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 26, 2022

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
Grand Rapids, Michigan
  
49525
(Zip Code)
(Address of principal executive office)    

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):

☐
Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

☐
Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

☐
Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

☐
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 ☐

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. ☐

Item 2.02.
Results of Operations and Financial Condition

On April 26, 2022, Independent Bank Corporation issued a press release announcing its financial results for the quarter ended March 31, 2022.  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.

Press release dated April 26, 2022.
   
Supplemental data to the Registrant's press release dated April 26, 2022.
   
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
April 26, 2022
  
By
s/Gavin A. Mohr
  
     
Gavin A. Mohr, Principal Financial Officer


3
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
Gavin A. Mohr, Chief Financial Officer, 616.447.3929

INDEPENDENT BANK CORPORATION REPORTS
2022 FIRST QUARTER RESULTS

GRAND RAPIDS, Mich., April. 26, 2022 - Independent Bank Corporation (NASDAQ: IBCP) reported first quarter 2022 net income of $18.0 million, or $0.84 per diluted share, versus net income of $22.0 million, or $1.00 per diluted share, in the prior-year period.  The decrease in 2022 first quarter earnings as compared to 2021 primarily reflects a decrease in non-interest income and an increase in non-interest expense that were partially offset by an increase in net interest income and a decrease in the provision for credit losses.

William B. (“Brad”) Kessel, the President and Chief Executive Officer of Independent Bank Corporation, commented: “I am pleased with the first quarter 2022 performance by our team generating strong core results with good growth in net interest income, stabilization of our net interest margin and net growth in each category of loans and total deposits. During the first quarter inflation was reported at near 40 year highs and we witnessed a very dramatic increase in rates on the middle and long end of the yield curve with the expectation now for multiple Fed hikes through 2022 and into 2023.  This increase in rates slowed our mortgage origination volume and decreased net gains on mortgage loan sales, but also increased the value of our capitalized mortgage servicing rights.  On the asset quality front, we had very low net charge-offs in the first quarter, as well as commercial watch credits at 2.44% of the portfolio, and a very low level of past due loans. While there exists much uncertainty, we are excited about the momentum we have in our markets and look forward to continuing these growth trends for the remainder of 2022.”

First quarter 2022 highlights include:


 •
Return on average assets and return on average equity of 1.54% and 19.38%, respectively;

•
An increase in net interest income of 9.0% over the first quarter of 2021;

•
Loan net growth of $99.0 million (or 13.8% annualized);

•
Deposit net growth of $88.4 million (or 8.7% annualized);

•
Continued strong asset quality metrics as evidenced by low loan charge-offs during the quarter as well as a low level of non-performing loans and non-performing assets; and

•
The payment of a 22 cent per share dividend on common stock on February 15, 2022.

Significant items impacting comparable quarterly 2022 and 2021 results include the following:


 •
Service charges on deposits was $3.0 million and $1.9 million in the first quarter of 2022 and 2021, respectively.

•
Net gains (losses) on sale of securities was $0.1 million in the first quarter of 2022 compared to $1.4 million in the first quarter of 2021.

1

 •
Net gains on mortgage loans was $0.8 million in the first quarter of 2022 compared to $12.8 million in the first quarter of 2021.

•
A change in the fair value due to price of capitalized mortgage loan servicing rights (the “MSR Change”) of a positive $8.5 million ($0.31 per diluted share, after taxes) as compared to a positive MSR change of $4.6 million ($0.17 per diluted share, after taxes) for the first quarters of 2022 and 2021, respectively.

•
The provision for credit losses was a credit of $1.6 million in the first quarter of 2022 compared to a credit of $0.5 million in the first quarter of 2021.

•
Compensation and employee benefits was $20.1 million in the first quarter of 2022 compared to $18.5 million in the first quarter of 2021.

Operating Results

The Company’s net interest income totaled $33.0 million during the first quarter of 2022, an increase of $2.7 million, or 9.0% from the year-ago period, and down $1.3 million, or 3.8%, from the fourth quarter of 2021.  The Company’s tax equivalent net interest income as a percent of average interest-earning assets (the “net interest margin”) was 3.00% during the first quarter of 2022, compared to 3.05% in the year-ago period, and 3.13% in the fourth quarter of 2021. The year-over-year quarterly increase in net interest income is due to an increase in average interest-earning assets that was partially offset by a decline in the net interest margin.  Average interest-earning assets were $4.49 billion in the first quarter of 2022, compared to $4.05 billion in the year ago quarter and $4.43 billion in the fourth quarter of 2021.
 
In addition, commercial loan balances, interest income and yields have been impacted by Paycheck Protection Program (“PPP”) lending activity. Interest income on PPP loans was $0.6 million and $2.6 million for the first quarters of 2022 and 2021, respectively. PPP loan balances were less than $6.0 million at the end of the first quarter 2022.

Non-interest income totaled $18.9 million for the first quarter of 2022, compared to $26.4 million in the respective comparable year ago period.  These changes were primarily due to variances in mortgage banking related revenues (net gains on mortgage loans and mortgage loan servicing, net), service charges on deposit accounts and net gains(losses) on the sale of securities.

Net gains on mortgage loans in the first quarters of 2022 and 2021, were approximately $0.8 million and $12.8 million, respectively.  The decrease in net gains on mortgage loans in 2022 was primarily due to a decrease in mortgage loan sales volume, a decrease in profit margins on mortgage loan sales as well as a decrease in the fair value adjustments on the mortgage loan pipeline.

Mortgage loan servicing, net, generated a gain of $9.6 million and $5.2 million in the first quarters of 2022 and 2021, respectively.  The significant variances in mortgage loan servicing, net are primarily due 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. Mortgage loan servicing, net activity is summarized in the following table:

 
  
Three months ended
  
 
  
3/31/2022
    
3/31/2021
  
 
  
(In thousands)
  
Mortgage loan servicing, net:
            
Revenue, net
  
$
2,083
    
$
1,910
  
Fair value change due to price
    
8,452
      
4,640
  
Fair value change due to pay-downs
    
(894
)
    
(1,383
)
Total
  
$
9,641
    
$
5,167
  

Net gains (losses) on securities available for sale totaled $0.07 million, compared to $1.41 million in the prior year first quarter. The gain during the first quarter of 2021 was generally attributed to the divestiture of a group of mortgage backed securities.

Non-interest expenses totaled $31.5 million in the first quarter of 2022, compared to $30.0 million in the year-ago period.  The year-over-year increases in non-interest expense are primarily due to increases in compensation and employee benefits that was partially offset by a decrease in data processing and costs (recoveries) related to unfunded lending commitments. The increase in compensation and employee benefits in 2022 is due to several factors, including wage increases that were generally effective at the start of the year, a decreased level of compensation that was deferred in the first quarter of 2022 as direct origination costs (due to lower mortgage loan origination volume), an increase in commercial lending personnel and higher health care insurance costs. The decrease in data processing costs is primarily due to a onetime credit from our core provider in the first quarter of 2022. The decrease in expense related to the reserve for unfunded lending commitments is due primarily to lower committed unfunded balances.

2
The Company recorded an income tax expense of $4.1 million in the first quarter of 2022.  This compares to an income tax expense of $5.1 million in the first quarter of 2021.  The changes in income tax expense primarily reflect changes in pre-tax earnings in 2022 relative to 2021.

Asset Quality

A breakdown of non-performing loans(1) by loan type is as follows:

Loan Type
  
3/31/2022
    
12/31/2021
    
3/31/2021
  
   
(Dollars in thousands)
  
Commercial
  
$
59
    
$
62
    
$
1,373
  
Mortgage
    
5,166
      
4,914
      
5,741
  
Installment
    
668
      
569
      
434
  
Subtotal
    
5,893
      
5,545
      
7,548
  
Less – government guaranteed loans
    
859
      
435
      
459
  
Total non-performing loans
  
$
5,034
    
$
5,110
    
$
7,089
  
Ratio of non-performing loans to total portfolio loans
    
0.17
%
    
0.18
%
    
0.25
%
Ratio of non-performing assets to total assets
    
0.11
%
    
0.11
%
    
0.17
%
Ratio of the allowance for credit losses to non-performing loans
    
906.38
%
    
924.70
%
    
659.54
%

  (1)
Excludes loans that are classified as “troubled debt restructured” that are still performing.

The provision for credit losses was a credit of $1.6 million and a credit of $0.5 million in the first quarters of 2022 and 2021, respectively. The year-to-date decrease in the provision for credit losses in 2022 compared to 2021, was primarily the result of a decline in the adjustment to allocations based on subjective factors due in part to expected reduction in risk related to COVID-19. The Company recorded loan net charge offs of $0.1 million and loan net recoveries of $0.1 million in the first quarters of 2022 and 2021, respectively. At March 31, 2022, the allowance for credit losses totaled $45.6 million, or 1.52% of total portfolio loans compared to $47.3 million, or 1.63% of total portfolio loans at December 31, 2021.

Balance Sheet, Liquidity and Capital

Total assets were $4.76 billion at March 31, 2022, an increase of $57.2 million from December 31, 2021.  Loans, excluding loans held for sale, were $3.00 billion at March 31, 2022, compared to $2.91 billion at December 31, 2021.  Deposits totaled $4.21 billion at March 31, 2022, an increase of $88.4 million from December 31, 2021.  This increase is primarily due to growth in savings and interest-bearing checking and reciprocal deposit account balances.

Cash and cash equivalents totaled $109.8 million at March 31, 2022, versus $109.5 million at December 31, 2021. Securities available for sale totaled $1.40 billion at March 31, 2022, versus $1.41 billion at December 31, 2021.

Total shareholders’ equity was $355.4 million at March 31, 2022, or 7.46% of total assets compared to $398.5 million or 8.47% at December 31, 2021.  Tangible common equity totaled $324.0 million at March 31, 2022, or $15.31 per share compared to $366.8 million or $17.33 per share at December 31, 2021. The decrease in shareholder equity as well as tangible common equity are primarily the result of a decline in accumulated other comprehensive income (loss) related to unrealized losses on securities available for sale. The Company’s wholly owned subsidiary, Independent Bank, remains significantly above “well capitalized” for regulatory purposes with the following ratios:

 
 
Regulatory Capital Ratios
  
3/31/2022
  
12/31/2021
  
Well
Capitalized
Minimum
Tier 1 capital to average total assets
  
8.56
%
  
8.57
%
  
5.00
%
Tier 1 common equity  to risk-weighted assets
  
11.49
%
  
11.80
%
  
6.50
%
Tier 1 capital to risk-weighted assets
  
11.49
%
  
11.80
%
  
8.00
%
Total capital to risk-weighted assets
  
12.71
%
  
13.05
%
  
10.00
%

3
Share Repurchase Plan

On December 17, 2021, the Board of Directors of the Company authorized the 2022 share repurchase plan.  Under the terms of the 2022 share repurchase plan, the Company is authorized to purchase up to 1,100,000 shares, or approximately 5% of its outstanding common stock. The repurchase plan is authorized to last through December 31, 2022.  During the first quarter of 2022, the Company repurchased 59,002 shares at a weighted average price of $23.46 per share.

Earnings Conference Call

Brad Kessel, President and CEO, Gavin A. 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 Tuesday, April 26, 2022.
 
To participate in the live conference call, please dial 1-844-200-6205 (access code #645428). 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/872415764.

A playback of the call can be accessed by dialing 1-866-813-9403 (Conference ID # 996080). The replay will be available through May 3, 2022.
 
About Independent Bank Corporation

Independent Bank Corporation (NASDAQ: IBCP) is a Michigan-based bank holding company with total assets of approximately $4.8 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, 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 press release contains forward-looking statements about Independent Bank Corporation. Statements that are not historical or current facts, including statements about beliefs and expectations, are forward-looking statements and are based on the information available to, and assumptions and estimates made by, management as of the date hereof. These forward-looking statements cover, among other things, anticipated future revenue and expenses and the future plans and prospects of Independent Bank Corporation. Forward-looking statements involve inherent risks and uncertainties, and important factors could cause actual results to differ materially from those anticipated. The COVID-19 pandemic is adversely affecting Independent Bank Corporation, its customers, counterparties, employees, and fourth-party service providers, and the ultimate extent of the impacts on its business, financial position, results of operations, liquidity, and prospects is uncertain. Continued deterioration in general business and economic conditions or turbulence in domestic or global financial markets could adversely affect Independent Bank Corporation’s revenues and the values of its assets and liabilities, reduce the availability of funding from certain financial institutions, lead to a tightening of credit, and increase stock price volatility. In addition, changes to statutes, regulations, or regulatory policies or practices could affect Independent Bank Corporation in substantial and unpredictable ways. Independent Bank Corporation’s results could also be adversely affected by changes in interest rates; further increases in unemployment rates; deterioration in the credit quality of its loan portfolios or in the value of the collateral securing those loans; deterioration in the value of its investment securities; legal and regulatory developments; litigation; increased competition from both banks and non-banks; changes in the level of tariffs and other trade policies of the United States and its global trading partners; changes in customer behavior and preferences; breaches in data security; failures to safeguard personal information; effects of mergers and acquisitions and related integration; effects of critical accounting policies and judgments; and management’s ability to effectively manage credit risk, market risk, operational risk, compliance risk, strategic risk, interest rate risk, liquidity risk and reputation risk.

Certain risks and important factors that could affect Independent Bank Corporation's future results are identified in its Annual Report on Form 10-K for the year ended December 31, 2021 and other reports filed with the SEC, including among other things under the heading “Risk Factors” in such Annual Report on Form 10-K. Any forward-looking statement speaks only as of the date on which it is made, and Independent Bank Corporation undertakes no obligation to update any forward-looking statement, whether to reflect events or circumstances, after the date on which the statement is made, to reflect new information or the occurrence of unanticipated events, or otherwise.

4
INDEPENDENT BANK CORPORATION AND SUBSIDIARIES
Consolidated Statements of Financial Condition

   
March 31,
2022
    
December 31,
2021
  
   
(unaudited)
  
   
(In thousands, except share
  
   
amounts)
  
Assets
  
Cash and due from banks
  
$
46,600
    
$
51,069
  
Interest bearing deposits
    
63,221
      
58,404
  
Cash and Cash Equivalents
    
109,821
      
109,473
  
Securities available for sale
    
1,400,137
      
1,412,830
  
Federal Home Loan Bank and Federal Reserve Bank stock, at cost
    
17,653
      
18,427
  
Loans held for sale, carried at fair value
    
29,514
      
55,470
  
Loans held for sale, carried at lower of cost or fair value
    
-
      
34,811
  
Loans
                
Commercial
    
1,257,601
      
1,203,581
  
Mortgage
    
1,170,059
      
1,139,659
  
Installment
    
576,405
      
561,805
  
Total Loans
    
3,004,065
      
2,905,045
  
Allowance for credit losses
    
(45,627
)
    
(47,252
)
Net Loans
    
2,958,438
      
2,857,793
  
Other real estate and repossessed assets
    
438
      
245
  
Property and equipment, net
    
37,385
      
36,404
  
Bank-owned life insurance
    
54,984
      
55,279
  
Capitalized mortgage loan servicing rights, carried at fair value
    
35,933
      
26,232
  
Other intangibles
    
3,104
      
3,336
  
Goodwill
    
28,300
      
28,300
  
Accrued income and other assets
    
86,276
      
66,140
  
Total Assets
  
$
4,761,983
    
$
4,704,740
  
                 
Liabilities and Shareholders' Equity
  
Deposits
                
Non-interest bearing
  
$
1,318,377
    
$
1,321,601
  
Savings and interest-bearing checking
    
1,972,462
      
1,897,487
  
Reciprocal
    
605,332
      
586,626
  
Time
    
306,382
      
308,438
  
Brokered time
    
2,945
      
2,938
  
Total Deposits
    
4,205,498
      
4,117,090
  
Other borrowings
    
30,006
      
30,009
  
Subordinated debt
    
39,376
      
39,357
  
Subordinated debentures
    
39,609
      
39,592
  
Accrued expenses and other liabilities
    
92,045
      
80,208
  
Total Liabilities
    
4,406,534
      
4,306,256
  
                 
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:
    
-
      
-
  
21,168,230 shares at March 31, 2022 and 21,171,036 shares at December 31, 2021
    
321,981
      
323,401
  
Retained earnings
    
87,882
      
74,582
  
Accumulated other comprehensive income (loss)
    
(54,414
)
    
501
  
Total Shareholders’ Equity
    
355,449
      
398,484
  
Total Liabilities and Shareholders’ Equity
  
$
4,761,983
    
$
4,704,740
  

5
INDEPENDENT BANK CORPORATION AND SUBSIDIARIES
Consolidated Statements of Operations

   
Three Months Ended
  
   
March 31,
2022
    
December 31,
2021
    
March 31,
2021
  
   
(unaudited)
  
Interest Income
  
(In thousands, except per share amounts)
  
Interest and fees on loans
  
$
28,418
    
$
30,316
    
$
28,105
  
Interest on securities available for sale
                        
Taxable
    
4,552
      
4,114
      
2,796
  
Tax-exempt
    
1,554
      
1,577
      
1,384
  
Other investments
    
217
      
217
      
217
  
Total Interest Income
    
34,741
      
36,224
      
32,502
  
Interest Expense
                        
Deposits
    
767
      
977
      
1,256
  
Other borrowings and subordinated debt and debentures
    
973
      
962
      
962
  
Total Interest Expense
    
1,740
      
1,939
      
2,218
  
Net Interest Income
    
33,001
      
34,285
      
30,284
  
Provision for credit losses
    
(1,573
)
    
630
      
(474
)
Net Interest Income After Provision for Credit Losses
    
34,574
      
33,655
      
30,758
  
Non-interest Income
                        
Interchange income
    
3,082
      
3,306
      
3,049
  
Service charges on deposit accounts
    
2,957
      
2,992
      
1,916
  
Net gains (losses) on assets
                        
Mortgage loans
    
835
      
5,600
      
12,828
  
Securities available for sale
    
70
      
(10
)
    
1,416
  
Mortgage loan servicing, net
    
9,641
      
1,269
      
5,167
  
Other
    
2,363
      
2,614
      
2,030
  
Total Non-interest Income
    
18,948
      
15,771
      
26,406
  
Non-interest Expense
                        
Compensation and employee benefits
    
20,130
      
19,905
      
18,522
  
Occupancy, net
    
2,543
      
2,216
      
2,343
  
Data processing
    
2,216
      
2,851
      
2,374
  
Furniture, fixtures and equipment
    
1,045
      
1,060
      
1,003
  
Interchange expense
    
1,011
      
1,083
      
948
  
Communications
    
757
      
739
      
881
  
Advertising
    
680
      
599
      
489
  
Loan and collection
    
559
      
819
      
759
  
FDIC deposit insurance
    
522
      
413
      
330
  
Legal and professional
    
493
      
534
      
499
  
Conversion related expenses
    
44
      
191
      
218
  
Net gains on other real estate and repossessed assets
    
(55
)
    
(28
)
    
(180
)
Costs (recoveries) related to unfunded lending commitments
    
(355
)
    
844
      
(32
)
Other
    
1,860
      
2,728
      
1,867
  
Total Non-interest Expense
    
31,450
      
33,954
      
30,021
  
Income Before Income Tax
    
22,072
      
15,472
      
27,143
  
Income tax expense
    
4,105
      
2,964
      
5,106
  
Net Income
  
$
17,967
    
$
12,508
    
$
22,037
  
Net Income Per Common Share
                        
Basic
  
$
0.85
    
$
0.59
    
$
1.01
  
Diluted
  
$
0.84
    
$
0.58
    
$
1.00
  

6
INDEPENDENT BANK CORPORATION AND SUBSIDIARIES
Selected Financial Data

   
March 31,
2022
    
December 31,
2021
    
September 30,
2021
    
June 30,
2021
    
March 31,
2021
  
   
(unaudited)
  
   
(Dollars in thousands except per share data)
  
Three Months Ended
                              
Net interest income
  
$
33,001
    
$
34,285
    
$
33,803
    
$
31,393
    
$
30,284
  
Provision for credit losses
    
(1,573
)
    
630
      
(659
)
    
(1,425
)
    
(474
)
Non-interest income
    
18,948
      
15,771
      
19,695
      
14,771
      
26,406
  
Non-interest expense
    
31,450
      
33,954
      
34,512
      
32,536
      
30,021
  
Income before income tax
    
22,072
      
15,472
      
19,645
      
15,053
      
27,143
  
Income tax expense
    
4,105
      
2,964
      
3,683
      
2,665
      
5,106
  
Net income
  
$
17,967
    
$
12,508
    
$
15,962
    
$
12,388
    
$
22,037
  
                                         
Basic earnings per share
  
$
0.85
    
$
0.59
    
$
0.74
    
$
0.57
    
$
1.01
  
Diluted earnings per share
    
0.84
      
0.58
      
0.73
      
0.56
      
1.00
  
Cash dividend per share
    
0.22
      
0.21
      
0.21
      
0.21
      
0.21
  
 
                                        
Average shares outstanding
    
21,191,860
      
21,256,367
      
21,515,669
      
21,749,654
      
21,825,937
  
Average diluted shares outstanding
    
21,398,128
      
21,473,963
      
21,726,346
      
21,966,829
      
22,058,503
  
 
                                        
Performance Ratios
                                        
Return on average assets
    
1.54
%
    
1.07
%
    
1.40
%
    
1.12
%
    
2.10
%
Return on average equity
    
19.38
      
12.61
      
15.93
      
12.78
      
23.51
  
Efficiency ratio (1)
    
59.62
      
66.68
      
63.47
      
69.24
      
53.48
  
                                         
As a Percent of Average Interest-Earning Assets (1)
                                        
Interest income
    
3.16
%
    
3.30
%
    
3.37
%
    
3.22
%
    
3.27
%
Interest expense
    
0.16
      
0.17
      
0.19
      
0.20
      
0.22
  
Net interest income
    
3.00
      
3.13
      
3.18
      
3.02
      
3.05
  
                                         
Average Balances
                                        
Loans
  
$
2,980,098
    
$
2,957,985
    
$
2,903,700
    
$
2,859,544
    
$
2,834,012
  
Securities available for sale
    
1,407,225
      
1,367,038
      
1,317,382
      
1,274,556
      
1,093,618
  
Total earning assets
    
4,492,757
      
4,433,400
      
4,296,662
      
4,223,570
      
4,047,952
  
Total assets
    
4,721,205
      
4,654,491
      
4,513,774
      
4,434,760
      
4,254,294
  
Deposits
    
4,158,528
      
4,069,901
      
3,934,937
      
3,879,715
      
3,698,811
  
Interest bearing liabilities
    
2,950,337
      
2,863,057
      
2,740,444
      
2,674,425
      
2,589,102
  
Shareholders' equity
    
376,010
      
393,477
      
397,542
      
388,780
      
380,111
  
                                         
End of Period
                                        
Capital
                                        
Tangible common equity ratio
    
6.85
%
    
7.85
%
    
8.02
%
    
8.21
%
    
8.08
%
Average equity to average assets
    
7.96
      
8.45
      
8.81
      
8.77
      
8.93
  
Common shareholders' equity per share of common stock
  
$
16.79
    
$
18.82
    
$
18.76
    
$
18.30
    
$
17.79
  
Tangible common equity per share of common stock
    
15.31
      
17.33
      
17.27
      
16.82
      
16.30
  
Total shares outstanding
    
21,168,230
      
21,171,036
      
21,321,092
      
21,632,912
      
21,773,734
  
                                         
Selected Balances
                                        
Loans
  
$
3,004,065
    
$
2,905,045
    
$
2,883,978
    
$
2,814,559
    
$
2,784,224
  
Securities available for sale
    
1,400,137
      
1,412,830
      
1,348,378
      
1,330,660
      
1,247,280
  
Total earning assets
    
4,514,590
      
4,484,987
      
4,405,189
      
4,246,410
      
4,209,017
  
Total assets
    
4,761,983
      
4,704,740
      
4,622,340
      
4,461,272
      
4,426,440
  
Deposits
    
4,205,498
      
4,117,090
      
4,012,068
      
3,862,466
      
3,858,575
  
Interest bearing liabilities
    
2,956,736
      
2,865,090
      
2,784,554
      
2,633,747
      
2,626,280
  
Shareholders' equity
    
355,449
      
398,484
      
400,031
      
395,974
      
387,329
  

(1)
Presented on a fully tax equivalent basis assuming a marginal tax rate of 21%.

7
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,
  
   
2022
    
2021
  
   
(Dollars in thousands)
  
Net Interest Margin, Fully Taxable
            
Equivalent ("FTE")
            
             
Net interest income
  
$
33,001
    
$
30,284
  
Add:  taxable equivalent adjustment
    
482
      
404
  
Net interest income - taxable equivalent
  
$
33,483
    
$
30,688
  
Net interest margin (GAAP) (1)
    
2.96
%
    
3.01
%
Net interest margin (FTE) (1)
    
3.00
%
    
3.05
%

(1)
Annualized.

Tangible Common Equity Ratio

    
March 31,
2022
    
December 31,
2021
    
September 30,
2021
    
June 30,
2021
    
March 31,
2021
  
   
(Dollars in thousands)
  
Common shareholders' equity
  
$
355,449
    
$
398,484
    
$
400,031
    
$
395,974
    
$
387,329
  
Less:
                                        
Goodwill
    
28,300
      
28,300
      
28,300
      
28,300
      
28,300
  
Other intangibles
    
3,104
      
3,336
      
3,579
      
3,821
      
4,063
  
Tangible common equity
  
$
324,045
    
$
366,848
    
$
368,152
    
$
363,853
    
$
354,966
  
                                         
Total assets
  
$
4,761,983
    
$
4,704,740
    
$
4,622,340
    
$
4,461,272
    
$
4,426,440
  
Less:
                                        
Goodwill
    
28,300
      
28,300
      
28,300
      
28,300
      
28,300
  
Other intangibles
    
3,104
      
3,336
      
3,579
      
3,821
      
4,063
  
Tangible assets
  
$
4,730,579
    
$
4,673,104
    
$
4,590,461
    
$
4,429,151
    
$
4,394,077
  
                                         
Common equity ratio
    
7.46
%
    
8.47
%
    
8.65
%
    
8.88
%
    
8.75
%
Tangible common equity ratio
    
6.85
%
    
7.85
%
    
8.02
%
    
8.21
%
    
8.08
%
                                         
Tangible Common Equity per Share of Common Stock:
                                        
                                         
Common shareholders' equity
  
$
355,449
    
$
398,484
    
$
400,031
    
$
395,974
    
$
387,329
  
Tangible common equity
  
$
324,045
    
$
366,848
    
$
368,152
    
$
363,853
    
$
354,966
  

                                       
Shares of common stock outstanding (in thousands)
    
21,168
      
21,171
      
21,321
      
21,633
      
21,774
  
Common shareholders' equity per share of common stock
  
$
16.79
    
$
18.82
    
$
18.76
    
$
18.30
    
$
17.79
  
Tangible common equity per share of common stock
  
$
15.31
    
$
17.33
    
$
17.27
    
$
16.82
    
$
16.30
  

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.


8
Exhibit 99.2

INDEPENDENT BANK CORPORATION AND SUBSIDIARIES
Supplemental Data

Non-performing assets (1)

   
March 31,
2022
    
December 31,
2021
    
September 30,
2021
    
June 30,
2021
    
March 31,
2021
  
   
(Dollars in thousands)
  
Non-accrual loans
  
$
5,893
    
$
5,545
    
$
5,917
    
$
5,531
    
$
7,548
  
Loans 90 days or more past due and still accruing interest
    
-
      
-
      
-
      
14
      
-
  
Subtotal
    
5,893
      
5,545
      
5,917
      
5,545
      
7,548
  
Less:  Government guaranteed loans
    
859
      
435
      
327
      
427
      
459
  
Total non-performing loans
    
5,034
      
5,110
      
5,590
      
5,118
      
7,089
  
Other real estate and repossessed assets
    
438
      
245
      
224
      
296
      
346
  
Total non-performing assets
  
$
5,472
    
$
5,355
    
$
5,814
    
$
5,414
    
$
7,435
  
                                         
As a percent of Portfolio Loans Non-performing loans
    
0.17
%
    
0.18
%
    
0.19
%
    
0.18
%
    
0.25
%
Allowance for credit losses
    
1.52
      
1.63
      
1.62
      
1.63
      
1.68
  
Non-performing assets to total assets
    
0.11
      
0.11
      
0.13
      
0.12
      
0.17
  
Allowance for credit losses as a percent of non-performing loans
    
906.38
      
924.70
      
837.19
      
897.34
      
659.54
  

(1)
Excludes loans classified as "trouble debt restructured" that are not past due.

  Troubled debt restructurings ("TDR")

   
March 31, 2022
  
   
Commercial
    
Retail (1)
    
Total
  
   
(In thousands)
  
Performing TDR's
  
$
4,410
    
$
30,622
    
$
35,032
  
Non-performing TDR's (2)
    
-
      
875
  (3)
   
875
  
Total
  
$
4,410
    
$
31,497
    
$
35,907
  

   
December 31, 2021
  
   
Commercial
    
Retail (1)
    
Total
  
   
(In thousands)
  
Performing TDR's
  
$
4,481
    
$
31,589
    
$
36,070
  
Non-performing TDR's (2)
    
-
      
1,016
  (3)
    
1,016
  
Total
  
$
4,481
    
$
32,605
    
$
37,086
  

(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 credit losses


  
 
    
Three months ended
March 31,
  
   
2022
    
2021
  
   
Loans
    
Unfunded
Commitments
    
Loans
    
Unfunded
Commitments
  
 
   
(Dollars in thousands)
  
Balance at beginning of period
  
$
47,252
    
$
4,481
    
$
35,429
    
$
1,805
  
Additions (deductions)
                                
Impact of adoption of ASC 326
    
-
      
-
      
11,574
      
1,469
  
Provision for credit losses
    
(1,573
)
    
-
      
(474
)
    
-
  
Initial allowance on loans purchased with credit deterioration
    
-
      
-
      
134
      
-
  
Recoveries credited to allowance
    
621
      
-
      
548
      
-
  
Loans charged against the allowance
    
(673
)
    
-
      
(456
)
    
-
  
Recoveries included in non-interest expense
    
-
      
(355
)
    
-
      
(32
)
Balance at end of period
  
$
45,627
    
$
4,126
    
$
46,755
    
$
3,242
  
                                 
Net loans charged (recovered) against the allowance to average Portfolio Loans
    
0.01
%
            
(0.01
)%
        

Capitalization

   
March 31,
2022
    
December 31,
2021
  
   
(In thousands)
  
Subordinated debt
  
$
39,376
    
$
39,357
  
Subordinated debentures
    
39,609
      
39,592
  
Amount not qualifying as regulatory capital
    
(600
)
    
(581
)
Amount qualifying as regulatory capital
    
78,385
      
78,368
  
Shareholders’ equity
                
Common stock
    
321,981
      
323,401
  
Retained earnings
    
87,882
      
74,582
  
Accumulated other comprehensive income (loss)
    
(54,414
)
    
501
  
Total shareholders’ equity
    
355,449
      
398,484
  
Total capitalization
  
$
433,834
    
$
476,852
  

2
Non-Interest Income

   
Three months ended
  
   
March 31,
2022
    
December 31,
2021
    
March 31,
2021
  
   
(In thousands)
  
Interchange income
  
$
3,082
    
$
3,306
    
$
3,049
  
Service charges on deposit accounts
    
2,957
      
2,992
      
1,916
  
Net gains (losses) on assets
                        
Mortgage loans
    
835
      
5,600
      
12,828
  
Securities
    
70
      
(10
)
    
1,416
  
Mortgage loan servicing, net
    
9,641
      
1,269
      
5,167
  
Investment and insurance commissions
    
738
      
708
      
583
  
Bank owned life insurance
    
138
      
156
      
139
  
Other
    
1,487
      
1,750
      
1,308
  
Total non-interest income
  
$
18,948
    
$
15,771
    
$
26,406
  

Capitalized Mortgage Loan Servicing Rights

   
Three months ended
March 31,
  
   
2022
    
2021
  
   
(In thousands)
  
Balance at beginning of period
  
$
26,232
    
$
16,904
  
Originated servicing rights capitalized
    
2,143
      
3,369
  
Change in fair value
    
7,558
      
3,257
  
Balance at end of period
  
$
35,933
    
$
23,530
  

3
Mortgage Loan Activity

   
Three months ended
  
   
March 31,
2022
    
December 31,
2021
    
March 31,
2021
  
 
   
(Dollars in thousands)
  
Mortgage loans originated
  
$
270,194
    
$
424,563
    
$
509,003
  
Mortgage loans sold
    
221,725
      
291,196
      
377,418
  
Net gains on mortgage loans
    
835
      
5,600
      
12,828
  
Net gains as a percent of mortgage loans sold  ("Loan Sales Margin")
    
0.38
%
    
1.92
%
    
3.40
%
Fair value adjustments included in the Loan Sales Margin
    
(1.87
)
    
(0.90
)
    
(0.98
)

Non-Interest Expense

   
Three months ended
  
   
March 31,
2022
    
December 31,
2021
    
March 31,
2021
  
   
(In thousands)
  
Compensation
  
$
12,435
    
$
11,462
    
$
10,121
  
Performance-based compensation
    
3,662
      
4,473
      
4,292
  
Payroll taxes and employee benefits
    
4,033
      
3,970
      
4,109
  
Compensation and employee benefits
    
20,130
      
19,905
      
18,522
  
Occupancy, net
    
2,543
      
2,216
      
2,343
  
Data processing
    
2,216
      
2,851
      
2,374
  
Furniture, fixtures and equipment
    
1,045
      
1,060
      
1,003
  
Interchange expense
    
1,011
      
1,083
      
948
  
Communications
    
757
      
739
      
881
  
Advertising
    
680
      
599
      
489
  
Loan and collection
    
559
      
819
      
759
  
FDIC deposit insurance
    
522
      
413
      
330
  
Legal and professional
    
493
      
534
      
499
  
Amortization of intangible assets
    
232
      
243
      
242
  
Supplies
    
123
      
151
      
174
  
Correspondent bank service fees
    
77
      
90
      
100
  
Conversion related expenses
    
44
      
191
      
218
  
Provision for loss reimbursement on sold loans
    
33
      
38
      
34
  
Net gains on other real estate and repossessed assets
    
(55
)
    
(28
)
    
(180
)
Costs (recoveries) related to unfunded lending commitments
    
(355
)
    
844
      
(32
)
Other
    
1,395
      
2,206
      
1,317
  
Total non-interest expense
  
$
31,450
    
$
33,954
    
$
30,021
  

4
Average Balances and Tax Equivalent Rates

    
Three Months Ended
March 31,
  
   
2022
    
2021
  
    
Average
Balance
    
Interest
    
Rate (2)
    
Average
Balance
    
Interest
    
Rate (2)
  
   
(Dollars in thousands)
  
Assets
                                    
Taxable loans
  
$
2,971,566
    
$
28,340
      
3.85
%
  
$
2,827,335
    
$
28,039
      
4.00
%
Tax-exempt loans (1)
    
8,532
      
99
      
4.71
      
6,677
      
84
      
5.10
  
Taxable securities
    
1,080,252
      
4,552
      
1.69
      
782,471
      
2,796
      
1.43
  
Tax-exempt securities (1)
    
326,973
      
2,015
      
2.47
      
311,147
      
1,770
      
2.28
  
Interest bearing cash
    
87,317
      
37
      
0.17
      
101,895
      
29
      
0.12
  
Other investments
    
18,117
      
180
      
4.03
      
18,427
      
188
      
4.14
  
Interest Earning Assets
    
4,492,757
      
35,223
      
3.16
      
4,047,952
      
32,906
      
3.27
  
Cash and due from banks
    
58,676
                      
56,371
                  
Other assets, net
    
169,772
                      
149,971
                  
Total Assets
  
$
4,721,205
                    
$
4,254,294
                  
                                                 
Liabilities
                                                
Savings and interest-
                                                
bearing checking
  
$
2,503,014
      
641
      
0.10
    
$
2,140,405
      
675
      
0.13
  
Time deposits
    
338,354
      
126
      
0.15
      
339,872
      
581
      
0.69
  
Other borrowings
    
108,969
      
973
      
3.62
      
108,825
      
962
      
3.59
  
Interest Bearing Liabilities
    
2,950,337
      
1,740
      
0.24
      
2,589,102
      
2,218
      
0.35
  
Non-interest bearing deposits
    
1,317,160
                      
1,218,534
                  
Other liabilities
    
77,698
                      
66,547
                  
Shareholders’ equity
    
376,010
                      
380,111
                  
Total liabilities and
shareholders’ equity
  
$
4,721,205
                    
$
4,254,294
                  
                                                 
Net Interest Income
          
$
33,483
                    
$
30,688
          
                                                 
Net Interest Income as a Percent
of Average Interest Earning Assets
                    
3.00
%
                    
3.05
%

(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
Commercial Loan Portfolio Analysis as of March 31, 2022

   
Total Commercial Loans
  
     
All Loans
    
Watch Credits
    
Percent of Loan
Category in Watch Credit
  
Loan Category
      
Performing
    
Non-accrual
    
Total
      
   
(Dollars in thousands)
  
Land
  
$
9,878
    
$
790
    
$
-
    
$
790
      
8.0
%
Land Development
    
16,421
      
30
      
-
      
30
      
0.2
  
Construction
    
74,390
      
-
      
-
      
-
      
0.0
  
Income Producing
    
396,726
      
1,924
      
-
      
1,924
      
0.5
  
Owner Occupied
    
404,607
      
23,329
      
-
      
23,329
      
5.8
  
Total Commercial Real Estate Loans
  
$
902,022
    
$
26,073
      
-
    
$
26,073
      
2.9
  
                                         
Other Commercial Loans
  
$
355,579
    
$
4,189
      
59
    
$
4,248
      
1.2
  
Total non-performing commercial loans
                  
$
59
                  

Commercial Loan Portfolio Analysis as of December 31, 2021

   
Total Commercial Loans
  
         
Watch Credits
    
Percent of Loan
Category in Watch Credit
  
Loan Category
  
All Loans
    
Performing
    
Non-accrual
    
Total
      
   
(Dollars in thousands)
  
Land
  
$
13,621
    
$
114
    
$
-
    
$
114
      
0.8
%
Land Development
    
14,854
      
32
      
-
      
32
      
0.2
  
Construction
    
67,663
      
-
      
-
      
-
      
0.0
  
Income Producing
    
402,936
      
2,215
      
-
      
2,215
      
0.5
  
Owner Occupied
    
360,614
      
21,960
      
-
      
21,960
      
6.1
  
Total Commercial Real Estate Loans
  
$
859,688
    
$
24,321
      
-
    
$
24,321
      
2.8
  
                                         
Other Commercial Loans
  
$
343,893
    
$
12,546
      
62
    
$
12,608
      
3.7
  
Total non-performing commercial loans
                  
$
62
                  


6
Exhibit 99.3

 Independent Bank Corporation   Earnings Call   First Quarter 2022  April 26, 2022  (NASDAQ: IBCP) 
 
 Cautionary note regarding forward-looking statements  This presentation contains forward-looking statements about Independent Bank Corporation. Statements that are not historical or current facts, including statements about beliefs and expectations, are forward-looking statements and are based on the information available to, and assumptions and estimates made by, management as of the date hereof. These forward-looking statements cover, among other things, anticipated future revenue and expenses and the future plans and prospects of Independent Bank Corporation. Forward-looking statements involve inherent risks and uncertainties, and important factors could cause actual results to differ materially from those anticipated. The COVID-19 pandemic is adversely affecting Independent Bank Corporation, its customers, counterparties, employees, and third-party service providers, and the ultimate extent of the impacts on its business, financial position, results of operations, liquidity, and prospects is uncertain. Continued deterioration in general business and economic conditions or turbulence in domestic or global financial markets could adversely affect Independent Bank Corporation’s revenues and the values of its assets and liabilities, reduce the availability of funding from certain financial institutions, lead to a tightening of credit, and increase stock price volatility. In addition, changes to statutes, regulations, or regulatory policies or practices could affect Independent Bank Corporation in substantial and unpredictable ways. Independent Bank Corporation’s results could also be adversely affected by changes in interest rates; further increases in unemployment rates; deterioration in the credit quality of its loan portfolios or in the value of the collateral securing those loans; deterioration in the value of its investment securities; legal and regulatory developments; litigation; increased competition from both banks and non-banks; changes in the level of tariffs and other trade policies of the United States and its global trading partners; changes in customer behavior and preferences; breaches in data security; failures to safeguard personal information; effects of mergers and acquisitions and related integration; effects of critical accounting policies and judgments; and management’s ability to effectively manage credit risk, market risk, operational risk, compliance risk, strategic risk, interest rate risk, liquidity risk and reputation risk.   Certain risks and important factors that could affect Independent Bank Corporation's future results are identified in its Annual Report on Form 10-K for the year ended December 31, 2021 and other reports filed with the SEC, including among other things under the heading “Risk Factors” in such Annual Report on Form 10-K. Any forward-looking statement speaks only as of the date on which it is made, and Independent Bank Corporation undertakes no obligation to update any forward-looking statement, whether to reflect events or circumstances after the date on which the statement is made, to reflect new information or the occurrence of unanticipated events, or otherwise.  2 
 
 Agenda  Formal Remarks.  William B. (Brad) Kessel, President and Chief Executive Officer  Gavin A. Mohr, Executive Vice President and Chief Financial Officer  Joel 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.  3 
 
 Historical Quarterly Financial Data  4 
 
 1Q 2022 Financial Highlights  Income Statement  Pre-tax, pre-provision income of $20.5 million compared to $26.7 million in the year ago quarter.  Net income of $18.0 million, or $0.84 per diluted share compared to $22.0 million, or $1.00 per diluted share in the year ago quarter.  Net interest income of $33.0 million, compared to $30.3 million, in the year ago quarter.  Mortgage servicing rights change (the “MSR Change”) due to price of $8.5 million ($0.31 per diluted share, after taxes) compared to a positive $4.6 million ($0.17 per diluted share, after taxes) in the year ago quarter.   Provision for credit losses credit of $1.6 million compared to a credit of $0.5 million in the year ago quarter.  Return on average assets of 1.54%.   Return on average equity of 19.38%.  Balance Sheet/Capital  Total portfolio loans increased by $99.0 million or 13.8% annualized.  Total deposits grew by $88.4 million or 8.7% annualized.  Paid a 22 cent per share cash dividend on common stock on February 15, 2022.  5 
 
 Our Michigan Markets  6  Source: S&P Global Market Intelligence and Company documents. Map does not include loan production offices. Deposit market share data based on FDIC Summary of Deposits Annual Survey as of June 30, 2021.  Note: Loan and deposit balances exclude the loans and deposits (such as brokered deposits) that are not clearly allocable to a certain market region. Loans specifically exclude: $200 million of Ohio mortgage loans, $45 million of resort loans, $6 million of SBA PPP loans and $10 million of purchased mortgage loans.  94  96  75  69  Michigan’s premier community bank. #1 deposit market share amongst banks headquartered in Michigan and #9 deposit market share overall.   Top 10 market share in 20 of 24 counties of operation – with opportunity to gain market share in attractive Michigan markets.  Low cost and stable deposit base in East/”Thumb” and Central regions utilized to fund loan growth in the West and Southeast regions (higher growth & more metropolitan).  New full service bank branch opening in Holland, Michigan in 3Q’22.  Opened Loan Production Offices in Ottawa County and Macomb County in 3Q’21.   8 Loan Production Offices (LPOs), including 6 throughout Michigan and 2 in Ohio (residential mortgage lending only).  Branches (62)  East / “Thumb”  Branches: 20  Deposits: $1,052M  Loans: $635M  Southeast  Branches: 8  Deposits: $563M  Loans: $942M  Central  Branches: 10  Deposits: $506M  Loans: $190M  West  Branches: 20  Deposits: $1,225M  Loans: $649M  Northwest  Branches: 4  Deposits: $304M  Loans: $311M 
 
 Select Economic Statistics  7  Unemployment Trends (%)  Total Employees (Thousands)  Regional Average Home Sales Price (Thousands)  Annualized Home Sales (Thousands)  Select Economic Statistics   Unemployment rates returning to normal levels  Stable prices in   key markets  Strong job growth continues  Rebounding Michigan home sales  106,129  213,065  294,004 
 
 Low Cost Deposit Franchise Focused on Core Deposit Growth  8  Substantially core funding – $3.90 billion of non-maturity deposit accounts (92.7% of total deposits).  Total deposits increased $88.4 million (8.7%) since 12/31/21 with non-interest bearing down $3.2 million, savings and interest- bearing checking up $75.0 million, reciprocal up $18.7 million and time down $2.1 million.  Deposits by Customer Type:  Retail – 52.6%  Commercial – 33.8%  Municipal – 13.6%  Deposit Composition – 3/31/22  Deposit Highlights  Michigan Deposit Market Share  $4.2B  Core Deposits: 92.7%  Cost of Deposits (%)/Total Deposits ($B)  Note: Core deposits defined as total deposits less maturity deposits.  
 
  9  9  All functionality within online banking can be done in the new IB ONE Wallet app.  Customers can reset their own passwords in the app.   Instantly transfer funds to other IB customers.   IB Card Controls allows you to turn your debit card on or off, restrict transactions by category or dollar amount, and easily set up purchase alerts.   ONE Wallet+, available in Online Banking and through the IB ONE Wallet app, is a tool that allows you to consolidate multiple accounts, including other bank accounts, credit cards, and investment accounts into one place. You can create budgets, manage trends, and even set financial goals.  Digital Transformation 
 
 Diversified Loan PortfolioFocused on High Quality Growth  10  Lending Highlights  Note: Portfolio loans exclude loans HFS.  Portfolio loan changes in 1Q’22:  Commercial – increased $54.0 million (excluding PPP increased $74.5 million). PPP loan balances decreased $20.4 million and totaled $5.9 million at March 31, 2022.  Mortgage – increased $30.4 million.  Installment – increased $14.6 million.  Mortgage loan portfolio weighted average FICO and LTV of 752 and 78%, respectively and average balance of $226,758.  Installment weighted average FICO of 758 and average balance of $24,531.  Commercial loan rate mix:  47% fixed / 53% variable.  Indices – 73% tied to Prime, 23% tied to LIBOR, 2% tied to a US Treasury rate and 2% tied to SOFR.  Mortgage loan (including HECL) rate mix:   66% fixed / 34% adjustable or variable.   Indices – 25% tied to Prime, 44% tied to LIBOR , 19% tied to a US Treasury rate and 12% tied to SOFR  Loan Composition – 3/31/22  $3.0B  Yield on Loans (%)/Total Portfolio Loans ($B) 
 
 Loans by Industry as a % of Total Commercial Loans   ($ in millions)  Investor RE by Collateral Type as a % of Total Commercial Loans ($ in millions)   11  Commercial Loan Portfolio Concentrations  11   Note: $811 million, or 64.5% of the commercial loan portfolio is C&I or owner occupied, while $446 million, or 35.5% is investment real estate. The percentage concentrations are based on the entire commercial portfolio of $1.258 billion as of March 31, 2022 
 
 Investment Securities Portfolio  12  Highlights  High quality, liquid, diverse portfolio with moderate duration.  $148.9 million of municipal bonds have been hedged with swaps.   Net unrealized loss of $61.5 million, representing 4.2% of amortized cost net of swaps.   Portfolio ratings: 53% AAA rated (or backed by the U.S. Government); 29% AA rated; 9% A rated; 7% BAA rated and 2% unrated.  4.66 year estimated average duration with a weighted average yield of 1.92% (with TE gross up) including swaps.  Approximately 30.0% of the portfolio is variable rate including swaps.  $1.4B  Investment Portfolio by Type (3/31/22)  Investment Securities Activity – 1Q’22  e.  Agency, Agency MBS, CMO & CMBS   Municipal/Govern-ment     Asset-backed  Private Label Mortgage        Corp.        Total     (Dollars in 000’s)  Purchases (at cost)  $15,921  $1,500  $93,884  $15,967  $6,826  $134,101  Repayments   22,378  10,426  27,297  2,523  2,741  65,366  Sales  --  1,396  2,929  4,325  Purchases in 1Q’22  Yield (TE)  2.23%  2.20%  1.96%  2.10%  2.59%  2.04%  Duration   4.69%  4.75%  1.10%  2.16%  5.19%  1.90% 
 
 Strong Capital Position  13   TCE / TA (%)   Leverage Ratio (%)   CET1 Ratio (%)   Total RBC Ratio (%)   Capital retention to support (i) organic growth and (ii) acquisitions; and   Return of capital through (i) strong and consistent dividend and (ii) share repurchases  Long-Term Capital Priorities:  Strong Capital Position 
 
 Highlights  Interest rate sensitivity profile of the loan and securities portfolios, in combination with a low cost core deposit base, positions us as slightly asset sensitive.  Net interest income decreased $1.3 million in 1Q’22 vs. 4Q’21 due primarily to a $1.8 million decrease in interest income related to PPP fee accretion.   Net interest margin was 3.00% during the first quarter of 2022, compared to 3.05% in the year-ago quarter and 3.13% in the fourth quarter of 2021.  Yields, NIM and Cost of Funds (%)  Net Interest Income ($ in Millions)   Net Interest Margin/Income  14 
 
 Linked Quarter Analysis  15  1Q’22 NIM Changes  Linked Quarter Average Balances and FTE Rates 
 
 Base-rate is a static balance sheet applying the spot yield curve from the valuation date.  Stable core funding base. Transaction accounts fund 44.6% of assets and other non-maturity deposits fund another 24.5% of assets. Limited wholesale funding of just 2.4% of assets.  17.0% of assets reprice in 1 month and 31.8% reprice in the next 12 months.   Continually evaluating strategies to manage NII through hedging as well as product pricing and structure.   16  Interest Rate Risk Management  Changes in Net Interest Income  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. 
 
 Strong Non-interest Income  17  Diverse sources of non-interest income, representing 35.3% of operating revenue in 1Q’22.  1Q’22 interchange income of $3.1 million compared to $3.0 million in the prior year quarter. This increase was primarily due to an increase in transaction volume.   Mortgage banking:   $0.8 million in net gains on mortgage loans in 1Q’22 vs. $12.8 million in the year ago quarter. A combination of lower mortgage loan sales volume, reduced profit margins and fair value adjustments led to this decrease.   $270.2 million in mortgage loan originations in 1Q’22 vs. $509.0 million in 1Q’21 and $424.6 million in 4Q’21.  1Q’22 mortgage loan servicing includes a $8.5 million ($0.31 per diluted share, after tax) increase in fair value adjustment due to price compared to a increase of $4.6 million ($0.17 per diluted share, after tax) in the year ago quarter.   Source: Company documents.  $18.9M  2022 YTD Non-interest Income (thousands)  Non-interest Income Trends ($M)  Highlights 
 
Focus on Improved Efficiency 18 Source: Company documents. Non-interest Expense ($M) Highlights Efficiency Ratio (4 quarter rolling average) 1Q’22 efficiency ratio of 59.6%. Compensation and employee benefits expense of $20.1 million compared to $18.5 in the prior year quarter. Compensation (salaries and wages) increased $2.3 million due to raises that were generally effective at the start of the year, a decreased level of compensation that was deferred in the first quarter of 2022 as direct origination costs (lower mortgage loan origination volume), an increase in lending personnel and higher health care insurance costs. $0.6 million decrease in incentive compensation accrual due to a decrease in mortgage lending volume. Payroll taxes and employee benefits decreased $0.1 million due to lower payroll taxes and 401(K) plan match. Data processing costs decreased $0.2 million due primarily to a onetime credit from the core data service provider. Costs related to the reserve for unfunded lending commitments decreased $0.3 million due primarily to an decrease in the balance of unfunded lending commitments. Opportunities exist to gain additional efficiencies as we continue to optimize our delivery channels. 65.0% 62.2% 60.3% 59.8% 55.9% 59.9% 61.7% 63.2% 64.8% Q1'20 Q2'20 Q3'20 Q4'20 Q1'21 Q2'21 Q3'21 Q4'21 1Q'22 $29.3 $28.7 $27.3 $33.6 $32.7 $30.0 $32.5 $34.5 $34.0 $31.5 $- $5.0 $10.0 $15.0 $20.0 $25.0 $30.0 $35.0 Q4'19 Q1'20 Q2'20 Q3'20 Q4'20 Q1'21 Q2'21 Q3'21 Q4'21 Q1'22 Compensation and Benefits Loan and Collection Occupancy Data Processing FDIC Insurance Other Total
 
 Credit Quality Summary  Note 1: Non-performing loans and non-performing assets exclude troubled debt restructurings that are performing.  Note 2: 12/31/16 30 to 89 days delinquent data excludes $1.63 million of payment plan receivables that were held for sale.  Non-performing Assets ($ in Millions)  ORE/ORA ($ in Millions)  Non-performing Loans ($ in Millions)  30 to 89 Days Delinquent ($ in Millions)  19 
 
 Classified Assets and New Default Trends  Note: Dollars all in millions.  Total Classified Assets  Commercial Loan New Defaults  Total Loan New Defaults  Retail Loan New Defaults  20 
 
 Troubled Debt Restructurings (TDRs)  TDR Highlights  Working with client base to maximize sustainable performance.  The specific reserves allocated to TDRs totaled $599m 3/31/22.  A majority of our TDRs are performing under their modified terms but remain in TDR status for the life of the loan.  96.5% of TDRs are current as of 3/31/22.  Commercial TDR Statistics:  14 loans with $4.7 million book balance.  100% performing.  WAR of 5.20%  Well seasoned portfolio; all loans are accruing and performing, and have been for over a year since modification.  Retail TDR Statistics:  376 loans with $31.5 million book balance.  97.2% performing.  WAR of 4.02% (accruing loans).  Well seasoned portfolio; 99% of accruing loans are not only performing but have been for over a year since modification.  TDRs ($ in Millions)  96% of TDRs are Current  21 
 
 Note: Dollars all in millions.   Provision for Credit Losses   Loan Net Charge-Offs/Recoveries   Allowance for Credit Losses  Credit Cost Summary  22 
 
 2022 Outlook Update  Category  Outlook  Lending  Continued growth  IBCP goal of low double digit (approximately 10%) overall loan growth is based on increases in commercial loans, mortgage loans and consumer loans. Expect much of this growth to occur in the last three quarters of 2022. This growth forecast also assumes an improving Michigan economy.  Q1 Update: Total portfolio loans increased $99.0 million (13.8%) annualized in 1Q’22 which is higher than our forecasted range. Commercial, mortgage and installment loans all had positive growth in 1Q’22.   Net Interest Income  Growth driven primarily by higher average earning assets  The elimination of accelerated fee accretion ($8.9 million in 2021) related to Paycheck Protection Program will make net interest income (NII) growth challenging in 2022. IBCP goal low single digit (1%-3%) growth is primarily supported by an increase in earning assets. Expect the net interest margin (NIM) to trend lower (0.10% - 0.15%) in 2022 compared to full-year 2021. Primary driver is a reduction in earing asset yield. The forecast assumes a 0.25% increase in June and September in the federal funds rate and long-term interest rates up slightly over year end 2021 levels.   Q1 Update: 1Q’22 net interest income was $2.7 million (9.0%) higher than the prior year quarter. The net interest margin was 3.00% for the quarter, down 0.13% from the linked quarter and down 0.05% from the prior year quarter. Excluding the impact of PPP, 1Q’22 net interest margin was nearly unchanged from prior year and linked quarter. The increase in net interest income is due to an increase in average interest-earning assets that as partially offset by a decline in net interest margin.   Provision for Credit Losses  Steady asset quality metrics  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 1.63% at 12/31/21. A full year 2022 provision (expense) for credit losses of approximately 0.15% to 0.20% of average total portfolio loans would not be unreasonable.  Q1 Update: . The provision for credit losses was a credit of $1.6 million in 1Q’22 which was below our forecasted range of an expense of 0.15% to 0.20% of average portfolio loans. The provision credit was primarily the result of a decline in the adjustment to allocations based on subjective factors due in part to expected reduction in risk related to COVID-19.   Non-interest Income  IBCP forecasted 2022 quarterly range of $13 million to $17 million with the total for the year down 20% to 25% from 2021 actual of $76.6 million  Expect mortgage loan origination volumes in 2022 to be down by approximately 21%, interchange income in 2022 to increase approximately 5% as compared to 2021 and service charges on deposits to be collectively comparable to 2021 (a decline in NSF fees to be largely offset by an increase in treasury management related service charges).   Q1 Update: Non-interest income totaled $18.9 million in 1Q’22, which was higher than the forecasted range. 1Q’22 mortgage loan originations, sales and gains totaled $270.2 million, $221.7 million and $0.8 million, respectively. The decrease in net gains on mortgage loans sold was primarily due to lower sales volume, decreased profit margin on mortgage loan sales and a decrease in the fair value adjustments ($3.8 million related to unhedged salable construction mortgage loans) on the mortgage loan pipeline. Mortgage loan servicing generated a gain of $9.6 million in 1Q’22 due primarily to a positive $8.5 million fair value adjustment due to price. It is probable non-interest income will be below the forecasted range in 2022 primarily due to lower than anticipated mortgage loan production and net gains on mortgage loan sales.   Non-interest Expenses  IBCP forecasted 2022 quarterly range of $30.5 million to $32.5 million with the total for the year down (3%-5%) from the 2021 actual of $131.0 million.  The primary driver is a decrease in total compensation and employee benefits due primarily to a reduction in incentive compensation, conversion related expense and costs(recoveries) related to unfunded lending commitments.   Q1 Update: : Total non-interest expense was $31.5 million in the first quarter of 2022, within our forecasted range.   Income Taxes  Approximately an 18.5% effective income tax rate in 2022. This assumes a 21% statutory federal corporate income tax rate during 2022.   Q1 Update: Actual effective income tax rate of 18.6% for the 1Q’22.  Share Repurchases  2022 share repurchase authorization at approximately 5% (1.1 million) of outstanding shares. Expect total share repurchases in 2022 at the mid-point of this authorization.  Q1 Update: The Company repurchased 59,002 (5.4% of repurchase authorization) shares at an average price of $23.46 in the first quarter of 2022.   23 
 
  Strategic Initiatives  24  Serve consumers and businesses in our Markets in an inclusive way to include straight forward marketing, improved brand awareness and enhanced outreach efforts that foster strong customer relationships and engagement.  Improve net interest income via balanced loan growth, disciplined risk adjusted loan pricing and active management of deposit pricing.   Add new customers and grow revenue by leveraging new LPO’s and talented sales staff & outbound calling efforts.  Leverage data analytics for innovative targeted customer acquisitions, retention and cross sales strategies, inside sales efforts and referrals with strategic business unit partners.  Supplement our organic growth initiatives via selective and opportunistic bank acquisitions and branch acquisitions.    Growth  Enhance process improvement expertise, enabling all business lines and departments to streamline/automate operating processes and workflows.  Leverage technology, capitalizing upon core conversion new capabilities, streamline and improve bank processes.  Leverage virtual capabilities to make more effective meetings, training and customer engagement.   Optimize branch delivery channel including assessing existing locations, new locations, service hours, staffing, & workflow and leveraging our existing technology.   Expand Digital Branch (call center) services.   Process Improvement & Cost Controls  Sustain and enhance a constructive culture, supported by a highly engaged workforce that embraces and encourages a diverse, equitable, inclusive and flexible work environment.   Retain and attract top talent.  Align learning and development initiatives in support of bank priorities and employees’ continued growth.  Demonstrate that we are committed to the well-being of our team members who ensure our success. This entails recognizing and rewarding contributions, developing new talent via internships, providing coaching and development, and planning for succession and new opportunities.    Talent Management   Produce strong and consistent earnings and capital levels.   Maintain good credit quality aided by strong proactive asset quality monitoring and problem resolution.  Practice sound risk management with effective reporting to include fair banking and scenario planning.  Actively manage and monitor liquidity and interest rate risk.  Promote strong, independent & collaborative risk management, utilizing three layers of defense (business unit, risk management and internal audit).   Ensure effective operational controls with special emphasis on cyber security, fraud prevention, core system conversion and regulatory compliance.  Maintain effective relationships with regulators & other outside oversight parties. Provide effective ESG (Environmental, Social and Governance) disclosures for investors and other interested parties.    Risk Management  
 
 Q&A and Closing Remarks  Question and Answer Session  Closing Remarks  Thank you for attending!  NASDAQ: IBCP  25