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Independent Bank Corporation correspondence dated June 22, 2007

Filed Via Edgar

June 22, 2007

United States Securities
and Exchange Commission (“SEC” or the “Commission”)
Attn. John P.
Nolan
Accounting Branch Chief
Washington, DC 20549

Re:
Independent
Bank Corporation ("IBC" or the "Company")
Form 10-K for the Fiscal Year Ended
December 31, 2006 (the "10-K")
Filed March 12, 2007
File No. 000-07818

Dear Mr. Nolan,

The following is the response of IBC
to your follow-up letter dated June 13, 2007 (the “Follow-Up Letter”) with
respect to the 10-K referenced above. Set forth below is the text of the comment of the
SEC set forth in the Follow-Up Letter, followed by the Company’s response.

Form 10-K for the Fiscal
Year Ended December 31, 2006

Exhibit 13 – Annual Report

Consolidated Financial
Statements

Consolidated Statements
of Cash Flows, page 46

          1.

          We note your supplemental response to our comment letter dated May 21,
          2007. In your response you state  that you believe the
          classification error relating to contingent consideration payments is not
          material  and that a restatement of previously issued
          financial reports is not necessary. Please provide us with
          your comprehensive materiality analysis regarding this error, including
          how you considered the  quantitative impact on your net
          operating cash flows and net investing cash flows for 2006.

RESPONSE

Please see the attached Exhibit A for
a detailed analysis of the reclassifications necessary in the 2006 Consolidated Statements
of Cash Flows (as well as the impact in 2005 and 2004). To summarize the information on
Exhibit A as to net operating cash flows and net investing cash flows, they would change
as follows:

United States Securities and Exchange Commission

Response to Letter dated June 13, 2007
June 22, 2007

     As Originally Reported
     As Restated

     (Dollars in Thousands)

     2006:

       Net operating cash flows
     $    22,335

     $    26,777

       Net investing cash flows
       (65,934
        )
       (70,376
        )

     2005:

       Net operating cash flows
       48,347

       48,347

       Net investing cash flows
       (270,262
        )
       (270,262
        )

     2004:

       Net operating cash flows
       42,604

       43,690

       Net investing cash flows
       (294,634
        )
       (295,720
        )

Statement of Financial Accounting
Concepts No. 2 – “Qualitative Characteristics of Accounting Information”
(“CON #2”) and SEC Regulation S-X provide help in understanding the concept of
materiality. Materiality is generally defined as follows:

“The magnitude of an omission or
misstatement of accounting information that, in the light of surrounding circumstances,
makes it probable that the judgment of a reasonable person relying on the information
would have been changed or influenced by the omission or misstatement.”

CON #2, paragraph 131 goes on to
state: “The predominant view is that materiality judgments can properly be made only
by those who have all the facts. The Board’s present position is that no general
standards of materiality could be formulated to take into account all of the
considerations that enter into an experienced human judgment.”

Appendix C of CON #2 deals with
“Quantitative Materiality Considerations.” Appendix C provides various examples
of quantitative materiality guidelines, none of which deal directly with a
reclassification error in a Statement of Cash Flows. Paragraph 163 of Appendix C
does provide some basis as to how the courts have dealt with the concept of a reasonable
person’s judgment, which is at the heart of the definition of materiality:

“… information is material
if the trading judgment of reasonable investors would not have been left untouched upon
receipt of such information.”

“… a material fact was one
which if it had been correctly stated or disclosed would have deterred or tended to deter
the average prudent investor from purchasing the securities in question.”

Staff Accounting Bulletin No. 99
(“SAB 99”) covers materiality and expresses the view that “exclusive
reliance on certain quantitative benchmarks to assess materiality in preparing financial
statements and performing audits of those financial statements is inappropriate.” The
materiality concepts expressed in SAB 99 are consistent with the concepts in CON #2. SAB
99 states: “Materiality concerns the significance of an item to users of a
registrant’s financial statements. A matter is ‘material’ if there is a
substantial likelihood that a reasonable person would consider it important.” SAB 99
also states: “The materiality of a misstatement may turn on where it appears in the
financial statements.”

United States Securities and Exchange Commission

Response to Letter dated June 13, 2007
June 22, 2007

Finally, the U.S. Supreme Court has
held that a fact is material if there is “a substantial likelihood that the …
fact would have been viewed by the reasonable investor as having significantly altered the
‘total mix’ of information made available.”

Based on the above definitions of
materiality, we believe that the central question is whether the change in the reported
2006 net cash flows for operating and investing activities to account for a $4.4 million
reclassification for a bank holding company with consolidated total assets of $3.4 billion
would have changed or influenced the judgment of a reasonable person. We strongly believe
that the answer to this question is unequivocally no. This belief is based on the
following factors:

•

The reclassification does not impact any reported balance of an asset or liability, net
income, earnings per share, any component of the Consolidated Statements of Operations, or
any key metric for a bank holding company such as return on assets, return on equity or
the net interest margin. Rather it impacts the reported totals for net cash flows from
operating and investing activities. Reported cash flows from operating, investing and
financing activities at a bank holding company (like IBC) are often quite volatile and the
trends are far more important than the absolute dollar amounts. For example, cash flows
from the origination and sale of loans held for sale are included in net operating cash
flows. Depending on the specific timing of loan sales, the amount of net operating cash
flows can vary dramatically from one period to the next.

•

Although the reclassification changes net operating cash flows by 19.9% and net investing
cash flows by 6.7%, it does not change any of the trends indicated in the Consolidated
Statements of Cash Flows. Both 2006 cash flows provided from net operating activities and
2006 cash used in net investing activities were declining from the comparative prior
years. As reported, net cash flow from operations declined by 53.8% in 2006 compared to
2005, with the reclassification the decline would be 44.6%. As reported, net cash used in
investing activities declined by 75.6% in 2006 compared to 2005, with the reclassification
the decline would be 74.0%. These trends would not be altered after considering the
reclassification and a reasonable person would reach the same conclusion: that 2006 cash
flows provided from operations declined, in part due to a decline in net income and that
2006 cash flows used in investing activities declined due primarily to slowing loan
growth.

•

The nature, timing and form of the contingent consideration payments were disclosed
elsewhere in the Form 10-K for the Company (both in the footnotes to the consolidated
financial statements and in Management’s Discussion and Analysis). Thus a reader of
the financial statements was well informed regarding these payments and the
misclassification of the contingent consideration payment in the 2006 Consolidated
Statement of Cash Flows would not change or influence the judgment of a reasonable person
relying on these financial statements.

United States Securities and Exchange Commission

Response to Letter dated June 13, 2007
June 22, 2007

For these reasons, we believe that it
is highly unlikely that a reasonable investor would view the change in the classification
of these cash flows as having “significantly altered the ‘total mix’ of
information made available” or would have otherwise been influenced by the error. We
believe that our position that this matter is not material is well supported. The $4.4
million reclassification in the 2006 Consolidated Statement of Cash Flows will first
appear in the Company’s Form 10-Q for the quarter ended June 30, 2007. This document
will be filed soon (by early August 2007). A footnote describing this reclassification
will also be included in the Form 10-Q for the quarter ended June 30, 2007.

We acknowledge the following:

          1.

          The Company is responsible for the adequacy of the disclosure in the filing;

          2.

          Staff comments or changes to disclosure in response to staff comments do not
          foreclose the Commission from taking any action with respect to the filing; and

          3.

          The Company may not assert staff comments as a defense in any proceeding
          initiated by the Commission or any person under the federal securities laws of
          the United States.

Please contact the undersigned at
(616) 522-1765 or by e-mail at RShuster@ibcp.com if you have any questions or require any
additional information.

Very truly yours,

Robert N. Shuster
Executive Vice President
and Chief Financial Officer

     CONSOLIDATED STATEMENTS OF CASH FLOWS
                          EXHIBIT A

     Year Ended December 31,

     2006
As reported
     Reclass
     2006
Adjusted
     2005
As reported
     Reclass
     2005
Adjusted
     2004
As reported
     Reclass
     2004
Adjusted

     (In thousands)

     Net Income

     $
        33,203

     $
        33,203

     $
        46,912

     $
        46,912

     $
        38,558

     $
        38,558

     ADJUSTMENTS TO RECONCILE NET

       INCOME TO NET CASH PROVIDED
  BY OPERATING ACTIVITIES

       Proceeds from sales of loans held for sale
       285,815

       285,815

       382,635

       382,635

       391,401

       391,401

       Disbursements for loans held for sale
       (284,499
        )

       (284,499
        )
       (367,078
        )

       (367,078

       (391,559
        )

       (391,559
        )

       Provision for loan losses
       17,412

       17,412

       8,071

       8,071

       4,309

       4,309

       Deferred federal income tax expense
       (2,328
        )

       (2,328
        )
       3,019

       3,019

       2,185

       2,185

       Deferred loan fees
       309

       309

       (383
        )

       (383
        )
       (568
        )

       (568
        )

       Depreciation, amortization of intangible assets

       0

       0

       0

          and premiums and accretion of discounts on

          securities and loans
       (9,839
        )

       (9,839
        )
       (12,498
        )

       (12,498
        )
       (3,001
        )

       (3,001
        )

       Net gains on sales of real estate mortgage loans
       (4,593
        )

       (4,593
        )
       (5,370
        )

       (5,370
        )
       (5,956
        )

       (5,956
        )

       Net gains on securities
       (171
        )

       (171
        )
       (1,484
        )

       (1,484
        )
       (856
        )

       (856
        )

       Goodwill impairment
       3,575

       3,575

       0

       0

       Write-off of uncompleted software

       0

       0

       977

       977

       Increase in accrued income and other assets
       (9,595
        )
       470
        c

       (8,234
        )
       2,771c

       (11,432
        )
       8,443f

       1,086g

       (9,125
        )

       (5,463
        )

       (1,903
        )

       Increase (decrease) in accrued expenses and

          other liabilities
       (6,954
        )
       1,375
        a

       2,757

       18,546

       (470)
        c

       (2,771)
        c

      ( 8,443)f

       92
        d

       2,975
        d

       (2,982
        )

       (14
        )

       10,103

         Total Adjustments
       (10,868
        )
       4,442

       (6,426
        )
       1,435

       0

       1,435

       4,046

       1,086

       5,132

         Net Cash Provided by Operating Activities
       22,335

       4,442

       26,777

       48,347

       0

       48,347

       42,604

       1,086

       43,690

     CASH FLOW USED IN INVESTING ACTIVITIES

       Proceeds from the sale of securities

          availablefor sale
       1,283

       1,283

       54,556

       54,556

       57,441

       57,441

       Proceeds from the maturity of securities

          available for sale
       20,007

       20,007

       20,575

       20,575

       24,489

       24,489

       Principal payments received on securities

          available for sale
       35,813

       35,813

       56,000

       56,000

       46,672

       46,672

       Purchases of securities available for sale
       (5,267
        )

       (5,267
        )
       (70,632
        )

       (70,632
        )
       (132,190
        )

       (132,190
        )

       Proceeds from sale of non-performing and

          other loans of concern

       0

       7,794

       7,794

       0

       Portfolio loans originated, net of principal

          payments
       (104,454
        )

       (104,454
        )
       (324,656
        )

       (324,656
        )
       (292,231
        )

       (292,231
        )

       Acquisition of businesses, less cash received

       (1,375)
        a

       12,905

       (1,086)
        g

       (92)
        d

       (2,975)
        d

       (4,442
        )

       0

       11,819

       Capital expenditures
       (13,316
        )

       (13,316
        )
       (13,899
        )

       (13,899
        )
       (11,720
        )

       (11,720
        )

         Net Cash Used in Investing Activities
       (65,934
        )
       (4,442
        )
       (70,376
        )
       (270,262
        )
       0

       (270,262
        )
       (294,634
        )
       (1,086
        )
       (295,720
        )

     CASH FLOW FROM FINANCING ACTIVITIES

       Net increase in total deposits
       124,352

       124,352

       471,394

       471,394

       150,930

       150,930

       Net increase (decrease) in other borrowings

          and federal funds purchased
       (41,331
        )

       (41,331
        )
       (66,215
        )

       (66,215
        )
       88,306

       88,306

       Proceeds from Federal Home Loan Bank advances
       223,200

       223,200

       659,750

       659,750

       509,100

       509,100

       Payments of Federal Home Loan Bank advances
       (239,453
        )

       (239,453
        )
       (807,127
        )

       (807,127
        )
       (503,525
        )

       (503,525
        )

       Proceeds from issuance of long-term debt

       0

       0

       10,000

       10,000

       Repayment of long-term debt
       (2,000
        )

       (2,000
        )
       (2,000
        )

       (2,000
        )
       (1,000
        )

       (1,000
        )

       Net increase (decrease) in financed premiums

          available
       13,044

       13,044

       (12,782
        )

       (12,782
        )
       21,820

       21,820

       Dividends paid
       (17,547
        )

       (17,547
        )
       (15,320
        )

       (15,320
        )
       (12,500
        )

       (12,500
        )

       Repurchase of common stock
       (11,989
        )

       (11,989
        )