• Independent Bank Corporation
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  • Independent Bank Corporation Reports 2020 First Quarter Results
    Company Release - 04/30/2020 07:59

    GRAND RAPIDS, Mich., April 30, 2020 (GLOBE NEWSWIRE) -- Before summarizing the financial results for the quarter we want to take a moment to recognize that the COVID-19 pandemic has brought significant hardship to many of our customers and communities in so many ways. That is especially true for those who have been infected by the virus and suffered through the health issues that it has caused.  Our thoughts are with those who have been directly impacted, and we extend our appreciation to those who have aided and supported them.

    Independent Bank Corporation (NASDAQ: IBCP) continues to respond to the challenges of the current environment. Our response was formulated throughout the month of February as we prepared our infrastructure to allow the majority of our staff to work remotely.  On Mar. 3rd we activated our Business Continuity plan to protect our customers, employees and business.  We will continue to take the necessary steps to serve our communities while doing our part to minimize the spread of COVID-19.  The following is a brief description of our current initiatives:

    • Customer Safety and Service Levels:  Beginning Mar. 17th we limited our branch lobbies to appointment only and have kept drive through windows open.  With the ability to use drive through service, ATMs or our electronic banking solutions there has been minimal disruption to customers.  In addition, our flexible operating network has allowed us to efficiently redeploy our associates to high volume areas to fulfill customer requests into our call center, requests for consumer and commercial loan payment relief and mortgage financing requests.
    • Employee Safety:  For employees that need to remain in the branch servicing our customers, in addition to closing the branch lobbies, we have expanded sick and vacation time.  All non-branch employees either have the option, or are required to work remotely.  We currently have approximately 80% of our non-branch staff working remotely every day.  Prospectively, as our markets move out of the “Stay Home, Stay Safe” executive orders, we are installing “customer friendly” plastic shields throughout our delivery network to put both customers and staff at ease.
    • Loan Forbearances:  We take pride in being supportive of our customers and communities and have forbearance programs in place and available for those experiencing financial difficulty.  Through Apr. 17th, we’ve granted deferrals to 151 commercial customers with $129.3 million in loans, 605 retail customers with $76.6 million in portfolio loans, and 807 customers with $118.5 million within our book of  mortgage loans we service for others.  The forbearance terms are flexible enough to meet the specific needs of each customer, while protecting the safety and soundness of the Bank.
    • Payroll Protection Program:  Our response, and focus on this vital program, shows our commitment to the communities we serve. We have built an effective process to manage the high volume of applications that we’re receiving.  Customer demand for this program has been extraordinary.  Through Apr. 17th we had received 1,473 applications for $238.2 million in loan requests with 786 applications for $171.8 million accepted by the Small Business Administration (“SBA”) prior to depletion of the initial funding on Apr. 16th.  We anticipate continuing this program as additional funding is allocated to the SBA and becomes available.

    IBCP reported first quarter 2020 net income of $4.8 million, or $0.21 per diluted share, versus net income of $9.4 million, or $0.39 per diluted share, in the prior-year period. 

    Significant items impacting comparable first quarter 2020 and 2019 results include the following:

    • Provision for loan losses of $6.7 million ($0.24 per diluted share, after taxes) in the first quarter of 2020 due in part to the impact of COVID-19 protective measures on unemployment and economic activity as compared to $0.7 million ($0.02 per diluted share, after taxes) in the first quarter of 2019. The provision for loan losses, and the allowance for loan losses, were calculated under our existing incurred methodology. As permitted under section 4014 of the Coronavirus Aid, Relief, and Economic Security (“CARES”) Act, we have chosen to delay the implementation of Accounting Standards Update No. 2016-13, Measurement of Credit Losses on Financial Instruments or “CECL.”  This will be discussed further during our first quarter 2020 earnings conference call.
    • A change in the fair value due to price of capitalized mortgage loan servicing rights (the “MSR Change”) of a negative $5.9 million ($0.21 per diluted share, after taxes) as compared to a negative MSR Change of $2.2 million ($0.07 per diluted share, after taxes) for the first quarters of 2020 and 2019, respectively.

    The first quarter of 2020 was highlighted by:

    • Pre-tax, pre-provision income was $12.5 million in the first quarter of 2020 compared to $12.2 million in the first quarter of 2019 ($18.4 million vs $14.4 million excluding the MSR Change for the same respective periods);
    • Growth in gains on mortgage loans of $5.2 million, or 144.8%, compared to the year ago quarter;
    • Net growth in total deposits, excluding brokered deposits, of $81.8 million, or 11.6% annualized;
    • The payment of a 20 cent per share dividend on February 14, 2020.

    William B. (“Brad”) Kessel, the President and Chief Executive Officer of Independent Bank Corporation, commented:  “Amidst the extraordinary volatility in interest rates and uncertainty around the economic impact of COVID-19,  we were pleased with our first quarter results. The gains on mortgage loans more than offset the negative MSR Change and our provision for loan losses increased significantly due to the economic environment, while our core operating results were relatively stable.  We will continue to focus on the needs of our customers and communities, while preserving the value of our franchise.”

    Operating Results

    The Company’s net interest income totaled $30.2 million during the first quarter of 2020, a decrease of $0.05 million, or 0.2% from the year-ago period, and a decrease of $0.5 million, or 1.7%, from the fourth quarter of 2019. The Company’s tax equivalent net interest income as a percent of average interest-earning assets (the “net interest margin”) was 3.63% during the first quarter of 2020, compared to 3.88% in the year-ago quarter and 3.70% in the fourth quarter of 2019. The year-over-year quarterly decrease in net interest income is due to an increase in average interest-earning assets that was more than offset by a decline in the net interest margin.  Average interest-earning assets were $3.35 billion in the first quarter of 2020 compared to $3.15 billion in the year-ago quarter and $3.32 billion in the fourth quarter of 2019.  The decline in the net interest margin primarily reflects the impact of lower market interest rates.  Accretion of the discount recorded on loans acquired from our acquisition of TCSB Bancorp, Inc. totaled $0.3 million and $0.4 million in the first quarters of 2020 and 2019, respectively. 

    Non-interest income totaled $11.0 million and $10.0 million in the first quarters of 2020 and 2019, respectively. This increase was primarily due to changes in mortgage banking related revenues (net gains on mortgage loans partially offset by a decline in mortgage loan servicing, net), as described below.
    Net gains on mortgage loans were $8.8 million in the first quarter of 2020, compared to $3.6 million in the year-ago quarter.  Mortgage loan origination volume increased 125.8% to $311.1 million in the first quarter of 2020 compared to $137.8 million in the year ago period reflecting lower market interest rates, which have increased mortgage loan refinance activity.

    Mortgage loan servicing, net, generated a loss of $5.3 million and a loss of $1.2 million in the first quarters of 2020 and 2019, respectively. This activity is summarized in the following table:

     Three Months Ended 
    Mortgage loan servicing:(Dollars in thousands)
    Revenue, net$1,673 $1,476  
    Fair value change due to price (5,931) (2,203) 
    Fair value change due to pay-downs (1,042) (488) 

    The significant variance in the fair value change due to price relates primarily to the decline in mortgage loan interest rates in the first quarter of 2020.  This decline increased projected prepayment rates for mortgage loans serviced for others, leading to a decrease in fair value due to price.

    Capitalized mortgage loan servicing rights totaled $14.8 million at Mar. 31, 2020 compared to $19.2 million at Dec. 31, 2019.  As of Mar. 31, 2020, the Company serviced approximately $2.68 billion in mortgage loans for others on which servicing rights have been capitalized.

    Non-interest expenses totaled $28.7 million in the first quarter of 2020, compared to $28.0 million in the year-ago period. 

    The Company recorded an income tax expense of $0.9 million and $2.2 million in the first quarters of 2020 and 2019, respectively.   The decrease in income tax expense is primarily due to lower pre-tax earnings in the first quarter of 2020.     

    Asset Quality

    A breakdown of non-performing loans(1) by loan type is as follows:

    Loan Type3/31/202012/31/20193/31/2019
     (Dollars in thousands)
    Commercial$9,094 $1,377 $1,705 
    Consumer/installment 691  805  1,028 
    Mortgage 7,669  7,996  6,116 
    Total non-accrual loans 17,454  10,178  8,849 
    Less – government guaranteed loans 676  646  617 
    Total non-performing loans$16,778 $9,532 $8,232 
    Ratio of non-performing loans to total portfolio loans 0.62% 0.35% 0.31%
    Ratio of non-performing assets to total assets 0.50% 0.32% 0.28%
    Ratio of the allowance for loan losses to non-performing loans 193.68% 274.32% 306.78%

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

    Non-performing loans increased by $7.2 million since year-end 2019 due to an increase in non-performing commercial loans.  The increase in non-performing commercial loans primarily reflects the impact of a specific loan relationship that was in watch credit status at December 31, 2019.  Other real estate and repossessed assets totaled $1.5 million at Mar. 31, 2020 and $1.9 million at Dec. 31, 2019. 

    The provision for loan losses was an expense of $6.7 million and $0.7 million in the first quarters of 2020 and 2019, respectively.  Included in the first quarter 2020 provision for loan losses is a $4.9 million increase in the qualitative reserve.  The level of the provision for loan losses in each period reflects the Company’s overall assessment of the allowance for loan losses, taking into consideration factors such as loan mix, levels of non-performing and classified loans, loan net charge-offs and changes in economic conditions.  The Company recorded loan net charge offs of $0.4 million and $0.3 million in the first quarters of 2020 and 2019, respectively.  At Mar. 31, 2020, the allowance for loan losses totaled $32.5 million, or 1.20% of portfolio loans, compared to $26.1 million, or 0.96% of portfolio loans at Dec. 31, 2019 (1.25% and 1.01% of portfolio loans when excluding the remaining TCSB acquired loan balances for each period, respectively).

    Balance Sheet, Liquidity and Capital

    Total assets were $3.63 billion at Mar. 31, 2020, an increase of $67.7 million from Dec. 31, 2019, primarily reflecting an increase in securities available for sale partially offset by a decline in loans.  Loans, excluding loans held for sale, were $2.72 billion at Mar. 31, 2020, compared to $2.73 billion at Dec. 31, 2019.  Growth in commercial loans of $14.9 million and installment loans of $7.1 million were more than offset by a decline in mortgage loans of $28.9 million, due primarily to a securitization and a sale of $28.7 million of portfolio mortgage loans during the quarter.

    Deposits totaled $3.08 billion at Mar. 31, 2020, an increase of $46.8 million from Dec. 31, 2019.  The increase in deposits is primarily due to growth in demand deposits and reciprocal deposits that were partially offset by a decline in time and brokered time deposits. 

    Cash and cash equivalents totaled $70.3 million at Mar. 31, 2020, versus $65.3 million at Dec. 31, 2019. Securities available for sale totaled $594.3 million at Mar. 31, 2020, compared to $518.4 million at Dec. 31, 2019.

    Total shareholders’ equity was $335.6 million at Mar. 31, 2020, or 9.24% of total assets.  Tangible common equity totaled $302.2 million at Mar. 31, 2020, or $13.81 per share.  The Company’s wholly owned subsidiary, Independent Bank, remains significantly above “well capitalized” for regulatory purposes with the following ratios:

       Well Capitalized
    Regulatory Capital Ratios 3/31/202012/31/2019 
    Tier 1 capital to average total assets 9.31%  9.49% 5.00%
    Tier 1 common equity to risk-weighted assets11.76%11.96%6.50%
    Tier 1 capital to risk-weighted assets11.76%11.96%8.00%
    Total capital to risk-weighted assets12.98%12.96%10.00%

    Share Repurchase Plan

    On Dec. 17, 2019, the Board of Directors of the Company authorized the 2020 share repurchase plan.  Under the terms of the 2020 share repurchase plan, the Company is authorized to buy back up to 1,120,000 shares, or approximately 5% of its outstanding common stock.    The repurchase plan is authorized to last through Dec. 31, 2020.  Thus far in 2020, the Company has repurchased 678,929 shares at a weighted average price of $20.30 per share. Share repurchase activity ceased on March 16, 2020, and is on hold at this time.

    Earnings Conference Call
    Brad Kessel, President and CEO, and Steve Erickson, CFO, will review the quarterly and full-year results in a conference call for investors and analysts beginning at 11:00 am ET on Thursday, Apr. 30, 2020.

    To participate in the live conference call, please dial 1-866-200-8394. Also the conference call will be accessible through an audio webcast with user-controlled slides at the following event site/URL:  https://services.choruscall.com/links/ibcp200430.html

    A playback of the call can be accessed by dialing 1-877-344-7529 (Conference ID # 10141797). The replay will be available through May 7, 2020.

    About Independent Bank Corporation

    Independent Bank Corporation (NASDAQ: IBCP) is a Michigan-based bank holding company with total assets of approximately $3.6 billion.  Founded as First National Bank of Ionia in 1864, Independent Bank Corporation operates a branch network across Michigan'sLower 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 release may contain “forward-looking statements” within the meaning of the U.S. Private Securities Litigation Reform Act of 1995. Any statements that are not historical facts, including statements about our expectations, beliefs, plans, strategies, predictions, forecasts, objectives, or assumptions of future events or performance, may be forward-looking. These statements are often, but not always, made through the use of words or phrases such as “anticipates,” “believes,” “expects,” “can,” “could,” “may,” “predicts,” “potential,” “opportunity,” “should,” “will,” “estimate,” “plans,” “projects,” “continuing,” “ongoing,” “expects,” “seeks,” “intends” and similar words or phrases. Accordingly, these statements involve estimates, known and unknown risks, assumptions, and uncertainties that could cause actual strategies, actions, or results to differ materially from those expressed in them, and are not guarantees  of timing, future results, events, or performance. Because forward-looking statements are necessarily only estimates of future strategies, actions, or results, based on management’s current expectations, assumptions, and estimates on the date hereof, there can be no assurance that actual strategies, actions or results will not differ materially from expectations. Therefore, readers are cautioned not to place undue reliance on such statements.  Factors that could cause or contribute to such differences are changes in general economic, political or industry conditions; changes in monetary and fiscal policies, including the interest rate policies of the Federal Reserve Board; volatility and disruptions in capital and credit markets; the interdependence of financial service companies; changes in regulation or oversight; unfavorable developments concerning credit quality; any future acquisitions or divestitures; the effects of more stringent capital or liquidity requirements; declines or other changes in the businesses or industries of Independent Bank Corporation's customers; the implementation of Independent Bank Corporation's strategies and business models; Independent Bank Corporation's ability to utilize technology to efficiently and effectively develop, market and deliver new products and services; operational difficulties, failure of technology infrastructure or information security incidents; changes in the financial markets, including fluctuations in interest rates and their impact on deposit pricing; competitive product and pricing pressures among financial institutions within Independent Bank Corporation's markets; changes in customer behavior; management's ability to maintain and expand customer relationships; management's ability to retain key officers and employees; the impact of legal and regulatory proceedings or determinations; the effectiveness of methods of reducing risk exposures; the effects of terrorist activities and other hostilities; the effects of catastrophic events; changes in accounting standards and the critical nature of Independent Bank Corporation's accounting policies.

    Certain risks and important factors that could affect Independent Bank Corporation's future results are identified in its Annual Report on Form 10-K for the year ended December 31, 2019 and other reports filed with the SEC, including among other things under the heading “Risk Factors” in such Annual Report on Form 10-K. Any forward-looking statement speaks only as of the date on which it is made, and Independent Bank Corporation undertakes no obligation to update any forward-looking statement, whether to reflect events or circumstances, after the date on which the statement is made, to reflect new information or the occurrence of unanticipated events, or otherwise.

     Contact:  William B. Kessel, President and CEO, 616.447.3933
      Stephen A. Erickson, Chief Financial Officer, 616.447.3914

    Consolidated Statements of Financial Condition  
      March 31, December 31, 
       2020   2019   
      (In thousands, except share  
    Cash and due from banks $48,753  $53,295   
    Interest bearing deposits  21,538   12,009   
    Cash and Cash Equivalents  70,291   65,304   
    Interest bearing deposits - time  -   350   
    Securities available for sale  594,284   518,400   
    Federal Home Loan Bank and Federal Reserve Bank stock, at cost  18,359   18,359   
    Loans held for sale, carried at fair value  64,549   69,800   
    Commercial  1,181,599   1,166,695   
    Mortgage  1,069,967   1,098,911   
    Installment  466,549   459,417   
    Total Loans  2,718,115   2,725,023   
    Allowance for loan losses  (32,495)  (26,148)  
    Net Loans  2,685,620   2,698,875   
    Other real estate and repossessed assets  1,494   1,865   
    Property and equipment, net  37,776   38,411   
    Bank-owned life insurance  55,035   55,710   
    Deferred tax assets, net  4,280   2,072   
    Capitalized mortgage loan servicing rights  14,829   19,171   
    Other intangibles  5,071   5,326   
    Goodwill  28,300   28,300   
    Accrued income and other assets  52,499   42,751   
    Total Assets $3,632,387  $3,564,694   
    Liabilities and Shareholders' Equity  
    Non-interest bearing $874,935  $852,076   
    Savings and interest-bearing checking  1,229,999   1,186,745   
    Reciprocal  464,574   431,027   
    Time  359,050   376,877   
    Brokered time  155,006   190,002   
    Total Deposits  3,083,564   3,036,727   
    Other borrowings  101,954   88,646   
    Subordinated debentures  39,473   39,456   
    Accrued expenses and other liabilities  71,778   49,696   
    Total Liabilities  3,296,769   3,214,525   
    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:      
    21,892,001 shares at March 31, 2020 and 22,481,643 shares at December 31, 2019  338,528   352,344   
    Retained earnings  1,944   1,611   
    Accumulated other comprehensive loss  (4,854)  (3,786)  
    Total Shareholders’ Equity  335,618   350,169   
    Total Liabilities and Shareholders’ Equity $3,632,387  $3,564,694   

    Consolidated Statements of Operations 
      Three Months Ended 
      March 31, December 31,March 31, 
       2020   2019   2019  
    Interest Income (In thousands, except per share amounts) 
    Interest and fees on loans $31,764  $33,140  $32,681  
    Interest on securities       
    Taxable  3,059   3,031   3,006  
    Tax-exempt  390   325   374  
    Other investments  366   412   575  
    Total Interest Income  35,579   36,908   36,636  
    Interest Expense       
    Deposits  4,700   5,487   5,681  
    Other borrowings and subordinated debentures  688   711   712  
    Total Interest Expense  5,388   6,198   6,393  
    Net Interest Income  30,191   30,710   30,243  
    Provision for loan losses  6,721   (221)  664  
    Net Interest Income After Provision for Loan Losses  23,470   30,931   29,579  
    Non-interest Income       
    Service charges on deposit accounts  2,591   2,885   2,640  
    Interchange income  2,457   2,553   2,355  
    Net gains on assets       
    Mortgage loans  8,840   6,388   3,611  
    Securities  253   3   304  
    Mortgage loan servicing, net  (5,300)  1,348   (1,215) 
    Other  2,163   2,420   2,264  
    Total Non-interest Income  11,004   15,597   9,959  
    Non-interest Expense       
    Compensation and employee benefits  16,509   18,546   16,351  
    Occupancy, net  2,460   2,216   2,505  
    Data processing  2,355   2,308   2,144  
    Furniture, fixtures and equipment  1,036   1,055   1,029  
    Interchange expense  859   883   688  
    Loan and collection  805   709   634  
    Communications  803   728   769  
    Advertising  683   515   672  
    Legal and professional  393   533   369  
    FDIC deposit insurance  370   (38)  368  
    Net (gains) losses on other real estate and repossessed assets  109   (63)  119  
    Credit card and bank service fees  99   111   103  
    Other  2,238   1,800   2,239  
    Total Non-interest Expense  28,719   29,303   27,990  
    Income Before Income Tax  5,755   17,225   11,548  
    Income tax expense  945   3,346   2,167  
    Net Income $4,810  $13,879  $9,381  
    Net Income Per Common Share       
    Basic $0.22  $0.62  $0.40  
    Diluted $0.21  $0.61  $0.39  

    Selected Financial Data
     March 31, December 31,September 30,June 30, March 31, 
      2020  2019  2019  2019  2019 
     (Dollars in thousands except per share data)
    Three Months Ended        
    Net interest income$30,191 $30,710 $30,872 $30,756 $30,243 
    Provision for loan losses 6,721  (221) (271) 652  664 
    Non-interest income 11,004  15,597  12,275  9,905  9,959 
    Non-interest expense 28,719  29,303  27,848  26,592  27,990 
    Income before income tax 5,755  17,225  15,570  13,417  11,548 
    Income tax expense 945  3,346  3,125  2,687  2,167 
    Net income$4,810 $13,879 $12,445 $10,730 $9,381 
    Basic earnings per share$0.22 $0.62 $0.55 $0.47 $0.40 
    Diluted earnings per share 0.21  0.61  0.55  0.46  0.39 
    Cash dividend per share 0.20  0.18  0.18  0.18  0.18 
    Average shares outstanding 22,271,412  22,481,551  22,486,041  23,035,526  23,588,313 
    Average diluted shares outstanding 22,529,370  22,776,908  22,769,572  23,313,346  23,884,744 
    Performance Ratios        
    Return on average assets 0.54% 1.56% 1.42% 1.27% 1.13%
    Return on average common equity 5.54  15.92  14.64  12.72  11.14 
    Efficiency ratio (1) 69.32  62.56  63.76  64.57  69.27 
    As a Percent of Average Interest-Earning Assets (1)       
    Interest income 4.28% 4.44% 4.60% 4.73% 4.70%
    Interest expense 0.65  0.74  0.84  0.86  0.82 
    Net interest income 3.63  3.70  3.76  3.87  3.88 
    Average Balances        
    Loans$2,766,770 $2,776,037 $2,786,544 $2,699,648 $2,621,871 
    Securities available for sale 527,395  488,016  423,255  441,523  446,734 
    Total earning assets 3,350,948  3,320,828  3,285,081  3,191,264  3,152,177 
    Total assets 3,565,829  3,529,744  3,483,296  3,388,398  3,357,003 
    Deposits 3,066,298  3,040,099  3,023,334  2,929,885  2,909,096 
    Interest bearing liabilities 2,309,995  2,251,928  2,219,133  2,155,660  2,115,549 
    Shareholders' equity 348,963  345,910  337,162  338,254  341,592 
    End of Period        
    Tangible common equity ratio 8.40% 8.96% 8.71% 8.72% 9.26%
    Average equity to average assets 9.79  9.80  9.68  9.98  10.18 
    Tangible common equity per share        
    of common stock$13.81 $14.08 $13.63 $13.19 $13.17 
    Total shares outstanding 21,892,001  22,481,643  22,480,748  22,498,776  23,560,179 
    Selected Balances        
    Loans$2,718,115 $2,725,023 $2,722,446 $2,706,526 $2,618,795 
    Securities available for sale 594,284  518,400  439,592  430,305  461,531 
    Total earning assets 3,416,845  3,343,941  3,348,631  3,239,247  3,180,655 
    Total assets 3,632,387  3,564,694  3,550,837  3,438,302  3,383,606 
    Deposits 3,083,564  3,036,727  3,052,312  2,978,885  2,934,225 
    Interest bearing liabilities 2,350,056  2,312,753  2,272,587  2,194,970  2,141,083 
    Shareholders' equity 335,618  350,169  340,245  330,846  344,726 
    (1) Presented on a fully tax equivalent basis assuming a marginal tax rate of 21%.    

    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
     March 31,
      2020   2019 
     (Dollars in thousands)
    Net Interest Margin, Fully Taxable   
      Equivalent ("FTE")   
    Net interest income$30,191  $30,243 
    Add: taxable equivalent adjustment 121   117 
    Net interest income - taxable equivalent$30,312  $30,360 
    Net interest margin (GAAP) (1) 3.61%  3.86%
    Net interest margin (FTE) (1) 3.63%  3.88%
    Adjusted Net Income before tax   
    Income before income tax$5,755  $11,548 
    Provision for loan losses 6,721   644 
    Pre-tax, pre-provision income$12,476  $12,192 
    (1) Annualized.   

    Reconciliation of Non-GAAP Financial Measures (continued)      
    Independent Bank Corporation          
    Tangible Common Equity Ratio          
     March 31, December 31,September 30,June 30, March 31, 
      2020   2019   2019   2019   2019  
     (Dollars in thousands) 
    Common shareholders' equity$335,618  $350,169  $340,245  $330,846  $344,726  
    Goodwill 28,300   28,300   28,300   28,300   28,300  
    Other intangibles 5,071   5,326   5,598   5,870   6,143  
    Tangible common equity$302,247  $316,543  $306,347  $296,676  $310,283  
    Total assets$3,632,387  $3,564,694  $3,550,837  $3,438,302  $3,383,606  
    Goodwill 28,300   28,300   28,300   28,300   28,300  
    Other intangibles 5,071   5,326   5,598   5,870   6,143  
    Tangible assets$3,599,016  $3,531,068  $3,516,939  $3,404,132  $3,349,163  
    Common equity ratio 9.24%  9.82%  9.58%  9.62%  10.19% 
    Tangible common equity ratio 8.40%  8.96%  8.71%  8.72%  9.26% 
    Tangible Common Equity per Share of Common Stock:       
    Common shareholders' equity$335,618  $350,169  $340,245  $330,846  $344,726  
    Tangible common equity$302,247  $316,543  $306,347  $296,676  $310,283  
    Shares of common stock          
    outstanding (in thousands) 21,892   22,482   22,481   22,499   23,560  
    Common shareholders' equity per share          
    of common stock$15.33  $15.58  $15.13  $14.70  $14.63  
    Tangible common equity per share          
    of common stock$13.81  $14.08  $13.63  $13.19  $13.17  


    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.



    Source: Independent Bank Corporation