Independent Bank Corporation · NASDAQ:IBCP
Independent Bank — Shareholder Meeting (April 2012)
31 slides from Independent Bank's shareholder meeting presentation, Apr 24, 2012
Slide 1: Independent Bank Corporation 2012 Annual Meeting of Shareholders
Independent Bank Corporation 2012 Annual Meeting of Shareholders
Slide 2: Today's Agenda
Today’s Agenda § Introductions § Voting upon the matters listed in the Company’s 2012 Proxy Statement § Presentation by IBC President/COO and CFO § Question and answer session
Slide 3: IBC Board of Directors
IBC Board of Directors § Jeffrey A. Bratsburg § Donna J. Banks, Ph.D. § Stephen L. Gulis Jr. § Terry L. Haske § Robert L. Hetzler § Michael M. Magee Jr., Chairman § James E. McCarty, Lead Outside Director § Charles A. Palmer § Charles C. Van Loan
Slide 4: IBC Executive Management
IBC Executive Management § Michael M. Magee Jr. - Chairman and Chief Executive Officer § William B. Kessel - President and Chief Operating Officer § Robert N. Shuster - EVP/Chief Financial Officer § Mark L. Collins - EVP/General Counsel § Stefanie M. Kimball - EVP/Chief Lending Officer § David C. Re
Slide 5: 2012 Annual Meeting of Shareholders
2012 Annual Meeting of Shareholders § Secretary for the meeting (Robert Shuster) § Inspectors of election (Charles Schadler/Martha Blandford) § Record date: February 27, 2012 § Approximate mailing date of Proxy Statement: March 20, 2012 § Shares entitled to vote: 8,586,871 § Determination of quorum
Slide 6: Proposal #1: Election of Directors
Proposal #1 Election of Directors Robert L. Hetzler Michael M. Magee Jr., Chairman James E. McCarty, Lead Director
Slide 7: Proposal #2: Ratification of Auditors
Proposal #2 Ratification of Auditors § Crowe Horwath LLP has served as IBC’s independent registered public accounting firm since 2005 § Crowe Horwath was founded in 1942 and is one of the ten largest accounting and consulting firms in the U.S. § IBC is served primarily by Crowe Horwath’s Grand Rapid
Slide 8: Proposal #3: Advisory Vote on Executive Compensation
Proposal #3 Advisory Vote on Executive Compensation The Board has solicited a non-binding advisory vote from our shareholders to approve the compensation of our executives as described in our proxy materials.
Slide 9: IBC Overview
IBC Overview
Slide 10: Safe Harbor Statement
Safe Harbor Statement This presentation may contain certain forward-looking statements within the meaning of the Private Securities Reform Act of 1995. Forward-looking statements include expressions such as “expects,” “intends,” “believes” and “should” which are statements of belief as to expected o
Slide 11: 2011 Summary
2011 Summary § Improvement in asset quality § Continued growth in core deposits § Capital initiatives aimed at preserving net deferred tax asset § Positive impact on the Bank with improvement in Michigan economy and U.S. economy § Commitment to sustained profitability
Slide 12: Improving Economic and Banking Environment
Improving Economic and Banking Environment § Little inflation, low interest rates and slow growth § Improvement in Michigan unemployment rate and net job growth § Manufacturing showing improved sales and profits § Demand and supply of bank credit improving
Slide 13: Improvement in Asset Quality
Improvement in Asset Quality Accomplishments in 2011 § Non-performing assets reduced by 12% or $13 million for the year ended December 31, § Net charge-offs reduced from $60.6 million to $37 million or by 39% § “Watch” credits reduced from $178 million to $142 million or by 20% Strategy - continue w
Slide 14: Core Deposits
Core Deposits* *Excludes brokered certificates of deposit. Accomplishments in 2011 § Core deposits have grown from $1.978 billion to $2.044 billion. This equates to a $65.5 million increase or 3.3% increase. Strategy - continue targeting consumer and business customer checking/transaction accounts
Slide 15: Bank Regulatory Capital Ratios
Bank Regulatory Capital Ratios
Slide 16: Capital Restoration Plan Update
Capital Restoration Plan Update Accomplishments § The Bank continues to be considered “well-capitalized” for regulatory purposes In 2011: § Tier 1 capital to average assets improved to 6.77% from 6.58% (Bank level) § Tier 1 risk-based capital improved to 10.13% from 9.77% (Bank level) § Total risk-b
Slide 17: 2012 - Our Commitment to Sustained Profitability
2012 - Our Commitment to Sustained Profitability § For 2012, we do expect to be profitable § First quarter 2012 results § Reported net income of $3.5 million and net income applicable to common stock of $2.4 million or $0.07 per diluted share § Continued improvement in asset quality metrics Strategy
Slide 18: IBC Financial Overview
IBC Financial Overview
Slide 19: Net Income (Loss) Applicable to Common Stock
Net Income (Loss) Applicable to Common Stock * 2010 includes a one-time gain of $18.1 million on the extinguishment of debt. Excluding this item, the 2011 net loss applicable to common stock was reduced by 37% from 2010.
Slide 20: Net Income (Loss) Per Share Applicable to Common Stock
Net Income (Loss) Per Share Applicable to Common Stock
Slide 21: Select Components of Total Assets
Select Components of Total Assets Although total loans have been declining since 2007, during 2011, the Bank made new loans or renewed existing loans totaling $877 million. Includes $278 million of deposits at the Federal Reserve Bank earning 0.25%
Slide 22: Net Interest Margin
Net Interest Margin The decline in the net interest margin since 2009 was caused by a planned build-up of lower yielding short-term investments to augment liquidity and a reduction in total loans to preserve regulatory capital ratios.
Slide 23: Analysis of Net Interest Income
Analysis of Net Interest Income The decline in net interest income since 2009 was driven by a decrease in average interest earning assets and a drop in the net interest margin.
Slide 24: Non-performing Loans
Non-performing Loans* 52% decline since 2008 peak. * Excludes loans that are classified as “troubled debt restructured” that are still performing.
Slide 25: Provision for Loan Losses
Provision for Loan Losses 73% decline from 2009 peak.
Slide 26: Net Loan Charge-offs
Net Loan Charge-offs 53% decline from 2009 peak.
Slide 27: Allowance for Loan Losses
‘$90,000 ‘$80,000 ‘$70,000 8 g ‘$50,000 Dollars In 00's : ‘$30,000 $20,000 $10,000 $0 Allowance for Loan Losses 355% 3.75%. z a4 v 2009 2010 2011 KmAllowance for Loan Losses “PALL a5 2% of Loans, 4.00% 3.50% 3.00% 2.50% 2.00% 1.50% 1.00% 0.50% 0.00% af
Slide 28: First Quarter 2012 Summary
First Quarter 2012 Summary § Net income applicable to common stock of $2.4 million in the first quarter of 2012 compared to a net loss applicable to common stock of $8.4 million in the first quarter of 2011 § Significant improvement in operating results due to declines in the provision for loan loss
Slide 29: Question & Answer Period
William B. Kessel President and Chief Operating Officer Robert N. Shuster Executive Vice President and Chief Financial Officer Question & Answer Period
Slide 30: Voting Results
Voting Results § Shares entitled to vote: 8,586,871 § Proposal #1 - Election of Directors § Proposal #2 - Ratification of Auditors § Proposal #3 - Advisory (Non-binding) Vote on Executive Compensation
Slide 31: Thank you
Thank you for attending.