Fitch upgrades Independent rating

NEW YORK – Fitch Rating has upgraded the rating on Independent Bank Corp.’s long-term issuer default rating, saying the parent of Rockland Trust Co. has kept credit losses low and maintained a “healthy” net interest margin and liquidity position.
The rating climbed from BBB- to BBB, which is two notches from Fitch’s noninvestment grade ratings. The rating outlook is stable.
The upgrade “reflects [Independent Bank Corp.’s] consistent financial performance amidst a difficult operating environment, albeit [the bank’s] New England markets have not had the same level of volatility seen nationally,” Fitch said. “The company’s ratings, as well as its financial performance, are underpinned by its good asset quality over an extended period, which have kept credit costs low.”
Fitch’s announcement came before Rockland, Mass.-based Independent Bank reported its second quarter earnings last week. The bank posted a net income of $11.1 million in the second quarter, more than a 36 percent increase over the the earnings from the year-earlier period.
Rockland Trust has branches in southeastern Massachusetts and conduct business in Rhode Island.
The rating agency noted that the bank’s commercial real estate portfolio accounts for 42 percent of total assets, but Fitch said it expects credit stress in this portfolio to remain at manageable levels.
The agency also said home equity loans, which Fitch views as a higher risk asset class, make up about 17 percent of total loans. But Fitch said the portfolio continues to perform well.
Fitch said the bank’s regulatory capital levels remain sufficient, but lag behind similarly rated peer banks.