20.07.2021 11:01:00
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Mercantile Bank Corporation Reports Strong Second Quarter 2021 Results
GRAND RAPIDS, Mich., July 20, 2021 /PRNewswire/ -- Mercantile Bank Corporation (NASDAQ: MBWM) ("Mercantile") reported net income of $18.1 million, or $1.12 per diluted share, for the second quarter of 2021, compared with net income of $8.7 million, or $0.54 per diluted share, for the respective prior-year period. Net income during the first six months of 2021 totaled $32.3 million, or $2.00 per diluted share, compared to $19.4 million, or $1.19 per diluted share, during the first six months of 2020.
"We are very pleased to report another quarter of strong financial performance," said Robert B. Kaminski, Jr., President and Chief Executive Officer of Mercantile. "The growth in core commercial loans during the first half of 2021 reflects our unwavering focus on meeting the traditional credit needs of our existing clients and developing new relationships, while at the same time assisting customers with Paycheck Protection Program lending activities.
"As evidenced by the continuing strength in mortgage banking income, our strategic initiatives designed to increase market share remained effective during the period. As Mercantile employees return to their physical locations in light of currently improving COVID-19 conditions, I would like to personally thank each of them for their exceptional efforts to assist our customers with their banking needs during these challenging times. The resiliency displayed by our team members and clients during the pandemic has been truly remarkable, and we look forward to continuing to build mutually beneficial relationships with existing and prospective customers."
Second quarter highlights include:
- Strong earnings and capital position
- Robust mortgage banking income and growth in other key fee income categories
- Loan loss reserve release, primarily reflecting improved economic and business conditions
- Continued strength in asset quality metrics
- Solid growth in core commercial loans and residential mortgage loans
- Sustained strength in commercial loan and residential mortgage loan pipelines
- Further growth in local deposits
- Announced third quarter 2021 regular cash dividend of $0.30 per common share, an increase of 3.4 percent from the regular cash dividend paid during the second quarter of 2021
Operating Results
Total revenue, which consists of net interest income and noninterest income, was $45.4 million during the second quarter of 2021, up $3.9 million, or 9.3 percent, from the prior-year second quarter. Net interest income during the second quarter of 2021 was $30.9 million, up from $30.6 million during the respective 2020 period due to the positive impact of earning asset growth, which more than offset a lower net interest margin. Noninterest income totaled $14.6 million during the second quarter of 2021, up $3.6 million from the second quarter of 2020, mainly due to increased interest rate swap income, a gain on the sale of a branch facility, and higher credit and debit card income. The net interest margin was 2.76 percent in the second quarter of 2021, compared to 3.17 percent in the prior-year second quarter. The decreased net interest margin resulted from the lower interest rate environment and a higher level of excess liquidity.
The yield on average earning assets declined from 3.85 percent during the second quarter of 2020 to 3.20 percent during the respective 2021 period mainly due to a change in earning asset mix and decreased yields on commercial loans and securities. The lower yield on commercial loans primarily stemmed from the origination of new loans and renewal of maturing loans in the decreased interest rate environment. The decreased yield on securities mainly reflected a lower level of accelerated discount accretion on called U.S. Government agency bonds and reduced yields on newly purchased bonds, attributed to the declining interest rate environment. Accelerated discount accretion totaled $0.9 million during the second quarter of 2020; no accelerated discount accretion was recorded during the second quarter of 2021.
A significant volume of excess on-balance sheet liquidity, which initially surfaced in the second quarter of 2020 as a result of the COVID-19 environment and has persisted during the remainder of 2020 and first six months of 2021, negatively impacted both the yield on average earning assets and the net interest margin by 35 basis points to 40 basis points during the second quarter and first six months of 2021. The excess funds, consisting primarily of low-yielding deposits with the Federal Reserve Bank of Chicago, are mainly a product of federal government stimulus programs, lower business and consumer investing and spending, and Paycheck Protection Program forgiveness activities.
The cost of funds decreased from 0.68 percent during the second quarter of 2020 to 0.44 percent during the current-year second quarter, primarily due to a change in funding mix, consisting of an increase in lower-costing non-time deposits as a percentage of total funding sources, and lower rates paid on local time deposits, reflecting the declining interest rate environment.
Mercantile recorded a negative provision expense of $3.1 million during the second quarter of 2021, compared to a provision expense of $7.6 million during the prior-year second quarter. The negative provision expense recorded during the current-year second quarter was mainly comprised of a reduced allocation associated with the economic and business conditions environmental factor, reflecting improvement in both current and forecasted economic conditions. The provision expense recorded during the second quarter of 2020 mainly consisted of an allocation related to a newly created COVID-19 pandemic environmental factor and an increased allocation related to the existing economic and business conditions environmental factor.
Noninterest income during the second quarter of 2021 was $14.6 million, compared to $11.0 million during the prior-year second quarter. Noninterest income during the current-year second quarter included a $1.1 million gain on the sale of a branch facility. Excluding the impact of this transaction, noninterest income increased $2.5 million, or nearly 23 percent, during the second quarter of 2021 compared to the respective 2020 period. The higher level of noninterest income mainly reflected fee income generated from an interest rate swap program that was introduced during the fourth quarter of 2020 and increased credit and debit card income. The interest rate swap program provides certain commercial borrowers with a longer-term fixed-rate option and assists Mercantile in managing associated longer-term interest rate risk. Growth in service charges on accounts and payroll service fees also contributed to the increased level of noninterest income. Mortgage banking income remained solid during the second quarter of 2021, slightly exceeding the amount recorded during the prior-year second quarter as an increase in purchase mortgage loans offset a decline in refinance mortgage loans.
Noninterest expense totaled $26.2 million during the second quarter of 2021, up $3.0 million, or 12.8 percent, from the second quarter of 2020. The higher level of expense primarily resulted from increased compensation costs, mainly reflecting a bonus accrual, increased health insurance costs, annual employee merit pay increases, and a lower level of deferred salary expense related to Paycheck Protection Program loan originations. No bonus accrual was recorded during the second quarter of 2020 due to COVID-19 and associated weakened economic environment. The increase in health insurance costs mainly reflected a higher level of claims, some of which resulted from the treatment of COVID-19 related medical conditions.
Mr. Kaminski commented, "Despite an expected reduction in refinance activity, we were able to record another quarter of strong mortgage banking income, in large part reflecting increased purchase activity and the ongoing success of strategic initiatives that were implemented to boost market share. In an effort to enhance mortgage loan production, we will continue to identify opportunities to add lending talent to the mortgage team and expand our market presence. Based on the current loan pipeline and application volume, along with our recent lender hires and entrance into new markets, we believe solid mortgage banking income can be realized in future periods.
"We remain committed to improving our noninterest income revenue streams and are very pleased with the success of the recently introduced interest rate swap program, along with the growth in other key fee income categories. Our desire to meet growth objectives in a cost-conscious manner remains a priority, and we will continue to regularly review our branch system and other expense categories to identify potential opportunities to conduct business more efficiently."
Balance Sheet
As of June 30, 2021, total assets were $4.76 billion, up $320 million, or 7.2 percent, from December 31, 2020. Total loans increased $55.4 million during the first six months of 2021, primarily reflecting net growth in core commercial loans and residential mortgage loans of $135 million and $42.4 million, respectively, which more than offset a net reduction in Paycheck Protection Program loans of $120 million. As of June 30, 2021, unfunded commitments on commercial construction and development loans totaled approximately $167 million, which are expected to be largely funded over the next 12 to 18 months. Interest-earning deposits increased $120 million during the first six months of 2021, mainly reflecting ongoing local deposit growth, Paycheck Protection Program forgiveness activities and an increase in sweep accounts, which outpaced loan growth and an expanded securities portfolio.
Ray Reitsma, President of Mercantile Bank of Michigan, noted, "During the second quarter, we continued our efforts to grow the commercial loan portfolio by assessing and meeting the credit needs of our existing customers and fostering relationships with new clients. We remain focused on growing the portfolio in a prudent manner, with emphasis on proper underwriting and risk-based pricing. We are very pleased with the levels of net core commercial loan and residential mortgage loan growth during the quarter, along with the ongoing strength of our commercial loan and residential mortgage loan pipelines."
Excluding the impact of Paycheck Protection Program loan originations, commercial and industrial loans and owner-occupied commercial real estate loans together represented approximately 55 percent of total commercial loans as of June 30, 2021, a level that has remained relatively consistent and in line with internal expectations.
Total deposits at June 30, 2021, were $3.67 billion, up $260 million, or 7.6 percent, from December 31, 2020. Local deposits were up $276 million during the first six months of 2021, while brokered deposits were down $16.0 million during the same time period. The growth in local deposits, which occurred despite typical and expected seasonal business deposit withdrawals used for bonus and tax payments, primarily reflected federal government stimulus payments and reduced business and consumer investing and spending, along with Paycheck Protection Program loan proceeds being deposited into customers' accounts at the time the loans were originated and remaining on deposit as of June 30, 2021. Wholesale funds were $425 million, or approximately 10 percent of total funds, as of June 30, 2021, compared to $441 million, or approximately 11 percent of total funds, as of December 31, 2020.
Asset Quality
Nonperforming assets totaled $3.2 million, $4.1 million, and $3.4 million at June 30, 2021, December 31, 2020, and June 30, 2020, respectively, with each dollar amount representing 0.1 percent of total assets as of the respective dates. During the second quarter of 2021, loan charge-offs totaled $0.1 million, while recoveries of prior period loan charge-offs equaled $0.4 million, providing for net loan recoveries of $0.3 million, or an annualized 0.04 percent of average total loans.
Mr. Reitsma commented, "Our asset quality metrics have remained strong during the COVID-19 pandemic. The ongoing low levels of past due loans and nonperforming assets are a testament of our commitment to underwriting loans in a sound manner and the abilities of our commercial borrowers' management teams to effectively guide their entities through pandemic-related challenges."
Capital Position
Shareholders' equity totaled $452 million as of June 30, 2021, an increase of $10.3 million from year-end 2020. Mercantile Bank of Michigan's capital position remains above "well-capitalized" with a total risk-based capital ratio of 13.0 percent as of June 30, 2021, compared to 13.5 percent at December 31, 2020. At June 30, 2021, Mercantile Bank of Michigan had approximately $110 million in excess of the 10.0 percent minimum regulatory threshold required to be considered a "well-capitalized" institution. Mercantile reported 16,007,185 total shares outstanding at June 30, 2021.
As part of $20.0 million common stock repurchase programs announced in May of 2019 and 2021, respectively, Mercantile repurchased approximately 229,000 shares for $7.3 million, or a weighted average all-in cost per share of $31.99, during the second quarter of 2021 and approximately 347,000 shares for $10.9 million, or a weighted average all-in cost per share of $31.28, during the first six months of 2021. The 2021 program replaced the 2019 program, which was nearing exhaustion.
Mr. Kaminski concluded, "Although the challenges associated with the COVID-19 pandemic appear to have diminished, we will closely monitor any new developments and adjust our response plan as deemed necessary. Our enduring strong operating performance and overall financial position have enabled us to continue the cash dividend program and provide shareholders with a cash return on their investment. We were pleased to announce earlier today that our Board of Directors declared an increased third quarter 2021 regular cash dividend. We are focused on remaining a steady high performer that provides consistent and profitable growth and believe we are well positioned to produce solid operating results during the last six months of 2021 and beyond."
Investor Presentation
Mercantile has prepared presentation materials that management intends to use during its previously announced second quarter 2021 conference call on Tuesday, July 20, 2021, at 10:00 a.m. Eastern Time, and from time to time thereafter in presentations about the Company's operations and performance. The Investor Presentation also contains information relating to Mercantile's COVID-19 pandemic response plan. These materials have been furnished to the U.S. Securities and Exchange Commission concurrently with this press release, and are also available on Mercantile's website at www.mercbank.com.
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 $4.7 billion and operates 43 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 statements or information that may constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements can be identified by words such as: "anticipate," "intend," "plan," "goal," "seek," "believe," "project," "estimate," "expect," "strategy," "future," "likely," "may," "should," "will," and similar references to future periods. Any such statements 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; increasing rates of inflation and slower growth rates; demand for products and services; the degree of competition by traditional and nontraditional financial services companies; changes in banking regulation or actions by bank regulators; changes in tax laws; changes in prices, levies, and assessments; the impact of technological advances; potential cyber-attacks, information security breaches and other criminal activities; litigation liabilities; governmental and regulatory policy changes; the outcomes of existing or future contingencies; trends in customer behavior as well as their ability to repay loans; changes in local real estate values; changes in the method of determining Libor and the phase-out of Libor; changes in the national and local economies, including the ongoing disruption to financial market and other economic activity caused by the COVID-19 pandemic; and other factors, including those expressed as 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. Investors are cautioned not to place undue reliance on any forward-looking statements contained herein.
FOR FURTHER INFORMATION: | ||
Robert B. Kaminski, Jr. | Charles Christmas | |
President & CEO | Executive Vice President & CFO | |
616-726-1502 | 616-726-1202 | |
rkaminski@mercbank.com | cchristmas@mercbank.com |
Mercantile Bank Corporation | ||||||
Second Quarter 2021 Results | ||||||
MERCANTILE BANK CORPORATION | ||||||
CONSOLIDATED BALANCE SHEETS | ||||||
(Unaudited) | ||||||
JUNE 30, | DECEMBER 31, | JUNE 30, | ||||
2021 | 2020 | 2020 | ||||
ASSETS | ||||||
Cash and due from banks | $ | 75,893,000 | $ | 62,832,000 | $ | 84,516,000 |
Interest-earning deposits | 683,638,000 | 563,174,000 | 386,711,000 | |||
Total cash and cash equivalents | 759,531,000 | 626,006,000 | 471,227,000 | |||
Securities available for sale | 506,125,000 | 387,347,000 | 307,661,000 | |||
Federal Home Loan Bank stock | 18,002,000 | 18,002,000 | 18,002,000 | |||
Loans | 3,248,841,000 | 3,193,470,000 | 3,291,919,000 | |||
Allowance for loan losses | (35,913,000) | (37,967,000) | (32,246,000) | |||
Loans, net | 3,212,928,000 | 3,155,503,000 | 3,259,673,000 | |||
Premises and equipment, net | 58,250,000 | 58,959,000 | 59,155,000 | |||
Bank owned life insurance | 72,679,000 | 72,131,000 | 70,900,000 | |||
Goodwill | 49,473,000 | 49,473,000 | 49,473,000 | |||
Core deposit intangible, net | 1,827,000 | 2,436,000 | 3,072,000 | |||
Mortgage loans held for sale | 27,720,000 | 22,888,000 | 41,137,000 | |||
Other assets | 50,879,000 | 44,599,000 | 34,079,000 | |||
Total assets | $ | 4,757,414,000 | $ | 4,437,344,000 | $ | 4,314,379,000 |
LIABILITIES AND SHAREHOLDERS' EQUITY | ||||||
Deposits: | ||||||
Noninterest-bearing | $ | 1,620,829,000 | $ | 1,433,403,000 | $ | 1,445,620,000 |
Interest-bearing | 2,050,442,000 | 1,978,150,000 | 1,816,660,000 | |||
Total deposits | 3,671,271,000 | 3,411,553,000 | 3,262,280,000 | |||
Securities sold under agreements to repurchase | 169,737,000 | 118,365,000 | 167,527,000 | |||
Federal Home Loan Bank advances | 394,000,000 | 394,000,000 | 394,000,000 | |||
Subordinated debentures | 47,904,000 | 47,563,000 | 47,222,000 | |||
Accrued interest and other liabilities | 22,614,000 | 24,309,000 | 18,129,000 | |||
Total liabilities | 4,305,526,000 | 3,995,790,000 | 3,889,158,000 | |||
SHAREHOLDERS' EQUITY | ||||||
Common stock | 293,232,000 | 302,029,000 | 300,897,000 | |||
Retained earnings | 157,150,000 | 134,039,000 | 118,239,000 | |||
Accumulated other comprehensive income/(loss) | 1,506,000 | 5,486,000 | 6,085,000 | |||
Total shareholders' equity | 451,888,000 | 441,554,000 | 425,221,000 | |||
Total liabilities and shareholders' equity | $ | 4,757,414,000 | $ | 4,437,344,000 | $ | 4,314,379,000 |
Mercantile Bank Corporation | |||||||||||||
Second Quarter 2021 Results | |||||||||||||
MERCANTILE BANK CORPORATION | |||||||||||||
CONSOLIDATED REPORTS OF INCOME | |||||||||||||
(Unaudited) | |||||||||||||
THREE MONTHS ENDED | THREE MONTHS ENDED | SIX MONTHS ENDED | SIX MONTHS ENDED | ||||||||||
June 30, 2021 | June 30, 2020 | June 30, 2021 | June 30, 2020 | ||||||||||
INTEREST INCOME | |||||||||||||
Loans, including fees | $ | 33,789,000 | $ | 34,322,000 | $ | 66,774,000 | $ | 67,764,000 | |||||
Investment securities | 1,802,000 | 2,749,000 | 3,434,000 | 6,766,000 | |||||||||
Other interest-earning assets | 183,000 | 93,000 | 351,000 | 568,000 | |||||||||
Total interest income | 35,774,000 | 37,164,000 | 70,559,000 | 75,098,000 | |||||||||
INTEREST EXPENSE | |||||||||||||
Deposits | 2,346,000 | 3,700,000 | 5,063,000 | 8,342,000 | |||||||||
Short-term borrowings | 40,000 | 55,000 | 76,000 | 94,000 | |||||||||
Federal Home Loan Bank advances | 2,050,000 | 2,214,000 | 4,077,000 | 4,427,000 | |||||||||
Other borrowed money | 467,000 | 624,000 | 939,000 | 1,348,000 | |||||||||
Total interest expense | 4,903,000 | 6,593,000 | 10,155,000 | 14,211,000 | |||||||||
Net interest income | 30,871,000 | 30,571,000 | 60,404,000 | 60,887,000 | |||||||||
Provision for loan losses | (3,100,000) | 7,600,000 | (2,800,000) | 8,350,000 | |||||||||
Net interest income after | |||||||||||||
provision for loan losses | 33,971,000 | 22,971,000 | 63,204,000 | 52,537,000 | |||||||||
NONINTEREST INCOME | |||||||||||||
Service charges on accounts | 1,209,000 | 1,045,000 | 2,363,000 | 2,267,000 | |||||||||
Mortgage banking income | 7,695,000 | 7,640,000 | 16,495,000 | 10,267,000 | |||||||||
Credit and debit card income | 1,920,000 | 1,374,000 | 3,598,000 | 2,735,000 | |||||||||
Interest rate swap income | 1,495,000 | 0 | 2,148,000 | 0 | |||||||||
Payroll services | 405,000 | 370,000 | 962,000 | 947,000 | |||||||||
Earnings on bank owned life insurance | 297,000 | 307,000 | 574,000 | 643,000 | |||||||||
Gain on sale of branch | 1,058,000 | 0 | 1,058,000 | 0 | |||||||||
Other income | 477,000 | 248,000 | 821,000 | 675,000 | |||||||||
Total noninterest income | 14,556,000 | 10,984,000 | 28,019,000 | 17,534,000 | |||||||||
NONINTEREST EXPENSE | |||||||||||||
Salaries and benefits | 16,194,000 | 14,126,000 | 31,279,000 | 27,654,000 | |||||||||
Occupancy | 1,977,000 | 1,862,000 | 3,991,000 | 3,921,000 | |||||||||
Furniture and equipment | 902,000 | 851,000 | 1,791,000 | 1,629,000 | |||||||||
Data processing costs | 2,775,000 | 2,633,000 | 5,392,000 | 5,117,000 | |||||||||
Other expense | 4,344,000 | 3,744,000 | 8,856,000 | 7,835,000 | |||||||||
Total noninterest expense | 26,192,000 | 23,216,000 | 51,309,000 | 46,156,000 | |||||||||
Income before federal income | |||||||||||||
tax expense | 22,335,000 | 10,739,000 | 39,914,000 | 23,915,000 | |||||||||
Federal income tax expense | 4,244,000 | 2,041,000 | 7,583,000 | 4,545,000 | |||||||||
Net Income | $ | 18,091,000 | $ | 8,698,000 | $ | 32,331,000 | $ | 19,370,000 | |||||
Basic earnings per share | $1.12 | $0.54 | $2.00 | $1.19 | |||||||||
Diluted earnings per share | $1.12 | $0.54 | $2.00 | $1.19 | |||||||||
Average basic shares outstanding | 16,116,070 | 16,212,500 | 16,199,096 | 16,281,391 | |||||||||
Average diluted shares outstanding | 16,116,666 | 16,213,264 | 16,199,620 | 16,282,341 |
Mercantile Bank Corporation | ||||||||||||||
Second Quarter 2021 Results | ||||||||||||||
MERCANTILE BANK CORPORATION | ||||||||||||||
CONSOLIDATED FINANCIAL HIGHLIGHTS | ||||||||||||||
(Unaudited) | ||||||||||||||
Quarterly | Year-To-Date | |||||||||||||
(dollars in thousands except per share data) | 2021 | 2021 | 2020 | 2020 | 2020 | |||||||||
2nd Qtr | 1st Qtr | 4th Qtr | 3rd Qtr | 2nd Qtr | 2021 | 2020 | ||||||||
EARNINGS | ||||||||||||||
Net interest income | $ | 30,871 | 29,533 | 31,849 | 29,509 | 30,571 | 60,404 | 60,887 | ||||||
Provision for loan losses | $ | (3,100) | 300 | 2,500 | 3,200 | 7,600 | (2,800) | 8,350 | ||||||
Noninterest income | $ | 14,556 | 13,463 | 14,333 | 13,307 | 10,984 | 28,019 | 17,534 | ||||||
Noninterest expense | $ | 26,192 | 25,117 | 25,941 | 26,423 | 23,216 | 51,309 | 46,156 | ||||||
Net income before federal income | ||||||||||||||
tax expense | $ | 22,335 | 17,579 | 17,741 | 13,193 | 10,739 | 39,914 | 23,915 | ||||||
Net income | $ | 18,091 | 14,239 | 14,082 | 10,686 | 8,698 | 32,331 | 19,370 | ||||||
Basic earnings per share | $ | 1.12 | 0.87 | 0.87 | 0.66 | 0.54 | 2.00 | 1.19 | ||||||
Diluted earnings per share | $ | 1.12 | 0.87 | 0.87 | 0.66 | 0.54 | 2.00 | 1.19 | ||||||
Average basic shares outstanding | 16,116,070 | 16,283,044 | 16,279,052 | 16,233,196 | 16,212,500 | 16,199,096 | 16,281,391 | |||||||
Average diluted shares outstanding | 16,116,666 | 16,283,490 | 16,279,243 | 16,233,666 | 16,213,264 | 16,199,620 | 16,282,341 | |||||||
PERFORMANCE RATIOS | ||||||||||||||
Return on average assets | 1.53% | 1.26% | 1.25% | 0.98% | 0.85% | 1.40% | 1.01% | |||||||
Return on average equity | 16.27% | 13.02% | 12.75% | 9.86% | 8.26% | 14.66% | 9.23% | |||||||
Net interest margin (fully tax-equivalent) | 2.76% | 2.77% | 3.00% | 2.86% | 3.17% | 2.76% | 3.38% | |||||||
Efficiency ratio | 57.66% | 58.42% | 56.17% | 61.71% | 55.87% | 58.03% | 58.86% | |||||||
Full-time equivalent employees | 634 | 621 | 621 | 618 | 637 | 634 | 637 | |||||||
YIELD ON ASSETS / COST OF FUNDS | ||||||||||||||
Yield on loans | 3.99% | 4.03% | 4.34% | 4.03% | 4.18% | 4.01% | 4.42% | |||||||
Yield on securities | 1.54% | 1.61% | 1.69% | 2.26% | 3.37% | 1.57% | 4.06% | |||||||
Yield on other interest-earning assets | 0.12% | 0.11% | 0.12% | 0.12% | 0.15% | 0.12% | 0.55% | |||||||
Yield on total earning assets | 3.20% | 3.26% | 3.55% | 3.45% | 3.85% | 3.23% | 4.17% | |||||||
Yield on total assets | 3.02% | 3.09% | 3.35% | 3.25% | 3.62% | 3.05% | 3.91% | |||||||
Cost of deposits | 0.25% | 0.31% | 0.37% | 0.41% | 0.48% | 0.28% | 0.58% | |||||||
Cost of borrowed funds | 1.73% | 1.78% | 1.75% | 1.78% | 1.91% | 1.75% | 2.09% | |||||||
Cost of interest-bearing liabilities | 0.74% | 0.82% | 0.91% | 0.99% | 1.11% | 0.78% | 1.23% | |||||||
Cost of funds (total earning assets) | 0.44% | 0.49% | 0.55% | 0.59% | 0.68% | 0.46% | 0.79% | |||||||
Cost of funds (total assets) | 0.41% | 0.47% | 0.51% | 0.56% | 0.64% | 0.44% | 0.74% | |||||||
PURCHASE ACCOUNTING ADJUSTMENTS | ||||||||||||||
Loan portfolio - increase interest income | $ | 54 | 51 | 158 | 332 | 169 | 105 | 454 | ||||||
Trust preferred - increase interest expense | $ | 171 | 171 | 171 | 171 | 171 | 342 | 342 | ||||||
Core deposit intangible - increase overhead | $ | 291 | 318 | 318 | 318 | 371 | 609 | 768 | ||||||
MORTGAGE BANKING ACTIVITY | ||||||||||||||
Total mortgage loans originated | $ | 237,299 | 245,200 | 218,904 | 237,195 | 275,486 | 482,499 | 408,345 | ||||||
Purchase mortgage loans originated | $ | 144,476 | 81,529 | 99,490 | 93,068 | 58,015 | 226,005 | 104,553 | ||||||
Refinance mortgage loans originated | $ | 92,823 | 163,671 | 119,414 | 144,127 | 217,471 | 256,494 | 303,792 | ||||||
Total saleable mortgage loans | $ | 140,497 | 195,655 | 159,942 | 191,318 | 225,665 | 336,152 | 320,992 | ||||||
Income on sale of mortgage loans | $ | 7,690 | 9,182 | 9,476 | 10,199 | 7,760 | 16,872 | 9,846 | ||||||
CAPITAL | ||||||||||||||
Tangible equity to tangible assets | 8.51% | 8.36% | 8.89% | 8.69% | 8.74% | 8.51% | 8.74% | |||||||
Tier 1 leverage capital ratio | 9.47% | 9.67% | 9.77% | 9.80% | 10.21% | 9.47% | 10.21% | |||||||
Common equity risk-based capital ratio | 10.87% | 11.11% | 11.34% | 11.37% | 11.34% | 10.87% | 11.34% | |||||||
Tier 1 risk-based capital ratio | 12.11% | 12.41% | 12.68% | 12.74% | 12.74% | 12.11% | 12.74% | |||||||
Total risk-based capital ratio | 13.09% | 13.51% | 13.80% | 13.82% | 13.73% | 13.09% | 13.73% | |||||||
Tier 1 capital | $ | 445,410 | 437,567 | 430,146 | 420,225 | 412,526 | 445,410 | 412,526 | ||||||
Tier 1 plus tier 2 capital | $ | 481,324 | 476,462 | 468,113 | 455,797 | 444,772 | 481,324 | 444,772 | ||||||
Total risk-weighted assets | $ | 3,677,180 | 3,526,161 | 3,391,563 | 3,298,047 | 3,238,444 | 3,677,180 | 3,238,444 | ||||||
Book value per common share | $ | 28.23 | 27.21 | 27.04 | 26.59 | 26.20 | 28.23 | 26.20 | ||||||
Tangible book value per common share | $ | 25.03 | 24.02 | 23.86 | 23.37 | 22.96 | 25.03 | 22.96 | ||||||
Cash dividend per common share | $ | 0.29 | 0.29 | 0.28 | 0.28 | 0.28 | 0.58 | 0.56 | ||||||
ASSET QUALITY | ||||||||||||||
Gross loan charge-offs | $ | 68 | 53 | 340 | 124 | 335 | 121 | 375 | ||||||
Recoveries | $ | 386 | 481 | 234 | 250 | 153 | 867 | 382 | ||||||
Net loan charge-offs (recoveries) | $ | (318) | (428) | 106 | (126) | 182 | (746) | (7) | ||||||
Net loan charge-offs to average loans | (0.04%) | (0.05%) | 0.01% | (0.02%) | 0.02% | (0.05%) | < (0.01%) | |||||||
Allowance for loan losses | $ | 35,913 | 38,695 | 37,967 | 35,572 | 32,246 | 35,913 | 32,246 | ||||||
Allowance to loans | 1.11% | 1.15% | 1.19% | 1.07% | 0.98% | 1.11% | 0.98% | |||||||
Allowance to loans excluding PPP loans | 1.20% | 1.33% | 1.33% | 1.27% | 1.16% | 1.20% | 1.16% | |||||||
Nonperforming loans | $ | 2,746 | 2,793 | 3,384 | 4,141 | 3,212 | 2,746 | 3,212 | ||||||
Other real estate/repossessed assets | $ | 404 | 374 | 701 | 512 | 198 | 404 | 198 | ||||||
Nonperforming loans to total loans | 0.08% | 0.08% | 0.11% | 0.12% | 0.10% | 0.08% | 0.10% | |||||||
Nonperforming assets to total assets | 0.07% | 0.07% | 0.09% | 0.11% | 0.08% | 0.07% | 0.08% | |||||||
NONPERFORMING ASSETS - COMPOSITION | ||||||||||||||
Residential real estate: | ||||||||||||||
Land development | $ | 34 | 34 | 35 | 36 | 36 | 34 | 36 | ||||||
Construction | $ | 0 | 0 | 0 | 198 | 198 | 0 | 198 | ||||||
Owner occupied / rental | $ | 2,137 | 2,305 | 2,607 | 2,597 | 2,750 | 2,137 | 2,750 | ||||||
Commercial real estate: | ||||||||||||||
Land development | $ | 0 | 0 | 0 | 0 | 0 | 0 | 0 | ||||||
Construction | $ | 0 | 0 | 0 | 0 | 0 | 0 | 0 | ||||||
Owner occupied | $ | 363 | 646 | 1,232 | 1,576 | 275 | 363 | 275 | ||||||
Non-owner occupied | $ | 0 | 0 | 22 | 23 | 25 | 0 | 25 | ||||||
Non-real estate: | ||||||||||||||
Commercial assets | $ | 606 | 169 | 172 | 198 | 98 | 606 | 98 | ||||||
Consumer assets | $ | 10 | 13 | 17 | 25 | 28 | 10 | 28 | ||||||
Total nonperforming assets | 3,150 | 3,167 | 4,085 | 4,653 | 3,410 | 3,150 | 3,410 | |||||||
NONPERFORMING ASSETS - RECON | ||||||||||||||
Beginning balance | $ | 3,167 | 4,085 | 4,653 | 3,410 | 3,740 | 4,085 | 2,736 | ||||||
Additions | $ | 522 | 116 | 972 | 1,615 | 220 | 638 | 1,533 | ||||||
Return to performing status | $ | 0 | (115) | 0 | (72) | (26) | (115) | (33) | ||||||
Principal payments | $ | (484) | (559) | (1,064) | (249) | (278) | (1,043) | (388) | ||||||
Sale proceeds | $ | 0 | (77) | (245) | 0 | (49) | (77) | (241) | ||||||
Loan charge-offs | $ | (55) | (33) | (231) | (51) | (173) | (88) | (173) | ||||||
Valuation write-downs | $ | 0 | (250) | 0 | 0 | (24) | (250) | (24) | ||||||
Ending balance | $ | 3,150 | 3,167 | 4,085 | 4,653 | 3,410 | 3,150 | 3,410 | ||||||
LOAN PORTFOLIO COMPOSITION | ||||||||||||||
Commercial: | ||||||||||||||
Commercial & industrial | $ | 1,103,807 | 1,284,507 | 1,145,423 | 1,321,419 | 1,307,456 | 1,103,807 | 1,307,456 | ||||||
Land development & construction | $ | 43,111 | 58,738 | 55,055 | 50,941 | 52,984 | 43,111 | 52,984 | ||||||
Owner occupied comm'l R/E | $ | 550,504 | 544,342 | 529,953 | 549,364 | 567,621 | 550,504 | 567,621 | ||||||
Non-owner occupied comm'l R/E | $ | 950,993 | 932,334 | 917,436 | 878,897 | 841,145 | 950,993 | 841,145 | ||||||
Multi-family & residential rental | $ | 161,894 | 147,294 | 146,095 | 137,740 | 132,047 | 161,894 | 132,047 | ||||||
Total commercial | $ | 2,810,309 | 2,967,215 | 2,793,962 | 2,938,361 | 2,901,253 | 2,810,309 | 2,901,253 | ||||||
Retail: | ||||||||||||||
1-4 family mortgages | $ | 380,292 | 337,844 | 337,888 | 322,118 | 325,923 | 380,292 | 325,923 | ||||||
Home equity & other consumer | $ | 58,240 | 59,311 | 61,620 | 63,723 | 64,743 | 58,240 | 64,743 | ||||||
Total retail | $ | 438,532 | 397,155 | 399,508 | 385,841 | 390,666 | 438,532 | 390,666 | ||||||
Total loans | $ | 3,248,841 | 3,364,370 | 3,193,470 | 3,324,202 | 3,291,919 | 3,248,841 | 3,291,919 | ||||||
END OF PERIOD BALANCES | ||||||||||||||
Loans | $ | 3,248,841 | 3,364,370 | 3,193,470 | 3,324,202 | 3,291,919 | 3,248,841 | 3,291,919 | ||||||
Securities | $ | 524,127 | 452,259 | 405,349 | 330,426 | 325,663 | 524,127 | 325,663 | ||||||
Other interest-earning assets | $ | 683,638 | 596,855 | 563,174 | 495,308 | 386,711 | 683,638 | 386,711 | ||||||
Total earning assets (before allowance) | $ | 4,456,606 | 4,413,484 | 4,161,993 | 4,149,936 | 4,004,293 | 4,456,606 | 4,004,293 | ||||||
Total assets | $ | 4,757,414 | 4,713,023 | 4,437,344 | 4,420,610 | 4,314,379 | 4,757,414 | 4,314,379 | ||||||
Noninterest-bearing deposits | $ | 1,620,829 | 1,605,471 | 1,433,403 | 1,449,879 | 1,445,620 | 1,620,829 | 1,445,620 | ||||||
Interest-bearing deposits | $ | 2,050,442 | 2,039,491 | 1,978,150 | 1,922,155 | 1,816,660 | 2,050,442 | 1,816,660 | ||||||
Total deposits | $ | 3,671,271 | 3,644,962 | 3,411,553 | 3,372,034 | 3,262,280 | 3,671,271 | 3,262,280 | ||||||
Total borrowed funds | $ | 613,205 | 584,672 | 562,360 | 600,892 | 611,298 | 613,205 | 611,298 | ||||||
Total interest-bearing liabilities | $ | 2,663,647 | 2,624,163 | 2,540,510 | 2,523,047 | 2,427,958 | 2,663,647 | 2,427,958 | ||||||
Shareholders' equity | $ | 451,888 | 441,243 | 441,554 | 431,900 | 425,221 | 451,888 | 425,221 | ||||||
AVERAGE BALANCES | ||||||||||||||
Loans | $ | 3,365,686 | 3,318,281 | 3,268,866 | 3,292,025 | 3,254,985 | 3,324,006 | 3,052,441 | ||||||
Securities | $ | 483,805 | 419,514 | 365,631 | 327,668 | 333,843 | 451,837 | 339,374 | ||||||
Other interest-earning assets | $ | 619,358 | 591,617 | 559,593 | 457,598 | 251,833 | 605,564 | 202,735 | ||||||
Total earning assets (before allowance) | $ | 4,468,849 | 4,329,412 | 4,194,090 | 4,077,291 | 3,840,661 | 4,381,407 | 3,594,550 | ||||||
Total assets | $ | 4,752,858 | 4,578,887 | 4,459,370 | 4,346,624 | 4,119,573 | 4,666,372 | 3,861,179 | ||||||
Noninterest-bearing deposits | $ | 1,619,976 | 1,510,334 | 1,478,616 | 1,454,887 | 1,304,986 | 1,565,458 | 1,114,406 | ||||||
Interest-bearing deposits | $ | 2,074,759 | 2,026,896 | 1,936,069 | 1,863,302 | 1,767,985 | 2,050,959 | 1,746,008 | ||||||
Total deposits | $ | 3,694,735 | 3,537,230 | 3,414,685 | 3,318,189 | 3,072,971 | 3,616,417 | 2,860,414 | ||||||
Total borrowed funds | $ | 594,199 | 576,645 | 588,100 | 583,994 | 607,074 | 585,471 | 562,518 | ||||||
Total interest-bearing liabilities | $ | 2,668,958 | 2,603,541 | 2,524,169 | 2,447,296 | 2,375,059 | 2,636,430 | 2,308,526 | ||||||
Shareholders' equity | $ | 445,930 | 443,548 | 438,171 | 429,865 | 422,230 | 444,761 | 420,921 |
View original content:https://www.prnewswire.com/news-releases/mercantile-bank-corporation-reports-strong-second-quarter-2021-results-301336877.html
SOURCE Mercantile Bank Corporation
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