Independent Bank : IBCP 2026 1Q Earnings Presentation FINAL

Published: 2026-05-06 10:40:10 ET IBCP

Published on 05/06/2026 at 10:40 am EDT

Earnings Call: First Quarter 2026

April 23, 2026

(NASDAQ: IBCP)

Agenda

Formal Remarks

President and Chief Executive Officer

Executive Vice President and Chief Financial Officer

Executive Vice President - Commercial Banking

Question and Answer session

Closing Remarks

Note:

This presentation is available at https://www.IndependentBank.com

in the Investor Relations area under the "Presentations" tab.

1Q'26 Overview

1Q'26 Earnings

Net income of $16.9 million, or $0.81 per diluted share

Increase in net interest income of $3.2 million over the prior year quarter and $0.5 million over the Fourth quarter of 2025

Strong profitability and prudent balance sheet management results 12.0% growth in tangible book value per share compared to the prior year quarter.

Solid Loan Growth and Strong Asset Quality

Total loans increased 3.0% annualized with commercial loan growth of $53.8 million or 9.9% annualized

New loan production continues to be largely focused on new commercial clients that bring deposits to the bank

Asset quality remained sound with NPAs/Total Assets at 0.51% and NCO of 0.03% of average loans in the quarter

Positive Trends in

Key Metrics

Generated a ROAA and ROAE of 1.24% and 13.43%, respectively

Net interest margin of 3.65% compared to 3.49% in the prior year quarter

Net growth in total deposits, net of brokered deposits of $80.4 or 6.9% annualized

Healthy Capital & Liquidity Positions

Tangible book value per share increased 5.9% annualized from end of prior quarter

An increase in tangible common equity ratio to 8.71%

An increase in CET1 ratio to 11.70%

Low-Cost Deposit Franchise

Cost of Deposits (%)/Total Deposits ($B)

Total Deposits

Cost Of Deposits

Q4'23

1.99%

Q1'24

2.01%

Q2'24

2.03%

Q3'24

2.11%

Q4'24

1.93%

Q1'25

1.80%

Q2'25

1.77%

Q3'25

1.82%

Q4'25

1.67%

Q1'26

1.54%

Focused on Core Deposit Growth

Deposit Composition

3/31/26

Brokered 1%

Time 14%

Non-interest Bearing 20%

Reciprocal 21%

$4.9B

Savings and Interest-bearing Checking

44%

Core Deposits: 85.4%

Substantial core funding - $4.17

billion of non-maturity deposit accounts (85.4% of total deposits).

Core deposit increase of $80.4 million (6.9% annualized) in 1Q'26.

Time deposit decrease of $5.8 million (3.6% annualized) in 1Q'26.

Total deposits increased $119.0 million (10.1%) since 12/31/25 with non-interest bearing down

$0.8 million, savings and interest-bearing checking up $33.1 million, reciprocal up $54.0 million, time down $5.8 million and brokered time up $38.6 million.

Deposits by Customer Type:

Retail - 47%

Commercial - 38%

Municipal - 15%

Mar-18 Jun-18 Sep-18 Dec-18 Mar-19 Jun-19 Sep-19 Dec-19 Mar-20 Jun-20 Sep-20 Dec-20 Mar-21 Jun-21 Sep-21 Dec-21 Mar-22 Jun-22 Sep-22 Dec-22 Mar-23 Jun-23 Sep-23 Dec-23 Mar-24 Jun-24 Sep-24 Dec-24 Mar-25 Jun-25 Sep-25 Dec-25 Mar-26

Federal Funds Rate

Total COF IBC (excl Sub Debt) 33.4%

Total int-bearing Dep (excl brokered) 43.2%

Time 60.0%

Reciprocal 68.6%

Sav & Int-bearing chking 22.7%

0.42%

0.51%

0.60%

0.73%

0.82%

0.85%

0.74%

0.63%

0.30%

0.23%

0.39%

0.14%

0.12%

0.11%

0.10%

0.12%

0.33%

0.79%

1.25%

1.57%

1.80%

1.99%

2.01%

2.02%

2.10%

1.92%

1.80%

1.76%

1.82%

1.67%

1.54%

Historic IBC Cost of Funds (excluding sub debt)

vs. the Federal Funds Rate (with Deposit Balances)

Account Type

Cycle Beta

6.0%

5.5%

5.0%

4.5%

4.0%

3.5%

3.0%

2.5%

2.0%

1.5%

1.0%

0.5%

0.0%

6,000,000

5,000,000

4,000,000

3,000,000

2,000,000

1,000,000

Deposit Balances ($ in thousands)

$3.8

$3.9

$4.0

$4.1

$4.2

$4.3

Diversified Loan Portfolio Focused on High Quality Growth

Loan Composition

3/31/26

Held for Sale 1%

Commercial 52%

Installment 12%

$4.3B

Mortgage 35%

Yield on Loans (%)/

Total Portfolio Loans ($B)

Total Portfolio Loans

Yield on Loans

4Q'23

1Q'24

2Q'24

3Q'24

4Q'24

1Q'25

2Q'25

3Q'25

4Q'25

1Q'26

5.73%

5.80%

5.93%

5.96%

5.83%

5.74%

5.76%

5.81%

5.64%

5.54%

Note: Portfolio loans exclude loans HFS.

Portfolio loan changes in 1Q'26:

Commercial - increased $53.8

million.

…Average new origination yield of 6.39% vs a 6.08% portfolio yield.

Mortgage - decreased $4.5 million.

…Average new origination yield of 6.22% vs a 4.87% portfolio yield.

Installment - decreased $17.5

million.

…Average new origination yield of 6.86% vs a 5.23% portfolio yield.

Mortgage loan portfolio weighted average FICO of 751 and average balance of $189,230.

Installment weighted average FICO of

755 and average balance of $25,648.

Commercial loan rate mix:

38% fixed / 62% variable.

Indices - 35% tied to Prime and 65% tied to SOFR.

Mortgage loan (including HELOC) rate mix:

60% fixed / 40% adjustable or variable.

7% tied to a US Treasury rate and 93% tied to SOFR.

Concentrations within $2.3B Commercial Loan Portfolio

Finance and Insurance

Professional, Scientific, and Technical Services

Transportation

6.06%

$137

5.27%

$120

7.37%

$167

4.84%

$110

Other Services (except Public

Administration)

Wholesale

$1,549MM

68%

4.50%

$102

Retail

4.49%

$102

Hotel and Accomodations

8.01%

$182

8.42%

$191

$62

3.41%

$77

$58 $49

Manufacturing

Construction

Health Care and Social Assistance

Real Estate Rental and Leasing

Dealership Finance

C&I or Owner Occupied Loans by Industry as a %

of Total Commercial Loans ($ in millions)

Investor RE by Collateral Type as a %

of Total Commercial Loans ($ in millions)

1.27%, 1-4 Family,

$46

1.14%, Land,

Vacant Land and Development, $26

2.20%, Special Purpose, $51

8.76%,

Commercial

Industrial, $212

3.37%,

Construction,

$58

$718MM

32%

4.17%, Retail,

$101

4.68%, Multifamily,

$121

4.47%, Office, $103

Note: $1.549 billion, or 68.3% of the commercial loan portfolio is C&I or owner occupied, while $718 million, or 31.7% is investment real estate. The percentage concentrations are based on the entire commercial portfolio of $2.27 billion as of March 31, 2026

Credit Quality Summary

0.5%

NPLs / Total Loans

Non-performing Loans (NPLs)

2023 2024 Q1'25 Q2'25 Q3'25 Q4'25 Q1'26

-0.1%

0.2%

0.1%

0.3%

0.1%

$8.2

$7.1

$6.0

$5.2

$10.0

$5.0

0.6%

0.5%

$20.0

$15.0

0.7%

$20.4

$23.1

$25.0

0.9%

$27.6

Non-performing Loans ($ in Millions)

$30.0

0.1%

1Q'26

4Q'25

3Q'25

2Q'25

1Q'25

2024

2023

$0.4

$0.2

$0.4

$0.6

$0.8

$0.9

$1.0

ORE/ORA ($ in Millions)

0.1%

0.2%

0.1%

0.2%

0.1%

0.2%

1.4%

1.2%

1.0%

0.8%

0.6%

0.4%

0.2%

0.0%

2023 2024 Q1'25 Q2'25 Q3'25 Q4'25 Q1'26

30-89 Days PD

30-89 Days PD / Total Loans

$2.0

$3.9

$3.3

$4.0

$5.1

$6.0

$6.6

$7.8

$7.0

$8.0

$8.2

$10.0

30 to 89 Days Delinquent ($ in Millions)

$5.0

Non-performing Loans 90+ Days PD ORE/ORA

$5.2

$6.0

$7.1

$8.2

2023

2024

1Q'25

2Q'25

3Q'25

4Q'25

1Q'26

$23.1

$20.4

$0.4

$0.9

$0.6

$10.0

$27.6

$0.4

$20.0

$15.0

$0.9

$0.6

$25.0

$0.8

Non-performing Assets ($ in Millions)

$30.0

Note 1: Non-performing loans and non-performing assets exclude troubled debt restructurings that are performing.

Strong Capital Position

Q1`26

Q4'25

Q3'25

Q2'25

Q1'25

Q4'24

CET1 Ratio (%)

Q1`26

Q4'25

Q3'25

Q2'25

Q1'25

Q4'24

TCE / TA (%)

Total RBC Ratio (%)

Q4'24 Q1'25 Q2'25 Q3'25 Q4'25 Q1`26

13.6

13.8

13.7

14.2

14.5

11.6

11.4

11.2

11.7

11.5

11.4

Leverage Ratio (%)

Q4'24 Q1'25 Q2'25 Q3'25 Q4'25 Q1`26

9.9

10.2

10.1

10.3

8.2

8.0

8.4

8.3

8.7

Long-term capital Priorities:

Capital retention to support organic growth, acquisitions and return of capital through strong and consistent dividends

and share repurchases.

Well capitalized in all regulatory

capital measurements.

Tangible common equity ratio

excluding the impact of unrealized losses on securities

AFS and HTM is 9.6%

The reduction in Total RBC ratio

in 3Q'25 was due primarily to the redemption of $40 million in subordinated debt on August

31, 2025.

Net Interest Income ($ in Millions)

Q3'22 Q4'22 Q1'23 Q2'23 Q3'23 Q4'23 Q1'24 Q2'24 Q3'24 Q4'24 Q1'25 Q2'25 Q3'25 Q4'25 Q1'26

Yields, NIM and Cost of Funds (%)

3.00

3.26

3.49

2.18

1.39

0.12

0.10

0.77

0.12

0.45

0.92

Net Interest Margin (FTE)

Average Effective FF Yield

Cost of Funds

Q1'22

Q2'22

Q3'22

Q4'22

Q1'23

Q2'23

Q3'23

Q4'23

Q1'24

Q2'24

Q3'24

Q4'24

Q1'25

Q2'25

Q3'25

Q4'25

Q1'26

$46.9

Interest Margin/Income

52 4.38 4.99 5.26 5.33 5.33 5.33 5.16 4.66 4.33 4.33 4.30

3.90 3.6

65 3.33 3.26 3.23 3.26 3.30 3.40 3.37 3.45 3.49 3.58 3.54 3.6

2 3.6

1.72

1.93

2.11

2.14

2.16

2.22 2.02 1.86 1.86 1.95 1.73 1.6

Net interest income was $46.9 million in 1Q'26 compared to

$43.7 million in the prior year quarter. The change is due to an increase in average earning assets and the net interest margin compared to the year-ago quarter.

Net interest margin was 3.65% during the first quarter of 2026, compared to 3.49% in the year-ago quarter and 3.62% in the fourth quarter of 2025.

11th consecutive quarter of increasing net interest income.

1Q'26 NIM Changes

Linked Quarter Analysis

4Q'25

3.62%

Change in Earning Asset Yield/Mix

-0.06%

Change in interest bearing liability mix

0.01%

Decrease in funding costs

0.10%

Interest charge-off on commercial loan

-0.02%

1Q'26

3.65%

Linked Quarter Average Balances and FTE Rates ($ in thousands)

1Q26 4Q25

Avg Bal Inc/Exp Yield Avg Bal Inc/Exp Yield

Change

Avg Bal

Inc/Exp

Yield

Cash

$79,636

$748

3.81%

$79,621

$780

3.89%

$15

($32)

-0.08%

Investments

814,353

6,594

3.24%

833,371

6,863

3.29%

(19,018)

(269)

-0.05%

Commercial loans

2,252,105

33,965

6.12%

2,168,947

34,106

6.24%

83,158

(141)

-0.12%

Mortgage loans

1,534,204

18,369

4.80%

1,532,931

18,779

4.90%

1,273

(410)

-0.10%

Consumer loans

529,063

6,939

5.25%

547,511

7,343

5.36%

(18,448)

(404)

-0.11%

Earning assets

$5,209,360

$66,615

5.16%

$5,162,381

$67,871

5.24%

$46,979

($1,256)

-0.08%

Nonmaturity deposits

$3,008,287

$11,915

1.61%

$2,932,767

$12,743

1.72%

$75,520

(828)

-0.11%

CDARS deposits

111,032

867

3.17%

109,779

938

3.39%

1,253

(71)

-0.22%

Retail Time deposits

658,548

5,188

3.19%

667,990

5,682

3.37%

(9,442)

(494)

-0.18%

Brokered deposits

47,622

427

3.64%

70,055

746

4.22%

(22,433)

(319)

-0.58%

Bank borrowings

27,340

240

3.56%

25,920

243

3.72%

1,420

(3)

-0.16%

IBC debt

39,873

677

6.89%

39,856

719

7.16%

(42)

-0.27%

Cost of funds

$3,892,702

$19,314

2.01%

$3,846,367

$21,071

2.17%

$46,335

($1,757)

-0.16%

Free funds

$1,316,658

$1,316,014

$644

Net interest income

$47,301

$46,800

$501

Net interest margin

3.65%

3.62%

0.03%

Interest Rate Risk Management

March 31, 2026

-200

-100

Base-rate

100

200

Net Interest Income

$195,430

$197,693

$199,445

$201,943

$204,794

Change from Base

-2.01%

-0.88%

1.25%

2.68%

December 31, 2025

-200

-100

Base-rate

100

200

Net Interest Income

$191,340

$194,101

$196,298

$198,944

$202,205

Change from Base

-2.53%

-1.12%

1.35%

3.01%

Changes in Net Interest Income (Dollars in 000's)

Simulation analyses calculate the change in net interest income over the next twelve months, under immediate parallel shifts in interest rates, based upon a static statement of financial condition, which includes derivative instruments, and does not consider loan fees.

The base case modeled NII is slightly higher during the quarter due to $70 million of earning asset growth and 1 basis point of modeled margin expansion. Earning asset expansion is centered in commercial loans up $54 million and overnight liquidity, up $40 million. Runoff in lower yielding investments and consumer loans helped fund earning asset growth. Asset and liability yields were stable during the quarter, with asset yields up 2 basis points and liability costs 1 basis point higher.

The NII sensitivity position to lower rates declined modestly while the benefit to higher rates remained largely unchanged. Reduced exposure to lower rates is due to $75 million notional of floor purchases, termination of $87 million of short term pay fixed swaps and a slight shortening in the maturity structure of time deposits. The overall position is closely matched for smaller rate changes of +/- 100 basis points. The bank has modest exposure to larger rate declines and benefits from larger rate increases.

Base-rate is a static balance sheet applying the spot yield curve from the valuation date.

Stable core funding base. Transaction accounts fund 38.4% of assets and other non-maturity deposits fund another 17.4% of assets. Low wholesale funding of just 2.2% of assets.

38.2% of assets reprice in 1 month and 49.3% reprice in the next 12 months.

Continually evaluating strategies to manage NII through hedging, funding strategies as well as product pricing and structure.

12.2%

16.2%

18.6%

12.2%

22.2%

13.6%

14.5%

14.7%

15.1%

15.4%

Strong Non-interest Income

1Q'26 Non-interest Income

(thousands)

Bank owned life

insurance

$322

Other

income

$1,820

Interchange

income

$3,234

Investment &

insurance commissions

$809

$12.0MM

Mortgage

loan servicing, net

$1,646

Gain (Loss)-

Mortgage

Sale

$1,308

Service

Chg Dep

$2,935

Gain (Loss)-

Securities

$(26)

Non-interest Income Trends

($M)

$20.0

$18.0

$16.0

$14.0

$12.0

$10.0

$8.0

$6.0

$4.0

$2.0

30.0

25.0

20.0

15.0

10.0

5.0

0.0

Non-interest Income

Non-interest Inc/Operating Rev (%)

Q4'23 Q1'24 Q2'24 Q3'24 Q4'24 Q1'25 Q2'25 Q3'25 Q4'25

Q1'26

$9.1

$12.6

$15.2

$9.5

$19.1

$10.4

$11.3

$11.9

$12.0

Source: Company documents.

The $2.3 million comparative quarterly 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 loan interest rates and expected future prepayment levels. The decrease in servicing revenue is attributed to the sale of approximately

$931 million of mortgage servicing

rights on January 31, 2025.

Mortgage banking:

$1.3 million in net gains on mortgage loans in 1Q'26 vs. $2.3 million in the year ago quarter. The decrease is primarily due to lower profit margins on mortgage loan sales that was partially offset by an increase in volume of mortgage loans sold.

$130.6 million in mortgage loan originations in 1Q'26 vs. $107.8 million in 1Q'25 and $134.3 million in 4Q'25.

1Q'26 mortgage loan servicing includes a

$0.9 million ($0.04) per diluted share, after tax) increase in fair value adjustment due to price compared to a decrease of $1.5 million ($0.06 per diluted share, after tax) in the year ago quarter.

$32.2

$33.3

$32.6

$37.0

$34.3

$33.8

$34.1

$36.1

$38.3

Focus on Improved Efficiency

Efficiency Ratio (4 quarter rolling average)

Non-interest Expense ($M)

$40.0

$35.0

$30.0

$25.0

$20.0

$15.0

$10.0

$5.0

Compensation and Benefits

Occupancy FDIC Insurance

Loan and Collection

Data Processing Other

Q1'24

Q2'24

Q3'24

Q4'24

Q1'25

Q2'25

Q3'25

Q4'25

Q1'26

3Q'23

4Q'23

1Q'24

2Q'24

3Q'24

4Q'24

1Q'25

2Q'25

3Q'25

4Q'25

1Q'26

61.0%

Source: Company documents.

1Q'26 efficiency ratio of 64.3%.

Compensation and employee benefits expense of $21.8 million, a increase of $1.4 million from the prior year quarter.

Performance-based compensation was $0.2 million higher than the prior year quarter.

Payroll taxes and employee benefits decreased $0.2 million primarily due to lower healthcare related costs.

Data processing costs increased by

$0.2 million primarily due to core data processor annual asset growth and CPI related cost increases as well as price increases in other software solutions.

Litigation expense was $1.5 million in 1Q'26 compared to zero in the prior year quarter.

Merger related expense was $0.3 million in the current quarter compared to zero in the prior year quarter.

Advertising expense increased $0.3 million due primarily to customer incentives true up.

Opportunities exist to gain additional efficiencies as we continue to optimize our delivery channels.

Outlook for 2026

LENDING

Continued growth

NET INTEREST INCOME

Growth driven primarily by higher average earning assets

PROVISION FOR CREDIT LOSSES

Steady asset quality metrics

Outlook for 2026

*as of January, 2026

IBCP forecast of approximately 4.5%-5.5% overall loan growth is based on an increase in commercial loans (11%-12%) with mortgage loans (0%-1%) and installment loans declining (5.0%-5.5%).

This growth forecast also assumes a stable

Michigan economy.

The forecast assumes 0.25% Fed rate cuts in March and August in the federal funds rate while long-term interest rates increase slightly over year-end 2025 levels.

IBCP forecast of high-single digit (7%-8%) growth is primarily supported by an increase in earning assets and a favorable shift in the earning asset base. Expect the net interest margin (NIM) to increase (0.18% - 0.23%) in 2026 compared to full-year 2025. Primary driver is a decrease in yield on interest bearing liabilities that is partially offset by a decrease in earning asset yield.

Very difficult area to forecast. Future provision levels under CECL will be particularly sensitive to loan growth and mix, projected economic conditions, watch credit levels and loan default volumes.

The allowance as a percentage of total

loans was at 1.48% at 12/31/25

A full year 2026 provision (expense) for credit losses of approximately 0.20%-0.25% of average total portfolio loans would not be unreasonable.

1Q'26

Update

Total portfolio loans increased $31.8 million (3.0% annualized) in 1Q'26 which is below our forecasted range. Commercial loan growth of $53.8 million (9.9% annualized), mortgage loan decrease of

$4.5 million (-1.2% annualized) and installment loan decrease of $17.5 million (-13.2% annualized).

1Q'26 net interest income was $3.2 million (7.3%) higher than the prior year quarter which is within the forecasted range. The net interest margin was 3.65% for the current quarter and 3.49% for the prior year quarter and up 0.03% from the linked quarter.

The provision for credit losses was an expense of $0.4 million (0.03% annualized) for the first quarter below the forecasted range.

Outlook for 2026

NON-INTEREST INCOME

NON-INTEREST EXPENSES

INCOME TAXES

SHARE REPURCHASES

Outlook for 2026

*as of January, 2026

Quarterly 2026 forecasted range of

$11.3M to $12.3M. Full year up 3.0% to 4.0% from 2025 actual of $45.6M

Expect mortgage loan origination volumes to be down 6.0% to 7.0% and net gain on sale to be down 14.0% to 16.0% compared to full year 2025. Assumes mortgage loan servicing net of approximately $0.5M per quarter in 2026.

IBCP forecasts 2026 quarterly range of

$36.0M to $37.0M with the total for the year up 5.0% to 6.0% from the 2025 actual of $138.2M.

The primary driver is an increase in compensation and employee benefits, data processing; loan and collections and occupancy.

Approximately a 17% effective income tax rate in 2026.This assumes a 21% statutory federal corporate income tax rate during 2026.

2026 share repurchase authorization at approximately 5% (1.1 million) of outstanding shares.

Share repurchases will be dependent on capital levels, capital allocation options and share price trends. We are not modeling any share repurchases in 2026.

1Q'26

Update

Non-interest income totaled $12.0 million in 1Q'26, which is within the forecasted range. Mortgage loan originations increased $22.8 million over the prior year quarter while net gain as percentage of mortgages loans sold was 1.23% below the prior year quarter.

Total non-interest expense was $38.3 million in the 1Q'26, which was higher than our forecasted quarterly range. Non-recurring expense items include

$1.5 million in litigation expense and

$0.4 million true up related to promotional payments to deposit customers.

Actual effective income tax rate of 16.6% for the first quarter of 2026.

There were no shares of common stock repurchased in the first quarter of 2026.

Strategic Initiatives

Outside Sales - Relationship banking focus thru consistent calling on

prospects and COI's.

Inside Service/Sales - high retention + high cross sales, collaboration of strategic partners.

Digital Marketing - Leverage data insights, target strategically, elevate brand image, personalize the customer experience.

Leverage Referral Network - Fintech (ReferLive);

New Products - SMB deposit product, Business digital pmts.

Market Expansion - Through existing indirect dealer network.

Selective and opportunistic bank and branch acquisitions.

Process Automation - leverage core investments + Fintech

partnerships: (Blend) mortgage

Branch Optimization - including assessing existing locations, new locations, service hours, staffing, & workflow and leveraging technology.

Promotion of Self-Serve Channels - (One Wallet, Treasury One, etc.)

Leverage Banker Capacity - including on-line appointment setting.

Leverage Middleware + API's - expediate new technology implementation.

Optimize Office Space Utilization

Invest in our Team - competitive C&B offering, skill training, leadership development, etc.

High Employee Engagement - thru fostering a culture of purpose, opportunity, continuous learning, diversity, reward + recognition.

Promote Teamwork + Alignment across all business units.

Invest in technology - to enhance the employee experience + customer experience.

Client Service Model - well defined and applied.

Utilize three layers of defense (business unit, risk management and internal audit). Independent & collaborative approach.

Consistent earnings + maintain strong capital levels.

Proactive credit quality monitoring and problem resolution.

Manage Liquidity and IRR.

Manage Operational risk, emphasizing cyber security, fraud prevention, and regulatory compliance.

Effective relationships with regulators & other outside oversight parties.

Proactive, transparent and good communication.

Question and Answer Session Closing Remarks

Thank you for attending

NASDAQ: IBCP

Appendix

Additional Financial Data

and Non-GAAP Reconciliations

Disclaimer

Independent Bank Corporation published this content on May 06, 2026, and is solely responsible for the information contained herein. Distributed via Public Technologies (PUBT), unedited and unaltered, on May 06, 2026 at 14:39 UTC.