Mercantile Bank Corporation Reports Strong Third Quarter 2015 Results
Diluted earnings per share increased 15 percent compared to linked quarter
Continued strength in loan originations
GRAND RAPIDS, Mich., Oct. 20, 2015 /PRNewswire/ -- Mercantile Bank Corporation (NASDAQ: MBWM) ("Mercantile") reported net income of $7.3 million, or $0.45 per diluted share, for the third quarter of 2015, compared with net income of $5.9 million, or $0.35 per diluted share, for the prior-year period. The third quarter of 2014 results included $1.3 million in pre-tax merger-related costs associated with the merger with Firstbank Corporation ("Firstbank"), which amounted to $0.9 million after tax, or $0.05 per share. Excluding these costs, adjusted net income in the year-ago quarter was $6.8 million and adjusted earnings per diluted share was $0.40.
Third quarter 2015 highlights:
- Core profitability and capital remain strong
- Net interest margin is stable and robust
- Strong mortgage banking income
- New commercial term loan originations of approximately $145 million
- Commercial loan pipeline remains strong
- Volume of loans past due 30- to 89-days remains very low
- Approximately 765,000 shares repurchased during the first nine months of 2015
- Cash dividend on common stock resulting in current annual yield of 2.8 percent
- The bank received an "Outstanding" rating for the third consecutive Community Reinvestment Act examination
"We are very pleased with our third quarter results, which continue the momentum generated during the first half of 2015," said Michael Price, Chairman, President and Chief Executive Officer of Mercantile. "The sustained strength in core profitability was expected in light of our stable and robust net interest margin, the full realization of the quarterly cost savings resulting from our merger with Firstbank, and strong asset quality. Based on our current loan pipeline and continuing success in developing new relationships, we are confident that we can continue to grow the loan portfolio at a solid rate in upcoming periods."
Operating Results
Total revenue, which consists of net interest income and noninterest income, was $29.9 million during the third quarter of 2015, up $1.0 million or 3.5 percent from the prior-year third quarter. Net interest income during the third quarter of 2015 was $25.6 million, down $0.4 million or 1.4 percent from the third quarter of 2014, reflecting a slight decrease in the net interest margin, which more than offset higher average earning assets.
The net interest margin was 3.87 percent in the third quarter of 2015, continuing a relatively stable trend over the past five quarters during which the margin ranged from 3.79 percent to 3.95 percent. The yield on loans generally declined over the past five 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 83 percent of average earning assets during the third quarter of 2015, up from approximately 79 percent during the third quarter of 2014. Compared to the second quarter of 2015, the yield on total earning assets increased seven basis points despite the continuing low interest rate environment and competitive pressures on loan yields, in large part due to the collection of prepayment fees on certain commercial loans that were paid off during the current quarter.
Noninterest income during the third quarter of 2015 was $4.3 million, up $1.4 million or 47.5 percent from the prior-year third quarter. The increase in noninterest income was mainly attributable to higher levels of mortgage banking income and credit and debit card income. The ongoing low interest rate environment and increased purchase activity in Mercantile's market areas have resulted in increased mortgage banking income. Compared to the second quarter of 2015, mortgage banking income increased $0.1 million, or approximately 7 percent.
Mercantile recorded a negative $0.5 million provision for loan losses during the third quarter of 2015 compared to a negative $0.4 million provision during the respective 2014 period. The negative provisions are the result of several factors, including recoveries of previously charged-off loans, reversals of specific reserves and ongoing loan-rating upgrades as the quality of the loan portfolio continues to improve.
Noninterest expense totaled $19.7 million during the third quarter of 2015, down $1.0 million or 5.1 percent from the prior-year third quarter. The decrease in noninterest expense was mainly due to lower merger-related costs, which more than offset higher data processing costs. Merger-related costs of $1.3 million were incurred during the third quarter of 2014.
Mr. Price continued: "While we are pleased with our operating results, we continue to identify opportunities to enhance our fee revenue and reduce costs, which we expect will have a positive impact on future profitability. Our net interest margin has remained stable and strong, in large part reflecting a low cost deposit base absorbed through the merger with Firstbank, our disciplined approach to loan pricing, and the ongoing strategic initiative to fund loan growth through reductions in lower-yielding securities."
"We are also very pleased to report that Mercantile Bank of Michigan has recently received an 'Outstanding' rating for its performance under the Community Reinvestment Act for the third consecutive examination," continued Mr. Price. "The 'Outstanding' rating is achieved by only about five percent of banks. We are extremely proud of our investment and involvement in the communities that we serve and are a part of."
Balance Sheet
Total loans increased $128.1 million, or 6.1 percent, to $2.22 billion in the first nine months of 2015. Loan growth in the nine-month period was at an approximately 8 percent annualized rate. As of September 30, 2015, total assets were $2.88 billion, down $12.0 million or 0.4 percent from December 31, 2014. Compared to September 30, 2014, total assets increased $18.3 million, or 0.6 percent, and total loans increased $149 million, or 7.2 percent.
Approximately $145 million and $365 million in new commercial term loans to new and existing borrowers were originated during the third quarter and first nine months of 2015, respectively, as ongoing sales and relationship building efforts have led to increased lending opportunities. As of September 30, 2015, unfunded commitments on commercial construction and development loans totaled approximately $100 million, which are expected to be largely funded over the next 12 to 18 months.
Robert B. Kaminski, Jr., Mercantile's Executive Vice President and Chief Operating Officer, noted: "We are very pleased with the level of loan growth during the third quarter of 2015, especially when considering that we experienced several sizeable commercial loan payoffs during the period. As expected, new loan originations accelerated during the current quarter, as our lending staff continued to develop new relationships in our market areas and meet the credit needs of our existing customers while also focusing on credit quality and appropriate pricing. With our strong lending team, a robust current loan pipeline and consistent focus on identifying new loan prospects, we remain very optimistic regarding the loan growth opportunities in our markets."
Commercial-related real estate loans continue to comprise a majority of Mercantile's loan portfolio, representing 56 percent of total loans as of September 30, 2015. Non-owner occupied commercial real estate ("CRE") loans and owner-occupied CRE loans equaled 29 percent and 19 percent of total loans, respectively, as of September 30, 2015. Commercial and industrial loans represented 29 percent of total loans as of September 30, 2015.
As of September 30, 2015, total deposits were $2.25 billion, down $22.8 million and $17.6 million from December 31, 2014 and September 30, 2014, respectively. Local deposits were up $30.4 million since year-end 2014 and $43.3 million since September 30, 2014. The decline in total deposits during the first nine months of 2015 and from September 30, 2014 primarily reflects the strategy of reducing wholesale funding as enabled by the strong core funding base provided by the merger with Firstbank. Growth in local deposits was primarily driven by new commercial loan relationships. Wholesale funds were $190 million, or approximately 8 percent of total funds, as of September 30, 2015.
Asset Quality
Nonperforming assets ("NPAs") at September 30, 2015 were $10.5 million, or 0.4 percent of total assets, compared to $10.1 million, or 0.4 percent of total assets, as of June 30, 2015. The level of past due loans remains nominal, and loan relationships on the internal watch list continue to decline. Net loan recoveries were $0.1 million during the third quarter of 2015, compared to net loan charge-offs of $0.1 million during the prior-year third quarter.
Capital Position
Shareholders' equity totaled $329 million as of September 30, 2015, an increase of $0.7 million from year-end 2014. The Bank's capital position remains above "well-capitalized" with a total risk-based capital ratio of 13.7 percent as of September 30, 2015, compared to 14.4 percent at December 31, 2014. At September 30, 2015, the Bank had approximately $92 million in excess of the 10.0 percent minimum regulatory threshold required to be considered a "well-capitalized" institution. Mercantile reported 16,279,234 total shares outstanding at September 30, 2015. As part of a $20 million common stock repurchase program announced in January of 2015, Mercantile repurchased approximately 765,000 shares at a weighted average all-in cost per share of $19.89 during the first nine months of 2015, representing approximately 76 percent of the authorized program.
Mr. Price concluded: "We are confident that Mercantile is well-positioned to continue its strong financial performance and further enhance shareholder value through the remainder of 2015 and beyond. Our results during the first nine months of 2015 met our high expectations and are encouraging for future periods. Our balance sheet and financial position are strong and position us to meet our growth objectives. We remain focused on identifying and fostering new customer relationships and efficiently delivering a broad range of products and services in our expanded market areas."
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; our ability to realize the anticipated benefits of our merger with Firstbank Corporation; our ability to compete in the highly competitive banking and financial services industry; 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.
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Mercantile Bank Corporation |
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Third Quarter 2015 Results |
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MERCANTILE BANK CORPORATION | ||||||
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CONSOLIDATED BALANCE SHEETS | ||||||
|
(Unaudited) | ||||||
|
SEPTEMBER 30, |
DECEMBER 31, |
SEPTEMBER 30, | ||||
|
2015 |
2014 |
2014 | ||||
|
ASSETS |
||||||
|
Cash and due from banks |
$ |
43,743,000 |
$ |
43,754,000 |
$ |
49,707,000 |
|
Interest-bearing deposits |
49,952,000 |
117,777,000 |
72,443,000 | |||
|
Federal funds sold |
10,154,000 |
11,207,000 |
10,102,000 | |||
|
Total cash and cash equivalents |
103,849,000 |
172,738,000 |
132,252,000 | |||
|
Securities available for sale |
367,173,000 |
432,912,000 |
454,009,000 | |||
|
Federal Home Loan Bank stock |
7,567,000 |
13,699,000 |
19,226,000 | |||
|
Loans |
2,217,388,000 |
2,089,277,000 |
2,068,265,000 | |||
|
Allowance for loan losses |
(16,119,000) |
(20,041,000) |
(20,374,000) | |||
|
Loans, net |
2,201,269,000 |
2,069,236,000 |
2,047,891,000 | |||
|
Premises and equipment, net |
47,509,000 |
48,812,000 |
48,570,000 | |||
|
Bank owned life insurance |
58,680,000 |
57,861,000 |
55,992,000 | |||
|
Goodwill |
49,473,000 |
49,473,000 |
50,870,000 | |||
|
Core deposit intangible |
13,346,000 |
15,624,000 |
16,418,000 | |||
|
Other assets |
32,511,000 |
33,024,000 |
37,876,000 | |||
|
Total assets |
$ |
2,881,377,000 |
$ |
2,893,379,000 |
$ |
2,863,104,000 |
|
LIABILITIES AND SHAREHOLDERS' EQUITY |
||||||
|
Deposits: |
||||||
|
Noninterest-bearing |
$ |
619,125,000 |
$ |
558,738,000 |
$ |
535,101,000 |
|
Interest-bearing |
1,635,004,000 |
1,718,177,000 |
1,736,607,000 | |||
|
Total deposits |
2,254,129,000 |
2,276,915,000 |
2,271,708,000 | |||
|
Securities sold under agreements to repurchase |
158,149,000 |
167,569,000 |
142,869,000 | |||
|
Federal Home Loan Bank advances |
68,000,000 |
54,022,000 |
57,033,000 | |||
|
Subordinated debentures |
54,983,000 |
54,472,000 |
54,301,000 | |||
|
Accrued interest and other liabilities |
17,296,000 |
12,263,000 |
16,200,000 | |||
|
Total liabilities |
2,552,557,000 |
2,565,241,000 |
2,542,111,000 | |||
|
SHAREHOLDERS' EQUITY |
||||||
|
Common stock |
304,378,000 |
317,904,000 |
317,374,000 | |||
|
Retained earnings |
23,673,000 |
10,218,000 |
5,948,000 | |||
|
Accumulated other comprehensive income (loss) |
769,000 |
16,000 |
(2,329,000) | |||
|
Total shareholders' equity |
328,820,000 |
328,138,000 |
320,993,000 | |||
|
Total liabilities and shareholders' equity |
$ |
2,881,377,000 |
$ |
2,893,379,000 |
$ |
2,863,104,000 |
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Mercantile Bank Corporation |
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Third Quarter 2015 Results |
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MERCANTILE BANK CORPORATION | |||||||||||||
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CONSOLIDATED REPORTS OF INCOME | |||||||||||||
|
(Unaudited) | |||||||||||||
|
THREE MONTHS ENDED |
THREE MONTHS ENDED |
NINE MONTHS ENDED |
NINE MONTHS ENDED | ||||||||||
|
September 30, 2015 |
September 30, 2014 |
September 30, 2015 |
September 30, 2014 | ||||||||||
|
INTEREST INCOME |
|||||||||||||
|
Loans, including fees |
$ |
26,565,000 |
$ |
26,323,000 |
$ |
77,463,000 |
$ |
55,079,000 |
|||||
|
Investment securities |
1,894,000 |
2,545,000 |
6,128,000 |
5,729,000 |
|||||||||
|
Other interest-earning assets |
42,000 |
32,000 |
161,000 |
163,000 |
|||||||||
|
Total interest income |
28,501,000 |
28,900,000 |
83,752,000 |
60,971,000 |
|||||||||
|
INTEREST EXPENSE |
|||||||||||||
|
Deposits |
1,969,000 |
1,971,000 |
5,642,000 |
6,279,000 |
|||||||||
|
Short-term borrowings |
39,000 |
34,000 |
116,000 |
83,000 |
|||||||||
|
Federal Home Loan Bank advances |
203,000 |
166,000 |
506,000 |
472,000 |
|||||||||
|
Other borrowed money |
665,000 |
740,000 |
1,973,000 |
1,532,000 |
|||||||||
|
Total interest expense |
2,876,000 |
2,911,000 |
8,237,000 |
8,366,000 |
|||||||||
|
Net interest income |
25,625,000 |
25,989,000 |
75,515,000 |
52,605,000 |
|||||||||
|
Provision for loan losses |
(500,000) |
(400,000) |
(1,500,000) |
(3,000,000) |
|||||||||
|
Net interest income after |
|||||||||||||
|
provision for loan losses |
26,125,000 |
26,389,000 |
77,015,000 |
55,605,000 |
|||||||||
|
NONINTEREST INCOME |
|||||||||||||
|
Service charges on accounts |
862,000 |
862,000 |
2,444,000 |
1,749,000 |
|||||||||
|
Credit and debit card income |
1,005,000 |
782,000 |
3,296,000 |
1,629,000 |
|||||||||
|
Mortgage banking income |
1,073,000 |
569,000 |
2,784,000 |
981,000 |
|||||||||
|
Earnings on bank owned life insurance |
272,000 |
299,000 |
820,000 |
884,000 |
|||||||||
|
Other income |
1,065,000 |
387,000 |
2,648,000 |
1,452,000 |
|||||||||
|
Total noninterest income |
4,277,000 |
2,899,000 |
11,992,000 |
6,695,000 |
|||||||||
|
NONINTEREST EXPENSE |
|||||||||||||
|
Salaries and benefits |
10,745,000 |
10,685,000 |
31,903,000 |
23,393,000 |
|||||||||
|
Occupancy |
1,526,000 |
1,515,000 |
4,578,000 |
3,141,000 |
|||||||||
|
Furniture and equipment |
569,000 |
560,000 |
1,788,000 |
1,175,000 |
|||||||||
|
Data processing costs |
1,958,000 |
1,585,000 |
5,599,000 |
3,606,000 |
|||||||||
|
FDIC insurance costs |
355,000 |
331,000 |
1,315,000 |
733,000 |
|||||||||
|
Merger-related costs |
0 |
1,250,000 |
0 |
5,081,000 |
|||||||||
|
Other expense |
4,540,000 |
4,815,000 |
14,101,000 |
8,885,000 |
|||||||||
|
Total noninterest expense |
19,693,000 |
20,741,000 |
59,284,000 |
46,014,000 |
|||||||||
|
Income before federal income |
|||||||||||||
|
tax expense |
10,709,000 |
8,547,000 |
29,723,000 |
16,286,000 |
|||||||||
|
Federal income tax expense |
3,373,000 |
2,600,000 |
9,183,000 |
5,248,000 |
|||||||||
|
Net Income |
$ |
7,336,000 |
$ |
5,947,000 |
$ |
20,540,000 |
$ |
11,038,000 |
|||||
|
Basic earnings per share |
$0.45 |
$0.35 |
$1.23 |
$0.89 |
|||||||||
|
Diluted earnings per share |
$0.45 |
$0.35 |
$1.23 |
$0.89 |
|||||||||
|
Average basic shares outstanding |
16,425,933 |
16,852,050 |
16,708,444 |
12,362,316 |
|||||||||
|
Average diluted shares outstanding |
16,461,794 |
16,926,249 |
16,743,625 |
12,399,009 |
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|
Mercantile Bank Corporation |
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|
Third Quarter 2015 Results |
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MERCANTILE BANK CORPORATION | ||||||||||||||
|
CONSOLIDATED FINANCIAL HIGHLIGHTS | ||||||||||||||
|
(Unaudited) | ||||||||||||||
|
Quarterly |
Year-To-Date | |||||||||||||
|
(dollars in thousands except per share data) |
2015 |
2015 |
2015 |
2014 |
2014 |
|||||||||
|
3rd Qtr |
2nd Qtr |
1st Qtr |
4th Qtr |
3rd Qtr |
2015 |
2014 | ||||||||
|
EARNINGS |
||||||||||||||
|
Net interest income |
$ |
25,625 |
25,041 |
24,849 |
25,173 |
25,989 |
75,515 |
52,605 | ||||||
|
Provision for loan losses |
$ |
(500) |
(600) |
(400) |
0 |
(400) |
(1,500) |
(3,000) | ||||||
|
Noninterest income |
$ |
4,277 |
4,021 |
3,694 |
3,333 |
2,899 |
11,992 |
6,695 | ||||||
|
Noninterest expense |
$ |
19,693 |
20,350 |
19,241 |
19,596 |
20,741 |
59,284 |
46,014 | ||||||
|
Net income before federal income |
||||||||||||||
|
tax expense |
$ |
10,709 |
9,312 |
9,702 |
8,910 |
8,547 |
29,723 |
16,286 | ||||||
|
Net income |
$ |
7,336 |
6,558 |
6,646 |
6,293 |
5,947 |
20,540 |
11,038 | ||||||
|
Basic earnings per share |
$ |
0.45 |
0.39 |
0.39 |
0.37 |
0.35 |
1.23 |
0.89 | ||||||
|
Diluted earnings per share |
$ |
0.45 |
0.39 |
0.39 |
0.37 |
0.35 |
1.23 |
0.89 | ||||||
|
Average basic shares outstanding |
16,425,933 |
16,767,393 |
16,937,630 |
16,919,559 |
16,852,050 |
16,708,444 |
12,362,316 | |||||||
|
Average diluted shares outstanding |
16,461,794 |
16,803,846 |
16,978,591 |
16,965,665 |
16,926,249 |
16,743,625 |
12,399,009 | |||||||
|
PERFORMANCE RATIOS |
||||||||||||||
|
Return on average assets |
1.01% |
0.92% |
0.94% |
0.86% |
0.82% |
0.96% |
0.72% | |||||||
|
Return on average equity |
8.86% |
7.97% |
8.19% |
7.70% |
7.46% |
8.33% |
6.52% | |||||||
|
Net interest margin (fully tax-equivalent) |
3.87% |
3.83% |
3.83% |
3.79% |
3.95% |
3.84% |
3.73% | |||||||
|
Efficiency ratio |
65.86% |
70.02% |
67.41% |
68.74% |
71.80% |
67.75% |
77.60% | |||||||
|
Full-time equivalent employees |
640 |
656 |
642 |
653 |
640 |
640 |
640 | |||||||
|
YIELD ON ASSETS / COST OF FUNDS |
||||||||||||||
|
Yield on loans |
4.79% |
4.78% |
4.84% |
4.90% |
5.03% |
4.80% |
4.88% | |||||||
|
Yield on securities |
2.16% |
2.15% |
2.17% |
2.17% |
2.24% |
2.16% |
2.70% | |||||||
|
Yield on other interest-earning assets |
0.25% |
0.25% |
0.25% |
0.25% |
0.19% |
0.25% |
0.24% | |||||||
|
Yield on total earning assets |
4.30% |
4.23% |
4.25% |
4.23% |
4.39% |
4.26% |
4.32% | |||||||
|
Yield on total assets |
3.95% |
3.89% |
3.92% |
3.89% |
4.03% |
3.92% |
3.98% | |||||||
|
Cost of deposits |
0.34% |
0.31% |
0.34% |
0.36% |
0.34% |
0.33% |
0.51% | |||||||
|
Cost of borrowed funds |
1.37% |
1.35% |
1.36% |
1.37% |
1.52% |
1.36% |
1.44% | |||||||
|
Cost of interest-bearing liabilities |
0.60% |
0.54% |
0.56% |
0.59% |
0.58% |
0.57% |
0.76% | |||||||
|
Cost of funds (total earning assets) |
0.43% |
0.40% |
0.42% |
0.44% |
0.44% |
0.42% |
0.59% | |||||||
|
Cost of funds (total assets) |
0.40% |
0.37% |
0.39% |
0.41% |
0.40% |
0.38% |
0.54% | |||||||
|
PURCHASE ACCOUNTING ADJUSTMENTS |
||||||||||||||
|
Loan portfolio - increase interest income |
$ |
1,354 |
1,494 |
1,416 |
1,507 |
1,175 |
4,264 |
1,687 | ||||||
|
Time deposits - reduce interest expense |
$ |
196 |
587 |
588 |
588 |
588 |
1,371 |
784 | ||||||
|
FHLB advances - reduce interest expense |
$ |
0 |
11 |
11 |
11 |
11 |
22 |
15 | ||||||
|
Trust preferred - increase interest expense |
$ |
171 |
171 |
171 |
171 |
171 |
513 |
228 | ||||||
|
Core deposit intangible - increase overhead |
$ |
715 |
768 |
794 |
794 |
794 |
2,277 |
1,059 | ||||||
|
CAPITAL |
||||||||||||||
|
Tangible equity to tangible assets |
9.44% |
9.44% |
9.54% |
9.30% |
9.07% |
9.44% |
9.07% | |||||||
|
Tier 1 leverage capital ratio |
11.52% |
11.58% |
11.61% |
11.15% |
11.01% |
11.52% |
11.01% | |||||||
|
Common equity risk-based capital ratio |
10.95% |
10.94% |
11.17% |
NA |
NA |
10.95% |
NA | |||||||
|
Tier 1 risk-based capital ratio |
12.94% |
12.97% |
13.22% |
13.57% |
13.17% |
12.94% |
13.17% | |||||||
|
Total risk-based capital ratio |
13.58% |
13.63% |
14.07% |
14.43% |
14.04% |
13.58% |
14.04% | |||||||
|
Tier 1 capital |
$ |
324,911 |
325,304 |
326,947 |
314,752 |
307,562 |
324,911 |
307,562 | ||||||
|
Tier 1 plus tier 2 capital |
$ |
341,029 |
341,865 |
347,997 |
334,793 |
327,936 |
341,029 |
327,936 | ||||||
|
Total risk-weighted assets |
$ |
2,511,174 |
2,509,001 |
2,473,399 |
2,319,404 |
2,335,589 |
2,511,174 |
2,335,589 | ||||||
|
Book value per common share |
$ |
20.20 |
19.85 |
19.69 |
19.33 |
19.04 |
20.20 |
19.04 | ||||||
|
Tangible book value per common share |
$ |
16.34 |
16.02 |
15.89 |
15.49 |
15.05 |
16.34 |
15.05 | ||||||
|
Cash dividend per common share |
$ |
0.15 |
0.14 |
0.14 |
0.12 |
0.12 |
0.43 |
2.36 | ||||||
|
ASSET QUALITY |
||||||||||||||
|
Gross loan charge-offs |
$ |
182 |
4,383 |
448 |
466 |
345 |
5,013 |
1,036 | ||||||
|
Recoveries |
$ |
239 |
494 |
1,858 |
132 |
263 |
2,591 |
1,589 | ||||||
|
Net loan charge-offs (recoveries) |
$ |
(57) |
3,889 |
(1,410) |
334 |
82 |
2,422 |
(553) | ||||||
|
Net loan charge-offs to average loans |
(0.01%) |
0.73% |
(0.27%) |
0.06% |
0.02% |
0.15% |
(0.05%) | |||||||
|
Allowance for loan losses |
$ |
16,119 |
16,561 |
21,050 |
20,041 |
20,374 |
16,119 |
20,374 | ||||||
|
Allowance to originated loans |
1.04% |
1.10% |
1.58% |
1.54% |
1.72% |
1.04% |
1.72% | |||||||
|
Nonperforming loans |
$ |
8,214 |
8,103 |
26,267 |
29,434 |
6,071 |
8,214 |
6,071 | ||||||
|
Other real estate/repossessed assets |
$ |
2,272 |
2,033 |
1,664 |
1,995 |
2,659 |
2,272 |
2,659 | ||||||
|
Nonperforming loans to total loans |
0.37% |
0.37% |
1.24% |
1.41% |
0.29% |
0.37% |
0.29% | |||||||
|
Nonperforming assets to total assets |
0.36% |
0.35% |
0.97% |
1.09% |
0.30% |
0.36% |
0.30% | |||||||
|
NONPERFORMING ASSETS - COMPOSITION |
||||||||||||||
|
Residential real estate: |
||||||||||||||
|
Land development |
$ |
378 |
380 |
383 |
413 |
436 |
378 |
436 | ||||||
|
Construction |
$ |
0 |
0 |
0 |
0 |
0 |
0 |
0 | ||||||
|
Owner occupied / rental |
$ |
3,714 |
3,316 |
3,224 |
4,951 |
5,252 |
3,714 |
5,252 | ||||||
|
Commercial real estate: |
||||||||||||||
|
Land development |
$ |
170 |
184 |
197 |
209 |
222 |
170 |
222 | ||||||
|
Construction |
$ |
0 |
0 |
0 |
0 |
0 |
0 |
0 | ||||||
|
Owner occupied |
$ |
2,741 |
2,726 |
17,634 |
18,338 |
906 |
2,741 |
906 | ||||||
|
Non-owner occupied |
$ |
3,193 |
3,286 |
910 |
1,075 |
1,585 |
3,193 |
1,585 | ||||||
|
Non-real estate: |
||||||||||||||
|
Commercial assets |
$ |
271 |
212 |
5,565 |
6,401 |
296 |
271 |
296 | ||||||
|
Consumer assets |
$ |
19 |
32 |
18 |
42 |
33 |
19 |
33 | ||||||
|
Total nonperforming assets |
10,486 |
10,136 |
27,931 |
31,429 |
8,730 |
10,486 |
8,730 | |||||||
|
NONPERFORMING ASSETS - RECON |
||||||||||||||
|
Beginning balance |
$ |
10,136 |
27,931 |
31,429 |
8,730 |
8,619 |
31,429 |
9,569 | ||||||
|
Additions - originated loans |
$ |
1,161 |
2,972 |
584 |
24,734 |
1,215 |
4,717 |
1,553 | ||||||
|
Merger-related activity |
$ |
163 |
166 |
105 |
160 |
830 |
434 |
2,017 | ||||||
|
Return to performing status |
$ |
0 |
0 |
(5) |
(779) |
0 |
(5) |
0 | ||||||
|
Principal payments |
$ |
(567) |
(16,414) |
(3,203) |
(227) |
(864) |
(20,184) |
(1,836) | ||||||
|
Sale proceeds |
$ |
(319) |
(220) |
(538) |
(982) |
(910) |
(1,077) |
(2,201) | ||||||
|
Loan charge-offs |
$ |
(65) |
(4,236) |
(371) |
(145) |
0 |
(4,672) |
(168) | ||||||
|
Valuation write-downs |
$ |
(23) |
(63) |
(70) |
(62) |
(160) |
(156) |
(204) | ||||||
|
Ending balance |
$ |
10,486 |
10,136 |
27,931 |
31,429 |
8,730 |
10,486 |
8,730 | ||||||
|
LOAN PORTFOLIO COMPOSITION |
||||||||||||||
|
Commercial: |
||||||||||||||
|
Commercial & industrial |
$ |
643,118 |
622,073 |
587,675 |
550,629 |
541,805 |
643,118 |
541,805 | ||||||
|
Land development & construction |
$ |
47,734 |
47,622 |
56,050 |
51,977 |
52,218 |
47,734 |
52,218 | ||||||
|
Owner occupied comm'l R/E |
$ |
427,016 |
422,354 |
431,995 |
430,406 |
412,470 |
427,016 |
412,470 | ||||||
|
Non-owner occupied comm'l R/E |
$ |
636,227 |
603,724 |
566,152 |
559,594 |
584,422 |
636,227 |
584,422 | ||||||
|
Multi-family & residential rental |
$ |
123,525 |
124,658 |
117,477 |
122,772 |
95,649 |
123,525 |
95,649 | ||||||
|
Total commercial |
$ |
1,877,620 |
1,820,431 |
1,759,349 |
1,715,378 |
1,686,564 |
1,877,620 |
1,686,564 | ||||||
|
Retail: |
||||||||||||||
|
1-4 family mortgages |
$ |
146,765 |
201,907 |
208,425 |
214,696 |
217,751 |
146,765 |
217,751 | ||||||
|
Home equity & other consumer |
$ |
193,003 |
149,494 |
152,986 |
159,203 |
163,950 |
193,003 |
163,950 | ||||||
|
Total retail |
$ |
339,768 |
351,401 |
361,411 |
373,899 |
381,701 |
339,768 |
381,701 | ||||||
|
Total loans |
$ |
2,217,388 |
2,171,832 |
2,120,760 |
2,089,277 |
2,068,265 |
2,217,388 |
2,068,265 | ||||||
|
END OF PERIOD BALANCES |
||||||||||||||
|
Loans |
$ |
2,217,388 |
2,171,832 |
2,120,760 |
2,089,277 |
2,068,265 |
2,217,388 |
2,068,265 | ||||||
|
Securities |
$ |
374,740 |
381,013 |
427,392 |
446,611 |
473,235 |
374,740 |
473,235 | ||||||
|
Other interest-earning assets |
$ |
60,106 |
93,620 |
106,146 |
128,984 |
82,545 |
60,106 |
82,545 | ||||||
|
Total earning assets (before allowance) |
$ |
2,652,234 |
2,646,465 |
2,654,298 |
2,664,872 |
2,624,045 |
2,652,234 |
2,624,045 | ||||||
|
Total assets |
$ |
2,881,377 |
2,875,944 |
2,877,184 |
2,893,379 |
2,863,104 |
2,881,377 |
2,863,104 | ||||||
|
Noninterest-bearing deposits |
$ |
619,125 |
612,222 |
568,843 |
558,738 |
535,101 |
619,125 |
535,101 | ||||||
|
Interest-bearing deposits |
$ |
1,635,004 |
1,666,572 |
1,710,681 |
1,718,177 |
1,736,607 |
1,635,004 |
1,736,607 | ||||||
|
Total deposits |
$ |
2,254,129 |
2,278,794 |
2,279,524 |
2,276,915 |
2,271,708 |
2,254,129 |
2,271,708 | ||||||
|
Total borrowed funds |
$ |
284,919 |
258,599 |
254,365 |
279,790 |
259,717 |
284,919 |
259,717 | ||||||
|
Total interest-bearing liabilities |
$ |
1,919,923 |
1,925,171 |
1,965,046 |
1,997,967 |
1,996,324 |
1,919,923 |
1,996,324 | ||||||
|
Shareholders' equity |
$ |
328,820 |
328,971 |
332,788 |
328,138 |
320,993 |
328,820 |
320,993 | ||||||
|
AVERAGE BALANCES |
||||||||||||||
|
Loans |
$ |
2,201,124 |
2,147,040 |
2,119,464 |
2,085,844 |
2,075,087 |
2,156,175 |
1,507,942 | ||||||
|
Securities |
$ |
378,286 |
404,311 |
440,380 |
459,920 |
484,345 |
407,431 |
300,616 | ||||||
|
Other interest-earning assets |
$ |
64,027 |
89,357 |
87,620 |
109,128 |
66,207 |
80,248 |
90,041 | ||||||
|
Total earning assets (before allowance) |
$ |
2,643,437 |
2,640,708 |
2,647,464 |
2,654,892 |
2,625,639 |
2,643,854 |
1,898,599 | ||||||
|
Total assets |
$ |
2,876,671 |
2,865,427 |
2,873,032 |
2,889,475 |
2,862,349 |
2,872,157 |
2,060,597 | ||||||
|
Noninterest-bearing deposits |
$ |
621,324 |
591,500 |
557,603 |
561,031 |
532,997 |
591,101 |
356,255 | ||||||
|
Interest-bearing deposits |
$ |
1,652,306 |
1,681,437 |
1,723,684 |
1,736,242 |
1,757,162 |
1,684,822 |
1,275,748 | ||||||
|
Total deposits |
$ |
2,273,630 |
2,272,937 |
2,281,287 |
2,297,273 |
2,290,159 |
2,275,923 |
1,632,003 | ||||||
|
Total borrowed funds |
$ |
263,264 |
251,996 |
251,418 |
254,290 |
245,522 |
255,602 |
193,165 | ||||||
|
Total interest-bearing liabilities |
$ |
1,915,570 |
1,933,433 |
1,975,102 |
1,990,532 |
2,002,685 |
1,940,424 |
1,468,913 | ||||||
|
Shareholders' equity |
$ |
328,332 |
330,126 |
329,246 |
324,075 |
316,410 |
329,704 |
226,204 | ||||||
SOURCE Mercantile Bank Corporation
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