Mercantile records $5M loss
Although Mercantile Corp. returned to profitability in the second half of 2008, it reported today a net loss of $5 million, or 59 cents per diluted share, for the full fiscal year. In comparison, the company reported net income of $9 million, or $1.06 per share for the same 12-month period in 2007. For the last quarter of 2008, net income was $0.3 million, or 4 cents per diluted share, up from net income of $0.1 million, or 1 cent per share, for 2007’s fourth quarter. The company indicated that its full-year 2008 performance was affected primarily by a lower average net interest margin relative to 2007 and due to declining interest rates and a higher provision for loan and lease losses.
The provision for loan and lease losses totaled $21.2 million for 2008, of which $4 million was recorded in the fourth quarter. The 2007 provision expense was $11.1 million, of which $4.9 million was reported in the fourth quarter.
Mercantile Chairman and CEO Michael Price said credit quality remains the company’s major concern and that the company remains vigilant in the identification and management of problem assets.
“We began actively working with our borrowers as soon as our local economy began to show signs of weakness — over six quarters ago — and by now we have developed a constructive dialogue with the majority of our borrowers, which has strengthened our relationships and enhanced our ability to resolve complex issues,” Price stated. .
Total revenue for 2008 was $53.5 million, a decline of nearly 13 percent from the 2007 total. Total assets were $2.21 billion as of Dec. 31, 2008, an increase of $86.6 million since Dec. 31, 2007.
Mercantile also announced today that it board of directors declared a first quarter cash dividend of 4 cents per share on the corporation’s common stock payable on March 10 to shareholders of record as of Feb. 10.