Exhibit 99.1


News Release
 
 
Independent Bank Corporation
 
4200 East Beltline
 
Grand Rapids, MI 49525
 
616.527.5820

For Release:
Immediately
   
Contact:
William B. Kessel, President and CEO, 616.447.3933
 
Robert N. Shuster, Chief Financial Officer, 616.522.1765

INDEPENDENT BANK CORPORATION REPORTS
2018 FIRST QUARTER RESULTS

GRAND RAPIDS, Mich., Apr. 23, 2018 -
Independent Bank Corporation (NASDAQ: IBCP) reported first quarter 2018 net income of $9.2 million, or $0.42 per diluted share, versus net income of $6.0 million, or $0.28 per diluted share, in the prior-year period.  The first quarter of 2018, included a $1.5 million fair value increase due to price for capitalized mortgage loan servicing rights, $0.2 million in net securities losses and $0.2 million of merger related expenses.  Collectively, these items increased net income by $0.9 million, or $0.04 per diluted share.  Additionally, the reduction in the federal corporate income tax rate to 21% (that was effective Jan. 1, 2018) increased net income by approximately $0.07 per diluted share compared to the year ago period.

First quarter 2018 highlights include:

·
Net income and diluted earnings per share increases of 53.3% and 50.0%, respectively, over 2017;
·
Year-over-year and sequential quarterly increases in net interest income of $2.5 million and $0.6 million, respectively;
·
Net growth in total portfolio loans of $52.6 million, or 10.6% annualized;
·
A $1.6 million, or 15.8%, decline in non-performing assets.

William B. (“Brad”) Kessel, the President and Chief Executive Officer of Independent Bank Corporation, commented: “We are pleased to report a solid start to 2018.  Strong loan growth, continued reductions in non-performing assets and a lower federal corporate income tax rate helped lead to a 53% increase in our net income.  Return on average assets and return on average equity reached 1.34% and 14.04%, respectively.  Net interest income and our net interest margin increased on both a sequential and year-over-year quarterly basis.  As previously announced, our acquisition of Traverse City State Bank (“TCSB”) was completed on April 1, 2018.  We are excited about this addition, and as we look ahead to the remainder of 2018, we are focused on the successful integration of TCSB, capitalizing on growth opportunities across our markets, stable to improving asset quality, and building core deposits.”

Operating Results

The Company’s net interest income totaled $23.9 million during the first quarter of 2018, an increase of $2.5 million, or 11.5%, from the year-ago period, and an increase of $0.6 million, or 2.7% from the fourth quarter of 2017.  The Company’s tax equivalent net interest income as a percent of average interest-earning assets (the “net interest margin”) was 3.71% during the first quarter of 2018 compared to 3.69% in the year ago period, and 3.65% in the fourth quarter of 2017.  The year-over-year quarterly increase in net interest income is due to increases in both the net interest margin and in average interest-earning assets.  Total average interest-earning assets were $2.61 billion in the first quarter of 2018 compared to $2.37 billion in the year ago quarter and $2.57 billion in the fourth quarter of 2017.  Net interest income included net recoveries of interest on non-accrual or previously charged-off loans of $0.18 million in the first quarter of 2018 compared to $0.50 million in the year ago quarter and $0.19 million in the fourth quarter of 2017.
 
1

Non-interest income totaled $11.5 million and $10.3 million in the first quarters of 2018 and 2017, respectively.  This increase is primarily due to an increase in mortgage loan servicing income.  The Company adopted Financial Accounting Standards Board Accounting Standards Update 2014-09 “Revenue from Contracts with Customers (Topic 606)” (“ASU 2014-09”) on Jan. 1, 2018, using the modified retrospective approach.  Although ASU 2014-09 did not have any impact on Jan. 1, 2018 shareholders’ equity or first quarter 2018 net income, it did result in some classification changes in non-interest income and non-interest expense as compared to the prior year period.  Specifically, in the first quarter of 2018, interchange income and interchange expense each increased by $0.3 million and investment and insurance commissions (included in other non-interest income in the Consolidated Statements of Operations) and compensation and employee benefits expense each decreased by $0.2 million, due to classification changes under ASU 2014-09.

Gains on mortgage loans were unchanged at $2.6 million in the first quarters of 2018 and 2017, as an increase in mortgage loan sales volume was offset by compression in the profit margin.  Mortgage loan origination volume was up 0.6% to $159.0 million in the first quarter of 2018 compared to the year ago period.

Mortgage loan servicing generated income of $2.2 million and $0.8 million in the first quarters of 2018 and 2017, respectively.  This activity is summarized in the following table:

   
Three Months Ended
 
   
03/31/2018
   
03/31/2017
 
Mortgage loan servicing:
 
(Dollars in thousands)
 
Revenue, net
 
$
1,192
   
$
1,089
 
Fair value change due to price
   
1,458
     
145
 
Fair value change due to pay-downs
   
(429
)
   
(409
)
Total
 
$
2,221
   
$
825
 

The significant variance in the fair value change due to price relates primarily to the rise in mortgage loan interest rates in the first quarter of 2018.  That increase reduced projected prepayment rates for mortgage loans serviced for others, leading to an increase in fair value.

Non-interest expense totaled $23.9 million in the first quarter of 2018, compared to $23.6 million in the year-ago period, representing an increase of 1.6%.

The Company recorded an income tax expense of $2.0 million and $2.6 million in the first quarters of 2018 and 2017, respectively.  Income tax expense represented 18.2% and 30.5% of pre-tax earnings in the first quarters of 2018 and 2017, respectively.  The decline in income tax expense is primarily due to a reduction in the statutory federal corporate income tax rate to 21% (from 35%) that became effective on Jan. 1, 2018.

Asset Quality

Commenting on asset quality, President and CEO Kessel added:  “We continue to make progress in further improving asset quality, as evidenced by a decline in non-performing assets.  In addition, thirty- to eighty-nine day delinquency rates at Mar. 31, 2018 were 0.005% for commercial loans and 0.39% for mortgage and consumer loans.  These early stage delinquency rates continue to be well-managed.”

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

Loan Type
 
3/31/2018
   
12/31/2017
   
3/31/2017
 
   
(Dollars in Thousands)
 
Commercial
 
$
439
   
$
646
   
$
1,325
 
Consumer/installment
   
605
     
543
     
829
 
Mortgage
   
5,585
     
6,995
     
6,860
 
Total
 
$
6,629
   
$
8,184
   
$
9,014
 
Ratio of non-performing loans to total portfolio loans
   
0.32
%
   
0.41
%
   
0.54
%
Ratio of non-performing assets to total assets
   
0.30
%
   
0.35
%
   
0.55
%
Ratio of the allowance for loan losses to non-performing loans
   
348.03
%
   
275.99
%
   
222.30
%

(1)
Excludes loans that are classified as “troubled debt restructured” that are still performing.
 
2

Non-performing loans decreased by $1.6 million, or 19.0%, since year-end 2017.  The decline in non-performing loans primarily reflects loan charge-offs, pay-offs, negotiated transactions and the migration of loans into other real estate (“ORE”).  ORE and repossessed assets totaled $1.6 million at both Mar. 31, 2018 and at Dec. 31, 2017.

The provision for loan losses was an expense of $0.3 million and a credit of $0.4 million in the first quarters of 2018 and 2017, respectively.  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.  The Company recorded loan net recoveries of $0.2 million [(0.03)% annualized of average loans] in the first quarter of 2018, compared to loan net recoveries of $0.2 million [(0.04)% annualized of average loans] in the first quarter of 2017.  At Mar. 31, 2018, the allowance for loan losses totaled $23.1 million, or 1.11% of portfolio loans, compared to $22.6 million, or 1.12% of portfolio loans, at Dec. 31, 2017.

Balance Sheet, Liquidity and Capital

Total assets were $2.79 billion at Mar. 31, 2018, an increase of $3.8 million from Dec. 31, 2017.  Loans, excluding loans held for sale, were $2.07 billion at Mar. 31, 2018, compared to $2.02 billion at Dec. 31, 2017.  Deposits totaled $2.43 billion at Mar. 31, 2018, an increase of $29.9 million from Dec. 31, 2017.  The increase in deposits is primarily due to growth in savings and interest-bearing checking account balances.

Cash and cash equivalents totaled $42.4 million at Mar. 31, 2018, versus $54.7 million at Dec. 31, 2017. Securities available for sale totaled $489.1 million at Mar. 31, 2018, versus $522.9 million at Dec. 31, 2017.

Total shareholders’ equity was $267.9 million at Mar. 31, 2018, or 9.59% of total assets.  Tangible common equity totaled $266.4 million at Mar. 31, 2018, or $12.46 per share.  The Company’s wholly owned subsidiary, Independent Bank, remains significantly above “well capitalized” for regulatory purposes with the following ratios:
 
Regulatory Capital Ratios
 
3/31/2018
   
12/31/2017
   
Well
Capitalized
Minimum
 
                         
Tier 1 capital to average total assets
   
10.01
%
   
9.78
%
   
5.00
%
Tier 1 common equity  to risk-weighted assets
   
13.25
%
   
12.95
%
   
6.50
%
Tier 1 capital to risk-weighted assets
   
13.25
%
   
12.95
%
   
8.00
%
Total capital to risk-weighted assets
   
14.40
%
   
14.10
%
   
10.00
%

Share Repurchase Plan

As previously announced, on Jan. 22, 2018, the Board of Directors of the Company authorized a share repurchase plan.  Under the terms of the share repurchase plan, the Company is authorized to buy back up to 5% of its outstanding common stock.    The repurchase plan is authorized to last through Dec. 31, 2018.  Thus far in 2018, the Company has not repurchased any shares.

Earnings Conference Call

Brad Kessel, President and CEO, and Rob Shuster, CFO, will review the quarterly results in a conference call for investors and analysts beginning at 11:00 am ET on Monday, Apr. 23, 2018.
 
To participate in the live conference call, please dial 1-866-200-8394. Also the conference call will be accessible through an audio webcast with user-controlled slides via the following URL:  https://services.choruscall.com/links/ibcp180423.html.

A playback of the call can be accessed by dialing 1-877-344-7529 (Conference ID # 10117933). The replay will be available through Apr. 30, 2018.

Annual Shareholders Meeting

The Company’s 2018 Annual Meeting of Shareholders is being held at 3:00 pm ET on Tuesday, Apr. 24, 2018.  The Company will be conducting its Annual Meeting of Shareholders by means of remote communication via the Internet.  To attend the meeting, please log on to the Internet at www.virtualshareholdermeeting.com/IBCP2018.  At this site a shareholder will be able to vote electronically and submit questions during the meeting.

About Independent Bank Corporation

Independent Bank Corporation (NASDAQ: IBCP) is a Michigan-based bank holding company with total assets of approximately $2.8 billion.  Founded as First National Bank of Ionia in 1864, Independent Bank Corporation operates a branch network across Michigan's Lower Peninsula through one state-chartered bank subsidiary.  This subsidiary (Independent Bank) provides a full range of financial services, including commercial banking, mortgage lending, investments and insurance.  Independent Bank Corporation is committed to providing exceptional personal service and value to its customers, stockholders and the communities it serves.
 
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For more information, please visit our Web site at:  IndependentBank.com.

Forward-Looking Statements

This release may contain “forward-looking statements” within the meaning of the U.S. Private Securities Litigation Reform Act of 1995. Any statements that are not historical facts, including statements about our expectations, beliefs, plans, strategies, predictions, forecasts, objectives, or assumptions of future events or performance, may be forward-looking. These statements are often, but not always, made through the use of words or phrases such as “anticipates,” “believes,” “expects,” “can,” “could,” “may,” “predicts,” “potential,” “opportunity,” “should,” “will,” “estimate,” “plans,” “projects,” “continuing,” “ongoing,” “expects,” “seeks,” “intends” and similar words or phrases. Accordingly, these statements involve estimates, known and unknown risks, assumptions, and uncertainties that could cause actual strategies, actions, or results to differ materially from those expressed in them, and are not guarantees  of timing, future results, events, or performance. Because forward-looking statements are necessarily only estimates of future strategies, actions, or results, based on management’s current expectations, assumptions, and estimates on the date hereof, there can be no assurance that actual strategies, actions or results will not differ materially from expectations. Therefore, readers are cautioned not to place undue reliance on such statements.  Factors that could cause or contribute to such differences are changes in general economic, political or industry conditions; changes in monetary and fiscal policies, including the interest rate policies of the Federal Reserve Board; volatility and disruptions in capital and credit markets; the interdependence of financial service companies; changes in regulation or oversight; unfavorable developments concerning credit quality; any future acquisitions or divestitures; the effects of more stringent capital or liquidity requirements; declines or other changes in the businesses or industries of Independent Bank Corporation's customers; the implementation of Independent Bank Corporation's strategies and business models; Independent Bank Corporation's ability to utilize technology to efficiently and effectively develop, market and deliver new products and services; operational difficulties, failure of technology infrastructure or information security incidents; changes in the financial markets, including fluctuations in interest rates and their impact on deposit pricing; competitive product and pricing pressures among financial institutions within Independent Bank Corporation's markets; changes in customer behavior; management's ability to maintain and expand customer relationships; management's ability to retain key officers and employees; the impact of legal and regulatory proceedings or determinations; the effectiveness of methods of reducing risk exposures; the effects of terrorist activities and other hostilities; the effects of catastrophic events; changes in accounting standards and the critical nature of Independent Bank Corporation's accounting policies.
 
In addition, factors that may cause actual results to differ from expectations regarding the April 1, 2018 acquisition of TCSB Bancorp, Inc. include, but are not limited to, the reaction to the transaction of the companies’ customers, employees and counterparties; customer disintermediation; inflation; expected synergies, cost savings and other financial benefits of the transaction might not be realized within the expected timeframes or might be less than projected; credit and interest rate risks associated with the parties' respective businesses, customers, borrowings, repayment, investment, and deposit practices; general economic conditions, either nationally or in the market areas in which the parties operate or anticipate doing business, are less favorable than expected; new regulatory or legal requirements or obligations; and other risks.
 
Certain risks and important factors that could affect Independent Bank Corporation's future results are identified in its Annual Report on Form 10-K for the year ended December 31, 2017 and other reports filed with the SEC, including among other things under the heading “Risk Factors” in such Annual Report on Form 10-K. Any forward-looking statement speaks only as of the date on which it is made, and Independent Bank Corporation undertakes no obligation to update any forward-looking statement, whether to reflect events or circumstances, after the date on which the statement is made, to reflect new information or the occurrence of unanticipated events, or otherwise.
 
4

INDEPENDENT BANK CORPORATION AND SUBSIDIARIES
Consolidated Statements of Financial Condition

   
March 31,
2018
   
December 31,
2017
 
   
(unaudited)
 
   
(In thousands, except share
amounts)
 
Assets
 
Cash and due from banks
 
$
29,126
   
$
36,994
 
Interest bearing deposits
   
13,250
     
17,744
 
Cash and Cash Equivalents
   
42,376
     
54,738
 
Interest bearing deposits - time
   
1,738
     
2,739
 
Equity securities at fair value
   
301
     
-
 
Trading securities
   
-
     
455
 
Securities available for sale
   
489,119
     
522,925
 
Federal Home Loan Bank and Federal Reserve Bank stock, at cost
   
15,543
     
15,543
 
Loans held for sale, carried at fair value
   
34,148
     
39,436
 
Loans
               
Commercial
   
857,417
     
853,260
 
Mortgage
   
888,910
     
849,530
 
Installment
   
325,108
     
316,027
 
Total Loans
   
2,071,435
     
2,018,817
 
Allowance for loan losses
   
(23,071
)
   
(22,587
)
Net Loans
   
2,048,364
     
1,996,230
 
Other real estate and repossessed assets
   
1,647
     
1,643
 
Property and equipment, net
   
38,809
     
39,149
 
Bank-owned life insurance
   
54,353
     
54,572
 
Deferred tax assets, net
   
13,715
     
15,089
 
Capitalized mortgage loan servicing rights
   
17,783
     
15,699
 
Other intangibles
   
1,500
     
1,586
 
Accrued income and other assets
   
33,723
     
29,551
 
Total Assets
 
$
2,793,119
   
$
2,789,355
 
                 
Liabilities and Shareholders' Equity
 
Deposits
               
Non-interest bearing
 
$
774,046
   
$
768,333
 
Savings and interest-bearing checking
   
1,100,505
     
1,064,391
 
Reciprocal
   
63,012
     
50,979
 
Time
   
377,663
     
374,872
 
Brokered time
   
115,175
     
141,959
 
Total Deposits
   
2,430,401
     
2,400,534
 
Other borrowings
   
27,847
     
54,600
 
Subordinated debentures
   
35,569
     
35,569
 
Accrued expenses and other liabilities
   
31,385
     
33,719
 
Total Liabilities
   
2,525,202
     
2,524,422
 
                 
Shareholders’ Equity
               
Preferred stock, no par value, 200,000 shares authorized; none issued or outstanding
   
-
     
-
 
Common stock, no par value, 500,000,000 shares authorized; issued and outstanding: 21,374,816 shares at March 31, 2018 and 21,333,869 shares at December 31, 2017
   
324,517
     
324,986
 
Accumulated deficit
   
(48,098
)
   
(54,054
)
Accumulated other comprehensive loss
   
(8,502
)
   
(5,999
)
Total Shareholders’ Equity
   
267,917
     
264,933
 
Total Liabilities and Shareholders’ Equity
 
$
2,793,119
   
$
2,789,355
 
 
5

INDEPENDENT BANK CORPORATION AND SUBSIDIARIES
Consolidated Statements of Operations

   
Three Months Ended
 
   
March 31,
2018
   
December 31,
2017
   
March 31,
2017
 
   
(unaudited)
 
Interest Income
 
(In thousands, except per share amounts)
 
Interest and fees on loans
 
$
23,353
   
$
22,643
   
$
19,858
 
Interest on securities
                       
Taxable
   
2,635
     
2,628
     
2,754
 
Tax-exempt
   
479
     
522
     
455
 
Other investments
   
330
     
233
     
312
 
Total Interest Income
   
26,797
     
26,026
     
23,379
 
Interest Expense
                       
Deposits
   
2,287
     
2,021
     
1,443
 
Other borrowings and subordinated debentures
   
574
     
689
     
470
 
Total Interest Expense
   
2,861
     
2,710
     
1,913
 
Net Interest Income
   
23,936
     
23,316
     
21,466
 
Provision for loan losses
   
315
     
393
     
(359
)
Net Interest Income After Provision for Loan Losses
   
23,621
     
22,923
     
21,825
 
Non-interest Income
                       
Service charges on deposit accounts
   
2,905
     
3,208
     
3,009
 
Interchange income
   
2,246
     
2,154
     
1,922
 
Net gains (losses) on assets
                       
Mortgage loans
   
2,571
     
2,876
     
2,571
 
Securities
   
(173
)
   
198
     
27
 
Mortgage loan servicing, net
   
2,221
     
979
     
825
 
Other
   
1,755
     
2,029
     
1,985
 
Total Non-interest Income
   
11,525
     
11,444
     
10,339
 
Non-Interest Expense
                       
Compensation and employee benefits
   
14,280
     
13,985
     
14,147
 
Occupancy, net
   
2,264
     
2,070
     
2,142
 
Data processing
   
1,878
     
1,987
     
1,937
 
Furniture, fixtures and equipment
   
967
     
927
     
977
 
Communications
   
680
     
638
     
683
 
Loan and collection
   
677
     
666
     
413
 
Interchange expense
   
598
     
287
     
283
 
Advertising
   
441
     
354
     
506
 
Legal and professional
   
378
     
516
     
437
 
FDIC deposit insurance
   
230
     
286
     
198
 
Merger related expenses
   
174
     
284
     
-
 
Credit card and bank service fees
   
96
     
97
     
191
 
Net (gains) losses on other real estate and repossessed assets
   
(290
)
   
(738
)
   
11
 
Other
   
1,574
     
1,777
     
1,644
 
Total Non-interest Expense
   
23,947
     
23,136
     
23,569
 
Income Before Income Tax
   
11,199
     
11,231
     
8,595
 
Income tax expense
   
2,038
     
9,520
     
2,621
 
Net Income
 
$
9,161
   
$
1,711
   
$
5,974
 
Net Income Per Common Share
                       
Basic
 
$
0.43
   
$
0.08
   
$
0.28
 
Diluted
 
$
0.42
   
$
0.08
   
$
0.28
 
 
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INDEPENDENT BANK CORPORATION AND SUBSIDIARIES
Selected Financial Data

   
March 31,
2018
   
December 31,
2017
   
September 30,
2017
   
June 30,
2017
   
March 31,
2017
 
   
(unaudited)
 
   
(Dollars in thousands except per share data)
 
Three Months Ended
                             
Net interest income
 
$
23,936
   
$
23,316
   
$
22,912
   
$
21,492
   
$
21,466
 
Provision for loan losses
   
315
     
393
     
582
     
583
     
(359
)
Non-interest income
   
11,525
     
11,444
     
10,304
     
10,446
     
10,339
 
Non-interest expense
   
23,947
     
23,136
     
22,616
     
22,761
     
23,569
 
Income before income tax
   
11,199
     
11,231
     
10,018
     
8,594
     
8,595
 
Income tax expense
   
2,038
     
9,520
     
3,159
     
2,663
     
2,621
 
Net income
 
$
9,161
   
$
1,711
   
$
6,859
   
$
5,931
   
$
5,974
 
                                         
Basic earnings per share
 
$
0.43
   
$
0.08
   
$
0.32
   
$
0.28
   
$
0.28
 
Diluted earnings per share
   
0.42
     
0.08
     
0.32
     
0.27
     
0.28
 
Cash dividend per share
   
0.15
     
0.12
     
0.10
     
0.10
     
0.10
 
                                         
Average shares outstanding
   
21,364,708
     
21,332,053
     
21,334,247
     
21,331,363
     
21,308,396
 
Average diluted shares outstanding
   
21,674,375
     
21,661,133
     
21,651,963
     
21,646,941
     
21,638,768
 
                                         
Performance Ratios
                                       
Return on average assets
   
1.34
%
   
0.25
%
   
1.01
%
   
0.92
%
   
0.95
%
Return on average common equity
   
14.04
     
2.51
     
10.27
     
9.15
     
9.63
 
Efficiency ratio (1)
   
66.72
     
66.14
     
67.38
     
70.29
     
73.29
 
                                         
As a Percent of Average Interest-Earning Assets (1)
                                 
Interest income
   
4.15
%
   
4.07
%
   
4.05
%
   
3.94
%
   
4.02
%
Interest expense
   
0.44
     
0.42
     
0.39
     
0.34
     
0.33
 
Net interest income
   
3.71
     
3.65
     
3.66
     
3.60
     
3.69
 
                                         
Average Balances
                                       
Loans
 
$
2,062,847
   
$
2,006,207
   
$
1,911,635
   
$
1,782,953
   
$
1,690,003
 
Securities available for sale
   
500,599
     
532,202
     
565,546
     
592,594
     
599,451
 
Total earning assets
   
2,611,890
     
2,574,779
     
2,522,060
     
2,423,283
     
2,371,705
 
Total assets
   
2,776,986
     
2,742,761
     
2,697,362
     
2,598,605
     
2,559,487
 
Deposits
   
2,417,906
     
2,340,593
     
2,315,806
     
2,239,605
     
2,233,853
 
Interest bearing liabilities
   
1,724,153
     
1,680,917
     
1,664,734
     
1,595,984
     
1,574,306
 
Shareholders' equity
   
264,584
     
270,099
     
265,074
     
260,095
     
251,566
 
                                         
End of Period
                                       
Capital
                                       
Tangible common equity ratio
   
9.54
%
   
9.45
%
   
9.67
%
   
9.79
%
   
9.78
%
Average equity to average assets
   
9.53
     
9.85
     
9.83
     
10.01
     
9.83
 
Tangible common equity per share of common stock
 
$
12.46
   
$
12.34
   
$
12.47
   
$
12.22
   
$
11.89
 
Total shares outstanding
   
21,374,816
     
21,333,869
     
21,332,317
     
21,334,740
     
21,327,796
 
                                         
Selected Balances
                                       
Loans
 
$
2,071,435
   
$
2,018,817
   
$
1,937,094
   
$
1,811,677
   
$
1,670,747
 
Securities available for sale
   
489,119
     
522,925
     
548,865
     
583,725
     
608,964
 
Total earning assets
   
2,625,534
     
2,617,204
     
2,568,554
     
2,486,518
     
2,411,369
 
Total assets
   
2,793,119
     
2,789,355
     
2,753,446
     
2,665,367
     
2,596,482
 
Deposits
   
2,430,401
     
2,400,534
     
2,343,761
     
2,246,219
     
2,263,059
 
Interest bearing liabilities
   
1,719,771
     
1,722,370
     
1,701,624
     
1,646,599
     
1,597,417
 
Shareholders' equity
   
267,917
     
264,933
     
267,710
     
262,453
     
255,475
 
 
(1)
Presented on a fully tax equivalent basis assuming a marginal tax rate of 21% in 2018 and 35% in 2017.
 
7

Reconciliation of Non-GAAP Financial Measures
Independent Bank Corporation

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

   
Three Months Ended
March 31,
 
   
2018
   
2017
 
   
(Dollars in thousands)
 
Net Interest Margin, Fully Taxable Equivalent ("FTE")
           
             
Net interest income
 
$
23,936
   
$
21,466
 
Add:  taxable equivalent adjustment
   
128
     
261
 
Net interest income - taxable equivalent
 
$
24,064
   
$
21,727
 
Net interest margin (GAAP) (1)
   
3.69
%
   
3.67
%
Net interest margin (FTE) (1)
   
3.71
%
   
3.69
%
 
(1)
Annualized
 
Tangible Common Equity Ratio
                             
   
March 31,
2018
   
December 31,
2017
   
September 30,
2017
   
June 30,
2017
   
March 31,
2017
 
   
(Dollars in thousands)
 
Common shareholders' equity
 
$
267,917
   
$
264,933
   
$
267,710
   
$
262,453
   
$
255,475
 
Less:
                                       
Goodwill
   
-
     
-
     
-
     
-
     
-
 
Other intangible assets
   
1,500
     
1,586
     
1,673
     
1,759
     
1,845
 
Tangible common equity
 
$
266,417
   
$
263,347
   
$
266,037
   
$
260,694
   
$
253,630
 
                                         
Total assets
 
$
2,793,119
   
$
2,789,355
   
$
2,753,446
   
$
2,665,367
   
$
2,596,482
 
Less:
                                       
Goodwill
   
-
     
-
     
-
     
-
     
-
 
Other intangible assets
   
1,500
     
1,586
     
1,673
     
1,759
     
1,845
 
Tangible assets
 
$
2,791,619
   
$
2,787,769
   
$
2,751,773
   
$
2,663,608
   
$
2,594,637
 
                                         
Common equity ratio
   
9.59
%
   
9.50
%
   
9.72
%
   
9.85
%
   
9.84
%
Tangible common equity ratio
   
9.54
%
   
9.45
%
   
9.67
%
   
9.79
%
   
9.78
%
                                         
Tangible Common Equity per Share of Common Stock:
                                 
                                         
Common shareholders' equity
 
$
267,917
   
$
264,933
   
$
267,710
   
$
262,453
   
$
255,475
 
Tangible common equity
 
$
266,417
   
$
263,347
   
$
266,037
   
$
260,694
   
$
253,630
 
Shares of common stock outstanding (in thousands)
   
21,375
     
21,334
     
21,332
     
21,335
     
21,328
 
                                         
Common shareholders' equity per share of common stock
 
$
12.53
   
$
12.42
   
$
12.55
   
$
12.30
   
$
11.98
 
Tangible common equity per share of common stock
 
$
12.46
   
$
12.34
   
$
12.47
   
$
12.22
   
$
11.89
 

The tangible common equity ratio removes the effect of intangible assets from capital and total assets.  Tangible common equity per share of common stock removes the effect of intangible assets from common shareholders’ equity per share of common stock.
 
 
8


The following information was filed by Independent Bank Corp (IBCP) on Monday, April 23, 2018 as an 8K 2.02 statement, which is an earnings press release pertaining to results of operations and financial condition. It may be helpful to assess the quality of management by comparing the information in the press release to the information in the accompanying 10-Q Quarterly Report statement of earnings and operation as management may choose to highlight particular information in the press release.

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