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Exhibit 99.2
INDEPENDENT BANK CORPORATION AND SUBSIDIARIES
Supplemental Data
NON-PERFORMING ASSETS
June 30, December 31,
2006 2005
-------- ------------
(dollars in thousands)
Non-accrual loans $18,257 $13,057
Loans 90 days or more past due and
still accruing interest 5,788 4,862
Restructured loans 69 84
------- -------
Total non-performing loans 24,114 18,003
Other real estate 1,911 2,147
------- -------
Total non-performing assets $26,025 $20,150
======= =======
As a percent of Portfolio Loans
Non-performing loans 0.91% 0.70%
Allowance for loan losses 0.92 0.90
Non-performing assets to total assets 0.76 0.60
Allowance for loan losses as a percent of
non-performing loans 102 128
ALLOWANCE FOR LOAN LOSSES
Six months ended
June 30,
---------------------------------------------
2006 2005
--------------------- ---------------------
Loan Unfunded Loan Unfunded
Losses Commitments Losses Commitments
------- ----------- ------- -----------
(in thousands)
Balance at beginning of period $23,035 $ 1,820 $24,737 $1,846
Additions (deduction)
Provision charged to operating expense 4,379 (82) 4,240 (106)
Recoveries credited to allowance 1,242 -- 842
Loans charged against the allowance (4,176) -- (4,099)
------- ------- ------- ------
Balance at end of period $24,480 $ 1,738 $25,720 $1,740
======= ======= ======= ======
Net loans charged against the allowance to
average Portfolio Loans (annualized) 0.22% 0.28%
ALTERNATIVE SOURCES OF FUNDS
June 30, December 31,
2006 2005
----------------------------- -----------------------------
Average Average
Amount Maturity Rate Amount Maturity Rate
---------- --------- ---- ---------- --------- ----
(dollars in thousands)
Brokered CDs(1) $1,064,372 1.8 years 4.37% $1,009,804 1.8 years 3.79%
Fixed rate FHLB advances(1) 48,448 6.0 years 5.75 51,525 6.2 years 5.65
Variable rate FHLB advances(1) 49,000 0.4 years 5.45 25,000 0.5 years 4.18
Securities sold under agreements to
Repurchase(1) 90,022 0.1 years 5.22 137,903 0.1 years 4.41
Federal funds purchased 108,197 1 day 5.44 80,299 1 day 4.23
---------- --------- ---- ---------- --------- ----
Total $1,360,039 1.6 years 4.60% $1,304,531 1.7 years 3.96%
========== ========= ==== ========== ========= ====
(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.
CAPITALIZATION
June 30, December 31,
2006 2005
--------- ------------
(in thousands)
Unsecured debt $ 6,000 $ 7,000
-------- --------
Subordinated debentures 64,197 64,197
Amount not qualifying as regulatory capital (1,847) (1,847)
-------- --------
Amount qualifying as regulatory capital 62,350 62,350
-------- --------
Shareholders' Equity
Preferred stock, no par value
Common stock, par value $1.00 per share 21,862 21,991
Capital surplus 176,109 179,913
Retained earnings 55,691 41,486
Accumulated other comprehensive income 2,852 4,869
-------- --------
Total shareholders' equity 256,514 248,259
-------- --------
Total capitalization $324,864 $317,609
======== ========
NON-INTEREST INCOME
Three months Six months ended
ended June 30, June 30,
----------------- -----------------
2006 2005 2006 2005
------- ------- ------- -------
(in thousands)
Service charges on deposit accounts $ 5,031 $ 5,094 $ 9,499 $ 9,312
Mepco litigation settlement 2,800
Net gains (losses) on asset sales
Real estate mortgage loans 1,188 1,307 2,214 2,695
Securities 171 1,283 171 1,251
Title insurance fees 440 468 882 965
VISA check card interchange income 871 685 1,662 1,307
Bank owned life insurance 401 368 793 757
Manufactured home loan origination fees and
commissions 247 337 486 611
Mutual fund and annuity commissions 351 405 646 697
Real estate mortgage loan servicing 621 174 1,274 1,238
Other 1,524 1,185 2,956 2,374
------- ------- ------- -------
Total non-interest income $10,845 $11,306 $23,383 $21,207
======= ======= ======= =======
REAL ESTATE MORTGAGE LOAN ACTIVITY
Three months ended Six months ended
June 30, June 30,
------------------- -------------------
2006 2005 2006 2005
-------- -------- -------- --------
(in thousands)
Real estate mortgage loans originated $135,783 $186,998 $254,434 $333,960
Real estate mortgage loans sold 73,223 95,955 133,470 183,873
Real estate mortgage loans sold with servicing
rights released 8,936 11,224 16,380 21,522
Net gains on the sale of real estate mortgage loans 1,188 1,307 2,214 2,695
Net gains as a percent of real estate mortgage
loans sold ("Loan Sale Margin") 1.62% 1.36% 1.66% 1.47%
SFAS #133 adjustments included in the Loan
Sale Margin (0.13%) (0.04%) 0.05% 0.01%
CAPITALIZED REAL ESTATE MORTGAGE LOAN SERVICING RIGHTS
Three months Six months
ended ended
June 30, June 30,
----------------- -----------------
2006 2005 2006 2005
------- ------- ------- -------
(in thousands)
Balance at beginning of period $13,728 $12,255 $13,439 $11,360
Originated servicing rights capitalized 760 824 1,394 1,579
Amortization (371) (479) (716) (958)
(Increase)/decrease in impairment reserve 11 (285) 11 334
------- ------- ------- -------
Balance at end of period $14,128 $12,315 $14,128 $12,315
------- ------- ------- -------
Impairment reserve at end of period $ 432 $ 432
======= =======
NON-INTEREST EXPENSE
Three months ended Six months ended
June 30, June 30,
------------------ -----------------
2006 2005 2006 2005
------- ------- ------- -------
(in thousands)
Salaries $ 9,462 $ 8,659 $18,879 $17,038
Performance-based compensation
and benefits 514 1,998 2,294 4,118
Other benefits 2,717 2,520 5,523 5,500
------- ------- ------- -------
Compensation and employee
benefits 12,693 13,177 26,696 26,656
Occupancy, net 2,513 2,103 5,281 4,341
Furniture, fixtures and equipment 1,771 1,715 3,602 3,513
Data processing 1,485 1,247 2,889 2,390
Credit card and bank service fees 1,060 780 2,013 1,402
Advertising 1,055 1,099 2,075 2,078
Loan and collection 1,001 1,128 1,840 2,084
Communications 921 908 1,979 1,984
Amortization of intangible assets 643 694 1,286 1,387
Goodwill impairment 612 612
Supplies 530 614 1,057 1,224
Legal and professional 430 562 992 1,353
Mepco claims expense (100) 1,600
Other 2,232 2,115 3,940 3,932
------- ------- ------- -------
Total non-interest expense $26,846 $26,142 $55,862 $52,344
======= ======= ======= =======
AVERAGE BALANCES AND TAX EQUIVALENT RATES
Three Months Ended
June 30,
-----------------------------------------------------------
2006 2005
---------------------------- ----------------------------
Average Average
Balance Interest Rate Balance Interest Rate
---------- -------- ---- ---------- -------- ----
(dollars in thousands)
Assets
Taxable loans (1) $2,662,414 $52,530 7.91% $2,385,097 $43,909 7.38%
Tax-exempt loans (1, 2) 6,577 115 7.01 6,297 116 7.39
Taxable securities 210,785 2,797 5.32 287,792 3,561 4.96
Tax-exempt securities (2) 248,301 4,498 7.27 255,307 4,316 6.78
Other investments 17,359 199 4.60 17,371 123 2.84
---------- ------- ---------- -------
Interest Earning Assets 3,145,436 60,139 7.66 2,951,864 52,025 7.06
------- -------
Cash and due from banks 52,906 60,411
Other assets, net 210,694 192,126
---------- ----------
Total Assets $3,409,036 $3,204,401
========== ==========
Liabilities
Savings and NOW $ 850,491 3,077 1.45 $ 878,836 1,867 0.85
Time deposits 1,530,668 16,266 4.26 1,180,878 8,797 2.99
Long-term debt 4,495 52 4.64 6,495 74 4.57
Other borrowings 398,925 5,655 5.69 527,237 5,233 3.98
---------- ------- ---------- -------
Interest Bearing Liabilities 2,784,579 25,050 3.61 2,593,446 15,971 2.47
------- -------
Demand deposits 277,340 274,610
Other liabilities 91,716 91,157
Shareholders' equity 255,401 245,188
---------- ----------
Total liabilities and shareholders' equity $3,409,036 $3,204,401
========== ==========
Tax Equivalent Net Interest Income $35,089 $36,054
======= =======
Tax Equivalent Net Interest Income
as a Percent of Earning Assets 4.47% 4.89%
==== ====
(1) All domestic
(2) Interest on tax-exempt loans and securities is presented on a fully tax
equivalent basis assuming a marginal tax rate of 35%
AVERAGE BALANCES AND TAX EQUIVALENT RATES
Six Months Ended
June 30,
-----------------------------------------------------------
2006 2005
---------------------------- ----------------------------
Average Average
Balance Interest Rate Balance Interest Rate
---------- -------- ---- ---------- -------- ----
(dollars in thousands)
Assets
Taxable loans (1) $2,632,889 $102,379 7.82% $2,341,439 $ 85,015 7.30%
Tax-exempt loans (1, 2) 6,237 220 7.11 7,168 238 6.70
Taxable securities 216,082 5,645 5.27 295,994 7,253 4.94
Tax-exempt securities (2) 251,482 9,031 7.24 249,850 8,342 6.73
Other investments 17,398 422 4.89 17,376 335 3.89
---------- -------- ---------- --------
Interest Earning Assets 3,124,088 117,697 7.58 2,911,827 101,183 6.99
-------- --------
Cash and due from banks 54,012 60,545
Other assets, net 207,656 190,418
---------- ----------
Total Assets $3,385,756 $3,162,790
========== ==========
Liabilities
Savings and NOW $ 864,533 6,065 1.41 $ 880,137 3,541 0.81
Time deposits 1,530,228 31,249 4.12 1,137,242 16,297 2.89
Long-term debt 4,743 109 4.63 6,743 154 4.61
Other borrowings 360,862 9,922 5.54 534,398 10,115 3.82
---------- -------- ---------- --------
Interest Bearing Liabilities 2,760,366 47,345 3.46 2,558,520 30,107 2.37
-------- --------
Demand deposits 276,647 273,612
Other liabilities 96,930 89,765
Shareholders' equity 251,813 240,893
---------- ----------
Total liabilities and shareholders' equity $3,385,756 $3,162,790
========== ==========
Tax Equivalent Net Interest Income $ 70,352 $ 71,076
======== ========
Tax Equivalent Net Interest Income
as a Percent of Earning Assets 4.52% 4.91%
==== ====
(1) All domestic
(2) Interest on tax-exempt loans and securities is presented on a fully tax
equivalent basis assuming a marginal tax rate of 35%