Mercantile Bank Corporation · NASDAQ:MBWM
Mercantile Bank — Q1 2021 Earnings Presentation
29 slides from Mercantile Bank's earnings presentation, Apr 20, 2021
Slide 1: Conference Call and Webcast Presentation
A Mercantile Bank Corporation CONFERENCE CALL AND WEBCAST PRESENTATION
Slide 2: Forward-Looking Statements
Forward-Looking Statements ANercantile ink Corporation This p contains staternents or that may constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements can be identified by words such as; “anticipate,” “intend,” “pla
Slide 3: A Commitment to Excellence
Bank Acommitment to excellence . . . . . Atransformational merger of equals in 2014 Ahistory of solid organic loan growth Strong asset quality Performance built on a culture dedicated to mutually beneficial relationships with customers and communities, cultivated and executed by a talented, experien
Slide 4: Strategic Initiatives
AMercantile Bank Corporation Strategic Initiatives LEVERAGE DIGITAL PEOPLE & INVESTMENTS DELIVERY CULTURE * Expand usag . * Recruit and retain tor tr ni al talen jucts and ser * Develop emerging * Cultivate new mar * Personalize the digit leaders utilizing perie knowledgeable staff . Diversity a sae
Slide 5: Forward Progress
Forward Progress AMercantile Bank Corporation CORPORATE ENVIRONMENTAL, SOCIAL RESPONSIBILITY SOCIAL, GOVERNANCE e . 1ed development of stror 1 r i t ing decision . fF ths nent Protect r iS r PF r 9 fed milli : le unity develop ii it iF Ir ff hor i c F ts a wn payr . e 1 . in support F anizatior vin
Slide 6: Non-Interest Income Strategic Initiatives: Mortgage Pipeline Applications
Non-Interest Income Strategic Initiatives AMercantile Mortgage Pipeline Trend Year-Over-Year Comparison Bank Corporation 2020 Apps 2021 Apps 1200 600 APPLICATIONS x 5 8 8 ° 8 8 ——$§$<—$——— %,
Slide 7: Non-Interest Income Strategic Initiatives: Mortgage Pipeline Volume
Non-Interest Income Strategic Initiatives AMercantile Mortgage Pipeline Trend Year-Over-Year Comparison Bank Corporation HH 2021 Volume Ml 2020 Volume == 2021 Units = = 2020 Units $120,000,000 600 $10,000,000 500 $80,000,000 400 5 a 5 $60,000,000 300 = 8 5 $40,000,000 200 $20,000,000 100 $ °
Slide 8: Product Offerings
Product Offerings AMercantile Bank Corporation Best In Class Integrated Payables v v v v Integrated Receivables v v v v Autobooks for Small Business with Electronic Invoicing & Collection Credit Card Rewards v v v v
Slide 9: Strong Credit Administration
Strong Credit Administration Mercantile has worked continuously since the end of the Great Recession to place itself in a position of strength during times of economic weakness. The maintenance of strong credit administration practices has been an integral part of that work. Loan portfolio metrics h
Slide 10: COVID-19 Activities & Timeline
COV'D-19 Activities & Timeline JANUARY 2020 = Monitoring initial reports of COVID-19 FEBRUARY 2020 * Pandemic plan activated to ensure the health and safety of our employees and customers MARCH 2020 * Branches open by appointment only (3/18) Commencement of Mercantile’s payment relief assistance pro
Slide 11: Payment Relief Assistance
Payment Relief Assistance Currently Outstanding COMMERCIAL LOANS Payment Deferrals # Total $ Total 2 $1,800,000 MORTGAGE LOANS Payment Deferrals # Total $ Total 10 $800,000 A Mercantile Bank Corporation
Slide 12: Paycheck Protection Program (PPP)
Paycheck Protection Program (PPP) 4:03) AMercantile Bank Corporation LOAN BALANCE SEGMENT = # $ # $ # $ PPP Round One 2a $553,100,000 (590) ($301,600,000) 58] $251500,000 PPP Round Two 082 __ $203.100,000 0 _1082__ __$203,100,000 NET FEE INCOME ACCRETION 2°9 Quarter 2020, $ 2,700,000 $ oO 34 Quarter
Slide 13: COVID-19 Impacted Industries
COV!|D-19 Impacted Industries AMercantile NAICS Composition* Bank Corporation COVID-19 Impacted Industries Nursing & Assisted Living $121,000,000 4.8% Hotels / Motels / Lodging $102,000,000 41% Restaurants* $82,000,000 33% Movie Theaters / Entertainment $74,000,000 29% * Excludes PPP loans # Signifi
Slide 14: Core Commercial Loan Growth
Core Commercial Loan Growth AMercantile Bank Corporation ee _ Growth Rate *«, Annualized CoreLoans $ 2,429,000,000 $ 2,512,000,000 $ +83,000,000 PPPLoans $ 365,000,000 $ 455,000,000 $ +90,000,000
Slide 15: Commercial Loan Portfolio Composition
Commercial Loan Portfolio Composition AMercantile Bank Corporation Loan Type Hi Commercial & Industrial i commercial Vacant Land Land Development & Residential Construction 1 Commercial Real Estate - Owner Occupied i commercial Real Estate - Non-Owner Occupied BB Commercial Real Estate - Multi-Famil
Slide 16: Commercial Credit Exposure
Commercial Credit Exposure ANercantile ink Corporation Credit risk profile by internal credit risk grades: Grades 1-4 $944,884,000 $22,757,000 $31,071,000 $401,697,000 $91,487,000 Grades 5-7 $31,588,000 $35,872,000 $206,249,000 $530,325,000 $55,540,000 Grades 8-9 $8,035,000 $109,000 $28,022,000 $312
Slide 17: Past Due Loans
Past Due Loans* AMercantile Bank Corporation Commerci Commercial & Industrial Vacant Land, Land Development, Residential Construction Real Estate ~ Owner Occupied Real Estate -Non-Owner Occupied Real Estate - Multi-Family & Residential Rental Total Commercial Home Equity & Other 1-4Famiy Mortgages T
Slide 18: Past Due Loans
Past Due Loans A‘ercantile 30-89 Days 90 Days & Over Total m Over 89 Days & Accruing $3,500,000 $3,000,000 $2,500,000 $2,000,000 $1,000,000 $500,000 $0 re ° 4 ce » Zr
Slide 19: Consolidated Reports of Income
Consolidated! Reports of Income AMercantile Unaudited Bank Corporation March 31,2021 March 31,2020 Net Income: $ 14239000 $ 10,673,000 Basic earnings per share $ os7 $ 0.65, Diluted earnings per share $ os7 $ 0.65 Average basic shares outstanding 16,283,044 16,350,281 Average diluted shares outstand
Slide 20: Consolidated Reports of Income
Consolidated Reports of Income Unaudited A Mercantile Bank Corporation March 31,2021 March 31,2020 INTEREST INCOME Loans, including fees $ 32,985,000 33,442,000 Investment securities 1,682,000 4,017,000 Other interest-earning assets 168,000 475,000 Total interest income 34,785,000 37,934,000 INTERES
Slide 21: Consolidated Reports of Income
Consolidated! Reports of Income AMercantile Unaudited Bank Corporation March 31, 2021 March 31, 2020 NONINTEREST INCOME Service charges on accounts $ 155,000 $ 1,222,000 Mortgage banking income 8,800,000 2,627,000 Credit and debit card income 1,678,000 1361000 Payroll services 587,000 577,000 Earnin
Slide 22: Consolidated Reports of Income
Consolidated! Reports of Income AMercantile Unaudited Bank Corporation March 31, 2021 March 3), 2020 NONINTEREST EXPENSE Salaries and benefits $ 15,086,000 $ 13,528,000 Occupancy 2,014,000 2,059,000 Furniture and equipment 889,000 778,000 Data processing costs 2,617,000 2,483,000 Other expense 4SN,0
Slide 23: Consolidated Financial Highlights
Consolidated Financial Highlights AMercantile Unaudited Bank Corporation OE ———_—_—_————_—— 2021 2020 2020 2020 2020 + Qtr 4 Qtr 39 Qtr 2r Qtr ¥ Qtr YIELD ON ASSETS / COST OF FUNDS. Yield on loans 4.03% 434% 4.03% 418% 469% Yield on securities 161% 1.69% 226% 337% 473% Yield on other interest-earnin
Slide 24: Consolidated Financial Highlights: Mortgage Banking Activity
Unaudited Consolidated Financial Highlights AMercantile Bank Corporation 2021 2020 2020 2020 2020 Qtr 4% Qtr 3 Qtr 2°4 Qtr Qtr MORTGAGE BANKING ACTIVITY. Total mortgage loans originated $ 245200 218904 237195 275,486 132,859 Purchase mortgage loans originated $ 81529 99,490 93,068 58,015 46538 Refin
Slide 25: Consolidated Financial Highlights: Asset Quality
Consolidated Financial Highlights AMercantile Unaudited Bank Corporation 2021 2020 2020 2020 2020 Qtr 4 Qtr 3 Qtr 2°4 Qtr Qtr ASSET QUALITY Gross loan charge-offs $ 53 340 124 335 40 Recoveries $ 481 234 250 153 229 Net loan charge-offs (recoveries) $ (428) 106 (126) 182 (189) Net loan charge-offs t
Slide 26: Consolidated Financial Highlights: Nonperforming Assets
Consolidated Financial Highlights AMercantile Unaudited Bank Corporation 2021 2020 2020 2020 2020 Qtr 3 Qtr 2°4 Qtr ¥ Qtr NONPERFORMING ASSETS - RECONCILIATION Beginning balance $ 4,085 4653 3,410 3,740 2,736 Additions $ né 972 1615 220 1313 Return to performing status $ (ns) ° (72) (26) (7) Princip
Slide 27: Consolidated Financial Highlights: Capital
Consolidated Financial Highlights AMercantile Unaudited Bank Corporation 2021 2020 2020 2020 2020 Qtr 4° Qtr 3° Qtr 28. Qtr Qtr CAPITAL Tangible equity to tangible assets 836% 8.89% 8.69% 874% 10:14% Tier 1 leverage capital ratio 967% 977% 9.80% 10.21% 11.47% Common equity risk-based capital ratio T
Slide 28: 2021 Forecast Considerations
202) Forecast Considerations A Mercantile Bank Corporation NET INTEREST PROVISION INCOME EXPENSE FEE INCOME
Slide 29: Thank You for Your Interest in Our Company
A Mercantile Bank Corporation THANK YOU FOR YOUR INTEREST IN OUR COMPANY