Independent Bank (IBCP) - 2025 Q1 - Quarterly Results

First Quarter 2025 Highlights Independent Bank Corporation reported Q1 2025 net income of $15.6 million, reflecting positive operational trends and strong capital Q1 2025 Key Financial Results | Metric | Q1 2025 | Q1 2024 | | :--- | :--- | :--- | | Net Income | $15.6 million | $16.0 million | | Diluted EPS | $0.74 | $0.76 | - CEO Commentary Highlights: Overall loans increased by 3.4% (annualized) and core deposits grew by 0.8% (annualized)[2] - Net interest income grew on both a linked quarter and year-over-year basis, with a 4 basis point margin expansion[2] - Credit metrics remain strong, with non-performing assets at 0.14% of total assets and net charge-offs at 0.01% of average loans[2] - Tangible book value per share grew 13.2% compared to the prior year quarter[2] - Key achievements in Q1 2025 include a $0.8 million (1.9%) increase in net interest income over Q4 2024[3] - Tangible book value per share increased 13.2% from March 31, 2024, and a $0.26 per share dividend was paid[3] Operating Results Net interest income rose to $43.7 million, an 8.7% increase, while non-interest income decreased due to mortgage servicing Net Interest Income and Margin Performance | Metric | Q1 2025 | Q4 2024 | Q1 2024 | | :--- | :--- | :--- | :--- | | Net Interest Income ($M) | $43.7 | $42.9 | $40.2 | | Net Interest Margin | 3.49% | 3.45% | 3.30% | - Non-interest income decreased to $10.4 million in Q1 2025 from $12.6 million in Q1 2024, mainly due to variances in mortgage banking revenues[6] - Mortgage loan servicing generated a net expense of $0.6 million in Q1 2025, a sharp contrast to the $2.7 million income in Q1 2024[8][9] - This was driven by a $(1.5) million negative fair value change and a decline in servicing revenue following the sale of $931 million in mortgage servicing rights on January 31, 2025[8][9] - Non-interest expenses increased to $34.3 million in Q1 2025 from $32.2 million in the prior-year period[9] Asset Quality The bank maintained robust asset quality in Q1 2025, with low non-performing loans and stable credit loss allowance Non-Performing Assets (NPA) Trend | Metric | 3/31/2025 | 12/31/2024 | 3/31/2024 | | :--- | :--- | :--- | :--- | | Total non-performing loans (Thousands) | $7,086 | $6,002 | $3,690 | | Ratio of NPLs to total loans | 0.17% | 0.15% | 0.10% | | Ratio of NPAs to total assets | 0.14% | 0.13% | 0.09% | Credit Loss Metrics (Q1 2025 vs Q1 2024) | Metric | Q1 2025 | Q1 2024 | | :--- | :--- | :--- | | Provision for credit losses (Millions) | $0.72 | $0.74 | | Net charge-offs (Millions) | $0.07 | $0.22 | | Allowance for credit losses (% of total loans) | 1.47% | N/A | Balance Sheet, Capital, and Liquidity As of March 31, 2025, total assets were $5.33 billion, with strong capital ratios and substantial liquidity - At March 31, 2025, total assets were $5.33 billion, loans were $4.07 billion (up from $4.04 billion at year-end 2024), and deposits were $4.63 billion (down from $4.65 billion)[13] - Total shareholders' equity increased to $467.3 million from $454.7 million at year-end 2024, primarily due to earnings retention and a decrease in accumulated other comprehensive loss[15] - Tangible common equity per share rose to $20.87 from $20.33[15] Regulatory Capital Ratios (as of 3/31/2025) | Ratio | 3/31/2025 | Well Capitalized Minimum | | :--- | :--- | :--- | | Tier 1 capital to average total assets | 9.56% | 5.00% | | Tier 1 capital to risk-weighted assets | 11.93% | 8.00% | | Total capital to risk-weighted assets | 13.19% | 10.00% | - The company had significant available liquidity at quarter-end, including unused credit lines of approximately $1.10 billion with the FHLB and $486.1 million with the FRB[16] Share Repurchase Plan The company's 2025 share repurchase plan authorized up to 1.1 million shares, with significant activity post-Q1 2025 - The 2025 share repurchase plan authorizes the purchase of up to 1,100,000 shares, or approximately 5% of outstanding common stock, through December 31, 2025[17] - Repurchase activity: - During Q1 2025: 1,093 shares for $0.03 million[17] - Post-Q1 (Apr 3 - Apr 22, 2025): 249,482 shares for $7.2 million[17] Financial Statements and Non-GAAP Reconciliations This section presents consolidated financial statements, selected data, and reconciliations of non-GAAP financial measures Consolidated Statements of Financial Condition As of March 31, 2025, total assets were $5.33 billion, with $4.01 billion in net loans and $4.63 billion in deposits Balance Sheet Summary (in thousands) | Account | March 31, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Cash and Cash Equivalents | $128,145 | $119,882 | | Net Loans | $4,012,656 | $3,979,446 | | Total Assets | $5,328,428 | $5,338,104 | | Total Deposits | $4,633,931 | $4,654,088 | | Total Liabilities | $4,861,151 | $4,883,418 | | Total Shareholders' Equity | $467,277 | $454,686 | Consolidated Statements of Operations For Q1 2025, the company reported $43.7 million in net interest income, resulting in a net income of $15.6 million Income Statement Summary (Q1 2025, in thousands) | Account | Amount | | :--- | :--- | | Net Interest Income | $43,685 | | Provision for credit losses | $721 | | Total Non-interest Income | $10,424 | | Total Non-interest Expense | $34,262 | | Income Before Income Tax | $19,126 | | Net Income | $15,590 | | Diluted EPS | $0.74 | Selected Financial Data Five-quarter trend data shows consistent performance with increasing net interest income and growing tangible common equity Five-Quarter Performance Trend | Metric | Q1 2025 | Q4 2024 | Q3 2024 | Q2 2024 | Q1 2024 | | :--- | :--- | :--- | :--- | :--- | :--- | | Net Income ($k) | $15,590 | $18,461 | $13,810 | $18,528 | $15,991 | | Diluted EPS | $0.74 | $0.87 | $0.65 | $0.88 | $0.76 | | Net Interest Income ($k) | $43,685 | $42,851 | $41,854 | $41,346 | $40,197 | | Tangible common equity per share | $20.87 | $20.33 | $20.22 | $19.16 | $18.44 | Reconciliation of Non-GAAP Financial Measures The company provides reconciliations for non-GAAP metrics, including Net Interest Margin (FTE) and Tangible Common Equity per share Net Interest Margin (FTE) Reconciliation | Metric | Q1 2025 | Q1 2024 | | :--- | :--- | :--- | | Net interest margin (GAAP) | 3.46% | 3.28% | | Net interest margin (FTE) | 3.49% | 3.30% | Tangible Common Equity per Share | Metric | 3/31/2025 | 3/31/2024 | | :--- | :--- | :--- | | Common shareholders' equity per share | $22.28 | $19.88 | | Tangible common equity per share | $20.87 | $18.44 | Company and Conference Call Information Independent Bank Corporation, a Michigan-based bank holding company, scheduled a conference call to review its first-quarter results - Independent Bank Corporation (NASDAQ: IBCP) is a Michigan-based bank holding company with approximately $5.3 billion in assets, operating a branch network across Michigan's Lower Peninsula[20] - An earnings conference call to review the quarterly results was scheduled for 11:00 am ET on Thursday, April 24, 2025[18]