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): January 18, 2002
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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 January 18, 2002
regarding its earnings during the quarter ended December 31,
2001.
INDEPENDENT BANK CORPORATION AND SUBSIDIARIES
Consolidated Statements of Financial Condition
December 31, December 31,
2001 2000
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(unaudited)
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Assets (in thousands)
Cash and due from banks $ 50,525 $ 58,149
Securities available for sale 290,303 217,447
Securities held to maturity 20,098
Federal Home Loan Bank stock, at cost 21,266 19,612
Loans held for sale 77,220 20,817
Loans
Commercial 482,046 381,066
Real estate mortgage 661,462 772,223
Installment 241,176 226,375
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Total Loans 1,384,684 1,379,664
Allowance for loan losses (16,167) (13,982)
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Net Loans 1,368,517 1,365,682
Property and equipment, net 35,944 34,757
Accrued income and other assets 44,682 47,229
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Total Assets $ 1,888,457 $ 1,783,791
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Liabilities and Shareholders' Equity
Deposits
Non-interest bearing $ 160,598 $ 140,945
Savings and NOW 601,949 576,621
Time 624,820 672,334
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Total Deposits 1,387,367 1,389,900
Federal funds purchased 35,100 27,550
Other borrowings 288,010 196,032
Guaranteed preferred beneficial interests in Company's subordinated
debentures 17,250 17,250
Accrued expenses and other liabilities 28,827 24,723
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Total Liabilities 1,756,554 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: 11,864,876 shares at December 31, 2001
and 11,609,524 shares at December 31, 2000 11,865 11,610
Capital surplus 82,512 77,255
Retained earnings 39,355 37,544
Accumulated other comprehensive income (1,829) 1,927
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Total Shareholders' Equity 131,903 128,336
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Total Liabilities and Shareholders' Equity $ 1,888,457 $ 1,783,791
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INDEPENDENT BANK CORPORATION AND SUBSIDIARIES
Consolidated Statements of Operations
Three Months Ended Twelve Months Ended
December 31, December 31,
2001 2000 2001 2000
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(unaudited) (unaudited)
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Interest Income (in thousands, except per share amounts)
Interest and fees on loans $ 30,296 $ 31,581 $ 124,592 $ 120,702
Securities available for sale
Taxable 2,525 2,119 9,334 7,625
Tax-exempt 1,594 1,288 5,920 5,587
Securities held to maturity
Taxable 287 2,335
Tax-exempt 116 546
Other investments 367 419 1,513 1,620
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Total Interest Income 34,782 35,810 141,359 138,415
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Interest Expense
Deposits 9,651 13,860 44,611 51,773
Other borrowings 3,869 4,010 17,849 16,092
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Total Interest Expense 13,520 17,870 62,460 67,865
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Net Interest Income 21,262 17,940 78,899 70,550
Provision for loan losses 782 681 3,737 3,287
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Net Interest Income After Provision for Loan Losses 20,480 17,259 75,162 67,263
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Non-interest Income
Service charges on deposit accounts 3,045 1,852 9,936 6,857
Net gains on asset sales
Real estate mortgage loans 1,965 664 6,306 2,209
Securities 364 (3) 522 9
Other income 2,409 2,503 10,321 9,886
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Total Non-interest Income 7,783 5,016 27,085 18,961
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Non-interest Expense
Salaries and employee benefits 9,908 8,386 37,906 33,513
Occupancy, net 1,264 1,199 4,966 4,653
Furniture and fixtures 1,164 1,085 4,371 4,382
Other expenses 6,542 4,099 21,283 16,401
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Total Non-interest Expense 18,878 14,769 68,526 58,949
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Income Before Federal Income Tax 9,385 7,506 33,721 27,275
Federal income tax expense 2,739 2,078 9,288 7,266
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Net Income Before Cumulative Effect of Change
in Accounting Principle 6,646 5,428 24,433 20,009
Cumulative effect of change in accounting
principle, net of tax (35)
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Net Income $ 6,646 $ 5,428 $ 24,398 $ 20,009
=========== ============ ============ ===========
Net Income Per Share Before Cumulative
Effect of Change in Accounting Principle
Basic $ .56 $ .44 $ 2.03 $ 1.62
Diluted .55 .44 2.00 1.61
Net Income Per Share
Basic $ .56 $ .44 $ 2.03 $ 1.62
Diluted .55 .44 2.00 1.61
Dividends Per Common Share
Declared $ .18 $ .14 $ .64 $ .55
Paid .15 .14 .60 .55
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NON-PERFORMING ASSETS
December 31,
2001 2000
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(dollars in thousands)
Non-accrual loans $5,990 $5,200
Loans 90 days or more past due and
still accruing interest 2,771 1,571
Restructured loans 285 260
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Total non-performing loans 9,046 7,031
Other real estate 1,610 2,174
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Total non-performing assets $10,656 $9,205
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As a percent of Portfolio Loans
Non-performing loans 0.65 % 0.51 %
Non-performing assets 0.77 0.67
Allowance for loan losses 1.17 1.01
Allowance for loan losses as a percent of
non-performing loans 179 199
ALLOWANCE FOR LOAN LOSSES
Twelve months ended
December 31,
2001 2000
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(in thousands)
Balance at beginning of period $13,982 $12,985
Additions (deduction)
Provision charged to operating expense 3,737 3,287
Recoveries credited to allowance 644 678
Loans charged against the allowance (2,196) (2,968)
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Balance at end of period $16,167 $13,982
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Net loans charged against the allowance to
average Portfolio Loans 0.11% 0.17%
December 31, 2001 December 31, 2000
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Average Average
Amount Maturity Rate Amount Maturity Rate
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(dollars in thousands)
Brokered CDs (1) $163,315 1.7 years 3.83% $212,010 3.5 years 6.73%
Fixed rate FHLB advances (1) 129,084 4.1 years 4.08 68,743 7.9 years 6.33
Variable rate FHLB advances (1) 93,000 0.4 years 1.83 114,345 0.2 years 6.69
Securities sold under agreements to
Repurchase (1) 54,963 0.2 years 1.94
Federal Funds purchased 35,100 1 day 1.86 27,550 1 day 6.85
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Total $475,462 1.8 years 3.14 $422,648 3.1 years 6.67
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(1) Certain of these items have had their average maturity and rate altered
through the use of derivative instruments, including pay-fixed and pay-variable
interest rate swaps.
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CAPITALIZATION
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 11,865 11,610
Capital surplus 82,512 77,255
Retained earnings 39,355 37,544
Accumulated other comprehensive income (1,829) 1,927
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Total shareholders' equity 131,903 128,336
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Total capitalization $159,653 $157,086
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NET INTEREST INCOME AND SELECTED RATIOS
Three months Twelve months
ended December 31, ended December 31,
2001 2000 2001 2000
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Average earning assets (in thousands) $1,753,147 $1,650,868 $1,704,909 $1,632,899
Tax equivalent net interest income 22,245 18,838 82,706 74,293
As a percent of average earning assets
Tax equivalent interest income 8.12% 8.85% 8.51% 8.71%
Interest expense 3.06 4.30 3.66 4.16
Tax equivalent net interest income 5.06 4.55 4.85 4.55
Average earning assets as a
percent of average assets 94.46% 93.75% 94.20% 93.71%
Free-funds ratio 12.06% 10.63% 11.27% 9.64%
NON-INTEREST INCOME
Three months ended Twelve months ended
December 31, December 31,
2001 2000 2001 2000
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(in thousands)
Service charges on deposit accounts $3,045 $1,852 $9,936 $6,857
Net gains on asset sales
Real estate mortgage loans 1,965 664 6,306 2,209
Securities 364 (3) 522 9
Manufactured home loan origination fees
and commissions 616 577 2,258 2,144
Title insurance fees 517 257 1,874 912
Real estate mortgage loan servicing fees (7) 375 833 1,490
Mutual fund and annuity commissions 194 176 798 1,199
Other 1,089 1,118 4,558 4,141
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Total non-interest income $7,783 $5,016 $27,085 $18,961
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5
Three months ended Twelve months ended
December 31, December 31,
2001 2000 2001 2000
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(in thousands)
Real estate mortgage loans originated $212,051 $90,179 $680,702 $345,400
Real estate mortgage loan sales 117,026 39,885 410,998 153,800
Real estate mortgage loan servicing rights sold 25,955 12,621 282,240 36,000
Net gains on the sale of real estate mortgage loans 1,965 664 6,306 2,209
Net gains as a percent of real estate mortgage
loans sold 1.68% 1.66% 1.53% 1.44%
NON-INTEREST EXPENSE
Three months ended Twelve months ended
December 31, December 31,
2001 2000 2001 2000
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(in thousands)
Salaries $ 6,817 $ 5,965 $26,126 $23,577
Performance-based compensation
and benefits 1,433 1,209 5,853 4,774
Other benefits 1,658 1,212 5,927 5,162
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Salaries and benefits 9,908 8,386 37,906 33,513
Occupancy, net 1,264 1,199 4,966 4,653
Furniture and fixtures 1,164 1,085 4,371 4,382
Data processing 693 580 2,558 2,467
Loan and collection 942 336 2,748 1,463
Advertising 743 634 2,490 2,129
Communications 556 510 2,275 2,128
Supplies 481 393 1,938 1,530
Amortization of intangible assets 426 433 1,704 1,728
Other 2,701 1,213 7,570 4,956
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Total non-interest expense $18,878 $14,769 $68,526 $58,949
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AVERAGE BALANCE SHEET (IN THOUSANDS)
Three months ended Twelve months ended
December 31, December 31,
2001 2001
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Loans and loans held for sale $1,441,902 $1,428,194
Other interest bearing assets 311,245 276,715
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Total interest earning assets 1,753,147 1,704,909
Non interest earning assets 102,915 104,985
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Total assets $1,856,062 $1,809,894
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Deposits $1,056,364 $1,052,891
Brokered CD's 172,667 154,583
Other borrowings 312,733 305,344
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Interest bearing liabilities 1,541,764 1,512,818
Demand deposits 147,556 138,200
Other liabilities 32,091 27,162
Shareholders' equity 134,651 131,714
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Total liabilities and Shareholders' equity $1,856,062 $1,809,894
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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 January 18, 2002 By /s/Robert N. Shuster
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Robert N. Shuster, Principal Financial
Officer
Date January 18, 2002 By /s/James J. Twarozynski
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James J. Twarozynski, Principal
Accounting Officer
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