 GRAND RAPIDS, Mich., July 28, 2020 GLOBE NEWSWIRE -- Independent Bank Corporation NASDAQ: IBCP reported second quarter 2020 net income of 14.8 million, or 0.67 per diluted share, versus net income of 10.7 million, or 0.46 per diluted share, in the prior-year period. For the six months ended June 30, 2020, the Company reported net income of 19.6 million, or 0.88 per diluted share, compared to net income of 20.1 million, or 0.85 per diluted share, in the prior-year period. The increase in second quarter 2020 earnings as compared to 2019 primarily reflects an increase in non-interest income that was partially offset by a decline in net interest income and increases in the provision for loan losses, non-interest expense and income tax expense. The slight decline in year-to-date 2020 earnings as compared to 2019 primarily reflects a decline in net interest income and increases in the provision for loan losses and non-interest expense that were partially offset by an increase in non-interest income and a decrease in income tax expense. Before discussing the 2020 financial results in greater detail, the following is an update on the impact to our organization of the COVID-19 pandemic, which continues to cause significant hardship for many of our customers and communities in a variety of ways. That is especially true for those who have been infected by the virus and suffered through the health issues that it has caused. Our thoughts are with those who have been directly impacted, and we also extend our appreciation to those who have aided and supported them.The Company continues to respond to the challenges of the current environment. Our response was initially formulated during the month of February 2020 as we prepared our infrastructure to allow the majority of our associates to work remotely. In March 2020 we activated our Business Continuity Plan to protect our customers, employees and business. We will continue to take the necessary steps to serve our communities while doing our part to minimize the spread of COVID-19. The following is a brief description of our current initiatives: Customer Safety and Service Levels From mid-March to mid-June we limited our branch lobbies to appointment only and kept drive-through windows open. In mid-June our bank branch lobbies fully reopened. With the ability to use drive through service, ATMs or our electronic banking solutions there was minimal disruption to customers. In addition, our flexible operating network allowed us to efficiently redeploy our associates, as necessary, to high volume areas to fulfill customer requests into our call center, requests for consumer and commercial loan payment relief and mortgage financing requests. Employee Safety For employees that are in our bank branches servicing our customers, we have expanded sick and vacation time. All non-branch employees either have the option or are required to work remotely. We currently have approximately 40 of our total staff working remotely every day. We have installed customer friendly shields throughout our delivery network and have implemented a variety of other protective processes to put both customers and staff at ease. We continue to comply with the Governor of Michigans Safe at Home executive orders and MI Safe Start Plan as they apply to our business. Loan Forbearances We have forbearance programs in place to proactively work with our customers who have experienced financial difficulty due to the COVID-19 pandemic. As of June 30, 2020 we had active forbearance agreements with 259 commercial customers with 210.5 million in loans, 668 retail mortgage and installment loan customers with 88.7 million in loans, and 773 customers with 114.8 million within our mortgage loans sold and serviced for others. These dollar amounts represent 15.4, 5.9 and 4.2 of the related total loan portfolio balances. As of July 23, 2020 the active forbearance agreements had changed as follows: 260 commercial customers with 211.8 million in loans, 524 retail customers with 71.0 million in loans, and 639 customers with 98.2 million within our mortgage loans sold and serviced for others. The level of these loans are down after peaking in mid-June 2020, as many customers economic situations have improved, allowing them to pay their loans current. The forbearance terms are flexible enough to meet the specific needs of each customer, while protecting the safety and soundness of the Company. U.S. Small Business Administration SBA Payroll Protection Program PPP Our response, and focus on this vital program, shows our commitment to the communities we serve. We built an effective process to manage the high volume of applications that we received and processed. Customer demand for this program was extraordinary. As of June 30, 2020, we had 2,012 PPP loans outstanding with a total balance of 259.4 million. The average balance of PPP loans in the second quarter of 2020 was 191.1 million with an average yield of 3.05 including the accretion of approximately 1.0 million of net fees. The PPP loan portfolio reduced the average yield on interest-earning assets by an estimated 0.04 in the second quarter of 2020. At June 30, 2020, there was 7.7 million of remaining unaccreted net fees related to PPP loans. These net fees are expected to be accreted into interest income over the next 20 months and the pace of such accretion will depend on payment activity including loan forgiveness within the PPP loan portfolio. The PPP has been extended to August 8, 2020. We have received approximately 35 forgiveness applications that will be submitted once the SBA Forgiveness portal is activated. Federal Reserve Main Street Lending Program MSLP We submitted an application and were approved as a MSLP lender. This program is designed to support small and medium-sized businesses that were in sound financial condition before the COVID-19 pandemic. U.S. businesses may be eligible for MSLP loans if they meet either of the following conditions: 1 the business has 15,000 employees or fewer; or 2 the business had 2019 revenues of 5 billion or less. As of July 14, 2020 we had received three loan applications under the MSLP.Significant items impacting comparable quarterly and year to date 2020 and 2019 results include the following: Changes in the fair value due to price of capitalized mortgage loan servicing rights the MSR Changes of a negative 2.9 million 0.10 per diluted share, after taxes and a negative 8.9 million 0.31 per diluted share, after taxes for the three- and six-months ended June 30, 2020, respectively, as compared to a negative 2.7 million 0.09 per diluted share, after taxes and a negative 4.9 million 0.16 per diluted share, after taxes for the three- and six-months ended June 30, 2019, respectively. Approximately 0.76 million 0.03 per diluted share, after taxes and 0.82 million 0.03 per diluted share, after taxes of expenses related to a pending data processing conversion and bank branch closures as described further below under Operating Results for the three- and six-months ended June 30, 2020, respectivelySecond quarter 2020 highlights include: Increases in net income and diluted earnings per share of 37.7 and 45.7, respectively, compared to 2019; Return on average assets and return on average equity of 1.54 and 17.39, respectively; Net gains on mortgage loans of 17.6 million up 310.1 over 2019 and total mortgage loan origination volume of 470.6 million; Total portfolio loan net growth of 148.5 million; Deposit net growth of 401.6 million; The issuance of 40.0 million of subordinated debt in May 2020; Continued strong asset quality metrics; and The payment of a 20 cent per share dividend on common stock on May 15, 2020.William B. Brad Kessel, the President and Chief Executive Officer of Independent Bank Corporation, commented: We are pleased to report a very strong financial performance in the second quarter of 2020 despite the many challenges brought on by the COVID-19 pandemic. Our associates did an amazing job during the quarter! We closed nearly one-half billion dollars of mortgage loans, helping our customers buy new homes or refinance existing mortgage loans. We closed over 250 million of PPP loans, helping our customers keep their employees on the payroll and their businesses operating. We actively administered over 1,700 loan forbearance plans to help our business and retail customers who have been adversely impacted by the COVID-19 pandemic. We continued to effectively operate our Business Continuity Plan to safely serve our customers and protect our employees. Finally, we maintained solid asset quality metrics during the second quarter of 2020. As we look ahead to the last half of 2020 and beyond, we are mindful of the ongoing challenges from the COVID-19 pandemic, but we are confident of our continued ability to effectively respond to these challenges and remain optimistic about our future.Operating ResultsThe Companys net interest income totaled 30.5 million during the second quarter of 2020, a decrease of 0.3 million, or 1.0 from the year-ago period, but up 0.3 million, or 0.9, from the first quarter of 2020. The Companys tax equivalent net interest income as a percent of average interest-earning assets the net interest margin was 3.36 during the second quarter of 2020, compared to 3.87 in the year-ago period, and 3.63 in the first quarter of 2020. The year-over-year quarterly decrease in net interest income is due to a decline in the net interest margin that was partially offset by an increase in average interest-earning assets. Average interest-earning assets were 3. 