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In a year that included the acquisition of Blue Hills Bank, Rockland Trust Co. saw year-over-year earnings increase in 2019. But fourth-quarter results declined from the previous quarter.
The 2019 full-year net income was $165.2 million, up 35.8 percent from $121.6 million in 2018. Diluted earnings per share for 2019 were $5.03 compared to $4.40 in 2019, a 14.3 percent increase.
Christopher Oddleifson, the CEO of Rockland Trust and its holding company, Independent Bank Corp., said in a statement that 2019 was a tremendous year for the bank.
“Our outstanding 2019 performance derived from the dedication and effort of each and every one of my colleagues, and their collective outstanding commitment to our customers, the communities we serve and to each other,” Oddleifson said in the statement. “Those efforts were complemented by the Blue Hills acquisition, which we closed during the first half of 2019.”
The fourth quarter did see a decline in Rockland Trust’s earnings compared to the third quarter. The bank had $47.5 million in net income, or $1.38 per diluted share, during the fourth quarter of 2019, down from $51.8 million, or $1.51 per diluted share, in the third quarter of 2019. Mark Ruggiero, Rockland Trust’s CFO and chief accounting officer, said drivers of the decline included margin pressure from the interest rate environment and timing over net charge-off and recovery activity and related provisioning.
Ruggiero said net loans decreased slightly in the fourth quarter, with the loan closing activity being offset by accelerated payoffs and paydowns. The payoff and paydown activity for the fourth quarter included approximately $100 million associated with acquired Blue Hills commercial loans and another $60 million in the Blue Hills residential portfolio, Ruggiero said, including borrowers taking advantage of favorable conditions to pursue refinancing.
Total assets decreased in the fourth quarter by $143.5 million to $11.4 billion, down 1.2 percent from the prior quarter. Including the Blue Hills acquisition, total assets increased by $2.5 billion, or 28.7 percent, compared to 2018.
With total assets now exceeding $10 billion, Rockland Trust will see an impact in 2020. The bank is now subject to the Durbin Amendment, the Dodd-Frank provision that restricts debit card interchange fees. Ruggiero said the bank’s net revenue will see an approximately $5 million to $5.5 million reduction during the last six months of 2020 as a result.
The new year will also see Rockland Trust’s continued expansion into Worcester. The first branch will open in February, and COO Robert Cozzone said two more branches could open in 2020.
“There are a number of meaningful initiatives in the city itself that we expect to drive additional growth in addition to what they’ve already seen in the last couple of years, so we’re really excited about this opportunity,” Cozzone said during the conference call. “And the key there was finding the right people, and we’ve been fortunate to find a number of Worcester-based individuals with a long history of being successful in that market.”
