Highlights for the third quarter of 2025 include:
Increase in net interest income of $0.7 million (or 1.7%) over the second quarter of 2025;
Increase in tangible common equity per share of common stock of $1.06 (or 20.0% annualized) from June 30, 2025;
Net growth in total deposits, less brokered time deposits of $148.2 million (or 13.0% annualized) from June 30, 2025;
Net growth in loans of $33.9 million (or 3.2% annualized) from June 30, 2025; and
The payment of a 26 cent per share dividend on common stock on August 15, 2025.
GRAND RAPIDS, Mich., Oct. 28, 2025 (GLOBE NEWSWIRE) -- Independent Bank Corporation (NASDAQ:IBCP) reported third quarter 2025 net income of $17.5 million, or $0.84 per diluted share, versus net income of $13.8 million, or $0.65 per diluted share, in the prior-year period.
William B. ("Brad") Kessel, the President and Chief Executive Officer of Independent Bank Corporation, commented: "I am proud of our team's performance and pleased to report continued positive momentum in our third quarter 2025 results. Loan balances grew at an annualized rate of 3.2%, and total deposits, less brokered time deposits increased by 13.0% (annualized). We achieved growth in net interest income both sequentially and year-over-year. Our net interest margin displayed a small decline on a linked quarter basis primarily due to the acceleration of unamortized issuance costs on subordinated debt we redeemed in the third quarter. I would characterize the NIM as stable when adjusting for this event. Expense management remains a strength, as reflected in our third-quarter efficiency ratio of 58.86%, which demonstrates the effectiveness of our recent strategic investments. These solid fundamentals supported a 10.2% year-over-year increase in tangible common equity per share and strong returns, including a return on average assets of 1.27% and a return on average equity of 14.57%. Despite market uncertainty, our credit quality remains strong, with watch credits at low levels. Non-performing assets increased from 0.16% of total assets to 0.38% of total assets on a quarter-over-quarter basis primarily as the result of one commercial relationship where the borrower is experiencing financial difficulties. Our annualized net charge-offs continue at historically low levels, four basis points through the first three quarters of 2025. The allowance for credit losses stands at 1.49% of total loans. I am optimistic we will finish 2025 strong and remain excited about our prospects to grow our customer base and earnings in 2026."
Significant items impacting comparable third quarter 2025 and 2024 results include the following:
Changes in the fair value due to price of capitalized mortgage loan servicing rights (the "MSR Changes") of $(0.6) million ($(0.02) per diluted share, after taxes) for the three-month period ended September 30, 2025, as compared to $(4.2) million ($(0.16) per diluted share, after taxes) for the three-month period ended September 30, 2024.
Operating Results
The Company's net interest income totaled $45.4 million during the third quarter of 2025, an increase of $3.5 million, or 8.4% from the year-ago period, and an increase of $0.7 million, or 1.7%, from the second quarter of 2025. The Company's tax equivalent net interest income as a percent of average interest-earning assets (the "net interest margin") was 3.54% during the third quarter of 2025, compared to 3.37% in the year-ago period, and 3.58% in the second quarter of 2025. The year-over-year quarterly increase in net interest income was due to both an increase in average interest-earning assets and the higher net interest margin. The linked quarter increase in net interest income was due to an increase in average interest-earning assets that was partially offset by a modest decrease in net interest margin. Average interest-earning assets were $5.16 billion in the third quarter of 2025, compared to $4.99 billion in the year-ago quarter and $5.04 billion in the second quarter of 2025.
Non-interest income totaled $11.9 million for the third quarter of 2025, compared to $9.5 million in the comparable prior year period. This change was primarily due to variances in mortgage banking related revenues.
Net gains on mortgage loans in the third quarters of 2025 and 2024 were approximately $1.5 million and $2.2 million, respectively. The comparative quarterly decrease in net gains on mortgage loans was due to a decrease in both gain on sale margin on mortgage loans sold and a decrease in the volume of mortgage loans sold.
Mortgage loan servicing, net, generated income (expense) of $0.1 million and $(3.1) million in the third quarters of 2025 and 2024, respectively. The significant variance in mortgage loan servicing, net is primarily due to changes in the fair value of capitalized mortgage loan servicing rights associated with changes in interest rates and the associated expected future prepayment levels and expected float rates as well as a decline in servicing revenue. The decline in servicing revenue is attributed to the sale of approximately $931 million of mortgage servicing rights on January 31, 2025. Capitalized mortgage loan servicing rights totaled $31.5 million and $46.8 million at September 30, 2025 and December 31, 2024, respectively. The decline during the first nine months of 2025 was primarily attributable to the aforementioned mortgage servicing right sale. This transaction was executed in part to reduce the amount of exposure the Company had to rate variances that may impact the mortgage servicing right asset valuation in future periods. While the magnitude of fair value adjustments would also be expected to decrease, those adjustments are dependent upon factors that are harder to predict.
Mortgage loan servicing, net activity is summarized in the following table:
Three months ended
Nine months ended
9/30/2025
9/30/2024
9/30/2025
9/30/2024
(In thousands)
Mortgage loan servicing, net:
Revenue, net
$
1,614
$
2,248
$
5,145
$
6,681
Fair value change due to price
(576
)
(4,155
)
(2,328
)
(1,979
)
Fair value change due to pay-downs
(903
)
(1,223
)
(2,656
)
(3,016
)
Loss on sale of originated servicing rights
$
(61
)
$
—
(233
)
—
Total
$
74
$
(3,130
)
$
(72
)
$
1,686
Non-interest expenses totaled $34.1 million in the third quarter of 2025, compared to $32.6 million in the year-ago period.
The Company recorded income tax expense of $3.7 million in the third quarter of 2025. This compares to an income tax expense of $3.5 million in the third quarter of 2024. The change in income tax expense principally reflects changes in pre-tax earnings in 2025 relative to 2024.
Asset Quality
A breakdown of non-performing loans by loan type is as follows (1):
9/30/2025
12/31/2024
9/30/2024
Loan Type
(Dollars in thousands)
Commercial
$
13,825
$
54
$
59
Mortgage
7,873
7,005
6,525
Installment
900
733
666
Sub total
22,598
7,792
7,250
Less - government guaranteed loans
2,243
1,790
2,102
Total non-performing loans
$
20,355
$
6,002
$
5,148
Ratio of non-performing loans to total portfolio loans
0.48
%
0.15
%
0.13
%
Ratio of non-performing assets to total assets
0.38
%
0.13
%
0.11
%
Ratio of allowance for credit losses to total non-performing loans
306.85
%
989.32
%
1115.85
%
(1) Non performing loans include non-accrual loans and loans 90 days or more past due and still accruing interest.
The provision for credit losses was an expense of $1.99 million and $1.49 million in the third quarters of 2025 and 2024, respectively. We recorded loan net charge offs of $0.73 million and $0.31 million in the third quarters of 2025 and 2024, respectively. At September 30, 2025, the allowance for credit losses for loans totaled $62.5 million, or 1.49% of total portfolio loans compared to $59.4 million, or 1.47% of total portfolio loans at December 31, 2024.
Balance Sheet, Capital and Liquidity
Total assets were $5.49 billion at September 30, 2025, an increase of $155.0 million from December 31, 2024. Loans, excluding loans held for sale, were $4.20 billion at September 30, 2025, compared to $4.04 billion at December 31, 2024. Deposits totaled $4.86 billion at September 30, 2025, an increase of $205.1 million from December 31, 2024. This increase is primarily due to increases in savings and interest-bearing checking, reciprocal, time and brokered time deposits that were partially offset by decreases in non-interest bearing deposits.
Cash and cash equivalents totaled $208.7 million at September 30, 2025, versus $119.9 million at December 31, 2024. Securities available for sale ("AFS") totaled $502.6 million at September 30, 2025, versus $559.2 million at December 31, 2024.
On August 31, 2025 we redeemed our $40 million floating subordinated notes. This redemption did not affect our status as well-capitalized for regulatory purposes or have a material impact on our liquidity resources.
Total shareholders' equity was $490.7 million at September 30, 2025, or 8.93% of total assets compared to $454.7 million or 8.52% at December 31, 2024. Tangible common equity totaled $461.3 million at September 30, 2025, or $22.29 per share compared to $424.9 million or $20.33 per share at December 31, 2024. The increases in shareholders' equity as well as tangible common equity are primarily the result of earnings retention and a reduction in the accumulated other comprehensive loss.
The Company's wholly owned subsidiary, Independent Bank, remains significantly above "well capitalized" for regulatory purposes with the following ratios:
Regulatory Capital Ratios
9/30/2025
12/31/2024
WellCapitalizedMinimum
Tier 1 capital to average total assets
9.19
%
9.58
%
5.00
%
Common equity tier 1 capital to risk-weighted assets
11.33
%
11.74
%
6.50
%
Tier 1 capital to risk-weighted assets
11.33
%
11.74
%
8.00
%
Total capital to risk-weighted assets
12.58
%
12.99
%
10.00
%
At September 30, 2025, in addition to liquidity available from our normal operating, funding, and investing activities, we had unused credit lines with the FHLB and FRB of approximately $1.15 billion and $468.8 million, respectively. We also had approximately $465.9 million in fair value of unpledged securities AFS and HTM at September 30, 2025 which could be pledged for an estimated additional borrowing capacity at the FHLB and FRB of approximately $437.3 million.
Share Repurchase Plan
On December 17, 2024, the Board of Directors of the Company authorized the 2025 share repurchase plan. Under the terms of the 2025 share repurchase plan, the Company is authorized to purchase up to 1,100,000 shares, or approximately 5% of its then outstanding common stock. The repurchase plan is authorized to last through December 31, 2025. During the nine month period ended September 30, 2025, there were 266,008 shares of common stock repurchased, for an aggregate purchase price of $7.77 million.
Earnings Conference Call
Brad Kessel, President and CEO, Gavin Mohr, CFO and Joel Rahn, EVP, Commercial Banking will review the quarterly results in a conference call for investors and analysts beginning at 11:00 am ET on Tuesday, October 28, 2025.
To participate in the live conference call, please dial 1-833-470-1428 (Access Code # 362565). Also, the conference call will be accessible through an audio webcast with user-controlled slides via the following site/URL: https://events.q4inc.com/attendee/579402272.
A playback of the call can be accessed by dialing 1-866-813-9403 (Access Code # 783472). The replay will be available through November 4, 2025.
About Independent Bank Corporation
Independent Bank Corporation (NASDAQ:IBCP) is a Michigan-based bank holding company with total assets of approximately $5.5 billion. Founded as First National Bank of Ionia in 1864, Independent Bank Corporation operates a branch network across Michigan's Lower Peninsula through one state-chartered bank subsidiary. This subsidiary (Independent Bank) provides a full range of financial services, including commercial banking, mortgage lending, consumer banking, investments and insurance. Independent Bank Corporation is committed to providing exceptional personal service and value to its customers, stockholders and the communities it serves.
For more information, please visit our Web site at: IndependentBank.com.
Forward-Looking StatementsThis 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 plans and prospects.
Forward-looking statements involve inherent risks and uncertainties, and important factors could cause actual results to differ materially from those anticipated. For example, deterioration in general business and economic conditions or turbulence in domestic or global financial markets could adversely affect our revenues and the values of our assets and liabilities, reduce the availability of funding to us, lead to a tightening of credit, and increase stock price volatility. Our results could also be adversely affected by changes in interest rates; increases in unemployment rates; deterioration in the credit quality of our loan portfolios or in the value of the collateral securing those loans; deterioration in the value of our investment securities; legal and regulatory developments; changes in customer behavior and preferences; breaches in data security; and management's ability to effectively manage the multitude of risks facing our business. Key risk factors that could affect our future results are described in more detail in our Annual Report on Form 10-K for the year ended December 31, 2024 and the other reports we file with the SEC, including under the heading "Risk Factors." Investors should not place undue reliance on forward-looking statements as a prediction of our future results.
Any forward-looking statement speaks only as of the date on which it is made, and we undertake no obligation to update any forward-looking statement, whether as a result of new information, future events, or otherwise.
INDEPENDENT BANK CORPORATION AND SUBSIDIARIES
Consolidated Statements of Financial Condition
September 30, 2025
December 31, 2024
(Unaudited)
(In thousands, except shareamounts)
Assets
Cash and due from banks
$
56,378
$
56,984
Interest bearing deposits
152,308
62,898
Cash and Cash Equivalents
208,686
119,882
Securities available for sale
502,583
559,182
Securities held to maturity (fair value of $293,242 at September 30, 2025 and $301,860 at December 31, 2024)
321,450
339,436
Federal Home Loan Bank and Federal Reserve Bank stock, at cost
18,102
16,099
Loans held for sale, carried at fair value
11,654
7,643
Loans
Commercial
2,125,053
1,937,364
Mortgage
1,517,656
1,516,726
Installment
555,574
584,735
Total Loans
4,198,283
4,038,825
Allowance for credit losses
(62,459
)
(59,379
)
Net Loans
4,135,824
3,979,446
Other real estate and repossessed assets, net
589
938
Property and equipment, net
38,805
37,492
Bank-owned life insurance
53,875
53,855
Capitalized mortgage loan servicing rights, carried at fair value
31,522
46,796
Other intangibles, net
1,123
1,488
Goodwill
28,300
28,300
Accrued income and other assets
140,600
147,547
Total Assets
$
5,493,113
$
5,338,104
Liabilities and Shareholders' Equity
Deposits
Non-interest bearing
$
1,003,521
$
1,013,647
Savings and interest-bearing checking
2,040,462
1,995,314
Reciprocal
981,115
907,031
Time
660,815
628,285
Brokered time
173,242
109,811
Total Deposits
4,859,155
4,654,088
Other borrowings
2,006
45,009
Subordinated debt
—
39,586
Subordinated debentures
39,847
39,796
Accrued expenses and other liabilities
101,363
104,939
Total Liabilities
5,002,371
4,883,418
Shareholders' Equity
Preferred stock, no par value, 200,000 shares authorized; none issued or outstanding
—
—
Common stock, no par value, 500,000,000 shares authorized; issued and outstanding: 20,691,604 shares at September 30, 2025 and 20,895,714 shares at December 31, 2024
311,770
318,777
Retained earnings
239,602
205,853
Accumulated other comprehensive loss
(60,630
)
(69,944
)
Total Shareholders' Equity
490,742
454,686
Total Liabilities and Shareholders' Equity
$
5,493,113
$
5,338,104
INDEPENDENT BANK CORPORATION AND SUBSIDIARIES
Consolidated Statements of Operations
Three Months Ended
Nine Months Ended
September 30,
September 30,
September 30,
2025
June 30, 2025
2024
2025
2024
(Unaudited)
(In thousands, except per share amounts)
Interest Income
Interest and fees on loans
$
61,325
$
59,535
$
58,410
$
178,628
$
170,239
Interest on securities
Taxable
3,660
3,796
4,502
11,492
14,466
Tax-exempt
2,767
2,773
3,404
8,310
10,195
Other investments
1,538
774
2,018
3,882
4,898
Total Interest Income
69,290
66,878
68,334
202,312
199,798
Interest Expense
Deposits
21,972
20,462
24,462
63,389
70,148
Other borrowings and subordinated debt and debentures
1,957
