance for credit losses or recognize further loan charge-offs, based on judgments different than those of management.
The Company identified the accounting policies regarding the allowance for credit losses, 23 Table of Contents security valuations and allowance for credit losses, business combinations, and income taxes to be critical because these policies require management to make difficult, subjective and complex judgments, estimates and assumptions about matters that are inherently uncertain.
The Company identified the accounting policies regarding the allowance for credit losses, security valuations and allowance for credit losses, valuation of goodwill, and income taxes to be critical because these policies require management to make difficult, subjective and complex judgments, estimates and assumptions about matters that are inherently uncertain.
The nature and level of such natural disasters, public health crises, such as the COVID-19 pandemic and any resurgences thereof or other pandemics or epidemics, or man-made events, including political events such as war, civil unrest or terrorist attacks, and other catastrophic events cannot be predicted.
The nature and level of such natural disasters, public health crises, pandemics or epidemics, or man-made events, including political events such as war, civil unrest or terrorist attacks, and other catastrophic events cannot be predicted.
Additionally, as a result of the Coronavirus ("COVID-19") pandemic and the related shift toward remote banking, customers have become more reliant on, and their expectations have increased with respect to, new technology-driven products and services.
Additionally, as a result of the shift toward remote banking, the Company’s customers have become more reliant on, and their expectations have increased with respect to, new technology-driven products and services.
During the ordinary course of business, the Company may foreclose on and take title to properties securing certain loans. In doing so, there is a risk that hazardous or toxic substances could be found on these properties.
A significant portion of the Company’s loan portfolio is secured by real property. During the ordinary course of business, the Company may foreclose on and take title to properties securing certain loans. In doing so, there is a risk that hazardous or toxic substances could be found on these properties.
Risks Related to Recent Events Impacting the Financial Services Industry During 2023, events impacting the financial services industry, including several high profile bank failures, resulted in decreased confidence in banks among depositors, investors and other counterparties, as well as competition for deposits, significant disruption, volatility and depressed valuations of equity and other securities of banks in the capital markets.
Risks Related to Recent Events Impacting the Financial Services Industry Events impacting the financial services industry may result in decreased confidence in banks among depositors, investors and other counterparties, as well as competition for deposits and significant disruption, volatility and depressed valuations of equity and other securities of banks in the capital markets.
Potential sovereign debt defaults, actions that the U.S. government may take to avoid exceeding the debt ceiling, or uncertainties surrounding the debt ceiling and the federal budget may severely impact global and domestic economies and may lead to significantly tighter liquidity and impact the availability of credit.
Additionally, potential sovereign debt defaults or actions taken by U.S. government to avoid exceeding the debt ceiling may severely impact global and domestic economies and may lead to significantly tighter liquidity and impact the availability of credit.
Commercial and industrial loans may expose the Company to additional risks since their underwriting is typically based on the borrower's ability to make repayments from the cash flow of its business and they are secured by non-real estate collateral that may depreciate over time.
Commercial and industrial loans may expose the Company to additional risks since their underwriting is typically based on the borrower’s ability to make repayments from the cash flow of its business and may be secured by non-real estate collateral that may depreciate over time, or by owner-occupied real estate, the value of which is subject to market fluctuations and may deteriorate over the life of the loan.
Accordingly, a change in statutory tax rates may result in a decrease or increase to the Company’s deferred tax assets. A decrease in the Company's deferred tax assets could have a material adverse effect on the Company's results of operations or financial condition.
A decrease in the Company’s deferred tax assets could have a material adverse effect on the Company’s results of operations or financial condition.
Such intensified scrutiny and heightened expectations may lead to increased costs of compliance as well an increased risk of formal or informal regulatory actions.
Any such changes may lead to increased costs of compliance as well an increased risk of formal or informal regulatory actions.
Substantially all of the loans the Company originates are secured by properties located in, or are made to businesses that operate in, Massachusetts and, to a lesser extent, Rhode Island.
Substantially all of the loans the Company originates are secured by properties located in, or are made to businesses that operate in, Massachusetts and the broader New England area.
Any possible acquisition may be subject to regulatory approval, and there can be no assurance that the Company will be able to obtain any such approval in a timely manner or at all.
Any possible acquisition may be subject to regulatory approval, and there can be no assurance that the Company will be able to obtain any such approval in a timely manner or at all. Acquisitions may also result in potential dilution of stockholder value or possible future impairment of goodwill and other intangibles.
Information security risks have increased because of the proliferation of new technologies, including artificial intelligence, and the increased number as well as sophistication and level of activity of perpetrators of cyber-attacks, which include nation-state actors.
Information security risks exist because of the proliferation of modern technologies, including artificial intelligence, as well as sophistication and level of activity of perpetrators of cyber-attacks.
Any failure or circumvention of the Company's controls and procedures or failure to comply with regulations related to controls and procedures could have a material adverse effect on the Company's business, results of operations and financial condition. Certain of the Company’s employees work remotely and/or hybrid, which arrangements may contribute to heightened cybersecurity, information security and operational risks.
Any failure or circumvention of the Company’s controls and procedures or failure to comply with regulations related to controls and procedures could have a material adverse effect on the Company’s business, results of operations and financial condition.
Further, adverse perceptions can result in decreases in the levels of deposits that customers and potential customers choose to maintain with the Company, any of which could have a material adverse effect on the Company’s results of operations or financial condition.
Further, adverse perceptions can result in decreases in the levels of deposits that customers and potential customers choose to maintain with the Company, any of which could have a material adverse effect on the Company’s results of operations or financial condition. 27 If the Company’s risk management framework does not effectively identify or mitigate the Company’s risks, the Company could suffer unexpected losses and its results of operations and financial condition could be materially adversely affected.
The Company has established processes and procedures intended to identify, measure, monitor and report the types of risk to which it is subject, including credit risk, operations risk, compliance risk, reputation risk, strategic risk, market risk and liquidity risk. The Company seeks to monitor and control its risk exposure through a framework of policies, procedures and reporting requirements.
The Company has established processes and procedures intended to identify, measure, monitor and report the types of risk to which it is subject, including strategic and emerging risk, culture risk, credit risk, liquidity risk, market and interest rate risk, operations risk, reputation risk, compliance risk, and technology and cyber risk.
Additionally, the cost of resolving recent bank failures may prompt the FDIC to increase its premiums above the current levels or result in additional special assessments. Any of the above factors could have a material adverse effect on the Company’s financial condition and results of operations.
Additionally, the cost of resolving recent bank failures may prompt the FDIC to increase its premiums above the current levels or result in additional special assessments.
Management of the Company’s risks in some cases depends upon the use of analytical and/or forecasting models, which, in turn, rely on assumptions and estimates. If the models used to mitigate these risks are inadequate, or the assumption or estimates are inaccurate or otherwise flawed, the Company may fail to adequately protect against risks and may incur losses.
If the models used to mitigate these risks are inadequate, or the assumptions or estimates are inaccurate or otherwise flawed, the Company may fail to adequately protect against risks and may incur losses.
These events have, had, and could continue to have, an adverse impact on the market price and volatility of the Company’s common stock.
Certain events impacting the financial services industry, including recent bank failures, have had, and may continue to have, an adverse impact on the market price and volatility of the Company’s common stock.
Changes in economic conditions that are out of the control of the borrower and lender could impact the value of the future cash flow and value of the underlying loan collateral.
Changes in economic conditions that are outside of the control of the borrower and lender could impact the value of the future cash flow and value of the underlying loan collateral. The Company may experience losses and expenses if security interests granted for loans are not enforceable.
The Company’s ability to borrow could also be impaired by factors that are not specific to the Company, such as a disruption in the financial markets or negative views and expectations about the prospects for the financial services industry generally.
The Company’s ability to borrow could also be impaired by factors that are not specific to the Company, such as a disruption in the financial markets or negative views and expectations about prospects for the financial services industry generally. 26 Risks Related to Environmental and Social Matters The Company is subject to environmental liability risk associated with lending activities which could have a material adverse effect on its financial condition and results of operations.
Companies are facing increasing scrutiny from investors, customers, regulators and other stakeholders related to their ESG practices and disclosure. Investors, investor advocacy groups and investment funds are also increasingly focused on these practices, especially as they relate to the environment, climate change, diversity and inclusion, workplace conduct and human capital management.
Some investors, investor advocacy groups and investment funds are focused on ESG practices, especially as they relate to the environment, climate change, diversity and inclusion, workplace conduct and human capital management. These stakeholders often have differing priorities and expectations regarding ESG issues, and in some cases conflicting priorities.
Risks Related to the Company's Lending Activities If the Company experiences credit losses at a level higher than anticipated in the Company's models, its earnings could materially decrease. The Company’s loan customers may not repay loans according to their terms, and the collateral securing the payment of loans may be insufficient to assure repayment or cover losses.
The Company’s loan customers may not repay loans according to their terms, and the collateral securing the payment of loans may be insufficient to assure repayment or cover losses.
The Company could also face negative publicity or reputational harm based on the identity of those with whom we choose to do business. Increased ESG-related compliance costs could result in increases to our overall operational costs, which could impact our profitability.
The Company could also face negative publicity or reputational harm based on the identity of those with whom we choose to do business. Any of the foregoing could have an adverse impact on our business, financial condition or results of operations.
As competition for skilled professionals remains intense, the Company may have to devote significant resources to attract and retain qualified personnel, which could negatively impact earnings. Natural disasters, severe weather, public health crises or other catastrophic or man-made events could have an adverse effect on the Company's business or results of operations.
Natural disasters, severe weather, public health crises or other catastrophic or man-made events could have an adverse effect on the Company’s business or results of operations.
Recording such a valuation allowance could have a material adverse effect on the Company's results of operations or financial condition. Additionally, the deferred tax assets are determined using effective tax rates expected to apply to the Company's taxable income in the years in which the temporary differences are expected to be recovered or settled.
Additionally, the deferred tax assets are determined using effective tax rates expected to apply to the Company’s taxable income in the years in which the temporary differences are expected to be recovered or settled. 23 Accordingly, a change in statutory tax rates may result in a decrease or increase to the Company’s deferred tax assets.
Competition for acquisitions can be highly competitive, and the Company may not be able to acquire other institutions on acceptable terms. The ability to grow may be limited if the Company is unable to successfully make acquisitions in the future. The Company's ability to make opportunistic acquisitions is contingent on regulators granting any requisite approvals.
The Company may not be able to identify suitable acquisition candidates or complete such acquisitions in the future. Competition for acquisitions can be highly competitive, and the Company may not be able to acquire other institutions on acceptable terms.
Financial services industries continually experience rapid technological change with frequent introductions of new technology-driven products and services, such as artificial intelligence. An effective use of technology can increase efficiency, enable financial institutions to better serve customers, and reduce costs.
These new technologies may be superior to, or render obsolete, the technologies currently used in the Company’s products and services. An effective use of technology can increase efficiency, enable financial institutions to better serve customers, and reduce costs.
In determining the amount of the 19 Table of Contents allowance for credit losses, the Company, in addition to assessing the collectability of its loan portfolio, relies on experience and evaluation of economic conditions.
In determining the amount of the allowance for credit losses, the Company, in addition to assessing the collectability of its loan portfolio, relies on an evaluation of economic conditions, which involves a high level of subjectivity, as well as significant estimates of current credit risks and trends using existing qualitative and quantitative information and reasonable supportable forecasts of future economic conditions, all of which may undergo frequent and material changes.
Part of the Company's business strategy includes seeking to make opportunistic whole or partial acquisitions of other banks, branches, financial institutions, or related businesses from time to time.
Acquisitions, including the Merger, may be more difficult, costly or time consuming than expected, and the expected benefits of such acquisitions may not be realized. While focusing on organic growth, the Company’s strategy also includes, in part, growth through opportunistic whole or partial acquisitions of other banks, branches, financial institutions, or related businesses.
Risks Related to Environmental and Social Matters The Company is subject to environmental liability risk associated with lending activities which could have a material adverse effect on its financial condition and results of operations. A significant portion of the Company’s loan portfolio is secured by real property.
Any of the above factors could have a material adverse effect on the Company’s financial condition and results of operations. 18 Risks Related to the Company’s Lending Activities If the Company experiences credit losses at a level higher than anticipated in the Company’s models, its earnings could materially decrease.
Economic growth may slow down and the national or global economy may experience downturns, including recessionary periods.
If inflationary pressures do not significantly subside, sustained higher interest rates by the Federal Reserve may be needed to tame persistent inflationary price pressures, which could push down asset prices and weaken economic activity. Economic growth may slow down and the national or global economy may experience downturns, including recessionary periods.
Congress, or the Massachusetts legislature could have a material adverse effect on the Company’s business, financial condition, results of operations, and cash flows. In the wake of several bank failures in 2023, the Massachusetts Commissioner of Banks, FDIC, Federal Reserve and certain other regulators have intensified regulatory scrutiny and heightened expectations with respect to banking institutions.
Congress, or the Massachusetts legislature could have a material adverse effect on the Company’s business, financial condition, results of operations, and cash flows. In addition, personnel changes at such regulatory agencies may result in differing interpretations of existing rules and guidelines, including more stringent enforcement and more severe penalties.
See also “Natural disasters, severe weather, public health crises, or other catastrophic or man-made events could have an adverse effect on the Company's business or results of operations” below. Environmental, social and governance (“ESG”) risks could adversely affect the Company's reputation, business and performance and the trading price of its common stock.
Environmental, social and governance (“ESG”) risks could adversely affect the Company’s reputation, business and performance and the trading price of its common stock. The Company may face scrutiny from some investors, customers, regulators and other stakeholders related to its ESG practices.
If the Company’s risk management framework does not effectively identify or mitigate the Company’s risks, the Company could suffer unexpected losses and the results of operations and financial condition could be materially adversely affected. The Company’s risk management framework seeks to mitigate risk and appropriately balance risk and return.
The Company’s risk management framework seeks to mitigate risk and appropriately balance risk and return.
Removed
These events occurred during a period of rapidly rising interest rates which, among other things, has resulted in increased unrealized losses on certain investment securities and increased competition for bank deposits and may increase the risk of a potential recession.

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Item 1C. Cybersecurity

Cybersecurity — threats and controls disclosure

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Biggest changeThe Company’s Director of Enterprise Information Security is responsible for cybersecurity initiatives at the Company, including identifying and managing security risks, and escalating elevated risks to the Information Security Officer, who works in tandem with the Chief Risk Officer and collectively report on emerging and existing threats and mitigation strategies to the Board, which has oversight of cybersecurity risk, on a semi-annual basis, or more frequently, if needed.
Biggest changeTogether, the CISO and the CRO report on emerging and existing threats and mitigation strategies to the Board, which has oversight of cybersecurity risk, on a semi-annual basis, or more frequently, if needed.
ITEM 1C. CYBERSECURITY Cybersecurity threats pose a risk to the Company, as crimes committed through or involving the internet, such as phishing, hacking, denial of service attacks, stealing information, unauthorized intrusions into internal systems or the systems of third-party vendors could adversely impact the Company’s operations or damage its reputation.
ITEM 1C. CYBERSECURITY Cybersecurity threats pose a risk to the Company, as crimes committed through or involving the internet, such as phishing, hacking, denial of service attacks, stealing information, unauthorized intrusions into the Company’s internal systems or the systems of the Company’s third-party vendors could adversely impact the Company’s operations or damage its reputation.
As of the date of this Report, no risks from cybersecurity threats, including as a result of any previous cybersecurity incidents, have materially affected or are reasonably likely to materially affect the Company, including its business strategy, results of operations, or financial condition.
As of the date of this Report, no risks from cybersecurity 29 threats, including as a result of any previous cybersecurity incidents, have materially affected or are reasonably likely to materially affect the Company, including its business strategy, results of operations, or financial condition.
The Company has several processes in place to oversee and identify these risks, such as the Information Technology Risk Governance Committee (“ITRGC”), which is responsible for oversight of information technology ("IT") and information security ("IS") risk. This committee oversees the establishment and revision of IT and IS key risk and key performance indicators and ongoing monitoring of these metrics.
The Company has several processes in place to oversee and identify these risks, such as the Information Technology Risk Governance Committee (“ITRGC”), which is responsible for oversight of information technology (“IT”) and information security (“IS”) risk. This committee oversees the establishment and revision of IT and IS key risk and key performance indicators and ongoing monitoring of these metrics.
While the Company has seen attempts to gain access against its systems, and expects such attacks to continue, or possibly intensify in the future, the Company has not experienced any material losses relating to cyber-attacks or other information security breaches as of December 31, 2023.
While the Company has seen attempts to gain access to its systems, and expects such attacks to continue, or possibly intensify in the future, the Company has not experienced any material losses relating to cyber-attacks or other information security breaches as of December 31, 2024.
Additionally, the Company carries out regular phishing simulation tests throughout the year to keep employees alert, spread awareness and ensure that employees have the knowledge and resources necessary to report suspicious activity.
Additionally, the Company conducts regular phishing simulation tests throughout the year to keep employees alert, spread awareness and ensure that employees have the knowledge and resources necessary to report suspicious activity.
For further 29 Table of Contents discussion surrounding risks from cybersecurity threats, refer to the section captioned “Risks Related to Information Security and Technology” within Item 1A this Report.
For further discussion surrounding risks from cybersecurity threats, refer to the section captioned “Risks Related to Information Security and Technology” within Part I. Item 1A of this Report.
These documents addresses the prevention, detection, mitigation, and remediation of cybersecurity incidents, and include appropriate timely incident escalations to be followed during an incident, up to and including executive leadership, management committees, such as of the ITRGC, and depending on incident severity, the Board or Board committee.
These documents address the detection, mitigation, and remediation of cybersecurity incidents, and include appropriate timely incident escalations to be followed during an incident, up to and including executive leadership, management committees and depending on incident severity, the Board, or a Board committee. The volume, severity, and root case of security incidents are reported on at monthly management committees.
Additionally, the team of employees supporting them maintain education and certification requirements necessary to carry out their responsibilities. The Company has deployed a layered security approach to identify, measure, monitor and control information technology risks. The Company also maintains a documented Incident Management Standard and Technology and Cyber Incident Response Plan.
The Company has deployed a layered security approach to identify, measure, monitor and control information technology risks. The Company also maintains a documented Incident Management Standard and Technology and Cyber Incident Response Plan.
The Company’s Information Security Program follows ISO 27002, an international standard for information security controls, as well as references to the National Institute of Standards and Technology (“NIST”) Cybersecurity Framework, the Federal Financial Institutions Examination Council Information Examination Handbook, and other regulatory guidance and industry standards.
The Company’s process for monitoring and mitigating cybersecurity risk is designed in conjunction with its overall Enterprise Risk Management Policy. The Company’s Information Security Program follows ISO 27002, an international standard for information security controls, as well as references to the Federal Financial Institutions Examination Council Information Examination Handbook, and other regulatory guidance and industry standards.
TPRM documents the Company’s view of applicable third party vendors assessing the vendor’s technological capability to provide products and/or services in a viable and risk adverse manner.
Additionally, for third party related technologies, the Company’s Third-Party Risk Management Program (“TPRM”) is involved with onboarding all vendors, including ongoing monitoring of higher risk vendor relationships. TPRM documents the Company’s view of applicable third-party vendors assessing the vendor’s technological capability to provide products and/or services in a viable and risk adverse manner.
The volume, severity, and root case of security incidents are reported on at monthly management committees. The Company will regularly engage independent third parties to assist in its cybersecurity preparedness, including but not limited to vulnerability scan assessments, secure code scan reviews, and cybersecurity incident response simulations.
The Company will regularly engage independent third parties to assist in its cybersecurity preparedness, including but not limited to vulnerability scan assessments, secure code scan reviews, and cybersecurity incident response simulations. The Company’s internal audit department also performs annual cybersecurity penetration testing over the Company’s internal and external networks.
The Director of Enterprise Information Security and the Information Security Officer have 30 and 22 years, respectively, of information security experience across a wide range of industries and both possess substantial knowledge and expertise in how to manage information security and cybersecurity risks.
The CISO has over 30 years of information security experience, with experienced team members that come from a wide range of industries and possess substantial knowledge and expertise in how to manage information security and cybersecurity risks. Additionally, the team of employees supporting the CISO maintain education and certification requirements necessary to fulfill their responsibilities.
Removed
The Company’s process for monitoring and mitigating cybersecurity risk is designed in conjunction with its overall Enterprise Risk Management Policy.
Added
The Company’s Chief Information Security Officer (“CISO”) is responsible for cybersecurity initiatives at the Company, including identifying and managing security risks, and escalating elevated risks with the Chief Risk Officer (“CRO”) where applicable.
Removed
The Company’s internal audit department also performs annual cybersecurity penetration testing over the Company’s internal and external networks. Additionally, for third party related technologies, the Company’s Third Party Risk Management Program (“TPRM”) is involved with onboarding and ongoing monitoring of these vendor relationships.

Item 2. Properties

Properties — owned and leased real estate

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Biggest changeFor additional information regarding the Bank’s premises and equipment and lease obligations, see Notes 4, "Bank Premises and Equipment" and 16 "Leases ," respectively, within the Notes to Consolidated Financial Statements included in Item 8 of this Report.
Biggest changeFor additional information regarding the Bank’s premises and equipment and lease obligations, see Notes 4, “Bank Premises and Equipment” and 16 “ Leases ,” respectively, within the Notes to Consolidated Financial Statements included in Item 8 of this Report.
ITEM 2. PROPERTIES At December 31, 2023, the Bank conducted its business from its main retail branch located at 288 Union Street, Rockland, Massachusetts, 121 retail branches and one mobile branch located within Eastern Massachusetts as well as in Worcester County. In addition to its main office, the Bank leased 73 of its branches and owned the remaining 49 branches.
ITEM 2. PROPERTIES At December 31, 2024, the Bank conducted its business from its main retail branch located at 288 Union Street, Rockland, Massachusetts, 121 retail branches and one mobile branch located within Eastern Massachusetts as well as in Worcester County. In addition to its main office, the Bank leased 73 of its branches and owned the remaining 49 branches.
In addition to these branch locations, the Bank had 28 remote ATM locations, all of which are leased. The Bank’s executive administration offices are located in Hanover, Massachusetts while the remaining administrative and operations locations are housed in several different campuses.
In addition to these branch locations, the Bank had 55 remote ATM locations, all of which are leased. The Bank’s executive administration offices are located in Hanover, Massachusetts while the remaining administrative and operations locations are housed in several different campuses.

Item 3. Legal Proceedings

Legal Proceedings — active lawsuits and investigations

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Biggest changeITEM 3. LEGAL PROCEEDINGS At December 31, 2023, Rockland Trust was involved in pending lawsuits that arose in the ordinary course of business. Management has reviewed these pending lawsuits with legal counsel and has taken into consideration the view of counsel as to their outcome.
Biggest changeITEM 3. LEGAL PROCEEDINGS At December 31, 2024, Rockland Trust was involved in pending lawsuits that arose in the ordinary course of business. Management has reviewed these pending lawsuits with legal counsel and has taken into consideration the view of counsel as to their outcome.

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

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Biggest changeThe following chart depicts the total return performance of the Company: (b.) Not applicable 31 Table of Contents (c.) The following table sets forth information regarding the Company’s repurchases of its common stock during the three months ended December 31, 2023: Issuer Purchases of Equity Securities Period Total Number of Shares Purchased Average Price Paid Per Share Total Number of Shares Purchased as Part of Publicly Announced Plan or Program Maximum Number (or Approximate Dollar Value) of Shares That May Yet Be Purchased Under the Plan or Program (1) October 1 to October 31, 2023 257,500 $ 47.37 257,500 $ 87,802,432 November 1 to November 30, 2023 874,900 54.61 874,900 $ 40,020,259 December 1 to December 31, 2023 151,000 59.47 151,000 $ 31,041,000 Total 1,283,400 $ 53.73 1,283,400 (1) The remaining shares available for repurchase at December 31, 2023 were repurchased during the first quarter of 2024.
Biggest changeThe following chart depicts the total return performance of the Company: 31 (b.) Not applicable (c.) The following table sets forth information regarding the Company’s repurchases of its common stock during the three months ended December 31, 2024: Issuer Purchases of Equity Securities Period Total Number of Shares Purchased (1) Average Price Paid Per Share Total Number of Shares Purchased as Part of Publicly Announced Plan or Program Maximum Number (or Approximate Dollar Value) of Shares That May Yet Be Purchased Under the Plan or Program October 1 to October 31, 2024 — $ — — $ — November 1 to November 30, 2024 — — — $ — December 1 to December 31, 2024 20 70.89 — $ — Total 20 $ 70.89 — (1) These shares were surrendered in connection with the vesting of equity compensation grants to satisfy related tax withholding obligations.
The lines in the graph and the numbers in the table below represent yearly index levels derived from compounded daily returns that include reinvestment or retention of all dividends. If the yearly interval, based on the last day of a fiscal year, was not a trading 30 Table of Contents day, the preceding trading day was used.
The lines in the graph and the numbers in the table below represent yearly index levels derived from compounded daily returns that 30 include reinvestment or retention of all dividends. If the yearly interval, based on the last day of a fiscal year, was not a trading day, the preceding trading day was used.
The index value for all of the series was set to 100.00 on December 31, 2018 (which assumes that $100.00 was invested in each of the series on December 31, 2018).
The index value for all of the series was set to 100.00 on December 31, 2019 (which assumes that $100.00 was invested in each of the series on December 31, 2019).
ITEM 5. MARKET FOR INDEPENDENT BANK CORP.'S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES (a.) Independent Bank Corp.’s common stock trades on the NASDAQ Global Select Market under the symbol INDB. The Company declared aggregate cash dividends of $2.20 and $2.08 per share in 2023 and in 2022, respectively.
ITEM 5. MARKET FOR INDEPENDENT BANK CORP.’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES (a.) Independent Bank Corp.’s common stock trades on the NASDAQ Global Select Market under the symbol INDB. The Company declared aggregate cash dividends of $2.28 and $2.20 per share in 2024 and in 2023, respectively.
The following information in this Item 5 of this Report is not deemed to be "soliciting material" or to be "filed" with the SEC or subject to Regulation 14A or 14C under the Exchange Act or to the liabilities of Section 18 of the Exchange Act and will not be deemed incorporated by reference into any filing under the Securities Act of 1933, as amended, or the Exchange Act, except to the extent the Company specifically incorporates it by reference into such a filing.
The following information in this Item 5 of this Report is not deemed to be “soliciting material” or to be “filed” with the SEC or subject to Regulation 14A or 14C under the Exchange Act or to the liabilities of Section 18 of the Exchange Act and will not be deemed incorporated by reference into any filing under the Securities Act of 1933, as amended, or the Exchange Act, except to the extent the Company specifically incorporates it by reference into such a filing.
Comparative Stock Performance Graph The stock performance graph below and associated table compare the cumulative total shareholder return of the Company’s common stock from December 31, 2018 to December 31, 2023 to the cumulative total return of the NASDAQ Composite Index (U.S. Companies), the KBW NASDAQ Bank Index, and the KBW NASDAQ Regional Banking Index.
Comparative Stock Performance Graph The stock performance graph below and associated table compare the cumulative total shareholder return of the Company’s common stock from December 31, 2019 to December 31, 2024 to the cumulative total return of the NASDAQ Composite Index (U.S. Companies), the KBW NASDAQ Bank Index, and the KBW NASDAQ Regional Banking Index.
The ratio of dividends paid to earnings in 2023 and 2022 was 40.92% and 35.53%, respectively. Payment of dividends by the Company on its common stock is subject to various regulatory restrictions and guidelines.
The ratio of dividends paid to earnings in 2024 and 2023 was 50.08% and 40.92%, respectively. Payment of dividends by the Company on its common stock is subject to various regulatory restrictions and guidelines.
Management believes that the Bank will continue to generate adequate earnings to continue to pay comparable common dividends on a quarterly basis. As of February 26, 2024, there were 42,445,920 shares of common stock outstanding which were held by approximately 4,013 holders of record.
Management believes that the Bank will continue to generate adequate earnings to continue to pay comparable common dividends on a quarterly basis. As of February 24, 2025, there were 42,605,296 shares of common stock outstanding which were held by approximately 3,846 holders of record.
The number of record-holders may not reflect the number of persons or entities holding stock in nominee name through banks, brokerage firms, and other nominees. The closing price of the Company’s common stock on December 29, 2023, the last trading day of the year, wa s $65.81.
The number of record-holders may not reflect the number of persons or entities holding stock in nominee name through banks, brokerage firms, and other nominees. The closing price of the Company’s common stock on December 31, 2024, the last trading day of the year, w as $64.19.
During the fourth quarter of 2023, the Company repurchased 1.3 million shares of common stock for $69 million under this plan and the remaining repurchases under this plan were completed during the first quarter of 2024. There are no other active repurchase plans at this time. ITEM 6. [RESERVED]
The Company completed its previously announced stock buyback plan during the first quarter of 2024, and there were no active repurchase plans as of December 31, 2024. ITEM 6. [RESERVED]
Removed
Accordingly, the share repurchase plan was terminated. On October 19, 2023, the Company announced a stock buyback plan which authorizes repurchases by the Company of up to $100 million in common stock.
Removed
Repurchases under the plan were made from time to time on the open market and in privately negotiated transactions, including through the use of trading plans intended to quality under Rule 10b5-1 under the Exchange Act.
Removed
The extent to which the Company repurchases shares and the size and timing of these repurchases will depend on a variety of factors, including price, market and economic conditions, the Company's capital position and amount of retained earnings and legal and contractual requirements.

Item 6. [Reserved]

Selected Financial Data — reserved (removed by SEC in 2021)

3 edited+0 added−0 removed0 unchanged
Biggest changeConsolidated Balance Sheets 71 Consolidated Statements of Income 72 Consolidated Statements of Comprehensive Income 73 Consolidated Statements of Stockholders' Equity 74 Consolidated Statements of Cash Flows 75 Note 1 - Summary of Significant Accounting Policies 77 Note 2 - Securities 87 Note 3 - Loans, Allowance for Credit Losses and Credit Quality 92 Note 4 - Bank Premises and Equipment 102 Note 5 - Goodwill and Other Intangible Assets 102 Note 6 - Deposits 104 Note 7 - Borrowings 104 Note 8 - Stock Based Compensation 106 Note 9 - Derivatives and Hedging Activities 109 Note 10 - Income Taxes 116 Note 11 - Low Income Housing Project Investments 119 Note 12 - Employee Benefit Plans 119 Note 13 - Fair Value Measurements 124 Note 14 - Revenue Recognition 131 Note 15 - Other Comprehensive Income (Loss) 134 Note 1 6 - Leases 136 Note 1 7 - Commitments and Contingencies 137 Note 1 8 - Regulatory Matters 137 Note 19 - Parent Company Financial Statements 139 Note 20 - Transactions with Related Parties 142
Biggest changeConsolidated Balance Sheets 70 Consolidated Statements of Income 71 Consolidated Statements of Comprehensive Income 72 Consolidated Statements of Stockholders ’ Equity 73 Consolidated Statements of Cash Flows 74 Note 1 - Summary of Significant Accounting Policies 76 Note 2 - Securities 86 Note 3 - Loans, Allowance for Credit Losses and Credit Quality 91 Note 4 - Bank Premises and Equipment 102 Note 5 - Goodwill and Other Intangible Assets 102 Note 6 - Deposits 104 Note 7 - Borrowings 104 Note 8 - Stock Based Compensation 106 Note 9 - Derivatives and Hedging Activities 109 Note 10 - Income Taxes 116 Note 11 - Low Income Housing Project Investments 119 Note 12 - Employee Benefit Plans 119 Note 13 - Fair Value Measurements 124 Note 14 - Revenue Recognition 131 Note 15 - Other Comprehensive Income (Loss) 134 Note 16 - Leases 136 Note 17 - Commitments and Contingencies 137 Note 18 - Regulatory Matters 137 Note 19 - Parent Company Financial Statements 139 Note 20 - Transactions with Related Parties 142 Note 21 - Segment Information 142
Management’s Discussion and Analysis of Financial Condition and Results of Operations 31 Table 1 - Selected Financial Data 41 Table 2 - Securities Portfolio Composition 42 Table 3 - Securities Portfolio, Weighted Average Yields 43 Table 4 - Aggregate Book Value and Market Value of Select Securities 43 Table 5 - Closed Residential Real Estate Loans 44 Table 6 - Residential Mortgage Loan Sales 44 Table 7 - Mortgage Servicing Asset 45 Table 8 - Loan Portfolio Composition 45 Table 9 - Scheduled Contractual Loan Amortization 46 Table 10 - Nonperforming Assets 48 Table 11 - Activity in Nonperforming Assets 48 Table 12 - Summary Net Charge-Offs to Average Loans Outstanding 50 Table 13 - Summary of Allocation of Allowance for Credit Losses 51 Table 14 - Maturities of Uninsured Time Deposits 53 Table 15 - Assets Under Administration 53 Table 16 - Summary of Results of Operation 54 Table 17 - Average Balance, Interest Earned/Paid & Average Yields 55 Table 18 - Volume Rate Analysis 57 Table 19 - Noninterest Income 58 Table 2 0 - Noninterest Expense 59 Table 2 1 - Tax Provision and Applicable Tax Rates 60 Table 22 - Sources of Liquidity 62 Table 23 - Interest Rate Sensitivity 63 Item 7A.
Management’s Discussion and Analysis of Financial Condition and Results of Operations 31 Table 1 - Selected Financial Data 41 Table 2 - Securities Portfolio Composition 42 Table 3 - Securities Portfolio, Weighted Average Yields 43 Table 4 - Aggregate Book Value and Market Value of Select Securities 43 Table 5 - Closed Residential Real Estate Loans 44 Table 6 - Residential Mortgage Loan Sales 44 Table 7 - Mortgage Servicing Asset 45 Table 8 - Loan Portfolio Composition 45 Table 9 - Scheduled Contractual Loan Amortization 46 Table 10 - Nonperforming Assets 48 Table 11 - Activity in Nonperforming Assets 48 Table 12 - Summary Net Charge-Offs to Average Loans Outstanding 50 Table 13 - Summary of Allocation of Allowance for Credit Losses 51 Table 14 - Maturities of Uninsured Time Deposits 53 Table 15 - Assets Under Administration 53 Table 16 - Summary of Results of Operation s 54 Table 17 - Average Balance, Interest Earned/Paid & Average Yields 55 Table 18 - Volume Rate Analysis 57 Table 19 - Noninterest Income 58 Table 20 - Noninterest Expense 59 Table 21 - Tax Provision and Applicable Tax Rates 60 Table 22 - Sources of Liquidity 62 Table 23 - Interest Rate Sensitivity 63 Item 7A.
Quantitative and Qualitative Disclosures About Market Risk 67 Item 8. Financial Statements and Supplementary Data 68 Report of Independent Registered Public Accounting Firm 68 1 Table of Contents INDEPENDENT BANK CORP.
Quantitative and Qualitative Disclosures About Market Risk 67 Item 8. Financial Statements and Supplementary Data 68 Report of Independent Registered Public Accounting Firm 68 1 INDEPENDENT BANK CORP.

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

128 edited+23 added−24 removed122 unchanged
Biggest changeTable 17 - Average Balance, Interest Earned/Paid & Average Yields Years Ended December 31 2023 2022 2021 Average Balance Interest Earned/ Paid Average Yield Average Balance Interest Earned/ Paid Average Yield Average Balance Interest Earned/ Paid Average Yield (Dollars in thousands) Interest-earning assets Interest-earning deposits with banks, federal funds sold, and short term investments $ 118,806 $ 5,186 4.37 % $ 1,222,434 $ 14,385 1.18 % $ 1,864,346 $ 2,494 0.13 % Securities Securities - trading 4,411 — — % 3,764 — — % 3,344 — — % Securities - taxable investments 3,027,769 60,336 1.99 % 2,948,358 50,354 1.71 % 1,795,199 30,477 1.70 % Securities - nontaxable investments (1) 190 7 3.68 % 196 7 3.57 % 469 20 4.26 % Total securities 3,032,370 60,343 1.99 % 2,952,318 50,361 1.71 % 1,799,012 30,497 1.70 % Loans held for sale 3,289 190 5.78 % 4,774 172 3.60 % 34,056 856 2.51 % Loans (2) Commercial and industrial 1,646,939 115,752 7.03 % 1,538,848 77,074 5.01 % 1,823,914 79,752 4.37 % Commercial real estate (1) 7,839,476 376,586 4.80 % 7,807,427 326,593 4.18 % 4,702,346 185,908 3.95 % Commercial construction 1,019,871 66,440 6.51 % 1,191,394 57,804 4.85 % 616,037 24,696 4.01 % Small business 235,108 14,428 6.14 % 204,982 10,886 5.31 % 180,473 9,276 5.14 % Total commercial 10,741,394 573,206 5.34 % 10,742,651 472,357 4.40 % 7,322,770 299,632 4.09 % Residential real estate 2,217,971 88,210 3.98 % 1,831,493 63,443 3.46 % 1,286,470 46,279 3.60 % Home equity 1,093,546 70,698 6.47 % 1,061,228 44,048 4.15 % 1,025,809 35,160 3.43 % Total consumer real estate 3,311,517 158,908 4.80 % 2,892,721 107,491 3.72 % 2,312,279 81,439 3.52 % Other consumer 31,202 2,418 7.75 % 31,986 2,114 6.61 % 23,885 1,668 6.98 % Total loans 14,084,113 734,532 5.22 % 13,667,358 581,962 4.26 % 9,658,934 382,739 3.96 % Total Interest-Earning Assets 17,238,578 800,251 4.64 % 17,846,884 646,880 3.62 % 13,356,348 416,586 3.12 % Cash and Due from Banks 180,553 184,812 152,723 Federal Home Loan Bank Stock 33,734 7,134 10,283 Other Assets 1,853,585 1,858,210 1,335,193 Total Assets $ 19,306,450 $ 19,897,040 $ 14,854,547 Interest-bearing liabilities Deposits Savings and interest checking accounts $ 5,489,923 $ 43,073 0.78 % $ 6,159,289 $ 8,339 0.14 % $ 4,590,055 $ 1,610 0.04 % Money market 3,022,322 51,630 1.71 % 3,489,981 11,683 0.33 % 2,516,871 1,930 0.08 % Time certificates of deposits 1,724,625 50,050 2.90 % 1,310,442 4,630 0.35 % 936,046 4,787 0.51 % Total interest bearing deposits 10,236,870 144,753 1.41 % 10,959,712 24,652 0.22 % 8,042,972 8,327 0.10 % Borrowings Federal Home Loan Bank borrowings 782,121 37,624 4.81 % 16,138 313 1.94 % 41,556 897 2.16 % Long-term borrowings — — — % 2,235 31 1.39 % 21,072 331 1.57 % 56 Table of Contents Junior subordinated debentures 62,857 4,359 6.93 % 62,854 2,125 3.38 % 62,852 1,692 2.69 % Subordinated debt 49,933 2,470 4.95 % 49,837 2,470 4.96 % 49,741 2,470 4.97 % Total borrowings 894,911 44,453 4.97 % 131,064 4,939 3.77 % 175,221 5,390 3.08 % Total interest-bearing liabilities 11,131,781 189,206 1.70 % 11,090,776 29,591 0.27 % 8,218,193 13,717 0.17 % Noninterest-bearing demand deposits 4,918,787 5,559,997 4,443,410 Other liabilities 374,585 330,371 284,679 Total liabilities 16,425,153 16,981,144 12,946,282 Stockholders’ equity 2,881,297 2,915,896 1,908,265 Total liabilities and stockholders’ equity $ 19,306,450 $ 19,897,040 $ 14,854,547 Net interest income (1) $ 611,045 $ 617,289 $ 402,869 Interest rate spread (3) 2.94 % 3.35 % 2.95 % Net interest margin (4) 3.54 % 3.46 % 3.02 % Supplemental Information Total deposits, including demand deposits $ 15,155,657 $ 144,753 $ 16,519,709 $ 24,652 $ 12,486,382 $ 8,327 Cost of total deposits 0.96 % 0.15 % 0.07 % Total funding liabilities, including demand deposits $ 16,050,568 $ 189,206 $ 16,650,773 $ 29,591 $ 12,661,603 $ 13,717 Cost of total funding liabilities 1.18 % 0.18 % 0.11 % (1) The total amount of adjustment to present interest income and yield on a fully tax-equivalent basis is $4.5 million, $4.0 million, and $1.3 million for 2023, 2022 and 2021, respectively.
Biggest changeTable 17 - Average Balance, Interest Earned/Paid & Average Yields Years Ended December 31 2024 2023 2022 Average Balance Interest Earned/ Paid Average Yield Average Balance Interest Earned/ Paid Average Yield Average Balance Interest Earned/ Paid Average Yield (Dollars in thousands) Interest-earning assets Interest-earning deposits with banks, federal funds sold, and short term investments $ 125,066 $ 5,669 4.53 % $ 118,806 $ 5,186 4.37 % $ 1,222,434 $ 14,385 1.18 % Securities Securities - trading 4,562 — — % 4,411 — — % 3,764 — — % Securities - taxable investments 2,791,246 57,092 2.05 % 3,027,769 60,336 1.99 % 2,948,358 50,354 1.71 % Securities - nontaxable investments (1) 192 7 3.65 % 190 7 3.68 % 196 7 3.57 % Total securities 2,796,000 57,099 2.04 % 3,032,370 60,343 1.99 % 2,952,318 50,361 1.71 % Loans held for sale 11,960 712 5.95 % 3,289 190 5.78 % 4,774 172 3.60 % Loans (2) Commercial and industrial 2,980,286 182,548 6.13 % 3,026,327 180,551 5.97 % 2,886,383 131,497 4.56 % Commercial real estate (1) 6,731,055 350,539 5.21 % 6,460,088 311,787 4.83 % 6,459,892 272,170 4.21 % Commercial construction 800,254 58,455 7.30 % 1,019,871 66,440 6.51 % 1,191,394 57,804 4.85 % Small business 267,212 17,605 6.59 % 235,108 14,428 6.14 % 204,982 10,886 5.31 % Total commercial 10,778,807 609,147 5.65 % 10,741,394 573,206 5.34 % 10,742,651 472,357 4.40 % Residential real estate 2,434,114 106,797 4.39 % 2,217,971 88,210 3.98 % 1,831,493 63,443 3.46 % Home equity 1,115,598 75,543 6.77 % 1,093,546 70,698 6.47 % 1,061,228 44,048 4.15 % Total consumer real estate 3,549,712 182,340 5.14 % 3,311,517 158,908 4.80 % 2,892,721 107,491 3.72 % Other consumer 33,761 2,530 7.49 % 31,202 2,418 7.75 % 31,986 2,114 6.61 % Total loans 14,362,280 794,017 5.53 % 14,084,113 734,532 5.22 % 13,667,358 581,962 4.26 % Total Interest-Earning Assets 17,295,306 857,497 4.96 % 17,238,578 800,251 4.64 % 17,846,884 646,880 3.62 % Cash and Due from Banks 179,955 180,553 184,812 Federal Home Loan Bank Stock 37,155 33,734 7,134 Other Assets 1,831,516 1,853,585 1,858,210 Total Assets $ 19,343,932 $ 19,306,450 $ 19,897,040 Interest-bearing liabilities Deposits Savings and interest checking accounts $ 5,169,237 $ 66,334 1.28 % $ 5,489,923 $ 43,073 0.78 % $ 6,159,289 $ 8,339 0.14 % Money market 2,941,539 69,998 2.38 % 3,022,322 51,630 1.71 % 3,489,981 11,683 0.33 % Time certificates of deposits 2,600,190 110,630 4.25 % 1,724,625 50,050 2.90 % 1,310,442 4,630 0.35 % Total interest-bearing deposits 10,710,966 246,962 2.31 % 10,236,870 144,753 1.41 % 10,959,712 24,652 0.22 % Borrowings Federal Home Loan Bank borrowings 840,611 39,048 4.65 % 782,121 37,624 4.81 % 16,138 313 1.94 % Long-term borrowings — — — % — — — % 2,235 31 1.39 % 56 Junior subordinated debentures 62,859 4,506 7.17 % 62,857 4,359 6.93 % 62,854 2,125 3.38 % Subordinated debt 10,107 508 5.03 % 49,933 2,470 4.95 % 49,837 2,470 4.96 % Total borrowings 913,577 44,062 4.82 % 894,911 44,453 4.97 % 131,064 4,939 3.77 % Total interest-bearing liabilities 11,624,543 291,024 2.50 % 11,131,781 189,206 1.70 % 11,090,776 29,591 0.27 % Noninterest-bearing demand deposits 4,431,303 4,918,787 5,559,997 Other liabilities 345,286 374,585 330,371 Total liabilities 16,401,132 16,425,153 16,981,144 Stockholders’ equity 2,942,800 2,881,297 2,915,896 Total liabilities and stockholders’ equity $ 19,343,932 $ 19,306,450 $ 19,897,040 Net interest income (1) $ 566,473 $ 611,045 $ 617,289 Interest rate spread (3) 2.46 % 2.94 % 3.35 % Net interest margin (4) 3.28 % 3.54 % 3.46 % Supplemental Information Total deposits, including demand deposits $ 15,142,269 $ 246,962 $ 15,155,657 $ 144,753 $ 16,519,709 $ 24,652 Cost of total deposits 1.63 % 0.96 % 0.15 % Total funding liabilities, including demand deposits $ 16,055,846 $ 291,024 $ 16,050,568 $ 189,206 $ 16,650,773 $ 29,591 Cost of total funding liabilities 1.81 % 1.18 % 0.18 % (1) The total amount of adjustment to present interest income and yield on a fully tax-equivalent basis is $4.7 million, $4.5 million, and $4.0 million for 2024, 2023 and 2022, respectively.
Federal Home Loan Bank Stock The Federal Home Loan Bank ("FHLB") is a cooperative that provides services to its member banking institutions. The primary reason for the FHLB of Boston membership is to gain access to a reliable source of wholesale funding as a tool to manage liquidity and interest rate risk.
Federal Home Loan Bank Stock The FHLB is a cooperative that provides services to its member banking institutions. The primary reason for the FHLB of Boston membership is to gain access to a reliable source of wholesale funding as a tool to manage liquidity and interest rate risk.
The second line of defense monitors and provides risk management advice across all risk domains, and is comprised of the enterprise risk department, with oversight from the Chief Risk Officer.
The second line of defense monitors and provides risk management advice across all risk domains, and is comprised of the enterprise risk management department, with oversight from the Chief Risk Officer.
If, after assessing the totality of events and circumstances, the Company determines it is more likely than not that the fair value is less than carrying value, a quantitative impairment test is performed to compare carrying value to the fair value of the reporting unit.
If, after assessing the totality of events and circumstances, the Company determines it is more likely than not that the fair value is less than carrying value, a quantitative impairment test is performed to compare carrying value to the fair value of the reporting unit.
See Note 7, "Borrowings" within the Notes to Consolidated Financial Statements included in Item 8 of this Report for more information regarding borrowings. Liquidity and Capital Resources The Company proactively manages its liquidity and cash flow requirements with the intent to maintain stable, cost-effective funding and to promote the strength of its overall balance sheet.
See Note 7, “Borrowings” within the Notes to Consolidated Financial Statements included in Item 8 of this Report for more information regarding borrowings. Liquidity and Capital Resources The Company proactively manages its liquidity and cash flow requirements with the intent to maintain stable, cost-effective funding and to promote the strength of its overall balance sheet.
All other securities are classified as securities available-for-sale and are carried at fair market value. The fair values of securities is based on either quoted market price or third party pricing services. In general, the third-party pricing services employ various methodologies, including but not limited to, broker quotes and proprietary models.
All other securities are classified as securities available-for-sale and are carried at fair market value. The fair values of securities are based on either quoted market price or third-party pricing services. In general, the third-party pricing services employ various methodologies, including but not limited to, broker quotes and proprietary models.
The FDIC offers insurance coverage on deposits up to the federally insured limit of $250,000. The Company participates in the IntraFi Network, allowing it to provide easy access to multi-million dollar FDIC deposit insurance protection on certificate of deposit and money market investments for consumers, businesses and public entities.
The FDIC offers insurance coverage on deposits up to the federally insured limit of $250,000. The Company participates in the IntraFi Network, allowing it to provide 53 easy access to multi-million dollar FDIC deposit insurance protection on certificate of deposit and money market investments for consumers, businesses and public entities.
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 period. The Company’s non-GAAP performance measures are not necessarily comparable to similarly named non-GAAP performance measures which may be presented by other companies.
An item which management deems to be noncore and excludes when computing these non-GAAP measures can be of 38 substantial importance to the Company’s results for any particular period. The Company’s non-GAAP performance measures are not necessarily comparable to similarly named non-GAAP performance measures which may be presented by other companies.
Culture Risk Culture risk is the risk arising from failed leadership and/or ineffective colleague engagement and workplace management that causes the Company to lose sight of core values and, through acts or omissions, damage the relationship-based culture that has been one of the foundations of the Company’s consistent success.
Culture Risk Culture risk is the risk arising from failed leadership and/or ineffective colleague engagement and workplace management that causes the Company to lose sight of core values and, through acts or omissions, damage the relationship-based culture that has been one of the foundations of the Company’s success.
(4) Net interest margin represents net interest income as a percentage of average interest-earning assets. 57 Table of Contents The following table presents certain information on a fully-tax equivalent basis regarding changes in the Company’s interest income and interest expense for the periods indicated.
(4) Net interest margin represents net interest income as a percentage of average interest-earning assets. 57 The following table presents certain information on a fully-tax equivalent basis regarding changes in the Company’s interest income and interest expense for the periods indicated.
Management seeks to mitigate strategic risk through strategic planning, frequent executive review of strategic plan progress, monitoring of competitors and technology, assessment of new products, new branches, and new business initiatives, customer advocacy, and crisis management planning.
Management seeks to mitigate strategic and emerging risk through strategic planning, frequent executive review of strategic plan progress, monitoring of competitors and technology, assessment of new products, new branches, and new business initiatives, customer advocacy, and crisis management planning.
See footnotes to Table 17 above for the related adjustments. 58 Table of Contents Provision For Credit Losses The provision for credit losses represents the charge to expense that is required to maintain an adequate level of allowance for credit losses.
See footnotes to Table 17 above for the related adjustments. 58 Provision For Credit Losses The provision for credit losses represents the charge to expense that is required to maintain an adequate level of allowance for credit losses.
Interest rates, economic conditions, and competitive factors greatly influence deposit levels. The Company’s primary measure of short-term liquidity is the Total Basic Surplus/Deficit as a percentage of assets. This ratio, which is an analysis of the relationship between liquid assets plus available FHLB funding, less short-term liabilities relative to total assets, was within policy limits at December 31, 2023.
Interest rates, economic conditions, and competitive factors greatly influence deposit levels. The Company’s primary measure of short-term liquidity is the Total Basic Surplus/Deficit as a percentage of assets. This ratio, which is an analysis of the relationship between liquid assets plus available FHLB funding, less short-term liabilities relative to total assets, was within policy limits at December 31, 2024.
The Company seeks to make arrangements to resolve any delinquent or default situation over the shortest possible time frame. Generally, the Company requires that a delinquency notice be mailed to a borrower upon expiration of a grace period (typically no longer than 15 days beyond the due 47 Table of Contents date).
The Company seeks to make arrangements to resolve any delinquent or default situation over the shortest possible time frame. Generally, the Company requires that a delinquency notice be mailed to a borrower upon expiration of a grace period (typically no longer than 15 days beyond the due 47 date).
When applicable, the Company tests each of the other intangibles by comparing the carrying value of the intangible to the sum of the undiscounted cash flows expected to result from the use and eventual disposition of the asset. There were no other events or changes during the fourth quarter of 2023 that indicated impairment of goodwill and other intangible assets.
When applicable, the Company tests each of the other intangibles by comparing the carrying value of the intangible to the sum of the undiscounted cash flows expected to result from the use and eventual disposition of the asset. There were no other events or changes during the fourth quarter of 2024 that indicated impairment of goodwill and other intangible assets.
All loan modifications are reviewed by the Company to identify if a borrower is deemed to be experiencing financial difficulty at time of the modification. Purchased Credit Deteriorated Loans Purchased Credit Deteriorated ("PCD") loans are acquired loans which have shown a more-than-insignificant deterioration in credit quality since origination.
All loan modifications are reviewed by the Company to identify if a borrower is deemed to be experiencing financial difficulty at time of the modification. Purchased Credit Deteriorated Loans Purchased Credit Deteriorated (“PCD”) loans are acquired loans which have shown a more-than-insignificant deterioration in credit quality since origination.
Movements in equity prices may have a modest impact on earnings by affecting the volume of activity or the amount of fees from investment-related business lines. See Note 2 , "Securities " within the Notes to Consolidated Financial Statements included in Item 8 of this Report.
Movements in equity prices may have a modest impact on earnings by affecting the volume of activity or the amount of fees from investment-related business lines. See Note 2 , “Securities” within the Notes to Consolidated Financial Statements included in Item 8 of this Report.
In addition, management takes a disciplined approach to credit underwriting, seeking to avoid undue credit risk and credit losses. 34 Table of Contents Funding and the Net Interest Margin The Company's overall sources of funding reflect strong business and retail deposit growth with a management emphasis on core deposit growth to fund loans.
In addition, management takes a disciplined approach to credit underwriting, seeking to avoid undue credit risk and credit losses. 34 Funding and the Net Interest Margin The Company’s overall sources of funding reflect strong business and retail deposit growth with a management emphasis on core deposit growth to fund loans.
PCD loans are recorded at amortized cost with an allowance for credit losses recorded upon purchase. Nonperforming Assets Nonperforming assets are typically comprised of nonperforming loans and other real estate owned ("OREO"). Nonperforming loans consist of nonaccrual loans and loans that are 90 days or more past due but still accruing interest.
PCD loans are recorded at amortized cost with an allowance for credit losses recorded upon purchase. Nonperforming Assets Nonperforming assets are typically comprised of nonperforming loans and other real estate owned (“OREO”). Nonperforming loans consist of nonaccrual loans and loans that are 90 days or more past due but still accruing interest.
Management is responsible for comprehensive enterprise risk management, and continually strives to adopt and implement practices that strike an appropriate balance between risk and reward and permit the achievement of strategic goals in a controlled environment. The Company has implemented the “three lines of defense” enterprise risk management model.
Management is responsible for comprehensive enterprise risk management, and continually strives to adopt and implement practices that strike an appropriate balance between risk and reward and permit the achievement of strategic goals in a controlled environment. The Company has implemented the “three lines of defense” enterprise risk management framework.
In addition to customary operational liquidity practices, the Board of Directors and management recognize the need to establish reasonable guidelines to manage a heightened liquidity risk environment. Catalysts for elevated liquidity risk can be Company-specific issues and/or systemic industry-wide events.
In addition to customary operational liquidity practices, the Board and management recognize the need to establish reasonable guidelines to manage a heightened liquidity risk environment. Catalysts for elevated liquidity risk can be Company-specific issues and/or systemic industry-wide events.
The Company completed its annual impairment test as of August 31, 2023, using the quantitative impairment test, and determined that the Company's goodwill was not impaired. There were no other events or changes during the fourth quarter of 2023 that indicated impairment of goodwill and other intangible assets.
The Company completed its annual impairment test as of August 31, 2024, using the quantitative impairment test, and determined that the Company's goodwill was not impaired. There were no other events or changes during the fourth quarter of 2024 that indicated impairment of goodwill and other intangible assets.
The third line of defense is independent assurance performed by the Chief Internal Auditor, who reports to the Audit Committee of the Company's Board of Directors, and by the Company's internal audit department. 61 Table of Contents The Board of Directors, with the assistance of its Risk Committee, oversees management’s enterprise risk management practices.
The third line of defense is independent assurance performed by the Chief Internal Auditor, who reports to the Audit Committee of the Company’s Board of Directors, and by the Company’s internal audit department. 61 The Board, with the assistance of its Risk Committee, oversees management’s enterprise risk management practices.
The following should be read in conjunction with the Consolidated Financial Statements and related notes. 32 Table of Contents Executive Level Overview Management evaluates the Company's operating results and financial condition using measures that include net income, earnings per share, return on assets and equity, return on tangible common equity, net interest margin, tangible book value per share, asset quality indicators, and many others.
The following should be read in conjunction with the Consolidated Financial Statements and related notes. 32 Executive Level Overview Management evaluates the Company’s operating results and financial condition using measures that include net income, earnings per share, return on assets and equity, return on tangible common equity, net interest margin, tangible book value per share, asset quality indicators, and many others.
Table 3 - Securities Portfolio, Weighted Average Yields Within One Year One Year to Five Years Five Years to Ten Years Over Ten Years Total Weighted Average Yield Securities available for sale: U.S. government agency securities — 1.2 % 1.6 % — 1.3 % U.S. treasury securities 0.4 % 0.9 % — — 0.8 % Agency mortgage-backed securities 4.0 % 1.6 % 1.9 % 2.0 % 1.8 % Agency collateralized mortgage obligations — — 2.1 % 3.6 % 3.5 % State, county, and municipal securities — 3.0 % — — 3.0 % Single issuer trust preferred securities issued by banks — — — 3.7 % 3.7 % Pooled trust preferred securities issued by banks and insurers — — — 6.1 % 6.1 % Small business administration pooled securities — — — 2.2 % 2.2 % Total available for sale securities 0.4 % 1.1 % 1.8 % 2.3 % 1.2 % Securities held to maturity: U.S. government agency securities: 0.5 % — — — 0.5 % U.S. treasury securities — 1.3 % 1.5 % — 1.3 % Agency mortgage-backed securities — 2.9 % 2.4 % 3.2 % 2.8 % Agency collateralized mortgage obligations — 2.5 % 1.1 % 1.6 % 1.7 % Single issuer trust preferred securities issued by banks — 8.3 % — — 8.3 % Small business administration pooled securities — — 2.2 % 4.1 % 4.0 % Total held to maturity securities 0.5 % 2.6 % 2.3 % 2.5 % 2.5 % Total 0.4 % 1.6 % 2.2 % 2.4 % 1.8 % As of December 31, 2023, the weighted average life of the securities portfolio was 4.1 years and the modified duration was 3.6 years.
Table 3 - Securities Portfolio, Weighted Average Yields Within One Year One Year to Five Years Five Years to Ten Years Over Ten Years Total Weighted Average Yield Securities available for sale: U.S. government agency securities — 1.3 % — — 1.3 % U.S. treasury securities 0.6 % 1.0 % — — 0.9 % Agency mortgage-backed securities 3.7 % 2.4 % 2.0 % 2.9 % 2.6 % Agency collateralized mortgage obligations — — 2.1 % 3.4 % 3.3 % State, county, and municipal securities — 3.0 % — — 3.0 % Pooled trust preferred securities issued by banks and insurers — — — 5.1 % 5.1 % Small business administration pooled securities — — — 2.1 % 2.1 % Total available for sale securities 0.6 % 1.3 % 2.0 % 2.8 % 1.6 % Securities held to maturity: U.S. treasury securities — 1.3 % 1.5 % — 1.3 % Agency mortgage-backed securities 3.0 % 3.0 % 2.1 % 3.2 % 2.8 % Agency collateralized mortgage obligations — 2.5 % 1.1 % 1.6 % 1.7 % Small business administration pooled securities — — 2.5 % 4.1 % 4.0 % Total held to maturity securities 3.0 % 2.6 % 2.0 % 2.5 % 2.5 % Total 0.6 % 1.9 % 2.0 % 2.6 % 2.0 % As of December 31, 2024, the weighted average life of the securities portfolio was 3.7 years and the modified duration was 3.3 years.
The nine major risk categories identified by the Company and addressed in the Risk Appetite Statement are strategic and emerging risk, culture risk, credit risk, liquidity risk, interest rate risk, operational risk, reputation risk, compliance risk, and technology risk, each of which is discussed below.
The nine major risk categories identified by the Company and addressed in the Risk Appetite Statement are strategic and emerging risk, culture risk, credit risk, liquidity risk, market and interest rate risk, operational risk, reputation risk, compliance risk, and technology and cyber risk, each of which is discussed below.
Risk Management The Board of Directors has approved an Enterprise Risk Management Policy to state the Company’s goals and objectives in identifying, measuring, and managing the risks associated with the Company’s current and near future anticipated size and complexity.
Risk Management The Board of Directors has approved an Enterprise Risk Management Policy and Risk Appetite Statement to state the Company’s goals and objectives in identifying, measuring, and managing the risks associated with the Company’s current and near future anticipated size and complexity.
The following chart depicts the Company's efficiency ratio on a GAAP basis (calculated by dividing noninterest expense by the sum of noninterest income and net interest income), as well as the Company's efficiency ratio on a non-GAAP operating basis, (calculated by dividing noninterest expense, excluding certain noncore items, by the sum of noninterest income, excluding certain noncore items, and net interest income) over the past five years: *See "Non-GAAP Measures" below for a reconciliation to GAAP financial measures. 37 Table of Contents Capital The Company's approach with respect to revenue and expense is designed to promote long-term earnings growth, which in turn contributes to capital growth.
The following chart depicts the Company’s efficiency ratio on a GAAP basis (calculated by dividing noninterest expense by the sum of noninterest income and net interest income), as well as the Company’s efficiency ratio on a non-GAAP operating basis, (calculated by dividing noninterest expense, excluding certain noncore items, by the sum of noninterest income, excluding certain noncore items, and net interest income) over the past five years: *See “Non-GAAP Measures” below for a reconciliation to GAAP financial measures. 37 Capital The Company’s approach with respect to revenue and expense is designed to promote long-term earnings growth, which in turn contributes to capital growth.
For further details surrounding the Company’s liquidity risks and related strategy, see the " Risk Management – Liquidity Risk" section below within Item 7 Management’s Discussion and Analysis of Financial Condition and Results of Operations within this Report.
For further details surrounding the Company’s liquidity risks and related strategy, see the “ Risk Management – Liquidity Risk” section below within Item 7 Management’s Discussion and Analysis of Financial Condition and Results of Operations within this Report.
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, facilitates comparison of the capital adequacy of the Company to other companies in the financial services industry. 38 Table of Contents These non-GAAP measures should not be viewed as a substitute for financial results determined in accordance with GAAP.
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, facilitates comparison of 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 financial results determined in accordance with GAAP.
Management does not typically adjust the prices received from third-party pricing services. Depending upon the type of security, management employs various techniques to analyze the pricing it receives from third-parties, such as reviewing model inputs, reviewing 67 Table of Contents comparable trades, analyzing changes in market yields and, in certain instances, reviewing the underlying collateral of the security.
Management does not typically adjust the prices received from third-party pricing services. Depending upon the type of security, management employs various techniques to analyze the pricing it receives from third-parties, such as reviewing model inputs, reviewing comparable trades, analyzing changes in market yields and, in certain instances, reviewing the underlying collateral of the security.
See Note 9," Derivatives and Hedging Activities " within Notes to Consolidated Financial Statements included in Item 8 of this Report for additional information regarding the Company’s derivative financial instruments. Movements in foreign currency rates or commodity prices do not directly or materially affect the Company's earnings.
See Note 9, “ Derivatives and Hedging Activities” within Notes to Consolidated Financial Statements included in Item 8 of this Report for additional information regarding the Company’s derivative financial instruments. Movements in foreign currency rates or commodity prices do not directly or materially affect the Company’s earnings.
At December 31, 2023 and 2022, the Company had no securities categorized as level 3 within the fair value hierarchy. 43 Table of Contents The following table sets forth the weighted average yield for each range of contractual maturities of the Bank’s available for sale and held to maturity securities portfolios at December 31, 2023.
At December 31, 2024 and 2023, the Company had no securities categorized as level 3 within the fair value hierarchy. 43 The following table sets forth the weighted average yield for each range of contractual maturities of the Bank’s available for sale and held to maturity securities portfolios at December 31, 2024.
At December 31, 2023, the aggregate book value of securities issued by Fannie Mae, Freddie Mac and the U.S. Department of the Treasury exceeded 10% of stockholders' equity.
At December 31, 2024, the aggregate book value of securities issued by Fannie Mae, Freddie Mac and the U.S. Department of the Treasury exceeded 10% of stockholders’ equity.
Refer to the accompanying notes to consolidated financial statements in this report for further information and the expected timing of the applicable payments as of December 31, 2023.
Refer to the accompanying notes to consolidated financial statements in this report for further information and the expected timing of the applicable payments as of December 31, 2024.
The model estimates expected credit losses using loan level data over the contractual life of the exposure, considering the effect of prepayments. Economic forecasts are incorporated into the estimate over a reasonable and supportable forecast period of one year, beyond which is a reversion to the Company's historical long-run average for a period of six months.
The model estimates expected credit losses using loan level data over the contractual life of the exposure, which is adjusted for estimated prepayments. Economic forecasts are incorporated into the estimate over a reasonable and supportable forecast period of one year, beyond which is a reversion to the Company’s historical long-run average over a period of six months.
The Company estimates expected credit losses for its available for sale and held to maturity securities in accordance with the CECL methodology, as described in Note 1, "Summary of Significant Accounting Policies" within the Notes to Consolidated Financial Statements included in Item 8 of this Report.
The Company estimates expected credit losses for its available for sale and held to maturity securities in accordance with the CECL methodology, as described in Note 1, “Summary of Significant Accounting Policies” within the Notes to Consolidated Financial Statements included in Item 8 of this Report.
There were no other events or changes during the fourth quarter of 2023 that indicated impairment of goodwill and other intangible assets. For additional information regarding the goodwill and other intangible assets, see Note 5, "Goodwill and Other Intangible Assets " within the Notes to Consolidated Financial Statements included in Item 8 hereof.
There were no other events or changes during the fourth quarter of 2024 that indicated impairment of goodwill and other intangible assets. For additional information regarding the goodwill and other intangible assets, see Note 5, “Goodwill and Other Intangible Assets” within the Notes to Consolidated Financial Statements included in Item 8 hereof.
Additionally, the Company invests in various low-income housing projects which are real estate limited partnerships that acquire, develop, own and operate low and moderate-income housing developments. As a limited partner in these operating partnerships, the Company receives tax credits and tax deductions for losses incurred by the underlying properties.
The Company invests in various low income housing projects, which are real estate limited partnerships that acquire, develop, own and operate low and moderate-income housing developments. As a limited partner in these operating partnerships, the Company will receive tax credits and tax deductions for losses incurred by the underlying properties.
Unrealized gains and losses on securities available-for-sale are reported, on an after-tax basis, as a separate component of stockholders’ equity in accumulated other comprehensive income. Recent Accounting Developments See Note 1, "Summary of Significant Accounting Policies " within the Notes to Consolidated Financial Statements included in Item 8 of this Report.
Unrealized gains 67 and losses on securities available-for-sale are reported, on an after-tax basis, as a separate component of stockholders’ equity in accumulated other comprehensive income. Recent Accounting Developments See Note 1, “Summary of Significant Accounting Policies” within the Notes to Consolidated Financial Statements included in Item 8 of this Report.
The Bank receives fees dependent upon the level and type of service(s) provided. The Investment Management Group generated gross fee revenues of $34.6 million, $32.8 million, and $31.6 million for the years ended December 31, 2023, 2022, and 2021, respectively.
The Bank receives fees dependent upon the level and type of service(s) provided. The Investment Management Group generated gross fee revenues of $38.3 million, $34.6 million, and $32.8 million for the years ended December 31, 2024, 2023, and 2022, respectively.
Capital balances during 2023 were impacted primarily by earnings retention, dividends, changes in other comprehensive income, and opportunistic share repurchases. The following chart shows the Company's book value and tangible book value per share over the past five years: *See "Non-GAAP Measures" below for a reconciliation to GAAP financial measures.
Capital balances during 2024 were impacted primarily by earnings retention, dividends, changes in other comprehensive income, and opportunistic share repurchases. The following chart shows the Company’s book value and tangible book value per share over the past five years: *See “Non-GAAP Measures” below for a reconciliation to GAAP financial measures.
Given the Company's benign loss history, the analyses 66 Table of Contents performed have not resulted in a material change to the quantitative allowance but has informed management's determination of qualitative adjustments and act as corroborating evidence as to the appropriateness of the allowance as a whole.
Given the Company’s benign loss history, the analyses performed have not resulted in a material change to the quantitative allowance but have informed management’s determination of qualitative adjustments and act as corroborating evidence as to the appropriateness of the allowance as a whole.
See Note 3, "Loans, Allowance for Credit Losses and Credit Quality " within the Notes to Consolidated Financial Statements included in Item 8 of this Report, for further details surrounding the primary drivers of the provision for credit losses during the period.
See Note 3, “Loans, Allowance for Credit Losses and Credit Quality” within the Notes to Consolidated Financial Statements included in Item 8 of this Report, for further details surrounding the primary drivers of the provision for credit losses during the period.
The results of those scenarios are summarized in the following table: Table 23 - Interest Rate Sensitivity Years Ended December 31 2023 2022 Year 1 Year 1 Parallel rate shocks (basis points) -300 (1.7)% (10.0)% -200 (0.9)% (5.7)% -100 (0.3)% (2.5)% +100 (0.3)% 1.5% +200 0.8% 2.4% +300 (1.0)% 4.0% Gradual rate shifts (basis points) -200 over 12 months (0.1)% (2.3)% -100 over 12 months 0.0% (1.1)% +200 over 12 months (0.3)% 1.4% +400 over 24 months n/a 1.4% Alternative scenarios Steep down 200 basis points scenario 1.2% (0.5)% 64 Table of Contents The results depicted in the table above are dependent on material assumptions, such as prepayment rates, decay rates, pricing decisions on loans and deposits, and other factors, which management believes are reasonable.
The results of those scenarios are summarized in the following table: Table 23 - Interest Rate Sensitivity Years Ended December 31 2024 2023 Year 1 Year 1 Parallel rate shocks (basis points) -300 (5.1)% (1.7)% -200 (2.9)% (0.9)% -100 (0.9)% (0.3)% +100 0.7% (0.3)% +200 1.2% 0.8% +300 2.0% (1.0)% Gradual rate shifts (basis points) -200 over 12 months (1.1)% (0.1)% -100 over 12 months (0.4)% —% +200 over 12 months 0.7% (0.3)% Alternative scenarios Steep down 200 basis points scenario (0.7)% 1.2% The results depicted in the table above are dependent on material assumptions, such as prepayment rates, decay rates, pricing decisions on loans and deposits, and other factors, which management believes are reasonable.
Taxes are discussed in more detail in Note 10, "Income Taxes" within the Notes to the Consolidated Financial Statements included in Item 8 of this Report.
Taxes are discussed in more detail in Note 10, “Income Taxes” within the Notes to the Consolidated Financial Statements included in Item 8 of this Report.
This channel allows the Company to access a reciprocal deposit exchange that can be used to benefit customers seeking increased FDIC insurance protection, and amounted to $959.1 million and $653.6 million in deposits, at December 31, 2023 and December 31, 2022, respectively.
This channel allows the Company to access a reciprocal deposit exchange that can be used to benefit customers seeking increased FDIC insurance protection, and amounted to $1.1 billion and $959.1 million in deposits, at December 31, 2024 and December 31, 2023, respectively.
As of December 31, 2023 and December 31, 2022, included in the assets under administration amounts above, there were $449.8 million and $390.1 million, respectively, relating to the Company's registered investment advisor. The administration of trust and fiduciary accounts is monitored by the Trust Committee of the Bank’s Board of Directors.
As of December 31, 2024 and December 31, 2023, included in the assets under administration amounts above, there were $491.5 million and $449.8 million, respectively, relating to the Company's registered investment advisor. The administration of trust and fiduciary accounts is monitored by the Trust Committee of the Bank’s Board of Directors.
(2) Loans with a carrying value of $4.6 billion and $1.7 billion at December 31, 2023 and 2022, respectively, were pledged to the Federal Reserve Bank of Boston. (3) The additional borrowing capacity has not been assessed for these categories.
(2) Loans and securities with a carrying value of $4.9 billion and $4.6 billion at December 31, 2024 and 2023, respectively, were pledged to the Federal Reserve Bank of Boston. (3) The additional borrowing capacity has not been assessed for these categories.
Cash Surrender Value of Life Insurance Policies The Bank holds life insurance policies for the purpose of offsetting its future obligations to its employees under its retirement and benefits plans. The cash surrender value of life insurance policies was $297.4 million and $293.3 million at December 31, 2023 and December 31, 2022, respectively.
Cash Surrender Value of Life Insurance Policies The Bank holds life insurance policies for the purpose of offsetting its future obligations to its employees under its retirement and benefits plans. The cash surrender value of life insurance policies was $304.0 million and $297.4 million at December 31, 2024 and December 31, 2023, respectively.
The principal balance of loans serviced by the Bank on behalf of investors was $298.8 million at December 31, 2023 and $327.5 million at December 31, 2022. 45 Table of Contents The following table shows the adjusted cost of the servicing rights associated with these loans and the changes for the periods indicated: Table 7 - Mortgage Servicing Asset 2023 2022 (Dollars in thousands) Beginning balance $ 2,947 $ 2,627 Additions 5 8 Amortization (485) (649) Change in valuation allowance 174 961 Ending balance $ 2,641 $ 2,947 See Note 9, "Derivatives and Hedging Activities," within the Notes to Consolidated Financial Statements included in Item 8 of this Report for more information on mortgage activity and mortgage related derivatives.
The principal balance of loans serviced by the Bank on behalf of investors was $280.2 million at December 31, 2024 and $298.8 million at December 31, 2023. 45 The following table shows the adjusted cost of the servicing rights associated with these loans and the changes for the periods indicated: Table 7 - Mortgage Servicing Asset 2024 2023 (Dollars in thousands) Beginning balance $ 2,641 $ 2,947 Additions 56 5 Amortization (392) (485) Change in valuation allowance 161 174 Ending balance $ 2,466 $ 2,641 See Note 9, “Derivatives and Hedging Activities,” within the Notes to Consolidated Financial Statements included in Item 8 of this Report for more information on mortgage activity and mortgage related derivatives.
The retail investments and insurance revenues were $5.6 million, $4.1 million, and $3.7 million for the years ended December 31, 2023, 2022, and 2021, respectively.
The retail investments and insurance revenues were $4.4 million, $5.6 million, and $4.1 million for the years ended December 31, 2024, 2023, and 2022, respectively.
Table 1 - Selected Financial Data As of or for the Years Ended December 31 2023 2022 2021 2020 2019 (Dollars in thousands, except per share data) Financial condition data Securities $ 2,930,860 $ 3,129,281 $ 2,664,859 $ 1,162,317 $ 1,190,670 Loans 14,278,070 13,928,675 13,587,286 9,392,866 8,873,639 Allowance for credit losses (142,222) (152,419) (146,922) (113,392) (67,740) Goodwill and other intangibles 1,003,262 1,010,140 1,017,844 529,313 535,492 Total assets 19,347,373 19,294,174 20,423,405 13,204,301 11,395,165 Deposits 14,865,547 15,879,007 16,917,044 10,993,170 9,147,367 Borrowings 1,218,379 113,377 152,374 181,060 303,103 Stockholders’ equity 2,895,251 2,886,701 3,018,449 1,702,685 1,708,143 Nonperforming loans 54,383 54,881 27,820 66,861 48,049 Nonperforming assets 54,493 54,881 27,820 66,861 48,049 Operating data Interest income $ 795,726 $ 642,840 $ 415,276 $ 402,069 $ 447,014 Interest expense 189,205 29,591 13,717 34,341 53,879 Net interest income 606,521 613,249 401,559 367,728 393,135 Provision for credit losses 23,250 6,500 18,205 52,500 6,000 Noninterest income 124,609 114,667 105,850 111,440 115,294 Noninterest expenses 392,746 373,662 332,529 273,832 284,321 Net income 239,502 263,813 120,992 121,167 165,175 Per share data Net income — basic $ 5.42 $ 5.69 $ 3.47 $ 3.64 $ 5.03 Net income — diluted 5.42 5.69 3.47 3.64 5.03 Cash dividends declared 2.20 2.08 1.92 1.84 1.76 Book value 67.53 63.25 63.75 51.65 49.69 Tangible book value (1) 44.13 41.12 42.25 35.59 34.11 Performance ratios Return on average assets 1.24 % 1.33 % 0.81 % 0.96 % 1.52 % Return on average common equity 8.31 % 9.05 % 6.34 % 7.13 % 10.85 % Net interest margin (on a fully tax equivalent basis) 3.54 % 3.46 % 3.02 % 3.29 % 4.04 % Dividend payout ratio 40.92 % 35.53 % 51.85 % 50.21 % 32.25 % Asset quality ratios Nonperforming loans as a percent of gross loans 0.38 % 0.39 % 0.20 % 0.71 % 0.54 % Nonperforming assets as a percent of total assets 0.28 % 0.28 % 0.14 % 0.51 % 0.42 % Allowance for credit losses as a percent of total loans 1.00 % 1.09 % 1.08 % 1.21 % 0.76 % Allowance for credit losses as a percent of nonperforming loans 261.52 % 277.73 % 528.12 % 169.59 % 140.98 % Capital ratios Equity to assets 14.96 % 14.96 % 14.78 % 12.89 % 14.99 % Tangible equity to tangible assets (1) 10.31 % 10.26 % 10.31 % 9.26 % 10.80 % Tier 1 leverage capital ratio 10.96 % 10.99 % 12.03 % 9.56 % 11.28 % Common equity tier 1 capital ratio 14.19 % 14.33 % 14.30 % 12.67 % 12.86 % Tier 1 risk-based capital ratio 14.19 % 14.33 % 14.30 % 13.34 % 13.53 % Total risk-based capital ratio 15.91 % 16.11 % 16.04 % 15.13 % 14.83 % (1) Represents a non-GAAP measurement.
Table 1 - Selected Financial Data As of or for the Years Ended December 31 2024 2023 2022 2021 2020 (Dollars in thousands, except per share data) Financial condition data Securities $ 2,711,349 $ 2,930,860 $ 3,129,281 $ 2,664,859 $ 1,162,317 Loans 14,508,378 14,278,070 13,928,675 13,587,286 9,392,866 Allowance for credit losses (169,984) (142,222) (152,419) (146,922) (113,392) Goodwill and other intangibles 997,356 1,003,262 1,010,140 1,017,844 529,313 Total assets 19,373,565 19,347,373 19,294,174 20,423,405 13,204,301 Deposits 15,305,978 14,865,547 15,879,007 16,917,044 10,993,170 Borrowings 701,374 1,218,379 113,377 152,374 181,060 Stockholders’ equity 2,993,120 2,895,251 2,886,701 3,018,449 1,702,685 Nonperforming loans 101,529 54,383 54,881 27,820 66,861 Nonperforming assets 101,529 54,493 54,881 27,820 66,861 Operating data Interest income $ 852,753 $ 795,726 $ 642,840 $ 415,276 $ 402,069 Interest expense 291,024 189,205 29,591 13,717 34,341 Net interest income 561,729 606,521 613,249 401,559 367,728 Provision for credit losses 36,250 23,250 6,500 18,205 52,500 Noninterest income 128,014 124,609 114,667 105,850 111,440 Noninterest expenses 406,366 392,746 373,662 332,529 273,832 Net income 192,081 239,502 263,813 120,992 121,167 Per share data Net income — basic $ 4.52 $ 5.42 $ 5.69 $ 3.47 $ 3.64 Net income — diluted 4.52 5.42 5.69 3.47 3.64 Cash dividends declared 2.28 2.20 2.08 1.92 1.84 Book value 70.43 67.53 63.25 63.75 51.65 Tangible book value (1) 46.96 44.13 41.12 42.25 35.59 Performance ratios Return on average assets 0.99 % 1.24 % 1.33 % 0.81 % 0.96 % Return on average common equity 6.53 % 8.31 % 9.05 % 6.34 % 7.13 % Net interest margin (on a fully tax equivalent basis) 3.28 % 3.54 % 3.46 % 3.02 % 3.29 % Dividend payout ratio 50.08 % 40.92 % 35.53 % 51.85 % 50.21 % Asset quality ratios Nonperforming loans as a percent of gross loans 0.70 % 0.38 % 0.39 % 0.20 % 0.71 % Nonperforming assets as a percent of total assets 0.52 % 0.28 % 0.28 % 0.14 % 0.51 % Allowance for credit losses as a percent of total loans 1.17 % 1.00 % 1.09 % 1.08 % 1.21 % Allowance for credit losses as a percent of nonperforming loans 167.42 % 261.52 % 277.73 % 528.12 % 169.59 % Capital ratios Equity to assets 15.45 % 14.96 % 14.96 % 14.78 % 12.89 % Tangible equity to tangible assets (1) 10.86 % 10.31 % 10.26 % 10.31 % 9.26 % Tier 1 leverage capital ratio 11.32 % 10.96 % 10.99 % 12.03 % 9.56 % Common equity tier 1 capital ratio 14.65 % 14.19 % 14.33 % 14.30 % 12.67 % Tier 1 risk-based capital ratio 14.65 % 14.19 % 14.33 % 14.30 % 13.34 % Total risk-based capital ratio 16.04 % 15.91 % 16.11 % 16.04 % 15.13 % (1) Represents a non-GAAP measurement.
The Company recorded tax exempt income from life insurance policies in the amounts of $7.9 million, $7.7 million, and $6.4 million for the years ended December 31, 2023, 2022 and 2021, respectively. The Company also recorded gains on life insurance benefits of $2.3 million, $1.3 million, and $258,000 for the years ended December 31, 2023, 2022 and 2021, respectively.
The Company recorded tax exempt income from life insurance policies in the amounts of $8.1 million, $7.9 million, and $7.7 million for the years ended December 31, 2024, 2023 and 2022, respectively. The Company also recorded gains on life insurance benefits of $457,000, $2.3 million, and $1.3 million for the years ended December 31, 2024, 2023 and 2022, respectively.
In addition, the Company may also utilize brokered deposit sources, as needed, with balances of $100.9 million and $102.6 million outstanding at December 31, 2023 and December 31, 2022, respectively. The Company's deposit accounts are insured to the maximum extent permitted by the Deposit Insurance Fund which is administered by the Federal Deposit Insurance Corporation ("FDIC").
In addition, the Company may also utilize brokered deposit sources, as needed, with balances of $61.2 million and $100.9 million outstanding at December 31, 2024 and December 31, 2023, respectively. The Company’s deposit accounts are insured to the maximum extent permitted by the Deposit Insurance Fund (“DIF”) which is administered by the Federal Deposit Insurance Corporation (“FDIC”).
The investments are accounted for using the proportional amortization method and will be amortized over various periods through 2040, which represents the period that the tax credits and other tax benefits will be utilized. The total committed investment in these partnerships at December 31, 2023 was $229.0 million, of which $170.3 million has been funded.
The investments are accounted for using the proportional amortization method and will be amortized over various periods through 2043, which represents the period that the tax credits and other tax benefits will be utilized. The total committed investment in these partnerships at December 31, 2024 was $275.1 million, of which $203.3 million has been funded.
Investment Management The following table presents total assets under administrations and number of accounts held by the Rockland Trust Investment Management Group at the following dates: Table15 - Assets Under Administration December 31 2023 December 31 2022 December 31 2021 (Dollars in thousands) Assets under administration $ 6,537,905 $ 5,792,857 $ 5,726,368 Number of trust, fiduciary and agency accounts 6,550 6,459 6,379 The Company's Investment Management Group provides investment management and trust services to individuals, institutions, small businesses, and charitable institutions.
Investment Management The following table presents total assets under administrations and number of accounts held by the Rockland Trust Investment Management Group at the following dates: Table 15 - Assets Under Administration December 31 2024 December 31 2023 December 31 2021 (Dollars in thousands) Assets under administration $ 7,035,315 $ 6,537,905 $ 5,792,857 Number of trust, fiduciary and agency accounts 6,637 6,550 6,459 54 The Company’s Investment Management Group provides investment management and trust services to individuals, institutions, small businesses, and charitable institutions.
For additional information related to the Company's income taxes see Note 10, "Income Taxes" and Note 11, "Low Income Housing Project Investments" within the Notes to the Consolidated Financial Statements included in Item 8 of this Report. Dividends The Company declared quarterly cash dividends totaling $2.20 per common share in 2023 and $2.08 per common share in 2022.
For additional information related to the Company’s income taxes see Note 10, “Income Taxes” and Note 11, “Low Income Housing Project Investments” within the Notes to the Consolidated Financial Statements included in Item 8 of this Report. Dividends The Company declared quarterly cash dividends totaling $2.28 per common share in 2024 and $2.20 per common share in 2023.
The Company's ratio of core deposits, inclusive of reciprocal money market deposits, to total deposits represented 84.6% at December 31, 2023 compared to 91.8% at December 31, 2022, with the 2023 decrease driven primarily by core deposit outflows in conjunction with growth in higher yielding time deposits.
The Company’s ratio of core deposits, inclusive of reciprocal money market deposits, to total deposits represented 81.7% at December 31, 2024 compared to 84.6% at December 31, 2023, with the decrease driven primarily by core deposit outflows in conjunction with growth in time deposits.
Results of Operations Table 16 - Summary of Results of Operations Years Ended December 31 2023 2022 2021 (Dollars in thousands, except per share data) Net income $ 239,502 $ 263,813 $ 120,992 Diluted earnings per share $ 5.42 $ 5.69 $ 3.47 Return on average assets 1.24 % 1.33 % 0.81 % Return on average equity 8.31 % 9.05 % 6.34 % Stockholders' equity as % of assets 14.96 % 14.96 % 14.78 % Net interest margin 3.54 % 3.46 % 3.02 % Net Interest Income The amount of net interest income is affected by changes in interest rates and by the volume, mix, and interest rate sensitivity of interest-earning assets and interest-bearing liabilities.
Results of Operations Table 16 - Summary of Results of Operations Years Ended December 31 2024 2023 2022 (Dollars in thousands, except per share data) Net income $ 192,081 $ 239,502 $ 263,813 Diluted earnings per share $ 4.52 $ 5.42 $ 5.69 Return on average assets 0.99 % 1.24 % 1.33 % Return on average equity 6.53 % 8.31 % 9.05 % Stockholders’ equity as % of assets 15.45 % 14.96 % 14.96 % Net interest margin 3.28 % 3.54 % 3.46 % Net Interest Income The amount of net interest income is affected by changes in interest rates and by the volume, mix, and interest rate sensitivity of interest-earning assets and interest-bearing liabilities.
The following table summarizes the impact of noncore items on net income and reconciles non-GAAP net operating earnings to net income available to common shareholders for the periods indicated: Years Ended December 31 Net Income Diluted Earnings Per Share 2023 2022 2023 2022 (Dollars in thousands, except per share data) Net income available to common shareholders (GAAP) $ 239,502 $ 263,813 $ 5.42 $ 5.69 Non-GAAP adjustments Noninterest expense components Add: merger and acquisition expenses — 7,100 — 0.15 Noncore increases to income before taxes — 7,100 — 0.15 Net tax benefit associated with noncore items (1) — (1,995) — (0.04) Noncore increases to net income $ — $ 5,105 $ — $ 0.11 Net operating earnings (Non-GAAP) $ 239,502 $ 268,918 $ 5.42 $ 5.80 (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 only to those items included in net taxable income. 39 Table of Contents The following table summarizes the impact of noncore items with respect to the Company's total revenue, noninterest income as a percentage of total revenue, and the efficiency ratio for the periods indicated: Years Ended December 31 2023 2022 2021 2020 2019 (Dollars in thousands) Net interest income $ 606,521 $ 613,249 $ 401,559 $ 367,728 $ 393,135 (a) Noninterest income (GAAP) $ 124,609 $ 114,667 $ 105,850 $ 111,440 $ 115,294 (b) Less: Gain on sale of loans — — — — 951 Noninterest income on an operating basis (non-GAAP) $ 124,609 $ 114,667 $ 105,850 $ 111,440 $ 114,343 (c) Noninterest expense (GAAP) $ 392,746 $ 373,662 $ 332,529 $ 273,832 $ 284,321 (d) Less: Loss on termination of derivatives — — — 684 — Merger and acquisition expenses — 7,100 40,840 — 26,433 Noninterest expense on an operating basis (non-GAAP) $ 392,746 $ 366,562 $ 291,689 $ 273,148 $ 257,888 (e) Total revenue (GAAP) $ 731,130 $ 727,916 $ 507,409 $ 479,168 $ 508,429 (a+b) Total operating revenue (non-GAAP) $ 731,130 $ 727,916 $ 507,409 $ 479,168 $ 507,478 (a+c) Ratios Noninterest income as a % of total revenue (GAAP) (calculated by dividing total noninterest income by total revenue) 17.04 % 15.75 % 20.86 % 23.26 % 22.68 % (b/(a+b)) Noninterest income as a % of total revenue on an operating basis (Non-GAAP) (calculated by dividing total noninterest income on an operating basis by total revenue) 17.04 % 15.75 % 20.86 % 23.26 % 22.53 % (c/(a+c)) Efficiency ratio (GAAP) (calculated by dividing total noninterest expense by total revenue) 53.72 % 51.33 % 65.53 % 57.15 % 55.92 % (d/(a+b)) Efficiency ratio on an operating basis (Non-GAAP) (calculated by dividing total noninterest expense on an operating basis by total revenue) 53.72 % 50.36 % 57.49 % 57.00 % 50.82 % (e/(a+c)) 40 Table of Contents The following table summarizes the calculation of the Company's tangible common equity ratio and tangible book value per share for the periods indicated: Years Ended December 31 2023 2022 2021 2020 2019 (Dollars in thousands, except per share data) Tangible common equity Stockholders’ equity $ 2,895,251 $ 2,886,701 $ 3,018,449 $ 1,702,685 $ 1,708,143 (a) Less: Goodwill and other intangibles 1,003,262 1,010,140 1,017,844 529,313 535,492 Tangible common equity (Non-GAAP) 1,891,989 1,876,561 2,000,605 1,173,372 1,172,651 (b) Tangible assets Assets (GAAP) 19,347,373 19,294,174 20,423,405 13,204,301 11,395,165 (c) Less: Goodwill and other intangibles 1,003,262 1,010,140 1,017,844 529,313 535,492 Tangible assets (Non-GAAP) $ 18,344,111 $ 18,284,034 $ 19,405,561 $ 12,674,988 $ 10,859,673 (d) Common shares 42,873,187 45,641,238 47,349,778 32,965,692 34,377,388 (e) Common equity to assets ratio (GAAP) 14.96 % 14.96 % 14.78 % 12.89 % 14.99 % (a/c) Tangible common equity to tangible assets ratio (Non-GAAP) 10.31 % 10.26 % 10.31 % 9.26 % 10.80 % (b/d) Book value per share (GAAP) $ 67.53 $ 63.25 $ 63.75 $ 51.65 $ 49.69 (a/e) Tangible book value per share (Non-GAAP) $ 44.13 $ 41.12 $ 42.25 $ 35.59 $ 34.11 (b/e) 41 Table of Contents SELECTED FINANCIAL DATA The selected consolidated financial and other data of the Company set forth below does not purport to be complete and should be read in conjunction with, and is qualified in its entirety by, the more detailed information, including the Consolidated Financial Statements and related notes, appearing elsewhere herein.
The following table summarizes the impact of noncore items on net income and reconciles non-GAAP net operating earnings to net income available to common shareholders for the periods indicated: Years Ended December 31 Net Income Diluted Earnings Per Share 2024 2023 2024 2023 (Dollars in thousands, except per share data) Net income available to common shareholders (GAAP) $ 192,081 $ 239,502 $ 4.52 $ 5.42 Non-GAAP adjustments Noninterest expense components Add: merger and acquisition expenses 1,902 — 0.04 — Noncore increases to income before taxes 1,902 — 0.04 — Net tax benefit associated with noncore items (1) (535) — (0.01) — Noncore increases to net income 1,367 — 0.03 — Net operating earnings (Non-GAAP) $ 193,448 $ 239,502 $ 4.55 $ 5.42 (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 only to those items included in net taxable income. 39 The following table summarizes the impact of noncore items with respect to the Company’s total revenue, noninterest income as a percentage of total revenue, and the efficiency ratio for the periods indicated: Years Ended December 31 2024 2023 2022 2021 2020 (Dollars in thousands) Net interest income (GAAP) $ 561,729 $ 606,521 $ 613,249 $ 401,559 $ 367,728 (a) Noninterest income (GAAP) $ 128,014 $ 124,609 $ 114,667 $ 105,850 $ 111,440 (b) Noninterest expense (GAAP) $ 406,366 $ 392,746 $ 373,662 $ 332,529 $ 273,832 (c) Less: Loss on termination of derivatives — — — — 684 Merger and acquisition expenses 1,902 — 7,100 40,840 — Noninterest expense on an operating basis (Non-GAAP) $ 404,464 $ 392,746 $ 366,562 $ 291,689 $ 273,148 (d) Total revenue (GAAP) $ 689,743 $ 731,130 $ 727,916 $ 507,409 $ 479,168 (a+b) Ratios Noninterest income as a % of total revenue (GAAP) (calculated by dividing total noninterest income by total revenue) 18.56 % 17.04 % 15.75 % 20.86 % 23.26 % (b/(a+b)) Efficiency ratio (GAAP) (calculated by dividing total noninterest expense by total revenue) 58.92 % 53.72 % 51.33 % 65.53 % 57.15 % (c/(a+b)) Efficiency ratio on an operating basis (Non-GAAP) (calculated by dividing total noninterest expense on an operating basis by total revenue) 58.64 % 53.72 % 50.36 % 57.49 % 57.00 % (d/(a+b)) 40 The following table summarizes the calculation of the Company’s tangible common equity ratio and tangible book value per share for the periods indicated: Years Ended December 31 2024 2023 2022 2021 2020 (Dollars in thousands, except per share data) Tangible common equity Stockholders’ equity $ 2,993,120 $ 2,895,251 $ 2,886,701 $ 3,018,449 $ 1,702,685 (a) Less: Goodwill and other intangibles 997,356 1,003,262 1,010,140 1,017,844 529,313 Tangible common equity (Non-GAAP) 1,995,764 1,891,989 1,876,561 2,000,605 1,173,372 (b) Tangible assets Assets (GAAP) 19,373,565 19,347,373 19,294,174 20,423,405 13,204,301 (c) Less: Goodwill and other intangibles 997,356 1,003,262 1,010,140 1,017,844 529,313 Tangible assets (Non-GAAP) $ 18,376,209 $ 18,344,111 $ 18,284,034 $ 19,405,561 $ 12,674,988 (d) Common shares 42,500,611 42,873,187 45,641,238 47,349,778 32,965,692 (e) Common equity to assets ratio (GAAP) 15.45 % 14.96 % 14.96 % 14.78 % 12.89 % (a/c) Tangible common equity to tangible assets ratio (Non-GAAP) 10.86 % 10.31 % 10.26 % 10.31 % 9.26 % (b/d) Book value per share (GAAP) $ 70.43 $ 67.53 $ 63.25 $ 63.75 $ 51.65 (a/e) Tangible book value per share (Non-GAAP) $ 46.96 $ 44.13 $ 41.12 $ 42.25 $ 35.59 (b/e) 41 SELECTED FINANCIAL DATA The selected consolidated financial and other data of the Company set forth below does not purport to be complete and should be read in conjunction with, and is qualified in its entirety by, the more detailed information, including the Consolidated Financial Statements and related notes, appearing elsewhere herein.
For additional information regarding the Bank’s allowance for credit losses, see Note 1, "Summary of Significant Accounting Policies" and Note 3, "Loans, Allowance for Credit Losses and Credit Quality " within the Notes to the Consolidated Financial Statements included in Item 8 of this Report.
For additional information regarding the Bank’s allowance for credit losses, see Note 1, “Summary of Significant Accounting Policies” and Note 3, “Loans, Allowance for Credit Losses and Credit Quality” within the Notes to the Consolidated Financial Statements included in Item 8 of this Report.
The table below reflects additional information related to loans which were sold during the periods indicated: Table 6 - Residential Mortgage Loan Sales Years Ended December 31 2023 2022 2021 (Dollars in thousands) Sold with servicing rights released $ 75,548 $ 103,221 $ 772,234 Sold with servicing rights retained (1) 649 863 11,116 Total loans sold $ 76,197 $ 104,084 $ 783,350 (1) All loans sold with servicing rights retained during the above periods were sold without recourse.
The table below reflects additional information related to loans which were sold during the periods indicated: Table 6 - Residential Mortgage Loan Sales Years Ended December 31 2024 2023 2022 (Dollars in thousands) Sold with servicing rights released $ 246,266 $ 75,548 $ 103,221 Sold with servicing rights retained (1) 8,333 649 863 Total loans sold $ 254,599 $ 76,197 $ 104,084 (1) All loans sold with servicing rights retained during the above periods were sold without recourse.
The Company recognized a net tax benefit of approximately $3.7 million for 2023 and anticipates additional net tax benefits of $30.3 million over the remaining life of the investments from the combination of tax credits and operating losses.
The Company recognized a net tax benefit of approximately $4.5 million for 2024 and anticipates additional net tax benefits of $42.7 million over the remaining life of the investments from the combination of tax credits and operating losses.
In accordance with the CECL methodology, the Company estimates credit losses for financial assets on a collective basis for loans sharing similar risk characteristics using a quantitative model combined with an assessment of certain qualitative factors designed to address forecast risk and model risk inherent in the quantitative model output.
In accordance with its Allowance for Credit Losses Program, the Company uses the Current Expected Credit Losses (or “CECL”) model methodology to estimate credit losses for financial assets on a collective basis for loans sharing similar risk characteristics using a quantitative model combined with an assessment of certain qualitative factors designed to address forecast risk and model risk inherent in the quantitative model output.
The Company incurred no material losses related to mortgage repurchases during the years ended December 31, 2023, 2022, and 2021. The Company experienced a lower volume of residential real estate loan sales for the years ended December 31, 2023 and 2022, as compared to 2021, driven primarily by reduced customer demand in the rising interest rate environment.
The Company experienced a lower volume of residential real estate loan sales for the years ended December 31, 2024 and 2023, as compared to 2022, driven primarily by reduced customer demand in the higher interest rate environment.
The effective tax rates reported in the table above are lower than the blended statutory tax rates due to the aforementioned discrete items as well as certain tax preference assets such as life insurance policies, tax exempt bonds, and federal tax credits.
The effective tax rates in the table above are lower than the blended statutory tax rates due to the impact of discrete items, including tax benefits related to equity compensation and purchased state tax credits, as well as certain tax preference assets such as life insurance policies, tax exempt bonds, and federal tax credits.
Management seeks to mitigate culture risk through effective employee relations, leadership that encourages continuous improvement, cultural development and reinforcement of core values, communication of clear ethical and behavioral standards, consistent enforcement of policies and programs, discipline of misbehavior, alignment of incentives and compensation, and by promoting diversity, equity, and inclusion.
Management seeks to mitigate culture risk through effective employee relations, leadership that encourages continuous improvement, cultural development and reinforcement of core values, communication of clear ethical and behavioral standards, consistent enforcement of policies and programs, discipline of misbehavior, alignment of incentives and compensation, and by promoting a company-wide focus on respect for individual differences and differing perspectives.
The following table shows the net interest margin and cost of deposits trends for the trailing five year period: 36 Table of Contents Noninterest Income Noninterest income is primarily comprised of deposit account fees, interchange and ATM fees, investment management fees and mortgage banking income.
The following table shows the net interest margin and cost of deposits trends for the trailing five year period, reflecting the 2024 impact from overall increases in deposit rates and the correlating direct impact on net interest margin: 36 Noninterest Income Noninterest income is primarily comprised of deposit account fees, interchange and ATM fees, investment management fees and mortgage banking income.
The ratio of securities to total assets decreased to 15.1% at December 31, 2023 as compared to 16.2% at December 31, 2022.
The ratio of securities to total assets decreased to 14.0% at December 31, 2024 as compared to 15.1% at December 31, 2023.
Impact of Inflation and Changing Prices The consolidated financial statements and related notes thereto presented in Item 8 of this Report have been prepared in accordance with GAAP which requires the measurement of financial position and operating results in terms of historical dollars without considering changes in the relative purchasing power of money over time due to inflation.
Also refer to Table 22 - Sources of Liquidity within Item 7 of this Report for further details surrounding the Company’s current and unused liquidity resources. 65 Impact of Inflation and Changing Prices The consolidated financial statements and related notes thereto presented in Item 8 of this Report have been prepared in accordance with GAAP which requires the measurement of financial position and operating results in terms of historical dollars without considering changes in the relative purchasing power of money over time due to inflation.
Total 54 Table of Contents assets under administration as of December 31, 2023 were $6.5 billion, including $622.9 million of investment solutions designed by Rockland Trust that are administered and executed through its agreement with LPL Financial ("LPL"), compared to $5.8 billion and $603.7 million, respectively, at December 31, 2022.
Total assets under administration as of December 31, 2024 were $7.0 billion, including $418.2 million of investment solutions designed by Rockland Trust that are administered and executed through its agreement with LPL Financial (“LPL”), compared to $6.5 billion and $383.0 million, respectively, at December 31, 2023.
Cash dividends declared by the Company increased from an aggregate of $2.08 per share in 2022 to $2.20 per share in 2023, representing an increase of 5.8%.
Cash dividends declared by the Company increased from an aggregate of $2.20 per share in 2023 to $2.28 per share in 2024, representing an increase of 3.6%.
Treasury, U.S. government agency securities, agency mortgage-backed securities, agency collateralized mortgage obligations, and small business administration pooled securities. Also included in the Company's security portfolio are trading and equity securities related to certain employee benefit programs. The majority of these securities are investment grade debt obligations with average lives of five years or less.
Also included in the Company’s securities portfolio are trading and equity securities related to certain employee benefit programs. The majority of these securities are investment grade debt obligations with average lives of five years or less.
The results of the annual assessment determined that the Company’s goodwill was not impaired, however the fair value of its reporting unit was in excess of its carrying value by less than 10%, indicating that goodwill may be at risk of impairment.
The results of the annual assessment determined that the Company’s goodwill was not impaired and that the fair value of its reporting unit was in excess of its carrying value by greater than 10%.
For example, a prime one-to-four family residential loan may provide 75 cents of borrowing capacity for every $1.00 pledged, whereas a pledged commercial loan may increase borrowing capacity in a lower amount.
For example, a prime one-to-four family residential loan may provide 75 cents of borrowing capacity for every $1.00 pledged, whereas a pledged commercial loan may 62 increase borrowing capacity in a lower amount. The Company’s lending decisions, therefore, can also affect its liquidity position.
Goodwill and Other Intangible Assets Goodwill and Other Intangible Assets were $1.0 billion at both December 31, 2023 and December 31, 2022. The Company typically performs its annual goodwill impairment testing during the third quarter of the year, unless certain indicators suggest earlier testing to be warranted, using a combined qualitative and quantitative approach.
The Company typically performs its annual goodwill impairment testing during the third quarter of the year, unless certain indicators suggest earlier testing to be warranted, using a combined qualitative and quantitative approach.
Accordingly, although the tables provide an indication of the Company's interest rate risk exposure at a particular point in time, such measurements are not intended to and do not provide a precise forecast of the effect of changes in market interest rates, and actual results may differ.
Accordingly, although the tables provide an indication of the Company’s interest rate risk exposure at a particular point in time, such measurements are not intended to and do not provide a precise forecast of the effect of changes in market interest rates, and actual results may differ. 64 The most significant market factors affecting the Company’s net interest income during the year ended December 31, 2024 were the shape of the U.S.
The 2023 and 2022 ratio of dividends paid to earnings was 40.92% and 35.53%, respectively.
The 2024 and 2023 ratio of dividends paid to earnings was 50.08% and 40.92%, respectively.
The income valuation approach utilized a discounted cash flow analysis, while the market approach utilized a guideline public company approach whereby market multiples were derived from market prices of stocks of public companies that are engaged in the same or similar lines of business.
The income valuation approach utilized a discounted cash flow analysis, while the market approach utilized a combination of the guideline public company and comparative transactions approaches, whereby market multiples used to estimate fair values were derived from market stock prices of, and comparable transactions announced by public companies that are engaged in the same or similar lines of business.

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