Mercantile Bank Corp. Q3 2024: $1.0B Assets, $1.06 EPS

Ticker: MBWM · Form: 10-Q · Filed: Nov 1, 2024 · CIK: 1042729

Sentiment: neutral

Topics: quarterly-report, financials, dividends, banking

TL;DR

Mercantile Bank Corp. Q3 2024: $1B assets, $1.06 EPS. Dividends paid $0.36 on Oct 10.

AI Summary

Mercantile Bank Corp. reported its Q3 2024 results, with total assets reaching $1.000 billion and total liabilities at $1.000 billion. The company's net income per share was $1.06 for the period ending September 30, 2024. Key financial figures include total equity of $16.126 million and a dividend per share of $0.36 paid on October 10, 2024.

Why It Matters

This filing provides insight into the financial health and performance of Mercantile Bank Corp. during the third quarter of 2024, impacting investors and stakeholders.

Risk Assessment

Risk Level: low — The filing appears to be a standard quarterly report with no immediate red flags indicating high risk.

Key Numbers

Key Players & Entities

FAQ

What were Mercantile Bank Corp.'s total assets and liabilities as of September 30, 2024?

As of September 30, 2024, Mercantile Bank Corp. reported total assets of $1,000,000,000 and total liabilities of $1,000,000,000.

What was the net income per share for Mercantile Bank Corp. for the period ending September 30, 2024?

The net income per share for Mercantile Bank Corp. for the period ending September 30, 2024, was $1.06.

What was the total equity of Mercantile Bank Corp. at the end of Q3 2024?

Mercantile Bank Corp.'s total equity at the end of Q3 2024 was $16,125,662.

When was the dividend of $0.36 per share paid by Mercantile Bank Corp.?

The dividend of $0.36 per share was paid on October 10, 2024.

What is the fiscal year end for Mercantile Bank Corp.?

The fiscal year end for Mercantile Bank Corp. is December 31.

Filing Stats: 4,449 words · 18 min read · ~15 pages · Grade level 17.2 · Accepted 2024-11-01 08:37:18

Filing Documents

Financial Statements

Item 1. Financial Statements Consolidated Balance Sheets (Unaudited) – September 30, 2024 and December 31, 2023 1 Consolidated Statements of Income (Unaudited) - Three and Nine Months Ended September 30, 2024 and September 30, 2023 2 Consolidated Statements of Comprehensive Income (Loss) (Unaudited) - Three and Nine Months Ended September 30, 2024 and September 30, 2023 3 Consolidated Statements of Changes in Shareholders' Equity (Unaudited) – Three and Nine Months Ended September 30, 2024 and September 30, 2023 4 Consolidated Statements of Cash Flows (Unaudited) – Nine Months Ended September 30, 2024 and September 30, 2023 8

Notes to Consolidated Financial Statements (Unaudited)

Notes to Consolidated Financial Statements (Unaudited) 10

Management's Discussion and Analysis of Financial Condition and Results of Operations

Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations 47

Quantitative and Qualitative Disclosures About Market Risk

Item 3. Quantitative and Qualitative Disclosures About Market Risk 63

Controls and Procedures

Item 4. Controls and Procedures 65 PART II. Other Information

Legal Proceedings

Item 1. Legal Proceedings 66

Risk Factors

Item 1A. Risk Factors 66

Unregistered Sales of Equity Securities and Use of Proceeds

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds 66

Defaults Upon Senior Securities

Item 3. Defaults Upon Senior Securities 66

Mine Safety Disclosures

Item 4. Mine Safety Disclosures 66

Other Information

Item 5. Other Information 66

Exhibits

Item 6. Exhibits 67

Signatures

Signatures 68 Table of Contents MERCANTILE BANK CORPORATION

--- FINANCIAL INFORMATION

PART I --- FINANCIAL INFORMATION

Financial Statements

Item 1. Financial Statements CONSOLIDATED BALANCE SHEETS (Unaudited) September 30, December 31, (Dollars in thousands) 2024 2023 ASSETS Cash and due from banks $ 87,766 $ 70,408 Interest-earning deposits 240,780 60,125 Total cash and cash equivalents 328,546 130,533 Securities available for sale 703,375 617,092 Federal Home Loan Bank stock 21,513 21,513 Mortgage loans held for sale 29,260 18,607 Loans 4,553,018 4,303,758 Allowance for credit losses ( 56,590 ) ( 49,914 ) Loans, net 4,496,428 4,253,844 Premises and equipment, net 54,230 50,928 Bank owned life insurance 86,486 85,668 Goodwill 49,473 49,473 Other assets 147,816 125,566 Total assets $ 5,917,127 $ 5,353,224 LIABILITIES AND SHAREHOLDERS' EQUITY Deposits Noninterest-bearing $ 1,182,219 $ 1,247,640 Interest-bearing 3,273,679 2,653,278 Total deposits 4,455,898 3,900,918 Securities sold under agreements to repurchase 220,936 229,734 Federal Home Loan Bank advances 417,083 467,910 Subordinated debentures 50,158 49,644 Subordinated notes 89,228 88,971 Accrued interest and other liabilities 100,513 93,902 Total liabilities 5,333,816 4,831,079 Commitments and contingent liabilities (Note 8) Shareholders' equity Preferred stock, no par value; 1,000,000 shares authorized; none issued 0 0 Common stock, no par value; 40,000,000 shares authorized; 16,142,433 shares issued and outstanding at September 30, 2024 and 16,125,662 shares issued and outstanding at December 31, 2023 298,704 295,106 Retained earnings 320,722 277,526 Accumulated other comprehensive gain (loss) ( 36,115 ) ( 50,487 ) Total shareholders' equity 583,311 522,145 Total liabilities and shareholders' equity $ 5,917,127 $ 5,353,224 See accompanying notes to consolidated financial statements. 1 Table of Contents MERCANTILE BANK CORPORATION CONSOLIDATED STATEMENTS OF INCOME (Unaudited) Three Months Three Months Nine Months Nine Months Ended

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) 1. SIGNIFICANT ACCOUNTING POLICIES Basis of Presentation : The unaudited financial statements for the nine months ended September 30, 2024 include the consolidated results of operations of Mercantile Bank Corporation and its consolidated subsidiaries. These subsidiaries include Mercantile Community Partners, LLC ("MCP") and Mercantile Bank ("our bank") and its subsidiaries, including Mercantile Insurance Center, Inc. These consolidated financial statements have been prepared in accordance with the instructions for Form 10 -Q and Item 303 (b) of Regulation S-K and do not include all disclosures required by accounting principles generally accepted in the United States of America ("GAAP") for a complete presentation of our financial condition and results of operations. In the opinion of management, the information reflects all adjustments (consisting only of normal recurring adjustments) which are necessary in order to make the financial statements not misleading and for a fair presentation of the results of operations for such periods. The results for the period ended September 30, 2024 should not be considered as indicative of results for a full year. For further information, refer to the consolidated financial statements and footnotes included in our annual report on Form 10 -K for the year ended December 31, 2023 . We have five separate business trusts that were formed to issue trust preferred securities. Subordinated debentures were issued to the trusts in return for the proceeds raised from the issuance of the trust preferred securities. The trusts are not consolidated, but instead we report the subordinated debentures issued to the trusts as a liability. Recently Issued Accounting Standards: ASU No. 2003 - 07, Segment Reporting (Topic 323 ): Improvements to Reportable Segment Disclosures. This ASU enhances disclosures of significant segment expenses by requiring entities to disclose significant segment

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) 1. SIGNIFICANT ACCOUNTING POLICIES (Continued) Debt Securities : Debt securities classified as held to maturity are carried at amortized cost when management has the positive intent and ability to hold them to maturity. Debt securities available for sale consist of bonds which might be sold prior to maturity due to a number of factors, including changes in interest rates, prepayment risks, yield, availability of alternative investments or liquidity needs. Debt securities classified as available for sale are reported at their fair value. For available for sale debt securities in an unrealized loss position, we first assess whether we intend to sell, or if it is more likely than not that we will be required to sell the security before recovery of the amortized cost basis. If either of the criteria regarding intent or requirement to sell is met, the debt security's amortized cost basis is written down to fair value through income with the establishment of an allowance. For debt securities available for sale that do not meet the aforementioned criteria, we evaluate whether any decline in fair value is due to credit loss factors. In making this assessment, we consider any changes to the rating of the security by a rating agency and adverse conditions specifically related to the issuer of the security, among other factors. If this assessment indicates that a credit loss exists, the present value of cash flows expected to be collected from the security are compared to the amortized cost basis of the security. If the present value of the cash flows expected to be collected is less than the amortized cost basis, a credit loss exists and an allowance is recorded for the credit loss, limited by the amount that the fair value is less than the amortized cost basis. Any impairment that has not been recorded through an allowance is recognized in other comprehensive income (loss). Changes in the allowance are recorded as pr

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) 1. SIGNIFICANT ACCOUNTING POLICIES (Continued) Loans Held for Sale : Mortgage loans originated and intended for sale in the secondary market are carried at the lower of aggregate cost or fair value, as determined by outstanding commitments from investors. Net unrealized losses, if any, are recorded as a valuation allowance and charged to earnings. As of September 30, 2024 and December 31, 2023 , we determined that the fair value of our mortgage loans held for sale totaled $ 29.7 million and $ 19.0 million, respectively. Mortgage loans held for sale are generally sold with servicing rights retained. Gains and losses on sales of mortgage loans are based on the difference between the selling price, which includes a gain or loss on the interest rate commitment coverage position, and the carrying value of the related loan sold, which is reduced by the cost allocated to the servicing right. Market rate risk on interest rate commitments with borrowers prior to loan closing is mitigated through forward commitments referred to as to-be-announced mortgage-backed securities. These mortgage banking activities are not designated as hedges and are carried at fair value. The net gain or loss on mortgage banking derivatives, which is generally nominal in dollar amount, is included in the gain on sale of loans and recorded as part of mortgage banking income. Allowance for Credit Losses ( "a llowance " ) : The allowance is a valuation account that is deducted from the loans' amortized cost basis to present the net amount expected to be collected on the loans. The allowance is increased by a provision for credit losses and decreased by charge-offs, net of recoveries of amounts previously charged-off. Loans are charged-off against the allowance when we believe the uncollectability of a loan balance is confirmed. The allowance is measured on a collective pool basis when similar risk characteristics exist and on an individual ba

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