SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-Q

QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 FOR THE QUARTERLY PERIOD ENDED September 30, 2022

Commission file number   0-7818

INDEPENDENT BANK CORPORATION

(Exact name of registrant as specified in its charter)

Michigan	38-2032782
(State or jurisdiction of Incorporation or Organization)	(I.R.S. Employer Identification Number)

4200 East Beltline, Grand Rapids, Michigan 49525

(Address of principal executive offices)

(616) 527-5820

(Registrant's telephone number, including area code)

NONE

Former name, address and fiscal year, if changed since last report.

Securities registered pursuant to Section 12(b) of the Act:

Title of each Class	Trading Symbol	Name of each exchange which registered
Common stock, no par value	IBCP	The Nasdaq Stock Market, LLC

Indicate by check mark whether the registrant (1) has filed all documents and reports required to be filed by Sections 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. YES x NO ¨

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).

YES x NO ¨

Indicate by check mark whether the Registrant is a large accelerated filer, an accelerated filer, non-accelerated filer, smaller reporting company or an emerging growth company.

Large accelerated filer ¨ Accelerated filer x Non-accelerated filer ¨ Smaller reporting company ¨ 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. Yes ¨ No ¨

Indicate by check mark whether the Registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).

YES ¨ NO x

Indicate the number of shares outstanding of each of the issuer's classes of common stock, as of the latest practicable date: common stock, no par value, 21,065,144 as of November 3, 2022.

INDEPENDENT BANK CORPORATION AND SUBSIDIARIES

INDEX

		Number(s)
PART I -	Financial Information
Item 1.	Condensed Consolidated Statements of Financial Condition September 30, 2022 and December 31, 2021	3
	Condensed Consolidated Statements of Operations Three- and Nine-month periods ended September 30, 2022 and 2021	4
	Condensed Consolidated Statements of Comprehensive Income (Loss) Three- and Nine-month periods ended September 30, 2022 and 2021	5
	Condensed Consolidated Statements of Cash Flows Nine-month periods ended September 30, 2022 and 2021	6
	Condensed Consolidated Statements of Shareholders' Equity Three- and Nine-month periods ended September 30, 2022 and 2021	7
	Notes to Interim Condensed Consolidated Financial Statements	8-58
Item 2.	Management's Discussion and Analysis of Financial Condition and Results of Operations	42-77
Item 3.	Quantitative and Qualitative Disclosures about Market Risk	61
Item 4.	Controls and Procedures	61
PART II -	Other Information
Item 1A	Risk Factors	62
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	62
Item 6.	Exhibits	63

1

FORWARD-LOOKING STATEMENTS

Statements in this report that are not statements of historical fact, including statements that include terms such as ‘‘will,’’ ‘‘may,’’ ‘‘should,’’ ‘‘believe,’’ ‘‘expect,’’ ‘‘forecast,’’ ‘‘anticipate,’’ ‘‘estimate,’’ ‘‘project,’’ ‘‘intend,’’ ‘‘likely,’’ ‘‘optimistic’’ and ‘‘plan’’ and statements about future or projected financial and operating results, plans, projections, objectives, expectations, and intentions, are forward-looking statements. Forward-looking statements include, but are not limited to, descriptions of plans and objectives for future operations, products or services; projections of our future revenue, earnings or other measures of economic performance; forecasts of credit losses and other asset quality trends; statements about our business and growth strategies; and expectations about economic and market conditions and trends. These forward-looking statements express our current expectations, forecasts of future events, or long-term goals. They are based on assumptions, estimates, and forecasts that, although believed to be reasonable, may turn out to be incorrect. Actual results could differ materially from those discussed in the forward-looking statements for a variety of reasons, including:

•economic, market, operational, liquidity, credit, and interest rate risks associated with our business including the impact of the ongoing COVID-19 pandemic on each of these items;

•economic conditions generally and in the financial services industry, particularly economic conditions within Michigan and the regional and local real estate markets in which our bank operates including the economic impact of the ongoing COVID-19 pandemic in each of these areas;

•the failure of assumptions underlying the establishment of, and provisions made to, our allowance for credit losses;

•increased competition in the financial services industry, either nationally or regionally;

•our ability to achieve loan and deposit growth;

•volatility and direction of market interest rates;

•the continued services of our management team; and

•implementation of new legislation, which may have significant effects on us and the financial services industry.

This list provides examples of factors that could affect the results described by forward-looking statements contained in this report, but the list is not intended to be all-inclusive. The risk factors disclosed in Part I – Item 1A of our Annual Report on Form 10-K for the year ended December 31, 2021, as updated by any new or modified risk factors disclosed in Part II – Item 1A of any subsequently filed Quarterly Report on Form 10-Q, include the known risks our management believes could materially affect the results described by forward-looking statements in this report. However, those risks may not be the only risks we face. Our results of operations, cash flows, financial position, and prospects could also be materially and adversely affected by additional factors that are not presently known to us that we currently consider to be immaterial, or that develop after the date of this report. We cannot assure you that our future results will meet expectations. While we believe the forward-looking statements in this report are reasonable, you should not place undue reliance on any forward-looking statement. In addition, these statements speak only as of the date made. We do not undertake, and expressly disclaim, any obligation to update or alter any statements, whether as a result of new information, future events, or otherwise, except as required by applicable law.

2

Part I - Item 1. INDEPENDENT BANK CORPORATION AND SUBSIDIARIES

Condensed Consolidated Statements of Financial Condition

	September 30, 2022		December 31, 2021
	(unaudited)
	(In thousands, except share amounts)
Assets
Cash and due from banks	$	57,059	$	51,069
Interest bearing deposits	13,573		58,404
Cash and Cash Equivalents	70,632		109,473
Securities available for sale	804,272		1,412,830
Securities held to maturity (fair value of $341,129 at September 30, 2022 and zero at December 31, 2021)	379,429		—
Federal Home Loan Bank and Federal Reserve Bank stock, at cost	17,653		18,427
Loans held for sale, carried at fair value	9,091		55,470
Loans held for sale, carried at lower of cost or fair value	—		34,811
Loans
Commercial	1,408,230		1,203,581
Mortgage	1,354,879		1,139,659
Installment	646,749		561,805
Total Loans	3,409,858		2,905,045
Allowance for credit losses	(51,142)		(47,252)
Net Loans	3,358,716		2,857,793
Other real estate and repossessed assets	348		245
Property and equipment, net	35,711		36,404
Bank-owned life insurance	55,146		55,279
Capitalized mortgage loan servicing rights, carried at fair value	43,158		26,232
Other intangibles	2,697		3,336
Goodwill	28,300		28,300
Accrued income and other assets	126,224		66,140
Total Assets	$	4,931,377	$	4,704,740
Liabilities and Shareholders' Equity
Deposits
Non-interest bearing	$	1,376,765	$	1,321,601
Savings and interest-bearing checking	1,957,421		1,897,487
Reciprocal	616,435		586,626
Time	308,262		308,438
Brokered time	68,145		2,938
Total Deposits	4,327,028		4,117,090
Other borrowings	86,707		30,009
Subordinated debt	39,414		39,357
Subordinated debentures	39,643		39,592
Accrued expenses and other liabilities	106,277		80,208
Total Liabilities	4,599,069		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: 21,063,954 shares at September 30, 2022 and 21,171,036 shares at December 31, 2021	320,437		323,401
Retained earnings	108,916		74,582
Accumulated other comprehensive income (loss)	(97,045)		501
Total Shareholders’ Equity	332,308		398,484
Total Liabilities and Shareholders’ Equity	$	4,931,377	$	4,704,740

See notes to interim condensed consolidated financial statements (Unaudited)

3

INDEPENDENT BANK CORPORATION AND SUBSIDIARIES

Condensed Consolidated Statements of Operations

	Three months ended September 30,				Nine months ended September 30,
	2022		2021		2022		2021
	(Unaudited)				(Unaudited)
	(In thousands, except per share amounts)
Interest Income
Interest and fees on loans	$	37,092	$	30,132	$	96,964	$	86,328
Interest on securities
Taxable	5,329		3,922		14,831		10,374
Tax-exempt	2,284		1,597		5,584		4,525
Other investments	220		204		651		629
Total Interest Income	44,925		35,855		118,030		101,856
Interest Expense
Deposits	3,625		1,090		5,608		3,488
Other borrowings and subordinated debt and debentures	1,403		962		3,463		2,888
Total Interest Expense	5,028		2,052		9,071		6,376
Net Interest Income	39,897		33,803		108,959		95,480
Provision for credit losses	3,145		(659)		3,951		(2,558)
Net Interest Income After Provision for Credit Losses	36,752		34,462		105,008		98,038
Non-interest Income
Interchange income	4,049		4,237		10,553		10,739
Service charges on deposit accounts	3,082		2,944		9,135		7,178
Net gains (losses) on assets
Mortgage loans	2,857		8,361		4,945		30,280
Securities available for sale	—		5		(275)		1,421
Mortgage loan servicing, net	4,283		1,271		18,086		4,476
Other	2,590		2,877		7,997		6,778
Total Non-interest Income	16,861		19,695		50,441		60,872
Non-interest Expense
Compensation and employee benefits	20,601		21,659		60,613		60,064
Data processing	2,653		3,022		7,513		7,972
Occupancy, net	2,062		2,082		6,682		6,578
Interchange expense	927		1,202		3,200