Independent Bank Corporation reported second quarter 2025 net income of $16.9 million, or $0.81 per diluted share, surpassing analyst estimates. This compares to net income of $18.5 million, or $0.88 per diluted share, in the prior-year period.
Net interest income for the quarter totaled $44.6 million, an increase of 7.9% from the year-ago period and 2.1% from the first quarter of 2025. The tax equivalent net interest margin expanded by 9 basis points quarter-over-quarter to 3.58%, up from 3.40% in the prior year.
Total loans, excluding those held for sale, reached $4.16 billion at June 30, 2025, an increase of $80.4 million from December 31, 2024, representing a 9.0% annualized growth rate. Commercial loans were a significant driver, increasing by $75.8 million, or 15.3% annualized, in Q2 2025.
Non-interest income for the second quarter was $11.3 million, down from $15.2 million in the prior year, primarily due to a non-recurring $2.7 million gain on equity securities in Q2 2024 and lower mortgage loan servicing, net. The decline in servicing revenue is attributed to the strategic sale of approximately $931 million of mortgage servicing rights on January 31, 2025.
The MSR sale reduced capitalized mortgage loan servicing rights to $32.1 million at June 30, 2025, from $46.8 million at year-end 2024. This transaction was executed to lower potential earnings volatility related to this asset in future periods. Credit metrics remained strong, with non-performing loans at $8.2 million, or 20 basis points of total loans.
The company repurchased 252,276 shares of common stock for $7.36 million in the first half of 2025 under its 2025 share repurchase plan. CEO William B. Kessel expressed optimism for continued growth in the balance of 2025 and 2026, citing strong business development and strategic investments in technology.
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