SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT
OF 1934 Date of Report (Date of earliest event reported): October 23, 2001
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INDEPENDENT BANK CORPORATION
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(Exact name of registrant as specified in its charter)
Michigan
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(State or Jurisdiction of Incorporation or Organization)
0-7818 38-2032782
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(Commission File Number) (I.R.S. Employer Identification No.)
230 West Main Street, Ionia, Michigan 48846
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(Address of principal executive offices)
(616) 527-9450
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(Registrant's telephone number, including area code)
NONE
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Former name, address and fiscal year, if changed since last report.
Item 1. Changes in Control of Registrant
Not Applicable
Item 2. Acquisition or Disposition of Assets
Not Applicable
Item 3. Bankruptcy or Receivership
Not Applicable
Item 4. Changes in Registrant's Certifying Accountant
Not Applicable
Item 5. Other Events
Not Applicable
Item 6. Resignations of Registrant's Directors
Not Applicable
Item 7. Financial Statements and Exhibits
Not Applicable
Item 8. Change in Fiscal Year
Not Applicable
Item 9. Regulation FD Disclosure
The information attached at Exhibit A is supplemental data
to the Registrant's press release dated October 23, 2001
regarding its earnings during the quarter ended September
30, 2001.
EXHIBIT A
INDEPENDENT BANK CORPORATION AND SUBSIDIARIES
Consolidated Statements of Financial Condition
September 30, December 31,
2001 2000
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(unaudited)
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(in thousands)
Assets
Cash and due from banks $ 51,744 $ 58,149
Securities available for sale 298,038 217,447
Securities held to maturity 20,098
Federal Home Loan Bank stock, at cost 21,266 19,612
Loans held for sale 37,733 20,817
Loans
Commercial 450,875 381,066
Real estate mortgage 696,196 772,223
Installment 245,693 226,375
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Total Loans 1,392,764 1,379,664
Allowance for loan losses (15,762) (13,982)
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Net Loans 1,377,002 1,365,682
Property and equipment, net 34,339 34,757
Accrued income and other assets 48,035 47,229
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Total Assets $ 1,868,157 $ 1,783,791
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Liabilities and Shareholders' Equity
Deposits
Non-interest bearing $ 151,261 $ 140,945
Savings and NOW 585,153 576,621
Time 635,677 672,334
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Total Deposits 1,372,091 1,389,900
Federal funds purchased 25,700 27,550
Other borrowings 285,704 196,032
Guaranteed preferred beneficial interests in Company's subordinated
debentures 17,250 17,250
Accrued expenses and other liabilities 35,788 24,723
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Total Liabilities 1,736,533 1,655,455
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Shareholders' Equity
Preferred stock, no par value--200,000 shares authorized; none
outstanding
Common stock, $1.00 par value--30,000,000 shares authorized;
issued and outstanding: 11,940,038 shares at September 30, 2001
and 11,609,524 shares at December 31, 2000 11,940 11,610
Capital surplus 84,734 77,255
Retained earnings 34,864 37,544
Accumulated other comprehensive income 86 1,927
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Total Shareholders' Equity 131,624 128,336
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Total Liabilities and Shareholders' Equity $ 1,868,157 $ 1,783,791
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2
INDEPENDENT BANK CORPORATION AND SUBSIDIARIES
Consolidated Statements of Operations
Three Months Ended Nine Months Ended
September 30, September 30,
2001 2000 2001 2000
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(unaudited) (unaudited)
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(in thousands, except per share amounts)
Interest Income
Interest and fees on loans $ 31,606 $ 31,011 $ 94,296 $ 89,121
Securities available for sale
Taxable 2,451 2,013 6,809 5,506
Tax-exempt 1,485 1,353 4,326 4,299
Securities held to maturity
Taxable 543 2,048
Tax-exempt 123 430
Other investments 378 421 1,146 1,201
---------- ----------- ----------- ----------
Total Interest Income 35,920 35,464 106,577 102,605
---------- ----------- ----------- ----------
Interest Expense
Deposits 10,601 13,690 34,960 37,913
Other borrowings 5,007 3,878 13,980 12,082
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Total Interest Expense 15,608 17,568 48,940 49,995
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Net Interest Income 20,312 17,896 57,637 52,610
Provision for loan losses 1,061 657 2,955 2,606
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Net Interest Income After Provision for Loan Losses 19,251 17,239 54,682 50,004
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Non-interest Income
Service charges on deposit accounts 2,808 1,794 6,891 5,005
Net gains on asset sales
Real estate mortgage loans 1,294 631 4,341 1,545
Securities 28 158 12
Other income 2,856 2,524 7,912 7,383
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Total Non-interest Income 6,958 4,977 19,302 13,945
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Non-interest Expense
Salaries and employee benefits 9,585 8,438 27,998 25,127
Occupancy, net 1,229 1,157 3,702 3,454
Furniture and fixtures 1,040 1,064 3,207 3,297
Other expenses 5,624 4,049 14,741 12,302
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Total Non-interest Expense 17,478 14,708 49,648 44,180
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Income Before Federal Income Tax 8,731 7,508 24,336 19,769
Federal income tax expense 2,486 2,049 6,549 5,188
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Net Income Before Cumulative Effect of Change
in Accounting Principle 6,245 5,459 17,787 14,581
Cumulative effect of change in accounting
principle, net of tax (35)
---------- ----------- ----------- ----------
Net Income $ 6,245 $ 5,459 $ 17,752 $ 14,581
========== =========== =========== ==========
Net Income Per Share Before Cumulative
Effect of Change in Accounting Principle
Basic $ .52 $ .44 $ 1.47 $ 1.18
Diluted .51 .44 1.45 1.17
Net Income Per Share
Basic $ .52 $ .44 $ 1.47 $ 1.18
Diluted .51 .44 1.45 1.17
Dividends Per Common Share
Declared $ .15 $ .14 $ .46 $ .41
Paid .15 .14 .45 .41
3
NON-PERFORMING ASSETS
September 30, December 31,
2001 2000
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(dollars in thousands)
Non-accrual loans $4,655 $5,200
Loans 90 days or more past due and
still accruing interest 2,960 1,571
Restructured loans 251 260
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Total non-performing loans 7,866 7,031
Other real estate 2,147 2,174
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Total non-performing assets $10,013 $9,205
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As a percent of Portfolio Loans
Non-performing loans 0.56% 0.51%
Non-performing assets 0.72 0.67
Allowance for loan losses 1.14 1.01
Allowance for loan losses as a percent of
non-performing loans 200 199
ALLOWANCE FOR LOAN LOSSES
Nine months ended
September 30,
2001 2000
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(in thousands)
Balance at beginning of period $13,982 $12,985
Additions (deduction)
Provision charged to operating expense 2,955 2,606
Recoveries credited to allowance 476 489
Loans charged against the allowance (1,651) (2,491)
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Balance at end of period $15,762 $13,589
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Net loans charged against the allowance to
average Portfolio Loans (annualized) 0.11% 0.20%
September 30, 2001 December 31, 2000
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Average Average
Amount Maturity Rate Amount Maturity Rate
------ -------- ---- ------ -------- ----
(dollars in thousands)
Brokered CDs $165,643 2.7 years 4.45% $212,010 3.5 years 6.73%
Fixed rate FHLB advances 135,104 3.6 years 3.61 68,743 7.9 years 6.33
Variable rate FHLB advances 109,500 0.4 years 3.51 114,345 0.2 years 6.69
Federal Funds purchased 25,700 1 day 3.38 27,550 1 day 6.85
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Total $435,947 2.2 years 4.16 $422,648 3.1 years 6.67
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4
CAPITALIZATION
September 30, December 31,
2001 2000
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(in thousands)
Unsecured debt $ 10,500 $ 11,500
Preferred Securities 17,250 17,250
Shareholders' Equity
Preferred stock, no par value
Common Stock, par value $1.00 per share 11,940 11,610
Capital surplus 84,734 77,255
Retained earnings 34,864 37,544
Accumulated other comprehensive income 86 1,927
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Total shareholders' equity 131,624 128,336
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Total capitalization $159,374 $157,086
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NET INTEREST INCOME AND SELECTED RATIOS
Three months Nine months
ended September 30, ended September 30,
2001 2000 2001 2000
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Average earning assets (in thousands) $1,736,140 $1,651,254 $1,688,682 $1,626,867
Tax equivalent net interest income 21,293 18,850 60,461 55,455
As a percent of average earning assets
Tax equivalent interest income 8.46% 8.79% 8.65% 8.65%
Interest expense 3.57 4.23 3.87 4.10
Tax equivalent net interest income 4.89 4.56 4.78 4.55
Average earning assets as a
percent of average assets 94.46% 93.84% 94.11% 93.70%
Free-funds ratio 11.46% 10.06% 10.99% 9.30%
NON-INTEREST INCOME
Three months ended Nine months ended
September 30, September 30,
2001 2000 2001 2000
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(in thousands)
Service charges on deposit accounts $2,808 $1,794 $ 6,891 $ 5,005
Net gains on asset sales
Real estate mortgage loans 1,294 631 4,341 1,545
Securities 28 158 12
Manufactured home loan origination fees
and commissions 613 545 1,642 1,567
Title insurance fees 509 253 1,357 655
Real estate mortgage loan servicing fees 284 367 840 1,115
Mutual fund and annuity commissions 214 281 604 1,023
Other 1,236 1,078 3,469 3,023
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Total non-interest income $6,958 $4,977 $19,302 $13,945
========= ========= ========= =========
5
Three months ended Nine months ended
September 30, September 30,
2001 2000 2001 2000
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(in thousands)
Real estate mortgage loans originated $160,599 $91,649 $468,651 $255,221
Real estate mortgage loan sales 99,385 45,025 293,972 113,915
Securitization of real estate mortgage loans(1) 50,200 50,200
Real estate mortgage loan servicing rights sold 85,885 12,386 256,285 23,379
Net gains on the sale of real estate mortgage loans(1) 1,294 631 4,341 1,545
Net gains as a percent of real estate mortgage
loans sold 0.87% 1.40% 1.26% 1.36%
(1) Net gains on the sale of real estate mortgage loans include
recognition of the servicing asset on securitized real estate mortgage
loans.
NON-INTEREST EXPENSE
Three months ended Nine months ended
September 30, September 30,
2001 2000 2001 2000
--------------- --------------- --------------- --------------
(in thousands)
Salaries $ 6,610 $ 6,071 $19,309 $17,612
Performance-based compensation
and benefits 1,478 1,054 4,420 3,565
Other benefits 1,497 1,313 4,269 3,950
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Salaries and benefits 9,585 8,438 27,998 25,127
Occupancy, net 1,229 1,157 3,702 3,454
Furniture and fixtures 1,040 1,064 3,207 3,297
Data processing 728 530 1,865 1,887
Loan and collection 733 484 1,806 1,127
Advertising 613 451 1,747 1,495
Communications 554 524 1,719 1,618
Supplies 574 374 1,457 1,137
Amortization of intangible assets 426 431 1,278 1,295
Other 1,996 1,255 4,869 3,743
-------------- -------------- -------------- --------------
Total non-interest expense $17,478 $14,708 $49,648 $44,180
============== ============== ============== ==============
6
AVERAGE BALANCE SHEET (IN THOUSANDS)
Three months ended Nine months ended
September 30, September 30,
2001 2001
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Loans and loans held for sale $1,447,137 $1,423,578
Other interest bearing assets 289,003 265,104
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Total interest earning assets 1,736,140 1,688,682
Non interest earning assets 101,908 105,652
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Total assets $1,838,048 $1,794,334
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Deposits $1,060,652 $1,051,723
Brokered CD's 125,673 148,489
Other borrowings 350,894 302,855
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Interest bearing liabilities 1,537,219 1,503,067
Demand deposits 139,520 135,049
Other liabilities 26,873 25,494
Shareholders' equity 134,436 130,724
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Total liabilities and Shareholders' equity $1,838,048 $1,794,334
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7
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
Date October 23, 2001 By s/Robert N. Shuster
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Robert N. Shuster, Principal Financial
Officer
Date October 23, 2001 By s/James J. Twarozynski
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James J. Twarozynski, Principal
Accounting Officer
8