Exhibit 99.2
INDEPENDENT BANK CORPORATION AND SUBSIDIARIES
Supplemental Data
Non-performing assets (1)
December 31, 2020 | September 30, 2020 | June 30, 2020 | March 31, 2020 | December 31, 2019 | ||||||||||||||||
(Dollars in thousands) | ||||||||||||||||||||
Non-accrual loans | $ | 8,312 | $ | 10,481 | $ | 12,938 | $ | 17,454 | $ | 10,178 | ||||||||||
Loans 90 days or more past due and still accruing interest | - | 266 | �� | 5 | - | - | ||||||||||||||
Subtotal | 8,312 | 10,747 | 12,943 | 17,454 | 10,178 | |||||||||||||||
Less: Government guaranteed loans | 439 | 510 | 604 | 676 | 646 | |||||||||||||||
Total non-performing loans | 7,873 | 10,237 | 12,339 | 16,778 | 9,532 | |||||||||||||||
Other real estate and repossessed assets | 766 | 1,487 | 1,569 | 1,494 | 1,865 | |||||||||||||||
Total non-performing assets | $ | 8,639 | $ | 11,724 | $ | 13,908 | $ | 18,272 | $ | 11,397 | ||||||||||
As a percent of Portfolio Loans | ||||||||||||||||||||
Non-performing loans | 0.29 | % | 0.36 | % | 0.43 | % | 0.62 | % | 0.35 | % | ||||||||||
Allowance for loan losses | 1.30 | 1.25 | 1.20 | 1.20 | 0.96 | |||||||||||||||
Non-performing assets to total assets | 0.21 | 0.28 | 0.34 | 0.50 | 0.32 | |||||||||||||||
Allowance for loan losses as a percent of non-performing loans | 450.01 | 349.43 | 279.60 | 193.68 | 274.32 |
(1) | Excludes loans classified as "trouble debt restructured" that are not past due. |
Troubled debt restructurings ("TDR")
December 31, 2020 | ||||||||||||
Commercial | Retail (1) | Total | ||||||||||
(In thousands) | ||||||||||||
Performing TDR's | $ | 7,956 | $ | 36,385 | $ | 44,341 | ||||||
Non-performing TDR's (2) | 1,148 | 1,584 | (3) | 2,732 | ||||||||
Total | $ | 9,104 | $ | 37,969 | $ | 47,073 |
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. |
1
Allowance for loan losses
Twelve months ended December 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 | 12,463 | - | 824 | - | ||||||||||||
Recoveries credited to allowance | 3,069 | - | 3,961 | - | ||||||||||||
Loans charged against the allowance | (6,251 | ) | - | (3,525 | ) | - | ||||||||||
Additions included in non-interest expense | - | 263 | - | 246 | ||||||||||||
Balance at end of period | $ | 35,429 | $ | 1,805 | $ | 26,148 | $ | 1,542 | ||||||||
Net loans charged against the allowance to average Portfolio Loans | 0.11 | % | (0.02 | )% |
Capitalization
December 31, | ||||||||
2020 | 2019 | |||||||
(In thousands) | ||||||||
Subordinated debt | $ | 39,281 | $ | - | ||||
Subordinated debentures | 39,524 | 39,456 | ||||||
Amount not qualifying as regulatory capital | (505 | ) | (1,224 | ) | ||||
Amount qualifying as regulatory capital | 78,300 | 38,232 | ||||||
Shareholders’ equity | ||||||||
Common stock | 339,353 | 352,344 | ||||||
Retained earnings | 40,145 | 1,611 | ||||||
Accumulated other comprehensive income (loss) | 10,024 | (3,786 | ) | |||||
Total shareholders’ equity | 389,522 | 350,169 | ||||||
Total capitalization | $ | 467,822 | $ | 388,401 |
2
Non-Interest Income
Three months ended | Twelve months ended | |||||||||||||||||||
December 31, | September 30, | December 31, | December 31, | |||||||||||||||||
2020 | 2020 | 2019 | 2020 | 2019 | ||||||||||||||||
(In thousands) | ||||||||||||||||||||
Service charges on deposit accounts | $ | 2,218 | $ | 2,085 | $ | 2,885 | $ | 8,517 | $ | 11,208 | ||||||||||
Interchange income | 2,819 | 3,428 | 2,553 | $ | 11,230 | $ | 10,297 | |||||||||||||
Net gains on assets | ||||||||||||||||||||
Mortgage loans | 15,873 | 20,205 | 6,388 | 62,560 | 19,978 | |||||||||||||||
Securities | 14 | - | 3 | 267 | 307 | |||||||||||||||
Mortgage loan servicing, net | (384 | ) | (644 | ) | 1,348 | (9,350 | ) | (3,336 | ) | |||||||||||
Investment and insurance commissions | 493 | 530 | 461 | 1,971 | 1,658 | |||||||||||||||
Bank owned life insurance | 160 | 215 | 298 | 910 | 1,111 | |||||||||||||||
Other | 1,170 | 1,192 | 1,661 | 4,640 | 6,513 | |||||||||||||||
Total non-interest income | $ | 22,363 | $ | 27,011 | $ | 15,597 | $ | 80,745 | $ | 47,736 |
Capitalized Mortgage Loan Servicing Rights
Three months ended | Twelve months ended | |||||||||||||||
December 31, | December 31, | |||||||||||||||
2020 | 2019 | 2020 | 2019 | |||||||||||||
(In thousands) | ||||||||||||||||
Balance at beginning of period | $ | 15,403 | $ | 16,906 | $ | 19,171 | $ | 21,400 | ||||||||
Originated servicing rights capitalized | 3,697 | 2,539 | 13,957 | 7,303 | ||||||||||||
Change in fair value | (2,196 | ) | (274 | ) | (16,224 | ) | (9,532 | ) | ||||||||
Balance at end of period | $ | 16,904 | $ | 19,171 | $ | 16,904 | $ | 19,171 |
3
Three months ended | Twelve months ended | |||||||||||||||||||
December 31, | September 30, | December 31, | December 31, | |||||||||||||||||
2020 | 2020 | 2019 | 2020 | 2019 | ||||||||||||||||
(Dollars in thousands) | ||||||||||||||||||||
Mortgage loans originated | $ | 502,491 | $ | 536,502 | $ | 302,520 | $ | 1,820,697 | $ | 1,011,141 | ||||||||||
Mortgage loans sold | 388,631 | 417,092 | 248,691 | 1,447,031 | 738,910 | |||||||||||||||
Net gains on mortgage loans | 15,873 | 20,205 | 6,388 | 62,560 | 19,978 | |||||||||||||||
Net gains as a percent of mortgage loans sold ("Loan Sales Margin") | 4.08 | % | 4.84 | % | 2.57 | % | 4.32 | % | 2.70 | % | ||||||||||
Fair value adjustments included in the Loan Sales Margin | (0.53 | ) | 0.50 | (0.38 | ) | 0.47 | 0.22 |
Non-Interest Expense
Three months ended | Twelve months ended | |||||||||||||||||||
December 31, | September 30, | December 31, | December 31, | |||||||||||||||||
2020 | 2020 | 2019 | 2020 | 2019 | ||||||||||||||||
(In thousands) | ||||||||||||||||||||
Compensation | $ | 10,852 | $ | 10,294 | $ | 10,726 | $ | 41,517 | $ | 41,719 | ||||||||||
Performance-based compensation | 5,485 | 8,310 | 4,336 | 19,725 | 12,066 | |||||||||||||||
Payroll taxes and employee benefits | 3,702 | 3,350 | 3,484 | 13,539 | 13,716 | |||||||||||||||
Compensation and employee benefits | 20,039 | 21,954 | 18,546 | 74,781 | 67,501 | |||||||||||||||
Occupancy, net | 2,120 | 2,199 | 2,216 | 8,938 | 9,013 | |||||||||||||||
Data processing | 2,374 | 2,215 | 2,308 | 8,534 | 8,905 | |||||||||||||||
Furniture, fixtures and equipment | 964 | 999 | 1,055 | 4,089 | 4,113 | |||||||||||||||
Interchange expense | 926 | 831 | 883 | 3,342 | 3,215 | |||||||||||||||
Communications | 785 | 806 | 728 | 3,194 | 2,947 | |||||||||||||||
Loan and collection | 708 | 768 | 709 | 3,037 | 2,685 | |||||||||||||||
Conversion related expenses | 1,541 | 643 | - | 2,586 | - | |||||||||||||||
Advertising | 594 | 589 | 515 | 2,230 | 2,450 | |||||||||||||||
Legal and professional fees | 600 | 566 | 533 | 2,027 | 1,814 | |||||||||||||||
FDIC deposit insurance | 385 | 411 | (38 | ) | 1,596 | 685 | ||||||||||||||
Amortization of intangible assets | 255 | 255 | 272 | 1,020 | 1,089 | |||||||||||||||
Supplies | 167 | 126 | 164 | 680 | 638 | |||||||||||||||
Branch closure costs | - | - | 417 | |||||||||||||||||
Correspondent bank service fees | 101 | 101 | 111 | 395 | 411 | |||||||||||||||
Costs (recoveries) related to unfunded lending commitments | (8 | ) | 41 | (95 | ) | 263 | 246 | |||||||||||||
Provision for loss reimbursement on sold loans | 40 | 46 | 50 | 200 | 229 | |||||||||||||||
Net (gains) losses on other real estate and repossessed assets | (82 | ) | 46 | (63 | ) | 64 | (90 | ) | ||||||||||||
Other | 1,198 | 1,045 | 1,409 | 5,020 | 5,882 | |||||||||||||||
Total non-interest expense | $ | 32,707 | $ | 33,641 | $ | 29,303 | $ | 122,413 | $ | 111,733 |
4
Three Months Ended December 31, | ||||||||||||||||||||||||
2020 | 2019 | |||||||||||||||||||||||
Average | Average | |||||||||||||||||||||||
Balance | Interest | Rate (2) | Balance | Interest | Rate (2) | |||||||||||||||||||
(Dollars in thousands) | ||||||||||||||||||||||||
Assets | ||||||||||||||||||||||||
Taxable loans | $ | 2,870,011 | $ | 31,071 | 4.31 | % | $ | 2,767,857 | $ | 33,061 | 4.75 | % | ||||||||||||
Tax-exempt loans (1) | 6,784 | 87 | 5.10 | 8,180 | 100 | 4.85 | ||||||||||||||||||
Taxable securities | 803,322 | 3,299 | 1.64 | 437,087 | 3,031 | 2.77 | ||||||||||||||||||
Tax-exempt securities (1) | 206,256 | 991 | 1.92 | 50,929 | 408 | 3.20 | ||||||||||||||||||
Interest bearing cash | 79,280 | 24 | 0.12 | 38,416 | 163 | 1.68 | ||||||||||||||||||
Other investments | 18,427 | 211 | 4.56 | 18,359 | 249 | 5.38 | ||||||||||||||||||
Interest Earning Assets | 3,984,080 | 35,683 | 3.57 | 3,320,828 | 37,012 | 4.44 | ||||||||||||||||||
Cash and due from banks | 51,497 | 48,095 | ||||||||||||||||||||||
Other assets, net | 159,969 | 160,821 | ||||||||||||||||||||||
Total Assets | $ | 4,195,546 | $ | 3,529,744 | ||||||||||||||||||||
Liabilities | ||||||||||||||||||||||||
Savings and interest-bearing checking | $ | 1,988,438 | 761 | 0.15 | $ | 1,547,860 | 2,441 | 0.63 | ||||||||||||||||
Time deposits | 477,079 | 2,755 | 2.30 | 611,914 | 3,046 | 1.97 | ||||||||||||||||||
Other borrowings | 108,789 | 953 | 3.48 | 92,154 | 711 | 3.06 | ||||||||||||||||||
Interest Bearing Liabilities | 2,574,306 | 4,469 | 0.69 | 2,251,928 | 6,198 | 1.09 | ||||||||||||||||||
Non-interest bearing deposits | 1,167,241 | 880,325 | ||||||||||||||||||||||
Other liabilities | 74,767 | 51,581 | ||||||||||||||||||||||
Shareholders’ equity | 379,232 | 345,910 | ||||||||||||||||||||||
Total liabilities and shareholders’ equity | $ | 4,195,546 | $ | 3,529,744 | ||||||||||||||||||||
Net Interest Income | $ | 31,214 | $ | 30,814 | ||||||||||||||||||||
Net Interest Income as a Percent of Average Interest Earning Assets | 3.12 | % | 3.70 | % |
(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
Twelve Months Ended December 31, | ||||||||||||||||||||||||
2020 | 2019 | |||||||||||||||||||||||
Average | Average | |||||||||||||||||||||||
Balance | Interest | Rate | Balance | Interest | Rate | |||||||||||||||||||
(Dollars in thousands) | ||||||||||||||||||||||||
Assets | ||||||||||||||||||||||||
Taxable loans | $ | 2,863,846 | $ | 122,875 | 4.29 | % | $ | 2,713,690 | $ | 133,574 | 4.92 | % | ||||||||||||
Tax-exempt loans (1) | 7,145 | 360 | 5.04 | 7,937 | 391 | 4.93 | ||||||||||||||||||
Taxable securities | 635,914 | 12,655 | 1.99 | 397,598 | 11,842 | 2.98 | ||||||||||||||||||
Tax-exempt securities (1) | 137,330 | 3,673 | 2.67 | 52,324 | 1,683 | 3.22 | ||||||||||||||||||
Interest bearing cash | 59,056 | 184 | 0.31 | 48,023 | 818 | 1.70 | ||||||||||||||||||
Other investments | 18,410 | 905 | 4.92 | 18,359 | 1,043 | 5.68 | ||||||||||||||||||
Interest Earning Assets | 3,721,701 | 140,652 | 3.78 | 3,237,931 | 149,351 | 4.61 | ||||||||||||||||||
Cash and due from banks | 49,886 | 37,575 | ||||||||||||||||||||||
Other assets, net | 162,068 | 164,726 | ||||||||||||||||||||||
Total Assets | $ | 3,933,655 | $ | 3,440,232 | ||||||||||||||||||||
Liabilities | ||||||||||||||||||||||||
Savings and interest-bearing checking | $ | 1,821,115 | 3,882 | 0.21 | $ | 1,453,061 | 10,228 | 0.70 | ||||||||||||||||
Time deposits | 516,306 | 8,784 | 1.70 | 655,718 | 13,197 | 2.01 | ||||||||||||||||||
Other borrowings | 117,904 | 3,551 | 3.01 | 77,254 | 2,922 | 3.78 | ||||||||||||||||||
Interest Bearing Liabilities | 2,455,325 | 16,217 | 0.66 | 2,186,033 | 26,347 | 1.21 | ||||||||||||||||||
Non-interest bearing deposits | 1,054,230 | 867,314 | ||||||||||||||||||||||
Other liabilities | 65,943 | 46,153 | ||||||||||||||||||||||
Shareholders’ equity | 358,157 | 340,732 | ||||||||||||||||||||||
Total liabilities and shareholders’ equity | $ | 3,933,655 | $ | 3,440,232 | ||||||||||||||||||||
Net Interest Income | $ | 124,435 | $ | 123,004 | ||||||||||||||||||||
Net Interest Income as a Percent of Average Interest Earning Assets | 3.34 | % | 3.80 | % |
(1) | Interest on tax-exempt loans and securities is presented on a fully tax equivalent basis assuming a marginal tax rate of 21%. |
6
Commercial Loan Portfolio Analysis as of December 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 | $ | 14,567 | $ | 116 | $ | - | $ | 116 | 0.8 | % | ||||||||||
Land Development | 12,176 | 36 | - | 36 | 0.3 | |||||||||||||||
Construction | 68,724 | 36 | - | 36 | 0.1 | |||||||||||||||
Income Producing | 358,603 | 3,699 | - | 3,699 | 1.0 | |||||||||||||||
Owner Occupied | 360,510 | 24,693 | 745 | 25,438 | 7.1 | |||||||||||||||
Total Commercial Real Estate Loans | $ | 814,580 | $ | 28,580 | 745 | $ | 29,325 | 3.6 | ||||||||||||
Other Commercial Loans | $ | 427,835 | $ | 16,059 | 695 | $ | 16,754 | 3.9 | ||||||||||||
Total non-performing commercial loans | $ | 1,440 |
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 |
7