Mercantile Bank Corporation Announces Strong Fourth Quarter and Full Year 2016 Results

Record operating profit, diluted earnings per share growth of 21 percent and loan growth of 4 percent highlight 2016

GRAND RAPIDS, Mich., Jan. 17, 2017 /PRNewswire/ -- Mercantile Bank Corporation 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

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