Independent Bank 8K Results of Operations and Financial Condition | IBCP 25 Oct 18

Exhibit 99.2

INDEPENDENT BANK CORPORATION AND SUBSIDIARIES

Supplemental Data

Non-performing assets ⁽¹⁾

	September 30,			June 30,			March 31,			December 31,			September 30,
	2018			2018			2018			2017			2017
	(Dollars in thousands)
Non-accrual loans	$	9,343		$	9,082		$	6,629		$	8,184		$	8,410
Loans 90 days or more past due and still accruing interest		-			-			-			-			-
Total non-performing loans		9,343			9,082			6,629			8,184			8,410
Other real estate and repossessed assets		1,445			1,689			1,647			1,643			2,150
Total non-performing assets	$	10,788		$	10,771		$	8,276		$	9,827		$	10,560

As a percent of Portfolio Loans
Non-performing loans		0.36	%		0.37	%		0.32	%		0.41	%		0.43	%
Allowance for loan losses		0.95			0.95			1.11			1.12			1.11
Non-performing assets to total assets		0.33			0.33			0.30			0.35			0.38
Allowance for loan losses as a percent of non-performing loans		261.17			258.80			348.03			275.99			255.39

⁽¹⁾ Excludes loans classified as "trouble debt restructured" that are not past due.

Troubled debt restructurings ("TDR")

	September 30, 2018
	Commercial		Retail			Total
	(In thousands)
Performing TDR's	$	6,904	$	49,397		$	56,301
Non-performing TDR's⁽¹⁾		212		2,799	⁽²⁾		3,011
Total	$	7,116	$	52,196		$	59,312

	December 31, 2017
	Commercial		Retail			Total
	(In thousands)
Performing TDR's	$	7,748	$	52,367		$	60,115
Non-performing TDR's⁽¹⁾		323		4,506	⁽²⁾		4,829
Total	$	8,071	$	56,873		$	64,944

⁽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.

Allowance for loan losses

	Nine months ended
	September 30,
	2018						2017
				Unfunded						Unfunded
	Loans			Commitments			Loans			Commitments
	(Dollars in thousands)
Balance at beginning of period	$	22,587		$	1,125		$	20,234		$	650
Additions (deductions)
Provision for loan losses		912			-			806			-
Recoveries credited to allowance		3,768			-			2,998			-
Loans charged against the allowance		(2,866	)		-			(2,560	)		-
Additions included in non-interest expense		-			(6	)		-			332
Balance at end of period	$	24,401		$	1,119		$	21,478		$	982

Net loans charged against the allowance to average Portfolio Loans		(0.04	)%					(0.03	)%

Capitalization

	September 30,			December 31,
	2018			2017
	(In thousands)
Subordinated debentures	$	39,371		$	35,569
Amount not qualifying as regulatory capital		(1,224	)		(1,069	)
Amount qualifying as regulatory capital		38,147			34,500
Shareholders’ equity
Common stock		389,689			324,986
Accumulated deficit		(34,596	)		(54,054	)
Accumulated other comprehensive loss		(9,889	)		(5,999	)
Total shareholders’ equity		345,204			264,933
Total capitalization	$	383,351		$	299,433

Non-Interest Income

	Three months ended						Nine months ended
	September 30,		June 30,		September 30,		September 30,
	2018		2018		2017		2018			2017
	(In thousands)
Service charges on deposit accounts	$	3,166	$	3,095	$	3,281	$	9,166		$	9,465
Interchange income		2,486		2,504		1,942		7,236			5,869
Net gains (losses) on assets
Mortgage loans		2,745		3,255		2,971		8,571			8,886
Securities		93		9		69		(71	)		62
Mortgage loan servicing, net		1,212		1,235		1		4,668			668
Investment and insurance commissions		513		483		606		1,434			1,541
Bank owned life insurance		237		220		283		713			776
Other		1,384		1,514		1,151		4,147			3,822
Total non-interest income	$	11,836	$	12,315	$	10,304	$	35,864		$	31,089

Capitalized Mortgage Loan Servicing Rights

	Three months ended						Nine months ended
	September 30,						September 30,
	2018			2017			2018		2017
	(In thousands)
Balance at beginning of period	$	21,848		$	14,515		$	15,699	$	13,671
Change in accounting		-			-			-		542
Balance at beginning of period, as adjusted		21,848			14,515			15,699		14,213
Servicing rights acquired		-			-			3,047		-
Originated servicing rights capitalized		1,501			1,250			3,711		3,047
Change in fair value		(198	)		(1,090	)		694		(2,585	)
Balance at end of period	$	23,151		$	14,675		$	23,151	$	14,675

Mortgage Loan Activity

	Three months ended									Nine months ended
	September 30,			June 30,			September 30,			September 30,
	2018			2018			2017			2018			2017
	(Dollars in thousands)
Mortgage loans originated	$	231,849		$	226,264		$	264,177		$	617,080		$	657,345
Mortgage loans sold		148,730			115,299			120,981			370,372			305,386
Net gains on mortgage loans		2,745			3,255			2,971			8,571			8,886
Net gains as a percent of mortgage loans sold ("Loan Sales Margin")		1.85	%		2.82	%		2.46	%		2.31	%		2.91	%
Fair value adjustments included in the Loan Sales Margin		(0.26	)		0.57			(0.22	)		0.10			0.08

Non-Interest Expense

	Three months ended								Nine months ended
	September 30,			June 30,			September 30,		September 30,
	2018			2018			2017		2018			2017
	(In thousands)
Compensation	$	9,582		$	9,574		$	8,494	$	28,086		$	26,872
Performance-based compensation		3,305			3,150			2,688		9,238			6,819
Payroll taxes and employee benefits		3,282			3,145			2,395		9,182			7,413
Compensation and employee benefits		16,169			15,869			13,577		46,506			41,104
Occupancy, net		2,233			2,170			1,970		6,667			6,032
Data processing		2,051			2,251			1,796		6,180			5,670
Merger related expenses		98			3,082			10		3,354			10
Furniture, fixtures and equipment		1,043			1,019			961		3,029			2,943
Communications		727			704			685		2,111			2,046
Interchange expense		715			661			294		1,974			869
Loan and collection		531			692			481		1,900			1,564
Advertising		594			543			526		1,578			1,551
Legal and professional fees		477			456			540		1,311			1,366
FDIC deposit insurance		270			250			208		750			608
Amortization of intangible assets		295			295			87		676			260
Supplies		173			178			176		516			507
Credit card and bank service fees		108			106			105		310			432
Provision for loss reimbursement on sold loans		47			20			15		78			66
Costs (recoveries) related to unfunded lending commitments		71			37			92		(6	)		332
Net (gains) losses on other real estate and repossessed assets		(325	)		(4	)		30		(619	)		132
Other		1,463			1,432			1,063		4,321			3,454
Total non-interest expense	$	26,740		$	29,761		$	22,616	$	80,636		$	68,946

Average Balances and Tax Equivalent Rates

	Three Months Ended
	September 30,
			2018							2017
	Average							Average
	Balance		Interest		Rate ⁽²⁾			Balance		Interest		Rate ⁽²⁾
	(Dollars in thousands)
Assets
Taxable loans	$	2,543,712	$	30,936		4.84	%	$	1,908,497	$	21,801		4.55	%
Tax-exempt loans ⁽¹⁾		6,590		81		4.88			3,138		47		5.94
Taxable securities		379,985		2,737		2.88			474,901		2,765		2.33
Tax-exempt securities⁽¹⁾		62,964		518		3.29			90,645		783		3.46
Interest bearing cash		27,477		66		0.95			29,336		63		0.85
Other investments		17,493		237		5.38			15,543		200		5.11
Interest Earning Assets		3,038,221		34,575		4.53			2,522,060		25,659		4.05
Cash and due from banks		35,874							33,019
Other assets, net		173,508							142,283
Total Assets	$	3,247,603						$	2,697,362

Liabilities
Savings and interest-bearing checking	$	1,241,868		1,223		0.39		$	1,048,289		408		0.15
Time deposits		664,098		2,753		1.64			531,226		1,425		1.06
Other borrowings		80,939		779		3.82			85,219		626		2.91
Interest Bearing Liabilities		1,986,905		4,755		0.95			1,664,734		2,459		0.59
Non-interest bearing deposits		884,003							736,291
Other liabilities		34,697							31,263
Shareholders’ equity		341,998							265,074
Total liabilities and shareholders’ equity	$	3,247,603						$	2,697,362

Net Interest Income			$	29,820						$	23,200

Net Interest Income as a Percent of Average Interest Earning Assets						3.91	%						3.66	%

__________

⁽¹⁾	Interest on tax-exempt loans and securities is presented on a fully tax equivalent basis assuming a marginal tax rate of 21% in 2018 and 35% in 2017.

⁽²⁾	Annualized

Average Balances and Tax Equivalent Rates

	Nine Months Ended
	September 30,
			2018							2017
	Average							Average
	Balance		Interest		Rate ⁽²⁾			Balance		Interest		Rate ⁽²⁾
	(Dollars in thousands)
Assets
Taxable loans	$	2,350,883	$	83,881		4.77	%	$	1,792,381	$	61,544		4.59	%
Tax-exempt loans ⁽¹⁾		5,221		185		4.74			3,410		145		5.69
Taxable securities		400,957		8,092		2.69			499,886		8,300		2.21
Tax-exempt securities⁽¹⁾		70,155		1,680		3.19			85,853		2,264		3.52
Interest bearing cash		29,502		214		0.97			42,610		229		0.72
Other investments		16,457		684		5.56			15,543		638		5.49
Interest Earning Assets		2,873,175		94,736		4.40			2,439,683		73,120		4.00
Cash and due from banks		33,204							32,492
Other assets, net		159,844							146,753
Total Assets	$	3,066,223						$	2,618,928

Liabilities
Savings and interest-bearing checking	$	1,193,388		2,785		0.31		$	1,051,395		1,007		0.13
Time deposits		611,103		6,687		1.46			494,219		3,747		1.01
Other borrowings		82,253		2,267		3.68			66,392		1,659		3.34
Interest Bearing Liabilities		1,886,744		11,739		0.83			1,612,006		6,413		0.53
Non-interest bearing deposits		833,283							717,589
Other liabilities		32,177							30,372
Shareholders’ equity		314,019							258,961
Total liabilities and shareholders’ equity	$	3,066,223						$	2,618,928

Net Interest Income			$	82,997						$	66,707

Net Interest Income as a Percent of Average Interest Earning Assets						3.86	%						3.65	%

__________

⁽¹⁾	Interest on tax-exempt loans and securities is presented on a fully tax equivalent basis assuming a marginal tax rate of 21% in 2018 and 35% in 2017.

⁽²⁾	Annualized

Commercial Loan Portfolio Analysis as of September 30, 2018

	Total Commercial Loans
			Watch Credits						Percent of Loan
Loan Category	All Loans		Performing		Non-performing		Total		Category in Watch Credit
	(Dollars in thousands)
Land	$	12,439	$	67	$	-	$	67		0.5	%
Land Development		13,249		-		-		-		0.0
Construction		38,549		6,690		2,403		9,093		23.6
Income Producing		377,906		3,257		-		3,257		0.9
Owner Occupied		349,271		19,315		72		19,387		5.6
Total Commercial Real Estate Loans	$	791,414	$	29,329		2,475	$	31,804		4.0

Other Commercial Loans	$	320,687	$	18,142		307	$	18,449		5.8
Total non-performing commercial loans					$	2,782

Commercial Loan Portfolio Analysis as of December 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	$	8,559	$	60	$	9	$	69		0.8	%
Land Development		9,685		-		-		-		0.0
Construction		51,733		-		-		-		0.0
Income Producing		289,799		1,590		30		1,620		0.6
Owner Occupied		258,888		11,491		170		11,661		4.5
Total Commercial Real Estate Loans	$	618,664	$	13,141		209	$	13,350		2.2

Other Commercial Loans	$	234,596	$	19,109		437	$	19,546		8.3
Total non-performing commercial loans					$	646

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