Independent Bank Corporation · NASDAQ:IBCP
Independent Bank — Shareholder Meeting (April 2013)
38 slides from Independent Bank's shareholder meeting presentation, Apr 23, 2013
Slide 1: Independent Bank Corporation 2013 Annual Meeting of Shareholders
Independent Bank Corporation 2013 Annual Meeting of Shareholders *
Slide 2: Today's Agenda
Today’s Agenda Introductions Voting upon the matters listed in the Company’s 2013 Proxy Statement Presentation by IBC President and CEO and CFO Question and answer session *
Slide 3: IBC Board of Directors
IBC Board of Directors Donna J. Banks, Ph.D. William J. Boer Jeffrey A. Bratsburg Stephen L. Gulis Jr. Terry L. Haske Robert L. Hetzler William B. Kessel Michael M. Magee Jr., Executive Chairman James E. McCarty, Lead Outside Director Charles A. Palmer Charles C. Van Loan *
Slide 4: IBC Executive Management
IBC Executive Management Michael M. Magee Jr. – Executive Chairman William B. Kessel – President and Chief Executive Officer Robert N. Shuster – EVP/Chief Financial Officer Mark L. Collins – EVP/General Counsel Stefanie M. Kimball – EVP/Chief Risk Officer Dennis J. Mack – EVP/Chief Commercial Lendin
Slide 5: 2013 Annual Meeting of Shareholders
2013 Annual Meeting of Shareholders Secretary for the meeting (Robert Shuster) Inspectors of election (Martha Blandford/Scott Petersen) Record date: February 25, 2013 Approximate mailing date of Proxy Statement: March 20, 2013 Shares entitled to vote: 9,484,756 Determination of quorum Voting on prop
Slide 6: Proposal #1 Election of Directors
Proposal #1 Election of Directors Donna J. Banks Jeffrey A. Bratsburg Charles C. Van Loan * William J. Boer
Slide 7: Proposal #2 Ratification of Auditors
Proposal #2 Ratification of Auditors Crowe Horwath LLP has served as IBC’s independent registered public accounting firm since 2005 Crowe Horwath was founded in 1942 and is one of the ten largest accounting and consulting firms in the U.S. IBC is served primarily by Crowe Horwath’s Grand Rapids, Mic
Slide 8: Proposal #3 Advisory Vote on Executive Compensation
Proposal #3 Advisory Vote on Executive Compensation The Board has solicited a non-binding advisory vote from our shareholders to approve the compensation of our executives as described in our proxy materials. *
Slide 9: Proposal #4 Amendment of Long-Term Incentive Plan
Proposal #4 Amendment of Long-Term Incentive Plan Consider and vote upon a proposal to amend the Company’s Long-Term Incentive Plan to make an additional 500,000 shares of the Company’s common stock available for issuance under the Plan as described in our proxy materials. *
Slide 10: IBC Overview
IBC Overview 2012 En29 Independent Bank
Slide 11: Safe Harbor Statement
Safe Harbor Statement This presentation may contain certain forward-looking statements within the meaning of the Private Securities Reform Act of 1995. Forward-looking statements include expressions such as “expects,” “intends,” “believes” and “should” which are statements of belief as to expected o
Slide 12: Presentation Summary
Presentation Summary 2012 Overview (positive momentum and a year of change) Current economic environment Banking and regulatory environment Goals for 2013 and beyond First quarter 2013 – summary of results *
Slide 13: 2012 Summary
2012 Summary 2012 – Positive Momentum Four consecutive quarters of profitability Strengthened balance sheet (capital, asset quality and core deposits) 2012 – A Year of Change Sale of branches Consolidation or closure of branches Creation of Chief Risk Officer position and creation of Enterprise Risk
Slide 14: Sale of Branches
Sale of Branches Es2¥ Independent Bank 2013 Annual Shareholders Meeting 14
Slide 15: Consolidation of Branches
Consolidation of Branches Independent Bank 2013 Annual Shareholders Meeting 15
Slide 16: Economic Environment
Economic Environment Much uncertainty Unemployment data Real estate values (recovering, but Michigan generally at a slower pace than U.S.) Economic growth (GDP) and inflation (CPI) Interest rate environment – continued low interest rates challenging for banks *
Slide 17: Banking and Regulatory Environment
Banking and Regulatory Environment Revenue growth challenges (net interest income and non-interest income) Managing costs through economic cycle Competition (impact on loan growth and margins) Significant new regulations and compliance burden Potential changes to bank capital requirements (Basel III
Slide 18: 2013 and Beyond
2013 and Beyond 2013 – A Year of Development Our community bankers structure and other employees in new roles Retention of existing customers and expanding new products and services Continued efforts to acquire new customers (both commercial and consumer) Electronic delivery channels Financial Goals
Slide 19: First Quarter 2013 Results
First Quarter 2013 Results Fifth consecutive quarter of profitability Reported net income of $5.8 million (compared to $3.5 million in 2012) and net income applicable to common stock of $4.7 million, or $0.27 per diluted share (compared to $2.4 million or $0.07 per diluted share in 2012) Continued i
Slide 20: IBC Financial Overview
IBC Financial Overview 2012 En29 Independent Bank
Slide 21: Net Income (Loss) Applicable to Common Stock
Net Income (Loss) Applicable to Common Stock Note: 2010 includes a one-time gain of $18.1 million on the extinguishment of debt *
Slide 22: Net Income (Loss) Per Share Applicable to Common Stock
Net Income (Loss) Per Share Applicable to Common Stock *
Slide 23: Total Assets
Total Assets 2008 to 2011 decline due primarily to efforts to preserve regulatory capital ratios * 2012 decline due primarily to branch sale
Slide 24: Select Components of Total Assets
Select Components of Total Assets Although total loans have been declining, during 2012, the Bank made new loans or renewed existing loans totaling $860 million Includes $124 million of deposits at the Federal Reserve Bank earning 0.25% *
Slide 25: Bank Regulatory Capital Ratios
Bank Regulatory Capital Ratios * Minimum for well-capitalized is 5% Minimum for well-capitalized is 10%
Slide 26: Deposit Growth and 2012 Accomplishments
*Excludes brokered certificates of deposit Accomplishments in 2012 Core deposits increased $107 million, or 6.5% Strategy – continue targeting consumer and business customer checking/transaction accounts * Deposit* Growth Note: 2010 and 2011 totals exclude the branches that were sold in December 201
Slide 27: Net Interest Margin
Net Interest Margin The decline in the net interest margin during 2012 was caused by a planned build-up of lower yielding short-term investments to augment liquidity and provide funding for the Branch Sale. In addition, the current low interest rate environment is adversely impacting the net interes
Slide 28: Analysis of Net Interest Income
Analysis of Net Interest Income The decline in net interest income since 2009 was driven by a decrease in average interest earning assets and a drop in the net interest margin. *
Slide 29: Non-Interest Income
Non-Interest Income 2010 includes one-time gain on extinguishment of debt of $18.1 million * 2008 includes net securities losses of $15.0 million
Slide 30: Non-Interest Expenses
Non-Interest Expenses 38% decline from 2009 peak *
Slide 31: Non-Performing Loans
Non-Performing Loans* * * Excludes loans that are classified as “troubled debt restructured” that are still performing 74% decline since 2008 peak
Slide 32: Provision for Loan Losses
Provision for Loan Losses 93% decline from 2009 peak *
Slide 33: Net Loan Charge-offs
Net Loan Charge-offs 74% decline from 2009 peak *
Slide 34: Allowance for Loan Losses
Allowance for Loan Losses Dollars in 000's $90,000 4.00% $80,000 3.50% 70,000 570.00 3.00% $60,000 + 250% $50,000 2.00% $40,000 se79is 150% $30,000 -— Fea $58.84 eeeee + | Pre] 1.00% $10,000 050% $0 + 0.00% 2008 2009 2010 2011 201 I Allowance for Loan Losses PrP ALL as a% of Loans E3 Independent Ban
Slide 35: First Quarter 2013 Summary
First Quarter 2013 Summary Net income applicable to common stock of $4.7 million in the first quarter of 2013 compared to $2.4 million in the first quarter of 2012 Improvement in operating results due to declines in the provision for loan losses and non-interest expenses partially offset by decrease
Slide 36: Question & Answer Period
William B. Kessel President and Chief Executive Officer Robert N. Shuster Executive Vice President and Chief Financial Officer Question & Answer Period *
Slide 37: Voting Results
Voting Results Shares entitled to vote: 9,484,756 Proposal #1 – Election of Directors Proposal #2 – Ratification of Auditors Proposal #3 – Advisory (Non-binding) Vote on Executive Compensation Proposal #4 – Amendment of Long-Term Incentive Plan *
Slide 38: Thank you
Thank you for attending. revy Es29 Independent Bank 2013 Annual Shareholders Meeting 38