INDEPENDENT BANK CORPORATION AND SUBSIDIARIES | ||
Supplemental Data | Exhibit 99.2 |
Non-performing assets
December 31, | ||||||||
---|---|---|---|---|---|---|---|---|
2005 | 2004 | |||||||
(dollars in thousands) | ||||||||
Non-accrual loans | $ | 13,057 | $ | 11,804 | ||||
Loans 90 days or more past due and | ||||||||
still accruing interest | 4,862 | 3,123 | ||||||
Restructured loans | 84 | 218 | ||||||
Total non-performing loans | 18,003 | 15,145 | ||||||
Other real estate | 2,147 | 2,113 | ||||||
Total non-performing assets | $ | 20,150 | $ | 17,258 | ||||
As a percent of Portfolio Loans | ||||||||
Non-performing loans | .70 % | 0.68 % | ||||||
Allowance for loan losses | .90 | 1.11 | ||||||
Non-performing assets to total assets | .60 | 0.56 | ||||||
Allowance for loan losses as a percent of | ||||||||
non-performing loans | 128 | 163 |
Allowance for loan losses
Twelve months ended December 31, | ||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
2005 | 2004 | |||||||||||||
Loan Losses | Unfunded Commitments | Loan Losses | Unfunded Commitments | |||||||||||
(in thousands) | ||||||||||||||
Balance at beginning of period | $ | 24,737 | $ | 1,846 | $ | 16,836 | $ | 892 | ||||||
Additions (deduction) | ||||||||||||||
Allowance on loans acquired | 8,236 | |||||||||||||
Provision charged to operating expense | 8,097 | (26 | ) | 3,355 | 954 | |||||||||
Recoveries credited to allowance | 1,560 | 1,251 | ||||||||||||
Loans charged against the allowance | (11,359 | ) | (4,941 | ) | ||||||||||
Balance at end of period | $ | 23,035 | $ | 1,820 | $ | 24,737 | $ | 1,846 | ||||||
Net loans charged against the allowance to | ||||||||||||||
average Portfolio Loans (annualized) | 0.41 | % | 0.19 | % | ||||||||||
Alternate Sources of Funds
December 31, | |||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
2005 | 2004 | ||||||||||||||||||||||
Amount | Average Maturity | Rate | Amount | Average Maturity | Rate | ||||||||||||||||||
(dollars in thousands) | |||||||||||||||||||||||
Brokered CDs(1) | $ | 1,009,804 | 1.8 years | 3 | .79% | $ | 576,944 | 1.9 years | 2 | .56% | |||||||||||||
Fixed rate FHLB advances(1) | 51,525 | 6.2 years | 5 | .65 | 59,902 | 6.4 years | 5 | .55 | |||||||||||||||
Variable rate FHLB advances(1) | 25,000 | 0.5 years | 4 | .18 | 164,000 | 0.4 years | 2 | .32 | |||||||||||||||
Securities sold under agreements to | |||||||||||||||||||||||
Repurchase(1) | 137,903 | 0.1 years | 4 | .41 | 169,810 | 0.2 years | 2 | .27 | |||||||||||||||
Federal funds purchased | 80,299 | 1 day | 4 | .23 | 117,552 | 1 day | 2 | .44 | |||||||||||||||
Total | $ | 1,304,531 | 1.7 years | 3 | .96% | $ | 1,088,208 | 1.4 years | 2 | .63% | |||||||||||||
(1) Certain of these items have had their average maturity and rate altered through the use of derivative instruments, including pay-fixed and pay-variable interest rate swaps.
Capitalization
December 31, | ||||||||
---|---|---|---|---|---|---|---|---|
2005 | 2004 | |||||||
(in thousands) | ||||||||
Unsecured debt | $ | 7,000 | $ | 9,000 | ||||
Subordinated debentures | 64,197 | 64,197 | ||||||
Amount not qualifying as regulatory capital | (1,847 | ) | (1,847 | ) | ||||
Amount qualifying as regulatory capital | 62,350 | 62,350 | ||||||
Shareholders' Equity | ||||||||
Preferred stock, no par value | ||||||||
Common stock, par value $1.00 per share | 21,991 | 21,195 | ||||||
Capital surplus | 179,913 | 158,797 | ||||||
Retained earnings | 41,486 | 41,795 | ||||||
Accumulated other comprehensive income | 4,869 | 8,505 | ||||||
Total shareholders' equity | 248,259 | 230,292 | ||||||
Total capitalization | $ | 317,609 | $ | 301,642 | ||||
Non-Interest Income
Three months ended December 31, | Twelve months ended December 31, | |||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
2005 | 2004 | 2005 | 2004 | |||||||||||
(in thousands) | ||||||||||||||
Service charges on deposit accounts | $ | 4,719 | $ | 4,570 | $ | 18,761 | $ | 17,089 | ||||||
Net gains (losses) on asset sales | ||||||||||||||
Real estate mortgage loans | 1,167 | 1,353 | 5,370 | 5,956 | ||||||||||
Securities | 256 | (1,200 | ) | 1,484 | 856 | |||||||||
Title insurance fees | 503 | 457 | 1,962 | 2,036 | ||||||||||
VISA check card interchange income | 758 | 600 | 2,778 | 2,054 | ||||||||||
Bank owned life insurance | 404 | 395 | 1,554 | 1,486 | ||||||||||
Manufactured home loan origination fees | ||||||||||||||
and commissions | 311 | 341 | 1,216 | 1,264 | ||||||||||
Mutual fund and annuity commissions | 375 | 285 | 1,348 | 1,260 | ||||||||||
Real estate mortgage loan servicing | 553 | 269 | 2,627 | 1,427 | ||||||||||
Other | 1,363 | 1,189 | 5,145 | 4,370 | ||||||||||
Total non-interest income | $ | 10,409 | $ | 8,259 | $ | 42,245 | $ | 37,798 | ||||||
2
Real Estate Mortgage Loan Activity
Three months ended December 31, | Twelve months ended December 31, | |||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
2005 | 2004 | 2005 | 2004 | |||||||||||
(in thousands) | ||||||||||||||
Real estate mortgage loans originated | $ | 170,336 | $ | 165,192 | $ | 678,409 | $ | 687,894 | ||||||
Real estate mortgage loans sold | 91,689 | 98,239 | 377,265 | 385,445 | ||||||||||
Real estate mortgage loans sold with servicing | ||||||||||||||
rights released | 10,807 | 14,767 | 44,274 | 53,082 | ||||||||||
Net gains on the sale of real estate mortgage loans | 1,167 | 1,353 | 5,370 | 5,956 | ||||||||||
Net gains as a percent of real estate mortgage | ||||||||||||||
loans sold ("Loan Sale Margin") | 1.27 | % | 1.38 | % | 1.42 | % | 1.55 | % | ||||||
SFAS #133 adjustments included in the Loan | ||||||||||||||
Sale Margin | (0.10 | %) | (0.04 | %) | 0.00 | % | 0.00 | % |
Capitalized Real Estate Mortgage Loan Servicing Rights
Three months ended December 31, | Twelve months ended December 31, | |||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
2005 | 2004 | 2005 | 2004 | |||||||||||
(in thousands) | ||||||||||||||
Balance at beginning of period | $ | 13,058 | $ | 11,123 | $ | 11,360 | $ | 8,873 | ||||||
Servicing rights acquired | 1,138 | |||||||||||||
Originated servicing rights capitalized | 793 | 898 | 3,247 | 3,341 | ||||||||||
Amortization | (455 | ) | (491 | ) | (1,923 | ) | (1,948 | ) | ||||||
(Increase)/decrease in impairment reserve | 43 | (170 | ) | 755 | (44 | ) | ||||||||
Balance at end of period | $ | 13,439 | $ | 11,360 | $ | 13,439 | $ | 11,360 | ||||||
Impairment reserve at end of period | $ | 11 | $ | 766 | $ | 11 | $ | 766 | ||||||
Non-Interest Expense
Three months ended December 31, | Twelve months ended December 31, | |||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
2005 | 2004 | 2005 | 2004 | |||||||||||
(in thousands) | ||||||||||||||
Salaries | $ | 8,977 | $ | 11,036 | $ | 35,502 | $ | 35,243 | ||||||
Performance-based compensation | ||||||||||||||
and benefits | 1,440 | 635 | 7,647 | 4,851 | ||||||||||
Other benefits | 2,420 | 2,854 | 10,546 | 9,987 | ||||||||||
Compensation and employee | ||||||||||||||
benefits | 12,837 | 14,525 | 53,695 | 50,081 | ||||||||||
Occupancy, net | 2,340 | 1,921 | 8,863 | 7,539 | ||||||||||
Furniture, fixtures and equipment | 1,835 | 1,649 | 6,985 | 6,122 | ||||||||||
Data processing | 1,372 | 1,130 | 5,112 | 4,462 | ||||||||||
Advertising | 1,290 | 908 | 4,496 | 3,787 | ||||||||||
Loan and collection | 1,036 | 897 | 4,154 | 3,556 | ||||||||||
Communications | 997 | 971 | 3,970 | 3,553 | ||||||||||
Legal and professional | 768 | 723 | 2,850 | 2,718 | ||||||||||
Amortization of intangible assets | 694 | 756 | 2,774 | 2,479 | ||||||||||
Supplies | 548 | 579 | 2,309 | 2,140 | ||||||||||
Mepco claims expense | 2,700 | |||||||||||||
Write-off of uncompleted software | 977 | |||||||||||||
Other | 2,650 | 2,203 | 10,216 | 8,554 | ||||||||||
Total non-interest expense | $ | 26,367 | $ | 26,262 | $ | 105,424 | $ | 98,668 | ||||||
3
Average Balances and Tax Equivalent Rates
Three Months Ended December 31, | ||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
2005 | 2004 | |||||||||||||||||||||
Average Balance | Interest | Rate | Average Balance | Interest | Rate | |||||||||||||||||
(dollars in thousands) | ||||||||||||||||||||||
Assets | ||||||||||||||||||||||
Taxable loans(1) | $ | 2,542,687 | $ | 48,389 | 7 | .57% | $ | 2,254,015 | $ | 39,786 | 7 | .03% | ||||||||||
Tax-exempt loans (1,2) | 5,920 | 102 | 6 | .84 | 7,580 | 126 | 6 | .61 | ||||||||||||||
Taxable securities | 238,176 | 3,031 | 5 | .05 | 271,908 | 3,131 | 4 | .58 | ||||||||||||||
Tax-exempt securities(2) | 259,630 | 4,404 | 6 | .73 | 231,409 | 3,978 | 6 | .84 | ||||||||||||||
Other investments | 17,322 | 179 | 4 | .10 | 17,278 | 228 | 5 | .25 | ||||||||||||||
Interest Earning Assets | 3,063,735 | 56,105 | 7 | .28 | 2,782,190 | 47,249 | 6 | .77 | ||||||||||||||
Cash and due from banks | 48,490 | 63,775 | ||||||||||||||||||||
Other assets, net | 197,485 | 172,284 | ||||||||||||||||||||
Total Assets | $ | 3,309,710 | $ | 3,018,249 | ||||||||||||||||||
Liabilities | ||||||||||||||||||||||
Savings and NOW | $ | 860,510 | 2,595 | 1 | .20 | $ | 859,184 | 1,348 | 0 | .62 | ||||||||||||
Time deposits | 1,361,201 | 12,242 | 3 | .57 | 1,053,244 | 6,940 | 2 | .62 | ||||||||||||||
Long-term debt | 5,495 | 64 | 4 | .62 | 7,495 | 76 | 4 | .03 | ||||||||||||||
Other borrowings | 450,375 | 5,421 | 4 | .78 | 503,277 | 4,413 | 3 | .49 | ||||||||||||||
Interest Bearing Liabilities | 2,677,581 | 20,322 | 3 | .01 | 2,423,200 | 12,777 | 2 | .10 | ||||||||||||||
Demand deposits | 291,031 | 283,933 | ||||||||||||||||||||
Other liabilities | 89,958 | 82,292 | ||||||||||||||||||||
Shareholders' equity | 251,140 | 228,824 | ||||||||||||||||||||
Total liabilities and shareholders' equity | $ | 3,309,710 | $ | 3,018,249 | ||||||||||||||||||
Tax Equivalent Net Interest Income | $ | 35,783 | $ | 34,472 | ||||||||||||||||||
Tax Equivalent Net Interest Income | ||||||||||||||||||||||
as a Percent of Earning Assets | 4 | .65% | 4 | .94% | ||||||||||||||||||
(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% |
4
Average Balances and Tax Equivalent Rates
Twelve Months Ended December 31, | ||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
2005 | 2004 | |||||||||||||||||||||
Average Balance | Interest | Rate | Average Balance | Interest | Rate | |||||||||||||||||
(dollars in thousands) | ||||||||||||||||||||||
Assets | ||||||||||||||||||||||
Taxable loans(1) | $ | 2,423,758 | $ | 179,440 | 7 | .40% | $ | 2,004,544 | $ | 139,517 | 6 | .96% | ||||||||||
Tax-exempt loans(1,2) | 6,199 | 454 | 7 | .32 | 7,637 | 507 | 6 | .64 | ||||||||||||||
Taxable securities | 271,770 | 13,588 | 5 | .00 | 266,704 | 12,497 | 4 | .69 | ||||||||||||||
Tax-exempt securities(2) | 255,333 | 17,142 | 6 | .71 | 212,441 | 14,914 | 7 | .02 | ||||||||||||||
Other investments | 17,350 | 713 | 4 | .11 | 16,283 | 765 | 4 | .70 | ||||||||||||||
Interest Earning Assets | 2,974,410 | 211,337 | 7 | .11 | 2,507,609 | 168,200 | 6 | .71 | ||||||||||||||
Cash and due from banks | 57,912 | 55,728 | ||||||||||||||||||||
Other assets, net | 192,840 | 153,245 | ||||||||||||||||||||
Total Assets | $ | 3,225,162 | $ | 2,716,582 | ||||||||||||||||||
Liabilities | ||||||||||||||||||||||
Savings and NOW | $ | 871,599 | 8,345 | 0 | .96 | $ | 805,885 | 4,543 | 0 | .56 | ||||||||||||
Time deposits | 1,226,727 | 39,016 | 3 | .18 | 912,285 | 23,820 | 2 | .61 | ||||||||||||||
Long-term debt | 6,240 | 287 | 4 | .60 | 4,549 | 177 | 3 | .89 | ||||||||||||||
Other borrowings | 501,763 | 20,907 | 4 | .17 | 480,956 | 16,474 | 3 | .43 | ||||||||||||||
Interest Bearing Liabilities | 2,606,329 | 68,555 | 2 | .63 | 2,203,675 | 45,014 | 2 | .04 | ||||||||||||||
Demand deposits | 283,670 | 240,800 | ||||||||||||||||||||
Other liabilities | 89,781 | 73,574 | ||||||||||||||||||||
Shareholders' equity | 245,382 | 198,533 | ||||||||||||||||||||
Total liabilities and shareholders' equity | $ | 3,225,162 | $ | 2,716,582 | ||||||||||||||||||
Tax Equivalent Net Interest Income | $ | 142,782 | $ | 123,186 | ||||||||||||||||||
Tax Equivalent Net Interest Income | ||||||||||||||||||||||
as a Percent of Earning Assets | 4 | .80% | 4 | .91% | ||||||||||||||||||
(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% |
5