GAAP Net Income: $42.9 million in the third quarter of 2024.
Diluted EPS: $1.01 in Q3 2024.
Return on Assets (ROA): 0.88% in Q3 2024.
Average return on common equity: 5.75% in Q3 2024.
Return on average tangible common equity: 8.67% in Q3 2024.
Tangible book value per share: +$1.38 in Q3 2024.
Deposit Growth: Average deposits in Q3 2024 grew by 2.2%, or nearly 9%, annually.
Net interest margin: improved 4 basis points to 3.29% in Q3 2024.
Assets under management: reached a record high of $7.2 billion as of September 30, 2024.
Office Loan Special Reserve: $22.4 million established for large office relationships.
Commercial Loan Pipeline: $294 million as of September 30, 2024, up 9% sequentially.
Tax rate: 22.4% in Q3 2024.
Release date: October 18, 2024
For a complete record of financial statements, see Complete Record of Financial Statements.
good points
Independent Bank Corp. (NASDAQ:INDB) reported improved margins and continued deposit growth in Q3 2024.
The bank’s net income before provisions and return on assets rose to 1.54% from 1.47% in the previous quarter.
Specific book value per share increased by 9% year-on-year, reflecting sustainable capital growth.
Assets under management in the bank’s wealth management business reached a record high of $7.2 billion.
INDB remains focused on its strategic priorities, including diversification of its loan portfolio and prudent growth of deposits.
Minus points
A large commercial real estate office loan became a non-performing loan, impacting third quarter results.
The bank set up a hefty $22.4 million reserve for stressed office loans to account for possible future losses.
Loan balances decreased $40 million, or 0.3%, in the quarter primarily due to payoff activity in construction accounting.
The bank’s net interest margin is expected to tighten slightly in the near term due to expected Fed rate cuts.
There is uncertainty regarding the resolution of a $30 million syndicated loan that has been downgraded to classified status.
Q&A highlights
Q: Can you tell us more about the $30 million credit that was downgraded to classified status? A: Jeff Tangle, CEO: This loan is part of a syndicated group, and extensions are uncertain due to the loss of a tenant. Any extension would require agreement within the banking group, but the situation remains fluid.
Q: Regarding the $54.6 million loan, are the borrowers cooperative or is the loan likely to be sold or foreclosed? A: Jeff Tangle, CEO: The sponsor does not appear to be interested in funding and the potential This indicates that there is a problem. We are continuing our relationship with our sponsor and are considering all options, including sale or foreclosure of the notes.
story continues
Q: How does your office loan reserve compare to your competitors? And do you have any plans to increase it? A: Mark Ruggiero, CFO: Our reserves are approximately 5.5% due to certain large reserves. % is. Excluding these, it is about 2.5%. We are satisfied with our risk ratings and risk allocations, which reflect the performance of our portfolio.
Q: Given our capital position, what do you think about security restructuring and share repurchases? A: Mark Ruggiero, CFO: We are focused on tangible book value accretion, and the reorganization will help us do the same. evaluation results are often obtained. We have depleted our securities book and are now in a better liquidity position.
Q: Given market conditions, how do you assess acquisition potential in 2025? A: Jeff Tangle, CEO: There are few targets in the market, but if the right opportunity arises, we can make an acquisition. are in an advantageous position. We will not rush into a deal unless it fits our strategy and provides synergies.
For a complete record of financial statements, see Complete Record of Financial Statements.
This article first appeared on GuruFocus.
