Independent Bank Corp. · NASDAQ:INDB
Independent Bank — Non-Deal Roadshow (August 2018)
22 slides from Independent Bank's roadshow presentation, Aug 14, 2018
Slide 1: Piper Jaffray Road Show
Piper Jaffray Road Show New York, NY and Boston, MA August 14-15, 2018 Chris Oddleifson - Chief Executive Officer Robert Cozzone - Chief Financial Officer Gerard Nadeau - Chief Commercial Banking Officer
Slide 2: Who We Are
Who We Are • Main Sub: Rockland Trust • Market: Eastern Massachusetts • Loans: $6.5B • Deposits: $7.0B • $AUA: $3.6B • Market Cap: $2.4B • NASDAQ: INDB (2)
Slide 3: Key Messages
Key Messages • Lengthy track record of consistent, solid performance • Healthy loan and core deposit originations • Growing fee revenue sources, esp. Investment Mgmt. • Expanding footprint in growth markets • Tangible book value steadily growing * • Steadily improving operating efficiency • Discipli
Slide 4: Expanding Company Footprint
Expanding Company Footprint % of Market Share INDB Dep. Plymouth County Rank 2017 1 22.9% 39% Norfolk County Rank 2017 5 4.8% 19% Barnstable County (Cape Cod) Rank 2017 4 11.2% 13% Bristol County Rank 2017 6 7.8% 12% Middlesex County Rank 2017 19 1.1% 10% Suffolk County Rank 2017 18 0.3% 4% Dukes Co
Slide 5: Recent Accomplishments
Recent Accomplishments • Five consecutive years of record operating earnings** • Reached agreement to acquire MNB Bancorp • Capitalizing on expansion moves in vibrant Greater Boston market • Reached $3.6B in Assets Under Administration • Growth initiatives – new revitalized branches, expanded digita
Slide 6: Strong Fundamentals Driving Performance
Strong Fundamentals Driving Performance • Robust customer activity Net Income ($Mil) +16% CAGR $87.2 $4.00 $76.6 • Core deposits at 90% $80.0 $65.0 $3.19 $58.7 $3.00 $60.0 $2.90 • Fee revenues increasing $2.50 $2.00 $40.0 $2.13 • Rising net interest margin $20.0 $1.00 • Low funding costs $0.0 $0.00
Slide 7: Vibrant Commercial Lending Franchise
Vibrant Commercial Lending Franchise Total Loans $6.5B • Long-term CRE/C&I lender Avg. Yield: 4.51% 2Q 2018 • Increased small business focus • Strong name recognition in local markets Home Eq • Expanded market presence 17% • New loans generated: $1B+ in '17 Resi Mtg 12% • Added senior leaders from c
Slide 8: Commercial Diversification
Commercial Diversification Total Commercial Real Estate Portfolio Total C&I Loan Portfolio $3.5B as of 6/30/2018 $976M as of 6/30/2018 All Other (12 Sectors): 14.6% Health Care & Retail Trade: 18.5% All Other 16.5% Social Assistance: Residential - Related 3.6% 31.1% Strip Malls 5.5% Other services:
Slide 9: Low Cost Deposit Base
Low Cost Deposit Base Total Deposits $7.0B • Sizable demand deposit component 2Q 2018 • Valuable source of liquidity CDs 9% Demand • Relationship-based approach Deposits 32% • Expanded digital access Savings/Now 40% Money • Growing commercial base Market 19% Core Deposits Cost of Deposits ($ Bil.) 0
Slide 10: Investment Management: Transformed Into High Growth Business
Investment Management: Transformed Into High Growth Business AUAs ($ Mil.) CAGR +11% • Successful business model • Growing source of fee revenues $3,486 $3,571 $2,671 $2,919 • Strong feeder business from Bank 2015 2016 2017 2Q18 • Expanding investment center locations • Adding experienced profession
Slide 11: Asset Quality: Well Managed
Asset Quality: Well Managed NPLs Other Consumer 0.1% • Disciplined underwriter Home Equity 12.4% • Low loss rates Residential 16.2% • High average FICOs and low average LTVs in consumer book Small Business 0.8% C&I 63.9% CRE 6.6% NPLs Net Chargeoffs ($Mil.) ($Mil.) $70.0 $57.4 1.10% $7.0 6bps $60.0
Slide 12: Strong Capital Position
Strong Capital Position Cash Dividends Declared Per Share • Strong internal capital generation $1.50 $1.28 $1.16 $1.04 • No storehousing of excess capital $1.00 $0.76 • No external equity raising $0.50 • No dividend cuts $0.00 2015 2016 2017 1H18 • Announced 19% increase in 1Q18 Book Value Tangible
Slide 13: Well-Positioned for Rising Rates: Prudent Balance Sheet Management
Well-Positioned for Rising Rates: Prudent Balance Sheet Management Interest Rate Sensitivity 25 20 e 15 m o c n I t s 10 e r Down 100 e t n I t Up 200 e 5 N n o Up 400 e s a 0 e r c Flat Up 200 n I % -5 -10 -15 Year 0 Year 1 Year 2 (13)
Slide 14: Sustaining Business Momentum
Sustaining Business Momentum Business Line Focal Points • Expand Market Presence/Recruit Seasoned Lenders • Grow Client Base • Expand Specialty Products, e.g. ABL, Leasing • Lender Development Programs • Continue to Drive Household Growth • Expand Digital Offerings • Optimize Branch Network • Capita
Slide 15: Optimizing Retail Delivery Network
Optimizing Retail Delivery Network Recent optimization decisions include: • Utilize specialized analytics software/location model • Shift branch distribution • Close/consolidate 3 • Open 1 • Relocate 2 • Redesign 1 • Add 1: downtown Boston • Acquire 3: pending Milford National Bank acquisition • Add
Slide 16: Expanded Presence in Vibrant Greater Boston
Expanded Presence in Vibrant Greater Boston Central Bancorp $357MM Deposits 10 Branches – Nov. 2012 Investment Management Boston Financial District and Commercial Lending Branch Center planned 4Q 2018 October 2013 Newton Branch January 2018 Peoples Federal Bancshares $432MM Deposits 8 Branches – Feb
Slide 17: MNB Bancorp Acquisition
MNB Bancorp Acquisition Milford National Bank • Profitable, well-managed community bank (1849) • Strengthens presence in Worcester County • Attractive, low-cost deposit base • Highly complementary investment management • Modest, low-risk deal • Asset size: $365MM • Est. transaction value: $54MM (at
Slide 18: Building Franchise Value: Disciplined Acquisitions
Building Franchise Value Disciplined Acquisitions Slade’s Ferry Benjamin Central Mayflower Peoples Federal Bancorp Franklin Bancorp Bancorp Bancorp Bancshares Mar '08 Apr '09 Nov '12 Nov '13 Feb '15 $630mm Assets $994mm Assets $537mm Assets $243mm Assets $640 mm Assets $411mm Deposits $701mm Deposit
Slide 19: Major Opportunities in Acquired Bank Markets
Major Opportunities in Acquired Bank Markets: Capitalizing on Rockland Trust Brand Investment Commercial Banking Management • Sophisticated products • $3.6 billion AUA • Expanded capacity • Wealth/Institutional • In-depth market • Strong referral knowledge network Acquired Bank Customer Bases (19) R
Slide 20: INDB Investments Merits
INDB Investments Merits • High quality franchise in attractive markets • Consistent, strong financial performance • Strong organic business volumes • Growing brand recognition • Operating platform that can be leveraged further • Capitalizing on in-market consolidation opportunities • Diligent stewar
Slide 21: Appendix A
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 measur
Slide 22: Appendix B
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: 2015 2016 2017 1H 2018 (Dollars in thousands, except per share data) Net income av