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

Exhibit 99.2

INDEPENDENT BANK CORPORATION AND SUBSIDIARIES

Supplemental Data

Non-performing assets (1)
	June 30, 2016			March 31, 2016			December 31, 2015			September 30, 2015			June 30, 2015
	(Dollars in thousands)
Non-accrual loans	$	10,803		$	10,425		$	10,607		$	15,834		$	12,274
Loans 90 days or more past due and still accruing interest		94			147			116			-			63
Total non-performing loans		10,897			10,572			10,723			15,834			12,337
Other real estate and repossessed assets		5,572			6,672			7,150			3,851			4,471
Total non-performing assets	$	16,469		$	17,244		$	17,873		$	19,685		$	16,808
As a percent of Portfolio Loans
Non-performing loans		0.69	%		0.69	%		0.71	%		1.08	%		0.85	%
Allowance for loan losses		1.44			1.46			1.49			1.68			1.70
Non-performing assets to total assets		0.67			0.69			0.74			0.82			0.73
Allowance for loan losses as a percent of non-performing loans		208.42			212.78			210.48			155.39			199.29

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

Troubled debt restructurings ("TDR")
	June 30, 2016
	Commercial		Retail			Total
	(In thousands)
Performing TDR's	$	14,130	$	64,818		$	78,948
Non-performing TDR's(1)		2,678		3,788	(2)		6,466
Total	$	16,808	$	68,606		$	85,414

	December 31, 2015
	Commercial		Retail			Total
	(In thousands)
Performing TDR's	$	13,318	$	68,194		$	81,512
Non-performing TDR's(1)		3,041		3,777	(2)		6,818
Total	$	16,359	$	71,971		$	88,330

(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
	Six months ended
	June 30,
	2016						2015
				Unfunded						Unfunded
	Loans			Commitments			Loans			Commitments
	(Dollars in thousands)
Balance at beginning of period	$	22,570		$	652		$	25,990		$	539
Additions (deductions)
Provision for loan losses		(1,264	)		-			(793	)		-
Recoveries credited to allowance		2,718			-			2,245			-
Loans charged against the allowance		(1,312	)		-			(2,856	)		-
Additions (deductions) included in non-interest expense		-			(67	)		-			20
Balance at end of period	$	22,712		$	585		$	24,586		$	559
Net loans charged against the allowance to average Portfolio Loans (annualized)		(0.18	)%					0.09	%

Capitalization
	June 30,			December 31,
	2016			2015
	(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		324,268			339,462
Accumulated deficit		(74,062	)		(82,334	)
Accumulated other comprehensive loss		(3,283	)		(6,036	)
Total shareholders’ equity		246,923			251,092
Total capitalization	$	281,423		$	285,592

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Non-Interest Income
	Three months ended									Six months ended
	June 30,			March 31,			June 30,			June 30,
	2016			2016			2015			2016			2015
	(In thousands)
Service charges on deposit accounts	$	3,038		$	2,845		$	3,117		$	5,883		$	5,967
Interchange income		1,976			1,878			2,240			3,854			4,382
Net gains (losses) on assets
Mortgage loans		2,529			1,642			1,784			4,171			3,923
Securities		185			162			(33	)		347			52
Mortgage loan servicing		(334	)		(978	)		1,452			(1,312	)		1,032
Investment and insurance commissions		384			467			487			851			933
Bank owned life insurance		298			290			325			588			675
Title insurance fees		253			288			337			541			593
Other		1,251			1,215			1,278			2,466			2,392
Total non-interest income	$	9,580		$	7,809		$	10,987		$	17,389		$	19,949

Capitalized Mortgage Loan Servicing Rights

	Three months ended						Six months ended
	June 30,						June 30,
	2016			2015			2016			2015
	(In thousands)
Balance at beginning of period	$	10,983		$	11,318		$	12,436		$	12,106
Originated servicing rights capitalized		703			787			1,257			1,450
Amortization		(709	)		(800	)		(1,266	)		(1,559	)
Change in valuation allowance		(646	)		1,230			(2,096	)		538
Balance at end of period	$	10,331		$	12,535		$	10,331		$	12,535
Valuation allowance at end of period	$	5,368		$	3,235		$	5,368		$	3,235

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Mortgage Loan Activity
	Three months ended									Six months ended
	June 30,			March 31,			June 30,			June 30,
	2016			2016			2015			2016			2015
	(Dollars in thousands)
Mortgage loans originated	$	91,966		$	73,502		$	101,306		$	165,468		$	181,096
Mortgage loans sold		70,479			55,666			82,167			126,145			150,894
Net gains on mortgage loans		2,529			1,642			1,784			4,171			3,923
Net gains as a percent of mortgage loans sold  ("Loan Sales Margin")		3.59	%		2.95	%		2.17	%		3.31	%		2.60	%
Fair value adjustments included in the Loan Sales Margin		0.34			0.25			(0.07	)		0.30			0.33

Non-Interest Expense
	Three months ended									Six months ended
	June 30,			March 31,			June 30,			June 30,
	2016			2016			2015			2016			2015
	(In thousands)
Compensation	$	8,168		$	8,234		$	8,131		$	16,402		$	16,461
Performance-based compensation		1,679			1,521			1,744			3,200			3,032
Payroll taxes and employee benefits		2,153			2,126			1,916			4,279			4,083
Compensation and employee benefits		12,000			11,881			11,791			23,881			23,576
Occupancy, net		1,856			2,207			2,040			4,063			4,459
Data processing		1,936			2,101			2,027			4,037			3,957
Furniture, fixtures and equipment		965			984			965			1,949			1,917
Communications		722			888			694			1,610			1,430
Loan and collection		571			825			967			1,396			2,122
Advertising		478			477			448			955			932
Legal and professional		345			413			453			758			833
FDIC deposit insurance		331			334			351			665			694
Interchange expense		267			266			289			533			580
Credit card and bank service fees		198			187			203			385			405
Supplies		197			176			216			373			429
Amortization of intangible assets		87			87			87			174			174
Vehicle service contract counterparty contingencies		(1	)		30			30			29			59
Provision for loss reimbursement on sold loans		-			(15	)		45			(15	)		(24	)
Cost (recoveries) related to unfunded lending commitments		(80	)		13			4			(67	)		20
Net gains on other real estate and repossessed assets		(159	)		(6	)		(139	)		(165	)		(178	)
Other		1,182			1,197			1,108			2,379			2,345
Total non-interest expense	$	20,895		$	22,045		$	21,579		$	42,940		$	43,730

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Average Balances and Tax Equivalent Rates
	Three Months Ended
	June 30,
			2016							2015
	Average							Average
	Balance		Interest		Rate (3)			Balance		Interest		Rate (3)
	(Dollars in thousands)
Assets (1)
Taxable loans	$	1,573,471	$	18,173		4.64	%	$	1,449,218	$	17,707		4.90	%
Tax-exempt loans (2)		3,555		55		6.22			4,198		67		6.40
Taxable securities		541,557		2,480		1.83			529,345		1,869		1.41
Tax-exempt securities (2)		50,091		432		3.45			31,397		341		4.34
Interest bearing cash		74,384		100		0.54			50,664		54		0.43
Other investments		15,478		197		5.12			18,145		235		5.19
Interest Earning Assets		2,258,536		21,437		3.81			2,082,967		20,273		3.90
Cash and due from banks		34,515							42,980
Other assets, net		154,859							167,499
Total Assets	$	2,447,910						$	2,293,446
Liabilities
Savings and interest- bearing checking	$	1,027,913		277		0.11		$	990,019		260		0.11
Time deposits		430,955		875		0.82			371,304		707		0.76
Other borrowings		47,467		485		4.11			47,986		463		3.87
Interest Bearing Liabilities		1,506,335		1,637		0.44			1,409,309		1,430		0.41
Non-interest bearing deposits		672,920							603,706
Other liabilities		25,855							25,948
Shareholders’ equity		242,800							254,483
Total liabilities and shareholders’ equity	$	2,447,910						$	2,293,446
Net Interest Income			$	19,800						$	18,843
Net Interest Income as a Percent of Average Interest Earning Assets						3.52	%						3.62	%

(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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Average Balances and Tax Equivalent Rates
	Six Months Ended
	June 30,
			2016							2015
	Average							Average
	Balance		Interest		Rate (3)			Balance		Interest		Rate (3)
	(Dollars in thousands)
Assets (1)
Taxable loans	$	1,559,807	$	36,693		4.72	%	$	1,434,817	$	34,902		4.89	%
Tax-exempt loans (2)		3,601		110		6.14			4,279		135		6.36
Taxable securities		531,695		4,724		1.78			517,941		3,627		1.40
Tax-exempt securities (2)		46,036		813		3.53			32,630		674		4.13
Interest bearing cash		77,910		206		0.53			62,850		124		0.40
Other investments		15,512		397		5.15			19,063		503		5.32
Interest Earning Assets		2,234,561		42,943		3.86			2,071,580		39,965		3.88
Cash and due from banks		39,841							44,500
Other assets, net		159,979							169,678
Total Assets	$	2,434,381						$	2,285,758
Liabilities
Savings and interest-bearing checking	$	1,021,015		547		0.11		$	987,763		526		0.11
Time deposits		433,449		1,719		0.80			374,115		1,448		0.78
Other borrowings		47,495		962		4.07			48,012		917		3.85
Interest Bearing Liabilities		1,501,959		3,228		0.43			1,409,890		2,891		0.41
Non-interest bearing deposits		663,168							596,935
Other liabilities		24,811							24,951
Shareholders’ equity		244,443							253,982
Total liabilities and shareholders’ equity	$	2,434,381						$	2,285,758
Net Interest Income			$	39,715						$	37,074
Net Interest Income as a Percent of Average Interest Earning Assets						3.57	%						3.60	%

(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 June 30, 2016
	Total Commercial Loans
			Watch Credits						Percent of Loan Category in Watch Credit
Loan Category	All Loans		Performing		Non- performing		Total
	(Dollars in thousands)
Land	$	8,813	$	354	$	-	$	354		4.0	%
Land Development		5,875		1,425		133		1,558		26.5
Construction		33,651		-		-		-		0.0
Income Producing		307,108		6,355		950		7,305		2.4
Owner Occupied		220,263		6,621		459		7,080		3.2
Total Commercial Real Estate Loans	$	575,710	$	14,755		1,542	$	16,297		2.8
Other Commercial Loans	$	216,290	$	12,068		2,168	$	14,236		6.6
Total non-performing commercial loans					$	3,710

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