0001140361-21-007388 | 10-K | XBRL Viewer

Net Interest Income After Provision for Loan Losses

12,463

824

1,503

111,149

121,757

111,779

NON-INTEREST INCOME

Interchange income

11,230

10,297

9,905

Service charges on deposit accounts

8,517

11,208

12,258

Net gains on assets

Mortgage loans

62,560

19,978

10,597

Mortgage loan servicing, net

267

307

138

(9,350)

(3,336)

3,157

Other

7,521

9,282

8,760

Total Non-Interest Income

80,745

47,736

44,815

NON-INTEREST EXPENSE

Compensation and employee benefits

74,781

67,501

62,078

Occupancy, net

8,938

9,013

8,912

Data processing

8,534

8,905

8,262

Furniture, fixtures and equipment

4,089

4,113

4,080

Interchange expense

3,342

3,215

2,702

Communications

3,194

2,947

2,848

Loan and collection

3,037

2,685

2,682

Conversion related expense

2,586

Advertising

2,230

2,450

2,155

Legal and professional

2,027

1,814

1,839

FDIC deposit insurance

1,596

685

1,081

Net (gains) losses on other real estate and repossessed assets

(90)

(672)

Merger related expenses

3,465

Other

7,995

8,495

8,029

Total Non-interest Expense

122,413

111,733

107,461

Income Before Income Tax

69,481

57,760

49,133

Income tax expense

13,329

11,325

9,294

Net Income

$ 56,152

$ 46,435

$ 39,839

Net income per common share

Basic (in dollars per share)

^[1]

$ 2.56

$ 2.03

$ 1.70

Diluted (in dollars per share)

$ 2.53

$ 2.00

$ 1.68

[1]	Basic net income per common share includes weighted average common shares outstanding during the period and participating share awards.

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2020	Dec. 31, 2019	Dec. 31, 2018
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME [Abstract]
Net income	$ 56,152	$ 46,435	$ 39,839
Securities available for sale
Unrealized gain (loss) arising during period	15,611	10,235	(4,594)
Change in unrealized gains and losses for which a portion of other than temporary impairment has been recognized in earnings	(49)	(65)	(53)
Reclassification adjustments for gains included in earnings	(267)	(140)	(56)
Unrealized gains (losses) recognized in other comprehensive income (loss) on securities available for sale	15,295	10,030	(4,703)
Income tax expense (benefit)	3,212	2,106	(988)
Unrealized gains (losses) recognized in other comprehensive income (loss) on securities available for sale, net of tax	12,083	7,924	(3,715)
Derivative instruments
Unrealized losses arising during period	(354)	(1,603)	(262)
Reclassification adjustment for (income) expense recognized in earnings	2,539	(425)	(237)
Unrealized gains (losses) recognized in other comprehensive income (loss) on derivative instruments	2,185	(2,028)	(499)
Income tax expense (benefit)	458	(426)	(105)
Unrealized gains (losses) recognized in other comprehensive income (loss) on derivative instruments, net of tax	1,727	(1,602)	(394)
Other comprehensive income (loss)	13,810	6,322	(4,109)
Comprehensive income	$ 69,962	$ 52,757	$ 35,730

CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY - USD ($) $ in Thousands	Common Stock [Member]	Retained Earnings (Accumulated Deficit) [Member]	Accumulated Other Comprehensive Income (Loss) [Member]	Total
Balance at beginning of period at Dec. 31, 2017	$ 324,986	$ (54,054)	$ (5,999)	$ 264,933
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Net income	0	39,839	0	39,839
Cash dividends declared	0	(14,055)	0	(14,055)
Repurchase of common stock	(12,681)	0	0	(12,681)
Acquisition of TCSB Bancorp, Inc.	64,536	0	0	64,536
Issuance of common stock	267	0	0	267
Share based compensation	1,731	0	0	1,731
Share based compensation withholding obligation	(1,467)	0	0	(1,467)
Other comprehensive income (loss)	0	0	(4,109)	(4,109)
Balances at end of period at Dec. 31, 2018	377,372	(28,270)	(10,108)	338,994
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Net income	0	46,435	0	46,435
Cash dividends declared	0	(16,554)	0	(16,554)
Repurchase of common stock	(26,284)	0	0	(26,284)
Issuance of common stock	284	0	0	284
Share based compensation	1,854	0	0	1,854
Share based compensation withholding obligation	(882)	0	0	(882)
Other comprehensive income (loss)	0	0	6,322	6,322
Balances at end of period at Dec. 31, 2019	352,344	1,611	(3,786)	350,169
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Net income	0	56,152	0	56,152
Cash dividends declared	0	(17,618)	0	(17,618)
Repurchase of common stock	(14,231)	0	0	(14,231)
Issuance of common stock	15	0	0	15
Share based compensation	1,980	0	0	1,980
Share based compensation withholding obligation	(755)	0	0	(755)
Other comprehensive income (loss)	0	0	13,810	13,810
Balances at end of period at Dec. 31, 2020	$ 339,353	$ 40,145	$ 10,024	$ 389,522

CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY (Parenthetical) - $ / shares	12 Months Ended
	Dec. 31, 2020	Dec. 31, 2019	Dec. 31, 2018
CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY [Abstract]
Cash dividends declared (in dollars per share)	$ 0.80	$ 0.72	$ 0.60
Repurchase of shares of common stock (in shares)	708,956	1,204,688	587,969
Issuance of shares of common stock (in shares)	17,317	71,799	152,549
Share based compensation, common stock (in shares)	103,429	92,275	80,028
Share based compensation withholding obligation, common stock (in shares)	39,633	57,468	108,185

CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2020	Dec. 31, 2019	Dec. 31, 2018
CONSOLIDATED STATEMENTS OF CASH FLOWS [Abstract]
Net Income	$ 56,152	$ 46,435	$ 39,839
ADJUSTMENTS TO RECONCILE NET INCOME TO NET CASH FROM OPERATING ACTIVITIES
Proceeds from the sale of equity securities at fair value	0	560	0
Proceeds from sales of loans held for sale	1,478,908	642,537	463,699
Disbursements for loans held for sale	(1,438,982)	(647,606)	(457,077)
Provision for loan losses	12,463	824	1,503
Deferred income tax (benefit) expense	(2,130)	1,088	9,294
Net deferred loan fees (costs)	1,686	(2,936)	(4,044)
Net depreciation, amortization of intangible assets and premiums and accretion of discounts on securities, loans and interest bearing deposits - time	9,161	6,059	6,033
Net gains on mortgage loans	(62,560)	(19,978)	(10,597)
Net gains on securities available for sale	(267)	(307)	(138)
Net (gains) losses on other real estate and repossessed assets	64	(90)	(672)
Share based compensation	1,980	1,854	1,731
Increase in accrued income and other assets	(8,477)	(6,573)	(4,890)
Increase in accrued expenses and other liabilities	10,175	12,113	240
Total Adjustments	2,021	(12,455)	5,082
Net Cash From Operating Activities	58,173	33,980	44,921
CASH FLOW USED IN INVESTING ACTIVITIES
Proceeds from the sale of securities available for sale	38,095	68,716	48,736
Proceeds from maturities, prepayments and calls of securities available for sale	306,691	153,938	160,627
Purchases of securities available for sale	(859,068)	(237,672)	(103,493)
Proceeds from the sale of interest bearing deposits - time	0	0	2,474
Proceeds from the maturity of interest bearing deposits - time	350	250	3,728
Purchase of Federal Home Loan Bank stock	(68)	0	0
Purchase of Federal Reserve Bank stock	0	0	(2,038)
Net increase in portfolio loans (loans originated, net of principal payments)	(41,861)	(215,276)	(344,330)
Proceeds from the sale of portfolio loans	2,395	50,516	27,658
Cash received in the acquisition of TCSB Bancorp Inc.	0	0	23,516
Proceeds from the collection of vehicle service contract counterparty receivables	511	512	511
Proceeds from the sale of other real estate and repossessed assets	1,367	1,766	2,526
Proceeds from bank-owned life insurance	1,441	470	474
Proceeds from the sale of property and equipment	1,133	74	106
Capital expenditures	(4,383)	(4,936)	(3,862)
Net Cash Used in Investing Activities	(553,397)	(181,642)	(183,367)
CASH FLOW FROM FINANCING ACTIVITIES
Net increase in total deposits	600,628	123,299	225,185
Net increase (decrease) in other borrowings	(24,994)	25,002	(6,600)
Proceeds from Federal Home Loan Bank advances	239,254	111,000	1,272,000
Payments of Federal Home Loan Bank advances	(272,910)	(73,143)	(1,308,697)
Proceeds from issuance of subordinated debt, net of issuance costs	39,236	0	0
Dividends paid	(17,618)	(16,554)	(14,055)
Proceeds from issuance of common stock	15	284	267
Repurchase of common stock	(14,231)	(26,284)	(12,681)
Share based compensation withholding obligation	(755)	(882)	(1,467)
Net Cash From Financing Activities	548,625	142,722	153,952
Net Increase (Decrease) in Cash and Cash Equivalents	53,401	(4,940)	15,506
Cash and Cash Equivalents at Beginning of Year	65,304	70,244	54,738
Cash and Cash Equivalents at End of Year	118,705	65,304	70,244
Cash paid during the year for
Interest	16,912	26,697	16,737
Income taxes	15,500	9,534	120
Operating leases	1,785	2,201	0
Transfers to other real estate and repossessed assets	332	2,242	1,510
Transfer of mortgage loans to held for sale	0	36,622	41,471
Securitization of portfolio loans	26,324	65,070	10,869
Right of use assets obtained in exchange for lease obligations	1,587	9,906	0
Purchase of securities available for sale not yet settled	1,000	0	0
Common stock and stock options issued in TCSB Bancorp, Inc. acquisition	$ 0	$ 0	$ 64,536

ACCOUNTING POLICIES

12 Months Ended

Dec. 31, 2020

ACCOUNTING POLICIES [Abstract]

ACCOUNTING POLICIES

NOTE 1 – ACCOUNTING POLICIES

The accounting and reporting policies and practices of Independent Bank Corporation and subsidiaries (‘‘IBCP’’) conform to accounting principles generally accepted in the United States of America and prevailing practices within the banking industry. Our critical accounting policies include the determination of the allowance for loan losses (‘‘AFLL’’) and the valuation of capitalized mortgage loan servicing rights. We are required to make material estimates and assumptions that are particularly susceptible to changes in the near term as we prepare the consolidated financial statements and report amounts for each of these items. Actual results may vary from these estimates.

Our subsidiary, Independent Bank (‘‘Bank’’), transacts business in the single industry of commercial banking. Our Bank’s activities cover traditional phases of commercial banking, including checking and savings accounts, commercial lending, direct and indirect consumer financing and mortgage lending. Our principal markets are the rural and suburban communities across Lower Michigan that are served by our Bank’s branches and loan production offices as well as two loan productions offices we have in Ohio. At December 31, 2020, 67.0% of our Bank’s loan portfolio was secured by real estate.

PRINCIPLES OF CONSOLIDATION — The consolidated financial statements include the accounts of Independent Bank Corporation and its subsidiaries. The income, expenses, assets and liabilities of the subsidiaries are included in the respective accounts of the consolidated financial statements, after elimination of all intercompany accounts and transactions.

STATEMENTS OF CASH FLOWS — For purposes of reporting cash flows, cash and cash equivalents include cash on hand, amounts due from banks, interest bearing deposits and federal funds sold. Generally, federal funds are sold for one-day periods. We report net cash flows for customer loan and deposit transactions and for short-term borrowings.

INTEREST BEARING DEPOSITS — Interest bearing deposits consist of overnight deposits with the Federal Reserve Bank.

INTEREST BEARING DEPOSITS - TIME — Interest bearing deposits - time consist of deposits with original maturities of 3 months or more. All of these deposits are FDIC insured.

LOANS HELD FOR SALE — Mortgage loans originated and intended for sale in the secondary market are carried at fair value. Fair value adjustments, as well as realized gains and losses, are recorded in current earnings.

OPERATING SEGMENTS — While chief decision-makers monitor the revenue streams of our various products and services, operations are managed and financial performance is evaluated as one single unit. Discrete financial information is not available other than on a consolidated basis for material lines of business.

CAPITALIZED MORTGAGE LOAN SERVICING RIGHTS — We account for our capitalized mortgage loan servicing rights under the fair value method of accounting. We recognize as separate assets the rights to service mortgage loans for others. The fair value of capitalized mortgage loan servicing rights has been determined based upon fair value indications for similar servicing. Under the fair value method we measure capitalized mortgage loan servicing rights at fair value at each reporting date and report changes in fair value of capitalized mortgage loan servicing rights in earnings in the period in which the changes occur and are included in mortgage loan servicing, net in the Consolidated Statements of Operations. The fair values of capitalized mortgage loan servicing rights are subject to significant fluctuations as a result of changes in estimated and actual prepayment speeds and default rates and losses.

Mortgage loan servicing income is recorded for fees earned for servicing loans previously sold. The fees are generally based on a contractual percentage of the outstanding principal and are recorded as income when earned. Mortgage loan servicing fees, excluding fair value changes of capitalized mortgage loan servicing rights, totaled $6.9 million, $6.2 million and $5.5 million for the years ended December 31, 2020, 2019 and 2018, respectively. Late fees and ancillary fees related to loan servicing are not material.

TRANSFERS OF FINANCIAL ASSETS — Transfers of financial assets are accounted for as sales when control over the assets has been relinquished. Control over transferred assets is deemed to be surrendered when the assets

have been isolated from us, the transferee obtains the right (free of conditions that constrain it from taking advantage of that right) to pledge or exchange the transferred assets, and we do not maintain effective control over the transferred assets through an agreement to repurchase them before their maturity.

SECURITIES — We classify our securities as equity, trading, held to maturity or available for sale. Equity securities are investments in certain equity stocks and are reported at fair value with realized and unrealized gains and losses included in earnings. Trading securities are bought and held principally for the purpose of selling them in the near term and are reported at fair value with realized and unrealized gains and losses included in earnings. Securities held to maturity represent those securities for which we have the positive intent and ability to hold until maturity and are reported at cost, adjusted for amortization of premiums and accretion of discounts computed on the level-yield method. We did not have any equity securities, trading securities or securities held to maturity at December 31, 2020 and 2019. Securities available for sale represent those securities not classified as equity, trading or held to maturity and are reported at fair value with unrealized gains and losses, net of applicable income taxes reported in other comprehensive income (loss).

We evaluate securities for other than temporary impairment (‘‘OTTI’’) at least on a quarterly basis and more frequently when economic or market conditions warrant such an evaluation. In performing this evaluation, management considers (1) the length of time and extent that fair value has been less than cost, (2) the financial condition and near term prospects of the issuer, (3) the impact of changes in market interest rates on the market value of the security and (4) an assessment of whether we intend to sell, or it is more likely than not that we will be required to sell a security in an unrealized loss position before recovery of its amortized cost basis. For securities that do not meet the aforementioned recovery criteria, the amount of impairment recognized in earnings is limited to the amount related to credit losses, while impairment related to other factors is recognized in other comprehensive income (loss). The credit loss is defined as the difference between the present value of the cash flows expected to be collected and the amortized cost basis.

Gains and losses realized on the sale of securities available for sale are determined using the specific identification method and are recognized on a trade-date basis.

FEDERAL HOME LOAN BANK (‘‘FHLB’’) STOCK — Our Bank subsidiary is a member of the FHLB system. Members are required to own a certain amount of stock based on the level of borrowings and other factors, and may invest in additional amounts. FHLB stock is carried at cost, classified as a restricted security, and periodically evaluated for impairment based on ultimate recovery of par value. Both cash and stock dividends are reported as income in interest income-other investments on the Consolidated Statements of Operations.

FEDERAL RESERVE BANK (‘‘FRB’’) STOCK — Our Bank subsidiary is a member of its regional Federal Reserve Bank. FRB stock is carried at cost, classified as a restricted security, and periodically evaluated for impairment based on ultimate recovery of par value. Both cash and stock dividends are reported as income in interest income-other investments on the Consolidated Statements of Operations.

LOAN REVENUE RECOGNITION — Interest on loans is accrued based on the principal amounts outstanding. In general, the accrual of interest income is discontinued when a loan becomes 90 days past due for commercial loans and installment loans and when a loan misses four consecutive payments for mortgage loans and the borrower’s capacity to repay the loan and collateral values appear insufficient for each loan class. However, loans may be placed on non-accrual status regardless of whether or not such loans are considered past due if, in management’s opinion, the borrower is unable to meet payment obligations as they become due or as required by regulatory provisions. All interest accrued but not received for all loans placed on non-accrual is reversed from interest income. Payments on such loans are generally applied to the principal balance until qualifying to be returned to accrual status. A non-accrual loan may be restored to accrual status when interest and principal payments are current and the loan appears otherwise collectible. Delinquency status for all classes in the commercial and installment loan segments is based on the actual number of days past due as required by the contractual terms of the loan agreement while delinquency status for mortgage loan segment classes is based on the number of payments past due.

Certain loan fees and direct loan origination costs are deferred and recognized as an adjustment of yield generally over the contractual life of the related loan. Fees received in connection with loan commitments are

deferred until the loan is advanced and are then recognized generally over the contractual life of the loan as an adjustment of yield. Fees on commitments that expire unused are recognized at expiration. Fees received for letters of credit are recognized as revenue over the life of the commitment.

ALLOWANCE FOR LOAN LOSSES — Portfolios are disaggregated into segments for purposes of determining the allowance for loan losses (‘‘AFLL’’) which include commercial, mortgage and installment loans. These segments are further disaggregated into classes for purposes of monitoring and assessing credit quality based on certain risk characteristics. Classes within the commercial loan segment include (i) commercial and industrial and (ii) commercial real estate. Classes within the mortgage loan segment include (i) 1-4 family owner occupied - jumbo, (ii) 1-4 family owner occupied - non-jumbo, (iii) 1-4 family non-owner occupied (iv) 1-4 family - 2nd lien and (v) resort lending. Classes within the installment loan segment include (i) boat lending, (ii) recreational vehicle lending, and (iii) other. Commercial loans are subject to adverse market conditions which may impact the borrower’s ability to make repayment on the loan or could cause a decline in the value of the collateral that secures the loan. Mortgage and installment loans are subject to adverse employment conditions in the local economy which could increase default rates. In addition, mortgage loans and real estate based installment loans are subject to adverse market conditions which could cause a decline in the value of collateral that secures the loan. For an analysis of the AFLL by portfolio segment and credit quality information by class, see note #4.

Some loans will not be repaid in full. Therefore, an AFLL is maintained at a level which represents our best estimate of losses incurred. In determining the AFLL and the related provision for loan losses, we consider four principal elements: (i) specific allocations based upon probable losses identified during the review of the loan portfolio, (ii) allocations established for other adversely rated commercial loans, (iii) allocations based principally on historical loan loss experience, and (iv) additional allocations based on subjective factors, including local and general economic business factors and trends, portfolio concentrations and changes in the size and/or the general terms of the loan portfolios.

The first AFLL element (specific allocations) reflects our estimate of probable incurred losses based upon our systematic review of specific loans. These estimates are based upon a number of objective factors, such as payment history, financial condition of the borrower, discounted collateral exposure and discounted cash flow analysis. Impaired commercial, mortgage and installment loans are allocated AFLL amounts using this first element. The second AFLL element (other adversely rated commercial loans) reflects the application of our loan rating system. This rating system is similar to those employed by state and federal banking regulators. Commercial loans that are rated below a certain predetermined classification are assigned a loss allocation factor for each loan classification category that is based upon a historical analysis of both the probability of default and the expected loss rate (‘‘loss given default’’). The lower the rating assigned to a loan or category, the greater the allocation percentage that is applied. The third AFLL element (historical loss allocations) is determined by assigning allocations to higher rated (‘‘non-watch credit’’) commercial loans using a probability of default and loss given default similar to the second AFLL element and to homogenous mortgage and installment loan groups based upon borrower credit score and portfolio segment. For homogenous mortgage and installment loans a probability of default for each homogenous pool is calculated by way of credit score migration. Historical loss data for each homogenous pool coupled with the associated probability of default is utilized to calculate an expected loss allocation rate. The fourth AFLL element (additional allocations based on subjective factors) is based on factors that cannot be associated with a specific credit or loan category and reflects our attempt to reasonably ensure that the overall AFLL appropriately reflects a margin for the imprecision necessarily inherent in the estimates of expected credit losses. We consider a number of subjective factors when determining this fourth element, including local and general economic business factors and trends, portfolio concentrations and changes in the size, mix and the general terms of the overall loan portfolio.

During the first quarter of 2019, we deployed a third-party software solution (we previously used spreadsheet software) to assist in the determination of our AFLL. This new third-party software also has assisted us in moving to the expected loss framework that we plan to adopt on January 1, 2021. Although the use of this new third-party software did not have any material impact on our overall AFLL, it did result in some classification shifts from the AFLL related to subjective factors into the AFLL related to historical losses as the new software model allowed us to capture longer historical look-back periods (previously this was being captured in the subjective portion of the AFLL).

Increases in the AFLL are recorded by a provision for loan losses charged to expense. Although we periodically allocate portions of the AFLL to specific loans and loan portfolios, the entire AFLL is available for incurred losses.

We generally charge-off commercial, homogenous residential mortgage and installment loans when they are deemed uncollectible or reach a predetermined number of days past due based on loan product, industry practice and other factors. Collection efforts may continue and recoveries may occur after a loan is charged against the AFLL.

While we use relevant information to recognize losses on loans, additional provisions for related losses may be necessary based on changes in economic conditions, customer circumstances and other credit risk factors.

A loan is impaired when full payment under the loan terms is not expected. Generally, those loans included in each commercial loan class that are rated substandard, classified as non-performing or were classified as non-performing in the preceding quarter, are evaluated for impairment. Those loans included in each mortgage loan or installment loan class whose terms have been modified and considered a troubled debt restructuring are also impaired. Loans which have been modified resulting in a concession, and which the borrower is experiencing financial difficulties, are considered troubled debt restructurings (‘‘TDR’’) and classified as impaired. We measure our investment in an impaired loan based on one of three methods: the loan’s observable market price, the fair value of the collateral or the present value of expected future cash flows discounted at the loan’s effective interest rate. Large groups of smaller balance homogeneous loans, such as those loans included in each installment and mortgage loan class, are collectively evaluated for impairment and accordingly, they are not separately identified for impairment disclosures. TDR loans are measured at the present value of estimated future cash flows using the loan’s effective interest rate at inception of the loan. If a TDR is considered to be a collateral dependent loan, the loan is reported net, at the fair value of collateral. A loan can be removed from TDR status if it is subsequently restructured and the borrower is no longer experiencing financial difficulties and the newly restructured agreement does not contain any concessions to the borrower. The new agreement must specify market terms, including a contractual interest rate not less than a market interest rate for a new loan with similar credit risk characteristics, and other terms no less favorable to us than those we would offer for a similar new loan.

PROPERTY AND EQUIPMENT — Property and equipment is stated at cost less accumulated depreciation and amortization. Depreciation and amortization is computed using the straight-line method over the estimated useful lives of the related assets. Buildings are generally depreciated over a period not exceeding 39 years and equipment is generally depreciated over periods not exceeding 7 years. Leasehold improvements are depreciated over the shorter of their estimated useful life or lease period.

BANK OWNED LIFE INSURANCE — We have purchased a group flexible premium non-participating variable life insurance contract on approximately 265 lives (who were salaried employees at the time we purchased the contract) in order to recover the cost of providing certain employee benefits. Bank owned life insurance is recorded at its cash surrender value or the amount that can be currently realized.

OTHER REAL ESTATE AND REPOSSESSED ASSETS — Other real estate at the time of acquisition is recorded at fair value, less estimated costs to sell, which becomes the property’s new basis. Fair value is typically determined by a third party appraisal of the property. Any write-downs at date of acquisition are charged to the AFLL. Expense incurred in maintaining other real estate and subsequent write-downs to reflect declines in value and gains or losses on the sale of other real estate are recorded in non-interest expense in the Consolidated Statements of Operations. Non-real estate repossessed assets are treated in a similar manner.

OTHER INTANGIBLES — Other intangible assets consist of core deposits. They are initially measured at fair value and then are amortized on both straight-line and accelerated methods over their estimated useful lives, which range from 10 to 15 years.

GOODWILL — Goodwill arises from business combinations and is generally determined as the excess of the fair value of the consideration transferred over the fair value of the net assets acquired and liabilities assumed as of the acquisition date. Goodwill acquired in a purchase business combination and determined to have an indefinite useful life is not amortized, but tested for impairment at least annually or more frequently if events and circumstances exists that indicate that a goodwill impairment test should be performed. We have selected December 31 as the date to perform the annual impairment test. Goodwill is the only intangible asset with an indefinite life on our Consolidated Statements of Financial Condition.

INCOME TAXES — We employ the asset and liability method of accounting for income taxes. This method establishes deferred tax assets and liabilities for the temporary differences between the financial reporting basis and the tax basis of our assets and liabilities at tax rates expected to be in effect when such amounts are realized or settled. Under this method, the effect of a change in tax rates is recognized in the period that includes the enactment date. The deferred tax asset is subject to a valuation allowance for that portion of the asset for which it is more likely than not that it will not be realized.

A tax position is recognized as a benefit only if it is ‘‘more likely than not’’ that the tax position would be sustained in a tax examination, with a tax examination being presumed to occur. The amount recognized is the largest amount of tax benefit that is greater than 50% likely of being realized on examination.

We recognize interest and/or penalties related to income tax matters in income tax expense in the Consolidated Statements of Operations.

We file a consolidated federal income tax return. Intercompany tax liabilities are settled as if each subsidiary filed a separate return.

COMMITMENTS TO EXTEND CREDIT AND RELATED FINANCIAL INSTRUMENTS — Financial instruments may include commitments to extend credit and standby letters of credit. Financial instruments involve varying degrees of credit and interest-rate risk in excess of amounts reflected in the Consolidated Statements of Financial Condition. Exposure to credit risk in the event of non-performance by the counterparties to the financial instruments for loan commitments to extend credit and letters of credit is represented by the contractual amounts of those instruments. In general, we use a similar methodology to estimate our liability for these off-balance sheet credit exposures as we do for our AFLL. For commercial related commitments, we estimate liability using our loan rating system and for mortgage and installment commitments we estimate liability principally upon historical loss experience. Our estimated liability for off balance sheet commitments is included in accrued expenses and other liabilities in our Consolidated Statements of Financial Condition and any charge or recovery is recorded in non-interest expense - other in our Consolidated Statements of Operations.

DERIVATIVE FINANCIAL INSTRUMENTS — We record derivatives on our Consolidated Statements of Financial Condition as assets and liabilities measured at their fair value. The accounting for increases and decreases in the value of derivatives depends upon the use of derivatives and whether the derivatives qualify for hedge accounting.

At the inception of the derivative we designate the derivative as one of three types based on our intention and belief as to likely effectiveness as a hedge. These three types are (1) a hedge of the fair value of a recognized asset or liability or of an unrecognized firm commitment (‘‘Fair Value Hedge’’), (2) a hedge of a forecasted transaction or the variability of cash flows to be received or paid related to a recognized asset or liability (‘‘Cash Flow Hedge’’), or (3) an instrument with no hedging designation. For a Fair Value Hedge, the gain or loss on the derivative, as well as the offsetting loss or gain on the hedged item, are recognized in interest income in our Consolidated Statements of Operations. For a Cash Flow Hedge, the gain or loss on the derivative is reported in other comprehensive income (loss) and is reclassified into earnings in the same periods during which the hedged transaction affects earnings. For instruments with no hedging designation, the gain or loss on the derivative is reported in earnings. These free standing instruments currently consist of (i) mortgage banking related derivatives and include rate-lock loan commitments to fund mortgage loans (interest rate locks) to be sold into the secondary market and mandatory forward commitments for the future delivery of these mortgage loans, (ii) certain pay-fixed and pay-variable interest rate swap agreements related to commercial loan customers and (iii) certain purchased and written options related to a time deposit product. The fair value of rate-lock mortgage loan commitments is based on agency cash window loan pricing for comparable assets and the fair value of mandatory commitments to sell mortgage loans is based on mortgage backed security pricing for comparable assets. We enter into mandatory forward commitments for the future delivery of mortgage loans generally when interest rate locks are entered into in order to hedge the change in interest rates resulting from our commitments to fund the loans. Changes in the fair values of these derivatives are included in net gains on mortgage loans in the Consolidated Statements of Operations. Fair values of the pay-fixed and pay-variable interest rate swap agreements are derived from proprietary models which utilize current market data and are included in net interest income in the Consolidated Statements of Operations. Fair values of the purchased and written options are based on prices of financial instruments with similar characteristics and are included in net interest income in the Consolidated Statements of Operations.

Net cash settlements on derivatives that qualify for hedge accounting are recorded in interest expense in the Consolidated Statements of Operations. Net cash settlements on derivatives that do not qualify for hedge accounting are reported in non-interest income (mortgage banking related derivatives) or net interest income (interest rate swap agreements and options) in the Consolidated Statements of Operations. Cash flows on hedges are classified in the cash flow statement the same as the cash flows of the items being hedged.

We formally document the relationship between derivatives and hedged items, as well as the risk- management objective and the strategy for undertaking hedge transactions, at the inception of the hedging relationship. This documentation includes linking Fair Value or Cash Flow Hedges to specific assets and liabilities on the Consolidated Statements of Financial Condition or to specific firm commitments or forecasted transactions. We discontinue hedge accounting when it is determined that the derivative is no longer effective in offsetting changes in the fair value or cash flows of the hedged item, the derivative is settled or terminates, a hedged forecasted transaction is no longer probable, a hedged firm commitment is no longer firm, or treatment of the derivative as a hedge is no longer appropriate or intended.

When hedge accounting is discontinued, subsequent changes in fair value of the derivative are recorded in earnings. When a Fair Value Hedge is discontinued, the hedged asset or liability is no longer adjusted for changes in fair value and the existing basis adjustment is amortized or accreted over the remaining life of the asset or liability. When a Cash Flow Hedge is discontinued but the hedged cash flows or forecasted transactions are still expected to occur, gains or losses that were accumulated in other comprehensive income (loss) are amortized into earnings over the same periods which the hedged transactions will affect earnings.

COMPREHENSIVE INCOME — Comprehensive income consists of net income and unrealized gains and losses, net of tax, on securities available for sale and derivative instruments classified as cash flow hedges.

NET INCOME PER COMMON SHARE — Basic net income per common share is computed by dividing net income by the weighted average number of common shares outstanding during the period and participating share awards. All outstanding unvested share-based payment awards that contain rights to nonforfeitable dividends are considered participating securities for this calculation. For diluted net income per common share, net income is divided by the weighted average number of common shares outstanding during the period plus the assumed exercise of stock options, restricted stock units, performance share units and stock units for a deferred compensation plan for non-employee directors.

SHARE BASED COMPENSATION — Cost is recognized for non-vested share awards issued to employees based on the fair value of these awards at the date of grant. A simulation analysis which considers potential outcomes for a large number of independent scenarios is utilized to estimate the fair value of performance share units and the market price of our common stock at the date of grant is used for other non-vested share awards. Cost is recognized over the required service period, generally defined as the vesting period. Forfeitures are recognized as they occur. Cost is also recognized for stock issued to non-employee directors. These shares vest immediately and cost is recognized during the period they are issued.

COMMON STOCK — At December 31, 2020, 0.1 million shares of common stock were reserved for issuance under the dividend reinvestment plan and 0.6 million shares of common stock were reserved for issuance under our long-term incentive plans.

RECLASSIFICATION — Certain amounts in the 2019 and 2018 consolidated financial statements have been reclassified to conform to the 2020 presentation.

ADOPTION OF NEW ACCOUNTING STANDARDS — In August 2018, the Financial Accounting Standards Board (‘‘FASB’’) issued Accounting Standards Update (‘‘ASU’’) 2018-13, ‘‘Fair Value Measurement (Topic 820), Disclosure Framework – Changes to the Disclosure Requirements for Fair Value Measurement’’. This new ASU amends disclosure requirements in Topic 820 to eliminate, add and modify certain disclosure requirements for fair value measurements as part of its disclosure framework project. The amended guidance eliminates the requirements to disclose the amount of and reasons for transfers between Level 1 and Level 2 of the fair value hierarchy, the entity’s policy for the timing of transfers between levels of the fair value hierarchy and the entity’s valuation processes for Level 3 fair value measurements. The amended guidance adds the requirements to disclose the changes in unrealized gains and losses for the period included in other comprehensive income for recurring Level 3 fair value measurements of instruments held at the end of the reporting period and for recurring and nonrecurring Level 3 fair value

measurements, the range and weighted average used to develop significant unobservable inputs and how the weighted average was calculated, with certain exceptions. This amended guidance was effective for us on January 1, 2020, and did not have a material impact on our consolidated operating results or financial condition.

In June 2016, the FASB issued ASU 2016-13, ‘‘Financial Instruments — Credit Losses (Topic 326), Measurement of Credit Losses on Financial Instruments’’. This ASU significantly changes how entities will measure credit losses for most financial assets and certain other instruments that are not measured at fair value through net income. This ASU:

•

Replaces the existing incurred loss impairment guidance and establishes a single allowance framework for financial assets carried at amortized cost, which will reflect our estimate of credit losses over the full remaining expected life of the financial assets and will consider expected future changes in macroeconomic conditions.

•

Eliminates existing guidance for purchase credit impaired (‘‘PCI’’) loans, and requires recognition of the nonaccretable difference as an increase to the allowance for expected credit losses on financial assets purchased with more than insignificant credit deterioration since origination, which will be offset by an increase in the recorded investment of the related loans.

•	Requires inclusion of expected recoveries, limited to the cumulative amount of prior write-offs, when estimating the allowance for credit losses for in scope financial assets (including collateral dependent assets).

•

Amends existing impairment guidance for securities available for sale to incorporate an allowance, which will allow for reversals of credit impairments in the event that the credit of an issuer improves. Credit losses on securities available for sale are limited to the amount of the decline in fair value regardless of what the credit loss model would show for impairment.

•	Generally requires a cumulative-effect adjustment to retained earnings as of the beginning of the reporting period of adoption.

We began evaluating this ASU in 2016 and established a company-wide, cross-discipline governance structure, which provides implementation oversight. We continued to test and refine our current expected credit loss models that satisfied the requirements of this ASU. Oversight and testing, as well as efforts to meet expanded disclosure requirements, extended through the end of 2020. We currently expect to estimate losses over approximately a one year forecast period using external economic forecast sources, including the Federal Open Market Committee median economic projections, and then revert to longer term historical loss experience to estimate losses over more extended periods. We were originally required to adopt this ASU on January 1, 2020 but section 4014 of the Coronavirus Aid, Relief, and Economic Security (“CARES”) Act allowed for temporary relief from applying this ASU. Under the amended CARES Act we were allowed to delay the adoption of this ASU until the earlier of the termination of the national emergency that was declared on March 13, 2020, or January 1, 2022. Early adoption is also allowed on either January 1, 2020 or January 1, 2021. As such, we chose to delay the adoption of this ASU during 2020 and continue to utilize the existing incurred loss impairment methodology to calculate our allowance for loan losses and our provision for loan losses as required under Accounting Standards Codification 310 (Receivables). We plan to adopt this ASU as allowed under the amended CARES Act on January 1, 2021.

We expect to recognize a one-time cumulative effect adjustment to beginning retained earnings at January 1, 2021 increasing the allowance for loan losses. We are estimating an increase to the allowance for loan losses at that time to be in the range of $10.5 million to $12.5 million primarily driven by the longer contractual maturities of our mortgage and consumer installment loan portfolio segments. In addition, we currently expect this ASU to increase the allowance for losses related to unfunded loan commitments between $0.5 million and $1.5 million. The ultimate impact of adopting this ASU, and at each subsequent reporting period, is highly dependent on credit quality, economic forecasts and conditions, composition of our loan portfolios and securities available for sale, along with other management judgments. The transition adjustment to record the allowance for credit losses may fall outside of our estimated increase based on the finalization of assumptions including qualitative adjustments and the economic forecast used in calculating the allowance for credit losses upon the adoption of CECL.

We do not expect a material allowance for credit losses to be recorded on securities available for sale upon adoption of this ASU.

In March 2020, the FASB issued ASU 2020-04, ‘‘Reference Rate Reform (Topic 848), Facilitation of the Effects of Reference Rate Reform on Financial Reporting’’. This new ASU provides temporary optional expedients and exceptions to GAAP guidance on contract modifications and hedge accounting to ease the financial reporting burdens of the expected market transition from LIBOR and other interbank offered rates to alternative reference rates. Entities can elect not to apply certain modification accounting requirements to contracts affected by reference rate reform, if certain criteria are met. Entities that make such elections would not have to remeasure contracts at the modification date or reassess a previous accounting determination. Entities can elect various optional expedients that would allow them to continue applying hedge accounting for hedging relationships affected by reference rate reform, if certain criteria are met. This amended guidance and our ability to elect its temporary optional expedients and exceptions are effective for us as of March 12, 2020 through December 31, 2022.

RESTRICTIONS ON CASH AND DUE FROM BANKS	12 Months Ended
RESTRICTIONS ON CASH AND DUE FROM BANKS	Dec. 31, 2020
RESTRICTIONS ON CASH AND DUE FROM BANKS [Abstract]
RESTRICTIONS ON CASH AND DUE FROM BANKS	NOTE 2 – RESTRICTIONS ON CASH AND DUE FROM BANKS During March 2020 the FRB, in response to the COVID-19 pandemic, reduced our Bank’s reserve balance requirements to zero. Prior to that time our Bank was required to maintain reserve balances in the form of vault cash and balances with the FRB. The average reserve balances to be maintained during 2020 and 2019 were $9.2 million and $26.6 million, respectively. We do not maintain compensating balances with correspondent banks. We are also required to maintain reserve balances related to certain mortgage banking related derivatives not classified as hedges and to our merchant payment processing operations and for certain investment security transactions. These balances are held at unrelated financial institutions and totaled $0.74 million and $0.01 million at December 31, 2020 and 2019, respectively.

SECURITIES

12 Months Ended

Dec. 31, 2020

SECURITIES [Abstract]

SECURITIES

NOTE 3 – SECURITIES

Securities available for sale consist of the following at December 31:

	Amortized		Unrealized
	Cost		Gains		Losses		Fair Value
	(In thousands)
2020
U.S. agency	$	10,456	$	305	$	13	$	10,748
U.S. agency residential mortgage-backed		340,224		4,951		593		344,582
U.S. agency commercial mortgage-backed		6,869		326		-		7,195
Private label mortgage-backed		41,429		1,539		139		42,829
Other asset backed		252,596		1,796		211		254,181
Obligations of states and political subdivisions		315,795		8,676		178		324,293
Corporate		82,307		3,807		97		86,017
Trust preferred		1,971		-		173		1,798
Foreign government		500		16		-		516
Total	$	1,052,147	$	21,416	$	1,404	$	1,072,159

2019
U.S. agency	$	14,591	$	89	$	19	$	14,661
U.S. agency residential mortgage-backed		226,130		1,910		278		227,762
U.S. agency commercial mortgage-backed		10,671		113		28		10,756
Private label mortgage-backed		39,248		544		99		39,693
Other asset backed		94,158		103		375		93,886
Obligations of states and political subdivisions		94,499		1,724		121		96,102
Corporate		31,904		1,296		5		33,195
Trust preferred		1,968		-		125		1,843
Foreign government		499		3		-		502
Total	$	513,668	$	5,782	$	1,050	$	518,400

At December 31, 2020 we have entered into a pay-fixed interest rate swap to protect a portion of the fair value of certain securities available for sale. The fair value adjustment to securities available for sale was an unrealized loss of $0.015 million at December 31, 2020. See note 16 - Derivative Financial Instruments.

Total OTTI recognized in accumulated other comprehensive income (loss) for securities available for sale was zero at both December 31, 2020 and 2019, respectively.

Our investments’ gross unrealized losses and fair values aggregated by investment type and length of time that individual securities have been at a continuous unrealized loss position, at December 31 follows:

	Less Than Twelve Months				Twelve Months or More				Total
	Fair Value		Unrealized Losses		Fair Value		Unrealized Losses		Fair Value		Unrealized Losses
	(In thousands)

2020
U.S. agency	$	1,469	$	3	$	2,329	$	10	$	3,798	$	13
U.S. agency residential mortgage-backed		96,839		592		83		1		96,922		593
Private label mortgage-backed		11,838		95		2,050		44		13,888		139
Other asset backed		7,142		25		21,197		186		28,339		211
Obligations of states and political subdivisions		28,957		177		800		1		29,757		178
Corporate		1,924		97		-		-		1,924		97
Trust preferred		-		-		1,798		173		1,798		173
Total	$	148,169	$	989	$	28,257	$	415	$	176,426	$	1,404

2019
U.S. agency	$	2,782	$	8	$	2,712	$	11	$	5,494	$	19
U.S. agency residential mortgage-backed		56,377		126		13,551		152		69,928		278
U.S. agency commercial mortgage-backed		3,284		24		659		4		3,943		28
Private label mortgage-backed		16,387		55		343		44		16,730		99
Other asset backed		34,027		233		13,839		142		47,866		375
Obligations of states and political subdivisions		15,666		84		5,396		37		21,062		121
Corporate		2,125		5		-		-		2,125		5
Trust preferred		-		-		1,843		125		1,843		125
Total	$	130,648	$	535	$	38,343	$	515	$	168,991	$	1,050

Our portfolio of securities available for sale is reviewed quarterly for impairment in value. In performing this review, management considers (1) the length of time and extent that fair value has been less than cost, (2) the financial condition and near term prospects of the issuer, (3) the impact of changes in market interest rates on the market value of the security and (4) an assessment of whether we intend to sell, or it is more likely than not that we will be required to sell a security in an unrealized loss position before recovery of its amortized cost basis. For securities that do not meet the aforementioned recovery criteria, the amount of impairment recognized in earnings is limited to the amount related to credit losses, while impairment related to other factors is recognized in other comprehensive income (loss).

U.S. agency, U.S. agency residential mortgage-backed securities and U.S. agency commercial mortgage backed securities — at December 31, 2020, we had 25 U.S. agency, and 37 U.S. agency residential mortgage-backed securities whose fair value is less than amortized cost. The unrealized losses are largely attributed to widening spreads to Treasury bond since acquisition.

Private label mortgage backed, other asset backed and corporate securities — at December 31, 2020, we had 20 private label mortgage backed, 33 other asset backed and four corporate securities whose fair value is less than amortized cost. Unrealized losses are primarily due to credit spread since their acquisition.

Two private label mortgage-backed securities (discussed further below) were reviewed for other than temporary impairment (‘‘OTTI’’) utilizing a cash flow projection. The cash flow analysis forecasts cash flow from the underlying loans in each transaction and then applies these cash flows to the bonds in the securitization.

Obligations of states and political subdivisions — at December 31, 2020, we had 27 municipal securities whose fair value is less than amortized cost. The unrealized losses are primarily due to wider benchmark pricing spreads since acquisition.

Trust preferred securities — at December 31, 2020, we had two trust preferred securities whose fair value is less than amortized cost. Both of our trust preferred securities are single issue securities issued by a trust subsidiary of a bank holding company. The pricing of trust preferred securities has suffered from credit spread widening. One of the securities is rated by a major rating agency as investment grade while the other one is non-rated. The non-rated issue is a relatively small bank and was never rated. The issuer of this non-rated trust preferred security, which had a total amortized cost of $1.0 million and total fair value of $0.87 million as of December 31, 2020, continues to have satisfactory credit metrics and make interest payments.

As management does not intend to liquidate any of the securities discussed above and it is more likely than not that we will not be required to sell these securities prior to recovery of these unrealized losses, no declines discussed above (other than certain declines related to the two private label mortgage-backed securities currently being reviewed for OTTI) are deemed to be other than temporary.

We recorded zero credit related OTTI charges in the Consolidated Statements of Operations on securities available for sale during 2020, 2019, and 2018.

At December 31, 2020, two private label mortgage-backed securities had credit related OTTI and are summarized as follows:

	Senior Security		Super Senior Security		Total
	(In thousands)

As of December 31, 2020
Fair value	$	373	$	505	$	878
Amortized cost		350		326		676
Non-credit unrealized loss		-		-		-
Unrealized gain		23		179		202
Cumulative credit related OTTI		757		457		1,214

Both of these securities are receiving principal and interest payments similar to principal reductions in the underlying collateral and have unrealized gains at December 31, 2020. The original amortized cost (current amortized cost excluding cumulative credit related OTTI) for each of these securities has been permanently adjusted downward for previously recorded credit related OTTI. The unrealized loss (based on original amortized cost) for these securities is now less than previously recorded credit related OTTI amounts.

A roll forward of credit losses recognized in earnings on securities available for sale for the years ending December 31 follow:

	2020		2019			2018
	(In thousands)
	$	1,214	$	1,594		$	1,594
Additions to credit losses on securities for which no previous OTTI was recognized		-		-			-
Increases to credit losses on securities for which OTTI was previously recognized		-		-			-
Reduction(1)		-		(380	)		-
Total	$	1,214	$	1,214		$	1,594

(1)	During 2019 one security with previously recorded OTTI was settled and balance is now zero.

The amortized cost and fair value of securities available for sale at December 31, 2020, by contractual maturity, follow:

	Amortized Cost		Fair Value
	(In thousands)
Maturing within one year	$	21,244	$	21,412
Maturing after one year but within five years		79,837		82,725
Maturing after five years but within ten years		76,454		80,060
Maturing after ten years		233,494		239,175
		411,029		423,372
U.S. agency residential mortgage-backed		340,224		344,582
U.S. agency commercial mortgage-backed		6,869		7,195
Private label mortgage-backed		41,429		42,829
Other asset backed		252,596		254,181
Total	$	1,052,147	$	1,072,159

The actual maturity may differ from the contractual maturity because issuers may have the right to call or prepay obligations with or without call or prepayment penalties.

A summary of proceeds from the sale of securities available for sale and gains and losses for the years ended December 31 follow:

			Realized
	Proceeds		Gains (1)		Losses
	(In thousands)
2020	$	38,095	$	271	$	4
2019		68,716		248		108
2018		48,736		192		136

(1)	2018 excludes a $0.144 million gain on the sale of 1,000 VISA Class B shares.

Certain preferred stocks which were all sold during 2019 had been classified as equity securities at fair value in our Consolidated Statement of Financial Condition. During 2019 and 2018, we recognized gains (losses) on these preferred stocks of $0.17 million and $(0.06) million, respectively, that are included in net gains on securities in the Consolidated Statements of Operations. Zero and $(0.06) million of these amounts relate to gains (losses) recognized on preferred stock still held at each respective year end.

Securities available for sale with a book value of $14.0 million and $8.7 million at December 31, 2020 and 2019, respectively, were pledged to secure borrowings, derivatives, public deposits and for other purposes as required by law. There were no investment obligations of state and political subdivisions that were payable from or secured by the same source of revenue or taxing authority that exceeded 10% of consolidated total shareholders’ equity at December 31, 2020 or 2019.

LOANS

12 Months Ended

Dec. 31, 2020

LOANS [Abstract]

LOANS

NOTE 4 – LOANS

Our loan portfolios at December 31 follow:

	2020		2019
	(In thousands)
Real estate (1)
Residential first mortgages	$	792,762	$	843,746
Residential home equity and other junior mortgages		138,128		166,735
Construction and land development		232,693		249,747
Other (2)		669,150		693,580
Consumer		468,090		448,297
Commercial		429,011		318,504
Agricultural		3,844		4,414
Total loans	$	2,733,678	$	2,725,023

(1)	Includes both residential and non-residential commercial loans secured by real estate.

(2)	Includes loans secured by multi-family residential and non-farm, non-residential property.

Loans include net deferred loan costs of $14.6 million and $16.3 million at December 31, 2020 and 2019, respectively.

During 2020, we securitized $26.3 million of portfolio residential fixed rate mortgage loans servicing retained with Freddie Mac and recognized a gain on sale of $0.72 million. We also sold $2.4 million of portfolio residential fixed rate mortgage loans servicing retained into the secondary market and recognized a gain on sale of $0.07 million. These transactions were done primarily for asset/liability management purposes.

During 2019, we sold $40.6 million of residential adjustable rate mortgage loans servicing released (classified on the Consolidated Statements of Financial Condition as held for sale, carried at the lower of cost or fair value at December 31, 2018) to another financial institution and recognized a gain on sale of $0.01 million. We also securitized $65.1 million of portfolio residential fixed rate mortgage loans servicing retained with Freddie Mac and recognized a gain on sale of $1.7 million. In addition, we sold $9.9 million of residential fixed and adjustable rate portfolio mortgage loans servicing retained to another financial institution and recognized a gain on sale of $0.07 million. These transactions were done primarily for asset/liability management purposes.

During 2018, we sold $27.6 million of residential fixed and adjustable rate portfolio mortgage loans servicing retained to another financial institution and recognized a gain on sale of $0.04 million. We also securitized $10.9 million of portfolio residential fixed rate mortgage loans servicing retained with Freddie Mac recognizing a loss on sale of approximately $0.1 million. These transactions were done primarily for asset/liability management purposes.

An analysis of the allowance for loan losses by portfolio segment for the years ended December 31 follows:

	Commercial			Mortgage			Installment			Subjective Allocation		Total
	(In thousands)
2020
Balance at beginning of period	$	7,922		$	8,216		$	1,283		$	8,727	$	26,148
Additions (deductions)
Provision for loan losses		1,751			(915	)		436			11,191		12,463
Recoveries credited to allowance		1,804			513			752			-		3,069
Loans charged against the allowance		(4,076	)		(816	)		(1,359	)		-		(6,251	)
Balance at end of period	$	7,401		$	6,998		$	1,112		$	19,918	$	35,429

2019
Balance at beginning of period	$7,090	$7,978	$895	$8,925	$24,888
Additions (deductions)
Provision for loan losses	(651)	526	1,147	(198)	824
Recoveries credited to allowance	2,165	933	863	-	3,961
Loans charged against the allowance	(682)	(1,221)	(1,622)	-	(3,525)
Balance at end of period	$7,922	$8,216	$1,283	$8,727	$26,148

2018
Balance at beginning of period	$5,595	$8,733	$864	$7,395	$22,587
Additions (deductions)
Provision for loan losses	(946)	457	462	1,530	1,503
Recoveries credited to allowance	2,889	734	999	-	4,622
Loans charged against the allowance	(448)	(1,946)	(1,430)	-	(3,824)
Balance at end of period	$7,090	$7,978	$895	$8,925	$24,888

Allowance for loan losses and recorded investment in loans by portfolio segment at December 31 follows:

	Commercial		Mortgage		Installment		Subjective Allocation		Total
	(In thousands)
2020
Allowance for loan losses:
Individually evaluated for impairment	$	1,266	$	4,124	$	191	$	-	$	5,581
Collectively evaluated for impairment		6,135		2,874		921		19,918		29,848
Loans acquired with deteriorated credit quality		-		-		-		-		-
Total ending allowance for loan losses balance	$	7,401	$	6,998	$	1,112	$	19,918	$	35,429

Loans
Individually evaluated for impairment	$	9,431	$	39,245	$	1,996			$	50,672
Collectively evaluated for impairment		1,236,052		980,449		474,379				2,690,880
Loans acquired with deteriorated credit quality		468		410		147				1,025
Total loans recorded investment		1,245,951		1,020,104		476,522				2,742,577
Accrued interest included in recorded investment		3,536		4,178		1,185				8,899
Total loans	$	1,242,415	$	1,015,926	$	475,337			$	2,733,678

2019
Allowance for loan losses:
Individually evaluated for impairment	$1,031	$4,863	$261	$-	$6,155
Collectively evaluated for impairment	6,891	3,353	1,022	8,727	19,993
Loans acquired with deteriorated credit quality	-	-	-	-	-
Total ending allowance for loan losses balance	$7,922	$8,216	$1,283	$8,727	$26,148

Loans
Individually evaluated for impairment	$9,393	$43,574	$2,925		$55,892
Collectively evaluated for impairment	1,158,906	1,058,917	457,370		2,675,193
Loans acquired with deteriorated credit quality	1,394	575	316		2,285
Total loans recorded investment	1,169,693	1,103,066	460,611		2,733,370
Accrued interest included in recorded investment	2,998	4,155	1,194		8,347
Total loans	$1,166,695	$1,098,911	$459,417		$2,725,023

Non-performing loans include both smaller balance homogeneous loans that are collectively evaluated for impairment and individually classified impaired loans. If these loans had continued to accrue interest in accordance with their original terms, approximately $0.5 million, $0.4 million and $0.4 million of interest income would have been recognized in each of the years ended 2020, 2019 and 2018, respectively. Interest income recorded on these loans was approximately zero during each of the years ended 2020, 2019 and 2018.

Loans on non-accrual status and past due more than 90 days (‘‘Non-performing Loans’’) at December 31 follow⁽¹⁾:

	90+ and Still Accruing		Non- Accrual		Total Non- Performing Loans
	(In thousands)
2020
Commercial
Commercial and industrial (2)	$	-	$	1,387	$	1,387
Commercial real estate		-		-		-
Mortgage
1-4 family owner occupied - jumbo		-		623		623
1-4 family owner occupied - non-jumbo (3)		-		2,281		2,281
1-4 family non-owner occupied		-		1,112		1,112
1-4 family - 2nd lien		-		1,344		1,344
Resort lending		-		607		607
Installment
Boat lending		-		52		52
Recreational vehicle lending		-		74		74
Other		-		393		393
Total recorded investment	$	-	$	7,873	$	7,873
Accrued interest included in recorded investment	$	-	$	-	$	-
2019
Commercial
Commercial and industrial (2)	$	-	$	565	$	565
Commercial real estate		-		735		735
Mortgage
1-4 family owner occupied - jumbo		-		1,179		1,179
1-4 family owner occupied - non-jumbo (3)		-		3,540		3,540
1-4 family non-owner occupied		-		1,039		1,039
1-4 family - 2nd lien		-		979		979
Resort lending		-		690		690
Installment
Boat lending		-		332		332
Recreational vehicle lending		-		3		3
Other		-		470		470
Total recorded investment	$	-	$	9,532	$	9,532
Accrued interest included in recorded investment	$	-	$	-	$	-

(1)	Non-performing loans exclude purchase credit impaired loans.

(2)	Non-performing commercial and industrial loans exclude $0.053 million and $0.077 million of government guaranteed loans at December 31, 2020 and 2019, respectively.

(3)	Non-performing 1-4 family owner occupied – non jumbo loans exclude $0.386 million and $0.569 million of government guaranteed loans at December 31, 2020 and 2019, respectively.

An aging analysis of loans by class at December 31 follows:

	Loans Past Due								Loans not		Total
	30-59 days		60-89 days		90+ days		Total		Past Due		Loans
	(In thousands)
2020
Commercial
Commercial and industrial	$	5,003	$	131	$	70	$	5,204	$	671,115	$	676,319
Commercial real estate		2,600		-		-		2,600		567,032		569,632
Mortgage
1-4 family owner occupied - jumbo		761		-		623		1,384		438,794		440,178
1-4 family owner occupied - non-jumbo		1,888		453		502		2,843		264,730		267,573
1-4 family non-owner occupied		1,184		139		476		1,799		157,977		159,776
1-4 family - 2nd lien		710		228		732		1,670		92,860		94,530
Resort lending		32		195		358		585		57,462		58,047
Installment
Boat lending		95		101		-		196		207,317		207,513
Recreational vehicle lending		207		37		48		292		169,282		169,574
Other		337		162		199		698		98,737		99,435
Total recorded investment	$	12,817	$	1,446	$	3,008	$	17,271	$	2,725,306	$	2,742,577
Accrued interest included in recorded investment	$	147	$	22	$	-	$	169	$	8,730	$	8,899

2019
Commercial
Commercial and industrial	$	-	$	289	$	102	$	391	$	564,480	$	564,871
Commercial real estate		177		-		735		912		603,910		604,822
Mortgage
1-4 family owner occupied - jumbo		1,757		1,037		-		2,794		398,759		401,553
1-4 family owner occupied - non-jumbo		2,672		852		1,387		4,911		342,349		347,260
1-4 family non-owner occupied		695		136		623		1,454		168,083		169,537
1-4 family - 2nd lien		909		90		386		1,385		115,157		116,542
Resort lending		364		53		565		982		67,192		68,174
Installment
Boat lending		337		107		88		532		202,750		203,282
Recreational vehicle lending		161		97		3		261		153,184		153,445
Other		377		275		202		854		103,030		103,884
Total recorded investment	$	7,449	$	2,936	$	4,091	$	14,476	$	2,718,894	$	2,733,370
Accrued interest included in recorded investment	$	74	$	34	$	-	$	108	$	8,239	$	8,347

Impaired loans are as follows:

	December 31,
	2020		2019
	(In thousands)
Impaired loans with no allocated allowance for loan losses
TDR	$	93	$	337
Non - TDR		1,367		1,550
Impaired loans with an allocated allowance for loan losses
TDR - allowance based on collateral		9,027		1,587
TDR - allowance based on present value cash flow		37,953		48,798
Non - TDR - allowance based on collateral		1,873		3,365
Total impaired loans	$	50,313	$	55,637

Amount of allowance for loan losses allocated
TDR - allowance based on collateral	$	1,058	$	542
TDR - allowance based on present value cash flow		3,755		4,641
Non - TDR - allowance based on collateral		768		972
Total amount of allowance for loan losses allocated	$	5,581	$	6,155

Impaired loans by class as of December 31 are as follows:

	2020						2019
	Recorded Investment		Unpaid Principal Balance		Related Allowance for Loan Losses		Recorded Investment		Unpaid Principal Balance		Related Allowance for Loan Losses
	(In thousands)
With no related allowance for loan losses recorded:
Commercial
Commercial and industrial	$	77	$	80	$	-	$	257	$	257	$	-
Commercial real estate		-		-		-		796		796		-
Mortgage
1-4 family owner occupied - jumbo		623		629		-		-		-		-
1-4 family owner occupied - non-jumbo		-		-		-		212		217		-
1-4 family non-owner occupied		305		473		-		214		366		-
1-4 family - 2nd lien		301		304		-		407		438		-
Resort lending		154		379		-		-		-		-
Installment
Boat lending		-		-		-		-		-		-
Recreational vehicle lending		-		-		-		-		-		-
Other		-		-		-		1		41		-
		1,460		1,865		-		1,887		2,115		-

	2020			2019
	Recorded Investment	Unpaid Principal Balance	Related Allowance for Loan Losses	Recorded Investment	Unpaid Principal Balance	Related Allowance for Loan Losses
	(In thousands)
With an allowance for loan losses recorded:
Commercial
Commercial and industrial	2,227	2,370	756	1,655	1,706	453
Commercial real estate	7,127	7,096	510	6,685	6,661	578
Mortgage
1-4 family owner occupied - jumbo	506	880	50	1,447	1,445	91
1-4 family owner occupied - non-jumbo	21,655	22,311	2,300	10,163	10,695	1,031
1-4 family non-owner occupied	4,335	4,704	495	4,962	5,542	572
1-4 family - 2nd lien	811	829	200	14,059	15,243	1,695
Resort lending	10,555	10,764	1,079	12,110	12,263	1,474
Installment
Boat lending	7	11	2	-	-	-
Recreational vehicle lending	87	100	19	-	-	-
Other	1,902	2,040	170	2,924	3,153	261
	49,212	51,105	5,581	54,005	56,708	6,155
Total
Commercial
Commercial and industrial	2,304	2,450	756	1,912	1,963	453
Commercial real estate	7,127	7,096	510	7,481	7,457	578
Mortgage
1-4 family owner occupied - jumbo	1,129	1,509	50	1,447	1,445	91
1-4 family owner occupied - non-jumbo	21,655	22,311	2,300	10,375	10,912	1,031
1-4 family non-owner occupied	4,640	5,177	495	5,176	5,908	572
1-4 family - 2nd lien	1,112	1,133	200	14,466	15,681	1,695
Resort lending	10,709	11,143	1,079	12,110	12,263	1,474
Installment
Boat lending	7	11	2	-	-	-
Recreational vehicle lending	87	100	19	-	-	-
Other	1,902	2,040	170	2,925	3,194	261
Total	$50,672	$52,970	$5,581	$55,892	$58,823	$6,155

Accrued interest included in recorded investment	$359			$255

Average recorded investment in and interest income earned (of which the majority of these amounts were received in cash and related primarily to performing TDR’s) on impaired loans by class for the years ended December 31 follows:

	2020				2019				2018
	Average Recorded Investment		Interest Income Recognized		Average Recorded Investment		Interest Income Recognized		Average Recorded Investment		Interest Income Recognized
	(In thousands)
With no related allowance for loan losses recorded:
Commercial
Commercial and industrial	$	125	$	9	$	51	$	-	$	378	$	20
Commercial real estate		159		-		278		5		961		-
Mortgage
1-4 family owner occupied - jumbo		408		-		-		-		41		-
1-4 family owner occupied - non-jumbo		252		4		201		-		15		27
1-4 family non-owner occupied		308		10		123		-		-		-
1-4 family - 2nd lien		380		-		136		7		-		-
Resort lending		92		-		-		-		-		-
Installment
Boat lending		-		-		-		-		-		-
Recreational vehicle lending		-		-		-		-		-		-
Other		-		-		-		1		1		11
		1,724		23		789		13		1,396		58
With an allowance for loan losses recorded:
Commercial
Commercial and industrial		2,230		242		2,256		72		2,641		127
Commercial real estate		10,751		1,043		5,778		315		5,199		288
Mortgage
1-4 family owner occupied - jumbo		1,083		84		995		39		1,335		69
1-4 family owner occupied - non-jumbo		19,624		2,033		15,183		594		28,183		1,408
1-4 family non-owner occupied		4,664		375		2,874		291		5,475		314
1-4 family - 2nd lien		3,376		22		13,383		809		284		12
Resort lending		11,316		799		11,697		669		14,687		606
Installment
Boat lending		59		1		54		-		1		-
Recreational vehicle lending		81		4		22		-		84		4
Other		2,416		225		3,186		189		3,640		224
		55,600		4,828		55,428		2,978		61,529		3,052
Total
Commercial
Commercial and industrial		2,355		251		2,307		72		3,019		147
Commercial real estate		10,910		1,043		6,056		320		6,160		288
Mortgage
1-4 family owner occupied - jumbo		1,491		84		995		39		1,376		69
1-4 family owner occupied - non-jumbo		19,876		2,037		15,384		594		28,198		1,435
1-4 family non-owner occupied		4,972		385		2,997		291		5,475		314
1-4 family - 2nd lien		3,756		22		13,519		816		284		12
Resort lending		11,408		799		11,697		669		14,687		606
Installment
Boat lending		59		1		54		-		1		-
Recreational vehicle lending		81		4		22		-		84		4
Other		2,416		225		3,186		190		3,641		235
Total	$	57,324	$	4,851	$	56,217	$	2,991	$	62,925	$	3,110

Troubled debt restructurings at December 31 follow:

	2020
	Commercial		Retail (1)			Total
	(In thousands)
Performing TDR’s	$	7,956	$	36,385		$	44,341
Non-performing TDR’s (2)		1,148		1,584	⁽³⁾		2,732
Total	$	9,104	$	37,969		$	47,073

	2019
	Commercial		Retail (1)			Total
	(In thousands)
Performing TDR’s	$	7,974	$	39,601		$	47,575
Non-performing TDR’s (2)		540		2,607	⁽³⁾		3,147
Total	$	8,514	$	42,208		$	50,722

(1)	Retail loans include mortgage and installment loan portfolio segments.

(2)	Included in non-performing loans table above.

(3)	Also includes loans on non-accrual at the time of modification until six payments are received on a timely basis.

We have allocated $4.8 million and $5.2 million of specific reserves to customers whose loan terms have been modified in troubled debt restructurings as of December 31, 2020 and 2019, respectively. We have committed to lend additional amounts totaling up to $0.07 million and $0.05 million at December 31, 2020 and 2019, respectively, to customers with outstanding loans that are classified as troubled debt restructurings.

The terms of certain loans were modified as troubled debt restructurings and generally included one or a combination of the following: a reduction of the stated interest rate of the loan; an extension of the maturity date at a stated rate of interest lower than the current market rate for a new loan with similar risk; or a permanent reduction of the recorded investment in the loan.

Modifications involving a reduction of the stated interest rate of the loan have generally been for periods ranging from 9 months to 36 months but have extended to as much as 480 months in certain circumstances. Modifications involving an extension of the maturity date have generally been for periods ranging from 1 month to 60 months but have extended to as much as 230 months in certain circumstances.

Loans that have been classified as troubled debt restructurings during the years ended December 31 follow:

	Number of Contracts		Pre-modification Recorded Balance		Post-modification Recorded Balance
	(Dollars in thousands)
2020
Commercial
Commercial and industrial		7	$	1,207	$	1,207
Commercial real estate		4		7,012		7,012
Mortgage
1-4 family owner occupied - jumbo		-		-		-
1-4 family owner occupied - non-jumbo		5		357		374
1-4 family non-owner occupied		2		111		116
1-4 family - 2nd lien		2		44		46
Resort lending		-		-		-
Installment
Boat lending		-		-		-
Recreational vehicle lending		-		-		-
Other		4		91		93
Total		24	$	8,822	$	8,848

	Number of Contracts	Pre-modification Recorded Balance	Post-modification Recorded Balance
	(Dollars in thousands)

2019
Commercial
Commercial and industrial	8	$1,609	$1,609
Commercial real estate	3	1,479	1,479
Mortgage
1-4 family owner occupied - jumbo	-	-	-
1-4 family owner occupied - non-jumbo	2	478	483
1-4 family non-owner occupied	1	507	505
1-4 family - 2nd lien	3	75	75
Resort lending	-	-	-
Installment
Boat lending	-	-	-
Recreational vehicle lending	-	-	-
Other	7	188	191
Total	24	$4,336	$4,342
2018
Commercial
Commercial and industrial	7	$652	$652
Commercial real estate	2	204	204
Mortgage
1-4 family owner occupied - jumbo	1	419	419
1-4 family owner occupied - non-jumbo	9	991	994
1-4 family non-owner occupied	-	-	-
1-4 family - 2nd lien	-	-	-
Resort lending	1	115	114
Installment
Boat lending	-	-	-
Recreational vehicle lending	-	-	-
Other	14	708	709
Total	34	$3,089	$3,092

The troubled debt restructurings described above increased (decreased) the AFLL by $0.04 million, $0.50 million and $(0.19) million during the years ended December 31, 2020, 2019 and 2018, respectively and resulted in charge offs of zero during each of the years ended December 31, 2020, 2019 and 2018, respectively.

Loans that have been classified as troubled debt restructured during the past twelve months and that have subsequently defaulted during the years ended December 31 follows:

	Number of Contracts		Recorded Balance
2020	(Dollars in thousands)
Commercial
Commercial and industrial		-	$	-
Commercial real estate		-		-
Mortgage
1-4 family owner occupied - jumbo		-		-
1-4 family owner occupied - non-jumbo		-		-
1-4 family non-owner occupied		-		-
1-4 family - 2nd lien		-		-
Resort lending		-		-
Installment
Boat lending		-		-
Recreational vehicle lending		-		-
Other		-		-
Total		-	$	-

2019
Commercial
Commercial and industrial		1	$	19
Commercial real estate		-		-
Mortgage
1-4 family owner occupied - jumbo		-		-
1-4 family owner occupied - non-jumbo		1		12
1-4 family non-owner occupied		-		-
1-4 family - 2nd lien		-		-
Resort lending		-		-
Installment
Boat lending		-		-
Recreational vehicle lending		-		-
Other		-		-
Total		2	$	31

2018
Commercial
Commercial and industrial		-	$	-
Commercial real estate		-		-
Mortgage
1-4 family owner occupied - jumbo		-		-
1-4 family owner occupied - non-jumbo		-		-
1-4 family non-owner occupied		-		-
1-4 family - 2nd lien		-		-
Resort lending		-		-
Installment
Boat lending		-		-
Recreational vehicle lending		-		-
Other		1		13
Total		1	$	13

A loan is generally considered to be in payment default once it is 90 days contractually past due under the modified terms for commercial loans and installment loans and when four consecutive payments are missed for mortgage loans.

The troubled debt restructurings that subsequently defaulted described above increased (decreased) the AFLL by zero during each of the years ended December 31, 2020, 2019 and 2018 and resulted in charge offs of zero during each of the years ended December 31, 2020, 2019 and 2018.

The terms of certain other loans were modified during the years ending December 31, 2020, 2019 and 2018 that did not meet the definition of a troubled debt restructuring. The modification of these loans could have included modification of the terms of a loan to borrowers who were not experiencing financial difficulties or a delay in a payment that was considered to be insignificant.

In order to determine whether a borrower is experiencing financial difficulty, we perform an evaluation of the probability that the borrower will be in payment default on any of its debt in the foreseeable future without the modification. This evaluation is performed under our internal underwriting policy.

Non-TDR Loan Modifications and Paycheck Protection Program (“PPP”) due to COVID-19 - On March 22, 2020, the federal banking agencies issued an “Interagency Statement on Loan Modifications and Reporting for Financial Institutions Working with Customers Affected by the Coronavirus”. This guidance encourages financial institutions to work prudently with borrowers that may be unable to meet their contractual obligations because of the effects of COVID-19. The guidance goes on to explain that in consultation with the Financial Accounting Standards Board staff that the federal banking agencies conclude that short-term modifications (e.g. six months or less) made on a good faith basis to borrowers who were current (less than 30 days past due) as of the implementation date of a relief program are not TDRs. In addition, on March 27, 2020, the CARES Act was signed into law. Section 4013 of the CARES Act also addressed COVID-19 related modifications and specified that COVID-19 related modifications on loans that were current (less than 30 days past due) as of December 31, 2019 are not TDRs. We are assisting both commercial and retail (mortgage and installment) borrowers with reduced or suspended payments. Commercial loan accommodations are typically a three month interest-only period while retail loan (mortgage and installment) forbearances have primarily been payment suspensions for three months. For loans subject to these forbearance agreements each borrower is required to resume making regularly scheduled loan payments at the end of the forbearance period. The deferred principal and interest will be repaid based upon individualized agreements. Options for repayment include separate repayment plans, extending the term of the loan or re-amortizing the loan based upon the affordability of the payment in relationship to a reduced income. While some borrowers may elect to make a lump sum payment, we anticipate the majority will require some type of repayment plan. During the forbearance period, the loan will not be reported as past due in keeping with the guidance discussed previously.

A summary of remaining accommodations that had been entered into under this guidance as of December 31, 2020 follows:

Commercial and Retail Loan COVID-19 Accomodations

	Covid-19 Accomodations					Total		% of Total
Loan Category		Loans (#)		Loans ($)		Loans		Loans
	(Dollars in thousands)
Commercial			2	$	163	$	1,242,415		0.0	%
Mortgage			134		19,830		1,015,926		2.0	%
Installment			48		1,412		475,337		0.3	%
Total			184	$	21,405	$	2,733,678		0.8	%
Mortgage loans serviced for others(1)			288	$	42,897	$	2,984,088		1.4	%

1)	We have delegated authority from all investors to grant these deferrals on their behalf.

Information on subsequent accommodation extensions for portfolio loans follows:

Commercial and Retail Loan COVID-19 Subsequent Accomodations (1)

Loan Category	Loans (#)		Loans ($)
	(Dollars in thousands)
Commercial		2	$	163
Mortgage		100		15,004
Installment		35		1,045
Total		137	$	16,212

(1)	Subsequent accommodations are extensions of the original accommodations that were given as summarized in the paragraph above.

The CARES Act also included an initial $349 billion loan program administered through the U.S. Small Business Administration (“SBA”) referred to as the PPP. Under the PPP, small businesses and other entities and individuals can apply for loans from existing SBA lenders and other approved regulated lenders that enroll in the program, subject to numerous limitations and eligibility criteria. We are participating as a lender in the PPP. The PPP opened on April 3, 2020 intending to provide American small businesses with eight weeks of cash-flow assistance through 100 percent federally guaranteed loans through the SBA. In late April 2020 the Paycheck Protection Program and Health Care Enhancement Act, added another $310 billion in funding while the Paycheck Protection Program Flexibility Act made certain changes to the program, by allowing for more time to spend the funds, and making it easier to get a loan fully forgiven. The PPP initially closed on August 8, 2020. On December 27, 2020, the Economic Aid to Hard-Hit Small Businesses, Nonprofits, and Venues Act (“Economic Aid Act”) was signed into law which allocates an additional $284 billion in funding for the PPP. The Economic Aid Act reopens the PPP through March 31, 2021 with generally the same terms and conditions as originally enacted under the CARES Act while clarifying eligibility and ineligibility for certain entities and expanding the permitted uses of PPP funds. In addition, the Economic Aid Act simplifies the loan forgiveness process for PPP loans of $150,000 or less. The Economic Aid Act also establishes second draw loans for entities that have already used the initial PPP funds, subject to numerous limitations and eligibility criteria. PPP second draw loans are eligible for forgiveness similar to initial PPP loans, subject to limitations set forth in the Economic Aid Act. As of December 31, 2020, we had 1,483 initial PPP loans outstanding with a total balance of $169.8 million. PPP loans are included in the commercial and industrial class of the commercial loan portfolio segment. As these loans are 100% guaranteed through the SBA the allowance for loan losses recorded on these loans is zero. As of December 31, 2020, 755 forgiveness applications had been processed and approved for initial PPP loans totaling $92.0 million (we expect to receive these forgiveness proceeds during the first quarter of 2021). Interest and fees on loans in our consolidated statement of operations includes $5.6 million for the twelve month period of 2020, related to the accretion of net loan fees on initial PPP loans. No such accretion is included in the comparable prior year periods. At December 31, 2020 we had $3.2 million of remaining unaccreted net fees related to initial PPP loans. We had no PPP second draw loans outstanding as of December 31, 2020.

Credit Quality Indicators – As part of our on-going monitoring of the credit quality of our loan portfolios, we track certain credit quality indicators including (a) risk grade of commercial loans, (b) the level of classified commercial loans, (c) credit scores of mortgage and installment loan borrowers, and (d) delinquency history and non-performing loans.

For commercial loans, we use a loan rating system that is similar to those employed by state and federal banking regulators. Loans are graded on a scale of 1 to 12. A description of the general characteristics of the ratings follows:

Rating 1 through 6: These loans are generally referred to as our ‘‘non-watch’’ commercial credits that include very high or exceptional credit fundamentals through acceptable credit fundamentals.

Rating 7 and 8: These loans are generally referred to as our ‘‘watch’’ commercial credits. These ratings include loans to borrowers that exhibit potential credit weakness or downward trends. If not checked or cured these trends could weaken our asset or credit position. While potentially weak, no loss of principal or interest is envisioned with these ratings.

Rating 9: These loans are generally referred to as our ‘‘substandard accruing’’ commercial credits. This rating includes loans to borrowers that exhibit a well-defined weakness where payment default is probable and loss is possible if deficiencies are not corrected. Generally, loans with this rating are considered collectible as to both principal and interest primarily due to collateral coverage.

Rating 10 and 11: These loans are generally referred to as our ‘‘substandard - non-accrual’’ and ‘‘doubtful’’ commercial credits. These ratings include loans to borrowers with weaknesses that make collection of debt in full, on the basis of current facts, conditions and values at best questionable and at worst improbable. All of these loans are placed in non-accrual.

Rating 12: These loans are generally referred to as our ‘‘loss’’ commercial credits. This rating includes loans to borrowers that are deemed incapable of repayment and are charged-off.

The following table summarizes loan ratings by loan class for our commercial loan portfolio segment at December 31:

	Commercial
	Non-watch 1-6		Watch 7-8		Substandard Accrual 9		Non- Accrual 10-11		Total
					(In thousands)
2020
Commercial and industrial	$	637,826	$	32,765	$	4,341	$	1,387	$	676,319
Commercial real estate		561,382		5,978		2,272		-		569,632
Total	$	1,199,208	$	38,743	$	6,613	$	1,387	$	1,245,951
Accrued interest included in total	$	3,408	$	105	$	23	$	-	$	3,536

2019
Commercial and industrial	$	515,955	$	44,384	$	3,967	$	565	$	564,871
Commercial real estate		580,516		23,036		535		735		604,822
Total	$	1,096,471	$	67,420	$	4,502	$	1,300	$	1,169,693
Accrued interest included in total	$	2,763	$	205	$	30	$	-	$	2,998

For each of our mortgage and installment portfolio segment classes we generally monitor credit quality based on the credit scores of the borrowers. These credit scores are generally updated semi-annually. The following tables summarize credit scores by loan class for our mortgage and installment loan portfolio segments at December 31:

	Mortgage (1)
	1-4 Family Owner Occupied - Jumbo		1-4 Family Owner Occupied - Non-jumbo		1-4 Family Non-owner Occupied		1-4 Family 2nd Lien		Resort Lending		Total
	(In thousands)
2020
800 and above	$	61,077	$	40,187	$	25,468	$	12,490	$	9,546	$	148,768
_750-799		223,177		70,642		82,124		42,138		27,530		445,611
_700-749		101,086		75,489		30,326		22,962		11,726		241,589
_650-699		40,296		44,344		13,182		11,269		6,393		115,484
_600-649		11,146		18,519		4,303		2,703		1,670		38,341
_550-599		-		11,021		2,388		1,608		917		15,934
_500-549		3,396		5,129		1,580		1,012		192		11,309
Under 500		-		2,242		405		348		73		3,068
Unknown		-		-		-		-		-		-
Total	$	440,178	$	267,573	$	159,776	$	94,530	$	58,047	$	1,020,104
Accrued interest included in total	$	1,301	$	1,641	$	587	$	373	$	276	$	4,178

	Mortgage (1)
	1-4 Family Owner Occupied - Jumbo	1-4 Family Owner Occupied - Non-jumbo	1-4 Family Non-owner Occupied	1-4 Family 2nd Lien	Resort Lending	Total
	(In thousands)
2019
800 and above	$48,486	$43,848	$24,315	$13,905	$11,076	$141,630
_750-799	198,491	111,521	84,656	50,012	29,364	474,044
_700-749	106,609	95,064	34,839	30,697	14,626	281,835
_650-699	31,553	51,174	13,995	14,267	8,063	119,052
_600-649	13,230	21,938	5,897	4,097	2,074	47,236
_550-599	514	12,308	1,863	1,703	673	17,061
_500-549	1,519	7,940	1,870	1,281	889	13,499
Under 500	641	2,208	533	511	79	3,972
Unknown	510	1,259	1,569	69	1,330	4,737
Total	$401,553	$347,260	$169,537	$116,542	$68,174	$1,103,066
Accrued interest included in total	$1,139	$1,662	$586	$502	$266	$4,155

(1)	Credit scores have been updated within the last twelve months.

	Installment (1)
	Boat Lending		Recreational Vehicle Lending		Other		Total
	(In thousands)
2020
800 and above	$	32,231	$	29,223	$	9,154	$	70,608
_750-799		123,689		95,890		37,512		257,091
_700-749		38,223		33,476		25,262		96,961
_650-699		10,189		8,794		21,138		40,121
_600-649		2,083		1,305		3,730		7,118
_550-599		661		551		1,299		2,511
_500-549		342		283		767		1,392
Under 500		95		52		63		210
Unknown		-		-		510		510
Total	$	207,513	$	169,574	$	99,435	$	476,522
Accrued interest included in total	$	572	$	457	$	156	$	1,185

2019
800 and above	$	28,041	$	24,470	$	7,611	$	60,122
_750-799		118,380		88,164		37,583		244,127
_700-749		41,490		31,055		27,204		99,749
_650-699		11,485		7,267		22,517		41,269
_600-649		2,254		1,411		4,470		8,135
_550-599		946		592		1,884		3,422
_500-549		377		464		1,127		1,968
Under 500		309		22		284		615
Unknown		-		-		1,204		1,204
Total	$	203,282	$	153,445	$	103,884	$	460,611
Accrued interest included in total	$	490	$	378	$	326	$	1,194

(1)	Credit scores have been updated within the last twelve months.

Mortgage loans serviced for others are not reported as assets on the Consolidated Statements of Financial Condition. The principal balances of these loans at December 31 follow:

	2020		2019
	(In thousands)
Mortgage loans serviced for :
Fannie Mae	$	1,656,060	$	1,449,935
Freddie Mac		1,095,877		852,123
Ginnie Mae		181,615		180,941
FHLB		39,294		69,149
Other		11,242		29,018
Total	$	2,984,088	$	2,581,166

Custodial deposit accounts maintained in connection with mortgage loans serviced for others totaled $40.5 million and $29.9 million, at December 31, 2020 and 2019, respectively.

If we do not remain well capitalized for regulatory purposes (see note #20), meet certain minimum capital levels or certain profitability requirements or if we incur a rapid decline in net worth, we could lose our ability to sell and/or service loans to these investors. This could impact our ability to generate net gains on mortgage loans and generate servicing income. A forced liquidation of our servicing portfolio could also impact the value that could be recovered on this asset. Fannie Mae has the most stringent eligibility requirements covering capital levels, profitability and decline in net worth. Fannie Mae requires seller/servicers to be well capitalized for regulatory purposes. For the profitability requirement, we cannot record four or more consecutive quarterly losses and experience a 30% decline in net worth over the same period. Our net worth cannot decline by more than 25% in one quarter or more than 40% over two consecutive quarters. The highest level of capital we are required to maintain is at least $2.5 million plus 0.25% of all loans serviced for others.

An analysis of capitalized mortgage loan servicing rights for the years ended December 31 follows:

	2020			2019			2018
	(In thousands)
Balance at beginning of period	$	19,171		$	21,400		$	15,699
Originated servicing rights capitalized		13,957			7,303			4,977
Servicing rights acquired		-			-			3,047
Change in fair value due to price		(10,833	)		(6,408	)		191
Change in fair value due to pay downs		(5,391	)		(3,124	)		(2,514	)
Balance at end of year	$	16,904		$	19,171		$	21,400
Loans sold and serviced that have had servicing rights capitalized	$	2,982,833		$	2,580,705		$	2,333,081

Fair value of capitalized mortgage loan servicing rights was determined using an average coupon rate of 3.77%, average servicing fee of 0.257%, average discount rate of 10.09% and an average Public Securities Association (‘‘PSA’’) prepayment rate of 348 for December 31, 2020; and average coupon rate of 4.22%, average servicing fee of 0.258%, average discount rate of 10.14% and an average PSA prepayment rate of 250 for December 31, 2019.

Purchase Credit Impaired (‘‘PCI’’) Loans

Loans acquired in a business combination are recorded at estimated fair value on their purchase date with no carryover of the related allowance for loan losses. In determining the estimated fair value of purchased loans, management considers a number of factors including, among others, the remaining life of the acquired loans, estimated prepayments, estimated loss ratios, estimated value of the underlying collateral, and net present value of cash flows expected to be received. Purchased loans are accounted for in accordance with guidance for certain loans acquired in a transfer (ASC 310-30), when the loans have evidence of credit deterioration since origination and it is probable at the date of acquisition that the acquirer will not collect all contractually required principal and interest payments. The difference between contractually required payments and the cash flows expected to be collected at

acquisition is referred to as the non-accretable difference. Subsequent decreases to the expected cash flows will generally result in a provision for loan losses. Subsequent increases in expected cash flows will result in a reversal of the provision for loan losses to the extent of prior charges and then an adjustment to accretable yield, which would have a positive impact on interest income.

As a result of our acquisition of TCSB Bancorp, Inc. (‘‘TCSB’’) (see note #26) we purchased loans for which there was, at acquisition, evidence of deterioration of credit quality since origination and it was probable, at acquisition, that all contractually required payments would not be collected. For these loans that meet the criteria of ASC 310-30 treatment, the carrying amount was as follows:

	December 31,
	2020		2019
	(In thousands)
Commercial	$	468	$	1,394
Mortgage		410		575
Installment		147		316
Total carrying amount		1,025		2,285
Allowance for loan losses		-		-
Carrying amount, net of allowance for loan losses	$	1,025	$	2,285

The accretable difference on PCI loans is the difference between the expected cash flows and the net present value of expected cash flows with such difference accreted into earnings using the effective yield method over the term of the loans. Accretion recorded as loan interest income is included in the table below. Accretable yield of PCI loans, or income expected to be collected follows:

	Year ended December 31,
	2020			2019
	(In thousands)

Balance at beginning of period	$	640		$	462
New loans purchased		-			-
Accretion of income		(280	)		(187	)
Reclassification from (to) nonaccretable difference		-			365
Displosals/other adjustments		-			-
Balance at end of period	$	360		$	640

OTHER REAL ESTATE

12 Months Ended

Dec. 31, 2020

OTHER REAL ESTATE [Abstract]

OTHER REAL ESTATE

NOTE 5 – OTHER REAL ESTATE

A summary of other real estate activity for the years ended December 31 follows⁽¹⁾:

	2020			2019			2018
	(In thousands)
Balance at beginning of year, net of valuation allowance	$	1,715		$	1,178		$	1,628
Loans transferred to other real estate		332			2,242			1,510
Sales of other real estate		(1,161	)		(1,438	)		(1,822	)
Additions to valuation allowance charged to expense		(148	)		(267	)		(138	)
Balance at end of year, net of valuation allowance	$	738		$	1,715		$	1,178

(1)	Table excludes other repossessed assets totaling $0.03 million and $0.15 million at December 31, 2020 and 2019, respectively.

We periodically review our real estate properties and establish valuation allowances on these properties if values have declined since the date of acquisition. An analysis of our valuation allowance for other real estate follows:

	2020			2019			2018
	(In thousands)
Balance at beginning of year	$	92		$	144		$	123
Additions charged to expense		148			267			138
Direct write-downs upon sale		(150	)		(319	)		(117	)
Balance at end of year	$	90		$	92		$	144

At December 31, 2020 and 2019, the balance of other real estate includes $0.7 million and $1.2 million, respectively of foreclosed residential real estate properties. Retail mortgage loans secured by residential real estate properties for which formal foreclosure proceedings are in process according to local requirements totaled $0.3 million and $0.7 million at December 31, 2020 and 2019, respectively.

Other real estate and repossessed assets totaling $0.8 million and $1.9 million at December 31, 2020 and 2019, respectively, are presented net of the valuation allowance on the Consolidated Statements of Financial Condition.

PROPERTY AND EQUIPMENT

12 Months Ended

Dec. 31, 2020

PROPERTY AND EQUIPMENT [Abstract]

PROPERTY AND EQUIPMENT

NOTE 6 – PROPERTY AND EQUIPMENT

A summary of property and equipment at December 31 follows:

	2020			2019
	(In thousands)
Land and land improvements	$	17,083		$	17,478
Buildings		57,208			57,363
Equipment		72,542			71,194
		146,833			146,035
Accumulated depreciation and amortization		(110,706	)		(107,624	)
Property and equipment, net	$	36,127		$	38,411

Depreciation expense was $5.3 million, $5.2 million and $5.1 million in 2020, 2019 and 2018, respectively.

GOODWILL AND OTHER INTANGIBLES

12 Months Ended

Dec. 31, 2020

GOODWILL AND OTHER INTANGIBLES [Abstract]

GOODWILL AND OTHER INTANGIBLES

NOTE 7 – GOODWILL AND OTHER INTANGIBLES

Intangible assets, net of amortization, at December 31 follows:

	2020				2019
	Gross Carrying Amount		Accumulated Amortization		Gross Carrying Amount		Accumulated Amortization
	(In thousands)

Amortized intangible assets - core deposits	$	11,916	$	7,610	$	11,916	$	6,590
Unamortized intangible assets - goodwill	$	28,300			$	28,300

At December 31, 2020, the Bank (our reporting unit) had positive equity and we elected to perform a qualitative assessment to determine if it was more likely than not that the fair value of the Bank exceeds its carrying value, including goodwill. The qualitative assessment indicated that it was more likely than not that the fair value of the Bank exceeded its carrying value, resulting in no impairment.

Intangible amortization expense was $1.0 million, $1.1 million and $1.0 million during the years ended 2020, 2019 and 2018, respectively.

A summary of estimated core deposit intangible amortization at December 31, 2020, follows:

	(In thousands)

2021	$	970
2022		785
2023		547
2024		516
2025		487
2026 and thereafter		1,001
Total	$	4,306

DEPOSITS

12 Months Ended

Dec. 31, 2020

DEPOSITS [Abstract]

DEPOSITS

NOTE 8 – DEPOSITS

A summary of interest expense on deposits for the years ended December 31 follows:

	2020		2019		2018
	(In thousands)
Savings and interest-bearing checking	$	2,264	$	5,371	$	4,146
Reciprocal		2,158		6,024		1,292
Time		7,073		7,148		5,343
Brokered time		1,171		4,882		3,697
Total	$	12,666	$	23,425	$	14,478

Aggregate time deposits in denominations of $0.25 million or more amounted to $50.0 million and $71.5 million at December 31, 2020 and 2019, respectively.

A summary of the maturity of time deposits at December 31, 2020, follows:

	(In thousands)
2021	$	370,497
2022		40,671
2023		16,717
2024		5,072
2025		5,457
2026 and thereafter		603
Total	$	439,017

Reciprocal deposits represent demand, money market and time deposits from our customers that have been placed through IntraFi Network (formerly Promontory Interfinancial Network’s Insured Cash Sweep® service and Certificate of Deposit Account Registry Service®). This service allows our customers to access multi-million dollar FDIC deposit insurance on deposit balances greater than the standard FDIC insurance maximum.

A summary of reciprocal deposits at December 31 follows:

	2020		2019
	(In thousands)
Demand	$	515,092	$	383,953
Money market		3,308		4,416
Time		37,785		42,658
Total	$	556,185	$	431,027

OTHER BORROWINGS

12 Months Ended

Dec. 31, 2020

OTHER BORROWINGS [Abstract]

OTHER BORROWINGS

NOTE 9 – OTHER BORROWINGS

A summary of other borrowings at December 31 follows:

	2020		2019
	(In thousands)
Advances from the FHLB	$	30,000	$	63,640
Federal funds purchased		-		25,000
Other		12		6
Total	$	30,012	$	88,646

Advances from the FHLB are secured by unencumbered qualifying mortgage and home equity loans with a market value equal to at least 132% to 165%, respectively, of outstanding advances. Advances are also secured by FHLB stock that we own, which totaled $8.6 million at December 31, 2020. Unused borrowing capacity with the FHLB (subject to the FHLB’s credit requirements and policies) was $772.8 million at December 31, 2020. Interest expense on advances amounted to $0.5 million, $0.7 million and $1.0 million for the years ended December 31, 2020, 2019 and 2018, respectively. No FHLB advances were prepaid during 2020, 2019 or 2018.

As a member of the FHLB, we must own FHLB stock equal to the greater of 0.75% of the unpaid principal balance of residential mortgage assets or 4.5% of our outstanding advances. At December 31, 2020, we were in compliance with the FHLB stock ownership requirements.

The maturity dates, weighted average interest rates and contractually required repayments of FHLB advances at December 31 follow:

	2020					2019
	Amount		Rate			Amount		Rate
	(Dollars in thousands)
Fixed-rate advances
2020						$	28,645		2.19	%
2022	$	-		-	%		4,995		1.69
2026 and thereafter		30,000		0.74			30,000		0.74
Total advances	$	30,000		0.74	%	$	63,640		1.47	%

Borrowings with the FRB at December 31, 2020 and 2019 were zero. Average borrowings with the FRB during the years ended December 31, 2020, 2019 and 2018 totaled $1.546 million, $0.305 million and $0.003 million. We had unused borrowing capacity with the FRB (subject to the FRB’s credit requirements and policies) of $492.0 million at December 31, 2020. Collateral for FRB borrowings are certain commercial and installment loans.

Interest expense on federal funds purchased totaled $0.01 million, $0.08 million and $0.10 million for the years ended December 31, 2020, 2019 and 2018, respectively.

Assets, consisting of FHLB stock and loans, pledged to secure other borrowings and unused borrowing capacity totaled $1.9 billion at December 31, 2020.

SUBORDINATED DEBT AND DEBENTURES

12 Months Ended

Dec. 31, 2020

SUBORDINATED DEBT AND DEBENTURES [Abstract]

SUBORDINATED DEBT AND DEBENTURES

NOTE 10 – SUBORDINATED DEBT AND DEBENTURES

Subordinated Debt

In May 2020, we issued $40.0 million of fixed to floating subordinated notes with a ten year maturity (May 31, 2030 maturity date) and a five year call option. The initial coupon rate is 5.95% fixed for five years and then floats at the Secured Overnight Financing Rate (“SOFR”) plus 5.825%. These notes are presented in the Consolidated Statement of Financial Condition under the caption “Subordinated debt” and the December 31, 2020 balance of $39.3 million is net of remaining unamortized deferred issuance costs of approximately $0.7 million that are being amortized through the maturity date into interest expense on other borrowings and subordinated debt and debentures in our Consolidated Statement of Operations. We may redeem the notes, in whole or in part, on or after May 31, 2025, and redeem the notes at any time in whole upon certain other events. Any redemption of the notes will be subject to prior regulatory approval to the extent required.

Subordinated Debentures

We have formed various special purpose entities (the ‘‘trusts’’) for the purpose of issuing trust preferred securities in either public or pooled offerings or in private placements. Independent Bank Corporation owns all of the common stock of each trust and has issued subordinated debentures to each trust in exchange for all of the proceeds from the issuance of the common stock and the trust preferred securities. Trust preferred securities totaling $38.3 million and $38.2 million at December 31, 2020 and 2019, respectively qualified as Tier 1 regulatory capital.

These trusts are not consolidated with Independent Bank Corporation and accordingly, we report the common securities of the trusts held by us in accrued income and other assets and the subordinated debentures that we have issued to the trusts in the liability section of our Consolidated Statements of Financial Condition.

As a result of our acquisition of TCSB (see note #26) we acquired TCSB Statutory Trust I as summarized in the tables below at a discount. The discount at acquisition totaled $1.4 million and is being amortized through its maturity date and is included in interest expense – other borrowings and subordinated debt and debentures in the Consolidated Statements of Operations.

Summary information regarding subordinated debentures as of December 31 follows:

		2020
Entity Name	Issue Date
Entity Name	Issue Date	Subordinated Debentures			Trust Preferred Securities Issued			Common Stock Issued
		(In thousands)
IBC Capital Finance III	May 2007	$	12,372		$	12,000		$	372
IBC Capital Finance IV	September 2007		15,465			15,000			465
Midwest Guaranty Trust I	November 2002		7,732			7,500			232
TCSB Statutory Trust I	March 2005		5,155			5,000			155
Discount on TCSB Statutory Trust I			(1,200	)		(1,200	)		-
		$	39,524		$	38,300		$	1,224

		2019
Entity Name	Issue Date
Entity Name	Issue Date	Subordinated Debentures			Trust Preferred Securities Issued			Common Stock Issued
		(In thousands)
IBC Capital Finance III	May 2007	$	12,372		$	12,000		$	372
IBC Capital Finance IV	September 2007		15,465			15,000			465
Midwest Guaranty Trust I	November 2002		7,732			7,500			232
TCSB Statutory Trust I	March 2005		5,155			5,000			155
Discount on TCSB Statutory Trust I			(1,268	)		(1,268	)		-
		$	39,456		$	38,232		$	1,224

Other key terms for the subordinated debentures and trust preferred securities that were outstanding at December 31, 2020 and 2019 follow:

Entity Name	Maturity Date	Interest Rate	First Permitted Redemption Date

IBC Capital Finance III	July 30, 2037	3 month LIBOR plus 1.60%	July 30, 2012
IBC Capital Finance IV	September 15, 2037	3 month LIBOR plus 2.85%	September 15, 2012
Midwest Guaranty Trust I	November 7, 2032	3 month LIBOR plus 3.45%	November 7, 2007
TCSB Statutory Trust I	March 17, 2035	3 month LIBOR plus 2.20%	March 17, 2010

The subordinated debentures and trust preferred securities are cumulative and have a feature that permits us to defer distributions (payment of interest) from time to time for a period not to exceed 20 consecutive quarters. Interest is payable quarterly on each of the subordinated debentures and trust preferred securities and no distributions were deferred at December 31, 2020 and 2019.

We have the right to redeem the subordinated debentures and trust preferred securities (at par) in whole or in part from time to time on or after the first permitted redemption date specified above or upon the occurrence of specific events defined within the trust indenture agreements.

Distributions (payment of interest) on the trust preferred securities are included in interest expense – other borrowings and subordinated debt and debentures in the Consolidated Statements of Operations.

COMMITMENTS AND CONTINGENT LIABILITIES

12 Months Ended

Dec. 31, 2020

COMMITMENTS AND CONTINGENT LIABILITIES [Abstract]

COMMITMENTS AND CONTINGENT LIABILITIES

NOTE 11 – COMMITMENTS AND CONTINGENT LIABILITIES

In the normal course of business, we enter into financial instruments with off-balance sheet risk to meet the financing needs of customers or to reduce exposure to fluctuations in interest rates. These financial instruments may include commitments to extend credit and standby letters of credit. Financial instruments involve varying degrees of credit and interest-rate risk in excess of amounts reflected in the Consolidated Statements of Financial Condition. Exposure to credit risk in the event of non-performance by the counterparties to the financial instruments for loan commitments to extend credit and standby letters of credit is represented by the contractual amounts of those instruments.

A summary of financial instruments with off-balance sheet risk at December 31 follows:

	2020		2019
	(In thousands)
Financial instruments whose risk is represented by contract amounts
Commitments to extend credit	$	644,815	$	582,457
Standby letters of credit		9,361		7,207

Commitments to extend credit are agreements to lend to a customer as long as there is no violation of any condition established in the contract. Commitments generally have fixed expiration dates or other termination clauses and generally require payment of a fee. Since commitments may expire without being drawn upon, the commitment amounts do not represent future cash requirements. Commitments are issued subject to similar underwriting standards, including collateral requirements, as are generally involved in the extension of credit facilities.

Standby letters of credit are written conditional commitments issued to guarantee the performance of a customer to a third party. The credit risk involved in such transactions is essentially the same as that involved in extending loan facilities and, accordingly, standby letters of credit are issued subject to similar underwriting standards, including collateral requirements, as are generally involved in the extension of credit facilities. The majority of the standby letters of credit are on-demand with no stated maturity date and have variable rates that range from 2.50% to 12.00%.

COVID-19 Pandemic

On March 11, 2020, the World Health Organization declared COVID-19, the disease caused by the novel coronavirus, a pandemic as a result of the global spread of the coronavirus illness. In response to the outbreak, federal and state authorities in the U.S. introduced various measures to try to limit or slow the spread of the virus, including travel restrictions, nonessential business closures, stay-at-home orders, and strict social distancing. The degree to which businesses may resume operations varies based on the type of business operations being conducted. It is currently expected that various forms of state and local government restrictions similar to those described above will continue for the foreseeable future. As a result of these events, Michigan has experienced a significant increase in unemployment.

The COVID-19 pandemic, the related executive orders, and other government restrictions and guidance have had and continue to have a significant effect on us, our customers and the markets we serve. Our business, results of operations and financial condition may be adversely affected by a number of factors that could impact us and our customers, including but not limited to:

•

restrictions on activity and high levels of unemployment may cause increases in loan delinquencies, foreclosures and defaults;

•

increases in allowance for loan losses may be necessary;

•

declines in collateral values may occur;

•

third party disruptions, including outages at network providers, on-line banking vendors and other suppliers;

•

increased cyber and payment fraud risk, as cybercriminals attempt to profit from the disruption, given increased online and remote activity;

•

operational failures due to changes in our normal business practices necessitated by the pandemic and related governmental actions; and/or

•

key personnel or significant numbers of our employees being unable to work effectively, including because of illness or restrictions in connection with COVID-19.

These factors may continue for a significant period of time.

The spread of COVID-19 has caused us to modify many of our business practices. We have also expanded sick and vacation time for certain employees. We may take further actions as may be required or as we determine to be prudent. There is no certainty that such measures will be sufficient to mitigate the risks posed by COVID-19.

The extent to which the COVID-19 pandemic will impact our business, results of operations and financial condition will depend on future developments, which are highly uncertain and difficult to predict. Those developments and factors include the duration and spread of the pandemic, its severity, the actions to contain the pandemic or address its impact, and how quickly and to what extent normal economic and operating conditions can resume. We do not yet know the full extent of the impact. However, the effects could have a material adverse impact on our business, financial condition and results of operations. Material adverse impacts may include valuation impairments on our intangible assets, securities available for sale, loans, capitalized mortgage loan servicing rights and deferred tax assets.

Litigation

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. The 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. 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.

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). 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.

Loss Reimbursement Obligations

The provision for loss reimbursement on sold loans represents our estimate of incurred losses related to mortgage loans that we have sold to investors (primarily Fannie Mae, Freddie Mac, Ginnie Mae and the FHLB). Since we sell mortgage loans without recourse, loss reimbursements only occur in those instances where we have

breached a representation or warranty or other contractual requirement related to the loan sale. The provision for loss reimbursement on sold loans was an expense of $0.20 million, $0.23 million and $0.01 million for the years ended December 31, 2020, 2019 and 2018, respectively. The reserve for loss reimbursements on sold mortgage loans totaled $1.0 million and $0.9 million at December 31, 2020 and 2019, respectively. This reserve is included in accrued expenses and other liabilities in our Consolidated Statements of Financial Condition. This reserve is based on an analysis of mortgage loans that we have sold which are further categorized by delinquency status, loan to value, and year of origination. The calculation includes factors such as probability of default, probability of loss reimbursement (breach of representation or warranty) and estimated loss severity. We believe that the amounts that we have accrued for incurred losses on sold mortgage loans are appropriate given our analyses. However, future losses could exceed our current estimate.

Visa Stock

We own 12,566 shares of VISA Class B common stock. At the present time, these shares can only be sold to other Class B shareholders. As a result, there has generally been limited transfer activity in private transactions between buyers and sellers. Given the limited activity that we have become aware of and the continuing uncertainty regarding the likelihood, ultimate timing and eventual exchange rate for Class B shares into Class A shares, we continue to carry these shares at zero, representing cost basis less impairment. However, given the current conversion ratio of 1.6228 Class A shares for every 1 Class B share and the closing price of VISA Class A shares on February 26, 2021 of $212.39 per share, our 12,566 Class B shares would have a current “value” of approximately $4.3 million. We continue to monitor Class B trading activity and the status of the resolution of certain litigation matters at VISA that would trigger the conversion of Class B common shares into Class A common shares, which would not have any trading restrictions.

SHAREHOLDERS' EQUITY AND INCOME PER COMMON SHARE

12 Months Ended

Dec. 31, 2020

SHAREHOLDERS' EQUITY AND INCOME PER COMMON SHARE [Abstract]

SHAREHOLDERS' EQUITY AND INCOME PER COMMON SHARE

NOTE 12 – SHAREHOLDERS’ EQUITY AND INCOME PER COMMON SHARE

Our Board of Directors authorized share repurchase plans to buy back up to 5% of our outstanding common stock during 2020, 2019 and 2018. In addition, in June, 2019 our Board of Directors authorized a 300,000 share expansion of the 2019 repurchase plan. During 2020, 2019 and 2018 repurchases were made through open market and negotiated transactions and totaled 708,956, 1,204,688 and 587,969 shares of common stock, respectively for an aggregate purchase price of $14.2 million, $26.3 million and $12.7 million, respectively.

A reconciliation of basic and diluted net income per common share for the years ended December 31 follows:

	2020		2019		2018
	(In thousands, except per share amounts)

Net income	$	56,152	$	46,435	$	39,839

Weighted average shares outstanding (1)		21,977		22,894		23,412
Stock units for deferred compensation plan for non-employee directors		121		132		128
Effect of stock options		90		115		176
Performance share units		33		42		53
Weighted average shares outstanding for calculation of diluted earnings per share		22,221		23,183		23,769

Net income per common share
Basic (1)	$	2.56	$	2.03	$	1.70
Diluted	$	2.53	$	2.00	$	1.68

(1)	Basic net income per common share includes weighted average common shares outstanding during the period and participating share awards.

Weighted average stock options outstanding that were not considered in computing diluted net income per common share because they were anti-dilutive were zero for each year ended 2020, 2019 and 2018, respectively.

INCOME TAX

12 Months Ended

Dec. 31, 2020

INCOME TAX [Abstract]

INCOME TAX

NOTE 13 – INCOME TAX

The composition of income tax expense for the years ended December 31 follows:

	2020			2019		2018
	(In thousands)
Current expense	$	15,459		$	10,237	$	-
Deferred expense (benefit)		(2,130	)		1,088		9,294
Income tax expense	$	13,329		$	11,325	$	9,294

The deferred income tax benefit of $2.1 million in 2020 can be primarily attributed to the increase in our allowance for loan losses while the deferred income tax expense of $1.1 million during 2019 can be primarily attributed to the utilization of our net operating loss (‘‘NOL’’) carryfoward and alternative minimum tax credit carryforward while the deferred income tax expense of $9.3 million during 2018 can be primarily attributed to the utilization of our NOL carryfoward.

A reconciliation of income tax expense to the amount computed by applying the statutory federal income tax rate of 21% for 2020, 2019 and 2018 to the income before income tax for the years ended December 31 follows:

	2020			2019			2018
	(In thousands)
Statutory rate applied to income before income tax	$	14,591		$	12,130		$	10,318
Tax-exempt income		(690	)		(375	)		(383	)
Unrecognized tax benefit		(206	)		(134	)		(162	)
Share-based compensation		(204	)		(204	)		(367	)
Bank owned life insurance		(196	)		(233	)		(229	)
Non-deductible meals, entertainment and memberships		57			86			85
Other, net		(23	)		55			32
Income tax expense	$	13,329		$	11,325		$	9,294

The tax effects of temporary differences that give rise to significant portions of the deferred tax assets and deferred tax liabilities at December 31 follow:

	2020		2019
	(In thousands)
Deferred tax assets
Allowance for loan losses	$	7,363	$	5,355
Lease liabilities		1,652		1,744
Property and equipment		1,047		1,528
Share-based compensation		742		808
Reserve for unfunded lending commitments		379		324
Deferred compensation		321		285
Loss reimbursement on sold loans reserve		214		185
Non accrual loan interest income		203		173
Other than temporary impairment charge on securities available for sale		144		147
Vehicle service contract counterparty contingency reserve		26		38
Unrealized loss on derivative financial instruments		-		459
Gross deferred tax assets		12,091		11,046
Deferred tax liabilities
Capitalized mortgage loan servicing rights		3,550		4,026
Deferred loan fees		1,901		1,852
Lease right of use asset		1,606		1,739
Unrealized gain on securities available for sale		4,206		994
Purchase premiums, net		509		293
Federal Home Loan Bank stock		27		27
Other		17		43
Gross deferred tax liabilities		11,816		8,974
Deferred tax assets, net	$	275	$	2,072

We assess whether a valuation allowance should be established against our deferred tax assets based on the consideration of all available evidence using a ‘‘more likely than not’’ standard. The ultimate realization of this asset is primarily based on generating future income. We concluded at both December 31, 2020 and 2019, that the realization of substantially all of our deferred tax assets continues to be more likely than not.

Changes in unrecognized tax benefits for the years ended December 31 follow:

	2020			2019			2018
	(In thousands)

Balance at beginning of year	$	438		$	588		$	724
Additions based on tax positions related to the current year		15			20			26
Reductions due to the statute of limitations		(273	)		(170	)		(162	)
Reductions due to settlements		-			-			-
Balance at end of year	$	180		$	438		$	588

If recognized, the entire amount of unrecognized tax benefits, net of $0.04 million of federal tax on state benefits, would affect our effective tax rate. We do not expect the total amount of unrecognized tax benefits to significantly increase or decrease in the next twelve months. No amounts were expensed for interest and penalties for the years ended December 31, 2020, 2019 and 2018. No amounts were accrued for interest and penalties at December 31, 2020, 2019 and 2018. At December 31, 2020, U.S. Federal tax years 2017 through the present remain open to examination.

The entire disclosure for income taxes. Disclosures may include net deferred tax liability or asset recognized in an enterprise's statement of financial position, net change during the year in the total valuation allowance, approximate tax effect of each type of temporary difference and carryforward that gives rise to a significant portion of deferred tax liabilities and deferred tax assets, utilization of a tax carryback, and tax uncertainties information.

SHARE BASED COMPENSATION AND BENEFIT PLANS [Abstract]

SHARE BASED COMPENSATION AND BENEFIT PLANS

12 Months Ended

Dec. 31, 2020

SHARE BASED COMPENSATION AND BENEFIT PLANS

NOTE 14 – SHARE BASED COMPENSATION AND BENEFIT PLANS

We maintain share based payment plans that include a non-employee director stock purchase plan and a long-term incentive plan that permits the issuance of share based compensation, including stock options and non-vested share awards. The long-term incentive plan, which is shareholder approved, permits the grant of additional share based awards for up to 0.4 million shares of common stock as of December 31, 2020. The non-employee director stock purchase plan permits the grant of additional share based payments for up to 0.1 million shares of common stock as of December 31, 2020. Share based awards and payments are measured at fair value at the date of grant and are expensed over the requisite service period. Common shares issued upon exercise of stock options come from currently authorized but unissued shares.

During 2020, 2019 and 2018 pursuant to our long-term incentive plan, we granted 0.06 million, 0.06 million and 0.05 million shares, respectively of restricted stock and 0.02 million during each year of performance stock units (‘‘PSUs’’), to certain officers. Except for 0.010 million shares and 0.002 million shares of restricted stock issued in 2019 and 2018, respectively that vest ratably over three years, all shares of restricted stock and PSUs cliff vest after a period of three years. The performance feature of the PSUs is based on a comparison of our total shareholder return over the vesting period starting on the grant date to the total shareholder return over that period for a banking index of our peers. We have not issued stock options since 2013, other than in connection with the Merger (see note #26).

Our directors may elect to receive all or a portion of their cash retainer fees in the form of common stock (either on a current basis or on a deferred basis) pursuant to the non-employee director stock purchase plan referenced above. Shares equal in value to that portion of each director’s fees that he or she has elected to receive in stock on a current basis are issued each quarter and vest immediately. Shares issued on a deferred basis are credited at the rate of 90% of the current fair value of our common stock and vest immediately. We issued 0.02 million, 0.01 million and 0.01 million shares to directors pursuant to this plan during the years ending 2020, 2019 and 2018, respectively and expensed their value during those same periods.

Total compensation expense recognized for grants pursuant to our long-term incentive plan was $1.6 million, $1.6 million and $1.5 million in 2020, 2019 and 2018, respectively. The corresponding tax benefit relating to this expense was $0.3 million during each year. Total expense recognized for non-employee director share based payments was $0.4 million, $0.3 million and $0.2 million in 2020, 2019 and 2018, respectively. The corresponding tax benefit relating to this expense was $0.07 million, $0.05 million and $0.04 million in 2020, 2019 and 2018, respectively.

At December 31, 2020, the total expected compensation cost related to non-vested restricted stock and PSUs not yet recognized was $1.7 million. The weighted-average period over which this amount will be recognized is 1.7 years.

A summary of outstanding stock option grants and related transactions follows:

	Number of Shares			Average Exercise Price		Weighted- Average Remaining Contractual Term (Years)		Aggregated Intrinsic Value
								(In thousands)
Outstanding at January 1,2020		138,506		$	4.62
Granted		-
Exercised		(17,317	)		3.27
Forfeited		-
Expired		-
Outstanding at December 31, 2020		121,189		$	4.81		2.1	$	1,658

Vested and expected to vest at December 31, 2020		121,189		$	4.81		2.1	$	1,658
Exercisable at December 31, 2020		121,189		$	4.81		2.1	$	1,658

A summary of outstanding non-vested stock and related transactions follows:

	Number of Shares			Weighted- Average Grant Date Fair Value
Outstanding at January 1, 2020		245,726		$	21.72
Granted		76,893			22.46
Vested		(94,342	)		19.96
Forfeited		(21,160	)		22.63
Outstanding at December 31, 2020		207,117		$	22.70

Certain information regarding options exercised during the periods ending December 31 follows:

	2020		2019		2018
	(In thousands)
Intrinsic value	$	293	$	897	$	2,333
Cash proceeds received	$	57	$	706	$	1,420
Tax benefit realized	$	61	$	188	$	490

We maintain 401(k) and employee stock ownership plans covering substantially all of our full-time employees. We matched 50% of employee contributions to the 401(k) plan up to a maximum of 8% of participating employees’ eligible wages for 2020, 2019 and 2018. Contributions to the employee stock ownership plan are determined annually and require approval of our Board of Directors. The maximum contribution is 6% of employees’ eligible wages. Contributions to the employee stock ownership plan were 2% for 2020, 2019 and 2018. Amounts expensed for these retirement plans were $3.2 million, $2.6 million and $2.3 million in 2020, 2019 and 2018, respectively.

Our employees participate in various performance-based compensation plans. Amounts expensed for all incentive plans totaled $15.7 million, $9.5 million and $9.8 million in 2020, 2019 and 2018, respectively.

We also provide certain health care and life insurance programs to substantially all full-time employees. Amounts expensed for these programs totaled $4.8 million, $5.7 million and $5.2 million in 2020, 2019 and 2018 respectively.

These insurance programs are also available to retired employees at their own expense.

OTHER NON-INTEREST INCOME

12 Months Ended

Dec. 31, 2020

OTHER NON-INTEREST INCOME [Abstract]

OTHER NON-INTEREST INCOME

NOTE 15 – OTHER NON-INTEREST INCOME

Other non-interest income for the years ended December 31 follows:

	2020		2019		2018
	(In thousands)

Investment and insurance commissions	$	1,971	$	1,658	$	1,971
ATM fees		1,197		1,403		1,457
Bank owned life insurance		910		1,111		970
Other		3,443		5,110		4,362
Total other non-interest income	$	7,521	$	9,282	$	8,760

DERIVATIVE FINANCIAL INSTRUMENTS

12 Months Ended

Dec. 31, 2020

DERIVATIVE FINANCIAL INSTRUMENTS [Abstract]

DERIVATIVE FINANCIAL INSTRUMENTS

NOTE 16 – DERIVATIVE FINANCIAL INSTRUMENTS

We are required to record derivatives on our Consolidated Statements of Financial Condition as assets and liabilities measured at their fair value. The accounting for increases and decreases in the value of derivatives depends upon the use of derivatives and whether the derivatives qualify for hedge accounting.

Our derivative financial instruments according to the type of hedge in which they are designated at December 31 follow:

	2020
	Notional Amount		Average Maturity (years)		Fair Value
	(Dollars in thousands)
Fair value hedge designation
Pay-fixed interest rate swap agreements - commercial	$	7,088		8.4	$	(776	)
Pay-fixed interest rate swap agreements - securities available for sale		41,950		7.1		15
Total	$	49,038		7.3	$	(761	)

No hedge designation
Rate-lock mortgage loan commitments	$	168,816		0.1	$	7,020
Mandatory commitments to sell mortgage loans		186,092		0.1		(941	)
Pay-fixed interest rate swap agreements - commercial		147,456		4.5		(9,700	)
Pay-variable interest rate swap agreements - commercial		147,456		4.5		9,700
Pay-fixed interest rate swap agreements		25,000		0.6		(295	)
Interest rate cap agreements		135,000		1.8		5
Purchased options		2,908		0.5		42
Written options		2,848		0.5		(42	)
Total	$	815,576		2.0	$	5,789

	2019
	Notional Amount		Average Maturity (years)		Fair Value
	(Dollars in thousands)
Fair value hedge designation - Pay-fixed interest rate swap agreements	$	7,117		9.4	$	(242	)

Cash flow hedge designation
Pay-fixed interest rate swap agreements	$	25,000		1.6	$	(174	)
Interest rate cap agreements		150,000		2.6		214
Total	$	175,000		2.5	$	40

No hedge designation
Rate-lock mortgage loan commitments	$	49,268		0.1	$	1,412
Mandatory commitments to sell mortgage loans		95,363		0.1		(150	)
Pay-fixed interest rate swap agreements - commercial		153,946		5.5		(3,641	)
Pay-variable interest rate swap agreements - commercial		153,946		5.5		3,641
Purchased options		2,908		1.5		141
Written options		2,848		1.5		(139	)
Total	$	458,279		3.7	$	1,264

We have established management objectives and strategies that include interest-rate risk parameters for maximum fluctuations in net interest income and market value of portfolio equity. We monitor our interest rate risk position via simulation modeling reports. The goal of our asset/liability management efforts is to maintain profitable financial leverage within established risk parameters.

To meet our asset/liability management objectives, we may periodically enter into derivative financial instruments to mitigate exposure to fluctuations in cash flows resulting from changes in interest rates (‘‘Cash Flow Hedges’’). Cash Flow Hedges included certain pay-fixed interest rate swaps and interest rate cap agreements. Pay-fixed interest rate swaps convert the variable-rate cash flows on debt obligations to fixed-rates. Under interest-rate cap agreements, we will receive cash if interest rates rise above a predetermined level. As a result, we effectively have variable-rate debt with an established maximum rate. We paid an upfront premium on interest rate caps which was recognized in earnings in the same period in which the hedged item affected earnings. During the first and third quarters of 2020 we transferred all of our Cash Flow Hedge interest rate cap agreements and pay-fixed interest rate swaps, respectively to a no hedge designation. The $2.0 million and $0.5 million unrealized loss on our Cash Flow Hedge interest rate cap agreements and pay-fixed interest rate swaps, respectively which were included as a component of accumulated other comprehensive income (loss) at the time of the transfers were being reclassified into earnings over the remaining life of the interest rate cap agreements and pay-fixed interest rate swap agreements. In the fourth quarter of 2020 it became probable that the forecasted transactions being hedged by these interest rate cap agreements and pay-fixed interest rate swap agreements would not occur by the end of the originally specified time period. As a result, all remaining unrealized losses included as a component of accumulated other comprehensive income (loss) were reclassified into earnings. The interest rate cap agreements and pay-fixed interest rate swaps are now classified as a no hedge designation at December 31, 2020 and any changes in fair value since the transfers to the no hedge designation are recorded in earnings.

We have entered into a pay-fixed interest rate swap to protect a portion of the fair value of a certain fixed rate commercial loan (‘‘Fair Value Hedge – Commercial Loan’’). As a result, changes in the fair value of the pay-fixed interest rate swap is expected to offset changes in the fair value of the fixed rate commercial loan due to fluctuations in interest rates. We record the fair value of Fair Value Hedge – Commercial Loan in accrued income and other assets and accrued expenses and other liabilities on our Consolidated Statements of Financial Condition. The hedged item (fixed rate commercial loan) is also recorded at fair value which offsets the adjustment to the Fair Value Hedge –

Commercial Loan. On an ongoing basis, we adjust our Consolidated Statements of Financial Condition to reflect the then current fair value of both the Fair Value Hedge – Commercial Loan and the hedged item. The related gains or losses are reported in interest income – interest and fees on loans in our Consolidated Statements of Operations.

During 2020 we entered into pay-fixed interest rate swaps to protect a portion of the fair value of certain securities available for sale (‘‘Fair Value Hedge – AFS Securities’’). As a result, the change in the fair value of the pay-fixed interest rate swaps is expected to offset a portion of the change in the fair value of the fixed rate securities available for sale due to fluctuations in interest rates. We record the fair value of Fair Value Hedge – AFS Securities in accrued income and other assets and accrued expenses and other liabilities on our Consolidated Statements of Financial Condition. The hedged item (fixed rate securities available for sale) is also recorded at fair value which offsets the adjustment to the Fair Value Hedge – AFS Securities. On an ongoing basis, we adjust our Consolidated Statements of Financial Condition to reflect the then current fair value of both the Fair Value Hedge – AFS Securities and the hedged item. The related gains or losses are reported in interest income – interest on securities available for sale – tax-exempt in our Consolidated Statements of Operations.

Certain derivative financial instruments have not been designated as hedges. The fair value of these derivative financial instruments has been recorded on our Consolidated Statements of Financial Condition and is adjusted on an ongoing basis to reflect their then current fair value. The changes in fair value of derivative financial instruments not designated as hedges are recognized in earnings.

In the ordinary course of business, we enter into rate-lock mortgage loan commitments with customers (‘‘Rate-Lock Commitments’’). These commitments expose us to interest rate risk. We also enter into mandatory commitments to sell mortgage loans (‘‘Mandatory Commitments’’) to reduce the impact of price fluctuations of mortgage loans held for sale and Rate-Lock Commitments. Mandatory Commitments help protect our loan sale profit margin from fluctuations in interest rates. The changes in the fair value of Rate Lock Commitments and Mandatory Commitments are recognized currently as part of net gains on mortgage loans in the Consolidated Statements of Operations. We obtain market prices on Mandatory Commitments and Rate-Lock Commitments. Net gains on mortgage loans, as well as net income, may be more volatile as a result of these derivative instruments, which are not designated as hedges.

In prior periods we offered to our deposit customers an equity linked time deposit product (‘‘Altitude CD’’). The Altitude CD was a time deposit that provided the customer a guaranteed return of principal at maturity plus a potential equity return (a written option), while we receive a like stream of funds based on the equity return (a purchased option). The written and purchased options will generally move in opposite directions resulting in little or no net impact on our Consolidated Statements of Operations. All of the written and purchased options in the table above relate to this Altitude CD product.

We have a program that allows commercial loan customers to lock in a fixed rate for a longer period of time than we would normally offer for interest rate risk reasons. We will enter into a variable rate commercial loan and an interest rate swap agreement with a customer and then enter into an offsetting interest rate swap agreement with an unrelated party. The interest rate swap agreement fair values will generally move in opposite directions resulting in little or no net impact on our Consolidated Statements of Operations. All of the interest rate swap agreements-commercial with no hedge designation in the table above relate to this program.

The following tables illustrate the impact that the derivative financial instruments discussed above have on individual line items in the Consolidated Statements of Financial Condition for the periods presented:

Fair Values of Derivative Instruments

	Asset Derivatives								Liability Derivatives
	December 31,								December 31,
	2020				2019				2020				2019
	Balance Sheet Location		Fair Value		Balance Sheet Location		Fair Value		Balance Sheet Location		Fair Value		Balance Sheet Location		Fair Value
	(In thousands)
Derivatives designated as hedging instruments		-				-				-				-
Pay-fixed interest rate swap agreements	Other assets		$	15	Other assets		$	-	Other liabilities		$	776	Other liabilities		$	416
Interest rate cap agreements	Other assets			-	Other assets			214	Other liabilities			-	Other liabilities			-
				15				214				776				416
Derivatives not designated as hedging instruments
Rate-lock mortgage loan commitments	Other assets			7,020	Other assets			1,412	Other liabilities		$	-	Other liabilities			-
Mandatory commitments to sell mortgage loans	Other assets			-	Other assets			-	Other liabilities			941	Other liabilities			150
Pay-fixed interest rate swap agreements - commercial	Other assets			-	Other assets			28	Other liabilities			9,700	Other liabilities			3,669
Pay-variable interest rate swap agreements - commercial	Other assets			9,700	Other assets			3,669	Other liabilities			-	Other liabilities			28
Pay-fixed interest rate swap agreements	Other assets			-	Other assets			-	Other liabilities			295	Other liabilities			-
Interest rate cap agreements	Other assets			5	Other assets			-	Other liabilities			-	Other liabilities			-
Purchased options	Other assets			42	Other assets			141	Other liabilities			-	Other liabilities			-
Written options	Other assets			-	Other assets			-	Other liabilities			42	Other liabilities			139
				16,767				5,250				10,978				3,986
Total derivatives			$	16,782			$	5,464			$	11,754			$	4,402

The effect of derivative financial instruments on the Consolidated Statements of Operations follows:

Year Ended December 31,
	Gain (loss) Recognized in Other Comprehensive Income (Loss) (Effective Portion)									Location Gain (Loss) Reclassified from Accumulated Other Comprehensive Income (Loss) into Income (Effective Portion)	Gain (Loss) Reclassified from Accumulated Other Comprehensive Income (Loss) into Income (Effective Portion)							Location of Gain (Loss) Recognized in Income(1)	Gain (Loss) Recognized in Income(1)
	2020			2019			2018				2020			2019		2018		Location of Gain (Loss) Recognized in Income(1)	2020			2019			2018
	(In thousands)
Fair Value Hedges
Pay-fixed interest rate swap ageement - Commercial loan																		Interest and fees on loans	$	(534	)	$	(242	)	$	-
Pay-fixed interest rate swap agreements - Securities available for sale																		Interest on securities available for sale - tax-exempt		15			-			-
Total																			$	(519	)	$	(242	)	$	-
Cash Flow Hedges
Interest rate cap agreements	$	125		$	(1,211	)	$	(340	)	Interest expense	$	(1,885	)	$	363	$	206	Interest expense	$	-		$	-		$	-
Pay-fixed interest rate swap agreements		(479	)		(392	)		78		Interest expense		(654	)		62		31	Interest expense		-			-			(12	)
Total	$	(354	)	$	(1,603	)	$	(262	)		$	(2,539	)	$	425	$	237		$	-		$	-		$	(12	)

No hedge designation

Rate-lock mortgage loan commitments																		Net gains on mortgage loans	$	5,608		$	725		$	157
Mandatory commitments to sell mortgage loans																		Net gains on mortgage loans		(791	)		233			(420	)
Pay-fixed interest rate swap agreements - commercial																		Interest income		(6,059	)		(4,046	)		113
Pay-variable interest rate swap agreements -commercial																		Interest income		6,059			4,046			(113	)
Pay-fixed interest rate swap agreements																		Interest expense		231			-			-
Interest rate cap agreements																		Interest expense		(57	)		-			-
Purchased options																		Interest expense		(99	)		25			(206	)
Written options																		Interest expense		97			(23	)		206
Total																			$	4,989		$	960		$	(263	)

(1)	For cash flow hedges, this location and amount refers to the ineffective portion.

RELATED PARTY TRANSACTIONS

12 Months Ended

Dec. 31, 2020

RELATED PARTY TRANSACTIONS

NOTE 17 – RELATED PARTY TRANSACTIONS

Certain of our directors and executive officers, including companies in which they are officers or have significant ownership, were loan and deposit customers during 2020 and 2019.

A summary of loans to our directors and executive officers (which includes loans to entities in which the individual owns a 10% or more voting interest) for the years ended December 31 follows:

	2020			2019
	(In thousands)

Balance at beginning of year	$	13,077		$	14,205
New loans and advances		417			713
Repayments		(11,078	)		(1,841	)
Balance at end of year	$	2,416		$	13,077

Deposits held by us for directors and executive officers totaled $2.0 million at both December 31, 2020 and 2019.

LEASES

12 Months Ended

Dec. 31, 2020

LEASES [Abstract]

LEASES

NOTE 18 – LEASES

We have entered into leases in the normal course of business primarily for office facilities, some of which include renewal options and escalation clauses. Certain leases also include both lease components (fixed payments including rent, taxes and insurance costs) and non-lease components (common area or other maintenance costs) which are accounted for as a single lease component as we have elected the practical expedient to group lease and non-lease components together for all leases. We have also elected not to recognize leases with original lease terms of 12 months or less (short-term leases) on our Consolidated Statements of Financial Condition. Most of our leases include one or more options to renew. The exercise of lease renewal options is typically at our sole discretion and are included in our right of use (“ROU”) assets and lease liabilities if they are reasonably certain of exercise.

Leases are classified as operating or finance leases at the lease commencement date (we did not have any finance leases as of December 31, 2020). Lease expense for operating leases and short-term leases is recognized on a straight-line basis over the lease term. The ROU assets represent our right to use an underlying asset for the lease term and lease liabilities represent our obligation to make lease payments arising from the lease. ROU assets and lease liabilities are recognized at the lease commencement date based on the estimated present value of the lease payment over the lease term.

As most of our leases do not provide an implicit rate, we use our incremental borrowing rate based on the information available at the lease commencement date in determining the present value of the lease payments.

The cost components of our operating leases follows:

	2020		2019
	(In thousands)
Operating lease cost	$	1,780	$	2,217
Variable lease cost		69		142
Short-term lease cost		36		19
Total	$	1,885	$	2,378

Variable lease costs consist primarily of taxes, insurance, and common area or other maintenance costs for our leased facilities.

Supplemental balance sheet information related to our operating leases follows:

	2020			2019
	(In thousands)
Lease right of use asset (1)	$	7,646		$	8,282
Lease liabilities (2)	$	7,868		$	8,304

Weighted average remaining lease term (years)		7.12			7.47
Weighted average discount rate		2.4	%		2.8	%

(1)	Included in Accrued income and other assets in our Consolidated Statements of Financial Condition.

(2)	Included in Accrued expenses and other liabilities in our Consolidated Statements of Financial Condition.

Maturity analysis of our lease liabilities at December 31, 2020 based on required contractual payments follows:

	(In thousands)

2021	$	1,669
2022		1,489
2023		1,222
2024		815
2025		809
2026 and thereafter		2,525
Total lease payments		8,529
Less imputed interest		(661	)
Total	$	7,868

CONCENTRATIONS OF CREDIT RISK	12 Months Ended
CONCENTRATIONS OF CREDIT RISK	Dec. 31, 2020
CONCENTRATIONS OF CREDIT RISK [Abstract]
CONCENTRATIONS OF CREDIT RISK	NOTE 19 – CONCENTRATIONS OF CREDIT RISK Credit risk is the risk to earnings and capital arising from an obligor’s failure to meet the terms of any contract with our organization or otherwise failing to perform as agreed. Credit risk can occur outside of our traditional lending activities and can exist in any activity where success depends on counterparty, issuer or borrower performance. Concentrations of credit risk (whether on- or off-balance sheet) arising from financial instruments can exist in relation to individual borrowers or groups of borrowers, certain types of collateral, certain types of industries or certain geographic regions. Credit risk associated with these concentrations could arise when a significant amount of loans or other financial instruments, related by similar characteristics, are simultaneously impacted by changes in economic or other conditions that cause their probability of repayment or other type of settlement to be adversely affected. Our major concentrations of credit risk arise by collateral type and by industry. The significant concentrations by collateral type at December 31, 2020, include $930.9 million of loans secured by residential real estate and $232.7 million of construction and development loans. Additionally, within our commercial real estate and commercial loan portfolio, we had significant standard industry classification concentrations in the following categories as of December 31, 2020: Lessors of Nonresidential Real Estate ($301.8 million); Lessors of Residential Real Estate ($119.6 million); Construction ($130.4 million); Manufacturing ($99.4 million); Accommodation and Food Services ($99.1 million) and Health Care and Social Assistance ($87.2 million). A geographic concentration arises because we primarily conduct our lending activities in the State of Michigan.

REGULATORY MATTERS

12 Months Ended

Dec. 31, 2020

REGULATORY MATTERS [Abstract]

REGULATORY MATTERS

NOTE 20 – REGULATORY MATTERS

Capital guidelines adopted by federal and state regulatory agencies and restrictions imposed by law limit the amount of cash dividends our Bank can pay to us. Under these guidelines, the amount of dividends that may be paid in any calendar year is limited to the Bank’s current year net profits, combined with the retained net profits of the preceding two years. Further, the Bank cannot pay a dividend at any time that it has negative undivided profits. As of December 31, 2020, the Bank had positive undivided profits of $77.8 million. It is not our intent to have dividends paid in amounts that would reduce the capital of our Bank to levels below those which we consider prudent or that would not be in accordance with guidelines of regulatory authorities.

We are also subject to various regulatory capital requirements. The prompt corrective action regulations establish quantitative measures to ensure capital adequacy and require minimum amounts and ratios of total, Tier 1, and common equity Tier 1 capital to risk-weighted assets and Tier 1 capital to average assets. Failure to meet minimum capital requirements can result in certain mandatory, and possibly discretionary, actions by regulators that could have a material effect on our consolidated financial statements. In addition, capital adequacy rules include a common equity Tier 1 capital conservation buffer of 2.5% of risk-weighted assets that applies to all supervised financial institutions. To avoid limits on capital distributions and certain discretionary bonus payments we must meet the minimum ratio for adequately capitalized institutions plus the buffer. Under capital adequacy guidelines, we must meet specific capital requirements that involve quantitative measures as well as qualitative judgments by the regulators. The most recent regulatory filings as of December 31, 2020 and 2019, categorized our Bank as well capitalized. Management is not aware of any conditions or events that would have changed the most recent Federal Deposit Insurance Corporation (‘‘FDIC’’) categorization.

Our actual capital amounts and ratios at December 31 follow⁽¹⁾:

	Actual					Minimum for Adequately Capitalized Institutions					Minimum for Well-Capitalized Institutions
	Amount		Ratio			Amount		Ratio			Amount		Ratio
	(Dollars in thousands)

2020
Total capital to risk-weighted assets
Consolidated	$	455,072		15.95	%	$	228,214		8.00	%	NA		NA
Independent Bank		401,005		14.06			228,111		8.00		$	285,139		10.00	%

Tier 1 capital to risk-weighted assets
Consolidated	$	379,395		13.30	%	$	171,161		6.00	%	NA		NA
Independent Bank		365,343		12.81			171,083		6.00		$	228,111		8.00	%

Common equity tier 1 capital to risk-weighted assets
Consolidated	$	341,095		11.96	%	$	128,370		4.50	%	NA		NA
Independent Bank		365,343		12.81			128,312		4.50		$	185,340		6.50	%

Tier 1 capital to average assets
Consolidated	$	379,395		9.15	%	$	165,825		4.00	%	NA		NA
Independent Bank		365,343		8.81			165,828		4.00		$	207,285		5.00	%

2019
Total capital to risk-weighted assets
Consolidated	$	380,454		13.74	%	$	221,562		8.00	%	NA		NA
Independent Bank		358,914		12.96			221,482		8.00		$	276,852		10.00	%

Tier 1 capital to risk-weighted assets
Consolidated	$	352,764		12.74	%	$	166,171		6.00	%	NA		NA
Independent Bank		331,224		11.96			166,111		6.00		$	221,482		8.00	%

Common equity tier 1 capital to risk-weighted assets
Consolidated	$	314,532		11.36	%	$	124,628		4.50	%	NA		NA
Independent Bank		331,224		11.96			124,583		4.50		$	179,954		6.50	%

Tier 1 capital to average assets
Consolidated	$	352,764		10.11	%	$	139,632		4.00	%	NA		NA
Independent Bank		331,224		9.49			139,615		4.00		$	174,519		5.00	%

(1)	These ratios do not reflect a capital conservation buffer of 2.50% at December 31, 2020 and 2019.

NA - Not applicable

The components of our regulatory capital are as follows:

	Consolidated						Independent Bank
	December 31,						December 31,
	2020			2019			2020			2019
	(In thousands)
Total shareholders’ equity	$	389,522		$	350,169		$	413,770		$	366,861
Add (deduct)
Accumulated other comprehensive loss for regulatory purposes		(15,821	)		(2,011	)		(15,821	)		(2,011	)
Goodwill and other intangibles		(32,606	)		(33,626	)		(32,606	)		(33,626	)
Common equity tier 1 capital		341,095			314,532			365,343			331,224
Qualifying trust preferred securities		38,300			38,232			-			-
Tier 1 capital		379,395			352,764			365,343			331,224
Subordinated debt		40,000			-			-			-
Allowance for loan losses and allowance for unfunded lending commitments limited to 1.25% of total risk-weighted assets		35,677			27,690			35,662			27,690
Total risk-based capital	$	455,072		$	380,454		$	401,005		$	358,914

The entire disclosure for regulatory capital requirement for depository and lending institutions. Institutions include, but not are not limited to, finance company, insured depository institution, bank holding company, savings and loan association holding company, bank and savings institution not federally insured, mortgage company, foreign financial institution and credit union.

FAIR VALUE DISCLOSURES

12 Months Ended

Dec. 31, 2020

FAIR VALUE DISCLOSURES [Abstract]

FAIR VALUE DISCLOSURES

NOTE 21 – FAIR VALUE DISCLOSURES

FASB ASC topic 820 defines fair value as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. FASB ASC topic 820 also establishes a fair value hierarchy which requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value.

The standard describes three levels of inputs that may be used to measure fair value:

Level 1: Valuation is based upon quoted prices for identical instruments traded in active markets. Level 1 instruments include securities traded on active exchange markets, such as the New York Stock Exchange, as well as U.S. Treasury securities that are traded by dealers or brokers in active over-the-counter markets.

Level 2: Valuation is based upon quoted prices for similar instruments in active markets, quoted prices for identical or similar instruments in markets that are not active, and model-based valuation techniques for which all significant assumptions are observable in the market. Level 2 instruments include securities traded in less active dealer or broker markets.

Level 3: Valuation is generated from model-based techniques that use at least one significant assumption not observable in the market. These unobservable assumptions reflect estimates of assumptions that market participants would use in pricing the asset or liability. Valuation techniques include use of option pricing models, discounted cash flow models and similar techniques.

We used the following methods and significant assumptions to estimate fair value:

Securities: Where quoted market prices are available in an active market, securities available for sale are classified as Level 1 of the valuation hierarchy. We currently do not have any Level 1 securities. If quoted market prices are not available for the specific security, then fair values are estimated by (1) using quoted market prices of securities with similar characteristics, (2) matrix pricing, which is a mathematical technique used widely in the industry to value debt securities without relying exclusively on quoted prices for specific securities but rather by relying on the securities’ relationship to other benchmark quoted prices, or (3) a discounted cash flow analysis whose significant fair value inputs can generally be verified and do not typically involve judgment by management. These securities are classified as Level 2 of the valuation hierarchy and primarily include agency securities, private label mortgage-backed securities, other asset backed securities, obligations of states and political subdivisions, trust preferred securities, corporate securities and foreign government securities.

Loans held for sale: The fair value of mortgage loans held for sale, carried at fair value is based on agency cash window loan pricing for comparable assets (recurring Level 2).

Impaired loans with specific loss allocations based on collateral value: From time to time, certain loans are considered impaired and an AFLL is established. Loans for which it is probable that payment of interest and principal will not be made in accordance with the contractual terms of the loan agreement are considered impaired. We measure our investment in an impaired loan based on one of three methods: the loan’s observable market price, the fair value of the collateral or the present value of expected future cash flows discounted at the loan’s effective interest rate. Those impaired loans not requiring an allowance represent loans for which the fair value of the expected repayments or collateral exceed the recorded investments in such loans. At December 31, 2020 and 2019, all of our total impaired loans were evaluated based on either the fair value of the collateral or the present value of expected future cash flows discounted at the loan’s effective interest rate. When the fair value of the collateral is based on an appraised value we record the impaired loan as nonrecurring Level 3. These appraisals may utilize a single valuation approach or a combination of approaches including comparable sales and the income approach. Adjustments are routinely made in the appraisal process by the independent appraisers to adjust for differences between the comparable sales and income data available. Such adjustments can be significant and thus will typically result in a Level 3 classification of the inputs for determining fair value.

Other real estate: At the time of acquisition, other real estate is recorded at fair value, less estimated costs to sell, which becomes the property’s new basis. Subsequent write-downs to reflect declines in value since the time of acquisition may occur from time to time and are recorded in net (gains) losses on other real estate and repossessed assets in the Consolidated Statements of Operations. The fair value of the property used at and subsequent to the time of acquisition is typically determined by a third party appraisal of the property. These appraisals may utilize a single valuation approach or a combination of approaches including comparable sales and the income approach. Adjustments are routinely made in the appraisal process by the independent appraisers to adjust for differences between the comparable sales and income data available. Such adjustments can be significant and typically result in a Level 3 classification of the inputs for determining fair value.

Appraisals for both collateral-dependent impaired loans and other real estate are performed by certified general appraisers (for commercial properties) or certified residential appraisers (for residential properties) whose qualifications and licenses have been reviewed and verified by us. Once received, an independent third party, or a member of our Collateral Evaluation Department (for commercial properties), or a member of our Special Assets/ORE Group (for residential properties) reviews the assumptions and approaches utilized in the appraisal as well as the overall resulting fair value in comparison with independent data sources such as recent market data or industry-wide statistics. We compare the actual selling price of collateral that has been sold to the most recent appraised value of our properties to determine what additional adjustment, if any, should be made to the appraisal value to arrive at fair value. For commercial and residential properties we typically discount an appraisal to account for various factors that the appraisal excludes in its assumptions. These additional discounts generally do not result in material adjustments to the appraised value.

Capitalized mortgage loan servicing rights: The fair value of capitalized mortgage loan servicing rights is based on a valuation model used by an independent third party that calculates the present value of estimated net servicing income. The valuation model incorporates assumptions that market participants would use in estimating future net servicing income. Certain model assumptions are generally unobservable and are based upon the best information available including data relating to our own servicing portfolio, reviews of mortgage servicing assumption and valuation surveys and input from various mortgage servicers and, therefore, are recorded as Level 3. Management evaluates the third party valuation for reasonableness each quarter as part of our financial reporting control processes.

Derivatives: The fair value of rate-lock mortgage loan commitments is based on agency cash window loan pricing for comparable assets and the fair value of mandatory commitments to sell mortgage loans is based on mortgage backed security pricing for comparable assets (recurring Level 2). The fair value of interest rate swap and interest rate cap agreements are derived from proprietary models which utilize current market data. The significant fair value inputs can generally be observed in the market place and do not typically involve judgment by management (recurring Level 2). The fair value of purchased and written options is based on prices of financial instruments with similar characteristics and do not typically involve judgment by management (recurring Level 2).

Assets and liabilities measured at fair value, including financial assets for which we have elected the fair value option, were as follows:

			Fair Value Measurements Using
	Fair Value Measure- ments		Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Un- observable Inputs (Level 3)
	(In thousands)
December 31, 2020:
Measured at Fair Value on a Recurring Basis
Assets
Securities available for sale
U.S. agency	$	10,748	$	-	$	10,748	$	-
U.S. agency residential mortgage-backed		344,582		-		344,582		-
U.S. agency commercial mortgage-backed		7,195		-		7,195		-
Private label mortgage-backed		42,829		-		42,829		-
Other asset backed		254,181		-		254,181		-
Obligations of states and political subdivisions		324,293		-		324,293		-
Corporate		86,017		-		86,017		-
Trust preferred		1,798		-		1,798		-
Foreign government		516		-		516		-
Loans held for sale, carried at fair value		92,434		-		92,434		-
Capitalized mortgage loan servicing rights		16,904		-		-		16,904
Derivatives (1)		16,782		-		16,782		-
Liabilities
Derivatives (2)		11,754		-		11,754		-

Measured at Fair Value on a Non-recurring Basis:
Assets
Impaired loans (3)
Commercial
Commercial and industrial		1,468		-		-		1,468
Commercial real estate		6,586		-		-		6,586
Mortgage
1-4 family owner occupied - jumbo		-		-		-		-
1-4 family owner occupied - non-jumbo		321		-		-		321
1-4 family non-owner occupied		155		-		-		155
1-4 family - 2nd lien		324		-		-		324
Resort lending		61		-		-		61
Installment
Boat lending		4		-		-		4
Recreational vehicle lending		31		-		-		31
Other		124		-		-		124
Other real estate (4)
1-4 family owner occupied - non-jumbo		102		-		-		102

(1)	Included in accrued income and other assets in the Consolidated Statements of Financial Condition.

(2)	Included in accrued expenses and other liabilities in the Consolidated Statements of Financial Condition.

(3)	Only includes impaired loans with specific loss allocations based on collateral value.

(4)	Only includes other real estate with subsequent write downs to fair value.

			Fair Value Measurements Using
	Fair Value Measure- ments		Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Un- observable Inputs (Level 3)
	(In thousands)
December 31, 2019:
Measured at Fair Value on a Recurring Basis
Assets
Securities available for sale
U.S. agency	$	14,661	$	-	$	14,661	$	-
U.S. agency residential mortgage-backed		227,762		-		227,762		-
U.S. agency commercial mortgage-backed		10,756		-		10,756		-
Private label mortgage-backed		39,693		-		39,693		-
Other asset backed		93,886		-		93,886		-
Obligations of states and political subdivisions		96,102		-		96,102		-
Corporate		33,195		-		33,195		-
Trust preferred		1,843		-		1,843		-
Foreign government		502		-		502		-
Loans held for sale, carried at fair value		69,800		-		69,800		-
Capitalized mortgage loan servicing rights		19,171		-		-		19,171
Derivatives (1)		5,464		-		5,464		-
Liabilities
Derivatives (2)		4,402		-		4,402		-

Measured at Fair Value on a Non-recurring Basis:
Assets
Impaired loans (3)
Commercial
Commercial and industrial		655		-		-		655
Commercial real estate		316		-		-		316
Mortgage
1-4 family owner occupied - jumbo		987		-		-		987
1-4 family owner occupied - non-jumbo		470		-		-		470
1-4 family non-owner occupied		281		-		-		281
1-4 family - 2nd lien		294		-		-		294
Resort lending		245		-		-		245
Installment
Boat lending		67		-		-		67
Recreational vehicle lending		2		-		-		2
Other		121		-		-		121
Other real estate (4)
Mortgage 1-4 family owner occupied - non-jumbo		31		-		-		31
Installment - other		28		-		-		28

(1)	Included in accrued income and other assets in the Consolidated Statements of Financial Condition.

(2)	Included in accrued expenses and other liabilities in the Consolidated Statements of Financial Condition.

(3)	Only includes impaired loans with specific loss allocations based on collateral value.

(4)	Only includes other real estate with subsequent write downs to fair value.

Changes in fair values of financial assets for which we have elected the fair value option for the years ended December 31 were as follows:

	Net Gains (Losses) on Assets								Total Change in Fair Values Included
	Securities Available For Sale			Mortgage Loans		Mortgage Loan Servicing, net			in Current Period Earnings
	(In thousands)

2020
Loans held for sale	$	-		$	1,962	$	-		$	1,962
Capitalized mortgage loan servicing rights		-			-		(16,224	)		(16,224	)

2019
Equity securities at fair value	$	167		$	-	$	-		$	167
Loans held for sale		-			637		-			637
Capitalized mortgage loan servicing rights		-			-		(9,532	)		(9,532	)

2018
Trading securities	$	(62	)	$	-	$	-		$	(62	)
Loans held for sale		-			413		-			413
Capitalized mortgage loan servicing rights		-			-		(2,323	)		(2,323	)

For those items measured at fair value pursuant to our election of the fair value option, interest income is recorded within the Consolidated Statements of Operations based on the contractual amount of interest income earned on these financial assets and dividend income is recorded based on cash dividends received.

The following represent impairment charges recognized during the years ended December 31, 2020, 2019 and 2018 relating to assets measured at fair value on a non-recurring basis:

•

Loans which are measured for impairment using the fair value of collateral for collateral dependent loans had a carrying amount of $9.1 million, which is net of a valuation allowance of $1.8 million at December 31, 2020, and had a carrying amount of $3.4 million, which is net of a valuation allowance of $1.5 million at December 31, 2019. An additional provision for loan losses relating to these impaired loans of $0.7 million, $1.3 million and $1.3 million was included in our results of operations for the years ending December 31, 2020, 2019 and 2018, respectively.

•

Other real estate, which is measured using the fair value of the property, had a carrying amount of $0.10 million which is net of a valuation allowance of $0.09 million at December 31, 2020, and a carrying amount of $0.06 million which is net of a valuation allowance of $0.09 million, at December 31, 2019. An additional charge relating to other real estate measured at fair value of $0.03 million, $0.03 million and $0.09 million was included in our results of operations during the years ended December 31, 2020, 2019 and 2018, respectively.

A reconciliation for all assets and (liabilities) measured at fair value on a recurring basis using significant unobservable inputs (Level 3) for the years ended December 31 follows:

	Capitalized Mortgage Loan Servicing Rights
	2020			2019			2018
	(In thousands)
Beginning balance	$	19,171		$	21,400		$	15,699
Total losses realized and unrealized:
Included in results of operations		(16,224	)		(9,532	)		(2,323	)
Included in other comprehensive income (loss)		-			-			-
Purchases, issuances, settlements, maturities and calls		13,957			7,303			8,024
Transfers in and/or out of Level 3		-			-			-
Ending balance	$	16,904		$	19,171		$	21,400

Amount of total losses for the period included in earnings attributable to the change in unrealized losses relating to assets and liabilities still held at December 31	$	(16,224	)	$	(9,532	)	$	(2,323	)

The fair value of our capitalized mortgage loan servicing rights has been determined based on a valuation model used by an independent third party as discussed above. The significant unobservable inputs used in the fair value measurement of the capitalized mortgage loan servicing rights are discount rate, cost to service, ancillary income, float rate and prepayment rate. Significant changes in all five of these assumptions in isolation would result in significant changes to the value of our capitalized mortgage loan servicing rights. Quantitative information about our Level 3 fair value measurements measured on a recurring basis follows:

	Asset Fair Value		Valuation Technique		Unobservable Inputs		Range			Weighted Average
	(In thousands)			-		-		-			-
2020
Capitalized mortgage loan servicing rights	$	16,904	Present value of net		Discount rate		10.00% to 13.00%				10.09	%
			servicing revenue		Cost to service		$	69 to $289		$	79
					Ancillary income		20 to 37				22
					Float rate			0.43	%		0.43	%
					Prepayment rate		7.92% to 64.70%				20.85

2019
Capitalized mortgage loan servicing rights	$	19,171	Present value of net		Discount rate		10.00% to 13.00%				10.14	%
			servicing revenue		Cost to service		$	66 to $316		$	81
					Ancillary income		20 to 37				22
					Float rate			1.73	%		1.73	%
					Prepayment rate		7.01% to 69.34%				14.96

Quantitative information about Level 3 fair value measurements measured on a non-recurring basis follows:

Asset

Fair

Value

Valuation

Technique

Unobservable

Inputs

Range

Weighted

Average

(In thousands)

2020

Impaired loans

Commercial

8,054

Sales comparison

Adjustment for differences

approach

between comparable sales

(40.0)% to 75.0%

3.8

Mortgage and Installment (1)

1,020

Sales comparison

Adjustment for differences

approach

between comparable sales

(73.3) to 104.6

(1.5

)

Other real estate

Mortgage

102

Sales comparison

Adjustment for differences

approach

between comparable sales

(13.1) to 2.4

(3.6

)

2019

Impaired loans

Commercial

971

Sales comparison

Adjustment for differences

approach

between comparable sales

(48.0)% to 19.2%

(5.6

Mortgage and Installment (1)

2,467

Sales comparison

Adjustment for differences

approach

between comparable sales

(25.2) to 49.2

11.5

Other real estate

Mortgage and Installment

Sales comparison

Adjustment for differences

approach

between comparable sales

(11.6) to 5.0

(5.1

)

(1)

In addition to the valuation techniques and unobservable inputs discussed above, at December 31, 2020 and 2019 certain impaired collateral dependent installment loans totaling approximately $0.16 million and $0.14 million are secured by collateral other than real estate. For the majority of these loans, we apply internal discount rates to industry valuation guides.

The following table reflects the difference between the aggregate fair value and the aggregate remaining contractual principal balance outstanding for loans held for sale for which the fair value option has been elected at December 31:

	Aggregate Fair Value		Difference		Contractual Principal
	(In thousands)
Loans held for sale
2020	$	92,434	$	3,856	$	88,578
2019		69,800		1,894		67,906
2018		44,753		1,257		43,496

The entire disclosure for the fair value of financial instruments (as defined), including financial assets and financial liabilities (collectively, as defined), and the measurements of those instruments as well as disclosures related to the fair value of non-financial assets and liabilities. Such disclosures about the financial instruments, assets, and liabilities would include: (1) the fair value of the required items together with their carrying amounts (as appropriate); (2) for items for which it is not practicable to estimate fair value, disclosure would include: (a) information pertinent to estimating fair value (including, carrying amount, effective interest rate, and maturity, and (b) the reasons why it is not practicable to estimate fair value; (3) significant concentrations of credit risk including: (a) information about the activity, region, or economic characteristics identifying a concentration, (b) the maximum amount of loss the entity is exposed to based on the gross fair value of the related item, (c) policy for requiring collateral or other security and information as to accessing such collateral or security, and (d) the nature and brief description of such collateral or security; (4) quantitative information about market risks and how such risks are managed; (5) for items measured on both a recurring and nonrecurring basis information regarding the inputs used to develop the fair value measurement; and (6) for items presented in the financial statement for which fair value measurement is elected: (a) information necessary to understand the reasons for the election, (b) discussion of the effect of fair value changes on earnings, (c) a description of [similar groups] items for which the election is made and the relation thereof to the balance sheet, the aggregate carrying value of items included in the balance sheet that are not eligible for the election; (7) all other required (as defined) and desired information.

FAIR VALUES OF FINANCIAL INSTRUMENTS [Abstract]

FAIR VALUES OF FINANCIAL INSTRUMENTS

12 Months Ended

Dec. 31, 2020

FAIR VALUES OF FINANCIAL INSTRUMENTS

NOTE 22 – FAIR VALUES OF FINANCIAL INSTRUMENTS

Most of our assets and liabilities are considered financial instruments. Many of these financial instruments lack an available trading market and it is our general practice and intent to hold the majority of our financial instruments to maturity. Significant estimates and assumptions were used to determine the fair value of financial instruments. These estimates are subjective in nature, involving uncertainties and matters of judgment, and therefore, fair values may not be a precise estimate. Changes in assumptions could significantly affect the estimates.

Estimated fair values have been determined using available data and methodologies that are considered suitable for each category of financial instrument. For instruments with adjustable interest rates which reprice frequently and without significant credit risk, it is presumed that estimated fair values approximate the recorded book balances.

The estimated recorded book balances and fair values at December 31 follow:

					Fair Value Using
	Recorded Book Balance		Fair Value		Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Un- observable Inputs (Level 3)
	(In thousands)
2020
Assets
Cash and due from banks	$	56,006	$	56,006	$	56,006	$	-	$	-
Interest bearing deposits		62,699		62,699		62,699		-		-
Securities available for sale		1,072,159		1,072,159		-		1,072,159		-
Federal Home Loan Bank and Federal Reserve Bank Stock		18,427	NA		NA		NA		NA
Net loans and loans held for sale		2,790,683		2,794,058		-		92,434		2,701,624
Accrued interest receivable		12,315		12,315		3		3,414		8,898
Derivative financial instruments		16,782		16,782		-		16,782		-
Liabilities
Deposits with no stated maturity (1)	$	3,198,338	$	3,198,338	$	3,198,338	$	-	$	-
Deposits with stated maturity (1)		439,017		441,457		-		441,457		-
Other borrowings		30,012		30,844		-		30,844		-
Subordinated debt		39,281		41,417		-		41,417		-
Subordinated debentures		39,524		30,265		-		30,265		-
Accrued interest payable		601		601		59		542		-
Derivative financial instruments		11,754		11,754		-		11,754		-
2019
Assets
Cash and due from banks	$	53,295	$	53,295	$	53,295	$	-	$	-
Interest bearing deposits		12,009		12,009		12,009		-		-
Interest bearing deposits - time		350		350		-		350		-
Securities available for sale		518,400		518,400		-		518,400		-
Federal Home Loan Bank and Federal Reserve Bank Stock		18,359	NA		NA		NA		NA
Net loans and loans held for sale		2,768,675		2,768,817		-		69,800		2,699,017
Accrued interest receivable		10,108		10,108		8		1,752		8,348
Derivative financial instruments		5,464		5,464		-		5,464		-

Liabilities
Deposits with no stated maturity (1)	$	2,427,190	$	2,427,190	$	2,427,190	$	-	$	-
Deposits with stated maturity (1)		609,537		610,235		-		610,235		-
Other borrowings		88,646		88,680		-		88,680		-
Subordinated debentures		39,456		33,149		-		33,149		-
Accrued interest payable		1,296		1,296		97		1,199		-
Derivative financial instruments		4,402		4,402		-		4,402		-

NA – Not applicable

(1)

Deposits with no stated maturity include reciprocal deposits with a recorded book balance of $518.400 million and $388.369 million at December 31, 2020 and 2019, respectively. Deposits with a stated maturity include reciprocal deposits with a recorded book balance of $37.785 million and $42.658 million at December 31, 2020 and 2019, respectively.

The fair values for commitments to extend credit and standby letters of credit are estimated to approximate their aggregate book balance, which is nominal, and therefore are not disclosed.

Fair value estimates are made at a specific point in time, based on relevant market information and information about the financial instrument. These estimates do not reflect any premium or discount that could result from offering for sale the entire holdings of a particular financial instrument.

Fair value estimates are based on existing on- and off-balance sheet financial instruments without attempting to estimate the value of anticipated future business, the value of future earnings attributable to off-balance sheet activities and the value of assets and liabilities that are not considered financial instruments.

Fair value estimates for deposit accounts do not include the value of the core deposit intangible asset resulting from the low-cost funding provided by the deposit liabilities compared to the cost of borrowing funds in the market.

ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS)

12 Months Ended

Dec. 31, 2020

ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS) [Abstract]

ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS)

NOTE 23 – ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS)

A summary of changes in accumulated other comprehensive income (loss) (‘‘AOCIL’’), net of tax during the years ended December 31 follows:

	Unrealized Gains (Losses) on Securities Available for Sale			Dispropor- tionate Tax Effects from Securities Available for Sale			Unrealized Gains (Losses) on Cash Flow Hedges			Total
	(In thousands)
2020
Balances at beginning of period	$	3,739		$	(5,798	)	$	(1,727	)	$	(3,786	)
Other comprehensive income (loss) before reclassifications		12,294			-			(279	)		12,015
Amounts reclassified from AOCIL		(211	)		-			2,006			1,795
Net current period other comprehensive income		12,083			-			1,727			13,810
Balances at end of period	$	15,822		$	(5,798	)	$	-		$	10,024

2019
Balances at beginning of period	$	(4,185	)	$	(5,798	)	$	(125	)	$	(10,108	)
Other comprehensive income (loss) before reclassifications		8,035			-			(1,266	)		6,769
Amounts reclassified from AOCIL		(111	)		-			(336	)		(447	)
Net current period other comprehensive income (loss)		7,924			-			(1,602	)		6,322
Balances at end of period	$	3,739		$	(5,798	)	$	(1,727	)	$	(3,786	)

2018
Balances at beginning of period	$	(470	)	$	(5,798	)	$	269		$	(5,999	)
Other comprehensive loss before reclassifications		(3,671	)		-			(207	)		(3,878	)
Amounts reclassified from AOCIL		(44	)		-			(187	)		(231	)
Net current period other comprehensive loss		(3,715	)		-			(394	)		(4,109	)
Balances at end of period	$	(4,185	)	$	(5,798	)	$	(125	)	$	(10,108	)

The disproportionate tax effects from securities available for sale arose primarily due to tax effects of other comprehensive income (‘‘OCI’’) in the presence of a valuation allowance against our deferred tax assets and a pretax loss from operations. Generally, the amount of income tax expense or benefit allocated to operations is determined without regard to the tax effects of other categories of income or loss, such as OCI. However, an exception to the general rule is provided when, in the presence of a valuation allowance against deferred tax assets, there is a pretax loss from operations and pretax income from other categories in the current period. In such instances, income from other categories must offset the current loss from operations, the tax benefit of such offset being reflected in operations. Release of material disproportionate tax effects from other comprehensive income to earnings is done by the portfolio method whereby the effects will remain in AOCIL as long as we carry a more than inconsequential portfolio of securities available for sale.

A summary of reclassifications out of each component of AOCIL for the years ended December 31 follows:

AOCIL Component	Reclassified From AOCIL			Affected Line Item in Consolidated Statements of Operations
	(In thousands)

2020
Unrealized gains (losses) on securities available for sale	$	267		Net gains on securities
		-		Net impairment loss recognized in earnings
		267		Total reclassifications before tax
		56		Income tax expense
	$	211		Reclassifications, net of tax


Unrealized gains (losses) on cash flow hedges	$	2,539		Interest expense
		533		Income tax expense
	$	2,006		Reclassification, net of tax

	$	(1,795	)	Total reclassifications for the period, net of tax

2019
Unrealized gains (losses) on securities available for sale	$	140		Net gains on securities
		-		Net impairment loss recognized in earnings
		140		Total reclassifications before tax
		29		Income tax expense
	$	111		Reclassifications, net of tax

Unrealized gains (losses) on cash flow hedges	$	(425	)	Interest expense
		(89	)	Income tax expense
	$	(336	)	Reclassification, net of tax

	$	447		Total reclassifications for the period, net of tax

2018
Unrealized gains (losses) on securities available for sale	$	56		Net gains on securities
		-		Net impairment loss recognized in earnings
		56		Total reclassifications before tax
		12		Income tax expense
	$	44		Reclassifications, net of tax

Unrealized gains (losses) on cash flow hedges	$	(237	)	Interest expense
		(50	)	Income tax expense
	$	(187	)	Reclassification, net of tax

	$	231		Total reclassifications for the period, net of tax

INDEPENDENT BANK CORPORATION (PARENT COMPANY ONLY) FINANCIAL INFORMATION

12 Months Ended

Dec. 31, 2020

INDEPENDENT BANK CORPORATION (PARENT COMPANY ONLY) FINANCIAL INFORMATION [Abstract]

INDEPENDENT BANK CORPORATION (PARENT COMPANY ONLY) FINANCIAL INFORMATION

NOTE 24 – INDEPENDENT BANK CORPORATION (PARENT COMPANY ONLY) FINANCIAL INFORMATION

Presented below are condensed financial statements for our parent company.

CONDENSED STATEMENTS OF FINANCIAL CONDITION
	December 31,
	2020		2019
	(In thousands)
ASSETS
Cash and due from banks	$	10,466	$	10,505
Interest bearing deposits - time		40,000		10,000
Investment in subsidiaries		418,465		369,861
Accrued income and other assets		805		463
Total Assets	$	469,736	$	390,829

LIABILITIES AND SHAREHOLDERS’ EQUITY
Subordinated debt	$	39,281	$	-
Subordinated debentures		39,524		39,456
Accrued expenses and other liabilities		684		575
Shareholders’ equity		390,247		350,798
Total Liabilities and Shareholders’ Equity	$	469,736	$	390,829

CONDENSED STATEMENTS OF OPERATIONS

	Year Ended December 31,
	2020			2019			2018
	(In thousands)
OPERATING INCOME
Dividends from subsidiary	$	24,000		$	29,000		$	33,500
Interest income		99			230			160
Other income		42			61			56
Total Operating Income		24,141			29,291			33,716

OPERATING EXPENSES
Interest expense		2,893			2,104			1,924
Administrative and other expenses		733			655			748
Total Operating Expenses		3,626			2,759			2,672
Income Before Income Tax and Equity in Undistributed Net Income of Subsidiaries		20,515			26,532			31,044
Income tax benefit		(937	)		(423	)		(515	)
Income Before Equity in Undistributed Net Income of Subsidiaries		21,452			26,955			31,559
Equity in undistributed net income of subsidiaries		34,700			19,480			8,280
Net Income	$	56,152		$	46,435		$	39,839

CONDENSED STATEMENTS OF CASH FLOWS

	Year Ended December 31,
	2020			2019			2018
	(In thousands)
Net Income	$	56,152		$	46,435		$	39,839
ADJUSTMENTS TO RECONCILE NET INCOME TO NET CASH FROM OPERATING ACTIVITIES
Deferred income tax (benefit) expense		(34	)		1,503			6,620
Share based compensation		89			65			53
Accretion of discount on subordinated debt and debentures		113			68			51
(Increase) decrease in accrued income and other assets		(307	)		891			(1,307	)
Increase in accrued expenses and other liabilities		109			45			21
Equity in undistributed net income of subsidiaries		(34,700	)		(19,480	)		(8,280	)
Total Adjustments		(34,730	)		(16,908	)		(2,842	)
Net Cash From Operating Activities		21,422			29,527			36,997

CASH FLOW FROM (USED IN) INVESTING ACTIVITIES
Purchases of interest bearing deposits - time		(85,000	)		(20,000	)		(30,000	)
Maturity of interest bearing deposits - time		55,000			35,000			10,000
Acquisition of business, less cash received		-			-			431
Net Cash From (Used In) Investing Activities		(30,000	)		15,000			(19,569	)

CASH FLOW FROM (USED IN) FINANCING ACTIVITIES
Proceeds from issuance of subordinated debt, net of issuance costs		39,236			-			-
Dividends paid		(17,618	)		(16,554	)		(14,055	)
Proceeds from issuance of common stock		1,907			2,074			1,945
Share based compensation withholding obligation		(755	)		(882	)		(1,467	)
Repurchase of common stock		(14,231	)		(26,284	)		(12,681	)
Net Cash From (Used In) Financing Activities		8,539			(41,646	)		(26,258	)
Net Increase (Decrease) in Cash and Cash Equivalents		(39	)		2,881			(8,830	)
Cash and Cash Equivalents at Beginning of Year		10,505			7,624			16,454
Cash and Cash Equivalents at End of Year	$	10,466		$	10,505		$	7,624

REVENUE FROM CONTRACTS WITH CUSTOMERS

12 Months Ended

Dec. 31, 2020

REVENUE FROM CONTRACTS WITH CUSTOMERS [Abstract]

REVENUE FROM CONTRACTS WITH CUSTOMERS

NOTE 25 – REVENUE FROM CONTRACTS WITH CUSTOMERS

We account for revenue in accordance with ASC Topic 606, Revenue from Contracts with Customers. We derive the majority of our revenue from financial instruments and their related contractual rights and obligations which for the most part are excluded from the scope of this topic. These sources of revenue that are excluded from the scope of this topic include interest income, net gains on mortgage loans, net gains on securities, mortgage loan servicing, net and bank owned life insurance and were approximately 88.1% and 84.9% of total revenues at December 31, 2020 and 2019, respectively.

Material sources of revenue that are included in the scope of ASC Topic 606 include service charges on deposits, other deposit related income, interchange income and investment and insurance commissions and are discussed in the following paragraphs. Generally these sources of revenue are earned at the time the service is delivered or over the course of a monthly period and do not result in any contract asset or liability balance at any given period end. As a result, there were no contract assets or liabilities recorded as of December 31, 2020.

Service charges on deposit accounts and other deposit related income: Revenues are earned on depository accounts for commercial and retail customers and include fees for transaction-based, account maintenance and overdraft services. Transaction-based fees, which includes services such as ATM use fees, stop payment charges and

ACH fees are recognized at the time the transaction is executed as that is the time we fulfill our customer’s request. Account maintenance fees, which includes monthly maintenance services are earned over the course of a month representing the period over which the performance obligation is satisfied. Our obligation for overdraft services is satisfied at the time of the overdraft.

Interchange income: Interchange income primarily includes debit card interchange and network revenues. Debit card interchange and network revenues are earned on debit card transactions conducted through payment networks such as MasterCard and NYCE. Interchange income is recognized concurrently with the delivery of services on a daily basis. Interchange and network revenues are presented gross of interchange expenses, which are presented separately as a component of non-interest expense.

Investment and insurance commissions: Investment and insurance commissions include fees and commissions from asset management, custody, recordkeeping, investment advisory and other services provided to our customers. Revenue is recognized on an accrual basis at the time the services are performed and are generally based on either the market value of the assets managed or the services provided. We have an agent relationship with a third party provider of these services and net certain direct costs charged by the third party provider associated with providing these services to our customers.

Net gains on other real estate and repossessed assets: We record a gain or loss from the sale of other real estate when control of the property transfers to the buyer, which generally occurs at the time of an executed deed. If we were to finance the sale of other real estate to the buyer, we would assess whether the buyer is committed to perform their obligations under the contract and whether collectability of the transaction is probable. Once these criteria are met, the other real estate asset would be derecognized and the gain or loss on sale would be recorded upon the transfer of control of the property to the buyer. There were no other real estate properties sold during 2020 that were financed by us.

Disaggregation of our revenue sources by attribute for the years ended December 31 follow:

2020
	Service Charges on Deposit Accounts		Other Deposit Related Income		Interchange Income		Investment and Insurance Commissions		Total
	(In thousands)
Retail
Overdraft fees	$	5,627	$	-	$	-	$	-	$	5,627
Account service charges		2,017		-		-		-		2,017
ATM fees		-		1,173		-		-		1,173
Other		-		769		-		-		769
Business
Overdraft fees		873		-		-		-		873
ATM fees		-		24		-		-		24
Other		-		342		-		-		342
Interchange income		-		-		11,230		-		11,230
Asset management revenue		-		-		-		1,283		1,283
Transaction based revenue		-		-		-		688		688

Total	$	8,517	$	2,308	$	11,230	$	1,971	$	24,026

Reconciliation to Consolidated Statement of Operations:
Non-interest income - other:
Other deposit related income									$	2,308
Investment and insurance commissions										1,971
Bank owned life insurance										910
Other										2,332
Total									$	7,521

2019
	Service Charges on Deposit Accounts		Other Deposit Related Income		Interchange Income		Investment and Insurance Commissions		Total
	(In thousands)
Retail
Overdraft fees	$	7,590	$	-	$	-	$	-	$	7,590
Account service charges		2,103		-		-		-		2,103
ATM fees		-		1,368		-		-		1,368
Other		-		965		-		-		965
Business
Overdraft fees		1,515		-		-		-		1,515
ATM fees		-		35		-		-		35
Other		-		422		-		-		422
Interchange income		-		-		10,297		-		10,297
Asset management revenue		-		-		-		1,123		1,123
Transaction based revenue		-		-		-		535		535

Total	$	11,208	$	2,790	$	10,297	$	1,658	$	25,953

Reconciliation to Consolidated Statement of Operations:
Non-interest income - other:
Other deposit related income									$	2,790
Investment and insurance commissions										1,658
Bank owned life insurance										1,111
Other										3,723
Total									$	9,282

2018
	Service Charges on Deposit Accounts		Other Deposit Related Income		Interchange Income		Investment and Insurance Commissions		Total
	(In thousands)
Retail
Overdraft fees	$	8,285	$	-	$	-	$	-	$	8,285
Account service charges		2,406		-		-		-		2,406
ATM fees		-		1,423		-		-		1,423
Other		-		941		-		-		941
Business
Overdraft fees		1,567		-		-		-		1,567
ATM fees		-		34				-		34
Other		-		594				-		594
Interchange income		-		-		9,905		-		9,905
Asset management revenue		-		-		-		1,100		1,100
Transaction based revenue		-		-		-		871		871

Total	$	12,258	$	2,992	$	9,905	$	1,971	$	27,126

Reconciliation to Consolidated Statement of Operations:
Non-interest income - other:
Other deposit related income									$	2,992
Investment and insurance commissions										1,971
Bank owned life insurance										970
Other										2,827
Total									$	8,760

PRINCIPLES OF CONSOLIDATION

The entire disclosure of revenue from contract with customer to transfer good or service and to transfer nonfinancial asset. Includes, but is not limited to, disaggregation of revenue, credit loss recognized from contract with customer, judgment and change in judgment related to contract with customer, and asset recognized from cost incurred to obtain or fulfill contract with customer. Excludes insurance and lease contracts.

+ References

Reference 1: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 606
-URI http://asc.fasb.org/topic&trid=49130388

Reference 2: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 606
-SubTopic 10
-Section 50
-Paragraph 10
-URI http://asc.fasb.org/extlink&oid=121604090&loc=SL49130551-203045

Reference 3: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 606
-SubTopic 10
-Section 50
-Paragraph 13
-Subparagraph (b)(2)
-URI http://asc.fasb.org/extlink&oid=121604090&loc=SL49130556-203045

Reference 4: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 606
-SubTopic 10
-Section 50
-Paragraph 12
-Subparagraph (b)
-URI http://asc.fasb.org/extlink&oid=121604090&loc=SL49130554-203045

Reference 5: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 606
-SubTopic 10
-Section 50
-Paragraph 9
-URI http://asc.fasb.org/extlink&oid=121604090&loc=SL49130550-203045

Reference 6: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 606
-SubTopic 10
-Section 50
-Paragraph 12
-Subparagraph (e)
-URI http://asc.fasb.org/extlink&oid=121604090&loc=SL49130554-203045

Reference 7: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 606
-SubTopic 10
-Section 50
-Paragraph 12
-Subparagraph (a)
-URI http://asc.fasb.org/extlink&oid=121604090&loc=SL49130554-203045

Reference 8: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 606
-SubTopic 10
-Section 50
-Paragraph 12
-Subparagraph (d)
-URI http://asc.fasb.org/extlink&oid=121604090&loc=SL49130554-203045

Reference 9: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 606
-SubTopic 10
-Section 50
-Paragraph 15
-URI http://asc.fasb.org/extlink&oid=121604090&loc=SL49130558-203045

Reference 10: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 606
-SubTopic 10
-Section 50
-Paragraph 12
-Subparagraph (c)
-URI http://asc.fasb.org/extlink&oid=121604090&loc=SL49130554-203045

+ Details

RECENT ACQUISITION	12 Months Ended
RECENT ACQUISITION	Dec. 31, 2020
RECENT ACQUISITION [Abstract]
RECENT ACQUISITION	NOTE 26 – RECENT ACQUISITION Effective April 1, 2018, we completed the acquisition of all of the issued and outstanding shares of common stock of TCSB through a merger of TCSB into Independent Bank Corporation (‘‘IBCP’’), with IBCP as the surviving corporation (the ‘‘Merger’’). On that same date we also consolidated Traverse City State Bank, TCSB’s wholly-owned subsidiary bank, into Independent Bank (with Independent Bank as the surviving institution). Under the terms of the merger agreement each holder of TCSB common stock received 1.1166 shares of IBCP common stock plus cash in lieu of fractional shares totaling $0.005 million. TCSB option holders had their options converted into IBCP stock options. As a result we issued 2.71 million shares of common stock and 0.19 million stock options with a fair value of approximately $64.5 million to the shareholders and option holders of TCSB. The fair value of common stock and stock options issued as the consideration paid for TCSB was determined using the closing price of our common stock on the acquisition date. This acquisition was accounted for under the acquisition method of accounting. Accordingly, we recognized amounts for identifiable assets acquired and liabilities assumed at their estimated acquisition date fair values. TCSB results of operations are included in our results beginning April 1, 2018. Non-interest expense includes zero, zero and $3.5 million of costs incurred during the years ended December 31, 2020, 2019 and 2018, respectively related to the Merger.

ACCOUNTING POLICIES (Policies)

12 Months Ended

Dec. 31, 2020

ACCOUNTING POLICIES [Abstract]

STATEMENTS OF CASH FLOWS

INTEREST BEARING DEPOSITS

INTEREST BEARING DEPOSITS — Interest bearing deposits consist of overnight deposits with the Federal Reserve Bank.

INTEREST BEARING DEPOSITS - TIME — Interest bearing deposits - time consist of deposits with original maturities of 3 months or more. All of these deposits are FDIC insured.

LOANS HELD FOR SALE

OPERATING SEGMENTS

CAPITALIZED MORTGAGE LOAN SERVICING RIGHTS

TRANSFERS OF FINANCIAL ASSETS

SECURITIES

Gains and losses realized on the sale of securities available for sale are determined using the specific identification method and are recognized on a trade-date basis.

FEDERAL HOME LOAN BANK ("FHLB") STOCK

FEDERAL RESERVE BANK ("FRB") STOCK

LOAN REVENUE RECOGNITION

ALLOWANCE FOR LOAN LOSSES

PROPERTY AND EQUIPMENT

BANK OWNED LIFE INSURANCE

OTHER REAL ESTATE AND REPOSSESSED ASSETS

OTHER INTANGIBLES

GOODWILL

INCOME TAXES

We recognize interest and/or penalties related to income tax matters in income tax expense in the Consolidated Statements of Operations.

We file a consolidated federal income tax return. Intercompany tax liabilities are settled as if each subsidiary filed a separate return.

COMMITMENTS TO EXTEND CREDIT AND RELATED FINANCIAL INSTRUMENTS

DERIVATIVE FINANCIAL INSTRUMENTS

COMPREHENSIVE INCOME

NET INCOME PER COMMON SHARE

SHARE BASED COMPENSATION

COMMON STOCK

RECLASSIFICATION

RECLASSIFICATION — Certain amounts in the 2019 and 2018 consolidated financial statements have been reclassified to conform to the 2020 presentation.

ADOPTION OF NEW ACCOUNTING STANDARDS

•

•	Requires inclusion of expected recoveries, limited to the cumulative amount of prior write-offs, when estimating the allowance for credit losses for in scope financial assets (including collateral dependent assets).

•

•	Generally requires a cumulative-effect adjustment to retained earnings as of the beginning of the reporting period of adoption.

We do not expect a material allowance for credit losses to be recorded on securities available for sale upon adoption of this ASU.

SECURITIES (Tables)

12 Months Ended

Dec. 31, 2020

SECURITIES [Abstract]

Securities Available for Sale

Securities available for sale consist of the following at December 31:

	Amortized		Unrealized
	Cost		Gains		Losses		Fair Value
	(In thousands)
2020
U.S. agency	$	10,456	$	305	$	13	$	10,748
U.S. agency residential mortgage-backed		340,224		4,951		593		344,582
U.S. agency commercial mortgage-backed		6,869		326		-		7,195
Private label mortgage-backed		41,429		1,539		139		42,829
Other asset backed		252,596		1,796		211		254,181
Obligations of states and political subdivisions		315,795		8,676		178		324,293
Corporate		82,307		3,807		97		86,017
Trust preferred		1,971		-		173		1,798
Foreign government		500		16		-		516
Total	$	1,052,147	$	21,416	$	1,404	$	1,072,159

2019
U.S. agency	$	14,591	$	89	$	19	$	14,661
U.S. agency residential mortgage-backed		226,130		1,910		278		227,762
U.S. agency commercial mortgage-backed		10,671		113		28		10,756
Private label mortgage-backed		39,248		544		99		39,693
Other asset backed		94,158		103		375		93,886
Obligations of states and political subdivisions		94,499		1,724		121		96,102
Corporate		31,904		1,296		5		33,195
Trust preferred		1,968		-		125		1,843
Foreign government		499		3		-		502
Total	$	513,668	$	5,782	$	1,050	$	518,400

Investments in a Continuous Unrealized Loss Position

	Less Than Twelve Months				Twelve Months or More				Total
	Fair Value		Unrealized Losses		Fair Value		Unrealized Losses		Fair Value		Unrealized Losses
	(In thousands)

2020
U.S. agency	$	1,469	$	3	$	2,329	$	10	$	3,798	$	13
U.S. agency residential mortgage-backed		96,839		592		83		1		96,922		593
Private label mortgage-backed		11,838		95		2,050		44		13,888		139
Other asset backed		7,142		25		21,197		186		28,339		211
Obligations of states and political subdivisions		28,957		177		800		1		29,757		178
Corporate		1,924		97		-		-		1,924		97
Trust preferred		-		-		1,798		173		1,798		173
Total	$	148,169	$	989	$	28,257	$	415	$	176,426	$	1,404

2019
U.S. agency	$	2,782	$	8	$	2,712	$	11	$	5,494	$	19
U.S. agency residential mortgage-backed		56,377		126		13,551		152		69,928		278
U.S. agency commercial mortgage-backed		3,284		24		659		4		3,943		28
Private label mortgage-backed		16,387		55		343		44		16,730		99
Other asset backed		34,027		233		13,839		142		47,866		375
Obligations of states and political subdivisions		15,666		84		5,396		37		21,062		121
Corporate		2,125		5		-		-		2,125		5
Trust preferred		-		-		1,843		125		1,843		125
Total	$	130,648	$	535	$	38,343	$	515	$	168,991	$	1,050

Private Label Mortgage Backed Securities Below Investment Grade

At December 31, 2020, two private label mortgage-backed securities had credit related OTTI and are summarized as follows:

	Senior Security		Super Senior Security		Total
	(In thousands)

As of December 31, 2020
Fair value	$	373	$	505	$	878
Amortized cost		350		326		676
Non-credit unrealized loss		-		-		-
Unrealized gain		23		179		202
Cumulative credit related OTTI		757		457		1,214

Credit Losses Recognized in Earnings on Securities Available for Sale

A roll forward of credit losses recognized in earnings on securities available for sale for the years ending December 31 follow:

	2020		2019			2018
	(In thousands)
	$	1,214	$	1,594		$	1,594
Additions to credit losses on securities for which no previous OTTI was recognized		-		-			-
Increases to credit losses on securities for which OTTI was previously recognized		-		-			-
Reduction(1)		-		(380	)		-
Total	$	1,214	$	1,214		$	1,594

(1)	During 2019 one security with previously recorded OTTI was settled and balance is now zero.

Amortized Cost and Fair Value of Securities Available for Sale by Contractual Maturity

The amortized cost and fair value of securities available for sale at December 31, 2020, by contractual maturity, follow:

	Amortized Cost		Fair Value
	(In thousands)
Maturing within one year	$	21,244	$	21,412
Maturing after one year but within five years		79,837		82,725
Maturing after five years but within ten years		76,454		80,060
Maturing after ten years		233,494		239,175
		411,029		423,372
U.S. agency residential mortgage-backed		340,224		344,582
U.S. agency commercial mortgage-backed		6,869		7,195
Private label mortgage-backed		41,429		42,829
Other asset backed		252,596		254,181
Total	$	1,052,147	$	1,072,159

Gains and Losses Realized on Sale of Securities Available for Sale

A summary of proceeds from the sale of securities available for sale and gains and losses for the years ended December 31 follow:

			Realized
	Proceeds		Gains (1)		Losses
	(In thousands)
2020	$	38,095	$	271	$	4
2019		68,716		248		108
2018		48,736		192		136

(1)	2018 excludes a $0.144 million gain on the sale of 1,000 VISA Class B shares.

LOANS (Tables)

12 Months Ended

Dec. 31, 2020

LOANS [Abstract]

Loan Portfolios

Our loan portfolios at December 31 follow:

	2020		2019
	(In thousands)
Real estate (1)
Residential first mortgages	$	792,762	$	843,746
Residential home equity and other junior mortgages		138,128		166,735
Construction and land development		232,693		249,747
Other (2)		669,150		693,580
Consumer		468,090		448,297
Commercial		429,011		318,504
Agricultural		3,844		4,414
Total loans	$	2,733,678	$	2,725,023

(1)	Includes both residential and non-residential commercial loans secured by real estate.

(2)	Includes loans secured by multi-family residential and non-farm, non-residential property.

Analysis of Allowance for Loan Losses by Portfolio Segment

An analysis of the allowance for loan losses by portfolio segment for the years ended December 31 follows:

	Commercial			Mortgage			Installment			Subjective Allocation		Total
	(In thousands)
2020
Balance at beginning of period	$	7,922		$	8,216		$	1,283		$	8,727	$	26,148
Additions (deductions)
Provision for loan losses		1,751			(915	)		436			11,191		12,463
Recoveries credited to allowance		1,804			513			752			-		3,069
Loans charged against the allowance		(4,076	)		(816	)		(1,359	)		-		(6,251	)
Balance at end of period	$	7,401		$	6,998		$	1,112		$	19,918	$	35,429

2019
Balance at beginning of period	$7,090	$7,978	$895	$8,925	$24,888
Additions (deductions)
Provision for loan losses	(651)	526	1,147	(198)	824
Recoveries credited to allowance	2,165	933	863	-	3,961
Loans charged against the allowance	(682)	(1,221)	(1,622)	-	(3,525)
Balance at end of period	$7,922	$8,216	$1,283	$8,727	$26,148

2018
Balance at beginning of period	$5,595	$8,733	$864	$7,395	$22,587
Additions (deductions)
Provision for loan losses	(946)	457	462	1,530	1,503
Recoveries credited to allowance	2,889	734	999	-	4,622
Loans charged against the allowance	(448)	(1,946)	(1,430)	-	(3,824)
Balance at end of period	$7,090	$7,978	$895	$8,925	$24,888

Allowance for Loan Losses and Recorded Investment in Loans by Portfolio Segment

Allowance for loan losses and recorded investment in loans by portfolio segment at December 31 follows:

	Commercial		Mortgage		Installment		Subjective Allocation		Total
	(In thousands)
2020
Allowance for loan losses:
Individually evaluated for impairment	$	1,266	$	4,124	$	191	$	-	$	5,581
Collectively evaluated for impairment		6,135		2,874		921		19,918		29,848
Loans acquired with deteriorated credit quality		-		-		-		-		-
Total ending allowance for loan losses balance	$	7,401	$	6,998	$	1,112	$	19,918	$	35,429

Loans
Individually evaluated for impairment	$	9,431	$	39,245	$	1,996			$	50,672
Collectively evaluated for impairment		1,236,052		980,449		474,379				2,690,880
Loans acquired with deteriorated credit quality		468		410		147				1,025
Total loans recorded investment		1,245,951		1,020,104		476,522				2,742,577
Accrued interest included in recorded investment		3,536		4,178		1,185				8,899
Total loans	$	1,242,415	$	1,015,926	$	475,337			$	2,733,678

2019
Allowance for loan losses:
Individually evaluated for impairment	$1,031	$4,863	$261	$-	$6,155
Collectively evaluated for impairment	6,891	3,353	1,022	8,727	19,993
Loans acquired with deteriorated credit quality	-	-	-	-	-
Total ending allowance for loan losses balance	$7,922	$8,216	$1,283	$8,727	$26,148

Loans
Individually evaluated for impairment	$9,393	$43,574	$2,925		$55,892
Collectively evaluated for impairment	1,158,906	1,058,917	457,370		2,675,193
Loans acquired with deteriorated credit quality	1,394	575	316		2,285
Total loans recorded investment	1,169,693	1,103,066	460,611		2,733,370
Accrued interest included in recorded investment	2,998	4,155	1,194		8,347
Total loans	$1,166,695	$1,098,911	$459,417		$2,725,023

Loans on Non-Accrual Status and Past Due More than 90 Days

Loans on non-accrual status and past due more than 90 days (‘‘Non-performing Loans’’) at December 31 follow⁽¹⁾:

	90+ and Still Accruing		Non- Accrual		Total Non- Performing Loans
	(In thousands)
2020
Commercial
Commercial and industrial (2)	$	-	$	1,387	$	1,387
Commercial real estate		-		-		-
Mortgage
1-4 family owner occupied - jumbo		-		623		623
1-4 family owner occupied - non-jumbo (3)		-		2,281		2,281
1-4 family non-owner occupied		-		1,112		1,112
1-4 family - 2nd lien		-		1,344		1,344
Resort lending		-		607		607
Installment
Boat lending		-		52		52
Recreational vehicle lending		-		74		74
Other		-		393		393
Total recorded investment	$	-	$	7,873	$	7,873
Accrued interest included in recorded investment	$	-	$	-	$	-
2019
Commercial
Commercial and industrial (2)	$	-	$	565	$	565
Commercial real estate		-		735		735
Mortgage
1-4 family owner occupied - jumbo		-		1,179		1,179
1-4 family owner occupied - non-jumbo (3)		-		3,540		3,540
1-4 family non-owner occupied		-		1,039		1,039
1-4 family - 2nd lien		-		979		979
Resort lending		-		690		690
Installment
Boat lending		-		332		332
Recreational vehicle lending		-		3		3
Other		-		470		470
Total recorded investment	$	-	$	9,532	$	9,532
Accrued interest included in recorded investment	$	-	$	-	$	-

(1)	Non-performing loans exclude purchase credit impaired loans.

(2)	Non-performing commercial and industrial loans exclude $0.053 million and $0.077 million of government guaranteed loans at December 31, 2020 and 2019, respectively.

(3)	Non-performing 1-4 family owner occupied – non jumbo loans exclude $0.386 million and $0.569 million of government guaranteed loans at December 31, 2020 and 2019, respectively.

Aging Analysis of Loans by Class

An aging analysis of loans by class at December 31 follows:

	Loans Past Due								Loans not		Total
	30-59 days		60-89 days		90+ days		Total		Past Due		Loans
	(In thousands)
2020
Commercial
Commercial and industrial	$	5,003	$	131	$	70	$	5,204	$	671,115	$	676,319
Commercial real estate		2,600		-		-		2,600		567,032		569,632
Mortgage
1-4 family owner occupied - jumbo		761		-		623		1,384		438,794		440,178
1-4 family owner occupied - non-jumbo		1,888		453		502		2,843		264,730		267,573
1-4 family non-owner occupied		1,184		139		476		1,799		157,977		159,776
1-4 family - 2nd lien		710		228		732		1,670		92,860		94,530
Resort lending		32		195		358		585		57,462		58,047
Installment
Boat lending		95		101		-		196		207,317		207,513
Recreational vehicle lending		207		37		48		292		169,282		169,574
Other		337		162		199		698		98,737		99,435
Total recorded investment	$	12,817	$	1,446	$	3,008	$	17,271	$	2,725,306	$	2,742,577
Accrued interest included in recorded investment	$	147	$	22	$	-	$	169	$	8,730	$	8,899

2019
Commercial
Commercial and industrial	$	-	$	289	$	102	$	391	$	564,480	$	564,871
Commercial real estate		177		-		735		912		603,910		604,822
Mortgage
1-4 family owner occupied - jumbo		1,757		1,037		-		2,794		398,759		401,553
1-4 family owner occupied - non-jumbo		2,672		852		1,387		4,911		342,349		347,260
1-4 family non-owner occupied		695		136		623		1,454		168,083		169,537
1-4 family - 2nd lien		909		90		386		1,385		115,157		116,542
Resort lending		364		53		565		982		67,192		68,174
Installment
Boat lending		337		107		88		532		202,750		203,282
Recreational vehicle lending		161		97		3		261		153,184		153,445
Other		377		275		202		854		103,030		103,884
Total recorded investment	$	7,449	$	2,936	$	4,091	$	14,476	$	2,718,894	$	2,733,370
Accrued interest included in recorded investment	$	74	$	34	$	-	$	108	$	8,239	$	8,347

Impaired Loans

Impaired loans are as follows:

	December 31,
	2020		2019
	(In thousands)
Impaired loans with no allocated allowance for loan losses
TDR	$	93	$	337
Non - TDR		1,367		1,550
Impaired loans with an allocated allowance for loan losses
TDR - allowance based on collateral		9,027		1,587
TDR - allowance based on present value cash flow		37,953		48,798
Non - TDR - allowance based on collateral		1,873		3,365
Total impaired loans	$	50,313	$	55,637

Amount of allowance for loan losses allocated
TDR - allowance based on collateral	$	1,058	$	542
TDR - allowance based on present value cash flow		3,755		4,641
Non - TDR - allowance based on collateral		768		972
Total amount of allowance for loan losses allocated	$	5,581	$	6,155

Impaired loans by class as of December 31 are as follows:

	2020						2019
	Recorded Investment		Unpaid Principal Balance		Related Allowance for Loan Losses		Recorded Investment		Unpaid Principal Balance		Related Allowance for Loan Losses
	(In thousands)
With no related allowance for loan losses recorded:
Commercial
Commercial and industrial	$	77	$	80	$	-	$	257	$	257	$	-
Commercial real estate		-		-		-		796		796		-
Mortgage
1-4 family owner occupied - jumbo		623		629		-		-		-		-
1-4 family owner occupied - non-jumbo		-		-		-		212		217		-
1-4 family non-owner occupied		305		473		-		214		366		-
1-4 family - 2nd lien		301		304		-		407		438		-
Resort lending		154		379		-		-		-		-
Installment
Boat lending		-		-		-		-		-		-
Recreational vehicle lending		-		-		-		-		-		-
Other		-		-		-		1		41		-
		1,460		1,865		-		1,887		2,115		-

	2020			2019
	Recorded Investment	Unpaid Principal Balance	Related Allowance for Loan Losses	Recorded Investment	Unpaid Principal Balance	Related Allowance for Loan Losses
	(In thousands)
With an allowance for loan losses recorded:
Commercial
Commercial and industrial	2,227	2,370	756	1,655	1,706	453
Commercial real estate	7,127	7,096	510	6,685	6,661	578
Mortgage
1-4 family owner occupied - jumbo	506	880	50	1,447	1,445	91
1-4 family owner occupied - non-jumbo	21,655	22,311	2,300	10,163	10,695	1,031
1-4 family non-owner occupied	4,335	4,704	495	4,962	5,542	572
1-4 family - 2nd lien	811	829	200	14,059	15,243	1,695
Resort lending	10,555	10,764	1,079	12,110	12,263	1,474
Installment
Boat lending	7	11	2	-	-	-
Recreational vehicle lending	87	100	19	-	-	-
Other	1,902	2,040	170	2,924	3,153	261
	49,212	51,105	5,581	54,005	56,708	6,155
Total
Commercial
Commercial and industrial	2,304	2,450	756	1,912	1,963	453
Commercial real estate	7,127	7,096	510	7,481	7,457	578
Mortgage
1-4 family owner occupied - jumbo	1,129	1,509	50	1,447	1,445	91
1-4 family owner occupied - non-jumbo	21,655	22,311	2,300	10,375	10,912	1,031
1-4 family non-owner occupied	4,640	5,177	495	5,176	5,908	572
1-4 family - 2nd lien	1,112	1,133	200	14,466	15,681	1,695
Resort lending	10,709	11,143	1,079	12,110	12,263	1,474
Installment
Boat lending	7	11	2	-	-	-
Recreational vehicle lending	87	100	19	-	-	-
Other	1,902	2,040	170	2,925	3,194	261
Total	$50,672	$52,970	$5,581	$55,892	$58,823	$6,155

Accrued interest included in recorded investment	$359			$255

Average Recorded Investment in and Interest Income Earned on Impaired Loans by Class

	2020				2019				2018
	Average Recorded Investment		Interest Income Recognized		Average Recorded Investment		Interest Income Recognized		Average Recorded Investment		Interest Income Recognized
	(In thousands)
With no related allowance for loan losses recorded:
Commercial
Commercial and industrial	$	125	$	9	$	51	$	-	$	378	$	20
Commercial real estate		159		-		278		5		961		-
Mortgage
1-4 family owner occupied - jumbo		408		-		-		-		41		-
1-4 family owner occupied - non-jumbo		252		4		201		-		15		27
1-4 family non-owner occupied		308		10		123		-		-		-
1-4 family - 2nd lien		380		-		136		7		-		-
Resort lending		92		-		-		-		-		-
Installment
Boat lending		-		-		-		-		-		-
Recreational vehicle lending		-		-		-		-		-		-
Other		-		-		-		1		1		11
		1,724		23		789		13		1,396		58
With an allowance for loan losses recorded:
Commercial
Commercial and industrial		2,230		242		2,256		72		2,641		127
Commercial real estate		10,751		1,043		5,778		315		5,199		288
Mortgage
1-4 family owner occupied - jumbo		1,083		84		995		39		1,335		69
1-4 family owner occupied - non-jumbo		19,624		2,033		15,183		594		28,183		1,408
1-4 family non-owner occupied		4,664		375		2,874		291		5,475		314
1-4 family - 2nd lien		3,376		22		13,383		809		284		12
Resort lending		11,316		799		11,697		669		14,687		606
Installment
Boat lending		59		1		54		-		1		-
Recreational vehicle lending		81		4		22		-		84		4
Other		2,416		225		3,186		189		3,640		224
		55,600		4,828		55,428		2,978		61,529		3,052
Total
Commercial
Commercial and industrial		2,355		251		2,307		72		3,019		147
Commercial real estate		10,910		1,043		6,056		320		6,160		288
Mortgage
1-4 family owner occupied - jumbo		1,491		84		995		39		1,376		69
1-4 family owner occupied - non-jumbo		19,876		2,037		15,384		594		28,198		1,435
1-4 family non-owner occupied		4,972		385		2,997		291		5,475		314
1-4 family - 2nd lien		3,756		22		13,519		816		284		12
Resort lending		11,408		799		11,697		669		14,687		606
Installment
Boat lending		59		1		54		-		1		-
Recreational vehicle lending		81		4		22		-		84		4
Other		2,416		225		3,186		190		3,641		235
Total	$	57,324	$	4,851	$	56,217	$	2,991	$	62,925	$	3,110

Troubled Debt Restructurings

Troubled debt restructurings at December 31 follow:

	2020
	Commercial		Retail (1)			Total
	(In thousands)
Performing TDR’s	$	7,956	$	36,385		$	44,341
Non-performing TDR’s (2)		1,148		1,584	⁽³⁾		2,732
Total	$	9,104	$	37,969		$	47,073

	2019
	Commercial		Retail (1)			Total
	(In thousands)
Performing TDR’s	$	7,974	$	39,601		$	47,575
Non-performing TDR’s (2)		540		2,607	⁽³⁾		3,147
Total	$	8,514	$	42,208		$	50,722

(1)	Retail loans include mortgage and installment loan portfolio segments.

(2)	Included in non-performing loans table above.

(3)	Also includes loans on non-accrual at the time of modification until six payments are received on a timely basis.

Troubled Debt Restructuring During the Period

Loans that have been classified as troubled debt restructurings during the years ended December 31 follow:

	Number of Contracts		Pre-modification Recorded Balance		Post-modification Recorded Balance
	(Dollars in thousands)
2020
Commercial
Commercial and industrial		7	$	1,207	$	1,207
Commercial real estate		4		7,012		7,012
Mortgage
1-4 family owner occupied - jumbo		-		-		-
1-4 family owner occupied - non-jumbo		5		357		374
1-4 family non-owner occupied		2		111		116
1-4 family - 2nd lien		2		44		46
Resort lending		-		-		-
Installment
Boat lending		-		-		-
Recreational vehicle lending		-		-		-
Other		4		91		93
Total		24	$	8,822	$	8,848

	Number of Contracts	Pre-modification Recorded Balance	Post-modification Recorded Balance
	(Dollars in thousands)

2019
Commercial
Commercial and industrial	8	$1,609	$1,609
Commercial real estate	3	1,479	1,479
Mortgage
1-4 family owner occupied - jumbo	-	-	-
1-4 family owner occupied - non-jumbo	2	478	483
1-4 family non-owner occupied	1	507	505
1-4 family - 2nd lien	3	75	75
Resort lending	-	-	-
Installment
Boat lending	-	-	-
Recreational vehicle lending	-	-	-
Other	7	188	191
Total	24	$4,336	$4,342
2018
Commercial
Commercial and industrial	7	$652	$652
Commercial real estate	2	204	204
Mortgage
1-4 family owner occupied - jumbo	1	419	419
1-4 family owner occupied - non-jumbo	9	991	994
1-4 family non-owner occupied	-	-	-
1-4 family - 2nd lien	-	-	-
Resort lending	1	115	114
Installment
Boat lending	-	-	-
Recreational vehicle lending	-	-	-
Other	14	708	709
Total	34	$3,089	$3,092

Troubled Debt Restructuring During the Past Twelve Months that Subsequently Defaulted

Loans that have been classified as troubled debt restructured during the past twelve months and that have subsequently defaulted during the years ended December 31 follows:

	Number of Contracts		Recorded Balance
2020	(Dollars in thousands)
Commercial
Commercial and industrial		-	$	-
Commercial real estate		-		-
Mortgage
1-4 family owner occupied - jumbo		-		-
1-4 family owner occupied - non-jumbo		-		-
1-4 family non-owner occupied		-		-
1-4 family - 2nd lien		-		-
Resort lending		-		-
Installment
Boat lending		-		-
Recreational vehicle lending		-		-
Other		-		-
Total		-	$	-

2019
Commercial
Commercial and industrial		1	$	19
Commercial real estate		-		-
Mortgage
1-4 family owner occupied - jumbo		-		-
1-4 family owner occupied - non-jumbo		1		12
1-4 family non-owner occupied		-		-
1-4 family - 2nd lien		-		-
Resort lending		-		-
Installment
Boat lending		-		-
Recreational vehicle lending		-		-
Other		-		-
Total		2	$	31

2018
Commercial
Commercial and industrial		-	$	-
Commercial real estate		-		-
Mortgage
1-4 family owner occupied - jumbo		-		-
1-4 family owner occupied - non-jumbo		-		-
1-4 family non-owner occupied		-		-
1-4 family - 2nd lien		-		-
Resort lending		-		-
Installment
Boat lending		-		-
Recreational vehicle lending		-		-
Other		1		13
Total		1	$	13

Commercial and Retail Loan COVID-19 Accomodations

A summary of remaining accommodations that had been entered into under this guidance as of December 31, 2020 follows:

Commercial and Retail Loan COVID-19 Accomodations

	Covid-19 Accomodations					Total		% of Total
Loan Category		Loans (#)		Loans ($)		Loans		Loans
	(Dollars in thousands)
Commercial			2	$	163	$	1,242,415		0.0	%
Mortgage			134		19,830		1,015,926		2.0	%
Installment			48		1,412		475,337		0.3	%
Total			184	$	21,405	$	2,733,678		0.8	%
Mortgage loans serviced for others(1)			288	$	42,897	$	2,984,088		1.4	%

1)	We have delegated authority from all investors to grant these deferrals on their behalf.

Information on subsequent accommodation extensions for portfolio loans follows:

Commercial and Retail Loan COVID-19 Subsequent Accomodations (1)

Loan Category	Loans (#)		Loans ($)
	(Dollars in thousands)
Commercial		2	$	163
Mortgage		100		15,004
Installment		35		1,045
Total		137	$	16,212

(1)	Subsequent accommodations are extensions of the original accommodations that were given as summarized in the paragraph above.

Loan Ratings by Loan Class

The following table summarizes loan ratings by loan class for our commercial loan portfolio segment at December 31:

	Commercial
	Non-watch 1-6		Watch 7-8		Substandard Accrual 9		Non- Accrual 10-11		Total
					(In thousands)
2020
Commercial and industrial	$	637,826	$	32,765	$	4,341	$	1,387	$	676,319
Commercial real estate		561,382		5,978		2,272		-		569,632
Total	$	1,199,208	$	38,743	$	6,613	$	1,387	$	1,245,951
Accrued interest included in total	$	3,408	$	105	$	23	$	-	$	3,536

2019
Commercial and industrial	$	515,955	$	44,384	$	3,967	$	565	$	564,871
Commercial real estate		580,516		23,036		535		735		604,822
Total	$	1,096,471	$	67,420	$	4,502	$	1,300	$	1,169,693
Accrued interest included in total	$	2,763	$	205	$	30	$	-	$	2,998

	Mortgage (1)
	1-4 Family Owner Occupied - Jumbo		1-4 Family Owner Occupied - Non-jumbo		1-4 Family Non-owner Occupied		1-4 Family 2nd Lien		Resort Lending		Total
	(In thousands)
2020
800 and above	$	61,077	$	40,187	$	25,468	$	12,490	$	9,546	$	148,768
_750-799		223,177		70,642		82,124		42,138		27,530		445,611
_700-749		101,086		75,489		30,326		22,962		11,726		241,589
_650-699		40,296		44,344		13,182		11,269		6,393		115,484
_600-649		11,146		18,519		4,303		2,703		1,670		38,341
_550-599		-		11,021		2,388		1,608		917		15,934
_500-549		3,396		5,129		1,580		1,012		192		11,309
Under 500		-		2,242		405		348		73		3,068
Unknown		-		-		-		-		-		-
Total	$	440,178	$	267,573	$	159,776	$	94,530	$	58,047	$	1,020,104
Accrued interest included in total	$	1,301	$	1,641	$	587	$	373	$	276	$	4,178

	Mortgage (1)
	1-4 Family Owner Occupied - Jumbo	1-4 Family Owner Occupied - Non-jumbo	1-4 Family Non-owner Occupied	1-4 Family 2nd Lien	Resort Lending	Total
	(In thousands)
2019
800 and above	$48,486	$43,848	$24,315	$13,905	$11,076	$141,630
_750-799	198,491	111,521	84,656	50,012	29,364	474,044
_700-749	106,609	95,064	34,839	30,697	14,626	281,835
_650-699	31,553	51,174	13,995	14,267	8,063	119,052
_600-649	13,230	21,938	5,897	4,097	2,074	47,236
_550-599	514	12,308	1,863	1,703	673	17,061
_500-549	1,519	7,940	1,870	1,281	889	13,499
Under 500	641	2,208	533	511	79	3,972
Unknown	510	1,259	1,569	69	1,330	4,737
Total	$401,553	$347,260	$169,537	$116,542	$68,174	$1,103,066
Accrued interest included in total	$1,139	$1,662	$586	$502	$266	$4,155

(1)	Credit scores have been updated within the last twelve months.

	Installment (1)
	Boat Lending		Recreational Vehicle Lending		Other		Total
	(In thousands)
2020
800 and above	$	32,231	$	29,223	$	9,154	$	70,608
_750-799		123,689		95,890		37,512		257,091
_700-749		38,223		33,476		25,262		96,961
_650-699		10,189		8,794		21,138		40,121
_600-649		2,083		1,305		3,730		7,118
_550-599		661		551		1,299		2,511
_500-549		342		283		767		1,392
Under 500		95		52		63		210
Unknown		-		-		510		510
Total	$	207,513	$	169,574	$	99,435	$	476,522
Accrued interest included in total	$	572	$	457	$	156	$	1,185

2019
800 and above	$	28,041	$	24,470	$	7,611	$	60,122
_750-799		118,380		88,164		37,583		244,127
_700-749		41,490		31,055		27,204		99,749
_650-699		11,485		7,267		22,517		41,269
_600-649		2,254		1,411		4,470		8,135
_550-599		946		592		1,884		3,422
_500-549		377		464		1,127		1,968
Under 500		309		22		284		615
Unknown		-		-		1,204		1,204
Total	$	203,282	$	153,445	$	103,884	$	460,611
Accrued interest included in total	$	490	$	378	$	326	$	1,194

(1)	Credit scores have been updated within the last twelve months.

Other Mortgage Loans Service's Principal Balances

Mortgage loans serviced for others are not reported as assets on the Consolidated Statements of Financial Condition. The principal balances of these loans at December 31 follow:

	2020		2019
	(In thousands)
Mortgage loans serviced for :
Fannie Mae	$	1,656,060	$	1,449,935
Freddie Mac		1,095,877		852,123
Ginnie Mae		181,615		180,941
FHLB		39,294		69,149
Other		11,242		29,018
Total	$	2,984,088	$	2,581,166

Analysis of Capitalized Mortgage Loan Servicing Rights

An analysis of capitalized mortgage loan servicing rights for the years ended December 31 follows:

	2020			2019			2018
	(In thousands)
Balance at beginning of period	$	19,171		$	21,400		$	15,699
Originated servicing rights capitalized		13,957			7,303			4,977
Servicing rights acquired		-			-			3,047
Change in fair value due to price		(10,833	)		(6,408	)		191
Change in fair value due to pay downs		(5,391	)		(3,124	)		(2,514	)
Balance at end of year	$	16,904		$	19,171		$	21,400
Loans sold and serviced that have had servicing rights capitalized	$	2,982,833		$	2,580,705		$	2,333,081

Purchase Credit Impaired (PCI) Loans

	December 31,
	2020		2019
	(In thousands)
Commercial	$	468	$	1,394
Mortgage		410		575
Installment		147		316
Total carrying amount		1,025		2,285
Allowance for loan losses		-		-
Carrying amount, net of allowance for loan losses	$	1,025	$	2,285

	Year ended December 31,
	2020			2019
	(In thousands)

Balance at beginning of period	$	640		$	462
New loans purchased		-			-
Accretion of income		(280	)		(187	)
Reclassification from (to) nonaccretable difference		-			365
Displosals/other adjustments		-			-
Balance at end of period	$	360		$	640

OTHER REAL ESTATE (Tables)

12 Months Ended

Dec. 31, 2020

OTHER REAL ESTATE [Abstract]

Summary of Other Real Estate Activity

A summary of other real estate activity for the years ended December 31 follows⁽¹⁾:

	2020			2019			2018
	(In thousands)
Balance at beginning of year, net of valuation allowance	$	1,715		$	1,178		$	1,628
Loans transferred to other real estate		332			2,242			1,510
Sales of other real estate		(1,161	)		(1,438	)		(1,822	)
Additions to valuation allowance charged to expense		(148	)		(267	)		(138	)
Balance at end of year, net of valuation allowance	$	738		$	1,715		$	1,178

(1)	Table excludes other repossessed assets totaling $0.03 million and $0.15 million at December 31, 2020 and 2019, respectively.

Valuation Allowance for Other Real Estate Owned

	2020			2019			2018
	(In thousands)
Balance at beginning of year	$	92		$	144		$	123
Additions charged to expense		148			267			138
Direct write-downs upon sale		(150	)		(319	)		(117	)
Balance at end of year	$	90		$	92		$	144

PROPERTY AND EQUIPMENT (Tables)

12 Months Ended

Dec. 31, 2020

PROPERTY AND EQUIPMENT [Abstract]

Summary of Property and Equipment

A summary of property and equipment at December 31 follows:

	2020			2019
	(In thousands)
Land and land improvements	$	17,083		$	17,478
Buildings		57,208			57,363
Equipment		72,542			71,194
		146,833			146,035
Accumulated depreciation and amortization		(110,706	)		(107,624	)
Property and equipment, net	$	36,127		$	38,411

GOODWILL AND OTHER INTANGIBLES (Tables)

12 Months Ended

Dec. 31, 2020

GOODWILL AND OTHER INTANGIBLES [Abstract]

Other Intangible Assets, Net of Amortization

Intangible assets, net of amortization, at December 31 follows:

	2020				2019
	Gross Carrying Amount		Accumulated Amortization		Gross Carrying Amount		Accumulated Amortization
	(In thousands)

Amortized intangible assets - core deposits	$	11,916	$	7,610	$	11,916	$	6,590
Unamortized intangible assets - goodwill	$	28,300			$	28,300

Estimated Core Deposit Intangible Amortization

A summary of estimated core deposit intangible amortization at December 31, 2020, follows:

	(In thousands)

2021	$	970
2022		785
2023		547
2024		516
2025		487
2026 and thereafter		1,001
Total	$	4,306

DEPOSITS (Tables)

12 Months Ended

Dec. 31, 2020

DEPOSITS [Abstract]

Summary of Interest Expense on Deposits

A summary of interest expense on deposits for the years ended December 31 follows:

	2020		2019		2018
	(In thousands)
Savings and interest-bearing checking	$	2,264	$	5,371	$	4,146
Reciprocal		2,158		6,024		1,292
Time		7,073		7,148		5,343
Brokered time		1,171		4,882		3,697
Total	$	12,666	$	23,425	$	14,478

Summary of Maturity of Time Deposits

A summary of the maturity of time deposits at December 31, 2020, follows:

	(In thousands)
2021	$	370,497
2022		40,671
2023		16,717
2024		5,072
2025		5,457
2026 and thereafter		603
Total	$	439,017

Summary of Reciprocal Deposits

A summary of reciprocal deposits at December 31 follows:

	2020		2019
	(In thousands)
Demand	$	515,092	$	383,953
Money market		3,308		4,416
Time		37,785		42,658
Total	$	556,185	$	431,027

OTHER BORROWINGS (Tables)

12 Months Ended

Dec. 31, 2020

OTHER BORROWINGS [Abstract]

Other Borrowings

A summary of other borrowings at December 31 follows:

	2020		2019
	(In thousands)
Advances from the FHLB	$	30,000	$	63,640
Federal funds purchased		-		25,000
Other		12		6
Total	$	30,012	$	88,646

FHLB Advances

The maturity dates, weighted average interest rates and contractually required repayments of FHLB advances at December 31 follow:

	2020					2019
	Amount		Rate			Amount		Rate
	(Dollars in thousands)
Fixed-rate advances
2020						$	28,645		2.19	%
2022	$	-		-	%		4,995		1.69
2026 and thereafter		30,000		0.74			30,000		0.74
Total advances	$	30,000		0.74	%	$	63,640		1.47	%

SUBORDINATED DEBT AND DEBENTURES [Abstract]

Tabular disclosure of long-debt instruments or arrangements, including identification, terms, features, collateral requirements and other information necessary to a fair presentation. These are debt arrangements that originally required repayment more than twelve months after issuance or greater than the normal operating cycle of the entity, if longer.

+ References

Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 210
-SubTopic 10
-Section S99
-Paragraph 1
-Subparagraph (SX 210.5-02.22)
-URI http://asc.fasb.org/extlink&oid=120391452&loc=d3e13212-122682

Reference 2: http://fasb.org/us-gaap/role/ref/legacyRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 835
-SubTopic 30
-Section 45
-Paragraph 1A
-URI http://asc.fasb.org/extlink&oid=119993939&loc=d3e28541-108399

Reference 3: http://fasb.org/us-gaap/role/ref/legacyRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 505
-SubTopic 10
-Section 50
-Paragraph 6
-URI http://asc.fasb.org/extlink&oid=109259400&loc=d3e21506-112644

Reference 4: http://fasb.org/us-gaap/role/ref/legacyRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 235
-SubTopic 10
-Section S99
-Paragraph 1
-Subparagraph (SX 210.4-08.(e),(f))
-URI http://asc.fasb.org/extlink&oid=120395691&loc=d3e23780-122690

Reference 5: http://fasb.org/us-gaap/role/ref/legacyRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 835
-SubTopic 30
-Section 45
-Paragraph 2
-URI http://asc.fasb.org/extlink&oid=119993939&loc=d3e28551-108399

Reference 6: http://fasb.org/us-gaap/role/ref/legacyRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 505
-SubTopic 10
-Section 50
-Paragraph 7
-URI http://asc.fasb.org/extlink&oid=109259400&loc=d3e21521-112644

Reference 7: http://fasb.org/us-gaap/role/ref/legacyRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 505
-SubTopic 10
-Section 50
-Paragraph 8
-URI http://asc.fasb.org/extlink&oid=109259400&loc=d3e21538-112644

Reference 8: http://fasb.org/us-gaap/role/ref/legacyRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 942
-SubTopic 470
-Section 50
-Paragraph 3
-URI http://asc.fasb.org/extlink&oid=75038535&loc=d3e64711-112823

Reference 9: http://fasb.org/us-gaap/role/ref/legacyRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 835
-SubTopic 30
-Section 55
-Paragraph 8
-URI http://asc.fasb.org/extlink&oid=114775985&loc=d3e28878-108400

Reference 10: http://fasb.org/us-gaap/role/ref/legacyRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 505
-SubTopic 10
-Section 50
-Paragraph 3
-URI http://asc.fasb.org/extlink&oid=109259400&loc=d3e21475-112644

+ Details

SUBORDINATED DEBT AND DEBENTURES (Tables)

12 Months Ended

Dec. 31, 2020

Information Regarding Subordinated Debentures

Summary information regarding subordinated debentures as of December 31 follows:

		2020
Entity Name	Issue Date
Entity Name	Issue Date	Subordinated Debentures			Trust Preferred Securities Issued			Common Stock Issued
		(In thousands)
IBC Capital Finance III	May 2007	$	12,372		$	12,000		$	372
IBC Capital Finance IV	September 2007		15,465			15,000			465
Midwest Guaranty Trust I	November 2002		7,732			7,500			232
TCSB Statutory Trust I	March 2005		5,155			5,000			155
Discount on TCSB Statutory Trust I			(1,200	)		(1,200	)		-
		$	39,524		$	38,300		$	1,224

		2019
Entity Name	Issue Date
Entity Name	Issue Date	Subordinated Debentures			Trust Preferred Securities Issued			Common Stock Issued
		(In thousands)
IBC Capital Finance III	May 2007	$	12,372		$	12,000		$	372
IBC Capital Finance IV	September 2007		15,465			15,000			465
Midwest Guaranty Trust I	November 2002		7,732			7,500			232
TCSB Statutory Trust I	March 2005		5,155			5,000			155
Discount on TCSB Statutory Trust I			(1,268	)		(1,268	)		-
		$	39,456		$	38,232		$	1,224

Subordinated Debentures and Trust Preferred Securities

Other key terms for the subordinated debentures and trust preferred securities that were outstanding at December 31, 2020 and 2019 follow:

Entity Name	Maturity Date	Interest Rate	First Permitted Redemption Date

IBC Capital Finance III	July 30, 2037	3 month LIBOR plus 1.60%	July 30, 2012
IBC Capital Finance IV	September 15, 2037	3 month LIBOR plus 2.85%	September 15, 2012
Midwest Guaranty Trust I	November 7, 2032	3 month LIBOR plus 3.45%	November 7, 2007
TCSB Statutory Trust I	March 17, 2035	3 month LIBOR plus 2.20%	March 17, 2010

COMMITMENTS AND CONTINGENT LIABILITIES (Tables)

12 Months Ended

Dec. 31, 2020

COMMITMENTS AND CONTINGENT LIABILITIES [Abstract]

Financial Instruments with Off-balance Sheet Risk

A summary of financial instruments with off-balance sheet risk at December 31 follows:

	2020		2019
	(In thousands)
Financial instruments whose risk is represented by contract amounts
Commitments to extend credit	$	644,815	$	582,457
Standby letters of credit		9,361		7,207

SHAREHOLDERS' EQUITY AND INCOME PER COMMON SHARE (Tables)

12 Months Ended

Dec. 31, 2020

SHAREHOLDERS' EQUITY AND INCOME PER COMMON SHARE [Abstract]

Reconciliation of Basic and Diluted Net Income Per Share

A reconciliation of basic and diluted net income per common share for the years ended December 31 follows:

	2020		2019		2018
	(In thousands, except per share amounts)

Net income	$	56,152	$	46,435	$	39,839

Weighted average shares outstanding (1)		21,977		22,894		23,412
Stock units for deferred compensation plan for non-employee directors		121		132		128
Effect of stock options		90		115		176
Performance share units		33		42		53
Weighted average shares outstanding for calculation of diluted earnings per share		22,221		23,183		23,769

Net income per common share
Basic (1)	$	2.56	$	2.03	$	1.70
Diluted	$	2.53	$	2.00	$	1.68

(1)	Basic net income per common share includes weighted average common shares outstanding during the period and participating share awards.

INCOME TAX (Tables)

12 Months Ended

Dec. 31, 2020

INCOME TAX [Abstract]

Composition of Income Tax Expense

The composition of income tax expense for the years ended December 31 follows:

	2020			2019		2018
	(In thousands)
Current expense	$	15,459		$	10,237	$	-
Deferred expense (benefit)		(2,130	)		1,088		9,294
Income tax expense	$	13,329		$	11,325	$	9,294

Reconciliation of Income Tax Expense Computed by Applying the Statutory Federal Income Tax Rate

	2020			2019			2018
	(In thousands)
Statutory rate applied to income before income tax	$	14,591		$	12,130		$	10,318
Tax-exempt income		(690	)		(375	)		(383	)
Unrecognized tax benefit		(206	)		(134	)		(162	)
Share-based compensation		(204	)		(204	)		(367	)
Bank owned life insurance		(196	)		(233	)		(229	)
Non-deductible meals, entertainment and memberships		57			86			85
Other, net		(23	)		55			32
Income tax expense	$	13,329		$	11,325		$	9,294

Deferred Tax Assets and Deferred Tax Liabilities

The tax effects of temporary differences that give rise to significant portions of the deferred tax assets and deferred tax liabilities at December 31 follow:

	2020		2019
	(In thousands)
Deferred tax assets
Allowance for loan losses	$	7,363	$	5,355
Lease liabilities		1,652		1,744
Property and equipment		1,047		1,528
Share-based compensation		742		808
Reserve for unfunded lending commitments		379		324
Deferred compensation		321		285
Loss reimbursement on sold loans reserve		214		185
Non accrual loan interest income		203		173
Other than temporary impairment charge on securities available for sale		144		147
Vehicle service contract counterparty contingency reserve		26		38
Unrealized loss on derivative financial instruments		-		459
Gross deferred tax assets		12,091		11,046
Deferred tax liabilities
Capitalized mortgage loan servicing rights		3,550		4,026
Deferred loan fees		1,901		1,852
Lease right of use asset		1,606		1,739
Unrealized gain on securities available for sale		4,206		994
Purchase premiums, net		509		293
Federal Home Loan Bank stock		27		27
Other		17		43
Gross deferred tax liabilities		11,816		8,974
Deferred tax assets, net	$	275	$	2,072

Changes in Unrecognized Tax Benefits

Changes in unrecognized tax benefits for the years ended December 31 follow:

	2020			2019			2018
	(In thousands)

Balance at beginning of year	$	438		$	588		$	724
Additions based on tax positions related to the current year		15			20			26
Reductions due to the statute of limitations		(273	)		(170	)		(162	)
Reductions due to settlements		-			-			-
Balance at end of year	$	180		$	438		$	588

SHARE BASED COMPENSATION AND BENEFIT PLANS (Tables)

12 Months Ended

Dec. 31, 2020

SHARE BASED COMPENSATION AND BENEFIT PLANS [Abstract]

Outstanding Stock Option Grants and Transactions

A summary of outstanding stock option grants and related transactions follows:

	Number of Shares			Average Exercise Price		Weighted- Average Remaining Contractual Term (Years)		Aggregated Intrinsic Value
								(In thousands)
Outstanding at January 1,2020		138,506		$	4.62
Granted		-
Exercised		(17,317	)		3.27
Forfeited		-
Expired		-
Outstanding at December 31, 2020		121,189		$	4.81		2.1	$	1,658

Vested and expected to vest at December 31, 2020		121,189		$	4.81		2.1	$	1,658
Exercisable at December 31, 2020		121,189		$	4.81		2.1	$	1,658

Non-Vested Restricted Stock, Restricted Stock Units and PSU's

A summary of outstanding non-vested stock and related transactions follows:

	Number of Shares			Weighted- Average Grant Date Fair Value
Outstanding at January 1, 2020		245,726		$	21.72
Granted		76,893			22.46
Vested		(94,342	)		19.96
Forfeited		(21,160	)		22.63
Outstanding at December 31, 2020		207,117		$	22.70

Information Regarding Options Exercised

Certain information regarding options exercised during the periods ending December 31 follows:

	2020		2019		2018
	(In thousands)
Intrinsic value	$	293	$	897	$	2,333
Cash proceeds received	$	57	$	706	$	1,420
Tax benefit realized	$	61	$	188	$	490

OTHER NON-INTEREST INCOME (Tables)

12 Months Ended

Dec. 31, 2020

OTHER NON-INTEREST INCOME [Abstract]

Other Non-interest Income

Other non-interest income for the years ended December 31 follows:

	2020		2019		2018
	(In thousands)

Investment and insurance commissions	$	1,971	$	1,658	$	1,971
ATM fees		1,197		1,403		1,457
Bank owned life insurance		910		1,111		970
Other		3,443		5,110		4,362
Total other non-interest income	$	7,521	$	9,282	$	8,760

DERIVATIVE FINANCIAL INSTRUMENTS (Tables)

12 Months Ended

Dec. 31, 2020

DERIVATIVE FINANCIAL INSTRUMENTS [Abstract]

Derivative Financial Instruments According to Type of Hedge Designation

Our derivative financial instruments according to the type of hedge in which they are designated at December 31 follow:

	2020
	Notional Amount		Average Maturity (years)		Fair Value
	(Dollars in thousands)
Fair value hedge designation
Pay-fixed interest rate swap agreements - commercial	$	7,088		8.4	$	(776	)
Pay-fixed interest rate swap agreements - securities available for sale		41,950		7.1		15
Total	$	49,038		7.3	$	(761	)

No hedge designation
Rate-lock mortgage loan commitments	$	168,816		0.1	$	7,020
Mandatory commitments to sell mortgage loans		186,092		0.1		(941	)
Pay-fixed interest rate swap agreements - commercial		147,456		4.5		(9,700	)
Pay-variable interest rate swap agreements - commercial		147,456		4.5		9,700
Pay-fixed interest rate swap agreements		25,000		0.6		(295	)
Interest rate cap agreements		135,000		1.8		5
Purchased options		2,908		0.5		42
Written options		2,848		0.5		(42	)
Total	$	815,576		2.0	$	5,789

	2019
	Notional Amount		Average Maturity (years)		Fair Value
	(Dollars in thousands)
Fair value hedge designation - Pay-fixed interest rate swap agreements	$	7,117		9.4	$	(242	)

Cash flow hedge designation
Pay-fixed interest rate swap agreements	$	25,000		1.6	$	(174	)
Interest rate cap agreements		150,000		2.6		214
Total	$	175,000		2.5	$	40

No hedge designation
Rate-lock mortgage loan commitments	$	49,268		0.1	$	1,412
Mandatory commitments to sell mortgage loans		95,363		0.1		(150	)
Pay-fixed interest rate swap agreements - commercial		153,946		5.5		(3,641	)
Pay-variable interest rate swap agreements - commercial		153,946		5.5		3,641
Purchased options		2,908		1.5		141
Written options		2,848		1.5		(139	)
Total	$	458,279		3.7	$	1,264

Fair Value of Derivative Instruments

Fair Values of Derivative Instruments

	Asset Derivatives								Liability Derivatives
	December 31,								December 31,
	2020				2019				2020				2019
	Balance Sheet Location		Fair Value		Balance Sheet Location		Fair Value		Balance Sheet Location		Fair Value		Balance Sheet Location		Fair Value
	(In thousands)
Derivatives designated as hedging instruments		-				-				-				-
Pay-fixed interest rate swap agreements	Other assets		$	15	Other assets		$	-	Other liabilities		$	776	Other liabilities		$	416
Interest rate cap agreements	Other assets			-	Other assets			214	Other liabilities			-	Other liabilities			-
				15				214				776				416
Derivatives not designated as hedging instruments
Rate-lock mortgage loan commitments	Other assets			7,020	Other assets			1,412	Other liabilities		$	-	Other liabilities			-
Mandatory commitments to sell mortgage loans	Other assets			-	Other assets			-	Other liabilities			941	Other liabilities			150
Pay-fixed interest rate swap agreements - commercial	Other assets			-	Other assets			28	Other liabilities			9,700	Other liabilities			3,669
Pay-variable interest rate swap agreements - commercial	Other assets			9,700	Other assets			3,669	Other liabilities			-	Other liabilities			28
Pay-fixed interest rate swap agreements	Other assets			-	Other assets			-	Other liabilities			295	Other liabilities			-
Interest rate cap agreements	Other assets			5	Other assets			-	Other liabilities			-	Other liabilities			-
Purchased options	Other assets			42	Other assets			141	Other liabilities			-	Other liabilities			-
Written options	Other assets			-	Other assets			-	Other liabilities			42	Other liabilities			139
				16,767				5,250				10,978				3,986
Total derivatives			$	16,782			$	5,464			$	11,754			$	4,402

Effect of Derivative Financial Instruments on Consolidated Statement of Operations

The effect of derivative financial instruments on the Consolidated Statements of Operations follows:

Year Ended December 31,
	Gain (loss) Recognized in Other Comprehensive Income (Loss) (Effective Portion)									Location Gain (Loss) Reclassified from Accumulated Other Comprehensive Income (Loss) into Income (Effective Portion)	Gain (Loss) Reclassified from Accumulated Other Comprehensive Income (Loss) into Income (Effective Portion)							Location of Gain (Loss) Recognized in Income(1)	Gain (Loss) Recognized in Income(1)
	2020			2019			2018				2020			2019		2018		Location of Gain (Loss) Recognized in Income(1)	2020			2019			2018
	(In thousands)
Fair Value Hedges
Pay-fixed interest rate swap ageement - Commercial loan																		Interest and fees on loans	$	(534	)	$	(242	)	$	-
Pay-fixed interest rate swap agreements - Securities available for sale																		Interest on securities available for sale - tax-exempt		15			-			-
Total																			$	(519	)	$	(242	)	$	-
Cash Flow Hedges
Interest rate cap agreements	$	125		$	(1,211	)	$	(340	)	Interest expense	$	(1,885	)	$	363	$	206	Interest expense	$	-		$	-		$	-
Pay-fixed interest rate swap agreements		(479	)		(392	)		78		Interest expense		(654	)		62		31	Interest expense		-			-			(12	)
Total	$	(354	)	$	(1,603	)	$	(262	)		$	(2,539	)	$	425	$	237		$	-		$	-		$	(12	)

No hedge designation

Rate-lock mortgage loan commitments																		Net gains on mortgage loans	$	5,608		$	725		$	157
Mandatory commitments to sell mortgage loans																		Net gains on mortgage loans		(791	)		233			(420	)
Pay-fixed interest rate swap agreements - commercial																		Interest income		(6,059	)		(4,046	)		113
Pay-variable interest rate swap agreements -commercial																		Interest income		6,059			4,046			(113	)
Pay-fixed interest rate swap agreements																		Interest expense		231			-			-
Interest rate cap agreements																		Interest expense		(57	)		-			-
Purchased options																		Interest expense		(99	)		25			(206	)
Written options																		Interest expense		97			(23	)		206
Total																			$	4,989		$	960		$	(263	)

(1)	For cash flow hedges, this location and amount refers to the ineffective portion.

RELATED PARTY TRANSACTIONS (Tables)

12 Months Ended

Dec. 31, 2020

Summary of Loans to Directors and Executive Officers

A summary of loans to our directors and executive officers (which includes loans to entities in which the individual owns a 10% or more voting interest) for the years ended December 31 follows:

	2020			2019
	(In thousands)

Balance at beginning of year	$	13,077		$	14,205
New loans and advances		417			713
Repayments		(11,078	)		(1,841	)
Balance at end of year	$	2,416		$	13,077

LEASES (Tables)

12 Months Ended

Dec. 31, 2020

LEASES [Abstract]

Components of Operating Leases

The cost components of our operating leases follows:

	2020		2019
	(In thousands)
Operating lease cost	$	1,780	$	2,217
Variable lease cost		69		142
Short-term lease cost		36		19
Total	$	1,885	$	2,378

Supplemental Balance Sheet Information Related to Operating Leases

Supplemental balance sheet information related to our operating leases follows:

	2020			2019
	(In thousands)
Lease right of use asset (1)	$	7,646		$	8,282
Lease liabilities (2)	$	7,868		$	8,304

Weighted average remaining lease term (years)		7.12			7.47
Weighted average discount rate		2.4	%		2.8	%

(1)	Included in Accrued income and other assets in our Consolidated Statements of Financial Condition.

(2)	Included in Accrued expenses and other liabilities in our Consolidated Statements of Financial Condition.

Maturity Analysis of Lease Liabilities

Maturity analysis of our lease liabilities at December 31, 2020 based on required contractual payments follows:

	(In thousands)

2021	$	1,669
2022		1,489
2023		1,222
2024		815
2025		809
2026 and thereafter		2,525
Total lease payments		8,529
Less imputed interest		(661	)
Total	$	7,868

REGULATORY MATTERS (Tables)

12 Months Ended

Dec. 31, 2020

REGULATORY MATTERS [Abstract]

Actual Capital Amounts and Ratios and Components of Regulatory Capital

Our actual capital amounts and ratios at December 31 follow⁽¹⁾:

	Actual					Minimum for Adequately Capitalized Institutions					Minimum for Well-Capitalized Institutions
	Amount		Ratio			Amount		Ratio			Amount		Ratio
	(Dollars in thousands)

2020
Total capital to risk-weighted assets
Consolidated	$	455,072		15.95	%	$	228,214		8.00	%	NA		NA
Independent Bank		401,005		14.06			228,111		8.00		$	285,139		10.00	%

Tier 1 capital to risk-weighted assets
Consolidated	$	379,395		13.30	%	$	171,161		6.00	%	NA		NA
Independent Bank		365,343		12.81			171,083		6.00		$	228,111		8.00	%

Common equity tier 1 capital to risk-weighted assets
Consolidated	$	341,095		11.96	%	$	128,370		4.50	%	NA		NA
Independent Bank		365,343		12.81			128,312		4.50		$	185,340		6.50	%

Tier 1 capital to average assets
Consolidated	$	379,395		9.15	%	$	165,825		4.00	%	NA		NA
Independent Bank		365,343		8.81			165,828		4.00		$	207,285		5.00	%

2019
Total capital to risk-weighted assets
Consolidated	$	380,454		13.74	%	$	221,562		8.00	%	NA		NA
Independent Bank		358,914		12.96			221,482		8.00		$	276,852		10.00	%

Tier 1 capital to risk-weighted assets
Consolidated	$	352,764		12.74	%	$	166,171		6.00	%	NA		NA
Independent Bank		331,224		11.96			166,111		6.00		$	221,482		8.00	%

Common equity tier 1 capital to risk-weighted assets
Consolidated	$	314,532		11.36	%	$	124,628		4.50	%	NA		NA
Independent Bank		331,224		11.96			124,583		4.50		$	179,954		6.50	%

Tier 1 capital to average assets
Consolidated	$	352,764		10.11	%	$	139,632		4.00	%	NA		NA
Independent Bank		331,224		9.49			139,615		4.00		$	174,519		5.00	%

(1)	These ratios do not reflect a capital conservation buffer of 2.50% at December 31, 2020 and 2019.

NA - Not applicable

The components of our regulatory capital are as follows:

	Consolidated						Independent Bank
	December 31,						December 31,
	2020			2019			2020			2019
	(In thousands)
Total shareholders’ equity	$	389,522		$	350,169		$	413,770		$	366,861
Add (deduct)
Accumulated other comprehensive loss for regulatory purposes		(15,821	)		(2,011	)		(15,821	)		(2,011	)
Goodwill and other intangibles		(32,606	)		(33,626	)		(32,606	)		(33,626	)
Common equity tier 1 capital		341,095			314,532			365,343			331,224
Qualifying trust preferred securities		38,300			38,232			-			-
Tier 1 capital		379,395			352,764			365,343			331,224
Subordinated debt		40,000			-			-			-
Allowance for loan losses and allowance for unfunded lending commitments limited to 1.25% of total risk-weighted assets		35,677			27,690			35,662			27,690
Total risk-based capital	$	455,072		$	380,454		$	401,005		$	358,914

FAIR VALUE DISCLOSURES (Tables)

12 Months Ended

Dec. 31, 2020

FAIR VALUE DISCLOSURES [Abstract]

Assets and Liabilities Measured at Fair Value

Assets and liabilities measured at fair value, including financial assets for which we have elected the fair value option, were as follows:

			Fair Value Measurements Using
	Fair Value Measure- ments		Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Un- observable Inputs (Level 3)
	(In thousands)
December 31, 2020:
Measured at Fair Value on a Recurring Basis
Assets
Securities available for sale
U.S. agency	$	10,748	$	-	$	10,748	$	-
U.S. agency residential mortgage-backed		344,582		-		344,582		-
U.S. agency commercial mortgage-backed		7,195		-		7,195		-
Private label mortgage-backed		42,829		-		42,829		-
Other asset backed		254,181		-		254,181		-
Obligations of states and political subdivisions		324,293		-		324,293		-
Corporate		86,017		-		86,017		-
Trust preferred		1,798		-		1,798		-
Foreign government		516		-		516		-
Loans held for sale, carried at fair value		92,434		-		92,434		-
Capitalized mortgage loan servicing rights		16,904		-		-		16,904
Derivatives (1)		16,782		-		16,782		-
Liabilities
Derivatives (2)		11,754		-		11,754		-

Measured at Fair Value on a Non-recurring Basis:
Assets
Impaired loans (3)
Commercial
Commercial and industrial		1,468		-		-		1,468
Commercial real estate		6,586		-		-		6,586
Mortgage
1-4 family owner occupied - jumbo		-		-		-		-
1-4 family owner occupied - non-jumbo		321		-		-		321
1-4 family non-owner occupied		155		-		-		155
1-4 family - 2nd lien		324		-		-		324
Resort lending		61		-		-		61
Installment
Boat lending		4		-		-		4
Recreational vehicle lending		31		-		-		31
Other		124		-		-		124
Other real estate (4)
1-4 family owner occupied - non-jumbo		102		-		-		102

(1)	Included in accrued income and other assets in the Consolidated Statements of Financial Condition.

(2)	Included in accrued expenses and other liabilities in the Consolidated Statements of Financial Condition.

(3)	Only includes impaired loans with specific loss allocations based on collateral value.

(4)	Only includes other real estate with subsequent write downs to fair value.

			Fair Value Measurements Using
	Fair Value Measure- ments		Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Un- observable Inputs (Level 3)
	(In thousands)
December 31, 2019:
Measured at Fair Value on a Recurring Basis
Assets
Securities available for sale
U.S. agency	$	14,661	$	-	$	14,661	$	-
U.S. agency residential mortgage-backed		227,762		-		227,762		-
U.S. agency commercial mortgage-backed		10,756		-		10,756		-
Private label mortgage-backed		39,693		-		39,693		-
Other asset backed		93,886		-		93,886		-
Obligations of states and political subdivisions		96,102		-		96,102		-
Corporate		33,195		-		33,195		-
Trust preferred		1,843		-		1,843		-
Foreign government		502		-		502		-
Loans held for sale, carried at fair value		69,800		-		69,800		-
Capitalized mortgage loan servicing rights		19,171		-		-		19,171
Derivatives (1)		5,464		-		5,464		-
Liabilities
Derivatives (2)		4,402		-		4,402		-

Measured at Fair Value on a Non-recurring Basis:
Assets
Impaired loans (3)
Commercial
Commercial and industrial		655		-		-		655
Commercial real estate		316		-		-		316
Mortgage
1-4 family owner occupied - jumbo		987		-		-		987
1-4 family owner occupied - non-jumbo		470		-		-		470
1-4 family non-owner occupied		281		-		-		281
1-4 family - 2nd lien		294		-		-		294
Resort lending		245		-		-		245
Installment
Boat lending		67		-		-		67
Recreational vehicle lending		2		-		-		2
Other		121		-		-		121
Other real estate (4)
Mortgage 1-4 family owner occupied - non-jumbo		31		-		-		31
Installment - other		28		-		-		28

(1)	Included in accrued income and other assets in the Consolidated Statements of Financial Condition.

(2)	Included in accrued expenses and other liabilities in the Consolidated Statements of Financial Condition.

(3)	Only includes impaired loans with specific loss allocations based on collateral value.

(4)	Only includes other real estate with subsequent write downs to fair value.

Changes in Fair Value for Financial Assets

Changes in fair values of financial assets for which we have elected the fair value option for the years ended December 31 were as follows:

	Net Gains (Losses) on Assets								Total Change in Fair Values Included
	Securities Available For Sale			Mortgage Loans		Mortgage Loan Servicing, net			in Current Period Earnings
	(In thousands)

2020
Loans held for sale	$	-		$	1,962	$	-		$	1,962
Capitalized mortgage loan servicing rights		-			-		(16,224	)		(16,224	)

2019
Equity securities at fair value	$	167		$	-	$	-		$	167
Loans held for sale		-			637		-			637
Capitalized mortgage loan servicing rights		-			-		(9,532	)		(9,532	)

2018
Trading securities	$	(62	)	$	-	$	-		$	(62	)
Loans held for sale		-			413		-			413
Capitalized mortgage loan servicing rights		-			-		(2,323	)		(2,323	)

Reconciliation for all Assets Measured at Fair Value on a Recurring Basis Using Significant Unobservable Inputs (Level 3)

A reconciliation for all assets and (liabilities) measured at fair value on a recurring basis using significant unobservable inputs (Level 3) for the years ended December 31 follows:

	Capitalized Mortgage Loan Servicing Rights
	2020			2019			2018
	(In thousands)
Beginning balance	$	19,171		$	21,400		$	15,699
Total losses realized and unrealized:
Included in results of operations		(16,224	)		(9,532	)		(2,323	)
Included in other comprehensive income (loss)		-			-			-
Purchases, issuances, settlements, maturities and calls		13,957			7,303			8,024
Transfers in and/or out of Level 3		-			-			-
Ending balance	$	16,904		$	19,171		$	21,400

Amount of total losses for the period included in earnings attributable to the change in unrealized losses relating to assets and liabilities still held at December 31	$	(16,224	)	$	(9,532	)	$	(2,323	)

Quantitative Information About Level 3 Fair Value Measurements Measured on a Recurring Basis and Non-recurring Basis

	Asset Fair Value		Valuation Technique		Unobservable Inputs		Range			Weighted Average
	(In thousands)			-		-		-			-
2020
Capitalized mortgage loan servicing rights	$	16,904	Present value of net		Discount rate		10.00% to 13.00%				10.09	%
			servicing revenue		Cost to service		$	69 to $289		$	79
					Ancillary income		20 to 37				22
					Float rate			0.43	%		0.43	%
					Prepayment rate		7.92% to 64.70%				20.85

2019
Capitalized mortgage loan servicing rights	$	19,171	Present value of net		Discount rate		10.00% to 13.00%				10.14	%
			servicing revenue		Cost to service		$	66 to $316		$	81
					Ancillary income		20 to 37				22
					Float rate			1.73	%		1.73	%
					Prepayment rate		7.01% to 69.34%				14.96

Quantitative information about Level 3 fair value measurements measured on a non-recurring basis follows:

Asset

Fair

Value

Valuation

Technique

Unobservable

Inputs

Range

Weighted

Average

(In thousands)

2020

Impaired loans

Commercial

8,054

Sales comparison

Adjustment for differences

approach

between comparable sales

(40.0)% to 75.0%

3.8

Mortgage and Installment (1)

1,020

Sales comparison

Adjustment for differences

approach

between comparable sales

(73.3) to 104.6

(1.5

)

Other real estate

Mortgage

102

Sales comparison

Adjustment for differences

approach

between comparable sales

(13.1) to 2.4

(3.6

)

2019

Impaired loans

Commercial

971

Sales comparison

Adjustment for differences

approach

between comparable sales

(48.0)% to 19.2%

(5.6

Mortgage and Installment (1)

2,467

Sales comparison

Adjustment for differences

approach

between comparable sales

(25.2) to 49.2

11.5

Other real estate

Mortgage and Installment

Sales comparison

Adjustment for differences

approach

between comparable sales

(11.6) to 5.0

(5.1

)

(1)

Aggregate Fair Value and Aggregate Remaining Contractual Principal Balance for Loans Held for Sale

	Aggregate Fair Value		Difference		Contractual Principal
	(In thousands)
Loans held for sale
2020	$	92,434	$	3,856	$	88,578
2019		69,800		1,894		67,906
2018		44,753		1,257		43,496

Tabular disclosure of financial instruments measured at fair value, including those classified in shareholders' equity measured on a recurring or nonrecurring basis. Disclosures include, but are not limited to, fair value measurements recorded and the reasons for the measurements, level within the fair value hierarchy in which the fair value measurements are categorized and transfers between levels 1 and 2. Nonrecurring fair value measurements are those that are required or permitted in the statement of financial position in particular circumstances.

FAIR VALUES OF FINANCIAL INSTRUMENTS [Abstract]

FAIR VALUES OF FINANCIAL INSTRUMENTS (Tables)

12 Months Ended

Dec. 31, 2020

Estimated Fair Values and Recorded Book Balances

The estimated recorded book balances and fair values at December 31 follow:

					Fair Value Using
	Recorded Book Balance		Fair Value		Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Un- observable Inputs (Level 3)
	(In thousands)
2020
Assets
Cash and due from banks	$	56,006	$	56,006	$	56,006	$	-	$	-
Interest bearing deposits		62,699		62,699		62,699		-		-
Securities available for sale		1,072,159		1,072,159		-		1,072,159		-
Federal Home Loan Bank and Federal Reserve Bank Stock		18,427	NA		NA		NA		NA
Net loans and loans held for sale		2,790,683		2,794,058		-		92,434		2,701,624
Accrued interest receivable		12,315		12,315		3		3,414		8,898
Derivative financial instruments		16,782		16,782		-		16,782		-
Liabilities
Deposits with no stated maturity (1)	$	3,198,338	$	3,198,338	$	3,198,338	$	-	$	-
Deposits with stated maturity (1)		439,017		441,457		-		441,457		-
Other borrowings		30,012		30,844		-		30,844		-
Subordinated debt		39,281		41,417		-		41,417		-
Subordinated debentures		39,524		30,265		-		30,265		-
Accrued interest payable		601		601		59		542		-
Derivative financial instruments		11,754		11,754		-		11,754		-
2019
Assets
Cash and due from banks	$	53,295	$	53,295	$	53,295	$	-	$	-
Interest bearing deposits		12,009		12,009		12,009		-		-
Interest bearing deposits - time		350		350		-		350		-
Securities available for sale		518,400		518,400		-		518,400		-
Federal Home Loan Bank and Federal Reserve Bank Stock		18,359	NA		NA		NA		NA
Net loans and loans held for sale		2,768,675		2,768,817		-		69,800		2,699,017
Accrued interest receivable		10,108		10,108		8		1,752		8,348
Derivative financial instruments		5,464		5,464		-		5,464		-

Liabilities
Deposits with no stated maturity (1)	$	2,427,190	$	2,427,190	$	2,427,190	$	-	$	-
Deposits with stated maturity (1)		609,537		610,235		-		610,235		-
Other borrowings		88,646		88,680		-		88,680		-
Subordinated debentures		39,456		33,149		-		33,149		-
Accrued interest payable		1,296		1,296		97		1,199		-
Derivative financial instruments		4,402		4,402		-		4,402		-

NA – Not applicable

(1)

ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS) (Tables)

12 Months Ended

Dec. 31, 2020

ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS) [Abstract]

Accumulated Other Comprehensive Income (Loss) (AOCIL), Net of Tax

A summary of changes in accumulated other comprehensive income (loss) (‘‘AOCIL’’), net of tax during the years ended December 31 follows:

	Unrealized Gains (Losses) on Securities Available for Sale			Dispropor- tionate Tax Effects from Securities Available for Sale			Unrealized Gains (Losses) on Cash Flow Hedges			Total
	(In thousands)
2020
Balances at beginning of period	$	3,739		$	(5,798	)	$	(1,727	)	$	(3,786	)
Other comprehensive income (loss) before reclassifications		12,294			-			(279	)		12,015
Amounts reclassified from AOCIL		(211	)		-			2,006			1,795
Net current period other comprehensive income		12,083			-			1,727			13,810
Balances at end of period	$	15,822		$	(5,798	)	$	-		$	10,024

2019
Balances at beginning of period	$	(4,185	)	$	(5,798	)	$	(125	)	$	(10,108	)
Other comprehensive income (loss) before reclassifications		8,035			-			(1,266	)		6,769
Amounts reclassified from AOCIL		(111	)		-			(336	)		(447	)
Net current period other comprehensive income (loss)		7,924			-			(1,602	)		6,322
Balances at end of period	$	3,739		$	(5,798	)	$	(1,727	)	$	(3,786	)

2018
Balances at beginning of period	$	(470	)	$	(5,798	)	$	269		$	(5,999	)
Other comprehensive loss before reclassifications		(3,671	)		-			(207	)		(3,878	)
Amounts reclassified from AOCIL		(44	)		-			(187	)		(231	)
Net current period other comprehensive loss		(3,715	)		-			(394	)		(4,109	)
Balances at end of period	$	(4,185	)	$	(5,798	)	$	(125	)	$	(10,108	)

Reclassifications Out of Each Component of AOCIL

A summary of reclassifications out of each component of AOCIL for the years ended December 31 follows:

AOCIL Component	Reclassified From AOCIL			Affected Line Item in Consolidated Statements of Operations
	(In thousands)

2020
Unrealized gains (losses) on securities available for sale	$	267		Net gains on securities
		-		Net impairment loss recognized in earnings
		267		Total reclassifications before tax
		56		Income tax expense
	$	211		Reclassifications, net of tax


Unrealized gains (losses) on cash flow hedges	$	2,539		Interest expense
		533		Income tax expense
	$	2,006		Reclassification, net of tax

	$	(1,795	)	Total reclassifications for the period, net of tax

2019
Unrealized gains (losses) on securities available for sale	$	140		Net gains on securities
		-		Net impairment loss recognized in earnings
		140		Total reclassifications before tax
		29		Income tax expense
	$	111		Reclassifications, net of tax

Unrealized gains (losses) on cash flow hedges	$	(425	)	Interest expense
		(89	)	Income tax expense
	$	(336	)	Reclassification, net of tax

	$	447		Total reclassifications for the period, net of tax

2018
Unrealized gains (losses) on securities available for sale	$	56		Net gains on securities
		-		Net impairment loss recognized in earnings
		56		Total reclassifications before tax
		12		Income tax expense
	$	44		Reclassifications, net of tax

Unrealized gains (losses) on cash flow hedges	$	(237	)	Interest expense
		(50	)	Income tax expense
	$	(187	)	Reclassification, net of tax

	$	231		Total reclassifications for the period, net of tax

INDEPENDENT BANK CORPORATION (PARENT COMPANY ONLY) FINANCIAL INFORMATION (Tables)

12 Months Ended

Dec. 31, 2020

INDEPENDENT BANK CORPORATION (PARENT COMPANY ONLY) FINANCIAL INFORMATION [Abstract]

Condensed Statements of Financial Condition

CONDENSED STATEMENTS OF FINANCIAL CONDITION
	December 31,
	2020		2019
	(In thousands)
ASSETS
Cash and due from banks	$	10,466	$	10,505
Interest bearing deposits - time		40,000		10,000
Investment in subsidiaries		418,465		369,861
Accrued income and other assets		805		463
Total Assets	$	469,736	$	390,829

LIABILITIES AND SHAREHOLDERS’ EQUITY
Subordinated debt	$	39,281	$	-
Subordinated debentures		39,524		39,456
Accrued expenses and other liabilities		684		575
Shareholders’ equity		390,247		350,798
Total Liabilities and Shareholders’ Equity	$	469,736	$	390,829

Condensed Statements of Operations

CONDENSED STATEMENTS OF OPERATIONS

	Year Ended December 31,
	2020			2019			2018
	(In thousands)
OPERATING INCOME
Dividends from subsidiary	$	24,000		$	29,000		$	33,500
Interest income		99			230			160
Other income		42			61			56
Total Operating Income		24,141			29,291			33,716

OPERATING EXPENSES
Interest expense		2,893			2,104			1,924
Administrative and other expenses		733			655			748
Total Operating Expenses		3,626			2,759			2,672
Income Before Income Tax and Equity in Undistributed Net Income of Subsidiaries		20,515			26,532			31,044
Income tax benefit		(937	)		(423	)		(515	)
Income Before Equity in Undistributed Net Income of Subsidiaries		21,452			26,955			31,559
Equity in undistributed net income of subsidiaries		34,700			19,480			8,280
Net Income	$	56,152		$	46,435		$	39,839

Condensed Statements of Cash Flows

CONDENSED STATEMENTS OF CASH FLOWS

	Year Ended December 31,
	2020			2019			2018
	(In thousands)
Net Income	$	56,152		$	46,435		$	39,839
ADJUSTMENTS TO RECONCILE NET INCOME TO NET CASH FROM OPERATING ACTIVITIES
Deferred income tax (benefit) expense		(34	)		1,503			6,620
Share based compensation		89			65			53
Accretion of discount on subordinated debt and debentures		113			68			51
(Increase) decrease in accrued income and other assets		(307	)		891			(1,307	)
Increase in accrued expenses and other liabilities		109			45			21
Equity in undistributed net income of subsidiaries		(34,700	)		(19,480	)		(8,280	)
Total Adjustments		(34,730	)		(16,908	)		(2,842	)
Net Cash From Operating Activities		21,422			29,527			36,997

CASH FLOW FROM (USED IN) INVESTING ACTIVITIES
Purchases of interest bearing deposits - time		(85,000	)		(20,000	)		(30,000	)
Maturity of interest bearing deposits - time		55,000			35,000			10,000
Acquisition of business, less cash received		-			-			431
Net Cash From (Used In) Investing Activities		(30,000	)		15,000			(19,569	)

CASH FLOW FROM (USED IN) FINANCING ACTIVITIES
Proceeds from issuance of subordinated debt, net of issuance costs		39,236			-			-
Dividends paid		(17,618	)		(16,554	)		(14,055	)
Proceeds from issuance of common stock		1,907			2,074			1,945
Share based compensation withholding obligation		(755	)		(882	)		(1,467	)
Repurchase of common stock		(14,231	)		(26,284	)		(12,681	)
Net Cash From (Used In) Financing Activities		8,539			(41,646	)		(26,258	)
Net Increase (Decrease) in Cash and Cash Equivalents		(39	)		2,881			(8,830	)
Cash and Cash Equivalents at Beginning of Year		10,505			7,624			16,454
Cash and Cash Equivalents at End of Year	$	10,466		$	10,505		$	7,624

REVENUE FROM CONTRACTS WITH CUSTOMERS (Tables)

12 Months Ended

Dec. 31, 2020

REVENUE FROM CONTRACTS WITH CUSTOMERS [Abstract]

Disaggregation of Revenue Sources by Attribute

Disaggregation of our revenue sources by attribute for the years ended December 31 follow:

2020
	Service Charges on Deposit Accounts		Other Deposit Related Income		Interchange Income		Investment and Insurance Commissions		Total
	(In thousands)
Retail
Overdraft fees	$	5,627	$	-	$	-	$	-	$	5,627
Account service charges		2,017		-		-		-		2,017
ATM fees		-		1,173		-		-		1,173
Other		-		769		-		-		769
Business
Overdraft fees		873		-		-		-		873
ATM fees		-		24		-		-		24
Other		-		342		-		-		342
Interchange income		-		-		11,230		-		11,230
Asset management revenue		-		-		-		1,283		1,283
Transaction based revenue		-		-		-		688		688

Total	$	8,517	$	2,308	$	11,230	$	1,971	$	24,026

Reconciliation to Consolidated Statement of Operations:
Non-interest income - other:
Other deposit related income									$	2,308
Investment and insurance commissions										1,971
Bank owned life insurance										910
Other										2,332
Total									$	7,521

2019
	Service Charges on Deposit Accounts		Other Deposit Related Income		Interchange Income		Investment and Insurance Commissions		Total
	(In thousands)
Retail
Overdraft fees	$	7,590	$	-	$	-	$	-	$	7,590
Account service charges		2,103		-		-		-		2,103
ATM fees		-		1,368		-		-		1,368
Other		-		965		-		-		965
Business
Overdraft fees		1,515		-		-		-		1,515
ATM fees		-		35		-		-		35
Other		-		422		-		-		422
Interchange income		-		-		10,297		-		10,297
Asset management revenue		-		-		-		1,123		1,123
Transaction based revenue		-		-		-		535		535

Total	$	11,208	$	2,790	$	10,297	$	1,658	$	25,953

Reconciliation to Consolidated Statement of Operations:
Non-interest income - other:
Other deposit related income									$	2,790
Investment and insurance commissions										1,658
Bank owned life insurance										1,111
Other										3,723
Total									$	9,282

2018
	Service Charges on Deposit Accounts		Other Deposit Related Income		Interchange Income		Investment and Insurance Commissions		Total
	(In thousands)
Retail
Overdraft fees	$	8,285	$	-	$	-	$	-	$	8,285
Account service charges		2,406		-		-		-		2,406
ATM fees		-		1,423		-		-		1,423
Other		-		941		-		-		941
Business
Overdraft fees		1,567		-		-		-		1,567
ATM fees		-		34				-		34
Other		-		594				-		594
Interchange income		-		-		9,905		-		9,905
Asset management revenue		-		-		-		1,100		1,100
Transaction based revenue		-		-		-		871		871

Total	$	12,258	$	2,992	$	9,905	$	1,971	$	27,126

Reconciliation to Consolidated Statement of Operations:
Non-interest income - other:
Other deposit related income									$	2,992
Investment and insurance commissions										1,971
Bank owned life insurance										970
Other										2,827
Total									$	8,760

ACCOUNTING POLICIES (Details) shares in Millions, $ in Millions	12 Months Ended
	Dec. 31, 2020 USD ($) Employee Segment Payment shares	Dec. 31, 2019 USD ($) Segment	Dec. 31, 2018 USD ($) Segment
ACCOUNTING POLICIES [Abstract]
Percentage of loan portfolio secured by real estate	67.00%
Operating Segments [Abstract]
Number of reportable segments \| Segment	1	1	1
Mortgage Loan Servicing Rights [Abstract]
Mortgage loan servicing fees \| $	$ 6.9	$ 6.2	$ 5.5
Loan Revenue Recognition [Abstract]
Number of past due days for commercial loan, installment loans and payment plan receivables	90 days
Number of consecutive payments for mortgage loans missed \| Payment	4
Bank Owned Life Insurance [Abstract]
Number of lives of group flexible premium non-participating variable life insurance contract \| Employee	265
Minimum [Member]
Finite Lived Intangible Asset Useful Life [Abstract]
Estimated useful lives	10 years
Maximum [Member]
Finite Lived Intangible Asset Useful Life [Abstract]
Estimated useful lives	15 years
Building [Member] \| Maximum [Member]
Property, Plant and Equipment, Useful Life [Abstract]
Estimated useful lives	39 years
Equipment [Member] \| Maximum [Member]
Property, Plant and Equipment, Useful Life [Abstract]
Estimated useful lives	7 years
Dividend Reinvestment Plan [Member]
Reserved for Future Issuance [Abstract]
Common stock reserved for issuance (in shares)	0.1
Long-Term Incentive Plans [Member]
Reserved for Future Issuance [Abstract]
Common stock reserved for issuance (in shares)	0.6

ACCOUNTING POLICIES, Adoption of New Accounting Standards (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2020	Dec. 31, 2019	Dec. 31, 2018
New Accounting Standards [Abstract]
Expected increase in the allowance for loan losses	$ 40	$ 500	$ (190)
ASU 2016-13 [Member]
New Accounting Standards [Abstract]
Allowance for loan losses forecast period	1 year
ASU 2016-13 [Member] \| Minimum [Member]
New Accounting Standards [Abstract]
Expected increase to the allowance for losses related to unfunded loan commitments	$ 500
ASU 2016-13 [Member] \| Maximum [Member]
New Accounting Standards [Abstract]
Expected increase to the allowance for losses related to unfunded loan commitments	1,500
ASU 2016-13 [Member] \| Cumulative Effect, Period of Adoption, Adjustment [Member] \| Minimum [Member]
New Accounting Standards [Abstract]
Expected increase in the allowance for loan losses	10,500
ASU 2016-13 [Member] \| Cumulative Effect, Period of Adoption, Adjustment [Member] \| Maximum [Member]
New Accounting Standards [Abstract]
Expected increase in the allowance for loan losses	$ 12,500

RESTRICTIONS ON CASH AND DUE FROM BANKS (Details) - USD ($) $ in Thousands	1 Months Ended	12 Months Ended
	Mar. 31, 2020	Dec. 31, 2020	Dec. 31, 2019
RESTRICTIONS ON CASH AND DUE FROM BANKS [Abstract]
Average reserve balances maintained	$ 0	$ 9,200	$ 26,600
Reserve balances held at unrelated financial institutions		$ 740	$ 10

SECURITIES (Details)
$ in Thousands

12 Months Ended

Dec. 31, 2020

USD ($)

Security

Grade

Dec. 31, 2019

USD ($)

Security

Dec. 31, 2018

USD ($)

Available-for-sale Securities, Amortized Cost Basis [Abstract]

$ 1,052,147

$ 513,668

21,416

5,782

1,404

1,050

OTTI recognized in accumulated other comprehensive income (loss)

1,072,159

518,400

Available-for-sale Securities, Continuous Unrealized Loss Position, Fair Value [Abstract]

148,169

130,648

989

535

28,257

38,343

415

515

176,426

168,991

Private Label Mortgage Backed Securities Below Investment Grade [Abstract]

1,404

1,050

Fair value

878

Non-credit unrealized loss

676

Unrealized gain

202

Cumulative credit related OTTI

1,214

$ 0

Number of securities settled which were recorded under OTTI | Security

Other than Temporary Impairment, Credit Losses Recognized in Earnings [Roll Forward]

Additions to credit losses on securities for which no previous OTTI was recognized

1,214

$ 1,594

1,594

Increases to credit losses on securities for which OTTI was previously recognized

Reduction

(380)

^[1]

Fair Value Hedge Designation [Member]

1,214

$ 1,594

Available-for-sale Securities, Amortized Cost Basis [Abstract]

Fixed Income Interest Rate [Member] | Fair Value Hedge Designation [Member] | Interest Rate Swap [Member]

(761)

Available-for-sale Securities, Amortized Cost Basis [Abstract]

Available-for-sale Securities, Amortized Cost Basis [Abstract]

U.S. Agency [Member]

10,456

14,591

305

Available-for-sale Securities, Continuous Unrealized Loss Position, Fair Value [Abstract]

10,748

14,661

1,469

2,782

2,329

2,712

3,798

5,494

Number of securities with market fair value less than amortized cost | Security

$ 13

U.S. Agency Residential Mortgage-Backed [Member]

Available-for-sale Securities, Amortized Cost Basis [Abstract]

$ 340,224

226,130

4,951

1,910

593

278

Available-for-sale Securities, Continuous Unrealized Loss Position, Fair Value [Abstract]

344,582

227,762

96,839

56,377

592

126

13,551

152

96,922

69,928

Number of securities with market fair value less than amortized cost | Security

$ 593

278

U.S. Agency Commercial Mortgage-Backed [Member]

Available-for-sale Securities, Amortized Cost Basis [Abstract]

$ 6,869

10,671

326

113

Available-for-sale Securities, Continuous Unrealized Loss Position, Fair Value [Abstract]

7,195

10,756

3,284

659

3,943

Private Label Mortgage-Backed [Member]

Available-for-sale Securities, Amortized Cost Basis [Abstract]

41,429

39,248

1,539

544

139

Available-for-sale Securities, Continuous Unrealized Loss Position, Fair Value [Abstract]

42,829

39,693

11,838

16,387

2,050

343

13,888

16,730

Number of securities with market fair value less than amortized cost | Security

$ 139

Private Label Mortgage Backed Securities Below Investment Grade [Abstract]

Number of private label mortgage backed securities currently with OTTI unrealized gains | Security

Senior Security [Member]

Private Label Mortgage Backed Securities Below Investment Grade [Abstract]

Fair value

$ 373

Non-credit unrealized loss

350

Unrealized gain

Cumulative credit related OTTI

757

Super Senior Security [Member]

Private Label Mortgage Backed Securities Below Investment Grade [Abstract]

Fair value

505

Non-credit unrealized loss

326

Unrealized gain

179

Cumulative credit related OTTI

457

Other Asset Backed [Member]

Available-for-sale Securities, Amortized Cost Basis [Abstract]

252,596

94,158

1,796

103

211

375

Available-for-sale Securities, Continuous Unrealized Loss Position, Fair Value [Abstract]

254,181

93,886

7,142

34,027

233

21,197

13,839

186

142

28,339

47,866

Number of securities with market fair value less than amortized cost | Security

$ 211

375

Obligations of States and Political Subdivisions [Member]

Available-for-sale Securities, Amortized Cost Basis [Abstract]

$ 315,795

94,499

8,676

1,724

178

121

Available-for-sale Securities, Continuous Unrealized Loss Position, Fair Value [Abstract]

324,293

96,102

28,957

15,666

177

800

5,396

29,757

21,062

Number of securities with market fair value less than amortized cost | Security

$ 178

121

Corporate [Member]

Available-for-sale Securities, Amortized Cost Basis [Abstract]

$ 82,307

31,904

3,807

1,296

Available-for-sale Securities, Continuous Unrealized Loss Position, Fair Value [Abstract]

86,017

33,195

1,924

2,125

1,924

2,125

Number of securities with market fair value less than amortized cost | Security

$ 97

Trust Preferred [Member]

Available-for-sale Securities, Amortized Cost Basis [Abstract]

$ 1,971

1,968

173

125

Available-for-sale Securities, Continuous Unrealized Loss Position, Fair Value [Abstract]

1,798

1,843

1,798

1,843

173

125

1,798

1,843

Number of securities with market fair value less than amortized cost | Security

$ 173

125

Number of issues rated as investment grade | Grade

Number of securities not rated | Security

Non-rated securities, amortized cost

$ 1,000

Fair value of non-rated trust preferred securities

870

Foreign Government [Member]

Available-for-sale Securities, Amortized Cost Basis [Abstract]

500

499

Gain and losses realized on sale of securities available for sale [Abstract]

$ 516

$ 502

[1]	During 2019 one security with previously recorded OTTI was settled and balance is now zero.

SECURITIES, Amortized Cost and Fair Value Securities Available for Sale Contractual Maturities (Details) - USD ($) $ in Thousands	Dec. 31, 2020	Dec. 31, 2019
Available-for-sale Securities, Debt Maturities, Amortized Cost Basis, Fiscal Year Maturity [Abstract]
Maturing within one year	$ 21,244
Maturing after one year but within five years	79,837
Maturing after five years but within ten years	76,454
Maturing after ten years	233,494
Amortized cost	411,029
U.S. agency residential mortgage-backed	340,224
U.S. agency commercial mortgage-backed	6,869
Private label mortgage-backed	41,429
Other asset backed	252,596
Amortized cost	1,052,147	$ 513,668
Available-for-sale Securities, Debt Maturities, Fair Value, Fiscal Year Maturity [Abstract]
Maturing within one year	21,412
Maturing after one year but within five years	82,725
Maturing after five years but within ten years	80,060
Maturing after ten years	239,175
Total available-for-sale securities fair value	423,372
U.S. agency residential mortgage-backed	344,582
U.S. agency commercial mortgage-backed	7,195
Private label mortgage-backed	42,829
Other asset backed	254,181
Total	$ 1,072,159	$ 518,400

SECURITIES, Gains and Losses Realized on Sale of Securities Available for Sale (Details) - USD ($)
$ in Thousands

12 Months Ended

Dec. 31, 2020

Dec. 31, 2019

Dec. 31, 2018

Proceeds

$ 38,095

$ 68,716

$ 48,736

Realized gains

271

248

192

^[1]

Realized losses

108

136

Trading securities, realized gain (losses)

170

(60)

Gains (losses) related to preferred stock held for sale

(60)

Pledged securities with book value

$ 14,000

$ 8,700

Shareholder equity threshold not exceeded by revenue or taxing authority amount

10.00%

VISA Class B Common Stock [Member]

Gain and losses realized on sale of securities available for sale [Abstract]

Realized gains

$ 144

Number securities sold (in shares)

1,000

[1]	2018 excludes a $0.144 million gain on the sale of 1,000 VISA Class B shares.

LOANS (Details) - USD ($)
$ in Thousands

12 Months Ended

Dec. 31, 2020

Dec. 31, 2019

Dec. 31, 2018

Net of deferred loan costs

$ 2,733,678

$ 2,725,023

14,600

16,300

2,395

50,516

$ 27,658

Residential Fixed Rate Mortgage [Member] | Freddie Mac [Member]

62,560

19,978

10,597

26,300

10,900

Residential Fixed and Adjustable Rate Mortgage [Member]

720

(100)

9,900

27,600

Real Estate [Member] | Residential First Mortgages [Member]

$ 40

Real Estate [Member] | Residential Home Equity and Other Junior Mortgages [Member]

^[1]

792,762

843,746

Real Estate [Member] | Construction and Land Development [Member]

^[1]

138,128

166,735

Real Estate [Member] | Other [Member]

^[1]

232,693

249,747

^[1],[2]

669,150

693,580

Consumer [Member]

468,090

448,297

429,011

318,504

Agricultural [Member]

3,844

4,414

Mortgage [Member] | Residential Adjustable Rate Mortgage [Member]

1,015,926

1,098,911

40,600

Mortgage [Member] | Residential Fixed Rate Mortgage [Member]

2,400

Mortgage [Member] | Residential Fixed Rate Mortgage [Member] | Freddie Mac [Member]

$ 70

65,100

Analysis of allowance for loan losses by portfolio segment [Roll Forward]

$ 1,700

[1]	Includes both residential and non-residential commercial loans secured by real estate.
[2]	Includes loans secured by multi-family residential and non-farm, non-residential property.

LOANS, Allowance for Loan Losses (Details) - USD ($)
$ in Thousands

12 Months Ended

Dec. 31, 2020

Dec. 31, 2019

Dec. 31, 2018

$ 26,148

$ 24,888

$ 22,587

12,463

824

1,503

3,069

3,961

4,622

(6,251)

(3,525)

(3,824)

35,429

26,148

24,888

5,581

6,155

29,848

19,993

35,429

26,148

50,672

55,892

2,690,880

2,675,193

2,742,577

2,733,370

8,899

8,347

Loans Acquired with Deteriorated Credit Quality [Member]

2,733,678

2,725,023

1,025

2,285

Analysis of allowance for loan losses by portfolio segment [Roll Forward]

7,922

7,090

5,595

1,751

(651)

(946)

1,804

2,165

2,889

(4,076)

(682)

(448)

7,401

7,922

7,090

1,266

1,031

6,135

6,891

7,401

7,922

9,431

9,393

1,236,052

1,158,906

1,245,951

1,169,693

3,536

2,998

Commercial [Member] | Loans Acquired with Deteriorated Credit Quality [Member]

1,242,415

1,166,695

468

1,394

Analysis of allowance for loan losses by portfolio segment [Roll Forward]

8,216

7,978

8,733

(915)

526

457

513

933

734

(816)

(1,221)

(1,946)

6,998

8,216

7,978

4,124

4,863

2,874

3,353

6,998

8,216

39,245

43,574

980,449

1,058,917

1,020,104

1,103,066

^[1]

4,178

4,155

Mortgage [Member] | Loans Acquired with Deteriorated Credit Quality [Member]

1,015,926

1,098,911

410

575

Analysis of allowance for loan losses by portfolio segment [Roll Forward]

1,283

895

864

436

1,147

462

752

863

999

(1,359)

(1,622)

(1,430)

1,112

1,283

895

191

261

921

1,022

1,112

1,283

1,996

2,925

474,379

457,370

476,522

460,611

^[1]

1,185

1,194

Installment [Member] | Loans Acquired with Deteriorated Credit Quality [Member]

475,337

459,417

Subjective Allocation [Member]

147

316

Analysis of allowance for loan losses by portfolio segment [Roll Forward]

8,727

8,925

7,395

11,191

(198)

1,530

19,918

8,727

$ 8,925

19,918

8,727

Subjective Allocation [Member] | Loans Acquired with Deteriorated Credit Quality [Member]

19,918

8,727

$ 0

[1]	Credit scores have been updated within the last twelve months.

LOANS, Receivables Past Due (Details) - USD ($)
$ in Thousands

12 Months Ended

Dec. 31, 2020

Dec. 31, 2019

Dec. 31, 2018

Accrued Interest

$ 500

$ 400

Interest Income

$ 0

Loans Past Due, 90+ days [Member]

8,899

8,347

Commercial and Industrial [Member]

Government guaranteed loans excluded from non-performing loans

1-4 Family Owner Occupied - Non-jumbo [Member]

Government guaranteed loans excluded from non-performing loans

386

569

3,536

2,998

Mortgage [Member] | 1-4 Family Owner Occupied - Jumbo [Member]

^[1]

4,178

4,155

Mortgage [Member] | 1-4 Family Owner Occupied - Non-jumbo [Member]

^[1]

1,301

1,139

Mortgage [Member] | 1-4 Family Non-owner Occupied [Member]

^[1]

1,641

1,662

Mortgage [Member] | 1-4 Family - 2nd Lien [Member]

^[1]

587

586

Mortgage [Member] | Resort Lending [Member]

^[1]

373

502

^[1]

276

266

Installment [Member] | Boat Lending [Member]

^[1]

1,185

1,194

Installment [Member] | Recreational Vehicle Lending [Member]

^[1]

572

490

Installment [Member] | Other [Member]

^[1]

457

378

Non-Performing Loans [Member]

^[1]

156

326

^[2]

^[2]

7,873

9,532

^[2]

7,873

9,532

Non-Performing Loans [Member] | Loans Past Due, 90+ days [Member]

^[2]

Non-Performing Loans [Member] | Commercial [Member] | Commercial and Industrial [Member]

^[2]

^[2],[3]

^[2],[3]

1,387

565

Non-Performing Loans [Member] | Commercial [Member] | Commercial Real Estate [Member]

^[2],[3]

1,387

565

^[2]

^[2]

735

Non-Performing Loans [Member] | Mortgage [Member] | 1-4 Family Owner Occupied - Jumbo [Member]

^[2]

735

^[2]

^[2]

623

1,179

Non-Performing Loans [Member] | Mortgage [Member] | 1-4 Family Owner Occupied - Non-jumbo [Member]

^[2]

623

1,179

^[2],[4]

^[2],[4]

2,281

3,540

Non-Performing Loans [Member] | Mortgage [Member] | 1-4 Family Non-owner Occupied [Member]

^[2],[4]

2,281

3,540

^[2]

^[2]

1,112

1,039

Non-Performing Loans [Member] | Mortgage [Member] | 1-4 Family - 2nd Lien [Member]

^[2]

1,112

1,039

^[2]

^[2]

1,344

979

Non-Performing Loans [Member] | Mortgage [Member] | Resort Lending [Member]

^[2]

1,344

979

^[2]

^[2]

607

690

Non-Performing Loans [Member] | Installment [Member] | Boat Lending [Member]

^[2]

607

690

^[2]

^[2]

332

Non-Performing Loans [Member] | Installment [Member] | Recreational Vehicle Lending [Member]

^[2]

332

^[2]

^[2]

Non-Performing Loans [Member] | Installment [Member] | Other [Member]

^[2]

^[2]

^[2]

393

470

^[2]

$ 393

$ 470

[1]	Credit scores have been updated within the last twelve months.
[2]	Non-performing loans exclude purchase credit impaired loans.
[3]	Non-performing commercial and industrial loans exclude $0.053 million and $0.077 million of government guaranteed loans at December 31, 2020 and 2019, respectively.
[4]	Non-performing 1-4 family owner occupied – non jumbo loans exclude $0.386 million and $0.569 million of government guaranteed loans at December 31, 2020 and 2019, respectively.

LOANS, Impaired Financing Receivables (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2020	Dec. 31, 2019	Dec. 31, 2018
Impaired loan with no allocated allowance for loan losses [Abstract]
TDR	$ 93	$ 337
Non - TDR	1,367	1,550
Impaired loans with an allocated allowance for loan losses [Abstract]
TDR - allowance based on collateral	9,027	1,587
TDR - allowance based on present value cash flow	37,953	48,798
Non - TDR - allowance based on collateral	1,873	3,365
Total impaired loans	50,313	55,637
Amount of allowance for loan losses allocated [Abstract]
TDR - allowance based on collateral	1,058	542
TDR - allowance based on present value cash flow	3,755	4,641
Non - TDR - allowance based on collateral	768	972
Total amount of allowance for loan losses allocated	5,581	6,155
Impaired Loans by class [Abstract]
Recorded Investment, with no related allowance for loan losses recorded	1,460	1,887
Unpaid Principal Balance, with no related allowance for loan losses recorded	1,865	2,115
With no related allowance for loan losses recorded	0	0
Recorded Investment, with an allowance for loan losses recorded	49,212	54,005
Unpaid Principal Balance, with an allowance for loan losses recorded	51,105	56,708
Recorded Investment	50,672	55,892
Unpaid Principal Balance	52,970	58,823
Related Allowance	5,581	6,155
Accrued interest included in recorded investment	359	255
Average recorded investment in and interest income earned on impaired loans by class [Abstract]
Average Recorded Investment, with no related allowance for loan losses recorded	1,724	789	$ 1,396
Interest Income Recognized, with no related allowance for loan losses recorded	23	13	58
Average Recorded Investment, with an allowance for loan losses recorded	55,600	55,428	61,529
Interest Income Recognized, with an allowance for loan losses recorded	4,828	2,978	3,052
Average Recorded Investment	57,324	56,217	62,925
Interest Income Recognized	4,851	2,991	3,110
Commercial [Member] \| Commercial and Industrial [Member]
Impaired Loans by class [Abstract]
Recorded Investment, with no related allowance for loan losses recorded	77	257
Unpaid Principal Balance, with no related allowance for loan losses recorded	80	257
With no related allowance for loan losses recorded	0	0
Recorded Investment, with an allowance for loan losses recorded	2,227	1,655
Unpaid Principal Balance, with an allowance for loan losses recorded	2,370	1,706
Recorded Investment	2,304	1,912
Unpaid Principal Balance	2,450	1,963
Related Allowance	756	453
Average recorded investment in and interest income earned on impaired loans by class [Abstract]
Average Recorded Investment, with no related allowance for loan losses recorded	125	51	378
Interest Income Recognized, with no related allowance for loan losses recorded	9	0	20
Average Recorded Investment, with an allowance for loan losses recorded	2,230	2,256	2,641
Interest Income Recognized, with an allowance for loan losses recorded	242	72	127
Average Recorded Investment	2,355	2,307	3,019
Interest Income Recognized	251	72	147
Commercial [Member] \| Commercial Real Estate [Member]
Impaired Loans by class [Abstract]
Recorded Investment, with no related allowance for loan losses recorded	0	796
Unpaid Principal Balance, with no related allowance for loan losses recorded	0	796
With no related allowance for loan losses recorded	0	0
Recorded Investment, with an allowance for loan losses recorded	7,127	6,685
Unpaid Principal Balance, with an allowance for loan losses recorded	7,096	6,661
Recorded Investment	7,127	7,481
Unpaid Principal Balance	7,096	7,457
Related Allowance	510	578
Average recorded investment in and interest income earned on impaired loans by class [Abstract]
Average Recorded Investment, with no related allowance for loan losses recorded	159	278	961
Interest Income Recognized, with no related allowance for loan losses recorded	0	5	0
Average Recorded Investment, with an allowance for loan losses recorded	10,751	5,778	5,199
Interest Income Recognized, with an allowance for loan losses recorded	1,043	315	288
Average Recorded Investment	10,910	6,056	6,160
Interest Income Recognized	1,043	320	288
Mortgage [Member] \| 1-4 Family Owner Occupied - Jumbo [Member]
Impaired Loans by class [Abstract]
Recorded Investment, with no related allowance for loan losses recorded	623	0
Unpaid Principal Balance, with no related allowance for loan losses recorded	629	0
With no related allowance for loan losses recorded	0	0
Recorded Investment, with an allowance for loan losses recorded	506	1,447
Unpaid Principal Balance, with an allowance for loan losses recorded	880	1,445
Recorded Investment	1,129	1,447
Unpaid Principal Balance	1,509	1,445
Related Allowance	50	91
Average recorded investment in and interest income earned on impaired loans by class [Abstract]
Average Recorded Investment, with no related allowance for loan losses recorded	408	0	41
Interest Income Recognized, with no related allowance for loan losses recorded	0	0	0
Average Recorded Investment, with an allowance for loan losses recorded	1,083	995	1,335
Interest Income Recognized, with an allowance for loan losses recorded	84	39	69
Average Recorded Investment	1,491	995	1,376
Interest Income Recognized	84	39	69
Mortgage [Member] \| 1-4 Family Owner Occupied - Non-jumbo [Member]
Impaired Loans by class [Abstract]
Recorded Investment, with no related allowance for loan losses recorded	0	212
Unpaid Principal Balance, with no related allowance for loan losses recorded	0	217
With no related allowance for loan losses recorded	0	0
Recorded Investment, with an allowance for loan losses recorded	21,655	10,163
Unpaid Principal Balance, with an allowance for loan losses recorded	22,311	10,695
Recorded Investment	21,655	10,375
Unpaid Principal Balance	22,311	10,912
Related Allowance	2,300	1,031
Average recorded investment in and interest income earned on impaired loans by class [Abstract]
Average Recorded Investment, with no related allowance for loan losses recorded	252	201	15
Interest Income Recognized, with no related allowance for loan losses recorded	4	0	27
Average Recorded Investment, with an allowance for loan losses recorded	19,624	15,183	28,183
Interest Income Recognized, with an allowance for loan losses recorded	2,033	594	1,408
Average Recorded Investment	19,876	15,384	28,198
Interest Income Recognized	2,037	594	1,435
Mortgage [Member] \| 1-4 Family Non-owner Occupied [Member]
Impaired Loans by class [Abstract]
Recorded Investment, with no related allowance for loan losses recorded	305	214
Unpaid Principal Balance, with no related allowance for loan losses recorded	473	366
With no related allowance for loan losses recorded	0	0
Recorded Investment, with an allowance for loan losses recorded	4,335	4,962
Unpaid Principal Balance, with an allowance for loan losses recorded	4,704	5,542
Recorded Investment	4,640	5,176
Unpaid Principal Balance	5,177	5,908
Related Allowance	495	572
Average recorded investment in and interest income earned on impaired loans by class [Abstract]
Average Recorded Investment, with no related allowance for loan losses recorded	308	123	0
Interest Income Recognized, with no related allowance for loan losses recorded	10	0	0
Average Recorded Investment, with an allowance for loan losses recorded	4,664	2,874	5,475
Interest Income Recognized, with an allowance for loan losses recorded	375	291	314
Average Recorded Investment	4,972	2,997	5,475
Interest Income Recognized	385	291	314
Mortgage [Member] \| 1-4 Family - 2nd Lien [Member]
Impaired Loans by class [Abstract]
Recorded Investment, with no related allowance for loan losses recorded	301	407
Unpaid Principal Balance, with no related allowance for loan losses recorded	304	438
With no related allowance for loan losses recorded	0	0
Recorded Investment, with an allowance for loan losses recorded	811	14,059
Unpaid Principal Balance, with an allowance for loan losses recorded	829	15,243
Recorded Investment	1,112	14,466
Unpaid Principal Balance	1,133	15,681
Related Allowance	200	1,695
Average recorded investment in and interest income earned on impaired loans by class [Abstract]
Average Recorded Investment, with no related allowance for loan losses recorded	380	136	0
Interest Income Recognized, with no related allowance for loan losses recorded	0	7	0
Average Recorded Investment, with an allowance for loan losses recorded	3,376	13,383	284
Interest Income Recognized, with an allowance for loan losses recorded	22	809	12
Average Recorded Investment	3,756	13,519	284
Interest Income Recognized	22	816	12
Mortgage [Member] \| Resort Lending [Member]
Impaired Loans by class [Abstract]
Recorded Investment, with no related allowance for loan losses recorded	154	0
Unpaid Principal Balance, with no related allowance for loan losses recorded	379	0
With no related allowance for loan losses recorded	0	0
Recorded Investment, with an allowance for loan losses recorded	10,555	12,110
Unpaid Principal Balance, with an allowance for loan losses recorded	10,764	12,263
Recorded Investment	10,709	12,110
Unpaid Principal Balance	11,143	12,263
Related Allowance	1,079	1,474
Average recorded investment in and interest income earned on impaired loans by class [Abstract]
Average Recorded Investment, with no related allowance for loan losses recorded	92	0	0
Interest Income Recognized, with no related allowance for loan losses recorded	0	0	0
Average Recorded Investment, with an allowance for loan losses recorded	11,316	11,697	14,687
Interest Income Recognized, with an allowance for loan losses recorded	799	669	606
Average Recorded Investment	11,408	11,697	14,687
Interest Income Recognized	799	669	606
Installment [Member] \| Boat Lending [Member]
Impaired Loans by class [Abstract]
Recorded Investment, with no related allowance for loan losses recorded	0	0
Unpaid Principal Balance, with no related allowance for loan losses recorded	0	0
With no related allowance for loan losses recorded	0	0
Recorded Investment, with an allowance for loan losses recorded	7	0
Unpaid Principal Balance, with an allowance for loan losses recorded	11	0
Recorded Investment	7	0
Unpaid Principal Balance	11	0
Related Allowance	2	0
Average recorded investment in and interest income earned on impaired loans by class [Abstract]
Average Recorded Investment, with no related allowance for loan losses recorded	0	0	0
Interest Income Recognized, with no related allowance for loan losses recorded	0	0	0
Average Recorded Investment, with an allowance for loan losses recorded	59	54	1
Interest Income Recognized, with an allowance for loan losses recorded	1	0	0
Average Recorded Investment	59	54	1
Interest Income Recognized	1	0	0
Installment [Member] \| Recreational Vehicle Lending [Member]
Impaired Loans by class [Abstract]
Recorded Investment, with no related allowance for loan losses recorded	0	0
Unpaid Principal Balance, with no related allowance for loan losses recorded	0	0
With no related allowance for loan losses recorded	0	0
Recorded Investment, with an allowance for loan losses recorded	87	0
Unpaid Principal Balance, with an allowance for loan losses recorded	100	0
Recorded Investment	87	0
Unpaid Principal Balance	100	0
Related Allowance	19	0
Average recorded investment in and interest income earned on impaired loans by class [Abstract]
Average Recorded Investment, with no related allowance for loan losses recorded	0	0	0
Interest Income Recognized, with no related allowance for loan losses recorded	0	0	0
Average Recorded Investment, with an allowance for loan losses recorded	81	22	84
Interest Income Recognized, with an allowance for loan losses recorded	4	0	4
Average Recorded Investment	81	22	84
Interest Income Recognized	4	0	4
Installment [Member] \| Other [Member]
Impaired Loans by class [Abstract]
Recorded Investment, with no related allowance for loan losses recorded	0	1
Unpaid Principal Balance, with no related allowance for loan losses recorded	0	41
With no related allowance for loan losses recorded	0	0
Recorded Investment, with an allowance for loan losses recorded	1,902	2,924
Unpaid Principal Balance, with an allowance for loan losses recorded	2,040	3,153
Recorded Investment	1,902	2,925
Unpaid Principal Balance	2,040	3,194
Related Allowance	170	261
Average recorded investment in and interest income earned on impaired loans by class [Abstract]
Average Recorded Investment, with no related allowance for loan losses recorded	0	0	1
Interest Income Recognized, with no related allowance for loan losses recorded	0	1	11
Average Recorded Investment, with an allowance for loan losses recorded	2,416	3,186	3,640
Interest Income Recognized, with an allowance for loan losses recorded	225	189	224
Average Recorded Investment	2,416	3,186	3,641
Interest Income Recognized	$ 225	$ 190	$ 235

LOANS, Troubled Debt Restructurings (Details)
$ in Thousands

12 Months Ended

Dec. 31, 2020

USD ($)

Payment

Contract

Dec. 31, 2019

USD ($)

Contract

Dec. 31, 2018

USD ($)

Contract

Number of consecutive timely payments required | Payment

$ 47,073

$ 50,722

Troubled debt restructuring, specific reserve

$ 4,800

5,200

Additional amounts committed to lend as troubled debt restructurings

$ 70

$ 50

Loans classified as troubled debt restructurings [Abstract]

$ 8,822

$ 4,336

$ 3,089

Increase (decrease) in allowance for loan losses

8,848

4,342

3,092

500

(190)

Charge offs due to troubled debt restructurings

$ 0

Past due period for modified loans

$ 0

$ 31

$ 13

90 days

Number of consecutive payments for mortgage loans missed | Payment

Increase (decrease) in allowance for loan loss due to TDRs that subsequently defaulted

$ 0

Charge-offs on TDRs that subsequently defaulted

$ 0

Minimum [Member]

Modification of stated interest rate of loans, range of period

9 months

Modifications involving extension of maturity date, period range

1 month

Maximum [Member]

Modification of stated interest rate of loans, range of period

36 months

Modification of stated interest rate of loans, range of period in certain circumstances

480 months

Modifications involving extension of maturity date, period range

60 months

Modifications involving extension of maturity date, period range in certain circumstances

230 months

Performing TDR's [Member]

Non-performing TDR's [Member]

$ 44,341

47,575

^[1]

2,732

3,147

Commercial [Member] | Performing TDR's [Member]

9,104

8,514

Commercial [Member] | Non-performing TDR's [Member]

7,956

7,974

Commercial [Member] | Commercial and Industrial [Member]

^[1]

$ 1,148

$ 540

Loans classified as troubled debt restructurings [Abstract]

$ 1,207

$ 1,609

$ 652

$ 1,207

$ 1,609

$ 652

Commercial [Member] | Commercial Real Estate [Member]

$ 0

$ 19

$ 0

Loans classified as troubled debt restructurings [Abstract]

$ 7,012

$ 1,479

$ 204

$ 7,012

$ 1,479

$ 204

Mortgage [Member] | 1-4 Family Owner Occupied - Jumbo [Member]

$ 0

Loans classified as troubled debt restructurings [Abstract]

$ 0

$ 419

$ 0

$ 419

Mortgage [Member] | 1-4 Family Owner Occupied - Non-jumbo [Member]

$ 0

Loans classified as troubled debt restructurings [Abstract]

$ 357

$ 478

$ 991

$ 374

$ 483

$ 994

Mortgage [Member] | 1-4 Family Non-owner Occupied [Member]

$ 0

$ 12

$ 0

Loans classified as troubled debt restructurings [Abstract]

$ 111

$ 507

$ 0

$ 116

$ 505

$ 0

Mortgage [Member] | 1-4 Family - 2nd Lien [Member]

$ 0

Loans classified as troubled debt restructurings [Abstract]

$ 44

$ 75

$ 0

$ 46

$ 75

$ 0

Mortgage [Member] | Resort Lending [Member]

$ 0

Loans classified as troubled debt restructurings [Abstract]

$ 0

$ 115

$ 0

$ 114

Installment [Member] | Boat Lending [Member]

$ 0

Loans classified as troubled debt restructurings [Abstract]

$ 0

$ 0

Installment [Member] | Recreational Vehicle Lending [Member]

$ 0

Loans classified as troubled debt restructurings [Abstract]

$ 0

$ 0

Installment [Member] | Other [Member]

$ 0

Loans classified as troubled debt restructurings [Abstract]

$ 91

$ 188

$ 708

$ 93

$ 191

$ 709

$ 0

$ 13

Retail [Member]

Retail [Member] | Performing TDR's [Member]

^[2]

37,969

42,208

Retail [Member] | Non-performing TDR's [Member]

^[2]

36,385

39,601

Non-TDR Loan Modifications and Paycheck Protection Program ("PPP") due to COVID-19 [Abstract]

^[1],[2],[3]

$ 1,584

$ 2,607

[1]	Included in non-performing loans table above.
[2]	Retail loans include mortgage and installment loan portfolio segments.
[3]	Also includes loans on non-accrual at the time of modification until six payments are received on a timely basis.

LOANS, Non-TDR Loan Modifications and Paycheck Protection Program ("PPP") Due to COVID-19 (Details)
$ in Thousands

12 Months Ended

Dec. 31, 2020

USD ($)

Loan

Application

Dec. 31, 2019

USD ($)

Dec. 31, 2018

USD ($)

Dec. 31, 2017

USD ($)

Interest only period for Commercial loans

3 months

Suspended payments period for Retail loans

3 months

$ 2,733,678

$ 2,725,023

0.80%

Interest and fees on loans

$ 35,429

26,148

$ 24,888

$ 22,587

123,159

133,883

116,865

Paycheck Protection Program [Member]

Non-TDR Loan Modifications and Paycheck Protection Program ("PPP") due to COVID-19 [Abstract]

Number of outstanding loans | Loan

$ 169,800

1,483

Number of loan forgiveness applications processed and approved | Application

$ 0

755

Amount of loan forgiveness applications processed and approved

$ 92,000

Interest and fees on loans

5,600

Remaining unaccreted net fees

3,200

Paycheck Protection Program Second Draw Loans [Member]

Non-TDR Loan Modifications and Paycheck Protection Program ("PPP") due to COVID-19 [Abstract]

Non-TDR Loan Modifications and Paycheck Protection Program ("PPP") due to COVID-19 [Abstract]

$ 1,242,415

1,166,695

0.00%

$ 7,401

7,922

7,090

5,595

Non-TDR Loan Modifications and Paycheck Protection Program ("PPP") due to COVID-19 [Abstract]

$ 1,015,926

1,098,911

2.00%

$ 6,998

8,216

7,978

8,733

Non-TDR Loan Modifications and Paycheck Protection Program ("PPP") due to COVID-19 [Abstract]

$ 475,337

459,417

0.30%

Mortgage Loans Serviced for Others [Member]

$ 1,112

$ 1,283

$ 895

$ 864

Non-TDR Loan Modifications and Paycheck Protection Program ("PPP") due to COVID-19 [Abstract]

^[1]

$ 2,984,088

COVID-19 Accomodations [Member]

^[1]

1.40%

Non-TDR Loan Modifications and Paycheck Protection Program ("PPP") due to COVID-19 [Abstract]

Number of loans with Covid 19 Accommodations | Loan

184

Non-TDR loan modifications, portfolio loans outstanding

$ 21,405

COVID-19 Accomodations [Member] | Commercial [Member]

Non-TDR Loan Modifications and Paycheck Protection Program ("PPP") due to COVID-19 [Abstract]

Number of loans with Covid 19 Accommodations | Loan

Non-TDR loan modifications, portfolio loans outstanding

$ 163

COVID-19 Accomodations [Member] | Mortgage [Member]

Non-TDR Loan Modifications and Paycheck Protection Program ("PPP") due to COVID-19 [Abstract]

Number of loans with Covid 19 Accommodations | Loan

134

Non-TDR loan modifications, portfolio loans outstanding

$ 19,830

COVID-19 Accomodations [Member] | Installment [Member]

Non-TDR Loan Modifications and Paycheck Protection Program ("PPP") due to COVID-19 [Abstract]

Number of loans with Covid 19 Accommodations | Loan

Non-TDR loan modifications, portfolio loans outstanding

$ 1,412

COVID-19 Accomodations [Member] | Mortgage Loans Serviced for Others [Member]

Non-TDR Loan Modifications and Paycheck Protection Program ("PPP") due to COVID-19 [Abstract]

Number of loans with Covid 19 Accommodations | Loan

^[1]

288

Non-TDR loan modifications, portfolio loans outstanding

^[1]

$ 42,897

COVID-19 Subsequent Accommodation [Member]

Non-TDR Loan Modifications and Paycheck Protection Program ("PPP") due to COVID-19 [Abstract]

Number of loans with Covid 19 Accommodations | Loan

^[2]

137

Non-TDR loan modifications, portfolio loans outstanding

^[2]

$ 16,212

COVID-19 Subsequent Accommodation [Member] | Commercial [Member]

Non-TDR Loan Modifications and Paycheck Protection Program ("PPP") due to COVID-19 [Abstract]

Number of loans with Covid 19 Accommodations | Loan

^[2]

Non-TDR loan modifications, portfolio loans outstanding

^[2]

$ 163

COVID-19 Subsequent Accommodation [Member] | Mortgage [Member]

Non-TDR Loan Modifications and Paycheck Protection Program ("PPP") due to COVID-19 [Abstract]

Number of loans with Covid 19 Accommodations | Loan

^[2]

100

Non-TDR loan modifications, portfolio loans outstanding

^[2]

$ 15,004

COVID-19 Subsequent Accommodation [Member] | Installment [Member]

Non-TDR Loan Modifications and Paycheck Protection Program ("PPP") due to COVID-19 [Abstract]

Number of loans with Covid 19 Accommodations | Loan

^[2]

Non-TDR loan modifications, portfolio loans outstanding

^[2]

$ 1,045

[1]	We have delegated authority from all investors to grant these deferrals on their behalf.
[2]	Subsequent accommodations are extensions of the original accommodations that were given as summarized in the paragraph above.

LOANS, Loan Ratings by Loan Class, Commercial (Details) - USD ($) $ in Thousands	Dec. 31, 2020	Dec. 31, 2019
Loan ratings/credit scores by loan class [Abstract]
Loans	$ 2,742,577	$ 2,733,370
Accrued interest included in total	8,899	8,347
Commercial [Member]
Loan ratings/credit scores by loan class [Abstract]
Loans	1,245,951	1,169,693
Accrued interest included in total	3,536	2,998
Commercial [Member] \| Non-Watch 1-6 [Member]
Loan ratings/credit scores by loan class [Abstract]
Loans	1,199,208	1,096,471
Accrued interest included in total	3,408	2,763
Commercial [Member] \| Watch 7-8 [Member]
Loan ratings/credit scores by loan class [Abstract]
Loans	38,743	67,420
Accrued interest included in total	105	205
Commercial [Member] \| Substandard Accrual 9 [Member]
Loan ratings/credit scores by loan class [Abstract]
Loans	6,613	4,502
Accrued interest included in total	23	30
Commercial [Member] \| Non Accrual 10-11 [Member]
Loan ratings/credit scores by loan class [Abstract]
Loans	1,387	1,300
Accrued interest included in total	0	0
Commercial [Member] \| Commercial and Industrial [Member]
Loan ratings/credit scores by loan class [Abstract]
Loans	676,319	564,871
Commercial [Member] \| Commercial and Industrial [Member] \| Non-Watch 1-6 [Member]
Loan ratings/credit scores by loan class [Abstract]
Loans	637,826	515,955
Commercial [Member] \| Commercial and Industrial [Member] \| Watch 7-8 [Member]
Loan ratings/credit scores by loan class [Abstract]
Loans	32,765	44,384
Commercial [Member] \| Commercial and Industrial [Member] \| Substandard Accrual 9 [Member]
Loan ratings/credit scores by loan class [Abstract]
Loans	4,341	3,967
Commercial [Member] \| Commercial and Industrial [Member] \| Non Accrual 10-11 [Member]
Loan ratings/credit scores by loan class [Abstract]
Loans	1,387	565
Commercial [Member] \| Commercial Real Estate [Member]
Loan ratings/credit scores by loan class [Abstract]
Loans	569,632	604,822
Commercial [Member] \| Commercial Real Estate [Member] \| Non-Watch 1-6 [Member]
Loan ratings/credit scores by loan class [Abstract]
Loans	561,382	580,516
Commercial [Member] \| Commercial Real Estate [Member] \| Watch 7-8 [Member]
Loan ratings/credit scores by loan class [Abstract]
Loans	5,978	23,036
Commercial [Member] \| Commercial Real Estate [Member] \| Substandard Accrual 9 [Member]
Loan ratings/credit scores by loan class [Abstract]
Loans	2,272	535
Commercial [Member] \| Commercial Real Estate [Member] \| Non Accrual 10-11 [Member]
Loan ratings/credit scores by loan class [Abstract]
Loans	$ 0	$ 735

LOANS, Loan Ratings by Loan Class, Mortgage and Installment Segments (Details) - USD ($)
$ in Thousands

Dec. 31, 2020

Dec. 31, 2019

Loan ratings/credit scores by loan class [Abstract]

$ 8,899

$ 8,347

Loan ratings/credit scores by loan class [Abstract]

^[1]

148,768

141,630

^[1]

445,611

474,044

^[1]

241,589

281,835

^[1]

115,484

119,052

^[1]

38,341

47,236

^[1]

15,934

17,061

^[1]

11,309

13,499

^[1]

3,068

3,972

^[1]

4,737

^[1]

1,020,104

1,103,066

Mortgage [Member] | 1-4 Family Owner Occupied - Jumbo [Member]

^[1]

4,178

4,155

Loan ratings/credit scores by loan class [Abstract]

^[1]

61,077

48,486

^[1]

223,177

198,491

^[1]

101,086

106,609

^[1]

40,296

31,553

^[1]

11,146

13,230

^[1]

514

^[1]

3,396

1,519

^[1]

641

^[1]

510

^[1]

440,178

401,553

Mortgage [Member] | 1-4 Family Owner Occupied - Non-jumbo [Member]

^[1]

1,301

1,139

Loan ratings/credit scores by loan class [Abstract]

^[1]

40,187

43,848

^[1]

70,642

111,521

^[1]

75,489

95,064

^[1]

44,344

51,174

^[1]

18,519

21,938

^[1]

11,021

12,308

^[1]

5,129

7,940

^[1]

2,242

2,208

^[1]

1,259

^[1]

267,573

347,260

Mortgage [Member] | 1-4 Family Non-owner Occupied [Member]

^[1]

1,641

1,662

Loan ratings/credit scores by loan class [Abstract]

^[1]

25,468

24,315

^[1]

82,124

84,656

^[1]

30,326

34,839

^[1]

13,182

13,995

^[1]

4,303

5,897

^[1]

2,388

1,863

^[1]

1,580

1,870

^[1]

405

533

^[1]

1,569

^[1]

159,776

169,537

Mortgage [Member] | 1-4 Family - 2nd Lien [Member]

^[1]

587

586

Loan ratings/credit scores by loan class [Abstract]

^[1]

12,490

13,905

^[1]

42,138

50,012

^[1]

22,962

30,697

^[1]

11,269

14,267

^[1]

2,703

4,097

^[1]

1,608

1,703

^[1]

1,012

1,281

^[1]

348

511

^[1]

^[1]

94,530

116,542

Mortgage [Member] | Resort Lending [Member]

^[1]

373

502

Loan ratings/credit scores by loan class [Abstract]

^[1]

9,546

11,076

^[1]

27,530

29,364

^[1]

11,726

14,626

^[1]

6,393

8,063

^[1]

1,670

2,074

^[1]

917

673

^[1]

192

889

^[1]

^[1]

1,330

^[1]

58,047

68,174

^[1]

276

266

Loan ratings/credit scores by loan class [Abstract]

^[1]

70,608

60,122

^[1]

257,091

244,127

^[1]

96,961

99,749

^[1]

40,121

41,269

^[1]

7,118

8,135

^[1]

2,511

3,422

^[1]

1,392

1,968

^[1]

210

615

^[1]

510

1,204

^[1]

476,522

460,611

Installment [Member] | Boat Lending [Member]

^[1]

1,185

1,194

Loan ratings/credit scores by loan class [Abstract]

^[1]

32,231

28,041

^[1]

123,689

118,380

^[1]

38,223

41,490

^[1]

10,189

11,485

^[1]

2,083

2,254

^[1]

661

946

^[1]

342

377

^[1]

309

^[1]

^[1]

207,513

203,282

Installment [Member] | Recreational Vehicle Lending [Member]

^[1]

572

490

Loan ratings/credit scores by loan class [Abstract]

^[1]

29,223

24,470

^[1]

95,890

88,164

^[1]

33,476

31,055

^[1]

8,794

7,267

^[1]

1,305

1,411

^[1]

551

592

^[1]

283

464

^[1]

^[1]

^[1]

169,574

153,445

Installment [Member] | Other [Member]

^[1]

457

378

Loan ratings/credit scores by loan class [Abstract]

^[1]

9,154

7,611

^[1]

37,512

37,583

^[1]

25,262

27,204

^[1]

21,138

22,517

^[1]

3,730

4,470

^[1]

1,299

1,884

^[1]

767

1,127

^[1]

284

^[1]

510

1,204

^[1]

99,435

103,884

Balance at beginning of year, net of valuation allowance

^[1]

$ 156

$ 326

[1]	Credit scores have been updated within the last twelve months.

LOANS, Loans Serviced for Others (Details) $ in Thousands	12 Months Ended
LOANS, Loans Serviced for Others (Details) $ in Thousands	Dec. 31, 2020 USD ($) qtr PSARate	Dec. 31, 2019 USD ($) PSARate	Dec. 31, 2018 USD ($)
Mortgage loans serviced for others [Abstract]
Mortgage loans serviced	$ 2,984,088	$ 2,581,166
Custodial deposit accounts	$ 40,500	29,900
Maximum number of consecutive quarterly losses recorded for profitability requirement \| qtr	4
Percentage of decline in net worth during the period	30.00%
Maximum percentage of decline in net worth for one consecutive quarter	25.00%
Maximum percentage of decline in net worth for two consecutive quarters	40.00%
Highest level of capital, Amount	$ 2,500
Highest level of capital	0.25%
Analysis of capitalized mortgage loan servicing rights [Abstract]
Balance at beginning of period	$ 19,171	21,400
Balance at beginning of period			$ 15,699
Originated servicing rights capitalized	13,957	7,303	4,977
Servicing rights acquired	0	0	3,047
Change in fair value due to price	(10,833)	(6,408)	191
Change in fair value due to pay downs	(5,391)	(3,124)	(2,514)
Balance at end of year	16,904	19,171	21,400
Loans sold and serviced that have had servicing rights capitalized	$ 2,982,833	$ 2,580,705	$ 2,333,081
Average coupon rate	3.77%	4.22%
Average servicing fee	0.257%	0.258%
Average discount rate	10.09%	10.14%
Average PSA Rate \| PSARate	348	250
Fannie Mae [Member]
Mortgage loans serviced for others [Abstract]
Mortgage loans serviced	$ 1,656,060	$ 1,449,935
Freddie Mac [Member]
Mortgage loans serviced for others [Abstract]
Mortgage loans serviced	1,095,877	852,123
Ginnie Mae [Member]
Mortgage loans serviced for others [Abstract]
Mortgage loans serviced	181,615	180,941
FHLB [Member]
Mortgage loans serviced for others [Abstract]
Mortgage loans serviced	39,294	69,149
Other [Member]
Mortgage loans serviced for others [Abstract]
Mortgage loans serviced	$ 11,242	$ 29,018

LOANS, Purchase Credit Impaired ("PCI") Loans (Details) - TCSB Bancorp, Inc. [Member] - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2020	Dec. 31, 2019
Carrying amount of loans that meet the criteria of ASC 310-30 treatment [Abstract]
Carrying amount	$ 1,025	$ 2,285
Allowance for loan losses	0	0
Carrying amount, net of allowance for loan losses	1,025	2,285
Accretable yield of PCI loans, or income expected to be collected [Roll Forward]
Balance at beginning of period	640	462
New loans purchased	0	0
Accretion of income	(280)	(187)
Reclassification from (to) nonaccretable difference	0	365
Disposals/other adjustments	0	0
Balance at end of period	360	640
Commercial [Member]
Carrying amount of loans that meet the criteria of ASC 310-30 treatment [Abstract]
Carrying amount	468	1,394
Mortgage [Member]
Carrying amount of loans that meet the criteria of ASC 310-30 treatment [Abstract]
Carrying amount	410	575
Installment [Member]
Carrying amount of loans that meet the criteria of ASC 310-30 treatment [Abstract]
Carrying amount	$ 147	$ 316

OTHER REAL ESTATE (Details) - USD ($)
$ in Thousands

12 Months Ended

Dec. 31, 2020

Dec. 31, 2019

Dec. 31, 2018

Other Real Estate [Roll Forward]

$ 1,715

^[1]

$ 1,178

^[1]

$ 1,628

Loans transferred to other real estate

332

^[1]

2,242

^[1]

1,510

Sales of other real estate

(1,161)

^[1]

(1,438)

^[1]

(1,822)

Additions to valuation allowance charged to expense

(148)

^[1]

(267)

^[1]

(138)

Balance at end of year, net of valuation allowance

^[1]

738

1,715

1,178

Other repossessed assets

150

Real Estate Owned Valuation Allowance [Roll Forward]

Balance at beginning of year

144

123

Additions charged to expense

148

267

138

Direct write-downs upon sale

(150)

(319)

(117)

Balance at end of year

$ 144

Foreclosed residential real estate

700

1,200

Mortgage loans in process of foreclosure

300

700

Other real estate and repossessed assets

$ 766

$ 1,865

[1]	Table excludes other repossessed assets totaling $0.03 million and $0.15 million at December 31, 2020 and 2019, respectively.

PROPERTY AND EQUIPMENT (Details) - USD ($) $ in Thousands	12 Months Ended
PROPERTY AND EQUIPMENT (Details) - USD ($) $ in Thousands	Dec. 31, 2020	Dec. 31, 2019	Dec. 31, 2018
Property, Plant and Equipment, Net [Abstract]
Property and equipment, gross	$ 146,833	$ 146,035
Accumulated depreciation and amortization	(110,706)	(107,624)
Property and equipment, net	36,127	38,411
Depreciation expense	5,300	5,200	$ 5,100
Land and Land Improvements [Member]
Property, Plant and Equipment, Net [Abstract]
Property and equipment, gross	17,083	17,478
Buildings [Member]
Property, Plant and Equipment, Net [Abstract]
Property and equipment, gross	57,208	57,363
Equipment [Member]
Property, Plant and Equipment, Net [Abstract]
Property and equipment, gross	$ 72,542	$ 71,194

GOODWILL AND OTHER INTANGIBLES (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2020	Dec. 31, 2019	Dec. 31, 2018
Amortized intangible assets - core deposits [Abstract]
Gross Carrying Amount	$ 11,916	$ 11,916
Accumulated Amortization	7,610	6,590
Unamortized intangible assets - goodwill [Abstract]
Gross Carrying Amount	28,300	28,300
Intangible amortization expense	1,000	$ 1,100	$ 1,000
Summary of estimated core deposit intangible amortization [Abstract]
2021	970
2022	785
2023	547
2024	516
2025	487
2026 and thereafter	1,001
Total	$ 4,306

DEPOSITS (Details) - USD ($) $ in Thousands	12 Months Ended
DEPOSITS (Details) - USD ($) $ in Thousands	Dec. 31, 2020	Dec. 31, 2019	Dec. 31, 2018
Summary of interest expense on deposits [Abstract]
Savings and interest-bearing checking	$ 2,264	$ 5,371	$ 4,146
Reciprocal	2,158	6,024	1,292
Time	7,073	7,148	5,343
Brokered time	1,171	4,882	3,697
Total	12,666	23,425	$ 14,478
Aggregate amount of time deposits of $250,000 or more	50,000	71,500
Time Deposits denominations amount	250	250
Summary of the maturity of time deposits [Abstract]
2021	370,497
2022	40,671
2023	16,717
2024	5,072
2025	5,457
2026 and thereafter	603
Total	439,017
Summary of reciprocal deposits [Abstract]
Demand	515,092	383,953
Money market	3,308	4,416
Time	37,785	42,658
Total	$ 556,185	$ 431,027

OTHER BORROWINGS (Details) - USD ($) $ in Thousands	12 Months Ended
OTHER BORROWINGS (Details) - USD ($) $ in Thousands	Dec. 31, 2020	Dec. 31, 2019	Dec. 31, 2018
Summary of other borrowings [Abstract]
Advances from the FHLB	$ 30,000	$ 63,640
Federal funds purchased	0	25,000
Other	12	6
Total	30,012	88,646
Federal Home Loan Banks [Abstract]
Federal home loan bank stock	8,600
Unused borrowing capacity with FHLB	772,800
Interest expense on FHLB advances	500	700	$ 1,000
FHLB advances prepaid	$ 0	0	0
FHLB stock as percentages of outstanding advances	4.50%
Federal Home Loan Bank, Advances, Fiscal Year Maturity [Abstract]
Total FHLB advances, Amount	$ 30,000	$ 63,640
Federal Home Loan Bank, Advances, Maturities Summary, Average Interest Rate of Amounts Due [Abstract]
Total FHLB advances, Rate	0.74%	1.47%
Short-term Debt [Abstract]
Interest expense on federal funds purchased	$ 10	$ 80	100
Available for sale and loans, pledged to secure other borrowings	$ 1,900,000
Minimum [Member]
Federal Home Loan Banks [Abstract]
Federal home loan bank, advances, interest rate	132.00%
FHLB stock as percentages of unpaid principal balance	0.75%
Maximum [Member]
Federal Home Loan Banks [Abstract]
Federal home loan bank, advances, interest rate	165.00%
Fixed-Rate Advances [Member]
Federal Home Loan Bank, Advances, Fiscal Year Maturity [Abstract]
2020		28,645
2022	$ 0	4,995
2026 and thereafter	$ 30,000	$ 30,000
Federal Home Loan Bank, Advances, Maturities Summary, Average Interest Rate of Amounts Due [Abstract]
2020, Rate		2.19%
2022, Rate	0.00%	1.69%
2026 and thereafter, Rate	0.74%	0.74%
Federal Reserve Bank Advances [Member]
Short-term Debt [Abstract]
Borrowings	$ 0	$ 0
Average borrowings	1,546	$ 305	$ 3
Unused borrowing capacity	$ 492,000

SUBORDINATED DEBT AND DEBENTURES, Subordinated Debt (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2020	May 31, 2020	Dec. 31, 2019
Subordinated Debt [Abstract]
Subordinated debt	$ 39,281		$ 0
Subordinated Debt [Member]
Subordinated Debt [Abstract]
Subordinated notes issued		$ 40,000
Maturity period	10 years
Maturity date	May 31, 2030
Call option period	5 years
Coupon rate		5.95%
Fixed coupon rate percentage, period	5 years
Subordinated debt	$ 39,300
Unamortized deferred issuance costs	$ 700
Subordinated Debt [Member] \| SOFR [Member]
Subordinated Debt [Abstract]
Basis spread on variable rate	5.825%

SUBORDINATED DEBT AND DEBENTURES, Subordinated Debentures (Details) $ in Thousands	12 Months Ended
	Dec. 31, 2020 USD ($) qtr	Dec. 31, 2019 USD ($)	Mar. 31, 2018 USD ($)
SUBORDINATED DEBT AND DEBENTURES [Abstract]
Trust preferred securities	$ 38,300	$ 38,200
Summary of information regarding subordinated debentures [Abstract]
Subordinated Debentures	$ 39,524	39,456
Summary of subordinated debentures and trust preferred securities [Abstract]
Distribution deferral period, maximum quarters \| qtr	20
IBC Capital Finance III [Member]
Summary of information regarding subordinated debentures [Abstract]
Issue Date	May 30, 2007
Summary of subordinated debentures and trust preferred securities [Abstract]
Maturity Date	Jul. 30, 2037
Interest Rate Spread	1.60%
First Permitted Redemption Date	Jul. 30, 2012
IBC Capital Finance III [Member] \| LIBOR [Member]
Summary of subordinated debentures and trust preferred securities [Abstract]
Term of Variable Rate	3 months
IBC Capital Finance IV [Member]
Summary of information regarding subordinated debentures [Abstract]
Issue Date	Sep. 30, 2007
Summary of subordinated debentures and trust preferred securities [Abstract]
Maturity Date	Sep. 15, 2037
Interest Rate Spread	2.85%
First Permitted Redemption Date	Sep. 15, 2012
IBC Capital Finance IV [Member] \| LIBOR [Member]
Summary of subordinated debentures and trust preferred securities [Abstract]
Term of Variable Rate	3 months
Midwest Guaranty Trust I [Member]
Summary of information regarding subordinated debentures [Abstract]
Issue Date	Nov. 30, 2002
Summary of subordinated debentures and trust preferred securities [Abstract]
Maturity Date	Nov. 07, 2032
Interest Rate Spread	3.45%
First Permitted Redemption Date	Nov. 07, 2007
Midwest Guaranty Trust I [Member] \| LIBOR [Member]
Summary of subordinated debentures and trust preferred securities [Abstract]
Term of Variable Rate	3 months
TCSB Statutory Trust I [Member]
Summary of information regarding subordinated debentures [Abstract]
Issue Date	Mar. 31, 2005
Summary of subordinated debentures and trust preferred securities [Abstract]
Maturity Date	Mar. 17, 2035
Interest Rate Spread	2.20%
First Permitted Redemption Date	Mar. 17, 2010
TCSB Statutory Trust I [Member] \| LIBOR [Member]
Summary of subordinated debentures and trust preferred securities [Abstract]
Term of Variable Rate	3 months
Subordinated Debentures Subject to Mandatory Redemption [Member]
Summary of information regarding subordinated debentures [Abstract]
Subordinated Debentures	$ 39,524	39,456
Subordinated Debentures Subject to Mandatory Redemption [Member] \| IBC Capital Finance III [Member]
Summary of information regarding subordinated debentures [Abstract]
Subordinated Debentures	12,372	12,372
Subordinated Debentures Subject to Mandatory Redemption [Member] \| IBC Capital Finance IV [Member]
Summary of information regarding subordinated debentures [Abstract]
Subordinated Debentures	15,465	15,465
Subordinated Debentures Subject to Mandatory Redemption [Member] \| Midwest Guaranty Trust I [Member]
Summary of information regarding subordinated debentures [Abstract]
Subordinated Debentures	7,732	7,732
Subordinated Debentures Subject to Mandatory Redemption [Member] \| TCSB Statutory Trust I [Member]
Summary of information regarding subordinated debentures [Abstract]
Subordinated Debentures	5,155	5,155
Discount	(1,200)	(1,268)	$ (1,400)
Trust Preferred Securities Subject to Mandatory Redemption [Member]
Summary of information regarding subordinated debentures [Abstract]
Trust Preferred Securities Issued	38,300	38,232
Trust Preferred Securities Subject to Mandatory Redemption [Member] \| IBC Capital Finance III [Member]
Summary of information regarding subordinated debentures [Abstract]
Trust Preferred Securities Issued	12,000	12,000
Trust Preferred Securities Subject to Mandatory Redemption [Member] \| IBC Capital Finance IV [Member]
Summary of information regarding subordinated debentures [Abstract]
Trust Preferred Securities Issued	15,000	15,000
Trust Preferred Securities Subject to Mandatory Redemption [Member] \| Midwest Guaranty Trust I [Member]
Summary of information regarding subordinated debentures [Abstract]
Trust Preferred Securities Issued	7,500	7,500
Trust Preferred Securities Subject to Mandatory Redemption [Member] \| TCSB Statutory Trust I [Member]
Summary of information regarding subordinated debentures [Abstract]
Trust Preferred Securities Issued	5,000	5,000
Discount	(1,200)	(1,268)
Common Stock Subject to Mandatory Redemption [Member]
Summary of information regarding subordinated debentures [Abstract]
Common Stock Issued	1,224	1,224
Common Stock Subject to Mandatory Redemption [Member] \| IBC Capital Finance III [Member]
Summary of information regarding subordinated debentures [Abstract]
Common Stock Issued	372	372
Common Stock Subject to Mandatory Redemption [Member] \| IBC Capital Finance IV [Member]
Summary of information regarding subordinated debentures [Abstract]
Common Stock Issued	465	465
Common Stock Subject to Mandatory Redemption [Member] \| Midwest Guaranty Trust I [Member]
Summary of information regarding subordinated debentures [Abstract]
Common Stock Issued	232	232
Common Stock Subject to Mandatory Redemption [Member] \| TCSB Statutory Trust I [Member]
Summary of information regarding subordinated debentures [Abstract]
Common Stock Issued	155	155
Discount	$ 0	$ 0

COMMITMENTS AND CONTINGENT LIABILITIES (Details) $ / shares in Units, $ in Thousands	12 Months Ended
	Dec. 31, 2020 USD ($) shares	Dec. 31, 2019 USD ($)	Dec. 31, 2018 USD ($)	Feb. 26, 2021 $ / shares
Fair Value, Off-balance Sheet Risks [Abstract]
Loss reimbursement on sold loans	$ 200	$ 230	$ 10
Loss reimbursement reserve on sold mortgage loans	$ 1,000	900
VISA Class A Common Stock [Member]
Investment Owned [Abstract]
Current conversion ratio	1.6228
VISA Class A Common Stock [Member] \| Subsequent Event [Member]
Investment Owned [Abstract]
Closing price (in dollars per share) \| $ / shares				$ 212.39
VISA Class B Common Stock [Member]
Investment Owned [Abstract]
Number of shares owned (in shares) \| shares	12,566
Current value of shares owned	$ 4,300
Commitments to Extend Credit [Member]
Fair Value, Off-balance Sheet Risks [Abstract]
Financial instruments risk represented by contract amounts	644,815	582,457
Standby Letters of Credit [Member]
Fair Value, Off-balance Sheet Risks [Abstract]
Financial instruments risk represented by contract amounts	$ 9,361	$ 7,207
Standby Letters of Credit [Member] \| Minimum [Member]
Fair Value, Off-balance Sheet Risks [Abstract]
Variable interest rate	2.50%
Standby Letters of Credit [Member] \| Maximum [Member]
Fair Value, Off-balance Sheet Risks [Abstract]
Variable interest rate	12.00%

SHAREHOLDERS' EQUITY AND INCOME PER COMMON SHARE, Shareholders' Equity (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2020	Dec. 31, 2019	Dec. 31, 2018	Jun. 30, 2019
Share Repurchase Plan [Abstract]
Stock repurchased (in shares)	708,956	1,204,688	587,969
Stock repurchased	$ 14,231	$ 26,284	$ 12,681
Common Stock [Member]
Share Repurchase Plan [Abstract]
Share repurchase plan percentage of shares authorized to be repurchased	5.00%	5.00%	5.00%
Number of shares authorized for repurchase (in shares)				300,000
Stock repurchased (in shares)	708,956	1,204,688	587,969
Stock repurchased	$ 14,231	$ 26,284	$ 12,681

SHAREHOLDERS' EQUITY AND INCOME PER COMMON SHARE, Earnings Per Share Reconciliation (Details) - USD ($)
$ / shares in Units, shares in Thousands, $ in Thousands

12 Months Ended

Dec. 31, 2020

Dec. 31, 2019

Dec. 31, 2018

Earnings Per Share Reconciliation [Abstract]

Net income

$ 56,152

$ 46,435

$ 39,839

Weighted average shares outstanding (in shares)

^[1]

21,977

22,894

23,412

Stock units for deferred compensation plan for non-employee directors (in shares)

121

132

128

Effect of stock options (in shares)

115

176

Performance share units (in shares)

Weighted average shares outstanding for calculation of diluted earnings per share (in shares)

22,221

23,183

23,769

Net income per common share [Abstract]

Basic (in dollars per share)

^[1]

$ 2.56

$ 2.03

$ 1.70

Diluted (in dollars per share)

$ 2.53

$ 2.00

$ 1.68

Stock Options [Member]

Antidilutive Securities [Abstract]

Antidilutive shares excluded from computation of diluted loss per share (in shares)

[1]	Basic net income per common share includes weighted average common shares outstanding during the period and participating share awards.

INCOME TAX (Details) - USD ($) $ in Thousands	12 Months Ended
INCOME TAX (Details) - USD ($) $ in Thousands	Dec. 31, 2020	Dec. 31, 2019	Dec. 31, 2018
Income tax expense [Abstract]
Current expense	$ 15,459	$ 10,237	$ 0
Deferred expense (benefit)	(2,130)	1,088	9,294
Income tax expense	$ 13,329	$ 11,325	$ 9,294
Statutory federal income tax rate	21.00%	21.00%	21.00%
Reconciliation of income tax expense [Abstract]
Statutory rate applied to income before income tax	$ 14,591	$ 12,130	$ 10,318
Tax-exempt income	(690)	(375)	(383)
Unrecognized tax benefit	(206)	(134)	(162)
Share-based compensation	(204)	(204)	(367)
Bank owned life insurance	(196)	(233)	(229)
Non-deductible meals, entertainment and memberships	57	86	85
Other, net	(23)	55	32
Income tax expense	13,329	11,325	9,294
Deferred tax assets [Abstract]
Allowance for loan losses	7,363	5,355
Lease liabilities	1,652	1,744
Property and equipment	1,047	1,528
Share based compensation	742	808
Reserve for unfunded lending commitments	379	324
Deferred compensation	321	285
Loss reimbursement on sold loans reserve	214	185
Non accrual loan interest income	203	173
Other than temporary impairment charge on securities available for sale	144	147
Vehicle service contract counterparty contingency reserve	26	38
Unrealized loss on derivative financial instruments	0	459
Gross deferred tax assets	12,091	11,046
Deferred tax liabilities [Abstract]
Capitalized mortgage loan servicing rights	3,550	4,026
Deferred loan fees	1,901	1,852
Lease right of use asset	1,606	1,739
Unrealized gain on securities available for sale	4,206	994
Purchase premiums, net	509	293
Federal Home Loan Bank stock	27	27
Other	17	43
Gross deferred tax liabilities	11,816	8,974
Deferred tax assets, net	275	2,072
Changes in unrecognized tax benefits [Roll Forward]
Balance at beginning of year	438	588	724
Additions based on tax positions related to the current year	15	20	26
Reductions due to the statute of limitations	(273)	(170)	(162)
Reductions due to settlements	0	0	0
Balance at end of year	180	438	588
Unrecognized tax benefits of effective tax rate	40
Penalties and interest expense	0	0	0
Penalties and interest accrued	$ 0	$ 0	$ 0
Open tax year	2017

SHARE BASED COMPENSATION AND BENEFIT PLANS (Details) - USD ($) shares in Thousands, $ in Thousands	12 Months Ended
	Dec. 31, 2020	Dec. 31, 2019	Dec. 31, 2018
Share Based Compensation [Abstract]
Number of additional shares approved for grant (in shares)	400
Shares issued on deferral basis credited percentage of current value	90.00%
Total compensation cost not yet recognized	$ 1,700
Total compensation cost not yet recognized, period for recognition	1 year 8 months 12 days
Long-Term Incentive Plan [Member]
Share Based Compensation [Abstract]
Total compensation expense recognized	$ 1,600	$ 1,600	$ 1,500
Tax benefit relating to compensation expense recognized	$ 300	$ 300	$ 300
Restricted Stock [Member] \| Long-Term Incentive Plan [Member]
Share Based Compensation [Abstract]
Number of restricted stock units issued to executive officers (in shares)		10	2
Vesting period		3 years	3 years
Non-Employee Directors [Member]
Share Based Compensation [Abstract]
Number of additional shares approved for grant (in shares)	100
Total compensation expense recognized	$ 400	$ 300	$ 200
Tax benefit relating to compensation expense recognized	$ 70	$ 50	$ 40
Executive Officers [Member] \| Restricted Stock [Member] \| Long-Term Incentive Plan [Member]
Share Based Compensation [Abstract]
Number of restricted stock units issued to executive officers (in shares)	60	60	50
Vesting period	3 years	3 years
Executive Officers [Member] \| Performance Stock Units [Member] \| Long-Term Incentive Plan [Member]
Share Based Compensation [Abstract]
Number of restricted stock units issued to executive officers (in shares)	20	20	20
Vesting period	3 years	3 years
Directors [Member]
Share Based Compensation [Abstract]
Shares issues as retainer fees (in shares)	20	10	10

SHARE BASED COMPENSATION AND BENEFIT PLANS, Outstanding Stock Option Grants and Related Transactions (Details) - Stock Options [Member] $ / shares in Units, $ in Thousands	12 Months Ended
	Dec. 31, 2020 USD ($) $ / shares shares
Number of Shares [Roll Forward]
Outstanding, beginning balance (in shares)	138,506
Granted (in shares)	0
Exercised (in shares)	(17,317)
Forfeited (in shares)	0
Expired (in shares)	0
Outstanding, ending balance (in shares)	121,189
Vested and expected to vest, period end (in shares)	121,189
Exercisable, period end (in shares)	121,189
Average Exercise Price [Roll Forward]
Outstanding, beginning balance (in dollars per share) \| $ / shares	$ 4.62
Exercised (in dollars per share) \| $ / shares	3.27
Outstanding, ending balance (in dollars per share) \| $ / shares	4.81
Vested and expected to vest, period end (in dollars per share) \| $ / shares	4.81
Exercisable, period end (in dollars per share) \| $ / shares	$ 4.81
Weighted-Average Remaining Contractual Term [Abstract]
Outstanding, weighted-average remaining contractual term	2 years 1 month 6 days
Vested and expected to vest, weighted-average remaining contractual term	2 years 1 month 6 days
Exercisable, weighted-average remaining contractual term	2 years 1 month 6 days
Aggregate Intrinsic Value [Abstract]
Outstanding, aggregate intrinsic value \| $	$ 1,658
Vested and expected to vest, aggregate intrinsic value \| $	1,658
Exercisable, aggregate intrinsic value \| $	$ 1,658

SHARE BASED COMPENSATION AND BENEFIT PLANS, Outstanding Non-vested Stock and Related Transactions (Details) - Non-vested Restricted Stock and PSU's [Member]	12 Months Ended
	Dec. 31, 2020 $ / shares shares
Number of Shares [Roll Forward]
Outstanding, beginning balance (in shares) \| shares	245,726
Granted (in shares) \| shares	76,893
Vested (in shares) \| shares	(94,342)
Forfeited (in shares) \| shares	(21,160)
Outstanding, ending balance (in shares) \| shares	207,117
Weighted-Average Grant Date Fair Value [Roll Forward]
Outstanding, beginning balance (in dollars per share) \| $ / shares	$ 21.72
Granted (in dollars per share) \| $ / shares	22.46
Vested (in dollars per share) \| $ / shares	19.96
Forfeited (in dollars per share) \| $ / shares	22.63
Outstanding, ending balance (in dollars per share) \| $ / shares	$ 22.70

SHARE BASED COMPENSATION AND BENEFIT PLANS, Options Exercised During the Periods (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2020	Dec. 31, 2019	Dec. 31, 2018
Information regarding options exercised [Abstract]
Employee matching contribution, percentage	50.00%	50.00%	50.00%
Maximum contribution of employees' eligible wages	8.00%	8.00%	8.00%
Maximum matching contribution, percent	6.00%
Employee stock ownership plan (ESOP), contributions	2.00%	2.00%	2.00%
401(k) and employee stock ownership plans amount expensed	$ 3,200	$ 2,600	$ 2,300
Performance-based compensation expense	15,700	9,500	9,800
Health care and life insurance expense	4,800	5,700	5,200
Stock Options [Member]
Information regarding options exercised [Abstract]
Intrinsic value	293	897	2,333
Cash proceeds received	57	706	1,420
Tax benefit realized	$ 61	$ 188	$ 490

OTHER NON-INTEREST INCOME (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2020	Dec. 31, 2019	Dec. 31, 2018
OTHER NON-INTEREST INCOME [Abstract]
Investment and insurance commissions	$ 1,971	$ 1,658	$ 1,971
ATM fees	1,197	1,403	1,457
Bank owned life insurance	910	1,111	970
Other	3,443	5,110	4,362
Total	$ 7,521	$ 9,282	$ 8,760

DERIVATIVE FINANCIAL INSTRUMENTS (Details) - USD ($) $ in Thousands	3 Months Ended		12 Months Ended
	Sep. 30, 2020	Mar. 31, 2020	Dec. 31, 2020	Dec. 31, 2019
Fair value of derivative instruments, balance sheet location [Abstract]
Asset Derivatives			$ 16,782	$ 5,464
Liability Derivatives			11,754	4,402
Interest-Rate Cap Agreements [Member]
Derivative financial instrument according to type of hedge [Abstract]
Unrealized loss on derivative instrument to be reclassified into earnings	$ (500)	$ (2,000)
Fair Value Hedge Designation [Member]
Derivative financial instrument according to type of hedge [Abstract]
Notional Amount			$ 49,038
Average Maturity			7 years 3 months 18 days
Fair Value			$ (761)
Cash Flow Hedge Designation [Member]
Derivative financial instrument according to type of hedge [Abstract]
Notional Amount				$ 175,000
Average Maturity				2 years 6 months
Fair Value				$ 40
Cash Flow Hedge Designation [Member] \| Interest-Rate Cap Agreements [Member]
Derivative financial instrument according to type of hedge [Abstract]
Notional Amount				$ 150,000
Average Maturity				2 years 7 months 6 days
Fair Value				$ 214
Designated as Hedging Instrument [Member]
Fair value of derivative instruments, balance sheet location [Abstract]
Asset Derivatives			15	214
Liability Derivatives			776	416
No Hedge Designation [Member]
Derivative financial instrument according to type of hedge [Abstract]
Notional Amount			$ 815,576	$ 458,279
Average Maturity			2 years	3 years 8 months 12 days
Fair Value			$ 5,789	$ 1,264
Fair value of derivative instruments, balance sheet location [Abstract]
Asset Derivatives			16,767	5,250
Liability Derivatives			10,978	3,986
No Hedge Designation [Member] \| Rate-Lock Mortgage Loan Commitments [Member]
Derivative financial instrument according to type of hedge [Abstract]
Notional Amount			$ 168,816	$ 49,268
Average Maturity			1 month 6 days	1 month 6 days
Fair Value			$ 7,020	$ 1,412
No Hedge Designation [Member] \| Mandatory Commitments to Sell Mortgage Loans [Member]
Derivative financial instrument according to type of hedge [Abstract]
Notional Amount			$ 186,092	$ 95,363
Average Maturity			1 month 6 days	1 month 6 days
Fair Value			$ (941)	$ (150)
No Hedge Designation [Member] \| Interest-Rate Cap Agreements [Member]
Derivative financial instrument according to type of hedge [Abstract]
Notional Amount			$ 135,000
Average Maturity			1 year 9 months 18 days
Fair Value			$ 5
No Hedge Designation [Member] \| Purchased Options [Member]
Derivative financial instrument according to type of hedge [Abstract]
Notional Amount			$ 2,908	$ 2,908
Average Maturity			6 months	1 year 6 months
Fair Value			$ 42	$ 141
No Hedge Designation [Member] \| Written Options [Member]
Derivative financial instrument according to type of hedge [Abstract]
Notional Amount			$ 2,848	$ 2,848
Average Maturity			6 months	1 year 6 months
Fair Value			$ (42)	$ (139)
Fixed Income Interest Rate [Member] \| Fair Value Hedge Designation [Member] \| Interest Rate Swap [Member]
Derivative financial instrument according to type of hedge [Abstract]
Notional Amount			$ 7,088	$ 7,117
Average Maturity			8 years 4 months 24 days	9 years 4 months 24 days
Fair Value			$ (776)	$ (242)
Fixed Income Interest Rate [Member] \| Fair Value Hedge Designation [Member] \| Interest Rate Swap [Member]
Derivative financial instrument according to type of hedge [Abstract]
Notional Amount			$ 41,950
Average Maturity			7 years 1 month 6 days
Fair Value			$ 15
Fixed Income Interest Rate [Member] \| Cash Flow Hedge Designation [Member] \| Interest Rate Swap [Member]
Derivative financial instrument according to type of hedge [Abstract]
Notional Amount				$ 25,000
Average Maturity				1 year 7 months 6 days
Fair Value				$ (174)
Fixed Income Interest Rate [Member] \| No Hedge Designation [Member] \| Interest Rate Swap [Member]
Derivative financial instrument according to type of hedge [Abstract]
Notional Amount			$ 147,456	$ 153,946
Average Maturity			4 years 6 months	5 years 6 months
Fair Value			$ (9,700)	$ (3,641)
Fixed Income Interest Rate [Member] \| No Hedge Designation [Member] \| Interest Rate Swap [Member]
Derivative financial instrument according to type of hedge [Abstract]
Notional Amount			$ 25,000
Average Maturity			7 months 6 days
Fair Value			$ (295)
Variable Income Interest Rate [Member] \| No Hedge Designation [Member] \| Interest Rate Swap [Member]
Derivative financial instrument according to type of hedge [Abstract]
Notional Amount			$ 147,456	$ 153,946
Average Maturity			4 years 6 months	5 years 6 months
Fair Value			$ 9,700	$ 3,641
Other Assets [Member] \| Designated as Hedging Instrument [Member] \| Interest-Rate Cap Agreements [Member]
Fair value of derivative instruments, balance sheet location [Abstract]
Asset Derivatives			0	214
Other Assets [Member] \| No Hedge Designation [Member] \| Rate-Lock Mortgage Loan Commitments [Member]
Fair value of derivative instruments, balance sheet location [Abstract]
Asset Derivatives			7,020	1,412
Other Assets [Member] \| No Hedge Designation [Member] \| Mandatory Commitments to Sell Mortgage Loans [Member]
Fair value of derivative instruments, balance sheet location [Abstract]
Asset Derivatives			0	0
Other Assets [Member] \| No Hedge Designation [Member] \| Interest-Rate Cap Agreements [Member]
Fair value of derivative instruments, balance sheet location [Abstract]
Asset Derivatives			5	0
Other Assets [Member] \| No Hedge Designation [Member] \| Purchased Options [Member]
Fair value of derivative instruments, balance sheet location [Abstract]
Asset Derivatives			42	141
Other Assets [Member] \| No Hedge Designation [Member] \| Written Options [Member]
Fair value of derivative instruments, balance sheet location [Abstract]
Asset Derivatives			0	0
Other Assets [Member] \| Fixed Income Interest Rate [Member] \| Designated as Hedging Instrument [Member] \| Interest Rate Swap [Member]
Fair value of derivative instruments, balance sheet location [Abstract]
Asset Derivatives			15	0
Other Assets [Member] \| Fixed Income Interest Rate [Member] \| No Hedge Designation [Member] \| Interest Rate Swap [Member]
Fair value of derivative instruments, balance sheet location [Abstract]
Asset Derivatives			0	28
Other Assets [Member] \| Fixed Income Interest Rate [Member] \| No Hedge Designation [Member] \| Interest Rate Swap [Member]
Fair value of derivative instruments, balance sheet location [Abstract]
Asset Derivatives			0	0
Other Assets [Member] \| Variable Income Interest Rate [Member] \| No Hedge Designation [Member] \| Interest Rate Swap [Member]
Fair value of derivative instruments, balance sheet location [Abstract]
Asset Derivatives			9,700	3,669
Other Liabilities [Member] \| Designated as Hedging Instrument [Member] \| Interest Rate Swap [Member]
Fair value of derivative instruments, balance sheet location [Abstract]
Liability Derivatives			776	416
Other Liabilities [Member] \| Designated as Hedging Instrument [Member] \| Interest-Rate Cap Agreements [Member]
Fair value of derivative instruments, balance sheet location [Abstract]
Liability Derivatives			0	0
Other Liabilities [Member] \| No Hedge Designation [Member] \| Rate-Lock Mortgage Loan Commitments [Member]
Fair value of derivative instruments, balance sheet location [Abstract]
Liability Derivatives			0	0
Other Liabilities [Member] \| No Hedge Designation [Member] \| Mandatory Commitments to Sell Mortgage Loans [Member]
Fair value of derivative instruments, balance sheet location [Abstract]
Liability Derivatives			941	150
Other Liabilities [Member] \| No Hedge Designation [Member] \| Interest-Rate Cap Agreements [Member]
Fair value of derivative instruments, balance sheet location [Abstract]
Liability Derivatives			0	0
Other Liabilities [Member] \| No Hedge Designation [Member] \| Purchased Options [Member]
Fair value of derivative instruments, balance sheet location [Abstract]
Liability Derivatives			0	0
Other Liabilities [Member] \| No Hedge Designation [Member] \| Written Options [Member]
Fair value of derivative instruments, balance sheet location [Abstract]
Liability Derivatives			42	139
Other Liabilities [Member] \| Fixed Income Interest Rate [Member] \| No Hedge Designation [Member] \| Interest Rate Swap [Member]
Fair value of derivative instruments, balance sheet location [Abstract]
Liability Derivatives			9,700	3,669
Other Liabilities [Member] \| Fixed Income Interest Rate [Member] \| No Hedge Designation [Member] \| Interest Rate Swap [Member]
Fair value of derivative instruments, balance sheet location [Abstract]
Liability Derivatives			295	0
Other Liabilities [Member] \| Variable Income Interest Rate [Member] \| No Hedge Designation [Member] \| Interest Rate Swap [Member]
Fair value of derivative instruments, balance sheet location [Abstract]
Liability Derivatives			$ 0	$ 28

DERIVATIVE FINANCIAL INSTRUMENTS, Effect on Statement of Operations (Details) - USD ($)
$ in Thousands

12 Months Ended

Dec. 31, 2020

Dec. 31, 2019

Dec. 31, 2018

Effect of derivative financial instruments on the consolidated financial statements of operations [Abstract]

Gain (Loss) Recognized in Other Comprehensive Income (Loss) (Effective Portion)

$ (354)

$ (1,603)

$ (262)

Fair Value Hedge Designation [Member]

Effect of derivative financial instruments on the consolidated financial statements of operations [Abstract]

Fair Value Hedge Designation [Member] | Interest Rate Swap [Member] | Interest and Fees on Loans [Member]

^[1]

(519)

(242)

Effect of derivative financial instruments on the consolidated financial statements of operations [Abstract]

Fair Value Hedge Designation [Member] | Interest Rate Swap [Member] | Interest on Securities Available for Sale - Tax-exempt [Member]

^[1]

(534)

(242)

Effect of derivative financial instruments on the consolidated financial statements of operations [Abstract]

Cash Flow Hedge Designation [Member]

^[1]

Effect of derivative financial instruments on the consolidated financial statements of operations [Abstract]

Gain (Loss) Recognized in Other Comprehensive Income (Loss) (Effective Portion)

(354)

(1,603)

(262)

Gain (Loss) Reclassified from Accumulated Other Comprehensive Income (Loss) into Income (Effective Portion)

(2,539)

425

237

Cash Flow Hedge Designation [Member] | Interest-Rate Cap Agreements [Member]

^[1]

(12)

Effect of derivative financial instruments on the consolidated financial statements of operations [Abstract]

Gain (Loss) Recognized in Other Comprehensive Income (Loss) (Effective Portion)

125

(1,211)

(340)

Cash Flow Hedge Designation [Member] | Interest-Rate Cap Agreements [Member] | Interest Expense [Member]

Effect of derivative financial instruments on the consolidated financial statements of operations [Abstract]

Gain (Loss) Reclassified from Accumulated Other Comprehensive Income (Loss) into Income (Effective Portion)

(1,885)

363

206

Cash Flow Hedge Designation [Member] | Fixed Income Interest Rate [Member] | Interest Rate Swap [Member]

^[1]

Effect of derivative financial instruments on the consolidated financial statements of operations [Abstract]

Gain (Loss) Recognized in Other Comprehensive Income (Loss) (Effective Portion)

(479)

(392)

Cash Flow Hedge Designation [Member] | Fixed Income Interest Rate [Member] | Interest Rate Swap [Member] | Interest Expense [Member]

Effect of derivative financial instruments on the consolidated financial statements of operations [Abstract]

Gain (Loss) Reclassified from Accumulated Other Comprehensive Income (Loss) into Income (Effective Portion)

(654)

No Hedge Designation [Member]

^[1]

(12)

Effect of derivative financial instruments on the consolidated financial statements of operations [Abstract]

No Hedge Designation [Member] | Rate-Lock Mortgage Loan Commitments [Member] | Net Gains on Mortgage Loans [Member]

^[1]

4,989

960

(263)

Effect of derivative financial instruments on the consolidated financial statements of operations [Abstract]

No Hedge Designation [Member] | Mandatory Commitments to Sell Mortgage Loans [Member] | Net Gains on Mortgage Loans [Member]

^[1]

5,608

725

157

Effect of derivative financial instruments on the consolidated financial statements of operations [Abstract]

No Hedge Designation [Member] | Interest-Rate Cap Agreements [Member] | Interest Expense [Member]

^[1]

(791)

233

(420)

Effect of derivative financial instruments on the consolidated financial statements of operations [Abstract]

No Hedge Designation [Member] | Purchased Options [Member] | Interest Expense [Member]

^[1]

(57)

Effect of derivative financial instruments on the consolidated financial statements of operations [Abstract]

No Hedge Designation [Member] | Written Options [Member] | Interest Expense [Member]

^[1]

(99)

(206)

Effect of derivative financial instruments on the consolidated financial statements of operations [Abstract]

No Hedge Designation [Member] | Fixed Income Interest Rate [Member] | Interest Rate Swap [Member] | Interest Income [Member]

^[1]

(23)

206

Effect of derivative financial instruments on the consolidated financial statements of operations [Abstract]

No Hedge Designation [Member] | Fixed Income Interest Rate [Member] | Interest Rate Swap [Member] | Interest Expense [Member]

^[1]

(6,059)

(4,046)

113

Effect of derivative financial instruments on the consolidated financial statements of operations [Abstract]

No Hedge Designation [Member] | Variable Income Interest Rate [Member] | Interest Rate Swap [Member] | Interest Income [Member]

^[1]

231

Effect of derivative financial instruments on the consolidated financial statements of operations [Abstract]

Components of operating leases [Abstract]

^[1]

$ 6,059

$ 4,046

$ (113)

[1]	For cash flow hedges, this location and amount refers to the ineffective portion.

RELATED PARTY TRANSACTIONS (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2020	Dec. 31, 2019
Summary of loans and leases receivable [Roll Forward]
Balance at beginning of year	$ 13,077	$ 14,205
New loans and advances	417	713
Repayments	(11,078)	(1,841)
Balance at end of year	2,416	13,077
Directors and executive officers deposit	$ 2,000	$ 2,000
Minimum [Member]
Related Party Transaction [Abstract]
Related party entity ownership percentage	10.00%

LEASES (Details) - USD ($)
$ in Thousands

12 Months Ended

Dec. 31, 2020

Dec. 31, 2019

Operating lease cost

$ 1,780

$ 2,217

Variable lease cost

142

Short-term lease cost

Supplemental balance sheet information related to operating leases [Abstract]

1,885

2,378

Lease right of use asset

^[1]

$ 7,646

$ 8,282

Operating Lease, Right-of-Use Asset, Statement of Financial Position [Extensible List]

us-gaap:OtherAssets

Lease liabilities

^[2]

$ 7,868

$ 8,304

Operating Lease, Liability, Statement of Financial Position [Extensible List]

us-gaap:OtherLiabilities

Weighted average remaining lease term (years)

7 years 1 month 13 days

7 years 5 months 19 days

Weighted average discount rate

2.40%

2.80%

Maturities of lease liabilities [Abstract]

$ 1,669

1,489

1,222

815

809

2,525

8,529

Less imputed interest

(661)

Tier 1 capital to average assets [Abstract]

^[2]

$ 7,868

$ 8,304

[1]	Included in Accrued income and other assets in our Consolidated Statements of Financial Condition.
[2]	Included in Accrued expenses and other liabilities in our Consolidated Statements of Financial Condition.

CONCENTRATIONS OF CREDIT RISK (Details) $ in Millions	Dec. 31, 2020 USD ($)
Residential Real Estate [Member]
Concentration of Risk [Abstract]
Concentration of risk loans receivable	$ 930.9
Construction and Development Loans [Member]
Concentration of Risk [Abstract]
Concentration of risk loans receivable	232.7
Lessors of Nonresidential Real Estate [Member]
Concentration of Risk [Abstract]
Concentration of risk loans receivable	301.8
Lessors of Residential Real Estate [Member]
Concentration of Risk [Abstract]
Concentration of risk loans receivable	119.6
Construction [Member]
Concentration of Risk [Abstract]
Concentration of risk loans receivable	130.4
Manufacturing [Member]
Concentration of Risk [Abstract]
Concentration of risk loans receivable	99.4
Accommodation and Food Services [Member]
Concentration of Risk [Abstract]
Concentration of risk loans receivable	99.1
Health Care and Social Assistance [Member]
Concentration of Risk [Abstract]
Concentration of risk loans receivable	$ 87.2

REGULATORY MATTERS (Details)
$ in Thousands

Dec. 31, 2020

USD ($)

Dec. 31, 2019

USD ($)

Dec. 31, 2018

USD ($)

Dec. 31, 2017

USD ($)

REGULATORY MATTERS [Abstract]

Undivided profits

$ 77,800

Capital conservation buffer

0.0250

Components of regulatory capital [Abstract]

Total shareholders' equity

$ 389,522

$ 350,169

$ 338,994

$ 264,933

Add (deduct) [Abstract]

Accumulated other comprehensive loss for regulatory purposes

10,024

(3,786)

Total capital to risk-weighted assets [Abstract]

39,281

Consolidated [Member]

^[1]

$ 455,072

$ 380,454

Minimum for Adequately Capitalized Institutions, Amount

^[1]

0.1595

0.1374

^[1]

$ 228,214

$ 221,562

Minimum for Adequately Capitalized Institutions, Ratio

^[1]

0.0800

Tier 1 capital to risk-weighted assets [Abstract]

^[1]

$ 379,395

$ 352,764

Minimum for Adequately Capitalized Institutions, Amount

^[1]

0.1330

0.1274

^[1]

$ 171,161

$ 166,171

Minimum for Adequately Capitalized Institutions, Ratio

^[1]

0.0600

Common equity tier 1 capital to risk-weighted assets [Abstract]

^[1]

$ 341,095

$ 314,532

Minimum for Adequately Capitalized Institutions, Amount

^[1]

0.1196

0.1136

^[1]

$ 128,370

$ 124,628

Minimum for Adequately Capitalized Institutions, Ratio

^[1]

0.0450

Tier 1 capital to average assets [Abstract]

^[1]

$ 379,395

$ 352,764

Minimum for Adequately Capitalized Institutions, Amount

^[1]

0.0915

0.1011

^[1]

$ 165,825

$ 139,632

Minimum for Adequately Capitalized Institutions, Ratio

^[1]

0.0400

Components of regulatory capital [Abstract]

Total shareholders' equity

$ 389,522

$ 350,169

Add (deduct) [Abstract]

Accumulated other comprehensive loss for regulatory purposes

(15,821)

(2,011)

Goodwill and other intangibles

(32,606)

(33,626)

Common equity tier 1 capital

^[1]

341,095

314,532

Qualifying trust preferred securities

38,300

38,232

^[1]

379,395

352,764

Allowance for loan losses and allowance for unfunded lending commitments limited to 1.25% of total risk-weighted assets

40,000

35,677

27,690

Independent Bank [Member]

^[1]

455,072

380,454

Total capital to risk-weighted assets [Abstract]

^[1]

$ 401,005

$ 358,914

Minimum for Adequately Capitalized Institutions, Amount

^[1]

0.1406

0.1296

^[1]

$ 228,111

$ 221,482

Minimum for Adequately Capitalized Institutions, Ratio

^[1]

0.0800

^[1]

$ 285,139

$ 276,852

Tier 1 capital to risk-weighted assets [Abstract]

^[1]

0.1000

^[1]

$ 365,343

$ 331,224

Minimum for Adequately Capitalized Institutions, Amount

^[1]

0.1281

0.1196

^[1]

$ 171,083

$ 166,111

Minimum for Adequately Capitalized Institutions, Ratio

^[1]

0.0600

^[1]

$ 228,111

$ 221,482

Common equity tier 1 capital to risk-weighted assets [Abstract]

^[1]

0.0800

^[1]

$ 365,343

$ 331,224

Minimum for Adequately Capitalized Institutions, Amount

^[1]

0.1281

0.1196

^[1]

$ 128,312

$ 124,583

Minimum for Adequately Capitalized Institutions, Ratio

^[1]

0.0450

^[1]

$ 185,340

$ 179,954

Tier 1 capital to average assets [Abstract]

^[1]

0.0650

^[1]

$ 365,343

$ 331,224

Minimum for Adequately Capitalized Institutions, Amount

^[1]

0.0881

0.0949

^[1]

$ 165,828

$ 139,615

Minimum for Adequately Capitalized Institutions, Ratio

^[1]

0.0400

^[1]

$ 207,285

$ 174,519

Components of regulatory capital [Abstract]

^[1]

0.0500

Total shareholders' equity

$ 413,770

$ 366,861

Add (deduct) [Abstract]

Accumulated other comprehensive loss for regulatory purposes

(15,821)

(2,011)

Goodwill and other intangibles

(32,606)

(33,626)

Common equity tier 1 capital

^[1]

365,343

331,224

Qualifying trust preferred securities

^[1]

365,343

331,224

Allowance for loan losses and allowance for unfunded lending commitments limited to 1.25% of total risk-weighted assets

35,662

27,690

^[1]

$ 401,005

$ 358,914

[1]	These ratios do not reflect a capital conservation buffer of 2.50% at December 31, 2020 and 2019.

FAIR VALUE DISCLOSURES, Changes in Fair Value for Financial Assets (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2020	Dec. 31, 2019	Dec. 31, 2018	Dec. 31, 2017
Changes in fair value for financial assets [Abstract]
Equity securities at fair value		$ 167
Trading securities, net gains (losses)			$ (62)
Loans held for sale	$ 1,962	637	413
Capitalized mortgage loan servicing rights, net gains (losses)	(16,224)	(9,532)	(2,323)
Impairment charges recognized [Abstract]
Collateral dependent loans, carrying amount	9,100	3,400
Collateral dependent loans, valuation allowance	1,800	1,500
Additional provision for loan losses on impaired loans	700	1,300	1,300
Other real estate, carrying amount	100	60
Other real estate, valuation allowance	90	92	144	$ 123
Other real estate, additional charge	30	30	90
Securities [Member]
Changes in fair value for financial assets [Abstract]
Equity securities at fair value		167
Trading securities, net gains (losses)			(62)
Mortgage Loans [Member]
Changes in fair value for financial assets [Abstract]
Loans held for sale	1,962	637	413
Mortgage Loan Servicing, Net [Member]
Changes in fair value for financial assets [Abstract]
Capitalized mortgage loan servicing rights, net gains (losses)	$ (16,224)	$ (9,532)	$ (2,323)

FAIR VALUE DISCLOSURES, Reconciliation for all Assets and Liabilities Measured at Fair Value on a Recurring Basis Using Significant Unobservable Inputs (Level 3) (Details) - Capitalized Mortgage Loan Servicing Rights [Member] - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2020	Dec. 31, 2019	Dec. 31, 2018
Reconciliation for all assets and liabilities measured at fair value on a recurring basis using significant unobservable inputs (Level 3) [Roll Forward]
Beginning balance	$ 19,171	$ 21,400	$ 15,699
Total losses realized and unrealized [Abstract]
Included in results of operations	(16,224)	(9,532)	(2,323)
Included in other comprehensive income (loss)	0	0	0
Purchases, issuances, settlements, maturities and calls	13,957	7,303	8,024
Transfers in and/or out of Level 3	0	0	0
Ending balance	16,904	19,171	21,400
Amount of total losses for the period included in earnings attributable to the change in unrealized losses relating to assets and liabilities still held at December 31	$ (16,224)	$ (9,532)	$ (2,323)

FAIR VALUE DISCLOSURES, Difference Between Aggregate Fair value and Aggregate Remaining Contractual Principal (Details) - USD ($) $ in Thousands	Dec. 31, 2020	Dec. 31, 2019	Dec. 31, 2018
Loans held for sale [Abstract]
Aggregate Fair Value	$ 92,434	$ 69,800	$ 44,753
Difference	3,856	1,894	1,257
Contractual Principal	$ 88,578	$ 67,906	$ 43,496

FAIR VALUES OF FINANCIAL INSTRUMENTS (Details) - USD ($)
$ in Thousands

Dec. 31, 2020

Dec. 31, 2019

$ 0

$ 350

Federal Home Loan Bank and Federal Reserve Bank Stock

1,072,159

518,400

18,427

18,359

439,017

30,012

88,646

39,281

Reciprocal deposits included in deposits with no stated maturity

39,524

39,456

518,400

388,369

Reciprocal deposits included in deposits with stated maturity

37,785

42,658

Recorded Book Balance [Member]

56,006

53,295

62,699

12,009

350

Federal Home Loan Bank and Federal Reserve Bank Stock

1,072,159

518,400

18,427

18,359

2,790,683

2,768,675

12,315

10,108

16,782

5,464

^[1]

3,198,338

2,427,190

^[1]

439,017

609,537

30,012

88,646

39,281

39,524

39,456

601

1,296

11,754

4,402

Fair Value [Member]

56,006

53,295

62,699

12,009

350

1,072,159

518,400

2,794,058

2,768,817

12,315

10,108

16,782

5,464

3,198,338

2,427,190

441,457

610,235

30,844

88,680

41,417

30,265

33,149

601

1,296

Quoted Prices in Active Markets for Identical Assets (Level 1) [Member]

11,754

4,402

56,006

53,295

62,699

12,009

3,198,338

2,427,190

Significant Other Observable Inputs (Level 2) [Member]

350

1,072,159

518,400

92,434

69,800

3,414

1,752

16,782

5,464

441,457

610,235

30,844

88,680

41,417

30,265

33,149

542

1,199

Significant Unobservable Inputs (Level 3) [Member]

11,754

4,402

2,701,624

2,699,017

8,898

8,348

$ 0

[1]

ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS), Summary of Changes (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2020	Dec. 31, 2019	Dec. 31, 2018
Changes in AOCIL [Roll Forward]
Balance at beginning of period	$ 350,169	$ 338,994	$ 264,933
Other comprehensive income (loss) before reclassifications	12,015	6,769	(3,878)
Amounts reclassified from AOCIL	1,795	(447)	(231)
Other comprehensive income (loss)	13,810	6,322	(4,109)
Balances at end of period	389,522	350,169	338,994
Accumulated Other Comprehensive Income (Loss) [Member]
Changes in AOCIL [Roll Forward]
Balance at beginning of period	(3,786)	(10,108)	(5,999)
Other comprehensive income (loss)	13,810	6,322	(4,109)
Balances at end of period	10,024	(3,786)	(10,108)
Unrealized Gains (Losses) on Securities Available for Sale [Member]
Changes in AOCIL [Roll Forward]
Balance at beginning of period	3,739	(4,185)	(470)
Other comprehensive income (loss) before reclassifications	12,294	8,035	(3,671)
Amounts reclassified from AOCIL	(211)	(111)	(44)
Other comprehensive income (loss)	12,083	7,924	(3,715)
Balances at end of period	15,822	3,739	(4,185)
Disproportionate Tax Effects from Securities Available for Sale [Member]
Changes in AOCIL [Roll Forward]
Balance at beginning of period	(5,798)	(5,798)	(5,798)
Other comprehensive income (loss) before reclassifications	0	0	0
Amounts reclassified from AOCIL	0	0	0
Other comprehensive income (loss)	0	0	0
Balances at end of period	(5,798)	(5,798)	(5,798)
Unrealized Losses on Cash Flow Hedges [Member]
Changes in AOCIL [Roll Forward]
Balance at beginning of period	(1,727)	(125)	269
Other comprehensive income (loss) before reclassifications	(279)	(1,266)	(207)
Amounts reclassified from AOCIL	2,006	(336)	(187)
Other comprehensive income (loss)	1,727	(1,602)	(394)
Balances at end of period	$ 0	$ (1,727)	$ (125)

Total of all stockholders' equity (deficit) items, net of receivables from officers, directors, owners, and affiliates of the entity which are attributable to the parent. The amount of the economic entity's stockholders' equity attributable to the parent excludes the amount of stockholders' equity which is allocable to that ownership interest in subsidiary equity which is not attributable to the parent (noncontrolling interest, minority interest). This excludes temporary equity and is sometimes called permanent equity.