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 was 5.95% fixed for five years and then floated at the Secured Overnight Financing Rate (“SOFR”) plus 5.825%. These notes are presented in the Consolidated Statements of Financial Condition under the caption “Subordinated debt” and the balances of zero and $39.59 million at December 31, 2025 and 2024, respectively. The December 31, 2024 balance was net of remaining unamortized deferred issuance costs of approximately $0.41 million that was being amortized through the maturity date into interest expense on other borrowings and subordinated debt and debentures in our Consolidated Statements of Operations. On September 2, 2025 we redeemed our $40.0 million floating subordinated notes. As a result, we accelerated the remaining unamortized net issuance costs of $0.36 million during the third quarter of 2025 into interest expense.

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 $38.6 million and $38.6 million at December 31, 2025 and 2024, 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 the result of a previous acquisition 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.


		2025
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		(860)		(860)		—
		$	39,864	$	38,640	$	1,224


		2024
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		(928)		(928)		—
		$	39,796	$	38,572	$	1,224

Entity Name

Maturity
Date

Interest Rate

First Permitted
Redemption Date

IBC Capital Finance III

July 30, 2037

3 month SOFR plus 1.86%

July 30, 2012

IBC Capital Finance IV

September 15, 2037

3 month SOFR plus 3.11%

September 15, 2012

Midwest Guaranty Trust I

November 7, 2032

3 month SOFR plus 3.71%

November 7, 2007

TCSB Statutory Trust I

March 17, 2035

3 month SOFR plus 2.46%

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, 2025 and 2024.

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.