INDEPENDENT BANK CORP /MI/
For the period ended Mar 31, 2026. Filed May 6, 2026.
View on SEC.govAbout this filing
A company's report for each of its first three quarters. The financial statements are not audited. It shows how the business has moved since the last annual report, and what management says changed.
Mar 31, 2026 · Filed May 6, 2026
IBCP$36.31-0.1%Stored close · as of Nov 6, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-Q
Period ended 2025-09-30; filed 2025-11-05.
0000039311-25-000101
Item 2. Management's Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-Q
Period ended 2026-03-31; filed 2026-05-06.
0000039311-26-000048
Item 2. Management's Discussion and Analysis of Financial Condition and Results of OperationsThe 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 158 previous paragraphs and 151 current paragraphs.
80 unchanged; 57 reworded; 13 added; 17 removed; 4 previous and 1 current paragraphs rearranged.
Tables are not compared: 19 previous and 18 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
On March 18, 2026, we entered into a definitive merger agreement with HCB Financial Corp. ("HCB") (the "Merger Agreement") providing for a business combination of Independent Bank Corporation ("IBCP") and HCB. The Merger Agreement provides that, upon the terms and subject to the conditions set forth in the Merger Agreement, HCB will be merged with and into IBCP, with IBCP as the surviving corporation (the "Merger"). In addition, IBCP intends to consolidate Highpoint Community Bank, HCB's wholly-owned subsidiary bank, with and into Independent Bank (with Independent Bank as the surviving institution).
Current report
Subject to the terms and conditions of the Merger Agreement, we will pay aggregate Merger consideration of approximately $70.2 million in IBCP common stock and cash for all of the shares of HCB common stock issued and outstanding immediately before the effective time of the Merger. The Merger consideration is subject to adjustment in certain limited circumstances, as set forth in the Merger Agreement.
Current report
Completion of the Merger is subject to certain closing conditions, including (among others) receipt of the requisite approval of HCB's shareholders, receipt of required regulatory approvals, and the absence of any law or order prohibiting completion of the Merger. The Merger Agreement provides certain termination rights for both IBCP and HCB and further provides that, upon termination of the Merger Agreement under certain limited circumstances, HCB will be obligated to pay IBCP a termination fee of approximately $3.25 million. Currently we anticipate the Merger will be effective during the third quarter of 2026. Our 2026 non-interest expenses include $0.3 million of costs incurred through March 31, 2026 related to the Merger.
Current report
The increase in mortgage loans originated during the first three months of 2026 as compared to 2025 was primarily driven by higher refinance activity as mortgage rates declined through early 2026.
Current report
respectively. The contraction of the Loan Sales Margin during the first quarter of 2026 was primarily due to competitive pressure which had a negative impact on our pricing margins.
Current report
Litigation expense of $1.5 million is attributed toan accrual established for losses we consider probable as a result of all of our outstanding litigation matters in the aggregate (See “Litigation Matters.”).
Current report
Advertising increased by $0.3 million in the first quarterof 2026 compared to the same prior year period due in part to retroactive new deposit account opening incentives attributed to accounts opened in a prior period.
Current report
Merger related expenses of $0.3 million in the first quarter of 2026 relate to our recently announced acquisition of HCB Financial Corp. and primarily include legal related expenses.
Current report
Other expense decreased by $0.3 million in the first three months of 2026, due primarily to the prior year period including costs related to the capitalized mortgage loan servicing right sale (see “Non-interest income” above) and the prior year period also including costs related to unfunded lending commitments that were partially offset by a write-down of a small business investment company.
Current report
Allowance for credit losses on loans, securities HTM and unfunded lending commitments
Current report
(1) Beginning in the fourth quarter of 2025, we began classifying the provision for unfunded lending commitments in the provision for credit losses in the Consolidated Statements of Operations.
Current report
Since December 31, 2025, the ACL related to specific loans increased $0.30 million due primarily to one commercial loan relationship. The ACL related to pooled analysis allocations and additional allocations based on subjective factors were both relatively stable, increasing (decreasing) $(0.12) million and $0.10 million, respectively from December 31, 2025.
Current report
We are involved in various litigation matters in the ordinary course of business, which currently include three putative class action complaints brought against the Bank alleging that its practice of charging overdraft and other fees was not consistent with the disclosures the Bank made to consumers. These lawsuits are similar to lawsuits that have recently been filed against other financial institutions pertaining to overdraft fee disclosures. No class has been certified in any of the putative class action complaints brought against the Bank, and we believe we have valid defenses to each of the claims that have been made. Currently, these three actions are being coordinated for pre-trial and other purposes.
Removed paragraphs (17)
Previous report
We recorded net income of $50.0 million and $48.3 million during the nine months ended September 30, 2025 and 2024, respectively. The increase in 2025 year-to-date results as compared to 2024 is primarily due to a $10.3 million increase in net interest income that was partially offset by a $4.0 million increase in non-interest expense, a $2.0 million increase in the provision for credit losses, a $1.8 million decrease in mortgage loan servicing, net and the prior year including a $2.7 million gain on Visa Inc. common stock.
Previous report
For the first nine months of 2025, net interest income totaled $133.7 million, an increase of $10.3 million, or 8.3% from 2024. This increase primarily reflects a $161.6 million increase in average interest-earning assets and a 19 basis point increase in our net interest margin.
Previous report
(2)Annualized
Previous report
The $0.50 million increase in the provision for credit losses expense on loans from the prior year quarter is primarily due to an increase in specific allocations of the ACL on commercial loans including a $13.8 million commercial real estate loan that was put on non-accrual during the quarter as well as an increase in pooled reserves on commercial loans that were partially offset by a two basis point decrease in allocations based on subjective factors. The decrease in the allocation based on subjective factors was due in part to a generally less pessimistic economic outlook including previous expectations of the impact of new tariffs.
Previous report
The $2.0 million increase in the provision for credit losses expense on loans from the prior year to date period is primarily due to a net increase in specific reserve allocations on commercial loans (see above discussion on commercial specific loans), an increase in net charge-offs in both the retail and commercial loan portfolios and an increase in pooled allocations in the commercial loan portfolio that were partially offset by decreases in pooled and specific allocations in the retail loan portfolio and a decrease in allocations based on subjective factors.
Previous report
Mortgage loans originated and sold in both the quarter and year to date periods ending September 30, were relatively unchanged in 2025 as compared to 2024. These results reflect ongoing sales efforts by our mortgage lending team.
Previous report
Gain on equity securities at fair value totaled zero and $2.7 million during the first nine months of 2025 and 2024, respectively. The gain in 2024 was the consequence of the exchange of our shares of Visa Class B-1 common stock on May 6, 2024 into a combination of Visa Class C common stock and Visa Class B-2 common stock. With the completion of this exchange, we were able to record the fair value of the Visa Class C common stock through income (as it was convertible into publicly traded Visa Class A common stock) while the Visa Class B-2 common stock continues to becarried at zero. See note #13 to the interim Condensed Consolidated Financial Statements.
Previous report
As summarized in the table above, the decrease in capitalized mortgage loan servicing rights during the first nine months of 2025 is primarily attributed to the originated mortgage loan servicing rights sale. This transaction was executed in part to reduce the amount of exposure the bank had to rate variances that may impact the mortgage servicing right asset valuation in future periods. With this sale, it is expected mortgage loan servicing, net will decrease commensurate with the amount of servicing sold relative to the same periods in 2024. While the magnitude of fair value adjustments would also be expected to decrease, those adjustments are dependent upon factors that are harder to predict.
Previous report
Bank owned life insurance increased by $0.1 million and$0.3 million in the third quarter and first nine months of 2025, respectively compared to the same prior year periods due to an increase in crediting rate.
Previous report
Other expense increased by $1.2 million in the first nine months of 2025, due primarily to costs related to the capitalized mortgage loan servicing right sale (nine month period - see “Non-interest income” above), higher fraud related losses, real estate property write down, higher travel and expense costs and higher Michigan Corporate Income Tax (due to an increase in taxable base).
Previous report
Equity Securities at Fair Value
Previous report
On May 6, 2024, we exchanged 12,566 shares of Visa Inc. Class B-1 common stock (all of the Class B-1 shares we owned) for 2,493 shares of Visa Inc. Class C common stock and 6,283 shares of Visa Inc. Class B-2 common stock pursuant to an exchange offer conducted by Visa. With the completion of the exchange, we recorded a gain related to the Class C shares of $2.7 million based on the conversion privilege of those shares and the closing price of the Class A shares on May 3, 2024 (the exchange expiration date) of $268.49 per share. Subsequent to the exchange, we sold all of our Class C shares. See note #13 to the interim Condensed Consolidated Financial Statements included within this report for further discussion.
Previous report
(2)Includes loans secured by multi-family residential and non-farm, non-residential property.
Previous report
Since December 31, 2024, the ACL related to specific loans increased $3.4 million due primarily to one commercial loan addition. The ACL related to pooled analysis of loans increased $0.2 million due primarily to commercial loan growth that was only partially offset by a refinement in prepayment assumptions on mortgage loans that included a breakdown between fixed and variable rate loans. The ACL related to subjective factors decreased $0.4 million due primarily to a two basis point decrease in the allocation rate that was partially offset by commercial loan growth during the first nine months of 2025. The decrease in the allocation based on subjective factors was due in part to a generally less pessimistic economic outlook including previous expectations of the impact of new tariffs.
Previous report
In May 2020, we issued $40.0 million of fixed to floating subordinated notes with a ten year maturity and a five year call option. The initial coupon rate was 5.95% fixed for five years and then floated at the Secured Overnight Financing Rate (“SOFR”) plus 5.825% beginning May 31, 2025. These subordinated notes were presented in the interim Condensed Consolidated Statement of Financial Condition under the caption “Subordinated debt” and presented net of remaining unamortized deferred issuance costs that were being amortized through the maturity date into interest expense on other borrowings and subordinated debt and debentures in our interim Condensed Consolidated Statements of Operations. On September 2, 2025 we redeemed our $40 million floating subordinated notes. As a result, we accelerated the remaining unamortized net issuance costs of $0.36 million during the third quarter of 2025 into interest expense as described above. This redemption did not affect our status as well-capitalized for regulatory purposes or have a material impact on our liquidity resources.
Previous report
Index
Reworded paragraphs (57)
Previous wording
Recent Developments. Pressures from various global and national macroeconomic conditions, including significant volatility and uncertainty with U.S. and global market conditions, the direct and indirect impacts of potential changes to U.S. trade policies, recessionary concerns, uncertainty regarding future interest rates, foreign currency exchange rate fluctuations, the continuation of the Russia-Ukraine war, ongoing and potentially increasing conflict in the Middle East, and potential governmental responses to these events, continue to create significant economic uncertainty. In addition, pursuit of various 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. The extent to which these pressures and other factors may impact our business, results of operations, asset valuations, financial condition, and customers will depend on future developments, which continue to be highly uncertain and difficult to predict. Material adverse impacts may include all or a combination of valuation impairments on our other intangibles, goodwill, securities available for sale ("AFS"), securities held to maturity ("HTM"), loans, capitalized mortgage loan servicing rights or deferred tax assets.
Current wording
Recent Developments. Pressures from various global and national macroeconomic conditions, including significant volatility and uncertainty in U.S. and global market conditions, inflationary pressures, recessionary concerns, uncertainty regarding future interest rates, energy and other commodity price volatility, foreign currency exchange rate fluctuations, the continuation of the Russia-Ukraine war, ongoing conflict in the Middle East, and actual or potential changes in fiscal, trade, regulatory, and monetary policy, continue to create economic uncertainty for our customers, the markets in which we operate, and the financial services industry. The extent to which these pressures and other factors may impact our business, results of operations, asset valuations, financial condition, and customers will depend on future developments, which continue to be highly uncertain and difficult to predict. Material adverse impacts may include all or a combination of valuation impairments on our other intangibles, goodwill, securities available for sale ("AFS"), securities held to maturity ("HTM"), loans, capitalized mortgage loan servicing rights or deferred tax assets.
Previous wording
It is against this backdrop that we discuss our results of operations and financial condition for the third quarter of 2025 as compared to earlier periods.
Current wording
It is against this backdrop that we discuss our results of operations and financial condition for the first quarter of 2026 as compared to earlier periods.
Previous wording
Summary. We recorded net income of $17.5 million and $13.8 million during the three months ended September 30, 2025 and 2024, respectively. The increase in 2025 third quarter results as compared to 2024 is due primarily to a $3.6 million favorable change in the fair value due to price of capitalized mortgage loan servicing rights and a $3.5 million increase in the net interest income that were partially offset by a $1.5 million increase in non-interest expense.
Current wording
Summary. We recorded net income of $16.9 million and $15.6 million during the three months ended March 31, 2026 and 2025, respectively. The increase in 2026 first quarter results as compared to 2025 is due primarily to a $3.2 million increase in net interest income and a $2.5 million favorable change in the fair value due to price of capitalized mortgage loan servicing rights that were partially offset by a $4.0 million increase in non-interest expense.
Previous wording
Our net interest income totaled $45.4 million during the third quarter of 2025, an increase of $3.5 million, or 8.4% from the year-ago period. This increase primarily reflects a $173.8 million increase in average interest-earning assets and a 17 basis point increase in our tax equivalent net interest income as a percent of average interest-earning assets (the “net interest margin”).
Current wording
Our 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. This increase primarily reflects a $130.8 million increase in average interest-earning assets and a 16 basis point increase in our tax equivalent net interest income as a percent of average interest-earning assets (the “net interest margin”).
Previous wording
The increase in average interest-earning assets in both the three andnine month periods of 2025 as compared to the same periods in 2024 primarily reflects growth in commercial loans funded from decreases in installment loans and securities available for sale and held to maturity as well as an increase in deposits.
Current wording
The increase in average interest-earning assets for the first quarter of 2026 as compared to the same period in 2025 primarily reflects growth in commercial loans funded from decreases in interest bearing cash deposits, installment loans and securities available for sale and held to maturity as well as an increase in deposits.
Previous wording
The increases in our net interest margin during the three and nine month periods in 2025 is attributed to 27 basis point decreases in interest expense as a percent of average interest-earning assets ("Cost of Funds") that were only partially offset by 10 basis point and eight basis point decreases, respectfully in interest income as a percent of average interest-earning assets ("Asset Yield") during those same periods. These decreases are primarily attributed to the decreases in the federal funds rate since September of 2024. Our Cost of Funds has been positively impacted by deposit pricing sensitivity to the decreases in interest rates discussed above. Our Asset Yield has been negatively impacted by lower rates on variable rate earning assets. However, this impact has been partially offset by the origination of new fixed rate loans at rates higher than those in our current portfolio, as well as a shift in earning asset mix from generally lower rate investment securities to higher rate loans. See Asset/liability management.
Current wording
The increase in our net interest margin during the three month period in 2026 is attributed to a 29 basis point decrease in interest expense as a percent of average interest-earning assets ("Cost of Funds") that was only partially offset by a 13 basis point decrease in interest income as a percent of average interest-earning assets ("Asset Yield"). These decreases are primarily attributed to the decreases in the federal funds rate since January of 2025 as the average federal funds rate was 75 basis points lower during the first quarter of 2026 as compared to the first quarter of 2025. Our Cost of Funds has been positively impacted by deposit pricing sensitivity to the decreases in interest rates discussed above as well as a favorable shift in mix with growth in lower cost non-maturity deposits and runoff in wholesale funding and subordinated debentures. Our Asset Yield has been negatively impacted by lower rates on variable rate earning assets. However, this impact has been partially offset by the origination of new fixed rate loans at rates higher than those in our current portfolio, as well as a shift in earning asset mix from generally lower rate investment securities, consumer loans and overnight liquidity to higher rate loans. See Asset/liability management.
Previous wording
Our net interest income is also impacted by our level of non-accrual loans. In the third quarter and first nine months of 2025, non-accrual loans averaged $10.8 million and $8.4 million, respectively. In the third quarter and first nine months of 2024, non-accrual loans averaged $4.5 million and $4.1 million, respectively. In addition, in the third quarter and first nine months of 2025 we had net recoveries of $0.1 million and $0.3 million, respectively of unpaid interest on loans placed on or taken off non-accrual or on loans previously charged-off compared to net recoveries of $0.1 million and $0.5 million, respectively, during the same periods in 2024.
Current wording
Our net interest income is also impacted by our level of non-accrual loans. In the first quarter of 2026, non-accrual loans averaged $36.0 million. In the first quarter of 2025, non-accrual loans averaged $6.6 million. The increase in non accrual balances primarily relates to one commercial loan credit relationship. In addition, in the first quarter of 2026 we had net charge-offs of $0.1 million of unpaid interest on loans placed on or taken off non-accrual or on loans previously charged-off compared to net recoveries of $0.1 million during the same period in 2025.
Previous wording
Provision for credit losses. The provision for credit losses was an expense of $1.99 million and an expense of $1.49 million for the three months ended September 30, 2025 and 2024, respectively. During the nine month periods ended September 30, 2025 and 2024, the provision for credit losses was an expense of $4.21 million and an expense of $2.25 million, respectively.
Current wording
Provision for credit losses. The provision for credit losses was an expense of $0.36 million and $0.72 million for the three months ended March 31, 2026 and 2025, respectively.
Previous wording
The provision reflects our assessment of the allowance for credit losses (the “ACL”) taking into consideration factors such as loan growth, loan mix, levels of non-performing and classified loans, economic conditions and loan net charge-offs. While we use relevant information to recognize losses on loans, additional provisions for related losses may be necessary based on changes in economic conditions, customer circumstances and other credit risk factors. See “Portfolio Loans and asset quality” for a discussion of the various components of the ACL and their impact on the provision for credit losses in 2025.
Current wording
The provision for credit losses on loans reflects our assessment of the allowance for credit losses (the “ACL”) on loans taking into consideration factors such as loan growth, loan mix, levels of non-performing and classified loans, economic conditions and loan net charge-offs. While we use relevant information to recognize losses on loans, additional provisions for related losses may be necessary based on changes in economic conditions, customer circumstances and other credit risk factors. See “Portfolio Loans and asset quality” for a discussion of the various components of the ACL related to loans and their impact on the provision for credit losses in 2026. In general, we use a similar methodology for the provision for credit losses on unfunded lending commitments.
Previous wording
Allowance for credit losses on loans and unfunded lending commitments
Current wording
The$0.4 million decrease in the provision for credit losses expense on loans and unfunded lending commitments from the prior year quarter is primarily due to a favorable variance in allocations based on subjective factors (prior year quarter included a four basis point increase while there was no increase in 2026), a decline in specific commercial loan reserves (prior year quarter included several downgrades while the specific allocations were relatively stable in 2026) as well a decrease in reserve on unfunded lending commitments (attributed to a decrease in balances and expected loss rates) that were only partially offset by an increase in retail loan pooled reserves (prior year quarter included certain favorable pooled loss allocation rate changes while pooled allocations were relative stable in 2026).
Previous wording
The year to date provision for credit losses on securities HTM in 2025 and 2024 was a credit of $0.040 million and $1.149 million, respectively. The change in provision for credit losses on securities HTM reflects a partial recovery during the first quarter of 2024 of one corporate security (Signature Bank) totaling $1.125 million. See “Securities” below and note #3 to the interim Condensed Consolidated Financial Statements.
Current wording
The year to date provision for credit losses on securities HTM in 2026 and 2025 was a credit of zero and $0.003 million, respectively. See Note #3.
Previous wording
Non-interest income. Non-interest income is a significant element in assessing our results of operations. Non-interest income totaled $11.9 million during the third quarter of 2025 compared to $9.5 million in the third quarter of 2024. For the first nine months of 2025, non-interest income totaled $33.7 million compared to $37.2 million for the first nine months of 2024.
Current wording
Non-interest income. Non-interest income is a significant element in assessing our results of operations. Non-interest income totaled $12.0 million during the first quarter of 2026 compared to $10.4 million in the first quarter of 2025.
Previous wording
(1)Mortgage loan salesin the third quarters of 2025 and 2024 include $4.5 million and$6.6 million, respectively, of portfolio loan transactions. Mortgage loan sales during the first nine months of 2025 and 2024 include $19.9 million and$14.7 million, respectively, of portfolio loan transactions. These transactions were performed for interest rate risk purposes.
Current wording
(1)Mortgage loan salesin the first quarters of 2026 and 2025 include $1.4 million and$8.7 million, respectively, of portfolio loan transactions. These transactions were performed for interest rate risk purposes.
Previous wording
(2) Net gains on mortgage loans in thethird quarters of 2025 and 2024 include net gains of$0.07 million and$0.12 million, respectively, from portfolio loan transactions. Net gains during the first nine months of 2025 and 2024 were $0.4 million and$0.3 million, respectively.
Current wording
(2) Net gains on mortgage loans in thefirst quarters of 2026 and 2025 include net gains of$0.03 million and$0.22 million, respectively, from portfolio loan transactions.
Previous wording
Net gains on mortgage loans totaled $1.5 million and $2.2 million during the third quarters of 2025 and 2024, respectively and $5.4 million and $4.9 million during the first nine months of 2025 and 2024, respectively. The decrease from the prior year three month period is attributed to a combination of a lower Loan Sales Margin (due to lower fair value adjustments) and a decrease in the volume of loans sold while the increase during the year to date period is attributed to an increase in the loan sales margin.
Current wording
Net gains on mortgage loans totaled $1.3 million and $2.3 million during the first quarters of 2026 and 2025, respectively. The decrease from the prior year three month period is attributed to a lower Loan Sales Margin.
Previous wording
Our Loan Sales Margin is impacted by several factors including competition and the manner in which the loan is sold. Net gains on mortgage loans are also impacted by recording fair value accounting adjustments. Excluding these fair value accounting adjustments, the Loan Sales Margin would have been 1.42% and 1.40% in the third quarters of 2025 and 2024, respectively, and would have been 1.61% and 1.38% in the first nine months of 2025 and 2024, respectively. The increase in the Loan Sales Margin (excluding fair value adjustments) during the first nine months of 2025 was generally due in part to higher primary-to-secondary market pricing spreads relative to the same period last year. The contraction of the Loan Sales Margin during the third quarter of 2025 was due in part to certain loan marketing specials during the third quarter of 2025.
Current wording
Our Loan Sales Margin is impacted by several factors including competition and the manner in which the loan is sold. Net gains on mortgage loans are also impacted by recording fair value accounting adjustments. Excluding these fair value accounting adjustments, the Loan Sales Margin would have been 1.47% and 1.91% in the first quarters of 2026 and 2025,
Previous wording
We recorded a net loss of $0.36 million and $0.41 million on the sale of securities AFS for the first nine months of 2025 and 2024, respectively. We recorded no credit related charges in either 2025 or 2024 on securities AFS. See “Securities” below and note #3 to the interim Condensed Consolidated Financial Statements.
Current wording
We recorded a net loss of $0.03 million and $0.33 million on the sale of securities AFS for the first three months of 2026 and 2025, respectively. We recorded no credit related charges in either 2026 or 2025 on securities AFS. See “Securities” below and note #3 to the interim Condensed Consolidated Financial Statements.
Previous wording
Mortgage loan servicing, net, generated income (expense) of $0.1 million and $(3.1) million in the third quarters of 2025 and 2024, respectively. For the first nine months of 2025 and 2024, mortgage loan servicing, net, generated income (expense) of $(0.1)million and $1.7 million, respectively. The significant variances in mortgage loan servicing, net are 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 as well as a decline in servicing revenue. The decline in revenue, net in the table below is attributed to the sale of approximately $931 million of mortgage servicing rights on January 31, 2025.
Current wording
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 as well as a decline in servicing revenue. The decline in revenue, net in the table below is attributed to the sale of approximately $931 million of mortgage servicing rights on January 31, 2025.
Previous wording
(1) On January 31, 2025 we sold $931.6 million of mortgage loan servicing rights (26.3% of total servicing portfolio) and transferred the servicing on March 3, 2025. This sale represented approximately $13.1 million (27.9%) of the total capitalized mortgage loan servicing right asset. While there remains a customary hold back of final settlement funds of approximately $0.6 million relating to this transaction, we are not aware of any issues that will have a material impact on this final payment. We have until the first quarter, 2026 to receive this final payment. Transaction expenses relating to this sale were approximately $0.2 million and was expensed during the first quarter of 2025.
Current wording
(1) On January 31, 2025 we sold $931.6 million of mortgage loan servicing rights (26.3% of total servicing portfolio) and transferred the servicing on March 3, 2025. This sale represented approximately $13.1 million (41.5%) of the total capitalized mortgage loan servicing right asset. While there remains a customary hold back of final settlement funds of approximately $0.1 million relating to this transaction, we are not aware of any issues that will have a material impact on this final payment. We expect to receive this payment in the second quarter, 2026. Transaction expenses relating to this sale were approximately $0.2 million and was expensed during the first quarter of 2025.
Previous wording
At September 30, 2025 we were servicing approximately $2.62 billion in mortgage loans for others on which servicing rights have been capitalized. This servicing portfolio had a weighted average coupon rate of 4.49% and a weighted average service fee of approximately 25.6 basis points. Capitalized mortgage loan servicing rights at September 30, 2025 totaled $31.5 million, representing approximately 120.3 basis points on the related amount of mortgage loans serviced for others.
Current wording
At March 31, 2026 we were servicing approximately $2.60 billion in mortgage loans for others on which servicing rights have been capitalized. This servicing portfolio had a weighted average coupon rate of 4.54% and a weighted average service fee of approximately 25.6 basis points. Capitalized mortgage loan servicing rights at March 31, 2026 totaled $32.2 million, representing approximately 124.1 basis points on the related amount of mortgage loans serviced for others.
Previous wording
Other income in the table above decreased by $0.4 million in the third quarter of 2025, as compared to the same prior year period due to lower commercial loan swap fees.
Current wording
Other income in the table above decreased by $0.3 million in the first quarter of 2026, as compared to the same prior year period primarily due to lower commercial loan swap fees.
Previous wording
Non-interest expense increased by $1.5 million to $34.1 million and increased by $4.0 million to $102.2 million during the three- and nine-month periods ended September 30, 2025, respectively, compared to the same periods in 2024.
Current wording
Non-interest expense increased by $4.0 million to $38.3 million during the three-month period ended March 31, 2026, compared to the same period in 2025.
Previous wording
Compensation and employee benefits expenses, in total, increased $1.1 million on a quarterly comparative basis and increased $0.6 million for the first nine months of 2025 compared to the same periods in 2024.
Current wording
Compensation and employee benefits expenses, in total, increased $1.4 million on a quarterly comparative basis.
Previous wording
Compensation expense increased by $0.7 million and $0.8 million in the third quarter and first nine months of 2025, respectively, compared to the same periods in 2024. These comparative increases in 2025 were primarily due to salary increases that were predominantly effective on January 1, 2025, that were partially offset by deferred loan origination costs due in part to higher commercial loan volume and higher per loan costs as well as a decrease in mortgage lending and other retail personnel.
Current wording
Compensation expense increased by $0.9 million in the first quarter of 2026 compared to the same period in 2025. The comparative increase in 2026 was primarily due to salary increases that were predominantly effective on January 1, 2026, higher severance costs and additional commercial lending and support staff that were partially offset by a decrease in mortgage lending and other retail personnel.
Previous wording
Performance-based compensation decreased by $0.5 million and $0.8 million in the third quarter and first nine months of 2025, respectively, compared to the same periods in 2024. The decrease is due in part to lower expected incentive compensation payout for salaried and hourly employees.
Current wording
Performance-based compensation increased by $0.2 million in the first quarter of 2026 compared to the same period in 2025. The increase is due in part to an increase in long term incentive expense.
Previous wording
Payroll taxes and employee benefits increased by $1.0 million and $0.6 million in the third quarter and first nine months of 2025, respectively, compared to the same periods in 2024, due primarily to increases in employee medical insurance costs and retirement costs.
Current wording
Payroll taxes and employee benefits increased by $0.3 million in the first quarter of 2026 compared to the same period in 2025, due primarily to increases in employee medical insurance costs and retirement costs.
Previous wording
Data processing expense increased by $0.4 million and $1.5 million in the third quarter and first nine months of 2025, respectively, compared to the same prior year periods due in part to core data processor annual asset growth and CPI related cost increases as well as new solutions implemented during this time frame.
Current wording
Data processing expense increased by $0.2 million in the first quarter of 2026 compared to the same prior year period due in part to core data processor annual asset growth and CPI related cost increases as well as new solutions implemented during this time frame.
Previous wording
Occupancy, net increased by $0.2 million and $0.5 million in the third quarter and first nine months of 2025, respectively, compared to the same prior year periods due in part to higher snow removal costs, utility costs and higher depreciation expense due to a new location.
Current wording
Occupancy, net increased by $0.2 million in the first quarter of 2026 compared to the same prior year period due in part to higher snow removal costs, utility costs and higher depreciation expense due to a new location.
Previous wording
Income tax expense. We recorded an income tax expense of $3.7 million and $11.0 million in the third quarter and the first nine months of 2025, respectively. This compares to an income tax expense of $3.5 million and $11.9 million in the third quarter and the first nine months of 2024, respectively. The changes in expense for the first nine months of 2025 compared to the same period in 2024 is primarily due to changes in pretax income that was partially offset by an increase in non-taxable income and certain low income housing and solar tax credits.
Current wording
Income tax expense. We recorded an 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 change in expense for the first three months of 2026 compared to the same period in 2025 is primarily due to changes in pretax income that were partially offset by an increase in certain energy tax credits.
Previous wording
Our actual income tax expense is different than the amount computed by applying our statutory income tax rate to our income before income tax primarily due to tax-exempt interest income, tax-exempt income from the increase in the cash surrender value on life insurance, differences in the value of stock awards that vest and stock options that are exercised as compared to the initial fair values that were expensed and certain low income housing and solar tax credits.
Current wording
Our actual income tax expense is different than the amount computed by applying our statutory income tax rate to our income before income tax primarily due to tax-exempt interest income, tax-exempt income from the increase in the cash surrender value on life insurance, differences in the value of stock awards that vest and stock options that are exercised as compared to the initial fair values that were expensed and certain low income housing, solar and energy tax credits.
Previous wording
Summary. Our total assets increased by $155.0 million during the first nine months of 2025. Loans, excluding loans held for sale, were $4.20 billion at September 30, 2025, compared to $4.04 billion at December 31, 2024. Commercial loans and mortgage loans increased while installment loans decreased during the first nine months of 2025. (See “Portfolio Loans and asset quality.”) Securities available for sale and securities held to maturity together totaled $824.0 million at September 30, 2025, a decline of $74.6 million since December 31, 2024.
Current wording
Summary. Our total assets increased by $51.8 million during the first three months of 2026. Loans, excluding loans held for sale, were $4.31 billion at March 31, 2026, compared to $4.28 billion at December 31, 2025. Commercial loans increased while mortgage loans and installment loans decreased during the first three months of 2026. (See “Portfolio Loans and asset quality.”) Securities available for sale and securities held to maturity together totaled $783.3 million at March 31, 2026, a decline of $22.1 million since December 31, 2025.
Previous wording
Deposits totaled $4.86 billion at September 30, 2025, an increase of $205.1 million from December 31, 2024. The increase in deposits from December 31, 2024, is due to increases in savings and interest-bearing checking, reciprocal, time and brokered time deposits that were partially offset by a decrease in non-interest bearing deposits.
Current wording
Deposits totaled $4.88 billion at March 31, 2026, an increase of $119.0 million from December 31, 2025. The increase in deposits from December 31, 2025, is due to increases in savings and interest-bearing checking, reciprocal, and brokered time deposits that were partially offset by decreases in non-interest bearing and time deposits.
Previous wording
On April 1, 2022, we transferred certain securities AFS with an amortized cost and unrealized loss at the date of transfer of $418.1 million and $26.5 million, respectively to securities HTM. The transfer was made at fair value, with the unrealized loss becoming part of the purchase discount which will be accreted over the remaining life of the securities. The other comprehensive loss component is separated from the remaining available for sale securities and is accreted over the remaining life of the securities transferred. Based upon our liquidity and capital resources (as explained in more detail below under "Liquidity and capital resources"), we believe that we have the ability and intent to hold these securities until they mature, at which time we expect to receive full value for these securities.
Current wording
On April 1, 2022, we transferred certain securities AFS with an amortized cost and unrealized loss at the date of transfer of $418.1 million and $26.5 million, respectively to securities HTM. The transfer was made at fair value, with the unrealized loss becoming part of the purchase discount which will be accreted over the remaining life of the securities. The other comprehensive loss component is separated from the remaining available for sale securities and is accreted over the remaining life of the securities transferred. Based upon our liquidity and capital resources (as explained in more detail
Previous wording
Securities AFS in unrealized loss positions are evaluated quarterly for impairment related to credit losses. For securities AFS in an unrealized loss position, we first assess whether we intend to sell, or it is more likely than not that we will be required to sell the security before recovery of its amortized cost basis. If either of the criteria regarding intent or requirement to sell is met, the security’s amortized cost basis is written down to fair value through income. For securities AFS that do not meet this criteria, we evaluate whether the decline in fair value has resulted from credit losses or other factors. In making this assessment, we consider the extent to which fair value is less than amortized cost, adverse conditions specifically related to the security and the issuer and the impact of changes in market interest rates on the market value of the security, among other factors. If this assessment indicates that a credit loss exists, we compare the present value of cash flows expected to be collected from the security with the amortized cost basis of the security. If the present value of cash flows expected to be collected is less than the amortized cost basis for the security, a credit loss exists and an ACL is recorded, limited to the amount that the fair value of the security is less than its amortized cost basis. Any impairment that has not been recorded through an ACL is recognized in other comprehen sive income, net of applicable taxes. No ACL for securities AFS was needed at September 30, 2025. The decrease in unrealized losses during the third quarter and first nine months of 2025 is primarily attributed to a decrease in interest rates since December 31, 2024. See note #3 to the interim Condensed Consolidated Financial Statements included within this report for further discussion.
Current wording
Securities AFS in unrealized loss positions are evaluated quarterly for impairment related to credit losses. For securities AFS in an unrealized loss position, we first assess whether we intend to sell, or it is more likely than not that we will be required to sell the security before recovery of its amortized cost basis. If either of the criteria regarding intent or requirement to sell is met, the security’s amortized cost basis is written down to fair value through income. For securities AFS that do not meet this criteria, we evaluate whether the decline in fair value has resulted from credit losses or other factors. In making this assessment, we consider the extent to which fair value is less than amortized cost, adverse conditions specifically related to the security and the issuer and the impact of changes in market interest rates on the market value of the security, among other factors. If this assessment indicates that a credit loss exists, we compare the present value of cash flows expected to be collected from the security with the amortized cost basis of the security. If the present value of cash flows expected to be collected is less than the amortized cost basis for the security, a credit loss exists and an ACL is recorded, limited to the amount that the fair value of the security is less than its amortized cost basis. Any impairment that has not been recorded through an ACL is recognized in other comprehen sive income (loss), net of applicable taxes. No ACL for securities AFS was needed at March 31, 2026 and December 31, 2025. The increase in unrealized losses during the first three months of 2026 is primarily attributed to an increase in interest rates since December 31, 2025 as well as a general widening of credit spreads during the this period. See note #3 to the interim Condensed Consolidated Financial Statements included within this report for further discussion.
Previous wording
For securities HTM an ACL is maintained at a level which represents our best estimate of expected credit losses. This ACL is a contra asset valuation account that is deducted from the carrying amount of securities HTM to present the net amount expected to be collected. Securities HTM are charged off against the ACL when deemed uncollectible. Adjustments to the ACL are reported in our interim Condensed Consolidated Statements of Operations in provision for credit loss. We measure expected credit losses on securities HTM on a collective basis by major security type with each type sharing similar risk characteristics. With regard to U.S. Government-sponsored agency and mortgage-backed securities (residential and commercial), all these securities are issued by a U.S. government-sponsored entity and have an implicit or explicit government guarantee; therefore, no allowance for credit losses has been recorded for these securities. With regard to obligations of states and political subdivisions, private label-mortgage-backed, corporate and trust preferred securities HTM, we consider (1) issuer bond ratings, (2) long-term historical loss rates for given bond ratings, (3) the financial condition of the issuer, and (4) whether issuers continue to make timely principal and interest payments under the contractual terms of the securities. During the first quarter of 2023, one corporate security (Signature Bank) defaulted resulting in a full charge-off. Subsequent to this security's charge-off, a portion of its fair value had recovered and was subsequently sold during the first quarter of 2024 for $1.1 million during which period we recorded that amount as a recovery to the ACL. See note #3 to the interim Condensed Consolidated Financial Statements included within this report for further discussion.
Current wording
For securities HTM an ACL is maintained at a level which represents our best estimate of expected credit losses. This ACL is a contra asset valuation account that is deducted from the carrying amount of securities HTM to present the net amount expected to be collected. Securities HTM are charged off against the ACL when deemed uncollectible. Adjustments to the ACL are reported in our interim Condensed Consolidated Statements of Operations in provision for credit loss. We measure expected credit losses on securities HTM on a collective basis by major security type with each type sharing similar risk characteristics. With regard to U.S. Government-sponsored agency and mortgage-backed securities (residential and commercial), all these securities are issued by a U.S. government-sponsored entity and have an implicit or explicit government guarantee; therefore, no allowance for credit losses has been recorded for these securities. With regard to obligations of states and political subdivisions, private label-mortgage-backed, corporate and trust preferred securities HTM, we consider (1) issuer bond ratings, (2) long-term historical loss rates for given bond ratings, (3) the financial condition of the issuer, and (4) whether issuers continue to make timely principal and interest payments under the contractual terms of the securities. See note #3 to the interim Condensed Consolidated Financial Statements included within this report for further discussion.
Previous wording
Non-performing loans have increased as a percent of Portfolio Loans since year-end 2024, primarily due to the addition of one commercial real estate loan during the third quarter of 2025. See note #4.
Current wording
Non-performing loans have increased as a percent of Portfolio Loans since year-end 2025, primarily due to the addition of one commercial real estate loan during the first quarter of 2026. See note #4.
Previous wording
Other real estate and repossessed assets totaled $0.59 million and $0.94 million at September 30, 2025, and December 31, 2024, respectively.
Current wording
Other real estate and repossessed assets totaled $0.77 million and $0.90 million at March 31, 2026, and December 31, 2025, respectively.
Previous wording
The following tables reflect activity in our ACL on loans, securities and unfunded lending commitments as well as the allocation of our ACL on loans.
Current wording
The following tables reflect activity in our ACL on loans, securities HTM and unfunded lending commitments as well as the allocation of our ACL on loans.
Previous wording
The ACL increased $3.1 million to $62.5 million at September 30, 2025 from $59.4 million at December 31, 2024, and was equal to 1.49% of total Portfolio Loans at September 30, 2025, compared to 1.47% at December 31, 2024.
Current wording
The ACL increased $0.3 million to $63.7 million at March 31, 2026 from $63.4 million at December 31, 2025, and was equal to 1.48% of total Portfolio Loans at both March 31, 2026 and December 31, 2025.
Previous wording
Deposits totaled $4.86 billion and $4.65 billion at September 30, 2025, and December 31, 2024, respectively. The increase in balances during the first nine months of 2025 is due to increases in savings and interest-bearing checking, reciprocal, time and brokered time deposits that were partially offset by a decrease in non-interest bearing deposits. Reciprocal deposits totaled$981.1 million and$907.0 million at September 30, 2025 and December 31, 2024, respectively. These deposits represent demand, money market and time deposits from our customers that have been placed through IntraFi Network. This service allows our customers to access multi-million dollar FDIC deposit insurance on deposit balances greater than the standard FDIC insurance maximum.
Current wording
Deposits totaled $4.88 billion and $4.76 billion at March 31, 2026, and December 31, 2025, respectively. The increase in balances during the first three months of 2026 is due to increases in savings and interest-bearing checking, reciprocal, and brokered time deposits that were partially offset by decreases in non-interest bearing and time deposits. Reciprocal deposits totaled $1.029 billion and $974.9 million at March 31, 2026 and December 31, 2025, respectively. These deposits represent demand, money market and time deposits from our customers that have been placed through IntraFi Network. This service allows our customers to access multi-million dollar FDIC deposit insurance on deposit balances greater than the standard FDIC insurance maximum.
Showing the first 40 of 57 pairs. Open the source sections for the rest.
Rearranged current paragraphs (1)
Current report — wording carried from elsewhere
below under "Liquidity and capital resources"), we believe that we have the ability and intent to hold these securities until they mature, at which time we expect to receive full value for these securities.
Rearranged previous paragraphs (4)
Previous report — wording carried elsewhere
Average Balances and Tax Equivalent Rates
Previous report — wording carried elsewhere
(1)Interest on tax-exempt loans and securities available for sale is presented on a fully tax equivalent basis assuming a marginal tax rate of 21%.
Previous report — wording carried elsewhere
securities and subordinated debentures are included in our interim Condensed Consolidated Statements of Financial Condition.
Previous report — wording carried elsewhere
or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date.