Independent Bank Corporation · NASDAQ:IBCP
Independent Bank — Q1 2016 Earnings Presentation
21 slides from Independent Bank's earnings presentation, 2016
Slide 1: Independent Bank Corporation 1st Quarter 2016
Independent Bank Corporation INDEPENDENT BANK 1* Quarter 2016 a ey
Slide 2: Cautionary Note Regarding Forward-Looking Statements
Cautionary Note Regarding Forward-Looking Statements This presentation contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, including statements of goals, intentions, and expectations as to future trends, plans, events, or results of Indepen
Slide 3: Agenda
Agenda Formal Remarks. – William B. (Brad) Kessel, President and Chief Executive Officer – Robert N. Shuster, Executive Vice President and Chief Financial Officer Question and Answer session. Closing Remarks. Note: This presentation is available at www.IndependentBank.com in the Investor Relat
Slide 4: Financial Summary
Financial Summary 1Q’16 4Q’15 3Q’15 2Q’15 1Q’15 Diluted EPS $ 0.19 $ 0.25 $ 0.22 $ 0.24 $ 0.16 Income before taxes 6,057 8,251 7,325 8,243 5,561 Net income 4,100 5,570 5,047 5,619 3,781 Return on average assets 0.68% 0.93% 0.86% 0.98% 0.67% Return on average equity 6.70% 8.80% 7.84% 8.86% 6.05% Tota
Slide 5: 1Q 2016 Financial Highlights
1Q 2016 Financial Highlights Income Statement • Net income of $4.1 million, or $0.19 per diluted share. • Net interest income of $19.8 million, up $1.7 million, or 9.2%, from year ago quarter. • $0.5 million credit loan loss provision. • Gains on mortgage loans of $1.6 million, down $0.5 million, or
Slide 6: Our Michigan Markets
Our Michigan Markets Since 2012, substantial changes have been implemented to streamline and optimize our branch delivery network. Significant market presence and opportunity to gain market share in attractive Michigan markets. Michigan’s unemployment rate was 4.8% in March 2016 (1.0% lower th
Slide 7: Our Markets – Regional
Our Markets – Regional Region Cities Branches 3/31/16 % of 3/31/16 % of 3/31/15 3/31/15 Loans(1) Loans(1) Deposits(3) Deposits(3) Loans(2) Deposits(3) East / “Thumb” Bay City / Saginaw 23 $301 22% $727 35% $293 $732 West Grand Rapids / Ionia 22 532 39% 689 33% 468 618 Central Lansing 11 194 14% 317
Slide 8: Low Cost Deposit Franchise
Low Cost Deposit Franchise Focused on Core Deposit Growth Deposit Composition – 3/31/16 Deposit Highlights $2.15 billion in total deposits at 3/31/16. − Substantially all core funding. Non-interest Bearing − $1.70 billion of transaction 31% accounts (79.1% of total deposits). Time 19% Total depo
Slide 9: Diversified Loan Portfolio
Diversified Loan Portfolio Focused on High Quality Growth Loan Composition – 3/31/16 Lending Highlights Eight consecutive quarters of net loan growth. Held for Sale Payment Plan 2% $1.57 billion in total loans at 3/31/16 (including Receivables 2% $28.0 million of loans held for sale). Installmen
Slide 10: Net Interest Margin/Income
Net Interest Margin/Income Net Interest Margin (TE)(%) Highlights 4.00% 3.80% Interest rate sensitivity profile of the loan and securities portfolios, in combination 3.62% 3.61% 3.60% 3.56% 3.57% 3.58% 3.56% with a low cost core deposit base, positions us to benefit from a rising interest rate env
Slide 11: Net Interest Income and Net Interest Margin Details
Net Interest Income and Net Interest Margin Details Analysis of Linked Quarter Increase Summary – 1Q’16 net interest income of $19.763 million, up $410K from 4Q’15. – The linked quarter increase was due to a $485K increase in interest income and fees on loans and a $3K increase in interest income
Slide 12: Non-interest Income
Non-interest Income 2016 YTD Non-interest Income Breakout Highlights Sale of Loans $1.6M Diverse sources of non-interest income 21% Sale of Securities which totaled $7.8 million in 1Q’16. $0.2M Interchange $1.9M 2% Mortgage Servicing 1Q’16 total non-interest income represents 24% -$1.0M approxim
Slide 13: Non-interest Expense
Non-interest Expense Non-interest Expense ($ in Millions) Highlights Q1’16 non-interest expenses totaled $22.0 million (a decrease from Q4’15 and from Q1’15). Q1’16 compensation and benefits increased slightly (by $0.1 million) over Q1’15 due to higher performance based compensation that reflect
Slide 14: Investment Securities Portfolio
Investment Securities Portfolio Investment Portfolio by Type (3/31/16) Highlights High quality, liquid, diverse portfolio with short duration. Agency MBS, − 72% of the portfolio is AAA rated (or Corporate CMO & CMBS 9% 34% Private Label backed by the U.S. Government). Mortgage 3% Municipal − 2.0 y
Slide 15: Credit Quality Summary
Credit Quality Summary Non-performing Loans ($ in Millions) ORE/ORA ($ in Millions) $80.0 3.7% 3.8% 4.0% $45.0 $67.6 $39.4 $70.0 3.5% $40.0 $59.9 $34.0 $60.0 3.0% $35.0 2.3% $50.0 2.5% $30.0 $26.1 $40.0 $32.9 2.0% $25.0 1.3% $30.0 1.1% 1.0% 1.1% 1.5% $18.3 0.9% $20.0 $17.9 0.7% 0.7% $20.0 $15.2 $14.
Slide 16: Credit Cost Summary
Credit Cost Summary Provision for Loan Losses Loan Net Charge-Offs Allowance for Loan Losses $30.0 2.0% $40.0 2.50% 1.7% $70 4.0% 2.20% 3.7% $35.0 $25.0 3.5% 2.00% $60 1.5% 3.1% $30.0 $20.0 3.0% $50 $25.0 1.50% $15.0 1.39% 1.0% 2.5% 2.4% $20.0 $40 $10.0 1.00% 2.0% 0.5% 1.8% $15.0 0.5% $30 $5.0 0.58%
Slide 17: Classified Assets and New Default Trends
Classified Assets and New Default Trends Total Classified Assets Commercial Loan New Defaults $120 50.0% $40.0 $105 Classified ($M) $34.1 45.0% $35.0 $100 Classified / TCE + ALL 40.0% $30.0 45% 35.0% $80 $25.0 30.0% $59 $20.0 $60 25.0% $42 $39 $40 $40 20.0% $15.0 $11.7 $37 $10.1 $40 $29 $9.7 20% 15.
Slide 18: Troubled Debt Restructurings (TDRs)
Troubled Debt Restructurings (TDRs) 90% of TDRs are Current TDRs ($ in Millions) TDR Highlights Working with client base to maximize sustainable performance. The specific reserves allocated to TDRs totaled $10.7 million at 3/31/16. A majority of our TDRs are performing under their modified ter
Slide 19: 2016 Management Outlook
2016 Management Outlook Category Outlook Lending Continued growth Goal of high single digit % overall loan growth in 2016, primarily supported by increases in commercial loans, consumer loans and mortgage loans with payment plan receivables relatively stable. Expect much of this growth to occur in t
Slide 20: Strategic Initiatives
Strategic Initiatives Balance Sheet – Generate quality loan growth with continued focus on commercial and consumer installment lending as well as salable mortgage loans. May consider augmenting loan growth with selective in-market whole loan purchases. – Remain asset sensitive and positioned to be
Slide 21: Q&A and Closing Remarks
Q&A and Closing Remarks Question and Answer Session Closing Remarks Thank you for attending ! NASDAQ: IBCP 21