EX-99.1 2 exhibit991-indb12x31x2022e.htm EX-99.1 - Q4 2022 EARNINGS PRESS RELEASE
Exhibit 99.1
Shareholder Relations NEWS RELEASE
288 Union Street
Rockland, Ma. 02370
INDEPENDENT BANK CORP. REPORTS FOURTH QUARTER NET INCOME OF $77.0 MILLION
Completes a strong performance in 2022
Rockland, Massachusetts (January 19, 2023) Independent Bank Corp. (Nasdaq Global Select Market: INDB), parent of Rockland Trust Company, today announced 2022 fourth quarter net income of $77.0 million, or $1.69 per d iluted share, compared to 2022 third quarter net income of $71.9 million, or $1.57 per diluted share, driven primarily by continued net interest margin expansion combined with solid loan growth and higher fee income. Full year net income was $263.8 million, or $5.69 on a diluted earnings per share basis, an increase of $142.8 million, or 118.0%, as compared to the prior year. In addition, full year operating net income, which excluded non-core adjustments for both periods associated with the Company's fourth quarter 2021 acquisition of Meridian Bancorp, Inc. ("Meridian") and its subsidiary, East Boston Savings Bank, was $268.9 million, or $5.80 on a diluted earnings per share basis, compared to operating net income of $187.6 million, or $5.38 per share for 2021. Please refer to "Reconciliation of Net Income (GAAP) to Operating Net Income (Non-GAAP)" below for a reconciliation of net income to operating net income.
The Company generated a return on average assets and a return on average common equity of 1.56% and 10.70%, respectively, for the fourth quarter of 2022, as compared to 1.43% and 9.90%, respectively, for the prior quarter. For the full year 2022, the Company generated a return on average assets and return on average common equity of 1.33% and 9.05%, respectively, as compared to 0.81% and 6.34%, respectively, for 2021, or 1.35% and 9.22%, respectively, on an operating basis for 2022, compared to 1.26% and 9.83% on an operating basis for 2021.
“Due to the tireless efforts of my colleagues we were well positioned for rising interest rates, recognized the full year benefit of our most recent acquisition, and increased our loan portfolio,” said Christopher Oddleifson, the Chief Executive Officer of Independent Bank Corp. and Rockland Trust Company. “Rockland Trust enjoyed another banner year in 2022, capped off with our recent announcement of my successor. It has been an honor to serve as CEO for over twenty years and, as I pass the baton, I am confident that Rockland Trust will continue to thrive.”
BALANCE SHEET
Total assets of $19.3 billion at December 31, 2022 decreased by $409.1 million, or 2.1% from total assets at September 30, 2022 and decreased by $1.1 billion, or 5.5%, as comp ared to December 31, 2021, due primarily to declining cash balances.
Total loans at December 31, 2022 of $13.9 billion increased by $228.3 million, or 1.7% (6.6% annualized), compared to the prior quarter level. The commercial portfolio increased $147.9 million, or 1.4% (5.5% annualized) during the quarter, driven primarily by solid growth within the commercial and industrial category of 5.6% (22.2% annualized), while growth in the combined commercial real estate and construction portfolios reflected strong closing activity, along with transfers from construction into commercial real estate during the period. Residential
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real estate loan closings remained strong with the vast majority of originations retained on the balance sheet, resulting in 3.9% growth (15.4% annualized) for the quarter while home equity balances remained relatively flat.
Deposit balances of $15.9 billion at December 31, 2022 decreased by $460.0 million, or 2.8%, from September 30, 2022 due primarily to reductions in excess liquidity from both consumer and business segments, while continued competitive pricing pressures fueled a combination of additional deposit outflow and an increase in time deposits for the quarter. Core deposits remained consistent at 87.9% of total deposits at December 31, 2022, compared to 87.8% at September 30, 2022, while the total cost of deposits for the quarter increased 20 basis points to 0.35% in line with the higher rate environment.
The securities portfolio decreased by $17.8 million, or 0.6%, compared to September 30, 2022 as $40.1 million in purchases and unrealized gains of $12.8 million within the available for sale portfolio were offset by paydowns, calls, and maturities. Total securities represented 16.2% of total assets at December 31, 2022, as compared to 16.0% at September 30, 2022.
Stockholders' equity at December 31, 2022 increased 2.5% when compared to the prior quarter, driven primarily by strong earnings retention and other comprehensive income of $16.0 million. As a result of this increase in stockholders' equity, book value per share increased by $1.52, or 2.5%, to $63.25 during the fourth quarter as compared to the prior quarter. The Company's ratio of common equity to assets of 15.0% at December 31, 2022 represented an increase of 66 basis points, or 4.62%, from the prior quarter and an increase of 1.2% from the year ago period. The Company's tangible book value per share at December 31, 2022 rose by $1.56, or 3.9%, from the prior quarter to $41.12, and represented a decrease of 2.7% from the year ago period primarily reflecting the repurchase of 1.8 million shares of common stock during the year along with increased other comprehensive losses mostly attributable to unfavorable valuations within the Company's available for sale securities portfolio compared to the prior year. The Company's ratio of tangible common equity to tangible assets of 10.26% at December 31, 2022 represents an increase of 60 basis points from the prior quarter and a decrease of 5 basis points from the year ago period. Please refer to Appendix A for a detailed reconciliation of Non-GAAP balance sheet metrics.
NET INTEREST INCOME
Net interest income for the 2022 fourth quarter increased 3.5% to $168.4 million compared to $162.6 million for the prior quarter, primarily reflecting the positive impact of asset repricing in the rising interest rate environment as well as strong loan growth, partially offset by higher deposit costs. The reported net interest margin increased by 21 basis points from the prior quarter to 3.85%, and increased by 23 basis points to 3.82% on a core basis when excluding PPP fees, purchase accounting, and other non-core items. Please refer to Appendix C for additional details regarding the net interest margin.
NONINTEREST INCOME
Noninterest income of $32.3 million for the fourth quarter of 2022 was $4.1 million, or 14.6% higher as compared to the prior quarter. Significant changes in noninterest income for the 2022 fourth quarter compared to the prior quarter included the following:
•Deposit account fees decreased by $473,000, or 7.6%, driven primarily by reduced overdraft activity during the fourth quarter.
•Investment management income increased by $2.0 million, or 23.2%, primarily driven by an increase in assets under administration of $701.3 million, or 13.8%, to $5.8 billion at December 31, 2022, reflecting healthy new asset inflows and increased market valuations. The income for the quarter also benefited from a one-time incentive of $649,000.
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•The increase in cash surrender value of life insurance policies rose by $253,000, or 13.4% due primarily to annual dividends received during the fourth quarter. The Company also received proceeds on life insurance policies resulting in a gain of $691,000 for the fourth quarter, as compared to $477,000 in the prior quarter.
•Loan level derivative income increased by $950,000, or 201.7%, due primarily to higher customer demand.
•Other noninterest income increased by $1.3 million, or 22.8%, due primarily to a $894,000 gain on the sale of a closed branch facility that was consolidated in conjunction with the Meridian acquisition, changes in valuation of equity securities, as well as discounted purchases of Massachusetts historical tax credits.
NONINTEREST EXPENSE
Noninterest expense of $94.9 million for the fourth quarter of 2022 was $2.1 million, or 2.3%, higher as compared to the prior quarter. Significant changes in noninterest expense for the fourth quarter compared to the prior quarter included the following:
•Salaries and employee benefits increased by $1.0 million, or 2.0%, primarily due to valuation changes in the Company's life insurance obligations.
•Occupancy and equipment increased by $270,000, or 2.2%, due mainly to increases in building maintenance and repairs, as well as seasonal increases in utility costs, partially offset by reduced office equipment costs.
•Other noninterest expense increased by $596,000, or 2.5%, due primarily to increases in software maintenance, customer fraud reimbursement, and advertising costs, partially offset by reduced unrealized losses on equity securities.
The Company’s tax rate for the fourth quarter of 2022 decreased slightly to 23.18%, compared to 24.37% for the prior quarter. The fourth quarter decline was due to the recognition of discrete items in the quarter.
ASSET QUALITY
The fourth quarter provision for credit losses of $5.5 million primarily reflects an additional reserve allocation associated with further credit deterioration of a large commercial and industrial credit that migrated to nonperforming status during the third quarter of 2022. Nonperforming loans declined slightly during the quarter to $54.9 million, or 0.39% of total loans at December 31, 2022, as compared to $56.0 million, or 0.41% of total loans at September 30, 2022. Net charge-offs were minimal at $394,000 or 0.01% of average loans annualized for the fourth quarter of 2022. Delinquency as a percentage of total loans increased 13 basis points from the prior quarter to 0.30% at December 31, 2022.
The allowance for credit losses on total loans was $152.4 million, or 1.09% of total loans at December 31, 2022, as compared to $147.3 million, or 1.08% of total loans, at September 30, 2022.
CONFERENCE CALL INFORMATION
Christopher Oddleifson, Chief Executive Officer, Robert Cozzone, Chief Operating Officer, and Mark Ruggiero, Chief Financial Officer, will host a conference call to discuss fourth quarter earnings and other matters at 10:00 a.m. Eastern Time on Friday, January 20, 2023. 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: 6538963 and will be available through January 27, 2023. Additionally, a webcast replay will be available on the Company's website until January 20, 2024.
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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. Rockland Trust was named to The Boston Globe's "Top Places to Work" 2022 list, an honor earned for the 14th consecutive year. *In 2022, Rockland Trust was ranked #1 in Customer Satisfaction with Retail Banking in New England. Rockland Trust has a longstanding commitment to equity and inclusion. This commitment is underscored by initiatives such as Diversity and Inclusion leadership training, a colleague Allyship mentoring program, and numerous Employee Resource Groups focused on providing colleague support and education, reinforcing a culture of mutual respect and advancing professional development, and Rockland Trust's sponsorship of diverse community organizations through charitable giving and employee-based volunteerism. In addition, Rockland Trust is deeply committed to the communities it serves, as reflected in the overall "Outstanding" rating in its most recent Community Reinvestment Act performance evaluation. Rockland Trust offers a wide range of banking, investment, and insurance services. The Bank serves businesses and individuals through over 120 retail branches, commercial and residential lending centers, and investment management offices in eastern Massachusetts, including Greater Boston, South Shore, North Shore, Cape Cod and Islands, Worcester County, and Rhode Island. 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. To find out why Rockland Trust is the bank "Where Each Relationship Matters®," please visit RocklandTrust.com.
*Rockland Trust received the highest score in a tie in the New England Region of the J.D. Power 2022 U.S. Retail Banking Satisfaction Study of customers’ satisfaction with their primary bank. Visit jdpower.com/awards for more details.
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:
•further weakening in the United States economy in general and the regional and local economies within the New England region and the Company’s market area, including any future weakening caused by the Coronavirus ("COVID-19") pandemic and any uncertainty regarding the length and extent of economic contraction as a result of the pandemic;
•the effects of inflationary pressures, labor market shortages and supply chain issues;
•the instability or volatility in financial markets and unfavorable general economic or business conditions, globally, nationally or regionally, caused by geopolitical concerns, including as a result of the conflict between Russia and Ukraine;
•unanticipated loan delinquencies, loss of collateral, decreased service revenues, and other potential negative effects on our business caused by severe weather, pandemics or other external events;
•adverse changes or volatility in the local real estate market;
•adverse changes in asset quality and any unanticipated credit deterioration in our loan portfolio including those related to one or more large commercial relationships;
•acquisitions may not produce results at levels or within time frames originally anticipated and may result in unforeseen integration issues or impairment of goodwill and/or other intangibles;
•additional regulatory oversight and related compliance costs;
•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, resulting from failure to comply with general tax laws and changes in tax laws;
•changes in market interest rates for interest earning assets and/or interest bearing liabilities and changes related to the phase-out of LIBOR;
•increased competition in the Company’s market areas;
•adverse weather, changes in climate, natural disasters, geopolitical concerns, including those arising from the conflict between Russia and Ukraine;
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•the emergence of widespread health emergencies or pandemics, any further resurgences or variants of the COVID-19 virus, the efficacy and availability of vaccines, boosters or other treatments, actions taken by governmental authorities in response thereto, other public health crises or man-made events, and their impact on the Company's local economies or the Company's operations;
•a deterioration in the conditions of the securities markets;
•a deterioration of the credit rating for U.S. long-term sovereign debt, actions that the U.S. government may take to avoid exceeding the debt ceiling, or uncertainties surrounding the debt ceiling and 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;
•electronic 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;
•changes in laws and regulations (including laws and regulations concerning taxes, banking, securities and insurance) generally applicable to the Company’s business;
•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;
•cyber security attacks or intrusions that could adversely impact our businesses; and
•other unexpected material adverse changes in our operations or earnings.
The Company wishes to caution 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 in the Company’s 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 includes 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, core net interest margin ("core 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, provision for credit losses on acquired loan portfolios, 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 core margin to determine any items t hat may impact the net interest margin that m ay be one-time in nature or not reflective of its core operating environment, such as low-yielding loans originated through government programs in response to the pandemic, or 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 a core 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
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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, core 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.
Contacts:
Chris Oddleifson
President and Chief Executive Officer
(781) 982-6660
Mark J. Ruggiero
Chief Financial Officer and
Chief Accounting Officer
(781) 982-6281
Category: Earnings Releases
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INDEPENDENT BANK CORP. FINANCIAL SUMMARY |  |  |  |  |  |
CONSOLIDATED BALANCE SHEETS |  |  |  |
(Unaudited, dollars in thousands) |  |  |  |  |  |  | % Change |  | % Change
| December 31 2022 |  | September 30 2022 |  | December 31 2021 |  | Dec 2022 vs. |  | Dec 2022 vs.
|  |  |  | Sept 2022 |  | Dec 2021
Assets |  |  |  |  |  |  |  |  |
Cash and due from banks | $ | 175,843 |  |  | $ | 172,615 |  |  | $ | 141,581 |  |  | 1.87 | % |  | 24.20 | %
Interest-earning deposits with banks | 177,090 |  |  | 763,681 |  |  | 2,099,103 |  |  | (76.81) | % |  | (91.56) | %
Securities |  |  |  |  |  |  |  |  |
Trading | 3,888 |  |  | 3,538 |  |  | 3,720 |  |  | 9.89 | % |  | 4.52 | %
Equities | 21,119 |  |  | 20,439 |  |  | 23,173 |  |  | 3.33 | % |  | (8.86) | %
Available for sale | 1,399,154 |  |  | 1,425,511 |  |  | 1,571,148 |  |  | (1.85) | % |  | (10.95) | %
Held to maturity | 1,705,120 |  |  | 1,697,635 |  |  | 1,066,818 |  |  | 0.44 | % |  | 59.83 | %
Total securities | 3,129,281 |  |  | 3,147,123 |  |  | 2,664,859 |  |  | (0.57) | % |  | 17.43 | %
Loans held for sale | 2,803 |  |  | 5,100 |  |  | 24,679 |  |  | (45.04) | % |  | (88.64) | %
Loans |  |  |  |  |  |  |  |  |
Commercial and industrial | 1,635,103 |  |  | 1,548,349 |  |  | 1,563,279 |  |  | 5.60 | % |  | 4.59 | %
Commercial real estate | 7,760,230 |  |  | 7,677,917 |  |  | 7,992,344 |  |  | 1.07 | % |  | (2.90) | %
Commercial construction | 1,154,413 |  |  | 1,185,157 |  |  | 1,165,457 |  |  | (2.59) | % |  | (0.95) | %
Small business | 219,102 |  |  | 209,567 |  |  | 193,189 |  |  | 4.55 | % |  | 13.41 | %
Total commercial | 10,768,848 |  |  | 10,620,990 |  |  | 10,914,269 |  |  | 1.39 | % |  | (1.33) | %
Residential real estate | 2,035,524 |  |  | 1,959,254 |  |  | 1,604,686 |  |  | 3.89 | % |  | 26.85 | %
Home equity - first position | 566,166 |  |  | 578,405 |  |  | 589,550 |  |  | (2.12) | % |  | (3.97) | %
Home equity - subordinate positions | 522,584 |  |  | 508,765 |  |  | 450,061 |  |  | 2.72 | % |  | 16.11 | %
Total consumer real estate | 3,124,274 |  |  | 3,046,424 |  |  | 2,644,297 |  |  | 2.56 | % |  | 18.15 | %
Other consumer | 35,553 |  |  | 32,936 |  |  | 28,720 |  |  | 7.95 | % |  | 23.79 | %
Total loans | 13,928,675 |  |  | 13,700,350 |  |  | 13,587,286 |  |  | 1.67 | % |  | 2.51 | %
Less: allowance for credit losses | (152,419) |  |  | (147,313) |  |  | (146,922) |  |  | 3.47 | % |  | 3.74 | %
Net loans | 13,776,256 |  |  | 13,553,037 |  |  | 13,440,364 |  |  | 1.65 | % |  | 2.50 | %
Federal Home Loan Bank stock | 5,218 |  |  | 5,218 |  |  | 11,407 |  |  | — | % |  | (54.26) | %
Bank premises and equipment, net | 196,504 |  |  | 198,408 |  |  | 195,590 |  |  | (0.96) | % |  | 0.47 | %
Goodwill | 985,072 |  |  | 985,072 |  |  | 985,072 |  |  | — | % |  | — | %
Other intangible assets | 25,068 |  |  | 26,934 |  |  | 32,772 |  |  | (6.93) | % |  | (23.51) | %
Cash surrender value of life insurance policies | 293,323 |  |  | 293,126 |  |  | 289,304 |  |  | 0.07 | % |  | 1.39 | %
Other assets | 527,716 |  |  | 552,955 |  |  | 538,674 |  |  | (4.56) | % |  | (2.03) | %
Total assets | $ | 19,294,174 |  |  | $ | 19,703,269 |  |  | $ | 20,423,405 |  |  | (2.08) | % |  | (5.53) | %
Liabilities and Stockholders' Equity |  |  |  |  |  |  |  |  |
Deposits |  |  |  |  |  |  |  |  |
Noninterest-bearing demand deposits | $ | 5,441,584 |  |  | $ | 5,622,260 |  |  | $ | 5,479,503 |  |  | (3.21) | % |  | (0.69) | %
Savings and interest checking accounts | 5,898,009 |  |  | 6,094,493 |  |  | 6,350,016 |  |  | (3.22) | % |  | (7.12) | %
Money market | 3,343,673 |  |  | 3,443,622 |  |  | 3,556,375 |  |  | (2.90) | % |  | (5.98) | %
Time certificates of deposit | 1,195,741 |  |  | 1,178,619 |  |  | 1,531,150 |  |  | 1.45 | % |  | (21.91) | %
Total deposits | 15,879,007 |  |  | 16,338,994 |  |  | 16,917,044 |  |  | (2.82) | % |  | (6.14) | %
Borrowings |  |  |  |  |  |  |  |  |
Federal Home Loan Bank borrowings | 637 |  |  | 643 |  |  | 25,667 |  |  | (0.93) | % |  | (97.52) | %
Long-term borrowings, net | — |  |  | — |  |  | 14,063 |  |  | nm |  | (100.00) | %
Junior subordinated debentures, net | 62,855 |  |  | 62,855 |  |  | 62,853 |  |  | — | % |  | — | %
Subordinated debentures, net | 49,885 |  |  | 49,862 |  |  | 49,791 |  |  | 0.05 | % |  | 0.19 | %
Total borrowings | 113,377 |  |  | 113,360 |  |  | 152,374 |  |  | 0.01 | % |  | (25.59) | %
Total deposits and borrowings | 15,992,384 |  |  | 16,452,354 |  |  | 17,069,418 |  |  | (2.80) | % |  | (6.31) | %
Other liabilities | 415,089 |  |  | 433,714 |  |  | 335,538 |  |  | (4.29) | % |  | 23.71 | %
Total liabilities | 16,407,473 |  |  | 16,886,068 |  |  | 17,404,956 |  |  | (2.83) | % |  | (5.73) | %
Stockholders' equity |  |  |  |  |  |  |  |  |
Common stock | 455 |  |  | 454 |  |  | 472 |  |  | 0.22 | % |  | (3.60) | %

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Additional paid in capital | 2,114,888 |  |  | 2,113,313 |  |  | 2,249,078 |  |  | 0.07 | % |  | (5.97) | %
Retained earnings | 934,442 |  |  | 882,503 |  |  | 766,716 |  |  | 5.89 | % |  | 21.88 | %
Accumulated other comprehensive income (loss), net of tax | (163,084) |  |  | (179,069) |  |  | 2,183 |  |  | (8.93) | % |  | (7,570.64) | %
Total stockholders' equity | 2,886,701 |  |  | 2,817,201 |  |  | 3,018,449 |  |  | 2.47 | % |  | (4.36) | %
Total liabilities and stockholders' equity | $ | 19,294,174 |  |  | $ | 19,703,269 |  |  | $ | 20,423,405 |  |  | (2.08) | % |  | (5.53) | %

CONSOLIDATED STATEMENTS OF INCOME |  |  |  |  |
(Unaudited, dollars in thousands, except per share data) |  |  |  |  |
| Three Months Ended |  |  |  |
|  |  |  |  |  |  | % Change |  | % Change
| December 31 2022 |  | September 30 2022 |  | December 31 2021 |  | Dec 2022 vs. |  | Dec 2022 vs.
|  |  |  | Sept 2022 |  | Dec 2021
Interest income |  |  |  |  |  |  |  |  |
Interest on federal funds sold and short-term investments | $ | 4,163 |  |  | $ | 6,519 |  |  | $ | 840 |  |  | (36.14) | % |  | 395.60 | %
Interest and dividends on securities | 15,789 |  |  | 13,244 |  |  | 8,876 |  |  | 19.22 | % |  | 77.88 | %
Interest and fees on loans | 164,153 |  |  | 150,157 |  |  | 116,024 |  |  | 9.32 | % |  | 41.48 | %
Interest on loans held for sale | 22 |  |  | 51 |  |  | 181 |  |  | (56.86) | % |  | (87.85) | %
Total interest income | 184,127 |  |  | 169,971 |  |  | 125,921 |  |  | 8.33 | % |  | 46.22 | %
Interest expense |  |  |  |  |  |  |  |  |
Interest on deposits | 14,325 |  |  | 6,109 |  |  | 1,966 |  |  | 134.49 | % |  | 628.64 | %
Interest on borrowings | 1,447 |  |  | 1,261 |  |  | 1,425 |  |  | 14.75 | % |  | 1.54 | %
Total interest expense | 15,772 |  |  | 7,370 |  |  | 3,391 |  |  | 114.00 | % |  | 365.11 | %
Net interest income | 168,355 |  |  | 162,601 |  |  | 122,530 |  |  | 3.54 | % |  | 37.40 | %
Provision for credit losses | 5,500 |  |  | 3,000 |  |  | 35,705 |  |  | 83.33 | % |  | (84.60) | %
Net interest income after provision for credit losses | 162,855 |  |  | 159,601 |  |  | 86,825 |  |  | 2.04 | % |  | 87.57 | %
Noninterest income |  |  |  |  |  |  |  |  |
Deposit account fees | 5,788 |  |  | 6,261 |  |  | 5,041 |  |  | (7.55) | % |  | 14.82 | %
Interchange and ATM fees | 4,282 |  |  | 4,331 |  |  | 3,758 |  |  | (1.13) | % |  | 13.94 | %
Investment management | 10,394 |  |  | 8,436 |  |  | 8,958 |  |  | 23.21 | % |  | 16.03 | %
Mortgage banking income | 526 |  |  | 585 |  |  | 2,010 |  |  | (10.09) | % |  | (73.83) | %
Increase in cash surrender value of life insurance policies | 2,136 |  |  | 1,883 |  |  | 1,923 |  |  | 13.44 | % |  | 11.08 | %
Gain on life insurance benefits | 691 |  |  | 477 |  |  | — |  |  | 44.86 | % |  | 100.00%
Loan level derivative income | 1,421 |  |  | 471 |  |  | 2,382 |  |  | 201.70 | % |  | (40.34) | %
Other noninterest income | 7,064 |  |  | 5,751 |  |  | 5,108 |  |  | 22.83 | % |  | 38.29 | %
Total noninterest income | 32,302 |  |  | 28,195 |  |  | 29,180 |  |  | 14.57 | % |  | 10.70 | %
Noninterest expenses |  |  |  |  |  |  |  |  |
Salaries and employee benefits | 53,754 |  |  | 52,708 |  |  | 47,827 |  |  | 1.98 | % |  | 12.39 | %
Occupancy and equipment expenses | 12,586 |  |  | 12,316 |  |  | 9,722 |  |  | 2.19 | % |  | 29.46 | %
Data processing and facilities management | 2,442 |  |  | 2,259 |  |  | 1,875 |  |  | 8.10 | % |  | 30.24 | %
FDIC assessment | 1,726 |  |  | 1,677 |  |  | 1,175 |  |  | 2.92 | % |  | 46.89 | %
Merger and acquisition expense | — |  |  | — |  |  | 37,166 |  |  | nm |  | (100.00) | %
Other noninterest expenses | 24,364 |  |  | 23,768 |  |  | 19,361 |  |  | 2.51 | % |  | 25.84 | %
Total noninterest expenses | 94,872 |  |  | 92,728 |  |  | 117,126 |  |  | 2.31 | % |  | (19.00) | %
Income before income taxes | 100,285 |  |  | 95,068 |  |  | (1,121) |  |  | 5.49 | % |  | (9,046.03) | %
Provision for income taxes | 23,242 |  |  | 23,171 |  |  | (2,823) |  |  | 0.31 | % |  | (923.31) | %
Net Income | $ | 77,043 |  |  | $ | 71,897 |  |  | $ | 1,702 |  |  | 7.16 | % |  | 4,426.62 | %
Weighted average common shares (basic) | 45,641,605 |  |  | 45,839,555 |  |  | 40,354,728 |  |  |  |  |
Common share equivalents | 20,090 |  |  | 16,856 |  |  | 20,438 |  |  |  |  |
Weighted average common shares (diluted) | 45,661,695 |  |  | 45,856,411 |  |  | 40,375,166 |  |  |  |  |
Basic earnings per share | $ | 1.69 |  |  | $ | 1.57 |  |  | $ | 0.04 |  |  | 7.64 | % |  | 4,125.00 | %
Diluted earnings per share | $ | 1.69 |  |  | $ | 1.57 |  |  | $ | 0.04 |  |  | 7.64 | % |  | 4,125.00 | %

8

Reconciliation of Net Income (GAAP) to Operating Net Income (Non-GAAP): |  |  |  |  |  |
Net income | $ | 77,043 |  |  | $ | 71,897 |  |  | $ | 1,702 |  |  |  |  |
Provision for non-PCD acquired loans | — |  |  | — |  |  | 50,705 |  |  |  |  |
Noninterest expense components |  |  |  |  |  |  |  |  |
Add - merger and acquisition expenses | — |  |  | — |  |  | 37,166 |  |  |  |  |
Noncore increases to income before taxes | — |  |  | — |  |  | 87,871 |  |  |  |  |
Net tax benefit associated with noncore items (1) | — |  |  | — |  |  | (23,866) |  |  |  |  |
Noncore increases to net income | — |  |  | — |  |  | 64,005 |  |  |  |  |
Operating net income (Non-GAAP) | $ | 77,043 |  |  | $ | 71,897 |  |  | $ | 65,707 |  |  | 7.16 | % |  | 17.25 | %
Diluted earnings per share, on an operating basis | $ | 1.69 |  |  | $ | 1.57 |  |  | $ | 1.63 |  |  | 7.64 | % |  | 3.68 | %
(1) The net tax benefit associated with noncore items is determined by assessing whether each noncore item is included or excluded from net taxable income and applying the Company's combined marginal tax rate to only those items included in net taxable income.
Performance ratios |  |  |  |  |  |  |  |  |
Net interest margin (FTE) | 3.85 | % |  | 3.64 | % |  | 3.05 | % |  |  |  |
Return on average assets (GAAP) (calculated by dividing net income by average assets) | 1.56 | % |  | 1.43 | % |  | 0.04 | % |  |  |  |
Return on average assets on an operating basis (Non-GAAP) (calculated by dividing net operating net income by average assets) | 1.56 | % |  | 1.43 | % |  | 1.47 | % |  |  |  |
Return on average common equity (GAAP) (calculated by dividing net income by average common equity) | 10.70 | % |  | 9.90 | % |  | 0.28 | % |  |  |  |
Return on average common equity on an operating basis (Non-GAAP) (calculated by dividing net operating net income by average common equity) | 10.70 | % |  | 9.90 | % |  | 10.75 | % |  |  |  |
Return on average tangible common equity (Non-GAAP) (calculated by dividing net income by average tangible common equity) | 16.57 | % |  | 15.26 | % |  | 0.41 | % |  |  |  |
Return on average tangible common equity on an operating basis (Non-GAAP) (calculated by dividing net operating net income by average tangible common equity) | 16.57 | % |  | 15.26 | % |  | 15.92 | % |  |  |  |
Noninterest income as a % of total revenue (calculated by dividing total noninterest income by net interest income plus total noninterest income) | 16.10 | % |  | 14.78 | % |  | 19.23 | % |  |  |  |
Noninterest income as a % of total revenue on an operating basis (Non-GAAP) (calculated by dividing total noninterest income on an operating basis by net interest income plus total noninterest income) | 16.10 | % |  | 14.78 | % |  | 19.23 | % |  |  |  |
Efficiency ratio (GAAP) (calculated by dividing total noninterest expense by total revenue) | 47.28 | % |  | 48.60 | % |  | 77.20 | % |  |  |  |
Efficiency ratio on an operating basis (Non-GAAP) (calculated by dividing total noninterest expense on an operating basis by total revenue) | 47.28 | % |  | 48.60 | % |  | 52.71 | % |  |  |  |

CONSOLIDATED STATEMENTS OF INCOME |  |  |  |  |
(Unaudited, dollars in thousands, except per share data) |  |  |  |
|  | Years Ended |  |
|  |  |  |  |  | % Change
|  | December 31 2022 |  | December 31 2021 |  | Dec 2022 vs.
|  |  |  | Dec 2021
Interest income |  |  |  |  |  |
Interest on federal funds sold and short-term investments |  | $ | 14,385 |  |  | $ | 2,494 |  |  | 476.78 | %
Interest and dividends on securities |  | 50,360 |  |  | 30,493 |  |  | 65.15 | %
Interest and fees on loans |  | 577,923 |  |  | 381,433 |  |  | 51.51 | %
Interest on loans held for sale |  | 172 |  |  | 856 |  |  | (79.91) | %
Total interest income |  | 642,840 |  |  | 415,276 |  |  | 54.80 | %
Interest expense |  |  |  |  |  |
Interest on deposits |  | 24,652 |  |  | 8,327 |  |  | 196.05 | %
Interest on borrowings |  | 4,939 |  |  | 5,390 |  |  | (8.37) | %
Total interest expense |  | 29,591 |  |  | 13,717 |  |  | 115.73 | %

9

Net interest income |  | 613,249 |  |  | 401,559 |  |  | 52.72 | %
Provision for credit losses |  | 6,500 |  |  | 18,205 |  |  | (64.30) | %
Net interest income after provision for credit losses |  | 606,749 |  |  | 383,354 |  |  | 58.27 | %
Noninterest income |  |  |  |  |  |
Deposit account fees |  | 23,370 |  |  | 16,745 |  |  | 39.56 | %
Interchange and ATM fees |  | 16,249 |  |  | 12,987 |  |  | 25.12 | %
Investment management |  | 36,832 |  |  | 35,308 |  |  | 4.32 | %
Mortgage banking income |  | 3,515 |  |  | 13,280 |  |  | (73.53) | %
Increase in cash surrender value of life insurance policies |  | 7,685 |  |  | 6,431 |  |  | 19.50 | %
Gain on life insurance benefits |  | 1,291 |  |  | 258 |  |  | 400.39 | %
Loan level derivative income |  | 2,932 |  |  | 3,257 |  |  | (9.98) | %
Other noninterest income |  | 22,793 |  |  | 17,584 |  |  | 29.62 | %
Total noninterest income |  | 114,667 |  |  | 105,850 |  |  | 8.33 | %
Noninterest expenses |  |  |  |  |  |
Salaries and employee benefits |  | 204,711 |  |  | 172,586 |  |  | 18.61 | %
Occupancy and equipment expenses |  | 49,841 |  |  | 36,265 |  |  | 37.44 | %
Data processing and facilities management |  | 9,320 |  |  | 6,899 |  |  | 35.09 | %
FDIC assessment |  | 6,951 |  |  | 3,980 |  |  | 74.65 | %
Merger and acquisition expense |  | 7,100 |  |  | 40,840 |  |  | (82.62) | %
Other noninterest expenses |  | 95,739 |  |  | 71,959 |  |  | 33.05 | %
Total noninterest expenses |  | 373,662 |  |  | 332,529 |  |  | 12.37 | %
Income before income taxes |  | 347,754 |  |  | 156,675 |  |  | 121.96 | %
Provision for income taxes |  | 83,941 |  |  | 35,683 |  |  | 135.24 | %
Net Income |  | $ | 263,813 |  |  | $ | 120,992 |  |  | 118.04 | %
Weighted average common shares (basic) |  | 46,372,051 |  |  | 34,872,034 |  |  |
Common share equivalents |  | 17,938 |  |  | 16,484 |  |  |
Weighted average common shares (diluted) |  | 46,389,989 |  |  | 34,888,518 |  |  |
Basic earnings per share |  | $ | 5.69 |  |  | $ | 3.47 |  |  | 63.98 | %
Diluted earnings per share |  | $ | 5.69 |  |  | $ | 3.47 |  |  | 63.98 | %
Reconciliation of Net Income (GAAP) to Operating Net Income (Non-GAAP): |  |  |  |  |  |
Net Income |  | $ | 263,813 |  |  | $ | 120,992 |  |  |
Provision for non-PCD acquired loans |  | — |  |  | 50,705 |  |  |
Noninterest expense components |  |  |  |  |  |
Add - merger and acquisition expenses |  | 7,100 |  |  | 40,840 |  |  |
Noncore increases to income before taxes |  | 7,100 |  |  | 91,545 |  |  |
Net tax benefit associated with noncore items (1) |  | (1,995) |  |  | (24,899) |  |  |
Noncore increases to net income |  | $ | 5,105 |  |  | $ | 66,646 |  |  |
Operating net income (Non-GAAP) |  | $ | 268,918 |  |  | $ | 187,638 |  |  | 43.32 | %
Diluted earnings per share, on an operating basis |  | $ | 5.80 |  |  | $ | 5.38 |  |  | 7.81 | %
(1) The net tax benefit associated with noncore items is determined by assessing whether each noncore item is included or excluded from net taxable income and applying the Company's combined marginal tax rate to only those items included in net taxable income.
Performance ratios |  |  |  |  |  |
Net interest margin (FTE) |  | 3.46 | % |  | 3.02 | % |  |
Return on average assets (GAAP) (calculated by dividing net income by average assets) |  | 1.33 | % |  | 0.81 | % |  |
Return on average assets on an operating basis (Non-GAAP) (calculated by dividing net operating net income by average assets) |  | 1.35 | % |  | 1.26 | % |  |
Return on average common equity (GAAP) (calculated by dividing net income by average common equity) |  | 9.05 | % |  | 6.34 | % |  |
Return on average common equity on an operating basis (Non-GAAP) (calculated by dividing net operating net income by average common equity) |  | 9.22 | % |  | 9.83 | % |  |

10

Return on average tangible common equity (GAAP) (calculated by dividing net income by average tangible common equity) |  | 13.87 | % |  | 9.20 | % |  |
Return on average tangible common equity on an operating basis (Non-GAAP) (calculated by dividing net operating net income by average tangible common equity) |  | 14.14 | % |  | 14.26 | % |  |
Noninterest income as a % of total revenue (calculated by dividing total noninterest income by net interest income plus total noninterest income) |  | 15.75 | % |  | 20.86 | % |  |
Noninterest income as a % of total revenue on an operating basis (Non-GAAP) (calculated by dividing total noninterest income on an operating basis by net interest income plus total noninterest income) |  | 15.75 | % |  | 20.86 | % |  |
Efficiency ratio (GAAP) (calculated by dividing total noninterest expense by total revenue) |  | 51.33 | % |  | 65.53 | % |  |
Efficiency ratio on an operating basis (Non-GAAP) (calculated by dividing total noninterest expense on an operating basis by total revenue) |  | 50.36 | % |  | 57.49 | % |  |

11

ASSET QUALITY |  |
(Unaudited, dollars in thousands) |  | Nonperforming Assets At
|  | December 31 2022 |  | September 30 2022 |  | December 31 2021
Nonperforming loans |  |  |  |  |  |
Commercial & industrial loans |  | $ | 26,693 |  |  | $ | 27,393 |  |  | $ | 3,439 |
Commercial real estate loans |  | 15,730 |  |  | 15,982 |  |  | 10,870 |
Small business loans |  | 104 |  |  | 50 |  |  | 44 |
Residential real estate loans |  | 8,479 |  |  | 8,891 |  |  | 9,182 |
Home equity |  | 3,400 |  |  | 3,485 |  |  | 3,781 |
Other consumer |  | 475 |  |  | 216 |  |  | 504 |
Total nonperforming loans |  | 54,881 |  |  | 56,017 |  |  | 27,820 |
Total nonperforming assets |  | $ | 54,881 |  |  | $ | 56,017 |  |  | $ | 27,820 |
Nonperforming loans/gross loans |  | 0.39 | % |  | 0.41 | % |  | 0.20 | %
Nonperforming assets/total assets |  | 0.28 | % |  | 0.28 | % |  | 0.14 | %
Allowance for credit losses/nonperforming loans |  | 277.73 | % |  | 262.98 | % |  | 528.12 | %
Allowance for credit losses/total loans |  | 1.09 | % |  | 1.08 | % |  | 1.08 | %
Delinquent loans/total loans |  | 0.30 | % |  | 0.17 | % |  | 0.34 | %
|  | Nonperforming Assets Reconciliation for the Three Months Ended
|  | December 31 2022 |  | September 30 2022 |  | December 31 2021
Nonperforming assets beginning balance |  | $ | 56,017 |  |  | $ | 55,915 |  |  | $ | 45,810 |
New to nonperforming |  | 5,734 |  |  | 30,650 |  |  | 3,875 |
Acquired loans |  | — |  |  | — |  |  | 4,463 |
Loans charged-off |  | (660) |  |  | (741) |  |  | (445) |
Loans paid-off /sold |  | (2,448) |  |  | (29,450) |  |  | (21,162) |
Loans restored to performing status |  | (3,846) |  |  | (366) |  |  | (4,925) |
Other |  | 84 |  |  | 9 |  |  | 204 |
Nonperforming assets ending balance |  | $ | 54,881 |  |  | $ | 56,017 |  |  | $ | 27,820 |

12

|  | Net Charge-Offs (Recoveries)
|  | Three Months Ended |  | Years Ended
|  | December 31 2022 |  | September 30 2022 |  | December 31 2021 |  | December 31 2022 |  | December 31 2021
Net charge-offs (recoveries) |  |  |  |  |  |  |  |  |  |
Commercial and industrial loans |  | $ | (5) |  |  | $ | (2) |  |  | $ | (2,586) |  |  | $ | (49) |  |  | $ | 788 |
Commercial real estate loans |  | — |  |  | (268) |  |  | — |  |  | (271) |  |  | (57) |
Small business loans |  | 135 |  |  | (88) |  |  | 2 |  |  | 47 |  |  | 121 |
Residential real estate loans |  | — |  |  | — |  |  | — |  |  | — |  |  | (1) |
Home equity |  | (16) |  |  | (65) |  |  | (142) |  |  | 1 |  |  | (180) |
Other consumer |  | 280 |  |  | 429 |  |  | 295 |  |  | 1,275 |  |  | 544 |
Total net charge-offs (recoveries) |  | $ | 394 |  |  | $ | 6 |  |  | $ | (2,431) |  |  | $ | 1,003 |  |  | $ | 1,215 |
Net charge-offs (recoveries) to average loans (annualized) |  | 0.01 | % |  | nm |  | (0.09) | % |  | 0.01 | % |  | 0.01 | %

|  | Troubled Debt Restructurings At
|  | December 31 2022 |  | September 30 2022 |  | December 31 2021
Troubled debt restructurings on accrual status |  | $ | 11,278 |  |  | $ | 11,549 |  |  | $ | 14,635 |
Troubled debt restructurings on nonaccrual status |  | 1,429 |  |  | 1,538 |  |  | 1,993 |
Total troubled debt restructurings |  | $ | 12,707 |  |  | $ | 13,087 |  |  | $ | 16,628 |
BALANCE SHEET AND CAPITAL RATIOS |  |  |  |  |  |
|  | December 31 2022 |  | September 30 2022 |  | December 31 2021
Gross loans/total deposits |  | 87.72 | % |  | 83.85 | % |  | 80.32 | %
Common equity tier 1 capital ratio (1) |  | 14.33 | % |  | 13.98 | % |  | 14.22 | %
Tier 1 leverage capital ratio (1) |  | 10.99 | % |  | 10.51 | % |  | 12.38 | %
Common equity to assets ratio GAAP |  | 14.96 | % |  | 14.30 | % |  | 14.78 | %
Tangible common equity to tangible assets ratio (2) |  | 10.26 | % |  | 9.66 | % |  | 10.31 | %
Book value per share GAAP |  | $ | 63.25 |  |  | $ | 61.73 |  |  | $ | 63.75 |
Tangible book value per share (2) |  | $ | 41.12 |  |  | $ | 39.56 |  |  | $ | 42.25 |

(1) Estimated number for December 31, 2022.
(2) See Appendix A for detailed reconciliation from GAAP to Non-GAAP ratios.
nm = not meaningful
13

INDEPENDENT BANK CORP. SUPPLEMENTAL FINANCIAL INFORMATION
(Unaudited, dollars in thousands) |  | Three Months Ended
|  | December 31, 2022 |  | September 30, 2022 |  | December 31, 2021
|  |  |  | Interest |  |  |  |  | Interest |  |  |  |  | Interest |  |
|  | Average |  | Earned/ | Yield/ |  | Average |  | Earned/ | Yield/ |  | Average |  | Earned/ |  | Yield/
|  | Balance |  | Paid (1) |  | Rate |  | Balance |  | Paid (1) |  | Rate |  | Balance |  | Paid (1) |  | Rate
Interest-earning assets |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Interest-earning deposits with banks, federal funds sold, and short term investments |  | $ | 466,691 |  |  | $ | 4,163 |  |  | 3.54 | % |  | $ | 1,156,143 |  |  | $ | 6,519 |  |  | 2.24 | % |  | $ | 2,107,325 |  |  | $ | 840 |  |  | 0.16 | %
Securities |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Securities - trading |  | 3,732 |  |  | — |  |  | — | % |  | 3,730 |  |  | — |  |  | — | % |  | 3,572 |  |  | — |  |  | — | %
Securities - taxable investments |  | 3,147,635 |  |  | 15,787 |  |  | 1.99 | % |  | 3,024,802 |  |  | 13,243 |  |  | 1.74 | % |  | 2,520,248 |  |  | 8,874 |  |  | 1.40 | %
Securities - nontaxable investments (1) |  | 189 |  |  | 2 |  |  | 4.20 | % |  | 196 |  |  | 1 |  |  | 2.02 | % |  | 216 |  |  | 3 |  |  | 5.51 | %
Total securities |  | $ | 3,151,556 |  |  | $ | 15,789 |  |  | 1.99 | % |  | $ | 3,028,728 |  |  | $ | 13,244 |  |  | 1.73 | % |  | $ | 2,524,036 |  |  | $ | 8,877 |  |  | 1.40 | %
Loans held for sale |  | 1,607 |  |  | 22 |  |  | 5.43 | % |  | 4,263 |  |  | 51 |  |  | 4.75 | % |  | 28,428 |  |  | 181 |  |  | 2.53 | %
Loans |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Commercial and industrial (1) |  | 1,560,885 |  |  | 23,258 |  |  | 5.91 | % |  | 1,520,924 |  |  | 19,289 |  |  | 5.03 | % |  | 1,603,776 |  |  | 21,046 |  |  | 5.21 | %
Commercial real estate (1) |  | 7,732,925 |  |  | 88,508 |  |  | 4.54 | % |  | 7,760,470 |  |  | 85,284 |  |  | 4.36 | % |  | 6,207,248 |  |  | 62,531 |  |  | 4.00 | %
Commercial construction |  | 1,223,695 |  |  | 17,205 |  |  | 5.58 | % |  | 1,157,876 |  |  | 14,875 |  |  | 5.10 | % |  | 884,243 |  |  | 9,720 |  |  | 4.36 | %
Small business |  | 213,384 |  |  | 2,995 |  |  | 5.57 | % |  | 207,546 |  |  | 2,819 |  |  | 5.39 | % |  | 186,939 |  |  | 2,352 |  |  | 4.99 | %
Total commercial |  | 10,730,889 |  |  | 131,966 |  |  | 4.88 | % |  | 10,646,816 |  |  | 122,267 |  |  | 4.56 | % |  | 8,882,206 |  |  | 95,649 |  |  | 4.27 | %
Residential real estate |  | 2,001,042 |  |  | 18,334 |  |  | 3.64 | % |  | 1,909,066 |  |  | 16,533 |  |  | 3.44 | % |  | 1,415,488 |  |  | 11,830 |  |  | 3.32 | %
Home equity |  | 1,088,846 |  |  | 14,339 |  |  | 5.22 | % |  | 1,076,040 |  |  | 11,869 |  |  | 4.38 | % |  | 1,021,354 |  |  | 8,769 |  |  | 3.41 | %
Total consumer real estate |  | 3,089,888 |  |  | 32,673 |  |  | 4.20 | % |  | 2,985,106 |  |  | 28,402 |  |  | 3.77 | % |  | 2,436,842 |  |  | 20,599 |  |  | 3.35 | %
Other consumer |  | 34,638 |  |  | 595 |  |  | 6.82 | % |  | 31,883 |  |  | 523 |  |  | 6.51 | % |  | 25,378 |  |  | 427 |  |  | 6.68 | %
Total loans |  | $ | 13,855,415 |  |  | $ | 165,234 |  |  | 4.73 | % |  | $ | 13,663,805 |  |  | $ | 151,192 |  |  | 4.39 | % |  | $ | 11,344,426 |  |  | $ | 116,675 |  |  | 4.08 | %
Total interest-earning assets |  | $ | 17,475,269 |  |  | $ | 185,208 |  |  | 4.20 | % |  | $ | 17,852,939 |  |  | $ | 171,006 |  |  | 3.80 | % |  | $ | 16,004,215 |  |  | $ | 126,573 |  |  | 3.14 | %
Cash and due from banks |  | 184,985 |  |  |  |  |  |  | 192,003 |  |  |  |  |  |  | 168,907 |  |  |  |  |
Federal Home Loan Bank stock |  | 5,218 |  |  |  |  |  |  | 5,745 |  |  |  |  |  |  | 12,557 |  |  |  |  |
Other assets |  | 1,871,241 |  |  |  |  |  |  | 1,854,870 |  |  |  |  |  |  | 1,569,995 |  |  |  |  |
Total assets |  | $ | 19,536,713 |  |  |  |  |  |  | $ | 19,905,557 |  |  |  |  |  |  | $ | 17,755,674 |  |  |  |  |
Interest-bearing liabilities |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Deposits |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Savings and interest checking accounts |  | $ | 5,966,326 |  |  | $ | 4,921 |  |  | 0.33 | % |  | $ | 6,224,690 |  |  | $ | 2,110 |  |  | 0.13 | % |  | $ | 5,471,560 |  |  | $ | 465 |  |  | 0.03 | %
Money market |  | 3,408,441 |  |  | 7,492 |  |  | 0.87 | % |  | 3,459,212 |  |  | 3,025 |  |  | 0.35 | % |  | 3,049,300 |  |  | 537 |  |  | 0.07 | %
Time deposits |  | 1,175,667 |  |  | 1,912 |  |  | 0.65 | % |  | 1,246,841 |  |  | 974 |  |  | 0.31 | % |  | 1,196,889 |  |  | 964 |  |  | 0.32 | %
Total interest-bearing deposits |  | $ | 10,550,434 |  |  | $ | 14,325 |  |  | 0.54 | % |  | $ | 10,930,743 |  |  | $ | 6,109 |  |  | 0.22 | % |  | $ | 9,717,749 |  |  | $ | 1,966 |  |  | 0.08 | %
Borrowings |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Federal Home Loan Bank borrowings |  | 639 |  |  | 2 |  |  | 1.24 | % |  | 12,876 |  |  | 55 |  |  | 1.69 | % |  | 63,428 |  |  | 353 |  |  | 2.21 | %
Long-term borrowings |  | — |  |  | — |  |  | — | % |  | — |  |  | — |  |  | — | % |  | 14,063 |  |  | 49 |  |  | 1.38 | %
Junior subordinated debentures |  | 62,855 |  |  | 827 |  |  | 5.22 | % |  | 62,854 |  |  | 589 |  |  | 3.72 | % |  | 62,853 |  |  | 405 |  |  | 2.56 | %
Subordinated debentures |  | 49,873 |  |  | 618 |  |  | 4.92 | % |  | 49,847 |  |  | 617 |  |  | 4.91 | % |  | 49,776 |  |  | 618 |  |  | 4.93 | %
Total borrowings |  | $ | 113,367 |  |  | $ | 1,447 |  |  | 5.06 | % |  | $ | 125,577 |  |  | $ | 1,261 |  |  | 3.98 | % |  | $ | 190,120 |  |  | $ | 1,425 |  |  | 2.97 | %
Total interest-bearing liabilities |  | $ | 10,663,801 |  |  | $ | 15,772 |  |  | 0.59 | % |  | $ | 11,056,320 |  |  | $ | 7,370 |  |  | 0.26 | % |  | $ | 9,907,869 |  |  | $ | 3,391 |  |  | 0.14 | %
Noninterest-bearing demand deposits |  | 5,606,055 |  |  |  |  |  |  | 5,641,742 |  |  |  |  |  |  | 5,124,859 |  |  |  |  |

14

Other liabilities |  | 410,679 |  |  |  |  |  |  | 325,507 |  |  |  |  |  |  | 298,557 |  |  |  |  |
Total liabilities |  | $ | 16,680,535 |  |  |  |  |  |  | $ | 17,023,569 |  |  |  |  |  |  | $ | 15,331,285 |  |  |  |  |
Stockholders' equity |  | 2,856,178 |  |  |  |  |  |  | 2,881,988 |  |  |  |  |  |  | 2,424,389 |  |  |  |  |
Total liabilities and stockholders' equity |  | $ | 19,536,713 |  |  |  |  |  |  | $ | 19,905,557 |  |  |  |  |  |  | $ | 17,755,674 |  |  |  |  |
Net interest income |  |  |  | $ | 169,436 |  |  |  |  |  |  | $ | 163,636 |  |  |  |  |  |  | $ | 123,182 |  |  |
Interest rate spread (2) |  |  |  |  |  | 3.61 | % |  |  |  |  |  | 3.54 | % |  |  |  |  |  | 3.00 | %
Net interest margin (3) |  |  |  |  |  | 3.85 | % |  |  |  |  |  | 3.64 | % |  |  |  |  |  | 3.05 | %
Supplemental Information |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Total deposits, including demand deposits |  | $ | 16,156,489 |  |  | $ | 14,325 |  |  |  |  | $ | 16,572,485 |  |  | $ | 6,109 |  |  |  |  | $ | 14,842,608 |  |  | $ | 1,966 |  |  |
Cost of total deposits |  |  |  |  |  | 0.35 | % |  |  |  |  |  | 0.15 | % |  |  |  |  |  | 0.05 | %
Total funding liabilities, including demand deposits |  | $ | 16,269,856 |  |  | $ | 15,772 |  |  |  |  | $ | 16,698,062 |  |  | $ | 7,370 |  |  |  |  | $ | 15,032,728 |  |  | $ | 3,391 |  |  |
Cost of total funding liabilities |  |  |  |  |  | 0.38 | % |  |  |  |  |  | 0.18 | % |  |  |  |  |  | 0.09 | %

(1) The total amount of adjustment to present interest income and yield on a fully tax-equivalent basis is $1.1 million, $1.0 million, and $652,000 for the three months ended December 31, 2022, September 30, 2022, and December 31, 2021, respectively, determined by applying the Company's marginal tax rates in effect during each respective quarter.
(2) Interest rate spread represents the difference between weighted average yield on interest-earning assets and the weighted average cost of interest-bearing liabilities.
(3) Net interest margin represents annualized net interest income as a percentage of average interest-earning assets.
15

|  | Years Ended
|  | December 31, 2022 |  | December 31, 2021
|  |  |  | Interest |  |  |  |  |  | Interest |  |
|  | Average |  | Earned/ |  | Yield/ |  | Average |  | Earned/ |  | Yield/
|  | Balance |  | Paid |  | Rate |  | Balance |  | Paid |  | Rate
Interest-earning assets |  |  |  |  |  |  |  |  |  |  |  |
Interest earning deposits with banks, federal funds sold, and short term investments |  | $ | 1,222,434 |  |  | $ | 14,385 |  |  | 1.18 | % |  | $ | 1,864,346 |  |  | $ | 2,494 |  |  | 0.13 | %
Securities |  |  |  |  |  |  |  |  |  |  |  |
Securities - trading |  | 3,764 |  |  | — |  |  | — | % |  | 3,344 |  |  | — |  |  | — | %
Securities - taxable investments |  | 2,948,358 |  |  | 50,354 |  |  | 1.71 | % |  | 1,795,199 |  |  | 30,477 |  |  | 1.70 | %
Securities - nontaxable investments (1) |  | 196 |  |  | 7 |  |  | 3.57 | % |  | 469 |  |  | 20 |  |  | 4.26 | %
Total securities |  | $ | 2,952,318 |  |  | $ | 50,361 |  |  | 1.71 | % |  | $ | 1,799,012 |  |  | $ | 30,497 |  |  | 1.70 | %
Loans held for sale |  | 4,774 |  |  | 172 |  |  | 3.60 | % |  | 34,056 |  |  | 856 |  |  | 2.51 | %
Loans |  |  |  |  |  |  |  |  |  |  |  |
Commercial and industrial (1) |  | 1,538,848 |  |  | 77,074 |  |  | 5.01 | % |  | 1,823,914 |  |  | 79,752 |  |  | 4.37 | %
Commercial real estate (1) |  | 7,807,427 |  |  | 326,593 |  |  | 4.18 | % |  | 4,702,346 |  |  | 185,908 |  |  | 3.95 | %
Commercial construction |  | 1,191,394 |  |  | 57,804 |  |  | 4.85 | % |  | 616,037 |  |  | 24,696 |  |  | 4.01 | %
Small business |  | 204,982 |  |  | 10,886 |  |  | 5.31 | % |  | 180,473 |  |  | 9,276 |  |  | 5.14 | %
Total commercial |  | 10,742,651 |  |  | 472,357 |  |  | 4.40 | % |  | 7,322,770 |  |  | 299,632 |  |  | 4.09 | %
Residential real estate |  | 1,831,493 |  |  | 63,443 |  |  | 3.46 | % |  | 1,286,470 |  |  | 46,279 |  |  | 3.60 | %
Home equity |  | 1,061,228 |  |  | 44,048 |  |  | 4.15 | % |  | 1,025,809 |  |  | 35,160 |  |  | 3.43 | %
Total consumer real estate |  | 2,892,721 |  |  | 107,491 |  |  | 3.72 | % |  | 2,312,279 |  |  | 81,439 |  |  | 3.52 | %
Other consumer |  | 31,986 |  |  | 2,114 |  |  | 6.61 | % |  | 23,885 |  |  | 1,668 |  |  | 6.98 | %
Total loans |  | $ | 13,667,358 |  |  | $ | 581,962 |  |  | 4.26 | % |  | $ | 9,658,934 |  |  | $ | 382,739 |  |  | 3.96 | %
Total interest-earning assets |  | $ | 17,846,884 |  |  | $ | 646,880 |  |  | 3.62 | % |  | $ | 13,356,348 |  |  | $ | 416,586 |  |  | 3.12 | %
Cash and due from banks |  | 184,812 |  |  |  |  |  |  | 152,723 |  |  |  |  |
Federal Home Loan Bank stock |  | 7,134 |  |  |  |  |  |  | 10,283 |  |  |  |  |
Other assets |  | 1,858,210 |  |  |  |  |  |  | 1,335,193 |  |  |  |  |
Total assets |  | $ | 19,897,040 |  |  |  |  |  |  | $ | 14,854,547 |  |  |  |  |
Interest-bearing liabilities |  |  |  |  |  |  |  |  |  |  |  |
Deposits |  |  |  |  |  |  |  |  |  |  |  |
Savings and interest checking accounts |  | $ | 6,159,289 |  |  | $ | 8,339 |  |  | 0.14 | % |  | $ | 4,590,055 |  |  | $ | 1,610 |  |  | 0.04 | %
Money market |  | 3,489,981 |  |  | 11,683 |  |  | 0.33 | % |  | 2,516,871 |  |  | 1,930 |  |  | 0.08 | %
Time deposits |  | 1,310,442 |  |  | 4,630 |  |  | 0.35 | % |  | 936,046 |  |  | 4,787 |  |  | 0.51 | %
Total interest-bearing deposits |  | $ | 10,959,712 |  |  | $ | 24,652 |  |  | 0.22 | % |  | $ | 8,042,972 |  |  | $ | 8,327 |  |  | 0.10 | %
Borrowings |  |  |  |  |  |  |  |  |  |  |  |
Federal Home Loan Bank borrowings |  | 16,138 |  |  | 313 |  |  | 1.94 | % |  | 41,556 |  |  | 897 |  |  | 2.16 | %
Long-term borrowings |  | 2,235 |  |  | 31 |  |  | 1.39 | % |  | 21,072 |  |  | 331 |  |  | 1.57 | %
Junior subordinated debentures |  | 62,854 |  |  | 2,125 |  |  | 3.38 | % |  | 62,852 |  |  | 1,692 |  |  | 2.69 | %
Subordinated debentures |  | 49,837 |  |  | 2,470 |  |  | 4.96 | % |  | 49,741 |  |  | 2,470 |  |  | 4.97 | %
Total borrowings |  | $ | 131,064 |  |  | $ | 4,939 |  |  | 3.77 | % |  | $ | 175,221 |  |  | $ | 5,390 |  |  | 3.08 | %
Total interest-bearing liabilities |  | $ | 11,090,776 |  |  | $ | 29,591 |  |  | 0.27 | % |  | $ | 8,218,193 |  |  | $ | 13,717 |  |  | 0.17 | %
Noninterest-bearing demand deposits |  | 5,559,997 |  |  |  |  |  |  | 4,443,410 |  |  |  |  |
Other liabilities |  | 330,371 |  |  |  |  |  |  | 284,679 |  |  |  |  |
Total liabilities |  | $ | 16,981,144 |  |  |  |  |  |  | $ | 12,946,282 |  |  |  |  |
Stockholders' equity |  | 2,915,896 |  |  |  |  |  |  | 1,908,265 |  |  |  |  |

16

Total liabilities and stockholders' equity |  | $ | 19,897,040 |  |  |  |  |  |  | $ | 14,854,547 |  |  |  |  |
Net interest income |  |  |  | $ | 617,289 |  |  |  |  |  |  | $ | 402,869 |  |  |
Interest rate spread (2) |  |  |  |  |  | 3.35 | % |  |  |  |  |  | 2.95 | %
Net interest margin (3) |  |  |  |  |  | 3.46 | % |  |  |  |  |  | 3.02 | %
Supplemental Information |  |  |  |  |  |  |  |  |  |  |  |
Total deposits, including demand deposits |  | $ | 16,519,709 |  |  | $ | 24,652 |  |  |  |  | $ | 12,486,382 |  |  | $ | 8,327 |  |  |
Cost of total deposits |  |  |  |  |  | 0.15 | % |  |  |  |  |  | 0.07 | %
Total funding liabilities, including demand deposits |  | $ | 16,650,773 |  |  | $ | 29,591 |  |  |  |  | $ | 12,661,603 |  |  | $ | 13,717 |  |  |
Cost of total funding liabilities |  |  |  |  |  | 0.18 | % |  |  |  |  |  | 0.11 | %

(1) The total amount of adjustment to present interest income and yield on a fully tax-equivalent basis is $4.0 million and $1.3 million for the years ended months ended December 31, 2022 and 2021, respectively.
(2) Interest rate spread represents the difference between weighted average yield on interest-earning assets and the weighted average cost of interest-bearing liabilities.
(3) Net interest margin represents annualized net interest income as a percentage of average interest-earning assets.
Certain amounts in prior year financial statements have been reclassified to conform to the current year's presentation.
APPENDIX A: NON-GAAP Reconciliation of Balance Sheet Metrics
(Unaudited, dollars in thousands, except per share data)
The following table summarizes the calculation of the Company's tangible common equity to tangible assets ratio and tangible book value per share, at the dates indicated:

|  | December 31 2022 |  | September 30 2022 |  | December 31 2021 |
Tangible common equity |  | (Dollars in thousands, except per share data) |
Stockholders' equity (GAAP) |  | $ | 2,886,701 |  |  | $ | 2,817,201 |  |  | $ | 3,018,449 |  | (a)
Less: Goodwill and other intangibles |  | 1,010,140 |  |  | 1,012,006 |  |  | 1,017,844 |  |
Tangible common equity |  | $ | 1,876,561 |  |  | $ | 1,805,195 |  |  | $ | 2,000,605 |  | (b)
Tangible assets |  |  |  |  |  |  |
Assets (GAAP) |  | $ | 19,294,174 |  |  | $ | 19,703,269 |  |  | $ | 20,423,405 |  | (c)
Less: Goodwill and other intangibles |  | 1,010,140 |  |  | 1,012,006 |  |  | 1,017,844 |  |
Tangible assets |  | $ | 18,284,034 |  |  | $ | 18,691,263 |  |  | $ | 19,405,561 |  | (d)
Common Shares |  | 45,641,238 |  |  | 45,634,626 |  |  | 47,349,778 |  | (e)
Common equity to assets ratio (GAAP) |  | 14.96 | % |  | 14.30 | % |  | 14.78 | % | (a/c)
Tangible common equity to tangible assets ratio (Non-GAAP) |  | 10.26 | % |  | 9.66 | % |  | 10.31 | % | (b/d)
Book value per share (GAAP) |  | $ | 63.25 |  |  | $ | 61.73 |  |  | $ | 63.75 |  | (a/e)
Tangible book value per share (Non-GAAP) |  | $ | 41.12 |  |  | $ | 39.56 |  |  | $ | 42.25 |  | (b/e)

17

APPENDIX B: Non-GAAP Reconciliation of Earnings Metrics
(Unaudited, dollars in thousands)
The following table summarizes the impact of noncore items on the Company's calculation of noninterest income and noninterest expense, the impact of noncore items on noninterest income as a percentage of total revenue and the efficiency ratio, as well as the average tangible common equity used to calculate return on average tangible common equity and operating return on tangible common equity for the periods indicated:

| Three Months Ended |  | Years Ended |
| December 31 2022 |  | September 30 2022 |  | December 31 2021 |  | December 31 2022 |  | December 31 2021 |
Net interest income (GAAP) | $ | 168,355 |  |  | $ | 162,601 |  |  | $ | 122,530 |  |  | $ | 613,249 |  |  | $ | 401,559 |  | (a)
Noninterest income (GAAP) | $ | 32,302 |  |  | $ | 28,195 |  |  | $ | 29,180 |  |  | $ | 114,667 |  |  | $ | 105,850 |  | (b)
Noninterest income on an operating basis (Non-GAAP) | $ | 32,302 |  |  | $ | 28,195 |  |  | $ | 29,180 |  |  | $ | 114,667 |  |  | $ | 105,850 |  | (c)
Noninterest expense (GAAP) | $ | 94,872 |  |  | $ | 92,728 |  |  | $ | 117,126 |  |  | $ | 373,662 |  |  | $ | 332,529 |  | (d)
Less: |  |  |  |  |  |  |  |  |  |
Merger and acquisition expense | — |  |  | — |  |  | 37,166 |  |  | 7,100 |  |  | 40,840 |  |
Noninterest expense on an operating basis (Non-GAAP) | $ | 94,872 |  |  | $ | 92,728 |  |  | $ | 79,960 |  |  | $ | 366,562 |  |  | $ | 291,689 |  | (e)
Total revenue (GAAP) | $ | 200,657 |  |  | $ | 190,796 |  |  | $ | 151,710 |  |  | $ | 727,916 |  |  | $ | 507,409 |  | (a+b)
Total operating revenue (Non-GAAP) | $ | 200,657 |  |  | $ | 190,796 |  |  | $ | 151,710 |  |  | $ | 727,916 |  |  | $ | 507,409 |  | (a+c)
Net income (GAAP) | $ | 77,043 |  |  | $ | 71,897 |  |  | $ | 1,702 |  |  | $ | 263,813 |  |  | $ | 120,992 |  |
Operating net income (Non-GAAP) (See income statement for reconciliation of GAAP to Non-GAAP) | $ | 77,043 |  |  | $ | 71,897 |  |  | $ | 65,707 |  |  | $ | 268,918 |  |  | $ | 187,638 |  |
Average common equity (GAAP) | $ | 2,856,178 |  |  | $ | 2,881,988 |  |  | $ | 2,424,389 |  |  | $ | 2,915,896 |  |  | $ | 1,908,265 |  |
Less: Average goodwill and other intangibles | 1,011,091 |  |  | 1,013,169 |  |  | 786,576 |  |  | 1,014,045 |  |  | 592,704 |  |
Tangible average tangible common equity (Non-GAAP) | $ | 1,845,087 |  |  | $ | 1,868,819 |  |  | $ | 1,637,813 |  |  | $ | 1,901,851 |  |  | $ | 1,315,561 |  |
Ratios |  |  |  |  |  |  |  |  |  |
Noninterest income as a % of total revenue (GAAP) | 16.10 | % |  | 14.78 | % |  | 19.23 | % |  | 15.75 | % |  | 20.86 | % | (b/(a+b))
Noninterest income as a % of total revenue on an operating basis (Non-GAAP) | 16.10 | % |  | 14.78 | % |  | 19.23 | % |  | 15.75 | % |  | 20.86 | % | (c/(a+c))
Efficiency ratio (GAAP) | 47.28 | % |  | 48.60 | % |  | 77.20 | % |  | 51.33 | % |  | 65.53 | % | (d/(a+b))
Efficiency ratio on an operating basis (Non-GAAP) | 47.28 | % |  | 48.60 | % |  | 52.71 | % |  | 50.36 | % |  | 57.49 | % | (e/(a+c))
Return on average tangible common equity (Non-GAAP) (calculated by dividing net income by average tangible common equity) | 16.57 | % |  | 15.26 | % |  | 0.41 | % |  | 13.87 | % |  | 9.20 | % |
Return on average tangible common equity on an operating basis (Non-GAAP) (calculated by dividing net operating net income by average tangible common equity) | 16.57 | % |  | 15.26 | % |  | 15.92 | % |  | 14.14 | % |  | 14.26 | % |

18

APPENDIX C: Net Interest Margin Analysis & Non-GAAP Reconciliation of Core Margin

| Three Months Ended
| December 31, 2022 |  | September 30, 2022
| Volume | Interest | Margin Impact |  | Volume | Interest | Margin Impact
| (Dollars in thousands)
Reported total interest earning assets | $ | 17,475,269 |  | $ | 169,436 |  | 3.85 | % |  | $ | 17,852,939 |  | $ | 163,636 |  | 3.64 | %
Core adjustments: |  |  |  |  |  |  |
PPP volume @ 1% | (9,935) |  | (25) |  |  |  | (20,071) |  | (46) |  |
PPP fee amortization |  | (62) |  |  |  |  | (443) |  |
Total PPP impact | (9,935) |  | (87) |  | — | % |  | (20,071) |  | (489) |  | (0.01) | %
Acquisition fair value marks: |  |  |  |  |  |  |
Loan amortization (accretion) |  | 259 |  |  |  |  | (624) |  |
CD amortization (accretion) |  | 11 |  |  |  |  | (97) |  |
|  | 270 |  | 0.01 | % |  |  | (721) |  | (0.02) | %
Nonaccrual interest, net |  | (95) |  | — | % |  |  | (556) |  | (0.01) | %
Other noncore adjustments |  | (1,279) |  | (0.04) | % |  |  | (637) |  | (0.01) | %
Core margin (Non-GAAP) | $ | 17,465,334 |  | $ | 168,245 |  | 3.82 | % |  | $ | 17,832,868 |  | $ | 161,233 |  | 3.59 | %

19