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

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

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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

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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%

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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%

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