GRAND RAPIDS, Mich., Jan. 21, 2020 /PRNewswire/ -- Mercantile Bank Corporation (NASDAQ: MBWM) ("Mercantile") reported net income of $13.3 million, or $0.81 per diluted share, for the fourth quarter of 2019, compared with net income of $11.6 million, or $0.70 per diluted share, for the respective prior-year period.  For the full year 2019, Mercantile reported net income of $49.5 million, or $3.01 per diluted share, compared with net income of $42.0 million, or $2.53 per diluted share, for the full year 2018.

Net gains and losses on sales and write-downs of former branch facilities decreased reported net income during the fourth quarter of 2019 by approximately $0.3 million, or $0.02 per diluted share.  Interest income related to purchased loan accounting entries increased net income during the fourth quarter of 2019 by $0.2 million, or $0.01 per diluted share, and net income during the fourth quarter of 2018 by $0.5 million, or $0.03 per diluted share.  Excluding the impacts of these transactions, diluted earnings per share increased $0.15, or 22.4 percent, during the fourth quarter of 2019 compared to the respective 2018 period.

Bank owned life insurance claims and the net impact of gains and losses on sales and write-downs of former branch facilities increased reported net income during 2019 by approximately $2.7 million, or $0.16 per diluted share.  Interest income related to purchased loan accounting entries increased net income during 2019 by $1.1 million, or $0.07 per diluted share, and net income during 2018 by $3.2 million, or $0.19 per diluted share.  Excluding the impacts of these transactions, diluted earnings per share increased $0.44, or 18.8 percent, during 2019 compared to 2018.

Fourth quarter and full year highlights include:

  • Strong earnings and capital position
  • Solid growth in key fee income categories
  • Controlled overhead costs
  • Strong asset quality
  • Net loan growth of $104 million, or nearly 4 percent, during the full year
  • Sustained strength in commercial and residential mortgage loan pipelines
  • Announced first quarter 2020 regular cash dividend of $0.28 per common share, an increase of 3.7 percent from the regular cash dividend paid during the fourth quarter of 2019

"We are very pleased to report another year of strong operating performance," said Robert B. Kaminski, Jr., President and Chief Executive Officer of Mercantile.  "Our robust financial results during 2019 reflect continued growth in the loan portfolio, increases in certain noninterest income revenue streams, controlled overhead costs, and sound asset quality.  Based on our strong capital position and healthy commercial loan and residential mortgage loan pipelines and prospects, we believe that the solid financial performance achieved during 2019 will continue in future periods."

Operating Results

Total revenue, which consists of net interest income and noninterest income, was $38.5 million during the fourth quarter of 2019, up $2.3 million, or 6.3 percent, from the prior-year fourth quarter.  Reflecting a higher level of earning assets, net interest income of $31.2 million during the fourth quarter of 2019 was up $0.4 million, or 1.1 percent, from the fourth quarter of 2018.  Total revenue was $151 million during the full year 2019, up $12.4 million, or 8.9 percent, from 2018.  Net interest income was $125 million in 2019, up $4.5 million, or 3.7 percent, from the prior year, reflecting an increase in earning assets.

The net interest margin was 3.63 percent in the fourth quarter of 2019.  The yield on average earning assets equaled 4.61 percent during the fourth quarter of 2019, down from 4.80 percent during the respective 2018 period mainly due to a change in earning asset mix and a lower interest rate environment.  Lower-yielding average interest-earning deposit balances represented 5.2 percent of average earning assets during the current-year fourth quarter, up from 1.0 percent during the prior-year fourth quarter.  The elevated level of interest-earning deposits primarily reflected seasonal deposits from municipal customers and several large commercial loan paydowns.  A lower commercial loan yield, primarily reflecting the negative impact of reduced interest rates on variable-rate commercial loans stemming from the Federal Open Market Committee's ("FOMC") lowering of the targeted federal funds rate by 25 basis points in each of July, September, and October 2019, also contributed to the decreased yield on average earning assets.  The cost of funds equaled 0.98 percent during the fourth quarter of 2019, up from 0.82 percent during the prior-year fourth quarter mainly due to a change in funding mix and an increased cost of time deposits.  The change in funding mix primarily reflected increased reliance on more costly wholesale funds during the fourth quarter of 2018 and January 2019, which was necessitated by various funding requirements, including ongoing loan growth and seasonal deposit withdrawals by certain business customers for bonus and tax payments.

The net interest margin was 3.75 percent in 2019.  The yield on average earning assets was 4.77 percent during 2019, up from 4.68 percent during 2018.  The higher yield on average earning assets primarily resulted from an increased yield on commercial loans, which equaled 5.21 percent during 2019 compared to 5.11 percent during 2018.  The increased yield on commercial loans mainly reflected higher interest rates on variable-rate commercial loans resulting from the FOMC raising the targeted federal funds by 25 basis points in each of March, June, September, and December 2018.  The positive impact of these rate increases more than offset the negative impact of decreased interest rates on variable-rate commercial loans stemming from the FOMC lowering the targeted federal funds rate by 25 basis points in each of July, September, and October 2019.  The cost of funds equaled 1.02 percent during 2019, up from 0.72 percent during 2018 primarily due to increased costs of time deposits and borrowed funds and a change in funding mix.  As noted previously, increased reliance on more costly wholesale funds, most of which occurred during the fourth quarter of 2018 and January 2019, was necessitated by various funding requirements.

The collection of certain commercial loan prepayment fees and the recording of accelerated discount accretion on called bonds positively impacted the net interest margin during the fourth quarter of 2019 and full year 2019, while a higher-than-desired level of interest-earning deposits negatively impacted the margin during both periods.  Excluding the impacts of these factors, the net interest margin was 3.53 percent and 3.74 percent during the fourth quarter of 2019 and full year 2019, respectively. 

Net interest income and the net interest margin during the fourth quarters of 2019 and 2018, and full years 2019 and 2018, were affected by purchase accounting accretion and amortization associated with fair value measurements.  Increases in interest income on loans totaling $0.3 million and $0.6 million were recorded during the fourth quarters of 2019 and 2018, respectively, and increases of $1.4 million and $4.0 million were recorded during 2019 and 2018, respectively.   Purchased loan accretion amounts vary from period to period as a result of periodic cash flow re-estimations, loan payoffs, and payment performance.

Mercantile recorded a negative $0.7 million provision for loan losses during the fourth quarter of 2019, primarily reflecting certain commercial loan paydowns and net loan recoveries being recorded during the period.  No provision expense was recorded during the fourth quarter of 2018 as the positive impact of net loan recoveries offset increased reserve allocations necessitated by loan growth and changes in certain loan loss reserve environmental factors.  During 2019, Mercantile recorded a provision for loan losses of $1.8 million, compared to a provision of $1.1 million during 2018.  The provision expense recorded during both 2019 and 2018 mainly reflected ongoing net loan growth; in addition, the provision expense recorded during 2018 depicts increased allocations related to changes in certain environmental factors.  The amount of provision expense necessitated by net loan growth during 2018 was partially mitigated by net loan recoveries being recorded during the period.

Noninterest income during the fourth quarter of 2019 was $7.3 million, which included a $0.3 million gain on the sale of a former branch facility.  Noninterest income during the prior-year fourth quarter was $5.4 million, which included a $0.9 million accounting adjustment related to mortgage banking activities in prior years.  Excluding the aforementioned transactions, noninterest income increased $2.6 million, or 57.9 percent, during the fourth quarter of 2019 compared to the respective 2018 period.  Noninterest income during 2019 was $27.0 million, compared to $19.0 million during 2018.  Noninterest income during 2019 included bank owned life insurance claims totaling $2.6 million and gains on the sales of former branch facilities totaling $0.8 million, while noninterest income during 2018 included the previously-mentioned $0.9 million accounting adjustment associated with mortgage banking activities.  Excluding these transactions, noninterest income increased $5.4 million, or 29.9 percent, during 2019 compared to 2018.  The improved level of noninterest income in both 2019 periods compared to the respective 2018 periods primarily resulted from increased mortgage banking activity income stemming from the success of continuing strategic initiatives designed to increase market presence, along with a higher level of refinance activity resulting from a decrease in residential mortgage loan interest rates and a higher percentage of originated loans being sold.  Growth in credit and debit card income, service charges on accounts, and payroll processing fees also contributed to the improved noninterest income in both 2019 periods.

Noninterest expense totaled $23.3 million during the fourth quarter of 2019, up $1.4 million, or 6.3 percent, from the prior-year fourth quarter.  Noninterest expense during 2019 was $89.3 million, an increase of $3.1 million, or 3.6 percent, from the $86.2 million expensed during 2018.  The higher level of expense in the 2019 periods primarily resulted from increased salary costs, mainly reflecting annual employee merit pay increases and higher mortgage loan originator commissions.  Increased stock-based compensation also contributed to the higher level of noninterest expense in the current-year fourth quarter compared to the respective 2018 period.

"The noteworthy increase in mortgage banking activity income depicts the success of continuing strategic initiatives that were created to enhance market share, an increase in the percentage of originated residential mortgage loans being sold, and a higher level of refinance activity resulting from decreased residential mortgage loan interest rates," continued Mr. Kaminski.  "Based on our current residential mortgage loan pipeline and projections, we believe mortgage banking activity income will be solid during 2020.  We are also pleased with the increases in other key fee income categories.  Our focus on meeting growth objectives in a cost-conscious manner has not wavered."

Balance Sheet

As of December 31, 2019, total assets were $3.63 billion, up $269 million, or 8.0 percent, from December 31, 2018.  Interest-earning deposits and total loans increased $170 million and $104 million, respectively, over the same time period.  The growth in interest-earning deposits mainly stemmed from certain deposit-gathering initiatives, an increase in wholesale funds, and several large commercial loan paydowns.  As of December 31, 2019, unfunded commitments on commercial construction and development loans totaled approximately $105 million, which are expected to be largely funded over the next 12 to 18 months. 

Ray Reitsma, President of Mercantile Bank of Michigan, noted, "We are pleased with the net loan growth and level of new commercial term loan originations during 2019.  Net loan growth during the year depicts increases in both commercial loans and residential mortgage loans.  All commercial loan segments, with the exception of the multi-family and residential rental segment, grew during the year.  The solid growth in commercial loans reflects our lending staff's ongoing focus on identifying new lending opportunities in our markets and meeting the needs of existing customers, while growth in residential mortgage loans depicts the success of various strategic initiatives that were implemented to increase our market presence.  The net growth in the commercial portfolio during 2019 was achieved despite a contraction of nearly $67 million in the portfolio during the fourth quarter stemming from an unusually high level of payoffs.  The payoffs primarily reflected instances in which we remained committed to credit quality and margin preservation, along with a few situations involving larger borrowing relationships that refinanced the underlying real estate with secondary market credit participants that offered long-term, fixed rate non-recourse financing options.  Based on our current loan pipelines and additional lending opportunities conveyed by our commercial lenders, we are confident that we can continue to grow the commercial loan and residential loan portfolios in future periods."

As of December 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 expectations. 

Total deposits at December 31, 2019, were $2.69 billion, up $227 million from December 31, 2018.  Local deposits and brokered deposits were up $206 million and $20.2 million, respectively, during 2019.  The growth in local deposits was mainly driven by a special time deposit campaign that was introduced mid first quarter and ended in early April, along with increases in business money market accounts and noninterest-bearing checking accounts.  The growth in noninterest-bearing checking accounts primarily reflected new commercial loan relationships.  Wholesale funds were $487 million, or approximately 15 percent of total funds, as of December 31, 2019, compared to $474 million, or approximately 16 percent of total funds, as of December 31, 2018.

Asset Quality

Nonperforming assets at December 31, 2019, were $2.7 million, or 0.1 percent of total assets, compared to $5.0 million, or 0.2 percent of total assets, at December 31, 2018.  The level of past due loans remains nominal, and loan relationships on the internal watch list declined in number and dollar volume during 2019.  During the fourth quarter of 2019, loan charge-offs totaled $0.1 million while recoveries of prior period loan charge-offs equaled $0.3 million, providing for net loan recoveries of $0.2 million, or 0.02 percent of average total loans.  During 2019, loan charge-offs totaled $0.9 million while recoveries of prior period loan charge-offs equaled $0.7 million, providing for net loan charge-offs of $0.2 million, or 0.01 percent of average total loans.

Capital Position

Shareholders' equity totaled $417 million as of December 31, 2019, an increase of $41.3 million from year-end 2018.  The Bank's capital position remains above "well-capitalized" with a total risk-based capital ratio of 13.0 percent as of December 31, 2019, compared to 12.3 percent at December 31, 2018.  At December 31, 2019, the Bank had approximately $97 million in excess of the 10.0 percent minimum regulatory threshold required to be considered a "well-capitalized" institution.  Mercantile reported 16,425,136 total shares outstanding at December 31, 2019.

As announced in May 2019, Mercantile instituted a $20 million common stock repurchase program in conjunction with the completion of its existing program that was introduced in January 2015 and later expanded in April 2016.  During 2019, Mercantile repurchased approximately 233,000 shares for $7.2 million, or a weighted average all-in cost per share of $30.79, under the former and new programs on a combined basis.  During the period of January 2015 through December 31, 2019, Mercantile repurchased approximately 1.4 million shares for $32.6 million, or a weighted average all-in cost per share of $23.47, under the former and new programs on a combined basis. 

Mr. Kaminski concluded, "Our strong operating performance during 2019 has positioned us to meet growth objectives and further build shareholder value.  As depicted by our ongoing cash dividend program, including the announcement of an increased first quarter 2020 regular cash dividend earlier today, we remain focused on providing shareholders with a competitive dividend yield and committed to enhancing shareholder value.  Our banking philosophy, which entails developing mutually-beneficial relationships and offering market-leading products and services through efficient delivery channels, has continued to successfully attract new customers and allowed us to retain existing customers.  We are excited about Mercantile's future and look forward to sound financial performance in 2020."

About Mercantile Bank Corporation

Based in Grand Rapids, Michigan, Mercantile Bank Corporation is the bank holding company for Mercantile Bank of Michigan.  Mercantile provides banking services to businesses, individuals and governmental units, and differentiates itself on the basis of service quality and the expertise of its banking staff. Mercantile has assets of approximately $3.6 billion and operates 40 banking offices.  Mercantile Bank Corporation's common stock is listed on the NASDAQ Global Select Market under the symbol "MBWM."

Forward-Looking Statements

This news release contains comments or information that 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







Fourth Quarter 2019 Results







MERCANTILE BANK CORPORATION

CONSOLIDATED BALANCE SHEETS

(Unaudited)










DECEMBER 31,


DECEMBER 31,


DECEMBER 31,



2019


2018


2017

ASSETS







   Cash and due from banks

$

53,262,000

$

64,872,000

$

55,127,000

   Interest-earning deposits


180,469,000


10,482,000


144,974,000

      Total cash and cash equivalents


233,731,000


75,354,000


200,101,000








   Securities available for sale


334,655,000


337,366,000


335,744,000

   Federal Home Loan Bank stock


18,002,000


16,022,000


11,036,000








   Loans


2,856,667,000


2,753,085,000


2,558,552,000

   Allowance for loan losses


(23,889,000)


(22,380,000)


(19,501,000)

      Loans, net


2,832,778,000


2,730,705,000


2,539,051,000








   Premises and equipment, net


57,327,000


48,321,000


46,034,000

   Bank owned life insurance


70,297,000


69,647,000


68,689,000

   Goodwill


49,473,000


49,473,000


49,473,000

   Core deposit intangible, net


3,840,000


5,561,000


7,600,000

   Other assets


32,812,000


31,458,000


28,976,000








      Total assets

$

3,632,915,000

$

3,363,907,000

$

3,286,704,000















LIABILITIES AND SHAREHOLDERS' EQUITY







   Deposits:







      Noninterest-bearing

$

924,916,000

$

889,784,000

$

866,380,000

      Interest-bearing


1,765,468,000


1,573,924,000


1,655,985,000

         Total deposits


2,690,384,000


2,463,708,000


2,522,365,000








   Securities sold under agreements to repurchase


102,675,000


103,519,000


118,748,000

   Federal Home Loan Bank advances


354,000,000


350,000,000


220,000,000

   Subordinated debentures


46,881,000


46,199,000


45,517,000

   Accrued interest and other liabilities


22,414,000


25,232,000


14,204,000

         Total liabilities


3,216,354,000


2,988,658,000


2,920,834,000








SHAREHOLDERS' EQUITY







   Common stock


305,035,000


308,005,000


309,772,000

   Retained earnings


107,831,000


75,483,000


60,132,000

   Accumulated other comprehensive income/(loss)


3,695,000


(8,239,000)


(4,034,000)

      Total shareholders' equity


416,561,000


375,249,000


365,870,000








      Total liabilities and shareholders' equity

$

3,632,915,000

$

3,363,907,000

$

3,286,704,000

 

 

Mercantile Bank Corporation













Fourth Quarter 2019 Results













MERCANTILE BANK CORPORATION

CONSOLIDATED REPORTS OF INCOME

(Unaudited)















THREE MONTHS ENDED

THREE MONTHS ENDED

TWELVE MONTHS ENDED

TWELVE MONTHS ENDED


December 31, 2019

December 31, 2018

December 31, 2019

December 31, 2018

INTEREST INCOME













   Loans, including fees

$

36,257,000


$

34,676,000


$

145,816,000


$

131,763,000


   Investment securities


2,563,000



2,347,000



10,150,000



8,975,000


   Other interest-earning assets


744,000



172,000



2,371,000



1,243,000


      Total interest income


39,564,000



37,195,000



158,337,000



141,981,000















INTEREST EXPENSE













   Deposits


5,358,000



3,949,000



21,264,000



13,869,000


   Short-term borrowings


51,000



92,000



295,000



273,000


   Federal Home Loan Bank advances


2,226,000



1,513,000



8,977,000



4,647,000


   Other borrowed money


761,000



823,000



3,267,000



3,110,000


      Total interest expense


8,396,000



6,377,000



33,803,000



21,899,000















      Net interest income


31,168,000



30,818,000



124,534,000



120,082,000















Provision for loan losses


(700,000)



0



1,750,000



1,100,000















      Net interest income after













         provision for loan losses


31,868,000



30,818,000



122,784,000



118,982,000















NONINTEREST INCOME













   Service charges on accounts


1,178,000



1,099,000



4,584,000



4,358,000


   Credit and debit card income


1,528,000



1,399,000



5,925,000



5,354,000


   Mortgage banking income


3,194,000



994,000



8,485,000



4,109,000


   Payroll services


399,000



335,000



1,626,000



1,462,000


   Earnings on bank owned life insurance

319,000



318,000



3,886,000



1,287,000


   Other income


694,000



1,225,000



2,450,000



2,440,000


      Total noninterest income


7,312,000



5,370,000



26,956,000



19,010,000















NONINTEREST EXPENSE













   Salaries and benefits


13,851,000



12,884,000



53,833,000



50,910,000


   Occupancy


1,972,000



1,662,000



7,061,000



6,711,000


   Furniture and equipment


698,000



681,000



2,583,000



2,470,000


   Data processing costs


2,381,000



2,141,000



9,235,000



8,557,000


   Other expense


4,433,000



4,590,000



16,568,000



17,522,000


      Total noninterest expense


23,335,000



21,958,000



89,280,000



86,170,000















      Income before federal income













         tax expense


15,845,000



14,230,000



60,460,000



51,822,000















Federal income tax expense


2,528,000



2,657,000



11,004,000



9,798,000















      Net Income

$

13,317,000


$

11,573,000


$

49,456,000


$

42,024,000















   Basic earnings per share


$0.81



$0.70



$3.01



$2.53


   Diluted earnings per share


$0.81



$0.70



$3.01



$2.53















   Average basic shares outstanding


16,373,458



16,594,412



16,405,159



16,600,612


   Average diluted shares outstanding


16,375,740



16,600,108



16,409,135



16,606,416


 

 

Mercantile Bank Corporation















Fourth Quarter 2019 Results















MERCANTILE BANK CORPORATION

CONSOLIDATED FINANCIAL HIGHLIGHTS

(Unaudited)


















Quarterly


Year-To-Date

(dollars in thousands except per share data)

2019


2019


2019


2019


2018







4th Qtr


3rd Qtr


2nd Qtr


1st Qtr


4th Qtr


2019


2018

EARNINGS















   Net interest income

$

31,168


31,605


31,116


30,645


30,818


124,534


120,082

   Provision for loan losses

$

(700)


700


900


850


0


1,750


1,100

   Noninterest income

$

7,312


6,676


6,334


6,632


5,370


26,956


19,010

   Noninterest expense

$

23,335


22,027


22,087


21,830


21,958


89,280


86,170

   Net income before federal income















      tax expense

$

15,845


15,554


14,463


14,597


14,230


60,460


51,822

   Net income

$

13,317


12,600


11,715


11,824


11,573


49,456


42,024

   Basic earnings per share

$

0.81


0.77


0.71


0.72


0.70


3.01


2.53

   Diluted earnings per share

$

0.81


0.77


0.71


0.72


0.70


3.01


2.53

   Average basic shares outstanding


16,373,458


16,390,203


16,428,187


16,429,571


16,594,412


16,405,159


16,600,612

   Average diluted shares outstanding


16,375,740


16,393,078


16,434,714


16,435,176


16,600,108


16,409,135


16,606,416
















PERFORMANCE RATIOS















   Return on average assets


1.45%


1.38%


1.33%


1.39%


1.39%


1.39%


1.28%

   Return on average equity


12.87%


12.39%


12.08%


12.75%


12.40%


12.52%


11.33%

   Net interest margin (fully tax-equivalent)

3.63%


3.71%


3.79%


3.88%


3.98%


3.75%


3.96%

   Efficiency ratio


60.64%


57.54%


58.98%


58.56%


60.68%


58.93%


61.95%

   Full-time equivalent employees


619


624


652


631


630


619


630
















YIELD ON ASSETS / COST OF FUNDS















   Yield on loans


5.01%


5.06%


5.18%


5.21%


5.08%


5.11%


5.01%

   Yield on securities


2.90%


2.99%


2.85%


2.82%


2.80%


2.89%


2.69%

   Yield on other interest-earning assets

1.65%


2.15%


2.38%


2.40%


2.20%


2.07%


1.79%

   Yield on total earning assets


4.61%


4.73%


4.85%


4.89%


4.80%


4.77%


4.68%

   Yield on total assets


4.31%


4.42%


4.53%


4.56%


4.46%


4.45%


4.35%

   Cost of deposits


0.79%


0.83%


0.85%


0.77%


0.63%


0.81%


0.56%

   Cost of borrowed funds


2.36%


2.35%


2.40%


2.43%


2.22%


2.39%


2.06%

   Cost of interest-bearing liabilities


1.47%


1.52%


1.55%


1.47%


1.26%


1.50%


1.08%

   Cost of funds (total earning assets)


0.98%


1.02%


1.06%


1.01%


0.82%


1.02%


0.72%

   Cost of funds (total assets)


0.91%


0.95%


0.99%


0.94%


0.76%


0.95%


0.67%
















PURCHASE ACCOUNTING ADJUSTMENTS













   Loan portfolio - increase interest income

$

316


327


569


211


603


1,423


4,037

   Trust preferred - increase interest expense

$

171


171


171


171


171


684


684

   Core deposit intangible - increase overhead

$

397


397


450


477


477


1,721


2,040
















MORTGAGE BANKING ACTIVITY















   Total mortgage loans originated

$

110,611


132,852


80,205


44,932


44,448


368,600


214,246

   Purchase mortgage loans originated

$

49,407


61,839


41,986


29,891


29,729


183,123


143,809

   Refinance mortgage loans originated

$

61,204


71,013


38,219


15,041


14,719


185,477


70,437

   Total mortgage loans sold

$

81,590


104,890


49,396


21,502


21,805


257,378


96,445

   Net gain on sale of mortgage loans

$

3,062


2,886


1,419


698


829


8,065


3,525
















CAPITAL















   Tangible equity to tangible assets


10.15%


9.67%


9.82%


9.41%


9.68%


10.15%


9.68%

   Tier 1 leverage capital ratio


11.28%


11.08%


11.17%


11.16%


11.41%


11.28%


11.41%

   Common equity risk-based capital ratio

11.00%


10.53%


10.47%


10.46%


10.41%


11.00%


10.41%

   Tier 1 risk-based capital ratio


12.36%


11.87%


11.82%


11.84%


11.80%


12.36%


11.80%

   Total risk-based capital ratio


13.09%


12.60%


12.55%


12.56%


12.50%


13.09%


12.50%

   Tier 1 capital

$

405,148


395,010


388,788


379,334


373,721


405,148


373,721

   Tier 1 plus tier 2 capital

$

429,038


419,424


412,841


402,469


396,102


429,038


396,102

   Total risk-weighted assets

$

3,276,754


3,327,723


3,289,958


3,204,295


3,167,655


3,276,754


3,167,655

   Book value per common share

$

25.36


24.93


24.34


23.37


22.70


25.36


22.70

   Tangible book value per common share

$

22.12


21.64


21.05


20.05


19.37


22.12


19.37

   Cash dividend per common share

$

0.27


0.27


0.26


0.26


1.00


1.06


1.68
















ASSET QUALITY















   Gross loan charge-offs

$

112


519


78


174


354


883


1,450

   Recoveries

$

287


180


96


79


1,042


642


3,229

   Net loan charge-offs (recoveries)

$

(175)


339


(18)


95


(688)


241


(1,779)

   Net loan charge-offs to average loans

(0.02%)


0.05%


(0.01%)


0.01%


(0.10%)


0.01%


(0.07%)

   Allowance for loan losses

$

23,889


24,414


24,053


23,135


22,380


23,889


22,380

   Allowance to originated loans


0.89%


0.88%


0.89%


0.89%


0.88%


0.89%


0.88%

   Nonperforming loans

$

2,284


2,644


3,505


4,138


4,141


2,284


4,141

   Other real estate/repossessed assets

$

452


243


446


396


811


452


811

   Nonperforming loans to total loans


0.08%


0.09%


0.12%


0.15%


0.15%


0.08%


0.15%

   Nonperforming assets to total assets


0.08%


0.08%


0.11%


0.13%


0.15%


0.08%


0.15%
















NONPERFORMING ASSETS - COMPOSITION













   Residential real estate:















      Land development

$

34


32


33


45


0


34


0

      Construction

$

0


0


0


0


0


0


0

      Owner occupied / rental

$

2,364


2,576


3,225


3,404


3,555


2,364


3,555

   Commercial real estate:















      Land development

$

0


0


0


0


0


0


0

      Construction

$

0


0


0


0


0


0


0

      Owner occupied  

$

326


240


642


791


1,363


326


1,363

      Non-owner occupied

$

0


26


26


62


0


0


0

   Non-real estate:















      Commercial assets

$

0


0


2


207


17


0


17

      Consumer assets

$

12


13


23


25


17


12


17

   Total nonperforming assets


2,736


2,887


3,951


4,534


4,952


2,736


4,952
















NONPERFORMING ASSETS - RECON















   Beginning balance

$

2,887


3,951


4,534


4,952


5,800


4,952


9,403

   Additions - originated loans

$

30


339


26


539


1,247


934


3,972

   Other activity

$

135


57


34


0


0


226


51

   Return to performing status

$

0


(126)


0


0


0


(126)


(175)

   Principal payments

$

(232)


(1,014)


(512)


(382)


(1,836)


(2,140)


(5,028)

   Sale proceeds

$

(36)


(253)


(74)


(429)


(128)


(792)


(2,381)

   Loan charge-offs

$

(48)


(59)


(36)


(146)


(57)


(289)


(707)

   Valuation write-downs

$

0


(8)


(21)


0


(74)


(29)


(183)

   Ending balance

$

2,736


2,887


3,951


4,534


4,952


2,736


4,952
















LOAN PORTFOLIO COMPOSITION















   Commercial:















      Commercial & industrial

$

846,551


882,747


881,196


839,207


822,723


846,551


822,723

      Land development & construction

$

56,118


48,418


45,158


45,892


44,885


56,118


44,885

      Owner occupied comm'l R/E

$

579,004


567,267


556,868


551,517


548,619


579,004


548,619

      Non-owner occupied comm'l R/E

$

835,345


883,079


852,844


835,679


816,282


835,345


816,282

      Multi-family & residential rental

$

124,526


126,855


128,489


127,903


127,597


124,526


127,597

         Total commercial

$

2,441,544


2,508,366


2,464,555


2,400,198


2,360,106


2,441,544


2,360,106

   Retail:















      1-4 family mortgages

$

339,749


346,095


335,618


316,315


307,540


339,749


307,540

      Home equity & other consumer

$

75,374


78,552


81,320


83,126


85,439


75,374


85,439

         Total retail

$

415,123


424,647


416,938


399,441


392,979


415,123


392,979

         Total loans

$

2,856,667


2,933,013


2,881,493


2,799,639


2,753,085


2,856,667


2,753,085
















END OF PERIOD BALANCES















   Loans

$

2,856,667


2,933,013


2,881,493


2,799,639


2,753,085


2,856,667


2,753,085

   Securities

$

352,657


363,535


365,926


355,878


353,388


352,657


353,388

   Other interest-earning assets

$

180,469


144,263


92,750


168,572


10,482


180,469


10,482

   Total earning assets (before allowance)

$

3,389,793


3,440,811


3,340,169


3,324,089


3,116,955


3,389,793


3,116,955

   Total assets

$

3,632,915


3,710,380


3,576,139


3,551,754


3,363,907


3,632,915


3,363,907

   Noninterest-bearing deposits

$

924,916


967,189


918,581


857,734


889,784


924,916


889,784

   Interest-bearing deposits

$

1,765,468


1,799,902


1,700,628


1,753,240


1,573,924


1,765,468


1,573,924

   Total deposits

$

2,690,384


2,767,091


2,619,209


2,610,974


2,463,708


2,690,384


2,463,708

   Total borrowed funds

$

506,301


517,523


543,098


544,566


513,220


506,301


513,220

   Total interest-bearing liabilities

$

2,271,769


2,317,425


2,243,726


2,297,806


2,087,144


2,271,769


2,087,144

   Shareholders' equity

$

416,561


407,200


400,117


383,729


375,249


416,561


375,249
















AVERAGE BALANCES















   Loans

$

2,871,674


2,903,161


2,848,343


2,787,430


2,706,617


2,853,021


2,628,907

   Securities

$

362,347


363,394


357,718


354,459


343,597


359,512


343,886

   Other interest-earning assets

$

176,034


118,314


94,616


67,915


30,564


114,527


69,559

   Total earning assets (before allowance)

$

3,410,055


3,384,869


3,300,677


3,209,804


3,080,778


3,327,060


3,042,352

   Total assets

$

3,650,087


3,622,168


3,529,598


3,441,774


3,312,648


3,561,645


3,272,637

   Noninterest-bearing deposits

$

948,602


930,851


875,645


852,247


905,065


902,180


863,384

   Interest-bearing deposits

$

1,759,377


1,741,563


1,719,433


1,668,563


1,579,632


1,722,535


1,633,150

   Total deposits

$

2,707,979


2,672,414


2,595,078


2,520,810


2,484,697


2,624,715


2,496,534

   Total borrowed funds

$

509,932


529,590


530,802


532,864


434,365


525,745


390,193

   Total interest-bearing liabilities

$

2,269,309


2,271,153


2,250,235


2,201,427


2,013,997


2,248,280


2,023,343

   Shareholders' equity

$

410,593


403,350


389,133


376,103


370,175


394,913


370,796

 

Cision View original content:http://www.prnewswire.com/news-releases/mercantile-bank-corporation-announces-strong-fourth-quarter-and-full-year-2019-results-300989646.html

SOURCE Mercantile Bank Corporation

Copyright 2020 PR Newswire

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