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. |
1
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 |
2
Non-Interest Income
Three months ended | Six months ended | |||||||||||||||||||
June 30, 2022 | March 31, 2022 | June 30, 2021 | June 30, | |||||||||||||||||
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 |
3
Three months ended | Six months ended | |||||||||||||||||||
June 30, 2022 | March 31, 2022 | June 30, 2021 | June 30, | |||||||||||||||||
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, | |||||||||||||||||
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 |
4
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 |
5
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 |
6
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 | ||||||||||||||||
(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 | ||||||||||||||||
(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 |
7