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

Exhibit 99.2

INDEPENDENT BANK CORPORATION AND SUBSIDIARIES

Supplemental Data

Non-performing assets (1)
	September 30, 2021			June 30, 2021			March 31, 2021			December 31, 2020			September 30, 2020
	(Dollars in thousands)
Non-accrual loans	$	5,917		$	5,531		$	7,548		$	8,312		$	10,481
Loans 90 days or more past due and still accruing interest		-			14			-			-			266
Subtotal		5,917			5,545			7,548			8,312			10,747
Less:  Government guaranteed loans		327			427			459			439			510
Total non-performing loans		5,590			5,118			7,089			7,873			10,237
Other real estate and repossessed assets		224			296			346			766			1,487
Total non-performing assets	$	5,814		$	5,414		$	7,435		$	8,639		$	11,724
As a percent of Portfolio Loans
Non-performing loans		0.19	%		0.18	%		0.25	%		0.29	%		0.36	%
Allowance for credit losses		1.62			1.63			1.68			1.30			1.25
Non-performing assets to total assets		0.13			0.12			0.17			0.21			0.28
Allowance for credit losses as a percent of non-performing loans		837.19			897.34			659.54			450.01			349.43

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

Troubled debt restructurings ("TDR")

	September 30, 2021
	Commercial		Retail (1)			Total
	(In thousands)
Performing TDR's	$	4,692	$	32,037		$	36,729
Non-performing TDR's (2)		-		1,198	(3)		1,198
Total	$	4,692	$	33,235		$	37,927

	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.

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Allowance for credit losses

	Nine months ended September 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)		(2,558	)		-		12,884			-
Initial allowance on loans purchased with credit deterioration		134			-		-			-
Recoveries credited to allowance		3,918			-		2,404			-
Loans charged against the allowance		(1,698	)		-		(5,665	)		-
Additions included in non-interest expense		-			363		-			271
Balance at end of period	$	46,799		$	3,637	$	35,771		$	1,813
Net loans charged (recovered) against the allowance to average Portfolio Loans		(0.11	)%				0.16	%

(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

	September 30, 2021			December 31, 2020
	(In thousands)
Subordinated debt	$	39,338		$	39,281
Subordinated debentures		39,575			39,524
Amount not qualifying as regulatory capital		(562	)		(505	)
Amount qualifying as regulatory capital		78,351			78,300
Shareholders’ equity
Common stock		326,390			339,353
Retained earnings		66,543			40,145
Accumulated other comprehensive income		7,098			10,024
Total shareholders’ equity		400,031			389,522
Total capitalization	$	478,382		$	467,822

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Non-Interest Income

	Three months ended								Nine months ended
	September 30,		June 30,			September 30,			September 30,
	2021		2021			2020			2021		2020
	(In thousands)
Interchange income	$	4,237	$	3,453		$	3,428		$	10,739	$	8,411
Service charges on deposit accounts		2,944		2,318			2,085			7,178		6,299
Net gains on assets
Mortgage loans		8,361		9,091			20,205			30,280		46,687
Securities		5		-			-			1,421		253
Mortgage loan servicing, net		1,271		(1,962	)		(644	)		4,476		(8,966	)
Investment and insurance commissions		678		634			530			1,895		1,478
Bank owned life insurance		145		127			215			411		750
Other		2,054		1,110			1,192			4,472		3,470
Total non-interest income	$	19,695	$	14,771		$	27,011		$	60,872	$	58,382

Capitalized Mortgage Loan Servicing Rights

	Three months ended September 30,						Nine months ended September 30,
	2021			2020			2021			2020
	(In thousands)
Balance at beginning of period	$	22,431		$	13,773		$	16,904		$	19,171
Originated servicing rights capitalized		2,529			4,017			8,637			10,260
Change in fair value		(752	)		(2,387	)		(1,333	)		(14,028	)
Balance at end of period	$	24,208		$	15,403		$	24,208		$	15,403

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Mortgage Loan Activity

	Three months ended									Nine months ended
	September 30,			June 30,			September 30,			September 30,
	2021			2021			2020			2021			2020
	(Dollars in thousands)
Mortgage loans originated	$	453,752		$	473,742		$	536,502		$	1,436,497		$	1,318,206
Mortgage loans sold		279,235			306,789			417,092			963,442			1,058,400
Net gains on mortgage loans		8,361			9,091			20,205			30,280			46,687
Net gains as a percent of mortgage loans sold  ("Loan Sales Margin")		2.99	%		2.96	%		4.84	%		3.14	%		4.41	%
Fair value adjustments included in the
Loan Sales Margin		0.04			(0.08	)		0.50			(0.40	)		0.81

Non-Interest Expense

	Three months ended							Nine months ended
	September 30,			June 30,		September 30,		September 30,
	2021			2021		2020		2021			2020
	(In thousands)
Compensation	$	11,507		$	11,136	$	10,294	$	32,764		$	30,665
Performance-based compensation		6,252			4,783		8,310		15,327			14,240
Payroll taxes and employee benefits		3,900			3,964		3,350		11,973			9,837
Compensation and employee benefits		21,659			19,883		21,954		60,064			54,742
Data processing		3,022			2,576		2,215		7,972			6,160
Occupancy, net		2,082			2,153		2,199		6,578			6,818
Interchange expense		1,202			1,201		831		3,351			2,416
Furniture, fixtures and equipment		1,075			1,034		999		3,112			3,125
Loan and collection		735			859		768		2,353			2,329
Communications		683			777		806		2,341			2,409
Conversion related expenses		275			1,143		643		1,636			1,045
Legal and professional		513			522		566		1,534			1,427
Advertising		666			164		589		1,319			1,636
FDIC deposit insurance		346			307		411		983			1,211
Amortization of intangible assets		242			243		255		727			765
Supplies		116			170		126		460			513
Costs related to unfunded lending commitments		369			26		41		363			271
Correspondent bank service fees		77			115		101		292			294
Provision for loss reimbursement on sold loans		36			25		46		95			160
Branch closure costs		-			-		-		-			417
Net (gains) losses on other real estate and repossessed assets		(28	)		6		46		(202	)		146
Other		1,442			1,332		1,045		4,091			3,822
Total non-interest expense	$	34,512		$	32,536	$	33,641	$	97,069		$	89,706

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Average Balances and Tax Equivalent Rates

	Three Months Ended
	September 30,
			2021							2020
	Average Balance		Interest		Rate (2)			Average Balance		Interest		Rate (2)
	(Dollars in thousands)
Assets
Taxable loans	$	2,896,552	$	30,061		4.13	%	$	2,918,946	$	30,323		4.14	%
Tax-exempt loans (1)		7,148		90		5.00			6,926		88		5.05
Taxable securities		951,445		3,922		1.65			733,977		3,450		1.88
Tax-exempt securities (1)		365,937		2,070		2.26			157,998		1,194		3.02
Interest bearing cash		57,153		23		0.16			51,181		14		0.11
Other investments		18,427		181		3.90			18,427		223		4.81
Interest Earning Assets		4,296,662		36,347		3.37			3,887,455		35,292		3.62
Cash and due from banks		57,151							52,676
Other assets, net		159,961							162,187
Total Assets	$	4,513,774						$	4,102,318
Liabilities
Savings and interest- bearing checking	$	2,317,142		695		0.12		$	1,922,971		686		0.14
Time deposits		314,394		395		0.50			498,796		1,376		1.10
Other borrowings		108,908		962		3.50			110,714		1,006		3.61
Interest Bearing Liabilities		2,740,444		2,052		0.30			2,532,481		3,068		0.48
Non-interest bearing deposits		1,303,401							1,137,303
Other liabilities		72,387							67,820
Shareholders’ equity		397,542							364,714
Total liabilities and shareholders’ equity	$	4,513,774						$	4,102,318
Net Interest Income			$	34,295						$	32,224
Net Interest Income as a Percent of Average Interest Earning Assets						3.18	%						3.31	%

(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

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Average Balances and Tax Equivalent Rates

	Nine Months Ended
	September 30,
			2021							2020
	Average Balance		Interest		Rate (2)			Average Balance		Interest		Rate (2)
	(Dollars in thousands)
Assets
Taxable loans	$	2,859,207	$	86,126		4.02	%	$	2,861,776	$	91,804		4.28	%
Tax-exempt loans (1)		6,801		256		5.03			7,266		273		5.02
Taxable securities		881,465		10,374		1.57			579,704		9,356		2.15
Tax-exempt securities (1)		347,873		5,845		2.24			114,187		2,682		3.13
Interest bearing cash		76,533		74		0.13			52,265		160		0.41
Other investments		18,427		555		4.03			18,404		694		5.04
Interest Earning Assets		4,190,306		103,230		3.29			3,633,602		104,969		3.85
Cash and due from banks		55,883							49,345
Other assets, net		155,701							163,503
Total Assets	$	4,401,890						$	3,846,450
Liabilities
Savings and interest- bearing checking	$	2,239,887		2,059		0.12		$	1,764,933		3,121		0.24
Time deposits		319,792		1,429		0.60			529,248		6,029		1.52
Other borrowings		108,866		2,888		3.55			121,195		2,598		2.86
Interest Bearing Liabilities		2,668,545		6,376		0.32			2,415,376		11,748		0.65
Non-interest bearing deposits		1,279,006							1,016,286
Other liabilities		65,464							62,984
Shareholders’ equity		388,875							351,804
Total liabilities and shareholders’ equity	$	4,401,890						$	3,846,450
Net Interest Income			$	96,854						$	93,221
Net Interest Income as a Percent of Average Interest Earning Assets						3.09	%						3.42	%

(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

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Commercial Loan Portfolio Analysis as of September 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	$	14,751	$	73	$	-	$	73		0.5	%
Land Development		11,912		33		-		33		0.3
Construction		86,284		-		-		-		0.0
Income Producing		376,010		1,964		-		1,964		0.5
Owner Occupied		350,819		19,997		-		19,997		5.7
Total Commercial Real Estate Loans	$	839,776	$	22,067		-	$	22,067		2.6
Other Commercial Loans	$	383,026	$	4,488		189	$	4,677		1.2
Total non-performing commercial loans					$	189

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

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