Independent Bank in Ionia, Mich., reported lower quarterly earnings due to margin pressure and a significantly higher tax expense.
The $2.2 billion-asset company's third-quarter earnings fell 52% from a year earlier, to $4.9 million. Independent's income tax expense was $2.3 million, compared to $300,000 a year earlier. The most recent quarter also included a $7.6 million benefit tied to redeeming preferred stock at a discount.
Net interest income fell 7%, to $18.2 million. Total loans rose 1%, to $1.4 billion, but the net interest margin compressed by 49 basis points, to 3.61%.
Noninterest income rose 7%, to $10.5 million, primarily due to gains on service charges on deposits and mortgage-loan servicing.
Noninterest expenses fell 15%, to $22 million, on lower costs tied to employee benefits, occupancy, data processing, and advertising.
The loan-loss provision shrank by 5%, to $18.8 million.
"We remain focused on long-term improvement in our profitability, primarily through organic growth in lending and core deposits," William Kessel, Independent's president and chief executive, said in a press release.