Independent Bank Corporation

will be your coordinator for today. If you would like to ask a question, please press star followed by one on your telephone keypad. If you change your mind, please press star followed by two. We will be taking questions after the prepared remarks. I will now hand over to our host, Brad Kessel, President and CEO to begin. Please go ahead.

Good morning and welcome to today's call. Thank you for joining us for Independent Bank Corporation's conference call and webcast to discuss the company's second quarter 2025 results. I am Brad Kessel, President and Chief Executive Officer and joining me is Gavin Moore, EVP and Chief Financial Officer and Joel Ron, EVP Commercial Banking. Before we begin today's call, I would like to direct you to the important information on page two of our presentation, specifically the cautionary note regarding forward-looking statements. If anyone does not already have a copy of the press release issued by us today, you can access it at the company's website, independentbank.com. The agenda for today's call will include prepared remarks followed by a question and answer session and then closing remarks. I am pleased to report our solid second quarter results as we advance our mission of inspiring financial independence today with tomorrow in mind. Our vision is a future where people approach their finances with confidence, clarity and the determination to succeed. Our core values of courage, drive, integrity, people focused and teamwork are the blueprint our employees live by. We strive to be Michigan's most people focused bank. Today, Independent Bank Corporation reported second quarter 2025 net income of $16.9 million or 81 cents per diluted share versus net income of $18.5 million or 88 cents per diluted share in the prior year period. Significant items impacting comparable second quarter 25 and 24 results include the following. Changes in the fair value due to price of capitalized mortgage loan servicing rights was a loss of 0.2 million or one penny per diluted share after tax for the three months ending June 30, 25 as compared to 0.9 million or three cents per diluted share after tax gain for the three month period, June 30, 2024. Also a gain on equity securities at fair value of $2.7 million or 10 cents per diluted share after tax in the second quarter of June 30, 24 attributable to the exchange of our visa class B1 common stack. No gain or loss in equity securities at fair value was recorded in the second quarter of 25. I'm very proud of our team and pleased to see us continue our positive trends with our second quarter 25 results. Overall loans increased by 9% annualized while core deposits were down .4% annualized due to seasonality. We generated net interest income growth on both a linked quarter basis and a year over year quarterly basis producing nine basis points of margin expansion from the prior quarter. Our expenses are well managed and we continue to see improved operational scale from strategic investments made in recent years. The fundamentals, these fundamentals through a positive growth and tangible common equity per share of common stock .8% compared to the prior year quarter along with very healthy performance returns. So return on average assets of .27% and a return on average equity of 14.66%. Despite heightened uncertainty in the markets during the quarter, our credit metrics remain strong with low levels of watch credits, 16 basis points of non-performing assets to total assets and two basis points in net charge-offs to average loans of the quarter annualized. The allowance for credit losses was .47% of total loans. Our team has been effective in many areas during the first half of 25, including business development from the existing customer base and onboarding new relationships which have enhanced the geographic and product line diversification of our business. We continue to succeed in recruiting talented bankers to join the independent bank team. During the second quarter, we rolled out several new technologies to make banking easier for both our customers and associates serving our customers. For all these reasons, I am optimistic about our prospects for growth for the balance of 25 and into 26. Moving to page five of our presentation, total deposits as of June 30, 25 were 4.7 billion. Overall core deposits decreased 15.7 million during the second quarter of 25. On a link quarter basis, retail deposits were down 13.8 million. Business deposits were up by 60.5 million and municipal deposits decreased by 64 million. Our sales team continues to bring in new relationships well below our wholesale cost of funds. On page six, we have included in our presentation a historical view of our cost of funds as compared to the Fed funds spot rate and Fed effective rate. For the quarter, our total cost of funds declined by four basis points to 1.76%. At this time, I'd like to turn the presentation over to Joel Ron to share a few comments on the success we're having in growing our loan portfolios and provide an update on our credit metrics. Joel.

Yeah, thanks, Brad and good morning, everyone. On page seven, we share an update on loan activity for the quarter. We continued to experience solid loan growth in the second quarter with total loans growing by 91.7 million or 9% annualized. Commercial loan generation was strong, resulting in 75.8 million of quarterly growth, .3% on an annualized basis. Our residential mortgage portfolio grew by 15.6 million and our installment loan portfolio was up slightly for the quarter. Our continued strategic investment in commercial banking talent continues to supplement our loan growth. We added three experienced commercial bankers in the second quarter, bringing our team to 50 bankers across our statewide footprint. Our staff additions include launching a new LPO in Kalamazoo. We're very excited to have a commercial presence in that market. Looking ahead, we believe we will continue low double digit growth of our commercial loan portfolio in the second half of the year based upon a strong pipeline. We continue to see market share opportunities from regional banks and are seeing some uptick in organic growth from our existing customers. As noted in previous quarters, our new loan production in all categories continues to come on at yields well above the respective portfolio yield. Looking at the commercial loan production activity on a year to date basis, the mix of CNI lending versus investment real estate is 59% and 41% respectively. For our commercial portfolio, our mix is 70% CNI and 30% IRE. Page eight provides detail on our commercial loan portfolio concentrations. There's not been any significant shift in our portfolio and the portfolio continues to be very well diversified. Our largest segment of the CNI category is manufacturing at 184 million or .9% of the total portfolio. It's worth noting that within the manufacturing segment is 157 million of automotive industry exposure that we're monitoring closely for any tariff related impact. To date, the impact has been nominal. Key credit quality metrics and trends are outlined on page nine. Overall credit quality continues to be excellent as Brad said. Total non-performing loans were 8.2 million or 20 basis points of total loans at quarter end up slightly from 17 basis points at 331. Past due loans totaled 6.6 million or 16 basis points also up slightly from 10 basis points at 331. It's not reflected on the slide and Brad mentioned just a moment ago, but it's worth noting that our year to date charge off are $442,000 or two basis points of average loans on an annualized basis. At this time, I'd like to turn the presentation over to Gavin for his comments, including the outlook for the remainder of the year.