EX-99.2 3 ex99_2.htm EXHIBIT 99.2

Exhibit 99.2

INDEPENDENT BANK CORPORATION AND SUBSIDIARIES
Supplemental Data

Non-performing assets (1)
       
   
March 31,
2015
   
December 31,
2014
 
   
(Dollars in thousands)
 
Non-accrual loans
 
$
14,593
   
$
15,231
 
Loans 90 days or more past due and still accruing interest
   
194
     
7
 
Total non-performing loans
   
14,787
     
15,238
 
Other real estate and repossessed assets
   
5,662
     
6,454
 
Total non-performing assets
 
$
20,449
   
$
21,692
 
                 
As a percent of Portfolio Loans
               
Non-performing loans
   
1.04
%
   
1.08
 
Allowance for loan losses
   
1.73
     
1.84
 
Non-performing assets to total assets
   
0.88
     
0.96
 
Allowance for loan losses as a percent of non-performing loans
   
166.90
     
170.56
 
 
((1)
Excludes loans classified as "trouble debt restructured" that are not past due and vehicle service contract counterparty receivables, net.
 
Troubled debt restructurings ("TDR")
 
   
March 31, 2015
 
   
Commercial
   
Retail
   
Total
 
   
(In thousands)
 
Performing TDR's
 
$
27,904
   
$
71,477
   
$
99,381
 
Non-performing TDR's(1)
   
1,935
     
5,194
(2) 
   
7,129
 
Total
 
$
29,839
   
$
76,671
   
$
106,510
 
 
   
December 31, 2014
 
   
Commercial
   
Retail
   
Total
 
   
(In thousands)
 
Performing TDR's
 
$
29,475
   
$
73,496
   
$
102,971
 
Non-performing TDR's(1)
   
1,978
     
5,225
(2) 
   
7,203
 
Total
 
$
31,453
   
$
78,721
   
$
110,174
 
 
(1) Included in non-performing assets table above.
(2) 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

   
Three months ended
March 31,
 
   
2015
   
2014
 
   
Loans
   
Unfunded
Commitments
   
Loans
   
Unfunded
Commitments
 
   
(Dollars in thousands)
 
Balance at beginning of period
 
$
25,990
   
$
539
   
$
32,325
   
$
508
 
Additions (deductions)
                               
Provision for loan losses
   
(659
)
   
-
     
428
     
-
 
Recoveries credited to allowance
   
990
     
-
     
1,068
     
-
 
Loans charged against the allowance
   
(1,642
)
   
-
     
(3,384
)
   
-
 
Additions (deductions) included in non-interest expense
   
-
     
16
     
-
     
10
 
Balance at end of period
 
$
24,679
   
$
555
   
$
30,437
   
$
518
 
                                 
Net loans charged against the allowance to average Portfolio Loans
   
0.19
%
           
0.69
%
       
 
Capitalization

   
March 31,
2015
   
December 31,
2014
 
   
(In thousands)
 
Subordinated debentures
 
$
35,569
   
$
35,569
 
Amount not qualifying as regulatory capital
   
(1,069
)
   
(1,069
)
Amount qualifying as regulatory capital
   
34,500
     
34,500
 
Shareholders’ equity
               
Common stock
   
351,881
     
352,462
 
Accumulated deficit
   
(94,054
)
   
(96,455
)
Accumulated other comprehensive loss
   
(4,202
)
   
(5,636
)
Total shareholders’ equity
   
253,625
     
250,371
 
Total capitalization
 
$
288,125
   
$
284,871
 
 
2

Non-Interest Income

   
Three months ended
 
   
March 31,
2015
   
December 31,
2014
   
March 31,
2014
 
   
(In thousands)
 
Service charges on deposit accounts
 
$
2,850
   
$
3,280
   
$
3,055
 
Interchange income
   
2,142
     
2,172
     
1,941
 
Net gains (losses) on assets
                       
Mortgage loans
   
2,139
     
1,489
     
1,144
 
Securities
   
85
     
(5
)
   
112
 
Mortgage loan servicing
   
(420
)
   
(598
)
   
264
 
Investment and insurance commissions
   
446
     
509
     
402
 
Bank owned life insurance
   
350
     
350
     
319
 
Title insurance fees
   
256
     
261
     
274
 
Gain on extinguishment of debt
   
-
     
500
     
-
 
Other
   
1,114
     
1,243
     
1,444
 
Total non-interest income
 
$
8,962
   
$
9,201
   
$
8,955
 

Capitalized Mortgage Loan Servicing Rights
 
   
Three months ended
March 31,
 
   
2015
   
2014
 
   
(In thousands)
 
Balance at beginning of period
 
$
12,106
   
$
13,710
 
Originated servicing rights capitalized
   
663
     
382
 
Amortization
   
(759
)
   
(534
)
Change in valuation allowance
   
(692
)
   
(285
)
Balance at end of period
 
$
11,318
   
$
13,273
 
                 
Valuation allowance at end of period
 
$
4,465
   
$
3,140
 
 
3

Motgage Loan Activity

   
Three months ended
 
   
March 31,
2015
   
December 31,
2014
   
March 31,
2014
 
   
(Dollars in thousands)
 
Mortgage loans originated
 
$
79,790
   
$
78,322
   
$
44,241
 
Mortgage loans sold
   
68,727
     
67,490
     
47,118
 
Mortgage loans sold with servicing rights released
   
2,669
     
10,029
     
7,861
 
Net gains on the sale of mortgage loans
   
2,139
     
1,489
     
1,144
 
Net gains as a percent of mortgage loans sold  ("Loan Sales Margin")
   
3.11
%
   
2.21
%
   
2.43
%
Fair value adjustments included in the Loan Sales Margin
   
0.81
     
(0.18
)
   
(0.14
)

Non-Interest Expense

   
Three months ended
 
   
March 31,
2015
   
December 31,
2014
   
March 31,
2014
 
   
(In thousands)
 
Compensation
 
$
8,330
   
$
8,512
   
$
8,308
 
Performance-based compensation
   
1,288
     
1,806
     
912
 
Payroll taxes and employee benefits
   
2,167
     
2,129
     
2,018
 
Compensation and employee benefits
   
11,785
     
12,447
     
11,238
 
Occupancy, net
   
2,419
     
2,197
     
2,483
 
Data processing
   
1,930
     
1,879
     
2,086
 
Loan and collection
   
1,155
     
1,109
     
1,465
 
Furniture, fixtures and equipment
   
952
     
1,010
     
1,069
 
Communications
   
736
     
714
     
789
 
Advertising
   
484
     
646
     
519
 
Legal and professional fees
   
380
     
589
     
401
 
FDIC deposit insurance
   
343
     
332
     
417
 
Interchange expense
   
291
     
179
     
402
 
Supplies
   
213
     
247
     
239
 
Credit card and bank service fees
   
202
     
212
     
263
 
Amortization of intangible assets
   
87
     
134
     
134
 
Vehicle service contract counterparty contingencies
   
29
     
30
     
68
 
Cost related to unfunded lending commitments
   
16
     
4
     
10
 
Provision for loss reimbursement on sold loans
   
(69
)
   
-
     
(481
)
Net gains on other real estate and repossessed assets
   
(39
)
   
(90
)
   
(87
)
Other
   
1,237
     
1,268
     
1,385
 
Total non-interest expense
 
$
22,151
   
$
22,907
   
$
22,400
 
 
4

Average Balances and Tax Equivalent Rates

   
Three Months Ended
March 31,
 
    2015    
  2014
 
   
Average
Balance
   
Interest
   
Rate (3)
   
Average
Balance
   
Interest
   
Rate (3)
 
   
(Dollars in thousands)
 
Assets (1)
                       
Taxable loans
 
$
1,420,272
   
$
17,195
     
4.88
%
 
$
1,369,065
   
$
18,162
     
5.36
%
Tax-exempt loans (2)
   
4,360
     
68
     
6.33
     
5,193
     
82
     
6.40
 
Taxable securities
   
506,411
     
1,758
     
1.39
     
441,783
     
1,383
     
1.27
 
Tax-exempt securities (2)
   
33,877
     
333
     
3.93
     
41,023
     
399
     
3.94
 
Cash - interest bearing
   
75,171
     
70
     
0.38
     
108,855
     
91
     
0.34
 
Other investments
   
19,991
     
268
     
5.44
     
23,419
     
332
     
5.75
 
Interest Earning Assets
   
2,060,082
     
19,692
     
3.86
     
1,989,338
     
20,449
     
4.16
 
Cash and due from banks
   
46,035
                     
45,439
                 
Other assets, net
   
171,878
                     
188,246
                 
Total Assets
 
$
2,277,995
                   
$
2,223,023
                 
                                                 
Liabilities
                                               
Savings and interest-bearing checking
 
$
985,482
     
266
     
0.11
   
$
946,295
     
263
     
0.11
 
Time deposits
   
376,958
     
741
     
0.80
     
443,630
     
1,030
     
0.94
 
Other borrowings
   
48,038
     
454
     
3.83
     
54,329
     
512
     
3.82
 
Interest Bearing Liabilities
   
1,410,478
     
1,461
     
0.42
     
1,444,254
     
1,805
     
0.51
 
Non-interest bearing deposits
   
590,088
                     
511,463
                 
Other liabilities
   
23,955
                     
32,284
                 
Shareholders’ equity
   
253,474
                     
235,022
                 
                                               
Total liabilities and shareholders’ equity
 
$
2,277,995
                   
$
2,223,023
                 
                                                 
Net Interest Income
         
$
18,231
                   
$
18,644
         
                                                 
 Net Interest Income as a Percent of Average Interest Earning Assets
                   
3.57
%
                   
3.79
%
 

(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%
(3) Annualized
 
5

Commercial Loan Portfolio Analysis as of March 31, 2015

   
Total Commercial Loans
 
       
Watch Credits
   
Percent of Loan
 
Loan Category
 
All Loans
   
Performing
   
Non-performing
   
Total
   
Category in Watch Credit
 
   
(Dollars in thousands)
 
Land
 
$
8,274
   
$
771
   
$
358
   
$
1,129
     
13.6
%
Land Development
   
9,630
     
1,720
     
217
     
1,937
     
20.1
 
Construction
   
14,495
     
24
     
-
     
24
     
0.2
 
Income Producing
   
271,337
     
10,228
     
1,187
     
11,415
     
4.2
 
Owner Occupied
   
212,997
     
13,091
     
477
     
13,568
     
6.4
 
Total Commercial Real Estate Loans
 
$
516,733
   
$
25,834
     
2,239
   
$
28,073
     
5.4
 
                                         
Other Commercial Loans
 
$
193,590
   
$
18,281
     
2,466
   
$
20,747
     
10.7
 
Total non-performing commercial loans
                 
$
4,705
                 
 
 
6