Independent Bank Corporation · NASDAQ:IBCP
Independent Bank — Q4 2017 Earnings Presentation
25 slides from Independent Bank's earnings presentation, Jan 30, 2018
Slide 1: Filed by Independent Bank Corporation under Rule 425
Filed by Independent Bank Corporation Commission File Number: 0-7818 Pursuant to Rule 425 under the Securities Act of 1933 Form S-4 File No. 333-222358 Subject Company: TCSB Bancorp, Inc.
Slide 2: Important Information
2 Important Information No Offer or SolicitationThis presentation is not intended to and does not constitute an offer to sell or the solicitation of an offer to subscribe for or buy or an invitation to purchase or subscribe for any securities or the solicitation of any vote or approval in any jurisd
Slide 3: Cautionary Note Regarding Forward-Looking Statements
3 Cautionary Note Regarding Forward-Looking Statements This presentation may contain “forward-looking statements” within the meaning of the U.S. Private Securities Litigation Reform Act of 1995. Any statements that are not historical facts, including statements about our expectations, beliefs, plans
Slide 4: Agenda
4 Agenda 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.com in the Investor Relations area und
Slide 5: Quarterly Financial Summary
5 Quarterly Financial Summary 4Q’17 3Q’17 2Q’17 1Q’17 4Q’16 Diluted EPS (1) $ 0.08 $ 0.32 $ 0.27 $ 0.28 $ 0.27 Income before taxes $ 11,231 $ 10,018 $ 8,594 $ 8,595 $ 8,443 Net income (1) $ 1,711 $ 6,859 $ 5,931 $ 5,974 $ 5,855 Return on average assets (1) 0.25% 1.01% 0.92% 0.95% 0.91% Return on ave
Slide 6: 4Q 2017 Financial Highlights
6 4Q 2017 Financial Highlights Income StatementNet income of $1.7 million, or $0.08 per diluted share. Additional income tax expense of $5.96 million (or $0.28 per diluted share) due to net deferred tax assets (DTA) revaluation. Net interest income of $23.3 million, up $3.1 million, or 15.1%, from t
Slide 7: Annual Financial Summary
7 Annual Financial Summary YE 12/31/17 YE 12/31/16 YE 12/31/15 YE 12/31/14 Net interest income $ 89,186 $ 79,641 $ 74,986 $ 73,256 Income before taxes $ 38,438 $ 32,901 $ 29,380 $ 25,216 Net income (1) $ 20,475 $ 22,766 $ 20,017 $ 18,021 Diluted EPS (1) $ 0.95 $ 1.05 $ 0.86 $ 0.77 Return on average
Slide 8: Our Michigan Markets
8 Our Michigan Markets Independent Bank branches – 63 (68 with TCSB) TCSB branches - 5 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.Pending
Slide 9: Our Markets – Regional
Our Markets – Regional Region Cities Branches 12/31/17Portfolio Loans(1) % ofLoans(1) 12/31/17Deposits(3) % of Deposits(3) 12/31/16 Portfolio Loans(2) 12/31/16 Deposits(3) East / “Thumb” Bay City / Saginaw 23 $ 356 19% $ 763 35% $ 319 $ 728 West Grand Rapids / Ionia 22 677 36% 709 33% 564 686 Centra
Slide 10: Low Cost Deposit Franchise Focused on Core Deposit Growth
10 Low Cost Deposit Franchise Focused on Core Deposit Growth Deposit Highlights$2.40 billion in total deposits at 12/31/17.Substantially all core funding.$1.85 billion of transaction accounts (76.9% of total deposits).Total deposits increased $32.9 million, or 1.5%, since 12/31/16 (excluding $142.0
Slide 11: Diversified Loan Portfolio Focused on High Quality Growth
Diversified Loan PortfolioFocused on High Quality Growth Lending Highlights15 consecutive quarters of net loan growth.$2.058 billion in total loans at 12/31/17 (including $39.4 million of loans held for sale).4Q 2017 lending results include:Commercial loan net growth of $16.0 million, or 7.6% annual
Slide 12: Strong Capital Position Focused on Shareholder Return
12 Strong Capital PositionFocused on Shareholder Return HighlightsPrudent capital management. Target TCE ratio – 8.50% to 9.50%. Priorities are: (A) capital retention to support (1) organic growth and (2) acquisitions; and (B) return of capital through (1) strong and consistent dividend and (2) shar
Slide 13: Net Interest Margin/Income
13 Net Interest Margin/Income HighlightsInterest rate sensitivity profile of the loan and securities portfolios, in combination with a low cost core deposit base, positions us to slightly benefit from a rising interest rate environment.Net interest income increased 1.8% in 4Q’17 vs. 3Q’17 due primar
Slide 14: Net Interest Income and Net Interest Margin Details
14 Net Interest Income and Net Interest Margin Details Summary4Q’17 net interest income of $23.316 million, up $0.404 million from 3Q’17. The linked quarter increase was due to a $0.812 million increase in interest income and fees on loans. This was partially offset by a $0.157 million decrease in i
Slide 15: Non-interest Income Highlights
15 Non-interest Income HighlightsDiverse sources of non-interest income which totaled $11.4 million in 4Q’17.4Q’17 total non-interest income represents approximately 32.9% of total revenue (net interest income and non-interest income).Service charges on deposits have recently stabilized after previo
Slide 16: Non-interest Expense Highlights
16 Non-interest Expense HighlightsQ4’17 non-interest expenses totaled $23.1 million (an increase from 3Q’17 and a decrease from 4Q’16).Q4’17 compensation and benefits increased by $1.3 million over Q4’16 due primarily to higher incentive compensation and payroll taxes. 4Q’17 average FTEs up by 37.3
Slide 17: Investment Securities Portfolio
17 Investment Securities Portfolio HighlightsHigh quality, liquid, diverse portfolio with relatively short duration.Fair value of $525.7 million(1) at 12/31/17.Net unrealized loss of $0.6 million at 12/31/17.62% of the portfolio is AAA rated (or backed by the U.S. Government).2.82 year estimated ave
Slide 18: Credit Quality Summary
18 Credit Quality Summary Note 1: Non-performing loans and non-performing assets exclude troubled debt restructurings that are performing.Note 2: 3/31/17 and 12/31/16 30 to 89 days delinquent data excludes $1.53 million and $1.63 million, respectively, of payment plan receivables that were held for
Slide 19: Credit Cost Summary
19 Credit Cost Summary Note: Dollars all in millions. Provision for Loan Losses Loan Net Charge-Offs/Recoveries Allowance for Loan Losses
Slide 20: Classified Assets and New Default Trends
20 Classified Assets and New Default Trends Note: Dollars all in millions. Total Classified Assets Commercial Loan New Defaults Total Loan New Defaults Retail Loan New Defaults
Slide 21: Troubled Debt Restructurings (TDRs)
21 Troubled Debt Restructurings (TDRs) TDR HighlightsWorking with client base to maximize sustainable performance.The specific reserves allocated to TDRs totaled $6.8 million at 12/31/17.A majority of our TDRs are performing under their modified terms but remain in TDR status for the life of the loa
Slide 22: 2017 Actual Performance vs. Original Outlook – Final Summary
22 2017 Actual Performance vs. Original Outlook – Final Summary Category Outlook Lending Continued growthGoal of 10 to 11% overall loan growth in 2017, primarily supported by increases in commercial loans, mortgage loans and consumer loans. Expect much of this growth to occur in the last three quart
Slide 23: 2018 Initial Outlook
23 2018 Initial Outlook Category Outlook Lending Continued growthIBCP only goal of 15 to 18% overall loan growth in 2018, primarily supported by increases in commercial loans, mortgage loans and consumer loans. Expect much of this growth to occur in the last three quarters of 2018. This growth forec
Slide 24: Strategic Initiatives
24 Strategic Initiatives Balance SheetGenerate quality loan growth with continued focus on commercial and consumer installment lending as well as salable and portfolio mortgage loans.Remain slightly asset sensitive and positioned to benefit from higher interest rates (short duration investment portf
Slide 25: Q&A and Closing Remarks
25 Q&A and Closing Remarks Question and Answer SessionClosing RemarksThank you for attending !NASDAQ: IBCP