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Independent Bank Corporation Reports 2019 Second Quarter Results

Company Release - 7/25/2019 7:59 AM ET

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

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

  • Changes in the fair value due to price of capitalized mortgage loan servicing rights (the “MSR Changes”) of a negative $2.7 million ($0.09 per diluted share, after taxes) and a negative $4.9 million ($0.16 per diluted share, after taxes) for the three- and six-months ended June 30, 2019, respectively, as compared to positive MSR Changes of $0.5 million ($0.02 per diluted share, after taxes) and $2.0 million ($0.07 per diluted share, after taxes) for the three- and six-months ended June 30, 2018, respectively.
  • The acquisition of TCSB Bancorp, Inc. (“TCSB”), and its subsidiary, Traverse City State Bank, on Apr. 1, 2018 (referred to as the “Merger” or “TCSB Acquisition”) and the associated data processing systems conversions in June 2018.  The total assets, loans and deposits acquired in the Merger were approximately $342.8 million, $295.8 million (including $1.3 million of loans held for sale) and $287.7 million, respectively.
  • Merger related expenses of $3.1 million ($0.10 per diluted share, after taxes) and $3.3 million ($0.11 per diluted share, after taxes) for the three- and six-months ended June 30, 2018, respectively.

Second quarter 2019 highlights include:

  • Return on average assets and return on average equity of 1.27% and 12.72%, respectively (these ratios increase to 1.52% and 15.22%, respectively, when excluding the after tax impact of the MSR Change);
  • A year-over-year increase in quarterly net interest income of $1.8 million, or 6.1%;
  • Total portfolio loan net growth of $87.7 million, or 13.4% annualized;
  • Continued strong asset quality metrics; and
  • The payment of an 18 cent per share dividend on common stock on May 15, 2019.

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

Operating Results

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

For the first six months of 2019, net interest income totaled $61.0 million, an increase of $8.1 million, or 15.3% from the first half of 2018.  The Company’s net interest margin for the first six months of 2019 was 3.88% compared to 3.83% in 2018.  The increase in net interest income for the first six months of 2019 is due to increases in both average interest-earning assets and in the net interest margin.

Non-interest income totaled $9.9 million and $19.9 million, respectively, for the second quarter and first six months of 2019, compared to $12.3 million and $24.0 million in the respective comparable year ago periods.  These changes were primarily due to variances in mortgage banking related revenues (net gains on mortgage loans and mortgage loan servicing, net).
                                                                                                                                
Net gains on mortgage loans in the second quarters of 2019 and 2018, were approximately $4.3 million and $3.3 million, respectively.  For the first six months of 2019, net gains on mortgage loans totaled $7.9 million compared to $5.8 million in 2018.  The increase in net gains on mortgage loans was primarily due to an increase in mortgage loan sales volume in 2019 as well as fair value adjustments on the mortgage loan pipeline.

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

 Three Months EndedSix Months Ended
 6/30/20196/30/20186/30/20196/30/2018
Mortgage loan servicing, net:(Dollars in thousands)
Revenue, net$1,515 $1,372 $2,991 $2,564 
Fair value change due to price (2,670) 518  (4,873) 1,976 
Fair value change due to pay-downs (752) (655) (1,240) (1,084)
Total$(1,907)$1,235 $(3,122)$3,456 

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

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

Asset Quality

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

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

Loan Type6/30/201912/31/20186/30/2018
 (Dollars in thousands)
Commercial$900 $2,220 $2,889 
Consumer/installment 901  781  671 
Mortgage 5,997  6,033  5,522 
Total non-accrual loans 7,798  9,034  9,082 
Less – government guaranteed loans 436  460  224 
Total non-performing loans$7,362 $8,574 $8,858 
Ratio of non-performing loans to total portfolio loans 0.27% 0.33% 0.36%
Ratio of non-performing assets to total assets 0.27% 0.29% 0.33%
Ratio of the allowance for loan losses to non-performing loans 351.85% 290.27% 265.34%
 
(1)   Excludes loans that are classified as “troubled debt restructured” that are still performing.

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

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

Balance Sheet, Liquidity and Capital

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

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

Total shareholders’ equity was $330.8 million at June 30, 2019, or 9.62% of total assets.  Tangible common equity totaled $296.7 million at June 30, 2019, or $13.19 per share.  The Company’s wholly owned subsidiary, Independent Bank, remains significantly above “well capitalized” for regulatory purposes with the following ratios:

Regulatory Capital Ratios6/30/201912/31/2018Well Capitalized
Minimum

    
Tier 1 capital to average total assets9.50%9.44%5.00%
Tier 1 common equity  to risk-weighted assets11.80%11.94%6.50%
Tier 1 capital to risk-weighted assets11.80%11.94%8.00%
Total capital to risk-weighted assets12.81%12.94%10.00%

Share Repurchase Plan

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

Earnings Conference Call

Brad Kessel, President and CEO, and Rob Shuster, CFO, will review the quarterly results in a conference call for investors and analysts beginning at 11:00 am ET on Thursday, July 25, 2019.

To participate in the live conference call, please dial 1-866-200-8394. Also the conference call will be accessible through an audio webcast with user-controlled slides via the following URL:  https://services.choruscall.com/links/ibcp190725.html.

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

About Independent Bank Corporation

Independent Bank Corporation (NASDAQ: IBCP) is a Michigan-based bank holding company with total assets of approximately $3.4 billion.  Founded as First National Bank of Ionia in 1864, Independent Bank Corporation operates a branch network across Michigan's Lower Peninsula through one state-chartered bank subsidiary. This subsidiary (Independent Bank) provides a full range of financial services, including commercial banking, mortgage lending, investments and insurance. Independent Bank Corporation is committed to providing exceptional personal service and value to its customers, stockholders and the communities it serves. 

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

Forward-Looking Statements

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

Certain risks and important factors that could affect Independent Bank Corporation's future results are identified in its Annual Report on Form 10-K for the year ended December 31, 2018 and other reports filed with the SEC, including among other things under the heading “Risk Factors” in such Annual Report on Form 10-K. Any forward-looking statement speaks only as of the date on which it is made, and Independent Bank Corporation undertakes no obligation to update any forward-looking statement, whether to reflect events or circumstances, after the date on which the statement is made, to reflect new information or the occurrence of unanticipated events, or otherwise.

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


INDEPENDENT BANK CORPORATION AND SUBSIDIARIES
Consolidated Statements of Financial Condition
  June 30, December 31,
   2019   2018 
         
  (unaudited)
  (In thousands, except share
  amounts)
Assets        
Cash and due from banks $34,461  $23,350 
Interest bearing deposits  20,676   46,894 
Cash and Cash Equivalents  55,137   70,244 
Interest bearing deposits - time  498   595 
Equity securities at fair value  -   393 
Securities available for sale  430,305   427,926 
Federal Home Loan Bank and Federal Reserve Bank stock, at cost  18,359   18,359 
Loans held for sale, carried at fair value  62,883   44,753 
Loans held for sale, carried at lower of cost or fair value  -   41,471 
Loans    
Commercial  1,175,970   1,144,481 
Mortgage  1,086,309   1,042,890 
Installment  444,247   395,149 
Total Loans  2,706,526   2,582,520 
Allowance for loan losses  (25,903)  (24,888)
Net Loans  2,680,623   2,557,632 
Other real estate and repossessed assets  1,990   1,299 
Property and equipment, net  37,703   38,777 
Bank-owned life insurance  55,580   55,068 
Deferred tax assets, net  2,746   5,779 
Capitalized mortgage loan servicing rights  17,894   21,400 
Other intangibles  5,870   6,415 
Goodwill  28,300   28,300 
Accrued income and other assets  40,414   34,870 
Total Assets $3,438,302  $3,353,281 
     
Liabilities and Shareholders' Equity
Deposits    
Non-interest bearing $864,481  $879,549 
Savings and interest-bearing checking  1,158,910   1,194,865 
Reciprocal  326,326   182,072 
Time  384,477   385,981 
Brokered time  244,691   270,961 
Total Deposits  2,978,885   2,913,428 
Other borrowings  41,144   25,700 
Subordinated debentures  39,422   39,388 
Accrued expenses and other liabilities  48,005   35,771 
Total Liabilities  3,107,456   3,014,287 
     
Shareholders’ Equity    
Preferred stock, no par value, 200,000 shares authorized; none issued or outstanding  -   - 
Common stock, no par value, 500,000,000 shares authorized; issued and outstanding:    
22,498,776 shares at June 30, 2019 and 23,579,725 shares at December 31, 2018  351,894   377,372 
Accumulated deficit  (16,617)  (28,270)
Accumulated other comprehensive loss  (4,431)  (10,108)
Total Shareholders’ Equity  330,846   338,994 
Total Liabilities and Shareholders’ Equity $3,438,302  $3,353,281 
     
     

 

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

 

INDEPENDENT BANK CORPORATION AND SUBSIDIARIES
Selected Financial Data
           
 June 30, March 31, December 31, September 30, June 30, 
 2019 2019 2018 2018 2018 
                 
 (unaudited) 
 (Dollars in thousands except per share data)
Three Months Ended                
Net interest income$30,756 $30,243 $30,669 $29,697  $28,980 
Provision for loan losses 652  664  591  (53)  650 
Non-interest income 9,905  9,959  8,951  11,836   12,315 
Non-interest expense 26,592  27,990  26,825  26,740   29,761 
Income before income tax 13,417  11,548  12,204  14,846   10,884 
Income tax expense 2,687  2,167  2,268  2,921   2,067 
Net income$10,730 $9,381 $9,936 $11,925  $8,817 
                 
Basic earnings per share$0.47 $0.40 $0.41 $0.49  $0.37 
Diluted earnings per share 0.46  0.39  0.41  0.49   0.36 
Cash dividend per share 0.18  0.18  0.15  0.15   0.15 
                 
Average shares outstanding 23,035,526  23,588,313  23,988,810  24,148,768   24,109,322 
Average diluted shares outstanding 23,313,346  23,884,744  24,339,782  24,514,814   24,509,963 
                 
Performance Ratios                
Return on average assets 1.27% 1.13% 1.18% 1.46 % 1.12%
Return on average common equity 12.72  11.14  11.43  13.83   10.57 
Efficiency ratio (1) 64.57  69.27  67.11  63.63   71.14 
                 
As a Percent of Average Interest-Earning Assets (1)                
Interest income 4.73% 4.70% 4.66% 4.53 % 4.49%
Interest expense 0.86  0.82  0.73  0.62   0.56 
Net interest income 3.87  3.88  3.93  3.91   3.93 
                 
Average Balances                
Loans$2,699,648 $2,621,871 $2,627,614 $2,550,302  $2,449,056 
Securities available for sale 441,523  446,734  433,903  442,949   470,427 
Total earning assets 3,191,264  3,152,177  3,121,640  3,038,221   2,963,982 
Total assets 3,388,398  3,357,003  3,327,002  3,247,603   3,168,196 
Deposits 2,929,885  2,909,096  2,873,889  2,789,969   2,701,362 
Interest bearing liabilities 2,155,660  2,115,549  2,058,720  1,986,905   1,946,287 
Shareholders' equity 338,254  341,592  344,779  341,998   334,626 
                 
End of Period                
Capital                
Tangible common equity ratio 8.72% 9.26% 9.17% 9.51 % 9.41%
Average equity to average assets 9.98  10.18  10.36  10.53   10.56 
Tangible common equity per share                
of common stock$13.19 $13.17 $12.90 $12.84  $12.47 
Total shares outstanding 22,498,776  23,560,179  23,579,725  24,150,341   24,143,044 
                 
Selected Balances                
Loans$2,706,526 $2,618,795 $2,582,520 $2,562,578  $2,467,317 
Securities available for sale 430,305  461,531  427,926  436,957   450,593 
Total earning assets 3,239,247  3,180,655  3,162,911  3,078,083   3,023,454 
Total assets 3,438,302  3,383,606  3,353,281  3,297,124   3,234,522 
Deposits 2,978,885  2,934,225  2,913,428  2,798,643   2,780,516 
Interest bearing liabilities 2,194,970  2,141,083  2,098,967  2,036,770   1,988,495 
Shareholders' equity 330,846  344,726  338,994  345,204   337,083 
                 
(1)  Presented on a fully tax equivalent basis assuming a marginal tax rate of 21%.     
      

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

 

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

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

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Source: Independent Bank Corporation

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