Independent Bank Corporation · NASDAQ:IBCP
Independent Bank — Q3 2025 Earnings Presentation
27 slides from Independent Bank's earnings presentation, Oct 28, 2025
Slide 1: Earnings Call: Third Quarter 2025
Earnings Call: Third Quarter 2025 October 28, 2025 (NASDAQ: IBCP)
Slide 2: Cautionary note regarding forward-looking statements
2 Cautionary note regarding forward-looking statements This presentation contains forward-looking statements, which are any statements or information that are not historical facts. These forward-looking statements include statements about our anticipated future revenue and expenses and our future pl
Slide 3: Agenda
3 Agenda • Formal Remarks − William B. (Brad) Kessel President and Chief Executive Officer − Gavin A. Mohr Executive Vice President and Chief Financial Officer − Joel F. Rahn Executive Vice President – Commercial Banking • Question and Answer session • Closing Remarks Note: This presentation is avai
Slide 4: 3Q'25 Overview
4 3Q'25 Overview • Net income of $17.5 million, or $0.84 per diluted share • Increase in net interest income of $3.5 million over the prior year quarter and $0.7 million over the second quarter of 2025 • Strong profitability and prudent balance sheet management results 10.2% growth in tangible book
Slide 5: Low-Cost Deposit Franchise
5 Low-Cost Deposit Franchise • Substantial core funding – $4.03 billion of non-maturity deposit Focused on Core Deposit Growth accounts (82.8% of total deposits). • Core deposit increase of $148.2 Deposit Composition million (13.0% annualized) in 9/30/25 Cost of Deposits (%)/Total Deposits ($B) 3Q'2
Slide 6: Deposit Balances
Federal Funds Rate 0.5% 1.0% 1.5% 2.0% 2.5% 3.0% 3.5% 4.0% 4.5% 5.5% 6.0% 0.0% 5.0% Sep-16 0.25% Dec-16 0.27% Time Mar-17 0.27% Reciprocal Jun-17 0.28% Sep-17 0.33% Dec-17 0.36% IBC COF Mar-18 0.42% Sav & Int-bearing chking Account Type Jun-18 0.51% Total COF IBC (excl Sub Debt) Sep-18 0.60% Dec-18
Slide 7: Diversified Loan Portfolio Focused on High Quality Growth
7 • Portfolio loan changes in 3Q'25: Diversified Loan Portfolio − Commercial – increased $57.0 million. Focused on High Quality Growth …Average new origination yield of 6.88% vs a 6.39% portfolio yield. − Mortgage – decreased $10.7 million. …Average new origination yield of 6.65% vs a 4.89% portfoli
Slide 8: Concentrations within $2.1B Commercial Loan Portfolio
8 Concentrations within $2.1B Commercial Loan Portfolio C&I or Owner Occupied Loans by Industry as a % Investor RE by Collateral Type as a % of Total Commercial Loans ($ in millions) of Total Commercial Loans ($ in millions) Retail 1.27%, Land, Vacant Land and 1.14%, Special Construction Development
Slide 9: Credit Quality Summary
9 Credit Quality Summary Non-performing Loans ($ in Millions) ORE/ORA ($ in Millions) $25.0 0.9% $1.0 $0.9 $20.4 $0.8 $20.0 0.7% $0.8 $0.6 $0.6 $15.0 0.5% $0.6 $0.5 $0.4 $0.4 0.5% $10.0 $7.1 $8.2 0.3% $0.4 $5.1 $6.0 $3.7 $5.2 $5.1 $0.2 $5.0 0.2% 0.1% $0.2 0.1% 0.2% 0.1% 0.1% 0.1% 0.1% $- -0.1% $- 20
Slide 10: Strong Capital Position
10 Strong Capital Position • Long-term capital Priorities: Capital retention to support organic growth, acquisitions TCE / TA (%) Leverage Ratio (%) and return of capital through strong and consistent dividends and share repurchases. 9.6 9.6 9.9 9.9 10.1 10.1 8.1 8.0 8.3 8.2 8.4 • Well capitalized i
Slide 11: Net Interest Margin/Income
11 Net Interest Margin/Income • Net interest income was $45.4 million in 3Q'25 compared to $41.9 million in the prior year Yields, NIM and Cost of Funds (%) quarter. The change is due to 6 4.99 5.26 5.33 5.33 5.33 5.16 an increase in average earning 5 3.65 4.38 4.66 4.33 4.33 4.30 assets and the net
Slide 12: Linked Quarter Analysis
12 Linked Quarter Analysis 3Q'25 NIM Changes Linked Quarter Average Balances and FTE Rates ($ in thousands) 3Q25 2Q25 Change 2Q'25 3.58% Avg Bal Inc/Exp Yield Avg Bal Inc/Exp Yield Avg Bal Inc/Exp Yield Cash $113,660 $1,261 4.40% $45,468 $505 4.45% $68,192 $756 -0.05% Change in Earning Asset Yield/M
Slide 13: Interest Rate Risk Management
13 • The base case modeled NII is slightly higher during the quarter given earning asset growth Interest Rate Risk Management and slight margin expansion. Asset yields were augmented by a shift in asset mix with commercial loan growth largely funded by runoff of lower yielding investments, mortgages
Slide 14: Strong Non-interest Income
14 • The $3.2 million comparative quarterly Strong Non-interest Income increase in mortgage loan servicing, net is primarily attributed to changes in the fair value of capitalized mortgage loan servicing rights associated with changes in mortgage 3Q'25 Non-interest Income Non-interest Income Trends
Slide 15: Focus on Improved Efficiency
15 • 3Q'25 efficiency ratio of 58.9%. Focus on Improved Efficiency • Compensation and employee benefits expense of $21.1 million, an increase of $1.1 million from the prior year quarter. • Performance-based compensation Non-interest Expense ($M) Efficiency Ratio (4 quarter rolling average) was $0.5
Slide 16: Outlook for 2025
16 Outlook for 2025 NET INTEREST INCOME PROVISION FOR LENDING Growth driven primarily by CREDIT LOSSES Continued growth higher average earning assets Steady asset quality metrics Outlook • IBCP forecast of mid-single digit • The forecast assumes 0.25% Fed rate cuts in • Very difficult area to foreca
Slide 17: Outlook for 2025
17 Outlook for 2025 NON-INTEREST NON-INTEREST INCOME SHARE INCOME EXPENSES TAXES REPURCHASES Outlook • Q1/Q2 quarterly 2025 forecasted range of • IBCP forecasts 2025 quarterly range of • Approximately a 19% • 2025 share repurchase for 2025 $11.0M to $12.0M and Q3/Q4 forecast of $34.5M to $35.5M with
Slide 18: Strategic Initiatives
18 Strategic Initiatives GROWTH PROCESS IMPROVEMENT & COST CONTROLS • Outside Sales - Relationship banking focus thru consistent calling on • Process Automation – leverage core investments + Fintech prospects and COI’s. partnerships: (Blend) mortgage; (Numerated) Commercial; • Inside Service/Sales –
Slide 19: Question and Answer Session Closing Remarks
19 Question and Answer Session Closing Remarks Thank you for attending NASDAQ: IBCP
Slide 20: Appendix
20 Appendix Additional Financial Data and Non-GAAP Reconciliations
Slide 21: Historical Financial Data
21 Historical Financial Data here Year Ended December 31, Quarter Ended, ($M except per share data) 2021 2022 2023 2024 9/30/24 12/31/24 3/31/25 6/30/25 9/30/25 Balance Sheet: Total Assets $4,705 $5,000 $5,264 $5,338 $5,259 $5,338 $5,328 $5,419 $5,493 Portfolio Loans $2,905 $3,465 $3,791 $4,039 $3,9
Slide 22: Historic Financial Performance
22 Historic Financial Performance Year Ended December 31, ($M except per share data) 2019 2020 2021 2022 2023 2024 5 Year CAGR Balance Sheet: Total Assets $3,565 $4,204 $4,705 $5,000 $5,264 $5,338 8.4% Portfolio Loans $2,725 $2,734 $2,905 $3,465 $3,791 $4,039 8.2% Deposits $3,037 $3,637 $4,117 $4,37
Slide 23: Strong Liquidity Position
23 Strong Liquidity Position • Significant liquidity position to manage the current Sources of Liquidity 3Q 2025 environment. Current On-balance sheet Excess reserves at the Fed $ 152.3 • Total available liquidity Sources Unpledged AFS Securities $ 496.5 significantly exceeds (192%) Total On-balance
Slide 24: Granular Deposit Base
24 • Average deposit account balance Granular Deposit Base of approximately $22,202. • Average deposit balance $4,654 $4,634 $4,659 $4,859 excluding reciprocal deposit of $4,582 $4,614 $4,627 $17,632. $1,022 $1,139 $977 $978 $1,057 $1,060 $1,048 • Average Commercial deposit balance of $101,322. Unin
Slide 25: Non-GAAP to GAAP Reconciliation
25 Non-GAAP to GAAP Reconciliation Year Ended December 31, Quarter Ended September 30, June 30, March 31, December 31, September 30, 2024 2023 2022 2021 2025 2025 2025 2024 2024 (Dollars in thousands) Net interest income $166,248 $156,329 $149,561 $129,765 $45,361 $44,615 $43,685 $42,851 $41,854 Non
Slide 26: Reconciliation of Non-GAAP Financial Measures
26 Reconciliation of Non-GAAP Financial Measures Reconciliation of Non-GAAP Financial Measures Three Months Ended Nine Months Ended September 30, September 30, 2025 2024 2025 2024 (Dollars in thousands) Net Interest Margin, Fully Taxable Equivalent ("FTE") Net interest income $ 45,361 $ 41,854 $ 133
Slide 27: Reconciliation of Non-GAAP Financial Measures (continued)
27 Reconciliation of Non-GAAP Financial Measures (continued) Reconciliation of Non-GAAP Financial Measures (continued) Independent Bank Corporation Tangible Common Equity Ratio Year Ended December 31, Quarter Ended Sepetmber 30, June 30, March 31, December 31, September 30, 2024 2023 2022 2021 2025