updated 1/18/2011 6:16:54 AM ET 2011-01-18T11:16:54

GRAND RAPIDS, Mich., Jan. 18, 2011 (GLOBE NEWSWIRE) -- Mercantile Bank Corporation (Nasdaq:MBWM) ("Mercantile") reported a 2010 fourth quarter net loss attributable to common shares of $5.3 million, or ($0.62) per diluted common share, compared to a net loss of $36.4 million, or ($4.28) per diluted common share, for the year-ago quarter. For the twelve months ended December 31, 2010, Mercantile reported a net loss attributable to common shares of $14.6 million, or ($1.72) per diluted common share, compared to a net loss of $52.9 million, or ($6.23) per diluted common share, for the prior-year.

Due to the establishment of a deferred tax asset valuation allowance in the fourth quarter of 2009, distortions exist in comparisons between 2010 after-tax results and earlier periods. Under these circumstances, pre-tax results provide improved comparability and greater clarity of operating results. On a pre-tax basis, the 2010 fourth quarter loss was $3.0 million, an improvement of 86 percent compared to the $20.7 million loss recorded for the 2009 fourth quarter. For 2010, the pre-tax loss was $13.4 million, an improvement of 71 percent compared to the 2009 pre-tax loss of $46.6 million. Stronger revenue generation as well as lower provisions to the allowance for loan and lease losses contributed to the improvement in pre-tax 2010 results.

Excluding the impact of loan and lease loss provisions, and certain nonrecurring items, namely pre-tax gains from the sale of SBA loans and tax-exempt securities in 2010 and charges associated with branch consolidations and the industry-wide FDIC special assessment in 2009, pre-tax pre-provision operating earnings for the 2010 fourth quarter and twelve-month periods were $3.8 million and $17.6 million, respectively, compared to pre-tax pre-provision operating earnings of $4.6 million and $14.6 million for the comparable 2009 periods.

Michael Price, Chairman and CEO of Mercantile Bank Corporation, commented, "We continue to see improvement in credit quality and operating performance. Nonperforming assets have declined quarterly since the 2010 highpoint we reported at the end of the first quarter, but still remain at elevated levels. We anticipate improvement going forward, primarily as a result of fewer additions to the problem asset portfolio as well as a higher level of sales and other dispositions resulting from a marginally more active real estate market. We remain vigilant and aggressive in managing asset quality as we have throughout this credit cycle.

"We have learned through adversity to be highly disciplined managers of our banking business, maintaining tight control over discretionary expenses in order to preserve capital, and down-scaling our balance sheet to remain a well-capitalized bank. In fact, our capital ratios have been improving steadily over the past two years, despite the significantly increased loan loss reserve and the losses we incurred thus far during the recession. We ended the year with $34 million of capital in excess of the ten percent required for a well-capitalized bank.

"Our 2010 net interest income is back to the pre-recessionary level last achieved in 2007; however, our average loan outstandings were $1.4 billion in 2010, only 80 percent of our 2007 average loan outstandings. Despite the weak economy and a substantial level of nonperforming assets, our fourth quarter net interest margin is at its highest level since the third quarter of 2006. We believe we are fundamentally well-positioned for a strong rebound when the economy improves.

"Although the economy and our real estate market appear to have emerged from their trough, there is still a way to go before we return to a healthy state. Our manufacturing customers are reporting a higher level of sales activity, although few have requested increased lines of credit or loans for capital expansion purposes. Improvement in our real estate market is reflected in a higher level of sales activity, which has helped to stabilize pricing and valuations."

Operating Results

Total revenue, consisting of net interest income and noninterest income, was $65.6 million during 2010, up $6.7 million, or 11.4 percent, from the $58.9 million generated during 2009. Net interest income was $56.3 million, up $5.0 million, or 9.8 percent, from the $51.3 million earned in the prior-year period. Growth in net interest income was derived from a 69 basis point expansion in the net interest margin, partially offset by a 13.8 percent decline in average earning assets. Fourth quarter net interest income was $13.7 million, a 1.3 percent improvement from the prior-year fourth quarter despite a 12.7 percent decline in average earning assets.

Mr. Price further commented, "We continue to experience a substantial reduction in our funding costs; our cost of funds declined by 19 basis points from the linked quarter, and by 59 basis points from the year-ago quarter -- while losing only 15 basis points of earning asset yield compared to the fourth quarter of 2009. Our 2010 net interest margin improved 69 basis points over full-year 2009. We anticipate that the steps we've taken in 2010 to improve our funding mix, which includes the prepayment of $95 million in higher-costing Federal Home Loan Bank ("FHLB") advances during the fourth quarter, will continue to positively impact funding costs into 2011."

Noninterest income for 2010 was $9.2 million, up $1.6 million, or 22.3 percent, from the $7.6 million generated during 2009. Excluding nonrecurring gains of $0.3 million from the sale of SBA-guaranteed commercial loans and $0.5 million from the sale of securities, noninterest income during 2010 increased $0.9 million, or 11.7 percent, from the prior-year period, primarily from a $1.0 million increase in rental income from foreclosed properties; increased earnings on bank-owned life insurance offset the modest decline in service charges from a lower level of customer overdrafts. Noninterest income during the fourth quarter of 2010 was $2.3 million, up $0.4 million, or 18.0 percent, from the prior-year quarter, primarily due to increased mortgage banking income and rental income from foreclosed properties.

The provision for loan and lease losses totaled $6.8 million during the fourth quarter of 2010 and $31.8 million for the entire year compared to $25.3 million and $59.0 million for the respective 2009 periods. The reduced provision expense in 2010 compared to 2009 reflects lower levels of loan rating downgrades, nonperforming loans, and net loan and lease charge-offs, as well as the solidification of real estate market conditions and resulting valuations. Additionally, an increase in loan rating upgrades during 2010 compared to the nominal level of 2009 upgrades contributed to the lower provision expense.

The 2010 fourth quarter provision expense was $3.6 million lower than the linked-quarter provision expense of $10.4 million. Approximately $8.4 million of the elevated third quarter provision expense reflected the net impact of changes to historical and environmental factors in Mercantile's reserve allocations for accruing loans and leases. In addition, $7.9 million of troubled debt restructurings previously on nonaccrual returned to performing status in the third quarter; the associated change from impaired reserve allocations to pooled allocations for these now-performing loans increased the third quarter provision expense by $2.0 million. The allowance for loan and lease losses was 3.59 percent of total loans and leases as of December 31, 2010, compared to 3.30 percent as of September 30, 2010, and 3.11 percent at year-end 2009.

Noninterest expense during the fourth quarter of 2010 was $12.2 million compared to $10.8 million reported for the year-ago quarter. Excluding $1.0 million of nonrecurring fees relating to the prepayment of $95.0 million in FHLB advances during the 2010 fourth quarter, recurring noninterest expense was $11.2 million, up 3.0 percent from the 2009 fourth quarter. Noninterest expense for 2010 was $47.2 million compared to $46.5 million in 2009. Excluding nonrecurring costs of $1.0 million from 2010 and $2.2 million from 2009 (from branch consolidations and the industry-wide FDIC special assessment), operating expenses increased $1.9 million in 2010.

Increased costs associated with the administration and resolution of problem assets (i.e., legal expenses, property tax payments, appraisal costs and write-downs on foreclosed properties), as well as by normal FDIC insurance premiums, contributed to the higher level of noninterest expense in 2010 compared to the previous year. These credit- and regulatory-related costs totaled $3.9 million and $15.2 million for the 2010 fourth quarter and full year, respectively, compared to $3.5 million and $11.2 million for the comparable 2009 periods. Increased rental income from foreclosed properties partially offset problem asset carrying costs.

Mercantile also partially offset credit and regulatory costs through ongoing expense reductions, namely salaries and benefits, occupancy, and furniture and equipment costs. These controllable expenses decreased by $0.5 million, or 8.4 percent, during the 2010 fourth quarter and by $3.0 million, or 11.6 percent, during the full year 2010 compared to the year-ago 2009 periods.

Balance Sheet

Total assets as of December 31, 2010 were $1.63 billion, down $274 million, or 14.4 percent, from December 31, 2009; total loans and leases declined $277 million, or 18.0 percent, over the same time period, to $1.26 billion.

Real estate loans, particularly loans secured by commercial properties, comprise a majority of Mercantile's loan and lease portfolio. Although the Company has been aggressively down-sizing its real estate exposures, commercial/ industrial activity has yet to rebound sufficiently to replace loans secured by real property. At December 31, 2010, real estate loans, excluding residential mortgage loans representing permanent financing of owner-occupied dwellings and home equity lines of credit, were $887 million, or approximately 70 percent of total loans and leases. This represents a decline of $148 million, or 14.3 percent, from the $1.04 billion (67 percent of total loans and leases) at year-end 2009.

Non-owner occupied commercial real estate ("CRE") loans totaled $489 million as of December 31, 2010 (39 percent of total loans and leases), a decline of $48.5 million over the past twelve months. Owner-occupied CRE loans were $282 million at year-end 2010, a decline of $42.1 million over the same period. Vacant land, land development and construction ("C&D") loans, including both residential and commercial projects, totaled $116 million at December 31, 2010, down $57.2 million since year-end 2009. The commercial and industrial ("C&I") segment of the loan and lease portfolio was $259 million at year-end 2010, a decline of approximately $112 million during 2010, in large part reflecting the continued slowdown in business activity and a corresponding reduction in accounts receivable and inventory financings, as well as significantly reduced requests for new equipment financing.

LOANS SECURED BY REAL ESTATE  
($000s)            
  12/31/2010 9/30/2010 6/30/2010 3/31/2010 12/31/2009  
Residential-Related:            
Vacant Land $ 17,201 $ 18,013 $ 20,351 $ 20,871 $ 19,465  
Land Development 28,147 29,735 29,627 32,199 34,027  
Construction 5,621 5,854 6,627 7,872 7,199  
  50,969 53,602 56,605 60,942 60,691  
             
Comm'l Non-Owner Occupied:            
Vacant Land 14,293 15,416 19,812 22,304 25,549  
Land Development 17,807 18,221 18,585 19,058 19,402  
Construction 31,827 39,620 52,295 52,107 65,697  
Commercial Buildings 489,371 509,777 512,816 539,284 537,891  
  553,298 583,034 603,508 632,753 648,539  
             
Comm'l Owner Occupied:            
Construction 672 0 1,360 1,651 1,404  
Commercial Buildings 282,388 298,846 302,768 316,302 324,451  
  283,060 298,846 304,128 317,953 325,855  
             
 Total $ 887,327 $ 935,482 $ 964,241 $ 1,011,648 $ 1,035,085  
             
Note --- Excludes residential mortgage loans representing permanent financing of owner occupied dwellings and home equity lines of credit.  

Mercantile's liquidity continues to improve as local deposits, especially interest-bearing checking and money market deposit accounts, increased in total dollars and as a percentage of total funding. Total deposits were $1.27 billion at December 31, 2010, a decline of $128 million since year-end 2009 and a reduction of $326 million since year-end 2008. By comparison, local deposits increased $294 million over the past 24 months; they now represent 60.0 percent of total deposits compared to 29.4 percent at December 31, 2008. Approximately 80 percent, or $234 million, of local deposit growth since year-end 2008 occurred in the interest-bearing checking and money market deposit account categories, primarily reflecting new and innovative products, various deposit-gathering initiatives, and enhanced advertising campaigns that have attracted new deposits as well as transfers from maturing time deposit accounts.

Wholesale funds were $584 million, or 39.8 percent of total funds, as of December 31, 2010, compared to $1.41 billion, or 71.5 percent of total funds, as of December 31, 2008. The $830 million decline in wholesale funding reflects both the shift toward local deposits as well as a $594 million decline in total loans and leases; this allowed Mercantile to reduce brokered deposits and FHLB advances as they matured over the past 24 months, and to prepay FHLB advances totaling $95.0 million during the fourth quarter of 2010.

Short-term investments, consisting of federal funds sold and interest-bearing bank deposits, averaged $113 million during the fourth quarter of 2010, higher than the normal goal of $50 million due to higher than anticipated loan repayments and a highly successful deposit gathering initiative. Price added, "The steps we've taken over the past two years have significantly reduced our reliance on wholesale funds. Local deposits provide us with a more stable funding base, as well as greater flexibility to adjust funding costs. We have been gratified by the community response to our campaigns." 

Since Mercantile is not in a position to fully utilize tax-exempt income in the near term, the Company sold approximately one-third of its tax-exempt municipal securities portfolio during the first quarter of 2010. Proceeds were reinvested in taxable securities, and all $221 million of securities (taxable and remaining tax-exempt) are now included in the available-for-sale portfolio. In addition to its short-term investments, Mercantile has approximately $163 million of borrowing capacity through various established lines of credit to meet potential funding needs.

Asset Quality

Nonperforming assets ("NPAs") at December 31, 2010 were $86.1 million, or 5.3 percent of total assets, compared to $92.4 million as of September 30, 2010, and $111.7 million as of December 31, 2009 (5.1 percent and 5.9 percent of total assets, respectively). This represents a decline of $6.3 million, or 6.8 percent, from the linked quarter-end and a decline of $25.5 million, or 22.9 percent, from the year-ago quarter-end.

Robert B. Kaminski Jr., Mercantile's Executive Vice President and Chief Operating Officer, added, "We are beginning to see a confluence of positive events that have served to improve our operating results. Additions to nonperforming assets have declined sharply, and we believe this trend is evidence that our borrowers are less affected by the economy and real estate markets than in previous quarters. A more active real estate market is affording us the opportunity to dispose of more properties, double the volume of 2009, although prices still remain relatively low. Even more gratifying, improvement in our borrowers' financial condition and operating performance have allowed us to upgrade many commercial credit relationships, and we are seeing some of our borrowers return to performing status. We have much work ahead of us to return to a standard of credit quality excellence, but all in all, the trends are increasingly positive." 

Nonperforming loans ("NPLs") totaled $69.4 million as of December 31, 2010, down $1.1 million and $15.6 million, respectively, from the linked quarter-end and the year-ago quarter-end, while foreclosed real estate and repossessed assets declined by $5.2 million and $9.9 million, respectively, from the linked and the year-ago quarter-ends. CRE loans represent 53 percent of NPLs, or $37.1 million, although they account for 61 percent of the total loan and lease portfolio. Investor-owned nonperforming CRE loans account for $25.4 million of total CRE nonperforming loans (5.2 percent of $489 million investor-owned CRE loans), while owner-occupied CRE loans account for $11.6 million (4.1 percent of $282 million owner-occupied CRE loans). Given the nature of collateral and the condition of the economy in general, and real estate markets specifically, progress toward resolution has been slow in both CRE categories.

More progress has been achieved this past year toward resolution of nonperforming C&D loans, including both residential and commercial projects. C&D loans currently constitute 9.2 percent of total loans and leases, or $116 million, of which $14.9 million, or 12.9 percent, were nonperforming at December 31, 2010. This represents a substantial improvement since year-end 2009, when $27.9 million, or 16.1 percent, of the $173 million C&D loan portfolio was nonperforming. Nonperforming C&I loans were $8.2 million as of December 31, 2010, a decline of $1.4 million since the prior year-end. Owner-occupied and rental residential NPLs were $9.1 million as of December 31, 2010, up $2.8 million since year-end 2009. 

NONPERFORMING ASSETS
($000s)          
  12/31/2010 9/30/2010 6/30/2010 3/31/2010 12/31/2009
Residential Real Estate:          
Land Development $ 14,547 $ 16,746 $ 21,551 $ 22,781 $ 19,722
Construction 2,333 2,924 10,231 11,425 12,103
Owner Occupied / Rental 9,454 7,251 6,159 5,908 7,493
  26,334 26,921 37,941 40,114 39,318
           
Commercial Real Estate:          
Land Development 2,454 2,277 2,050 3,031 2,971
Construction 0 0 571 1,238 1,268
Owner Occupied  14,740 15,083 16,216 17,311 19,918
Non-Owner Occupied 34,209 41,725 46,706 46,552 38,417
  51,403 59,085 65,543 68,132 62,574
           
Non-Real Estate:          
Commercial Assets 8,221 6,386 7,049 9,303 9,758
Consumer Assets 161 5 0 8 8
  8,382 6,391 7,049 9,311 9,766
           
 Total $ 86,119 $ 92,397 $ 110,533 $ 117,557 $ 111,658
 
 
NONPERFORMING LOANS
($000s)          
  12/31/2010 9/30/2010 6/30/2010 3/31/2010 12/31/2009
           
Past due 90 days or more and accruing interest $ 766 0 24 0 243
Nonaccrual, including troubled debt restructurings 63,915 64,639 81,543 88,450 81,818
Troubled debt restructurings, accruing interest 4,763 5,862 5,946 6,011 2,989
           
 Total $ 69,444 70,501 87,513 94,461 85,050

During the 2010 fourth quarter, Mercantile added $13.6 million of NPAs to its problem asset portfolio and successfully disposed of $13.5 million through a combination of asset sales, principal pay-downs, and returns to performing status. Loan charge-offs were $4.7 million and foreclosed asset valuation write-downs were $1.7 million. In total, nonperforming assets decreased a net $6.3 million from the end of the 2010 third quarter.

Improvement in asset quality is even more apparent on a year-over-year basis. During 2010, Mercantile added $60.7 million of problem assets to its NPA portfolio, successfully disposed of $49.3 million, and charged-off or wrote-down an additional $36.9 million. In total, NPAs declined a net $25.5 million since year-end 2009. By comparison, Mercantile added $113 million of NPAs during the course of 2009, successfully disposed of $27.2 million, and charged-off or wrote-down an additional $31.2 million. In total, NPAs increased a net $54.2 million from year-end 2008. 

NONPERFORMING ASSETS RECONCILIATION
($000s)          
  4Q 2010 3Q 2010 2Q 2010 1Q 2010 4Q 2009
           
Beginning balance $ 92,397 $ 110,533 $ 117,557 $ 111,658 $ 110,765
Additions 13,602 10,905 13,101 23,054 22,308
Returns to performing status (1,019) (7,938) (1,356) (811) 0
Principal payments (7,217) (5,422) (7,332) (4,242) (8,652)
Sale proceeds (5,282) (1,209) (2,398) (5,080) (3,353)
Loan charge-offs (4,650) (12,829) (8,176) (6,117) (7,862)
Valuation write-downs (1,712) (1,643) (863) (905) (1,548)
           
 Total $ 86,119 $ 92,397 $ 110,533 $ 117,557 $ 111,658

Net loan and lease charge-offs were $5.3 million during the fourth quarter of 2010, or an annualized 1.6 percent of average loans and leases, compared with $14.3 million (4.1 percent annualized) and $10.9 million (2.7 percent annualized) for the linked and prior-year quarters, respectively. For 2010, net loan and lease charge-offs totaled $34.3 million compared to $38.2 million for the previous year. In the 2010 fourth quarter, Mercantile charged-off $2.7 million of specific reserves that were created through provision expense in prior periods. 

NET LOAN CHARGE-OFFS
($000s)          
  4Q 2010 3Q 2010 2Q 2010 1Q 2010 4Q 2009
Residential Real Estate:          
Land Development $ 312 $ 2,115 $ 1,254 $ 565 $ 2,204
Construction 173 93 649 587 733
Owner Occupied / Rental 120 1,212 407 326 946
  605 3,420 2,310 1,478 3,883
           
Commercial Real Estate:          
Land Development 219 360 674 617 45
Construction 0 0 660 0 0
Owner Occupied  976 2,159 726 1,091 1,140
Non-Owner Occupied 2,642 6,805 2,551 1,945 3,009
  3,837 9,324 4,611 3,653 4,194
           
Non-Real Estate:          
Commercial Assets 819 1,517 1,670 1,012 2,788
Consumer Assets 47 1 (3) 9 (1)
  866 1,518 1,667 1,021 2,787
           
 Total $ 5,308 $ 14,262 $ 8,588 $ 6,152 $ 10,864

Capital Position

Shareholders' equity totaled $126 million as of December 31, 2010, a decrease of $14.2 million, or 10.1 percent, from December 31, 2009; however, regulatory capital ratios continue to improve. The Bank remains "well-capitalized" with a total risk-based capital ratio of 12.5 percent as of December 31, 2010 compared to 11.1 percent at December 31, 2009. At December 31, 2010, the Bank had approximately $34.6 million in excess of the 10.0 percent minimum regulatory threshold required to be considered a "well-capitalized" institution. Mercantile's total shares outstanding at year-end 2010 were 8,597,993.

In conclusion, Mr. Price added, "We have been significantly challenged by the impact of this severe recession over the past several years. From the beginning, we have endeavored to be proactive yet customer-sensitive in administering our loan portfolio. Bottom line, this is a partnership where both parties achieve more through cooperation, and this approach has worked well. We have also endeavored to serve our shareholders in the same spirit of cooperation; in this case, we've made every effort to respect their need for greater transparency, both in terms of high quality financial information and access to our collective strategic insights. We hope we have succeeded on both counts. Our excellent staff -- their dedication, resilience and perseverance -- has made it possible to weather this recession and remain well-capitalized."

About Mercantile Bank Corporation

Based in Grand Rapids, Michigan, Mercantile Bank Corporation is the bank holding company for Mercantile Bank of Michigan. Founded in 1997 to provide banking services to businesses, individuals, and governmental units, the Bank differentiates itself on the basis of service quality and the expertise of its banking staff. Mercantile has seven full-service banking offices in Grand Rapids, Holland and Lansing, Michigan. 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 comments or information that constitute forward-looking statements (within the meaning of the Private Securities Litigation Reform Act of 1995) that 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; changes in tax laws; changes in prices, levies, and assessments; the impact of technological advances; 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; 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.

               
Mercantile Bank Corporation              
Fourth Quarter 2010 Results              
MERCANTILE BANK CORPORATION
CONSOLIDATED FINANCIAL HIGHLIGHTS
(Unaudited)
               
  Quarterly Year-To-Date
  2010 2010 2010 2010 2009    
(dollars in thousands except per share data) 4th Qtr 3rd Qtr 2nd Qtr 1st Qtr 4th Qtr 2010 2009
               
EARNINGS              
Net interest income $ 13,687 13,935 14,421 14,306 13,511 56,349 51,333
Provision for loan and lease losses $ 6,800 10,400 6,200 8,400 25,300 31,800 59,000
Noninterest income $ 2,304 2,289 1,996 2,655 1,953 9,244 7,558
Noninterest expense $ 12,181 11,899 11,442 11,634 10,835 47,156 46,488
Net income (loss) before federal income tax expense (benefit) $ (2,990) (6,075) (1,225) (3,073) (20,671) (13,363) (46,597)
Net income (loss) $ (4,953) (5,357) (363) (2,643) (36,087) (13,316) (52,087)
Net income (loss) common shares $ (5,282) (5,682) (684) (2,963) (36,406) (14,611) (52,889)
Basic earnings (loss) per share $ (0.62) (0.67) (0.08) (0.35) (4.28) (1.72) (6.23)
Diluted earnings (loss) per share $ (0.62) (0.67) (0.08) (0.35) (4.28) (1.72) (6.23)
Average basic shares outstanding 8,516,202 8,507,174 8,505,086 8,501,671 8,496,555 8,507,572 8,489,679
Average diluted shares outstanding 8,516,202 8,507,174 8,505,086 8,501,671 8,496,555 8,507,572 8,489,679
               
PERFORMANCE RATIOS              
Return on average assets (1.21%) (1.27%) (0.15%) (0.63%) (7.28%) (0.80%) (2.51%)
Return on average common equity (15.83%) (16.14%) (1.98%) (8.62%) (81.98%) (10.62%) (29.91%)
Net interest margin (fully tax-equivalent) 3.36% 3.33% 3.31% 3.25% 2.93% 3.31% 2.62%
Efficiency ratio 76.17% 73.34% 69.69% 68.59% 70.07% 71.89% 78.94%
Full-time equivalent employees 242 250 248 251 257 242 257
               
CAPITAL              
Period-ending equity to assets 7.71% 7.43% 7.71% 7.26% 7.35% 7.71% 7.35%
Tier 1 leverage capital ratio 9.09% 9.15% 9.02% 8.77% 8.64% 9.09% 8.64%
Tier 1 risk-based capital ratio 11.17% 10.77% 10.65% 10.02% 9.92% 11.17% 9.92%
Total risk-based capital ratio 12.45% 12.04% 11.92% 11.29% 11.18% 12.45% 11.18%
Book value per common share $ 12.20 13.23 13.74 13.64 13.86 12.20 13.86
Cash dividend per common share $ 0.00 0.00 0.00 0.01 0.01 0.01 0.07
               
ASSET QUALITY              
Gross loan charge-offs $ 5,892 14,499 9,891 6,846 11,225 37,128 39,621
Net loan charge-offs $ 5,308 14,262 8,588 6,152 10,864 34,310 38,230
Net loan charge-offs to average loans 1.63% 4.11% 2.35% 1.64% 2.72% 2.43% 2.24%
Allowance for loan and lease losses $ 45,368 43,876 47,738 50,126 47,878 45,368 47,878
Allowance for losses to total loans 3.59% 3.30% 3.38% 3.35% 3.11% 3.59% 3.11%
Nonperforming loans $ 69,444 70,501 87,513 94,461 85,050 69,444 85,050
Other real estate and repossessed assets $ 16,675 21,896 23,020 23,096 26,608 16,675 26,608
Nonperforming assets to total assets 5.28% 5.10% 6.13% 6.18% 5.86% 5.28% 5.86%
               
END OF PERIOD BALANCES              
Loans and leases $ 1,262,630 1,329,156 1,410,710 1,497,624 1,539,818 1,262,630 1,539,818
Total earning assets (before allowance) $ 1,555,329 1,715,322 1,706,870 1,810,081 1,800,041 1,555,329 1,800,041
Total assets $ 1,632,421 1,813,383 1,804,062 1,902,923 1,906,208 1,632,421 1,906,208
Deposits $ 1,273,832 1,351,864 1,340,160 1,420,209 1,401,627 1,273,832 1,401,627
Shareholders' equity $ 125,936 134,734 139,043 138,220 140,104 125,936 140,104
               
AVERAGE BALANCES              
Loans and leases $ 1,292,289 1,378,248 1,465,631 1,516,898 1,585,523 1,412,555 1,704,335
Total earning assets (before allowance) $ 1,636,471 1,680,362 1,770,391 1,823,828 1,874,752 1,727,120 2,002,979
Total assets $ 1,728,375 1,774,671 1,862,526 1,920,751 1,983,111 1,820,925 2,105,673
Deposits $ 1,339,149 1,313,902 1,390,397 1,433,091 1,421,850 1,368,726 1,526,105
Shareholders' equity $ 132,409 139,629 138,907 139,485 176,196 137,594 176,820
         
         
Mercantile Bank Corporation        
Fourth Quarter 2010 Results        
MERCANTILE BANK CORPORATION
CONSOLIDATED REPORTS OF INCOME
         
  THREE MONTHS ENDED THREE MONTHS ENDED TWELVE MONTHS ENDED TWELVE MONTHS ENDED
  December 31, 2010 December 31, 2009 December 31, 2010 December 31, 2009
  (Unaudited) (Unaudited) (Unaudited) (Unaudited)
         
Interest income        
Loans and leases, including fees  $ 18,035,000  $ 21,453,000  $ 77,791,000  $ 93,903,000
Investment securities 2,413,000 2,644,000 10,137,000 10,849,000
Federal funds sold 66,000 28,000 176,000 136,000
Short-term investments 9,000 4,000 39,000 21,000
Total interest income 20,523,000 24,129,000 88,143,000 104,909,000
         
Interest expense        
Deposits 5,403,000 7,850,000 23,529,000 41,269,000
Short-term borrowings 319,000 460,000 1,410,000 1,845,000
Federal Home Loan Bank advances 795,000 1,948,000 5,509,000 8,808,000
Other borrowed money 319,000 360,000 1,346,000 1,654,000
Total interest expense 6,836,000 10,618,000 31,794,000 53,576,000
         
Net interest income 13,687,000 13,511,000 56,349,000 51,333,000
         
Provision for loan and lease losses 6,800,000 25,300,000 31,800,000 59,000,000
         
Net interest income after provision for loan and lease losses 6,887,000 (11,789,000) 24,549,000 (7,667,000)
         
Noninterest income        
Service charges on accounts 432,000 523,000 1,797,000 2,023,000
Gain on sale of commercial loans 0 0 324,000 0
Net gain on sale of investment securities 0 0 476,000 0
Other income 1,872,000 1,430,000 6,647,000 5,535,000
Total noninterest income 2,304,000 1,953,000 9,244,000 7,558,000
         
Noninterest expense        
Salaries and benefits 4,423,000 4,734,000 18,297,000 20,331,000
Occupancy 669,000 718,000 2,838,000 3,377,000
Furniture and equipment 318,000 452,000 1,481,000 1,871,000
Nonperforming asset costs 2,999,000 2,289,000 10,858,000 7,294,000
FDIC insurance costs 920,000 1,202,000 4,370,000 4,852,000
Branch consolidation costs 0 0 0 1,308,000
Other expense 2,852,000 1,440,000 9,312,000 7,455,000
Total noninterest expense 12,181,000 10,835,000 47,156,000 46,488,000
         
Income (loss) before federal income tax expense (benefit) (2,990,000) (20,671,000) (13,363,000) (46,597,000)
         
Federal income tax expense (benefit) 1,963,000 15,416,000 (47,000) 5,490,000
         
Net income (loss) (4,953,000) (36,087,000) (13,316,000) (52,087,000)
         
Preferred stock dividends and accretion 329,000 319,000 1,295,000 802,000
         
Net income (loss) attributable to common shares  $ (5,282,000)  $ (36,406,000)  $ (14,611,000)  $ (52,889,000)
         
Basic earnings (loss) per share ($0.62) ($4.28) ($1.72) ($6.23)
Diluted earnings (loss) per share ($0.62) ($4.28) ($1.72) ($6.23)
         
Average basic shares outstanding 8,516,202 8,496,555 8,507,572 8,489,679
Average diluted shares outstanding 8,516,202 8,496,555 8,507,572 8,489,679
       
       
Mercantile Bank Corporation      
Fourth Quarter 2010 Results      
MERCANTILE BANK CORPORATION
CONSOLIDATED BALANCE SHEETS
       
  DECEMBER 31, DECEMBER 31, DECEMBER 31,
  2010 2009 2008
  (Unaudited) (Audited) (Audited)
ASSETS      
Cash and due from banks  $ 6,674,000  $ 18,896,000  $ 16,754,000
Short-term investments 9,600,000 1,471,000 100,000
Federal funds sold 47,924,000 1,368,000 8,950,000
Total cash and cash equivalents 64,198,000 21,735,000 25,804,000
       
Securities available for sale 220,830,000 182,491,000 162,669,000
Securities held to maturity 0 59,212,000 64,437,000
Federal Home Loan Bank stock 14,345,000 15,681,000 15,681,000
       
Loans and leases 1,262,630,000 1,539,818,000 1,856,915,000
Allowance for loan and lease losses (45,368,000) (47,878,000) (27,108,000)
Loans and leases, net 1,217,262,000 1,491,940,000 1,829,807,000
       
Premises and equipment, net 27,873,000 29,684,000 32,334,000
Bank owned life insurance 46,743,000 45,024,000 42,462,000
Accrued interest receivable 5,942,000 7,088,000 8,513,000
Other real estate owned and repossessed assets 16,675,000 26,608,000 8,118,000
Other assets 18,553,000 26,745,000 18,185,000
       
Total assets  $ 1,632,421,000  $ 1,906,208,000  $ 2,208,010,000
       
       
LIABILITIES AND SHAREHOLDERS' EQUITY      
Deposits:      
Noninterest-bearing  $ 112,944,000  $ 121,157,000  $ 110,712,000
Interest-bearing 1,160,888,000 1,280,470,000 1,488,863,000
Total deposits 1,273,832,000 1,401,627,000 1,599,575,000
       
Securities sold under agreements to repurchase 116,979,000 99,755,000 94,413,000
Federal funds purchased 0 2,600,000 0
Federal Home Loan Bank advances 65,000,000 205,000,000 270,000,000
Subordinated debentures 32,990,000 32,990,000 32,990,000
Other borrowed money 11,804,000 16,890,000 19,528,000
Accrued interest and other liabilities 5,880,000 7,242,000 17,132,000
Total liabilities 1,506,485,000 1,766,104,000 2,033,638,000
       
SHAREHOLDERS' EQUITY      
Preferred stock, net of discount 20,077,000 19,839,000 0
Common stock 173,815,000 173,576,000 172,353,000
Retained earnings (deficit) (68,781,000) (54,170,000) (1,281,000)
Accumulated other comprehensive income (loss) 825,000 859,000 3,300,000
Total shareholders' equity 125,936,000 140,104,000 174,372,000
       
Total liabilities and shareholders' equity  $ 1,632,421,000  $ 1,906,208,000  $ 2,208,010,000
CONTACT: Mercantile Bank Corporation
         Michael Price
         Chairman & CEO
         616-726-1600
         mprice@mercbank.com
         
         Charles Christmas
         Chief Financial Officer
         616-726-1202
         cchristmas@mercbank.com

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Data: Latest rates in the US

Home equity rates View rates in your area
Home equity type Today +/- Chart
$30K HELOC FICO 4.71%
$30K home equity loan FICO 5.26%
$75K home equity loan FICO 4.70%
Credit card rates View more rates
Card type Today +/- Last Week
Low Interest Cards 13.42%
13.42%
Cash Back Cards 17.94%
17.94%
Rewards Cards 17.15%
17.14%
Source: Bankrate.com