Attached files
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| 8-K - FORM 8-K - MERCANTILE BANK CORP | mbwm20161017_8k.htm |
Exhibit 99.1
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Mercantile Bank Corporation Reports Strong Third Quarter 2016 Results
Earnings per share growth and solid level of commercial term loan originations highlight quarter
GRAND RAPIDS, Mich., October 18, 2016 – Mercantile Bank Corporation (NASDAQ: MBWM) ("Mercantile") reported net income of $7.8 million, or $0.48 per diluted share, for the third quarter of 2016, compared with net income of $7.3 million, or $0.45 per diluted share, for the respective prior-year period. Net income during the first nine months of 2016 totaled $23.8 million, or $1.46 per diluted share, compared to $20.5 million, or $1.23 per diluted share, during the first nine months of 2015.
The third quarter was highlighted by:
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Robust earnings performance and strong capital position | |
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Solid net interest margin | |
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Strong asset quality, as reflected by low levels of nonperforming assets and loans in the 30- to 89-days delinquent category | |
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New commercial term loan originations of approximately $131 million | |
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Sustained strength in commercial loan pipeline |
“We are pleased to report another quarter of strong operating results, continuing the momentum generated during the first half of 2016,” said Michael Price, Chairman, President and Chief Executive Officer of Mercantile. “Our sound balance sheet and robust earnings performance have allowed us to take advantage of growth opportunities in our markets and have positioned us to meet future growth goals as well. We are confident our year-to-date performance trends will continue through the fourth quarter, setting us up for a strong finish to 2016.”
Operating Results
Total revenue, which consists of net interest income and noninterest income, was $31.7 million during the third quarter of 2016, up $1.8 million or 6.1 percent from the prior-year third quarter. Net interest income during the third quarter of 2016 was $26.5 million, up $0.8 million or 3.2 percent from the third quarter of 2015, primarily reflecting an increase in earning assets.
The net interest margin was 3.76 percent in the third quarter of 2016, down from 3.87 percent in the prior-year third quarter mainly due to a decreased yield on loans, reflecting the ongoing low interest rate environment and competitive industry pressures. The negative impact of the lower loan yield was partially offset by an increased yield on securities, resulting mainly from a significant level of accelerated discount accretion on called U.S. Government agency bonds, which was recorded as interest income. The accelerated discount accretion totaled $0.4 million during the third quarter of 2016 and $2.2 million during the first nine months of 2016, positively impacting the net interest margin by six basis points and ten basis points in the respective periods. No accelerated discount accretion was recorded during the third quarter of 2015, and only a nominal level was recorded during the first nine months of 2015.
The net interest margin has been relatively stable over the past nine quarters, ranging from 3.76 percent to 4.01 percent. Mercantile’s yield on loans has generally declined during this time period, consistent with the industry and primarily due to the ongoing low interest rate environment and competitive industry pressures. In Mercantile’s case, however, the negative impact of the lower loan yield has been largely offset by assets shifting out of the lower-yielding securities portfolio and into the higher-yielding loan portfolio.
Net interest income and the net interest margin during the third quarter of 2016 and the prior-year third quarter were affected by purchase accounting accretion and amortization entries associated with the fair value measurements recorded effective June 1, 2014. An increase in interest income on loans totaling $1.0 million and an increase in interest expense on subordinated debentures totaling $0.2 million were recorded during the third quarter of 2016. An increase in interest income on loans totaling $1.4 million and a decrease in interest expense on deposits totaling $0.2 million were recorded during the third quarter of 2015. In addition, an increase in interest expense on subordinated debentures totaling $0.2 million was recorded during the same time period. Mercantile expects to continue to record adjustments in interest income on loans and interest expense on subordinated debentures in future periods; however, the adjustments to interest expense on deposits and FHLB advances ended in July and June of 2015, respectively. The resulting increase in interest expense negatively impacted the net interest margin by approximately eight to ten basis points after July 31, 2015.
Mercantile recorded a $0.6 million provision for loan losses during the third quarter of 2016 compared to a negative $0.5 million provision during the respective 2015 period. The provision expense recorded during the third quarter of 2016 primarily reflects ongoing loan growth, while the negative provision recorded during the prior-year third quarter resulted from multiple factors, including recoveries of previously charged-off loans, reversals of specific reserves, a reduced level of loan-rating downgrades and ongoing loan-rating upgrades.
Noninterest income during the third quarter of 2016 was $5.3 million, up $1.0 million or 23.5 percent from the $4.3 million in noninterest income recorded during the third quarter of 2015. The increase in noninterest income mainly resulted from higher levels of service charges on accounts, in large part reflecting an ongoing project to ensure all depositors are in a product that best meets their needs and is priced appropriately as well as increased cash management fee income, and mortgage banking income, primarily reflecting the positive impact of recently-implemented strategic initiatives, including the hiring of additional loan originators, introduction of new and enhanced products, loan programs, and increased marketing efforts.
Noninterest expense totaled $19.7 million during both the third quarter of 2016 and the respective 2015 quarter. Salary and benefit costs totaled $11.2 million during the current-year third quarter, up $0.4 million or 3.9 percent from the prior-year third quarter primarily due to increased health insurance and stock-based compensation expenses. Nonperforming asset costs during the third quarter of 2016 were $0.2 million lower than the amount expensed during the respective 2015 period.
Mr. Price continued: “Our net interest margin remains strong and relatively stable, reflecting our focus on loan pricing discipline and sound asset quality, and our balance sheet structure continues to position our net interest income to benefit from any further interest rate hikes initiated by the Federal Open Market Committee. We are pleased that recently implemented strategic initiatives, including the cost efficiency program, deposit account service charge review project, and revamping of mortgage banking activities, have positively impacted 2016 operating results in line with our expectations.”
Balance Sheet
As of September 30, 2016, total assets were $3.06 billion, up $160 million or 5.5 percent from December 31, 2015; total loans increased $129 million, or 5.6 percent, to $2.41 billion over the same time period, representing an annualized growth rate of approximately 8 percent. During the twelve months ended September 30, 2016, total loans were up $189 million or about 9 percent. Approximately $131 million in commercial term loans to new and existing borrowers were originated during the third quarter of 2016, as ongoing sales and relationship building efforts resulted in increased lending opportunities. As of September 30, 2016, unfunded commitments on commercial construction and development loans totaled approximately $113 million, which are expected to be largely funded over the next twelve months.
Robert B. Kaminski, Jr., Executive Vice President and Chief Operating Officer of Mercantile, noted: “As expected, new commercial term loan originations remained strong during the third quarter of 2016, and based on our current loan pipeline, we are confident that the fourth quarter will reflect solid loan growth. Although competitive pressures in our markets remain, our lending staff and other sales teams have emphasized our relationship -focused approach to banking and continued to develop new customer relationships. While we remain pleased with the level of commercial term loan originations, we are also pleased to report increased mortgage banking activity during the quarter stemming from recently implemented strategic initiatives concentrated on increasing our market presence.”
Commercial-related real estate loans continue to comprise a majority of Mercantile’s loan portfolio, representing about 56 percent of total loans as of September 30, 2016. Non-owner occupied commercial real estate (“CRE”) loans and owner-occupied CRE loans equaled approximately 31 percent and 18 percent of total loans, respectively, as of September 30, 2016. Commercial and industrial loans represented approximately 31 percent of total loans as of September 30, 2016.
As of September 30, 2016, total deposits were $2.33 billion, up $54.1 million from December 31, 2015, and $75.3 million from September 30, 2015. Local deposits were up $84.0 million since year-end 2015 and $106 million over the past twelve months; growth in local deposits was primarily driven by new commercial loan relationships. Wholesale funds were $269 million, or approximately 10 percent of total funds, as of September 30, 2016, compared to $189 million, or approximately 8 percent of total funds, as of December 31, 2015, and $190 million, or approximately 8 percent of total funds, as of September 30, 2015.
Asset Quality
Nonperforming assets at September 30, 2016 were $5.5 million, compared to $6.0 million as of June 30, 2016, and $6.7 million as of December 31, 2015; at each period-end, nonperforming assets represented 0.2% of total assets. The level of past due loans remains nominal, and the number and aggregate dollar amount of loan relationships on the internal watch list continue to decline. Net loan charge-offs were $0.2 million during the third quarter of 2016 and $0.3 million in the linked quarter, compared to net loan recoveries of $0.1 million in the prior-year third quarter.
Capital Position
Shareholders’ equity totaled $349 million as of September 30, 2016, an increase of $15.7 million from year-end 2015. The Bank’s capital position remains above “well-capitalized” with a total risk-based capital ratio of 13.1 percent as of September 30, 2016, compared to 13.5 percent at December 31, 2015. At September 30, 2016, the Bank had approximately $84 million in excess of the 10.0 percent minimum regulatory threshold required to be considered a “well-capitalized” institution. Mercantile reported 16,296,658 total shares outstanding at September 30, 2016.
As part of a $20 million common stock repurchase program announced in January of 2015, Mercantile repurchased approximately 168,000 shares for $3.7 million, or a weighted average all-in cost per share of $22.23, during the first nine months of 2016; since the program’s inception, Mercantile has repurchased approximately 956,000 shares, or nearly 6 percent of total shares outstanding at year-end 2014, for $19.5 million, or a weighted average all-in cost per share of $20.38. No shares were repurchased during the third quarter of 2016. Future share repurchases totaling $15.5 million can be made under the program, which was expanded by $15 million earlier this year.
Although Mercantile has experienced solid loan growth, paid regular quarterly cash dividends equating to about 33 percent of net income, and repurchased approximately 956,000 shares for $19.5 million as part of the previously mentioned common stock repurchase program, it continues to operate with a significant level of excess regulatory capital, negatively impacting return on average equity. Therefore, in addition to declaring a regular fourth quarter cash dividend of $0.17 per common share, Mercantile’s Board of Directors also authorized the payment of a special cash dividend of $0.50 per common share. Both the fourth quarter cash dividend and the special cash dividend are payable on December 21, 2016 to shareholders of record as of December 9, 2016. Mercantile will rely on a cash dividend from the Bank to fund the special dividend. Assuming the Bank paid the dividend to Mercantile on September 30, 2016, its pro forma total risk-based capital ratio as of that date was 12.8 percent compared to its actual ratio of 13.1 percent, and its total capital in excess of the 10.0 percent minimum regulatory threshold required to be considered a “well-capitalized” institution was approximately $76 million compared to the actual excess amount of $84 million.
Mr. Price concluded: “We are pleased to increase shareholder value through the payment of regular quarterly cash dividends resulting in competitive yields and to add the special cash dividend to be paid in the fourth quarter of 2016. As reflected by loan and deposit growth and revenue enhancement, our ongoing efforts to identify and foster new customer relationships and efficiently deliver an extensive array of products and services have been very successful. We are excited about Mercantile’s future and expect the strong operating results achieved during the first nine months of 2016 to extend through the remainder of the year.”
About Mercantile Bank Corporation
Based in Grand Rapids, Michigan, Mercantile Bank Corporation is the bank holding company for Mercantile Bank of Michigan. Mercantile provides banking services to businesses, individuals and governmental units, and differentiates itself on the basis of service quality and the expertise of its banking staff. Mercantile has assets of approximately $3.1 billion and operates 48 banking offices serving communities in central and western 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.
FOR FURTHER INFORMATION:
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Michael Price |
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Charles Christmas |
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Chairman, President & CEO |
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Executive Vice President & CFO |
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616-726-1600 |
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616-726-1202 |
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mprice@mercbank.com |
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cchristmas@mercbank.com |
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Mercantile Bank Corporation
Third Quarter 2016 Results
MERCANTILE BANK CORPORATION
CONSOLIDATED BALANCE SHEETS
(Unaudited)
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SEPTEMBER 30, |
DECEMBER 31, |
SEPTEMBER 30, |
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2016 |
2015 |
2015 |
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ASSETS |
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Cash and due from banks |
$ | 55,882,000 | $ | 42,829,000 | $ | 43,743,000 | ||||||
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Interest-earning deposits |
85,848,000 | 46,463,000 | 49,952,000 | |||||||||
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Federal funds sold |
0 | 599,000 | 10,154,000 | |||||||||
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Total cash and cash equivalents |
141,730,000 | 89,891,000 | 103,849,000 | |||||||||
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Securities available for sale |
325,443,000 | 346,992,000 | 367,173,000 | |||||||||
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Federal Home Loan Bank stock |
8,026,000 | 7,567,000 | 7,567,000 | |||||||||
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Loans |
2,406,377,000 | 2,277,727,000 | 2,217,388,000 | |||||||||
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Allowance for loan losses |
(17,526,000 | ) | (15,681,000 | ) | (16,119,000 | ) | ||||||
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Loans, net |
2,388,851,000 | 2,262,046,000 | 2,201,269,000 | |||||||||
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Premises and equipment, net |
45,212,000 | 46,862,000 | 47,509,000 | |||||||||
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Bank owned life insurance |
66,876,000 | 58,971,000 | 58,680,000 | |||||||||
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Goodwill |
49,473,000 | 49,473,000 | 49,473,000 | |||||||||
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Core deposit intangible |
10,592,000 | 12,631,000 | 13,346,000 | |||||||||
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Other assets |
27,761,000 | 29,123,000 | 32,511,000 | |||||||||
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Total assets |
$ | 3,063,964,000 | $ | 2,903,556,000 | $ | 2,881,377,000 | ||||||
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LIABILITIES AND SHAREHOLDERS' EQUITY |
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Deposits: |
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Noninterest-bearing |
$ | 731,663,000 | $ | 674,568,000 | $ | 619,125,000 | ||||||
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Interest-bearing |
1,597,774,000 | 1,600,814,000 | 1,635,004,000 | |||||||||
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Total deposits |
2,329,437,000 | 2,275,382,000 | 2,254,129,000 | |||||||||
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Securities sold under agreements to repurchase |
146,843,000 | 154,771,000 | 158,149,000 | |||||||||
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Federal Home Loan Bank advances |
178,000,000 | 68,000,000 | 68,000,000 | |||||||||
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Subordinated debentures |
44,665,000 | 55,154,000 | 54,983,000 | |||||||||
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Accrued interest and other liabilities |
15,548,000 | 16,445,000 | 17,296,000 | |||||||||
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Total liabilities |
2,714,493,000 | 2,569,752,000 | 2,552,557,000 | |||||||||
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SHAREHOLDERS' EQUITY |
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Common stock |
304,027,000 | 304,819,000 | 304,378,000 | |||||||||
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Retained earnings |
43,655,000 | 27,722,000 | 23,673,000 | |||||||||
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Accumulated other comprehensive income |
1,789,000 | 1,263,000 | 769,000 | |||||||||
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Total shareholders' equity |
349,471,000 | 333,804,000 | 328,820,000 | |||||||||
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Total liabilities and shareholders' equity |
$ | 3,063,964,000 | $ | 2,903,556,000 | $ | 2,881,377,000 | ||||||
Mercantile Bank Corporation
Third Quarter 2016 Results
MERCANTILE BANK CORPORATION
CONSOLIDATED REPORTS OF INCOME
(Unaudited)
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THREE MONTHS ENDED |
THREE MONTHS ENDED |
NINE MONTHS ENDED |
NINE MONTHS ENDED |
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September 30, 2016 |
September 30, 2015 |
September 30, 2016 |
September 30, 2015 |
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INTEREST INCOME |
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Loans, including fees |
$ | 27,553,000 | $ | 26,565,000 | $ | 81,219,000 | $ | 77,463,000 | ||||||||
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Investment securities |
2,033,000 | 1,894,000 | 7,283,000 | 6,128,000 | ||||||||||||
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Other interest-earning assets |
120,000 | 42,000 | 240,000 | 161,000 | ||||||||||||
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Total interest income |
29,706,000 | 28,501,000 | 88,742,000 | 83,752,000 | ||||||||||||
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INTEREST EXPENSE |
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Deposits |
1,924,000 | 1,969,000 | 5,608,000 | 5,642,000 | ||||||||||||
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Short-term borrowings |
62,000 | 39,000 | 154,000 | 116,000 | ||||||||||||
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Federal Home Loan Bank advances |
670,000 | 203,000 | 1,595,000 | 506,000 | ||||||||||||
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Other borrowed money |
600,000 | 665,000 | 1,952,000 | 1,973,000 | ||||||||||||
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Total interest expense |
3,256,000 | 2,876,000 | 9,309,000 | 8,237,000 | ||||||||||||
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Net interest income |
26,450,000 | 25,625,000 | 79,433,000 | 75,515,000 | ||||||||||||
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Provision for loan losses |
600,000 | (500,000 | ) | 2,300,000 | (1,500,000 | ) | ||||||||||
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Net interest income after provision for loan losses |
25,850,000 | 26,125,000 | 77,133,000 | 77,015,000 | ||||||||||||
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NONINTEREST INCOME |
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Service charges on accounts |
1,140,000 | 862,000 | 3,178,000 | 2,444,000 | ||||||||||||
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Credit and debit card income |
1,090,000 | 1,005,000 | 3,185,000 | 3,296,000 | ||||||||||||
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Mortgage banking income |
1,236,000 | 1,073,000 | 2,578,000 | 2,784,000 | ||||||||||||
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Earnings on bank owned life insurance |
349,000 | 272,000 | 933,000 | 820,000 | ||||||||||||
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Other income |
1,469,000 | 1,065,000 | 6,560,000 | 2,648,000 | ||||||||||||
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Total noninterest income |
5,284,000 | 4,277,000 | 16,434,000 | 11,992,000 | ||||||||||||
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NONINTEREST EXPENSE |
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Salaries and benefits |
11,162,000 | 10,745,000 | 32,959,000 | 31,903,000 | ||||||||||||
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Occupancy |
1,515,000 | 1,526,000 | 4,600,000 | 4,578,000 | ||||||||||||
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Furniture and equipment |
531,000 | 569,000 | 1,579,000 | 1,788,000 | ||||||||||||
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Data processing costs |
1,987,000 | 1,958,000 | 5,949,000 | 5,599,000 | ||||||||||||
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FDIC insurance costs |
351,000 | 355,000 | 1,108,000 | 1,315,000 | ||||||||||||
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Other expense |
4,117,000 | 4,540,000 | 12,530,000 | 14,101,000 | ||||||||||||
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Total noninterest expense |
19,663,000 | 19,693,000 | 58,725,000 | 59,284,000 | ||||||||||||
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Income before federal income tax expense |
11,471,000 | 10,709,000 | 34,842,000 | 29,723,000 | ||||||||||||
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Federal income tax expense |
3,626,000 | 3,373,000 | 11,014,000 | 9,183,000 | ||||||||||||
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Net Income |
$ | 7,845,000 | $ | 7,336,000 | $ | 23,828,000 | $ | 20,540,000 | ||||||||
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Basic earnings per share |
$ | 0.48 | $ | 0.45 | $ | 1.46 | $ | 1.23 | ||||||||
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Diluted earnings per share |
$ | 0.48 | $ | 0.45 | $ | 1.46 | $ | 1.23 | ||||||||
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Average basic shares outstanding |
16,282,804 | 16,425,933 | 16,271,848 | 16,708,444 | ||||||||||||
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Average diluted shares outstanding |
16,307,350 | 16,461,794 | 16,294,093 | 16,743,625 | ||||||||||||
Mercantile Bank Corporation
Third Quarter 2016 Results
MERCANTILE BANK CORPORATION
CONSOLIDATED FINANCIAL HIGHLIGHTS
(Unaudited)
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Quarterly |
Year-To-Date |
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(dollars in thousands except per share data) |
2016 |
2016 |
2016 |
2015 |
2015 |
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3rd Qtr |
2nd Qtr |
1st Qtr |
4th Qtr |
3rd Qtr |
2016 |
2015 |
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EARNINGS |
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Net interest income |
$ | 26,450 | 27,100 | 25,882 | 25,659 | 25,625 | 79,433 | 75,515 | ||||||||||||||||||||
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Provision for loan losses |
$ | 600 | 1,100 | 600 | 500 | (500 | ) | 2,300 | (1,500 | ) | ||||||||||||||||||
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Noninterest income |
$ | 5,284 | 4,064 | 7,086 | 4,046 | 4,277 | 16,434 | 11,992 | ||||||||||||||||||||
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Noninterest expense |
$ | 19,663 | 19,193 | 19,868 | 20,097 | 19,693 | 58,725 | 59,284 | ||||||||||||||||||||
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Net income before federal income tax expense |
$ | 11,471 | 10,871 | 12,500 | 9,108 | 10,709 | 34,842 | 29,723 | ||||||||||||||||||||
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Net income |
$ | 7,845 | 7,434 | 8,549 | 6,480 | 7,336 | 23,828 | 20,540 | ||||||||||||||||||||
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Basic earnings per share |
$ | 0.48 | 0.46 | 0.52 | 0.40 | 0.45 | 1.46 | 1.23 | ||||||||||||||||||||
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Diluted earnings per share |
$ | 0.48 | 0.46 | 0.52 | 0.40 | 0.45 | 1.46 | 1.23 | ||||||||||||||||||||
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Average basic shares outstanding |
16,282,804 | 16,240,966 | 16,291,654 | 16,314,953 | 16,425,933 | 16,271,848 | 16,708,444 | |||||||||||||||||||||
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Average diluted shares outstanding |
16,307,350 | 16,268,839 | 16,325,475 | 16,352,187 | 16,461,794 | 16,294,093 | 16,743,625 | |||||||||||||||||||||
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PERFORMANCE RATIOS |
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Return on average assets |
1.02 | % | 1.01 | % | 1.19 | % | 0.88 | % | 1.01 | % | 1.07 | % | 0.96 | % | ||||||||||||||
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Return on average equity |
9.00 | % | 8.79 | % | 10.18 | % | 7.79 | % | 8.86 | % | 9.32 | % | 8.33 | % | ||||||||||||||
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Net interest margin (fully tax-equivalent) |
3.76 | % | 4.01 | % | 3.92 | % | 3.81 | % | 3.87 | % | 3.89 | % | 3.84 | % | ||||||||||||||
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Efficiency ratio |
61.96 | % | 61.59 | % | 60.26 | % | 67.66 | % | 65.86 | % | 61.26 | % | 67.75 | % | ||||||||||||||
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Full-time equivalent employees |
612 | 633 | 612 | 639 | 640 | 612 | 640 | |||||||||||||||||||||
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YIELD ON ASSETS / COST OF FUNDS |
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Yield on loans |
4.57 | % | 4.60 | % | 4.72 | % | 4.71 | % | 4.79 | % | 4.63 | % | 4.80 | % | ||||||||||||||
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Yield on securities |
2.71 | % | 3.99 | % | 2.52 | % | 2.21 | % | 2.16 | % | 3.07 | % | 2.16 | % | ||||||||||||||
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Yield on other interest-earning assets |
0.51 | % | 0.51 | % | 0.54 | % | 0.25 | % | 0.25 | % | 0.52 | % | 0.25 | % | ||||||||||||||
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Yield on total earning assets |
4.22 | % | 4.45 | % | 4.37 | % | 4.25 | % | 4.30 | % | 4.34 | % | 4.26 | % | ||||||||||||||
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Yield on total assets |
3.90 | % | 4.12 | % | 4.03 | % | 3.91 | % | 3.95 | % | 4.02 | % | 3.92 | % | ||||||||||||||
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Cost of deposits |
0.33 | % | 0.32 | % | 0.33 | % | 0.34 | % | 0.34 | % | 0.33 | % | 0.33 | % | ||||||||||||||
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Cost of borrowed funds |
1.41 | % | 1.42 | % | 1.53 | % | 1.39 | % | 1.37 | % | 1.45 | % | 1.36 | % | ||||||||||||||
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Cost of interest-bearing liabilities |
0.66 | % | 0.64 | % | 0.64 | % | 0.61 | % | 0.60 | % | 0.65 | % | 0.57 | % | ||||||||||||||
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Cost of funds (total earning assets) |
0.46 | % | 0.44 | % | 0.45 | % | 0.44 | % | 0.43 | % | 0.45 | % | 0.42 | % | ||||||||||||||
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Cost of funds (total assets) |
0.42 | % | 0.41 | % | 0.42 | % | 0.40 | % | 0.40 | % | 0.42 | % | 0.38 | % | ||||||||||||||
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PURCHASE ACCOUNTING ADJUSTMENTS |
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Loan portfolio - increase interest income |
$ | 1,002 | 935 | 1,316 | 1,074 | 1,354 | 3,253 | 4,264 | ||||||||||||||||||||
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Time deposits - reduce interest expense |
$ | 0 | 0 | 0 | 0 | 196 | 0 | 1,371 | ||||||||||||||||||||
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FHLB advances - reduce interest expense |
$ | 0 | 0 | 0 | 0 | 0 | 0 | 22 | ||||||||||||||||||||
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Trust preferred - increase interest expense |
$ | 171 | 171 | 171 | 171 | 171 | 513 | 513 | ||||||||||||||||||||
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Core deposit intangible - increase overhead |
$ | 636 | 688 | 715 | 715 | 715 | 2,039 | 2,277 | ||||||||||||||||||||
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CAPITAL |
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Tangible equity to tangible assets |
9.63 | % | 9.66 | % | 9.68 | % | 9.56 | % | 9.44 | % | 9.63 | % | 9.44 | % | ||||||||||||||
|
Tier 1 leverage capital ratio |
11.28 | % | 11.41 | % | 11.43 | % | 11.56 | % | 11.52 | % | 11.28 | % | 11.52 | % | ||||||||||||||
|
Common equity risk-based capital ratio |
10.83 | % | 10.73 | % | 10.86 | % | 10.89 | % | 10.95 | % | 10.83 | % | 10.95 | % | ||||||||||||||
|
Tier 1 risk-based capital ratio |
12.40 | % | 12.31 | % | 12.49 | % | 12.83 | % | 12.94 | % | 12.40 | % | 12.94 | % | ||||||||||||||
|
Total risk-based capital ratio |
13.05 | % | 12.95 | % | 13.12 | % | 13.45 | % | 13.58 | % | 13.05 | % | 13.58 | % | ||||||||||||||
|
Tier 1 capital |
$ | 337,054 | 330,710 | 324,296 | 329,858 | 324,911 | 337,054 | 324,911 | ||||||||||||||||||||
|
Tier 1 plus tier 2 capital |
$ | 354,580 | 347,819 | 340,557 | 345,539 | 341,029 | 354,580 | 341,029 | ||||||||||||||||||||
|
Total risk-weighted assets |
$ | 2,718,012 | 2,685,823 | 2,596,517 | 2,570,015 | 2,511,174 | 2,718,012 | 2,511,174 | ||||||||||||||||||||
|
Book value per common share |
$ | 21.44 | 21.18 | 20.86 | 20.41 | 20.20 | 21.44 | 20.20 | ||||||||||||||||||||
|
Tangible book value per common share |
$ | 17.76 | 17.45 | 17.07 | 16.61 | 16.34 | 17.76 | 16.34 | ||||||||||||||||||||
|
Cash dividend per common share |
$ | 0.17 | 0.16 | 0.16 | 0.15 | 0.15 | 0.49 | 0.43 | ||||||||||||||||||||
|
ASSET QUALITY |
||||||||||||||||||||||||||||
|
Gross loan charge-offs |
$ | 363 | 397 | 475 | 1,266 | 182 | 1,235 | 5,013 | ||||||||||||||||||||
|
Recoveries |
$ | 179 | 145 | 456 | 328 | 239 | 780 | 2,591 | ||||||||||||||||||||
|
Net loan charge-offs (recoveries) |
$ | 184 | 252 | 19 | 938 | (57 | ) | 455 | 2,422 | |||||||||||||||||||
|
Net loan charge-offs to average loans |
0.03 | % | 0.04 | % |
< 0.01% |
0.17 | % | (0.01% | ) | 0.03 | % | 0.15 | % | |||||||||||||||
|
Allowance for loan losses |
$ | 17,526 | 17,110 | 16,262 | 15,681 | 16,119 | 17,526 | 16,119 | ||||||||||||||||||||
|
Allowance to originated loans |
0.93 | % | 0.94 | % | 0.94 | % | 0.94 | % | 1.04 | % | 0.93 | % | 1.04 | % | ||||||||||||||
|
Nonperforming loans |
$ | 4,669 | 5,168 | 4,842 | 5,444 | 8,214 | 4,669 | 8,214 | ||||||||||||||||||||
|
Other real estate/repossessed assets |
$ | 790 | 815 | 1,478 | 1,293 | 2,272 | 790 | 2,272 | ||||||||||||||||||||
|
Nonperforming loans to total loans |
0.19 | % | 0.22 | % | 0.21 | % | 0.24 | % | 0.37 | % | 0.19 | % | 0.37 | % | ||||||||||||||
|
Nonperforming assets to total assets |
0.18 | % | 0.20 | % | 0.22 | % | 0.23 | % | 0.36 | % | 0.18 | % | 0.36 | % | ||||||||||||||
|
NONPERFORMING ASSETS - COMPOSITION |
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|
Residential real estate: |
||||||||||||||||||||||||||||
|
Land development |
$ | 23 | 42 | 30 | 23 | 378 | 23 | 378 | ||||||||||||||||||||
|
Construction |
$ | 0 | 319 | 0 | 0 | 0 | 0 | 0 | ||||||||||||||||||||
|
Owner occupied / rental |
$ | 2,945 | 2,893 | 2,955 | 3,515 | 3,714 | 2,945 | 3,714 | ||||||||||||||||||||
|
Commercial real estate: |
||||||||||||||||||||||||||||
|
Land development |
$ | 110 | 125 | 140 | 155 | 170 | 110 | 170 | ||||||||||||||||||||
|
Construction |
$ | 0 | 0 | 0 | 0 | 0 | 0 | 0 | ||||||||||||||||||||
|
Owner occupied |
$ | 1,597 | 2,263 | 2,877 | 2,743 | 2,741 | 1,597 | 2,741 | ||||||||||||||||||||
|
Non-owner occuiped |
$ | 691 | 134 | 151 | 191 | 3,193 | 691 | 3,193 | ||||||||||||||||||||
|
Non-real estate: |
||||||||||||||||||||||||||||
|
Commercial assets |
$ | 65 | 165 | 137 | 69 | 271 | 65 | 271 | ||||||||||||||||||||
|
Consumer assets |
$ | 28 | 42 | 30 | 41 | 19 | 28 | 19 | ||||||||||||||||||||
|
Total nonperforming assets |
5,459 | 5,983 | 6,320 | 6,737 | 10,486 | 5,459 | 10,486 | |||||||||||||||||||||
|
NONPERFORMING ASSETS - RECON |
||||||||||||||||||||||||||||
|
Beginning balance |
$ | 5,983 | 6,320 | 6,737 | 10,486 | 10,136 | 6,737 | 31,429 | ||||||||||||||||||||
|
Additions - originated loans |
$ | 1,172 | 1,096 | 1,123 | 927 | 1,161 | 3,391 | 4,717 | ||||||||||||||||||||
|
Merger-related activity |
$ | 0 | 0 | 0 | 656 | 163 | 0 | 434 | ||||||||||||||||||||
|
Return to performing status |
$ | 0 | 0 | 0 | (48 | ) | 0 | 0 | (5 | ) | ||||||||||||||||||
|
Principal payments |
$ | (1,509 | ) | (495 | ) | (774 | ) | (3,457 | ) | (567 | ) | (2,778 | ) | (20,184 | ) | |||||||||||||
|
Sale proceeds |
$ | (76 | ) | (642 | ) | (402 | ) | (1,300 | ) | (319 | ) | (1,120 | ) | (1,077 | ) | |||||||||||||
|
Loan charge-offs |
$ | (101 | ) | (261 | ) | (356 | ) | (172 | ) | (65 | ) | (718 | ) | (4,672 | ) | |||||||||||||
|
Valuation write-downs |
$ | (10 | ) | (35 | ) | (8 | ) | (355 | ) | (23 | ) | (53 | ) | (156 | ) | |||||||||||||
|
Ending balance |
$ | 5,459 | 5,983 | 6,320 | 6,737 | 10,486 | 5,459 | 10,486 | ||||||||||||||||||||
|
LOAN PORTFOLIO COMPOSITION |
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|
Commercial: |
||||||||||||||||||||||||||||
|
Commercial & industrial |
$ | 750,330 | 750,136 | 714,612 | 696,303 | 643,118 | 750,330 | 643,118 | ||||||||||||||||||||
|
Land development & construction |
$ | 37,455 | 40,529 | 39,630 | 45,120 | 47,734 | 37,455 | 47,734 | ||||||||||||||||||||
|
Owner occupied comm'l R/E |
$ | 440,705 | 438,798 | 441,662 | 445,919 | 427,016 | 440,705 | 427,016 | ||||||||||||||||||||
|
Non-owner occupied comm'l R/E |
$ | 741,443 | 716,930 | 666,013 | 644,351 | 636,227 | 741,443 | 636,227 | ||||||||||||||||||||
|
Multi-family & residential rental |
$ | 118,103 | 113,361 | 112,533 | 115,003 | 123,525 | 118,103 | 123,525 | ||||||||||||||||||||
|
Total commercial |
$ | 2,088,036 | 2,059,754 | 1,974,450 | 1,946,696 | 1,877,620 | 2,088,036 | 1,877,620 | ||||||||||||||||||||
|
Retail: |
||||||||||||||||||||||||||||
|
1-4 family mortgages |
$ | 190,715 | 189,119 | 185,535 | 190,385 | 193,003 | 190,715 | 146,765 | ||||||||||||||||||||
|
Home equity & other consumer |
$ | 127,626 | 131,067 | 135,683 | 140,646 | 146,765 | 127,626 | 193,003 | ||||||||||||||||||||
|
Total retail |
$ | 318,341 | 320,186 | 321,218 | 331,031 | 339,768 | 318,341 | 339,768 | ||||||||||||||||||||
|
Total loans |
$ | 2,406,377 | 2,379,940 | 2,295,668 | 2,277,727 | 2,217,388 | 2,406,377 | 2,217,388 | ||||||||||||||||||||
|
END OF PERIOD BALANCES |
||||||||||||||||||||||||||||
|
Loans |
$ | 2,406,377 | 2,379,940 | 2,295,668 | 2,277,727 | 2,217,388 | 2,406,377 | 2,217,388 | ||||||||||||||||||||
|
Securities |
$ | 333,469 | 331,478 | 351,372 | 354,559 | 374,740 | 333,469 | 374,740 | ||||||||||||||||||||
|
Other interest-earning assets |
$ | 85,848 | 46,896 | 62,814 | 47,062 | 60,106 | 85,848 | 60,106 | ||||||||||||||||||||
|
Total earning assets (before allowance) |
$ | 2,825,694 | 2,758,314 | 2,709,854 | 2,679,348 | 2,652,234 | 2,825,694 | 2,652,234 | ||||||||||||||||||||
|
Total assets |
$ | 3,063,964 | 2,999,936 | 2,926,056 | 2,903,556 | 2,881,377 | 3,063,964 | 2,881,377 | ||||||||||||||||||||
|
Noninterest-bearing deposits |
$ | 731,663 | 733,573 | 678,100 | 674,568 | 619,125 | 731,663 | 619,125 | ||||||||||||||||||||
|
Interest-bearing deposits |
$ | 1,597,774 | 1,546,145 | 1,587,022 | 1,600,814 | 1,635,004 | 1,597,774 | 1,635,004 | ||||||||||||||||||||
|
Total deposits |
$ | 2,329,437 | 2,279,718 | 2,265,122 | 2,275,382 | 2,254,129 | 2,329,437 | 2,254,129 | ||||||||||||||||||||
|
Total borrowed funds |
$ | 372,917 | 362,665 | 308,148 | 281,830 | 284,919 | 372,917 | 284,919 | ||||||||||||||||||||
|
Total interest-bearing liabilities |
$ | 1,970,691 | 1,908,810 | 1,895,170 | 1,882,644 | 1,919,923 | 1,970,691 | 1,919,923 | ||||||||||||||||||||
|
Shareholders' equity |
$ | 349,471 | 344,577 | 338,553 | 333,804 | 328,820 | 349,471 | 328,820 | ||||||||||||||||||||
|
AVERAGE BALANCES |
||||||||||||||||||||||||||||
|
Loans |
$ | 2,391,620 | 2,342,333 | 2,273,960 | 2,243,856 | 2,201,124 | 2,336,174 | 2,156,175 | ||||||||||||||||||||
|
Securities |
$ | 328,993 | 340,866 | 354,499 | 362,390 | 378,286 | 341,407 | 407,431 | ||||||||||||||||||||
|
Other interest-earning assets |
$ | 91,590 | 49,365 | 42,008 | 75,111 | 64,027 | 61,100 | 80,248 | ||||||||||||||||||||
|
Total earning assets (before allowance) |
$ | 2,812,203 | 2,732,564 | 2,670,467 | 2,681,357 | 2,643,437 | 2,738,681 | 2,643,854 | ||||||||||||||||||||
|
Total assets |
$ | 3,040,324 | 2,952,184 | 2,892,229 | 2,909,210 | 2,876,671 | 2,961,866 | 2,872,157 | ||||||||||||||||||||
|
Noninterest-bearing deposits |
$ | 733,600 | 702,293 | 652,338 | 656,475 | 620,189 | 696,214 | 589,993 | ||||||||||||||||||||
|
Interest-bearing deposits |
$ | 1,572,424 | 1,548,509 | 1,588,930 | 1,631,218 | 1,653,441 | 1,569,963 | 1,685,930 | ||||||||||||||||||||
|
Total deposits |
$ | 2,306,024 | 2,250,802 | 2,241,268 | 2,287,693 | 2,273,630 | 2,266,177 | 2,275,923 | ||||||||||||||||||||
|
Total borrowed funds |
$ | 373,973 | 347,191 | 299,956 | 276,585 | 263,264 | 340,496 | 255,602 | ||||||||||||||||||||
|
Total interest-bearing liabilities |
$ | 1,946,397 | 1,895,700 | 1,888,886 | 1,907,803 | 1,916,705 | 1,910,459 | 1,941,532 | ||||||||||||||||||||
|
Shareholders' equity |
$ | 345,944 | 339,357 | 336,870 | 330,032 | 328,332 | 340,742 | 329,704 |