Independent Bank Corp. · NASDAQ:INDB
Independent Bank — Merger or Acquisition (April 2021)
23 slides from Independent Bank's merger presentation, Apr 22, 2021
Slide 1: Announces Acquisition of Meridian Bancorp, Inc.
Announces Acquisition of Meridian Bancorp, Inc. Creating the premier community-focused commercial bank in Massachusetts April 22, 2021
Slide 2: Disclaimer: Caution Regarding Forward-Looking Statements
(2) Disclaimer CAUTION REGARDING FORWARD-LOOKING STATEMENTS This communication may contain forward-looking statements, including, but not limited to, certain plans, expectations, goals, projections, and statements about the benefits of the proposed transaction, the plans, objectives, expectations an
Slide 3: Compelling Combination Creates Significant Shareholder Value
(3) Compelling Combination Creates Significant Shareholder Value Reinforces INDB’s position as the Boston area’s premier community-focused commercial bank; pro forma #1 in commercial loans and #2 in deposit market share (Boston MSA) amongst all banks headquartered in Massachusetts Generates strong d
Slide 4: Meridian Bancorp: Company Overview
(4) 15% 46% 16% 23% 3.12% 3.09% EBSB Peer Median Commercial Loans as % of Total Loans(2)FY20 Net Interest Margin Source: S&P Global Market Intelligence; Company documents 1) EBSB peers include major exchange-traded banks in the Northeast region with total assets between $2 billion and $10 billion 2)
Slide 5: Transaction Increases Density in Attractive Boston MSA
(5) 1. Bank of America Corporation 91.4 2. Citizens Financial Group Inc. 50.4 3. Banco Santander S.A. 21.7 4. The Toronto-Dominion Bank 17.3 5. Eastern Bankshares Inc. 16.2 Pro Forma 12.6 6. First Republic Bank 10.0 7. Independent Bank Corp. 7.8 8. M&T Bank Corp. 6.8 9. Meridian Bancorp Inc. 4.8 10.
Slide 6: Key Transaction Terms
(6) Key Transaction Terms Transaction Structure Independent Bank Corp. to acquire Meridian Bancorp and East Boston Savings Bank to merge into Rockland Trust 100% stock consideration Exchange Ratio Fixed exchange ratio Meridian Bancorp shareholders will receive 0.2750 of a share of INDB stock
Slide 7: Well-Priced Transaction Relative to Recent Comparable Deals
(7) Well-Priced Transaction Relative to Recent Comparable Deals 1.50x 1.45x Other Recent Transactions 25.0% 10% Other Recent Transactions Source: S&P Global Market Intelligence; Company documents Note: INDB/EBSB transaction metrics based on INDB stock price as of 4/21/21 Note: Includes nationwide wh
Slide 8: Attractive Pro Forma Financial Impact
(8) Robust Capital & Reserve Levels (4) Attractive Pro Forma Financial Impact >13% Pro Forma CET1 Ratio at Close ~11% Pro Forma TCE / TA Ratio at Close ~1.7% Pro Forma ACL/Loans HFI Ratio at Close 1) Based on consensus estimates 2) Does not include purchase accounting adjustments or balance sheet re
Slide 9: Creates Peer-Leading Financial Performance
(9) Creates Peer-Leading Financial Performance Source: S&P Global Market Intelligence Note: Peer group includes 27 publicly traded banks nationwide with assets between $15B and $25bn; Profitability metrics based on publicly available 2022 consensus estimates as of 4/21/21 Note: INDB pro forma financ
Slide 10: Optimize Liquidity / Profitability: Balance Sheet Restructure
(10) Optimize Liquidity / Profitability Balance Sheet Restructure Assumptions Rationale: ► A two-year plan focusing on reducing excess liquidity, exiting less profitable deposit relationships, and reducing CRE concentration ► The pro forma bank will maintain strong profitability metrics with improve
Slide 11: Complementary Businesses with Potential Synergies
(11) Retail BankingCommercial Banking Strong demographics attributable to new markets provide upside potential Leverage client facing staff for introductions and opportunities within new client base Capitalize on EBSB relationships to expand centers of influence for new opportunities Leverag
Slide 12: Robust Due Diligence Process
(12) Retail BankingInstitutional Banking Commercial Real EstateALCO & Funding Information TechnologyHuman Resources Accounting & AuditLegal, Regulatory & Risk Mgmt. • Reviewed risk framework, credit policies, strategies, committee materials, and loan files • Assessment of performance trends across c
Slide 13: Driving Long Term Growth & Shareholder Value
(13) Total Shareholder Return (1) 3 Year 5 Year 10 Year INDB 18% 84% 228% KBW Regional Bank 8% 48% 131% 20182013 Driving Long Term Growth & Shareholder Value Source: S&P Global Market Intelligence 1) Per FactSet; closing price as of 4/21/2021; Total return defined as stock appreciation inclusive of
Slide 14: Appendix
INDEPENDENT Appendix
Slide 15: Key Assumptions
(15) Key Assumptions Earnings Estimates Independent Bank Corp: Consensus mean estimates Meridian Bancorp: Consensus mean estimates Synergies & One-time Merger Expenses Identified fully phased-in cost savings of ~$45 million pre-tax – 45% of Meridian Bancorp’s operating non-interest expenses, i
Slide 16: Meridian Bancorp Historical Financials
(16) Meridian Bancorp Historical Financials (Dollars in Millions) At or for the year ended, Quarter ended, 12/31/16 12/31/17 12/31/18 12/31/19 12/31/20 03/31/21 Total Assets $4,436 $5,299 $6,179 $6,344 $6,620 $6,504 Total Gross Loans 3,943 4,672 5,647 5,750 5,521 5,303 Total Deposits 3,476 4,108 4,8
Slide 17: Diversified Loan and Deposit Portfolios
(17) 15% 46% 16% 23% 29% 40% 19% 12% 36% 37% 20% 7% 8% 12% 51% 20% 9% 6% 13% 45% 23% 13% 12% 10% 62% 15% 1% Diversified Loan and Deposit Portfolios Lo a n C o m p o si ti o n D e p o si t C o m p o si ti o n $9.2bn $5.3bn $14.5bn $11.6bn $5.1bn $16.7bn CRE C&I Consumer & Other Construction Residenti
Slide 18: Diversified, Well-Secured Commercial Real Estate Portfolios
(18) Residential- Related 35% Commercial Buildings 17% Office Buildings 21% Industrial / Warehouse 12% Hotels / Motels 9% All Other 6% Residential- Related 31% Commercial Buildings 23% Office Buildings 15% Industrial / Warehouse 10% Hotels / Motels 8% All Other 13% Diversified, Well-Secured Commerci
Slide 19: Diversified Revenue Mix With Substantial Fee Income Growth Opportunity
(19) 81% 19% 89% 11% 77% 23% 23% 20% 27% 30% 9% 37% 54% 28% 22%25% 25% Diversified Revenue Mix With Substantial Fee Income Growth Opportunity R e v e n u e C o m p o si ti o n N o n -i n te re st In co m e C o m p o si ti o n $479mm $219mm $698mm Net Interest Income Non-interest Income $110mm $23mm
Slide 20: Tangible Book Value Accretion Reconciliation
(20) Tangible Book Value Accretion Reconciliation Tangible Book Value Accretion Aggregate ($ millions) Per Share INDB Estimated TBV (12/31/21) $1,236 $37.36 Plus: Equity Consideration $1,131 Less: Estimated After-tax Buyer Restructuring Charges & Day Two CECL Reserve ($89) Less: Estimated Intangible
Slide 21: Earnings Per Share Accretion Reconciliation
(21) Earnings Per Share Accretion Reconciliation ($ Millions, except per share values) Pro forma Year 1 INDB's Consensus Net Income Estimate $135 EBSB's Consensus Net Income Estimate $71 INDB Consensus EPS Estimate $4.07 EBSB Consensus EPS Estimate $1.47 After-Tax Transaction Adjustments: Cost Savin
Slide 22: Non-GAAP Financial Measures
(22) Non-GAAP Financial Measures In addition to results presented in accordance with GAAP, this presentation contains certain non-GAAP financial measures. A reconciliation of tangible equity and/or tangible book value is included on page 23. Management believes that providing certain non-GAAP financ
Slide 23: Reconciliation of Non-GAAP Capital Metrics
(23) Reconciliation of Non-GAAP Capital Metrics EBSB ($ millions) 12/31/16 12/31/17 12/31/18 12/31/19 12/31/20 3/31/21 Calculation of tangible equity Total Shareholders' equity (GAAP) $607 $646 $675 $727 $769 $789 Less: Goodwill and other intangibles (14) (23) (23) (23) (22) (22) Tangible shareholde
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