Mercantile Bank Corporation Announces Solid Second Quarter Results
Mercantile Bank (NASDAQ: MBWM) reported net income of $18.8 million, or $1.17 per diluted share, for Q2 2024, compared to $20.4 million, or $1.27 per diluted share, in Q2 2023. The bank saw strong local deposit and commercial loan growth, with total deposits increasing by $246 million (12.6% annualized) and total loans growing by $134 million (6.3% annualized) in the first half of 2024. The net interest margin was 3.63%, down from 4.05% in Q2 2023. Noninterest income increased by 26.6% to $9.7 million, driven by higher mortgage banking income and service charges. Asset quality remained strong with nonperforming assets at 0.2% of total assets. The bank maintained a 'well-capitalized' position with a total risk-based capital ratio of 13.9%.
- Strong local deposit growth of $261 million (14.0% annualized) in H1 2024
- Commercial loan portfolio expansion of $118 million (6.9% annualized) in H1 2024
- Noninterest income increased by 26.6% to $9.7 million in Q2 2024
- Maintained 'well-capitalized' position with total risk-based capital ratio of 13.9%
- Net loan recoveries of $0.7 million (0.03% of average total loans) in H1 2024
- Net income decreased to $18.8 million in Q2 2024 from $20.4 million in Q2 2023
- Net interest margin declined to 3.63% in Q2 2024 from 4.05% in Q2 2023
- Cost of funds increased to 2.44% in Q2 2024 from 1.56% in Q2 2023
- Nonperforming assets increased to $9.1 million (0.2% of total assets) from $3.6 million at year-end 2023
- Provisions for credit losses increased to $3.5 million in Q2 2024 from $2.0 million in Q2 2023
Insights
Mercantile Bank Corporation's second quarter results reflect a stable financial performance amidst challenging economic conditions. The net income for Q2 2024 was
Examining the net interest margin, we see a decrease from 4.05% to 3.63%. This decline, while noteworthy, is primarily attributed to the rising cost of funds, a challenge faced by many banks in the current high-interest environment. However, the yield on average earning assets increased to 6.07%, indicating effective asset management.
Importantly, noninterest income saw a significant rise of 26.6%, mainly driven by increases in mortgage banking income and service charges. This diversification of revenue streams is a positive sign, suggesting that Mercantile is not overly reliant on interest income alone.
Overall, the bank's performance shows resilience with strategic initiatives such as enhancing on-balance sheet liquidity and maintaining a solid capital position with a total risk-based capital ratio of 13.9%. For retail investors, the slightly lower net income should be weighed against the bank's successful efforts to grow its deposit base and manage loan quality.
The second quarter results of Mercantile Bank Corporation reveal significant insights into their market strategy and customer engagement. The 14.0% annualized growth in local deposits is particularly impressive, suggesting successful customer acquisition and retention strategies. This growth outpacing loan growth by over 6% indicates a strong liquidity position, which is critical in the current economic climate.
Moreover, the commercial loan growth, despite substantial paydowns, indicates robust demand for Mercantile's lending products. The bank's proactive approach in managing its commercial loan pipeline and ensuring credit availability underscores its commitment to supporting local businesses, which can foster long-term client loyalty and revenue stability.
Additionally, the bank's focus on enhancing noninterest income through mortgage banking and service charges reflects a well-rounded approach to revenue generation. This strategy not only boosts profitability but also provides a buffer against fluctuations in interest income.
For investors, Mercantile's ability to grow its deposit base and maintain strong asset quality metrics amidst rising interest rates and economic uncertainties positions it as a stable and potentially rewarding investment.
Strong local deposit and commercial loan growth and ongoing strength in asset quality metrics highlight quarter
"Our solid second quarter financial performance provides further evidence of our ability to successfully navigate the challenges arising from shifting economic and operating environments," said Ray Reitsma, President and Chief Executive Officer of Mercantile. "We are very pleased with the levels of local deposit and commercial loan growth during the quarter, which demonstrate our ongoing focus on new client acquisition, meeting the banking needs of existing customers, and relationship banking. Our net interest margin remained healthy during the second quarter, which when coupled with the local deposit and commercial loan expansion and notable increases in several noninterest income categories, provided for strong operating results during the period. As evidenced by the sustained strength in asset quality metrics, we remain committed to growing and administering the loan portfolio in a disciplined manner."
Second quarter highlights include:
- Strong local deposit growth
- Robust commercial loan portfolio expansion
- Continuing strength in commercial loan pipeline
- Substantial increases in several noninterest income revenue streams
- Sustained low levels of nonperforming assets, past due loans, and loan charge-offs
- Solid capital position
Operating Results
Net revenue, consisting of net interest income and noninterest income, was
The net interest margin was 3.63 percent in the second quarter of 2024, down from 4.05 percent in the prior-year second quarter. The yield on average earning assets was 6.07 percent during the current-year second quarter, an increase from 5.61 percent during the respective 2023 period. The higher yield primarily resulted from an increased yield on loans. The yield on loans was 6.64 percent during the second quarter of 2024, up from 6.19 percent during the second quarter of 2023 mainly due to higher interest rates on variable-rate commercial loans resulting from the Federal Open Market Committee ("FOMC") raising the targeted federal funds rate in an effort to reduce elevated inflation levels. The FOMC increased the targeted federal funds rate by 75 basis points during the period of March 2023 through July 2023, during which time average variable-rate commercial loans represented approximately 68 percent of average total commercial loans.
The cost of funds was 2.44 percent in the second quarter of 2024, up from 1.56 percent in the second quarter of 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 noninterest-bearing and lower-cost deposits and an increase in higher-cost money market accounts and time deposits stemming from deposit migration and new deposit relationships, also contributed to the increased cost of funds.
Mercantile recorded provisions for credit losses of
Noninterest income totaled
Noninterest expense totaled
Mr. Reitsma commented, "We are very pleased with the noteworthy increases in mortgage banking income and treasury management fees. The growth in mortgage banking income mainly reflected the success of a strategic initiative to increase the percentage of loans originated with the intent to sell, while the higher level of treasury management fees, which was fueled by increases in service charges on accounts and payroll processing fees, in large part stemmed from the expanded use of products and services. Our net interest margin, while decreasing as anticipated due to a higher cost of funds, remained above historical levels during the second quarter of 2024. We regularly review our operating processes to identify further opportunities to improve efficiency while meeting balance sheet growth objectives and continuing to provide customers with the excellent service that they have become accustomed to. Despite the unique circumstances surrounding a troubled nonreal-estate-related commercial loan relationship that necessitated a sizeable reserve allocation, we believe the credit trends associated with our commercial loan portfolio remain solid and steady."
Balance Sheet
As of June 30, 2024, total assets were
As of June 30, 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 approximately
Commercial and industrial loans and owner-occupied commercial real estate loans combined represented approximately 57 percent of total commercial loans as of June 30, 2024, a level that has remained relatively consistent with prior periods and in line with management's expectations.
Total deposits equaled
Mr. Reitsma noted, "The significant growth in commercial loans during the first six months of 2024, reflecting increases in all portfolio segments, occurred despite elevated amounts of full and partial payoffs and paydowns. Our lending team has done an exceptional job of meeting existing customers' credit needs and identifying new lending opportunities, with an emphasis on securing potential clients' overall banking relationships. In light of our robust commercial loan pipeline and credit availability for commercial construction and development loans, we believe commercial loan growth will be solid in forthcoming periods. We are delighted with the local deposit growth during the year-to-date period, and gaining deposit market share will remain a top priority."
Asset Quality
Nonperforming assets totaled
Mr. Reitsma remarked, "Our steadfast commitment to employing thorough and disciplined underwriting practices to meet loan portfolio growth objectives is evidenced by our sustained strength in asset quality metrics. Nonperforming assets, while increasing during the first six months of 2024 primarily due to the deterioration of two nonreal-estate-related commercial loan relationships, remain at a low level. As reflected by continuing low levels of nonaccrual loans, past due loans, and loan charge-offs, our commercial borrowers have continued to demonstrate resiliency in dealing with the challenges stemming from current operating conditions, including higher interest rates and the associated increase in debt service requirements. We continue to closely monitor our commercial loan portfolio for signs of systemic distress and believe our efforts to identify emerging credit issues as soon as possible will help limit the impact of any such noted issues on our overall financial condition. Our residential mortgage loan and consumer loan portfolios, which have not exhibited signs of systemic credit deterioration, such as higher delinquency levels, have continued to perform well."
Capital Position
Shareholders' equity totaled
All of Mercantile Bank's investments are categorized as available-for-sale. As of June 30, 2024, the net unrealized loss on these investments totaled
Mercantile reported 16,137,646 total shares outstanding as of June 30, 2024.
Mr. Reitsma concluded, "Our ongoing strong financial performance has allowed us to continue our regular quarterly cash dividend program, and as demonstrated by our announcement of an increased third quarter cash dividend earlier today, we remain committed to providing shareholders with competitive returns on their investments. We believe our robust capital position, asset quality metrics, and operating performance, along with the sustained strength in our commercial loan pipeline, position us to remain a steady and profitable performer and withstand any challenges resulting from the current operating environment and changing economic conditions. The increases in loans and local deposits during the first six months of 2024 reflect the success of our community banking model and associated emphasis on forming mutually beneficial relationships with established and new clients."
Investor Presentation
Mercantile has prepared presentation materials that management intends to use during its previously announced second quarter 2024 conference call on Tuesday, July 16, 2024, 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; the transition from LIBOR to SOFR; 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 | ||||||
Second Quarter 2024 Results | ||||||
MERCANTILE BANK CORPORATION | ||||||
CONSOLIDATED BALANCE SHEETS | ||||||
(Unaudited) | ||||||
JUNE 30, | DECEMBER 31, | JUNE 30, | ||||
2024 | 2023 | 2023 | ||||
ASSETS | ||||||
Cash and due from banks | $ | 61,863,000 | $ | 70,408,000 | $ | 69,133,000 |
Interest-earning deposits | 135,766,000 | 60,125,000 | 138,663,000 | |||
Total cash and cash equivalents | 197,629,000 | 130,533,000 | 207,796,000 | |||
Securities available for sale | 647,907,000 | 617,092,000 | 608,972,000 | |||
Federal Home Loan Bank stock | 21,513,000 | 21,513,000 | 21,513,000 | |||
Mortgage loans held for sale | 22,126,000 | 18,607,000 | 11,942,000 | |||
Loans | 4,438,245,000 | 4,303,758,000 | 4,051,843,000 | |||
Allowance for credit losses | (55,408,000) | (49,914,000) | (44,721,000) | |||
Loans, net | 4,382,837,000 | 4,253,844,000 | 4,007,122,000 | |||
Premises and equipment, net | 50,158,000 | 50,928,000 | 52,291,000 | |||
Bank owned life insurance | 86,001,000 | 85,668,000 | 81,500,000 | |||
Goodwill | 49,473,000 | 49,473,000 | 49,473,000 | |||
Other assets | 144,744,000 | 125,566,000 | 96,978,000 | |||
Total assets | $ | 5,602,388,000 | $ | 5,353,224,000 | $ | 5,137,587,000 |
LIABILITIES AND SHAREHOLDERS' EQUITY | ||||||
Deposits: | ||||||
Noninterest-bearing | $ | 1,119,888,000 | $ | 1,247,640,000 | $ | 1,371,633,000 |
Interest-bearing | 3,026,686,000 | 2,653,278,000 | 2,385,156,000 | |||
Total deposits | 4,146,574,000 | 3,900,918,000 | 3,756,789,000 | |||
Securities sold under agreements to repurchase | 221,898,000 | 229,734,000 | 219,457,000 | |||
Federal Home Loan Bank advances | 427,083,000 | 467,910,000 | 467,910,000 | |||
Subordinated debentures | 49,987,000 | 49,644,000 | 49,301,000 | |||
Subordinated notes | 89,143,000 | 88,971,000 | 88,800,000 | |||
Accrued interest and other liabilities | 116,552,000 | 93,902,000 | 76,628,000 | |||
Total liabilities | 5,051,237,000 | 4,831,079,000 | 4,658,885,000 | |||
SHAREHOLDERS' EQUITY | ||||||
Common stock | 297,591,000 | 295,106,000 | 292,906,000 | |||
Retained earnings | 306,804,000 | 277,526,000 | 247,313,000 | |||
Accumulated other comprehensive income/(loss) | (53,244,000) | (50,487,000) | (61,517,000) | |||
Total shareholders' equity | 551,151,000 | 522,145,000 | 478,702,000 | |||
Total liabilities and shareholders' equity | $ | 5,602,388,000 | $ | 5,353,224,000 | $ | 5,137,587,000 |
Mercantile Bank Corporation | |||||||||||||
Second Quarter 2024 Results | |||||||||||||
MERCANTILE BANK CORPORATION | |||||||||||||
CONSOLIDATED REPORTS OF INCOME | |||||||||||||
(Unaudited) | |||||||||||||
THREE MONTHS ENDED | THREE MONTHS ENDED | SIX MONTHS ENDED | SIX MONTHS ENDED | ||||||||||
June 30, 2024 | June 30, 2023 | June 30, 2024 | June 30, 2023 | ||||||||||
INTEREST INCOME | |||||||||||||
Loans, including fees | $ | 72,819,000 | $ | 62,006,000 | $ | 144,089,000 | $ | 119,159,000 | |||||
Investment securities | 3,624,000 | 3,111,000 | 7,046,000 | 6,118,000 | |||||||||
Interest-earning deposits | 2,436,000 | 801,000 | 4,469,000 | 1,125,000 | |||||||||
Total interest income | 78,879,000 | 65,918,000 | 155,604,000 | 126,402,000 | |||||||||
INTEREST EXPENSE | |||||||||||||
Deposits | 24,710,000 | 12,379,000 | 46,934,000 | 20,286,000 | |||||||||
Short-term borrowings | 1,757,000 | 914,000 | 3,412,000 | 1,373,000 | |||||||||
Federal Home Loan Bank advances | 3,252,000 | 3,051,000 | 6,651,000 | 4,845,000 | |||||||||
Other borrowed money | 2,088,000 | 2,023,000 | 4,173,000 | 3,963,000 | |||||||||
Total interest expense | 31,807,000 | 18,367,000 | 61,170,000 | 30,467,000 | |||||||||
Net interest income | 47,072,000 | 47,551,000 | 94,434,000 | 95,935,000 | |||||||||
Provision for credit losses | 3,500,000 | 2,000,000 | 4,800,000 | 2,600,000 | |||||||||
Net interest income after | |||||||||||||
provision for credit losses | 43,572,000 | 45,551,000 | 89,634,000 | 93,335,000 | |||||||||
NONINTEREST INCOME | |||||||||||||
Service charges on accounts | 1,692,000 | 1,064,000 | 3,224,000 | 2,041,000 | |||||||||
Mortgage banking income | 3,023,000 | 1,835,000 | 5,365,000 | 3,050,000 | |||||||||
Credit and debit card income | 2,266,000 | 2,426,000 | 4,387,000 | 4,485,000 | |||||||||
Interest rate swap income | 766,000 | 748,000 | 2,104,000 | 1,785,000 | |||||||||
Payroll services | 686,000 | 572,000 | 1,582,000 | 1,317,000 | |||||||||
Earnings on bank owned life insurance | 437,000 | 402,000 | 1,609,000 | 802,000 | |||||||||
Other income | 811,000 | 598,000 | 2,277,000 | 1,117,000 | |||||||||
Total noninterest income | 9,681,000 | 7,645,000 | 20,548,000 | 14,597,000 | |||||||||
NONINTEREST EXPENSE | |||||||||||||
Salaries and benefits | 17,913,000 | 16,461,000 | 36,150,000 | 33,143,000 | |||||||||
Occupancy | 2,220,000 | 2,098,000 | 4,509,000 | 4,387,000 | |||||||||
Furniture and equipment | 923,000 | 878,000 | 1,852,000 | 1,700,000 | |||||||||
Data processing costs | 3,415,000 | 2,881,000 | 6,704,000 | 6,043,000 | |||||||||
Charitable foundation contributions | 4,000 | 2,000 | 707,000 | 12,000 | |||||||||
Other expense | 5,262,000 | 5,509,000 | 9,758,000 | 11,144,000 | |||||||||
Total noninterest expense | 29,737,000 | 27,829,000 | 59,680,000 | 56,429,000 | |||||||||
Income before federal income | |||||||||||||
tax expense | 23,516,000 | 25,367,000 | 50,502,000 | 51,503,000 | |||||||||
Federal income tax expense | 4,730,000 | 5,010,000 | 10,154,000 | 10,171,000 | |||||||||
Net Income | $ | 18,786,000 | $ | 20,357,000 | $ | 40,348,000 | $ | 41,332,000 | |||||
Basic earnings per share | |||||||||||||
Diluted earnings per share | |||||||||||||
Average basic shares outstanding | 16,122,813 | 16,003,372 | 16,120,836 | 15,999,775 | |||||||||
Average diluted shares outstanding | 16,122,813 | 16,003,372 | 16,120,836 | 15,999,775 | |||||||||
Mercantile Bank Corporation | ||||||||||||||
Second Quarter 2024 Results | ||||||||||||||
MERCANTILE BANK CORPORATION | ||||||||||||||
CONSOLIDATED FINANCIAL HIGHLIGHTS | ||||||||||||||
(Unaudited) | ||||||||||||||
Quarterly | Year-To-Date | |||||||||||||
(dollars in thousands except per share data) | 2024 | 2024 | 2023 | 2023 | 2023 | |||||||||
2nd Qtr | 1st Qtr | 4th Qtr | 3rd Qtr | 2nd Qtr | 2024 | 2023 | ||||||||
EARNINGS | ||||||||||||||
Net interest income | $ | 47,072 | 47,361 | 48,649 | 48,961 | 47,551 | 94,434 | 95,935 | ||||||
Provision for credit losses | $ | 3,500 | 1,300 | 1,800 | 3,300 | 2,000 | 4,800 | 2,600 | ||||||
Noninterest income | $ | 9,681 | 10,868 | 8,300 | 9,246 | 7,645 | 20,548 | 14,597 | ||||||
Noninterest expense | $ | 29,737 | 29,944 | 29,940 | 28,920 | 27,829 | 59,680 | 56,429 | ||||||
Net income before federal income | ||||||||||||||
tax expense | $ | 23,516 | 26,985 | 25,209 | 25,987 | 25,367 | 50,502 | 51,503 | ||||||
Net income | $ | 18,786 | 21,562 | 20,030 | 20,855 | 20,357 | 40,348 | 41,332 | ||||||
Basic earnings per share | $ | 1.17 | 1.34 | 1.25 | 1.30 | 1.27 | 2.50 | 2.58 | ||||||
Diluted earnings per share | $ | 1.17 | 1.34 | 1.25 | 1.30 | 1.27 | 2.50 | 2.58 | ||||||
Average basic shares outstanding | 16,122,813 | 16,118,858 | 16,044,223 | 16,018,419 | 16,003,372 | 16,120,836 | 15,999,775 | |||||||
Average diluted shares outstanding | 16,122,813 | 16,118,858 | 16,044,223 | 16,018,419 | 16,003,372 | 16,120,836 | 15,999,775 | |||||||
PERFORMANCE RATIOS | ||||||||||||||
Return on average assets | 1.36 % | 1.61 % | 1.52 % | 1.60 % | 1.64 % | 1.48 % | 1.69 % | |||||||
Return on average equity | 13.93 % | 16.41 % | 16.04 % | 17.07 % | 17.23 % | 15.15 % | 17.97 % | |||||||
Net interest margin (fully tax-equivalent) | 3.63 % | 3.74 % | 3.92 % | 3.98 % | 4.05 % | 3.68 % | 4.16 % | |||||||
Efficiency ratio | 52.40 % | 51.42 % | 52.57 % | 49.68 % | 50.42 % | 51.90 % | 51.05 % | |||||||
Full-time equivalent employees | 670 | 642 | 651 | 643 | 665 | 670 | 665 | |||||||
YIELD ON ASSETS / COST OF FUNDS | ||||||||||||||
Yield on loans | 6.64 % | 6.65 % | 6.53 % | 6.37 % | 6.19 % | 6.65 % | 6.05 % | |||||||
Yield on securities | 2.30 % | 2.20 % | 2.18 % | 2.13 % | 2.00 % | 2.25 % | 1.98 % | |||||||
Yield on other interest-earning assets | 5.28 % | 5.35 % | 5.31 % | 5.26 % | 4.88 % | 5.31 % | 4.65 % | |||||||
Yield on total earning assets | 6.07 % | 6.06 % | 5.95 % | 5.78 % | 5.61 % | 6.06 % | 5.48 % | |||||||
Yield on total assets | 5.72 % | 5.72 % | 5.61 % | 5.45 % | 5.30 % | 5.72 % | 5.18 % | |||||||
Cost of deposits | 2.42 % | 2.25 % | 1.94 % | 1.67 % | 1.36 % | 2.33 % | 1.12 % | |||||||
Cost of borrowed funds | 3.56 % | 3.51 % | 3.15 % | 2.98 % | 2.90 % | 3.53 % | 2.73 % | |||||||
Cost of interest-bearing liabilities | 3.40 % | 3.27 % | 2.96 % | 2.69 % | 2.37 % | 3.33 % | 2.06 % | |||||||
Cost of funds (total earning assets) | 2.44 % | 2.32 % | 2.03 % | 1.80 % | 1.56 % | 2.38 % | 1.32 % | |||||||
Cost of funds (total assets) | 2.31 % | 2.19 % | 1.91 % | 1.70 % | 1.48 % | 2.25 % | 1.25 % | |||||||
MORTGAGE BANKING ACTIVITY | ||||||||||||||
Total mortgage loans originated | $ | 122,728 | 79,930 | 88,187 | 108,602 | 117,563 | 202,658 | 189,554 | ||||||
Purchase mortgage loans originated | $ | 103,939 | 57,668 | 75,365 | 93,520 | 100,941 | 161,607 | 157,669 | ||||||
Refinance mortgage loans originated | $ | 18,789 | 22,262 | 12,822 | 15,082 | 16,622 | 41,051 | 31,885 | ||||||
Mortgage loans originated with intent to sell | $ | 91,490 | 59,280 | 59,135 | 69,305 | 50,734 | 150,770 | 75,638 | ||||||
Income on sale of mortgage loans | $ | 2,487 | 2,064 | 1,487 | 2,386 | 1,570 | 4,551 | 2,520 | ||||||
CAPITAL | ||||||||||||||
Tangible equity to tangible assets | 9.03 % | 8.99 % | 8.91 % | 8.33 % | 8.43 % | 9.03 % | 8.43 % | |||||||
Tier 1 leverage capital ratio | 10.85 % | 10.88 % | 10.84 % | 10.64 % | 10.73 % | 10.85 % | 10.73 % | |||||||
Common equity risk-based capital ratio | 10.46 % | 10.41 % | 10.07 % | 10.41 % | 10.25 % | 10.46 % | 10.25 % | |||||||
Tier 1 risk-based capital ratio | 11.36 % | 11.33 % | 10.99 % | 11.38 % | 11.24 % | 11.36 % | 11.24 % | |||||||
Total risk-based capital ratio | 14.10 % | 14.05 % | 13.69 % | 14.21 % | 14.03 % | 14.10 % | 14.03 % | |||||||
Tier 1 capital | $ | 602,835 | 587,888 | 570,730 | 554,634 | 537,802 | 602,835 | 537,802 | ||||||
Tier 1 plus tier 2 capital | $ | 748,097 | 729,410 | 710,905 | 692,252 | 671,323 | 748,097 | 671,323 | ||||||
Total risk-weighted assets | $ | 5,306,911 | 5,190,106 | 5,192,970 | 4,872,424 | 4,784,428 | 5,306,911 | 4,784,428 | ||||||
Book value per common share | $ | 34.15 | 33.29 | 32.38 | 30.16 | 29.89 | 34.15 | 29.89 | ||||||
Tangible book value per common share | $ | 31.09 | 30.22 | 29.31 | 27.06 | 26.78 | 31.09 | 26.78 | ||||||
Cash dividend per common share | $ | 0.35 | 0.35 | 0.34 | 0.34 | 0.33 | 0.70 | 0.66 | ||||||
ASSET QUALITY | ||||||||||||||
Gross loan charge-offs | $ | 26 | 15 | 53 | 243 | 461 | 41 | 567 | ||||||
Recoveries | $ | 296 | 439 | 160 | 230 | 305 | 735 | 442 | ||||||
Net loan charge-offs (recoveries) | $ | (270) | (424) | (107) | 13 | 156 | (694) | 125 | ||||||
Net loan charge-offs to average loans | (0.02 %) | (0.04 %) | (0.01 %) | < | 0.02 % | (0.03 %) | 0.01 % | |||||||
Allowance for credit losses | $ | 55,408 | 51,638 | 49,914 | 48,006 | 44,721 | 55,408 | 44,721 | ||||||
Allowance to loans | 1.25 % | 1.19 % | 1.16 % | 1.17 % | 1.10 % | 1.25 % | 1.10 % | |||||||
Nonperforming loans | $ | 9,129 | 6,040 | 3,415 | 5,889 | 2,099 | 9,129 | 2,099 | ||||||
Other real estate/repossessed assets | $ | 0 | 200 | 200 | 51 | 661 | 0 | 661 | ||||||
Nonperforming loans to total loans | 0.21 % | 0.14 % | 0.08 % | 0.14 % | 0.05 % | 0.21 % | 0.05 % | |||||||
Nonperforming assets to total assets | 0.16 % | 0.11 % | 0.07 % | 0.11 % | 0.05 % | 0.16 % | 0.05 % | |||||||
NONPERFORMING ASSETS - COMPOSITION | ||||||||||||||
Residential real estate: | ||||||||||||||
Land development | $ | 1 | 1 | 1 | 1 | 2 | 1 | 2 | ||||||
Construction | $ | 0 | 0 | 0 | 0 | 0 | 0 | 0 | ||||||
Owner occupied / rental | $ | 2,288 | 3,370 | 3,095 | 1,913 | 1,793 | 2,288 | 1,793 | ||||||
Commercial real estate: | ||||||||||||||
Land development | $ | 0 | 0 | 0 | 0 | 0 | 0 | 0 | ||||||
Construction | $ | 0 | 0 | 0 | 0 | 0 | 0 | 0 | ||||||
Owner occupied | $ | 0 | 200 | 270 | 738 | 716 | 0 | 716 | ||||||
Non-owner occupied | $ | 0 | 0 | 0 | 0 | 0 | 0 | 0 | ||||||
Non-real estate: | ||||||||||||||
Commercial assets | $ | 6,840 | 2,669 | 249 | 3,288 | 249 | 6,840 | 249 | ||||||
Consumer assets | $ | 0 | 0 | 0 | 0 | 0 | 0 | 0 | ||||||
Total nonperforming assets | $ | 9,129 | 6,240 | 3,615 | 5,940 | 2,760 | 9,129 | 2,760 | ||||||
NONPERFORMING ASSETS - RECON | ||||||||||||||
Beginning balance | $ | 6,240 | 3,615 | 5,940 | 2,760 | 8,443 | 3,615 | 7,728 | ||||||
Additions | $ | 4,570 | 2,802 | 2,166 | 4,163 | 273 | 7,372 | 1,596 | ||||||
Return to performing status | $ | 0 | 0 | 0 | 0 | 0 | 0 | (31) | ||||||
Principal payments | $ | (1,481) | (177) | (4,402) | (166) | (5,526) | (1,658) | (6,041) | ||||||
Sale proceeds | $ | (200) | 0 | (51) | (661) | 0 | (200) | 0 | ||||||
Loan charge-offs | $ | 0 | 0 | (38) | (156) | (430) | 0 | (492) | ||||||
Valuation write-downs | $ | 0 | 0 | 0 | 0 | 0 | 0 | 0 | ||||||
Ending balance | $ | 9,129 | 6,240 | 3,615 | 5,940 | 2,760 | 9,129 | 2,760 | ||||||
LOAN PORTFOLIO COMPOSITION | ||||||||||||||
Commercial: | ||||||||||||||
Commercial & industrial | $ | 1,275,745 | 1,222,638 | 1,254,586 | 1,184,993 | 1,229,588 | 1,275,745 | 1,229,588 | ||||||
Land development & construction | $ | 76,247 | 75,091 | 74,752 | 72,921 | 72,682 | 76,247 | 72,682 | ||||||
Owner occupied comm'l R/E | $ | 732,844 | 719,338 | 717,667 | 671,083 | 659,201 | 732,844 | 659,201 | ||||||
Non-owner occupied comm'l R/E | $ | 1,059,052 | 1,045,614 | 1,035,684 | 1,000,411 | 957,221 | 1,059,052 | 957,221 | ||||||
Multi-family & residential rental | $ | 389,390 | 366,961 | 332,609 | 308,229 | 287,285 | 389,390 | 287,285 | ||||||
Total commercial | $ | 3,533,278 | 3,429,642 | 3,415,298 | 3,237,637 | 3,205,977 | 3,533,278 | 3,205,977 | ||||||
Retail: | ||||||||||||||
1-4 family mortgages & home equity | $ | 849,626 | 840,653 | 837,407 | 816,849 | 795,661 | 849,626 | 795,661 | ||||||
Other consumer | $ | 55,341 | 51,711 | 51,053 | 49,890 | 50,205 | 55,341 | 50,205 | ||||||
Total retail | $ | 904,967 | 892,364 | 888,460 | 866,739 | 845,866 | 904,967 | 845,866 | ||||||
Total loans | $ | 4,438,245 | 4,322,006 | 4,303,758 | 4,104,376 | 4,051,843 | 4,438,245 | 4,051,843 | ||||||
END OF PERIOD BALANCES | ||||||||||||||
Loans | $ | 4,438,245 | 4,322,006 | 4,303,758 | 4,104,376 | 4,051,843 | 4,438,245 | 4,051,843 | ||||||
Securities | $ | 669,420 | 630,666 | 638,605 | 613,818 | 630,485 | 669,420 | 630,485 | ||||||
Interest-earning deposits | $ | 135,766 | 184,625 | 60,125 | 201,436 | 138,663 | 135,766 | 138,663 | ||||||
Total earning assets (before allowance) | $ | 5,243,431 | 5,137,297 | 5,002,488 | 4,919,630 | 4,820,991 | 5,243,431 | 4,820,991 | ||||||
Total assets | $ | 5,602,388 | 5,465,953 | 5,353,224 | 5,251,012 | 5,137,587 | 5,602,388 | 5,137,587 | ||||||
Noninterest-bearing deposits | $ | 1,119,888 | 1,134,995 | 1,247,640 | 1,309,672 | 1,371,633 | 1,119,888 | 1,371,633 | ||||||
Interest-bearing deposits | $ | 3,026,686 | 2,872,815 | 2,653,278 | 2,591,063 | 2,385,156 | 3,026,686 | 2,385,156 | ||||||
Total deposits | $ | 4,146,574 | 4,007,810 | 3,900,918 | 3,900,735 | 3,756,789 | 4,146,574 | 3,756,789 | ||||||
Total borrowed funds | $ | 789,327 | 815,744 | 837,335 | 761,431 | 826,558 | 789,327 | 826,558 | ||||||
Total interest-bearing liabilities | $ | 3,816,013 | 3,688,559 | 3,490,613 | 3,352,494 | 3,211,714 | 3,816,013 | 3,211,714 | ||||||
Shareholders' equity | $ | 551,151 | 536,644 | 522,145 | 483,211 | 478,702 | 551,151 | 478,702 | ||||||
AVERAGE BALANCES | ||||||||||||||
Loans | $ | 4,396,475 | 4,299,163 | 4,184,070 | 4,054,279 | 4,017,690 | 4,347,819 | 3,973,256 | ||||||
Securities | $ | 640,627 | 634,099 | 618,517 | 626,714 | 634,607 | 637,363 | 631,137 | ||||||
Interest-earning deposits | $ | 182,636 | 150,234 | 118,996 | 208,932 | 64,958 | 166,435 | 48,113 | ||||||
Total earning assets (before allowance) | $ | 5,219,738 | 5,083,496 | 4,921,583 | 4,889,925 | 4,717,255 | 5,151,617 | 4,652,506 | ||||||
Total assets | $ | 5,533,262 | 5,384,675 | 5,224,238 | 5,180,847 | 4,988,413 | 5,458,969 | 4,922,511 | ||||||
Noninterest-bearing deposits | $ | 1,139,887 | 1,175,884 | 1,281,201 | 1,359,238 | 1,361,901 | 1,157,886 | 1,426,331 | ||||||
Interest-bearing deposits | $ | 2,957,011 | 2,790,308 | 2,600,703 | 2,466,834 | 2,278,877 | 2,873,659 | 2,231,902 | ||||||
Total deposits | $ | 4,096,898 | 3,966,192 | 3,881,904 | 3,826,072 | 3,640,778 | 4,031,545 | 3,658,233 | ||||||
Total borrowed funds | $ | 800,577 | 816,848 | 773,491 | 806,376 | 827,105 | 808,713 | 752,330 | ||||||
Total interest-bearing liabilities | $ | 3,757,588 | 3,607,156 | 3,374,194 | 3,273,210 | 3,105,982 | 3,682,372 | 2,984,232 | ||||||
Shareholders' equity | $ | 540,868 | 527,180 | 495,431 | 484,624 | 473,983 | 534,024 | 483,810 | ||||||
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SOURCE Mercantile Bank Corporation
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