Mercantile Bank Corporation Reports Strong Fourth Quarter and Full Year 2015 Results

Diluted earnings per share growth of 27 percent and loan growth of 9 percent highlight first full year of operations after merger with Firstbank Corporation

19 Jan, 2016, 06:00 ET from Mercantile Bank Corporation

GRAND RAPIDS, Mich., Jan. 19, 2016 /PRNewswire/ -- Mercantile Bank Corporation (NASDAQ: MBWM) ("Mercantile") reported net income of $6.5 million, or $0.40 per diluted share, for the fourth quarter of 2015, compared with net income of $6.3 million, or $0.37 per diluted share, for the prior-year period.  For the full year 2015, Mercantile reported net income of $27.0 million, or $1.62 per diluted share, compared with net income of $17.3 million, or $1.28 per diluted share, for the full year 2014.

Results in 2014 reflect the integration of Mercantile and Firstbank Corporation ("Firstbank"), which merged on June 1, 2014, including consolidated operating results for the combined businesses from the date of merger.  Results for the fourth quarter of 2014 include $0.4 million in pre-tax merger-related costs.  On an after-tax basis, these costs were $0.2 million, or $0.01 per diluted share.  Results for the full year 2014 include $5.4 million in pre-tax merger-related costs.  On an after-tax basis, these costs were $3.8 million, or $0.28 per diluted share.

The fourth quarter and year were highlighted by:

  • Strong core earnings and capital position
  • Stable and robust net interest margin
  • Strong fee income growth
  • Fourth quarter earnings results include the impact of a $0.8 million pre-tax charge relating to an efficiency program that is expected to save $2.7 million pre-tax beginning in 2016
  • Strong asset quality, as depicted by low levels of nonperforming assets and loans in the 30- to 89-days delinquent category
  • New commercial term loan originations of approximately $167 million during the fourth quarter and $532 million during the full year
  • Commercial loan pipeline remains solid
  • Repurchased approximately 789,000 shares for $15.8 million during 2015, representing nearly 5 percent of total shares outstanding at year-end 2014
  • Announced first quarter 2016 cash dividend of $0.16 per common share, an increase of 7 percent from the $0.15 cash dividend paid during the fourth quarter of 2015
  • Mercantile Bank of Michigan ("Bank") received an "Outstanding" rating for the third consecutive Community Reinvestment Act examination

"We are very pleased with our 2015 results, which validate the financial projections and associated cost savings disclosed early in the merger process," said Michael Price, Chairman, President and Chief Executive Officer. "Our strong financial performance exhibited throughout the year reflects a stable and healthy net interest margin fueled by our ongoing reallocation of earning assets, controlled overhead costs, and sound asset quality.  We are also very pleased with the net loan growth that was achieved during 2015; new commercial term loan originations accelerated each quarter during the year and totaled over $500 million for the full year.  We are confident that solid loan growth can be realized in future periods as we continue our efforts to identify new loan prospects and increase our current loan pipeline."

Operating Results

Total revenue, which consists of net interest income and noninterest income, was $29.7 million during the fourth quarter of 2015, up $1.2 million or 4.2 percent from the prior-year fourth quarter.  Net interest income during the fourth quarter of 2015 was $25.7 million, up $0.5 million or 1.9 percent from the fourth quarter of 2014, primarily reflecting slight increases in average earning assets and the net interest margin.  Total revenue was $117 million during the full year 2015, up $29.4 million or 33.5 percent from 2014.  Net interest income was $101 million in 2015, up $23.4 million or 30.1 percent from the prior year, primarily reflecting a 27.0 percent increase in average earning assets and an eight basis point increase in the net interest margin.

The net interest margin was 3.81 percent in the fourth quarter of 2015, continuing a relatively stable trend over the past six quarters during which the margin ranged from 3.79 percent to 3.95 percent.  The yield on loans generally declined over the past six quarters, consistent with the industry and primarily due to the ongoing low interest rate environment and competitive pressures.  In Mercantile's case, however, the negative impact of the lower loan yield was largely offset by assets shifting out of the low-yielding securities portfolio and into the higher-yielding loan portfolio, thus capitalizing on an opportunity growing out of the 2014 merger with Firstbank.  Average loans represented about 84 percent of average earning assets during the fourth quarter of 2015, up from approximately 79 percent during the fourth quarter of 2014.

The net interest margin was 3.83 percent in 2015, up from 3.75 percent in 2014 due to a decreased cost of funds, which more than offset a decreased yield on total earning assets.  The yield on earning assets was negatively impacted by a decreased yield on securities, primarily reflecting the inclusion of Firstbank's lower-yielding portfolio, and a lower yield on loans, primarily reflecting the ongoing low interest rate environment and competitive pressures, while the cost of funds was positively impacted by the absorption of Firstbank's lower-costing interest-bearing liability base.  The negative impacts of the lower securities and loan yields were largely offset by the ongoing reallocation of earning assets as noted above.  Average loans represented approximately 82 percent of average earning assets during 2015 compared to 79 percent during 2014.   

As expected, net interest income and the net interest margin were affected during 2015 by purchase accounting accretion and amortization entries associated with the fair value measurements recorded effective June 1, 2014.  An increase of $5.3 million in interest income on loans and a decrease of $1.4 million in interest expense on deposits and FHLB advances were recorded during 2015.  In addition, an increase in interest expense on subordinated debentures totaling $0.7 million was recorded.  Mercantile expects to continue to record adjustments in interest income on loans and interest expense on subordinated debentures in future periods; however, the adjustments to interest expense on deposits and FHLB advances ended in July and June of 2015, respectively, in accordance with our fair value measurements at the time of the merger.  The resulting increase in interest expense negatively impacted the net interest margin by approximately eight to ten basis points after July 31, 2015.  Mercantile has partially mitigated this negative impact by reallocating the earning asset mix by investing cash flows from lower-yielding investments into higher-yielding loans.

Mercantile recorded a $0.5 million provision for loan losses during the fourth quarter of 2015 and a negative $1.0 million provision for the full year 2015 compared to no provision and a negative $3.0 million provision during the respective 2014 periods.  The negative provisions are the result of several factors, including recoveries of previously charged-off loans, reversals of specific reserves, a reduced level of loan-rating downgrades and ongoing loan-rating upgrades as the quality of the loan portfolio continues to improve.  The provision expense recorded during the fourth quarter of 2015 was primarily necessitated by loan growth, which more than offset reductions in the required allowance stemming from the previously mentioned factors.

Noninterest income during the fourth quarter of 2015 was $4.0 million, up $0.7 million or 21.4 percent from the prior-year fourth quarter.  The increase in noninterest income primarily resulted from higher levels of credit and debit card income and mortgage banking income.  Noninterest income for 2015 was $16.0 million, up $6.0 million or 59.9 percent from 2014.  Substantially all categories of fee income were higher in 2015 compared to 2014 as a result of the merger, most notably mortgage banking income, credit and debit card income, and service charges on accounts.  The ongoing low interest rate environment and increased purchase activity in our market areas also contributed to the higher level of mortgage banking income.

Noninterest expense totaled $20.1 million during the fourth quarter of 2015, up $0.5 million or 2.6 percent from the prior-year fourth quarter.  Expenses related to the cost efficiency program, which was announced in the fourth quarter of 2015, totaled $0.8 million during the fourth quarter of 2015; additional costs of less than $0.1 million are expected to be recorded during the first quarter of 2016.  The cost efficiency program is expected to save $2.7 million per year on a pre-tax basis beginning in 2016.  Pre-tax merger-related costs totaled $0.4 million during the fourth quarter of 2014.  Excluding cost efficiency program-related costs and merger-related costs, noninterest expense totaled $19.3 million and $19.2 million in the fourth quarters of 2015 and 2014, respectively.  Noninterest expense for 2015 was $79.4 million, up $13.8 million or 21.0 percent from 2014.  The increase in noninterest expense was mainly attributable to higher costs necessary to operate the combined company, as 2014 results included only seven months of costs operating as a combined entity.  Pre-tax merger-related costs totaled $5.4 million during 2014.

Mr. Price continued: "Our net interest margin remained very stable and robust during 2015, ranging from 3.81 percent to 3.87 percent, which is noteworthy in light of industry-wide margin compression.  The ongoing strategic initiative of using cash flows from investments to fund loan growth and our loan pricing discipline helped stabilize the yield on earning assets during the year, and the cost of funds benefitted significantly from the absorption of Firstbank's low cost deposit base.  We are very pleased with the level of mortgage banking income recorded during the year, and we continue to identify opportunities to enhance other sources of fee income.  We have implemented various initiatives to reduce costs, the most notable one being the recently announced cost efficiency program."

Balance Sheet

As of December 31, 2015, total assets were $2.90 billion, up $10.2 million or 0.4 percent from December 31, 2014.  Total loans increased $188 million, or 9.0 percent, to $2.28 billion over the same time period.  Approximately $167 million and $532 million in commercial term loans to new and existing borrowers were originated during the fourth quarter and full year of 2015, respectively, as ongoing sales and relationship building efforts resulted in increased lending opportunities.  As of December 31, 2015, unfunded commitments on commercial construction and development loans totaled approximately $90 million, which are expected to be largely funded over the next twelve months. 

Robert B. Kaminski, Jr., Executive Vice President and Chief Operating Officer, noted: "We are very pleased with the net loan growth of nine percent realized during 2015.  Our lending staff worked diligently to meet the credit needs of our existing customer base and develop new customer relationships while continually employing appropriate quality and pricing disciplines.  In light of a strong current loan pipeline and our continuing focus on identifying new loan opportunities, we are very optimistic that solid loan growth can be achieved in future periods.  We anticipate new lending opportunities will also arise as a result of our recent hiring of experienced commercial loan officers in the Grand Rapids, Lansing and Kalamazoo markets."

Commercial-related real estate loans continue to comprise a majority of Mercantile's loan portfolio, representing approximately 55 percent of total loans as of December 31, 2015.  Non-owner occupied commercial real estate ("CRE") loans and owner-occupied CRE loans equaled 28 percent and 20 percent of total loans, respectively, as of December 31, 2015.  Commercial and industrial loans represented 31 percent of total loans as of December 31, 2015. 

As of December 31, 2015, total deposits were $2.28 billion, down $1.5 million from December 31, 2014.  Local deposits were up $52.7 million since year-end 2014; growth in local deposits was primarily driven by new commercial loan relationships.  Wholesale funds were $189 million, or approximately 8 percent of total funds, as of December 31, 2015, compared to $230 million, or approximately 9 percent of total funds, as of December 31, 2014.

Asset Quality

Nonperforming assets at December 31, 2015 were $6.7 million, or 0.2 percent of total assets, compared to $10.5 million, or 0.4 percent of total assets, as of September 30, 2015.  The level of past due loans remains nominal, and loan relationships on the internal watch list continue to decline.   

Net loan charge-offs were $0.9 million during the fourth quarter of 2015 compared with net loan recoveries of $0.1 million for the linked quarter and net loan charge-offs of $0.3 million for the prior-year fourth quarter.  Net loan charge-offs totaled $3.4 million during 2015 and net loan recoveries totaled $0.2 million during 2014.

Capital Position

Shareholders' equity totaled $334 million as of December 31, 2015, an increase of $5.7 million from year-end 2014.  The Bank's capital position remains above "well-capitalized" with a total risk-based capital ratio of 13.5 percent as of December 31, 2015, compared to 14.4 percent at December 31, 2014.  At December 31, 2015, the Bank had approximately $90 million in excess of the 10.0 percent minimum regulatory threshold required to be considered a "well-capitalized" institution.  Mercantile reported 16,358,711 total shares outstanding at December 31, 2015.  As part of a $20 million common stock repurchase program announced in January of 2015, Mercantile repurchased approximately 789,000 shares at a weighted average all-in cost per share of $19.99 during 2015, representing approximately 79 percent of the authorized program.

Mr. Price concluded: "The strong results achieved during 2015 were in line with our high expectations and met the financial objectives established at the time of our merger with Firstbank.  We took advantage of the opportunities afforded us by our expanded geographic footprint and successfully marketed our ability to provide excellent customer service and efficiently deliver a wide range of products and services to enhance existing customer relationships and establish many new ones throughout the past year.  We are confident that Mercantile will continue its strong financial performance in 2016, and we believe that our sound financial condition positions us to meet growth objectives and build shareholder value."

About Mercantile Bank Corporation

Based in Grand Rapids, Michigan, Mercantile Bank Corporation is the bank holding company for Mercantile Bank of Michigan.  Mercantile provides banking services to businesses, individuals and governmental units, and differentiates itself on the basis of service quality and the expertise of its banking staff. Mercantile has assets of approximately $2.9 billion and operates 53 banking offices serving communities in central and western 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

Fourth Quarter 2015 Results

MERCANTILE BANK CORPORATION

CONSOLIDATED BALANCE SHEETS

(Unaudited)

DECEMBER 31,

DECEMBER 31,

DECEMBER 31,

2015

2014

2013

ASSETS

   Cash and due from banks

$

42,829,000

$

43,754,000

$

17,149,000

   Interest-bearing deposits

46,463,000

117,777,000

6,389,000

   Federal funds sold

599,000

11,207,000

123,427,000

      Total cash and cash equivalents

89,891,000

172,738,000

146,965,000

   Securities available for sale

346,992,000

432,912,000

131,178,000

   Federal Home Loan Bank stock

7,567,000

13,699,000

11,961,000

   Loans

2,277,727,000

2,089,277,000

1,053,243,000

   Allowance for loan losses

(15,681,000)

(20,041,000)

(22,821,000)

      Loans, net

2,262,046,000

2,069,236,000

1,030,422,000

   Premises and equipment, net

46,862,000

48,812,000

24,898,000

   Bank owned life insurance

58,971,000

57,861,000

51,377,000

   Goodwill

49,473,000

49,473,000

0

   Core deposit intangible

12,631,000

15,624,000

0

   Other assets

29,123,000

33,024,000

30,165,000

      Total assets

$

2,903,556,000

$

2,893,379,000

$

1,426,966,000

LIABILITIES AND SHAREHOLDERS' EQUITY

   Deposits:

      Noninterest-bearing

$

674,568,000

$

558,738,000

$

224,580,000

      Interest-bearing

1,600,814,000

1,718,177,000

894,331,000

         Total deposits

2,275,382,000

2,276,915,000

1,118,911,000

   Securities sold under agreements to repurchase

154,771,000

167,569,000

69,305,000

   Federal Home Loan Bank advances

68,000,000

54,022,000

45,000,000

   Subordinated debentures

55,154,000

54,472,000

32,990,000

   Accrued interest and other liabilities

16,445,000

12,263,000

7,435,000

         Total liabilities

2,569,752,000

2,565,241,000

1,273,641,000

SHAREHOLDERS' EQUITY

   Common stock

304,819,000

317,904,000

162,999,000

   Retained earnings (deficit)

27,722,000

10,218,000

(4,101,000)

   Accumulated other comprehensive income (loss)

1,263,000

16,000

(5,573,000)

      Total shareholders' equity

333,804,000

328,138,000

153,325,000

      Total liabilities and shareholders' equity

$

2,903,556,000

$

2,893,379,000

$

1,426,966,000

 

 

Mercantile Bank Corporation

Fourth Quarter 2015 Results

MERCANTILE BANK CORPORATION

CONSOLIDATED REPORTS OF INCOME

(Unaudited)

THREE MONTHS ENDED

THREE MONTHS ENDED

TWELVE MONTHS ENDED

TWELVE MONTHS ENDED

December 31, 2015

December 31, 2014

December 31, 2015

December 31, 2014

INTEREST INCOME

   Loans, including fees

$

26,643,000

$

25,745,000

$

104,106,000

$

80,824,000

   Investment securities

1,879,000

2,331,000

8,007,000

8,060,000

   Other interest-earning assets

54,000

71,000

215,000

234,000

      Total interest income

28,576,000

28,147,000

112,328,000

89,118,000

INTEREST EXPENSE

   Deposits

1,948,000

2,099,000

7,590,000

8,378,000

   Short-term borrowings

41,000

40,000

157,000

123,000

   Federal Home Loan Bank advances

259,000

163,000

765,000

635,000

   Other borrowed money

669,000

672,000

2,642,000

2,204,000

      Total interest expense

2,917,000

2,974,000

11,154,000

11,340,000

      Net interest income

25,659,000

25,173,000

101,174,000

77,778,000

Provision for loan losses

500,000

0

(1,000,000)

(3,000,000)

      Net interest income after

provision for loan losses

 

25,159,000

 

25,173,000

 

102,174,000

 

80,778,000

NONINTEREST INCOME

   Service charges on accounts

864,000

837,000

3,308,000

2,586,000

   Credit and debit card income

1,033,000

865,000

4,329,000

2,494,000

   Mortgage banking income

835,000

691,000

3,619,000

1,672,000

   Earnings on bank owned life insurance

293,000

300,000

1,113,000

1,184,000

   Other income

1,021,000

640,000

3,669,000

2,092,000

      Total noninterest income

4,046,000

3,333,000

16,038,000

10,028,000

NONINTEREST EXPENSE

   Salaries and benefits

10,691,000

10,310,000

42,594,000

33,703,000

   Occupancy

1,398,000

1,496,000

5,976,000

4,637,000

   Furniture and equipment

544,000

563,000

2,332,000

1,738,000

   Data processing costs

2,097,000

1,893,000

7,696,000

5,869,000

   FDIC insurance costs

402,000

449,000

1,717,000

1,182,000

   Efficiency program-related costs

765,000

0

765,000

0

   Merger-related costs

0

366,000

0

5,447,000

   Other expense

4,200,000

4,519,000

18,301,000

13,034,000

      Total noninterest expense

20,097,000

19,596,000

79,381,000

65,610,000

      Income before federal income tax expense

9,108,000

8,910,000

38,831,000

25,196,000

Federal income tax expense

2,628,000

2,617,000

11,811,000

7,865,000

      Net Income

$

6,480,000

$

6,293,000

$

27,020,000

$

17,331,000

   Basic earnings per share

$0.40

$0.37

$1.63

$1.28

   Diluted earnings per share

$0.40

$0.37

$1.62

$1.28

   Average basic shares outstanding

16,314,953

16,919,559

16,609,263

13,510,991

   Average diluted shares outstanding

16,352,187

16,965,665

16,642,140

13,541,904

 

 

Mercantile Bank Corporation

Fourth Quarter 2015 Results

MERCANTILE BANK CORPORATION

CONSOLIDATED FINANCIAL HIGHLIGHTS

(Unaudited)

Quarterly

Year-To-Date

(dollars in thousands except per share data)

2015

2015

2015

2015

2014

4th Qtr

3rd Qtr

2nd Qtr

1st Qtr

4th Qtr

2015

2014

EARNINGS

   Net interest income

$

25,659

25,625

25,041

24,849

25,173

101,174

77,778

   Provision for loan losses

$

500

(500)

(600)

(400)

0

(1,000)

(3,000)

   Noninterest income

$

4,046

4,277

4,021

3,694

3,333

16,038

10,028

   Noninterest expense

$

20,097

19,693

20,350

19,241

19,596

79,381

65,610

   Net income before federal income

      tax expense

$

9,108

10,709

9,312

9,702

8,910

38,831

25,196

   Net income

$

6,480

7,336

6,558

6,646

6,293

27,020

17,331

   Basic earnings per share

$

0.40

0.45

0.39

0.39

0.37

1.63

1.28

   Diluted earnings per share

$

0.40

0.45

0.39

0.39

0.37

1.62

1.28

   Average basic shares outstanding

16,314,953

16,425,933

16,767,393

16,937,630

16,919,559

16,609,263

13,510,991

   Average diluted shares outstanding

16,352,187

16,461,794

16,803,846

16,978,591

16,965,665

16,642,140

13,541,904

PERFORMANCE RATIOS

   Return on average assets

0.88%

1.01%

0.92%

0.94%

0.86%

0.94%

0.76%

   Return on average equity

7.79%

8.86%

7.97%

8.19%

7.70%

8.19%

6.91%

   Net interest margin (fully tax-equivalent)

3.81%

3.87%

3.83%

3.83%

3.79%

3.83%

3.75%

   Efficiency ratio

67.66%

65.86%

70.02%

67.41%

68.74%

67.72%

74.72%

   Full-time equivalent employees

639

640

656

642

653

639

653

YIELD ON ASSETS / COST OF FUNDS

   Yield on loans

4.71%

4.79%

4.78%

4.84%

4.90%

4.78%

4.89%

   Yield on securities

2.21%

2.16%

2.15%

2.17%

2.17%

2.16%

2.52%

   Yield on other interest-earning assets

0.25%

0.25%

0.25%

0.25%

0.25%

0.25%

0.25%

   Yield on total earning assets

4.25%

4.30%

4.23%

4.25%

4.23%

4.25%

4.29%

   Yield on total assets

3.91%

3.95%

3.89%

3.92%

3.89%

3.92%

3.95%

   Cost of deposits

0.34%

0.34%

0.31%

0.34%

0.36%

0.33%

0.47%

   Cost of borrowed funds

1.39%

1.37%

1.35%

1.36%

1.37%

1.37%

1.42%

   Cost of interest-bearing liabilities

0.61%

0.60%

0.54%

0.56%

0.59%

0.58%

0.71%

   Cost of funds (total earning assets)

0.44%

0.43%

0.40%

0.42%

0.44%

0.42%

0.54%

   Cost of funds (total assets)

0.40%

0.40%

0.37%

0.39%

0.41%

0.39%

0.50%

PURCHASE ACCOUNTING ADJUSTMENTS

   Loan portfolio - increase interest income

$

1,074

1,354

1,494

1,416

1,507

5,338

3,194

   Time deposits - reduce interest expense

$

0

196

587

588

588

1,371

1,372

   FHLB advances - reduce interest expense

$

0

0

11

11

11

22

26

   Trust preferred - increase interest expense

$

171

171

171

171

171

684

399

   Core deposit intangible - increase overhead

$

715

715

768

794

794

2,992

1,853

CAPITAL

   Tangible equity to tangible assets

9.56%

9.44%

9.44%

9.54%

9.30%

9.56%

9.30%

   Tier 1 leverage capital ratio

11.56%

11.52%

11.58%

11.61%

11.15%

11.56%

11.15%

   Common equity risk-based capital ratio

10.89%

10.95%

10.94%

11.17%

NA

10.89%

NA

   Tier 1 risk-based capital ratio

12.83%

12.94%

12.97%

13.22%

13.57%

12.83%

13.57%

   Total risk-based capital ratio

13.45%

13.58%

13.63%

14.07%

14.43%

13.45%

14.43%

   Tier 1 capital

$

329,858

324,911

325,304

326,947

314,752

329,858

314,752

   Tier 1 plus tier 2 capital

$

345,539

341,029

341,865

347,997

334,793

345,539

334,793

   Total risk-weighted assets

$

2,570,015

2,511,174

2,509,001

2,473,399

2,319,404

2,570,015

2,319,404

   Book value per common share

$

20.41

20.20

19.85

19.69

19.33

20.41

19.33

   Tangible book value per common share

$

16.61

16.34

16.02

15.89

15.49

16.61

15.49

   Cash dividend per common share

$

0.15

0.15

0.14

0.14

0.12

0.58

2.48

ASSET QUALITY

   Gross loan charge-offs

$

1,266

182

4,383

448

466

6,279

1,502

   Recoveries

$

328

239

494

1,858

132

2,919

1,721

   Net loan charge-offs (recoveries)

$

938

(57)

3,889

(1,410)

334

3,360

(219)

   Net loan charge-offs to average loans

0.17%

(0.01%)

0.73%

(0.27%)

0.06%

0.15%

(0.01%)

   Allowance for loan losses

$

15,681

16,119

16,561

21,050

20,041

15,681

20,041

   Allowance to originated loans

0.94%

1.04%

1.10%

1.58%

1.54%

0.94%

1.54%

   Nonperforming loans

$

5,444

8,214

8,103

26,267

29,434

5,444

29,434

   Other real estate/repossessed assets

$

1,293

2,272

2,033

1,664

1,995

1,293

1,995

   Nonperforming loans to total loans

0.24%

0.37%

0.37%

1.24%

1.41%

0.24%

1.41%

   Nonperforming assets to total assets

0.23%

0.36%

0.35%

0.97%

1.09%

0.23%

1.09%

NONPERFORMING ASSETS - COMPOSITION

   Residential real estate:

      Land development

$

23

378

380

383

413

23

413

      Construction

$

0

0

0

0

0

0

0

      Owner occupied / rental

$

3,515

3,714

3,316

3,224

4,951

3,515

4,951

   Commercial real estate:

      Land development

$

155

170

184

197

209

155

209

      Construction

$

0

0

0

0

0

0

0

      Owner occupied  

$

2,743

2,741

2,726

17,634

18,338

2,743

18,338

      Non-owner occupied

$

191

3,193

3,286

910

1,075

191

1,075

   Non-real estate:

      Commercial assets

$

69

271

212

5,565

6,401

69

6,401

      Consumer assets

$

41

19

32

18

42

41

42

   Total nonperforming assets

6,737

10,486

10,136

27,931

31,429

6,737

31,429

NONPERFORMING ASSETS - RECON

   Beginning balance

$

10,486

10,136

27,931

31,429

8,730

31,429

9,569

   Additions - originated loans

$

927

1,161

2,972

584

24,734

5,639

26,287

   Merger-related activity

$

656

163

166

105

160

1,090

2,177

   Return to performing status

$

(48)

0

0

(5)

(779)

(48)

(779)

   Principal payments

$

(3,457)

(567)

(16,414)

(3,203)

(227)

(23,641)

(2,063)

   Sale proceeds

$

(1,300)

(319)

(220)

(538)

(982)

(2,377)

(3,183)

   Loan charge-offs

$

(172)

(65)

(4,236)

(371)

(145)

(4,844)

(313)

   Valuation write-downs

$

(355)

(23)

(63)

(70)

(62)

(511)

(266)

   Ending balance

$

6,737

10,486

10,136

27,931

31,429

6,737

31,429

LOAN PORTFOLIO COMPOSITION

   Commercial:

      Commercial & industrial

$

696,303

643,118

622,073

587,675

550,629

696,303

550,629

      Land development & construction

$

45,120

47,734

47,622

56,050

51,977

45,120

51,977

      Owner occupied comm'l R/E

$

445,919

427,016

422,354

431,995

430,406

445,919

430,406

      Non-owner occupied comm'l R/E

$

644,351

636,227

603,724

566,152

559,594

644,351

559,594

      Multi-family & residential rental

$

115,003

123,525

124,658

117,477

122,772

115,003

122,772

         Total commercial

$

1,946,696

1,877,620

1,820,431

1,759,349

1,715,378

1,946,696

1,715,378

   Retail:

      1-4 family mortgages

$

190,385

193,003

201,907

208,425

214,696

190,385

214,696

      Home equity & other consumer

$

140,646

146,765

149,494

152,986

159,203

140,646

159,203

         Total retail

$

331,031

339,768

351,401

361,411

373,899

331,031

373,899

         Total loans

$

2,277,727

2,217,388

2,171,832

2,120,760

2,089,277

2,277,727

2,089,277

END OF PERIOD BALANCES

   Loans

$

2,277,727

2,217,388

2,171,832

2,120,760

2,089,277

2,277,727

2,089,277

   Securities

$

354,559

374,740

381,013

427,392

446,611

354,559

446,611

   Other interest-earning assets

$

47,062

60,106

93,620

106,146

128,984

47,062

128,984

   Total earning assets (before allowance)

$

2,679,348

2,652,234

2,646,465

2,654,298

2,664,872

2,679,348

2,664,872

   Total assets

$

2,903,556

2,881,377

2,875,944

2,877,184

2,893,379

2,903,556

2,893,379

   Noninterest-bearing deposits

$

674,568

619,125

612,222

568,843

558,738

674,568

558,738

   Interest-bearing deposits

$

1,600,814

1,635,004

1,666,572

1,710,681

1,718,177

1,600,814

1,718,177

   Total deposits

$

2,275,382

2,254,129

2,278,794

2,279,524

2,276,915

2,275,382

2,276,915

   Total borrowed funds

$

281,830

284,919

258,599

254,365

279,790

281,830

279,790

   Total interest-bearing liabilities

$

1,882,644

1,919,923

1,925,171

1,965,046

1,997,967

1,882,644

1,997,967

   Shareholders' equity

$

333,804

328,820

328,971

332,788

328,138

333,804

328,138

AVERAGE BALANCES

   Loans

$

2,243,856

2,201,124

2,147,040

2,119,464

2,085,844

2,178,276

1,653,605

   Securities

$

362,390

378,286

404,311

440,380

459,920

396,079

340,771

   Other interest-earning assets

$

75,111

64,027

89,357

87,620

109,128

78,953

94,851

   Total earning assets (before allowance)

$

2,681,357

2,643,437

2,640,708

2,647,464

2,654,892

2,653,308

2,089,227

   Total assets

$

2,909,210

2,876,671

2,865,427

2,873,032

2,889,475

2,881,497

2,269,913

   Noninterest-bearing deposits

$

656,475

621,324

591,500

557,603

561,031

606,750

407,870

   Interest-bearing deposits

$

1,631,218

1,652,306

1,681,437

1,723,684

1,736,242

1,672,140

1,391,818

   Total deposits

$

2,287,693

2,273,630

2,272,937

2,281,287

2,297,273

2,278,890

1,799,688

   Total borrowed funds

$

276,585

263,264

251,996

251,418

254,290

260,891

208,572

   Total interest-bearing liabilities

$

1,907,803

1,915,570

1,933,433

1,975,102

1,990,532

1,933,031

1,600,390

   Shareholders' equity

$

330,032

328,332

330,126

329,246

324,075

329,787

250,879

 

SOURCE Mercantile Bank Corporation



RELATED LINKS

https://www.mercbank.com