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 THIRD QUARTER RESULTS

GRAND RAPIDS, Mich., Oct. 24, 2019 -
Independent Bank Corporation (NASDAQ: IBCP) reported third quarter 2019 net income of $12.4 million, or $0.55 per diluted share, versus net income of $11.9 million, or $0.49 per diluted share, in the prior-year period.  For the nine months ended Sept. 30, 2019, the Company reported net income of $32.6 million, or $1.40 per diluted share, compared to net income of $29.9 million, or $1.27 per diluted share, in the prior-year period.  The increases in third quarter and year to date 2019 earnings as compared to 2018 primarily reflect an increase in net interest income that was partially offset by increases in non-interest expense and income tax expense, and for the year-to-date period, a decline in non-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 $2.2 million ($0.08 per diluted share, after taxes) and a negative $7.0 million ($0.24 per diluted share, after taxes) for the three- and nine-months ended Sept. 30, 2019, respectively, as compared to positive MSR Changes of $0.6 million ($0.02 per diluted share, after taxes) and $2.6 million ($0.09 per diluted share, after taxes) for the three- and nine-months ended Sept. 30, 2018, respectively.

A reduction in non-interest expense of $0.3 million ($0.01 per diluted share, after taxes) for the three- and nine-months ended Sept. 30, 2019 related to the Company’s use of its Federal Deposit Insurance Corporation (“FDIC”) Small Bank Assessment Credit (the “Assessment Credit”).  After the application of the Assessment Credit against the Company’s June 30, 2019 FDIC deposit insurance expense billing, approximately $0.4 million of Assessment Credit remains available to offset future expense.

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 $0.1 million ($0.003 per diluted share, after taxes) and $3.4 million ($0.11 per diluted share, after taxes) for the three- and nine-months ended Sept. 30, 2018, respectively.

Third quarter 2019 highlights include:


Annualized return on average assets and return on average equity of 1.42% and 14.64%, respectively (these ratios increase to 1.58% and 16.34%, respectively, when excluding the after tax impact of the MSR Changes and the Assessment Credit);

Year-over-year increases in net income and diluted earnings per share of  4.4% and 12.2%, respectively;

A year-over-year increase in quarterly net interest income of $1.2 million, or 4.0%;

1


Total portfolio loan net growth of $15.9 million, or 2.3% annualized (the annualized growth rate increases to 7.7% when excluding the impact of $36.6 million of portfolio mortgage loans moved to held for sale as of Sept. 30, 2019);

Continued strong asset quality metrics; and

The payment of an 18 cent per share dividend on common stock on Aug. 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.  This performance reflects strong mortgage banking revenues, favorable asset quality metrics, and continued loan growth. Excluding the after-tax impacts of the MSR Changes, Assessment Credit and the Merger related expenses, net income and diluted earnings per share increased by 20.5% and 29.8%, respectively, in the third quarter of 2019 as compared to the third quarter of 2018.  As we look ahead to the last quarter of 2019 and beyond, we are focused on building on the momentum generated in the first nine months of the year.”

Operating Results

The Company’s net interest income totaled $30.9 million during the third quarter of 2019, an increase of $1.2 million, or 4.0% from the year-ago period, and up $0.1 million, or 0.4%, from the second quarter of 2019.  The Company’s tax equivalent net interest income as a percent of average interest-earning assets (the “net interest margin”) was 3.76% during the third quarter of 2019, compared to 3.91% in the year-ago period, and 3.87% in the second 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 $3.29 billion in the third quarter of 2019, compared to $3.04 billion in the year ago quarter and $3.19 billion in the second quarter of 2019.  Third 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 nine months of 2019, net interest income totaled $91.9 million, an increase of $9.3 million, or 11.2% from the first nine months of 2018.  The Company’s net interest margin for the first nine months of 2019 was 3.83% compared to 3.86% in 2018.  The increase in net interest income for the first nine months of 2019 is due an increase in average interest-earning assets that was partially offset by a decline in the net interest margin.

The decline in the net interest margin in 2019 as compared to 2018 primarily reflects the impact of lower market interest rates and a flattening of the yield curve.

Non-interest income totaled $12.3 million and $32.1 million, respectively, for the third quarter and first nine months of 2019, compared to $11.8 million and $35.9 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 were $5.7 million and $2.7 million in the third quarters of 2019 and 2018, respectively.  For the first nine months of 2019, net gains on mortgage loans totaled $13.6 million compared to $8.6 million in 2018.  These increases were primarily due to higher mortgage loan origination and sales volumes in 2019 reflecting lower market interest rates, which have increased mortgage loan refinance activity.

Mortgage loan servicing, net, generated a loss of $1.6 million and income of $1.2 million in the third quarters of 2019 and 2018, respectively. For the first nine months of 2019, mortgage loan servicing, net, generated a loss of $4.7 million as compared to income of $4.7 million in 2018. This activity is summarized in the following table:

   
Three Months Ended
   
Nine Months Ended
 
   
9/30/2019
   
9/30/2018
   
9/30/2019
   
9/30/2018
 
Mortgage loan servicing, net:
       
(Dollars in thousands)
       
Revenue, net
 
$
1,583
   
$
1,410
   
$
4,574
   
$
3,974
 
Fair value change due to price
   
(2,163
)
   
610
     
(7,036
)
   
2,586
 
Fair value change due to pay-downs
   
(982
)
   
(808
)
   
(2,222
)
   
(1,892
)
Total
 
$
(1,562
)
 
$
1,212
   
$
(4,684
)
 
$
4,668
 

Non-interest expenses totaled $27.8 million in the third quarter of 2019, compared to $26.7 million in the year-ago period.  For the first nine months of 2019, non-interest expenses totaled $82.4 million compared to $80.6 million in 2018.  These year-over-year increases in non-interest expense are primarily due to higher compensation, health insurance, data processing and interchange costs as well as lower gains on other real estate and repossessed assets.

The Company recorded an income tax expense of $3.1 million and $8.0 million in the third quarter and first nine months of 2019, respectively.  This compares to an income tax expense of $2.9 million and $7.0 million in the third quarter and first nine months of 2018, respectively.  The increase in income tax expense is primarily due to higher pre-tax earnings in 2019.

2

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 Sept. 30, 2019 were 0.04% for commercial loans and 0.35% 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
 
9/30/2019
   
12/31/2018
   
9/30/2018
 
   
(Dollars in thousands)
 
Commercial
 
$
834
   
$
2,220
   
$
2,782
 
Consumer/installment
   
935
     
781
     
756
 
Mortgage
   
5,355
     
6,033
     
5,805
 
Total non-accrual loans
   
7,124
     
9,034
     
9,343
 
Less – government guaranteed loans
   
475
     
460
     
279
 
Total non-performing loans
 
$
6,649
   
$
8,574
   
$
9,064
 
Ratio of non-performing loans to total portfolio loans
   
0.24
%
   
0.33
%
   
0.35
%
Ratio of non-performing assets to total assets
   
0.24
%
   
0.29
%
   
0.32
%
Ratio of the allowance for loan losses to non-performing loans
   
393.26
%
   
290.27
%
   
269.21
%


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

Non-performing loans have decreased $1.9 million from Dec. 31, 2018.  This decrease principally reflects declines in non-performing commercial and mortgage loans due primarily to pay-downs, charge-offs and transfers to other real estate.  Other real estate and repossessed assets totaled $1.8 million at Sept. 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 a credit of $0.3 million and $0.1 million in the third quarters of 2019 and 2018, respectively.  The provision for loan losses was an expense of $1.0 million and $0.9 million in the first nine 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 recoveries of $0.5 million and $1.0 million in the third quarters of 2019 and 2018, respectively.  For the first nine months of 2019 and 2018, the Company recorded loan net recoveries of $0.2 million and $0.9 million, respectively.  At Sept. 30, 2019, the allowance for loan losses totaled $26.1 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 1.02% and 1.06% of portfolio loans at Sept. 30, 2019 and Dec. 31, 2018, respectively.

Balance Sheet, Liquidity and Capital

Total assets were $3.55 billion at Sept. 30, 2019, an increase of $197.6 million from Dec. 31, 2018, primarily reflecting loan growth.  Loans, excluding loans held for sale, were $2.72 billion at Sept. 30, 2019, compared to $2.58 billion at Dec. 31, 2018.  During the third quarter of 2019, approximately $36.6 million of portfolio mortgage loans were transferred to held for sale and were valued at the lower of cost or fair value at Sept. 30, 2019.  The Company expects to securitize/sell these loans on a non-recourse basis in Oct. 2019 and record a gain of approximately $1.1 million upon the completion of this transaction.

Deposits totaled $3.05 billion at Sept. 30, 2019, an increase of $138.9 million from Dec. 31, 2018.  The increase in deposits is primarily due to growth in reciprocal deposits that was partially offset by a decline in brokered time deposits.

Cash and cash equivalents totaled $82.4 million at Sept. 30, 2019, versus $70.2 million at Dec. 31, 2018. Securities available for sale totaled $439.6 million at Sept. 30, 2019, compared to $427.9 million at Dec. 31, 2018.

3

Total shareholders’ equity was $340.2 million at Sept. 30, 2019, or 9.58% of total assets.  Tangible common equity totaled $306.3 million at Sept. 30, 2019, or $13.63 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
 
9/30/2019
   
12/31/2018
   
Well
Capitalized
Minimum
 
Tier 1 capital to average total assets
   
9.43
%
   
9.44
%
   
5.00
%
Tier 1 common equity to risk-weighted assets
   
11.75
%
   
11.94
%
   
6.50
%
Tier 1 capital to risk-weighted assets
   
11.75
%
   
11.94
%
   
8.00
%
Total capital to risk-weighted assets
   
12.76
%
   
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.  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. During the first nine months of 2019, the Company repurchased 1,204,688 shares at a weighted average purchase price of $21.82 per share (including 25,000 shares at a weighted average purchase price of $20.09 per share in the third quarter of 2019).

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, Oct. 24, 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 event site:  https://services.choruscall.com/links/ibcp191024.html.

A playback of the call can be accessed by dialing 1-877-344-7529 (Conference ID # 10134896). The replay will be available through Oct. 31, 2019.
 
About Independent Bank Corporation

Independent Bank Corporation (NASDAQ: IBCP) is a Michigan-based bank holding company with total assets of approximately $3.6 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.

4

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.
 
5

INDEPENDENT BANK CORPORATION AND SUBSIDIARIES
Consolidated Statements of Financial Condition

   
September 30,
2019
   
December 31,
2018
 
   
(unaudited)
 
   
(In thousands, except share
amounts)
 
Assets
 
Cash and due from banks
 
$
38,662
   
$
23,350
 
Interest bearing deposits
   
43,755
     
46,894
 
Cash and Cash Equivalents
   
82,417
     
70,244
 
Interest bearing deposits - time
   
499
     
595
 
Equity securities at fair value
   
-
     
393
 
Securities available for sale
   
439,592
     
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
   
87,358
     
44,753
 
Loans held for sale, carried at lower of cost or fair value
   
36,622
     
41,471
 
Loans
               
Commercial
   
1,189,017
     
1,144,481
 
Mortgage
   
1,070,035
     
1,042,890
 
Installment
   
463,394
     
395,149
 
Total Loans
   
2,722,446
     
2,582,520
 
Allowance for loan losses
   
(26,148
)
   
(24,888
)
Net Loans
   
2,696,298
     
2,557,632
 
Other real estate and repossessed assets
   
1,789
     
1,299
 
Property and equipment, net
   
37,424
     
38,777
 
Bank-owned life insurance
   
55,412
     
55,068
 
Deferred tax assets, net
   
2,773
     
5,779
 
Capitalized mortgage loan servicing rights
   
16,906
     
21,400
 
Other intangibles
   
5,598
     
6,415
 
Goodwill
   
28,300
     
28,300
 
Accrued income and other assets
   
41,490
     
34,870
 
Total Assets
 
$
3,550,837
   
$
3,353,281
 
                 
Liabilities and Shareholders’ Equity
 
Deposits
               
Non-interest bearing
 
$
883,138
   
$
879,549
 
Savings and interest-bearing checking
   
1,178,695
     
1,194,865
 
Reciprocal
   
416,200
     
182,072
 
Time
   
374,579
     
385,981
 
Brokered time
   
199,700
     
270,961
 
Total Deposits
   
3,052,312
     
2,913,428
 
Other borrowings
   
63,974
     
25,700
 
Subordinated debentures
   
39,439
     
39,388
 
Accrued expenses and other liabilities
   
54,867
     
35,771
 
Total Liabilities
   
3,210,592
     
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: 22,480,748 shares at September 30, 2019 and 23,579,725 shares at December 31, 2018
   
351,839
     
377,372
 
Accumulated deficit
   
(8,221
)
   
(28,270
)
Accumulated other comprehensive loss
   
(3,373
)
   
(10,108
)
Total Shareholders’ Equity
   
340,245
     
338,994
 
Total Liabilities and Shareholders’ Equity
 
$
3,550,837
   
$
3,353,281
 

6

INDEPENDENT BANK CORPORATION AND SUBSIDIARIES
Consolidated Statements of Operations

   
Three Months Ended
   
Nine Months Ended
 
   
September 30,
2019
   
June 30,
2019
   
September 30,
2018
   
September 30,
 
 
2019
   
2018
 
   
(unaudited)
 
Interest Income
 
(In thousands, except per share amounts)
 
Interest and fees on loans
 
$
34,226
   
$
33,836
   
$
31,000
   
$
100,743
   
$
84,027
 
Interest on securities
                                       
Taxable
   
2,771
     
3,034
     
2,737
     
8,811
     
8,092
 
Tax-exempt
   
319
     
324
     
412
     
1,017
     
1,335
 
Other investments
   
495
     
379
     
303
     
1,449
     
898
 
Total Interest Income
   
37,811
     
37,573
     
34,452
     
112,020
     
94,352
 
Interest Expense
                                       
Deposits
   
6,236
     
6,021
     
3,976
     
17,938
     
9,472
 
Other borrowings and subordinated debentures
   
703
     
796
     
779
     
2,211
     
2,267
 
Total Interest Expense
   
6,939
     
6,817
     
4,755
     
20,149
     
11,739
 
Net Interest Income
   
30,872
     
30,756
     
29,697
     
91,871
     
82,613
 
Provision for loan losses
   
(271
)
   
652
     
(53
)
   
1,045
     
912
 
Net Interest Income After Provision for Loan Losses
   
31,143
     
30,104
     
29,750
     
90,826
     
81,701
 
Non-interest Income
                                       
Service charges on deposit accounts
   
2,883
     
2,800
     
3,166
     
8,323
     
9,166
 
Interchange income
   
2,785
     
2,604
     
2,486
     
7,744
     
7,236
 
Net gains (losses) on assets
                                       
Mortgage loans
   
5,677
     
4,302
     
2,745
     
13,590
     
8,571
 
Securities
   
-
     
-
     
93
     
304
     
(71
)
Mortgage loan servicing, net
   
(1,562
)
   
(1,907
)
   
1,212
     
(4,684
)
   
4,668
 
Other
   
2,492
     
2,106
     
2,134
     
6,862
     
6,294
 
Total Non-interest Income
   
12,275
     
9,905
     
11,836
     
32,139
     
35,864
 
Non-interest Expense
                                       
Compensation and employee benefits
   
16,673
     
15,931
     
16,169
     
48,955
     
46,506
 
Occupancy, net
   
2,161
     
2,131
     
2,233
     
6,797
     
6,667
 
Data processing
   
2,282
     
2,171
     
2,051
     
6,597
     
6,180
 
Furniture, fixtures and equipment
   
1,023
     
1,006
     
1,043
     
3,058
     
3,029
 
Interchange expense
   
891
     
753
     
715
     
2,332
     
1,974
 
Communications
   
733
     
717
     
727
     
2,219
     
2,111
 
Loan and collection
   
714
     
628
     
531
     
1,976
     
1,900
 
Advertising
   
636
     
627
     
594
     
1,935
     
1,578
 
Legal and professional
   
541
     
371
     
477
     
1,281
     
1,311
 
FDIC deposit insurance
   
13
     
342
     
270
     
723
     
750
 
Credit card and bank service fees
   
100
     
97
     
108
     
300
     
310
 
Net (gains) losses on other real estate and repossessed assets
   
52
     
(198
)
   
(325
)
   
(27
)
   
(619
)
Merger related expenses
   
-
     
-
     
98
     
-
     
3,354
 
Other
   
2,029
     
2,016
     
2,049
     
6,284
     
5,585
 
Total Non-interest Expense
   
27,848
     
26,592
     
26,740
     
82,430
     
80,636
 
Income Before Income Tax
   
15,570
     
13,417
     
14,846
     
40,535
     
36,929
 
Income tax expense
   
3,125
     
2,687
     
2,921
     
7,979
     
7,026
 
Net Income
 
$
12,445
   
$
10,730
   
$
11,925
   
$
32,556
   
$
29,903
 
Net Income Per Common Share
                                       
Basic
 
$
0.55
   
$
0.47
   
$
0.49
   
$
1.41
   
$
1.29
 
Diluted
 
$
0.55
   
$
0.46
   
$
0.49
   
$
1.40
   
$
1.27
 

7

INDEPENDENT BANK CORPORATION AND SUBSIDIARIES
Selected Financial Data

   
September 30,
2019
   
June 30,
2019
   
March 31,
2019
   
December 31,
2018
   
September 30,
2018
 
   
(unaudited)
 
   
(Dollars in thousands except per share data)
 
Three Months Ended
                             
Net interest income
 
$
30,872
   
$
30,756
   
$
30,243
   
$
30,669
   
$
29,697
 
Provision for loan losses
   
(271
)
   
652
     
664
     
591
     
(53
)
Non-interest income
   
12,275
     
9,905
     
9,959
     
8,951
     
11,836
 
Non-interest expense
   
27,848
     
26,592
     
27,990
     
26,825
     
26,740
 
Income before income tax
   
15,570
     
13,417
     
11,548
     
12,204
     
14,846
 
Income tax expense
   
3,125
     
2,687
     
2,167
     
2,268
     
2,921
 
Net income
 
$
12,445
   
$
10,730
   
$
9,381
   
$
9,936
   
$
11,925
 
                                         
Basic earnings per share
 
$
0.55
   
$
0.47
   
$
0.40
   
$
0.41
   
$
0.49
 
Diluted earnings per share
   
0.55
     
0.46
     
0.39
     
0.41
     
0.49
 
Cash dividend per share
   
0.18
     
0.18
     
0.18
     
0.15
     
0.15
 
                                         
Average shares outstanding
   
22,486,041
     
23,035,526
     
23,588,313
     
23,988,810
     
24,148,768
 
Average diluted shares outstanding
   
22,769,572
     
23,313,346
     
23,884,744
     
24,339,782
     
24,514,814
 
 
                                       
Performance Ratios
                                       
Return on average assets
   
1.42
%
   
1.27
%
   
1.13
%
   
1.18
%
   
1.46
%
Return on average common equity
   
14.64
     
12.72
     
11.14
     
11.43
     
13.83
 
Efficiency ratio (1)
   
63.76
     
64.57
     
69.27
     
67.11
     
63.63
 
                                         
As a Percent of Average Interest-Earning Assets (1)
                                 
Interest income
   
4.60
%
   
4.73
%
   
4.70
%
   
4.66
%
   
4.53
%
Interest expense
   
0.84
     
0.86
     
0.82
     
0.73
     
0.62
 
Net interest income
   
3.76
     
3.87
     
3.88
     
3.93
     
3.91
 
                                         
Average Balances
                                       
Loans
 
$
2,786,544
   
$
2,699,648
   
$
2,621,871
   
$
2,627,614
   
$
2,550,302
 
Securities available for sale
   
423,255
     
441,523
     
446,734
     
433,903
     
442,949
 
Total earning assets
   
3,285,081
     
3,191,264
     
3,152,177
     
3,121,640
     
3,038,221
 
Total assets
   
3,483,296
     
3,388,398
     
3,357,003
     
3,327,002
     
3,247,603
 
Deposits
   
3,023,334
     
2,929,885
     
2,909,096
     
2,873,889
     
2,789,969
 
Interest bearing liabilities
   
2,219,133
     
2,155,660
     
2,115,549
     
2,058,720
     
1,986,905
 
Shareholders’ equity
   
337,162
     
338,254
     
341,592
     
344,779
     
341,998
 
                                         
End of Period
                                       
Capital
                                       
Tangible common equity ratio
   
8.71
%
   
8.72
%
   
9.26
%
   
9.17
%
   
9.51
%
Average equity to average assets
   
9.68
     
9.98
     
10.18
     
10.36
     
10.53
 
Tangible common equity per share
                                       
of common stock
 
$
13.63
   
$
13.19
   
$
13.17
   
$
12.90
   
$
12.84
 
Total shares outstanding
   
22,480,748
     
22,498,776
     
23,560,179
     
23,579,725
     
24,150,341
 
                                         
Selected Balances
                                       
Loans
 
$
2,722,446
   
$
2,706,526
   
$
2,618,795
   
$
2,582,520
   
$
2,562,578
 
Securities available for sale
   
439,592
     
430,305
     
461,531
     
427,926
     
436,957
 
Total earning assets
   
3,348,631
     
3,239,247
     
3,180,655
     
3,162,911
     
3,078,083
 
Total assets
   
3,550,837
     
3,438,302
     
3,383,606
     
3,353,281
     
3,297,124
 
Deposits
   
3,052,312
     
2,978,885
     
2,934,225
     
2,913,428
     
2,798,643
 
Interest bearing liabilities
   
2,272,587
     
2,194,970
     
2,141,083
     
2,098,967
     
2,036,770
 
Shareholders’ equity
   
340,245
     
330,846
     
344,726
     
338,994
     
345,204
 

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

8

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
September 30,
   
Nine Months Ended
September 30,
 
   
2019
   
2018
   
2019
   
2018
 
   
(Dollars in thousands)
 
Net Interest Margin, Fully Taxable Equivalent (“FTE”)
                       
                         
Net interest income
 
$
30,872
   
$
29,697
   
$
91,871
   
$
82,613
 
Add:  taxable equivalent adjustment
   
100
     
123
     
319
     
384
 
Net interest income - taxable equivalent
 
$
30,972
   
$
29,820
   
$
92,190
   
$
82,997
 
Net interest margin (GAAP) (1)
   
3.74
%
   
3.88
%
   
3.82
%
   
3.84
%
Net interest margin (FTE) (1)
   
3.76
%
   
3.91
%
   
3.83
%
   
3.86
%

(1)
Annualized.

Tangible Common Equity Ratio

   
September 30,
2019
   
June 30,
2019
   
March 31,
2019
   
December 31,
2018
   
September 30,
2018
 
   
(Dollars in thousands)
 
Common shareholders’ equity
 
$
340,245
   
$
330,846
   
$
344,726
   
$
338,994
   
$
345,204
 
Less:
                                       
Goodwill
   
28,300
     
28,300
     
28,300
     
28,300
     
28,300
 
Other intangibles
   
5,598
     
5,870
     
6,143
     
6,415
     
6,709
 
Tangible common equity
 
$
306,347
   
$
296,676
   
$
310,283
   
$
304,279
   
$
310,195
 
                                         
Total assets
 
$
3,550,837
   
$
3,438,302
   
$
3,383,606
   
$
3,353,281
   
$
3,297,124
 
Less:
                                       
Goodwill
   
28,300
     
28,300
     
28,300
     
28,300
     
28,300
 
Other intangibles
   
5,598
     
5,870
     
6,143
     
6,415
     
6,709
 
Tangible assets
 
$
3,516,939
   
$
3,404,132
   
$
3,349,163
   
$
3,318,566
   
$
3,262,115
 
                                         
Common equity ratio
   
9.58
%
   
9.62
%
   
10.19
%
   
10.11
%
   
10.47
%
Tangible common equity ratio
   
8.71
%
   
8.72
%
   
9.26
%
   
9.17
%
   
9.51
%
                                         
Tangible Common Equity per Share of Common Stock:
                                 
                                         
Common shareholders’ equity
 
$
340,245
   
$
330,846
   
$
344,726
   
$
338,994
   
$
345,204
 
Tangible common equity
 
$
306,347
   
$
296,676
   
$
310,283
   
$
304,279
   
$
310,195
 
Shares of common stock outstanding (in thousands)
   
22,481
     
22,499
     
23,560
     
23,580
     
24,150
 
                                         
Common shareholders’ equity per share of common stock
 
$
15.13
   
$
14.70
   
$
14.63
   
$
14.38
   
$
14.29
 
Tangible common equity per share of common stock
 
$
13.63
   
$
13.19
   
$
13.17
   
$
12.90
   
$
12.84
 

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.


9


The following information was filed by Independent Bank Corp (IBCP) on Thursday, October 24, 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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