Attached files
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| 8-K - FORM 8-K - MERCANTILE BANK CORP | mbwm20170417_8k.htm |
Exhibit 99.1
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Mercantile Bank Corporation Reports Strong First Quarter 2017 Results
Continued strength in profitability and loan originations highlight quarter
GRAND RAPIDS, Mich., April 18, 2017 – Mercantile Bank Corporation (NASDAQ: MBWM) ("Mercantile") reported net income of $7.6 million, or $0.46 per diluted share, for the first quarter of 2017, compared with net income of $8.5 million, or $0.52 per diluted share, for the respective prior-year period. A bank owned life insurance claim during the first quarter of 2017 increased reported net income by approximately $1.1 million, or $0.06 per diluted share, while the repurchase of $11.0 million in trust preferred securities at a 27 percent discount during the first quarter of 2016 increased reported net income by approximately $1.8 million, or $0.11 per diluted share.
The first quarter was highlighted by:
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Robust earnings performance and strong capital position |
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Solid net interest margin |
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Growth in fee income, most notably mortgage banking activity income |
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Lower overhead costs |
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Strong asset quality, as depicted by low levels of nonperforming assets and loans in the 30- to 89-days delinquent category |
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Annualized loan growth of approximately 11 percent |
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New commercial term loan originations of approximately $130 million |
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Sustained strength in the commercial loan pipeline |
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Expansion of operating area into Southeast Michigan |
“We are very excited to begin 2017 with a healthy quarter that reflects sustained strength in profitability and loan originations,” said Robert B. Kaminski, Jr., President and Chief Executive Officer of Mercantile. “Our strong financial performance reflects a sound net interest margin, increased fee income, and reduced overhead costs. We are pleased with the net loan growth that was achieved during the quarter, and based on our current commercial loan pipeline, we are confident that solid loan growth can be realized in future periods.”
Operating Results
Total revenue, which consists of net interest income and noninterest income, was $31.4 million during the first quarter of 2017. Net interest income during the first quarter of 2017 was $25.5 million, down $0.4 million or 1.4 percent from the first quarter of 2016, primarily reflecting a decreased net interest margin and the first quarter of 2017 having one less calendar day than the previous year’s first quarter, which more than offset a higher level of earning assets.
The net interest margin was 3.73 percent in the first quarter of 2017, up slightly from 3.72 percent in the fourth quarter of 2016 and down from 3.92 percent in the prior-year first quarter. The net interest margin during the current-year first quarter and the linked quarter were virtually the same in light of a relatively stable yield on average earning assets and cost of funds. The yield on average earning assets during the first quarter of 2017 was negatively impacted by a decreased yield on loans, reflecting the ongoing low interest rate environment, competitive pressures, and a lower level of purchased loan discount accretion; however, the negative impact of the lower loan yield was substantially offset by the positive impact of a change in earning asset mix, resulting in the relatively steady yield on average earning assets. The change in earning asset mix primarily reflects loan growth and a reduction in interest-earning deposit balances. Higher-yielding average loans represented 85.6 percent of average earning assets during the first quarter of 2017, up from 83.6 percent during the linked quarter, while lower-yielding average interest-earning deposit balances represented 2.2 percent of average earning assets during the current-year first quarter, down from 4.5 percent during the linked quarter. The decline in the net interest margin in the first quarter of 2017 compared to the respective 2016 period primarily resulted from a decreased yield on loans, reflecting the aforementioned factors. The negative impact of these factors was somewhat mitigated by increased rates on certain variable-rate loans stemming from the Federal Open Market Committee (“FOMC”) raising the targeted federal funds rate by 25 basis points in December of 2016 and again in March of 2017.
Net interest income and the net interest margin during the first quarter of 2017 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 $0.8 million and $1.3 million were recorded during the first quarters of 2017 and 2016, 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 a $0.6 million provision for loan losses during both the first quarter of 2017 and the first quarter of 2016. The provision expense recorded during the periods primarily reflects ongoing loan growth.
Noninterest income during the first quarter of 2017 was $5.9 million. Noninterest income during the first quarter of 2017 included a bank owned life insurance claim of $1.4 million, while noninterest income during the first quarter of 2016 included a $2.9 million gain associated with a trust preferred securities repurchase transaction; excluding these transactions, noninterest income increased $0.3 million or 6.3 percent in the current-year first quarter compared to the prior-year first quarter. The increase in core noninterest income primarily reflects higher mortgage banking income resulting from the positive impact of strategic initiatives that were implemented in the latter half of 2016, including the hiring of additional loan originators, introduction of new and enhanced products, loan programs, and increased marketing efforts.
Noninterest expense totaled $19.8 million during the first quarter of 2017, down $0.1 million or 0.5 percent from the respective 2016 period primarily due to cost savings associated with the cost efficiency program that was announced in the latter part of 2015 and lower Federal Deposit Insurance Corporation (“FDIC”) premiums, which more than offset higher salary and benefit costs. The quarterly cost savings related to the cost efficiency program, which saves us approximately $2.7 million per year on a pre-tax basis, were fully realized starting in the second quarter of 2016. FDIC insurance premiums totaled $0.2 million during the first quarter of 2017, down $0.2 million or 46.4 percent from the prior-year first quarter mainly due to changes to the deposit insurance assessment calculation that became effective in the third quarter of 2016. Salary and benefit costs totaled $11.3 million during the current-year first quarter, up $0.3 million or 2.5 percent from the prior-year first quarter primarily due to employee merit pay increases and higher stock-based compensation expense.
Mr. Kaminski continued: “We are pleased with the stability and level of our net interest margin. Although our loan yield continues to be negatively impacted by the ongoing low interest rate environment and competitive pressures, we have remained steadfast in our efforts to price loans properly to ensure an appropriate balance between risk and yield. Our net interest income benefitted from the FOMC’s rate hikes in December of 2016 and March of 2017, and based on the positioning of our balance sheet, we expect any additional rate hikes to further enhance our net interest income. We are also delighted to report increased fee income and lower overhead costs, reflecting the successful implementation of strategic initiatives. Mortgage banking activity income during the first quarter of 2017 nearly doubled compared to the respective prior-year period as a result of our efforts to increase our market presence through product revamping, the hiring of additional originators, and enhanced marketing.”
Balance Sheet
As of March 31, 2017, total assets were $3.02 billion, down $63.7 million or 2.1 percent from December 31, 2016. Interest-earning deposit balances decreased $121 million or 90.5 percent, while total loans increased $62.7 million or 2.6 percent, over the same time period. Interest-earning deposit balances declined as a result of these funds being used to meet loan funding requirements, as well as deposit withdrawals stemming from certain commercial customers making tax payments. A majority of the loan growth occurred during the last few weeks of the quarter. During the twelve months ended March 31, 2017, total loans were up nearly $146 million or 6.3 percent. Approximately $130 million in commercial term loans to new and existing borrowers were originated during the first quarter of 2017, as ongoing sales and relationship building efforts resulted in increased lending opportunities. As of March 31, 2017, unfunded commitments on commercial construction and development loans totaled approximately $83 million, which are expected to be largely funded over the next 12 to 18 months.
Raymond Reitsma, President of Mercantile Bank, noted: “We are very happy with the net loan growth and level of commercial term loan originations achieved during the first quarter of 2017. Commercial term loan originations of $130 million during the quarter were up in comparison to originations in the linked quarter and prior-year first quarter as our lenders continue to foster new relationships and meet the credit needs of existing customers in our markets. In addition, we are pleased with the loan prospects arising from our recent expansion into Southeast Michigan. Based on our current commercial loan pipeline, we are confident that loan originations will remain strong in future periods. We also realized nearly $11 million of growth in the residential mortgage loan portfolio during the quarter, reflecting the success of recently-implemented strategic initiatives that were designed to increase our market penetration.”
Commercial-related real estate loans continue to comprise a majority of Mercantile’s loan portfolio, representing approximately 56 percent of total loans as of March 31, 2017. Non-owner occupied commercial real estate (“CRE”) loans and owner-occupied CRE loans equaled 31 percent and 19 percent of total loans, respectively, as of March 31, 2017. Commercial and industrial loans represented 31 percent of total loans as of March 31, 2017.
As of March 31, 2017, total deposits were $2.28 billion, down $97.0 million from December 31, 2016, and up $12.9 million from March 31, 2016. Local deposits were down $65.8 million since year-end 2016, but up $71.5 million over the past twelve months. The reduction in local deposits was mainly due to certain commercial customers making tax payments, while the growth in deposits was primarily driven by new commercial loan relationships. Wholesale funds were $250 million, or approximately 10 percent of total funds, as of March 31, 2017, compared to $251 million as of December 31, 2016 and $202 million as of March 31, 2016.
Asset Quality
Nonperforming assets at March 31, 2017 were $7.8 million, or 0.3 percent of total assets, compared to $6.4 million, or 0.2 percent of total assets, as of December 31, 2016. The level of past due loans remains nominal, and loan relationships on the internal watch list have generally remained steady. Net loan charge-offs were $0.3 million during the first quarter of 2017 compared with net loan charge-offs of $0.2 million and less than $0.1 million in the linked and prior-year first quarters, respectively.
Capital Position
Shareholders’ equity totaled $348 million as of March 31, 2017, an increase of $7.2 million from year-end 2016. The Bank’s capital position remains above “well-capitalized” with a total risk-based capital ratio of 13.0 percent as of March 31, 2017, compared to 13.1 percent at December 31, 2016. At March 31, 2017, the Bank had approximately $81 million in excess of the 10.0 percent minimum regulatory threshold required to be considered a “well-capitalized” institution. Mercantile reported 16,469,108 total shares outstanding at March 31, 2017.
No shares were repurchased during the first quarter of 2017 as part of the $20 million stock repurchase program that was announced in January of 2015. Since the program’s inception, Mercantile has repurchased approximately 956,000 shares, or nearly 6 percent of total shares outstanding at year-end 2014, for $19.5 million, or a weighted average all-in cost per share of $20.38. Future share repurchases totaling $15.5 million can be made under the program, which was expanded by $15 million in early 2016.
Mr. Kaminski concluded: “Based on our first quarter results, we are confident that Mercantile is poised to deliver strong financial performance during 2017 and beyond. Our strong balance sheet and capital base position us to meet growth objectives and enhance shareholder value. We continue to gain new customers in our market areas by focusing on building and developing value-added relationships and delivering a wide array of products and services. We are excited about the opportunities that await us in Southeast Michigan as we employ the same community banking philosophy that has been successful in our other markets. Our ongoing cash dividend program, which has consistently provided shareholders with a competitive dividend yield, exemplifies our commitment to increasing shareholder value.”
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 $3.0 billion and operates 49 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:
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Robert B. Kaminski, Jr. |
Charles Christmas |
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President & CEO |
Executive Vice President & CFO |
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616-726-1502 |
616-726-1202 |
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rkaminski@mercbank.com |
cchristmas@mercbank.com |
Mercantile Bank Corporation
First Quarter 2017 Results
MERCANTILE BANK CORPORATION
CONSOLIDATED BALANCE SHEETS
(Unaudited)
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MARCH 31, |
DECEMBER 31, |
MARCH 31, |
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2017 |
2016 |
2016 |
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ASSETS |
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Cash and due from banks |
$ | 40,313,000 | $ | 50,200,000 | $ | 38,367,000 | ||||||
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Interest-earning deposits |
12,663,000 | 133,396,000 | 62,814,000 | |||||||||
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Total cash and cash equivalents |
52,976,000 | 183,596,000 | 101,181,000 | |||||||||
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Securities available for sale |
332,441,000 | 328,060,000 | 343,805,000 | |||||||||
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Federal Home Loan Bank stock |
9,236,000 | 8,026,000 | 7,567,000 | |||||||||
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Loans |
2,441,314,000 | 2,378,620,000 | 2,295,668,000 | |||||||||
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Allowance for loan losses |
(18,276,000 | ) | (17,961,000 | ) | (16,262,000 | ) | ||||||
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Loans, net |
2,423,038,000 | 2,360,659,000 | 2,279,406,000 | |||||||||
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Premises and equipment, net |
45,848,000 | 45,456,000 | 45,963,000 | |||||||||
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Bank owned life insurance |
66,211,000 | 67,198,000 | 59,248,000 | |||||||||
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Goodwill |
49,473,000 | 49,473,000 | 49,473,000 | |||||||||
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Core deposit intangible |
9,321,000 | 9,957,000 | 11,916,000 | |||||||||
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Other assets |
30,375,000 | 30,146,000 | 27,497,000 | |||||||||
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Total assets |
$ | 3,018,919,000 | $ | 3,082,571,000 | $ | 2,926,056,000 | ||||||
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LIABILITIES AND SHAREHOLDERS' EQUITY |
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Deposits: |
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Noninterest-bearing |
$ | 757,706,000 | $ | 810,600,000 | $ | 678,100,000 | ||||||
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Interest-bearing |
1,520,310,000 | 1,564,385,000 | 1,587,022,000 | |||||||||
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Total deposits |
2,278,016,000 | 2,374,985,000 | 2,265,122,000 | |||||||||
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Securities sold under agreements to repurchase |
126,679,000 | 131,710,000 | 162,312,000 | |||||||||
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Federal Home Loan Bank advances |
205,000,000 | 175,000,000 | 98,000,000 | |||||||||
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Subordinated debentures |
45,006,000 | 44,835,000 | 44,324,000 | |||||||||
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Accrued interest and other liabilities |
16,168,000 | 15,230,000 | 17,745,000 | |||||||||
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Total liabilities |
2,670,869,000 | 2,741,760,000 | 2,587,503,000 | |||||||||
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SHAREHOLDERS' EQUITY |
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Common stock |
307,371,000 | 305,488,000 | 302,360,000 | |||||||||
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Retained earnings |
45,596,000 | 40,904,000 | 33,697,000 | |||||||||
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Accumulated other comprehensive income/(loss) |
(4,917,000 | ) | (5,581,000 | ) | 2,496,000 | |||||||
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Total shareholders' equity |
348,050,000 | 340,811,000 | 338,553,000 | |||||||||
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Total liabilities and shareholders' equity |
$ | 3,018,919,000 | $ | 3,082,571,000 | $ | 2,926,056,000 | ||||||
Mercantile Bank Corporation
First Quarter 2017 Results
MERCANTILE BANK CORPORATION
CONSOLIDATED REPORTS OF INCOME
(Unaudited)
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THREE MONTHS ENDED |
THREE MONTHS ENDED |
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March 31, 2017 |
March 31, 2016 |
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INTEREST INCOME |
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Loans, including fees |
$ | 26,733,000 | $ | 26,779,000 | ||||
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Investment securities |
1,828,000 | 2,053,000 | ||||||
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Other interest-earning assets |
143,000 | 57,000 | ||||||
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Total interest income |
28,704,000 | 28,889,000 | ||||||
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INTEREST EXPENSE |
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Deposits |
1,868,000 | 1,866,000 | ||||||
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Short-term borrowings |
51,000 | 44,000 | ||||||
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Federal Home Loan Bank advances |
655,000 | 350,000 | ||||||
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Other borrowed money |
621,000 | 747,000 | ||||||
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Total interest expense |
3,195,000 | 3,007,000 | ||||||
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Net interest income |
25,509,000 | 25,882,000 | ||||||
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Provision for loan losses |
600,000 | 600,000 | ||||||
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Net interest income after provision for loan losses |
24,909,000 | 25,282,000 | ||||||
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NONINTEREST INCOME |
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Service charges on accounts |
1,018,000 | 948,000 | ||||||
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Credit and debit card income |
1,106,000 | 1,015,000 | ||||||
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Mortgage banking income |
1,123,000 | 598,000 | ||||||
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Earnings on bank owned life insurance |
1,738,000 | 286,000 | ||||||
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Other income |
866,000 | 4,239,000 | ||||||
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Total noninterest income |
5,851,000 | 7,086,000 | ||||||
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NONINTEREST EXPENSE |
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Salaries and benefits |
11,272,000 | 10,995,000 | ||||||
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Occupancy |
1,554,000 | 1,604,000 | ||||||
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Furniture and equipment |
535,000 | 525,000 | ||||||
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Data processing costs |
2,011,000 | 1,992,000 | ||||||
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FDIC insurance costs |
210,000 | 392,000 | ||||||
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Other expense |
4,194,000 | 4,360,000 | ||||||
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Total noninterest expense |
19,776,000 | 19,868,000 | ||||||
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Income before federal income tax expense |
10,984,000 | 12,500,000 | ||||||
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Federal income tax expense |
3,369,000 | 3,951,000 | ||||||
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Net Income |
$ | 7,615,000 | $ | 8,549,000 | ||||
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Basic earnings per share |
$ | 0.46 | $ | 0.52 | ||||
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Diluted earnings per share |
$ | 0.46 | $ | 0.52 | ||||
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Average basic shares outstanding |
16,434,647 | 16,291,654 | ||||||
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Average diluted shares outstanding |
16,449,210 | 16,325,475 | ||||||
Mercantile Bank Corporation
First Quarter 2017 Results
MERCANTILE BANK CORPORATION
CONSOLIDATED FINANCIAL HIGHLIGHTS
(Unaudited)
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Quarterly |
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(dollars in thousands except per share data) |
2017 |
2016 |
2016 |
2016 |
2016 |
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1st Qtr |
4th Qtr |
3rd Qtr |
2nd Qtr |
1st Qtr |
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EARNINGS |
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Net interest income |
$ | 25,509 | 26,435 | 26,450 | 27,100 | 25,882 | ||||||||||||||
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Provision for loan losses |
$ | 600 | 600 | 600 | 1,100 | 600 | ||||||||||||||
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Noninterest income |
$ | 5,851 | 4,604 | 5,284 | 4,064 | 7,086 | ||||||||||||||
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Noninterest expense |
$ | 19,776 | 18,394 | 19,663 | 19,193 | 19,868 | ||||||||||||||
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Net income before federal income tax expense |
$ | 10,984 | 12,045 | 11,471 | 10,871 | 12,500 | ||||||||||||||
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Net income |
$ | 7,615 | 8,085 | 7,845 | 7,434 | 8,549 | ||||||||||||||
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Basic earnings per share |
$ | 0.46 | 0.49 | 0.48 | 0.46 | 0.52 | ||||||||||||||
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Diluted earnings per share |
$ | 0.46 | 0.49 | 0.48 | 0.46 | 0.52 | ||||||||||||||
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Average basic shares outstanding |
16,434,647 | 16,352,359 | 16,282,804 | 16,240,966 | 16,291,654 | |||||||||||||||
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Average diluted shares outstanding |
16,449,210 | 16,374,117 | 16,307,350 | 16,268,839 | 16,325,475 | |||||||||||||||
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PERFORMANCE RATIOS |
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Return on average assets |
1.02 | % | 1.05 | % | 1.02 | % | 1.01 | % | 1.19 | % | ||||||||||
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Return on average equity |
8.99 | % | 9.35 | % | 9.00 | % | 8.79 | % | 10.18 | % | ||||||||||
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Net interest margin (fully tax-equivalent) |
3.73 | % | 3.72 | % | 3.76 | % | 4.01 | % | 3.92 | % | ||||||||||
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Efficiency ratio |
63.06 | % | 59.26 | % | 61.96 | % | 61.59 | % | 60.26 | % | ||||||||||
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Full-time equivalent employees |
617 | 616 | 612 | 633 | 612 | |||||||||||||||
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YIELD ON ASSETS / COST OF FUNDS |
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Yield on loans |
4.54 | % | 4.65 | % | 4.57 | % | 4.60 | % | 4.72 | % | ||||||||||
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Yield on securities |
2.35 | % | 2.27 | % | 2.71 | % | 3.99 | % | 2.52 | % | ||||||||||
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Yield on other interest-earning assets |
0.81 | % | 0.51 | % | 0.51 | % | 0.51 | % | 0.54 | % | ||||||||||
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Yield on total earning assets |
4.20 | % | 4.18 | % | 4.22 | % | 4.45 | % | 4.37 | % | ||||||||||
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Yield on total assets |
3.88 | % | 3.87 | % | 3.90 | % | 4.12 | % | 4.03 | % | ||||||||||
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Cost of deposits |
0.33 | % | 0.33 | % | 0.33 | % | 0.32 | % | 0.33 | % | ||||||||||
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Cost of borrowed funds |
1.53 | % | 1.45 | % | 1.41 | % | 1.42 | % | 1.53 | % | ||||||||||
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Cost of interest-bearing liabilities |
0.68 | % | 0.68 | % | 0.66 | % | 0.64 | % | 0.64 | % | ||||||||||
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Cost of funds (total earning assets) |
0.47 | % | 0.46 | % | 0.46 | % | 0.44 | % | 0.45 | % | ||||||||||
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Cost of funds (total assets) |
0.43 | % | 0.42 | % | 0.42 | % | 0.41 | % | 0.42 | % | ||||||||||
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PURCHASE ACCOUNTING ADJUSTMENTS |
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Loan portfolio - increase interest income |
$ | 832 | 1,672 | 1,002 | 935 | 1,316 | ||||||||||||||
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Trust preferred - increase interest expense |
$ | 171 | 171 | 171 | 171 | 171 | ||||||||||||||
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Core deposit intangible - increase overhead |
$ | 636 | 636 | 636 | 688 | 715 | ||||||||||||||
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MORTGAGE BANKING ACTIVITY |
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Total mortgage loans originated |
$ | 38,365 | 46,727 | 52,340 | 39,559 | 24,446 | ||||||||||||||
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Purchase mortgage loans originated |
$ | 21,523 | 21,962 | 25,542 | 21,995 | 8,752 | ||||||||||||||
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Refinance mortgage loans originated |
$ | 16,842 | 24,765 | 26,798 | 17,564 | 15,694 | ||||||||||||||
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Total mortgage loans sold |
$ | 18,463 | 30,081 | 35,826 | 26,229 | 18,922 | ||||||||||||||
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Net gain on sale of mortgage loans |
$ | 867 | 1,236 | 1,173 | 746 | 543 | ||||||||||||||
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CAPITAL |
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Tangible equity to tangible assets |
9.77 | % | 9.31 | % | 9.63 | % | 9.66 | % | 9.68 | % | ||||||||||
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Tier 1 leverage capital ratio |
11.53 | % | 11.17 | % | 11.28 | % | 11.41 | % | 11.43 | % | ||||||||||
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Common equity risk-based capital ratio |
10.83 | % | 10.88 | % | 10.83 | % | 10.73 | % | 10.86 | % | ||||||||||
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Tier 1 risk-based capital ratio |
12.39 | % | 12.47 | % | 12.40 | % | 12.31 | % | 12.49 | % | ||||||||||
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Total risk-based capital ratio |
13.05 | % | 13.13 | % | 13.05 | % | 12.95 | % | 13.12 | % | ||||||||||
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Tier 1 capital |
$ | 341,708 | 336,316 | 337,054 | 330,710 | 324,296 | ||||||||||||||
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Tier 1 plus tier 2 capital |
$ | 359,984 | 354,278 | 354,580 | 347,819 | 340,557 | ||||||||||||||
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Total risk-weighted assets |
$ | 2,757,616 | 2,697,727 | 2,718,012 | 2,685,823 | 2,596,517 | ||||||||||||||
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Book value per common share |
$ | 21.13 | 20.76 | 21.44 | 21.18 | 20.86 | ||||||||||||||
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Tangible book value per common share |
$ | 17.56 | 17.14 | 17.76 | 17.45 | 17.07 | ||||||||||||||
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Cash dividend per common share |
$ | 0.18 | 0.67 | 0.17 | 0.16 | 0.16 | ||||||||||||||
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ASSET QUALITY |
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Gross loan charge-offs |
$ | 456 | 970 | 363 | 397 | 475 | ||||||||||||||
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Recoveries |
$ | 171 | 805 | 179 | 145 | 456 | ||||||||||||||
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Net loan charge-offs (recoveries) |
$ | 285 | 165 | 184 | 252 | 19 | ||||||||||||||
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Net loan charge-offs (recoveries) to average loans |
0.05 | % | 0.03 | % | 0.03 | % | 0.04 | % |
< 0.01% |
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Allowance for loan losses |
$ | 18,276 | 17,961 | 17,526 | 17,110 | 16,262 | ||||||||||||||
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Allowance to originated loans |
0.92 | % | 0.95 | % | 0.93 | % | 0.94 | % | 0.94 | % | ||||||||||
|
Nonperforming loans |
$ | 7,292 | 5,939 | 4,669 | 5,168 | 4,842 | ||||||||||||||
|
Other real estate/repossessed assets |
$ | 495 | 469 | 790 | 815 | 1,478 | ||||||||||||||
|
Nonperforming loans to total loans |
0.30 | % | 0.25 | % | 0.19 | % | 0.22 | % | 0.21 | % | ||||||||||
|
Nonperforming assets to total assets |
0.26 | % | 0.21 | % | 0.18 | % | 0.20 | % | 0.22 | % | ||||||||||
|
NONPERFORMING ASSETS - COMPOSITION |
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|
Residential real estate: |
||||||||||||||||||||
|
Land development |
$ | 0 | 16 | 23 | 42 | 30 | ||||||||||||||
|
Construction |
$ | 0 | 0 | 0 | 319 | 0 | ||||||||||||||
|
Owner occupied / rental |
$ | 2,972 | 2,883 | 2,945 | 2,893 | 2,955 | ||||||||||||||
|
Commercial real estate: |
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|
Land development |
$ | 80 | 95 | 110 | 125 | 140 | ||||||||||||||
|
Construction |
$ | 0 | 0 | 0 | 0 | 0 | ||||||||||||||
|
Owner occupied |
$ | 1,221 | 610 | 1,597 | 2,263 | 2,877 | ||||||||||||||
|
Non-owner occupied |
$ | 421 | 488 | 691 | 134 | 151 | ||||||||||||||
|
Non-real estate: |
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|
Commercial assets |
$ | 3,076 | 2,293 | 65 | 165 | 137 | ||||||||||||||
|
Consumer assets |
$ | 17 | 23 | 28 | 42 | 30 | ||||||||||||||
|
Total nonperforming assets |
$ | 7,787 | 6,408 | 5,459 | 5,983 | 6,320 | ||||||||||||||
|
NONPERFORMING ASSETS - RECON |
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|
Beginning balance |
$ | 6,408 | 5,459 | 5,983 | 6,320 | 6,737 | ||||||||||||||
|
Additions - originated loans & former branches |
$ | 2,987 | 2,953 | 1,172 | 1,096 | 1,123 | ||||||||||||||
|
Merger-related activity |
$ | 0 | 33 | 0 | 0 | 0 | ||||||||||||||
|
Return to performing status |
$ | (113 | ) | (13 | ) | 0 | 0 | 0 | ||||||||||||
|
Principal payments |
$ | (1,289 | ) | (1,386 | ) | (1,509 | ) | (495 | ) | (774 | ) | |||||||||
|
Sale proceeds |
$ | (56 | ) | (308 | ) | (76 | ) | (642 | ) | (402 | ) | |||||||||
|
Loan charge-offs |
$ | (135 | ) | (263 | ) | (101 | ) | (261 | ) | (356 | ) | |||||||||
|
Valuation write-downs |
$ | (15 | ) | (67 | ) | (10 | ) | (35 | ) | (8 | ) | |||||||||
|
Ending balance |
$ | 7,787 | 6,408 | 5,459 | 5,983 | 6,320 | ||||||||||||||
|
LOAN PORTFOLIO COMPOSITION |
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|
Commercial: |
||||||||||||||||||||
|
Commercial & industrial |
$ | 757,219 | 713,903 | 750,330 | 750,136 | 714,612 | ||||||||||||||
|
Land development & construction |
$ | 31,924 | 34,828 | 37,455 | 40,529 | 39,630 | ||||||||||||||
|
Owner occupied comm'l R/E |
$ | 452,382 | 450,464 | 440,705 | 438,798 | 441,662 | ||||||||||||||
|
Non-owner occupied comm'l R/E |
$ | 768,565 | 748,269 | 741,443 | 716,930 | 666,013 | ||||||||||||||
|
Multi-family & residential rental |
$ | 113,257 | 117,883 | 118,103 | 113,361 | 112,533 | ||||||||||||||
|
Total commercial |
$ | 2,123,347 | 2,065,347 | 2,088,036 | 2,059,754 | 1,974,450 | ||||||||||||||
|
Retail: |
||||||||||||||||||||
|
1-4 family mortgages |
$ | 205,850 | 195,226 | 190,715 | 189,119 | 185,535 | ||||||||||||||
|
Home equity & other consumer |
$ | 112,117 | 118,047 | 127,626 | 131,067 | 135,683 | ||||||||||||||
|
Total retail |
$ | 317,967 | 313,273 | 318,341 | 320,186 | 321,218 | ||||||||||||||
|
Total loans |
$ | 2,441,314 | 2,378,620 | 2,406,377 | 2,379,940 | 2,295,668 | ||||||||||||||
|
END OF PERIOD BALANCES |
||||||||||||||||||||
|
Loans |
$ | 2,441,314 | 2,378,620 | 2,406,377 | 2,379,940 | 2,295,668 | ||||||||||||||
|
Securities |
$ | 341,677 | 336,086 | 333,469 | 331,478 | 351,372 | ||||||||||||||
|
Other interest-earning assets |
$ | 12,663 | 133,396 | 85,848 | 46,896 | 62,814 | ||||||||||||||
|
Total earning assets (before allowance) |
$ | 2,795,654 | 2,848,102 | 2,825,694 | 2,758,314 | 2,709,854 | ||||||||||||||
|
Total assets |
$ | 3,018,919 | 3,082,571 | 3,063,964 | 2,999,936 | 2,926,056 | ||||||||||||||
|
Noninterest-bearing deposits |
$ | 757,706 | 810,600 | 731,663 | 733,573 | 678,100 | ||||||||||||||
|
Interest-bearing deposits |
$ | 1,520,310 | 1,564,385 | 1,597,774 | 1,546,145 | 1,587,022 | ||||||||||||||
|
Total deposits |
$ | 2,278,016 | 2,374,985 | 2,329,437 | 2,279,718 | 2,265,122 | ||||||||||||||
|
Total borrowed funds |
$ | 380,009 | 354,902 | 372,917 | 362,665 | 308,148 | ||||||||||||||
|
Total interest-bearing liabilities |
$ | 1,900,319 | 1,919,287 | 1,970,691 | 1,908,810 | 1,895,170 | ||||||||||||||
|
Shareholders' equity |
$ | 348,050 | 340,811 | 349,471 | 344,577 | 338,553 | ||||||||||||||
|
AVERAGE BALANCES |
||||||||||||||||||||
|
Loans |
$ | 2,390,030 | 2,372,510 | 2,391,620 | 2,342,333 | 2,273,960 | ||||||||||||||
|
Securities |
$ | 339,537 | 336,493 | 328,993 | 340,866 | 354,499 | ||||||||||||||
|
Other interest-earning assets |
$ | 61,376 | 127,790 | 91,590 | 49,365 | 42,008 | ||||||||||||||
|
Total earning assets (before allowance) |
$ | 2,790,943 | 2,836,793 | 2,812,203 | 2,732,564 | 2,670,467 | ||||||||||||||
|
Total assets |
$ | 3,016,871 | 3,064,974 | 3,040,324 | 2,952,184 | 2,892,229 | ||||||||||||||
|
Noninterest-bearing deposits |
$ | 766,031 | 773,137 | 733,600 | 702,293 | 652,338 | ||||||||||||||
|
Interest-bearing deposits |
$ | 1,542,078 | 1,561,539 | 1,572,424 | 1,548,509 | 1,588,930 | ||||||||||||||
|
Total deposits |
$ | 2,308,109 | 2,334,676 | 2,306,024 | 2,250,802 | 2,241,268 | ||||||||||||||
|
Total borrowed funds |
$ | 352,614 | 366,905 | 373,973 | 347,191 | 299,956 | ||||||||||||||
|
Total interest-bearing liabilities |
$ | 1,894,692 | 1,928,444 | 1,946,397 | 1,895,700 | 1,888,886 | ||||||||||||||
|
Shareholders' equity |
$ | 343,344 | 343,122 | 345,944 | 339,357 | 336,870 | ||||||||||||||