Independent Bank Corporation · NASDAQ:IBCP
Independent Bank — Q1 2014 Earnings Presentation
19 slides from Independent Bank's earnings presentation, Apr 21, 2014
Slide 1: Independent Bank Corporation Earnings Conference Call 1st Quarter 2014
)EPENDENT BANK CORPORATION EARNINGS CONFERENCE CALL 1ST QUARTER - 2014 April 21, 2014 A INDEPENDENT BANK
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 1st Quarter 2014 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.In
Slide 4: Financial Summary
Financial Summary perro 10/14 40’13 3013 20'13 10/13 Diluted EPS!) 0.13 0.21 0.17 2.64 $ 0.27 Net income 3,138 4,809 3,505 63,388 5,807 NI available to common 3,138 4,809 10,310 62,231 4,712 Total assets 2,259,639 2,209,943 2,183,504 2,134,674 2,105,347 Total portfolio loans 1,360,512 1,374,570 1,37
Slide 5: Income Statement
Income Statement Financial Highlights Ninth consecutive profitable quarter Net income of $3.1 million, or $0.13 per diluted share Results generally in-line with our expectations Non-interest expenses reduced by $3.1 million, or 12.1% . Optimistic for prospect of improved earnings during remainder of
Slide 6: Core Banking Markets
Core Banking Markets Significant market presence and opportunity to gain market share in attractive Michigan markets = Michigan’s unemploymentrate declined to 7.7% in February 2014 (1.1% lower than February 2013) = Michigan payroll jobs totaled 4.117 million at 2/28/14 (24K higher than one year earl
Slide 7: Statewide Low Cost Deposit Franchise
Statewide Low Cost Deposit Franchise Focused on Core Deposit Growth Deposit Composition - 1Q’14 Deposit Highlights ree dy, = $1.94 billion in total deposits at 3/31/14 — Substantially all core funding ee — $1.50 billion of transaction accounts (77% of total deposits) ‘ savings and “= oe — Cost of de
Slide 8: Diversified Loan Portfolio
Diversified Loan Portfolio Focused on High Quality Growth Loan Composition - Q1’14 Lending Highlights $1.36 billion in total loans at 3/31/14 # . 2014 lending results include: ‘Receivables — Commercialloan growth of $6.8 million, or 4.4% annualized — 1Q'14 residential mortgage loan originations of $
Slide 9: Commercial Lending
Commercial Lending 2014 Highlights = Net growth of $7 million in 1Q’14 and $30 million (4.9%) since 3/31/13 — New commitments of $41 million in 1Q'14 with $32 million in funded new loans — New business by region: East $21 million; West $12 million; and Central $8 million = Line utilization declined
Slide 10: Net Interest Margin/Income
Net Interest Margin/Income a») Net Interest Margin (TE) (%) 430%, 425% 420% 420%, 4.00% 3.90% 3.80% 3.70% 3.60% 3.50% ari2 "arts | azt3 ” ast3 atts ite Net Interest Income ($ in Millions) $250 teoo sige 519551955194 gig s150 s10.0 $5.0 $0.0 qei2 "ams" ats” sts aes aie Note: Alldollars in lions, High
Slide 11: Non-interest Income
Non-interest Income 1 YTD Non-interest Income Breakout Highlights = Diverse sources of non-interest income which totaled $9.0 million in 1Q’14 = 2014 total YTD non-interest income represents approximately 33% of total revenue (net interest income and non- interest income) = New debit card brand agre
Slide 12: Non-interest Expense
Non-interest Expense ” Highlights Non-interest Expense ($ in Millions) = Internal group charged with improving our efficiency ratio to 65% over time through both $350 38% reduction in non-interest expenses and increased revenues — an incentive 80% compensation target is tied to the efficiency s300 i
Slide 13: Investment Securities Portfolio
Investment Securities Portfolio * Investment Portfolio by Type (03/31/14) Highlights = High quality, liquid, diverse portfolio with short duration — 77% ofthe portfoliois AAA rated — 2.0 year estimated average duration with a weighted average yield of 1.53% — Approximately 51% ofthe portfoliois vari
Slide 14: Credit Quality Summary
14 Credit Quality Summary Non-performing Loans ($ in Millions) $120 ys110 60% s100 50x 27m 3.0% as $68 31% cd 500-2 * arm $00 we ax 30% 3 30 BE 1k 15% yg vax 20K 328 $2020 srg $21 $20 10%, so 00% ‘2009 2010. 2011 212 Q312 Q#12 QI13 G21 G13. QF13 QI14 Non-pertorming Loans (NPLs) NPLs /Tou! Loans 30-8
Slide 15: Credit Cost Summary
i Credit Cost Summary Provision for Loan Losses Loan Net Charge-Offs Allowance for Loan Losses s120 sox $00 35x $90 40% 2m am 43% Cae 3.6% ‘$100 ia sau 3.5% \ sox s70 s70 30K 20% $80 30% $00 $60 am bam aq so 23% $50 $50 20% 20% a 7% $40 $40 Le 10s $30 $30 s20 osx 10% ons s20 s20 $04} 00% so eens se
Slide 16: Classified Assets and New Default Trends
Classified Assets and New Default Trends Total Classified Assets ($in Millions) $250 7 73% — 30.0% ae wm crassined 500 ae $200 (Classified /TCE +ALL sex oe $150 : 2 50.0% 122 $15 si05 Sa 40.0% 92 s100 30.0% Nga) 2am one aes ; 20.0% 50 10.0% so 00% ‘2009 2010 2011 Q212.Q312 Q#12 QI'13 213 O313 Q413 O
Slide 17: Troubled Debt Restructurings (TDRs)
Troubled Debt Restructurings (TDRs) ” Over 87% of TDRs are Current TDRs ($ in Millions) TDR Highlights = Working with clientbase to maxi $180 esx performance = The specific reserves allocated to TDRs totaled $14.5 $155 g452 million at March 31, 2014 sas $146 90% = Amajority of our TDRs are performin
Slide 18: Management 2014 Outlook
Management 2014 Outlook ) ee Category ‘Outlook Modest growth tea Goal of low single digit % overall loan growth, primarily supported by mid single digit % growth in my commercial loans and low single digit % growth in consumer loans. 1Q’14 Update: Commercial loan growth on target, expect seasonal pi
Slide 19: Independent Bank Corporation
19 Independent Bank Corporation 1st Quarter 2014 Earnings Conference Call Question and Answer Session Closing Remarks Thank you for attending ! NASDAQ: IBCP Celebrating our 150" year in 2014 !