The sign on a Rockland Trust branch in downtown Boston. Photo by James Sanna | Banker & Tradesman Staff / file
Rockland Trust executives say they’re hopeful that its commercial real estate pipeline will boost the quality of the bank’s portfolio.
The bank’s commercial and industrial loan portfolio grew $79.4 million (6.8 percent annualized) in the second quarter, inclusive of $36.8 million in runoff attributable to Rockland’s exit from the dealer finance business. The total consumer real estate portfolio increased $63.2 million (6.1 percent annualized), and residential balances increased $28.1 million (4.0 percent annualized).
“Although commercial real estate loan growth has been a challenge, we are originating a significant volume of new loans to offset the paydowns in amortization in this portfolio, and that continues to fuel the cash flow and repricing benefit dynamic in our loan yields,” Rockland Trust Chief Financial Officer Mark Ruggiero said in Rockland Trust’s second-quarter earnings call Friday morning.
Nonperforming loans increased to $103.6 million in the second quarter, as compared to $96.6 million in the prior quarter and an increase from $86.6 million in the third quarter of 2025. Executives said they hope a $22 million office NPL will go current by the end of the year.
Delinquencies as a percentage of total loans increased two basis points from the prior quarter to 0.43 percent. This is also an increase from 0.20 percent from a year ago. Net charge-offs decreased to $0.9 million, as compared to $4.8 million for the prior quarter and $6.5 million a year ago.
Total criticized and classified commercial loans of $545.6 million, or 3.9 percent of total commercial loans, decreased $29.9 million, or 5.2 percent, as compared to the prior quarter. This includes a $17 million loan and $10 million loan and the bank is seeking to refinance or get a short-term extension. Rockland also has a $5 million loan maturing in the third quarter that is anchored by a primary tenant that indicated it could leave the space, executives said on the earnings call.
“I am encouraged, though by the amount of work that we’re doing that I think is going to over the next couple of quarters hopefully bring down the office loans in our criticized and classified buckets,” CEO Jeffrey Tengel told investors Friday. “We have an awful lot of of energy around moving as many of those out as we can. We still have a lot of work to do but we’re doing the work, and I think we’ll have some positive outcomes over the second half of the year.”
