Mercantile Bank Corporation Reports Strong Second Quarter 2018 Results

Continued strength in core profitability and solid loan growth highlight quarter

GRAND RAPIDS, Mich., July 17, 2018 /PRNewswire/ -- Mercantile Bank Corporation (NASDAQ: MBWM) ("Mercantile") reported net income of $9.4 million, or $0.57 per diluted share, for the second quarter of 2018, compared with net income of $7.3 million, or $0.45 per diluted share, for the respective prior-year period.  Net income during the first six months of 2018 totaled $20.3 million, or $1.22 per diluted share, compared to $15.0 million, or $0.91 per diluted share, during the first six months of 2017.

The successful collection of certain nonperforming commercial loans increased reported net income during the first six months of 2018 by approximately $1.7 million, or $0.10 per diluted share, while a bank owned life insurance claim during the first quarter of 2017 increased reported net income during the first six months of 2017 by approximately $1.1 million, or $0.06 per diluted share.  Excluding the impacts of these transactions, diluted earnings per share increased $0.27, or 31.8 percent, during the first six months of 2018 compared to the respective 2017 period.

Net income during the second quarter of 2018 and the first six months of 2018 also benefited from a reduction in the corporate federal income tax rate, which was lowered from 35 percent to 21 percent on January 1, 2018, as a result of the enactment of the Tax Cuts and Jobs Act.  Mercantile's effective tax rate was 19.0 percent during both the second quarter and first six months of 2018, down from 30.7 percent during each of the respective prior-year periods.

"We are pleased to report another quarter of sound financial performance, continuing the momentum generated during the first quarter of 2018," said Robert B. Kaminski, Jr., President and Chief Executive Officer of Mercantile.  "Our strong operating performance and balance sheet, sustained strength in commercial and residential mortgage loan originations, and healthy loan pipelines make us confident that the solid results achieved during the first half of the year will continue throughout the remainder of 2018."

Second quarter highlights include:

  • Robust earnings performance and capital position
  • Healthy net interest margin
  • Increased fee income
  • Controlled overhead costs
  • Strong asset quality, as reflected by low levels of nonperforming assets and loans in the 30- to 89-days delinquent category
  • New commercial term loan originations of approximately $142 million
  • Continued strength in commercial loan pipeline

Operating Results

Total revenue, which consists of net interest income and noninterest income, was $33.8 million during the second quarter of 2018, up $2.5 million, or 8.1 percent, from the prior-year second quarter.  Net interest income during the second quarter of 2018 was $29.2 million, up $2.0 million, or 7.5 percent, from the second quarter of 2017, reflecting a higher level of earning assets and an increased net interest margin. 

The net interest margin was 3.92 percent in the second quarter of 2018, down from 4.06 percent in the linked quarter, but up from 3.85 percent in the prior-year second quarter.  The decrease in the net interest margin in the current-year second quarter relative to the first quarter of 2018 primarily resulted from a lower yield on commercial loans, which more than offset an improved earning asset mix.  The collection of interest on certain nonperforming commercial loans that paid in full positively impacted the yield on earning assets during the first quarter of 2018 by approximately 29 basis points, while a higher-than-desired level of interest-earning deposits negatively impacted the yield by approximately 8 basis points.  Excluding the impacts of these factors, the net interest margin equaled approximately 3.85 percent during the first quarter of 2018.  The change in earning asset mix mainly reflected loan growth and a reduction in interest-earning deposit balances.  Higher-yielding average loans represented 86.5 percent of average earning assets during the second quarter of 2018, up from 84.4 percent during the linked quarter, while lower-yielding average interest-earning deposit balances represented 2.1 percent of average earning assets during the current-year second quarter, down from 4.1 percent during the linked quarter.  The cost of funds equaled 0.68 percent during the second quarter of 2018, up from 0.64 percent during the first quarter of 2018 mainly due to increased costs of certain non-time deposit accounts, time deposits, and borrowed funds. 

The increase in the net interest margin during the second quarter of 2018 compared to the prior-year second quarter reflects a higher yield on average earning assets, primarily reflecting an increased yield on commercial loans, which more than offset a higher cost of funds, mainly reflecting increased costs of certain non-time deposit accounts, time deposits, and borrowed funds.  The increased yield on commercial loans primarily reflects 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 June and December 2017 and March and June 2018.

Net interest income and the net interest margin during the second quarter of 2018 and the prior-year second 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 $0.8 million and $1.3 million were recorded during the second quarters of 2018 and 2017, respectively.  Purchased loan accretion amounts vary from period to period as a result of periodic cash flow re-estimations, loan payoffs, and payment performance.  An increase in interest expense on subordinated debentures totaling $0.2 million was recorded during both the current-year second quarter and prior-year second quarter. 

Mercantile recorded a $0.7 million provision for loan losses during the second quarter of 2018 compared to a $0.8 million provision during the respective 2017 period.  The provision expense recorded during the second quarter of 2018 primarily reflects loan growth and increased allocations related to certain environmental factors, while the provision expense recorded during the prior-year second quarter mainly reflects loan growth.

Noninterest income during the second quarter of 2018 was $4.6 million, up $0.5 million, or 12.6 percent, from the $4.1 million recorded during the second quarter of 2017.  The increase in noninterest income in part reflects higher mortgage banking activity income, credit and debit card fees, payroll processing revenue, and service charges on accounts.  The increased mortgage banking activity income mainly reflects the success of ongoing strategic initiatives that were implemented to increase market penetration.  The positive impacts of these initiatives have more than offset the negative impacts of rising residential mortgage loan rates and a shortage of housing inventory in Mercantile's markets. 

Noninterest expense totaled $21.4 million during the second quarter of 2018, up $1.5 million, or 7.7 percent, from the respective 2017 period.  The higher level of expense primarily resulted from increased salary costs, mainly reflecting annual employee merit pay increases, the hiring of additional staff, a larger bonus accrual, and higher stock-based compensation expense.  In addition, all hourly employees received a pay increase effective April 1, 2018.

Mr. Kaminski continued, "We are very pleased with the ongoing strength and relative steadiness of our core net interest margin, depicting our continuing focus on loan pricing discipline and sound asset quality.  The recent interest rate hikes initiated by the Federal Open Market Committee have positively impacted our core net interest margin, and we believe our balance sheet structure positions us to benefit from any further rate increases.  We are also pleased with the growth in various fee income categories stemming from the success of ongoing strategic initiatives.  Although headwinds persist, including rising interest rates and limited housing inventories in our markets, mortgage banking activity income increased in the second quarter as we expected, in large part reflecting a higher level of purchase activity and our efforts to increase market penetration."  

Balance Sheet

As of June 30, 2018, total assets were $3.29 billion, up $1.8 million from December 31, 2017.  Total loans increased $78.3 million, or 3.1 percent, while interest-earning deposits decreased $75.6 million, or 52.1 percent, over the same time period.  Interest-earning deposit balances declined as a result of these funds being used to meet loan funding requirements.  Approximately $142 million in commercial term loans to new and existing borrowers were originated during the second quarter of 2018, as continuing sales and relationship-building efforts resulted in additional lending opportunities.  As of June 30, 2018, unfunded commitments on commercial construction and development loans totaled approximately $116 million, which are expected to be largely funded over the next 12 to 18 months.

Raymond Reitsma, President of Mercantile Bank of Michigan, noted, "We are very pleased with the net loan growth achieved during the second quarter of 2018, reflecting our lending team's ongoing focus on establishing new customer relationships and serving our existing customer base.  New commercial term loan originations were in line with quarterly originations over the past few years.  We remain dedicated to growing the loan portfolio in a disciplined manner, with a continuing emphasis on credit quality and risk-based pricing.  Based on expected new loan fundings, we are confident that the commercial loan portfolio will expand in future periods.  Our residential mortgage loan portfolio grew for the ninth consecutive quarter due to our ongoing strategic initiatives, and we believe we are well-positioned to increase our market presence."

As of June 30, 2018, commercial and industrial loans and owner-occupied commercial real estate ("CRE") loans combined represented approximately 58 percent of total commercial loans, while non-owner occupied CRE loans equaled about 36 percent of total commercial loans. 

Total deposits at June 30, 2018 were $2.53 billion, up $7.4 million and $159 million from December 31, 2017, and June 30, 2017, respectively, while local deposits were up $22.6 million and $165 million during the respective time periods.  New commercial loan relationships and the success of various deposit account initiatives drove the growth in local deposits.  Wholesale funds were $317 million, or approximately 11 percent of total funds, as of June 30, 2018, compared to $323 million and $339 million as of December 31, 2017, and June 30, 2017, respectively.

Asset Quality

Nonperforming assets at June 30, 2018, were $5.8 million, or 0.2 percent of total assets, compared to $9.4 million, or 0.3 percent of total assets, at December 31, 2017, and $7.2 million, or 0.2 percent of total assets, at June 30, 2017.  The decline in nonperforming assets during the first six months of 2018 primarily reflects successful loan collection efforts and sales of bank-owned real estate 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 generally declined in number and dollar volume during the first six months of 2018.  Net loan recoveries were $0.5 million, or an annualized negative 0.08 percent of average loans, during both the second quarter of 2018 and the linked quarter, compared with net loan charge-offs of $0.7 million, or an annualized 0.12 percent of average loans, during the second quarter of 2017.

Capital Position

Shareholders' equity totaled $375 million as of June 30, 2018, an increase of $9.0 million from year-end 2017.  The Bank's capital position remains above "well-capitalized" with a total risk-based capital ratio of 12.9 percent as of June 30, 2018, compared to 12.6 percent at December 31, 2017.  At June 30, 2018, the Bank had approximately $88 million in excess of the 10.0 percent minimum regulatory threshold required to be considered a "well-capitalized" institution.  Mercantile reported 16,609,336 total shares outstanding at June 30, 2018.

Mr. Kaminski concluded, "Our strong financial performance during the first half of 2018 positions us to meet growth and profitability objectives and increase shareholder value.  The sustained cash dividend program, including the announcement of an increased third quarter dividend earlier today, depicts our commitment to enhancing total shareholder return.  Our value-added approach to banking, along with our wide array of products and services, have allowed us to successfully attract new customers as well as retain existing clients.  We are excited about the opportunities available to us in our markets, and we are confident that our demonstrated robust operating performance during the first six months of 2018 will continue during the remainder of 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 $3.3 billion and operates 47 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.

 

 


MERCANTILE BANK CORPORATION

CONSOLIDATED BALANCE SHEETS

(Unaudited)










JUNE 30,


DECEMBER 31,


JUNE 30,



2018


2017


2017

ASSETS







   Cash and due from banks

$

56,338,000

$

55,127,000

$

52,847,000

   Interest-earning deposits


69,402,000


144,974,000


48,762,000

      Total cash and cash equivalents


125,740,000


200,101,000


101,609,000








   Securities available for sale


331,142,000


335,744,000


322,258,000

   Federal Home Loan Bank stock


11,036,000


11,036,000


11,036,000








   Loans


2,636,856,000


2,558,552,000


2,527,281,000

   Allowance for loan losses


(21,167,000)


(19,501,000)


(18,295,000)

      Loans, net


2,615,689,000


2,539,051,000


2,508,986,000








   Premises and equipment, net


47,102,000


46,034,000


45,999,000

   Bank owned life insurance


69,321,000


68,689,000


66,535,000

   Goodwill


49,473,000


49,473,000


49,473,000

   Core deposit intangible


6,514,000


7,600,000


8,712,000

   Other assets


32,504,000


28,976,000


28,728,000








      Total assets

$

3,288,521,000

$

3,286,704,000

$

3,143,336,000















LIABILITIES AND SHAREHOLDERS' EQUITY







   Deposits:







      Noninterest-bearing

$

884,470,000

$

866,380,000

$

800,718,000

      Interest-bearing


1,645,341,000


1,655,985,000


1,570,003,000

         Total deposits


2,529,811,000


2,522,365,000


2,370,721,000








   Securities sold under agreements to repurchase


94,573,000


118,748,000


110,920,000

   Federal Home Loan Bank advances


230,000,000


220,000,000


245,000,000

   Subordinated debentures


45,858,000


45,517,000


45,176,000

   Accrued interest and other liabilities


13,360,000


14,204,000


14,020,000

         Total liabilities


2,913,602,000


2,920,834,000


2,785,837,000








SHAREHOLDERS' EQUITY







   Common stock


311,720,000


309,772,000


308,343,000

   Retained earnings


74,084,000


61,001,000


50,012,000

   Accumulated other comprehensive income/(loss)


(10,885,000)


(4,903,000)


(856,000)

      Total shareholders' equity


374,919,000


365,870,000


357,499,000








      Total liabilities and shareholders' equity

$

3,288,521,000

$

3,286,704,000

$

3,143,336,000

 

 


MERCANTILE BANK CORPORATION

CONSOLIDATED REPORTS OF INCOME

(Unaudited)
















THREE MONTHS ENDED


THREE MONTHS ENDED

SIX MONTHS ENDED

SIX MONTHS ENDED


June 30, 2018


June 30, 2017

June 30, 2018

June 30, 2017

INTEREST INCOME














   Loans, including fees

$

31,855,000



$

28,927,000


$

64,170,000


$

55,660,000


   Investment securities


2,177,000




1,860,000



4,373,000



3,688,000


   Other interest-earning assets


287,000




116,000



757,000



259,000


      Total interest income


34,319,000




30,903,000



69,300,000



59,607,000
















INTEREST EXPENSE














   Deposits


3,262,000




2,023,000



6,347,000



3,891,000


   Short-term borrowings


61,000




46,000



118,000



97,000


   Federal Home Loan Bank advances


988,000




1,002,000



1,933,000



1,657,000


   Other borrowed money


783,000




639,000



1,478,000



1,260,000


      Total interest expense


5,094,000




3,710,000



9,876,000



6,905,000
















      Net interest income


29,225,000




27,193,000



59,424,000



52,702,000
















Provision for loan losses


700,000




750,000



700,000



1,350,000
















      Net interest income after














         provision for loan losses


28,525,000




26,443,000



58,724,000



51,352,000
















NONINTEREST INCOME














   Service charges on accounts


1,079,000




1,054,000



2,132,000



2,072,000


   Credit and debit card income


1,334,000




1,176,000



2,577,000



2,282,000


   Mortgage banking income


995,000




783,000



1,879,000



1,906,000


   Earnings on bank owned life insurance


321,000




328,000



652,000



2,066,000


   Other income


821,000




701,000



1,691,000



1,567,000


      Total noninterest income


4,550,000




4,042,000



8,931,000



9,893,000
















NONINTEREST EXPENSE














   Salaries and benefits


12,757,000




10,888,000



25,094,000



22,160,000


   Occupancy


1,629,000




1,554,000



3,401,000



3,108,000


   Furniture and equipment


582,000




546,000



1,130,000



1,081,000


   Data processing costs


2,137,000




2,072,000



4,265,000



4,083,000


   Other expense


4,309,000




4,822,000



8,671,000



9,226,000


      Total noninterest expense


21,414,000




19,882,000



42,561,000



39,658,000
















      Income before federal income














         tax expense


11,661,000




10,603,000



25,094,000



21,587,000
















Federal income tax expense


2,215,000




3,260,000



4,767,000



6,629,000
















      Net Income

$

9,446,000



$

7,343,000


$

20,327,000


$

14,958,000
















   Basic earnings per share


$0.57




$0.45



$1.22



$0.91


   Diluted earnings per share


$0.57




$0.45



$1.22



$0.91
















   Average basic shares outstanding


16,601,400




16,471,060



16,598,274



16,452,954


   Average diluted shares outstanding


16,610,819




16,485,356



16,607,593



16,467,384


 

 


MERCANTILE BANK CORPORATION

CONSOLIDATED FINANCIAL HIGHLIGHTS

(Unaudited)


















Quarterly


Year-To-Date

(dollars in thousands except per share data)

2018


2018


2017


2017


2017







2nd Qtr


1st Qtr


4th Qtr


3rd Qtr


2nd Qtr


2018


2017

EARNINGS















   Net interest income

$

29,225


30,199


28,402


28,644


27,193


59,424


52,702

   Provision for loan losses

$

700


0


600


1,000


750


700


1,350

   Noninterest income

$

4,550


4,381


4,503


4,605


4,042


8,931


9,893

   Noninterest expense

$

21,414


21,147


19,848


20,210


19,882


42,561


39,658

   Net income before federal income















      tax expense

$

11,661


13,433


12,457


12,039


10,603


25,094


21,587

   Net income

$

9,446


10,881


7,979


8,337


7,343


20,327


14,958

   Basic earnings per share

$

0.57


0.66


0.48


0.51


0.45


1.22


0.91

   Diluted earnings per share

$

0.57


0.66


0.48


0.51


0.45


1.22


0.91

   Average basic shares outstanding


16,601,400


16,595,115


16,525,625


16,483,492


16,471,060


16,598,274


16,452,954

   Average diluted shares outstanding


16,610,819


16,604,325


16,536,225


16,494,540


16,485,356


16,607,593


16,467,384
















PERFORMANCE RATIOS















   Return on average assets


1.17%


1.36%


0.97%


1.03%


0.96%


1.26%


0.99%

   Return on average equity


10.25%


12.07%


8.70%


9.21%


8.39%


11.15%


8.69%

   Net interest margin (fully tax-equivalent)

3.92%


4.06%


3.76%


3.83%


3.85%


3.99%


3.79%

   Efficiency ratio


63.40%


61.15%


60.32%


60.78%


63.65%


62.26%


63.36%

   Full-time equivalent employees


667


640


641


634


643


667


643
















YIELD ON ASSETS / COST OF FUNDS















   Yield on loans


4.92%


5.14%


4.76%


4.81%


4.69%


5.03%


4.62%

   Yield on securities


2.64%


2.61%


2.60%


2.50%


2.44%


2.62%


2.40%

   Yield on other interest-earning assets


1.80%


1.52%


1.29%


1.28%


0.99%


1.64%


0.97%

   Yield on total earning assets


4.60%


4.70%


4.35%


4.41%


4.37%


4.65%


4.28%

   Yield on total assets


4.27%


4.37%


4.04%


4.10%


4.05%


4.32%


3.97%

   Cost of deposits


0.53%


0.50%


0.45%


0.43%


0.35%


0.51%


0.34%

   Cost of borrowed funds


2.01%


1.83%


1.74%


1.75%


1.69%


1.92%


1.61%

   Cost of interest-bearing liabilities


1.02%


0.94%


0.88%


0.85%


0.77%


0.98%


0.73%

   Cost of funds (total earning assets)


0.68%


0.64%


0.59%


0.58%


0.52%


0.66%


0.49%

   Cost of funds (total assets)


0.63%


0.60%


0.55%


0.54%


0.48%


0.61%


0.46%
















PURCHASE ACCOUNTING ADJUSTMENTS














   Loan portfolio - increase interest income

$

777


2,271


683


1,757


1,336


3,048


2,168

   Trust preferred - increase interest expense

$

171


171


171


171


171


342


342

   Core deposit intangible - increase overhead

$

530


556


556


556


609


1,086


1,245
















MORTGAGE BANKING ACTIVITY















   Total mortgage loans originated

$

62,032


40,937


62,526


61,962


60,371


102,969


98,736

   Purchase mortgage loans originated

$

41,239


25,137


33,958


41,254


39,115


66,376


60,638

   Refinance mortgage loans originated

$

20,793


15,800


28,568


20,708


21,256


36,593


38,098

   Total mortgage loans sold

$

24,114


19,813


26,254


33,858


29,371


43,927


47,834

   Net gain on sale of mortgage loans

$

851


729


1,051


1,131


1,012


1,580


1,744
















CAPITAL















   Tangible equity to tangible assets


9.87%


9.63%


9.56%


9.54%


9.70%


9.87%


9.70%

   Tier 1 leverage capital ratio


11.81%


11.50%


11.24%


11.18%


11.49%


11.81%


11.49%

   Common equity risk-based capital ratio


11.03%


11.04%


10.71%


10.54%


10.65%


11.03%


10.65%

   Tier 1 risk-based capital ratio


12.49%


12.52%


12.19%


12.01%


12.15%


12.49%


12.15%

   Total risk-based capital ratio


13.19%


13.20%


12.85%


12.66%


12.79%


13.19%


12.79%

   Tier 1 capital

$

375,167


367,546


359,047


354,087


347,754


375,167


347,754

   Tier 1 plus tier 2 capital

$

396,334


387,520


378,548


373,280


366,048


396,334


366,048

   Total risk-weighted assets

$

3,003,778


2,935,367


2,946,527


2,949,011


2,861,605


3,003,778


2,861,605

   Book value per common share

$

22.57


22.19


22.05


21.99


21.69


22.57


21.69

   Tangible book value per common share

$

19.20


18.79


18.61


18.49


18.16


19.20


18.16

   Cash dividend per common share

$

0.22


0.22


0.19


0.19


0.18


0.44


0.36
















ASSET QUALITY















   Gross loan charge-offs

$

273


654


920


709


1,150


927


1,606

   Recoveries

$

766


1,127


628


607


419


1,893


590

   Net loan charge-offs (recoveries)

$

(493)


(473)


292


102


731


(966)


1,016

   Net loan charge-offs to average loans


(0.08%)


(0.08%)


0.05%


0.02%


0.12%


(0.08%)


0.08%

   Allowance for loan losses

$

21,167


19,974


19,501


19,193


18,295


21,167


18,295

   Allowance to originated loans


0.89%


0.87%


0.88%


0.88%


0.86%


0.89%


0.86%

   Nonperforming loans

$

4,965


5,742


7,143


8,231


6,450


4,965


6,450

   Other real estate/repossessed assets

$

842


2,384


2,260


2,327


789


842


789

   Nonperforming loans to total loans


0.19%


0.23%


0.28%


0.32%


0.26%


0.19%


0.26%

   Nonperforming assets to total assets


0.18%


0.25%


0.29%


0.32%


0.23%


0.18%


0.23%
















NONPERFORMING ASSETS - COMPOSITION













   Residential real estate:















      Land development

$

0


0


0


0


0


0


0

      Construction

$

0


0


0


0


0


0


0

      Owner occupied / rental

$

3,650


3,571


3,574


3,648


3,367


3,650


3,367

   Commercial real estate:















      Land development

$

0


0


35


50


65


0


65

      Construction

$

0


0


0


0


0


0


0

      Owner occupied  

$

1,957


3,913


4,272


4,627


1,313


1,957


1,313

      Non-owner occuped

$

0


0


36


84


400


0


400

   Non-real estate:















      Commercial assets

$

180


620


1,444


2,126


2,081


180


2,081

      Consumer assets

$

20


22


42


23


13


20


13

   Total nonperforming assets


5,807


8,126


9,403


10,558


7,239


5,807


7,239
















NONPERFORMING ASSETS - RECON















   Beginning balance

$

8,126


9,403


10,558


7,239


7,787


9,403


6,408

   Additions - originated loans

$

300


1,426


402


4,789


1,774


1,726


4,761

   Merger-related activity

$

17


29


0


210


16


46


16

   Return to performing status

$

0


(175)


0


(120)


0


(175)


(113)

   Principal payments

$

(778)


(1,557)


(688)


(1,089)


(1,168)


(2,335)


(2,457)

   Sale proceeds

$

(1,807)


(299)


(101)


(373)


(147)


(2,106)


(203)

   Loan charge-offs

$

(50)


(597)


(754)


(91)


(953)


(647)


(1,088)

   Valuation write-downs

$

(1)


(104)


(14)


(7)


(70)


(105)


(85)

   Ending balance

$

5,807


8,126


9,403


10,558


7,239


5,807


7,239
















LOAN PORTFOLIO COMPOSITION















   Commercial:















      Commercial & industrial

$

776,995


739,805


753,764


776,562


780,816


776,995


780,816

      Land development & construction

$

37,868


31,437


29,872


28,575


29,027


37,868


29,027

      Owner occupied comm'l R/E

$

533,075


531,152


526,327


485,347


491,633


533,075


491,633

      Non-owner occupied comm'l R/E

$

818,376


794,206


791,685


805,167


783,036


818,376


783,036

      Multi-family & residential rental

$

95,656


96,428


101,918


119,170


114,081


95,656


114,081

         Total commercial

$

2,261,970


2,193,028


2,203,566


2,214,821


2,198,593


2,261,970


2,198,593

   Retail:















      1-4 family mortgages

$

283,657


264,996


254,560


236,075


220,697


283,657


220,697

      Home equity & other consumer

$

91,229


93,180


100,426


103,376


107,991


91,229


107,991

         Total retail

$

374,886


358,176


354,986


339,451


328,688


374,886


328,688

         Total loans

$

2,636,856


2,551,204


2,558,552


2,554,272


2,527,281


2,636,856


2,527,281
















END OF PERIOD BALANCES















   Loans

$

2,636,856


2,551,204


2,558,552


2,554,272


2,527,281


2,636,856


2,527,281

   Securities

$

342,178


348,024


346,780


341,126


333,294


342,178


333,294

   Other interest-earning assets

$

69,402


163,879


144,974


123,110


48,762


69,402


48,762

   Total earning assets (before allowance)

$

3,048,436


3,063,107


3,050,306


3,018,508


2,909,337


3,048,436


2,909,337

   Total assets

$

3,288,521


3,293,900


3,286,704


3,254,655


3,143,336


3,288,521


3,143,336

   Noninterest-bearing deposits

$

884,470


830,187


866,380


826,038


800,718


884,470


800,718

   Interest-bearing deposits

$

1,645,341


1,709,866


1,655,985


1,663,005


1,570,003


1,645,341


1,570,003

   Total deposits

$

2,529,811


2,540,053


2,522,365


2,489,043


2,370,721


2,529,811


2,370,721

   Total borrowed funds

$

373,642


373,824


387,468


390,868


404,370


373,642


404,370

   Total interest-bearing liabilities

$

2,018,983


2,083,690


2,043,453


2,053,873


1,974,373


2,018,983


1,974,373

   Shareholders' equity

$

374,919


368,340


365,870


362,546


357,499


374,919


357,499
















AVERAGE BALANCES















   Loans

$

2,596,828


2,552,070


2,534,729


2,534,364


2,472,489


2,574,573


2,431,487

   Securities

$

340,990


348,431


346,318


339,125


338,045


344,690


338,787

   Other interest-earning assets

$

63,336


123,633


138,095


116,851


46,250


93,318


53,771

   Total earning assets (before allowance)

$

3,001,154


3,024,134


3,019,142


2,990,340


2,856,784


3,012,581


2,824,045

   Total assets

$

3,232,038


3,249,794


3,248,828


3,220,053


3,081,542


3,240,867


3,049,385

   Noninterest-bearing deposits

$

848,650


805,214


849,751


805,650


785,705


827,052


775,922

   Interest-bearing deposits

$

1,635,755


1,690,135


1,635,727


1,648,235


1,531,399


1,662,795


1,536,709

   Total deposits

$

2,484,405


2,495,349


2,485,478


2,453,885


2,317,104


2,489,847


2,312,631

   Total borrowed funds

$

365,124


376,890


384,168


393,910


400,508


370,975


376,694

   Total interest-bearing liabilities

$

2,000,879


2,067,025


2,019,895


2,042,145


1,931,907


2,033,770


1,913,403

   Shareholders' equity

$

369,787


365,521


363,823


359,131


351,216


367,666


347,302

 

Cision View original content:http://www.prnewswire.com/news-releases/mercantile-bank-corporation-reports-strong-second-quarter-2018-results-300681694.html

SOURCE Mercantile Bank Corporation

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