Independent Bank Corporation (IBC) reported its financial results for the first quarter of 2025, revealing a net income of $15.6 million, a slight decrease from $16.0 million in the same period last year. The earnings per share for the quarter were $0.74, down from $0.77 in the prior year. The decline in net income was attributed primarily to a $2.8 million unfavorable change in the fair value of capitalized mortgage loan servicing rights and a $0.9 million increase in costs related to unfunded lending commitments, although these were partially offset by a $3.5 million increase in net interest income.
Total assets for IBC decreased marginally to $5.33 billion as of March 31, 2025, compared to $5.34 billion at the end of 2024. The bank's loan portfolio, excluding loans held for sale, increased to $4.07 billion, up from $4.04 billion, driven by growth in commercial loans, while mortgage and installment loans saw a decline. Deposits also decreased slightly to $4.63 billion, down from $4.65 billion, primarily due to reductions in non-interest bearing and brokered time deposits, which were partially offset by increases in savings and interest-bearing checking accounts.
In terms of operational metrics, IBC's net interest income rose to $43.7 million, an increase of 8.7% year-over-year, reflecting a $167.9 million rise in average interest-earning assets. The net interest margin improved to 3.49% from 3.30% in the previous year, aided by a decrease in the cost of funds. The bank's allowance for credit losses (ACL) increased to $60.0 million, representing 1.47% of total portfolio loans, consistent with the previous quarter. The increase in ACL was primarily due to specific allocations for certain commercial loans.
Strategically, IBC has been focusing on enhancing its product offerings and managing its asset-liability mix. The bank has implemented various account acquisition strategies to attract new core deposits and has expanded its treasury management products for commercial clients. Additionally, IBC has entered into interest rate swaps to manage its exposure to interest rate fluctuations, reflecting a proactive approach to risk management. Looking ahead, the bank remains cautiously optimistic about its ability to navigate the current economic uncertainties while maintaining its capital adequacy and liquidity positions.
About INDEPENDENT BANK CORP /MI/
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