Independent Bank Corp. (NASDAQ:INDB) Q1 2018 Earnings Conference Call - Preliminary Transcript

Apr 20, 2018 • 10:00 am ET

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Independent Bank Corp. (NASDAQ:INDB) Q1 2018 Earnings Conference Call - Preliminary Transcript

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Presentation
Operator
Operator

GOOD day and welcome to the Independent Bank Corp's First Quarter 2018 Earnings Call and Webcast. All participants will be in a listen-only mode. (Operator Instructions) Before proceeding, let me mention that this call may contain forward-looking statements with respect to the financial condition, results of operations and business of Independent Bank Corp. Actual results may be different. Factors that may cause actual results to differ include those identified in our annual report on Form 10-K and our earnings press release. Independent Bank Corp. cautions you against unduly relying upon any forward-looking statements and disclaims any intent to update publicly any forward-looking statements, whether in response to new information, future events or otherwise. Please also note that this event is being recorded.

I would now like to turn the conference over to Chris Oddleifson, President and CEO. Please go ahead.

Executive
Christopher Oddleifson

Thank you, and good morning, everyone and thank you for joining us today. As always, I'm accompanied by Rob Cozzone, our Chief Financial Officer and Head of Consumer & Business Banking. We kicked off 2018 with record quarterly earnings of $27.6 million or $1 per share in the first quarter.

Rob will walk you through our results in a moment, but the highlights include very healthy returns with an ROA of 1.4% and an ROE of 11.7%; a strong increase in our net interest margin; further growth in core deposits that remain over 90% of total deposits, continued pristine credit quality, ongoing growth in assets under management despite first quarter market volatility and tangible book value per share continuing its upward trajectory, which now sits 9% above its level of a year ago.

I'd like to note that our earnings growth within the first quarter of each year is typically subdued due to a combination of factors such as seasonality of deposit related in transactional fees; winter-related costs and snow removal, and we had a great deal of that this year payroll taxes kicking back in and fewer days in the quarter. 0

As such, in our opinion, linked quarter comparisons in this case aren't as meaningful a parameter of growth as prior year ones. Compared to last year's first quarter, our total revenues grew nearly 12% and pretax income, excluding M&A charges, was up 13.8%. With our long-term track record of solid performance, we are confident in our outlook for the rest of the year and beyond.

Regarding the minimal loan growth in the first quarter, some of this is attributable to our own need to rebuild the commercial pipeline after robust activity in the fourth quarter. And we're also beginning to see a further ratcheting up of competitive loan pricing. The good news is that we're still very much in a deal flow, and we have walked away in a number of instances where pricing became just too low. We simply won't chase below quarter rate deals for the sake of short-term growth and favorable balance sheet optics.

I do wish to reiterate that it's still too early to