Independent Bank Corp. · NASDAQ:INDB
Independent Bank — Investor Presentation (September 2012)
29 slides from Independent Bank's investor presentation, Sep 5, 2012
Slide 1: September 5, 2012
Exhibit 99.1 September 5, 2012 Christopher Oddleifson President & Chief Executive Officer Denis K. Sheahan Chief Financial Officer
Slide 2: Who We Are
• Main Sub: Rockland Trust • Market: Eastern Massachusetts • Loans: $4.0 B • Deposits: $4.1 B • $AUA: $2.0 B • Market Cap: $0.6 M • NASDAQ: INDB Who We Are
Slide 3: Key Messages
• Strong fundamentals driving solid performance • Robust growth from new and existing customers • Expanding footprint into attractive markets • Aggressively promoting brand and new products • Investing for growth in high priority businesses • Disciplined risk management culture • Strong tangible and
Slide 4: Company Footprint
Company Footprint* Source: SNL Financial; Deposit/Market Share data as of June 30, 2011 including pending transactions. (Includes Credit Unions) * Proforma to include the pending acquisition of Central Bancorp. % of INDB Dep. Rank 16.7% 42% Rank 3.6% 17% Rank 10.2% 15% Rank 5.2% 13% Rank 1.0% 12% Ra
Slide 5: Recent Accomplishments
• Excellent loan and core deposit growth • Expanded breadth and depth of commercial franchise • Households grew by 7% in 1H12 • Investment Management growth: Rev. 8% in 1H12 • All capital ratios and TBV rose in past 12 months • Fitch upgrade and affirming of long-term issuer rating • New Market Tax
Slide 6: Strong Fundamentals Driving Performance
Strong Fundamentals Driving Performance • Excellent loan growth • Core dep. up to 84% • Growing wealth mgmt. • Solid asset quality vs. peers • Strong capital • Core ROA near 1% Diluted EPS $1.43 $1.90 $2.12 $1.02 $0.99 +13% +44% * Loan fraud amounting to $4.0 million pre-tax 23.8 Operating Earnings
Slide 7: Robust Core Business Generation
Robust Core Business Generation ($ Mil.) +11% CAGR +8% CAGR 6/12 vs. 6/12 vs. 7% 13% annualized 23% 22% annualized Comm’l Loan $ Bal. Home Equity $ Bal. Comm’l Loan Originations Consumer Loan Originations (Resi’s & Home Eq.)
Slide 8: Strong Commercial and Industrial Loan Growth
Strong Commercial and Industrial Loan Growth ( $ Bal. - mil. ) Yr. end +27.0% CAGR (24.6% ex acquisitions) Adding High Quality Corporate Customers
Slide 9: Attractive Balance Sheet Profile
Sec./ST Inv. 14% Resi Mtges 9% Home Eq 17% Other 1% Comm'l Loans 59% Demand Deposits 26% Money Market 20% Savings/Now 38% CD's 16% Attractive Balance Sheet Profile (2Q12) Very Focused On Containing Deposit Costs Shift Towards Higher Yielding Assets TOTAL DEPOSITS $4.1 B AVG. COST: 0.28% EARNING ASSE
Slide 10: Net Interest Margin
Net Interest Margin Fairly steady over various rate cycles Current low rate environment adding pressure
Slide 11: Investment Management – High Priority Growth Business
Investment Management – High Priority Growth Business • Growing source of fee revenues • Strong feeder business from bank • Expanded investment offerings • Professionally managed $ mil. 2Q12 Assets under Admin. $ + 145% 2,001 $ Revenues 6.1 $ + 121% 13.5 $ (2011) 7.4 $ (1H12)
Slide 12: Asset Quality – Well Managed
36.2 23.1 29.0 12.0 14.8 9.5 4.0 customer fraud Asset Quality – Well Managed NPL/Loan % 1.07% 0.65% 0.76% 0.79% Peers 3.31%* Loss Rate 38bp 43bp 26bp 52bp Peers 69bp* Yr. end * Source: FFIEC Peer Group 2; $3-10 Billion in Assets, March 31, 2012 Incl. 90 days + overdue 10.0 31.3 2Q12 NPL’s ($ Mil.) 6
Slide 13: Strong Loan Loss Reserves
Strong Loan Loss Reserves Reflects Ben Franklin loans acquired at FV 0.00% 0.20% 0.40% 0.60% 0.80% 1.00% 1.20% 1.40% 1.60% Reserves/Loans Net Chargeoffs/Avg. Loans (annualized) Reserves a Healthy Multiple of Loss Rate
Slide 14: Strong Capital
Strong Capital (1) Includes tax deductibility of certain goodwill • Strong internal capital generation • No external capital raising • No dividend cuts (Year end) Tier 1 Leverage % Tangible Common % (1) Tangible Book Value (1)
Slide 15: Attentive to Shareholder Returns
Attentive to Shareholder Returns Cash Dividends Per Share
Slide 16: Business Opportunities
Business Opportunities • Expanded Commercial Presence (Providence, Waltham) • Asset-Based Lending • Marketing • Mobile Banking • Image ATMs Investing for Future Growth
Slide 17: Sustaining Business Momentum
Sustaining Business Momentum Business Line Focal Points • Expand Market Presence • Grow C&I Client Base • Expand Specialty Products, e.g. ABL • Continue to Drive Household Growth • Expand Electronic Banking Platform • Optimize Branch Network • Capitalize on Strong Market Demographics • Target COI Op
Slide 18: Rockland Trust is the #1 ranked New England bank in Customer Satisfaction
Rockland Trust is the #1 ranked New England bank in Customer Satisfaction!
Slide 19: Central Bancorp (CEBK) Acquisition Strategic Rationale
• Attractive financial return – Highly accretive to earnings: +7% in 2013 – IRR of 15.4% – Modest dilution to TBV and TCE/TA with short earn-back period • Significantly increases footprint in eastern Middlesex County, a natural market extension with attractive demographics – Part of the Boston MSA –
Slide 20: Winning Businesses – Major Opportunities
Investment Management Commercial Banking Retail/ Consumer • $2 Bil. AUA • Wealth/Institutional • Sophisticated Products • Expanded presence • Knowledgeable bankers Central Bancorp. Customer Base Capitalizing on Rockland Trust Brand • Top-rated customer satisfaction • Electronic banking • Home equity
Slide 21: Disciplined Acquisitions Building Franchise Value
$336mm Deposits $135mm Loans 16 Branches $158mm Assets $137mm Deposits 4 Branches $610mm Assets $409mm Deposits 9 Branches $998mm Assets $653mm Deposits 11 Branches $521mm Assets $333mm Deposits 10 Branches Disciplined Acquisitions Building Franchise Value All Acquisitions Immediately Accretive Deal
Slide 22: 2012 Outlook – Key Expectations
2012 Outlook – Key Expectations Loan Growth +6 – 7% Led by commercial and home equity Deposits +5 – 6% Continued core deposit growth Net Chargeoffs $15 – 17 MM Provision $16 – 18 MM 1H margin of 3.81% Lower over 2H Non-Interest Inc. Flattish Invest. mgmt. , Mort. rev. NIE + 2 – 3% Selective growth i
Slide 23: INDB – Investment Merits
• High quality franchise in attractive markets • Strong on-the-ground business volumes • Operating platform that can be leveraged further • Investing for growth in competitive strengths • Balance sheet equipped to deal with uncertainty • Grounded management team • Aligned with shareholders – insider
Slide 24: NASDAQ Ticker: INDB
NASDAQ Ticker: INDB www.rocklandtrust.com Denis Sheahan - CFO Shareholder Relations: Jennifer Kingston (781) 878-6100 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
Slide 25: Independent Bank Corp. – Parent of Rockland Trust
INDEPENDENT BANK CORP. Parent of Rockland Trust
Slide 26: Overview of Central Bancorp
• Central, founded in 1915, is a $521 million asset bank headquartered in the affluent Middlesex County suburb of Boston, MA • Central operates 10 branches across Middlesex County with top 10 deposit market share in each city ¹ • Stock symbol: CEBK • Financial Profile: – Loans: $421mm – Deposits: $3
Slide 27: Attractive Financial Transaction
• 7% E.P.S. accretive in 2013, – 8% thereafter¹ • IRR of 15.4% • 5.8% TBV dilution and short earn-back period of 4.75 years • Strong pro forma capital levels at close with TCE / TA earn-back period of 2.25 years • TCE / TA: 6.5% • Adjusted TCE / TA²: • Tier 1 Leverage: 8.0% • Tier 1 Capital: 10.4% •
Slide 28: Loan Mix
Loan Mix Note: GAAP financial data as of June 30, 2012 ($ in thousands) Commercial & Industrial $705,433 17.7% $780 0.2% $706,213 15.8% Multifamily & CRE 1,912,563 48.0% 154,090 31.4% 2,066,653 46.3% 1-4 Family Residential 389,053 9.8% 323,897 66.1% 712,950 15.9% Consumer & Other 973,740 24.5% 11,06
Slide 29: Deposit Mix
Deposit Mix Note: GAAP financial data as of June 30, 2012 ($ in thousands) Demand Deposits $1,070,279 26.2% $47,039 13.2% $1,117,318 25.2% Savings, MMDA & Int Checking 2,368,319 58.1% 163,403 45.8% 2,531,722 57.1% Retail CDs 390,242 9.6% 63,980 17.9% 454,222 10.2% Jumbo CDs 249,293 6.1% 82,478 23.1%
Independent Bank — Investor Presentation (September 2012) on 6ix