Indel B Annual Report 2014

FY2014 Annual Report · Indel B

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COMMITTED
TO STRONG
RELATIONSHIPS
’14

ANNUAL
REPORT

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Independent Bank Corp. had approximately $6.4 billion in assets as of December 31, 2014,
and is the holding company for Rockland Trust Company, a full-service commercial bank
headquartered in Massachusetts. Founded 107 years ago by local business owners as a
bank for businesses, Rockland Trust has a long heritage of innovation and customer focus.
We launched mobile banking twice: First in 1910 with a Model T Ford and again in 2011
with a digital banking suite of services for mobile devices. Our colleagues are recognized
year after year for providing exemplary service and living the promise Where Each
Relationship Matters®.

■ 86 Retail Branches as of February 21, 2015
■ 11 Commercial Lending Centers
■ 5 Investment Management Centers
■ Personal and Business Banking, Commercial Lending, Investment Management, Insurance,

Mortgages and Home Equity Lending, and Mobile and Internet Banking

■ Received an “Outstanding” Community Reinvestment Act rating

FINANCIAL CONDITION DATA

(Dollars in thousands, except per share data)

Loans
Total assets
Total deposits
Stockholders’ equity

Operating Data

Net interest income
Noninterest income
Noninterest expenses
Net income

Per Share Data

Net income—Diluted
Cash dividends declared

Operating Ratios

As of and for the year ended December 31

2014

2013

2012

2011

2010

$ 4,970,733

$ 4,718,307

$ 4,519,011

$ 3,794,390

$ 3,555,679

6,364,912
5,210,466
640,527

6,099,234
4,986,418
591,540

5,756,985
4,546,677
529,320

4,970,240
3,876,829
469,057

4,695,738
3,627,783
436,472

$ 196,042
69,943
171,838
59,845

$ 182,578
68,009
173,649
50,254

$ 172,799
62,016
159,459
42,627

$ 167,079
52,700
145,713
45,436

$ 163,961
46,906
139,745
40,240

2.49
0.96

2.18
0.88

1.95
0.84

2.12
0.76

1.90
0.72

Return on average assets
Return on average common equity
Net interest margin (on a fully tax equivalent basis)

Asset Quality Ratios

0.95%
9.66%
3.45%

0.87%
9.09%
3.51%

0.83%
8.66%
3.75%

0.96%
9.93%
3.90%

0.88%
9.46%
3.95%

Nonperforming loans as a percent of gross loans

0.55%

0.73%

0.64%

0.76%

0.65%

ON THE COVER: Michael Hogan, President and CEO of A.D. Makepeace Company (left), and Paul Vickery, Senior Vice

President and Regional Lending Manager for Rockland Trust, on site at Redbrook, a planned community currently under

development located on approximately 1,320 acres in South Plymouth, Massachusetts. Rockland Trust has a longstanding

relationship with A.D. Makepeace and provided major financing for Redbrook, the 160 year old company’s most significant

real estate development to date.

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Dear Fellow Shareholders,
Colleagues, Customers, and
Members of Our Community,

I’M PLEASED TO TELL YOU THAT 2014 WAS ANOTHER GREAT YEAR FOR OUR
COMPANY. OUR FOCUS ON PROVIDING EXEMPLARY SERVICE AND EXECUTING
OUR PLAN IN A DISCIPLINED MANNER CONTINUED TO DELIVER SUPERIOR
FINANCIAL RESULTS IN A DYNAMIC ECONOMIC, POLITICAL AND REGULATORY
ENVIRONMENT. As you will see, we achieved impressive new business momentum,
excellent credit quality, good expense control, and the successful integration of
Mayflower Bank. At least as importantly, the satisfaction of our customers and
engagement of our colleagues ranks among the highest of banks nationwide.

Throughout our 107 years in business, Rockland Trust’s vision—“Where Each
Relationship Matters”—has been the driving force behind our success in delivering
an excellent customer experience. We believe it all begins with a high quality
team of happy loyal colleagues who have a passion for serving customers and
the drive to make banking easier. This commitment to caring for and respecting
our colleagues and customers directly contributed to our outstanding financial
performance in 2014:
■ Record operating revenue of $59.9 million, up 8.6%
■ Record operating earnings per share of $2.50, up 4.6%
■ Loan growth of $252.4 million or 5.4%
■ Deposit growth of $224.0 million or 4.5%

Our management team is careful not to become complacent about our per-
formance, but we are nonetheless gratified when respected third parties acknowl-
edge our achievements.
■ Sandler O’Neill, a respected banking analyst, again selected us for their prestigious

2014 Sm-All Stars List, one of only 35 banks nationwide.

■ We were named to Forbes’ list of Best Banks for four consecutive years 2011–2014.
■ Rockland Trust was again named to Boston Globe’s Top Places to Work for the

sixth consecutive year (2009–2014), and was the top ranking bank in its category.

CHRISTOPHER ODDLEIFSON
PRESIDENT AND CHIEF EXECUTIVE OFFICER

Operating Earnings Per Share

$2.50

$2.39

$2.12

$2.16

2011

2012

2013

2014

2014 Annual Report 1

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EXEMPLARY BUSINESS RESULTS
We are fortunate to be located in a geographic area which was relatively mildly affected by the Great Recession, and
which has recovered more strongly from it. However, business investment and net new lending is just now beginning
to expand, meaning that banks in our region have been chasing the same existing transactions for the past several
years. Not surprisingly, this has had the effect of driving down pricing and margins.

Despite these headwinds, I am proud of our team for executing our plan and growing our customer base and
revenues in a superior manner. Additionally, we see much of our growth coming from satisfied customers referring
their friends and colleagues.

Our total loans grew by 5.4 percent to $5.0 billion, driven primarily by our Commercial Lending group, which
continues to attract more businesses with our team of experienced bankers and robust portfolio of financing capa-
bilities. A 9.8 percent increase in the Commercial and Industrial and a 4.4 percent increase in Commercial Real Estate
portfolios led to a 6.7 percent growth in total Commercial Loans.

Our Retail team continued to leverage our growing branch network and digital banking capabilities to grow
consumer and business households, contributing to a 4.5 percent increase in total deposits, and 7.7% improvement
in deposit fee income.

Further, our investment management business continues to gain momentum with record growth in 2014. Assets

under administration increased by 9.4 percent to a record $2.5 billion and revenue from those accounts was up by
16.7 percent to a record $19.6 million. Strong absolute investment performance and solid new business results were
the drivers of the investment team’s financial performance.

Improved credit quality, efficiency, and capital position further strengthened our solid fundamentals. Nonperform-
ing assets decreased 11.3 percent and now represent 0.61% of total assets. Net charge-offs on loans also remained low
at 0.18% of average loans. Our efficiency ratio improved to 64.6 percent. In addition, we increased our Tier 1 capital
Ratio to 8.8 percent. These provide a stronger platform for sustaining long-term growth by permitting us to invest in
our people and capabilities to keep pace with the changing environment around us. Examples of investments made
in 2014 include: creation of our Low Income Housing Tax Credit affordable housing program; completely new website
and tablet banking; and an exciting new branch prototype in Somerville’s Davis Square.

GREATER BOSTON EXPANSION
In last year’s letter I talked about our progress in expanding our presence north of Boston into Middlesex County
through the acquisition of Central Bank, and south of the City through our acquisition of Mayflower Bank. The suc-
cessful unification of those franchises with Rockland Trust introduced us to new markets, made us more efficient,
and opened up significant new avenues of growth. I would like to personally thank all our colleagues who worked
so hard to make the Mayflower Bank integration relatively seamless for our new customers and colleagues. This is
really important work!

Many of you have heard me talk about how important Greater Boston is to the future of our Company. Most of
New England’s economic growth occurs in this relatively small and dense geographic area. Fulfilling our master plan
for Greater Boston took a giant leap this past year with our announcement in August to join forces with Peoples
Federal Savings Bank. Peoples Federal will provide our company for the first time with a retail presence in the neigh-
borhoods of Boston proper and will also enable us to leverage our investment management and commercial lending
office in downtown Boston. Peoples’ eight branches also create a perfect bridge between our legacy South Shore
franchise and our more recent Northern franchise. We recently closed and integrated the Peoples Federal transaction
and are excited to welcome our new colleagues and customers to Rockland Trust.

Independent Bank Corp.

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STRATEGIC FOCUS
An important ingredient for Rockland Trust’s success is our strate-
gic discipline and focus. I talked last year about our management
realignment to allow us to improve this focus, particularly in the
areas of knowledge management and process improvement. Our
management team made significant progress in this area in 2014,
refining our customer segmentation, gaining customer insight,
and enhancing our products and service as a result. All of us are
focused on making banking easier for our customers, and we are
confident these improvements in our customers’ experience will
also accrue financial benefits to the Company.

Our Board of Directors led by Donna Abelli has been extremely

engaged and provided valuable guidance and insight this past
year. In 2014, we had notable departures. Robert Sullivan, Richard
Anderson, and Richard Sgarzi each retired after many years of
dedicated service. We also bid a sad farewell to long-time Director
Benjamin A. Gilmore, II, due to illness. Ben joined our Board in 1989
and served with distinction for more than 20 years. He provided
outstanding leadership throughout his tenure, including Chairman
for the last several years of our Compensation Committee, and
will be missed by all who knew him.

I couldn’t be more proud of what our team has achieved

this past year. We have a spirit of cooperation and commitment
to do what is right for the customer that is rare in our industry
today. I want to again thank my colleagues for going above and
beyond to make banking easier for our customers. I would also
like to thank our customers and shareholders for their continued
vote of confidence. We endeavor to build even stronger relation-
ships with each of you in the coming year.

Warmly,

Chris Oddleifson
President and Chief Executive Officer
Independent Bank Corp.
Rockland Trust Company

OUR COVERAGE

10/2014

E S S E X

BOSTON

$5 BILLION
TOTAL DEPOSITS IN 2014

“

Our fundamentals continued
to lead the way, reflecting our
well-positioned franchise and
the growing power of the
Rockland Trust brand.

”

8.6%
INCREASE IN
OPERATING
NET INCOME

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2014 Annual Report 3

A Year of
Achievements

RANKED 4TH BEST OVERALL AMONG THE
LARGEST EMPLOYERS IN MASSACHUSETTS.

TOP RANKING BANK IN OUR CATEGORY.

NAMED TO BOSTON GLOBE’S TOP PLACES
TO WORK LIST FOR SIX CONSECUTIVE
YEARS (2009–2014).

WE WERE NAMED TO
FORBES’ LIST OF
BEST BANKS
FOR FOUR
CONSECUTIVE
YEARS 2011–2014.

COMMERCIAL LENDER IN MASSACHUSETTS
BY BANKER & TRADESMAN 2014.

NAMED TO SANDLER O’NEILL’S
2014 SM-ALL STARS LIST OF
TOP PERFORMING SMALLCAP
BANKS AND THRIFTS IN THE COUNTRY

NAMED TO THE GLOBE 100

THE BEST OF
MASSACHUSETTS
BUSINESSES
FOR EIGHT CONSECUTIVE
YEARS: 2006–2013.

We believe Rockland Trust is the most valuable independent
franchise in its market. –Baird, 10/17/14

“
”
COMMUNITY IMPACT

NAMED A 2014 TOP CHARITABLE CONTRIBUTOR

BY THE BOSTON BUSINESS JOURNAL. HONORED AT THE BBJ’S

ANNUAL CORPORATE CITIZENSHIP SUMMIT.

Our 1,060 employees receive two paid days off per year to volun-
teer to nonprofit organizations through RockCORP, the Company’s
employee volunteer group. In 2014 our employees gave back to
the community by volunteering more than 6,000 hours of their
time to local organizations. Through our chari table giving pro-
grams we focus on improving the quality of life in our neighbor-
hoods and donated more than $600,000 to community programs
and organizations in 2014. For more information, visit:
https://www.rocklandtrust.com/community

Independent Bank Corp.

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Corporate
Information

BOARD OF DIRECTORS
Donna L. Abelli
Chair

William P. Bissonnette

Kevin J. Jones

Eileen C. Miskell

John J. Morrissey

Christopher Oddleifson
President and
Chief Executive Officer

Daniel F. O’Brien

Carl Ribiero

John H. Spurr Jr.

Maurice H. Sullivan, Jr.

Brian S. Tedeschi

Thomas R. Venables

CORPORATE OFFICERS
Christopher Oddleifson
President and
Chief Executive Officer

Edward Seksay
General Counsel and Secretary

Robert Cozzone
Chief Financial Officer
and Treasurer

Mark Ruggiero
Senior Vice President, Controller,
and Principal Accounting Officer

Gerard Nadeau
Executive Vice President
Commercial Banking

Jane Lundquist
Executive Vice President,
Director of Retail Delivery,
Business Banking and
Home Equity Lending

Edward Jankowski
Director of Residential Lending
and Compliance

Barry Jensen
Chief Information Officer

Ray Fuerschbach
Director of Human Resources

Mark Gibson
Chief Marketing Officer

David B. Smith, CFA
Senior Vice President and
Chief Investment Officer

Kathryn T. Robson
Senior Vice President and
Chief Internal Auditor

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Rockland Trust’s Davis Square branch in Somerville, MA

experienced a transformational renovation in 2014.

Somerville has among the highest concentration of

Millennials in the U.S., and the exciting facility rep-

resents the bank’s latest thinking from an advice-

based sales and service standpoint as well as digital

marketing and branch design.

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INDEPENDENT BANK CORP.
288 UNION STREET
ROCKLAND, MA 02370
(781) 878-6100

The full Annual Report and Form 10-K
can be viewed on our website by going
to https://www.rocklandtrust.com/about-us
and clicking on Investor Relations

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