Independent Bank Corp (Mass) (NASDAQ:INDB) Q2 2019 Earnings Conference Call - Final Transcript

Jul 19, 2019 • 10:00 am ET

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Independent Bank Corp (Mass) (NASDAQ:INDB) Q2 2019 Earnings Conference Call - Final Transcript

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Q & A
Executive
Christopher Oddleifson

in the quarter, and the pipeline numbers that I referenced in my prepared comments suggest we have really strong momentum going into the third quarter. So, in terms of opportunities, we continue to have very good success in our corporate banking initiative, which is sort of the upper middle market customer base. As you know, we've opened a commercial lending office in Worcester and we're really starting to see some opportunities, especially in the C&I and ABL portfolios there. And we think there's some market disruption in that space that we can take advantage of. So, we feel that, in terms of new originations going into the third quarter, we should continue to see very strong originations. And to your point, offsetting that, there is some level of the acquired portfolio from Blue Hills that we do anticipate will continue to attrite. In particular, there was some leverage lending loans that once they become due we would likely not renew or look to continue on. So there's still an element of that portfolio still expected to run through. And then other deals that did pay off in the second quarter is a combination of essentially non-relationship commercial real estate loans where loans where the pricing just didn't really fit what we think made sense or C&I relationships that again, just didn't really fit into our typical profile. So nothing unusual. As we said that runoff was expected, but I think there'll still be a combination of that runoff offsetting what should be another strong closing quarter going forward.

Executive
Mark J. Ruggiero

And then on the residential side, David, as I stated in my comments, we had record closing volumes, about $240 million dollars in the quarter. Combination of combining the sales force of Blue Hills with Rockland, and we now have about 40 originators in total and we expect that and obviously the rate decrease driving some refinance volume. But we expect that to increase to the tune of 20% to 25% in the third quarter given the pipeline that we had at the end of June. So obviously that will subside as we head into the fourth quarter, but we expect the third quarter to be quite strong in the residential front.

Analyst
David Bishop

Got it. Good, cool color. And then -- I guess, Chris, from a holistic basis, you guys were over the $10 billion mark closing in on a $12 billion. Obviously your relationship banking model has produced strong ROA. Do you look at it from an asset size, you worry about getting away from the relationship-driven models to more transactional basis as you get bigger and have to do sort of bigger credits. Is that sort of a holistic concern as you move forward in terms of -- just growing bigger?

Executive
Christopher Oddleifson

Yes, I think you have to be very, very focused and diligent to mitigate the natural tendency before when you get bigger, to sort of think about the numbers instead of the people. I think that's exactly sort of what