Independent Bank Corporation (NASDAQ: IBCP) reported second quarter
2024 net income of $18.5 million, or $0.88 per diluted share,
versus net income of $14.8 million, or $0.70 per diluted share, in
the prior-year period.
William B. (“Brad”) Kessel, the President and
Chief Executive Officer of Independent Bank Corporation, commented:
“I am proud of our team and very pleased with our second quarter
2024 results, driving organic growth on both sides of the balance
sheet. Overall loans increased 1.2% (annualized), despite a
higher-than-normal level of commercial payoffs and paydowns, while
core deposits are up 4.8% (annualized). We were able to generate
net interest margin expansion, increasing to 3.40% from 3.30% on a
linked quarter basis and net interest income growth on both a
linked quarter basis and on a year over year quarterly basis. We
believe that our expenses continue to be well managed, and we
continue to see improved operational scale from strategic
investments we have made in recent years. Our credit metrics
continue to be excellent, with watch credits and non-performing
assets near historic lows. These fundamentals drove good growth in
both our earnings per share (26%) and tangible book value per share
(16%) compared to the prior year quarter. Based on a robust
commercial loan pipeline, the past record of our core group of
professionals and the on-going strategic initiative to add talented
bankers to our team, we are optimistic about continuing these
growth trends for the second half of the year and into 2025.”
Significant items impacting comparable second
quarter 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 $0.9 million ($0.03 per diluted share, after
taxes) for the three-month period ended June 30, 2024, as
compared to $2.4 million ($0.09 per diluted share, after taxes) for
the three-months ended June 30, 2023.
- The provision for
credit losses was an expense of $0.02 million ($0.00 per diluted
share, after taxes) in the second quarter ended June 30, 2024,
as compared to an expense of $3.3 million ($0.12 per diluted share,
after taxes) in the second quarter ended June 30, 2023.
- Gain on equity securities at fair
value of $2.7 million ($0.10 per diluted share, after tax) in the
second quarter ended June 30, 2024, attributable to the exchange of
our Visa Class B-1 common stock. No gain or loss on equity
securities at fair value was recorded for the second quarter of
2023.
Operating Results
The Company’s net interest income totaled $41.3
million during the second quarter of 2024, an increase of $3.0
million, or 7.8% from the year-ago period, and an increase of $1.1
million, or 2.9%, from the first quarter of 2024. The Company’s tax
equivalent net interest income as a percent of average
interest-earning assets (the “net interest margin”) was 3.40%
during the second quarter of 2024, compared to 3.24% in the
year-ago period, and 3.30% in the first quarter of 2024. The
year-over-year quarterly increase in net interest income was due to
an increase in average interest-earning assets and the net interest
margin. The increase in net interest income compared to the linked
quarter was due to an increase in the net interest margin that was
partially offset by a decrease in average interest earning assets.
Average interest-earning assets were $4.89 billion in the second
quarter of 2024, compared to $4.76 billion in the year ago quarter
and $4.91 billion in the first quarter of 2024.
Non-interest income totaled $15.2 million for
the second quarter of 2024, compared to $15.4 million in the
comparable prior year period. This change was primarily due to
variances in mortgage banking related revenues and gain on equity
securities at fair value.
Gain on equity securities at fair value totaled
$2.7 million during the second quarter of 2024. This gain is the
consequence of the exchange of our shares of Visa Class B-1 common
stock on May 6, 2024 into a combination of Visa Class C common
stock and Visa Class B-2 common stock. With the completion of this
exchange, we were able to record the fair value of the Visa Class C
common stock through income (as it is convertible into publicly
traded Visa Class A common stock) while the Visa Class B-2 common
stock continues to be carried at zero.
Net gains on mortgage loans in the second
quarters of 2024 and 2023, were approximately $1.3 million and $2.1
million, respectively. The comparative quarterly decrease in net
gains on mortgage loans was primarily due to an decrease in both
gain on sale margin on mortgage loans sold and a decrease in the
volume of mortgage loans sold.
Mortgage loan servicing, net, generated income
of $2.1 million and $3.7 million in the second quarters of 2024 and
2023, respectively. The significant variance in mortgage loan
servicing, net is primarily due to changes in the fair value of
capitalized mortgage loan servicing rights associated with changes
in interest rates and the associated expected future prepayment
levels and expected float rates. Mortgage loan servicing, net
activity is summarized in the following table:
|
Three months ended |
|
Six months ended |
|
6/30/2024 |
|
6/30/2023 |
|
6/30/2024 |
|
6/30/2023 |
|
(In thousands) |
Mortgage loan servicing,
net: |
|
|
|
|
|
|
|
Revenue, net |
$ |
2,214 |
|
|
$ |
2,193 |
|
|
$ |
4,433 |
|
|
$ |
4,415 |
|
Fair value change due to price |
|
911 |
|
|
|
2,443 |
|
|
|
2,176 |
|
|
|
1,808 |
|
Fair value change due to pay-downs |
|
(1,034 |
) |
|
|
(962 |
) |
|
|
(1,793 |
) |
|
|
(1,823 |
) |
Total |
$ |
2,091 |
|
|
$ |
3,674 |
|
|
$ |
4,816 |
|
|
$ |
4,400 |
|
|
Non-interest expenses totaled $33.3 million in
the second quarter of 2024, compared to $32.2 million in the
year-ago period.
The Company recorded income tax expense of $4.6
million in the second quarter of 2024. This compares to an income
tax expense of $3.4 million in the second quarter of 2023. The
changes in income tax expense principally reflect changes in
pre-tax earnings in 2024 relative to 2023.
Asset Quality
A breakdown of non-performing loans by loan type is as
follows:
|
6/30/2024 |
|
12/31/2023 |
|
6/30/2023 |
Loan Type |
(Dollars in thousands) |
Commercial |
$ |
312 |
|
|
$ |
28 |
|
|
$ |
33 |
|
Mortgage |
|
4,819 |
|
|
|
6,425 |
|
|
|
6,149 |
|
Installment |
|
843 |
|
|
|
970 |
|
|
|
694 |
|
Sub total |
|
5,974 |
|
|
|
7,423 |
|
|
|
6,876 |
|
Less - government guaranteed loans |
|
1,489 |
|
|
|
2,191 |
|
|
|
2,882 |
|
Total non-performing loans |
$ |
4,485 |
|
|
$ |
5,232 |
|
|
$ |
3,994 |
|
Ratio of non-performing loans
to total portfolio loans |
|
0.12 |
% |
|
|
0.14 |
% |
|
|
0.11 |
% |
Ratio of non-performing assets
to total assets |
|
0.10 |
% |
|
|
0.11 |
% |
|
|
0.09 |
% |
Ratio of allowance for credit
losses to total non-performing loans |
|
1253.98 |
% |
|
|
1044.69 |
% |
|
|
1351.13 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
The provision for credit losses was an expense
of $0.02 million and $3.32 million in the second quarters of 2024
and 2023, respectively. The quarterly change in the provision for
credit losses in 2024 compared to 2023, is the result of a decrease
in net newly allocated losses in the commercial loan portfolio
primarily driven by a large specific reserve in the prior year as
well as a decrease in loan growth and a decrease in the adjustment
to allocations based on subjective factors. We recorded loan net
charge offs (recoveries) of $0.09 million and $(0.10) million in
the second quarters of 2024 and 2023, respectively. At
June 30, 2024, the allowance for credit losses for loans
totaled $56.2 million, or 1.46% of total portfolio loans compared
to $54.7 million, or 1.44% of total portfolio loans at
December 31, 2023.
Balance Sheet, Capital and
Liquidity
Total assets were $5.28 billion at June 30,
2024, a increase of $13.8 million from December 31,
2023. Loans, excluding loans held for sale, were $3.85 billion
at June 30, 2024, compared to $3.79 billion at
December 31, 2023. Deposits totaled $4.61 billion at
June 30, 2024, a decrease of $8.6 million from
December 31, 2023. This decrease is primarily due to
decreases in non-interest bearing and brokered time deposits that
were partially offset by growth in savings and interest-bearing
checking, reciprocal, and time deposits.
Cash and cash equivalents totaled $214.3 million
at June 30, 2024, versus $169.8 million at December 31,
2023. Securities available for sale (“AFS”) totaled $592.0 million
at June 30, 2024, versus $679.4 million at December 31,
2023.
Total shareholders’ equity was $430.5 million at
June 30, 2024, or 8.16% of total assets compared to $404.4
million or 7.68% at December 31, 2023. Tangible common
equity totaled $400.4 million at June 30, 2024, or $19.16 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.
The Company’s wholly owned subsidiary,
Independent Bank, remains significantly above “well capitalized”
for regulatory purposes with the following ratios:
Regulatory Capital Ratios |
6/30/2024 |
|
12/31/2023 |
|
WellCapitalizedMinimum |
|
|
|
|
|
|
Tier 1 capital to average total assets |
|
9.34 |
% |
|
|
8.80 |
% |
|
|
5.00 |
% |
Tier 1 common equity to
risk-weighted assets |
|
11.70 |
% |
|
|
11.21 |
% |
|
|
6.50 |
% |
Tier 1 capital to
risk-weighted assets |
|
11.70 |
% |
|
|
11.21 |
% |
|
|
8.00 |
% |
Total capital to risk-weighted
assets |
|
12.95 |
% |
|
|
12.46 |
% |
|
|
10.00 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
At June 30, 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 $1.00
billion and $438.5 million, respectively. We also had approximately
$787.4 million in fair value of unpledged securities AFS and HTM at
June 30, 2024 which could be pledged for an estimated
additional borrowing capacity at the FHLB and FRB of approximately
$732.5 million.
Share Repurchase Plan
On December 19, 2023, the Board of Directors of
the Company authorized the 2024 share repurchase plan. Under the
terms of the 2024 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, 2024. The Company did not repurchase any
shares of common stock during the first six months of 2024.
Earnings Conference Call
Brad Kessel, President and CEO, Gavin 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, July 25, 2024.
To participate in the live conference call,
please dial 1-833-470-1428 (Access Code # 459632). 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/697238975.
A playback of the call can be accessed by
dialing 1-866-813-9403 (Access Code # 287261). The replay will
be available through August 1, 2024.
About Independent Bank
Corporation
Independent Bank Corporation (NASDAQ: IBCP) is a
Michigan-based bank holding company with total assets of
approximately $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, consumer banking, 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 StatementsThis
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.
Contact: |
William B. Kessel, President
and CEO, 616.447.3933Gavin A. Mohr, Chief Financial Officer,
616.447.3929 |
INDEPENDENT BANK CORPORATION AND SUBSIDIARIESConsolidated
Statements of Financial Condition |
|
|
June 30, 2024 |
|
December 31, 2023 |
|
(Unaudited) |
|
(In thousands, except shareamounts) |
Assets |
|
|
|
Cash and due from banks |
$ |
54,910 |
|
|
$ |
68,208 |
|
Interest bearing deposits |
|
159,438 |
|
|
|
101,573 |
|
Cash and Cash Equivalents |
|
214,348 |
|
|
|
169,781 |
|
Equity securities at fair
value |
|
872 |
|
|
|
— |
|
Securities available for
sale |
|
591,974 |
|
|
|
679,350 |
|
Securities held to maturity (fair value of $305,654 at
June 30, 2024 and $318,606 at December 31, 2023) |
|
344,220 |
|
|
|
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 |
|
15,935 |
|
|
|
12,063 |
|
Loans |
|
|
|
Commercial |
|
1,732,353 |
|
|
|
1,679,731 |
|
Mortgage |
|
1,501,377 |
|
|
|
1,485,872 |
|
Installment |
|
618,159 |
|
|
|
625,298 |
|
Total Loans |
|
3,851,889 |
|
|
|
3,790,901 |
|
Allowance for credit losses |
|
(56,241 |
) |
|
|
(54,658 |
) |
Net Loans |
|
3,795,648 |
|
|
|
3,736,243 |
|
Other real estate and
repossessed assets, net |
|
945 |
|
|
|
569 |
|
Property and equipment,
net |
|
35,041 |
|
|
|
35,523 |
|
Bank-owned life insurance |
|
53,821 |
|
|
|
54,341 |
|
Capitalized mortgage loan
servicing rights, carried at fair value |
|
44,406 |
|
|
|
42,243 |
|
Other intangibles |
|
1,746 |
|
|
|
2,004 |
|
Goodwill |
|
28,300 |
|
|
|
28,300 |
|
Accrued income and other
assets |
|
134,145 |
|
|
|
132,500 |
|
Total Assets |
$ |
5,277,500 |
|
|
$ |
5,263,726 |
|
Liabilities and Shareholders'
Equity |
|
|
|
Deposits |
|
|
|
Non-interest bearing |
$ |
1,049,625 |
|
|
$ |
1,076,093 |
|
Savings and interest-bearing checking |
|
1,926,065 |
|
|
|
1,905,701 |
|
Reciprocal |
|
925,828 |
|
|
|
832,020 |
|
Time |
|
585,561 |
|
|
|
524,325 |
|
Brokered time |
|
127,249 |
|
|
|
284,740 |
|
Total Deposits |
|
4,614,328 |
|
|
|
4,622,879 |
|
Other borrowings |
|
50,012 |
|
|
|
50,026 |
|
Subordinated debt |
|
39,548 |
|
|
|
39,510 |
|
Subordinated debentures |
|
39,762 |
|
|
|
39,728 |
|
Accrued expenses and other
liabilities |
|
103,391 |
|
|
|
107,134 |
|
Total Liabilities |
|
4,847,041 |
|
|
|
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: 20,899,358 shares at June 30, 2024 and
20,835,633 shares at December 31, 2023 |
|
317,676 |
|
|
|
317,483 |
|
Retained earnings |
|
183,611 |
|
|
|
159,108 |
|
Accumulated other comprehensive loss |
|
(70,828 |
) |
|
|
(72,142 |
) |
Total Shareholders’ Equity |
|
430,459 |
|
|
|
404,449 |
|
Total Liabilities and Shareholders’ Equity |
$ |
5,277,500 |
|
|
$ |
5,263,726 |
|
INDEPENDENT BANK CORPORATION AND SUBSIDIARIESConsolidated
Statements of Operations |
|
|
Three Months Ended |
|
Six Months EndedJune 30, |
|
|
June 30,2024 |
|
|
|
March 31,2024 |
|
|
|
June 30,2024 |
|
|
|
2024 |
|
|
|
2023 |
|
|
(Unaudited) |
Interest Income |
(In thousands, except per share amounts) |
Interest and fees on loans |
$ |
56,786 |
|
|
$ |
55,043 |
|
|
$ |
47,679 |
|
|
$ |
111,829 |
|
|
$ |
91,973 |
|
Interest on securities |
|
|
|
|
|
|
|
|
|
Taxable |
|
4,713 |
|
|
|
5,251 |
|
|
|
5,919 |
|
|
|
9,964 |
|
|
|
11,803 |
|
Tax-exempt |
|
3,400 |
|
|
|
3,391 |
|
|
|
3,283 |
|
|
|
6,791 |
|
|
|
6,366 |
|
Other investments |
|
1,439 |
|
|
|
1,441 |
|
|
|
1,067 |
|
|
|
2,880 |
|
|
|
1,742 |
|
Total Interest Income |
|
66,338 |
|
|
|
65,126 |
|
|
|
57,948 |
|
|
|
131,464 |
|
|
|
111,884 |
|
Interest Expense |
|
|
|
|
|
|
|
|
|
Deposits |
|
22,876 |
|
|
|
22,810 |
|
|
|
17,461 |
|
|
|
45,686 |
|
|
|
31,221 |
|
Other borrowings and subordinated debt and debentures |
|
2,116 |
|
|
|
2,119 |
|
|
|
2,137 |
|
|
|
4,235 |
|
|
|
3,872 |
|
Total Interest Expense |
|
24,992 |
|
|
|
24,929 |
|
|
|
19,598 |
|
|
|
49,921 |
|
|
|
35,093 |
|
Net Interest Income |
|
41,346 |
|
|
|
40,197 |
|
|
|
38,350 |
|
|
|
81,543 |
|
|
|
76,791 |
|
Provision for credit
losses |
|
19 |
|
|
|
744 |
|
|
|
3,317 |
|
|
|
763 |
|
|
|
5,477 |
|
Net Interest Income After Provision for Credit Losses |
|
41,327 |
|
|
|
39,453 |
|
|
|
35,033 |
|
|
|
80,780 |
|
|
|
71,314 |
|
Non-interest Income |
|
|
|
|
|
|
|
|
|
Interchange income |
|
3,401 |
|
|
|
3,151 |
|
|
|
3,355 |
|
|
|
6,552 |
|
|
|
6,560 |
|
Service charges on deposit accounts |
|
2,937 |
|
|
|
2,872 |
|
|
|
3,134 |
|
|
|
5,809 |
|
|
|
5,991 |
|
Net gains (losses) on assets |
|
|
|
|
|
|
|
|
|
Mortgage loans |
|
1,333 |
|
|
|
1,364 |
|
|
|
2,120 |
|
|
|
2,697 |
|
|
|
3,376 |
|
Equity securities at fair value |
|
2,693 |
|
|
|
— |
|
|
|
— |
|
|
|
2,693 |
|
|
|
— |
|
Securities available for sale |
|
— |
|
|
|
(269 |
) |
|
|
— |
|
|
|
(269 |
) |
|
|
(222 |
) |
Mortgage loan servicing, net |
|
2,091 |
|
|
|
2,725 |
|
|
|
3,674 |
|
|
|
4,816 |
|
|
|
4,400 |
|
Other |
|
2,717 |
|
|
|
2,718 |
|
|
|
3,134 |
|
|
|
5,435 |
|
|
|
5,863 |
|
Total Non-interest Income |
|
15,172 |
|
|
|
12,561 |
|
|
|
15,417 |
|
|
|
27,733 |
|
|
|
25,968 |
|
Non-interest Expense |
|
|
|
|
|
|
|
|
|
Compensation and employee benefits |
|
21,251 |
|
|
|
20,770 |
|
|
|
20,602 |
|
|
|
42,021 |
|
|
|
39,941 |
|
Data processing |
|
3,257 |
|
|
|
3,255 |
|
|
|
2,891 |
|
|
|
6,512 |
|
|
|
5,882 |
|
Occupancy, net |
|
1,886 |
|
|
|
2,074 |
|
|
|
1,845 |
|
|
|
3,960 |
|
|
|
4,004 |
|
Interchange expense |
|
1,127 |
|
|
|
1,097 |
|
|
|
1,054 |
|
|
|
2,224 |
|
|
|
2,103 |
|
Furniture, fixtures and equipment |
|
948 |
|
|
|
954 |
|
|
|
929 |
|
|
|
1,902 |
|
|
|
1,855 |
|
FDIC deposit insurance |
|
695 |
|
|
|
782 |
|
|
|
749 |
|
|
|
1,477 |
|
|
|
1,532 |
|
Advertising |
|
788 |
|
|
|
491 |
|
|
|
431 |
|
|
|
1,279 |
|
|
|
926 |
|
Loan and collection |
|
699 |
|
|
|
512 |
|
|
|
620 |
|
|
|
1,211 |
|
|
|
1,198 |
|
Communications |
|
499 |
|
|
|
615 |
|
|
|
635 |
|
|
|
1,114 |
|
|
|
1,303 |
|
Legal and professional |
|
544 |
|
|
|
486 |
|
|
|
473 |
|
|
|
1,030 |
|
|
|
1,080 |
|
Costs (recoveries) related to unfunded lending commitments |
|
(137 |
) |
|
|
(652 |
) |
|
|
100 |
|
|
|
(789 |
) |
|
|
(375 |
) |
Other |
|
1,776 |
|
|
|
1,809 |
|
|
|
1,919 |
|
|
|
3,585 |
|
|
|
3,756 |
|
Total Non-interest Expense |
|
33,333 |
|
|
|
32,193 |
|
|
|
32,248 |
|
|
|
65,526 |
|
|
|
63,205 |
|
Income Before Income Tax |
|
23,166 |
|
|
|
19,821 |
|
|
|
18,202 |
|
|
|
42,987 |
|
|
|
34,077 |
|
Income tax expense |
|
4,638 |
|
|
|
3,830 |
|
|
|
3,412 |
|
|
|
8,468 |
|
|
|
6,296 |
|
Net Income |
$ |
18,528 |
|
|
$ |
15,991 |
|
|
$ |
14,790 |
|
|
$ |
34,519 |
|
|
$ |
27,781 |
|
Net Income Per Common
Share |
|
|
|
|
|
|
|
|
|
Basic |
$ |
0.89 |
|
|
$ |
0.77 |
|
|
$ |
0.70 |
|
|
$ |
1.65 |
|
|
$ |
1.32 |
|
Diluted |
$ |
0.88 |
|
|
$ |
0.76 |
|
|
$ |
0.70 |
|
|
$ |
1.64 |
|
|
$ |
1.31 |
|
INDEPENDENT BANK CORPORATION AND SUBSIDIARIESSelected Financial
Data |
|
|
June 30,2024 |
|
March 31,2024 |
|
December 31,2023 |
|
September 30,2023 |
|
June 30,2023 |
|
(unaudited) |
|
(Dollars in thousands except per share data) |
Three Months
Ended |
|
|
|
|
|
|
|
|
|
Net interest income |
$ |
41,346 |
|
|
$ |
40,197 |
|
|
$ |
40,111 |
|
|
$ |
39,427 |
|
|
$ |
38,350 |
|
Provision for credit losses |
|
19 |
|
|
|
744 |
|
|
|
(617 |
) |
|
|
1,350 |
|
|
|
3,317 |
|
Non-interest income |
|
15,172 |
|
|
|
12,561 |
|
|
|
9,097 |
|
|
|
15,611 |
|
|
|
15,417 |
|
Non-interest expense |
|
33,333 |
|
|
|
32,193 |
|
|
|
31,878 |
|
|
|
32,036 |
|
|
|
32,248 |
|
Income before income tax |
|
23,166 |
|
|
|
19,821 |
|
|
|
17,947 |
|
|
|
21,652 |
|
|
|
18,202 |
|
Income tax expense |
|
4,638 |
|
|
|
3,830 |
|
|
|
4,204 |
|
|
|
4,109 |
|
|
|
3,412 |
|
Net income |
$ |
18,528 |
|
|
$ |
15,991 |
|
|
$ |
13,743 |
|
|
$ |
17,543 |
|
|
$ |
14,790 |
|
|
|
|
|
|
|
|
|
|
|
Basic earnings per share |
$ |
0.89 |
|
|
$ |
0.77 |
|
|
$ |
0.66 |
|
|
$ |
0.84 |
|
|
$ |
0.70 |
|
Diluted earnings per share |
|
0.88 |
|
|
|
0.76 |
|
|
|
0.65 |
|
|
|
0.83 |
|
|
|
0.70 |
|
Cash dividend per share |
|
0.24 |
|
|
|
0.24 |
|
|
|
0.23 |
|
|
|
0.23 |
|
|
|
0.23 |
|
|
|
|
|
|
|
|
|
|
|
Average shares outstanding |
|
20,901,741 |
|
|
|
20,877,067 |
|
|
|
20,840,680 |
|
|
|
20,922,431 |
|
|
|
21,040,349 |
|
Average diluted shares outstanding |
|
21,105,387 |
|
|
|
21,079,607 |
|
|
|
21,049,030 |
|
|
|
21,114,445 |
|
|
|
21,222,535 |
|
|
|
|
|
|
|
|
|
|
|
Performance Ratios |
|
|
|
|
|
|
|
|
|
Return on average assets |
|
1.44 |
% |
|
|
1.24 |
% |
|
|
1.04 |
% |
|
|
1.34 |
% |
|
|
1.18 |
% |
Return on average equity |
|
17.98 |
|
|
|
15.95 |
|
|
|
14.36 |
|
|
|
18.68 |
|
|
|
16.29 |
|
Efficiency ratio (1) |
|
61.49 |
|
|
|
60.26 |
|
|
|
64.27 |
|
|
|
57.52 |
|
|
|
59.26 |
|
|
|
|
|
|
|
|
|
|
|
As a Percent of Average Interest-Earning Assets (1) |
|
|
|
|
|
|
|
|
Interest income |
|
5.45 |
% |
|
|
5.34 |
% |
|
|
5.29 |
% |
|
|
5.10 |
% |
|
|
4.89 |
% |
Interest expense |
|
2.05 |
|
|
|
2.04 |
|
|
|
2.03 |
|
|
|
1.87 |
|
|
|
1.65 |
|
Net interest income |
|
3.40 |
|
|
|
3.30 |
|
|
|
3.26 |
|
|
|
3.23 |
|
|
|
3.24 |
|
|
|
|
|
|
|
|
|
|
|
Average Balances |
|
|
|
|
|
|
|
|
|
Loans |
$ |
3,849,199 |
|
|
$ |
3,810,526 |
|
|
$ |
3,764,752 |
|
|
$ |
3,694,534 |
|
|
$ |
3,567,920 |
|
Securities |
|
944,435 |
|
|
|
999,140 |
|
|
|
1,027,240 |
|
|
|
1,071,211 |
|
|
|
1,111,670 |
|
Total earning assets |
|
4,893,367 |
|
|
|
4,910,669 |
|
|
|
4,928,697 |
|
|
|
4,892,208 |
|
|
|
4,763,295 |
|
Total assets |
|
5,181,317 |
|
|
|
5,201,452 |
|
|
|
5,233,666 |
|
|
|
5,192,114 |
|
|
|
5,044,746 |
|
Deposits |
|
4,531,917 |
|
|
|
4,561,645 |
|
|
|
4,612,797 |
|
|
|
4,577,796 |
|
|
|
4,447,843 |
|
Interest bearing liabilities |
|
3,611,972 |
|
|
|
3,627,446 |
|
|
|
3,635,771 |
|
|
|
3,554,179 |
|
|
|
3,415,621 |
|
Shareholders' equity |
|
414,549 |
|
|
|
403,225 |
|
|
|
379,614 |
|
|
|
372,667 |
|
|
|
364,143 |
|
(1) Presented on a fully tax equivalent basis assuming a
marginal tax rate of 21%.
INDEPENDENT BANK CORPORATION AND SUBSIDIARIESSelected Financial
Data (continued) |
|
|
June 30,2024 |
|
March 31,2024 |
|
December 31,2023 |
|
September 30,2023 |
|
June 30,2023 |
|
(unaudited) |
|
(Dollars in thousands except per share data) |
End of
Period |
|
|
|
|
|
|
|
|
|
Capital |
|
|
|
|
|
|
|
|
|
Tangible common equity ratio |
|
7.63 |
% |
|
|
7.41 |
% |
|
|
7.15 |
% |
|
|
6.67 |
% |
|
|
6.75 |
% |
Tangible common equity ratio excluding accumulated other
comprehensive loss |
|
8.76 |
|
|
|
8.57 |
|
|
|
8.31 |
|
|
|
8.20 |
|
|
|
8.09 |
|
Average equity to average assets |
|
8.00 |
|
|
|
7.75 |
|
|
|
7.25 |
|
|
|
7.18 |
|
|
|
7.22 |
|
Total capital to risk-weighted assets (2) |
|
14.21 |
|
|
|
13.85 |
|
|
|
13.71 |
|
|
|
13.58 |
|
|
|
13.66 |
|
Tier 1 capital to risk-weighted assets (2) |
|
12.01 |
|
|
|
11.65 |
|
|
|
11.50 |
|
|
|
11.37 |
|
|
|
11.42 |
|
Common equity tier 1 capital to risk-weighted assets (2) |
|
11.09 |
|
|
|
10.73 |
|
|
|
10.58 |
|
|
|
10.44 |
|
|
|
10.46 |
|
Tier 1 capital to average assets (2) |
|
9.59 |
|
|
|
9.29 |
|
|
|
9.03 |
|
|
|
8.94 |
|
|
|
8.97 |
|
Common shareholders' equity per share of common stock |
$ |
20.60 |
|
|
$ |
19.88 |
|
|
$ |
19.41 |
|
|
$ |
17.99 |
|
|
$ |
17.91 |
|
Tangible common equity per share of common stock |
|
19.16 |
|
|
|
18.44 |
|
|
|
17.96 |
|
|
|
16.53 |
|
|
|
16.45 |
|
Total shares outstanding |
|
20,899,358 |
|
|
|
20,903,677 |
|
|
|
20,835,633 |
|
|
|
20,850,455 |
|
|
|
20,943,694 |
|
|
|
|
|
|
|
|
|
|
|
Selected Balances |
|
|
|
|
|
|
|
|
|
Loans |
$ |
3,851,889 |
|
|
$ |
3,839,965 |
|
|
$ |
3,790,901 |
|
|
$ |
3,741,486 |
|
|
$ |
3,631,114 |
|
Securities |
|
936,194 |
|
|
|
963,577 |
|
|
|
1,033,338 |
|
|
|
1,043,540 |
|
|
|
1,092,703 |
|
Total earning assets |
|
4,979,555 |
|
|
|
4,949,496 |
|
|
|
4,954,696 |
|
|
|
4,884,720 |
|
|
|
4,830,185 |
|
Total assets |
|
5,277,500 |
|
|
|
5,231,255 |
|
|
|
5,263,726 |
|
|
|
5,200,018 |
|
|
|
5,135,564 |
|
Deposits |
|
4,614,328 |
|
|
|
4,582,414 |
|
|
|
4,622,879 |
|
|
|
4,585,612 |
|
|
|
4,487,636 |
|
Interest bearing liabilities |
|
3,694,025 |
|
|
|
3,677,060 |
|
|
|
3,676,050 |
|
|
|
3,573,187 |
|
|
|
3,501,280 |
|
Shareholders' equity |
|
430,459 |
|
|
|
415,570 |
|
|
|
404,449 |
|
|
|
374,998 |
|
|
|
375,162 |
|
(2) June 30, 2024 are Preliminary.
Reconciliation of Non-GAAP Financial
MeasuresIndependent 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 June 30, |
|
Six Months Ended June 30, |
|
|
2024 |
|
|
|
2023 |
|
|
|
2024 |
|
|
|
2023 |
|
|
(Dollars in thousands) |
Net Interest Margin,
Fully Taxable Equivalent ("FTE") |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net interest income |
$ |
41,346 |
|
|
$ |
38,350 |
|
|
$ |
81,543 |
|
|
$ |
76,791 |
|
Add: taxable equivalent adjustment |
|
175 |
|
|
|
232 |
|
|
|
355 |
|
|
|
520 |
|
Net interest income - taxable
equivalent |
$ |
41,521 |
|
|
$ |
38,582 |
|
|
$ |
81,898 |
|
|
$ |
77,311 |
|
Net interest margin
(GAAP) (1) |
|
3.39 |
% |
|
|
3.23 |
% |
|
|
3.33 |
% |
|
|
3.26 |
% |
Net interest margin
(FTE) (1) |
|
3.40 |
% |
|
|
3.24 |
% |
|
|
3.35 |
% |
|
|
3.28 |
% |
(1) Annualized.
Tangible Common Equity Ratio
|
June 30,2024 |
|
March 31, 2024 |
|
December 31, 2023 |
|
September 30, 2023 |
|
June 30, 2023 |
|
(Dollars in thousands) |
Common shareholders' equity |
$ |
430,459 |
|
|
$ |
415,570 |
|
|
$ |
404,449 |
|
|
$ |
374,998 |
|
|
$ |
375,162 |
|
Less: |
|
|
|
|
|
|
|
|
|
Goodwill |
|
28,300 |
|
|
|
28,300 |
|
|
|
28,300 |
|
|
|
28,300 |
|
|
|
28,300 |
|
Other intangibles |
|
1,746 |
|
|
|
1,875 |
|
|
|
2,004 |
|
|
|
2,141 |
|
|
|
2,278 |
|
Tangible common equity |
|
400,413 |
|
|
|
385,395 |
|
|
|
374,145 |
|
|
|
344,557 |
|
|
|
344,584 |
|
Addition: |
|
|
|
|
|
|
|
|
|
Accumulated other comprehensive loss for regulatory purposes |
|
65,030 |
|
|
|
65,831 |
|
|
|
66,344 |
|
|
|
86,507 |
|
|
|
74,712 |
|
Tangible common equity
excluding other comprehensive loss adjustments |
$ |
465,443 |
|
|
$ |
451,226 |
|
|
$ |
440,489 |
|
|
$ |
431,064 |
|
|
$ |
419,296 |
|
|
|
|
|
|
|
|
|
|
|
Total assets |
$ |
5,277,500 |
|
|
$ |
5,231,255 |
|
|
$ |
5,263,726 |
|
|
$ |
5,200,018 |
|
|
$ |
5,135,564 |
|
Less: |
|
|
|
|
|
|
|
|
|
Goodwill |
|
28,300 |
|
|
|
28,300 |
|
|
|
28,300 |
|
|
|
28,300 |
|
|
|
28,300 |
|
Other intangibles |
|
1,746 |
|
|
|
1,875 |
|
|
|
2,004 |
|
|
|
2,141 |
|
|
|
2,278 |
|
Tangible assets |
|
5,247,454 |
|
|
|
5,201,080 |
|
|
|
5,233,422 |
|
|
|
5,169,577 |
|
|
|
5,104,986 |
|
Addition: |
|
|
|
|
|
|
|
|
|
Net unrealized losses on available for sale securities and
derivatives, net of tax |
|
65,030 |
|
|
|
65,831 |
|
|
|
66,344 |
|
|
|
86,507 |
|
|
|
74,712 |
|
Tangible assets excluding
other comprehensive loss adjustments |
$ |
5,312,484 |
|
|
$ |
5,266,911 |
|
|
$ |
5,299,766 |
|
|
$ |
5,256,084 |
|
|
$ |
5,179,698 |
|
|
|
|
|
|
|
|
|
|
|
Common equity ratio |
|
8.16 |
% |
|
|
7.94 |
% |
|
|
7.68 |
% |
|
|
7.21 |
% |
|
|
7.31 |
% |
Tangible common equity
ratio |
|
7.63 |
% |
|
|
7.41 |
% |
|
|
7.15 |
% |
|
|
6.67 |
% |
|
|
6.75 |
% |
Tangible common equity ratio
excluding other comprehensive loss |
|
8.76 |
% |
|
|
8.57 |
% |
|
|
8.31 |
% |
|
|
8.20 |
% |
|
|
8.09 |
% |
|
|
|
|
|
|
|
|
|
|
Tangible
Common Equity per Share of Common Stock: |
|
|
|
|
|
|
|
|
|
|
Common shareholders'
equity |
$ |
430,459 |
|
|
$ |
415,570 |
|
|
$ |
404,449 |
|
|
$ |
374,998 |
|
|
$ |
375,162 |
|
Tangible common equity |
$ |
400,413 |
|
|
$ |
385,395 |
|
|
$ |
374,145 |
|
|
$ |
344,557 |
|
|
$ |
344,584 |
|
Shares of common stock
outstanding (in thousands) |
|
20,899 |
|
|
|
20,904 |
|
|
|
20,836 |
|
|
|
20,850 |
|
|
|
20,944 |
|
|
|
|
|
|
|
|
|
|
|
Common shareholders' equity
per share of common stock |
$ |
20.60 |
|
|
$ |
19.88 |
|
|
$ |
19.41 |
|
|
$ |
17.99 |
|
|
$ |
17.91 |
|
Tangible common equity per
share of common stock |
$ |
19.16 |
|
|
$ |
18.44 |
|
|
$ |
17.96 |
|
|
$ |
16.53 |
|
|
$ |
16.45 |
|
|
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.
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