8-K
INDEPENDENT BANK CORP /MI/ (IBCP)
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or
15(d) of the Securities
Exchange Act of 1934
Date of Report: April 20, 2021
INDEPENDENT BANK CORPORATION
(Exact name of registrant as specified in its charter)
| Michigan | 0-7818 | 38-2032782 |
|---|---|---|
| (State or other jurisdiction of incorporation) | (Commission File Number) | (IRS Employer Identification No.) |
| 4200 East Beltline Grand Rapids, Michigan | 49525 | |
| --- | --- | |
| (Address of principal executive office) | (Zip Code) |
Registrant's telephone number,
including area code:
(616) 527-5820
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):
| ☐ | Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
|---|---|
| ☐ | Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
| --- | --- |
| ☐ | Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
| --- | --- |
| ☐ | Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
| --- | --- |
Securities registered pursuant to Section 12(b) of the Act:
| Title of each class | Trading symbol(s) | Name of each exchange on which registered |
|---|---|---|
| Common stock, no par value | IBCP | NASDAQ Global Select Market |
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
Emerging growth company ☐
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
| Item 5.07. | Submission of Matters to a Vote of Security Holders |
|---|
At the Company's Annual Meeting of Shareholders held on April 20, 2021, the matters listed below were submitted to a vote of the shareholders through the solicitation of proxies. The proposals are described in detail in the Company’s proxy statement, filed with the SEC on March 5, 2021. The voting results are as follows:
Proposal 1: Election of Directors
The following individuals were elected to serve as directors of the Company to hold office until the 2024 Annual Meeting of Shareholders, under the terms of the Company's Bylaws:
| Nominee | For | Withheld | Broker Non-Votes |
|---|---|---|---|
| Christina L. Keller | 17,053,271 | 105,218 | 2,199,162 |
| Ronia F. Kruse | 15,504,237 | 1,654,252 | 2,199,162 |
| Michael M. Magee, Jr. | 16,432,386 | 726,103 | 2,199,162 |
| Matthew J. Missad | 16,927,225 | 231,264 | 2,199,162 |
Proposal 2: Ratification of the Appointment of Independent Auditors
The shareholders ratified the appointment of Crowe LLP to serve as the Company's independent registered public accounting firm for the fiscal year ending December 31, 2021.
| For | Against | Abstain | Broker Non-Votes |
|---|---|---|---|
| 19,086,523 | 242,424 | 28,704 | -- |
Proposal 3: Advisory (Non-Binding) Vote on Executive Compensation
The shareholders approved a proposed resolution approving the compensation of the Company's named executive officers, as disclosed pursuant to the compensation disclosure rules of the SEC.
| For | Against | Abstain | Broker Non-Votes |
|---|---|---|---|
| 16,473,280 | 578,215 | 106,994 | 2,199,162 |
Proposal 4: Vote on the Independent Bank Corporation 2021 Long-Term Incentive Plan (the “LTIP”)
The shareholders approved the LTIP.
| For | Against | Abstain | Broker Non-Votes |
|---|---|---|---|
| 16,420,042 | 711,778 | 26,669 | 2,199,162 |
| Item 7.01 | Regulation FD Disclosure. | ||
| --- | --- |
On April 20, 2021, Independent Bank Corporation (the "Company") used a Shareholder Presentation at the Company's 2021 Annual Meeting of Shareholders. A copy of the Shareholder Presentation is attached to this Current Report on Form 8-K as Exhibit 99.1 and is incorporated in this Item 7.01 by reference. The information disclosed under this Item 7.01 and Exhibit 99.1 is furnished to, and not filed with, the Securities and Exchange Commission.
| Item 9.01. | Financial Statements and Exhibits |
|---|
Exhibits.
| 99.1 | Shareholder Presentation. |
|---|---|
| 104 | Cover Page Interactive Data File (embedded with in the Inline, XBRL document). |
| --- | --- |
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.
| INDEPENDENT BANK CORPORATION | |
|---|---|
| (Registrant) | |
| Date: April 22, 2021 | /s/ Gavin A. Mohr |
| By: Gavin A. Mohr | |
| Its: Executive Vice President and Chief Financial Officer |
Exhibit 99.1
INDEPENDENT BANKCORPORATION2021 Annual Shareholders Meeting April 20, 2021
Cautionary note regarding forward-looking statements This presentation contains forward-looking statements about Independent Bank Corporation. Statements that are not historical or current facts, including statements about beliefs and expectations, are forward-looking statements and are based on the information available to, and assumptions and estimates made by, management as of the date hereof. These forward-looking statements cover, among other things, anticipated future revenue and expenses and the future plans and prospects of Independent Bank Corporation. Forward-looking statements involve inherent risks and uncertainties, and important factors could cause actual results to differ materially from those anticipated. The COVID-19 pandemic is adversely affecting Independent Bank Corporation, its customers, counterparties, employees, and third-party service providers, and the ultimate extent of the impacts on its business, financial position, results of operations, liquidity, and prospects is uncertain. Continued deterioration in general business and economic conditions or turbulence in domestic or global financial markets could adversely affect Independent Bank Corporation’s revenues and the values of its assets and liabilities, reduce the availability of funding from certain financial institutions, lead to a tightening of credit, and increase stock price volatility. In addition, changes to statutes, regulations, or regulatory policies or practices could affect Independent Bank Corporation in substantial and unpredictable ways. Independent Bank Corporation’s results could also be adversely affected by changes in interest rates; further increases in unemployment rates; deterioration in the credit quality of its loan portfolios or in the value of the collateral securing those loans; deterioration in the value of its investment securities; legal and regulatory developments; litigation; increased competition from both banks and non-banks; changes in the level of tariffs and other trade policies of the United States and its global trading partners; changes in customer behavior and preferences; breaches in data security; failures to safeguard personal information; effects of mergers and acquisitions and related integration; effects of critical accounting policies and judgments; and management’s ability to effectively manage credit risk, market risk, operational risk, compliance risk, strategic risk, interest rate risk, liquidity risk and reputation risk. Certain risks and important factors that could affect Independent Bank Corporation's future results are identified in its Annual Report on Form 10-K for the year ended December 31, 2020 and other reports filed with the SEC, including among other things under the heading “Risk Factors” in such Annual Report on Form 10-K. Any forward-looking statement speaks only as of the date on which it is made, and Independent Bank Corporation undertakes no obligation to update any forward-looking statement, whether to reflect events or circumstances after the date on which the statement is made, to reflect new information or the occurrence of unanticipated events, or otherwise. 2
Today’s Agenda Welcome and Call to Order – IBC ChairmanVoting upon matters listed in the Company’s 2021 Proxy Statement – IBC ChairmanBusiness Update by IBC President & CEOQuestion and answer session – IBC President & CEO and IBC EVP & CFOAdjournment 3
Independent Bank Corporation Board of Directors 4
IBC Executive Management Team 5 EVP and Chief Risk Officer since 2012Joined the Company in April 2007 as EVP – Commercial Previous experience with Comerica for 25 years CEO of IBC and Independent Bank since 2013Joined Independent Bank in 1994Began career with Crowe Chizek and Company Joined Independent Bank in 2020 as EVP and Chief Financial OfficerPreviously SVP, Chief Financial Officer of STAR Financial Corporation15 years of experience in financial management William B. “Brad” KesselPresident, CEO & Director Gavin Mohr EVP & CFO Stefanie M. KimballEVP & Chief Risk Officer Joined Independent Bank in 2016 as Senior Vice President Mortgage Banking25 years experience in the mortgage areaPrevious experience with Talmer Bank, TCF Bank and Standard Federal Bank Responsible for Retail Banking, Deposit Ops, as well as digital banking strategyJoined Independent Bank over 19 years ago Previous experience in commercial and retail bank management Larry R. “Russ” Daniel Jr.EVP – Retail Banking Patrick J. ErvinEVP – Mortgage Banking Joel F. RahnEVP – Commercial Banking Joined Independent Bank in 2018 as Senior Vice President Commercial Banking30 years experience in Commercial BankingPreviously Regional President of West Michigan at Chemical Bank
2021 Annual Meeting of Shareholders Secretary for the meeting (Gavin A. Mohr)Record date: February 19, 2021Approximate distribution date of Proxy Statement: March 8, 2021Shares entitled to vote: 21,891,206Determination of quorumVoting on proposals 6
Proposal #1 - Election of Directors 7 Christina L. Keller Ronia F. Kruse Michael M. Magee, Jr. Matthew J. Missad
Proposal #2 - Ratification of Appointment of Independent Auditors Crowe LLP has served as IBC’s independent registered public accounting firm since 2005.Crowe LLP was founded in 1942 and is one of the 10 largest accounting and consulting firms in the U.S.IBC is served primarily by Crowe’s Grand Rapids, Michigan and South Bend, Indiana offices. 8
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. 9
Proposal #4 – Approval of the Independent Bank Corporation 2021 Long-Term Incentive Plan The purpose of the plan is to promote the long term success of the Company for the benefit of shareholders by aligning the personal interest of participants with those of its shareholders.The Plan will replace the existing Long-Term Incentive Plan previously approved by shareholders. The Plan provides for the grant of a variety of equity- based awards described in the proxy. Maximum number of shares available for issue is 650,000.Plan termination date of April 20, 2031. 10
INDEPENDENT BANK CORPORTATION 2021 Annual Shareholders Meeting Business Update Brad Kessel, President & CEO
COVID-19 Response – To Communities, Customers, and Our Associates 12 When it became apparent that the threat from the Coronavirus (COVID-19) could pose a threat to our people, our business, and our customers we activated our Business Continuity and Crisis Communication Core Teams to take early and decisive action.Our Team developed the IB Safe Work Playbook to protect the health and well being of customers and our associates. Approximately 40% of our team members worked remotely through 12/31/20. Through these challenging times service to our customers went uninterrupted utilizing drive-thru service and lobby by appointment only during two periods when health risks were elevated state-wide. For our Customers:We offered loan payment relief where neededProvided SBA Payroll Protection Program loans to businesses in our marketsFollowed GSE directives for moratoriums on foreclosures For our Associates:Paid service bonuses to our “front-line” associates Made adjustments to our paid time off policies Implemented extensive health and safety protocols throughout our facilities
2020 ESG Highlights Enhanced wellness program resulting in 250% increase in participation in 2020Bank wide training for Diversity, Equity and Inclusion in 20205th Annual Making a Difference Day with 794 team members participating in 88 volunteer projects in the communities we serve, including donations of $110,000Invested over $1.25 million in sponsorships and donations in the last two years Awarded the Financial Literacy Award for Program and Reach from the Michigan Bankers Association 13
5 Strong Performance & Returns 14 ROA (%) ROE (%) Total Shareholder Return Excluding the impact of the $5.96 million remeasurement of net deferred tax assets in 2017, diluted EPS was $1.22; net income is $26.440 million, ROA is 1.00%; and ROE is 10.10%. (1) (1)
Track Record of Consistent Growth & Profitability 15 2020 net income and diluted EPS increased 20.9% and 26.5%, respectively, compared to 2019.2020 dividends increased 11.1% over 2019.Continued improvements in ROAA and ROAE.2020 mortgage loan originations topped $1.8 billion! Excluding the impact of the $5.96 million remeasurement of net deferred tax assets in 2017, diluted EPS was $1.22; net income is $26.440 million, ROA is 1.00%; and ROE is 10.10%. For the Year Ended December 31, ($M except per share data) 2016 2017 2018 2019 2020 CAGR Total Assets $2,549 $2,789 $3,353 $3,565 $4,204 10.5% Gross Loans $1,644 $2,058 $2,669 $2,795 $2,826 11.4% Deposits $2,226 $2,401 $2,913 $3,037 $3,637 10.3% Net Income(1) $22.77 $20.48 $39.84 $46.44 $56.15 19.8% Return on Average Assets(1) 0.92% 0.77% 1.27% 1.35% 1.43% Return on Average Equity(1) 9.2% 7.8% 12.4% 13.6% 15.7% Diluted EPS(1) $1.05 $0.95 $1.68 $2.00 $2.53 19.2% TBV/Share $ 11.62 $ 12.34 $ 12.90 $ 14.08 $ 16.33 7.0% Dividends Paid per Share $0.34 $0.42 $0.60 $0.72 $0.80 18.7%
6 2020 Full Year Financial Highlights Income StatementNet income of $56.2 million or $2.53 per diluted share equaling a 20.9% and 26.5% increases in net income and diluted earnings per share (EPS), respectively, in 2020 compared to 2019. Net interest income of $123.6 million, up $1.0 million from 2019.Net gains on mortgage loans of $62.6 million (up 213.1% over 2019) and total mortgage loan origination volume of $1.8 billion.$12.5 million loan loss provision expense in 2020 versus $0.8 million in 2019. Balance Sheet/CapitalTotal assets grew to $4.20 billion at 12/31/20, up $639.3 million, or 17.9%, from 2019. Total portfolio loans grew to $2.73 billion at 12/31/20, up 0.3% from 2019. Securities available for sale grew to $1.07 billion at 12/31/20, up $553.8 million from 2019.Deposits grew to $3.64 billion at 12/31/20, up $600.6 million, or 19.8%, from 2019. Repurchased 708,956 shares at an average cost of $20.07 per share during 2020.TBV per share increased to $16.33 at 12/31/20, or 16.0%, from $14.08 at 12/31/19.Tangible common equity/assets was 8.56%, in targeted range of 8.50% to 9.00%. 16
Strategic Initiatives 17 Serve consumers and businesses in our markets in an inclusive way with straight forward marketing and outreach efforts and fostering relationships and strong customer engagement.Improve net interest income via balanced loan growth, disciplined risk adjusted loan pricing and active management of deposit pricing. Add new customers and grow revenue through outbound calling.Add new customers and grow revenue through the addition of new talented sales professionals in our existing markets. Supplement our organic growth initiatives via selective and opportunistic bank acquisitions and branch acquisitions. Growth Enhance process improvement expertise, enabling all business lines and departments to streamline/automate operating processes and workflows.Successfully complete 2021 core conversion, capitalizing upon opportunity to streamline and improve bank processes.Leverage virtual capabilities to make more effective meetings, training and customer engagement.Optimize branch delivery channel including assessing existing locations, new locations, service hours, staffing, & workflow and leveraging our existing technology. Expand Digital Branch services.Build/enhance dashboard reporting and business intelligence. Process Improvement & Cost Controls Create and maintain an engaged workforce through a culture and environment that promotes diversity, equity, inclusion and professional development. Empower and support our team members to serve our customers. Demonstrate that we are committed to the well-being of our team members who ensure our success. This entails recognizing and rewarding contributions, developing new talent via internships, providing coaching and development, and planning for succession and new opportunities. Talent Management Produce strong and consistent earnings and capital levels. Maintain good credit quality aided by strong proactive asset quality monitoring and problem resolution.Practice sound risk management with effective reporting to include fair banking and scenario planning.Actively manage and monitor liquidity and interest rate risk.Promote strong, independent & collaborative risk management, utilizing three layers of defense (business unit, risk management and internal audit). Ensure effective operational controls with special emphasis on cyber security, fraud prevention, core system conversion and regulatory compliance.Maintain effective relationships with regulators & other outside oversight parties. Risk Management
INDEPENDENT BANK CORPORTATION 2021 Annual Shareholders Meeting Question and Answer Session Brad Kessel, President & CEOGavin A. Mohr, Chief Financial Officer
Independent Bank Corporation2021 Annual Shareholders Meeting Voting ResultsShares entitled to vote: 21,891,206Proposal #1 – Election of DirectorsProposal #2 – Ratification of AuditorsProposal #3 – Advisory (Non-Binding) Vote on Executive CompensationProposal #4 – Vote upon the Independent Bank Corporation 2021 Long-Term Incentive Plan 19
Independent Bank Corporation2021 Annual Shareholders Meeting Closing RemarksThank you for attending!NASDAQ: IBCP 20