XML 32 R11.htm IDEA: XBRL DOCUMENT v3.25.3
Acquisition (Notes)
 9 Months Ended
Sep. 30, 2025
Business Combination [Abstract]  
Business Combination [Text Block] ACQUISITIONS
Enterprise Bancorp, Inc.

On July 1, 2025, the Company completed the acquisition of Enterprise. For each share of Enterprise common stock, Enterprise stockholders had the right to receive 0.60 shares of the Company's common stock and $2.00 in cash, with cash paid in lieu of fractional shares. Total consideration was $503.1 million and consisted of $477.2 million of equity (7,478,906 shares) of Independent Bank Corp. common stock, plus $25.9 million in cash, including cash paid for stock option cancellations and fractional shares. The transaction qualified as a tax-free reorganization for federal income tax purposes and provided a tax-free exchange for Enterprise stockholders for the portion of the transaction consideration consisting of the Company's common stock. In addition to increasing its loan and deposit base, the Company believes it will be able to provide a deeper product set to Enterprise customers, as well as benefit from increased operating synergies, improving the long-term operating and financial results of the Company.
The Company accounted for the Enterprise acquisition using the acquisition method pursuant to the Business Combinations Topic of the FASB ASC. Accordingly, the Company recorded merger and acquisition expenses of $27.3 million during the nine months ended September 30, 2025 related to the Enterprise acquisition. Additionally, the acquisition method
requires the acquirer to recognize the assets acquired and the liabilities assumed at their fair values as of the acquisition date. The following table summarizes the estimated fair value of the assets acquired and liabilities assumed as of the date of the acquisition:

 Net Assets Acquired at Fair Value
 (Dollars in thousands)
Assets
Cash$123,638 
Investments590,267 
Loans3,913,112 
Allowance for credit losses on purchased credit deteriorated (“PCD”) loans(9,020)
Premises and equipment35,706 
Goodwill98,302 
Core deposit and other intangibles137,503 
Other assets164,908 
Total assets acquired5,054,416 
Liabilities
Deposits4,362,710 
Borrowings62,472 
Subordinated debt59,974 
Other liabilities66,116 
Total liabilities assumed4,551,272 
     Purchase price$503,144 

    Fair value adjustments to assets acquired and liabilities assumed are generally amortized using either an effective yield or straight-line basis over periods consistent with the average life, useful life and/or contractual term of the related assets and liabilities.

    Fair values of the major categories of assets acquired and liabilities assumed were determined as follows:

Cash and Cash Equivalents

    The fair values of cash and cash equivalents approximate the respective carrying amounts because the instruments are payable on demand or have short-term maturities.

Investments
    The fair values of securities were based on quoted market prices for identical securities received from an independent, nationally-recognized, third party pricing service. Prices provided by the independent pricing service were based on recent trading activity and other observable information including, but not limited to, market interest rate curves, referenced credit spreads and estimated prepayment rates where applicable.

Loans

The loans acquired were recorded at fair value. Fair value of the loans is determined using market participant assumptions in estimating the amount and timing of both principal and interest cash flows expected to be collected, as adjusted for an estimate of future credit losses and prepayments, and then applying a market-based discount rate to those cash flows.

    Acquired loans were reviewed to determine if any had experienced a more-than-insignificant deterioration in credit quality since origination. Loans meeting established criteria to indicate more-than-insignificant deterioration were identified as PCD loans. In connection with the Enterprise acquisition, the Company recorded an allowance for credit losses on PCD loans of approximately $9.0 million.
For PCD loans acquired from Enterprise, a reconciliation of the difference between the purchase price and par value of the
assets acquired is presented below:
As of July 1, 2025
(Dollars in thousands)
Gross amortized cost basis at July 1, 2025406,135 
Allowance for credit losses on PCD loans(9,020)
Interest and liquidity discount(10,444)
Basis in PCD loans at acquisition - estimated fair value386,671 

For loans acquired without evidence of more-than-insignificant deterioration in credit quality since origination, also referred to as non-PCD loans, the Company estimated an allowance for credit losses based on the Company’s methodology for determining the allowance under CECL. The resulting allowance on non-PCD loans was $34.5 million, which was recorded through a charge to provision for credit losses on the date of acquisition.

Premises and Equipment
    The fair value of the premises, including land, buildings and improvements, was determined based upon appraisals by licensed real estate appraisers. The appraisals were based upon the best and highest use of the property with final values determined based upon an analysis of the cost, sales comparison and income capitalization approaches for each property appraised.
Lease Assets and Lease Liabilities
Lease assets and liabilities were measured using a methodology to estimate the future rental payments over the remaining lease term with discounting using the Company’s incremental borrowing rate. The lease term was determined for individual leases based on the Company’s assessment of the probability of exercising renewal options. The net effect of any off-market terms in a lease were also discounted and applied to the balance of the lease asset.
Core Deposit Intangible
    The fair value of the core deposit intangible is derived by comparing the interest rate and servicing costs that the financial institution pays on the core deposit liability versus the current market rate for alternative sources of financing, while factoring in estimates over the remaining life and attrition rate of the deposit accounts. The intangible asset represents the stable and relatively low cost source of funds that the deposits and accompanying relationships provide the Company, when compared to alternative funding sources.
Wealth Management Customer List Intangible
The acquired wealth management division has longstanding relationships with a significant number of its customers which have been developed over time and are essential to the business. The fair value of the Enterprise wealth management customer relationship intangible was determined utilizing variations and combinations of the income and cost approaches. Revenue growth and customer attrition assumptions were used to determine projected cash flows, with adjustments made for contributory asset charges and costs associated with new customer development. The resulting net, or excess, earnings attributable to these relationships was then discounted to present value using an appropriate discount rate.
Deposits
        The fair value of acquired savings and transaction deposit accounts was assumed to approximate the carrying value as these accounts have no stated maturity and are payable on demand.
Selected Pro Forma Results
The following summarizes the unaudited pro forma results of operations as if the Company acquired Enterprise on January 1, 2025 (2024 amounts represent combined results for the Company and Enterprise). The selected pro forma financial information is presented for illustrative purposes only and is not necessarily indicative of the financial results of the combined companies had the acquisition actually been completed at the beginning of the period presented, nor does it indicate future results for any other interim or full-year period.
Three Months EndedNine Months Ended
 September 30September 30
 2025202420252024
(Dollars in thousands)
Net interest income $203,344 $179,722 $575,576 $526,439 
Net income$34,262 $52,934 $129,565 $170,053 
Included in the pro forma net income results for the three and nine months ended September 30, 2025 are merger-related costs of $18.0 million and $38.0 million, net of tax, recognized by both the Company and Enterprise in the aggregate, respectively. These costs were primarily made up of severance, contract terminations due to the change in control, legal fees and integration costs.