Independent Bank Corporation Reports 2013 Third Quarter Results

       Independent Bank Corporation Reports 2013 Third Quarter Results

PR Newswire

IONIA, Mich., Oct. 30, 2013

IONIA, Mich., Oct. 30, 2013 /PRNewswire/ --Independent Bank Corporation
(Nasdaq: IBCP) reported third quarter 2013 net income applicable to common
stock of $10.3 million, or $0.17 per diluted share, versus net income
applicable to common stock of $5.4 million, or $0.16 per diluted share, in the
prior-year period. For the nine months ended Sept. 30, 2013, the Company
reported net income applicable to common stock of $77.3 million, or $3.40 per
diluted share, compared to net income applicable to common stock of $11.0
million, or $0.36 per diluted share, in the prior-year period. The diluted
earnings per share calculations are based on earnings prior to preferred stock
dividends and the preferred stock discount. Third quarter 2013 results
include a $7.6 million benefit from the redemption of the Company's
mandatorily convertible preferred stock at a discount. Year-to-date 2013
results include an income tax benefit of $57.3 million associated with the
reversal of substantially all of the Company's deferred tax asset valuation
allowance in June 2013.

The Company's seventh consecutive profitable quarter was highlighted by:

  oA successful common equity offering that resulted in raising $97.1 million
    of net proceeds.
  oThe exit from the Troubled Asset Relief Program ("TARP") with an $81.0
    million payment to the United States Department of the Treasury ("UST").
  oThe restoration of interest payments on all of the Company's outstanding
    trust preferred securities.
  oAdditional improvement in asset quality, with non-performing assets down
    2.3% during the quarter and 37.3% since year end 2012.

On Dec. 7, 2012, the Company completed the sale of 21 branches. This
transaction resulted in the transfer of approximately $403.1 million of
deposits and the sale of approximately $48.0 million of loans. The
transaction also resulted in the transfer of $336.1 million of cash to the
purchaser of the branches.

William B. ("Brad") Kessel, the President and Chief Executive Officer of
Independent Bank Corporation, commented: "We are very pleased to report our
seventh consecutive quarter of profitability as well as continued progress in
improving asset quality, as evidenced by a reduction in our non-performing
assets, loan net charge-offs and the provision for loan losses as compared to
the year ago quarter. The third quarter of 2013 was marked by several
significant positive events including our common equity offering, our exit
from TARP, and the restoration of interest payments on our trust preferred
securities. The Company has achieved a very strong capital structure with a
tangible common equity to tangible assets ratio of 10.24% as of the end of the
third quarter. This positions the organization for potential future growth.
Having now completed all of the elements of our capital plan, we are keenly
focused on further improving our operating results and efficiency ratio. We
are confident that we already have initiatives in place (such as the Oct. 11,
2013 redemption of higher cost trust preferred securities) or in process that
will improve our operating results, despite the challenge of lower mortgage
banking related revenues. Our net interest income also stabilized in the
third quarter and commercial loans and installment loans have grown during the
year."

Operating Results

The Company's net interest income totaled $19.5 million during the third
quarter of 2013, a decrease of $1.9 million, or 9.0% from the year-ago period,
and essentially unchanged from the second quarter of 2013. The decrease in net
interest income is primarily due to a decline in average interest-earning
assets resulting from the aforementioned branch sale. Average interest-earning
assets declined to $1.91 billion in the third quarter of 2013 compared to
$2.18 billion in the year-ago quarter. The Company's tax equivalent net
interest income as a percent of average interest-earning assets (the "net
interest margin") was 4.10% during the third quarter of 2013, compared to
3.95% in the year-ago period, and 4.16% in the second quarter of 2013. The
year-over-year increase in the net interest margin is due to a change in asset
mix, as lower yielding interest-bearing cash balances decreased following the
branch sale, as well as a decline in the cost of funds.

For the first nine months of 2013, net interest income totaled $58.6 million,
a decrease of $6.8 million, or 10.4% from 2012. The Company's net interest
margin for the first nine months of 2013 increased to 4.17% compared to 4.06%
in 2012. The reasons for the decline in net interest income for the first
nine months of 2013 are generally consistent with those described above for
the comparative year-over-year quarterly periods.

Service charges on deposit accounts totaled $3.6 million and $10.6 million,
respectively, for the third quarter and first nine months of 2013,
representing decreases of 23.7% and 21.4%, respectively, from the comparable
year ago periods. Interchange income totaled $1.9 million and $5.5 million
for the third quarter and first nine months of 2013, respectively,
representing decreases of 20.3% and 21.4%, respectively, over the year ago
comparative periods. The declines in service charges on deposit accounts and
interchange income primarily reflect the impact of the branch sale.

Net gains on mortgage loans were $1.6 million in the third quarter of 2013,
compared to $4.6 million in the year-ago quarter. For the first nine months
of 2013, net gains on mortgage loans totaled $8.4 million compared to $12.0
million in 2012. The decrease in net gains relates primarily to a rise in
mortgage loan interest rates during mid-2013 that has significantly reduced
mortgage loan refinance volumes.

Mortgage loan servicing generated income of $0.3 million and a loss of $0.4
million in the third quarters of 2013 and 2012, respectively. The quarterly
comparative variance is due primarily to the change in the impairment reserve
(a $0.035 million recovery of previously recorded impairment charges in the
third quarter of 2013 compared to a $0.4 million impairment charge in the
year-ago quarter) as well as a $0.3 million decrease in the amortization of
capitalized mortgage loan servicing rights. For the first nine months of
2013, mortgage loan servicing generated income of $2.6 million compared to a
loss of $0.7 million in 2012. The first nine months comparative variance is
primarily due to the change in the impairment reserve (a $2.5 million recovery
of previously recorded impairment charges in the first nine months of 2013
compared to a $0.6 million impairment charge in the year-ago period). The
recovery of previously recorded impairment charges during 2013 primarily
reflects higher mortgage loan interest rates resulting in lower estimated
future prepayment rates. Capitalized mortgage loan servicing rights totaled
$13.1 million at Sept. 30, 2013 compared to $11.0 million at Dec. 31, 2012.
As of Sept. 30, 2013, the Company serviced approximately $1.74 billion in
mortgage loans for others on which servicing rights have been capitalized.

Non-interest expenses totaled $25.9 million in the third quarter of 2013,
compared to $29.3 million in the year-ago period. For the first nine months
of 2013, non-interest expenses totaled $79.1 million versus $86.8 million in
2012. The branch sale had the most significant impact on the year-over-year
declines in most of the categories of non-interest expenses (compensation and
benefits, occupancy, furniture, fixtures and equipment, communications and
FDIC deposit insurance). Compensation and employee benefits in the third
quarter of 2013 included $0.3 million of expense related to the vesting of
certain restricted stock unit awards because of the Company's exit from TARP.

Loan and collection expenses (down $1.2 million in the quarter and $2.6
million year-to-date) and net losses on other real estate ("ORE") and
repossessed assets (down $0.2 million in the quarter and $0.8 million
year-to-date) declined due primarily to reduced levels of non-performing
loans, commercial watch credits and ORE. In addition, credit card and bank
service fees (down $0.1 million in the quarter and $0.7 million year-to-date)
declined due primarily to a decrease in the size of the Company's payment plan
receivables portfolio.

The provision for loss reimbursement on sold loans increased by $1.2 million
in the third quarter of 2013 compared to the year ago quarter. In Oct. 2013
the Company reached an agreement in principle (the "Resolution Agreement") to
resolve its existing and future repurchase and make whole obligations
(collectively "Repurchase Obligations") related to mortgage loans originated
between Jan. 1, 2000 and Dec. 31, 2008 and delivered to Fannie Mae by Jan. 31,
2009. The terms of the Resolution Agreement are subject to final approval by
Fannie Mae. Under the proposed terms of the Resolution Agreement, the Company
will payFannie Maeapproximately $1.59 million with respect to the Repurchase
Obligations, subject to reconciliation and adjustment. The Company believes
that it is in its best interests to execute the Resolution Agreement in order
to bring finality to the loss reimbursement exposure with Fannie Mae for these
years and reduce the resources spent on individual file reviews and defending
loss reimbursement requests. The third quarter 2013 provision includes the
impact of the Resolution Agreement. At Sept. 30, 2013 the Company's reserve
for loss reimbursement on sold loans totaled $3.5 million (which includes
reserves for other investors in addition to Fannie Mae).

2013 vehicle service contract counterparty contingencies expense decreased by
$0.1 million in the quarter and increased $2.3 million year-to-date as
compared to 2012. This year-to-date increase primarily reflects write-downs
of vehicle service contract counterparty receivables in the second quarter of
2013. The Company reached settlements in certain of its litigation to collect
these receivables. Given the costs and uncertainty of continued litigation,
management of the Company determined it was in the organization's best
interests to resolve these matters. During the third quarter of 2013 the
Company received a cash payment of $5.4 million related to one of these
settlements. At Sept. 30, 2013 the Company had $9.8 million of remaining
receivables from vehicle service contract counterparties that were still in
process of collection.

Asset Quality

Commenting on asset quality, President and CEO Kessel added: "Our provision
for loan losses decreased by $0.6 million in the third quarter of 2013 as
compared to the year-ago level, primarily reflecting a reduction in
non-performing loans, a lower level of watch credits, reduced loan net
charge-offs, and an overall decline in total loan balances. Since Sept. 30,
2012, non-performing loans and commercial loan watch credits have declined by
approximately 48% and 32%, respectively. In addition, thirty- to eighty-nine
day delinquency rates at Sept. 30, 2013 were 0.36% for commercial loans and
1.07% for mortgage and consumer loans. These delinquency rates continue to be
well managed as we strive to further improve asset quality and reduce credit
related costs."

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

Loan Type                                    9/30/2013 12/31/2012 9/30/2012
                                            (Dollars in Thousands)
Commercial                                  $  6,685     $ 14,753   $ 19,517
Consumer/installment                        2,108         2,343      2,531
Mortgage                                    11,546        15,736     16,586
Payment plan receivables^(2)                31            104        213
 Total                                     $ 20,370      $ 32,936   $ 38,847
Ratio of non-performing loans to total      1.48%         2.32%      2.71%
portfolio loans
Ratio of non-performing assets to total     1.69%         2.92%      2.88%
assets
Ratio of the allowance for loan losses to   169.06%       134.43%    123.62%
non-performing loans



(1) Excludes loans that are classified as "troubled debt restructured" that
    are still performing.
    Represents payment plans for which no payments have been received for 90
    days or more and for which Mepco has not yet completed the process to
(2) charge the applicable counterparty for the balance due. These balances
    exclude receivables due from Mepco counterparties related to the
    cancellation of payment plan receivables.

Non-performing loans have declined by $12.6 million, or 38.2%, since year-end
2012. All categories of non-performing loans declined; the principal
decreases since year-end 2012 were in commercial loans and residential
mortgage loans. The decline in non-performing loans primarily reflects loan
net charge-offs, pay-offs, negotiated transactions and the migration of loans
into ORE during 2013. In addition, the Company completed a sale of commercial
loans during the second quarter of 2013 that included $2.9 million of
non-performing loans. Non-performing commercial loans have declined by $71.4
million, or 91.4%, since they peaked in 2008. Non-performing retail
(residential mortgage and consumer/installment) loans have declined by $45.5
million, or 76.9%, since they peaked in 2009. Other real estate and
repossessed assets totaled $16.6 million at Sept. 30, 2013, compared to $26.1
million at Dec. 31, 2012.

The provision for loan losses was a credit of $0.4 million and an expense of
$0.3 million in the third quarters of 2013 and 2012, respectively. The
provision for loan losses was a credit of $3.2 million and an expense of $6.4
million in the first nine months of 2013 and 2012, respectively. The level of
the provision for loan losses in each period reflects the Company's overall
assessment of the allowance for loan losses, taking into consideration factors
such as loan mix, levels of non-performing and classified loans and loan net
charge-offs. Loan net charge-offs were $2.0 million (0.58% annualized of
average loans) in the third quarter of 2013, compared to $3.7 million (1.00%
annualized of average loans) in the third quarter of 2012. Loan net
charge-offs were $6.7 million (0.65% of average loans) and $16.7 million
(1.46% of average loans) for the first nine months of 2013 and 2012,
respectively. The year to date declines in 2013 loan net charge-offs by
category were: commercial loans $5.0 million; mortgage loans $4.2 million;
consumer/installment loans $0.7 million; and other $0.1 million. At Sept.
30, 2013, the allowance for loan losses totaled $34.4 million, or 2.50% of
portfolio loans, compared to $44.3 million, or 3.12% of portfolio loans, at
Dec. 31, 2012.

Balance Sheet, Liquidity and Capital

Total assets were $2.18 billion at Sept. 30, 2013, an increase of $159.6
million from Dec. 31, 2012. Loans, excluding loans held for sale, were $1.38
billion at Sept. 30, 2013, compared to $1.42 billion at Dec. 31, 2012.
Deposits totaled $1.85 billion at Sept. 30, 2013, an increase of $69.8 million
from Dec. 31, 2012. The increase in deposits is primarily due to growth in
checking and savings account balances.

Cash and cash equivalents totaled $130.9 million at Sept. 30, 2013, versus
$179.8 million at Dec. 31, 2012. Securities available for sale totaled $415.9
million at Sept. 30, 2013, versus $208.4 million at Dec. 31, 2012. This
$207.5 million increase in securities available for sale is primarily due to
the purchase of residential mortgage-backed, asset-backed, corporate and
municipal securities during the first nine months of 2013.

Total shareholders' equity was $226.6 million at Sept. 30, 2013, or 10.38% of
total assets. Tangible common equity totaled $223.2 million (10.24% of
tangible assets) at Sept. 30, 2013, or $9.79 per share.

The Company's wholly owned subsidiary, Independent Bank, remains "well
capitalized" for regulatory purposes with the following ratios:

Regulatory Capital Ratios        9/30/2013 12/31/2012 Well Capitalized Minimum
                                                   

Tier 1 capital to average total  9.88%     8.26%      5.00%
assets
Tier 1 capital to risk-weighted  14.74%    13.67%     6.00%
assets
Total capital to risk-weighted   16.01%    14.95%     10.00%
assets



About Independent Bank Corporation

Independent Bank Corporation (NASDAQ: IBCP) is a Michigan-based bank holding
company with total assets of approximately $2.2 billion. Founded as First
National Bank of Ionia in 1864, Independent Bank Corporation currently
operates a 71-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 title services. 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: www.IndependentBank.com.

Any statements in this news release that are not historical facts are
forward-looking statements as defined in the Private Securities Litigation
Reform Act of 1995. Words such as "expect," "believe," "intend," "estimate,"
"project," "may" and similar expressions are intended to identify
forward-looking statements. These forward-looking statements are predicated on
management's beliefs and assumptions based on information known to Independent
Bank Corporation's management as of the date of this news release and do not
purport to speak as of any other date. Forward-looking statements include
descriptions of plans and objectives of Independent Bank Corporation's
management for future or past operations, products or services, and forecasts
of the Company's revenue, earnings or other measures of economic performance.
Such statements reflect the view of Independent Bank Corporation's management
as of this date with respect to future events and are not guarantees of future
performance, involve assumptions and are subject to substantial risks and
uncertainties, such as the changes in Independent Bank Corporation's plans,
objectives, expectations and intentions. Should one or more of these risks
materialize or should underlying beliefs or assumptions prove incorrect, the
Company's actual results could differ materially from those discussed. Factors
that could cause or contribute to such differences include, the ability of
Independent Bank to remain well-capitalized under federal regulatory
standards, the pace of economic recovery within Michigan and beyond, changes
in interest rates, changes in the accounting treatment of any particular item,
the results of regulatory examinations, changes in industries where the
Company has a concentration of loans, changes in the level of fee income,
changes in general economic conditions and related credit and market
conditions, and the impact of regulatory responses to any of the foregoing.
Forward-looking statements speak only as of the date they are made.
Independent Bank Corporation does not undertake to update forward-looking
statements to reflect facts, circumstances, assumptions or events that occur
after the date the forward-looking statements are made. For any
forward-looking statements made in this news release or in any documents,
Independent Bank Corporation claims the protection of the safe harbor for
forward-looking statements contained in the Private Securities Litigation
Reform Act of 1995.

INDEPENDENT BANK CORPORATION AND SUBSIDIARIES

Consolidated Statements of Financial Condition
                                             September 30,     December 31,
                                             2013              2012
                                             (unaudited)
 Assets                                  (In thousands, except share amounts)
 Cash and due from banks               $     56,179          $   55,487
 Interest bearing deposits                   74,766              124,295
 Cash and Cash Equivalents                   130,945             179,782
 Interest bearing deposits - time            16,946              -
 Trading securities                          308                 110
 Securities available for sale               415,885             208,413
 Federal Home Loan Bank and Federal          21,496              20,838
 Reserve Bank stock, at cost
 Loans held for sale, carried at fair        27,622              47,487
 value
 Loans held for sale, carried at lower       -                   3,292
 of cost or fair value
 Loans
  Commercial                                625,422             617,258
  Mortgage                                  491,525             527,340
  Installment                             194,542             189,849
  Payment plan receivables                  68,494              84,692
 Total Loans                                 1,379,983           1,419,139
  Allowance for loan losses                 (34,437)            (44,275)
 Net Loans                                   1,345,546           1,374,864
 Other real estate and repossessed           16,637              26,133
 assets
 Property and equipment, net                 47,884              47,016
 Bank-owned life insurance                   51,916              50,890
 Deferred tax assets, net                    58,807              -
 Capitalized mortgage loan servicing         13,051              11,013
 rights
 Vehicle service contract counterparty       9,753               18,449
 receivables, net
 Other intangibles                           3,366               3,975
 Prepaid FDIC deposit insurance              -                   9,448
 assessment
 Accrued income and other assets             23,342              22,157
 Total Assets                          $     2,183,504       $   2,023,867
 Liabilities and Shareholders' Equity
 Deposits
  Non-interest bearing                $     508,983         $   488,126
  Savings and interest-bearing              908,599             871,238
 checking
  Reciprocal                                55,924              33,242
  Retail time                               362,585             372,340
  Brokered time                             13,227              14,591
 Total Deposits                              1,849,318           1,779,537
 Other borrowings                            17,282              17,625
 Subordinated debentures                     50,175              50,175
 Vehicle service contract counterparty       5,499               7,725
 payables
 Accrued expenses and other                  34,629              33,830
 liabilities
 Total Liabilities                           1,956,903           1,888,892
 Shareholders' Equity
  Convertible preferred stock, no par
 value, 200,000 shares authorized;
  None issued and outstanding at
 September 30, 2013 and 74,426 shares
  issued and outstanding at
 December 31, 2012; liquidation
 preference:
  $85,150 at December 31, 2012            -                   84,204
  Common stock, no par value,
 500,000,000 shares authorized;
  issued and outstanding:
 22,808,839 shares at September 30,
 2013
  and 9,093,732 shares at December       350,926             251,237
 31, 2012
  Accumulated deficit                       (115,155)           (192,408)
  Accumulated other comprehensive           (9,170)             (8,058)
 loss
 Total Shareholders' Equity                  226,601             134,975
 Total Liabilities and Shareholders'   $     2,183,504       $   2,023,867
 Equity





INDEPENDENT BANK CORPORATION AND SUBSIDIARIES

Consolidated Statements of Operations
                                                          Three Months Ended                  Nine Months Ended
                                                          September   June 30,   September    September 30,
                                                          30,                    30,
                                                          2013        2013       2012         2013        2012
                                                          (unaudited)
                                                          (In thousands)
Interest Income
 Interest and fees on loans                           $  20,083    $ 20,303   $ 23,385    $  61,096   $  71,427
 Interest on securities
 Taxable                                               1,109       993        655          2,772       2,246
 Tax-exempt                                            282         242        261          762         801
 Other investments                                       310         324        432          966         1,210
Total Interest Income                                     21,784      21,862     24,733       65,596      75,684
Interest Expense
 Deposits                                                1,371       1,463      2,223        4,363       6,952
 Other borrowings                                        884         876        1,059        2,625       3,351
Total Interest Expense                                    2,255       2,339      3,282        6,988       10,303
Net Interest Income                                       19,529      19,523     21,451       58,608      65,381
Provision for loan losses                                 (355)       (2,107)    251          (3,153)     6,438
Net Interest Income After Provision for Loan Losses       19,884      21,630     21,200       61,761      58,943
Non-interest Income
 Service charges on deposit accounts                     3,614       3,583      4,739        10,603      13,492
 Interchange income                                      1,852       1,933      2,324        5,542       7,053
 Net gains (losses) on assets
 Mortgage loans                                        1,570       3,208      4,602        8,415       12,041
 Securities                                            14          107        301          205         1,154
 Other than temporary impairment loss on securities
 Total impairment loss                               -           (26)       (70)         (26)        (332)
 Loss recognized in other comprehensive loss         -           -          -            -           -
 Net impairment loss recognized in earnings        -           (26)       (70)         (26)        (332)
 Mortgage loan servicing                                 338         1,654      (364)        2,614       (716)
 Title insurance fees                                    409         368        482          1,261       1,479
 (Increase) decrease in fair value of U.S. Treasury      -           20         (32)         (1,025)     (211)
warrant
 Other                                                   2,040       2,164      2,560        6,327       8,208
Total Non-interest Income                                 9,837       13,011     14,542       33,916      42,168
Non-interest Expense
 Compensation and employee benefits                      12,591      11,715     13,610       35,613      39,598
 Occupancy, net                                          2,017       2,147      2,482        6,588       7,688
 Data processing                                         2,090       2,042      2,024        6,048       5,960
 Loan and collection                                     1,584       1,702      2,832        5,512       8,129
 Vehicle service contract counterparty contingencies     149         3,127      281          3,403       1,078
 Furniture, fixtures and equipment                       1,051       1,088      1,083        3,171       3,490
 Provision for loss reimbursement on sold loans          1,417       356        193          2,436       751
 Communications                                          695         730        896          2,205       2,791
 FDIC deposit insurance                                  685         711        816          2,026       2,489
 Advertising                                             652         659        647          1,881       1,842
 Legal and professional                                  487         664        952          1,843       3,117
 Interchange expense                                     410         418        468          1,238       1,321
 Net losses on other real estate and repossessed         119         320        291          1,091       1,911
assets
 Credit card and bank service fees                       310         331        433          975         1,708
 Write-down of property and equipment held for sale      -           -          860          -           860
 Cost (recoveries) related to unfunded lending           (86)        48         (538)        (57)        (597)
commitments
 Other                                                   1,763       1,684      1,966        5,176       4,692
Total Non-interest Expense                                25,934      27,742     29,296       79,149      86,828
Income Before Income Tax                                  3,787       6,899      6,446        16,528      14,283
Income tax expense (benefit)                              282         (56,489)   -            (56,172)    -
 $  3,505     $ 63,388   $ 6,446     $  72,700   $  14,283
Net Income
Preferred stock dividends and discount accretion          (749)       (1,157)    (1,093)      (3,001)     (3,241)
Preferred stock discount                                  7,554       -          -            7,554       -
Net Income Applicable to Common Stock                  $  10,310    $ 62,231   $ 5,353     $  77,253   $  11,042



INDEPENDENT BANK CORPORATION AND SUBSIDIARIES

Selected Financial Data
                   Three Months Ended                            Nine Months Ended
                   September     June 30,       September        September 30,
                   30,                          30,
                   2013          2013           2012             2013          2012
                   (unaudited)
Per Common Share
Data
Net Income Per
Common Share (A)
 Basic (B)      $ 0.73       $  6.56       $   0.61       $     7.03       $  1.28
 Diluted (C)      0.17          2.64           0.16             3.40          0.36
Cash dividends
declared per       0.00          0.00           0.00             0.00          0.00
common share
Selected Ratios
(D)
As a Percent of
Average
Interest-Earning
Assets
 Interest         4.57       %  4.65       %   4.55       %     4.66       %  4.70       %
income
 Interest         0.47          0.49           0.60             0.49          0.64
expense
 Net interest     4.10          4.16           3.95             4.17          4.06
income
Net Income to
(A)
 Average common
shareholders'      25.64      %  388.31     %   62.71      %     110.70     %  52.38      %
equity
 Average assets   1.90          12.00          0.89             4.93          0.62
Average Shares
 Basic (B)        14,167,043    9,480,454      8,778,899        10,989,142    8,637,176
 Diluted (C)      21,169,623    24,031,142     39,613,139   21,357,474        39,381,081



(A) These amounts are calculated using net income applicable to common stock.
Dividends on convertible preferred stock are added back and preferred stock
discount is subtracted out in the diluted per share calculation.

(B) Average shares of common stock for basic net income per common share
include shares issued and outstanding during the period and participating
share awards.

(C) Average shares of common stock for diluted net income per common share
include shares to be issued upon conversion of convertible preferred stock,
shares to be issued upon exercise of common stock warrants, shares to be
issued upon exercise of stock options, restricted stock units and stock units
for a deferred compensation plan for non-employee directors.

(D) Ratios have been annualized.

SOURCE Independent Bank Corporation

Website: http://www.IndependentBank.com
Contact: William B. Kessel, President and CEO, 616.447.3933; or Robert N.
Shuster, Chief Financial Officer, 616.522.1765
 
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