Exhibit 99.2
INDEPENDENT BANK CORPORATION AND SUBSIDIARIES
Supplemental Data
Non-performing assets (1)
March 31, 2022 | December 31, 2021 | September 30, 2021 | June 30, 2021 | March 31, 2021 | ||||||||||||||||
(Dollars in thousands) | ||||||||||||||||||||
Non-accrual loans | $ | 5,893 | $ | 5,545 | $ | 5,917 | $ | 5,531 | $ | 7,548 | ||||||||||
Loans 90 days or more past due and still accruing interest | - | - | - | 14 | - | |||||||||||||||
Subtotal | 5,893 | 5,545 | 5,917 | 5,545 | 7,548 | |||||||||||||||
Less: Government guaranteed loans | 859 | 435 | 327 | 427 | 459 | |||||||||||||||
Total non-performing loans | 5,034 | 5,110 | 5,590 | 5,118 | 7,089 | |||||||||||||||
Other real estate and repossessed assets | 438 | 245 | 224 | 296 | 346 | |||||||||||||||
Total non-performing assets | $ | 5,472 | $ | 5,355 | $ | 5,814 | $ | 5,414 | $ | 7,435 | ||||||||||
As a percent of Portfolio Loans Non-performing loans | 0.17 | % | 0.18 | % | 0.19 | % | 0.18 | % | 0.25 | % | ||||||||||
Allowance for credit losses | 1.52 | 1.63 | 1.62 | 1.63 | 1.68 | |||||||||||||||
Non-performing assets to total assets | 0.11 | 0.11 | 0.13 | 0.12 | 0.17 | |||||||||||||||
Allowance for credit losses as a percent of non-performing loans | 906.38 | 924.70 | 837.19 | 897.34 | 659.54 |
(1) | Excludes loans classified as "trouble debt restructured" that are not past due. |
Troubled debt restructurings ("TDR")
March 31, 2022 | ||||||||||||
Commercial | Retail (1) | Total | ||||||||||
(In thousands) | ||||||||||||
Performing TDR's | $ | 4,410 | $ | 30,622 | $ | 35,032 | ||||||
Non-performing TDR's (2) | - | 875 | (3) | 875 | ||||||||
Total | $ | 4,410 | $ | 31,497 | $ | 35,907 |
December 31, 2021 | ||||||||||||
Commercial | Retail (1) | Total | ||||||||||
(In thousands) | ||||||||||||
Performing TDR's | $ | 4,481 | $ | 31,589 | $ | 36,070 | ||||||
Non-performing TDR's (2) | - | 1,016 | (3) | 1,016 | ||||||||
Total | $ | 4,481 | $ | 32,605 | $ | 37,086 |
(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, | ||||||||||||||||
2022 | 2021 | |||||||||||||||
Loans | Unfunded Commitments | Loans | Unfunded Commitments | |||||||||||||
(Dollars in thousands) | ||||||||||||||||
Balance at beginning of period | $ | 47,252 | $ | 4,481 | $ | 35,429 | $ | 1,805 | ||||||||
Additions (deductions) | ||||||||||||||||
Impact of adoption of ASC 326 | - | - | 11,574 | 1,469 | ||||||||||||
Provision for credit losses | (1,573 | ) | - | (474 | ) | - | ||||||||||
Initial allowance on loans purchased with credit deterioration | - | - | 134 | - | ||||||||||||
Recoveries credited to allowance | 621 | - | 548 | - | ||||||||||||
Loans charged against the allowance | (673 | ) | - | (456 | ) | - | ||||||||||
Recoveries included in non-interest expense | - | (355 | ) | - | (32 | ) | ||||||||||
Balance at end of period | $ | 45,627 | $ | 4,126 | $ | 46,755 | $ | 3,242 | ||||||||
Net loans charged (recovered) against the allowance to average Portfolio Loans | 0.01 | % | (0.01 | )% |
Capitalization
March 31, 2022 | December 31, 2021 | |||||||
(In thousands) | ||||||||
Subordinated debt | $ | 39,376 | $ | 39,357 | ||||
Subordinated debentures | 39,609 | 39,592 | ||||||
Amount not qualifying as regulatory capital | (600 | ) | (581 | ) | ||||
Amount qualifying as regulatory capital | 78,385 | 78,368 | ||||||
Shareholders’ equity | ||||||||
Common stock | 321,981 | 323,401 | ||||||
Retained earnings | 87,882 | 74,582 | ||||||
Accumulated other comprehensive income (loss) | (54,414 | ) | 501 | |||||
Total shareholders’ equity | 355,449 | 398,484 | ||||||
Total capitalization | $ | 433,834 | $ | 476,852 |
2
Non-Interest Income
Three months ended | ||||||||||||
March 31, 2022 | December 31, 2021 | March 31, 2021 | ||||||||||
(In thousands) | ||||||||||||
Interchange income | $ | 3,082 | $ | 3,306 | $ | 3,049 | ||||||
Service charges on deposit accounts | 2,957 | 2,992 | 1,916 | |||||||||
Net gains (losses) on assets | ||||||||||||
Mortgage loans | 835 | 5,600 | 12,828 | |||||||||
Securities | 70 | (10 | ) | 1,416 | ||||||||
Mortgage loan servicing, net | 9,641 | 1,269 | 5,167 | |||||||||
Investment and insurance commissions | 738 | 708 | 583 | |||||||||
Bank owned life insurance | 138 | 156 | 139 | |||||||||
Other | 1,487 | 1,750 | 1,308 | |||||||||
Total non-interest income | $ | 18,948 | $ | 15,771 | $ | 26,406 |
Capitalized Mortgage Loan Servicing Rights
Three months ended March 31, | ||||||||
2022 | 2021 | |||||||
(In thousands) | ||||||||
Balance at beginning of period | $ | 26,232 | $ | 16,904 | ||||
Originated servicing rights capitalized | 2,143 | 3,369 | ||||||
Change in fair value | 7,558 | 3,257 | ||||||
Balance at end of period | $ | 35,933 | $ | 23,530 |
3
Mortgage Loan Activity
Three months ended | ||||||||||||
March 31, 2022 | December 31, 2021 | March 31, 2021 | ||||||||||
(Dollars in thousands) | ||||||||||||
Mortgage loans originated | $ | 270,194 | $ | 424,563 | $ | 509,003 | ||||||
Mortgage loans sold | 221,725 | 291,196 | 377,418 | |||||||||
Net gains on mortgage loans | 835 | 5,600 | 12,828 | |||||||||
Net gains as a percent of mortgage loans sold ("Loan Sales Margin") | 0.38 | % | 1.92 | % | 3.40 | % | ||||||
Fair value adjustments included in the Loan Sales Margin | (1.87 | ) | (0.90 | ) | (0.98 | ) |
Non-Interest Expense
Three months ended | ||||||||||||
March 31, 2022 | December 31, 2021 | March 31, 2021 | ||||||||||
(In thousands) | ||||||||||||
Compensation | $ | 12,435 | $ | 11,462 | $ | 10,121 | ||||||
Performance-based compensation | 3,662 | 4,473 | 4,292 | |||||||||
Payroll taxes and employee benefits | 4,033 | 3,970 | 4,109 | |||||||||
Compensation and employee benefits | 20,130 | 19,905 | 18,522 | |||||||||
Occupancy, net | 2,543 | 2,216 | 2,343 | |||||||||
Data processing | 2,216 | 2,851 | 2,374 | |||||||||
Furniture, fixtures and equipment | 1,045 | 1,060 | 1,003 | |||||||||
Interchange expense | 1,011 | 1,083 | 948 | |||||||||
Communications | 757 | 739 | 881 | |||||||||
Advertising | 680 | 599 | 489 | |||||||||
Loan and collection | 559 | 819 | 759 | |||||||||
FDIC deposit insurance | 522 | 413 | 330 | |||||||||
Legal and professional | 493 | 534 | 499 | |||||||||
Amortization of intangible assets | 232 | 243 | 242 | |||||||||
Supplies | 123 | 151 | 174 | |||||||||
Correspondent bank service fees | 77 | 90 | 100 | |||||||||
Conversion related expenses | 44 | 191 | 218 | |||||||||
Provision for loss reimbursement on sold loans | 33 | 38 | 34 | |||||||||
Net gains on other real estate and repossessed assets | (55 | ) | (28 | ) | (180 | ) | ||||||
Costs (recoveries) related to unfunded lending commitments | (355 | ) | 844 | (32 | ) | |||||||
Other | 1,395 | 2,206 | 1,317 | |||||||||
Total non-interest expense | $ | 31,450 | $ | 33,954 | $ | 30,021 |
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Average Balances and Tax Equivalent Rates
Three Months Ended March 31, | ||||||||||||||||||||||||
2022 | 2021 | |||||||||||||||||||||||
Average Balance | Interest | Rate (2) | Average Balance | Interest | Rate (2) | |||||||||||||||||||
(Dollars in thousands) | ||||||||||||||||||||||||
Assets | ||||||||||||||||||||||||
Taxable loans | $ | 2,971,566 | $ | 28,340 | 3.85 | % | $ | 2,827,335 | $ | 28,039 | 4.00 | % | ||||||||||||
Tax-exempt loans (1) | 8,532 | 99 | 4.71 | 6,677 | 84 | 5.10 | ||||||||||||||||||
Taxable securities | 1,080,252 | 4,552 | 1.69 | 782,471 | 2,796 | 1.43 | ||||||||||||||||||
Tax-exempt securities (1) | 326,973 | 2,015 | 2.47 | 311,147 | 1,770 | 2.28 | ||||||||||||||||||
Interest bearing cash | 87,317 | 37 | 0.17 | 101,895 | 29 | 0.12 | ||||||||||||||||||
Other investments | 18,117 | 180 | 4.03 | 18,427 | 188 | 4.14 | ||||||||||||||||||
Interest Earning Assets | 4,492,757 | 35,223 | 3.16 | 4,047,952 | 32,906 | 3.27 | ||||||||||||||||||
Cash and due from banks | 58,676 | 56,371 | ||||||||||||||||||||||
Other assets, net | 169,772 | 149,971 | ||||||||||||||||||||||
Total Assets | $ | 4,721,205 | $ | 4,254,294 | ||||||||||||||||||||
Liabilities | ||||||||||||||||||||||||
Savings and interest- | ||||||||||||||||||||||||
bearing checking | $ | 2,503,014 | 641 | 0.10 | $ | 2,140,405 | 675 | 0.13 | ||||||||||||||||
Time deposits | 338,354 | 126 | 0.15 | 339,872 | 581 | 0.69 | ||||||||||||||||||
Other borrowings | 108,969 | 973 | 3.62 | 108,825 | 962 | 3.59 | ||||||||||||||||||
Interest Bearing Liabilities | 2,950,337 | 1,740 | 0.24 | 2,589,102 | 2,218 | 0.35 | ||||||||||||||||||
Non-interest bearing deposits | 1,317,160 | 1,218,534 | ||||||||||||||||||||||
Other liabilities | 77,698 | 66,547 | ||||||||||||||||||||||
Shareholders’ equity | 376,010 | 380,111 | ||||||||||||||||||||||
Total liabilities and shareholders’ equity | $ | 4,721,205 | $ | 4,254,294 | ||||||||||||||||||||
Net Interest Income | $ | 33,483 | $ | 30,688 | ||||||||||||||||||||
Net Interest Income as a Percent of Average Interest Earning Assets | 3.00 | % | 3.05 | % |
(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, 2022
Total Commercial Loans | ||||||||||||||||||||
All Loans | Watch Credits | Percent of Loan Category in Watch Credit | ||||||||||||||||||
Loan Category | Performing | Non-accrual | Total | |||||||||||||||||
(Dollars in thousands) | ||||||||||||||||||||
Land | $ | 9,878 | $ | 790 | $ | - | $ | 790 | 8.0 | % | ||||||||||
Land Development | 16,421 | 30 | - | 30 | 0.2 | |||||||||||||||
Construction | 74,390 | - | - | - | 0.0 | |||||||||||||||
Income Producing | 396,726 | 1,924 | - | 1,924 | 0.5 | |||||||||||||||
Owner Occupied | 404,607 | 23,329 | - | 23,329 | 5.8 | |||||||||||||||
Total Commercial Real Estate Loans | $ | 902,022 | $ | 26,073 | - | $ | 26,073 | 2.9 | ||||||||||||
Other Commercial Loans | $ | 355,579 | $ | 4,189 | 59 | $ | 4,248 | 1.2 | ||||||||||||
Total non-performing commercial loans | $ | 59 |
Commercial Loan Portfolio Analysis as of December 31, 2021
Total Commercial Loans | ||||||||||||||||||||
Watch Credits | Percent of Loan Category in Watch Credit | |||||||||||||||||||
Loan Category | All Loans | Performing | Non-accrual | Total | ||||||||||||||||
(Dollars in thousands) | ||||||||||||||||||||
Land | $ | 13,621 | $ | 114 | $ | - | $ | 114 | 0.8 | % | ||||||||||
Land Development | 14,854 | 32 | - | 32 | 0.2 | |||||||||||||||
Construction | 67,663 | - | - | - | 0.0 | |||||||||||||||
Income Producing | 402,936 | 2,215 | - | 2,215 | 0.5 | |||||||||||||||
Owner Occupied | 360,614 | 21,960 | - | 21,960 | 6.1 | |||||||||||||||
Total Commercial Real Estate Loans | $ | 859,688 | $ | 24,321 | - | $ | 24,321 | 2.8 | ||||||||||||
Other Commercial Loans | $ | 343,893 | $ | 12,546 | 62 | $ | 12,608 | 3.7 | ||||||||||||
Total non-performing commercial loans | $ | 62 |
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