PROVIDENCE – Independent Bank Corp. saw quarterly earnings increase 80% thanks to higher interest rates, the company reported on Thursday.
The parent company for Rockland Trust Co. brought in a $72 million profit for the quarter that ended Sept. 30, compared with the $40 million earnings for the third quarter of 2021. Recent interest rate hikes were the primary driver, increasing interest income by 82.7% to $170 million.
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The company’s late 2021 acquisition of Meridian Bancorp Inc., and its subsidiary East Boston Savings Bank, also boosted its balance sheet.
Earnings per diluted share increased by 36 cents to $1.57 per share.
Higher interest income was partially offset by an increase in interest-related expenses, also reflecting the higher interest rate environment. The $7.4 million in quarterly interest expenses was two-and-a-half times higher than a year ago.
Net interest margin – the difference between interest income generated and the amount of interest paid out to lenders – jumped 86 basis points to 3.64%.
The company also added $3 million to its loan loss provisions, mirroring moves made by banks nationwide in anticipation of an economic recession. By contrast, the company released $10 million from its reserves in the third quarter of 2021.
Non-interest income of $28.2 million was up 6.6% from a year ago, with gains in deposit account, interchange and ATM fees, which were partially offset by a steep drop in mortgage banking income.
Non-interest expenses increased 28% to $92.7 million, including a 24.8% hike to employee salary and benefits costs and a 43.8% rise in occupancy and equipment costs.
Quarterly assets of $19.7 billion marked a 35.6% rise year over year, driven by growth of commercial construction, commercial real estate and home equity loans. Total loans rose 55.5% to $13.7 billion.
Quarterly deposits stood at $16.3 billion, up 33.3%, with growth across all deposit types thanks to the Meridian acquisition.
While based in Rockland, Mass., Rockland Trust operates a commercial lending and investment office in Providence, and has bank branches in Seekonk and Attleboro.
“The strength of our third quarter performance is attributable to our long-term, sustained focus on building core relationships and disciplined growth combined with astute balance sheet management,” Christopher Oddleifson, CEO of Independent Bank Corp. and Rockland Trust Co., said in a statement. “Our results reflect the tireless commitment and dedication of our colleagues, who each day live out our shared mission of forging enduring relationships with each other and with the customers and communities that Rockland Trust serves.”
Nancy Lavin is a PBN staff writer. Contact her at Lavin@PBN.com.
