Good morning and welcome to the Independent Bank Corporation Second Quarter Earnings Conference Call. All participants will be in listen-only mode. (Operator Instructions) Please note this event is being recorded. I would now like to turn the conference over to Brad Kessel, President and CEO. Please go ahead, sir.

Good morning. Thank you for joining Independent Bank Corporation's conference call and webcast to discuss the company’s financial results for the second quarter of 2014. I am Brad Kessel, President and CEO of Independent Bank and joining me is Rob Shuster, Executive Vice President and Chief Financial Officer. Before we begin today’s call, it is my responsibility to direct you to the cautionary note regarding forward-looking statements. This is Slide 2 in our presentation. If anyone does not already have a copy of the press release issued by Independent today, you can access it at the company’s website. We will begin today’s call with our prepared remarks and then open the call up to questions. Beginning with the financial summary slide, Page 4, we are pleased to report for the second quarter of 2014 net income of $6.1 million or $0.26 per diluted share. On an income before tax basis, we are reporting $7.9 million as compared to $6.9 million for the same quarter last year. This represents a $1 million or 14.5% year-over-year increase. For the six months ended June 30, the company is reporting net income applicable to common stock of $9.2 million or $0.39 per diluted share, compared to $66.9 million or $2.90 per diluted share in the prior year period. Recall the second quarter and year-to-date results -- 2013 results, included income tax benefit of $57.6 million associated with the reversal of substantially all of the company’s deferred tax asset valuation allowance in June of 2013. Turning to the financial highlights slide, Page 5, we remain optimistic about the company’s prospects for long term earnings growth. This past year we saw net interest income up slightly on a linked-quarter basis. Non-interest expenses also on a quarterly basis have been reduced by $5.2 million or 18.7% as…

Thanks, Brad and good morning everyone. I am starting at page 10 of our presentation. Our net interest income totaled $18.5 million during the second quarter of 2014, a decrease of $1 million from the year ago period, but an increase of $0.1 million on a linked quarter basis. Our net interest margin was 3.74% during the second quarter of 2014 compared to 4.16% in the year ago period and 3.79% in the first quarter of 2014. The year over year decrease from the net interest margin primarily reflects the change in asset mix as higher yielding loans decreased and lower yielding investment securities increased. The linked quarter increase in net interest income is primarily due to growth in average interest earning asset, including loans. Average interest earning assets were $2.01 billion in the second quarter of 2014 compared to $1.9 billion in the year ago quarter and $1.99 billion in the first quarter of 2014. We will comment more specifically on our outlook for net interest income for the remainder of 2014 later in this presentation. Moving on to page 11, noninterest income totaled $10.1 million in the second quarter of 2014 as compared to $13 million in the year ago quarter and $9 million in the first quarter of 2014. The most significant change was the $1.7 million year-over-year quarterly decline in gains on mortgage loans. In addition, mortgage loans servicing was $1.5 million lower as the second quarter of 2014 included a $0.2 million impairment charge on capitalized mortgage servicing rates compared to a $1.7 million recovery in the year ago quarter. However, overall total noninterest income in the second quarter was within our expected range albeit at the lower end. As we previously reported, we did sign a new debit card brand agreement in January of…

Very good. Thank you, Rob. As we look ahead, we’ll continue to execute on strategies and initiatives to improve earnings, and increase long-term shareholder total return. Our focus areas continue to be on organic growth, increasing revenue through retaining and cross selling, existing customers and acquiring new customers, controlling costs, utilizing enterprise-wide risk management best practices, retaining, developing and attracting an engaged workforce, and providing our customers legendary and exceptional service. At this point in time, we’d now like to open it up for questions.

(Operator Instructions) We have a question from Rick D’Auteuil from Columbia Management. Please go ahead. Rick D'Auteuil – Columbia Management: Just -- so one thing we had talked about when you visited and I think as you did the offering last year were some thoughts and targets on efficiency ratio. Can you talk about your progress toward your targets and -- without the non-interest expense coming down in a more material way, I’d like to hear your thoughts on your expectation to achieve those targets.

We are at about 78%, maybe just below in the second quarter and – so that’s moving I guess in the right direction. Longer term, we want to move it towards 75% as we move through the balance of this year with our long term goal of moving it towards the 65% level. I think as Brad referenced in his comments, we do feel we need a little bit more balance coming from the revenue side and I think there’s a couple of things there. The primary driver there would be loan growth in starting to build our net interest income. Certainly if we had a bump up in interest rates, that could accelerate that progress. The loan growth piece, given our outlook for low single digit loan growth, is likely to take a little bit more time without the bump in interest rates. We do feel there’s a couple of categories in the noninterest income, mainly gains on loan sales and interchange where we could get some modest increases. And in addition we did have, not that it’s a huge number, but a $0.2 million of impairment charges on mortgage servicing rights and we feel a more I guess normalized number for that would be $500,000 to $600,000 of positive income per quarter. So we can get some boost there. And then we think longer term there’s still progress to be made on the expense side. But we feel to get to the 65% long term goal from where we are at today, more of it is going to have to come through the revenue side. We went from $3.5 billion in assets some time ago to $2.2 billion. Some of that was due to the branch sale that we had at the end of 2012, but a lot of it was due to the deleveraging of the balance sheet. We do we feel we have the infrastructure to support a larger balance sheet certainly the capital as well and that’s what our longer term targets are. Rick D'Auteuil – Columbia Management : So you don’t have -- I guess you are saying short term expect the noninterest expense to be slightly below the $22.5 million a quarter, but on the longer term you don’t expect that needle to move very much on the downside anyway?

I guess Rick, I’d jump in there. On the expense side, I think the two categories as Rob mentioned that still have room are loan and collection and we’ve made a lot of progress there. I think the other category obviously is our largest expense and that’s salaries and benefits. And today we continue to have a large number FTEs for an institution our size, including our service portfolio. So I think that’s the area that will -- that does have some opportunity. I think in terms of capitalizing on the opportunity, we have a couple of things in the works. Number one is we have contracted with a third party that’s helping us with what I call workflow or process flow throughout the organization and essentially trying to minimize the number of handoffs, eliminate paper and as we flow chart today the way work runs through our system and then flow chart a more optimized process of it running through our system, I think out of that we are going to find that some work today that we're doing just as it’s needed. I think there’s some pretty good upside there. I also think that today we have 70 branches and our peak we had 106. We sold off 21. We consolidated another 15 and we probably have some room for further branch consolidations and or sales. We are not I guess just set or comfortable with the $22.5 million run rate. We are going to continue to whittle away at it.

(Operator Instructions) Our next question is Damon DelMonte, KBW. Please go ahead. Damon DelMonte – Keefe, Bruyette & Woods: Just wondering if you could talk a little bit on the loan growth, maybe some of the -- go into a little bit more detail on some of the initiatives on the commercial side that's going to be the biggest drivers of growth in the coming quarters.

Sure, I think we have now the right team in place. We have 21 business bankers spread across our markets essentially, and I outlined on this, east Michigan, west Michigan and central Michigan. And overseeing those business bankers we have three group managers and two of them have been with us for some time and then the third is an add here in west Michigan within the last 18 months. And I think what we’ve seen here over the last six months in particular is finally starting to ramp it up here in the west Michigan region. I think before that there was probably untapped demand simply because we were still coming out of I think our prior period of healing the balance sheet and we didn’t necessarily have all the people in place. So now that the people have been in place for I think enough time to make a difference -- and we’re getting a lot of looks in all our markets and it’s a nice mix. What I like is that it’s a mix in product. It’s a mix in geography and it’s very granular. As an example this past quarter I think our largest onboarding was probably just around the $10 million mark and after that there’s probably another 35 credits that are over the $500,000 mark. So, a lot of just solid, good sized credits. And then within the new business we’ve seen this past quarter it was probably more slanted new to new customers as opposed to new to existing customers. But -- so that’s some of the, I guess facts behind what we are seeing. And I guess I’ll leave it at that. Damon DelMonte – Keefe, Bruyette & Woods: Okay, that's helpful. Thank you. And then just with respect to the margin, I take it from the commentary you'll probably see a little bit more pressure on the margin, but can you quantify your estimate for maybe on a quarterly basis? Are we talking just a couple basis points similar to kind of what we saw this last quarter? Or are we looking at something a little bit greater than that?

No, I think that’s fair, Damon. I said in my comments that we believe we are coming likely to an end of compression caused by the near zero short term interest rate environment. Absent an unexpected adverse shift in loan mix, our modeling seems to or indicates that we really have pretty much come to the end of the downward margin compression. So perhaps we get a basis point or two additional, but we really feel it’s flattening out at that point.

Having no further questions, this concludes our question and answer session. I would like to turn the conference back over to Brad Kessel for any closing remarks.

In closing, 2014 is a very special year for us at Independent Bank as we mark 150 years of serving in our Michigan communities. I’m very proud of our associates and to be a part of a company that has such a long history. On behalf of Independent Bank I would like to thank you for joining us on today’s call. Have a great day.

The conference has now concluded. Thank you for attending today’s presentation. You may now disconnect.