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
2019 SECOND QUARTER RESULTS

GRAND RAPIDS, Mich., July 25, 2019 -
Independent Bank Corporation (NASDAQ: IBCP) reported second quarter 2019 net income of $10.7 million, or $0.46 per diluted share, versus net income of $8.8 million, or $0.36 per diluted share, in the prior-year period.  For the six months ended June 30, 2019, the Company reported net income of $20.1 million, or $0.85 per diluted share, compared to net income of $18.0 million, or $0.78 per diluted share, in the prior-year period.  The increases in second quarter and year to date 2019 earnings as compared to 2018 primarily reflect an increase in net interest income.

Significant items impacting comparable quarterly and year to date 2019 and 2018 results include the following:


Changes in the fair value due to price of capitalized mortgage loan servicing rights (the “MSR Changes”) of a negative $2.7 million ($0.09 per diluted share, after taxes) and a negative $4.9 million ($0.16 per diluted share, after taxes) for the three- and six-months ended June 30, 2019, respectively, as compared to positive MSR Changes of $0.5 million ($0.02 per diluted share, after taxes) and $2.0 million ($0.07 per diluted share, after taxes) for the three- and six-months ended June 30, 2018, respectively.

The acquisition of TCSB Bancorp, Inc. (“TCSB”), and its subsidiary, Traverse City State Bank, on Apr. 1, 2018 (referred to as the “Merger” or “TCSB Acquisition”) and the associated data processing systems conversions in June 2018.  The total assets, loans and deposits acquired in the Merger were approximately $342.8 million, $295.8 million (including $1.3 million of loans held for sale) and $287.7 million, respectively.

Merger related expenses of $3.1 million ($0.10 per diluted share, after taxes) and $3.3 million ($0.11 per diluted share, after taxes) for the three- and six-months ended June 30, 2018, respectively.

Second quarter 2019 highlights include:


Return on average assets and return on average equity of 1.27% and 12.72%, respectively (these ratios increase to 1.52% and 15.22%, respectively, when excluding the after tax impact of the MSR Change);

A year-over-year increase in quarterly net interest income of $1.8 million, or 6.1%;

Total portfolio loan net growth of $87.7 million, or 13.4% annualized;

Continued strong asset quality metrics; and

The payment of an 18 cent per share dividend on common stock on May 15, 2019.

William B. (“Brad”) Kessel, the President and Chief Executive Officer of Independent Bank Corporation, commented: “We are pleased to report another quarter of solid financial performance.  Excluding the after-tax impacts of the MSR Changes and the Merger related expenses, net income and diluted earnings per share increased by 18.4% and 25.0%, respectively, in the second quarter of 2019 as compared to the second quarter of 2018.  As we look ahead to the last half of 2019 and beyond, we are focused on building on the momentum generated in the first half of the year.”

1

Operating Results

The Company’s net interest income totaled $30.8 million during the second quarter of 2019, an increase of $1.8 million, or 6.1% from the year-ago period, and up $0.5 million, or 1.7%, from the first quarter of 2019.  The Company’s tax equivalent net interest income as a percent of average interest-earning assets (the “net interest margin”) was 3.87% during the second quarter of 2019, compared to 3.93% in the year-ago period, and 3.88% in the first quarter of 2019.  The year-over-year quarterly increase in net interest income is due to an increase in average interest-earning assets that was partially offset by a decline in the net interest margin.  Average interest-earning assets were $3.19 billion in the second quarter of 2019, compared to $2.96 billion in the year ago quarter and $3.15 billion in the first quarter of 2019.  Second quarter 2019 and 2018 interest income on loans includes $0.4 million and $0.6 million, respectively, of accretion of the discount recorded on the TCSB loans acquired in the Merger.

For the first six months of 2019, net interest income totaled $61.0 million, an increase of $8.1 million, or 15.3% from the first half of 2018.  The Company’s net interest margin for the first six months of 2019 was 3.88% compared to 3.83% in 2018.  The increase in net interest income for the first six months of 2019 is due to increases in both average interest-earning assets and in the net interest margin.
 
Non-interest income totaled $9.9 million and $19.9 million, respectively, for the second quarter and first six months of 2019, compared to $12.3 million and $24.0 million in the respective comparable year ago periods.  These changes were primarily due to variances in mortgage banking related revenues (net gains on mortgage loans and mortgage loan servicing, net).

Net gains on mortgage loans in the second quarters of 2019 and 2018, were approximately $4.3 million and $3.3 million, respectively.  For the first six months of 2019, net gains on mortgage loans totaled $7.9 million compared to $5.8 million in 2018.  The increase in net gains on mortgage loans was primarily due to an increase in mortgage loan sales volume in 2019 as well as fair value adjustments on the mortgage loan pipeline.

Mortgage loan servicing, net, generated a loss of $1.9 million and income of $1.2 million in the second quarters of 2019 and 2018, respectively. For the first six months of 2019, mortgage loan servicing, net, generated a loss of $3.1 million as compared to income of $3.5 million in 2018.  The significant variances in mortgage loan servicing, net are primarily due to changes in the fair value of capitalized mortgage loan servicing rights associated with changes in mortgage loan interest rates (a decline in 2019 as compared to an increase in 2018) and expected future prepayment levels. Mortgage loan servicing, net activity is summarized in the following table:

   
Three Months Ended
   
Six Months Ended
 
   
6/30/2019
   
6/30/2018
   
6/30/2019
   
6/30/2018
 
Mortgage loan servicing, net:
 
(Dollars in thousands)
 
Revenue, net
 
$
1,515
   
$
1,372
   
$
2,991
   
$
2,564
 
Fair value change due to price
   
(2,670
)
   
518
     
(4,873
)
   
1,976
 
Fair value change due to pay-downs
   
(752
)
   
(655
)
   
(1,240
)
   
(1,084
)
Total
 
$
(1,907
)
 
$
1,235
   
$
(3,122
)
 
$
3,456
 

Non-interest expenses totaled $26.6 million in the second quarter of 2019, compared to $29.8 million in the year-ago period.  For the first six months of 2019, non-interest expenses totaled $54.6 million versus $53.9 million in 2018.  These year-over-year changes in non-interest expense are primarily due to the TCSB Acquisition (including the aforementioned Merger related expenses) as well as higher compensation and health insurance costs.

The Company recorded an income tax expense of $2.7 million and $4.9 million in the second quarter and first six months of 2019, respectively.  This compares to an income tax expense of $2.1 million and $4.1 million in the second quarter and first six months of 2018, respectively.  The increase in income tax expense is primarily due to higher pre-tax earnings in 2019.

Asset Quality

Commenting on asset quality, President and CEO Kessel added:  “Non-performing loans and assets as well as loan net charge-offs remain at low levels.  In addition, thirty- to eighty-nine day delinquency rates at June 30, 2019 were 0.02% for commercial loans and 0.43% for mortgage and consumer loans.  These early stage delinquency rates continue to be well-managed.”

2

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

Loan Type
 
6/30/2019
   
12/31/2018
   
6/30/2018
 
   
(Dollars in thousands)
 
Commercial
 
$
900
   
$
2,220
   
$
2,889
 
Consumer/installment
   
901
     
781
     
671
 
Mortgage
   
5,997
     
6,033
     
5,522
 
Total non-accrual loans
   
7,798
     
9,034
     
9,082
 
Less – government guaranteed loans
   
436
     
460
     
224
 
Total non-performing loans
 
$
7,362
   
$
8,574
   
$
8,858
 
Ratio of non-performing loans to total portfolio loans
   
0.27
%
   
0.33
%
   
0.36
%
Ratio of non-performing assets to total assets
   
0.27
%
   
0.29
%
   
0.33
%
Ratio of the allowance for loan losses to non-performing loans
   
351.85
%
   
290.27
%
   
265.34
%


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

Non-performing loans have decreased $1.2 million from Dec. 31, 2018.  This decrease principally reflects a decline in non-performing commercial loans due primarily to pay-downs, charge-offs and a transfer to other real estate.  Other real estate and repossessed assets totaled $2.0 million at June 30, 2019, compared to $1.3 million at Dec. 31, 2018.  This increase is primarily due to the addition of a $0.6 million commercial office building located in Grand Rapids during the second quarter of 2019.

The provision for loan losses was an expense of $0.7 million in both the second quarters of 2019 and 2018, respectively.  The provision for loan losses was an expense of $1.3 million and $1.0 million in the first six months of 2019 and 2018, 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 growth, loan mix, levels of non-performing and classified loans and loan net charge-offs.  The Company recorded loan net charge-offs of $0.003 million and $0.217 million in the second quarters of 2019 and 2018, respectively.  For the first six months of 2019 and 2018, the Company recorded loan net charge-offs of $0.301 million and $0.048 million, respectively.  At June 30, 2019, the allowance for loan losses totaled $25.9 million, or 0.96% of total portfolio loans, compared to $24.9 million, or 0.96% of total portfolio loans, at Dec. 31, 2018. Excluding the remaining TCSB acquired loan balances, the allowance for loan losses was equal to 1.03% and 1.06% of portfolio loans at June 30, 2019 and Dec. 31, 2018, respectively.

Balance Sheet, Liquidity and Capital

Total assets were $3.44 billion at June 30, 2019, an increase of $85.0 million from Dec. 31, 2018.  Loans, excluding loans held for sale, were $2.71 billion at June 30, 2019, compared to $2.58 billion at Dec. 31, 2018.  Deposits totaled $2.98 billion at June 30, 2019, an increase of $65.5 million from Dec. 31, 2018.  The increase in total deposits is primarily due to growth in reciprocal deposits.

Cash and cash equivalents totaled $55.1 million at June 30, 2019, versus $70.2 million at Dec. 31, 2018. Securities available for sale totaled $430.3 million at June 30, 2019, versus $427.9 million at Dec. 31, 2018.

Total shareholders’ equity was $330.8 million at June 30, 2019, or 9.62% of total assets.  Tangible common equity totaled $296.7 million at June 30, 2019, or $13.19 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
 
6/30/2019
   
12/31/2018
   
Well
Capitalized
Minimum
 
Tier 1 capital to average total assets
   
9.50
%
   
9.44
%
   
5.00
%
Tier 1 common equity  to risk-weighted assets
   
11.80
%
   
11.94
%
   
6.50
%
Tier 1 capital to risk-weighted assets
   
11.80
%
   
11.94
%
   
8.00
%
Total capital to risk-weighted assets
   
12.81
%
   
12.94
%
   
10.00
%

Share Repurchase Plan

As previously announced, on Dec. 18, 2018, the Board of Directors of the Company authorized a 2019 share repurchase plan.  Under the terms of the original 2019 share repurchase plan, the Company was authorized to buy back up to 5% of its outstanding common stock.  During the first six months of 2019, the Company completed the repurchase of 5% of its outstanding common shares (1,179,688 shares at a weighted average purchase price of $21.85 per share). On June 18, 2019, the Board of Directors of the Company supplemented the 2019 share repurchase plan and authorized the repurchase of up to 300,000 additional common shares. The 2019 share repurchase plan is authorized to last through Dec. 31, 2019.

3

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 Thursday, July 25, 2019.
 
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/ibcp190725.html.

A playback of the call can be accessed by dialing 1-877-344-7529 (Conference ID # 10132049). The replay will be available through Aug. 1, 2019.
 
About Independent Bank Corporation

Independent Bank Corporation (NASDAQ: IBCP) is a Michigan-based bank holding company with total assets of approximately $3.4 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.

For more information, please visit our Web site at:  IndependentBank.com.

Forward-Looking Statements

This release may contain “forward-looking statements” within the meaning of the U.S. Private Securities Litigation Reform Act of 1995. Any statements that are not historical facts, including statements about our expectations, beliefs, plans, strategies, predictions, forecasts, objectives, or assumptions of future events or performance, may be forward-looking. These statements are often, but not always, made through the use of words or phrases such as “anticipates,” “believes,” “expects,” “can,” “could,” “may,” “predicts,” “potential,” “opportunity,” “should,” “will,” “estimate,” “plans,” “projects,” “continuing,” “ongoing,” “expects,” “seeks,” “intends” and similar words or phrases. Accordingly, these statements involve estimates, known and unknown risks, assumptions, and uncertainties that could cause actual strategies, actions, or results to differ materially from those expressed in them, and are not guarantees  of timing, future results, events, or performance. Because forward-looking statements are necessarily only estimates of future strategies, actions, or results, based on management’s current expectations, assumptions, and estimates on the date hereof, there can be no assurance that actual strategies, actions or results will not differ materially from expectations. Therefore, readers are cautioned not to place undue reliance on such statements.  Factors that could cause or contribute to such differences are changes in general economic, political or industry conditions; changes in monetary and fiscal policies, including the interest rate policies of the Federal Reserve Board; volatility and disruptions in capital and credit markets; the interdependence of financial service companies; changes in regulation or oversight; unfavorable developments concerning credit quality; any future acquisitions or divestitures; the effects of more stringent capital or liquidity requirements; declines or other changes in the businesses or industries of Independent Bank Corporation's customers; the implementation of Independent Bank Corporation's strategies and business models; Independent Bank Corporation's ability to utilize technology to efficiently and effectively develop, market and deliver new products and services; operational difficulties, failure of technology infrastructure or information security incidents; changes in the financial markets, including fluctuations in interest rates and their impact on deposit pricing; competitive product and pricing pressures among financial institutions within Independent Bank Corporation's markets; changes in customer behavior; management's ability to maintain and expand customer relationships; management's ability to retain key officers and employees; the impact of legal and regulatory proceedings or determinations; the effectiveness of methods of reducing risk exposures; the effects of terrorist activities and other hostilities; the effects of catastrophic events; changes in accounting standards and the critical nature of Independent Bank Corporation's accounting policies.
 
Certain risks and important factors that could affect Independent Bank Corporation's future results are identified in its Annual Report on Form 10-K for the year ended December 31, 2018 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

   
June 30,
2019
   
December 31,
2018
 
   
(unaudited)
 
   
(In thousands, except share
 
   
amounts)
 
Assets
 
Cash and due from banks
 
$
34,461
   
$
23,350
 
Interest bearing deposits
   
20,676
     
46,894
 
Cash and Cash Equivalents
   
55,137
     
70,244
 
Interest bearing deposits - time
   
498
     
595
 
Equity securities at fair value
   
-
     
393
 
Securities available for sale
   
430,305
     
427,926
 
Federal Home Loan Bank and Federal Reserve Bank stock, at cost
   
18,359
     
18,359
 
Loans held for sale, carried at fair value
   
62,883
     
44,753
 
Loans held for sale, carried at lower of cost or fair value
   
-
     
41,471
 
Loans
               
Commercial
   
1,175,970
     
1,144,481
 
Mortgage
   
1,086,309
     
1,042,890
 
Installment
   
444,247
     
395,149
 
Total Loans
   
2,706,526
     
2,582,520
 
Allowance for loan losses
   
(25,903
)
   
(24,888
)
Net Loans
   
2,680,623
     
2,557,632
 
Other real estate and repossessed assets
   
1,990
     
1,299
 
Property and equipment, net
   
37,703
     
38,777
 
Bank-owned life insurance
   
55,580
     
55,068
 
Deferred tax assets, net
   
2,746
     
5,779
 
Capitalized mortgage loan servicing rights
   
17,894
     
21,400
 
Other intangibles
   
5,870
     
6,415
 
Goodwill
   
28,300
     
28,300
 
Accrued income and other assets
   
40,414
     
34,870
 
Total Assets
 
$
3,438,302
   
$
3,353,281
 
                 
Liabilities and Shareholders' Equity
 
Deposits
               
Non-interest bearing
 
$
864,481
   
$
879,549
 
Savings and interest-bearing checking
   
1,158,910
     
1,194,865
 
Reciprocal
   
326,326
     
182,072
 
Time
   
384,477
     
385,981
 
Brokered time
   
244,691
     
270,961
 
Total Deposits
   
2,978,885
     
2,913,428
 
Other borrowings
   
41,144
     
25,700
 
Subordinated debentures
   
39,422
     
39,388
 
Accrued expenses and other liabilities
   
48,005
     
35,771
 
Total Liabilities
   
3,107,456
     
3,014,287
 
                 
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: 22,498,776 shares at June 30, 2019 and 23,579,725 shares at December 31, 2018
   
351,894
     
377,372
 
Accumulated deficit
   
(16,617
)
   
(28,270
)
Accumulated other comprehensive loss
   
(4,431
)
   
(10,108
)
Total Shareholders’ Equity
   
330,846
     
338,994
 
Total Liabilities and Shareholders’ Equity
 
$
3,438,302
   
$
3,353,281
 

5

INDEPENDENT BANK CORPORATION AND SUBSIDIARIES
Consolidated Statements of Operations

   
Three Months Ended
   
Six Months Ended
 
   
June 30,
   
March 31,
   
June 30,
   
June 30,
 
   
2019
   
2019
   
2018
   
2019
   
2018
 
   
(unaudited)
 
Interest Income
 
(In thousands, except per share amounts)
 
Interest and fees on loans
 
$
33,836
   
$
32,681
   
$
29,674
   
$
66,517
   
$
53,027
 
Interest on securities
                                       
Taxable
   
3,034
     
3,006
     
2,720
     
6,040
     
5,355
 
Tax-exempt
   
324
     
374
     
444
     
698
     
923
 
Other investments
   
379
     
575
     
265
     
954
     
595
 
Total Interest Income
   
37,573
     
36,636
     
33,103
     
74,209
     
59,900
 
Interest Expense
                                       
Deposits
   
6,021
     
5,681
     
3,209
     
11,702
     
5,496
 
Other borrowings and subordinated debentures
   
796
     
712
     
914
     
1,508
     
1,488
 
Total Interest Expense
   
6,817
     
6,393
     
4,123
     
13,210
     
6,984
 
Net Interest Income
   
30,756
     
30,243
     
28,980
     
60,999
     
52,916
 
Provision for loan losses
   
652
     
664
     
650
     
1,316
     
965
 
Net Interest Income After Provision for Loan Losses
   
30,104
     
29,579
     
28,330
     
59,683
     
51,951
 
Non-interest Income
                                       
Service charges on deposit accounts
   
2,800
     
2,640
     
3,095
     
5,440
     
6,000
 
Interchange income
   
2,604
     
2,355
     
2,504
     
4,959
     
4,750
 
Net gains (losses) on assets
                                       
Mortgage loans
   
4,302
     
3,611
     
3,255
     
7,913
     
5,826
 
Securities
   
-
     
304
     
9
     
304
     
(164
)
Mortgage loan servicing, net
   
(1,907
)
   
(1,215
)
   
1,235
     
(3,122
)
   
3,456
 
Other
   
2,106
     
2,264
     
2,217
     
4,370
     
4,160
 
Total Non-interest Income
   
9,905
     
9,959
     
12,315
     
19,864
     
24,028
 
Non-interest Expense
                                       
Compensation and employee benefits
   
15,931
     
16,351
     
15,869
     
32,282
     
30,337
 
Occupancy, net
   
2,131
     
2,505
     
2,170
     
4,636
     
4,434
 
Data processing
   
2,171
     
2,144
     
2,251
     
4,315
     
4,129
 
Furniture, fixtures and equipment
   
1,006
     
1,029
     
1,019
     
2,035
     
1,986
 
Communications
   
717
     
769
     
704
     
1,486
     
1,384
 
Interchange expense
   
753
     
688
     
661
     
1,441
     
1,259
 
Advertising
   
627
     
672
     
543
     
1,299
     
984
 
Loan and collection
   
628
     
634
     
692
     
1,262
     
1,369
 
Legal and professional
   
371
     
369
     
456
     
740
     
834
 
FDIC deposit insurance
   
342
     
368
     
250
     
710
     
480
 
Credit card and bank service fees
   
97
     
103
     
106
     
200
     
202
 
Net (gains) losses on other real estate and repossessed assets
   
(198
)
   
119
     
(4
)
   
(79
)
   
(294
)
Merger related expenses
   
-
     
-
     
3,082
     
-
     
3,256
 
Other
   
2,016
     
2,239
     
1,962
     
4,255
     
3,536
 
Total Non-interest Expense
   
26,592
     
27,990
     
29,761
     
54,582
     
53,896
 
Income Before Income Tax
   
13,417
     
11,548
     
10,884
     
24,965
     
22,083
 
Income tax expense
   
2,687
     
2,167
     
2,067
     
4,854
     
4,105
 
Net Income
 
$
10,730
   
$
9,381
   
$
8,817
   
$
20,111
   
$
17,978
 
Net Income Per Common Share
                                       
Basic
 
$
0.47
   
$
0.40
   
$
0.37
   
$
0.86
   
$
0.79
 
Diluted
 
$
0.46
   
$
0.39
   
$
0.36
   
$
0.85
   
$
0.78
 

6

INDEPENDENT BANK CORPORATION AND SUBSIDIARIES
Selected Financial Data

   
June 30,
2019
   
March 31,
2019
   
December 31,
2018
   
September 30,
2018
   
June 30,
2018
 
   
(unaudited)
 
   
(Dollars in thousands except per share data)
 
Three Months Ended
                             
Net interest income
 
$
30,756
   
$
30,243
   
$
30,669
   
$
29,697
   
$
28,980
 
Provision for loan losses
   
652
     
664
     
591
     
(53
)
   
650
 
Non-interest income
   
9,905
     
9,959
     
8,951
     
11,836
     
12,315
 
Non-interest expense
   
26,592
     
27,990
     
26,825
     
26,740
     
29,761
 
Income before income tax
   
13,417
     
11,548
     
12,204
     
14,846
     
10,884
 
Income tax expense
   
2,687
     
2,167
     
2,268
     
2,921
     
2,067
 
Net income
 
$
10,730
   
$
9,381
   
$
9,936
   
$
11,925
   
$
8,817
 
                                         
Basic earnings per share
 
$
0.47
   
$
0.40
   
$
0.41
   
$
0.49
   
$
0.37
 
Diluted earnings per share
   
0.46
     
0.39
     
0.41
     
0.49
     
0.36
 
Cash dividend per share
   
0.18
     
0.18
     
0.15
     
0.15
     
0.15
 
                                         
Average shares outstanding
   
23,035,526
     
23,588,313
     
23,988,810
     
24,148,768
     
24,109,322
 
Average diluted shares outstanding
   
23,313,346
     
23,884,744
     
24,339,782
     
24,514,814
     
24,509,963
 
                                         
Performance Ratios
                                       
Return on average assets
   
1.27
%
   
1.13
%
   
1.18
%
   
1.46
%
   
1.12
%
Return on average common equity
   
12.72
     
11.14
     
11.43
     
13.83
     
10.57
 
Efficiency ratio (1)
   
64.57
     
69.27
     
67.11
     
63.63
     
71.14
 
                                         
As a Percent of Average Interest-Earning Assets (1)
                                 
Interest income
   
4.73
%
   
4.70
%
   
4.66
%
   
4.53
%
   
4.49
%
Interest expense
   
0.86
     
0.82
     
0.73
     
0.62
     
0.56
 
Net interest income
   
3.87
     
3.88
     
3.93
     
3.91
     
3.93
 
                                         
Average Balances
                                       
Loans
 
$
2,699,648
   
$
2,621,871
   
$
2,627,614
   
$
2,550,302
   
$
2,449,056
 
Securities available for sale
   
441,523
     
446,734
     
433,903
     
442,949
     
470,427
 
Total earning assets
   
3,191,264
     
3,152,177
     
3,121,640
     
3,038,221
     
2,963,982
 
Total assets
   
3,388,398
     
3,357,003
     
3,327,002
     
3,247,603
     
3,168,196
 
Deposits
   
2,929,885
     
2,909,096
     
2,873,889
     
2,789,969
     
2,701,362
 
Interest bearing liabilities
   
2,155,660
     
2,115,549
     
2,058,720
     
1,986,905
     
1,946,287
 
Shareholders' equity
   
338,254
     
341,592
     
344,779
     
341,998
     
334,626
 
                                         
End of Period
                                       
Capital
                                       
Tangible common equity ratio
   
8.72
%
   
9.26
%
   
9.17
%
   
9.51
%
   
9.41
%
Average equity to average assets
   
9.98
     
10.18
     
10.36
     
10.53
     
10.56
 
Tangible common equity per share of common stock
 
$
13.19
   
$
13.17
   
$
12.90
   
$
12.84
   
$
12.47
 
Total shares outstanding
   
22,498,776
     
23,560,179
     
23,579,725
     
24,150,341
     
24,143,044
 
                                         
Selected Balances
                                       
Loans
 
$
2,706,526
   
$
2,618,795
   
$
2,582,520
   
$
2,562,578
   
$
2,467,317
 
Securities available for sale
   
430,305
     
461,531
     
427,926
     
436,957
     
450,593
 
Total earning assets
   
3,239,247
     
3,180,655
     
3,162,911
     
3,078,083
     
3,023,454
 
Total assets
   
3,438,302
     
3,383,606
     
3,353,281
     
3,297,124
     
3,234,522
 
Deposits
   
2,978,885
     
2,934,225
     
2,913,428
     
2,798,643
     
2,780,516
 
Interest bearing liabilities
   
2,194,970
     
2,141,083
     
2,098,967
     
2,036,770
     
1,988,495
 
Shareholders' equity
   
330,846
     
344,726
     
338,994
     
345,204
     
337,083
 

(1)
Presented on a fully tax equivalent basis assuming a marginal tax rate of 21%.

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
June 30,
   
Six Months Ended
June 30,
 
   
2019
   
2018
   
2019
   
2018
 
   
(Dollars in thousands)
 
Net Interest Margin, Fully Taxable Equivalent ("FTE")
                       
                         
Net interest income
 
$
30,756
   
$
28,980
   
$
60,999
   
$
52,916
 
Add:  taxable equivalent adjustment
   
102
     
132
     
219
     
261
 
Net interest income - taxable equivalent
 
$
30,858
   
$
29,112
   
$
61,218
   
$
53,177
 
Net interest margin (GAAP) (1)
   
3.86
%
   
3.92
%
   
3.86
%
   
3.81
%
Net interest margin (FTE) (1)
   
3.87
%
   
3.93
%
   
3.88
%
   
3.83
%

(1)
Annualized.

Tangible Common Equity Ratio

   
June 30,
2019
   
March 31,
2019
   
December 31,
2018
   
September 30,
2018
   
June 30,
2018
 
   
(Dollars in thousands)
 
Common shareholders' equity
 
$
330,846
   
$
344,726
   
$
338,994
   
$
345,204
   
$
337,083
 
Less:
                                       
Goodwill
   
28,300
     
28,300
     
28,300
     
28,300
     
29,012
 
Other intangibles
   
5,870
     
6,143
     
6,415
     
6,709
     
7,004
 
Tangible common equity
 
$
296,676
   
$
310,283
   
$
304,279
   
$
310,195
   
$
301,067
 
                                         
Total assets
 
$
3,438,302
   
$
3,383,606
   
$
3,353,281
   
$
3,297,124
   
$
3,234,522
 
Less:
                                       
Goodwill
   
28,300
     
28,300
     
28,300
     
28,300
     
29,012
 
Other intangibles
   
5,870
     
6,143
     
6,415
     
6,709
     
7,004
 
Tangible assets
 
$
3,404,132
   
$
3,349,163
   
$
3,318,566
   
$
3,262,115
   
$
3,198,506
 
                                         
Common equity ratio
   
9.62
%
   
10.19
%
   
10.11
%
   
10.47
%
   
10.42
%
Tangible common equity ratio
   
8.72
%
   
9.26
%
   
9.17
%
   
9.51
%
   
9.41
%
                                         
Tangible Common Equity per Share of Common Stock:
                                 
                                         
Common shareholders' equity
 
$
330,846
   
$
344,726
   
$
338,994
   
$
345,204
   
$
337,083
 
Tangible common equity
 
$
296,676
   
$
310,283
   
$
304,279
   
$
310,195
   
$
301,067
 
Shares of common stock outstanding (in thousands)
   
22,499
     
23,560
     
23,580
     
24,150
     
24,143
 
                                         
Common shareholders' equity per share of common stock
 
$
14.70
   
$
14.63
   
$
14.38
   
$
14.29
   
$
13.96
 
Tangible common equity per share of common stock
 
$
13.19
   
$
13.17
   
$
12.90
   
$
12.84
   
$
12.47
 

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.


8


The following information was filed by Independent Bank Corp (IBCP) on Thursday, July 25, 2019 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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