GRAND RAPIDS, Mich.,
April 16, 2019 /PRNewswire/
-- Mercantile Bank Corporation (NASDAQ: MBWM) ("Mercantile")
reported net income of $11.8 million,
or $0.72 per diluted share, for the
first quarter of 2019, compared with net income of $10.9 million, or $0.66 per diluted share, for the respective
prior-year period. A bank owned life insurance claim and a
gain on the sale of a former branch facility during the first
quarter of 2019 increased net income by approximately $1.8 million, or $0.11 per diluted share, while the successful
collection of certain commercial loan relationships during the
prior-year first quarter increased reported net income by
approximately $1.7 million, or
$0.10 per diluted share.
Excluding the impacts of these specific transactions, diluted
earnings per share increased $0.05,
or nearly 9 percent, during the current-year first quarter compared
to the prior-year first quarter.
"We are very pleased to start 2019 with a quarter that depicts
continued strength in core profitability and loan originations,"
said Robert B. Kaminski, Jr.,
President and Chief Executive Officer of Mercantile. "Our
robust financial results reflect a strong net interest margin,
increased fee income, and controlled overhead costs. Based on
our healthy loan pipelines and sound financial condition, we are
confident that our demonstrated solid operating results will
continue in future periods, and we are in a position to take
advantage of future growth opportunities."
First quarter highlights include:
- Strong earnings and capital position
- Robust net interest margin
- Growth in key fee income categories
- Controlled overhead costs
- Sound asset quality, as depicted by low levels of nonperforming
assets and loans in the 30- to 89-days delinquent category
- Annualized net loan growth of nearly 7 percent
- New commercial term loan originations of approximately
$125 million
- Continued strength in commercial and residential loan
pipelines
- Increased regular quarterly cash dividend
Operating Results
Total revenue, which consists of net interest income and
noninterest income, was $37.3 million
during the first quarter of 2019, up $2.7
million, or 7.8 percent, from the prior-year first
quarter. Net interest income during the first quarter of 2019
was $30.6 million, up
$0.4 million, or 1.5 percent,
from the first quarter of 2018, primarily reflecting a higher level
of earning assets.
The net interest margin was 3.88 percent in the first quarter of
2019. The yield on average earning assets equaled 4.89
percent during the first quarter of 2019, up from 4.70 percent
during the prior-year first quarter primarily due to a change in
earning mix and an increased yield on commercial loans, the latter
mainly reflecting the positive impact of higher interest rates on
variable-rate commercial loans stemming from the Federal Open
Market Committee raising the targeted federal funds rate by 25
basis points in each of March, June, September, and December
2018. On average, higher-yielding loans represented 86.8
percent of earning assets during the first quarter of 2019, up from
84.4 percent during the prior-year first quarter, while
lower-yielding interest-earning deposits represented 2.1 percent of
earning assets during the current-year first quarter, down from 4.1
percent during the respective 2018 period. The cost of funds
equaled 1.01 percent during the first quarter of 2019, up from 0.64
percent during the respective 2018 period mainly due to increased
costs of time deposits, borrowed funds, and certain non-time
deposit accounts, and a change in funding mix. Increased reliance
on more costly wholesale funds during the first quarter of 2019 was
necessitated by various funding requirements, including loan growth
and seasonal deposit withdrawals by certain business customers for
bonus and tax payments. The net interest margin of 4.06
percent during the prior-year first quarter benefited from the
successful collection of certain nonperforming commercial loan
relationships that were paid in full, while a higher level of
interest-earning deposits negatively impacted the margin during the
same time period. Excluding the impacts of these factors, the
net interest margin equaled approximately 3.85 percent during the
first quarter of 2018.
Net interest income and the net interest margin during the first
quarter of 2019 and the prior-year first quarter were affected by
purchase accounting accretion and amortization entries associated
with the fair value measurements recorded effective June 1, 2014. Increases in interest income
on loans totaling $0.2 million and
$2.3 million were recorded during the
first quarters of 2019 and 2018, respectively. An increase in
interest expense on subordinated debentures totaling $0.2 million was recorded during both the
current-year first quarter and prior-year first quarter.
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 provision expense of $0.9 million during the first quarter of 2019,
compared to no provision expense during the respective 2018
period. The provision expense recorded during the
current-year first quarter mainly reflected ongoing net loan
growth. No provision expense was made during the prior-year
first quarter in light of net loan recoveries being recorded during
the period.
Noninterest income during the first quarter of 2019 was
$6.6 million, compared to
$4.4 million during 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 $0.4
million, or 8.2 percent, during the current-year first
quarter compared to the respective 2018 period. The higher
level of noninterest income primarily reflected increased mortgage
banking activity income and credit and debit card income.
Increased service charges on accounts and payroll processing fees
also contributed to the higher level of noninterest income.
Noninterest expense totaled $21.8
million during the first quarter of 2019, up $0.7 million, or 3.2 percent, from the prior-year
first quarter. The higher level of expense primarily resulted
from increased salary costs, mainly reflecting pay increases for
all hourly employees that went into effect on April 1, 2018, and annual employee merit pay
increases.
Mr. Kaminski continued, "As expected, our net interest margin
remained robust during the first quarter of 2019, reflecting our
continuing focus on risk-based loan pricing and prudent
underwriting. We are pleased to report growth in certain fee
income categories, illustrating the success of ongoing strategic
initiatives, and remain committed to controlling overhead
costs. The enhancement of mortgage banking activity income
through increased market share remains a priority. To further
our market penetration, we continue to hire proven mortgage loan
originators when opportunities arise. We are also hopeful
that recent declines in residential mortgage loan rates will spur
increased refinance activity and create additional mortgage banking
activity income."
Balance Sheet
As of March 31, 2019, total assets
were $3.55 billion, up $188 million, or 5.6 percent, from December 31, 2018. Interest-earning
deposits and total loans increased $158
million and $46.6 million,
respectively, over the same time period. The growth in
interest-earning deposits mainly stemmed from certain
deposit-gathering initiatives and an increase in wholesale
funds. During the twelve months ended March 31, 2019, total loans were up $248 million, or 9.7 percent. Approximately
$125 million in commercial term loans
to new and existing borrowers were originated during the first
quarter of 2019, as ongoing sales and relationship-building efforts
resulted in increased lending opportunities. As of
March 31, 2019, unfunded commitments
on commercial construction and development loans totaled
approximately $147 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 very pleased with the net loan growth achieved
during first quarter of 2019, which was largely fueled by increases
in commercial and industrial loans and owner-occupied commercial
real estate loans. New commercial term loan originations
during the quarter were once again in line with quarterly
originations over the past few years. Members of our lending
team continue to identify and attract new client relationships and
meet the needs of our existing customers with a continuing
commitment to sound quality and appropriate pricing. We also
remain mindful of growing the portfolio in adherence with internal
initiatives, which includes maintaining the combined commercial and
industrial loan and owner-occupied commercial real estate loan
portfolios at a minimum percentage of total commercial loans.
Our residential mortgage portfolio grew for the twelfth consecutive
quarter, a majority of which consists of adjustable rate
residential mortgage loans, reflecting the continuing success of
strategic initiatives intended to increase our market
penetration. Based on our current commercial loan and
residential mortgage loan pipelines, we are confident that solid
loan growth can be realized in future periods."
As of March 31, 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 proportional initiatives.
Total deposits at March 31, 2019
were $2.61 billion, up $147 million from December
31, 2018. Local deposits and brokered deposits were up
$75.0 million and $72.3 million, respectively, during the first
three months of 2019. The growth in local deposits was mainly
driven by a special time deposit campaign that was introduced in
mid first quarter and that has since ended, along with an increase
in business money market accounts. Wholesale funds were
$570 million, or approximately 18
percent of total funds, as of March 31,
2019, compared to $474
million, or approximately 16 percent of total funds, as of
December 31, 2018. A
substantial portion of the growth in wholesale funds during the
first quarter of 2019 occurred in January; the monies were used
primarily to fund strong loan growth recorded in late 2018 and
early 2019 and offset typical and expected seasonal business
deposit withdrawals used for bonus and tax payments, as well as to
maintain sufficient balance sheet liquidity.
Asset Quality
Nonperforming assets at March 31,
2019, were $4.5 million, or
0.1 percent of total assets, compared to $5.0 million, or 0.2 percent of total assets, at
December 31, 2018, and $8.1 million, or 0.3 percent of total assets, at
March 31, 2018. The decline in
nonperforming assets during the twelve months ended March 31, 2019, mainly reflects successful loan
collection efforts and sales of bank-owned properties that were no
longer being used or considered for use as bank facilities.
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 quarter of 2019, loan charge-offs totaled
$0.2 million while recoveries of
prior period charge-offs equaled $0.1
million, providing for net loan charge-offs of $0.1 million, or an annualized 0.01 percent of
average total loans.
Capital Position
Shareholders' equity totaled $384
million as of March 31, 2019,
an increase of $8.5 million from
year-end 2018. The Bank's capital position remains above
"well-capitalized" with a total risk-based capital ratio of 12.4
percent as of March 31, 2019,
compared to 12.3 percent at December
31, 2018. At March 31,
2019, the Bank had approximately $77
million in excess of the 10.0 percent minimum regulatory
threshold required to be considered a "well-capitalized"
institution. Mercantile reported 16,421,025 total shares
outstanding at March 31, 2019.
As part of a $20 million common
stock repurchase program announced in January 2015 and later expanded by $15 million in April
2016, Mercantile repurchased approximately 119,000 shares
for $3.6 million, or a weighted
average all-in cost per share of $30.23, during the first quarter of 2019.
Since the program's inception, Mercantile repurchased approximately
1,275,000 shares for $29.0 million,
or a weighted average all-in cost per share of $22.77. Future share repurchases totaling
$6.0 million can be made under the
program.
Mr. Kaminski concluded, "In light of our continuing financial
strength, we are well-positioned to further enhance shareholder
value and meet targeted growth goals. Our sustained cash
dividend program and related competitive dividend yield demonstrate
our commitment to increasing shareholder value. As reflected
by growth in the commercial and residential loan portfolios and
deposits, our emphasis on building and cultivating value-added
relationships continues to successfully attract new customers as
well as retain existing clients. We are very excited about
Mercantile's future and are confident that the sound financial
results achieved during the first quarter of 2019 will continue in
the current year and beyond."
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 $3.5 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 and
CEO
|
Executive Vice
President and CFO
|
|
616-726-1502
|
616-726-1202
|
|
rkaminski@mercbank.com
|
cchristmas@mercbank.com
|
Mercantile Bank
Corporation
|
|
|
|
|
|
|
First Quarter 2019
Results
|
|
|
|
|
|
|
|
|
|
|
|
|
|
MERCANTILE BANK
CORPORATION
|
CONSOLIDATED BALANCE
SHEETS
|
(Unaudited)
|
|
|
|
|
|
|
|
|
|
MARCH 31,
|
|
DECEMBER
31,
|
|
MARCH 31,
|
|
|
2019
|
|
2018
|
|
2018
|
|
|
|
|
|
|
|
ASSETS
|
|
|
|
|
|
|
Cash and
due from banks
|
$
|
46,322,000
|
$
|
64,872,000
|
$
|
47,278,000
|
Interest-earning deposits
|
|
168,572,000
|
|
10,482,000
|
|
163,879,000
|
Total cash and cash
equivalents
|
|
214,894,000
|
|
75,354,000
|
|
211,157,000
|
|
|
|
|
|
|
|
Securities available for sale
|
|
337,876,000
|
|
337,366,000
|
|
336,988,000
|
Federal
Home Loan Bank stock
|
|
18,002,000
|
|
16,022,000
|
|
11,036,000
|
|
|
|
|
|
|
|
Loans
|
|
2,799,639,000
|
|
2,753,085,000
|
|
2,551,204,000
|
Allowance for loan losses
|
|
(23,135,000)
|
|
(22,380,000)
|
|
(19,974,000)
|
Loans, net
|
|
2,776,504,000
|
|
2,730,705,000
|
|
2,531,230,000
|
|
|
|
|
|
|
|
Premises
and equipment, net
|
|
50,109,000
|
|
48,321,000
|
|
46,300,000
|
Bank
owned life insurance
|
|
69,789,000
|
|
69,647,000
|
|
69,010,000
|
Goodwill
|
|
49,473,000
|
|
49,473,000
|
|
49,473,000
|
Core
deposit intangible, net
|
|
5,084,000
|
|
5,561,000
|
|
7,044,000
|
Other
assets
|
|
30,023,000
|
|
31,458,000
|
|
31,662,000
|
|
|
|
|
|
|
|
Total
assets
|
$
|
3,551,754,000
|
$
|
3,363,907,000
|
$
|
3,293,900,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
LIABILITIES AND
SHAREHOLDERS' EQUITY
|
|
|
|
|
|
|
Deposits:
|
|
|
|
|
|
|
Noninterest-bearing
|
$
|
857,734,000
|
$
|
889,784,000
|
$
|
830,187,000
|
Interest-bearing
|
|
1,753,240,000
|
|
1,573,924,000
|
|
1,709,866,000
|
Total deposits
|
|
2,610,974,000
|
|
2,463,708,000
|
|
2,540,053,000
|
|
|
|
|
|
|
|
Securities sold under agreements to repurchase
|
|
111,235,000
|
|
103,519,000
|
|
104,894,000
|
Federal
Home Loan Bank advances
|
|
384,000,000
|
|
350,000,000
|
|
220,000,000
|
Subordinated debentures
|
|
46,369,000
|
|
46,199,000
|
|
45,688,000
|
Accrued
interest and other liabilities
|
|
15,447,000
|
|
25,232,000
|
|
14,925,000
|
Total liabilities
|
|
3,168,025,000
|
|
2,988,658,000
|
|
2,925,560,000
|
|
|
|
|
|
|
|
SHAREHOLDERS'
EQUITY
|
|
|
|
|
|
|
Common
stock
|
|
305,346,000
|
|
308,005,000
|
|
310,601,000
|
Retained
earnings
|
|
83,107,000
|
|
75,483,000
|
|
68,283,000
|
Accumulated other comprehensive income/(loss)
|
|
(4,724,000)
|
|
(8,239,000)
|
|
(10,544,000)
|
Total shareholders'
equity
|
|
383,729,000
|
|
375,249,000
|
|
368,340,000
|
|
|
|
|
|
|
|
Total liabilities and
shareholders' equity
|
$
|
3,551,754,000
|
$
|
3,363,907,000
|
$
|
3,293,900,000
|
Mercantile Bank
Corporation
|
|
|
|
|
|
|
|
|
First Quarter 2019
Results
|
|
|
|
|
|
|
|
|
MERCANTILE BANK
CORPORATION
|
CONSOLIDATED REPORTS
OF INCOME
|
(Unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
THREE MONTHS
ENDED
|
|
THREE MONTHS
ENDED
|
|
|
March 31,
2019
|
|
March 31,
2018
|
|
|
|
|
|
|
|
|
|
INTEREST
INCOME
|
|
|
|
|
|
|
|
|
Loans,
including fees
|
|
$
|
35,789,000
|
|
|
$
|
32,315,000
|
|
Investment securities
|
|
|
2,441,000
|
|
|
|
2,196,000
|
|
Other
interest-earning assets
|
|
|
407,000
|
|
|
|
470,000
|
|
Total interest
income
|
|
|
38,637,000
|
|
|
|
34,981,000
|
|
|
|
|
|
|
|
|
|
|
INTEREST
EXPENSE
|
|
|
|
|
|
|
|
|
Deposits
|
|
|
4,804,000
|
|
|
|
3,085,000
|
|
Short-term borrowings
|
|
|
104,000
|
|
|
|
57,000
|
|
Federal
Home Loan Bank advances
|
|
|
2,234,000
|
|
|
|
945,000
|
|
Other
borrowed money
|
|
|
850,000
|
|
|
|
695,000
|
|
Total interest
expense
|
|
|
7,992,000
|
|
|
|
4,782,000
|
|
|
|
|
|
|
|
|
|
|
Net interest
income
|
|
|
30,645,000
|
|
|
|
30,199,000
|
|
|
|
|
|
|
|
|
|
|
Provision for loan
losses
|
|
|
850,000
|
|
|
|
0
|
|
|
|
|
|
|
|
|
|
|
Net interest income
after
|
|
|
|
|
|
|
|
|
provision for loan losses
|
|
|
29,795,000
|
|
|
|
30,199,000
|
|
|
|
|
|
|
|
|
|
|
NONINTEREST
INCOME
|
|
|
|
|
|
|
|
|
Service
charges on accounts
|
|
|
1,077,000
|
|
|
|
1,053,000
|
|
Credit
and debit card income
|
|
|
1,337,000
|
|
|
|
1,243,000
|
|
Mortgage
banking income
|
|
|
1,057,000
|
|
|
|
884,000
|
|
Payroll
services
|
|
|
505,000
|
|
|
|
482,000
|
|
Earnings
on bank owned life insurance
|
|
1,630,000
|
|
|
|
331,000
|
|
Other
income
|
|
|
1,026,000
|
|
|
|
388,000
|
|
Total noninterest
income
|
|
|
6,632,000
|
|
|
|
4,381,000
|
|
|
|
|
|
|
|
|
|
|
NONINTEREST
EXPENSE
|
|
|
|
|
|
|
|
|
Salaries
and benefits
|
|
|
13,015,000
|
|
|
|
12,337,000
|
|
Occupancy
|
|
|
1,762,000
|
|
|
|
1,772,000
|
|
Furniture and equipment
|
|
|
635,000
|
|
|
|
548,000
|
|
Data
processing costs
|
|
|
2,216,000
|
|
|
|
2,128,000
|
|
Other
expense
|
|
|
4,202,000
|
|
|
|
4,362,000
|
|
Total noninterest
expense
|
|
|
21,830,000
|
|
|
|
21,147,000
|
|
|
|
|
|
|
|
|
|
|
Income before
federal income
|
|
|
|
|
|
|
|
tax expense
|
|
|
14,597,000
|
|
|
|
13,433,000
|
|
|
|
|
|
|
|
|
|
|
Federal income tax
expense
|
|
|
2,773,000
|
|
|
|
2,552,000
|
|
|
|
|
|
|
|
|
|
|
Net
Income
|
|
$
|
11,824,000
|
|
|
$
|
10,881,000
|
|
|
|
|
|
|
|
|
|
|
Basic
earnings per share
|
|
|
$0.72
|
|
|
|
$0.66
|
|
Diluted
earnings per share
|
|
|
$0.72
|
|
|
|
$0.66
|
|
|
|
|
|
|
|
|
|
|
Average
basic shares outstanding
|
|
|
16,429,571
|
|
|
|
16,595,115
|
|
Average
diluted shares outstanding
|
|
|
16,435,176
|
|
|
|
16,604,325
|
|
Mercantile Bank
Corporation
|
|
|
|
|
|
|
|
|
|
|
|
First Quarter 2019
Results
|
|
|
|
|
|
|
|
|
|
|
|
MERCANTILE BANK
CORPORATION
|
CONSOLIDATED
FINANCIAL HIGHLIGHTS
|
(Unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Quarterly
|
|
(dollars in
thousands except per share data)
|
|
2019
|
|
2018
|
|
2018
|
|
2018
|
|
2018
|
|
|
|
1st
Qtr
|
|
4th
Qtr
|
|
3rd
Qtr
|
|
2nd
Qtr
|
|
1st
Qtr
|
|
EARNINGS
|
|
|
|
|
|
|
|
|
|
|
|
Net
interest income
|
$
|
30,645
|
|
30,818
|
|
29,840
|
|
29,225
|
|
30,199
|
|
Provision for loan losses
|
$
|
850
|
|
0
|
|
400
|
|
700
|
|
0
|
|
Noninterest income
|
$
|
6,632
|
|
5,370
|
|
4,708
|
|
4,550
|
|
4,381
|
|
Noninterest expense
|
$
|
21,830
|
|
21,958
|
|
21,650
|
|
21,414
|
|
21,147
|
|
Net
income before federal income
|
|
|
|
|
|
|
|
|
|
|
|
tax expense
|
$
|
14,597
|
|
14,230
|
|
12,498
|
|
11,661
|
|
13,433
|
|
Net
income
|
$
|
11,824
|
|
11,573
|
|
10,123
|
|
9,446
|
|
10,881
|
|
Basic
earnings per share
|
$
|
0.72
|
|
0.70
|
|
0.61
|
|
0.57
|
|
0.66
|
|
Diluted
earnings per share
|
$
|
0.72
|
|
0.70
|
|
0.61
|
|
0.57
|
|
0.66
|
|
Average
basic shares outstanding
|
|
16,429,571
|
|
16,594,412
|
|
16,611,411
|
|
16,601,400
|
|
16,595,115
|
|
Average
diluted shares outstanding
|
|
16,435,176
|
|
16,600,108
|
|
16,619,295
|
|
16,610,819
|
|
16,604,325
|
|
|
|
|
|
|
|
|
|
|
|
|
|
PERFORMANCE
RATIOS
|
|
|
|
|
|
|
|
|
|
|
|
Return
on average assets
|
|
1.39%
|
|
1.39%
|
|
1.22%
|
|
1.17%
|
|
1.36%
|
|
Return
on average equity
|
|
12.75%
|
|
12.40%
|
|
10.64%
|
|
10.25%
|
|
12.07%
|
|
Net
interest margin (fully tax-equivalent)
|
|
3.88%
|
|
3.98%
|
|
3.87%
|
|
3.92%
|
|
4.06%
|
|
Efficiency ratio
|
|
58.56%
|
|
60.68%
|
|
62.67%
|
|
63.40%
|
|
61.15%
|
|
Full-time equivalent employees
|
|
631
|
|
630
|
|
637
|
|
667
|
|
640
|
|
|
|
|
|
|
|
|
|
|
|
|
|
YIELD ON ASSETS /
COST OF FUNDS
|
|
|
|
|
|
|
|
|
|
|
|
Yield on
loans
|
|
5.21%
|
|
5.08%
|
|
4.91%
|
|
4.92%
|
|
5.14%
|
|
Yield on
securities
|
|
2.82%
|
|
2.80%
|
|
2.70%
|
|
2.64%
|
|
2.61%
|
|
Yield on
other interest-earning assets
|
|
2.40%
|
|
2.20%
|
|
1.98%
|
|
1.80%
|
|
1.52%
|
|
Yield on
total earning assets
|
|
4.89%
|
|
4.80%
|
|
4.60%
|
|
4.60%
|
|
4.70%
|
|
Yield on
total assets
|
|
4.56%
|
|
4.46%
|
|
4.28%
|
|
4.27%
|
|
4.37%
|
|
Cost of
deposits
|
|
0.77%
|
|
0.63%
|
|
0.56%
|
|
0.53%
|
|
0.50%
|
|
Cost of
borrowed funds
|
|
2.43%
|
|
2.22%
|
|
2.14%
|
|
2.01%
|
|
1.83%
|
|
Cost of
interest-bearing liabilities
|
|
1.47%
|
|
1.26%
|
|
1.11%
|
|
1.02%
|
|
0.94%
|
|
Cost of
funds (total earning assets)
|
|
1.01%
|
|
0.82%
|
|
0.73%
|
|
0.68%
|
|
0.64%
|
|
Cost of
funds (total assets)
|
|
0.94%
|
|
0.76%
|
|
0.68%
|
|
0.63%
|
|
0.60%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
PURCHASE
ACCOUNTING ADJUSTMENTS
|
|
|
|
|
|
|
|
|
|
|
|
Loan
portfolio - increase interest income
|
$
|
211
|
|
603
|
|
386
|
|
777
|
|
2,271
|
|
Trust
preferred - increase interest expense
|
$
|
171
|
|
171
|
|
171
|
|
171
|
|
171
|
|
Core
deposit intangible - increase overhead
|
$
|
477
|
|
477
|
|
477
|
|
530
|
|
556
|
|
|
|
|
|
|
|
|
|
|
|
|
|
MORTGAGE BANKING
ACTIVITY
|
|
|
|
|
|
|
|
|
|
|
|
Total
mortgage loans originated
|
$
|
44,932
|
|
44,448
|
|
66,829
|
|
62,032
|
|
40,937
|
|
Purchase
mortgage loans originated
|
$
|
29,891
|
|
29,729
|
|
47,704
|
|
41,239
|
|
25,137
|
|
Refinance mortgage loans originated
|
$
|
15,041
|
|
14,719
|
|
19,125
|
|
20,793
|
|
15,800
|
|
Total
mortgage loans sold
|
$
|
21,502
|
|
21,805
|
|
30,713
|
|
24,114
|
|
19,813
|
|
Net gain
on sale of mortgage loans
|
$
|
698
|
|
829
|
|
1,116
|
|
851
|
|
729
|
|
|
|
|
|
|
|
|
|
|
|
|
|
CAPITAL
|
|
|
|
|
|
|
|
|
|
|
|
Tangible
equity to tangible assets
|
|
9.41%
|
|
9.68%
|
|
9.98%
|
|
9.87%
|
|
9.63%
|
|
Tier 1
leverage capital ratio
|
|
11.16%
|
|
11.41%
|
|
11.76%
|
|
11.81%
|
|
11.50%
|
|
Common
equity risk-based capital ratio
|
|
10.46%
|
|
10.41%
|
|
10.93%
|
|
11.03%
|
|
11.04%
|
|
Tier 1
risk-based capital ratio
|
|
11.84%
|
|
11.80%
|
|
12.35%
|
|
12.49%
|
|
12.52%
|
|
Total
risk-based capital ratio
|
|
12.56%
|
|
12.50%
|
|
13.05%
|
|
13.19%
|
|
13.20%
|
|
Tier 1
capital
|
$
|
379,334
|
|
373,721
|
|
382,829
|
|
375,167
|
|
367,546
|
|
Tier 1
plus tier 2 capital
|
$
|
402,469
|
|
396,102
|
|
404,521
|
|
396,334
|
|
387,520
|
|
Total
risk-weighted assets
|
$
|
3,204,295
|
|
3,167,655
|
|
3,100,158
|
|
3,003,778
|
|
2,935,367
|
|
Book
value per common share
|
$
|
23.37
|
|
22.70
|
|
22.84
|
|
22.57
|
|
22.19
|
|
Tangible
book value per common share
|
$
|
20.05
|
|
19.37
|
|
19.50
|
|
19.20
|
|
18.79
|
|
Cash
dividend per common share
|
$
|
0.26
|
|
1.00
|
|
0.24
|
|
0.22
|
|
0.22
|
|
|
|
|
|
|
|
|
|
|
|
|
|
ASSET
QUALITY
|
|
|
|
|
|
|
|
|
|
|
|
Gross
loan charge-offs
|
$
|
174
|
|
354
|
|
169
|
|
273
|
|
654
|
|
Recoveries
|
$
|
79
|
|
1,042
|
|
294
|
|
766
|
|
1,127
|
|
Net loan
charge-offs (recoveries)
|
$
|
95
|
|
(688)
|
|
(125)
|
|
(493)
|
|
(473)
|
|
Net loan
charge-offs (recoveries) to average loans
|
0.01%
|
|
(0.10%)
|
|
(0.02%)
|
|
(0.08%)
|
|
(0.08%)
|
|
Allowance for loan losses
|
$
|
23,135
|
|
22,380
|
|
21,692
|
|
21,167
|
|
19,974
|
|
Allowance to originated loans
|
|
0.89%
|
|
0.88%
|
|
0.88%
|
|
0.89%
|
|
0.87%
|
|
Nonperforming loans
|
$
|
4,138
|
|
4,141
|
|
4,852
|
|
4,965
|
|
5,742
|
|
Other
real estate/repossessed assets
|
$
|
396
|
|
811
|
|
948
|
|
842
|
|
2,384
|
|
Nonperforming loans to total loans
|
|
0.15%
|
|
0.15%
|
|
0.18%
|
|
0.19%
|
|
0.23%
|
|
Nonperforming assets to total assets
|
|
0.13%
|
|
0.15%
|
|
0.18%
|
|
0.18%
|
|
0.25%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
NONPERFORMING
ASSETS - COMPOSITION
|
|
|
|
|
|
|
|
|
|
|
|
Residential real estate:
|
|
|
|
|
|
|
|
|
|
|
|
Land
development
|
$
|
45
|
|
0
|
|
0
|
|
0
|
|
0
|
|
Construction
|
$
|
0
|
|
0
|
|
0
|
|
0
|
|
0
|
|
Owner occupied /
rental
|
$
|
3,404
|
|
3,555
|
|
3,908
|
|
3,650
|
|
3,571
|
|
Commercial real estate:
|
|
|
|
|
|
|
|
|
|
|
|
Land
development
|
$
|
0
|
|
0
|
|
0
|
|
0
|
|
0
|
|
Construction
|
$
|
0
|
|
0
|
|
0
|
|
0
|
|
0
|
|
Owner
occupied
|
$
|
791
|
|
1,363
|
|
1,543
|
|
1,957
|
|
3,913
|
|
Non-owner
occupied
|
$
|
62
|
|
0
|
|
0
|
|
0
|
|
0
|
|
Non-real
estate:
|
|
|
|
|
|
|
|
|
|
|
|
Commercial
assets
|
$
|
207
|
|
17
|
|
331
|
|
180
|
|
620
|
|
Consumer
assets
|
$
|
25
|
|
17
|
|
18
|
|
20
|
|
22
|
|
Total
nonperforming assets
|
$
|
4,534
|
|
4,952
|
|
5,800
|
|
5,807
|
|
8,126
|
|
|
|
|
|
|
|
|
|
|
|
|
|
NONPERFORMING
ASSETS - RECON
|
|
|
|
|
|
|
|
|
|
|
|
Beginning balance
|
$
|
4,952
|
|
5,800
|
|
5,807
|
|
8,126
|
|
9,403
|
|
Additions - originated loans & former bank
facilities
|
$
|
539
|
|
1,247
|
|
999
|
|
300
|
|
1,426
|
|
Merger-related activity
|
$
|
0
|
|
0
|
|
5
|
|
17
|
|
29
|
|
Return
to performing status
|
$
|
0
|
|
0
|
|
0
|
|
0
|
|
(175)
|
|
Principal payments
|
$
|
(382)
|
|
(1,836)
|
|
(857)
|
|
(778)
|
|
(1,557)
|
|
Sale
proceeds
|
$
|
(429)
|
|
(128)
|
|
(147)
|
|
(1,807)
|
|
(299)
|
|
Loan
charge-offs
|
$
|
(146)
|
|
(57)
|
|
(3)
|
|
(50)
|
|
(597)
|
|
Valuation write-downs
|
$
|
0
|
|
(74)
|
|
(4)
|
|
(1)
|
|
(104)
|
|
Ending
balance
|
$
|
4,534
|
|
4,952
|
|
5,800
|
|
5,807
|
|
8,126
|
|
|
|
|
|
|
|
|
|
|
|
|
|
LOAN PORTFOLIO
COMPOSITION
|
|
|
|
|
|
|
|
|
|
|
|
Commercial:
|
|
|
|
|
|
|
|
|
|
|
|
Commercial &
industrial
|
$
|
839,207
|
|
822,723
|
|
818,113
|
|
776,995
|
|
739,805
|
|
Land development &
construction
|
$
|
45,892
|
|
44,885
|
|
39,396
|
|
37,868
|
|
31,437
|
|
Owner occupied comm'l
R/E
|
$
|
551,517
|
|
548,619
|
|
542,730
|
|
533,075
|
|
531,152
|
|
Non-owner occupied
comm'l R/E
|
$
|
835,679
|
|
816,282
|
|
811,767
|
|
818,376
|
|
794,206
|
|
Multi-family &
residential rental
|
$
|
127,903
|
|
127,597
|
|
94,101
|
|
95,656
|
|
96,428
|
|
Total commercial
|
$
|
2,400,198
|
|
2,360,106
|
|
2,306,107
|
|
2,261,970
|
|
2,193,028
|
|
Retail:
|
|
|
|
|
|
|
|
|
|
|
|
1-4 family
mortgages
|
$
|
316,315
|
|
307,540
|
|
301,765
|
|
283,657
|
|
264,996
|
|
Home equity &
other consumer
|
$
|
83,126
|
|
85,439
|
|
89,545
|
|
91,229
|
|
93,180
|
|
Total retail
|
$
|
399,441
|
|
392,979
|
|
391,310
|
|
374,886
|
|
358,176
|
|
Total loans
|
$
|
2,799,639
|
|
2,753,085
|
|
2,697,417
|
|
2,636,856
|
|
2,551,204
|
|
|
|
|
|
|
|
|
|
|
|
|
|
END OF PERIOD
BALANCES
|
|
|
|
|
|
|
|
|
|
|
|
Loans
|
$
|
2,799,639
|
|
2,753,085
|
|
2,697,417
|
|
2,636,856
|
|
2,551,204
|
|
Securities
|
$
|
355,878
|
|
353,388
|
|
337,603
|
|
342,178
|
|
348,024
|
|
Other
interest-earning assets
|
$
|
168,572
|
|
10,482
|
|
28,193
|
|
69,402
|
|
163,879
|
|
Total
earning assets (before allowance)
|
$
|
3,324,089
|
|
3,116,955
|
|
3,063,213
|
|
3,048,436
|
|
3,063,107
|
|
Total
assets
|
$
|
3,551,754
|
|
3,363,907
|
|
3,300,106
|
|
3,288,521
|
|
3,293,900
|
|
Noninterest-bearing deposits
|
$
|
857,734
|
|
889,784
|
|
879,442
|
|
884,470
|
|
830,187
|
|
Interest-bearing deposits
|
$
|
1,753,240
|
|
1,573,924
|
|
1,629,368
|
|
1,645,341
|
|
1,709,866
|
|
Total
deposits
|
$
|
2,610,974
|
|
2,463,708
|
|
2,508,810
|
|
2,529,811
|
|
2,540,053
|
|
Total
borrowed funds
|
$
|
544,566
|
|
513,220
|
|
401,575
|
|
373,642
|
|
373,824
|
|
Total
interest-bearing liabilities
|
$
|
2,297,806
|
|
2,087,144
|
|
2,030,943
|
|
2,018,983
|
|
2,083,690
|
|
Shareholders' equity
|
$
|
383,729
|
|
375,249
|
|
379,465
|
|
374,919
|
|
368,340
|
|
|
|
|
|
|
|
|
|
|
|
|
|
AVERAGE
BALANCES
|
|
|
|
|
|
|
|
|
|
|
|
Loans
|
$
|
2,787,430
|
|
2,706,617
|
|
2,658,092
|
|
2,596,828
|
|
2,552,070
|
|
Securities
|
$
|
354,459
|
|
343,597
|
|
342,593
|
|
340,990
|
|
348,431
|
|
Other
interest-earning assets
|
$
|
67,915
|
|
30,564
|
|
61,810
|
|
63,336
|
|
123,633
|
|
Total
earning assets (before allowance)
|
$
|
3,209,804
|
|
3,080,778
|
|
3,062,495
|
|
3,001,154
|
|
3,024,134
|
|
Total
assets
|
$
|
3,441,774
|
|
3,312,648
|
|
3,295,129
|
|
3,232,038
|
|
3,249,794
|
|
Noninterest-bearing deposits
|
$
|
852,247
|
|
905,065
|
|
893,181
|
|
848,650
|
|
805,214
|
|
Interest-bearing deposits
|
$
|
1,668,563
|
|
1,579,632
|
|
1,628,346
|
|
1,635,755
|
|
1,690,135
|
|
Total
deposits
|
$
|
2,520,810
|
|
2,484,697
|
|
2,521,527
|
|
2,484,405
|
|
2,495,349
|
|
Total
borrowed funds
|
$
|
532,864
|
|
434,365
|
|
383,830
|
|
365,124
|
|
376,890
|
|
Total
interest-bearing liabilities
|
$
|
2,201,427
|
|
2,013,997
|
|
2,012,176
|
|
2,000,879
|
|
2,067,025
|
|
Shareholders' equity
|
$
|
376,103
|
|
370,175
|
|
377,574
|
|
365,521
|
|
365,521
|
|
View original
content:http://www.prnewswire.com/news-releases/mercantile-bank-corporation-reports-strong-first-quarter-2019-results-300832253.html
SOURCE Mercantile Bank Corporation