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What changed in INDEPENDENT BANK CORP /MI/'s 10-K — 2024 vs 2025

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Paragraph-level year-over-year comparison of INDEPENDENT BANK CORP /MI/'s 2024 and 2025 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 2025 report.

+104 added−72 removedSource: 10-K (2026-03-06) vs 10-K (2025-03-07)

Top changes in INDEPENDENT BANK CORP /MI/'s 2025 10-K

104 paragraphs added · 72 removed · 59 edited across 9 sections

Item 1. Business

Business — how the company describes what it does

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Biggest changeThe Federal Reserve has established the following minimum capital standards for state-chartered, FDIC-insured member banks, such as our bank: (1) a minimum ratio of common equity Tier 1 capital to risk-weighted 6 ITEM 1.
Biggest changeThe Federal Reserve has established the following minimum capital standards for state-chartered, FDIC-insured member banks, such as our bank: (1) a minimum ratio of common equity Tier 1 capital to risk-weighted assets of 4.5%, (2) a minimum ratio of Tier 1 capital to risk-weighted assets of 6%, (3) a minimum ratio of total capital to total risk-weighted assets of 8%, and (4) a minimum leverage ratio of 4%.
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.
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, 2025, our bank's ratios exceeded minimum requirements for the well-capitalized category.
BUSINESS (continued) The 2018 Act also included regulatory relief for community banks regarding regulatory examination cycles, call reports, the Volcker Rule (proprietary trading prohibitions), mortgage disclosures, and risk weights for certain high-risk commercial real estate loans. Anti-Money Laundering Act of 2020 .
The 2018 Act also included regulatory relief for community banks regarding regulatory examination cycles, call reports, the Volcker Rule (proprietary trading prohibitions), mortgage disclosures, and risk weights for certain high-risk commercial real estate loans. Anti-Money Laundering Act of 2020 .
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.
A 2.5% common equity Tier 1 capital conservation buffer is also required. As of December 31, 2025, 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, 2024 includes $39.6 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, 2025 includes $38.6 million of trust preferred securities (classified on our Consolidated Statements of Financial Condition as "Subordinated debentures").
While the 2018 Act maintained most of the regulatory structure established by the Dodd-Frank Act, it amended certain aspects of the regulatory framework for small depository institutions with assets of less than $10 billion and for large banks with assets of more than $50 billion. 8 ITEM 1.
While the 2018 Act maintained most of the regulatory structure established by the Dodd-Frank Act, it amended certain aspects of the regulatory framework for small depository institutions with assets of less than $10 billion and for large banks with assets of more than $50 billion.
These regulations include FinCEN's Customer Due Diligence Requirements for Financial Institutions, which is designed to identify and verify the identity of natural persons (known as beneficial owners) of legal entity customers who own, control and profit from companies when those companies open accounts. 2018 Regulatory Reform .
These regulations include FinCEN's Customer Due Diligence Requirements for Financial Institutions, which is designed to identify and verify the identity of natural persons (known as beneficial owners) of legal entity customers who own, control and profit from companies when those companies open accounts. 8 ITEM 1. BUSINESS (continued) 2018 Regulatory Reform .
In addition, federal law and regulations may affect the terms upon which any person becoming one of our directors or officers or a principal shareholder may obtain credit from banks with which our bank maintains a correspondent relationship. Safety and Soundness Standards .
BUSINESS (continued) interests" of such directors, officers, and principal shareholders. In addition, federal law and regulations may affect the terms upon which any person becoming one of our directors or officers or a principal shareholder may obtain credit from banks with which our bank maintains a correspondent relationship. Safety and Soundness Standards .
Certain limitations and reporting requirements are also placed on the deposit rates paid, and the amounts and terms of extensions of credit, by our bank to the directors and officers of the holding company, the bank, and the subsidiaries of the bank; to the principal shareholders of the holding company; and to "related interests" of such directors, officers, and principal shareholders.
Certain limitations and reporting requirements are also placed on the deposit rates paid, and the amounts and terms of extensions of credit, by our bank to the directors and officers of the holding company, the bank, and the subsidiaries of the bank; to the principal shareholders of the holding company; and to "related 7 ITEM 1.
We have experienced, and expect to continue to experience, increased costs and expenses related to compliance with these consumer protection regulations as well as new regulations that may be implemented in the future. Anti-Money Laundering and the USA PATRIOT Act .
We have experienced, and expect to continue to experience, increased costs and expenses related to compliance with these consumer protection regulations as well as new regulations that may be implemented in the future. Community Reinvestment Act .
Our bank is subject to certain restrictions imposed by the Federal Reserve Act on "covered transactions" with us or our subsidiaries, which include investments in our stock or other securities issued by us or our 7 ITEM 1.
Our bank is subject to certain restrictions imposed by the Federal Reserve Act on "covered transactions" with us or our subsidiaries, which include investments in our stock or other securities issued by us or our subsidiaries, the acceptance of our stock or other securities issued by us or our subsidiaries as collateral for loans, and extensions of credit to us or our subsidiaries.
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.
A 2.5% common equity Tier 1 capital conservation buffer is also required. 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 6 ITEM 1. BUSINESS (continued) individual banking organizations.
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.
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. Dividends . Historically, most of our revenues have been received in the form of dividends paid by our bank.
Removed
Generally, for subordinated debt with a minimum maturity of five years, there is no limit on the amount of subordinated debt that can be included in Tier 2 capital. Dividends . Historically, most of our revenues have been received in the form of dividends paid by our bank.
Added
The Community Reinvestment Act (CRA) requires federal banking regulators to assess the record of financial institutions in meeting the credit needs of the communities they serve, including low- and moderate-income neighborhoods, consistent with safe and sound operations. In October 2023, federal banking regulators issued a final rule to modernize and strengthen CRA regulations.
Removed
BUSINESS (continued) assets of 4.5%, (2) a minimum ratio of Tier 1 capital to risk-weighted assets of 6%, (3) a minimum ratio of total capital to total risk-weighted assets of 8%, and (4) a minimum leverage ratio of 4%. A 2.5% common equity Tier 1 capital conservation buffer is also required.
Added
The final rule includes revised assessment area standards, new retail lending and community development tests, and updated data collection and reporting requirements. The federal banking regulators have proposed rescinding the new rules and are currently applying the prior regulatory framework under the CRA.
Removed
BUSINESS (continued) subsidiaries, the acceptance of our stock or other securities issued by us or our subsidiaries as collateral for loans, and extensions of credit to us or our subsidiaries.
Added
Our bank has a longstanding commitment to community development and reinvestment in the areas it serves and continually monitors developments related to CRA requirements. Anti-Money Laundering and the USA PATRIOT Act .
Added
One Big Beautiful Bill . In 2025, Congress enacted H.R. 1, the Reconciliation Act of 2025 (commonly referred to as the "One Big Beautiful Bill"), which contains numerous provisions affecting financial institutions, their customers, and the broader economy.
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The legislation makes permanent many of the individual and business tax provisions originally enacted in the Tax Cuts and Jobs Act of 2017, including the reduced individual income tax rates, the increased standard deduction, the 20% qualified business income deduction for pass-through entities under section 199A, the increased estate and gift tax exemption, and 100% bonus depreciation for qualified property.
Added
The legislation also modifies the business interest deduction limitation under Section 163(j) to restore the add-back of depreciation, amortization, and depletion when calculating adjusted taxable income, and increases the Section 179 expensing limit to $2.5 million. The legislation includes several provisions that may directly benefit our bank and its customers.
Added
The state and local tax ("SALT") deduction cap is increased from $10,000 to $40,000 for tax years 2025 and 2026, which may positively affect our customers in Michigan and support residential real estate demand in our service area.
Added
Additionally, the legislation provides that 25% of interest received by qualified lenders, including FDIC-insured depository institutions, on loans secured by agricultural or rural real estate is excluded from gross income.
Added
The legislation also creates new deductions for qualified tips, qualified overtime compensation, and interest on loans for U.S.-assembled passenger vehicles, which may affect consumer financial capacity and demand for certain loan products.
Added
With respect to financial institution regulation, the legislation reduces the CFPB’s funding cap from 12% to 6.5% of the Federal Reserve System's combined earnings, which may result in reduced CFPB enforcement activity and rulemaking. 9 ITEM 1.
Added
BUSINESS (continued) The legislation also imposes a 1% excise tax on certain outbound cash remittance transfers, which may impose compliance and collection obligations on financial institutions that serve as remittance transfer providers.
Added
The ultimate impact of this legislation on our operations, financial condition, and results of operations will depend on the implementation of these provisions by the applicable regulatory and taxing authorities and cannot yet be fully determined.

Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

27 edited+29 added−3 removed73 unchanged
Biggest changeThe occurrence of any failure or interruption in our operations or information systems could cause reputational damage, jeopardize the confidentiality of customer information, result in a loss of customer business, subject us to regulatory intervention or expose us to civil litigation and financial loss or liability, any of which could have a material adverse effect on us.
Biggest changeAlthough we have programs in place related to business continuity, disaster recovery and information security to maintain the confidentiality, integrity, and availability of our systems, business applications and customer information, such disruptions may give rise to interruptions in service to customers and loss or liability to us. 13 The occurrence of any failure or interruption in our operations or information systems could cause reputational damage, jeopardize the confidentiality of customer information, result in a loss of customer business, subject us to regulatory intervention or expose us to civil litigation and financial loss or liability, any of which could have a material adverse effect on us.
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.
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 could materially and adversely impact our financial condition and performance.
These matters could have an adverse effect on us for an undetermined period. We will be subject to similar risks and difficulties in connection with any future decisions to downsize, sell or close units or otherwise change our business mix. Compliance with capital requirements may adversely affect us.
These matters could have an adverse effect on us for an undetermined period. We will be subject to similar 15 risks and difficulties in connection with any future decisions to downsize, sell or close units or otherwise change our business mix. Compliance with capital requirements may adversely affect us.
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.
Prevailing economic conditions; the trade, fiscal and monetary policies of the federal government, which have the potential to change significantly with the 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.
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 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 Trump administration will have on these risks.
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.
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 evaluate securities available for sale for other impairment related to credit at least quarterly and more frequently when economic or market concerns warrant such evaluation. Those evaluations may result in a provision for credit losses recorded in our earnings.
We evaluate securities available for sale for impairment related to credit losses at least quarterly and more frequently when economic or market concerns warrant such evaluation. Those evaluations may result in a provision for credit losses recorded in our earnings.
Any increase in our allowance for credit losses or loan charge-offs required by these regulatory agencies could have a material adverse effect on our results of operations and financial condition. We have credit risk in our securities portfolio.
Any increase in our allowance for credit losses or loan charge-offs required by these regulatory agencies could have a material adverse effect on our results of operations and financial condition. 14 We have credit risk in our securities portfolio.
We have established detailed policies and control procedures that are intended to ensure these critical accounting estimates and judgments are subject to internal controls and applied consistently. In addition, the policies and procedures are intended to ensure that the process for changing methodologies occurs in an appropriate manner.
We have established detailed policies and control procedures that are intended to ensure these critical accounting estimates and judgments are subject to internal controls and applied 17 consistently. In addition, the policies and procedures are intended to ensure that the process for changing methodologies occurs in an appropriate manner.
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.
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 transactions with counterparties in the financial industry.
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.
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.
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.
In addition, pursuit of new initiatives announced by the 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.
Our financial condition and results of operations could be materially adversely impacted by changes in governmental monetary and fiscal policies. Volatility and disruptions in global capital and credit markets may adversely impact our business, financial condition and results of operations.
Our financial condition and results of operations could be materially adversely impacted by changes in governmental monetary and fiscal policies. 10 Volatility and disruptions in global capital and credit markets may adversely impact our business, financial condition and results of operations.
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.
Any actions by the 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. 11 We are subject to liquidity risk in our operations, which could adversely impact our ability to fund various obligations.
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).
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 21, 2026 Annual Meeting of Shareholders (filed as exhibit 13 to this report on Form 10-K).
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.
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 $23.1 million and $6.0 million at December 31, 2025, and December 31, 2024, respectively.
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.
Our allowance for credit losses coverage ratio of non-performing loans was 274.33% and 989.32% at December 31, 2025, and December 31, 2024, respectively. The decrease in this coverage ratio in 2025 was primarily due to an increase in commercial 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 $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).
However, gross unrealized losses on securities available for sale and securities held to maturity in our portfolio totaled approximately $51.4 million and $39.8 million, respectively as of December 31, 2025 (compared to approximately $62.7 million and $53.9, respectively as of December 31, 2024).
Difficulties in capitalizing on the opportunities presented by a future acquisition may prevent us from fully achieving the expected benefits from the acquisition or may cause the achievement of such expectations to take longer to realize than expected.
Any future strategic acquisitions or divestitures may present additional risks to our business and operations. Difficulties in capitalizing on the opportunities presented by a future acquisition may prevent us from fully achieving the expected benefits from the acquisition or may cause the achievement of such expectations to take longer to realize than expected.
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.
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.
We may not be able to effectively develop or offer new technology-driven products and services or be successful in marketing or supporting these products and services to our customers, which could have a material adverse impact on our financial condition and results of operations. Competitive product and pricing pressures among financial institutions within our markets may change.
We may not be able to effectively develop or offer new technology-driven products and services or be successful in marketing or supporting these products and services to our customers, which could have a material adverse impact on our financial condition and results of operations. Emerging digital assets and technologies may disrupt our business and adversely affect our results.
We use a variety of methods to anticipate customer behavior as a part of our strategic planning and to meet certain regulatory requirements.
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.
Generally, our parent company receives substantially all of its cash flow from dividends or returns of capital from our subsidiary bank. These dividends or returns of capital are the principal source of funds to pay our parent company’s operating expenses and for cash dividends on our common stock.
These dividends or returns of capital are the principal source of funds to pay our parent company’s operating expenses and for cash dividends on our common stock. Various federal and/or state laws and regulations limit the amount of dividends that the bank may pay to the parent company.
Risks and exposures related to cybersecurity attacks are expected to remain high for the foreseeable future due to the rapidly evolving nature and sophistication of these threats, the continuing expansion of internet and mobile banking, and similar factors. Operational difficulties, including failure of technology infrastructure, could adversely affect our business and operations.
Risks and exposures related to cybersecurity attacks are expected to remain high for the foreseeable future due to the rapidly evolving nature and sophistication of these threats, the continuing expansion of internet and mobile banking, and similar factors. Our use of artificial intelligence and machine learning technologies may expose us to regulatory, operational, and competitive risks.
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.
We also compete with fintech companies, securities brokerage firms, insurance companies, and other non-depository institutions with respect to some of 16 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.
Any failure, interruption or breach in security of these systems could result in failures or disruptions in our customer relationship management, general ledger, deposit, loan and other systems.
Any failure, interruption or breach in security of these systems could result in failures or disruptions in our customer relationship management, general ledger, deposit, loan and other systems. The financial services industry is also experiencing a rapid increase in the frequency and sophistication of fraudulent attacks, driven by the proliferation of AI-powered tools, deepfake technology, and organized, transnational crime rings.
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.
Our parent company is a separate and distinct legal entity from our bank. Generally, our parent company receives substantially all of its cash flow from dividends or returns of capital from our subsidiary bank.
Removed
Although we have programs in place related to business continuity, disaster recovery and information security to maintain the confidentiality, integrity, and availability of our systems, business applications and customer information, such disruptions may give rise to interruptions in service to customers and loss or liability to us.
Added
We use artificial intelligence ("AI") and machine learning technologies in certain aspects of our operations. While these technologies can provide significant benefits, they also present risks that could adversely affect our business. AI systems may produce inaccurate or biased outputs, which could result in regulatory compliance failures.
Removed
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.
Added
The use of AI in lending decisions is subject to increasing regulatory scrutiny, particularly with respect to fair lending requirements under the Equal Credit Opportunity Act and the Fair Housing Act. Regulators may challenge the use of AI models that produce results that are based upon potential bias, even if such impacts are unintentional.
Removed
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.
Added
Additionally, we face competitive pressures from fintech companies and other financial institutions that may be able to deploy AI technologies more aggressively or effectively than we can. Errors or failures in AI systems could result in operational disruptions, financial losses, reputational harm, or regulatory sanctions.
Added
As AI technology continues to evolve rapidly, there is significant uncertainty regarding future regulatory requirements and industry standards applicable to the use of AI by financial institutions.
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The regulatory landscape for AI in banking is still developing, and new regulations or guidance could require us to modify or discontinue certain uses of AI, incur significant compliance costs, or face enforcement actions. A significant portion of our deposits are uninsured, which could result in funding pressures and liquidity constraints during times of financial stress.
Added
A portion of our deposits exceeds the $250,000 FDIC insurance limit. As of December 31, 2025, our estimated uninsured deposits totaled approximately $1.176 billion, representing approximately 24.8% of our total deposits. Uninsured deposits may be more likely to be withdrawn during times of financial stress, which could result in funding pressures and liquidity constraints.
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In 2023, the failures of Silicon Valley Bank and Signature Bank highlighted the risks associated with high concentrations of uninsured deposits, as rapid deposit withdrawals contributed to those institutions' failures.
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We believe our depositor base is relatively diversified, and we take steps to manage uninsured deposit risk, including monitoring deposit concentrations, diversifying funding sources, and maintaining access to contingent liquidity facilities. However, there can be no assurance these measures will be effective in preventing deposit outflows during periods of market stress.
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A significant loss of deposits could require us to seek alternative funding sources, which may be more expensive or unavailable on acceptable terms, and could adversely affect our liquidity, financial condition, and results of operations. 12 Our concentration in commercial real estate loans exposes us to increased credit risk and regulatory scrutiny.
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As of December 31, 2025, our loans secured by commercial real estate (CRE) totaled approximately $1.055 billion representing approximately 24.7% of our total loan portfolio. The commercial real estate market has experienced increased stress with higher interest rates and changes in tenant demand adversely affecting property values and cash flows in certain segments of the CRE market.
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Regulatory agencies have increased their scrutiny of CRE lending concentrations, particularly with respect to office properties and other property types experiencing elevated stress. An extended period of stress in the commercial real estate market could result in increased loan delinquencies, higher credit losses, and reduced collateral values, which could adversely affect our financial condition and results of operations.
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We actively monitor our CRE portfolio and underwriting standards; however, there can be no assurance that these measures will be sufficient to avoid losses. We rely on third-party service providers for critical business functions, which exposes us to operational, cybersecurity, and regulatory risks.
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We rely on third-party service providers for significant components of our business operations, including core data processing systems, payment processing, cybersecurity monitoring, and other critical functions. Our core data processing systems are largely outsourced to third-party providers.
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This reliance on third parties creates concentration risk, as disruptions to our key service providers' operations, financial condition, or security could directly impact our ability to serve customers and conduct business. Cybersecurity incidents affecting our third-party vendors could result in unauthorized access to customer data, operational disruptions, and regulatory liability.
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In addition, our third-party providers may fail to comply with applicable laws and regulations, which could expose us to regulatory sanctions and reputational harm. Contract negotiations with critical vendors may result in unfavorable terms, and we may have limited ability to switch providers without significant cost and operational disruption.
Added
Regulatory agencies increasingly scrutinize financial institutions' third-party risk management practices, and we may face increased compliance costs and regulatory expectations in this area. Failure to effectively manage third-party risks could adversely affect our business, financial condition, and results of operations.
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Operational difficulties, including failure of technology infrastructure and the increasing occurrence and sophistication of attempts at fraudulent activity, could adversely affect our business and operations.
Added
We are subject to evolving, complex threats designed to bypass traditional security controls. Our failure to successfully anticipate or mitigate these evolving schemes could lead to increased financial losses, higher operational costs, regulatory penalties, and significant reputational damage.
Added
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.
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We realized net gains of $6.8 million on mortgage loans during 2025 compared to $6.6 million during 2024 and $7.4 million during 2023. An adverse outcome in certain overdraft fee litigation that has been brought against the bank could have a material adverse effect on our results of operations.
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We are currently a defendant in three putative class action lawsuits challenging aspects of our overdraft and/or insufficient funds fee practices, including allegations that fees were assessed in circumstances where transactions were authorized on a positive balance but later settled against a negative balance and/or that multiple fees were charged on re-presented items.
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For additional information, please see Note 11 – Commitments and Contingent Liabilities in the Notes to Consolidated Financial Statements in our annual report, to be delivered to shareholders in connection with the April 21, 2026 Annual Meeting of Shareholders (filed as exhibit 13 to this report on Form 10-K) for more information.
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An adverse outcome in any of these matters, through judgment or settlement, could result in monetary damages, restitution, remedial relief requiring changes to our products, disclosures, and systems, and an increase in legal and compliance costs, any of which could be material to our results of operations.
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Similar lawsuits against other financial institutions nationwide have resulted in substantial settlements, and plaintiffs’ firms continue to actively pursue these claims. Recent public settlements in overdraft-related litigation include payments by multiple institutions, reflecting the potential exposure in this area. Our parent company must rely on dividends or returns of capital from our bank for most of its cash flow.
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Rapid innovation in financial technology - including stablecoins and other digital assets, distributed ledger technologies, real‑time payment networks, embedded banking, and artificial intelligence - may change how consumers and businesses store value, make payments, access credit, and obtain financial services.
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These innovations could reduce our deposits (e.g., if customers hold value in stablecoins rather than bank accounts), compress or eliminate payment‑related and interchange revenues, and increase competition from non‑bank providers and larger technology firms with greater resources and scale.
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They may also require significant investments in systems, talent, cybersecurity, vendor oversight, and compliance, and expose us to new operational, fraud, liquidity, Bank Secrecy Act/anti‑money laundering, consumer protection, and third‑party risks.
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Legal and regulatory frameworks applicable to digital assets and related activities remain uncertain and may evolve rapidly; changes could restrict our ability to participate in or provide services to these markets, or increase our compliance costs and potential liabilities.
Added
If we are unable to adapt our products, pricing, and technology in a timely and cost‑effective manner, or if customers migrate to alternative platforms, our growth, funding, net interest margin, fee income, and overall financial condition could be materially and adversely affected. Competitive product and pricing pressures among financial institutions within our markets may change.

Item 1C. Cybersecurity

Cybersecurity — threats and controls disclosure

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Biggest changeOur process for addressing risk is based on banking industry best practices outlined in FFIEC and National Institute of Standards and Technology (“NIST”) frameworks. We engage various third-party service providers in connection with our cybersecurity processes. We routinely engage consultants and other third parties to assist in the continued improvement and maintenance of our cybersecurity risk assessment program.
Biggest changeOur process for addressing risk is based on banking industry best practices outlined by the FFIEC and in National Institute of Standards and Technology (“NIST”) frameworks. We engage various third-party service providers in connection with our cybersecurity processes. We routinely engage consultants and other third parties to assist in the continued improvement and maintenance of our cybersecurity risk assessment program.
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.
These individuals are responsible for the day-to-day implementation of our cybersecurity program, including providing immediate notice to our Chief Information Security Officer, Chief Operating 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 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.
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 third-party oversight process follows published frameworks from NIST and FFIEC to account for risks throughout the entire engagement with our third-party vendors. We consistently engage in proactive measures aimed at preventing, detecting, and effectively minimizing the impact of cybersecurity incidents.
Our third-party oversight process follows published best practices and frameworks from NIST and FFIEC to account for risks throughout the entire engagement with our third-party vendors. We consistently engage in proactive measures aimed at preventing, detecting, and effectively minimizing the impact of cybersecurity incidents.
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.
With regard to cybersecurity specifically, we have a Chief Information Security Officer who reports directly to our Chief Operating Officer, with a dotted-line reporting relationship to our Chief Executive Officer, and collaborates regularly with our Chief Risk Officer and Risk Team.
Our Board of Directors and Chief Executive Officer, in collaboration with our Chief Information Officer and Chief Risk Officer, oversee cybersecurity processes, risks, and threats. Rather than designate one specific board committee to cybersecurity risk management, our entire Board of Directors is responsible for overseeing our risk management.
Our Board of Directors and Chief Executive Officer, in collaboration with our Chief Operating Officer and Chief Risk Officer, oversee cybersecurity processes, risks, and threats. 18 Rather than designate one specific board committee to cybersecurity risk management, our entire Board of Directors is responsible for overseeing our risk management.

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 80 facilities in Michigan and one leased facility in Ohio. We own 56 and lease 24 of the facilities in Michigan.
Biggest changeITEM 2. PROPERTIES We and our bank operate a total of 79 facilities in Michigan and one leased facility in Ohio. We own 56 and lease 23 of the facilities in Michigan.
With the exception of the potential remodeling of certain facilities to provide for the efficient use of workspace or to maintain an appropriate appearance, each property is considered reasonably adequate for current and anticipated needs.
With the exception of the potential remodeling of certain facilities to provide for the efficient use of workspace or to maintain an appropriate appearance, each property is considered reasonably adequate for current and anticipated needs. 19

Item 3. Legal Proceedings

Legal Proceedings — active lawsuits and investigations

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Removed
ITEM 3. LEGAL PROCEEDINGS We are involved in various litigation matters in the ordinary course of business. At the present time, we do not believe any of these matters will have a significant impact on our consolidated financial position or results of operations.
Added
ITEM 3. LEGAL PROCEEDINGS We are involved in various litigation matters in the ordinary course of business, which currently include three putative class action complaints brought against the Bank alleging that its practice of charging overdraft and other fees was not consistent with the disclosures the Bank made to consumers.
Removed
The 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.
Added
While these matters do not involve a claim for damages that requires disclosure under this Item, please see Note 11 – Commitments and Contingent Liabilities in the Notes to Consolidated Financial Statements in our annual report, to be delivered to shareholders in connection with the April 21, 2026 Annual Meeting of Shareholders (filed as exhibit 13 to this report on Form 10-K) for more information.
Removed
At this time, we estimate the maximum amount of additional losses that are reasonably possible is insignificant. However, because of a number of factors, including the fact that certain of these litigation matters are still in their early stages, this maximum amount may change in the future.
Removed
The litigation matters described in the preceding paragraph primarily include claims that have been brought against us for damages, but do not include litigation matters where we seek to collect amounts owed to us by third parties (such as litigation initiated to collect delinquent loans).
Removed
These excluded, collection-related matters may involve claims or counterclaims by the opposing party or parties, but we have excluded such matters from the disclosure contained in the preceding paragraph in all cases where we believe the possibility of us paying damages to any opposing party is remote.

Item 4. Mine Safety Disclosures

Mine Safety Disclosures — required of mining issuers

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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.
Biggest changeErvin (60) Executive Vice President, Mortgage Banking 2017 Christopher S. Michaels (59) Executive Vice President, Chief Operating Officer(2) 2025 Michael J. Stodolak (65) Executive Vice President, Retail Banking(3) 2026 James J. Twarozynski (60) Senior Vice President and Chief Accounting Officer 2002 (1) Mr. Daniel is retiring from Independent Bank in March 2026. (2) 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. 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.
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 6, 2026. Name (Age) Position First elected as an executive officer William B.
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.
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. (3) Mr.
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.
Kessel (61) President, Chief Executive Officer and Director 2004 Gavin A. Mohr (42) Executive Vice President and Chief Financial Officer 2020 Stefanie M. Kimball (66) Executive Vice President and Chief Risk Officer 2007 Joel Rahn (59) Executive Vice President, Commercial Banking 2021 Larry R. Daniel (62) Executive Vice President, Operations and Retail Banking(1) 2017 Patrick J.
Removed
Mohr served as the Chief Financial Officer of STAR Financial Bank, ("STAR"), a $2.1 billion bank, located in Fort Wayne, Indiana. Prior to joining STAR, Mr. Mohr served as Treasurer of Yadkin Bank and Trust (Statesville, North Carolina) from 2013 to 2014. (2) Mr. Rahn joined Independent Bank in April of 2018 as Senior Vice President Commercial Lending.
Added
Stodolak joined Independent Bank in September of 2000 and has been leading the Bank’s retail network and consumer lending program. He was promoted to Executive Vice President, Retail Banking on January 1, 2026. 20 PART II.
Removed
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.

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, 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.
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, 2025: 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 2025 — $ — — 833,992 November 2025 81,735 32.76 81,438 752,554 December 2025 59,712 33.42 59,667 — Total 141,447 $ 37.37 141,105 — (1) November and December include 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 of 297 shares and 45 shares, respectively.
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.
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 21, 2026 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 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.
(2) The share repurchase plan we had in place for 2025 was announced on December 17, 2024, and expired on December 31, 2025. It authorized the repurchase during 2025 of up to 1,100,000 shares of our outstanding common stock.
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.
Pursuant to this Plan, during the fourth quarter of 2025, we issued 348 shares of common stock to non-employee directors on a current basis and 1,847 shares of common stock to the trust for distribution to directors on a deferred basis. These shares were issued on October 1, 2025, representing aggregate fees of $0.06 million.
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.
The shares issued on a current basis were issued at a price of $30.98 per share and the shares to be issued on a deferred basis were issued at a price of $27.88 per share, representing 90% of the fair value of the shares on the credit date.
Added
On December 16, 2025, we announced our 2026 share repurchase plan, which authorizes us to buy back up to 1,100,000 shares of our outstanding common stock

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 22, 2025 Annual Meeting of Shareholders (filed as exhibit 13 to this report on Form 10-K), is incorporated herein by reference. 19
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 21, 2026 Annual Meeting of Shareholders (filed as exhibit 13 to this report on Form 10-K), is incorporated herein by reference.

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 22, 2025 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 21, 2026 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