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Rockland Trust Co. saw its second quarter net income rise to $62.6 million compared to the $61.2 million in the first quarter and $61.77 million in the second quarter of last year, results executives credited to “healthy” loan volumes, “strong” fee income and “disciplined” expense management.

The bank’s return on average assets and return on average common equity was at 1.29 percent and 8.78 percent, respectively, for the second quarter of 2023, as compared to 1.30 percent and 8.63 percent, respectively, from the previous quarter.

“Our solid performance reflects both the underlying strength of our core franchise and our resilience to the current difficult operating environment. Our sound business fundamentals, including disciplined underwriting and comprehensive capital and liquidity planning, continue to serve us well and position us to take advantage of the right opportunities.” CEO Jeffrey Tengel said in a statement. “Our focus will continue to center on capitalizing on our diverse business model and maintaining a laser focus on cultivating and expanding our valuable core relationships.”

The bank’s net interest income decreased 4.1 percent to $152.5 million compared to $159 million for the prior quarter due to increased wholesale borrowings and higher deposit costs, resulting in a 25-basis-point reduction in its net interest margin to 3.54 percent.

“Though deposit rate pressures will persist, on a positive note, the relative stability of deposit balances experienced in the second quarter along with asset repricing and hedge maturities benefit should provide a path to future margin stability in the second half,” Mark Ruggiero, Rockland’s Chief Financial and Accounting Officer, said during the bank’s earnings call Friday.

Deposits decreased slightly by 0.2 percent or $24.1 million to $15.2 billion in the second quarter compared to the first quarter. Total loans increased by 1.4 percent or $192 million to $14.1 billion from $13.9 billion in the first quarter.

Total assets ended at $19.4 billion by the end of June, which was unchanged from the first quarter, but was 2.9 percent less than the $19.98 billion in the second quarter of last year. This was driven primarily by lower cash balances and associated deposit levels.

The bank reported that it has a total of $1.07 billion non-owner occupied commercial real estate office loan portfolio, and a single, non-performing, $14.2 million office property loan. The loan only became classified as non-performing in the last 60 days, the bank said, and executives noted Rockland and the borrower are still in negotiations. Ruggiero said that the bank will continue to do enhance monitoring on its CRE office portfolio – $85 million of it is tied to buildings in Boston’s Financial District or Back Bay – and will remain “cautious” on its lending.

For the whole of 2023, Rockland Trust is expecting flat loan balances, stabilized deposits, net interest margin around the 3.35 percent to 3.40 percent range and higher loan-loss provisions driven by concern about the broader office market.