MERCANTILE BANK CORPORATION GRAND RAPIDS, Mich., Jan. 17, 2017 /PRNewswire/ -- Mercantile Bank Corporation (NASDAQ: MBWM) ("Mercantile") reported net income of $8.1 million, or $0.49 per diluted share, for the fourth quarter of 2016, compared with net income of $6.5 million, or $0.40 per diluted share, for the prior-year period. For the full year 2016, Mercantile reported net income of $31.9 million, or $1.96 per diluted share, compared with net income of $27.0 million, or $1.62 per diluted share, for the full year 2015.
The fourth quarter and year were highlighted by:
-- Strong core earnings and capital position
-- Stable and robust net interest margin
-- Strong fee income growth
-- Reduced overhead costs
-- Strong asset quality, as depicted by low levels of nonperforming assets
and loans in the 30- to 89-days delinquent category
-- New commercial term loan originations of approximately $120 million
during the fourth quarter and $549 million during the full year
-- Sustained strength in commercial loan pipeline
-- Announced first quarter 2017 regular cash dividend of $0.18 per common
share, an increase of approximately 6 percent from the $0.17 regular
cash dividend paid during the fourth quarter of 2016
"Our strong 2016 financial results reflect the success of various strategic initiatives," said Robert B. Kaminski, Jr., President and Chief Executive Officer of Mercantile. "These initiatives, which centered on net interest margin maintenance, fee enhancement, and overhead cost reductions, played a major role in Mercantile recording a company-record operating profit during the year. Our strong financial performance displayed throughout 2016 also reflects solid loan growth and stellar asset quality. Based on our strong financial condition, focus on growing the loan portfolio in a disciplined manner, and current loan prospects, we enter 2017 with a strong foundation for success."
Operating Results
Total revenue, which consists of net interest income and noninterest income, was $31.0 million during the fourth quarter of 2016, up $1.3 million or 4.5 percent from the prior-year fourth quarter. Net interest income during the fourth quarter of 2016 was $26.4 million, up $0.8 million or 3.0 percent from the fourth quarter of 2015, primarily reflecting a 5.8 percent increase in average earning assets. Total revenue was $127 million during the full year 2016, up $9.7 million or 8.3 percent from 2015. Net interest income was $106 million in 2016, up $4.7 million or 4.6 percent from the prior year, primarily reflecting a 4.1 percent increase in average earning assets and a three basis point increase in the net interest margin.
The net interest margin was 3.72 percent in the fourth quarter of 2016, down from 3.81 percent in the prior-year fourth quarter mainly due to a decreased yield on loans, reflecting the ongoing low interest rate environment and competitive industry pressures. The net interest margin was 3.86 percent in 2016, up from 3.83 percent in 2015 due to an increased yield on total earning assets, which more than offset a slight increase in the cost of funds. The higher yield primarily resulted from an increased yield on securities and a change in earning asset mix, which more than offset a decreased yield on loans. The increased yield on securities was mainly due to a significant level of accelerated discount accretion on called U.S. Government agency bonds being recorded as interest income. The accelerated discount accretion totaled $2.2 million during 2016, positively impacting the net interest margin by eight basis points. A nominal level of accelerated discount on called U.S. Government agency bonds was recorded as interest income during 2015.
The net interest margin has ranged from 3.72 percent to 4.01 percent over the past ten quarters. Mercantile's yield on loans has generally declined during this time period, consistent with the industry and primarily due to the ongoing low interest rate environment and competitive industry pressures. In Mercantile's case, however, the negative impact of the lower loan yield has been largely offset by assets shifting out of the low-yielding securities portfolio and into the higher-yielding loan portfolio, thus capitalizing on an opportunity growing out of the 2014 merger with Firstbank Corporation. Average loans represented about 85 percent of average earning assets during 2016, up from approximately 82 percent during 2015. The reallocation of earning assets strategy was completed during the second quarter of 2016 as the level of investments reached Mercantile's internal policy guideline.
Net interest income and the net interest margin during 2016 and 2015 were affected by purchase accounting accretion and amortization entries associated with the fair value measurements recorded effective June 1, 2014. An increase in interest income on loans totaling $4.9 million and an increase in interest expense on subordinated debentures totaling $0.7 million were recorded during 2016. During 2015, Mercantile recorded an increase in interest income on loans totaling $5.3 million and a decrease in interest expense on deposits and FHLB advances totaling $1.4 million. In addition, Mercantile recorded an increase in interest expense on subordinated debentures totaling $0.7 million during the same time period. Mercantile expects to continue to record adjustments in interest income on loans and interest expense on subordinated debentures in future periods; however, the adjustments to interest expense on deposits and FHLB advances ended in July and June of 2015, respectively. The resulting increase in interest expense negatively impacted the net interest margin by approximately eight to ten basis points after July 31, 2015.
Mercantile recorded a $0.6 million provision for loan losses during the fourth quarter of 2016, compared to a provision expense of $0.5 million recorded during the fourth quarter of 2015. During 2016, Mercantile recorded a provision for loan losses of $2.9 million, compared to a negative loan loss provision of $1.0 million recorded during 2015. The provision expense recorded during the 2016 periods primarily reflects ongoing loan growth and assessment changes in our economic and concentration environmental factors, while the negative provision expense recorded during 2015 resulted from multiple factors, including recoveries of previously charged-off loans, reversals of specific reserves, a reduced level of loan-rating downgrades and ongoing loan-rating upgrades. The provision expense recorded during the fourth quarter of 2015 was primarily necessitated by loan growth, which more than offset reductions in the required allowance stemming from the previously mentioned factors.
Noninterest income during the fourth quarter of 2016 was $4.6 million, up $0.6 million or 13.8 percent from the prior-year fourth quarter. The increase in noninterest income mainly resulted from higher levels of service charges on deposit and sweep accounts and mortgage banking income. Noninterest income for 2016 was $21.0 million, up $5.0 million or 31.2 percent from 2015, reflecting both a $2.9 million pre-tax gain being recorded in the first quarter of 2016 in association with a trust preferred securities repurchase transaction and higher service charges on deposit and sweep accounts and mortgage banking income. The increase in service charges on deposit and sweep accounts in the 2016 periods mainly reflects an ongoing project to ensure all depositors are in a product that best meets their needs and is priced appropriately as well as increased cash management fee income. The increase in mortgage banking income in the 2016 periods primarily reflects the positive impact of recently-implemented strategic initiatives, including the hiring of additional loan originators, introduction of new and enhanced products, loan programs, and increased marketing efforts.
Noninterest expense totaled $18.4 million during the fourth quarter of 2016, down $1.7 million or 8.5 percent from the prior-year fourth quarter. Expenses related to the cost efficiency program, which was announced in October of 2015, totaled $0.8 million during the fourth quarter of 2015; no such costs were recorded during the fourth quarter of 2016. Noninterest expense for 2016 was $77.1 million, down $2.3 million or 2.9 percent from 2015. Noninterest expense during the 2016 periods was positively impacted by the cost efficiency program, which is expected to save approximately $2.7 million per year on a pre-tax basis beginning in 2017; the expected quarterly cost savings were fully realized starting in the second quarter of 2016. Decreased nonperforming asset costs and Federal Deposit Insurance Corporation ("FDIC") premiums also contributed to the lower overhead costs in the 2016 periods. The decreased FDIC insurance premiums resulted from improvements in certain financial ratios and changes to the deposit insurance assessment calculation that became effective in the third quarter of 2016.
Mr. Kaminski continued: "Although competitive pressures remain in our markets and the industry experienced net interest margin compression during 2016, our net interest margin remained strong and relatively stable during the year as we remained committed to disciplined loan pricing and underwriting. Our net interest income was positively impacted by the Federal Open Market Committee's rate hikes in December of 2015 and 2016, and our balance sheet structure continues to position us to benefit from further rate increases. We are very pleased that the expected benefits of the strategic initiatives related to fee enhancement and overhead cost reductions were realized in 2016."
Balance Sheet
As of December 31, 2016, total assets were $3.08 billion, up $179 million or 6.2 percent from December 31, 2015. Total loans increased $101 million, or 4.4 percent, to $2.38 billion over the same time period. During the fourth quarter of 2016, total loans decreased $27.8 million or 1.2 percent. The loan contraction during this period was partially attributable to several portfolio reducing factors, including a $24 million reduction related to the placement of a large commercial loan relationship into syndication, a $15 million decrease in commercial line of credit usage, reflecting customer paydowns stemming from increased liquidity positions, a $10 million decline associated with the desire to reduce exposure to certain industries to stay within internal concentration limits, and an $8 million reduction representing watch list credit payoffs. Approximately $120 million and $549 million in commercial term loans to new and existing borrowers were originated during the fourth quarter and full year of 2016, respectively, as ongoing sales and relationship-building efforts resulted in increased lending opportunities. As of December 31, 2016, unfunded commitments on commercial construction and development loans totaled approximately $102 million, which are expected to be largely funded over the next twelve months.
Raymond Reitsma, President of the Bank, noted: "We are very pleased with the $549 million in new commercial term loan originations during 2016. Although the loan portfolio slightly contracted during the fourth quarter of 2016, we are confident that solid loan growth can be achieved in future periods in light of the robust current loan pipeline and ongoing focus on identifying new lending opportunities. Our efforts to meet loan growth objectives will be accompanied by a continuing emphasis on loan quality and disciplined loan pricing. As expected, our residential mortgage portfolio grew during the fourth quarter of 2016, reflecting the success of strategic initiatives centered on increasing our market presence."
Commercial-related real estate loans continue to comprise a majority of Mercantile's loan portfolio, representing approximately 57 percent of total loans as of December 31, 2016. 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 December 31, 2016. Commercial and industrial loans represented 30 percent of total loans as of December 31, 2016.
As of December 31, 2016, total deposits were $2.37 billion, up $99.6 million from December 31, 2015. Local deposits were up $145 million since year-end 2015; growth in local deposits was primarily driven by new commercial loan relationships. Wholesale funds were $251 million, or approximately 9 percent of total funds, as of December 31, 2016, compared to $189 million, or approximately 8 percent of total funds, as of December 31, 2015.
Asset Quality
Nonperforming assets at December 31, 2016 were $6.4 million, or 0.2 percent of total assets, compared to $6.7 million, or 0.2 percent of total assets, as of December 31, 2015. The level of past due loans remains nominal, and loan relationships on the internal watch list generally declined throughout 2016.
Net loan charge-offs were $0.2 million during both the fourth quarter of 2016 and linked quarter and $0.9 million during the prior-year fourth quarter. Net loan charge-offs totaled $0.6 million and $3.4 million during 2016 and 2015, respectively.
Capital Position
Shareholders' equity totaled $341 million as of December 31, 2016, an increase of $7.0 million from year-end 2015. The Bank's capital position remains above "well-capitalized" with a total risk-based capital ratio of 13.1 percent as of December 31, 2016, compared to 13.5 percent at December 31, 2015. At December 31, 2016, the Bank had approximately $84 million in excess of the 10.0 percent minimum regulatory threshold required to be considered a "well-capitalized" institution. Mercantile reported 16,416,695 total shares outstanding at December 31, 2016.
As part of a $20 million common stock repurchase program announced in January of 2015, Mercantile repurchased approximately 168,000 shares for $3.7 million, or a weighted average all-in cost per share of $22.23, during 2016; 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: "The strong results achieved during 2016 allowed us to build shareholder value through the payment of increased regular quarterly cash dividends and the payment of a special cash dividend in the fourth quarter. The success of our relationship-based approach to banking, including efficiently delivering a wide array of products and services to customers, is reflected in the solid loan and deposit growth achieved during the year, and we will continue to use this philosophy to identify and cultivate new customer relationships in 2017. We are confident that our strong financial performance will continue in the current year, and our robust capital position should afford us the ability to meet growth objectives and enhance 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 $3.1 billion and operates 48 banking offices serving communities in central and western Michigan. 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)
DECEMBER 31, DECEMBER 31, DECEMBER 31,
2016 2015 2014
---- ---- ----
ASSETS
Cash and due from banks $50,200,000 $42,829,000 $43,754,000
Interest-earning deposits 133,396,000 46,463,000 117,777,000
Federal funds sold 0 599,000 11,207,000
--- ------- ----------
Total cash and cash equivalents 183,596,000 89,891,000 172,738,000
Securities available for sale 328,060,000 346,992,000 432,912,000
Federal Home Loan Bank stock 8,026,000 7,567,000 13,699,000
Loans 2,378,620,000 2,277,727,000 2,089,277,000
Allowance for loan losses (17,961,000) (15,681,000) (20,041,000)
----------- ----------- -----------
Loans, net 2,360,659,000 2,262,046,000 2,069,236,000
Premises and equipment, net 45,456,000 46,862,000 48,812,000
Bank owned life insurance 67,198,000 58,971,000 57,861,000
Goodwill 49,473,000 49,473,000 49,473,000
Core deposit intangible 9,957,000 12,631,000 15,624,000
Other assets 30,146,000 29,123,000 33,024,000
---------- ---------- ----------
Total assets $3,082,571,000 $2,903,556,000 $2,893,379,000
LIABILITIES AND SHAREHOLDERS' EQUITY
Deposits:
Noninterest-bearing $810,600,000 $674,568,000 $558,738,000
Interest-bearing 1,564,385,000 1,600,814,000 1,718,177,000
------------- ------------- -------------
Total deposits 2,374,985,000 2,275,382,000 2,276,915,000
Securities sold under agreements to repurchase 131,710,000 154,771,000 167,569,000
Federal Home Loan Bank advances 175,000,000 68,000,000 54,022,000
Subordinated debentures 44,835,000 55,154,000 54,472,000
Accrued interest and other liabilities 15,230,000 16,445,000 12,263,000
---------- ---------- ----------
Total liabilities 2,741,760,000 2,569,752,000 2,565,241,000
SHAREHOLDERS' EQUITY
Common stock 305,488,000 304,819,000 317,904,000
Retained earnings 40,904,000 27,722,000 10,218,000
Accumulated other comprehensive income (5,581,000) 1,263,000 16,000
---------- --------- ------
Total shareholders' equity 340,811,000 333,804,000 328,138,000
----------- ----------- -----------
Total liabilities and shareholders' equity $3,082,571,000 $2,903,556,000 $2,893,379,000
MERCANTILE BANK CORPORATION
CONSOLIDATED REPORTS OF INCOME
(Unaudited)
THREE MONTHS ENDED THREE MONTHS ENDED TWELVE MONTHS ENDED TWELVE MONTHS ENDED
December 31, 2016 December 31, 2015 December 31, 2016 December 31, 2015
----------------- ----------------- ----------------- -----------------
INTEREST INCOME
Loans, including fees $27,830,000 $26,643,000 $109,049,000 $104,106,000
Investment securities 1,724,000 1,879,000 9,007,000 8,007,000
Other interest-earning assets 161,000 54,000 401,000 215,000
------- ------ ------- -------
Total interest income 29,715,000 28,576,000 118,457,000 112,328,000
INTEREST EXPENSE
Deposits 1,940,000 1,948,000 7,549,000 7,590,000
Short-term borrowings 57,000 41,000 211,000 157,000
Federal Home Loan Bank advances 668,000 259,000 2,263,000 765,000
Other borrowed money 615,000 669,000 2,567,000 2,642,000
------- ------- --------- ---------
Total interest expense 3,280,000 2,917,000 12,590,000 11,154,000
--------- --------- ---------- ----------
Net interest income 26,435,000 25,659,000 105,867,000 101,174,000
Provision for loan losses 600,000 500,000 2,900,000 (1,000,000)
------- ------- --------- ----------
Net interest income after
provision for loan losses 25,835,000 25,159,000 102,967,000 102,174,000
NONINTEREST INCOME
Service charges on accounts 1,075,000 864,000 4,253,000 3,308,000
Credit and debit card income 1,093,000 1,033,000 4,278,000 4,329,000
Mortgage banking income 1,288,000 835,000 3,866,000 3,619,000
Earnings on bank owned life insurance 331,000 293,000 1,264,000 1,113,000
Other income 817,000 1,021,000 7,377,000 3,669,000
------- --------- --------- ---------
Total noninterest income 4,604,000 4,046,000 21,038,000 16,038,000
NONINTEREST EXPENSE
Salaries and benefits 10,565,000 10,691,000 43,524,000 42,594,000
Occupancy 1,463,000 1,398,000 6,063,000 5,976,000
Furniture and equipment 541,000 544,000 2,119,000 2,332,000
Data processing costs 1,990,000 2,097,000 7,939,000 7,696,000
FDIC insurance costs 128,000 402,000 1,236,000 1,717,000
Other expense 3,707,000 4,965,000 16,237,000 19,066,000
--------- --------- ---------- ----------
Total noninterest expense 18,394,000 20,097,000 77,118,000 79,381,000
---------- ---------- ---------- ----------
Income before federal income
tax expense 12,045,000 9,108,000 46,887,000 38,831,000
Federal income tax expense 3,960,000 2,628,000 14,974,000 11,811,000
--------- --------- ---------- ----------
Net Income $8,085,000 $6,480,000 $31,913,000 $27,020,000
Basic earnings per share $0.49 $0.40 $1.96 $1.63
Diluted earnings per share $0.49 $0.40 $1.96 $1.62
Average basic shares outstanding 16,352,359 16,314,953 16,292,086 16,609,263
Average diluted shares outstanding 16,374,117 16,352,187 16,310,730 16,642,140
MERCANTILE BANK CORPORATION
CONSOLIDATED FINANCIAL HIGHLIGHTS
(Unaudited)
Quarterly Year-To-Date
--------- ------------
(dollars in thousands except per share data) 2016 2016 2016 2016 2015
4th Qtr 3rd Qtr 2nd Qtr 1st Qtr 4th Qtr 2016 2015
------- ------- ------- ------- ------- ---- ----
EARNINGS
Net interest income $26,435 26,450 27,100 25,882 25,659 105,867 101,174
Provision for loan losses $600 600 1,100 600 500 2,900 (1,000)
Noninterest income $4,604 5,284 4,064 7,086 4,046 21,038 16,038
Noninterest expense $18,394 19,663 19,193 19,868 20,097 77,118 79,381
Net income before federal income
tax expense $12,045 11,471 10,871 12,500 9,108 46,887 38,831
Net income $8,085 7,845 7,434 8,549 6,480 31,913 27,020
Basic earnings per share $0.49 0.48 0.46 0.52 0.40 1.96 1.63
Diluted earnings per share $0.49 0.48 0.46 0.52 0.40 1.96 1.62
Average basic shares outstanding 16,352,359 16,282,804 16,240,966 16,291,654 16,314,953 16,292,086 16,609,263
Average diluted shares outstanding 16,374,117 16,307,350 16,268,839 16,325,475 16,352,187 16,310,730 16,642,140
PERFORMANCE RATIOS
Return on average assets 1.05% 1.02% 1.01% 1.19% 0.88% 1.07% 0.94%
Return on average equity 9.35% 9.00% 8.79% 10.18% 7.79% 9.35% 8.19%
Net interest margin (fully tax-equivalent) 3.72% 3.76% 4.01% 3.92% 3.81% 3.86% 3.83%
Efficiency ratio 59.26% 61.96% 61.59% 60.26% 67.66% 60.77% 67.72%
Full-time equivalent employees 616 612 633 612 639 616 639
YIELD ON ASSETS / COST OF FUNDS
Yield on loans 4.65% 4.57% 4.60% 4.72% 4.71% 4.65% 4.78%
Yield on securities 2.27% 2.71% 3.99% 2.52% 2.21% 2.87% 2.16%
Yield on other interest-earning assets 0.51% 0.51% 0.51% 0.54% 0.25% 0.51% 0.25%
Yield on total earning assets 4.18% 4.22% 4.45% 4.37% 4.25% 4.31% 4.25%
Yield on total assets 3.87% 3.90% 4.12% 4.03% 3.91% 3.99% 3.92%
Cost of deposits 0.33% 0.33% 0.32% 0.33% 0.34% 0.33% 0.33%
Cost of borrowed funds 1.45% 1.41% 1.42% 1.53% 1.39% 1.45% 1.37%
Cost of interest-bearing liabilities 0.68% 0.66% 0.64% 0.64% 0.61% 0.66% 0.58%
Cost of funds (total earning assets) 0.46% 0.46% 0.44% 0.45% 0.44% 0.45% 0.42%
Cost of funds (total assets) 0.42% 0.42% 0.41% 0.42% 0.40% 0.42% 0.39%
PURCHASE ACCOUNTING ADJUSTMENTS
Loan portfolio - increase interest income $1,672 1,002 935 1,316 1,074 4,925 5,338
Time deposits - reduce interest expense $0 0 0 0 0 0 1,371
FHLB advances - reduce interest expense $0 0 0 0 0 0 22
Trust preferred - increase interest expense $171 171 171 171 171 684 684
Core deposit intangible - increase overhead $636 636 688 715 715 2,675 2,992
MORTGAGE BANKING ACTIVITY
Total mortgage loans originated $46,727 52,340 39,559 24,446 31,659 163,072 147,231
Purchase mortgage loans originated $21,962 25,542 21,995 8,752 15,260 78,251 58,450
Refinance mortgage loans originated $24,765 26,798 17,564 15,694 16,399 84,821 88,781
Total mortgage loans sold $30,081 35,826 26,229 18,922 25,477 111,058 117,254
Net gain on sale of mortgage loans $1,236 1,173 746 543 795 3,698 3,626
CAPITAL
Tangible equity to tangible assets 9.31% 9.63% 9.66% 9.68% 9.56% 9.31% 9.56%
Tier 1 leverage capital ratio 11.17% 11.28% 11.41% 11.43% 11.56% 11.17% 11.56%
Common equity risk-based capital ratio 10.88% 10.83% 10.73% 10.86% 10.89% 10.88% 10.89%
Tier 1 risk-based capital ratio 12.47% 12.40% 12.31% 12.49% 12.83% 12.47% 12.83%
Total risk-based capital ratio 13.13% 13.05% 12.95% 13.12% 13.45% 13.13% 13.45%
Tier 1 capital $336,316 337,054 330,710 324,296 329,858 336,316 329,858
Tier 1 plus tier 2 capital $354,278 354,580 347,819 340,557 345,539 354,278 345,539
Total risk-weighted assets $2,697,727 2,718,012 2,685,823 2,596,517 2,570,015 2,697,727 2,570,015
Book value per common share $20.76 21.44 21.18 20.86 20.41 20.76 20.41
Tangible book value per common share $17.14 17.76 17.45 17.07 16.61 17.14 16.61
Cash dividend per common share $0.67 0.17 0.16 0.16 0.15 1.16 0.58
ASSET QUALITY
Gross loan charge-offs $970 363 397 475 1,266 2,205 6,279
Recoveries $805 179 145 456 328 1,585 2,919
Net loan charge-offs (recoveries) $165 184 252 19 938 620 3,360
Net loan charge-offs to average loans 0.03% 0.03% 0.04% < 0.01% 0.17% 0.03% 0.15%
Allowance for loan losses $17,961 17,526 17,110 16,262 15,681 17,961 15,681
Allowance to originated loans 0.95% 0.93% 0.94% 0.94% 0.94% 0.95% 0.94%
Nonperforming loans $5,939 4,669 5,168 4,842 5,444 5,939 5,444
Other real estate/repossessed assets $469 790 815 1,478 1,293 469 1,293
Nonperforming loans to total loans 0.25% 0.19% 0.22% 0.21% 0.24% 0.25% 0.24%
Nonperforming assets to total assets 0.21% 0.18% 0.20% 0.22% 0.23% 0.21% 0.23%
NONPERFORMING ASSETS - COMPOSITION
Residential real estate:
Land development $16 23 42 30 23 16 23
Construction $0 0 319 0 0 0 0
Owner occupied / rental $2,883 2,945 2,893 2,955 3,515 2,883 3,515
Commercial real estate:
Land development $95 110 125 140 155 95 155
Construction $0 0 0 0 0 0 0
Owner occupied $610 1,597 2,263 2,877 2,743 610 2,743
Non-owner occuiped $488 691 134 151 191 488 191
Non-real estate:
Commercial assets $2,293 65 165 137 69 2,293 69
Consumer assets $23 28 42 30 41 23 41
Total nonperforming assets 6,408 5,459 5,983 6,320 6,737 6,408 6,737
NONPERFORMING ASSETS - RECON
Beginning balance $5,459 5,983 6,320 6,737 10,486 6,737 31,429
Additions - originated loans $2,953 1,172 1,096 1,123 927 6,344 5,639
Merger-related activity $33 0 0 0 656 33 1,090
Return to performing status $(13) 0 0 0 (48) (13) (48)
Principal payments $(1,386) (1,509) (495) (774) (3,457) (4,164) (23,641)
Sale proceeds $(308) (76) (642) (402) (1,300) (1,428) (2,377)
Loan charge-offs $(263) (101) (261) (356) (172) (981) (4,844)
Valuation write-downs $(67) (10) (35) (8) (355) (120) (511)
Ending balance $6,408 5,459 5,983 6,320 6,737 6,408 6,737
LOAN PORTFOLIO COMPOSITION
Commercial:
Commercial & industrial $713,903 750,330 750,136 714,612 696,303 713,903 696,303
Land development & construction $34,828 37,455 40,529 39,630 45,120 34,828 45,120
Owner occupied comm'l R/E $450,464 440,705 438,798 441,662 445,919 450,464 445,919
Non-owner occupied comm'l R/E $748,269 741,443 716,930 666,013 644,351 748,269 644,351
Multi-family & residential rental $117,883 118,103 113,361 112,533 115,003 117,883 115,003
Total commercial $2,065,347 2,088,036 2,059,754 1,974,450 1,946,696 2,065,347 1,946,696
Retail:
1-4 family mortgages $195,226 190,715 189,119 185,535 190,385 195,226 190,385
Home equity & other consumer $118,047 127,626 131,067 135,683 140,646 118,047 140,646
Total retail $313,273 318,341 320,186 321,218 331,031 313,273 331,031
Total loans $2,378,620 2,406,377 2,379,940 2,295,668 2,277,727 2,378,620 2,277,727
END OF PERIOD BALANCES
Loans $2,378,620 2,406,377 2,379,940 2,295,668 2,277,727 2,378,620 2,277,727
Securities $336,086 333,469 331,478 351,372 354,559 336,086 354,559
Other interest-earning assets $133,396 85,848 46,896 62,814 47,062 133,396 47,062
Total earning assets (before allowance) $2,848,102 2,825,694 2,758,314 2,709,854 2,679,348 2,848,102 2,679,348
Total assets $3,082,571 3,063,964 2,999,936 2,926,056 2,903,556 3,082,571 2,903,556
Noninterest-bearing deposits $810,600 731,663 733,573 678,100 674,568 810,600 674,568
Interest-bearing deposits $1,564,385 1,597,774 1,546,145 1,587,022 1,600,814 1,564,385 1,600,814
Total deposits $2,374,985 2,329,437 2,279,718 2,265,122 2,275,382 2,374,985 2,275,382
Total borrowed funds $354,902 372,917 362,665 308,148 281,830 354,902 281,830
Total interest-bearing liabilities $1,919,287 1,970,691 1,908,810 1,895,170 1,882,644 1,919,287 1,882,644
Shareholders' equity $340,811 349,471 344,577 338,553 333,804 340,811 333,804
AVERAGE BALANCES
Loans $2,372,510 2,391,620 2,342,333 2,273,960 2,243,856 2,345,308 2,178,276
Securities $336,493 328,993 340,866 354,499 362,390 340,172 396,079
Other interest-earning assets $127,790 91,590 49,365 42,008 75,111 77,863 78,953
Total earning assets (before allowance) $2,836,793 2,812,203 2,732,564 2,670,467 2,681,357 2,763,343 2,653,308
Total assets $3,064,974 3,040,324 2,952,184 2,892,229 2,909,210 2,987,784 2,881,497
Noninterest-bearing deposits $773,137 733,600 702,293 652,338 656,475 715,550 606,750
Interest-bearing deposits $1,561,539 1,572,424 1,548,509 1,588,930 1,631,218 1,567,846 1,672,140
Total deposits $2,334,676 2,306,024 2,250,802 2,241,268 2,287,693 2,283,396 2,278,890
Total borrowed funds $366,905 373,973 347,191 299,956 276,585 347,134 260,891
Total interest-bearing liabilities $1,928,444 1,946,397 1,895,700 1,888,886 1,907,803 1,914,980 1,933,031
Shareholders' equity $343,122 345,944 339,357 336,870 330,032 341,340 329,787
To view the original version on PR Newswire, visit:http://www.prnewswire.com/news-releases/mercantile-bank-corporation-announces-strong-fourth-quarter-and-full-year-2016-results-300391360.html
SOURCE Mercantile Bank Corporation
