Press Release

Mercantile Bank Corporation Announces Strong Fourth Quarter and Full Year 2017 Results

Solid core profitability and loan growth of nearly 8 percent highlight 2017

Company Release - 1/16/2018 6:01 AM ET

GRAND RAPIDS, Mich., Jan. 16, 2018 /PRNewswire/ -- Mercantile Bank Corporation (NASDAQ: MBWM) ("Mercantile") reported net income of $8.0 million, or $0.48 per diluted share, for the fourth quarter of 2017, compared with net income of $8.1 million, or $0.49 per diluted share, for the respective prior-year period.  For the full year 2017, Mercantile reported net income of $31.3 million, or $1.90 per diluted share, compared with net income of $31.9 million, or $1.96 per diluted share, for the full year 2016.

Excluding the impacts of certain noncore transactions, diluted earnings per share during 2017 and 2016 equaled $1.89 and $1.76, respectively.  These transactions included a Bank-owned life insurance death benefit claim in the first quarter of 2017, the revaluation of Mercantile's net deferred tax asset in response to the Tax Cuts and Jobs Act becoming law in December of 2017, the repurchase of trust preferred securities at a discount in the first quarter of 2016, and accelerated purchase discount accretion on called U.S. Government agency bonds during 2016.

The fourth quarter and full year were highlighted by:

  • Strong core earnings and capital position
  • Stable and robust net interest margin
  • Solid growth in various fee income categories
  • Controlled overhead costs
  • Strong asset quality, as depicted by low levels of nonperforming assets and loans in the 30- to 89-days delinquent category
  • Total loan growth of $180 million, or nearly 8 percent, during the full year
  • New commercial term loan originations of approximately $119 million during the fourth quarter and $529 million during the full year
  • Sustained strength in commercial loan pipeline
  • Announced first quarter 2018 regular cash dividend of $0.22 per common share, an increase of approximately 16 percent from the $0.19 regular cash dividend paid during the fourth quarter of 2017

"Our strong 2017 financial results reflect the success of various ongoing strategic initiatives," said Robert B. Kaminski, Jr., President and Chief Executive Officer of Mercantile.  "Our focus on net interest margin maintenance, enhanced fee generation, and overhead cost control played a key role in our demonstrated solid operating performance throughout all of 2017.  We are very pleased with the level of loan growth during the year, which was achieved in a disciplined manner and in spite of competitive pressures, and our continuing strong asset quality.  Based on our overall financial strength and current loan pipeline and prospects, we are well-positioned to participate in the economic strength of our markets during 2018."

Operating Results

Total revenue, which consists of net interest income and noninterest income, was $32.9 million during the fourth quarter of 2017, up $1.9 million, or 6.0 percent, from the prior-year fourth quarter.  Net interest income during the fourth quarter of 2017 was $28.4 million, up $2.0 million, or 7.4 percent, from the fourth quarter of 2016, reflecting a higher level of earning assets and an increased net interest margin.  Total revenue was $129 million during the full year 2017, up $1.8 million, or 1.5 percent, from 2016.  Net interest income was $110 million in 2017, up $3.9 million, or 3.7 percent, from the prior year, reflecting a higher level of earning assets.

The net interest margin was 3.76 percent in the fourth quarter of 2017, up from 3.72 percent in the prior-year fourth quarter.  The increase in the net interest margin primarily resulted from a higher yield on loans, mainly reflecting the positive impact of higher interest rates on variable-rate commercial loans stemming from the Federal Open Market Committee ("FOMC") hiking the targeted federal funds rate by 25 basis points in December of 2016 and March, June, and December of 2017.  The cost of funds equaled 0.59 percent during the fourth quarter of 2017, up from 0.46 percent during the respective 2016 period mainly due to increased costs of certain non-time deposit accounts, time deposits, and borrowed funds.

The net interest margin was 3.79 percent in 2017, down from 3.86 percent in 2016 due to an increased cost of funds, which more than offset a slight increase in the yield on average earning assets.  The cost of funds equaled 0.54 percent during 2017, up from 0.45 percent during 2016 primarily due to higher costs of certain non-time deposits, time deposits, and borrowed funds.  The improved yield on average earning assets mainly resulted from an increased yield on loans, primarily reflecting higher interest rates on variable-rate commercial loans stemming from the previously-mentioned FOMC rate hikes, which more than offset a decreased yield on securities, mainly reflecting a decreased level of accelerated purchase discount accretion on called U.S. Government agency bonds.  A change in earning asset mix also contributed to the increased yield on average earning assets; average loans represented 85.2 percent of average earning assets during 2017, up from 84.9 percent during 2016.  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 accretion on called U.S. Government agency bonds was recorded as interest income during 2017.

Net interest income and the net interest margin during 2017 and 2016 were also 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 $4.6 million and $4.9 million were recorded during 2017 and 2016, respectively.  An increase in interest expense on subordinated debentures totaling $0.7 million was recorded during both 2017 and 2016.  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 fourth quarter of 2017 and the prior-year fourth quarter.  During 2017, Mercantile recorded a provision for loan losses of $3.0 million, compared to a provision of $2.9 million during 2016.  The provision expense recorded during the 2017 and 2016 periods primarily reflects ongoing loan growth and periodic adjustments to loan loss reserve environmental factors.

Noninterest income during the fourth quarter of 2017 was $4.5 million, down $0.1 million, or 2.2 percent, from the prior-year fourth quarter.  Growth in credit and debit card fees and payroll processing revenue was more than offset by a decline in other income, which was elevated in the fourth quarter of 2016 mainly as a result of payments received on certain purchased credit-impaired loans.  Noninterest income for 2017 was $19.0 million, down $2.0 million, or 9.7 percent, from 2016.  Core noninterest income revenue streams, including treasury management income, credit and debit card interchange fees, mortgage banking activity income, payroll processing revenue, and customer service fees, increased $1.2 million, or 8.5 percent, on a combined basis in 2017 compared to the prior year.  The increase in mortgage banking activity income primarily reflects the positive impact of strategic initiatives that were implemented in the latter half of 2016 and throughout 2017, including the hiring of additional loan originators, introduction of new and enhanced products, loan programs and increased marketing efforts.  Noninterest income during both periods benefitted from certain noncore transactions, including a Bank-owned life insurance death benefit claim in 2017 and a gain associated with a trust preferred securities repurchase transaction in 2016.

Noninterest expense totaled $19.8 million during the fourth quarter of 2017, up $1.5 million, or 7.9 percent, from the prior-year fourth quarter.  Noninterest expense during 2017 was $79.7 million, an increase of $2.6 million, or 3.4 percent, from the $77.1 million expensed during 2016.  The higher level of expense in the 2017 periods primarily resulted from expected increases in various operating expenses stemming from recent expansion initiatives and increased salary expense, mainly reflecting annual employee merit pay increases, the hiring of additional staff, a larger bonus accrual, and greater stock-based compensation expense.  A significant portion of the increased salary expense resulting from staff additions reflects the opening of the southeast Michigan office.

Mr. Kaminski continued, "Our net interest margin remained relatively steady during 2017, ranging from 3.73 percent to 3.85 percent on a quarterly basis.  The increase in our loan yield, which helped offset the impact of an increased cost of funds on our net interest margin, primarily reflects the positive impact of the recent Federal Open Market Committee rate hikes, which outweighed the negative impacts stemming from persistent competitive pressures and the ongoing relatively low interest rate environment.  In light of our current balance sheet structure, we anticipate that potential additional rate hikes will benefit our net interest income.  We are pleased with the growth in our core noninterest income revenue streams, and we will continue our efforts to enhance fee income in future periods."        

Balance Sheet

As of December 31, 2017, total assets were $3.29 billion, up $204 million, or 6.6 percent, from December 31, 2016.  Total loans increased $180 million, or 7.6 percent, to $2.56 billion over the same time period.  Approximately $119 million and $529 million in commercial term loans to new and existing borrowers were originated during the fourth quarter and full year of 2017, respectively, as ongoing sales and relationship-building efforts resulted in increased lending opportunities.  As of December 31, 2017, unfunded commitments on commercial construction and development loans totaled approximately $154 million, which are expected to be largely funded over the next 12 to 18 months. 

Raymond Reitsma, President of Mercantile Bank of Michigan, noted, "We are very pleased with our new commercial term loan originations during 2017.  Although the commercial loan portfolio slightly contracted during the fourth quarter of 2017, we were still able to produce net loan growth during the quarter as a result of growth in the residential mortgage portfolio.  The reduction in commercial loans stemmed from an unusually high level of payoffs, primarily reflecting situations whereby we remained committed to margin and credit quality preservation.  The solid growth in the commercial and industrial, owner-occupied commercial real estate, and non-owner occupied commercial real estate portfolios during 2017 reflects the ongoing efforts of our lending team to identify new lending opportunities and meet the needs of existing customers, while growth in the residential mortgage portfolio during the year depicts the success of strategic initiatives focused on increasing our market presence.  Based on the strength of our current loan pipelines and additional lending opportunities reported by commercial lenders, we are confident that we can grow the commercial and residential loan portfolios in future periods."

Commercial and industrial loans and owner-occupied commercial real estate ("CRE") loans combined represented approximately 58 percent of total commercial loans as of December 31, 2017.  Non-owner occupied CRE loans equaled about 36 percent of total commercial loans as of December 31, 2017.

As of December 31, 2017, total deposits were $2.52 billion, up $147 million from December 31, 2016.  Local deposits were up $121 million since year-end 2016.  Growth in local deposits was mainly driven by new commercial loan relationships and the success of various deposit account initiatives.  Wholesale funds were $323 million, or approximately 11 percent of total funds, as of December 31, 2017, compared to $251 million, or about 9 percent of total funds, as of December 31, 2016.

Asset Quality

Nonperforming assets at December 31, 2017 were $9.4 million, or 0.3 percent of total assets, compared to $6.4 million, or 0.2 percent of total assets, at December 31, 2016.  The transfer of a Bank-owned parcel of real estate, which is no longer being considered for use as a bank facility, from fixed assets to other real estate owned accounted for nearly 55 percent of the $3.0 million increase in nonperforming assets during 2017.  The parcel of real estate is expected to be sold in the next six months for an amount that approximates current book value.  The level of past due loans remains nominal, and loan relationships on the internal watch list have remained relatively consistent in number and dollar volume. 

Net loan charge-offs were $0.3 million during the fourth quarter of 2017, or an annualized 0.05 percent of average loans, and $0.2 million, or an annualized 0.03 percent of average loans, during the prior-year fourth quarter.  Net loan charge-offs totaled $1.4 million during 2017, or 0.06 percent of average loans, and $0.6 million, or 0.03 percent of average loans, during 2016.

Capital Position

Shareholders' equity totaled $366 million as of December 31, 2017, an increase of $25.1 million from year-end 2016.  The Bank's capital position remains above "well-capitalized" with a total risk-based capital ratio of 12.6 percent as of December 31, 2017, compared to 13.1 percent at December 31, 2016.  At December 31, 2017, the Bank had approximately $77 million in excess of the 10.0 percent minimum regulatory threshold required to be considered a "well-capitalized" institution.  Mercantile reported 16,592,125 total shares outstanding at December 31, 2017.

No shares were repurchased during 2017 as part of the $20 million stock repurchase program that was announced in January of 2015.  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, "Our strong financial performance during 2017 positions us to meet growth objectives and further build shareholder value.  As evidenced by our ongoing cash dividend program, including the announcement of an increased first quarter 2018 regular cash dividend earlier today, we remain committed to enhancing shareholder value. Our relationship-based banking approach, which focuses on meeting customers' needs through the efficient delivery of a wide-range of products and services, continues to be successful as depicted by the solid growth in deposits and loans during the year. We are excited about Mercantile's future and are confident that our demonstrated robust operating performance will continue in the current year."

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 $3.2 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.

MERCANTILE BANK CORPORATION

CONSOLIDATED BALANCE SHEETS

(Unaudited)










DECEMBER 31,


DECEMBER 31,


DECEMBER 31,



2017


2016


2015

ASSETS







   Cash and due from banks

$

55,127,000

$

50,200,000

$

42,829,000

   Interest-earning deposits


144,974,000


133,396,000


46,463,000

   Federal fund sold


0


0


599,000

      Total cash and cash equivalents


200,101,000


183,596,000


89,891,000








   Securities available for sale


335,744,000


328,060,000


346,992,000

   Federal Home Loan Bank stock


11,036,000


8,026,000


7,567,000








   Loans


2,558,552,000


2,378,620,000


2,277,727,000

   Allowance for loan losses


(19,501,000)


(17,961,000)


(15,681,000)

      Loans, net


2,539,051,000


2,360,659,000


2,262,046,000








   Premises and equipment, net


46,034,000


45,456,000


46,862,000

   Bank owned life insurance


68,689,000


67,198,000


58,971,000

   Goodwill


49,473,000


49,473,000


49,473,000

   Core deposit intangible


7,600,000


9,957,000


12,631,000

   Other assets


28,976,000


30,146,000


29,123,000








      Total assets

$

3,286,704,000

$

3,082,571,000

$

2,903,556,000















LIABILITIES AND SHAREHOLDERS' EQUITY







   Deposits:







      Noninterest-bearing

$

866,380,000

$

810,600,000

$

674,568,000

      Interest-bearing


1,655,985,000


1,564,385,000


1,600,814,000

         Total deposits


2,522,365,000


2,374,985,000


2,275,382,000








   Securities sold under agreements to repurchase


118,748,000


131,710,000


154,771,000

   Federal Home Loan Bank advances


220,000,000


175,000,000


68,000,000

   Subordinated debentures


45,517,000


44,835,000


55,154,000

   Accrued interest and other liabilities


14,204,000


15,230,000


16,445,000

         Total liabilities


2,920,834,000


2,741,760,000


2,569,752,000








SHAREHOLDERS' EQUITY







   Common stock


309,772,000


305,488,000


304,819,000

   Retained earnings


60,132,000


40,904,000


27,722,000

   Accumulated other comprehensive income/(loss)


(4,034,000)


(5,581,000)


1,263,000

      Total shareholders' equity


365,870,000


340,811,000


333,804,000








      Total liabilities and shareholders' equity

$

3,286,704,000

$

3,082,571,000

$

2,903,556,000

 

 

MERCANTILE BANK CORPORATION

CONSOLIDATED REPORTS OF INCOME

(Unaudited)














THREE MONTHS ENDED


THREE MONTHS ENDED


TWELVE MONTHS ENDED


TWELVE MONTHS ENDED


December 31, 2017


December 31, 2016


December 31, 2017


December 31, 2016

INTEREST INCOME












   Loans, including fees

$

30,411,000


$

27,830,000


$

116,816,000


$

109,049,000

   Investment securities


2,036,000



1,724,000



7,631,000



9,007,000

   Other interest-earning assets


455,000



161,000



1,096,000



401,000

      Total interest income


32,902,000



29,715,000



125,543,000



118,457,000













INTEREST EXPENSE












   Deposits


2,819,000



1,940,000



9,362,000



7,549,000

   Short-term borrowings


48,000



57,000



190,000



211,000

   Federal Home Loan Bank advances


966,000



668,000



3,657,000



2,263,000

   Other borrowed money


667,000



615,000



2,586,000



2,567,000

      Total interest expense


4,500,000



3,280,000



15,795,000



12,590,000













      Net interest income


28,402,000



26,435,000



109,748,000



105,867,000













Provision for loan losses


600,000



600,000



2,950,000



2,900,000













      Net interest income after












         provision for loan losses


27,802,000



25,835,000



106,798,000



102,967,000













NONINTEREST INCOME












   Service charges on accounts


1,085,000



1,075,000



4,233,000



4,253,000

   Credit and debit card income


1,263,000



1,093,000



4,760,000



4,278,000

   Mortgage banking income


1,188,000



1,288,000



4,421,000



3,866,000

   Earnings on bank owned life insurance

337,000



331,000



2,731,000



1,264,000

   Other income


630,000



817,000



2,856,000



7,377,000

      Total noninterest income


4,503,000



4,604,000



19,001,000



21,038,000













NONINTEREST EXPENSE












   Salaries and benefits


11,601,000



10,565,000



45,397,000



43,524,000

   Occupancy


1,479,000



1,463,000



6,186,000



6,063,000

   Furniture and equipment


543,000



541,000



2,168,000



2,119,000

   Data processing costs


2,067,000



1,990,000



8,222,000



7,939,000

   FDIC insurance costs


252,000



128,000



960,000



1,236,000

   Other expense


3,906,000



3,707,000



16,783,000



16,237,000

      Total noninterest expense


19,848,000



18,394,000



79,716,000



77,118,000













      Income before federal income












         tax expense


12,457,000



12,045,000



46,083,000



46,887,000













Federal income tax expense


4,478,000



3,960,000



14,809,000



14,974,000













      Net Income

$

7,979,000


$

8,085,000


$

31,274,000


$

31,913,000













   Basic earnings per share


$0.48



$0.49



$1.90



$1.96

   Diluted earnings per share


$0.48



$0.49



$1.90



$1.96













   Average basic shares outstanding


16,525,625



16,352,359



16,478,968



16,292,086

   Average diluted shares outstanding


16,536,225



16,374,117



16,489,070



16,310,730

 

 

MERCANTILE BANK CORPORATION

CONSOLIDATED FINANCIAL HIGHLIGHTS

(Unaudited)


















Quarterly


Year-To-Date

(dollars in thousands except per share data)

2017


2017


2017


2017


2016







4th Qtr


3rd Qtr


2nd Qtr


1st Qtr


4th Qtr


2017


2016

EARNINGS















   Net interest income

$

28,402


28,644


27,193


25,509


26,435


109,748


105,867

   Provision for loan losses

$

600


1,000


750


600


600


2,950


2,900

   Noninterest income

$

4,503


4,605


4,042


5,851


4,604


19,001


21,038

   Noninterest expense

$

19,848


20,210


19,882


19,776


18,394


79,716


77,118

   Net income before federal income















      tax expense

$

12,457


12,039


10,603


10,984


12,045


46,083


46,887

   Net income

$

7,979


8,337


7,343


7,615


8,085


31,274


31,913

   Basic earnings per share

$

0.48


0.51


0.45


0.46


0.49


1.90


1.96

   Diluted earnings per share

$

0.48


0.51


0.45


0.46


0.49


1.90


1.96

   Average basic shares outstanding


16,525,625


16,483,492


16,471,060


16,434,647


16,352,359


16,478,968


16,292,086

   Average diluted shares outstanding


16,536,225


16,494,540


16,485,356


16,449,210


16,374,117


16,489,070


16,310,730
















PERFORMANCE RATIOS















   Return on average assets


0.97%


1.03%


0.96%


1.02%


1.05%


1.00%


1.07%

   Return on average equity


8.70%


9.21%


8.39%


8.99%


9.35%


8.82%


9.35%

   Net interest margin (fully tax-equivalent)

3.76%


3.83%


3.85%


3.73%


3.72%


3.79%


3.86%

   Efficiency ratio


60.32%


60.78%


63.65%


63.06%


59.26%


61.92%


60.77%

   Full-time equivalent employees


641


634


643


617


616


641


616
















YIELD ON ASSETS / COST OF FUNDS















   Yield on loans


4.76%


4.81%


4.69%


4.54%


4.65%


4.70%


4.65%

   Yield on securities


2.60%


2.50%


2.44%


2.35%


2.27%


2.47%


2.87%

   Yield on other interest-earning assets

1.29%


1.28%


0.99%


0.81%


0.51%


1.21%


0.51%

   Yield on total earning assets


4.35%


4.41%


4.37%


4.20%


4.18%


4.33%


4.31%

   Yield on total assets


4.04%


4.10%


4.05%


3.88%


3.87%


4.02%


3.99%

   Cost of deposits


0.45%


0.43%


0.35%


0.33%


0.33%


0.39%


0.33%

   Cost of borrowed funds


1.74%


1.75%


1.69%


1.53%


1.45%


1.68%


1.45%

   Cost of interest-bearing liabilities


0.88%


0.85%


0.77%


0.68%


0.68%


0.80%


0.66%

   Cost of funds (total earning assets)


0.59%


0.58%


0.52%


0.47%


0.46%


0.54%


0.45%

   Cost of funds (total assets)


0.55%


0.54%


0.48%


0.43%


0.42%


0.50%


0.42%
















PURCHASE ACCOUNTING ADJUSTMENTS













   Loan portfolio - increase interest income

$

683


1,757


1,336


832


1,672


4,608


4,925

   Trust preferred - increase interest expense

$

171


171


171


171


171


684


684

   Core deposit intangible - increase overhead

$

556


556


609


636


636


2,357


2,675
















MORTGAGE BANKING ACTIVITY















   Total mortgage loans originated

$

62,526


61,962


60,371


38,365


46,727


223,224


163,072

   Purchase mortgage loans originated

$

33,958


41,254


39,115


21,523


21,962


135,850


78,251

   Refinance mortgage loans originated

$

28,568


20,708


21,256


16,842


24,765


87,374


84,821

   Total mortgage loans sold

$

26,254


33,858


29,371


18,463


30,081


107,946


111,058

   Net gain on sale of mortgage loans

$

1,051


1,131


1,012


732


993


3,926


3,397
















CAPITAL















   Tangible equity to tangible assets


9.56%


9.54%


9.70%


9.77%


9.31%


9.56%


9.31%

   Tier 1 leverage capital ratio


11.28%


11.18%


11.49%


11.53%


11.17%


11.28%


11.17%

   Common equity risk-based capital ratio

10.76%


10.54%


10.65%


10.83%


10.88%


10.76%


10.88%

   Tier 1 risk-based capital ratio


12.23%


12.01%


12.15%


12.39%


12.47%


12.23%


12.47%

   Total risk-based capital ratio


12.89%


12.66%


12.79%


13.05%


13.13%


12.89%


13.13%

   Tier 1 capital

$

360,533


354,087


347,754


341,708


336,316


360,533


336,316

   Tier 1 plus tier 2 capital

$

380,035


373,280


366,048


359,984


354,278


380,035


354,278

   Total risk-weighted assets

$

2,948,013


2,949,011


2,861,605


2,757,616


2,697,727


2,948,013


2,697,727

   Book value per common share

$

22.05


21.99


21.69


21.13


20.76


22.05


20.76

   Tangible book value per common share

$

18.61


18.49


18.16


17.56


17.14


18.61


17.14

   Cash dividend per common share

$

0.19


0.19


0.18


0.18


0.67


0.74


1.16
















ASSET QUALITY















   Gross loan charge-offs

$

920


709


1,150


456


970


3,235


2,205

   Recoveries

$

628


607


419


171


805


1,825


1,585

   Net loan charge-offs (recoveries)

$

292


102


731


285


165


1,410


620

   Net loan charge-offs to average loans

0.05%


0.02%


0.12%


0.05%


0.03%


0.06%


0.03%

   Allowance for loan losses

$

19,501


19,193


18,295


18,276


17,961


19,501


17,961

   Allowance to originated loans


0.88%


0.88%


0.86%


0.92%


0.95%


0.88%


0.95%

   Nonperforming loans

$

7,143


8,231


6,450


7,292


5,939


7,143


5,939

   Other real estate/repossessed assets

$

2,260


2,327


789


495


469


2,260


469

   Nonperforming loans to total loans


0.28%


0.32%


0.26%


0.30%


0.25%


0.28%


0.25%

   Nonperforming assets to total assets


0.29%


0.32%


0.23%


0.26%


0.21%


0.29%


0.21%
















NONPERFORMING ASSETS - COMPOSITION













   Residential real estate:















      Land development

$

0


0


0


0


16


0


16

      Construction

$

0


0


0


0


0


0


0

      Owner occupied / rental

$

3,574


3,648


3,367


2,972


2,883


3,574


2,883

   Commercial real estate:















      Land development

$

35


50


65


80


95


35


95

      Construction

$

0


0


0


0


0


0


0

      Owner occupied  

$

4,272


4,627


1,313


1,221


610


4,272


610

      Non-owner occupied

$

36


84


400


421


488


36


488

   Non-real estate:















      Commercial assets

$

1,444


2,126


2,081


3,076


2,293


1,444


2,293

      Consumer assets

$

42


23


13


17


23


42


23

   Total nonperforming assets


9,403


10,558


7,239


7,787


6,408


9,403


6,408
















NONPERFORMING ASSETS - RECON















   Beginning balance

$

10,558


7,239


7,787


6,408


5,459


6,408


6,737

   Additions - originated loans

$

402


4,789


1,774


2,987


2,953


9,952


6,344

   Merger-related activity

$

0


210


16


0


33


226


33

   Return to performing status

$

0


(120)


0


(113)


(13)


(233)


(13)

   Principal payments

$

(688)


(1,089)


(1,168)


(1,289)


(1,386)


(4,234)


(4,164)

   Sale proceeds

$

(101)


(373)


(147)


(56)


(308)


(677)


(1,428)

   Loan charge-offs

$

(754)


(91)


(953)


(135)


(263)


(1,933)


(981)

   Valuation write-downs

$

(14)


(7)


(70)


(15)


(67)


(106)


(120)

   Ending balance

$

9,403


10,558


7,239


7,787


6,408


9,403


6,408
















LOAN PORTFOLIO COMPOSITION















   Commercial:















      Commercial & industrial

$

753,764


776,562


780,816


757,219


713,903


753,764


713,903

      Land development & construction

$

29,872


28,575


29,027


31,924


34,828


29,872


34,828

      Owner occupied comm'l R/E

$

526,327


485,347


491,633


452,382


450,464


526,327


450,464

      Non-owner occupied comm'l R/E

$

791,685


805,167


783,036


768,565


748,269


791,685


748,269

      Multi-family & residential rental

$

101,918


119,170


114,081


113,257


117,883


101,918


117,883

         Total commercial

$

2,203,566


2,214,821


2,198,593


2,123,347


2,065,347


2,203,566


2,065,347

   Retail:















      1-4 family mortgages

$

254,560


236,075


220,697


205,850


195,226


254,560


195,226

      Home equity & other consumer

$

100,426


103,376


107,991


112,117


118,047


100,426


118,047

         Total retail

$

354,986


339,451


328,688


317,967


313,273


354,986


313,273

         Total loans

$

2,558,552


2,554,272


2,527,281


2,441,314


2,378,620


2,558,552


2,378,620
















END OF PERIOD BALANCES















   Loans

$

2,558,552


2,554,272


2,527,281


2,441,314


2,378,620


2,558,552


2,378,620

   Securities

$

346,780


341,126


333,294


341,677


336,086


346,780


336,086

   Other interest-earning assets

$

144,974


123,110


48,762


12,663


133,396


144,974


133,396

   Total earning assets (before allowance)

$

3,050,306


3,018,508


2,909,337


2,795,654


2,848,102


3,050,306


2,848,102

   Total assets

$

3,286,704


3,254,655


3,143,336


3,018,919


3,082,571


3,286,704


3,082,571

   Noninterest-bearing deposits

$

866,380


826,038


800,718


757,706


810,600


866,380


810,600

   Interest-bearing deposits

$

1,655,985


1,663,005


1,570,003


1,520,310


1,564,385


1,655,985


1,564,385

   Total deposits

$

2,522,365


2,489,043


2,370,721


2,278,016


2,374,985


2,522,365


2,374,985

   Total borrowed funds

$

387,468


390,868


404,370


380,009


354,902


387,468


354,902

   Total interest-bearing liabilities

$

2,043,453


2,053,873


1,974,373


1,900,319


1,919,287


2,043,453


1,919,287

   Shareholders' equity

$

365,870


362,546


357,499


348,050


340,811


365,870


340,811
















AVERAGE BALANCES















   Loans

$

2,534,729


2,534,364


2,472,489


2,390,030


2,372,510


2,483,440


2,345,308

   Securities

$

346,318


339,125


338,045


339,537


336,493


340,770


340,172

   Other interest-earning assets

$

138,095


116,851


46,250


61,376


127,790


90,925


77,863

   Total earning assets (before allowance)

$

3,019,142


2,990,340


2,856,784


2,790,943


2,836,793


2,915,135


2,763,343

   Total assets

$

3,248,828


3,220,053


3,081,542


3,016,871


3,064,974


3,142,673


2,987,784

   Noninterest-bearing deposits

$

849,751


805,650


785,705


766,031


773,137


802,024


715,550

   Interest-bearing deposits

$

1,635,727


1,648,235


1,531,399


1,542,078


1,561,539


1,589,778


1,567,846

   Total deposits

$

2,485,478


2,453,885


2,317,104


2,308,109


2,334,676


2,391,802


2,283,396

   Total borrowed funds

$

384,168


393,910


400,508


352,614


366,905


382,917


347,134

   Total interest-bearing liabilities

$

2,019,895


2,042,145


1,931,907


1,894,692


1,928,444


1,972,695


1,914,980

   Shareholders' equity

$

363,823


359,131


351,216


343,344


343,122


354,448


341,340

 

Cision View original content:http://www.prnewswire.com/news-releases/mercantile-bank-corporation-announces-strong-fourth-quarter-and-full-year-2017-results-300582651.html

SOURCE Mercantile Bank Corporation