Exhibit 99.2
INDEPENDENT BANK CORPORATION AND SUBSIDIARIES
Supplemental Data
Non-performing assets (1)
March 31, 2021 | December 31, 2020 | September 30, 2020 | June 30, 2020 | March 31, 2020 | ||||||||||||||||
(Dollars in thousands) | ||||||||||||||||||||
Non-accrual loans | $ | 7,548 | $ | 8,312 | $ | 10,481 | $ | 12,938 | $ | 17,454 | ||||||||||
Loans 90 days or more past due and still accruing interest | - | - | 266 | 5 | - | |||||||||||||||
Subtotal | 7,548 | 8,312 | 10,747 | 12,943 | 17,454 | |||||||||||||||
Less: Government guaranteed loans | 459 | 439 | 510 | 604 | 676 | |||||||||||||||
Total non-performing loans | 7,089 | 7,873 | 10,237 | 12,339 | 16,778 | |||||||||||||||
Other real estate and repossessed assets | 346 | 766 | 1,487 | 1,569 | 1,494 | |||||||||||||||
Total non-performing assets | $ | 7,435 | $ | 8,639 | $ | 11,724 | $ | 13,908 | $ | 18,272 | ||||||||||
As a percent of Portfolio Loans | ||||||||||||||||||||
Non-performing loans | 0.25 | % | 0.29 | % | 0.36 | % | 0.43 | % | 0.62 | |||||||||||
Allowance for credit losses | 1.68 | 1.30 | 1.25 | 1.20 | 1.20 | |||||||||||||||
Non-performing assets to total assets | 0.17 | 0.21 | 0.28 | 0.34 | 0.50 | |||||||||||||||
Allowance for credit losses as a percent of non-performing loans | 659.54 | 450.01 | 349.43 | 279.60 | 193.68 |
(1) | Excludes loans classified as "trouble debt restructured" that are not past due. |
Troubled debt restructurings ("TDR")
March 31, 2021 | ||||||||||||
Commercial | Retail (1) | Total | ||||||||||
(In thousands) | ||||||||||||
Performing TDR's | $ | 5,032 | $ | 34,679 | $ | 39,711 | ||||||
Non-performing TDR's (2) | 1,105 | 1,459 | (3) | 2,564 | ||||||||
Total | $ | 6,137 | $ | 36,138 | $ | 42,275 |
December 31, 2020 | ||||||||||||
Commercial | Retail (1) | Total | ||||||||||
(In thousands) | ||||||||||||
Performing TDR's | $ | 7,956 | $ | 36,385 | $ | 44,341 | ||||||
Non-performing TDR's (2) | 1,148 | 1,584 | (3) | 2,732 | ||||||||
Total | $ | 9,104 | $ | 37,969 | $ | 47,073 |
(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 credit losses
Three months ended March 31, | ||||||||||||||||
2021 | 2020 | |||||||||||||||
Loans | Unfunded Commitments | Loans | Unfunded Commitments | |||||||||||||
(Dollars in thousands) | ||||||||||||||||
Balance at beginning of period | $ | 35,429 | $ | 1,805 | $ | 26,148 | $ | 1,542 | ||||||||
Additions (deductions) | ||||||||||||||||
Impact of adoption of ASC 326 | 11,574 | 1,469 | - | - | ||||||||||||
Provision for credit losses (1) | (474 | ) | - | 6,721 | - | |||||||||||
Initial allowance on loans purchased with credit deterioration | 134 | - | - | - | ||||||||||||
Recoveries credited to allowance | 548 | - | 399 | - | ||||||||||||
Loans charged against the allowance | (456 | ) | - | (773 | ) | - | ||||||||||
Additions included in non-interest expense | - | (32 | ) | - | 119 | |||||||||||
Balance at end of period | $ | 46,755 | $ | 3,242 | $ | 32,495 | $ | 1,661 | ||||||||
Net loans charged (recovered) against the allowance to average Portfolio Loans | (0.01 | )% | 0.06 | % |
(1) | Beginning January 1, 2021, calculation is based on CECL methodology. Prior to January 1, 2021, calculation was based on the probable incurred loss methodology. |
Capitalization
March 31, 2021 | December 31, 2020 | |||||||
(In thousands) | ||||||||
Subordinated debt | $ | 39,300 | $ | 39,281 | ||||
Subordinated debentures | 39,541 | 39,524 | ||||||
Amount not qualifying as regulatory capital | (524 | ) | (505 | ) | ||||
Amount qualifying as regulatory capital | 78,317 | 78,300 | ||||||
Shareholders’ equity | ||||||||
Common stock | 335,704 | 339,353 | ||||||
Retained earnings | 47,287 | 40,145 | ||||||
Accumulated other comprehensive income | 4,338 | 10,024 | ||||||
Total shareholders’ equity | 387,329 | 389,522 | ||||||
Total capitalization | $ | 465,646 | $ | 467,822 |
2
Non-Interest Income
Three months ended | ||||||||||||
March 31, 2021 | December 31, 2020 | March 31, 2020 | ||||||||||
(In thousands) | ||||||||||||
Interchange income | $ | 3,049 | $ | 2,819 | $ | 2,457 | ||||||
Service charges on deposit accounts | 1,916 | 2,218 | 2,591 | |||||||||
Net gains on assets | ||||||||||||
Mortgage loans | 12,828 | 15,873 | 8,840 | |||||||||
Securities | 1,416 | 14 | 253 | |||||||||
Mortgage loan servicing, net | 5,167 | (384 | ) | (5,300 | ) | |||||||
Investment and insurance commissions | 583 | 493 | 513 | |||||||||
Bank owned life insurance | 139 | 160 | 270 | |||||||||
Other | 1,308 | 1,170 | 1,380 | |||||||||
Total non-interest income | $ | 26,406 | $ | 22,363 | $ | 11,004 |
Capitalized Mortgage Loan Servicing Rights
Three months ended March 31, | ||||||||
2021 | 2020 | |||||||
(In thousands) | ||||||||
Balance at beginning of period | $ | 16,904 | $ | 19,171 | ||||
Originated servicing rights capitalized | 3,369 | 2,632 | ||||||
Change in fair value | 3,257 | (6,974 | ) | |||||
Balance at end of period | $ | 23,530 | $ | 14,829 |
3
Three months ended | ||||||||||||
March 31, 2021 | December 31, 2020 | March 31, 2020 | ||||||||||
(Dollars in thousands) | ||||||||||||
Mortgage loans originated | $ | 509,003 | $ | 502,491 | $ | 311,078 | ||||||
Mortgage loans sold | 377,418 | 388,631 | 262,260 | |||||||||
Net gains on mortgage loans | 12,828 | 15,873 | 8,840 | |||||||||
Net gains as a percent of mortgage loans sold ("Loan Sales Margin") | 3.40 | % | 4.08 | % | 3.37 | % | ||||||
Fair value adjustments included in the | ||||||||||||
Loan Sales Margin | (0.98 | ) | (0.53 | ) | 0.78 |
Non-Interest Expense
Three months ended | ||||||||||||
March 31, 2021 | December 31, 2020 | March 31, 2020 | ||||||||||
(In thousands) | ||||||||||||
Compensation | $ | 10,121 | $ | 10,852 | $ | 10,703 | ||||||
Performance-based compensation | 4,292 | 5,485 | 2,121 | |||||||||
Payroll taxes and employee benefits | 4,109 | 3,702 | 3,685 | |||||||||
Compensation and employee benefits | 18,522 | 20,039 | 16,509 | |||||||||
Data processing | 2,374 | 2,374 | 2,355 | |||||||||
Occupancy, net | 2,343 | 2,120 | 2,460 | |||||||||
Furniture, fixtures and equipment | 1,003 | 964 | 1,036 | |||||||||
Interchange expense | 948 | 926 | 859 | |||||||||
Communications | 881 | 785 | 803 | |||||||||
Loan and collection | 759 | 708 | 805 | |||||||||
Legal and professional | 499 | 600 | 393 | |||||||||
Advertising | 489 | 594 | 683 | |||||||||
FDIC deposit insurance | 330 | 385 | 370 | |||||||||
Amortization of intangible assets | 242 | 255 | 255 | |||||||||
Conversion related expenses | 218 | 1,541 | 56 | |||||||||
Supplies | 174 | 167 | 184 | |||||||||
Correspondent bank service fees | 100 | 101 | 99 | |||||||||
Provision for loss reimbursement on sold loans | 34 | 40 | 37 | |||||||||
Costs (recoveries) related to unfunded lending commitments | (32 | ) | (8 | ) | 119 | |||||||
Net (gains) losses on other real estate and repossessed assets | (180 | ) | (82 | ) | 109 | |||||||
Other | 1,317 | 1,198 | 1,587 | |||||||||
Total non-interest expense | $ | 30,021 | $ | 32,707 | $ | 28,719 |
4
Three Months Ended March 31, | ||||||||||||||||||||||||
2021 | 2020 | |||||||||||||||||||||||
Average Balance | Interest | Rate (2) | Average Balance | Interest | Rate (2) | |||||||||||||||||||
(Dollars in thousands) | ||||||||||||||||||||||||
Assets | ||||||||||||||||||||||||
Taxable loans | $ | 2,827,335 | $ | 28,039 | 4.00 | % | $ | 2,758,909 | $ | 31,688 | 4.61 | % | ||||||||||||
Tax-exempt loans (1) | 6,677 | 84 | 5.10 | 7,861 | 97 | 4.96 | ||||||||||||||||||
Taxable securities | 782,471 | 2,796 | 1.43 | 468,095 | 3,059 | 2.61 | ||||||||||||||||||
Tax-exempt securities (1) | 311,147 | 1,770 | 2.28 | 59,300 | 490 | 3.31 | ||||||||||||||||||
Interest bearing cash | 101,895 | 29 | 0.12 | 38,424 | 128 | 1.34 | ||||||||||||||||||
Other investments | 18,427 | 188 | 4.14 | 18,359 | 238 | 5.21 | ||||||||||||||||||
Interest Earning Assets | 4,047,952 | 32,906 | 3.27 | 3,350,948 | 35,700 | 4.28 | ||||||||||||||||||
Cash and due from banks | 56,371 | 49,610 | ||||||||||||||||||||||
Other assets, net | 149,971 | 165,271 | ||||||||||||||||||||||
Total Assets | $ | 4,254,294 | $ | 3,565,829 | ||||||||||||||||||||
Liabilities | ||||||||||||||||||||||||
Savings and interest-bearing checking | $ | 2,140,405 | 675 | 0.13 | $ | 1,615,589 | 1,930 | 0.48 | ||||||||||||||||
Time deposits | 339,872 | 581 | 0.69 | 594,871 | 2,770 | 1.87 | ||||||||||||||||||
Other borrowings | 108,825 | 962 | 3.59 | 99,535 | 688 | 2.78 | ||||||||||||||||||
Interest Bearing Liabilities | 2,589,102 | 2,218 | 0.35 | 2,309,995 | 5,388 | 0.94 | ||||||||||||||||||
Non-interest bearing deposits | 1,218,534 | 855,838 | ||||||||||||||||||||||
Other liabilities | 66,547 | 51,033 | ||||||||||||||||||||||
Shareholders’ equity | 380,111 | 348,963 | ||||||||||||||||||||||
Total liabilities and shareholders’ equity | $ | 4,254,294 | $ | 3,565,829 | ||||||||||||||||||||
Net Interest Income | $ | 30,688 | $ | 30,312 | ||||||||||||||||||||
Net Interest Income as a Percent of Average Interest Earning Assets | 3.05 | % | 3.63 | % |
(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
Commercial Loan Portfolio Analysis as of March 31, 2021
Total Commercial Loans | ||||||||||||||||||||
Watch Credits | Percent of Loan | |||||||||||||||||||
Loan Category | All Loans | Performing | Non-accrual | Total | Category in Watch Credit | |||||||||||||||
(Dollars in thousands) | ||||||||||||||||||||
Land | $ | 14,178 | $ | 175 | $ | - | $ | 175 | 1.2 | % | ||||||||||
Land Development | 13,274 | 35 | - | 35 | 0.3 | |||||||||||||||
Construction | 75,364 | 36 | - | 36 | 0.0 | |||||||||||||||
Income Producing | 362,506 | 2,049 | - | 2,049 | 0.6 | |||||||||||||||
Owner Occupied | 353,101 | 12,219 | 719 | 12,938 | 3.7 | |||||||||||||||
Total Commercial Real Estate Loans | $ | 818,423 | $ | 14,514 | 719 | $ | 15,233 | 1.9 | ||||||||||||
Other Commercial Loans | $ | 482,800 | $ | 15,107 | 654 | $ | 15,761 | 3.2 | ||||||||||||
Total non-performing commercial loans | $ | 1,373 |
Commercial Loan Portfolio Analysis as of December 31, 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 | $ | 14,567 | $ | 116 | $ | - | $ | 116 | 0.8 | % | ||||||||||
Land Development | 12,176 | 36 | - | 36 | 0.3 | |||||||||||||||
Construction | 68,724 | 36 | - | 36 | 0.1 | |||||||||||||||
Income Producing | 358,603 | 3,699 | - | 3,699 | 1.0 | |||||||||||||||
Owner Occupied | 360,510 | 24,693 | 745 | 25,438 | 7.1 | |||||||||||||||
Total Commercial Real Estate Loans | $ | 814,580 | $ | 28,580 | 745 | $ | 29,325 | 3.6 | ||||||||||||
Other Commercial Loans | $ | 427,835 | $ | 16,059 | 695 | $ | 16,754 | 3.9 | ||||||||||||
Total non-performing commercial loans | $ | 1,440 |
6