Exhibit 99.2
INDEPENDENT BANK CORPORATION AND SUBSIDIARIES
Supplemental Data
Non-performing assets
December 31, | ||||||||
---|---|---|---|---|---|---|---|---|
2006 | 2005 | |||||||
(dollars in thousands) | ||||||||
Non-accrual loans | $ | 35,683 | $ | 11,546 | ||||
Loans 90 days or more past due and | ||||||||
still accruing interest | 3,479 | 4,862 | ||||||
Restructured loans | 60 | 84 | ||||||
Total non-performing loans | 39,222 | 16,492 | ||||||
Other real estate | 3,153 | 2,147 | ||||||
Total non-performing assets | $ | 42,375 | $ | 18,639 | ||||
As a percent of Portfolio Loans | ||||||||
Non-performing loans | 1.58 | % | 0.70 | % | ||||
Allowance for loan losses | 1.08 | 0.95 | ||||||
Non-performing assets to total assets | 1.24 | 0.56 | ||||||
Allowance for loan losses as a percent of | ||||||||
non-performing loans | 69 | 136 |
Allowance for loan losses
Twelve months ended December 31, | ||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
2006 | 2005 | |||||||||||||
Loan Losses | Unfunded Commitments | Loan Losses | Unfunded Commitments | |||||||||||
(in thousands) | ||||||||||||||
Balance at beginning of period | $ | 22,420 | $ | 1,820 | $ | 24,162 | $ | 1,846 | ||||||
Additions (deduction) | ||||||||||||||
Provision charged to operating expense | 16,283 | 61 | 7,832 | (26 | ) | |||||||||
Recoveries credited to allowance | 2,237 | 1,518 | ||||||||||||
Loans charged against the allowance | (14,061 | ) | (11,092 | ) | ||||||||||
Balance at end of period | $ | 26,879 | $ | 1,881 | $ | 22,420 | $ | 1,820 | ||||||
Net loans charged against the allowance to | ||||||||||||||
average Portfolio Loans (annualized) | 0.48 | % | 0.43 | % |
Alternative Sources of Funds
December 31, 2006 | December 31, 2005 | |||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Amount | Average Maturity | Rate | Amount | Average Maturity | Rate | |||||||||||||||
(dollars in thousands) | ||||||||||||||||||||
Brokered CDs(1) (2) | $ | 1,055,010 | 1.9 years | 4.72 | % | $ | 1,009,804 | 1.8 years | 3.79 | % | ||||||||||
Fixed rate FHLB advances(1) | 58,272 | 4.6 years | 5.66 | 51,525 | 6.2 years | 5.65 | ||||||||||||||
Variable rate FHLB advances(1) | 2,000 | 0.5 years | 5.31 | 25,000 | 0.5 years | 4.18 | ||||||||||||||
Securities sold under agreements | ||||||||||||||||||||
to Repurchase(1) | 83,431 | 0.1 years | 5.34 | 137,903 | 0.1 years | 4.41 | ||||||||||||||
Federal funds purchased | 84,081 | 1 day | 5.40 | 80,299 | 1 day | 4.23 | ||||||||||||||
Total | $ | 1,282,794 | 1.8 years | 4.85 | % | $ | 1,304,531 | 1.7 years | 3.96 | % | ||||||||||
(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.
(2) Includes brokered CDs related to discontinued operations of $165,496 and $166,818, at December 31, 2006 and 2005, respectively.
Capitalization
December 31, | ||||||||
---|---|---|---|---|---|---|---|---|
2006 | 2005 | |||||||
(in thousands) | ||||||||
Unsecured debt | $ | 5,000 | $ | 7 ,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 | 22,865 | 21,991 | ||||||
Capital surplus | 200,241 | 179,913 | ||||||
Retained earnings | 31,420 | 41,486 | ||||||
Accumulated other comprehensive income | 3,641 | 4,869 | ||||||
Total shareholders' equity | 258,167 | 248,259 | ||||||
Total capitalization | $ | 325,517 | $ | 317,609 | ||||
Non-Interest Income
Three months ended December 31, | Twelve months ended December 31, | |||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
2006 | 2005 | 2006 | 2005 | |||||||||||
(in thousands) | ||||||||||||||
Service charges on deposit accounts | $ | 5,152 | $ | 4,858 | $ | 19,936 | $ | 19,342 | ||||||
Mepco litigation settlement | 2,800 | |||||||||||||
Net gains (losses) on asset sales | ||||||||||||||
Real estate mortgage loans | 1,264 | 1,167 | 4,593 | 5,370 | ||||||||||
Securities | 256 | 171 | 1,484 | |||||||||||
Title insurance fees | 426 | 503 | 1,724 | 1,962 | ||||||||||
VISA check card interchange income | 900 | 758 | 3,432 | 2,778 | ||||||||||
Bank owned life insurance | 433 | 404 | 1,628 | 1,554 | ||||||||||
Manufactured home loan origination fees | ||||||||||||||
and commissions | 184 | 311 | 884 | 1,216 | ||||||||||
Mutual fund and annuity commissions | 321 | 375 | 1,291 | 1,348 | ||||||||||
Real estate mortgage loan servicing | 605 | 553 | 2,440 | 2,627 | ||||||||||
Other | 1,461 | 1,363 | 5,951 | 5,145 | ||||||||||
Total non-interest income | $ | 10,746 | $ | 10,548 | $ | 44,850 | $ | 42,826 | ||||||
Real Estate Mortgage Loan Activity
Three months ended December 31, | Twelve months ended December 31, | |||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
2006 | 2005 | 2006 | 2005 | |||||||||||
(in thousands) | ||||||||||||||
Real estate mortgage loans originated | $ | 125,031 | $ | 170,336 | $ | 525,849 | $ | 678,409 | ||||||
Real estate mortgage loans sold | 72,298 | 91,689 | 281,285 | 377,265 | ||||||||||
Real estate mortgage loans sold with servicing | ||||||||||||||
rights released | 11,436 | 10,807 | 41,494 | 44,274 | ||||||||||
Net gains on the sale of real estate mortgage loans | 1,264 | 1,167 | 4,593 | 5,370 | ||||||||||
Net gains as a percent of real estate mortgage | ||||||||||||||
loans sold ("Loan Sale Margin") | 1.75 | % | 1.27 | % | 1.63 | % | 1.42 | % | ||||||
SFAS #133 adjustments included in the Loan | ||||||||||||||
Sale Margin | 0.15 | % | (0.10 | %) | 0.05 | % | 0.00 | % |
Capitalized Real Estate Mortgage Loan Servicing Rights
Three months ended December 31, | Twelve months ended December 31, | ||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
2006 | 2005 | 2006 | 2005 | ||||||||||||||||||||
(in thousands) | |||||||||||||||||||||||
Balance at beginning of period | $ | 14,453 | $ | 13,058 | $ | 13,439 | $ | 11,360 | |||||||||||||||
Originated servicing rights capitalized | 726 | 793 | 2,862 | 3,247 | |||||||||||||||||||
Amortization | (348 | ) | (455 | ) | (1,462 | ) | (1,923 | ) | |||||||||||||||
(Increase)/decrease in impairment reserve | (49 | ) | 43 | (57 | ) | 755 | |||||||||||||||||
Balance at end of period | $ | 14,782 | $ | 13,439 | $ | 14,782 | $ | 13,439 | |||||||||||||||
Impairment reserve at end of period | $ | 68 | $ | 11 | $ | 68 | $ | 11 | |||||||||||||||
Non-Interest Expense
Three months ended December 31, | Twelve months ended, December 31, | |||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
2006 | 2005 | 2006 | 2005 | |||||||||||
(in thousands) | ||||||||||||||
Salaries | $ | 9,380 | $ | 8,887 | $ | 37,597 | $ | 35,229 | ||||||
Performance-based compensation | ||||||||||||||
and benefits | 1,536 | 1,226 | 3,200 | 6,844 | ||||||||||
Other benefits | 2,407 | 2,338 | 10,004 | 10,074 | ||||||||||
Compensation and employee | ||||||||||||||
benefits | 13,323 | 12,451 | 50,801 | 52,147 | ||||||||||
Occupancy, net | 2,311 | 2,261 | 9,626 | 8,590 | ||||||||||
Furniture, fixtures and equipment | 1,874 | 1,783 | 7,057 | 6,812 | ||||||||||
Data processing | 1,481 | 1,312 | 5,619 | 4,905 | ||||||||||
Advertising | 988 | 1,205 | 3,997 | 4,311 | ||||||||||
Credit card and bank service fees | 959 | 812 | 3,839 | 2,952 | ||||||||||
Loan and collection | 896 | 1,021 | 3,610 | 4,102 | ||||||||||
Goodwill impairment | 2,963 | 3,575 | ||||||||||||
Communications | 852 | 934 | 3,556 | 3,724 | ||||||||||
Amortization of intangible assets | 600 | 633 | 2,400 | 2,529 | ||||||||||
Loss on receivable from warranty | ||||||||||||||
payment plan seller | 2,400 | 2,400 | ||||||||||||
Supplies | 553 | 529 | 2,113 | 2,247 | ||||||||||
Legal and professional | 516 | 657 | 1,853 | 2,509 | ||||||||||
Other | 1,372 | 1,758 | 5,770 | 6,957 | ||||||||||
Total non-interest expense | $ | 31,088 | $ | 25,356 | $ | 106,216 | $ | 101,785 | ||||||
Average Balances and Tax Equivalent Rates
Three Months Ended December 31, | ||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
2006 | 2005 | |||||||||||||||||||
Average Balance | Interest | Rate | Average Balance | Interest | Rate | |||||||||||||||
(dollars in thousands) | ||||||||||||||||||||
Assets Taxable loans (1) | $ | 2,504,662 | $ | 49,999 | 7.94 | % | $ | 2,369,647 | $ | 45,120 | 7.57 | % | ||||||||
Tax-exempt loans (1,2) | 9,371 | 160 | 6.77 | 5,920 | 102 | 6.84 | ||||||||||||||
Taxable securities | 195,039 | 2,750 | 5.59 | 238,176 | 3,031 | 5.05 | ||||||||||||||
Tax-exempt securities (2) | 245,147 | 4,351 | 7.04 | 259,630 | 4,404 | 6.73 | ||||||||||||||
Other investments | 15,123 | 189 | 4.96 | 17,322 | 179 | 4.10 | ||||||||||||||
Interest Earning Assets - | ||||||||||||||||||||
Continuing Operations | 2,969,342 | 57,449 | 7.69 | 2,890,695 | 52,836 | 7.27 | ||||||||||||||
Cash and due from banks | 52,180 | 48,490 | ||||||||||||||||||
Taxable loans - discontinued operations | 188,208 | 173,040 | ||||||||||||||||||
Other assets, net | 214,064 | 197,485 | ||||||||||||||||||
Total Assets | $ | 3,423,794 | $ | 3,309,710 | ||||||||||||||||
Liabilities | ||||||||||||||||||||
Savings and NOW | $ | 865,784 | 3,875 | 1.78 | $ | 860,510 | 2,595 | 1.20 | ||||||||||||
Time deposits | 1,464,759 | 17,469 | 4.73 | 1,209,878 | 10,493 | 3.44 | ||||||||||||||
Long-term debt | 3,495 | 49 | 5.58 | 5,495 | 64 | 4.62 | ||||||||||||||
Other borrowings | 295,589 | 4,542 | 6.10 | 450,375 | 5,421 | 4.78 | ||||||||||||||
Interest Bearing Liabilities- | ||||||||||||||||||||
Continuing Operations | 2,629,627 | 25,935 | 3.91 | 2,526,258 | 18,573 | 2.92 | ||||||||||||||
Demand deposits | 278,522 | 291,031 | ||||||||||||||||||
Time deposits - discontinued operations | 163,915 | 151,323 | ||||||||||||||||||
Other liabilities | 85,746 | 89,958 | ||||||||||||||||||
Shareholders' equity | 265,984 | 251,140 | ||||||||||||||||||
Total liabilities and shareholders' equity | $ | 3,423,794 | $ | 3,309,710 | ||||||||||||||||
Tax Equivalent Net Interest Income | $ | 31,514 | $ | 34,263 | ||||||||||||||||
Tax Equivalent Net Interest Income | ||||||||||||||||||||
as a Percent of Earning Assets | 4.23 | % | 4.72 | % | ||||||||||||||||
(1) (2) | All domestic Interest on tax-exempt loans and securities is presented on a fully tax equivalent basis assuming a marginal tax rate of 35% |
Average Balances and Tax Equivalent Rates
Twelve Months Ended December 31, | ||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
2006 | 2005 | |||||||||||||||||||
Average Balance | Interest | Rate | Average Balance | Interest | Rate | |||||||||||||||
(dollars in thousands) | ||||||||||||||||||||
Assets | ||||||||||||||||||||
Taxable loans (1) | $ | 2,464,798 | $ | 193,606 | 7.85 | % | $ | 2,262,647 | $ | 167,551 | 7.41 | % | ||||||||
Tax-exempt loans (1,2) | 7,293 | 509 | 6.98 | 6,199 | 454 | 7.32 | ||||||||||||||
Taxable securities | 207,456 | 11,108 | 5.35 | 271,770 | 13,588 | 5.00 | ||||||||||||||
Tax-exempt securities (2) | 248,495 | 17,484 | 7.04 | 255,333 | 17,142 | 6.71 | ||||||||||||||
Other investments | 16,366 | 802 | 4.90 | 17,350 | 713 | 4.11 | ||||||||||||||
Interest Earning Assets - | ||||||||||||||||||||
Continuing Operations | 2,944,408 | 223,509 | 7.59 | 2,813,299 | 199,448 | 7.09 | ||||||||||||||
Cash and due from banks | 53,844 | 57,912 | ||||||||||||||||||
Taxable loans - discontinued operations | 198,335 | 161,111 | ||||||||||||||||||
Other assets, net | 210,190 | 192,840 | ||||||||||||||||||
Total Assets | $ | 3,406,777 | $ | 3,225,162 | ||||||||||||||||
Liabilities | ||||||||||||||||||||
Savings and NOW | $ | 864,528 | 13,604 | 1.57 | $ | 871,599 | 8,345 | 0.96 | ||||||||||||
Time deposits | 1,405,850 | 60,686 | 4.32 | 1,087,830 | 33,560 | 3.09 | ||||||||||||||
Long-term debt | 4,240 | 205 | 4.83 | 6,240 | 287 | 4.60 | ||||||||||||||
Other borrowings | 329,175 | 19,203 | 5.83 | 501,763 | 20,907 | 4.17 | ||||||||||||||
Interest Bearing Liabilities- | ||||||||||||||||||||
Continuing Operations | 2,603,793 | 93,698 | 3.60 | 2,467,432 | 63,099 | 2.56 | ||||||||||||||
Demand deposits | 279,279 | 283,670 | ||||||||||||||||||
Time deposits - discontinued operations | 172,317 | 138,897 | ||||||||||||||||||
Other liabilities | 92,451 | 89,781 | ||||||||||||||||||
Shareholders' equity | 258,937 | 245,382 | ||||||||||||||||||
Total liabilities and shareholders' equity | $ | 3,406,777 | $ | 3,225,162 | ||||||||||||||||
Tax Equivalent Net Interest Income | $ | 129,811 | $ | 136,349 | ||||||||||||||||
Tax Equivalent Net Interest Income | ||||||||||||||||||||
as a Percent of Earning Assets | 4.41 | % | 4.85 | % | ||||||||||||||||
(1) (2) | All domestic Interest on tax-exempt loans and securities is presented on a fully tax equivalent basis assuming a marginal tax rate of 35% |