Independent Bank Corp. · NASDAQ:INDB
Independent Bank — Keefe, Bruyette and Woods Winter Financial Services Symposium 2021
25 slides from Independent Bank's conference presentation, Feb 11, 2021
Slide 1: KBW Winter Financial Services Symposium February 2021
Keefe, Bruyette and Woods, Inc. Winter Financial Services Symposium February 2021 Chris Oddleifson - Chief Executive Officer Gerard Nadeau - President and Chief Commercial Banking Officer Robert Cozzone - Executive Vice President and Chief Operating Officer Mark Ruggiero - Chief Financial Officer an
Slide 2: Who We Are
(2) Who We Are • Independent Bank Corp. (Nasdaq: INDB) ◦ Main Banking Sub: Rockland Trust •Market Cap: $2.6B (as of February 8, 2021) Loans: $9.4B Deposits: $11.0B Wealth Mgmt: AUA $4.9B Non-int. Income: 23.3% of revenue Market: Eastern Massachusetts 98 Branches
Slide 3: Key Messages - Core Franchise
(3) Key Messages - Core Franchise • Extensive history of strong financial performance • Demonstrated resiliency in prior crises • Expanding footprint in growth markets • Healthy loan and core deposit originations • Diversified fee income business lines • Strong capital levels • Strong operating effi
Slide 4: Recent Accomplishments
(4) Recent Accomplishments • Seven consecutive years of record operating earnings through 2019** • Strong new business generation despite pandemic • Solid growth in business and consumer households • Growing presence in Worcester County • Growth initiatives – online account opening, credit card laun
Slide 5: Sustaining Business Momentum
(5) Sustaining Business Momentum Business Line • Expand Market Presence/Recruit Seasoned Lenders • Grow Client Base • Expand Specialty Products, e.g. ABL, Floorplan • Optimize Loan Origination Process • Continue to Drive Household Growth • Expand Digital Offerings • Expedite New Account Openings • O
Slide 6: Expanding Company Footprint
(6) Source: SNL Financial; Deposit/Market Share data as of June 30, 2019 Expanding Company Footprint Market Share % of INDB Dep. Plymouth County Rank 2020 1 24.9% 36% Norfolk County Rank 2020 3 6.0% 19% Barnstable County (Cape Cod) Rank 2020 4 11.0% 9% Bristol County Rank 2020 5 8.3% 10% Middlesex C
Slide 7: COVID-19 Pandemic Action Steps
(7) COVID-19 Pandemic Action Steps • Revised initial CECL assumptions ◦ Leveraging Moody's economic forecasts ◦ Added qualitative analyses of various exposures • Granted relief to customers ◦ Delayed payments, waived fees, etc. • Enhanced credit monitoring of financial statements and cash flows • Pa
Slide 8: Total Commercial Real Estate Portfolio
(8) Total Commercial Real Estate Portfolio Residential - Related 30.6% Office Buildings 16.4% Commercial Buildings 15.9% Industrial Warehouse 9.9% Hotels/Motels 8.3% Strip Malls 5.6% All Other 13.3% Loan Portfolio - Commercial Diversification $4.7B as of 12/31/20 Total C&I Loan Portfolio Retail Trad
Slide 9: Credit Review - Potentially Impacted COVID-19 Industries
(9) Credit Review - Potentially Impacted COVID-19 Industries Accommodations Balance $ 400,351 Average borrower loan size $ 4,055 % secured by real estate 99.7 % Weighted average loan to value 54.4 % Other information: – The accommodation portfolio consists of 68 properties representing a combination
Slide 10: Credit Review - Potentially Impacted COVID-19 Industries - Cont'd
(10) Credit Review - Potentially Impacted COVID-19 Industries - Cont'd Other Services (except Public Administration) Balance $ 150,653 Average borrower loan size $ 257 % secured by real estate 51.0 % Weighted average loan to value 50.8 % Other information: – The other services portfolio consists of
Slide 11: Credit Review - Loan Deferrals
(11) Credit Review - Loan Deferrals December 31, 2020 Deferrals by Industry (Dollars in thousands) Highly Impacted Industries Accommodation $ 113,542 Food Services 4,298 Retail Trade 177 Arts, Entertainment, and Recreation 28,817 Total Highly Impacted Industries 146,834 Other Industries Real Estate
Slide 12: Asset Quality: Well Managed
(12) C&I 52.0% Home Equity 8.1% CRE 15.2% Residential 23.2% Small Business 1.2% Other Consumer 0.2% Asset Quality: Well Managed NPLs ($Mil.) $49.6 $45.4 $48.0 $66.9 0.78% 0.66% 0.54% 0.71% NPLs ($Mil) NPL/Loan% 2017 2018 2019 2020 $0.0 $20.0 $40.0 $60.0 $80.0 $100.0 $120.0 $140.0 00% 0.20% 0.40% 0.6
Slide 13: Asset Quality: A Look Back
(13) Asset Quality: A Look Back • Strong credit results through prior financial crisis • Experienced management and loan workout team • Consistent and conservative credit philosophy
Slide 14: Financial Performance - Strong Fundamentals
(14) $91.7 $129.8 $184.6 $121.7 $3.35 $4.69 $5.62 $3.66 Operating Earnings Operating EPS 2017 2018 2019 2020 $0.0 $50.0 $100.0 $150.0 $0 $2 $4 $6 $87.2 $121.6 $165.2 $121.2 $3.19 $4.40 $5.03 $3.64 Net Income Diluted EPS 2017 2018 2019 2020 $0.0 $25.0 $50.0 $75.0 $100.0 $125.0 $150.0 $1 $2 $3 $4 $5 $
Slide 15: Loan Originations
(15) Loan Originations (Dollars in Millions) $2,676 $2,958 Commercial Residential Mortgage Home Equity Business Banking 2019 2020 Strong Business Volumes Despite Pandemic
Slide 16: Low Cost Deposit Base
(16) Low Cost Deposit Base Demand Deposits 34% Money Market 20% Savings/Now 37% CDs 9% Total Deposits $11.0B 4Q 2020 Core Deposits ($ Bil.) $6.1 $6.6 $7.6 $9.8 90.1% 88.7% 79.9% 89.6% Core Deposits Core to Total 2017 2018 2019 2020 $0.0 $2.0 $4.0 $6.0 $8.0 $10.0 0.0% 20.0% 40.0% 60.0% 80.0% 100.0% C
Slide 17: Investment Management: Transformed Into High Growth Business
(17) Investment Management: Transformed Into High Growth Business Longer Term Trends • Successful business model • Growing source of fee revenues • Strong feeder business from Bank AUAs ($ Bil.) $3.5 $3.6 $4.6 $4.9 2017 2018 2019 2020 • Expanding investment center locations • Adding experienced prof
Slide 18: Strong Capital Position
(18) Book Value $34.38 $38.23 $49.69 $51.65 11.68% 12.13% 14.99% 12.89% 10.04% 10.69% 11.28% 9.56% Book Value Per Share Equity/Assets % Tier 1 Leverage 2017 2018 2019 2020 $0 $10 $20 $30 $40 $50 0% 5% 10% 15% 20% 25% Strong Capital Position Tangible Book Value* $25.60 $28.57 $34.11 $35.59 8.96% 9.35
Slide 19: Building Franchise Value
(19) Building Franchise Value Disciplined Acquisitions Deal Value: $84.5MM Benjamin Franklin Bancorp Apr '09 $994mm Assets $701mm Deposits 11 Branches Deal Value: $52.0MM Central Bancorp Nov '12 $537mm Assets $357mm Deposits 10 Branches Deal Value: $40.3MM Mayflower Bancorp Nov '13 $243mm Assets $21
Slide 20: Major Opportunities in Acquired Bank Markets
(20) Major Opportunities in Acquired Bank Markets: Capitalizing on Rockland Trust Brand Acquired Bank Customer Bases Investment Management • $4.9 billion AUA • Wealth/Institutional • Strong referral network Commercial Banking • Sophisticated products • Expanded capacity • In-depth market knowledge R
Slide 21: Near-Term Priorities
(21) Near-Term Priorities • Fulfilling demand for current round of PPP • Extending our presence in attractive Worcester market • Branch optimization including select openings and closings • Expansion of dealer floor-planning efforts • Maximizing use of Salesforce platform • Continued investment in d
Slide 22: INDB Investment Merits
(22) INDB Investment Merits • High quality franchise in attractive markets • Regained momentum following prior crises • Consistent, strong financial performance • Strong organic business volumes • Growing brand recognition • Leverageable operating platform • Capitalizing on in-market consolidation o
Slide 23: Appendix A: Non-GAAP Reconciliation of Capital Metrics
(23) Appendix A: Non-GAAP Reconciliation of Capital Metrics 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 Tang
Slide 24: Appendix B: Non-GAAP Reconciliation of Earnings Metrics
(24) Appendix B: Non-GAAP Reconciliation of Earnings Metrics 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: 2017 2018 2019 2020 (Dollars in
Slide 25: NASDAQ Ticker: INDB
(25) NASDAQ Ticker: INDB www.rocklandtrust.com Mark Ruggiero – CFO & Chief Accounting Officer 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 cause a
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