Independent Bank Corp. · NASDAQ:INDB
Independent Bank — Investor Presentation (May 2024)
24 slides from Independent Bank's investor presentation, May 28, 2024
Slide 1: Independent Bank Corp. Investor Presentation May 2024
Jeff Tengel - Chief Executive Officer Mark Ruggiero - Chief Financial Officer & EVP Consumer Lending Gerry Nadeau - President, Rockland Trust May 2024 Independent Bank Corp. (INDB) (parent of Rockland Trust Company)
Slide 2: Who We Are
Who We Are Independent Bank Corp. (Nasdaq: INDB) • Main Banking Subsidiary: Rockland Trust • Massachusetts based; New England focused $19.3 B Total assets $14.3 B Loans $15.0 B Deposits $6.8 B Wealth management $2.2 B Market Cap* Key Metrics as of March 31, 2024 2*as of May 24, 2024
Slide 3: Company Overview
3 Company Overview Safe & Sound Customer Centric • Strong balance sheet • Prudent interest rate and liquidity risk management • Significant capital buffer • Diversified, low-cost deposit base • Experienced commercial lender with conservative credit culture • Proven operator and acquiror • Full suite
Slide 4: Near-Term Priorities
Near-Term Priorities 4 • Sustaining progress under new CEO • Deepening of risk management infrastructure • Robust portfolio management activity in CRE office asset class • Stabilizing interest rate risk through volatile rate environment • Prioritizing liquidity and capital risk management ◦ Focus on
Slide 5: Expanding Company Footprint
Source: SNL Financial; Deposit/Market Share data as of June 30, 2023 Expanding Company Footprint Exceptional Deposit Franchise Market Share Rank 2023 % of INDB Deposits Plymouth County 1 25.4% 31% Norfolk County 5 6.6% 15% Suffolk County 8 0.7% 14% Barnstable County (Cape Cod) 3 11.8% 9% Bristol Cou
Slide 6: Financial Performance: Strong Fundamentals Drive Long-Term Trends
Operating Earnings ($Mil)** $187.6 $268.9 $239.5 $47.8 $5.38 $5.80 $5.42 $1.12 Operating Earnings Operating EPS 2021 2022 2023 Q1'24 $0 $100 $200 $300 $2 $4 $6 GAAP Earnings ($Mil) $121.0 $263.8 $239.5 $47.8 $3.47 $5.69 $5.42 $1.12 Net Income Diluted EPS 2021 2022 2023 Q1'24 $0 $100 $200 $300 $2 $4
Slide 7: Financial Performance - Most Recent Quarter (Q1 2024)
$ 47.8M Net Income $ 1.12 Diluted EPS 1.00% ROAA 6.63% ROAE 10.15% ROATCE 7 Financial Performance - Most Recent Quarter (Q1 2024) • Disciplined loan growth • Seasonal deposit growth with steady core household formation • Net interest margin of 3.23%, within expectations • Stable nonperforming asset
Slide 8: Loan Balances
8 Loan Balances ($ in millions) Period Ended $ Increase (Decrease) % Increase (Decrease)Loan Category March 31, 2024 December 31, 2023 Commercial and industrial $ 1,580 $ 1,580 $ — —% Commercial real estate* 8,109 8,041 68 0.8% Commercial construction 829 850 (21) (2.5)% Small business 262 252 10 4.
Slide 9: Loan Portfolios
9 Loan Portfolios (3/31/24) 95% CRE & Construction Portfolio $8.9 billion Owner occupied - 12.3% Multi-family - 21.1% Residential related - 12.4% Office - 11.7% Mixed-Use Office - 2.1% Industrial/ warehouse - 9.4% Lodging - 8.2% Retail - 17.0% Healthcare - 1.7% Other - 4.1% C&I Portfolio $1.6 billio
Slide 10: Focal Point: Non-Owner Occupied CRE Office
10 Focal Point: Non-Owner Occupied CRE Office, inclusive of construction (3/31/24) Top 20 Borrowers All Others Total Portfolio ($ in millions) Total Avg Loan ($ in millions) Total Avg Loan ($ in millions) Total Avg Loan Class A $319.0 $29.0 Class A $161.6 $6.5 Class A $480.6 $13.4 Class B/C 172.4 21
Slide 11: Focal Point: Multifamily CRE
11 Focal Point: Multifamily CRE 95% Multifamily Portfolio Period Ended ($ in millions) March 31, 2024 December 31, 2023 Total Balances $ 1,880 $ 1,880 Total Average Loan Size 2.5 2.4 Average Loan Size - Top 20 21.7 20.8 Average Loan Size - All Others 1.9 1.9 Asset Quality Criticized $ 18.9 1.0% $ 17
Slide 12: Asset Quality
12 Nonperforming Loans ($ in millions) $45.7 $39.2 $54.4 $56.9 0.32% 0.28% 0.38% 0.40% NPLs ($Mil) NPL/Loan% Q2 2023 Q3 2023 Q4 2023 Q1 2024 0.30% 0.40% $0 $30 $60 Net Charge-offs/(Recoveries) ($ in millions) $23.5 $5.6 $3.8 $0.3 0.67% 0.16% 0.11% 0.01% Net Charge-offs (recoveries) Annualized Loss R
Slide 13: Deposits
13 ($ in millions) Period Ended $ Increase (Decrease % Increase (Decrease)Deposit Product Type March 31, 2024 December 31, 2023 Noninterest-bearing demand deposits $ 4,470 $ 4,567 $ (97) (2.1)% Savings and interest checking 5,196 5,299 (103) (1.9)% Money market 2,944 2,818 126 4.5% Time certificates
Slide 14: Strong Capital Position
Book Value $63.75 $63.25 $67.53 $67.94 14.78% 14.96% 14.96% 14.93% 12.03% 10.99% 10.96% 10.95% Book Value Per Share Equity/Assets % Tier 1 Leverage 2021 2022 2023 Q1'24 $0 $10 $20 $30 $40 $50 $60 $70 0% 5% 10% 15% 20% 25% Tangible Book Value* $42.25 $41.12 $44.13 $44.34 10.31% 10.26% 10.31% 10.27% T
Slide 15: Securities Portfolio
15 Securities Portfolio Available for Sale (AFS) Held to Maturity (HTM) Portfolio Composition at March 31, 2024 Book Value Fair Value Unrealized Gain/(Loss) Book Value Fair Value Unrealized Gain/(Loss) ($ in millions) U.S. government agency securities $ 230 $ 206 $ (24) $ 29 $ 28 $ (1) U.S. treasury
Slide 16: Net Interest Margin Analysis
16 Net Interest Margin Analysis Net Interest Margin 3.54% 3.47% 3.38% 3.23% Q2 2023 Q3 2023 Q4 2023 Q1 2024 3.00% 3.20% 3.40% 3.60% Total Loan Portfolio Rate Characteristics 43% 28% 29% Fixed Rate Floating Rate Variable Rate ($ in m ill io ns ) Time Deposit Maturities (and weighted average rate) $91
Slide 17: Investment Management
Investment Management Long-Term Trends • Successful business model • Growing source of fee revenues • Strong feeder business from Bank • Adding experienced professionals • Capitalizing on cross-sell opportunity in acquired bank markets A U A ($ B il) R evenue ($ M il) AUA & Revenue $5.7 $5.8 $6.5 $6
Slide 18: Sustaining Business Momentum
Sustaining Business Momentum Business Line • Extend market presence and recruiting efforts • Expand and strengthen customer relationships • Focus on product and industry diversification • Optimize loan/deposit origination process • Continue to drive household growth • Expand digital offerings • Expe
Slide 19: INDB Investment Merits
INDB Investment Merits • High quality franchise in attractive eastern MA markets • Consistent, strong financial performance with long term value focus • Diligent stewards of shareholder capital • Prioritization of organic growth from relationship based customers • History of successful merger activi
Slide 20: Appendix A: Non-GAAP Reconciliation of Capital Metrics
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 Tangible
Slide 21: Appendix B: Non-GAAP Reconciliation of Earnings Metrics
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 for the time periods indicated. Also presented below are average equity
Slide 22: Appendix C: Non-GAAP Reconciliation of Core Net Interest Margin
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 March 31, 2024 December 31, 2023 September 30, 2023 June
Slide 23: Forward-Looking Statements
This presentation contains certain “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995 with respect to the financial condition, results of operations and business of the Company. These statements may be identified by such forward-looking terminolog
Slide 24: Non-GAAP Financial Information
This presentation contains financial information determined by methods other than in accordance with accounting principles generally accepted in the United States of America (“GAAP”). This information may include operating net income and operating earnings per share ("EPS"), operating return on aver