INDEPENDENT BANK CORPORATION
|
(Exact name of registrant as specified in its charter)
|
Michigan
|
38-2032782
|
|
(State or jurisdiction of Incorporation or Organization)
|
(I.R.S. Employer Identification Number)
|
230 West Main Street, P.O. Box 491, Ionia, Michigan 48846
|
(Address of principal executive offices)
|
NONE
|
Former name, address and fiscal year, if changed since last report.
|
Common stock, no par value
|
8,274,057
|
|
Class
|
Outstanding at May 6, 2011
|
Number(s)
|
||||
PART I -
|
Financial Information
|
|||
Item 1.
|
3
|
|||
4
|
||||
5
|
||||
6
|
||||
7-51
|
||||
Item 2.
|
52-82
|
|||
Item 3.
|
83
|
|||
Item 4.
|
83
|
|||
PART II -
|
Other Information
|
|||
Item 1A
|
84
|
|||
Item 2.
|
84
|
|||
Item 3b.
|
84
|
|||
Item 6.
|
84-85
|
|
·
|
our ability to successfully raise new equity capital through a public offering of our common stock, effect a conversion of our outstanding preferred stock held by the U.S. Treasury into our common stock, and otherwise implement our capital restoration plan;
|
|
·
|
the failure of assumptions underlying the establishment of and provisions made to our allowance for loan losses;
|
|
·
|
the timing and pace of an economic recovery in Michigan and the United States in general, including regional and local real estate markets;
|
|
·
|
the ability of our Bank to remain well-capitalized;
|
|
·
|
the failure of assumptions underlying our estimate of probable incurred losses from vehicle service contract payment plan counterparty contingencies, including our assumptions regarding future cancellations of vehicle service contracts, the value to us of collateral that may be available to recover funds due from our counterparties, and our ability to enforce the contractual obligations of our counterparties to pay amounts owing to us;
|
|
·
|
further adverse developments in the vehicle service contract industry, whose recent turmoil has increased the credit risk and reputation risk for our subsidiary, Mepco Finance Corporation;
|
|
·
|
potential limitations on our ability to access and rely on wholesale funding sources;
|
|
·
|
the risk that sales of our common stock could trigger a reduction in the amount of net operating loss carryforwards that we may be able to utilize for income tax purposes;
|
|
·
|
the continued services of our management team, particularly as we work through our asset quality issues and the implementation of our capital restoration plan;
|
|
·
|
implementation of the recently enacted Dodd-Frank Wall Street Reform and Consumer Protection Act or other new legislation, which may have significant effects on us and the financial services industry, the exact nature and extent of which cannot be determined at this time; and
|
|
·
|
the risk that our common stock may be delisted from the Nasdaq Global Select Market.
|
Part I - Item
1.
|
INDEPENDENT BANK CORPORATION AND SUBSIDIARIES
|
March 31,
|
December 31,
|
|||||||
2011
|
2010
|
|||||||
(unaudited)
|
||||||||
Assets
|
(In thousands, except share amounts)
|
|||||||
Cash and due from banks
|
$ | 50,926 | $ | 48,933 | ||||
Interest bearing deposits
|
337,064 | 336,441 | ||||||
Cash and Cash Equivalents
|
387,990 | 385,374 | ||||||
Trading securities
|
105 | 32 | ||||||
Securities available for sale
|
111,936 | 67,864 | ||||||
Federal Home Loan Bank and Federal Reserve Bank stock, at cost
|
23,630 | 23,630 | ||||||
Loans held for sale, carried at fair value
|
20,351 | 50,098 | ||||||
Loans
|
||||||||
Commercial
|
689,772 | 707,530 | ||||||
Mortgage
|
639,372 | 658,679 | ||||||
Installment
|
232,700 | 245,644 | ||||||
Payment plan receivables
|
170,626 | 201,263 | ||||||
Total Loans
|
1,732,470 | 1,813,116 | ||||||
Allowance for loan losses
|
(66,135 | ) | (67,915 | ) | ||||
Net Loans
|
1,666,335 | 1,745,201 | ||||||
Other real estate and repossessed assets
|
37,513 | 39,413 | ||||||
Property and equipment, net
|
67,033 | 68,359 | ||||||
Bank-owned life insurance
|
48,347 | 47,922 | ||||||
Other intangibles
|
8,637 | 8,980 | ||||||
Capitalized mortgage loan servicing rights
|
15,531 | 14,661 | ||||||
Prepaid FDIC deposit insurance assessment
|
14,751 | 15,899 | ||||||
Vehicle service contract counterparty receivables, net
|
40,592 | 37,270 | ||||||
Accrued income and other assets
|
33,453 | 30,545 | ||||||
Total Assets
|
$ | 2,476,204 | $ | 2,535,248 | ||||
Liabilities and Shareholders' Equity
|
||||||||
Deposits
|
||||||||
Non-interest bearing
|
$ | 444,707 | $ | 451,856 | ||||
Savings and NOW
|
1,005,756 | 995,662 | ||||||
Retail time
|
522,338 | 530,774 | ||||||
Brokered time
|
250,166 | 273,546 | ||||||
Total Deposits
|
2,222,967 | 2,251,838 | ||||||
Other borrowings
|
46,015 | 71,032 | ||||||
Subordinated debentures
|
50,175 | 50,175 | ||||||
Vehicle service contract counterparty payables
|
13,668 | 11,739 | ||||||
Accrued expenses and other liabilities
|
30,441 | 31,379 | ||||||
Total Liabilities
|
2,363,266 | 2,416,163 | ||||||
Shareholders' Equity
|
||||||||
Preferred stock, no par value, 200,000 shares authorized; 74,426 shares issued and outstanding at March 31, 2011 and December 31, 2010; per share liquidation preference: $1,049 at March 31, 2011 and $1,036 at December 31, 2010
|
76,708 | 75,700 | ||||||
Common stock, no par value–authorized: 500,000,000 shares at March 31, 2011 and December 31, 2010; issued and outstanding: 8,123,969 shares at March 31, 2011 and 7,860,483 shares at December 31, 2010
|
247,406 | 246,407 | ||||||
Accumulated deficit
|
(198,311 | ) | (189,902 | ) | ||||
Accumulated other comprehensive loss
|
(12,865 | ) | (13,120 | ) | ||||
Total Shareholders' Equity
|
112,938 | 119,085 | ||||||
Total Liabilities and Shareholders' Equity
|
$ | 2,476,204 | $ | 2,535,248 |
Three Months Ended
|
||||||||
March 31,
|
||||||||
2011
|
2010
|
|||||||
(unaudited)
|
||||||||
Interest Income
|
(In thousands, except per share data)
|
|||||||
Interest and fees on loans
|
$ | 29,484 | $ | 39,027 | ||||
Interest on securities
|
||||||||
Taxable
|
467 | 1,160 | ||||||
Tax-exempt
|
332 | 685 | ||||||
Other investments
|
435 | 372 | ||||||
Total Interest Income
|
30,718 | 41,244 | ||||||
Interest Expense
|
||||||||
Deposits
|
4,945 | 8,219 | ||||||
Other borrowings
|
1,323 | 2,994 | ||||||
Total Interest Expense
|
6,268 | 11,213 | ||||||
Net Interest Income
|
24,450 | 30,031 | ||||||
Provision for loan losses
|
11,076 | 17,014 | ||||||
Net Interest Income After Provision for Loan Losses
|
13,374 | 13,017 | ||||||
Non-interest Income
|
||||||||
Service charges on deposit accounts
|
4,282 | 5,275 | ||||||
Net gains (losses) on assets
|
||||||||
Mortgage loans
|
1,935 | 1,843 | ||||||
Securities
|
213 | 265 | ||||||
Other than temporary loss on securities available for sale
|
||||||||
Total impairment loss
|
(469 | ) | (118 | ) | ||||
Loss recognized in other comprehensive income
|
327 | - | ||||||
Net impairment loss recognized in earnings
|
(142 | ) | (118 | ) | ||||
Interchange income
|
2,168 | 1,936 | ||||||
Mortgage loan servicing
|
896 | 432 | ||||||
Title insurance fees
|
473 | 494 | ||||||
Other
|
2,886 | 2,254 | ||||||
Total Non-interest Income
|
12,711 | 12,381 | ||||||
Non-interest Expense
|
||||||||
Compensation and employee benefits
|
12,349 | 13,213 | ||||||
Loan and collection
|
3,867 | 4,786 | ||||||
Occupancy, net
|
3,101 | 2,909 | ||||||
Vehicle service contract counterparty contingencies
|
2,346 | 3,418 | ||||||
Data processing
|
2,310 | 2,469 | ||||||
Furniture, fixtures and equipment
|
1,418 | 1,719 | ||||||
Net losses on other real estate and repossessed assets
|
1,406 | 2,029 | ||||||
FDIC deposit insurance
|
1,235 | 1,802 | ||||||
Credit card and bank service fees
|
1,047 | 1,675 | ||||||
Communications
|
948 | 1,073 | ||||||
Legal and professional fees
|
778 | 1,136 | ||||||
Advertising
|
554 | 779 | ||||||
Costs related to unfunded lending commitments
|
95 | 56 | ||||||
Other
|
2,040 | 2,435 | ||||||
Total Non-interest Expense
|
33,494 | 39,499 | ||||||
Loss Before Income Tax
|
(7,409 | ) | (14,101 | ) | ||||
Income tax benefit
|
(8 | ) | (264 | ) | ||||
Net Loss
|
$ | (7,401 | ) | $ | (13,837 | ) | ||
Preferred stock dividends and discount accretion
|
1,008 | 1,077 | ||||||
Net Loss Applicable to Common Stock
|
$ | (8,409 | ) | $ | (14,914 | ) | ||
Net Loss Per Common Share
|
||||||||
Basic
|
$ | (1.06 | ) | $ | (6.21 | ) | ||
Diluted
|
(1.06 | ) | (6.21 | ) | ||||
Dividends Per Common Share
|
||||||||
Declared
|
$ | .00 | $ | .00 | ||||
Paid
|
.00 | .00 |
Three months ended
|
||||||||
March 31,
|
||||||||
2011
|
2010
|
|||||||
(unaudited)
|
||||||||
(In thousands)
|
||||||||
Net Loss
|
$ | (7,401 | ) | $ | (13,837 | ) | ||
Adjustments to Reconcile Net Loss to Net Cash from Operating Activities
|
||||||||
Proceeds from sales of loans held for sale
|
122,838 | 91,496 | ||||||
Disbursements for loans held for sale
|
(91,156 | ) | (85,950 | ) | ||||
Provision for loan losses
|
11,076 | 17,014 | ||||||
Depreciation, amortization of intangible assets and premiums and accretion of discounts on securities and loans
|
(3,736 | ) | (9,321 | ) | ||||
Net gains on sales of mortgage loans
|
(1,935 | ) | (1,843 | ) | ||||
Net gains on securities
|
(213 | ) | (265 | ) | ||||
Securities impairment recognized in earnings
|
142 | 118 | ||||||
Net losses on other real estate and repossessed assets
|
1,406 | 2,029 | ||||||
Vehicle service contract counterparty contingencies
|
2,346 | 3,418 | ||||||
Deferred loan fees
|
(28 | ) | 329 | |||||
Share based compensation
|
153 | 157 | ||||||
(Increase) decrease in accrued income and other assets
|
1,821 | 1,524 | ||||||
Increase (decrease) in accrued expenses and other liabilities
|
(562 | ) | 5,460 | |||||
42,152 | 24,166 | |||||||
Net Cash from Operating Activities
|
34,751 | 10,329 | ||||||
Cash Flow from Investing Activities
|
||||||||
Proceeds from the sale of securities available for sale
|
12,399 | 25,415 | ||||||
Proceeds from the maturity of securities available for sale
|
295 | 890 | ||||||
Principal payments received on securities available for sale
|
1,228 | 6,006 | ||||||
Purchases of securities available for sale
|
(62,894 | ) | (15,188 | ) | ||||
Net decrease in portfolio loans (loans originated, net of principal payments)
|
63,644 | 100,476 | ||||||
Proceeds from the collection of vehicle service contract counterparty receivables
|
544 | - | ||||||
Proceeds from the sale of other real estate and repossessed assets
|
4,519 | 4,008 | ||||||
Capital expenditures
|
(757 | ) | (1,432 | ) | ||||
Net Cash from Investing Activities
|
18,978 | 120,175 | ||||||
Cash Flow used in Financing Activities
|
||||||||
Net decrease in total deposits
|
(28,871 | ) | (68,226 | ) | ||||
Net decrease in other borrowings
|
(6 | ) | (1,648 | ) | ||||
Proceeds from Federal Home Loan Bank advances
|
4,000 | 28,000 | ||||||
Payments of Federal Home Loan Bank advances
|
(29,011 | ) | (10 | ) | ||||
Net increase (decrease) in vehicle service contract counterparty payables
|
1,929 | (6,922 | ) | |||||
Proceeds from issuance of common stock
|
846 | - | ||||||
Net Cash used in Financing Activities
|
(51,113 | ) | (48,806 | ) | ||||
Net Increase in Cash and Cash Equivalents
|
2,616 | 81,698 | ||||||
Cash and Cash Equivalents at Beginning of Period
|
385,374 | 288,736 | ||||||
Cash and Cash Equivalents at End of Period
|
$ | 387,990 | $ | 370,434 | ||||
Cash paid during the period for
|
||||||||
Interest
|
$ | 5,806 | $ | 9,892 | ||||
Income taxes
|
20 | 62 | ||||||
Transfer of loans to other real estate and repossessed assets
|
4,025 | 14,787 | ||||||
Transfer of payment plan receivables to vehicle service contract counterparty receivables
|
6,312 | 17,377 |
Three months ended
|
||||||||
March 31,
|
||||||||
2011
|
2010
|
|||||||
(unaudited)
|
||||||||
(In thousands)
|
||||||||
Balance at beginning of period
|
$ | 119,085 | $ | 109,861 | ||||
Net loss
|
(7,401 | ) | (13,837 | ) | ||||
Preferred dividends
|
- | (900 | ) | |||||
Issuance of common stock
|
846 | - | ||||||
Share based compensation
|
153 | 157 | ||||||
Net change in accumulated other comprehensive loss, net of related tax effect
|
255 | 1,930 | ||||||
Balance at end of period
|
$ | 112,938 | $ | 97,211 |
Amortized
|
Unrealized
|
|||||||||||||||
Cost
|
Gains
|
Losses
|
Fair Value
|
|||||||||||||
(In thousands)
|
||||||||||||||||
March 31, 2011
|
||||||||||||||||
U.S. Treasury
|
$ | 50,656 | $ | 14 | $ | - | $ | 50,670 | ||||||||
U.S. agency residential mortgage-backed
|
12,820 | 227 | 23 | 13,024 | ||||||||||||
Private label residential mortgage-backed
|
17,156 | 23 | 4,032 | 13,147 | ||||||||||||
Obligations of states and political subdivisions
|
31,207 | 393 | 538 | 31,062 | ||||||||||||
Trust preferred
|
4,691 | - | 658 | 4,033 | ||||||||||||
Total
|
$ | 116,530 | $ | 657 | $ | 5,251 | $ | 111,936 | ||||||||
December 31, 2010
|
||||||||||||||||
U.S. agency residential mortgage-backed
|
$ | 13,103 | $ | 249 | $ | 21 | $ | 13,331 | ||||||||
Private label residential mortgage-backed
|
18,203 | 31 | 4,050 | 14,184 | ||||||||||||
Obligations of states and political subdivisions
|
31,534 | 375 | 650 | 31,259 | ||||||||||||
Trust preferred
|
9,472 | 116 | 498 | 9,090 | ||||||||||||
Total
|
$ | 72,312 | $ | 771 | $ | 5,219 | $ | 67,864 |
Less Than Twelve Months
|
Twelve Months or More
|
Total
|
||||||||||||||||||||||
Unrealized
|
Unrealized
|
Unrealized
|
||||||||||||||||||||||
Fair Value
|
Losses
|
Fair Value
|
Losses
|
Fair Value
|
Losses
|
|||||||||||||||||||
(In thousands)
|
||||||||||||||||||||||||
March 31, 2011
|
||||||||||||||||||||||||
U.S. agency residential mortgage-backed
|
$ | 2,715 | $ | 23 | $ | - | $ | - | $ | 2,715 | $ | 23 | ||||||||||||
Private label residential mortgage-backed
|
285 | 34 | 11,830 | 3,998 | 12,115 | 4,032 | ||||||||||||||||||
Obligations of states and political political subdivisions
|
6,115 | 353 | 1,836 | 185 | 7,951 | 538 | ||||||||||||||||||
Trust preferred
|
- | - | 4,003 | 658 | 4,003 | 658 | ||||||||||||||||||
Total
|
$ | 9,115 | $ | 410 | $ | 17,669 | $ | 4,841 | $ | 26,784 | $ | 5,251 | ||||||||||||
December 31, 2010
|
||||||||||||||||||||||||
U.S. agency residential mortgage-backed
|
$ | 2,733 | $ | 21 | $ | - | $ | - | $ | 2,733 | $ | 21 | ||||||||||||
Private label residential mortgage-backed
|
- | - | 12,624 | 4,050 | 12,624 | 4,050 | ||||||||||||||||||
Obligations of states and political subdivisions
|
8,371 | 428 | 1,796 | 222 | 10,167 | 650 | ||||||||||||||||||
Trust preferred
|
- | - | 2,384 | 498 | 2,384 | 498 | ||||||||||||||||||
Total
|
$ | 11,104 | $ | 449 | $ | 16,804 | $ | 4,770 | $ | 27,908 | $ | 5,219 |
March 31, 2011
|
December 31, 2010
|
|||||||||||||||
Fair
Value
|
Net
Unrealized
Gain (Loss)
|
Fair
Value
|
Net
Unrealized
Gain (Loss)
|
|||||||||||||
(In thousands)
|
||||||||||||||||
Private label residential mortgage-backed
|
||||||||||||||||
Jumbo
|
$ | 7,671 | $ | (2,596 | ) | $ | 8,429 | $ | (2,600 | ) | ||||||
Alt-A
|
5,476 | (1,413 | ) | 5,755 | (1,419 | ) |
March 31, 2011
|
December 31, 2010
|
|||||||||||||||
Fair
Value
|
Net
Unrealized
Gain (Loss)
|
Fair
Value
|
Net
Unrealized
Gain (Loss)
|
|||||||||||||
(In thousands)
|
||||||||||||||||
Trust preferred securities
|
||||||||||||||||
Rated issues
|
$ | 1,577 | $ | (308 | ) | $ | 6,290 | $ | (375 | ) | ||||||
Unrated issues - no OTTI
|
2,456 | (350 | ) | 2,800 | (7 | ) |
2011
|
2010
|
|||||||
(In thousands)
|
||||||||
Balance at beginning of year
|
$ | 710 | $ | 248 | ||||
Additions to credit losses on securities for which no previous OTTI was recognized
|
- | - | ||||||
Increases to credit losses on securities for which OTTI was previously recognized
|
142 | 118 | ||||||
Total
|
$ | 852 | $ | 366 |
Amortized
|
Fair
|
|||||||
Cost
|
Value
|
|||||||
(In thousands)
|
||||||||
Maturing within one year
|
$ | 2,227 | $ | 2,247 | ||||
Maturing after one year but within five years
|
59,039 | 59,298 | ||||||
Maturing after five years but within ten years
|
10,183 | 10,034 | ||||||
Maturing after ten years
|
15,105 | 14,186 | ||||||
86,554 | 85,765 | |||||||
U.S. agency residential mortgage-backed
|
12,820 | 13,024 | ||||||
Private label residential mortgage-backed
|
17,156 | 13,147 | ||||||
Total
|
$ | 116,530 | $ | 111,936 |
Realized
|
||||||||||||
Proceeds
|
Gains
|
Losses(1)
|
||||||||||
(In thousands)
|
||||||||||||
2011
|
$ | 12,399 | $ | 185 | $ | 45 | ||||||
2010
|
25,415 | 304 | 34 |
An analysis of the allowance for loan losses by portfolio segment for the three months ended March 31, follows:
|
||||||||||||||||||||||||
Commercial
|
Mortgage
|
Installment
|
Payment
Plan
Receivables
|
Unallocated
|
Total
|
|||||||||||||||||||
(In thousands)
|
||||||||||||||||||||||||
2011
|
||||||||||||||||||||||||
Balance at beginning of period
|
$ | 23,836 | $ | 22,642 | $ | 6,769 | $ | 389 | $ | 14,279 | $ | 67,915 | ||||||||||||
Additions (deductions)
|
||||||||||||||||||||||||
Provision for loan losses
|
4,710 | 5,743 | 1,235 | 8 | (620 | ) | 11,076 | |||||||||||||||||
Recoveries credited to allowance
|
219 | 355 | 359 | 2 | - | 935 | ||||||||||||||||||
Loans charged against the allowance
|
(7,486 | ) | (4,595 | ) | (1,644 | ) | (66 | ) | - | (13,791 | ) | |||||||||||||
Balance at end of period
|
$ | 21,279 | $ | 24,145 | $ | 6,719 | $ | 333 | $ | 13,659 | $ | 66,135 | ||||||||||||
2010
|
||||||||||||||||||||||||
Balance at beginning of period
|
$ | 41,259 | $ | 18,434 | $ | 6,404 | $ | 754 | $ | 14,866 | $ | 81,717 | ||||||||||||
Additions (deductions)
|
||||||||||||||||||||||||
Provision for loan losses
|
8,274 | 6,610 | 2,395 | (92 | ) | (173 | ) | 17,014 | ||||||||||||||||
Recoveries credited to allowance
|
300 | 300 | 391 | - | - | 991 | ||||||||||||||||||
Loans charged against the allowance
|
(16,025 | ) | (5,304 | ) | (2,247 | ) | (14 | ) | - | (23,590 | ) | |||||||||||||
Balance at end of period
|
$ | 33,808 | $ | 20,040 | $ | 6,943 | $ | 648 | $ | 14,693 | $ | 76,132 |
Allowance for loan losses and recorded investment in loans by portfolio segment follows:
|
||||||||||||||||||||||||
Commercial
|
Mortgage
|
Installment
|
Payment
Plan
Receivables
|
Unallocated
|
Total
|
|||||||||||||||||||
(In thousands)
|
||||||||||||||||||||||||
March 31, 2011
|
||||||||||||||||||||||||
Allowance for loan losses:
|
||||||||||||||||||||||||
Individually evaluated for impairment
|
$ | 9,036 | $ | 11,906 | $ | 2,140 | $ | - | $ | - | $ | 23,082 | ||||||||||||
Collectively evaluated for impairment
|
12,243 | 12,239 | 4,579 | 333 | 13,659 | 43,053 | ||||||||||||||||||
Total ending allowance balance
|
$ | 21,279 | $ | 24,145 | $ | 6,719 | $ | 333 | $ | 13,659 | $ | 66,135 | ||||||||||||
Loans
|
||||||||||||||||||||||||
Individually evaluated for impairment
|
$ | 35,962 | $ | 107,347 | $ | 7,827 | $ | - | $ | 151,136 | ||||||||||||||
Collectively evaluated for impairment
|
656,040 | 535,097 | 225,773 | 170,626 | 1,587,536 | |||||||||||||||||||
Total loans recorded investment
|
692,002 | 642,444 | 233,600 | 170,626 | 1,738,672 | |||||||||||||||||||
Accrued interest included in recorded investment
|
2,230 | 3,072 | 900 | - | 6,202 | |||||||||||||||||||
Total Loans
|
$ | 689,772 | $ | 639,372 | $ | 232,700 | $ | 170,626 | $ | 1,732,470 | ||||||||||||||
December 31, 2010
|
||||||||||||||||||||||||
Allowance for loan losses:
|
||||||||||||||||||||||||
Individually evaluated for impairment
|
$ | 11,522 | $ | 11,567 | $ | 1,836 | $ | - | $ | - | $ | 24,925 | ||||||||||||
Collectively evaluated for impairment
|
12,314 | 11,075 | 4,933 | 389 | 14,279 | 42,990 | ||||||||||||||||||
Total ending allowance balance
|
$ | 23,836 | $ | 22,642 | $ | 6,769 | $ | 389 | $ | 14,279 | $ | 67,915 | ||||||||||||
Loans
|
||||||||||||||||||||||||
Individually evaluated for impairment
|
$ | 53,415 | $ | 107,026 | $ | 6,904 | $ | - | $ | 167,345 | ||||||||||||||
Collectively evaluated for impairment
|
656,681 | 554,534 | 239,835 | 201,263 | 1,652,313 | |||||||||||||||||||
Total loans recorded investment
|
710,096 | 661,560 | 246,739 | 201,263 | 1,819,658 | |||||||||||||||||||
Accrued interest included in recorded investment
|
2,566 | 2,881 | 1,095 | - | 6,542 | |||||||||||||||||||
Total Loans
|
$ | 707,530 | $ | 658,679 | $ | 245,644 | $ | 201,263 | $ | 1,813,116 |
90+ and
|
Total Non-
|
|||||||||||
Still
|
Non-
|
Performing
|
||||||||||
Accruing
|
Accrual
|
Loans
|
||||||||||
(In thousands)
|
||||||||||||
March 31, 2011
|
||||||||||||
Commercial
|
||||||||||||
Income producing - real estate
|
$ | - | $ | 10,968 | $ | 10,968 | ||||||
Land, land development and
|
||||||||||||
construction - real estate
|
- | 7,785 | 7,785 | |||||||||
Commercial and industrial
|
62 | 7,699 | 7,761 | |||||||||
Mortgage
|
||||||||||||
1-4 family
|
257 | 16,137 | 16,394 | |||||||||
Resort lending
|
- | 9,042 | 9,042 | |||||||||
Home equity line of credit - 1st lien
|
- | 1,009 | 1,009 | |||||||||
Home equity line of credit - 2nd lien
|
- | 1,277 | 1,277 | |||||||||
Installment
|
||||||||||||
Home equity installment - 1st lien
|
- | 1,615 | 1,615 | |||||||||
Home equity installment - 2nd lien
|
- | 1,236 | 1,236 | |||||||||
Loans not secured by real estate
|
- | 747 | 747 | |||||||||
Other
|
- | 62 | 62 | |||||||||
Payment plan receivables
|
||||||||||||
Full refund
|
- | 1,442 | 1,442 | |||||||||
Partial refund
|
- | 456 | 456 | |||||||||
Other
|
- | 68 | 68 | |||||||||
Total recorded investment
|
$ | 319 | $ | 59,543 | $ | 59,862 | ||||||
Accrued interest included in recorded investment
|
$ | 10 | $ | - | $ | 10 | ||||||
December 31, 2010
|
||||||||||||
Commercial
|
||||||||||||
Income producing - real estate
|
$ | 276 | $ | 11,925 | $ | 12,201 | ||||||
Land, land development and
|
||||||||||||
construction - real estate
|
- | 9,672 | 9,672 | |||||||||
Commercial and industrial
|
675 | 7,016 | 7,691 | |||||||||
Mortgage
|
||||||||||||
1-4 family
|
- | 19,428 | 19,428 | |||||||||
Resort lending
|
- | 9,206 | 9,206 | |||||||||
Home equity line of credit - 1st lien
|
- | 1,080 | 1,080 | |||||||||
Home equity line of credit - 2nd lien
|
- | 1,153 | 1,153 | |||||||||
Installment
|
||||||||||||
Home equity installment - 1st lien
|
- | 1,916 | 1,916 | |||||||||
Home equity installment - 2nd lien
|
- | 1,373 | 1,373 | |||||||||
Loans not secured by real estate
|
- | 923 | 923 | |||||||||
Other
|
- | 34 | 34 | |||||||||
Payment plan receivables
|
||||||||||||
Full refund
|
- | 2,470 | 2,470 | |||||||||
Partial refund
|
- | 329 | 329 | |||||||||
Other
|
- | 127 | 127 | |||||||||
Total recorded investment
|
$ | 951 | $ | 66,652 | $ | 67,603 | ||||||
Accrued interest included in recorded investment
|
$ | 23 | $ | - | $ | 23 |
An aging analysis of loans by class follows:
|
||||||||||||||||||||||||
Loans Past Due
|
Loans not
|
Total
|
||||||||||||||||||||||
30-59 days
|
60-89 days
|
90+ days
|
Total
|
Past Due
|
Loans
|
|||||||||||||||||||
(In thousands)
|
||||||||||||||||||||||||
March 31, 2011
|
||||||||||||||||||||||||
Commercial | ||||||||||||||||||||||||
Income producing - real estate
|
$ | 3,469 | $ | 1,288 | $ | 5,776 | $ | 10,533 | $ | 288,879 | $ | 299,412 | ||||||||||||
Land, land development and construction - real estate
|
78 | 329 | 4,642 | 5,049 | 55,749 | 60,798 | ||||||||||||||||||
Commercial and industrial
|
3,064 | 1,194 | 4,842 | 9,100 | 322,692 | 331,792 | ||||||||||||||||||
Mortgage
|
||||||||||||||||||||||||
1-4 family
|
2,962 | 1,533 | 16,394 | 20,889 | 315,950 | 336,839 | ||||||||||||||||||
Resort lending
|
2,175 | 973 | 9,042 | 12,190 | 207,403 | 219,593 | ||||||||||||||||||
Home equity line of credit - 1st lien
|
240 | 151 | 1,009 | 1,400 | 25,164 | 26,564 | ||||||||||||||||||
Home equity line of credit - 2nd lien
|
780 | 249 | 1,277 | 2,306 | 57,142 | 59,448 | ||||||||||||||||||
Installment
|
||||||||||||||||||||||||
Home equity installment - 1st lien
|
563 | 151 | 1,615 | 2,329 | 47,949 | 50,278 | ||||||||||||||||||
Home equity installment - 2nd lien
|
600 | 261 | 1,236 | 2,097 | 59,367 | 61,464 | ||||||||||||||||||
Loans not secured by real estate
|
894 | 338 | 747 | 1,979 | 116,703 | 118,682 | ||||||||||||||||||
Other
|
63 | 1 | 62 | 126 | 3,050 | 3,176 | ||||||||||||||||||
Payment plan receivables
|
||||||||||||||||||||||||
Full refund
|
4,088 | 2,136 | 1,442 | 7,666 | 131,315 | 138,981 | ||||||||||||||||||
Partial refund
|
807 | 567 | 456 | 1,830 | 23,758 | 25,588 | ||||||||||||||||||
Other
|
315 | 125 | 68 | 508 | 5,549 | 6,057 | ||||||||||||||||||
Total recorded investment
|
$ | 20,098 | $ | 9,296 | $ | 48,608 | $ | 78,002 | $ | 1,660,670 | $ | 1,738,672 | ||||||||||||
Accrued interest included in recorded investment
|
$ | 190 | $ | 109 | $ | 10 | $ | 309 | $ | 5,893 | $ | 6,202 | ||||||||||||
December 31, 2010
|
||||||||||||||||||||||||
Commercial
|
||||||||||||||||||||||||
Income producing - real estate
|
$ | 3,269 | $ | 914 | $ | 8,978 | $ | 13,161 | $ | 295,948 | $ | 309,109 | ||||||||||||
Land, land development and construction - real estate
|
1,923 | 147 | 4,919 | 6,989 | 55,693 | 62,682 | ||||||||||||||||||
Commercial and industrial
|
1,636 | 2,204 | 4,665 | 8,505 | 329,800 | 338,305 | ||||||||||||||||||
Mortgage
|
||||||||||||||||||||||||
1-4 family
|
4,074 | 2,349 | 19,428 | 25,851 | 319,361 | 345,212 | ||||||||||||||||||
Resort lending
|
2,667 | 1,003 | 9,206 | 12,876 | 215,398 | 228,274 | ||||||||||||||||||
Home equity line of credit - 1st lien
|
576 | - | 1,080 | 1,656 | 25,951 | 27,607 | ||||||||||||||||||
Home equity line of credit - 2nd lien
|
723 | 464 | 1,153 | 2,340 | 58,127 | 60,467 | ||||||||||||||||||
Installment
|
||||||||||||||||||||||||
Home equity installment - 1st lien
|
472 | 228 | 1,916 | 2,616 | 50,150 | 52,766 | ||||||||||||||||||
Home equity installment - 2nd lien
|
746 | 529 | 1,373 | 2,648 | 63,345 | 65,993 | ||||||||||||||||||
Loans not secured by real estate
|
1,302 | 348 | 923 | 2,573 | 122,066 | 124,639 | ||||||||||||||||||
Other
|
51 | 16 | 34 | 101 | 3,240 | 3,341 | ||||||||||||||||||
Payment plan receivables
|
||||||||||||||||||||||||
Full refund
|
6,475 | 3,957 | 2,470 | 12,902 | 148,751 | 161,653 | ||||||||||||||||||
Partial refund
|
1,134 | 642 | 329 | 2,105 | 24,170 | 26,275 | ||||||||||||||||||
Other
|
583 | 166 | 127 | 876 | 12,459 | 13,335 | ||||||||||||||||||
Total recorded investment
|
$ | 25,631 | $ | 12,967 | $ | 56,601 | $ | 95,199 | $ | 1,724,459 | $ | 1,819,658 | ||||||||||||
Accrued interest included in recorded investment
|
$ | 225 | $ | 133 | $ | 23 | $ | 381 | $ | 6,161 | $ | 6,542 |
Impaired loans are as follows :
|
||||||||
March 31,
|
December 31,
|
|||||||
2011
|
2010
|
|||||||
(In thousands)
|
||||||||
Impaired loans with no allocated allowance
|
||||||||
TDR
|
$ | 24,319 | $ | 25,754 | ||||
Non - TDR
|
1,945 | 4,495 | ||||||
Impaired loans with an allocated allowance
|
||||||||
TDR - allowance based on collateral
|
20,467 | 19,418 | ||||||
TDR - allowance based on present value cash flow
|
87,079 | 93,070 | ||||||
Non - TDR - allowance based on collateral
|
19,358 | 21,623 | ||||||
Non - TDR - allowance based on present value cash flow
|
- | 2,351 | ||||||
Total impaired loans
|
$ | 153,168 | $ | 166,711 | ||||
Amount of allowance for loan losses allocated
|
||||||||
TDR - allowance based on collateral
|
$ | 5,168 | $ | 5,462 | ||||
TDR - allowance based on present value cash flow
|
12,205 | 12,086 | ||||||
Non - TDR - allowance based on collateral
|
5,709 | 6,644 | ||||||
Non - TDR - allowance based on present value cash flow
|
- | 733 | ||||||
Total amount of allowance for loan losses allocated
|
$ | 23,082 | $ | 24,925 |
Impaired loans by class at March 31, 2011 are as follows (1):
|
|
|||||||||||||||||||
Recorded
Investment
|
Unpaid Principal
Balance
|
Related
Allowance
|
Average Recorded
Investment
|
Interest Income
Recognized
|
||||||||||||||||
With no related allowance recorded:
|
(In thousands)
|
|||||||||||||||||||
Commercial
|
||||||||||||||||||||
Income producing - real estate
|
$ | 2,253 | $ | 4,012 | $ | - | $ | 3,399 | $ | 18 | ||||||||||
Land, land development & construction-real estate
|
871 | 965 | - | 1,236 | 13 | |||||||||||||||
Commercial and industrial
|
1,525 | 1,678 | - | 3,678 | - | |||||||||||||||
Mortgage
|
||||||||||||||||||||
1-4 family
|
9,001 | 10,491 | - | 8,886 | 112 | |||||||||||||||
Resort lending
|
8,180 | 8,173 | - | 6,923 | 98 | |||||||||||||||
Home equity line of credit - 1st lien
|
- | - | - | - | - | |||||||||||||||
Home equity line of credit - 2nd lien
|
118 | 189 | - | 106 | 1 | |||||||||||||||
Installment
|
||||||||||||||||||||
Home equity installment - 1st lien
|
1,799 | 1,816 | - | 1,786 | 20 | |||||||||||||||
Home equity installment - 2nd lien
|
1,927 | 1,940 | - | 1,909 | 21 | |||||||||||||||
Loans not secured by real estate
|
669 | 711 | - | 440 | 6 | |||||||||||||||
Other
|
- | - | - | - | - | |||||||||||||||
26,343 | 29,975 | - | 28,363 | 289 | ||||||||||||||||
With an allowance recorded:
|
||||||||||||||||||||
Commercial
|
||||||||||||||||||||
Income producing - real estate
|
15,495 | 21,405 | 3,723 | 15,851 | 89 | |||||||||||||||
Land, land development & construction-real estate
|
9,334 | 17,763 | 2,667 | 11,035 | 32 | |||||||||||||||
Commercial and industrial
|
9,022 | 10,685 | 2,646 | 10,761 | 49 | |||||||||||||||
Mortgage
|
||||||||||||||||||||
1-4 family
|
64,814 | 67,273 | 8,265 | 64,486 | 683 | |||||||||||||||
Resort lending
|
25,234 | 26,823 | 3,641 | 26,775 | 244 | |||||||||||||||
Home equity line of credit - 1st lien
|
- | - | - | - | - | |||||||||||||||
Home equity line of credit - 2nd lien
|
- | - | - | 13 | - | |||||||||||||||
Consumer
|
||||||||||||||||||||
Home equity installment - 1st lien
|
1,608 | 1,631 | 782 | 1,485 | 14 | |||||||||||||||
Home equity installment - 2nd lien
|
1,655 | 1,676 | 1,290 | 1,534 | 16 | |||||||||||||||
Loans not secured by real estate
|
169 | 170 | 68 | 213 | 1 | |||||||||||||||
Other
|
- | - | - | - | - | |||||||||||||||
127,331 | 147,426 | 23,082 | 132,153 | 1,128 | ||||||||||||||||
Total
|
||||||||||||||||||||
Commercial
|
||||||||||||||||||||
Income producing - real estate
|
17,748 | 25,417 | 3,723 | 19,250 | 107 | |||||||||||||||
Land, land development & construction-real estate
|
10,205 | 18,728 | 2,667 | 12,271 | 45 | |||||||||||||||
Commercial and industrial
|
10,547 | 12,363 | 2,646 | 14,439 | 49 | |||||||||||||||
Mortgage
|
||||||||||||||||||||
1-4 family
|
73,815 | 77,764 | 8,265 | 73,372 | 795 | |||||||||||||||
Resort lending
|
33,414 | 34,996 | 3,641 | 33,698 | 342 | |||||||||||||||
Home equity line of credit - 1st lien
|
- | - | - | - | - | |||||||||||||||
Home equity line of credit - 2nd lien
|
118 | 189 | - | 119 | 1 | |||||||||||||||
Consumer
|
||||||||||||||||||||
Home equity installment - 1st lien
|
3,407 | 3,447 | 782 | 3,271 | 34 | |||||||||||||||
Home equity installment - 2nd lien
|
3,582 | 3,616 | 1,290 | 3,443 | 37 | |||||||||||||||
Loans not secured by real estate
|
838 | 881 | 68 | 653 | 7 | |||||||||||||||
Other
|
- | - | - | - | - | |||||||||||||||
Total
|
$ | 153,674 | $ | 177,401 | $ | 23,082 | $ | 160,516 | $ | 1,417 | ||||||||||
Accrued interest included in recorded investment
|
$ | 506 |
Impaired loans by class at December 31, 2010 are as follows (1):
|
||||||||||||
Recorded
|
Unpaid Principal
|
Related
|
||||||||||
Investment
|
Balance
|
Allowance
|
||||||||||
With no related allowance recorded:
|
(In thousands)
|
|||||||||||
Commercial
|
||||||||||||
Income producing - real estate
|
$ | 4,545 | $ | 4,763 | $ | - | ||||||
Land, land development & construction-real estate
|
1,600 | 2,810 | - | |||||||||
Commercial and industrial
|
5,830 | 5,873 | - | |||||||||
Mortgage
|
||||||||||||
1-4 family
|
8,770 | 10,551 | - | |||||||||
Resort lending
|
5,666 | 5,670 | - | |||||||||
Home equity line of credit - 1st lien
|
- | - | - | |||||||||
Home equity line of credit - 2nd lien
|
93 | 93 | - | |||||||||
Installment
|
||||||||||||
Home equity installment - 1st lien
|
1,772 | 1,805 | - | |||||||||
Home equity installment - 2nd lien
|
1,891 | 1,904 | - | |||||||||
Loans not secured by real estate
|
211 | 220 | - | |||||||||
Other
|
- | - | - | |||||||||
30,378 | 33,689 | - | ||||||||||
With an allowance recorded:
|
||||||||||||
Commercial
|
||||||||||||
Income producing - real estate
|
16,206 | 22,748 | 4,279 | |||||||||
Land, land development & construction-real estate
|
12,735 | 21,017 | 3,922 | |||||||||
Commercial and industrial
|
12,499 | 13,844 | 3,321 | |||||||||
Mortgage
|
||||||||||||
1-4 family
|
64,157 | 66,379 | 8,223 | |||||||||
Resort lending
|
28,315 | 28,874 | 3,319 | |||||||||
Home equity line of credit - 1st lien
|
- | - | - | |||||||||
Home equity line of credit - 2nd lien
|
25 | 97 | 25 | |||||||||
Consumer
|
||||||||||||
Home equity installment - 1st lien
|
1,361 | 1,374 | 620 | |||||||||
Home equity installment - 2nd lien
|
1,413 | 1,429 | 1,110 | |||||||||
Loans not secured by real estate
|
256 | 258 | 106 | |||||||||
Other
|
- | - | - | |||||||||
136,967 | 156,020 | 24,925 | ||||||||||
Total
|
||||||||||||
Commercial
|
||||||||||||
Income producing - real estate
|
20,751 | 27,511 | 4,279 | |||||||||
Land, land development & construction-real estate
|
14,335 | 23,827 | 3,922 | |||||||||
Commercial and industrial
|
18,329 | 19,717 | 3,321 | |||||||||
Mortgage
|
||||||||||||
1-4 family
|
72,927 | 76,930 | 8,223 | |||||||||
Resort lending
|
33,981 | 34,544 | 3,319 | |||||||||
Home equity line of credit - 1st lien
|
- | - | - | |||||||||
Home equity line of credit - 2nd lien
|
118 | 190 | 25 | |||||||||
Consumer
|
||||||||||||
Home equity installment - 1st lien
|
3,133 | 3,179 | 620 | |||||||||
Home equity installment - 2nd lien
|
3,304 | 3,333 | 1,110 | |||||||||
Loans not secured by real estate
|
467 | 478 | 106 | |||||||||
Other
|
- | - | - | |||||||||
Total
|
$ | 167,345 | $ | 189,709 | $ | 24,925 | ||||||
Accrued interest included in recorded investment
|
$ | 634 |
Commercial
|
||||||||||||||||||||
Non-watch
1-6
|
Watch
7-8
|
Substandard
Accrual
9
|
Non-
Accrual
10-11
|
Total
|
||||||||||||||||
(In thousands)
|
||||||||||||||||||||
March 31, 2011
|
||||||||||||||||||||
Income producing - real estate
|
$ | 223,224 | $ | 50,471 | $ | 14,749 | $ | 10,968 | $ | 299,412 | ||||||||||
Land, land development and construction - real estate
|
34,586 | 11,163 | 7,264 | 7,785 | 60,798 | |||||||||||||||
Commercial and industrial
|
272,294 | 34,057 | 17,742 | 7,699 | 331,792 | |||||||||||||||
Total
|
$ | 530,104 | $ | 95,691 | $ | 39,755 | $ | 26,452 | $ | 692,002 | ||||||||||
Accrued interest included in total
|
$ | 1,732 | $ | 327 | $ | 171 | $ | - | $ | 2,230 | ||||||||||
December 31, 2010
|
||||||||||||||||||||
Income producing - real estate
|
$ | 225,167 | $ | 57,536 | $ | 14,482 | $ | 11,925 | $ | 309,110 | ||||||||||
Land, land development and construction - real estate
|
33,356 | 14,780 | 4,873 | 9,672 | 62,681 | |||||||||||||||
Commercial and industrial
|
273,138 | 41,738 | 16,413 | 7,016 | 338,305 | |||||||||||||||
Total
|
$ | 531,661 | $ | 114,054 | $ | 35,768 | $ | 28,613 | $ | 710,096 | ||||||||||
Accrued interest included in total
|
$ | 1,897 | $ | 469 | $ | 200 | $ | - | $ | 2,566 |
Mortgage (1)
|
||||||||||||||||||||
1-4 Family
|
Resort
Lending
|
Home
Equity
1st Lien
|
Home
Equity
2nd Lien
|
Total
|
||||||||||||||||
(In thousands)
|
||||||||||||||||||||
March 31, 2011
|
||||||||||||||||||||
800 and above
|
$ | 28,427 | $ | 22,696 | $ | 4,238 | $ | 6,282 | $ | 61,643 | ||||||||||
750-799
|
65,727 | 85,875 | 8,777 | 17,655 | 178,034 | |||||||||||||||
700-749
|
64,844 | 55,210 | 4,683 | 14,794 | 139,531 | |||||||||||||||
650-699
|
55,731 | 25,523 | 3,592 | 8,708 | 93,554 | |||||||||||||||
600-649
|
39,325 | 11,602 | 1,592 | 3,702 | 56,221 | |||||||||||||||
550-599
|
30,803 | 10,710 | 1,640 | 4,077 | 47,230 | |||||||||||||||
500-549
|
30,869 | 4,575 | 1,272 | 2,396 | 39,112 | |||||||||||||||
Under 500
|
17,810 | 2,822 | 720 | 1,736 | 23,088 | |||||||||||||||
Unknown
|
3,303 | 580 | 50 | 98 | 4,031 | |||||||||||||||
Total
|
$ | 336,839 | $ | 219,593 | $ | 26,564 | $ | 59,448 | $ | 642,444 | ||||||||||
Accrued interest included in total
|
$ | 1,558 | $ | 1,104 | $ | 119 | $ | 291 | $ | 3,072 | ||||||||||
December 31, 2010
|
||||||||||||||||||||
800 and above
|
$ | 28,308 | $ | 21,385 | $ | 4,433 | $ | 6,386 | $ | 60,512 | ||||||||||
750-799
|
66,812 | 89,695 | 8,996 | 17,995 | 183,498 | |||||||||||||||
700-749
|
66,749 | 56,425 | 4,961 | 14,688 | 142,823 | |||||||||||||||
650-699
|
57,026 | 25,911 | 3,707 | 8,856 | 95,500 | |||||||||||||||
600-649
|
41,559 | 12,832 | 1,596 | 3,768 | 59,755 | |||||||||||||||
550-599
|
31,879 | 11,647 | 1,673 | 4,303 | 49,502 | |||||||||||||||
500-549
|
30,723 | 5,040 | 1,366 | 2,497 | 39,626 | |||||||||||||||
Under 500
|
19,005 | 2,941 | 742 | 1,853 | 24,541 | |||||||||||||||
Unknown
|
3,151 | 2,398 | 133 | 121 | 5,803 | |||||||||||||||
Total
|
$ | 345,212 | $ | 228,274 | $ | 27,607 | $ | 60,467 | $ | 661,560 | ||||||||||
Accrued interest included in total
|
$ | 1,413 | $ | 1,012 | $ | 135 | $ | 321 | $ | 2,881 |
Installment(1)
|
||||||||||||||||||||
Home
Equity
1st Lien
|
Home
Equity
2nd Lien
|
Loans not
Secured by
Real Estate
|
Other
|
Total
|
||||||||||||||||
(In thousands)
|
||||||||||||||||||||
March 31, 2011
|
||||||||||||||||||||
800 and above
|
$ | 5,486 | $ | 5,117 | $ | 12,682 | $ | 37 | $ | 23,322 | ||||||||||
750-799
|
14,026 | 18,235 | 44,002 | 509 | 76,772 | |||||||||||||||
700-749
|
8,505 | 13,926 | 25,202 | 787 | 48,420 | |||||||||||||||
650-699
|
7,929 | 9,690 | 14,962 | 766 | 33,347 | |||||||||||||||
600-649
|
5,519 | 5,402 | 7,852 | 371 | 19,144 | |||||||||||||||
550-599
|
3,862 | 4,456 | 4,872 | 242 | 13,432 | |||||||||||||||
500-549
|
3,234 | 2,886 | 3,877 | 237 | 10,234 | |||||||||||||||
Under 500
|
1,676 | 1,736 | 1,907 | 144 | 5,463 | |||||||||||||||
Unknown
|
41 | 16 | 3,326 | 83 | 3,466 | |||||||||||||||
Total
|
$ | 50,278 | $ | 61,464 | $ | 118,682 | $ | 3,176 | $ | 233,600 | ||||||||||
Accrued interest included in total
|
$ | 191 | $ | 218 | $ | 462 | $ | 29 | $ | 900 | ||||||||||
December 31, 2010
|
||||||||||||||||||||
800 and above
|
$ | 5,626 | $ | 5,618 | $ | 13,078 | $ | 22 | $ | 24,344 | ||||||||||
750-799
|
14,654 | 19,668 | 46,228 | 554 | 81,104 | |||||||||||||||
700-749
|
8,994 | 15,015 | 26,714 | 828 | 51,551 | |||||||||||||||
650-699
|
8,225 | 10,029 | 15,968 | 779 | 35,001 | |||||||||||||||
600-649
|
5,878 | 5,677 | 8,520 | 417 | 20,492 | |||||||||||||||
550-599
|
4,120 | 4,812 | 5,479 | 255 | 14,666 | |||||||||||||||
500-549
|
3,350 | 3,248 | 4,398 | 260 | 11,256 | |||||||||||||||
Under 500
|
1,809 | 1,848 | 2,087 | 163 | 5,907 | |||||||||||||||
Unknown
|
110 | 78 | 2,167 | 63 | 2,418 | |||||||||||||||
Total
|
$ | 52,766 | $ | 65,993 | $ | 124,639 | $ | 3,341 | $ | 246,739 | ||||||||||
Accrued interest included in total
|
$ | 218 | $ | 264 | $ | 579 | $ | 34 | $ | 1,095 |
Payment Plan Receivables
|
||||||||||||||||
Full
|
Partial
|
|||||||||||||||
Refund
|
Refund
|
Other
|
Total
|
|||||||||||||
(In thousands)
|
||||||||||||||||
March 31, 2011 AM Best rating
|
||||||||||||||||
A+
|
$ | - | $ | 180 | $ | - | $ | 180 | ||||||||
A
|
34,910 | 593 | 164 | 35,667 | ||||||||||||
A-
|
39,211 | 24,815 | - | 64,026 | ||||||||||||
B+
|
14,334 | - | - | 14,334 | ||||||||||||
B
|
- | - | - | - | ||||||||||||
Not rated
|
50,526 | - | 5,893 | 56,419 | ||||||||||||
Total
|
$ | 138,981 | $ | 25,588 | $ | 6,057 | $ | 170,626 | ||||||||
December 31, 2010 AM Best rating
|
||||||||||||||||
A+
|
$ | - | $ | 255 | $ | - | $ | 255 | ||||||||
A
|
40,264 | 497 | 341 | 41,102 | ||||||||||||
A-
|
48,291 | 25,523 | - | 73,814 | ||||||||||||
B+
|
19,694 | - | - | 19,694 | ||||||||||||
B
|
- | - | - | - | ||||||||||||
Not rated
|
53,404 | - | 12,994 | 66,398 | ||||||||||||
Total
|
$ | 161,653 | $ | 26,275 | $ | 13,335 | $ | 201,263 |
Three months ended
|
||||||||
March 31,
|
||||||||
2011
|
2010
|
|||||||
(In thousands)
|
||||||||
Net loss
|
$ | (7,401 | ) | $ | (13,837 | ) | ||
Net change in unrealized gain (loss) on securities available for sale, net of related tax effect
|
181 | 82 | ||||||
Change in unrealized losses on securities available for sale for which a portion of other than temporary impairment has been recognized in earnings
|
(327 | ) | 1,667 | |||||
Net change in unrealized loss on derivative
|
||||||||
instruments, net of related tax effect
|
179 | 106 | ||||||
Reclassification adjustment for accretion on settled derivative instruments
|
222 | 75 | ||||||
Comprehensive loss
|
$ | (7,146 | ) | $ | (11,907 | ) |
Three months ended
|
||||||||
March 31,
|
||||||||
2011
|
2010
|
|||||||
(In thousands)
|
||||||||
Net gain reclassified into earnings
|
$ | (2 | ) | $ | 152 | |||
Federal income tax expense as a result of the reclassification of these amounts from comprehensive income
|
- | - |
IB
|
Mepco
(1)
|
Other
(2)
|
Elimination
(3)
|
Total
|
||||||||||||||||
(In thousands)
|
||||||||||||||||||||
2011
|
||||||||||||||||||||
Total assets
|
$ | 2,238,475 | $ | 238,518 | $ | 169,934 | $ | (170,723 | )$ | $ | 2,476,204 | |||||||||
Interest income
|
24,580 | 6,138 | - | - | 30,718 | |||||||||||||||
Net interest income
|
20,531 | 4,587 | (668 | ) | - | 24,450 | ||||||||||||||
Provision for loan losses
|
11,073 | 3 | - | - | 11,076 | |||||||||||||||
Income (loss) before income tax
|
(6,236 | ) | (590 | ) | (559 | ) | (24 | ) | (7,409 | ) | ||||||||||
Net income (loss)
|
(6,443 | ) | (375 | ) | (559 | ) | (24 | ) | (7,401 | ) | ||||||||||
2010
|
||||||||||||||||||||
Total assets
|
$ | 2,533,434 | $ | 365,248 | $ | 200,554 | $ | (198,466 | )$ | $ | 2,900,770 | |||||||||
Interest income
|
29,661 | 11,583 | - | - | 41,244 | |||||||||||||||
Net interest income
|
22,889 | 8,977 | (1,835 | ) | - | 30,031 | ||||||||||||||
Provision for loan losses
|
17,117 | (103 | ) | - | - | 17,014 | ||||||||||||||
Income (loss) before income tax
|
(12,721 | ) | 1,084 | (2,440 | ) | (24 | ) | (14,101 | ) | |||||||||||
Net income (loss)
|
(12,042 | ) | 669 | (2,440 | ) | (24 | ) | (13,837 | ) |
(1)
|
Total assets include gross payment plan receivables of $0.02 million and $0.8 million at March 31, 2011 and 2010, respectively from customers domiciled in Canada. The amounts at March 31, 2011 and 2010 represent less than 1% of total payment plan receivables outstanding.
|
(2)
|
Includes amounts relating to our parent company and certain insignificant operations.
|
(3)
|
Includes parent company’s investment in subsidiaries and cash balances maintained at subsidiary.
|
Three months
|
||||||||
ended
|
||||||||
March 31,
|
||||||||
2011
|
2010
|
|||||||
(In thousands,
|
||||||||
except per share amounts)
|
||||||||
Net loss applicable to common stock
|
$ | (8,409 | ) | $ | (14,914 | ) | ||
Weighted average shares outstanding
(1)
|
7,933 | 2,403 | ||||||
Effect of convertible preferred stock
|
24,547 | - | ||||||
Restricted stock units
|
68 | - | ||||||
Stock units for deferred compensation plan for non-employee directors
|
7 | 7 | ||||||
Shares outstanding for calculation of diluted earnings per share
(2)
|
32,555 | 2,410 | ||||||
Net income (loss) per common share
|
||||||||
Basic
|
$ | (1.06 | ) | $ | (6.21 | ) | ||
Diluted
(1)
|
(1.06 | ) | (6.21 | ) |
|
(1)
|
Shares outstanding have been adjusted for a 1 for 10 reverse stock split in 2010.
|
|
(2)
|
For any period in which a loss is recorded, the assumed conversion of convertible preferred stock, assumed exercise of common stock warrants, assumed exercise of stock options, restricted stock units and stock units for a deferred compensation plan for non-employee directors would have an anti-dilutive impact on the loss per share and thus are ignored in the diluted per share calculation.
|
March 31, 2011
|
||||||||||||
Notional
Amount
|
Average
Maturity
(years)
|
Fair
Value
|
||||||||||
(Dollars in thousands)
|
||||||||||||
Cash Flow Hedges
|
||||||||||||
Pay fixed interest-rate swap agreements
|
$ | 20,000 | 2.5 | $ | (1,234 | ) | ||||||
Interest-rate cap agreements
|
5,000 | 0.3 | - | |||||||||
$ | 25,000 | 2.1 | $ | (1,234 | ) | |||||||
No hedge designation
|
||||||||||||
Mandatory commitments to sell mortgage loans
|
$ | 38,924 | 0.1 | $ | (117 | ) | ||||||
Rate-lock mortgage loan commitments
|
18,785 | 0.1 | 431 | |||||||||
Amended Warrant
|
2,504 | 7.7 | (957 | ) | ||||||||
Total
|
$ | 60,213 | 0.4 | $ | (643 | ) |
Fair Values of Derivative Instruments
|
||||||||||||||||||||
Asset Derivatives
|
Liability Derivatives
|
|||||||||||||||||||
March 31,
2011
|
December 31,
2010
|
March 31,
2011
|
December 31,
2010
|
|||||||||||||||||
Balance
Sheet
Location
|
Fair
Value
|
Balance
Sheet
Location
|
Fair
Value
|
Balance
Sheet
Location
|
Fair
Value
|
Balance
Sheet
Location
|
Fair
Value
|
|||||||||||||
(In thousands)
|
||||||||||||||||||||
Derivatives designated as hedging instruments
|
||||||||||||||||||||
Pay-fixed interest rate swap agreements
|
$ | - | $ | - |
Other liabilities
|
$ | 1,234 |
Other liabilities
|
$ | 1,405 | ||||||||||
Total
|
- | - | 1,234 | 1,405 | ||||||||||||||||
Derivatives not designated as hedging instruments
|
||||||||||||||||||||
Rate-lock mortgage loan commitments
|
Other assets
|
431 |
Other assets
|
400 | ||||||||||||||||
Mandatory commitments to sell mortgage loans
|
Other assets
|
- |
Other assets
|
1,375 |
Other liabilities
|
117 |
Other liabilities
|
- | ||||||||||||
Amended Warrant
|
- | - |
Other liabilities
|
957 |
Other liabilities
|
1,311 | ||||||||||||||
Total
|
431 | 1,775 | 1,074 | 1,311 | ||||||||||||||||
Total derivatives
|
$ | 431 | $ | 1,775 | $ | 2,308 | $ | 2,716 |
The effect of derivative financial instruments on the Condensed Consolidated Statements of Operations follows:
|
|||||||||||||||
Three Month Periods Ended March 31,
|
|||||||||||||||
Gain (Loss)
Recognized in
Other
Comprehensive
Income (Loss)
(Effective Portion)
|
Location of
Gain (Loss)
Reclassified
from
Accumulated
Other
Comprehensive
Income into
Income
(Effective
|
Gain (Loss)
Reclassified from
Accumulated Other
Comprehensive
Loss into Income
(Effective Portion)
|
Location of
Gain (Loss)
Recognized
|
Gain (Loss)
Recognized
in Income(1)
|
|||||||||||
2011
|
2010
|
Portion)
|
2011
|
2010
|
in Income (1)
|
2011
|
2010
|
||||||||
(In thousands)
|
|||||||||||||||
Cash Flow Hedges Pay-fixed interest rate swap agreements
|
$ 810
|
$ 931
|
Interest expense
|
$ (416)
|
$ (699)
|
||||||||||
Interest-rate cap agreements
|
15
|
92
|
Interest expense
|
(8)
|
(46)
|
Interest expense
|
$ -
|
$ (6)
|
|||||||
Total
|
$ 825
|
$ 1,023
|
$ (424)
|
$ (745)
|
$ -
|
$ (6)
|
|||||||||
No hedge designation
|
|||||||||||||||
Pay-fixed interest rate swap agreements
|
Interest expense
|
$ -
|
$ 11
|
||||||||||||
Rate-lock mortgage loan commitments
|
Mortgage loan gains
|
31
|
295
|
||||||||||||
Mandatory commitments to sell mortgage loans
|
Mortgage loan gains
|
(1,492)
|
(607)
|
||||||||||||
Amended warrant
|
Other income
|
354
|
-
|
||||||||||||
Total
|
$ (1,107)
|
$ (301)
|
March 31, 2011
|
December 31, 2010
|
|||||||||||||||
Gross Carrying Amount
|
Accumulated Amortization
|
Gross Carrying Amount
|
Accumulated Amortization
|
|||||||||||||
(In thousands)
|
||||||||||||||||
Amortized intangible assets -Core deposits
|
$ | 31,326 | $ | 22,689 | $ | 31,326 | $ | 22,346 |
(In thousands)
|
||||
Nine months ended December 31, 2011
|
$ | 1,028 | ||
Year ending December 31:
|
||||
2012
|
1,088 | |||
2013
|
1,078 | |||
2014
|
801 | |||
2015
|
613 | |||
2016 and thereafter
|
4,029 | |||
Total
|
$ | 8,637 |
Three-months ended March 31, 2011
|
||||||||||||||||
Weighted-
Average
Remaining
|
Aggregated
|
|||||||||||||||
Number of Shares
|
Average Exercise Price
|
Contractual Term (years)
|
Intrinsic Value (in thousands)
|
|||||||||||||
Outstanding at January 1, 2011
|
56,252 | $ | 42.76 | |||||||||||||
Granted
|
- | - | ||||||||||||||
Exercised
|
- | - | ||||||||||||||
Exchanged
|
- | - | ||||||||||||||
Expired
|
(2,722 | ) | 98.21 | |||||||||||||
Outstanding at March 31, 2011
|
53,530 | $ | 39.94 | 5.18 | $ | 0 | ||||||||||
Vested and expected to vest at
|
||||||||||||||||
March 31, 2011
|
53,330 | $ | 40.03 | 5.17 | $ | 0 | ||||||||||
Exercisable at March 31, 2011
|
43,530 | $ | 45.46 | 4.57 | $ | 0 |
2011
|
||||||||
|
Number of Shares
|
Weighted
Average Grant Date Fair Value
|
||||||
Outstanding at January 1, 2011
|
26,251 | $ | 92.69 | |||||
Granted
|
139,627 | 4.29 | ||||||
Vested
|
- | - | ||||||
Forfeited
|
- | - | ||||||
Outstanding at March 31, 2011
|
165,878 | $ | 18.28 |
|
·
|
We will not pay dividends on our outstanding common stock or the outstanding preferred stock held by the UST and we will not pay distributions on our outstanding trust preferred securities without, in each case, the prior written approval of the Federal Reserve Bank (“FRB”) and the Michigan Office of Financial and Insurance Regulation (“OFIR”);
|
|
·
|
We will not incur or guarantee any additional indebtedness without the prior approval of the FRB;
|
|
·
|
We will not repurchase or redeem any of our common stock without the prior approval of the FRB; and
|
|
·
|
We will not rescind or materially modify any of these limitations without notice to the FRB and the OFIR.
|
|
·
|
The adoption by the Bank of a capital restoration plan as described below;
|
|
·
|
The enhancement of the Bank’s documentation of the rationale for discounts applied to collateral valuations on impaired loans and improved support for the identification, tracking, and reporting of loans classified as troubled debt restructurings;
|
|
·
|
The adoption of certain changes and enhancements to our liquidity monitoring and contingency planning and our interest rate risk management practices;
|
|
·
|
Additional reporting to the Bank’s Board of Directors regarding initiatives and plans pursued by management to improve the Bank’s risk management practices;
|
|
·
|
Prior approval of the FRB and the OFIR for any dividends or distributions to be paid by the Bank to Independent Bank Corporation; and
|
|
·
|
Notice to the FRB and the OFIR of any rescission of or material modification to any of these resolutions.
|
Actual
|
Minimum for
Adequately Capitalized
Institutions
|
Minimum for
Well-Capitalized
Institutions
|
||||||||||||||||||||||
Amount
|
Ratio
|
Amount
|
Ratio
|
Amount
|
Ratio
|
|||||||||||||||||||
(Dollars in thousands)
|
||||||||||||||||||||||||
March 31, 2011
|
||||||||||||||||||||||||
Total capital to risk-weighted assets
|
||||||||||||||||||||||||
Consolidated
|
$ | 186,273 | 11.11 | % | $ | 134,153 | 8.00 | % |
NA
|
NA
|
||||||||||||||
Independent Bank
|
187,179 | 11.16 | 134,217 | 8.00 | $ | 167,771 | 10.00 | % | ||||||||||||||||
Tier 1 capital to risk-weighted assets
|
||||||||||||||||||||||||
Consolidated
|
$ | 158,002 | 9.42 | % | $ | 67,077 | 4.00 | % |
NA
|
NA
|
||||||||||||||
Independent Bank
|
165,633 | 9.87 | 67,108 | 4.00 | $ | 100,663 | 6.00 | % | ||||||||||||||||
Tier 1 capital to average assets
|
||||||||||||||||||||||||
Consolidated
|
$ | 158,002 | 6.29 | % | $ | 100,412 | 4.00 | % |
NA
|
NA
|
||||||||||||||
Independent Bank
|
165,633 | 6.60 | 100,443 | 4.00 | $ | 125,554 | 5.00 | % | ||||||||||||||||
December 31, 2010
|
||||||||||||||||||||||||
Total capital to risk-weighted assets
|
||||||||||||||||||||||||
Consolidated
|
$ | 193,199 | 10.99 | % | $ | 140,692 | 8.00 | % |
NA
|
NA
|
||||||||||||||
Independent Bank
|
194,524 | 11.06 | 140,760 | 8.00 | $ | 175,950 | 10.00 | % | ||||||||||||||||
Tier 1 capital to risk-weighted assets
|
||||||||||||||||||||||||
Consolidated
|
$ | 166,048 | 9.44 | % | $ | 70,346 | 4.00 | % |
NA
|
NA
|
||||||||||||||
Independent Bank
|
171,947 | 9.77 | 70,380 | 4.00 | $ | 105,570 | 6.00 | % | ||||||||||||||||
Tier 1 capital to average assets
|
||||||||||||||||||||||||
Consolidated
|
$ | 166,048 | 6.35 | % | $ | 104,550 | 4.00 | % |
NA
|
NA
|
||||||||||||||
Independent Bank
|
171,947 | 6.58 | 104,567 | 4.00 | $ | 130,709 | 5.00 | % | ||||||||||||||||
NA - Not applicable
|
Consolidated
|
Independent Bank
|
|||||||||||||||
March 31,
|
December 31,
|
March 31,
|
December 31,
|
|||||||||||||
2011
|
2010
|
2011
|
2010
|
|||||||||||||
(In thousands)
|
||||||||||||||||
Total shareholders' equity
|
$ | 112,938 | $ | 119,085 | $ | 163,277 | $ | 169,986 | ||||||||
Add (deduct)
|
||||||||||||||||
Qualifying trust preferred securities
|
41,934 | 44,084 | - | - | ||||||||||||
Accumulated other comprehensive loss
|
12,865 | 13,120 | 12,091 | 12,201 | ||||||||||||
Intangible assets
|
(8,637 | ) | (8,980 | ) | (8,637 | ) | (8,979 | ) | ||||||||
Disallowed capitalized mortgage
|
||||||||||||||||
loan servicing rights
|
(290 | ) | (527 | ) | (290 | ) | (527 | ) | ||||||||
Disallowed deferred tax assets
|
(808 | ) | (780 | ) | (808 | ) | (780 | ) | ||||||||
Other
|
- | 46 | - | 46 | ||||||||||||
Tier 1 capital
|
158,002 | 166,048 | 165,633 | 171,947 | ||||||||||||
Qualifying trust preferred securities
|
6,734 | 4,584 | - | - | ||||||||||||
Allowance for loan losses and allowance for unfunded lending commitments limited to 1.25% of total risk-weighted assets
|
21,537 | 22,567 | 21,546 | 22,577 | ||||||||||||
Total risk-based capital
|
$ | 186,273 | $ | 193,199 | $ | 187,179 | $ | 194,524 |
Independent
Bank
Actual as of
March 31,
2011
|
Minimum
Ratios
Established
by our Board
|
Minimum
Ratio for
Required to
be Well-
Capitalized
|
||||||||||
Total Capital to Risk-Weighted Assets
|
11.16 | % | 11.00 | % | 10.00 | % | ||||||
Tier 1 Capital to Average Total Assets
|
6.60 | 8.00 | 5.00 |
Fair Value Measurements Using
|
||||||||||||||||
Fair Value
Measure-
ments
|
Quoted
Prices
in Active
Markets
for
Identical
Assets
(Level 1)
|
Significant
Other
Observable
Inputs
(Level 2)
|
Significant
Un-
observable
Inputs
(Level 3)
|
|||||||||||||
(In thousands)
|
||||||||||||||||
March 31, 2011:
|
||||||||||||||||
Measured at Fair Value on a Recurring Basis:
|
||||||||||||||||
Assets
|
||||||||||||||||
Trading securities
|
$ | 105 | $ | 105 | $ | - | $ | - | ||||||||
Securities available for sale
|
||||||||||||||||
U.S. Treasury
|
50,670 | 50,670 | - | - | ||||||||||||
U.S. agency residential mortgage-backed
|
13,024 | - | 13,024 | - | ||||||||||||
Private label residential mortgage-backed
|
13,147 | - | 13,147 | - | ||||||||||||
Obligations of states and political subdivisions
|
31,062 | - | 31,062 | - | ||||||||||||
Trust preferred
|
4,033 | - | 4,033 | - | ||||||||||||
Loans held for sale
|
20,351 | - | 20,351 | - | ||||||||||||
Derivatives (1)
|
431 | - | 431 | - | ||||||||||||
Liabilities
|
||||||||||||||||
Derivatives (2)
|
2,308 | - | 1,351 | 957 | ||||||||||||
Measured at Fair Value on a Non-recurring basis:
|
||||||||||||||||
Assets
|
||||||||||||||||
Capitalized mortgage loan servicing rights (3)
|
6,837 | - | - | 6,837 | ||||||||||||
Impaired loans (4)
|
28,948 | - | - | 28,948 | ||||||||||||
Other real estate (5)
|
16,152 | - | - | 16,152 | ||||||||||||
December 31, 2010:
|
||||||||||||||||
Measured at Fair Value on a Recurring Basis:
|
||||||||||||||||
Assets
|
||||||||||||||||
Trading securities
|
$ | 32 | $ | 32 | $ | - | $ | - | ||||||||
Securities available for sale
|
||||||||||||||||
U.S. agency residential mortgage-backed
|
13,331 | - | 13,331 | - | ||||||||||||
Private label residential mortgage-backed
|
14,184 | - | 14,184 | - | ||||||||||||
Obligations of states and political subdivisions
|
31,259 | - | 31,259 | - | ||||||||||||
Trust preferred
|
9,090 | - | 9,090 | - | ||||||||||||
Loans held for sale
|
50,098 | - | 50,098 | - | ||||||||||||
Derivatives (1)
|
1,775 | - | 1,775 | - | ||||||||||||
Liabilities
|
||||||||||||||||
Derivatives (2)
|
2,716 | - | 1,405 | 1,311 | ||||||||||||
Measured at Fair Value on a Non-recurring basis:
|
||||||||||||||||
Assets
|
||||||||||||||||
Capitalized mortgage loan servicing rights (3)
|
9,019 | - | - | 9,019 | ||||||||||||
Impaired loans (4)
|
28,935 | - | - | 28,935 | ||||||||||||
Other real estate (5)
|
13,095 | - | - | 13,095 |
Changes in Fair Values for the Three-Month
Periods Ended March 31 for Items Measured at
Fair Value Pursuant to Election of the Fair Value Option
|
||||||||||||||||||||||||
2011
|
2010
|
|||||||||||||||||||||||
Net Gains (Losses)
on Assets
|
Total
Change
in Fair
Values
Included
in Current
Period
|
Net Gains (Losses)
on Assets
|
Total
Change
in Fair
Values
Included
in Current
Period
|
|||||||||||||||||||||
Securities
|
Loans
|
Earnings
|
Securities
|
Loans
|
Earnings
|
|||||||||||||||||||
(In thousands)
|
||||||||||||||||||||||||
Trading securities
|
$ | 73 | $ | - | $ | 73 | $ | (5 | ) | $ | - | $ | (5 | ) | ||||||||||
Loans held for sale
|
- | 585 | 585 | - | 255 | 255 |
|
·
|
Capitalized mortgage loan servicing rights, whose individual strata are measured at fair value had a carrying amount of $6.8 million which is net of a valuation allowance of $2.7 million at March 31, 2011 and had a carrying amount of $9.0 million which is net of a valuation allowance of $3.2 million at December 31, 2010. A recovery of $0.6 million and $0.1 million was included in our results of operations for the three month periods ending March 31, 2011 and 2010, respectively.
|
|
·
|
Loans which are measured for impairment using the fair value of collateral for collateral dependent loans, had a carrying amount of $39.8 million, with a valuation allowance of $10.9 million at March 31, 2011 and had a carrying amount of $41.0 million, with a valuation allowance of $12.1 million at December 31, 2010. An additional provision for loan losses relating to impaired loans of $4.9 million and $6.7 million was included in our results of operations for the three month periods ending March 31, 2011 and 2010, respectively.
|
|
·
|
Other real estate, which is measured using the fair value of the property, had a carrying amount of $16.2 million which is net of a valuation allowance of $11.9 million at March 31, 2011 and a carrying amount of $13.1 million which is net of a valuation allowance of $10.9 million at December 31, 2010. An additional charge relating to ORE measured at fair value of $1.4 million and $0.8 million was included in our results of operations during the three month periods ended March 31, 2011 and 2010, respectively.
|
Asset
|
(Liability)
|
|||||||||||||||
Securities Available for Sale
|
Amended Warrant
|
|||||||||||||||
2011
|
2010
|
2011
|
2010
|
|||||||||||||
(In thousands)
|
||||||||||||||||
Beginning balance
|
$ | - | $ | 36,480 | $ | (1,311 | ) | $ | - | |||||||
Total gains (losses) realized and unrealized:
|
||||||||||||||||
Included in results of operations
|
- | 132 | 354 | - | ||||||||||||
Included in other comprehensive income
|
- | 1,713 | - | - | ||||||||||||
Purchases, issuances, settlements, maturities and calls
|
- | (16,940 | ) | - | - | |||||||||||
Transfers in and/or out of Level 3
|
- | (21,385 | ) | - | - | |||||||||||
Ending balance
|
$ | - | $ | - | $ | (957 | ) | $ | - | |||||||
Amount of total gains (losses) for the period included in earnings attributable to the change in unrealized gains (losses) relating to assets and liabilities still held at March 31
|
$ | - | $ | - | $ | 354 | $ | - |
Aggregate Fair Value
|
Difference
|
Contractual Principal
|
||||||||||
(In thousands)
|
||||||||||||
Loans held for sale
|
||||||||||||
March 31, 2011
|
$ | 20,351 | $ | 485 | $ | 19,866 | ||||||
December 31, 2010
|
50,098 | (100 | ) | 50,198 |
The estimated fair values and recorded book balances follow:
|
||||||||||||||||
March 31, 2011
|
December 31, 2010
|
|||||||||||||||
Recorded
Book
Balance
|
Estimated
Fair Value
|
Recorded
Book
Balance
|
Estimated
Fair Value
|
|||||||||||||
(In thousands)
|
||||||||||||||||
Assets
|
||||||||||||||||
Cash and due from banks
|
$ | 50,900 | $ | 50,900 | $ | 48,900 | $ | 48,900 | ||||||||
Interest bearing deposits
|
337,100 | 337,100 | 336,400 | 336,400 | ||||||||||||
Trading securities
|
100 | 100 | 30 | 30 | ||||||||||||
Securities available for sale
|
111,900 | 111,900 | 67,900 | 67,900 | ||||||||||||
Federal Home Loan Bank and Federal Reserve
|
||||||||||||||||
Bank Stock
|
23,600 |
NA
|
23,600 |
NA
|
||||||||||||
Net loans and loans held for sale
|
1,686,700 | 1,608,400 | 1,795,300 | 1,736,600 | ||||||||||||
Accrued interest receivable
|
6,900 | 6,900 | 7,100 | 7,100 | ||||||||||||
Derivative financial instruments
|
400 | 400 | 1,800 | 1,800 | ||||||||||||
Liabilities
|
||||||||||||||||
Deposits with no stated maturity
|
$ | 1,450,500 | $ | 1,450,500 | $ | 1,447,500 | $ | 1,447,500 | ||||||||
Deposits with stated maturity
|
772,500 | 781,600 | 804,300 | 814,900 | ||||||||||||
Other borrowings
|
46,000 | 49,400 | 71,000 | 75,000 | ||||||||||||
Subordinated debentures
|
50,200 | 23,300 | 50,200 | 19,300 | ||||||||||||
Accrued interest payable
|
4,100 | 4,100 | 3,600 | 3,600 | ||||||||||||
Derivative financial instruments
|
2,300 | 2,300 | 2,700 | 2,700 |
Key performance ratios
(a)
|
||||||||
Three months
|
||||||||
ended March 31,
|
||||||||
2011
|
2010
|
|||||||
Net loss (annualized) to
|
||||||||
Average assets
|
(1.36 | )% | (2.06 | )% | ||||
Average common shareholders’ equity
|
(83.75 | ) | (184.46 | ) | ||||
Net loss per common share
|
||||||||
Basic
|
$ | (1.06 | ) | $ | (6.21 | ) | ||
Diluted
|
(1.06 | ) | (6.21 | ) |
Average Balances and Rates
|
||||||||||||||||||||||||
Three Months Ended
|
||||||||||||||||||||||||
March 31,
|
||||||||||||||||||||||||
2011
|
2010
|
|||||||||||||||||||||||
Average
|
Average
|
|||||||||||||||||||||||
Balance
|
Interest
|
Rate
(3)
|
Balance
|
Interest
|
Rate
(3)
|
|||||||||||||||||||
Assets
(1)
|
(Dollars in thousands)
|
|||||||||||||||||||||||
Taxable loans
|
$ | 1,798,106 | $ | 29,397 | 6.60 | % | $ | 2,252,674 | $ | 38,922 | 6.98 | % | ||||||||||||
Tax-exempt loans
(2)
|
8,391 | 87 | 4.20 | 10,128 | 105 | 4.20 | ||||||||||||||||||
Taxable securities
|
41,621 | 467 | 4.55 | 96,213 | 1,160 | 4.89 | ||||||||||||||||||
Tax-exempt securities
(2)
|
30,956 | 332 | 4.35 | 64,415 | 685 | 4.31 | ||||||||||||||||||
Cash – interest bearing
|
369,793 | 232 | 0.25 | 274,955 | 157 | 0.23 | ||||||||||||||||||
Other investments
|
23,630 | 203 | 3.48 | 27,854 | 215 | 3.13 | ||||||||||||||||||
Interest Earning Assets
|
2,272,497 | 30,718 | 5.46 | 2,726,239 | 41,244 | 6.12 | ||||||||||||||||||
Cash and due from banks
|
50,888 | 59,018 | ||||||||||||||||||||||
Other assets, net
|
191,884 | 148,460 | ||||||||||||||||||||||
Total Assets
|
$ | 2,515,269 | $ | 2,933,717 | ||||||||||||||||||||
Liabilities
|
||||||||||||||||||||||||
Savings and NOW
|
$ | 994,530 | 589 | 0.24 | $ | 1,084,499 | 863 | 0.32 | ||||||||||||||||
Time deposits
|
805,645 | 4,356 | 2.19 | 1,127,618 | 7,356 | 2.65 | ||||||||||||||||||
Other borrowings
|
104,907 | 1,323 | 5.11 | 227,621 | 2,994 | 5.33 | ||||||||||||||||||
Interest Bearing Liabilities
|
1,905,082 | 6,268 | 1.33 | 2,439,738 | 11,213 | 1.86 | ||||||||||||||||||
Demand deposits
|
448,979 | 327,570 | ||||||||||||||||||||||
Other liabilities
|
44,231 | 64,396 | ||||||||||||||||||||||
Shareholders’ equity
|
116,977 | 102,013 | ||||||||||||||||||||||
Total liabilities and shareholders’ equity
|
$ | 2,515,269 | $ | 2,933,717 | ||||||||||||||||||||
Net Interest Income
|
$ | 24,450 | $ | 30,031 | ||||||||||||||||||||
|
||||||||||||||||||||||||
Net Interest Income as a Percent of Interest Earning Assets
|
4.34 | % | 4.45 | % |
(1)
|
All domestic, except for $0.03 million and $0.9 million for the three months ended March 31, 2011 and 2010, respectively, of average payment plan receivables included in taxable loans for customers domiciled in Canada.
|
(2)
|
Interest on tax-exempt loans and securities is not presented on a fully tax equivalent basis due to the current net operating loss carryforward position and the deferred tax asset valuation allowance.
|
(3)
|
Annualized.
|
Non-Interest Income
|
||||||||
Three months ended
|
||||||||
March 31,
|
March 31,
|
|||||||
2011
|
2010
|
|||||||
(In thousands)
|
||||||||
Service charges on deposit accounts
|
$ | 4,282 | $ | 5,275 | ||||
Net gains (losses) on assets
|
||||||||
Mortgage loans
|
1,935 | 1,843 | ||||||
Securities
|
213 | 265 | ||||||
Other than temporary loss on securities available for sale
|
||||||||
Total impairment loss
|
(469 | ) | (118 | ) | ||||
Loss recognized in other comprehensive income
|
327 | - | ||||||
Net impairment loss recognized in earnings
|
(142 | ) | (118 | ) | ||||
Interchange income
|
2,168 | 1,936 | ||||||
Mortgage loan servicing
|
896 | 432 | ||||||
Investment and insurance commissions
|
555 | 389 | ||||||
Bank owned life insurance
|
425 | 468 | ||||||
Title insurance fees
|
473 | 494 | ||||||
Other
|
1,906 | 1,397 | ||||||
Total non-interest income
|
$ | 12,711 | $ | 12,381 |
Mortgage Loan Activity
|
||||||||
Three months ended
|
||||||||
March 31,
|
March 31,
|
|||||||
2011
|
2010
|
|||||||
(Dollars in thousands)
|
||||||||
Mortgage loans originated
|
$ | 95,573 | $ | 90,007 | ||||
Mortgage loans sold
|
121,488 | 87,708 | ||||||
Mortgage loans sold with servicing rights released
|
16,572 | 11,864 | ||||||
Net gains on the sale of mortgage loans
|
1,935 | 1,843 | ||||||
Net gains as a percent of mortgage loans sold
|
||||||||
(“Loan Sales Margin”)
|
1.59 | % | 2.10 | % | ||||
Fair value adjustments included in the Loan
|
||||||||
Sales Margin
|
(0.72 | ) | (0.07 | ) |
Capitalized Mortgage Loan Servicing Rights
|
||||||||
Three months ended
|
||||||||
March 31,
|
||||||||
2011
|
2010
|
|||||||
(In thousands)
|
||||||||
Balance at beginning of period
|
$ | 14,661 | $ | 15,273 | ||||
Originated servicing rights capitalized
|
1,064 | 775 | ||||||
Amortization
|
(749 | ) | (758 | ) | ||||
Change in valuation allowance
|
555 | 145 | ||||||
Balance at end of period
|
$ | 15,531 | $ | 15,435 | ||||
Valuation allowance at end of period
|
$ | 2,655 | $ | 2,157 |
Non-Interest Expense
|
||||||||
Three months ended
|
||||||||
March 31,
|
March 31,
|
|||||||
2011
|
2010
|
|||||||
(In thousands)
|
||||||||
Compensation
|
$ | 9,812 | $ | 10,176 | ||||
Performance-based compensation and benefits
|
157 | 644 | ||||||
Other benefits
|
2,380 | 2,393 | ||||||
Compensation and employee benefits
|
12,349 | 13,213 | ||||||
Loan and collection
|
3,867 | 4,786 | ||||||
Occupancy, net
|
3,101 | 2,909 | ||||||
Vehicle service contract counterparty contingencies
|
2,346 | 3,418 | ||||||
Data processing
|
2,310 | 2,469 | ||||||
Furniture, fixtures and equipment
|
1,418 | 1,719 | ||||||
Net losses on other real estate and repossessed assets
|
1,406 | 2,029 | ||||||
FDIC deposit insurance
|
1,235 | 1,802 | ||||||
Credit card and bank service fees
|
1,047 | 1,675 | ||||||
Communications
|
948 | 1,073 | ||||||
Legal and professional fees
|
778 | 1,136 | ||||||
Advertising
|
554 | 779 | ||||||
Supplies
|
402 | 393 | ||||||
Amortization of intangible assets
|
343 | 322 | ||||||
Costs related to unfunded lending commitments
|
95 | 56 | ||||||
Other
|
1,295 | 1,720 | ||||||
Total non-interest expense
|
$ | 33,494 | $ | 39,499 |
Business Segments
|
||||||||
Three months ended
|
||||||||
March 31,
|
||||||||
2011
|
2010
|
|||||||
(In thousands)
|
||||||||
Independent Bank
|
$ | (6,443 | ) | $ | (12,042 | ) | ||
Mepco
|
(375 | ) | 669 | |||||
Other
(1)
|
(559 | ) | (2,440 | ) | ||||
Elimination
|
(24 | ) | (24 | ) | ||||
Net loss
|
$ | (7,401 | ) | $ | (13,837 | ) |
Securities
|
||||||||||||||||
Unrealized
|
||||||||||||||||
Amortized
|
Fair
|
|||||||||||||||
Cost
|
Gains
|
Losses
|
Value
|
|||||||||||||
(In thousands)
|
||||||||||||||||
Securities available for sale
|
||||||||||||||||
March 31, 2011
|
$ | 116,530 | $ | 657 | $ | 5,251 | $ | 111,936 | ||||||||
December 31, 2010
|
72,312 | 771 | 5,219 | 67,864 |
Three months ended
|
||||||||
March 31,
|
||||||||
2011
|
2010
|
|||||||
(In thousands)
|
||||||||
Proceeds
|
$ | 12,399 | $ | 25,415 | ||||
Gross gains
|
$ | 185 | $ | 304 | ||||
Gross losses
|
(45 | ) | (34 | ) | ||||
Net impairment charges
|
(142 | ) | (118 | ) | ||||
Fair value adjustments
|
73 | (5 | ) | |||||
Net gains
|
$ | 71 | $ | 147 |
Non-performing assets
(1)
|
||||||||
March 31,
|
December 31,
|
|||||||
2011
|
2010
|
|||||||
(Dollars in thousands)
|
||||||||
Non-accrual loans
|
$ | 59,543 | $ | 66,652 | ||||
Loans 90 days or more past due and still accruing interest
|
309 | 928 | ||||||
Total non-performing loans
|
59,852 | 67,580 | ||||||
Other real estate and repossessed assets
|
37,513 | 39,413 | ||||||
Total non-performing assets
|
$ | 97,365 | $ | 106,993 | ||||
As a percent of Portfolio Loans
|
||||||||
Non-performing loans
|
3.45 | % | 3.73 | % | ||||
Allowance for loan losses
|
3.82 | 3.75 | ||||||
Non-performing assets to total assets
|
3.93 | 4.22 | ||||||
Allowance for loan losses as a percent of non-performing loans
|
110.50 | 100.50 |
|
(1)
|
Excludes loans classified as “troubled debt restructured” that are not past due and vehicle service contract counterparty receivables, net.
|
Allowance for loan losses
|
Three months ended
|
|||||||||||||||
March 31,
|
||||||||||||||||
2011
|
2010
|
|||||||||||||||
Loans
|
Unfunded Commitments
|
Loans
|
Unfunded Commitments
|
|||||||||||||
(Dollars in thousands)
|
||||||||||||||||
Balance at beginning of period
|
$ | 67,915 | $ | 1,322 | $ | 81,717 | $ | 1,858 | ||||||||
Additions (deduction)
|
||||||||||||||||
Provision for loan losses
|
11,076 | - | 17,014 | - | ||||||||||||
Recoveries credited to allowance
|
935 | - | 991 | - | ||||||||||||
Loans charged against the allowance
|
(13,791 | ) | - | (23,590 | ) | - | ||||||||||
Addition included in non-interest expense | - | 95 | - | 56 | ||||||||||||
Balance at end of period
|
$ | 66,135 | $ | 1,417 | $ | 76,132 | $ | 1,914 | ||||||||
Net loans charged against the allowance to average Portfolio Loans (annualized)
|
2.93 | % | 4.10 | % |
March 31,
|
December 31,
|
|||||||
2011
|
2010
|
|||||||
(In thousands)
|
||||||||
Specific allocations
|
$ | 23,082 | $ | 24,925 | ||||
Other adversely rated loans
|
8,272 | 8,168 | ||||||
Historical loss allocations
|
21,122 | 20,543 | ||||||
Additional allocations based on subjective factors
|
13,659 | 14,279 | ||||||
Total
|
$ | 66,135 | $ | 67,915 |
March 31,
|
December 31,
|
||||||||||||||||||
2011
|
2010
|
||||||||||||||||||
Amount
|
Average
Maturity
|
Rate
|
Amount
|
Average
Maturity
|
Rate
|
||||||||||||||
(Dollars in thousands)
|
|||||||||||||||||||
Brokered CDs
|
$ | 250,166 |
2.3 years
|
2.88 | % | $ | 273,546 |
2.4 years
|
2.89 | % | |||||||||
Fixed rate FHLB advances
|
21,012 |
5.6 years
|
6.34 | 21,022 |
5.9 years
|
6.34 | |||||||||||||
Variable rate FHLB advances
(1)
|
25,000 |
1.1 years
|
0.50 | 50,000 |
0.8 years
|
0.41 | |||||||||||||
Total
|
$ | 296,178 |
2.4 years
|
2.93 | % | $ | 344,568 |
2.4 years
|
2.74 | % |
(1)
|
Certain of these items have had their average maturity and rate altered through the use of derivative instruments, including pay-fixed interest rate swaps.
|
Capitalization
|
||||||||
March 31,
|
December 31,
|
|||||||
2011
|
2010
|
|||||||
(In thousands)
|
||||||||
Subordinated debentures
|
$ | 50,175 | $ | 50,175 | ||||
Amount not qualifying as regulatory capital
|
(1,507 | ) | (1,507 | ) | ||||
Amount qualifying as regulatory capital
|
48,668 | 48,668 | ||||||
Shareholders’ Equity
|
||||||||
Preferred stock
|
76,708 | 75,700 | ||||||
Common stock
|
247,406 | 246,407 | ||||||
Accumulated deficit
|
(198,311 | ) | (189,902 | ) | ||||
Accumulated other comprehensive loss
|
(12,865 | ) | (13,120 | ) | ||||
Total shareholders’ equity
|
112,938 | 119,085 | ||||||
Total capitalization
|
$ | 161,606 | $ | 167,753 |
|
·
|
Eliminated cash dividend on our common stock
: Beginning in November of 2009, we eliminated the $0.10 per share quarterly cash dividend on our common stock.
|
|
·
|
Deferred dividends on our preferred stock
: Beginning in December of 2009, we suspended payment of quarterly dividends on the preferred stock held by the UST. The cash dividends payable to the UST on the Series B Preferred Stock amount to approximately $3.9 million per year until December of 2013, at which time they would increase to approximately $7.0 million per year. Accrued and unpaid dividends were $3.6 million at March 31, 2011.
|
|
·
|
Deferred dividends on our subordinated debentures
: Beginning in December of 2009, we exercised our right to defer all quarterly interest payments on the subordinated debentures we issued to our trust subsidiaries. As a result, all quarterly dividends on the related trust preferred securities were also deferred. Based on current dividend rates, the cash dividends on all outstanding trust preferred securities as of March 31, 2011, amount to approximately $2.1 million per year. Accrued and unpaid dividends on trust preferred securities at March 31, 2011 and December 31, 2010 were $2.8 million and $2.3 million, respectively.
|
|
·
|
Exchanged the Series A Preferred Stock held by the UST for Series B Preferred Stock
: In April 2010, we completed the exchange of Series A Preferred Stock held by the UST (plus accrued and unpaid dividends on such stock) for new shares of convertible Series B Preferred Stock, as described above.
|
|
·
|
Exchanged certain trust preferred securities for our common stock:
In June 2010, we completed the exchange of 5.1 million shares of our common stock for $41.4 million in liquidation amount of trust preferred securities and $2.3 million of accrued and unpaid interest on such securities.
|
Regulatory Capital Ratios
|
Independent Bank
Actual at
March 31, 2011
|
Minimum Ratios Established by our Board
|
Required to be Well-Capitalized
|
|||||||||
Tier 1 capital to average total assets
|
6.60 | % | 8.00 | % | 5.00 | % | ||||||
Total capital to risk-weighted assets
|
11.16 | 11.00 | 10.00 |
Changes in Market Value of Portfolio Equity and Net Interest Income
|
||||||||||||||||
Change in Interest Rates
|
Market Value
Of Portfolio
Equity(1)
|
Percent
Change
|
Net Interest
Income(2)
|
Percent
Change
|
||||||||||||
(Dollars in thousands)
|
||||||||||||||||
March 31, 2011
|
||||||||||||||||
200 basis point rise
|
$ | 193,400 | 18.00 | % | $ | 98,300 | 2.18 | % | ||||||||
100 basis point rise
|
177,100 | 8.05 | 96,000 | (0.21 | ) | |||||||||||
Base-rate scenario
|
163,900 | - | 96,200 | - | ||||||||||||
100 basis point decline
|
153,700 | (6.22 | ) | 95,600 | (0.62 | ) | ||||||||||
200 basis point decline
|
141,500 | (13.67 | ) | 93,400 | (2.91 | ) | ||||||||||
December 31, 2010
|
||||||||||||||||
200 basis point rise
|
$ | 170,700 | 13.57 | % | $ | 104,400 | 1.85 | % | ||||||||
100 basis point rise
|
159,000 | 5.79 | 102,100 | (0.39 | ) | |||||||||||
Base-rate scenario
|
150,300 | - | 102,500 | - | ||||||||||||
100 basis point decline
|
156,200 | 3.93 | 101,900 | (0.59 | ) | |||||||||||
200 basis point decline
|
145,100 | (3.46 | ) | 99,300 | (3.12 | ) |
(1)
|
Simulation analyses calculate the change in the net present value of our assets and liabilities, including debt and related financial derivative instruments, under parallel shifts in interest rates by discounting the estimated future cash flows using a market-based discount rate. Cash flow estimates incorporate anticipated changes in prepayment speeds and other embedded options.
|
(2)
|
Simulation analyses calculate the change in net interest income under immediate parallel shifts in interest rates over the next twelve months, based upon a static statement of financial condition, which includes debt and related financial derivative instruments, and do not consider loan fees.
|
(a)
|
Evaluation of Disclosure Controls and Procedures.
|
(b)
|
Changes in Internal Controls.
|
Item
1A.
|
Risk Factors
|
Item
2.
|
Unregistered Sales of Equity Securities and Use of Proceeds
|
Period
|
Total Number of
Shares Purchased
|
Average Price
Paid Per Share
|
Total Number of
Shares Purchased
as Part of a
Publicly
Announced Plan
|
Remaining
Number of
Shares
Authorized for
Purchase Under
the Plan
|
||||||||||
January 2011
|
- |
NA
|
NA
|
NA
|
||||||||||
February 2011
|
- |
NA
|
NA
|
NA
|
||||||||||
March 2011
|
5,987 | (1) | $ | 3.01 | - | |||||||||
Total
|
5,987 | $ | 3.01 | - |
NA
|
(1)
|
A portion of the salary payable to our Chief Executive Officer, Michael Magee, is payable in salary stock, which is issued on a bi-weekly basis in connection with our regular pay periods. The shares disclosed in this table are shares withheld from the shares that would otherwise be issued to Mr. Magee in order to satisfy tax withholding obligations.
|
It
em
3B.
|
Defaults Upon Senior Securities
|
Item
6.
|
Exhibits
|
|
(a)
|
The following exhibits (listed by number corresponding to the Exhibit Table as Item 601 in Regulation S-K) are filed with this report:
|
Amended and Restated Deferred Compensation and Stock Purchase Plan for Nonemployee Directors
|
||
Form of Restricted Stock Unit Grant Agreement, dated February 15, 2011, entered into by Independent Bank Corporation with each of William B. Kessel (President and Chief Operating Officer), Robert N. Shuster (Executive Vice President and Chief Financial Officer), David C. Reglin (Executive Vice President for Retail Banking), Stefanie M. Kimball (Executive Vice President and Chief Lending Officer), and Mark L. Collins (Executive Vice President and General Counsel)
|
10.3
|
Consulting and Transition Agreement, dated February 16, 2011, by and among Independent Bank Corporation, Independent Bank, and Michael M. Magee, Jr. (incorporated by reference to Exhibit 10.1 to our Current Report on Form 8-K filed February 16, 2011)
|
|
10.4
|
Long-Term Incentive Plan, as amended through February 15, 2011 (incorporated by reference to Appendix A to our proxy statement filed March 17, 2011)
|
|
Computation of Earnings Per Share.
|
||
Certificate of the Chief Executive Officer of Independent Bank Corporation pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 (18 U.S.C. 1350).
|
||
Certificate of the Chief Financial Officer of Independent Bank Corporation pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 (18 U.S.C. 1350).
|
||
Certificate of the Chief Executive Officer of Independent Bank Corporation pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (18 U.S.C. 1350).
|
||
Certificate of the Chief Financial Officer of Independent Bank Corporation pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (18 U.S.C. 1350).
|
Date
|
May 9, 2011
|
By
|
/s/ Robert N. Shuster
|
|
Robert N. Shuster, Principal Financial
|
||||
Officer
|
||||
Date
|
May 9, 2011
|
By
|
/s/ James J. Twarozynski
|
|
James J. Twarozynski, Principal
|
||||
Accounting Officer
|
Vested Percentage
|
TARP Assistance Repaid
|
0%
|
Less than 25%
|
25%
|
25% to less than 50%
|
50%
|
50% to less than 75%
|
75%
|
75% to less than 100%
|
100%
|
100%
|
EXECUTIVE:
|
INDEPENDENT BANK CORPORATION
|
|
By:
|
||
Its:
|
||
ADDRESS:
|
||
1.
|
I have reviewed this quarterly report on Form 10-Q of Independent Bank Corporation;
|
2.
|
Based on my knowledge, this quarterly report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this quarterly report;
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this quarterly report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this quarterly report;
|
4.
|
The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and we have:
|
|
a)
|
designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this quarterly report is being prepared;
|
|
b)
|
designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
|
c)
|
evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
|
d)
|
disclosed in this quarterly report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting;
|
5.
|
The registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):
|
|
a)
|
all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and
|
|
b)
|
any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal controls over financial reporting.
|
INDEPENDENT BANK CORPORATION
|
|
Date: May 9, 2011
|
/s/ Michael M. Magee, Jr.
|
Michael M. Magee, Jr.
|
|
Chief Executive Officer
|
1.
|
I have reviewed this quarterly report on Form 10-Q of Independent Bank Corporation;
|
2.
|
Based on my knowledge, this quarterly report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this quarterly report;
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this quarterly report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this quarterly report;
|
4.
|
The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and we have:
|
|
a)
|
designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this quarterly report is being prepared;
|
|
b)
|
designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
|
c)
|
evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
|
d)
|
disclosed in this quarterly report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting;
|
5.
|
The registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):
|
|
a)
|
all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and
|
|
b)
|
any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal controls over financial reporting.
|
INDEPENDENT BANK CORPORATION
|
|
Date: May 9, 2011
|
/s/ Robert N. Shuster
|
Robert N. Shuster
|
|
Chief Financial Officer
|
INDEPENDENT BANK CORPORATION
|
|
Date: May 9, 2011
|
/s/ Michael M. Magee, Jr.
|
Michael M. Magee, Jr.
|
|
Chief Executive Officer
|
INDEPENDENT BANK CORPORATION
|
|
Date: May 9, 2011
|
/s/ Robert N. Shuster
|
Robert N. Shuster
|
|
Chief Financial Officer
|