Independent Bank Corporation
4th Quarter 2007 Earnings Conference Call — January 23, 2008

Overview of 4th Quarter 2007 Results
Michael M. Magee, President and Chief Executive Officer

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Safe Harbor Statement

This presentation may contain certain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements include expressions such as “expects,” “intends,” “believes” and “should” which are necessarily statements of belief as to expected outcomes of future events. Actual results could materially differ from those contained in, or implied by such statements. Independent Bank Corporation undertakes no obligation to release revisions to these forward-looking statements or reflect events or circumstances after the date of this presentation.

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Financial Overview

	4Q07		3Q07		4Q06		12M'07		12M'06
Income from continuing
operations (millions)	$	2.3	$	3.7	$	1.0	$	10.0	$	33.8
EPS - continuing operations	$	0.10	$	0.16	$	0.04	$	0.44	$	1.45
ROA - continuing operations		0.28%		0.45%		0.11%		0.31%		0.99%
ROE - continuing operations		3.68%		5.93%		1.44%		3.96%		13.06%
Total assets (billions) at
period end		$3.28		$3.26		$3.43
Stockholders' equity
(millions) at period end		$240.5		$244.4		$258.2
Common shares
outstanding (millions)
at period end		22.65		22.65		22.86

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4Q:07 — High-Level Overview

• Strategic Achievements

– Continued to build a brand presence in existing markets

– Efforts to improve credit quality remain a top priority – focused on loan monitoring + portfolio management function

• Operational Achievements

– Maintained profitability despite elevated credit costs and other than temporary impairment charge

– Continued growth in several categories of non-interest income

– Rate of non-performing loan growth showed signs of slowing

• Strategic challenges

– Michigan economy remains weak; tough competitive environment

– Decline in commercial + residential real estate value

• Operational challenges

– Asset quality and related increase in non-performing loans resulting in an elevated provision for loan losses and higher loan and collection expenses

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Economic Headwinds Persist

• U.S. economy on the precipice of consumer-led recession?

– Housing starts at 1991-low; residential real estate prices yet to trough; residential inventories remain high

– Continued decline in residential property values has impacted consumer confidence; household balance sheet has been impacted by substantial reduction in home equity values

– Consumer reliance on revolving credit could be impacted by tighter credit environment

• Michigan economy remains one of the weakest in U.S.

– Decline of manufacturing industry, particularly in SE Michigan

– Job growth remains stagnant

– Depreciation of both commercial and residential property values

– Unfavorable business taxes and stringent labor laws

•
Impact on the regional banking industry. Slowing loan growth, weaker credit quality, increased credit costs; net interest margin pressure

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Outlook for 2008

• Strategic Initiatives – remain focused on our strengths as a leading community bank

– Improve brand awareness

– Improve asset quality

– Core deposit growth

– Review business lines and locations based on performance and return on allocated capital

• Operational Initiatives

– Continued focus on utilizing technology to drive process improvements and greater efficiency

– Enhanced customer retention initiatives

– Continued investment in training and professional development

• General Business Outlook

– Sluggish loan growth, elevated levels of non-performing assets, and loan and collection costs continue to challenge the bottom line 

– Optimistic that current adverse credit cycle in RE development begins to abate by mid-year leading to lower credit costs

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4th Quarter 2007 Financial Review
Robert N. Shuster, Executive Vice President and CFO

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4th Quarter 2007 Recap

• Positive Factors

– Provision for loan losses slightly lower on a sequential quarterly basis

– Slowing in growth of non-performing loans and some declines in 30 day delinquencies

– Several categories of non-interest income remain strong

– Balance sheet structured to benefit from further cuts in short-term rates and/or a steeper yield curve

– Moderation in LIBOR rates subsequent to year end

• Challenges

– Credit costs

– Asset quality diminished by an elevated level of non-performing assets; largely attributable to non-performing commercial loans and real estate mortgage loans

– Weak Michigan economy

– Other than temporary impairment on agency preferred securities

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Tax Equivalent Net Interest Margin

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TE Net Interest Income

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Non-Interest Income

Category ($ in 000's)	4Q07			3Q07		4Q06
Total non-interest income		11,173			12,529		10,746
Service charges - deposits		6,418			6,565		5,152
VISA check card income		1,376			1,287		900
Gain (loss) on securities		(964	)		52		--
Net gains - mortgage loan sales		904			1,094		1,264
Mortgage loan servicing fees		364			633		605
Mutual fund and annuity commissions		609			517		321

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Non-Interest Expense

Category ($ in 000's)	4Q07		3Q07		4Q06
Total non-interest expense(a)		29,585		28,372		31,088
Compensation & employee benefits		13,438		13,621		13,323
Advertising		1,549		1,472		988
Amortization of intangible assets		934		934		600
Loan and collection		1,437		1,285		896

(a)    The fourth quarter of 2006 includes $3.0 million goodwill impairment charge and $2.4 million write-off of receivable from warranty payment plan seller.

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Provision for Loan Losses

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Asset Quality Measures — Non-Performing Loans

Non-performing loans by loan type ($ in 000's)	12/31/07			9/30/07			12/31/06
Commercial (a)		48,945			52,003			21,624
Mortgage		26,125			21,354			12,954
Consumer		3,694			3,112			2,496
Finance receivables (b)		1,722			2,741			2,148
Total	$	80,486		$	79,210		$	39,222
As a % of total loans		3.16	%		3.15	%		1.58	%

(a) The 12/31/07 balance includes a $1.7 million (remaining book value) commercial loan that was sold for this amount in mid-January 2008 and the 9/30/07 balance includes a commercial relationship (consisting of three loans) totaling $8.4 million that was brought current on 10/5/07.

(b) Excludes discontinued operations.

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Allowance for Loan Losses

Allocation ($ in 000's)	12/31/07			9/30/07			12/31/06
Specific loan allocations		10,713			10,426			2,631
Adversely rated loans		10,804			9,460			5,144
Historical losses		14,668			13,807			11,641
Other factors/subjective		9,109			8,634			7,463
Total	$	45,294		$	42,327		$	26,879
As a % of portfolio loans		1.78	%		1.69	%		1.08	%

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Asset Quality Measures — Net Loan Charge-Offs

Net loan charge-offs   by loan type ($ in 000's)	4Q07			3Q07			2Q07			1Q07
Commercial		2,637			3,893			5,478			1,900
Mortgage		2,739			1,819			945			760
Consumer		964			560			557			1,050
Overdrafts		333			362			360			129
Finance receivables*		46			14			24			121
Total	$	6,719		$	6,648		$	7,364		$	3,960
As a % of average loans		1.05	%		1.05	%		1.18	%		0.65	%

          *Excludes discontinued operations.

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Balance Sheet Overview

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IBCP — Cash Dividend Outlook

• We view our dividend policy on a long-term basis and are confident that our elevated credit costs will eventually subside and we will more than earn our cash dividend.

• Parent company liquidity remains very strong with $18.6 million in cash and continued access to $10 million line of credit (no draws on line at year-end).

• Our bank subsidiary remains “well capitalized.” Further, because we anticipate modest near-term asset growth, the down streaming of additional capital is not expected to be necessary.

• Our Board of Directors will consider our Apr. 30, 2008 cash dividend in mid-March. The dividend decision will consider earnings in the first two months of the quarter, holding comopany tangible capital level, holding company liquidity and the updated outlook for credit costs.

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4th Quarter 2007 Credit Review
Stefanie M. Kimball, Executive Vice President and Chief Lending Officer

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Total Commercial Loan Balances Were Flat During the
4th Quarter and Declined Approximately 2% During 2007

*Note: Acquisitions in 2004 of Midwest Guaranty Bank and First National Bank of Gaylord.

Total Outstandings do not include "Loans in Process" which at 12/31/07 totaled $3,537M

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Strategic Shift Towards C&I and Away From Certain
CRE Segments Commenced in Mid 2007

		Vacant Land			Land Development			Construction			Income Producing			Owner Occupied			C&I			Total
2006	Outstanding	$	37,211		$	68,717		$	93,828		$	347,703		$	344,778		$	183,494		$	1,075,730
	% of Portfolio		3.46	%		6.39	%		8.72	%		32.32	%		32.05	%		17.06	%		100.00	%
2007	Outstanding	$	31,581		$	58,294		$	96,252		$	338,760		$	339,510		$	198,343		$	1,062,739
	% of Portfolio		2.97	%		5.49	%		9.06	%		31.88	%		31.95	%		18.66	%		100.00	%
Change	Outstanding	$	(5,630	)	$	(10,423	)	$	2,424		$	(8,943	)	$	(5,268	)	$	14,849		$	(12,991	)
	% of Portfolio		-15	%		-15	%		3	%		-3	%		-2	%		8	%		-1	%

Values are in Thousands

Total Outstandings do not include "Loans in Process" of $3,537M and $8,191M respectively for 2007 and 2006

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Land/Land Development CRE Segments are Declining
and Represent a Relatively Small Portion of the
Overall Portfolio

Values are in thousands and do not include loans in process

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Select Commercial Real Estate Segments Have
Contributed Disproportionately to the Level of Watch
Credits

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Total Internal Watch Credits Continued to Rise
in the 4th Quarter

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2007 Portfolio Management Highlights

• Strategic shift toward more traditional C&I loans underway

• Dedicated relationship managers in each market utilize a community banking approach to provide a comprehensive spectrum of banking services: “Small enough to know you, Large enough to serve you”

• Comprehensive training program for commercial lenders has commenced and will be a focus in 2008 to position the sales force for more significant growth in 2009.

• Investing in our employees is the best way to provide high quality service to our commercial customers and to weather the Michigan credit storm.

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Commercial 30+ Delinquency Decreased in the 4th
Quarter

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Commercial Non-Accruals Continued to Rise
in the 4th Quarter

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Commercial Charge-Offs Declined in the 3rd and 4th
Quarters of 2007

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Economic Headwinds Continue to Challenge Clients

• Michigan’s economic environment continues to challenge businesses in the State, particularly those dependent upon the sale of residential real estate.

• Record levels of residential real estate inventory are reported in many communities.

• Significant commercial real estate de-valuations have been experienced.

• Most of IBC’s commercial real estate exposure in these segments has already been placed on watch status.

• Geographic diversification within the State mitigates the stress currently experienced in SE Michigan.

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Credit Quality Best Practices Implemented in 2007
Position Independent Bank to Weather the
"Credit Storm"

• Quarterly Watch Process to proactively manage higher risk loans is in place.

• Risk Ratings are independently assigned and structure recommendations made upfront by Credit Officers.

• A Special Assets Group has been established to provide more effective management of our most troubled loans. A select group of law firms supports the team, providing professional advice and systemic feedback.

• Loan Review provides portfolio/individual loan feedback to evaluate the effectiveness of processes by market.

• Accountability is ensured with management by objectives for each Lender and Senior Lender that emphasize credit quality in addition to growth and profitability.

• Risk Based Pricing will be enhanced with improvements underway to our pricing model.

• Collateral Monitoring enhancements are being implemented for both Commercial Real Estate and C & I Lending.

• Portfolio Concentrations are monitored with select loan types encouraged.

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Total Retail Loan Balances Increased in 4th Quarter of
2007

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Retail 30-89 Day Delinquency Decreased in the 4th
Quarter

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Retail Non-Performing Assets Continued to Rise
in the 4th Quarter

Includes Non-Performing Loans, ORE and Repossessed Assets

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Total Retail Charge-Offs Increased in 3rd and 4th
Quarters of 2007

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Q & A

Michael M. Magee, Jr.
President and Chief Executive Officer

Robert N. Shuster
Executive Vice President and
Chief Financial Officer

Stefanie M. Kimball
Executive Vice President and
Chief Lending Officer

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Thank you for participating in the conference call.

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