Independent Bank 8K Results of Operations and Financial Condition | IBCP 29 Jan 19

Exhibit 99.2

INDEPENDENT BANK CORPORATION AND SUBSIDIARIES

Supplemental Data

Non-performing assets ⁽¹⁾

	December 31, 2018			September 30, 2018			June 30, 2018			March 31, 2018			December 31, 2017
	(Dollars in thousands)
Non-accrual loans	$	9,029		$	9,343		$	9,082		$	6,629		$	8,184
Loans 90 days or more past due and still accruing interest		5			-			-			-			-
Total non-performing loans		9,034			9,343			9,082			6,629			8,184
Other real estate and repossessed assets		1,299			1,445			1,689			1,647			1,643
Total non-performing assets	$	10,333		$	10,788		$	10,771		$	8,276		$	9,827

As a percent of Portfolio Loans
Non-performing loans		0.35	%		0.36	%		0.37	%		0.32	%		0.41	%
Allowance for loan losses		0.96			0.95			0.95			1.11			1.12
Non-performing assets to total assets		0.31			0.33			0.33			0.30			0.35
Allowance for loan losses as a percent of non-performing loans		275.49			261.17			258.80			348.03			275.99

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

Troubled debt restructurings ("TDR")

	December 31, 2018
	Commercial		Retail			Total
	(In thousands)
Performing TDR's	$	6,460	$	46,627		$	53,087
Non-performing TDR's(1)		74		2,884	⁽²⁾		2,958
Total	$	6,534	$	49,511		$	56,045

	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

	Twelve months ended December 31,
	2018					2017
	Loans			Unfunded Commitments		Loans			Unfunded Commitments
	(Dollars in thousands)
Balance at beginning of period	$	22,587		$	1,125	$	20,234		$	650
Additions (deductions)
Provision for loan losses		1,503			-		1,199			-
Recoveries credited to allowance		4,622			-		4,205			-
Loans charged against the allowance		(3,824	)		-		(3,051	)		-
Additions included in non-interest expense		-			171		-			475
Balance at end of period	$	24,888		$	1,296	$	22,587		$	1,125

Net loans charged against the allowance to average Portfolio Loans		(0.03	)%				(0.06	)%

Capitalization

	December 31,
	2018			2017
	(In thousands)
Subordinated debentures	$	39,388		$	35,569
Amount not qualifying as regulatory capital		(1,224	)		(1,069	)
Amount qualifying as regulatory capital		38,164			34,500
Shareholders’ equity
Common stock		377,372			324,986
Accumulated deficit		(28,270	)		(54,054	)
Accumulated other comprehensive loss		(10,108	)		(5,999	)
Total shareholders’ equity		338,994			264,933
Total capitalization	$	377,158		$	299,433

Non-Interest Income

	Three months ended							Twelve months ended
	December 31,			September 30,		December 31,		December 31,
	2018			2018		2017		2018		2017
	(In thousands)
Service charges on deposit accounts	$	3,092		$	3,166	$	3,208	$	12,258	$	12,673
Interchange income		2,669			2,486		2,154		9,905		8,023
Net gains on assets
Mortgage loans		2,026			2,745		2,876		10,597		11,762
Securities		209			93		198		138		260
Mortgage loan servicing, net		(1,511	)		1,212		979		3,157		1,647
Investment and insurance commissions		537			513		427		1,971		1,968
Bank owned life insurance		257			237		285		970		1,061
Other		1,672			1,384		1,317		5,819		5,139
Total non-interest income	$	8,951		$	11,836	$	11,444	$	44,815	$	42,533

Capitalized Mortgage Loan Servicing Rights

	Three months ended December 31,						Twelve months ended December 31,
	2018			2017			2018			2017
	(In thousands)
Balance at beginning of period	$	23,151		$	14,675		$	15,699		$	13,671
Change in accounting		-			-			-			542
Balance at beginning of period, as adjusted		23,151			14,675			15,699			14,213
Servicing rights acquired		-			-			3,047			-
Originated servicing rights capitalized		1,266			1,183			4,977			4,230
Change in fair value		(3,017	)		(159	)		(2,323	)		(2,744	)
Balance at end of period	$	21,400		$	15,699		$	21,400		$	15,699

Mortgage Loan Activity

	Three months ended									Twelve months ended
	December 31,			September 30,			December 31,			December 31,
	2018			2018			2017			2018			2017
	(Dollars in thousands)
Mortgage loans originated	$	190,328		$	231,849		$	213,877		$	807,408		$	871,222
Mortgage loans sold		121,426			148,730			117,941			491,798			423,327
Net gains on mortgage loans		2,026			2,745			2,876			10,597			11,762
Net gains as a percent of mortgage loans sold ("Loan Sales Margin")		1.67	%		1.85	%		2.44	%		2.15	%		2.78	%
Fair value adjustments included in the Loan Sales Margin		(0.39	)		(0.26	)		(0.45	)		(0.02	)		(0.07	)

Non-Interest Expense

	Three months ended									Twelve months ended
	December 31,			September 30,			December 31,			December 31,
	2018			2018			2017			2018			2017
	(In thousands)
Compensation	$	9,792		$	9,582		$	8,525		$	37,878		$	35,397
Performance-based compensation		2,704			3,305			3,055			11,942			9,874
Payroll taxes and employee benefits		3,076			3,282			2,405			12,258			9,818
Compensation and employee benefits		15,572			16,169			13,985			62,078			55,089
Occupancy, net		2,245			2,233			2,070			8,912			8,102
Data processing		2,082			2,051			1,987			8,262			7,657
Furniture, fixtures and equipment		1,051			1,043			927			4,080			3,870
Merger related expenses		111			98			274			3,465			284
Communications		737			727			638			2,848			2,684
Interchange expense		728			715			287			2,702			1,156
Loan and collection		782			531			666			2,682			2,230
Advertising		577			594			354			2,155			1,905
Legal and professional fees		528			477			526			1,839			1,892
FDIC deposit insurance		331			270			286			1,081			894
Amortization of intangible assets		293			295			86			969			346
Supplies		173			173			159			689			666
Credit card and bank service fees		104			108			97			414			529
Costs related to unfunded lending commitments		177			71			143			171			475
Provision for loss reimbursement on sold loans		(68	)		47			105			10			171
Net gains on other real estate and repossessed assets		(53	)		(325	)		(738	)		(672	)		(606	)
Other		1,455			1,463			1,284			5,776			4,738
Total non-interest expense	$	26,825		$	26,740		$	23,136		$	107,461		$	92,082

Average Balances and Tax Equivalent Rates

	Three Months Ended December 31,
	2018							2017
	Average Balance		Interest		Rate ⁽²⁾			Average Balance		Interest		Rate ⁽²⁾
	(Dollars in thousands)
Assets
Taxable loans	$	2,618,834	$	32,753		4.98	%	$	2,003,636	$	22,625		4.49	%
Tax-exempt loans ⁽¹⁾		8,780		107		4.83			2,571		27		4.17
Taxable securities		373,988		2,782		2.98			442,188		2,628		2.38
Tax-exempt securities⁽¹⁾		59,915		512		3.42			90,014		799		3.55
Interest bearing cash		41,766		157		1.49			20,827		35		0.67
Other investments		18,357		236		5.10			15,543		198		5.05
Interest Earning Assets		3,121,640		36,547		4.66			2,574,779		26,312		4.07
Cash and due from banks		33,915							30,459
Other assets, net		171,447							137,523
Total Assets	$	3,327,002						$	2,742,761

Liabilities
Savings and interest- bearing checking	$	1,291,994		1,361		0.42		$	1,054,651		523		0.20
Time deposits		695,316		3,645		2.08			526,217		1,498		1.13
Other borrowings		71,410		746		4.14			100,049		689		2.73
Interest Bearing Liabilities		2,058,720		5,752		1.11			1,680,917		2,710		0.64
Non-interest bearing deposits		886,579							759,725
Other liabilities		36,924							32,020
Shareholders’ equity		344,779							270,099
Total liabilities and shareholders’ equity	$	3,327,002						$	2,742,761

Net Interest Income			$	30,795						$	23,602

Net Interest Income as a Percent of Average Interest Earning Assets						3.93	%						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

Average Balances and Tax Equivalent Rates

	Twelve Months Ended December 31,
	2018							2017
	Average Balance		Interest		Rate			Average Balance		Interest		Rate
	(Dollars in thousands)
Assets
Taxable loans	$	2,418,421	$	116,634		4.82	%	$	1,845,661	$	84,169		4.56	%
Tax-exempt loans ⁽¹⁾		6,118		292		4.77			3,199		172		5.38
Taxable securities		394,160		10,874		2.76			485,343		10,928		2.25
Tax-exempt securities⁽¹⁾		67,574		2,192		3.24			86,902		3,063		3.52
Interest bearing cash		32,593		371		1.14			37,119		264		0.71
Other investments		16,936		920		5.43			15,543		836		5.38
Interest Earning Assets		2,935,802		131,283		4.48			2,473,767		99,432		4.02
Cash and due from banks		33,384							31,980
Other assets, net		162,750							144,442
Total Assets	$	3,131,936						$	2,650,189

Liabilities
Savings and interest-bearing checking	$	1,218,243		4,146		0.34		$	1,052,215		1,530		0.15
Time deposits		632,330		10,332		1.63			502,284		5,245		1.04
Other borrowings		79,519		3,013		3.79			74,876		2,348		3.14
Interest Bearing Liabilities		1,930,092		17,491		0.91			1,629,375		9,123		0.56
Non-interest bearing deposits		846,718							728,208
Other liabilities		33,354							30,838
Shareholders’ equity		321,772							261,768
Total liabilities and shareholders’ equity	$	3,131,936						$	2,650,189

Net Interest Income			$	113,792						$	90,309

Net Interest Income as a Percent of Average Interest Earning Assets						3.88	%						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.

Commercial Loan Portfolio Analysis as of December 31, 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	$	12,308	$	63	$	-	$	63			0.5	%
Land Development		12,155		338		-		338			2.8
Construction		59,856		7,901		-		7,901			13.2
Income Producing		388,311		12,430		-		12,430			3.2
Owner Occupied		353,572		23,041		846		23,887			6.8
Total Commercial Real Estate Loans	$	826,202	$	43,773		846	$	44,619			5.4
									��
Other Commercial Loans	$	318,279	$	16,695		1,374	$	18,069			5.7
Total non-performing commercial loans					$	2,220

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