Independent Bank (IBCP) investor relations material

Executive summary

• Q2 2025 net income was $16.9M ($0.81/diluted share), down from $18.5M year-over-year, mainly due to lower non-interest income and higher credit loss provisions, despite strong loan growth and asset quality.

• Tangible common equity per share rose 10.8% year-over-year and 6.9% annualized from the prior quarter.

• Loans grew 9% annualized, with commercial loans up 15.3% annualized; core deposits declined 1.4% annualized due to seasonality.

• Asset quality remained strong, with nonperforming assets at 0.16% of total assets and net charge-offs at 0.02% of average loans.

• Return on average assets was 1.27% and return on average equity 14.66%.

Financial highlights

• Net interest income increased $3.3M (7.9%) year-over-year to $44.6M; net interest margin reached 3.58%, up 18 bps year-over-year and 9 bps sequentially.

• Noninterest income was $11.3M, down from $15.2M year-over-year, mainly due to prior year equity securities gain and lower mortgage servicing revenue.

• Noninterest expense was $33.8M, up slightly year-over-year but below forecast; efficiency ratio improved to 59.7%.

• Allowance for credit losses stood at 1.47% of total loans.

• Total assets reached $5.42B at June 30, 2025, up $80.4M from year-end 2024.

Outlook and guidance

• Loan growth exceeded mid-single digit forecast, reaching 9% annualized; commercial loan growth expected to remain in low double digits in H2 2025.

• Net interest income grew 7.9% year-over-year, slightly below high single digit forecast; margin expected to remain stable even with potential rate cuts.

• Noninterest income and provision for credit losses were within forecasted ranges; noninterest expense below guidance.

• Management remains optimistic for growth into 2026, citing strong pipelines, technology investments, and successful recruitment.

• Effective income tax rate for Q2 2025 was 18.4%, with a 19% rate expected for the full year.