Summary of INDB Q4 2025 Earnings Call

1Key Financial Results and Metrics

GAAP Net Income: $75.3 million; Diluted EPS: $1.52.

Adjusted Operating Net Income: $84.4 million; Adjusted EPS: $1.70.

Return on Assets (ROA): 1.20%; Return on Average Common Equity (ROE): 8.8%; Return on Average Tangible Common Equity (ROTCE): 12.77%.

Net Interest Margin (NIM): Increased to 3.77%, with an adjusted margin of 3.64%.

Total Deposits: Decreased 0.8% quarter-over-quarter; however, average core deposits grew 3.6% annualized.

Net Charge-offs: Averaged 11 basis points over the last three quarters; total nonperforming assets remained stable at $85.7 million.

2Strategic Updates and Business Highlights

Successful integration of the Enterprise acquisition, retaining nearly all client-facing personnel and achieving strong deposit retention rates.

C&I loans grew 9% organically in 2025, now representing 25% of total loans.

Wealth Management business remained stable with Assets Under Administration (AUA) at $9.2 billion.

Returned $164 million of capital to shareholders, including share repurchases.

Focus on organic growth, expense management, and capital optimization for 2026.

3Forward Guidance and Outlook

2026 Targets:

ROA of 1.4% and ROTCE of 15%.

Mid-single-digit growth for C&I loans; low single-digit growth for combined CRE and construction loans.

Low- to mid-single-digit growth for total core deposits.

Anticipated NIM growth to 3.85% to 3.90% by Q4 2026, assuming two Federal Reserve rate cuts.

Continued focus on managing expenses, with projected operating expenses for 2026 between $550 million and $555 million.

4Bad News, Challenges, or Points of Concern

Total period-end deposit balances declined slightly, attributed to seasonal business deposit activity.

Credit quality concerns with an increase in nonperforming loans, particularly related to one specific loan in the office portfolio, although management expects resolution without significant loss.

The company is cautious about geopolitical risks and their potential impact on customer sentiment and credit quality.

M&A activity is not a focus currently, which may limit growth opportunities.

5Notable Q&A Insights

Management expressed confidence in maintaining deposit betas around 20% for non-CD deposits and 80% for CDs, despite potential Fed rate cuts.

The company is not currently pursuing M&A, focusing instead on organic growth and the upcoming core systems upgrade.

There is a cautious outlook on credit quality, with management suggesting they believe they are nearing the peak of the current credit cycle.

The exit from the floor plan lending business, which had been a legacy operation, is expected to impact loan growth metrics but is seen as a strategic decision to align with risk profiles. Overall, INDB reported solid financial performance in Q4 2025, driven by effective integration of the Enterprise acquisition and strong C&I loan growth, while also navigating challenges in credit quality and deposit balances. The outlook for 2026 remains positive with targeted growth and prudent capital management strategies.