Mercantile Net Up Nearly 40 Percent

October 11, 2004
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WYOMING — Mercantile Bank Corp. reported third quarter net income of $3.1 million, a 39.8 percent increase over the $2.2 million reported in 2003’s third quarter. Diluted earnings per share were 43 cents, compared with 37 cents in the prior year’s third quarter.

Total revenue was $12 million in the just passed quarter, compared with $9.1 million in the year-ago quarter.

For the first nine months, net income was $9.2 million, nearly 32 percent higher than net income posted for the first nine months of last year. Diluted earnings per share were $1.26 vs. $1.19 for the same period the year before.

Non-interest deposits rose 43.4 percent in the third quarter to $111 million, according to CFO Charles Christmas. Loans grew by 13 percent, or $1.2 million, to $280 million in the quarter, topping the record loan growth set in 2003’s third quarter.

With new loans, the vast majority of customers continue to elect a floating rate over a fixed rate, Christmas said. Currently, 80 percent of loans in Mercantile’s portfolio are of the floating rate variety. Four years ago only 35 percent of them had floating rates, he pointed out.

Exceptional loan growth is a “recurring theme” for Mercantile, said Chairman and CEO Gerald Johnson Jr.

He said even if short-term rates rise, the bank’s balance sheet is “extremely well positioned” to mitigate any impact of that with the new $16 million trust-preferred securities that the bank just closed on. Even though Mercantile incurred an $845,000 pretax charge on the securities, he said with the disparate rate structure the bank can recover that amount fairly quickly.

“At the risk of sounding like a broken record, the song remains the same here at Mercantile: Growth across the board on the balance sheet and loans and deposits combined,” remarked President Michael Price.

Mercantile’s new 30,000-square-foot Holland/Lakeshore office is nearly complete and the company anticipates moving in by the end of this month, said Executive Vice President Bob Kaminski. He said momentum is strong in the Holland market for Mercantile as new customer opportunities continue to increase.

Kaminski further noted that Mercantile’s new 50,000-square-foot headquarters at

Leonard Street
and U.S. 131 in Grand Rapids will likely be completed and occupied next spring.

The bank’s assets grew by $96 million in the quarter, and Johnson pointed out that Mercantile was fast approaching the $1.5 billion mark. Total assets were $1.47 billion at Sept. 30.

Mercantile’s board of directors also announced last week a fourth quarter cash dividend of 9 cents per share on the company’s common stock payable Dec. 10 to shareholders of record as of Nov. 10.

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