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

Exhibit 99.2

INDEPENDENT BANK CORPORATION AND SUBSIDIARIES
Supplemental Data

Non-performing assets

	March 31,			December 31,
	2009			2008
	(dollars in thousands)
Non-accrual loans	$	124,848		$	122,639
Loans 90 days or more past due and still accruing interest		4,198			2,626
Total non-performing loans		129,046			125,265
Other real estate		26,122			19,998
Total non-performing assets	$	155,168		$	145,263
As a percent of Portfolio Loans
Non-performing loans		5.27	%		5.09	%
Allowance for loan losses		2.38			2.35
Non-performing assets to total assets		5.25			4.91
Allowance for loan losses as a percent of non-performing loans		45			46

Allowance for loan losses

	Three months ended
	March 31,
	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		30,924			(86	)		11,383			(67	)
Recoveries credited to allowance		607						569
Loans charged against the allowance		(31,126	)					(7,335	)
Balance at end of period	$	58,305		$	2,058		$	49,911		$	1,869
Net loans charged against the allowance to average Portfolio Loans (annualized)		5.05	%					1.07	%

Alternative Sources of Funds

	March 31,						December 31,
	2009						2008
			Average						Average
	Amount		Maturity	Rate			Amount		Maturity	Rate
	(dollars in thousands)
Brokered CDs(1)	$	233,919	1.5 years		2.78	%	$	182,283	1.1 years		3.63	%
Fixed rate FHLB advances(1)		276,705	1.7 years		1.78			314,214	2.3 years		3.49
Variable rate FHLB advances(1)
Securities sold under agreements to Repurchase(1)		35,000	1.6 years		4.42			35,000	1.9 years		4.42
FRB — Discount borrowing		130,000	.1 years		0.25			189,500	.1 years		0.54
Federal funds purchased								750	1 day		0.25
Total	$	675,624	1.3 years		1.97	%	$	721,747	1.4 years		2.80	%

(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.

Capitalization

	March 31,			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		68,631			68,456
Common stock, par value $1.00 per share		23,816			22,791
Capital surplus		201,025			200,687
Retained earnings (accumulated deficit)		(93,761	)		(73,849	)
Accumulated other comprehensive loss		(22,275	)		(23,208	)
Total shareholders’ equity		177,436			194,877
Total capitalization	$	267,536		$	284,977

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Non-Interest Income

	Three months ended
	March 31,			December 31,			March 31,
	2009			2008			2008
	(in thousands)
Service charges on deposit accounts	$	5,507		$	5,996		$	5,647
Net gains (losses) on assets
Mortgage loans		3,281			1,204			1,867
Securities		(581	)		(6,924	)		(2,163	)
VISA check card interchange income		1,415			1,394			1,371
Mortgage loan servicing		(842	)		(3,616	)		(323	)
Mutual fund and annuity commissions		453			459			424
Bank owned life insurance		401			492			478
Title insurance fees		609			280			417
Other		1,335			1,359			1,774
Total non-interest income	$	11,578		$	644		$	9,492

Mortgage Loan Activity

	Three months ended
	March 31,			December 31,			March 31,
	2009			2008			2008
	(in thousands)
Mortgage loans originated	$	154,608		$	64,453		$	118,242
Mortgage loans sold		142,636			49,692			84,449
Mortgage loans sold with servicing rights released		5,429			15,573			7,882
Net gains on the sale of mortgage loans		3,281			1,204			1,867
Net gains as a percent of mortgage loans sold (“Loan Sale Margin”)		2.30	%		2.42	%		2.21	%
SFAS #133/#159 and SAB #109 adjustments included in the Loan Sale Margin		0.65			0.74			0.97

Capitalized Real Estate Mortgage Loan Servicing Rights

	Three months ended
	March 31,
	2009			2008
	(in thousands)
Balance at beginning of period	$	11,966		$	15,780
Originated servicing rights capitalized		1,499			878
Amortization		(1,179	)		(636	)
(Increase)/decrease in impairment reserve		(697	)		(725	)
Balance at end of period	$	11,589		$	15,297
Impairment reserve at end of period	$	5,348		$	1,044

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Non-Interest Expense

	Three months ended
	March 31,		December 31,		March 31,
	2009		2008		2008
	(in thousands)
Salaries	$	9,669	$	10,188	$	10,156
Performance-based compensation and benefits		329		778		1,304
Other benefits		2,579		2,198		2,724
Compensation and employee benefits		12,577		13,164		14,184
Loan and collection		4,038		3,536		1,925
Occupancy, net		3,048		3,054		3,114
Data processing		2,096		1,951		1,725
Furniture, fixtures and equipment		1,849		1,770		1,817
Credit card and bank service fees		1,464		1,325		1,046
Advertising		1,442		1,691		1,100
Loss on other real estate and repossessed assets		1,261		2,258		106
Deposit insurance		1,186		462		833
Communications		1,045		1,014		1,015
Legal and professional		641		624		418
Amortization of intangible assets		500		758		793
Supplies		469		496		543
Goodwill impairment				50,020
Other		1,775		1,963		1,632
Total non-interest expense	$	33,391	$	84,086	$	30,251

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Average Balances and Tax Equivalent Rates

	Three Months Ended
	March 31,
	2009							2008
	Average							Average
	Balance		Interest		Rate			Balance		Interest		Rate
	(dollars in thousands)
Assets
Taxable loans(1)	$	2,497,623	$	44,300		7.16	%	$	2,564,643	$	48,013		7.52	%
Tax-exempt loans(1,2)		9,927		155		6.33			9,628		174		7.27
Taxable securities		114,823		1,733		6.12			162,170		2,304		5.71
Tax-exempt securities(2)		103,070		1,750		6.89			204,890		3,586		7.04
Other investments		29,277		324		4.49			24,522		357		5.86
Interest Earning Assets		2,754,720		48,262		7.08			2,965,853		54,434		7.37
Cash and due from banks		61,139							52,459
Other assets, net		158,443							225,950
Total Assets	$	2,974,302						$	3,244,262
Liabilities
Savings and NOW	$	944,904		1,581		0.68		$	998,429		3,565		1.44
Time deposits		855,025		6,967		3.30			1,099,345		12,647		4.63
Long-term debt									994		12		4.86
Other borrowings		599,379		4,670		3.16			529,439		6,425		4.88
Interest Bearing Liabilities		2,399,308		13,218		2.23			2,628,207		22,649		3.47
Demand deposits		308,538							289,814
Other liabilities		70,737							83,426
Shareholders’ equity		195,719							242,815
Total liabilities and shareholders’ equity	$	2,974,302						$	3,244,262
Tax Equivalent Net Interest Income			$	35,044						$	31,785
Tax Equivalent Net Interest Income as a Percent of Earning Assets						5.13	%						4.30	%

(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 March 31, 2009

	Total Commercial Loans
									Percent of
			Watch Credits						Loan
									Category in
Loan Category	All Loans		Performing		Non- performing		Total		Watch Credit
	(dollars in thousands)
Land	$	30,527	$	4,767	$	7,932	$	12,699		41.6	%
Land Development		43,931		13,410		15,110		28,520		64.9	%
Construction		43,348		3,049		8,416		11,465		26.5	%
Income Producing		405,405		48,311		28,455		76,766		18.9	%
Owner Occupied		214,484		26,892		5,283		32,175		15.0	%
Total Commercial Real Estate Loans(1)	$	737,695	$	96,429	$	65,196	$	161,625		21.9	%
Other Commercial Loans(1)	$	201,902	$	23,504		3,703	$	27,207		13.5	%
Total non-performing commercial loans					$	68,899

(1) The total of these two categories is different than the March 31, 2009, Consolidated Statement of Financial Condition due primarily to loans in process.

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