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What changed in INDEPENDENT BANK CORP /MI/'s 10-K — 2023 vs 2024

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Paragraph-level year-over-year comparison of INDEPENDENT BANK CORP /MI/'s 2023 and 2024 10-K annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2024 report.

+73 added−75 removedSource: 10-K (2025-03-07) vs 10-K (2024-03-08)

Top changes in INDEPENDENT BANK CORP /MI/'s 2024 10-K

73 paragraphs added · 75 removed · 66 edited across 9 sections

Item 1. Business

Business — how the company describes what it does

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Biggest changeWe discontinued the use of new LIBOR-based loans and interest rate derivatives as of December 31, 2021, according to regulatory guidelines. Inflation Reduction Act of 2022 . On August 16, 2022, the Inflation Reduction Act of 2022 was signed into law. The Inflation Reduction Act of 2022 includes a 1% excise tax on net stock repurchases, effective January 1, 2023.
Biggest changeInflation Reduction Act of 2022 . On August 16, 2022, the Inflation Reduction Act of 2022 was signed into law. The Inflation Reduction Act of 2022 includes a 1% excise tax on net stock repurchases, effective January 1, 2023. We do not expect that this new excise tax will have a material impact on our operations or results.
Change in Control Limitations . Subject to certain exceptions, the Change in the Bank Control Act ("Control Act") and regulations promulgated thereunder by the Federal Reserve, require any person acting directly or indirectly, or through or in concert with one or more persons, to give the Federal Reserve 60 days' written notice before acquiring control of a bank holding company.
Change in Control Limitations . Subject to certain exceptions, the Change in Bank Control Act ("Control Act") and regulations promulgated thereunder by the Federal Reserve, require any person acting directly or indirectly, or through or in concert with one or more persons, to give the Federal Reserve 60 days' written notice before acquiring control of a bank holding company.
It is important to note that these regulatory capital rules provide minimum requirements, and higher capital levels may be required if warranted by the particular circumstances or risk profiles of individual banking organizations.
It is important to note that these regulatory capital rules provide minimum requirements, and higher capital levels may be required if warranted by the particular circumstances or risk profiles of individual banking organizations.
The extent of the regulators' powers depends on whether the institution in question is "well capitalized," "adequately capitalized," "undercapitalized," "significantly undercapitalized," or "critically undercapitalized." Federal regulations define these capital categories as follows: Total Risk-Based Capital Ratio Tier 1 Risk-Based Capital Ratio Common Equity Tier 1 Risk-Based Capital Ratio Leverage Ratio Well capitalized 10% or above 8% or above 6.5% or above 5% or above Adequately capitalized 8% or above 6% or above 4.5% or above 4% or above Undercapitalized Less than 8% Less than 6% Less than 4.5% Less than 4% Significantly undercapitalized Less than 6% Less than 4% Less than 3% Less than 3% Critically undercapitalized Tangible equity to total assets of 2% or less As of December 31, 2023, our bank's ratios exceeded minimum requirements for the well-capitalized category.
The extent of the regulators' powers depends on whether the institution in question is "well capitalized," "adequately capitalized," "undercapitalized," "significantly undercapitalized," or "critically undercapitalized." Federal regulations define these capital categories as follows: Total Risk-Based Capital Ratio Tier 1 Risk-Based Capital Ratio Common Equity Tier 1 Risk-Based Capital Ratio Leverage Ratio Well capitalized 10% or above 8% or above 6.5% or above 5% or above Adequately capitalized 8% or above 6% or above 4.5% or above 4% or above Undercapitalized Less than 8% Less than 6% Less than 4.5% Less than 4% Significantly undercapitalized Less than 6% Less than 4% Less than 3% Less than 3% Critically undercapitalized Tangible equity to total assets of 2% or less As of December 31, 2024, our bank's ratios exceeded minimum requirements for the well-capitalized category.
BUSINESS (continued) ability to include trust preferred securities as Tier 1 capital; however, these additional limitations do not apply to our outstanding trust preferred securities. Our Tier 2 capital as of December 31, 2023 includes $40.0 million of subordinated notes that were issued during 2020 and mature May, 2030.
BUSINESS (continued) ability to include trust preferred securities as Tier 1 capital; however, these additional limitations do not apply to our outstanding trust preferred securities. Our Tier 2 capital as of December 31, 2024 includes $40.0 million of subordinated notes that were issued during 2020 and mature May, 2030.
A 2.5% common equity Tier 1 capital conservation buffer is also required. As of December 31, 2023, our holding company's capital ratios exceeded minimum requirements for the well-capitalized category.
A 2.5% common equity Tier 1 capital conservation buffer is also required. As of December 31, 2024, our holding company's capital ratios exceeded minimum requirements for the well-capitalized category.
In addition, the federal bank regulatory agencies are required biennially to review risk-based capital standards to ensure that they adequately address interest rate risk, concentration of credit risk and risks from non-traditional activities. Our Tier 1 capital as of December 31, 2023 includes $39.5 million of trust preferred securities (classified on our Consolidated Statements of Financial Condition as "Subordinated debentures").
In addition, the federal bank regulatory agencies are required biennially to review risk-based capital standards to ensure that they adequately address interest rate risk, concentration of credit risk and risks from non-traditional activities. Our Tier 1 capital as of December 31, 2024 includes $39.6 million of trust preferred securities (classified on our Consolidated Statements of Financial Condition as "Subordinated debentures").
We do not expect that this new excise tax will have a material impact on our operations or results. 9 ITEM 1. BUSINESS (continued) Future Legislation Various other legislative and regulatory initiatives, including proposals to overhaul the bank regulatory system, are from time to time introduced in Congress and state legislatures, as well as regulatory agencies.
Future Legislation Various other legislative and regulatory initiatives, including proposals to overhaul the bank regulatory system, are from time to time introduced in Congress and state legislatures, as well as regulatory agencies.
Removed
Replacement of LIBOR . In 2017, the Chief Executive of the United Kingdom Financial Conduct Authority, which regulates the London Interbank Offered Rate ("LIBOR"), announced that it intended to stop persuading or compelling banks to submit rates for the calibration of LIBOR after 2021.
Removed
On March 5, 2021, LIBOR’s administrator announced end dates for publication of LIBOR: December 31, 2021 for one-week and two-month USD LIBOR maturities and non-USD LIBOR maturities, and June 30, 2023 for all other tenors.
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Federal bank regulators issued guidance indicating that banks should "cease entering into new contracts that use USD LIBOR as a reference rate as soon as practicable and in any event by December 31, 2021." The Federal Reserve and the Alternative Reference Rates Committee ("ARRC"), a steering committee comprised primarily of large U.S. financial institutions, have identified the Secured Overnight Financing Rate ("SOFR"), a broad measure of the cost of borrowing cash overnight collateralized by Treasury securities, as a potential alternative to LIBOR, and the Federal Reserve announced final plans for the production of SOFR.
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In July 2021, the ARRC formally recommended the CME SOFR Term Rates. Whether SOFR will become a LIBOR replacement and the ultimate future of LIBOR remain uncertain. Some financial institutions have indicated an intent to use other rates in addition to SOFR.
Removed
However, both Fannie Mae and Freddie Mac announced in 2020 that they would cease purchasing and issuing LIBOR-based products by the end of 2020 and began accepting mortgages based on SOFR. We formed a cross-functional project team to lead this transition from LIBOR to an adoption of reference rates that include SOFR.
Removed
Implementation of successor indices may lead to additional documentation requirements, compliance measures, financial impacts, and technology-related challenges, as well as potential disputes or litigation with customers and creditors. We utilized the timeline guidance published by the ARRC to develop and achieve internal milestones during this transitional period.

Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

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Biggest changeAny such matter could result in substantial cost and diversion of our efforts, which by itself could have a material adverse effect on our financial condition and operating results. Further, adverse determinations in such matters could result in actions by our regulators that could materially adversely affect our business, financial condition or results of operations.
Biggest changeIt is inherently difficult to assess the outcome of these matters, and there can be no assurance that we will prevail in any proceeding or litigation. Any such matter could result in substantial cost and diversion of our efforts, which by itself could have a material adverse effect on our financial condition and operating results.
As a result, the adverse effects on our business relating to a future economic downturn could be exacerbated by additional regulations and regulatory scrutiny that accompanied or followed any such downturn. We can neither predict when or whether future regulatory or legislative reforms will be enacted nor what their contents will be.
As a result, the adverse effects on our business relating to any future economic downturn could be exacerbated by additional regulations and regulatory scrutiny that accompanied or followed any such downturn. We can neither predict when or whether future regulatory or legislative reforms will be enacted nor what their contents will be.
If we are unable to maintain adequate liquidity, then our business, financial condition and results of operations could be negatively impacted. 11 We face cybersecurity risks, including attacks targeting our systems and customers' systems. Our business involves the collection, transmission, and storage of large amounts of sensitive data, including personally identifiable information of our customers and employees.
If we are unable to maintain adequate liquidity, then our business, financial condition and results of operations could be negatively impacted. We face cybersecurity risks, including attacks targeting our systems and customers' systems. Our business involves the collection, transmission, and storage of large amounts of sensitive data, including personally identifiable information of our customers and employees.
In addition, catastrophic events occurring in other regions of the world may have an impact on our customers and in turn, on us. A significant catastrophic event could materially adversely affect our operating results. 15 Our failure to appropriately apply certain critical accounting policies could result in our misstatement of our financial results and condition.
In addition, catastrophic events occurring in other regions of the world may have an impact on our customers and in turn, on us. A significant catastrophic event could materially adversely affect our operating results. Our failure to appropriately apply certain critical accounting policies could result in our misstatement of our financial results and condition.
We may not be able to utilize technology to efficiently and effectively develop, market, and deliver new products and services to our customers. The financial services industry experiences rapid technological change with regular introductions of new technology-driven products and services. The efficient and effective utilization of technology enables financial institutions to better serve 14 customers and to reduce costs.
We may not be able to utilize technology to efficiently and effectively develop, market, and deliver new products and services to our customers. The financial services industry experiences rapid technological change with regular introductions of new technology-driven products and services. The efficient and effective utilization of technology enables financial institutions to better serve customers and to reduce costs.
We are exposed to many types of operational risk, including reputational risk, legal and compliance risk, the risk of fraud or theft by employees or outsiders, failure of our controls and procedures and unauthorized transactions by employees or operational errors, including clerical or recordkeeping errors or those resulting from computer or telecommunications systems malfunctions.
We are exposed to many types of operational risk, including reputational risk, legal and compliance risk, the risk of fraud or theft by employees or outsiders, failure of our controls and procedures and unauthorized transactions by employees or 11 operational errors, including clerical or recordkeeping errors or those resulting from computer or telecommunications systems malfunctions.
Various federal and/or state laws and regulations limit the amount of dividends that the bank may pay to the parent company. Any future strategic acquisitions or divestitures may present additional risks to our business and operations.
Various federal and/or state laws and regulations limit the amount of dividends that the bank may pay to the parent company. 13 Any future strategic acquisitions or divestitures may present additional risks to our business and operations.
Because of the uncertainty surrounding management's judgments and the estimates pertaining to these matters, we cannot guarantee that we will not be required to adjust accounting policies or restate prior period financial statements.
Because of the uncertainty surrounding management's judgments and the estimates pertaining to these matters, we cannot guarantee that we will not be required to adjust accounting policies or restate prior 15 period financial statements.
Recent developments and events within the financial services industry, including the closures of several banks in 2023 due to large-scale deposit withdrawals over a short period of time, created liquidity risks and concerns within the industry, as well as decreased confidence in banks among depositors, investors, and other counterparties.
Events within the financial services industry within recent years, including the closures of several banks in 2023 due to large-scale deposit withdrawals over a short period of time, created liquidity risks and concerns within the industry, as well as decreased confidence in banks among depositors, investors, and other counterparties.
We realized net gains of $7.4 million on mortgage loans during 2023 compared to $6.4 million during 2022 and $35.9 million during 2021. Our parent company must rely on dividends or returns of capital from our bank for most of its cash flow. Our parent company is a separate and distinct legal entity from our bank.
We realized net gains of $6.6 million on mortgage loans during 2024 compared to $7.4 million during 2023 and $6.4 million during 2022. Our parent company must rely on dividends or returns of capital from our bank for most of its cash flow. Our parent company is a separate and distinct legal entity from our bank.
See note #1, "Accounting Policies" in the Notes to Consolidated Financial Statements in our annual report, to be delivered to shareholders in connection with the April 23, 2024 Annual Meeting of Shareholders (filed as exhibit 13 to this report on Form 10-K).
See note #1, "Accounting Policies" in the Notes to Consolidated Financial Statements in our annual report, to be delivered to shareholders in connection with the April 22, 2025 Annual Meeting of Shareholders (filed as exhibit 13 to this report on Form 10-K).
A portion of our revenues are derived from net gains on mortgage loans. These net gains primarily depend on the volume of loans we sell, which in turn depends on our ability to originate real estate mortgage loans and the demand for fixed-rate obligations and other loans that are outside of our established interest-rate risk parameters.
These net gains primarily depend on the volume of loans we sell, which in turn depends on our ability to originate real estate mortgage loans and the demand for fixed-rate obligations and other loans that are outside of our established interest-rate risk parameters.
RISK FACTORS Investing in our common stock involves risks, including (among others) the following factors: Risk Factors Relating to the Financial Services Industry Pressures from various global and national macroeconomic events, including recessionary concerns, heightened inflation, uncertainty regarding future interest rates, foreign currency exchange rate fluctuations, recent adverse weather conditions, escalating tensions in the Middle East, the continuation of the Russia-Ukraine war, and potential governmental responses to these events have created, and continue to create, significant economic uncertainty and could materially and adversely impact our financial condition and performance.
RISK FACTORS Investing in our common stock involves risks, including (among others) the following factors: Risk Factors Relating to the Financial Services Industry Pressures from various global and national macroeconomic events, including heightened inflation, uncertainty regarding future interest rates, foreign currency exchange rate fluctuations, recent adverse weather conditions and natural disasters, ongoing conflict in the Middle East, the continuation of the Russia-Ukraine war, and potential governmental responses to these events have created, and continue to create, significant economic uncertainty and 9 could materially and adversely impact our financial condition and performance.
We make various assumptions and judgments about the collectability of our loan portfolio, including the creditworthiness of our borrowers and the value of the real estate and other assets serving as collateral for the repayment of many of our loans. Non-performing loans amounted to $5.2 million and $3.7 million at December 31, 2023, and December 31, 2022, respectively.
We make various assumptions and judgments about the collectability of our loan portfolio, including the creditworthiness of our borrowers and the value of the real estate and other assets serving as collateral for the repayment of many of our loans. Non-performing loans amounted to $6.0 million and $5.2 million at December 31, 2024, and December 31, 2023, respectively.
Methods of reducing risk exposures might not be effective. Instruments, systems and strategies used to hedge or otherwise manage exposure to various types of credit, market and liquidity, operational, compliance, business risks and enterprise-wide risk could be less effective than anticipated.
Instruments, systems and strategies used to hedge or otherwise manage exposure to various types of credit, market and liquidity, operational, compliance, business risks and enterprise-wide risk could be less effective than anticipated.
Our allowance for credit losses coverage ratio of non-performing loans was 1,044.69% and 1,409.16% at December 31, 2023, and December 31, 2022, respectively. The decrease in this coverage ratio in 2023 was primarily due to an increase in non-performing loans that was partially offset by an increase in the allowance for credit losses.
Our allowance for credit losses coverage ratio of non-performing loans was 989.32% and 1,044.69% at December 31, 2024, and December 31, 2023, respectively. The decrease in this coverage ratio in 2024 was primarily due to an increase in non-performing loans that was partially offset by an increase in the allowance for credit losses.
However, gross unrealized losses on securities available for sale and securities held to maturity in our portfolio totaled approximately $65.2 million and $55.9 million, respectively as of December 31, 2023 (compared to approximately $87.3 million and $62.6, respectively as of December 31, 2022).
However, gross unrealized losses on securities available for sale and securities held to maturity in our portfolio totaled approximately $62.7 million and $53.9 million, respectively as of December 31, 2024 (compared to approximately $65.2 million and $55.9, respectively as of December 31, 2023).
Our financial results could be materially adversely impacted by changes in financial market conditions. 12 Legal and regulatory proceedings and related matters with respect to the financial services industry, including those directly involving us, could adversely affect us or the financial services industry in general.
Our financial results could be materially adversely impacted by changes in financial market conditions. Legal and regulatory proceedings and related matters with respect to the financial services industry, including those directly involving us, could adversely affect us or the financial services industry in general. We have been, and may in the future be, subject to various legal and regulatory proceedings.
Such regulation and supervision govern the activities in which we may engage. Regulatory authorities have extensive discretion in their supervisory and enforcement activities, including the imposition of restrictions on our operations, limitations related to our securities, the classification of our assets, and the determination of the level of our allowance for credit losses.
Regulatory authorities have extensive discretion in their supervisory and enforcement activities, including the imposition of restrictions on our operations, limitations related to our securities, the classification of our assets, and the determination of the level of our allowance for credit losses.
Prevailing economic conditions; the trade, fiscal and monetary policies of the federal government; and the policies of various regulatory agencies all affect market rates of interest and the availability and cost of credit, which in turn significantly affect financial institutions' net interest income.
Prevailing economic conditions; the trade, fiscal and monetary policies of the federal government, which have the potential to change significantly with the new Trump administration; and the policies of various regulatory agencies all affect market rates of interest and the availability and cost of credit, which in turn significantly affect financial institutions' net interest income.
As a result, we may not be able to effectively mitigate our risk exposures in particular market environments or against particular types of risk, which could have a material adverse impact on our business, financial condition or results of operations.
As a result, we may not be able to effectively mitigate our risk exposures in particular market environments or against particular types of risk, which could have a material adverse impact on our business, financial condition or results of operations. 12 Risk Factors More Specific to Our Business We have credit risk inherent in our loan portfolios, and our allowance for credit losses may not be sufficient to cover actual credit losses.
Further, our customers may be adversely impacted by such conditions, which could have a negative impact on our business, financial condition and results of operations. 10 Adverse developments affecting the financial services industry, including bank failures and the resulting liquidity concerns, may have a material effect on our business, financial condition, results of operations, or cash flows.
Adverse developments affecting the financial services industry, including bank failures and the resulting liquidity concerns, may have a material effect on our business, financial condition, results of operations, or cash flows.
Disruptions, uncertainty or volatility in the capital and credit markets may limit our ability to access capital and manage liquidity, which may adversely affect our business, financial condition and results of operations.
Disruptions, uncertainty or volatility in the capital and credit markets may limit our ability to access capital and manage liquidity, which may adversely affect our business, financial condition and results of operations. Further, our customers may be adversely impacted by such conditions, which could have a negative impact on our business, financial condition and results of operations.
Changes in customer behavior may adversely impact our business, financial condition and results of operations. We use a variety of methods to anticipate customer behavior as a part of our strategic planning and to meet certain regulatory requirements.
We use a variety of methods to anticipate customer behavior as a part of our strategic planning and to meet certain regulatory requirements.
There is no assurance that any such losses would not adversely affect us and possibly be material in nature. Changes in regulation or oversight may have a material adverse impact on our operations. We are subject to extensive regulation, supervision and examination by the Federal Reserve, the FDIC, the Michigan DIFS, the SEC and other regulatory bodies.
Changes in regulation or oversight may have a material adverse impact on our operations. We are subject to extensive regulation, supervision and examination by the Federal Reserve, the FDIC, the Michigan DIFS, the SEC and other regulatory bodies. Such regulation and supervision govern the activities in which we may engage.
We have exposure to many different industries and counterparties, and we routinely execute transactions with counterparties in the financial industry. As a result, defaults by, or even rumors or questions about, one or more financial services institutions, or the financial services industry generally, can lead to market-wide liquidity problems and losses or defaults by us or by other institutions.
As a result, defaults by, or even rumors or questions about, one or more financial services institutions, or the financial services industry generally, can lead to market-wide liquidity problems and losses or defaults by us or by other institutions. Many of these transactions could expose us to credit risk in the event of default by a counterparty.
We measure expected credit losses on securities held to maturity ("HTM") on a collective basis by major security type with each type sharing similar risk characteristics, and we consider historical credit loss information.
We measure expected credit losses on securities held to maturity ("HTM") on a collective basis by major security type with each type sharing similar risk characteristics, and we consider historical credit loss information. We may, in the future, experience losses in our securities portfolios which may result in credit losses that could materially adversely affect our results of operations.
The FDIC may increase premiums or impose special assessments on all banks to replenish the Deposit Insurance Fund to ensure that all depositors in failed banks are made whole at no cost to taxpayers. The 2023 bank failures may also prompt changes to laws or regulations governing banks, which could impact our profitability and business.
Our deposits are insured up to applicable limits by FDIC and are subject to deposit insurance premiums and assessments. The FDIC may increase premiums or impose special assessments on all banks to replenish the Deposit Insurance Fund to ensure that all depositors in failed banks are made whole at no cost to taxpayers.
Many of these transactions could expose us to credit risk in the event of default by a counterparty. In addition, our credit risk may be impacted when the collateral held by us cannot be realized upon or is liquidated at prices not sufficient to recover the full amount of the financial instrument exposure due to us.
In addition, our credit risk may be impacted when the collateral held by us cannot be realized upon or is liquidated at prices not sufficient to recover the full amount of the financial instrument exposure due to us. There is no assurance that any such losses would not adversely affect us and possibly be material in nature.
These market conditions and related factors may impact the competitive landscape for deposits in the financial services industry in an unpredictable manner. Specifically, these developments and events may materially adversely impact our business, financial condition, results of operations, and/or cash flows, including through potential liquidity pressures, reduced net interest margins, and potential increased credit losses.
Specifically, these events may materially adversely impact our business, financial condition, results of operations, and/or cash flows, including through potential liquidity pressures, reduced net interest margins, and potential increased credit losses. They may also adversely impact the market price and volatility of our common stock. Government responses to these events may also adversely impact us.
In general, these events have caused volatility and disruption in the capital markets, as well as reduced valuations of equity and other securities of banks, which may increase the risk of a potential recession. These failures also highlighted the importance of maintaining diversified funding sources.
In general, these events caused some degree of volatility and disruption in the capital markets, as well as reduced valuations of equity and other securities of banks. These failures also highlighted the importance of maintaining diversified funding sources. These market conditions and related factors may impact the competitive landscape for deposits in the financial services industry in an unpredictable manner.
We also compete with fintech companies, securities brokerage firms, insurance companies, and other non-depository institutions with respect to some of the products and services we offer. If we are unable to compete effectively in products and pricing in our markets, business could decline, which could have a material adverse effect on our business, financial condition or results of operations.
If we are unable to compete effectively in products and pricing in our markets, business could decline, which could have a material adverse effect on our business, financial condition or results of operations. 14 Changes in customer behavior may adversely impact our business, financial condition and results of operations.
The impact of any future legislation or regulatory actions on our businesses or operations cannot be determined at this time, and such impact may adversely affect us. We are subject to liquidity risk in our operations, which could adversely impact our ability to fund various obligations.
The impact of any future legislation or regulatory actions on our businesses or operations cannot be determined at this time, and such impact may adversely affect us. It is difficult to predict what impact the new Trump administration will have on these risks.
The soundness of other financial institutions could adversely affect us. Our ability to engage in routine funding transactions could be adversely affected by the actions and commercial soundness of other financial institutions. Financial services institutions are interrelated as a result of trading, clearing, counterparty and other relationships.
The 2023 bank failures may also prompt changes to laws or regulations governing banks, which could impact our profitability and business. The soundness of other financial institutions could adversely affect us. Our ability to engage in routine funding transactions could be adversely affected by the actions and commercial soundness of other financial institutions.
We may, in the future, experience losses in our securities portfolios which may result in credit losses that could materially adversely affect our results of operations. 13 Our mortgage-banking revenues are susceptible to substantial variations, due in part to factors we do not control, such as market interest rates.
Our mortgage-banking revenues are susceptible to substantial variations, due in part to factors we do not control, such as market interest rates. A portion of our revenues are derived from net gains on mortgage loans.
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They may also adversely impact the market price and volatility of our common stock. Government responses to these events may also adversely impact us. Our deposits are insured up to applicable limits by FDIC and are subject to deposit insurance premiums and assessments.
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In addition, pursuit of various initiatives announced by the new Trump administration may create some degree of volatility in our customers’ businesses, regulation of the financial services industry, and the markets in which we operate.
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We have been, and may in the future be, subject to various legal and regulatory proceedings. It is inherently difficult to assess the outcome of these matters, and there can be no assurance that we will prevail in any proceeding or litigation.
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Financial services institutions are interrelated as a result of trading, clearing, counterparty and other relationships. We have exposure to many different industries and counterparties, and we routinely execute 10 transactions with counterparties in the financial industry.
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Risk Factors More Specific to Our Business We have credit risk inherent in our loan portfolios, and our allowance for credit losses may not be sufficient to cover actual credit losses.
Added
Any actions by the new administration to scale back regulations or regulatory oversight may become subject to judicial or other challenges, which may increase the degree of uncertainty associated with this risk factor. We are subject to liquidity risk in our operations, which could adversely impact our ability to fund various obligations.
Added
Further, adverse determinations in such matters could result in actions by our regulators that could materially adversely affect our business, financial condition or results of operations. Methods of reducing risk exposures might not be effective.
Added
We also compete with fintech companies, securities brokerage firms, insurance companies, and other non-depository institutions with respect to some of the products and services we offer.

Item 1C. Cybersecurity

Cybersecurity — threats and controls disclosure

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Biggest changeWe have established a robust framework for identifying, preventing, mitigating, and remediating such risks. We have an extensive and experienced team responsible for cybersecurity risk management. Our current Cyber Information Security Officer has a comprehensive information technology background with over 20 years of experience in managing or assisting in managing cybersecurity risks.
Biggest changeWe have established a robust framework for identifying, preventing, mitigating, and remediating such risks. We have an extensive and experienced team responsible for cybersecurity risk management.
No risks from any current or previous cybersecurity threats have materially affected or are reasonably likely to materially affect our business strategy, results of operations, or financial condition, except to the extent that such strategy, operations, and conditions are affected by our employment of the cybersecurity risk assessment programs and procedures discussed in 16 this Item.
No risks from any current or previous cybersecurity threats have materially affected or are reasonably likely to materially affect our business strategy, results of operations, or financial condition, except to the extent that such strategy, operations, and conditions are affected by our employment of the cybersecurity risk assessment programs and procedures discussed in this Item.
To support the Cyber Information Security Officer in managing cybersecurity and our Chief Risk Officer in managing cybersecurity risks, we have established a cross-functional cybersecurity team that includes experts in various aspects of information security. This team of employees includes individuals with many years of prior combined work experience in cybersecurity and data protection.
To support the Chief Information Security Officer in managing cybersecurity and our Chief Risk Officer in managing cybersecurity risks, we have established a cross-functional cybersecurity team that includes experts in various aspects of information security. This team of employees includes individuals with many years of prior combined work experience in cybersecurity and data protection.
These individuals are responsible for the day-to-day implementation of our cybersecurity program, including providing immediate notice to our Cyber Information Security Officer and our Chief Risk Officer of any potential cybersecurity incidents. We employ robust and comprehensive processes to respond to cybersecurity risks. We employ a comprehensive set of processes to monitor and mitigate cybersecurity risks.
These individuals are responsible for the day-to-day implementation of our cybersecurity program, including providing immediate notice to our Chief Information Security Officer and our Chief Risk Officer of any potential cybersecurity incidents. We employ robust and comprehensive processes to respond to cybersecurity risks. We employ a comprehensive set of processes to monitor and mitigate cybersecurity risks.
Our cybersecurity personnel provide regular reports to the Board of Directors. As noted above, our Chief Risk Officer, Cyber Information Security Officer, and cybersecurity team provide regular reports to the Board regarding cybersecurity risks, as well as a review of the processes described above.
Our cybersecurity personnel provide regular reports to the Board of Directors. As noted above, our Chief Risk Officer, Chief Information Security Officer, and cybersecurity team provide regular reports to the Board regarding cybersecurity risks, as well as a review of the processes described above.
Our Chief Risk Officer is responsible for overseeing our risk management generally, working closely with our internal audit department. Our Chief Risk Officer regularly reports directly to the Board of Directors with respect to all areas of risk management.
Our Chief Risk Officer is responsible for overseeing our risk management 16 generally, working closely with our internal audit department. Our Chief Risk Officer regularly reports directly to the Board of Directors with respect to all areas of risk management.
With regard to cybersecurity specifically, we have a Cyber Information Security Officer who reports to our Chief Information Officer, with a dotted-line reporting relationship to our Chief Executive Officer, and collaborates regularly with our Chief Risk Officer and Risk Team.
With regard to cybersecurity specifically, we have a Chief Information Security Officer who reports to our Chief Information Officer, with a dotted-line reporting relationship to our Chief Executive Officer, and collaborates regularly with our Chief Risk Officer and Risk Team.
Our Cyber Information Security Officer meets with the Chief Executive Officer on a standard cadence and chairs a committee focused on cybersecurity with monthly reports made to our Risk Committee.
Our Chief Information Security Officer meets with the Chief Executive Officer on a standard cadence and chairs a committee focused on cybersecurity with monthly reports made to our Risk Committee.
Minutes from these meetings as well as select materials are shared with the full Board of Directors, and our Cyber Information Security Officer delivers an annual report to our Board of Directors. In addition, our entire management team is actively engaged in assessing and managing material risks from cybersecurity threats.
Minutes from these meetings as well as select materials are shared with the full Board of Directors, and our Chief Information Security Officer delivers an annual report to our Board of Directors. In addition, our entire management team is actively engaged in assessing and managing material risks from cybersecurity threats.
The Committee, in turn, provides regular updates to the Board on these matters. 17
The Committee, in turn, provides regular updates to the Board on these matters.
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Our current Chief Information Security Officer has a comprehensive information security background with over 20 years of experience in managing or assisting in managing cybersecurity risks across multiple industries with the majority of that experience at community banking institutions. Our Chief Information Security Officer holds multiple industry certifications from groups such as ISC2 and GIAC.

Item 2. Properties

Properties — owned and leased real estate

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Biggest changeITEM 2. PROPERTIES We and our bank operate a total of 83 facilities in Michigan and one leased facility in Ohio. We own 61 and lease 22 of the facilities in Michigan.
Biggest changeITEM 2. PROPERTIES We and our bank operate a total of 80 facilities in Michigan and one leased facility in Ohio. We own 56 and lease 24 of the facilities in Michigan.

Item 3. Legal Proceedings

Legal Proceedings — active lawsuits and investigations

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Biggest changeThe aggregate amount we have accrued for losses we consider probable as a result of these litigation matters is immaterial. However, because of the inherent uncertainty of outcomes from any litigation matter, we believe it is reasonably possible we may incur losses in addition to the amounts we have accrued.
Biggest changeThe aggregate 17 amount we have accrued for losses we consider probable as a result of these litigation matters is immaterial. However, because of the inherent uncertainty of outcomes from any litigation matter, we believe it is reasonably possible we may incur losses in addition to the amounts we have accrued.

Item 4. Mine Safety Disclosures

Mine Safety Disclosures — required of mining issuers

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Biggest changeErvin (58) Executive Vice President, Mortgage Banking 2017 James J. Twarozynski (58) Senior Vice President and Chief Accounting Officer 2002 (1) Mr. Mohr joined Independent Bank in September 2020, as Executive Vice President and Chief Financial Officer. Prior to joining Independent Bank, Mr.
Biggest changeErvin (59) Executive Vice President, Mortgage Banking 2017 Christopher S. Michaels (58) Executive Vice President, Chief Operating Officer(3) 2025 James J. Twarozynski (59) Senior Vice President and Chief Accounting Officer 2002 (1) Mr. Mohr joined Independent Bank in September 2020, as Executive Vice President and Chief Financial Officer. Prior to joining Independent Bank, Mr.
There are no family relationships among these officers and/or our directors nor any arrangement or understanding between any of these officers and any other person pursuant to which the officer was appointed. 18 The following sets forth certain information with respect to our executive officers at March 8, 2024. Name (Age) Position First elected as an executive officer William B.
There are no family relationships among these officers and/or our directors nor any arrangement or understanding between any of these officers and any other person pursuant to which the officer was appointed. The following sets forth certain information with respect to our executive officers at March 7, 2025. Name (Age) Position First elected as an executive officer William B.
He was promoted to Executive Vice President Commercial Banking in January, 2021. He has 34 years of commercial banking experience and has served in senior leadership positions for the past 17 years. 19 PART II.
He was promoted to Executive Vice President Commercial Banking in January, 2021. He has 34 years of commercial banking experience and has served in senior leadership positions for the past 17 years. (3) Mr.
Kessel (59) President, Chief Executive Officer and Director 2004 Gavin A. Mohr (40) Executive Vice President and Chief Financial Officer(1) 2020 Stefanie M. Kimball (64) Executive Vice President and Chief Risk Officer 2007 Joel Rahn (57) Executive Vice President, Commercial Banking(2) 2021 Larry R. Daniel (60) Executive Vice President, Operations and Retail Banking 2017 Patrick J.
Kessel (60) President, Chief Executive Officer and Director 2004 Gavin A. Mohr (41) Executive Vice President and Chief Financial Officer(1) 2020 Stefanie M. Kimball (65) Executive Vice President and Chief Risk Officer 2007 Joel Rahn (58) Executive Vice President, Commercial Banking(2) 2021 Larry R. Daniel (61) Executive Vice President, Operations and Retail Banking 2017 Patrick J.
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Michaels joined Independent Bank in February of 2012 as a part of our information and technology team and was promoted to Senior Vice President and Chief Information Officer in January, 2020. He was promoted to Executive Vice President and Chief Operating Officer in January, 2025. 18 PART II.

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

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Biggest changeISSUER PURCHASES OF EQUITY SECURITIES The following table shows certain information relating to purchases of common stock for the three- months ended December 31, 2023: Period Total Number of Shares Purchased (1) Average Price Paid Per Share Total Number of Shares Purchased as Part of a Publicly Announced Plan Remaining Number of Shares Authorized for Purchase Under the Plan (2) October 2023 13,870 $ 18.94 10,200 801,399 November 2023 294 21.05 — 801,399 December 2023 84 22.61 — — Total 14,248 $ 19.00 10,200 — (1) Each of October, November and December incl ude 3,670 shares, 294 shares and 84 shares, respectively, withheld from the shares that would otherwise have been issued to certain officers in order to satisfy the tax withholding obligations and/or stock option exercise price resulting from the exercise of stock options.
Biggest changeISSUER PURCHASES OF EQUITY SECURITIES The following table shows certain information relating to purchases of common stock for the three- months ended December 31, 2024: Period Total Number of Shares Purchased (1) Average Price Paid Per Share Total Number of Shares Purchased as Part of a Publicly Announced Plan Remaining Number of Shares Authorized for Purchase Under the Plan (2) October 2024 — $ — — 1,100,000 November 2024 — — — 1,100,000 December 2024 1,040 37.37 — — Total 1,040 $ 37.37 — — (1) December represents shares withheld from the shares that would otherwise have been issued to certain officers in order to satisfy the tax withholding obligations resulting from the vesting of restricted stock.
ITEM 5. MARKET FOR OUR COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES The information set forth under the caption "Quarterly Summary" in our annual report, to be delivered to shareholders in connection with the April 23, 2024 Annual Meeting of Shareholders (filed as exhibit 13 to this report on Form 10-K), is incorporated herein by reference.
ITEM 5. MARKET FOR OUR COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES The information set forth under the caption "Quarterly Summary" in our annual report, to be delivered to shareholders in connection with the April 22, 2025 Annual Meeting of Shareholders (filed as exhibit 13 to this report on Form 10-K), is incorporated herein by reference.
(2) The share repurchase plan we had in place for 2023 was announced on December 21, 2022, and expired on December 31, 2023. It authorized the repurchase during 2023 of up to 1,100,000 shares of our outstanding common stock.
(2) The share repurchase plan we had in place for 2024 was announced on December 19, 2023, and expired on December 31, 2024. It authorized the repurchase during 2024 of up to 1,100,000 shares of our outstanding common stock.
Pursuant to this Plan, during the fourth quarter of 2023, we issued 483 shares of common stock to non-employee directors on a current basis and 4,619 shares of common stock to the trust for distribution to directors on a deferred basis. These shares were issued on October 1, 2023, representing aggregate fees of $0.09 million.
Pursuant to this Plan, during the fourth quarter of 2024, we issued 278 shares of common stock to non-employee directors on a current basis and 1,459 shares of common stock to the trust for distribution to directors on a deferred basis. These shares were issued on October 1, 2024, representing aggregate fees of $0.05 million.
The shares issued on a current basis were issued at a price of $18.34 per share and the shares to be issued on a deferred basis were issued at a price of $16.51 per share, representing 90% of the fair value of the shares on the credit date.
The shares issued on a current basis were issued at a price of $33.35 per share and the shares to be issued on a deferred basis were issued at a price of $30.02 per share, representing 90% of the fair value of the shares on the credit date.

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

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Biggest changeMANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS The information set forth under the caption "Management's Discussion and Analysis of Financial Condition and Results of Operations" in our annual report, to be delivered to shareholders in connection with the April 23, 2024 Annual Meeting of Shareholders (filed as exhibit 13 to this report on Form 10-K), is incorporated herein by reference. 20
Biggest changeMANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS The information set forth under the caption "Management's Discussion and Analysis of Financial Condition and Results of Operations" in our annual report, to be delivered to shareholders in connection with the April 22, 2025 Annual Meeting of Shareholders (filed as exhibit 13 to this report on Form 10-K), is incorporated herein by reference. 19

Item 7A. Quantitative and Qualitative Disclosures About Market Risk

Market Risk — interest-rate, FX, commodity exposure

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Biggest changeQUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK The information set forth in "Management's Discussion and Analysis of Financial Condition and Results of Operations" under the caption "Asset/liability management" in our annual report, to be delivered to shareholders in connection with the April 23, 2024 Annual Meeting of Shareholders (filed as exhibit 13 to this report on Form 10-K), is incorporated herein by reference.
Biggest changeQUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK The information set forth in "Management's Discussion and Analysis of Financial Condition and Results of Operations" under the caption "Asset/liability management" in our annual report, to be delivered to shareholders in connection with the April 22, 2025 Annual Meeting of Shareholders (filed as exhibit 13 to this report on Form 10-K), is incorporated herein by reference.

Other IBCP 10-K year-over-year comparisons