Independent Bank Corporation (NASDAQ: IBCP) reported second quarter
2023 net income of $14.8 million, or $0.70 per diluted share,
versus net income of $13.0 million, or $0.61 per diluted share, in
the prior-year period. For the six months ended June 30, 2023,
the Company reported net income of $27.8 million, or $1.31 per
diluted share, compared to net income of $31.0 million, or $1.45
per diluted share, in the prior year period.
William B. (“Brad”) Kessel, the President and
Chief Executive Officer of Independent Bank Corporation, commented:
“We delivered another quarter of strong financial results with net
income and pre-tax, pre-provision income both increasing from the
prior quarter. We continue to see good stability in our deposit
base and have successfully grown our client base and brought in
new, full banking relationships. Economic conditions remain healthy
throughout our markets and we continue to see attractive lending
opportunities, which led to our total loans increasing at a 14%
annualized rate in the second quarter. We have a solid pipeline of
high quality commercial lending opportunities, and we believe that
we can continue to grow our client base and deliver strong
financial performance for our shareholders.”
Significant items impacting comparable second
quarter 2023 and 2022 results include the following:
- Changes in the fair value due to price of capitalized mortgage
loan servicing rights (the “MSR Changes”) of $2.4 million
($0.09 per diluted share, after taxes) for the three-month period
ended June 30, 2023, as compared to $3.1 million ($0.12 per
diluted share, after taxes) for the three-months ended
June 30, 2022.
- The provision for credit losses on loans was an expense of $3.3
million ($0.12 per diluted share, after taxes) in the second
quarter ended June 30, 2023, as compared to an expense of $2.4
million ($0.09 per diluted share, after taxes) in the second
quarter ended June 30, 2022.
Operating Results
The Company’s net interest income totaled $38.4
million during the second quarter of 2023, an increase of $2.3
million, or 6.3% from the year-ago period, and down $0.1 million,
or 0.2%, from the first quarter of 2023. The Company’s tax
equivalent net interest income as a percent of average
interest-earning assets (the “net interest margin”) was 3.26%
during the second quarter of 2023, compared to 3.26% in the
year-ago period, and 3.33% in the first quarter of 2023. The
year-over-year quarterly increase in net interest income was due to
an increase in average interest-earning assets. The decrease in net
interest income compared to the linked quarter was due to a
decrease in net interest margin that was partially offset by an
increase in average interest-earning assets. Average
interest-earning assets were $4.76 billion in the second quarter of
2023, compared to $4.49 billion in the year ago quarter and $4.70
billion in the first quarter of 2023.
For the first six months of 2023, net interest
income totaled $76.8 million, an an increase of $7.7 million, or
11.2% from the first six months in 2022. The Company’s net interest
margin for the first six months of 2023 was 3.29% compared to 3.13%
in 2022. The increase in net interest income for the first six
months of 2023 compared to 2022 reflects this improved margin as
well as our increase in average interest- earning assets.
Non-interest income totaled $15.4 million and
$26.0 million, respectively, for the second quarter and for the
first six months 2023, compared to $14.6 million and $33.6 million
in the respective comparable prior year periods. These changes were
primarily due to variances in mortgage banking related revenues and
a loss on securities available for sale.
Net gains on mortgage loans in the second
quarters of 2023 and 2022, were approximately $2.1 million and $1.3
million, respectively. For the first six months of 2023, net gains
on mortgage loans totaled $3.4 million compared to $2.1 million in
2022. The increase in net gains on mortgage loans was primarily due
to a increase in the gain on sale margin on mortgage loan sold that
was partially offset by a decrease in the volume of mortgage loans
sold.
Mortgage loan servicing, net, generated income
of $3.7 million and $4.2 million in the second quarters of 2023 and
2022, respectively. For the first six months of 2023 and 2022,
mortgage loan servicing, net, generated income of $4.4 million and
$13.8 million, 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 the
magnitude of changes in mortgage loan interest rates and expected
future prepayment levels between periods. Mortgage loan servicing,
net activity is summarized in the following table:
|
Three months
ended |
|
Six months
ended |
|
6/30/2023 |
|
6/30/2022 |
|
6/30/2023 |
|
6/30/2022 |
|
(In thousands) |
Mortgage
loan servicing, net: |
|
|
|
|
|
|
|
Revenue, net |
$ |
2,193 |
|
|
$ |
2,124 |
|
|
$ |
4,415 |
|
|
$ |
4,207 |
|
Fair value change due to price |
|
2,443 |
|
|
|
3,120 |
|
|
|
1,808 |
|
|
|
11,572 |
|
Fair value change due to pay-downs |
|
(962 |
) |
|
|
(1,082 |
) |
|
|
(1,823 |
) |
|
|
(1,976 |
) |
Total |
$ |
3,674 |
|
|
$ |
4,162 |
|
|
$ |
4,400 |
|
|
$ |
13,803 |
|
Non-interest expenses totaled $32.2 million in
the second quarter of 2023, compared to $32.4 million in the
year-ago period. For the first six months of 2023, non-interest
expenses totaled $63.2 million versus $63.9 million in 2022.
The Company recorded income tax expense of $3.4
million and $6.3 million in the second quarter and first six months
of 2023, respectively. This compares to an income tax expense of
$2.9 million and $7.0 million in the second quarter and first six
months of 2022. The changes in income tax expense principally
reflect changes in pre-tax earnings in 2023 relative to 2022.
Asset Quality
A breakdown of non-performing loans by loan
type is as follows:
|
6/30/2023 |
|
12/31/2022 |
|
6/30/2022 |
Loan
Type |
(Dollars in
thousands) |
Commercial |
$ |
33 |
|
|
$ |
38 |
|
|
$ |
56 |
|
Mortgage |
|
6,149 |
|
|
|
4,745 |
|
|
|
5,074 |
|
Installment |
|
694 |
|
|
|
598 |
|
|
|
729 |
|
Sub total |
|
6,876 |
|
|
|
5,381 |
|
|
|
5,859 |
|
Less - government guaranteed loans |
|
2,882 |
|
|
|
1,660 |
|
|
|
1,360 |
|
Total non-performing loans |
$ |
3,994 |
|
|
$ |
3,721 |
|
|
$ |
4,499 |
|
Ratio of
non-performing loans to total portfolio loans |
|
0.11 |
% |
|
|
0.11 |
% |
|
|
0.14 |
% |
Ratio of
non-performing assets to total assets |
|
0.09 |
% |
|
|
0.08 |
% |
|
|
0.10 |
% |
Ratio of
allowance for credit losses to total non-performing loans |
|
1351.13 |
% |
|
|
1409.16 |
% |
|
|
1064.30 |
% |
The provision for credit losses on loans was an
expense of $3.3 million and $2.2 million in the second quarters of
2023 and 2022, respectively. The provision for credit losses on
loans was an expense of $2.5 million and an expense of $0.6 million
in the first six months of 2023 and 2022, respectively. The
quarterly change in the provision for credit losses on loans in
2023 compared to 2022, was primarily the result of a an increase in
specific reserve on one commercial credit as well as increases in
the pooled loan reserve and subjective loan allocations due
primarily to loan growth. The year-to-date increase in the
provision for credit losses in 2023 compared to 2022, was primarily
the result of a combination of increases in net commercial specific
allocations, pooled loan reserve and subjective loan allocations
due to loan growth We recorded loan net charge offs (recoveries) of
$(0.10) million and $(0.04) million in the second quarters of 2023
and 2022, respectively and $0.96 million and $0.02 million during
the first six months of 2023 and 2022, respectively. At
June 30, 2023, the allowance for credit losses for loans
totaled $54.0 million, or 1.49% of total portfolio loans compared
to $52.4 million, or 1.51% of total portfolio loans at
December 31, 2022. The year-to-date increase in the provision
for credit losses for securities HTM in 2023 compared to 2022, was
the result of a loss incurred on a $3.0 million subordinated debt
security that defaulted during the first quarter.
Balance Sheet, Capital and
Liquidity
Total assets were $5.14 billion at June 30,
2023, an increase of $135.8 million from December 31,
2022. Loans, excluding loans held for sale, were $3.63 billion
at June 30, 2023, compared to $3.47 billion at
December 31, 2022. Deposits totaled $4.49 billion at
June 30, 2023, an increase of $108.6 million from
December 31, 2022. This increase is primarily due to
growth in reciprocal, time and brokered time deposit account
balances that were partially offset by decreases in non-interest
bearing and in savings and interest-bearing checking deposit
account balances.
Cash and cash equivalents totaled $129.2 million
at June 30, 2023, versus $74.4 million at December 31,
2022. Securities available for sale (“AFS”) totaled $731.8 million
at June 30, 2023, versus $779.3 million at December 31,
2022.
Total shareholders’ equity was $375.2 million at
June 30, 2023, or 7.31% of total assets compared to $347.6
million or 6.95% at December 31, 2022. Tangible common
equity totaled $344.6 million at June 30, 2023, or $16.45 per
share compared to $316.7 million or $15.04 per share at
December 31, 2022. The increase in shareholder equity as well
as tangible common equity are primarily the result of earnings
retention and a decrease in accumulated other comprehensive loss
related to unrealized losses on securities available for sale.
The Company’s wholly owned subsidiary,
Independent Bank, remains significantly above “well capitalized”
for regulatory purposes with the following ratios:
Regulatory Capital Ratios |
6/30/2023 |
|
12/31/2022 |
|
Well Capitalized Minimum |
|
|
|
|
|
|
Tier 1
capital to average total assets |
8.72 |
% |
|
8.56 |
% |
|
5.00 |
% |
Tier 1
common equity to risk-weighted assets |
11.11 |
% |
|
10.97 |
% |
|
6.50 |
% |
Tier 1
capital to risk-weighted assets |
11.11 |
% |
|
10.97 |
% |
|
8.00 |
% |
Total
capital to risk-weighted assets |
12.36 |
% |
|
12.22 |
% |
|
10.00 |
% |
At June 30, 2023, 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 $926.9 million and $476.5 million, respectively. We
also had approximately $866.9 million in fair value of unpledged
securities AFS and HTM at June 30, 2023 which could be pledged
for an estimated additional borrowing capacity at the FHLB and FRB
of approximately $800.1 million.
Share Repurchase Plan
On December 20, 2022, the Board of Directors of
the Company authorized the 2023 share repurchase plan. Under the
terms of the 2023 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, 2023. During the second quarter of 2023, the
Company repurchased 200,000 shares of common stock, for an
aggregate purchase price of $3.3 million.
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 Tuesday, July 25, 2023.
To participate in the live conference call,
please dial 1-833-470-1428 (Access Code # 245095). 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/289851319.
A playback of the call can be accessed by
dialing 1-866-813-9403 (Access Code # 212125). The replay will
be available through August 1, 2023.
About Independent Bank
Corporation
Independent Bank Corporation (NASDAQ: IBCP) is a
Michigan-based bank holding company with total assets of
approximately $5.1 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 Statements This
presentation contains forward-looking statements, which are any
statements or information that are not historical facts. These
forward-looking statements include statements about our anticipated
future revenue and expenses and our future plans and prospects.
Forward-looking statements involve inherent
risks and uncertainties, and important factors could cause actual
results to differ materially from those anticipated. For example,
deterioration in general business and economic conditions or
turbulence in domestic or global financial markets could adversely
affect our revenues and the values of our assets and liabilities,
reduce the availability of funding to us, lead to a tightening of
credit, and increase stock price volatility. Our results could also
be adversely affected by changes in interest rates; increases in
unemployment rates; deterioration in the credit quality of our loan
portfolios or in the value of the collateral securing those loans;
deterioration in the value of our investment securities; legal and
regulatory developments; changes in customer behavior and
preferences; breaches in data security; and management’s ability to
effectively manage the multitude of risks facing our business. Key
risk factors that could affect our future results are described in
more detail in our Annual Report on Form 10-K for the year ended
December 31, 2022 and the other reports we file with the SEC,
including under the heading “Risk Factors.” Investors should not
place undue reliance on forward-looking statements as a prediction
of our future results.
Any forward-looking statement speaks only as of
the date on which it is made, and we undertake no obligation to
update any forward-looking statement, whether as a result of new
information, future events, or otherwise.
INDEPENDENT BANK CORPORATION AND SUBSIDIARIES Consolidated
Statements of Financial Condition |
|
|
|
|
|
|
|
|
|
June 30, 2023 |
|
|
December 31, 2022 |
|
|
(Unaudited) |
|
|
(In thousands, except shareamounts) |
Assets |
|
|
|
|
|
Cash and due from banks |
$ |
61,225 |
|
$ |
70,180 |
Interest bearing deposits |
|
67,967 |
|
|
4,191 |
Cash and Cash Equivalents |
|
129,192 |
|
|
74,371 |
Securities available for
sale |
|
731,777 |
|
|
779,347 |
Securities held to maturity
(fair value of $321,860 at June 30, 2023 and $335,418 at
December 31, 2022) |
|
360,926 |
|
|
374,818 |
Federal Home Loan Bank and
Federal Reserve Bank stock, at cost |
|
18,131 |
|
|
17,653 |
Loans held for sale, carried
at fair value |
|
20,270 |
|
|
26,518 |
Loans held for sale, carried
at lower of cost or fair value |
|
— |
|
|
20,367 |
Loans |
|
|
|
|
|
Commercial |
|
1,538,162 |
|
|
1,466,853 |
Mortgage |
|
1,441,398 |
|
|
1,368,409 |
Installment |
|
651,554 |
|
|
630,090 |
Total Loans |
|
3,631,114 |
|
|
3,465,352 |
Allowance for credit losses |
|
(53,964) |
|
|
(52,435) |
Net Loans |
|
3,577,150 |
|
|
3,412,917 |
Other real estate and
repossessed assets, net |
|
658 |
|
|
455 |
Property and equipment,
net |
|
36,157 |
|
|
35,893 |
Bank-owned life insurance |
|
54,507 |
|
|
55,204 |
Capitalized mortgage loan
servicing rights, carried at fair value |
|
44,427 |
|
|
42,489 |
Other intangibles |
|
2,278 |
|
|
2,551 |
Goodwill |
|
28,300 |
|
|
28,300 |
Accrued income and other
assets |
|
131,791 |
|
|
128,904 |
Total Assets |
$ |
5,135,564 |
|
$ |
4,999,787 |
|
|
|
|
|
|
Liabilities and Shareholders'
Equity |
|
|
|
|
|
Deposits |
|
|
|
|
|
Non-interest bearing |
$ |
1,155,537 |
|
$ |
1,269,759 |
Savings and interest-bearing checking |
|
1,929,021 |
|
|
1,973,308 |
Reciprocal |
|
720,985 |
|
|
602,575 |
Time |
|
431,249 |
|
|
321,492 |
Brokered time |
|
250,844 |
|
|
211,935 |
Total Deposits |
|
4,487,636 |
|
|
4,379,069 |
Other borrowings |
|
90,015 |
|
|
86,006 |
Subordinated debt |
|
39,472 |
|
|
39,433 |
Subordinated debentures |
|
39,694 |
|
|
39,660 |
Accrued expenses and other
liabilities |
|
103,585 |
|
|
108,023 |
Total Liabilities |
|
4,760,402 |
|
|
4,652,191 |
|
|
|
|
|
|
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: 20,943,694 shares at June 30, 2023 and
21,063,971 shares at December 31, 2022 |
|
318,241 |
|
|
320,991 |
Retained earnings |
|
137,431 |
|
|
119,368 |
Accumulated other comprehensive loss |
|
(80,510) |
|
|
(92,763) |
Total Shareholders’ Equity |
|
375,162 |
|
|
347,596 |
Total Liabilities and Shareholders’ Equity |
$ |
5,135,564 |
|
$ |
4,999,787 |
INDEPENDENT BANK CORPORATION AND SUBSIDIARIES Consolidated
Statements of Operations |
|
|
|
|
|
|
|
Three Months Ended |
|
Six Months
Ended |
|
|
June 30, 2023 |
|
|
March 31, 2023 |
|
|
June 30, 2022 |
|
June 30, |
|
|
|
|
|
|
|
|
2023 |
|
|
2022 |
|
|
(Unaudited) |
Interest Income |
|
(In thousands, except per share amounts) |
Interest and fees on loans |
$ |
47,679 |
|
$ |
44,294 |
|
$ |
31,454 |
|
$ |
91,973 |
|
$ |
59,872 |
Interest on securities |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Taxable |
|
5,919 |
|
|
5,884 |
|
|
4,950 |
|
|
11,803 |
|
|
9,502 |
Tax-exempt |
|
3,283 |
|
|
3,083 |
|
|
1,746 |
|
|
6,366 |
|
|
3,300 |
Other investments |
|
1,067 |
|
|
675 |
|
|
214 |
|
|
1,742 |
|
|
431 |
Total Interest Income |
|
57,948 |
|
|
53,936 |
|
|
38,364 |
|
|
111,884 |
|
|
73,105 |
Interest Expense |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Deposits |
|
17,461 |
|
|
13,760 |
|
|
1,216 |
|
|
31,221 |
|
|
1,983 |
Other borrowings and subordinated debt and debentures |
|
2,137 |
|
|
1,735 |
|
|
1,087 |
|
|
3,872 |
|
|
2,060 |
Total Interest Expense |
|
19,598 |
|
|
15,495 |
|
|
2,303 |
|
|
35,093 |
|
|
4,043 |
Net Interest Income |
|
38,350 |
|
|
38,441 |
|
|
36,061 |
|
|
76,791 |
|
|
69,062 |
Provision for credit
losses |
|
3,317 |
|
|
2,160 |
|
|
2,379 |
|
|
5,477 |
|
|
806 |
Net Interest Income After Provision for Credit Losses |
|
35,033 |
|
|
36,281 |
|
|
33,682 |
|
|
71,314 |
|
|
68,256 |
Non-interest Income |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interchange income |
|
3,355 |
|
|
3,205 |
|
|
3,422 |
|
|
6,560 |
|
|
6,504 |
Service charges on deposit accounts |
|
3,134 |
|
|
2,857 |
|
|
3,096 |
|
|
5,991 |
|
|
6,053 |
Net gains (losses) on assets |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Mortgage loans |
|
2,120 |
|
|
1,256 |
|
|
1,253 |
|
|
3,376 |
|
|
2,088 |
Securities available for sale |
|
— |
|
|
(222) |
|
|
(345) |
|
|
(222) |
|
|
(275) |
Mortgage loan servicing, net |
|
3,674 |
|
|
726 |
|
|
4,162 |
|
|
4,400 |
|
|
13,803 |
Other |
|
3,134 |
|
|
2,729 |
|
|
3,044 |
|
|
5,863 |
|
|
5,407 |
Total Non-interest Income |
|
15,417 |
|
|
10,551 |
|
|
14,632 |
|
|
25,968 |
|
|
33,580 |
Non-interest Expense |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Compensation and employee benefits |
|
20,602 |
|
|
19,339 |
|
|
19,882 |
|
|
39,941 |
|
|
40,012 |
Data processing |
|
2,891 |
|
|
2,991 |
|
|
2,644 |
|
|
5,882 |
|
|
4,860 |
Occupancy, net |
|
1,845 |
|
|
2,159 |
|
|
2,077 |
|
|
4,004 |
|
|
4,620 |
Interchange expense |
|
1,054 |
|
|
1,049 |
|
|
1,262 |
|
|
2,103 |
|
|
2,273 |
Furniture, fixtures and equipment |
|
929 |
|
|
926 |
|
|
1,042 |
|
|
1,855 |
|
|
2,087 |
FDIC deposit insurance |
|
749 |
|
|
783 |
|
|
457 |
|
|
1,532 |
|
|
979 |
Loan and collection |
|
620 |
|
|
578 |
|
|
647 |
|
|
1,198 |
|
|
1,206 |
Legal and professional |
|
473 |
|
|
607 |
|
|
479 |
|
|
1,080 |
|
|
972 |
Advertising |
|
431 |
|
|
495 |
|
|
560 |
|
|
926 |
|
|
1,240 |
Costs (recoveries) related to unfunded lending commitments |
|
100 |
|
|
(475) |
|
|
649 |
|
|
(375) |
|
|
294 |
Communications |
|
635 |
|
|
668 |
|
|
762 |
|
|
1,303 |
|
|
1,519 |
Other |
|
1,919 |
|
|
1,837 |
|
|
1,973 |
|
|
3,756 |
|
|
3,822 |
Total Non-interest Expense |
|
32,248 |
|
|
30,957 |
|
|
32,434 |
|
|
63,205 |
|
|
63,884 |
Income Before Income Tax |
|
18,202 |
|
|
15,875 |
|
|
15,880 |
|
|
34,077 |
|
|
37,952 |
Income tax expense |
|
3,412 |
|
|
2,884 |
|
|
2,879 |
|
|
6,296 |
|
|
6,984 |
Net Income |
$ |
14,790 |
|
$ |
12,991 |
|
$ |
13,001 |
|
$ |
27,781 |
|
$ |
30,968 |
Net Income Per Common
Share |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic |
$ |
0.70 |
|
|
0.62 |
|
$ |
0.62 |
|
$ |
1.32 |
|
$ |
1.47 |
Diluted |
$ |
0.70 |
|
|
0.61 |
|
$ |
0.61 |
|
$ |
1.31 |
|
$ |
1.45 |
INDEPENDENT BANK CORPORATION AND SUBSIDIARIES Selected Financial
Data |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
June 30, 2023 |
|
|
March 31, 2023 |
|
|
December 31, 2022 |
|
|
September 30, 2022 |
|
|
June 30, 2022 |
|
(unaudited) |
|
(Dollars in thousands except per share data) |
Three
Months Ended |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net interest income |
$ |
$38,350 |
|
$ |
$38,441 |
|
$ |
40,602 |
|
$ |
39,897 |
|
$ |
36,061 |
Provision for credit losses |
|
3,317 |
|
|
2,160 |
|
|
1,390 |
|
|
3,145 |
|
|
2,379 |
Non-interest income |
|
15,417 |
|
|
10,551 |
|
|
11,468 |
|
|
16,861 |
|
|
14,632 |
Non-interest expense |
|
32,248 |
|
|
30,957 |
|
|
32,091 |
|
|
32,366 |
|
|
32,434 |
Income before income tax |
|
18,202 |
|
|
15,875 |
|
|
18,589 |
|
|
21,247 |
|
|
15,880 |
Income tax expense |
|
3,412 |
|
|
2,884 |
|
|
3,503 |
|
|
3,950 |
|
|
2,879 |
Net income |
$ |
14,790 |
|
$ |
12,991 |
|
$ |
15,086 |
|
$ |
17,297 |
|
$ |
13,001 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic earnings per share |
$ |
0.70 |
|
$ |
0.62 |
|
$ |
0.72 |
|
$ |
0.82 |
|
$ |
0.62 |
Diluted earnings per share |
|
0.70 |
|
|
0.61 |
|
|
0.71 |
|
|
0.81 |
|
|
0.61 |
Cash dividend per share |
|
0.23 |
|
|
0.23 |
|
|
0.22 |
|
|
0.22 |
|
|
0.22 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Average shares outstanding |
|
21,040,349 |
|
|
21,103,831 |
|
|
21,064,556 |
|
|
21,057,673 |
|
|
21,070,266 |
Average diluted shares outstanding |
|
21,222,535 |
|
|
21,296,980 |
|
|
21,266,876 |
|
|
21,251,933 |
|
|
21,266,476 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Performance Ratios |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Return on average assets |
|
1.18 % |
|
|
1.06 % |
|
|
1.21 % |
|
|
1.40 % |
|
|
1.10 % |
Return on average equity |
|
16.29 |
|
|
14.77 |
|
|
17.94 |
|
|
20.48 |
|
|
15.68 |
Efficiency ratio (1) |
|
59.26 |
|
|
62.07 |
|
|
60.82 |
|
|
56.26 |
|
|
62.50 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
As a Percent of Average Interest-Earning Assets (1) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest income |
|
4.91 % |
|
|
4.67 % |
|
|
4.41 % |
|
|
3.92 % |
|
|
3.47 % |
Interest expense |
|
1.65 |
|
|
1.34 |
|
|
0.89 |
|
|
0.43 |
|
|
0.21 |
Net interest income |
|
3.26 |
|
|
3.33 |
|
|
3.52 |
|
|
3.49 |
|
|
3.26 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Average Balances |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Loans |
|
$3,567,920 |
|
|
$3,494,169 |
|
|
$3,449,944 |
|
|
$3,360,621 |
|
|
$3,145,095 |
Securities |
|
1,111,670 |
|
|
1,146,075 |
|
|
1,164,809 |
|
|
1,226,203 |
|
|
1,312,934 |
Total earning assets |
|
4,763,295 |
|
|
4,696,786 |
|
|
4,637,475 |
|
|
4,610,307 |
|
|
4,493,714 |
Total assets |
|
5,044,746 |
|
|
4,988,440 |
|
|
4,934,859 |
|
|
4,884,841 |
|
|
4,758,960 |
Deposits |
|
4,447,843 |
|
|
4,417,106 |
|
|
4,350,748 |
|
|
4,326,958 |
|
|
4,221,047 |
Interest bearing liabilities |
|
3,415,621 |
|
|
3,304,868 |
|
|
3,159,374 |
|
|
3,075,210 |
|
|
3,005,103 |
Shareholders' equity |
|
364,143 |
|
|
356,720 |
|
|
333,610 |
|
|
335,120 |
|
|
332,610 |
(1) Presented on a fully tax equivalent basis
assuming a marginal tax rate of 21%.
INDEPENDENT BANK CORPORATION AND SUBSIDIARIES Selected Financial
Data (continued) |
|
|
June 30, 2023 |
|
March 31, 2023 |
|
December 31, 2022 |
|
September 30, 2022 |
|
June 30, 2022 |
|
(unaudited) |
|
(Dollars in thousands except per share data) |
End of
Period |
|
|
|
|
|
|
|
|
|
Capital |
|
|
|
|
|
|
|
|
|
Tangible common equity ratio |
6.75 % |
|
6.60 % |
|
6.37 % |
|
6.15 % |
|
6.26 % |
Tangible common equity ratio excluding accumulated other
comprehensive loss |
8.09 |
|
7.95 |
|
7.98 |
|
7.86 |
|
7.78 |
Average equity to average assets |
7.22 |
|
7.15 |
|
6.76 |
|
6.86 |
|
6.99 |
Total capital to risk-weighted assets (2) |
13.64 |
|
13.80 |
|
13.62 |
|
13.58 |
|
13.64 |
Tier 1 capital to risk-weighted assets (2) |
11.40 |
|
11.53 |
|
11.36 |
|
11.29 |
|
11.33 |
Common equity tier 1 capital to risk-weighted assets (2) |
10.45 |
|
10.55 |
|
10.38 |
|
10.29 |
|
10.30 |
Tier 1 capital to average assets (2) |
8.87 |
|
8.92 |
|
8.86 |
|
8.77 |
|
8.74 |
Common shareholders' equity per share of common stock |
$
17.91 |
|
$
17.40 |
|
$
16.50 |
|
$ 15.78 |
|
$
15.73 |
Tangible common equity per share of common stock |
16.45 |
|
15.94 |
|
15.04 |
|
14.30 |
|
14.25 |
Total shares outstanding |
20,943,694 |
|
21,138,303 |
|
21,063,971 |
|
21,063,954 |
|
21,049,218 |
|
|
|
|
|
|
|
|
|
|
Selected Balances |
|
|
|
|
|
|
|
|
|
Loans |
$ 3,631,114 |
|
$ 3,509,809 |
|
$ 3,465,352 |
|
$ 3,409,858 |
|
$ 3,258,850 |
Securities |
1,092,703 |
|
1,137,103 |
|
1,154,165 |
|
1,183,701 |
|
1,241,312 |
Total earning assets |
4,830,185 |
|
4,860,696 |
|
4,688,246 |
|
4,633,876 |
|
4,552,185 |
Total assets |
5,135,564 |
|
5,138,934 |
|
4,999,787 |
|
4,931,377 |
|
4,826,209 |
Deposits |
4,487,636 |
|
4,544,749 |
|
4,379,069 |
|
4,327,028 |
|
4,290,574 |
Interest bearing liabilities |
3,501,280 |
|
3,481,511 |
|
3,274,409 |
|
3,116,027 |
|
3,037,278 |
Shareholders' equity |
375,162 |
|
367,714 |
|
347,596 |
|
332,308 |
|
331,134 |
(2) June 30, 2023 are Preliminary.
Reconciliation of Non-GAAP Financial
Measures Independent Bank Corporation
Independent Bank Corporation believes non-GAAP
measures are meaningful because they reflect adjustments commonly
made by management, investors, regulators and analysts to evaluate
the adequacy of common equity and performance trends.
Tangible common equity is used by the Company to measure the
quality of capital.
Reconciliation
of Non-GAAP Financial Measures |
|
|
Three Months Ended June 30, |
|
Six Months Ended June 30, |
|
|
2023 |
|
|
|
2022 |
|
|
|
2023 |
|
|
|
2022 |
|
|
(Dollars in
thousands) |
Net
Interest Margin, Fully Taxable Equivalent ("FTE") |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net interest
income |
$ |
38,350 |
|
|
$ |
36,061 |
|
|
$ |
76,791 |
|
|
$ |
69,062 |
|
Add: taxable equivalent adjustment |
|
423 |
|
|
|
481 |
|
|
|
862 |
|
|
|
963 |
|
Net interest
income - taxable equivalent |
$ |
38,773 |
|
|
$ |
36,542 |
|
|
$ |
77,653 |
|
|
$ |
70,025 |
|
Net interest
margin (GAAP) (1) |
|
3.23 |
% |
|
|
3.21 |
% |
|
|
3.26 |
% |
|
|
3.09 |
% |
Net interest
margin (FTE) (1) |
|
3.26 |
% |
|
|
3.26 |
% |
|
|
3.29 |
% |
|
|
3.13 |
% |
(1) Annualized.
Tangible
Common Equity Ratio |
|
|
|
|
|
|
|
|
|
|
|
June 30, 2023 |
|
March 31, 2023 |
|
December 31, 2022 |
|
September 30, 2022 |
|
June 30, 2022 |
|
(Dollars in
thousands) |
Common
shareholders' equity |
$ |
375,162 |
|
|
$ |
367,714 |
|
|
$ |
347,596 |
|
|
$ |
332,308 |
|
|
$ |
331,134 |
|
Less: |
|
|
|
|
|
|
|
|
|
Goodwill |
|
28,300 |
|
|
|
28,300 |
|
|
|
28,300 |
|
|
|
28,300 |
|
|
|
28,300 |
|
Other intangibles |
|
2,278 |
|
|
|
2,415 |
|
|
|
2,551 |
|
|
|
2,697 |
|
|
|
2,871 |
|
Tangible
common equity |
|
344,584 |
|
|
|
336,999 |
|
|
|
316,745 |
|
|
|
301,311 |
|
|
|
299,963 |
|
Addition: |
|
|
|
|
|
|
|
|
|
Accumulated other comprehensive loss for regulatory purposes |
|
74,712 |
|
|
|
75,013 |
|
|
|
86,966 |
|
|
|
91,248 |
|
|
|
79,206 |
|
Tangible
common equity excluding other comprehensive loss adjustments |
$ |
419,296 |
|
|
$ |
412,012 |
|
|
$ |
403,711 |
|
|
$ |
392,559 |
|
|
$ |
379,169 |
|
|
|
|
|
|
|
|
|
|
|
Total
assets |
$ |
5,135,564 |
|
|
$ |
5,138,934 |
|
|
$ |
4,999,787 |
|
|
$ |
4,931,377 |
|
|
$ |
4,826,209 |
|
Less: |
|
|
|
|
|
|
|
|
|
Goodwill |
|
28,300 |
|
|
|
28,300 |
|
|
|
28,300 |
|
|
|
28,300 |
|
|
|
28,300 |
|
Other intangibles |
|
2,278 |
|
|
|
2,415 |
|
|
|
2,551 |
|
|
|
2,697 |
|
|
|
2,871 |
|
Tangible
assets |
|
5,104,986 |
|
|
|
5,108,219 |
|
|
|
4,968,936 |
|
|
|
4,900,380 |
|
|
|
4,795,038 |
|
Addition: |
|
|
|
|
|
|
|
|
|
Net unrealized losses on available for sale securities and
derivatives, net of tax |
|
74,712 |
|
|
|
75,013 |
|
|
|
86,966 |
|
|
|
91,248 |
|
|
|
79,206 |
|
Tangible
assets excluding other comprehensive loss adjustments |
$ |
5,179,698 |
|
|
$ |
5,183,232 |
|
|
$ |
5,055,902 |
|
|
$ |
4,991,628 |
|
|
$ |
4,874,244 |
|
|
|
|
|
|
|
|
|
|
|
Common
equity ratio |
|
7.31 |
% |
|
|
7.16 |
% |
|
|
6.95 |
% |
|
|
6.74 |
% |
|
|
6.86 |
% |
Tangible
common equity ratio |
|
6.75 |
% |
|
|
6.60 |
% |
|
|
6.37 |
% |
|
|
6.15 |
% |
|
|
6.26 |
% |
Tangible
common equity ratio excluding other comprehensive loss |
|
8.09 |
% |
|
|
7.95 |
% |
|
|
7.98 |
% |
|
|
7.86 |
% |
|
|
7.78 |
% |
|
|
|
|
|
|
|
|
|
|
Tangible
Common Equity per Share of Common Stock: |
|
|
|
|
|
|
|
|
|
|
Common
shareholders' equity |
$ |
375,162 |
|
|
$ |
367,714 |
|
|
$ |
347,596 |
|
|
$ |
332,308 |
|
|
$ |
331,134 |
|
Tangible
common equity |
$ |
344,584 |
|
|
$ |
336,999 |
|
|
$ |
316,745 |
|
|
$ |
301,311 |
|
|
$ |
299,963 |
|
Shares of
common stock outstanding (in thousands) |
|
20,944 |
|
|
|
21,138 |
|
|
|
21,064 |
|
|
|
21,064 |
|
|
|
21,049 |
|
|
|
|
|
|
|
|
|
|
|
Common
shareholders' equity per share of common stock |
$ |
17.91 |
|
|
$ |
17.40 |
|
|
$ |
16.50 |
|
|
$ |
15.78 |
|
|
$ |
15.73 |
|
Tangible
common equity per share of common stock |
$ |
16.45 |
|
|
$ |
15.94 |
|
|
$ |
15.04 |
|
|
$ |
14.30 |
|
|
$ |
14.25 |
|
The tangible common equity ratio removes the
effect of goodwill and other intangible assets from capital and
total assets. Tangible common equity per share of common
stock removes the effect of goodwill and other intangible assets
from common shareholders’ equity per share of common stock.
Contact: |
William B.
Kessel, President and CEO, 616.447.3933Gavin A. Mohr, Chief
Financial Officer, 616.447.3929 |
Independent Bank (NASDAQ:IBCP)
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