Independent Bank 8K Results of Operations and Financial Condition | IBCP 27 Oct 20

Exhibit 99.2

INDEPENDENT BANK CORPORATION AND SUBSIDIARIES

Supplemental Data

Non-performing assets ⁽¹⁾
	September 30, 2020			June 30, 2020			March 31, 2019			December 31, 2019			September 30, 2019
	(Dollars in thousands)
Non-accrual loans	$	10,481		$	12,938		$	17,454		$	10,178		$	7,124
Loans 90 days or more past due and still accruing interest		266			5			-			-			-
Subtotal		10,747			12,943			17,454			10,178			7,124
Less: Government guaranteed loans		510			604			676			646			475
Total non-performing loans		10,237			12,339			16,778			9,532			6,649
Other real estate and repossessed assets		1,487			1,569			1,494			1,865			1,789
Total non-performing assets	$	11,724		$	13,908		$	18,272		$	11,397		$	8,438

As a percent of Portfolio Loans
Non-performing loans		0.36	%		0.43	%		0.62	%		0.35	%		0.24	%
Allowance for loan losses		1.25			1.20			1.20			0.96			0.96
Non-performing assets to total assets		0.28			0.34			0.50			0.32			0.24
Allowance for loan losses as a percent of non-performing loans		349.43			279.60			193.68			274.32			393.26

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

Troubled debt restructurings ("TDR")

	September 30, 2020
	Commercial		Retail ⁽¹⁾			Total
	(In thousands)
Performing TDR's	$	8,292	$	37,337		$	45,629
Non-performing TDR's ⁽²⁾		1,203		1,850	⁽³⁾		3,053
Total	$	9,495	$	39,187		$	48,682

	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

(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.

Allowance for loan losses

	Nine months ended September 30,
	2020					2019
	Loans			Unfunded Commitments		Loans			Unfunded Commitments
	(Dollars in thousands)
Balance at beginning of period	$	26,148		$	1,542	$	24,888		$	1,296
Additions (deductions)
Provision for loan losses		12,884			-		1,045			-
Recoveries credited to allowance		2,404			-		3,109			-
Loans charged against the allowance		(5,665	)		-		(2,894	)		-
Additions included in non-interest expense		-			271		-			341
Balance at end of period	$	35,771		$	1,813	$	26,148		$	1,637

Net loans charged against the allowance to average Portfolio Loans		0.16	%				(0.01	)%

Capitalization

	September 30, 2020			December 31, 2019
	(In thousands)
Subordinated debt	$	39,261		$	-
Subordinated debentures		39,507			39,456
Amount not qualifying as regulatory capital		(485	)		(1,224	)
Amount qualifying as regulatory capital		78,283			38,232
Shareholders’ equity
Common stock		339,408			352,344
Retained earnings		27,538			1,611
Accumulated other comprehensive income (loss)		6,146			(3,786	)
Total shareholders’ equity		373,092			350,169
Total capitalization	$	451,375		$	388,401

Non-Interest Income

	Three months ended									Nine months ended
	September 30,			June 30,			September 30,			September 30,
	2020			2020			2019			2020			2019
	(In thousands)
Service charges on deposit accounts	$	2,085		$	1,623		$	2,883		$	6,299		$	8,323
Interchange income		3,428			2,526			2,785		$	8,411		$	7,744
Net gains on assets
Mortgage loans		20,205			17,642			5,677			46,687			13,590
Securities		-			-			0			253			304
Mortgage loan servicing, net		(644	)		(3,022	)		(1,562	)		(8,966	)		(4,684	)
Investment and insurance commissions		530			435			450			1,478			1,197
Bank owned life insurance		215			265			301			750			813
Other		1,192			898			1,741			3,470			4,852
Total non-interest income	$	27,011		$	20,367		$	12,275		$	58,382		$	32,139

Capitalized Mortgage Loan Servicing Rights

	Three months ended September 30,						Nine months ended September 30,
	2020			2019			2020			2019
	(In thousands)
Balance at beginning of period	$	13,773		$	17,894		$	19,171		$	21,400
Originated servicing rights capitalized		4,017			2,157			10,260			4,764
Change in fair value		(2,387	)		(3,145	)		(14,028	)		(9,258	)
Balance at end of period	$	15,403		$	16,906		$	15,403		$	16,906

Mortgage Loan Activity

	Three months ended									Nine months ended
	September 30,			June 30,			September 30,			September 30,
	2020			2020			2019			2020			2019
	(Dollars in thousands)
Mortgage loans originated	$	536,502		$	470,626		$	329,461		$	1,318,206		$	708,621
Mortgage loans sold		417,092			379,048			204,058			1,058,400			490,219
Net gains on mortgage loans		20,205			17,642			5,677			46,687			13,590
Net gains as a percent of mortgage loans sold ("Loan Sales Margin")		4.84	%		4.65	%		2.78	%		4.41	%		2.77	%
Fair value adjustments included in the Loan Sales Margin		0.50			1.14			0.22			0.81			0.48

Non-Interest Expense

	Three months ended							Nine months ended
	September 30,		June 30,			September 30,		September 30,
	2020		2020			2019		2020		2019
	(In thousands)
Compensation	$	10,294	$	9,668		$	10,327	$	30,665	$	30,993
Performance-based compensation		8,310		3,809			3,214		14,240		7,730
Payroll taxes and employee benefits		3,350		2,802			3,132		9,837		10,232
Compensation and employee benefits		21,954		16,279			16,673		54,742		48,955
Occupancy, net		2,199		2,159			2,161		6,818		6,797
Data processing		2,215		1,590			2,282		6,160		6,597
Furniture, fixtures and equipment		999		1,090			1,023		3,125		3,058
Interchange expense		831		726			891		2,416		2,332
Communications		806		800			733		2,409		2,219
Loan and collection		768		756			714		2,329		1,976
Advertising		589		364			636		1,636		1,935
Legal and professional fees		566		468			541		1,427		1,281
FDIC deposit insurance		411		430			13		1,211		723
Conversion related expenses		643		346			-		1,045		-
Amortization of intangible assets		255		255			272		765		817
Supplies		126		203			163		513		474
Branch closure costs		-		417			-		417		-
Correspondent bank service fees		101		94			100		294		300
Costs related to unfunded lending commitments		41		111			154		271		341
Provision for loss reimbursement on sold loans		46		77			33		160		179
Net (gains) losses on other real estate and repossessed assets		46		(9	)		52		146		(27	)
Other		1,045		1,190			1,407		3,822		4,473
Total non-interest expense	$	33,641	$	27,346		$	27,848	$	89,706	$	82,430

Average Balances and Tax Equivalent Rates

	Three Months Ended September 30,
	2020							2019
	Average Balance		Interest		Rate ⁽²⁾			Average Balance		Interest		Rate ⁽²⁾
	(Dollars in thousands)
Assets
Taxable loans	$	2,918,946	$	30,323		4.14	%	$	2,779,132	$	34,151		4.89	%
Tax-exempt loans ⁽¹⁾		6,926		88		5.05			7,412		94		5.03
Taxable securities		733,977		3,450		1.88			371,157		2,771		2.99
Tax-exempt securities⁽¹⁾		157,998		1,194		3.02			52,098		400		3.07
Interest bearing cash		51,181		14		0.11			56,923		229		1.60
Other investments		18,427		223		4.81			18,359		266		5.75
Interest Earning Assets		3,887,455		35,292		3.62			3,285,081		37,911		4.60
Cash and due from banks		52,676							34,598
Other assets, net		162,187							163,617
Total Assets	$	4,102,318						$	3,483,296

Liabilities
Savings and interest- bearing checking	$	1,922,971		686		0.14		$	1,487,820		2,818		0.75
Time deposits		498,796		1,376		1.10			658,426		3,418		2.06
Other borrowings		110,714		1,006		3.61			72,887		703		3.83
Interest Bearing Liabilities		2,532,481		3,068		0.48			2,219,133		6,939		1.24
Non-interest bearing deposits		1,137,303							877,088
Other liabilities		67,820							49,913
Shareholders’ equity		364,714							337,162
Total liabilities and shareholders’ equity	$	4,102,318						$	3,483,296

Net Interest Income			$	32,224						$	30,972

Net Interest Income as a Percent of Average Interest Earning Assets						3.31	%						3.76	%

(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

Average Balances and Tax Equivalent Rates

	Nine Months Ended September 30,
	2020							2019
	Average Balance		Interest		Rate			Average Balance		Interest		Rate
	(Dollars in thousands)
Assets
Taxable loans	$	2,861,776	$	91,804		4.28	%	$	2,695,435	$	100,513		4.98	%
Tax-exempt loans ⁽¹⁾		7,266		273		5.02			7,856		291		4.95
Taxable securities		579,704		9,356		2.15			384,291		8,811		3.06
Tax-exempt securities⁽¹⁾		114,187		2,682		3.13			52,794		1,275		3.22
Interest bearing cash		52,265		160		0.41			51,260		655		1.71
Other investments		18,404		694		5.04			18,359		794		5.78
Interest Earning Assets		3,633,602		104,969		3.85			3,209,995		112,339		4.67
Cash and due from banks		49,345							34,032
Other assets, net		163,503							166,037
Total Assets	$	3,846,450						$	3,410,064

Liabilities
Savings and interest- bearing checking	$	1,764,933		3,121		0.24		$	1,421,114		7,787		0.73
Time deposits		529,248		6,029		1.52			670,479		10,151		2.02
Other borrowings		121,195		2,598		2.86			72,233		2,211		4.09
Interest Bearing Liabilities		2,415,376		11,748		0.65			2,163,826		20,149		1.24
Non-interest bearing deposits		1,016,286							862,929
Other liabilities		62,984							44,323
Shareholders’ equity		351,804							338,986
Total liabilities and shareholders’ equity	$	3,846,450						$	3,410,064

Net Interest Income			$	93,221						$	92,190

Net Interest Income as a Percent of Average Interest Earning Assets						3.42	%						3.83	%

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

Commercial Loan Portfolio Analysis as of September 30, 2020

	Total Commercial Loans
			Watch Credits						Percent of Loan
Loan Category	All Loans		Performing		Non-accrual		Total		Category in Watch Credit
	(Dollars in thousands)
Land	$	14,695	$	119	$	554	$	673		4.6	%
Land Development		10,803		37		-		37		0.3
Construction		109,048		36		-		36		0.0
Income Producing		334,140		5,625		-		5,625		1.7
Owner Occupied		351,951		28,235		769		29,004		8.2
Total Commercial Real Estate Loans	$	820,637	$	34,052		1,323	$	35,375		4.3

Other Commercial Loans	$	531,153	$	22,117		1,164	$	23,281		4.4
Total non-performing commercial loans					$	2,487

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

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