Independent Bank Corp. Reports Third Quarter Net Income of $34.3 Million

ROCKLAND, Mass.--(BUSINESS WIRE)-- Independent Bank Corp. (Nasdaq Global Select Market: INDB), parent of Rockland Trust Company, today announced 2025 third quarter net income of $34.3 million, or $0.69 per diluted share, as compared to 2025 second quarter net income of $51.1 million, or $1.20 per diluted share. The decrease in net income was primarily driven by higher merger-related costs and the current period provision for credit losses associated with the Company’s recently completed acquisition of Enterprise Bancorp, Inc. (“Enterprise”) and its subsidiary, Enterprise Bank. Specifically, these financial results include pre-tax merger-related costs of $23.9 million and $2.2 million for the third quarter of 2025 and second quarter of 2025, respectively. In addition, the current period provision for credit losses included $34.5 million that was attributable to the closing of the Enterprise acquisition. Excluding merger-related costs and the provision for credit losses associated with the acquisition, and their related tax effects, operating net income was $77.4 million, or $1.55 per diluted share for the third quarter of 2025 compared to operating net income of $53.5 million, or $1.25 per diluted share for the second quarter of 2025(1).

CEO STATEMENT

“Our third quarter results were exactly what we are looking for as we continue to position the bank for sustainable improved financial performance. The combination of the Enterprise acquisition and solid business activity drove significant net interest margin improvement, improved fee income results, and a meaningful drop in our efficiency ratio. We achieved these results while remaining laser focused on improving asset quality metrics,” said Jeffrey Tengel, the Chief Executive Officer of Independent Bank Corp. and Rockland Trust Company. "I can't thank my colleagues enough for the amazing efforts in completing a successful acquisition, including the conversion of Enterprise's core systems. The team is eager to take advantage of the potential opportunities that lie before us.”

ENTERPRISE BANCORP, INC.

Effective July 1, 2025, the Company completed its acquisition of Enterprise, which resulted in the addition of twenty-seven branch locations in northern Massachusetts and southern New Hampshire. The transaction included the acquisition of $3.9 billion in loans and the assumption of $4.4 billion in deposits, each at fair value. Total merger consideration was $503.1 million and consisted of $477.2 million of equity (7,478,906 shares) in Independent common stock plus $25.9 million in cash, including cash paid for stock option cancellations and fractional shares.

The following table provides the purchase price allocation of net assets acquired for this transaction:

Please refer to Appendix A for details on acquired loans and deposits along with organic changes for the periods presented.

FINANCIAL HIGHLIGHTS

• The Company generated a return on average assets and a return on average common equity of 0.55% and 3.82%, respectively, for the third quarter of 2025, as compared to 1.04% and 6.68%, respectively, for the prior quarter. On an operating basis, the Company generated a return on average assets and a return on average common equity of 1.23% and 8.63%, respectively, for the third quarter of 2025, as compared to 1.09% and 6.99%, respectively, for the prior quarter(1).
• The Company’s net interest margin of 3.62% increased 25 basis points compared to the prior quarter.
• Deposit balances of $20.3 billion at September 30, 2025 increased $4.4 billion, or 27.7%, from the second quarter of 2025, reflecting both the addition of Enterprise deposits and strong business deposit growth, partially offset by reductions in municipal balances.
• Loan balances of $18.5 billion at September 30, 2025 increased $3.9 billion, or 27.0%, from the second quarter of 2025, largely reflecting the addition of the Enterprise loan portfolio, with strong growth in commercial and industrial loans offset by reductions in commercial real estate and construction.
• Wealth management assets under administration increased to $9.2 billion at September 30, 2025, inclusive of the acquired Enterprise portfolio.
• The Company repurchased approximately 365,000 shares for $23.4 million during the third quarter.

BALANCE SHEET

Total assets of $25.0 billion at September 30, 2025 increased $4.9 billion, or 24.7% compared to the prior quarter, inclusive of the acquisition of Enterprise.

Total loans of $18.5 billion at September 30, 2025 increased $3.9 billion, or 27.0% compared to the prior quarter, inclusive of the acquired Enterprise loan portfolio, while net organic loan growth was relatively flat for the quarter:

• On the commercial side, strong organic growth within the commercial and industrial portfolio of $148.7 million, or 3.3% (13.1% annualized), was offset by decreases in the combined commercial real estate and construction categories.
• On an organic basis, the total consumer loan portfolio grew by $17.8, or 0.4% (1.7% annualized), from the prior quarter. The home equity portfolio increased by $20.9 million, or 1.7% (6.6% annualized), while increased residential mortgage volume included a higher percentage sold in the secondary market.

Total deposits increased by $4.4 billion, or 27.7%, to $20.3 billion at September 30, 2025, as compared to the prior quarter, reflecting both the addition of Enterprise deposits and modest net organic growth during the quarter:

• Net organic growth was impacted by a decrease of approximately $84.0 million, or 1.9%, in former Enterprise balances, which included the repayment of $50.0 million of brokered certificates of deposit. On a combined basis, demand deposits increased $69.2 million, or 1.2% (4.9% annualized), while interest-bearing savings and checking accounts increased $65.8 million, or 0.9% (3.7% annualized). These increases were partially offset by decreases in money market and time deposits.
• Overall core deposits comprised 83.1% of total deposits at September 30, 2025, as compared to 82.8% at June 30, 2025.
• Total noninterest bearing demand deposits remained relatively consistent at 27.8% of total deposits at September 30, 2025, as compared to 28.5% at June 30, 2025.
• The total cost of deposits for the third quarter of 1.58% increased 4 basis points compared to the prior quarter, driven primarily by the slightly higher overall costs of the acquired Enterprise deposit base.

Total period end borrowings increased by $15.9 million, or 2.1%, during the third quarter of 2025, largely reflecting the modest net impact of borrowings assumed from Enterprise:

• At the July 15, 2025 call date, the Company redeemed in full $60.0 million in subordinated notes assumed as part of the Enterprise merger. In addition, the Company also paid in full approximately $50.0 million of assumed FHLB borrowings during the quarter.

The Company’s securities portfolio increased by $629.7 million, or 23.4%, to $3.3 billion, at September 30, 2025, primarily attributable to the acquisition of the Enterprise available for sale securities portfolio:

• New purchases of $204.6 million in the available for sale portfolio were partially offset by sales, maturities, calls, and paydowns in the combined available for sale and held to maturity portfolios during the quarter.
• Total securities represented 13.3% and 13.4% of total assets at September 30, 2025 and June 30, 2025, respectively.

Stockholders’ equity at September 30, 2025 increased $472.0 million, or 15.4%, compared to June 30, 2025, due primarily to the stock issuance associated with the Enterprise acquisition along with strong earnings retention, partially offset by the impact of share repurchases made during the quarter:

• During the third quarter of 2025, the Company executed on its previously announced $150 million stock repurchase plan, buying back approximately 365,000 shares of common stock for $23.4 million at an average price per share of $64.07.
• The Company’s ratio of common equity to assets of 14.19% at September 30, 2025 represented a decrease of 115 basis points from June 30, 2025.
• The Company’s ratio of tangible common equity to tangible assets of 9.77% at September 30, 2025 represented a decrease of 115 basis points from the prior quarter and decrease of 98 basis points from the year ago period(1).
• The Company’s book value per share decreased by $0.89, or 1.2%, to $71.24 at September 30, 2025 as compared to the prior quarter.
• The Company’s tangible book value per share at September 30, 2025 declined by $2.17, or 4.4%, from the prior quarter to $46.63, and grew by 0.1% from the year ago period(1).

NET INTEREST INCOME

Net interest income for the third quarter of 2025 increased $55.8 million, or 37.9%, to $203.3 million, as compared to $147.5 million for the prior quarter, due primarily to the Enterprise acquisition.

• The net interest margin of 3.62% increased 25 basis points when compared to the prior quarter, including an 8 basis point lift from acquired loan purchase accounting accretion. The remaining increase was driven by the acquisition of a slightly higher adjusted margin from Enterprise, continued benefit from long term asset repricing, and a 5 basis point lift from discount accretion on the acquired securities.
• Total loan yields increased 21 basis points to 5.71% from 5.50%, driven primarily by a higher core yield from Enterprise, acquired loan purchase accounting, and the long-term asset repricing benefit. Securities yields increased 52 basis points to 2.84% for the current quarter as compared to the prior quarter, attributable primarily to purchase discount accretion and the repricing benefit.
• The Company’s overall cost of funding decreased slightly to 1.72% for the third quarter of 2025 as compared to 1.73% for the prior quarter despite a slightly higher cost of deposits.

NONINTEREST INCOME

Noninterest income of $40.4 million for the third quarter of 2025 represented an increase of $6.1 million, or 17.8%, as compared to the prior quarter. Significant changes in noninterest income for the third quarter of 2025 compared to the prior quarter included the following:

• Deposit account fees increased by $1.7 million, or 23.9%, driven by overdraft fees and increased volume attributable to the Enterprise acquisition.
• Interchange and ATM fees increased by $992,000, or 19.9%, primarily attributable to increased volume from the Enterprise acquisition.
• Overall investment and advisory income increased by $2.3 million, or 20.0%, primarily attributable to higher asset-based revenue resulting from the acquired Enterprise wealth management business, partially offset by a decrease in seasonal tax preparation fees compared to the prior quarter. Benefitting from the addition of $1.5 billion of Enterprise assets under administration acquired at closing, total assets under administration increased 25.3% during the quarter to $9.2 billion at September 30, 2025.
• Mortgage banking income grew $372,000, or 34.7%, due to higher origination volume and an increased percentage of closings sold versus retained.
• The increase in cash surrender value of life insurance policies rose by $591,000, or 29.0%, during the third quarter due to policies obtained in connection with the Enterprise acquisition.
• The Company received proceeds on life insurance policies resulting in a gain of $1.7 million for the second quarter of 2025. No such gains were recognized during the third quarter of 2025.
• Loan level derivative income rose by $1.2 million for the third quarter, compared to the prior quarter, reflecting increased customer demand.
• Other noninterest income increased by $649,000, or 10.9%, driven primarily by increases in credit card fee income and foreign currency exchange fees.

NONINTEREST EXPENSE

Noninterest expense of $160.8 million for the third quarter of 2025 represented an increase of $52.0 million, or 47.8%, as compared to the prior quarter. Significant changes in noninterest expense for the third quarter of 2025 compared to the prior quarter included the following:

• Salaries and employee benefits increased by $18.3 million, or 29.1%, primarily due to the increased workforce base following the Enterprise acquisition.
• Occupancy and equipment expenses increased by $1.8 million, or 13.8%, primarily attributable to the expanded branch network, real estate, and other fixed assets resulting from the Enterprise acquisition.
• FDIC assessment increased $707,000, or 29.8%, driven by an increased assessment base resulting from the Enterprise acquisition.
• Amortization of intangible assets rose by $6.2 million, driven primarily by increased amortization attributable to the core deposit, customer list, and other intangible assets established as part of the Enterprise acquisition.
• The Company incurred merger and acquisition expenses of $23.9 million in the third quarter of 2025 and $2.2 million in the second quarter of 2025, all of which were related to the Company’s acquisition of Enterprise. The majority of the merger expenses related to change in control and severance contracts, vendor and systems contract terminations, as well as legal and professional fees.
• Other noninterest expense increased by $3.5 million, or 14.3%, driven primarily by increases in software and subscriptions of $1.7 million and consultant fees of $713,000.

The Company’s tax rate was 22.81% for the third quarter of 2025 compared to 22.35% for the prior quarter.

ASSET QUALITY

During the third quarter, the Company’s key asset quality activity and metrics were as follows:

• Nonperforming loans, inclusive of approximately $24.5 million from the Enterprise acquired portfolio, increased to $86.6 million at September 30, 2025, as compared to $56.2 million at June 30, 2025, representing 0.47% and 0.39% of total loans, respectively.
• Delinquencies as a percentage of total loans increased 29 basis points from the prior quarter to 0.49% at September 30, 2025, primarily driven by the acquired Enterprise loan portfolio.
• Net charge-offs decreased to $1.8 million, as compared to $6.5 million for the prior quarter, representing 0.04% and 0.18%, respectively, of average loans annualized.
• The third quarter provision for credit losses increased to $38.5 million, as compared to $7.2 million for the prior quarter. The third quarter amount included $34.5 million related to non-purchased credit deteriorated loans acquired from Enterprise.
• The allowance for credit losses on total loans increased to $190.5 million at September 30, 2025 compared to $144.8 million at June 30, 2025, and represented 1.03% and 1.00% of total loans at September 30, 2025 and June 30, 2025, respectively.

CONFERENCE CALL INFORMATION

Jeffrey Tengel, Chief Executive Officer, and Mark Ruggiero, Chief Financial Officer and Executive Vice President of Consumer Lending, will host a conference call to discuss third quarter earnings at 10:00 a.m. Eastern Time on Friday, October 17, 2025. Internet access to the call is available on the Company’s website at https://INDB.RocklandTrust.com or via telephonic access by dial-in at 1-888-336-7153 reference: INDB. A replay of the call will be available by calling 1-877-344-7529, Replay Conference Number: 5617042 and will be available through October 24, 2025. Additionally, a webcast replay will be available on the Company’s website until October 17, 2026.

ABOUT INDEPENDENT BANK CORP.

Independent Bank Corp. (Nasdaq Global Select Market: INDB) is the holding company for Rockland Trust Company, a full-service commercial bank headquartered in Massachusetts. With retail branches in Eastern Massachusetts, Worcester County, and Southern New Hampshire, as well as commercial banking and investment management offices in Massachusetts, New Hampshire, and Rhode Island. Rockland Trust offers a wide range of banking, investment, and insurance services to individuals, families, and businesses. Rockland Trust also offers a full suite of mobile, online, and telephone banking services. Rockland Trust is an FDIC member and an Equal Housing Lender.

This press release contains certain “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995 with respect to the financial condition, results of operations and business of the Company. These statements may be identified by such forward-looking terminology as “expect,” “achieve,” “plan,” “believe,” “future,” “positioned,” “continued,” “will,” “would,” “potential,” or similar statements or variations of such terms. Actual results may differ from those contemplated by these forward-looking statements.

Factors that may cause actual results to differ materially from those contemplated by such forward-looking statements include, but are not limited to:

• adverse economic conditions in the regional and local economies within the New England region and the Company’s market area;
• events impacting the financial services industry, including high profile bank failures, and any resulting decreased confidence in banks among depositors, investors, and other counterparties, as well as competition for deposits and significant disruption, volatility and depressed valuations of equity and other securities of banks in the capital markets;
• the effects to the Company of an increasingly competitive labor market, including the possibility that the Company will have to devote significant resources to attract and retain qualified personnel;
• political and policy uncertainties, changes in U.S. and international trade policies, such as tariffs or other factors, the prolongment of the U.S. government shutdown, and the potential impact of such factors on the Company and its customers, including the potential for decreases in deposits and loan demand, unanticipated loan delinquencies, loss of collateral and decreased service revenues;
• the instability or volatility in financial markets and unfavorable domestic or global general economic, political or business conditions, whether caused by geopolitical concerns, including the Russia/Ukraine conflict, the conflicts in Israel, Iran and surrounding areas and uncertainties surrounding the trajectories of such conflicts;
• unanticipated loan delinquencies, loss of collateral, decreased service revenues, and other potential negative effects on the Company’s local economies or the Company’s business caused by adverse weather conditions and natural disasters, changes in climate, public health crises or other external events and any actions taken by governmental authorities in response to any such events;
• adverse changes or volatility in the local real estate market;
• changes in interest rates and any resulting impact on interest earning assets and/or interest bearing liabilities, the level of voluntary prepayments on loans and the receipt of payments on mortgage-backed securities, decreased loan demand or increased difficulty in the ability of borrowers to repay variable rate loans;
• risks related to the Company’s acquisition of Enterprise and acquisitions generally, including disruption to current plans and operations; difficulties in customer and employee retention; fees, expenses and charges related to these transactions being significantly higher than anticipated; unforeseen integration issues or impairment of goodwill and/or other intangibles; and the Company’s inability to achieve expected revenues, cost savings, synergies, and other benefits at levels or within the timeframes originally anticipated;
• the effect of laws, regulations, new requirements or expectations, or additional regulatory oversight in the highly regulated financial services industry, and the resulting need to invest in technology to meet heightened regulatory expectations, increased costs of compliance or required adjustments to strategy;
• changes in trade, monetary and fiscal policies and laws, including interest rate policies of the Board of Governors of the Federal Reserve System;
• higher than expected tax expense, including as a result of failure to comply with general tax laws and changes in tax laws;
• increased competition in the Company’s market areas, including competition that could impact deposit gathering, retention of deposits and the cost of deposits, increased competition due to the demand for innovative products and service offerings, and competition from non-depository institutions which may be subject to fewer regulatory constraints and lower cost structures;
• a deterioration in the conditions of the securities markets;
• a deterioration of the credit rating for U.S. long-term sovereign debt or uncertainties surrounding the federal budget;
• inability to adapt to changes in information technology, including changes to industry accepted delivery models driven by a migration to the internet as a means of service delivery, including any inability to effectively implement new technology-driven products, such as artificial intelligence;
• electronic or other fraudulent activity within the financial services industry, especially in the commercial banking sector;
• adverse changes in consumer spending and savings habits;
• the effect of laws and regulations regarding the financial services industry, including the need to invest in technology to meet heightened regulatory expectations or the introduction of new requirements or expectations resulting in increased costs of compliance or required adjustments to strategy;
• changes in laws and regulations (including laws and regulations concerning taxes, banking, securities and insurance) generally applicable to the Company’s business and the associated costs of such changes;
• the Company’s potential judgments, claims, damages, penalties, fines and reputational damage resulting from pending or future litigation and regulatory and government actions;
• changes in accounting policies, practices and standards, as may be adopted by the regulatory agencies as well as the Public Company Accounting Oversight Board, the Financial Accounting Standards Board, and other accounting standard setters;
• operational risks related to the Company and its customers’ reliance on information technology; cyber threats, attacks, intrusions, and fraud; and outages or other issues impacting the Company or its third party service providers which could lead to interruptions or disruptions of the Company’s operating systems, including systems that are customer facing, and adversely impact the Company’s business; and
• any unexpected material adverse changes in the Company’s operations or earnings.

The Company cautions readers not to place undue reliance on any forward-looking statements as the Company’s business and its forward-looking statements involve substantial known and unknown risks and uncertainties described above and in the Company’s most recent Annual Report on Form 10-K and subsequent Quarterly Reports on Form 10-Q (“Risk Factors”). Except as required by law, the Company disclaims any intent or obligation to update publicly any such forward-looking statements, whether in response to new information, future events or otherwise. Any public statements or disclosures by the Company following this release which modify or impact any of the forward-looking statements contained in this release will be deemed to modify or supersede such statements in this release. In addition to the information set forth in this press release, you should carefully consider the Risk Factors.

This press release and the appendices attached to it contain financial information determined by methods other than in accordance with accounting principles generally accepted in the United States of America (“GAAP”). This information may include operating net income and operating earnings per share (“EPS”), operating return on average assets, operating return on average common equity, operating return on average tangible common equity, adjusted net interest margin (“adjusted margin”), tangible book value per share and the tangible common equity ratio.

Operating net income, operating EPS, operating return on average assets, and operating return on average common equity exclude items that management believes are unrelated to the Company's core banking business such as merger and acquisition expenses, and other items, if applicable. Management uses operating net income and related ratios and operating EPS to measure the strength of the Company’s core banking business and to identify trends that may to some extent be obscured by such items. Management reviews its adjusted margin to determine any items that may impact the net interest margin that may be one-time in nature or not reflective of its core operating environment, such as significant purchase accounting adjustments or other adjustments such as nonaccrual interest reversals/recoveries and prepayment penalties. Management believes that adjusting for these items to arrive at an adjusted margin provides additional insight into the operating environment and how management decisions impact the net interest margin.

Management also supplements its evaluation of financial performance with analysis of tangible book value per share (which is computed by dividing stockholders’ equity less goodwill and identifiable intangible assets, or “tangible common equity,” by common shares outstanding), the tangible common equity ratio (which is computed by dividing tangible common equity by “tangible assets,” defined as total assets less goodwill and other intangibles), and return on average tangible common equity (which is computed by dividing net income by average tangible common equity). The Company has included information on tangible book value per share, the tangible common equity ratio and return on average tangible common equity because management believes that investors may find it useful to have access to the same analytical tools used by management. As a result of merger and acquisition activity, the Company has recognized goodwill and other intangible assets in conjunction with business combination accounting principles. Excluding the impact of goodwill and other intangibles in measuring asset and capital values for the ratios provided, along with other bank standard capital ratios, provides a framework to compare the capital adequacy of the Company to other companies in the financial services industry.

These non-GAAP measures should not be viewed as a substitute for operating results and other financial measures determined in accordance with GAAP. An item which management excludes when computing these non-GAAP measures can be of substantial importance to the Company’s results for any particular quarter or year. The Company’s non-GAAP performance measures, including operating net income, operating EPS, operating return on average assets, operating return on average common equity, adjusted margin, tangible book value per share and the tangible common equity ratio, are not necessarily comparable to non-GAAP performance measures which may be presented by other companies.

Category: Earnings Releases