Independent Bank Corp. · NASDAQ:INDB
Independent Bank — 2024 KBW Winter Financial Services Conference
24 slides from Independent Bank's conference presentation, Feb 14, 2024
Slide 1: 2024 KBW Winter Financial Services Conference
2024 KBW Winter Financial Services Conference Jeff Tengel - Chief Executive Officer Mark Ruggiero - Chief Financial Officer & EVP Consumer Lending Gerry Nadeau - President, Rockland Trust Independent Bank Corp. (INDB) (parent of Rockland Trust Company) February 15, 2024
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 $14.9 B Deposits $6.5 B Wealth management $2.3 B Market Cap* Key Metrics as of December 31, 2023 2*as of February 12, 2024
Slide 3: Company Overview
3 Company Overview Safe & Sound Customer Centric • Strong, liquid balance sheet • Prudent interest rate and liquidity risk management • Significant capital buffer • Diversified, low-cost deposit base • Experienced commercial lender with conservative credit culture • Proven operator and acquiror • Fu
Slide 4: Near-Term Priorities
Near-Term Priorities 4 • Sustaining progress under new CEO • Deepening of risk management infrastructure • Robust portfolio management activity in CRE office asset class • Stabilizing interest rate risk through volatile rate environment • Prioritizing liquidity and capital risk management ◦ Focus on
Slide 5: Expanding Company Footprint
Source: SNL Financial; Deposit/Market Share data as of June 30, 2023 Expanding Company Footprint Exceptional Deposit Franchise Market Share Rank 2023 % of INDB Deposits Plymouth County 1 25.4% 31% Norfolk County 5 6.6% 15% Suffolk County 8 0.7% 14% Barnstable County (Cape Cod) 3 11.8% 9% Bristol Cou
Slide 6: Financial Performance: Strong Fundamentals Drive Long-Term Trends
Operating Earnings ($Mil)** $121.7 $187.6 $268.9 $239.5 $3.66 $5.38 $5.80 $5.42 Operating Earnings Operating EPS 2020 2021 2022 2023 $0 $100 $200 $300 $2 $4 $6 GAAP Earnings ($Mil) $121.2 $121.0 $263.8 $239.5 $3.64 $3.47 $5.69 $5.42 Net Income Diluted EPS 2020 2021 2022 2023 $0 $100 $200 $300 $2 $4
Slide 7: Financial Performance - Most Recent Quarter (Q4 2023)
$ 54.8M Net Income $ 1.26 Diluted EPS 1.13% ROAA 7.51% ROAE 11.50% ROATCE 7 Financial Performance - Most Recent Quarter (Q4 2023) • Disciplined loan growth • Seasonal business deposit impact; stable consumer balances • Core NIM* at 3.35% • Nonperforming asset increase; minimal charge-offs/ loss expo
Slide 8: Loan Balances
8 Loan Balances ($ in millions) Period Ended $ Increase % Increase Loan Category 12/31/2023 9/30/2023 (Decrease) (Decrease) Commercial and industrial $ 1,580 $ 1,653 $ (73) (4.4) % Commercial real estate 8,041 7,896 145 1.8 % Commercial construction 850 965 (115) (11.9) % Small business 252 245 7 2.
Slide 9: Loan Portfolios
9 Loan Portfolios 95% CRE & Construction Portfolio $8.9 billion Residential - Related - 34.0% Strip Malls / Retail - 19.5%Mixed Use, Primarily Office - 2.5% Office Buildings - 13.9% Industrial Warehouse - 12.6% Hotels/Motels - 8.1% Healthcare - 2.7% All Other - 6.7% C&I Portfolio $1.6 billion Retail
Slide 10: Focal Point: Non-Owner Occupied CRE Office
10 Focal Point: Non-Owner Occupied CRE Office (inclusive of construction) 95% CRE Office - Total Portfolio ($ in millions) December 31, 2023 September 30, 2023 CRE - Mixed use, primarily office* $ 219 $ 219 CRE - Office: owner occupied 193 200 CRE - Office: non-owner occupied 1,045 1,060 *CRE - Mixe
Slide 11: Focal Point: Multifamily CRE
11 Focal Point: Multifamily CRE 95% Multifamily Portfolio ($ in millions) December 31, 2023 September 30, 2023 Total Balances $ 1,880 $ 1,912 Total Average Loan Size 2.4 2.5 Average Loan Size - Top 20 20.8 20.4 Average Loan Size - All Others 1.9 1.9 Asset Quality As of 12/31/2023 Total Balances Crit
Slide 12: Asset Quality
12 Nonperforming Loans ($ in millions) $56.2 $45.7 $39.2 $54.4 0.40% 0.32% 0.28% 0.38% NPLs ($Mil) NPL/Loan% Q1 2023 Q2 2023 Q3 2023 Q4 2023 0.30% 0.40% $0 $30 $60 Net Charge-offs/(Recoveries) ($ in millions) $0.5 $23.5 $5.6 $3.80.02% 0.67% 0.16% 0.11% Net Charge-offs (recoveries) Annualized Loss Ra
Slide 13: Deposit Balances and Cost of Deposits
13 ($ in millions) Period Ended $ Increase % Increase Deposit Product Type 12/31/2023 9/30/2023 (Decrease) (Decrease) Noninterest-bearing demand deposits $ 4,567 $ 4,796 $ (229) (4.8) % Savings and interest checking deposits 5,299 5,398 (99) (1.8) % Money market deposits 2,818 2,852 (34) (1.2) % Tim
Slide 14: Strong Capital Position
Book Value $51.65 $63.75 $63.25 $67.53 12.89% 14.78% 14.96% 14.96% 9.56% 12.03% 10.99% 10.96% Book Value Per Share Equity/Assets % Tier 1 Leverage 2020 2021 2022 2023 $0 $10 $20 $30 $40 $50 $60 $70 0% 5% 10% 15% 20% 25% Tangible Book Value* $35.59 $42.25 $41.12 $44.13 9.26% 10.31% 10.26% 10.31% TBV
Slide 15: Securities Portfolio
15 Securities Portfolio Available for Sale (AFS) Held to Maturity (HTM) Portfolio Composition at December 31, 2023 Book Value Fair Value Unrealized Gain/(Loss) Book Value Fair Value Unrealized Gain/(Loss) ($ in millions) U.S. government agency securities $ 230 $ 207 $ (23) $ 30 $ 29 $ (1) U.S. treas
Slide 16: Net Interest Margin Analysis
16 Net Interest Margin Analysis Net Interest Margin 3.79% 3.54% 3.47% 3.38% 3.78% 3.52% 3.47% 3.35% Reported NIM Core NIM* Q1 2023 Q2 2023 Q3 2023 Q4 2023 3.25% 3.50% 3.75% 4.00% Cumulative Loan Betas 25.4% 27.1% 27.8% 26.4% 28.3% Q4 2022 Q1 2023 Q2 2023 Q3 2023 Q4 2023 25% 26% 27% 28% 29% Cumulativ
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 AUA ($ Bil.) $4.9 $5.7 $5.8 $6.5 2020 2021 2022 2023 Revenues ($
Slide 18: Sustaining Business Momentum
Sustaining Business Momentum Business Line • Extend market presence/recruit seasoned bankers • Grow client base/expanded lending capacity • Expand specialty products, e.g. ABL, floorplan • Optimize loan/deposit origination process • Continue to drive household growth • Expand digital offerings • Exp
Slide 19: INDB Investment Merits
INDB Investment Merits • High quality franchise in attractive markets • Consistent, strong financial performance • Strong organic business volumes • Growing brand recognition • Leverageable operating platform • Capitalizing on in-market consolidation opportunities • Diligent stewards of shareholder
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 December 31, 2023 September 30, 2023 June 30, 2023 March
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
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