Published in Finance
Robert Kaminski, president and CEO of Mercantile Bank Corp. Robert Kaminski, president and CEO of Mercantile Bank Corp. MIBIZ FILE PHOTO: Katy Batdorff

Mercantile Bank continues streak of growth in earnings, loans

BY Tuesday, April 16, 2019 03:58pm

GRAND RAPIDS — Mercantile Bank Corp. began 2019 with higher earnings and strong loan growth that it expects to continue through the year.

The Grand Rapids-based Mercantile Bank (Nasdaq: MBWM) today reported $11.8 million in net income, or 72 cents per diluted share, for the first quarter, which compares to $10.8 million, or 66 cents per diluted share, in the first three months of 2018.

The quarter included a $1.8 million one-time gain from the sale of a bank-owned life insurance claim and a gain on the sale of a former branch, while the same period a year earlier included a gain of $1.7 million from the collection of impaired commercial loans.

“The first quarter operating results represent a continuation of the robust performance delivered in 2018, which is supported by healthy loan pipelines, improved operating performance and balance sheet growth,” President and CEO Robert Kaminski told brokerage analysts during a conference call to discuss quarterly results. “Based on our sound financial condition and healthier loan pipelines, we remain confident in our ability to take advantage of opportunities for growth within our markets and deliver solid operating results through the remainder of 2019.”

The lending pipelines for Mercantile Bank “continue to be very strong,” Kaminski said.

Mercantile Bank grew total loans by $47 million during the quarter to $2.79 billion as of March 31, for an annualized growth rate of 7 percent. Commercial loans alone grew by $40 million to $2.4 billion.

Mercantile Bank wrote $125 million in commercial terms loans for new and existing clients during the quarter. At the end of the quarter, the bank had about $147 million in unfunded commitments for commercial construction and development loans that the bank largely expects to fund over the next 12 months to 18 months.

The growth rates are consistent with recent periods and should continue, said bank President Ray Reitsma. Specific growth rates in future periods will hinge on how much borrowers pay off their debt, particularly people who are selling their business.

“The unknown is how many of our assets, or how many of our customers, will choose to sell assets or their businesses and thereby provide the counterpoints to the funding that we bring to our balance sheet. But based on the events that we know right now and the activity that we have to build and replenish our pipeline, we feel very good about what’s coming up in the next quarters,” Reitsma said.

Mercantile Bank has 46 offices across the Lower Peninsula with $3.55 billion in total assets.

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