Independent Bank Corporation

Good day and thank you for standing by. Welcome to the Independent Bank Corporation third quarter 2026 earning call. At this time, all participants are in listen only mode. After the speaker's presentation, there will be a question and answer session. To ask a question during the session, you will need to press star 11 on your telephone. You'll then need to hear an automated message advising your hand is raised. To withdraw your question, please press star 11 again. Please be advised that today's conference is being recorded. I would now like to hand the conference over to your first speaker today, Brad Kessel, President and CEO.

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 results for the third quarter of 2026. I am Brad Kessel, President and Chief Executive Officer, and joining me is Gavin Mohr, Executive Vice President and Chief Financial Officer, and Joel Rahn, Executive Vice President, Head of Commercial Banking. Before we begin today's call, I'd 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. Earlier this morning, Independent Bank Corporation reported third quarter 2026 net income of $17.9 million or 80 cents per diluted share versus net income of $17.5 million or 84 cents per diluted share in the prior year period. excluding 2.7 million of after-tax merger related expenses. Adjusted net income was 20.6 million or 92 cents per diluted share. Highlights for the third quarter of 2026 include net loan growth of 116.6 million or 10.5% annualized from June 30th, 2026. That excludes the loans of High Point Community Bank. Net growth in total deposits of $115.8 million, or 9.4% annualized from the second quarter, also excluding high point deposits. A tax-equivalent net interest margin of 3.82%, an 11 basis point increase from the linked quarter, or 3.76%, of five basis points, excluding purchase, accounting, accretion. Another highlight was an increase in net interest income of $7.4 million or 15.4% over the second quarter. This is our 13th consecutive quarter of net interest income growth. Our pre-tax, pre-provision net revenue was $26.3 million, up 13.5% from the prior year quarter. A return on average assets and return on average equity of 1.14% and 12.7% respectively, or 1.32% and 14.08% excluding merger related expenses. A tangible common equity ratio of 8.2% as of September 30th, 2026, and also a highlight of the payment of our 28 cent per share quarterly dividend in common stock on August 14th of 2026. Our third quarter performance demonstrates the strength of Independent Bank's community banking model and the continued benefits of disciplined balance sheet management, relationship-based lending, and a stable, locally focused deposit franchise. We saw strong organic momentum with commercial loan growth of nearly 21% annualized, solid deposit growth from our business and municipal customers, and improved earning asset yields. Net charge-offs remained very low and our liquidity and capital levels position us well in the current operating environment. The quarter also reinforced the value of our strategy, serving attractive Michigan markets through local decision-making, deep customer relationships, and consistent credit discipline. We believe that approach continues to differentiate independent bank and supports durable performance through changing rate and economic cycles. We were pleased to complete our acquisition of HCB Financial Corp., the parent company of High Point Community Bank, on July 1st, 2026. And this quarter reflects our first results as a combined company. Integration work is well underway and we remain on track for the High Point system conversion on November 9th. We continue to believe the combination strengthens our presence in complementary markets and enhances our ability to serve customers, employees, and the shareholders and our shareholders over the long term. A few other highlights during the third quarter, we celebrated the grand opening of our new Grand Rapids headquarters and we transitioned the broker dealer partner of our wealth management business to Raymond James. Moving to page five of our presentation, deposits totaled $5.5 billion at September 30th, 2026, an increase of $659.3 million from the second quarter, which includes $543.5 million of High Point deposits. Excluding High Point, deposits grew $115.8 million, or 9% annualized. Non-maturity deposits totaled $4.77 billion, or 86.4% of total deposits, and increased $571.4 million during the quarter, which includes High Point. With the liquidity high point brought, we paid down other borrowings, which declined to just $4 million from $127 million at June 30, 2026. Brokered deposits are just $0.5 million at the end of the third quarter. The deposit base is comprised of 46% retail, 39% commercial, and 15% municipal. On page six, we included in our presentation a historical view of our cost of funds. as compared to the Fed Fund spot rate and Fed effective rate. For the quarter, our total cost of deposits increased by just two basis points to 1.55%, primarily reflecting modestly higher time deposit costs, while our cost of savings and interest-bearing checking accounts were unchanged at 1.6%. This time, I'd like to turn the presentation over to Joel Rahn to share a few comments on our loan growth and provide an update on our credit metrics.

Thanks, Brad, and good morning, everyone. Page seven summarizes our loan activity for the quarter. Loans increased $483.1 million in the quarter, including the addition of the High Point loan portfolio. Excluding High Point, commercial loan generation was very strong, as Brad mentioned, with $123 million in quarterly growth or nearly 21% annually. We continued our strategic investment in commercial banking talent to supplement our loan growth adding three experienced bankers in the quarter. Year to date, we've added 11 experienced commercial bankers bringing our total to 55 bankers comprising eight commercial loan teams across our statewide footprint. Compared to a year ago, we've added a net of nine experienced commercial bankers to the team. Looking forward, our pipeline remains strong, but given the significant production late in Q3, it's down from where it was at 630. However, we feel that we can continue to grow our loan portfolio at a low double digit rate as market disruption is creating market share opportunity for us. Looking at commercial loan production through 930, the mix of C&I lending versus investment real estate has been split evenly. And for our commercial portfolio, the mix is 66% C&I and 34% investment real estate, including the addition of the 280 million high point commercial loan portfolio. Page 8 provides detail on our commercial loan portfolio concentrations, which remain consistent with prior quarters. Our largest segment of the CNI category continues to be manufacturing at $222 million, or 8% of the total portfolio. In the investment real estate segment of the portfolio, the largest concentration is industrial at $257 million, or 9.3%. We outline key credit quality metrics and trends on page 9. Overall, we continue to demonstrate strong credit quality. However, we have experienced an increase in our non-performing loan category. Total non-performing loans were 39.2 million or 80 basis points of total loans at quarter end, up slightly from 74 basis points at 630. It's worth noting that 30 million of this total is commercial and two-thirds of the commercial non-performing loans continues to be one commercial development exposure that we've discussed in previous quarters. We continue to work through the challenges of this particular project and are appropriately reserved for any loss exposure. Past due loans totaled 6.1 million or 12 basis points consistent with 630. It's not reflected on this slide, but worth noting that we realized net charge offs of 847,000 or three basis points of average loans on an annualized basis in the first three quarters of the year. This compares to 1.2 million or four basis points through Q3 of 2025. At this time, I'd like to turn the presentation over to Gavin for his comments, including the outlook for the remainder of 2026.