Rockland Trust eyeing expansion

For Rockland Trust Co. President and CEO Christopher Oddleifson, these are the best of times. The bank has done extremely well lately, and he expects Rockland’s size will double over the next five to seven years to approach $10 billion in assets, including an increase in its loan portfolio in the Ocean State. The bank currently has $5.1 billion in assets.
“There are bank regulations that kick in when you hit $10 billion, making it tough to go from $9.5 billion to $10.5 billion. Our vision is to increase the size of the bank to just under $10 billion,” he said.
Oddleifson credits the bank’s growth to its customer-service approach. “It’s the personal touch, the personal knowledge, it’s the relationship,” he said. “It comes back to the people and how you treat them.”
And while Rockland Trust has seen organic growth thanks to its approach to customers, it has not been shy to buy market share as well. “When we have the opportunity, we like to buy other banks, but that comes along only once in a great while,” Oddleifson said.
To help that strategy along, on Aug. 21, Independent Bank Corp., the Rockland, Mass.-based parent company of Rockland Trust, filed a shelf registration with the Securities and Exchange Commission asking to sell up to $125 million in common and preferred stock, depositary shares, warrants and other securities and contracts. The filing means the bank has two years to sell the shares. The proceeds, the bank explained, would be for general corporate purposes – cash in hand, so to speak.
“We have no plans to raise capital, but should an acquisition opportunity come,” he said. For example, in May the bank agreed to buy Central Bancorp in Somerville, Mass., for $54.8 million in cash and stock (Central Bank operates nine full-service offices and had $522.9 million in assets at the end of March.). In 2009, Rockland Trust bought Benjamin Franklin Bank for about $125 million, adding 11 branches and expanding west of Boston.
“They have definitely been moving the bank forwards over the last couple of years,” said Damon Delmonte, senior vice president of equity research at Keefe, Bruyette & Woods Inc. of Boston. He follows the bank on a regular basis. “They are doing all of the right things. They’ve really been able to capitalize on market disruption by way of taking market share from other, bigger players.” He also noted a marked growth in commercial loans. He said Bank of America, Sovereign Bank and Citizens Bank are three major targets that community banks in the Northeast might go after. “The bigger banks have been distracted for quite some time, and it’s been a great opportunity to take away market share.”
He too believes Rockland Trust has no intention of raising capital. “It’s a common practice for all banks to have a shelf in place in the event they need to go to the capital markets,” he said. “I wouldn’t read into that.”
The bank’s success might lead to a larger Rhode Island presence, beyond the current investment management and commercial-lending office that already are here, although it won’t be in the form of a larger retail, i.e. branch, presence.
For instance, in early August, Rockland Trust announced $18 million in refinancing for The Procaccianti Group’s Residences Providence, a 32-story mixed-use development building that offers more than 100 luxury condominiums, 200 hotels rooms, private parking, restaurants and retail space. Despite the state’s continued high unemployment rate and underperforming economy, the bank sees a lot of value in Rhode Island.
“The headlines don’t tell the whole story,” Oddleifson said. “There are a lot of pockets of strength in Rhode Island. We have already been able to generate a lot of good business from really strong, well-managed Rhode Island companies. It has opportunity, and it’s right next door.”
The bank has been hitting on all cylinders of late. In August, Rockland Trust’s Investment Management Group reached a milestone of $2 billion in assets, a 21 percent increase over the last nine months. Assets have doubled since 2006.
In April, Rockland Trust was ranked as the “Highest Customer Satisfaction with Retail Banking in the New England Region” in 2012 by J.D. Power and Associates, a global-marketing information services firm that conducts surveys of satisfaction and quality. It was also named to Forbes “Best Banks” list for the second consecutive year in February and chosen by The Warren Group of Boston, a real estate data compiler, as Massachusetts’ top commercial lender for the past two years.
Still, the bank has faced some challenges. Second-quarter earnings included a $4 million charge-off taken in connection with a working capital loan to a borrower that was unexpectedly placed into state court receivership in late June. •