INDEPENDENT BANK CORP /MI/ - FORM 8-K - EX-99.2 - EXHIBIT 99.2

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EX-99.1 - EXHIBIT 99.1 - INDEPENDENT BANK CORP /MI/	brhc10023526_ex99-1.htm
EX-99.3 - EXHIBIT 99.3 - INDEPENDENT BANK CORP /MI/	brhc10023526_ex99-3.htm
8-K - 8-K - INDEPENDENT BANK CORP /MI/	brhc10023526_8k.htm

Exhibit 99.2

INDEPENDENT BANK CORPORATION AND SUBSIDIARIES

Supplemental Data

Non-performing assets ⁽¹⁾

	March 31, 2021			December 31, 2020			September 30, 2020			June 30, 2020			March 31, 2020
	(Dollars in thousands)
Non-accrual loans	$	7,548		$	8,312		$	10,481		$	12,938		$	17,454

Loans 90 days or more past due and still accruing interest		-			-			266			5			-
Subtotal		7,548			8,312			10,747			12,943			17,454
Less: Government guaranteed loans		459			439			510			604			676
Total non-performing loans		7,089			7,873			10,237			12,339			16,778
Other real estate and repossessed assets		346			766			1,487			1,569			1,494
Total non-performing assets	$	7,435		$	8,639		$	11,724		$	13,908		$	18,272

As a percent of Portfolio Loans
Non-performing loans		0.25	%		0.29	%		0.36	%		0.43	%		0.62
Allowance for credit losses		1.68			1.30			1.25			1.20			1.20
Non-performing assets to total assets		0.17			0.21			0.28			0.34			0.50
Allowance for credit losses as a percent of non-performing loans		659.54			450.01			349.43			279.60			193.68

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

Troubled debt restructurings ("TDR")

(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.

Allowance for credit losses

	Three months ended March 31,
	2021						2020
	Loans			Unfunded Commitments			Loans			Unfunded Commitments
	(Dollars in thousands)
Balance at beginning of period	$	35,429		$	1,805		$	26,148		$	1,542
Additions (deductions)
Impact of adoption of ASC 326		11,574			1,469			-			-
Provision for credit losses ⁽¹⁾		(474	)		-			6,721			-
Initial allowance on loans purchased with credit deterioration		134			-			-			-
Recoveries credited to allowance		548			-			399			-
Loans charged against the allowance		(456	)		-			(773	)		-
Additions included in non-interest expense		-			(32	)		-			119
Balance at end of period	$	46,755		$	3,242		$	32,495		$	1,661

Net loans charged (recovered) against the allowance to average Portfolio Loans		(0.01	)%					0.06	%

(1)	Beginning January 1, 2021, calculation is based on CECL methodology. Prior to January 1, 2021, calculation was based on the probable incurred loss methodology.

Capitalization

	March 31, 2021			December 31, 2020
	(In thousands)
Subordinated debt	$	39,300		$	39,281
Subordinated debentures		39,541			39,524
Amount not qualifying as regulatory capital		(524	)		(505	)
Amount qualifying as regulatory capital		78,317			78,300
Shareholders’ equity
Common stock		335,704			339,353
Retained earnings		47,287			40,145
Accumulated other comprehensive income		4,338			10,024
Total shareholders’ equity		387,329			389,522
Total capitalization	$	465,646		$	467,822

Non-Interest Income

	Three months ended
	March 31, 2021		December 31, 2020			March 31, 2020
	(In thousands)
Interchange income	$	3,049	$	2,819		$	2,457
Service charges on deposit accounts		1,916		2,218			2,591
Net gains on assets
Mortgage loans		12,828		15,873			8,840
Securities		1,416		14			253
Mortgage loan servicing, net		5,167		(384	)		(5,300	)
Investment and insurance commissions		583		493			513
Bank owned life insurance		139		160			270
Other		1,308		1,170			1,380
Total non-interest income	$	26,406	$	22,363		$	11,004

Capitalized Mortgage Loan Servicing Rights

	Three months ended March 31,
	2021		2020
	(In thousands)
Balance at beginning of period	$	16,904	$	19,171
Originated servicing rights capitalized		3,369		2,632
Change in fair value		3,257		(6,974	)
Balance at end of period	$	23,530	$	14,829

Mortgage Loan Activity

	Three months ended
	March 31, 2021			December 31, 2020			March 31, 2020
	(Dollars in thousands)
Mortgage loans originated	$	509,003		$	502,491		$	311,078
Mortgage loans sold		377,418			388,631			262,260
Net gains on mortgage loans		12,828			15,873			8,840
Net gains as a percent of mortgage loans sold ("Loan Sales Margin")		3.40	%		4.08	%		3.37	%
Fair value adjustments included in the
Loan Sales Margin		(0.98	)		(0.53	)		0.78

Non-Interest Expense

	Three months ended
	March 31, 2021			December 31, 2020			March 31, 2020
	(In thousands)
Compensation	$	10,121		$	10,852		$	10,703
Performance-based compensation		4,292			5,485			2,121
Payroll taxes and employee benefits		4,109			3,702			3,685
Compensation and employee benefits		18,522			20,039			16,509
Data processing		2,374			2,374			2,355
Occupancy, net		2,343			2,120			2,460
Furniture, fixtures and equipment		1,003			964			1,036
Interchange expense		948			926			859
Communications		881			785			803
Loan and collection		759			708			805
Legal and professional		499			600			393
Advertising		489			594			683
FDIC deposit insurance		330			385			370
Amortization of intangible assets		242			255			255
Conversion related expenses		218			1,541			56
Supplies		174			167			184
Correspondent bank service fees		100			101			99
Provision for loss reimbursement on sold loans		34			40			37
Costs (recoveries) related to unfunded lending commitments		(32	)		(8	)		119
Net (gains) losses on other real estate and repossessed assets		(180	)		(82	)		109
Other		1,317			1,198			1,587
Total non-interest expense	$	30,021		$	32,707		$	28,719

Average Balances and Tax Equivalent Rates


	Three Months Ended March 31,
			2021							2020
	Average Balance		Interest		Rate ⁽²⁾			Average Balance		Interest		Rate ⁽²⁾
	(Dollars in thousands)
Assets
Taxable loans	$	2,827,335	$	28,039		4.00	%	$	2,758,909	$	31,688		4.61	%
Tax-exempt loans ⁽¹⁾		6,677		84		5.10			7,861		97		4.96
Taxable securities		782,471		2,796		1.43			468,095		3,059		2.61
Tax-exempt securities⁽¹⁾		311,147		1,770		2.28			59,300		490		3.31
Interest bearing cash		101,895		29		0.12			38,424		128		1.34
Other investments		18,427		188		4.14			18,359		238		5.21
Interest Earning Assets		4,047,952		32,906		3.27			3,350,948		35,700		4.28
Cash and due from banks		56,371							49,610
Other assets, net		149,971							165,271
Total Assets	$	4,254,294						$	3,565,829

Liabilities
Savings and interest-bearing checking	$	2,140,405		675		0.13		$	1,615,589		1,930		0.48
Time deposits		339,872		581		0.69			594,871		2,770		1.87
Other borrowings		108,825		962		3.59			99,535		688		2.78
Interest Bearing Liabilities		2,589,102		2,218		0.35			2,309,995		5,388		0.94
Non-interest bearing deposits		1,218,534							855,838
Other liabilities		66,547							51,033
Shareholders’ equity		380,111							348,963
Total liabilities and shareholders’ equity	$	4,254,294						$	3,565,829

Net Interest Income			$	30,688						$	30,312

Net Interest Income as a Percent of Average Interest Earning Assets						3.05	%						3.63	%

(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

Commercial Loan Portfolio Analysis as of March 31, 2021

	Total Commercial Loans
			Watch Credits						Percent of Loan
Loan Category	All Loans		Performing		Non-accrual		Total		Category in Watch Credit
	(Dollars in thousands)
Land	$	14,178	$	175	$	-	$	175		1.2	%
Land Development		13,274		35		-		35		0.3
Construction		75,364		36		-		36		0.0
Income Producing		362,506		2,049		-		2,049		0.6
Owner Occupied		353,101		12,219		719		12,938		3.7
Total Commercial Real Estate Loans	$	818,423	$	14,514		719	$	15,233		1.9

Other Commercial Loans	$	482,800	$	15,107		654	$	15,761		3.2
Total non-performing commercial loans					$	1,373

Commercial Loan Portfolio Analysis as of December 31, 2020

	Total Commercial Loans
			Watch Credits						Percent of Loan
Loan Category	All Loans		Performing		Non-accrual		Total		Category in Watch Credit
	(Dollars in thousands)
Land	$	14,567	$	116	$	-	$	116		0.8	%
Land Development		12,176		36		-		36		0.3
Construction		68,724		36		-		36		0.1
Income Producing		358,603		3,699		-		3,699		1.0
Owner Occupied		360,510		24,693		745		25,438		7.1
Total Commercial Real Estate Loans	$	814,580	$	28,580		745	$	29,325		3.6

Other Commercial Loans	$	427,835	$	16,059		695	$	16,754		3.9
Total non-performing commercial loans					$	1,440

INDEPENDENT BANK CORP /MI/ - FORM 8-K - EX-99.2 - EXHIBIT 99.2 - April 27, 2021