Independent Bank Corp Reports Mixed Q3 Results, Net Income Decreases Due to Fair Value Changes

Independent Bank Corp (MI) reported its financial results for the third quarter and the nine months ended September 30, 2024, showing a mixed performance in revenue and profitability compared to the previous fiscal period.

As of September 30, 2024, total loans increased to $3,942.3 million from $3,790.9 million at the end of 2023. Net loans also rose to $3,884.8 million, up from $3,736.2 million. Total deposits saw a slight increase to $4,626.9 million, compared to $4,622.9 million at the end of 2023. Total shareholders’ equity improved significantly to $452.4 million, up from $404.4 million.

For the three months ended September 30, 2024, interest and fees on loans reached $58.4 million, an increase from $51.4 million in the same period of 2023. Total interest income rose to $68.3 million from $62.4 million, while net interest income increased to $41.9 million, compared to $39.4 million in the prior year. However, net income for the quarter decreased to $13.8 million from $17.5 million, primarily due to a $5.7 million unfavorable change in the fair value of capitalized mortgage loan servicing rights, despite the increase in net interest income.

For the nine months ended September 30, 2024, net income was $48.3 million, up from $45.3 million in the same period of 2023. Basic net income per common share for the nine months increased to $2.31 from $2.16, while diluted net income per share rose to $2.29 from $2.14.

The provision for credit losses for the nine months was $2.3 million, a decrease from $6.8 million in the previous year, reflecting improved credit quality. Non-performing loans slightly decreased to $5.1 million from $5.2 million, while total non-performing assets increased to $5.9 million from $5.8 million.

In terms of strategic developments, the company has an authorized share repurchase plan for up to 1,100,000 shares, although no shares were repurchased during the nine-month period ended September 30, 2024. The company also reported a significant increase in unrealized gains on securities available for sale, reflecting improved market conditions.

Overall, while Independent Bank Corp experienced growth in loans and deposits, profitability was impacted by changes in the fair value of mortgage servicing rights and increased non-interest expenses. The company continues to focus on maintaining a strong capital position, with total capital to risk-weighted assets ratio at 14.25% as of September 30, 2024.