Independent Bank Corporation · NASDAQ:IBCP
Independent Bank — Q4 2014 Earnings Presentation
23 slides from Independent Bank's earnings presentation, Jan 23, 2015
Slide 1: Earnings Conference Call 4th Quarter 2014
INDEPENDENT BANK CORPORATIONEARNINGS CONFERENCE CALL4TH QUARTER - 2014 January 23, 2015
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
Agenda4th Quarter 2014 Earnings Conference Call Formal Remarks.William B. (Brad) Kessel, President and Chief Executive OfficerRobert N. Shuster, Executive Vice President and Chief Financial OfficerQuestion and Answer session.Closing Remarks.Note: This presentation is available at www.IndependentBank
Slide 4: Financial Summary
Financial Summary 4Q’14 3Q’14 2Q’14 1Q’14 4Q’13 Diluted EPS $ 0.17 $ 0.21 $ 0.26 $ 0.13 $ 0.21 Income before taxes 5,438 7,274 7,899 4,605 6,130 Net income 3,902 4,929 6,052 3,138 4,809 Total assets 2,248,730 2,239,857 2,249,864 2,259,639 2,209,943 Total portfolio loans 1,409,962 1,398,784 1,377,494
Slide 5: 2014 4th Quarter Financial Highlights
2014 4th Quarter Financial Highlights Income Statement Net income of $3.9 million, or $0.17 per diluted share.Improved asset quality metrics led to $1.1 million credit loan loss provision.Impairment charge on MSR’s of $1.0 million ($0.027 per diluted share after tax).Gain on extinguishment of debt o
Slide 6: 2014 Annual Financial Highlights
2014 Annual Financial Highlights Income Statement Net income of $18.0 million, or $0.77 per diluted share.Pretax earnings increased by $2.6 million, or 11.3%, year-over-year.Improved asset quality metrics led to $3.1 million credit loan loss provision. Loan net charge-offs declined by 59.8% year-ove
Slide 7: Core Banking Markets
Core Banking Markets Significant market presence and opportunity to gain market share in attractive Michigan markets. Michigan’s unemployment rate was 6.7% in November 2014 (1.8% lower than November 2013).Michigan payroll jobs totaled 4.164 million in November 2014 (39K higher than one year earlier)
Slide 8: Branch Consolidation
Branch Consolidation Consolidating Office / Deposits at 12/31/14 Consolidated Into Office / Deposits at 12/31/14 Bay City Broadway / $14.2 million / 1.3 miles from Bay City Main Into Bay City Main / $56.5 million Croton / $13.1 million / township population of 3,042 (estimate) Into Newaygo / $41.7 m
Slide 9: Statewide Low Cost Deposit Franchise
Statewide Low Cost Deposit FranchiseFocused on Core Deposit Growth $1.92 billion in total deposits at 12/31/14.Substantially all core funding.$1.53 billion of transaction accounts (79.7% of total deposits).Cost of deposits of 0.24% (4Q ’14 annualized).Cost of deposits of 0.26% for all of 2014.Total
Slide 10: Diversified Loan Portfolio
Diversified Loan PortfolioFocused on High Quality Growth Three consecutive quarters of net loan growth in 2014.$1.43 billion in total loans at 12/31/14 (including $23.7 million of loans held for sale).2014 lending results include:Commercial loan growth of $55.7 million, or 8.8%. Line usage at 48.5%
Slide 11: Net Interest Margin/Income
Net Interest Margin/Income Interest rate sensitivity profile of the loan and securities portfolios, in combination with a low cost core deposit base, positions us to benefit from a rising interest rate environment.Net interest income decreased slightly in 4Q’14 vs. 3Q’14 as a 5 BP decrease in the NI
Slide 12: Net Interest Income and Net Interest Margin
Net Interest Income and Net Interest MarginAnalysis of Linked Quarter Decline Summary4Q’14 net interest income of $18.057 million, down $126K from 3Q’14. The linked quarter decline was due to $174K decrease in interest and fees on loans and a $120K decrease in interest on tax-exempt securities. Thes
Slide 13: Non-interest Income
Non-interest Income 2014 Non-interest Income Breakout Highlights Diverse sources of non-interest income which totaled $9.2 million in 4Q’14.2014 total non-interest income represents approximately 34.6% of total revenue (net interest income and non-interest income).New debit card brand agreement exec
Slide 14: Non-interest Expense
Non-interest Expense Non-interest Expense ($ in Millions) Highlights Full-year total non-interest expenses declined $14.2 million, or 13.6%, in 2014 as compared to 2013. Q4’14 total non-interest expenses increased over Q3’14 due primarily to an increase in compensation and benefits.Target for 2015 i
Slide 15: Investment Securities Portfolio
Investment Securities Portfolio High quality, liquid, diverse portfolio with short duration.78% of the portfolio is AAA rated (or backed by the U.S. Government).1.9 year estimated average duration with a weighted average yield of 1.57%.Approximately 46% of the portfolio is variable rate. Total Inves
Slide 16: Credit Quality Summary
Credit Quality Summary Non-performing Loans ($ in Millions) 30-89 Days Delinquent ($ in Millions) ORE / ORA ($ in Millions) Non-performing Assets ($ in Millions) Note: Non-performing loans and non-performing assets exclude troubled debt restructurings that are performing. 16
Slide 17: Credit Cost Summary
Credit Cost Summary 17 Provision for Loan Losses Loan Net Charge-Offs Allowance for Loan Losses Note: Dollars all in millions
Slide 18: Classified Assets and New Default Trends
Classified Assets and New Default Trends Total Classified Assets ($ in Millions) Commercial Loan New Defaults ($ in Millions) Total Loan New Defaults ($ in Millions) Retail Loan New Defaults ($ in Millions) 18
Slide 19: Troubled Debt Restructurings (TDRs)
Troubled Debt Restructurings (TDRs)Over 90% of TDRs are Current Working with client base to maximize sustainable performance.The specific reserves allocated to TDRs totaled $12.2 million at 12/31/14.A majority of our TDRs are performing under their modified terms but remain in TDR status for the lif
Slide 20: 2014 Actual vs. Management Original Outlook
2014 Actual vs. Management Original Outlook Category Original Outlook Lending Modest growthGoal of low single digit % overall loan growth, primarily supported by mid single digit % growth in commercial loans and low single digit % growth in consumer loans. Final 2014 Update: Total loans (excluding l
Slide 21: Management 2015 Outlook
Management 2015 Outlook(1) Category Outlook Lending Modest growthGoal of mid single digit % overall loan growth, primarily supported by mid single digit % growth in commercial loans and consumer loans with modest increases in mortgage loans and payment plan receivables. Expect much of this growth to
Slide 22: Strategic Initiatives
Strategic Initiatives Balance SheetGenerate quality loan growth with continued focus on commercial and consumer installment lending as well as salable mortgage loans.Remain asset sensitive and positioned to benefit from higher interest rates (short duration investment portfolio, large variable rate
Slide 23: Question and Answer Session, Closing Remarks
Independent Bank Corporation4th Quarter 2014 Earnings Conference Call Question and Answer SessionClosing RemarksThank you for attending !NASDAQ: IBCP 23