GRAND RAPIDS — Mercantile Bank Corp. today reported strong results for the second quarter, setting up the second half of 2019 for continued growth.
The Grand Rapids-based Mercantile Bank (Nasdaq: MBWM) reported $11.7 million in quarterly net income, or 71 cents per diluted share. The results compare to $9.4 million in net income, or 54 cents per diluted share, in the second quarter of 2018.
The income includes a $1.3 million gain from a bank-owned life insurance claim during the second quarter.
Mercantile Bank’s “sound financial condition,” sustained strength in commercial and residential mortgage lending, and existing loan pipelines, “give us confidence that the strong results achieved during the first six months of the year will provide the foundation for solid performance throughout the balance of 2019,” President and CEO Robert Kaminski told analysts during a conference call this morning to discuss quarterly results.
“We remain confident in our ability to optimize future growth opportunities,” Kaminski said. “Mercantile’s robust core profitability, strong capital position and healthy commercial and residential mortgage loan pipelines position us well for a solid performance for the balance of the year, despite the potentially volatile interest rate environment in which we currently operate.”
Midyear net income totaled $23.5 million, or $1.43 per diluted share, and includes $3.1 million from the sale of a former branch office. Mercantile Bank made $20.3 million, or $1.22 per diluted share, in the first six months of 2018, a period that included $1.7 million from the collection of a non-performing commercial loan.
During the second quarter, Mercantile Bank originated about $134 million in commercial term loans to new and existing borrowers, said President Ray Reitsma. The bank has originated $259 million in commercial term loans over the first half of the year.
“Our pipeline remains strong and steady as well,” with $129 million in commercial and development loans the bank expects to fund in the next 12 to 18 months, Reitsma said.
Mercantile Bank’s loans grew at an annualized rate of 9.2 percent in the second quarter. Reitsma expects loan growth to continue through the second half “at a similar pace to what we’ve done in the past,” he said.
Mercantile Bank has 46 offices across the Lower Peninsula with $3.57 billion in total assets, up 8.7 percent from a year earlier, and $2.61 billion in total deposits as of June 30.
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