The parent company of Rockland Trust reported another quarter of record earnings in what it sees as a strong economic environment. But loan demand did not pan out as expected, particularly in the upper end of the market.

The company reported first quarter net income of $27.6 million, or $1 per diluted share, an increase of almost $7 million from the first quarter of 2017. Net interest income for the quarter was $68.5 million, an increase of more than $8 million from the first quarter of 2017. The margin grew 26 basis points year-over-year, reaching 3.77 percent.

“During the first quarter of 2018 Rockland Trust Co. set another quarterly earnings per share record and delivered a strong return on both assets and equity for our shareholders,” Christopher Oddleifson, CEO of Rockland Trust Co. and its parent Independent Bank Corp., said in a statement. “Our increasing net interest margin is a direct result of loan and deposit pricing strategies implemented to prepare for a rising interest rate environment, and asset quality remains pristine as we continue our disciplined approach to loan origination, underwriting and approval.”

Total assets reached almost $8.1 billion, up about $350 million year-over-year. Total loans at the end of the quarter were $6.36 billion, up almost $300 million year-over-year, led by modest gains in every category.

While commercial real estate loans are up about $75 million year-over-year, the portfolio is down from the linked quarter.

“The competitive environment seems to have intensified since year end and bears watching,” Rockland Trust CFO Robert Cozzone said on a recent earnings call.

Oddleifson said the bank is seeing competition from small to mid-sized banks, particularly the mutuals, which are looking to grow fast.

“The good news is we are still very much in deal flow and have walked away when the pricing became too low,” he said, adding that the bank has built up a commercial pipeline of roughly $125 million.

When asked about merger and acquisition activity, Oddleifson said there’s not a lot of opportunities right now, but he thinks in the future there could be opportunities in Rhode Island and New Hampshire.

“M&A activity will continue over time and we will see the decline of banks over the next 20 years,” he said. “Right now it’s almost a random event.”

Total non-interest income was up for the quarter, reaching almost $20 million, but down from the linked quarter. The provision for loan losses in the quarter was $500,000, down $100,000 from the first quarter of last year. Nonperforming assets made up .59 percent of total assets.