Mercantile Bank Corporation Announces Robust Fourth Quarter and Full-Year 2024 Results
Mercantile Bank (NASDAQ: MBWM) reported net income of $19.6 million ($1.22 per diluted share) for Q4 2024 and $79.6 million ($4.93 per diluted share) for full-year 2024, compared to $20.0 million and $82.2 million in the respective prior-year periods.
Key highlights include strong commercial loan growth of 8.5%, significant local deposit growth of $816 million, and a reduction in the loan-to-deposit ratio from 110% to 98%. Net revenue increased 2.8% to $58.5 million in Q4 2024, while noninterest income grew 22.6% to $10.2 million.
The net interest margin decreased to 3.41% in Q4 2024 from 3.92% in Q4 2023. Asset quality remained strong with nonperforming assets at less than 0.1% of total assets. The bank maintained a well-capitalized position with a total risk-based capital ratio of 13.9%.
Mercantile Bank (NASDAQ: MBWM) ha riportato un reddito netto di 19,6 milioni di dollari (1,22 dollari per azione diluita) per il quarto trimestre del 2024 e 79,6 milioni di dollari (4,93 dollari per azione diluita) per l'intero anno del 2024, rispetto ai 20,0 milioni di dollari e 82,2 milioni di dollari nei rispettivi periodi dell'anno precedente.
I punti salienti includono una forte crescita dei prestiti commerciali dell'8,5%, un significativo aumento dei depositi locali di 816 milioni di dollari e una riduzione del rapporto prestiti-depositi dal 110% al 98%. Le entrate nette sono aumentate del 2,8% a 58,5 milioni di dollari nel quarto trimestre del 2024, mentre le entrate non da interessi sono cresciute del 22,6% a 10,2 milioni di dollari.
Il margine d'interesse netto è diminuito al 3,41% nel quarto trimestre del 2024 rispetto al 3,92% nel quarto trimestre del 2023. La qualità degli attivi è rimasta solida, con attivi non performanti inferiori allo 0,1% del totale degli attivi. La banca ha mantenuto una posizione ben capitalizzata con un rapporto di capitale totale basato sul rischio del 13,9%.
Mercantile Bank (NASDAQ: MBWM) reportó un ingreso neto de 19,6 millones de dólares (1,22 dólares por acción diluida) para el cuarto trimestre de 2024 y 79,6 millones de dólares (4,93 dólares por acción diluida) para el año completo de 2024, en comparación con 20,0 millones de dólares y 82,2 millones de dólares en los respectivos períodos del año anterior.
Los aspectos destacados incluyen un fuerte crecimiento de los préstamos comerciales del 8,5%, un significativo aumento de los depósitos locales de 816 millones de dólares y una reducción en la relación préstamo-depósito del 110% al 98%. Los ingresos netos aumentaron un 2,8% a 58,5 millones de dólares en el cuarto trimestre de 2024, mientras que los ingresos por comisiones crecieron un 22,6% a 10,2 millones de dólares.
El margen de interés neto disminuyó al 3,41% en el cuarto trimestre de 2024 desde el 3,92% en el cuarto trimestre de 2023. La calidad de los activos se mantuvo sólida, con activos no rentables por debajo del 0,1% del total de los activos. El banco mantuvo una posición bien capitalizada con un ratio total de capital basado en riesgo del 13,9%.
머컨타일 은행 (NASDAQ: MBWM)은 2024년 4분기에 1960만 달러(한 주당 희석 기준 1.22 달러)의 순이익과 2024년 전체 연도에 7960만 달러(한 주당 희석 기준 4.93 달러)의 순이익을 보고했으며, 이는 각각 지난해 같은 기간에 비해 2000만 달러 및 8220만 달러에 해당합니다.
주요 하이라이트로는 8.5%의 강력한 상업 대출 성장, 8억 1600만 달러의 상당한 지역 예금 성장, 110%에서 98%로 감소한 대출-예금 비율이 포함됩니다. 2024년 4분기 순 수익은 2.8% 증가하여 5850만 달러에 달했고, 비이자 수익은 22.6% 증가하여 1020만 달러에 도달했습니다.
순이자 마진은 2023년 4분기의 3.92%에서 2024년 4분기에는 3.41%로 감소했습니다. 자산 품질은 여전히 강력해 비수익 자산은 총 자산의 0.1% 미만인 것으로 나타났습니다. 은행은 13.9%의 총 위험 기반 자본 비율을 유지하며 잘 자본화된 상태를 보였습니다.
Mercantile Bank (NASDAQ: MBWM) a déclaré un revenu net de 19,6 millions de dollars (1,22 dollar par action diluée) pour le quatrième trimestre 2024 et de 79,6 millions de dollars (4,93 dollars par action diluée) pour l'année entière 2024, par rapport à 20,0 millions de dollars et 82,2 millions de dollars pour les périodes respectives de l'année précédente.
Les points saillants incluent une forte croissance des prêts commerciaux de 8,5%, une augmentation significative des dépôts locaux de 816 millions de dollars et une réduction du ratio prêts/dépôts de 110% à 98%. Les revenus nets ont augmenté de 2,8% pour atteindre 58,5 millions de dollars au quatrième trimestre 2024, tandis que les revenus non d'intérêts ont connu une hausse de 22,6% pour atteindre 10,2 millions de dollars.
La marge d'intérêt nette a diminué à 3,41% au quatrième trimestre 2024, contre 3,92% au quatrième trimestre 2023. La qualité des actifs est restée solide, avec des actifs non performants représentant moins de 0,1% du total des actifs. La banque a maintenu une position bien capitalisée avec un ratio total de capital basé sur le risque de 13,9%.
Mercantile Bank (NASDAQ: MBWM) berichtet von einem Nettogewinn von 19,6 Millionen Dollar (1,22 Dollar pro verwässerter Aktie) für das vierte Quartal 2024 und 79,6 Millionen Dollar (4,93 Dollar pro verwässerter Aktie) für das gesamte Jahr 2024, im Vergleich zu 20,0 Millionen Dollar und 82,2 Millionen Dollar in den jeweiligen Vorjahreszeiträumen.
Wesentliche Highlights sind das starke Wachstum der Geschäftsdarlehen von 8,5%, das signifikante Wachstum der lokalen Einlagen von 816 Millionen Dollar und die Reduzierung der Darlehens-zu-Einlagen-Quote von 110% auf 98%. Die Nettoerlöse stiegen um 2,8% auf 58,5 Millionen Dollar im vierten Quartal 2024, während die sonstigen Erträge um 22,6% auf 10,2 Millionen Dollar zunahmen.
Die Nettozinsspanne sank im vierten Quartal 2024 auf 3,41% von 3,92% im vierten Quartal 2023. Die Vermögensqualität blieb stark, da nicht leistungsfähige Vermögenswerte weniger als 0,1% der Gesamtvermögen ausmachten. Die Bank behielt eine gut kapitalisierte Position mit einem Gesamtkapitalquote von 13,9%.
- Commercial loan portfolio grew 8.5% in 2024
- Local deposits increased by $816 million
- Noninterest income grew 22.6% to $10.2 million in Q4 2024
- Asset quality remained strong with nonperforming assets below 0.1% of total assets
- Total risk-based capital ratio improved to 13.9% from 13.4% YoY
- Net income decreased to $79.6 million in 2024 from $82.2 million in 2023
- Net interest margin declined to 3.41% from 3.92% YoY in Q4
- Cost of funds increased to 2.40% from 2.03% YoY in Q4
- Net interest income decreased 0.6% in Q4 2024 compared to Q4 2023
Insights
The Q4 and full-year 2024 results demonstrate Mercantile Bank 's resilient performance amid challenging market conditions. Net income of
Key performance metrics reveal strategic execution: net interest margin of
The operational transformation in 2024 is evident through several strategic achievements. The local deposit growth of
The bank's capital position remains robust with a total risk-based capital ratio of
Market positioning analysis reveals MBWM's competitive advantages in its regional market. The commercial loan growth of
The bank's focus on commercial and industrial loans plus owner-occupied commercial real estate at
Strong commercial loan and local deposit growth, notable increase in noninterest income, and ongoing strength in asset quality metrics highlight the year
"We are very pleased to report another year of solid financial results," said Ray Reitsma, President and Chief Executive Officer of Mercantile. "Our strong operating performance was fueled by robust commercial loan and local deposit growth, ongoing strength in asset quality metrics, a healthy net interest margin, and a significant increase in noninterest income. As evidenced by the noteworthy increases in commercial loans and local deposits, our team members remain committed to meeting the needs of existing clients and attracting new customers while building mutually beneficial relationships. During 2024, we successfully executed several strategic initiatives, including lowering our loan-to-deposit ratio and increasing our on-balance sheet liquidity. We believe our strong overall financial standing and commercial loan funding opportunities position us to effectively meet challenges arising from changing operating environments."
Full-year highlights include:
- Significant reduction in the loan-to-deposit ratio
- Strong local deposit growth
- Noteworthy commercial loan portfolio expansion
- Sustained strength in commercial loan pipeline
- Notable increases in mortgage banking and treasury management income
- Ongoing low levels of nonperforming assets, past due loans, and loan charge-offs
- Solid capital position
- Announced an increased first quarter 2025 regular cash dividend
- Contributed
$1.7 million
Operating Results
Net revenue, consisting of net interest income and noninterest income, was
The net interest margin was 3.41 percent in the fourth quarter of 2024, down from 3.92 percent in the prior-year fourth quarter. The yield on average earning assets was 5.81 percent during the current-year fourth quarter, a decrease from 5.95 percent during the respective 2023 period. The lower yield primarily resulted from a decreased yield on loans and a change in earning asset mix. The yield on loans was 6.41 percent during the fourth quarter of 2024, down from 6.53 percent during the fourth quarter of 2023 mainly due to lower interest rates on variable-rate commercial loans resulting from the Federal Open Market Committee ("FOMC") lowering the targeted federal funds rate. The FOMC decreased the targeted federal funds rate by 50 basis points in September of 2024 and 25 basis points in each of November and December of 2024, during which time average variable-rate commercial loans represented approximately 73 percent of average total commercial loans. Reflecting the success of a strategic initiative to increase on-balance sheet liquidity, higher-yielding loans represented a reduced percentage of earning assets and lower-yielding securities and interest-earning deposits accounted for an increased percentage of earning assets in the fourth quarter of 2024 compared to the fourth quarter of 2023.
The cost of funds was 2.40 percent in the fourth quarter of 2024, up from 2.03 percent in the fourth quarter of 2023 primarily due to higher costs of deposits and borrowed funds, reflecting the impact of the rising interest rate environment stemming from the FOMC's actions to curb elevated inflation levels. A change in funding mix, mainly comprising of a decline in average noninterest-bearing and lower-cost deposits and an increase in average higher-cost money market accounts and time deposits, also contributed to the higher cost of funds. The growth in money market accounts and time deposits reflected new deposit relationships, increases in existing deposit relationships, and deposit migration.
Net revenue was
The net interest margin was 3.58 percent in 2024, down from 4.05 percent in 2023. The yield on average earning assets was 6.02 percent during 2024, an increase from 5.68 percent during the prior year. The higher yield on average earning assets mainly resulted from an increased yield on loans. The yield on loans was 6.61 percent during 2024, up from 6.25 percent during 2023 primarily due to higher interest rates on variable-rate commercial loans stemming from the FOMC raising the targeted federal funds rate in an effort to reduce elevated inflation levels and a significant level of commercial loans being originated over the past 24 months in the higher interest rate environment. The FOMC increased the targeted federal funds rate by 100 basis points during the period of February 2023 through July 2023, during which time average variable-rate commercial loans represented approximately 65 percent of average total commercial loans. The positive impact of the rate hikes was partially mitigated by the FOMC's lowering of the targeted federal funds rate by 100 basis points during the last four months of 2024.
The cost of funds was 2.44 percent in 2024, up from 1.63 percent in 2023 primarily due to higher costs of deposits and borrowed funds, reflecting the impact of the rising interest rate environment. A change in funding mix, mainly consisting of a decrease in average noninterest-bearing and lower-cost deposits and an increase in average higher-cost money market accounts and time deposits, also contributed to the higher cost of funds. The increases in money market accounts and time deposits stemmed from new deposit relationships, growth in existing deposit relationships, and deposit migration.
Mercantile recorded provisions for credit losses of
Noninterest income totaled
Noninterest expense totaled
Mr. Reitsma commented, "The significant growth in mortgage banking income during the 2024 periods mainly reflected the successful execution of a strategic initiative to increase the percentage of loans originated with the intent to sell and notable growth in loan production. We are pleased with the increases in treasury management fees and payroll services income, which primarily resulted from customers' expanded use of products and services. Our net interest margin, although falling as anticipated due to higher costs of deposits and borrowings, a change in funding mix, and a change in earning asset mix reflecting our success in lowering the loan-to-deposit ratio and increasing on-balance sheet liquidity, remained healthy during 2024. Growth in earning assets largely offset the negative impact of the reduced net interest margin, providing for only a slight decline in net interest income. Overhead cost constraint remains an important priority, and we will continue our efforts to enhance operating efficiency while expanding the balance sheet and continuing to provide our customers with extraordinary service and a wide selection of market-leading products and services to meet their needs."
Balance Sheet
As of December 31, 2024, total assets were
As of December 31, 2024, unfunded commitments on commercial construction and development loans, which are expected to be funded over the next 12 to 18 months, and residential construction loans, which are expected to be largely funded over the next 12 months, totaled
Mr. Reitsma noted, "The solid growth in commercial loans during 2024, which occurred despite elevated levels of partial paydowns and payoffs, stemmed from a mixture of expanded existing client relationships and acquired new customer relationships. The growth in commercial loans, local deposits, treasury management fees, and payroll services income reflects our sales team's success in further developing current client relationships and securing the complete banking relationships of new customers. We believe commercial loan originations will be robust in future periods based on the strength of our current pipeline and the level of credit availability on construction and development loans. Growing the local deposit base will continue to be a key area of focus as we continue our efforts to reduce our loan-to-deposit ratio and limit the use of wholesale funds as a funding source for projected loan growth."
Commercial and industrial loans and owner-occupied commercial real estate loans together represented approximately 55 percent of total commercial loans as of December 31, 2024, a level that has remained relatively consistent with prior periods and in line with our expectations.
Total deposits as of December 31, 2024, were
Asset Quality
Nonperforming assets totaled
Mr. Reitsma remarked, "Our asset quality metrics remained strong during 2024, reflecting our steadfast commitment to underwriting loans in a sound and disciplined manner, along with our commercial borrowers' demonstrated abilities to effectively operate during periods of shifting economic and operating conditions. Nonperforming assets, past due loans, and loan charge-offs remain at low levels. We believe our robust loan review program and intense focus on the early identification and reporting of deteriorating commercial loan relationships will allow us to detect any emerging credit issues and constrain the impact of such on our overall financial condition. As reflected by ongoing low delinquency and charge-off levels, our residential mortgage and consumer loan portfolios continue to perform well."
Capital Position
Shareholders' equity totaled
All of Mercantile Bank's investments are categorized as available-for-sale. As of December 31, 2024, the net unrealized loss on these investments totaled
Mercantile reported 16,146,374 total shares outstanding at December 31, 2024.
Mr. Reitsma concluded, "As demonstrated by our Board of Directors' declaration of an increased first quarter 2025 regular cash dividend, we remain committed to building shareholder value through meaningful cash returns while providing support for ongoing loan growth. Our robust capital position and operating results, combined with expected commercial loan portfolio expansion, should enable us to effectively address any issues resulting from changing economic environments. As evidenced by the notable increases in commercial loans and local deposits during 2024, our community banking philosophy and associated focus on fostering mutually beneficial relationships have been successful in maintaining existing customer relationships and acquiring new customer relationships."
Investor Presentation
Mercantile has prepared presentation materials that management intends to use during its previously announced fourth quarter 2024 conference call on Tuesday, January 21, 2025, at 10:00 a.m. Eastern Time, and from time to time thereafter in presentations about the company's operations and performance. These materials, which are available for viewing in the Investor Relations section of Mercantile's website at www.mercbank.com, have been furnished to the
About Mercantile Bank Corporation
Based in
Forward-Looking Statements
This news release contains statements or information that may constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements can be identified by words such as: "anticipate," "intend," "plan," "goal," "seek," "believe," "project," "estimate," "expect," "strategy," "future," "likely," "may," "should," "will," and similar references to future periods. Any such statements 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; increasing rates of inflation and slower growth rates or recession; significant declines in the value of commercial real estate; market volatility; demand for products and services; climate impacts; labor markets; the degree of competition by traditional and nontraditional financial services companies; changes in banking regulation or actions by bank regulators; changes in tax laws and other laws and regulations applicable to us; changes in prices, levies, and assessments; the impact of technological advances; potential cyber-attacks, information security breaches and other criminal activities; litigation liabilities; governmental and regulatory policy changes; the outcomes of existing or future contingencies; trends in customer behavior as well as their ability to repay loans; changes in local real estate values; damage to our reputation resulting from adverse publicity, regulatory actions, litigation, operational failures, and the failure to meet client expectations and other facts; changes in the national and local economies; unstable political and economic environments; disease outbreaks, such as the COVID-19 pandemic or similar public health threats, and measures implemented to combat them; and other factors, including those expressed as 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. Investors are cautioned not to place undue reliance on any forward-looking statements contained herein.
Mercantile Bank Corporation | ||||||
Fourth Quarter 2024 Results | ||||||
MERCANTILE BANK CORPORATION | ||||||
CONSOLIDATED BALANCE SHEETS | ||||||
(Unaudited) | ||||||
DECEMBER 31, | DECEMBER 31, | DECEMBER 31, | ||||
2024 | 2023 | 2022 | ||||
ASSETS | ||||||
Cash and due from banks | $ | 56,991,000 | $ | 70,408,000 | $ | 61,894,000 |
Interest-earning deposits | 336,019,000 | 60,125,000 | 34,878,000 | |||
Total cash and cash equivalents | 393,010,000 | 130,533,000 | 96,772,000 | |||
Securities available for sale | 730,352,000 | 617,092,000 | 602,936,000 | |||
Federal Home Loan Bank stock | 21,513,000 | 21,513,000 | 17,721,000 | |||
Mortgage loans held for sale | 15,824,000 | 18,607,000 | 3,565,000 | |||
Loans | 4,600,781,000 | 4,303,758,000 | 3,916,619,000 | |||
Allowance for credit losses | (54,454,000) | (49,914,000) | (42,246,000) | |||
Loans, net | 4,546,327,000 | 4,253,844,000 | 3,874,373,000 | |||
Premises and equipment, net | 53,427,000 | 50,928,000 | 51,476,000 | |||
Bank owned life insurance | 93,839,000 | 85,668,000 | 80,727,000 | |||
Goodwill | 49,473,000 | 49,473,000 | 49,473,000 | |||
Other assets | 148,396,000 | 125,566,000 | 95,576,000 | |||
Total assets | $ | 6,052,161,000 | $ | 5,353,224,000 | $ | 4,872,619,000 |
LIABILITIES AND SHAREHOLDERS' EQUITY | ||||||
Deposits: | ||||||
Noninterest-bearing | $ | 1,264,523,000 | $ | 1,247,640,000 | $ | 1,604,750,000 |
Interest-bearing | 3,433,843,000 | 2,653,278,000 | 2,108,061,000 | |||
Total deposits | 4,698,366,000 | 3,900,918,000 | 3,712,811,000 | |||
Securities sold under agreements to repurchase | 121,521,000 | 229,734,000 | 194,340,000 | |||
Federal Home Loan Bank advances | 387,083,000 | 467,910,000 | 308,263,000 | |||
Subordinated debentures | 50,330,000 | 49,644,000 | 48,958,000 | |||
Subordinated notes | 89,314,000 | 88,971,000 | 88,628,000 | |||
Accrued interest and other liabilities | 121,021,000 | 93,902,000 | 78,211,000 | |||
Total liabilities | 5,467,635,000 | 4,831,079,000 | 4,431,211,000 | |||
SHAREHOLDERS' EQUITY | ||||||
Common stock | 299,705,000 | 295,106,000 | 290,436,000 | |||
Retained earnings | 334,646,000 | 277,526,000 | 216,313,000 | |||
Accumulated other comprehensive income/(loss) | (49,825,000) | (50,487,000) | (65,341,000) | |||
Total shareholders' equity | 584,526,000 | 522,145,000 | 441,408,000 | |||
Total liabilities and shareholders' equity | $ | 6,052,161,000 | $ | 5,353,224,000 | $ | 4,872,619,000 |
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Fourth Quarter 2024 Results | ||||||||||||
MERCANTILE BANK CORPORATION | ||||||||||||
CONSOLIDATED REPORTS OF INCOME | ||||||||||||
(Unaudited) | ||||||||||||
THREE MONTHS ENDED | THREE MONTHS ENDED | TWELVE MONTHS ENDED | TWELVE MONTHS ENDED | |||||||||
December 31, 2024 | December 31, 2023 | December 31, 2024 | December 31, 2023 | |||||||||
INTEREST INCOME | ||||||||||||
Loans, including fees | $ | 73,758,000 | $ | 68,876,000 | $ | 293,163,000 | $ | 253,108,000 | ||||
Investment securities | 4,792,000 | 3,312,000 | 16,034,000 | 12,704,000 | ||||||||
Interest-earning deposits | 3,937,000 | 1,615,000 | 12,305,000 | 5,546,000 | ||||||||
Total interest income | 82,487,000 | 73,803,000 | 321,502,000 | 271,358,000 | ||||||||
INTEREST EXPENSE | ||||||||||||
Deposits | 26,874,000 | 19,015,000 | 101,395,000 | 55,444,000 | ||||||||
Short-term borrowings | 2,086,000 | 781,000 | 7,717,000 | 2,847,000 | ||||||||
Federal Home Loan Bank advances | 3,150,000 | 3,252,000 | 13,018,000 | 11,367,000 | ||||||||
Other borrowed money | 2,016,000 | 2,106,000 | 8,286,000 | 8,155,000 | ||||||||
Total interest expense | 34,126,000 | 25,154,000 | 130,416,000 | 77,813,000 | ||||||||
Net interest income | 48,361,000 | 48,649,000 | 191,086,000 | 193,545,000 | ||||||||
Provision for credit losses | 1,500,000 | 1,800,000 | 7,400,000 | 7,700,000 | ||||||||
Net interest income after | ||||||||||||
provision for credit losses | 46,861,000 | 46,849,000 | 183,686,000 | 185,845,000 | ||||||||
NONINTEREST INCOME | ||||||||||||
Service charges on accounts | 1,866,000 | 1,543,000 | 6,842,000 | 4,954,000 | ||||||||
Mortgage banking income | 3,611,000 | 1,766,000 | 12,301,000 | 7,595,000 | ||||||||
Credit and debit card income | 2,177,000 | 2,197,000 | 8,821,000 | 8,914,000 | ||||||||
Interest rate swap income | 717,000 | 1,224,000 | 3,210,000 | 3,946,000 | ||||||||
Payroll services | 763,000 | 601,000 | 3,058,000 | 2,509,000 | ||||||||
Earnings on bank owned life insurance | 497,000 | 276,000 | 2,555,000 | 1,500,000 | ||||||||
Other income | 541,000 | 693,000 | 3,602,000 | 2,725,000 | ||||||||
Total noninterest income | 10,172,000 | 8,300,000 | 40,389,000 | 32,143,000 | ||||||||
NONINTEREST EXPENSE | ||||||||||||
Salaries and benefits | 21,482,000 | 18,400,000 | 77,924,000 | 68,801,000 | ||||||||
Occupancy | 1,989,000 | 2,521,000 | 8,643,000 | 9,150,000 | ||||||||
Furniture and equipment | 926,000 | 871,000 | 3,716,000 | 3,464,000 | ||||||||
Data processing costs | 3,630,000 | 2,537,000 | 13,772,000 | 11,618,000 | ||||||||
Charitable foundation contributions | 1,000,000 | 250,000 | 1,708,000 | 666,000 | ||||||||
Other expense | 4,779,000 | 5,361,000 | 20,026,000 | 21,590,000 | ||||||||
Total noninterest expense | 33,806,000 | 29,940,000 | 125,789,000 | 115,289,000 | ||||||||
Income before federal income | ||||||||||||
tax expense | 23,227,000 | 25,209,000 | 98,286,000 | 102,699,000 | ||||||||
Federal income tax expense | 3,601,000 | 5,179,000 | 18,693,000 | 20,482,000 | ||||||||
Net Income | $ | 19,626,000 | $ | 20,030,000 | $ | 79,593,000 | $ | 82,217,000 | ||||
Basic earnings per share | ||||||||||||
Diluted earnings per share | ||||||||||||
Average basic shares outstanding | 16,142,578 | 16,044,223 | 16,130,696 | 16,015,678 | ||||||||
Average diluted shares outstanding | 16,142,578 | 16,044,223 | 16,130,696 | 16,015,678 | ||||||||
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Fourth Quarter 2024 Results | ||||||||||||||
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CONSOLIDATED FINANCIAL HIGHLIGHTS | ||||||||||||||
(Unaudited) | ||||||||||||||
Quarterly | Year-To-Date | |||||||||||||
(dollars in thousands except per share data) | 2024 | 2024 | 2024 | 2024 | 2023 | |||||||||
4th Qtr | 3rd Qtr | 2nd Qtr | 1st Qtr | 4th Qtr | 2024 | 2023 | ||||||||
EARNINGS | ||||||||||||||
Net interest income | $ | 48,361 | 48,292 | 47,072 | 47,361 | 48,649 | 191,086 | 193,545 | ||||||
Provision for credit losses | $ | 1,500 | 1,100 | 3,500 | 1,300 | 1,800 | 7,400 | 7,700 | ||||||
Noninterest income | $ | 10,172 | 9,667 | 9,681 | 10,868 | 8,300 | 40,389 | 32,143 | ||||||
Noninterest expense | $ | 33,806 | 32,303 | 29,737 | 29,944 | 29,940 | 125,789 | 115,289 | ||||||
Net income before federal income | ||||||||||||||
tax expense | $ | 23,227 | 24,556 | 23,516 | 26,985 | 25,209 | 98,286 | 102,699 | ||||||
Net income | $ | 19,626 | 19,618 | 18,786 | 21,562 | 20,030 | 79,593 | 82,217 | ||||||
Basic earnings per share | $ | 1.22 | 1.22 | 1.17 | 1.34 | 1.25 | 4.93 | 5.13 | ||||||
Diluted earnings per share | $ | 1.22 | 1.22 | 1.17 | 1.34 | 1.25 | 4.93 | 5.13 | ||||||
Average basic shares outstanding | 16,142,578 | 16,138,320 | 16,122,813 | 16,118,858 | 16,044,223 | 16,130,696 | 16,015,678 | |||||||
Average diluted shares outstanding | 16,142,578 | 16,138,320 | 16,122,813 | 16,118,858 | 16,044,223 | 16,130,696 | 16,015,678 | |||||||
PERFORMANCE RATIOS | ||||||||||||||
Return on average assets | 1.30 % | 1.35 % | 1.36 % | 1.61 % | 1.52 % | 1.40 % | 1.62 % | |||||||
Return on average equity | 13.36 % | 13.73 % | 13.93 % | 16.41 % | 16.04 % | 14.35 % | 17.24 % | |||||||
Net interest margin (fully tax-equivalent) | 3.41 % | 3.52 % | 3.63 % | 3.74 % | 3.92 % | 3.58 % | 4.05 % | |||||||
Efficiency ratio | 57.76 % | 55.73 % | 52.40 % | 51.42 % | 52.57 % | 54.34 % | 51.08 % | |||||||
Full-time equivalent employees | 668 | 653 | 670 | 642 | 651 | 668 | 651 | |||||||
YIELD ON ASSETS / COST OF FUNDS | ||||||||||||||
Yield on loans | 6.41 % | 6.69 % | 6.64 % | 6.65 % | 6.53 % | 6.61 % | 6.25 % | |||||||
Yield on securities | 2.62 % | 2.43 % | 2.30 % | 2.20 % | 2.18 % | 2.40 % | 2.06 % | |||||||
Yield on interest-earning deposits | 4.66 % | 5.37 % | 5.28 % | 5.35 % | 5.31 % | 5.19 % | 5.14 % | |||||||
Yield on total earning assets | 5.81 % | 6.08 % | 6.07 % | 6.06 % | 5.95 % | 6.02 % | 5.68 % | |||||||
Yield on total assets | 5.49 % | 5.73 % | 5.72 % | 5.72 % | 5.61 % | 5.68 % | 5.36 % | |||||||
Cost of deposits | 2.36 % | 2.52 % | 2.42 % | 2.25 % | 1.94 % | 2.40 % | 1.48 % | |||||||
Cost of borrowed funds | 3.73 % | 3.75 % | 3.56 % | 3.51 % | 3.15 % | 3.65 % | 2.90 % | |||||||
Cost of interest-bearing liabilities | 3.30 % | 3.53 % | 3.40 % | 3.27 % | 2.96 % | 3.38 % | 2.47 % | |||||||
Cost of funds (total earning assets) | 2.40 % | 2.56 % | 2.44 % | 2.32 % | 2.03 % | 2.44 % | 1.63 % | |||||||
Cost of funds (total assets) | 2.27 % | 2.41 % | 2.31 % | 2.19 % | 1.91 % | 2.30 % | 1.54 % | |||||||
MORTGAGE BANKING ACTIVITY | ||||||||||||||
Total mortgage loans originated | $ | 121,010 | 160,944 | 122,728 | 79,930 | 88,187 | 484,612 | 386,343 | ||||||
Purchase mortgage loans originated | $ | 82,212 | 122,747 | 103,939 | 57,668 | 75,365 | 366,566 | 326,554 | ||||||
Refinance mortgage loans originated | $ | 38,798 | 38,197 | 18,789 | 22,262 | 12,822 | 118,046 | 59,789 | ||||||
Mortgage loans originated to sell | $ | 100,628 | 128,678 | 91,490 | 59,280 | 59,135 | 380,076 | 204,078 | ||||||
Income on sale of mortgage loans | $ | 3,768 | 3,376 | 2,487 | 2,064 | 1,487 | 11,695 | 6,393 | ||||||
CAPITAL | ||||||||||||||
Tangible equity to tangible assets | 8.91 % | 9.10 % | 9.03 % | 8.99 % | 8.91 % | 8.91 % | 8.91 % | |||||||
Tier 1 leverage capital ratio | 10.60 % | 10.68 % | 10.85 % | 10.88 % | 10.84 % | 10.60 % | 10.84 % | |||||||
Common equity risk-based capital ratio | 10.66 % | 10.53 % | 10.46 % | 10.41 % | 10.07 % | 10.66 % | 10.07 % | |||||||
Tier 1 risk-based capital ratio | 11.54 % | 11.42 % | 11.36 % | 11.33 % | 10.99 % | 11.54 % | 10.99 % | |||||||
Total risk-based capital ratio | 14.17 % | 14.13 % | 14.10 % | 14.05 % | 13.69 % | 14.17 % | 13.69 % | |||||||
Tier 1 capital | $ | 633,134 | 618,038 | 602,835 | 587,888 | 570,730 | 633,134 | 570,730 | ||||||
Tier 1 plus tier 2 capital | $ | 777,857 | 764,653 | 748,097 | 729,410 | 710,905 | 777,857 | 710,905 | ||||||
Total risk-weighted assets | $ | 5,487,886 | 5,411,628 | 5,306,911 | 5,190,106 | 5,192,970 | 5,487,886 | 5,192,970 | ||||||
Book value per common share | $ | 36.20 | 36.14 | 34.15 | 33.29 | 32.38 | 36.20 | 32.38 | ||||||
Tangible book value per common share | $ | 33.14 | 33.07 | 31.09 | 30.22 | 29.31 | 33.14 | 29.31 | ||||||
Cash dividend per common share | $ | 0.36 | 0.36 | 0.35 | 0.35 | 0.34 | 1.42 | 1.34 | ||||||
ASSET QUALITY | ||||||||||||||
Gross loan charge-offs | $ | 3,787 | 10 | 26 | 15 | 53 | 3,838 | 863 | ||||||
Recoveries | $ | 150 | 92 | 296 | 439 | 160 | 977 | 832 | ||||||
Net loan charge-offs (recoveries) | $ | 3,637 | (82) | (270) | (424) | (107) | 2,861 | 31 | ||||||
Net loan charge-offs to average loans | 0.31 % | (0.01 %) | (0.02 %) | (0.04 %) | (0.01 %) | 0.06 % | < | |||||||
Allowance for credit losses | $ | 54,454 | 56,590 | 55,408 | 51,638 | 49,914 | 54,454 | 49,914 | ||||||
Allowance to loans | 1.18 % | 1.24 % | 1.25 % | 1.19 % | 1.16 % | 1.18 % | 1.16 % | |||||||
Nonperforming loans | $ | 5,743 | 9,877 | 9,129 | 6,040 | 3,415 | 5,743 | 3,415 | ||||||
Other real estate/repossessed assets | $ | 0 | 0 | 0 | 200 | 200 | 0 | 200 | ||||||
Nonperforming loans to total loans | 0.12 % | 0.22 % | 0.21 % | 0.14 % | 0.08 % | 0.12 % | 0.08 % | |||||||
Nonperforming assets to total assets | 0.09 % | 0.17 % | 0.16 % | 0.11 % | 0.07 % | 0.09 % | 0.07 % | |||||||
NONPERFORMING ASSETS - COMPOSITION | ||||||||||||||
Residential real estate: | ||||||||||||||
Land development | $ | 97 | 100 | 1 | 1 | 1 | 97 | 1 | ||||||
Construction | $ | 0 | 0 | 0 | 0 | 0 | 0 | 0 | ||||||
Owner occupied / rental | $ | 2,878 | 3,008 | 2,288 | 3,370 | 3,095 | 2,878 | 3,095 | ||||||
Commercial real estate: | ||||||||||||||
Land development | $ | 0 | 0 | 0 | 0 | 0 | 0 | 0 | ||||||
Construction | $ | 0 | 0 | 0 | 0 | 0 | 0 | 0 | ||||||
Owner occupied | $ | 42 | 0 | 0 | 200 | 270 | 42 | 270 | ||||||
Non-owner occupied | $ | 0 | 0 | 0 | 0 | 0 | 0 | 0 | ||||||
Non-real estate: | ||||||||||||||
Commercial assets | $ | 2,726 | 6,769 | 6,840 | 2,669 | 249 | 2,726 | 249 | ||||||
Consumer assets | $ | 0 | 0 | 0 | 0 | 0 | 0 | 0 | ||||||
Total nonperforming assets | $ | 5,743 | 9,877 | 9,129 | 6,240 | 3,615 | 5,743 | 3,615 | ||||||
NONPERFORMING ASSETS - RECON | ||||||||||||||
Beginning balance | $ | 9,877 | 9,129 | 6,240 | 3,615 | 5,940 | 3,615 | 7,728 | ||||||
Additions | $ | 224 | 906 | 4,570 | 2,802 | 2,166 | 8,502 | 7,925 | ||||||
Return to performing status | $ | (102) | 0 | 0 | 0 | 0 | (102) | (31) | ||||||
Principal payments | $ | (515) | (158) | (1,481) | (177) | (4,402) | (2,331) | (10,609) | ||||||
Sale proceeds | $ | 0 | 0 | (200) | 0 | (51) | (200) | (712) | ||||||
Loan charge-offs | $ | (3,741) | 0 | 0 | 0 | (38) | (3,741) | (686) | ||||||
Valuation write-downs | $ | 0 | 0 | 0 | 0 | 0 | 0 | 0 | ||||||
Ending balance | $ | 5,743 | 9,877 | 9,129 | 6,240 | 3,615 | 5,743 | 3,615 | ||||||
LOAN PORTFOLIO COMPOSITION | ||||||||||||||
Commercial: | ||||||||||||||
Commercial & industrial | $ | 1,287,308 | 1,312,774 | 1,275,745 | 1,222,638 | 1,254,586 | 1,287,308 | 1,254,586 | ||||||
Land development & construction | $ | 66,936 | 66,374 | 76,247 | 75,091 | 74,752 | 66,936 | 74,752 | ||||||
Owner occupied comm'l R/E | $ | 748,837 | 746,714 | 732,844 | 719,338 | 717,667 | 748,837 | 717,667 | ||||||
Non-owner occupied comm'l R/E | $ | 1,128,404 | 1,095,988 | 1,059,052 | 1,045,614 | 1,035,684 | 1,128,404 | 1,035,684 | ||||||
Multi-family & residential rental | $ | 475,819 | 426,438 | 389,390 | 366,961 | 332,609 | 475,819 | 332,609 | ||||||
Total commercial | $ | 3,707,304 | 3,648,288 | 3,533,278 | 3,429,642 | 3,415,298 | 3,707,304 | 3,415,298 | ||||||
Retail: | ||||||||||||||
1-4 family mortgages | $ | 827,597 | 844,093 | 849,626 | 840,653 | 837,407 | 827,597 | 837,407 | ||||||
Other consumer | $ | 65,880 | 60,637 | 55,341 | 51,711 | 51,053 | 65,880 | 51,053 | ||||||
Total retail | $ | 893,477 | 904,730 | 904,967 | 892,364 | 888,460 | 893,477 | 888,460 | ||||||
Total loans | $ | 4,600,781 | 4,553,018 | 4,438,245 | 4,322,006 | 4,303,758 | 4,600,781 | 4,303,758 | ||||||
END OF PERIOD BALANCES | ||||||||||||||
Loans | $ | 4,600,781 | 4,553,018 | 4,438,245 | 4,322,006 | 4,303,758 | 4,600,781 | 4,303,758 | ||||||
Securities | $ | 751,865 | 724,888 | 669,420 | 630,666 | 638,605 | 751,865 | 638,605 | ||||||
Other interest-earning assets | $ | 336,019 | 240,780 | 135,766 | 184,625 | 60,125 | 336,019 | 60,125 | ||||||
Total earning assets (before allowance) | $ | 5,688,665 | 5,518,686 | 5,243,431 | 5,137,297 | 5,002,488 | 5,688,665 | 5,002,488 | ||||||
Total assets | $ | 6,052,161 | 5,917,127 | 5,602,388 | 5,465,953 | 5,353,224 | 6,052,161 | 5,353,224 | ||||||
Noninterest-bearing deposits | $ | 1,264,523 | 1,182,219 | 1,119,888 | 1,134,995 | 1,247,640 | 1,264,523 | 1,247,640 | ||||||
Interest-bearing deposits | $ | 3,433,843 | 3,273,679 | 3,026,686 | 2,872,815 | 2,653,278 | 3,433,843 | 2,653,278 | ||||||
Total deposits | $ | 4,698,366 | 4,455,898 | 4,146,574 | 4,007,810 | 3,900,918 | 4,698,366 | 3,900,918 | ||||||
Total borrowed funds | $ | 649,528 | 778,669 | 789,327 | 815,744 | 837,335 | 649,528 | 837,335 | ||||||
Total interest-bearing liabilities | $ | 4,083,371 | 4,052,348 | 3,816,013 | 3,688,559 | 3,490,613 | 4,083,371 | 3,490,613 | ||||||
Shareholders' equity | $ | 584,526 | 583,311 | 551,151 | 536,644 | 522,145 | 584,526 | 522,145 | ||||||
AVERAGE BALANCES | ||||||||||||||
Loans | $ | 4,565,837 | 4,467,365 | 4,396,475 | 4,299,163 | 4,184,070 | 4,432,671 | 4,046,815 | ||||||
Securities | $ | 742,145 | 699,872 | 640,627 | 634,099 | 618,517 | 679,415 | 626,842 | ||||||
Other interest-earning assets | $ | 330,490 | 284,187 | 182,636 | 150,234 | 118,996 | 237,272 | 106,515 | ||||||
Total earning assets (before allowance) | $ | 5,638,472 | 5,451,424 | 5,219,738 | 5,083,496 | 4,921,583 | 5,349,358 | 4,780,172 | ||||||
Total assets | $ | 5,967,036 | 5,781,111 | 5,533,262 | 5,384,675 | 5,224,238 | 5,667,655 | 5,063,693 | ||||||
Noninterest-bearing deposits | $ | 1,188,561 | 1,191,642 | 1,139,887 | 1,175,884 | 1,281,201 | 1,174,082 | 1,372,840 | ||||||
Interest-bearing deposits | $ | 3,335,477 | 3,145,799 | 2,957,011 | 2,790,308 | 2,600,703 | 3,058,151 | 2,384,075 | ||||||
Total deposits | $ | 4,524,038 | 4,337,441 | 4,096,898 | 3,966,192 | 3,881,904 | 4,232,233 | 3,756,915 | ||||||
Total borrowed funds | $ | 770,838 | 796,077 | 800,577 | 816,848 | 773,491 | 796,016 | 771,286 | ||||||
Total interest-bearing liabilities | $ | 4,106,315 | 3,941,876 | 3,757,588 | 3,607,156 | 3,374,194 | 3,854,167 | 3,155,361 | ||||||
Shareholders' equity | $ | 582,829 | 566,852 | 540,868 | 527,180 | 495,431 | 554,544 | 477,027 | ||||||
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SOURCE Mercantile Bank Corporation
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