Mercantile Bank Corporation Reports Third Quarter 2012 Results

Improved asset quality, increased profitability and declared quarterly dividend

Oct 16, 2012, 06:05 ET from Mercantile Bank Corporation

GRAND RAPIDS, Mich., Oct. 16, 2012 /PRNewswire/ -- Mercantile Bank Corporation (NASDAQ: MBWM) ("Mercantile") reported net income attributable to common shares of $2.6 million, or $0.30 per diluted share, for the third quarter of 2012, compared with net income attributable to common shares of $2.7 million, or $0.30 per diluted share, for the prior-year period.  On a pre-tax basis, income was $3.9 million in the third quarter of 2012 compared to $3.0 million in the prior-year third quarter, an increase of 27.5 percent.

The third quarter was highlighted by:

  • Continued growth in profitability as asset quality continues to improve
  • Nonperforming assets declined 37 percent from a year ago and 69 percent since peak in early 2010
  • Level of loans in the 30- to 89-days delinquent category remains at virtually zero
  • Improvement in net interest margin from previous quarter and on year-over-year basis
  • Regulatory capital ratios remain significantly above minimum requirements for "well-capitalized" institutions
  • Reinstatement of a quarterly dividend at $0.09 per common share, or a current yield of approximately 2%

"We are pleased to report another quarter of solid earnings which marks seven consecutive quarters of profitability driven by continued improvements in several key areas," said Michael Price, Chairman and CEO of Mercantile Bank Corporation.  "Our strong earnings momentum and the work we have done to build our capital structure have positioned us for future growth.  Our business model remains focused on achieving and maintaining excellent asset quality, continued improvement of profitability, protecting our margin and further strengthening of the balance sheet."  

Operating Results

Total revenue, which consists of net interest income and noninterest income, was $13.6 million during the 2012 third quarter, down $0.5 million or 3.2 percent from the $14.1 million generated during the third quarter of 2011, primarily reflecting a reduction in earning assets.  Net interest income was $11.6 million, down $0.7 million or 5.8 percent from the $12.3 million earned in the prior-year third quarter. The decrease in net interest income resulted from a 10.2 percent decline in average earning assets as part of management's strategic initiative to reduce commercial real estate exposure and migrate certain high risk loans out of the loan portfolio. The net interest margin during the third quarter of 2012 was 3.67 percent, 17 basis points higher than the level during the third quarter of 2011 and well above the historical average level.

Noninterest income for the 2012 third quarter was $2.1 million, up $0.3 million or 14.0 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 $0.4 million provision for loan losses during the third quarter of 2012 compared to a provision expense of $1.1 million for the year-ago quarter. The negative provision expense is the result of several factors, including continued progress towards loan recoveries and collections as well as a reduced level of loan-rating downgrades and ongoing loan-rating upgrades.

Noninterest expense for the 2012 third quarter was $10.2 million, up $0.2 million from the same period in 2011. Salaries and benefits totaled $4.8 million, up $0.2 million from the prior-year quarter, primarily reflecting expense associated with reinstating certain employee benefit programs that had been suspended or reduced 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 $1.6 million during the third quarters of 2011 and 2012, reflecting the continuation of Mercantile's aggressive approach to managing and resolving problem assets.  Federal Deposit Insurance Corporation insurance premiums were $0.3 million in the third quarter of 2012, down $0.3 million from the 2011 third quarter, primarily resulting from a decreased assessment rate that reflects the Company's improved financial condition and operating performance.   

Mr. Price continued: "Our financial results reflect an aggressive stance toward right-sizing our operations and asset base to sustain our operating performance and increase profitability.  Our enhanced financial condition and capital strength are serving us well as we continue on our path of disciplined growth for long-term performance." 

Balance Sheet

Mercantile has steadily reduced its exposure to loans secured by commercial real estate over the past several years.  While the rate of decline has slowed as a slight improvement of economic conditions has led to increased lending opportunities, efforts to reduce certain segments of the commercial real estate portfolio continue.  Despite competitive pressures and economic uncertainty that continue to negatively impact the loan portfolio, during the third quarter of 2012 approximately $20 million of new loans were originated.  As of September 30, 2012, total assets were $1.39 billion, down $44.9 million or 3.1 percent from December 31, 2011; total loans decreased $37.1 million, or 3.5 percent, to $1.04 billion over the same period.  Compared to September 30, 2011, total assets declined $89.6 million, or 6.1 percent, and total loans declined $58.7 million, or 5.4 percent.

Real estate loans comprise a majority of Mercantile's loan portfolio. At September 30, 2012, real estate loans, excluding residential mortgage loans representing permanent financing of owner-occupied dwellings and home equity lines of credit, were $674 million or approximately 65 percent of total loans, representing a decline of $68.2 million, or 9.2 percent, from $742 million, or 67.8 percent of total loans, at September 30, 2011.

Non-owner-occupied commercial real estate ("CRE") loans totaled $333 million as of September 30, 2012 (32.2 percent of total loans), a decline of $63.9 million over the past 12 months. Owner-occupied CRE loans were $271 million at the end of the third quarter of 2012, an increase of $1.6 million from a year ago. Vacant land, land development and construction ("C&D") loans, including both residential and commercial projects, totaled $62.5 million at September 30, 2012, down $4.9 million from a year ago. The commercial and industrial ("C&I") segment of the loan portfolio was $272 million at September 30, 2012, an increase of $11.2 million since year-end 2011 and an increase of $14.7 million over the past 12 months.  The average balance of commercial lines of credit has remained relatively stable since early 2011.

 

LOANS SECURED BY REAL ESTATE

($000s)

9/30/12

6/30/12

3/31/12

12/31/11

9/30/11

Residential-Related:

   Vacant Land

$

6,042

$

5,435

$

5,591

$

5,679

$

5,673

   Land Development

14,639

15,256

16,173

17,007

17,441

   Construction

4,031

4,055

4,318

4,923

4,647

24,712

24,746

26,082

27,609

27,761

Comm'l Non-Owner Occupied:

   Vacant Land

8,793

8,827

9,255

10,555

11,082

   Land Development

13,798

14,355

14,418

14,486

14,541

   Construction

9,877

15,424

16,936

13,615

11,061

   Commercial Buildings

333,407

350,762

357,128

376,805

397,279

365,875

389,368

397,737

415,461

433,963

Comm'l Owner Occupied:

   Construction

5,316

3,751

6,198

4,213

2,986

   Other

6,617

6,811

7,246

7,445

7,591

   Commercial Buildings

271,364

281,519

273,376

268,479

269,776

283,297

292,081

286,820

280,137

280,353

      Total

$

673,884

$

706,195

$

710,639

$

723,207

$

742,077

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

                equity lines of credit.

Since December 2008, Mercantile has focused on improving liquidity by reducing wholesale funding and growing local deposits, especially interest-bearing checking and money market deposit accounts. As of September 30, 2012, total deposits were $1.11 billion, a decline of $492 million since year-end 2008. By comparison, local deposits increased $357 million to $827 million since year-end 2008, representing 74.7 percent of total deposits compared to 29.4 percent at December 31, 2008. Approximately 72 percent, or $257 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 $56.2 million, or about 16 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 $315 million, or 26.2 percent of total funds, as of September 30, 2012, compared to $1.41 billion, or 71.5 percent of total funds, as of December 31, 2008. The $1.10 billion decline in wholesale funding since the end of 2008 reflects both the shift toward local deposits, as well as an $822 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 $83.4 million during the third quarter of 2012. In addition to its short-term investments, at the end of the third quarter of 2012, Mercantile had approximately $150 million of borrowing capacity through various established lines of credit to meet potential funding needs, as well as $36.0 million of U.S. Government securities available to sell.

Asset Quality

Nonperforming assets ("NPAs") at September 30, 2012 were $35.9 million, or 2.6 percent of total assets, compared to $60.4 million as of December 31, 2011, and $56.8 million as of September 30, 2011 (4.2 percent and 3.8 percent of total assets, respectively). This represents a decline of $24.4 million or 40.4 percent from the end of 2011, and a decline of $20.9 million or 36.8 percent from the year-ago quarter-end.

Robert B. Kaminski, Jr., Mercantile's Executive Vice President and Chief Operating Officer, noted: "We are pleased with the continued improvement in our asset quality.  During the third quarter, we witnessed a further contraction of nonperforming assets which was driven by a decline in nonperforming loans, and our 30-to 89-day delinquent loans remain virtually at zero. While we continue to dedicate resources towards moving our troubled assets off the balance sheet, we are encouraged by our progress thus far and the position it has afforded us as we face growing competition in our markets.  Despite these competitive pressures in our markets, we are benefiting from our robust sales programs and marketing initiatives as evidenced by our strong commercial loan pipeline.  Going forward, we will continue to leverage our relationship-based approach towards client acquisition to drive sustainable growth in our markets."

Nonperforming loans ("NPLs") totaled $24.8 million as of September 30, 2012, down $3.7 million and $14.8 million, respectively, from the linked quarter-end and the year-ago quarter-end, while foreclosed real estate and repossessed assets declined $0.4 million and $6.1 million, respectively, from the linked and year-ago quarter-ends.  CRE loans represented 62.5 percent of NPLs, or $15.5 million at September 30, 2012.  Investor-owned nonperforming CRE loans accounted for $11.2 million of total CRE nonperforming loans (3.4 percent of $333 million investor-owned CRE loans), while owner-occupied CRE nonperforming loans accounted for $4.2 million (1.6 percent of $271 million owner-occupied CRE loans).

Nonperforming C&D loans were $3.0 million as of September 30, 2012, a decrease of $0.3 million since the year-ago quarter-end.  Nonperforming C&I loans were $1.4 million as of September 30, 2012, a decline of $2.5 million since September 30, 2011. Owner-occupied and rental residential NPLs were $5.0 million as of September 30, 2012, down $2.4 million since the year-ago quarter-end.

NONPERFORMING ASSETS

($000s)

9/30/12

6/30/12

3/31/12

12/31/11

9/30/11

Residential Real Estate:

   Land Development

$

3,318

$

3,946

$

3,762

$

5,479

$

8,139

   Construction

645

965

1,242

1,397

1,418

   Owner Occupied / Rental

5,426

5,982

6,437

7,138

7,737

9,389

10,893

11,441

14,014

17,294

Commercial Real Estate:

   Land Development

1,158

1,174

1,531

2,111

1,885

   Construction

0

0

403

409

0

   Owner Occupied 

6,395

6,850

7,687

10,642

11,287

   Non-Owner Occupied

17,613

19,386

28,954

30,106

22,435

25,166

27,410

38,575

43,268

35,607

Non-Real Estate:

   Commercial Assets

1,386

1,765

2,144

3,060

3,897

   Consumer Assets

1

1

14

14

29

1,387

1,766

2,158

3,074

3,926

      Total

$

35,942

$

40,069

$

52,174

$

60,356

$

56,827

 

During the third quarter of 2012, Mercantile added only $0.2 million of NPAs to its problem asset portfolio, while disposing of $4.3 million through a combination of asset sales and principal pay-downs ($2.4 million), loan charge-offs ($1.0 million), and foreclosed asset valuation write-downs ($0.9 million). In total, NPAs decreased by a net $4.1 million during the third quarter of 2012.

Improvement in asset quality is also apparent on a full-year basis. During the 12-month period ended September 30, 2012, Mercantile added $23.3 million of problem assets to its NPA portfolio, successfully disposed of $36.1 million, and charged off or wrote down an additional $8.1 million.  In total, NPAs declined by a net $20.9 million since September 30, 2011.

NONPERFORMING ASSETS RECONCILIATION

($000s)

3Q 2012

2Q 2012

1Q 2012

4Q 2011

3Q 2011

Beginning balance

$

40,069

$

52,174

$

60,356

$

56,827

$

61,895

Additions

158

3,306

9,651

10,188

3,740

Returns to performing

   status

0

0

(737)

0

0

Principal payments

(1,245)

(11,357)

(5,533)

(2,115)

(5,058)

Sale proceeds

(1,190)

(1,586)

(9,282)

(3,038)

(2,670)

Loan charge-offs

(1,003)

(1,337)

(1,691)

(890)

(476)

Valuation write-downs

(847)

(1,131)

(590)

(616)

(604)

      Total

$

35,942

$

40,069

$

52,174

$

60,356

$

56,827

Net loan charge-offs were $1.5 million during the third quarter of 2012, or an annualized 0.6 percent of average loans, compared with net loan recoveries of $1.7 million (negative 0.7 percent annualized) and net loan charge-offs of $0.5 million (0.2 percent annualized) for the linked and prior-year quarters, respectively.  Approximately 90 percent of the gross loan charge-offs during the third quarter of 2012 were specifically reserved for as of June 30, 2012.

NET LOAN CHARGE-OFFS (RECOVERIES)

($000s)

3Q 2012

2Q 2012

1Q 2012

4Q 2011

3Q 2011

Residential Real Estate:

   Land Development

$

77

$

(110)

$

38

$

15

$

135

   Construction

0

10

0

(90)

(11)

   Owner Occupied / Rental

166

50

237

1,176

(187)

243

(50)

275

1,101

(63)

Commercial Real Estate:

   Land Development

16

(7)

103

(75)

47

   Construction

0

0

0

0

0

   Owner Occupied 

86

(164)

793

68

(18)

   Non-Owner Occupied

1,317

(1,525)

4,341

4,060

639

1,419

(1,696)

5,237

4,053

668

Non-Real Estate:

   Commercial Assets

(148)

(14)

81

(435)

(162)

   Consumer Assets

13

14

(4)

0

26

(135)

0

77

(435)

(136)

      Total

$

1,527

$

(1,746)

$

5,589

$

4,719

$

469

Capital Position

Shareholders' equity totaled $145 million as of September 30, 2012, a decrease of $20.4 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.  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 repurchases, the Bank paid cash dividends to the Company in approximately the same amounts. The Bank remains "well-capitalized" with a total risk-based capital ratio of 14.5 percent as of September 30, 2012, compared to 15.5 percent at December 31, 2011.  At September 30, 2012, the Bank had approximately $53.0 million in excess of the 10.0 percent minimum regulatory threshold required to be considered a "well-capitalized" institution.  Mercantile reported 8,635,070 total shares outstanding at September 30, 2012.

Reflecting the repurchase of the preferred stock and warrant that were sold to the U.S. Department of the Treasury, together with the continued strength of Mercantile's operating performance and capital position, the Board of Directors declared a fourth quarter dividend of $0.09 per common share.  This is the first dividend paid since a reduced dividend of $0.01 per share was paid in the first quarter of 2010.

Mr. Price concluded: "Throughout the economic downturn our priority has always remained to enhance our capital position while increasing value for our shareholders.  Our sustained earnings growth and improved financial condition have brought us to yet another milestone, which is the Board of Directors' approval of the reinstatement of our quarterly dividend at the $0.09 per share level.  We are pleased to reward our shareholders and distribute competitive cash returns in the form of dividends."   

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

CONSOLIDATED BALANCE SHEETS

SEPTEMBER 30,

DECEMBER 31,

SEPTEMBER 30,

2012

2011

2011

(Unaudited)

(Audited)

(Unaudited)

ASSETS

   Cash and due from banks

$

15,311,000

$

12,402,000

$

18,890,000

   Interest-bearing deposit balances

10,672,000

9,641,000

9,630,000

   Federal funds sold

78,012,000

54,329,000

97,183,000

      Total cash and cash equivalents

103,995,000

76,372,000

125,703,000

   Securities available for sale

135,660,000

172,992,000

173,134,000

   Federal Home Loan Bank stock

11,961,000

11,961,000

11,961,000

   Loans

1,035,288,000

1,072,422,000

1,094,037,000

   Allowance for loan losses

(27,762,000)

(36,532,000)

(39,351,000)

      Loans, net

1,007,526,000

1,035,890,000

1,054,686,000

   Premises and equipment, net

26,100,000

26,802,000

26,865,000

   Bank owned life insurance

49,690,000

48,520,000

48,083,000

   Accrued interest receivable

3,939,000

4,403,000

4,887,000

   Other real estate owned and repossessed assets

11,160,000

15,282,000

17,287,000

   Net deferred tax asset

22,801,000

26,013,000

0

   Other assets

15,532,000

14,994,000

15,379,000

      Total assets

$

1,388,364,000

$

1,433,229,000

$

1,477,985,000

LIABILITIES AND SHAREHOLDERS' EQUITY

   Deposits:

      Noninterest-bearing

$

166,890,000

$

147,031,000

$

144,022,000

      Interest-bearing

940,676,000

965,044,000

1,041,311,000

         Total deposits

1,107,566,000

1,112,075,000

1,185,333,000

   Securities sold under agreements to repurchase

60,031,000

72,569,000

69,340,000

   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

1,433,000

1,434,000

1,714,000

   Accrued interest and other liabilities

6,786,000

4,162,000

6,875,000

         Total liabilities

1,243,806,000

1,268,230,000

1,341,252,000

SHAREHOLDERS' EQUITY

   Preferred stock, net of discount

0

20,331,000

20,266,000

   Common stock

166,728,000

173,979,000

173,972,000

   Retained earnings (deficit)

(24,183,000)

(32,639,000)

(62,630,000)

   Accumulated other comprehensive income

2,013,000

3,328,000

5,125,000

      Total shareholders' equity

144,558,000

164,999,000

136,733,000

      Total liabilities and shareholders' equity

$

1,388,364,000

$

1,433,229,000

$

1,477,985,000

MERCANTILE BANK CORPORATION

CONSOLIDATED REPORTS OF OPERATIONS

THREE MONTHS ENDED

THREE MONTHS ENDED

NINE MONTHS ENDED

NINE MONTHS ENDED

September 30, 2012

September 30, 2011

September 30, 2012

September 30, 2011

(Unaudited)

(Unaudited)

(Unaudited)

(Unaudited)

INTEREST INCOME

   Loans, including fees

$

13,386,000

$

14,951,000

$

40,653,000

$

47,854,000

   Investment securities

1,328,000

2,027,000

4,460,000

6,653,000

   Federal funds sold

46,000

60,000

116,000

138,000

   Interest-bearing deposit balances

8,000

6,000

22,000

18,000

      Total interest income

14,768,000

17,044,000

45,251,000

54,663,000

INTEREST EXPENSE

   Deposits

2,728,000

4,040,000

8,581,000

13,007,000

   Short-term borrowings

39,000

73,000

130,000

350,000

   Federal Home Loan Bank advances

183,000

410,000

871,000

1,622,000

   Other borrowed money

234,000

226,000

705,000

782,000

      Total interest expense

3,184,000

4,749,000

10,287,000

15,761,000

      Net interest income

11,584,000

12,295,000

34,964,000

38,902,000

Provision for loan losses

(400,000)

1,100,000

(3,400,000)

5,000,000

      Net interest income after

         provision for loan losses

11,984,000

11,195,000

38,364,000

33,902,000

NONINTEREST INCOME

   Service charges on accounts

378,000

405,000

1,142,000

1,228,000

   Other income

1,679,000

1,399,000

4,789,000

4,031,000

      Total noninterest income

2,057,000

1,804,000

5,931,000

5,259,000

NONINTEREST EXPENSE

   Salaries and benefits

4,849,000

4,636,000

14,394,000

13,371,000

   Occupancy

598,000

707,000

1,947,000

2,116,000

   Furniture and equipment

282,000

305,000

888,000

912,000

   Nonperforming asset costs

1,576,000

1,589,000

4,931,000

6,637,000

   FDIC insurance costs

294,000

639,000

894,000

2,274,000

   Other expense

2,586,000

2,099,000

7,389,000

6,689,000

      Total noninterest expense

10,185,000

9,975,000

30,443,000

31,999,000

      Income before federal income

         tax expense

3,856,000

3,024,000

13,852,000

7,162,000

Federal income tax expense

1,240,000

0

4,365,000

0

      Net income

2,616,000

3,024,000

9,487,000

7,162,000

Preferred stock dividends and accretion

0

342,000

1,030,000

1,011,000

      Net income attributable to

         common shares

$

2,616,000

$

2,682,000

$

8,457,000

$

6,151,000

   Basic earnings per share

$0.30

$0.31

$0.98

$0.72

   Diluted earnings per share

$0.30

$0.30

$0.95

$0.69

   Average basic shares outstanding

8,622,719

8,604,263

8,612,831

8,602,654

   Average diluted shares outstanding

8,653,751

8,868,122

8,896,728

8,875,025

MERCANTILE BANK CORPORATION

CONSOLIDATED FINANCIAL HIGHLIGHTS

(Unaudited)

Quarterly

Year-To-Date

2012

2012

2012

2011

2011

(dollars in thousands except per share data)

3rd Qtr

2nd Qtr

1st Qtr

4th Qtr

3rd Qtr

2012

2011

EARNINGS

   Net interest income

$

11,584

11,511

11,869

12,335

12,295

34,964

38,902

   Provision for loan losses

$

(400)

(3,000)

0

1,900

1,100

(3,400)

5,000

   Noninterest income

$

2,057

1,940

1,934

2,023

1,804

5,931

5,259

   Noninterest expense

$

10,185

10,604

9,654

9,497

9,975

30,443

31,999

   Net income before federal income

      tax expense

$

3,856

5,847

4,149

2,961

3,024

13,852

7,162

   Net income

$

2,616

3,991

2,880

30,322

3,024

9,487

7,162

   Net income common shares

$

2,616

3,288

2,552

29,991

2,682

8,457

6,151

   Basic earnings per share

$

0.30

0.38

0.30

3.49

0.31

0.98

0.72

   Diluted earnings per share

$

0.30

0.36

0.28

3.37

0.30

0.95

0.69

   Average basic shares outstanding

8,622,719

8,610,181

8,605,484

8,604,240

8,604,263

8,612,831

8,602,654

   Average diluted shares outstanding

8,653,751

9,043,791

8,991,422

8,888,900

8,868,122

8,896,728

8,875,025

PERFORMANCE RATIOS

   Return on average assets

0.75%

0.94%

0.73%

8.22%

0.71%

0.80%

0.53%

   Return on average equity

7.19%

8.46%

6.14%

85.19%

7.89%

7.24%

6.32%

   Net interest margin (fully tax-equivalent)

3.67%

3.63%

3.73%

3.65%

3.50%

3.67%

3.58%

   Efficiency ratio

74.66%

78.83%

69.94%

66.14%

70.75%

74.44%

72.46%

   Full-time equivalent employees

230

231

225

232

237

230

237

CAPITAL

   Period-ending equity to assets

10.41%

10.80%

11.92%

11.51%

9.25%

10.41%

9.25%

   Tier 1 leverage capital ratio

11.40%

11.42%

12.66%

12.09%

10.87%

11.40%

10.87%

   Tier 1 risk-based capital ratio

13.34%

13.33%

14.87%

14.19%

13.24%

13.34%

13.24%

   Total risk-based capital ratio

14.61%

14.59%

16.14%

15.46%

14.51%

14.61%

14.51%

   Book value per common share

$

16.74

17.38

16.97

16.73

13.45

16.74

13.45

   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

$

1,891

1,708

7,576

5,791

1,342

11,175

14,106

   Net loan charge-offs

$

1,527

(1,746)

5,589

4,719

469

5,370

11,017

   Net loan charge-offs to average loans

0.58%

(0.66%)

2.10%

1.75%

0.17%

0.68%

1.25%

   Allowance for loan losses

$

27,762

29,689

30,943

36,532

39,351

27,762

39,351

   Allowance for loan losses to total loans

2.68%

2.80%

2.94%

3.41%

3.60%

2.68%

3.60%

   Nonperforming loans

$

24,782

28,524

38,668

45,074

39,540

24,782

39,540

   Other real estate and repossessed assets

$

11,160

11,545

13,506

15,282

17,287

11,160

17,287

   Nonperforming assets to total assets

2.59%

2.89%

3.72%

4.21%

3.84%

2.59%

3.84%

END OF PERIOD BALANCES

   Loans

$

1,035,288

1,060,996

1,051,674

1,072,422

1,094,037

1,035,288

1,094,037

   Total earning assets (before allowance)

$

1,271,593

1,264,609

1,284,982

1,321,345

1,385,945

1,271,593

1,385,945

   Total assets

$

1,388,364

1,385,245

1,401,596

1,433,229

1,477,985

1,388,364

1,477,985

   Deposits

$

1,107,566

1,105,630

1,093,434

1,112,075

1,185,333

1,107,566

1,185,333

   Shareholders' equity

$

144,558

149,662

167,084

164,999

136,733

144,558

136,733

AVERAGE BALANCES

   Loans

$

1,042,370

1,067,933

1,065,285

1,072,851

1,111,184

1,058,470

1,174,223

   Total earning assets (before allowance)

$

1,269,836

1,290,066

1,294,380

1,358,585

1,414,722

1,284,706

1,472,095

   Total assets

$

1,387,519

1,407,400

1,409,953

1,448,000

1,504,640

1,401,572

1,557,717

   Deposits

$

1,109,817

1,109,160

1,095,147

1,152,001

1,211,863

1,104,739

1,241,575

   Shareholders' equity

$

144,251

155,931

166,846

139,676

134,862

155,634

130,203

SOURCE Mercantile Bank Corporation



RELATED LINKS

https://www.mercbank.com