ex99_2.htm

Exhibit 99.2

INDEPENDENT BANK CORPORATION AND SUBSIDIARIES

Supplemental Data

Non-performing assets(1)
	March 31,			December 31,
	2011			2010
	(dollars in thousands)
Non-accrual loans	$	59,543		$	66,652

Loans 90 days or more past due and still accruing interest		309			928
Total non-performing loans		59,852			67,580
Other real estate and repossessed assets		37,513			39,413
Total non-performing assets	$	97,365		$	106,993
As a percent of Portfolio Loans
Non-performing loans		3.45	%		3.73	%
Allowance for loan losses		3.82			3.75
Non-performing assets to total assets		3.93			4.22
Allowance for loan losses as a percent of non-performing loans		110.50			100.50

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

Troubled debt restructurings (“TDRs”)
	March 31, 2011
	Commercial		Retail			Total
	(in thousands)
Performing TDRs	$	9,772	$	99,469		$	109,241
Non-performing TDRs (1)		7,387		15,237	(2)		22,624
Total	$	17,159	$	114,706		$	131,865

	December 31, 2010
	Commercial		Retail			Total
	(in thousands)
Performing TDRs	$	16,957	$	96,855		$	113,812
Non-performing TDRs (1)		7,814		16,616	(2)		24,430
Total	$	24,771	$	113,471		$	138,242

(1) Included in NPL table above.

(2) Also includes loans on non-accrual at the time of modification until six payments are received on a timely basis.

Allowance for loan losses
	Three months ended
	March 31,
	2011					2010
				Unfunded					Unfunded
	Loans			Commitments		Loans			Commitments
	(dollars in thousands)
Balance at beginning of period	$	67,915		$	1,322	$	81,717		$	1,858
Additions (deduction)
Provision for loan losses		11,076			--		17,014			--
Recoveries credited to allowance		935			--		991			--
Loans charged against the allowance		(13,791	)		--		(23,590	)		--
Additions (deductions) included in non-interest expense		--			95		--			56
Balance at end of period	$	66,135		$	1,417	$	76,132		$	1,914

Net loans charged against the allowance to average Portfolio Loans (annualized)		2.93	%				4.10	%

Alternative Sources of Funds

			March 31, 2011						December 31, 2010
			Average						Average
	Amount		Maturity	Rate			Amount		Maturity	Rate
	(dollars in thousands)
Brokered CDs	$	250,166	2.3 years		2.88	%	$	273,546	2.4 years		2.89	%
Fixed rate FHLB advances		21,012	5.6 years		6.34			21,022	5.9 years		6.34
Variable rate FHLB advances (1)		25,000	1.1 years		0.50			50,000	0.8 years		0.41
Total	$	296,178	2.4 years		2.93	%	$	344,568	2.4 years		2.74	%

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

Capitalization
	March 31,			December 31,
	2011			2010
	(in thousands)
Subordinated debentures	$	50,175		$	50,175
Amount not qualifying as regulatory capital		(1,507	)		(1,507	)
Amount qualifying as regulatory capital		48,668			48,668
Shareholders’ Equity
Preferred stock		76,708			75,700
Common stock		247,406			246,407
Accumulated deficit		(198,311	)		(189,902	)
Accumulated other comprehensive loss		(12,865	)		(13,120	)
Total shareholders’ equity		112,938			119,085
Total capitalization	$	161,606		$	167,753

Non-Interest Income
	Three months ended
	March 31, 2011			December 31, 2010			March 31, 2010
	(in thousands)
Service charges on deposit accounts	$	4,282		$	4,887		$	5,275
Net gains (losses) on assets
Mortgage loans		1,935			4,286			1,843
Securities		213			14			265
Other than temporary loss on securities available for sale
Total impairment loss		(469	)		(28	)		(118	)
Loss recognized in other comprehensive income		327			--			--
Net impairment loss recognized in earnings		(142	)		(28	)		(118	)
Interchange income		2,168			2,160			1,936
Mortgage loan servicing		896			2,465			432
Investment and insurance commissions		555			585			389
Bank owned life insurance		425			464			468
Title insurance fees		473			644			494
Other		1,906			1,732			1,397
Total non-interest income	$	12,711		$	17,209		$	12,381

Capitalized Mortgage Loan Servicing Rights
	Three months ended March 31,
	2011			2010
	(in thousands)
Balance at beginning of period	$	14,661		$	15,273
Originated servicing rights capitalized		1,064			775
Amortization		(749	)		(758	)
Decrease in impairment reserve		555			145
Balance at end of period	$	15,531		$	15,435

Impairment reserve at end of period	$	2,655		$	2,157

Mortgage Loan Activity

	Three months ended
	March 31,			December 31,			March 31,
	2011			2010			2010
	(dollars in thousands)
Mortgage loans originated	$	95,573		$	178,508		$	90,007
Mortgage loans sold		121,488			180,892			87,708
Mortgage loans sold with servicing rights released		16,572			24,058			11,864
Net gains on the sale of mortgage loans		1,935			4,286			1,843
Net gains as a percent of mortgage loans sold (“Loan Sales Margin”)		1.59	%		2.37	%		2.10	%
Fair value adjustments included in the Loan
Sales Margin		(0.72	)		(0.49	)		(0.07	)

Non-Interest Expense
	Three months ended
	March 31, 2011		December 31, 2010			March 31, 2010
	(in thousands)
Salaries	$	9,812	$	10,073		$	10,176
Performance-based compensation and benefits		157		147			644
Other benefits		2,380		2,042			2,393
Compensation and employee benefits		12,349		12,262			13,213
Loan and collection		3,867		3,947			4,786
Occupancy, net		3,101		2,791			2,909
Vehicle service contract counterparty contingencies		2,346		4,386			3,418
Data processing		2,310		2,367			2,469
Furniture, fixtures and equipment		1,418		1,582			1,719
Net losses on other real estate and repossessed assets		1,406		4,843			2,029
FDIC deposit insurance		1,235		1,589			1,802
Credit card and bank service fees		1,047		1,237			1,675
Communications		948		996			1,073
Legal and professional		778		1,239			1,136
Advertising		554		567			779
Supplies		402		393			393
Amortization of intangible assets		343		315			322
Costs (recoveries) related to unfunded lending commitments		95		(65	)		56
Other		1,295		1,948			1,720
Total non-interest expense	$	33,494	$	40,397		$	39,499

Average Balances and Rates
	Three Months Ended
	March 31,
	2011							2010
	Average							Average
	Balance		Interest		Rate(3)			Balance		Interest		Rate(3)
Assets (1)	(dollars in thousands)
Taxable loans	$	1,798,106	$	29,397		6.60	%	$	2,252,674	$	38,922		6.98	%
Tax-exempt loans (2)		8,391		87		4.20			10,128		105		4.20
Taxable securities		41,621		467		4.55			96,213		1,160		4.89
Tax-exempt securities (2)		30,956		332		4.35			64,415		685		4.31
Cash – interest bearing		369,793		232		0.25			274,955		157		0.23
Other investments		23,630		203		3.48			27,854		215		3.13
Interest Earning Assets		2,272,497		30,718		5.46			2,726,239		41,244		6.12
Cash and due from banks		50,888							59,018
Other assets, net		191,884							148,460
Total Assets	$	2,515,269						$	2,933,717

Liabilities
Savings and NOW	$	994,530		589		0.24		$	1,084,499		863		0.32
Time deposits		805,645		4,356		2.19			1,127,618		7,356		2.65
Other borrowings		104,907		1,323		5.11			227,621		2,994		5.33
Interest Bearing Liabilities		1,905,082		6,268		1.33			2,439,738		11,213		1.86
Demand deposits		448,979							327,570
Other liabilities		44,231							64,396
Shareholders’ equity		116,977							102,013
Total liabilities and shareholders’ equity	$	2,515,269						$	2,933,717

Net Interest Income			$	24,450						$	30,031

Net Interest Income as a Percent of Earning Assets						4.34	%						4.45	%

(1)	All domestic, except for $0.03 million and $0.9 million for the three months ended March 31, 2011 and 2010, respectively, of average payment plan receivables included in taxable loans for customers domiciled in Canada.

(2)	Interest on tax-exempt loans and securities is not presented on a fully tax equivalent basis due to the current net operating loss carryforward position and the deferred tax asset valuation allowance.

(3)	Annualized.

Commercial Loan Portfolio Analysis as of March 31, 2011

	Total Commercial Loans

			Watch Credits						Percent of Loan
Loan Category	All Loans		Performing		Non- performing		Total		Category in Watch Credit
	(dollars in thousands)
Land	$	20,957	$	5,578	$	1,821	$	7,399		35.3	%
Land Development		21,335		8,185		3,953		12,138		56.9
Construction		18,344		4,610		2,012		6,622		36.1
Income Producing		298,503		64,992		10,968		75,960		25.4
Owner Occupied		183,300		30,717		5,867		36,584		20.0
Total Commercial Real Estate Loans (1)	$	542,439	$	114,082	$	24,621	$	138,703		25.6

Other Commercial Loans(1)	$	145,410	$	20,805		1,893	$	22,698		15.6
Total non-performing commercial loans					$	26,514

(1)	The total of these two categories is different than the March 31, 2011, Consolidated Statement of Financial Condition due primarily to loans in process.