Record Quarterly Earnings and EPS

ROCKLAND, Mass. -- (Business Wire)

Independent Bank Corp. (Nasdaq Global Select Market: INDB), parent of Rockland Trust Company, today announced 2026 third quarter net income of $89.7 million, or $1.90 per diluted share, as compared to 2026 second quarter net income of $81.8 million, or $1.70 per diluted share.

CEO STATEMENT

“In an operating environment with many moving pieces, our disciplined approach and core fundamentals drove a 12% increase in our diluted earnings per share versus the prior quarter results,” said Jeffrey Tengel, Chief Executive Officer of Independent Bank Corp. and Rockland Trust Company. “I want to thank my colleagues for their steadfast commitment to servicing our customers day in and day out. Our focus on strong community banking drove a 1.42% return on average assets and a 15.43% return on average tangible common equity, as loan and average deposit growth improved, we maintained our net interest margin while growing overall net interest income, credit quality remained stable, expenses were well managed, and we prudently returned excess capital to shareholders.”

FINANCIAL HIGHLIGHTS

• The Company generated a return on average assets and a return on average common equity of 1.42% and 10.13%, respectively, for the third quarter of 2026, as compared to 1.34% and 9.24%, respectively, for the prior quarter.
• The Company repurchased approximately 679,000 shares for $57.4 million during the third quarter of 2026.
• Net interest income increased $9.7 million as compared to the prior quarter.
• The Company’s net interest margin of 3.89% increased 4 basis points compared to the prior quarter, while the adjusted margin remained consistent with the prior quarter at 3.76%⁽¹⁾.
• Deposit balances increased $135.3 million, or 0.7%, to $20.5 billion at September 30, 2026, compared to the prior quarter, with core deposits increasing $232.4 million, or 1.4%, compared to the prior quarter.
• Loan balances of $18.6 billion at September 30, 2026 increased $158.2 million, or 0.9%, compared to the prior quarter.
• Wealth management assets under administration of $9.5 billion at September 30, 2026 increased modestly as compared to June 30, 2026.
• The Company’s third quarter results included $2.2 million in one-time expenses associated with its upcoming core conversion, as compared to $2.1 million of such costs in the prior quarter.

BALANCE SHEET

Total assets of $25.0 billion at September 30, 2026 increased $38.2 million, or 0.2%, compared to the prior quarter.

Total loans of $18.6 billion at September 30, 2026 increased $158.2 million, or 0.9%, compared to the prior quarter:

• The commercial and industrial portfolio grew $49.0 million, or 1.0% (4.1% annualized), despite $11.5 million in runoff attributable to the Company’s strategic exit from the dealer finance business.
• Commercial real estate and construction balances increased $30.8 million, or 0.3%, as robust construction fundings were partially offset by net paydowns of real estate balances.
• The total consumer real estate portfolio increased $80.2 million, or 1.9% (7.6% annualized), fueled by strong home equity demand, with balances up $40.9 million, or 3.0% (12.1% annualized), while residential mortgage balances increased by $39.3 million, or 1.4% (5.4% annualized).

Total deposits increased by $135.3 million, or 0.7%, to $20.5 billion at September 30, 2026, as compared to the prior quarter, while average balances rose by $633.8 million, or 3.2%, for the third quarter:

• Period end deposit growth was fueled primarily by inflows from business and consumer accounts, partially offset by seasonal municipal outflows.
• Overall core deposits comprised 84.6% of total deposits at September 30, 2026, as compared to 84.1% at June 30, 2026.
• Total noninterest bearing demand deposits were 28.1% and 28.0% of total deposits at September 30, 2026 and June 30, 2026, respectively.
• The total cost of deposits rose by 6 basis points to 1.42% as compared to the prior quarter.

Total period end borrowings decreased by $74.3 million, or 10.6%, during the third quarter of 2026, primarily reflecting approximately $100 million in net paydowns on Federal Home Loan Bank borrowings and a $100 million repayment on a working capital line of credit, partially offset by a $125 million term loan advance.

The Company’s total securities portfolio increased by $192.8 million, or 5.8%, to $3.5 billion at September 30, 2026:

• Available for sale purchases totaled $508.2 million during the third quarter and were partially offset by $272.4 million of maturities, calls, and paydowns across the available for sale and held to maturity portfolios during the quarter, as well as $78.4 million of unrealized losses recognized in the available for sale portfolio.
• Total securities represented 14.0% and 13.3% of total assets at September 30, 2026 and June 30, 2026, respectively.

Stockholders’ equity at September 30, 2026 decreased $60.0 million, or 1.7%, compared to June 30, 2026, as strong earnings were offset by the impact of share repurchases, dividends, and unrealized losses on available for sale securities recognized in other comprehensive income during the quarter:

• The Company repurchased approximately 679,000 shares for $57.4 million during the third quarter of 2026 at an average price of $84.60 per share. As of September 30, 2026, the Company had approximately $93 million of remaining repurchase authorization under its previously announced $200 million stock buyback plan adopted as of April 30, 2026.
• The Company’s ratio of common equity to assets of 13.80% at September 30, 2026 represented a decrease of 26 basis points from June 30, 2026.
• The Company’s ratio of tangible common equity to tangible assets of 9.44% at September 30, 2026 represented a decrease of 25 basis points from the prior quarter and a decrease of 31 basis points from the year ago period⁽¹⁾.
• The Company’s book value per share decreased by $0.22, or 0.3%, to $73.54 at September 30, 2026 as compared to the prior quarter, while increasing $2.30 from the year ago period.
• The Company’s tangible book value per share at September 30, 2026 decreased by $0.45, or 0.9%, from the prior quarter to $47.89, and increased by 3.0% from the year ago period⁽¹⁾.

NET INTEREST INCOME

Net interest income of $220.7 million for the third quarter of 2026 increased $9.7 million, or 4.6%, when compared to the prior quarter:

• Average interest-earning assets increased by $514.0 million, as increased deposits were primarily deployed into securities and interest-earning cash.
• The net interest margin of 3.89% increased 4 basis points compared to the prior quarter, as the benefit of asset repricing and a 4 basis point increase in purchase accounting accretion were partially offset by higher deposit costs. Excluding purchase accounting accretion and other non-core items, the adjusted margin of 3.76%⁽¹⁾ remained flat with the prior quarter.
• Total loan yields increased 11 basis points to 5.80% from 5.69%, driven primarily by loan repricing benefit and higher purchase accounting accretion compared to the prior quarter. Excluding purchase accounting accretion and other non-core items, the adjusted loan yield⁽¹⁾ increased 6 basis points during the quarter. Securities yields increased 23 basis points to 3.36% compared to the prior quarter, reflecting the impact of higher-yielding new purchases.
• The Company’s overall cost of funding increased 4 basis points to 1.56% for the third quarter of 2026.

NONINTEREST INCOME

Noninterest income of $41.3 million for the third quarter of 2026 represented a decrease of $1.1 million, or 2.6%, as compared to the prior quarter. Significant changes in noninterest income for the third quarter of 2026 compared to the prior quarter included the following:

• Service charges increased by $555,000, or 5.9%, driven primarily by higher overdraft fees.
• Overall investment and advisory income decreased $463,000, or 3.1%, driven primarily by a decrease in seasonal tax preparation fees compared to the prior quarter. Total assets under administration of $9.5 billion increased by $35.8 million, or 0.4%, as of September 30, 2026 compared to June 30, 2026.
• Mortgage banking income decreased by $243,000, or 20.7%, reflecting decreased saleable volume.
• The Company received proceeds on life insurance policies resulting in gains of $180,000 and $672,000 for the quarters ended September 30, 2026 and June 30, 2026, respectively.
• Loan level derivative income decreased by $518,000, or 39.3%, due primarily to lower demand.

NONINTEREST EXPENSE

Noninterest expense of $138.4 million for the third quarter of 2026 represented a decrease of $1.9 million, or 1.3%, as compared to the prior quarter. Significant changes in noninterest expense for the third quarter of 2026 compared to the prior quarter included the following:

• Salaries and employee benefits increased by $1.3 million, or 1.7%, driven primarily by increased incentive compensation and retirement benefit costs, partially offset by decreased split dollar insurance valuations and medical plan insurance expense.
• Occupancy and equipment expenses decreased by $339,000, or 2.1%, driven primarily by decreases in general maintenance costs, partially offset by increases in office equipment expenses.
• FDIC assessment decreased by $623,000, or 19.7%, reflecting the benefit of a lower assessment rate.
• Other noninterest expense decreased by $1.5 million, or 4.6%, driven primarily by decreases in director equity compensation of $916,000, fraud losses of $579,000, and loan workout costs of $300,000. Other noninterest expense for the third quarter was inclusive of $2.2 million in one-time costs associated with the Company’s upcoming core conversion, as compared to $2.1 million of such costs in the prior quarter.

TAX RATE

The Company’s quarterly effective tax rate remained consistent at 23.31% for the third quarter of 2026, compared to 23.37% for the prior quarter.

ASSET QUALITY

During the third quarter, the Company’s key asset quality activity and metrics were as follows:

• Nonperforming loans increased to $125.7 million at September 30, 2026, as compared to $103.6 million at June 30, 2026, representing 0.68% and 0.56% of total loans, respectively. The increase was driven primarily by one office real estate loan.
• The third quarter provision for credit losses was $6.5 million, as compared to $6.3 million for the prior quarter, driven primarily by a specific reserve allocation on one office real estate loan that migrated to nonperforming status during the quarter.
• Net charge-offs of $1.2 million, representing 0.02% of average loans annualized, remained consistent with the prior quarter.
• Total criticized and classified commercial loans of $550.9 million, or 3.9% of total commercial loans, remained consistent with the prior quarter.
• The allowance for credit losses on total loans increased to $201.2 million at September 30, 2026, compared to $195.9 million at June 30, 2026, and represented 1.08% and 1.06% of total loans at September 30, 2026 and June 30, 2026, respectively.
• Delinquencies as a percentage of total loans increased 30 basis points from the prior quarter to 0.73% at September 30, 2026.

CONFERENCE CALL INFORMATION

Jeffrey Tengel, President and Chief Executive Officer, and Mark Ruggiero, Chief Financial Officer and Executive Vice President of Consumer Lending, will host a conference call to discuss third quarter earnings at 10:00 a.m. Eastern Time on Friday, October 16, 2026.

Participants may join the webcast by registering prior to the call via this link: https://events.q4inc.com/attendee/687573325. A replay of the webcast will be made available on the Company’s website at https://indb.rocklandtrust.com by selecting Third Quarter 2026 Earnings Call. The webcast replay will be available until October 16, 2027.

ABOUT INDEPENDENT BANK CORP.

Independent Bank Corp. (Nasdaq Global Select Market: INDB) is the holding company for Rockland Trust Company, a full-service commercial bank headquartered in Massachusetts. With retail branches in Eastern Massachusetts, Worcester County, and Southern New Hampshire, as well as commercial banking and investment management offices in Massachusetts, New Hampshire, and Rhode Island, Rockland Trust offers a wide range of banking, investment, and insurance services to individuals, families, and businesses. Rockland Trust also offers a full suite of mobile, online, and telephone banking services. Rockland Trust is an FDIC member and an Equal Housing Lender.

This press release contains certain “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995 with respect to the financial condition, results of operations and business of the Company. These statements may be identified by such forward-looking terminology as “expect,” “achieve,” “plan,” “believe,” “future,” “positioned,” “continued,” “will,” “would,” “potential,” or similar statements or variations of such terms. Actual results may differ from those contemplated by these forward-looking statements.

Factors that may cause actual results to differ materially from those contemplated by such forward-looking statements include, but are not limited to:

• adverse economic conditions in the regional and local economies within the New England region and the Company’s market area;
• events impacting the financial services industry, including high profile bank failures, and any resulting decreased confidence in banks among depositors, investors, and other counterparties, as well as competition for deposits and significant disruption, volatility and depressed valuations of equity and other securities of banks in the capital markets;
• the effects to the Company of an increasingly competitive labor market, including the possibility that the Company will have to devote significant resources to attract and retain qualified personnel;
• political and policy uncertainties, changes in U.S. and international trade policies, such as tariffs or other factors, and the potential impact of such factors on the Company and its customers, including the potential for decreases in deposits and loan demand, unanticipated loan delinquencies, loss of collateral and decreased service revenues;
• the instability or volatility in financial markets and unfavorable domestic or global general economic, political or business conditions, including international conflicts and hostilities, such as the ongoing conflict involving Israel, the U.S. and Iran;
• unanticipated loan delinquencies, loss of collateral, decreased service revenues, and other potential negative effects on the Company’s local economies or the Company’s business caused by adverse weather conditions and natural disasters, changes in climate, public health crises or other external events and any actions taken by governmental authorities in response to any such events;
• adverse changes or volatility in the local real estate market, including limitations on rent growth, increases in operating expenses, reductions in property cash flows, reductions in collateral values, and decreased investor demand, which may be exacerbated by legislative or regulatory actions such as rent control or tenant protection laws;
• changes in interest rates and any resulting impact on interest earning assets and/or interest bearing liabilities, the level of voluntary prepayments on loans and the receipt of payments on mortgage-backed securities, decreased loan demand or increased difficulty in the ability of borrowers to repay variable rate loans;
• risks related to the Company’s acquisition activities, including disruption to current plans and operations; difficulties in customer and employee retention; fees, expenses and charges related to these transactions being significantly higher than anticipated; impairment of goodwill and/or other intangibles; and the Company’s inability to achieve expected revenues, cost savings, synergies, and other benefits at levels or within the timeframes originally anticipated;
• the effect of laws, regulations, new requirements or expectations, or additional regulatory oversight in the highly regulated financial services industry, and the resulting need to invest in technology to meet heightened regulatory expectations, increased costs of compliance or required adjustments to strategy;
• changes in trade, monetary and fiscal policies and laws, including interest rate policies of the Board of Governors of the Federal Reserve System;
• higher than expected tax expense, including as a result of failure to comply with general tax laws and changes in tax laws;
• increased competition in the Company’s market areas, including competition that could impact deposit gathering, retention of deposits and the cost of deposits, increased competition due to the demand for innovative products and service offerings, and competition from non-depository institutions which may be subject to fewer regulatory constraints and lower cost structures;
• a deterioration in the conditions of the securities markets;
• a deterioration of the credit rating for U.S. long-term sovereign debt or uncertainties surrounding the federal budget;
• inability to adapt to changes in information technology, including changes to industry accepted delivery models driven by a migration to the internet as a means of service delivery, including any inability to effectively implement new technology-driven products, such as artificial intelligence (“AI”);
• electronic or other fraudulent activity within the financial services industry, especially in the commercial banking sector;
• adverse changes in consumer spending and savings habits;
• the effect of laws and regulations regarding the financial services industry, including the need to invest in technology to meet heightened regulatory expectations or the introduction of new requirements or expectations resulting in increased costs of compliance or required adjustments to strategy;
• changes in laws and regulations (including laws and regulations concerning taxes, banking, securities and insurance) generally applicable to the Company’s business and the associated costs of such changes;
• the Company’s potential judgments, claims, damages, penalties, fines and reputational damage resulting from pending or future litigation and regulatory and government actions and the adequacy of the Company's reserves and insurance coverage for legal matters;
• changes in accounting policies, practices and standards, as may be adopted by the regulatory agencies as well as the Public Company Accounting Oversight Board, the Financial Accounting Standards Board, and other accounting standard setters;
• operational risks related to the Company and its customers’ reliance on information technology; cyber threats, attacks, intrusions, and fraud; and outages or other issues impacting the Company or its third party service providers which could lead to interruptions or disruptions of the Company’s operating systems, including systems that are customer facing, and adversely impact the Company’s business; including the Company’s ability to successfully complete and integrate its core system conversion and to do so within the anticipated timeframe, including its reliance on third-party providers in connection with that conversion, as well as its ability to effectively manage any related operational disruptions, customer impacts, data conversion issues, or related internal control issues;
• risks related to the development and use of AI by the Company, its third-party vendors, clients and counterparties; and
• any unexpected material adverse changes in the Company’s operations or earnings.

The Company cautions readers not to place undue reliance on any forward-looking statements as the Company’s business and its forward-looking statements involve substantial known and unknown risks and uncertainties described above and in the Company’s most recent Annual Report on Form 10-K and subsequent Quarterly Reports on Form 10-Q (“Risk Factors”). Except as required by law, the Company disclaims any intent or obligation to update publicly any such forward-looking statements, whether in response to new information, future events or otherwise. Any public statements or disclosures by the Company following this release which modify or impact any of the forward-looking statements contained in this release will be deemed to modify or supersede such statements in this release. In addition to the information set forth in this press release, you should carefully consider the Risk Factors.

This press release and the appendices attached to it contain financial information determined by methods other than in accordance with accounting principles generally accepted in the United States of America (“GAAP”). This information may include operating net income and operating earnings per share (“EPS”), operating return on average assets, operating return on average common equity, operating return on average tangible common equity, adjusted net interest margin (“adjusted margin”) and the associated adjusted loan yield (which is calculated by dividing annualized interest income on loans, plus or minus non-core or other adjustments, by average loans), tangible book value per share and the tangible common equity ratio.

Operating net income, operating EPS, operating return on average assets, and operating return on average common equity exclude items that management believes are unrelated to the Company’s core banking business such as merger and acquisition expenses, and other items, if applicable. Management uses operating net income and related ratios and operating EPS to measure the strength of the Company’s core banking business and to identify trends that may to some extent be obscured by such items. Management reviews its adjusted margin and adjusted loan yield to determine any items that may impact these metrics that may be one-time in nature or not reflective of the core operating environment, such as significant purchase accounting adjustments or other adjustments such as nonaccrual interest reversals/recoveries and prepayment penalties. Management believes that adjusting for these items to arrive at an adjusted margin and adjusted loan yield provides additional insight into the operating environment and how management decisions impact the net interest margin.

Management also supplements its evaluation of financial performance with analysis of tangible book value per share (which is computed by dividing stockholders’ equity less goodwill and identifiable intangible assets, or “tangible common equity,” by common shares outstanding), the tangible common equity ratio (which is computed by dividing tangible common equity by “tangible assets,” defined as total assets less goodwill and other intangibles), and return on average tangible common equity (which is computed by dividing net income by average tangible common equity). The Company has included information on tangible book value per share, the tangible common equity ratio and return on average tangible common equity because management believes that investors may find it useful to have access to the same analytical tools used by management. As a result of merger and acquisition activity, the Company has recognized goodwill and other intangible assets in conjunction with business combination accounting principles. Excluding the impact of goodwill and other intangibles in measuring asset and capital values for the ratios provided, along with other bank standard capital ratios, provides a framework to compare the capital adequacy of the Company to other companies in the financial services industry.

These non-GAAP measures should not be viewed as a substitute for operating results and other financial measures determined in accordance with GAAP. An item which management excludes when computing these non-GAAP measures can be of substantial importance to the Company’s results for any particular quarter or year. The Company’s non-GAAP performance measures, including operating net income, operating EPS, operating return on average assets, operating return on average common equity, adjusted margin and associated adjusted loan yield, tangible book value per share and the tangible common equity ratio, are not necessarily comparable to non-GAAP performance measures which may be presented by other companies.

Category: Earnings Releases