Independent Bank Corp. · NASDAQ:INDB
Independent Bank — SunTrust Robinson Humphrey 2009 Financial Services Conference
25 slides from Independent Bank's conference presentation, May 19, 2009
Slide 1: Investor Presentation - SunTrust Robinson Humphrey 2009 Financial Services Conference
Investor Presentation SunTrust Robinson Humphrey 2009 Financial Services Conference May 19, 2009
Slide 2: Who We Are
Who We Are Main Sub: Rockland Trust Market: Eastern Massachusetts Loans: $3.4 B Deposits: $3.4 B* $AUM: $1.1 B Equity: $0.4 B NASDAQ: INDB * Proforma as of 3/31/09 to include the acquisition of Benjamin Franklin Bancorp.
Slide 3: Key Messages
Key Messages Business lines performing well Generating robust loan and deposit volumes Gaining customers from industry fallout We're more than a traditional community bank Extending our strong local market presence Disciplined risk management culture Strong balance sheet
Slide 4: Company Footprint
Company Footprint 71 Branches 3 Mortgage Banking Centers 12 Commercial Banking Centers 4 Investment Management Centers Business generation extends beyond S.E. Mass. footprint Source: SNL Financial; Deposit/Market Share data as of June 30, 2008 including pending transactions. (Includes Credit Unions)
Slide 5: Strong Organic Growth in Priority Portfolios
2007 2008 A 363 B 428 C 2007 2008 A 318 B 401 C Strong Organic Growth in Priority Portfolios (Millions) 12/08 vs. 12/07 (ex acquis) 3/09 vs 12/08 7% 5% Comm'l Loan Originations Consumer Loan Originations (Resi's & Home Eq.) +26% +18% Comm'l Loan $ Bal. Home Equity $ Bal. 19% 5% annualized annualized
Slide 6: Repositioning the Balance Sheet
Repositioning the Balance Sheet Home Eq/Oth. Consumer Loans Consumer-Resi's & Auto Loans Securities & ST Investments Commercial Loans 0.11 0.25 0.27 0.37 Home Eq./Oth. Consumer Loans Consumer - Resi's & Auto Loans Securities & ST Investments Commercial Loans 0.13 0.16 0.22 0.49 2005 $2.8 B 1Q 2009 $
Slide 7: Improved Funding Mix - Lower Cost Deposits
Improved Funding Mix - Lower Cost Deposits Savings/ Now C/D's Money Market Demand Deposits 0.29 0.31 0.2 0.2 TOTAL DEPOSITS 1Q 2009 $2.7 B AVERAGE COST - TOTAL DEP: 1.28% Very Focused On Containing Deposit Costs Deposits ?12% annual. vs 4Q08 Core Deposits: 69% No broker CD's
Slide 8: Reducing Below-Hurdle Assets
Reducing Below - Hurdle Assets Indirect Consumer Loans $ Millions 2005 2006 2007 Q1 '08 Q2 '08 Q3 '08 2008 1Q09 274 218 166 147 137 141 135 124 Shedding Non-Relationship Assets Accounted for 30% of total 2008 net chargeoffs
Slide 9: Avoided Industry Pitfalls
Avoided Industry Pitfalls No outsized credit charges No subprime exposure No Fannie or Freddie exposure No loss ($P&L) quarters No dilutive common equity raising No dividend cuts Modest securities impairment
Slide 10: Disciplined Credit Culture
Disciplined Credit Culture Longstanding underwriting conservatism Loan portfolio based within footprint In-depth knowledge of local markets No wholesale originations of any loan type Workout team in place for 16 years
Slide 11: Asset Quality - No Drama
2007 2008 1Q09 3.1 6.2 3.6 Asset Quality - No Drama Net Charge Offs ($ Millions) NPL's ($ Millions) Dec '07 Dec '08 1Q09 7.6 26.9 29 0.37% 1.01% 1.08% Loss Rate NPL % 16bp 24bp 53bp (annual.) Rising with weakening economy Losses well-contained
Slide 12: Strong Loan Loss Reserves
Strong Loan Loss Reserves Reserves a Healthy Multiple of Loss Rate Reserves/Loans Net Chargeoffs/Avg. Loans
Slide 13: Operating Earnings Trends
Operating Earnings Trends 4Q08 1Q09 4Q08 1Q09 East 3 West 5.3 North 6 6.5 2007 2008 2008 East 30.1 West 25.3 North 30 ex sec. impairment ex sec. impairment Earnings ($Mil) Solidly Profitable Despite Economic Turmoil ex CPP pref. div Earnings* ($Mil) Diluted E.P.S. $2.13 $1.61 $1.90 $0.18 $0.33 $0.37
Slide 14: Net Interest Margin Holding Up Despite Difficult Conditions
Net Interest Margin Holding Up Despite Difficult Conditions
Slide 15: Wealth Management - Strategic Priority
2005 2006 2007 Q1 '08 Q2 '08 Q3 '08 Q3 '08 YTD 2008 1Q09 5.3 6.1 8.1 2.7 3.1 2.8 8.6 11.1 2.3 4Q05 4Q06 4Q07 4Q08 1Q09 Q3 '08 680 816 1289 1124 1066 1262 Fee Based Revenues - Steady and Growing Source 109% Assets Under Management ($ Millions) Wealth Management Revenue ($ Millions) Wealth Management
Slide 16: Acquisition of Benjamin Franklin Bancorp. (BFBC)
Acquisition of Benjamin Franklin Bancorp. (BFBC) Strategic Rationale Contiguous expansion into highly attractive markets Greater access to Boston's western suburbs Excellent demographics and higher density Acquiring a healthy, well-run, growing community bank Building franchise value - solid loan an
Slide 17: INDB/BFBC Footprint
INDB/BFBC Footprint INDB: 60 Branches BFBC: 11 Branches BFBC 12/31/08 ($MM) Deposits: $653 Loans: $689 Equity: $110
Slide 18: Attractive Demographics
Attractive Demographics Source: SNL Financial MA INDB BFBC A 68.176 B 70.9 C 85.7 C Median HH Income ($ Thou.) 2008 Total Population (Thou.) 2008 INDB/BFBC Proforma MA A 3430 B 6518 C
Slide 19: Building Franchise Value
Building Franchise Value Disciplined Acquisitions $336mm Deposits $135mm Loans 16 Branches Deal Value: $40mm 12% Dep. Premium Fleet Divest. Aug '00 $158mm Assets $137mm Deposits 4 Branches Deal Value: $37mm 11% Dep. Premium Falmouth Bancorp Jul '04 IRS Sec. 1031 Like-Kind Exchange Services Deal Valu
Slide 20: Repayment of CPP Investment ($78MM) to U.S. Treasury
Repayment of CPP Investment ($78MM) to U.S. Treasury RATIONALE Originally intended for healthy banks to spur lending Quickly viewed as a bailout program Created serious image problems, esp. with customers Gov't changed rules of engagement midstream INDB not constrained in meeting credit demand Remai
Slide 21: Strong Capital
Strong Capital Total Risk-Based % Tier 1 Leverage % Q4 '05 Q4 '06 Q4 '07 Q1 '08 Q2 '08 Q3 '08 4Q08 1Q09 0.0771 0.0758 0.0805 0.0778 0.0802 0.0855 0.0761 0.0769 4Q08 1Q09 0.119 0.123 Tangible Capital % Q4 '05 Q4 '06 Q4 '07 Q1 '08 Q2 '08 Q3 '08 4Q08 1Q09 0.057 0.057 0.063 0.058 0.059 0.0691 0.054 0.05
Slide 22: Attentive to Shareholder Returns
Attentive to Shareholder Returns 2003 2004 2005 2006 2007 2008 1Q09 East 0.52 West 0.56 North 0.6 0.64 0.68 0.72 0.18 *declared Cash Dividends* Per Share
Slide 23: Our GamePlan in Very Challenging Environment
Our GamePlan in Very Challenging Environment Expand business with new and existing customers Fulfill local credit needs while maintaining discipline Cultivate strong deposit base with rational pricing Continue to capitalize on competitive dislocations Integrate Ben Franklin quickly and smoothly Exer
Slide 24: INDB - Investment Merits
INDB - Investment Merits Building franchise value in attractive markets Strong on-the-ground business volumes Operating platform that can be leveraged further Balance sheet equipped to deal with severe environment Grounded management team - does not "reach for earnings" Aligned with shareholders - i
Slide 25: Forward-Looking Statements and Contact
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
Independent Bank — SunTrust Robinson Humphrey 2009 Financial Services Conference on 6ix