Exhibit 99.2
INDEPENDENT BANK CORPORATION AND SUBSIDIARIES
Supplemental Data
Non-performing assets (1) | ||||||||||||||||||||
March 31, 2020 | December 31, 2019 | September 30, 2019 | June 30, 2019 | March 31, 2019 | ||||||||||||||||
(Dollars in thousands) | ||||||||||||||||||||
Non-accrual loans | $ | 17,454 | $ | 10,178 | $ | 7,124 | $ | 7,798 | $ | 8,849 | ||||||||||
Loans 90 days or more past due and still accruing interest | - | - | - | - | - | |||||||||||||||
Total non-accrual loans | 17,454 | 10,178 | 7,124 | 7,798 | 8,849 | |||||||||||||||
Less: Government guaranteed loans | 676 | 646 | 475 | 436 | 617 | |||||||||||||||
Total non-performing loans | 16,778 | 9,532 | 6,649 | 7,362 | 8,232 | |||||||||||||||
Other real estate and repossessed assets | 1,494 | 1,865 | 1,789 | 1,990 | 1,338 | |||||||||||||||
Total non-performing assets | $ | 18,272 | $ | 11,397 | $ | 8,438 | $ | 9,352 | $ | 9,570 | ||||||||||
As a percent of Portfolio Loans | ||||||||||||||||||||
Non-performing loans | 0.62 | % | 0.35 | % | 0.24 | % | 0.27 | % | 0.31 | % | ||||||||||
Allowance for loan losses | 1.20 | 0.96 | 0.96 | 0.96 | 0.96 | |||||||||||||||
Non-performing assets to total assets | 0.50 | 0.32 | 0.24 | 0.27 | 0.28 | |||||||||||||||
Allowance for loan losses as a percent of non-performing loans | 193.68 | 274.32 | 393.26 | 351.85 | 306.78 |
(1) | Excludes loans classified as “trouble debt restructured” that are not past due. |
Troubled debt restructurings (“TDR”) | ||||||||||||
March 31, 2020 | ||||||||||||
Commercial | Retail (1) | Total | ||||||||||
(In thousands) | ||||||||||||
Performing TDR’s | $ | 8,924 | $ | 39,253 | $ | 48,177 | ||||||
Non-performing TDR’s (2) | 264 | 2,095 | (3) | 2,359 | ||||||||
Total | $ | 9,188 | $ | 41,348 | $ | 50,536 |
December 31, 2019 | ||||||||||||
Commercial | Retail (1) | Total | ||||||||||
(In thousands) | ||||||||||||
Performing TDR’s | $ | 7,974 | $ | 39,601 | $ | 47,575 | ||||||
Non-performing TDR’s (2) | 540 | 2,607 | (3) | 3,147 | ||||||||
Total | $ | 8,514 | $ | 42,208 | $ | 50,722 |
(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. |
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Allowance for loan losses | ||||||||||||||||
Three months ended March 31, | ||||||||||||||||
2020 | 2019 | |||||||||||||||
Loans | Unfunded Commitments | Loans | Unfunded Commitments | |||||||||||||
(Dollars in thousands) | ||||||||||||||||
Balance at beginning of period | $ | 26,148 | $ | 1,542 | $ | 24,888 | $ | 1,296 | ||||||||
Additions (deductions) | ||||||||||||||||
Provision for loan losses | 6,721 | - | 664 | - | ||||||||||||
Recoveries credited to allowance | 399 | - | 568 | - | ||||||||||||
Loans charged against the allowance | (773 | ) | - | (866 | ) | - | ||||||||||
Additions included in non-interest expense | - | 119 | - | 160 | ||||||||||||
Balance at end of period | $ | 32,495 | $ | 1,661 | $ | 25,254 | $ | 1,456 | ||||||||
Net loans charged against the allowance to average Portfolio Loans | 0.06 | % | 0.05 | % |
Capitalization | ||||||||
March 31, 2020 | December 31, 2019 | |||||||
(In thousands) | ||||||||
Subordinated debentures | $ | 39,473 | $ | 39,456 | ||||
Amount not qualifying as regulatory capital | (1,224 | ) | (1,224 | ) | ||||
Amount qualifying as regulatory capital | 38,249 | 38,232 | ||||||
Shareholders’ equity | ||||||||
Common stock | 338,528 | 352,344 | ||||||
Retained earnings | 1,944 | 1,611 | ||||||
Accumulated other comprehensive loss | (4,854 | ) | (3,786 | ) | ||||
Total shareholders’ equity | 335,618 | 350,169 | ||||||
Total capitalization | $ | 373,867 | $ | 388,401 |
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Non-Interest Income | ||||||||||||
Three months ended | ||||||||||||
March 31, 2020 | December 31, 2019 | March 31, 2019 | ||||||||||
(In thousands) | ||||||||||||
Service charges on deposit accounts | $ | 2,591 | $ | 2,885 | $ | 2,640 | ||||||
Interchange income | 2,457 | 2,553 | 2,355 | |||||||||
Net gains on assets | ||||||||||||
Mortgage loans | 8,840 | 6,388 | 3,611 | |||||||||
Securities | 253 | 3 | 304 | |||||||||
Mortgage loan servicing, net | (5,300 | ) | 1,348 | (1,215 | ) | |||||||
Investment and insurance commissions | 513 | 461 | 297 | |||||||||
Bank owned life insurance | 270 | 298 | 242 | |||||||||
Other | 1,380 | 1,661 | 1,725 | |||||||||
Total non-interest income | $ | 11,004 | $ | 15,597 | $ | 9,959 |
Capitalized Mortgage Loan Servicing Rights | ||||||||
Three months ended March 31, | ||||||||
2020 | 2019 | |||||||
(In thousands) | ||||||||
Balance at beginning of period | $ | 19,171 | $ | 21,400 | ||||
Servicing rights acquired | - | - | ||||||
Originated servicing rights capitalized | 2,632 | 1,200 | ||||||
Change in fair value | (6,974 | ) | (2,691 | ) | ||||
Balance at end of period | $ | 14,829 | $ | 19,909 |
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Three months ended | ||||||||||||
March 31, 2020 | December 31, 2019 | March 31, 2019 | ||||||||||
(Dollars in thousands) | ||||||||||||
Mortgage loans originated | $ | 311,078 | $ | 302,520 | $ | 137,758 | ||||||
Mortgage loans sold | 262,260 | 248,691 | 154,525 | |||||||||
Net gains on mortgage loans | 8,840 | 6,388 | 3,611 | |||||||||
Net gains as a percent of mortgage loans sold (“Loan Sales Margin”) | 3.37 | % | 2.57 | % | 2.34 | % | ||||||
Fair value adjustments included in the Loan Sales Margin | 0.78 | (0.38 | ) | 0.58 |
Three months ended | ||||||||||||
March 31, 2020 | December 31, 2019 | March 31, 2019 | ||||||||||
(In thousands) | ||||||||||||
Compensation | $ | 10,703 | $ | 10,726 | $ | 10,481 | ||||||
Performance-based compensation | 2,121 | 4,336 | 2,220 | |||||||||
Payroll taxes and employee benefits | 3,685 | 3,484 | 3,650 | |||||||||
Compensation and employee benefits | 16,509 | 18,546 | 16,351 | |||||||||
Occupancy, net | 2,460 | 2,216 | 2,505 | |||||||||
Data processing | 2,355 | 2,308 | 2,144 | |||||||||
Furniture, fixtures and equipment | 1,036 | 1,055 | 1,029 | |||||||||
Interchange expense | 859 | 883 | 688 | |||||||||
Loan and collection | 805 | 709 | 634 | |||||||||
Communications | 803 | 728 | 769 | |||||||||
Advertising | 683 | 515 | 672 | |||||||||
Legal and professional fees | 393 | 533 | 369 | |||||||||
FDIC deposit insurance | 370 | (38 | ) | 368 | ||||||||
Amortization of intangible assets | 255 | 272 | 272 | |||||||||
Supplies | 184 | 164 | 158 | |||||||||
Costs (recoveries) related to unfunded lending commitments | 119 | (95 | ) | 160 | ||||||||
Net (gains) losses on other real estate and repossessed assets | 109 | (63 | ) | 119 | ||||||||
Credit card and bank service fees | 99 | 111 | 103 | |||||||||
Provision for loss reimbursement on sold loans | 37 | 50 | 111 | |||||||||
Other | 1,643 | 1,409 | 1,538 | |||||||||
Total non-interest expense | $ | 28,719 | $ | 29,303 | $ | 27,990 |
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Three Months Ended March 31, | ||||||||||||||||||||||||
2020 | 2019 | |||||||||||||||||||||||
Average Balance | Interest | Rate (2) | Average Balance | Interest | Rate (2) | |||||||||||||||||||
(Dollars in thousands) | ||||||||||||||||||||||||
Assets | ||||||||||||||||||||||||
Taxable loans | $ | 2,758,909 | $ | 31,688 | 4.61 | % | $ | 2,613,182 | $ | 32,600 | 5.03 | % | ||||||||||||
Tax-exempt loans (1) | 7,861 | 97 | 4.96 | 8,689 | 103 | 4.81 | ||||||||||||||||||
Taxable securities | 468,095 | 3,059 | 2.61 | 389,845 | 3,006 | 3.08 | ||||||||||||||||||
Tax-exempt securities (1) | 59,300 | 490 | 3.31 | 56,889 | 469 | 3.30 | ||||||||||||||||||
Interest bearing cash | 38,424 | 128 | 1.34 | 65,213 | 311 | 1.93 | ||||||||||||||||||
Other investments | 18,359 | 238 | 5.21 | 18,359 | 264 | 5.83 | ||||||||||||||||||
Interest Earning Assets | 3,350,948 | 35,700 | 4.28 | 3,152,177 | 36,753 | 4.70 | ||||||||||||||||||
Cash and due from banks | 49,610 | 34,240 | ||||||||||||||||||||||
Other assets, net | 165,271 | 170,586 | ||||||||||||||||||||||
Total Assets | $ | 3,565,829 | $ | 3,357,003 | ||||||||||||||||||||
Liabilities | ||||||||||||||||||||||||
Savings and interest- bearing checking | $ | 1,615,589 | 1,930 | 0.48 | $ | 1,361,057 | 1,486 | 0.44 | ||||||||||||||||
Time deposits | 594,871 | 2,770 | 1.87 | 688,434 | 4,195 | 2.47 | ||||||||||||||||||
Other borrowings | 99,535 | 688 | 2.78 | 66,058 | 712 | 4.37 | ||||||||||||||||||
Interest Bearing Liabilities | 2,309,995 | 5,388 | 0.94 | 2,115,549 | 6,393 | 1.23 | ||||||||||||||||||
Non-interest bearing deposits | 855,838 | 859,605 | ||||||||||||||||||||||
Other liabilities | 51,033 | 40,257 | ||||||||||||||||||||||
Shareholders’ equity | 348,963 | 341,592 | ||||||||||||||||||||||
Total liabilities and | ||||||||||||||||||||||||
shareholders’ equity | $ | 3,565,829 | $ | 3,357,003 | ||||||||||||||||||||
Net Interest Income | $ | 30,312 | $ | 30,360 | ||||||||||||||||||||
Net Interest Income as a Percent of Average Interest Earning Assets | 3.63 | % | 3.88 | % |
(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 |
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Commercial Loan Portfolio Analysis as of March 31, 2020 | ||||||||||||||||||||
Total Commercial Loans | ||||||||||||||||||||
Watch Credits | Percent of Loan | |||||||||||||||||||
Loan Category | All Loans | Performing | Non-accrual | Total | Category in Watch Credit | |||||||||||||||
(Dollars in thousands) | ||||||||||||||||||||
Land | $ | 11,293 | $ | 175 | $ | 735 | $ | 910 | 8.1 | % | ||||||||||
Land Development | 12,710 | - | - | - | 0.0 | |||||||||||||||
Construction | 100,875 | - | - | - | 0.0 | |||||||||||||||
Income Producing | 406,292 | 15,139 | - | 15,139 | 3.7 | |||||||||||||||
Owner Occupied | 333,047 | 24,327 | 7,829 | 32,156 | 9.7 | |||||||||||||||
Total Commercial Real Estate Loans | $ | 864,217 | $ | 39,641 | 8,564 | $ | 48,205 | 5.6 | ||||||||||||
Other Commercial Loans | $ | 317,382 | $ | 22,838 | 530 | $ | 23,368 | 7.4 | ||||||||||||
Total non-performing commercial loans | $ | 9,094 |
Commercial Loan Portfolio Analysis as of December 31, 2019
Total Commercial Loans | ||||||||||||||||||||
Watch Credits | Percent of Loan | |||||||||||||||||||
Loan Category | All Loans | Performing | Non-accrual | Total | Category in Watch Credit | |||||||||||||||
(Dollars in thousands) | ||||||||||||||||||||
Land | $ | 11,235 | $ | 275 | $ | 735 | $ | 1,010 | 9.0 | % | ||||||||||
Land Development | 12,899 | - | - | - | 0.0 | |||||||||||||||
Construction | 97,463 | - | - | - | 0.0 | |||||||||||||||
Income Producing | 409,897 | 15,347 | - | 15,347 | 3.7 | |||||||||||||||
Owner Occupied | 323,694 | 35,485 | 295 | 35,780 | 11.1 | |||||||||||||||
Total Commercial Real Estate Loans | $ | 855,188 | $ | 51,107 | 1,030 | $ | 52,137 | 6.1 | ||||||||||||
Other Commercial Loans | $ | 311,507 | $ | 20,580 | 347 | $ | 20,927 | 6.7 | ||||||||||||
Total non-performing commercial loans | $ | 1,377 |
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