Independent Bank Corporation Reports Fourth Quarter Earnings Of $0.89 Per Diluted Share; Board Authorizes 5% Stock Repurchase Plan
GRAND RAPIDS, Mich., Jan. 22, 2026 (GLOBE NEWSWIRE) -- Independent Bank Corporation (NASDAQ:IBCP) reported fourth quarter 2025 net income of $18.6 million, or $0.89 per diluted share, versus net income of $18.5 million, or $0.87 per diluted share, in the prior-year period. For the year ended December 31, 2025, the Company reported net income of $68.5 million, or $3.27 per diluted share, compared to net income of $66.8 million, or $3.16 per diluted share, in 2024.
Highlights for the fourth quarter of 2025 include:
An increase in net interest income of $1.0 million (2.2%) over the third quarter of 2025;
A net interest margin of 3.62% (eight basis point increase from the linked quarter);
A return on average assets and a return on average equity of 1.35% and 14.75%, respectively;
Net growth in loans of $78.0 million (or 7.4% annualized) from September 30, 2025;
Net growth in total deposits, less brokered deposits of $57.1 million (or 4.8% annualized) from September 30, 2025;
An increase in the tangible common equity ratio to 8.65%; and
The payment of a 26 cent per share dividend on common stock on November 14, 2025.
"Our fourth-quarter performance marked the culmination of another remarkable year, with our organization excelling on all fundamentals," said William B. ("Brad") Kessel, the President and Chief Executive Officer. "Over the past year, we increased tangible book value by 13.3% and delivered near record earnings. Meanwhile, our dividend payout ratio was 32% for the year as we continue to recognize the value of returns to our shareholders. During the fourth quarter, we realized continued net interest margin expansion, strong loan growth and increased non-interest income despite the third quarter reflecting elevated revenue from an annual incentive payment related to our debit card program. In addition, our credit quality metrics remain positive, with watch credits and non-performing assets below historic averages. In anticipation of continued strong earnings, we repurchased shares and executed a tax credit transfer agreement during the fourth quarter which is expected to reduce tax obligations and enhance earnings per share. Looking ahead to 2026, our confidence is bolstered by a robust commercial loan pipeline and our on going strategic initiative to attract and integrate talented bankers into our organization."
Significant items impacting comparable 2025 and 2024 results include the following:
Net interest margin improved to 3.56% for the year ended December 31, 2025 from 3.38% the previous year.
Income tax expense included a $1.8 million benefit ($0.09 per share) resulting from the execution of a tax credit transfer agreement (TCTA) related to the purchase of $22.9 million of energy tax credits during the three-month and full year ended December 31, 2025, compared to no such benefit in the prior year.
Changes in the fair value due to price of capitalized mortgage loan servicing rights (the "MSR Changes") of $0.2 million ($0.01 per diluted share, after taxes) and $(2.2) million ($(0.08) per diluted share, after taxes) for the three-month and full-year ended December 31, 2025, respectively, as compared to $6.5 million ($0.24 per diluted share, after taxes) and $4.5 million ($0.17 per diluted share, after taxes) for the three-months and full-year ended December 31, 2024, respectively.
The provision for credit losses was $6.1 million ($0.23 per diluted share, after tax) for the full year ended December 31, 2025, compared to $4.5 million ($0.17 per diluted share, after tax) for the full year ended December 31, 2024.
Operating Results
The Company's net interest income totaled $46.4 million during the fourth quarter of 2025, an increase of $3.5 million, or 8.2% from the year-ago period, and up $1.0 million, or 2.2%, from the third quarter of 2025. The Company's tax equivalent net interest income as a percent of average interest-earning assets (the "net interest margin") was 3.62% during the fourth quarter of 2025, compared to 3.45% in the year-ago period, and 3.54% in the third quarter of 2025. The year-over-year quarterly increase in net interest income was due to an increase in the net interest margin and an increase in average earnings assets. Average interest-earning assets were $5.16 billion in the fourth quarter of 2025, compared to $5.01 billion in the year ago quarter and $5.16 billion in the third quarter of 2025.
For the year ended December 31, 2025, net interest income totaled $180.0 million, an increase of $13.8 million, or 8.3% from the prior year ended December 31, 2024. The Company's net interest margin for the year ended December 31, 2025 was 3.56% compared to 3.38% in 2024. The increase in net interest income for the year ended December 31, 2025 compared to 2024 reflects an increase in average interest- earning assets as well as an increase in the net interest margin.
Non-interest income totaled $12.0 million and $45.6 million, respectively, for the fourth quarter and full year of 2025, compared to $19.1 million and $56.4 million in the respective, comparable year ago periods. These changes were primarily due to variances in mortgage banking related revenues. The full year period of 2025 also included a decrease in gains on equity securities at fair value.
Net gains on mortgage loans in the fourth quarters of 2025 and 2024, were approximately $1.4 million and $1.7 million, respectively. The decrease in net gains on mortgage loans was due primarily to a decrease in the volume of mortgage loans sold. For the full year of 2025, net gains on mortgage loans totaled $6.8 million compared to $6.6 million in 2024. The increase in net gains on mortgage loans was due to a higher loan sale margin on mortgage loan sales that was partially offset by a decrease in the volume of mortgage loans sold.
Mortgage loan servicing, net, generated gains of $0.9 million and $7.8 million in the fourth quarters of 2025 and 2024, respectively. For the full year of 2025 and 2024, mortgage loan servicing, net, generated income of $0.8 million and $9.4 million, 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 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 December 31, 2025 and 2024, respectively.Mortgage loan servicing, net activity is summarized in the following table:
Three months ended
Twelve months ended
12/31/2025
12/31/2024
12/31/2025
12/31/2024
(In thousands)
Mortgage loan servicing, net:
Revenue, net
$
1,656
$
2,233
$
6,801
$
8,914
Fair value change due to price
160
6,519
(2,168
)
4,540
Fair value change due to pay-downs
(917
)
(991
)
(3,573
)
(4,007
)
Loss on sale of originated servicing rights
—
—
(233
)
—
Total
$
899
$
7,761
$
827
$
9,447
Non-interest expenses totaled $36.1 million in the fourth quarter of 2025, compared to $37.0 million in the year-ago period. For the full year of 2025, non-interest expenses totaled $138.2 million versus $135.1 million in 2024. The decrease during the quarterly period is primarily due to lower incentive based compensation attributed to lower expected payout levels, lower data processing expenses and lower advertising expense.
The Company recorded an income tax expense of $1.7 million and $12.8 million in the fourth quarter and full year of 2025, respectively. This compares to an income tax expense of $4.3 million and $16.3 million in the fourth quarter and full year of 2024, respectively. As discussed previously, the 2025 fourth quarter and full year income tax expense includes a $1.8 million benefit resulting from the execution of the TCTA, compared to no such benefit in the prior year.
Asset Quality
A breakdown of non-performing loans by loan type is as follows:
12/31/2025
12/31/2024
12/31/2023
Loan Type
(Dollars in thousands)
Commercial
$
23,531
$
54
$
28
Mortgage
8,683
7,005
6,425
Installment
860
733
970
Sub total
33,074
7,792
7,423
Less - government guaranteed loans
9,947
1,790
2,191
Total non-performing loans
$
23,127
$
6,002
$
5,232
Ratio of non-performing loans to total portfolio loans
0.54
%
0.15
%
0.14
%
Ratio of non-performing assets to total assets
0.44
%
0.13
%
0.11
%
Ratio of allowance for credit losses to total non-performing loans
274.33
%
989.32
%
1044.69
%
The provision for credit losses was $1.9 million and $2.2 million in the fourth quarters of 2025 and 2024, respectively. The provision for credit losses was $6.1 million and $4.5 million in the full year of 2025 and 2024, respectively. The provision for credit losses in 2025 was primarily impacted by the growth in commercial loans, a decrease in prepayment speeds on retail loans and increases in unfunded lending commitments. The Company recorded loan net charge-offs of $0.4 million and $0.3 million in the fourth quarters of 2025 and 2024, respectively. At December 31, 2025, the allowance for credit losses totaled $63.4 million, or 1.48% of total portfolio loans compared to $59.4 million, or 1.47% of total portfolio loans at December 31, 2024.
The increase in non-performing commercial loans year-over-year is primarily due to one commercial relationship where the borrower is experiencing financial difficulties.
Balance Sheet, Liquidity and Capital
Total assets were $5.51 billion at December 31, 2025, an increase of $167.6 million from December 31, 2024. Loans, excluding loans held for sale, were $4.28 billion at December 31, 2025, compared to $4.04 billion at December 31, 2024. This increase is primarily due to growth in commercial loans. Deposits totaled $4.76 billion at December 31, 2025, an increase of $107.6 million from December 31, 2024. This increase is primarily due to growth in savings and interest-bearing checking, reciprocal, and time deposit account balances that were partially offset by decreases in non-interest bearing and brokered time deposits.
Cash and cash equivalents totaled $138.4 million at December 31, 2025, versus $119.9 million at December 31, 2024. Securities available for sale ("AFS") totaled $495.9 million at December 31, 2025, versus $559.2 million at December 31, 2024.
Total shareholders' equity was $503.0 million at December 31, 2025, or 9.14% of total assets compared to $454.7 million or 8.52% at December 31, 2024. Tangible common equity totaled $473.7 million at December 31, 2025, or $23.05 per share compared to $424.9 million or $20.33 per share at December 31, 2024. The increase in shareholder 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
12/31/2025
12/31/2024
WellCapitalizedMinimum
Tier 1 capital to average total assets
9.36
%
9.58
%
5.00
%
Tier 1 common equity to risk-weighted assets
11.24
%
11.74
%
6.50
%
Tier 1 capital to risk-weighted assets
11.24
%
11.74
%
8.00
%
Total capital to risk-weighted assets
12.49
%
12.99
%
10.00
%
At December 31, 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 $774.2 million and $1.24 billion, respectively. We also had approximately $456.3 million in fair value of unpledged securities AFS and HTM at December 31, 2025 which could be pledged for an estimated additional borrowing capacity at the FHLB and FRB of approximately $428.3 million.
Share Repurchase Plan
On December 16, 2025, the Board of Directors of the Company authorized the 2026 share repurchase plan. Under the terms of the 2026 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, 2026. For the full year of 2025, the Company repurchased 407,113 shares of its common stock at an aggregate cost of $12.4 million.
Earnings Conference Call
Brad Kessel, President and CEO, Gavin A. 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 Thursday, January 22, 2026.
To access via phone, participants will need to register using the following link where they will be provided a phone number and access code: https://register-conf.media-server.com/register/BIda5dc0f6055c4175bbaa1e1fddbc12fa
In order to view the webcast and presentation slides, please go to https://edge.media-server.com/mmc/p/f4iidb88 during the time of the call. A replay of the webcast will be available until January 22, 2027.
About Independent Bank Corporation
Independent Bank Corporation (NASDAQ:IBCP) is a Michigan-based bank holding company with total assets of $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, 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 Statements
This 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; the outcome of litigation proceedings to which we are or may become subject; 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 SUBSIDIARIESConsolidated Statements of Financial Condition
December 31,
2025
2024
(unaudited)
(In thousands, except shareamounts)
Assets
Cash and due from banks
$
52,235
$
56,984
Interest bearing deposits
86,152
62,898
Cash and Cash Equivalents
138,387
119,882
Securities available for sale
495,909
559,182
Securities held to maturity (fair value of $282,830 at December 31, 2025 and $301,860 at December 31, 2024)
309,523
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
9,031
7,643
Loans
Commercial
2,213,557
1,937,364
Mortgage
1,524,821
1,516,726
Installment
537,907
584,735
Total Loans
4,276,285
4,038,825
Allowance for credit losses
(63,445
)
(59,379
)
Net Loans
4,212,840
3,979,446
Other real estate and repossessed assets, net
896
938
Property and equipment, net
38,972
37,492
Bank-owned life insurance
53,750
53,855
Capitalized mortgage loan servicing rights, carried at fair value
31,493
46,796
Other intangibles, net
1,001
1,488
Goodwill
28,300
28,300
Accrued income and other assets
167,516
147,547
Total Assets
$
5,505,720
$
5,338,104
Liabilities and Shareholders' Equity
Deposits
Non-interest bearing
$
991,984
$
1,013,647
Savings and interest-bearing checking
2,113,260
1,995,314
Reciprocal
974,921
907,031
Time
662,858
628,285
Brokered time
18,659
109,811
Total Deposits
4,761,682
4,654,088
Other borrowings
77,003
45,009
Subordinated debt
—
39,586
Subordinated debentures
39,864
39,796
Accrued expenses and other liabilities
124,220
104,939
Total Liabilities
5,002,769
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: 20,548,893 shares at December 31, 2025 and 20,895,714 shares at December 31, 2024
307,845
318,777
Retained earnings
252,794
205,853
Accumulated other comprehensive loss
(57,688
)
(69,944
)
Total Shareholders' Equity
502,951
454,686
Total Liabilities and Shareholders' Equity
$
5,505,720
$
5,338,104
INDEPENDENT BANK CORPORATION AND SUBSIDIARIESConsolidated Statements of Operations
Three Months Ended
Twelve Months Ended
December 31,2025
September 30, 2025
December 31,2024
December 31,
2025
2024
(unaudited)
INTEREST INCOME
(In thousands, except per share amounts)
Interest and fees on loans
$
60,205
$
61,325
$
58,346
$
238,833
$
228,585
Interest on securities
Taxable
3,513
3,660
4,417
15,005
18,883
Tax-exempt
2,633
2,767
2,905
10,943
13,100
Other investments
1,074
1,538
1,310
4,956
6,208
Total Interest Income
67,425
69,290
66,978
269,737
266,776
INTEREST EXPENSE
Deposits
20,109
21,972
22,546
83,498
92,694
