Independent Bank Corp. · NASDAQ:INDB
Independent Bank — Keefe, Bruyette & Woods 2013 Boston Bank Conference
27 slides from Independent Bank's conference presentation, Feb 28, 2013
Slide 1: KBW 2013 Boston Bank Conference
Keefe, Bruyette & Woods 2013 Boston Bank Conference February 27, 2013 Christopher Oddleifson President & Chief Executive Officer Denis K. Sheahan Chief Financial Officer Exhibit 99.1
Slide 2: Who We Are
• Main Sub: Rockland Trust • Market: Eastern Massachusetts • Loans: $4.5 B • Deposits: $4.5 B • $AUA: $2.2 B • Market Cap: $0.7 B • NASDAQ: INDB Who We Are 2
Slide 3: Key Messages
• Strong fundamentals driving solid performance • Robust growth from new and existing customers • Expanding footprint into attractive markets • Rockland Trust brand gaining increased traction • Investing for growth in high priority businesses • Disciplined risk management culture • Strong capital po
Slide 4: Company Footprint
Company Footprint* 4 Rank 2012 1 17.5% 42% Rank 2012 7 3.9% 18% Rank 2012 4 9.8% 14% Rank 2012 9 5.4% 13% Rank 2012 23 1.0% 12% Rank 2012 44 0.3% 1% Worcester County Middlesex County Norfolk County % of INDB Dep.Share Barnstable County (Cape Cod) Market Plymouth County Bristol County Source: SNL Fin
Slide 5: 2012 Accomplishments
• Excellent organic loan and core deposit growth • Capitalized on commercial banking expansion • Very successful customer acquisition campaigns • Double digit growth in core fee income • Grew franchise value via Central Bank acquisition • TBV continued to rise – up 5% in ‘12 • New Market Tax Credits
Slide 6: 2012 Accomplishments: Customer Satisfaction
Rockland Trust is the #1 ranked New England bank in Customer Satisfaction! 6 2012 Accomplishments
Slide 7: Strong Fundamentals Driving Performance
Strong Fundamentals Driving Performance 7 28.0 40.3 45.5 47.1 2009 2010 2011 2012 Operating Earnings ($ Mil.) Diluted EPS $1.43 $1.90 $2.12 $2.16 +13% +44% +4% • Excellent loan growth • Core dep. at 83% • Growing wealth mgmt. • Solid asset quality vs. peers • Strong capital • Core ROA of 1% (4Q’12)
Slide 8: Robust Core Business Generation
Robust Core Business Generation ($ Mil.) 8 401 617 897 2008 2011 2012 Comm’l Loan Originations 428 587 668 2008 2011 2012 Consumer Loan Originations (Resi’s & Home Eq.) +22% CAGR +12% CAGR 12/12 vs. 12/11 12/12 vs. 9/12 #12% #13% annualized #14% Flat Comm’l Loan $ Bal. Home Equity $ Organic Growth
Slide 9: Strong Commercial and Industrial Loan Growth
Strong Commercial and Industrial Loan Growth ($ Bal.-mil.) 9 271 374 503 576 688 2008 2009 2010 2011 2012 +26.2% CAGR (24.3% ex acquisitions) Adding High Quality Corporate Customers Yr. end
Slide 10: Attractive Balance Sheet Profile
Attractive Balance Sheet Profile (4Q’12) Sec./ST Inv. 12% Resi Mtges 12% Home Eq 15% Other 1% Comm'l Loans 60% EARNING ASSETS $5.2 B Very Focused On Containing Deposit Costs Shift Towards Higher Yielding Assets Demand Deposits 27% Money Market 19% Savings/Now 37% CD's 17% TOTAL DEPOSITS $4.5 B AVG.
Slide 11: Net Interest Margin
Net Interest Margin Fairly steady over various rate cycles Current low rate environment adding pressure 11 0.00% 1.00% 2.00% 3.00% 4.00% 5.00% 6.00% 4Q05 4Q06 4Q07 4Q08 4Q09 4Q10 4Q11 4Q12 Fed Funds NIM (FTE) 5 yr SWAP
Slide 12: Investment Management – High Priority Growth Business
Investment Management – High Priority Growth Business 12 • Growing source of fee revenues • Strong feeder business from bank • Expanded investment offerings • Cross-sell opportunity in Central Bank’s markets $ mil. 2006 2012 Assets under Admin. 816$ + 165% 2,163$ Revenues 6.1$ + 143% 14.8$ (2012)
Slide 13: Asset Quality – Well Managed
Asset Quality – Well Managed 36.2 23.1 29.0 28.8 2009 2010 2011 2012 NPL’s ($ Mil.) 12.0 14.8 9.5 4.8 customer fraud 9.7 2009 2010 2011 2012 Net Chargeoffs ($ Mil.) NPL/Loan % 1.07% 0.65% 0.76% 0.64% Peers 2.86%* Loss Rate 38bp 43bp 26bp 36bp Peers 64bp* Yr. end * Source: FFIEC Peer Group 2; $3-10 B
Slide 14: Strong Loan Loss Reserves
Strong Loan Loss Reserves 14 0.00% 0.20% 0.40% 0.60% 0.80% 1.00% 1.20% 1.40% 1.60% Reserves/Loans Net Chargeoffs/Avg. Loans (annualized) Reserves a Healthy Multiple of Loss Rate Reflects loans acquired at FV Reflects customer fraud
Slide 15: Strong Capital
Strong Capital 15 7.9% 8.2% 8.6% 8.7% 2009 2010 2011 2012 Tier 1 Leverage % 6.7% 6.9% 7.2% 6.9% 2009 2010 2011 2012 Tangible Common %(1) (1)Includes tax deductibility of certain goodwill (2)Estimated at 12/31/12 • Strong internal capital generation • No external capital raising • No dividend cuts $1
Slide 16: Attentive to Shareholder Returns
Attentive to Shareholder Returns 16 $0.68 $0.72 $0.72 $0.72 $0.76 $0.84 2007 2008 2009 2010 2011 2012 Cash Dividends Per Share
Slide 17: Investing for Future Growth
Business Opportunities • Expanded Commercial Presence (Providence, Waltham) • Asset-Based Lending • Investment Management • Mobile Banking • Image ATMs Investing for Future Growth 17
Slide 18: Sustaining Business Momentum
Sustaining Business Momentum 18 Business Line Focal Points •Expand Market Presence •Grow C&I Client Base •Expand Specialty Products, e.g. ABL Commercial •Continue to Drive Household Growth •Expand Electronic Banking Platform •Optimize Branch Network Retail Delivery •Capitalize on Strong Market Demog
Slide 19: Central Bancorp. (CEBK) Acquisition Strategic Rationale
• Closed November, 2012 • Attractive financial return – Highly accretive to earnings: +7% in 2013 – IRR of 15.4% – Modest dilution to TBV and TCE/TA with short earn-back period • Significantly increases footprint in eastern Middlesex County, a natural market extension with attractive demographics –
Slide 20: INDB Winning Businesses – Major Opportunities
Investment Management Commercial Banking Retail/ Consumer • $2 Bil. AUA • Wealth/Institutional • Sophisticated Products • Expanded presence • Knowledgeable bankers Central Bancorp. Customer Base Capitalizing on Rockland Trust Brand • Top-rated customer satisfaction • Electronic banking • Home equity
Slide 21: Building Franchise Value: Disciplined Acquisitions
Building Franchise Value 21 All Acquisitions Immediately Accretive Deal Value: $40MM 12% Core Dep. Premium* Fleet Divest. Aug ‘00 $336mm Deposits $135mm Loans 16 Branches Deal Value: $37MM 11% Core Dep. Premium* Falmouth Bancorp Jul ‘04 $158mm Assets $137mm Deposits 4 Branches Deal Value: $105MM 17%
Slide 22: 2013 Outlook
2013 Outlook Key Expectations 22 Loan Growth +4 – 5% Led by commercial segment Deposits +3 – 4% Continued core deposit growth Net Chargeoffs $10 – 14 MM Provision $12 – 16 MM Net Int. Margin FY: Mid 3.50s% ≈ 3.6% beg. of yr. ≈ 3.5% towards yr. end Non-Interest Inc. +6 – 8% Growth from multiple sourc
Slide 23: INDB – Investment Merits
• High quality franchise in attractive markets • Strong on-the-ground business volumes • Operating platform that can be leveraged further • Investing for growth in competitive strengths • Balance sheet equipped to deal with uncertainty • Diligent stewards of shareholder capital • Grounded management
Slide 24: NASDAQ Ticker: INDB www.rocklandtrust.com Denis Sheahan - CFO Shareholder Relations: Jennifer Kingston (781) 878-6100
NASDAQ Ticker: INDB www.rocklandtrust.com Denis Sheahan - CFO Shareholder Relations: Jennifer Kingston (781) 878-6100 Statements contained in this presentation that are not historical facts are “forward-looking statements” that are subject to risks and uncertainties which could cause actual results
Slide 25: Appendix
INDEPENDENT Parent of Rockland Trust Appendix
Slide 26: Strong Loan Growth
Strong Loan Growth December 31. December 31, Central Bank Organic % 2012 2011 Acquisition Growth/Decline Change (Dollars in Thousands) Commercial and Industrial and Commercial Real Estate Loans $2,998,432 $2,552,274 $139,684 $306,474 12.0% Small Business 78,594 78,509 - 85 0.1% Residential Real 612,
Slide 27: Strong Core Deposit Growth
Strong Core Deposit Growth December 31. December 31, Central Bank Organic % 2012 2011 Acquisition Growth/Decline Change (Dollars in Thousands) Demand Deposits $1,248,394 $992,418 $75,438 $180,538 18.2% Savings and Interest Checking Accounts 1,691,187 1,473,812 65,110 152,265 10.3% Money Market 853,9
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