Rockland Trust parent announces $1.2B acquisition of Boston bank, reports $41.7M Q1 profit

PROVIDENCE – Independent Bank Corp., the parent company for Rockland Trust Co., on Thursday announced a $1.2 billion deal to acquire another Massachusetts bank and its holding company.

Under the agreement, which was described by company as a merger, the Rockland, Mass.-based Independent Bank Corp. will acquire Meridian Bancorp Inc., the Peabody-based holding company for East Boston Savings Bank, and Rockland Trust Co. will acquire East Boston Savings Bank.

As of March 31, Meridian had $6.5 billion in assets, $5.3 billion in loans and $5.1 billion in deposits. The acquisition is expected to boost Rockland Trust’s assets to $20 billion.

Rockland Trust Co. has eight branches across Rhode Island and Bristol County, Mass., according to PBN’s 2021 Book of Lists. East Boston Savings Bank has 42 full-service locations, plus three loan offices across the Greater Boston area, according to a news release.

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Christopher Oddleifson, CEO of Independent Bank Corp. and Rockland Trust Co., said in a statement that the deal will allow the company to expand its business and consumer customers.

The deal comes as Independent Bank Corp. also on Thursday announced a $41.7 million first-quarter profit, compared with earnings of $26.8 million in the first quarter of 2020.

First-quarter earnings per diluted share rose from 78 cents to $1.26 year over year.

The 55.9% increase in earnings comes largely as a result of the decision to release millions from its loan loss provisions, which like other banks were dramatically increased in anticipation of bad loans due to the COVID-19 pandemic. The company reported a negative $2.5 million in loan loss provisions for the first quarter, compared with the $25 million added to its reserves a year ago.

Total revenue of $124.9 million dipped 6.7% year over year, driven by a 7.2% decline in interest income amid a continued low interest rate environment. 

Also a reflection of low interest rates, net interest margin – the difference between interest income generated and the amount of interest paid out to lenders – dropped 49 basis points to 3.25%.

Noninterest income of $25.3 million fell 4.5%, with decreases in deposit account fees, interchange and ATM fees, and loan level derivative income, which were partially offset by a more than six-fold increase in mortgage banking income. The company in a statement attributed this to “robust” loan volumes, which also characterized much of 2020.

Interest expenses fell 69% to $4.1 million, with decreases in interest on deposits and interest on borrowings.

Noninterest expenses were up 4.3% to $69.7 million, including a 6.8% boost to employee salaries and benefits.

Quarterly assets stood at $13.8 billion, a 15% year-over-year increase driven by deposit and liquid asset growth from government stimulus, the company stated. This included a 3.7% bump in loans to $9.2 billion, driven by the company’s commercial and industrial loan portfolio. The $2.1 billion in commercial and industrial loans includes $340 million in new Paycheck Protection Program loans, although this was partially offset by $285.6 million in existing PPP loans that were paid off, the company stated.

Total deposits reached $11.6 billion, a 23.1% increase driven by noninterest-bearing demand deposits and saving and interest checking accounts.

“We enjoyed solid performance in the first quarter and we remain optimistic about the opportunities ahead of us,” Oddleifson said in a statement. “As we lap a full year of the pandemic, we have come to appreciate more than ever the importance of relationships with one another, with our customers and with our communities.”

Nancy Lavin is a PBN staff writer. You may reach her at Lavin@PBN.com.

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