• Net Income (Q4 2024): $18.5 million or $0.87 per diluted share.
• Net Income (Full Year 2024): $66.8 million or $3.16 per diluted share.
• Loan Portfolio Growth (Q4 2024): 10% annualized growth rate.
• Commercial Loan Portfolio Growth (Q4 2024): 24% annualized growth rate.
• Net Interest Income Increase (Q4 2024): $1 million increase.
• Net Interest Margin (Q4 2024): 3.45%.
• Total Loan Growth (2024): 7%.
• Core Deposit Growth (2024): 5%.
• Return on Average Assets (2024): 1.27%.
• Return on Average Equity (2024): 15.66%.
• Earnings Per Share Growth (2024): 13%.
• Tangible Book Value Per Share Growth (2024): 13%.
• Total Deposits (Dec 31, 2024): $4.7 billion.
• Retail Deposits Increase (Q4 2024): $52 million.
• Business Deposits Decline (Q4 2024): $67 million.
• Municipal Deposits Decline (Q4 2024): $24 million.
• Total Cost of Funds (Q4 2024): Decreased by 18 basis points to 1.92%.
• Total Loans Growth (Q4 2024): $96.5 million or 9.7% annualized rate.
• Commercial Loan Growth (Q4 2024): $112.1 million.
• Mortgage Loan Growth (Q4 2024): $5.3 million.
• Installment Loan Portfolio Decline (Q4 2024): $20.9 million.
• Nonperforming Loans (Q4 2024): $6 million or 15 basis points of total loans.
• Past Due Loans (Q4 2024): $7 million or 17 basis points.
• Net Charge Offs (2024): Two basis points of average loans.
• Net Interest Income Increase (Year-over-Year): $2.7 million.
• Noninterest Income (Q4 2024): $19.1 million.
• Noninterest Expense (Q4 2024): $37 million.
• Effective Income Tax Rate (Q4 2024): 18.9%.

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Release Date: January 23, 2025

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Positive Points

• Independent Bank Corp (Ionia MI) (NASDAQ:IBCP) reported a significant increase in net income for Q4 2024, reaching $18.5 million compared to $13.7 million in the prior year period.
• The company achieved a notable 10% annualized growth rate in its loan portfolio for Q4 2024, driven by a 24% growth in the commercial loan portfolio.
• Net interest income increased by $1 million for the quarter, contributing to a healthy net interest margin of 3.45%.
• The company reported strong credit metrics with nonperforming assets near historic lows.
• The Board of Directors approved an 8% increase in the quarterly dividend, marking the 12th consecutive annual increase for shareholders.

Negative Points

• Total core deposits decreased by $43 million during Q4 2024, despite an overall increase for the year.
• Business deposits declined by $67 million and municipal deposits by $24 million in the fourth quarter.
• The installment loan portfolio declined by $20.9 million in Q4 2024, primarily due to seasonality.
• Noninterest expense increased to $37 million in Q4 2024, higher than the forecasted range.
• The company did not repurchase any shares in Q4 2024 or for the full year.

Q & A Highlights

Q: Can you discuss the opportunities for adding commercial bankers in 2025, especially considering M&A disruptions in your markets? A: Brad Kessel, President and CEO, mentioned that they have been consistently recruiting individual bankers and see continued opportunities due to market disruptions. Joel Rahn, EVP and Head of Commercial Banking, added that they plan to maintain the current pace of adding talent, having already added an experienced banker this year.

Q: How do you expect the net interest margin to expand throughout 2025, and where do you see it exiting the year? A: Gavin Mohr, CFO, stated that they expect a full-year expansion in the net interest margin by 20 to 25 basis points over 2024, with a ratable increase throughout the year.

Q: Given the momentum in commercial loans, should we expect even growth throughout the year or a pattern similar to last year? A: Joel Rahn explained that while the first quarter is typically softer, growth should be relatively even throughout the year. Last year's second quarter was unusual due to large payoffs, but production was smooth overall.

Q: If there are no Fed rate cuts in 2025, can asset yields still outpace liability costs to allow for margin expansion? A: Gavin Mohr indicated that if the Fed does not cut rates, the margin could decline by 3 to 5 basis points compared to their current outlook, assuming all other factors remain constant.

Q: What are your expectations for deposit growth, and how do you plan to fund the mid-single-digit loan growth? A: Gavin Mohr stated they are targeting core deposit growth of around 3% for the year, slightly less than 2024, with total deposits expected to increase by about 1.5 to 2%.

For the complete transcript of the earnings call, please refer to the full earnings call transcript.