What changed in this filing

/stocks — the workspaceLOADING

Item 1. Financial Statements

2024-08-06 compared with 2024-05-08 · 237 added, 142 removed, 1155 unchanged (25% of the section changed)

52 unchanged sentences

issued and outstanding:

42,452,457 shares at March 31, 2024 and 42,873,187 shares at December 31, 2023 (includes 215,412 and 162,812 shares of unvested participating restricted stock awards, respectively)

42,469,867 shares at June 30, 2024 and 42,873,187 shares at December 31, 2023 (includes 207,354 and 162,812 shares of unvested participating restricted stock awards, respectively)

Value of shares held in rabbi trust at cost:

82,042 shares at March 31, 2024 and 80,222 shares at December 31, 2023

78,726 shares at June 30, 2024 and 80,222 shares at December 31, 2023

( 3,353 ) ( 3,298 )

9 unchanged sentences

(Unaudited—Dollars in thousands, except per share data)

Three Months Ended

Three Months Ended Six Months Ended

June 30 June 30

2024 2023 2024 2023

Interest income

26 unchanged sentences

Data processing and facilities management 2,405 2,530 4,888 5,057

Consulting expense 1,428 2,077

Software and subscriptions 4,475 3,134 8,569 6,083

FDIC assessment 2,694 2,674 5,676 5,284

Consulting expense 1,997 1,935 3,425 4,012

Advertising 1,826 1,641 2,986 2,858

Debit card expense 1,602 2,217 4,080 4,388

Amortization of intangible assets 1,465 1,716 3,028 3,531

FDIC assessment 2,982 2,610

Other noninterest expenses 13,516 13,348 26,574 26,846

13 unchanged sentences

(Unaudited—Dollars in thousands)

Three Months Ended

Three Months Ended Six Months Ended

June 30 June 30

2024 2023 2024 2023

Net income $ 51,330 $ 62,644 $ 99,100 $ 123,891

Other comprehensive (loss) income, net of tax

Other comprehensive income (loss), net of tax

Net change in fair value of securities available for sale 3,392 ( 11,451 ) 384 5,617

1 unchanged sentence

Net change in other comprehensive income for defined benefit postretirement plans ( 14 ) ( 91 ) ( 29 ) ( 183 )

Total other comprehensive (loss) income ( 4,511 ) 27,139

Total other comprehensive income (loss) 5,113 ( 16,990 ) 602 10,149

Total comprehensive income $ 56,443 $ 45,654 $ 99,702 $ 134,040

2 unchanged sentences

CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY

Three Months Ended March 31, 2024 and 2023

Three Months Ended June 30, 2024 and 2023

(Unaudited—Dollars in thousands, except per share data)

Common Stock Outstanding Common Stock Value of Shares Held in Rabbi Trust at Cost Deferred Compensation Obligation Additional Paid in Capital Retained Earnings Accumulated Other

Comprehensive Income (Loss) Total

Balance March 31, 2024 42,452,457 $ 422 $ ( 3,403 ) $ 3,403 $ 1,902,063 $ 1,101,061 $ ( 119,338 ) $ 2,884,208

Net income — — — — — 51,330 — 51,330

Other comprehensive income — — — — — — 5,113 5,113

Common dividend declared ($ 0.57 per share)

— — — — — ( 24,209 ) — ( 24,209 )

Stock based compensation — — — — 2,139 — — 2,139

Restricted stock awards issued, net of awards surrendered 4,068 1 — — 4 — — 5

Shares issued under direct stock purchase plan 13,342 — — — 663 — — 663

Deferred compensation and other retirement benefit obligations — — 50 ( 50 ) — — — —

Balance June 30, 2024 42,469,867 $ 423 $ ( 3,353 ) $ 3,353 $ 1,904,869 $ 1,128,182 $ ( 114,225 ) $ 2,919,249

Balance March 31, 2023 44,114,827 $ 439 $ ( 3,286 ) $ 3,286 $ 1,995,077 $ 971,338 $ ( 135,945 ) $ 2,830,909

Net income — — — — — 62,644 — 62,644

Other comprehensive loss — — — — — — ( 16,990 ) ( 16,990 )

Common dividend declared ($ 0.55 per share)

— — — — — ( 24,247 ) — ( 24,247 )

Stock based compensation — — — — 1,921 — — 1,921

Restricted stock awards issued, net of awards surrendered 5,484 1 — — ( 1 ) — — —

Shares issued under direct stock purchase plan 10,590 — — — 677 — — 677

Deferred compensation and other retirement benefit obligations — — ( 3 ) 3 — — — —

Balance June 30, 2023 44,130,901 $ 440 $ ( 3,289 ) $ 3,289 $ 1,997,674 $ 1,009,735 $ ( 152,935 ) $ 2,854,914

INDEPENDENT BANK CORP.

CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY

Six Months Ended June 30, 2024 and 2023

(Unaudited—Dollars in thousands, except per share data)

Common Stock Outstanding Common Stock Value of Shares Held in Rabbi

3 unchanged sentences

Net income — — — — — 99,100 — 99,100

Other comprehensive loss — — — — — — ( 4,511 ) ( 4,511 )

Other comprehensive income — — — — — — 602 602

Common dividend declared ($ 1.14 per share)

5 unchanged sentences

Deferred compensation and other retirement benefit obligations — — ( 55 ) 55 — — — —

Balance March 31, 2024 42,452,457 $ 422 $ ( 3,403 ) $ 3,403 $ 1,902,063 $ 1,101,061 $ ( 119,338 ) $ 2,884,208

Balance June 30, 2024 42,469,867 $ 423 $ ( 3,353 ) $ 3,353 $ 1,904,869 $ 1,128,182 $ ( 114,225 ) $ 2,919,249

Balance December 31, 2022 45,641,238 $ 455 $ ( 3,227 ) $ 3,227 $ 2,114,888 $ 934,442 $ ( 163,084 ) $ 2,886,701

9 unchanged sentences

Deferred compensation and other retirement benefit obligations — — ( 62 ) 62 — — — —

Balance March 31, 2023 44,114,827 $ 439 $ ( 3,286 ) $ 3,286 $ 1,995,077 $ 971,338 $ ( 135,945 ) $ 2,830,909

(1) Inclusive of $ 278,000 and $ 1.2 million impact of excise tax attributable to shares repurchased under the share repurchase program during the three months ended March 31, 2024 and March 31, 2023, respectively .

Balance June 30, 2023 44,130,901 $ 440 $ ( 3,289 ) $ 3,289 $ 1,997,674 $ 1,009,735 $ ( 152,935 ) $ 2,854,914

(1) Inclusive of $ 311,000 and $ 1.2 million impact of excise tax attributable to shares repurchased under the share repurchase program during the six months ended June 30, 2024 and June 30, 2023, respectively .

The accompanying notes are an integral part of these unaudited consolidated financial statements.

2 unchanged sentences

(Unaudited—Dollars in thousands)

Three Months Ended

Six Months Ended

Cash flow from operating activities

26 unchanged sentences

Proceeds from maturities and principal repayments of securities held to maturity 51,473 84,000

Net purchases of Federal Home Loan Bank stock ( 2,747 ) ( 35,085 )

Net redemptions (purchases) of Federal Home Loan Bank stock 10,819 ( 34,270 )

Investments in low income housing projects ( 15,393 ) ( 16,992 )

Purchases of life insurance policies ( 99 ) ( 99 )

Proceeds from life insurance policies 1,566 11

Net increase in loans ( 122,666 ) ( 233,753 )

2 unchanged sentences

Net cash provided by (used in) investing activities 32,037 ( 174,635 )

Cash flows (used in) provided by financing activities

Cash flows used in financing activities

Net increase in time deposits 509,883 600,435

Net decrease in other deposits ( 73,832 ) ( 866,445 )

Net increase (decrease) in other deposits 34,086 ( 1,231,431 )

Net (repayments of) advances from Federal Home Loan Bank borrowings ( 475,000 ) 787,860

5 unchanged sentences

Common dividends paid ( 47,778 ) ( 49,454 )

Net cash (used in) provided by financing activities ( 70,074 ) 126,703

Net (decrease) increase in cash and cash equivalents ( 3,014 ) 149,611

Net cash used in financing activities ( 59,280 ) ( 12,264 )

Net increase (decrease) in cash and cash equivalents 89,551 ( 44,669 )

Cash and cash equivalents at beginning of year 224,330 352,933

14 unchanged sentences

In the opinion of management, all adjustments considered necessary for a fair presentation of the financial statements, primarily consisting of normal recurring adjustments, have been included.

Results for the three months ended March 31, 2024 are not necessarily indicative of the results that may be expected for the year ending December 31, 2024 or any other interim period.

Results for the six months ended June 30, 2024 are not necessarily indicative of the results that may be expected for the year ending December 31, 2024 or any other interim period.

For further information, refer to the consolidated financial statements and notes thereto included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2023, filed with the Securities and Exchange Commission (the “2023 Form 10-K”).

1 unchanged sentence

Trading Securities

The Company had trading securities of $ 4.8 million and $ 5.0 million as of March 31, 2024 and December 31, 2023, respectively.

The Company had trading securities of $ 4.4 million and $ 5.0 million as of June 30, 2024 and December 31, 2023, respectively.

These securities are held in a rabbi trust and will be used for future payments associated with the Company’s non-qualified 401(k) Restoration Plan and Non-qualified Deferred Compensation Plan.

Equity Securities

The Company had equity securities of $ 22.9 million and $ 22.5 million as of March 31, 2024 and December 31, 2023, respectively.

The Company had equity securities of $ 21.0 million and $ 22.5 million as of June 30, 2024 and December 31, 2023, respectively.

These securities consist primarily of mutual funds held in a rabbi trust and will be used for future payments associated with the Company’s supplemental executive retirement plans.

The following table represents a summary of the gains and losses recognized within non-interest income and non-interest expense within the consolidated statements of income that relate to equity securities for the periods indicated:

Three Months Ended

Three Months Ended Six Months Ended

June 30 June 30

2024 2023 2024 2023

Dollars in thousands

Net gains recognized during the period on equity securities $ 609 $ 368

Net (losses) gains recognized during the period on equity securities $ ( 107 ) $ 267 502 635

net gains recognized during the period on equity securities sold during the period 3 — 438 1

Unrealized gains recognized during the reporting period on equity securities still held at the reporting date $ 174 $ 367

Unrealized (losses) gains recognized during the reporting period on equity securities still held at the reporting date $ ( 110 ) $ 267 $ 64 $ 634

Available for Sale Securities

The following table summarizes the amortized cost, allowance for credit losses, and fair value of available for sale securities and the corresponding amounts of gross unrealized gains and losses recognized in accumulated other comprehensive income (loss) at the dates indicated:

March 31, 2024 December 31, 2023

June 30, 2024 December 31, 2023

Gains Gross Unrealized

12 unchanged sentences

Total available for sale securities $ 1,344,856 $ 18 $ ( 124,218 ) $ — $ 1,220,656 $ 1,459,862 $ 30 $ ( 125,636 ) $ — $ 1,334,256

Excluded from the table above is accrued interest on available for sale securities of $ 3.8 million and $ 3.4 million at March 31, 2024 and December 31, 2023, respectively, which is included within other assets on the consolidated balance sheets.

Additionally, the Company did not record any write-offs of accrued interest income on available for sale securities during the three months ended March 31, 2024 and 2023.

Furthermore, no securities held by the Company were delinquent on contractual payments nor were any securities placed on non-accrual status at March 31, 2024 and December 31, 2023.

Excluded from the table above is accrued interest on available for sale securities of $ 3.3 million and $ 3.4 million at June 30, 2024 and December 31, 2023, respectively, which is included within other assets on the consolidated balance sheets.

Additionally, the Company did not record any write-offs of accrued interest income on available for sale securities during the three and six months ended June 30, 2024 and 2023.

Furthermore, no securities held by the Company were delinquent on contractual payments nor were any securities placed on non-accrual status at June 30, 2024 and December 31, 2023.

When securities are sold, the adjusted cost of the specific security sold is used to compute the gain or loss on the sale.

The Company had no sales of securities available for sale during three months ended March 31, 2024 and 2023, and therefore no gains or losses were realized during the periods presented.

The Company had no sales of securities available for sale during the three and six months ended June 30, 2024 and 2023, and therefore no gains or losses were realized during the periods presented.

The following tables show the gross unrealized losses and fair value of the Company’s available for sale securities in an unrealized loss position as of the dates indicated.

These available for sale securities are aggregated by major security type and length of time that individual securities have been in a continuous unrealized loss position:

March 31, 2024

June 30, 2024

Less than 12 months 12 months or longer Total

29 unchanged sentences

In addition, management does not believe that any of the securities are impaired due to reasons of credit quality.

As a result, the Company did not recognize a provision for credit losses on these investments during the three months ended March 31, 2024 and 2023.

As a result, the Company did not recognize a provision for credit losses on these investments during the three and six months ended June 30, 2024 and 2023.

The Company made this determination by reviewing various qualitative and quantitative factors regarding each investment category, such as current market conditions, extent and nature of changes in fair value, issuer rating changes and trends, volatility of earnings, and current analysts’ evaluations.

As a result of the Company’s review of these qualitative and quantitative factors, the causes of the impairments listed in the table above by category were as follows at March 31, 2024:

As a result of the Company’s review of these qualitative and quantitative factors, the causes of the impairments listed in the table above by category were as follows at June 30, 2024:

Government Agency Securities, U.S.

16 unchanged sentences

The following table summarizes the amortized cost, fair value and allowance for credit losses of held to maturity securities and the corresponding amounts of gross unrealized gains and losses recognized at the dates indicated:

March 31, 2024 December 31, 2023

June 30, 2024 December 31, 2023

Gains Gross Unrealized

13 unchanged sentences

federal government or other government sponsored agencies and have a long history of no credit losses.

As a result, management has determined these securities to have a zero loss expectation and therefore the Company did not record a provision for estimated credit losses on any held to maturity securities during the three months ended March 31, 2024 and 2023.

Excluded from the table above is accrued interest on held to maturity securities of $ 4.5 million and $ 4.3 million at March 31, 2024 and December 31, 2023, respectively, which is included within other assets on the consolidated balance sheets.

Additionally, the Company did not record any write-offs of accrued interest income on held to maturity securities during the three months ended March 31, 2024 and 2023.

Furthermore, no securities held by the Company were delinquent on contractual payments nor were any securities placed on non-accrual status at March 31, 2024 and December 31, 2023.

Excluded from the table above is accrued interest on held to maturity securities of $ 4.1 million and $ 4.3 million at June 30, 2024 and December 31, 2023, respectively, which is included within other assets on the consolidated balance sheets.

Additionally, the Company did not record any write-offs of accrued interest income on held to maturity securities during the three and six months ended June 30, 2024 and 2023.

Furthermore, no securities held by the Company were delinquent on contractual payments nor were any securities placed on non-accrual status at June 30, 2024 and December 31, 2023.

When securities are sold, the adjusted cost of the specific security sold is used to compute the gain or loss on the sale.

The Company had no sales of held to maturity securities during the three months ended March 31, 2024 and 2023, and therefore no gains or losses were realized for such periods.

The Company had no sales of held to maturity securities during the three and six months ended June 30, 2024 and 2023, and therefore no gains or losses were realized for such periods.

The Company monitors the credit quality of held to maturity securities through the use of credit ratings.

Credit ratings are monitored by the Company on at least a quarterly basis.

As of March 31, 2024, all held to maturity securities held by the Company were rated investment grade or higher.

As of June 30, 2024, all held to maturity securities held by the Company were rated investment grade or higher.

The actual maturities of certain available for sale or held to maturity securities may differ from the contractual maturities because borrowers may have the right to call or prepay obligations with or without call or prepayment penalties.

A schedule of the contractual maturities of securities available for sale and securities held to maturity at March 31, 2024 is presented below:

A schedule of the contractual maturities of securities available for sale and securities held to maturity at June 30, 2024 is presented below:

Due in one year or less Due after one year to five years Due after five to ten years Due after ten years Total

22 unchanged sentences

Total $ 225,759 $ 219,918 $ 1,495,443 $ 1,366,031 $ 266,435 $ 232,338 $ 876,874 $ 760,238 $ 2,864,511 $ 2,578,525

Included in the table above are $ 25.5 million of callable securities at March 31, 2024.

The carrying value of securities pledged to secure public funds, trust deposits, and for other purposes, as required or permitted by law, was $ 1.6 billion and $ 1.7 billion at March 31, 2024 and December 31, 2023, respectively.

At March 31, 2024 and December 31, 2023, the Company had no investments in obligations of individual states, counties, or municipalities which exceeded 10% of consolidated stockholders’ equity.

Included in the table above are $ 25.5 million of callable securities at June 30, 2024.

The carrying value of securities pledged to secure public funds, trust deposits, and for other purposes, as required or permitted by law, was $ 2.2 billion and $ 1.7 billion at June 30, 2024 and December 31, 2023, respectively.

At June 30, 2024 and December 31, 2023, the Company had no investments in obligations of individual states, counties, or municipalities which exceeded 10% of consolidated stockholders’ equity.

NOTE 3 - LOANS, ALLOWANCE FOR CREDIT LOSSES AND CREDIT QUALITY

1 unchanged sentence

The following table summarizes the change in allowance for credit losses by loan category, and bifurcates the amount of loans allocated to each loan category for the period indicated:

Three Months Ended March 31, 2024

Three Months Ended June 30, 2024

(Dollars in thousands)

11 unchanged sentences

Ending balance (1) $ 20,884 $ 80,501 $ 7,804 $ 4,059 $ 24,836 $ 11,755 $ 1,020 $ 150,859

Three Months Ended March 31, 2023

Three Months Ended June 30, 2023

(Dollars in thousands)

11 unchanged sentences

Ending balance (1) $ 15,142 $ 78,396 $ 9,038 $ 3,606 $ 21,465 $ 12,433 $ 567 $ 140,647

(1) Balances of accrued interest receivable excluded from amortized cost and the calculation of allowance for credit losses amounted to $ 59.3 million and $ 52.7 million as of March 31, 2024 and March 31, 2023, respectively.

The balance of allowance for credit losses increased to $ 146.9 million as of March 31, 2024 compared to $ 142.2 million at December 31, 2023, driven primarily by specific reserve allocations as well as net loan growth during the three months ended March 31, 2024.

Six Months Ended June 30, 2024

(Dollars in thousands)

Commercial and

Industrial Commercial

Real Estate Commercial

Construction Small

Business Residential

Real Estate Home Equity Other Consumer Total

Allowance for credit losses

Beginning balance $ 19,243 $ 74,148 $ 7,683 $ 3,963 $ 23,637 $ 12,797 $ 751 $ 142,222

Charge-offs — — — ( 169 ) — ( 11 ) ( 1,509 ) ( 1,689 )

Recoveries 87 — — 51 — 281 657 1,076

Provision for (release of) credit losses 1,554 6,353 121 214 1,199 ( 1,312 ) 1,121 9,250

Ending balance (1) $ 20,884 $ 80,501 $ 7,804 $ 4,059 $ 24,836 $ 11,755 $ 1,020 $ 150,859

Six Months Ended June 30, 2023

(Dollars in thousands)

Commercial and

Industrial Commercial

Real Estate Commercial

Construction Small

Business Residential

Home Equity Other Consumer Total

Allowance for credit losses

Beginning balance $ 27,559 $ 77,799 $ 10,762 $ 2,834 $ 20,973 $ 11,504 $ 988 $ 152,419

Charge-offs ( 23,471 ) — — ( 87 ) — — ( 1,024 ) ( 24,582 )

Recoveries 21 — — 39 — 26 474 560

Provision for (release of) credit losses 11,033 597 ( 1,724 ) 820 492 903 129 12,250

Ending balance (1) $ 15,142 $ 78,396 $ 9,038 $ 3,606 $ 21,465 $ 12,433 $ 567 $ 140,647

(1) Balances of accrued interest receivable excluded from amortized cost and the calculation of allowance for credit losses amounted to $ 59.2 million and $ 54.0 million as of June 30, 2024 and June 30, 2023, respectively.

The balance of allowance for credit losses increased to $ 150.9 million as of June 30, 2024 compared to $ 142.2 million at December 31, 2023, driven primarily by specific reserve allocation on certain commercial loans as well as net loan growth during the three and six months ended June 30, 2024.

For the purpose of estimating the allowance for credit losses, management segregated the loan portfolio into the portfolio segments detailed in the above tables.

76 unchanged sentences

The following table details the amortized cost balances of the Company's loan portfolios, presented by credit quality indicator and origination year as of the dates indicated below:

March 31, 2024

June 30, 2024

2024 2023 2022 2021 2020 Prior Revolving Loans Revolving converted to Term Total (1)

48 unchanged sentences

Total current-period gross write-offs $ 1,499 $ — $ 28 $ — $ — $ — $ 162 $ — $ 1,689

March 31, 2023

June 30, 2023

2023 2022 2021 2020 2019 Prior Revolving Loans Revolving converted to Term Total (1)

62 unchanged sentences

LTV (re-valued)(2)(3) 43.5 % 43.3 %

(1) The average FICO scores at March 31, 2024 are based upon rescores from March 2024 as available for previously originated loans, or origination score data for loans booked in March 2024.

(1) The average FICO scores at June 30, 2024 are based upon rescores from June 2024 as available for previously originated loans, or origination score data for loans booked in June 2024.

The average FICO scores at December 31, 2023 were based upon rescores available from December 2023, as available for previously originated loans, or origination score data for loans booked in December 2023.

(2) The combined LTV ratios for March 31, 2024 are based upon updated automated valuations as of February 2024, when available, and/or the most current valuation data available.

(2) The combined LTV ratios for June 30, 2024 are based upon updated automated valuations as of May 2024, when available, and/or the most current valuation data available.

The combined LTV ratios for December 31, 2023 were based upon updated automated valuations as of November 2023, when available, and/or the most current valuation data available as of such date.

4 unchanged sentences

Management evaluates the need for a reserve on unfunded lending commitments in a manner consistent with loans held for investment.

At March 31, 2024 and December 31, 2023, the Company's estimated reserve for unfunded commitments amounted to $ 1.5 million and $ 1.3 million, respectively.

At June 30, 2024 and December 31, 2023, the Company's estimated reserve for unfunded commitments amounted to $ 1.4 million and $ 1.5 million, respectively.

Asset Quality

5 unchanged sentences

Nonaccrual Balances

March 31, 2024 December 31, 2023

June 30, 2024 December 31, 2023

With Allowance for Credit Losses Without Allowance for Credit Losses (1) Total With Allowance for Credit Losses Without Allowance for Credit Losses (1) Total

8 unchanged sentences

(1) Nonaccrual balances reported above without an allowance for credit losses are attributable to loans evaluated on an individual basis where it was determined that there was no risk of loss due to sufficient underlying collateral values.

It is the Company's policy to reverse any accrued interest when a loan is put on nonaccrual status, and, as such, the Company did not record any interest income on nonaccrual loans during the three months ended March 31, 2024 and 2023, respectively, except for instances where nonaccrual loans were paid off in excess of the recorded book balance.

Total accrued interest reversed against interest income amounted to $ 385,000 and $ 80,000 for the three months ended March 31, 2024 and 2023, respectively.

It is the Company's policy to reverse any accrued interest when a loan is put on nonaccrual status, and, as such, the Company did not record any interest income on nonaccrual loans during the three and six months ended June 30, 2024 and 2023, respectively, except for instances where nonaccrual loans were paid off in excess of the recorded book balance.

Total accrued interest reversed against interest income amounted to $ 112,000 and $ 345,000 for the three months ended June 30, 2024 and 2023, respectively, and $ 497,000 and $ 425,000 for the six months ended June 30, 2024 and 2023, respectively.

The following table shows information regarding foreclosed residential real estate property at the dates indicated:

March 31, 2024 December 31, 2023

June 30, 2024 December 31, 2023

(Dollars in thousands)

2 unchanged sentences

The following tables show the age analysis of past due financing receivables as of the dates indicated:

March 31, 2024

June 30, 2024

30-59 days 60-89 days 90 days or more Total Past Due Total

40 unchanged sentences

(1) Other consumer portfolio is inclusive of deposit account overdrafts recorded as loan balances.

(2) The amount of net deferred costs on originated loans included in the ending balance was $ 5.7 million and $ 6.4 million at March 31, 2024 and December 31, 2023, respectively.

Net unamortized discounts on acquired loans included in the ending balance was $ 8.5 million and $ 8.6 million at March 31, 2024 and December 31, 2023, respectively.

(2) The amount of net deferred costs on originated loans included in the ending balance was $ 6.2 million and $ 6.4 million at June 30, 2024 and December 31, 2023, respectively.

Net unamortized discounts on acquired loans included in the ending balance were $ 8.4 million and $ 8.6 million at June 30, 2024 and December 31, 2023, respectively.

Loan Modifications

The following tables present the period end amortized cost basis of loans modified to borrowers experiencing financial difficulty during the three months ended March 31, 2024 and 2023, respectively, disaggregated by class of financing receivable and type of modification granted:

Three Months Ended March 31, 2024 Three Months Ended March 31, 2023

Interest Rate Reduction

Amortized Cost Basis % of Total Class of Financing Receivable Amortized Cost Basis % of Total Class of Financing Receivable

Loan Type (Dollars in thousands)

Small business $ 51 0.02 % $ — — %

Total $ 51 $ —

The following tables present the period end amortized cost basis of loans modified to borrowers experiencing financial difficulty during the periods indicated, disaggregated by class of financing receivable, type of modification granted and the financial effect of the modifications:

Three Months Ended June 30, 2024

Amortized Cost Basis % of Total Class of Financing Receivable Financial Effect

(Dollars in thousands)

Term Extension

Amortized Cost Basis % of Total Class of Financing Receivable Amortized Cost Basis % of Total Class of Financing Receivable

Loan Category (Dollars in thousands)

Commercial and industrial $ 9,725 0.62 % $ — — %

Commercial real estate 3,375 0.04 % 2,540 0.03 %

Commercial construction 10,644 1.28 % — — %

Small business — — % 105 0.05 %

Total $ 23,744 $ 2,645

Other-Than-Insignificant Payment Delay

Amortized Cost Basis % of Total Class of Financing Receivable Amortized Cost Basis % of Total Class of Financing Receivable

Loan Category (Dollars in thousands)

Commercial and industrial $ 1,809 0.11 % $ 2,805 0.17 %

Commercial real estate 6,351 0.08 % 7,013 0.09 %

Commercial and industrial $ 7,792 0.49 % Added a weighted-average contractual term of 6 months to the life of the loans

Commercial real estate 33,114 0.41 % Added a weighted-average contractual term of 1.1 years to the life of the loans

Commercial construction 4,452 0.57 % Extended contractual term on one loan by 12 months

Residential real estate 298 0.01 % Extended contractual term on one loan by 6.2 years

Total $ 45,656

Combination - Interest Rate Reduction and Term Extension

Amortized Cost Basis % of Total Class of Financing Receivable Amortized Cost Basis % of Total Class of Financing Receivable

Loan Category (Dollars in thousands)

Commercial and industrial $ 179 0.01 % $ — — %

Small business — — % 44 0.02 %

Home equity 72 0.01 % — — %

Grand Total $ 32,206 $ 12,507

The following table describes the financial effect of modifications made to borrowers experiencing financial difficulty for the periods indicated:

Three Months Ended March 31, 2024

Interest Rate Reduction

Home equity $ 65 0.01 % Reduced contractual rate on one loan from 7.99 % to 7.00 %

Term Extension and Interest Rate Reduction

Small business $ 36 0.01 % Extended the contractual term on one loan by 2.5 years and reduced the loan’s contractual interest rate from 10.25 % to 6.50 %

Total Outstanding Modified $ 45,757

Six Months Ended June 30, 2024

Amortized Cost Basis % of Total Class of Financing Receivable Financial Effect

(Dollars in thousands)

Term Extension

Loan Category Financial Effect

Commercial and industrial $ 7,795 0.49 % Added a weighted-average contractual term of 6 months to the life of the loans

Commercial real estate Added a weighted-average contractual term of 6 months to the life of the loans

Commercial real estate 36,489 0.45 % Added a weighted-average contractual term of 1.0 year to the life of the loans

Commercial construction 6,542 0.83 % Added a weighted-average contractual term of 10 months to the life of the loans

Residential real estate 298 0.01 % Extended the contractual term on one loan by 6.2 years

Total $ 51,124

Interest Rate Reduction

Loan Category Financial Effect

Small business $ 47 0.02 % Reduced contractual rate on one loan from 11.00 % to 8.20 %

Combination - Interest Rate Reduction and Term Extension

Loan Category Financial Effect

Commercial and industrial Reduced contractual rate on one loan from 10.10 % to 7.20 % and added a weighted average contractual term of 1.5 years

Home equity Reduced contractual rate on one loan from 10.00 % to 6.80 % and added a weighted-average contractual term of 8.1 years

Three Months Ended March 31, 2023

Home equity 65 0.01 % Reduced contractual rate on one loan from 7.99 % to 7.00 %

Other Than Insignificant Payment Delay

Commercial and industrial $ 1,809 0.11 % Modification was made with minimal financial effect

Commercial real estate 6,350 0.08 % Modification was made with minimal financial effect

Total $ 8,159

Term Extension and Interest Rate Reduction

Commercial and industrial $ 152 0.01 % Extended the contractual term on one loan by 1.5 years and reduced the interest rate from 10.10 % to 7.20 %

Small business 36 0.01 % Extended the contractual term on one loan by 2.5 years and reduced the interest rate from 10.25 % to 6.50 %

Home equity 70 0.01 % Extended the contractual term on one loan by 8.1 years and reduced the interest rate from 10.00 % to 6.80 %

Total Outstanding Modified $ 59,653

Three Months Ended June 30, 2023

Amortized Cost Basis % of Total Class of Financing Receivable Financial Effect

(Dollars in thousands)

Term Extension

Loan Category Financial Effect

Commercial real estate Added a weighted-average contractual term of 2 months to the life of the loans

Commercial and industrial $ 8,193 0.48 % Added a weighted-average contractual term of 1 month to the life of the loans

Commercial real estate 15,921 0.20 % Added a weighted-average contractual term of 1.9 years to the life of the loans

Commercial construction 2,369 0.23 % Added a weighted-average contractual term of 2 months to the life of the loans

Total $ 26,483

Term Extension and Other Than Insignificant Payment Delay

Commercial and industrial $ 1,965 0.11 % The financial effects of term extensions are included in term extension table above, while the payment delay modifications had minimal financial effect.

Commercial real estate 6,857 0.09 % The financial effects of term extensions are included in term extension table above, while the payment delay modifications had minimal financial effect.

Total $ 8,822

Total Outstanding Modified $ 35,305

Six Months Ended June 30, 2023

Amortized Cost Basis % of Total Class of Financing Receivable Financial Effect

(Dollars in thousands)

Term Extension

Commercial and industrial $ 8,193 0.48 % Added a weighted-average contractual term of 1 month to the life of the loans

Commercial real estate 18,461 0.24 % Added a weighted-average contractual term of 1.8 years to the life of the loans

Commercial construction 2,369 0.23 % Added a weighted-average contractual term of 2 months to the life of the loans

Small business 105 0.04 % Added a weighted-average contractual term of 4.3 years to the life of the loans

Interest Rate Reduction

Loan Category Financial Effect

Small business Reduced weighted-average contractual interest rate from 10.00 % to 6.50 %

Total $ 29,128

Other Than Insignificant Payment Delay

Commercial and industrial $ 2,805 0.16 % Modification was made with minimal financial effect

Commercial real estate 7,013 0.09 % Modification was made with minimal financial effect

Total $ 9,818

Term Extension and Interest Rate Reduction

Small business $ 44 0.02 % Reduced the contractual interest rate on one loan from 10.00 % to 6.50 %;

the financial effect of term extensions are included in term extension table shown above

Term Extension and Other Than Insignificant Payment Delay

Commercial and industrial $ 1,965 0.11 % The financial effects of term extensions are included in term extension table above, while the payment delay modifications had minimal financial effect.

Commercial real estate 6,857 0.09 % The financial effects of term extensions are included in term extension table above, while the payment delay modifications had minimal financial effect.

Total $ 8,822

Total Outstanding Modified $ 47,812

The Company closely monitors the performance of loans that are modified to borrowers experiencing financial difficulty to understand the effectiveness of its modification efforts.

The following table depicts the amortized cost and payment status of loans that have been modified in the last 12 months as of March 31, 2024:

At June 30, 2024, all loans modified to borrowers

experiencing financial difficulty during the previous 12 months were current.

The following table depicts the amortized cost and payment status of loans that were modified during the previous 12 months as of June 30, 2023:

Payment Status (Amortized Cost Basis)

3 unchanged sentences

Commercial real estate 17,211 15,120 —

Commercial construction 2,369 — —

Small business 149 — —

1 unchanged sentence

The Company considers a loan to have defaulted when it reaches 90 days past due.

At March 31, 2024 there was one $ 136,000 commercial real estate loan that defaulted during the three months then ended which was modified with a term extension to a borrower experiencing financial difficulty in the prior 12 months.

At March 31, 2024, the Company had $ 640,000 in additional commitments to lend to one borrower experiencing financial difficulty, pertaining to a construction loan that was modified during the three months then ended with a term extension.

At both June 30, 2024 and 2023, there were no loans modified to borrowers experiencing financial difficulty during the previous 12 months that subsequently defaulted during the three or six months then ended.

At June 30, 2024, the Company had $ 275,000 in additional commitments to lend to borrowers experiencing financial difficulty whose loans were modified and included in the above tables for the three and six months then ended.

The Company had no such additional commitments at June 30, 2023.

Loan modifications to borrowers experiencing financial difficulty are evaluated on a collective basis with loans sharing similar risk characteristics in accordance with the current expected credit loss ("CECL") methodology.

NOTE 4 - BORROWINGS

On March 15, 2024 the Company fully redeemed its outstanding subordinated debentures with an aggregate principal amount of $ 50.0 million.

The subordinated debentures were originally issued on March 14, 2019 in a private placement transaction to institutional accredited investors and were set to mature on March 15, 2029 with an option to redeem without penalty at any scheduled date on or after March 15, 2024 with 30 days' notice, which was provided by the Company prior to redemption.

NOTE 4 - STOCK BASED COMPENSATION

During the three months ended March 31, 2024, the Company had the following activity related to stock based compensation:

During the six months ended June 30, 2024, the Company had the following activity related to stock based compensation:

Time Vested Restricted Stock Awards

2 unchanged sentences

2/22/2024 106,200 2023 Omnibus Incentive Plan $ 52.73 Ratably over 3 years from grant date

4/15/2024 1,650 2023 Omnibus Incentive Plan $ 48.49 Ratably over 3 years from grant date

5/21/2024 11,340 2018 Non-Employee Director Stock Plan $ 52.94 Shares vested immediately

Performance-Based Restricted Stock Awards

19 unchanged sentences

The following tables reflect the Company’s derivative positions at the dates indicated below for interest rate swaps which qualify as cash flow hedges for accounting purposes:

March 31, 2024

June 30, 2024

Weighted Average Rate

16 unchanged sentences

Interest rate swaps on borrowings $ 400,000 2.58 5.34 % 3.67 % $ 1,901

Notional Amount Average Maturity Current Rate Paid Receive Fixed

Swap Rate Fair Value

Current Rate Paid Receive Fixed

Interest rate swaps on loans 850,000 2.50 5.36 % 2.72 % ( 27,350 )

4 unchanged sentences

For derivative instruments that are designated and qualify as cash flow hedging instruments, the effective portion of the gains or losses is reported as a component of other comprehensive income and is subsequently reclassified into earnings in the period that the hedged forecasted transaction affects earnings.

The Company expects approximately $ 4.9 million (pre-tax) to be reclassified as an increase to interest income and $ 20.6 million (pre-tax) to be reclassified as an increase to interest expense, from OCI related to the Company’s cash flow hedges in the twelve months following March 31, 2024.

This reclassification is due to anticipated payments that will be made and/or received on the swaps based upon the forward curve at March 31, 2024.

The Company had no fair value hedges as of March 31, 2024 or December 31, 2023.

The Company expects approximately $ 4.9 million (pre-tax) to be reclassified as an increase to net interest income and $ 19.4 million (pre-tax) to be reclassified as a decrease to net interest income, from OCI related to the Company’s cash flow hedges in the twelve months following June 30, 2024.

This reclassification is due to anticipated payments that will be made and/or received on the swaps based upon the forward curve at June 30, 2024.

The Company had no fair value hedges as of June 30, 2024 or December 31, 2023.

Customer Related Positions

17 unchanged sentences

(1) Less than 1 year Less than 2 years Less than 3 years Less than 4 years Thereafter Total Fair Value

March 31, 2024

June 30, 2024

(Dollars in thousands)

31 unchanged sentences

The change in fair value of loans held for sale is recorded in current period earnings as a component of mortgage banking income in accordance with the Company’s fair value election.

The fair value of loans held for sale increased by $ 70,000 and decreased by $ 17,000 for the three months ended March 31, 2024 and 2023, respectively.

The fair value of loans held for sale increased by $ 113,000 and $ 14,000 for the three months ended June 30, 2024 and 2023, respectively.

For the respective six months ended June 30, 2024 and 2023, the fair value of loans held for sale increased by $ 183,000 and decreased by $ 3,000 .

These amounts were offset in earnings by the change in the fair value of mortgage derivatives.

17 unchanged sentences

The Company expects that these best efforts forward loan sale commitments will experience a net neutral shift in fair value with related derivative loan commitments.

The aggregate amount of net realized gains on sales of mortgage loans included within mortgage banking income was $ 593,000 and $ 174,000 for the three months ended March 31, 2024 and 2023, respectively.

The aggregate amount of net realized gains on sales of mortgage loans included within mortgage banking income was $ 947,000 and $ 170,000 for the three months ended June 30, 2024 and 2023, respectively, and $ 1.5 million and $ 344,000 for the six months ended June 30, 2024 and 2023, respectively.

Balance Sheet Offsetting

9 unchanged sentences

2024 December 31

2023 March 31

2024 December 31

10 unchanged sentences

Forward sale loan commitments 39 17 — —

Forward sale hedge commitments 111 — — —

Total derivatives not designated as hedges 112,826 102,021 112,256 101,778

7 unchanged sentences

(2) All liability derivatives are reflected in other liabilities on the balance sheet.

(3) Approximately $ 426,000 and $ 3.2 million of accrued interest receivable is included in the fair value of interest rate and loan level derivative assets, respectively, at March 31, 2024, in comparison to accrued interest receivable of approximately $ 316,000 and $ 3.0 million, respectively, at December 31, 2023.

(4) Approximately $ 1.8 million and $ 3.2 million of accrued interest payable is included in the fair value of interest rate and loan level derivative liabilities, respectively, at March 31, 2024, in comparison to accrued interest payable of approximately $ 1.9 million and $ 3.0 million, respectively, at December 31, 2023.

(3) Approximately $ 372,000 and $ 2.8 million of accrued interest receivable is included in the fair value of interest rate and loan level derivative assets, respectively, at June 30, 2024, in comparison to accrued interest receivable of approximately $ 316,000 and $ 3.0 million, respectively, at December 31, 2023.

(4) Approximately $ 1.3 million and $ 2.8 million of accrued interest payable is included in the fair value of interest rate and loan level derivative liabilities, respectively, at June 30, 2024, in comparison to accrued interest payable of approximately $ 1.9 million and $ 3.0 million, respectively, at December 31, 2023.

(5) Netting adjustments represent the amounts recorded to convert derivative assets and liabilities cleared through CME from a gross basis to a net basis, inclusive of the variation margin payments, in accordance with applicable accounting guidance.

1 unchanged sentence

The table below presents the effect of the Company’s derivative financial instruments included in OCI and current earnings for the periods indicated:

Three Months Ended

Three Months Ended Six Months Ended

June 30 June 30

2024 2023 2024 2023

(Dollars in thousands)

Derivatives designated as hedges

(Loss) gain in OCI on derivatives (effective portion), net of tax $ ( 1,488 ) $ 10,163

Gain (loss) in OCI on derivatives (effective portion), net of tax $ 1,735 $ ( 5,448 ) $ 247 $ 4,715

Loss reclassified from OCI into interest income or interest expense (effective portion) $ ( 5,030 ) $ ( 7,020 ) $ ( 10,886 ) $ ( 13,259 )

8 unchanged sentences

If the Company fails to meet these conditions, the counterparties could request the Company make immediate payment or demand that the Company provide immediate and ongoing full collateralization on derivative positions in net liability positions.

All derivative instruments with credit-risk contingent features were in a net asset position at March 31, 2024 and December 31, 2023.

All derivative instruments with credit-risk contingent features were in a net asset position at June 30, 2024 and December 31, 2023.

By using derivatives, the Company is exposed to credit risk to the extent that counterparties to the derivative contracts do not perform as required.

4 unchanged sentences

As such, management believes the risk of incurring credit losses on derivative contracts with those counterparties is remote.

The Company's exposure relating to institutional counterparties was $ 117.5 million and $ 95.8 million at March 31, 2024 and December 31, 2023, respectively.

The Company’s exposure relating to customer counterparties was approximately $ 313,000 and $ 5.6 million at March 31, 2024 and December 31, 2023, respectively.

The Company’s exposure relating to institutional counterparties was $ 116.9 million and $ 95.8 million at June 30, 2024 and December 31, 2023, respectively.

The Company’s exposure relating to customer counterparties was approximately $ 679,000 and $ 5.6 million at June 30, 2024 and December 31, 2023, respectively.

Credit exposure may be reduced by the value of collateral pledged by the counterparty.

7 unchanged sentences

The unavailability or reduced availability of pricing or other input information could cause an instrument to be reclassified from one level to another.

The Fair Value Measurements and Disclosures Topic of the FASB ASC defines fair value and establishes a fair value hierarchy that prioritizes the inputs to valuation techniques used to measure fair value.

The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1 measurements) and the lowest priority to unobservable inputs (Level 3 measurements).

The Fair Value Measurements and Disclosures Topic of the Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) defines fair value and establishes a fair value hierarchy that prioritizes the inputs to valuation techniques used to measure fair value.

measurements).

The three levels of the fair value hierarchy under the Fair Value Measurements and Disclosures Topic of the FASB ASC are described below:

6 unchanged sentences

Valuation Techniques

There were no changes in the valuation techniques used during the three months ended March 31, 2024.

There were no changes in the valuation techniques used during the six months ended June 30, 2024.

Trading and Equity Securities

34 unchanged sentences

Although the Company has determined that the majority of the inputs used to value its interest rate derivatives fall within Level 2 of the fair value hierarchy, the credit valuation adjustments associated with its interest rate derivatives and risk participation agreements may also utilize Level 3 inputs, such as estimates of current credit spreads to evaluate the likelihood of default by the Company and its counterparties.

However, as of March 31, 2024 and December 31, 2023, the Company has assessed the significance of the impact of the credit valuation adjustments on the overall valuation of its derivative positions and has determined that the credit valuation adjustments are not significant to the overall valuation of its derivatives.

However, as of June 30, 2024 and December 31, 2023, the Company has assessed the significance of the impact of the credit valuation adjustments on the overall valuation of its derivative positions and has determined that the credit valuation adjustments are not significant to the overall valuation of its derivatives.

As a result, the Company has determined that its derivative valuations in their entirety are properly classified as Level 2.

22 unchanged sentences

(Level 2) Significant

March 31, 2024

June 30, 2024

(Dollars in thousands)

50 unchanged sentences

(Level 2) Significant

March 31, 2024

June 30, 2024

(Dollars in thousands)

65 unchanged sentences

The following table presents the revenue streams that the Company has disaggregated as of the periods indicated:

Three Months Ended

2024 March 31

Three Months Ended Six Months Ended

(Dollars in thousands)

47 unchanged sentences

The following table provides the amount of investment management revenue earned but not received as of the dates indicated:

March 31, 2024 December 31, 2023

June 30, 2024 December 31, 2023

(Dollars in thousands)

26 unchanged sentences

Three Months Ended

March 31, 2024

June 30, 2024 Six Months Ended

June 30, 2024

Amount Tax (Expense)

Benefit After Tax

Amount Pre-Tax

Amount Tax (Expense)

Benefit After Tax

(Dollars in thousands)

8 unchanged sentences

Net change in other comprehensive income for defined benefit postretirement plans (1) ( 20 ) 6 ( 14 ) ( 41 ) 12 ( 29 )

Total other comprehensive loss $ ( 6,021 ) $ 1,510 $ ( 4,511 )

Total other comprehensive income $ 7,726 $ ( 2,613 ) $ 5,113 $ 1,705 $ ( 1,103 ) $ 602

Three Months Ended

March 31, 2023

June 30, 2023 Six Months Ended

June 30, 2023

Amount Tax (Expense)

Benefit After Tax

Amount Pre-Tax

Amount Tax (Expense)

Benefit After Tax

(Dollars in thousands)

8 unchanged sentences

Net change in other comprehensive income for defined benefit postretirement plans (1) ( 128 ) 37 ( 91 ) ( 255 ) 72 ( 183 )

Total other comprehensive income $ 36,196 $ ( 9,057 ) $ 27,139

Total other comprehensive (loss) income $ ( 22,700 ) $ 5,710 $ ( 16,990 ) $ 13,496 $ ( 3,347 ) $ 10,149

(1) The amortization of prior service costs is included in the computation of net periodic pension cost as disclosed in Note 12 - Employee Benefit Plans within the Notes to the Consolidated Financial Statements included in Item 8 of the Company’s 2023 Form 10-K.

7 unchanged sentences

Ending balance:

March 31, 2024 $ ( 99,239 ) $ ( 22,063 ) $ 1,964 $ ( 119,338 )

June 30, 2024 $ ( 95,847 ) $ ( 20,328 ) $ 1,950 $ ( 114,225 )

Beginning balance:

2 unchanged sentences

Ending balance:

March 31, 2023 $ ( 111,589 ) $ ( 26,467 ) $ 2,111 $ ( 135,945 )

June 30, 2023 $ ( 123,040 ) $ ( 31,915 ) $ 2,020 $ ( 152,935 )

NOTE 9 - COMMITMENTS AND CONTINGENCIES

17 unchanged sentences

The following table summarizes the above financial instruments at the dates indicated:

March 31, 2024 December 31, 2023

June 30, 2024 December 31, 2023

(Dollars in thousands)

9 unchanged sentences

Other Contingencies

At March 31, 2024, the Bank was involved in pending lawsuits that arose in the ordinary course of business.

At June 30, 2024, the Bank was involved in pending lawsuits that arose in the ordinary course of business.

Management has reviewed these pending lawsuits with legal counsel and has taken into consideration the view of counsel as to their outcome.

1 unchanged sentence

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-Q

Item 1. Financial Statements