GRAND RAPIDS — Mercantile Bank Corp. today reported higher earnings to end 2016, driven by strong loan growth.
The Grand Rapids-based Mercantile Bank (Nasdaq: MBWM) reported fourth quarter net income of $8 million, or 49 cents per share, versus net income of $6.4 million, or 40 cents per share, in the fourth quarter of 2015.
Full-year net income for 2016 totaled $31.9 million, or $1.96 per share. That compares to $27 million, or $1.63 per share, in the prior year.
“Based on our strong financial condition, focus on growing the loan portfolio in a disciplined manner, and current loan prospects, we enter 2017 with a strong foundation for success,” said corporate President and CEO Robert Kaminski Jr.
Mercantile said it originated about $120 million in commercial loans in the fourth quarter to new and existing borrowers and $549 million for the entire year. The bank finished the year with about $102 million in unfunded commitments for commercial construction and development loans that it expects to fund this year.
Total loans did dip slightly during the year, by $27.8 million to $2.37 billion as of Dec. 31. The decline was the result of several factors that include a $24 million reduction from one large commercial client going into syndication, a $15 million decrease in the use of a commercial line of credit, and clients paying down their debt with increased liquidity, according to bank executives.
“Although the loan portfolio slightly contracted during the fourth quarter of 2016, we are confident that solid loan growth can be achieved in future periods in light of the robust current loan pipeline and ongoing focus on identifying new lending opportunities,” said bank President Ray Reitsma. “Our efforts to meet loan growth objectives will be accompanied by a continuing emphasis on loan quality and disciplined loan pricing.”
Mercantile, which has 48 offices in central and western Lower Peninsula, ended 2016 with total assets of $3.08 billion, a 6.2-percent increase from a year earlier.