Independent Bank Corp. · NASDAQ:INDB
Independent Bank — KBW 2009 Regional Banking Conference
26 slides from Independent Bank's conference presentation, Mar 4, 2009
Slide 1: Investor Presentation KBW 2009 Regional Banking Conference
Investor Presentation KBW 2009 Regional Banking Conference March 4, 2009
Slide 2: Who We Are
Who We Are Main Sub: Rockland Trust Market: S.E. Massachusetts Loans: $3.3 B* Deposits: $3.2 B* $AUM: $1.1 B* Equity: $0.4 B* Market Cap: $0.3 B* NASDAQ: INDB * Proforma to include the acquisition of Benjamin Franklin Bancorp.
Slide 3: Key Messages
Key Messages Business lines performing well Generating robust loan and deposit volumes Gaining customers from industry fallout We're more than a traditional community bank Extending our strong local market presence Disciplined risk management culture
Slide 4: Company Footprint
Company Footprint* 71 Branches* 5 Mortgage Banking Centers 9 Commercial Banking Centers 4 Investment Management Centers Business generation extends beyond S.E. Mass. footprint Source: SNL Financial; Deposit/Market Share data as of June 30, 2008 including pending transactions. (Includes Credit Unions
Slide 5: Growth Market Infrastructure
Growth Market Infrastructure Rail Lines Existing Opened November 2007 Proposed Highway Rt. 44 Expansion Potential Gaming Site Potential Film Studios
Slide 6: Strong Organic Growth in Priority Portfolios
2007 2008 A 363 B 428 C 2007 2008 A 318 B 401 C Strong Organic Growth in Priority Portfolios (Millions) 12/08 vs. 12/07 (ex acquis) 12/08 vs 9/08 7% 7% Comm'l Loan Originations Consumer Loan Originations (Resi's & Home Eq.) +26% +18% Comm'l Loan $ Bal. Home Equity $ Bal. 19% 15% annualized annualize
Slide 7: Repositioning the Balance Sheet
Repositioning the Balance Sheet Home Eq/Oth. Consumer Loans Consumer-Resi's & Auto Loans Securities & ST Investments Commercial Loans 0.11 0.25 0.27 0.37 Home Eq./Oth. Consumer Loans Consumer - Resi's & Auto Loans Securities & ST Investments Commercial Loans 0.13 0.17 0.2 0.5 2005 $2.8 B 2008 $3.3 B
Slide 8: Improved Funding Mix - Lower Cost Deposits
Improved Funding Mix - Lower Cost Deposits Savings/ Now C/D's Money Market Demand Deposits 0.28 0.33 0.19 0.2 TOTAL DEPOSITS Q4 2008 $2.6 B AVERAGE COST - TOTAL DEP: 1.52% Very Focused On Containing Deposit Costs Deposits ? 7% in '08 (ex acquis.) Core Deposits: 67% No broker CD's
Slide 9: Reducing Below-Hurdle Assets
Reducing Below - Hurdle Assets Indirect Consumer Loans $ Millions 2005 2006 2007 Q1 '08 Q2 '08 Q3 '08 2008 294 210 179 147 141 135 147 Shedding Non-Relationship Assets Accounted for 30% of total 2008 net chargeoffs
Slide 10: Avoided Industry Pitfalls
Avoided Industry Pitfalls No outsized credit charges No subprime exposure No Fannie or Freddie exposure No loss ($P&L) quarters No dilutive common equity raising No dividend cuts Modest securities impairment
Slide 11: Disciplined Credit Culture
Disciplined Credit Culture Longstanding underwriting conservatism Loan portfolio based within footprint In-depth knowledge of local markets No wholesale originations of any loan type Q4 '08 residential mortgage chargeoffs ($362K) - 1st since 2001 Workout team in place for 16 years
Slide 12: Asset Quality - No Drama
2006 2007 2008 YTD 2.2 3.1 6.2 Asset Quality - No Drama Net Charge Offs ($ Millions) NPA's ($ Millions) Q4 '06 Q4 '07 Q1 '08 Q2 '08 Q3 '08 Dec '08 7.2 8.3 11.9 12.1 29.8 17.9 0.25% 0.30% 0.36% 0.82% Loss Rate NPA % 11bp 16bp 24bp Rising with weakening economy Losses well-contained
Slide 13: Strong Loan Loss Reserves
Strong Loan Loss Reserves Reserves a Healthy Multiple of Loss Rate Reserves/Loans Net Chargeoffs/Avg. Loans
Slide 14: Trust Preferred Detail
Trust Preferred Detail 12/31/08 Remaining TRUPS exposure modest Aggressive approach to recognizing impairment in '08 A-rated securities marked to: 24 cents BBB-rated securities marked to: 13 cents Pooled TRUPS Single Issuer TRUPS Total Amortized Cost $18.7 14.8 $33.5 OTTI $7.2 - $7.2 Amortized Cost
Slide 15: Operating Earnings Trends
Operating Earnings Trends 2007 2008 2008 East 2.13 West 1.61 North 1.9 2007 2008 2008 East 30.1 West 25.3 North 30 ex sec. impairment ex sec. impairment Earnings ($Mil) Diluted E.P.S. Solidly Profitable Despite Economic Turmoil
Slide 16: Net Interest Margin Holding Up Despite Difficult Conditions
Net Interest Margin Holding Up Despite Difficult Conditions
Slide 17: Wealth Management - Strategic Priority
2005 2006 2007 Q1 '08 Q2 '08 Q3 '08 Q3 '08 YTD 2008 5.3 6.1 8.1 2.7 3.1 2.8 8.6 11.1 Q4 '05 Q4 '06 Q4 '07 Q4 '08 Q1 '08 Q2 '08 Q3 '08 680 816 1289 1124 1297 1251 1262 Fee Based Revenues - Steady and Growing Source 109% Assets Under Management ($ Millions) Wealth Management Revenue ($ Millions) Wealt
Slide 18: Acquisition of Benjamin Franklin Bancorp
Acquisition of Benjamin Franklin Bancorp. (BFBC) Strategic Rationale Contiguous expansion into highly attractive markets Greater access to Boston's western suburbs Excellent demographics and higher density Acquiring a healthy, well-run, growing community bank Building franchise value - solid loan an
Slide 19: INDB/BFBC Footprint
INDB/BFBC Footprint INDB: 60 Branches BFBC: 11 Branches BFBC 12/31/08 ($MM) Deposits: $653 Loans: $689 Equity: $110
Slide 20: Attractive Demographics
Attractive Demographics Source: SNL Financial MA INDB BFBC A 68.176 B 70.9 C 85.7 C Median HH Income ($ Thou.) 2008 Total Population (Thou.) 2008 INDB/BFBC Proforma MA A 3430 B 6518 C
Slide 21: Building Franchise Value
Building Franchise Value Disciplined Acquisitions $336mm Deposits $135mm Loans 16 Branches Deal Value: $40mm 12% Dep. Premium Fleet Divest. Aug '00 $158mm Assets $137mm Deposits 4 Branches Deal Value: $37mm 11% Dep. Premium Falmouth Bancorp Jul '04 IRS Sec. 1031 Like-Kind Exchange Services Deal Valu
Slide 22: Strong Capital
Strong Capital Total Risk-Based % Tier 1 Leverage % Treasury CPP Proceeds Received $78 MM in Jan '09 Augments already strong capital position Prior to CPP, INDB very active in meeting local credit needs Expands lending capacity Will not fully leverage into securities - dedicated to lending opportuni
Slide 23: Attentive to Shareholder Returns
Attentive to Shareholder Returns 2003 2004 2005 2006 2007 2008 East 0.52 West 0.56 North 0.6 0.64 0.68 0.72 *declared Cash Dividends* Per Share
Slide 24: Our GamePlan in Very Challenging Environment
Our GamePlan in Very Challenging Environment Expand business with new and existing customers Fulfill local credit needs while maintaining discipline Cultivate strong deposit base with rational pricing Continue to capitalize on competitive dislocations Integrate Ben Franklin quickly and smoothly Exer
Slide 25: INDB - Investment Merits
INDB - Investment Merits Building franchise value in attractive markets Strong on-the-ground business volumes Operating platform that can be leveraged further Balance sheet equipped to deal with severe environment Grounded management team - does not "reach for earnings" Aligned with shareholders - i
Slide 26: Forward-looking statements and contact
Statements contained in this presentation that are not historical facts are "forward- looking statements" that are subject to risks and uncertainties which could cause actual results to differ materially from those currently anticipated due to a number of factors, which include, but are not limited
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