Independent Bank Corp. · NASDAQ:INDB
Independent Bank — KBW 2008 Regional Banking Conference
32 slides from Independent Bank's conference presentation, Feb 27, 2008
Slide 1: Investor Presentation, KBW 2008 Regional Banking Conference
Investor Presentation KBW 2008 Regional Banking Conference February 27, 2008
Slide 2: Who We Are
Who We Are Main Sub: Rockland Trust Market: S.E. Massachusetts Loans: $2.0 B Deposits: $2.0 B $AUM: $1.3 B Market Cap: $0.4 B NASDAQ: INDB
Slide 3: Key Messages
Key Messages Completing our repositioning for superior risk/returns Growth reemerging in priority businesses We're more than a traditional, community bank Business platform in excellent shape and leverageable Extending our strong local market presence Extraordinary levels of customer loyalty and sat
Slide 4: Company Footprint
61 Branches* 5 Mortgage Banking Centers 9 Commercial Banking Centers 3 Investment Management Centers Business generation extends beyond S.E. Mass. footprint Company Footprint * Proforma to include the pending acquisition of Slade's Ferry Bancorp
Slide 5: Fastest Growing Region In The State
Source: SNL Financial Fastest Growing Region In The State MA Plymouth County Barnstable County Bristol County A 0.0192 B 0.0492 C 0.0222 D 0.0202 MA Plymouth County Barnstable County Bristol County A 66.046 B 73.061 C 61.707 C 55.371 Attractive Demographics Projected Population Growth 2007 - 2012 Me
Slide 6: Economic Stimuli and Growth
Economic Stimuli and Growth From: Major commuter rail expansion Potential gaming site: 1st in state High % of undeveloped land Steady migration into Cape Cod National retailers expanding into the region INDB Well-Positioned To Capitalize Exciting Regional Developments
Slide 7: Growth Market Infrastructure
Rail Lines Existing Opened November 2007 Proposed Highway Rt. 44 Expansion Potential Gaming Site Growth Market Infrastructure
Slide 8: Acquisition of Slade's Ferry Bancorp (SFBC)
Acquisition of Slade's Ferry Bancorp (SFBC) Strategic Rationale Contiguous market expansion in S.E. Mass. - State's fastest growing region Significant share improvement in vital Providence - - New Bedford corridor (23rd to 8th) Adding a solid loan and deposit base Ability to further penetrate SFBC c
Slide 9: INDB/SFBC Footprint
INDB/SFBC Footprint INDB: 52 Branches SFBC: 9 Branches SFBC 12/31/07 ($MM) Deposits: $390 Loans: $458 Equity: $ 52
Slide 10: Bringing INDB's Deeper Product Set to SFBC's Customer Base
Bringing INDB's Deeper Product Set to SFBC's Customer Base Consumer Commercial Wealth Management Home Equity Deposit Services Marketing Programs Commercial Banking New Market Tax Credit Program IRS Sec. 1031 Services (Compass Exchange) Investment Management & Trust AUM: $1B+ 3 Inv. Centers SFBC Cust
Slide 11: Disciplined Acquisitions Building Franchise Value
$158mm Assets $137mm Deposits 4 Branches IRS Sec. 1031 Like-Kind Exchange Services $200mm AUM $336mm Deposits $135mm Loans 16 Branches Deal Value: $40mm 12% Dep. Premium Deal Value: $37mm 12% Dep. Premium Deal Value: N/A Cash Deal w/ Earn-Out Deal Value: N/A Cash Deal w/ Earn-Out Disciplined Acquisi
Slide 12: Prevailing Environment - Tough One For Sure
Intense competitive pricing Housing market pressures Credit markets in disarray Challenging yield curve Negative investor psychology Prevailing Environment - Tough One For Sure
Slide 13: Current Tough Environment - Our Response
Sitting still is not an option Sharpen the pencil on risk/returns Feed our strengths Will not reach for earnings ... retained credit discipline Employ capital judiciously Hit the ground running when conditions improve Current Tough Environment - Our Response
Slide 14: Current Tough Environment - Our Gameplan
Reduce below-hurdle assets Grow competitively-advantaged loan businesses Grow fee-based activities, esp. wealth management Improve funding mix Capitalize on New Market Tax Credit Program Manage expenses tightly ... fund growth initiatives Selectively consider value-added acquisitions Return excess c
Slide 15: Repositioning the Balance Sheet
Asset Class Securities Residential Mortgages Indirect Auto Commercial Loans Home Equity Emphasis Repositioning the Balance Sheet
Slide 16: Repositioning the Balance Sheet - Net Result
Improved Earning Asset and Funding Mix Improvement / Sustenance of Interest Margin Freeing-Up of Capital Improvement in Expected Returns Sacrifice of Near-Term Earnings Repositioning the Balance Sheet - Net Result
Slide 17: Shedding Non-Relationship Assets
2005 2006 2007 717 517 507 Securities Residential R.E. Loans Auto Loans 29% $ Mil 2005 2006 2007 442 398 341 23% 2005 2006 2007 263 207 156 41% Shedding Non-Relationship Assets Reducing Below - Hurdle Assets
Slide 18: Lending Businesses - Areas of Emphasis
2005 2006 2007 252 277 309 Commercial Commercial R.E. Strong Pipeline Adding Experienced Lenders Highly Diversified New Market Tax Credit Program Home Equity 2005 2006 2007 824 860 931 Generates New Customers High Credit Standards 13% 23% $ Mil Loans 26% 2005 2006 2007 206 234 260 $51 $60 $70 Busine
Slide 19: More Attractive Earning Asset Mix
Home Eq/Oth. Consumer Loans Consumer-Resi's & Auto Loans Securities & ST Investments Commercial Loans 0.11 0.25 0.28 0.36 Home Eq./Oth. Consumer Loans Consumer - Resi's & Auto Loans Securities & ST Investments Commercial Loans 0.14 0.19 0.2 0.47 2005 $2.8 B 2007 $2.6 B More Attractive Earning Asset
Slide 20: Improved Funding Mix - Lower Wholesale Borrowings
2005 2006 2007 588 494 504 FHLB Borrowings Significantly Reduced Refinancing of Trust Preferred will save $1mm / year 14% Borrowings ($ Mil) % of Assets 2005 2006 2007 0.19 0.17 0.18 Improved Funding Mix - Lower Wholesale Borrowings
Slide 21: Improved Funding Mix - Lower Cost Deposits
$2.0 B Savings/ Now C/D's Money Market Demand Deposits 0.29 0.26 0.22 0.23 TOTAL DEPOSITS 2007 $2.0 B AVG. COST - TOTAL DEP: 2.12% Very Focused On Containing Deposit Costs Improved Funding Mix - Lower Cost Deposits
Slide 22: Recent Earnings Trends Reflect Shrinking of the Balance Sheet
2006 2007 2.19 2.13 2006 2007 33.1 30.1 2005 2006 2007 2.8 2.6 2.6 7% 3% 9% Earning Assets ($ Bil) Net Operating Results Earnings ($Mil) Earnings per Share ($) Recent Earnings Trends Reflect Shrinking of the Balance Sheet Sacrificing Short-Term Earnings for Superior Long Term Performance Repositioni
Slide 23: Net Interest Margin Holding Up Despite Difficult Conditions
Net Interest Margin Holding Up Despite Difficult Conditions
Slide 24: Fee Based Revenues - Steady and Growing
2005 2006 2007 26.5 28.5 32.1 2005 2006 2007 0.2 0.22 0.25 *Excluding Securities G/L's in 2005 and 2006 and BOLI Benefit Proceeds in 2006 20% % of Operating Revenues Operating Non-Interest Income* ($ Mil) Fee Based Revenues - Steady and Growing Source
Slide 25: Wealth Management - Strategic Priority
Q4 '05 1,342 Q4 '06 1,528 Q3 '07 1,786 Q4 '07 2,500 680 816 1106 1289 2005 2006 2007 5.3 6.1 8.1 53% Assets Under Management ($ Mil) Wealth Mgmt. Revenue ($ Mil) Wealth Management - Strategic Priority Natural Fit with Client Base Change in Retail Origination Model Paying Off Recent O'Connell Acquisi
Slide 26: New Market Tax Credit Program
New Market Tax Credit Program Federal program incenting community business lending Awards tax credits to selected institutions Tax credits extend over multi-year period INDB: has the only Mass. bank sub to receive award in '06
Slide 27: Strong Asset Quality
Dec '06 0.25% Dec '07 0.30% Net Charge Offs ($ Mil) NPA's ($ Mil) NPA % Loss Rate 30% + of chargeoffs from a shrinking auto loan portfolio Strong Asset Quality 2006 11bp 2007 16bp
Slide 28: Strong Loan Loss Reserves
Dec '06 Dec '07 Reserves / Non-Performing Loans Reserves / Loans Dec '06 Dec '07 Strong Loan Loss Reserves
Slide 29: Mortgage Lending - High Credit Standards
Mortgage Lending - High Credit Standards
Slide 30: Strong Capital - Returning Excess to Shareholders
Q4 '05 Q4 '06 Q4 '07 0.0771 0.0805 0.0802 Tangible % Tier 1 Leverage % Q4 '05 Q4 '06 Q4 '07 0.057 0.063 0.059 ------------------------ Since YE '05 ----------------------- Repurchased 1.8 million shares = 12% of total shares Strong Capital - Returning Excess to Shareholders
Slide 31: Positioned for the Turn
Balance Sheet Growth Expected to Resume in 2008 Fee-Based Revenues Growing Nicely Net Interest Margin Maintaining Strength Excellent Shape Creditwise Accretive Deals Being Implemented Adding Talent in the Right Places Creative Info-Based Sales/Marketing Programs Underway Regional Growth Dynamics Gai
Slide 32: Forward-looking statements and contact information
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 to differ materially from those currently anticipated due to a number of factors, which include, but are not limited
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