Independent Bank Corp (Mass) (NASDAQ:INDB) Q4 2019 Earnings Conference Call - Final Transcript

Jan 17, 2020 • 10:00 am ET

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Independent Bank Corp (Mass) (NASDAQ:INDB) Q4 2019 Earnings Conference Call - Final Transcript

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Presentation
Operator
Operator

Good day, and welcome to the Independent Bank Corp Fourth Quarter 2019 Earnings Call and Webcast. [Operator Instructions]

Before proceeding, let me mention that this call may contain forward-looking statements with respect to financial conditions, results of operations and business of Independent Bank Corp. Actual results may be different. Factors that may cause actual results to be different include those identified in our Annual Report on Form 10-K and our earnings press release. Independent Bank Corp cautions you against any unduly relying any forward-looking statements and disclaim any intent to update publicly any forward-looking statements whether in response to new information, future events or otherwise.

Please note that during the call, we will also discuss certain non-GAAP financial measures as we view Independent Bank Corp's performance. These non-GAAP financial measures should not be considered replacements for and should be read together with GAAP results. Please refer to the Investor Relations section of our website to obtain a copy of our earnings press release which contains reconciliations of these non-GAAP measures to the most directly comparable GAAP measures and additional information regarding non-GAAP measures.

All please note that this event is being recorded.

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

Executive
Christopher Oddleifson

Thank you, Nick, and good morning and Happy New Year to everyone and thank you for joining us. I'm accompanied today by Rob Cozzone, our Chief Operating Officer, and Mark Ruggiero, our Chief Financial Officer.

We produced another solid financial performance in the fourth quarter with earnings of $47.5 million or $1.38 per share. Mark will cover the quarter in more detail shortly. I'd like to focus my comments today on the full year just completed.

Financially, we had a terrific year in 2019. We generated record earnings for the seventh consecutive year. Highlights included operating EPS of $5.62 which represents growth of 20% over the prior year, strong returns with operating ROA and ROE of 1.7% and 12.1% respectively, robust organic loan volumes with about $1.5 billion in commercial originations along with healthy pipelines. This was masked by higher levels of paydowns and runoff, especially related to the acquired Blue Hills portfolios. Similarly, organic core deposit generation remained strong, while also being offset by anticipated runoff and the higher cost acquired deposits as well as cash flow volatility within some larger commercial deposits.

Our investment management group had another banner year with 10% revenue growth and assets under management and administration rising 26% to $4.6 billion. Credit quality remained stellar with fairly stable nonperforming asset levels and a loss rate of a mere 3 basis points for the year. Our efficiency ratio was in the low 50% range. Tangible book value per share rose another 19% last year. We are quite proud of the fact that this key measure has grown at a compounded rate of 12% over the last five years despite numerous acquisitions.

And finally, we rewarded our many loyal shareholders with another healthy double-digit increase in our