Independent Bank Corp. · NASDAQ:INDB
Independent Bank — Piper Jaffray New England Bank Symposium 2017
24 slides from Independent Bank's conference presentation, Sep 28, 2017
Slide 1: Piper Jaffray New England Bank Symposium
Piper Jaffray New England Bank Symposium September 28, 2017 Robert Cozzone – Chief Financial Officer and Treasurer Gerard Nadeau – President of Rockland Trust Company
Slide 2: Who We Are
(2) Who We Are • Main Sub: Rockland Trust • Market: Eastern Massachusetts • Loans: $6.3 B • Deposits: $6.7 B • $AUA: $3.2 B • Market Cap: $2.0 B • NASDAQ: INDB
Slide 3: Key Messages
(3) Key Messages • Lengthy track record of consistent, solid performance • Robust loan and core deposit activity • Growing fee revenue sources, esp. Investment Mgmt. • Expanding footprint in growth markets • Tangible book value steadily growing * • Steadily improving operating efficiency • Disciplin
Slide 4: Expanding Company Footprint
(4) Expanding Company Footprint Rank 2016 1 23.5% 39% Rank 2016 5 4.9% 18% Rank 2016 3 12.3% 14% Rank 2016 6 7.9% 12% Rank 2016 19 1.2% 10% Rank 2016 17 0.3% 4% Rank 2016 2 19.7% 2% Rank 2016 31 0.3% 1% Suffolk County Bristol County Worcester County Dukes County (MV) Middlesex County Norfolk County
Slide 5: Recent Accomplishments
(5) Recent Accomplishments • Four consecutive years of record earnings • Finalized acquisition of New England Bancorp, Inc. of Cape Cod and Island Bancorp, Inc. of Martha’s Vineyard • Capitalizing on expansion moves in vibrant Greater Boston market • Growth initiatives – new commercial products, new
Slide 6: Strong Fundamentals Driving Performance
(6) $59.9 $71.7 $80.4 $43.4 2014 2015 2016 1H17 Operating Earnings ($ Mil.)** Strong Fundamentals Driving Performance +16% CAGR Diluted EPS $2.49 $2.50 $2.90 $1.52 • Robust customer activity • Core deposits up to 91% • Fee revenues rising • Low funding costs • Low credit loss rates • TBV steadily gr
Slide 7: Vibrant Commercial Lending Franchise
(7) Vibrant Commercial Lending Franchise TOTAL LOANS $6.3 B AVG. YIELD: 4.08% 2Q 2017 Comm'l 71% Resi Mtg 12% Home Eq 17% • Long-term CRE/ C&I lender • Increased small business focus • Strong name recognition in local markets • Expanded market presence • Experienced, knowledgeable lenders • Growing
Slide 8: Commercial Diversification
(8) Commercial Diversification Total Commercial Real Estate Portfolio Balance $3.4B as of 6/30/17 Industrial/ Warehouse 8.8% Office Buildings 10.8% Commercial Buildings 17.8% Residential- Related* 31.2% All Other 18.3% Strip Malls 3.8% Hotels/Motels 9.3% Total C&I Loan Portfolio Balance $911M as of
Slide 9: Low Cost Deposit Base
(9) Low Cost Deposit Base Demand Deposits 32% Money Market 19% Savings/Now 40% CDs 9% TOTAL DEPOSITS $6.5B 2Q 2017 • Sizable demand deposit component • Valuable source of liquidity • Relationship-based approach • Expanded digital access • Growing commercial base $4.2B $4.6B $5.3B $5.8B $6.1B 84.9% 8
Slide 10: Investment Management: Transformed Into High Growth Business
(10) 6.1 13.5 21.8 11.6 2006 2011 2016 1H17 Revenues ($ Mil.) 816 1,651 2,919 3,196 2006 2011 2016 2Q17 AUAs ($ Mil.) Investment Management : Transformed Into High Growth Business +292% +257% • Successful business model • Growing source of fee revenues • Strong feeder business from Bank • Expanding
Slide 11: Well-Positioned for Rising Rates: Prudent Balance Sheet Management
(11) Well-Positioned for Rising Rates: Prudent Balance Sheet Management -15% -10% -5% 0% 5% 10% 15% 20% 25% 30% 35% Year 0 Year 1 Year 2 % In cr ease o n N et In te re st In co m e Interest Rate Sensitivity Down 100 Up 200 Up 400 Flat Up 200
Slide 12: Asset Quality: Well Managed
(12) $8.5 $0.8 $0.3 $3.7 2014 2015 2016 1H17 Net Chargeoffs ($ Mil.) customer fraud Asset Quality: Well Managed $27.5 $27.7 $57.4 $51.8 2014 2015 2016 2Q17 NPLs ($ Mil.) NPL/Loan % 0.55% 0.50% 0.96% 0.83% Peers 0.58%* * Source: FFIEC Peer Group 2; $3-10 Billion in Assets, June 30, 2017 Incl. 90 days
Slide 13: Strong Capital Position
(13) Strong Capital Position (period end) $19.18 $21.29 $23.45 $24.48 2014 2015 2016 2Q17 Tangible Book Value* +28% * See appendix A for reconciliation $26.69 $29.40 $32.02 $33.34 2014 2015 2016 2Q17 Book Value Per Share +25% • Strong internal capital generation • No storehousing of excess capital •
Slide 14: Attentive to Shareholder Returns
(14) Attentive to Shareholder Returns $0.96 $1.04 $1.16 $0.64 2014 2015 2016 1H17 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 • Lender Development Programs Commercial • Continue to Drive Household Growth • Expand Digital Offerings • Optimize Branch Network Retai
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: Island Bancorp Acquisition
(17) Island Bancorp Acquisition Edgartown National Bank • Profitable, well-managed community bank • Provides first retail presence on M.V. • Excellent complement to growing Cape Cod presence • Financially attractive • $0.03 - $0.04 EPS accretion expected in 2018 • Neutral to TBV • Modest, low-risk d
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 • $3.2 billion AUA • Wealth/Institutional • Strong referral network • Sophisticated products • Expanded capacity • In depth market knowledge • Award winni
Slide 20: Optimizing Retail Delivery Network
(20) Optimizing Retail Delivery Network In the past twelve months we have: • Utilized specialized analytics software/location model • Shifted branch distribution • Closed/consolidated 2 • Opened 1 • Relocated 1 • Redesigned 3 • Added 5 locations from acquisitions • Added 3 off-site ATMs • Introduced
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 m
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: 2014 2015 2016 1H 2017 (Dollars in thousands, except per share data) Net inco
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
Independent Bank — Piper Jaffray New England Bank Symposium 2017 on 6ix