| Independent Bank Corp. posted double-digit gains in the third quarter following its assimilation into the Greater Boston market, and recent remarks by the company’s leadership indicate the its appetite for acquisition is far from sated.
Net income for the parent company of Rockland Trust in the quarter ended Sept. 30 totaled $18.6 million, representing an 18 percent year-over-year increase from $15.7 million in the year-ago period. That represented a 6.5 percent increase from the prior quarter, the first full quarter following its acquisition of Peoples Federal Savings Bank. Net interest income increased 2.3 percent from the prior quarter and 13.8 percent from the year-ago quarter to total $55 million.
The bank’s commercial loan portfolio increased 1.3 percent from the prior quarter and 10.8 percent from the year-ago quarter to $3.9 billion. Residential real estate ticked down slightly from the prior quarter, but represented a 21.4 percent increase from the year-ago quarter at $651.9 million. Total consumer real estate, which also included home equity loans, rose 1 percent from the prior quarter and 12.1 percent from the year-ago quarter to $1.6 million.
Responding to an investor’s question about construction lending during the company’s third-quarter earnings call, Chief Financial Officer Rob Cozzone commented, “There continues to be lots of activity within our footprint and especially within the Greater Boston area, some of which makes us a little bit nervous and we’re not interested in participating in.”
“We have been pleased with the disciplined growth that we’ve had to date,” he said. “But there certainly is some concerning signs within construction and within commercial real estate in general within the Greater Boston area.”
Total assets declined slightly from the prior quarter to $7.1 billion, but increased 11.8 percent when compared with the year-ago period.
Total deposits declined 0.9 percent from the prior quarter and increased 11.6 percent over the year-ago quarter to $5.9 billion.
Noninterest income declined $1 million, or 5 percent, from the prior quarter to $19.2 million. While deposit fees and mortgage banking income increased, investment management income fell $547,000, or 9.9 percent, from the prior quarter, which the company attributed to seasonal tax preparation fees earned in the second quarter as well as a market-driven decline in assets under administration.
When asked by an investor whether the company would consider an acquisition in the investment management space, President and CEO Christopher Oddleifson responded with a clear yes – with a caveat, however.
“The difficulty in that space is, cultural integration is profoundly different when you’re thinking about integrating RIAs versus integrating banks,” he said. “I’d say yes, but it’s a lot tougher to do than the bank space.”
And now that Rockland Trust has digested its recent acquisition of Peoples, the investor pressed, would it consider another bank acquisition?
“I’d love to do more acquisitions, but banks are sold, not bought,” Oddleifson said. “If a board of directors decides that’s something they want to explore, I hope I’m at the table.”
