PROVIDENCE – Independent Bank Corp., the parent company for Rockland Trust Co., reported a $24.9 million profit in the second quarter of 2020, the company announced on Thursday.
Second-quarter earnings represented an 18.7% drop from $30.6 million earnings reported for the second quarter of 2019. Earnings per diluted share also dropped from 89 cents to 76 cents.
The cut to earnings was driven by a $19 million increase in the company’s provision for credit for losses compared to a year ago – a function of anticipated bad loans amid the COVID-19 pandemic, the company stated.
Total quarterly revenue was $128.2 million, a 15% year-over-year decrease as a result of cuts to interest income in a continued low-interest rate environment. Non-interest income also ticked down 1.6% to $28.2 million due to lower income from deposit account fees with overdraft charges suspended, partially offset by a spike in loan level derivative income.
Net interest income – the difference between interest earned on assets such as loans, mortgages and securities and interest paid out to customer deposits – dropped 14.1% to end the quarter at $91.1 million.
Non-interest expenses also decreased by 28.4% to $66.6 million as a result of fewer investments in system upgrades and other facilities, partially offset by a $503,000 final allocation of credits through the FDIC assessment.
Loans to small businesses through the U.S. Small Business Administration’s Paycheck Protection Program fueled a 4.6% year-over-year loan growth, with a $793 million PPP principal loan balance out of $9.4 billion total loans. This was partially offset by a decline in commercial and industrial and residential portfolios amid a low-interest rate environment, the company stated.
Total assets stood at $13 billion, a 12.2% increase over a year ago. Total deposits increased $15.2% to $10.7 billion.
The net interest margin – the difference between interest income generated and the amount of interest paid out to lenders – declined 84 basis points to 3.25%, also a function of low interest rates.
“We remain confident in the strength of our financial position as we continue to navigate through the current environment,” Christopher Oddleifson, CEO of Independent Bank Corp. and Rockland Trust Co., said in a statement.
Nancy Lavin is a PBN staff writer. You may reach her at Lavin@PBN.com.
