GRAND RAPIDS, Mich.,
Oct. 15, 2019 /PRNewswire/ --
Mercantile Bank Corporation (NASDAQ: MBWM) ("Mercantile") reported
net income of $12.6 million, or
$0.77 per diluted share, for the
third quarter of 2019, compared with net income of $10.1 million, or $0.61 per diluted share, for the respective
prior-year period. Net income during the first nine months of 2019
totaled $36.1 million, or
$2.20 per diluted share, compared to
$30.5 million, or $1.83 per diluted share, during the first nine
months of 2018.
Bank owned life insurance claims and a gain on the sale of a
former branch facility increased reported net income during the
first nine months of 2019 by approximately $3.1 million, or $0.19 per diluted share. Interest income related
to purchased loan accounting entries increased net income during
the first nine months of 2019 by $0.9
million, or $0.05 per diluted
share, and net income during the first nine months of 2018 by
$2.7 million, or $0.16 per diluted share. Excluding the impacts of
these transactions, diluted earnings per share increased
$0.29, or 17.4 percent, during the
first nine months of 2019 compared to the respective 2018
period.
"We are very pleased to once again report a quarter of robust
operating performance, representing a continuation of the financial
trends demonstrated during the first six months of the year," said
Robert B. Kaminski, Jr., President
and Chief Executive Officer of Mercantile. "Our sustained strength
in core profitability, solid capital position, and healthy
commercial loan and residential mortgage loan pipelines give us
confidence that the sound financial performance exhibited during
the first three quarters of the year will continue in the fourth
quarter and beyond."
Third quarter highlights include:
- Strong earnings performance and capital position
- Increased fee income
- Controlled overhead costs
- Strong asset quality
- Annualized net loan growth of approximately 7 percent
- New commercial term loan originations of $153 million
- Continued strength in commercial and residential loan
pipelines
Operating Results
Total revenue, which consists of net interest income and
noninterest income, was $38.3 million
during the third quarter of 2019, up $3.7
million, or 10.8 percent, from the prior-year third quarter.
Reflecting a higher level of earning assets, net interest income of
$31.6 million during the third
quarter of 2019 was up $1.8 million,
or 5.9 percent, from the third quarter of 2018.
The net interest margin was 3.71 percent in the third quarter of
2019. The yield on average earning assets equaled 4.73 percent
during the third quarter of 2019, up from 4.60 percent during the
respective 2018 period mainly due to an increased yield on
commercial loans. The improved yield on commercial loans primarily
reflected the positive impact of higher interest rates on
variable-rate commercial loans stemming from the Federal Open
Market Committee's ("FOMC") raising of the targeted federal funds
rate by 25 basis points in both September and December 2018. The impact of these rate increases
more than offset the negative impact of lower interest rates on
variable-rate commercial loans resulting from the FOMC's lowering
of the targeted federal funds rate by 25 basis points in both July
and September 2019. The cost of funds
equaled 1.02 percent during the third quarter of 2019, up from 0.73
percent during the prior-year third quarter mainly due to an
increased cost of time deposits and a change in funding mix.
Increased reliance on more costly wholesale funds during the twelve
months ended September 30, 2019, most
of which occurred in the fourth quarter of 2018 and January 2019, was necessitated by various funding
requirements, including ongoing loan growth and seasonal deposit
withdrawals by certain business customers for bonus and tax
payments.
Net interest income and the net interest margin during the third
quarters of 2019 and 2018, and the first nine months of the current
year and prior year, were affected by purchase accounting accretion
and amortization associated with fair value measurements. Increases
in interest income on loans totaling $0.3
million and $0.4 million were
recorded during the third quarters of 2019 and 2018, respectively,
and increases of $1.1 million and
$3.4 million were recorded during the
first nine months of 2019 and 2018, respectively. Purchased loan
accretion amounts vary from period to period as a result of
periodic cash flow re-estimations, loan payoffs, and payment
performance.
Mercantile recorded a $0.7 million
provision for loan losses during the third quarter of 2019 compared
to a $0.4 million provision during
the respective 2018 period. The provision expense recorded during
both periods mainly reflected ongoing net loan growth.
Noninterest income during the third quarter of 2019 was
$6.7 million, up $2.0 million, or nearly 42 percent, from the
prior-year third quarter. The improved level of noninterest income
primarily reflected increased mortgage banking activity income
stemming from the success of continuing strategic initiatives
designed to increase market presence, along with a higher level of
refinance activity resulting from a recent decrease in residential
mortgage loan interest rates. Increased credit and debit card
income, service charges on accounts, and payroll processing fees
also contributed to the higher level of noninterest income.
Noninterest expense totaled $22.0
million during the third quarter of 2019, up $0.4 million, or 1.7 percent, from the respective
2018 period. The higher level of expense primarily resulted from
increased salary costs, mainly reflecting annual employee merit pay
increases, higher mortgage loan originator commissions, and
increased stock-based compensation expense.
"We are extremely pleased with the growth in certain key fee
income categories, most notably in mortgage banking activity
income," continued Mr. Kaminski. "The significant increase in
mortgage banking activity income reflects the success of ongoing
strategic initiatives implemented across the organization to boost
market penetration, a higher percentage of originated residential
mortgage loans being sold, and enhanced refinance activity stemming
from a recent decline in residential mortgage loan interest rates.
We remain committed to controlling our overhead costs, in large
part reflecting the administration of a sustainable business
model."
Balance Sheet
As of September 30, 2019, total
assets were $3.71 billion, up
$346 million, or 10.3 percent, from
December 31, 2018. Total loans and
interest-earning deposits increased $180
million and $134 million,
respectively, over the same time period. During the twelve months
ended September 30, 2019, total loans
were up $236 million, or 8.7 percent.
Approximately $153 million and
$412 million in commercial term loans
to new and existing borrowers were originated during the third
quarter and first nine months of 2019, respectively, as ongoing
sales and relationship-building efforts resulted in increased
lending opportunities. As of September 30,
2019, unfunded commitments on commercial construction and
development loans totaled approximately $91
million, which are expected to be largely funded over the
next 12 to 18 months. The growth in interest-earning deposits
mainly stemmed from certain deposit-gathering initiatives and an
increase in wholesale funds.
Ray Reitsma, President of
Mercantile Bank of Michigan,
noted, "We are pleased with the increase in net loans during the
current quarter, which equated to an annualized growth rate of
about 7 percent. The net loan growth realized during the quarter
reflected an increase in the commercial portfolio, most notably in
the owner-occupied commercial real estate and non-owner occupied
commercial real estate segments, along with growth in the
residential mortgage loan portfolio. New commercial term loan
originations remained strong during the quarter, representing the
highest quarterly level since the second quarter of 2016. As
evidenced by the solid loan growth during the quarter, our lending
team continues to successfully identify new customer relationships
and meet the needs of our existing customer base. We have not
wavered from our commitment to grow the loan portfolio in a
disciplined manner, with a continuing focus on responsible loan
pricing and sound asset quality. We remain committed to maintaining
the combined commercial and industrial loan and owner-occupied
commercial real estate loan portfolio segments at a minimum
percentage of total commercial loans. Our commercial loan and
residential mortgage loan pipelines remain strong."
As of September 30, 2019,
commercial and industrial loans and owner-occupied commercial real
estate loans combined represented approximately 58 percent of total
commercial loans, a level that has remained relatively consistent
and in line with internal expectations.
Total deposits at September 30,
2019, were $2.77 billion, up
$303 million from December 31, 2018. Local deposits and brokered
deposits were up $263 million and
$40.2 million, respectively, during
the first nine months of 2019. The growth in local deposits was
mainly driven by a special time deposit campaign that was
introduced mid first quarter and ended in early April, along with
increases in business money market accounts and noninterest-bearing
checking accounts. The growth in noninterest-bearing checking
accounts primarily reflected new commercial loan relationships.
Wholesale funds were $517 million, or
approximately 16 percent of total funds, as of September 30, 2019, compared to $474 million, or approximately 16 percent of
total funds, as of December 31,
2018.
Asset Quality
Nonperforming assets at September 30,
2019, were $2.9 million, or
0.1 percent of total assets, compared to $5.0 million, or 0.2 percent of total assets, at
December 31, 2018. The level of past
due loans remains nominal, and loan relationships on the internal
watch list have remained relatively consistent in number and dollar
volume. During the third quarter of 2019, loan charge-offs totaled
$0.5 million while recoveries of
prior period loan charge-offs equaled $0.2
million, providing for net loan charge-offs of $0.3 million, or an annualized 0.05 percent of
average total loans. During the first nine months of 2019, loan
charge-offs totaled $0.8 million
while recoveries of prior period loan charge-offs equaled
$0.4 million, providing for net loan
charge-offs of $0.4 million, or an
annualized 0.02 percent of average total loans.
Capital Position
Shareholders' equity totaled $407
million as of September 30,
2019, an increase of $32.0
million from year-end 2018. The Bank's capital position
remains above "well-capitalized" with a total risk-based capital
ratio of 12.5 percent as of September 30,
2019, compared to 12.3 percent at December 31, 2018. At September 30, 2019, the Bank had approximately
$84 million in excess of the 10.0
percent minimum regulatory threshold required to be considered a
"well-capitalized" institution. Mercantile reported 16,332,660
total shares outstanding at September 30,
2019.
As part of a $20 million common
stock repurchase program announced in May
2019 and instituted in conjunction with the completion of
its existing program that was introduced in January 2015 and later expanded in April 2016, Mercantile repurchased approximately
112,000 shares for $3.5 million, or a
weighted average all-in cost per share of $31.36, during the third quarter of 2019. During
the period of January 2015 through
September 2019, Mercantile
repurchased approximately 1,390,000 shares for $32.6 million, or a weighted average all-in cost
per share of $23.47, under the
original and new programs on a combined basis.
Mr. Kaminski concluded, "As a result of our strong financial
performance during the first three quarters of 2019, we are well
positioned to meet our profitability and growth objectives for the
year. The cash dividend program, which includes providing
shareholders with a competitive dividend yield on a consistent
basis, furthers our commitment to enhancing total shareholder
value. We have been able to successfully gain new clients and
retain existing customers through our market-leading products and
services as well as an emphasis on developing mutually-beneficial
relationships. We are excited about the opportunities we believe
are available to us to expand our presence in our markets, and we
are confident that the demonstrated solid operating performance
during the first nine months of the year will continue during the
fourth quarter and subsequent periods."
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 $3.7 billion and
operates 46 banking offices. Mercantile Bank Corporation's common
stock is listed on the NASDAQ Global Select Market under the symbol
"MBWM."
Forward-Looking Statements
This news release contains comments or information that
constitute forward-looking statements (within the meaning of the
Private Securities Litigation Reform Act of 1995) that are based on
current expectations that involve a number of risks and
uncertainties. Actual results may differ materially from the
results expressed in forward-looking statements. Factors that might
cause such a difference include changes in interest rates and
interest rate relationships; demand for products and services; the
degree of competition by traditional and nontraditional
competitors; changes in banking regulation or actions by bank
regulators; changes in tax laws; changes in prices, levies, and
assessments; the impact of technological advances; governmental and
regulatory policy changes; the outcomes of contingencies; trends in
customer behavior as well as their ability to repay loans; changes
in local real estate values; changes in the national and local
economies; and other factors, including risk factors, disclosed
from time to time in filings made by Mercantile with the Securities
and Exchange Commission. Mercantile undertakes no obligation to
update or clarify forward-looking statements, whether as a result
of new information, future events or otherwise.
FOR FURTHER
INFORMATION:
|
|
|
Robert B. Kaminski,
Jr.
|
Charles
Christmas
|
|
President &
CEO
|
Executive Vice
President & CFO
|
|
616-726-1502
|
616-726-1202
|
|
rkaminski@mercbank.com
|
cchristmas@mercbank.com
|
Mercantile Bank
Corporation
|
|
|
|
|
|
|
Third Quarter 2019
Results
|
|
|
|
|
|
|
MERCANTILE BANK
CORPORATION
|
CONSOLIDATED BALANCE
SHEETS
|
(Unaudited)
|
|
|
|
|
|
|
|
|
|
SEPTEMBER
30,
|
|
DECEMBER
31,
|
|
SEPTEMBER
30,
|
|
|
2019
|
|
2018
|
|
2018
|
ASSETS
|
|
|
|
|
|
|
Cash and due
from banks
|
$
|
84,275,000
|
$
|
64,872,000
|
$
|
51,824,000
|
Interest-earning deposits
|
|
144,263,000
|
|
10,482,000
|
|
28,193,000
|
Total cash and cash equivalents
|
|
228,538,000
|
|
75,354,000
|
|
80,017,000
|
|
|
|
|
|
|
|
Securities
available for sale
|
|
345,533,000
|
|
337,366,000
|
|
326,531,000
|
Federal Home
Loan Bank stock
|
|
18,002,000
|
|
16,022,000
|
|
11,072,000
|
|
|
|
|
|
|
|
Loans
|
|
2,933,013,000
|
|
2,753,085,000
|
|
2,697,417,000
|
Allowance for
loan losses
|
|
(24,414,000)
|
|
(22,380,000)
|
|
(21,692,000)
|
Loans, net
|
|
2,908,599,000
|
|
2,730,705,000
|
|
2,675,725,000
|
|
|
|
|
|
|
|
Premises and
equipment, net
|
|
54,585,000
|
|
48,321,000
|
|
48,104,000
|
Bank owned
life insurance
|
|
67,993,000
|
|
69,647,000
|
|
69,628,000
|
Goodwill
|
|
49,473,000
|
|
49,473,000
|
|
49,473,000
|
Core deposit
intangible, net
|
|
4,237,000
|
|
5,561,000
|
|
6,038,000
|
Other
assets
|
|
33,420,000
|
|
31,458,000
|
|
33,518,000
|
|
|
|
|
|
|
|
Total assets
|
$
|
3,710,380,000
|
$
|
3,363,907,000
|
$
|
3,300,106,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
LIABILITIES AND
SHAREHOLDERS' EQUITY
|
|
|
|
|
|
|
Deposits:
|
|
|
|
|
|
|
Noninterest-bearing
|
$
|
967,189,000
|
$
|
889,784,000
|
$
|
879,442,000
|
Interest-bearing
|
|
1,799,902,000
|
|
1,573,924,000
|
|
1,629,368,000
|
Total deposits
|
|
2,767,091,000
|
|
2,463,708,000
|
|
2,508,810,000
|
|
|
|
|
|
|
|
Securities
sold under agreements to repurchase
|
|
103,990,000
|
|
103,519,000
|
|
112,378,000
|
Federal Home
Loan Bank advances
|
|
364,000,000
|
|
350,000,000
|
|
240,000,000
|
Subordinated
debentures
|
|
46,710,000
|
|
46,199,000
|
|
46,029,000
|
Accrued
interest and other liabilities
|
|
21,389,000
|
|
25,232,000
|
|
13,424,000
|
Total
liabilities
|
|
3,303,180,000
|
|
2,988,658,000
|
|
2,920,641,000
|
|
|
|
|
|
|
|
SHAREHOLDERS'
EQUITY
|
|
|
|
|
|
|
Common
stock
|
|
304,065,000
|
|
308,005,000
|
|
312,544,000
|
Retained
earnings
|
|
98,876,000
|
|
75,483,000
|
|
80,275,000
|
Accumulated
other comprehensive
income/(loss)
|
|
4,259,000
|
|
(8,239,000)
|
|
(13,354,000)
|
Total shareholders' equity
|
|
407,200,000
|
|
375,249,000
|
|
379,465,000
|
|
|
|
|
|
|
|
Total liabilities and shareholders' equity
|
$
|
3,710,380,000
|
$
|
3,363,907,000
|
$
|
3,300,106,000
|
Mercantile Bank
Corporation
|
|
|
|
|
|
|
|
|
|
|
|
Third Quarter 2019
Results
|
|
|
|
|
|
|
|
|
|
|
|
MERCANTILE BANK
CORPORATION
|
CONSOLIDATED REPORTS
OF INCOME
|
(Unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
THREE MONTHS
ENDED
|
|
THREE MONTHS
ENDED
|
NINE MONTHS
ENDED
|
NINE MONTHS
ENDED
|
|
September 30,
2019
|
|
September 30,
2018
|
September 30,
2019
|
September 30,
2018
|
INTEREST
INCOME
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Loans,
including fees
|
$
|
37,005,000
|
|
|
$
|
32,918,000
|
|
$
|
109,559,000
|
|
$
|
97,087,000
|
|
Investment
securities
|
|
2,660,000
|
|
|
|
2,255,000
|
|
|
7,587,000
|
|
|
6,628,000
|
|
Other
interest-earning assets
|
|
651,000
|
|
|
|
313,000
|
|
|
1,627,000
|
|
|
1,071,000
|
|
Total interest income
|
|
40,316,000
|
|
|
|
35,486,000
|
|
|
118,773,000
|
|
|
104,786,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
INTEREST
EXPENSE
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Deposits
|
|
5,573,000
|
|
|
|
3,574,000
|
|
|
15,906,000
|
|
|
9,921,000
|
|
Short-term
borrowings
|
|
71,000
|
|
|
|
63,000
|
|
|
244,000
|
|
|
181,000
|
|
Federal Home
Loan Bank advances
|
|
2,257,000
|
|
|
|
1,201,000
|
|
|
6,751,000
|
|
|
3,134,000
|
|
Other borrowed
money
|
|
810,000
|
|
|
|
808,000
|
|
|
2,506,000
|
|
|
2,286,000
|
|
Total interest expense
|
|
8,711,000
|
|
|
|
5,646,000
|
|
|
25,407,000
|
|
|
15,522,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net interest income
|
|
31,605,000
|
|
|
|
29,840,000
|
|
|
93,366,000
|
|
|
89,264,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Provision for loan
losses
|
|
700,000
|
|
|
|
400,000
|
|
|
2,450,000
|
|
|
1,100,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net interest income after
|
|
|
|
|
|
|
|
|
|
|
|
|
|
provision for loan
losses
|
|
30,905,000
|
|
|
|
29,440,000
|
|
|
90,916,000
|
|
|
88,164,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
NONINTEREST
INCOME
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Service
charges on accounts
|
|
1,185,000
|
|
|
|
1,127,000
|
|
|
3,406,000
|
|
|
3,259,000
|
|
Credit and
debit card income
|
|
1,547,000
|
|
|
|
1,378,000
|
|
|
4,397,000
|
|
|
3,955,000
|
|
Mortgage
banking income
|
|
2,889,000
|
|
|
|
1,235,000
|
|
|
5,291,000
|
|
|
3,115,000
|
|
Payroll
services
|
|
367,000
|
|
|
|
328,000
|
|
|
1,227,000
|
|
|
1,128,000
|
|
Earnings on
bank owned life insurance
|
|
330,000
|
|
|
|
318,000
|
|
|
3,567,000
|
|
|
969,000
|
|
Other
income
|
|
358,000
|
|
|
|
322,000
|
|
|
1,755,000
|
|
|
1,213,000
|
|
Total noninterest income
|
|
6,676,000
|
|
|
|
4,708,000
|
|
|
19,643,000
|
|
|
13,639,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
NONINTEREST
EXPENSE
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Salaries and
benefits
|
|
13,680,000
|
|
|
|
12,932,000
|
|
|
39,982,000
|
|
|
38,027,000
|
|
Occupancy
|
|
1,697,000
|
|
|
|
1,648,000
|
|
|
5,089,000
|
|
|
5,049,000
|
|
Furniture and
equipment
|
|
629,000
|
|
|
|
659,000
|
|
|
1,885,000
|
|
|
1,789,000
|
|
Data
processing costs
|
|
2,342,000
|
|
|
|
2,150,000
|
|
|
6,854,000
|
|
|
6,415,000
|
|
Other
expense
|
|
3,679,000
|
|
|
|
4,261,000
|
|
|
12,134,000
|
|
|
12,931,000
|
|
Total noninterest expense
|
|
22,027,000
|
|
|
|
21,650,000
|
|
|
65,944,000
|
|
|
64,211,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income before federal income
tax expense
|
|
15,554,000
|
|
|
|
12,498,000
|
|
|
44,615,000
|
|
|
37,592,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Federal income tax
expense
|
|
2,954,000
|
|
|
|
2,375,000
|
|
|
8,476,000
|
|
|
7,142,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net Income
|
$
|
12,600,000
|
|
|
$
|
10,123,000
|
|
$
|
36,139,000
|
|
$
|
30,450,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic earnings
per share
|
|
$0.77
|
|
|
|
$0.61
|
|
|
$2.20
|
|
|
$1.83
|
|
Diluted
earnings per share
|
|
$0.77
|
|
|
|
$0.61
|
|
|
$2.20
|
|
|
$1.83
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Average basic
shares outstanding
|
|
16,390,203
|
|
|
|
16,611,411
|
|
|
16,415,843
|
|
|
16,602,701
|
|
Average
diluted shares outstanding
|
|
16,393,078
|
|
|
|
16,619,295
|
|
|
16,420,845
|
|
|
16,610,544
|
|
Mercantile Bank
Corporation
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Third Quarter 2019
Results
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
MERCANTILE BANK
CORPORATION
|
CONSOLIDATED
FINANCIAL HIGHLIGHTS
|
(Unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Quarterly
|
|
Year-To-Date
|
(dollars in
thousands except per share data)
|
2019
|
|
2019
|
|
2019
|
|
2018
|
|
2018
|
|
|
|
|
|
|
3rd
Qtr
|
|
2nd
Qtr
|
|
1st
Qtr
|
|
4th
Qtr
|
|
3rd
Qtr
|
|
2019
|
|
2018
|
EARNINGS
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net interest
income
|
$
|
31,605
|
|
31,116
|
|
30,645
|
|
30,818
|
|
29,840
|
|
93,366
|
|
89,264
|
Provision for
loan losses
|
$
|
700
|
|
900
|
|
850
|
|
0
|
|
400
|
|
2,450
|
|
1,100
|
Noninterest
income
|
$
|
6,676
|
|
6,334
|
|
6,632
|
|
5,370
|
|
4,708
|
|
19,643
|
|
13,639
|
Noninterest
expense
|
$
|
22,027
|
|
22,087
|
|
21,830
|
|
21,958
|
|
21,650
|
|
65,944
|
|
64,211
|
Net income
before federal income
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
tax
expense
|
$
|
15,554
|
|
14,463
|
|
14,597
|
|
14,230
|
|
12,498
|
|
44,615
|
|
37,592
|
Net
income
|
$
|
12,600
|
|
11,715
|
|
11,824
|
|
11,573
|
|
10,123
|
|
36,139
|
|
30,450
|
Basic earnings
per share
|
$
|
0.77
|
|
0.71
|
|
0.72
|
|
0.70
|
|
0.61
|
|
2.20
|
|
1.83
|
Diluted
earnings per share
|
$
|
0.77
|
|
0.71
|
|
0.72
|
|
0.70
|
|
0.61
|
|
2.20
|
|
1.83
|
Average basic
shares outstanding
|
|
16,390,203
|
|
16,428,187
|
|
16,429,571
|
|
16,594,412
|
|
16,611,411
|
|
16,415,843
|
|
16,602,701
|
Average
diluted shares outstanding
|
|
16,393,078
|
|
16,434,714
|
|
16,435,176
|
|
16,600,108
|
|
16,619,295
|
|
16,420,845
|
|
16,610,544
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
PERFORMANCE
RATIOS
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Return on
average assets
|
|
1.38%
|
|
1.33%
|
|
1.39%
|
|
1.39%
|
|
1.22%
|
|
1.37%
|
|
1.25%
|
Return on
average equity
|
|
12.39%
|
|
12.08%
|
|
12.75%
|
|
12.40%
|
|
10.64%
|
|
12.40%
|
|
10.97%
|
Net interest
margin (fully tax-equivalent)
|
3.71%
|
|
3.79%
|
|
3.88%
|
|
3.98%
|
|
3.87%
|
|
3.79%
|
|
3.95%
|
Efficiency
ratio
|
|
57.54%
|
|
58.98%
|
|
58.56%
|
|
60.68%
|
|
62.67%
|
|
58.40%
|
|
62.40%
|
Full-time
equivalent employees
|
|
624
|
|
652
|
|
631
|
|
630
|
|
637
|
|
624
|
|
637
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
YIELD ON ASSETS /
COST OF FUNDS
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Yield on
loans
|
|
5.06%
|
|
5.18%
|
|
5.21%
|
|
5.08%
|
|
4.91%
|
|
5.15%
|
|
4.99%
|
Yield on
securities
|
|
2.99%
|
|
2.85%
|
|
2.82%
|
|
2.80%
|
|
2.70%
|
|
2.89%
|
|
2.65%
|
Yield on other
interest-earning assets
|
|
2.15%
|
|
2.38%
|
|
2.40%
|
|
2.20%
|
|
1.98%
|
|
2.32%
|
|
1.73%
|
Yield on total
earning assets
|
|
4.73%
|
|
4.85%
|
|
4.89%
|
|
4.80%
|
|
4.60%
|
|
4.82%
|
|
4.63%
|
Yield on total
assets
|
|
4.42%
|
|
4.53%
|
|
4.56%
|
|
4.46%
|
|
4.28%
|
|
4.50%
|
|
4.31%
|
Cost of
deposits
|
|
0.83%
|
|
0.85%
|
|
0.77%
|
|
0.63%
|
|
0.56%
|
|
0.82%
|
|
0.53%
|
Cost of
borrowed funds
|
|
2.35%
|
|
2.40%
|
|
2.43%
|
|
2.22%
|
|
2.14%
|
|
2.39%
|
|
2.00%
|
Cost of
interest-bearing liabilities
|
|
1.52%
|
|
1.55%
|
|
1.47%
|
|
1.26%
|
|
1.11%
|
|
1.52%
|
|
1.02%
|
Cost of funds
(total earning assets)
|
|
1.02%
|
|
1.06%
|
|
1.01%
|
|
0.82%
|
|
0.73%
|
|
1.03%
|
|
0.68%
|
Cost of funds
(total assets)
|
|
0.95%
|
|
0.99%
|
|
0.94%
|
|
0.76%
|
|
0.68%
|
|
0.96%
|
|
0.64%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
PURCHASE
ACCOUNTING ADJUSTMENTS
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Loan portfolio
- increase interest income
|
$
|
327
|
|
569
|
|
211
|
|
603
|
|
386
|
|
1,107
|
|
3,434
|
Trust
preferred - increase interest expense
|
$
|
171
|
|
171
|
|
171
|
|
171
|
|
171
|
|
513
|
|
513
|
Core deposit
intangible - increase overhead
|
$
|
397
|
|
450
|
|
477
|
|
477
|
|
477
|
|
1,324
|
|
1,563
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
MORTGAGE BANKING
ACTIVITY
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total mortgage
loans originated
|
$
|
132,852
|
|
80,205
|
|
44,932
|
|
44,448
|
|
66,829
|
|
257,989
|
|
169,798
|
Purchase
mortgage loans originated
|
$
|
61,839
|
|
41,986
|
|
29,891
|
|
29,729
|
|
47,704
|
|
133,716
|
|
114,080
|
Refinance
mortgage loans originated
|
$
|
71,013
|
|
38,219
|
|
15,041
|
|
14,719
|
|
19,125
|
|
124,273
|
|
55,718
|
Total mortgage
loans sold
|
$
|
104,890
|
|
49,396
|
|
21,502
|
|
21,805
|
|
30,713
|
|
175,788
|
|
74,640
|
Net gain on
sale of mortgage loans
|
$
|
2,886
|
|
1,419
|
|
698
|
|
829
|
|
1,116
|
|
5,003
|
|
2,696
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
CAPITAL
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Tangible
equity to tangible assets
|
|
9.67%
|
|
9.82%
|
|
9.41%
|
|
9.68%
|
|
9.98%
|
|
9.67%
|
|
9.98%
|
Tier 1
leverage capital ratio
|
|
11.08%
|
|
11.17%
|
|
11.16%
|
|
11.41%
|
|
11.76%
|
|
11.08%
|
|
11.76%
|
Common equity
risk-based capital ratio
|
|
10.54%
|
|
10.47%
|
|
10.46%
|
|
10.41%
|
|
10.93%
|
|
10.54%
|
|
10.93%
|
Tier 1
risk-based capital ratio
|
|
11.88%
|
|
11.82%
|
|
11.84%
|
|
11.80%
|
|
12.35%
|
|
11.88%
|
|
12.35%
|
Total
risk-based capital ratio
|
|
12.61%
|
|
12.55%
|
|
12.56%
|
|
12.50%
|
|
13.05%
|
|
12.61%
|
|
13.05%
|
Tier 1
capital
|
$
|
395,010
|
|
388,788
|
|
379,334
|
|
373,721
|
|
382,829
|
|
395,010
|
|
382,829
|
Tier 1 plus
tier 2 capital
|
$
|
419,424
|
|
412,841
|
|
402,469
|
|
396,102
|
|
404,521
|
|
419,424
|
|
404,521
|
Total
risk-weighted assets
|
$
|
3,325,217
|
|
3,289,958
|
|
3,204,295
|
|
3,167,655
|
|
3,100,158
|
|
3,325,217
|
|
3,100,158
|
Book value per
common share
|
$
|
24.93
|
|
24.34
|
|
23.37
|
|
22.70
|
|
22.84
|
|
24.93
|
|
22.84
|
Tangible book
value per common share
|
$
|
21.64
|
|
21.05
|
|
20.05
|
|
19.37
|
|
19.50
|
|
21.64
|
|
19.50
|
Cash dividend
per common share
|
$
|
0.27
|
|
0.26
|
|
0.26
|
|
1.00
|
|
0.24
|
|
0.79
|
|
0.68
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
ASSET
QUALITY
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gross loan
charge-offs
|
$
|
519
|
|
78
|
|
174
|
|
354
|
|
169
|
|
771
|
|
1,096
|
Recoveries
|
$
|
180
|
|
96
|
|
79
|
|
1,042
|
|
294
|
|
355
|
|
2,187
|
Net loan
charge-offs (recoveries)
|
$
|
339
|
|
(18)
|
|
95
|
|
(688)
|
|
(125)
|
|
416
|
|
(1,091)
|
Net loan
charge-offs to average loans
|
|
0.05%
|
|
(0.01%)
|
|
0.01%
|
|
(0.10%)
|
|
(0.02%)
|
|
0.02%
|
|
(0.06%)
|
Allowance for
loan losses
|
$
|
24,414
|
|
24,053
|
|
23,135
|
|
22,380
|
|
21,692
|
|
24,414
|
|
21,692
|
Allowance to
originated loans
|
|
0.88%
|
|
0.89%
|
|
0.89%
|
|
0.88%
|
|
0.88%
|
|
0.88%
|
|
0.88%
|
Nonperforming
loans
|
$
|
2,644
|
|
3,505
|
|
4,138
|
|
4,141
|
|
4,852
|
|
2,644
|
|
4,852
|
Other real
estate/repossessed assets
|
$
|
243
|
|
446
|
|
396
|
|
811
|
|
948
|
|
243
|
|
948
|
Nonperforming
loans to total loans
|
|
0.09%
|
|
0.12%
|
|
0.15%
|
|
0.15%
|
|
0.18%
|
|
0.09%
|
|
0.18%
|
Nonperforming
assets to total assets
|
|
0.08%
|
|
0.11%
|
|
0.13%
|
|
0.15%
|
|
0.18%
|
|
0.08%
|
|
0.18%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
NONPERFORMING
ASSETS - COMPOSITION
|
|
|
|
|
|
|
|
|
|
|
|
|
Residential
real estate:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Land development
|
$
|
32
|
|
33
|
|
45
|
|
0
|
|
0
|
|
32
|
|
0
|
Construction
|
$
|
0
|
|
0
|
|
0
|
|
0
|
|
0
|
|
0
|
|
0
|
Owner occupied / rental
|
$
|
2,576
|
|
3,225
|
|
3,404
|
|
3,555
|
|
3,908
|
|
2,576
|
|
3,908
|
Commercial
real estate:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Land development
|
$
|
0
|
|
0
|
|
0
|
|
0
|
|
0
|
|
0
|
|
0
|
Construction
|
$
|
0
|
|
0
|
|
0
|
|
0
|
|
0
|
|
0
|
|
0
|
Owner occupied
|
$
|
240
|
|
642
|
|
791
|
|
1,363
|
|
1,543
|
|
240
|
|
1,543
|
Non-owner occupied
|
$
|
26
|
|
26
|
|
62
|
|
0
|
|
0
|
|
26
|
|
0
|
Non-real
estate:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Commercial assets
|
$
|
0
|
|
2
|
|
207
|
|
17
|
|
331
|
|
0
|
|
331
|
Consumer assets
|
$
|
13
|
|
23
|
|
25
|
|
17
|
|
18
|
|
13
|
|
18
|
Total
nonperforming assets
|
|
2,887
|
|
3,951
|
|
4,534
|
|
4,952
|
|
5,800
|
|
2,887
|
|
5,800
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
NONPERFORMING
ASSETS - RECON
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Beginning
balance
|
$
|
3,951
|
|
4,534
|
|
4,952
|
|
5,800
|
|
5,807
|
|
4,952
|
|
9,403
|
Additions -
originated loans/former branch
|
$
|
339
|
|
26
|
|
539
|
|
1,247
|
|
999
|
|
904
|
|
2,725
|
Merger-related
activity
|
$
|
57
|
|
34
|
|
0
|
|
0
|
|
5
|
|
91
|
|
51
|
Return to
performing status
|
$
|
(126)
|
|
0
|
|
0
|
|
0
|
|
0
|
|
(126)
|
|
(175)
|
Principal
payments
|
$
|
(1,014)
|
|
(512)
|
|
(382)
|
|
(1,836)
|
|
(857)
|
|
(1,908)
|
|
(3,192)
|
Sale
proceeds
|
$
|
(253)
|
|
(74)
|
|
(429)
|
|
(128)
|
|
(147)
|
|
(756)
|
|
(2,253)
|
Loan
charge-offs
|
$
|
(59)
|
|
(36)
|
|
(146)
|
|
(57)
|
|
(3)
|
|
(241)
|
|
(650)
|
Valuation
write-downs
|
$
|
(8)
|
|
(21)
|
|
0
|
|
(74)
|
|
(4)
|
|
(29)
|
|
(109)
|
Ending
balance
|
$
|
2,887
|
|
3,951
|
|
4,534
|
|
4,952
|
|
5,800
|
|
2,887
|
|
5,800
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
LOAN PORTFOLIO
COMPOSITION
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Commercial:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Commercial & industrial
|
$
|
882,747
|
|
881,196
|
|
839,207
|
|
822,723
|
|
818,113
|
|
882,747
|
|
818,113
|
Land development & construction
|
$
|
48,418
|
|
45,158
|
|
45,892
|
|
44,885
|
|
39,396
|
|
48,418
|
|
39,396
|
Owner occupied comm'l R/E
|
$
|
567,267
|
|
556,868
|
|
551,517
|
|
548,619
|
|
542,730
|
|
567,267
|
|
542,730
|
Non-owner occupied comm'l R/E
|
$
|
883,079
|
|
852,844
|
|
835,679
|
|
816,282
|
|
811,767
|
|
883,079
|
|
811,767
|
Multi-family & residential rental
|
$
|
126,855
|
|
128,489
|
|
127,903
|
|
127,597
|
|
94,101
|
|
126,855
|
|
94,101
|
Total
commercial
|
$
|
2,508,366
|
|
2,464,555
|
|
2,400,198
|
|
2,360,106
|
|
2,306,107
|
|
2,508,366
|
|
2,306,107
|
Retail:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1-4 family mortgages
|
$
|
346,095
|
|
335,618
|
|
316,315
|
|
307,540
|
|
301,765
|
|
346,095
|
|
301,765
|
Home equity & other
consumer
|
$
|
78,552
|
|
81,320
|
|
83,126
|
|
85,439
|
|
89,545
|
|
78,552
|
|
89,545
|
Total
retail
|
$
|
424,647
|
|
416,938
|
|
399,441
|
|
392,979
|
|
391,310
|
|
424,647
|
|
391,310
|
Total loans
|
$
|
2,933,013
|
|
2,881,493
|
|
2,799,639
|
|
2,753,085
|
|
2,697,417
|
|
2,933,013
|
|
2,697,417
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
END OF PERIOD
BALANCES
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Loans
|
$
|
2,933,013
|
|
2,881,493
|
|
2,799,639
|
|
2,753,085
|
|
2,697,417
|
|
2,933,013
|
|
2,697,417
|
Securities
|
$
|
363,535
|
|
365,926
|
|
355,878
|
|
353,388
|
|
337,603
|
|
363,535
|
|
337,603
|
Other
interest-earning assets
|
$
|
144,263
|
|
92,750
|
|
168,572
|
|
10,482
|
|
28,193
|
|
144,263
|
|
28,193
|
Total earning
assets (before allowance)
|
$
|
3,440,811
|
|
3,340,169
|
|
3,324,089
|
|
3,116,955
|
|
3,063,213
|
|
3,440,811
|
|
3,063,213
|
Total
assets
|
$
|
3,710,380
|
|
3,576,139
|
|
3,551,754
|
|
3,363,907
|
|
3,300,106
|
|
3,710,380
|
|
3,300,106
|
Noninterest-bearing deposits
|
$
|
967,189
|
|
918,581
|
|
857,734
|
|
889,784
|
|
879,442
|
|
967,189
|
|
879,442
|
Interest-bearing deposits
|
$
|
1,799,902
|
|
1,700,628
|
|
1,753,240
|
|
1,573,924
|
|
1,629,368
|
|
1,799,902
|
|
1,629,368
|
Total
deposits
|
$
|
2,767,091
|
|
2,619,209
|
|
2,610,974
|
|
2,463,708
|
|
2,508,810
|
|
2,767,091
|
|
2,508,810
|
Total
borrowed funds
|
$
|
517,523
|
|
543,098
|
|
544,566
|
|
513,220
|
|
401,575
|
|
517,523
|
|
401,575
|
Total
interest-bearing liabilities
|
$
|
2,317,425
|
|
2,243,726
|
|
2,297,806
|
|
2,087,144
|
|
2,030,943
|
|
2,317,425
|
|
2,030,943
|
Shareholders'
equity
|
$
|
407,200
|
|
400,117
|
|
383,729
|
|
375,249
|
|
379,465
|
|
407,200
|
|
379,465
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
AVERAGE
BALANCES
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Loans
|
$
|
2,903,161
|
|
2,848,343
|
|
2,787,430
|
|
2,706,617
|
|
2,658,092
|
|
2,846,735
|
|
2,602,718
|
Securities
|
$
|
363,394
|
|
357,718
|
|
354,459
|
|
343,597
|
|
342,593
|
|
358,557
|
|
343,983
|
Other
interest-earning assets
|
$
|
118,314
|
|
94,616
|
|
67,915
|
|
30,564
|
|
61,810
|
|
93,800
|
|
82,700
|
Total earning
assets (before allowance)
|
$
|
3,384,869
|
|
3,300,677
|
|
3,209,804
|
|
3,080,778
|
|
3,062,495
|
|
3,299,092
|
|
3,029,401
|
Total
assets
|
$
|
3,622,168
|
|
3,529,598
|
|
3,441,774
|
|
3,312,648
|
|
3,295,129
|
|
3,531,841
|
|
3,259,153
|
Noninterest-bearing deposits
|
$
|
930,851
|
|
875,645
|
|
852,247
|
|
905,065
|
|
893,181
|
|
886,536
|
|
849,337
|
Interest-bearing deposits
|
$
|
1,741,563
|
|
1,719,433
|
|
1,668,563
|
|
1,579,632
|
|
1,628,346
|
|
1,710,120
|
|
1,651,186
|
Total
deposits
|
$
|
2,672,414
|
|
2,595,078
|
|
2,520,810
|
|
2,484,697
|
|
2,521,527
|
|
2,596,656
|
|
2,500,523
|
Total borrowed
funds
|
$
|
529,590
|
|
530,802
|
|
532,864
|
|
434,365
|
|
383,830
|
|
531,073
|
|
375,307
|
Total
interest-bearing liabilities
|
$
|
2,271,153
|
|
2,250,235
|
|
2,201,427
|
|
2,013,997
|
|
2,012,176
|
|
2,241,193
|
|
2,026,493
|
Shareholders'
equity
|
$
|
403,350
|
|
389,133
|
|
376,103
|
|
370,175
|
|
377,574
|
|
389,628
|
|
371,005
|
View original
content:http://www.prnewswire.com/news-releases/mercantile-bank-corporation-reports-strong-third-quarter-2019-results-300937992.html
SOURCE Mercantile Bank Corporation