GRAND RAPIDS, Mich.,
April 21, 2020 /PRNewswire/ --
Mercantile Bank Corporation (NASDAQ: MBWM) ("Mercantile") reported
net income of $10.7 million, or
$0.65 per diluted share, for the
first quarter of 2020, compared with net income of $11.8 million, or $0.72 per diluted share, for the respective
prior-year period. Proceeds from a bank owned life insurance
claim and a gain on the sale of a former branch facility increased
net income in the prior-year period by $1.8
million, or $0.11 per diluted
share. Excluding the impacts of these transactions, diluted
earnings per share increased $0.04,
or approximately 7 percent, during the current-year first quarter
compared to the prior-year first quarter.
"We are very pleased with our first quarter 2020 financial
performance, which depicts the ongoing success of certain strategic
initiatives," said Robert B. Kaminski,
Jr., President and Chief Executive Officer of
Mercantile. "Our robust financial results reflect solid
growth in the commercial loan portfolio, increased fee income,
managed overhead costs, and sound asset quality."
First quarter highlights include:
- Robust earnings and capital position
- Solid growth in key fee income categories
- Controlled overhead costs
- Strong asset quality
- Annualized net commercial loan growth of approximately 5
percent
- Residential mortgage loan originations up nearly 200 percent
compared to the respective 2019 period
- Continued strength in commercial loan and residential loan
pipelines
Operating Results
Total revenue, which consists of net interest income and
noninterest income, was $36.9 million
during the first quarter of 2020, compared to $37.3 million during the prior-year first
quarter. Net interest income during the first quarter of 2020
was $30.3 million, down
$0.3 million, or 1.1 percent,
from the first quarter of 2019, reflecting a decreased net interest
margin, which more than offset the positive impact of earning asset
growth.
The net interest margin was 3.63 percent in the first quarter of
2020, compared to 3.88 percent in the first quarter of 2019.
The yield on average earning assets was 4.54 percent during the
first quarter of 2020, down from 4.89 percent during the prior-year
first quarter primarily due to a decreased yield on commercial
loans, which equaled 4.76 percent in the current-year first quarter
compared to 5.32 percent in the respective 2019 period. The
decreased yield on commercial loans primarily reflected reduced
interest rates on variable-rate commercial loans resulting from the
Federal Open Market Committee significantly lowering the targeted
federal funds rate by 225 basis points during the second half of
2019 and first three months of 2020.
The negative impact of the decreased yield on commercial loans
on the yield on average earning assets was partially mitigated by
an improved yield on securities, which equaled 4.73 percent and
2.82 percent during the first quarters of 2020 and 2019,
respectively. The increased yield on securities mainly
reflected the recording of $1.8
million in accelerated discount accretion on called U.S.
Government agency bonds as interest income during the first three
months of 2020. No accelerated discount accretion was
recorded during the first three months of 2019. The
accelerated discount accretion recorded during the first quarter of
2020 positively impacted the net interest margin by 22 basis
points. As part of Mercantile's interest rate risk management
program, U.S. Government agency bonds are periodically purchased at
discounts during rising interest rate environments; if these bonds
are called during decreasing interest rate environments, the
remaining unaccreted discount amounts are immediately recognized as
interest income. The cost of funds declined from 1.01 percent
during the first quarter of 2019 to 0.91 percent during the
current-year first quarter primarily due to lower rates paid on
deposit accounts, reflecting the declining interest rate
environment.
Mercantile recorded provision expense of $0.8 million and $0.9
million during the first quarters of 2020 and 2019,
respectively. The provision expense recorded during the first
quarter of 2020 was primarily comprised of an increased allocation
related to the economic conditions environmental factor; in
addition, the provision expense also reflected ongoing net loan
growth. The provision expense recorded during the first three
months of 2019 mainly reflected ongoing net loan growth.
Noninterest income was $6.6
million during both the first quarter of 2020 and the
prior-year first quarter. Noninterest income during the first
quarter of 2019 included a bank owned life insurance claim of
$1.3 million and a gain on the sale
of a former branch facility of $0.6
million. Excluding the impacts of these transactions,
noninterest income increased $1.8
million, or 38.1 percent, during the current-year first
quarter compared to the respective 2019 period. The improved
level of noninterest income primarily reflected increased mortgage
banking activity income stemming from the ongoing success of
strategic initiatives that were designed to increase market
presence and a decrease in residential mortgage loan interest
rates, which spurred a significant increase in refinance
activity. Increased service charges on accounts, payroll
processing fees, and credit and debit card income also contributed
to the higher level of noninterest income.
Noninterest expense totaled $22.9
million during the first quarter of 2020, up $1.1 million, or 5.1 percent, from the prior-year
first quarter. The higher level of expense primarily resulted
from increased salary costs, mainly reflecting higher residential
mortgage loan originator commissions and employee merit pay
increases. In addition, higher occupancy and furniture costs,
mainly reflecting increased depreciation expense associated with an
expansion of Mercantile's main office, and data processing costs,
primarily depicting growth in transaction volume and new product
offerings, contributed to the increased level of noninterest
expense.
Mr. Kaminski commented, "We are pleased to once again report
increases in key noninterest income revenue streams, and we remain
focused on meeting growth objectives in a cost conscious
manner. The noteworthy increase in mortgage banking activity
income reflects a substantial increase in refinance activity
stemming from the decline in residential mortgage loan interest
rates, an increase in the percentage of originated loans being
sold, and the continuing success of various initiatives that were
implemented to increase market share, including the hiring of
proven mortgage loan originators in our markets."
Balance Sheet
As of March 31, 2020, total assets
were $3.66 billion, up $24.5 million, or 0.7 percent, from December 31, 2019. Total loans increased
$44.9 million, or 1.6 percent, during
the first three months of 2020, and $102
million, or 3.6 percent, during the twelve months ended
March 31, 2020. As of
March 31, 2020, unfunded commitments
on commercial construction and development loans totaled
approximately $77 million, which are
expected to be largely funded over the next 12 to 18
months.
Ray Reitsma, President of
Mercantile Bank of Michigan,
noted, "We are pleased with the net commercial loan growth achieved
during the first three months of 2020, and we remain committed to
growing the portfolio in a disciplined manner with a continuing
emphasis on sound underwriting and risk-based pricing. Based
on our current loan pipeline, we believe we will fund additional
commercial loans in future periods. While we continue to
devote resources to identify and attract new client relationships
and meet the typical credit needs of our existing customers, much
of our attention has now been diverted to help customers work
through the challenges they are confronted with as a result of the
COVID-19 pandemic. In addition to implementing commercial
loan and retail loan payment deferral programs, we are actively
participating in the Small Business Administration's Paycheck
Protection Program."
As of March 31, 2020, commercial
and industrial loans and owner-occupied commercial real estate
loans combined represented approximately 59 percent of total
commercial loans, a level that has remained relatively consistent
and in line with internal expectations.
Total deposits at March 31, 2020
were $2.65 billion, down $45.0 million, or 1.7 percent, from December 31, 2019. Brokered deposits and
local deposits were down $32.5
million and $12.5 million,
respectively, during the first three months of 2020. The
decline in local deposits in large part reflects the maturity of
certain certificates of deposit that were not renewed during the
first quarter of 2020. Mercantile did not aggressively seek
to renew these certificates of deposit, which were opened as part
of a special time deposit campaign that was introduced mid-first
quarter 2019 and ended in early April
2019, due to its excess liquidity position. Wholesale
funds were $495 million, or
approximately 16 percent of total funds, as of March 31, 2020, compared to $487 million, or approximately 15 percent of
total funds, as of December 31,
2019.
Asset Quality
Nonperforming assets at March 31,
2020, were $3.7 million, or
0.1 percent of total assets, compared to $2.7 million, or 0.1 percent of total assets, at
December 31, 2019, and $4.5 million, or 0.1 percent of total assets, at
March 31, 2019. 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 first three months of 2020.
During the first quarter of 2020, loan charge-offs were nominal,
while recoveries of prior period loan charge-offs equaled
$0.2 million, providing for net loan
recoveries of nearly $0.2 million, or
an annualized 0.03 percent of average total loans.
Capital Position
Shareholders' equity totaled $418
million as of March 31, 2020,
an increase of $1.8 million from
year-end 2019. The Bank's capital position remains above
"well-capitalized" with a total risk-based capital ratio of 12.9
percent as of March 31, 2020,
compared to 13.0 percent at December
31, 2019. At March 31,
2020, the Bank had approximately $94
million in excess of the 10.0 percent minimum regulatory
threshold required to be considered a "well-capitalized"
institution. Mercantile reported 16,205,207 total shares
outstanding at March 31, 2020.
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
222,000 shares for $6.3 million, or a
weighted average all-in cost per share of $28.25, during the first quarter of 2020.
During the period of January 2015
through March 2020, Mercantile
repurchased approximately 1,612,000 shares for $38.9 million, or a weighted average all-in cost
per share of $24.13, under the
original and new programs on a combined basis. Mercantile has
elected to curtail stock repurchases to preserve capital for
lending and other purposes while management assesses the potential
impacts of the COVID-19 pandemic. Management has the ability
to reinstate the buyback program as circumstances warrant.
Mr. Kaminski concluded, "The COVID-19 pandemic has presented the
world with some great challenges. Our pandemic response plan,
which is designed to accommodate evolving information and guidance
provided by government agencies and health officials, focuses on
protecting our employees and customers and doing our part to help
stop the spread of the virus. In addition, the plan includes
flexibility to ensure we are able to satisfactorily meet our
customers' banking needs. We entered this period of
uncertainty from a position of financial strength, including a
strong capital position, sound asset quality, and sufficient
liquidity. These sources of financial strength and our
commitment to community have allowed us to offer loan payment
deferrals to many commercial and retail customers and to
participate in the Small Business Administration's Paycheck
Protection Program."
Investor Presentation
Mercantile has prepared presentation materials (the "Investor
Presentation") that management intends to use during its previously
announced First Quarter 2020 conference call on Tuesday, April 21, 2020 at 10:00 Eastern Time, and from time to time
thereafter in presentations about the Company's operations and
performance. The Investor Presentation also contains more
detailed information relating to Mercantile's COVID-19 pandemic
response plan. These materials have been furnished to the
U.S. Securities and Exchange Commission concurrently with this
press release, and are also available on Mercantile's website at
www.mercbank.com.
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 $3.6 billion and
operates 40 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 may
constitute forward-looking statements within the meaning of the
Private Securities Litigation Reform Act of 1995. Any such
comments 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, including the significant disruption to financial market
and other economic activity caused by the outbreak of COVID-19; 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 and
CEO
|
Executive Vice
President and CFO
|
616-726-1502
|
616-726-1202
|
rkaminski@mercbank.com
|
cchristmas@mercbank.com
|
Mercantile Bank
Corporation
|
|
|
|
|
|
|
First Quarter 2020
Results
|
|
|
|
|
|
|
|
|
|
|
|
|
|
MERCANTILE BANK
CORPORATION
|
CONSOLIDATED BALANCE
SHEETS
|
(Unaudited)
|
|
|
|
|
|
|
|
|
|
MARCH 31,
|
|
DECEMBER
31,
|
|
MARCH 31,
|
|
|
2020
|
|
2019
|
|
2019
|
|
|
|
|
|
|
|
ASSETS
|
|
|
|
|
|
|
Cash and
due from banks
|
$
|
49,781,000
|
$
|
53,262,000
|
$
|
46,322,000
|
Interest-earning deposits
|
|
186,938,000
|
|
180,469,000
|
|
168,572,000
|
Total cash and cash
equivalents
|
|
236,719,000
|
|
233,731,000
|
|
214,894,000
|
|
|
|
|
|
|
|
Securities available for sale
|
|
312,147,000
|
|
334,655,000
|
|
337,876,000
|
Federal
Home Loan Bank stock
|
|
18,002,000
|
|
18,002,000
|
|
18,002,000
|
|
|
|
|
|
|
|
Loans
|
|
2,901,543,000
|
|
2,856,667,000
|
|
2,799,639,000
|
Allowance for loan losses
|
|
(24,828,000)
|
|
(23,889,000)
|
|
(23,135,000)
|
Loans, net
|
|
2,876,715,000
|
|
2,832,778,000
|
|
2,776,504,000
|
|
|
|
|
|
|
|
Premises
and equipment, net
|
|
59,143,000
|
|
57,327,000
|
|
50,109,000
|
Bank
owned life insurance
|
|
70,613,000
|
|
70,297,000
|
|
69,789,000
|
Goodwill
|
|
49,473,000
|
|
49,473,000
|
|
49,473,000
|
Core
deposit intangible, net
|
|
3,443,000
|
|
3,840,000
|
|
5,084,000
|
Other
assets
|
|
31,132,000
|
|
32,812,000
|
|
30,023,000
|
|
|
|
|
|
|
|
Total
assets
|
$
|
3,657,387,000
|
$
|
3,632,915,000
|
$
|
3,551,754,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
LIABILITIES AND
SHAREHOLDERS' EQUITY
|
|
|
|
|
|
|
Deposits:
|
|
|
|
|
|
|
Noninterest-bearing
|
$
|
956,290,000
|
$
|
924,916,000
|
$
|
857,734,000
|
Interest-bearing
|
|
1,689,126,000
|
|
1,765,468,000
|
|
1,753,240,000
|
Total deposits
|
|
2,645,416,000
|
|
2,690,384,000
|
|
2,610,974,000
|
|
|
|
|
|
|
|
Securities sold under agreements to repurchase
|
|
133,270,000
|
|
102,675,000
|
|
111,235,000
|
Federal
Home Loan Bank advances
|
|
394,000,000
|
|
354,000,000
|
|
384,000,000
|
Subordinated debentures
|
|
47,051,000
|
|
46,881,000
|
|
46,369,000
|
Accrued
interest and other liabilities
|
|
19,261,000
|
|
22,414,000
|
|
15,447,000
|
Total liabilities
|
|
3,238,998,000
|
|
3,216,354,000
|
|
3,168,025,000
|
|
|
|
|
|
|
|
SHAREHOLDERS'
EQUITY
|
|
|
|
|
|
|
Common
stock
|
|
299,584,000
|
|
305,035,000
|
|
305,346,000
|
Retained
earnings
|
|
114,012,000
|
|
107,831,000
|
|
83,107,000
|
Accumulated other comprehensive income/(loss)
|
|
4,793,000
|
|
3,695,000
|
|
(4,724,000)
|
Total shareholders'
equity
|
|
418,389,000
|
|
416,561,000
|
|
383,729,000
|
|
|
|
|
|
|
|
Total liabilities and
shareholders' equity
|
$
|
3,657,387,000
|
$
|
3,632,915,000
|
$
|
3,551,754,000
|
Mercantile Bank
Corporation
|
|
|
|
|
|
|
|
|
First Quarter 2020
Results
|
|
|
|
|
|
|
|
|
MERCANTILE BANK
CORPORATION
|
CONSOLIDATED REPORTS
OF INCOME
|
(Unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
THREE MONTHS
ENDED
|
|
THREE MONTHS
ENDED
|
|
|
March 31,
2020
|
|
March 31,
2019
|
|
|
|
|
|
|
|
|
|
INTEREST
INCOME
|
|
|
|
|
|
|
|
|
Loans,
including fees
|
|
$
|
33,442,000
|
|
|
$
|
35,789,000
|
|
Investment securities
|
|
|
4,017,000
|
|
|
|
2,441,000
|
|
Other
interest-earning assets
|
|
|
475,000
|
|
|
|
407,000
|
|
Total interest
income
|
|
|
37,934,000
|
|
|
|
38,637,000
|
|
|
|
|
|
|
|
|
|
|
INTEREST
EXPENSE
|
|
|
|
|
|
|
|
|
Deposits
|
|
|
4,641,000
|
|
|
|
4,804,000
|
|
Short-term borrowings
|
|
|
40,000
|
|
|
|
104,000
|
|
Federal
Home Loan Bank advances
|
|
|
2,212,000
|
|
|
|
2,234,000
|
|
Other
borrowed money
|
|
|
724,000
|
|
|
|
850,000
|
|
Total interest
expense
|
|
|
7,617,000
|
|
|
|
7,992,000
|
|
|
|
|
|
|
|
|
|
|
Net interest
income
|
|
|
30,317,000
|
|
|
|
30,645,000
|
|
|
|
|
|
|
|
|
|
|
Provision for loan
losses
|
|
|
750,000
|
|
|
|
850,000
|
|
|
|
|
|
|
|
|
|
|
Net interest income
after
|
|
|
|
|
|
|
|
|
provision for loan losses
|
|
|
29,567,000
|
|
|
|
29,795,000
|
|
|
|
|
|
|
|
|
|
|
NONINTEREST
INCOME
|
|
|
|
|
|
|
|
|
Service
charges on accounts
|
|
|
1,222,000
|
|
|
|
1,077,000
|
|
Credit
and debit card income
|
|
|
1,361,000
|
|
|
|
1,337,000
|
|
Mortgage
banking income
|
|
|
2,627,000
|
|
|
|
1,057,000
|
|
Payroll
services
|
|
|
577,000
|
|
|
|
505,000
|
|
Earnings
on bank owned life insurance
|
|
|
336,000
|
|
|
|
1,630,000
|
|
Other
income
|
|
|
427,000
|
|
|
|
1,026,000
|
|
Total noninterest
income
|
|
|
6,550,000
|
|
|
|
6,632,000
|
|
|
|
|
|
|
|
|
|
|
NONINTEREST
EXPENSE
|
|
|
|
|
|
|
|
|
Salaries
and benefits
|
|
|
13,528,000
|
|
|
|
13,015,000
|
|
Occupancy
|
|
|
2,059,000
|
|
|
|
1,762,000
|
|
Furniture and equipment
|
|
|
778,000
|
|
|
|
635,000
|
|
Data
processing costs
|
|
|
2,483,000
|
|
|
|
2,216,000
|
|
Other
expense
|
|
|
4,092,000
|
|
|
|
4,202,000
|
|
Total noninterest
expense
|
|
|
22,940,000
|
|
|
|
21,830,000
|
|
|
|
|
|
|
|
|
|
|
Income before
federal income
|
|
|
|
|
|
|
|
|
tax expense
|
|
|
13,177,000
|
|
|
|
14,597,000
|
|
|
|
|
|
|
|
|
|
|
Federal income tax
expense
|
|
|
2,504,000
|
|
|
|
2,773,000
|
|
|
|
|
|
|
|
|
|
|
Net
Income
|
|
$
|
10,673,000
|
|
|
$
|
11,824,000
|
|
|
|
|
|
|
|
|
|
|
Basic
earnings per share
|
|
|
$0.65
|
|
|
|
$0.72
|
|
Diluted
earnings per share
|
|
|
$0.65
|
|
|
|
$0.72
|
|
|
|
|
|
|
|
|
|
|
Average
basic shares outstanding
|
|
|
16,350,281
|
|
|
|
16,429,571
|
|
Average
diluted shares outstanding
|
|
|
16,351,559
|
|
|
|
16,435,176
|
|
Mercantile Bank
Corporation
|
|
|
|
|
|
|
|
|
|
|
|
First Quarter 2020
Results
|
|
|
|
|
|
|
|
|
|
|
|
MERCANTILE BANK
CORPORATION
|
CONSOLIDATED
FINANCIAL HIGHLIGHTS
|
(Unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Quarterly
|
|
(dollars in
thousands except per share data)
|
|
2020
|
|
2019
|
|
2019
|
|
2019
|
|
2019
|
|
|
|
1st
Qtr
|
|
4th
Qtr
|
|
3rd
Qtr
|
|
2nd
Qtr
|
|
1st
Qtr
|
|
EARNINGS
|
|
|
|
|
|
|
|
|
|
|
|
Net
interest income
|
$
|
30,317
|
|
31,168
|
|
31,605
|
|
31,116
|
|
30,645
|
|
Provision for loan losses
|
$
|
750
|
|
(700)
|
|
700
|
|
900
|
|
850
|
|
Noninterest income
|
$
|
6,550
|
|
7,312
|
|
6,676
|
|
6,334
|
|
6,632
|
|
Noninterest expense
|
$
|
22,940
|
|
23,335
|
|
22,027
|
|
22,087
|
|
21,830
|
|
Net
income before federal income
|
|
|
|
|
|
|
|
|
|
|
|
tax expense
|
$
|
13,177
|
|
15,845
|
|
15,554
|
|
14,463
|
|
14,597
|
|
Net
income
|
$
|
10,673
|
|
13,317
|
|
12,600
|
|
11,715
|
|
11,824
|
|
Basic
earnings per share
|
$
|
0.65
|
|
0.81
|
|
0.77
|
|
0.71
|
|
0.72
|
|
Diluted
earnings per share
|
$
|
0.65
|
|
0.81
|
|
0.77
|
|
0.71
|
|
0.72
|
|
Average
basic shares outstanding
|
|
16,350,281
|
|
16,373,458
|
|
16,390,203
|
|
16,428,187
|
|
16,429,571
|
|
Average
diluted shares outstanding
|
|
16,351,559
|
|
16,375,740
|
|
16,393,078
|
|
16,434,714
|
|
16,435,176
|
|
|
|
|
|
|
|
|
|
|
|
|
|
PERFORMANCE
RATIOS
|
|
|
|
|
|
|
|
|
|
|
|
Return
on average assets
|
|
1.19%
|
|
1.45%
|
|
1.38%
|
|
1.33%
|
|
1.39%
|
|
Return
on average equity
|
|
10.20%
|
|
12.87%
|
|
12.39%
|
|
12.08%
|
|
12.75%
|
|
Net
interest margin (fully tax-equivalent)
|
|
3.63%
|
|
3.63%
|
|
3.71%
|
|
3.79%
|
|
3.88%
|
|
Efficiency ratio
|
|
62.22%
|
|
60.64%
|
|
57.54%
|
|
58.98%
|
|
58.56%
|
|
Full-time equivalent employees
|
|
626
|
|
619
|
|
624
|
|
652
|
|
631
|
|
|
|
|
|
|
|
|
|
|
|
|
|
YIELD ON ASSETS /
COST OF FUNDS
|
|
|
|
|
|
|
|
|
|
|
|
Yield on
loans
|
|
4.69%
|
|
5.01%
|
|
5.06%
|
|
5.18%
|
|
5.21%
|
|
Yield on
securities
|
|
4.73%
|
|
2.90%
|
|
2.99%
|
|
2.85%
|
|
2.82%
|
|
Yield on
other interest-earning assets
|
|
1.22%
|
|
1.65%
|
|
2.15%
|
|
2.38%
|
|
2.40%
|
|
Yield on
total earning assets
|
|
4.54%
|
|
4.61%
|
|
4.73%
|
|
4.85%
|
|
4.89%
|
|
Yield on
total assets
|
|
4.23%
|
|
4.31%
|
|
4.42%
|
|
4.53%
|
|
4.56%
|
|
Cost of
deposits
|
|
0.70%
|
|
0.79%
|
|
0.83%
|
|
0.85%
|
|
0.77%
|
|
Cost of
borrowed funds
|
|
2.31%
|
|
2.36%
|
|
2.35%
|
|
2.40%
|
|
2.43%
|
|
Cost of
interest-bearing liabilities
|
|
1.36%
|
|
1.47%
|
|
1.52%
|
|
1.55%
|
|
1.47%
|
|
Cost of
funds (total earning assets)
|
|
0.91%
|
|
0.98%
|
|
1.02%
|
|
1.06%
|
|
1.01%
|
|
Cost of
funds (total assets)
|
|
0.85%
|
|
0.91%
|
|
0.95%
|
|
0.99%
|
|
0.94%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
PURCHASE
ACCOUNTING ADJUSTMENTS
|
|
|
|
|
|
|
|
|
|
|
|
Loan
portfolio - increase interest income
|
$
|
285
|
|
316
|
|
327
|
|
569
|
|
211
|
|
Trust
preferred - increase interest expense
|
$
|
171
|
|
171
|
|
171
|
|
171
|
|
171
|
|
Core
deposit intangible - increase overhead
|
$
|
397
|
|
397
|
|
397
|
|
450
|
|
477
|
|
|
|
|
|
|
|
|
|
|
|
|
|
MORTGAGE BANKING
ACTIVITY
|
|
|
|
|
|
|
|
|
|
|
|
Total
mortgage loans originated
|
$
|
132,859
|
|
110,611
|
|
132,852
|
|
80,205
|
|
44,932
|
|
Purchase
mortgage loans originated
|
$
|
46,538
|
|
49,407
|
|
61,839
|
|
41,986
|
|
29,891
|
|
Refinance mortgage loans originated
|
$
|
86,321
|
|
61,204
|
|
71,013
|
|
38,219
|
|
15,041
|
|
Mortgage
loans originated with intent to sell
|
$
|
95,327
|
|
81,590
|
|
104,890
|
|
49,396
|
|
21,502
|
|
Net gain
on sale of mortgage loans
|
$
|
2,086
|
|
3,062
|
|
2,886
|
|
1,419
|
|
698
|
|
|
|
|
|
|
|
|
|
|
|
|
|
CAPITAL
|
|
|
|
|
|
|
|
|
|
|
|
Tangible
equity to tangible assets
|
|
10.14%
|
|
10.15%
|
|
9.67%
|
|
9.82%
|
|
9.41%
|
|
Tier 1
leverage capital ratio
|
|
11.47%
|
|
11.28%
|
|
11.08%
|
|
11.17%
|
|
11.16%
|
|
Common
equity risk-based capital ratio
|
|
10.92%
|
|
11.00%
|
|
10.53%
|
|
10.47%
|
|
10.46%
|
|
Tier 1
risk-based capital ratio
|
|
12.28%
|
|
12.36%
|
|
11.87%
|
|
11.82%
|
|
11.84%
|
|
Total
risk-based capital ratio
|
|
13.03%
|
|
13.09%
|
|
12.60%
|
|
12.55%
|
|
12.56%
|
|
Tier 1
capital
|
$
|
406,445
|
|
405,148
|
|
395,010
|
|
388,788
|
|
379,334
|
|
Tier 1
plus tier 2 capital
|
$
|
431,273
|
|
429,038
|
|
419,424
|
|
412,841
|
|
402,469
|
|
Total
risk-weighted assets
|
$
|
3,309,336
|
|
3,276,754
|
|
3,327,723
|
|
3,289,958
|
|
3,204,295
|
|
Book
value per common share
|
$
|
25.82
|
|
25.36
|
|
24.93
|
|
24.34
|
|
23.37
|
|
Tangible
book value per common share
|
$
|
22.55
|
|
22.12
|
|
21.64
|
|
21.05
|
|
20.05
|
|
Cash
dividend per common share
|
$
|
0.28
|
|
0.27
|
|
0.27
|
|
0.26
|
|
0.26
|
|
|
|
|
|
|
|
|
|
|
|
|
|
ASSET
QUALITY
|
|
|
|
|
|
|
|
|
|
|
|
Gross
loan charge-offs
|
$
|
40
|
|
112
|
|
519
|
|
78
|
|
174
|
|
Recoveries
|
$
|
229
|
|
287
|
|
180
|
|
96
|
|
79
|
|
Net loan
charge-offs (recoveries)
|
$
|
(189)
|
|
(175)
|
|
339
|
|
(18)
|
|
95
|
|
Net loan
charge-offs (recoveries) to average loans
|
|
(0.03%)
|
|
(0.02%)
|
|
0.05%
|
|
(0.01%)
|
|
0.01%
|
|
Allowance for loan losses
|
$
|
24,828
|
|
23,889
|
|
24,414
|
|
24,053
|
|
23,135
|
|
Allowance to loans
|
|
0.86%
|
|
0.89%
|
|
0.88%
|
|
0.89%
|
|
0.89%
|
|
Nonperforming loans
|
$
|
3,469
|
|
2,284
|
|
2,644
|
|
3,505
|
|
4,138
|
|
Other
real estate/repossessed assets
|
$
|
271
|
|
452
|
|
243
|
|
446
|
|
396
|
|
Nonperforming loans to total loans
|
|
0.12%
|
|
0.08%
|
|
0.09%
|
|
0.12%
|
|
0.15%
|
|
Nonperforming assets to total assets
|
|
0.10%
|
|
0.08%
|
|
0.08%
|
|
0.11%
|
|
0.13%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
NONPERFORMING
ASSETS - COMPOSITION
|
|
|
|
|
|
|
|
|
|
|
|
Residential real estate:
|
|
|
|
|
|
|
|
|
|
|
|
Land
development
|
$
|
37
|
|
34
|
|
32
|
|
33
|
|
45
|
|
Construction
|
$
|
283
|
|
0
|
|
0
|
|
0
|
|
0
|
|
Owner occupied /
rental
|
$
|
2,922
|
|
2,364
|
|
2,576
|
|
3,225
|
|
3,404
|
|
Commercial real estate:
|
|
|
|
|
|
|
|
|
|
|
|
Land
development
|
$
|
43
|
|
0
|
|
0
|
|
0
|
|
0
|
|
Construction
|
$
|
0
|
|
0
|
|
0
|
|
0
|
|
0
|
|
Owner
occupied
|
$
|
287
|
|
326
|
|
240
|
|
642
|
|
791
|
|
Non-owner
occupied
|
$
|
0
|
|
0
|
|
26
|
|
26
|
|
62
|
|
Non-real
estate:
|
|
|
|
|
|
|
|
|
|
|
|
Commercial
assets
|
$
|
156
|
|
0
|
|
0
|
|
2
|
|
207
|
|
Consumer
assets
|
$
|
12
|
|
12
|
|
13
|
|
23
|
|
25
|
|
Total
nonperforming assets
|
$
|
3,740
|
|
2,736
|
|
2,887
|
|
3,951
|
|
4,534
|
|
|
|
|
|
|
|
|
|
|
|
|
|
NONPERFORMING
ASSETS - RECON
|
|
|
|
|
|
|
|
|
|
|
|
Beginning balance
|
$
|
2,736
|
|
2,887
|
|
3,951
|
|
4,534
|
|
4,952
|
|
Additions - originated loans & former bank
facilities
|
$
|
1,344
|
|
30
|
|
339
|
|
26
|
|
539
|
|
Other
activity
|
$
|
(31)
|
|
135
|
|
57
|
|
34
|
|
0
|
|
Return
to performing status
|
$
|
(7)
|
|
0
|
|
(126)
|
|
0
|
|
0
|
|
Principal payments
|
$
|
(110)
|
|
(232)
|
|
(1,014)
|
|
(512)
|
|
(382)
|
|
Sale
proceeds
|
$
|
(192)
|
|
(36)
|
|
(253)
|
|
(74)
|
|
(429)
|
|
Loan
charge-offs
|
$
|
0
|
|
(48)
|
|
(59)
|
|
(36)
|
|
(146)
|
|
Valuation write-downs
|
$
|
0
|
|
0
|
|
(8)
|
|
(21)
|
|
0
|
|
Ending
balance
|
$
|
3,740
|
|
2,736
|
|
2,887
|
|
3,951
|
|
4,534
|
|
|
|
|
|
|
|
|
|
|
|
|
|
LOAN PORTFOLIO
COMPOSITION
|
|
|
|
|
|
|
|
|
|
|
|
Commercial:
|
|
|
|
|
|
|
|
|
|
|
|
Commercial &
industrial
|
$
|
873,679
|
|
846,551
|
|
882,747
|
|
881,196
|
|
839,207
|
|
Land development &
construction
|
$
|
62,908
|
|
56,118
|
|
48,418
|
|
45,158
|
|
45,892
|
|
Owner occupied comm'l
R/E
|
$
|
579,229
|
|
579,004
|
|
567,267
|
|
556,868
|
|
551,517
|
|
Non-owner occupied
comm'l R/E
|
$
|
823,366
|
|
835,345
|
|
883,079
|
|
852,844
|
|
835,679
|
|
Multi-family &
residential rental
|
$
|
133,148
|
|
124,526
|
|
126,855
|
|
128,489
|
|
127,903
|
|
Total commercial
|
$
|
2,472,330
|
|
2,441,544
|
|
2,508,366
|
|
2,464,555
|
|
2,400,198
|
|
Retail:
|
|
|
|
|
|
|
|
|
|
|
|
1-4 family
mortgages
|
$
|
356,338
|
|
339,749
|
|
346,095
|
|
335,618
|
|
316,315
|
|
Home equity &
other consumer
|
$
|
72,875
|
|
75,374
|
|
78,552
|
|
81,320
|
|
83,126
|
|
Total retail
|
$
|
429,213
|
|
415,123
|
|
424,647
|
|
416,938
|
|
399,441
|
|
Total loans
|
$
|
2,901,543
|
|
2,856,667
|
|
2,933,013
|
|
2,881,493
|
|
2,799,639
|
|
|
|
|
|
|
|
|
|
|
|
|
|
END OF PERIOD
BALANCES
|
|
|
|
|
|
|
|
|
|
|
|
Loans
|
$
|
2,901,543
|
|
2,856,667
|
|
2,933,013
|
|
2,881,493
|
|
2,799,639
|
|
Securities
|
$
|
330,149
|
|
352,657
|
|
363,535
|
|
365,926
|
|
355,878
|
|
Other
interest-earning assets
|
$
|
186,938
|
|
180,469
|
|
144,263
|
|
92,750
|
|
168,572
|
|
Total
earning assets (before allowance)
|
$
|
3,418,630
|
|
3,389,793
|
|
3,440,811
|
|
3,340,169
|
|
3,324,089
|
|
Total
assets
|
$
|
3,657,387
|
|
3,632,915
|
|
3,710,380
|
|
3,576,139
|
|
3,551,754
|
|
Noninterest-bearing deposits
|
$
|
956,290
|
|
924,916
|
|
967,189
|
|
918,581
|
|
857,734
|
|
Interest-bearing deposits
|
$
|
1,689,126
|
|
1,765,468
|
|
1,799,902
|
|
1,700,628
|
|
1,753,240
|
|
Total
deposits
|
$
|
2,645,416
|
|
2,690,384
|
|
2,767,091
|
|
2,619,209
|
|
2,610,974
|
|
Total
borrowed funds
|
$
|
576,996
|
|
506,301
|
|
517,523
|
|
543,098
|
|
544,566
|
|
Total
interest-bearing liabilities
|
$
|
2,266,122
|
|
2,271,769
|
|
2,317,425
|
|
2,243,726
|
|
2,297,806
|
|
Shareholders' equity
|
$
|
418,389
|
|
416,561
|
|
407,200
|
|
400,117
|
|
383,729
|
|
|
|
|
|
|
|
|
|
|
|
|
|
AVERAGE
BALANCES
|
|
|
|
|
|
|
|
|
|
|
|
Loans
|
$
|
2,861,047
|
|
2,871,674
|
|
2,903,161
|
|
2,848,343
|
|
2,787,430
|
|
Securities
|
$
|
344,906
|
|
362,347
|
|
363,394
|
|
357,718
|
|
354,459
|
|
Other
interest-earning assets
|
$
|
153,638
|
|
176,034
|
|
118,314
|
|
94,616
|
|
67,915
|
|
Total
earning assets (before allowance)
|
$
|
3,359,591
|
|
3,410,055
|
|
3,384,869
|
|
3,300,677
|
|
3,209,804
|
|
Total
assets
|
$
|
3,602,784
|
|
3,650,087
|
|
3,622,168
|
|
3,529,598
|
|
3,441,774
|
|
Noninterest-bearing deposits
|
$
|
923,827
|
|
948,602
|
|
930,851
|
|
875,645
|
|
852,247
|
|
Interest-bearing deposits
|
$
|
1,724,030
|
|
1,759,377
|
|
1,741,563
|
|
1,719,433
|
|
1,668,563
|
|
Total
deposits
|
$
|
2,647,857
|
|
2,707,979
|
|
2,672,414
|
|
2,595,078
|
|
2,520,810
|
|
Total
borrowed funds
|
$
|
517,961
|
|
509,932
|
|
529,590
|
|
530,802
|
|
532,864
|
|
Total
interest-bearing liabilities
|
$
|
2,241,991
|
|
2,269,309
|
|
2,271,153
|
|
2,250,235
|
|
2,201,427
|
|
Shareholders' equity
|
$
|
419,612
|
|
410,593
|
|
403,350
|
|
389,133
|
|
376,103
|
|
|
|
|
|
|
|
|
|
|
|
|
|
View original
content:http://www.prnewswire.com/news-releases/mercantile-bank-corporation-reports-strong-first-quarter-2020-results-301043708.html
SOURCE Mercantile Bank Corporation