Highlights for the first quarter of 2026 include:
A net interest margin of 3.65% (three basis point increase from the linked quarter);
Increase in net interest income of $0.5 million (or 1.1% ) over the fourth quarter of 2025;
Increase in tangible common equity per share of common stock of $0.33 (or 5.9% annualized) from December 31, 2025;
A return on average assets and a return on average equity of 1.24% and 13.43%, respectively;
Net growth in total deposits, less brokered time deposits, of $80.4 million (or 6.9% annualized) from December 31, 2025;
Net growth in loans of $31.8 million (or 3.0% annualized) from December 31, 2025;
An increase in the tangible common equity ratio to 8.7%; and
The payment of a $0.28 per share quarterly dividend on common stock on February 13, 2026.
William B. ("Brad") Kessel, the President and Chief Executive Officer of Independent Bank Corporation, commented: "Our first quarter results reflect the strength of our core fundamentals, including growth in net interest income, expansion in our net interest margin to 3.65%, and continued growth in both loans and core deposits. Balance sheet growth remained disciplined, with $80.4 million in core deposit growth and $31.8 million in total loan growth, including $53.8 million, or 9.9% annualized, in commercial loans, reflecting continued execution of our strategic plan. Credit quality remains sound, and while geopolitical uncertainty has increased, we have not seen a direct impact on our customers and continue to monitor conditions closely. Profitability remained strong, with a return on average assets of 1.24% and a return on average equity of 13.43%. We remain encouraged by our momentum, optimistic about our opportunities, and confident in the benefits our recently announced merger with HCB Financial Corp. will provide to enhancing shareholder value."
Significant items impacting comparable first quarter 2026 and 2025 results include the following:
Changes in the fair value due to price of capitalized mortgage loan servicing rights (the "MSR Changes") of $0.9 million ($0.04 per diluted share, after taxes) for the three-month period ended March 31, 2026, as compared to $(1.5) million ($(0.06) per diluted share, after taxes) for the three-month period ended March 31, 2025.
Operating Results
The Company's net interest income totaled $46.9 million during the first quarter of 2026, an increase of $3.2 million, or 7.3% from the year-ago period, and an increase of $0.5 million, or 1.1%, from the fourth quarter of 2025 which had two additional days of earnings. The Company's tax equivalent net interest income as a percent of average interest-earning assets (the "net interest margin") was 3.65% during the first quarter of 2026, compared to 3.49% in the year-ago period, and 3.62% in the fourth quarter of 2025. The increase in the net interest margin from the prior quarter was supported by a 16 basis point decrease in the cost of deposits. The year-over-year quarter and linked quarter increases in net interest income were due to both an increase in average interest-earning assets and the higher net interest margin. Average interest-earning assets were $5.21 billion in the first quarter of 2026, compared to $5.08 billion in the year-ago quarter and $5.16 billion in the fourth quarter of 2025.
Non-interest income totaled $12.0 million for the first quarter of 2026, compared to $10.4 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 first quarters of 2026 and 2025 were approximately $1.3 million and $2.3 million, respectively. The comparative quarterly decrease in net gains on mortgage loans was due to a decrease in the gain on sale margin that was partially offset by an increase in the volume of mortgage loans sold.
Mortgage loan servicing, net, generated income (expense) of $1.6 million and $(0.6) million in the first quarters of 2026 and 2025, 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 partially offset by 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 $32.2 million and $31.5 million at March 31, 2026 and December 31, 2025, respectively.
Mortgage loan servicing, net activity is summarized in the following table:
Three months ended
3/31/2026
3/31/2025
(In thousands)
Mortgage loan servicing, net:
Revenue, net
$
1,636
$
1,882
Fair value change due to price
933
(1,533
)
Fair value change due to pay-downs
(923
)
(891
)
Loss on sale of originated servicing rights
$
—
$
(94
)
Total
$
1,646
$
(636
)
Non-interest expenses totaled $38.3 million in the first quarter of 2026, compared to $34.3 million in the year-ago period. The increase in non-interest expense is primarily due to increases in compensation and employee benefits, advertising and merger related expenses as well as a $1.5 million litigation expense recorded during the quarter.
The Company recorded income tax expense of $3.4 million in the first quarter of 2026. This compares to an income tax expense of $3.5 million in the first quarter of 2025. The 2026 first quarter income tax expense includes a $0.2 million benefit from transferable energy tax credits.
Asset Quality
A breakdown of non-performing loans by loan type is as follows (1):
3/31/2026
12/31/2025
3/31/2025
Loan Type
(Dollars in thousands)
Commercial
$
27,077
$
23,531
$
127
Mortgage
9,953
8,683
8,080
Installment
745
860
819
Sub total
37,775
33,074
9,026
Less - government guaranteed loans
10,202
9,947
1,940
Total non-performing loans
$
27,573
$
23,127
$
7,086
Ratio of non-performing loans to total portfolio loans
0.64
%
0.54
%
0.17
%
Ratio of non-performing assets to total assets
0.51
%
0.44
%
0.14
%
Ratio of allowance for credit losses to total non-performing loans
231.09
%
274.33
%
847.23
%
(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 $0.36 million and $0.72 million in the first quarters of 2026 and 2025, respectively. The Company recorded loan net charge offs of $0.27 million and $0.07 million in the first quarters of 2026 and 2025, respectively. At March 31, 2026, the allowance for credit losses for loans totaled $63.7 million, or 1.48% of total portfolio loans compared to $63.4 million, or 1.48% of total portfolio loans at December 31, 2025.
Balance Sheet, Capital and Liquidity
Total assets were $5.56 billion at March 31, 2026, an increase of $51.8 million from December 31, 2025. Loans, excluding loans held for sale, were $4.31 billion at March 31, 2026, compared to $4.28 billion at December 31, 2025. Deposits totaled $4.88 billion at March 31, 2026, an increase of $119.0 million from December 31, 2025. This increase is primarily due to increases in savings and interest-bearing checking, reciprocal, and brokered time deposits that were partially offset by a decrease in time deposits.
Cash and cash equivalents totaled $174.9 million at March 31, 2026, versus $138.4 million at December 31, 2025. Securities available for sale ("AFS") totaled $482.3 million at March 31, 2026, versus $495.9 million at December 31, 2025.
Total shareholders' equity was $510.6 million at March 31, 2026, or 9.19% of total assets compared to $503.0 million or 9.14% at December 31, 2025. Tangible common equity totaled $481.4 million at March 31, 2026, or $23.38 per share compared to $473.7 million or $23.05 per share at December 31, 2025. The increases in shareholders' equity as well as tangible common equity are primarily the result of earnings retention that was partially offset by an increase 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
3/31/2026
12/31/2025
WellCapitalizedMinimum
Tier 1 capital to average total assets
9.43
%
9.36
%
5.00
%
Common equity tier 1 capital to risk-weighted assets
11.43
%
11.24
%
6.50
%
Tier 1 capital to risk-weighted assets
11.43
%
11.24
%
8.00
%
Total capital to risk-weighted assets
12.68
%
12.49
%
10.00
%
At March 31, 2026, 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 $785.5 million and $1.36 billion, respectively. We also had approximately $440.7 million in fair value of unpledged securities AFS and HTM at March 31, 2026 which could be pledged for an estimated additional borrowing capacity at the FHLB and FRB of approximately $414.0 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. During the three month period ended March 31, 2026, there were no shares of common stock repurchased.
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 Thursday, April 23, 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/BId259863bf9e8463883aeddb939de1580.
In order to view the webcast and presentation slides, please go to https://edge.media-server.com/mmc/p/989vrdc9 during the time of the call. A replay of the webcast will be available until April 23, 2027.
About Independent Bank Corporation
Independent Bank Corporation (NASDAQ:IBCP) is a Michigan-based bank holding company with total assets of approximately $5.6 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; the outcome of pending litigation; 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, 2025 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.
In addition, this release contains forward-looking statements regarding the proposed merger with HCB Financial Corp. ("HCB"). Important factors that could cause actual results to differ materially from those anticipated include: the risk that the merger may not be completed in a timely manner or at all; the failure to satisfy the conditions to the completion of the merger, including the receipt of all required regulatory and shareholder approvals; the occurrence of any event, change, or other circumstance that could give rise to the right of one or both parties to terminate the merger agreement; the risk that the anticipated benefits and cost savings of the merger may not be fully realized or may take longer to realize than expected; the risk of business disruption during the pendency of the merger; diversion of management's attention from ongoing business operations; the risk that the integration of HCB's operations with ours will be materially delayed or will be more costly or difficult than expected; and the potential for reputational risk related to the merger and integration.
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.
Additional Information and Where to Find ItIn connection with the proposed acquisition of HCB, we expect to file with the SEC a registration statement on Form S-4 that will include a preliminary proxy statement of HCB and a preliminary prospectus of Independent Bank Corporation. Shareholders are urged to read the proxy statement/prospectus when it becomes available because it will contain important information about the proposed transaction. Free copies of these documents, when available, may be obtained at the SEC's website (www.sec.gov) or upon written request to Independent Bank Corporation, 4200 East Beltline, Grand Rapids, MI 49525, Attention: Investor Relations, or HCB Financial Corp., 150 West Court Street, Hastings, MI 49058, Attention: Amanda Belcher-Currier, CFO. A final proxy statement/prospectus will be mailed to the shareholders of HCB.
No Offer or SolicitationThis communication is not an offer to sell or the solicitation of an offer to buy any securities, or a solicitation of any vote or approval, nor shall there be any sale of securities in any jurisdiction in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of such jurisdiction.
INDEPENDENT BANK CORPORATION AND SUBSIDIARIESConsolidated Statements of Financial Condition
March 31, 2026
December 31, 2025
(Unaudited)
(In thousands, except shareamounts)
Assets
Cash and due from banks
$
48,475
$
52,235
Interest bearing deposits
126,440
86,152
Cash and Cash Equivalents
174,915
138,387
Securities available for sale
482,295
495,909
Securities held to maturity (fair value of $271,452 at March 31, 2026 and $282,830 at December 31, 2025)
301,007
309,523
Federal Home Loan Bank and Federal Reserve Bank stock, at cost
18,102
18,102
Loans held for sale, carried at fair value
19,714
9,031
Loans
Commercial
2,267,369
2,213,557
Mortgage
1,520,358
1,524,821
Installment
520,372
537,907
Total Loans
4,308,099
4,276,285
Allowance for credit losses
(63,719
)
(63,445
)
Net Loans
4,244,380
4,212,840
Other real estate and repossessed assets, net
767
896
Property and equipment, net
42,319
38,972
Bank-owned life insurance
54,072
53,750
Capitalized mortgage loan servicing rights, carried at fair value
32,233
31,493
Other intangibles, net
886
1,001
Goodwill
28,300
28,300
Accrued income and other assets
158,519
167,516
Total Assets
$
5,557,509
$
5,505,720
Liabilities and Shareholders' Equity
Deposits
Non-interest bearing
$
991,140
$
991,984
Savings and interest-bearing checking
2,146,403
2,113,260
Reciprocal
1,028,874
974,921
Time
657,043
662,858
Brokered time
57,220
18,659
Total Deposits
4,880,680
4,761,682
Other borrowings
27,010
77,003
Subordinated debentures
39,881
39,864
Accrued expenses and other liabilities
99,385
124,220
Total Liabilities
5,046,956
5,002,769
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: 20,585,805 shares at March 31, 2026 and 20,548,893 shares at December 31, 2025
307,679
307,845
Retained earnings
263,898
252,794
Accumulated other comprehensive loss
(61,024
)
(57,688
)
Total Shareholders' Equity
510,553
502,951
Total Liabilities and Shareholders' Equity
$
5,557,509
$
5,505,720
INDEPENDENT BANK CORPORATION AND SUBSIDIARIESConsolidated Statements of Operations
Three Months Ended
March 31,2026
December 31, 2025
March 31,2025
(Unaudited)
Interest Income
(In thousands, except per share amounts)
Interest and fees on loans
$
59,249
$
60,205
$
57,768
Interest on securities
Taxable
3,354
3,513
4,036
Tax-exempt
2,522
2,633
2,770
Other investments
1,044
1,074
1,570
Total Interest Income
66,169
67,425
66,144
Interest Expense
Deposits
