What changed in this filing

/stocks — the workspaceLOADING

Item 1. Financial Statements

2024-11-07 compared with 2024-08-06 · 132 added, 135 removed, 1257 unchanged (18% of the section changed)

52 unchanged sentences

issued and outstanding:

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)

42,480,765 shares at September 30, 2024 and 42,873,187 shares at December 31, 2023 (includes 202,940 and 162,812 shares of unvested participating restricted stock awards, respectively)

Value of shares held in rabbi trust at cost:

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

79,686 shares at September 30, 2024 and 80,222 shares at December 31, 2023

( 3,399 ) ( 3,298 )

9 unchanged sentences

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

Three Months Ended Six Months Ended

June 30 June 30

Three Months Ended Nine Months Ended

September 30 September 30

2024 2023 2024 2023

30 unchanged sentences

Consulting expense 1,429 2,753 4,854 6,765

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

Debit card expense 614 2,319 4,694 6,707

15 unchanged sentences

(Unaudited—Dollars in thousands)

Three Months Ended Six Months Ended

June 30 June 30

Three Months Ended Nine Months Ended

September 30 September 30

2024 2023 2024 2023

9 unchanged sentences

CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY

Three Months Ended June 30, 2024 and 2023

Three Months Ended September 30, 2024 and 2023

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

1 unchanged sentence

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

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

Net income — — — — — 42,947 — 42,947

6 unchanged sentences

Deferred compensation and other retirement benefit obligations — — ( 46 ) 46 — — — —

Balance September 30, 2024 42,480,765 $ 423 $ ( 3,399 ) $ 3,399 $ 1,907,012 $ 1,146,915 $ ( 77,202 ) $ 2,977,148

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

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

Net income — — — — — 60,808 — 60,808

2 unchanged sentences

— — — — — ( 24,277 ) — ( 24,277 )

Proceeds from exercise of stock options, net of cash paid 1,572 — — — 1 — — 1

Stock based compensation — — — — 1,128 — — 1,128

2 unchanged sentences

Deferred compensation and other retirement benefit obligations — — ( 46 ) 46 — — — —

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

Balance September 30, 2023 44,141,973 $ 440 $ ( 3,335 ) $ 3,335 $ 1,999,448 $ 1,046,266 $ ( 160,746 ) $ 2,885,408

INDEPENDENT BANK CORP.

CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY

Six Months Ended June 30, 2024 and 2023

Nine Months Ended September 30, 2024 and 2023

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

12 unchanged sentences

Deferred compensation and other retirement benefit obligations — — ( 101 ) 101 — — — —

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

Balance September 30, 2024 42,480,765 $ 423 $ ( 3,399 ) $ 3,399 $ 1,907,012 $ 1,146,915 $ ( 77,202 ) $ 2,977,148

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 — — ( 108 ) 108 — — — —

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 .

Balance September 30, 2023 44,141,973 $ 440 $ ( 3,335 ) $ 3,335 $ 1,999,448 $ 1,046,266 $ ( 160,746 ) $ 2,885,408

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

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

2 unchanged sentences

(Unaudited—Dollars in thousands)

Six Months Ended

Nine Months Ended

Cash flow from operating activities

25 unchanged sentences

Proceeds from maturities and principal repayments of securities available for sale 172,701 42,087

Purchases of securities available for sale ( 47,776 ) —

Proceeds from maturities and principal repayments of securities held to maturity 79,843 114,698

9 unchanged sentences

Net increase in time deposits 581,845 816,896

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

Net decrease in other deposits ( 6,464 ) ( 1,636,503 )

Net (repayments of) advances from Federal Home Loan Bank borrowings ( 505,000 ) 887,000

23 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 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.

Results for the nine months ended September 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 $ 4.4 million and $ 5.0 million as of June 30, 2024 and December 31, 2023, respectively.

The Company had trading securities of $ 4.4 million and $ 5.0 million as of September 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 $ 21.0 million and $ 22.5 million as of June 30, 2024 and December 31, 2023, respectively.

The Company had equity securities of $ 21.6 million and $ 22.5 million as of September 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 Six Months Ended

June 30 June 30

Three Months Ended Nine Months Ended

September 30 September 30

2024 2023 2024 2023

Dollars in thousands

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

Net gains (losses) recognized during the period on equity securities $ 685 $ ( 363 ) 1,187 272

net gains (losses) recognized during the period on equity securities sold during the period 81 ( 34 ) 519 ( 33 )

Unrealized gains (losses) recognized during the reporting period on equity securities still held at the reporting date $ 604 $ ( 329 ) $ 668 $ 305

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:

June 30, 2024 December 31, 2023

September 30, 2024 December 31, 2023

Gains Gross Unrealized

12 unchanged sentences

Total available for sale securities $ 1,334,733 $ 68 $ ( 87,590 ) $ — $ 1,247,211 $ 1,459,862 $ 30 $ ( 125,636 ) $ — $ 1,334,256

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.

Excluded from the table above is accrued interest on available for sale securities of $ 3.1 million and $ 3.4 million at September 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 nine months ended September 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 September 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 the three and six months ended June 30, 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 nine months ended September 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:

June 30, 2024

September 30, 2024

Less than 12 months 12 months or longer Total

8 unchanged sentences

Agency collateralized mortgage obligations 9 — — 28,452 ( 1,646 ) 28,452 ( 1,646 )

State, county, and municipal securities 1 — — 190 ( 5 ) 190 ( 5 )

Pooled trust preferred securities issued by banks and insurers 1 — — 1,027 ( 153 ) 1,027 ( 153 )

18 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 and six months ended June 30, 2024 and 2023.

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

Government Agency Securities, U.S.

4 unchanged sentences

Government or one of its agencies.

• State, County and Municipal Securities :

This portfolio has contractual terms that generally do not permit the issuer

to settle the securities at a price less than the current par value of the investment.

The decline in market value of

these securities is attributable to changes in interest rates and not credit quality.

• Pooled Trust Preferred Securities:

1 unchanged sentence

The unrealized loss on this security is attributable to the illiquid nature of the trust preferred market in the current economic and regulatory environment.

Management evaluates collateral credit and instrument structure, including current and expected deferral and default rates and timing.

Management evaluates collateral credit and instrument structure, including current and

expected deferral and default rates and timing.

In addition, discount rates are determined by evaluating comparable spreads observed currently in the market for similar instruments.

1 unchanged sentence

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:

June 30, 2024 December 31, 2023

September 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 and six months ended June 30, 2024 and 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.

Excluded from the table above is accrued interest on held to maturity securities of $ 4.0 million and $ 4.3 million at September 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 nine months ended September 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 September 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 and six months ended June 30, 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 nine months ended September 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 June 30, 2024, all held to maturity securities held by the Company were rated investment grade or higher.

As of September 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 June 30, 2024 is presented below:

A schedule of the contractual maturities of securities available for sale and securities held to maturity at September 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 $ 225,049 $ 220,571 $ 1,475,421 $ 1,386,961 $ 258,418 $ 235,773 $ 868,160 $ 781,371 $ 2,827,048 $ 2,624,676

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.

Included in the table above are $ 26.2 million of callable securities at September 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 September 30, 2024 and December 31, 2023, respectively.

At September 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 June 30, 2024

Three Months Ended September 30, 2024

(Dollars in thousands)

11 unchanged sentences

Ending balance (1) $ 15,937 $ 99,622 $ 7,526 $ 4,105 $ 24,503 $ 11,161 $ 842 $ 163,696

Three Months Ended June 30, 2023

Three Months Ended September 30, 2023

(Dollars in thousands)

11 unchanged sentences

Ending balance (1) $ 16,934 $ 74,402 $ 8,830 $ 3,914 $ 23,147 $ 12,546 $ 796 $ 140,569

Six Months Ended June 30, 2024

Nine Months Ended September 30, 2024

(Dollars in thousands)

11 unchanged sentences

Ending balance (1) $ 15,937 $ 99,622 $ 7,526 $ 4,105 $ 24,503 $ 11,161 $ 842 $ 163,696

Six Months Ended June 30, 2023

Nine Months Ended September 30, 2023

(Dollars in thousands)

11 unchanged sentences

Ending balance (1) $ 16,934 $ 74,402 $ 8,830 $ 3,914 $ 23,147 $ 12,546 $ 796 $ 140,569

(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.

(1) Balances of accrued interest receivable excluded from amortized cost and the calculation of allowance for credit losses amounted to $ 55.3 million and $ 58.1 million as of September 30, 2024 and September 30, 2023, respectively.

The balance of allowance for credit losses increased to $ 163.7 million as of September 30, 2024 compared to $ 142.2 million at December 31, 2023, driven primarily by specific reserve allocations on certain commercial loans during the nine months ended September 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:

June 30, 2024

September 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 $ 2,461 $ — $ 28 $ — $ — $ — $ 6,206 $ — $ 8,695

June 30, 2023

September 30, 2023

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

62 unchanged sentences

LTV (re-valued)(2)(3) 43.4 % 43.3 %

(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.

(1) The average FICO scores at September 30, 2024 are based upon rescores from September 2024 as available for previously originated loans, or origination score data for loans booked in September 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 June 30, 2024 are based upon updated automated valuations as of May 2024, when available, and/or the most current valuation data available.

(2) The combined LTV ratios for September 30, 2024 are based upon updated automated valuations as of August 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 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.

At September 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

June 30, 2024 December 31, 2023

September 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

7 unchanged sentences

Total nonaccrual loans $ 92,596 $ 11,652 $ 104,248 $ 43,040 $ 11,343 $ 54,383

(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 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.

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 nine months ended September 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 $ 95,000 and $ 62,000 for the three months ended September 30, 2024 and 2023, respectively, and $ 594,000 and $ 487,000 for the nine months ended September 30, 2024 and 2023, respectively.

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

June 30, 2024 December 31, 2023

September 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:

June 30, 2024

September 30, 2024

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

Receivables (2) Amortized Cost

Receivables (2)

of Loans Principal

18 unchanged sentences

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

Receivables (2) Amortized Cost

Receivables (2)

of Loans Principal

17 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 $ 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.

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

Net unamortized discounts on acquired loans included in the ending balance were $ 8.3 million and $ 8.6 million at September 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 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

Three Months Ended September 30, 2024

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

2 unchanged sentences

Commercial and industrial $ 5,985 0.38 % Added a weighted-average contractual term of 4 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

Commercial real estate 4,507 0.06 % Added a weighted-average contractual term of 5 months to the life of the loans

Total $ 10,492

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

Nine Months Ended September 30, 2024

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

9 unchanged sentences

Home equity 64 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

2 unchanged sentences

Home equity 69 0.01 % Extended the contractual term on one loan by 8.1 years and reduced the interest rate from 10.00 % to 6.80 %

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

Total Outstanding Modified $ 57,998

Three Months Ended June 30, 2023

Three Months Ended September 30, 2023

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

1 unchanged sentence

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 and industrial $ 7,915 0.48 % Added a weighted-average contractual term of 2 months to the life of the loans

Commercial real estate 719 0.01 % Added a weighted-average contractual term of 2.9 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 $ 8,634

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

Nine Months Ended September 30, 2023

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

1 unchanged sentence

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 and industrial $ 16,108 0.97 % Added a weighted-average contractual term of 2 months to the life of the loans

Commercial real estate 19,180 0.24 % Added a weighted-average contractual term of 1.8 years to the life of the loans

15 unchanged sentences

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

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:

The following tables depict the amortized cost and payment status of loans that were modified during the previous 12 months as of the periods indicated:

September 30, 2024

Payment Status (Amortized Cost Basis)

5 unchanged sentences

Small business 146 34 —

Residential real estate 297 — —

Home equity 133 — —

Total $ 58,262 $ 34 $ —

September 30, 2023

Payment Status (Amortized Cost Basis)

Current 30-89 Days Past Due 90+ Days Past Due

(Dollars in thousands)

Commercial and industrial $ 7,409 $ 504 $ —

Commercial real estate 16,252 660 —

Small business 140 — —

Total $ 23,801 $ 1,164 $ —

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

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.

At September 30, 2024, there were no loans modified to borrowers experiencing financial difficulty during the previous 12 months that subsequently defaulted during the three or nine months then ended.

During the three and nine months ended September 30, 2023, there was one commercial real estate loan that had a payment default and was modified within the previous 12 months as a combination term extension and other-than-insignificant payment delay, which had an amortized cost basis of $ 6.7 million.

At both September 30, 2024 and September 30, 2023, the Company had no additional commitments to lend to borrowers experiencing financial difficulty whose loans were modified and included in the above tables for the three and nine months then ended.

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 - STOCK BASED COMPENSATION

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

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

Time Vested Restricted Stock Awards

4 unchanged sentences

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

8/15/2024 3,703 2023 Omnibus Incentive Plan $ 59.42 Ratably over 3 years from grant date

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:

June 30, 2024

September 30, 2024

Weighted Average Rate

23 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 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.

The Company expects approximately $ 419,000 (pre-tax) to be reclassified as an increase to net interest income and $ 9.0 million (pre-tax) to be reclassified as a decrease to net interest income, from other comprehensive income related to the Company’s cash flow hedges in the twelve months following September 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 September 30, 2024.

The Company had no fair value hedges as of September 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

June 30, 2024

September 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 $ 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 .

The fair value of loans held for sale decreased by $ 16,000 and $ 28,000 for the three months ended September 30, 2024 and 2023, respectively.

For the respective nine months ended September 30, 2024 and 2023, the fair value of loans held for sale increased by $ 167,000 and decreased by $ 31,000 .

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 $ 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.

The aggregate amount of net realized gains on sales of mortgage loans included within mortgage banking income was $ 1.7 million and $ 333,000 for the three months ended September 30, 2024 and 2023, respectively, and $ 3.2 million and $ 677,000 for the nine months ended September 30, 2024 and 2023, respectively.

Balance Sheet Offsetting

9 unchanged sentences

2024 December 31

2023 September 30

2024 December 31

20 unchanged sentences

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

(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.

(3) Approximately $ 96,000 of accrued interest payable and $ 2.1 million of accrued interest receivable is included in the fair value of interest rate and loan level derivative assets, respectively, at September 30, 2024, in comparison to accrued interest receivable of approximately $ 316,000 and $ 3.0 million, respectively, at December 31, 2023.

(4) Approximately $ 777,000 and $ 2.1 million of accrued interest payable is included in the fair value of interest rate and loan level derivative liabilities, respectively, at September 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 Six Months Ended

June 30 June 30

Three Months Ended Nine Months Ended

September 30 September 30

2024 2023 2024 2023

1 unchanged sentence

Derivatives designated as hedges

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

Gain in OCI on derivatives (effective portion), net of tax $ 8,753 $ 202 $ 9,000 $ 4,917

Loss reclassified from OCI into interest income or interest expense (effective portion) $ ( 4,902 ) $ ( 7,547 ) $ ( 15,788 ) $ ( 20,806 )

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 June 30, 2024 and December 31, 2023.

All derivative instruments with credit-risk contingent features were in a net asset position at September 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 $ 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.

The Company’s exposure relating to institutional counterparties was $ 66.0 million and $ 95.8 million at September 30, 2024 and December 31, 2023, respectively.

The Company’s exposure relating to customer counterparties was approximately $ 11.0 million and $ 5.6 million at September 30, 2024 and December 31, 2023, respectively.

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

18 unchanged sentences

Valuation Techniques

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

There were no changes in the valuation techniques used during the nine months ended September 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 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.

However, as of September 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

June 30, 2024

September 30, 2024

(Dollars in thousands)

50 unchanged sentences

(Level 2) Significant

June 30, 2024

September 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 Six Months Ended

Three Months Ended Nine Months Ended

2024 September 30

2023 September 30

2024 September 30

(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:

June 30, 2024 December 31, 2023

September 30, 2024 December 31, 2023

(Dollars in thousands)

26 unchanged sentences

Three Months Ended

June 30, 2024 Six Months Ended

June 30, 2024

September 30, 2024 Nine Months Ended

September 30, 2024

Amount Tax (Expense)

13 unchanged sentences

Net change in other comprehensive income for defined benefit postretirement plans (1) ( 20 ) 4 ( 16 ) ( 61 ) 16 ( 45 )

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

Total other comprehensive income (loss) $ 48,704 $ ( 11,681 ) $ 37,023 $ 50,409 $ ( 12,784 ) $ 37,625

Three Months Ended

June 30, 2023 Six Months Ended

June 30, 2023

September 30, 2023 Nine Months Ended

September 30, 2023

Amount Tax (Expense)

23 unchanged sentences

Ending balance:

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

September 30, 2024 $ ( 67,561 ) $ ( 11,575 ) $ 1,934 $ ( 77,202 )

Beginning balance:

January 1, 2023 $ ( 128,657 ) $ ( 36,630 ) $ 2,203 $ ( 163,084 )

Net change in other comprehensive income (loss) 5,617 4,715 ( 183 ) 10,149

Net change in other comprehensive (loss) income ( 2,304 ) 4,917 ( 275 ) 2,338

Ending balance:

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

September 30, 2023 $ ( 130,961 ) $ ( 31,713 ) $ 1,928 $ ( 160,746 )

NOTE 9 - COMMITMENTS AND CONTINGENCIES

17 unchanged sentences

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

June 30, 2024 December 31, 2023

September 30, 2024 December 31, 2023

(Dollars in thousands)

9 unchanged sentences

Other Contingencies

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

At September 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