Independent Bank Corporation · NASDAQ:IBCP
Independent Bank — Q4 2013 Earnings Presentation
20 slides from Independent Bank's earnings presentation, Jan 30, 2014
Slide 1: Earnings Conference Call 4th Quarter 2013
INDEPENDENT BANK CORPORATION Earnings conference call 4th quarter – 2013 January 30, 2014
Slide 2: Cautionary note regarding forward-looking statements
Cautionary note regarding forward-looking statements This presentation contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, including statements of goals, intentions, and expectations as to future trends, plans, events, or results of Indepen
Slide 3: Agenda
Agenda 4th Quarter 2013 Earnings Conference Call Formal Remarks William B. (Brad) Kessel, President and Chief Executive Officer Robert N. Shuster, Executive Vice President and Chief Financial Officer Question and Answer session Closing Remarks Note: This presentation is available at www.IndependentB
Slide 4: Financial Summary
Financial Summary Pas) 30n) a2) 203) 202] Diluted EPS $0.21 Net income $4,809 NI available to common 4,809 Total assets 2,209,943 Total loans 1,374,570 Total deposits 1,884,806 Shareholders’ equity Doieosds Tangible BV per share $10.01 TCE to tangible assets 10.35% Note: Dollars in 000's, except per
Slide 5: Financial Highlights
Financial Highlights 4Q 2013 Results Eighth consecutive profitable quarter Net income of $4.8 million, or $0.21 per diluted share Commercial loans grew 6.2% (annualized rate) NPA’s declined to $36.2 million (1.64% of total assets) Loan net charge-offs of $1.3 million (70% decline from 4Q’12) Redempt
Slide 6: Core Banking Markets
Core Banking Markets Significant market presence and opportunity to gain market share in attractive Michigan markets Michigan’s unemployment rate declined to 8.4% in December 2013 (5.8% lower than recession peak in 2009) Michigan payroll jobs increased 64,000 in 2013 S&P/Case-Shiller MI Detroit Home
Slide 7: Statewide Low Cost Deposit Franchise
Statewide Low Cost Deposit Franchise Focused on Core Deposit Growth $1.88 billion in total deposits at 12/31/13 Substantially all core funding $1.44 billion of transaction accounts (76% of total deposits) Cost of deposits of 0.29% (4Q ’13 annualized) Total deposits increased $105.3 million, or 5.9%,
Slide 8: Diversified Loan Portfolio Focused on High Quality Growth
Diversified Loan Portfolio Focused on High Quality Growth $1.37 billion in total loans at 12/31/13 2013 lending results include: Commercial loan growth of $18.0 million, or 2.9% Consumer installment loan growth of $2.2 million, or 1.2% Residential mortgage loan originations of $419.5 million and tot
Slide 9: Commercial Lending 2013 Highlights
Commercial Lending 2013 Highlights Net growth of $18 million, or 2.9%, in 2013 (4.2% excluding loan sale) New balances of $133 million Charge-offs $7.4 million/ORE transfers $3.5 million/ problem loan sale $8.2 million Scheduled payments $36 million/unscheduled term debt pay-downs $13 million Term d
Slide 10: Net Interest Margin/Income
Net Interest Margin/Income Interest rate sensitivity profile of the loan and securities portfolios, in combination with a low cost core deposit base, positions us to benefit from a rising interest rate environment Net interest income has shrunk along with the balance sheet compared to 2012, but has
Slide 11: Non-interest Income
Non-interest Income YTD Non-interest Income Breakout Highlights Diverse sources of non-interest income which totaled $10.9 million in 4Q ‘13 and $44.8 million for all of 2013 2013 total non-interest income represents approximately 37% of total revenue (net interest income and non-interest income) Ne
Slide 12: Non-interest Expense
Non-interest Expense Non-interest Expense ($ in Millions) Highlights Internal group charged with improving our efficiency ratio to 65% over time through both reduction in non-interest expenses and increased revenues – an incentive compensation target is tied to the efficiency ratio goals Target for
Slide 13: Investment Securities Portfolio
Investment Securities Portfolio
Slide 14: Steady Credit Quality Improvement
Steady Credit Quality Improvement
Slide 15: Declining Credit Costs
is} Declining Credit Costs Provision for Loan Losses Loan Net Charge-Offs Allowance for Loan Losses $120 5.0% $90 35% $90 40% 37% 7 37% 438 3% se0 $30 #3 s100 3.0% cual 40% $70 s70 3.0% se0 25% 3.0% soo so 25% a am $30 2.0% $59 20% 2.0% ap 17% $40 vx 840 1s 10% $30 $30 $20 10x 3 10x. om $20 s20 so a
Slide 16: Classified Assets and New Default Trends
Classified Assets and New Default Trends
Slide 17: Troubled Debt Restructurings (TDRs)
Troubled Debt Restructurings (TDRs) Over 89% of TDRs are Current Working with client base to maximize sustainable performance The specific reserves allocated to TDRs totaled $14.9 million at December 31, 2013 A majority of our TDRs are performing under their modified terms but remain in TDR status f
Slide 18: Capital Priorities & Considerations
Capital Priorities & Considerations
Slide 19: Management 2014 Outlook
ig) Management 2014 Outlook") Category Outlook Modest growth Lending Goal of low single digit % overall loan growth, primarily supported by mid single digit % growth in commercial loans and low single digit % growth in consumer installment loans Modestly lower Goal is to hold net interest income ste
Slide 20: Question and Answer Session, Closing Remarks
Independent Bank Corporation 4th Quarter 2013 Earnings Conference Call \Question and Answer Session Closing Remarks Thank you for attending ! NASDAQ: IBCP Celebrating our 150th year in 2014 !