Exhibit 99.2
INDEPENDENT BANK CORPORATION AND SUBSIDIARIES
Supplemental Data
Non-performing assets (1) | ||||||||
March 31, 2015 | December 31, 2014 | |||||||
(Dollars in thousands) | ||||||||
Non-accrual loans | $ | 14,593 | $ | 15,231 | ||||
Loans 90 days or more past due and still accruing interest | 194 | 7 | ||||||
Total non-performing loans | 14,787 | 15,238 | ||||||
Other real estate and repossessed assets | 5,662 | 6,454 | ||||||
Total non-performing assets | $ | 20,449 | $ | 21,692 | ||||
As a percent of Portfolio Loans | ||||||||
Non-performing loans | 1.04 | % | 1.08 | |||||
Allowance for loan losses | 1.73 | 1.84 | ||||||
Non-performing assets to total assets | 0.88 | 0.96 | ||||||
Allowance for loan losses as a percent of non-performing loans | 166.90 | 170.56 |
((1) | Excludes loans classified as "trouble debt restructured" that are not past due and vehicle service contract counterparty receivables, net. |
Troubled debt restructurings ("TDR")
March 31, 2015 | ||||||||||||
Commercial | Retail | Total | ||||||||||
(In thousands) | ||||||||||||
Performing TDR's | $ | 27,904 | $ | 71,477 | $ | 99,381 | ||||||
Non-performing TDR's(1) | 1,935 | 5,194 | (2) | 7,129 | ||||||||
Total | $ | 29,839 | $ | 76,671 | $ | 106,510 |
December 31, 2014 | ||||||||||||
Commercial | Retail | Total | ||||||||||
(In thousands) | ||||||||||||
Performing TDR's | $ | 29,475 | $ | 73,496 | $ | 102,971 | ||||||
Non-performing TDR's(1) | 1,978 | 5,225 | (2) | 7,203 | ||||||||
Total | $ | 31,453 | $ | 78,721 | $ | 110,174 |
(1) | Included in non-performing assets 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, | ||||||||||||||||
2015 | 2014 | |||||||||||||||
Loans | Unfunded Commitments | Loans | Unfunded Commitments | |||||||||||||
(Dollars in thousands) | ||||||||||||||||
Balance at beginning of period | $ | 25,990 | $ | 539 | $ | 32,325 | $ | 508 | ||||||||
Additions (deductions) | ||||||||||||||||
Provision for loan losses | (659 | ) | - | 428 | - | |||||||||||
Recoveries credited to allowance | 990 | - | 1,068 | - | ||||||||||||
Loans charged against the allowance | (1,642 | ) | - | (3,384 | ) | - | ||||||||||
Additions (deductions) included in non-interest expense | - | 16 | - | 10 | ||||||||||||
Balance at end of period | $ | 24,679 | $ | 555 | $ | 30,437 | $ | 518 | ||||||||
Net loans charged against the allowance to average Portfolio Loans | 0.19 | % | 0.69 | % |
Capitalization
March 31, 2015 | December 31, 2014 | |||||||
(In thousands) | ||||||||
Subordinated debentures | $ | 35,569 | $ | 35,569 | ||||
Amount not qualifying as regulatory capital | (1,069 | ) | (1,069 | ) | ||||
Amount qualifying as regulatory capital | 34,500 | 34,500 | ||||||
Shareholders’ equity | ||||||||
Common stock | 351,881 | 352,462 | ||||||
Accumulated deficit | (94,054 | ) | (96,455 | ) | ||||
Accumulated other comprehensive loss | (4,202 | ) | (5,636 | ) | ||||
Total shareholders’ equity | 253,625 | 250,371 | ||||||
Total capitalization | $ | 288,125 | $ | 284,871 |
2
Non-Interest Income
Three months ended | ||||||||||||
March 31, 2015 | December 31, 2014 | March 31, 2014 | ||||||||||
(In thousands) | ||||||||||||
Service charges on deposit accounts | $ | 2,850 | $ | 3,280 | $ | 3,055 | ||||||
Interchange income | 2,142 | 2,172 | 1,941 | |||||||||
Net gains (losses) on assets | ||||||||||||
Mortgage loans | 2,139 | 1,489 | 1,144 | |||||||||
Securities | 85 | (5 | ) | 112 | ||||||||
Mortgage loan servicing | (420 | ) | (598 | ) | 264 | |||||||
Investment and insurance commissions | 446 | 509 | 402 | |||||||||
Bank owned life insurance | 350 | 350 | 319 | |||||||||
Title insurance fees | 256 | 261 | 274 | |||||||||
Gain on extinguishment of debt | - | 500 | - | |||||||||
Other | 1,114 | 1,243 | 1,444 | |||||||||
Total non-interest income | $ | 8,962 | $ | 9,201 | $ | 8,955 |
Capitalized Mortgage Loan Servicing Rights
Three months ended March 31, | ||||||||
2015 | 2014 | |||||||
(In thousands) | ||||||||
Balance at beginning of period | $ | 12,106 | $ | 13,710 | ||||
Originated servicing rights capitalized | 663 | 382 | ||||||
Amortization | (759 | ) | (534 | ) | ||||
Change in valuation allowance | (692 | ) | (285 | ) | ||||
Balance at end of period | $ | 11,318 | $ | 13,273 | ||||
Valuation allowance at end of period | $ | 4,465 | $ | 3,140 |
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Motgage Loan Activity
Three months ended | ||||||||||||
March 31, 2015 | December 31, 2014 | March 31, 2014 | ||||||||||
(Dollars in thousands) | ||||||||||||
Mortgage loans originated | $ | 79,790 | $ | 78,322 | $ | 44,241 | ||||||
Mortgage loans sold | 68,727 | 67,490 | 47,118 | |||||||||
Mortgage loans sold with servicing rights released | 2,669 | 10,029 | 7,861 | |||||||||
Net gains on the sale of mortgage loans | 2,139 | 1,489 | 1,144 | |||||||||
Net gains as a percent of mortgage loans sold ("Loan Sales Margin") | 3.11 | % | 2.21 | % | 2.43 | % | ||||||
Fair value adjustments included in the Loan Sales Margin | 0.81 | (0.18 | ) | (0.14 | ) |
Non-Interest Expense
Three months ended | ||||||||||||
March 31, 2015 | December 31, 2014 | March 31, 2014 | ||||||||||
(In thousands) | ||||||||||||
Compensation | $ | 8,330 | $ | 8,512 | $ | 8,308 | ||||||
Performance-based compensation | 1,288 | 1,806 | 912 | |||||||||
Payroll taxes and employee benefits | 2,167 | 2,129 | 2,018 | |||||||||
Compensation and employee benefits | 11,785 | 12,447 | 11,238 | |||||||||
Occupancy, net | 2,419 | 2,197 | 2,483 | |||||||||
Data processing | 1,930 | 1,879 | 2,086 | |||||||||
Loan and collection | 1,155 | 1,109 | 1,465 | |||||||||
Furniture, fixtures and equipment | 952 | 1,010 | 1,069 | |||||||||
Communications | 736 | 714 | 789 | |||||||||
Advertising | 484 | 646 | 519 | |||||||||
Legal and professional fees | 380 | 589 | 401 | |||||||||
FDIC deposit insurance | 343 | 332 | 417 | |||||||||
Interchange expense | 291 | 179 | 402 | |||||||||
Supplies | 213 | 247 | 239 | |||||||||
Credit card and bank service fees | 202 | 212 | 263 | |||||||||
Amortization of intangible assets | 87 | 134 | 134 | |||||||||
Vehicle service contract counterparty contingencies | 29 | 30 | 68 | |||||||||
Cost related to unfunded lending commitments | 16 | 4 | 10 | |||||||||
Provision for loss reimbursement on sold loans | (69 | ) | - | (481 | ) | |||||||
Net gains on other real estate and repossessed assets | (39 | ) | (90 | ) | (87 | ) | ||||||
Other | 1,237 | 1,268 | 1,385 | |||||||||
Total non-interest expense | $ | 22,151 | $ | 22,907 | $ | 22,400 |
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Average Balances and Tax Equivalent Rates
Three Months Ended March 31, | ||||||||||||||||||||||||
2015 | 2014 | |||||||||||||||||||||||
Average Balance | Interest | Rate (3) | Average Balance | Interest | Rate (3) | |||||||||||||||||||
(Dollars in thousands) | ||||||||||||||||||||||||
Assets (1) | ||||||||||||||||||||||||
Taxable loans | $ | 1,420,272 | $ | 17,195 | 4.88 | % | $ | 1,369,065 | $ | 18,162 | 5.36 | % | ||||||||||||
Tax-exempt loans (2) | 4,360 | 68 | 6.33 | 5,193 | 82 | 6.40 | ||||||||||||||||||
Taxable securities | 506,411 | 1,758 | 1.39 | 441,783 | 1,383 | 1.27 | ||||||||||||||||||
Tax-exempt securities (2) | 33,877 | 333 | 3.93 | 41,023 | 399 | 3.94 | ||||||||||||||||||
Cash - interest bearing | 75,171 | 70 | 0.38 | 108,855 | 91 | 0.34 | ||||||||||||||||||
Other investments | 19,991 | 268 | 5.44 | 23,419 | 332 | 5.75 | ||||||||||||||||||
Interest Earning Assets | 2,060,082 | 19,692 | 3.86 | 1,989,338 | 20,449 | 4.16 | ||||||||||||||||||
Cash and due from banks | 46,035 | 45,439 | ||||||||||||||||||||||
Other assets, net | 171,878 | 188,246 | ||||||||||||||||||||||
Total Assets | $ | 2,277,995 | $ | 2,223,023 | ||||||||||||||||||||
Liabilities | ||||||||||||||||||||||||
Savings and interest-bearing checking | $ | 985,482 | 266 | 0.11 | $ | 946,295 | 263 | 0.11 | ||||||||||||||||
Time deposits | 376,958 | 741 | 0.80 | 443,630 | 1,030 | 0.94 | ||||||||||||||||||
Other borrowings | 48,038 | 454 | 3.83 | 54,329 | 512 | 3.82 | ||||||||||||||||||
Interest Bearing Liabilities | 1,410,478 | 1,461 | 0.42 | 1,444,254 | 1,805 | 0.51 | ||||||||||||||||||
Non-interest bearing deposits | 590,088 | 511,463 | ||||||||||||||||||||||
Other liabilities | 23,955 | 32,284 | ||||||||||||||||||||||
Shareholders’ equity | 253,474 | 235,022 | ||||||||||||||||||||||
Total liabilities and shareholders’ equity | $ | 2,277,995 | $ | 2,223,023 | ||||||||||||||||||||
Net Interest Income | $ | 18,231 | $ | 18,644 | ||||||||||||||||||||
Net Interest Income as a Percent of Average Interest Earning Assets | 3.57 | % | 3.79 | % |
(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% |
(3) | Annualized |
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Commercial Loan Portfolio Analysis as of March 31, 2015
Total Commercial Loans | ||||||||||||||||||||
Watch Credits | Percent of Loan | |||||||||||||||||||
Loan Category | All Loans | Performing | Non-performing | Total | Category in Watch Credit | |||||||||||||||
(Dollars in thousands) | ||||||||||||||||||||
Land | $ | 8,274 | $ | 771 | $ | 358 | $ | 1,129 | 13.6 | % | ||||||||||
Land Development | 9,630 | 1,720 | 217 | 1,937 | 20.1 | |||||||||||||||
Construction | 14,495 | 24 | - | 24 | 0.2 | |||||||||||||||
Income Producing | 271,337 | 10,228 | 1,187 | 11,415 | 4.2 | |||||||||||||||
Owner Occupied | 212,997 | 13,091 | 477 | 13,568 | 6.4 | |||||||||||||||
Total Commercial Real Estate Loans | $ | 516,733 | $ | 25,834 | 2,239 | $ | 28,073 | 5.4 | ||||||||||||
Other Commercial Loans | $ | 193,590 | $ | 18,281 | 2,466 | $ | 20,747 | 10.7 | ||||||||||||
Total non-performing commercial loans | $ | 4,705 |
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