Independent Bank (IBCP) 8-K Independent Bank Corporation Reports

Exhibit 99.2

INDEPENDENT BANK CORPORATION AND SUBSIDIARIES

Supplemental Data

Non-performing assets (1)

	March 31,			December 31,
	2012			2011
	(Dollars in thousands)
Non-accrual loans	$	51,475		$	59,309
Loans 90 days or more past due and still accruing interest		258			574
Total non-performing loans		51,733			59,883
Other real estate and repossessed assets		30,918			34,042
Total non-performing assets	$	82,651		$	93,925
As a percent of Portfolio Loans
Non-performing loans		3.37	%		3.80	%
Allowance for loan losses		3.65			3.73
Non-performing assets to total assets		3.42			4.07
Allowance for loan losses as a percent of non-performing loans		108.26			98.33

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

Troubled debt restructurings (“TDR”)

	March 31, 2012
	Commercial		Retail			Total
	(In thousands)
Performing TDR’s	$	34,301	$	86,724		$	121,025
Non-performing TDR’s (1)		12,655		12,518	(2)		25,173
Total	$	46,956	$	99,242		$	146,198

	December 31, 2011
	Commercial		Retail			Total
	(In thousands)
Performing TDR’s	$	29,799	$	86,770		$	116,569
Non-performing TDR’s (1)		14,567		14,081	(2)		28,648
Total	$	44,366	$	100,851		$	145,217

(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.

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Allowance for loan losses	Three months ended
	March 31,
	2012						2011
				Unfunded						Unfunded
	Loans			Commitments			Loans			Commitments
	(Dollars in thousands)
Balance at beginning of period	$	58,884		$	1,286		$	67,915		$	1,322
Additions (deduction)
Provision for loan losses		5,131			-			10,702			-
Recoveries credited to allowance		1,880			-			935			-
Loans charged against the allowance		(9,889	)		-			(13,791	)		-
Additions (deductions) included in non-interest expense		-			(47	)		-			95
Balance at end of period	$	56,006		$	1,239		$	65,761		$	1,417
Net loans charged against the allowance to average Portfolio Loans		2.07	%					2.93	%

Alternative Sources of Funds

	March 31,						December 31,
	2012						2011
			Average						Average
	Amount		Maturity	Rate			Amount		Maturity	Rate
	(Dollars in thousands)
Brokered CDs	$	46,000	1.1 years		1.31	%	$	42,279	1.0 years		1.59	%
Fixed-rate FHLB advances		30,030	3.2 years		3.95			30,384	3.3 years		3.99
Variable-rate FHLB advances(1)		3,000	2.1 years		0.66			3,000	2.3 years		0.51
Total	$	79,030	1.9 years		2.29	%	$	75,663	2.0 years		2.51	%

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

Capitalization

	March 31,			December 31,
	2012			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		80,913			79,857
Common stock		248,995			248,950
Accumulated deficit		(211,811	)		(214,259	)
Accumulated other comprehensive loss		(13,065	)		(11,921	)
Total shareholders’ equity		105,032			102,627
Total capitalization	$	153,700		$	151,295

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Non-Interest Income

	Three months ended
	March 31,			December 31,			March 31,
	2012			2011			2011
	(In thousands)
Service charges on deposit accounts	$	4,201		$	4,617		$	4,282
Interchange income		2,322			2,259			2,168
Net gains (losses) on assets
Mortgage loans		3,860			3,509			1,935
Securities		684			(22	)		213
Other than temporary impairment loss on securities
Total impairment loss		(177	)		(614	)		(469	)
Loss recognized in other comprehensive loss		-			-			327
Net impairment loss recognized in earnings		(177	)		(614	)		(142	)
Mortgage loan servicing		736			(126	)		896
Investment and insurance commissions		447			437			555
Bank owned life insurance		424			493			425
Title insurance fees		508			375			473
(Increase) decrease in fair value of U.S. Treasury warrant		(154	)		112			354
Other		1,733			1,451			1,552
Total non-interest income	$	14,584		$	12,491		$	12,711

Capitalized Mortgage Loan Servicing Rights

	Three months ended
	March 31,
	2012			2011
	(In thousands)
Balance at beginning of period	$	11,229		$	14,661
Originated servicing rights capitalized		924			1,064
Amortization		(1,062	)		(749	)
Change in valuation allowance		704			555
Balance at end of period	$	11,795		$	15,531
Valuation allowance at end of period	$	5,840		$	2,655

Mortgage Loan Activity

	Three months ended
	March 31,			December 31,			March 31,
	2012			2011			2011
	(Dollars in thousands)
Mortgage loans originated	$	112,798		$	139,351		$	95,573
Mortgage loans sold		112,141			117,643			121,488
Mortgage loans sold with servicing rights released		15,340			21,017			16,572
Net gains on the sale of mortgage loans		3,860			3,509			1,935
Net gains as a percent of mortgage loans sold (“Loan Sales Margin”)		3.44	%		2.98	%		1.59	%
Fair value adjustments included in the Loan Sales Margin		0.92			0.29			(0.72	)

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Non-Interest Expense

	Three months ended
	March 31,			December 31,			March 31,
	2012			2011			2011
	(In thousands)
Compensation	$	9,945		$	9,845		$	9,812
Performance-based compensation		85			677			157
Payroll taxes and employee benefits		2,452			1,930			2,380
Compensation and employee benefits		12,482			12,452			12,349
Loan and collection		2,890			2,309			3,867
Occupancy, net		2,716			2,768			3,101
Data processing		2,339			2,524			2,310
Furniture, fixtures and equipment		1,294			1,307			1,418
Net losses on other real estate and repossessed assets		987			1,710			1,406
Legal and professional fees		897			1,611			778
Communications		875			852			948
FDIC deposit insurance		857			735			1,235
Credit card and bank service fees		651			727			1,047
Advertising		556			539			554
Vehicle service contract counterparty contingencies		471			6,046			2,346
Provision for loss reimbursement on sold loans		432			973			406
Supplies		394			401			402
Amortization of intangible assets		272			342			343
Costs (recoveries) related to unfunded lending commitments		(47	)		(48	)		95
Other		(17	)		1,465			1,263
Total non-interest expense	$	28,049		$	36,713		$	33,868

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Average Balances and Rates

	Three Months Ended
	March 31,
	2012							2011
	Average							Average
	Balance		Interest		Rate(3)			Balance		Interest		Rate(3)
Assets (1)	(Dollars in thousands)
Taxable loans	$	1,582,444	$	24,270		6.16	%	$	1,798,106	$	29,397		6.60	%
Tax-exempt loans (2)		7,239		76		4.22			8,391		87		4.20
Taxable securities		184,798		658		1.43			41,621		467		4.55
Tax-exempt securities (2)		27,145		296		4.39			30,956		332		4.35
Cash – interest bearing		318,573		199		0.25			369,793		232		0.25
Other investments		20,828		197		3.80			23,630		203		3.48
Interest Earning Assets		2,141,027		25,696		4.82			2,272,497		30,718		5.46
Cash and due from banks		56,080							50,888
Other assets, net		164,120							191,884
Total Assets	$	2,361,227						$	2,515,269
Liabilities
Savings and interest-bearing checking	$	1,053,896		472		0.18		$	994,530		589		0.24
Time deposits		576,967		1,952		1.36			805,645		4,356		2.19
Other borrowings		83,384		1,172		5.65			104,907		1,323		5.11
Interest Bearing Liabilities		1,714,247		3,596		0.84			1,905,082		6,268		1.33
Non-interest bearing deposits		504,019							448,979
Other liabilities		39,252							44,231
Shareholders’ equity		103,709							116,977
Total liabilities and shareholders’ equity	$	2,361,227						$	2,515,269
Net Interest Income			$	22,100						$	24,450
Net Interest Income as a Percent of Average Interest Earning Assets						4.14	%						4.34	%

(1) All domestic, except for $0.03 million for the three months ended March 31, 2011, 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.

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Commercial Loan Portfolio Analysis as of March 31, 2012

	Total Commercial Loans
			Watch Credits						Percent of Loan
Loan Category	All Loans		Performing		Non- performing		Total		Category in Watch Credit
	(Dollars in thousands)
Land	$	16,955	$	1,147	$	4,302	$	5,449		32.1	%
Land Development		17,213		9,330		947		10,277		59.7
Construction		15,513		478		330		808		5.2
Income Producing		276,572		51,462		11,000		62,462		22.6
Owner Occupied		182,242		23,253		6,074		29,327		16.1
Total Commercial Real Estate Loans (1)	$	508,495	$	85,670		22,653	$	108,323		21.3
Other Commercial Loans(1)	$	139,511	$	19,109		1,942	$	21,051		15.1
Total non-performing commercial loans					$	24,595

(1) The total of these two categories is different than the March 31, 2012, Consolidated Statement of Financial Condition due primarily to loans in process.

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