Independent Bank Corp. · NASDAQ:INDB
Independent Bank — Sandler O'Neill East Coast Financial Services Conference 2018
24 slides from Independent Bank's conference presentation, Nov 7, 2018
Slide 1: Sandler O'Neill East Coast Financial Services Conference
Sandler O'Neill East Coast Financial Services Conference November 6 -7, 2018 Christopher Oddleifson - President and CEO Robert Cozzone - Chief Financial Officer Mark Ruggiero - Controller and Chief Accounting Officer
Slide 2: Who We Are
Who We Are • Main Sub: Rockland Trust • Market: Eastern Massachusetts • Loans: $6.5B • Deposits: $7.0B • $AUA: $3.6B • Market Cap: $2.2B • NASDAQ: INDB (2)
Slide 3: Key Messages
Key Messages • Operating earnings and returns at record levels • Healthy loan and core deposit originations • Growing Investment Management business • Expanding footprint in growth markets • Proven integrator of acquired banks • Tangible book value steadily growing * • Steadily improving operating e
Slide 4: Expanding Company Footprint
Expanding Company Footprint % of Market Share INDB Dep. Plymouth County Rank 2018 1 23.3% 38% Norfolk County Rank 2018 4 5.1% 20% Barnstable County (Cape Cod) Rank 2018 4 11.3% 12% Bristol County Rank 2018 6 7.4% 11% Middlesex County Rank 2018 23 1% 9% Suffolk County Rank 2018 18 0.3% 3% Dukes Count
Slide 5: Recent Accomplishments
Recent Accomplishments • Five consecutive years of record operating earnings** • Reached agreement to acquire Blue Hills Bancorp • Imminent closing of MNB Bancorp in Worcester County • Capitalizing on expansion moves in vibrant Greater Boston market • Reached $3.6B in Assets Under Administration • G
Slide 6: Blue Hills Bancorp Acquisition
Blue Hills Bancorp Acquisition In Market Transaction Fortifying INDB Core Franchise • Expands presence in attractive, affluents markets within the Boston MSA and Nantucket • Combines two profitable and growing banks Strategically • Pro forma over $11 billion in assets with the largest deposit market
Slide 7: Blue Hills Overview - A High Quality Bank
Blue Hills Overview - A High Quality Bank • Founded in 1871 as Hyde Park Saving Bank As of September 30, • New management with extensive commercial BHBK ($ in millions) 2018 bank expertise hired in 2010 • Rebranded as Blue Hills Bank in 2011 with the Total Assets $2,783 launch of commercial banking
Slide 8: Strengthens INDB Position in Greater Boston Market, Adds Nantucket
Strengthens INDB Position in Greater Boston Market, Adds Nantucket (8) Note: Market share information as of June 30, 2018 and is pro forma for INDB's pending acquisition of MNB Bancorp; Source: S&PGlobal Market Intelligence, FDIC
Slide 9: Building Franchise Value: Disciplined Acquisitions
Building Franchise Value Disciplined Acquisitions Slade’s Ferry Benjamin Central Mayflower Peoples Federal Bancorp Franklin Bancorp Bancorp Bancorp Bancshares Mar '08 Apr '09 Nov '12 Nov '13 Feb '15 $630mm Assets $994mm Assets $537mm Assets $243mm Assets $640 mm Assets $411mm Deposits $701mm Deposit
Slide 10: Major Opportunities in Acquired Bank Markets
Major Opportunities in Acquired Bank Markets: Capitalizing on Rockland Trust Brand Commercial Banking Investment Management • Sophisticated products • $3.6 billion AUA • Expanded capacity • Wealth/Institutional • In-depth market • Strong referral network knowledge Acquired Bank Customer Bases Retail
Slide 11: Strong Fundamentals Driving Performance
Strong Fundamentals Driving Performance • Robust customer activity +16% CAGR • Core deposits at 90% • Fee revenues increasing • Rising net interest margin • Low funding costs • Low credit loss rates • Operating ROA: 1.7% (3Q'18)** +13% CAGR • Operating ROE: 14.0% (3Q'18)** • Improving operating effi
Slide 12: Asset Sensitivity and Low Cost Deposits Drive Higher Margin
Asset Sensitivity and Low Cost Deposits Drive Higher Margin (12)
Slide 13: Vibrant Commercial Lending Franchise
Vibrant Commercial Lending Franchise Total Loans $6.5B • Long-term CRE/C&I lender Avg. Yield: 4.60% 3Q 2018 • Increased small business focus • Strong name recognition in local markets • Opening LPO in Worcester • Added senior leaders from competitors • Growing in sophistication and capacity • Commer
Slide 14: Commercial Diversification
Commercial Diversification $3.5B as of 9/30/2018 $1.0B as of 9/30/2018 *Includes 1-4 Family, multifamily, Condos and Approved Land (14) **Non-Owner Occupied Commercial Real Estate divided by Total Capital
Slide 15: Low Cost Deposit Base
Low Cost Deposit Base Total Deposits $7.0B • Sizable demand deposit component 3Q 2018 • <1% of HH's are CD only • Valuable source of liquidity • Relationship-based approach • Expanded digital access • Growing commercial base (15)
Slide 16: Investment Management: Transformed Into High Growth Business
Investment Management: Transformed Into High Growth Business CAGR+11 % • Successful business model • Growing source of fee revenues • Strong feeder business from Bank • Expanding investment center locations • Adding experienced professionals • Capitalizing on cross-sell opportunity CAGR in acquired
Slide 17: Asset Quality: Well Managed
Asset Quality: Well Managed • Disciplined underwriter • Low loss rates • High average FICOs and low average LTVs in consumer book 6bps bps 2bps 1bps 1bps 0.8 0.3 (17)
Slide 18: Strong Capital Position
Strong Capital Position • Strong internal capital generation • No storehousing of excess capital • No external equity raising • Announced 19% dividend increase in 1Q18 • TBV rising even with multiple acquisitions (18) * See appendix A for reconciliation
Slide 19: Sustaining Business Momentum
Sustaining Business Momentum Business Line Focal Points • Expand Market Presence/Recruit Seasoned Lenders • Grow Client Base • Expand Specialty Products, e.g. ABL, Leasing • Lender Development Programs • Continue to Drive Household Growth • Expand Digital Offerings • Optimize Branch Network • Capita
Slide 20: Optimizing Retail Delivery Network
Optimizing Retail Delivery Network Recent optimization decisions include: • Utilize specialized analytics software/location model • Shift branch distribution • Close/consolidate 2 • Open 1 • Relocate 1 • Redesign 1 • Add 1: Downtown Boston (Dec 2018) • Add 3: Milford National Acquisition (Nov 2018)
Slide 21: INDB Investments Merits
INDB Investments Merits • High quality franchise in attractive markets • Consistent, strong financial performance • Strong organic business volumes • Growing brand recognition • Operating platform that can be leveraged further • Capitalizing on in-market consolidation opportunities • Diligent stewar
Slide 22: Appendix A
Appendix A The following table reconciles Book Value per share, which is a GAAP based measure to Tangible Book Value per share, which is a non-GAAP based measure. It also reconciles the ratio of Equity to Assets, which is a GAAP based measure, to Tangible Equity to Tangible Assets, a non-GAAP measur
Slide 23: Appendix B
Appendix B The following table reconciles net income and diluted EPS, which are GAAP measures, to operating earnings and diluted EPS on an operating basis, which are Non-GAAP Measures as of the time periods indicated: 2015 2016 2017 YTD18 (Dollars in thousands, except per share data) Net income avai
Slide 24: NASDAQ Ticker: INDB
NASDAQ Ticker: INDB www.rocklandtrust.com Robert Cozzone – CFO & EVP Consumer and Business Banking Shareholder Relations: (781) 982-6737 Statements contained in this presentation that are not historical facts are “forward-looking statements” that are subject to risks and uncertainties which could ca
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