Attached files
| file | filename |
|---|---|
| 8-K - SANDLER O'NEILL INVESTOR PRESENTATION NOVEMBER 2017 - INDEPENDENT BANK CORP | sandleroneillinvestorprese.htm |
Sandler O'Neill
East Coast Financial Services Conference
November 16, 2017
Robert Cozzone – Chief Financial Officer
Exhibit 99.1
(2)
Who We Are
•Main Sub: Rockland Trust
• Market: Eastern Massachusetts
• Loans: $6.3B
• Deposits: $6.7B
• $AUA: $3.3B
• Market Cap: $1.9B
• NASDAQ: INDB
(3)
Key Messages
• Lengthy track record of consistent, solid performance
• Robust loan and core deposit activity
• Growing fee revenue sources, esp. Investment Mgmt.
• Expanding footprint in growth markets
• Tangible book value steadily growing *
• Steadily improving operating efficiency
• Disciplined risk management culture
• Proven integrator of acquired banks
• Deep, experienced management team
* See appendix A for reconciliation
(4)
Expanding Company Footprint
Source: SNL Financial; Deposit/Market Share data as of June 30, 2017
Market Share
% of
INDB Dep.
Plymouth County
Rank 2017
1 22.9% 39%
Norfolk County
Rank 2017
5 5 4.8% 19%
Barnstable County (Cape Cod)
Rank 2017
4 11.2% 13%
Bristol County
Rank 2017
6 7.8% 12%
Middlesex County
Rank 2017
19 1.1% 10%
Suffolk County
Rank 2017
18 0.3% 4%
Dukes County (MV)
Rank 2017
3 16.0% 2%
Worcester County
Rank 2017
30 0.3% 1%
(5)
Recent Accomplishments
• Four consecutive years of record operating earnings**
• Finalized acquisition of New England Bancorp, Inc. of
Cape Cod and Island Bancorp, Inc. of Martha's Vineyard
• Capitalizing on expansion moves in vibrant Greater
Boston market
• Growth initiatives – new commercial products, new
revitalized branches, expanded digital offerings, senior
talent adds, esp. Commercial Lending and Investment
Management
• Strong household growth rate
• Consistently high rankings in third-party surveys
**See appendix B for reconciliation
(6)
Strong Fundamentals Driving Performance
• Robust customer activity
• Core deposits at 90%
• Fee revenues rising
• Low funding costs
• Low credit loss rates
• TBV steadily growing*
• Solid returns
• Accretive acquisitions
* See appendix A for reconciliation
**See appendix B for reconciliation
+13% CAGR
+16% CAGR
(7)
Vibrant Commercial Lending Franchise
• Long-term CRE/ C&I lender
• Increased small business focus
• Strong name recognition in local markets
• Expanded market presence
• Experienced, knowledgeable lenders
• Growing in sophistication and capacity
• Commercial banker development program
• Disciplined underwriting
Total Loans
$6.3B
Avg. Yield: 4.17%
3Q 2017
(8)
Commercial Diversification
$3.5B as of 9/30/17 $859M as of 9/30/17
*Includes 1-4 Family, multifamily, Condos and Approved Land
**Non-Owner Occupied Commercial Real Estate divided by Total Capital
(9)
Low Cost Deposit Base
• Sizable demand deposit component
• Valuable source of liquidity
• Relationship-based approach
• Expanded digital access
• Growing commercial base
Total Deposits $6.7B
3Q 2017
(10)
Investment Management :
Transformed Into High Growth Business
• Successful business model
• Growing source of fee revenues
• Strong feeder business from
Bank
• Expanding investment center locations
• Adding experienced professionals
• Cross-sell opportunity in acquired bank
markets
+83%
+154%
(11)
Asset Quality: Well Managed
• Disciplined underwriter
• Low loss rates
• High average FICOs and low
average LTVs in consumer book
bps
bps
1bps 1bps
(12)
Strong Capital Position
* See appendix A for reconciliation
• Strong internal capital generation
• No storehousing of excess capital
• No external equity raising
• No dividend cuts
$1.04 $1.16
(13)
Well-Positioned for Rising Rates:
Prudent Balance Sheet Management
(14)
Sustaining Business Momentum
Business Line
• 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
• Capitalize on Strong Market Demographics
• Continue Strong Branch/Commercial Referrals
• Expand COI Relationships
• Continue Aggressive H.E. Marketing
• Scalable Resi Mortgage Origination Platform
Focal Points
(15)
Optimizing Retail Delivery Network
In the past twelve months we have:
• Utilized specialized analytics software/location model
• Shifted branch distribution
• Closed/consolidated 2
• Opened 1
• Relocated 1
• Redesigned 4
• Added 3 off-site ATMs
• Introduced SecurLOCK feature that provides the customer with control
to manage the security of their debit card (turn off/on, alerts, etc.)
• Implemented Apple, Android, and Samsung Pay
• Allowed for electronic scans of customer identification
• Enabled EMV compatible ATMs
(16)
Expanded Presence in Vibrant Greater Boston
Central Bancorp
$357MM Deposits
10 Branches – Nov. 2012
Investment Management
and Commercial Lending
Center
October 2013
Peoples Federal
Bancshares
$432MM Deposits
8 Branches – Feb. 2015
Long-Term Commercial Lender in Greater Boston
(17)
Island Bancorp Acquisition
Edgartown National Bank
• Profitable, well-managed community bank
• Provides first retail presence on M.V.
• Excellent complement to growing Cape Cod presence
• Financially attractive
• $0.03 - $0.04 EPS accretion expected in 2018
• Neutral to TBV
• Modest, low-risk deal
• Asset size: $200MM
• Transaction value: $29MM
• Closed in May ‘17
INDB: A Proven Integrator
(18)
Building Franchise Value
Disciplined Acquisitions
Deal Value: $84.5MM
2% Core Dep. Premium*
Benjamin
Franklin Bancorp
Apr '09
$994mm Assets
$701mm Deposits
11 Branches
Deal Value: $52.0MM
8% Core Dep. Premium*
Central
Bancorp
Nov '12
$537mm Assets
$357mm Deposits
10 Branches
Deal Value: $40.3MM
8% Core Dep. Premium*
Mayflower
Bancorp
Nov '13
$243mm Assets
$219mm Deposits
8 Branches
$276 mm Assets
$176mm Deposits
Net 1 Branch
Deal Value: $41.7MM
12% Core Dep. Premium*
All Acquisitions Immediately Accretive
*Incl. CDs <$100k
Deal metrics based on closing price and actual acquired assets
New England Bancorp
Nov '16
Deal Value: $102.2 MM
17% Core Dep. Premium*
Slade’s Ferry
Bancorp
Mar '08
$630mm Assets
$411mm Deposits
9 Branches
Peoples Federal
Bancshares
Feb '15
$640 mm Assets
$432mm Deposits
8 Branches
Deal Value: $141.8MM
10% Core Dep. Premium*
Island Bancorp
May '17
$194 mm Assets
$171mm Deposits
Net 4 Branches
Deal Value: $29MM
9% Core Dep. Premium*
(19)
Major Opportunities in Acquired Bank Markets:
Capitalizing on Rockland Trust Brand
Acquired
Bank
Customer
Bases
Investment Management
• $3.3 billion AUA
• Wealth/Institutional
• Strong referral network
Commercial Banking
• Sophisticated products
• Extended capacity
• In-depth market
knowledge
Retail/Customer
• Award-winning customer service
• Electronic/mobile banking
• Competitive home equity products
(20)
INDB Investments Merits
• High quality franchise in attractive markets
• Strong organic business volumes
• Growing brand recognition
• Operating platform that can be leveraged further
• Capitalizing on in-market consolidation opportunities
• Diligent stewards of shareholder capital
• Grounded management team
• Positioned to grow, build and acquire to drive long-term
value creation
(21)
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 measure, for the dates indicated:
2014 2015 2016 YTD17
(Dollars in thousands, except share and per share data)
Tangible common equity
Stockholders' equity (GAAP) $ 640,527 $ 771,463 $ 864,690 $ 931,224 (a)
Less: Goodwill and other intangibles 180,306 212,909 231,374 242,105
Tangible common equity 460,221 558,554 633,316 689,119 (b)
Tangible assets
Assets (GAAP) 6,364,318 7,209,469 7,709,375 8,052,919 (c)
Less: Goodwill and other intangibles 180,306 212,909 231,374 242,105
Tangible assets 6,184,012 6,996,560 7,478,001 7,810,814 (d)
Common shares 23,998,738 26,236,352 27,005,813 27,437,791 (e)
Common equity to assets ratio (GAAP) 10.06 % 10.70 % 11.22 % 11.56 % (a/c)
Tangible common equity to tangible assets ratio
(Non-GAAP)
7.44 % 7.98 % 8.47 % 8.82 % (b/d)
Book Value per share (GAAP) $ 26.69 $ 29.40 $ 32.02 $ 33.94 (a/e)
Tangible book value per share (Non-GAAP) $ 19.18 $ 21.29 $ 23.45 $ 25.12 (b/e)
(22)
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:
2014 2015 2016 YTD 2017
(Dollars in thousands, except per share data)
Net income available to common
shareholders (GAAP) $ 59,845 $ 2.49 $ 64,960 $ 2.50 $ 76,648 $ 2.90 $ 65,140 $ 2.38
Non-GAAP adjustments
Noninterest income components
Gain on life insurance benefits (tax
exempt) (1,964 ) (0.08 ) — — — — — —
Gain on sale of fixed income
securities (121 ) (0.01 ) (798 ) (0.03 ) — — — —
Noninterest expense components
Impairment on acquired facilities 524 0.02 109 — — — — —
Loss on extinguishment of debt — — 122 0.01 437 0.02 — —
Loss on sale of fixed income securities 21 — 1,124 0.04 — — — —
Loss on termination of derivatives 1,122 0.05 — — — — — —
Merger and acquisition expenses 1,339 0.06 10,501 0.40 5,455 0.20 3,393 0.12
Total impact of noncore items 921 0.04 11,058 0.42 5,892 0.22 3,393 0.12
Net tax benefit associated with
noncore items (866 ) (0.03 ) (4,285 ) (0.16 ) (2,163 ) (0.08 ) (1,241 ) (0.04 )
Net operating earnings (Non-
GAAP) $ 59,900 $ 2.50 $ 71,733 $ 2.76 $ 80,377 $ 3.04 $ 67,292 $ 2.46
(23)
NASDAQ Ticker: INDB
www.rocklandtrust.com
Robert Cozzone – CFO & Treasurer
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 results to differ materially from
those currently anticipated due to a number of factors, which include, but are not limited to, factors
discussed in documents filed by the Company with the Securities and Exchange Commission from time
to time.