In This Article:
Fourth Quarter Highlights
Highlights for the fourth quarter of 2024 include:
-
An increase in net interest income of $1.0 million (2.4%) over the third quarter of 2024;
-
A net interest margin of 3.45% (eight basis point increase from the linked quarter)
-
A return on average assets and a return on average equity of 1.39% and 16.31%, respectively;
-
Net growth in loans of $96.5 million (or 9.7% annualized) from September 30, 2024; and
-
The payment of a 24 cent per share dividend on common stock on November 15, 2024.
GRAND RAPIDS, Mich., Jan. 23, 2025 (GLOBE NEWSWIRE) -- Independent Bank Corporation (NASDAQ: IBCP) reported fourth quarter 2024 net income of $18.5 million, or $0.87 per diluted share, versus net income of $13.7 million, or $0.65 per diluted share, in the prior-year period. For the year ended December 31, 2024, the Company reported net income of $66.8 million, or $3.16 per diluted share, compared to net income of $59.1 million, or $2.79 per diluted share, in 2023.
William B. (“Brad”) Kessel, the President and Chief Executive Officer of Independent Bank Corporation, commented: “Our fourth-quarter performance marked the culmination of another remarkable year, with our organization excelling on the fundamentals. I am especially pleased to report a notable 10% annualized growth rate in our loan portfolio for the fourth quarter of 2024, driven by an impressive 24% annualized growth rate in our commercial loan portfolio. This strong performance enabled us to achieve a $1 million increase in net interest income for the linked quarter, contributing to a healthy net interest margin of 3.45%. Our credit metrics remain outstanding, with watch credits and non-performing assets near historic lows. I am incredibly proud of our team's dedication and efforts throughout 2024, which translated into exceptional full-year results. We achieved balanced growth on both sides of the balance sheet, with total loan growth of 7% and core deposit growth of 5%. For the year, we delivered a return on average assets (ROAA) of 1.27%, a return on average equity (ROAE) of 15.66%, earnings per share (EPS) growth of 13%, and 13% growth in tangible book value per share (TBVPS). Looking ahead to 2025, we remain optimistic about sustaining these growth trends. Our confidence is bolstered by a robust commercial loan pipeline, the proven track record of our core team of professionals, and our on-going strategic initiative to attract and integrate talented bankers into our organization. Additionally, I am pleased our Board of Directors approved an 8% increase in our quarterly dividend in January, 2025 marking the twelfth consecutive annual increase for our shareholders.”
Significant items impacting comparable 2024 and 2023 results include the following:
-
Changes in the fair value due to price of capitalized mortgage loan servicing rights (the “MSR Changes”) of $6.5 million ($0.24 per diluted share, after taxes) and $4.5 million ($0.17 per diluted share, after taxes) for the three-month and full-year ended December 31, 2024, respectively, as compared to $(3.6) million ($(0.14) per diluted share, after taxes) and $(0.3) million ($(0.01) per diluted share, after taxes) for the three-months and full-year ended December 31, 2023, respectively.
-
The provision for credit losses was an expense of $2.2 million ($0.08 per diluted share, after taxes) and expense of $4.5 million ($0.17 per diluted share, after tax) in the fourth quarter and full year ended December 31, 2024, respectively, as compared to a credit of $(0.6) million ($(0.02) per diluted share, after taxes) and expense of $6.2 million ($0.23 per diluted share, after tax) in the fourth quarter and full year ended December 31, 2023, respectively.
Operating Results
The Company’s net interest income totaled $42.9 million during the fourth quarter of 2024, an increase of $2.7 million, or 6.8% from the year-ago period, and up $1.0 million, or 2.4%, from the third quarter of 2024. The Company’s tax equivalent net interest income as a percent of average interest-earning assets (the “net interest margin”) was 3.45% during the fourth quarter of 2024, compared to 3.26% in the year-ago period, and 3.37% in the third quarter of 2024. The year-over-year quarterly increase in net interest income was due to an increase in the net interest margin and an increase in average earnings assets. Average interest-earning assets were $5.01 billion in the fourth quarter of 2024, compared to $4.93 billion in the year ago quarter and $4.99 billion in the third quarter of 2024.
For the year ended December 31, 2024, net interest income totaled $166.2 million, an increase of $9.9 million, or 6.3% from the prior year ended December 31, 2023. The Company’s net interest margin for the year ended December 31, 2024 was 3.38% compared to 3.26% in 2023. The increase in net interest income for the year ended December 31, 2024 compared to 2023 reflects an increase in average interest- earning assets as well as an increase in the net interest margin.
Non-interest income totaled $19.1 million and $56.4 million, respectively, for the fourth quarter and full year of 2024, compared to $9.1 million and $50.7 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 in the fourth quarters of 2024 and 2023, were approximately $1.7 million and $2.0 million, respectively. The decrease in net gains on mortgage loans was due to lower profit margins on mortgage loan sales that was partially offset by an increase in the volume of mortgage loans sold. For the full year of 2024, net gains on mortgage loans totaled $6.6 million compared to $7.4 million in 2023. The decrease in net gains on mortgage loans was due to a combination of a lower loan sale margin on mortgage loan sales and a decrease in the volume of mortgage loans sold.
Mortgage loan servicing, net, generated a gain of $7.8 million and a loss of $2.4 million in the fourth quarters of 2024 and 2023, respectively. For the full year of 2024 and 2023, mortgage loan servicing, net, generated income of $9.4 million and $4.6 million, respectively. The significant variances in mortgage loan servicing, net is primarily due to changes in the fair value of capitalized mortgage loan servicing rights attributed to an increase in interest rates that resulted in a decrease in prepayment speeds and a higher earnings rate on escrow deposits. Mortgage loan servicing, net activity is summarized in the following table:
|
| Three months ended |
| Twelve months ended | ||||||||||||
|
| 12/31/2024 |
| 12/31/2023 |
| 12/31/2024 |
| 12/31/2023 | ||||||||
|
| (In thousands) | ||||||||||||||
| Mortgage loan servicing, net: |
|
|
|
|
|
|
| ||||||||
| Revenue, net | $ | 2,233 |
|
| $ | 2,216 |
|
| $ | 8,914 |
|
| $ | 8,828 |
|
| Fair value change due to price |
| 6,519 |
|
|
| (3,644 | ) |
|
| 4,540 |
|
|
| (280 | ) |
| Fair value change due to pay-downs |
| (991 | ) |
|
| (1,014 | ) |
|
| (4,007 | ) |
|
| (3,922 | ) |
| Total | $ | 7,761 |
|
| $ | (2,442 | ) |
| $ | 9,447 |
|
| $ | 4,626 |
|
|
| |||||||||||||||
On December 5, 2024 the company executed a letter of intent to sell approximately $971 million (27.8% of total servicing portfolio) of mortgage servicing rights to a third party. This sale represents approximately $13.5 million (27.4%) of the total capitalized mortgage loan servicing right asset. This transaction is expected to close in the first quarter of 2025. There was no financial impact in the fourth quarter of 2024 related to the execution of this letter of intent.
Non-interest expenses totaled $37.0 million in the fourth quarter of 2024, compared to $31.9 million in the year-ago period. For the full year of 2024, non-interest expenses totaled $135.1 million versus $127.1 million in 2023. The increase is primarily due to higher incentive based compensation attributed to higher expected payout levels, salary increases related to adjustments made at the beginning of the year as well as additions to the commercial lending team. The increase in data processing is primarily due to core data processor annual asset growth and CPI related cost increases as well as new solutions implemented during this time frame.
The Company recorded an income tax expense of $4.3 million and $16.3 million in the fourth quarter and full year of 2024, respectively. This compares to an income tax expense of $4.2 million and $14.6 million in the fourth quarter and full year of 2023, respectively.
Asset Quality
A breakdown of non-performing loans by loan type is as follows:
|
| 12/31/2024 |
| 12/31/2023 |
| 12/31/2022 | ||||||
| Loan Type | (Dollars in thousands) | ||||||||||
| Commercial | $ | 54 |
|
| $ | 28 |
|
| $ | 38 |
|
| Mortgage |
| 7,005 |
|
|
| 6,425 |
|
|
| 4,745 |
|
| Installment |
| 733 |
|
|
| 970 |
|
|
| 598 |
|
| Sub total |
| 7,792 |
|
|
| 7,423 |
|
|
| 5,381 |
|
| Less - government guaranteed loans |
| 1,790 |
|
|
| 2,191 |
|
|
| 1,660 |
|
| Total non-performing loans | $ | 6,002 |
|
| $ | 5,232 |
|
| $ | 3,721 |
|
| Ratio of non-performing loans to total portfolio loans |
| 0.15 | % |
|
| 0.14 | % |
|
| 0.11 | % |
| Ratio of non-performing assets to total assets |
| 0.13 | % |
|
| 0.11 | % |
|
| 0.08 | % |
| Ratio of allowance for credit losses to total non-performing loans |
| 989.32 | % |
|
| 1044.69 | % |
|
| 1409.16 | % |
|
| |||||||||||
The provision for credit losses was an expense of $2.2 million and a credit of $0.6 million in the fourth quarters of 2024 and 2023, respectively. The provision for credit losses was an expense of $4.5 million and $6.2 million in the full year of 2024 and 2023, respectively. The quarterly provision for credit losses in 2024, was primarily impacted by the growth in commercial loans that was partially offset by a decrease in allocation rates due to subjective factors. The Company recorded loan net charge-offs of $0.3 million and $0.2 million in the fourth quarters of 2024 and 2023, respectively. At December 31, 2024, the allowance for credit losses totaled $59.4 million, or 1.47% of total portfolio loans compared to $54.7 million, or 1.44% of total portfolio loans at December 31, 2023.
Balance Sheet, Liquidity and Capital
Total assets were $5.34 billion at December 31, 2024, an increase of $74.4 million from December 31, 2023. Loans, excluding loans held for sale, were $4.04 billion at December 31, 2024, compared to $3.79 billion at December 31, 2023. This increase is primarily due to growth in commercial and mortgage loans that were partially offset by a decrease in installment loans. Deposits totaled $4.65 billion at December 31, 2024, an increase of $31.2 million from December 31, 2023. This increase is primarily due to growth in savings and interest-bearing checking, reciprocal, and time deposit account balances that were partially offset by decreases in non-interest bearing and brokered time deposits.
Cash and cash equivalents totaled $119.9 million at December 31, 2024, versus $169.8 million at December 31, 2023. Securities available for sale (“AFS”) totaled $559.2 million at December 31, 2024, versus $679.4 million at December 31, 2023.
Total shareholders’ equity was $454.7 million at December 31, 2024, or 8.52% of total assets compared to $404.4 million or 7.68% at December 31, 2023. Tangible common equity totaled $424.9 million at December 31, 2024, or $20.33 per share compared to $374.1 million or $17.96 per share at December 31, 2023. The increase in shareholder equity as well as tangible common equity are primarily the result of earnings retention and a decline in accumulated other comprehensive loss related to unrealized losses on securities available for sale.
The Company’s wholly owned subsidiary, Independent Bank, remains significantly above “well capitalized” for regulatory purposes with the following ratios:
| Regulatory Capital Ratios | 12/31/2024 |
| 12/31/2023 |
| Well | |||
|
|
|
|
|
|
| |||
| Tier 1 capital to average total assets | 9.58 | % |
| 8.80 | % |
| 5.00 | % |
| Tier 1 common equity to risk-weighted assets | 11.74 | % |
| 11.21 | % |
| 6.50 | % |
| Tier 1 capital to risk-weighted assets | 11.74 | % |
| 11.21 | % |
| 8.00 | % |
| Total capital to risk-weighted assets | 12.99 | % |
| 12.46 | % |
| 10.00 | % |
|
| ||||||||
At December 31, 2024, in addition to liquidity available from our normal operating, funding, and investing activities, we had unused credit lines with the FHLB and FRB of approximately $1.08 billion and $501.8 million, respectively. We also had approximately $517.2 million in fair value of unpledged securities AFS and HTM at December 31, 2024 which could be pledged for an estimated additional borrowing capacity at the FHLB and FRB of approximately $483.8 million.
Share Repurchase Plan
On December 17, 2024, the Board of Directors of the Company authorized the 2025 share repurchase plan. Under the terms of the 2025 share repurchase plan, the Company is authorized to purchase up to 1,100,000 shares, or approximately 5% of its then outstanding common stock. The repurchase plan is authorized to last through December 31, 2025. The Company did not repurchase any shares of common stock during 2024.
Earnings Conference Call
Brad Kessel, President and CEO, Gavin A. Mohr, CFO and Joel Rahn, EVP – Commercial Banking will review the quarterly results in a conference call for investors and analysts beginning at 11:00 am ET on Thursday, January 23, 2025.
To participate in the live conference call, please dial 1-833-470-1428 (Access Code # 213949). Also, the conference call will be accessible through an audio webcast with user-controlled slides via the following site/URL: https://events.q4inc.com/attendee/519785754.
A playback of the call can be accessed by dialing 1-866-813-9403 (Access Code # 178534). The replay will be available through January 30, 2025.
About Independent Bank Corporation
Independent Bank Corporation (NASDAQ: IBCP) is a Michigan-based bank holding company with total assets of $5.3 billion. Founded as First National Bank of Ionia in 1864, Independent Bank Corporation operates a branch network across Michigan's Lower Peninsula through one state-chartered bank subsidiary. This subsidiary (Independent Bank) provides a full range of financial services, including commercial banking, mortgage lending, investments and insurance. Independent Bank Corporation is committed to providing exceptional personal service and value to its customers, stockholders and the communities it serves.
For more information, please visit our Web site at: IndependentBank.com.
Forward-Looking Statements
This presentation contains forward-looking statements, which are any statements or information that are not historical facts. These forward-looking statements include statements about our anticipated future revenue and expenses and our future plans and prospects.
Forward-looking statements involve inherent risks and uncertainties, and important factors could cause actual results to differ materially from those anticipated. For example, deterioration in general business and economic conditions or turbulence in domestic or global financial markets could adversely affect our revenues and the values of our assets and liabilities, reduce the availability of funding to us, lead to a tightening of credit, and increase stock price volatility. Our results could also be adversely affected by changes in interest rates; increases in unemployment rates; deterioration in the credit quality of our loan portfolios or in the value of the collateral securing those loans; deterioration in the value of our investment securities; legal and regulatory developments; changes in customer behavior and preferences; breaches in data security; and management’s ability to effectively manage the multitude of risks facing our business. Key risk factors that could affect our future results are described in more detail in our Annual Report on Form 10-K for the year ended December 31, 2023 and the other reports we file with the SEC, including under the heading “Risk Factors.” Investors should not place undue reliance on forward-looking statements as a prediction of our future results.
Any forward-looking statement speaks only as of the date on which it is made, and we undertake no obligation to update any forward-looking statement, whether as a result of new information, future events, or otherwise.
| INDEPENDENT BANK CORPORATION AND SUBSIDIARIES | ||||||||
|
| ||||||||
|
|
| December 31, | ||||||
|
|
|
| 2024 |
|
|
| 2023 |
|
|
|
| (unaudited) | ||||||
|
|
| (In thousands, except share | ||||||
| Assets |
|
|
|
| ||||
| Cash and due from banks |
| $ | 56,984 |
|
| $ | 68,208 |
|
| Interest bearing deposits |
|
| 62,898 |
|
|
| 101,573 |
|
| Cash and Cash Equivalents |
|
| 119,882 |
|
|
| 169,781 |
|
| Securities available for sale |
|
| 559,182 |
|
|
| 679,350 |
|
| Securities held to maturity (fair value of $301,860 at December 31, 2024 and $318,606 at December 31, 2023) |
|
| 339,436 |
|
|
| 353,988 |
|
| Federal Home Loan Bank and Federal Reserve Bank stock, at cost |
|
| 16,099 |
|
|
| 16,821 |
|
| Loans held for sale, carried at fair value |
|
| 7,643 |
|
|
| 12,063 |
|
| Loans |
|
|
|
| ||||
| Commercial |
|
| 1,937,364 |
|
|
| 1,679,731 |
|
| Mortgage |
|
| 1,516,726 |
|
|
| 1,485,872 |
|
| Installment |
|
| 584,735 |
|
|
| 625,298 |
|
| Total Loans |
|
| 4,038,825 |
|
|
| 3,790,901 |
|
| Allowance for credit losses |
|
| (59,379 | ) |
|
| (54,658 | ) |
| Net Loans |
|
| 3,979,446 |
|
|
| 3,736,243 |
|
| Other real estate and repossessed assets, net |
|
| 938 |
|
|
| 569 |
|
| Property and equipment, net |
|
| 37,492 |
|
|
| 35,523 |
|
| Bank-owned life insurance |
|
| 53,855 |
|
|
| 54,341 |
|
| Capitalized mortgage loan servicing rights, carried at fair value |
|
| 46,796 |
|
|
| 42,243 |
|
| Other intangibles |
|
| 1,488 |
|
|
| 2,004 |
|
| Goodwill |
|
| 28,300 |
|
|
| 28,300 |
|
| Accrued income and other assets |
|
| 147,547 |
|
|
| 132,500 |
|
| Total Assets |
| $ | 5,338,104 |
|
| $ | 5,263,726 |
|
| Liabilities and Shareholders’ Equity |
|
|
|
| ||||
| Deposits |
|
|
|
| ||||
| Non-interest bearing |
| $ | 1,013,647 |
|
| $ | 1,076,093 |
|
| Savings and interest-bearing checking |
|
| 1,995,314 |
|
|
| 1,905,701 |
|
| Reciprocal |
|
| 907,031 |
|
|
| 832,020 |
|
| Time |
|
| 628,285 |
|
|
| 524,325 |
|
| Brokered time |
|
| 109,811 |
|
|
| 284,740 |
|
| Total Deposits |
|
| 4,654,088 |
|
|
| 4,622,879 |
|
| Other borrowings |
|
| 45,009 |
|
|
| 50,026 |
|
| Subordinated debt |
|
| 39,586 |
|
|
| 39,510 |
|
| Subordinated debentures |
|
| 39,796 |
|
|
| 39,728 |
|
| Accrued expenses and other liabilities |
|
| 104,939 |
|
|
| 107,134 |
|
| Total Liabilities |
|
| 4,883,418 |
|
|
| 4,859,277 |
|
| Shareholders’ Equity |
|
|
|
| ||||
| Preferred stock, no par value, 200,000 shares authorized; none issued or outstanding |
|
| — |
|
|
| — |
|
| Common stock, no par value, 500,000,000 shares authorized; issued and outstanding: 20,895,714 shares at December 31, 2024 and 20,835,633 shares at December 31, 2023 |
|
| 318,777 |
|
|
| 317,483 |
|
| Retained earnings |
|
| 205,853 |
|
|
| 159,108 |
|
| Accumulated other comprehensive loss |
|
| (69,944 | ) |
|
| (72,142 | ) |
| Total Shareholders’ Equity |
|
| 454,686 |
|
|
| 404,449 |
|
| Total Liabilities and Shareholders’ Equity |
| $ | 5,338,104 |
|
| $ | 5,263,726 |
|
|
| ||||||||
| INDEPENDENT BANK CORPORATION AND SUBSIDIARIES | |||||||||||||||||||||
|
| |||||||||||||||||||||
|
| |||||||||||||||||||||
|
|
| Three Months Ended |
| Twelve Months Ended |
| ||||||||||||||||
|
|
|
| December 31, |
|
|
| September 30, |
|
|
| December 31, |
|
|
| December 31, |
|
| ||||
|
|
|
|
|
|
|
|
|
|
|
|
| 2024 |
|
|
| 2023 |
|
| |||
|
|
| (unaudited) |
| ||||||||||||||||||
| INTEREST INCOME |
| (In thousands, except per share amounts) |
| ||||||||||||||||||
| Interest and fees on loans |
| $ | 58,346 |
|
| $ | 58,410 |
|
| $ | 54,333 |
|
| $ | 228,585 |
|
| $ | 197,725 |
|
|
| Interest on securities |
|
|
|
|
|
|
|
|
|
|
| ||||||||||
| Taxable |
|
| 4,417 |
|
|
| 4,502 |
|
|
| 5,646 |
|
|
| 18,883 |
|
|
| 23,314 |
|
|
| Tax-exempt |
|
| 2,905 |
|
|
| 3,404 |
|
|
| 3,434 |
|
|
| 13,100 |
|
|
| 13,209 |
|
|
| Other investments |
|
| 1,310 |
|
|
| 2,018 |
|
|
| 1,948 |
|
|
| 6,208 |
|
|
| 5,429 |
|
|
| Total Interest Income |
|
| 66,978 |
|
|
| 68,334 |
|
|
| 65,361 |
|
|
| 266,776 |
|
|
| 239,677 |
|
|
| INTEREST EXPENSE |
|
|
|
|
|
|
|
|
|
|
| ||||||||||
| Deposits |
|
| 22,546 |
|
|
| 24,462 |
|
|
| 23,111 |
|
|
| 92,694 |
|
|
| 75,075 |
|
|
| Other borrowings and subordinated debt and debentures |
|
| 1,581 |
|
|
| 2,018 |
|
|
| 2,139 |
|
|
| 7,834 |
|
|
| 8,273 |
|
|
| Total Interest Expense |
|
| 24,127 |
|
|
| 26,480 |
|
|
| 25,250 |
|
|
| 100,528 |
|
|
| 83,348 |
|
|
| Net Interest Income |
|
| 42,851 |
|
|
| 41,854 |
|
|
| 40,111 |
|
|
| 166,248 |
|
|
| 156,329 |
|
|
| Provision for credit losses |
|
| 2,217 |
|
|
| 1,488 |
|
|
| (617 | ) |
|
| 4,468 |
|
|
| 6,210 |
|
|
| Net Interest Income After Provision for Credit Losses |
|
| 40,634 |
|
|
| 40,366 |
|
|
| 40,728 |
|
|
| 161,780 |
|
|
| 150,119 |
|
|
| NON-INTEREST INCOME |
|
|
|
|
|
|
|
|
|
|
| ||||||||||
| Interchange income |
|
| 3,294 |
|
|
| 4,146 |
|
|
| 3,336 |
|
|
| 13,992 |
|
|
| 13,996 |
|
|
| Service charges on deposit accounts |
|
| 2,976 |
|
|
| 3,085 |
|
|
| 3,061 |
|
|
| 11,870 |
|
|
| 12,361 |
|
|
| Net gains (losses) on assets |
|
|
|
|
|
|
|
|
|
|
| ||||||||||
| Mortgage loans |
|
| 1,705 |
|
|
| 2,177 |
|
|
| 1,961 |
|
|
| 6,579 |
|
|
| 7,436 |
|
|
| Equity securities at fair value |
|
| — |
|
|
| (8 | ) |
|
| — |
|
|
| 2,685 |
|
|
| — |
|
|
| Securities available for sale |
|
| (14 | ) |
|
| (145 | ) |
|
| — |
|
|
| (428 | ) |
|
| (222 | ) |
|
| Mortgage loan servicing, net |
|
| 7,761 |
|
|
| (3,130 | ) |
|
| (2,442 | ) |
|
| 9,447 |
|
|
| 4,626 |
|
|
| Other |
|
| 3,399 |
|
|
| 3,383 |
|
|
| 3,181 |
|
|
| 12,217 |
|
|
| 12,479 |
|
|
| Total Non-interest Income |
|
| 19,121 |
|
|
| 9,508 |
|
|
| 9,097 |
|
|
| 56,362 |
|
|
| 50,676 |
|
|
| NON-INTEREST EXPENSE |
|
|
|
|
|
|
|
|
|
|
| ||||||||||
| Compensation and employee benefits |
|
| 22,886 |
|
|
| 20,048 |
|
|
| 19,049 |
|
|
| 84,955 |
|
|
| 78,965 |
|
|
| Data processing |
|
| 3,688 |
|
|
| 3,379 |
|
|
| 2,909 |
|
|
| 13,579 |
|
|
| 11,862 |
|
|
| Occupancy, net |
|
| 1,953 |
|
|
| 1,893 |
|
|
| 1,933 |
|
|
| 7,806 |
|
|
| 7,908 |
|
|
| Interchange expense |
|
| 1,131 |
|
|
| 1,149 |
|
|
| 1,110 |
|
|
| 4,504 |
|
|
| 4,332 |
|
|
| Furniture, fixtures and equipment |
|
| 928 |
|
|
| 932 |
|
|
| 974 |
|
|
| 3,762 |
|
|
| 3,756 |
|
|
| Advertising |
|
| 1,198 |
|
|
| 581 |
|
|
| 879 |
|
|
| 3,058 |
|
|
| 2,165 |
|
|
| FDIC deposit insurance |
|
| 729 |
|
|
| 664 |
|
|
| 796 |
|
|
| 2,870 |
|
|
| 3,005 |
|
|
| Legal and professional |
|
| 849 |
|
|
| 687 |
|
|
| 585 |
|
|
| 2,566 |
|
|
| 2,208 |
|
|
| Loan and collection |
|
| 606 |
|
|
| 657 |
|
|
| 456 |
|
|
| 2,474 |
|
|
| 2,174 |
|
|
| Communications |
|
| 462 |
|
|
| 519 |
|
|
| 535 |
|
|
| 2,095 |
|
|
| 2,406 |
|
|
| Costs (recoveries) related to unfunded lending commitments |
|
| 303 |
|
|
| 113 |
|
|
| 348 |
|
|
| (373 | ) |
|
| 424 |
|
|
| Other |
|
| 2,254 |
|
|
| 1,961 |
|
|
| 2,304 |
|
|
| 7,800 |
|
|
| 7,914 |
|
|
| Total Non-interest Expense |
|
| 36,987 |
|
|
| 32,583 |
|
|
| 31,878 |
|
|
| 135,096 |
|
|
| 127,119 |
|
|
| Income Before Income Tax |
|
| 22,768 |
|
|
| 17,291 |
|
|
| 17,947 |
|
|
| 83,046 |
|
|
| 73,676 |
|
|
| Income tax expense |
|
| 4,307 |
|
|
| 3,481 |
|
|
| 4,204 |
|
|
| 16,256 |
|
|
| 14,609 |
|
|
| Net Income |
| $ | 18,461 |
|
| $ | 13,810 |
|
| $ | 13,743 |
|
| $ | 66,790 |
|
| $ | 59,067 |
|
|
| Net income per common share |
|
|
|
|
|
|
|
|
|
|
| ||||||||||
| Basic |
| $ | 0.88 |
|
| $ | 0.66 |
|
| $ | 0.66 |
|
| $ | 3.20 |
|
| $ | 2.82 |
|
|
| Diluted |
| $ | 0.87 |
|
| $ | 0.65 |
|
| $ | 0.65 |
|
| $ | 3.16 |
|
| $ | 2.79 |
|
|
|
| |||||||||||||||||||||
| INDEPENDENT BANK CORPORATION AND SUBSIDIARIES | |||||||||||||||||||
|
| |||||||||||||||||||
|
| December 31, |
| September 30, |
| June 30, |
| March 31, |
| December 31, | ||||||||||
|
| (unaudited) | ||||||||||||||||||
|
| (Dollars in thousands except per share data) | ||||||||||||||||||
| Three Months Ended |
|
|
|
|
|
|
|
|
| ||||||||||
| Net interest income | $ | 42,851 |
|
| $ | 41,854 |
|
| $ | 41,346 |
|
| $ | 40,197 |
|
| $ | 40,111 |
|
| Provision for credit losses |
| 2,217 |
|
|
| 1,488 |
|
|
| 19 |
|
|
| 744 |
|
|
| (617 | ) |
| Non-interest income |
| 19,121 |
|
|
| 9,508 |
|
|
| 15,172 |
|
|
| 12,561 |
|
|
| 9,097 |
|
| Non-interest expense |
| 36,987 |
|
|
| 32,583 |
|
|
| 33,333 |
|
|
| 32,193 |
|
|
| 31,878 |
|
| Income before income tax |
| 22,768 |
|
|
| 17,291 |
|
|
| 23,166 |
|
|
| 19,821 |
|
|
| 17,947 |
|
| Income tax expense |
| 4,307 |
|
|
| 3,481 |
|
|
| 4,638 |
|
|
| 3,830 |
|
|
| 4,204 |
|
| Net income | $ | 18,461 |
|
| $ | 13,810 |
|
| $ | 18,528 |
|
| $ | 15,991 |
|
| $ | 13,743 |
|
|
|
|
|
|
|
|
|
|
|
| ||||||||||
| Basic earnings per share | $ | 0.88 |
|
| $ | 0.66 |
|
| $ | 0.89 |
|
| $ | 0.77 |
|
| $ | 0.66 |
|
| Diluted earnings per share |
| 0.87 |
|
|
| 0.65 |
|
|
| 0.88 |
|
|
| 0.76 |
|
|
| 0.65 |
|
| Cash dividend per share |
| 0.24 |
|
|
| 0.24 |
|
|
| 0.24 |
|
|
| 0.24 |
|
|
| 0.23 |
|
|
|
|
|
|
|
|
|
|
|
| ||||||||||
| Average shares outstanding |
| 20,893,820 |
|
|
| 20,896,019 |
|
|
| 20,901,741 |
|
|
| 20,877,067 |
|
|
| 20,840,680 |
|
| Average diluted shares outstanding |
| 21,122,096 |
|
|
| 21,115,273 |
|
|
| 21,105,387 |
|
|
| 21,079,607 |
|
|
| 21,049,030 |
|
|
|
|
|
|
|
|
|
|
|
| ||||||||||
| Performance Ratios |
|
|
|
|
|
|
|
|
| ||||||||||
| Return on average assets |
| 1.39 | % |
|
| 1.04 | % |
|
| 1.44 | % |
|
| 1.24 | % |
|
| 1.04 | % |
| Return on average equity |
| 16.31 |
|
|
| 12.54 |
|
|
| 17.98 |
|
|
| 15.95 |
|
|
| 14.36 |
|
| Efficiency ratio (1) |
| 59.09 |
|
|
| 62.82 |
|
|
| 61.49 |
|
|
| 60.26 |
|
|
| 64.27 |
|
|
|
|
|
|
|
|
|
|
|
| ||||||||||
| As a Percent of Average Interest-Earning Assets (1) |
|
|
|
|
|
|
|
|
| ||||||||||
| Interest income |
| 5.37 | % |
|
| 5.48 | % |
|
| 5.45 | % |
|
| 5.34 | % |
|
| 5.29 | % |
| Interest expense |
| 1.92 |
|
|
| 2.11 |
|
|
| 2.05 |
|
|
| 2.04 |
|
|
| 2.03 |
|
| Net interest income |
| 3.45 |
|
|
| 3.37 |
|
|
| 3.40 |
|
|
| 3.30 |
|
|
| 3.26 |
|
|
|
|
|
|
|
|
|
|
|
| ||||||||||
| Average Balances |
|
|
|
|
|
|
|
|
| ||||||||||
| Loans | $ | 3,994,661 |
|
| $ | 3,909,954 |
|
| $ | 3,849,199 |
|
| $ | 3,810,526 |
|
| $ | 3,764,752 |
|
| Securities |
| 912,073 |
|
|
| 933,750 |
|
|
| 944,435 |
|
|
| 999,140 |
|
|
| 1,027,240 |
|
| Total earning assets |
| 5,007,566 |
|
|
| 4,985,842 |
|
|
| 4,893,367 |
|
|
| 4,910,669 |
|
|
| 4,928,697 |
|
| Total assets |
| 5,300,368 |
|
|
| 5,275,623 |
|
|
| 5,181,317 |
|
|
| 5,201,452 |
|
|
| 5,233,666 |
|
| Deposits |
| 4,655,091 |
|
|
| 4,616,119 |
|
|
| 4,531,917 |
|
|
| 4,561,645 |
|
|
| 4,612,797 |
|
| Interest bearing liabilities |
| 3,717,483 |
|
|
| 3,689,684 |
|
|
| 3,611,972 |
|
|
| 3,627,446 |
|
|
| 3,635,771 |
|
| Shareholders' equity |
| 450,214 |
|
|
| 438,077 |
|
|
| 414,549 |
|
|
| 403,225 |
|
|
| 379,614 |
|
(1) Presented on a fully tax equivalent basis assuming a marginal tax rate of 21%.
| INDEPENDENT BANK CORPORATION AND SUBSIDIARIES | |||||||||||||||||||
|
| |||||||||||||||||||
|
| December 31, |
| September 30, |
| June 30, |
| March 31, |
| December 31, | ||||||||||
|
| (unaudited) | ||||||||||||||||||
|
| (Dollars in thousands except per share data) | ||||||||||||||||||
| End of Period |
|
|
|
|
|
|
|
|
| ||||||||||
| Capital |
|
|
|
|
|
|
|
|
| ||||||||||
| Tangible common equity ratio |
| 8.00 | % |
|
| 8.08 | % |
|
| 7.63 | % |
|
| 7.41 | % |
|
| 7.15 | % |
| Tangible common equity ratio excluding accumulated other comprehensive loss |
| 9.10 |
|
|
| 8.99 |
|
|
| 8.76 |
|
|
| 8.57 |
|
|
| 8.31 |
|
| Average equity to average assets |
| 8.49 |
|
|
| 8.30 |
|
|
| 8.00 |
|
|
| 7.75 |
|
|
| 7.25 |
|
| Total capital to risk-weighted assets (2) |
| 14.24 |
|
|
| 14.25 |
|
|
| 14.21 |
|
|
| 13.85 |
|
|
| 13.71 |
|
| Tier 1 capital to risk-weighted assets (2) |
| 12.07 |
|
|
| 12.06 |
|
|
| 12.01 |
|
|
| 11.65 |
|
|
| 11.50 |
|
| Common equity tier 1 capital to risk-weighted assets (2) |
| 11.19 |
|
|
| 11.16 |
|
|
| 11.09 |
|
|
| 10.73 |
|
|
| 10.58 |
|
| Tier 1 capital to average assets (2) |
| 9.86 |
|
|
| 9.63 |
|
|
| 9.59 |
|
|
| 9.29 |
|
|
| 9.03 |
|
| Common shareholders' equity per share of common stock | $ | 21.76 |
|
| $ | 21.65 |
|
| $ | 20.60 |
|
| $ | 19.88 |
|
| $ | 19.41 |
|
| Tangible common equity per share of common stock |
| 20.33 |
|
|
| 20.22 |
|
|
| 19.16 |
|
|
| 18.44 |
|
|
| 17.96 |
|
| Total shares outstanding |
| 20,895,714 |
|
|
| 20,893,800 |
|
|
| 20,899,358 |
|
|
| 20,903,677 |
|
|
| 20,835,633 |
|
|
|
|
|
|
|
|
|
|
|
| ||||||||||
| Selected Balances |
|
|
|
|
|
|
|
|
| ||||||||||
| Loans | $ | 4,038,825 |
|
| $ | 3,942,287 |
|
| $ | 3,851,889 |
|
| $ | 3,839,965 |
|
| $ | 3,790,901 |
|
| Securities |
| 898,618 |
|
|
| 932,312 |
|
|
| 936,194 |
|
|
| 963,577 |
|
|
| 1,033,338 |
|
| Total earning assets |
| 5,024,083 |
|
|
| 4,964,784 |
|
|
| 4,979,555 |
|
|
| 4,949,496 |
|
|
| 4,954,696 |
|
| Total assets |
| 5,338,104 |
|
|
| 5,259,268 |
|
|
| 5,277,500 |
|
|
| 5,231,255 |
|
|
| 5,263,726 |
|
| Deposits |
| 4,654,088 |
|
|
| 4,626,875 |
|
|
| 4,614,328 |
|
|
| 4,582,414 |
|
|
| 4,622,879 |
|
| Interest bearing liabilities |
| 3,764,832 |
|
|
| 3,682,482 |
|
|
| 3,694,025 |
|
|
| 3,677,060 |
|
|
| 3,676,050 |
|
| Shareholders' equity |
| 454,686 |
|
|
| 452,369 |
|
|
| 430,459 |
|
|
| 415,570 |
|
|
| 404,449 |
|
(2) December 31, 2024 are Preliminary.
Reconciliation of Non-GAAP Financial Measures
Independent Bank Corporation
Independent Bank Corporation believes non-GAAP measures are meaningful because they reflect adjustments commonly made by management, investors, regulators and analysts to evaluate the adequacy of common equity and performance trends. Tangible common equity is used by the Company to measure the quality of capital.
Reconciliation of Non-GAAP Financial Measures
|
| Three Months Ended |
| Twelve Months Ended | ||||||||||||
|
|
| 2024 |
|
|
| 2023 |
|
|
| 2024 |
|
|
| 2023 |
|
|
| (Dollars in thousands) | ||||||||||||||
| Net Interest Margin, Fully Taxable Equivalent ("FTE") |
|
|
|
|
|
|
| ||||||||
|
|
|
|
|
|
|
|
| ||||||||
| Net interest income | $ | 42,851 |
|
| $ | 40,111 |
|
| $ | 166,248 |
|
| $ | 156,329 |
|
| Add: taxable equivalent adjustment |
| 389 |
|
|
| 178 |
|
|
| 902 |
|
|
| 900 |
|
| Net interest income - taxable equivalent | $ | 43,240 |
|
| $ | 40,289 |
|
| $ | 167,150 |
|
| $ | 157,229 |
|
| Net interest margin (GAAP) (1) |
| 3.42 | % |
|
| 3.25 | % |
|
| 3.36 | % |
|
| 3.24 | % |
| Net interest margin (FTE) (1) |
| 3.45 | % |
|
| 3.26 | % |
|
| 3.38 | % |
|
| 3.26 | % |
(1) Quarter to date are Annualized.
Tangible Common Equity Ratio
|
| December 31, |
| September 30, |
| June 30, |
| March 31, |
| December 31, | ||||||||||
|
| (Dollars in thousands) | ||||||||||||||||||
| Common shareholders' equity | $ | 454,686 |
|
| $ | 452,369 |
|
| $ | 430,459 |
|
| $ | 415,570 |
|
| $ | 404,449 |
|
| Less: |
|
|
|
|
|
|
|
|
| ||||||||||
| Goodwill |
| 28,300 |
|
|
| 28,300 |
|
|
| 28,300 |
|
|
| 28,300 |
|
|
| 28,300 |
|
| Other intangibles |
| 1,488 |
|
|
| 1,617 |
|
|
| 1,746 |
|
|
| 1,875 |
|
|
| 2,004 |
|
| Tangible common equity |
| 424,898 |
|
|
| 422,452 |
|
|
| 400,413 |
|
|
| 385,395 |
|
|
| 374,145 |
|
| Addition: |
|
|
|
|
|
|
|
|
| ||||||||||
| Accumulated other comprehensive loss for regulatory purposes |
| 64,146 |
|
|
| 52,454 |
|
|
| 65,030 |
|
|
| 65,831 |
|
|
| 66,344 |
|
| Tangible common equity excluding other comprehensive loss adjustments | $ | 489,044 |
|
| $ | 474,906 |
|
| $ | 465,443 |
|
| $ | 451,226 |
|
| $ | 440,489 |
|
|
|
|
|
|
|
|
|
|
|
| ||||||||||
| Total assets | $ | 5,338,104 |
|
| $ | 5,259,268 |
|
| $ | 5,277,500 |
|
| $ | 5,231,255 |
|
| $ | 5,263,726 |
|
| Less: |
|
|
|
|
|
|
|
|
| ||||||||||
| Goodwill |
| 28,300 |
|
|
| 28,300 |
|
|
| 28,300 |
|
|
| 28,300 |
|
|
| 28,300 |
|
| Other intangibles |
| 1,488 |
|
|
| 1,617 |
|
|
| 1,746 |
|
|
| 1,875 |
|
|
| 2,004 |
|
| Tangible assets |
| 5,308,316 |
|
|
| 5,229,351 |
|
|
| 5,247,454 |
|
|
| 5,201,080 |
|
|
| 5,233,422 |
|
| Addition: |
|
|
|
|
|
|
|
|
| ||||||||||
| Net unrealized losses on available for sale securities and derivatives, net of tax |
| 64,146 |
|
|
| 52,454 |
|
|
| 65,030 |
|
|
| 65,831 |
|
|
| 66,344 |
|
| Tangible assets excluding other comprehensive loss adjustments | $ | 5,372,462 |
|
| $ | 5,281,805 |
|
| $ | 5,312,484 |
|
| $ | 5,266,911 |
|
| $ | 5,299,766 |
|
|
|
|
|
|
|
|
|
|
|
| ||||||||||
| Common equity ratio |
| 8.52 | % |
|
| 8.60 | % |
|
| 8.16 | % |
|
| 7.94 | % |
|
| 7.68 | % |
| Tangible common equity ratio |
| 8.00 | % |
|
| 8.08 | % |
|
| 7.63 | % |
|
| 7.41 | % |
|
| 7.15 | % |
| Tangible common equity ratio excluding other comprehensive loss |
| 9.10 | % |
|
| 8.99 | % |
|
| 8.76 | % |
|
| 8.57 | % |
|
| 8.31 | % |
|
|
|
|
|
|
|
|
|
|
| ||||||||||
| Tangible Common Equity per Share of Common Stock: | |||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
| ||||||||||
| Common shareholders' equity | $ | 454,686 |
|
| $ | 452,369 |
|
| $ | 430,459 |
|
| $ | 415,570 |
|
| $ | 404,449 |
|
| Tangible common equity | $ | 424,898 |
|
| $ | 422,452 |
|
| $ | 400,413 |
|
| $ | 385,395 |
|
| $ | 374,145 |
|
| Shares of common stock outstanding (in thousands) |
| 20,896 |
|
|
| 20,894 |
|
|
| 20,899 |
|
|
| 20,904 |
|
|
| 20,836 |
|
|
|
|
|
|
|
|
|
|
|
| ||||||||||
| Common shareholders' equity per share of common stock | $ | 21.76 |
|
| $ | 21.65 |
|
| $ | 20.60 |
|
| $ | 19.88 |
|
| $ | 19.41 |
|
| Tangible common equity per share of common stock | $ | 20.33 |
|
| $ | 20.22 |
|
| $ | 19.16 |
|
| $ | 18.44 |
|
| $ | 17.96 |
|
|
| |||||||||||||||||||
The tangible common equity ratio removes the effect of goodwill and other intangible assets from capital and total assets. Tangible common equity per share of common stock removes the effect of goodwill and other intangible assets from common shareholders’ equity per share of common stock.
| Contact: | William B. Kessel, President and CEO, 616.447.3933 |