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EX-32.2 - EXHIBIT 32.2 - Amerant Bancorp Inc.ex32206302018.htm
EX-32.1 - EXHIBIT 32.1 - Amerant Bancorp Inc.ex32106302018.htm
EX-31.2 - EXHIBIT 31.2 - Amerant Bancorp Inc.ex31206302018.htm
EX-31.1 - EXHIBIT 31.1 - Amerant Bancorp Inc.ex31106302018.htm


 
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
 
FORM 10-Q
 
(Mark One)
ý QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended June 30, 2018
¨ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period __________ to __________
Commission File Number: 001-38534
 
Mercantil Bank Holding Corporation
(Exact Name of Registrant as Specified in Its Charter)
 
Florida
(State or other jurisdiction of
incorporation or organization)
65-0032379
(I.R.S. Employer
Identification No.)
220 Alhambra Circle
Coral Gables, Florida
(305) 460-8728
33134
(Address and telephone number of principal executive offices)
(Zip Code)
 
(Former Name, Former Address and Former Fiscal Year, if Changed Since Last Report)
 
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.
Yes ¨                                         No ý
The registrant became subject to these requirements on August 8, 2018.
Indicate by check mark whether the registrant has submitted electronically and posted on its corporate website, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).
Yes ý                                         No ¨

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company or emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer”, “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
Large accelerated filer ¨
 
Accelerated filer ¨
 
Smaller reporting company ¨
 
Emerging growth company ý
Non-accelerated filer ý (Do not check if a smaller reporting company)
If an emerging growth company, indicate by check mark if the company has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ¨ 
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act). Yes ¨       No ý
Indicate the number of shares outstanding of each of the issuer's classes of common stock, as of the latest practicable date.
Class
 
Outstanding as of September 21, 2018
Class A Common Stock, $0.10 par value per share
 
74,212,408 shares of Class A Common Stock
Class B Common Stock, $0.10 par value per share
 
53,253,157 shares of Class B Common Stock

1



MERCANTIL BANK HOLDING CORPORATION AND SUBSIDIARIES
FORM 10-Q
June 30, 2018
INDEX
Page
 
 
 
 
 
 
 


2



PART I. FINANCIAL INFORMATION


ITEM 1. FINANCIAL STATEMENTS
Mercantil Bank Holding Corporation and Subsidiaries
Consolidated Balance Sheets (Unaudited)
(in thousands, except per share data)
June 30,
2018
 
December 31, 2017
 

 
 
Assets
 
 
 
Cash and due from banks
$
27,125

 
$
44,531

Interest earning deposits with banks
90,105

 
108,914

Cash and cash equivalents
117,230

 
153,445

Securities
 
 
 
Available for sale
1,649,665

 
1,687,157

Held to maturity
88,440

 
89,860

Federal Reserve Bank and Federal Home Loan Bank stock
74,014

 
69,934

Loans held for sale

 
5,611

Loans, gross
6,219,549

 
6,066,225

Less: Allowance for loan losses
69,931

 
72,000

Loans, net
6,149,618

 
5,994,225

Bank owned life insurance
203,236

 
200,318

Premises and equipment, net
121,683

 
129,357

Deferred tax assets, net
23,219

 
14,583

Goodwill
19,193

 
19,193

Accrued interest receivable and other assets
84,166

 
73,084

Total assets
$
8,530,464

 
$
8,436,767

Liabilities and Stockholders' Equity
 
 
 
Deposits
 
 
 
Demand
 
 
 
Noninterest bearing
$
860,745

 
$
895,710

Interest bearing
1,403,657

 
1,496,749

Savings and money market
1,646,392

 
1,684,080

Time
2,452,344

 
2,246,434

Total deposits
6,363,138

 
6,322,973

Advances from the Federal Home Loan Bank and other borrowings
1,258,000

 
1,173,000

Junior subordinated debentures held by trust subsidiaries
118,110

 
118,110

Accounts payable, accrued liabilities and other liabilities
71,834

 
69,234

Total liabilities
7,811,082

 
7,683,317

Commitments and contingencies (Note 11)

 

 
 
 
 
Stockholders’ equity (Note 1)
 
 
 
Class A common stock, $0.10 par value, 400,000,000 shares authorized; 74,212,408 shares issued and outstanding
7,421

 
7,421

Class B common stock, $0.10 par value, 100,000,000 shares authorized; 53,253,157 shares issued and outstanding
5,325

 
5,325

Additional paid in capital
359,008

 
359,008

Retained earnings
367,681

 
387,829

Accumulated other comprehensive loss
(20,053
)
 
(6,133
)
Total stockholders’ equity
719,382

 
753,450

Total liabilities and stockholders’ equity
$
8,530,464

 
$
8,436,767


The accompanying notes are an integral part of these consolidated financial statements (unaudited).
3

Mercantil Bank Holding Corporation and Subsidiaries
Consolidated Statements of Operations and Comprehensive Income (Unaudited)


 
Three Months Ended June 30,
 
Six Months Ended June 30,
(in thousands, except per share data)
2018
 
2017
 
2018
 
2017
Interest income
 
 
 
 
 
 
 
Loans
$
62,448

 
$
53,790

 
$
122,118

 
$
103,870

Investment securities
12,709

 
12,515

 
24,450

 
25,081

Interest earning deposits with banks
759

 
364

 
1,279

 
737

Total interest income
75,916

 
66,669

 
147,847

 
129,688

 
 
 
 
 
 
 
 
Interest expense
 
 
 
 
 
 
 
Interest bearing demand deposits
113

 
84

 
202

 
184

Savings and money market deposits
3,104

 
2,187

 
5,688

 
4,381

Time deposits
10,172

 
6,193

 
18,872

 
11,853

Advances from the Federal Home Loan Bank
6,511

 
4,345

 
12,501

 
8,594

Junior subordinated debentures
2,025

 
1,855

 
3,960

 
3,679

Securities sold under agreements to repurchase
2

 
564

 
2

 
1,205

Total interest expense
21,927

 
15,228

 
41,225

 
29,896

Net interest income
53,989

 
51,441

 
106,622

 
99,792

Provision for loan losses
150

 
3,646

 
150

 
7,743

Net interest income after provision for loan losses
53,839

 
47,795

 
106,472

 
92,049

 
 
 
 
 
 
 
 
Noninterest income
 
 
 
 
 
 
 
Deposits and service fees
4,471

 
4,868

 
9,053

 
9,774

Brokerage, advisory and fiduciary activities
4,426

 
4,897

 
8,841

 
10,158

Change in cash surrender value of bank owned life insurance
1,474

 
1,242

 
2,918

 
2,487

Cards and trade finance servicing fees
1,173

 
1,114

 
2,235

 
2,185

Gain on early extinguishment of advances from the Federal Home Loan Bank
882

 

 
882

 

Data processing, rental income and fees for other services to related parties
613

 
969

 
1,494

 
1,552

Securities gains, net
16

 
177

 
16

 
155

Other noninterest income
1,931

 
4,492

 
3,492

 
5,665

Total noninterest income
14,986

 
17,759

 
28,931

 
31,976

 
 
 
 
 
 
 
 
Noninterest expense
 
 
 
 
 
 
 
Salaries and employee benefits
34,932

 
31,666

 
68,973

 
63,974

Occupancy and equipment
4,060

 
4,052

 
7,775

 
8,761

Professional and other services fees
5,387

 
2,744

 
11,831

 
5,401

FDIC assessments and insurance
1,468

 
2,180

 
2,915

 
4,143

Telecommunication and data processing
3,011

 
2,417

 
6,095

 
4,169

Depreciation and amortization
1,945

 
2,039

 
4,086

 
4,466

Other operating expenses
1,835

 
5,567

 
6,608

 
8,899

Total noninterest expenses
52,638

 
50,665

 
108,283

 
99,813

Net income before income tax
16,187

 
14,889

 
27,120

 
24,212

Income tax expense
(5,764
)
 
(4,499
)
 
(7,268
)
 
(7,315
)
Net income
$
10,423

 
$
10,390

 
$
19,852

 
$
16,897

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 

The accompanying notes are an integral part of these consolidated financial statements (unaudited).
4

Mercantil Bank Holding Corporation and Subsidiaries
Consolidated Statements of Operations and Comprehensive Income (Unaudited)


 
Three Months Ended June 30,
 
Six Months Ended June 30,
(in thousands, except per share data)
2018
 
2017
 
2018
 
2017
Other comprehensive (loss) income, net of tax
 
 
 
 
 
 
 
Net unrealized holding (losses) gains on securities available for sale arising during the period
$
(5,454
)
 
$
5,980

 
$
(20,431
)
 
$
7,552

Net unrealized holding gains (losses) on cash flow hedges arising during the period
2,139

 
(1,453
)
 
6,352

 
(1,295
)
Reclassification adjustment for net losses (gains) included in net income
2

 
(93
)
 
159

 
(47
)
Other comprehensive (loss) income
(3,313
)
 
4,434

 
(13,920
)
 
6,210

Comprehensive income
$
7,110

 
$
14,824

 
$
5,932

 
$
23,107

 
 
 
 
 
 
 
 
Basic and diluted earnings per share:
 
 
 
 
 
 
 
Net income available to common shareholders
$
10,423

 
$
10,390

 
$
19,852

 
$
16,897

Basic and diluted weighted average shares outstanding
127,466

 
127,466

 
127,466

 
127,466

Basic and diluted income per common share
$
0.08

 
$
0.08

 
$
0.16

 
$
0.13

Cash dividends declared per common share (Note 1)
$

 
$

 
$
0.31

 
$


The accompanying notes are an integral part of these consolidated financial statements (unaudited).
5

Mercantil Bank Holding Corporation and Subsidiaries
Consolidated Statements of Changes in Stockholders’ Equity (Unaudited)
Six Months Ended June 30, 2018 and 2017




 
Common Stock
 
Additional
Paid
in Capital
 
Retained
Earnings
 
Accumulated Other Comprehensive Loss
 
Total
Stockholders'
Equity
 
Class A
 
Class B
 
 
 
 
(in thousands, except share data)
Shares
Issued and
Outstanding
 
Par
value
 
Shares
Issued and
Outstanding
 
Par
value
 
 
 
 
Balance at
December 31, 2016
74,212,408

 
$
7,421

 
53,253,157

 
$
5,325

 
$
359,008

 
$
343,678

 
$
(10,695
)
 
$
704,737

Net income

 

 

 

 

 
16,897

 

 
16,897

Other comprehensive income

 

 

 

 

 

 
6,210

 
6,210

Balance at
June 30, 2017
74,212,408

 
$
7,421

 
53,253,157

 
$
5,325

 
$
359,008

 
$
360,575

 
$
(4,485
)
 
$
727,844

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Balance at
December 31, 2017
74,212,408

 
$
7,421

 
53,253,157

 
$
5,325

 
$
359,008

 
$
387,829

 
$
(6,133
)
 
$
753,450

Dividends (Note 1)

 

 

 

 

 
(40,000
)
 

 
(40,000
)
Net income

 

 

 

 

 
19,852

 

 
19,852

Other comprehensive loss

 

 

 

 

 

 
(13,920
)
 
(13,920
)
Balance at
June 30, 2018
74,212,408

 
$
7,421

 
53,253,157

 
$
5,325

 
$
359,008

 
$
367,681

 
$
(20,053
)
 
$
719,382


The accompanying notes are an integral part of these consolidated financial statements (unaudited).
6

Mercantil Bank Holding Corporation and Subsidiaries
Consolidated Statements of Cash Flows (Unaudited)


 
Six Months Ended June 30,
(in thousands)
2018
 
2017
Cash flows from operating activities
 
 
 
Net income
$
19,852

 
$
16,897

Adjustments to reconcile net income to net cash provided by operating activities
 
 
 
Provision for loan losses
150

 
7,743

Net premium amortization on securities
8,447

 
9,936

Depreciation and amortization
4,086

 
4,466

Increase in cash surrender value of bank owned life insurance
(2,918
)
 
(2,487
)
Deferred taxes, securities net gains or losses and others
(4,374
)
 
(184
)
Net changes in operating assets and liabilities
 
 
 
Accrued interest receivable and other assets
(2,075
)
 
2,378

Account payable, accrued liabilities and other liabilities
3,071

 
6,078

Net cash provided by operating activities
26,239

 
44,827

 
 
 
 
Cash flows from investing activities
 
 
 
Purchases of investment securities:
 
 
 
Available for sale
(121,245
)
 
(116,495
)
Held to maturity securities

 
(12,586
)
Federal Reserve Bank and Federal Home Loan Bank stock
(13,642
)
 
(16,819
)
Maturities, sales and calls of investment securities:
 
 
 
Available for sale
122,805

 
311,647

Held to maturity
1,338

 

Federal Reserve Bank and Federal Home Loan Bank stock
9,563

 
13,388

Net increase in loans
(174,197
)
 
(382,566
)
Proceeds from loan portfolio sales
23,781

 
63,256

Net purchases of bank premises and equipment
(3,522
)
 
(268
)
Net proceeds from sale of subsidiary
7,500

 

Net cash used in investing activities
(147,619
)
 
(140,443
)
 
 
 
 
Cash flows from financing activities
 
 
 
Net decrease in demand, savings and money market accounts
(165,745
)
 
(148,347
)
Net increase in time deposits
205,910

 
170,922

Net decrease in securities sold under agreements to repurchase

 
(15,000
)
Proceeds from Advances from the Federal Home Loan Bank and other banks
656,000

 
690,500

Repayments of Advances from the Federal Home Loan Bank and other banks
(571,000
)
 
(610,500
)
Dividend paid
(40,000
)
 

Net cash provided by financing activities
85,165

 
87,575

Net decrease in cash and cash equivalents
(36,215
)
 
(8,041
)
 
 
 
 
Cash and cash equivalents
 
 
 
Beginning of period
153,445

 
134,989

End of period
$
117,230

 
$
126,948

 
 
 
 
Supplemental disclosures of cash flow information
 
 
 
Cash paid:
 
 
 
Interest
$
40,491

 
$
29,359

Income taxes
15,203

 
7,931


The accompanying notes are an integral part of these consolidated financial statements (unaudited).
7

Mercantil Bank Holding Corporation and Subsidiaries
Notes to Interim Consolidated Financial Statements (Unaudited)


1.
Basis of Presentation and Summary of Significant Accounting Policies
Mercantil Bank Holding Corporation (the “Company”), is a Florida corporation incorporated in 1985, which has operated since January 1987. The Company is a bank holding company registered under the Bank Holding Company Act of 1956, as a result of its 100% indirect ownership of Mercantil Bank, N.A. (the “Bank”). The Company’s principal office is in the City of Coral Gables, Florida. The Bank is a member of the Federal Reserve Bank of Atlanta (“Federal Reserve Bank”) and the Federal Home Loan Bank of Atlanta (“FHLB”). The Bank has two principal subsidiaries, Mercantil Investment Services, Inc. a securities broker-dealer, and Mercantil Trust Company, N.A.
As of December 31, 2017 the Company was a wholly owned subsidiary of Mercantil Servicios Financieros, C.A. (“MSF”). On March 15, 2018, MSF transferred ownership of 100% of the Company Shares to a non-discretionary common law grantor trust governed by the laws of the State of Florida (the “Distribution Trust”). The Company and MSF are parties to an Amended and Restated Separation and Distribution Agreement dated as of June 12, 2018 that provided for the spin-off (the Spin-off”) of the Company from MSF.
On February 6, 2018, the Company filed amended and restated articles of incorporation with the Secretary of State of the State of Florida. Pursuant to this action, the total number of Class A and Class B common shares (“Company Shares”), which the Company is authorized to issue is 400,000,000 and 100,000,000, respectively. In addition, effective on February 6, 2018, the Company exchanged 100% of the 298,570,328 Class A and 215,188,764 Class B Company Shares outstanding, for 74,212,408 Class A and 53,253,157 Class B Company Shares. This facilitated the distribution of one share of Class A and Class B Company Shares for each outstanding share of MSF Class A and Class B common stock, respectively, discussed below. All references made to share or per share amounts in the consolidated financial statements for the periods presented and applicable disclosures have been retroactively adjusted to reflect this exchange. See Note 22 to the audited consolidated financial statements for additional information, which are included in the Company’s definitive Information Statement filed with the Securities and Exchange Commission (“SEC”) as Exhibit 99.1 to its Current Report on Form 8-K on August 10, 2018 (the “Information Statement”).
On March 13, 2018, the Company paid a special, one-time, cash dividend of $40.0 million to MSF.
The Distribution Trust was established by MSF and the Company pursuant to a Distribution Trust Agreement with a Texas trust company, unaffiliated with MSF, as trustee. The Distribution Trust held 80.1% of the Company Shares (the “Distributed Shares”) for the benefit of MSF’s Class A and Class B common shareholders of record (“Record Holders”) on April 2, 2018 (“Record Date”). The remaining 19.9% of all Company Shares of each Class held in the Distribution Trust for the benefit of MSF and its subsidiaries are the “Retained Shares”.
The Distributed Shares were distributed to MSF shareholders on August 10, 2018 (the “Distribution”). As a result of the Distribution, the Company is a separate company whose common stock is listed on the Nasdaq Stock Market under the symbols “MBNAA” (for the Company’s Class A common stock) and “MBNAB” (for the Company’s Class B common stock). The Distribution Trust continues to hold the Retained Shares pending their sale or disposition by MSF or, in certain circumstances where there is a change in control of MSF, their contribution by MSF to the Company.
In October 2008, MSF, the Company and various individuals as Voting Trustees, entered into a Voting Trust Agreement (the “Voting Trust”). The Voting Trust was established to promote the interests of the Bank and expand its business in the United States by facilitating access to the United States’ capital markets, and to provide continued appropriate corporate governance of the Bank upon the occurrence of certain changes or threatened changes in control of MSF not approved by MSF’s board of directors.

8

Mercantil Bank Holding Corporation and Subsidiaries
Notes to Interim Consolidated Financial Statements (Unaudited)


On July 24, 2018, the Voting Trust was terminated. Accordingly, all the existing Voting Trust certificates have been canceled. All the issued and outstanding shares of capital stock of Mercantil Florida Bancorp, Inc (“Florida Bancorp”), which is the Bank’s sole shareholder, previously held by the Voting Trust, were transferred to the Company on that date. The Company is now the sole shareholder of Florida Bancorp, and the indirect owner of 100% of the Bank.
On August 8, 2018, the Company became subject to the reporting requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934 (the “Securities Act”).
The accompanying unaudited interim consolidated financial statements have been prepared in accordance with generally accepted accounting principles for interim financial information and the instructions to Form 10-Q and Article 10 of Regulation S-X of the SEC. Accordingly, they do not include all of the information and footnotes required for a fair statement of financial position, results of operations and cash flows in conformity with U.S. generally accepted accounting principles (“U.S. GAAP”). These interim unaudited consolidated financial statements reflect all adjustments that are, in the opinion of management, necessary for a fair statement of the results for the interim periods presented. These adjustments are of a normal, recurring nature. Interim period operating results may not be indicative of the operating results for a full year or any other period. These interim unaudited consolidated financial statements should be read in conjunction with the audited consolidated financial statements as of December 31, 2017 and 2016 and for each of the three years in the period ended December 31, 2017 and the accompanying footnote disclosures for the Company, which are included in the Information Statement.
The effects of significant subsequent events, if any, have been adequately recognized or disclosed in these unaudited interim consolidated financial statements. Subsequent events have been evaluated through September 21, 2018, the date when these consolidated financial statements were available to be issued.
For a complete summary of our significant accounting policies, please see Note 1 to the audited consolidated financial statements as of December 31, 2017 and 2016 and for each of the three years in the period ended December 31, 2017, which are included in the Information Statement.
Estimates
The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting periods.
Significant estimates made by management include: i) the determination of the allowance for loan losses; (ii) the fair values of securities, bank owned life insurance and the reporting unit to which goodwill has been assigned during the annual goodwill impairment test; and (iii) the determination of whether the amount of deferred tax assets will more likely than not be realized. Management believes that these estimates are appropriate. Actual results could differ from these estimates.

9

Mercantil Bank Holding Corporation and Subsidiaries
Notes to Interim Consolidated Financial Statements (Unaudited)


Revisions
During the second quarter of 2018, the Company determined to revise its presentation of loans by classes to correct for certain immaterial misclassifications in the presentation of loans by classes in the footnotes to the Company’s consolidated financial statements as of December 31, 2017. The Company assessed the impact of these misclassifications and determined they had no effect on the Consolidated Balance Sheet as of December 31, 2017, the Consolidated Statements of Operations and Comprehensive Income for the three and six-month periods ended June 30, 2017, or the Consolidated Statement of Cash Flows for the six months ended June 30, 2017.
The following tables show the effects of the correction of the misclassifications to the footnotes to the Company’s consolidated financial statements as of December 31, 2017. This change in classification is reflected in the footnotes to the consolidated financial statements as of June 30, 2018 and for the three and six months periods ended June 30, 2018 and 2017.
Loan portfolio by class:
 
December 31, 2017
(in thousands)
As Reported
 
As Revised
 
Effect of change
Real estate loans
 
 
 
 
 
Commercial real estate
 
 
 
 
 
Non-owner occupied
$
1,745,839

 
$
1,713,104

 
$
(32,735
)
Multi-family residential
795,912

 
839,709

 
43,797

Land development and construction loans
421,285

 
406,940

 
(14,345
)
 
2,963,036

 
2,959,753

 
(3,283
)
Single-family residential
515,237

 
512,754

 
(2,483
)
Owner-occupied
429,803

 
610,386

 
180,583

 
3,908,076

 
4,082,893

 
174,817

Commercial loans
1,529,572

 
1,354,755

 
(174,817
)
Loans to financial institutions and acceptances
497,626

 
497,626

 

Consumer loans and overdrafts
130,951

 
130,951

 

 
$
6,066,225

 
$
6,066,225

 
$


10

Mercantil Bank Holding Corporation and Subsidiaries
Notes to Interim Consolidated Financial Statements (Unaudited)


Age analysis of the loan portfolio by class:
As reported:
 
December 31, 2017
 
Total Loans,
Net of
Unearned
Income
 
 
 
Past Due
 
Total Loans in
Nonaccrual
Status
 
Total Loans
90 Days or More
Past Due
and Accruing
(in thousands)
 
Current
 
30-59
Days
 
60-89
Days
 
Greater than
90 Days
 
Total Past
Due
 
 
Real estate loans
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Commercial real estate
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Non-owner occupied
$
1,745,839

 
$
1,745,686

 
$

 
$

 
$
153

 
$
153

 
$
162

 
$

Multi-family residential
795,912

 
795,912

 

 

 

 

 

 

Land development and construction loans
421,285

 
421,285

 

 

 

 

 

 

 
2,963,036

 
2,962,883

 

 

 
153

 
153

 
162

 

Single-family residential
515,237

 
504,204

 
6,609

 
2,421

 
2,003

 
11,033

 
5,004

 
226

Owner-occupied
429,803

 
423,560

 
1,571

 
503

 
4,169

 
6,243

 
10,398

 

 
3,908,076

 
3,890,647

 
8,180

 
2,924

 
6,325

 
17,429

 
15,564

 
226

Commercial loans
1,529,572

 
1,523,329

 
1,814

 
5

 
4,424

 
6,243

 
11,103

 

Loans to financial institutions and acceptances
497,626

 
497,626

 

 

 

 

 

 

Consumer loans and overdrafts
130,951

 
130,846

 
57

 
29

 
19

 
105

 
55

 

 
$
6,066,225

 
$
6,042,448

 
$
10,051

 
$
2,958

 
$
10,768

 
$
23,777

 
$
26,722

 
$
226


As revised:
 
December 31, 2017
 
Total Loans,
Net of
Unearned
Income
 
 
 
Past Due
 
Total Loans in
Nonaccrual
Status
 
Total Loans
90 Days or More
Past Due
and Accruing
(in thousands)
 
Current
 
30-59
Days
 
60-89
Days
 
Greater than
90 Days
 
Total Past
Due
 
 
Real estate loans
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Commercial real estate
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Non-owner occupied
$
1,713,104

 
$
1,712,624

 
$

 
$

 
$
480

 
$
480

 
$
489

 
$

Multi-family residential
839,709

 
839,709

 

 

 

 

 

 

Land development and construction loans
406,940

 
406,940

 

 

 

 

 

 

 
2,959,753

 
2,959,273

 

 

 
480

 
480

 
489

 

Single-family residential
512,754

 
501,393

 
6,609

 
2,750

 
2,002

 
11,361

 
5,004

 
226

Owner-occupied
610,386

 
602,643

 
3,000

 
174

 
4,569

 
7,743

 
12,227

 

 
4,082,893

 
4,063,309

 
9,609

 
2,924

 
7,051

 
19,584

 
17,720

 
226

Commercial loans
1,354,755

 
1,350,667

 
385

 
5

 
3,698

 
4,088

 
8,947

 

Loans to financial institutions and acceptances
497,626

 
497,626

 

 

 

 

 

 

Consumer loans and overdrafts
130,951

 
130,846

 
57

 
29

 
19

 
105

 
55

 

 
$
6,066,225

 
$
6,042,448

 
$
10,051

 
$
2,958

 
$
10,768

 
$
23,777

 
$
26,722

 
$
226


11

Mercantil Bank Holding Corporation and Subsidiaries
Notes to Interim Consolidated Financial Statements (Unaudited)



Age analysis of the loan portfolio by class:
Effects of change:
 
December 31, 2017
 
Total Loans,
Net of
Unearned
Income
 
 
 
Past Due
 
Total Loans in
Nonaccrual
Status
 
Total Loans
90 Days or More
Past Due
and Accruing
(in thousands)
 
Current
 
30-59
Days
 
60-89
Days
 
Greater than
90 Days
 
Total Past
Due
 
 
Real estate loans
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Commercial real estate
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Non-owner occupied
$
(32,735
)
 
$
(33,062
)
 
$

 
$

 
$
327

 
$
327

 
$
327

 
$

Multi-family residential
43,797

 
43,797

 

 

 

 

 

 

Land development and construction loans
(14,345
)
 
(14,345
)
 

 

 

 

 

 

 
(3,283
)
 
(3,610
)
 

 

 
327

 
327

 
327

 

Single-family residential
(2,483
)
 
(2,811
)
 

 
329

 
(1
)
 
328

 

 

Owner-occupied
180,583

 
179,083

 
1,429

 
(329
)
 
400

 
1,500

 
1,829

 

 
174,817

 
172,662

 
1,429

 

 
726

 
2,155

 
2,156

 

Commercial loans
(174,817
)
 
(172,662
)
 
(1,429
)
 

 
(726
)
 
(2,155
)
 
(2,156
)
 

Loans to financial institutions and acceptances

 

 

 

 

 

 

 

Consumer loans and overdrafts

 

 

 

 

 

 

 

 
$

 
$

 
$

 
$

 
$

 
$

 
$

 
$

Loans by credit quality indicators:
As reported:
 
December 31, 2017
 
 Credit Risk Rating
 
 
 
 
 
 Classified
 
 
(in thousands)
 Nonclassified
 
 Substandard
 
 Doubtful
 
 Loss
 
 Total
Real estate loans
 
 
 
 
 
 
 
 
 
Commercial real estate
 
 
 
 
 
 
 
 
 
Non-owner occupied
$
1,745,677

 
$
162

 
$

 
$

 
$
1,745,839

Multi-family residential
795,912

 

 

 

 
795,912

 Land development and construction loans
421,285

 

 

 

 
421,285

 
2,962,874

 
162

 

 

 
2,963,036

Single-family residential
509,368

 
5,869

 

 

 
515,237

Owner-occupied
417,694

 
12,109

 

 

 
429,803

 
3,889,936

 
18,140

 

 

 
3,908,076

Commercial loans
1,513,375

 
16,197

 

 

 
1,529,572

Loans to financial institutions and acceptances
497,626

 

 

 

 
497,626

Consumer loans and overdrafts
125,762

 
5,189

 

 

 
130,951

 
$
6,026,699

 
$
39,526

 
$

 
$

 
$
6,066,225





12

Mercantil Bank Holding Corporation and Subsidiaries
Notes to Interim Consolidated Financial Statements (Unaudited)



Loans by credit quality indicators:

As revised:
 
December 31, 2017
 
 Credit Risk Rating
 
 
 
 
 
 Classified
 
 
(in thousands)
 Nonclassified
 
 Substandard
 
 Doubtful
 
 Loss
 
 Total
Real estate loans
 
 
 
 
 
 
 
 
 
Commercial real estate
 
 
 
 
 
 
 
 
 
Non-owner occupied
$
1,712,615

 
$
489

 
$

 
$

 
$
1,713,104

Multi-family residential
839,709

 

 

 

 
839,709

Land development and construction loans
406,940

 

 

 

 
406,940

 
2,959,264

 
489

 

 

 
2,959,753

Single-family residential
506,885

 
5,869

 

 

 
512,754

Owner-occupied
596,519

 
13,867

 

 

 
610,386

 
4,062,668

 
20,225

 

 

 
4,082,893

Commercial loans
1,340,643

 
14,112

 

 

 
1,354,755

Loans to financial institutions and acceptances
497,626

 

 

 

 
497,626

Consumer loans and overdrafts
126,838

 
4,113

 

 

 
130,951

 
$
6,027,775

 
$
38,450

 
$

 
$

 
$
6,066,225

Effects of change:
 
December 31, 2017
 
 Credit Risk Rating
 
 
 
 
 
 Classified
 
 
(in thousands)
 Nonclassified
 
 Substandard
 
 Doubtful
 
 Loss
 
 Total
Real estate loans
 
 
 
 
 
 
 
 
 
Commercial real estate
 
 
 
 
 
 
 
 
 
Non-owner occupied
$
(33,062
)
 
$
327

 
$

 
$

 
$
(32,735
)
Multi-family residential
43,797

 

 

 

 
43,797

Land development and construction loans
(14,345
)
 

 

 

 
(14,345
)
 
(3,610
)
 
327

 

 

 
(3,283
)
Single-family residential
(2,483
)
 

 

 

 
(2,483
)
Owner-occupied
178,825

 
1,758

 

 

 
180,583

 
172,732

 
2,085

 

 

 
174,817

Commercial loans
(172,732
)
 
(2,085
)
 

 

 
(174,817
)
Loans to financial institutions and acceptances

 

 

 

 

Consumer loans and overdrafts
1,076

 
(1,076
)
 

 

 

 
$
1,076

 
$
(1,076
)
 
$

 
$

 
$





13

Mercantil Bank Holding Corporation and Subsidiaries
Notes to Interim Consolidated Financial Statements (Unaudited)



Allocation of allowance for loan losses at end of the period, as reported, revised and effects of change:
 
December 31, 2017
 
December 31, 2016
(in thousands)
As Reported
 
As Revised
 
Effect of change
 
As Reported
 
As Revised
 
Effect of change
 
 
 
 
Real estate
$
30,246

 
$
31,290

 
$
1,044

 
$
31,055

 
$
30,713

 
$
(342
)
Commercial
33,731

 
32,687

 
(1,044
)
 
40,555

 
40,897

 
342

Financial institutions
4,362

 
4,362

 

 
5,304

 
5,304

 

Consumer and others
3,661

 
3,661

 

 
4,837

 
4,837

 

 
$
72,000

 
$
72,000

 
$

 
$
81,751

 
$
81,751

 
$

 
March 31, 2018
 
March 31, 2017
(in thousands)
As Reported
 
As Revised
 
Effect of change
 
As Reported
 
As Revised
 
Effect of change
 
 
 
 
Real estate
$
29,416

 
$
30,503

 
$
1,087

 
$
32,742

 
$
32,471

 
$
(271
)
Commercial
34,759

 
33,672

 
(1,087
)
 
36,387

 
36,658

 
271

Financial institutions
3,671

 
3,671

 

 
5,615

 
5,615

 

Consumer and others
4,272

 
4,272

 

 
4,619

 
4,619

 

 
$
72,118

 
$
72,118

 
$

 
$
79,363

 
$
79,363

 
$


Summary of impaired loans:
As reported:
 
December 31, 2017
 
 Recorded Investment
 
 
 
 
(in thousands)
 With a Valuation Allowance
 
 Without a Valuation Allowance
 
 Total
 
 Year Average
 
 Total Unpaid Principal Balance
 
 Valuation Allowance
Real estate loans
 
 
 
 
 
 
 
 
 
 
 
Commercial real estate
 
 
 
 
 
 
 
 
 
 
 
Non-owner occupied
$

 
$

 
$

 
$
143

 
$

 
$

Multi-family residential

 
1,318

 
1,318

 
7,898

 
1,330

 

Land development and construction loans

 

 

 
1,359

 

 

 

 
1,318

 
1,318

 
9,400

 
1,330

 

Single-family residential

 
877

 
877

 
3,100

 
871

 

Owner-occupied

 
9,488

 
9,488

 
13,080

 
10,494

 

 

 
11,683

 
11,683

 
25,580

 
12,695

 

Commercial loans
7,173

 
3,743

 
10,916

 
18,653

 
16,940

 
2,866

 
$
7,173

 
$
15,426

 
$
22,599

 
$
44,233

 
$
29,635

 
$
2,866





14

Mercantil Bank Holding Corporation and Subsidiaries
Notes to Interim Consolidated Financial Statements (Unaudited)



Summary of impaired loans:
As revised:
 
December 31, 2017
 
 Recorded Investment
 
 
 
 
(in thousands)
 With a Valuation Allowance
 
 Without a Valuation Allowance
 
 Total
 
 Year Average
 
 Total Unpaid Principal Balance
 
 Valuation Allowance
Real estate loans
 
 
 
 
 
 
 
 
 
 
 
Commercial real estate
 
 
 
 
 
 
 
 
 
 
 
Non-owner occupied
$

 
$
327

 
$
327

 
$
225

 
$
327

 
$

Multi-family residential

 
1,318

 
1,318

 
7,898

 
1,330

 

Land development and construction loans

 

 

 
1,359

 

 

 

 
1,645

 
1,645

 
9,482

 
1,657

 

Single-family residential

 
877

 
877

 
3,100

 
871

 

Owner-occupied

 
10,918

 
10,918

 
13,440

 
12,323

 

 

 
13,440

 
13,440

 
26,022

 
14,851

 

Commercial loans
7,173

 
1,986

 
9,159

 
18,211

 
14,784

 
2,866

 
$
7,173

 
$