Mercantile Bank Corporation Reports Second Quarter 2012 Results Full repurchase of TARP preferred stock, improved asset quality, increased profitability and growth of loan portfolio


GRAND RAPIDS, Mich., July 17, 2012  /PRNewswire/ -- Mercantile Bank Corporation (NASDAQ: MBWM) ("Mercantile") reported net income attributable to common shares of $3.3 million, or $0.36 per diluted share, for the second quarter of 2012, compared with net income attributable to common shares of $2.4 million, or $0.27 per diluted share, for the prior-year period. On a pre-tax basis, income was $5.8 million in the second quarter of 2012 compared to $2.7 million in the prior-year second quarter, an increase of 115 percent.

The second quarter was highlighted by:

  • Exit from the TARP Program with the repurchase of all outstanding preferred stock, without issuing additional stock or debt
  • Significant improvement in profitability as asset quality continues to improve
  • Nonperforming assets declined 35 percent from a year ago and 66 percent since peak in early 2010
  • Level of loans in the 30- to 89-days delinquent category remains at virtually zero
  • Net increase in total loans
  • Net interest margin remains strong
  • Regulatory capital ratios remain significantly above minimum requirements for "well-capitalized" institutions

"The second quarter marked a number of significant accomplishments that has Mercantile poised to take advantage of lending and market opportunities," said Michael Price, Chairman and CEO of Mercantile Bank Corporation. "Our improving levels of profitability and the strength of our balance sheet enabled us to complete the repurchase of the preferred stock outstanding under TARP. For the first time in the Company's history, we had a net recovery of loan losses and recorded a negative provision for loan losses, reflecting an especially dynamic quarter pertaining to asset quality improvement. Our performance in the second quarter highlights the strength of our community banking model and the value we bring to the communities we serve."

Operating Results

Total revenue, which consists of net interest income and noninterest income, was $13.5 million during the 2012 second quarter, down $1.4 million or about 9 percent from the $14.9 million generated during the second quarter of 2011, primarily reflecting a reduction in earning assets. Net interest income was $11.5 million, down $1.7 million or 12.5 percent from the $13.2 million earned in the prior-year second quarter. The decrease in net interest income resulted from a 13.0 percent decline in average earning assets as part of management's strategic initiative to reduce commercial real estate exposure and shift certain loans out of the loan portfolio. The net interest margin during the second quarter of 2012 was 3.63 percent, slightly higher than the level during the second quarter of 2011 and remaining well above the historical average level.

Noninterest income for the 2012 second quarter was $2.0 million, up $0.2 million or 13.9 percent from the comparable 2011 period. The increase in noninterest income primarily resulted from increased residential mortgage banking fee income and an increase in rental income on foreclosed properties.

Mercantile had a negative $3.0 million provision for loan losses during the second quarter of 2012 compared to a provision expense of $1.7 million for the year-ago quarter. The negative provision expense is the result of several factors, including: a net recovery of prior-period loan charge-offs of $1.7 million, certain specific reserve allocations that were fully eliminated or significantly reduced due to successful collection efforts, a low level of loan-rating downgrades, and a significant number of loan-rating upgrades.

Noninterest expense for the 2012 second quarter was $10.6 million, up $0.2 million from the same period in 2011. Salaries and benefits totaled $4.9 million, up $0.5 million from the prior-year quarter, primarily reflecting the expense associated with certain employee benefit programs that had been suspended or lowered in prior years. Costs associated with the administration and resolution of problem assets, including legal expenses, property tax payments, appraisal costs and write-downs on foreclosed properties, totaled $2.1 million during the 2012 second quarter, up $0.1 million from the year-ago quarter. Federal Deposit Insurance Corporation insurance premiums were $0.3 million in the second quarter of 2012, down $0.4 million from the 2011 second quarter, primarily resulting from a decreased assessment rate that reflects the Company's improved financial condition and operating performance.

"Once again, we saw the benefit of our disciplined approach to managing our loan portfolio with a focus on appropriate underwriting and administration," added Price. "This effort has had a substantial positive impact on our operating performance and the strength of our financial condition, and has enabled us to repurchase all of our outstanding preferred stock without issuing additional stock or debt."

Balance Sheet

Over the past several years, Mercantile has focused on reducing its exposure to loans secured by commercial real estate. While efforts to reduce certain segments of the commercial real estate portfolio continue, total loans increased $9.3 million during the second quarter of 2012 as improved economic conditions and continued relationship building efforts have led to increased lending opportunities. As of June 30, 2012, total assets were $1.39 billion, down $48.0 million or 3.3 percent from December 31, 2011; total loans decreased $11.4 million, or 1.1 percent, to $1.06 billion over the same period. Compared to June 30, 2011, total assets declined $153 million, or 9.9 percent, and total loans declined $62.0 million, or 5.5 percent.

Real estate loans comprise a majority of Mercantile's loan portfolio. At June 30, 2012, real estate loans, excluding residential mortgage loans representing permanent financing of owner-occupied dwellings and home equity lines of credit, were $706 million or approximately 67 percent of total loans, representing a decline of $65.9 million, or 8.5 percent, from $772 million, or 68.8 percent of total loans, at June 30, 2011.

Non-owner-occupied commercial real estate ("CRE") loans totaled $351 million as of June 30, 2012 (33.1 percent of total loans), a decline of $78.9 million over the past 12 months. Owner-occupied CRE loans were $282 million at the end of the second quarter of 2012, an increase of $16.7 million from a year ago. Vacant land, land development and construction ("C&D") loans, including both residential and commercial projects, totaled $73.9 million at June 30, 2012, down $3.6 million from a year ago. The commercial and industrial ("C&I") segment of the loan portfolio was $277 million at June 30, 2012, an increase of $10.9 million since year-end 2011 and an increase of $15.3 million over the past 12 months. The average balance of commercial lines of credit has remained relatively stable since early 2011 after declining for several years.

LOANS SECURED BY REAL ESTATE














($000s)


6/30/12


3/31/12


12/31/11


9/30/11


6/30/11


Residential-Related:












Vacant Land

$

12,246

$

12,837

$

13,124

$

13,264

$

13,484


Land Development


15,256


16,173


17,007


17,441


18,134


Construction


4,055


4,318


4,923


4,647


4,706




31,557


33,328


35,054


35,352


36,324














Comm'l Non-Owner Occupied:












Vacant Land


8,827


9,255


10,555


11,082


12,639


Land Development


14,355


14,418


14,486


14,541


16,348


Construction


15,424


16,936


13,615


11,061


10,709


Commercial Buildings


350,762


357,128


376,805


397,279


429,708




389,368


397,737


415,461


433,963


469,404














Comm'l Owner Occupied:












Construction


3,751


6,198


4,213


2,986


1,517


Commercial Buildings


281,519


273,376


268,479


269,776


264,848




285,270


279,574


272,692


272,762


266,365














Total

$

706,195

$

710,639

$

723,207

$

742,077

$

772,093


























Note --- Excludes residential mortgage loans representing permanent financing of owner-occupied dwellings and home

equity lines of credit.

Since December 2008, Mercantile has been focused on improving liquidity by reducing wholesale funding and growing local deposits, especially interest-bearing checking and money market deposit accounts. As of June 30, 2012, total deposits were $1.11 billion, a decline of $494 million since year-end 2008. By comparison, local deposits increased $327 million to $797 million since year-end 2008, representing 72.1 percent of total deposits compared to 29.4 percent at December 31, 2008. Approximately 77 percent, or $252 million, of local deposit growth since year-end 2008 occurred in the interest-bearing checking and money market deposit account categories, while DDA checking accounted for $53.8 million, or about 17 percent of total growth. Growth in local deposits was driven primarily by the introduction of innovative new products, various deposit-gathering initiatives, enhanced advertising and branding campaigns, and transfers from maturing time deposit accounts.

Wholesale funds were $343 million, or 28.8 percent of total funds, as of June 30, 2012, compared to $1.41 billion, or 71.5 percent of total funds, as of December 31, 2008. Compared to a year ago, wholesale funding was reduced by $180 million, or 34.3 percent. The $1.07 billion decline in wholesale funding since the end of 2008 reflects both the shift toward local deposits, as well as a $796 million decline in total loans. This strategy has allowed Mercantile to reduce brokered deposits and Federal Home Loan Bank advances as they matured since year-end 2008.

Short-term investments, consisting of federal funds sold and interest-bearing bank deposits, averaged $71.4 million during the second quarter of 2012. In addition to its short-term investments, at the end of the second quarter of 2012, Mercantile had approximately $140 million of borrowing capacity through various established lines of credit to meet potential funding needs, as well as $33.2 million of U.S. Government securities available to sell.

Asset Quality

Nonperforming assets ("NPAs") at June 30, 2012 were $40.1 million, or 2.9 percent of total assets, compared to $60.4 million as of December 31, 2011, and $61.9 million as of June 30, 2011 (4.2 percent and 4.0 percent of total assets, respectively). This represents a decline of $20.3 million or 33.6 percent from the end of 2011, and a decline of $21.8 million or 35.3 percent from the year-ago quarter-end.

Robert B. Kaminski, Jr., Mercantile's Executive Vice President and Chief Operating Officer, noted: "We made outstanding progress in improving our asset quality during the second quarter, as evidenced by the decrease in nonperforming assets. The ratio of nonperforming assets to total assets decreased to less than 3 percent compared with levels greater than 4 percent at the end of 2011, driven by loan upgrades and declines in nonperforming loans. As we build on the improvement in asset quality, we expect to continue leveraging the key strategic benefits of being a community bank. Even though business owners have been cautious in expanding, as we highlight the value of our strategic relationship approach and close proximity to their businesses, we expect to capture additional market share as growth opportunities arise."

Nonperforming loans ("NPLs") totaled $28.5 million as of June 30, 2012, down $10.1 million and $14.9 million, respectively, from the linked quarter-end and the year-ago quarter-end, while foreclosed real estate and repossessed assets declined $2.0 million and $6.9 million, respectively, from the linked and year-ago quarter-ends. CRE loans represented 62.5 percent of NPLs, or $17.8 million at June 30, 2012. Investor-owned nonperforming CRE loans accounted for $13.2 million of total CRE nonperforming loans (3.8 percent of $351 million investor-owned CRE loans), while owner-occupied CRE nonperforming loans accounted for $4.6 million (1.6 percent of $282 million owner-occupied CRE loans).

Nonperforming C&D loans were $3.4 million as of June 30, 2012, a decrease of $0.1 million since the year-ago quarter-end. Nonperforming C&I loans were $1.8 million as of June 30, 2012, a decline of $2.0 million since June 30, 2011. Owner-occupied and rental residential NPLs were $5.5 million as of June 30, 2012, down $3.1 million since the year-ago quarter-end.

NONPERFORMING ASSETS












($000s)


6/30/12


3/31/12


12/31/11


9/30/11


6/30/11

Residential Real Estate:











Land Development

$

3,946

$

3,762

$

5,479

$

8,139

$

8,531

Construction


965


1,242


1,397


1,418


2,089

Owner Occupied / Rental


5,982


6,437


7,138


7,737


8,996



10,893


11,441


14,014


17,294


19,616












Commercial Real Estate:











Land Development


1,174


1,531


2,111


1,885


2,223

Construction


0


403


409


0


0

Owner Occupied


6,850


7,687


10,642


11,287


10,749

Non-Owner Occupied


19,386


28,954


30,106


22,435


25,526



27,410


38,575


43,268


35,607


38,498












Non-Real Estate:











Commercial Assets


1,765


2,144


3,060


3,897


3,777

Consumer Assets


1


14


14


29


4



1,766


2,158


3,074


3,926


3,781












Total

$

40,069

$

52,174

$

60,356

$

56,827

$

61,895

During the second quarter of 2012, Mercantile added $3.3 million of NPAs to its problem asset portfolio and successfully disposed of $13.0 million through a combination of asset sales and principal pay-downs. Loan charge-offs were $1.3 million and foreclosed asset valuation write-downs were $1.1 million. In total, NPAs decreased by a net $12.1 million during the second quarter of 2012.

Improvement in asset quality is also apparent on a full-year basis. During the 12-month period ended June 30, 2012, Mercantile added $26.9 million of problem assets to its NPA portfolio, successfully disposed of $41.4 million, and charged off or wrote down an additional $7.3 million. In total, NPAs declined by a net $21.8 million since June 30, 2011.

NONPERFORMING ASSETS RECONCILIATION












($000s)


2Q 2012


1Q 2012


4Q 2011


3Q 2011


2Q 2011












Beginning balance

$

52,174

$

60,356

$

56,827

$

61,895

$

76,089

Additions


3,306


9,651


10,188


3,740


6,478

Returns to performing











status


0


(737)


0


0


0

Principal payments


(11,357)


(5,533)


(2,115)


(5,058)


(12,067)

Sale proceeds


(1,586)


(9,282)


(3,038)


(2,670)


(2,547)

Loan charge-offs


(1,337)


(1,691)


(890)


(476)


(5,393)

Valuation write-downs


(1,131)


(590)


(616)


(604)


(665)












Total

$

40,069

$

52,174

$

60,356

$

56,827

$

61,895

Net loan recoveries were $1.7 million during the second quarter of 2012, or an annualized negative 0.7 percent of average loans, compared with net loan charge-offs of $5.6 million (2.1 percent annualized) and $5.1 million (1.7 percent annualized) for the linked and prior-year quarters, respectively.

NET LOAN CHARGE-OFFS (RECOVERIES)












($000s)


2Q 2012


1Q 2012


4Q 2011


3Q 2011


2Q 2011

Residential Real Estate:











Land Development

$

(110)

$

38

$

15

$

135

$

2,496

Construction


10


0


(90)


(11)


(9)

Owner Occupied / Rental


50


237


1,176


(187)


1,819



(50)


275


1,101


(63)


4,306












Commercial Real Estate:











Land Development


(7)


103


(75)


47


(62)

Construction


0


0


0


0


0

Owner Occupied


(164)


793


68


(18)


755

Non-Owner Occupied


(1,525)


4,341


4,060


639


445



(1,696)


5,237


4,053


668


1,138












Non-Real Estate:











Commercial Assets


(14)


81


(435)


(162)


(336)

Consumer Assets


14


(4)


0


26


(9)



0


77


(435)


(136)


(345)












Total

$

(1,746)

$

5,589

$

4,719

$

469

$

5,099

Capital Position

Shareholders' equity totaled $150 million as of June 30, 2012, a decrease of $15.3 million from December 31, 2011. During the second quarter of 2012, Mercantile repurchased the entire $21.0 million of preferred stock that was sold to the U.S. Department of the Treasury on May 15, 2009. To fund the repurchase, the Bank paid a cash dividend to the Company in approximately the same amount. The Bank remains "well-capitalized" with a total risk-based capital ratio of 14.6 percent as of June 30, 2012, compared to 15.5 percent at December 31, 2011. At June 30, 2012, the Bank had approximately $54.4 million in excess of the 10.0 percent minimum regulatory threshold required to be considered a "well-capitalized" institution. Mercantile reported 8,610,850 total shares outstanding at June 30, 2012.

On July 3, 2012 Mercantile repurchased, for $7.5 million, the warrant it sold to the U.S. Department of the Treasury on May 15, 2009. The warrant provided for the purchase of 616,438 shares of Mercantile common stock at a price of $5.11 per share. To fund the repurchase, the Bank paid a cash dividend to the Company in approximately the same amount. On a pro-forma basis, assuming the warrant repurchase and the payment of the cash dividend had been consummated on June 30, 2012, Mercantile's and the Bank's capital ratios would decline by about 55 to 65 basis points.

Mr. Price concluded: "We are very pleased with the strong performance we've posted so far in 2012. Our earnings performance and financial condition continued to improve, which combined with achieving additional important milestones provides us greater flexibility to take advantage of lending and market opportunities as they arise. We were able to fully repurchase the preferred stock and the warrant from the Treasury over the past several months without having to access the capital markets or issue debt, and still maintain a strong regulatory capital position. We remain dedicated to the key strategies that have enabled us to resume the path of disciplined growth for long-term performance."

About Mercantile Bank Corporation

Based in Grand Rapids, Michigan, Mercantile Bank Corporation is the bank holding company for Mercantile Bank of Michigan. Founded in 1997 to provide banking services to businesses, individuals and governmental units, the Bank differentiates itself on the basis of service quality and the expertise of its banking staff. Mercantile has seven full-service banking offices in Grand Rapids, Holland and Lansing, Michigan. Mercantile Bank Corporation's common stock is listed on the NASDAQ Global Select Market under the symbol "MBWM."

Forward-Looking Statements

This news release contains comments or information that constitute forward-looking statements (within the meaning of the Private Securities Litigation Reform Act of 1995) that are based on current expectations that involve a number of risks and uncertainties. Actual results may differ materially from the results expressed in forward-looking statements. Factors that might cause such a difference include changes in interest rates and interest rate relationships; demand for products and services; the degree of competition by traditional and nontraditional competitors; changes in banking regulation or actions by bank regulators; changes in tax laws; changes in prices, levies, and assessments; the impact of technological advances; governmental and regulatory policy changes; the outcomes of contingencies; trends in customer behavior as well as their ability to repay loans; changes in local real estate values; changes in the national and local economies; and other factors, including risk factors, disclosed from time to time in filings made by Mercantile with the Securities and Exchange Commission. Mercantile undertakes no obligation to update or clarify forward-looking statements, whether as a result of new information, future events or otherwise.

Mercantile Bank Corporation






Second Quarter 2012 Results






MERCANTILE BANK CORPORATION


CONSOLIDATED BALANCE SHEETS












JUNE 30,


DECEMBER 31,


JUNE 30,




2012


2011


2011




(Unaudited)


(Audited)


(Unaudited)


ASSETS








Cash and due from banks

$

18,405,000

$

12,402,000

$

13,988,000


Interest-bearing deposit balances


10,585,000


9,641,000


9,501,000


Federal funds sold


53,476,000


54,329,000


103,510,000


Total cash and cash equivalents


82,466,000


76,372,000


126,999,000










Securities available for sale


127,591,000


172,992,000


199,785,000


Federal Home Loan Bank stock


11,961,000


11,961,000


11,961,000










Loans


1,060,996,000


1,072,422,000


1,122,999,000


Allowance for loan losses


(29,689,000)


(36,532,000)


(38,720,000)


Loans, net


1,031,307,000


1,035,890,000


1,084,279,000










Premises and equipment, net


26,164,000


26,802,000


27,144,000


Bank owned life insurance


49,312,000


48,520,000


47,631,000


Accrued interest receivable


3,895,000


4,403,000


5,010,000


Other real estate owned and repossessed assets


11,545,000


15,282,000


18,473,000


Net deferred tax asset


25,285,000


26,013,000


0


Other assets


15,719,000


14,994,000


16,592,000










Total assets

$

1,385,245,000

$

1,433,229,000

$

1,537,874,000


















LIABILITIES AND SHAREHOLDERS' EQUITY








Deposits:








Noninterest-bearing

$

164,532,000

$

147,031,000

$

144,761,000


Interest-bearing


941,098,000


965,044,000


1,103,171,000


Total deposits


1,105,630,000


1,112,075,000


1,247,932,000










Securities sold under agreements to repurchase


52,831,000


72,569,000


71,207,000


Federal Home Loan Bank advances


35,000,000


45,000,000


45,000,000


Subordinated debentures


32,990,000


32,990,000


32,990,000


Other borrowed money


1,423,000


1,434,000


1,721,000


Accrued interest and other liabilities


7,709,000


4,162,000


8,107,000


Total liabilities


1,235,583,000


1,268,230,000


1,406,957,000










SHAREHOLDERS' EQUITY








Preferred stock, net of discount


0


20,331,000


20,202,000


Common stock


174,026,000


173,979,000


173,939,000


Retained earnings (deficit)


(26,799,000)


(32,639,000)


(65,312,000)


Accumulated other comprehensive income


2,435,000


3,328,000


2,088,000


Total shareholders' equity


149,662,000


164,999,000


130,917,000










Total liabilities and shareholders' equity

$

1,385,245,000

$

1,433,229,000

$

1,537,874,000










Mercantile Bank Corporation











Second Quarter 2012 Results











MERCANTILE BANK CORPORATION

CONSOLIDATED REPORTS OF OPERATIONS
















THREE MONTHS ENDED


THREE MONTHS ENDED

SIX MONTHS ENDED

SIX MONTHS ENDED


June 30, 2012


June 30, 2011

June 30, 2012

June 30, 2011


(Unaudited)



(Unaudited)



(Unaudited)



(Unaudited)


INTEREST INCOME














Loans, including fees

$

13,454,000



$

16,171,000


$

27,268,000


$

32,903,000


Investment securities


1,430,000




2,235,000



3,131,000



4,626,000


Federal funds sold


38,000




48,000



70,000



78,000


Interest-bearing deposit balances


8,000




6,000



14,000



12,000


Total interest income


14,930,000




18,460,000



30,483,000



37,619,000
















INTEREST EXPENSE














Deposits


2,844,000




4,333,000



5,853,000



8,967,000


Short-term borrowings


42,000




116,000



91,000



277,000


Federal Home Loan Bank advances


300,000




606,000



688,000



1,212,000


Other borrowed money


233,000




247,000



471,000



556,000


Total interest expense


3,419,000




5,302,000



7,103,000



11,012,000
















Net interest income


11,511,000




13,158,000



23,380,000



26,607,000
















Provision for loan losses


(3,000,000)




1,700,000



(3,000,000)



3,900,000
















Net interest income after














provision for loan losses


14,511,000




11,458,000



26,380,000



22,707,000
















NONINTEREST INCOME














Service charges on accounts


379,000




401,000



764,000



823,000


Other income


1,561,000




1,302,000



3,110,000



2,632,000


Total noninterest income


1,940,000




1,703,000



3,874,000



3,455,000
















NONINTEREST EXPENSE














Salaries and benefits


4,855,000




4,364,000



9,545,000



8,735,000


Occupancy


671,000




708,000



1,349,000



1,409,000


Furniture and equipment


299,000




304,000



606,000



607,000


Nonperforming asset costs


2,080,000




1,950,000



3,355,000



5,048,000


FDIC insurance costs


296,000




719,000



600,000



1,635,000


Other expense


2,403,000




2,398,000



4,803,000



4,590,000


Total noninterest expense


10,604,000




10,443,000



20,258,000



22,024,000
















Income before federal income














tax expense


5,847,000




2,718,000



9,996,000



4,138,000
















Federal income tax expense


1,856,000




0



3,125,000



0
















Net income


3,991,000




2,718,000



6,871,000



4,138,000
















Preferred stock dividends and accretion


703,000




337,000



1,031,000



669,000
















Net income attributable to














common shares

$

3,288,000



$

2,381,000


$

5,840,000


$

3,469,000
















Basic earnings per share


$0.38




$0.28



$0.68



$0.40


Diluted earnings per share


$0.36




$0.27



$0.65



$0.39
















Average basic shares outstanding


8,610,181




8,604,476



8,607,832



8,601,835


Average diluted shares outstanding


9,043,791




8,872,692



9,023,744



8,878,595
















Mercantile Bank Corporation












Second Quarter 2012 Results












MERCANTILE BANK CORPORATION


CONSOLIDATED FINANCIAL HIGHLIGHTS


(Unaudited)




















Quarterly


Year-To-Date




2012


2012


2011


2011


2011






(dollars in thousands except per share data)

2nd Qtr


1st Qtr


4th Qtr


3rd Qtr


2nd Qtr


2012


2011


















EARNINGS
















Net interest income

$

11,511


11,869


12,335


12,295


13,158


23,380


26,607


Provision for loan losses

$

(3,000)


0


1,900


1,100


1,700


(3,000)


3,900


Noninterest income

$

1,940


1,934


2,023


1,804


1,703


3,874


3,455


Noninterest expense

$

10,604


9,654


9,497


9,975


10,443


20,258


22,024


Net income before federal income
















tax expense

$

5,847


4,149


2,961


3,024


2,718


9,996


4,138


Net income

$

3,991


2,880


30,322


3,024


2,718


6,871


4,138


Net income common shares

$

3,288


2,552


29,991


2,682


2,381


5,840


3,469


Basic earnings per share

$

0.38


0.30


3.49


0.31


0.28


0.68


0.40


Diluted earnings per share

$

0.36


0.28


3.37


0.30


0.27


0.65


0.39


Average basic shares outstanding


8,610,181


8,605,484


8,604,240


8,604,263


8,604,476


8,607,832


8,601,835


Average diluted shares outstanding


9,043,791


8,991,422


8,888,900


8,868,122


8,872,692


9,023,744


8,878,595


















PERFORMANCE RATIOS
















Return on average assets


0.94%


0.73%


8.22%


0.71%


0.61%


0.83%


0.44%


Return on average equity


8.46%


6.14%


85.19%


7.89%


7.39%


7.26%


5.47%


Net interest margin (fully tax-equivalent)


3.63%


3.73%


3.65%


3.50%


3.61%


3.68%


3.62%


Efficiency ratio


78.83%


69.94%


66.14%


70.75%


70.27%


74.33%


73.26%


Full-time equivalent employees


231


225


232


237


235


231


235


















CAPITAL
















Period-ending equity to assets


10.80%


11.92%


11.51%


9.25%


8.51%


10.80%


8.51%


Tier 1 leverage capital ratio


11.42%


12.66%


12.09%


10.87%


10.27%


11.42%


10.27%


Tier 1 risk-based capital ratio


13.33%


14.87%


14.19%


13.24%


12.58%


13.33%


12.58%


Total risk-based capital ratio


14.59%


16.14%


15.46%


14.51%


13.85%


14.59%


13.85%


Book value per common share

$

17.38


16.97


16.73


13.45


12.77


17.38


12.77


Cash dividend per common share

$

0.00


0.00


0.00


0.00


0.00


0.00


0.00


















ASSET QUALITY
















Gross loan charge-offs

$

1,708


7,576


5,791


1,342


6,733


9,284


12,764


Net loan charge-offs

$

(1,746)


5,589


4,719


469


5,099


3,843


10,548


Net loan charge-offs to average loans


(0.66%)


2.10%


1.75%


0.17%


1.73%


0.72%


1.76%


Allowance for loan losses

$

29,689


30,943


36,532


39,351


38,720


29,689


38,720


Allowance for loan losses to total loans


2.80%


2.94%


3.41%


3.60%


3.45%


2.80%


3.45%


Nonperforming loans

$

28,524


38,668


45,074


39,540


43,422


28,524


43,422


Other real estate and repossessed assets

$

11,545


13,506


15,282


17,287


18,473


11,545


18,473


Nonperforming assets to total assets


2.89%


3.72%


4.21%


3.84%


4.02%


2.89%


4.02%


















END OF PERIOD BALANCES
















Loans

$

1,060,996


1,051,674


1,072,422


1,094,037


1,122,999


1,060,996


1,122,999


Total earning assets (before allowance)

$

1,264,609


1,284,982


1,321,345


1,385,945


1,447,756


1,264,609


1,447,756


Total assets

$

1,385,245


1,401,596


1,433,229


1,477,985


1,537,874


1,385,245


1,537,874


Deposits

$

1,105,630


1,093,434


1,112,075


1,185,333


1,247,932


1,105,630


1,247,932


Shareholders' equity

$

149,662


167,084


164,999


136,733


130,917


149,662


130,917


















AVERAGE BALANCES
















Loans

$

1,067,933


1,065,285


1,072,851


1,111,184


1,179,786


1,066,609


1,206,264


Total earning assets (before allowance)

$

1,290,066


1,294,380


1,358,585


1,414,722


1,483,409


1,292,223


1,501,258


Total assets

$

1,407,400


1,409,953


1,448,000


1,504,640


1,566,708


1,408,676


1,584,695


Deposits

$

1,109,160


1,095,147


1,152,001


1,211,863


1,251,818


1,102,155


1,256,677


Shareholders' equity

$

155,931


166,846


139,676


134,862


129,242


161,388


127,835





















 


SOURCE Mercantile Bank Corporation



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