Banker & Tradesman file photo

While Rockland Trust Co. saw earnings drop more than 26 percent in 2020 compared to 2019, the amount of its loan portfolio receiving COVID-related modifications improved in the fourth quarter.

The bank’s full-year 2020 net income was $121.2 million, or $3.64 on a diluted per share basis, down 26.6 percent compared to 2019, when earnings were $165.17 million, or $5.03 per diluted share.

Rockland Trust’s fourth quarter results were affected by $5.2 million in pretax costs for two upcoming branch closures and the sale of non-strategic investments from the bank’s 2019 acquisition of Blue Hills Bank.

Fourth quarter net income was $34.6 million, or $1.05 per diluted share, compared to net income of $34.9 million, or $1.06 per diluted share, in the third quarter and $47.47 million, or $1.38 per diluted share, in the fourth quarter of 2019.

While attributing the full year 2020 results in part to the negative impact of the coronavirus pandemic and the elevated provision for credit losses, Rockland Trust did not need to make a credit loss provision in the fourth quarter. The bank in the third quarter had a $7.5 million provision expense.

“Our core fundamentals served us well as we encountered the unprecedented turbulence and uncertainty brought on by the COVID-19 pandemic and our 2020 results reflect on the strength of our fundamentals. We are confident we are well positioned to continue to successfully navigate forward as we enter 2021,” Christopher Oddleifson, Rockland Trust’s CEO, said in the bank’s fourth quarter earnings statement. “Throughout 2020 as we faced the many challenges of the COVID-19 pandemic, we demonstrated an unwavering commitment to one another, our customers and our communities.”

The bank at the end of December had 1.8 percent of its $9.39 billion loan portfolio receiving COVID-related modifications. Most of those deferrals were in the commercial real estate portfolio. The CRE portfolio saw 3.5 percent of the loan balance, $164.19 million, receiving deferrals. At the end of September, 6.2 percent of the total loan portfolio and 10.3 percent of the CRE portfolio had COVID-related deferrals.

Even though certain industries remain at risk from the pandemic, Rockland Trust has seen lending opportunities for its CRE portfolio. Gerry Nadeau, Rockland Trust’s president and chief commercial banking officer, said during the bank’s conference call to discuss the fourth quarter earnings that the bank saw the most opportunity in suburban apartments, industrial warehouses, and flexible and mixed-use spaces.

Nadeau said it was too soon to know how strong the demand for CRE beyond lab space, though he added that companies bringing capacity back to the U.S. from overseas could benefit Massachusetts.

He also said in response to an analyst’s question about Boston apartments around the city’s colleges that vacancies had improved, but added that the bank was taking a cautious approach to the Boston market.