Attached files
| file | filename |
|---|---|
| EX-99.1 - EXHIBIT 99.1 - INDEPENDENT BANK CORP /MI/ | ex99_1.htm |
| 8-K - INDEPENDENT BANK CORPORATION 8-K 8-01-2011 - INDEPENDENT BANK CORP /MI/ | form8k.htm |
Exhibit 99.2
INDEPENDENT BANK CORPORATION AND SUBSIDIARIES
Supplemental Data
|
Non-performing assets(1)
|
||||||||
|
June 30,
|
December 31,
|
|||||||
|
2011
|
2010
|
|||||||
|
(Dollars in thousands)
|
||||||||
|
Non-accrual loans
|
$ | 53,273 | $ | 66,652 | ||||
|
Loans 90 days or more past due and still accruing interest
|
443 | 928 | ||||||
|
Total non-performing loans
|
53,716 | 67,580 | ||||||
|
Other real estate and repossessed assets
|
37,608 | 39,413 | ||||||
|
Total non-performing assets
|
$ | 91,324 | $ | 106,993 | ||||
|
As a percent of Portfolio Loans
|
||||||||
|
Non-performing loans
|
3.21 | % | 3.73 | % | ||||
|
Allowance for loan losses
|
3.65 | 3.75 | ||||||
|
Non-performing assets to total assets
|
3.94 | 4.22 | ||||||
|
Allowance for loan losses as a percent of non-performing loans
|
113.77 | 100.50 | ||||||
(1) Excludes loans classified as “troubled debt restructured” that are not past due and vehicle service contract counterparty receivables, net.
|
Troubled debt restructurings (“TDR”)
|
||||||||||||
|
June 30, 2011
|
||||||||||||
|
Commercial
|
Retail
|
Total
|
||||||||||
|
(In thousands)
|
||||||||||||
|
Performing TDR’s
|
$ | 13,119 | $ | 95,004 | $ | 108,123 | ||||||
|
Non-performing TDR’s (1)
|
3,994 | 12,945 | (2) | 16,939 | ||||||||
|
Total
|
$ | 17,113 | $ | 107,949 | $ | 125,062 | ||||||
|
December 31, 2010
|
||||||||||||
|
Commercial
|
Retail
|
Total
|
||||||||||
|
(In thousands)
|
||||||||||||
|
Performing TDR’s
|
$ | 16,957 | $ | 96,855 | $ | 113,812 | ||||||
|
Non-performing TDR’s (1)
|
7,814 | 16,616 | (2) | 24,430 | ||||||||
|
Total
|
$ | 24,771 | $ | 113,471 | $ | 138,242 | ||||||
|
(1)
|
Included in non-performing loans table above.
|
|
(2)
|
Also includes loans on non-accrual at the time of modification until six payments are received on a timely basis.
|
Allowance for Loan Losses
|
Six months ended
June 30,
|
||||||||||||||||
|
2011
|
2010
|
|||||||||||||||
|
Loans
|
Unfunded
Commitments
|
Loans
|
Unfunded
Commitments
|
|||||||||||||
| (Dollars in thousands) | ||||||||||||||||
|
Balance at beginning of period
|
$ | 67,915 | $ | 1,322 | $ | 81,717 | $ | 1,858 | ||||||||
|
Additions (deduction)
|
||||||||||||||||
|
Provision for loan losses
|
15,454 | - | 29,694 | - | ||||||||||||
|
Recoveries credited to allowance
|
2,182 | - | 1,839 | - | ||||||||||||
|
Loans charged against the allowance
|
(24,436 | ) | - | (37,644 | ) | - | ||||||||||
|
Additions (deductions) included in non-interest expense
|
- | 184 | - | 336 | ||||||||||||
|
Balance at end of period
|
$ | 61,115 | $ | 1,506 | $ | 75,606 | $ | 2,194 | ||||||||
|
Net loans charged against the allowance to average Portfolio Loans (annualized)
|
2.58 | % | 3.33 | % | ||||||||||||
Alternative Sources of Funds
|
June 30,
2011
|
December 31,
2010
|
|||||||||||||||||
|
Amount
|
Average
Maturity
|
Rate
|
Amount
|
Average
Maturity
|
Rate
|
|||||||||||||
|
(Dollars in thousands)
|
||||||||||||||||||
|
Brokered CDs
|
$ | 90,429 |
2.0 years
|
2.73 | % | $ | 273,546 |
2.4 years
|
2.89 | % | ||||||||
|
Fixed rate FHLB advances
|
20,907 |
5.4 years
|
6.34 | 21,022 |
5.9 years
|
6.34 | ||||||||||||
|
Variable rate FHLB advances(1)
|
20,000 |
0.5 years
|
0.34 | 50,000 |
0.8 years
|
0.41 | ||||||||||||
|
Total
|
$ | 131,336 |
2.3 years
|
2.94 | % | $ | 344,568 |
2.4 years
|
2.74 | % | ||||||||
|
|
(1)
|
Certain of these items have had their average maturity and rate altered through the use of derivative instruments, including pay-fixed interest rate swaps.
|
Capitalization
|
June 30,
2011 |
December 31,
2010 |
|||||||
|
(In thousands)
|
||||||||
|
Subordinated debentures
|
$ | 50,175 | $ | 50,175 | ||||
|
Amount not qualifying as regulatory capital
|
(1,507 | ) | (1,507 | ) | ||||
|
Amount qualifying as regulatory capital
|
48,668 | 48,668 | ||||||
|
Shareholders’ Equity
|
||||||||
|
Preferred stock
|
77,759 | 75,700 | ||||||
|
Common stock
|
248,198 | 246,407 | ||||||
|
Accumulated deficit
|
(199,326 | ) | (189,902 | ) | ||||
|
Accumulated other comprehensive loss
|
(12,190 | ) | (13,120 | ) | ||||
|
Total shareholders’ equity
|
114,441 | 119,085 | ||||||
|
Total capitalization
|
$ | 163,109 | $ | 167,753 | ||||
Non-Interest Income
|
Three months ended
|
Six months ended
|
|||||||||||||||||||
|
June 30,
|
March 31,
|
June 30,
|
June 30,
|
|||||||||||||||||
|
2011
|
2011
|
2010
|
2011
|
2010
|
||||||||||||||||
|
(In thousands)
|
||||||||||||||||||||
|
Service charges on deposit accounts
|
$ | 4,784 | $ | 4,282 | $ | 5,833 | $ | 9,066 | $ | 11,108 | ||||||||||
|
Interchange income
|
2,308 | 2,168 | 2,086 | 4,476 | 4,022 | |||||||||||||||
|
Net gains (losses) on assets
|
||||||||||||||||||||
|
Mortgage loans
|
1,793 | 1,935 | 2,372 | 3,728 | 4,215 | |||||||||||||||
|
Securities
|
115 | 213 | 1,363 | 328 | 1,628 | |||||||||||||||
|
Other than temporary loss on securities available for sale
|
||||||||||||||||||||
|
Total impairment loss
|
327 | (469 | ) | - | (142 | ) | (118 | ) | ||||||||||||
|
Loss recognized in other comprehensive income
|
(327 | ) | 327 | - | - | - | ||||||||||||||
|
Net impairment loss recognized in earnings
|
- | (142 | ) | - | (142 | ) | (118 | ) | ||||||||||||
|
Mortgage loan servicing
|
(126 | ) | 896 | (2,043 | ) | 770 | (1,611 | ) | ||||||||||||
|
Investment and insurance commissions
|
524 | 555 | 409 | 1,079 | 798 | |||||||||||||||
|
Bank owned life insurance
|
464 | 425 | 483 | 889 | 951 | |||||||||||||||
|
Title insurance fees
|
318 | 473 | 366 | 791 | 860 | |||||||||||||||
|
Decrease in fair value of U.S. Treasury warrant
|
642 | 354 | 996 | |||||||||||||||||
|
Gain on extinguishment of debt
|
- | - | 18,086 | - | 18,086 | |||||||||||||||
|
Other
|
1,634 | 1,552 | 790 | 3,186 | 2,187 | |||||||||||||||
|
Total non-interest income
|
$ | 12,456 | $ | 12,711 | $ | 29,745 | $ | 25,167 | $ | 42,126 | ||||||||||
Capitalized Mortgage Loan Servicing Rights
|
Three months ended
June 30,
|
Six months ended
June 30,
|
|||||||||||||||
|
2011
|
2010
|
2011
|
2010
|
|||||||||||||
|
(In thousands)
|
||||||||||||||||
|
Balance at beginning of period
|
$ | 15,531 | $ | 15,435 | $ | 14,661 | $ | 15,273 | ||||||||
|
Originated servicing rights capitalized
|
431 | 680 | 1,495 | 1,455 | ||||||||||||
|
Amortization
|
(574 | ) | (633 | ) | (1,323 | ) | (1,391 | ) | ||||||||
|
Change in valuation allowance
|
(647 | ) | (2,460 | ) | (92 | ) | (2,315 | ) | ||||||||
|
Balance at end of period
|
$ | 14,741 | $ | 13,022 | $ | 14,741 | $ | 13,022 | ||||||||
|
Valuation allowance at end of period
|
$ | 3,302 | $ | 4,617 | $ | 3,302 | $ | 4,617 | ||||||||
Mortgage Loan Activity
|
Three months ended
|
Six months ended
|
|||||||||||||||||||
|
June 30,
|
March 31,
|
June 30,
|
June 30,
|
|||||||||||||||||
|
2011
|
2011
|
2010
|
2011
|
2010
|
||||||||||||||||
|
(Dollars in thousands)
|
||||||||||||||||||||
|
Mortgage loans originated
|
$ | 74,612 | $ | 95,573 | $ | 93,900 | $ | 170,185 | $ | 183,907 | ||||||||||
|
Mortgage loans sold
|
63,369 | 121,488 | 87,583 | 184,857 | 175,291 | |||||||||||||||
|
Mortgage loans sold with servicing rights released
|
18,428 | 16,572 | 20,747 | 35,000 | 32,611 | |||||||||||||||
|
Net gains on the sale of mortgage loans
|
1,793 | 1,935 | 2,372 | 3,728 | 4,215 | |||||||||||||||
|
Net gains as a percent of mortgage
|
||||||||||||||||||||
|
loans sold (“Loan Sales Margin”)
|
2.83 | % | 1.59 | % | 2.71 | % | 2.02 | % | 2.40 | % | ||||||||||
|
Fair value adjustments included in the Loan
|
||||||||||||||||||||
|
Sales Margin
|
0.63 | (0.72 | ) | 0.43 | (0.26 | ) | 0.18 | |||||||||||||
Non-Interest Expense
|
|
||||||||||||||||||||
|
Three months ended
|
Six months ended
|
|||||||||||||||||||
|
June 30,
|
March 31,
|
June 30,
|
June 30,
|
|||||||||||||||||
|
2011
|
2011
|
2010
|
2011
|
2010
|
||||||||||||||||
|
(In thousands)
|
||||||||||||||||||||
|
Compensation
|
$ | 10,020 | $ | 9,812 | $ | 10,242 | $ | 19,832 | $ | 20,418 | ||||||||||
|
Performance-based compensation
|
334 | 157 | 655 | 491 | 1,299 | |||||||||||||||
|
Payroll taxes and employee benefits
|
2,675 | 2,380 | 2,533 | 5,055 | 4,926 | |||||||||||||||
|
Compensation and employee benefits
|
13,029 | 12,349 | 13,430 | 25,378 | 26,643 | |||||||||||||||
|
Loan and collection
|
3,580 | 3,867 | 2,785 | 7,447 | 7,571 | |||||||||||||||
|
Occupancy, net
|
2,663 | 3,101 | 2,595 | 5,764 | 5,504 | |||||||||||||||
|
Data processing
|
2,415 | 2,310 | 2,470 | 4,725 | 4,939 | |||||||||||||||
|
Vehicle service contract counterparty contingencies
|
1,311 | 2,346 | 4,861 | 3,657 | 8,279 | |||||||||||||||
|
Furniture, fixtures and equipment
|
1,502 | 1,418 | 1,648 | 2,920 | 3,367 | |||||||||||||||
|
Net losses on other real estate and repossessed assets
|
777 | 1,406 | 1,554 | 2,183 | 3,583 | |||||||||||||||
|
Credit card and bank service fees
|
1,013 | 1,047 | 1,500 | 2,060 | 3,175 | |||||||||||||||
|
FDIC deposit insurance
|
652 | 1,235 | 1,763 | 1,887 | 3,565 | |||||||||||||||
|
Communications
|
889 | 948 | 1,015 | 1,837 | 2,088 | |||||||||||||||
|
Legal and professional fees
|
801 | 778 | 894 | 1,579 | 2,030 | |||||||||||||||
|
Advertising
|
670 | 554 | 674 | 1,224 | 1,453 | |||||||||||||||
|
Supplies
|
392 | 402 | 415 | 794 | 808 | |||||||||||||||
|
Amortization of intangible assets
|
343 | 343 | 323 | 686 | 645 | |||||||||||||||
|
Costs related to unfunded lending commitments
|
89 | 95 | 280 | 184 | 336 | |||||||||||||||
|
Other
|
1,557 | 1,295 | 1,389 | 2,852 | 3,109 | |||||||||||||||
|
Total non-interest expense
|
$ | 31,683 | $ | 33,494 | $ | 37,596 | $ | 65,177 | $ | 77,095 | ||||||||||
Average Balances and Rates
|
Three Months Ended
June 30,2011
|
||||||||||||||||||||||||
|
2011
|
2010
|
|||||||||||||||||||||||
|
Average
Balance |
Interest
|
Rate(3)
|
Average
Balance |
Interest
|
Rate(3)
|
|||||||||||||||||||
|
Assets (1)
|
(Dollars in thousands)
|
|||||||||||||||||||||||
|
Taxable loans
|
$ | 1,718,171 | $ | 28,017 | 6.54 | % | $ | 2,115,837 | $ | 36,569 | 6.93 | % | ||||||||||||
|
Tax-exempt loans (2)
|
8,080 | 85 | 4.22 | 9,866 | 106 | 4.31 | ||||||||||||||||||
|
Taxable securities
|
61,407 | 344 | 2.25 | 87,554 | 902 | 4.13 | ||||||||||||||||||
|
Tax-exempt securities (2)
|
30,064 | 298 | 3.98 | 49,012 | 526 | 4.30 | ||||||||||||||||||
|
Cash – interest bearing
|
306,864 | 194 | 0.25 | 324,592 | 192 | 0.24 | ||||||||||||||||||
|
Other investments
|
22,852 | 189 | 3.32 | 27,001 | 197 | 2.93 | ||||||||||||||||||
|
Interest Earning Assets
|
2,147,438 | 29,127 | 5.43 | 2,613,862 | 38,492 | 5.90 | ||||||||||||||||||
|
Cash and due from banks
|
50,250 | 48,751 | ||||||||||||||||||||||
|
Other assets, net
|
189,472 | 160,291 | ||||||||||||||||||||||
|
Total Assets
|
$ | 2,387,160 | $ | 2,822,904 | ||||||||||||||||||||
|
Liabilities
|
||||||||||||||||||||||||
|
Savings and NOW
|
$ | 1,013,095 | 608 | 0.24 | $ | 1,088,526 | 670 | 0.25 | ||||||||||||||||
|
Time deposits
|
680,267 | 3,903 | 2.30 | 1,019,882 | 6,838 | 2.69 | ||||||||||||||||||
|
Other borrowings
|
94,609 | 1,232 | 5.22 | 227,979 | 2,413 | 4.25 | ||||||||||||||||||
|
Interest Bearing Liabilities
|
1,787,971 | 5,743 | 1.29 | 2,336,387 | 9,921 | 1.70 | ||||||||||||||||||
|
Demand deposits
|
443,163 | 340,558 | ||||||||||||||||||||||
|
Other liabilities
|
44,674 | 52,051 | ||||||||||||||||||||||
|
Shareholders’ equity
|
111,352 | 93,908 | ||||||||||||||||||||||
|
Total liabilities and shareholders’ equity
|
$ | 2,387,160 | $ | 2,822,904 | ||||||||||||||||||||
|
Net Interest Income
|
$ | 23,384 | $ | 28,571 | ||||||||||||||||||||
|
Net Interest Income as a Percent of Earning Assets
|
4.36 | % | 4.38 | % | ||||||||||||||||||||
|
(1)
|
All domestic, except for $0.01 million and $0.4 million for the three months ended June 30, 2011 and 2010, respectively, of average payment plan receivables included in taxable loans for customers domiciled in Canada.
|
|
(2)
|
Interest on tax-exempt loans and securities is not presented on a fully tax equivalent basis due to the current net operating loss carryforward position and the deferred tax asset valuation allowance.
|
|
(3)
|
Annualized.
|
Average Balances and Rates
|
Six Months Ended
|
||||||||||||||||||||||||
|
June 30,
|
||||||||||||||||||||||||
|
2011
|
2010
|
|||||||||||||||||||||||
|
Average Balance
|
Interest
|
Rate(3)
|
Average Balance
|
Interest
|
Rate(3)
|
|||||||||||||||||||
|
Assets (1)
|
(Dollars in thousands)
|
|||||||||||||||||||||||
|
Taxable loans
|
$ | 1,757,979 | $ | 57,414 | 6.57 | % | $ | 2,184,046 | $ | 75,491 | 6.95 | % | ||||||||||||
|
Tax-exempt loans (2)
|
8,235 | 172 | 4.21 | 9,997 | 211 | 4.26 | ||||||||||||||||||
|
Taxable securities
|
51,568 | 811 | 3.17 | 91,859 | 2,062 | 4.53 | ||||||||||||||||||
|
Tax-exempt securities (2)
|
30,508 | 630 | 4.16 | 56,671 | 1,211 | 4.31 | ||||||||||||||||||
|
Cash – interest bearing
|
338,154 | 426 | 0.25 | 299,910 | 349 | 0.23 | ||||||||||||||||||
|
Other investments
|
23,239 | 392 | 3.40 | 27,426 | 412 | 3.03 | ||||||||||||||||||
|
Interest Earning Assets
|
2,209,683 | 59,845 | 5.45 | 2,669,909 | 79,736 | 6.01 | ||||||||||||||||||
|
Cash and due from banks
|
50,568 | 53,855 | ||||||||||||||||||||||
|
Other assets, net
|
190,672 | 154,408 | ||||||||||||||||||||||
|
Total Assets
|
$ | 2,450,923 | $ | 2,878,172 | ||||||||||||||||||||
|
Liabilities
|
||||||||||||||||||||||||
|
Savings and NOW
|
$ | 1,003,864 | 1,197 | 0.24 | $ | 1,086,524 | 1,533 | 0.28 | ||||||||||||||||
|
Time deposits
|
742,609 | 8,259 | 2.24 | 1,073,452 | 14,194 | 2.67 | ||||||||||||||||||
|
Other borrowings
|
99,730 | 2,555 | 5.17 | 227,801 | 5,407 | 4.79 | ||||||||||||||||||
|
Interest Bearing Liabilities
|
1,846,203 | 12,011 | 1.31 | 2,387,777 | 21,134 | 1.78 | ||||||||||||||||||
|
Demand deposits
|
446,056 | 334,100 | ||||||||||||||||||||||
|
Other liabilities
|
44,515 | 58,359 | ||||||||||||||||||||||
|
Shareholders’ equity
|
114,149 | 97,936 | ||||||||||||||||||||||
|
Total liabilities and shareholders’ equity
|
$ | 2,450,923 | $ | 2,878,172 | ||||||||||||||||||||
|
Net Interest Income
|
$ | 47,834 | $ | 58,602 | ||||||||||||||||||||
|
|
||||||||||||||||||||||||
|
Net Interest Income as a Percent of Earning Assets
|
4.35 | % | 4.41 | % | ||||||||||||||||||||
|
(1)
|
All domestic, except for $0.02 million and $0.7 million for the six months ended June 30, 2011 and 2010, respectively, of average payment plan receivables included in taxable loans for customers domiciled in Canada.
|
|
(2)
|
Interest on tax-exempt loans and securities is not presented on a fully tax equivalent basis due to the current net operating loss carryforward position and the deferred tax asset valuation allowance.
|
|
(3)
|
Annualized.
|
Commercial Loan Portfolio Analysis as of June 30, 2011
|
Total Commercial Loans
|
||||||||||||||||||||
|
Watch Credits
|
Percent of Loan
|
|||||||||||||||||||
|
Loan Category
|
All Loans
|
Performing
|
Non- performing
|
Total
|
Category in Watch Credit
|
|||||||||||||||
|
(Dollars in thousands)
|
||||||||||||||||||||
|
Land
|
$ | 19,738 | $ | 5,268 | $ | 1,031 | $ | 6,299 | 31.9 | % | ||||||||||
|
Land development
|
20,553 | 8,202 | 3,798 | 12,000 | 58.4 | |||||||||||||||
|
Construction
|
17,192 | 4,268 | 398 | 4,666 | 27.1 | |||||||||||||||
|
Income producing
|
287,933 | 58,698 | 11,447 | 70,145 | 24.4 | |||||||||||||||
|
Owner occupied
|
180,435 | 26,324 | 5,565 | 31,889 | 17.7 | |||||||||||||||
|
Total Commercial Real Estate Loans (1)
|
$ | 525,851 | $ | 102,760 | 22,239 | $ | 124,999 | 23.8 | ||||||||||||
|
Other Commercial Loans(1)
|
$ | 142,672 | $ | 19,146 | 2,954 | $ | 22,100 | 15.5 | ||||||||||||
|
Total non-performing commercial loans
|
$ | 25,193 | ||||||||||||||||||
|
(1)
|
The total of these two categories is different than the June 30, 2011, Consolidated Statement of Financial Condition due primarily to loans in process.
|