Independent Bank Corp. · NASDAQ:INDB
Independent Bank — Sandler O'Neill + Partners 2019 East Coast Financial Services Conference
21 slides from Independent Bank's conference presentation, Nov 14, 2019
Slide 1: Sandler O'Neill + Partners 2019 East Coast Financial Services Conference
Sandler O'Neill + Partners 2019 East Coast Financial Services Conference November 14, 2019 Christopher Oddleifson - Chief Executive Officer Robert Cozzone - Executive Vice President and Chief Operating Officer
Slide 2: Who We Are
Who We Are • Main Sub: Rockland Trust • Market: Eastern Massachusetts • Loans: $8.9B • Deposits: $9.3B • $AUA: $4.5B • Market Cap: $2.9B • Nasdaq: INDB (2)
Slide 3: Key Messages
Key Messages • Operating earnings and returns at record levels • Healthy loan and core deposit originations • Growing Investment Management business • Expanding footprint in growth markets • Proven integrator of acquired banks • Tangible book value steadily growing * • Improving operating efficiency
Slide 4: Recent Accomplishments
Recent Accomplishments • Six consecutive years of record operating earnings** • Fully integrated Blue Hills Bancorp acquisition • Increased presence in Worcester County • Capitalizing on expansion moves in vibrant Greater Boston market • Reached $4.5B in Assets Under Administration • Growth initiati
Slide 5: Expanding Company Footprint
Expanding Company Footprint % of Market Share INDB Dep. Plymouth County Rank 2019 1 24.1% 33% Norfolk County Rank 2019 3 6.1% 19% Barnstable County (Cape Cod) Rank 2019 4 10.9% 10% Bristol County Rank 2019 7 7.2% 9% Middlesex County Rank 2019 22 1.0% 7% Suffolk County Rank 2019 9 1.2% 14% Dukes Coun
Slide 6: Strong Fundamentals Driving Performance
Strong Fundamentals Driving Performance • Operating ROA: 1.7% (YTD'19)** Net Income ($Mil) $121.6 $117.7 +26% CAGR • Operating ROE: 12.6% (YTD'19)** $115.0 $4.5 $4.40 $87.2 $3.5 $90.0 $76.6 $3.64 • Robust customer activity $3.19 $65.0 $2.90 $2.5 • Strong core deposit base $40.0 $1.5 $15.0 $0.5 • Fee
Slide 7: Vibrant Commercial Lending Franchise
Vibrant Commercial Lending Franchise Total Loans $8.9B • Long-term CRE/C&I lender Avg. Yield: 4.93% 3Q 2019 • Strong name recognition in local markets • Increased small business focus Home Eq • Opened LPO in Worcester 13% • Added senior leaders from competitors Resi Mtg 18% • Growing in sophisticati
Slide 8: Commercial Diversification
Commercial Diversification Total Commercial Real Estate Portfolio Total C&I Loan Portfolio $4.5B as of 9/30/2019 $1.4B as of 9/30/2019 All Other (12 Sectors): 14.6% All Other 15.8% Accommodation and food services: 4.3% Retail Trade: Residential - Related Administrative Support and 17.4% 28.3%* Waste
Slide 9: Low Cost Deposit Base
Low Cost Deposit Base Total Deposits $9.3B • Sizable demand deposit component 3Q 2019 • <1% of HH's are CD only CDs 16% Demand • Valuable source of liquidity Deposits 30% • Relationship-based approach Savings/Now 34% Money Market • Expanded digital access 20% • Growing commercial base Core Deposits
Slide 10: Investment Management: Transformed Into High Growth Business
Investment Management: Transformed Into High Growth Business AUAs ($ Mil.) CAGR +17% • Successful business model $4,529 • Growing source of fee revenues $3,613 $2,919 $3,486 • Strong feeder business from Bank 2016 2017 2018 3Q19 • Expanding investment center locations • Adding experienced profession
Slide 11: Asset Quality: Well Managed
Asset Quality: Well Managed NPLs Other Consumer 0.2% • Disciplined underwriter CRE 3.8% Small Business 0.3% Home Equity 15.5% • Low loss rates • High average FICOs and low C&I 54.2% average LTVs in consumer book Residential 26.0% NPLs Net Charge-offs (Recoveries) ($Mil.) ($Mil.) 6bps $57.4 $60.0 $49
Slide 12: Strong Capital Position
Strong Capital Position Cash Dividends Declared Per Share • Strong internal capital generation $1.52 $1.50 $1.28 $1.32 $1.16 • History of healthy dividend increases $1.00 • TBV rising even with multiple acquisitions $0.50 • No storehousing of excess capital $0.00 • Share buyback program in place 201
Slide 13: Blue Hills Bancorp Acquisition - April 1, 2019
Blue Hills Bancorp Acquisition - April 1, 2019 • Combines two profitable, growing banks • Expands presence in attractive Greater Boston and Nantucket markets • Provides #1 deposit share in MA of any bank HQ'd there • Accretive to both earnings and TBV per share • Fully absorbs added costs of crossin
Slide 14: Building Franchise Value: Disciplined Acquisitions
Building Franchise Value Disciplined Acquisitions Slade’s Ferry Benjamin Central Mayflower Peoples Federal Bancorp Franklin Bancorp Bancorp Bancorp Bancshares Mar '08 Apr '09 Nov '12 Nov '13 Feb '15 $630mm Assets $994mm Assets $537mm Assets $243mm Assets $640 mm Assets $411mm Deposits $701mm Deposit
Slide 15: Major Opportunities in Acquired Bank Markets
Major Opportunities in Acquired Bank Markets: Capitalizing on Rockland Trust Brand Investment Commercial Banking Management • Sophisticated products • $4.5 billion AUA • Expanded capacity • Wealth/Institutional • In-depth market • Strong referral knowledge network Acquired Bank Customer Bases (15) R
Slide 16: Sustaining Business Momentum
Sustaining Business Momentum Business Line Focal Points • Expand Market Presence/Recruit Seasoned Lenders • Grow Client Base • Expand Specialty Products, e.g. ABL, Leasing • Lender Development Programs • Continue to Drive Household Growth • Expand Digital Offerings • Optimize Branch Network • Capita
Slide 17: Optimizing Retail Delivery Network
Optimizing Retail Delivery Network Recent optimization decisions include: • Shifting branch distribution • Closed/consolidated 4 • Opened 1 • Added 14: Milford National Acquisition (3 branches-Nov 2018) and Blue Hills Acquisition (11 branches-June 2019) • Added 2 Drive Up ATMs and 2 walk-up ATMs • E
Slide 18: INDB Investments Merits
INDB Investments Merits • High quality franchise in attractive markets • Consistent, strong financial performance • Strong organic business volumes • Growing brand recognition • Capitalizing on in-market consolidation opportunities • Diligent stewards of shareholder capital • Grounded management tea
Slide 19: Appendix A
Appendix A 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 Equity to Tangible Assets, a non-GAAP measur
Slide 20: Appendix B
Appendix B 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 as of the time periods indicated: 2016 2017 2018 YTD19 (Dollars in thousands, except per share data) Net income avai
Slide 21: Contact and forward-looking statements
NASDAQ Ticker: INDB www.rocklandtrust.com Mark Ruggiero – CFO & Chief Accounting Officer Shareholder Relations: (781) 982-6737 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
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