Mercantile Bank Corporation Announces Strong Second Quarter 2026 Results
Rhea-AI Summary
Mercantile Bank Corporation (NASDAQ: MBWM) reported second quarter 2026 net income of $25.9 million, or $1.50 per diluted share, up from $22.6 million, or $1.39, a year earlier. First-half 2026 net income was $48.6 million, or $2.82 per diluted share, versus $42.2 million, or $2.60, in 2025. Excluding non-recurring acquisition and system conversion costs, adjusted net income was $26.4 million ($1.53 per diluted share) for the quarter and $51.7 million ($2.99) for the first half, with adjusted EPS up 10 percent and 15 percent versus 2025 periods.
Net revenue rose 12.8 percent to $68.8 million, driven by a 15.7 percent increase in net interest income and a higher net interest margin of 3.59 percent, supported by lower funding costs and strong commercial loan growth. ROA was 1.5 percent, ROE 14.0 percent, tangible book value per share reached $38.42, and asset quality and capital metrics remained strong, aided by a negative $1.8 million provision for credit losses and a reduced loan-to-deposit ratio of 93 percent on solid local deposit growth and lower brokered deposits.
Positive
- Net income up to $25.9M ($1.50 EPS) in Q2 2026 from $22.6M ($1.39) in Q2 2025
- Adjusted diluted EPS up 10% in Q2 2026 and 15% in first half 2026 versus 2025
- Net revenue increased 12.8% to $68.8M; net interest income up 15.7% to $57.3M
- Net interest margin expanded to 3.59% with cost of funds down to 1.83%
- Loan-to-deposit ratio improved to 93% with $122M local deposit growth and $110M brokered deposit reduction
- Tangible book value per share rose to $38.42; ROA 1.5% and ROE 14.0% with strong asset quality and a negative $1.8M credit loss provision
Negative
- Noninterest expense rose to $39.4M in Q2 2026 from $33.4M a year earlier, even excluding $0.6M of non-recurring items
- Yield on loans declined to 6.01% from 6.29%, and yield on average earning assets fell to 5.42% from 5.75%
- Federal income tax expense increased to $5.3M in Q2 2026 from $3.3M, with the effective tax rate rising to 16.9% from 12.9%
- Noninterest income mix pressured by lower interest rate swap income and reduced mortgage banking income despite overall stability
News Explained
As of June 30, local deposits had replaced part of wholesale funding, while construction commitments remained unfunded.
The second-quarter results report a
The release groups FHLBI advances and brokered deposits as wholesale funds; those funds totaled
Future lending capacity is also reflected in unfunded commitments of
The specific near-term funding item to monitor is the
Market reaction after 2Q26 earnings report: MBWM +3.50% in the Jul 21 session
In the Jul 21 session, MBWM gained 3.50%, reflecting a moderate positive market reaction. Argus tracked a trough of -5.3% from its starting point during tracking. Our momentum scanner triggered 2 alerts that day, indicating moderate trading interest and price volatility.
Data tracked by StockTitan Argus on the day of publication.
Key Figures
Previous Earnings Reports
| Date | Event | Sentiment | 24h Move | Catalyst |
|---|---|---|---|---|
| Apr 21 | Q1 earnings report | Positive | -3.4% | Revenue and adjusted earnings growth accompanied stronger net interest income and asset quality. |
| Oct 21 | Q3 earnings report | Positive | +0.6% | Net income growth and net interest income expansion supported stronger quarterly operating results. |
| Apr 22 | Q1 earnings report | Negative | +3.5% | Lower net income, revenue, noninterest income and net interest margin marked weaker results. |
| Jan 21 | Q4 earnings report | Positive | +5.8% | Commercial loan and local deposit growth coincided with improved funding and quarterly revenue. |
| Oct 15 | Q3 earnings report | Positive | +2.7% | Local deposit growth, commercial lending expansion and strong asset quality supported results. |
24h Move is the share-price change in the day after each event; other market factors may also have contributed.
Earnings reactions were mixed: three tag-matched positive or strong-result events aligned with gains, while two diverged with declines or weaker fundamentals.
Key Terms
non-gaap financial
net interest margin financial
federal open market committee financial
nonperforming assets financial
loan-to-deposit ratio financial
AI-generated analysis. How Rhea-AI works. Not financial advice.
Net interest income expansion, strong commercial loan growth, and sustained strength in asset quality metrics and capital levels highlight the quarter
"We are very pleased to report another quarter of strong financial performance as we continue to successfully navigate our way through the extended and ongoing period of uncertain global economic conditions and heightened geopolitical concerns," said Ray Reitsma, President and Chief Executive Officer of Mercantile. "Our robust operating results were driven by increased net interest income, reflecting strong commercial loan growth and a higher net interest margin, a negative provision for credit losses, a significant increase in treasury management fees, a reduction in wholesale funds, and continuing strength in asset quality metrics. As evidenced by the ongoing expansion of local deposits, we remain committed to funding earning asset growth with local deposit generation."
Second quarter highlights include:
- Return on average assets of 1.5 percent and return on average equity of 14.0 percent
- Tangible book value per common share of
$38.42 - Net revenue growth of nearly 13 percent compared to the prior-year second quarter, including net interest income expansion of nearly 16 percent
- Improved net interest margin, largely reflecting lower cost of funds, commercial loan growth, and continued upward repricing of matured fixed-rate loans and securities
- Noteworthy increases in treasury management fees and payroll services fees of approximately 29 percent and 9 percent, respectively
- Continued strength in commercial loan pipeline
- Ongoing low level of nonperforming assets and nominal past due loans and loan charge-offs
- Significant reduction in loan-to-deposit ratio from approximately 100 percent as of June 30, 2025, to approximately 93 percent as of June 30, 2026, primarily reflecting strong local deposit generation and the onboarding of Eastern Michigan Bank's deposit portfolio
- Notable decreases in brokered deposits of
$110 million $179 million $20.1 million - Robust tangible and regulatory capital positions
Operating Results
Net revenue, consisting of net interest income and noninterest income, was
The net interest margin was 3.59 percent in the second quarter of 2026, up from 3.48 percent in the prior-year second quarter. The yield on average earning assets was 5.42 percent during the current-year second quarter, a decline from 5.75 percent during the respective 2025 period. The decreased yield largely stemmed from a lower yield on loans and a change in earning asset mix, which more than offset an improved yield on securities resulting from the reinvestment of relatively low-yielding bonds and portfolio expansion activities, along with the positive impact resulting from the addition of Eastern Michigan Bank's securities portfolio. The yield on loans was 6.01 percent during the second quarter of 2026, down from 6.29 percent during the second quarter of 2025, mainly due to reduced interest rates on variable-rate commercial loans resulting from the Federal Open Market Committee ("FOMC") lowering the targeted federal funds rate. The FOMC decreased the targeted federal funds rate by 25 basis points in each of September, October, and December of 2025, during which time average variable-rate commercial loans represented approximately 77 percent of average total commercial loans. Reflecting a strategic initiative to lower the loan-to-deposit ratio and the impact of Eastern Michigan Bank's liquid balance sheet, relatively higher-yielding loans represented a decreased percentage of earning assets and relatively lower-yielding securities accounted for an increased percentage of earning assets in the second quarter of 2026 compared to the second quarter of 2025. The yield on securities equaled 3.36 percent during the second quarter of 2026, up from 2.82 percent during the prior-year second quarter. The yield on other interest-earning assets, primarily consisting of funds on deposit with the Federal Reserve Bank of
During the second quarter of 2026, the cost of funds was 1.83 percent, down from 2.27 percent during the second quarter of 2025, mainly due to lower rates paid on money market accounts and time deposits, reflecting the decreased interest rate environment. An increase in low-cost deposit products as a percentage of total funding sources, primarily stemming from the addition of Eastern Michigan Bank's deposit base, and a reduction in brokered deposits also contributed to the reduced cost of funds. The latter reflects a strategy to refine the deposit base whereby the reliance on the brokered deposit market and other higher-priced deposit-only relationships is reduced.
Mercantile recorded provisions for credit losses of negative
Noninterest income totaled
Noninterest expense totaled
Federal income tax expense was
Mr. Reitsma commented, "The robust increase in net interest income during the second quarter of 2026 resulted from strong commercial loan growth and an improved net interest margin, which was largely driven by a reduced cost of funds and the upward repricing of matured fixed-rate loans and securities. As demonstrated by the solid growth in treasury management and payroll services fees, we continue to be successful in our efforts to cultivate new customer relationships and further develop existing clients' relationships. We remain focused on expanding our balance sheet in a cost-effective fashion while continuing to deliver excellent service and market-leading products and services to our clients. Total overhead expense, excluding costs associated with the core and digital banking system conversion and acquisition of Eastern Michigan Financial Corporation, as a percentage of net revenue during the second quarter of 2026 approximated the level during the prior-year second quarter."
Balance Sheet
Total assets were
During the first six months of 2026, interest-earning deposits declined
As of June 30, 2026, unfunded commitments on commercial construction and development loans, which are expected to be funded over the next 12 to 18 months, and residential construction loans, which are expected to be largely funded over the next 12 months, totaled
Commercial and industrial loans and owner-occupied commercial real estate loans combined represented approximately 58 percent of total commercial loans as of June 30, 2026, a level that has remained relatively consistent with prior periods and in line with our expectations.
Total deposits equaled
Mr. Reitsma noted, "We are very pleased with the growth in the commercial loan portfolio during the second quarter and first six months of 2026, especially when factoring in the level of payoffs and line of credit paydowns during the periods. Our commercial loan pipeline remains robust, which combined with ongoing conversations with existing and potential borrowers, should provide us with meaningful opportunities to originate loans in forthcoming periods. We remain committed to funding lending opportunities with local deposit generation."
Asset Quality
Nonperforming assets totaled
Mr. Reitsma remarked, "As reflected by ongoing low levels of nonperforming assets, past due loans, and loan charge-offs, our asset quality metrics remained robust during the second quarter of 2026. We remain committed to underwriting all loan types in a disciplined manner and identifying any deteriorating commercial loan relationships or emerging systemic or sector-specific credit problems as soon as possible to limit the impact of such on our overall financial health. Our sound collection and conservative charge-off practices were evident during the current-year second quarter with the full resolution of a significant nonperforming commercial construction loan, which represented our largest nonperforming loan as of March 31, 2026. The resiliency of our commercial loan clients during the extended and ongoing period of uncertain macro-economic conditions has been noteworthy."
Capital Position
Shareholders' equity totaled
Mercantile reported 17,285,911 total shares outstanding as of June 30, 2026.
Mr. Reitsma concluded, "Our ongoing strong financial condition enabled us to continue our regular cash dividend program, and as demonstrated by our announcement of an increased third quarter 2026 cash dividend, we remain committed to building shareholder value through meaningful cash returns. Based on the continuing strength of our operating results, asset quality measures, capital levels and loan funding opportunities, along with the expected realization of solid financial performance in upcoming periods, we believe we are positioned to successfully address any challenges arising from the prolonged and ongoing period of unstable economic and operating conditions. Our steadfast focus on meeting customers' needs has been instrumental in retaining established relationships and fostering new relationships, and we believe a similar focus in future periods as planned should provide us with ample opportunities to originate loans and generate local deposits."
Investor Presentation
Mercantile has prepared presentation materials that management intends to use during its previously announced second quarter 2026 conference call on Tuesday, July 21, 2026, at 10:00 a.m. Eastern Time, and from time to time thereafter in presentations about the company's operations and performance. These materials, which are available for viewing in the Investor Relations section of Mercantile's website at www.mercbank.com, have been furnished to the
About Mercantile Bank Corporation
Based in Grand Rapids, Michigan, Mercantile Bank Corporation is the bank holding company for Mercantile Bank and Eastern Michigan Bank. Mercantile Bank and Eastern Michigan Bank provide financial products and services in a professional and personalized manner designed to make banking easier for businesses, individuals, and governmental units. Distinguished by exceptional service, knowledgeable staff, and a commitment to the communities they serve, Mercantile Bank and Eastern Michigan Bank together comprise one of the largest Michigan-based banking organizations with total combined assets of approximately
Reconciliation of U.S. GAAP to Non-GAAP Financial Measures
This news release contains certain non-GAAP financial measures, including adjusted net income and adjusted diluted earnings per share, each of which excludes costs associated with (i) Mercantile's acquisition of Eastern Michigan Financial Corporation that was completed during the fourth quarter of 2025 (
Forward-Looking Statements
This news release contains statements and 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," "endeavor," "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 difficulties and delays in the ongoing integration of Mercantile Bank and Eastern Michigan Bank and achieving anticipated synergies, cost savings and other benefits from the transaction; changes in interest rates and interest rate relationships; increasing rates of inflation and slower growth rates or recession; significant declines in the value of commercial real estate; market volatility; demand for products and services; climate impacts; labor markets; the degree of competition by traditional and nontraditional financial services companies; changes in banking regulation or actions by bank regulators; changes in tax laws and other laws and regulations applicable to us; 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; damage to our reputation resulting from adverse publicity, regulatory actions, litigation, operational failures, and the failure to meet client expectations and other factors; changes in the national and local economies; unstable political and economic environments; disease outbreaks, such as the COVID-19 pandemic or similar public health threats, and measures implemented to combat them; 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, except as required by law. Investors are cautioned not to place undue reliance on any forward-looking statements contained herein.
MERCANTILE BANK CORPORATION | ||||||
CONSOLIDATED BALANCE SHEETS | ||||||
(Unaudited) | ||||||
JUNE 30, | DECEMBER 31, | JUNE 30, | ||||
2026 | 2025 | 2025 | ||||
ASSETS | ||||||
Cash and due from banks | $ | 69,802,000 | $ | 54,755,000 | $ | 98,900,000 |
Interest-earning deposits and Federal Funds sold | 271,129,000 | 418,569,000 | 197,172,000 | |||
Total cash and cash equivalents | 340,931,000 | 473,324,000 | 296,072,000 | |||
Securities available for sale | 1,125,529,000 | 1,102,230,000 | 826,415,000 | |||
Mortgage loans held for sale | 31,272,000 | 17,160,000 | 27,569,000 | |||
Loans | 4,915,553,000 | 4,821,888,000 | 4,698,019,000 | |||
Allowance for credit losses | (55,441,000) | (58,191,000) | (58,375,000) | |||
Loans, net | 4,860,112,000 | 4,763,697,000 | 4,639,644,000 | |||
Premises and equipment, net | 60,727,000 | 62,468,000 | 54,792,000 | |||
Bank owned life insurance | 116,578,000 | 105,342,000 | 95,012,000 | |||
Goodwill | 73,689,000 | 72,656,000 | 49,473,000 | |||
Core deposit intangible, net | 17,307,000 | 20,388,000 | 0 | |||
Other assets | 193,345,000 | 217,954,000 | 192,011,000 | |||
Total assets | $ | 6,819,490,000 | $ | 6,835,219,000 | $ | 6,180,988,000 |
LIABILITIES AND SHAREHOLDERS' EQUITY | ||||||
Deposits: | ||||||
Noninterest-bearing | $ | 1,420,591,000 | $ | 1,339,666,000 | $ | 1,180,801,000 |
Interest-bearing | 3,875,797,000 | 3,944,786,000 | 3,529,671,000 | |||
Total deposits | 5,296,388,000 | 5,284,452,000 | 4,710,472,000 | |||
Securities sold under agreements to repurchase | 217,470,000 | 232,291,000 | 242,785,000 | |||
Federal Home Loan Bank advances | 305,322,000 | 326,221,000 | 356,221,000 | |||
Subordinated debentures | 51,358,000 | 51,015,000 | 50,672,000 | |||
Subordinated notes | 89,829,000 | 89,657,000 | 89,486,000 | |||
Term note | 25,000,000 | 30,000,000 | 0 | |||
Accrued interest and other liabilities | 78,999,000 | 96,699,000 | 99,833,000 | |||
Total liabilities | 6,064,366,000 | 6,110,335,000 | 5,549,469,000 | |||
SHAREHOLDERS' EQUITY | ||||||
Common stock | 352,339,000 | 349,431,000 | 302,294,000 | |||
Retained earnings | 434,786,000 | 399,448,000 | 364,991,000 | |||
Accumulated other comprehensive income/(loss) | (32,001,000) | (23,995,000) | (35,766,000) | |||
Total shareholders' equity | 755,124,000 | 724,884,000 | 631,519,000 | |||
Total liabilities and shareholders' equity | $ | 6,819,490,000 | $ | 6,835,219,000 | $ | 6,180,988,000 |
MERCANTILE BANK CORPORATION | |||||||||||||
CONSOLIDATED REPORTS OF INCOME | |||||||||||||
(Unaudited) | |||||||||||||
THREE MONTHS ENDED | THREE MONTHS ENDED | SIX MONTHS ENDED | SIX MONTHS ENDED | ||||||||||
June 30, 2026 | June 30, 2025 | June 30, 2026 | June 30, 2025 | ||||||||||
INTEREST INCOME | |||||||||||||
Loans, including fees | $ | 73,293,000 | $ | 73,613,000 | $ | 145,190,000 | $ | 145,343,000 | |||||
Investment securities | 9,174,000 | 5,414,000 | 18,023,000 | 10,372,000 | |||||||||
Other interest-earning assets | 4,229,000 | 2,931,000 | 8,909,000 | 6,582,000 | |||||||||
Total interest income | 86,696,000 | 81,958,000 | 172,122,000 | 162,297,000 | |||||||||
INTEREST EXPENSE | |||||||||||||
Deposits | 23,140,000 | 25,725,000 | 46,386,000 | 50,918,000 | |||||||||
Short-term borrowings | 1,488,000 | 1,919,000 | 2,967,000 | 3,682,000 | |||||||||
Federal Home Loan Bank advances | 2,595,000 | 2,897,000 | 5,151,000 | 5,795,000 | |||||||||
Other borrowed money | 2,215,000 | 1,938,000 | 4,459,000 | 3,875,000 | |||||||||
Total interest expense | 29,438,000 | 32,479,000 | 58,963,000 | 64,270,000 | |||||||||
Net interest income | 57,258,000 | 49,479,000 | 113,159,000 | 98,027,000 | |||||||||
Provision for credit losses | (1,800,000) | 1,600,000 | (3,600,000) | 3,700,000 | |||||||||
Net interest income after | |||||||||||||
provision for credit losses | 59,058,000 | 47,879,000 | 116,759,000 | 94,327,000 | |||||||||
NONINTEREST INCOME | |||||||||||||
Service charges on accounts | 2,663,000 | 1,967,000 | 5,147,000 | 3,806,000 | |||||||||
Mortgage banking income | 3,188,000 | 3,969,000 | 6,168,000 | 6,620,000 | |||||||||
Credit and debit card income | 2,921,000 | 2,350,000 | 5,509,000 | 4,551,000 | |||||||||
Interest rate swap income | 443,000 | 1,230,000 | 1,106,000 | 1,310,000 | |||||||||
Payroll services | 854,000 | 783,000 | 1,948,000 | 1,823,000 | |||||||||
Earnings on bank owned life insurance | 776,000 | 561,000 | 1,441,000 | 1,104,000 | |||||||||
Other income | 653,000 | 602,000 | 1,868,000 | 950,000 | |||||||||
Total noninterest income | 11,498,000 | 11,462,000 | 23,187,000 | 20,164,000 | |||||||||
NONINTEREST EXPENSE | |||||||||||||
Salaries and benefits | 24,608,000 | 20,711,000 | 48,287,000 | 40,268,000 | |||||||||
Occupancy | 2,261,000 | 2,155,000 | 4,677,000 | 4,273,000 | |||||||||
Furniture and equipment | 988,000 | 826,000 | 1,950,000 | 1,613,000 | |||||||||
Data processing costs | 4,617,000 | 3,599,000 | 9,044,000 | 7,369,000 | |||||||||
Core conversion costs | 536,000 | 0 | 3,458,000 | 0 | |||||||||
Acquisition costs | 94,000 | 0 | 394,000 | 0 | |||||||||
Core deposit intangible amortization | 865,000 | 0 | 1,731,000 | 0 | |||||||||
Other expense | 5,406,000 | 6,088,000 | 11,942,000 | 10,960,000 | |||||||||
Total noninterest expense | 39,375,000 | 33,379,000 | 81,483,000 | 64,483,000 | |||||||||
Income before federal income | |||||||||||||
tax expense | 31,181,000 | 25,962,000 | 58,463,000 | 50,008,000 | |||||||||
Federal income tax expense | 5,254,000 | 3,344,000 | 9,851,000 | 7,853,000 | |||||||||
Net Income | $ | 25,927,000 | $ | 22,618,000 | $ | 48,612,000 | $ | 42,155,000 | |||||
Basic earnings per share | |||||||||||||
Diluted earnings per share | |||||||||||||
Average basic shares outstanding | 17,278,057 | 16,239,919 | 17,257,766 | 16,219,064 | |||||||||
Average diluted shares outstanding | 17,278,057 | 16,239,919 | 17,257,766 | 16,219,064 | |||||||||
MERCANTILE BANK CORPORATION | ||||||||||||||
CONSOLIDATED FINANCIAL HIGHLIGHTS | ||||||||||||||
(Unaudited) | ||||||||||||||
Quarterly | Year-To-Date | |||||||||||||
(dollars in thousands except per share data) | 2026 | 2026 | 2025 | 2025 | 2025 | |||||||||
2nd Qtr | 1st Qtr | 4th Qtr | 3rd Qtr | 2nd Qtr | 2026 | 2025 | ||||||||
EARNINGS | ||||||||||||||
Net interest income | $ | 57,258 | 55,901 | 51,015 | 52,002 | 49,479 | 113,159 | 98,027 | ||||||
Provision for credit losses | $ | (1,800) | (1,800) | (700) | 200 | 1,600 | (3,600) | 3,700 | ||||||
Noninterest income | $ | 11,498 | 11,688 | 11,056 | 10,388 | 11,462 | 23,187 | 20,164 | ||||||
Noninterest expense | $ | 39,375 | 42,107 | 36,726 | 34,750 | 33,379 | 81,483 | 64,483 | ||||||
Net income before federal income | ||||||||||||||
tax expense | $ | 31,181 | 27,282 | 26,045 | 27,440 | 25,962 | 58,463 | 50,008 | ||||||
Net income | $ | 25,927 | 22,685 | 22,841 | 23,758 | 22,618 | 48,612 | 42,155 | ||||||
Basic earnings per share | $ | 1.50 | 1.32 | 1.40 | 1.46 | 1.39 | 2.82 | 2.60 | ||||||
Diluted earnings per share | $ | 1.50 | 1.32 | 1.40 | 1.46 | 1.39 | 2.82 | 2.60 | ||||||
Average basic shares outstanding | 17,278,057 | 17,237,249 | 16,263,884 | 16,249,267 | 16,239,919 | 17,257,766 | 16,219,064 | |||||||
Average diluted shares outstanding | 17,278,057 | 17,237,249 | 16,263,884 | 16,249,267 | 16,239,919 | 17,257,766 | 16,219,064 | |||||||
PERFORMANCE RATIOS | ||||||||||||||
Return on average assets | 1.52 % | 1.35 % | 1.44 % | 1.50 % | 1.50 % | 1.43 % | 1.41 % | |||||||
Return on average equity | 13.97 % | 12.54 % | 13.50 % | 14.72 % | 14.72 % | 13.27 % | 14.05 % | |||||||
Net interest margin (fully tax-equivalent) | 3.59 % | 3.55 % | 3.43 % | 3.49 % | 3.48 % | 3.57 % | 3.49 % | |||||||
Efficiency ratio | 57.27 % | 62.30 % | 59.17 % | 55.70 % | 54.77 % | 59.76 % | 54.56 % | |||||||
Full-time equivalent employees | 827 | 766 | 770 | 683 | 692 | 827 | 692 | |||||||
YIELD ON ASSETS / COST OF FUNDS | ||||||||||||||
Yield on loans | 6.01 % | 6.04 % | 6.12 % | 6.35 % | 6.29 % | 6.02 % | 6.29 % | |||||||
Yield on securities | 3.36 % | 3.27 % | 2.96 % | 2.90 % | 2.82 % | 3.31 % | 2.78 % | |||||||
Yield on other interest-earning assets | 4.04 % | 4.00 % | 4.25 % | 4.63 % | 4.91 % | 4.02 % | 4.85 % | |||||||
Yield on total earning assets | 5.42 % | 5.42 % | 5.52 % | 5.74 % | 5.75 % | 5.42 % | 5.75 % | |||||||
Yield on total assets | 5.09 % | 5.09 % | 5.20 % | 5.41 % | 5.44 % | 5.09 % | 5.44 % | |||||||
Cost of deposits | 1.74 % | 1.77 % | 2.04 % | 2.20 % | 2.24 % | 1.76 % | 2.23 % | |||||||
Cost of borrowed funds | 3.57 % | 3.58 % | 3.56 % | 3.61 % | 3.61 % | 3.57 % | 3.62 % | |||||||
Cost of interest-bearing liabilities | 2.53 % | 2.54 % | 2.87 % | 3.06 % | 3.09 % | 2.54 % | 3.09 % | |||||||
Cost of funds (total earning assets) | 1.83 % | 1.87 % | 2.09 % | 2.25 % | 2.27 % | 1.85 % | 2.27 % | |||||||
Cost of funds (total assets) | 1.72 % | 1.75 % | 1.97 % | 2.12 % | 2.15 % | 1.74 % | 2.15 % | |||||||
MORTGAGE BANKING ACTIVITY | ||||||||||||||
Total mortgage loans originated | $ | 159,105 | 127,939 | 141,451 | 136,840 | 141,921 | 287,044 | 242,317 | ||||||
Purchase mortgage loans originated | $ | 126,798 | 68,769 | 85,973 | 107,993 | 111,247 | 195,567 | 192,741 | ||||||
Refinance mortgage loans originated | $ | 32,307 | 59,170 | 55,478 | 28,847 | 30,674 | 91,477 | 49,576 | ||||||
Mortgage loans originated with intent to sell | $ | 107,447 | 105,873 | 116,886 | 111,334 | 112,323 | 213,320 | 192,776 | ||||||
Income on sale of mortgage loans | $ | 3,156 | 3,049 | 3,375 | 3,482 | 3,219 | 6,205 | 5,674 | ||||||
CAPITAL | ||||||||||||||
Tangible equity to tangible assets | 9.87 % | 9.41 % | 9.37 % | 9.72 % | 9.49 % | 9.87 % | 9.49 % | |||||||
Tier 1 leverage capital ratio | 11.04 % | 10.61 % | 11.30 % | 10.90 % | 10.93 % | 11.04 % | 10.93 % | |||||||
Common equity risk-based capital ratio | 11.44 % | 11.27 % | 11.01 % | 11.33 % | 10.90 % | 11.44 % | 10.90 % | |||||||
Tier 1 risk-based capital ratio | 12.25 % | 12.09 % | 11.83 % | 12.20 % | 11.75 % | 12.25 % | 11.75 % | |||||||
Total risk-based capital ratio | 14.65 % | 14.59 % | 14.35 % | 14.87 % | 14.37 % | 14.65 % | 14.37 % | |||||||
Tier 1 capital | $ | 749,048 | 723,395 | 704,776 | 685,440 | 666,068 | 749,048 | 666,068 | ||||||
Tier 1 plus tier 2 capital | $ | 896,267 | 872,668 | 854,876 | 835,263 | 814,796 | 896,267 | 814,796 | ||||||
Total risk-weighted assets | $ | 6,116,615 | 5,981,420 | 5,958,763 | 5,617,005 | 5,670,571 | 6,116,615 | 5,670,571 | ||||||
Book value per common share | $ | 43.68 | 42.66 | 42.19 | 40.46 | 38.87 | 43.68 | 38.87 | ||||||
Tangible book value per common share | $ | 38.42 | 37.34 | 36.78 | 37.41 | 35.82 | 38.42 | 35.82 | ||||||
Cash dividend per common share | $ | 0.39 | 0.39 | 0.38 | 0.38 | 0.37 | 0.78 | 0.74 | ||||||
ASSET QUALITY | ||||||||||||||
Gross loan charge-offs | $ | 10 | 5 | 2,842 | 172 | 38 | 15 | 101 | ||||||
Recoveries | $ | 514 | 351 | 206 | 726 | 147 | 865 | 322 | ||||||
Net loan charge-offs (recoveries) | $ | (504) | (346) | 2,636 | (554) | (109) | (850) | (221) | ||||||
Net loan charge-offs to average loans | (0.04 %) | (0.03 %) | 0.23 % | (0.05 %) | (0.01 %) | (0.04 %) | (0.01 %) | |||||||
Allowance for credit losses | $ | 55,441 | 56,736 | 58,191 | 59,129 | 58,375 | 55,441 | 58,375 | ||||||
Allowance to loans | 1.13 % | 1.18 % | 1.21 % | 1.28 % | 1.24 % | 1.13 % | 1.24 % | |||||||
Nonperforming loans | $ | 5,803 | 7,543 | 7,870 | 9,844 | 9,743 | 5,803 | 9,743 | ||||||
Other real estate/repossessed assets | $ | 0 | 0 | 0 | 0 | 0 | 0 | 0 | ||||||
Nonperforming loans to total loans | 0.12 % | 0.16 % | 0.16 % | 0.21 % | 0.21 % | 0.12 % | 0.21 % | |||||||
Nonperforming assets to total assets | 0.09 % | 0.11 % | 0.12 % | 0.16 % | 0.16 % | 0.09 % | 0.16 % | |||||||
NONPERFORMING ASSETS - COMPOSITION | ||||||||||||||
Commercial: | ||||||||||||||
Commercial & industrial | $ | 942 | 1,122 | 1,393 | 1,509 | 1,727 | 942 | 1,727 | ||||||
Land development & construction | $ | 0 | 0 | 201 | 0 | 0 | 0 | 0 | ||||||
Owner occupied comm'l real estate | $ | 953 | 494 | 517 | 0 | 0 | 953 | 0 | ||||||
Nonowner occupied comm'l real estate | $ | 0 | 2,732 | 2,732 | 5,532 | 5,532 | 0 | 5,532 | ||||||
Multi-family & residential rental | $ | 0 | 0 | 0 | 0 | 0 | 0 | 0 | ||||||
Total commercial | $ | 1,895 | 4,348 | 4,843 | 7,041 | 7,259 | 1,895 | 7,259 | ||||||
Retail: | ||||||||||||||
1-4 family mortgages | $ | 3,811 | 3,114 | 2,971 | 2,767 | 2,484 | 3,811 | 2,484 | ||||||
Other consumer | $ | 97 | 81 | 56 | 36 | 0 | 97 | 0 | ||||||
Total retail | $ | 3,908 | 3,195 | 3,027 | 2,803 | 2,484 | 3,908 | 2,484 | ||||||
Total nonperforming assets | $ | 5,803 | 7,543 | 7,870 | 9,844 | 9,743 | 5,803 | 9,743 | ||||||
NONPERFORMING ASSETS - RECON | ||||||||||||||
Beginning balance | $ | 7,543 | 7,870 | 9,844 | 9,743 | 5,361 | 7,870 | 5,743 | ||||||
Additions | $ | 1,284 | 410 | 1,299 | 426 | 5,792 | 1,694 | 6,215 | ||||||
Return to performing status | $ | 0 | (12) | 0 | (27) | 0 | (12) | 0 | ||||||
Principal payments | $ | (3,016) | (725) | (466) | (222) | (1,385) | (3,741) | (2,129) | ||||||
Sale proceeds | $ | 0 | 0 | 0 | 0 | 0 | 0 | 0 | ||||||
Loan charge-offs | $ | (8) | 0 | (2,807) | (76) | (25) | (8) | (86) | ||||||
Valuation write-downs | $ | 0 | 0 | 0 | 0 | 0 | 0 | 0 | ||||||
Ending balance | $ | 5,803 | 7,543 | 7,870 | 9,844 | 9,743 | 5,803 | 9,743 | ||||||
LOAN PORTFOLIO COMPOSITION | ||||||||||||||
Commercial: | ||||||||||||||
Commercial & industrial | $ | 1,537,029 | 1,429,830 | 1,374,522 | 1,337,729 | 1,375,368 | 1,537,029 | 1,375,368 | ||||||
Land development & construction | $ | 119,386 | 119,560 | 117,373 | 70,806 | 67,520 | 119,386 | 67,520 | ||||||
Owner occupied comm'l real estate | $ | 803,884 | 799,066 | 778,869 | 729,451 | 725,106 | 803,884 | 725,106 | ||||||
Nonowner occupied comm'l real estate | $ | 1,091,844 | 1,101,758 | 1,110,674 | 1,091,210 | 1,134,012 | 1,091,844 | 1,134,012 | ||||||
Multi-family & residential rental | $ | 498,253 | 485,175 | 537,224 | 521,111 | 519,152 | 498,253 | 519,152 | ||||||
Total commercial | $ | 4,050,396 | 3,935,389 | 3,918,662 | 3,750,307 | 3,821,158 | 4,050,396 | 3,821,158 | ||||||
Retail: | ||||||||||||||
1-4 family mortgages | $ | 750,526 | 768,237 | 790,857 | 780,917 | 799,426 | 750,526 | 799,426 | ||||||
Other consumer | $ | 114,631 | 113,067 | 112,369 | 83,936 | 77,435 | 114,631 | 77,435 | ||||||
Total retail | $ | 865,157 | 881,304 | 903,226 | 864,853 | 876,861 | 865,157 | 876,861 | ||||||
Total loans | $ | 4,915,553 | 4,816,693 | 4,821,888 | 4,615,160 | 4,698,019 | 4,915,553 | 4,698,019 | ||||||
END OF PERIOD BALANCES | ||||||||||||||
Loans | $ | 4,915,553 | 4,816,693 | 4,821,888 | 4,615,160 | 4,698,019 | 4,915,553 | 4,698,019 | ||||||
Securities | $ | 1,125,529 | 1,125,433 | 1,102,230 | 855,138 | 826,415 | 1,125,529 | 826,415 | ||||||
Other interest-earning assets | $ | 327,399 | 577,619 | 458,548 | 457,373 | 246,254 | 327,399 | 246,254 | ||||||
Total earning assets (before allowance) | $ | 6,368,481 | 6,519,745 | 6,382,666 | 5,927,671 | 5,770,688 | 6,368,481 | 5,770,688 | ||||||
Total assets | $ | 6,819,490 | 6,945,035 | 6,835,219 | 6,308,487 | 6,180,988 | 6,819,490 | 6,180,988 | ||||||
Noninterest-bearing deposits | $ | 1,420,591 | 1,331,947 | 1,339,666 | 1,182,775 | 1,180,801 | 1,420,591 | 1,180,801 | ||||||
Interest-bearing deposits | $ | 3,875,797 | 4,087,571 | 3,944,786 | 3,629,038 | 3,529,671 | 3,875,797 | 3,529,671 | ||||||
Total deposits | $ | 5,296,388 | 5,419,518 | 5,284,452 | 4,811,813 | 4,710,472 | 5,296,388 | 4,710,472 | ||||||
Total borrowed funds | $ | 690,554 | 704,853 | 730,778 | 739,688 | 740,685 | 690,554 | 740,685 | ||||||
Total interest-bearing liabilities | $ | 4,566,351 | 4,792,424 | 4,675,564 | 4,368,726 | 4,270,356 | 4,566,351 | 4,270,356 | ||||||
Shareholders' equity | $ | 755,124 | 736,947 | 724,884 | 657,630 | 631,519 | 755,124 | 631,519 | ||||||
AVERAGE BALANCES | ||||||||||||||
Loans | $ | 4,891,868 | 4,828,031 | 4,627,544 | 4,668,173 | 4,695,367 | 4,860,126 | 4,662,415 | ||||||
Securities | $ | 1,128,063 | 1,119,988 | 880,619 | 841,853 | 803,264 | 1,124,048 | 783,291 | ||||||
Other interest-earning assets | $ | 413,729 | 467,991 | 426,758 | 433,055 | 235,965 | 440,710 | 269,956 | ||||||
Total earning assets (before allowance) | $ | 6,433,660 | 6,416,010 | 5,934,921 | 5,943,081 | 5,734,596 | 6,424,884 | 5,715,662 | ||||||
Total assets | $ | 6,851,065 | 6,837,239 | 6,296,341 | 6,294,841 | 6,061,819 | 6,844,190 | 6,040,109 | ||||||
Noninterest-bearing deposits | $ | 1,376,108 | 1,318,537 | 1,227,100 | 1,215,918 | 1,152,631 | 1,347,481 | 1,149,359 | ||||||
Interest-bearing deposits | $ | 3,956,008 | 3,999,141 | 3,599,012 | 3,610,600 | 3,463,067 | 3,977,456 | 3,452,840 | ||||||
Total deposits | $ | 5,332,116 | 5,317,678 | 4,826,112 | 4,826,518 | 4,615,698 | 5,324,937 | 4,602,199 | ||||||
Total borrowed funds | $ | 707,080 | 712,240 | 720,499 | 749,679 | 749,811 | 709,645 | 744,250 | ||||||
Total interest-bearing liabilities | $ | 4,663,088 | 4,711,381 | 4,319,511 | 4,360,279 | 4,212,878 | 4,687,101 | 4,197,090 | ||||||
Shareholders' equity | $ | 744,193 | 733,366 | 671,029 | 640,495 | 616,229 | 738,809 | 605,248 | ||||||
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SOURCE Mercantile Bank Corporation