Independent Bank 8K Results of Operations and Financial Condition | IBCP 26 Jul 22

Exhibit 99.2

INDEPENDENT BANK CORPORATION AND SUBSIDIARIES

Supplemental Data

Non-performing assets ⁽¹⁾

	June 30, 2022			March 31, 2022			December 31, 2021			September 30, 2021			June 30, 2021
	(Dollars in thousands)
Non-accrual loans	$	5,859		$	5,893		$	5,545		$	5,917		$	5,531
Loans 90 days or more past due and still accruing interest		-			-			-			-			14
Subtotal		5,859			5,893			5,545			5,917			5,545
Less: Government guaranteed loans		1,360			859			435			327			427
Total non-performing loans		4,499			5,034			5,110			5,590			5,118
Other real estate and repossessed assets		508			438			245			224			296
Total non-performing assets	$	5,007		$	5,472		$	5,355		$	5,814		$	5,414

As a percent of Portfolio Loans
Non-performing loans		0.14	%		0.17	%		0.18	%		0.19	%		0.18	%
Allowance for credit losses		1.47			1.52			1.63			1.62			1.63
Non-performing assets to total assets		0.10			0.11			0.11			0.13			0.12
Allowance for credit losses as a percent of non-performing loans		1,064.30			906.38			924.70			837.19			897.34

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

Troubled debt restructurings ("TDR")

	June 30, 2022
	Commercial		Retail ⁽¹⁾			Total
	(In thousands)
Performing TDR's	$	3,266	$	28,580		$	31,846
Non-performing TDR's ⁽²⁾		-		1,164	⁽³⁾		1,164
Total	$	3,266	$	29,744		$	33,010

	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.

Allowance for credit losses

	Six months ended June 30,
	2022							2021
	Loans			Securities		Unfunded Commitments		Loans			Securities		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		648			158		-		(1,899	)		-		-
Initial allowance on loans purchased with credit deterioration		-					-		134					-
Recoveries credited to allowance		1,274					-		1,434					-
Loans charged against the allowance		(1,291	)				-		(746	)				-
Recoveries included in non-interest expense		-					294		-					(6	)
Balance at end of period	$	47,883		$	158		4,775	$	45,926			-	$	3,268

Net loans charged (recovered) against the allowance to average Portfolio Loans		0.00	%						(0.05	)%

Capitalization

	June 30, 2022			December 31, 2021
	(In thousands)
Subordinated debt	$	39,395		$	39,357
Subordinated debentures		39,626			39,592
Amount not qualifying as regulatory capital		(619	)		(581	)
Amount qualifying as regulatory capital		78,402			78,368
Shareholders’ equity
Common stock		319,885			323,401
Retained earnings		96,252			74,582
Accumulated other comprehensive income (loss)		(85,003	)		501
Total shareholders’ equity		331,134			398,484
Total capitalization	$	409,536		$	476,852

Non-Interest Income

	Three months ended								Six months ended
	June 30, 2022			March 31, 2022		June 30, 2021			June 30,
	June 30, 2022			March 31, 2022		June 30, 2021			2022			2021
	(In thousands)
Interchange income	$	3,422		$	3,082	$	3,453		$	6,504		$	6,502
Service charges on deposit accounts		3,096			2,957		2,318			6,053			4,234
Net gains (losses) on assets
Mortgage loans		1,253			835		9,091			2,088			21,919
Securities		(345	)		70		-			(275	)		1,416
Mortgage loan servicing, net		4,162			9,641		(1,962	)		13,803			3,205
Investment and insurance commissions		682			738		634			1,420			1,217
Bank owned life insurance		105			138		127			243			266
Other		2,257			1,487		1,110			3,744			2,418
Total non-interest income	$	14,632		$	18,948	$	14,771		$	33,580		$	41,177

Capitalized Mortgage Loan Servicing Rights

	Three months ended June 30,					Six months ended June 30,
	2022		2021			2022		2021
	(In thousands)
Balance at beginning of period	$	35,933	$	23,530		$	26,232	$	16,904
Originated servicing rights capitalized		1,505		2,739			3,648		6,108
Change in fair value		2,039		(3,838	)		9,597		(581	)
Balance at end of period	$	39,477	$	22,431		$	39,477	$	22,431

Mortgage Loan Activity

	Three months ended									Six months ended
	June 30, 2022			March 31, 2022			June 30, 2021			June 30,
	June 30, 2022			March 31, 2022			June 30, 2021			2022			2021
	(Dollars in thousands)
Mortgage loans originated	$	317,683		$	270,194		$	473,742		$	587,877		$	982,745
Mortgage loans sold		142,977			221,725			306,789			364,702			684,207
Net gains on mortgage loans		1,253			835			9,091			2,088			21,919
Net gains as a percent of mortgage loans sold ("Loan Sales Margin")		0.88	%		0.38	%		2.96	%		0.57	%		3.20	%
Fair value adjustments included in the Loan Sales Margin		(0.27	)		(1.87	)		(0.08	)		(1.24	)		(0.57	)

Non-Interest Expense

	Three months ended								Six months ended
	June 30, 2022			March 31, 2022			June 30, 2021		June 30,
	June 30, 2022			March 31, 2022			June 30, 2021		2022			2021
	(In thousands)
Compensation	$	12,533		$	12,435		$	11,136	$	24,968		$	21,257
Performance-based compensation		3,776			3,662			4,783		7,438			9,075
Payroll taxes and employee benefits		3,573			4,033			3,964		7,606			8,073
Compensation and employee benefits		19,882			20,130			19,883		40,012			38,405
Data processing		2,644			2,216			2,576		4,860			4,950
Occupancy, net		2,077			2,543			2,153		4,620			4,496
Interchange expense		1,262			1,011			1,201		2,273			2,149
Furniture, fixtures and equipment		1,042			1,045			1,034		2,087			2,037
Communications		762			757			777		1,519			1,658
Advertising		560			680			164		1,240			653
Loan and collection		647			559			859		1,206			1,618
FDIC deposit insurance		457			522			307		979			637
Legal and professional		479			493			522		972			1,021
Amortization of intangible assets		233			232			243		465			485
Costs (recoveries) related to unfunded lending commitments		649			(355	)		26		294			(6	)
Supplies		161			123			170		284			344
Correspondent bank service fees		80			77			115		157			215
Conversion related expenses		6			44			1,143		50			1,361
Provision for loss reimbursement on sold loans		12			33			25		45			59
Net (gains) losses on other real estate and repossessed assets		(141	)		(55	)		6		(196	)		(174	)
Other		1,622			1,395			1,332		3,017			2,649
Total non-interest expense	$	32,434		$	31,450		$	32,536	$	63,884		$	62,557

Average Balances and Tax Equivalent Rates

	Three Months Ended June 30,
	2022							2021
	Average Balance		Interest		Rate ⁽²⁾			Average Balance		Interest		Rate ⁽²⁾
	(Dollars in thousands)
Assets
Taxable loans	$	3,137,369	$	31,383		4.01	%	$	2,852,972	$	28,026		3.94	%
Tax-exempt loans ⁽¹⁾		7,726		90		4.67			6,572		82		5.00
Taxable securities		966,146		4,950		2.05			908,622		3,656		1.61
Tax-exempt securities⁽¹⁾		346,788		2,208		2.55			365,934		2,005		2.19
Interest bearing cash		18,032		29		0.65			71,043		22		0.12
Other investments		17,653		185		4.20			18,427		186		4.05
Interest Earning Assets		4,493,714		38,845		3.47			4,223,570		33,977		3.22
Cash and due from banks		58,497							54,120
Other assets, net		206,749							157,070
Total Assets	$	4,758,960						$	4,434,760

Liabilities
Savings and interest-bearing checking	$	2,534,242		788		0.12		$	2,260,172		689		0.12
Time deposits		354,209		428		0.48			305,390		453		0.59
Other borrowings		116,652		1,087		3.74			108,863		964		3.55
Interest Bearing Liabilities		3,005,103		2,303		0.31			2,674,425		2,106		0.32
Non-interest bearing deposits		1,332,596							1,314,153
Other liabilities		88,651							57,402
Shareholders’ equity		332,610							388,780

Total liabilities and shareholders’ equity	$	4,758,960						$	4,434,760

Net Interest Income			$	36,542						$	31,871

Net Interest Income as a Percent of Average Interest Earning Assets						3.26	%						3.02	%

(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

	Six Months Ended June 30,
	2022							2021
	Average Balance		Interest		Rate ⁽²⁾			Average Balance		Interest		Rate ⁽²⁾
	(Dollars in thousands)
Assets
Taxable loans	$	3,054,925	$	59,723		3.93	%	$	2,840,224	$	56,065		3.98	%
Tax-exempt loans ⁽¹⁾		8,127		189		4.69			6,624		166		5.07
Taxable securities		1,022,884		9,502		1.86			845,895		6,452		1.52
Tax-exempt securities⁽¹⁾		336,935		4,223		2.51			338,692		3,775		2.22
Interest bearing cash		52,483		66		0.25			86,384		51		0.12
Other investments		17,884		365		4.12			18,427		374		4.10
Interest Earning Assets		4,493,238		74,068		3.31			4,136,246		66,883		3.25
Cash and due from banks		58,586							55,239
Other assets, net		188,381							153,540
Total Assets	$	4,740,205						$	4,345,025

Liabilities
Savings and interest-bearing checking	$	2,518,714		1,429		0.11		$	2,200,620		1,364		0.13
Time deposits		346,326		554		0.32			322,535		1,034		0.65
Other borrowings		112,831		2,060		3.68			108,844		1,926		3.58
Interest Bearing Liabilities		2,977,871		4,043		0.27			2,631,999		4,324		0.33
Non-interest bearing deposits		1,324,922							1,266,607
Other liabilities		83,222							61,950
Shareholders’ equity		354,190							384,469

Total liabilities and shareholders’ equity	$	4,740,205						$	4,345,025

Net Interest Income			$	70,025						$	62,559


Net Interest Income as a Percent of Average Interest Earning Assets						3.13	%						3.04	%

(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

Commercial Loan Portfolio Analysis as of June 30, 2022

	Total Commercial Loans
			Watch Credits						Percent of Loan Category in Watch Credit
Loan Category	All Loans		Performing		Non-accrual		Total		Percent of Loan Category in Watch Credit
	(Dollars in thousands)
Land	$	9,722	$	778	$	-	$	778		8.0	%
Land Development		20,559		-		-		-		0.0
Construction		78,574		-		-		-		0.0
Income Producing		411,134		315		-		315		0.1
Owner Occupied		425,307		23,293		-		23,293		5.5
Total Commercial Real Estate Loans	$	945,296	$	24,386		-	$	24,386		2.6

Other Commercial Loans	$	383,902	$	4,614		56	$	4,670		1.2
Total non-performing commercial loans					$	56

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		Percent of Loan Category in Watch Credit
	(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

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