Independent Bank Corp. · NASDAQ:INDB
Independent Bank — 2023 KBW Winter Financial Services Conference
22 slides from Independent Bank's conference presentation, Feb 16, 2023
Slide 1: 2023 KBW Winter Financial Services Conference
2023 KBW Winter Financial Services Conference February 16, 2023 Rob Cozzone - EVP and Chief Operating Officer Mark Ruggiero - Chief Financial Officer and Chief Accounting Officer
Slide 2: Who We Are
(2) Who We Are • Independent Bank Corp. (Nasdaq: INDB) ◦ Main Banking Sub: Rockland Trust ◦ Massachusetts based; New England focused (As of December 31, 2022) (Dollars in billions) Total assets $19.3 Loans $13.9 Deposits $15.9 Wealth management $5.8 Market Cap (as of February 10, 2023) $3.7
Slide 3: Key Messages - Core Franchise
(3) Key Messages - Core Franchise • Extensive history of strong financial performance • Expanding footprint in growth markets • Healthy loan and core deposit originations • Diversified fee income business lines • Strong interest rate and liquidity risk profile • Demonstrated resiliency in prior cris
Slide 4: Recent Accomplishments
(4) Recent Accomplishments • Full year '22 operating EPS up 8% in challenging environment • Strong margin expansion in 2022 • Seamless integration of Acquisition of Meridian Bancorp, Inc. and East Boston Savings Bank (EBSB) (assets $6.4B) Nov '21 • Robust new business generation • Business and Consu
Slide 5: Acquisition Strategy: Driving Long Term Growth & Shareholder Value
(5) Acquisition Strategy: Driving Long Term Growth & Shareholder Value Proven Record of Value Add Transactions
Slide 6: Expanding Company Footprint
(6) Source: SNL Financial; Deposit/Market Share data as of June 30, 2022 Expanding Company Footprint INDB Market Share* % of INDB Dep. Plymouth County Rank 2022 1 26.2% 29% Norfolk County Rank 2022 3 6.3% 14% Barnstable County (Cape Cod) Rank 2022 3 12.2% 8% Bristol County Rank 2022 5 8.9% 9% Middle
Slide 7: Sustaining Business Momentum
(7) Sustaining Business Momentum Business Line • Extend Market Presence/Recruit Seasoned Lenders • Grow Client Base / Expanded Lending Capacity • Expand Specialty Products, e.g. ABL, Floorplan • Optimize Loan Origination Process • Continue to Drive Household Growth • Expand Digital Offerings • Exped
Slide 8: Financial Performance - Strong Fundamentals
(8) $184.6 $121.7 $187.6 $268.9 $5.62 $3.66 $5.38 $5.80 Operating Earnings Operating EPS 2019 2020 2021 2022 $0.0 $50.0 $100.0 $150.0 $200.0 $250.0 $0 $2 $4 $6 $8 $165.2 $121.2 $121.0 $263.8 $5.03 $3.64 $3.47 $5.69 Net Income Diluted EPS 2019 2020 2021 2022 $0.0 $50.0 $100.0 $150.0 $200.0 $250.0 $1
Slide 9: Loan Commitment Originations
(9) Loan Commitment Originations * (Dollars in Millions) $2,676 $2,958 $3,494 $3,412 Commercial Residential Mortgage Home Equity Business Banking 2019 2020 2021 2022 Strong Business Volumes Despite Pandemic *Origination amounts presented above do not include loans associated with the Paycheck Protec
Slide 10: Loan Portfolio/Asset Sensitivity
(10) Loan Portfolio/Asset Sensitivity Balance sheet position to benefit from rising rate environment Total Loan Portfolio Commercial and industrial 11.7% Commercial real estate 55.6% Commercial construction 8.3% Small business 1.6% Residential real estate 14.6% Home equity - first position 4.1% Home
Slide 11: Total Commercial Real Estate Portfolio
(11) Total Commercial Real Estate Portfolio Residential - Related 31.4% Commercial Buildings 16.8%Office Buildings 14.3% Industrial Warehouse 10.2% Hotels/Motels 8.1% Strip Malls 7.8% All Other 11.4% Loan Portfolio - Commercial Diversification $8.9B as of 12/31/22 Total C&I Loan Portfolio**** Retail
Slide 12: Low Cost Deposit Base
(12) Low Cost Deposit Base Demand Deposits 34.3% Money Market 21.1% Savings/Now 37.1% CDs 7.5% Total Deposits $15.9B as of 12/31/22 Core Deposits ($ Bil.) $7.6 $9.8 $14.3 $14.0 79.9% 89.6% 84.5% 87.9% Core Deposits Core to Total 2019 2020 2021 2022 $0.0 $2.0 $4.0 $6.0 $8.0 $10.0 $12.0 $14.0 $16.0 0.
Slide 13: Investment Management: Transformed Into High Growth Business
(13) Investment Management: Transformed Into High Growth Business Longer Term Trends • Successful business model • Growing source of fee revenues • Strong feeder business from Bank AUAs ($ Bil.) $4.6 $4.9 $5.7 $5.8 2019 2020 2021 2022 • Expanding investment center locations • Adding experienced prof
Slide 14: Asset Quality
(14) Nonperforming Loans ($ in millions) $56.6 $55.9 $56.0 $54.9 0.42% 0.41% 0.41% 0.39% NPLs ($Mil) NPL/Loan% Q1 2022 Q2 2022 Q3 2022 Q4 2022 0.35% 0.40% 0.45% $0 $30 $60 Provision for Credit Loss Trends ($ in millions) $0.4 $0.2 $0.0 $0.4 $(2.0) $0.0 $3.0 $5.5 Net Charge-offs (recoveries) Provisio
Slide 15: Asset Quality: A Look Back
(15) Asset Quality: A Look Back • Strong credit results through prior financial crisis • Experienced management and loan workout team • Consistent and conservative credit philosophy
Slide 16: Strong Capital Position
(16) Book Value $49.69 $51.65 $63.75 $63.25 14.99% 12.89% 14.78% 14.96% 11.28% 9.56% 12.03% 10.99% Book Value Per Share Equity/Assets % Tier 1 Leverage 2019 2020 2021 2022 $0 $10 $20 $30 $40 $50 $60 0% 5% 10% 15% 20% 25% Strong Capital Position Tangible Book Value* $34.11 $35.59 $42.25 $41.12 10.80%
Slide 17: Near-Term Priorities
(17) Near-Term Priorities • Sustaining progress under new CEO • Liquidity/Capital Management • Balance sheet management - rising rate environment • Taking disciplined approach to economic uncertainty • Capitalizing on EBSB revenue opportunities • Extending our presence in attractive Worcester market
Slide 18: INDB Investment Merits
(18) INDB Investment Merits • High quality franchise in attractive markets • Consistent, strong financial performance • Strong organic business volumes • Growing brand recognition • Leverageable operating platform • Capitalizing on in-market consolidation opportunities • Diligent stewards of shareho
Slide 19: Appendix A: Non-GAAP Reconciliation of Capital Metrics
(19) 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 Tan
Slide 20: Appendix B: Non-GAAP Reconciliation of Earnings Metrics
(20) 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: 2022 2021 2020 2019 (Dollars in
Slide 21: Appendix C: Non-GAAP Reconciliation of Core Net Interest Margin
(21) Appendix C: Non-GAAP Reconciliation of Core Net Interest Margin The following table reconciles net interest margin which is a GAAP measure, to core net interest margin, which is a Non-GAAP measure, for the periods indicated: Three Months Ended December 31, 2022 September 30, 2022 June 30, 2022
Slide 22: NASDAQ Ticker: INDB
(22) 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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