Attached files
| file | filename |
|---|---|
| 8-K - INDEPENDENT BANK CORPORATION 8-K 4-23-2012 - INDEPENDENT BANK CORP /MI/ | form8k.htm |
| EX-99.1 - EXHIBIT 99.1 - INDEPENDENT BANK CORP /MI/ | ex99_1.htm |
Exhibit 99.2
INDEPENDENT BANK CORPORATION AND SUBSIDIARIES
Supplemental Data
Non-performing assets (1)
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March 31,
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December 31,
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2012
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2011
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(Dollars in thousands)
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||||||||
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Non-accrual loans
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$ | 51,475 | $ | 59,309 | ||||
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Loans 90 days or more past due and still accruing interest
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258 | 574 | ||||||
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Total non-performing loans
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51,733 | 59,883 | ||||||
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Other real estate and repossessed assets
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30,918 | 34,042 | ||||||
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Total non-performing assets
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$ | 82,651 | $ | 93,925 | ||||
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As a percent of Portfolio Loans
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||||||||
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Non-performing loans
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3.37 | % | 3.80 | % | ||||
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Allowance for loan losses
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3.65 | 3.73 | ||||||
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Non-performing assets to total assets
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3.42 | 4.07 | ||||||
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Allowance for loan losses as a percent of non-performing loans
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108.26 | 98.33 | ||||||
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(1)
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Excludes loans classified as “troubled debt restructured” that are not past due and vehicle service contract counterparty receivables, net.
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Troubled debt restructurings (“TDR”)
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March 31, 2012
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Commercial
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Retail
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Total
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(In thousands)
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Performing TDR’s
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$ | 34,301 | $ | 86,724 | $ | 121,025 | ||||||
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Non-performing TDR’s (1)
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12,655 | 12,518 | (2) | 25,173 | ||||||||
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Total
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$ | 46,956 | $ | 99,242 | $ | 146,198 | ||||||
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December 31, 2011
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Commercial
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Retail
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Total
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(In thousands)
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||||||||||||
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Performing TDR’s
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$ | 29,799 | $ | 86,770 | $ | 116,569 | ||||||
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Non-performing TDR’s (1)
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14,567 | 14,081 | (2) | 28,648 | ||||||||
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Total
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$ | 44,366 | $ | 100,851 | $ | 145,217 | ||||||
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(1)
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Included in non-performing loans table above.
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(2)
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Also includes loans on non-accrual at the time of modification until six payments are received on a timely basis.
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10
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Allowance for loan losses
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Three months ended
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March 31,
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2012
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2011
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Unfunded
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Unfunded
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Loans
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Commitments
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Loans
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Commitments
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(Dollars in thousands)
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Balance at beginning of period
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$ | 58,884 | $ | 1,286 | $ | 67,915 | $ | 1,322 | ||||||||
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Additions (deduction)
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||||||||||||||||
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Provision for loan losses
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5,131 | - | 10,702 | - | ||||||||||||
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Recoveries credited to allowance
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1,880 | - | 935 | - | ||||||||||||
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Loans charged against the allowance
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(9,889 | ) | - | (13,791 | ) | - | ||||||||||
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Additions (deductions) included in non-interest expense
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- | (47 | ) | - | 95 | |||||||||||
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Balance at end of period
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$ | 56,006 | $ | 1,239 | $ | 65,761 | $ | 1,417 | ||||||||
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Net loans charged against the allowance to average Portfolio Loans
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2.07 | % | 2.93 | % | ||||||||||||
Alternative Sources of Funds
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March 31,
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December 31,
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2012
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2011
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Average
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Average
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Amount
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Maturity
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Rate
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Amount
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Maturity
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Rate
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(Dollars in thousands)
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||||||||||||||||||
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Brokered CDs
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$ | 46,000 |
1.1 years
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1.31 | % | $ | 42,279 |
1.0 years
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1.59 | % | ||||||||
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Fixed-rate FHLB advances
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30,030 |
3.2 years
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3.95 | 30,384 |
3.3 years
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3.99 | ||||||||||||
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Variable-rate FHLB advances(1)
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3,000 |
2.1 years
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0.66 | 3,000 |
2.3 years
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0.51 | ||||||||||||
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Total
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$ | 79,030 |
1.9 years
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2.29 | % | $ | 75,663 |
2.0 years
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2.51 | % | ||||||||
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(1)
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Certain of these items have had their average maturity and rate altered through the use of derivative instruments, such as pay-fixed interest-rate swaps.
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Capitalization
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March 31,
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December 31,
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2012
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2010
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(In thousands)
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Subordinated debentures
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$ | 50,175 | $ | 50,175 | ||||
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Amount not qualifying as regulatory capital
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(1,507 | ) | (1,507 | ) | ||||
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Amount qualifying as regulatory capital
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48,668 | 48,668 | ||||||
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Shareholders’ equity
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||||||||
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Preferred stock
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80,913 | 79,857 | ||||||
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Common stock
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248,995 | 248,950 | ||||||
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Accumulated deficit
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(211,811 | ) | (214,259 | ) | ||||
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Accumulated other comprehensive loss
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(13,065 | ) | (11,921 | ) | ||||
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Total shareholders’ equity
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105,032 | 102,627 | ||||||
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Total capitalization
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$ | 153,700 | $ | 151,295 | ||||
11
Non-Interest Income
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Three months ended
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March 31,
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December 31,
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March 31,
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2012
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2011
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2011
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(In thousands)
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Service charges on deposit accounts
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$ | 4,201 | $ | 4,617 | $ | 4,282 | ||||||
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Interchange income
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2,322 | 2,259 | 2,168 | |||||||||
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Net gains (losses) on assets
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Mortgage loans
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3,860 | 3,509 | 1,935 | |||||||||
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Securities
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684 | (22 | ) | 213 | ||||||||
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Other than temporary impairment loss on securities
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Total impairment loss
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(177 | ) | (614 | ) | (469 | ) | ||||||
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Loss recognized in other comprehensive loss
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- | - | 327 | |||||||||
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Net impairment loss recognized in earnings
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(177 | ) | (614 | ) | (142 | ) | ||||||
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Mortgage loan servicing
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736 | (126 | ) | 896 | ||||||||
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Investment and insurance commissions
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447 | 437 | 555 | |||||||||
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Bank owned life insurance
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424 | 493 | 425 | |||||||||
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Title insurance fees
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508 | 375 | 473 | |||||||||
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(Increase) decrease in fair value of U.S. Treasury warrant
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(154 | ) | 112 | 354 | ||||||||
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Other
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1,733 | 1,451 | 1,552 | |||||||||
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Total non-interest income
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$ | 14,584 | $ | 12,491 | $ | 12,711 | ||||||
Capitalized Mortgage Loan Servicing Rights
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Three months ended
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March 31,
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2012
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2011
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(In thousands)
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Balance at beginning of period
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$ | 11,229 | $ | 14,661 | ||||
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Originated servicing rights capitalized
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924 | 1,064 | ||||||
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Amortization
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(1,062 | ) | (749 | ) | ||||
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Change in valuation allowance
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704 | 555 | ||||||
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Balance at end of period
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$ | 11,795 | $ | 15,531 | ||||
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Valuation allowance at end of period
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$ | 5,840 | $ | 2,655 | ||||
Mortgage Loan Activity
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Three months ended
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March 31,
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December 31,
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March 31,
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2012
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2011
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2011
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(Dollars in thousands)
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Mortgage loans originated
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$ | 112,798 | $ | 139,351 | $ | 95,573 | ||||||
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Mortgage loans sold
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112,141 | 117,643 | 121,488 | |||||||||
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Mortgage loans sold with servicing rights released
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15,340 | 21,017 | 16,572 | |||||||||
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Net gains on the sale of mortgage loans
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3,860 | 3,509 | 1,935 | |||||||||
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Net gains as a percent of mortgage loans sold (“Loan Sales Margin”)
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3.44 | % | 2.98 | % | 1.59 | % | ||||||
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Fair value adjustments included in the Loan Sales Margin
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0.92 | 0.29 | (0.72 | ) | ||||||||
12
Non-Interest Expense
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Three months ended
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March 31,
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December 31,
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March 31,
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2012
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2011
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2011
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(In thousands)
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Compensation
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$ | 9,945 | $ | 9,845 | $ | 9,812 | ||||||
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Performance-based compensation
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85 | 677 | 157 | |||||||||
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Payroll taxes and employee benefits
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2,452 | 1,930 | 2,380 | |||||||||
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Compensation and employee benefits
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12,482 | 12,452 | 12,349 | |||||||||
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Loan and collection
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2,890 | 2,309 | 3,867 | |||||||||
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Occupancy, net
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2,716 | 2,768 | 3,101 | |||||||||
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Data processing
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2,339 | 2,524 | 2,310 | |||||||||
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Furniture, fixtures and equipment
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1,294 | 1,307 | 1,418 | |||||||||
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Net losses on other real estate and repossessed assets
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987 | 1,710 | 1,406 | |||||||||
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Legal and professional fees
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897 | 1,611 | 778 | |||||||||
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Communications
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875 | 852 | 948 | |||||||||
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FDIC deposit insurance
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857 | 735 | 1,235 | |||||||||
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Credit card and bank service fees
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651 | 727 | 1,047 | |||||||||
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Advertising
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556 | 539 | 554 | |||||||||
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Vehicle service contract counterparty contingencies
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471 | 6,046 | 2,346 | |||||||||
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Provision for loss reimbursement on sold loans
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432 | 973 | 406 | |||||||||
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Supplies
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394 | 401 | 402 | |||||||||
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Amortization of intangible assets
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272 | 342 | 343 | |||||||||
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Costs (recoveries) related to unfunded lending commitments
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(47 | ) | (48 | ) | 95 | |||||||
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Other
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(17 | ) | 1,465 | 1,263 | ||||||||
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Total non-interest expense
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$ | 28,049 | $ | 36,713 | $ | 33,868 | ||||||
13
Average Balances and Rates
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Three Months Ended
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March 31,
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2012
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2011
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Average
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Average
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Balance
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Interest
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Rate(3)
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Balance
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Interest
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Rate(3)
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Assets (1)
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(Dollars in thousands)
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Taxable loans
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$ | 1,582,444 | $ | 24,270 | 6.16 | % | $ | 1,798,106 | $ | 29,397 | 6.60 | % | ||||||||||||
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Tax-exempt loans (2)
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7,239 | 76 | 4.22 | 8,391 | 87 | 4.20 | ||||||||||||||||||
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Taxable securities
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184,798 | 658 | 1.43 | 41,621 | 467 | 4.55 | ||||||||||||||||||
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Tax-exempt securities (2)
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27,145 | 296 | 4.39 | 30,956 | 332 | 4.35 | ||||||||||||||||||
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Cash – interest bearing
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318,573 | 199 | 0.25 | 369,793 | 232 | 0.25 | ||||||||||||||||||
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Other investments
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20,828 | 197 | 3.80 | 23,630 | 203 | 3.48 | ||||||||||||||||||
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Interest Earning Assets
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2,141,027 | 25,696 | 4.82 | 2,272,497 | 30,718 | 5.46 | ||||||||||||||||||
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Cash and due from banks
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56,080 | 50,888 | ||||||||||||||||||||||
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Other assets, net
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164,120 | 191,884 | ||||||||||||||||||||||
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Total Assets
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$ | 2,361,227 | $ | 2,515,269 | ||||||||||||||||||||
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Liabilities
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Savings and interest-bearing checking
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$ | 1,053,896 | 472 | 0.18 | $ | 994,530 | 589 | 0.24 | ||||||||||||||||
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Time deposits
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576,967 | 1,952 | 1.36 | 805,645 | 4,356 | 2.19 | ||||||||||||||||||
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Other borrowings
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83,384 | 1,172 | 5.65 | 104,907 | 1,323 | 5.11 | ||||||||||||||||||
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Interest Bearing Liabilities
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1,714,247 | 3,596 | 0.84 | 1,905,082 | 6,268 | 1.33 | ||||||||||||||||||
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Non-interest bearing deposits
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504,019 | 448,979 | ||||||||||||||||||||||
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Other liabilities
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39,252 | 44,231 | ||||||||||||||||||||||
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Shareholders’ equity
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103,709 | 116,977 | ||||||||||||||||||||||
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Total liabilities and shareholders’ equity
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$ | 2,361,227 | $ | 2,515,269 | ||||||||||||||||||||
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Net Interest Income
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$ | 22,100 | $ | 24,450 | ||||||||||||||||||||
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Net Interest Income as a Percent of Average Interest Earning Assets
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4.14 | % | 4.34 | % | ||||||||||||||||||||
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(1)
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All domestic, except for $0.03 million for the three months ended March 31, 2011, of average payment plan receivables included in taxable loans for customers domiciled in Canada.
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(2)
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Interest on tax-exempt loans and securities is not presented on a fully tax equivalent basis due to the current net operating loss carryforward position and the deferred tax asset valuation allowance.
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(3)
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Annualized.
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14
Commercial Loan Portfolio Analysis as of March 31, 2012
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Total Commercial Loans
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||||||||||||||||||||
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Watch Credits
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Percent of
Loan
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|||||||||||||||||||
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Loan Category
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All Loans
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Performing
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Non- performing
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Total
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Category in
Watch Credit
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(Dollars in thousands)
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Land
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$ | 16,955 | $ | 1,147 | $ | 4,302 | $ | 5,449 | 32.1 | % | ||||||||||
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Land Development
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17,213 | 9,330 | 947 | 10,277 | 59.7 | |||||||||||||||
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Construction
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15,513 | 478 | 330 | 808 | 5.2 | |||||||||||||||
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Income Producing
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276,572 | 51,462 | 11,000 | 62,462 | 22.6 | |||||||||||||||
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Owner Occupied
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182,242 | 23,253 | 6,074 | 29,327 | 16.1 | |||||||||||||||
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Total Commercial Real Estate Loans (1)
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$ | 508,495 | $ | 85,670 | 22,653 | $ | 108,323 | 21.3 | ||||||||||||
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Other Commercial Loans(1)
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$ | 139,511 | $ | 19,109 | 1,942 | $ | 21,051 | 15.1 | ||||||||||||
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Total non-performing commercial loans
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$ | 24,595 | ||||||||||||||||||
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(1)
|
The total of these two categories is different than the March 31, 2012, Consolidated Statement of Financial Condition due primarily to loans in process.
|
15