Independent Bank (IBCP) 8-K Independent Bank Corporation Reports 2009 Second Quarter Results

Exhibit 99.2

INDEPENDENT BANK CORPORATION AND SUBSIDIARIES
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.

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