INDEPENDENT BANK CORP Q4 FY2024 earnings call

• Reduced commercial real estate concentration: C&I and small business loans up, CRE concentration down. Hired 10 new C&I bankers, C&I loan production up 28% in 2024. - Acquired Enterprise Bank Corp: Adds density to markets, franchises fit well. - Upgraded core FIS processing platform, plan to convert in May 2026. - Prudently grew deposits, cost of deposits 1.65% in Q4. - Wealth management AUA grew 7.6% in 2024. - Disciplined credit underwriting with low loan losses historically, proactive with troubled office loans.

In the fourth quarter, GAAP net income was $50 million, diluted EPS was $1.18, return on assets was 1.02%, return on average common equity was 6.64%, and return on average tangible common equity was 9.96%. Excluding merger and acquisition expenses, adjusted operating net income was $51.4 million. Average deposits grew at ~3% annualized rate. Total nonperforming loans were $101.5 million or 0.70% of total loans at year-end. C&I and small business loans were up 4% and 12% in 2024 respectively. CRE concentration was $305 million, down 2% from Q3. Wealth management AUA grew 7.6% in 2024 to $7 billion.

• Anticipate low to mid-single-digit loan and deposit growth in 2025. - Net interest margin expected to expand 3-4 basis points per quarter. - Asset quality expected to resolve larger nonperforming assets with minimal provision impact. - Noninterest income expected mid-single-digit increase vs 2024. - Noninterest expense core expenses to increase mid-single-digit. - Tax rate expected around 23% in 2025. - Focus on closing Enterprise acquisition and integrating companies.

• Interest rate changes could impact net interest margin. - Credit risks in office loans, including potential delays in note sales and short sales. - Integration risks with Enterprise Bank Corp acquisition, including fair value adjustment uncertainty based on rate environment. - Volatility in noninterest income due to factors like unrealized gains/losses on equity securities.

Q: Steve Moss asked about loan growth outlook and margin outlook.

A: Jeff Tengel said loan growth is more from hires, customer sentiment cautiously optimistic. Mark Ruggiero said margin drivers include new loans around 7% and rolling off loans in low to mid-5s.

Q: Mark Fitzgibbon asked about past due office loans and reclassifying owner-occupied CRE.

A: Mark Ruggiero discussed past due office loans and Jeff Tengel explained reclassifying owner-occupied CRE to C&I for better risk profiling.

Q: Laurie Hunsicker asked about wealth business client flows and expenses.

A: Mark Ruggiero said ~$20 million net outflows in wealth business and Mark Ruggiero explained expense components like unrealized losses and consulting expenses.

Q: Christopher O'Connell asked about core conversion and sub debt timing.

A: Jeff Tengel discussed core conversion benefits and Mark Ruggiero said no specific update on sub debt timing yet.