INDEPENDENT BANK CORP

Previous wording

All material intercompany balances and transactions have been eliminated in consolidation. When necessary, certain amounts in prior year financial statements have been reclassified to conform to the current year’s presentation. The following should be read in conjunction with the Consolidated Financial Statements and related notes.

Current wording

All material intercompany balances and transactions have been eliminated in consolidation. Certain amounts in prior year financial statements have been reclassified to conform to the current year’s presentation, including the following:

Previous wording

Net income for the year ended December 31, 2023 was $239.5 million, or $5.42 on a diluted earnings per share basis, as compared to $263.8 million, or $5.69 on a diluted earnings per share basis for the year ended December 31, 2022, representing decreases of 9.2% and 4.7%, respectively. Full year 2023 operating net income was also $239.5 million, or $5.42, on a diluted earnings per share basis, as no adjustments were recognized, while full year 2022 operating results reflect pre-tax merger and acquisition-related costs of $7.1 million associated with the fourth quarter 2021 acquisition of Meridian Bancorp, Inc. ("Meridian") and its subsidiary, East Boston Savings Bank. Excluding these merger and acquisition-related costs, operating net income was $268.9 million, or $5.80 on a diluted per share basis for the year ended December 31, 2022, representing decreases of 10.9% and 6.6%, respectively. See "Non-GAAP Measures" below for a reconciliation of non-GAAP measures.

Current wording

Net income for the year ended December 31, 2024 was $192.1 million, or $4.52 on a diluted earnings per share basis, as compared to $239.5 million, or $5.42, on a diluted earnings per share basis for the year ended December 31, 2023, representing decreases of 19.8% and 16.6%, respectively. Financial results for 2024 also reflected pre-tax merger-related costs of $1.9 million associated with the Company’s pending acquisition of Enterprise. Excluding these merger-related costs and the related tax effects, full year 2024 operating net income was $193.4 million, or $4.55, on a diluted earnings per share basis. No such adjustments were included in the Company’s full year 2023 results. See “Non-GAAP Measures” below for a reconciliation of non-GAAP measures.

Previous wording

•Net interest margin increased by 8 basis points as compared to the full year 2022;

Current wording

•Net interest margin compression of 26 basis points as compared to the full year 2023;

Previous wording

•Stable asset quality; provision for credit loss primarily impacted by loss exposure in the commercial portfolios;

Current wording

•Provision for credit loss primarily impacted by loss exposure in the commercial portfolios;

Previous wording

•Strong tangible book value growth of 7.3%; and

Current wording

•Strong capital levels, with tangible book value growth of $2.83 for the year.

Previous wording

The results depicted in the following table reflect the trend of the Company's interest-earning assets over the past five years and reflect a longer term overall strategy that typically emphasizes loan growth commensurate with overall economic growth. Compared to the prior year, the composition of interest-earnings assets at December 31, 2023 primarily reflects growth in the residential real estate loan portfolio, decreased securities balances reflecting paydowns, calls and maturities, and also reduced cash balances commensurate with deposit balance reductions. The following table summarizes the Company's average interest-earning assets for each year presented:

Current wording

The results depicted in the following table reflect the trend of the Company’s interest-earning assets over the past five years and reflect a longer term overall strategy that typically emphasizes loan growth commensurate with overall economic growth. Compared to the prior year, the composition of interest-earning assets at December 31, 2024 primarily reflects growth in the residential real estate and commercial loan portfolios, as well as decreased securities balances reflecting paydowns, calls and maturities. The following table summarizes the Company’s average interest-earning assets for each year presented:

Previous wording

The Company's overall sources of funding reflect strong business and retail deposit growth with a management emphasis on core deposit growth to fund loans. Total borrowings increased by $1.1 billion at December 31, 2023 as compared to December 31, 2022, primarily in response to deposit balance reductions and to fund the Company's stock buyback activity. For further details surrounding the Company’s liquidity risks and related strategy, see“Risk Management – Liquidity Risk” section below within Item 7 Management’s Discussion and Analysis of Financial Condition and Results of Operations within this Report. The following chart shows the sources of funding for the trailing five years:

Current wording

The Company’s overall sources of funding reflect strong business and retail deposit growth with a management emphasis on core deposit growth to fund loans. In conjunction with deposit growth, total borrowings decreased by $517.0 million at December 31, 2024 as compared to December 31, 2023, driven by a reduction in Federal Home Loan Bank borrowings, along with the full redemption of $50.0 million in subordinated debentures during the first quarter of 2024. For further details surrounding the Company’s liquidity risks and related strategy, see“Risk Management – Liquidity Risk” section below within Item 7 Management’s Discussion and Analysis of Financial Condition and Results of Operations within this Report. The following chart shows the period end balances of the Company’s funding sources for each of the trailing five years:

Previous wording

The Company's ratio of core deposits to total deposits decreased during 2023, primarily attributable to core deposit outflows in conjunction with existing deposit balances shifting into higher cost time deposits. The following chart shows the percentage of core deposits to total deposits for the trailing five years:

Current wording

The Company’s ratio of core deposits to total deposits decreased during 2023 and 2024, primarily attributable to the broader industry demand shift from core deposits to higher yielding time deposits. The following chart shows the percentage of core deposits to total deposits for the trailing five years:

Previous wording

The following table shows the net interest margin and cost of deposits trends for the trailing five year period:

Current wording

The following table shows the net interest margin and cost of deposits trends for the trailing five year period, reflecting the 2024 impact from overall increases in deposit rates and the correlating direct impact on net interest margin:

Previous wording

Cash dividends declared by the Company increased from an aggregate of $2.08 per share in 2022 to $2.20 per share in 2023, representing an increase of 5.8%. During the first quarter of 2023, the Company repurchased 1.6 million shares of its common stock for $120.0 million at an average price of $74.18, marking the full completion of its stock repurchase program announced in October 2022. Additionally, in consideration of the Company's strong capital position, the Company announced another stock repurchase plan in October 2023 which authorized repurchases by the Company of up to $100 million in common stock. Under this new plan, the Company repurchased an additional 1.3 million shares of common stock for $69.0 million at an average price per share of $53.73 during the fourth quarter of 2023.

Current wording

Cash dividends declared by the Company increased from an aggregate of $2.20 per share in 2023 to $2.28 per share in 2024, representing an increase of 3.6%. During the first quarter of 2024, the Company repurchased 532,266 shares of its common stock for $31.0 million at an average price per share of $58.22, marking the completion of a $100 million buyback program announced in October 2023.

Previous wording

Securities Portfolio The Company's securities portfolio primarily consists of U.S. Treasury, U.S. government agency securities, agency mortgage-backed securities, agency collateralized mortgage obligations, and small business administration pooled securities. Also included in the Company's security portfolio are trading and equity securities related to certain employee benefit programs. The majority of these securities are investment grade debt obligations with average lives of five years or less. U.S. government agency securities entail a lesser degree of risk than loans made by the Bank by virtue of the guarantees that back them, require less capital under risk-based capital rules than noninsured or nonguaranteed mortgage loans, are more liquid than individual mortgage loans, and may be used to collateralize borrowings or other obligations of the Bank. The Bank views its securities portfolio as a source of income and liquidity. Interest and principal payments generated from securities provide a source of liquidity to fund loans and meet short-term cash needs.

Current wording

Securities Portfolio The Company’s securities portfolio primarily consists of U.S. Treasury, U.S. government agency securities, agency mortgage-backed securities, agency collateralized mortgage obligations, and small business administration pooled securities. Also included in the Company’s securities portfolio are trading and equity securities related to certain employee benefit programs. The majority of these securities are investment grade debt obligations with average lives of five years or less. U.S. government agency securities entail a lesser degree of risk than loans made by the Bank by virtue of the guarantees that back them, require less capital under risk-based capital rules than noninsured or nonguaranteed mortgage loans, are more liquid than individual mortgage loans, and may be used to collateralize borrowings or other obligations of the Bank. The Bank views its securities portfolio as a source of income and liquidity. Interest and principal payments generated from securities provide a source of liquidity to fund loans and meet short-term cash needs.

Previous wording

Total securities decreased by $198.4 million, or 6.3%, at December 31, 2023 as compared to December 31, 2022, primarily reflecting the impact of paydowns, calls, and maturities, partially offset by unrealized gains of $42.0 million related to the available for sale portfolio. The ratio of securities to total assets decreased to 15.1% at December 31, 2023 as compared to 16.2% at December 31, 2022. The Company estimates expected credit losses for its available for sale and held to maturity securities in accordance with the CECL methodology, as described in Note 1, "Summary of Significant Accounting Policies"within the Notes to Consolidated Financial Statements included in Item 8 of this Report.

Current wording

Total securities decreased by $219.5 million, or 7.5%, at December 31, 2024 as compared to December 31, 2023, as new purchases of $130.4 million and $22.6 million in unrealized gains related to the available for sale portfolio were offset by calls, paydowns, and maturities. The ratio of securities to total assets decreased to 14.0% at December 31, 2024 as compared to 15.1% at December 31, 2023. The Company estimates expected credit losses for its available for sale and held to maturity securities in accordance with the CECL methodology, as described in Note 1, “Summary of Significant Accounting Policies”within the Notes to Consolidated Financial Statements included in Item 8 of this Report.

Previous wording

As of December 31, 2023, the weighted average life of the securities portfolio was 4.1 years and the modified duration was 3.6 years.

Current wording

As of December 31, 2024, the weighted average life of the securities portfolio was 3.7 years and the modified duration was 3.3 years.

Previous wording

The Company experienced a lower volume of residential real estate loan sales for the years ended December 31, 2023 and 2022, as compared to 2021, driven primarily by reduced customer demand in the rising interest rate environment. The following table shows the total residential loans that were closed and whether the amounts were held in the portfolio or sold (or held for sale) in the secondary market for the periods indicated:

Current wording

The Company experienced a lower volume of residential real estate loan sales for the years ended December 31, 2024 and 2023, as compared to 2022, driven primarily by reduced customer demand in the higher interest rate environment. The following table shows the total residential loans that were closed and whether the amounts were held in the portfolio or sold (or held for sale) in the secondary market for the periods indicated:

Previous wording

In the event of a sale with servicing rights retained, a mortgage servicing asset is established, which represents the then current estimated fair value based on market prices for comparable mortgage servicing contracts, when available, or alternatively is based on a valuation model that calculates the present value of estimated future net servicing income. The valuation model incorporates assumptions that market participants would use in estimating future net servicing income, such as the cost to service, the discount rate, an inflation rate, ancillary income, prepayment speeds and default rates and losses. Servicing rights are recorded in other assets in the Consolidated Balance Sheets, are amortized in proportion to and over the period of estimated net servicing income, and are assessed for impairment based on fair value at each reporting date. Impairment is determined by stratifying the rights based on predominant characteristics, such as interest rate, loan type and investor type. Impairment is recognized through a valuation allowance, to the extent that fair value is less than the capitalized amount. If the Company later determines that all or a portion of the impairment no longer exists, a reduction of the allowance may be recorded as an increase to income. The principal balance of loans serviced by the Bank on behalf of investors was $298.8 million at December 31, 2023 and $327.5 million at December 31, 2022.

Current wording

In the event of a sale with servicing rights retained, a mortgage servicing asset is established, which represents the then current estimated fair value based on market prices for comparable mortgage servicing contracts, when available, or alternatively is based on a valuation model that calculates the present value of estimated future net servicing income. The valuation model incorporates assumptions that market participants would use in estimating future net servicing income, such as the cost to service, the discount rate, an inflation rate, ancillary income, prepayment speeds and default rates and losses. Servicing rights are recorded in other assets in the Consolidated Balance Sheets, are amortized in proportion to and over the period of estimated net servicing income, and are assessed for impairment based on fair value at each reporting date. Impairment is determined by stratifying the rights based on predominant characteristics, such as interest rate, loan type and investor type. Impairment is recognized through a valuation allowance, to the extent that fair value is less than the capitalized amount. If the Company later determines that all or a portion of the impairment no longer exists, a reduction of the allowance may be recorded as an increase to income. The principal balance of loans serviced by the Bank on behalf of investors was $280.2 million at December 31, 2024 and $298.8 million at December 31, 2023.

Previous wording

In accordance with the CECL methodology, the Company estimates credit losses for financial assets on a collective basis for loans sharing similar risk characteristics using a quantitative model combined with an assessment of certain qualitative factors designed to address forecast risk and model risk inherent in the quantitative model output. The model estimates expected credit losses using loan level data over the contractual life of the exposure, considering the effect of prepayments. Economic forecasts are incorporated into the estimate over a reasonable and supportable forecast period of one year, beyond which is a reversion to the Company's historical long-run average for a period of six months. The Company's qualitative assessment is structured based upon nine environmental factors impacting the expected risk of loss within the loan portfolio, with an additional factor designed to capture model imprecision. Loans that do not share similar risk characteristics with any pools of assets are subject to individual assessment and are removed from the collectively assessed pools to avoid double counting. For the loans that will be individually assessed, the Company uses either a discounted cash flow (“DCF”) approach or a fair value of collateral approach. The latter approach is used for loans deemed to be collateral dependent or when foreclosure is probable.

Current wording

In accordance with its Allowance for Credit Losses Program, the Company uses the Current Expected Credit Losses (or “CECL”) model methodology to estimate credit losses for financial assets on a collective basis for loans sharing similar risk characteristics using a quantitative model combined with an assessment of certain qualitative factors designed to address forecast risk and model risk inherent in the quantitative model output. The model estimates expected credit losses using loan level data over the contractual life of the exposure, which is adjusted for estimated prepayments. Economic forecasts are incorporated into the estimate over a reasonable and supportable forecast period of one year, beyond which is a reversion to the Company’s historical long-run average over a period of six months. The Company’s qualitative assessment is structured based upon nine qualitative risk factors impacting the expected risk of loss within the loan portfolio, with an additional factor designed to capture model imprecision. Loans that do not share similar risk characteristics with any pools of assets are subject to individual assessment and are removed from the collectively assessed pools to avoid double counting. For the loans that will be individually assessed, the Company uses either a discounted cash flow approach or a fair value of collateral approach. The latter approach is used for loans deemed to be collateral dependent or when foreclosure is probable.

Previous wording

Management's allowance for credit loss estimate incorporates an economic forecast over a reasonable and supportable period of 12 months. As of December 31, 2023, the forecast selected by management assumes that the Federal Reserve will begin easing rates gradually in mid-2024, inflation will return to 2% target by the end of 2024, job growth will slow in 2024 with unemployment peaking at 4.1%, home prices will decline slightly in 2024, and that prices for office real estate will generally decrease as uncertainty over occupancy and operating cash flows persists. Additionally, the allowance for credit losses is qualitatively adjusted on a quarterly basis in order to ensure coverage for relationships that are deemed to be more at risk within certain industries, specific collateral types, or other specific characteristics that may be highly impacted by the current economic environment.

Current wording

Management’s allowance for credit loss estimate incorporates an economic forecast over a reasonable and supportable period of 12 months. As of December 31, 2024, the forecast selected by management assumes that the Federal Reserve will make two 25 basis point cuts to the policy rate in 2025 and gradually reduce rates to a neutral level of 3% by late 2026, that progress toward inflation normalization will be slowed as a result of expected fiscal, tariff and immigration policies implemented by the new U.S. presidential administration, and that the 10-year treasury yield will remain elevated near 4% through 2025 and will only gradually decline by the end of the decade. Additionally, the allowance for credit losses is qualitatively adjusted on a quarterly basis in order to ensure coverage for relatio nships that are deemed to be more at risk within certain industries, specific collateral types, or other specific characteristics that may be highly impacted by the current economic environment.

Previous wording

To determine if a loan should be charged-off, all possible sources of repayment are analyzed. Possible sources of repayment include the potential for future cash flows, the value of the Bank’s collateral, and the strength of co-makers or guarantors. When available information confirms that specific loans or portions thereof are uncollectible, these amounts are promptly charged-off against the allowance for credit losses and any recoveries of such previously charged-off amounts are credited to the allowance.

Current wording

To determine if a loan should be charged-off, all possible sources of repayment are analyzed. Possible sources of repayment include the potential for future cash flows, the value of the Bank’s collateral, and the strength of co-makers or guarantors, if applicable. When available information confirms that specific loans or portions thereof are uncollectible, these amounts are promptly charged-off against the allowance for credit losses and any recoveries of such previously charged-off amounts are credited to the allowance.

Previous wording

Federal Home Loan Bank Stock The Federal Home Loan Bank ("FHLB") is a cooperative that provides services to its member banking institutions. The primary reason for the FHLB of Boston membership is to gain access to a reliable source of wholesale funding as a tool to manage liquidity and interest rate risk. The purchase of stock in the FHLB is a requirement for a member to gain access to funding. The Company either purchases additional FHLB stock or is subject to redemption of FHLB stock proportional to the volume of funding received. The Company views the holdings as a necessary long-term investment for the purpose of balance sheet liquidity and not for investment return. The Company's investments in FHLB of Boston stock increased to $43.6 million at December 31, 2023 compared to $5.2 million at December 31, 2022, reflecting a net increase in FHLB borrowings of $1.1 billion during the year ended 2023.

Current wording

Federal Home Loan Bank Stock The FHLB is a cooperative that provides services to its member banking institutions. The primary reason for the FHLB of Boston membership is to gain access to a reliable source of wholesale funding as a tool to manage liquidity and interest rate risk. The purchase of stock in the FHLB is a requirement for a member to gain access to funding. The Company either purchases additional FHLB stock or is subject to redemption of FHLB stock proportional to the volume of funding received. The Company views the holdings as a necessary long-term investment for the purpose of balance sheet liquidity and not for investment return. The Company’s investments in FHLB of Boston stock decreased to $31.6 million at December 31, 2024 compared to $43.6 million at December 31, 2023, reflecting reduced levels of outstanding FHLB borrowings, which decreased by $467.0 million, or 42.2%, from $1.1 billion at December 31, 2023 to $638.5 million at December 31, 2024, largely attributable to growth in deposit balances experienced during 2024.

Previous wording

Goodwill and Other Intangible Assets Goodwill and Other Intangible Assets were $1.0 billion at both December 31, 2023 and December 31, 2022.

Current wording

Goodwill and Other Intangible Assets Goodwill and Other Intangible Assets were $997.4 million and $1.0 billion at December 31, 2024 and December 31, 2023.

Previous wording

The Company's annual impairment test was performed as of August 31, 2023 using a quantitative impairment test which leveraged a combination of income and market valuation approaches to determine the implied fair value of the reporting unit. The income valuation approach utilized a discounted cash flow analysis, while the market approach utilized a guideline public company approach whereby market multiples were derived from market prices of stocks of public companies that are engaged in the same or similar lines of business. The results of the annual assessment determined that the Company’s goodwill was not impaired, however the fair value of its reporting unit was in excess of its carrying value by less than 10%, indicating that goodwill may be at risk of impairment. Events or circumstances that could negatively impact the fair value of the Company’s reporting unit in the future include a sustained decrease in the Company’s stock price, continued decline in industry peer multiples, and further deterioration of the Company’s financial projections.

Current wording

The Company’s annual impairment test was performed as of August 31, 2024 using a quantitative impairment test which leveraged a combination of income and market valuation approaches to determine the implied fair value of the reporting unit. The income valuation approach utilized a discounted cash flow analysis, while the market approach utilized a combination of the guideline public company and comparative transactions approaches, whereby market multiples used to estimate fair values were derived from market stock prices of, and comparable transactions announced by public companies that are engaged in the same or similar lines of business. The results of the annual assessment determined that the Company’s goodwill was not impaired and that the fair value of its reporting unit was in excess of its carrying value by greater than 10%. Events or circumstances that could negatively impact the fair value of the Company’s reporting unit in the future include a sustained decrease in the Company’s stock price, continued decline in industry peer multiples, and further deterioration of the Company’s financial projections.

Previous wording

The quantitative impairment test relied upon certain key assumptions, including projected financial information deemed by management to be reasonable based on the Company’s past and expected future performance, as well as a discount rate consistent with the Company’s cost of capital. Additionally, management performed sensitivity analyses over various financial assumptions used in the model noting results which further corroborated the conclusions reached. Other intangible assets are also reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of the assets may not be recoverable. There were no other events or changes during the fourth quarter of 2023 that indicated impairment of goodwill and other intangible assets. For additional information regarding the goodwill and other intangible assets, see Note 5, "Goodwill and Other Intangible Assets" within the Notes to Consolidated Financial Statements included in Item 8 hereof.

Current wording

Other intangible assets are also reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of the assets may not be recoverable. There were no other events or changes during the fourth quarter of 2024 that indicated impairment of goodwill and other intangible assets. For additional information regarding the goodwill and other intangible assets, see Note 5, “Goodwill and Other Intangible Assets” within the Notes to Consolidated Financial Statements included in Item 8 hereof.

Previous wording

Cash Surrender Value of Life Insurance Policies The Bank holds life insurance policies for the purpose of offsetting its future obligations to its employees under its retirement and benefits plans. The cash surrender value of life insurance policies was $297.4 million and $293.3 million at December 31, 2023 and December 31, 2022, respectively.

Current wording

Cash Surrender Value of Life Insurance Policies The Bank holds life insurance policies for the purpose of offsetting its future obligations to its employees under its retirement and benefits plans. The cash surrender value of life insurance policies was $304.0 million and $297.4 million at December 31, 2024 and December 31, 2023, respectively.

Previous wording

The Company recorded tax exempt income from life insurance policies in the amounts of $7.9 million, $7.7 million, and $6.4 million for the years ended December 31, 2023, 2022 and 2021, respectively. The Company also recorded gains on life insurance benefits of $2.3 million, $1.3 million, and $258,000 for the years ended December 31, 2023, 2022 and 2021, respectively.

Current wording

The Company recorded tax exempt income from life insurance policies in the amounts of $8.1 million, $7.9 million, and $7.7 million for the years ended December 31, 2024, 2023 and 2022, respectively. The Company also recorded gains on life insurance benefits of $457,000, $2.3 million, and $1.3 million for the years ended December 31, 2024, 2023 and 2022, respectively.

Previous wording

The Company's deposits are comprised primarily of core deposits (demand, savings and money market), as well as time deposits. The Company's ratio of core deposits, inclusive of reciprocal money market deposits, to total deposits represented 84.6% at December 31, 2023 compared to 91.8% at December 31, 2022, with the 2023 decrease driven primarily by core deposit outflows in conjunction with growth in higher yielding time deposits. In addition, the Company may also utilize brokered deposit sources, as needed, with balances of $100.9 million and $102.6 million outstanding at December 31, 2023 and December 31, 2022, respectively.

Current wording

The Company’s deposits are comprised primarily of core deposits (demand, savings and money market), as well as time deposits. The Company’s ratio of core deposits, inclusive of reciprocal money market deposits, to total deposits represented 81.7% at December 31, 2024 compared to 84.6% at December 31, 2023, with the decrease driven primarily by core deposit outflows in conjunction with growth in time deposits. In addition, the Company may also utilize brokered deposit sources, as needed, with balances of $61.2 million and $100.9 million outstanding at December 31, 2024 and December 31, 2023, respectively.

Previous wording

The Company's deposit accounts are insured to the maximum extent permitted by the Deposit Insurance Fund which is administered by the Federal Deposit Insurance Corporation ("FDIC"). The FDIC offers insurance coverage on deposits up to the federally insured limit of $250,000. The Company participates in the IntraFi Network, allowing it to provide easy access to multi-million dollar FDIC deposit insurance protection on certificate of deposit and money market investments for consumers, businesses and public entities. This channel allows the Company to access a reciprocal deposit exchange that can be used to benefit customers seeking increased FDIC insurance protection, and amounted to $959.1 million and $653.6 million in deposits, at December 31, 2023 and December 31, 2022, respectively. The estimated balance of uninsured deposits at the Bank were $4.6 billion and $5.4 billion as of December 31, 2023 and December 31, 2022, respectively. Included in these amounts are $720.5 million and $605.0 million of collateralized deposits, which offer additional protection to the customer.

Current wording

The Company’s deposit accounts are insured to the maximum extent permitted by the Deposit Insurance Fund (“DIF”) which is administered by the Federal Deposit Insurance Corporation (“FDIC”). The FDIC offers insurance coverage on deposits up to the federally insured limit of $250,000. The Company participates in the IntraFi Network, allowing it to provide easy access to multi-million dollar FDIC deposit insurance protection on certificate of deposit and money market investments for consumers, businesses and public entities. This channel allows the Company to access a reciprocal deposit exchange that can be used to benefit customers seeking increased FDIC insurance protection, and amounted to $1.1 billion and $959.1 million in deposits, at December 31, 2024 and December 31, 2023, respectively. The estimated balance of uninsured deposits at the Bank were $5.0 billion and $4.6 billion as of December 31, 2024 and December 31, 2023, respectively. Included in these amounts are $814.0 million and $720.5 million of collateralized deposits, which offer additional protection to the customer.

Previous wording

Borrowings The Company's borrowings consist of both short-term and long-term borrowings and provide the Bank with one of its primary sources of funding. Maintaining available borrowing capacity provides the Bank with a contingent source of liquidity. Borrowings increased by $1.1 billion, or 974.6%, at December 31, 2023, as compared to December 31, 2022, due primarily to deposit outflows experienced during 2023 as well as to fund stock buyback activity during the fourth quarter of 2023. See Note 7, "Borrowings" within the Notes to Consolidated Financial Statements included in Item 8 of this Report for more information regarding borrowings.

Current wording

Borrowings The Company’s borrowings consist of both short-term and long-term borrowings and provide the Bank with one of its primary sources of funding. Maintaining available borrowing capacity provides the Bank with a contingent source of liquidity. Borrowings were $701.4 million at December 31, 2024, representing a decrease of $517.0 million, compared to December 31, 2023. The decrease was experienced primarily within Federal Home Loan Bank borrowings, which decreased $467.0 million in conjunction with deposit balance growth during 2024. In addition, the Company fully redeemed its outstanding subordinated debentures with an aggregate principal amount of $50.0 million during the first quarter of 2024. See Note 7, “Borrowings” within the Notes to Consolidated Financial Statements included in Item 8 of this Report for more information regarding borrowings.

Previous wording

Liquidity and Capital Resources The Company proactively manages its liquidity and cash flow requirements with the intent to maintain stable, cost-effective funding and to promote the strength of its overall balance sheet. The liquidity position of the Company is continuously monitored by management and adjustments are made to appropriately balance sources and uses of funds, as needed. In response to the banking industry turmoil experienced during the year, management took immediate actions during the first quarter by proactively borrowing under its existing FHLB capacity to increase on balance sheet liquidity, as well as pledging additional assets to increase overall off balance sheet liquidity. For further details surrounding the Company’s liquidity risks and related strategy, see the "Risk Management – Liquidity Risk" section below within Item 7 Management’s Discussion and Analysis of Financial Condition and Results of Operations within this Report.

Current wording

Liquidity and Capital Resources The Company proactively manages its liquidity and cash flow requirements with the intent to maintain stable, cost-effective funding and to promote the strength of its overall balance sheet. The liquidity position of the Company is continuously monitored by management and adjustments are made to appropriately balance sources and uses of funds, as needed. For further details surrounding the Company’s liquidity risks and related strategy, see the “Risk Management – Liquidity Risk” section below within Item 7 Management’s Discussion and Analysis of Financial Condition and Results of Operations within this Report.

Previous wording

Accounts maintained by the Investment Management Group consist of managed and nonmanaged accounts. Managed accounts are those for which the Bank is responsible for administration and investment management and/or investment advice, while nonmanaged accounts are those for which the Bank acts solely as a custodian or directed trustee. The Bank receives fees dependent upon the level and type of service(s) provided. The Investment Management Group generated gross fee revenues of $34.6 million, $32.8 million, and $31.6 million for the years ended December 31, 2023, 2022, and 2021, respectively. Total assets under administration as of December 31, 2023 were $6.5 billion, including $622.9 million of investment solutions designed by Rockland Trust that are administered and executed through its agreement with LPL Financial ("LPL"), compared to $5.8 billion and $603.7 million, respectively, at December 31, 2022. The Company also has a subsidiary that is a registered investment advisor, Bright Rock Capital Management, LLC, which provides institutional quality investment management services to both institutional and high net worth clients. As of December 31, 2023 and December 31, 2022, included in the assets under administration amounts above, there were $449.8 million and $390.1 million, respectively, relating to the Company's registered investment advisor.

Current wording

Accounts maintained by the Investment Management Group consist of managed and nonmanaged accounts. Managed accounts are those for which the Bank is responsible for administration and investment management and/or investment advice, while nonmanaged accounts are those for which the Bank acts solely as a custodian or directed trustee. The Bank receives fees dependent upon the level and type of service(s) provided. The Investment Management Group generated gross fee revenues of $38.3 million, $34.6 million, and $32.8 million for the years ended December 31, 2024, 2023, and 2022, respectively. Total assets under administration as of December 31, 2024 were $7.0 billion, including $418.2 million of investment solutions designed by Rockland Trust that are administered and executed through its agreement with LPL Financial (“LPL”), compared to $6.5 billion and $383.0 million, respectively, at December 31, 2023. The Company also has a subsidiary that is a registered investment advisor, Bright Rock Capital Management, LLC, which provides institutional quality investment management services to both institutional and high net worth clients. As of December 31, 2024 and December 31, 2023, included in the assets under administration amounts above, there were $491.5 million and $449.8 million, respectively, relating to the Company's registered investment advisor.

Previous wording

The Bank has an agreement with LPL and its affiliates and their insurance subsidiary, LPL Insurance Associates, Inc., to offer the sale of mutual fund shares, unit investment trust shares, general securities, advisory platforms, fixed and variable annuities and life insurance. Registered representatives who are both employed by the Bank and licensed and contracted with LPL are onsite to offer these products to the Bank’s customer base. These same agents are also approved and appointed with various other Broker General Agents for the purposes of processing insurance solutions for clients. The retail investments and insurance revenues were $5.6 million, $4.1 million, and $3.7 million for the years ended December 31, 2023, 2022, and 2021, respectively.

Current wording

The Bank has an agreement with LPL and its affiliates and their insurance subsidiary, LPL Insurance Associates, Inc., to offer the sale of mutual fund shares, unit investment trust shares, general securities, advisory platforms, fixed and variable annuities and life insurance. Registered representatives who are both employed by the Bank and licensed and contracted with LPL are onsite to offer these products to the Bank’s customer base. These same agents are also approved and appointed with various other Broker General Agents for the purposes of processing insurance solutions for clients. The retail investments and insurance revenues were $4.4 million, $5.6 million, and $4.1 million for the years ended December 31, 2024, 2023, and 2022, respectively.

Previous wording

On a fully tax-equivalent basis, net interest income was $611.0 million for the year ended December 31, 2023, representing a 1.0% decrease from net interest income of $617.3 million for the year ended December 31, 2022.

Current wording

On a fully tax-equivalent basis, net interest income was $566.5 million for the year ended December 31, 2024, representing a 7.3% decrease from net interest income of $611.0 million for the year ended December 31, 2023. The 2024 decrease in net interest income was attributable to rising deposit costs, resulting in a 26 basis point reduction in net margin to 3.28%, as compared to 3.54% for the prior year.

Previous wording

(1)The total amount of adjustment to present interest income and yield on a fully tax-equivalent basis is $4.5 million, $4.0 million, and $1.3 million for 2023, 2022 and 2021, respectively.

Current wording

(1)The total amount of adjustment to present interest income and yield on a fully tax-equivalent basis is $4.7 million, $4.5 million, and $4.0 million for 2024, 2023 and 2022, respectively.

Previous wording

Provision For Credit Losses The provision for credit losses represents the charge to expense that is required to maintain an adequate level of allowance for credit losses. The Company's provision for credit losses totaled $23.3 million, $6.5 million and $18.2 million for the years ended December 31, 2023, 2022, and 2021, respectively. The provision for credit losses for the years ended December 31, 2023, 2022, and 2021, respectively has been driven primarily by idiosyncratic events within the commercial portfolios.

Current wording

Provision For Credit Losses The provision for credit losses represents the charge to expense that is required to maintain an adequate level of allowance for credit losses. The Company recorded a provision for credit losses $36.3 million, $23.3 million and $6.5 million for the years ended December 31, 2024, 2023, and 2022, respectively, primarily attributable to idiosyncratic events within the commercial portfolios.

Previous wording

The Company’s allowance for credit losses, as a percentage of total loans, was 1.00%, 1.09% and 1.08% at December 31, 2023, 2022 and 2021, respectively. See Note 3, "Loans, Allowance for Credit Losses and Credit Quality" within the Notes to Consolidated Financial Statements included in Item 8 of this Report, for further details surrounding the primary drivers of the provision for credit losses during the period.

Current wording

The Company’s allowance for credit losses, as a percentage of total loans, was 1.17%, 1.00% and 1.09% at December 31, 2024, 2023 and 2022, respectively. See Note 3, “Loans, Allowance for Credit Losses and Credit Quality” within the Notes to Consolidated Financial Statements included in Item 8 of this Report, for further details surrounding the primary drivers of the provision for credit losses during the period.

Previous wording

•Interchange and ATM fees increased year over year due primarily to higher debit card service charges driven by increased transaction volume.

Current wording

•Interchange and ATM fees increased year-over-year due to transaction volumes.

Previous wording

•Other noninterest income increased during the year, primarily due to increases in FHLB dividend income, unrealized gains on equity securities, outsized loan fees, and discounted purchases of Massachusetts historical tax credits, partially offset by decreases in gains on sales of fixed assets, equity capital gain distributions, and income from like-kind exchanges.

Current wording

•Other noninterest income decreased year-over-year, driven primarily by a $1.9 million decrease in discounted purchases of Massachusetts historical tax credits, lower commercial loan fees, and reduced unrealized gains on equity securities. These decreases were partially offset by increases in FHLB dividend income and equity capital gain distributions.

Previous wording

•Software maintenance increased primarily due to the Company's continued investment in its technology infrastructure.

Current wording

•Software and subscriptions increased primarily due to the Company’s continued investment in its technology infrastructure.

Previous wording

•FDIC assessment expense increased in comparison to the prior year due an increased assessment base as well as an estimated $1.1 million special assessment based on rules implemented by the FDIC to recover losses incurred by the Deposit Insurance Fund in 2023.

Current wording

•FDIC assessment expense decreased in comparison to the prior year, primarily attributable to an estimated $1.1 million special assessment imposed by the FDIC and recognized by the Company in the fourth quarter of 2023 to recover losses incurred by the DIF during the year.

Previous wording

•The Company incurred merger and acquisition costs related to the Meridian acquisition of $7.1 million during the first quarter of 2022, primarily related to lease terminations associated with exited branch locations, along with additional integration costs and professional fees. No such costs were incurred during 2023.

Current wording

•During the fourth quarter of 2024, the Company recognized $1.9 million of merger and acquisition expenses related to the pending merger with Enterprise. No such costs were incurred during 2023.

Previous wording

The Company’s effective tax rate for 2023 islower as compared to the year ago period primarily due to lower pre-tax net income, as well as the impact of discrete items, such as provision to return adjustments, changes in uncertain tax positions, and excess benefits from equity compensation, which are subject to fluctuation year over year. The effective tax rates reported in the table above are lower than the blended statutory tax rates due to the aforementioned discrete items as well as certain tax preference assets such as life insurance policies, tax exempt bonds, and federal tax credits.

Current wording

The Company’s effective tax rate for 2024 is lower as compared to the year ago period primarily due to lower pre-tax income as well as increased tax benefits from low-income housing tax credits. The effective tax rates in the table above are lower than the blended statutory tax rates due to the impact of discrete items, including tax benefits related to equity compensation and purchased state tax credits, as well as certain tax preference assets such as life insurance policies, tax exempt bonds, and federal tax credits.