PR Newswire | Apr 20, 2021 06:02AM EDT

04/20 05:01 CDT

Mercantile Bank Corporation Announces Strong First Quarter 2021 ResultsContinued strength in mortgage banking income and asset quality metrics, along with solid core commercial loan growth, highlight quarter GRAND RAPIDS, Mich., April 20, 2021

GRAND RAPIDS, Mich., April 20, 2021 /PRNewswire/ -- Mercantile Bank Corporation (NASDAQ: MBWM) ("Mercantile") reported net income of $14.2 million, or $0.87 per diluted share, for the first quarter of 2021, compared with net income of $10.7 million, or $0.65 per diluted share, for the respective prior-year period.

"We are very pleased to begin 2021 with a quarter of robust financial performance," said Robert B. Kaminski, Jr., President and Chief Executive Officer of Mercantile. "Our strong financial results include ongoing strength in mortgage banking income, sound asset quality, solid growth in core commercial loans, and managed overhead costs. The extraordinary efforts of the Mercantile team have allowed us to successfully and consistently meet our customers' banking needs during this continuing period of uncertainty stemming from the COVID-19 pandemic."

First quarter highlights include:

* Robust earnings and capital position * Strong mortgage banking income * Sustained strength in asset quality metrics * Annualized net core commercial loan growth of nearly 14 percent * Continued strength in commercial loan and residential mortgage loan pipelines * Paycheck Protection Program round two loan fundings of $203 million * Additional local deposit growth

Operating Results

Total revenue, which consists of net interest income and noninterest income, was $43.0 million during the first quarter of 2021, up $6.1 million, or 16.6 percent, from the prior-year first quarter. Net interest income during the first three months of 2021 was $29.5 million, down from $30.3 million during the respective 2020 period due to a lower net interest margin, which more than offset the positive impact of earning asset growth. Noninterest income totaled $13.5 million during the first quarter of 2021, up $6.9 million from the first quarter of 2020, primarily due to increased mortgage banking income. The net interest margin was 2.77 percent in the first quarter of 2021, compared to 3.00 percent in the fourth quarter of 2020 and 3.63 percent in the first quarter of 2020. The decreased net interest margin resulted from the lower interest rate environment and substantial levels of excess liquidity.

The yield on average earning assets was 3.26 percent during the first quarter of 2021, down from 3.55 percent during the fourth quarter of 2020, mainly due to a decreased yield on commercial loans, which equaled 4.07 percent and 4.41 percent in the respective periods. The decreased yield on commercial loans primarily reflected reduced Paycheck Protection Program net fee accretion stemming from a lower level of forgiveness activity.

The cost of funds declined from 0.55 percent during the fourth quarter of 2020 to 0.49 percent during the first quarter of 2021, mainly due to lower rates paid on renewed time deposits, reflecting the declining interest rate environment, and a change in funding mix, consisting of an increase in lower-costing non-time deposits as a percentage of total funding sources.

The yield on average earning assets declined from 4.54 percent during the first three months of 2020 to 3.26 percent during the respective 2021 period, primarily resulting from decreased yields on commercial loans, securities and interest-earning deposits, along with a change in earning asset mix. The decreased yield on commercial loans primarily reflected reduced interest rates on variable-rate commercial loans resulting from the Federal Open Market Committee significantly lowering the targeted federal funds rate by a total of 150 basis points during March of 2020. The lower yield on securities mainly reflected decreased accelerated discount accretion on called U.S. Government agency bonds and lower yields on newly purchased bonds, reflecting the declining interest rate environment. Accelerated discount accretion totaled less than $0.1 million during the first three months of 2021, compared to $1.8 million during the respective 2020 period. The reduced yield on interest-earning deposits resulted from the decreased interest rate environment.

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 persisted during the remainder of 2020 and the first three months of 2021, negatively impacted the yield on average earning assets and the net interest margin by 44 basis points and 37 basis points, respectively, during the first quarter 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 as well as lower business and consumer investing and spending.

The cost of funds decreased from 0.91 percent during the first quarter of 2020 to 0.49 percent during the current-year first quarter, primarily due to lower rates paid on local deposit accounts and borrowings, reflecting the declining interest rate environment. A change in funding mix, consisting of an increase in lower-costing non-time deposits as a percentage of total funding sources, also contributed to the decrease in the cost of funds.

Mercantile recorded loan loss provision expense of $0.3 million during the first quarter of 2021, compared to $0.8 million during the prior-year first quarter. The provision expense recorded during both periods primarily reflected net loan growth. The recording of net loan recoveries in both periods reduced the required provision amounts.

Noninterest income during the first quarter of 2021 was $13.5 million, up $6.9 million, or approximately 106 percent, from the prior-year first quarter. The improved level of noninterest income mainly resulted from increased mortgage banking income stemming from a substantial upturn in refinance activity driven by a decrease in residential mortgage loan interest rates, an increase in purchase activity, and the ongoing success of strategic initiatives that were implemented to gain market share. Fee income generated from an interest rate swap program that was introduced during the fourth quarter of 2020 and growth in credit and debit card income also contributed to the increased level of noninterest 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.

Noninterest expense totaled $25.1 million during the first quarter of 2021, compared to $22.9 million during the first quarter of 2020. Overhead costs during the first three months of 2021 included write-downs of former branch facilities totaling $0.5 million. Excluding these transactions, noninterest expense increased $1.6 million, or 7.1 percent, during the first quarter of 2021 compared to the respective 2020 period. The higher level of expense primarily resulted from increased compensation costs, mainly depicting higher residential mortgage lender commissions and related incentives, annual employee merit pay increases, increased health insurance costs, and a bonus accrual. The higher level of commissions and associated incentives primarily reflected the significant increase in residential mortgage loan originations during the first quarter of 2021, which were up nearly 85 percent compared to the respective 2020 period.

Mr. Kaminski commented, "The continuing success of strategic initiatives that were implemented to increase market penetration, combined with a strong level of residential mortgage loan production, provided for another quarter of robust mortgage banking income. Refinance activity remained at a high level during the first quarter due to the ongoing low interest rate environment. Although we expect refinance activity to decline in future periods as a result of a reduction in the number of borrowers eligible to refinance from an economic benefit standpoint and the recent uptick in residential mortgage loan interest rates, we believe solid mortgage banking income can be recorded in future periods based on the current pipeline and application volume, along with our recent lender hires and new office openings. As evidenced by the introduction of a fee-producing interest rate swap program, we remain focused on expanding our noninterest income revenue streams. We are pleased with the improvement in credit and debit card income, which surpassed pre-pandemic levels. Controlling overhead costs remains a vital component of our growth initiatives, and we continue to review our product delivery channels, treasury management solutions, and branch network to identify opportunities to operate more efficiently."

Balance Sheet

As of March 31, 2021, total assets were $4.71 billion, up $273 million, or 6.2 percent, from December 31, 2020. Total loans increased $171 million during the first quarter of 2021, reflecting net growth in Paycheck Protection Program loans of $89.3 million and core commercial loans of $83.9 million. Commercial lines of credit remained relatively steady during the last nine months after having declined $109 million during the second quarter of 2020 largely due to the impacts of the COVID-19 pandemic environment and federal government stimulus programs. As of March 31, 2021, unfunded commitments on commercial construction and development loans totaled approximately $135 million, which are expected to be largely funded over the next 12 to 18 months. Interest-earning deposits increased $33.7 million during the first three months of 2021, primarily reflecting ongoing local deposit growth, which outpaced loan growth and an expanded securities portfolio.

Ray Reitsma, President of Mercantile Bank of Michigan, noted, "Although our lending team spent considerable time helping loan customers obtain funds under round two of the Paycheck Protection Program while also assisting round one loan recipients to gather and submit required information to the Small Business Administration for loan forgiveness determinations during the first quarter, we remained focused on meeting the customary needs of our existing clients and identifying and attracting new customer relationships. We are very pleased with the level of net core commercial loan growth during the quarter, along with the continuing strength of our commercial loan and residential mortgage loan pipelines."

Excluding Paycheck Protection Program loan balances, commercial and industrial loans and owner-occupied commercial real estate loans together represented approximately 55 percent of total commercial loans as of March 31, 2021, a level that has remained relatively consistent and in line with internal expectations.

Total deposits at March 31, 2021, were $3.64 billion, up $233 million, or 6.8 percent, from December 31, 2020. Local deposits were up $249 million during the first three months of 2021, while brokered deposits were down $16.0 million. The growth in local deposits, which occurred despite typical and expected seasonal business deposit withdrawals used for bonus and tax payments, mainly 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 March 31, 2021. Wholesale funds were $425 million, or approximately 10 percent of total funds, as of March 31, 2021, compared to $441 million, or approximately 11 percent of total funds, as of December 31, 2020.

Asset Quality

Nonperforming assets at March 31, 2021, were $3.2 million, or 0.1 percent of total assets, compared to $4.1 million, or 0.1 percent of total assets, at December 31, 2020, and $3.7 million, or 0.1 percent of total assets, at March 31, 2020. The level of past due loans remains nominal, and loan relationships on the internal watch list have remained relatively consistent in number and dollar volume during the first three months of 2021. During the first quarter of 2021, loan charge-offs totaled $0.1 million, while recoveries of prior period loan charge-offs equaled $0.5 million, providing for net loan recoveries of $0.4 million, or an annualized 0.05 percent of average total loans.

Mr. Reitsma commented, "As evidenced by continuing low levels of past due loans and nonperforming assets, our asset quality has remained strong during the COVID-19 pandemic. The ongoing strength in our asset quality metrics depicts our commitment to sound underwriting and the effectiveness of our commercial borrowers' management teams in meeting the challenges presented by the pandemic. Virtually all commercial and retail loan customers that were granted loan payment deferrals are now making full contractual loan payments."

Capital Position

The Bank's capital position remains "well-capitalized" with a total risk-based capital ratio of 13.3 percent as of March 31, 2021, compared to 13.5 percent at December 31, 2020. At March 31, 2021, the Bank had approximately $115 million in excess of the 10.0 percent minimum regulatory threshold required to be considered a "well-capitalized" institution. Mercantile reported 16,219,138 total shares outstanding at March 31, 2021.

As part of a $20 million common stock repurchase program announced in May 2019, Mercantile repurchased approximately 118,000 shares for $3.5 million, or a weighted average all-in cost per share of $29.91, during the first quarter of 2021.

Mr. Kaminski concluded, "We have continued to closely monitor new pandemic-related developments and have revised our COVID-19 pandemic response plan as necessary to provide customers with needed banking services while protecting them and our employees from the spread of the coronavirus to the best of our abilities. Our ongoing financial strength has allowed us to build shareholder value through a continuation of the cash dividend program despite the challenges stemming from the pandemic, and we are focused on positioning our company to remain a consistent high performer. We are excited about Mercantile's future and believe that our strong first quarter financial performance has positioned us to deliver solid operating results during the remainder of 2021."

Investor Presentation

Mercantile has prepared presentation materials (the "Conference Call & Webcast Presentation") that management intends to use during its previously announced first quarter 2021 conference call on Tuesday, April 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 more detailed 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 44 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; demand for products and services; the degree of competition by traditional and nontraditional competitors; changes in banking regulation or actions by bank regulators; our participation in the Paycheck Protection Program administered by the Small Business Administration; 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 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, including the significant disruption to financial market and other economic activity caused by the outbreak and continuance of the COVID-19 pandemic; 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.

FOR FURTHER INFORMATION:

Robert B. Kaminski, Jr. Charles Christmas

President and CEO Executive Vice President and CFO

616-726-1502 616-726-1202

rkaminski@mercbank.com cchristmas@mercbank.com

Mercantile Bank Corporation

First Quarter 2021 Results

MERCANTILE BANK CORPORATION

CONSOLIDATED BALANCE SHEETS

(Unaudited)

MARCH 31, DECEMBER 31, MARCH 31,

2021 2020 2020

ASSETS

Cash and due from banks $ 55,489,000 $ 62,832,000 $ 49,781,000

Interest-earning deposits 596,855,000 563,174,000 186,938,000

Total cash and cash equivalents 652,344,000 626,006,000 236,719,000

Securities available for sale 434,257,000 387,347,000 312,147,000

Federal Home Loan Bank stock 18,002,000 18,002,000 18,002,000

Loans 3,364,370,000 3,193,470,000 2,876,891,000

Allowance for loan losses (38,695,000) (37,967,000) (24,828,000)

Loans, net 3,325,675,000 3,155,503,000 2,852,063,000

Premises and equipment, net 55,388,000 58,959,000 59,143,000

Bank owned life insurance 72,395,000 72,131,000 70,613,000

Goodwill 49,473,000 49,473,000 49,473,000

Core deposit intangible, net 2,118,000 2,436,000 3,443,000

Mortgage loans held for sale 40,297,000 22,888,000 24,652,000

Assets held for sale 13,159,000 0 0

Other assets 47,246,000 44,599,000 31,132,000

Total assets $ 4,710,354,000 $ 4,437,344,000 $ 3,657,387,000

LIABILITIES AND SHAREHOLDERS' EQUITY

Deposits:

Noninterest-bearing $ 1,605,471,000 $ 1,433,403,000 $ 956,290,000

Interest-bearing 2,039,491,000 1,978,150,000 1,689,126,000

Total deposits 3,644,962,000 3,411,553,000 2,645,416,000

Securities sold under agreements to repurchase 141,310,000 118,365,000 133,270,000

Federal Home Loan Bank advances 394,000,000 394,000,000 394,000,000

Subordinated debentures 47,733,000 47,563,000 47,051,000

Liabilities held for sale 17,280,000 0 0

Accrued interest and other liabilities 23,826,000 24,309,000 19,261,000

Total liabilities 4,269,111,000 3,995,790,000 3,238,998,000

SHAREHOLDERS' EQUITY

Common stock 299,358,000 302,029,000 299,584,000

Retained earnings 143,642,000 134,039,000 114,012,000

Accumulated other comprehensive income/(loss) (1,757,000) 5,486,000 4,793,000

Total shareholders' equity 441,243,000 441,554,000 418,389,000

Total liabilities and shareholders' equity $ 4,710,354,000 $ 4,437,344,000 $ 3,657,387,000

Mercantile Bank Corporation

First Quarter 2021 Results

MERCANTILE BANK CORPORATION

CONSOLIDATED REPORTS OF INCOME

(Unaudited)

THREE MONTHS ENDED THREE MONTHS ENDED

March 31, 2021 March 31, 2020

INTEREST INCOME

Loans, including fees $ 32,985,000 $ 33,442,000

Investment securities 1,632,000 4,017,000

Other interest-earning assets 168,000 475,000

Total interest income 34,785,000 37,934,000

INTEREST EXPENSE

Deposits 2,717,000 4,641,000

Short-term borrowings 36,000 40,000

Federal Home Loan Bank advances 2,027,000 2,212,000

Other borrowed money 472,000 724,000

Total interest expense 5,252,000 7,617,000

Net interest income 29,533,000 30,317,000

Provision for loan losses 300,000 750,000

Net interest income after

provision for loan losses 29,233,000 29,567,000

NONINTEREST INCOME

Service charges on accounts 1,155,000 1,222,000

Mortgage banking income 8,800,000 2,627,000

Credit and debit card income 1,678,000 1,361,000

Interest rate swap income 653,000 0

Payroll services 557,000 577,000

Earnings on bank owned life insurance 277,000 336,000

Other income 343,000 427,000

Total noninterest income 13,463,000 6,550,000

NONINTEREST EXPENSE

Salaries and benefits 15,086,000 13,528,000

Occupancy 2,014,000 2,059,000

Furniture and equipment 889,000 778,000

Data processing costs 2,617,000 2,483,000

Other expense 4,511,000 4,092,000

Total noninterest expense 25,117,000 22,940,000

Income before federal income

tax expense 17,579,000 13,177,000

Federal income tax expense 3,340,000 2,504,000

Net Income $ 14,239,000 $ 10,673,000

Basic earnings per share $0.87 $0.65

Diluted earnings per share $0.87 $0.65

Average basic shares outstanding 16,283,044 16,350,281

Average diluted shares outstanding 16,283,490 16,351,559

Mercantile Bank Corporation

First Quarter 2021 Results

MERCANTILE BANK CORPORATION

CONSOLIDATED FINANCIAL HIGHLIGHTS

(Unaudited)

Quarterly

(dollars in thousands except per share data) 2021 2020 2020 2020 2020

1st Qtr 4th Qtr 3rd Qtr 2nd Qtr 1st Qtr

EARNINGS

Net interest income $ 29,533 31,849 29,509 30,571 30,317

Provision for loan losses $ 300 2,500 3,200 7,600 750

Noninterest income $ 13,463 14,333 13,307 10,984 6,550

Noninterest expense $ 25,117 25,941 26,423 23,216 22,940

Net income before federal income

tax expense $ 17,579 17,741 13,193 10,739 13,177

Net income $ 14,239 14,082 10,686 8,698 10,673

Basic earnings per share $ 0.87 0.87 0.66 0.54 0.65

Diluted earnings per share $ 0.87 0.87 0.66 0.54 0.65

Average basic shares outstanding 16,283,044 16,279,052 16,233,196 16,212,500 16,350,281

Average diluted shares outstanding 16,283,490 16,279,243 16,233,666 16,213,264 16,351,559

PERFORMANCE RATIOS

Return on average assets 1.26% 1.25% 0.98% 0.85% 1.19%

Return on average equity 13.02% 12.75% 9.86% 8.26% 10.20%

Net interest margin (fully tax-equivalent) 2.77% 3.00% 2.86% 3.17% 3.63%

Efficiency ratio 58.42% 56.17% 61.71% 55.87% 62.22%

Full-time equivalent employees 621 621 618 637 626

YIELD ON ASSETS / COST OF FUNDS

Yield on loans 4.03% 4.34% 4.03% 4.18% 4.69%

Yield on securities 1.61% 1.69% 2.26% 3.37% 4.73%

Yield on other interest-earning assets 0.11% 0.12% 0.12% 0.15% 1.22%

Yield on total earning assets 3.26% 3.55% 3.45% 3.85% 4.54%

Yield on total assets 3.09% 3.35% 3.25% 3.62% 4.23%

Cost of deposits 0.31% 0.37% 0.41% 0.48% 0.70%

Cost of borrowed funds 1.78% 1.75% 1.78% 1.91% 2.31%

Cost of interest-bearing liabilities 0.82% 0.91% 0.99% 1.11% 1.36%

Cost of funds (total earning assets) 0.49% 0.55% 0.59% 0.68% 0.91%

Cost of funds (total assets) 0.47% 0.51% 0.56% 0.64% 0.85%

PURCHASE ACCOUNTING ADJUSTMENTS

Loan portfolio - increase interest income $ 51 158 332 169 285

Trust preferred - increase interest expense $ 171 171 171 171 171

Core deposit intangible - increase overhead $ 318 318 318 371 397

MORTGAGE BANKING ACTIVITY

Total mortgage loans originated $ 245,200 218,904 237,195 275,486 132,859

Purchase mortgage loans originated $ 81,529 99,490 93,068 58,015 46,538

Refinance mortgage loans originated $ 163,671 119,414 144,127 217,471 86,321

Mortgage loans originated to sell $ 195,655 159,942 191,318 225,665 95,327

Net gain on sale of mortgage loans $ 9,182 9,476 10,199 7,760 2,086

CAPITAL

Tangible equity to tangible assets 8.36% 8.89% 8.69% 8.74% 10.14%

Tier 1 leverage capital ratio 9.67% 9.77% 9.80% 10.21% 11.47%

Common equity risk-based capital ratio 11.11% 11.34% 11.37% 11.34% 10.92%

Tier 1 risk-based capital ratio 12.41% 12.68% 12.74% 12.74% 12.28%

Total risk-based capital ratio 13.51% 13.80% 13.82% 13.73% 13.03%

Tier 1 capital $ 437,567 430,146 420,225 412,526 406,445

Tier 1 plus tier 2 capital $ 476,462 468,113 455,797 444,772 431,273

Total risk-weighted assets $ 3,526,161 3,391,563 3,298,047 3,238,444 3,309,336

Book value per common share $ 27.21 27.04 26.59 26.20 25.82

Tangible book value per common share $ 24.02 23.86 23.37 22.96 22.55

Cash dividend per common share $ 0.29 0.28 0.28 0.28 0.28

ASSET QUALITY

Gross loan charge-offs $ 53 340 124 335 40

Recoveries $ 481 234 250 153 229

Net loan charge-offs (recoveries) $ (428) 106 (126) 182 (189)

Net loan charge-offs (recoveries) to average loans (0.05%) 0.01% (0.02%) 0.02% (0.03%)

Allowance for loan losses $ 38,695 37,967 35,572 32,246 24,828

Allowance to loans 1.15% 1.19% 1.07% 0.98% 0.86%

Allowance to loans excluding PPP loans 1.33% 1.33% 1.27% 1.16% 0.86%

Nonperforming loans $ 2,793 3,384 4,141 3,212 3,469

Other real estate/repossessed assets $ 374 701 512 198 271

Nonperforming loans to total loans 0.08% 0.11% 0.12% 0.10% 0.12%

Nonperforming assets to total assets 0.07% 0.09% 0.11% 0.08% 0.10%

NONPERFORMING ASSETS - COMPOSITION

Residential real estate:

Land development $ 34 35 36 36 37

Construction $ 0 0 198 198 283

Owner occupied / rental $ 2,305 2,607 2,597 2,750 2,922

Commercial real estate:

Land development $ 0 0 0 0 43

Construction $ 0 0 0 0 0

Owner occupied $ 646 1,232 1,576 275 287

Non-owner occupied $ 0 22 23 25 0

Non-real estate:

Commercial assets $ 169 172 198 98 156

Consumer assets $ 13 17 25 28 12

Total nonperforming assets $ 3,167 4,085 4,653 3,410 3,740

NONPERFORMING ASSETS - RECON

Beginning balance $ 4,085 4,653 3,410 3,740 2,736

Additions $ 116 972 1,615 220 1,313

Return to performing status $ (115) 0 (72) (26) (7)

Principal payments $ (559) (1,064) (249) (278) (110)

Sale proceeds $ (77) (245) 0 (49) (192)

Loan charge-offs $ (33) (231) (51) (173) 0

Valuation write-downs $ (250) 0 0 (24) 0

Ending balance $ 3,167 4,085 4,653 3,410 3,740

LOAN PORTFOLIO COMPOSITION

Commercial:

Commercial & industrial $ 1,284,507 1,145,423 1,321,419 1,307,456 873,679

Land development & construction $ 58,738 55,055 50,941 52,984 62,908

Owner occupied comm'l R/E $ 544,342 529,953 549,364 567,621 579,229

Non-owner occupied comm'l R/E $ 932,334 917,436 878,897 841,145 823,366

Multi-family & residential rental $ 147,294 146,095 137,740 132,047 133,148

Total commercial $ 2,967,215 2,793,962 2,938,361 2,901,253 2,472,330

Retail:

1-4 family mortgages $ 337,844 337,888 322,118 325,923 331,686

Home equity & other consumer $ 59,311 61,620 63,723 64,743 72,875

Total retail $ 397,155 399,508 385,841 390,666 404,561

Total loans $ 3,364,370 3,193,470 3,324,202 3,291,919 2,876,891

END OF PERIOD BALANCES

Loans $ 3,364,370 3,193,470 3,324,202 3,291,919 2,876,891

Securities $ 452,259 405,349 330,426 325,663 330,149

Other interest-earning assets $ 596,855 563,174 495,308 386,711 186,938

Total earning assets (before allowance) $ 4,413,484 4,161,993 4,149,936 4,004,293 3,393,978

Total assets $ 4,710,354 4,437,344 4,420,610 4,314,379 3,657,387

Noninterest-bearing deposits $ 1,605,471 1,433,403 1,449,879 1,445,620 956,290

Interest-bearing deposits $ 2,039,491 1,978,150 1,922,155 1,816,660 1,689,126

Total deposits $ 3,644,962 3,411,553 3,372,034 3,262,280 2,645,416

Total borrowed funds $ 584,672 562,360 600,892 611,298 576,996

Total interest-bearing liabilities $ 2,624,163 2,540,510 2,523,047 2,427,958 2,266,122

Shareholders' equity $ 441,243 441,554 431,900 425,221 418,389

AVERAGE BALANCES

Loans $ 3,318,281 3,268,866 3,292,025 3,254,985 2,849,892

Securities $ 419,514 365,631 327,668 333,843 344,906

Other interest-earning assets $ 591,617 559,593 457,598 251,833 153,638

Total earning assets (before allowance) $ 4,329,412 4,194,090 4,077,291 3,840,661 3,348,436

Total assets $ 4,578,887 4,459,370 4,346,624 4,119,573 3,602,784

Noninterest-bearing deposits $ 1,510,334 1,478,616 1,454,887 1,304,986 923,827

Interest-bearing deposits $ 2,026,896 1,936,069 1,863,302 1,767,985 1,724,030

Total deposits $ 3,537,230 3,414,685 3,318,189 3,072,971 2,647,857

Total borrowed funds $ 576,645 588,100 583,994 607,074 517,961

Total interest-bearing liabilities $ 2,603,541 2,524,169 2,447,296 2,375,059 2,241,991

Shareholders' equity $ 443,548 438,171 429,865 422,230 419,612

MBWM-ER

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SOURCE Mercantile Bank Corporation