Exhibit 99.2
INDEPENDENT BANK CORPORATION AND SUBSIDIARIES
Supplemental Data
Non-performing assets (1) | ||||||||||||||||||||
June 30, 2021 | March 31, 2021 | December 31, 2020 | September 30, 2020 | June 30, 2020 | ||||||||||||||||
(Dollars in thousands) | ||||||||||||||||||||
Non-accrual loans | $ | 5,531 | $ | 7,548 | $ | 8,312 | $ | 10,481 | $ | 12,938 | ||||||||||
Loans 90 days or more past due and still accruing interest | 14 | - | - | 266 | 5 | |||||||||||||||
Subtotal | 5,545 | 7,548 | 8,312 | 10,747 | 12,943 | |||||||||||||||
Less: Government guaranteed loans | 427 | 459 | 439 | 510 | 604 | |||||||||||||||
Total non-performing loans | 5,118 | 7,089 | 7,873 | 10,237 | 12,339 | |||||||||||||||
Other real estate and repossessed assets | 296 | 346 | 766 | 1,487 | 1,569 | |||||||||||||||
Total non-performing assets | $ | 5,414 | $ | 7,435 | $ | 8,639 | $ | 11,724 | $ | 13,908 | ||||||||||
As a percent of Portfolio Loans | ||||||||||||||||||||
Non-performing loans | 0.18 | % | 0.25 | % | 0.29 | % | 0.36 | % | 0.43 | % | ||||||||||
Allowance for credit losses | 1.63 | 1.68 | 1.30 | 1.25 | 1.20 | |||||||||||||||
Non-performing assets to total assets | 0.12 | 0.17 | 0.21 | 0.28 | 0.34 | |||||||||||||||
Allowance for credit losses as a percent of non-performing loans | 897.34 | 659.54 | 450.01 | 349.43 | 279.60 |
(1) | Excludes loans classified as “trouble debt restructured” that are not past due. |
Troubled debt restructurings (“TDR”)
June 30, 2021 | ||||||||||||
Commercial | Retail (1) | Total | ||||||||||
(In thousands) | ||||||||||||
Performing TDR’s | $ | 4,948 | $ | 34,561 | $ | 39,509 | ||||||
Non-performing TDR’s (2) | - | 1,165 | (3) | 1,165 | ||||||||
Total | $ | 4,948 | $ | 35,726 | $ | 40,674 |
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
Six months ended June 30, | ||||||||||||||||
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) | (1,899 | ) | - | 11,909 | - | |||||||||||
Initial allowance on loans purchased with credit deterioration | 134 | - | - | - | ||||||||||||
Recoveries credited to allowance | 1,434 | - | 1,754 | - | ||||||||||||
Loans charged against the allowance | (746 | ) | - | (5,311 | ) | - | ||||||||||
Additions included in non-interest expense | - | (6 | ) | - | 230 | |||||||||||
Balance at end of period | $ | 45,926 | $ | 3,268 | $ | 34,500 | $ | 1,772 | ||||||||
Net loans charged (recovered) against the allowance to average Portfolio Loans | (0.05 | )% | 0.26 | % |
(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
June 30, 2021 | December 31, 2020 | |||||||
(In thousands) | ||||||||
Subordinated debt | $ | 39,319 | $ | 39,281 | ||||
Subordinated debentures | 39,558 | 39,524 | ||||||
Amount not qualifying as regulatory capital | (543 | ) | (505 | ) | ||||
Amount qualifying as regulatory capital | 78,334 | 78,300 | ||||||
Shareholders’ equity | ||||||||
Common stock | 332,457 | 339,353 | ||||||
Retained earnings | 55,101 | 40,145 | ||||||
Accumulated other comprehensive income | 8,416 | 10,024 | ||||||
Total shareholders’ equity | 395,974 | 389,522 | ||||||
Total capitalization | $ | 474,308 | $ | 467,822 |
2
Non-Interest Income
Three months ended | Six months ended | |||||||||||||||||||
June 30, | March 31, | June 30, | June 30, | |||||||||||||||||
2021 | 2021 | 2020 | 2021 | 2020 | ||||||||||||||||
(In thousands) | ||||||||||||||||||||
Interchange income | $ | 3,453 | $ | 3,049 | $ | 2,526 | $ | 6,502 | $ | 4,983 | ||||||||||
Service charges on deposit accounts | 2,318 | 1,916 | 1,623 | 4,234 | 4,214 | |||||||||||||||
Net gains on assets | ||||||||||||||||||||
Mortgage loans | 9,091 | 12,828 | 17,642 | 21,919 | 26,482 | |||||||||||||||
Securities | - | 1,416 | 0 | 1,416 | 253 | |||||||||||||||
Mortgage loan servicing, net | (1,962 | ) | 5,167 | (3,022 | ) | 3,205 | (8,322 | ) | ||||||||||||
Investment and insurance commissions | 634 | 583 | 435 | 1,217 | 948 | |||||||||||||||
Bank owned life insurance | 127 | 139 | 265 | 266 | 535 | |||||||||||||||
Other | 1,110 | 1,308 | 898 | 2,418 | 2,278 | |||||||||||||||
Total non-interest income | $ | 14,771 | $ | 26,406 | $ | 20,367 | $ | 41,177 | $ | 31,371 |
Capitalized Mortgage Loan Servicing Rights
Three months ended June 30, | Six months ended June 30, | |||||||||||||||
2021 | 2020 | 2021 | 2020 | |||||||||||||
(In thousands) | ||||||||||||||||
Balance at beginning of period | $ | 23,530 | $ | 14,829 | $ | 16,904 | $ | 19,171 | ||||||||
Originated servicing rights capitalized | 2,739 | 3,611 | 6,108 | 6,243 | ||||||||||||
Change in fair value | (3,838 | ) | (4,667 | ) | (581 | ) | (11,641 | ) | ||||||||
Balance at end of period | $ | 22,431 | $ | 13,773 | $ | 22,431 | $ | 13,773 |
3
Three months ended | Six months ended | |||||||||||||||||||
June 30, | March 31, | June 30, | June 30, | |||||||||||||||||
2021 | 2021 | 2020 | 2021 | 2020 | ||||||||||||||||
(Dollars in thousands) | ||||||||||||||||||||
Mortgage loans originated | $ | 473,742 | $ | 509,003 | $ | 470,626 | $ | 982,745 | $ | 781,704 | ||||||||||
Mortgage loans sold | 306,789 | 377,418 | 379,048 | 684,207 | 641,308 | |||||||||||||||
Net gains on mortgage loans | 9,091 | 12,828 | 17,642 | 21,919 | 26,482 | |||||||||||||||
Net gains as a percent of mortgage loans sold (“Loan Sales Margin”) | 2.96 | % | 3.40 | % | 4.65 | % | 3.20 | % | 4.13 | % | ||||||||||
Fair value adjustments included in the | ||||||||||||||||||||
Loan Sales Margin | (0.08 | ) | (0.98 | ) | 1.14 | (0.57 | ) | 0.99 |
Three months ended | Six months ended | |||||||||||||||||||
June 30, | March 31, | June 30, | June 30, | |||||||||||||||||
2021 | 2021 | 2020 | 2021 | 2020 | ||||||||||||||||
(In thousands) | ||||||||||||||||||||
Compensation | $ | 11,136 | $ | 10,121 | $ | 9,668 | $ | 21,257 | $ | 20,371 | ||||||||||
Performance-based compensation | 4,783 | 4,292 | 3,809 | 9,075 | 5,930 | |||||||||||||||
Payroll taxes and employee benefits | 3,964 | 4,109 | 2,802 | 8,073 | 6,487 | |||||||||||||||
Compensation and employee benefits | 19,883 | 18,522 | 16,279 | 38,405 | 32,788 | |||||||||||||||
Data processing | 2,576 | 2,374 | 1,590 | 4,950 | 3,945 | |||||||||||||||
Occupancy, net | 2,153 | 2,343 | 2,159 | 4,496 | 4,619 | |||||||||||||||
Interchange expense | 1,201 | 948 | 726 | 2,149 | 1,585 | |||||||||||||||
Furniture, fixtures and equipment | 1,034 | 1,003 | 1,090 | 2,037 | 2,126 | |||||||||||||||
Communications | 777 | 881 | 800 | 1,658 | 1,603 | |||||||||||||||
Loan and collection | 859 | 759 | 756 | 1,618 | 1,561 | |||||||||||||||
Conversion related expenses | 1,143 | 218 | 346 | 1,361 | 402 | |||||||||||||||
Legal and professional | 522 | 499 | 468 | 1,021 | 861 | |||||||||||||||
Advertising | 164 | 489 | 364 | 653 | 1,047 | |||||||||||||||
FDIC deposit insurance | 307 | 330 | 430 | 637 | 800 | |||||||||||||||
Amortization of intangible assets | 243 | 242 | 255 | 485 | 510 | |||||||||||||||
Supplies | 170 | 174 | 203 | 344 | 387 | |||||||||||||||
Correspondent bank service fees | 115 | 100 | 94 | 215 | 193 | |||||||||||||||
Provision for loss reimbursement on sold loans | 25 | 34 | 77 | 59 | 114 | |||||||||||||||
Branch closure costs | - | - | 417 | - | 417 | |||||||||||||||
Costs (recoveries) related to unfunded lending commitments | 26 | (32 | ) | 111 | (6 | ) | 230 | |||||||||||||
Net (gains) losses on other real estate and repossessed assets | 6 | (180 | ) | (9 | ) | (174 | ) | 100 | ||||||||||||
Other | 1,332 | 1,317 | 1,190 | 2,649 | 2,777 | |||||||||||||||
Total non-interest expense | $ | 32,536 | $ | 30,021 | $ | 27,346 | $ | 62,557 | $ | 56,065 |
4
Three Months Ended June 30, | ||||||||||||||||||||||||
2021 | 2020 | |||||||||||||||||||||||
Average Balance | Interest | Rate (2) | Average Balance | Interest | Rate (2) | |||||||||||||||||||
(Dollars in thousands) | ||||||||||||||||||||||||
Assets | ||||||||||||||||||||||||
Taxable loans | $ | 2,852,972 | $ | 28,026 | 3.94 | % | $ | 2,906,843 | $ | 29,793 | 4.11 | % | ||||||||||||
Tax-exempt loans (1) | 6,572 | 82 | 5.00 | 7,014 | 88 | 5.05 | ||||||||||||||||||
Taxable securities | 908,622 | 3,656 | 1.61 | 535,345 | 2,847 | 2.13 | ||||||||||||||||||
Tax-exempt securities (1) | 365,934 | 2,005 | 2.19 | 124,781 | 998 | 3.20 | ||||||||||||||||||
Interest bearing cash | 71,043 | 22 | 0.12 | 67,204 | 18 | 0.11 | ||||||||||||||||||
Other investments | 18,427 | 186 | 4.05 | 18,427 | 233 | 5.09 | ||||||||||||||||||
Interest Earning Assets | 4,223,570 | 33,977 | 3.22 | 3,659,614 | 33,977 | 3.72 | ||||||||||||||||||
Cash and due from banks | 54,120 | 45,714 | ||||||||||||||||||||||
Other assets, net | 157,070 | 163,080 | ||||||||||||||||||||||
Total Assets | $ | 4,434,760 | $ | 3,868,408 | ||||||||||||||||||||
Liabilities | ||||||||||||||||||||||||
Savings and interest-bearing checking | $ | 2,260,172 | 689 | 0.12 | $ | 1,754,503 | 505 | 0.12 | ||||||||||||||||
Time deposits | 305,390 | 453 | 0.59 | 494,411 | 1,883 | 1.53 | ||||||||||||||||||
Other borrowings | 108,863 | 964 | 3.55 | 153,447 | 904 | 2.37 | ||||||||||||||||||
Interest Bearing Liabilities | 2,674,425 | 2,106 | 0.32 | 2,402,361 | 3,292 | 0.55 | ||||||||||||||||||
Non-interest bearing deposits | 1,314,153 | 1,054,388 | ||||||||||||||||||||||
Other liabilities | 57,402 | 70,053 | ||||||||||||||||||||||
Shareholders’ equity | 388,780 | 341,606 | ||||||||||||||||||||||
Total liabilities and | ||||||||||||||||||||||||
shareholders’ equity | $ | 4,434,760 | $ | 3,868,408 | ||||||||||||||||||||
Net Interest Income | $ | 31,871 | $ | 30,685 | ||||||||||||||||||||
Net Interest Income as a Percent of Average Interest Earning Assets | 3.02 | % | 3.36 | % |
(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
Six Months Ended June 30, | ||||||||||||||||||||||||
2021 | 2020 | |||||||||||||||||||||||
Average Balance | Interest | Rate (2) | Average Balance | Interest | Rate (2) | |||||||||||||||||||
(Dollars in thousands) | ||||||||||||||||||||||||
Assets | ||||||||||||||||||||||||
Taxable loans | $ | 2,840,224 | $ | 56,065 | 3.98 | % | $ | 2,832,876 | $ | 61,481 | 4.36 | % | ||||||||||||
Tax-exempt loans (1) | 6,624 | 166 | 5.07 | 7,438 | 185 | 5.00 | ||||||||||||||||||
Taxable securities | 845,895 | 6,452 | 1.52 | 501,720 | 5,906 | 2.35 | ||||||||||||||||||
Tax-exempt securities (1) | 338,692 | 3,775 | 2.22 | 92,040 | 1,488 | 3.23 | ||||||||||||||||||
Interest bearing cash | 86,384 | 51 | 0.12 | 52,814 | 146 | 0.56 | ||||||||||||||||||
Other investments | 18,427 | 374 | 4.10 | 18,393 | 471 | 5.15 | ||||||||||||||||||
Interest Earning Assets | 4,136,246 | 66,883 | 3.25 | 3,505,281 | 69,677 | 3.99 | ||||||||||||||||||
Cash and due from banks | 55,239 | 47,663 | ||||||||||||||||||||||
Other assets, net | 153,540 | 164,167 | ||||||||||||||||||||||
Total Assets | $ | 4,345,025 | $ | 3,717,111 | ||||||||||||||||||||
Liabilities | ||||||||||||||||||||||||
Savings and interest-bearing checking | $ | 2,200,620 | 1,364 | 0.13 | $ | 1,685,046 | 2,435 | 0.29 | ||||||||||||||||
Time deposits | 322,535 | 1,034 | 0.65 | 544,642 | 4,653 | 1.72 | ||||||||||||||||||
Other borrowings | 108,844 | 1,926 | 3.58 | 126,491 | 1,592 | 2.53 | ||||||||||||||||||
Interest Bearing Liabilities | 2,631,999 | 4,324 | 0.33 | 2,356,179 | 8,680 | 0.74 | ||||||||||||||||||
Non-interest bearing deposits | 1,266,607 | 955,114 | ||||||||||||||||||||||
Other liabilities | 61,950 | 60,540 | ||||||||||||||||||||||
Shareholders’ equity | 384,469 | 345,278 | ||||||||||||||||||||||
Total liabilities and | ||||||||||||||||||||||||
shareholders’ equity | $ | 4,345,025 | $ | 3,717,111 | ||||||||||||||||||||
Net Interest Income | $ | 62,559 | $ | 60,997 | ||||||||||||||||||||
Net Interest Income as a Percent of Average Interest Earning Assets | 3.04 | % | 3.49 | % |
(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 |
6
Commercial Loan Portfolio Analysis as of June 30, 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 | $ | 13,523 | $ | 162 | $ | - | $ | 162 | 1.2 | % | ||||||||||
Land Development | 11,498 | 34 | - | 34 | 0.3 | |||||||||||||||
Construction | 70,347 | - | - | - | 0.0 | |||||||||||||||
Income Producing | 369,262 | 2,337 | - | 2,337 | 0.6 | |||||||||||||||
Owner Occupied | 340,061 | 13,400 | - | 13,400 | 3.9 | |||||||||||||||
Total Commercial Real Estate Loans | $ | 804,691 | $ | 15,933 | - | $ | 15,933 | 2.0 | ||||||||||||
Other Commercial Loans | $ | 439,856 | $ | 12,560 | 242 | $ | 12,802 | 2.9 | ||||||||||||
Total non-performing commercial loans | $ | 242 |
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 |
7