Independent Bank (IBCP) 8-K Results of Operations and Financial Condition

Exhibit 99.2

INDEPENDENT BANK CORPORATION AND SUBSIDIARIES

Supplemental Data

Non-performing assets

	September 30, 2023			June 30, 2023			March 31, 2023			December 31, 2022			September 30, 2022
	(Dollars in thousands)
Non-accrual loans	$	6,969		$	6,876		$	6,216		$	5,381		$	5,307
Loans 90 days or more past due and still accruing interest	—			—			—			—			—
Subtotal	6,969			6,876			6,216			5,381			5,307
Less:  Government guaranteed loans	2,254			2,882			2,330			1,660			1,491
Total non-performing loans	4,715			3,994			3,886			3,721			3,816
Other real estate and repossessed assets	443			658			499			455			348
Total non-performing assets	$	5,158		$	4,652		$	4,385		$	4,176		$	4,164
As a percent of Portfolio Loans
Non-performing loans	0.13		%	0.11		%	0.11		%	0.11		%	0.11		%
Allowance for credit losses	1.48			1.49			1.44			1.51			1.50
Non-performing assets to total assets	0.10			0.09			0.09			0.08			0.08
Allowance for credit losses as a percent of non-performing loans	1,176.99			1,351.13			1,300.82			1,409.16			1,340.20

Allowance for credit losses

	Nine months ended September 30,
	2023							2022
	Loans			Securities		Unfunded Commitments		Loans			Securities		Unfunded Commitments
	(Dollars in thousands)
Balance at beginning of period	$	52,435		$	168	$	5,080	$	47,252		$	—	$	4,481
Additions (deductions)
Provision for credit losses	3,840			2,987		—		3,783			168		—
Recoveries credited to allowance	2,082			—		—		2,004			—		—
Assets charged against the allowance	(2,862)			(3,000)		—		(1,897)			—		—
Additions included in non-interest expense	—			—		76		—			—		676
Balance at end of period	$	55,495		$	155	$	5,156	$	51,142		$	168	$	5,157
Net loans charged (recovered) against the allowance to average Portfolio Loans	0.03		%					0.00		%

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Capitalization

	September 30, 2023		December 31, 2022
	(In thousands)
Subordinated debt	$	39,491	$	39,433
Subordinated debentures	39,711		39,660
Amount not qualifying as regulatory capital	(715)		(657)
Amount qualifying as regulatory capital	78,487		78,436
Shareholders’ equity
Common stock	317,145		320,991
Retained earnings	150,157		119,368
Accumulated other comprehensive income (loss)	(92,304)		(92,763)
Total shareholders’ equity	374,998		347,596
Total capitalization	$	453,485	$	426,032

Non-Interest Income

	Three months ended						Nine months ended
	September 30, 2023		June 30, 2023		September 30, 2022		September 30,
							2023		2022
	(In thousands)
Interchange income	$	4,100	$	3,355	$	4,049	$	10,660	$	10,553
Service charges on deposit accounts	3,309		3,134		3,082		9,300		9,135
Net gains (losses) on assets
Mortgage loans	2,099		2,120		2,857		5,475		4,945
Securities	—		—		—		(222)		(275)
Mortgage loan servicing, net	2,668		3,674		4,283		7,068		18,086
Investment and insurance commissions	875		744		750		2,446		2,170
Bank owned life insurance	124		98		59		333		302
Other	2,436		2,292		1,781		6,519		5,525
Total non-interest income	$	15,611	$	15,417	$	16,861	$	41,579	$	50,441

Capitalized Mortgage Loan Servicing Rights

	Three months ended September 30,				Nine months ended September 30,
	2023		2022		2023		2022
	(In thousands)
Balance at beginning of period	$	44,427	$	39,477	$	42,489	$	26,232
Originated servicing rights capitalized	1,159		1,588		3,112		5,237
Change in fair value	471		2,093		456		11,689
Balance at end of period	$	46,057	$	43,158	$	46,057	$	43,158

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Mortgage Loan Activity

	Three months ended									Nine months ended
	September 30, 2023			June 30, 2023			September 30, 2022			September 30,
										2023			2022
	(Dollars in thousands)
Mortgage loans originated	$	172,914		$	160,515		$	209,041		$	446,450		$	796,918
Mortgage loans sold	115,269			99,025			157,511			321,140			522,213
Net gains on mortgage loans	2,099			2,120			2,857			5,475			4,945
Net gains as a percent of mortgage loans sold  ("Loan Sales Margin")	1.82		%	2.14		%	1.81		%	1.70		%	0.95		%
Fair value adjustments included in the Loan Sales Margin	(0.32)		%	1.03		%	0.25		%	0.60		%	(0.54)		%

Non-Interest Expense

	Three months ended						Nine months ended
	September 30, 2023		June 30, 2023		September 30, 2022		September 30,
							2023		2022
	(In thousands)
Compensation	$	13,054	$	13,523	$	12,839	$	39,846	$	37,807
Performance-based compensation	2,955		3,220		4,290		8,420		11,728
Payroll taxes and employee benefits	3,966		3,859		3,472		11,650		11,078
Compensation and employee benefits	19,975		20,602		20,601		59,916		60,613
Data processing	3,071		2,891		2,653		8,953		7,513
Occupancy, net	1,971		1,845		2,062		5,975		6,682
Interchange expense	1,119		1,054		927		3,222		3,200
Furniture, fixtures and equipment	927		929		987		2,782		3,074
FDIC deposit insurance	677		749		591		2,209		1,570
Communications	568		635		723		1,871		2,242
Loan and collection	520		473		772		1,718		1,978
Legal and professional	543		620		573		1,623		1,545
Advertising	360		431		345		1,286		1,585
Amortization of intangible assets	136		137		174		410		639
Supplies	135		122		147		363		431
Correspondent bank service fees	56		59		75		178		232
Costs related to unfunded lending commitments	451		100		382		76		676
Provision for loss reimbursement on sold loans	7		4		12		21		57
Net (gains) losses on other real estate and repossessed assets	1		63		(18)		18		(214)
Other	1,519		1,534		1,360		4,620		4,427
Total non-interest expense	$	32,036	$	32,248	$	32,366	$	95,241	$	96,250

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Average Balances and Tax Equivalent Rates

	Three Months Ended September 30,
	2023						2022
	Average Balance		Interest		Rate (2)		Average Balance		Interest		Rate (2)
	(Dollars in thousands)
Assets
Taxable loans	$	3,687,637	$	51,352	5.54	%	$	3,353,102	$	37,019	4.39	%
Tax-exempt loans (1)	6,897		85		4.89		7,519		92		4.85
Taxable securities	755,054		5,865		3.11		891,677		5,329		2.39
Tax-exempt securities (1)	316,157		3,813		4.82		334,526		2,727		3.26
Interest bearing cash	108,389		1,468		5.37		5,830		28		1.91
Other investments	18,074		271		5.95		17,653		192		4.32
Interest Earning Assets	4,892,208		62,854		5.12		4,610,307		45,387		3.92
Cash and due from banks	61,094						62,340
Other assets, net	238,812						212,194
Total Assets	$	5,192,114					$	4,884,841
Liabilities
Savings and interest-bearing checking	2,598,170		12,272		1.87		2,548,213		2,803		0.44
Time deposits	816,810		8,471		4.11		402,466		822		0.81
Other borrowings	139,199		2,262		6.45		124,531		1,403		4.47
Interest Bearing Liabilities	3,554,179		23,005		2.57	%	3,075,210		5,028		0.65
Non-interest bearing deposits	1,162,816						1,376,279
Other liabilities	102,452						98,232
Shareholders’ equity	372,667						335,120
Total liabilities and shareholders’ equity	$	5,192,114					$	4,884,841
Net Interest Income			$	39,849					$	40,359
Net Interest Income as a Percent of Average Interest Earning Assets					3.25	%					3.49	%

(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

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Average Balances and Tax Equivalent Rates

	Nine Months Ended September 30,
	2023						2022
	Average Balance		Interest		Rate		Average Balance		Interest		Rate (2)
	(Dollars in thousands)
Assets
Taxable loans	$	3,579,569	$	143,203	5.34	%	$	3,155,410	$	96,742	4.09	%
Tax-exempt loans (1)	6,705		239		4.77		7,922		281		4.74
Taxable securities	788,654		17,668		2.99		978,668		14,831		2.02
Tax-exempt securities (1)	320,724		11,009		4.58		336,123		6,950		2.76
Interest bearing cash	71,355		2,769		5.19		36,761		94		0.34
Other investments	17,805		712		5.35		17,806		557		4.18
Interest Earning Assets	4,784,812		175,600		4.90		4,532,690		119,455		3.52
Cash and due from banks	59,163						59,851
Other assets, net	231,872						196,406
Total Assets	$	5,075,847					$	4,788,947
Liabilities
Savings and interest-bearing checking	2,550,973		31,644		1.66		2,528,655		4,232		0.22
Time deposits	745,983		20,320		3.64		365,245		1,376		0.50
Other borrowings	128,846		6,134		6.37		116,774		3,463		3.96
Interest Bearing Liabilities	3,425,802		58,098		2.27	%	3,010,674		9,071		0.40
Non-interest bearing deposits	1,184,548						1,342,228
Other liabilities	100,929						88,281
Shareholders’ equity	364,568						347,764
Total liabilities and shareholders’ equity	$	5,075,847					$	4,788,947
Net Interest Income			$	117,502					$	110,384
Net Interest Income as a Percent of Average Interest Earning Assets					3.28	%					3.25	%

(1) Interest on tax-exempt loans and securities is presented on a fully tax equivalent basis assuming a marginal tax rate of 21%.

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Commercial Loan Portfolio Analysis as of September 30, 2023

	Total Commercial Loans
			Watch Credits						Percent of Loan Category in Watch Credit
Loan Category	All Loans		Performing		Non-accrual		Total
	(Dollars in thousands)
Land	$	10,101	$	9	$	—	$	9	0.1	%
Land Development	17,268		—		—		—		—
Construction	117,206		—		—		—		—
Income Producing	581,938		21,439		—		21,439		3.7
Owner Occupied	452,772		20,506		—		20,506		4.5
Total Commercial Real Estate Loans	$	1,179,285	$	41,954	$	—	$	41,954	3.6
Other Commercial Loans	$	446,836	$	19,388	31		$	19,419	4.3
Total non-performing commercial loans					$	31

Commercial Loan Portfolio Analysis as of December 31, 2022

	Total Commercial Loans
			Watch Credits						Percent of Loan Category in Watch Credit
Loan Category	All Loans		Performing		Non-accrual		Total
	(Dollars in thousands)
Land	$	9,285	$	180	$	—	$	180	1.9	%
Land Development	16,220		—		—		—		—
Construction	114,277		—		—		—		—
Income Producing	469,696		6,177		—		6,177		1.3
Owner Occupied	426,404		16,525		—		16,525		3.9
Total Commercial Real Estate Loans	$	1,035,882	$	22,882	$	—	$	22,882	2.2
Other Commercial Loans	$	430,971	$	9,157	38		$	9,195	2.1
Total non-performing commercial loans					$	38

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