Independent Bank Corporation · NASDAQ:IBCP
Independent Bank — Q3 2015 Earnings Presentation
20 slides from Independent Bank's earnings presentation, Oct 29, 2015
Slide 1: Earnings Conference Call 3rd Quarter 2015
(DEPENDENT BANK CORPORATION EARNINGS CONFERENCE CALL 3RD QUARTER - 2015 October 29, 2015 A INDEPENDENT NK Bal
Slide 2: Cautionary note regarding forward-looking statements
Cautionary note regarding forward-looking statements This presentation contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, including statements of goals, intentions, and expectations as to future trends, plans, events, or results of Indepen
Slide 3: Agenda
Agenda3rd Quarter 2015 Earnings Conference Call Formal Remarks.William B. (Brad) Kessel, President and Chief Executive OfficerRobert N. Shuster, Executive Vice President and Chief Financial OfficerQuestion and Answer session.Closing Remarks.Note: This presentation is available at www.IndependentBank
Slide 4: Financial Summary
Financial Summary 3Q’15 2Q’15 1Q’15 4Q’14 3Q’14 Diluted EPS $ 0.22 $ 0.24 $ 0.16 $ 0.17 $ 0.21 Income before taxes 7,325 8,243 5,561 5,438 7,274 Net income 5,047 5,619 3,781 3,902 4,929 Return on average assets 0.86% 0.98% 0.67% 0.69% 0.87% Return on average equity 7.84% 8.86% 6.05% 6.19% 7.95% Tota
Slide 5: 2015 3rd Quarter Financial Highlights
2015 3rd Quarter Financial Highlights Income Statement Net income of $5.0 million, or $0.22 per diluted share.Net recoveries on loans of $0.26 million led to a $0.24 million credit loan loss provision.Gains on mortgage loans increased $0.3 million, or 21.6%.Impairment charge on MSR’s of $0.9 million
Slide 6: Core Banking Markets
Core Banking Markets Since 2012, substantial changes have been implemented to streamline and optimize our branch delivery network.Significant market presence and opportunity to gain market share in attractive Michigan markets. Michigan’s unemployment rate was 5.0% in September 2015 (1.7% lower than
Slide 7: Statewide Low Cost Deposit Franchise
Statewide Low Cost Deposit FranchiseFocused on Core Deposit Growth $2.06 billion in total deposits at 9/30/15.Substantially all core funding.$1.64 billion of transaction accounts (79.5% of total deposits).Total deposits increased $136.7 million, or 7.1% since 12/31/14.Average deposits per branch of
Slide 8: Diversified Loan Portfolio
Diversified Loan PortfolioFocused on High Quality Growth Six consecutive quarters of net loan growth.$1.49 billion in total loans at 9/30/15 (including $25.5 million of loans held for sale).3Q 2015 lending results include:Commercial loan growth of $15.3 million, or 8.6% annualized. Line usage at 46.
Slide 9: Net Interest Margin/Income
Net Interest Margin/Income Interest rate sensitivity profile of the loan and securities portfolios, in combination with a low cost core deposit base, positions us to benefit from a rising interest rate environment.Net interest income increased in 3Q’15 vs. 2Q’15 due to a $29.4 million increase in av
Slide 10: Net Interest Income and Net Interest Margin
Net Interest Income and Net Interest MarginAnalysis of Linked Quarter Increase Summary3Q’15 net interest income of $18.841 million, up $140K from 2Q’15. The linked quarter increase was due to a $118K increase in interest income and fees on loans and a $44K increase in interest income on securities a
Slide 11: Non-interest Income
Non-interest Income 2015 Non-interest Income Breakout Highlights Diverse sources of non-interest income which totaled $10.1 million in 3Q’15.3Q’15 total non-interest income represents approximately 34.9% of total revenue (net interest income and non-interest income).New debit card brand agreement ex
Slide 12: Non-interest Expense
Non-interest Expense Non-interest Expense ($ in Millions) Highlights Q3’15 non-interest expenses totaled $21.9 million (a decrease from Q3’14 but an increase from Q2’15).Target for 2015 is total non-interest expenses at $21 million to $22 million per quarter (with an average at $21.3 million) – repr
Slide 13: Investment Securities Portfolio
Investment Securities Portfolio High quality, liquid, diverse portfolio with short duration.77% of the portfolio is AAA rated (or backed by the U.S. Government).2.0 year estimated average duration with a weighted average yield of 1.64% (without TE gross up).Approximately 34% of the portfolio is vari
Slide 14: Credit Quality Summary
Credit Quality Summary Non-performing Loans ($ in Millions) 30-89 Days Delinquent ($ in Millions) ORE / ORA ($ in Millions) Non-performing Assets ($ in Millions) Note: Non-performing loans and non-performing assets exclude troubled debt restructurings that are performing. 14
Slide 15: Credit Cost Summary
Credit Cost Summary 15 Provision for Loan Losses Loan Net Charge-Offs Allowance for Loan Losses Note: Dollars all in millions
Slide 16: Classified Assets and New Default Trends
Classified Assets and New Default Trends Total Classified Assets ($ in Millions) Commercial Loan New Defaults ($ in Millions) Total Loan New Defaults ($ in Millions) Retail Loan New Defaults ($ in Millions) 16
Slide 17: Troubled Debt Restructurings (TDRs)
Troubled Debt Restructurings (TDRs)92% of TDRs are Current Working with client base to maximize sustainable performance.The specific reserves allocated to TDRs totaled $10.5 million at 9/30/15.A majority of our TDRs are performing under their modified terms but remain in TDR status for the life of t
Slide 18: 2015 Actual vs. Management Original Outlook
2015 Actual vs. Management Original Outlook Category Outlook Lending Modest growthGoal of mid single digit % overall loan growth, primarily supported by mid single digit % growth in commercial loans and consumer loans with modest increases in mortgage loans and payment plan receivables. Expect much
Slide 19: Strategic Initiatives
Strategic Initiatives Balance SheetGenerate quality loan growth with continued focus on commercial and consumer installment lending as well as salable mortgage loans.Remain asset sensitive and positioned to benefit from higher interest rates (short duration investment portfolio, large variable rate
Slide 20: Question and Answer Session, Closing Remarks
Independent Bank Corporation3rd Quarter 2015 Earnings Conference Call Question and Answer SessionClosing RemarksThank you for attending !NASDAQ: IBCP 20