Independent Bank (IBCP) 8-K Results of Operations and Financial Condition

Exhibit 99.2

INDEPENDENT BANK CORPORATION AND SUBSIDIARIES

Supplemental Data

Non-performing assets ⁽¹⁾

	March 31, 2017			December 31, 2016			September 30, 2016			June 30, 2016			March 31, 2016
	(Dollars in thousands)
Non-accrual loans	$	9,014		$	13,364		$	10,801		$	10,803		$	10,425
Loans 90 days or more past due and still accruing interest		-			-			-			94			147
Total non-performing loans		9,014			13,364			10,801			10,897			10,572
Other real estate and repossessed assets		5,257			5,004			4,989			5,572			6,672
Total non-performing assets	$	14,271		$	18,368		$	15,790		$	16,469		$	17,244
As a percent of Portfolio Loans
Non-performing loans		0.54	%		0.83	%		0.67	%		0.69	%		0.69	%
Allowance for loan losses		1.20			1.26			1.37			1.44			1.46
Non-performing assets to total assets		0.55			0.72			0.62			0.67			0.69
Allowance for loan losses as a percent of non-performing loans		222.30			151.41			204.08			208.42			212.78

(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, 2017
	Commercial		Retail			Total
	(In thousands)
Performing TDR's	$	10,206	$	57,544		$	67,750
Non-performing TDR's(1)		1,039		4,099	(2)		5,138
Total	$	11,245	$	61,643		$	72,888

	December 31, 2016
	Commercial		Retail			Total
	(In thousands)
Performing TDR's	$	10,560	$	59,726		$	70,286
Non-performing TDR's(1)		3,565		4,071	(2)		7,636
Total	$	14,125	$	63,797		$	77,922

(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,
	2017					2016
	Loans			Unfunded Commitments		Loans			Unfunded Commitments
	(Dollars in thousands)
Balance at beginning of period	$	20,234		$	650	$	22,570		$	652
Additions (deductions)
Provision for loan losses		(359	)		-		(530	)		-
Recoveries credited to allowance		1,129			-		959			-
Loans charged against the allowance		(966	)		-		(504	)		-
Additions (deductions) included in non-interest expense		-			110		-			13
Balance at end of period	$	20,038		$	760	$	22,495		$	665
Net loans charged against the allowance to average Portfolio Loans		(0.04	)%				(0.12	)%

Capitalization

	March 31, 2017			December 31, 2016
	(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		323,775			323,745
Accumulated deficit		(61,764	)		(65,657	)
Accumulated other comprehensive loss		(6,536	)		(9,108	)
Total shareholders’ equity		255,475			248,980
Total capitalization	$	289,975		$	283,480

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Non-Interest Income

	Three months ended
	March 31, 2017		December 31, 2016		March 31, 2016
	(In thousands)
Service charges on deposit accounts	$	3,009	$	3,242	$	2,845
Interchange income		1,922		2,141		1,878
Net gains on assets
Mortgage loans		2,571		2,839		1,642
Securities		27		261		162
Mortgage loan servicing, net		825		2,676		(978	)
Investment and insurance commissions		468		369		467
Bank owned life insurance		253		254		290
Title insurance fees		264		327		288
Other		1,000		1,092		1,215
Total non-interest income	$	10,339	$	13,201	$	7,809

Capitalized Mortgage Loan Servicing Rights

	Three months ended March 31,
	2017			2016
	(In thousands)
Balance at beginning of period	$	13,671		$	12,436
Change in accounting		542			-
Balance at beginning of period, as adjusted	$	14,213		$	12,436
Originated servicing rights capitalized		778			554
Amortization		-			(557	)
Change in valuation allowance		-			(1,450	)
Change in fair value		(264	)		-
Balance at end of period	$	14,727		$	10,983
Valuation allowance at end of period	$	-		$	4,722

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Mortgage Loan Activity

	Three months ended
	March 31, 2017			December 31, 2016			March 31, 2016
	(Dollars in thousands)
Mortgage loans originated	$	158,081		$	139,657		$	73,502
Mortgage loans sold		79,691			98,491			55,666
Net gains on mortgage loans		2,571			2,839			1,642
Net gains as a percent of mortgage loans sold  ("Loan Sales Margin")		3.23	%		2.88	%		2.95	%
Fair value adjustments included in the Loan Sales Margin		0.20			(0.50	)		0.25

Non-Interest Expense

	Three months ended
	March 31, 2017			December 31, 2016			March 31, 2016
	(In thousands)
Compensation	$	9,672		$	8,724		$	8,073
Performance-based compensation		1,993			1,900			1,682
Payroll taxes and employee benefits		2,482			2,043			2,126
Compensation and employee benefits		14,147			12,667			11,881
Occupancy, net		2,142			2,041			2,207
Data processing		1,937			1,944			2,101
Furniture, fixtures and equipment		977			973			984
Communications		683			862			888
Advertising		506			446			477
Legal and professional fees		437			564			413
Loan and collection		413			548			825
Interchange expense		283			302			266
FDIC deposit insurance		198			197			334
Credit card and bank service fees		191			203			187
Supplies		172			177			176
Cost (recoveries) related to unfunded lending commitments		110			(8	)		13
Amortization of intangible assets		87			87			87
Provision for loss reimbursement on sold loans		31			-			(15	)
Net (gains) losses on other real estate and repossessed assets		11			152			(6	)
Litigation settlement expense		-			2,300			-
Loss on sale of payment plan business		-			320			-
Vehicle service contract counterparty contingencies		(105	)		(78	)		30
Other		1,349			1,181			1,197
Total non-interest expense	$	23,569		$	24,878		$	22,045

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Average Balances and Tax Equivalent Rates

	Three Months Ended March 31,
			2017							2016
	Average Balance		Interest		Rate (2)			Average Balance		Interest		Rate (2)
	(Dollars in thousands)
Assets
Taxable loans	$	1,685,936	$	19,824		4.75	%	$	1,546,142	$	18,520		4.81	%
Tax-exempt loans (1)		4,067		52		5.19			3,647		55		6.07
Taxable securities		521,407		2,754		2.11			521,833		2,244		1.72
Tax-exempt securities (1)		78,044		698		3.58			41,982		381		3.63
Interest bearing cash		66,708		113		0.69			81,436		106		0.52
Other investments		15,543		199		5.19			15,546		200		5.17
Interest Earning Assets		2,371,705		23,640		4.02			2,210,586		21,506		3.90
Cash and due from banks		33,790							45,165
Other assets, net		153,992							165,104
Total Assets	$	2,559,487						$	2,420,855
Liabilities
Savings and interest-bearing checking	$	1,047,114		283		0.11		$	1,014,117		270		0.11
Time deposits		482,188		1,160		0.98			435,943		844		0.78
Other borrowings		45,004		470		4.24			47,524		477		4.04
Interest Bearing Liabilities		1,574,306		1,913		0.49			1,497,584		1,591		0.43
Non-interest bearing deposits		704,551							653,417
Other liabilities		29,064							23,768
Shareholders’ equity		251,566							246,086
Total liabilities and shareholders’ equity	$	2,559,487						$	2,420,855
Net Interest Income			$	21,727						$	19,915
Net Interest Income as a Percent of Average Interest Earning Assets						3.69	%						3.61	%

(1) Interest on tax-exempt loans and securities is presented on a fully tax equivalent basis assuming a marginal tax rate of 35%

(2) Annualized

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Reconciliation of Net Interest Margin, Fully Taxable Equivalent ("FTE")

	Three Months Ended March 31,
	2017			2016
	(Dollars in thousands)
Net interest income	$	21,466		$	19,763
Add:  taxable equivalent adjustment		261			152
Net interest income - taxable equivalent	$	21,727		$	19,915
Net interest margin (GAAP) (1)		3.67	%		3.60	%
Net interest margin (FTE) (1)		3.69	%		3.61	%

(1) Annualized

Commercial Loan Portfolio Analysis as of March 31, 2017

	Total Commercial Loans
			Watch Credits						Percent of Loan
Loan Category	All Loans		Performing		Non- performing		Total		Category in Watch Credit
	(Dollars in thousands)
Land	$	7,273	$	66	$	-	$	66		0.9	%
Land Development		4,161		-		4		4		0.1
Construction		42,081		-		-		-		0.0
Income Producing		281,427		3,802		579		4,381		1.6
Owner Occupied		264,496		6,064		99		6,163		2.3
Total Commercial Real Estate Loans	$	599,438	$	9,932		682	$	10,614		1.8
Other Commercial Loans	$	216,046	$	6,535		643	$	7,178		3.3
Total non-performing commercial loans					$	1,325

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