Banking & Finance

Mercantile Bank earns $3.5M in 3Q13

October 15, 2013
| By Pete Daly |
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Mercantile Bank Corporation in Grand Rapids has released its earnings for the third quarter of fiscal 2013.

Income

Mercantile Bank (NASDAQ: MBWM) reported an earnings increase of 33 percent over last year’s third quarter, while it also reports the bank’s assets quality is continuing to improve.

Net income on common shares of Mercantile stock totaled $3.5 million, or 40 cents per diluted share. Last year, that totaled $2.6 million, or 30 cents per share.

Revenue

Total revenue during the third quarter, which consists of net interest income and noninterest income, was $13.7 million, up slightly from the $13.6 million in the same quarter last year. The increase resulted from higher net interest income, which more than offset lower noninterest income.

Noninterest income during the third quarter was down 18.2 percent from the prior year, and the decrease mainly resulted from lower rental income on foreclosed properties and residential mortgage banking fee income.

Loans

The third quarter was highlighted by new loan originations totaling approximately $74 million, while nonperforming assets declined 66 percent from a year ago, representing slightly less than one percent of total assets.

No loans were in the 30- to 89-days delinquent category at quarter end, and the net interest margin remains well above historical average.

The bank has announced a fourth-quarter cash dividend of 12 cents per common share, reflecting a current annual yield of approximately 2.3 percent.

Firstbank merger

As announced in August, Mercantile Bank has also signed a merger agreement with Firstbank Corporation in Alma. The after tax merger-related costs were $700,000 in the quarter. The merger will create one of the largest banking institutions with headquarters in Michigan.

"Mercantile's very strong performance continued through the third quarter of 2013, as we continued to demonstrate leadership in our markets," said Michael Price, chairman/CEO. "Mercantile delivered strong operating results, improved financial strength and continued to build momentum in an improving regional economy.

“We continue to be encouraged by positive trends in new business development and remain confident that our year-to-date performance is indicative of the opportunities available to us over the remainder of 2013 and into 2014," Price added.

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