Independent Bank Corp. · NASDAQ:INDB
Independent Bank — KBW Regional Bank Conference 2015
24 slides from Independent Bank's conference presentation, Feb 25, 2015
Slide 1: KBW Regional Bank Conference
KBW Regional Bank Conference February 25, 2015 Christopher Oddleifson – Chief Executive Officer Robert Cozzone – Chief Financial Officer and Treasurer Gerard Nadeau – Executive Vice President Commercial Lending
Slide 2: Who We Are
(2) Who We Are • Main Sub: Rockland Trust • Market: Eastern Massachusetts • Loans: $5.5 B * • Deposits: $5.6 B * • $AUA: $2.5 B • Market Cap: $1.0 B • NASDAQ: INDB * proforma to include amounts related to the acquisition of Peoples Federal Bancshares, Inc.
Slide 3: Key Messages
(3) Key Messages • Track record of consistent, solid performance • Expanding/strengthening footprint and market share • Growing fee revenue sources • Strong capital/TBV steadily rising • Disciplined risk management culture • Raising the bar on operational excellence • Well-positioned for rising rate
Slide 4: Company Footprint
(4) Company Footprint Rank 2014 1 25.2% 41% Rank 2014 5 5.0% 19% Rank 2013 3 10.4% 12% Rank 2014 6 7.8% 12% Rank 2014 19 1.2% 10% Rank 2014 15 0.3% 5% Rank 2014 32 0.3% 1% Bristol County Worcester County Suffolk County Middlesex County Norfolk County % of INDB Dep.Share Barnstable County (Cape Cod)
Slide 5: 2014 Accomplishments
(5) 2014 Accomplishments • Record operating EPS performance in 2014 • Excellent commercial loan and core deposit growth • Strong household growth rate • Capitalizing on expansion moves in Greater Boston • Announced agreement to acquire Peoples Federal Bancshares, Inc. of Boston • Keeping pace with d
Slide 6: Strong Fundamentals Driving Performance
(6) Strong Fundamentals Driving Performance 45.5 47.1 55.2 59.9 2011 2012 2013 2014 Operating Earnings ($ Mil.) +10% CAGR Diluted EPS $2.12 $2.16 $2.39 $2.50 • Robust comm’l loan growth • Core deposits up to 87% • Inv. mgmt. revenues rising • Positive operating leverage • Solid asset quality vs. pee
Slide 7: Robust Commercial Loan Generation
(7) Robust Commercial Loan Generation ($Mil.) 651 850 945 2011 2013 2014 Comm’l Loan Originations +13% CAGR 12/14 vs. 12/13 12/14 vs. 9/14 ↑ 7% ↑ 2% annualizedComm’l Loan $ Bal. Organic Growth Strong C&I Loan Growth ($ Bal.-mil.) 576 688 784 861 2011 2012 2013 2014 +14% CAGR Yr. end
Slide 8: Attractive Balance Sheet Profile - 4Q 2014
(8) Attractive Balance Sheet Profile - 4Q 2014 Sec./ST Inv. 14% Resi Mtges 9% Home Eq 15% Comm'l Loans 62% EARNING ASSETS $5.7 B AVG. YIELD: 3.76% Focused On Containing Deposit Costs Shift Towards Higher Yielding Assets Demand Deposits 28% Money Market 19% Savings/Now 40% CDs 13% TOTAL DEPOSITS $5.2
Slide 9: Investment Management: High Priority Growth Business
(9) Investment Management : High Priority Growth Business • Successful business model • Growing source of fee revenues • Strong feeder business from Bank • Expanding investment center locations • Cross-sell opportunity in acquired bank markets $ mil. 2006 2014 Assets under Admin. 816$ + 202% 2,463$
Slide 10: Prudent Balance Sheet Management: Positioned for Rising Rates
(10) Prudent Balance Sheet Management: Positioned for Rising Rates -5% 0% 5% 10% 15% 20% Year 0 Year 1 Year 2 % Inc re a se o n N e t In te res t Inc o m e Interest Rate Sensitivity Down 100 Up 200 Up 400 Flat Up 200
Slide 11: Asset Quality: Well Managed
(11) Asset Quality: Well Managed 29.0 28.8 34.7 27.5 2011 2012 2013 2014 NPLs ($ Mil.) 9.5 9.7 8.8 8.5 4.8 2011 2012 2013 2014 Net Chargeoffs ($ Mil.) customer fraud 14.5 customer fraud NPL/Loan % 0.76% 0.64% 0.73% 0.55% Peers 1.52%* Loss Rate 26bp 36bp 19bp 18bp Peers 15bp*
Slide 12: Strong Capital Position
(12) Strong Capital Position (period end) 8.6% 8.7% 8.6% 8.8% 2011 2012 2013 2014 6.8% 6.6% 6.9% 7.4% 2011 2012 2013 2014 Tier 1 Leverage % Tangible Common % $15.27 $16.12 $17.18 $19.18 2011 2012 2013 2014 Tangible Book Value • Strong internal capital generation • No storehousing of excess capital •
Slide 13: 2015 Outlook: Key Expectations
(13) 2015 Outlook: Key Expectations Loans + 4-6% organic Led by commercial segment Deposits + 3-4% organic Emphasis on core deposits Net Int. Mar. % High 3.30s% Continued pressure on loan yields Non Int. Inc. + 3-4% organic Ongoing core customer growth Non Int. Exp. + 3-4% organic Selective franchis
Slide 14: Sustaining Business Momentum
(14) Sustaining Business Momentum Business Line • Expand Market Presence • Grow C&I Client Base • Expand Specialty Products, e.g. ABL Commercial • Continue to Drive Household Growth • Expand Electronic Banking Platform • Optimize Branch Network Retail Delivery • Capitalize on Strong Market Demograph
Slide 15: INDB Acquires Peoples Federal Bancshares, Inc.
(15) INDB Acquires Peoples Federal Bancshares, Inc. (NASDAQ – PEOP) • Strengthens position in coveted Boston market • Financially attractive • $0.02 – $0.03 annual accretion to earnings per share • Modestly accretive to tangible book value per share • Healthy, profitable bank with deep customer rela
Slide 16: Overview of Peoples Federal Bancshares, Inc.
(16) Overview of Peoples Federal Bancshares, Inc. • Peoples Federal Bancshares, Inc. • Ticker: PEOP • Founded in 1888 • Operates 8 branches in the Greater Boston area • Headquartered in Boston, MA • 4 Branches in the City of Boston Financial Highlights * Assets: $597mm Cost of Deposits: 0.41% Gross
Slide 17: PEOP Acquisition Enhances Presence in Greater Boston
(17) PEOP Acquisition Enhances Presence in Greater Boston • First retail locations in Boston • Complements recent commercial lending and IMG office opening in downtown Boston • Solidifies prior investments North and West of the city of Boston • Capitalizes on long-established commercial lending pres
Slide 18: Building Franchise Value: Disciplined Acquisitions
(18) Building Franchise Value Disciplined Acquisitions Deal Value: $16.9MM 11% Core Dep. Premium* Falmouth Bancorp Jul ‘04 $140mm Assets $137mm Deposits 4 Branches Deal Value: $102.2 MM 17% Core Dep. Premium* Slade’s Ferry Bancorp Mar ‘08 $630mm Assets $411mm Deposits 9 Branches Deal Value: $84.5MM
Slide 19: Major Opportunities in Acquired Bank Markets
(19) Major Opportunities in Acquired Bank Markets: Capitalizing on Rockland Trust Brand Investment Management Commercial Banking Retail/ Consumer • $2.5 billion AUA • Wealth/Institutional • Strong referral network • Sophisticated products • Expanded presence • In depth market knowledge • Award winni
Slide 20: Augmenting Organic Growth
(20) Augmenting Organic Growth • Expanding asset-based lending capability • Streamlining of mobile banking app • Launching of a new and improved RocklandTrust.com website • Grand re-opening of modern branch in Somerville • Tax credit community lending programs • Attracting senior talent from within
Slide 21: Raising the Bar on Operational Excellence
(21) Raising the Bar on Operational Excellence Business Intelligence/Knowledge Management • Further leverage analytics to drive business results • Grow and deepen quality customer relationships • Better align sales, marketing, and relationship management Process Improvement • Focused on cost and qua
Slide 22: Attentive to Shareholder Returns
(22) Attentive to Shareholder Returns $0.76 $0.84 $0.88 $0.96 2011 2012 2013 2014 Cash Dividends Declared Per Share
Slide 23: INDB Investment Merits
(23) INDB Investment Merits • High quality franchise in attractive markets • Strong organic business volumes • Operating platform that can be leveraged further • Capitalizing on in-market consolidation opportunities • Diligent stewards of shareholder capital • Grounded management team • Positioned t
Slide 24: NASDAQ Ticker: INDB
(24) NASDAQ Ticker: INDB www.rocklandtrust.com Robert Cozzone – CFO & Treasurer Shareholder Relations: (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