8-K

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: July 28, 2009

INDEPENDENT BANK CORPORATION

(Exact name of registrant as
specified in its charter)

Michigan	0-7818	38-2032782
(State or other jurisdiction	(Commission File Number)	(IRS Employer
of incorporation)		Identification No.)

230 West Main Street
Ionia, Michigan	48846
(Address of principal executive office)	(Zip Code)

Registrant’s telephone number,
including area code:

(616) 527-9450

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):

o Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

o Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

o Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

o Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Item 2.02. Results of Operations and Financial Condition

On July 28, 2009, Independent Bank Corporation issued a press release announcing its financial results for the quarter ended June 30, 2009. A copy of the press release is attached as Exhibit 99.1. Attached Exhibit 99.2 contains supplemental data to that press release.

The information in this Form 8-K and the attached Exhibits shall not be deemed filed for purposes of Section 18 of the Securities Act of 1934, as amended, nor shall they be deemed incorporated by reference in any filing under the Securities Act of 1933, as amended, except as shall be expressly set forth by specific reference in such filing.

Item 7.01. Regulations FD Disclosure

Attached as Exhibit 99.3 is a slide presentation associated with the second quarter 2009 conference call to be conducted beginning at 3:00 p.m. ET on Tuesday, July 28, 2009. See the press release attached as Exhibit 99.1 to this Current Report on Form 8-K for information about participating in the conference call.

Item 9.01. Financial Statements and Exhibits

Exhibits.

99.1	Press release dated July 28, 2009.
99.2	Supplemental data to the Registrant’s press release dated July 28, 2009.
99.3	Slide presentation dated July 28, 2009.

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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 July 28, 2009	By	/s/ Robert N. Shuster
		Robert N. Shuster,
		Principal Financial Officer

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EX-99.1

Exhibit 99.1

News Release

Independent Bank Corporation
230 West Main Street
Ionia, MI 48846
616.527.9450

For Release:	Immediately
Contact:	Robert Shuster, Chief Financial Officer, 616.522.1765

INDEPENDENT BANK CORPORATION REPORTS
2009 SECOND QUARTER RESULTS

• 2009 second quarter net loss applicable to common stock of $6.2 million ($0.26 per share), with these results impacted by:

• A provision for loan losses of $27.8 million

• Loan and collection costs of $3.2 million

• Loss on other real estate and repossessed assets of $1.9 million

• 2009 second quarter results represent a 68.3% improvement over the first quarter

• Pre-tax, pre-provision core operating earnings remain strong and improved in 2009 over 2008

• Net interest margin grew to 5.25%, which is among the best in the banking industry

• Both non-performing loans and non-performing assets declined on a sequential quarterly basis

• Company remains “well capitalized” for regulatory purposes

IONIA, Mich., July 28, 2009 — Independent Bank Corporation (NASDAQ: IBCP) reported a second quarter 2009 net loss applicable to common stock of $6.2 million, or $0.26 per share, versus net income of $3.3 million, or $0.14 per diluted share, in the prior-year period. The net loss applicable to common stock for the six months ended June 30, 2009 was $25.9 million, or $1.09 per share, compared to net income of $3.7 million, or $0.16 per diluted share, in the prior-year six-month period.

Michael M. Magee, President and CEO of Independent Bank Corporation, commented: “While we are disappointed in the reported loss for the quarter, we remain encouraged by the growth in our pre-tax, pre-provision core operating earnings which rose more than 10% when compared with the year-ago quarter, and by about 3% when compared to first quarter of 2009. Our exceptionally strong net-interest margin, solid level of non-interest income, and effective management of non-credit related costs will help us weather these challenging times.”

Operating Results

The Company’s tax equivalent net interest income totaled $36.1 million during the second quarter of 2009, an increase of $1.6 million, or 4.6% from the year-ago period, and an increase of $1.1 million, or 3.1% from the first quarter of 2009. The Company’s tax equivalent net interest income as a percent of average interest-earning assets (the “net interest margin”) was 5.25% during the second quarter of 2009, compared to 4.68% in the year ago period, and 5.13% in the first quarter of 2009. Average interest-earning assets declined to $2.76 billion in the second quarter of 2009, compared to $2.96 billion in the year ago

quarter and $2.75 billion in the first quarter of 2009. This year-over-year decline in average interest-earning assets primarily reflects a decrease in investment securities.

Service charges on deposits totaled $6.3 million in the second quarter of 2009 - a 2.5% increase from the comparable period in 2008, due primarily to growth in checking accounts. VISA check card interchange income was unchanged at approximately $1.5 million for the second quarter of 2009 compared to the year-ago period.

Securities gains totaled $4.2 million in the second quarter of 2009, versus gains of $0.8 million in the comparable period in 2008. The second quarter 2009 securities gains were primarily due to increases in the fair value and gains on the sale of Bank of America preferred stock. All of this preferred stock was sold by the Company in June 2009.

Gains on the sale of mortgage loans were $3.3 million in the second quarter of 2009, compared to $1.1 million in the year-ago quarter. The increase in gains relates primarily to a sharp increase in loan sales and commitments to originate mortgage loans that are held for sale. This was due to a significant rise in refinancing activity resulting from generally lower mortgage loan interest rates during the first half of 2009. The increased refinancing volumes also led to a 90.6% increase in title insurance fees, to $0.7 million, on a year-over-year basis.

Mortgage loan servicing generated income of $2.3 million in the second quarter of 2009, versus income of $1.5 million in the year-ago period. This growth is due to an increase in the recovery of previously recorded impairment charges ($3.0 million in the second quarter of 2009 versus $1.0 million in the year ago quarter) that was partially offset by a $1.1 million increase in the amortization of capitalized mortgage loan servicing rights. The recovery of previously recorded impairment charges primarily reflects higher mortgage loan interest rates at the end of the second quarter of 2009, resulting in lower estimated future prepayment rates. As a result, capitalized mortgage loan servicing rights increased to $14.5 million at June 30, 2009 compared to $12.0 million at Dec. 31, 2008. The Company services approximately $1.66 billion in mortgage loans for others on which servicing rights have been capitalized.

Non-interest expenses totaled $34.8 million in the second quarter of 2009, compared to $31.2 million in the year-ago period. The rise in non-interest expenses was primarily due to increases in loan and collection expenses (up $1.2 million), losses on other real estate and repossessed assets (up $0.4 million) and FDIC insurance (up $2.3 million). The increases in loan and collection costs and losses on other real estate and repossessed assets resulted from the elevated level of non-performing assets and lower residential housing prices. FDIC insurance expense totaled $2.8 million in the second quarter of 2009 and includes $1.4 million related to an industry-wide special assessment.

Compensation and employee benefit costs declined by $0.5 million, or 3.5%, in the second quarter of 2009 compared to the year-ago period. This decline was due primarily to the elimination of any accruals for bonuses and the elimination of any contribution to the employee stock ownership plan. These compensation cost reductions were partially offset by additional staff added during 2009 to manage non-performing assets and loan collections.

Pre-Tax, Pre-Provision Core Operating Earnings

The Company is presenting pre-tax, pre-provision core operating earnings in this release for purposes of additional analysis of operating results. Pre-tax, pre-provision core operating earnings, as defined by management, represents the Company’s income (loss) excluding: income tax expense (benefit), the provision for loan losses, securities gains or losses, and any impairment charges (including goodwill, losses on other real estate or repossessed assets, and fair-value adjustments) or elevated loan and collection costs caused by this economic cycle.

The following table reconciles pre-tax, pre-provision core operating earnings to consolidated net income (loss) presented in accordance with U.S. generally accepted accounting principles (“GAAP”). Pre-tax, pre-provision core operating earnings is not a measurement of our financial performance under GAAP and should not be considered as an alternative to net income (loss) under GAAP. Pre-tax, pre-provision core operating earnings has limitations as an analytical tool and should not be considered in isolation or as a substitute for analysis of our results as reported under GAAP. However, the Company believes presenting pre-tax, pre-provision core operating earnings provides investors with the ability to gain a further understanding of its underlying operating trends separate from the direct effects of any impairment charges, credit issues, fair value adjustments, securities gains or losses, and challenges inherent in the real estate downturn and other economic cycle issues, and displays a consistent core operating earnings trend before the impact of these challenges. The credit quality section of this release already isolates the challenges and issues related to the credit quality of the Company’s loan portfolio and the impact on its results as reflected in the provision for loan losses.

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Pre-Tax, Pre-Provision Core Operating Earnings
	Quarter Ended
	6/30/09			3/31/09			6/30/08
	(in thousands)
Net income (loss)	$	(5,161	)	$	(18,597	)	$	3,346
Income tax expense (benefit)		(959	)		293			469
Provision for loan losses		27,808			30,838			12,352
Securities (gains) losses		(4,230	)		581			(837	)
Impairment charge (recovery) on mortgage servicing rights		(2,965	)		697			(996	)
Losses on other real estate and repossessed assets		1,939			1,261			1,560
Elevated loan and collection costs (1)		1,977			2,788			781
Pre-Tax, Pre-Provision Core Operating Earnings	$	18,409		$	17,861		$	16,675

⁽¹⁾ Represents the excess amount over a “normalized” level of $1.25 million quarterly.

TARP Capital Purchase Program

On Dec. 12, 2008, the Company issued 72,000 shares of its preferred stock and 3,461,538 warrants to purchase the Company’s common stock (at a strike price of $3.12 per share) to the U.S. Treasury in return for $72.0 million under the Capital Purchase Program (“CPP”). Of the total proceeds, initially $68.4 million was allocated to the preferred stock and $3.6 million was allocated to the warrants (included in capital surplus) based on the relative fair value of each.

In the approximately 200-day period (ending June 30, 2009) since the receipt of the CPP funds, the Company has made $629.0 million of loans. This loan volume includes: $197.2 million of commercial loans (of which $101.5 million were renewals of existing loans), $404.5 million of mortgage loans (of which $217.3 million were refinances of existing loans) and $27.3 million of consumer installment loans (excluding finance receivables). Further, the CPP funds have allowed the Company to continue actively pursuing mortgage loan modifications and work-outs in lieu of foreclosure for those mortgage loan customers experiencing financial difficulty.

Asset Quality

Commenting on asset quality, CEO Magee added: “Our provision for loan losses remained elevated for the second quarter, reflecting the ongoing challenges of continued softness in economic conditions, specifically weakness in loans with underlying collateral values tied to residential real estate. On a positive note, as our primary markets face these challenging conditions, our team’s continued strong efforts to manage our asset base have resulted in a decline in our 30-to-89 day delinquency rates in our mortgage and consumer loan portfolios as of June 30, 2009, and continued low delinquency rates in our commercial loan portfolio. In addition, total non-performing assets declined slightly at June 30, 2009 when compared to the end of the first quarter.”

A breakdown of non-performing loans by loan type is as follows:

Loan Type	6/30/2009			12/31/2008			6/30/2008
	(Dollars in Millions)
Commercial	$	63.0		$	78.1		$	74.4
Consumer/installment		7.8			4.9			3.9
Mortgage		51.4			38.9			30.6
Finance receivables		3.1			3.4			2.5
Total	$	125.3		$	125.3		$	111.4
Ratio of non-performing loans to total portfolio loans		5.13	%		5.09	%		4.34	%
Ratio of non-performing assets to total assets		5.21	%		4.91	%		3.78	%
Ratio of the allowance for loan losses to non-performing loans		52.10	%		46.22	%		45.81	%

Non-performing loans have remained flat since year-end 2008 as an increase in non-performing mortgage loans and consumer loans was substantially offset by a decline in non-performing commercial real estate loans. The decline in non-performing commercial real estate loans is primarily due to net charge-offs and the payoff or other disposition of non-performing credits during the first half of 2009. Non-performing commercial real estate loans largely reflect delinquencies caused by cash flow difficulties encountered by real estate developers in Michigan as they confront a significant decline in sales of real estate. Since the end of 2006, the land, land development, and construction components of the Company’s commercial loan portfolio have declined by nearly 60% and now total $108.1 million at June 30, 2009, representing just 3.6% of total assets. The elevated level of non-performing residential mortgage loans is primarily due to a rise in delinquencies and foreclosures reflecting both weak

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economic conditions and soft residential real estate values in many parts of Michigan. Other real estate and repossessed assets totaled $29.8 million at June 30, 2009, compared to $20.0 million at Dec. 31, 2008, and $11.1 million at June 30, 2008.

The provision for loan losses was $27.8 million and $12.4 million in the second quarters of 2009 and 2008, respectively. The level of the provision for loan losses in each period reflects the Company’s overall assessment of the allowance for loan losses, taking into consideration factors such as loan mix, levels of non-performing and classified loans, and loan net charge-offs. Loan net charge-offs were $20.9 million (3.41% annualized of average loans) in the second quarter of 2009, compared to $11.3 million (1.78% annualized of average loans) in the second quarter of 2008. The second quarter 2009 loan net charge-offs were divided among the following categories: commercial loans, $10.7 million; consumer loans, $1.5 million (including $0.1 million of deposit overdrafts); mortgage loans, $6.5 million; and finance receivables, $2.2 million. The commercial loan and mortgage loan net charge-offs in the second quarter of 2009 primarily reflect write-downs to expected liquidation values for real estate or other collateral securing the loans. At June 30, 2009, the allowance for loan losses totaled $65.3 million, or 2.67% of portfolio loans, compared to $57.9 million, or 2.35% of portfolio loans, at Dec. 31, 2008.

Balance Sheet, Liquidity and Capital

Total assets were $2.98 billion at June 30, 2009, compared to $2.96 billion at Dec. 31, 2008. Loans, excluding loans held for sale, were $2.44 billion at June 30, 2009, compared to $2.46 billion at Dec. 31, 2008. Deposits totaled $2.37 billion at June 30, 2009, an increase of $302.4 million from Dec. 31, 2008. The growth in deposits primarily reflects increases in savings and interest-bearing checking accounts and in brokered certificates of deposit. The Company’s liquidity position remains sound, with approximately $790 million of unused borrowing capacity at June 30, 2009.

Stockholders’ equity totaled $175.2 million at June 30, 2009, or 5.89% of total assets. The Company remains “well capitalized” for regulatory purposes with the following ratios:

										Well
	6/30/2009									Capitalized
Regulatory Capital Ratio	(estimate)			12/31/2008			6/30/2008			Minimum
Tier 1 capital to average assets		7.70	%		8.61	%		7.66	%		5.00	%
Tier 1 capital to risk-weighted assets		9.64	%		11.04	%		9.68	%		6.00	%
Total capital to risk-weighted assets		11.99	%		13.05	%		11.32	%		10.00	%

With regard to the outlook for the remainder 2009, CEO Magee concluded, “We remain cautious in the near-term, but optimistic for the long-term future of Independent Bank Corporation and the markets we serve. The challenges that we face in 2009 as a result of the current economic environment are not unexpected, and our entire team is fully engaged in continuing to prudently manage through this difficult business cycle. Despite these challenges, we remain well-capitalized, and focused on building and maintaining a strong foundation for better performance when the economy improves.”

Conference Call

Michael M. Magee, President and Chief Executive Officer, Robert N. Shuster, Chief Financial Officer, Stefanie M. Kimball, Chief Lending Officer, and William B. Kessel, Chief Operations Officer, will review second quarter 2009 results in a conference call for investors and analysts beginning at 3:00 p.m. ET on Tuesday, July 28, 2009.

To participate in the live conference call, please dial 1-800-860-2442. The call can also be accessed (listen-only mode) via the “Investor Relations” section of the Company’s Web site at IndependentBank.com. A playback of the call can be accessed by dialing 1-877-344-7529 (Replay Passcode # 431656). The replay will be available through Aug. 5, 2009.

In addition, a Power Point presentation associated with the second quarter 2009 conference call will be available on the Company’s Web site at IndependentBank.com in the “Investor Relations” section under the “Presentations” tab beginning on Tuesday, July 28, 2009.

About Independent Bank Corporation

Independent Bank Corporation (NASDAQ: IBCP) is a Michigan-based bank holding company with total assets of approximately $3 billion. Founded as Second National Bank of Ionia in 1864, Independent Bank Corporation now operates over 100 offices across Michigan’s Lower Peninsula through one state-chartered bank subsidiary. This subsidiary (Independent Bank) provides a full range of financial services, including commercial banking, mortgage lending, investments and title services. Payment plans to purchase vehicle service contracts are also available through Mepco Finance Corporation, a wholly owned subsidiary of

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Independent Bank. Independent Bank Corporation is committed to providing exceptional personal service and value to its customers, stockholders and the communities it serves.

For more information, please visit our Web site at: IndependentBank.com

Any statements in this news release that are not historical facts are forward-looking statements as defined in the Private Securities Litigation Reform Act of 1995. Words such as “expect,” “believe,” “intend,” “estimate,” “project,” “may” and similar expressions are intended to identify forward-looking statements. These forward-looking statements are predicated on management’s beliefs and assumptions based on information known to Independent Bank Corporation’s management as of the date of this news release and do not purport to speak as of any other date. Forward-looking statements may include descriptions of plans and objectives of Independent Bank Corporation’s management for future or past operations, products or services, and forecasts of the Company’s revenue, earnings or other measures of economic performance, including statements of profitability, business segments and subsidiaries, and estimates of credit quality trends. Such statements reflect the view of Independent Bank Corporation’s management as of this date with respect to future events and are not guarantees of future performance, involve assumptions and are subject to substantial risks and uncertainties, such as the changes in Independent Bank Corporation’s plans, objectives, expectations and intentions. Should one or more of these risks materialize or should underlying beliefs or assumptions prove incorrect, the Company’s actual results could differ materially from those discussed. Factors that could cause or contribute to such differences are changes in interest rates, changes in the accounting treatment of any particular item, the results of regulatory examinations, changes in industries where the Company has a concentration of loans, changes in the level of fee income, changes in general economic conditions and related credit and market conditions, and the impact of regulatory responses to any of the foregoing. Forward-looking statements speak only as of the date they are made. Independent Bank Corporation does not undertake to update forward-looking statements to reflect facts, circumstances, assumptions or events that occur after the date the forward-looking statements are made. For any forward-looking statements made in this news release or in any documents, Independent Bank Corporation claims the protection of the safe harbor for forward-looking statements contained in the Private Securities Litigation Reform Act of 1995.

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INDEPENDENT BANK CORPORATION AND SUBSIDIARIES

Consolidated Statements of Financial Condition

	June 30,			December 31,
	2009			2008
	(unaudited)
	(in thousands)
Assets
Cash and due from banks	$	79,352		$	57,705
Trading securities		37			1,929
Securities available for sale		196,658			215,412
Federal Home Loan Bank and Federal Reserve Bank stock, at cost		27,854			28,063
Loans held for sale, carried at fair value		66,436			27,603
Loans
Commercial		893,304			976,391
Mortgage		788,893			839,496
Installment		327,444			356,806
Finance receivables		432,326			286,836
Total Loans		2,441,967			2,459,529
Allowance for loan losses		(65,271	)		(57,900	)
Net Loans		2,376,696			2,401,629
Other real estate and repossessed assets		29,760			19,998
Property and equipment, net		73,628			73,318
Bank owned life insurance		45,654			44,896
Goodwill		16,734			16,734
Other intangibles		11,215			12,190
Capitalized mortgage loan servicing rights		14,538			11,966
Accrued income and other assets		38,067			44,802
Total Assets	$	2,976,629		$	2,956,245
Liabilities and Shareholders’ Equity
Deposits
Non-interest bearing	$	330,481		$	308,041
Savings and NOW		974,861			907,187
Retail time		583,409			668,968
Brokered time		480,173			182,283
Total Deposits		2,368,924			2,066,479
Federal funds purchased					750
Other borrowings		257,258			541,986
Subordinated debentures		92,888			92,888
Financed premiums payable		39,015			26,636
Accrued expenses and other liabilities		43,308			32,629
Total Liabilities		2,801,393			2,761,368
Shareholders’ Equity
Preferred stock, Series A, no par value, $1,000 liquidation preference per share—200,000 shares authorized; 72,000 shares issued and outstanding at June 30, 2009 and December 31, 2008		68,806			68,456
Common stock, $1.00 par value—60,000,000 shares authorized; issued and outstanding: 24,029,540 shares at June 30, 2009 and 23,013,980 shares at December 31, 2008		23,824			22,791
Capital surplus		201,192			200,687
Retained earnings (accumulated deficit)		(100,238	)		(73,849	)
Accumulated other comprehensive loss		(18,348	)		(23,208	)
Total Shareholders’ Equity		175,236			194,877
Total Liabilities and Shareholders’ Equity	$	2,976,629		$	2,956,245

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INDEPENDENT BANK CORPORATION AND SUBSIDIARIES

Consolidated Statements of Operations

	Three Months Ended								Six Months Ended
	June 30,			March 31,			June 30,		June 30,
	2009			2009			2008		2009			2008
	(unaudited)
	(in thousands)
Interest Income
Interest and fees on loans	$	45,224		$	44,401		$	46,750	$	89,625		$	94,876
Interest on securities
Taxable		1,705			1,733			2,176		3,438			4,480
Tax-exempt		976			1,107			2,099		2,083			4,346
Other investments		239			324			362		563			719
Total Interest Income		48,144			47,565			51,387		95,709			104,421
Interest Expense
Deposits		8,811			8,548			11,191		17,359			27,403
Other borrowings		3,814			4,670			6,975		8,484			13,412
Total Interest Expense		12,625			13,218			18,166		25,843			40,815
Net Interest Income		35,519			34,347			33,221		69,866			63,606
Provision for loan losses		27,808			30,838			12,352		58,646			23,668
Net Interest Income After Provision for Loan Losses		7,711			3,509			20,869		11,220			39,938
Non-interest Income
Service charges on deposit accounts		6,321			5,507			6,164		11,828			11,811
Net gains (losses) on assets
Mortgage loans		3,262			3,281			1,141		6,543			3,008
Securities		4,230			(581	)		837		3,649			(1,326	)
VISA check card interchange income		1,500			1,415			1,495		2,915			2,866
Mortgage loan servicing		2,349			(842	)		1,528		1,507			1,205
Title insurance fees		732			609			384		1,341			801
Other income		2,617			2,189			2,588		4,806			5,264
Total Non-interest Income		21,011			11,578			14,137		32,589			23,629
Non-interest Expense
Compensation and employee benefits		13,328			12,577			13,808		25,905			27,992
Loan and collection		3,227			4,038			2,031		7,265			3,887
Occupancy, net		2,560			3,048			2,813		5,608			5,927
Data processing		2,010			2,096			1,712		4,106			3,437
Deposit insurance		2,755			1,186			418		3,941			1,251
Furniture, fixtures and equipment		1,848			1,849			1,825		3,697			3,642
Loss on other real estate and repossessed assets		1,939			1,261			1,560		3,200			1,666
Credit card and bank service fees		1,668			1,464			1,174		3,132			2,220
Advertising		1,421			1,442			1,168		2,863			2,268
Other expenses		4,086			4,430			4,682		8,516			9,152
Total Non-interest Expense		34,842			33,391			31,191		68,233			61,442
Income (Loss) Before Income Tax		(6,120	)		(18,304	)		3,815		(24,424	)		2,125
Income tax expense (benefit)		(959	)		293			469		(666	)		(1,562	)
Net Income (Loss)	$	(5,161	)	$	(18,597	)	$	3,346	$	(23,758	)	$	3,687
Preferred dividends		1,075			1,075					2,150
Net Income (Loss) Applicable to Common Stock	$	(6,236	)	$	(19,672	)	$	3,346	$	(25,908	)	$	3,687

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INDEPENDENT BANK CORPORATION AND SUBSIDIARIES
Selected Financial Data

	Three Months Ended									Six Months Ended
	June 30,			March 31,			June 30,			June 30,
	2009			2009			2008			2009			2008
	(unaudited)
Per Common Share Data (A)
Net Income (Loss) Per Common Share
Basic (B)	$	(.26	)	$	(.84	)	$	.15		$	(1.09	)	$	.16
Diluted (C)		(.26	)		(.84	)		.14			(1.09	)		.16
Cash dividends declared		.01			.01			.01			.02			.12
Selected Ratios (annualized) (A)
As a Percent of Average Interest-Earning Assets
Tax equivalent interest income		7.09	%		7.08	%		7.15	%		7.09	%		7.26	%
Interest expense		1.84			1.95			2.47			1.89			2.77
Tax equivalent net interest income		5.25			5.13			4.68			5.20			4.49
Net Income (Loss) to
Average common equity		(22.98	)%		(62.73	)%		5.58	%		(44.24	)%		3.07	%
Average assets		(0.83	)		(2.68	)		0.42			(1.75	)		0.23
Average Shares
Basic (B)		24,029,942			23,365,831			23,015,040			23,700,213			22,954,678
Diluted (C)		24,102,482			23,431,882			23,080,475			23,768,494			23,036,373

(A)	For the three- and six-month periods ended June 30, 2009 and the three-month period ended March 31, 2009, these amounts are calculated using net loss applicable to common stock.
(B)	Average shares of common stock for basic net income per share include shares issued and outstanding during the period and participating share awards.
(C)	Average shares of common stock for diluted net income per share include shares to be issued upon exercise of stock options and stock units for deferred compensation plan for non-employee directors. For any period in which a loss is recorded, the assumed exercise of stock options, and stock units for deferred compensation plan for non-employee directors would have an anti-dilutive impact on the loss per share and thus are ignored in the diluted per share calculation.

8

EX-99.2

Exhibit 99.2

INDEPENDENT BANK CORPORATION AND SUBSIDIARIES
Supplemental Data

Non-performing assets

	June 30,			December 31,
	2009			2008
	(dollars in thousands)
Non-accrual loans	$	119,580		$	122,639
Loans 90 days or more past due and still accruing interest		5,700			2,626
Total non-performing loans		125,280			125,265
Other real estate		29,760			19,998
Total non-performing assets	$	155,040		$	145,263
As a percent of Portfolio Loans
Non-performing loans		5.13	%		5.09	%
Allowance for loan losses		2.67			2.35
Non-performing assets to total assets		5.21			4.91
Allowance for loan losses as a percent of non-performing loans		52			46

Allowance for loan losses

	Six months ended
	June 30,
	2009						2008
				Unfunded						Unfunded
	Loans			Commitments			Loans			Commitments
	(in thousands)
Balance at beginning of period	$	57,900		$	2,144		$	45,294		$	1,936
Additions (deduction)
Provision charged to operating expense		58,798			(152	)		23,875			(207	)
Recoveries credited to allowance		1,494						1,099
Loans charged against the allowance		(52,921	)					(19,164	)
Balance at end of period	$	65,271		$	1,992		$	51,104		$	1,729
Net loans charged against the allowance to average Portfolio Loans (annualized)		4.23	%					1.43	%

9

Alternative Sources of Funds

	June 30,						December 31,
	2009						2008
			Average						Average
	Amount		Maturity	Rate			Amount		Maturity	Rate
	(dollars in thousands)
Brokered CDs	$	480,173	2.0 years		2.67	%	$	182,283	1.1 years		3.63	%
Fixed rate FHLB advances		210,616	1.5 years		1.90			314,214	2.3 years		3.49
Securities sold under agreements to Repurchase		35,000	1.4 years		4.42			35,000	1.9 years		4.42
FRB — Discount borrowing		8,200	.2 years		0.50			189,500	.1 years		0.54
Federal funds purchased								750	1 day		0.25
Total	$	733,989	1.8 years		2.51	%	$	721,747	1.4 years		2.80	%

Capitalization

	June 30,			December 31,
	2009			2008
	(in thousands)
Subordinated debentures	$	92,888		$	92,888
Amount not qualifying as regulatory capital		(2,788	)		(2,788	)
Amount qualifying as regulatory capital		90,100			90,100
Shareholders’ Equity
Preferred stock, Series A, no par value		68,806			68,456
Common stock, par value $1.00 per share		23,824			22,791
Capital surplus		201,192			200,687
Retained earnings (accumulated deficit)		(100,238	)		(73,849	)
Accumulated other comprehensive loss		(18,348	)		(23,208	)
Total shareholders’ equity		175,236			194,877
Total capitalization	$	265,336		$	284,977

10

Non-Interest Income

	Three months ended							Six months ended
	June 30,		March 31,			June 30,		June 30,
	2009		2009			2008		2009		2008
	(in thousands)
Service charges on deposit accounts	$	6,321	$	5,507		$	6,164	$	11,828	$	11,811
Net gains (losses) on assets
Mortgage loans		3,262		3,281			1,141		6,543		3,008
Securities		4,230		(581	)		837		3,649		(1,326	)
VISA check card interchange income		1,500		1,415			1,495		2,915		2,866
Mortgage loan servicing		2,349		(842	)		1,528		1,507		1,205
Mutual fund and annuity commissions		539		453			644		992		1,068
Bank owned life insurance		355		401			484		756		962
Title insurance fees		732		609			384		1,341		801
Other		1,723		1,335			1,460		3,058		3,234
Total non-interest income	$	21,011	$	11,578		$	14,137	$	32,589	$	23,629

Mortgage Loan Activity

	Three months ended									Six months ended
	June 30,			March 31,			June 30,			June 30,
	2009			2009			2008			2009			2008
	(in thousands)
Mortgage loans originated	$	196,927		$	154,608		$	111,316		$	351,535		$	229,558
Mortgage loans sold		158,173			142,636			80,238			300,809			164,687
Mortgage loans sold with servicing rights released		9,174			5,429			11,660			14,603			19,542
Net gains on the sale of mortgage loans		3,262			3,281			1,141			6,543			3,008
Net gains as a percent of mortgage loans sold (“Loan Sale Margin”)		2.06	%		2.30	%		1.42	%		2.18	%		1.83	%
SFAS #133/#159 and SAB #109 adjustments included in the Loan Sale Margin		0.04			0.65			(0.25	)		0.33			0.38

Capitalized Real Estate Mortgage Loan Servicing Rights

	Three months ended						Six months ended
	June 30,						June 30,
	2009			2008			2009			2008
	(in thousands)
Balance at beginning of period	$	11,589		$	15,297		$	11,966		$	15,780
Originated servicing rights capitalized		1,624			754			3,123			1,632
Amortization		(1,640	)		(496	)		(2,819	)		(1,132	)
(Increase)/decrease in impairment reserve		2,965			996			2,268			271
Balance at end of period	$	14,538		$	16,551		$	14,538		$	16,551
Impairment reserve at end of period	$	2,383		$	48		$	2,383		$	48

11

Non-Interest Expense

	Three months ended						Six months ended
	June 30,		March 31,		June 30,		June 30,
	2009		2009		2008		2009		2008
	(in thousands)
Salaries	$	9,815	$	9,669	$	9,727	$	19,484	$	19,883
Performance-based compensation and benefits		747		329		1,443		1,076		2,747
Other benefits		2,766		2,579		2,638		5,345		5,362
Compensation and employee benefits		13,328		12,577		13,808		25,905		27,992
Loan and collection		3,227		4,038		2,031		7,265		3,887
Occupancy, net		2,560		3,048		2,813		5,608		5,927
Data processing		2,010		2,096		1,712		4,106		3,437
Deposit insurance		2,755		1,186		418		3,941		1,251
Furniture, fixtures and equipment		1,848		1,849		1,825		3,697		3,642
Loss on other real estate and repossessed assets		1,939		1,261		1,560		3,200		1,666
Credit card and bank service fees		1,668		1,464		1,174		3,132		2,220
Advertising		1,421		1,442		1,168		2,863		2,268
Communications		1,107		1,045		1,021		2,152		2,036
Legal and professional		705		641		463		1,346		881
Amortization of intangible assets		474		501		761		975		1,554
Supplies		457		469		472		926		1,015
Other		1,343		1,774		1,965		3,117		3,666
Total non-interest expense	$	34,842	$	33,391	$	31,191	$	68,233	$	61,442

12

Average Balances and Tax Equivalent Rates

	Three Months Ended
	June 30,
	2009							2008
	Average							Average
	Balance		Interest		Rate			Balance		Interest		Rate
	(dollars in thousands)
Assets (1)
Taxable loans	$	2,513,367	$	45,157		7.20	%	$	2,578,668	$	46,618		7.26	%
Tax-exempt loans (2)		7,069		104		5.90			11,316		203		7.22
Taxable securities		118,116		1,705		5.79			153,895		2,176		5.69
Tax-exempt securities (2)		88,601		1,536		6.95			189,313		3,346		7.11
Other investments		28,011		239		3.42			27,633		362		5.27
Interest Earning Assets		2,755,164		48,741		7.09			2,960,825		52,705		7.15
Cash and due from banks		74,659							50,637
Other assets, net		165,715							228,550
Total Assets	$	2,995,538						$	3,240,012
Liabilities
Savings and NOW	$	974,994		1,493		0.61		$	993,186		2,454		0.99
Time deposits		979,506		7,318		3.00			872,385		8,737		4.03
Other borrowings		448,714		3,814		3.41			746,983		6,975		3.76
Interest Bearing Liabilities		2,403,214		12,625		2.11			2,612,554		18,166		2.80
Demand deposits		320,920							297,151
Other liabilities		93,861							89,299
Shareholders’ equity		177,543							241,008
Total liabilities and shareholders’ equity	$	2,995,538						$	3,240,012
Tax Equivalent Net Interest Income			$	36,116						$	34,539
Tax Equivalent Net Interest Income as a Percent of Earning Assets						5.25	%						4.68	%

(1)	All domestic
(2)	Interest on tax-exempt loans and securities is presented on a fully tax equivalent basis assuming a marginal tax rate of 35%

13

Average Balances and Tax Equivalent Rates

	Six Months Ended
	June 30,
	2009							2008
	Average							Average
	Balance		Interest		Rate			Balance		Interest		Rate
	(dollars in thousands)
Assets (1)
Taxable loans	$	2,504,582	$	89,457		7.19	%	$	2,571,593	$	94,631		7.39	%
Tax-exempt loans (2)		8,490		259		6.15			10,472		377		7.24
Taxable securities		116,478		3,438		5.95			158,032		4,480		5.70
Tax-exempt securities (2)		95,795		3,286		6.92			197,102		6,932		7.07
Other investments		28,641		563		3.96			26,077		719		5.54
Interest Earning Assets		2,753,986		97,003		7.09			2,963,276		107,139		7.26
Cash and due from banks		67,935							51,549
Other assets, net		162,086							227,250
Total Assets	$	2,984,007						$	3,242,075
Liabilities
Savings and NOW	$	960,032		3,074		0.65		$	995,808		6,019		1.22
Time deposits		917,609		14,285		3.14			985,865		21,384		4.36
Long-term debt									497		12		4.86
Other borrowings		523,630		8,484		3.27			638,211		13,400		4.22
Interest Bearing Liabilities		2,401,271		25,843		2.17			2,620,381		40,815		3.13
Demand deposits		314,762							293,483
Other liabilities		81,267							86,306
Shareholders’ equity		186,707							241,905
Total liabilities and shareholders’ equity	$	2,984,007						$	3,242,075
Tax Equivalent Net Interest Income			$	71,160						$	66,324
Tax Equivalent Net Interest Income as a Percent of Earning Assets						5.20	%						4.49	%

(1)	All domestic
(2)	Interest on tax-exempt loans and securities is presented on a fully tax equivalent basis assuming a marginal tax rate of 35%

14

Commercial Loan Portfolio Analysis as of June 30, 2009

	Total Commercial Loans
									Percent of
			Watch Credits						Loan
					Non-				Category in
Loan Category	All Loans		Performing		performing		Total		Watch Credit
	(dollars in thousands)
Land	$	26,978	$	5,032	$	7,081	$	12,113		44.9	%
Land Development		39,395		8,369		16,799		25,168		63.9	%
Construction		41,718		5,092		12,846		17,938		43.0	%
Income Producing		389,872		64,717		19,135		83,852		21.5	%
Owner Occupied		206,293		31,143		4,610		35,753		17.3	%
Total Commercial Real Estate Loans (1)	$	704,256	$	114,353	$	60,471	$	174,824		24.8	%
Other Commercial Loans(1)	$	188,979	$	28,184		2,482	$	30,666		16.2	%
Total non-performing commercial loans					$	62,953

(1) The total of these two categories is different than the June 30, 2009, Consolidated Statement of Financial Condition due primarily to loans in process.

15

EX-99.3

Exhibit 99.3

Independent Bank Corporation 2nd Quarter 2009 Earnings Conference Call - July 28, 2009 1

Safe Harbor Statement This presentation may contain certain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements include expressions such as "expects," "intends," "believes" and "should" which are necessarily statements of belief as to expected outcomes of future events. Actual results could materially differ from those contained in, or implied by such statements. Independent Bank Corporation undertakes no obligation to release revisions to these forward-looking statements or reflect events or circumstances after the date of this presentation. 2

2nd Quarter 2009 Overview Michael M. Magee, President and Chief Executive Officer 3

2Q09: High-Level Overview 4 Foundation Remains Solid Core pre-tax, pre-provision earnings showed solid growth on a year-over-year and linked quarter basis TE net interest margin continued to expand - currently among best in the industry Regulatory capital remains above minimum to be "well capitalized" Challenging First-Half Environment Continued weakness in the Michigan economy adversely impacted results $27.8 million loan loss provision in 2Q09 driven primarily by significant declines in underlying collateral values Working with borrowers to identify best possible outcomes Operational Achievements Proactive efforts to manage our credits resulted in improvements in commercial non-performing loans and retail loan delinquency levels Linked-quarter NPA's declined for the first time in over three years We have made $629.0 million in loans (since the investment of CPP funds through 2Q09) Operational challenges Economic weakness likely to persist - sustained focus on fundamentals of community banking

2nd Quarter 2009 Financial Review Robert N. Shuster, Executive Vice President and CFO 5

2nd Quarter 2009 Recap 6 Net loss of $5.2 million and net loss applicable to common stock of $6.2 million or 26 cents per share Elevated provision for loan losses as well as other credit related costs (loss on ORE and loan and collection expenses) drove the loss Gain on securities ($4.2 million) and partial recovery of previously recorded impairment charges on capitalized mortgage loan servicing rights ($3.0 million) somewhat offset elevated credit costs Total assets up slightly at $2.98 billion Increase in total assets temporary, due to rise in loans held for sale Portfolio loans declined by $5.0 million (or 0.8% annualized) 2Q 2009 loan origination volume strong, mortgage loan origination volume rose to $196.9 million due to refinancing activity Deposits increased by $207.9 million and borrowings declined by $187.1 million due to liability duration extension program

2nd Quarter 2009 Recap (continued) 7 Positive Factors Growth in the TE net interest margin on both a year-over-year and sequential quarterly basis Growth in non-interest income on both a year-over-year and sequential quarterly basis due primarily to gains on mortgage loan sales, gains on securities and recovery of previously recorded impairment charges on capitalized MSR's Excluding the increases in loan and collection costs, loss on ORE and FDIC insurance, total non-interest expenses declined by about 1% on a year-over-year basis Company remains well capitalized Challenges Credit costs Weak Michigan economy Tangible common equity component of total capital

Valuation Allowance On Deferred Tax Asset 8 Current accounting impact Total net deferred tax asset of $43.7 million at 6/30/09. The associated valuation allowance is also $43.7 million at 6/30/09 (of which $36.2 million was established at 12/31/08). Income tax benefit of $0.959 million in 2Q 2009 relates to benefit associated with other comprehensive income that was partially offset by some state income taxes and some federal alternative minimum taxes. "More likely than not" accounting standard. 2009 and 2008 tax loss and tough operating environment. Potential future accounting implications In the near term neither pre-tax income or pre-tax losses will be tax effected (i.e. they will drop to the bottom line). The net deferred tax asset and related valuation allowance will continue to be evaluated quarterly. Asset is not lost, remains available to offset future taxable income. Total valuation allowance of $43.7 million equals $1.82 per common share.

Pre-Tax, Pre-Provision Core Operating Earnings 2Q09 1Q09 2Q08 Net income (loss) $(5,161) $(18,597) $ 3,346 Income tax exp. (benefit) (959) 293 469 Provision for loan losses 27,808 30,838 12,352 Securities (gains) losses (4,230) 581 (837) MSR impairment (recovery) charge (2,965) 697 (996) Losses on ORE and ORA 1,939 1,261 1,560 Elevated loan/collection costs 1,977 2,788 781 Total $ 18,409 $ 17,861 $16,675 9

Tax Equivalent Net Interest Margin 2Q 07 3Q 07 4Q 07 1Q 08 2Q 08 3Q 08 4Q 08 1Q 09 2Q 09 Yield on Earning Assets 0.077 0.0775 0.0765 0.0737 0.0715 0.0702 0.0711 0.0708 0.0709 Cost of Funds 0.0343 0.0344 0.0343 0.0307 0.0247 0.0226 0.0231 0.0195 0.0184 Net Interest Margin 0.0427 0.0431 0.0422 0.043 0.0468 0.0476 0.048 0.0513 0.0525 10

TE Net Interest Income 2Q 07 3Q 07 4Q 07 1Q 08 2Q 08 3Q 08 4Q 08 1Q 09 2Q 09 Net Interest Income 32068 31881 31521 31785 34539 34997 33387 35044 36116 11

TE Net Interest Income - Continued 12 Items impacting 2Q 2009 Reversal of interest on non-accrual loans of $0.787 million - compared to $0.863 million in 1Q'09 and $0.609 million in 2Q '08. Non-accrual loans averaged $121.5 million compared to $127.5 million in 1Q'09 and $104.4 million in 2Q '08. Average interest-earning assets totaled $2.755 billion compared to $2.755 billion in 1Q'09 and $2.961 billion in 2Q '08.

TE Net Interest Income Sensitivity at 6/30/09 (a) Interest rate change TE Net Interest Income TE Net Interest Margin 200 basis point rise $150,519 5.64% 100 basis point rise 150,027 5.63% Base case scenario (b) 150,951 5.66% 100 basis point decline 149,549 5.61% 200 basis point decline 147,596 5.53% 13 (a) Simulation analyses calculate the change in TE net interest income and the change in the TE net interest margin under immediate parallel shifts in interest rates over the next 12 months based on a static balance sheet. (b) 2Q 2009 annualized actual TE net interest income was $144.9 million and actual TE net interest margin was 5.25%.

Non-Interest Income Category ($ in 000's) 2Q09 1Q09 2Q08 Total non-interest income $21,011 $11,578 $14,137 Service charges - deposits 6,321 5,507 6,164 VISA check card income 1,500 1,415 1,495 Gain (loss) on securities 4,230 (581) 837 Net gains - mortgage loan sales 3,262 3,281 1,141 Mortgage loan servicing 2,349 (842) 1,528 Mutual fund and annuity commissions Title insurance fees 539 732 453 609 644 384 14

Non-Interest Expense Category ($ in 000's) 2Q09 1Q09 2Q08 Total non-interest expense $34,842 $33,391 $31,191 Compensation & employee benefits 13,328 12,577 13,808 Occupancy 2,560 3,048 2,813 Credit card and bank service fees 1,668 1,464 1,174 Advertising 1,421 1,442 1,168 Loan and collection 3,227 4,038 2,031 Loss on ORE and ORA FDIC insurance 1,939 2,755 1,261 1,186 1,560 418 15

Provision for Loan Losses 2Q 07 3Q 07 4Q 07 1Q 08 2Q 08 3Q 08 4Q 08 1Q 09 2Q 09 Provison for Loan Losses 14893 10735 9393 11316 12352 19788 28831 30838 27808 16

Asset Quality Measures - Non-Performing Loans Non-performing loans by loan type ($ in 000's) 6/30/09 3/31/09 6/30/08 Commercial $ 62,953 $ 68,899 $ 74,438 Mortgage 51,406 50,765 30,575 Consumer/installment 7,783 6,858 3,897 Finance receivables 3,138 2,524 2,494 Total $125,280 $129,046 $111,404 As a % of total loans 5.13% 5.27% 4.34% . 17

Allowance for Loan Losses Allocation ($ in 000's) 6/30/09 3/31/09 6/30/08 Specific loan allocations $17,461 $15,057 $15,907 Adversely rated loans 11,492 9,393 10,305 Historical losses 22,830 21,464 14,905 Other factors/subjective 13,488 12,391 9,987 Total $65,271 $58,305 $51,104 As a % of portfolio loans 2.67% 2.38% 1.99% 18

Analysis of the Allowance for Loan Losses Loan type ($ in 000's) Loan Balance Allocated Allowance % of Loan Balance Commercial $ 893,304 $38,329 4.29% Mortgage 788,893 18,261 2.31% Consumer/installment 327,444 7,841 2.39% Finance receivables 432,326 840 0.19% Total $2,441,967 $65,271 2.67% . 19

Asset Quality Measures - Net Loan Charge-Offs Net loan charge-offs by loan type ($ in 000's) 2Q09 1Q09 4Q08 3Q08 Commercial $10,697 $23,776 $17,626 $12,314 Mortgage 6,491 4,559 3,564 3,698 Consumer 1,386 1,264 1,624 1,116 Overdrafts 116 122 247 248 Finance receivables 2,218 798 976 (5) Total $20,908 $30,519 $24,037 $17,371 As a % of average loans 3.41% 5.05% 3.83% 2.69% 20

Securities Available for Sale at 6/30/09 Category ($ in 000's) Cost Basis "Fair" Value Difference Private label CMO's/asset backed (1) $ 51,120 $ 44,343 $ (6,777) Agency MBS 53,439 54,328 889 Bank trust preferred (2) 17,882 14,074 (3,808) Bank of America Series E preferred (3) -- -- -- Municipal securities 84,395 83,913 (482) Totals $206,836 $196,658 $(10,178) Totals Totals Totals 21 Ratings distribution (based on fair values): 64% AAA; 11% AA; 8% A; 4% BAA; and 13% sub-investment grade. All individual bank issues, no CDO's. These shares were all sold in June 2009.

Regulatory Capital Ratios (Independent Bank Corporation) Category Estimated 6/30/09 Actual 3/31/09 Actual 6/30/08 Tier 1 capital to average assets 7.70% 7.97% 7.66% Tier 1 capital to risk-weighted assets 9.64% 9.97% 9.68% Total capital to risk-weighted assets 11.99% 12.22% 11.32% 22

Liquidity and Capital 23 Liquidity Cash on hand at parent company of $25 million at June 30, 2009 Independent Bank has approximately $790 million in unused borrowing capacity at June 30, 2009 Have executed a strategy to pay down FRB discount window and TAF borrowings and short-term FHLB advances and replace with longer-term callable brokered CD's Capital The FRB issued SR09-4 in 1Q 2009, this document states that "voting common shareholders' equity should be the dominant element within Tier 1 capital" Tangible common equity (TCE) equal to 42% of Tier 1 capital at 6/30/09 (was 71% to 77% between 2004 and 2006) TCE (as measured for regulatory purposes) to tangible assets ratio of approximately 3.26% at 6/30/09

2Q 2009 Commercial Credit Review Stefanie M. Kimball, Executive Vice President and Chief Lending Officer 24

2nd Quarter 2009 Commercial Lending Summary Positive Trends 55% decline in net charge offs to $10.7 million as compared to 1st quarter 2009's $23.8 million level. 12% (or $8 million) decline in nonaccrual loans during the quarter and 23% (or $17 million) reduction since year end, aided by transactions negotiated by Special Assets team. 5% (or $4 million) decline in nonperforming assets (nonaccrual loans, 90+ delinquency and other real estate owned) during 2nd quarter. 30+ Delinquencies for accruing loans well managed at 1.8% or $16 million. Challenges Significant headwinds from the Michigan economy continue. Level of watch credits increased by $17 million and was flat compared to year end. Properties in other real estate owned continue to increase as credits move through the workout cycle, offsetting sales. 25

Commercial Loan Outstanding Balances $37 million in new and renewed loan volume in 2nd Quarter offset by repayments Overall commercial loan balances decreased by $47 million during 2nd Quarter 2009 26

Portfolio Segmentation High-risk commercial real estate categories of land, land development and construction represent a relatively small proportion of total portfolio and a high percentage of loans are already in watch category and/or have been charged down Strategic direction continues to re-shape portfolio with shift towards C & I and away from certain commercial real estate segments which commenced mid-2007 27 27

Watch Credits Watch credits increased by $17 million and were flat compared to year end. Inflow of new watch credits up slightly from 1st quarter after consideration of lower charge offs. 28

Commercial 30+ Day Delinquency for Accruing Loans Commercial 30+ day delinquency remains well managed at 1.8% of the portfolio Note: Graph includes all loans over 30 days past due still accruing. 29

Commercial Loan Non-Accruals Commercial loan non-accruals decreased $8 million during 2Q09 as a result of workout team's negotiations. Actual liquidations at rates at least twice what could be achieved in the loan sale market. Inflow of new non-accrual loans is consistent Level of commercial loan non-accruals remains elevated 30

Composition of Nonaccrual Loans 59% of Nonaccrual loans are in Land, Land Development and Construction. Total average write-down of contractual loan balance to Nonaccrual is 51%. Breakdown by Segment: Granularity of Commercial Nonaccruals: 31 31

Commercial Non Performing Assets 4 32 Commercial Non Performing Assets Decline 5 % with More Loans Migrating into ORE

Commercial Loan Net Charge-Offs Net Charge-offs decrease 55% in the 2nd quarter 2009. 33

Comprehensive Implementation of Credit Best Practices Quarterly Watch Process to proactively manage high risk loans is in place. Risk Ratings are independently assigned and structured based on recommendations made upfront by Credit Officers. Special Assets Group established to provide more effective management of our most troubled loans. A select group of law firms supports the team. The group has been expanded with seasoned lenders and collections professionals and an in-house senior attorney has been added. Several commercial lenders focus exclusively on facilitating sales transactions. Loan Review provides portfolio/individual loan feedback to evaluate the effectiveness of processes by market. New Manager in place. Accountability ensured with management by objectives for each Lender and Senior Lender that emphasize credit quality. Risk Based Pricing has been enhanced with a new pricing matrix and minimum hurdle rates. Collateral Monitoring enhancements continue for both Commercial Real Estate and C & I Lending. Training for lending staff on all collateral types and appropriate collateral monitoring conducted. Centralized resources provide ongoing support. Portfolio Concentrations are monitored with select loan types encouraged. SBA lending expanding with training for staff, increased marketing efforts and wider array of products offered. Outside Real Estate Experts leveraged help plan liquidation strategies and to manage diverse commercial ORE properties. 34

2nd Quarter 2009 Retail Credit Review Brad Kessel, Executive Vice President and COO 35

Retail Nonperforming Loans (as percent of outstandings) 36 Michigan Unemployment Statistics Source: Michigan Labor Market Information http://www.milmi.org/cgi/dataanalysis/AreaSelection.asp?tableName=Labforce

Retail Nonperforming Loans (as percent of outstandings) 37 Michigan Residential Real Estate Market

Retail Nonperforming Loans (as percent of outstandings) 38 Michigan Residential Sales Statistics Historical % Change in Average Sales Price Source: Michigan Association of Realtors http://www.mirealtors.com/content/housingstatistics.htm

Retail Loan Balances 39 Retail Loan Balances

Retail Loan Production 40 Retail Loan Production

Retail Nonperforming Loans (as percent of outstandings) 41 Retail Loan Workout Summary

42 Retail Past Dues (as percent of outstanding)

Retail 30 to 89 Day Delinquency (in dollars) 43 Retail 30 to 89 Day Delinquency (in dollars)

Retail Nonperforming Loans (as percent of outstandings) 44 Retail Nonperforming Loans (in dollars)

Retail Nonperforming Loans (as percent of outstandings) 45 Retail Nonperforming Assets (NPL's, ORE and ORA)

Other Real Estate Liquidation History 46 Other Real Estate Liquidation History

Other Real Estate Liquidation History 47 Other Real Estate Unit Sales and Realization Rates

Retail Net Charge Offs (Mortgage, Consumer, Overdrafts) 48 Retail Net Charge Offs

Management's Initiatives Increase in collection resources. Enhancements to collection expertise (consultative sales approach). Formation of loss mitigation committee. Expanded workout options. Creation of Modification Program. Technology enhancements. Creation of ORE management and disposition function. Participation in government assistance programs (HARP, HAMP). Community homeowner advocacy initiatives (Michigan AG Forums, Fed Housing Grants). 49 Management's Initiatives

Q & A Michael M. Magee Jr. President and Chief Executive Officer Robert N. Shuster Executive Vice President and Chief Financial Officer Stefanie M. Kimball Executive Vice President and Chief Lending Officer William (Brad) B. Kessel Executive Vice President and Chief Operations Officer 50

Thank you for participating in the conference call 51