Independent Bank Corporation Form 8-K - Supplemental Data

SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549

FORM 8-K

CURRENT REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934 Date of Report (Date of earliest event reported): April 22, 2004

INDEPENDENT BANK CORPORATION
(Exact name of registrant as specified in its charter)

Michigan
(State or Jurisdiction of Incorporation or Organization)

0-7818 38-2032782
(Commission File Number) (I.R.S. Employer Identification No.)

230 West Main Street, Ionia, Michigan 48846
(Address of principal executive offices)

(616) 527-9450
(Registrant’s telephone number, including area code)

NONE
Former name, address and fiscal year, if changed since last report.


Item 7.         Financial Statements and Exhibits.

Exhibit

99      Supplemental data to the Registrant’s press release dated April 22, 2004.

Item 12.       Results of Operations and Financial Condition.
  The information attached at Exhibit 99 is supplemental data to the Registrant’s press release dated April 22, 2004 regarding its earnings during the quarter ended March 31, 2004.

  The information in this Form 8-K and the attached Exhibit shall not be deemed filed for purposes of Section 18 of the Securities Act of 1934, nor shall it be deemed incorporated by reference in any filing under the Securities Act of 1933, except as shall be expressly set forth by specific reference in such filing.



SIGNATURES

        Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

Date    April 22, 2004
            ——————————————




Date    April 22, 2004
            ——————————————		 By: /s/ Robert N. Shuster
       ——————————————
       Robert N. Shuster, Principal Financial
       Officer


By: /s/ James J. Twarozynski
       ——————————————
       James J. Twarozynski, Principal
       Accounting Officer



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INDEPENDENT BANK CORPORATION AND SUBSIDIARIES
Consolidated Statements of Financial Condition		 Exhibit 99

March 31,
2004		 December 31,
2003
(unaudited)
Assets (in thousands)
Cash and due from banks     $ 57,268   $ 61,741  
Securities available for sale    454,148    453,996  
Federal Home Loan Bank stock, at cost    13,965    13,895  
Loans held for sale    53,784    32,642  
Loans  
  Commercial    609,626    603,558  
  Real estate mortgage    686,707    681,602  
  Installment    231,911    234,562  
  Finance receivables    175,768    147,671  
Total Loans    1,704,012    1,667,393  
  Allowance for loan losses    (17,726 )  (17,728 )
Net Loans    1,686,286    1,649,665  
Property and equipment, net    46,049    43,979  
Bank owned life insurance    37,222    36,850  
Goodwill    16,689    16,696  
Other intangibles    7,071    7,523  
Accrued income and other assets    41,783    43,135  
Total Assets   $ 2,414,265   $ 2,360,122  
Liabilities and Shareholders' Equity  
Deposits  
  Non-interest bearing   $ 201,315   $ 192,733  
  Savings and NOW    731,380    700,541  
  Time    779,518    809,532  
Total Deposits    1,712,213    1,702,806  
Federal funds purchased    45,205    53,885  
Other borrowings    358,053    331,819  
Subordinated debentures    52,165    52,165  
Financed premiums payable    36,813    26,340  
Accrued expenses and other liabilities    37,280    30,891  
Total Liabilities    2,241,729    2,197,906  
Shareholders' Equity  
  Preferred stock, no par value--200,000 shares authorized; none  
    outstanding  
  Common stock, $1.00 par value--30,000,000 shares authorized;  
    issued and outstanding: 19,691,374 shares at March 31, 2004  
    and 19,568,867 shares at December 31, 2003    19,691    19,569  
  Capital surplus    120,841    119,353  
  Retained earnings    22,245    16,953  
  Accumulated other comprehensive income    9,759    6,341  
Total Shareholders' Equity    172,536    162,216  
Total Liabilities and Shareholders' Equity   $ 2,414,265   $ 2,360,122  

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INDEPENDENT BANK CORPORATION AND SUBSIDIARIES
Consolidated Statements of Operations

Three Months Ended
March 31,
2004 2003
(unaudited)
(in thousands,
except per share amounts)
Interest Income            
  Interest and fees on loans   $ 30,126   $ 26,661  
  Securities available for sale  
    Taxable    3,094    2,899  
    Tax-exempt    2,229    1,918  
  Other investments    166    142  
Total Interest Income    35,615    31,620  
Interest Expense  
  Deposits    6,202    7,171  
  Other borrowings    4,038    3,642  
Total Interest Expense    10,240    10,813  
Net Interest Income    25,375    20,807  
Provision for loan losses    801    1,000  
Net Interest Income After Provision for Loan Losses    24,574    19,807  
Non-interest Income  
  Service charges on deposit accounts    3,641    3,271  
  Net gains on asset sales  
    Real estate mortgage loans    1,059    4,032  
    Securities    493    512  
  Title insurance fees    544    743  
  Manufactured home loan origination fees    289    358  
  Real estate mortgage loan servicing    (684 )  (350 )
  Other income    2,095    1,849  
Total Non-interest Income    7,437    10,415  
Non-interest Expense  
  Compensation and employee benefits    11,099    9,641  
  Occupancy, net    1,823    1,598  
  Furniture and fixtures    1,390    1,320  
  Other expenses    6,346    5,496  
Total Non-interest Expense    20,658    18,055  
Income Before Income Tax    11,353    12,167  
Income tax expense    2,910    3,350  
Net Income   $ 8,443   $ 8,817  
Net Income Per Share            
  Basic   $ .43   $ .45  
  Diluted    .42    .44  
Dividends Per Common Share  
  Declared   $ .16   $ .13  

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Non-performing assets

March 31,
2004		 December 31,
2003
(dollars in thousands)
  Non-accrual loans     $ 8,393   $ 9,122  
  Loans 90 days or more past due and  
    still accruing interest    2,009    3,284  
  Restructured loans    308    335  
Total non-performing loans    10,710    12,741  
  Other real estate    3,652    3,256  
Total non-performing assets   $ 14,362   $ 15,997  
   As a percent of Portfolio Loans  
     Non-performing loans    0.63  %  0.76  %
     Allowance for loan losses    1.04    1.06  
   Non-performing assets to total assets    0.59    .68  
   Allowance for loan losses as a percent of  
     non-performing loans    166    139  

Allowance for loan losses

Three months ended
March 31,
2004 2003
(in thousands)
Balance at beginning of period     $ 17,728   $ 16,705  
Additions (deduction)  
  Provision charged to operating expense    801    1,000  
  Recoveries credited to allowance    258    340  
  Loans charged against the allowance    (1,061 )  (917 )
Balance at end of period   $ 17,726   $ 17,128  
Net loans charged against the allowance to  
       average Portfolio Loans (annualized)    0.19  %  0.17  %

March 31,
2004		 December 31,
2003
Amount Average
Maturity		 Rate Amount Average
Maturity		 Rate
(dollars in thousands)
Brokered CDs(1)     $ 378,958    2.4 years    2.50 % $ 416,566    2.3 years    2.43 %
Fixed rate FHLB advances(1)    85,232    4.9 years    4.03    84,638    5.0 years    3.99  
Variable rate FHLB advances(1)    121,700    0.5 years    1.28    104,150    0.4 years    1.30  
Securities sold under agreements to  
   Repurchase(1)    150,539    0.2 years    1.18    140,969    0.3 years    1.22  
Federal funds purchased    45,205    1 day    1.19    53,885    1 day    1.16  
      Total   $ 781,634    1.8 years    2.15 % $ 800,208    1.8 years    2.15 %

(1) Certain of these items have had their average maturity and rate altered through the use of derivative instruments, including pay-fixed and pay-variable interest rate swaps.

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Capitalization

March 31,
2004		 December 31,
2003
(in thousands)
Subordinated debentures     $ 52,165   $ 52,165  
  Amount not qualifying as regulatory capital    (1,565 )  (1,565 )
  Amount qualifying as regulatory capital    50,600    50,600  
Shareholders' Equity  
  Preferred stock, no par value  
  Common Stock, par value $1.00 per share    19,691    19,569  
  Capital surplus    120,841    119,353  
  Retained earnings    22,245    16,953  
  Accumulated other comprehensive income    9,759    6,341  
          Total shareholders' equity    172,536    162,216  
          Total capitalization   $ 223,136   $ 212,816  

Non-Interest Income

Three months ended
March 31,
2004 2003
(in thousands)
Service charges on deposit            
  accounts   $ 3,641   $ 3,271  
Net gains (losses) on assets sales  
  Real estate mortgage loans    1,059    4,032  
  Securities    493    512  
Title insurance fees    544    743  
Bank owned life insurance    345    378  
Manufactured home loan origination fees  
  and commissions    289    358  
Mutual fund and annuity commissions    347    256  
Real estate mortgage loan servicing    (684 )  (350 )
Other    1,403    1,215  
      Total non-interest income   $ 7,437   $ 10,415  

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Three months ended
March 31,
2004 2003
(in thousands)
Real estate mortgage loans originated     $ 159,419   $ 262,128  
Real estate mortgage loans sold    68,734    229,744  
Real estate mortgage loans sold with servicing rights released    7,681    16,757  
Net gains on the sale of real estate mortgage loans    1,059    4,032  
Net gains as a percent of real estate mortgage loans sold  
  ("Loans Sale Margin")    1.54 %  1.75 %
SFAS #133 adjustments included in the Loan Sale Margin    0.06 %  0.22 %

Capitalized Real Estate Mortgage Loan Servicing Rights

Three months ended
March 31,
2004 2003
(in thousands)
Balance at beginning of period     $ 8,873   $ 4,455  
  Originated servicing rights capitalized    690    1,927  
  Amortization    (436 )  (876 )
  (Increase)/decrease in impairment reserve    (1,045 )  (165 )
Balance at end of period   $ 8,082   $ 5,341  
Impairment reserve at end of period   $ 1,767   $ 1,260  

Non-Interest Expense

Three months ended
March 31,
2004 2003
(in thousands)
Salaries     $ 7,595   $ 6,291  
Performance-based compensation and benefits    1,316    1,304  
Other benefits    2,188    2,046  
  Compensation and employee benefits    11,099    9,641  
Occupancy, net    1,823    1,598  
Furniture and fixtures    1,390    1,320  
Data processing    1,053    923  
Communications    806    684  
Loan and collection    747    942  
Advertising    670    769  
Supplies    444    464  
Amortization of intangible assets    452    276  
Legal and professional    289    92  
Other    1,885    1,346  
      Total non-interest expense   $ 20,658   $ 18,055  

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Average Balances and Tax Equivalent Rates

Three Months Ended
March 31,
2004
 2003
Average
Balance
 Interest
 Rate
 Average
Balance
 Interest
 Rate
Assets (dollars in thousands)
Taxable loans (1)     $ 1,718,396   $ 30,043    7.02 % $ 1,467,558   $ 26,504    7.28 %
Tax-exempt loans (1,2)    6,867    128    7.50    11,988    242    8.19  
Taxable securities    253,165    3,094    4.92    210,108    2,899    5.60  
Tax-exempt securities (2)    198,908    3,527    7.13    165,236    3,037    7.45  
Other investments    13,940    166    4.79    10,111    142    5.70  
Interest Earning Assets    2,191,276    36,958    6.77    1,865,001    32,824    7.10  
Cash and due from banks    45,700            41,139  
Other assets, net    127,016            104,742  
Total Assets   $ 2,363,992           $ 2,010,882  
   
Liabilities  
Savings and NOW   $ 720,065    972    0.54   $ 679,372    1,420    0.85  
Time deposits    792,186    5,230    2.66    662,630    5,751    3.52  
Other borrowings    438,137    4,038    3.71    336,681    3,642    4.39  
Interest Bearing Liabilities    1,950,388    10,240    2.11    1,678,683    10,813    2.61  
Demand deposits    183,908            160,241  
Other liabilities    62,736            29,994  
Shareholders' equity    166,960            141,964  
Total liabilities and shareholders' equity   $ 2,363,992           $ 2,010,882  
Tax Equivalent Net Interest Income       $ 26,718    .       $ 22,011  
Tax Equivalent Net Interest Income  
as a Percent of Earning Assets            4.89 %          4.75 %

(1) All domestic
(2) Interest on tax-exempt loans and securities is presented on a fully tax equivalent basis assuming a marginal tax rate of 35%

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