IONIA, Mich., Oct. 30, 2012 /PRNewswire/ -- Independent Bank Corporation (Nasdaq: IBCP) reported third quarter 2012 net income applicable to common stock of $5.4 million, or $0.16 per diluted share, versus a net loss applicable to common stock of $5.2 million, or $0.61 per share, in the prior-year period. For the nine months ended Sept. 30, 2012, the Company reported net income applicable to common stock of $11.0 million, or $0.36 per diluted share, compared to a net loss applicable to common stock of $14.6 million, or $1.78 per share, in the prior-year period. For periods where the Company is reporting a profit, the diluted earnings per share calculation includes, among other things, the assumed conversion of mandatorily convertible preferred stock using a five-day average price per common share based on the applicable period end.

The Company's third consecutive profitable quarter was highlighted by:


    --  Additional improvement in asset quality, with non-performing assets down
        7% during the quarter and 26% since the end of 2011.
    --  A $5.9 million, or 96%, year-over-year decline in the quarterly
        provision for loan losses.
    --  Strong mortgage-banking results with a $2.6 million, or 127%,
        year-over-year increase in quarterly net gains on mortgage loans.
    --  Year-over-year growth in core deposits (excluding the pending impact of
        a branch sale).
    --  Regulatory capital ratios that increased and remain above minimum
        requirements for "well-capitalized" institutions.

The previously announced sale of 21 branches to Chemical Bank (the "Branch Sale") did not close in the third quarter of 2012. The Branch Sale is now expected to close prior to year end 2012.

Michael M. Magee, the Chief Executive Officer of Independent Bank Corporation, commented: "We are very pleased to report our third consecutive quarter of profitability in 2012 as well as further progress in improving asset quality, as evidenced by a reduction in our non-performing loans, loan net charge-offs and the provision for loan losses as compared to the year ago quarter. We remain focused on building consistent profitability. Our capital initiatives remain centered on strategies to convert the preferred stock owned by the U.S. Treasury into common stock and exiting TARP, while still preserving the potential future use of our net deferred tax asset, which totaled approximately $69.2 million at Sept. 30, 2012 and on which we have established a full valuation allowance. The potential future recovery of this valuation allowance represents a source of capital that would be of substantial value to our shareholders. Also, the Branch Sale is expected to have a significant positive impact on our regulatory capital ratios."

Operating Results

The Company's net interest income totaled $21.5 million during the third quarter of 2012, a decrease of $2.3 million, or 9.8% from the year-ago period, and a decrease of $0.4 million, or 1.7% from the second quarter of 2012. The Company's net interest income as a percent of average interest-earning assets (the "net interest margin") was 3.92% during the third quarter of 2012, compared to 4.59% in the year-ago period, and 4.02% in the second quarter of 2012. The net interest margin decreased due primarily to a change in asset mix, as higher yielding loans declined and lower yielding short-term investments increased. The increase in lower yielding interest-bearing cash balances and other short-term investments, in part, reflects the Company's efforts to increase liquidity in order to provide the future funding needed for the pending Branch Sale. The year-over-year decrease in net interest income was partially offset by an increase in average interest-earning assets, which rose to $2.18 billion in the third quarter of 2012 compared to $2.06 billion in the year-ago quarter and $2.18 billion in the second quarter of 2012. The increase in average interest-earning assets in 2012 primarily reflects a rise in securities available for sale and overnight interest-bearing balances at the Federal Reserve Bank that were partially offset by a decline in loans.

For the first nine months of 2012, net interest income totaled $65.4 million, a decrease of $6.2 million, or 8.7% from 2011. The Company's net interest margin for the first nine months of 2012 decreased to 4.03% compared to 4.43% in 2011. The reasons for the decline in net interest income for the first nine months of 2012 are generally consistent with those described above for the comparative quarterly periods.

Service charges on deposits totaled $4.7 million and $13.5 million, respectively, for the third quarter and first nine months of 2012, relatively unchanged when compared to $4.6 million and $13.7 million, respectively, in the year ago periods. Interchange income was also relatively unchanged and totaled $2.3 million and $7.1 million for the third quarter and first nine months of 2012, respectively, compared to $2.4 million and $6.8 million, respectively, in the year ago periods.

Net gains on mortgage loans were $4.6 million in the third quarter of 2012, compared to $2.0 million in the year-ago quarter. For the first nine months of 2012, net gains on mortgage loans totaled $12.0 million compared to $5.8 million in 2011. The increase in net gains relates primarily to a rise in mortgage loan sales volume associated with increased origination volume driven by record low interest rates.

Mortgage loan servicing generated a loss of $0.4 million and $2.7 million in the third quarters of 2012 and 2011, respectively. This decreased loss was due to the change in the impairment reserve (a $0.4 million impairment charge in the third quarter of 2012 compared to a $3.1 million impairment charge in the year-ago quarter) that was partially offset by a $0.4 million increase in the amortization of capitalized mortgage loan servicing rights. The impairment charge in the third quarter of 2012 primarily reflects lower mortgage loan interest rates resulting in higher estimated future prepayment rates. For the first nine months of 2012 and 2011, mortgage loan servicing generated a loss of $0.7 million and $1.9 million, respectively. The first nine months comparative variance is primarily due to the change in the impairment reserve (a $0.6 million impairment charge in 2012 compared to a $3.2 million impairment charge in 2011) that was partially offset by a $1.3 million increase in the amortization of capitalized mortgage loan servicing rights. Capitalized mortgage loan servicing rights totaled $10.2 million at Sept. 30, 2012 compared to $11.2 million at Dec. 31, 2011. As of Sept. 30, 2012, the Company serviced approximately $1.76 billion in mortgage loans for others on which servicing rights have been capitalized.

Non-interest expenses totaled $29.3 million in the third quarter of 2012, compared to $31.5 million in the year-ago period. The quarterly year-over-year decline in non-interest expenses was primarily due to decreases in net losses on other real estate and repossessed assets (down $1.6 million), credit card and bank service fees (down $0.4 million), and vehicle service contract counterparty contingencies (down $1.1 million). These declines were partially offset by an increase in compensation and benefits (up $1.0 million) as well as a $0.9 million write down of property and equipment related to branches that will be closed in the fourth quarter of 2012. For the first nine months of 2012, non-interest expenses totaled $86.8 million versus $97.2 million in 2011. This decline in non-interest expenses was primarily due to decreases in loan and collection costs (down $2.0 million), occupancy costs (down $0.7 million), net losses on other real estate and repossessed assets (down $2.2 million), vehicle service contract counterparty contingencies expense (down $3.9 million), credit card and bank service fees (down $1.2 million), and other non-interest expenses (down $2.0 million). These year-to-date declines were partially offset by an increase in compensation and benefits (up $1.6 million) as well as the aforementioned $0.9 million write down of property and equipment. Credit related costs (loan and collection, net losses on other real estate and repossessed assets, and vehicle service contract counterparty contingencies) have declined significantly in 2012, which primarily reflects the overall decrease in the volume of problem credits (non-performing loans and "watch" credits), stabilization in collateral values, and lower expected incurred losses and reduced levels of payment plan receivables. The increase in compensation and benefits primarily reflects expenses associated with reinstating certain employee incentive programs (including the Company's employee stock ownership plan) that had been suspended or reduced in prior years. This increase was partially offset by a 5.8% decline in full time equivalent employees in the first nine months of 2012 as compared to the prior year period.

Asset Quality

Commenting on asset quality, CEO Magee added: "Our provision for loan losses decreased by $5.9 million, or 95.9%, in the third quarter of 2012 compared to the year-ago amount, primarily reflecting a reduction in non-performing loans, a lower level of watch credits, reduced loan net charge-offs, and an overall decline in total loan balances. Since the start of this year, non-performing loans and commercial loan watch credits have declined by approximately 35% and 21%, respectively. In addition, thirty- to eighty-nine day delinquency rates at Sept. 30, 2012 were 0.92% for commercial loans and 1.16% for mortgage and consumer loans. These are near to the lowest levels that we have seen in several years. Nonetheless, we continue to focus on further improving asset quality and reducing credit related costs."

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


    Loan Type                            9/30/2012  12/31/2011  9/30/2011
                                     -------------  ----------  ---------
                           (Dollars in Millions)
    Commercial                               $19.5       $29.3      $22.3
    Consumer/installment                       2.5         3.5        3.1
    Mortgage                                  16.6        26.2       24.2
    Payment plan
     receivables(2)                            0.2         0.9        1.3
                                               ---         ---        ---
      Total                                  $38.8       $59.9      $50.9
                                             -----       -----      -----
    Ratio of non-
     performing loans to
     total portfolio loans                    2.71%       3.80%      3.13%
                                              ----        ----       ----
    Ratio of non-
     performing assets to
     total assets                             2.88%       4.07%      3.66%
                                              ----        ----       ----
    Ratio of the allowance
     for loan losses to
     non-performing loans                   123.62%      98.33%    115.56%
                                            ------       -----     ------

(1) Excludes loans that are classified as "troubled debt restructured" that are still performing.
(2) Represents payment plans for which no payments have been received for 90 days or more and for which Mepco has not yet completed the process to charge the applicable counterparty for the balance due. These balances exclude receivables due from Mepco counterparties related to the cancellation of payment plan receivables.

Non-performing loans have declined by $21.0 million, or 35.1%, since year-end 2011. All categories of non-performing loans declined, but the principal decreases since year-end 2011 were in commercial loans and residential mortgage loans. The decline in non-performing loans primarily reflects loan net charge-offs, pay-offs, negotiated transactions and the migration of loans into ORE during 2012. Non-performing commercial loans have declined by $58.5 million, or 75.0%, since they peaked in 2008. Non-performing retail (residential mortgage and consumer/installment) loans have declined by $40.1 million, or 67.7%, since they peaked in 2009. Other real estate and repossessed assets totaled $30.3 million at Sept. 30, 2012, compared to $34.0 million at Dec. 31, 2011.

The provision for loan losses was $0.3 million and $6.2 million in the third quarters of 2012 and 2011, respectively. For the first nine months of 2012, the provision for loan losses totaled $6.4 million versus $21.0 million in 2011. 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, and loan net charge-offs. Loan net charge-offs were $3.7 million (1.00% annualized of average loans) in the third quarter of 2012, compared to $7.9 million (1.89% annualized of average loans) in the third quarter of 2011. Loan net charge-offs were $16.7 million (1.46% of average loans) and $30.1 million (2.35% of average loans) for the first nine months of 2012 and 2011, respectively. The year to date declines in 2012 loan net charge-offs by category were: commercial loans $9.2 million; mortgage loans $3.2 million; and consumer/installment loans $0.9 million. At Sept. 30, 2012, the allowance for loan losses totaled $48.0 million, or 3.35% of portfolio loans, compared to $58.9 million, or 3.73% of portfolio loans, at Dec. 31, 2011.

Balance Sheet, Liquidity and Capital

Total assets were $2.40 billion at Sept. 30, 2012, an increase of $93.4 million, or 4.0%, from Dec. 31, 2011. Loans, excluding loans held for sale, were $1.43 billion at Sept. 30, 2012, compared to $1.58 billion at Dec. 31, 2011. Deposits (including $405.9 million related to the aforementioned pending Branch Sale) totaled $2.17 billion at Sept. 30, 2012, an increase of $84.4 million from Dec. 31, 2011. The increase in deposits is primarily due to growth in checking and savings.

Cash and cash equivalents totaled $460.5 million at Sept. 30, 2012, versus $341.1 million at Dec. 31, 2011. Securities available for sale totaled $230.2 million at Sept. 30, 2012, versus $157.4 million at Dec. 31, 2011. This $72.7 million increase is primarily due to the purchase of residential mortgage-backed and U.S. government agency securities during the first nine months of 2012.

Total shareholders' equity was $121.5 million at Sept. 30, 2012, or 5.1% of total assets. Tangible common equity totaled $31.6 million at Sept. 30, 2012, or $3.59 per share. The Company's wholly owned subsidiary, Independent Bank, remains "well capitalized" for regulatory purposes with the following ratios:


    Regulatory Capital
     Ratio             9/30/2012  12/31/2011  Well Capitalized Minimum
    ------------------ ---------  ----------  ------------------------

    Tier 1 capital to
     average total
     assets                 7.29%       6.77%                        5.00%
    Tier 1 capital to
     risk-weighted
     assets                11.94%      10.13%                        6.00%
    Total capital to
     risk-weighted
     assets                13.22%      11.41%                       10.00%

About Independent Bank Corporation

Independent Bank Corporation (Nasdaq Symbol: IBCP) is a Michigan-based bank holding company with total assets of approximately $2.4 billion. Founded as First National Bank of Ionia in 1864, Independent Bank Corporation now operates convenient locations 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 title services. Independent Bank has received the "Highest Customer Satisfaction with Retail Banking in the North Central Region" from the J.D. Power and Associates 2012 Retail Banking Satisfaction Study(SM). The J.D. Power and Associates study results are based on experiences and perceptions of consumers surveyed January-February, 2012. 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 website at: www.IndependentBank.com.

Any statements in this news release that are not historical facts are forward-looking statements as defined in the Private Securities Litigation Reform Act of 1995. Words such as "expect," "believe," "intend," "estimate," "project," "may" and similar expressions are intended to identify forward-looking statements. These forward-looking statements are predicated on management's beliefs and assumptions based on information known to Independent Bank Corporation's management as of the date of this news release and do not purport to speak as of any other date. Forward-looking statements may include descriptions of plans and objectives of Independent Bank Corporation's management for future operations, products or services, and forecasts of the Company's revenue, earnings or other measures of economic performance, including statements of profitability, estimates of credit quality trends, and statements about the potential value of our deferred tax assets. Such statements reflect the view of Independent Bank Corporation's management as of this date with respect to future events and are not guarantees of future performance. These forward-looking statements involve assumptions and are subject to substantial risks and uncertainties, such as changes in Independent Bank Corporation's plans, objectives, expectations and intentions. Should one or more of these risks materialize or should underlying beliefs or assumptions prove incorrect, the Company's actual results could differ materially from those discussed. Factors that could cause or contribute to such differences include the ability of Independent Bank Corporation to meet the objectives of its capital restoration plan, the ability of Independent Bank to remain well-capitalized under federal regulatory standards, the pace of economic recovery within Michigan and beyond, our ability to collect receivables from Mepco Finance Corporation's counterparties related to cancellations of payment plans, changes in interest rates, changes in the accounting treatment of any particular item, the results of regulatory examinations, changes in industries where the Company has a concentration of loans, changes in the level of fee income, changes in general economic conditions and related credit and market conditions, and the impact of regulatory responses to any of the foregoing. Forward-looking statements speak only as of the date they are made. Independent Bank Corporation does not undertake to update forward-looking statements to reflect facts, circumstances, assumptions or events that occur after the date the forward-looking statements are made. For any forward-looking statements made in this news release or in any documents, Independent Bank Corporation claims the protection of the safe harbor for forward-looking statements contained in the Private Securities Litigation Reform Act of 1995.

INDEPENDENT BANK CORPORATION AND SUBSIDIARIES
Consolidated Statements of Financial Condition



                                         September 30,  December 31,
                                                  2012          2011
                                                  ----          ----
                                                 (unaudited)
                                                 ----------
    Assets                                (In thousands, except share
                                                   amounts)
    Cash and due from banks                                  $56,911     $62,777
    Interest bearing
     deposits                                                403,633     278,331
                                                             -------     -------
                           Cash and Cash
                             Equivalents                     460,544     341,108
    Trading securities                                            38          77
    Securities available
     for sale                                                230,186     157,444
    Federal Home Loan Bank
     and Federal Reserve
     Bank stock, at cost                                      20,494      20,828
    Loans held for sale,
     carried at fair value                                    41,969      44,801
    Loans held for sale,
     carried at lower of
     cost or fair value                                       52,280           -
    Loans
      Commercial                                             603,538     651,155
      Mortgage                                               537,107     590,876
      Installment                                            197,736     219,559
      Payment plan
       receivables                                            93,608     115,018
                             Total Loans                   1,431,989   1,576,608
      Allowance for loan
       losses                                                (48,021)    (58,884)
                                                             -------     -------
                               Net Loans                   1,383,968   1,517,724
    Other real estate and
     repossessed assets                                       30,347      34,042
    Property and equipment,
     net                                                      47,062      62,548
    Bank-owned life
     insurance                                                50,493      49,271
    Other intangibles                                          6,793       7,609
    Capitalized mortgage
     loan servicing rights                                    10,205      11,229
    Prepaid FDIC deposit
     insurance assessment                                     10,229      12,609
    Vehicle service
     contract counterparty
     receivables, net                                         18,773      29,298
    Property and equipment
     held for sale                                            10,148           -
    Accrued income and
     other assets                                             27,303      18,818
                            Total Assets                  $2,400,832  $2,307,406
                                                          ==========  ==========
    Liabilities and
     Shareholders' Equity
    Deposits
      Non-interest bearing                                  $485,109    $497,718
      Savings and interest-
       bearing checking                                      853,603   1,019,603
      Retail time                                            377,085     526,525
      Brokered time                                           48,859      42,279
                                                              ------      ------
                          Total Deposits                   1,764,656   2,086,125
    Deposits held for sale
     relating to branch
     sale                                                    405,850           -
    Other borrowings                                          17,720      33,387
    Subordinated debentures                                   50,175      50,175
    Vehicle service
     contract counterparty
     payables                                                  8,414       6,633
    Accrued expenses and
     other liabilities                                        32,489      28,459
                       Total Liabilities                   2,279,304   2,204,779
                                                           ---------   ---------
    Shareholders' Equity
      Preferred stock, no par
       value, 200,000 shares
       authorized; 74,426
       shares
        issued and outstanding
         at September 30, 2012
         and December 31, 2011;
        liquidation preference:
         $84,099 at  September
         30, 2012 and
            $81,023 at December 31, 2011                      83,097      79,857
      Common stock, no par
       value, 500,000,000
       shares authorized;
         issued and outstanding:
           8,804,415 shares at
           September 30, 2012
         and 8,491,526 shares at
          December 31, 2011                                  250,080     248,950
      Accumulated deficit                                   (203,217)   (214,259)
      Accumulated other
       comprehensive loss                                     (8,432)    (11,921)
                     Total Shareholders'
                                  Equity                     121,528     102,627
                                                             -------     -------
                   Total Liabilities and
                    Shareholders' Equity                  $2,400,832  $2,307,406
                                                          ==========  ==========

INDEPENDENT BANK CORPORATION AND SUBSIDIARIES
Consolidated Statements of Operations



                                                                             Three Months Ended                      Nine Months Ended
                                                                                     September 30,                      June 30,         September 30,          September 30,
                                                                                                      2012                         2012                   2011               2012      2011
                                                                                                      ----                         ----                   ----               ----      ----
                                                                                                       (unaudited)
                                                                                                        ----------
                                                                                                      (In thousands)

    Interest Income
      Interest and fees on loans                                                                   $23,385                      $23,696                $27,222            $71,427   $84,808
      Interest on securities
        Taxable                                                                                        655                          933                    297              2,246     1,108
        Tax-exempt                                                                                     261                          244                    301                801       931
      Other investments                                                                                432                          382                    367              1,210     1,185
                                                                                                                                                           ---              -----     -----
                                                       Total Interest Income                        24,733                       25,255                 28,187             75,684    88,032
                                                                                                    ------                       ------                 ------             ------    ------
    Interest Expense
      Deposits                                                                                       2,223                        2,305                  3,230              6,952    12,686
      Other borrowings                                                                               1,059                        1,120                  1,183              3,351     3,738
                                                                                                                                                         -----              -----     -----
                                                      Total Interest Expense                         3,282                        3,425                  4,413             10,303    16,424
                                                                                                     -----                        -----                  -----             ------    ------
                                                         Net Interest Income                        21,451                       21,830                 23,774             65,381    71,608
    Provision for loan losses                                                                          251                        1,056                  6,171              6,438    21,029
                                                                                                       ---                        -----                  -----              -----    ------
                         Net Interest Income After Provision for Loan Losses                        21,200                       20,774                 17,603             58,943    50,579
                                                                                                    ------                       ------                 ------             ------    ------
    Non-interest Income
      Service charges on deposit accounts                                                            4,739                        4,552                  4,623             13,492    13,689
      Interchange income                                                                             2,324                        2,407                  2,356              7,053     6,832
      Net gains (losses) on assets
        Mortgage loans                                                                               4,602                        3,579                  2,025             12,041     5,753
        Securities                                                                                     301                          169                    (57)             1,154       271
        Other than temporary impairment loss on securities
          Total impairment loss                                                                        (70)                         (85)                    (4)              (332)     (146)
          Loss recognized in other comprehensive loss                                                    -                            -                      -                  -         -
                                                                                                       ---                          ---                    ---                ---       ---
            Net impairment loss recognized in earnings                                                 (70)                         (85)                    (4)              (332)     (146)
      Mortgage loan servicing                                                                         (364)                      (1,088)                (2,655)              (716)   (1,885)
      Title insurance fees                                                                             482                          489                    299              1,479     1,090
      (Increase) decrease in fair value of U.S. Treasury
       warrant                                                                                         (32)                         (25)                    29               (211)    1,025
      Other                                                                                          2,560                        3,044                  2,639              8,208     7,793
                                                                                                                                                         -----              -----     -----
                                                   Total Non-interest Income                        14,542                       13,042                  9,255             42,168    34,422
                                                                                                    ------                       ------                  -----             ------    ------
    Non-interest Expense
      Compensation and employee benefits                                                            13,610                       13,506                 12,654             39,598    38,032
      Loan and collection                                                                            2,832                        2,407                  2,658              8,129    10,105
      Occupancy, net                                                                                 2,482                        2,490                  2,651              7,688     8,415
      Data processing                                                                                2,492                        2,450                  2,502              7,281     7,227
      Furniture, fixtures and equipment                                                              1,194                        1,307                  1,308              3,795     4,228
      Legal and professional                                                                           952                        1,268                    751              3,117     2,330
      FDIC deposit insurance                                                                           816                          816                    885              2,489     2,772
      Communications                                                                                   785                          826                    863              2,486     2,700
      Net losses on other real estate and repossessed assets                                           291                          633                  1,931              1,911     4,114
      Advertising                                                                                      647                          639                    740              1,842     1,964
      Credit card and bank service fees                                                                433                          624                    869              1,708     2,929
      Vehicle service contract counterparty contingencies                                              281                          326                  1,345              1,078     5,002
      Write-down of property and equipment held for sale                                               860                            -                      -                860         -
      Provision for loss reimbursement on sold loans                                                   193                          126                    251                751     1,020
      Costs (recoveries) related to unfunded lending
       commitments                                                                                    (538)                         (12)                  (172)              (597)       12
      Other                                                                                          1,966                        2,077                  2,226              4,692     6,385
                                                                                                                                                         -----              -----     -----
                                                  Total Non-interest Expense                        29,296                       29,483                 31,462             86,828    97,235
                                                                                                    ------                       ------                 ------             ------    ------
                                             Income (Loss) Before Income Tax                         6,446                        4,333                 (4,604)            14,283   (12,234)
    Income tax benefit                                                                                   -                            -                   (482)                 -      (748)
                                                                                                       ---                          ---                   ----                ---      ----
                                                           Net Income (Loss)                        $6,446                       $4,333                $(4,122)           $14,283  $(11,486)
                                                                                                                                                       =======            =======  ========
                            Preferred stock dividends and discount accretion                         1,093                        1,092                  1,043              3,241     3,102
                                                                                                     -----                        -----                  -----              -----     -----
                                Net Income (Loss) Applicable to Common Stock                        $5,353                       $3,241                $(5,165)           $11,042  $(14,588)
                                                                                                    ======                       ======                =======            =======  ========

INDEPENDENT BANK CORPORATION AND SUBSIDIARIES
Selected Financial Data



                                                                 Three Months Ended              Nine Months Ended
                                                    September 30,             June 30,              September 30,   September 30,
                                                             2012                           2012               2011                  2012  2011
                                                             ----                           ----               ----                  ----  ----
                                                                                             (unaudited)
                                                                                             ----------
    Per Common Share Data
    Net Income (Loss) Per Common Share (A)
      Basic (B)                                                                             $.61                                     $.38            $(.61)      $1.28      $(1.78)
      Diluted (C)                                                                            .16                                      .11             (.61)        .36       (1.78)
    Cash dividends declared per common share                                                 .00                                      .00              .00         .00         .00


    Selected Ratios (D)
    As a Percent of Average Interest-Earning Assets
      Interest income                                                                       4.52%                                    4.65%            5.44%       4.67%       5.45%
      Interest expense                                                                      0.60                                     0.63             0.85        0.64        1.02
      Net interest income                                                                   3.92                                     4.02             4.59        4.03        4.43
    Net Income (Loss) to (A)
      Average common shareholders' equity                                                  62.71%                                   47.96%         (56.07)%      52.38%    (52.57)%
      Average assets                                                                        0.89                                     0.54            (0.89)       0.62       (0.81)


    Average Shares
      Basic (B)                                                                        8,778,899                                8,607,382        8,400,950   8,637,176   8,208,793
      Diluted (C)                                                                     39,674,719                               40,798,694       50,999,510  39,402,803  50,783,918

(A) These amounts are calculated using net income (loss) applicable to common stock. For any period in which net income is recorded, dividends on convertible preferred stock are added back in the diluted per share calculation.

(B) Average shares of common stock for basic net income (loss) per common share include shares issued and outstanding during the period and participating share awards.

(C) Average shares of common stock for diluted net income per common share include shares to be issued upon conversion of convertible preferred stock, shares to be issued upon exercise of common stock warrants, shares to be issued upon exercise of stock options, restricted stock units and stock units for a deferred compensation plan for non-employee directors. For any period in which a loss is recorded, the assumed conversion of convertible preferred stock, assumed exercise of common stock warrants, assumed exercise of stock options, restricted stock units and stock units for a deferred compensation plan for non-employee directors would have an anti-dilutive impact on the loss per share and are thus ignored in the diluted per share calculation.

(D) Ratios have been annualized.

SOURCE Independent Bank Corporation