Exhibit 99.2
INDEPENDENT BANK CORPORATION AND SUBSIDIARIES
Supplemental Data
Non-performing assets
June 30, 2007 | December 31, 2006 | |||||||
---|---|---|---|---|---|---|---|---|
(dollars in thousands) | ||||||||
Non-accrual loans | $ | 47,544 | $ | 35,683 | ||||
Loans 90 days or more past due and | ||||||||
still accruing interest | 7,165 | 3,479 | ||||||
Restructured loans | 181 | 60 | ||||||
Total non-performing loans | 54,890 | 39,222 | ||||||
Other real estate | 5,363 | 3,153 | ||||||
Total non-performing assets | $ | 60,253 | $ | 42,375 | ||||
As a percent of Portfolio Loans | ||||||||
Non-performing loans | 2.20 | % | 1.58 | % | ||||
Allowance for loan losses | 1.53 | 1.08 | ||||||
Non-performing assets to total assets | 1.85 | 1.24 | ||||||
Allowance for loan losses as a percent of | ||||||||
non-performing loans | 70 | 69 |
Allowance for loan losses
Six months ended June 30, | ||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
2007 | 2006 | |||||||||||||
Loan Losses | Unfunded Commitments | Loan Losses | Unfunded Commitments | |||||||||||
(in thousands) | ||||||||||||||
Balance at beginning of period | $ | 26,879 | $ | 1,881 | $ | 22,420 | $ | 1,820 | ||||||
Additions (deduction) | ||||||||||||||
Provision charged to operating expense | 22,658 | 374 | 3,979 | (82 | ) | |||||||||
Recoveries credited to allowance | 1,140 | 1,225 | ||||||||||||
Loans charged against the allowance | (12,464 | ) | (4,056 | ) | ||||||||||
Balance at end of period | $ | 38,213 | $ | 2,255 | $ | 23,568 | $ | 1,738 | ||||||
Net loans charged against the allowance to | ||||||||||||||
average Portfolio Loans (annualized) | 0.92 | % | 0.24 | % |
Alternative Sources of Funds
June 30, 2007 | December 31, 2006 | |||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Amount | Average Maturity | Rate | Amount | Average Maturity | Rate | |||||||||||||||
(dollars in thousands) | ||||||||||||||||||||
Brokered CDs(1) | $ | 812,929 | 1.7 years | 4.71 | % | $ | 1,055,010 | 1.9 years | 4.72 | % | ||||||||||
Fixed rate FHLB advances(1) | 43,199 | 5.6 years | 6.08 | 58,272 | 4.6 years | 5.66 | ||||||||||||||
Variable rate FHLB advances(1) | 2,000 | 0.5 years | 5.31 | |||||||||||||||||
Securities sold under agreements to | ||||||||||||||||||||
Repurchase(1) | 83,431 | 0.1 years | 5.34 | |||||||||||||||||
Federal funds purchased | 17,517 | 1 day | 5.50 | 84,081 | 1 day | 5.40 | ||||||||||||||
Total | $ | 873,645 | 1.9 years | 4.80 | % | $ | 1,282,794 | 1.8 years | 4.85 | % | ||||||||||
(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.
1
Capitalization
June 30, 2007 | December 31, 2006 | |||||||
---|---|---|---|---|---|---|---|---|
(in thousands) | ||||||||
Unsecured debt | $ | 4,000 | $ | 5,000 | ||||
Subordinated debentures | 72,269 | 64,197 | ||||||
Amount not qualifying as regulatory capital | (2,169 | ) | (1,847 | ) | ||||
Amount qualifying as regulatory capital | 70,100 | 62,350 | ||||||
Shareholders' Equity | ||||||||
Preferred stock, no par value | ||||||||
Common stock, par value $1.00 per share | 22,586 | 22,865 | ||||||
Capital surplus | 195,014 | 200,241 | ||||||
Retained earnings | 26,138 | 31,420 | ||||||
Accumulated other comprehensive income | 296 | 3,641 | ||||||
Total shareholders' equity | 244,034 | 258,167 | ||||||
Total capitalization | $ | 318,134 | $ | 325,517 | ||||
Non-Interest Income
Three months ended | Six months ended | ||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
June 30, | March 31, | June 30, | June 30, | ||||||||||||||
2007 | 2007 | 2006 | 2007 | 2006 | |||||||||||||
(in thousands) | |||||||||||||||||
Service charges on deposit | |||||||||||||||||
accounts | $ | 6,380 | $ | 4,888 | $ | 5,031 | $ | 11,268 | $ | 9,499 | |||||||
Mepco litigation settlement | 2,800 | ||||||||||||||||
Net gains on assets sales | |||||||||||||||||
Real estate mortgage loans | 1,238 | 1,081 | 1,188 | 2,319 | 2,214 | ||||||||||||
Securities | 128 | 79 | 171 | 207 | 171 | ||||||||||||
VISA check card interchange income | 1,292 | 950 | 871 | 2,242 | 1,662 | ||||||||||||
Real estate mortgage loan servicing | 712 | 527 | 621 | 1,239 | 1,274 | ||||||||||||
Mutual fund and annuity commissions | 467 | 479 | 351 | 946 | 646 | ||||||||||||
Bank owned life insurance | 448 | 449 | 401 | 897 | 793 | ||||||||||||
Title insurance fees | 430 | 414 | 440 | 844 | 882 | ||||||||||||
Manufactured home loan origination fees | |||||||||||||||||
and commissions | 115 | 114 | 247 | 229 | 486 | ||||||||||||
Other | 1,563 | 1,689 | 1,524 | 3,252 | 2,956 | ||||||||||||
Total non-interest income | $ | 12,773 | $ | 10,670 | $ | 10,845 | $ | 23,443 | $ | 23,383 | |||||||
Real Estate Mortgage Loan Activity
Three months ended | Six months ended | ||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
June 30, | March 31, | June 30, | June 30, | ||||||||||||||
2007 | 2007 | 2006 | 2007 | 2006 | |||||||||||||
(in thousands) | |||||||||||||||||
Real estate mortgage loans originated | $ | 129,613 | $ | 116,815 | $ | 135,783 | $ | 246,428 | $ | 254,434 | |||||||
Real estate mortgage loans sold | 77,913 | 69,212 | 73,223 | 147,125 | 133,470 | ||||||||||||
Real estate mortgage loans sold with servicing | |||||||||||||||||
rights released | 12,604 | 11,679 | 8,936 | 24,283 | 16,380 | ||||||||||||
Net gains on the sale of real estate mortgage loans | 1,238 | 1,081 | 1,188 | 2,319 | 2,214 | ||||||||||||
Net gains as a percent of real estate mortgage | |||||||||||||||||
loans sold ("Loan Sale Margin") | 1.59 | % | 1.56 | % | 1.62 | % | 1.58 | % | 1.66 | % | |||||||
SFAS #133 adjustments included in the Loan | |||||||||||||||||
Sale Margin | 0.00 | (0.04 | ) | (0.13 | ) | 0.00 | 0.05 |
2
Capitalized Real Estate Mortgage Loan Servicing Rights
Three months ended June 30, | Six months ended June 30, | |||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
2007 | 2006 | 2007 | 2006 | |||||||||||
(in thousands) | ||||||||||||||
Balance at beginning of period | $ | 14,961 | $ | 13,728 | $ | 14,782 | $ | 13,439 | ||||||
Originated servicing rights capitalized | 776 | 760 | 1,462 | 1,394 | ||||||||||
Amortization | (432 | ) | (371 | ) | (839 | ) | (716 | ) | ||||||
(Increase)/decrease in impairment reserve | 138 | 11 | 38 | 11 | ||||||||||
Balance at end of period | $ | 15,443 | $ | 14,128 | $ | 15,443 | $ | 14,128 | ||||||
Impairment reserve at end of period | $ | 30 | $ | 30 | ||||||||||
Non-Interest Expense
Three months ended | Six months ended | ||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
June 30, | March 31, | June 30, | June 30, | ||||||||||||||
2007 | 2007 | 2006 | 2007 | 2006 | |||||||||||||
(in thousands) | |||||||||||||||||
Salaries | $ | 10,776 | $ | 10,001 | $ | 9,358 | $ | 20,777 | $ | 18,734 | |||||||
Performance-based compensation and benefits | 1,153 | 1,321 | 315 | 2,474 | 1,804 | ||||||||||||
Other benefits | 2,855 | 2,646 | 2,601 | 5,501 | 5,277 | ||||||||||||
Compensation and employee benefits | 14,784 | 13,968 | 12,274 | 28,752 | 25,815 | ||||||||||||
Occupancy, net | 2,735 | 2,614 | 2,420 | 5,349 | 5,107 | ||||||||||||
Furniture, fixtures and equipment | 1,991 | 1,900 | 1,733 | 3,891 | 3,516 | ||||||||||||
Data processing | 1,912 | 1,438 | 1,418 | 3,350 | 2,760 | ||||||||||||
Advertising | 1,341 | 1,152 | 1,016 | 2,493 | 2,003 | ||||||||||||
Loan and collection | 1,221 | 1,006 | 982 | 2,227 | 1,805 | ||||||||||||
Credit card and bank service fees | 970 | 967 | 1,015 | 1,937 | 1,922 | ||||||||||||
Communications | 1,014 | 830 | 852 | 1,844 | 1,843 | ||||||||||||
Supplies | 581 | 607 | 516 | 1,188 | 1,025 | ||||||||||||
Amortization of intangible assets | 935 | 570 | 600 | 1,505 | 1,200 | ||||||||||||
Legal and professional | 457 | 506 | 396 | 963 | 884 | ||||||||||||
Branch acquisition and conversion costs | (92 | ) | 422 | 330 | |||||||||||||
Goodwill impairment | 343 | 612 | 343 | 612 | |||||||||||||
Other | 1,952 | 1,643 | 1,706 | 3,595 | 3,286 | ||||||||||||
Total non-interest expense | $ | 29,801 | $ | 27,966 | $ | 25,540 | $ | 57,767 | $ | 51,778 | |||||||
3
Average Balances and Tax Equivalent Rates
Three Months Ended June 30, | |||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
2007 | 2006 | ||||||||||||||||||||||
Average Balance | Interest | Rate | Average Balance | Interest | Rate | ||||||||||||||||||
(dollars in thousands) | |||||||||||||||||||||||
Assets | |||||||||||||||||||||||
Taxable loans (1) | $ | 2,523,614 | $ | 50,468 | 8.01 | % | $ | 2,461,397 | $ | 48,362 | 7.87 | % | |||||||||||
Tax-exempt loans (1,2) | 9,761 | 166 | 6.82 | 6,577 | 115 | 7.01 | |||||||||||||||||
Taxable securities | 202,342 | 2,592 | 5.14 | 210,785 | 2,797 | 5.32 | |||||||||||||||||
Tax-exempt securities (2) | 230,873 | 4,069 | 7.07 | 248,301 | 4,498 | 7.27 | |||||||||||||||||
Other investments | 38,068 | 464 | 4.89 | 17,359 | 199 | 4.60 | |||||||||||||||||
Interest Earning Assets - | |||||||||||||||||||||||
Continuing Operations | 3,004,658 | 57,759 | 7.70 | 2,944,419 | 55,971 | 7.62 | |||||||||||||||||
Cash and due from banks | 49,947 | 52,906 | |||||||||||||||||||||
Taxable loans - discontinued operations | 744 | 201,017 | |||||||||||||||||||||
Other assets, net | 230,147 | 210,694 | |||||||||||||||||||||
Total Assets | $ | 3,285,496 | $ | 3,409,036 | |||||||||||||||||||
Liabilities | |||||||||||||||||||||||
Savings and NOW | $ | 994,116 | 4,728 | 1.91 | $ | 850,491 | 3,077 | 1.45 | |||||||||||||||
Time deposits | 1,521,496 | 18,650 | 4.92 | 1,354,352 | 13,894 | 4.11 | |||||||||||||||||
Long-term debt | 2,495 | 29 | 4.66 | 4,495 | 52 | 4.64 | |||||||||||||||||
Other borrowings | 129,781 | 2,284 | 7.06 | 398,925 | 5,655 | 5.69 | |||||||||||||||||
Interest Bearing Liabilities - | |||||||||||||||||||||||
Continuing Operations | 2,647,888 | 25,691 | 3.89 | 2,608,263 | 22,678 | 3.49 | |||||||||||||||||
Demand deposits | 300,329 | 277,340 | |||||||||||||||||||||
Time deposits - discontinued operations | 527 | 176,316 | |||||||||||||||||||||
Other liabilities | 82,591 | 91,716 | |||||||||||||||||||||
Shareholders' equity | 254,161 | 255,401 | |||||||||||||||||||||
Total liabilities and shareholders' equity | $ | 3,285,496 | $ | 3,409,036 | |||||||||||||||||||
Tax Equivalent Net Interest Income | $ | 32,068 | $ | 33,293 | |||||||||||||||||||
Tax Equivalent Net Interest Income | |||||||||||||||||||||||
as a Percent of Earning Assets | 4.27 | % | 4.53 | % | |||||||||||||||||||
(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
Six Months Ended June 30, | ||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
2007 | 2006 | |||||||||||||||||||
Average Balance | Interest | Rate | Average Balance | Interest | Rate | |||||||||||||||
(dollars in thousands) | ||||||||||||||||||||
Assets | ||||||||||||||||||||
Taxable loans (1) | $ | 2,517,273 | $ | 100,317 | 8.01 | % | $ | 2,434,790 | $ | 94,340 | 7.79 | % | ||||||||
Tax-exempt loans (1,2) | 9,639 | 326 | 6.82 | 6,237 | 220 | 7.11 | ||||||||||||||
Taxable securities | 193,787 | 5,069 | 5.27 | 216,082 | 5,645 | 5.27 | ||||||||||||||
Tax-exempt securities (2) | 234,741 | 8,190 | 7.04 | 251,482 | 9,031 | 7.24 | ||||||||||||||
Other investments | 31,850 | 778 | 4.93 | 17,398 | 422 | 4.89 | ||||||||||||||
Interest Earning Assets - | ||||||||||||||||||||
Continuing Operations | 2,987,290 | 114,680 | 7.72 | 2,925,989 | 109,658 | 7.54 | ||||||||||||||
Cash and due from banks | 51,907 | 54,012 | ||||||||||||||||||
Taxable loans - discontinued operations | 16,737 | 198,099 | ||||||||||||||||||
Other assets, net | 218,120 | 207,656 | ||||||||||||||||||
Total Assets | $ | 3,274,054 | $ | 3,385,756 | ||||||||||||||||
Liabilities | ||||||||||||||||||||
Savings and NOW | $ | 949,021 | 8,977 | 1.91 | $ | 864,533 | 6,065 | 1.41 | ||||||||||||
Time deposits | 1,514,266 | 36,809 | 4.90 | 1,358,177 | 26,833 | 3.98 | ||||||||||||||
Long-term debt | 2,743 | 63 | 4.63 | 4,743 | 109 | 4.63 | ||||||||||||||
Other borrowings | 164,529 | 5,554 | 6.81 | 360,862 | 9,922 | 5.54 | ||||||||||||||
Interest Bearing Liabilities- | ||||||||||||||||||||
Continuing Operations | 2,630,559 | 51,403 | 3.94 | 2,588,315 | 42,929 | 3.34 | ||||||||||||||
Demand deposits | 291,598 | 276,647 | ||||||||||||||||||
Time deposits - discontinued operations | 12,173 | 172,051 | ||||||||||||||||||
Other liabilities | 82,828 | 96,930 | ||||||||||||||||||
Shareholders' equity | 256,896 | 251,813 | ||||||||||||||||||
Total liabilities and shareholders' equity | $ | 3,274,054 | $ | 3,385,756 | ||||||||||||||||
Tax Equivalent Net Interest Income | $ | 63,277 | $ | 66,729 | ||||||||||||||||
Tax Equivalent Net Interest Income | ||||||||||||||||||||
as a Percent of Earning Assets | 4.25 | % | 4.58 | % | ||||||||||||||||
(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