INDEPENDENT BANK CORP /MI/
For the period ended Dec 31, 2025. Filed Mar 6, 2026.
View on SEC.govAbout this filing
A company's yearly report to the SEC, with audited financial statements. It is the fullest account a company gives of its business, its finances and the risks it sees.
FY2025 · Filed Mar 6, 2026
IBCP$36.31-0.1%Stored close · as of Nov 6, 2026
What changed in Risk Factors?
Read the current filingPrevious report: 10-K
Period ended 2024-12-31; filed 2025-03-07.
0000039311-25-000044
Item 1A. RISK FACTORSCurrent report: 10-K
Period ended 2025-12-31; filed 2026-03-06.
0000039311-26-000009
Item 1A. RISK FACTORSThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 67 previous paragraphs and 80 current paragraphs.
60 unchanged; 7 reworded; 13 added; 0 removed; 0 previous and 0 current paragraphs rearranged.
Tables are not compared: 0 previous and 0 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (13)
Current report
Our use of artificial intelligence and machine learning technologies may expose us to regulatory, operational, and competitive risks.
Current report
We use artificial intelligence ("AI") and machine learning technologies in certain aspects of our operations. While these technologies can provide significant benefits, they also present risks that could adversely affect our business. AI systems may produce inaccurate or biased outputs, which could result in regulatory compliance failures. The use of AI in lending decisions is subject to increasing regulatory scrutiny, particularly with respect to fair lending requirements under the Equal Credit Opportunity Act and the Fair Housing Act. Regulators may challenge the use of AI models that produce results that are based upon potential bias, even if such impacts are unintentional. Additionally, we face competitive pressures from fintech companies and other financial institutions that may be able to deploy AI technologies more aggressively or effectively than we can. Errors or failures in AI systems could result in operational disruptions, financial losses, reputational harm, or regulatory sanctions. As AI technology continues to evolve rapidly, there is significant uncertainty regarding future regulatory requirements and industry standards applicable to the use of AI by financial institutions. The regulatory landscape for AI in banking is still developing, and new regulations or guidance could require us to modify or discontinue certain uses of AI, incur significant compliance costs, or face enforcement actions.
Current report
A significant portion of our deposits are uninsured, which could result in funding pressures and liquidity constraints during times of financial stress.
Current report
A portion of our deposits exceeds the $250,000 FDIC insurance limit. As of December 31, 2025, our estimated uninsured deposits totaled approximately $1.176 billion, representing approximately 24.8% of our total deposits. Uninsured deposits may be more likely to be withdrawn during times of financial stress, which could result in funding pressures and liquidity constraints. In 2023, the failures of Silicon Valley Bank and Signature Bank highlighted the risks associated with high concentrations of uninsured deposits, as rapid deposit withdrawals contributed to those institutions' failures. We believe our depositor base is relatively diversified, and we take steps to manage uninsured deposit risk, including monitoring deposit concentrations, diversifying funding sources, and maintaining access to contingent liquidity facilities. However, there can be no assurance these measures will be effective in preventing deposit outflows during periods of market stress. A significant loss of deposits could require us to seek alternative funding sources, which may be more expensive or unavailable on acceptable terms, and could adversely affect our liquidity, financial condition, and results of operations.
Current report
Our concentration in commercial real estate loans exposes us to increased credit risk and regulatory scrutiny.
Current report
As of December 31, 2025, our loans secured by commercial real estate (CRE) totaled approximately $1.055 billion representing approximately 24.7% of our total loan portfolio. The commercial real estate market has experienced increased stress with higher interest rates and changes in tenant demand adversely affecting property values and cash flows in certain segments of the CRE market. Regulatory agencies have increased their scrutiny of CRE lending concentrations, particularly with respect to office properties and other property types experiencing elevated stress. An extended period of stress in the commercial real estate market could result in increased loan delinquencies, higher credit losses, and reduced collateral values, which could adversely affect our financial condition and results of operations. We actively monitor our CRE portfolio and underwriting standards; however, there can be no assurance that these measures will be sufficient to avoid losses.
Current report
We rely on third-party service providers for critical business functions, which exposes us to operational, cybersecurity, and regulatory risks.
Current report
We rely on third-party service providers for significant components of our business operations, including core data processing systems, payment processing, cybersecurity monitoring, and other critical functions. Our core data processing systems are largely outsourced to third-party providers. This reliance on third parties creates concentration risk, as disruptions to our key service providers' operations, financial condition, or security could directly impact our ability to serve customers and conduct business. Cybersecurity incidents affecting our third-party vendors could result in unauthorized access to customer data, operational disruptions, and regulatory liability. In addition, our third-party providers may fail to comply with applicable laws and regulations, which could expose us to regulatory sanctions and reputational harm. Contract negotiations with critical vendors may result in unfavorable terms, and we may have limited ability to switch providers without significant cost and operational disruption. Regulatory agencies increasingly scrutinize financial institutions' third-party risk management practices, and we may face increased compliance costs and regulatory expectations in this area. Failure to effectively manage third-party risks could adversely affect our business, financial condition, and results of operations.
Current report
The financial services industry is also experiencing a rapid increase in the frequency and sophistication of fraudulent attacks, driven by the proliferation of AI-powered tools, deepfake technology, and organized, transnational crime rings. We are subject to evolving, complex threats designed to bypass traditional security controls. Our failure to successfully anticipate or mitigate these evolving schemes could lead to increased financial losses, higher operational costs, regulatory penalties, and significant reputational damage.
Current report
An adverse outcome in certain overdraft fee litigation that has been brought against the bank could have a material adverse effect on our results of operations.
Current report
We are currently a defendant in three putative class action lawsuits challenging aspects of our overdraft and/or insufficient funds fee practices, including allegations that fees were assessed in circumstances where transactions were authorized on a positive balance but later settled against a negative balance and/or that multiple fees were charged on re-presented items. For additional information, please see Note 11 – Commitments and Contingent Liabilities in the Notes to Consolidated Financial Statements in our annual report, to be delivered to shareholders in connection with the April 21, 2026 Annual Meeting of Shareholders (filed as exhibit 13 to this report on Form 10-K) for more information. An adverse outcome in any of these matters, through judgment or settlement, could result in monetary damages, restitution, remedial relief requiring changes to our products, disclosures, and systems, and an increase in legal and compliance costs, any of which could be material to our results of operations. Similar lawsuits against other financial institutions nationwide have resulted in substantial settlements, and plaintiffs’ firms continue to actively pursue these claims. Recent public settlements in overdraft-related litigation include payments by multiple institutions, reflecting the potential exposure in this area.
Current report
Emerging digital assets and technologies may disrupt our business and adversely affect our results.
Current report
Rapid innovation in financial technology - including stablecoins and other digital assets, distributed ledger technologies, real‑time payment networks, embedded banking, and artificial intelligence - may change how consumers and businesses store value, make payments, access credit, and obtain financial services. These innovations could reduce our deposits (e.g., if customers hold value in stablecoins rather than bank accounts), compress or eliminate payment‑related and interchange revenues, and increase competition from non‑bank providers and larger technology firms with greater resources and scale. They may also require significant investments in systems, talent, cybersecurity, vendor oversight, and compliance, and expose us to new operational, fraud, liquidity, Bank Secrecy Act/anti‑money laundering, consumer protection, and third‑party risks. Legal and regulatory frameworks applicable to digital assets and related activities remain uncertain and may evolve rapidly; changes could restrict our ability to participate in or provide services to these markets, or increase our compliance costs and potential liabilities. If we are unable to adapt our products, pricing, and technology in a timely and cost‑effective manner, or if customers migrate to alternative platforms, our growth, funding, net interest margin, fee income, and overall financial condition could be materially and adversely affected.
Reworded paragraphs (7)
Previous wording
Pressures from various global and national macroeconomic events, including heightened inflation, uncertainty regarding future interest rates, foreign currency exchange rate fluctuations, recent adverse weather conditions and natural disasters, ongoing conflict in the Middle East, the continuation of the Russia-Ukraine war, and potential governmental responses to these events have created, and continue to create, significant economic uncertainty and could materially and adversely impact our financial condition and performance. In addition, pursuit of various initiatives announced by the new Trump administration may create some degree of volatility in our customers’ businesses, regulation of the financial services industry, and the markets in which we operate.
Current wording
Pressures from various global and national macroeconomic events, including heightened inflation, uncertainty regarding future interest rates, foreign currency exchange rate fluctuations, recent adverse weather conditions and natural disasters, ongoing conflict in the Middle East, the continuation of the Russia-Ukraine war, and potential governmental responses to these events have created, and continue to create, significant economic uncertainty and could materially and adversely impact our financial condition and performance. In addition, pursuit of new initiatives announced by the Trump administration may create some degree of volatility in our customers’ businesses, regulation of the financial services industry, and the markets in which we operate.
Previous wording
Additional regulatory focus on the financial services industry is common in connection with an economic downturn, as the industry experienced following the most recent financial crisis. As a result, the adverse effects on our business relating to any future economic downturn could be exacerbated by additional regulations and regulatory scrutiny that accompanied or followed any such downturn. We can neither predict when or whether future regulatory or legislative reforms will be enacted nor what their contents will be. The impact of any future legislation or regulatory actions on our businesses or operations cannot be determined at this time, and such impact may adversely affect us. It is difficult to predict what impact the new Trump administration will have on these risks. Any actions by the new administration to scale back regulations or regulatory oversight may become subject to judicial or other challenges, which may increase the degree of uncertainty associated with this risk factor.
Current wording
Additional regulatory focus on the financial services industry is common in connection with an economic downturn, as the industry experienced following the most recent financial crisis. As a result, the adverse effects on our business relating to any future economic downturn could be exacerbated by additional regulations and regulatory scrutiny that accompanied or followed any such downturn. We can neither predict when or whether future regulatory or legislative reforms will be enacted nor what their contents will be. The impact of any future legislation or regulatory actions on our businesses or operations cannot be determined at this time, and such impact may adversely affect us. It is difficult to predict what impact the Trump administration will have on these risks. Any actions by the administration to scale back regulations or regulatory oversight may become subject to judicial or other challenges, which may increase the degree of uncertainty associated with this risk factor.
Previous wording
Operational difficulties, including failure of technology infrastructure, could adversely affect our business and operations.
Current wording
Operational difficulties, including failure of technology infrastructure and the increasing occurrence and sophistication of attempts at fraudulent activity, could adversely affect our business and operations.
Previous wording
The operations of financial institutions such as us are dependent to a large degree on net interest income, which is the difference between interest income from loans and investments and interest expense on deposits and borrowings. Prevailing economic conditions; the trade, fiscal and monetary policies of the federal government, which have the potential to change significantly with the new Trump administration; and the policies of various regulatory agencies all affect market rates of interest and the availability and cost of credit, which in turn significantly affect financial institutions' net interest income. Volatility in interest rates can also result in disintermediation, which is the flow of funds away from financial institutions into direct investments, such as federal government and corporate securities and other investment vehicles, which, because of the absence of federal insurance premiums and reserve requirements, generally pay higher rates of return than financial institutions. Our financial results could be materially adversely impacted by changes in financial market conditions.
Current wording
The operations of financial institutions such as us are dependent to a large degree on net interest income, which is the difference between interest income from loans and investments and interest expense on deposits and borrowings. Prevailing economic conditions; the trade, fiscal and monetary policies of the federal government, which have the potential to change significantly with the Trump administration; and the policies of various regulatory agencies all affect market rates of interest and the availability and cost of credit, which in turn significantly affect financial institutions' net interest income. Volatility in interest rates can also result in disintermediation, which is the flow of funds away from financial institutions into direct investments, such as federal government and corporate securities and other investment vehicles, which, because of the absence of federal insurance premiums and reserve requirements, generally pay higher rates of return than financial institutions. Our financial results could be materially adversely impacted by changes in financial market conditions.
Previous wording
Our loan customers may not repay their loans according to their respective terms, and the collateral securing the payment of these loans may be insufficient to cover any losses we may incur. We make various assumptions and judgments about the collectability of our loan portfolio, including the creditworthiness of our borrowers and the value of the real estate and other assets serving as collateral for the repayment of many of our loans. Non-performing loans amounted to $6.0 million and $5.2 million at December 31, 2024, and December 31, 2023, respectively. Our allowance for credit losses coverage ratio of non-performing loans was 989.32% and 1,044.69% at December 31, 2024, and December 31, 2023, respectively. The decrease in this coverage ratio in 2024 was primarily due to an increase in non-performing loans that was partially offset by an increase in the allowance for credit losses. In determining the size of the allowance for credit losses, we rely on our experience and our evaluation of current economic conditions. If our assumptions or judgments prove to be incorrect, our current allowance for credit losses may not be sufficient to cover certain credit losses inherent in our loan portfolio, and adjustments may be necessary to account for different economic conditions or adverse developments in our loan portfolio. Material additions to our allowance for credit losses would adversely impact our operating results.
Current wording
Our loan customers may not repay their loans according to their respective terms, and the collateral securing the payment of these loans may be insufficient to cover any losses we may incur. We make various assumptions and judgments about the collectability of our loan portfolio, including the creditworthiness of our borrowers and the value of the real estate and other assets serving as collateral for the repayment of many of our loans. Non-performing loans amounted to $23.1 million and $6.0 million at December 31, 2025, and December 31, 2024, respectively. Our allowance for credit losses coverage ratio of non-performing loans was 274.33% and 989.32% at December 31, 2025, and December 31, 2024, respectively. The decrease in this coverage ratio in 2025 was primarily due to an increase in commercial non-performing loans that was partially offset by an increase in the allowance for credit losses. In determining the size of the allowance for credit losses, we rely on our experience and our evaluation of current economic conditions. If our assumptions or judgments prove to be incorrect, our current allowance for credit losses may not be sufficient to cover certain credit losses inherent in our loan portfolio, and adjustments may be necessary to account for different economic conditions or adverse developments in our loan portfolio. Material additions to our allowance for credit losses would adversely impact our operating results.
Previous wording
We maintain diversified securities portfolios, which include obligations of the Treasury and government-sponsored agencies as well as securities issued by states and political subdivisions, mortgage-backed securities, corporate securities and asset-backed securities. We seek to limit credit losses in our securities portfolios by principally purchasing highly rated securities (generally rated "AA" or higher by a major debt rating agency) and by conducting due diligence on the issuer. However, gross unrealized losses on securities available for sale and securities held to maturity in our portfolio totaled approximately $62.7 million and $53.9 million, respectively as of December 31, 2024 (compared to approximately $65.2 million and $55.9, respectively as of December 31, 2023). We believe these unrealized losses are temporary in nature and are expected to be recovered within a reasonable time period as we believe we have the ability to hold the securities to maturity or until such time as the unrealized losses reverse. We evaluate securities available for sale for other impairment related to credit at least quarterly and more frequently when economic or market concerns warrant such evaluation. Those evaluations may result in a provision for credit losses recorded in our earnings. We measure expected credit losses on securities held to maturity ("HTM") on a collective basis by major security type with each type sharing similar risk characteristics, and we consider historical credit loss information. We may, in the future, experience losses in our securities portfolios which may result in credit losses that could materially adversely affect our results of operations.
Current wording
We maintain diversified securities portfolios, which include obligations of the Treasury and government-sponsored agencies as well as securities issued by states and political subdivisions, mortgage-backed securities, corporate securities and asset-backed securities. We seek to limit credit losses in our securities portfolios by principally purchasing highly rated securities (generally rated "AA" or higher by a major debt rating agency) and by conducting due diligence on the issuer. However, gross unrealized losses on securities available for sale and securities held to maturity in our portfolio totaled approximately $51.4 million and $39.8 million, respectively as of December 31, 2025 (compared to approximately $62.7 million and $53.9, respectively as of December 31, 2024). We believe these unrealized losses are temporary in nature and are expected to be recovered within a reasonable time period as we believe we have the ability to hold the securities to maturity or until such time as the unrealized losses reverse. We evaluate securities available for sale for impairment related to credit losses at least quarterly and more frequently when economic or market concerns warrant such evaluation. Those evaluations may result in a provision for credit losses recorded in our earnings. We measure expected credit losses on securities held to maturity ("HTM") on a collective basis by major security type with each type sharing similar risk characteristics, and we consider historical credit loss information. We may, in the future, experience losses in our securities portfolios which may result in credit losses that could materially adversely affect our results of operations.
Previous wording
A portion of our revenues are derived from net gains on mortgage loans. These net gains primarily depend on the volume of loans we sell, which in turn depends on our ability to originate real estate mortgage loans and the demand for fixed-rate obligations and other loans that are outside of our established interest-rate risk parameters. Net gains on mortgage loans are also dependent upon economic and competitive factors as well as our ability to effectively manage exposure to changes in interest rates. Consequently, they can often be a volatile part of our overall revenues. We realized net gains of $6.6 million on mortgage loans during 2024 compared to $7.4 million during 2023 and $6.4 million during 2022.
Current wording
A portion of our revenues are derived from net gains on mortgage loans. These net gains primarily depend on the volume of loans we sell, which in turn depends on our ability to originate real estate mortgage loans and the demand for fixed-rate obligations and other loans that are outside of our established interest-rate risk parameters. Net gains on mortgage loans are also dependent upon economic and competitive factors as well as our ability to effectively manage exposure to changes in interest rates. Consequently, they can often be a volatile part of our overall revenues. We realized net gains of $6.8 million on mortgage loans during 2025 compared to $6.6 million during 2024 and $7.4 million during 2023.