Attached files
| file | filename |
|---|---|
| EX-99.3 - EXHIBIT 99.3 - INDEPENDENT BANK CORP /MI/ | brhc10019313_ex99-3.htm |
| EX-99.1 - EXHIBIT 99.1 - INDEPENDENT BANK CORP /MI/ | brhc10019313_ex99-1.htm |
| 8-K - 8-K - INDEPENDENT BANK CORP /MI/ | brhc10019313_8k.htm |
Exhibit 99.2
INDEPENDENT BANK CORPORATION AND SUBSIDIARIES
Supplemental Data
Non-performing assets (1)
|
December 31,
2020
|
September 30,
2020
|
June 30,
2020
|
March 31,
2020
|
December 31,
2019
|
||||||||||||||||
|
(Dollars in thousands)
|
||||||||||||||||||||
|
Non-accrual loans
|
$
|
8,312
|
$
|
10,481
|
$
|
12,938
|
$
|
17,454
|
$
|
10,178
|
||||||||||
|
Loans 90 days or more past due and still accruing interest
|
-
|
266
|
5
|
-
|
-
|
|||||||||||||||
|
Subtotal
|
8,312
|
10,747
|
12,943
|
17,454
|
10,178
|
|||||||||||||||
|
Less: Government guaranteed loans
|
439
|
510
|
604
|
676
|
646
|
|||||||||||||||
|
Total non-performing loans
|
7,873
|
10,237
|
12,339
|
16,778
|
9,532
|
|||||||||||||||
|
Other real estate and repossessed assets
|
766
|
1,487
|
1,569
|
1,494
|
1,865
|
|||||||||||||||
|
Total non-performing assets
|
$
|
8,639
|
$
|
11,724
|
$
|
13,908
|
$
|
18,272
|
$
|
11,397
|
||||||||||
|
As a percent of Portfolio Loans
|
||||||||||||||||||||
|
Non-performing loans
|
0.29
|
%
|
0.36
|
%
|
0.43
|
%
|
0.62
|
%
|
0.35
|
%
|
||||||||||
|
Allowance for loan losses
|
1.30
|
1.25
|
1.20
|
1.20
|
0.96
|
|||||||||||||||
|
Non-performing assets to total assets
|
0.21
|
0.28
|
0.34
|
0.50
|
0.32
|
|||||||||||||||
|
Allowance for loan losses as a percent of non-performing loans
|
450.01
|
349.43
|
279.60
|
193.68
|
274.32
|
|||||||||||||||
|
(1)
|
Excludes loans classified as "trouble debt restructured" that are not past due.
|
Troubled debt restructurings ("TDR")
|
December 31, 2020
|
||||||||||||
|
Commercial
|
Retail (1)
|
Total
|
||||||||||
|
(In thousands)
|
||||||||||||
|
Performing TDR's
|
$
|
7,956
|
$
|
36,385
|
$
|
44,341
|
||||||
|
Non-performing TDR's (2)
|
1,148
|
1,584
|
(3)
|
2,732
|
||||||||
|
Total
|
$
|
9,104
|
$
|
37,969
|
$
|
47,073
|
||||||
|
December 31, 2019
|
||||||||||||
|
Commercial
|
Retail (1)
|
Total
|
||||||||||
|
(In thousands)
|
||||||||||||
|
Performing TDR's
|
$
|
7,974
|
$
|
39,601
|
$
|
47,575
|
||||||
|
Non-performing TDR's (2)
|
540
|
2,607
|
(3)
|
3,147
|
||||||||
|
Total
|
$
|
8,514
|
$
|
42,208
|
$
|
50,722
|
||||||
|
(1)
|
Retail loans include mortgage and installment loan segments.
|
|
(2)
|
Included in non-performing assets table above.
|
|
(3)
|
Also includes loans on non-accrual at the time of modification until six payments are received on a timely basis.
|
1
Allowance for loan losses
|
Twelve months ended
December 31,
|
||||||||||||||||
|
2020
|
2019
|
|||||||||||||||
|
Loans
|
Unfunded
Commitments
|
Loans
|
Unfunded
Commitments
|
|||||||||||||
|
(Dollars in thousands)
|
||||||||||||||||
|
Balance at beginning of period
|
$
|
26,148
|
$
|
1,542
|
$
|
24,888
|
$
|
1,296
|
||||||||
|
Additions (deductions)
|
||||||||||||||||
|
Provision for loan losses
|
12,463
|
-
|
824
|
-
|
||||||||||||
|
Recoveries credited to allowance
|
3,069
|
-
|
3,961
|
-
|
||||||||||||
|
Loans charged against the allowance
|
(6,251
|
)
|
-
|
(3,525
|
)
|
-
|
||||||||||
|
Additions included in non-interest expense
|
-
|
263
|
-
|
246
|
||||||||||||
|
Balance at end of period
|
$
|
35,429
|
$
|
1,805
|
$
|
26,148
|
$
|
1,542
|
||||||||
|
Net loans charged against the allowance to average Portfolio Loans
|
0.11
|
%
|
(0.02
|
)%
|
||||||||||||
Capitalization
|
December 31,
|
||||||||
|
2020
|
2019
|
|||||||
|
(In thousands)
|
||||||||
|
Subordinated debt
|
$
|
39,281
|
$
|
-
|
||||
|
Subordinated debentures
|
39,524
|
39,456
|
||||||
|
Amount not qualifying as regulatory capital
|
(505
|
)
|
(1,224
|
)
|
||||
|
Amount qualifying as regulatory capital
|
78,300
|
38,232
|
||||||
|
Shareholders’ equity
|
||||||||
|
Common stock
|
339,353
|
352,344
|
||||||
|
Retained earnings
|
40,145
|
1,611
|
||||||
|
Accumulated other comprehensive income (loss)
|
10,024
|
(3,786
|
)
|
|||||
|
Total shareholders’ equity
|
389,522
|
350,169
|
||||||
|
Total capitalization
|
$
|
467,822
|
$
|
388,401
|
||||
2
Non-Interest Income
|
Three months ended
|
Twelve months ended
|
|||||||||||||||||||
|
December 31,
|
September 30,
|
December 31,
|
December 31,
|
|||||||||||||||||
|
2020
|
2020
|
2019
|
2020
|
2019
|
||||||||||||||||
|
(In thousands)
|
||||||||||||||||||||
|
Service charges on deposit accounts
|
$
|
2,218
|
$
|
2,085
|
$
|
2,885
|
$
|
8,517
|
$
|
11,208
|
||||||||||
|
Interchange income
|
2,819
|
3,428
|
2,553
|
$
|
11,230
|
$
|
10,297
|
|||||||||||||
|
Net gains on assets
|
||||||||||||||||||||
|
Mortgage loans
|
15,873
|
20,205
|
6,388
|
62,560
|
19,978
|
|||||||||||||||
|
Securities
|
14
|
-
|
3
|
267
|
307
|
|||||||||||||||
|
Mortgage loan servicing, net
|
(384
|
)
|
(644
|
)
|
1,348
|
(9,350
|
)
|
(3,336
|
)
|
|||||||||||
|
Investment and insurance commissions
|
493
|
530
|
461
|
1,971
|
1,658
|
|||||||||||||||
|
Bank owned life insurance
|
160
|
215
|
298
|
910
|
1,111
|
|||||||||||||||
|
Other
|
1,170
|
1,192
|
1,661
|
4,640
|
6,513
|
|||||||||||||||
|
Total non-interest income
|
$
|
22,363
|
$
|
27,011
|
$
|
15,597
|
$
|
80,745
|
$
|
47,736
|
||||||||||
Capitalized Mortgage Loan Servicing Rights
|
Three months ended
|
Twelve months ended
|
|||||||||||||||
|
December 31,
|
December 31,
|
|||||||||||||||
|
2020
|
2019
|
2020
|
2019
|
|||||||||||||
|
(In thousands)
|
||||||||||||||||
|
Balance at beginning of period
|
$
|
15,403
|
$
|
16,906
|
$
|
19,171
|
$
|
21,400
|
||||||||
|
Originated servicing rights capitalized
|
3,697
|
2,539
|
13,957
|
7,303
|
||||||||||||
|
Change in fair value
|
(2,196
|
)
|
(274
|
)
|
(16,224
|
)
|
(9,532
|
)
|
||||||||
|
Balance at end of period
|
$
|
16,904
|
$
|
19,171
|
$
|
16,904
|
$
|
19,171
|
||||||||
3
|
Three months ended
|
Twelve months ended
|
|||||||||||||||||||
|
December 31,
|
September 30,
|
December 31,
|
December 31,
|
|||||||||||||||||
|
2020
|
2020
|
2019
|
2020
|
2019
|
||||||||||||||||
|
(Dollars in thousands)
|
||||||||||||||||||||
|
Mortgage loans originated
|
$
|
502,491
|
$
|
536,502
|
$
|
302,520
|
$
|
1,820,697
|
$
|
1,011,141
|
||||||||||
|
Mortgage loans sold
|
388,631
|
417,092
|
248,691
|
1,447,031
|
738,910
|
|||||||||||||||
|
Net gains on mortgage loans
|
15,873
|
20,205
|
6,388
|
62,560
|
19,978
|
|||||||||||||||
|
Net gains as a percent of mortgage loans sold ("Loan Sales Margin")
|
4.08
|
%
|
4.84
|
%
|
2.57
|
%
|
4.32
|
%
|
2.70
|
%
|
||||||||||
|
Fair value adjustments included in the Loan Sales Margin
|
(0.53
|
)
|
0.50
|
(0.38
|
)
|
0.47
|
0.22
|
|||||||||||||
Non-Interest Expense
|
Three months ended
|
Twelve months ended
|
|||||||||||||||||||
|
December 31,
|
September 30,
|
December 31,
|
December 31,
|
|||||||||||||||||
|
2020
|
2020
|
2019
|
2020
|
2019
|
||||||||||||||||
|
(In thousands)
|
||||||||||||||||||||
|
Compensation
|
$
|
10,852
|
$
|
10,294
|
$
|
10,726
|
$
|
41,517
|
$
|
41,719
|
||||||||||
|
Performance-based compensation
|
5,485
|
8,310
|
4,336
|
19,725
|
12,066
|
|||||||||||||||
|
Payroll taxes and employee benefits
|
3,702
|
3,350
|
3,484
|
13,539
|
13,716
|
|||||||||||||||
|
Compensation and employee benefits
|
20,039
|
21,954
|
18,546
|
74,781
|
67,501
|
|||||||||||||||
|
Occupancy, net
|
2,120
|
2,199
|
2,216
|
8,938
|
9,013
|
|||||||||||||||
|
Data processing
|
2,374
|
2,215
|
2,308
|
8,534
|
8,905
|
|||||||||||||||
|
Furniture, fixtures and equipment
|
964
|
999
|
1,055
|
4,089
|
4,113
|
|||||||||||||||
|
Interchange expense
|
926
|
831
|
883
|
3,342
|
3,215
|
|||||||||||||||
|
Communications
|
785
|
806
|
728
|
3,194
|
2,947
|
|||||||||||||||
|
Loan and collection
|
708
|
768
|
709
|
3,037
|
2,685
|
|||||||||||||||
|
Conversion related expenses
|
1,541
|
643
|
-
|
2,586
|
-
|
|||||||||||||||
|
Advertising
|
594
|
589
|
515
|
2,230
|
2,450
|
|||||||||||||||
|
Legal and professional fees
|
600
|
566
|
533
|
2,027
|
1,814
|
|||||||||||||||
|
FDIC deposit insurance
|
385
|
411
|
(38
|
)
|
1,596
|
685
|
||||||||||||||
|
Amortization of intangible assets
|
255
|
255
|
272
|
1,020
|
1,089
|
|||||||||||||||
|
Supplies
|
167
|
126
|
164
|
680
|
638
|
|||||||||||||||
|
Branch closure costs
|
-
|
-
|
417
|
|||||||||||||||||
|
Correspondent bank service fees
|
101
|
101
|
111
|
395
|
411
|
|||||||||||||||
|
Costs (recoveries) related to unfunded lending commitments
|
(8
|
)
|
41
|
(95
|
)
|
263
|
246
|
|||||||||||||
|
Provision for loss reimbursement on sold loans
|
40
|
46
|
50
|
200
|
229
|
|||||||||||||||
|
Net (gains) losses on other real estate and repossessed assets
|
(82
|
)
|
46
|
(63
|
)
|
64
|
(90
|
)
|
||||||||||||
|
Other
|
1,198
|
1,045
|
1,409
|
5,020
|
5,882
|
|||||||||||||||
|
Total non-interest expense
|
$
|
32,707
|
$
|
33,641
|
$
|
29,303
|
$
|
122,413
|
$
|
111,733
|
||||||||||
4
|
Three Months Ended
December 31,
|
||||||||||||||||||||||||
2020
|
2019
|
|||||||||||||||||||||||
|
Average
|
Average
|
|||||||||||||||||||||||
|
Balance
|
Interest
|
Rate (2)
|
Balance
|
Interest
|
Rate (2)
|
|||||||||||||||||||
|
(Dollars in thousands)
|
||||||||||||||||||||||||
|
Assets
|
||||||||||||||||||||||||
|
Taxable loans
|
$
|
2,870,011
|
$
|
31,071
|
4.31
|
%
|
$
|
2,767,857
|
$
|
33,061
|
4.75
|
%
|
||||||||||||
|
Tax-exempt loans (1)
|
6,784
|
87
|
5.10
|
8,180
|
100
|
4.85
|
||||||||||||||||||
|
Taxable securities
|
803,322
|
3,299
|
1.64
|
437,087
|
3,031
|
2.77
|
||||||||||||||||||
|
Tax-exempt securities (1)
|
206,256
|
991
|
1.92
|
50,929
|
408
|
3.20
|
||||||||||||||||||
|
Interest bearing cash
|
79,280
|
24
|
0.12
|
38,416
|
163
|
1.68
|
||||||||||||||||||
|
Other investments
|
18,427
|
211
|
4.56
|
18,359
|
249
|
5.38
|
||||||||||||||||||
|
Interest Earning Assets
|
3,984,080
|
35,683
|
3.57
|
3,320,828
|
37,012
|
4.44
|
||||||||||||||||||
|
Cash and due from banks
|
51,497
|
48,095
|
||||||||||||||||||||||
|
Other assets, net
|
159,969
|
160,821
|
||||||||||||||||||||||
|
Total Assets
|
$
|
4,195,546
|
$
|
3,529,744
|
||||||||||||||||||||
|
Liabilities
|
||||||||||||||||||||||||
|
Savings and interest-bearing checking
|
$
|
1,988,438
|
761
|
0.15
|
$
|
1,547,860
|
2,441
|
0.63
|
||||||||||||||||
|
Time deposits
|
477,079
|
2,755
|
2.30
|
611,914
|
3,046
|
1.97
|
||||||||||||||||||
|
Other borrowings
|
108,789
|
953
|
3.48
|
92,154
|
711
|
3.06
|
||||||||||||||||||
|
Interest Bearing Liabilities
|
2,574,306
|
4,469
|
0.69
|
2,251,928
|
6,198
|
1.09
|
||||||||||||||||||
|
Non-interest bearing deposits
|
1,167,241
|
880,325
|
||||||||||||||||||||||
|
Other liabilities
|
74,767
|
51,581
|
||||||||||||||||||||||
|
Shareholders’ equity
|
379,232
|
345,910
|
||||||||||||||||||||||
|
Total liabilities and shareholders’ equity
|
$
|
4,195,546
|
$
|
3,529,744
|
||||||||||||||||||||
|
Net Interest Income
|
$
|
31,214
|
$
|
30,814
|
||||||||||||||||||||
|
Net Interest Income as a Percent of Average Interest Earning Assets
|
3.12
|
%
|
3.70
|
%
|
||||||||||||||||||||
|
(1)
|
Interest on tax-exempt loans and securities is presented on a fully tax equivalent basis assuming a marginal tax rate of 21%.
|
|
(2)
|
Annualized
|
5
Average Balances and Tax Equivalent Rates
|
Twelve Months Ended
December 31,
|
||||||||||||||||||||||||
2020
|
2019
|
|||||||||||||||||||||||
|
Average
|
Average
|
|||||||||||||||||||||||
|
Balance
|
Interest
|
Rate
|
Balance
|
Interest
|
Rate
|
|||||||||||||||||||
|
(Dollars in thousands)
|
||||||||||||||||||||||||
|
Assets
|
||||||||||||||||||||||||
|
Taxable loans
|
$
|
2,863,846
|
$
|
122,875
|
4.29
|
%
|
$
|
2,713,690
|
$
|
133,574
|
4.92
|
%
|
||||||||||||
|
Tax-exempt loans (1)
|
7,145
|
360
|
5.04
|
7,937
|
391
|
4.93
|
||||||||||||||||||
|
Taxable securities
|
635,914
|
12,655
|
1.99
|
397,598
|
11,842
|
2.98
|
||||||||||||||||||
|
Tax-exempt securities (1)
|
137,330
|
3,673
|
2.67
|
52,324
|
1,683
|
3.22
|
||||||||||||||||||
|
Interest bearing cash
|
59,056
|
184
|
0.31
|
48,023
|
818
|
1.70
|
||||||||||||||||||
|
Other investments
|
18,410
|
905
|
4.92
|
18,359
|
1,043
|
5.68
|
||||||||||||||||||
|
Interest Earning Assets
|
3,721,701
|
140,652
|
3.78
|
3,237,931
|
149,351
|
4.61
|
||||||||||||||||||
|
Cash and due from banks
|
49,886
|
37,575
|
||||||||||||||||||||||
|
Other assets, net
|
162,068
|
164,726
|
||||||||||||||||||||||
|
Total Assets
|
$
|
3,933,655
|
$
|
3,440,232
|
||||||||||||||||||||
|
Liabilities
|
||||||||||||||||||||||||
|
Savings and interest-bearing checking
|
$
|
1,821,115
|
3,882
|
0.21
|
$
|
1,453,061
|
10,228
|
0.70
|
||||||||||||||||
|
Time deposits
|
516,306
|
8,784
|
1.70
|
655,718
|
13,197
|
2.01
|
||||||||||||||||||
|
Other borrowings
|
117,904
|
3,551
|
3.01
|
77,254
|
2,922
|
3.78
|
||||||||||||||||||
|
Interest Bearing Liabilities
|
2,455,325
|
16,217
|
0.66
|
2,186,033
|
26,347
|
1.21
|
||||||||||||||||||
|
Non-interest bearing deposits
|
1,054,230
|
867,314
|
||||||||||||||||||||||
|
Other liabilities
|
65,943
|
46,153
|
||||||||||||||||||||||
|
Shareholders’ equity
|
358,157
|
340,732
|
||||||||||||||||||||||
|
Total liabilities and shareholders’ equity
|
$
|
3,933,655
|
$
|
3,440,232
|
||||||||||||||||||||
|
Net Interest Income
|
$
|
124,435
|
$
|
123,004
|
||||||||||||||||||||
|
Net Interest Income as a Percent of Average Interest Earning Assets
|
3.34
|
%
|
3.80
|
%
|
||||||||||||||||||||
|
(1)
|
Interest on tax-exempt loans and securities is presented on a fully tax equivalent basis assuming a marginal tax rate of 21%.
|
6
Commercial Loan Portfolio Analysis as of December 31, 2020
|
Total Commercial Loans
|
||||||||||||||||||||
|
Watch Credits
|
Percent of Loan
|
|||||||||||||||||||
|
Loan Category
|
All Loans
|
Performing
|
Non-accrual
|
Total
|
Category in Watch Credit
|
|||||||||||||||
|
(Dollars in thousands)
|
||||||||||||||||||||
|
Land
|
$
|
14,567
|
$
|
116
|
$
|
-
|
$
|
116
|
0.8
|
%
|
||||||||||
|
Land Development
|
12,176
|
36
|
-
|
36
|
0.3
|
|||||||||||||||
|
Construction
|
68,724
|
36
|
-
|
36
|
0.1
|
|||||||||||||||
|
Income Producing
|
358,603
|
3,699
|
-
|
3,699
|
1.0
|
|||||||||||||||
|
Owner Occupied
|
360,510
|
24,693
|
745
|
25,438
|
7.1
|
|||||||||||||||
|
Total Commercial Real Estate Loans
|
$
|
814,580
|
$
|
28,580
|
745
|
$
|
29,325
|
3.6
|
||||||||||||
|
Other Commercial Loans
|
$
|
427,835
|
$
|
16,059
|
695
|
$
|
16,754
|
3.9
|
||||||||||||
|
Total non-performing commercial loans
|
$
|
1,440
|
||||||||||||||||||
Commercial Loan Portfolio Analysis as of December 31, 2019
|
Total Commercial Loans
|
||||||||||||||||||||
|
Watch Credits
|
Percent of Loan
|
|||||||||||||||||||
|
Loan Category
|
All Loans
|
Performing
|
Non-accrual
|
Total
|
Category in
Watch Credit
|
|||||||||||||||
|
(Dollars in thousands)
|
||||||||||||||||||||
|
Land
|
$
|
11,235
|
$
|
275
|
$
|
735
|
$
|
1,010
|
9.0
|
%
|
||||||||||
|
Land Development
|
12,899
|
-
|
-
|
-
|
0.0
|
|||||||||||||||
|
Construction
|
97,463
|
-
|
-
|
-
|
0.0
|
|||||||||||||||
|
Income Producing
|
409,897
|
15,347
|
-
|
15,347
|
3.7
|
|||||||||||||||
|
Owner Occupied
|
323,694
|
35,485
|
295
|
35,780
|
11.1
|
|||||||||||||||
|
Total Commercial Real Estate Loans
|
$
|
855,188
|
$
|
51,107
|
1,030
|
$
|
52,137
|
6.1
|
||||||||||||
|
Other Commercial Loans
|
$
|
311,507
|
$
|
20,580
|
347
|
$
|
20,927
|
6.7
|
||||||||||||
|
Total non-performing commercial loans
|
$
|
1,377
|
||||||||||||||||||
7