8-K
INDEPENDENT BANK CORP /MI/ (IBCP)
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of Report: April 24, 2025
INDEPENDENT BANK CORPORATION
(Exact name of registrant as specified in its charter)
| Michigan | 0-7818 | 38-2032782 | |||
|---|---|---|---|---|---|
| (State or other jurisdiction of incorporation) | (Commission File Number) | (IRS Employer Identification No.) | 4200 East Beltline<br><br>Grand Rapids, Michigan | 49525 | |
| --- | --- | ||||
| (Address of principal executive office) | (Zip Code) |
Registrant’s telephone number,
including area code:
(616) 527-5820
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):
| o | Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
|---|---|
| o | Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
| o | Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
| o | Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
Securities registered pursuant to Section 12(b) of the Act:
| Title of each class | Trading symbol(s) | Name of each exchange on which registered |
|---|---|---|
| Common stock, no par value | IBCP | NASDAQ Global Select Market |
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
Emerging growth company o
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. o
Item 2.02. Results of Operations and Financial Condition
On April 24, 2025, Independent Bank Corporation issued a press release announcing its financial results for the quarter ended March 31, 2025. A copy of the press release is attached as Exhibit 99.1. Attached Exhibit 99.2 contains supplemental data to that press release and attached Exhibit 99.3 contains a slide presentation for our earnings conference call.
The information in this Form 8-K and the attached Exhibits shall not be deemed filed for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, nor shall they be deemed incorporated by reference in any filing under the Securities Act of 1933, as amended, except as shall be expressly set forth by specific reference in such filing.
Item 9.01. Financial Statements and Exhibits
Exhibits.
| 99.1 | Press release dated April 24, 2025. |
|---|---|
| 99.2 | Supplemental data to the Registrant’s press release dated April 24, 2025. |
| 99.3 | Earnings conference call presentation. |
SIGNATURE
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.
| INDEPENDENT BANK CORPORATION | |||
|---|---|---|---|
| (Registrant) | |||
| Date | 4/24/2025 | By | s/Gavin A. Mohr |
| Gavin A. Mohr, Principal Financial Officer |
3
Document
Exhibit 99.1
NEWS RELEASE
Independent Bank Corporation
4200 East Beltline
Grand Rapids, MI 49525
616.527.5820
| For Release: | Immediately |
|---|---|
| Contact: | William B. Kessel, President and CEO, 616.447.3933<br><br>Gavin A. Mohr, Chief Financial Officer, 616.447.3929 |
INDEPENDENT BANK CORPORATION REPORTS 2025 FIRST QUARTER RESULTS
First Quarter Highlights
Highlights for the first quarter of 2025 include:
•Increase in net interest income of $0.8 million (or 1.9% ) over the fourth quarter of 2024;
•Increase in tangible book value per share of $2.43 (13.2%) from March 31, 2024;
•Net growth in core deposits of $9.1 million (or 0.8% annualized) from December 31, 2024;
•Net growth in loans of $33.9 million (or 3.4% annualized) from December 31, 2024; and
•The payment of a 26 cent per share dividend on common stock on February 14, 2025.
GRAND RAPIDS, Mich., April 24, 2025 - Independent Bank Corporation (NASDAQ: IBCP) reported first quarter 2025 net income of $15.6 million, or $0.74 per diluted share, versus net income of $16.0 million, or $0.76 per diluted share, in the prior-year period.
William B. (“Brad”) Kessel, the President and Chief Executive Officer of Independent Bank Corporation, commented: “I am proud of our team and very pleased to see us continue our positive trends with our first quarter 2025 results. Overall loans increased 3.4% (annualized), while core deposits are up 0.8% (annualized). We were able to generate net interest income growth on both a linked quarter basis and on a year over year quarterly basis and produce four basis points in margin expansion. We believe that our expenses continue to be well managed, and we continue to see improved operational scale from strategic investments we have made in recent years. These fundamentals continue to drive positive growth in tangible book value per share (13.2%) compared to the prior year quarter. Our credit metrics continue to be very good, with a low level of watch credits, 14 basis points of non-performing assets to total assets, and 0.01% net charge-offs for the quarter to average loans annualized. The allowance for credit losses, factoring in the recent market uncertainty, was 1.47% of total loans. We are staying in close contact with our client base during this volatile period and keeping abreast of what they are experiencing and how they are adjusting if needed. Based on a robust commercial loan pipeline, the past record of our core group of professionals and the ongoing strategic initiative to add talented bankers to our team, we continue to be focused on what we can control and optimistic on the long-term future of the IBC franchise.”
Significant items impacting comparable first quarter 2025 and 2024 results include the following:
•Changes in the fair value due to price of capitalized mortgage loan servicing rights (the “MSR Changes”) of $(1.5) million ($(0.06) per diluted share, after taxes) for the three-month period ended March 31, 2025, as compared to $1.3 million ($0.05 per diluted share, after taxes) for the three-months ended March 31, 2024.
Operating Results
The Company’s net interest income totaled $43.7 million during the first quarter of 2025, an increase of $3.5 million, or 8.7% from the year-ago period, and an increase of $0.8 million, or 1.9%, from the fourth quarter of 2024. The Company’s tax equivalent net interest income as a percent of average interest-earning assets (the “net interest margin”) was 3.49% during the first quarter of 2025, compared to 3.30% in the year-ago period, and 3.45% in the fourth quarter of 2024. The year-over-year and linked quarterly increase in net interest income was due to an increase in average interest-earning assets and the net interest margin. Average interest-earning assets were $5.08 billion in the first quarter of 2025, compared to $4.91 billion in the year ago quarter and $5.01 billion in the fourth quarter of 2024.
Non-interest income totaled $10.4 million for the first quarter of 2025, compared to $12.6 million in the comparable prior year period. This change was primarily due to variances in mortgage banking related revenues.
Net gains on mortgage loans in the first quarters of 2025 and 2024 were approximately $2.3 million and $1.4 million, respectively. The comparative quarterly increase in net gains on mortgage loans was primarily due to an increase in both gain on sale margin on mortgage loans sold and an increase in the volume of mortgage loans sold.
Mortgage loan servicing, net, generated income (expense) of $(0.6) million and $2.7 million in the first quarters of 2025 and 2024, respectively. The significant variance in mortgage loan servicing, net is primarily due to changes in the fair value of capitalized mortgage loan servicing rights associated with changes in interest rates and the associated expected future prepayment levels and expected float rates as well as a decline in servicing revenue. The decline in servicing revenue is attributed to the sale of approximately $931 million of mortgage servicing rights on January 31, 2025. Capitalized mortgage loan servicing rights totaled $32.2 million and $47.8 million at March 31, 2025 and December 31, 2024, respectively. The decline during the first quarter was primarily attributed to aforementioned mortgage servicing right sale. This transaction was executed in part to reduce the amount of exposure the bank had to rate variances that may impact the mortgage servicing right asset valuation in future periods. While the magnitude of fair value adjustments would also be expected to decrease, those adjustments are dependent upon factors that are harder to predict.
Mortgage loan servicing, net activity is summarized in the following table:
| Three months ended | |||||
|---|---|---|---|---|---|
| 3/31/2025 | 3/31/2024 | ||||
| (In thousands) | |||||
| Mortgage loan servicing, net: | |||||
| Revenue, net | $ | 1,882 | $ | 2,219 | |
| Fair value change due to price | (1,533) | 1,265 | |||
| Fair value change due to pay-downs | (891) | (759) | |||
| Loss on sale of originated servicing rights | (94) | — | |||
| Total | $ | (636) | $ | 2,725 |
Non-interest expenses totaled $34.3 million in the first quarter of 2025, compared to $32.2 million in the year-ago period.
The Company recorded income tax expense of $3.5 million in the first quarter of 2025. This compares to an income tax expense of $3.8 million in the first quarter of 2024. The change in income tax expense principally reflects changes in pre-tax earnings in 2025 relative to 2024.
Asset Quality
A breakdown of non-performing loans by loan type is as follows (1):
| 3/31/2025 | 12/31/2024 | 3/31/2024 | |||||||
|---|---|---|---|---|---|---|---|---|---|
| Loan Type | (Dollars in thousands) | ||||||||
| Commercial | $ | 127 | $ | 54 | $ | 25 | |||
| Mortgage | 8,080 | 7,005 | 4,620 | ||||||
| Installment | 819 | 733 | 710 | ||||||
| Sub total | 9,026 | 7,792 | 5,355 | ||||||
| Less - government guaranteed loans | 1,940 | 1,790 | 1,665 | ||||||
| Total non-performing loans | $ | 7,086 | $ | 6,002 | $ | 3,690 | |||
| Ratio of non-performing loans to total portfolio loans | 0.17 | % | 0.15 | % | 0.10 | % | |||
| Ratio of non-performing assets to total assets | 0.14 | % | 0.13 | % | 0.09 | % | |||
| Ratio of allowance for credit losses to total non-performing loans | 847.23 | % | 989.32 | % | 1526.10 | % |
(1) Non performing loans include non-accrual loans and loans 90 days or more past due and still accruing interest.
The provision for credit losses was an expense of $0.72 million and $0.74 million in the first quarters of 2025 and 2024, respectively. We recorded loan net charge offs of $0.07 million and $0.22 million in the first quarters of 2025 and 2024, respectively. At March 31, 2025, the allowance for credit losses for loans totaled $60.0 million, or 1.47% of total portfolio loans compared to $59.4 million, or 1.47% of total portfolio loans at December 31, 2024.
Balance Sheet, Capital and Liquidity
Total assets were $5.33 billion at March 31, 2025, a decrease of $9.7 million from December 31, 2024. Loans, excluding loans held for sale, were $4.07 billion at March 31, 2025, compared to $4.04 billion at December 31, 2024. Deposits totaled $4.63 billion at March 31, 2025, a decrease of $20.2 million from December 31, 2024. This decrease is primarily due to decreases in non-interest bearing deposits and brokered time deposits that were partially offset by increases in savings and interest-bearing checking, reciprocal and time deposits.
Cash and cash equivalents totaled $128.1 million at March 31, 2025, versus $119.9 million at December 31, 2024. Securities available for sale (“AFS”) totaled $529.7 million at March 31, 2025, versus $559.2 million at December 31, 2024.
Total shareholders’ equity was $467.3 million at March 31, 2025, or 8.77% of total assets compared to $454.7 million or 8.52% at December 31, 2024. Tangible common equity totaled $437.6 million at March 31, 2025, or $20.87 per share compared to $424.9 million or $20.33 per share at December 31, 2024. The increase in shareholder equity as well as tangible common equity are primarily the result of earnings retention and a decrease in accumulated other comprehensive loss.
The Company’s wholly owned subsidiary, Independent Bank, remains significantly above “well capitalized” for regulatory purposes with the following ratios:
| Regulatory Capital Ratios | 3/31/2025 | 12/31/2024 | Well<br>Capitalized<br>Minimum | |||
|---|---|---|---|---|---|---|
| Tier 1 capital to average total assets | 9.56 | % | 9.58 | % | 5.00 | % |
| Tier 1 common equity to risk-weighted assets | 11.93 | % | 11.74 | % | 6.50 | % |
| Tier 1 capital to risk-weighted assets | 11.93 | % | 11.74 | % | 8.00 | % |
| Total capital to risk-weighted assets | 13.19 | % | 12.99 | % | 10.00 | % |
At March 31, 2025, in addition to liquidity available from our normal operating, funding, and investing activities, we had unused credit lines with the FHLB and FRB of approximately $1.10 billion and $486.1 million, respectively. We also had approximately $501.0 million in fair value of unpledged securities AFS and HTM at March 31, 2025 which could be pledged for an estimated additional borrowing capacity at the FHLB and FRB of approximately $469.7 million.
Share Repurchase Plan
On December 17, 2024, the Board of Directors of the Company authorized the 2025 share repurchase plan. Under the terms of the 2025 share repurchase plan, the Company is authorized to purchase up to 1,100,000 shares, or approximately 5% of its then outstanding common stock. The repurchase plan is authorized to last through December 31, 2025. During the three month period ended March 31, 2025, there were 1,093 shares of common stock repurchased, for an aggregate purchase price of $0.03 million. Subsequent to quarter end, from April 3, 2025 through April 22, 2025, there were 249,482 additional shares of common stock repurchased, for an aggregate purchase price of $7.2 million.
Earnings Conference Call
Brad Kessel, President and CEO, Gavin Mohr, CFO and Joel Rahn, EVP – Commercial Banking will review the quarterly results in a conference call for investors and analysts beginning at 11:00 am ET on Thursday, April 24, 2025.
To participate in the live conference call, please dial 1-833-470-1428 (Access Code # 706949). Also, the conference call will be accessible through an audio webcast with user-controlled slides via the following site/URL: https://events.q4inc.com/attendee/106805636.
A playback of the call can be accessed by dialing 1-866-813-9403 (Access Code # 746507). The replay will be available through May 1, 2025.
About Independent Bank Corporation
Independent Bank Corporation (NASDAQ: IBCP) is a Michigan-based bank holding company with total assets of approximately $5.3 billion. Founded as First National Bank of Ionia in 1864, Independent Bank Corporation operates a branch network across Michigan's Lower Peninsula through one state-chartered bank subsidiary. This subsidiary (Independent Bank) provides a full range of financial services, including commercial banking, mortgage lending, consumer banking, investments and insurance. Independent Bank Corporation is committed to providing exceptional personal service and value to its customers, stockholders and the communities it serves.
For more information, please visit our Web site at: IndependentBank.com.
Forward-Looking Statements
This presentation contains forward-looking statements, which are any statements or information that are not historical facts. These forward-looking statements include statements about our anticipated future revenue and expenses and our future plans and prospects.
Forward-looking statements involve inherent risks and uncertainties, and important factors could cause actual results to differ materially from those anticipated. For example, deterioration in general business and economic conditions or turbulence in domestic or global financial markets could adversely affect our revenues and the values of our assets and liabilities, reduce the availability of funding to us, lead to a tightening of credit, and increase stock price volatility. Our results could also be adversely affected by changes in interest rates; increases in unemployment rates; deterioration in the credit quality of our loan portfolios or in the value of the collateral securing those loans; deterioration in the value of our investment securities; legal and regulatory developments; changes in customer behavior and preferences; breaches in data security; and management’s ability to effectively manage the multitude of risks facing our business. Key risk factors that could affect our future results are described in more detail in our Annual Report on Form 10-K for the year ended December 31, 2024 and the other reports we file with the SEC, including under the heading “Risk Factors.” Investors should not place undue reliance on forward-looking statements as a prediction of our future results.
Any forward-looking statement speaks only as of the date on which it is made, and we undertake no obligation to update any forward-looking statement, whether as a result of new information, future events, or otherwise.
INDEPENDENT BANK CORPORATION AND SUBSIDIARIES
Consolidated Statements of Financial Condition
| March 31, 2025 | December 31, 2024 | |||
|---|---|---|---|---|
| (Unaudited) | ||||
| (In thousands, except share<br>amounts) | ||||
| Assets | ||||
| Cash and due from banks | $ | 60,566 | $ | 56,984 |
| Interest bearing deposits | 67,579 | 62,898 | ||
| Cash and Cash Equivalents | 128,145 | 119,882 | ||
| Securities available for sale | 529,676 | 559,182 | ||
| Securities held to maturity (fair value of $302,579 at March 31, 2025 and $301,860 at December 31, 2024) | 336,928 | 339,436 | ||
| Federal Home Loan Bank and Federal Reserve Bank stock, at cost | 15,587 | 16,099 | ||
| Loans held for sale, carried at fair value | 9,514 | 7,643 | ||
| Loans | ||||
| Commercial | 1,992,187 | 1,937,364 | ||
| Mortgage | 1,512,807 | 1,516,726 | ||
| Installment | 567,697 | 584,735 | ||
| Total Loans | 4,072,691 | 4,038,825 | ||
| Allowance for credit losses | (60,035) | (59,379) | ||
| Net Loans | 4,012,656 | 3,979,446 | ||
| Other real estate and repossessed assets, net | 413 | 938 | ||
| Property and equipment, net | 37,369 | 37,492 | ||
| Bank-owned life insurance | 53,721 | 53,855 | ||
| Capitalized mortgage loan servicing rights, carried at fair value | 32,171 | 46,796 | ||
| Other intangibles | 1,366 | 1,488 | ||
| Goodwill | 28,300 | 28,300 | ||
| Accrued income and other assets | 142,582 | 147,547 | ||
| Total Assets | $ | 5,328,428 | $ | 5,338,104 |
| Liabilities and Shareholders' Equity | ||||
| Deposits | ||||
| Non-interest bearing | $ | 989,928 | $ | 1,013,647 |
| Savings and interest-bearing checking | 2,017,800 | 1,995,314 | ||
| Reciprocal | 910,526 | 907,031 | ||
| Time | 635,172 | 628,285 | ||
| Brokered time | 80,505 | 109,811 | ||
| Total Deposits | 4,633,931 | 4,654,088 | ||
| Other borrowings | 45,014 | 45,009 | ||
| Subordinated debt | 39,605 | 39,586 | ||
| Subordinated debentures | 39,813 | 39,796 | ||
| Accrued expenses and other liabilities | 102,788 | 104,939 | ||
| Total Liabilities | 4,861,151 | 4,883,418 | ||
| Shareholders’ Equity | ||||
| Preferred stock, no par value, 200,000 shares authorized; none issued or outstanding | — | — | ||
| Common stock, no par value, 500,000,000 shares authorized; issued and outstanding: 20,970,115 shares at March 31, 2025 and 20,895,714 shares at December 31, 2024 | 318,365 | 318,777 | ||
| Retained earnings | 215,995 | 205,853 | ||
| Accumulated other comprehensive loss | (67,083) | (69,944) | ||
| Total Shareholders’ Equity | 467,277 | 454,686 | ||
| Total Liabilities and Shareholders’ Equity | $ | 5,328,428 | $ | 5,338,104 |
INDEPENDENT BANK CORPORATION AND SUBSIDIARIES
Consolidated Statements of Operations
| Three Months Ended | ||||||
|---|---|---|---|---|---|---|
| March 31,<br>2025 | December 31, 2024 | March 31,<br>2024 | ||||
| (Unaudited) | ||||||
| Interest Income | (In thousands, except per share amounts) | |||||
| Interest and fees on loans | $ | 57,768 | $ | 58,346 | $ | 55,043 |
| Interest on securities | ||||||
| Taxable | 4,036 | 4,417 | 5,251 | |||
| Tax-exempt | 2,770 | 2,905 | 3,391 | |||
| Other investments | 1,570 | 1,310 | 1,441 | |||
| Total Interest Income | 66,144 | 66,978 | 65,126 | |||
| Interest Expense | ||||||
| Deposits | 20,955 | 22,546 | 22,810 | |||
| Other borrowings and subordinated debt and debentures | 1,504 | 1,581 | 2,119 | |||
| Total Interest Expense | 22,459 | 24,127 | 24,929 | |||
| Net Interest Income | 43,685 | 42,851 | 40,197 | |||
| Provision for credit losses | 721 | 2,217 | 744 | |||
| Net Interest Income After Provision for Credit Losses | 42,964 | 40,634 | 39,453 | |||
| Non-interest Income | ||||||
| Interchange income | 3,127 | 3,294 | 3,151 | |||
| Service charges on deposit accounts | 2,814 | 2,976 | 2,872 | |||
| Net gains (losses) on assets | ||||||
| Mortgage loans | 2,303 | 1,705 | 1,364 | |||
| Securities available for sale | (330) | (14) | (269) | |||
| Mortgage loan servicing, net | (636) | 7,761 | 2,725 | |||
| Other | 3,146 | 3,399 | 2,718 | |||
| Total Non-interest Income | 10,424 | 19,121 | 12,561 | |||
| Non-interest Expense | ||||||
| Compensation and employee benefits | 20,383 | 22,886 | 20,770 | |||
| Data processing | 3,729 | 3,688 | 3,255 | |||
| Occupancy, net | 2,223 | 1,953 | 2,074 | |||
| Interchange expense | 1,119 | 1,131 | 1,097 | |||
| Furniture, fixtures and equipment | 885 | 928 | 954 | |||
| Advertising | 861 | 1,198 | 491 | |||
| Loan and collection | 786 | 606 | 512 | |||
| FDIC deposit insurance | 711 | 729 | 782 | |||
| Communications | 591 | 462 | 615 | |||
| Legal and professional | 479 | 849 | 486 | |||
| Costs (recoveries) related to unfunded lending commitments | 196 | 303 | (652) | |||
| Other | 2,299 | 2,254 | 1,809 | |||
| Total Non-interest Expense | 34,262 | 36,987 | 32,193 | |||
| Income Before Income Tax | 19,126 | 22,768 | 19,821 | |||
| Income tax expense | 3,536 | 4,307 | 3,830 | |||
| Net Income | $ | 15,590 | $ | 18,461 | $ | 15,991 |
| Net Income Per Common Share | ||||||
| Basic | $ | 0.74 | $ | 0.88 | $ | 0.77 |
| Diluted | $ | 0.74 | $ | 0.87 | $ | 0.76 |
INDEPENDENT BANK CORPORATION AND SUBSIDIARIES
Selected Financial Data
| March 31,<br>2025 | December 31,<br>2024 | September 30,<br>2024 | June 30,<br>2024 | March 31,<br>2024 | |||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| (unaudited) | |||||||||||||||
| (Dollars in thousands except per share data) | |||||||||||||||
| Three Months Ended | |||||||||||||||
| Net interest income | $ | 43,685 | $ | 42,851 | $ | 41,854 | $ | 41,346 | $ | 40,197 | |||||
| Provision for credit losses | 721 | 2,217 | 1,488 | 19 | 744 | ||||||||||
| Non-interest income | 10,424 | 19,121 | 9,508 | 15,172 | 12,561 | ||||||||||
| Non-interest expense | 34,262 | 36,987 | 32,583 | 33,333 | 32,193 | ||||||||||
| Income before income tax | 19,126 | 22,768 | 17,291 | 23,166 | 19,821 | ||||||||||
| Income tax expense | 3,536 | 4,307 | 3,481 | 4,638 | 3,830 | ||||||||||
| Net income | $ | 15,590 | $ | 18,461 | $ | 13,810 | $ | 18,528 | $ | 15,991 | |||||
| Basic earnings per share | $ | 0.74 | $ | 0.88 | $ | 0.66 | $ | 0.89 | $ | 0.77 | |||||
| Diluted earnings per share | 0.74 | 0.87 | 0.65 | 0.88 | 0.76 | ||||||||||
| Cash dividend per share | 0.26 | 0.24 | 0.24 | 0.24 | 0.24 | ||||||||||
| Average shares outstanding | 20,943,094 | 20,893,820 | 20,896,019 | 20,901,741 | 20,877,067 | ||||||||||
| Average diluted shares outstanding | 21,150,550 | 21,122,096 | 21,115,273 | 21,105,387 | 21,079,607 | ||||||||||
| Performance Ratios | |||||||||||||||
| Return on average assets | 1.18 | % | 1.39 | % | 1.04 | % | 1.44 | % | 1.24 | % | |||||
| Return on average equity | 13.71 | 16.31 | 12.54 | 17.98 | 15.95 | ||||||||||
| Efficiency ratio (1) | 62.20 | 59.09 | 62.82 | 61.49 | 60.26 | ||||||||||
| As a Percent of Average Interest-Earning Assets (1) | |||||||||||||||
| Interest income | 5.28 | % | 5.37 | % | 5.48 | % | 5.45 | % | 5.34 | % | |||||
| Interest expense | 1.79 | 1.92 | 2.11 | 2.05 | 2.04 | ||||||||||
| Net interest income | 3.49 | 3.45 | 3.37 | 3.40 | 3.30 | ||||||||||
| Average Balances | |||||||||||||||
| Loans | $ | 4,060,941 | $ | 3,994,661 | $ | 3,909,954 | $ | 3,849,199 | $ | 3,810,526 | |||||
| Securities | 883,676 | 912,073 | 933,750 | 944,435 | 999,140 | ||||||||||
| Total earning assets | 5,078,596 | 5,007,566 | 4,985,842 | 4,893,367 | 4,910,669 | ||||||||||
| Total assets | 5,378,022 | 5,300,368 | 5,275,623 | 5,181,317 | 5,201,452 | ||||||||||
| Deposits | 4,715,331 | 4,655,091 | 4,616,119 | 4,531,917 | 4,561,645 | ||||||||||
| Interest bearing liabilities | 3,799,852 | 3,717,483 | 3,689,684 | 3,611,972 | 3,627,446 | ||||||||||
| Shareholders' equity | 461,291 | 450,214 | 438,077 | 414,549 | 403,225 |
(1)Presented on a fully tax equivalent basis assuming a marginal tax rate of 21%.
INDEPENDENT BANK CORPORATION AND SUBSIDIARIES
Selected Financial Data (continued)
| March 31,<br>2025 | December 31,<br>2024 | September 30,<br>2024 | June 30,<br>2024 | March 31,<br>2024 | |||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| (unaudited) | |||||||||||||||
| (Dollars in thousands except per share data) | |||||||||||||||
| End of Period | |||||||||||||||
| Capital | |||||||||||||||
| Tangible common equity ratio | 8.26 | % | 8.00 | % | 8.08 | % | 7.63 | % | 7.41 | % | |||||
| Tangible common equity ratio excluding accumulated other comprehensive loss | 9.31 | 9.10 | 8.99 | 8.76 | 8.57 | ||||||||||
| Average equity to average assets | 8.58 | 8.49 | 8.30 | 8.00 | 7.75 | ||||||||||
| Total capital to risk-weighted assets (2) | 14.51 | 14.22 | 14.25 | 14.21 | 13.85 | ||||||||||
| Tier 1 capital to risk-weighted assets (2) | 12.34 | 12.06 | 12.06 | 12.01 | 11.65 | ||||||||||
| Common equity tier 1 capital to risk-weighted assets (2) | 11.46 | 11.17 | 11.16 | 11.09 | 10.73 | ||||||||||
| Tier 1 capital to average assets (2) | 9.88 | 9.85 | 9.63 | 9.59 | 9.29 | ||||||||||
| Common shareholders' equity per share of common stock | $ | 22.28 | $ | 21.76 | $ | 21.65 | $ | 20.60 | $ | 19.88 | |||||
| Tangible common equity per share of common stock | 20.87 | 20.33 | 20.22 | 19.16 | 18.44 | ||||||||||
| Total shares outstanding | 20,970,115 | 20,895,714 | 20,893,800 | 20,899,358 | 20,903,677 | ||||||||||
| Selected Balances | |||||||||||||||
| Loans | $ | 4,072,691 | $ | 4,038,825 | $ | 3,942,287 | $ | 3,851,889 | $ | 3,839,965 | |||||
| Securities | 866,604 | 898,618 | 932,312 | 936,194 | 963,577 | ||||||||||
| Total earning assets | 5,031,975 | 5,024,083 | 4,964,784 | 4,979,555 | 4,949,496 | ||||||||||
| Total assets | 5,328,428 | 5,338,104 | 5,259,268 | 5,277,500 | 5,231,255 | ||||||||||
| Deposits | 4,633,931 | 4,654,088 | 4,626,875 | 4,614,328 | 4,582,414 | ||||||||||
| Interest bearing liabilities | 3,768,435 | 3,764,832 | 3,682,482 | 3,694,025 | 3,677,060 | ||||||||||
| Shareholders' equity | 467,277 | 454,686 | 452,369 | 430,459 | 415,570 |
(2)March 31, 2025 are Preliminary.
Reconciliation of Non-GAAP Financial Measures
Independent Bank Corporation
Independent Bank Corporation believes non-GAAP measures are meaningful because they reflect adjustments commonly made by management, investors, regulators and analysts to evaluate the adequacy of common equity and performance trends. Tangible common equity is used by the Company to measure the quality of capital.
Reconciliation of Non-GAAP Financial Measures
| Three Months Ended March 31, | |||||||
|---|---|---|---|---|---|---|---|
| 2025 | 2024 | ||||||
| (Dollars in thousands) | |||||||
| Net Interest Margin, Fully Taxable Equivalent ("FTE") | |||||||
| Net interest income | $ | 43,685 | $ | 40,197 | |||
| Add: taxable equivalent adjustment | 452 | 180 | |||||
| Net interest income - taxable equivalent | $ | 44,137 | $ | 40,377 | |||
| Net interest margin (GAAP) (1) | 3.46 | % | 3.28 | % | |||
| Net interest margin (FTE) (1) | 3.49 | % | 3.30 | % |
(1)Annualized.
Tangible Common Equity Ratio
| March 31,<br>2025 | December 31, 2024 | September 30, 2024 | June 30, 2024 | March 31, 2024 | |||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| (Dollars in thousands) | |||||||||||||||
| Common shareholders' equity | $ | 467,277 | $ | 454,686 | $ | 452,369 | $ | 430,459 | $ | 415,570 | |||||
| Less: | |||||||||||||||
| Goodwill | 28,300 | 28,300 | 28,300 | 28,300 | 28,300 | ||||||||||
| Other intangibles | 1,366 | 1,488 | 1,617 | 1,746 | 1,875 | ||||||||||
| Tangible common equity | 437,611 | 424,898 | 422,452 | 400,413 | 385,395 | ||||||||||
| Addition: | |||||||||||||||
| Accumulated other comprehensive loss for regulatory purposes | 61,285 | 64,146 | 52,454 | 65,030 | 65,831 | ||||||||||
| Tangible common equity excluding accumulated other comprehensive loss adjustments | $ | 498,896 | $ | 489,044 | $ | 474,906 | $ | 465,443 | $ | 451,226 | |||||
| Total assets | $ | 5,328,428 | $ | 5,338,104 | $ | 5,259,268 | $ | 5,277,500 | $ | 5,231,255 | |||||
| Less: | |||||||||||||||
| Goodwill | 28,300 | 28,300 | 28,300 | 28,300 | 28,300 | ||||||||||
| Other intangibles | 1,366 | 1,488 | 1,617 | 1,746 | 1,875 | ||||||||||
| Tangible assets | 5,298,762 | 5,308,316 | 5,229,351 | 5,247,454 | 5,201,080 | ||||||||||
| Addition: | |||||||||||||||
| Net unrealized losses on available for sale securities and derivatives, net of tax | 61,285 | 64,146 | 52,454 | 65,030 | 65,831 | ||||||||||
| Tangible assets excluding accumulated other comprehensive loss adjustments | $ | 5,360,047 | $ | 5,372,462 | $ | 5,281,805 | $ | 5,312,484 | $ | 5,266,911 | |||||
| Common equity ratio | 8.77 | % | 8.52 | % | 8.60 | % | 8.16 | % | 7.94 | % | |||||
| Tangible common equity ratio | 8.26 | % | 8.00 | % | 8.08 | % | 7.63 | % | 7.41 | % | |||||
| Tangible common equity ratio excluding accumulated other comprehensive loss | 9.31 | % | 9.10 | % | 8.99 | % | 8.76 | % | 8.57 | % | |||||
| Tangible Common Equity per Share of Common Stock: | |||||||||||||||
| Common shareholders' equity | $ | 467,277 | $ | 454,686 | $ | 452,369 | $ | 430,459 | $ | 415,570 | |||||
| Tangible common equity | $ | 437,611 | $ | 424,898 | $ | 422,452 | $ | 400,413 | $ | 385,395 | |||||
| Shares of common stock outstanding (in thousands) | 20,970 | 20,896 | 20,894 | 20,899 | 20,904 | ||||||||||
| Common shareholders' equity per share of common stock | $ | 22.28 | $ | 21.76 | $ | 21.65 | $ | 20.60 | $ | 19.88 | |||||
| Tangible common equity per share of common stock | $ | 20.87 | $ | 20.33 | $ | 20.22 | $ | 19.16 | $ | 18.44 |
The tangible common equity ratio removes the effect of goodwill and other intangible assets from capital and total assets. Tangible common equity per share of common stock removes the effect of goodwill and other intangible assets from common shareholders’ equity per share of common stock.
9
Document
Exhibit 99.2
INDEPENDENT BANK CORPORATION AND SUBSIDIARIES
Supplemental Data
Non-performing assets
| March 31, 2025 | December 31, 2024 | September 30, 2024 | June 30, 2024 | March 31, 2024 | |||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| (Dollars in thousands) | |||||||||||||||
| Non-accrual loans | $ | 9,026 | $ | 7,792 | $ | 7,250 | $ | 5,974 | $ | 5,355 | |||||
| Loans 90 days or more past due and still accruing interest | — | — | — | — | — | ||||||||||
| Subtotal | 9,026 | 7,792 | 7,250 | 5,974 | 5,355 | ||||||||||
| Less: Government guaranteed loans | 1,940 | 1,790 | 2,102 | 1,489 | 1,665 | ||||||||||
| Total non-performing loans | 7,086 | 6,002 | 5,148 | 4,485 | 3,690 | ||||||||||
| Other real estate and repossessed assets | 413 | 938 | 781 | 945 | 1,059 | ||||||||||
| Total non-performing assets | $ | 7,499 | $ | 6,940 | $ | 5,929 | $ | 5,430 | $ | 4,749 | |||||
| As a percent of Portfolio Loans | |||||||||||||||
| Non-performing loans | 0.17 | % | 0.15 | % | 0.13 | % | 0.12 | % | 0.10 | % | |||||
| Allowance for credit losses | 1.47 | 1.47 | 1.46 | 1.46 | 1.47 | ||||||||||
| Non-performing assets to total assets | 0.14 | 0.13 | 0.11 | 0.10 | 0.09 | ||||||||||
| Allowance for credit losses as a percent of non-performing loans | 847.23 | 989.32 | 1,115.85 | 1,253.98 | 1,526.10 |
Allowance for credit losses
| Three months ended March 31, | ||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| 2025 | 2024 | |||||||||||||
| Loans | Securities | Unfunded<br>Commitments | Loans | Securities | Unfunded<br>Commitments | |||||||||
| (Dollars in thousands) | ||||||||||||||
| Balance at beginning of period | $ | 59,379 | $ | 132 | $ | 5,131 | $ | 54,658 | $ | 157 | $ | 5,504 | ||
| Additions (deductions) | ||||||||||||||
| Provision for credit losses | 724 | (3) | — | 1,871 | (1,127) | — | ||||||||
| Recoveries credited to allowance | 550 | — | — | 596 | 1,125 | — | ||||||||
| Assets charged against the allowance | (618) | — | — | (812) | — | — | ||||||||
| Additions included in non-interest expense | — | — | 196 | — | — | (652) | ||||||||
| Balance at end of period | $ | 60,035 | $ | 129 | $ | 5,327 | $ | 56,313 | $ | 155 | $ | 4,852 | ||
| Net loans charged (recovered) against the allowance to average Portfolio Loans | 0.01 | % | 0.02 | % | ||||||||||
| 1 | ||||||||||||||
| --- |
Capitalization
| March 31, 2025 | December 31, 2024 | |||
|---|---|---|---|---|
| (In thousands) | ||||
| Subordinated debt | $ | 39,605 | $ | 39,586 |
| Subordinated debentures | 39,813 | 39,796 | ||
| Amount not qualifying as regulatory capital | (829) | (810) | ||
| Amount qualifying as regulatory capital | 78,589 | 78,572 | ||
| Shareholders’ equity | ||||
| Common stock | 318,365 | 318,777 | ||
| Retained earnings | 215,995 | 205,853 | ||
| Accumulated other comprehensive income (loss) | (67,083) | (69,944) | ||
| Total shareholders’ equity | 467,277 | 454,686 | ||
| Total capitalization | $ | 545,866 | $ | 533,258 |
Non-Interest Income
| Three months ended | ||||||
|---|---|---|---|---|---|---|
| March 31, 2025 | December 31, 2024 | March 31, 2024 | ||||
| (In thousands) | ||||||
| Interchange income | $ | 3,127 | $ | 3,294 | $ | 3,151 |
| Service charges on deposit accounts | 2,814 | 2,976 | 2,872 | |||
| Net gains (losses) on assets | ||||||
| Mortgage loans | 2,303 | 1,705 | 1,364 | |||
| Equity securities at fair value | — | — | — | |||
| Securities | (330) | (14) | (269) | |||
| Mortgage loan servicing, net | (636) | 7,761 | 2,725 | |||
| Investment and insurance commissions | 754 | 744 | 804 | |||
| Bank owned life insurance | 297 | 268 | 181 | |||
| Other | 2,095 | 2,387 | 1,733 | |||
| Total non-interest income | $ | 10,424 | $ | 19,121 | $ | 12,561 |
Capitalized Mortgage Loan Servicing Rights
| Three months ended March 31, | |||||
|---|---|---|---|---|---|
| 2025 | 2024 | ||||
| (In thousands) | |||||
| Balance at beginning of period | $ | 46,796 | $ | 42,243 | |
| Originated servicing rights capitalized | 855 | 828 | |||
| Change in fair value | (2,424) | 506 | |||
| Sale of originated servicing rights (1) | (12,962) | — | |||
| Loss on sale of originated servicing rights (1) | (94) | — | |||
| Balance at end of period | $ | 32,171 | $ | 43,577 |
(1) On January 31, 2025 we sold $931.6 million of mortgage loan servicing rights (26.3% of total servicing portfolio) and transferred the servicing on March 3, 2025. This sale represented approximately $13.1 million (27.9%) of the total capitalized mortgage loan servicing right asset.
| 2 |
|---|
Mortgage Loan Activity
| Three months ended | |||||||||
|---|---|---|---|---|---|---|---|---|---|
| March 31, 2025 | December 31, 2024 | March 31, 2024 | |||||||
| (Dollars in thousands) | |||||||||
| Mortgage loans originated | $ | 107,779 | $ | 134,144 | $ | 93,994 | |||
| Mortgage loans sold | 82,618 | 106,222 | 80,818 | ||||||
| Net gains on mortgage loans | 2,303 | 1,705 | 1,364 | ||||||
| Net gains as a percent of mortgage loans sold ("Loan Sales Margin") | 2.79 | % | 1.61 | % | 1.69 | % | |||
| Fair value adjustments included in the Loan Sales Margin | 0.88 | % | (0.32) | % | 0.48 | % |
Non-Interest Expense
| Three months ended | ||||||
|---|---|---|---|---|---|---|
| March 31, 2025 | December 31, 2024 | March 31, 2024 | ||||
| (In thousands) | ||||||
| Compensation | $ | 13,197 | $ | 13,458 | $ | 13,277 |
| Performance-based compensation | 3,441 | 5,351 | 3,476 | |||
| Payroll taxes and employee benefits | 3,745 | 4,077 | 4,017 | |||
| Compensation and employee benefits | 20,383 | 22,886 | 20,770 | |||
| Data processing | 3,729 | 3,688 | 3,255 | |||
| Occupancy, net | 2,223 | 1,953 | 2,074 | |||
| Interchange expense | 1,119 | 1,131 | 1,097 | |||
| Furniture, fixtures and equipment | 885 | 928 | 954 | |||
| Advertising | 861 | 1,198 | 491 | |||
| Loan and collection | 786 | 606 | 512 | |||
| FDIC deposit insurance | 711 | 729 | 782 | |||
| Communications | 591 | 462 | 615 | |||
| Legal and professional | 479 | 849 | 486 | |||
| Taxes, licenses and fees | 326 | 311 | 261 | |||
| Director fees | 232 | 240 | 237 | |||
| Costs (recoveries) related to unfunded lending commitments | 196 | 303 | (652) | |||
| Amortization of intangible assets | 122 | 129 | 129 | |||
| Provision for loss reimbursement on sold loans | (11) | 2 | 3 | |||
| Net (gains) losses on other real estate and repossessed assets | (66) | — | (76) | |||
| Other | 1,696 | 1,572 | 1,255 | |||
| Total non-interest expense | $ | 34,262 | $ | 36,987 | $ | 32,193 |
| 3 | ||||||
| --- |
Average Balances and Tax Equivalent Rates
| Three Months Ended March 31, | ||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|
| 2025 | 2024 | |||||||||||
| Average<br>Balance | Interest | Rate (2) | Average<br>Balance | Interest | Rate (2) | |||||||
| (Dollars in thousands) | ||||||||||||
| Assets | ||||||||||||
| Taxable loans | $ | 4,053,593 | $ | 57,685 | 5.74 | % | $ | 3,801,985 | $ | 54,955 | 5.80 | % |
| Tax-exempt loans (1) | 7,348 | 105 | 5.78 | 8,541 | 111 | 5.23 | ||||||
| Taxable securities | 619,764 | 4,036 | 2.60 | 680,133 | 5,251 | 3.09 | ||||||
| Tax-exempt securities (1) | 263,912 | 3,200 | 4.85 | 319,007 | 3,548 | 4.45 | ||||||
| Interest bearing cash | 117,706 | 1,291 | 4.45 | 84,182 | 1,143 | 5.46 | ||||||
| Other investments | 16,273 | 279 | 6.85 | 16,821 | 298 | 7.13 | ||||||
| Interest Earning Assets | 5,078,596 | 66,596 | 5.28 | 4,910,669 | 65,306 | 5.34 | ||||||
| Cash and due from banks | 57,464 | 55,550 | ||||||||||
| Other assets, net | 241,962 | 235,233 | ||||||||||
| Total Assets | $ | 5,378,022 | $ | 5,201,452 | ||||||||
| Liabilities | ||||||||||||
| Savings and interest-bearing checking | 2,836,290 | 12,840 | 1.84 | 2,633,519 | 13,367 | 2.04 | ||||||
| Time deposits | 871,377 | 8,115 | 3.78 | 864,672 | 9,443 | 4.39 | ||||||
| Other borrowings | 92,185 | 1,504 | 6.58 | 129,255 | 2,119 | 6.59 | ||||||
| Interest Bearing Liabilities | 3,799,852 | 22,459 | 2.40 | % | 3,627,446 | 24,929 | 2.76 | |||||
| Non-interest bearing deposits | 1,007,665 | 1,063,454 | ||||||||||
| Other liabilities | 109,214 | 107,327 | ||||||||||
| Shareholders’ equity | 461,291 | 403,225 | ||||||||||
| Total liabilities and shareholders’ equity | $ | 5,378,022 | $ | 5,201,452 | ||||||||
| Net Interest Income | $ | 44,137 | $ | 40,377 | ||||||||
| Net Interest Income as a Percent of Average Interest Earning Assets | 3.49 | % | 3.30 | % | ||||||||
| (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 | |||||||||||
| 4 | ||||||||||||
| --- |
Commercial Loan Portfolio Analysis as of March 31, 2025
| Total Commercial Loans | ||||||||||
|---|---|---|---|---|---|---|---|---|---|---|
| Watch Credits | Percent of Loan Category in Watch Credit | |||||||||
| Loan Category | All Loans | Performing | Non-accrual | Total | ||||||
| (Dollars in thousands) | ||||||||||
| Land | $ | 9,259 | $ | — | $ | — | $ | — | — | % |
| Land Development | 23,303 | — | — | — | — | |||||
| Construction | 135,788 | 16,903 | — | 16,903 | 12.4 | |||||
| Income Producing | 688,915 | 24,038 | — | 24,038 | 3.5 | |||||
| Owner Occupied | 590,885 | 10,220 | 46 | 10,266 | 1.7 | |||||
| Total Commercial Real Estate Loans | $ | 1,448,150 | $ | 51,161 | $ | 46 | $ | 51,207 | 3.5 | |
| Other Commercial Loans | $ | 544,037 | $ | 32,042 | 81 | $ | 32,123 | 5.9 | ||
| Total non-performing commercial loans | $ | 127 |
Commercial Loan Portfolio Analysis as of December 31, 2024
| Total Commercial Loans | ||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Watch Credits | Percent of Loan Category in Watch Credit | |||||||||||
| Loan Category | All Loans | Performing | Non-accrual | Total | ||||||||
| (Dollars in thousands) | ||||||||||||
| Land | $ | 8,734 | $ | — | $ | — | $ | — | 0.0 | % | ||
| Land Development | 24,637 | — | — | — | — | |||||||
| Construction | 201,474 | 16,589 | — | 16,589 | 8.2 | |||||||
| Income Producing | 624,499 | 22,286 | — | 22,286 | 3.6 | |||||||
| Owner Occupied | 544,829 | 18,396 | 47 | 18,443 | 3.4 | |||||||
| Total Commercial Real Estate Loans | $ | 1,404,173 | $ | 57,271 | $ | 47 | $ | 57,318 | 4.1 | |||
| Other Commercial Loans | $ | 533,190 | $ | 27,334 | 7 | $ | 27,341 | 5.1 | ||||
| Total non-performing commercial loans | $ | 54 | 5 | |||||||||
| --- |
ibcp20251qearningsdeck-f
Earnings Call: First Quarter 2025 April 24, 2025 (NASDAQ: IBCP)
Cautionary note regarding forward-looking statements This presentation contains forward-looking statements, which are any statements or information that are not historical facts. These forward-looking statements include statements about our anticipated future revenue and expenses and our future plans and prospects. Forward-looking statements involve inherent risks and uncertainties, and important factors could cause actual results to differ materially from those anticipated. For example, deterioration in general business and economic conditions or turbulence in domestic or global financial markets could adversely affect our revenues and the values of our assets and liabilities, reduce the availability of funding to us, lead to a tightening of credit, and increase stock price volatility. Our results could also be adversely affected by changes in interest rates; increases in unemployment rates; deterioration in the credit quality of our loan portfolios or in the value of the collateral securing those loans; deterioration in the value of our investment securities; legal and regulatory developments; changes in customer behavior and preferences; breaches in data security; and management’s ability to effectively manage the multitude of risks facing our business. Key risk factors that could affect our future results are described in more detail in our Annual Report on Form 10-K for the year ended December 31, 2024 and the other reports we file with the SEC, including under the heading “Risk Factors.” Investors should not place undue reliance on forward-looking statements as a prediction of our future results. Any forward-looking statement speaks only as of the date on which it is made, and we undertake no obligation to update any forward-looking statement, whether as a result of new information, future events, or otherwise. 2 2
• Formal Remarks − William B. (Brad) Kessel President and Chief Executive Officer − Gavin A. Mohr Executive Vice President and Chief Financial Officer − Joel F. Rahn Executive Vice President – Commercial Banking • Question and Answer session • Closing Remarks Note: This presentation is available at www.IndependentBank.com in the Investor Relations area under the “Presentations” tab. Agenda 3
1Q'25 Overview • Total loans increased 3.4% annualized while maintaining a disciplined approach to new loan production • New loan production continues to be largely focused on new commercial clients that bring deposits to the bank • Asset quality remained exceptional with NPAs/Total Assets at 0.14% and NCO of 0.01% of average loans in the quarter • Total core deposit (excluding brokered time) growth of $9.1 million • Generated a ROAA and ROAE of 1.18% and 13.71%, respectively • Net interest margin of 3.49% compared to 3.45% in the linked quarter • Commercial loan growth of 11.5% annualized • Tangible book value per share increased 2.7% from end of prior quarter • An increase in all regulatory capital ratios compared to the prior year quarter as well as the linked quarter • Balance sheet liquidity remains strong with loan-to-deposit ratio of 88% • Net income of $15.6 million, or $0.74 per diluted share • Increase in net interest income of $3.5 million over the prior year quarter and $0.8 million over the fourth quarter of 2024 • Strong profitability and prudent balance sheet management results 13.2% growth in tangible book value per share compared to the prior year quarter. Healthy Capital & Liquidity Positions Positive Trends in Key Metrics Solid Loan Growth and Strong Asset Quality 1Q'25 Earnings 4 4
Non-interest Bearing 21% Savings and Interest- bearing Checking 44% Reciprocal 20% Time 14% Brokered 2% $ 4 .4 $ 4 .5 $ 4 .5 $ 4 .6 $ 4 .6 $ 4 .6 $ 4 .6 $ 4 .6 $ 4 .7 $ 4 .6 0 .7 8 % 1 .2 6 % 1 .5 7 % 1 .8 0 % 1 .9 9 % 2 .0 1 % 2 .0 3 % 2 .1 1 % 1 .9 3 % 1 .8 0 % Q 4 '2 2 Q 1 '2 3 Q 2 '2 3 Q 3 '2 3 Q 4 '2 3 Q 1 '2 4 Q 2 '2 4 Q 3 '2 4 Q 4 '2 4 Q 1 '2 5 Total Deposits Cost Of Deposits Low-Cost Deposit Franchise Focused on Core Deposit Growth • Substantial core funding – $3.92 billion of non-maturity deposit accounts (84.6% of total deposits). • Core deposit increase of $9.1 million (0.8% annualized) in 1Q'25. • Time deposit increase of $6.9 (4.4% annualized) million in 1Q'25. • Total deposits decreased $20.2 million (1.8%) since 12/31/24 with non-interest bearing down $23.7 million, savings and interest- bearing checking up $22.5 million, reciprocal up $3.5 million, time up $6.9 million and brokered time down $29.3 million. • Deposits by Customer Type: − Retail – 48.0% − Commercial – 35.4% − Municipal – 16.6% Deposit Composition 3/31/25 Cost of Deposits (%)/Total Deposits ($B) 5 Core Deposits: 84.6% $4.6B
0 .2 5 % 0 .2 7 % 0 .2 7 % 0 .2 8 % 0 .3 3 % 0 .3 6 % 0 .4 2 % 0 .5 1 % 0 .6 0 % 0 .7 3 % 0 .8 2 % 0 .8 5 % 0 .8 5 % 0 .7 4 % 0 .6 3 % 0 .3 0 % 0 .2 3 % 0 .3 9 % 0 .1 4 % 0 .1 2 % 0 .1 1 % 0 .1 0 % 0 .1 0 % 0 .1 2 % 0 .3 3 % 0 .7 9 % 1 .2 5 % 1 .5 7 % 1 .8 0 % 1 .9 9 % 2 .0 1 % 2 .0 2 % 2 .1 0 % 1 .9 2 % 1 .8 0 % 0 500,000 1,000,000 1,500,000 2,000,000 2,500,000 3,000,000 3,500,000 4,000,000 4,500,000 5,000,000 0.0% 0.5% 1.0% 1.5% 2.0% 2.5% 3.0% 3.5% 4.0% 4.5% 5.0% 5.5% 6.0% S e p -1 6 D e c -1 6 M a r- 1 7 J u n -1 7 S e p -1 7 D e c -1 7 M a r- 1 8 J u n -1 8 S e p -1 8 D e c -1 8 M a r- 1 9 J u n -1 9 S e p -1 9 D e c -1 9 M a r- 2 0 J u n -2 0 S e p -2 0 D e c -2 0 M a r- 2 1 J u n -2 1 S e p -2 1 D e c -2 1 M a r- 2 2 J u n -2 2 S e p -2 2 D e c -2 2 M a r- 2 3 J u n -2 3 S e p -2 3 D e c -2 3 M a r- 2 4 J u n -2 4 S e p -2 4 D e c -2 4 M a r- 2 5 Historic IBC Cost of Funds (excluding sub debt) vs. the Federal Funds Rate (with Deposit Balances) D e p o s it B a la n c e s ( $ i n t h o u s a n d s ) 6 F e d e ra l F u n d s R a te Account Type Cut Cycle Beta Sav & Int-bearing chking 27.0% Reciprocal 77.8% Time 61.4% Total int-bearing Dep (excl brokered) 50.5% Total COF IBC (excl Sub Debt) 37.7% IBC COF Fed Funds Spot Fed Effective Total Deposits
$ 3 .4 $ 3 .5 $ 3 .6 $ 3 .7 $ 3 .8 $ 3 .8 $ 3 .9 $ 3 .9 $ 4 .0 $ 4 .1 4 .9 0 % 5 .0 7 % 5 .3 6 % 5 .5 3 % 5 .7 3 % 5 .8 0 % 5 .9 3 % 5 .9 6 % 5 .8 3 % 5 .7 4 % 4 Q '2 2 1 Q '2 3 2 Q '2 3 3 Q '2 3 4 Q '2 3 1 Q '2 4 2 Q '2 4 3 Q '2 4 4 Q '2 4 1 Q '2 5 Total Portfolio Loans Yield on Loans Commercial 49% Mortgage 37% Installment 14% Held for Sale 0% Diversified Loan Portfolio Focused on High Quality Growth • Portfolio loan changes in 1Q'25: − Commercial – increased $54.8 million. …Average new origination yield of 6.97% vs a 6.55% portfolio yield. − Mortgage – decreased $3.9 million. …Average new origination yield of 7.02% vs a 4.85% portfolio yield. − Installment – decreased $17.0 million. …Average new origination yield of 7.52% vs a 5.03% portfolio yield. • Mortgage loan portfolio weighted average FICO of 751 and average balance of $186,239. • Installment weighted average FICO of 755 and average balance of $25,390. • Commercial loan rate mix: − 42% fixed / 58% variable. − Indices – 40% tied to Prime, 1% tied to a US Treasury rate and 59% tied to SOFR. • Mortgage loan (including HELOC) rate mix: − 62% fixed / 38% adjustable or variable. − 9% tied to a US Treasury rate and 91% tied to SOFR. Note: Portfolio loans exclude loans HFS. Loan Composition 03/31/25 Yield on Loans (%)/ Total Portfolio Loans ($B) 7 $4.1B
8.36%, Commercial Industrial, $167 6.22%, Construction, $124 5.70%, Retail, $114 3.91%, Office, $78 3.00%, Multifamily, $60 2.08%, 1-4 Family, $42 1.34%, Land, Vacant Land and Development, $27 0.78%, Special Purpose, $16 Concentrations within $2.0B Commercial Loan Portfolio C&I or Owner Occupied Loans by Industry as a % of Total Commercial Loans ($ in millions) Investor RE by Collateral Type as a % of Total Commercial Loans ($ in millions) Note: $1.367 billion, or 68.6% of the commercial loan portfolio is C&I or owner occupied, while $625 million, or 31.4% is investment real estate. The percentage concentrations are based on the entire commercial portfolio of $2.0 billion as of March 31, 2025 8 $625MM 9.18% 183 8.44% 168 7.95% 158 7.38% 1475.63% 112 4.85% 97 4.62% 92 3.57% 71 2.79% 56 50 47 186 $1,367MM Manufacturing Retail Construction Health Care and Social Assistance Real Estate Rental and Leasing Hotel and Accomodations Other Services (except Public Administration) Wholesale Transportation Arts, Entertainment, and Recreation Professional, Scientific, and Technical Services Misc 2.34% 9.35% 2.94%
$ 7 .9 $ 5 .1 $ 3 .7 $ 5 .2 $ 3 .7 $ 4 .5 $ 5 .1 $ 6 .0 $ 7 .1 $0.8 $0.2 $0.5 $0.6 $1.1 $0.9 $0.8 $0.9 $0.4 $- $2.0 $4.0 $6.0 $8.0 $10.0 2020 2021 2022 2023 1Q'24 2Q'24 3Q'24 4Q'24 1Q'25 Non-performing Loans 90+ Days PD ORE/ORA $13.2 $2.3 $3.1 $3.3 $7.1 $5.3 $4.8 $7.0 $3.9 0.5% 0.1% 0.1% 0.1% 0.2% 0.1% 0.1% 0.2% 0.1% 0.0% 0.2% 0.4% 0.6% 0.8% 1.0% 1.2% 1.4% $- $2.0 $4.0 $6.0 $8.0 $10.0 $12.0 $14.0 2020 2021 2022 2023 Q1'24 Q2'24 Q3'24 Q4'24 Q1'25 30-89 Days PD 30-89 Days PD / Total Loans $0.8 $0.2 $0.5 $0.6 $1.1 $0.9 $0.8 $0.9 $0.4 $- $0.2 $0.4 $0.6 $0.8 $1.0 $1.2 2020 2021 2022 2023 Q1'24 Q2'24 Q3'24 4Q'24 1Q'25 $7.9 $5.1 $3.7 $5.2 $3.7 $4.5 $5.1 $6.0 $7.1 0 .3 % 0 .2 % 0 .1 % 0 .1 % 0 .1 % 0 .1 % 0 .1 % 0 .1 % 0 .1 % -0.1% 0.1% 0.3% 0.5% 0.7% 0.9% $- $1.0 $2.0 $3.0 $4.0 $5.0 $6.0 $7.0 $8.0 $9.0 2020 2021 2022 2023 Q1'24 Q2'24 Q3'24 Q4'24 Q1'25 Non-performing Loans (NPLs) NPLs / Total Loans Note 1: Non-performing loans and non-performing assets exclude troubled debt restructurings that are performing. Credit Quality Summary Non-performing Loans ($ in Millions) ORE/ORA ($ in Millions) 30 to 89 Days Delinquent ($ in Millions) Non-performing Assets ($ in Millions) 9
13.7 13.9 14.2 14.3 14.2 14.5 Q4'23 Q1'24 Q2'24 Q3'24 Q4'24 Q1'25 10.6 10.7 11.1 11.2 11.2 11.4 Q4'23 Q1'24 Q2'24 Q3'24 Q4'24 Q1'25 9.0 9.3 9.6 9.6 9.9 9.9 Q4'23 Q1'24 Q2'24 Q3'24 Q4'24 Q1'25 7.1 7.4 7.6 8.1 8.0 8.3 Q4'23 Q1'24 Q2'24 Q3'24 Q4'24 Q1'25 • Long-term capital Priorities: Capital retention to support organic growth, acquisitions and return of capital through strong and consistent dividends and share repurchases. • Well capitalized in all regulatory capital measurements. • Tangible common equity ratio excluding the impact of unrealized losses on securities AFS and HTM is 9.3% Strong Capital Position TCE / TA (%) Leverage Ratio (%) CET1 Ratio (%) Total RBC Ratio (%) 10
$ 3 3 .8 $ 3 4 .3 $ 3 3 .0 $ 3 6 .1 $ 3 9 .9 $ 4 0 .6 $ 3 8 .4 $ 3 8 .4 $ 3 9 .4 $ 4 0 .1 $ 4 0 .2 $ 4 1 .3 $ 4 1 .9 $ 4 2 .9 $ 4 3 .7 Q3'21 Q4'21 Q1'22 Q2'22 Q3'22 Q4'22 Q1'23 Q2'23 Q3'23 Q4'23 Q1'24 Q2'24 Q3'24 Q4'24 Q1'25 3.05 3.02 3.18 3.13 3.00 3.26 3.49 3.52 3.33 3.26 3.23 3.26 3.30 3.40 3.37 3.45 3.49 0.08 0.07 0.08 0.08 0.12 0.77 2.18 3.65 4.38 4.99 5.26 5.33 5.33 5.33 5.16 4.66 4.33 0.14 0.12 0.11 0.10 0.10 0.12 0.45 0.92 1.39 1.72 1.93 2.11 2.14 2.16 2.22 2.02 1.86 0 1 2 3 4 5 6 Q 1 '2 1 Q 2 '2 1 Q 3 '2 1 Q 4 '2 1 Q 1 '2 2 Q 2 '2 2 Q 3 '2 2 Q 4 '2 2 Q 1 '2 3 Q 2 '2 3 Q 3 '2 3 Q 4 '2 3 Q 1 '2 4 Q 2 '2 4 Q 3 '2 4 Q 4 '2 4 Q 1 '2 5 Net Interest Margin (FTE) Average Effective FF Yield Cost of Funds Net Interest Margin/Income • Net interest income was $43.7 million in 1Q'25 compared to $42.9 million in the prior year quarter. The change is due to an increase in average earning assets and the net interest margin compared to the year- ago quarter. • Net interest margin was 3.49% during the first quarter of 2025, compared to 3.30% in the year- ago quarter and 3.45% in the fourth quarter of 2024. Yields, NIM and Cost of Funds (%) Net Interest Income ($ in Millions) 11
1Q25 4Q24 Change Avg Bal Inc/Exp Yield Avg Bal Inc/Exp Yield Avg Bal Inc/Exp Yield Cash $117,706 $1,291 4.45% $84,733 $1,019 4.78% $32,973 $272 -0.34% Investments 899,949 7,515 3.34% 928,172 7,977 3.44% (28,223) (462) -0.10% Commercial loans 1,962,046 31,710 6.55% 1,875,634 31,725 6.73% 86,412 (15) -0.17% Mortgage loans 1,524,051 18,617 4.89% 1,523,276 18,758 4.93% 775 (141) -0.04% Consumer loans 574,844 7,463 5.19% 595,751 7,888 5.30% (20,907) (425) -0.10% Earning assets $5,078,596 $66,596 5.28% $5,007,566 $67,367 5.37% $71,030 ($771) -0.09% Nonmaturity deposits $2,836,290 $12,840 1.84% $2,835,507 $14,393 2.02% $783 (1,553) -0.18% CDARS deposits 107,920 957 3.60% 116,153 1,156 3.96% (8,233) (199) -0.36% Retail Time deposits 624,255 5,689 3.70% 623,996 6,312 4.02% 259 (623) -0.33% Brokered deposits 139,202 1,469 4.28% 49,092 685 5.55% 90,110 784 -1.27% Bank borrowings 12,784 143 4.54% 13,370 160 4.76% (586) (17) -0.22% IBC debt 79,401 1,361 6.91% 79,365 1,421 7.14% 36 (60) -0.23% Cost of funds $3,799,852 $22,459 2.40% $3,717,483 $24,127 2.58% $82,369 ($1,668) -0.19% Free funds $1,278,744 $1,290,083 ($11,339) Net interest income $44,137 $43,240 $897 Net interest margin 3.49% 3.45% 0.04% 4Q'24 3.45% Decrease in Earning Asset Yield -0.12% Decrease in funding costs 0.18% Change in funding mix -0.05% Change in earning asset mix 0.03% 1Q'25 3.49% 1Q'25 NIM Changes Linked Quarter Average Balances and FTE Rates ($ in thousands) Linked Quarter Analysis 12
March 31, 2025 -200 -100 Base-rate 100 200 Net Interest Income $182,199 $182,549 $183,705 $185,907 $187,279 Change from Base -0.82% -0.63% 1.20% 1.95% December 31, 2024 -200 -100 Base-rate 100 200 Net Interest Income $181,603 $181,769 $182,518 $184,427 $185,494 Change from Base -0.50% -0.41% 1.05% 1.63% Interest Rate Risk Management • The base case modeled NII is modestly higher during the quarter as asset yields were augmented by a shift in asset mix with strong commercial loan growth largely funded by runoff of lower yielding retail loans and the investment portfolio. This benefit were partially offset by an adverse shift in funding mix. • The NII sensitivity position shows slightly more exposure to a declining rate environment due to faster asset repricing. During the quarter, the bank had solid growth in variable rate commercial loans and HELOCs. An increase in liability sensitivity to lower rates offset some of the asset sensitivity increase. • Base-rate is a static balance sheet applying the spot yield curve from the valuation date. • Stable core funding base. Transaction accounts fund 37.4% of assets and other non-maturity deposits fund another 19.0% of assets. Low wholesale funding of just 3.8% of assets. • 35.5% of assets reprice in 1 month and 47.4% reprice in the next 12 months. • Continually evaluating strategies to manage NII through hedging as well as product pricing and structure. Changes in Net Interest Income (Dollars in 000’s) Simulation analyses calculate the change in net interest income over the next twelve months, under immediate parallel shifts in interest rates, based upon a static statement of financial condition, which includes derivative instruments, and does not consider loan fees. 13
Interchange income $3,127 Service Chg Dep $2,814 Gain (Loss)- Mortgage Sale $2,303 Equity Securities at Fair Value $- Gain (Loss)- Securities $(330) Mortgage loan servicing, net $(636) Investment & insurance commissions $754 Bank owned life insurance $297 Other income $2,095 $ 1 1 .5 $ 1 0 .5 $ 1 5 .4 $ 1 5 .6 $ 9 .1 $ 1 2 .6 $ 1 5 .2 $ 9 .5 $ 1 9 .1 $ 1 0 .4 1 8 .4 % 1 6 .4 % 1 8 .6 % 2 0 .0 % 1 2 .2 % 1 6 .2 % 1 8 .6 % 1 2 .2 % 2 2 .2 % 1 3 .6 % -5.0 5.0 15.0 25.0 35.0 45.0 55.0 $- $5.0 $10.0 $15.0 $20.0 $25.0 $30.0 $35.0 $40.0 Q 4 '2 2 Q 1 '2 3 Q 2 '2 3 Q 3 '2 3 Q 4 '2 3 Q 1 '2 4 Q 2 '2 4 Q 3 '2 4 Q 4 '2 4 Q 1 '2 5 Non-interest Income Non-interest Inc/Operating Rev (%) Strong Non-interest Income • The $8.4 million comparative quarterly decrease in mortgage loan servicing, net is primarily attributed to changes in the fair value of capitalized mortgage loan servicing rights associated with changes in mortgage loan interest rates and expected future prepayment levels. The decrease in servicing revenue is attributed to the sale of approximately $931 million of mortgage servicing rights on January 31, 2025. • Mortgage banking: − $2.3 million in net gains on mortgage loans in 1Q'25 vs. $1.4 million in the year ago quarter. The increase is primarily due to higher profit margins on mortgage loan sales as well as higher loan sales volume. − $107.8 million in mortgage loan originations in 1Q'25 vs. $94.0 million in 1Q’24 and $134.1 million in 4Q'24. − 1Q'25 mortgage loan servicing includes a $1.5 million ($(0.06) per diluted share, after tax) decrease in fair value adjustment due to price compared to an increase of $1.3 million ($0.05 per diluted share, after tax) in the year ago quarter. Source: Company documents. 1Q'25 Non-interest Income (thousands) Non-interest Income Trends ($M) 14 $10.4MM
6 1 .3 % 5 9 .8 % 6 0 .4 % 5 9 .6 % 5 9 .9 % 6 0 .7 % 6 0 .3 % 6 0 .9 % 6 2 .2 % 6 0 .9 % 6 1 .4 % 3 Q '2 2 4 Q '2 2 1 Q '2 3 2 Q '2 3 3 Q '2 3 4 Q '2 3 1 Q '2 4 2 Q '2 4 3 Q '2 4 4 Q '2 4 1 Q '2 5 $ 3 1 .0 $ 3 2 .2 $ 3 2 .0 $ 3 1 .9 $ 3 2 .2 $ 3 3 .3 $ 3 2 .6 $ 3 4 .3 $- $5.0 $10.0 $15.0 $20.0 $25.0 $30.0 $35.0 Q 1 '2 3 Q 2 '2 3 Q 3 '2 3 Q 4 '2 3 Q 1 '2 4 Q 2 '2 4 Q 3 '2 4 Q 4 '2 4 Q 1 '2 5 Compensation and Benefits Loan and Collection Occupancy Data Processing FDIC Insurance Other Focus on Improved Efficiency • 1Q'25 efficiency ratio of 62.2%. • Compensation and employee benefits expense of $20.4 million, a decrease of $0.4 million from the prior year quarter. • Performance-based compensation was approximately the same as the prior year quarter. • Payroll taxes and employee benefits decreased $0.3 million primarily due to lower healthcare related costs. • Data processing costs increased by $0.5 million primarily due to core data processor annual asset growth and CPI related cost increases as well as price increases in other software solutions. • Opportunities exist to gain additional efficiencies as we continue to optimize our delivery channels. Non-interest Expense ($M) Efficiency Ratio (4 quarter rolling average) Source: Company documents. 15 $ 3 7 .0
Outlook for 2025 Outlook for 2025 *as of January, 2025 • IBCP forecast of mid-single digit (approximately 5%-6%) overall loan growth is based on increases in commercial loans (9%-10%) and mortgage loans (2%-3%) with installment loans declining (2%-3%). • This growth forecast also assumes a stable Michigan economy. • The forecast assumes 0.25% Fed rate cuts in March and August in the federal funds rate while long-term interest rates increase slightly over year-end 2024 levels. • IBCP forecast of high-single digit (8%-9%) growth is primarily supported by an increase in earning assets and a favorable shift in the earning asset base. Expect the net interest margin (NIM) to increase (0.20% - 0.25%) in 2025 compared to full-year 2024. Primary driver is a decrease in yield on interest bearing liabilities that is partially offset by a decrease in earning asset yield. • Very difficult area to forecast. Future provision levels under CECL will be particularly sensitive to loan growth and mix, projected economic conditions, watch credit levels and loan default volumes. • The allowance as a percentage of total loans was at 1.47% at 12/31/24 • A full year 2025 provision (expense) for credit losses of approximately 0.15%-0.20% of average total portfolio loans would not be unreasonable. 1Q’25 Update • Total portfolio loans increased $33.9 million (3.4% annualized) in 1Q'25 which is below our forecasted range. Commercial loan growth of $54.8 million (11.5% annualized) that was partially offset by a decrease of $3.9 million (1.0% annualized) in mortgage loans and a $17.0 (11.8% annualized) in installment loans. • 1Q'25 net interest income was $3.5 million (8.7%) higher than the prior year quarter which is within the forecasted range. The net interest margin was 3.49% for the current quarter and 3.30% for the prior year quarter and up 0.04% from the linked quarter. • The provision for credit losses was an expense of $0.7 million for the first quarter below the forecasted range. LENDING Continued growth NET INTEREST INCOME Growth driven primarily by higher average earning assets PROVISION FOR CREDIT LOSSES Steady asset quality metrics 16
Outlook for 2025 Outlook for 2025 *as of January, 2025 • Q1/Q2 quarterly 2025 forecasted range of $11.0M to $12.0M and Q3/Q4 forecast of $12.0M to $13M. Full year down 14.0% to 14.5% from 2024 actual of $56.4M • Expect mortgage loan origination volumes and net gain on sale to be similar to 2024. Assumes mortgage loan servicing net of approximately $0.75M per quarter in 2025. • IBCP forecasts 2025 quarterly range of $34.5M to $35.5M with the total for the year up 3.0% to 4.0% from the 2024 actual of $135.1M. • The primary driver is an increase in compensation and employee benefits, data processing and occupancy. • Approximately a 19% effective income tax rate in 2025 This assumes a 21% statutory federal corporate income tax rate during 2025. • 2025 share repurchase authorization at approximately 5% (1.1 million) of outstanding shares. • Share repurchases will be dependent on capital levels, capital allocation options and share price trends. We are not modeling any share repurchases in 2025. 1Q’25 Update • Non-interest income totaled $10.4 million in 1Q'25, which is lower than the forecasted range. Mortgage loan servicing net, generated a loss of $0.6 million in 1Q'25. • Total non-interest expense was $34.3 million in the 1Q'25, which was lower than our forecasted range. Actual effective income tax rate of 18.5% for the first quarter of 2025. Repurchased 1,093 shares for an aggregate purchase price of $0.03 million in the first quarter of 2025. NON-INTEREST INCOME NON-INTEREST EXPENSES INCOME TAXES SHARE REPURCHASES 17
Strategic Initiatives • Outside Sales - Relationship banking focus thru consistent calling on prospects and COI’s. • Inside Service/Sales – high retention + high cross sales, collaboration of strategic partners. • Digital Marketing - Leverage data insights, target strategically, elevate brand image, personalize the customer experience. • Leverage Referral Network – Fintech (ReferLive); • New Products – SMB deposit product, Business digital pmts. • Market Expansion – Through existing indirect dealer network. • Selective and opportunistic bank and branch acquisitions. • Process Automation – leverage core investments + Fintech partnerships: (Blend) mortgage; (Numerated) Commercial; • Branch Optimization - including assessing existing locations, new locations, service hours, staffing, & workflow and leveraging technology. • Promotion of Self-Serve Channels - (One Wallet, Treasury One, etc.) • Leverage Banker Capacity – including on-line appointment setting. • Leverage Middleware + API’s – expediate new technology implementation. • Optimize Office Space Utilization • Invest in our Team – competitive C&B offering, skill training, leadership development, etc. • High Employee Engagement – thru fostering a culture of purpose, opportunity, continuous learning, diversity, reward + recognition. • Promote Teamwork + Alignment across all business units. • Invest in technology - to enhance the employee experience + customer experience. • Client Service Model – well defined and applied. • Utilize three layers of defense (business unit, risk management and internal audit). Independent & collaborative approach. • Consistent earnings + maintain strong capital levels. • Proactive credit quality monitoring and problem resolution. • Manage Liquidity and IRR. • Manage Operational risk, emphasizing cyber security, fraud prevention, and regulatory compliance. • Effective relationships with regulators & other outside oversight parties. Proactive, transparent and good communication. PROCESS IMPROVEMENT & COST CONTROLS RISK MANAGEMENT GROWTH TALENT MANAGEMENT 18
Question and Answer Session Closing Remarks NASDAQ: IBCP Thank you for attending 19
Appendix Additional Financial Data and Non-GAAP Reconciliations 20
Historical Financial Data 21 here Year Ended December 31, Quarter Ended, ($M except per share data) 2021 2022 2023 2024 3/31/24 6/30/24 9/30/24 12/31/24 3/31/25 Balance Sheet: Total Assets $4,705 $5,000 $5,264 $5,338 $5,231 $5,278 $5,259 $5,338 $5,328 Portfolio Loans $2,905 $3,465 $3,791 $4,039 $3,840 $3,852 $3,942 $4,039 $4,073 Deposits $4,117 $4,379 $4,622 $4,654 $4,582 $4,614 $4,627 $4,654 $4,634 Tangible Common Equity $367 $317 $374 $425 $385 $400 $422 $425 $438 Profitability: Pre-Tax, Pre-Provision Income $75.4 $83.7 $79.9 $87.5 $20.6 $23.2 $18.8 $25.0 $19.8 Pre-Tax, Pre-Prov / Avg. Assets 1.69% 1.72% 1.56% 1.77% 1.59% 1.80% 1.43% 1.88% 1.46% Net Income(1) $62.9 $63.8 $59.1 $66.8 $16.0 $18.5 $13.8 $18.5 $15.6 Diluted EPS $2.88 $2.97 $2.79 $3.16 $0.76 $0.88 $0.65 $0.87 $0.74 Return on Average Assets(1) 1.41% 1.32% 1.15% 1.27% 1.24% 1.44% 1.04% 1.39% 1.18% Return on Average Equity(1) 16.1% 18.5% 16.0% 15.7% 16.0% 18.0% 12.5% 16.3% 13.7% Net Interest Margin (FTE) 3.10% 3.32% 3.26% 3.38% 3.30% 3.40% 3.37% 3.45% 3.49% Efficiency Ratio 62.9% 59.4% 60.8% 60.8% 60.3% 61.5% 62.8% 59.1% 62.2% Asset Quality: NPAs / Assets 0.11% 0.08% 0.11% 0.13% 0.09% 0.10% 0.11% 0.13% 0.14% NPAs / Loans + OREO 0.18% 0.12% 0.15% 0.17% 0.12% 0.14% 0.15% 0.17% 0.17% ACL / Total Portfolio Loans 1.63% 1.51% 1.44% 1.47% 1.47% 1.46% 1.46% 1.47% 1.47% NCOs / Avg. Loans (0.07%) 0.00% 0.01% 0.02% 0.02% 0.02% 0.00% 0.01% 0.01% Capital Ratios: TCE Ratio 7.9% 6.4% 7.2% 8.0% 7.4% 7.6% 8.1% 8.0% 8.3% Leverage Ratio 8.8% 8.8% 9.0% 9.9% 9.3% 9.5% 9.6% 9.9% 9.9% Tier 1 Capital Ratio 12.1% 11.4% 11.5% 12.1% 11.7% 12.0% 12.1% 12.1% 12.3% Total Capital Ratio 14.5% 13.7% 13.7% 14.2% 13.9% 14.2% 14.2% 14.2% 14.5%
22 Historic Financial Performance Year Ended December 31, ($M except per share data) 2019 2020 2021 2022 2023 2024 5 Year CAGR Balance Sheet: Total Assets $3,565 $4,204 $4,705 $5,000 $5,264 $5,338 8.4% Portfolio Loans $2,725 $2,734 $2,905 $3,465 $3,791 $4,039 8.2% Deposits $3,037 $3,637 $4,117 $4,379 $4,623 $4,654 8.9% Tangible Common Equity $317 $357 $367 $317 $374 $425 6.1% Profitability: Pre-Tax, Pre-Provision Income $58.6 $81.9 $75.4 $83.1 $79.9 $87.5 8.4% Pre-Tax, Pre-Prov / Avg. Assets 1.70% 2.08% 1.62% 1.68% 1.56% 1.77% - Net Income(1) $46.4 $56.2 $62.9 $63.4 $59.1 $66.8 7.5% Diluted EPS $2.00 $2.53 $2.88 $2.97 $2.79 $3.16 9.6% Return on Average Assets(1) 1.35% 1.43% 1.41% 1.31% 1.15% 1.27% - Return on Average Equity(1) 13.63% 15.68% 16.13% 18.41% 16.04% 15.70% - Net Interest Margin (FTE) 3.80% 3.34% 3.10% 3.32% 3.26% 3.38% - Efficiency Ratio 64.90% 59.24% 62.87% 59.71% 60.76% 60.80% - Asset Quality: NPAs / Assets 0.32% 0.21% 0.11% 0.08% 0.11% 0.13% - NPAs / Loans + OREO 0.42% 0.32% 0.18% 0.12% 0.15% 0.17% - Reserves / Total Loans 0.96% 1.30% 1.63% 1.51% 1.44% 1.47% - NCOs / Avg. Loans (0.02%) 0.11% (0.07%) 0.00% 0.01% 0.02% - Capital Ratios: TCE Ratio 9.0% 8.6% 7.9% 6.4% 7.2% 8.0% - Leverage Ratio 10.1% 9.2% 8.8% 8.8% 9.1% 9.9% - Tier 1 Capital Ratio 12.7% 13.3% 12.2% 11.4% 11.6% 12.1% - Total Capital Ratio 13.7% 16.0% 14.5% 13.7% 13.7% 14.2% - Shareholder Value: TBV/Share $ 14.08 $ 16.33 $ 17.33 $ 15.04 $ 17.96 $ 20.33 7.6% Dividends Paid per Share $ 0.72 $ 0.80 $ 0.84 $ 0.88 $ 0.92 $ 0.96 5.9% Value of Shares Repurchased $ 26.3 $ 14.2 $ 17.3 $ 4.0 $ 5.2 $ - -
Sources of Liquidity 1Q 2025 Current On-balance sheet Excess reserves at the Fed $ 67.6 Unpledged AFS Securities $ 523.7 Total On-balance sheet $ 591.3 On balance sheet liquidity to total deposits 13% Available Sources of Liquidity Unused FHLB & FRB (including BTFP) $ 1,587.2 Borrow capacity on unpledged bonds $ 469.7 Total Available Sources $ 2,056.9 Sources of Liquidity to total deposits 44% 73% 79% 74% 76% 60% 58% 56% 2 2 2 % 2 3 7 % 2 3 8 % 2 2 2 % 2 1 8 % 1 9 5 % 1 9 6 % 3Q23 4Q23 1Q24 2Q24 3Q24 4Q24 1Q25 On-balance sheet / Uninsured Deposits Available Sources / Uninsured Deposits Note: Portfolio loans exclude loans HFS. Liquidity / Uninsured Deposits Strong Liquidity Position • Significant liquidity position to manage the current environment. • Total available liquidity significantly exceeds (196%) estimated uninsured deposit balances. • Attractive loan to deposit ratio of 87.9%. • Uninsured deposit to total deposits of approximately 23.0%, excluding brokered time deposits. Sources of Liquidity 23
$1,969 $1,074 $465 $81 $243 $502 $300 $2,212 $1,576 $765 $81 Consumer Commercial Public Funds Brokered Insured Deposits Uninsured Deposits $ 3 ,5 7 5 $ 3 ,6 6 1 $ 3 ,6 0 5 $ 3 ,6 3 6 $ 3 ,5 7 0 $ 3 ,5 9 4 $ 3 ,5 8 6 $1,011 $962 $977 $978 $1,057 $1,060 $1,048 $4,586 $4,623 $4,582 $4,614 $4,627 $4,654 $4,634 3Q23 4Q23 1Q24 2Q24 3Q24 4Q24 1Q25 Insured Deposits Uninsured Deposits Granular Deposit Base • Average deposit account balance of approximately $21,067. • Average deposit balance excluding reciprocal deposit of $16,930. • Average Commercial deposit balance of $94,432. • Average retail deposit balance of $11,308. • 10 largest deposit accounts total $377.4 million or 8.15% of total deposits. − $235.7 million in ICS with FDIC coverage. • 100 largest deposit accounts total $1.07 billion or 23.09% of total deposits. − $645.3 million in ICS with FDIC coverage. Note: Uninsured deposit calculation is an approximation. Uninsured Deposit by Segment (3/31/25) Uninsured Deposit Trend ($MM) 24
CRE – Office Metrics • 19.1% of portfolio is medical office buildings. • 77% of portfolio is in suburban geographies. • 61.6% of CRE – Office mature after 2028. • Average loan size of $1.2 million. Maturing Exposure (millions) CRE - Office Fixed vs. Variable Geographic Location (millions) 25 Urban Suburban Fixed Variable 21% 79% $18 $60 $3.5 $5.1 $21.3 $48.0 M a tu ri n g 2 0 2 5 M a tu ri n g 2 0 2 6 M a tu ri n g 2 0 2 7 M a tu ri n g 2 0 2 8 & A ft e r
Non-GAAP to GAAP Reconciliation 26 March 31, December 31, September 30, June 30, March 31, 2024 2023 2022 2021 2025 2024 2024 2024 2024 Net interest income $166,248 $156,329 $149,561 $129,765 $43,685 $42,851 $41,854 $41,346 $40,197 Non-interest income 56,362 50,676 61,909 76,643 10,424 19,121 9,508 15,172 12,561 Non-interest expense 135,096 127,119 128,341 131,023 34,262 36,987 32,583 33,333 32,193 Pre-Tax, Pre-Provision Income 87,514 79,886 83,129 75,385 $19,847 $24,985 $18,779 $23,185 20,565 Provision for credit losses 4,468 6,210 5,341 (1,928) 721 2,217 1,488 19 744 Income tax expense 16,256 14,609 14,437 14,418 3,536 4,307 3,481 4,638 3,830 Net income $66,790 $59,067 $63,351 $62,895 $15,590 $18,461 $13,810 $18,528 $15,991 Average total assets $5,239,952 $5,115,624 $4,825,723 $4,465,577 $5,378,022 $5,300,368 $5,275,623 $5,181,317 $5,201,452 Performance Ratios Return on average assets 1.27% 1.15% 1.31% 1.41% 1.18% 1.39% 1.04% 1.44% 1.24% Pre-tax, Provision return on average assets 1.67% 1.56% 1.72% 1.69% 1.50% 1.88% 1.42% 1.80% 1.59% Year Ended December 31, Quarter Ended (Dollars in thousands)
Reconciliation of Non-GAAP Financial Measures 27 Reconciliation of Non-GAAP Financial Measures 2025 2024 Net Interest Margin, Fully Taxable Equivalent ("FTE") Net interest income 43,685$ 40,197$ Add: taxable equivalent adjustment 452 180 Net interest income - taxable equivalent 44,137$ 40,377$ Net interest margin (GAAP) (1) 3.46% 3.28% Net interest margin (FTE) (1) 3.49% 3.30% (1) Annualized. Three Months Ended March 31, (Dollars in thousands)
Reconciliation of Non-GAAP Financial Measures (continued) 28 Tangible Common Equity Ratio March 31, December 31, September 30, June 30, March 31, 2024 2023 2022 2021 2025 2024 2024 2024 2024 Common shareholders' equity 454,686$ 404,449$ 347,596$ 398,484$ 467,277$ 454,686$ 452,369$ 430,459$ 415,570$ Less: Goodwill 28,300 28,300 28,300 28,300 28,300 28,300 28,300 28,300 28,300 Other intangibles 1,488 2,004 2,551 3,336 1,366 1,488 1,617 1,746 1,875 Tangible common equity 424,898$ 374,145$ 316,745$ 366,848$ 437,611$ 424,898$ 422,452$ 400,413$ 385,395$ Total assets $ 5,338,104 $ 5,263,726 $ 4,999,787 $ 4,704,740 $ 5,328,428 $ 5,338,104 $ 5,259,268 $ 5,277,500 $ 5,231,255 Less: Goodwill 28,300 28,300 28,300 28,300 28,300 28,300 28,300 28,300 28,300 Other intangibles 1,488 2,004 2,551 3,336 1,366 1,488 1,617 1,746 1,875 Tangible assets $ 5,308,316 $ 5,233,422 $ 4,968,936 $ 4,673,104 $ 5,298,762 $ 5,308,316 $ 5,229,351 $ 5,247,454 $ 5,201,080 Common equity ratio 8.52% 7.68% 6.95% 8.47% 8.77% 8.52% 8.60% 8.16% 7.94% Tangible common equity ratio 8.00% 7.15% 6.37% 7.85% 8.26% 8.00% 8.08% 7.63% 7.41% Year Ended December 31, Quarter Ended (Dollars in thousands)