Independent Bank (IBCP) Q2 2026 Earnings Call Transcript

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DATE

Thursday, July 23, 2026 at 11:00 a.m. ET

CALL PARTICIPANTS

• President and Chief Executive Officer - William Bradford Kessel
• Executive Vice President and Chief Financial Officer - Gavin A. Mohr
• Executive Vice President and Head of Commercial Banking - Joel F. Rahn

TAKEAWAYS

• Net Income -- $18.8 million, increasing from $16.9 million reported in the prior-year period.
• Net Interest Margin -- 3.71%, a 6 basis point increase from the first quarter of 2026.
• Loan Growth -- $106 million, representing 9.8% annualized growth driven by strong commercial production.
• Commercial Loan Growth -- $92.6 million, growing 16% annualized during the quarter.
• Total Deposits -- $4.9 billion, representing a $100 million increase from the start of the year.
• Tangible Common Equity Ratio -- 8.9% at June 30, 2026, compared to 8.7% at the end of the first quarter.
• Return on Average Assets -- 1.37% for the quarter ended June 30, 2026.
• Return on Average Equity -- 14.52% for the second quarter.
• Cost of Funds -- 1.53%, reflecting a decrease of 1 basis point from the prior quarter.
• Nonperforming Loans -- $32.8 million, or 74 basis points of total loans, with approximately two-thirds related to a single commercial development project.
• Noninterest Income -- $15.3 million, exceeding the management forecast range of $11.3 million to $12.3 million.
• Noninterest Expense -- $37.8 million, which included $4.4 million in merger-related costs and $400,000 in litigation expenses.
• Commercial Banking Headcount -- 53 experienced commercial bankers across eight teams, following the addition of eight bankers year to date.
• Commercial Loan Yield -- 6.06% for the total portfolio, while the yield on new commercial originations averaged 6.41%.
• Past Due Loans -- $5.6 million, or 13 basis points of total loans, down from $8.2 million or 19 basis points at March 31, 2026.
• Net Charge-Offs -- $633,000 for the first half of 2026, representing 3 basis points of average loans.
• Business Deposits -- $66 million increase on a linked quarter basis, partially offset by a $45 million seasonal decline in municipal deposits.
• Average Interest-Earning Assets -- $5.33 billion in the second quarter of 2026, up from $5.23 billion in the first quarter.
• Visa Equity Gain -- $1.6 million, resulting from the exchange of Visa B2 shares to Visa Class C shares during the quarter.
• Mortgage Loan Originations -- $145 million, with sales totaling $97.1 million and gains of $1.3 million.
• Mortgage Loan Servicing -- $2.5 million gain, compared to a gain of $500,000 in the prior-year quarter.
• Core Deposit Growth -- $38.2 million, or 3.2% annualized, when excluding brokered time deposits.
• Effective Tax Rate -- 17.2% for the second quarter of 2026.
• Share Repurchases -- zero shares were repurchased during the first six months of 2026.
• Regulatory Capital -- The bank reported that its capital levels remained significantly above well-capitalized minimums.

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RISKS

• Rahn stated, "It is a legal process and it just always moves slower than we want it to move," regarding the resolution of a large commercial development project that constitutes two-thirds of the bank's nonperforming loans.
• Mohr noted, "Noninterest expense was $37.8 million in the second quarter, above our forecasted range of $36 million to $37 million," citing litigation expenses and merger-related costs.

SUMMARY

Independent Bank Corporation (NASDAQ:IBCP) reported second quarter results characterized by commercial loan expansion and margin improvement within its Michigan-focused community banking model. Management highlighted the closing of the HCB Financial Corp. acquisition on July 1, 2026, with full integration and a 40% cost savings realization expected by early 2027. The company maintained disciplined balance sheet management, focusing on remixing earning assets from lower-yielding investments into commercial loans to sustain net interest margin growth. Credit quality remained stable despite an increase in nonperforming loans tied to a specific commercial project, while capital levels strengthened through internal capital generation and earnings retention.

• President Kessel noted the company was named Michigan's best in state bank by Forbes for 2026, marking the fourth consecutive year for the recognition.
• Executive Vice President Mohr projected net interest margin expansion of 2 to 4 basis points per quarter for the remainder of 2026, supported by the remixing of mortgage and security portfolios into the commercial pipeline.
• Head of Commercial Banking Rahn identified the nonperforming loan increase as a localized issue, stating that approximately two-thirds of the exposure is "one commercial development project" that the bank is working through via legal processes.
• The company established a new leadership structure by creating two regional president roles to manage market-level relationship development and strategic execution.
• Management reported that the integration of HCB Financial Corp. will involve running the entities as separate subsidiaries until a system conversion scheduled for Nov. 9.
• Commercial loan production in the first half of 2026 consisted of 58% commercial and industrial lending and 42% investment real estate.
• Executive Vice President Mohr reported that the company's interest rate risk position is closely matched for smaller rate changes of plus or minus 100 basis points.

INDUSTRY GLOSSARY

• C and I: Commercial and Industrial loans, typically made to businesses for working capital or capital expenditures rather than real estate.
• Net Interest Margin: A ratio that measures the difference between interest income generated and the amount of interest paid out to lenders, relative to the amount of interest-earning assets.
• Reciprocal Deposits: A service allowing bank customers to receive FDIC insurance on large deposits by distributing funds across a network of other banks.
• Tangible Common Equity Ratio: A measure of a bank's capital adequacy that evaluates its core equity capital against its total tangible assets.

Full Conference Call Transcript

Operator: Good day, and thank you for standing by. Welcome to the Independent Bank Corporation Second Quarter 26 Earnings Call. At this time, participants are in a listen-only mode. After the speakers' presentation, there will be a Q&A session. To ask a question during the session, you will need to press *11 on your telephone. You will then hear an automated message device when your hand is raised. To withdraw your question, please press *11 again. Please be advised today's conference is being recorded. I would now like to hand the conference over to your speaker today, President and CEO, Brad Kessel. Please go ahead.

William Bradford Kessel: Good morning, and welcome to today's call. Thank you for joining us Independent Bank Corporation's conference call and webcast to discuss the company's results for the second quarter of 26. I am Brad Kessel, President and Chief Executive Officer. Joining me is Gavin A. Mohr, executive vice president and our chief financial officer. and Joel Rahn, executive vice president and head of commercial banking. Before we begin today's call, I would like to direct you to important information on page 2 of our presentations. 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 Q&A session, and then closing remarks. Earlier this morning, Independent Bank Corporation reported second quarter 26 net income of $18.8 million per diluted share, versus net income of $16.9 million or $0.81 per diluted share in the prior year period. Highlights for the second quarter of 26 include net interest margin of 3.71%, 6 basis point increase from the linked quarter. An increase in net interest income of $1 million or 2.2% over the first quarter of 26. An increase in tangible common equity per share of common stock of $0.86, or 14.8% annualized from 03/31/2026.

A return on average assets and a return on average equity of 1.37% and 14.52%, respectively, For the quarter ended June 30, 2026. Net growth in total deposits less brokered time of $38.2 million or 3.2% annualized. Net loan growth of $106 million or 9.8% annualized. An increase in tangible common equity to 8.9% at 06/30/2026. And the payment of our 28 cents per share quarterly dividend on common stock on 05/14/2026. Our second quarter performance demonstrates the strength 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 broad based momentum across the business, with core customer activity supporting loan growth, core deposit growth, improving earning asset yields and continued capital generation. Just as important, we achieved these results while maintaining strong asset quality. Prudent liquidity, and capital levels that 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. On 07/01/2026. Integration work is underway, with a targeted system conversion of November 9.

We continue to believe the combination strengthens our presence in complementary markets and enhances our ability to serve customers employees, communities, and our shareholders over the long term. A few other highlights during the second quarter included Independent Bank being named Michigan's best in state bank by Forbes for 2026. Independent Bank is the only bank in Michigan that has been recognized by Forbes 4 years in a row. This also marks our 6th time overall that Independent has received this prestigious recognition. During the quarter, we announced the creation of 2 new regional president roles within our commercial banking structure, reinforcing our commitment to strong local leadership, relationship-based growth, and continued service to customers and communities across Michigan.

This new leadership structure reflects our intentional alignment of markets, teams, and strategic priorities as the organization continues to grow. In their new roles, Kyle Johns and Daniel Plummer will lead market level relationship development, strengthen community engagement, foster collaboration across business lines, and help ensure consistent execution of our strategic goals. I am also proud to share that Independent Bank remains a top lender and resource for small business owners and entrepreneurs with our experienced lending team available to help eligible business access financing through the US Small Business Administration loan programs.

As a member of the SBA's preferred lenders program, independent Bank has delegated authority to process and approve eligible SBA loan requests in house helping streamline the financing process for borrowers. Independent Bank was recently honored by the SBA Michigan district office as a top 10 lender for its outstanding contributions and support of Michigan small business community during fiscal year 25. Moving to page 5 of our presentation, deposits totaled $4.9 billion at 06/30/2026. An increase of $100 million from the start of the year. This growth occurred in non interest bearing, saving and interest bearing checking and reciprocal deposits offset by a small decline in time deposits and an $18 million reduction in brokered deposits.

On a linked quarter basis, business deposits increased by $66 million, retail deposits increased by $15 million offset by a $45 million decrease in municipal deposits, primarily due to seasonality and usage of 47% retail, 40% commercial, and 13% municipal. On page 6, 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 decreased by 1 basis point to 1.53%.

At this time, I would like to turn the presentation over to Joel Rahn to share a few comments on the success we are having in growing our loan portfolios and provide an update on our credit metrics. Joel?

Joel F. Rahn: Yeah. Thanks, Brad. Good morning, everyone. Page 7 summarizes our loan activity for this quarter. We experienced strong second quarter loan growth of $105 million or 9.8% annualized. Commercial loan generation was very strong. With $92.6 million of quarterly growth or 16% annualized. During the quarter, our residential mortgage and consumer installment loan portfolios increased 12.9 million and $200 thousand respectively. Year to date, we have grown loans of $138 million by strong commercial loan growth of $146 million. Representing 13% annualized growth. Our strategic investment in commercial banking talent continues to supplement our loan growth.

Year to date, we have added 8 experienced commercial bankers, bringing our total to 53 bankers comprising 8 commercial loan teams across our statewide footprint. Compared to a year ago, we have added a net of 6 experienced commercial bankers to our team. Looking ahead, based on a strong pipeline, we believe we will continue to see low-double-digit growth of our commercial loan portfolio for 2026. We continue to see market share opportunities from regional banks in both talent and customer acquisition, and are seeing steady organic growth from existing customers. Looking at the commercial loan production for the first half of the year, the mix of C and I lending versus investment real estate was 58% and 42%, respectively.

And for our commercial portfolio, the mix is 67% c and I and 33% investment real estate. Page 8 provides detail on our commercial loan portfolio concentrations. And there has not been any significant shift in our portfolio over the past year. With the portfolio remaining very well diversified. Our largest segment of the C and I category continues to be manufacturing, $194 million or 8.2% of the total portfolio. In the investment real estate segment of the portfolio, the largest concentration is industrial at $219 million or 9.3%. We outlined key credit quality metrics on page 9. Overall, we continue to demonstrate, as Brad said, strong credit quality.

Total nonperforming loans were $32.8 million or 74 basis points of total loans at quarter end,, up slightly from 64 basis points at March 31. it is worth noting that approximately 2/3 of the total commercial development exposure that we have discussed in prior quarters. We continue to work through the challenges of this particular project, and are appropriately reserved for any loss exposure. Past due loans totaled $5.6 million or 13 basis points down from $8.2 million or 19 basis points at threethirty 1. it is not reflected on this slide, but also worth noting that we realized net charge offs of $633 thousand or 3 basis points of average loans for the first half of the year.

This compares to $442 thousand or 2 basis points in the first half of 2025. At this time, I would like to turn the presentation over to Gavin for his comments, including the outlook for the remainder of 2026.

Gavin A. Mohr: Thanks, Joel, and good morning, everyone. I am starting on Page 10 of our presentation. Page 10 highlights our strong capital our strong regulatory capital position. I would highlight the increase in our tangible common equity ratio to 8.9% Turning to page 11, Net interest income increased $3.3 million from the year ago period. Our tax equivalent net interest margin was 3.71%. During the second quarter, 2026 compared to 3.58% in the second quarter of 25 and up 6 basis points from the first quarter of 26 Average interest earning assets were $5.33 billion in the second quarter of 26 compared to $5.11 billion in the year ago quarter and $5.23 billion in the first quarter of this year.

Page 12 contains a more detailed analysis of the linked quarter increase in net interest income and the net interest margin. On a linked quarter basis, our second quarter 2026 net interest margin was positively impacted by 3 factors. Change in earning asset mix contributed 3 basis points An increase in earning asset yield contributed 2 basis points and a decrease in funding cost contributed 1 basis point. On page 13, we provide details on the institution's interest rate risk position.

The comparative simulation analysis for the second quarter 26 and the first quarter of 2026 calculates the change in net interest income over the next 12 months on under 5 rate scenarios All scenarios assume a static balance sheet The base rate scenario applies spot. Yield curve from the valuation date. The shock scenario is considered immediate, permanent, parallel rate changes. The base case modeled in II is slightly higher during the quarter due to $60 million of earning asset growth 5 basis points of model margin expansion, Earning asset expansion was centered in commercial loans. It was up 97 million. Run off and lower yielding investments and overnight liquidity helped fund earning asset growth.

Asset and liability yields were slightly higher during the quarter but that asset yields up 8 basis points and liability costs 3 basis points higher. NII sensitivity to lower rates declined modestly while the benefit to higher rates remain largely unchanged. Reduced exposure to lower rates is due to a $50 million notion notional floor purchases, and termination of $50 million of pay fixed swaps, overall position is closely matched for smaller rate changes of plus or minus 100 basis points. The bank has modest exposure to larger rate declines, and benefits from larger rate increases. Currently, 37.9% of assets repriced in 1 month and 49.4% repriced in the next 12 months. Moving on to page 14.

Noninterest income totaled $15.3 million in the second quarter of 2026, as compared to $11.3 million in the year ago quarter and $12 million in the first quarter of 26. Second quarter 26 net gains on mortgage loans sold $1.7 million compared to $1.6 million in the prior year quarter. The increase is primarily due to higher volume of mortgage loans sold that were partially offset by lower profit margins Mortgage loan servicing was a gain of $2.5 million in the second quarter of 2026 compared to a gain of $500 thousand in the prior year quarter.

The change due to price was a gain of $1.8 million or $0.07 per diluted share after tax in the second quarter of 26 compared to a loss of $2 million or $0.01 per diluted share after tax in the prior year period. As detailed on page 15, our noninterest expense totaled $37.8 million in the second quarter of 26. Compared to $33.8 million in the year ago quarter and $38.3 million in the first quarter of 26. Compensation and employee benefits expense increased 1.4 million primarily due to salary increases that were effective on 01/01/2026 and higher health insurance related cost. Litigation expense of $400 thousand is attributed to an accrual established for losses we consider probable.

As a result of all of our outstanding litigation matters in the aggregate. Advertising expense increased $300 thousand in the second quarter of 26 compared to the prior year quarter, primarily due to new deposit account opening incentives We recorded merger related expenses of $4.4 million in the second quarter of 26. Turning to page 16 is our update for 2026 outlook to see how our actual performance during the second quarter compared to the original outlook that we provided in January of this year. Our outlook estimated full year loan growth of 4.5 to 5.5%. Loans increased a $106 million in the second quarter of 26, or 9.8% annualized, which is above our forecasted range.

Commercial loans increased 92.6 million and mortgage loans increased 12.9 million while installment loans were flat for the second quarter. Second quarter 26 net interest income increased by 7.4% over 2025. Which is within our forecasted range of 7% to 8%. I would highlight this is the 12th consecutive quarter of increasing net interest income. The net interest margin was 3.71% for the current quarter and 3.58% for the prior year quarter. And up 6 basis points from our linked quarter. Perspective. The second quarter 26 provision for credit losses was an expense of $2.7 million. Is at the high end of our forecasted range. Moving on to page 17.

Noninterest income totaled $15.3 million in the second quarter of 26, which was above our forecasted range of $11.3 million to $12.3 million Second quarter 26 mortgage loan origination sales and gains totaled $145 million, $97.1 million and $1.3 million respectively. Mortgage loan servicing net generated a gain of 2.5 million in the second quarter of 26, which is above our forecasted target. Positively impacting the second quarter results was a gain on equity securities of $1.6 million This is related to the exchange of Visa B2 shares to Visa Class C shares in the quarter. Noninterest expense was $37.8 million in the second quarter, above our forecasted range of $36 million to $37 million.

We recorded litigation expense of $4.4 million in the quarter, as well as $400 thousand in merger related costs. Our effective income tax rate was 17.2% for the second quarter of 26 Lastly, there were no shares of common stock were repurchased in the second quarter or first 6 months of 26. That concludes my prepared remarks, and I would like to now turn the call back over to Brad.

William Bradford Kessel: Thanks, Gavin. We have built a strong community bank franchise, which positions us well to effectively manage through a variety of economic environments to continue delivering strong and consistent results for our shareholders. As we move through the second half of 26, our focus will be continuing to invest in our team investing in and leveraging our technology, and the successful integration of the HCB franchise, while always working to be Michigan's most people focused bank. At this point, we would like to open up the call for questions.

Operator: Thank you. Press 11 on your telephone. If your question has been answered or you wish to remove yourself from the Our first question comes from Brendan Nosal with Hovde Group. Your line is open.

Brendan Nosal: Hey. Good morning, everybody. Hope you are doing well. Morning, Brad. Morning. Maybe just starting off here. On the expense number. I guess you guys continue to, add talent and producers and you are investing. I guess if I look at the core expense base, it was just above the high end of kind of the quarterly guidance range. Just kind of curious how you think about the run rate as we move through the balance of the year without considering HCB, just kind of legacy independent versus kind of that $36 million to $37 million range.

Gavin A. Mohr: Yeah. So I think your analysis is accurate, Brendan. When I think about the core and based on our forecast, what was not comprehend or we did not have captured in that was certainly the litigation. of $400 thousand. The other thing that we had this quarter we did have incentive accrual catch-up that added $400 thousand. That being said, I mean, that I just would call that, part of core. And then we also had some elevated advertising expense that is related to deposit promotional, that is a deposit promotion that was that has been terminated, but there is still there is still some was still there is still some earnout taking place there.

So when I think about on a net, I get back to that, around 37 million or high end of our range going forward. To answer your question. Yes. Yeah.

William Bradford Kessel: I agree with that, Gavin. I would add also loan and collection right now is running a little bit higher, and it relates predominantly to the 1 credit. So as we move that through the process and hopefully, we can get that down too.

Brendan Nosal: Okay. Fantastic. Thanks for the color there. Maybe pivoting to kind of what you are doing with the balance sheet in terms of the complexion and the margin. You have been on this journey of remixing the asset base into higher yielding commercial loans for some time now, and that is generated quite a bit of margin expansion irrespective of the rate environment. I guess, without asking specifically about the longer term margin expectation, I guess my question is whether the commercial remixing opportunity is exhausted by the end of this year or whether you think there is still more work to do in the future?

Gavin A. Mohr: Yeah. The commercial remix-- to make sure I define your question correctly, So correct me if I do not if I get it wrong. So, from commercial wise, in terms of repricing, the commercial book is approaching market. Due to the short duration. That being said, the securities portfolio in the mortgage portfolio that we intend to continue certainly on the mortgage side, continue to redeploy into the commercial pipeline. Has room to run. And I would say we have been, you know, doing some analysis internally It all held the same. And we are seeing some favorability in the positive shape of the yield curve, Brendan.

Continuing to grind higher for the next 12 months between flat to where we are at today at 6 basis points a quarter. Is not unreasonable. I do not I think 6 basis points is outsized, but you know, anywhere from 2 to 4 basis points a quarter going forward would not be unreasonable in terms of margin expansion. Fantastic, Gavin. Thank you for answering the question.

Operator: 1 moment for our next question. Our next question comes from Nathan Race with Piper Sandler.

Nathan Race: Hi, this is Nick on for Nathan Race. Thanks for taking my questions this morning.

William Bradford Kessel: Sure, Nick.

Nathan Race: Just going to expenses on the HCB deal with the deal closing earlier this month. Can you kind of walk through the cost savings cadence from here and do you kind of expect the savings to build gradually each quarter? Does the bulk of them kind come through after the system's conversion in November?

Gavin A. Mohr: Yeah. That would be the latter, Nick. So we for various reasons, we chose to run the banks as separate subsidiaries Through conversion, as Brad highlighted on November 9. So, you know, running 2 individual banks, it did slow down some of those cost saves. But our team is focused on achieving, you know, that number very early in 2027 at the latest.

William Bradford Kessel: To have a 2027 is fully implemented and realized. Yeah. I think that number was 40%.

Gavin A. Mohr: It was 40%, yep, of half a year.

Nathan Race: Got it. that is helpful. And then maybe switching to loan growth. How does the commercial pipeline kind of looks heading into third quarter? And did any of the quarters growth pull forward from the back half?

Joel F. Rahn: Yeah. Nick, this is Joel. The pipeline is holding up well. We had a really strong second quarter of production and despite that, the pipeline is strong. And, you know, there is always some seasonality to it. And third quarter, just historically, is a little softer for loan production. Not bad, but typically a little bit softer just because early part of the quarter, a lot of people are on vacation. Business owners like to enjoy the summer. And then we always see the fourth quarter usually be quite strong. So I think that you know, if that sort of cyclical or seasonal pattern will hold this year.

But our pipeline in terms of the dollar, where it is at today versus a year ago, very comparable, and we continue to see really good opportunities. Out in the marketplace.

Nathan Race: Great. that is everything for me. Thanks, guys.

Operator: Thank you. 1 moment for our next question. Our next question comes from Matthew Renck with KBW. Your line is open.

Matt Renck: Hey. I hope everybody's doing well this morning. My first question was a follow-up to 1 of the earlier questions about commercial new origination yields. It looks like they were up 2 basis points, and you said the portfolio is approaching market. But do you think market yields have peaked at this point? And then I am just kind of curious how you guys weigh profitability with market share gain given the commercial opportunity in front of you.

Gavin A. Mohr: I would say I will start with Joel.

Joel F. Rahn: I think the question maybe for you out of the gate is what how do you feel about the market pricing in terms of raw yield? Are we kind of at the-- Well, it is obviously going to follow the industry market. So but in terms of spread, I will just refer to it that way. In terms of spread, we have been holding quite consistent. So it there is a lot of competition, but that is not that is nothing new. So I think it is we are in a pretty stable environment. Always healthy competition. that is just a part of our daily life.

But in terms of our spread, we have been holding we have been holding ground, and I do not see that I do not see it growing. But I also do not see that we are, you know, that we are losing ground on our spread. So, again, it is all based on, you know, on market movement too. So we are looking at likely a increased Fed funds here in the near future and the treasury market continues to tick up. So that is the best insight I can provide you on that. Provide you on that.

Gavin A. Mohr: Yeah. And, again, so we grew the portfolio, the commercial portfolio by $93 million.

William Bradford Kessel: For the quarter. Mhmm.

Gavin A. Mohr: The average new origination rate is 6.41.

Joel F. Rahn: And the portfolio yield is 6.06.

Gavin A. Mohr: Yeah.

William Bradford Kessel: That you are right.

Joel F. Rahn: I mean, that is as Gavin said, we are getting real close to market We are kind of par on the commercial portfolio now. Because of turnover.

Matt Renck: Okay. Got it. And then just 1 follow-up on credit. I appreciate the color from earlier on. About the 2 thirds of it being 1 commercial loan. But is there any insight into the timeline on resolution there? And then just generally, like, looking across the portfolio, any areas you could keep an eye on or you are seeing early signs of stress in?

Joel F. Rahn: Yeah. I cannot predict the timeline of that large 1. it is a legal process and it just always moves slower than we want it to move. And yet we do feel like we are gradually making headway. In terms of other areas, no. there is no there is not an industry concern at this point. You know, the 1 other loan of any significance that we moved to non accrual during the quarter On the commercial side, was a management issue. And that is what we are seeing is just the, the poor operators eventually catching up with them, but no industry concern from a commercial standpoint at this point.

Matt Renck: Thank you.

Operator: And I am not showing any further questions at this time. I would like to turn the call back over to Brad.

William Bradford Kessel: In closing, I would like to thank our board of directors and our senior management for their support and leadership I also want to thank all our associates. I continue to be so proud of the job being done by each member of our team. Each team member in his or her own way continues to do their part towards our common goal of guiding our customers to be independent. Finally, I would like to thank each of you for your interest in Independent Bank Corporation. For joining us on today's call. Have a great day.

Operator: Thank you. Ladies and gentlemen, that concludes today's presentation. We thank you for your participation. You may now disconnect, and have a wonderful day.

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