Exhibit 99.2
INDEPENDENT BANK CORPORATION AND SUBSIDIARIES
Supplemental Data
Non-performing assets (1) | ||||||||||||||||||||
December 31, 2019 | September 30, 2019 | June 30, 2019 | March 31, 2019 | December 31, 2018 | ||||||||||||||||
(Dollars in thousands) | ||||||||||||||||||||
Non-accrual loans | $ | 10,178 | $ | 7,124 | $ | 7,798 | $ | 8,849 | $ | 9,029 | ||||||||||
Loans 90 days or more past due and still accruing interest | - | - | - | - | 5 | |||||||||||||||
Total non-accrual loans | 10,178 | 7,124 | 7,798 | 8,849 | 9,034 | |||||||||||||||
Less: Government guaranteed loans | 646 | 475 | 436 | 617 | 460 | |||||||||||||||
Total non-performing loans | 9,532 | 6,649 | 7,362 | 8,232 | 8,574 | |||||||||||||||
Other real estate and repossessed assets | 1,865 | 1,789 | 1,990 | 1,338 | 1,299 | |||||||||||||||
Total non-performing assets | $ | 11,397 | $ | 8,438 | $ | 9,352 | $ | 9,570 | $ | 9,873 | ||||||||||
As a percent of Portfolio Loans | ||||||||||||||||||||
Non-performing loans | 0.35 | % | 0.24 | % | 0.27 | % | 0.31 | % | 0.33 | % | ||||||||||
Allowance for loan losses | 0.96 | 0.96 | 0.96 | 0.96 | 0.96 | |||||||||||||||
Non-performing assets to total assets | 0.32 | 0.24 | 0.27 | 0.28 | 0.29 | |||||||||||||||
Allowance for loan losses as a percent of non-performing loans | 274.32 | 393.26 | 351.85 | 306.78 | 290.27 |
(1) | Excludes loans classified as “trouble debt restructured” that are not past due. |
Troubled debt restructurings (“TDR”) | ||||||||||||
December 31, 2019 | ||||||||||||
Commercial | Retail (1) | Total | ||||||||||
(In thousands) | ||||||||||||
Performing TDR’s | $ | 7,974 | $ | 39,601 | $ | 47,575 | ||||||
Non-performing TDR’s (2) | 540 | 2,607 | (3) | 3,147 | ||||||||
Total | $ | 8,514 | $ | 42,208 | $ | 50,722 |
December 31, 2018 | ||||||||||||
Commercial | Retail (1) | Total | ||||||||||
(In thousands) | ||||||||||||
Performing TDR’s | $ | 6,460 | $ | 46,627 | $ | 53,087 | ||||||
Non-performing TDR’s (2) | 74 | 2,884 | (3) | 2,958 | ||||||||
Total | $ | 6,534 | $ | 49,511 | $ | 56,045 |
(1) | Retail loans include mortgage and installment loan segments. |
(2) | Included in non-performing assets table above. |
(3) | Also includes loans on non-accrual at the time of modification until six payments are received on a timely basis. |
1
Allowance for loan losses | ||||||||||||||||
Twelve months ended December 31, | ||||||||||||||||
2019 | 2018 | |||||||||||||||
Loans | Unfunded Commitments | Loans | Unfunded Commitments | |||||||||||||
(Dollars in thousands) | ||||||||||||||||
Balance at beginning of period | $ | 24,888 | $ | 1,296 | $ | 22,587 | $ | 1,125 | ||||||||
Additions (deductions) | ||||||||||||||||
Provision for loan losses | 824 | - | 1,503 | - | ||||||||||||
Recoveries credited to allowance | 3,961 | - | 4,622 | - | ||||||||||||
Loans charged against the allowance | (3,525 | ) | - | (3,824 | ) | - | ||||||||||
Additions included in non-interest expense | - | 246 | - | 171 | ||||||||||||
Balance at end of period | $ | 26,148 | $ | 1,542 | $ | 24,888 | $ | 1,296 | ||||||||
Net loans charged against the allowance to average Portfolio Loans | (0.02 | )% | (0.03 | )% |
Capitalization | ||||||||
December 31, | ||||||||
2019 | 2018 | |||||||
(In thousands) | ||||||||
Subordinated debentures | $ | 39,456 | $ | 39,388 | ||||
Amount not qualifying as regulatory capital | (1,224 | ) | (1,224 | ) | ||||
Amount qualifying as regulatory capital | 38,232 | 38,164 | ||||||
Shareholders’ equity | ||||||||
Common stock | 352,344 | 377,372 | ||||||
Accumulated deficit | 1,611 | (28,270 | ) | |||||
Accumulated other comprehensive loss | (3,786 | ) | (10,108 | ) | ||||
Total shareholders’ equity | 350,169 | 338,994 | ||||||
Total capitalization | $ | 388,401 | $ | 377,158 |
2
Non-Interest Income | ||||||||||||||||||||
Three months ended | Twelve months ended | |||||||||||||||||||
December 31, | September 30, | December 31, | December 31, | |||||||||||||||||
2019 | 2019 | 2018 | 2019 | 2018 | ||||||||||||||||
(In thousands) | ||||||||||||||||||||
Service charges on deposit accounts | $ | 2,885 | $ | 2,883 | $ | 3,092 | $ | 11,208 | $ | 12,258 | ||||||||||
Interchange income | 2,553 | 2,785 | 2,669 | 10,297 | 9,905 | |||||||||||||||
Net gains on assets | ||||||||||||||||||||
Mortgage loans | 6,388 | 5,677 | 2,026 | 19,978 | 10,597 | |||||||||||||||
Securities | 3 | - | 209 | 307 | 138 | |||||||||||||||
Mortgage loan servicing, net | 1,348 | (1,562 | ) | (1,511 | ) | (3,336 | ) | 3,157 | ||||||||||||
Investment and insurance commissions | 461 | 450 | 537 | 1,658 | 1,971 | |||||||||||||||
Bank owned life insurance | 298 | 301 | 257 | 1,111 | 970 | |||||||||||||||
Other | 1,661 | 1,741 | 1,672 | 6,513 | 5,819 | |||||||||||||||
Total non-interest income | $ | 15,597 | $ | 12,275 | $ | 8,951 | $ | 47,736 | $ | 44,815 |
Capitalized Mortgage Loan Servicing Rights | ||||||||||||||||
Three months ended December 31, | Twelve months ended December 31, | |||||||||||||||
2019 | 2018 | 2019 | 2018 | |||||||||||||
(In thousands) | ||||||||||||||||
Balance at beginning of period | $ | 16,906 | $ | 23,151 | $ | 21,400 | $ | 15,699 | ||||||||
Servicing rights acquired | - | - | - | 3,047 | ||||||||||||
Originated servicing rights capitalized | 2,539 | 1,266 | 7,303 | 4,977 | ||||||||||||
Change in fair value | (274 | ) | (3,017 | ) | (9,532 | ) | (2,323 | ) | ||||||||
Balance at end of period | $ | 19,171 | $ | 21,400 | $ | 19,171 | $ | 21,400 |
3
Three months ended | Twelve months ended | |||||||||||||||||||
December 31, | September 30, | December 31, | December 31, | |||||||||||||||||
2019 | 2019 | 2018 | 2019 | 2018 | ||||||||||||||||
(Dollars in thousands) | ||||||||||||||||||||
Mortgage loans originated | $ | 302,520 | $ | 329,461 | $ | 190,328 | $ | 1,011,141 | $ | 807,408 | ||||||||||
Mortgage loans sold | 248,691 | 204,058 | 121,426 | 738,910 | 491,798 | |||||||||||||||
Net gains on mortgage loans | 6,388 | 5,677 | 2,026 | 19,978 | 10,597 | |||||||||||||||
Net gains as a percent of mortgage loans sold (“Loan Sales Margin”) | 2.57 | % | 2.78 | % | 1.67 | % | 2.70 | % | 2.15 | % | ||||||||||
Fair value adjustments included in the Loan Sales Margin | (0.38 | ) | 0.22 | (0.39 | ) | 0.22 | (0.02 | ) |
Non-Interest Expense | ||||||||||||||||||||
Three months ended | Twelve months ended | |||||||||||||||||||
December 31, | September 30, | December 31, | December 31, | |||||||||||||||||
2019 | 2019 | 2018 | 2019 | 2018 | ||||||||||||||||
(In thousands) | ||||||||||||||||||||
Compensation | $ | 10,726 | $ | 10,327 | $ | 9,792 | $ | 41,719 | $ | 37,878 | ||||||||||
Performance-based compensation | 4,336 | 3,214 | 2,704 | 12,066 | 11,942 | |||||||||||||||
Payroll taxes and employee benefits | 3,484 | 3,132 | 3,076 | 13,716 | 12,258 | |||||||||||||||
Compensation and employee benefits | 18,546 | 16,673 | 15,572 | 67,501 | 62,078 | |||||||||||||||
Occupancy, net | 2,216 | 2,161 | 2,245 | 9,013 | 8,912 | |||||||||||||||
Data processing | 2,308 | 2,282 | 2,082 | 8,905 | 8,262 | |||||||||||||||
Furniture, fixtures and equipment | 1,055 | 1,023 | 1,051 | 4,113 | 4,080 | |||||||||||||||
Interchange expense | 883 | 891 | 728 | 3,215 | 2,702 | |||||||||||||||
Communications | 728 | 733 | 737 | 2,947 | 2,848 | |||||||||||||||
Loan and collection | 709 | 714 | 782 | 2,685 | 2,682 | |||||||||||||||
Advertising | 515 | 636 | 577 | 2,450 | 2,155 | |||||||||||||||
Legal and professional fees | 533 | 541 | 528 | 1,814 | 1,839 | |||||||||||||||
Amortization of intangible assets | 272 | 272 | 293 | 1,089 | 969 | |||||||||||||||
FDIC deposit insurance | (38 | ) | 13 | 331 | 685 | 1,081 | ||||||||||||||
Supplies | 164 | 163 | 173 | 638 | 689 | |||||||||||||||
Credit card and bank service fees | 111 | 100 | 104 | 411 | 414 | |||||||||||||||
Costs (recoveries) related to unfunded lending commitments | (95 | ) | 154 | 177 | 246 | 171 | ||||||||||||||
Provision for loss reimbursement on sold loans | 50 | 33 | (68 | ) | 229 | 10 | ||||||||||||||
Net (gains) losses on other real estate and repossessed assets | (63 | ) | 52 | (53 | ) | (90 | ) | (672 | ) | |||||||||||
Merger related expenses | - | - | 111 | - | 3,465 | |||||||||||||||
Other | 1,409 | 1,407 | 1,455 | 5,882 | 5,776 | |||||||||||||||
Total non-interest expense | $ | 29,303 | $ | 27,848 | $ | 26,825 | $ | 111,733 | $ | 107,461 |
4
Three Months Ended December 31, | ||||||||||||||||||||||||
2019 | 2018 | |||||||||||||||||||||||
Average Balance | Interest | Rate (2) | Average Balance | Interest | Rate (2) | |||||||||||||||||||
(Dollars in thousands) | ||||||||||||||||||||||||
Assets | ||||||||||||||||||||||||
Taxable loans | $ | 2,767,857 | $ | 33,061 | 4.75 | % | $ | 2,618,834 | $ | 32,753 | 4.98 | % | ||||||||||||
Tax-exempt loans (1) | 8,180 | 100 | 4.85 | 8,780 | 107 | 4.83 | ||||||||||||||||||
Taxable securities | 437,087 | 3,031 | 2.77 | 373,988 | 2,782 | 2.98 | ||||||||||||||||||
Tax-exempt securities (1) | 50,929 | 408 | 3.20 | 59,915 | 512 | 3.42 | ||||||||||||||||||
Interest bearing cash | 38,416 | 163 | 1.68 | 41,766 | 157 | 1.49 | ||||||||||||||||||
Other investments | 18,359 | 249 | 5.38 | 18,357 | 236 | 5.10 | ||||||||||||||||||
Interest Earning Assets | 3,320,828 | 37,012 | 4.44 | 3,121,640 | 36,547 | 4.66 | ||||||||||||||||||
Cash and due from banks | 48,095 | 33,915 | ||||||||||||||||||||||
Other assets, net | 160,821 | 171,447 | ||||||||||||||||||||||
Total Assets | $ | 3,529,744 | $ | 3,327,002 | ||||||||||||||||||||
Liabilities | ||||||||||||||||||||||||
Savings and interest- bearing checking | $ | 1,547,860 | 2,441 | 0.63 | $ | 1,291,994 | 1,812 | 0.56 | ||||||||||||||||
Time deposits | 611,914 | 3,046 | 1.97 | 695,316 | 3,194 | 1.82 | ||||||||||||||||||
Other borrowings | 92,154 | 711 | 3.06 | 71,410 | 746 | 4.14 | ||||||||||||||||||
Interest Bearing Liabilities | 2,251,928 | 6,198 | 1.09 | 2,058,720 | 5,752 | 1.11 | ||||||||||||||||||
Non-interest bearing deposits | 880,325 | 886,579 | ||||||||||||||||||||||
Other liabilities | 51,581 | 36,924 | ||||||||||||||||||||||
Shareholders’ equity | 345,910 | 344,779 | ||||||||||||||||||||||
Total liabilities and shareholders’ equity | $ | 3,529,744 | $ | 3,327,002 | ||||||||||||||||||||
Net Interest Income | $ | 30,814 | $ | 30,795 | ||||||||||||||||||||
Net Interest Income as a Percent of Average Interest Earning Assets | 3.70 | % | 3.93 | % |
(1) | Interest on tax-exempt loans and securities is presented on a fully tax equivalent basis assuming a marginal tax rate of 21%. |
(2) | Annualized |
5
Average Balances and Tax Equivalent Rates | ||||||||||||||||||||||||
Twelve Months Ended December 31, | ||||||||||||||||||||||||
2019 | 2018 | |||||||||||||||||||||||
Average Balance | Interest | Rate | Average Balance | Interest | Rate | |||||||||||||||||||
(Dollars in thousands) | ||||||||||||||||||||||||
Assets | ||||||||||||||||||||||||
Taxable loans | $ | 2,713,690 | $ | 133,574 | 4.92 | % | $ | 2,418,421 | $ | 116,634 | 4.82 | % | ||||||||||||
Tax-exempt loans (1) | 7,937 | 391 | 4.93 | 6,118 | 292 | 4.77 | ||||||||||||||||||
Taxable securities | 397,598 | 11,842 | 2.98 | 394,160 | 10,874 | 2.76 | ||||||||||||||||||
Tax-exempt securities (1) | 52,324 | 1,683 | 3.22 | 67,574 | 2,192 | 3.24 | ||||||||||||||||||
Interest bearing cash | 48,023 | 818 | 1.70 | 32,593 | 371 | 1.14 | ||||||||||||||||||
Other investments | 18,359 | 1,043 | 5.68 | 16,936 | 920 | 5.43 | ||||||||||||||||||
Interest Earning Assets | 3,237,931 | 149,351 | 4.61 | 2,935,802 | 131,283 | 4.48 | ||||||||||||||||||
Cash and due from banks | 37,575 | 33,384 | ||||||||||||||||||||||
Other assets, net | 164,726 | 162,750 | ||||||||||||||||||||||
Total Assets | $ | 3,440,232 | $ | 3,131,936 | ||||||||||||||||||||
Liabilities | ||||||||||||||||||||||||
Savings and interest- bearing checking | $ | 1,453,061 | 10,228 | 0.70 | $ | 1,218,243 | 4,696 | 0.39 | ||||||||||||||||
Time deposits | 655,718 | 13,197 | 2.01 | 632,330 | 9,782 | 1.55 | ||||||||||||||||||
Other borrowings | 77,254 | 2,922 | 3.78 | 79,519 | 3,013 | 3.79 | ||||||||||||||||||
Interest Bearing Liabilities | 2,186,033 | 26,347 | 1.21 | 1,930,092 | 17,491 | 0.91 | ||||||||||||||||||
Non-interest bearing deposits | 867,314 | 846,718 | ||||||||||||||||||||||
Other liabilities | 46,153 | 33,354 | ||||||||||||||||||||||
Shareholders’ equity | 340,732 | 321,772 | ||||||||||||||||||||||
Total liabilities and shareholders’ equity | $ | 3,440,232 | $ | 3,131,936 | ||||||||||||||||||||
Net Interest Income | $ | 123,004 | $ | 113,792 | ||||||||||||||||||||
Net Interest Income as a Percent of Average Interest Earning Assets | 3.80 | % | 3.88 | % |
(1) | Interest on tax-exempt loans and securities is presented on a fully tax equivalent basis assuming a marginal tax rate of 21%. |
6
Commercial Loan Portfolio Analysis as of December 31, 2019 | ||||||||||||||||||||
Total Commercial Loans | ||||||||||||||||||||
Watch Credits | Percent of Loan | |||||||||||||||||||
Loan Category | All Loans | Performing | Non-accrual | Total | Category in Watch Credit | |||||||||||||||
(Dollars in thousands) | ||||||||||||||||||||
Land | $ | 11,235 | $ | 275 | $ | 735 | $ | 1,010 | 9.0 | % | ||||||||||
Land Development | 12,899 | - | - | - | 0.0 | |||||||||||||||
Construction | 97,463 | - | - | - | 0.0 | |||||||||||||||
Income Producing | 409,897 | 15,347 | - | 15,347 | 3.7 | |||||||||||||||
Owner Occupied | 323,694 | 35,485 | 295 | 35,780 | 11.1 | |||||||||||||||
Total Commercial Real Estate Loans | $ | 855,188 | $ | 51,107 | 1,030 | $ | 52,137 | 6.1 | ||||||||||||
Other Commercial Loans | $ | 311,507 | $ | 20,580 | 347 | $ | 20,927 | 6.7 | ||||||||||||
Total non-performing commercial loans | $ | 1,377 |
Commercial Loan Portfolio Analysis as of December 31, 2018 | ||||||||||||||||||||
Total Commercial Loans | ||||||||||||||||||||
Watch Credits | Percent of Loan | |||||||||||||||||||
Loan Category | All Loans | Performing | Non-accrual | 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 |
7