EX-99 4 ibc8k_102605-ex99p2.htm Independent Bank Corporation Form 8-K Exhibit 99.2

INDEPENDENT BANK CORPORATION AND SUBSIDIARIES
Supplemental Data

Exhibit 99.2

Non-performing assets

September 30,
2005		 December 31,
2004
(dollars in thousands)
  Non-accrual loans     $ 23,211   $ 11,804  
  Loans 90 days or more past due and  
    still accruing interest    4,141    3,123  
  Restructured loans    90    218  
Total non-performing loans    27,442    15,145  
  Other real estate    1,806    2,113  
Total non-performing assets   $ 29,248   $ 17,258  
As a percent of Portfolio Loans  
     Non-performing loans    1.10 %  0.68 %
     Allowance for loan losses    1.06    1.11  
   Non-performing assets to total assets    .88    0.56  
   Allowance for loan losses as a percent of  
     non-performing loans    96    163  

Allowance for loan losses

Nine months ended
September 30,
2005 2004
Loan
Losses		 Unfunded
Commitments		 Loan
Losses		 Unfunded
Commitments
(in thousands)
Balance at beginning of period     $ 24,737   $ 1,846   $ 16,836   $ 892  
Additions (deduction)  
  Allowance on loans acquired            8,236
  Provision charged to operating expense    5,854    (132 )  3,078    888  
  Recoveries credited to allowance    1,181         923  
  Loans charged against the allowance    (5,422 )       (3,532 )
Balance at end of period   $ 26,350   $ 1,714   $ 25,541   $ 1,780  
   
Net loans charged against the allowance to  
       average Portfolio Loans (annualized)    0.24 %       0.19 %     

Alternate Sources of Funds

September 30,
2005		 December 31,
2004
Amount Average
Maturity		 Rate Amount Average
Maturity		 Rate
(dollars in thousands)
Brokered CDs(1)     $ 893,926    2.0 years    3.42 % $ 576,944    1.9 years    2.56 %
Fixed rate FHLB advances(1)    52,586    6.3 years    5.63    59,902    6.4 years    5.55  
Variable rate FHLB advances(1)    52,000    0.4 years    3.95    164,000    0.4 years    2.32  
Securities sold under agreements to  
   Repurchase(1)    152,370    0.1 years    3.85    169,810    0.2 years    2.27  
Federal funds purchased    108,229    1 day    4.02    117,552    1 day    2.44  
      Total   $ 1,259,111    1.7 years    3.64 % $ 1,088,208    1.4 years    2.63 %

(1)     Certain of these items have had their average maturity and rate altered through the use of derivative instruments, including pay-fixed and pay-variable interest rate swaps.

Capitalization

September 30,
2005		 December 31,
2004
(in thousands)
Unsecured debt     $ 7,500   $ 9,000  
   
Subordinated debentures    64,197    64,197  
Amount not qualifying as regulatory capital    (1,847 )  (1,847 )
  Amount qualifying as regulatory capital    62,350    62,350  
Shareholders' Equity  
  Preferred stock, no par value  
  Common stock, par value $1.00 per share    22,232    21,195  
  Capital surplus    186,846    158,797  
  Retained earnings    34,428    41,795  
  Accumulated other comprehensive income    8,204    8,505  
          Total shareholders' equity    251,710    230,292  
          Total capitalization   $ 321,560   $ 301,642  

Non-Interest Income

Three months ended
September 30,		 Nine months ended
September 30,
2005 2004 2005 2004
(in thousands)
Service charges on deposit accounts     $ 5,042   $ 4,620   $ 14,042   $ 12,519  
Net gains (losses) on asset sales  
  Real estate mortgage loans    1,508    1,381    4,203    4,603  
  Securities    (23 )  1,561    1,228    2,056  
Title insurance fees    494    496    1,459    1,579  
VISA check card interchange income    713    546    2,020    1,454  
Bank owned life insurance    393    363    1,150    1,091  
Manufactured home loan origination fees  
  and commissions    294    314    905    923  
Mutual fund and annuity commissions    276    332    973    975  
Real estate mortgage loan servicing    836    77    2,074    1,158  
Other    1,408    1,144    3,782    3,181  
      Total non-interest income   $ 10,941   $ 10,834   $ 31,836   $ 29,539  

Real Estate Mortgage Loan Activity

Three months ended
September 30,		 Nine months ended
September 30,
2005 2004 2005 2004
(in thousands)
Real estate mortgage loans originated     $ 174,113   $ 163,707   $ 508,073   $ 522,702  
Real estate mortgage loans sold    101,703    80,576    285,576    287,206  
Real estate mortgage loans sold with servicing  
  rights released    11,945    14,070    33,467    38,315  
Net gains on the sale of real estate mortgage loans    1,508    1,381    4,203    4,603  
Net gains as a percent of real estate mortgage  
  loans sold ("Loan Sale Margin")    1.48 %  1.71 %  1.47 %  1.60 %
SFAS #133 adjustments included in the Loan  
  Sale Margin    0.08 %  0.13 %  0.04 %  0.02 %

Capitalized Real Estate Mortgage Loan Servicing Rights

Three months ended
September 30,		 Nine months ended
September 30,
2005 2004 2005 2004
(in thousands)
Balance at beginning of period     $ 12,315   $ 10,154   $ 11,360   $ 8,873  
  Servicing rights acquired         1,138         1,138  
  Originated servicing rights capitalized    875    643    2,454    2,443  
  Amortization    (510 )  (376 )  (1,468 )  (1,457 )
  (Increase)/decrease in impairment reserve    378    (436 )  712    126  
Balance at end of period   $ 13,058   $ 11,123   $ 13,058   $ 11,123  
   
Impairment reserve at end of period   $ 54   $ 596   $ 54   $ 596  

Non-Interest Expense

Three months ended
September 30,		 Nine months ended
September 30,
2005 2004 2005 2004
(in thousands)
Salaries     $ 9,487   $ 8,816   $ 26,525   $ 24,207  
Performance-based compensation  
  and benefits    2,089    1,452    6,207    4,216  
Other benefits    2,626    2,335    8,126    7,133  
  Compensation and employee  
    benefits    14,202    12,603    40,858    35,556  
Occupancy, net    2,182    1,981    6,523    5,618  
Furniture and fixtures    1,637    1,608    5,150    4,473  
Mepco claims expense                2,700  
Data processing    1,350    1,169    3,740    3,332  
Advertising    1,128    1,274    3,206    2,879  
Loan and collection    1,034    1,035    3,118    2,659  
Communications    989    917    2,973    2,582  
Legal and professional    729    1,155    2,082    1,995  
Amortization of intangible assets    693    746    2,080    1,723  
Supplies    537    461    1,761    1,561  
Write-off of uncompleted software                977  
Other    2,544    2,572    7,566    6,351  
      Total non-interest expense   $ 27,025   $ 25,521   $ 79,057   $ 72,406  

Average Balances and Tax Equivalent Rates

Three Months Ended
September 30,
2005 2004
Average
Balance		 Interest Rate Average
Balance		 Interest Rate
Assets (dollars in thousands)
Taxable loans (1)     $ 2,465,256   $ 46,036    7.43 % $ 2,184,861   $ 37,447    6.83 %
Tax-exempt loans (1,2)    6,019    114    7.51    6,977    130    7.41  
Taxable securities    257,707    3,304    5.09    284,528    3,275    4.58  
Tax-exempt securities (2)    261,829    4,396    6.66    222,002    3,867    6.93  
Other investments    17,322    199    4.56    19,573    203    4.13  
Interest Earning Assets    3,008,133    54,049    7.14    2,717,941    44,922    6.59  
Cash and due from banks    60,870            67,192
Other assets, net    192,710            169,230
Total Assets   $ 3,261,713           $2,954,363
   
Liabilities  
Savings and NOW   $ 866,789    2,209    1.01   $ 876,259    1,228    0.56  
Time deposits    1,268,303    10,477    3.28    1,004,803    6,627    2.62  
Long-term debt    5,995    69    4.57    7,995    77    3.84  
Other borrowings    488,942    5,371    4.36    491,978    4,081    3.30  
Interest Bearing Liabilities    2,630,029    18,126    2.73    2,381,035    12,013    2.01  
Demand deposits    294,108            279,288
Other liabilities    89,459            77,869
Shareholders' equity    248,117            216,171
Total liabilities and shareholders' equity   $ 3,261,713           $2,954,363
Tax Equivalent Net Interest Income       $35,923         $32,909
Tax Equivalent Net Interest Income  
as a Percent of Earning Assets              4.75 %            4.83 %
(1) All domestic
(2) Interest on tax-exempt loans and securities is presented on a fully tax equivalent basis assuming a marginal tax rate of 35%

Average Balances and Tax Equivalent Rates

Nine Months Ended
September 30,
2005 2004
Average
Balance		 Interest Rate Average
Balance		 Interest Rate
Assets (dollars in thousands)
Taxable loans (1)     $ 2,383,723   $ 131,051    7.34 % $ 1,921,632   $ 99,731    6.93 %
Tax-exempt loans (1,2)    6,294    352    7.48    6,819    381    7.46  
Taxable securities    283,090    10,557    4.99    265,257    9,366    4.72  
Tax-exempt securities (2)    253,885    12,738    6.71    206,072    10,936    7.09  
Other investments    17,359    534    4.11    15,951    537    4.50  
Interest Earning Assets    2,944,351    155,232    7.04    2,415,731    120,951    6.68  
Cash and due from banks    60,448            52,889
Other assets, net    191,196            146,968
Total Assets   $ 3,195,995           $2,615,588
Liabilities  
Savings and NOW   $ 875,335    5,750    0.88   $ 787,986    3,195    0.54  
Time deposits    1,181,408    26,774    3.03    864,957    16,880    2.61  
Long-term debt    6,491    223    4.59    3,560    101    3.82  
Other borrowings    519,081    15,486    3.99    473,765    12,061    3.43  
Interest Bearing Liabilities    2,582,315    48,233    2.50    2,130,268    32,237    2.02  
Demand deposits    280,498            226,162
Other liabilities    89,735            70,794
Shareholders' equity    243,447            188,364
 Total liabilities and shareholders' equity   $ 3,195,995           $2,615,588
Tax Equivalent Net Interest Income       $106,999         $88,714
Tax Equivalent Net Interest Income  
as a Percent of Earning Assets              4.85 %            4.90 %
(1) All domestic
(2) Interest on tax-exempt loans and securities is presented on a fully tax equivalent basis assuming a marginal tax rate of 35%