Independent Bank Corporation Reports 2024 Fourth Quarter Results

Rhea-AI Summary

Independent Bank (NASDAQ: IBCP) reported strong Q4 2024 results with net income of $18.5 million ($0.87 per diluted share), up from $13.7 million ($0.65 per diluted share) in Q4 2023. Full-year 2024 net income reached $66.8 million ($3.16 per diluted share), compared to $59.1 million ($2.79 per diluted share) in 2023.

Key Q4 highlights include a 2.4% increase in net interest income to $42.9 million, a net interest margin of 3.45%, and impressive loan portfolio growth of 9.7% annualized. The company achieved balanced growth with total loan growth of 7% and core deposit growth of 5% for the year. Credit metrics remained strong with near-historic lows in watch credits and non-performing assets.

The Board approved an 8% increase in quarterly dividend for 2025, marking the twelfth consecutive annual increase. The company also announced plans to sell approximately $971 million of mortgage servicing rights in Q1 2025, representing 27.8% of its total servicing portfolio.

Positive

• Net income increased 35% YoY to $18.5 million in Q4 2024
• Net interest income grew 6.8% YoY to $42.9 million in Q4 2024
• Commercial loan portfolio grew at 24% annualized rate in Q4
• Full-year EPS grew 13% to $3.16
• Board approved 8% dividend increase
• Strong capital ratios with Tier 1 capital at 11.74%

Negative

• Mortgage loan sale margins decreased year-over-year
• Non-interest expenses increased 16% YoY to $37.0 million in Q4
• Non-performing loans ratio increased to 0.15% from 0.14% YoY

Insights

Financial Analyst

Independent Bank delivered a remarkably strong Q4 2024 performance, demonstrating robust fundamentals across multiple metrics. The standout 9.7% annualized loan growth, driven by an impressive 24% annualized commercial loan expansion, reflects strong market penetration and effective execution of the bank's growth strategy.

Three key aspects deserve particular attention:

• Asset Quality Excellence: The bank maintains exceptional credit metrics with non-performing loans at just 0.15% of total portfolio loans and an allowance coverage ratio of 989.32%. This conservative positioning provides significant protection against potential credit deterioration.
• Strategic MSR Management: The planned sale of $971 million in mortgage servicing rights (27.8% of the portfolio) represents prudent balance sheet management, likely aimed at optimizing capital allocation and reducing servicing-related volatility.
• Capital & Liquidity Strength: With a Tier 1 capital ratio of 11.74% and unused credit lines of approximately $1.58 billion, the bank maintains substantial financial flexibility for continued growth or market opportunities.

The 8% dividend increase marks the 12th consecutive annual increase, reflecting management's confidence in sustained profitability. The efficiency ratio trends and cost management deserve monitoring, as non-interest expenses increased notably year-over-year, though partially offset by revenue growth.

Looking ahead, the robust commercial loan pipeline and strategic talent acquisition initiatives position the bank well for continued growth in 2025, though margin pressure and potential credit cycle shifts warrant careful monitoring.

Risk Management Specialist

The risk profile of Independent Bank exhibits notable strength across multiple dimensions. The institution's multi-layered liquidity strategy stands out, with $119.9 million in cash, $517.2 million in unpledged securities and substantial borrowing capacity. This provides robust protection against potential funding pressures.

The credit risk management framework shows particular sophistication:

• The 1.47% allowance for credit losses provides ample coverage for the current 0.15% non-performing loan ratio
• Watch credits at historic lows indicate strong underwriting discipline
• The $2.2 million provision expense reflects prudent forward-looking risk assessment

The capital management strategy balances growth support with shareholder returns effectively. The tangible common equity ratio improvement to 8.52% strengthens loss absorption capacity while maintaining operational flexibility. The strategic MSR sale announcement indicates proactive risk management, potentially reducing servicing-related volatility exposure.

Fourth Quarter Highlights

Highlights for the fourth quarter of 2024 include:

• An increase in net interest income of $1.0 million (2.4%) over the third quarter of 2024;
• A net interest margin of 3.45% (eight basis point increase from the linked quarter)
• A return on average assets and a return on average equity of 1.39% and 16.31%, respectively;
• Net growth in loans of $96.5 million (or 9.7% annualized) from September 30, 2024; and
• The payment of a 24 cent per share dividend on common stock on November 15, 2024.
  

GRAND RAPIDS, Mich., Jan. 23, 2025 (GLOBE NEWSWIRE) -- Independent Bank Corporation (NASDAQ: IBCP) reported fourth quarter 2024 net income of $18.5 million, or $0.87 per diluted share, versus net income of $13.7 million, or $0.65 per diluted share, in the prior-year period. For the year ended December 31, 2024, the Company reported net income of $66.8 million, or $3.16 per diluted share, compared to net income of $59.1 million, or $2.79 per diluted share, in 2023.

William B. (“Brad”) Kessel, the President and Chief Executive Officer of Independent Bank Corporation, commented: “Our fourth-quarter performance marked the culmination of another remarkable year, with our organization excelling on the fundamentals. I am especially pleased to report a notable 10% annualized growth rate in our loan portfolio for the fourth quarter of 2024, driven by an impressive 24% annualized growth rate in our commercial loan portfolio. This strong performance enabled us to achieve a $1 million increase in net interest income for the linked quarter, contributing to a healthy net interest margin of 3.45%. Our credit metrics remain outstanding, with watch credits and non-performing assets near historic lows. I am incredibly proud of our team's dedication and efforts throughout 2024, which translated into exceptional full-year results. We achieved balanced growth on both sides of the balance sheet, with total loan growth of 7% and core deposit growth of 5%. For the year, we delivered a return on average assets (ROAA) of 1.27%, a return on average equity (ROAE) of 15.66%, earnings per share (EPS) growth of 13%, and 13% growth in tangible book value per share (TBVPS). Looking ahead to 2025, we remain optimistic about sustaining these growth trends. Our confidence is bolstered by a robust commercial loan pipeline, the proven track record of our core team of professionals, and our on-going strategic initiative to attract and integrate talented bankers into our organization. Additionally, I am pleased our Board of Directors approved an 8% increase in our quarterly dividend in January, 2025 marking the twelfth consecutive annual increase for our shareholders.”

Significant items impacting comparable 2024 and 2023 results include the following:

• Changes in the fair value due to price of capitalized mortgage loan servicing rights (the “MSR Changes”) of $6.5 million ($0.24 per diluted share, after taxes) and $4.5 million ($0.17 per diluted share, after taxes) for the three-month and full-year ended December 31, 2024, respectively, as compared to $(3.6) million ($(0.14) per diluted share, after taxes) and $(0.3) million ($(0.01) per diluted share, after taxes) for the three-months and full-year ended December 31, 2023, respectively.
• The provision for credit losses was an expense of $2.2 million ($0.08 per diluted share, after taxes) and expense of $4.5 million ($0.17 per diluted share, after tax) in the fourth quarter and full year ended December 31, 2024, respectively, as compared to a credit of $(0.6) million ($(0.02) per diluted share, after taxes) and expense of $6.2 million ($0.23 per diluted share, after tax) in the fourth quarter and full year ended December 31, 2023, respectively.

Operating Results

The Company’s net interest income totaled $42.9 million during the fourth quarter of 2024, an increase of $2.7 million, or 6.8% from the year-ago period, and up $1.0 million, or 2.4%, from the third quarter of 2024. The Company’s tax equivalent net interest income as a percent of average interest-earning assets (the “net interest margin”) was 3.45% during the fourth quarter of 2024, compared to 3.26% in the year-ago period, and 3.37% in the third quarter of 2024. The year-over-year quarterly increase in net interest income was due to an increase in the net interest margin and an increase in average earnings assets. Average interest-earning assets were $5.01 billion in the fourth quarter of 2024, compared to $4.93 billion in the year ago quarter and $4.99 billion in the third quarter of 2024.

For the year ended December 31, 2024, net interest income totaled $166.2 million, an increase of $9.9 million, or 6.3% from the prior year ended December 31, 2023. The Company’s net interest margin for the year ended December 31, 2024 was 3.38% compared to 3.26% in 2023. The increase in net interest income for the year ended December 31, 2024 compared to 2023 reflects an increase in average interest- earning assets as well as an increase in the net interest margin.

Non-interest income totaled $19.1 million and $56.4 million, respectively, for the fourth quarter and full year of 2024, compared to $9.1 million and $50.7 million in the respective, comparable year ago periods. These changes were primarily due to variances in mortgage banking related revenues.

Net gains on mortgage loans in the fourth quarters of 2024 and 2023, were approximately $1.7 million and $2.0 million, respectively. The decrease in net gains on mortgage loans was due to lower profit margins on mortgage loan sales that was partially offset by an increase in the volume of mortgage loans sold. For the full year of 2024, net gains on mortgage loans totaled $6.6 million compared to $7.4 million in 2023. The decrease in net gains on mortgage loans was due to a combination of a lower loan sale margin on mortgage loan sales and a decrease in the volume of mortgage loans sold.

Mortgage loan servicing, net, generated a gain of $7.8 million and a loss of $2.4 million in the fourth quarters of 2024 and 2023, respectively. For the full year of 2024 and 2023, mortgage loan servicing, net, generated income of $9.4 million and $4.6 million, respectively. The significant variances in mortgage loan servicing, net is primarily due to changes in the fair value of capitalized mortgage loan servicing rights attributed to an increase in interest rates that resulted in a decrease in prepayment speeds and a higher earnings rate on escrow deposits. Mortgage loan servicing, net activity is summarized in the following table:

	Three months ended								Twelve months ended
	12/31/2024				12/31/2023				12/31/2024				12/31/2023
	(In thousands)
Mortgage loan servicing, net:
Revenue, net	$	2,233			$	2,216			$	8,914			$	8,828
Fair value change due to price		6,519				(3,644	)			4,540				(280	)
Fair value change due to pay-downs		(991	)			(1,014	)			(4,007	)			(3,922	)
Total	$	7,761			$	(2,442	)		$	9,447			$	4,626

On December 5, 2024 the company executed a letter of intent to sell approximately $971 million (27.8% of total servicing portfolio) of mortgage servicing rights to a third party. This sale represents approximately $13.5 million (27.4%) of the total capitalized mortgage loan servicing right asset. This transaction is expected to close in the first quarter of 2025. There was no financial impact in the fourth quarter of 2024 related to the execution of this letter of intent.

Non-interest expenses totaled $37.0 million in the fourth quarter of 2024, compared to $31.9 million in the year-ago period. For the full year of 2024, non-interest expenses totaled $135.1 million versus $127.1 million in 2023. The increase is primarily due to higher incentive based compensation attributed to higher expected payout levels, salary increases related to adjustments made at the beginning of the year as well as additions to the commercial lending team. The increase in data processing is primarily due to core data processor annual asset growth and CPI related cost increases as well as new solutions implemented during this time frame. 

The Company recorded an income tax expense of $4.3 million and $16.3 million in the fourth quarter and full year of 2024, respectively. This compares to an income tax expense of $4.2 million and $14.6 million in the fourth quarter and full year of 2023, respectively.

Asset Quality

A breakdown of non-performing loans by loan type is as follows:

	12/31/2024				12/31/2023				12/31/2022
Loan Type	(Dollars in thousands)
Commercial	$	54			$	28			$	38
Mortgage		7,005				6,425				4,745
Installment		733				970				598
Sub total		7,792				7,423				5,381
Less - government guaranteed loans		1,790				2,191				1,660
Total non-performing loans	$	6,002			$	5,232			$	3,721
Ratio of non-performing loans to total portfolio loans		0.15	%			0.14	%			0.11	%
Ratio of non-performing assets to total assets		0.13	%			0.11	%			0.08	%
Ratio of allowance for credit losses to total non-performing loans		989.32	%			1044.69	%			1409.16	%

The provision for credit losses was an expense of $2.2 million and a credit of $0.6 million in the fourth quarters of 2024 and 2023, respectively. The provision for credit losses was an expense of $4.5 million and $6.2 million in the full year of 2024 and 2023, respectively. The quarterly provision for credit losses in 2024, was primarily impacted by the growth in commercial loans that was partially offset by a decrease in allocation rates due to subjective factors. The Company recorded loan net charge-offs of $0.3 million and $0.2 million in the fourth quarters of 2024 and 2023, respectively. At December 31, 2024, the allowance for credit losses totaled $59.4 million, or 1.47% of total portfolio loans compared to $54.7 million, or 1.44% of total portfolio loans at December 31, 2023.

Balance Sheet, Liquidity and Capital

Total assets were $5.34 billion at December 31, 2024, an increase of $74.4 million from December 31, 2023. Loans, excluding loans held for sale, were $4.04 billion at December 31, 2024, compared to $3.79 billion at December 31, 2023. This increase is primarily due to growth in commercial and mortgage loans that were partially offset by a decrease in installment loans. Deposits totaled $4.65 billion at December 31, 2024, an increase of $31.2 million from December 31, 2023. This increase is primarily due to growth in savings and interest-bearing checking, reciprocal, and time deposit account balances that were partially offset by decreases in non-interest bearing and brokered time deposits.

Cash and cash equivalents totaled $119.9 million at December 31, 2024, versus $169.8 million at December 31, 2023. Securities available for sale (“AFS”) totaled $559.2 million at December 31, 2024, versus $679.4 million at December 31, 2023.

Total shareholders’ equity was $454.7 million at December 31, 2024, or 8.52% of total assets compared to $404.4 million or 7.68% at December 31, 2023. Tangible common equity totaled $424.9 million at December 31, 2024, or $20.33 per share compared to $374.1 million or $17.96 per share at December 31, 2023. The increase in shareholder equity as well as tangible common equity are primarily the result of earnings retention and a decline in accumulated other comprehensive loss related to unrealized losses on securities available for sale.

The Company’s wholly owned subsidiary, Independent Bank, remains significantly above “well capitalized” for regulatory purposes with the following ratios:

Regulatory Capital Ratios	12/31/2024			12/31/2023			Well Capitalized Minimum
Tier 1 capital to average total assets	9.58	%		8.80	%		5.00	%
Tier 1 common equity to risk-weighted assets	11.74	%		11.21	%		6.50	%
Tier 1 capital to risk-weighted assets	11.74	%		11.21	%		8.00	%
Total capital to risk-weighted assets	12.99	%		12.46	%		10.00	%

At December 31, 2024, in addition to liquidity available from our normal operating, funding, and investing activities, we had unused credit lines with the FHLB and FRB of approximately $1.08 billion and $501.8 million, respectively. We also had approximately $517.2 million in fair value of unpledged securities AFS and HTM at December 31, 2024 which could be pledged for an estimated additional borrowing capacity at the FHLB and FRB of approximately $483.8 million.

Share Repurchase Plan

On December 17, 2024, the Board of Directors of the Company authorized the 2025 share repurchase plan. Under the terms of the 2025 share repurchase plan, the Company is authorized to purchase up to 1,100,000 shares, or approximately 5% of its then outstanding common stock. The repurchase plan is authorized to last through December 31, 2025. The Company did not repurchase any shares of common stock during 2024.

Earnings Conference Call

Brad Kessel, President and CEO, Gavin A. Mohr, CFO and Joel Rahn, EVP – Commercial Banking will review the quarterly results in a conference call for investors and analysts beginning at 11:00 am ET on Thursday, January 23, 2025.

To participate in the live conference call, please dial 1-833-470-1428 (Access Code # 213949). Also, the conference call will be accessible through an audio webcast with user-controlled slides via the following site/URL: https://events.q4inc.com/attendee/519785754.

A playback of the call can be accessed by dialing 1-866-813-9403 (Access Code # 178534). The replay will be available through January 30, 2025.

About Independent Bank Corporation

Independent Bank Corporation (NASDAQ: IBCP) is a Michigan-based bank holding company with total assets of $5.3 billion. Founded as First National Bank of Ionia in 1864, Independent Bank Corporation operates a branch network across Michigan's Lower Peninsula through one state-chartered bank subsidiary. This subsidiary (Independent Bank) provides a full range of financial services, including commercial banking, mortgage lending, investments and insurance. Independent Bank Corporation is committed to providing exceptional personal service and value to its customers, stockholders and the communities it serves.

For more information, please visit our Web site at: IndependentBank.com.

Forward-Looking Statements

This presentation contains forward-looking statements, which are any statements or information that are not historical facts. These forward-looking statements include statements about our anticipated future revenue and expenses and our future plans and prospects.

Forward-looking statements involve inherent risks and uncertainties, and important factors could cause actual results to differ materially from those anticipated. For example, deterioration in general business and economic conditions or turbulence in domestic or global financial markets could adversely affect our revenues and the values of our assets and liabilities, reduce the availability of funding to us, lead to a tightening of credit, and increase stock price volatility. Our results could also be adversely affected by changes in interest rates; increases in unemployment rates; deterioration in the credit quality of our loan portfolios or in the value of the collateral securing those loans; deterioration in the value of our investment securities; legal and regulatory developments; changes in customer behavior and preferences; breaches in data security; and management’s ability to effectively manage the multitude of risks facing our business. Key risk factors that could affect our future results are described in more detail in our Annual Report on Form 10-K for the year ended December 31, 2023 and the other reports we file with the SEC, including under the heading “Risk Factors.” Investors should not place undue reliance on forward-looking statements as a prediction of our future results.

Any forward-looking statement speaks only as of the date on which it is made, and we undertake no obligation to update any forward-looking statement, whether as a result of new information, future events, or otherwise.

INDEPENDENT BANK CORPORATION AND SUBSIDIARIES Consolidated Statements of Financial Condition
		December 31,
			2024				2023
		(unaudited)
		(In thousands, except share amounts)
Assets
Cash and due from banks		$	56,984			$	68,208
Interest bearing deposits			62,898				101,573
Cash and Cash Equivalents			119,882				169,781
Securities available for sale			559,182				679,350
Securities held to maturity (fair value of $301,860 at December 31, 2024 and $318,606 at December 31, 2023)			339,436				353,988
Federal Home Loan Bank and Federal Reserve Bank stock, at cost			16,099				16,821
Loans held for sale, carried at fair value			7,643				12,063
Loans
Commercial			1,937,364				1,679,731
Mortgage			1,516,726				1,485,872
Installment			584,735				625,298
Total Loans			4,038,825				3,790,901
Allowance for credit losses			(59,379	)			(54,658	)
Net Loans			3,979,446				3,736,243
Other real estate and repossessed assets, net			938				569
Property and equipment, net			37,492				35,523
Bank-owned life insurance			53,855				54,341
Capitalized mortgage loan servicing rights, carried at fair value			46,796				42,243
Other intangibles			1,488				2,004
Goodwill			28,300				28,300
Accrued income and other assets			147,547				132,500
Total Assets		$	5,338,104			$	5,263,726
Liabilities and Shareholders’ Equity
Deposits
Non-interest bearing		$	1,013,647			$	1,076,093
Savings and interest-bearing checking			1,995,314				1,905,701
Reciprocal			907,031				832,020
Time			628,285				524,325
Brokered time			109,811				284,740
Total Deposits			4,654,088				4,622,879
Other borrowings			45,009				50,026
Subordinated debt			39,586				39,510
Subordinated debentures			39,796				39,728
Accrued expenses and other liabilities			104,939				107,134
Total Liabilities			4,883,418				4,859,277
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: 20,895,714 shares at December 31, 2024 and 20,835,633 shares at December 31, 2023			318,777				317,483
Retained earnings			205,853				159,108
Accumulated other comprehensive loss			(69,944	)			(72,142	)
Total Shareholders’ Equity			454,686				404,449
Total Liabilities and Shareholders’ Equity		$	5,338,104			$	5,263,726

INDEPENDENT BANK CORPORATION AND SUBSIDIARIES Consolidated Statements of Operations
		Three Months Ended												Twelve Months Ended
			December 31, 2024				September 30, 2024				December 31, 2023				December 31,
															2024				2023
		(unaudited)
INTEREST INCOME		(In thousands, except per share amounts)
Interest and fees on loans		$	58,346			$	58,410			$	54,333			$	228,585			$	197,725
Interest on securities
Taxable			4,417				4,502				5,646				18,883				23,314
Tax-exempt			2,905				3,404				3,434				13,100				13,209
Other investments			1,310				2,018				1,948				6,208				5,429
Total Interest Income			66,978				68,334				65,361				266,776				239,677
INTEREST EXPENSE
Deposits			22,546				24,462				23,111				92,694				75,075
Other borrowings and subordinated debt and debentures			1,581				2,018				2,139				7,834				8,273
Total Interest Expense			24,127				26,480				25,250				100,528				83,348
Net Interest Income			42,851				41,854				40,111				166,248				156,329
Provision for credit losses			2,217				1,488				(617	)			4,468				6,210
Net Interest Income After Provision for Credit Losses			40,634				40,366				40,728				161,780				150,119
NON-INTEREST INCOME
Interchange income			3,294				4,146				3,336				13,992				13,996
Service charges on deposit accounts			2,976				3,085				3,061				11,870				12,361
Net gains (losses) on assets
Mortgage loans			1,705				2,177				1,961				6,579				7,436
Equity securities at fair value			—				(8	)			—				2,685				—
Securities available for sale			(14	)			(145	)			—				(428	)			(222	)
Mortgage loan servicing, net			7,761				(3,130	)			(2,442	)			9,447				4,626
Other			3,399				3,383				3,181				12,217				12,479
Total Non-interest Income			19,121				9,508				9,097				56,362				50,676
NON-INTEREST EXPENSE
Compensation and employee benefits			22,886				20,048				19,049				84,955				78,965
Data processing			3,688				3,379				2,909				13,579				11,862
Occupancy, net			1,953				1,893				1,933				7,806				7,908
Interchange expense			1,131				1,149				1,110				4,504				4,332
Furniture, fixtures and equipment			928				932				974				3,762				3,756
Advertising			1,198				581				879				3,058				2,165
FDIC deposit insurance			729				664				796				2,870				3,005
Legal and professional			849				687				585				2,566				2,208
Loan and collection			606				657				456				2,474				2,174
Communications			462				519				535				2,095				2,406
Costs (recoveries) related to unfunded lending commitments			303				113				348				(373	)			424
Other			2,254				1,961				2,304				7,800				7,914
Total Non-interest Expense			36,987				32,583				31,878				135,096				127,119
Income Before Income Tax			22,768				17,291				17,947				83,046				73,676
Income tax expense			4,307				3,481				4,204				16,256				14,609
Net Income		$	18,461			$	13,810			$	13,743			$	66,790			$	59,067
Net income per common share
Basic		$	0.88			$	0.66			$	0.66			$	3.20			$	2.82
Diluted		$	0.87			$	0.65			$	0.65			$	3.16			$	2.79

INDEPENDENT BANK CORPORATION AND SUBSIDIARIES Selected Financial Data
	December 31, 2024				September 30, 2024				June 30, 2024				March 31, 2024				December 31, 2023
	(unaudited)
	(Dollars in thousands except per share data)
Three Months Ended
Net interest income	$	42,851			$	41,854			$	41,346			$	40,197			$	40,111
Provision for credit losses		2,217				1,488				19				744				(617	)
Non-interest income		19,121				9,508				15,172				12,561				9,097
Non-interest expense		36,987				32,583				33,333				32,193				31,878
Income before income tax		22,768				17,291				23,166				19,821				17,947
Income tax expense		4,307				3,481				4,638				3,830				4,204
Net income	$	18,461			$	13,810			$	18,528			$	15,991			$	13,743
Basic earnings per share	$	0.88			$	0.66			$	0.89			$	0.77			$	0.66
Diluted earnings per share		0.87				0.65				0.88				0.76				0.65
Cash dividend per share		0.24				0.24				0.24				0.24				0.23
Average shares outstanding		20,893,820				20,896,019				20,901,741				20,877,067				20,840,680
Average diluted shares outstanding		21,122,096				21,115,273				21,105,387				21,079,607				21,049,030
Performance Ratios
Return on average assets		1.39	%			1.04	%			1.44	%			1.24	%			1.04	%
Return on average equity		16.31				12.54				17.98				15.95				14.36
Efficiency ratio (1)		59.09				62.82				61.49				60.26				64.27
As a Percent of Average Interest-Earning Assets (1)
Interest income		5.37	%			5.48	%			5.45	%			5.34	%			5.29	%
Interest expense		1.92				2.11				2.05				2.04				2.03
Net interest income		3.45				3.37				3.40				3.30				3.26
Average Balances
Loans	$	3,994,661			$	3,909,954			$	3,849,199			$	3,810,526			$	3,764,752
Securities		912,073				933,750				944,435				999,140				1,027,240
Total earning assets		5,007,566				4,985,842				4,893,367				4,910,669				4,928,697
Total assets		5,300,368				5,275,623				5,181,317				5,201,452				5,233,666
Deposits		4,655,091				4,616,119				4,531,917				4,561,645				4,612,797
Interest bearing liabilities		3,717,483				3,689,684				3,611,972				3,627,446				3,635,771
Shareholders' equity		450,214				438,077				414,549				403,225				379,614

(1) Presented on a fully tax equivalent basis assuming a marginal tax rate of 21%.

INDEPENDENT BANK CORPORATION AND SUBSIDIARIES Selected Financial Data (continued)
	December 31, 2024				September 30, 2024				June 30, 2024				March 31, 2024				December 31, 2023
	(unaudited)
	(Dollars in thousands except per share data)
End of Period
Capital
Tangible common equity ratio		8.00	%			8.08	%			7.63	%			7.41	%			7.15	%
Tangible common equity ratio excluding accumulated other comprehensive loss		9.10				8.99				8.76				8.57				8.31
Average equity to average assets		8.49				8.30				8.00				7.75				7.25
Total capital to risk-weighted assets (2)		14.24				14.25				14.21				13.85				13.71
Tier 1 capital to risk-weighted assets (2)		12.07				12.06				12.01				11.65				11.50
Common equity tier 1 capital to risk-weighted assets (2)		11.19				11.16				11.09				10.73				10.58
Tier 1 capital to average assets (2)		9.86				9.63				9.59				9.29				9.03
Common shareholders' equity per share of common stock	$	21.76			$	21.65			$	20.60			$	19.88			$	19.41
Tangible common equity per share of common stock		20.33				20.22				19.16				18.44				17.96
Total shares outstanding		20,895,714				20,893,800				20,899,358				20,903,677				20,835,633
Selected Balances
Loans	$	4,038,825			$	3,942,287			$	3,851,889			$	3,839,965			$	3,790,901
Securities		898,618				932,312				936,194				963,577				1,033,338
Total earning assets		5,024,083				4,964,784				4,979,555				4,949,496				4,954,696
Total assets		5,338,104				5,259,268				5,277,500				5,231,255				5,263,726
Deposits		4,654,088				4,626,875				4,614,328				4,582,414				4,622,879
Interest bearing liabilities		3,764,832				3,682,482				3,694,025				3,677,060				3,676,050
Shareholders' equity		454,686				452,369				430,459				415,570				404,449

(2) December 31, 2024 are Preliminary.

Reconciliation of Non-GAAP Financial Measures
Independent Bank Corporation

Independent Bank Corporation believes non-GAAP measures are meaningful because they reflect adjustments commonly made by management, investors, regulators and analysts to evaluate the adequacy of common equity and performance trends. Tangible common equity is used by the Company to measure the quality of capital.

Reconciliation of Non-GAAP Financial Measures

	Three Months Ended December 31,								Twelve Months Ended December 31,
		2024				2023				2024				2023
	(Dollars in thousands)
Net Interest Margin, Fully Taxable Equivalent ("FTE")
Net interest income	$	42,851			$	40,111			$	166,248			$	156,329
Add: taxable equivalent adjustment		389				178				902				900
Net interest income - taxable equivalent	$	43,240			$	40,289			$	167,150			$	157,229
Net interest margin (GAAP) (1)		3.42	%			3.25	%			3.36	%			3.24	%
Net interest margin (FTE) (1)		3.45	%			3.26	%			3.38	%			3.26	%

(1) Quarter to date are Annualized.

Tangible Common Equity Ratio

	December 31, 2024				September 30, 2024				June 30, 2024				March 31, 2024				December 31, 2023
	(Dollars in thousands)
Common shareholders' equity	$	454,686			$	452,369			$	430,459			$	415,570			$	404,449
Less:
Goodwill		28,300				28,300				28,300				28,300				28,300
Other intangibles		1,488				1,617				1,746				1,875				2,004
Tangible common equity		424,898				422,452				400,413				385,395				374,145
Addition:
Accumulated other comprehensive loss for regulatory purposes		64,146				52,454				65,030				65,831				66,344
Tangible common equity excluding other comprehensive loss adjustments	$	489,044			$	474,906			$	465,443			$	451,226			$	440,489
Total assets	$	5,338,104			$	5,259,268			$	5,277,500			$	5,231,255			$	5,263,726
Less:
Goodwill		28,300				28,300				28,300				28,300				28,300
Other intangibles		1,488				1,617				1,746				1,875				2,004
Tangible assets		5,308,316				5,229,351				5,247,454				5,201,080				5,233,422
Addition:
Net unrealized losses on available for sale securities and derivatives, net of tax		64,146				52,454				65,030				65,831				66,344
Tangible assets excluding other comprehensive loss adjustments	$	5,372,462			$	5,281,805			$	5,312,484			$	5,266,911			$	5,299,766
Common equity ratio		8.52	%			8.60	%			8.16	%			7.94	%			7.68	%
Tangible common equity ratio		8.00	%			8.08	%			7.63	%			7.41	%			7.15	%
Tangible common equity ratio excluding other comprehensive loss		9.10	%			8.99	%			8.76	%			8.57	%			8.31	%
Tangible Common Equity per Share of Common Stock:
Common shareholders' equity	$	454,686			$	452,369			$	430,459			$	415,570			$	404,449
Tangible common equity	$	424,898			$	422,452			$	400,413			$	385,395			$	374,145
Shares of common stock outstanding (in thousands)		20,896				20,894				20,899				20,904				20,836
Common shareholders' equity per share of common stock	$	21.76			$	21.65			$	20.60			$	19.88			$	19.41
Tangible common equity per share of common stock	$	20.33			$	20.22			$	19.16			$	18.44			$	17.96

The tangible common equity ratio removes the effect of goodwill and other intangible assets from capital and total assets. Tangible common equity per share of common stock removes the effect of goodwill and other intangible assets from common shareholders’ equity per share of common stock.

Contact:

William B. Kessel, President and CEO, 616.447.3933 Gavin A. Mohr, Chief Financial Officer, 616.447.3929

FAQ

What was Independent Bank 's (IBCP) Q4 2024 earnings per share?

IBCP reported earnings of $0.87 per diluted share in Q4 2024, compared to $0.65 per diluted share in Q4 2023.

How much did IBCP's loan portfolio grow in Q4 2024?

IBCP's loan portfolio grew by $96.5 million, or 9.7% annualized, in Q4 2024, with commercial loans growing at a 24% annualized rate.

What is IBCP's dividend increase for 2025?

IBCP's Board approved an 8% increase in quarterly dividend for 2025, marking the twelfth consecutive annual increase.

What was IBCP's net interest margin in Q4 2024?

IBCP's net interest margin was 3.45% in Q4 2024, an eight basis point increase from the previous quarter.

What is the size of IBCP's mortgage servicing rights sale planned for Q1 2025?

IBCP plans to sell approximately $971 million of mortgage servicing rights, representing 27.8% of its total servicing portfolio.