MBWM Mercantile Bank Corporation

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Michigan	000-26719	38-3360865
(State or other jurisdiction  of incorporation)	(Commission File  Number)	(IRS Employer  Identification Number)

310 Leonard Street NW, Grand Rapids, Michigan	49504
(Address of principal executive offices)	(Zip Code)
Registrant's telephone number, including area code	616-406-3000

Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Common Stock	MBWM	The Nasdaq Stock Market LLC

Item 2.02

Results of Operations and Financial Condition.

Item 7.01

Regulation FD Disclosure.

Item 9.01

Financial Statements and Exhibits.

99.1	Press release of Mercantile Bank Corporation dated July 16, 2024, reporting financial results and earnings for the quarter ended June 30, 2024.

99.2	Mercantile Bank Corporation Conference Call & Webcast Presentation dated July 16, 2024.

104	Cover Page Interactive Data File (embedded within the Inline XBRL document)

	Mercantile Bank Corporation
	By:	/s/ Charles E. Christmas
		Charles E. Christmas
		Executive Vice President, Chief
		Financial Officer and Treasurer

99.1	Press release of Mercantile Bank Corporation dated July 16, 2024, reporting financial results and earnings for the quarter ended June 30, 2024.

99.2	Mercantile Bank Corporation Conference Call & Webcast Presentation dated July 16, 2024.

104	Cover Page Interactive Data File (embedded within the Inline XBRL document)

Exhibit 99.1

 

 

Mercantile Bank Corporation Announces Solid Second Quarter Results

Strong local deposit and commercial loan growth and ongoing strength in asset quality metrics highlight quarter

 

GRAND RAPIDS, Mich., July 16, 2024 – Mercantile Bank Corporation (NASDAQ: MBWM) ("Mercantile") reported net income of $18.8 million, or $1.17 per diluted share, for the second quarter of 2024, compared with net income of $20.4 million, or $1.27 per diluted share, for the second quarter of 2023.  Net income during the first six months of 2024 totaled $40.3 million, or $2.50 per diluted share, compared with net income of $41.3 million, or $2.58 per diluted share, during the first six months of 2023.

 

“Our solid second quarter financial performance provides further evidence of our ability to successfully navigate the challenges arising from shifting economic and operating environments,” said Ray Reitsma, President and Chief Executive Officer of Mercantile. “We are very pleased with the levels of local deposit and commercial loan growth during the quarter, which demonstrate our ongoing focus on new client acquisition, meeting the banking needs of existing customers, and relationship banking.  Our net interest margin remained healthy during the second quarter, which when coupled with the local deposit and commercial loan expansion and notable increases in several noninterest income categories, provided for strong operating results during the period.  As evidenced by the sustained strength in asset quality metrics, we remain committed to growing and administering the loan portfolio in a disciplined manner.”

 

Second quarter highlights include:

 

●

Strong local deposit growth

●

Robust commercial loan portfolio expansion

●

Continuing strength in commercial loan pipeline

●

Substantial increases in several noninterest income revenue streams

●

Sustained low levels of nonperforming assets, past due loans, and loan charge-offs

●

Solid capital position

 

 

Operating Results

 

Net revenue, consisting of net interest income and noninterest income, was $56.8 million during the second quarter of 2024, up $1.6 million, or 2.8 percent, from $55.2 million during the prior-year second quarter.  Net interest income during the current-year second quarter was $47.1 million, down $0.5 million, or 1.0 percent, from $47.6 million during the respective 2023 period as higher yields on, along with growth in, earning assets were more than offset by an increased cost of funds. Noninterest income totaled $9.7 million during the second quarter of 2024, up $2.0 million, or 26.6 percent, from $7.7 million during the second quarter of 2023.  The increase in noninterest income mainly reflected higher levels of mortgage banking income and service charges on accounts. 

 

The net interest margin was 3.63 percent in the second quarter of 2024, down from 4.05 percent in the prior-year second quarter.  The yield on average earning assets was 6.07 percent during the current-year second quarter, an increase from 5.61 percent during the respective 2023 period.  The higher yield primarily resulted from an increased yield on loans.  The yield on loans was 6.64 percent during the second quarter of 2024, up from 6.19 percent during the second quarter of 2023 mainly due to higher interest rates on variable-rate commercial loans resulting from the Federal Open Market Committee (“FOMC”) raising the targeted federal funds rate in an effort to reduce elevated inflation levels.  The FOMC increased the targeted federal funds rate by 75 basis points during the period of March 2023 through July 2023, during which time average variable-rate commercial loans represented approximately 68 percent of average total commercial loans.

 

The cost of funds was 2.44 percent in the second quarter of 2024, up from 1.56 percent in the second quarter of 2023 primarily due to higher costs of deposits and borrowed funds, reflecting the impact of the rising interest rate environment.  A change in funding mix, mainly consisting of a decrease in noninterest-bearing and lower-cost deposits and an increase in higher-cost money market accounts and time deposits stemming from deposit migration and new deposit relationships, also contributed to the increased cost of funds.

 

Mercantile recorded provisions for credit losses of $3.5 million and $2.0 million during the second quarters of 2024 and 2023, respectively.  The provision expense recorded during the current-year second quarter primarily reflected an individual allocation for a nonperforming commercial loan relationship and allocations necessitated by net loan growth.  The provision expense recorded during the second quarter of 2023 mainly reflected allocations required by net loan growth and adjustments to historical loss factors to better represent Mercantile’s expectations for future credit losses.

  

 

Noninterest income totaled $9.7 million during the second quarter of 2024, up $2.0 million, or 26.6 percent, from $7.7 million during the second quarter of 2023.  The growth primarily resulted from increases in mortgage banking income and service charges on accounts, with the latter mainly stemming from enhanced use of cash management products.  The higher level of mortgage banking income primarily resulted from an increased loan sold percentage, which rose from approximately 43 percent during the second quarter of 2023 to approximately 75 percent during the second quarter of 2024.  Increases in payroll service fees, bank owned life insurance income, and interest rate swap income also contributed to the higher level of noninterest income.

 

Noninterest expense totaled $29.7 million during the second quarter of 2024, compared to $27.8 million during the prior-year second quarter.  The increase in noninterest expense mainly resulted from larger salary costs, reflecting annual merit pay increases, market adjustments, higher residential mortgage lender commissions and incentives, and lower residential mortgage loan deferred salary costs.  Higher levels of data processing costs, primarily reflecting increased transaction volume and software support costs, and health insurance claims also contributed to the rise in noninterest expense.

 

Mr. Reitsma commented, “We are very pleased with the noteworthy increases in mortgage banking income and treasury management fees.  The growth in mortgage banking income mainly reflected the success of a strategic initiative to increase the percentage of loans originated with the intent to sell, while the higher level of treasury management fees, which was fueled by increases in service charges on accounts and payroll processing fees, in large part stemmed from the expanded use of products and services. Our net interest margin, while decreasing as anticipated due to a higher cost of funds, remained above historical levels during the second quarter of 2024.  We regularly review our operating processes to identify further opportunities to improve efficiency while meeting balance sheet growth objectives and continuing to provide customers with the excellent service that they have become accustomed to.  Despite the unique circumstances surrounding a troubled non-real-estate-related commercial loan relationship that necessitated a sizeable reserve allocation, we believe the credit trends associated with our commercial loan portfolio remain solid and steady.”

 

 

Balance Sheet

 

As of June 30, 2024, total assets were $5.60 billion, up $249 million from December 31, 2023.  Total loans increased $134 million, or an annualized 6.3 percent, during the first six months of 2024, primarily reflecting commercial loan growth of $118 million, or an annualized 6.9 percent.  The commercial loan portfolio growth during the first six months of 2024 occurred despite the full payoffs and partial paydowns of certain larger relationships, which aggregated approximately $76 million during the period.  The payoffs and paydowns primarily resulted from customers using excess cash flows generated within their operations to make line of credit and unscheduled term loan principal paydowns, as well as from sales of assets.  Residential mortgage loans and other consumer loans grew $12.2 million and $4.3 million, respectively, during the first half of 2024.  Interest-earning deposits and securities available for sale increased $75.6 million and $30.8 million, respectively, during the first six months of 2024, with the growth in interest-earning deposits largely reflecting the success of a strategic initiative to enhance on-balance sheet liquidity.

 

As of June 30, 2024, 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 approximately $320 million and $37 million, respectively.

 

Commercial and industrial loans and owner-occupied commercial real estate loans combined represented approximately 57 percent of total commercial loans as of June 30, 2024, a level that has remained relatively consistent with prior periods and in line with management’s expectations.

 

 

Total deposits equaled $4.15 billion as of June 30, 2024, representing an increase of $246 million, or an annualized 12.6 percent, from December 31, 2023.  Local deposits were up $261 million, or 14.0 percent annualized, during the first six months of 2024, while brokered deposits decreased $15.2 million during the respective period.  The growth in local deposits, which exceeded loan growth by over 6 percent on an annualized basis, provided for a reduction in the loan-to-deposit ratio from 110 percent as of December 31, 2023, to 107 percent as of June 30, 2024.  The increase in local deposits during the first six months of 2024, which occurred despite the typical level of seasonal noninterest-bearing deposit withdrawals by customers to make bonus and tax payments and partnership distributions, reflected new deposit relationships and growth in existing deposit relationships.  Wholesale funds were $580 million, or approximately 12 percent of total funds, at June 30, 2024, compared to $636 million, or approximately 14 percent of total funds, at December 31, 2023.  Noninterest-bearing checking accounts represented approximately 27 percent of total deposits as of June 30, 2024, which is in line with historical levels.

 

Mr. Reitsma noted, “The significant growth in commercial loans during the first six months of 2024, reflecting increases in all portfolio segments, occurred despite elevated amounts of full and partial payoffs and paydowns.  Our lending team has done an exceptional job of meeting existing customers’ credit needs and identifying new lending opportunities, with an emphasis on securing potential clients’ overall banking relationships.  In light of our robust commercial loan pipeline and credit availability for commercial construction and development loans, we believe commercial loan growth will be solid in forthcoming periods.  We are delighted with the local deposit growth during the year-to-date period, and gaining deposit market share will remain a top priority.”

 

Asset Quality

 

Nonperforming assets totaled $9.1 million, or 0.2 percent of total assets, at June 30, 2024, compared to $6.2 million, or 0.1 percent of total assets, at March 31, 2024, and $3.6 million, or less than 0.1 percent of total assets, at December 31, 2023.  The increase in nonperforming assets during the first six months of 2024 substantially resulted from the deterioration of two commercial loan relationships, which were placed on nonaccrual and fully reserved for during the period.  The level of past due loans remains nominal.  During the second quarter of 2024, loan charge-offs were minimal, while recoveries of prior period loan charge-offs equaled $0.3 million, providing for net loan recoveries of $0.3 million, or an annualized 0.02 percent of average total loans.  During the first six months of 2024, loan charge-offs totaled less than $0.1 million, while recoveries of prior period loan charge-offs equaled $0.7 million, providing for net loan recoveries of $0.7 million, or an annualized 0.03 percent of average total loans.

 

Mr. Reitsma remarked, “Our steadfast commitment to employing thorough and disciplined underwriting practices to meet loan portfolio growth objectives is evidenced by our sustained strength in asset quality metrics.  Nonperforming assets, while increasing during the first six months of 2024 primarily due to the deterioration of two non-real-estate-related commercial loan relationships, remain at a low level.  As reflected by continuing low levels of nonaccrual loans, past due loans, and loan charge-offs, our commercial borrowers have continued to demonstrate resiliency in dealing with the challenges stemming from current operating conditions, including higher interest rates and the associated increase in debt service requirements.  We continue to closely monitor our commercial loan portfolio for signs of systemic distress and believe our efforts to identify emerging credit issues as soon as possible will help limit the impact of any such noted issues on our overall financial condition.  Our residential mortgage loan and consumer loan portfolios, which have not exhibited signs of systemic credit deterioration, such as higher delinquency levels, have continued to perform well.”

 

Capital Position

 

Shareholders’ equity totaled $551 million as of June 30, 2024, up $29.0 million from December 31, 2023.  Mercantile Bank maintained “well-capitalized” positions at the end of the second quarter of 2024 and year-end 2023, with total risk-based capital ratios of 13.9 percent and 13.4 percent, respectively.  As of June 30, 2024, Mercantile Bank had approximately $204 million in excess of the 10 percent minimum regulatory threshold required to be categorized as a “well-capitalized” institution. 

 

All of Mercantile Bank’s investments are categorized as available-for-sale.  As of June 30, 2024, the net unrealized loss on these investments totaled $67.4 million, resulting in an after-tax reduction to equity capital of $53.2 million.  Although unrealized gains and losses on investments are excluded from regulatory capital ratio calculations, Mercantile Bank’s excess capital over the minimum regulatory requirement to be considered a “well-capitalized” institution would approximate $151 million on an adjusted basis.

 

Mercantile reported 16,137,646 total shares outstanding as of June 30, 2024.

 

 

Mr. Reitsma concluded, “Our ongoing strong financial performance has allowed us to continue our regular quarterly cash dividend program, and as demonstrated by our announcement of an increased third quarter cash dividend earlier today, we remain committed to providing shareholders with competitive returns on their investments.  We believe our robust capital position, asset quality metrics, and operating performance, along with the sustained strength in our commercial loan pipeline, position us to remain a steady and profitable performer and withstand any challenges resulting from the current operating environment and changing economic conditions.  The increases in loans and local deposits during the first six months of 2024 reflect the success of our community banking model and associated emphasis on forming mutually beneficial relationships with established and new clients.”

 

Investor Presentation

 

Mercantile has prepared presentation materials that management intends to use during its previously announced second quarter 2024 conference call on Tuesday, July 16, 2024, 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 U.S. Securities and Exchange Commission concurrently with this press release.

 

About Mercantile Bank Corporation

 

Based in Grand Rapids, Michigan, Mercantile Bank Corporation is the bank holding company for Mercantile Bank.  Mercantile provides 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, a knowledgeable staff, and a commitment to the communities it serves, Mercantile is one of the largest Michigan-based banks with assets of approximately $5.6 billion. Mercantile Bank Corporation's common stock is listed on the NASDAQ Global Select Market under the symbol "MBWM."  For more information about Mercantile, visit www.mercbank.com, and follow us on Facebook, Instagram, X (formerly Twitter) @MercBank, and LinkedIn @merc-bank.

 

Forward-Looking Statements

 

This news release contains statements or information that may constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995.  Forward-looking statements can be identified by words such as: “anticipate,” “intend,” “plan,” “goal,” “seek,” “believe,” “project,” “estimate,” “expect,” “strategy,” “future,” “likely,” “may,” “should,” “will,” and similar references to future periods.  Any such statements are based on current expectations that involve a number of risks and uncertainties.  Actual results may differ materially from the results expressed in forward-looking statements.  Factors that might cause such a difference include changes in interest rates and interest rate relationships; increasing rates of inflation and slower growth rates 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 facts; the transition from LIBOR to SOFR; 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.  Investors are cautioned not to place undue reliance on any forward-looking statements contained herein

 

FOR FURTHER INFORMATION:

 

         

Ray Reitsma	Charles Christmas
President and CEO	Executive Vice President and CFO
616-233-2349	616-726-1202
rreitsma@mercbank.com	cchristmas@mercbank.com

                 

 

Mercantile Bank Corporation

Second Quarter 2024 Results

MERCANTILE BANK CORPORATION

CONSOLIDATED BALANCE SHEETS

(Unaudited)

 

(dollars in thousands)		JUNE 30,				DECEMBER 31,				JUNE 30,
		2024				2023				2023
ASSETS
Cash and due from banks		$	61,863			$	70,408			$	69,133
Interest-earning deposits			135,766				60,125				138,663
Total cash and cash equivalents			197,629				130,533				207,796
Securities available for sale			647,907				617,092				608,972
Federal Home Loan Bank stock			21,513				21,513				21,513
Mortgage loans held for sale			22,126				18,607				11,942
Loans			4,438,245				4,303,758				4,051,843
Allowance for credit losses			(55,408	)			(49,914	)			(44,721	)
Loans, net			4,382,837				4,253,844				4,007,122
Premises and equipment, net			50,158				50,928				52,291
Bank owned life insurance			86,001				85,668				81,500
Goodwill			49,473				49,473				49,473
Other assets			144,744				125,566				96,978
Total assets		$	5,602,388			$	5,353,224			$	5,137,587
LIABILITIES AND SHAREHOLDERS' EQUITY
Deposits:
Noninterest-bearing		$	1,119,888			$	1,247,640			$	1,371,633
Interest-bearing			3,026,686				2,653,278				2,385,156
Total deposits			4,146,574				3,900,918				3,756,789
Securities sold under agreements to repurchase			221,898				229,734				219,457
Federal Home Loan Bank advances			427,083				467,910				467,910
Subordinated debentures			49,987				49,644				49,301
Subordinated notes			89,143				88,971				88,800
Accrued interest and other liabilities			116,552				93,902				76,628
Total liabilities			5,051,237				4,831,079				4,658,885
SHAREHOLDERS' EQUITY
Common stock			297,591				295,106				292,906
Retained earnings			306,804				277,526				247,313
Accumulated other comprehensive income/(loss)			(53,244	)			(50,487	)			(61,517	)
Total shareholders' equity			551,151				522,145				478,702
Total liabilities and shareholders' equity		$	5,602,388			$	5,353,224			$	5,137,587

 

 

Mercantile Bank Corporation

Second Quarter 2024 Results

MERCANTILE BANK CORPORATION

CONSOLIDATED REPORTS OF INCOME

(Unaudited)

 

(dollars in thousands except per share data)		THREE MONTHS ENDED				THREE MONTHS ENDED				SIX MONTHS ENDED				SIX MONTHS ENDED
		June 30, 2024				June 30, 2023				June 30, 2024				June 30, 2023
INTEREST INCOME
Loans, including fees		$	72,819			$	62,006			$	144,089			$	119,159
Investment securities			3,624				3,111				7,046				6,118
Interest-earning deposits			2,436				801				4,469				1,125
Total interest income			78,879				65,918				155,604				126,402
INTEREST EXPENSE
Deposits			24,710				12,379				46,934				20,286
Short-term borrowings			1,757				914				3,412				1,373
Federal Home Loan Bank advances			3,252				3,051				6,651				4,845
Other borrowed money			2,088				2,023				4,173				3,963
Total interest expense			31,807				18,367				61,170				30,467
Net interest income			47,072				47,551				94,434				95,935
Provision for credit losses			3,500				2,000				4,800				2,600
Net interest income after provision for credit losses			43,572				45,551				89,634				93,335
NONINTEREST INCOME
Service charges on accounts			1,692				1,064				3,224				2,041
Mortgage banking income			3,023				1,835				5,365				3,050
Credit and debit card income			2,266				2,426				4,387				4,485
Interest rate swap income			766				748				2,104				1,785
Payroll services			686				572				1,582				1,317
Earnings on bank owned life insurance			437				402				1,609				802
Other income			811				598				2,277				1,117
Total noninterest income			9,681				7,645				20,548				14,597
NONINTEREST EXPENSE
Salaries and benefits			17,913				16,461				36,150				33,143
Occupancy			2,220				2,098				4,509				4,387
Furniture and equipment			923				878				1,852				1,700
Data processing costs			3,415				2,881				6,704				6,043
Charitable foundation contributions			4				2				707				12
Other expense			5,262				5,509				9,758				11,144
Total noninterest expense			29,737				27,829				59,680				56,429
Income before federal income tax expense			23,516				25,367				50,502				51,503
Federal income tax expense			4,730				5,010				10,154				10,171
Net Income		$	18,786			$	20,357			$	40,348			$	41,332
Basic earnings per share		$	1.17			$	1.27			$	2.50			$	2.58
Diluted earnings per share		$	1.17			$	1.27			$	2.50			$	2.58
Average basic shares outstanding			16,122,813				16,003,372				16,120,836				15,999,775
Average diluted shares outstanding			16,122,813				16,003,372				16,120,836				15,999,775

 

 

Mercantile Bank Corporation

Second Quarter 2024 Results

MERCANTILE BANK CORPORATION

CONSOLIDATED FINANCIAL HIGHLIGHTS

(Unaudited)

  

		Quarterly																				Year-To-Date
(dollars in thousands except per share data)		2024				2024				2023				2023				2023
		2nd Qtr				1st Qtr				4th Qtr				3rd Qtr				2nd Qtr				2024				2023
EARNINGS
Net interest income		$	47,072				47,361				48,649				48,961				47,551				94,434				95,935
Provision for credit losses		$	3,500				1,300				1,800				3,300				2,000				4,800				2,600
Noninterest income		$	9,681				10,868				8,300				9,246				7,645				20,548				14,597
Noninterest expense		$	29,737				29,944				29,940				28,920				27,829				59,680				56,429
Net income before federal income
tax expense		$	23,516				26,985				25,209				25,987				25,367				50,502				51,503
Net income		$	18,786				21,562				20,030				20,855				20,357				40,348				41,332
Basic earnings per share		$	1.17				1.34				1.25				1.30				1.27				2.50				2.58
Diluted earnings per share		$	1.17				1.34				1.25				1.30				1.27				2.50				2.58
Average basic shares outstanding			16,122,813				16,118,858				16,044,223				16,018,419				16,003,372				16,120,836				15,999,775
Average diluted shares outstanding			16,122,813				16,118,858				16,044,223				16,018,419				16,003,372				16,120,836				15,999,775
PERFORMANCE RATIOS
Return on average assets			1.36	%			1.61	%			1.52	%			1.60	%			1.64	%			1.48	%			1.69	%
Return on average equity			13.93	%			16.41	%			16.04	%			17.07	%			17.23	%			15.15	%			17.97	%
Net interest margin (fully tax-equivalent)			3.63	%			3.74	%			3.92	%			3.98	%			4.05	%			3.68	%			4.16	%
Efficiency ratio			52.40	%			51.42	%			52.57	%			49.68	%			50.42	%			51.90	%			51.05	%
Full-time equivalent employees			670				642				651				643				665				670				665
YIELD ON ASSETS / COST OF FUNDS
Yield on loans			6.64	%			6.65	%			6.53	%			6.37	%			6.19	%			6.65	%			6.05	%
Yield on securities			2.30	%			2.20	%			2.18	%			2.13	%			2.00	%			2.25	%			1.98	%
Yield on interest-earning deposits			5.28	%			5.35	%			5.31	%			5.26	%			4.88	%			5.31	%			4.65	%
Yield on total earning assets			6.07	%			6.06	%			5.95	%			5.78	%			5.61	%			6.06	%			5.48	%
Yield on total assets			5.72	%			5.72	%			5.61	%			5.45	%			5.30	%			5.72	%			5.18	%
Cost of deposits			2.42	%			2.25	%			1.94	%			1.67	%			1.36	%			2.33	%			1.12	%
Cost of borrowed funds			3.56	%			3.51	%			3.15	%			2.98	%			2.90	%			3.53	%			2.73	%
Cost of interest-bearing liabilities			3.40	%			3.27	%			2.96	%			2.69	%			2.37	%			3.33	%			2.06	%
Cost of funds (total earning assets)			2.44	%			2.32	%			2.03	%			1.80	%			1.56	%			2.38	%			1.32	%
Cost of funds (total assets)			2.31	%			2.19	%			1.91	%			1.70	%			1.48	%			2.25	%			1.25	%
MORTGAGE BANKING ACTIVITY
Total mortgage loans originated		$	122,728				79,930				88,187				108,602				117,563				202,658				189,554
Purchase/construction mortgage loans originated		$	103,939				57,668				75,365				93,520				100,941				161,607				157,669
Refinance mortgage loans originated		$	18,789				22,262				12,822				15,082				16,622				41,051				31,885
Mortgage loans originated with intent to sell		$	91,490				59,280				59,135				69,305				50,734				150,770				75,638
Income on sale of mortgage loans		$	2,487				2,064				1,487				2,386				1,570				4,551				2,520
CAPITAL
Tangible equity to tangible assets			9.03	%			8.99	%			8.91	%			8.33	%			8.43	%			9.03	%			8.43	%
Tier 1 leverage capital ratio			10.85	%			10.88	%			10.84	%			10.64	%			10.73	%			10.85	%			10.73	%
Common equity risk-based capital ratio			10.46	%			10.41	%			10.07	%			10.41	%			10.25	%			10.46	%			10.25	%
Tier 1 risk-based capital ratio			11.36	%			11.33	%			10.99	%			11.38	%			11.24	%			11.36	%			11.24	%
Total risk-based capital ratio			14.10	%			14.05	%			13.69	%			14.21	%			14.03	%			14.10	%			14.03	%
Tier 1 capital		$	602,835				587,888				570,730				554,634				537,802				602,835				537,802
Tier 1 plus tier 2 capital		$	748,097				729,410				710,905				692,252				671,323				748,097				671,323
Total risk-weighted assets		$	5,306,911				5,190,106				5,192,970				4,872,424				4,784,428				5,306,911				4,784,428
Book value per common share		$	34.15				33.29				32.38				30.16				29.89				34.15				29.89
Tangible book value per common share		$	31.09				30.22				29.31				27.06				26.78				31.09				26.78
Cash dividend per common share		$	0.35				0.35				0.34				0.34				0.33				0.70				0.66
ASSET QUALITY
Gross loan charge-offs		$	26				15				53				243				461				41				567
Recoveries		$	296				439				160				230				305				735				442
Net loan charge-offs (recoveries)		$	(270	)			(424	)			(107	)			13				156			$	(694	)			125
Net loan charge-offs to average loans			(0.02	%)			(0.04	%)		(0.01		%)			< 0.01%			0.02		%		(0.03		%)			0.01	%
Allowance for credit losses		$	55,408				51,638				49,914				48,008				44,721				55,408				44,721
Allowance to loans			1.25	%			1.19	%			1.16	%			1.17	%			1.10	%			1.25	%			1.10	%
Nonperforming loans		$	9,129				6,040				3,415				5,889				2,099				9,129				2,099
Other real estate/repossessed assets		$	0				200				200				51				661				0				661
Nonperforming loans to total loans			0.21	%			0.14	%			0.08	%			0.14	%			0.05	%			0.21	%			0.05	%
Nonperforming assets to total assets			0.16	%			0.11	%			0.07	%			0.11	%			0.05	%			0.16	%			0.05	%
NONPERFORMING ASSETS - COMPOSITION
Residential real estate:
Land development		$	1				1				1				1				2				1				2
Construction		$	0				0				0				0				0				0				0
Owner occupied / rental		$	2,288				3,370				3,095				1,913				1,793				2,288				1,793
Commercial real estate:
Land development		$	0				0				0				0				0				0				0
Construction		$	0				0				0				0				0				0				0
Owner occupied		$	0				200				270				738				716				0				716
Non-owner occupied		$	0				0				0				0				0				0				0
Non-real estate:
Commercial assets		$	6,840				2,669				249				3,288				249				6,840				249
Consumer assets		$	0				0				0				0				0				0				0
Total nonperforming assets		$	9,129				6,240				3,615				5,940				2,760				9,129				2,760
NONPERFORMING ASSETS - RECON
Beginning balance		$	6,240				3,615				5,940				2,760				8,443				3,615				7,728
Additions		$	4,570				2,802				2,166				4,163				273				7,372				1,596
Return to performing status		$	0				0				0				0				0				0				(31	)
Principal payments		$	(1,481	)			(177	)			(4,402	)			(166	)			(5,526	)			(1,658	)			(6,041	)
Sale proceeds		$	(200	)			0				(51	)			(661	)			0				(200	)			0
Loan charge-offs		$	0				0				(38	)			(156	)			(430	)			0				(492	)
Valuation write-downs		$	0				0				0				0				0				0				0
Ending balance		$	9,129				6,240				3,615				5,940				2,760				9,129				2,760
LOAN PORTFOLIO COMPOSITION
Commercial:
Commercial & industrial		$	1,275,745				1,222,638				1,254,586				1,184,993				1,229,588				1,275,745				1,229,588
Land development & construction		$	76,247				75,091				74,752				72,921				72,682				76,247				72,682
Owner occupied comm'l R/E		$	732,844				719,338				717,667				671,083				659,201				732,844				659,201
Non-owner occupied comm'l R/E		$	1,059,052				1,045,614				1,035,684				1,000,411				957,221				1,059,052				957,221
Multi-family & residential rental		$	389,390				366,961				332,609				308,229				287,285				389,390				287,285
Total commercial		$	3,533,278				3,429,642				3,415,298				3,237,637				3,205,977				3,533,278				3,205,977
Retail:
1-4 family mortgages		$	849,626				840,653				837,407				816,849				795,661				849,626				795,661
Other consumer		$	55,341				51,711				51,053				49,890				50,205				55,341				50,205
Total retail		$	904,967				829,364				888,460				866,739				845,866				904,967				845,866
Total loans		$	4,438,245				4,322,006				4,303,758				4,104,376				4,051,843				4,438,245				4,051,843
END OF PERIOD BALANCES
Loans		$	4,438,245				4,322,006				4,303,758				4,104,376				4,051,843				4,438,245				4,051,843
Securities		$	669,420				630,666				638,605				613,818				630,485				669,420				630,485
Interest-earning deposits		$	135,766				184,625				60,125				201,436				138,663				135,766				138,663
Total earning assets (before allowance)		$	5,243,431				5,137,297				5,002,488				4,919,630				4,820,991				5,243,431				4,820,991
Total assets		$	5,602,388				5,465,953				5,353,224				5,251,012				5,137,587				5,602,388				5,137,587
Noninterest-bearing deposits		$	1,119,888				1,134,995				1,247,640				1,309,672				1,371,633				1,119,888				1,371,633
Interest-bearing deposits		$	3,026,686				2,872,815				2,653,278				2,591,063				2,385,156				3,026,686				2,385,156
Total deposits		$	4,146,574				4,007,810				3,900,918				3,900,735				3,756,789				4,146,574				3,756,789
Total borrowed funds		$	789,327				815,744				837,335				761,431				826,558				789,327				826,558
Total interest-bearing liabilities		$	3,816,013				3,688,559				3,490,613				3,352,494				3,211,714				3,816,013				3,211,714
Shareholders' equity		$	551,151				536,644				522,145				483,211				478,702				551,151				478,702
AVERAGE BALANCES
Loans		$	4,396,475				4,299,163				4,184,070				4,054,279				4,017,690				4,347,819				3,973,256
Securities		$	640,627				634,099				618,517				626,714				634,607				637,363				631,137
Interest-earning deposits		$	182,636				150,234				118,996				208,932				64,958				166,435				48,113
Total earning assets (before allowance)		$	5,219,738				5,083,496				4,921,583				4,889,925				4,717,255				5,151,617				4,652,506
Total assets		$	5,533,262				5,384,675				5,224,238				5,180,847				4,988,413				5,458,969				4,922,511
Noninterest-bearing deposits		$	1,139,887				1,175,884				1,281,201				1,359,238				1,361,901				1,157,886				1,426,331
Interest-bearing deposits		$	2,957,011				2,790,308				2,600,703				2,466,834				2,278,877				2,873,659				2,231,902
Total deposits		$	4,096,898				3,966,192				3,881,904				3,826,072				3,640,778				4,031,545				3,658,233
Total borrowed funds		$	800,577				816,848				773,491				806,376				827,105				808,713				752,330
Total interest-bearing liabilities		$	3,757,588				3,607,156				3,374,194				3,273,210				3,105,982				3,682,372				2,984,232
Shareholders' equity		$	540,868				527,180				495,431				484,624				473,983				534,024				483,810

 

Exhibit 99.2

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

v3.24.2

Document And Entity Information	Jul. 16, 2024
Document Information [Line Items]
Entity, Registrant Name	Mercantile Bank Corporation
Document, Type	8-K
Document, Period End Date	Jul. 16, 2024
Entity, Incorporation, State or Country Code	MI
Entity, File Number	000-26719
Entity, Tax Identification Number	38-3360865
Entity, Address, Address Line One	310 Leonard Street NW
Entity, Address, City or Town	Grand Rapids
Entity, Address, State or Province	MI
Entity, Address, Postal Zip Code	49504
City Area Code	616
Local Phone Number	406-3000
Written Communications	false
Soliciting Material	false
Pre-commencement Tender Offer	false
Pre-commencement Issuer Tender Offer	false
Title of 12(b) Security	Common Stock
Trading Symbol	MBWM
Security Exchange Name	NASDAQ
Entity, Emerging Growth Company	false
Amendment Flag	false
Entity, Central Index Key	0001042729

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