Independent Bank Corp (INDB) Q3 2026 Earnings Call Transcript

Hello, everyone. Thank you for joining us, and welcome to the Independent Bancorp 3rd Quarter 2026 Earnings Call. After today's prepared remarks, we will host a question-and-answer session. If you would like to ask a question, please press star 1 to raise your hand. To withdraw your question, press star 1 again. Before proceeding, please note that during this call, we will be making forward-looking statements. Actual results may differ materially from these statements due to a number of factors, including those described in our earnings release and other SEC filings. We undertake no obligation to publicly update any such statements. In addition, some of our discussion today may include references to certain non-GAAP financial measures. Information about these non-GAAP measures, including reconciliation to GAAP measures, may be found in our earnings release and other SEC filings. These SEC filings can be accessed via the Investor Relations section of our website. Finally, please note that this event is being recorded. I would now like to turn the call over to Jeff Tangle, CEO. Please go ahead.

Thank you. Good morning and thanks for joining us today. I'm accompanied this morning by CFO and Head of Consumer Lending, Mark Ruggiero. We are pleased with our third quarter results. We generated solid loan and deposit growth, maintained the core net interest margin despite heightened deposit competition, continued to aggressively buy back stock, managed our expenses tightly, and had very modest net charge-off activity. Our deposit franchise continued to differentiate itself, producing over $230 million of non-time deposits, representing 5.4% annualized growth. While up six basis points from last quarter, our 142 cost of deposits remains industry-leading. These results were achieved in a very competitive environment with growing expectations that the Fed will continue to move rates higher. On the lending front, we generated total loan growth of $158 million or nearly 3.5 percent annualized. We experienced growth across a number of asset classes including C&I, commercial real estate, home equity, and residential mortgage. Excluding the impact of the $11.5 million runoff from our dealer floor plan business, which has been fully exited, our C&I loans rose by $61 million, or a healthy 5% on an annualized basis. While C&I growth was not as robust as in the second quarter, we have a very healthy pipeline heading into the fourth quarter and had several loan closings slip into October. Commercial real estate, including construction loans grew by $31 million during the quarter, primarily reflecting increased construction draw activity and a reduced level of payoffs. We funded $202 million in new relationship-based commercial real estate loans in the third quarter. Loan payoffs and paydowns were down 27 percent from the second quarter, and our CRE concentration now stands at $278. on september 30th our approved commercial loan pipeline pulled with 574 million dollars up from 510 million on june 30th our loan pipeline has benefited from strong origination activity new hires across several business segments and a pivot by the legacy enterprise bank relationship managers from defense to offense despite the competitive loan and deposit environment the third quarter saw stability in our adjusted NIM. This reflects the favorable repricing of loan and bond cash flows as well as pricing discipline across both our loan and deposit portfolios. Mark will elaborate on our NIM during his comments. As the environment continues to shift, we recognize the best use of our capital is to build deep profitable customer relationships and not grow our balance sheet at thin, risk-adjusted spreads. This means we will continue to support our customers, be competitive for the right deals, and grow prudently. We also continue to maintain a proactive posture in returning excess capital to shareholders. Capital management will remain a key priority for the balance of the year. Regarding asset quality, while we continue to see movement in and out of our non-performing loans and criticized and classified loan buckets, the levels are consistent with our historical credit performance. Our net charge-offs were just two basis points for the third quarter and have averaged just six basis points over the last five quarters, represented 14 basis points of average loans in the third quarter, and has averaged 12 basis points over the last five quarters, excluding the impact of the enterprise acquisition. Over the last 20 years, our loan loss provision and net charge-offs have had an average of 21 basis points and 16 basis points of average loans, respectively. lead. The economic landscape continues to be challenged by higher interest rates, inflationary concerns, the Iran War, tariffs, among other things. Importantly, however, we have not seen any degradation of credit from these pressures. We have seen a few instances where higher rates have resulted in business owners pausing plant spending and or projects, particularly in the commercial real estate space. During core systems conversion costs, expenses were down compared to the second quarter. We remain vigilant regarding our expense level. As we've stated in the past, given the investments we have made in people and technology over the past few years, we believe we have the scale to continue to grow without significant additions to our expense base. Of note, we have elected to move the timing of our planned systems upgrade from October to February to allow for additional preparation and ensure a smooth, well-managed implementation. The revised timeline provides additional flexibility to complete the necessary testing and readiness activities while minimizing potential disruption to our operations and customers. We believe this measured approach positions us for a successful implementation and does not change our overall objectives for the upgrade, which include enhanced operational efficiencies and additional product capability. I continue to tell the team, you only get one chance to do this well and minimize customer impact, so we are laser-focused on getting it done right. We've started to beta test some early AI applications. The first use cases will be internally oriented and will not have any customer impact. As I have mentioned in the past, this will allow us to develop muscle memory and gain confidence in our ability to execute before we take on bigger, more impactful applications. Beginning in November, we will consolidate our corporate headquarters into a single location at one technology place in Rockland, Mass., bringing nearly 400 employees together from five separate office buildings. In addition to the operational efficiencies, we expect this move to foster greater collaboration, strengthen teamwork, and further enhance our corporate culture. Strategy remains straightforward. Drive organic growth through new and existing relationships, maintain disciplined underwriting, generate positive operating leverage and deploy our strong capital position to create long-term shareholder value. I want to thank all of the Rockland Trust employees for their tremendous efforts on a daily basis. Every measure of our success is a direct result of their commitment.

Thanks, Jeff. Your net income was looted. EPS was $1.90, representing a 12% increase over prior quarter EPS results. The quarter results reflect record earnings in EPS for the bank and showcase our continued growth in overall profitability. Return on assets for the common equity was 15.4%. Both metrics already meeting profitability targets. Eyes are set on continuing to improve profitability from these levels. There are a lot of moving pieces, and as such, we will provide full year 2027 guidance with our fourth quarter. Driver of the third quarter earnings increase was the overall increase in net interest income. Deposit balances, including an increase in average deposits of over $630 million, the overall average balance sheet grew nicely, countering the growth in interest in 0.89% benefit. Seasonality, the quarter end balances, no secret that deposit rate competition is very high. Our approach remains steadfast. Be competitive. As Jeff alluded to, we are seeing really good progress in a very competitive environment led to a modest increase in total Cree and construction balances, while C&I grew at a 4% annualized. We did anticipate a slightly higher growth result in C&I. However, the activity remains very strong with approximately $40 million of anticipated Q3 fundings. With long-term rates pushing up higher, home equity demand was very strong with approximately 12% annualized growth for the quarter, while residential mortgage activity remains challenged. Towards capital management, during the third quarter we repurchased $57.4 million in capital, executing on our long-term goal of prudently returning excess capital to shareholders. As of September 30th, our CET1 ratio sits at 12.7%, and our tangible capital ratio is at 9.4%. Our interest rate environment has already put some pressure on other comprehensive income within the capital stack. However, our strong overall capital and liquidity levels, combined with a close monitoring of both our available-for-sale and health-mature, will continue to afford us to find out the overall financial position update on the borrowing side, earning $100 million FHLB borrowing, and we paid down $100 million of our $125 million holding company line of credit, with the remaining $25 million balance converting into a term debt structure. $125 million holding company in 70 basis points. The following notable items, that's increased to $126.2 million, or 0.5%. The increase is primarily driven by one office loan currently in workouts, $25 million. That reserve, along with some smaller moving pieces within the allowance model, drove a $6.5 million provision for loan loss for the quarter. Stable at 3.9% of total commercial loans. The charge-offs for the quarter remained low. $17 million will be charged off by both the new to non-performing fee income of 40 and ATM fees, all experienced increased banking, and loan expense management across all major categories. I'll highlight a few unique items and looking at quarter-over-quarter changes. First, within salaries and benefits, the third quarter results included a $1 million benefit relating to the fair valuation. The FDIC assessment expense decreased as it does include an approximate $400,000 retro. Within other non-interest expense, the prior quarter expense included approximately $900,000 with minimal related expenses. And as an update on our core expenses associated with the project in the quarter, bringing the year-to-date total shift, as Jeff mentioned, now to a 2027 Q1 conversion date. We anticipate an additional $1.5 to $2 million of one-time expenses to be incurred over the next couple of systems at 23.3. I'll now finish up by providing for starting loan growth, we estimate Korean construction to increase at a low single-digit annualized percentage, while for C&I, we anticipate a mid-single-digit annualized percentage increase. We anticipate home equity to remain strong with high single-digit percentage annualized growth, while mortgage balances are anticipated to stay relatively flat to a low single-digit percentage increase. With seasonality impacting period end balances, it's likely staying relatively flat to a low single-digit annualized growth. We think it is appropriate to also guide net interest income dollars in addition to the margin. Regarding net interest income, the third quarter is a seasonal increase within deposits that drove a big increase. Regarding the marginal reserve action, we would anticipate the reported margin to land. This is again in the forecast on the longer end of the curve. A couple basis points. Fee income is answered your percentage range. And on the expense side, we anticipate operating expense. This concludes my comments, and with that, we will now open it up for questions.

We will now begin the question and answer session. Please limit yourself to one question and one follow-up. If you would like to ask a question, please press star 1 to raise your hand. To withdraw your question, press star 1 again. We ask that you pick up your handset when asking a question to allow for optimal sound quality. If you are muted locally, please remember to unmute your device. Please stand by while we compile the Q&A roster. Our first question is from the line of Betty Strickland from Havdi Group. Your line is now open. Please go ahead.

Hey, good morning, Jeff and Mark. Let's start on the credit side. Can you provide any more detail on the office credit that entered non-approval this quarter, geography, type, and just expectations for the workout process there?

Sure. It's a local office loan. Basically, another to leave and is planning to vacate the empty office building. We're working with the sponsor. There is that facility to multifamily. That's early stages in terms of that process. So we thought it was appropriate to look at, you know, an appraisal, an evaluation as an empty office building as well as a potential $0.5 million reserve.

The other thing I would add is the sponsor has a history of supporting their projects. And so they've been supporting this one. We proactive. They're looking for a partner, a multifamily, for it to work itself out, but a little bit of optimism based on the sponsorship.

That's a good point. So it had been performing up until September 30th. This resolution, we thought it was appropriate to put it on discretionary non-accrual.

Thanks for the color. And just more broadly, I think you've got about $17 million or so in classified office coming due in the fourth quarter. Can you just give us a high level of how you think about those as they come due?

Yeah. The good news there, Freddie, I guess, is that's one loan. And just a reminder, that is a million-dollar reserve on that loan already established. So it's being marketed for sale. We've seen some early interest solution on that, but that's one loan with a...

If I could just squeeze in one more on loan growth, it seems like you've had some pretty solid momentum on the loan side, a good pipeline building there. How should we think about the timeline for that getting deployed? And can you remind us on typical seasonality?

Yeah, the C&I loan growth, I think, is not very seasonal, in part because a lot of the growth has been, you know, new client acquisition. And, you know, so that hasn't been very seasonal. So my expectations on the C&I side is we're going to continue to see, you know, kind of that mid-single-digit growth that we just talked about, you know, through the fourth quarter and into 27. The commercial real estate portfolio is a little bit different. Obviously, we grew a little bit this quarter, in part because of the construction loan draws and the lack of paydowns. If you recall, we had, you know, outsized paydowns in the second quarter, which really muted our loan growth. And in that asset class, we did not see the same elevated level of payoffs in the third quarter. And while rising interest rates can make it a challenge for new projects, it also makes it more difficult to refinance. So we think that, as we saw in the second quarter, I don't know, Mark, do you want to come in on the consumer portfolio?

Yeah, similar to the third quarter results, I would expect you'll see home equity demand continue to stay pretty strong. And for the same reason Jeff just talked about sort of some of the CRE dynamics, certainly the higher interest rates is challenging saleable mortgage volume. You know, a lot of what we're seeing now is, you know, it's basically 80% purchase, 20% refi. And most of that purchase, if there's an adjustable rate demand, we will portfolio that. So you may see a little bit of portfolio growth, but I would expect mortgage banking income to stay challenged. Thanks for the color. I'll sit back. Thank you.

Your next question is from the line of Justin Crowley from Piper Sandler. Your line is now open. Please go ahead.

Hey, good morning, everyone. Hi, Justin. I wanted to start off on the NIM. Mark, do you have detail on just how the margin progressed through the quarter, you know, where that ended the period, and then maybe just also the spot cost of deposits, if you have it?

Sure. So, a gradual increase into September. I will caveat, so the spot NIM for $381, but you'll start to see a little bit of noise there because the securities portfolio will print at a meaningfully higher yield as you see a little bit more of that OCI unrealized loss in that number. We can certainly, going forward, think about maybe giving that yield also on a kind of an adjusted book basis but for now you'll see a little bit of elevated yields in the securities book just because of that that loss piece embedded in it and we did a better job of shifting some of that excess cash into the securities portfolio so just the mix of earning assets got drove a bit of a lift in the margin probably the biggest impact on the cost. Cost of deposits for September was 144, 1.44%. So I would expect to see a bit more deposit cost pressure heading into the fourth quarter. What you're not seeing in the third quarter margin results is the front end of the curve, index-based loans getting the benefit on loan yields. So we'll see a little bit of acceleration in loan yields out of the gate. We'll still have the repricing benefit affecting both loans and securities. So I do expect earning asset, you know, the asset yields to improve nicely. I'll expect deposit costs to go up a little bit. But I do think we'll be able to, you know, increase the adjusted core margin by a few. Does that make sense? There's a lot of moving pieces there, hopefully.

Yeah, no, that's super helpful. I appreciate that. But I guess, like, any early read on how you think that margin could behave as we get into next year with, you know, maybe a couple more hikes on the table? And maybe just more thematically, as I know you'll get into formal outlook come January. But, you know, you've got that constant debate between defending NIM or tolerating some pressure to grow NII. So just kind of curious how you're thinking about that moving forward.

Yeah. You know, I know in a number of conversations over the last quarter or two we've been asked, I think the answer there is still yes. particularly because of that back-book repricing benefit with rates continuing to inch up a bit higher. You're seeing really strong, over $500 million of cash flow expected over the next four to five quarters. That alone can drive upwards of seven basis points of expansion in the margin. So assuming we can equalize any Fed action with loan yields and deposit costs, that back-book repricing would stay. I do think there is a –

Okay, got it.

And then if I could just squeeze maybe one last one. Just on the buyback, you've got at least the optics of OCI moving against you, but what's the overall thinking there? And, you know, could you look at even more active just given how the stock and, you know, really the whole group's traded over the past couple months?

It's a fair question. I would – of 100% of profits being returned via common dividend and buyback is still the expectation. You know, right now, I don't know if we'll get much more aggressive than that. You know, I've always talked about just balancing the funding of that and continuing to fund through bank profits is important. But, you know, we certainly have the capacity, I think, and the appetite to do a little bit more. but I'd say a minimum level of 100% of profits, inclusive of the dividend. Perfect.

Great. I'll leave it there. I appreciate it.

No problem.

Your next question comes from the line of Lori Hunsicker from Seaport Research Partners. Your line is now open. Please go ahead.

Yeah. Hi. Good morning, Dr. Mark. Thanks for taking my questions. Just wanted to circle back to credit here. You know, I know the jump, the non-performers, it looks like, as you said, was all office, but I just wanted to get the actual dollar amount. Was that a $22 million loan then, or do you have a better number?

We didn't make that clear. It is a $22 million loan, $22.4 million.

$22.4 million. Okay, great. And then, obviously, so if I'm just looking at the breakdown of the $62 million in non-performers, office non-performers, so $22.4 million is the new non-performer. You still have that $22 million snack, or is there a better balance on that loan?

Yep, that's paid down a little bit, Lori. That's basically 22 even now, 21.922, right around there. Okay.

And is there still a thought that that one might come current in the fourth quarter?

Yes, I think it'll be January of 2027. It's a six-month performance period, so I think it's going to be a Q1 event. But, yes, it is still on track returning to accrual.

That's great. And then the $17 million that you have in life sciences, non-performers, is that your only non-performer in life sciences?

Yes. It's about $100 million portfolio, and I'm pretty certain that's the only non-performer. And just a reminder, I'm $17 million with a lot of reserves.

Okay, great. And any thought on when we might see movement on that one?

Yeah, I'm hoping, you know, if we could get that resolved by calendar year, that would be great. It could spill over into the first quarter. You know, that's a little between, you know, on another office property that is a much longer, I think it's a 2030 maturity date, but there is, you know, a little over $14 million in resolve in the next couple of quarters.

So when they get resolved, we should not resolve in much. conversations going on now with a handful of larger office loans, and, you know, we feel pretty good about the quality of the dialogue and moving forward, resolving them, as Mark suggested. You know, there is some lost content in some of those with balance sheets in order to do

Next question comes from the line of Steve Moss from Raymond James.

Your line is now open. Please go ahead.

Hey, good morning, guys. I guess, Mark, just to answer your question with what you were trying to say to Lori, it cut it off before you started speaking, at least on my end.

I appreciate that. Lori, you can obviously come back into the queue, but it's $22.2 million, which is the new one. There's the $22 million, which is the SNCC, and the $11 million. So those make up. Thank you, Steve.

Absolutely. And just a quick follow-up on Office here. Just curious, what are the total reserves for the office portfolio here?

So, specific reserves, $1 million we have. So, there's essentially $22 million. And then, you know, on top of that would be your…

Great. Appreciate that. And then, maybe going back to the margin here, in terms of just on the, you know, I guess two things. I'm curious as to, you know, what types of securities and yields you're purchasing these days. especially as we look at, you know, and also just thoughts on the book going forward. And then the second thing, just, you know, where are loan yields, loan registration yields these days, and, you know, how much do we expect in terms of cash flows from the securities portfolio, from the loan portfolio over the next 12 months?

Security yields, purchasing security, I'd say there's a good chance that's nearing 6%. We're staying pretty mortgage-backed, agency-backed mortgage securities. We still find good value in low-coupon, deep-discounted securities, where it gives us some downside protection, likely less bond, and that's giving us the nice lift. If anything, it probably suggests it could move a bit higher. That's at about a 2.5%. On the loan side, it's still scientific on a number, but you're seeing likely $1.5 to $2 billion in our cash flow 5% yields.

And then in terms of just kind of expenses here, you know, with the systems conversion, you know, getting pushed into the first quarter, you know, appreciate the color on the guidance for the fourth quarter.

Just kind of curious how you're thinking about maybe an early thought process on expenses, total expenses for 2027.

yeah not ready to give full year 27 guidance but i would just reiterate you know jeff's opening comments around you know we we believe we we have the ability to that doesn't mean we will not invest in this company there's certainly technology enhancements there's ai development of the lot we want to get done we think the core conversion is a big step in continuing to enhance to our technology and get more efficient, but, you know, we'll look to invest in those by really being disciplined in others. You know, without giving specific guidance, I think, you know, what you're seeing in 2026 would be the goal to kind of move forward into 2027. There'll be merit increases. There'll be inflationary impact, I'm sure, on some of our logic, I think, just in terms of overall spend.

Great. I appreciate all of you here in a nice quarter. Thanks, Steve.

Your next call is from the line of Lori Hunsicker from Seaport Research Partners. Your line is now open. Please go ahead.

Yeah, hi. Yeah, good morning again. Just wanted to circle back one thing on expenses. Is there any one-time targets you're taking with the consolidation of the headquarters, or has that already been baked in?

Yeah, that's a great question. We have not yet. But there will be, and we'll give that as part of it. It won't be written to 2028 to be accelerating. There will be 2027 numbers, Laurie. But I'll give that as part of the full year guide next quarter.

Great. Thanks. I'll leave it there.

Your next question is from the line of Jared Shaw from Barclays. Your line is now open. Please go ahead.

Hey, good morning. Could you just give us some context around what drove the decision to move the core conversion? out to February, I guess, you know, what changed since the September investment deck. And then when we think about the earnings impact, Mark, I think you've pointed out, you know, an additional or incremental cost for fourth quarter. Is that just maintaining both systems in the fourth quarter? And we should just think about the delay just sort of pushing the efficiency benefits out past February, or is that an incremental cost for running additional testing?

Yeah, I'll take the first part of that, Jared, and it really was not a lot more than what I shared in my prepared remarks. We just didn't feel like we were ready. There's a lot of reasons for that. Not all of it was on us, I'll say that. but as we were getting more clarity around kind of the lift that we thought we would need in order to get it done in October, the stress we were putting on our employees to try and get that done and then the risk of it not going well, we just felt like it was prudent. We have all of our ducts in our revenue that will be done with minimal customer disruption, significant incremental costs to push it out. So that also gave us comfort that it was something that we probably should do and had really, you know, nothing more than that. And as I also mentioned in my prepared remarks, you get one chance to get this right. And if you don't, then you'll have customer implications for a while. And so I really felt like we needed to make sure that we get it right so that we don't have any negative customer.

I'm part of that question, Jared. The expense, the one-time expense I would think of as really outside third-party consulting, there's really no, we're not, unquote, running parallel, so there is core run rate expenses going through the P&L. The good news, just as a reminder, is we expect the upgrade new system to be, you know, pretty much the same run rate as what we're paying today. So we've been able to negotiate a pretty good contract there. The one-time cost you're seeing are outside third-party consulting help, and that's what we'll hit in the fall.

Okay. All right. Thanks. And I guess just for my follow-up, shifting back over to margin, you know, if we look at that sort of, you know, mild post of 4% at the end of 27 based on no-fed moves, what happens if we get one to two hikes sort of mid-year? I think you said if we get a hike in fourth quarter, that could be a couple of basis points, but how should we think about merging with a couple of hikes next year?

Yeah, I think the slope of the curve is still really important. The non-CD book, 5% to 30% beta, inclusive of the DDA, under the loan book, so I think you'd get a timing lag. is shifting the pricing a bit to be through 2026. A lot of our strategy was to not attract a lot of interest into the CD book. But I think as we're getting a bit more clarity over normal, back to kind of a normal-shaped pricing curve, if that makes sense.

Yeah. Okay. Thank you.

Next question is from a line of Acubreeze from Stevens, Inc. Your line is now open. Please go ahead.

Good morning, everybody. So just thinking about the commercial pipeline, it's grown for three straight quarters, now at $574 million, but obviously real-life loan growth has been much more modest. Knowing that prepay and payoff activity is a big driver, if you were to kind of circle or look at the prepays and payoffs individually, how much of that would you chalk up to being really unusual and outsized, and with that kind of production activity, the $575 million pipeline, what kind of a normalized pace of growth?

Well, so keep in mind that the pipeline that we talk about are commitments. They're not outstanding, so that would be one just point of clarification, and in the real estate book where we've seen most of the payoffs and paydowns, other than just normal amortization, the outside payoffs we've seen, especially in the second quarter, were kind of one-off, and they were, you know, we had a couple of larger relationships that in particular were loans that were paid off, and I think that drove a lot of the, you know, a lot of the pressure on loan growth there. So, if I'm understanding your question correctly, I mean, we think that the C&I business is going to continue to grow. The real estate business, one of the unique aspects of that is to the extent we're growing and we have seen a little bit more construction loan activity, including in the LIHTC space, those loans don't fund up right away. And so it'll take, you know, 12 or 15 months before we start to see any funding on them. And so I think we're still, you know, again, assuming normal levels of payoffs and amortization, we're expecting kind of close single-digit growth in the commercial real estate portfolio going forward.

Just one quick add to that. To give that a little, you know, heading into the third quarter, the slightly higher than $500 million pipeline, that resulted in about $400 million in funding. You know, I think that same ratio would probably apply, right? So a $550 million pipeline probably leads to a little over $400 million in actual fundings out of the gate. And, you know, I think that funding would...

We talked a little bit about, you know, the disruption in Connecticut, you know, that area as something potentially being something to consider for new growth.

You know, any updates there, team hires or geography-wise, areas you're interested in?

Yeah, so we haven't hired anybody in Connecticut or New Hampshire, for that matter. I mean, new people in New Hampshire in some of the markets where we're not. I'm thinking of principally like Manchester or Portsmouth in New Hampshire. But we're having active dialogue with, you know, a number of people in both of those markets. I was commenting just yesterday to our board about an event I was at a couple weeks ago in Providence, It was a client event, and we don't have any branches in Providence. It was started as a, you know, kind of a LPO probably 10 or 15 years ago. And the quality of the clientele that we have in that market is really – it's really incredible. And so I know we can do it because we've done it before, and it's just a matter of finding the right people and feeling like there's opportunity for us to win. So that's what we're exploring right now, whether it's both with people and just, you know, understanding what the landscape is like. Don't have anything to report today, but it is something that we're continuing to push at.

Great. And then this last one for me, you know, in light of the shape of the curve, higher rates, when do you start contemplating, you know, applying higher cap rates for commercial real estate deals? And, you know, along those lines, should we start contemplating higher reserves or higher permission is tied to that book on the back of higher cap rates. How quickly does that happen?

From an allowance standpoint, and then, you know, I think, as you know, Matt, there's often qualitative requirements. So I think if we start to see, call it like a Cree index, a Cree valuation index, start to move, that will already start to inform potentially higher reserves. And then as a management team, if we feel that the math is not necessarily indicative of the risk than we have to. So it's a fair point, something we're very cognizant of. I think also to your question, I mean, it's the types of conversations we're having just in terms of looking at opportunities and thinking about the existing pipeline. I mean, I think the good news is the pipeline is strong. We think there's certainly room for near-term growth. I think we'd be naive to suggest that if it stays higher for longer.

I appreciate you taking all my questions.

There are no further questions at this time. I will now turn the call back over to Jeff Tangle for closing remarks.

This morning, and we appreciate your interest in INDB, and have a great day.

Concludes today's call. Thank you for attending. You may now disconnect.