Executive Summary

Solid quarter: Net income rose 26.7% YoY to $17.5M and diluted EPS was $0.84, with sequential growth in net interest income (+1.7% QoQ) and strong efficiency (58.86%) amid stable underlying NIM after adjusting for sub-debt redemption costs .
Consensus context: S&P Global shows EPS slightly above consensus and a clear revenue beat on their revenue definition; management-reported diluted EPS was $0.84, while Primary EPS actual per S&P Global printed higher, reflecting definitional differences between GAAP diluted vs S&P’s “Primary EPS” construct (see Estimates table) .
Credit remains healthy but watch an idiosyncratic NPA uptick: NPAs/assets rose to 0.38% from 0.16% QoQ due to one commercial relationship; allowance at 1.49% and YTD annualized NCOs of 0.04% remain benign .
Balance sheet momentum: Core (ex‑brokered) deposits grew $148.2M QoQ (13% annualized), loans grew $33.9M (3.2% annualized), and TCE/share increased to $22.29, with sub-debt redemption executed in August and liquidity/capital strong .

What Went Well and What Went Wrong

What Went Well
- NII growth and operating efficiency: Net interest income rose 8.4% YoY and 1.7% QoQ; efficiency ratio improved to 58.86% (vs 62.82% in 3Q24) .
- Core funding and balance sheet: Core deposits (ex‑brokered) increased $148.2M QoQ; total deposits up $205.1M YTD; liquidity lines (FHLB/FRB) of ~$1.62B plus unpledged securities support ample capacity .
- Management tone and NIM resilience: CEO emphasized “continued positive momentum” and stable underlying NIM excluding sub‑debt cost acceleration; CFO expects margin to remain fairly stable even with forecasted cuts, citing asset remix tailwinds (“still tailwind there that we’re really optimistic about”) .
What Went Wrong
- Asset quality optics: Non-performing assets rose to 0.38% of assets (from 0.16% QoQ) due primarily to one commercial relationship migrating to non‑accrual; NPLs/loans rose to 0.48% .
- Mortgage banking softer: Net gains on mortgage loans fell YoY ($1.5M vs $2.2M) on lower margins and volumes; servicing revenue is lower post sale of ~$931M MSRs in Jan 2025 .
- Funding cost mix: Total cost of funds increased 6 bps QoQ to ~1.82%, with CFO noting mix/tiering from municipal inflows drove part of the uptick .

Financial Results

Consensus vs Actual (S&P Global definitions)

Metric	Estimate	Actual	Surprise
EPS (Primary)*	$0.84	$0.86	Beat
Revenue ($) (S&P definition)*	$49.29M	$55.31M	Beat

Company-reported income statement highlights

Metric	Q3 2024	Q2 2025	Q3 2025
Net Interest Income	$41.854M	$44.615M	$45.361M
Non-interest Income	$9.508M	$11.325M	$11.937M
Net Income	$13.810M	$16.877M	$17.502M
EPS – Basic	$0.66	$0.81	$0.85
EPS – Diluted	$0.65	$0.81	$0.84

Margins and returns

Metric	Q3 2024	Q2 2025	Q3 2025
NIM (FTE)	3.37%	3.58%	3.54%
Efficiency Ratio	62.82%	59.67%	58.86%
ROAA	1.04%	1.27%	1.27%
ROAE	12.54%	14.66%	14.57%

Balance sheet and KPIs

Metric	Q2 2025	Q3 2025
Loans (EOP)	$4.164B	$4.198B
Deposits (EOP)	$4.659B	$4.859B
Total Assets (EOP)	$5.419B	$5.493B
TCE/TA	8.16%	8.44%
Tangible Book Value/Share	$21.23	$22.29
NPLs/Loans	0.20%	0.48%
NPAs/Assets	0.16%	0.38%
ACL/Loans	1.47%	1.49%

Select mix and funding (EOP)

Metric	Q3 2025
Deposit mix: Non‑interest bearing / Savings & Interest Checking / Reciprocal / Time / Brokered time	21% / 42% / 20% / 14% / 4%
Loan mix: Commercial / Mortgage / Installment	50% / 36% / 13% (portfolio context)

Dividend

Declared $0.26 per share quarterly dividend, payable Nov 14, 2025 to holders of record Nov 4, 2025 .

Guidance Changes

Metric	Period	Previous Guidance (Jan 2025 outlook)	Current Update (Q3 commentary)	Change
Net Interest Income growth	FY 2025	+8% to +9% YoY	Q3 NII +8.4% YoY; tracking within outlook	Maintained
NIM (FTE) vs FY24	FY 2025	+20–25 bps	Q3 NIM 3.54% vs 3.37% in 3Q24; stable ex sub-debt cost	Maintained (stable)
Loan growth	FY 2025	Mid-single digit (~5–6%) overall; Commercial +9–10%; Mortgage +2–3%; Installment −2–3%	Q3 total loans +3.2% annualized; YTD +5.3% annualized (within range)	Maintained
Provision for credit losses	FY 2025	~0.15%–0.20% of avg loans	Q3 provision 0.19% annualized (within range)	Maintained
Non-interest income (quarterly)	FY 2025	Q3/Q4 $12–$13M per quarter	Q3 $11.9M (slightly below)	Slightly below run-rate
Non-interest expense (quarterly)	FY 2025	$34.5–$35.5M per quarter	Q3 $34.1M (below range)	Better than guidance
Effective tax rate	FY 2025	~19%	Q3 17.3%	Below planned
Share repurchases	2025	Authorization up to 1.1M shares; not modeling repurchases	Repurchased 13,732 shares in Q3 ($0.4M)	Minimal activity

Earnings Call Themes & Trends

Topic	Previous Mentions (Q1 2025 and Q2 2025)	Current Period (Q3 2025)	Trend
NIM trajectory	Q1: +4 bps QoQ to 3.49% ; Q2: +9 bps QoQ to 3.58%	3.54%; stable ex 3 bps sub‑debt cost and higher liquidity	Stabilizing near recent highs
Loan growth focus (C&I)	Q1: loans +3.4% annualized ; Q2: +9.0% annualized	+3.2% annualized; commercial +$57M QoQ; pipeline “robust”	Continued, but moderated
Deposit competition/costs	Q1: modest core growth ; Q2: seasonal core down 1.4% annualized	Core up $148M QoQ; cost of funds +6 bps with municipal mix	Funding mix improved; pricing competitive
Mortgage banking/MSR	Q1: MSR FV headwind (−$1.5M price) ; Q2: MSR net +$0.5M; prior-year equity gains absent	Net +$0.1M; MSR revenue lower post-Jan MSR sale	Lower volatility post-MSRS sale
Credit quality	Q1/Q2: NPAs 0.14–0.16% of assets	NPAs/assets 0.38% on one commercial relationship; NCOs remain low	Largely isolated uptick
Capital & liquidity	Q1/Q2: well-capitalized; TCE rising	Sub-debt redeemed; TCE/TA 8.44%; ample unused FHLB/FRB	Strong, accretive TCE/share

Management Commentary

Strategic message: “I am proud of our team’s performance… We achieved growth in net interest income… I would characterize the NIM as stable when adjusting for [sub-debt redemption]… Expense management remains a strength… ROAA of 1.27% and ROAE of 14.57%” — Brad Kessel, CEO .
Margin outlook: “I do anticipate the margin to be fairly stable… still tailwind [from] remixing and repricing of lower yielding assets” — Gavin Mohr, CFO .
Commercial growth engine: “Another solid quarter of commercial loan growth… mix 58% C&I / 42% investment real estate… pipeline remains robust” — Joel Rahn, EVP Commercial Banking .
Funding dynamics: “For the six basis point [COF] increase… very healthy deposit growth… a lot were municipal tax collections slotting at higher tiers” — Gavin Mohr, CFO .

Q&A Highlights

Talent acquisition: Hired three veteran commercial bankers in SE Michigan, leveraging market consolidation to attract relationship bankers seeking a community-bank model .
NIM path with cuts: CFO expects NIM “fairly stable” even with additional cuts; highlighted ~3 bps sub‑debt cost and ~3 bps excess liquidity drag in Q3; sees ongoing positive remixing tailwind .
Credit optics: The NPA increase is concentrated in “one investment real estate commercial relationship”; management believes it is adequately reserved and is working toward resolution .
Funding costs/competition: Market is competitive; COF up 6 bps QoQ driven by mix/tiers (municipal deposits) .
Spot rate datapoint: Interest‑bearing deposit spot rate at 2.17% as of 9:30 AM (day of call) .

Estimates Context

EPS: S&P Global consensus $0.84*, vs actual $0.86* on their “Primary EPS” basis — a modest beat. Note: Company-reported diluted EPS was $0.84 (GAAP), reflecting definitional differences vs S&P’s primary EPS construct .
Revenue: S&P Global consensus $49.29M*, vs actual $55.31M* — a clear beat. Company-reported components: NII $45.36M and non-interest income $11.94M .
Coverage depth: 5 EPS estimates and 4 revenue estimates; S&P Global target price consensus $35.2* (5 estimates) [GetEstimates].

Values marked with * retrieved from S&P Global.

Key Takeaways for Investors

Earnings quality: Underlying NIM appears stable ex one‑time sub‑debt cost acceleration, with remix/repricing tailwinds cited for 2026 — supportive for sustained core earnings power .
Positive operating leverage: Efficiency ratio improved to 58.86%; non‑interest expense ran below the quarterly guidance range while NII continued to rise .
Credit watch item but contained: A single commercial relationship drove the NPA uptick; ACL/loans at 1.49% and very low YTD annualized NCOs (0.04%) temper risk; monitor resolution cadence and any migration to losses .
Funding momentum: Strong core deposit inflows, improved TCE/share, and sizable contingent liquidity provide flexibility if competition persists or rates move lower .
Mortgage banking reset: Post‑MSR sale revenue run-rate is lower but valuation volatility reduced; mortgage gains moderated — expect steadier but smaller contribution near-term .
2025 outlook intact: NII growth, NIM up YoY, loan growth mid-single digits, and provision guide all tracking within plan; non-interest expense performance is better than guide .
Near-term trading frame: The combination of a revenue/EPS beat on S&P definitions, efficient expense control, and stable margin commentary is supportive; offset by headline NPA increase centered in one relationship [GetEstimates] .

Appendix: Additional Detail

Segment/mix tables

Loans by type (EOP)

Category	12/31/2024	9/30/2025
Commercial	$1.937B	$2.125B
Mortgage	$1.517B	$1.518B
Installment	$0.585B	$0.556B
Total	$4.039B	$4.198B

Asset quality summary

Metric	Q3 2024	Q4 2024	Q2 2025	Q3 2025
NPLs ($)	$5.148M	$6.002M	$8.204M	$20.355M
NPLs/Loans	0.13%	0.15%	0.20%	0.48%
NPAs/Assets	0.11%	0.13%	0.16%	0.38%
ACL/Loans	1.46%	1.47%	1.47%	1.49%

Notable corporate action

Redeemed $40M floating sub notes on Aug 31, 2025; small NIM impact via accelerated unamortized costs in Q3 .

Sources: Company press release and 8‑K exhibits (including supplemental data and presentation deck) and earnings call transcript for Q3 2025; Q1 and Q2 2025 press releases for prior-trend context .

INDEPENDENT BANK CORP /MI/ (IBCP)·Q3 2025 Earnings Summary