Independent Bank Corp. · NASDAQ:INDB
Independent Bank — FIG Partners Bank CEO Forum 2016
24 slides from Independent Bank's conference presentation, Sep 20, 2016
Slide 1: FIG Partners Bank CEO Forum
FIG Partners Bank CEO Forum September 20, 2016 Robert Cozzone – Chief Financial Officer and Treasurer
Slide 2: Who We Are
(2) Who We Are • Main Sub: Rockland Trust • Market: Eastern Massachusetts • Loans: $5.7 B • Deposits: $6.2 B • $AUA: $2.8 B • Market Cap: $1.4 B • NASDAQ: INDB
Slide 3: Key Messages
(3) Key Messages • Lengthy track record of consistent, solid performance • Robust core deposit and deal flow activity • Growing fee revenue sources, esp. Investment Mgmt. • Expanding footprint in growth markets • Tangible book value steadily growing * • Well-positioned for rising rate environment •
Slide 4: Expanding Company Footprint
(4) Expanding Company Footprint Rank 2015 1 24.6% 42% Rank 2015 6 5.0% 20% Rank 2015 3 10.4% 12% Rank 2015 7 7.6% 11% Rank 2015 20 1.1% 10% Rank 2015 17 0.3% 4% Rank 2015 32 0.3% 1% Bristol County Worcester County Suffolk County Middlesex County Norfolk County % of INDB Dep.Share Barnstable County (
Slide 5: Recent Accomplishments
(5) Recent Accomplishments • Three consecutive years of record earnings • Reached agreement to acquire New England Bancorp, Inc. of Cape Cod • Capitalizing on expansion moves in vibrant Greater Boston market • Growth initiatives – new equipment leasing product, new N. Quincy branch, expanded digital
Slide 6: Strong Fundamentals Driving Performance
(6) 55.2 59.9 71.7 33.7 39.6 2013 2014 2015 1H15 1H16 Operating Earnings ($ Mil.)** Strong Fundamentals Driving Performance +14% CAGR Diluted EPS $2.18 $2.49 $2.50 $1.05 $1.48 • Robust customer activity • Core deposits up to 90% • Fee revenues rising • Low funding costs • Solid asset quality vs. pee
Slide 7: Vibrant Commercial Lending Franchise
(7) Vibrant Commercial Lending Franchise TOTAL LOANS $5.7 B AVG. YIELD: 4.00% 2Q 2016 Comm'l 72% Resi Mtg 11% Home Eq 17% • Long-term CRE/ C&I lender • Strong name recognition in local markets • Experienced, knowledgeable lenders • Commercial banker development program • Growing in sophistication an
Slide 8: Low Cost Deposit Base
(8) Low Cost Deposit Base Demand Deposits 31% Money Market 19% Savings/Now 40% CDs 10% TOTAL DEPOSITS $6.2 B AVG. COST: 0.18% 2Q 2016 • Sizable demand deposit component • Valuable source of liquidity • Relationship-based approach • Excellent household growth • Expanded digital access • Growing comme
Slide 9: Investment Management: Transformed Into High Growth Business
(9) 6.1 20.7 10.7 2006 2015 1H16 Revenues ($ Mil.) 816 2,832 2006 2Q16 AUAs ($ Mil.) Investment Management : Transformed Into High Growth Business +247% +239% • Successful business model • Growing source of fee revenues • Strong feeder business from Bank • Expanding investment center locations • Cro
Slide 10: Well-Positioned for Rising Rates: Prudent Balance Sheet Management
(10) Well-Positioned for Rising Rates: Prudent Balance Sheet Management -10% -5% 0% 5% 10% 15% 20% 25% Year 0 Year 1 Year 2 % In cr e ase o n N e t In te re st In co m e Interest Rate Sensitivity Down 100 Up 200 Up 400 Flat Up 200
Slide 11: Asset Quality: Well Managed
(11) Asset Quality: Well Managed 34.7 27.5 27.7 25.6 2013 2014 2015 2Q16 NPLs ($ Mil.) 8.8 8.5 0.8 -0.8 2013 2014 2015 1H16 Net Chargeoffs ($ Mil.) NPL/Loan % 0.73% 0.55% 0.50% 0.45% Peers 0.73%* Loss Rate 19bp 18bp 1bp (3)bp Peers 9bp* * Source: FFIEC Peer Group 2; $3-10 Billion in Assets, March 31
Slide 12: Strong Capital Position
(12) Strong Capital Position (period end) 6.9% 7.4% 8.0% 8.2% 2013 2014 2015 2Q16 Tangible Equity/Tangible Assets%* $17.18 $19.18 $21.29 $22.52 2013 2014 2015 2Q16 Tangible Book Value* +31% * See appendix A for reconciliation $24.85 $26.69 $29.40 $30.55 2013 2014 2015 2Q16 Book Value Per Share +23%
Slide 13: Strong Capital Position continued
(13) Strong Capital Position continued (period end) 8.6% 8.8% 9.3% 9.7% 2013 2014 2015 2Q16 Tier 1 Leverage % • Strong internal capital generation • No storehousing of excess capital • No external equity raising • No dividend cuts
Slide 14: Attentive to Shareholder Returns
(14) Attentive to Shareholder Returns $0.88 $0.96 $1.04 $0.58 2013 2014 2015 1H16 Cash Dividends Declared Per Share
Slide 15: Sustaining Business Momentum
(15) Sustaining Business Momentum Business Line • Expand Market Presence/Recruit Seasoned Lenders • Grow Client Base • Expand Specialty Products, e.g. ABL, Leasing • Increased Lending Capacity Commercial • Continue to Drive Household Growth • Expand Digital Offerings • Optimize Branch Network Retail
Slide 16: Expanded Presence in Vibrant Greater Boston
(16) Expanded Presence in Vibrant Greater Boston Long-Term Commercial Lender in Greater Boston Central Bancorp $357MM Deposits 10 Branches – Nov. 2012 Investment Management and Commercial Lending Center October 2013 Peoples Federal Bancshares $432MM Deposits 8 Branches – Feb. 2015
Slide 17: New England Bancorp Acquisition
(17) New England Bancorp Acquisition Bank of Cape Cod • Excellent commercial banking and wealth management fit • Moves Rockland Trust to #3 share in desirable market • Financially attractive • $0.05 EPS accretion expected in 2017 • IRR approx. 20% • Neutral to TBV • Modest, low-risk deal • Asset siz
Slide 18: Building Franchise Value: Disciplined Acquisitions
(18) Building Franchise Value Disciplined Acquisitions Deal Value: $84.5MM 2% Core Dep. Premium* Benjamin Franklin Bancorp Apr ‘09 $994mm Assets $701mm Deposits 11 Branches Deal Value: $52.0MM 8% Core Dep. Premium* Central Bancorp Nov ‘12 $537mm Assets $357mm Deposits 10 Branches Deal Value: $40.3MM
Slide 19: Major Opportunities in Acquired Bank Markets
(19) Major Opportunities in Acquired Bank Markets: Capitalizing on Rockland Trust Brand Investment Management Commercial Banking Retail/ Consumer • $2.8 billion AUA • Wealth/Institutional • Strong referral network • Sophisticated products • Expanded presence • In depth market knowledge • Award winni
Slide 20: Optimizing Retail Delivery Network
(20) Optimizing Retail Delivery Network In the past twelve months we have: • Acquired specialized analytics software/location model • Shifted branch distribution • Closed/consolidated 4 • Relocated 1 • Opened 1 • Redesigned 2 • Contracted ATM site in downtown Boston • Implemented in-branch transacti
Slide 21: INDB Investment Merits
(21) INDB Investment Merits • High quality franchise in attractive markets • Strong organic business volumes • Growing brand recognition • Operating platform that can be leveraged further • Capitalizing on in-market consolidation opportunities • Diligent stewards of shareholder capital • Grounded ma
Slide 22: Appendix A
(22) Appendix A 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 Tangible Equity to Tangible Assets, a non-GAAP
Slide 23: Appendix B
(23) Appendix B 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: 2013 2014 2015 1H 15 1H 16 (Dollars in thousands, except per share data) Net
Slide 24: NASDAQ Ticker: INDB
(24) NASDAQ Ticker: INDB www.rocklandtrust.com Robert Cozzone – CFO & Treasurer 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 actual results