PROVIDENCE – Independent Bank Corp., the parent company of Rockland Trust Co., brought in a $34.9 million profit in the third quarter, the company announced Thursday.
Third-quarter earnings represent a 32.7% decline year over year, primarily driven by continued efforts to shore up provisions for bad loans anticipated under the pandemic, the company stated. The company allocated $7.5 million for credit losses, a provision which was zero a year ago.
Diluted earnings per share fell 45 cents year over year to $1.06.
Total revenue of $127.3 million represented a 16% year-over-year decrease, driven by decreases in a variety of interest income sources as a result of “margin compression” in a low-interest rate environment: interest in federal funds sold and short-term investments, interest and fees on loans, and interest on loans held for sale.
Net interest income – the difference between interest earned on assets such as loans, mortgages and securities and interest paid out to customer deposits – fell 13.1% year over year to $90.9 million.
Noninterest income also dropped, by 7.8%, to $29.3 million due to drops in interchange and ATM fees as a result of new federal requirements on transaction fees because the company crossed the $10 billion asset threshold. This was partially offset by a 94.2% spike in mortgage banking activities rom increased gain on sale of loans and strong demand in a low interest rate-environment, the company stated.
Non-interest expenses totaled $66.7 million, a 1.3% year-over-year increase which included a 2.6% cut to salaries and employee benefits. The company also had million in merger and acquisition expenses a year ago due to the acquisition of Blue Hills Bank.
Total assets stood at $13 billion, a 12.4% increase over a year ago due to growth in commercial and industrial loans. Total loans of $9.4 billion represented a 5.3% jump over a year ago, though commercial and industrial loans spiked 47.3%.
Total deposits increased 16.4% to $10.9 billion, with a 35% increase in demand deposits and a 22.3% increase in savings and interest checking accounts.
Net interest margin the difference between interest income generated and the amount of interest paid out to lenders – declined 90 basis points to 3.13%.
“Our financial position remains strong. Our solid fundamentals entering the COVID-19 pandemic continue to serve us as we navigate the ongoing impacts of the pandemic,” 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.
