Exhibit 99.2
INDEPENDENT BANK CORPORATION AND SUBSIDIARIES
Supplemental Data
Supplemental Data
Non-performing assets
June 30, | December 31, | |||||||
2009 | 2008 | |||||||
(dollars in thousands) | ||||||||
Non-accrual loans | $ | 119,580 | $ | 122,639 | ||||
Loans 90 days or more past due and still accruing interest | 5,700 | 2,626 | ||||||
Total non-performing loans | 125,280 | 125,265 | ||||||
Other real estate | 29,760 | 19,998 | ||||||
Total non-performing assets | $ | 155,040 | $ | 145,263 | ||||
As a percent of Portfolio Loans | ||||||||
Non-performing loans | 5.13 | % | 5.09 | % | ||||
Allowance for loan losses | 2.67 | 2.35 | ||||||
Non-performing assets to total assets | 5.21 | 4.91 | ||||||
Allowance for loan losses as a percent of non-performing loans | 52 | 46 |
Allowance for loan losses
Six months ended | ||||||||||||||||
June 30, | ||||||||||||||||
2009 | 2008 | |||||||||||||||
Unfunded | Unfunded | |||||||||||||||
Loans | Commitments | Loans | Commitments | |||||||||||||
(in thousands) | ||||||||||||||||
Balance at beginning of period | $ | 57,900 | $ | 2,144 | $ | 45,294 | $ | 1,936 | ||||||||
Additions (deduction) | ||||||||||||||||
Provision charged to operating expense | 58,798 | (152 | ) | 23,875 | (207 | ) | ||||||||||
Recoveries credited to allowance | 1,494 | 1,099 | ||||||||||||||
Loans charged against the allowance | (52,921 | ) | (19,164 | ) | ||||||||||||
Balance at end of period | $ | 65,271 | $ | 1,992 | $ | 51,104 | $ | 1,729 | ||||||||
Net loans charged against the allowance to average Portfolio Loans (annualized) | 4.23 | % | 1.43 | % |
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Alternative Sources of Funds
June 30, | December 31, | |||||||||||||||||||||||
2009 | 2008 | |||||||||||||||||||||||
Average | Average | |||||||||||||||||||||||
Amount | Maturity | Rate | Amount | Maturity | Rate | |||||||||||||||||||
(dollars in thousands) | ||||||||||||||||||||||||
Brokered CDs | $ | 480,173 | 2.0 years | 2.67 | % | $ | 182,283 | 1.1 years | 3.63 | % | ||||||||||||||
Fixed rate FHLB advances | 210,616 | 1.5 years | 1.90 | 314,214 | 2.3 years | 3.49 | ||||||||||||||||||
Securities sold under agreements to Repurchase | 35,000 | 1.4 years | 4.42 | 35,000 | 1.9 years | 4.42 | ||||||||||||||||||
FRB — Discount borrowing | 8,200 | .2 years | 0.50 | 189,500 | .1 years | 0.54 | ||||||||||||||||||
Federal funds purchased | 750 | 1 day | 0.25 | |||||||||||||||||||||
Total | $ | 733,989 | 1.8 years | 2.51 | % | $ | 721,747 | 1.4 years | 2.80 | % | ||||||||||||||
Capitalization
June 30, | December 31, | |||||||
2009 | 2008 | |||||||
(in thousands) | ||||||||
Subordinated debentures | $ | 92,888 | $ | 92,888 | ||||
Amount not qualifying as regulatory capital | (2,788 | ) | (2,788 | ) | ||||
Amount qualifying as regulatory capital | 90,100 | 90,100 | ||||||
Shareholders’ Equity | ||||||||
Preferred stock, Series A, no par value | 68,806 | 68,456 | ||||||
Common stock, par value $1.00 per share | 23,824 | 22,791 | ||||||
Capital surplus | 201,192 | 200,687 | ||||||
Retained earnings (accumulated deficit) | (100,238 | ) | (73,849 | ) | ||||
Accumulated other comprehensive loss | (18,348 | ) | (23,208 | ) | ||||
Total shareholders’ equity | 175,236 | 194,877 | ||||||
Total capitalization | $ | 265,336 | $ | 284,977 | ||||
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Non-Interest Income
Three months ended | Six months ended | |||||||||||||||||||
June 30, | March 31, | June 30, | June 30, | |||||||||||||||||
2009 | 2009 | 2008 | 2009 | 2008 | ||||||||||||||||
(in thousands) | ||||||||||||||||||||
Service charges on deposit accounts | $ | 6,321 | $ | 5,507 | $ | 6,164 | $ | 11,828 | $ | 11,811 | ||||||||||
Net gains (losses) on assets | ||||||||||||||||||||
Mortgage loans | 3,262 | 3,281 | 1,141 | 6,543 | 3,008 | |||||||||||||||
Securities | 4,230 | (581 | ) | 837 | 3,649 | (1,326 | ) | |||||||||||||
VISA check card interchange income | 1,500 | 1,415 | 1,495 | 2,915 | 2,866 | |||||||||||||||
Mortgage loan servicing | 2,349 | (842 | ) | 1,528 | 1,507 | 1,205 | ||||||||||||||
Mutual fund and annuity commissions | 539 | 453 | 644 | 992 | 1,068 | |||||||||||||||
Bank owned life insurance | 355 | 401 | 484 | 756 | 962 | |||||||||||||||
Title insurance fees | 732 | 609 | 384 | 1,341 | 801 | |||||||||||||||
Other | 1,723 | 1,335 | 1,460 | 3,058 | 3,234 | |||||||||||||||
Total non-interest income | $ | 21,011 | $ | 11,578 | $ | 14,137 | $ | 32,589 | $ | 23,629 | ||||||||||
Mortgage Loan Activity
Three months ended | Six months ended | |||||||||||||||||||
June 30, | March 31, | June 30, | June 30, | |||||||||||||||||
2009 | 2009 | 2008 | 2009 | 2008 | ||||||||||||||||
(in thousands) | ||||||||||||||||||||
Mortgage loans originated | $ | 196,927 | $ | 154,608 | $ | 111,316 | $ | 351,535 | $ | 229,558 | ||||||||||
Mortgage loans sold | 158,173 | 142,636 | 80,238 | 300,809 | 164,687 | |||||||||||||||
Mortgage loans sold with servicing rights released | 9,174 | 5,429 | 11,660 | 14,603 | 19,542 | |||||||||||||||
Net gains on the sale of mortgage loans | 3,262 | 3,281 | 1,141 | 6,543 | 3,008 | |||||||||||||||
Net gains as a percent of mortgage loans sold (“Loan Sale Margin”) | 2.06 | % | 2.30 | % | 1.42 | % | 2.18 | % | 1.83 | % | ||||||||||
SFAS #133/#159 and SAB #109 adjustments included in the Loan Sale Margin | 0.04 | 0.65 | (0.25 | ) | 0.33 | 0.38 |
Capitalized Real Estate Mortgage Loan Servicing Rights
Three months ended | Six months ended | |||||||||||||||
June 30, | June 30, | |||||||||||||||
2009 | 2008 | 2009 | 2008 | |||||||||||||
(in thousands) | ||||||||||||||||
Balance at beginning of period | $ | 11,589 | $ | 15,297 | $ | 11,966 | $ | 15,780 | ||||||||
Originated servicing rights capitalized | 1,624 | 754 | 3,123 | 1,632 | ||||||||||||
Amortization | (1,640 | ) | (496 | ) | (2,819 | ) | (1,132 | ) | ||||||||
(Increase)/decrease in impairment reserve | 2,965 | 996 | 2,268 | 271 | ||||||||||||
Balance at end of period | $ | 14,538 | $ | 16,551 | $ | 14,538 | $ | 16,551 | ||||||||
Impairment reserve at end of period | $ | 2,383 | $ | 48 | $ | 2,383 | $ | 48 | ||||||||
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Non-Interest Expense
Three months ended | Six months ended | |||||||||||||||||||
June 30, | March 31, | June 30, | June 30, | |||||||||||||||||
2009 | 2009 | 2008 | 2009 | 2008 | ||||||||||||||||
(in thousands) | ||||||||||||||||||||
Salaries | $ | 9,815 | $ | 9,669 | $ | 9,727 | $ | 19,484 | $ | 19,883 | ||||||||||
Performance-based compensation and benefits | 747 | 329 | 1,443 | 1,076 | 2,747 | |||||||||||||||
Other benefits | 2,766 | 2,579 | 2,638 | 5,345 | 5,362 | |||||||||||||||
Compensation and employee benefits | 13,328 | 12,577 | 13,808 | 25,905 | 27,992 | |||||||||||||||
Loan and collection | 3,227 | 4,038 | 2,031 | 7,265 | 3,887 | |||||||||||||||
Occupancy, net | 2,560 | 3,048 | 2,813 | 5,608 | 5,927 | |||||||||||||||
Data processing | 2,010 | 2,096 | 1,712 | 4,106 | 3,437 | |||||||||||||||
Deposit insurance | 2,755 | 1,186 | 418 | 3,941 | 1,251 | |||||||||||||||
Furniture, fixtures and equipment | 1,848 | 1,849 | 1,825 | 3,697 | 3,642 | |||||||||||||||
Loss on other real estate and repossessed assets | 1,939 | 1,261 | 1,560 | 3,200 | 1,666 | |||||||||||||||
Credit card and bank service fees | 1,668 | 1,464 | 1,174 | 3,132 | 2,220 | |||||||||||||||
Advertising | 1,421 | 1,442 | 1,168 | 2,863 | 2,268 | |||||||||||||||
Communications | 1,107 | 1,045 | 1,021 | 2,152 | 2,036 | |||||||||||||||
Legal and professional | 705 | 641 | 463 | 1,346 | 881 | |||||||||||||||
Amortization of intangible assets | 474 | 501 | 761 | 975 | 1,554 | |||||||||||||||
Supplies | 457 | 469 | 472 | 926 | 1,015 | |||||||||||||||
Other | 1,343 | 1,774 | 1,965 | 3,117 | 3,666 | |||||||||||||||
Total non-interest expense | $ | 34,842 | $ | 33,391 | $ | 31,191 | $ | 68,233 | $ | 61,442 | ||||||||||
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Average Balances and Tax Equivalent Rates
Three Months Ended | ||||||||||||||||||||||||
June 30, | ||||||||||||||||||||||||
2009 | 2008 | |||||||||||||||||||||||
Average | Average | |||||||||||||||||||||||
Balance | Interest | Rate | Balance | Interest | Rate | |||||||||||||||||||
(dollars in thousands) | ||||||||||||||||||||||||
Assets(1) | ||||||||||||||||||||||||
Taxable loans | $ | 2,513,367 | $ | 45,157 | 7.20 | % | $ | 2,578,668 | $ | 46,618 | 7.26 | % | ||||||||||||
Tax-exempt loans(2) | 7,069 | 104 | 5.90 | 11,316 | 203 | 7.22 | ||||||||||||||||||
Taxable securities | 118,116 | 1,705 | 5.79 | 153,895 | 2,176 | 5.69 | ||||||||||||||||||
Tax-exempt securities(2) | 88,601 | 1,536 | 6.95 | 189,313 | 3,346 | 7.11 | ||||||||||||||||||
Other investments | 28,011 | 239 | 3.42 | 27,633 | 362 | 5.27 | ||||||||||||||||||
Interest Earning Assets | 2,755,164 | 48,741 | 7.09 | 2,960,825 | 52,705 | 7.15 | ||||||||||||||||||
Cash and due from banks | 74,659 | 50,637 | ||||||||||||||||||||||
Other assets, net | 165,715 | 228,550 | ||||||||||||||||||||||
Total Assets | $ | 2,995,538 | $ | 3,240,012 | ||||||||||||||||||||
Liabilities | ||||||||||||||||||||||||
Savings and NOW | $ | 974,994 | 1,493 | 0.61 | $ | 993,186 | 2,454 | 0.99 | ||||||||||||||||
Time deposits | 979,506 | 7,318 | 3.00 | 872,385 | 8,737 | 4.03 | ||||||||||||||||||
Other borrowings | 448,714 | 3,814 | 3.41 | 746,983 | 6,975 | 3.76 | ||||||||||||||||||
Interest Bearing Liabilities | 2,403,214 | 12,625 | 2.11 | 2,612,554 | 18,166 | 2.80 | ||||||||||||||||||
Demand deposits | 320,920 | 297,151 | ||||||||||||||||||||||
Other liabilities | 93,861 | 89,299 | ||||||||||||||||||||||
Shareholders’ equity | 177,543 | 241,008 | ||||||||||||||||||||||
Total liabilities and shareholders’ equity | $ | 2,995,538 | $ | 3,240,012 | ||||||||||||||||||||
Tax Equivalent Net Interest Income | $ | 36,116 | $ | 34,539 | ||||||||||||||||||||
Tax Equivalent Net Interest Income as a Percent of Earning Assets | 5.25 | % | 4.68 | % | ||||||||||||||||||||
(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
Six Months Ended | ||||||||||||||||||||||||
June 30, | ||||||||||||||||||||||||
2009 | 2008 | |||||||||||||||||||||||
Average | Average | |||||||||||||||||||||||
Balance | Interest | Rate | Balance | Interest | Rate | |||||||||||||||||||
(dollars in thousands) | ||||||||||||||||||||||||
Assets(1) | ||||||||||||||||||||||||
Taxable loans | $ | 2,504,582 | $ | 89,457 | 7.19 | % | $ | 2,571,593 | $ | 94,631 | 7.39 | % | ||||||||||||
Tax-exempt loans(2) | 8,490 | 259 | 6.15 | 10,472 | 377 | 7.24 | ||||||||||||||||||
Taxable securities | 116,478 | 3,438 | 5.95 | 158,032 | 4,480 | 5.70 | ||||||||||||||||||
Tax-exempt securities(2) | 95,795 | 3,286 | 6.92 | 197,102 | 6,932 | 7.07 | ||||||||||||||||||
Other investments | 28,641 | 563 | 3.96 | 26,077 | 719 | 5.54 | ||||||||||||||||||
Interest Earning Assets | 2,753,986 | 97,003 | 7.09 | 2,963,276 | 107,139 | 7.26 | ||||||||||||||||||
Cash and due from banks | 67,935 | 51,549 | ||||||||||||||||||||||
Other assets, net | 162,086 | 227,250 | ||||||||||||||||||||||
Total Assets | $ | 2,984,007 | $ | 3,242,075 | ||||||||||||||||||||
Liabilities | ||||||||||||||||||||||||
Savings and NOW | $ | 960,032 | 3,074 | 0.65 | $ | 995,808 | 6,019 | 1.22 | ||||||||||||||||
Time deposits | 917,609 | 14,285 | 3.14 | 985,865 | 21,384 | 4.36 | ||||||||||||||||||
Long-term debt | 497 | 12 | 4.86 | |||||||||||||||||||||
Other borrowings | 523,630 | 8,484 | 3.27 | 638,211 | 13,400 | 4.22 | ||||||||||||||||||
Interest Bearing Liabilities | 2,401,271 | 25,843 | 2.17 | 2,620,381 | 40,815 | 3.13 | ||||||||||||||||||
Demand deposits | 314,762 | 293,483 | ||||||||||||||||||||||
Other liabilities | 81,267 | 86,306 | ||||||||||||||||||||||
Shareholders’ equity | 186,707 | 241,905 | ||||||||||||||||||||||
Total liabilities and shareholders’ equity | $ | 2,984,007 | $ | 3,242,075 | ||||||||||||||||||||
Tax Equivalent Net Interest Income | $ | 71,160 | $ | 66,324 | ||||||||||||||||||||
Tax Equivalent Net Interest Income as a Percent of Earning Assets | 5.20 | % | 4.49 | % | ||||||||||||||||||||
(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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Commercial Loan Portfolio Analysis as of June 30, 2009
Total Commercial Loans | |||||||||||||||||||||
Percent of | |||||||||||||||||||||
Watch Credits | Loan | ||||||||||||||||||||
Non- | Category in | ||||||||||||||||||||
Loan Category | All Loans | Performing | performing | Total | Watch Credit | ||||||||||||||||
(dollars in thousands) | |||||||||||||||||||||
Land | $ | 26,978 | $ | 5,032 | $ | 7,081 | $ | 12,113 | 44.9 | % | |||||||||||
Land Development | 39,395 | 8,369 | 16,799 | 25,168 | 63.9 | % | |||||||||||||||
Construction | 41,718 | 5,092 | 12,846 | 17,938 | 43.0 | % | |||||||||||||||
Income Producing | 389,872 | 64,717 | 19,135 | 83,852 | 21.5 | % | |||||||||||||||
Owner Occupied | 206,293 | 31,143 | 4,610 | 35,753 | 17.3 | % | |||||||||||||||
Total Commercial Real Estate Loans(1) | $ | 704,256 | $ | 114,353 | $ | 60,471 | $ | 174,824 | 24.8 | % | |||||||||||
Other Commercial Loans(1) | $ | 188,979 | $ | 28,184 | 2,482 | $ | 30,666 | 16.2 | % | ||||||||||||
Total non-performing commercial loans | $ | 62,953 | |||||||||||||||||||
(1) | The total of these two categories is different than the June 30, 2009, Consolidated Statement of Financial Condition due primarily to loans in process. |
15