Banker & Tradesman file photo

Rockland Trust saw deposits drop by 3.8 percent during the first quarter even as the bank added new customers during the quarter.

Total deposits at the end of the first quarter were $15.27 billion, down $606.8 million from $15.88 billion at the end of 2022. Deposits at the end of the first quarter 2022 totaled $16.76 billion.

Mark Ruggiero, Rockland Trust’s chief financial officer, said during the bank’s first quarter earnings call on Friday that several factors drove the drop in deposits, including customers seeking FDIC insurance protection.

The bank at the end of the first quarter had an estimated $4.68 billion in uninsured deposits compared to $5.26 billion at the end of 2022. Of that first quarter amount, $659 million represented municipal deposits that the bank has collateralized compared to $605 million in deposits secured by collateral at the end of 2022. Ruggiero said 25.8 percent of deposits in the first quarter were either insured or collateralized.

Rockland Trust also saw $78 million move from deposits into the bank’s wealth management division, Ruggiero said. Other factors that he said drove the decline in deposits included first quarter seasonal trends, the competitive rate environment and inflationary pressures prompting customers to use excess liquidity.

“The level of deposit outflows attributable to lost households remains very low and is consistent with historical levels of attrition,” Ruggiero said.

The bank did see the number of households grow during the quarter by 0.5 percent, Ruggiero said, adding that this growth gave Rockland Trust a record level of new deposits attributable to new households.

Rockland Trust’s first quarter net income was $61.2 million, or $1.36 per diluted share, compared to $53.1 million, $1.12 per diluted share, in the first quarter of 2022. Earnings in the fourth quarter of 2022 had been $77.04 million, or $1.69 per diluted share.

Total assets were $19.4 billion compared to $19.29 billion at the end of 2022 and $20.16 billion in the first quarter of 2022.

Rockland Trust’s total loans were $13.95 billion at the end of the fourth quarter compared to $13.93 billion at the end of the fourth quarter and $13.58 billion at the end of first quarter of 2022.

In response to an analyst’s question about factors driving slow loan growth, Rockland Trust’s CEO Jeffrey Tengel said the bank has not changed its disciplined approach to credit and pricing. He instead attributed the limited loan growth to less demand from customers.

“I think companies are being a bit more cautious,” Tengel said.

This was Tengel’s first earnings call as the bank’s CEO. He took over the leadership role in early February when previous CEO Christopher Oddleifson stepped down ahead of his retirement later this year.

In response to an analyst’s question, Tengel said he believed mergers and acquisitions are still possible in the current economic environment, though he noted they might take longer with regulators.

“I think our M&A strategy is going to look very similar to what it was during Chris’ tenure here,” Tengel said. “It would be filling in existing markets where we’re already doing business with or in adjacent markets that would really begin to round out our franchise.”