Independent Bank 8K Reports | IBCP 31 Oct 11

Exhibit 99.2

INDEPENDENT BANK CORPORATION AND SUBSIDIARIES

Supplemental Data

Non-performing assets(1)

	September 30, 2011			December 31, 2010
	(Dollars in thousands)
Non-accrual loans	$	50,586		$	66,652
Loans 90 days or more past due and still accruing interest		313			928
Total non-performing loans		50,899			67,580
Other real estate and repossessed assets		34,029			39,413
Total non-performing assets	$	84,928		$	106,993
As a percent of Portfolio Loans
Non-performing loans		3.13	%		3.73	%
Allowance for loan losses		3.61			3.75
Non-performing assets to total assets		3.66			4.22
Allowance for loan losses as a percent of non-performing loans		115.56			100.50

(1)	Excludes loans classified as “troubled debt restructured” that are not past due and vehicle service contract counterparty receivables, net.

Troubled debt restructurings (“TDR”)

	September 30, 2011
	Commercial		Retail			Total
	(In thousands)
Performing TDR’s	$	22,273	$	90,378		$	112,651
Non-performing TDR’s (1)		4,552		13,753	(2)		18,305
Total	$	26,825	$	104,131		$	130,956

	December 31, 2010
	Commercial		Retail			Total
	(In thousands)
Performing TDR’s	$	16,957	$	96,855		$	113,812
Non-performing TDR’s (1)		7,814		16,616	(2)		24,430
Total	$	24,771	$	113,471		$	138,242

(1)	Included in non-performing loans table above.

(2)	Also includes loans on non-accrual at the time of modification until six payments are received on a timely basis.

Allowance for loan losses

	Nine months ended September 30,
	2011					2010
	Loans			Unfunded Commitments		Loans			Unfunded Commitments
	(Dollars in thousands)
Balance at beginning of period	$	67,915		$	1,322	$	81,717		$	1,858
Additions (deduction)
Provision for loan losses		21,029			-		39,237			-
Recoveries credited to allowance		3,080			-		2,656			-
Loans charged against the allowance		(33,204	)		-		(51,866	)		-
Additions (deductions) included in non-interest expense		-			12		-			(471	)
Balance at end of period	$	58,820		$	1,334	$	71,744		$	1,387

Net loans charged against the allowance to average Portfolio Loans (annualized)		2.35	%				3.13	%

Alternative Sources of Funds

	September 30, 2011						December 31, 2010
	Amount		Average Maturity	Rate			Amount		Average Maturity	Rate
	(Dollars in thousands)
Brokered CDs	$	34,148	1.0 years		1.82	%	$	273,546	2.4 years		2.89	%
Fixed rate FHLB advances		32,719	3.3 years		4.13			21,022	5.9 years		6.34
Variable rate FHLB advances(1)		3,000	2.6 years		0.35			50,000	0.8 years		0.41
Total	$	69,867	2.1 years		2.84	%	$	344,568	2.4 years		2.74	%

(1)	Certain of these items have had their average maturity and rate altered through the use of derivative instruments, including pay-fixed interest rate swaps.

Capitalization

	September 30, 2011			December 31, 2010
	(In thousands)
Subordinated debentures	$	50,175		$	50,175
Amount not qualifying as regulatory capital		(1,507	)		(1,507	)
Amount qualifying as regulatory capital		48,668			48,668
Shareholders’ Equity
Preferred stock		78,802			75,700
Common stock		248,505			246,407
Accumulated deficit		(204,491	)		(189,902	)
Accumulated other comprehensive loss		(12,014	)		(13,120	)
Total shareholders’ equity		110,802			119,085
Total capitalization	$	159,470		$	167,753

Non-Interest Income

	Three months ended									Nine months ended
	September 30,			June 30,			September 30,			September 30,
	2011			2011			2010			2011			2010
				(In thousands)

Service charges on deposit accounts	$	4,623		$	4,784		$	5,516		$	13,689		$	16,624
Interchange income		2,356			2,308			2,075			6,832			6,097
Net gains (losses) on assets
Mortgage loans		2,025			1,793			3,829			5,753			8,044
Securities		(57	)		115			(3	)		271			1,625
Other than temporary loss on securities available for sale
Total impairment loss		(4	)		327			(316	)		(146	)		(434	)
Loss recognized in other comprehensive income		-			(327	)		-			-			-
Net impairment loss recognized in earnings		(4	)		-			(316	)		(146	)		(434	)
Mortgage loan servicing		(2,655	)		(126	)		(1,377	)		(1,885	)		(2,988	)
Investment and insurance commissions		534			524			506			1,613			1,304
Bank owned life insurance		496			464			502			1,385			1,453
Title insurance fees		299			318			533			1,090			1,393
Decrease in fair value of U.S. Treasury warrant		29			642			-			1,025			-
Gain on extinguishment of debt		-			-			(20	)		-			18,066
Other		1,609			1,634			1,233			4,795			3,420
Total non-interest income	$	9,255		$	12,456		$	12,478		$	34,422		$	54,604

Capitalized Mortgage Loan Servicing Rights

	Three months ended September 30,						Nine months ended September 30,
	2011			2010			2011			2010
	(In thousands)
Balance at beginning of period	$	14,741		$	13,022		$	14,661		$	15,273
Originated servicing rights capitalized		573			1,084			2,068			2,539
Amortization		(688	)		(1,104	)		(2,011	)		(2,495	)
Change in valuation allowance		(3,077	)		(1,335	)		(3,169	)		(3,650	)
Balance at end of period	$	11,549		$	11,667		$	11,549		$	11,667

Valuation allowance at end of period	$	6,379		$	5,952		$	6,379		$	5,952

Mortgage Loan Activity

	Three months ended									Nine months ended
	September 30,			June 30,			September 30,			September 30,
	2011			2011			2010			2011			2010
	(Dollars in thousands)
Mortgage loans originated	$	89,526		$	74,612		$	153,920		$	259,711		$	337,827
Mortgage loans sold		80,993			63,369			124,383			265,850			299,674
Mortgage loans sold with servicing rights released		25,179			18,428			20,411			60,179			53,022
Net gains on the sale of mortgage loans		2,025			1,793			3,829			5,753			8,044
Net gains as a percent of mortgage
loans sold (“Loan Sales Margin”)		2.50	%		2.83	%		3.08	%		2.16	%		2.68	%
Fair value adjustments included in the Loan
Sales Margin		0.15			0.63			0.83			(0.14	)		0.45

Non-Interest Expense

	Three months ended								Nine months ended
	September 30,			June 30,		September 30,			September 30,
	2011			2011		2010			2011		2010
	(In thousands)
Compensation	$	10,158		$	10,020	$	10,336		$	29,990	$	30,754
Performance-based compensation		281			334		357			772		1,656
Payroll taxes and employee benefits		2,215			2,675		2,113			7,270		7,039
Compensation and employee benefits		12,654			13,029		12,806			38,032		39,449
Loan and collection		2,658			3,580		3,805			10,105		11,376
Occupancy, net		2,651			2,663		2,721			8,415		8,225
Data processing		2,502			2,415		2,248			7,227		7,187
Vehicle service contract counterparty contingencies		1,345			1,311		5,968			5,002		14,247
Furniture, fixtures and equipment		1,308			1,502		1,591			4,228		4,958
Net losses on other real estate and repossessed assets		1,931			777		1,296			4,114		4,879
Credit card and bank service fees		869			1,013		1,378			2,929		4,553
FDIC deposit insurance		885			652		1,651			2,772		5,216
Communications		863			889		1,054			2,700		3,142
Legal and professional fees		751			801		831			2,330		2,861
Advertising		740			670		692			1,964		2,145
Supplies		376			392		429			1,170		1,237
Amortization of intangible assets		343			343		320			1,029		965
Costs (recoveries) related to unfunded lending commitments		(172	)		89		(807	)		12		(471	)
Other		1,758			1,779		1,525			5,206		4,634
Total non-interest expense	$	31,462		$	31,905	$	37,508		$	97,235	$	114,603

Average Balances and Rates

	Three Months Ended September 30,
	2011							2010
	Average Balance		Interest		Rate(3)			Average Balance		Interest		Rate(3)
Assets (1)	(Dollars in thousands)
Taxable loans	$	1,668,940	$	27,140		6.47	%	$	2,012,966	$	34,269		6.77	%
Tax-exempt loans (2)		7,728		82		4.21			9,398		101		4.26
Taxable securities		49,911		297		2.36			76,935		509		2.62
Tax-exempt securities (2)		29,259		301		4.08			35,441		383		4.29
Cash – interest bearing		282,170		179		0.25			358,183		260		0.29
Other investments		21,005		188		3.55			26,443		165		2.48
Interest Earning Assets		2,059,013		28,187		5.44			2,519,366		35,687		5.63
Cash and due from banks		56,233							53,518
Other assets, net		192,282							173,850
Total Assets	$	2,307,528						$	2,746,734

Liabilities
Savings and NOW	$	1,008,525		608		0.24		$	1,092,202		648		0.24
Time deposits		577,723		2,622		1.80			938,930		6,089		2.57
Other borrowings		86,696		1,183		5.41			183,589		1,965		4.25
Interest Bearing Liabilities		1,672,944		4,413		1.05			2,214,721		8,702		1.56
Demand deposits		477,093							361,517
Other liabilities		42,614							48,905
Shareholders’ equity		114,877							121,591
Total liabilities and shareholders’ equity	$	2,307,528						$	2,746,734

Net Interest Income			$	23,774						$	26,985

Net Interest Income as a Percent of Earning Assets						4.59	%						4.26	%

(1)	All domestic, except for $0.01 million and $0.2 million for the three months ended September 30, 2011 and 2010, respectively, of average payment plan 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.

(3)	Annualized.

Average Balances and Rates

	Nine Months Ended September 30,
	2011							2010
	Average Balance		Interest		Rate(3)			Average Balance		Interest		Rate(3)
Assets (1)	(Dollars in thousands)
Taxable loans	$	1,728,076	$	84,554		6.54	%	$	2,126,705	$	109,760		6.90	%
Tax-exempt loans (2)		8,064		254		4.21			9,795		312		4.26
Taxable securities		51,010		1,108		2.90			86,830		2,571		3.96
Tax-exempt securities (2)		30,087		931		4.14			49,516		1,594		4.30
Cash – interest bearing		319,288		605		0.25			319,548		609		0.25
Other investments		22,486		580		3.45			27,094		577		2.85
Interest Earning Assets		2,159,011		88,032		5.45			2,619,488		115,423		5.89
Cash and due from banks		52,475							53,742
Other assets, net		191,215							160,960
Total Assets	$	2,402,701						$	2,834,190

Liabilities
Savings and NOW	$	1,005,436		1,805		0.24		$	1,088,437		2,181		0.27
Time deposits		687,043		10,881		2.12			1,028,119		20,283		2.64
Other borrowings		95,337		3,738		5.24			212,901		7,372		4.63
Interest Bearing Liabilities		1,787,816		16,424		1.23			2,329,457		29,836		1.71
Demand deposits		456,514							343,340
Other liabilities		43,977							55,486
Shareholders’ equity		114,394							105,907
Total liabilities and shareholders’ equity	$	2,402,701						$	2,834,190

Net Interest Income			$	71,608						$	85,587

Net Interest Income as a Percent of Earning Assets						4.43	%						4.37	%

(1)	All domestic, except for $0.02 million and $0.5 million for the nine months ended September 30, 2011 and 2010, respectively, of average payment plan 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.

(3)	Annualized.

Commercial Loan Portfolio Analysis as of September 30, 2011

	Total Commercial Loans
			Watch Credits						Percent of Loan
Loan Category	All Loans		Performing		Non- performing		Total		Category in Watch Credit
	(Dollars in thousands)
Land	$	18,872	$	3,992	$	2,441	$	6,433		34.1	%
Land Development		19,854		9,855		1,707		11,562		58.2
Construction		18,422		4,058		396		4,454		24.2
Income Producing		278,912		57,929		10,175		68,104		24.4
Owner Occupied		174,978		27,574		4,891		32,465		18.6
Total Commercial Real Estate Loans (1)	$	511,038	$	103,408		19,610	$	123,018		24.1

Other Commercial Loans(1)	$	143,284	$	18,585		2,717	$	21,302		14.9
Total non-performing commercial loans					$	22,327

(1)

The total of these two categories is different than the September 30, 2011, Consolidated Statement of Financial Condition due primarily to loans in process.

Independent Bank (IBCP) 8-KIndependent Bank Corporation Reports