Good day everyone, and welcome to the Independent Bank Corporation annual meeting. Now, I'll turn the call over to your host, Steve Gulis, Chairman of the Board. Please go ahead, Steve.
Good afternoon, and welcome to Independent Bank Corporation's 2026 annual meeting of shareholders. Before we start, I would like to direct everyone's attention to our comments regarding forward-looking statements on slide two. I am Steve Gulis, Chairman of the Board of Directors of Independent Bank Corporation. It is now shortly after 3:00 P.M. Eastern time, and this meeting is officially called to order. To provide greater access to our shareholders, we will be conducting the 2026 annual shareholders meeting virtually. We are pleased you have chosen to join us for this event. As a reminder, voting instructions remain as described in the proxy materials previously distributed. Shareholders had the option to vote by internet, by phone, or by mail. Although we will not be able to accept votes in person, you can vote electronically during the meeting by following the instructions in the proxy materials.
I will now formally open the polls for voting at this time and will formally close the polls at the conclusion of my presentation. Stockholders who have sent in proxies or voted via telephone or the internet do not need to take any further action. I would now like to review the agenda for today's meeting as summarized on slide three. We will start with the business portion of today's meeting, during which our shareholders will vote upon the matters listed in our previously distributed proxy materials. At the conclusion of that portion of the meeting, Brad Kessel, the company's President and CEO, will review our results of operations for 2025. We will then have a brief question and answer session, followed by a report on the results of the voting, and finally adjourn the meeting.
Shareholders can ask questions at any time during the meeting by utilizing the Q and A box located on the left side of your screen. Slide four introduces our company's directors, and slide five introduces our executive team. I am pleased that they could join us during today's meeting, and I want to thank each of them for their service. As summarized on slide six, Gavin Mohr will act as the secretary of this meeting. In Mr. Mohr's possession is a certified list of shareholders as of February 20th, 2026, the record date of this meeting. This list, along with an affidavit of the mailing of notice of the meeting and the accompanying proxy materials and annual report, are available for inspection by any interested shareholder.
The notice of the meeting, proxy materials, and annual report were made available to all shareholders entitled to vote at this meeting on or about March 6th, 2026. The secretary has informed me that our records show that the company had 20,769,374 shares of its common stock outstanding on the record date, which are entitled to notice of and to vote at the meeting. The secretary has previously delivered a list of our shareholders and all proxies that have been received by the company. The secretary has also informed me that more than a majority of the company's outstanding shares of common stock entitled to vote at this meeting are present by proxy. Accordingly, a quorum is declared present, and we will proceed to act on the matters submitted to our shareholders at this meeting. As outlined on slide seven, proposal number one is the election of directors.
Terance Beia, William Kessel, and Stephen Gulis, Jr. are the nominees standing for election to three-year terms ending in 2029. Additionally, as outlined on slide eight, Michael Wooldridge is the nominee standing for election to a one-year term ending in 2027. Slide nine provides information on proposal number two. The audit committee has selected Crowe LLP as the independent auditors for Independent Bank Corporation for the year ending December 31, 2026. At today's meeting, we are asking our shareholders to ratify that selection. Slide nine outlines proposal number three. The board has solicited a non-binding advisory vote from our shareholders to approve the compensation of our executives as described in our proxy materials. Slide 11 outlines proposal number four. The board has solicited a non-binding advisory vote from our shareholders on how often we include the advisory vote on executive compensation in our proxy materials.
Since formal written ballots have been signed on behalf of all shares voting by proxy, I declare that the polls for the Independent Bank Corporation's 2026 annual shareholders meeting are now closed. We will report on the results of the voting at the end of this meeting. I would now like to turn this meeting over to Brad Kessel, the President and CEO of Independent Bank Corporation, for a brief presentation.
Thanks, Steve. It is my honor and pleasure to provide you with an update on Independent Bank Corporation as we enter our 162nd year. I am pleased to report on our strong results as we advance our mission of inspiring financial independence today with tomorrow in mind. Our vision is a future where people approach their finances with confidence, clarity, and the determination to succeed. Our core values of courage, drive, integrity, people focus, and teamwork are the blueprint our employees live by. We strive to be Michigan's most people-focused bank. For the year ended December 31, 2025, we reported net income of $68.5 million, or $3.27 per diluted share, compared to net income of $66.8 million, or $3.16 per diluted share in 2024.
For the full year 2025, we delivered a return on average assets of 1.27%, a return on average equity of 14.3%, earnings per share growth of 3.48%, and 13.38% growth in tangible book value per share. Returning excess capital to shareholders remains a key component of our strategy to create value for them. Our strong financial performance and balance sheet enable us to continue doing so. In 2025, we increased our total annual cash dividends by 8.3% to $1.04 per share from $0.96 per share in 2024. In January of 2026, your board of directors further increased the quarterly cash dividend by another 7.7% to $0.28 per share from the previous $0.26 per share. This represents the 13th consecutive year we have increased our common stock cash dividend.
Our five-year compounded annual growth rate for diluted earnings per share and tangible book value per share are 5.3% and 7.1%, respectively. As reflected in our balance sheet, our fundamentals continued to be strong. Loans, excluding loans held for sale, totaled $4.28 billion as of December 31, 2025, an increase of $237.5 million, or 5.9% from the prior year end. On the funding side, core deposits totaled $4.74 billion as of December 31, 2025, an increase of $107.6 million, or 2.3% over the prior year end. The increases during 2025 reflect the strength of our relationships with our customers, with growth in business, retail, and municipal customers. At year-end 2025, our loan-to-deposit ratio was 89.8%. As we have grown the company, we have maintained our sound underwriting criteria reflected in strong asset quality on slide 17. Our loan portfolio continues to perform well.
Our capital levels also continue to be strong, which supports our growth initiatives and provides us with flexibility to address changes in market and business conditions. In addition to our strong financial results, we had many other significant highlights this past year. They include our 10th annual Be The Difference Day, where on October 13th, our employees volunteered at over 80 community service projects in Michigan and Ohio. Over the last 10 years, Independent Bank has donated more than $1 million to community organizations we serve on this special day. During 2025, Independent Bank was awarded the Raymond James Community Bankers Cup for our financial performance. Forbes recognized Independent as the best in-state bank for customer service, financial advice, fee structures, ease of digital and branch services, and overall trust. Our employees' feedback earned us a Great Place to Work certification for the third consecutive year.
Newsweek awarded Independent as one of America's greatest workplaces based on extensive employee reviews. I am also pleased with our recently announced execution of a definitive merger agreement with HCB Financial Corp, the parent company of Highpoint Community Bank. Highpoint's seven locations will complement our existing 59-location network. Our formula for success and key strategies. As we look forward, we will continue to drive total shareholder return through long-term growth in earnings per share, long-term growth in tangible book value per share, and a consistent and growing dividend. Bank profitability, as measured by return on assets and return on capital, targeted at 1.2% or better and 13% or better respectively. The key drivers of this profitability will be mid-single-digit growth in loans with an emphasis on commercial relationships, mid-single-digit growth in deposits, and an improving efficiency ratio driving us towards the mid-50s over time.
Key strategies include proactive talent recruitment, continued expansion of commercial banking, continuing the remix of our earning assets, continued development of our digital platforms, geographic expansion, including the successful integration of HCB Financial, data-driven marketing, branch modernization and optimization with our branch managers focused on outbound calling efforts, and the use of AI and automation to enhance the customer experience and drive efficiencies. Why invest in IBCP? I continue to believe there exists at least 10 reasons to invest in IBCP. Number one, our proven track record. Two, the consistent and strong earnings. Number three, consistent dividend. A fourth reason to invest in IBCP is our attractive markets. Number five, an opportunity to grow earnings. Six, attractive core deposit base. A seventh reason to invest is our diversified revenue stream. The eighth reason, excellent asset quality. The ninth reason, strong enterprise risk function.
Finally, our being good stewards of our capital. I would like to take a minute to honor Michael M. Magee, Junior. Mike served Independent Bank for 38 years with strong leadership, resilience, wisdom, passion, and thoughtfulness. Mike passed away on August 3rd, 2025. He is deeply missed. In closing, I would like to thank you, our shareholders, for investing in IBC. I would like to acknowledge the commitment and ongoing effort of your board of directors, our bank officers, and all our bank associates. Their dedication and service are exemplary, and each is truly making a positive difference in the lives of our customers, our shareholders, and the communities we serve. At this point, we would like to pause and open the meeting for any questions. There are no questions.
I would like to thank you, and now I would like to turn the meeting back over to Chairman Gulis.
Thanks, Brad. Is the secretary ready to report on the voting results?
Yes. The final tabulation is as follows: 18,368,210 shares are represented by proxy or in person, which constitutes 88.43% of the outstanding common shares entitled to vote at this meeting. With respect to the election of directors, I would like to report that no nominee received fewer than 16,530,123 votes for, and all of the nominees were reelected. With respect to the other proposals, I would like to report that each of those proposals received the requisite votes for approval.
Thank you, Gavin. A formal report of the secretary will be filed with the minutes of the meeting, and the specific voting results will be reported in a filing with the Securities and Exchange Commission. This concludes our business for today, and the meeting is adjourned. Thank you for attending.
That concludes our meeting today. You may now disconnect.