Independent Bank : Acquisition of HCB Financial Corp

About this update from Independent Bank Corporation

MICHIGAN'S MOST PEOPLE FOCUSED BANK March 18, 2026 Michigan's Most People Focused Bank Independent Bank Corporation (IBCP) + HCB Financial Corp. (HCBN) Strategic Fit Fortifies Scale in Attractive Michigan Markets Strategic partnership with a high-quality community bank (~$600M in assets) that bolsters IBCP's existing footprint between Grand Rapids and Lansing Supports IBCP's Strategy to "Out-Local" the Competition Local bankers will continue to serve Highpoint's long-standing clients with an enhanced product suite and broader lending capabilities Low-Cost Funding Base With Excess Liquidity Highpoint's deposit cost of 1.50% and low loan-to-deposit ratio of 67% provide flexibility to further scale relationships across the combined footprint Operational Alignment Shared Cultural & Credit Philosophies Both organizations operate under a high-touch model that prioritizes local relationships and a commitment to sound credit quality Aligned Go-to-Market Approach Entrepreneurial cultures that empower local teams with the autonomy to drive client engagement while maintaining accountability Grand Rapids Traverse City Bay City Saginaw Lansing IBCP (59) HCBN (7) Low Integration Risk Minimized Risk Manageable asset size, shared operating philosophies, mutual familiarity and strong credit quality across multiple cycles Thorough Due Diligence Comprehensive review of loan and deposit portfolios, key personnel and financial outlook Kalamazoo Detroit Source: S&P Capital IQ Pro and FactSet. Financial data as of, or for the three months ended, 12/31/25 unless otherwise noted. Pro forma impact is presented for illustrative purposes only and is subject to change based on final purchase accounting entries. EPS accretion illustrated assuming no standalone share buybacks and excludes any restructuring charges. The tangible book value per share ("TBVPS") earnback is calculated using the crossover method. 3 Pro Forma Impact (1) ~6% 2027E EPS Accretion (1) ~4% TBVPS Dilution ~3.4 Yrs TBVPS Earnback (2) ~11.5% CET1 Ratio at Closing ~13.5% TRBC Ratio at Closing Overview of HCB Financial Corp. 4 A High-Quality Community Bank with Excess Liquidity, Low-Cost Deposit Base & Strong Credit 5.44% Q4 Loan Yield CLD 1% NIB 20% $532M Multifam. 3% C&I 4% Consumer 2% Other 12% Resi. 31% CDs $100k+ 9% 20% NIB Deposits $354M CDs <$100k 6% MMDA + Savings 65% 1.50% Q4 Cost of Total Deposits NOO CRE 28% OO CRE 19% Founded : 1886 HQ : Hastings, MI OTCPK Listed : HCBN HCBN: 7 Key Financial Highlights (1) Balance Sheet $590M Assets $354M Loans HFI $532M Deposits 67% Loans / Deposits Profitability 1.01% ROAA 3.44% FTE NIM 64% Efficiency 14% Fee Income % Capital & Credit Quality 15.2% CET1 0.03% NPAs / Assets (2) 0.00% 5-Yr NCOs 218% CRE / TRBC Loan & Deposit Composition (1) Source: S&P Capital IQ Pro. Data as of, or for the twelve months ended, 12/31/25 unless otherwise noted. Represents bank-level data. Including loans 90+ days past due and still accruing. Enhancing IBCP's Existing Footprint In Central Michigan Barry County Calhoun County Allegan County 3 HCB Branches 1 HCB Branch 1 HCB Branch $476M Deposits $66M Deposits $38M Deposits 1 st Market Rank 5 th Market Rank 6 th Market Rank $90k Median HHI $64k Median HHI $87k Median HHI 9.6% '26 - '31 HHI Δ 6.4% '26 - '31 HHI Δ 9.6% '26 - '31 HHI Δ Kent County 1 HCB Branch $25M Deposits 23 rd Market Rank $89k Median HHI 12.0% '26 - '31 HHI Δ Ottawa County 1 New HCB Branch Opening In Q1 2026 Source: S&P Capital IQ Pro. Deposit data per FDIC summary of deposits as of 6/30/25. Market rankings are pro forma for pending or recently completed acquisitions. Cost of Total Deposits Highpoint's deposit costs consistently below peers across multiple cycles 2.00% 1.40% 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 Highpoint Michigan Banks (1) Source: S&P Capital IQ Pro . Represents annual data. Note: Highpoint data represents bank-level financials. (1) Represents Michigan Banks aggregate as compiled by S&P Capital IQ Pro. Net Chargeoffs / Average Loans Highpoint's cumulative net chargeoffs since 2015 are 0.33% versus peers at 0.87% with no net chargeoffs since 2020 0.26% 0.11% 0.06% 0.00% 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 Highpoint Michigan Banks (1) NPAs + 90 / Assets ~75 basis point average differential versus peers since 2015 2.50% 1.31% 0.80% 0.03% 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 Highpoint Michigan Banks (1) Pro Forma Loan and Deposit Composition Loan Composition OO CRE 15% NOO CRE 15% Multifam. 3% OO CRE 19% NOO CRE 28% OO CRE 15% NOO CRE 15% Multifam. 3% Resi. 35% $4.3B C&I 14% $0.4B Multifam. 3% C&I 4% Resi. 35% $4.7B C&I 13% CLD 6% Consumer 12% Deposit Composition Other 0% Resi. 31% Other 12% CLD 1% Consumer 2% CLD 6% Consumer 12% Other 1% Yield on Loans: 5.67% Yield on Loans: 5.44% Yield on Loans: 5.66% CDs <$100k 6% CDs $100k+ 11% NIB 22% $4.8B MMDA + Savings 51% Other IB 10% CDs <$100k 6% CDs $100k+ 9% NIB 20% $0.5B MMDA + Savings 65% CDs <$100k $100k+ CDs 6% 10% NIB 22% $5.3B MMDA + Savings 53% Other IB 9% Cost of Deposits: 1.67% Loans / Dep.: 89% Cost of Deposits: 1.50% Loans / Dep.: 67% Cost of Deposits: 1.66% Loans / Dep.: 87% Source: S&P Capital IQ Pro. Data as of, or for the three months ended, 12/31/25. Note: Financial data per bank regulatory filings; excludes purchase accounting. Key Transaction Terms Structure & Consideration Aggregate transaction value of approximately $70.2 million (1)(2) Fixed exchange ratio of 1.590 IBCP shares plus $17.51 in cash for each HCBN share outstanding; equates to $70.19 per share of HCBN stock (1) Implied consideration mix of approximately 75% stock / 25% cash (1)(2) Valuation (1) Price / 12/31/25 TBVPS: 148% / Pay-to-trade: 103% (3) Price / 2025 GAAP EPS: 11.5x Price / 2027E GAAP EPS + Fully Phased-In Synergies: 6.6x Ownership ~93% IBCP / ~7% HCBN Board One HCBN director to join IBCP and Independent Bank Boards following closing Timing & Approvals Targeted closing date in early third quarter of 2026 Customary regulatory approvals and closing conditions Approval of HCBN shareholders Based on IBCP's closing price of $33.13 on 3/17/26. Assumes no adjustment to merger consideration. See definitive merger agreement for limited adjustment scenarios. Per the terms of the definitive agreement, the shares issued to the ESOP will be repurchased 2 days after closing, currently calculated as approximately $4M, resulting in the ESOP receiving 100% cash consideration. Based on 1,000,000 HCBN shares outstanding, inclusive of 75,111 ESOP shares. Pay-to-trade defined as the transaction Price / TBVPS multiple divided by IBCP's standalone Price / TBVPS multiple. Key Transaction Assumptions Earnings IBCP projections based on mean Wall Street consensus net income estimates HCBN projections based on IBCP management's estimates following comprehensive due diligence Cost Savings Cost saves equal to 40.0% of HCBN's noninterest expense (50% phased in 2026; 100% in 2027) Revenue synergies were identified, but not included Transaction Costs One-time, pre-tax merger expenses of $8.8 million, fully realized in pro forma tangible book value estimate at closing Loan Credit Mark Gross credit mark of $4.0 million, or 1.1% of HCBN's MRQ loans held for investment (1.0x 12/31 ACL) o Utilizes early adoption of FASB's new standard for purchased assets, resulting in no accretable credit mark Loan Interest Rate Mark $9.2 million pre-tax loan interest rate write-down, accreted over 4 years using straight-line methodology Intangibles Core deposit intangible of 2.50% of non-time deposits, amortized sum-of-years digits over 10 years Other Unrealized AFS securities portfolio loss of $1.1 million after-tax, accreted over 3 years using straight-line methodology Fixed asset write-up of $2.4 million pre-tax, amortized over 25 years using straight-line methodology Modeled as 6/30/26 closing date Key Takeaways Enhances scale within existing geographic footprint Attractive financial returns with strong EPS accretion given transaction size and digestible tangible book value earnback Strong capital and liquidity position at closing Clean credit profile across multiple cycles Opportunity to deploy Highpoint's excess liquidity through IBCP's strong loan pipeline Detailed and robust due diligence process Shared values - culture, leadership & strategic familiarity Lower risk, "backyard" transaction benefitting from a successful and prudent integration track record INDEPENDENT BAN K Appendix Pro Forma Earnings Per Share Reconciliation $ millions EPS Reconciliation Build 2027E IBCP full year net income consensus mean estimate $76.0 HCBN net income 5.4 After-tax transaction adjustments Cost savings $5.1 Opportunity cost of cash (0.8) Accretion of fair value marks (loans and securities) (1) 2.1 Intangibles amortization (1.5) Fixed asset amortization (0.1) IBCP pro forma net income $86.3 IBCP weighted average diluted shares outstanding 20.8 Shares issued to HCBN, net of ESOP cashout 1.5 Pro forma weighted average diluted shares outstanding 22.3 Pro forma earnings per share $3.87 IBCP standalone EPS $3.65 $ - EPS Accretion to IBCP $0.22 % - EPS Accretion to IBCP 6.1% (1) Estimated fair value marks accreted back through earnings based on the estimated expected lives of individual assets. Purchase Accounting Summary Basic Shares Tangible Book Value Per Share Impact $ millions (millions) $ Per Share Goodwill & Other Intangible Asset Recognition $ millions IBCP tangible book value per share as of 12/31/25 (1) $474 20.5 $23.05 Aggregate merger consideration $70 (+) two quarters of consensus earnings prior to close 36 (-) two quarters of consensus dividends prior to close (12) (+) amortization of existing intangibles 0 IBCP standalone tangible book value per share at close $499 20.5 $24.26 Pro Forma Merger Adjustments (+) Stock issued to common $53 1.6 (-) Goodwill & intangibles created (2) (29) (-) After-tax restructuring expenses (7) (-) ESOP cashout (4) (0.1) Standalone HCBN tangible book value at close 49 (-) Net Impact of fair value adjustments (5) Adjusted tangible book value at closing $44 Excess over adjusted tangible book value $26 (-) Core deposit intangible created (11) (+) DTL on intangibles created 3 Goodwill created $18 Goodwill & intangibles created $29 IBCP pro forma tangible book value per share at close $512 22.0 $23.24 ($) dilution to IBCP ($1.02) (%) dilution to IBCP (4.2%) Note: Pro forma metrics projected to closing based on financial data as of December 31, 2025; Market data as of 3/17/26. Tangible book value per share is defined as total shareholders' equity less goodwill and other intangible assets divided by end of period shares outstanding. Based on assumptions as of announcement date; Subject to change at transaction closing. INDEPENDENT BAN K Attention : This is an excerpt of the original content. To continue reading it, access the original document here .

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