Independent Bank (IBCP) 8-K Independent Bank Corporation Reports 2010 First Quarter Results

Exhibit 99.2

INDEPENDENT BANK CORPORATION AND SUBSIDIARIES
Supplemental Data

Non-performing assets

	March 31,			December 31,
	2010			2009
	(dollars in thousands)
Non-accrual loans	$	95,989		$	105,965
Loans 90 days or more past due and still accruing interest		2,266			3,940
Total non-performing loans		98,255			109,905
Other real estate and repossessed assets		40,284			31,534
Total non-performing assets	$	138,539		$	141,439
As a percent of Portfolio Loans
Non-performing loans		4.56	%		4.78	%
Allowance for loan losses		3.53			3.55
Non-performing assets to total assets		4.78			4.77
Allowance for loan losses as a percent of non-performing loans		77.48			74.35

Allowance for loan losses
	Three months ended
	March 31,
	2010					2009
				Unfunded					Unfunded
	Loans			Commitments		Loans			Commitments
				(dollars in thousands)
Balance at beginning of period	$	81,717		$	1,858	$	57,900		$	2,144
Additions (deduction)
Provision charged to operating expense		17,014			56		30,124			(86	)
Recoveries credited to allowance		991					607
Loans charged against the allowance		(23,590	)				(30,326	)
Balance at end of period	$	76,132		$	1,914	$	58,305		$	2,058
Net loans charged against the allowance to average Portfolio Loans (annualized)		4.10	%				4.91	%

Alternative Sources of Funds

	March 31,						December 31,
	2010						2009
			Average						Average
	Amount		Maturity	Rate			Amount		Maturity	Rate
	(dollars in thousands)
Brokered CDs	$	523,052	2.4 years		2.81	%	$	629,150	2.2 years		2.46	%
Fixed rate FHLB advances		52,372	2.8 years		3.76			27,382	5.5 years		6.59
Variable rate FHLB advances		70,000	1.3 years		0.30			67,000	1.4 years		0.32
Securities sold under agreements to repurchase		35,000	.6 years		4.42			35,000	.9 years		4.42
Total	$	680,424	2.2 years		2.71	%	$	758,532	2.2 years		2.51	%

Capitalization

	March 31,			December 31,
	2010			2009
	(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		69,334			69,157
Common stock, par value $1.00 per share		23,884			23,863
Capital surplus		201,754			201,618
Accumulated deficit		(184,012	)		(169,098	)
Accumulated other comprehensive loss		(13,749	)		(15,679	)
Total shareholders’ equity		97,211			109,861
Total capitalization	$	187,311		$	199,961

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Non-Interest Income

	Three months ended
	March 31,			December 31,			March 31,
	2010			2009			2009
	(in thousands)
Service charges on deposit accounts	$	5,275		$	6,158		$	5,507
Net gains (losses) on assets
Mortgage loans		1,843			2,060			3,281
Securities		265			39			(564	)
Other than temporary loss on securities available for sale
Total impairment loss		(118	)		(4,056	)		(17	)
Loss recognized in other comprehensive loss					3,991
Net impairment loss recognized in earnings		(118	)		(65	)		(17	)
VISA check card interchange income		1,572			1,527			1,415
Mortgage loan servicing		432			1,241			(842	)
Mutual fund and annuity commissions		389			527			453
Bank owned life insurance		468			472			401
Title insurance fees		494			410			609
Other		1,397			920			1,335
Total non-interest income	$	12,017		$	13,289		$	11,578

Mortgage Loan Activity

	Three months ended
	March 31,			December 31,			March 31,
	2010			2009			2009
	(dollars in thousands)
Mortgage loans originated	$	90,007		$	114,254		$	154,608
Mortgage loans sold		87,708			95,386			142,636
Mortgage loans sold with servicing rights released		11,864			20,216			5,429
Net gains on the sale of mortgage loans		1,843			2,060			3,281
Net gains as a percent of mortgage loans sold (“Loan Sale Margin”)		2.10	%		2.16	%		2.30	%
Fair value adjustments included in the Loan Sale Margin		(.07	)		0.11			0.65

Capitalized Real Estate Mortgage Loan Servicing Rights

	Three months ended
	March 31,
	2010			2009
	(in thousands)
Balance at beginning of period	$	15,273		$	11,966
Originated servicing rights capitalized		775			1,499
Amortization		(758	)		(1,179	)
(Increase)/decrease in impairment reserve		145			(697	)
Balance at end of period	$	15,435		$	11,589
Impairment reserve at end of period	$	2,157		$	5,348

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Non-Interest Expense

	Three months ended
	March 31,		December 31,		March 31,
	2010		2009		2009
	(in thousands)
Salaries	$	10,176	$	10,364	$	9,669
Performance-based compensation and benefits		644		746		329
Other benefits		2,393		2,165		2,579
Compensation and employee benefits		13,213		13,275		12,577
Loan and collection		4,786		3,834		4,038
Vehicle service contract counterparty contingencies		3,418		19,506		800
Occupancy, net		2,909		2,882		3,048
Data processing		2,105		2,134		2,096
Loss on other real estate and repossessed assets		2,029		1,796		1,261
FDIC deposit insurance		1,802		1,658		1,186
Furniture, fixtures and equipment		1,719		1,735		1,849
Credit card and bank service fees		1,675		1,754		1,464
Legal and professional fees		1,136		1,144		641
Communications		1,073		1,120		1,045
Advertising		779		1,498		1,442
Supplies		393		470		469
Amortization of intangible assets		322		523		501
Goodwill impairment				16,734
Other		1,720		1,119		1,774
Total non-interest expense	$	39,079	$	71,182	$	34,191

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Average Balances and Rates

	Three Months Ended
	March 31,
	2010							2009
	Average							Average
	Balance		Interest		Rate			Balance		Interest		Rate
					(dollars in thousands)
Assets(1)
Taxable loans	$	2,252,674	$	38,922		6.98	%	$	2,497,623	$	44,300		7.16	%
Tax-exempt loans(2)		10,128		105		4.20			9,927		101		4.13
Taxable securities		96,213		1,160		4.89			114,823		1,733		6.12
Tax-exempt securities(2)		64,415		685		4.31			103,070		1,107		4.36
Cash — interest bearing		274,955		157		0.23
Other investments		27,854		215		3.13			29,277		324		4.49
Interest Earning Assets		2,726,239		41,244		6.12			2,754,720		47,565		6.98
Cash and due from banks		59,018							61,139
Other assets, net		148,460							158,443
Total Assets	$	2,933,717						$	2,974,302
Liabilities
Savings and NOW	$	1,084,499		863		0.32		$	944,904		1,581		0.68
Time deposits		1,127,618		7,356		2.65			855,025		6,967		3.30
Other borrowings		227,621		2,994		5.33			599,379		4,670		3.16
Interest Bearing Liabilities		2,439,738		11,213		1.86			2,399,308		13,218		2.23
Demand deposits		327,570							308,538
Other liabilities		64,396							70,737
Shareholders’ equity		102,013							195,719
Total liabilities and shareholders’ equity	$	2,933,717						$	2,974,302
Net Interest Income			$	30,031						$	34,347
Net Interest Income as a Percent of Earning Assets						4.45	%						5.03	%

(1)	All domestic, except for $0.9 million and $6.9 million for the three months ended March 31, 2010 and 2009, respectively, of average finance receivables included in taxable loans for customers domiciled in Canada.
(2)	Interest on tax-exempt loans and securities is not presented on a fully tax equivalent basis due to the current net operating loss carryforward position and the deferred tax asset valuation allowance.

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Commercial Loan Portfolio Analysis as of March 31, 2010

	Total Commercial Loans
									Percent of
			Watch Credits						Loan
					Non-				Category in
Loan Category	All Loans		Performing		performing		Total		Watch Credit
	(dollars in thousands)
Land	$	30,828	$	11,681	$	4,242	$	15,923		51.7	%
Land Development		25,601		8,464		6,110		14,574		56.9
Construction		25,871		8,775		3,110		11,885		45.9
Income Producing		361,445		72,413		21,460		93,873		26.0
Owner Occupied		185,445		31,539		6,571		38,110		20.6
Total Commercial Real Estate Loans(1)	$	629,190	$	132,872	$	41,493	$	174,365		27.7
Other Commercial Loans(1)	$	170,340	$	26,000		2,365	$	28,365		16.7
Total non-performing commercial loans					$	43,858

(1) The total of these two categories is different than the March 31, 2010, Consolidated Statement of Financial Condition due primarily to loans in process.

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