Rockland Trust Delivers Strong Q4 Earnings, Eyes Expansion Through Strategic Acquisition
In a recent conference call to discuss its fourth-quarter 2024 earnings, Independent Bank Corp., parent company of Rockland Trust, revealed solid financial results driven by net interest margin improvement, stable credit trends, and double-digit annualized growth in commercial and industrial (C&I) and small business loan segments.
CEO Jeff Tengel reported that the bank's pre-provision net revenue return on assets (ROA) was 1.48% on an operating basis, with tangible book value improving 1% from the third quarter and 6.4% from the year-ago quarter. Notably, average deposits grew at an approximate 3% annualized rate.
"Our team's continued commitment to developing and deepening customer relationships has driven these results," Tengel noted, adding that this performance reflects the company's ongoing focus on building strong relationships with its customers.
One of the key strategic priorities for Rockland Trust in 2024 was reducing its commercial real estate (CRE) concentration. While CRE and construction loan balances were essentially flat due to normal amortization and a deliberate reduction in transactional CRE business, C&I and small business loans saw growth of 4% and 12%, respectively.
At year-end, the company's CRE concentration stood at $305 million, down 2% from the third quarter. Tengel emphasized that Rockland Trust will continue to reduce transactional CRE business and free up capacity to support its legacy commercial real estate relationships.
In addition to these efforts, the bank made significant progress in expanding its C&I lending capabilities. It hired 10 new bankers in this area, reflecting the desirability of its platform and the award-winning culture of Rockland Trust. C&I loan production reached approximately $785 million, a 28% increase over the previous year.
Another notable development was the announcement of a strategic acquisition. In December, Rockland Trust entered into an agreement to acquire Enterprise Bancorp, adding density to its existing markets and expanding the franchise into Northern Massachusetts and Southern New Hampshire.
"Our franchises fit together like two puzzle pieces," Tengel observed, noting that the collective outcome of meetings with the Enterprise team across all business units has validated the assumption that their business practices mirror those of Rockland Trust. "We are even more convinced about the strategic and financial merits of this deal."
Finally, the company finalized plans to upgrade its core FIS processing platform, which will improve technology infrastructure, enhance efficiency, and support future growth.
