Mercantile Bank Corporation · NASDAQ:MBWM
Mercantile Bank — Q1 2020 Earnings Presentation
23 slides from Mercantile Bank's earnings presentation, Apr 21, 2020
Slide 1: Slide 1
Slide 2: Forward-Looking Statements
A Bank Corporation Mercantile | FORWARD-LOOKING STATEMENTS This presentation contains comments or information that may constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Any such comments are based on current expectations that involve a
Slide 3: Response to COVID-19
Amercantile | Response to COVID-19 Bank Corporation Number of Mercantile SBA PPP Applications Approved Total Dollars Approved by SBA for Mercantile Customers Total SBA Dollars Funded for Approved Mercantile Customer Applications
Slide 4: Mercantile Customer Feedback
AMercantile Customer Bank Corporation iis ding haenged that we see what “Awesome! Thank you so much, Thisis going "We realize how much tobe akey part o stresslanxity everyone is cour future success.” experiencing and then to inthis time of need” “Just wanedo sy thanks your ey wot nthis and for conti
Slide 5: Payment Relief
AMercantile payment Relief Bank Corporation Commercial, Retail and Mortgage Interest Only Amendments. # Total to Date 286,823,219 Payment Deferrals # Total to Date $ Total 74 4,359,897
Slide 6: Retail Inquiries Logged
AMercantile Retail ‘Nismiberotinquties Logged Bank Corporation Inquiries by Loan Type Grand Total
Slide 7: Past Due
A™ercantile | Past Due Bank Corporation} an age analysis of past due loans as of March 31, 2020: Fo boirco> 80 Days & ‘counting 30-S8Days 60-89Days > 89Days Total a Gees 3 Duk ast Due oPastDue Past Duo ramercial ‘Commercial & industial 123.000 879,000 © 702.000 872,977,000 873,679,000 \Vacant Land,
Slide 8: Commercial Credit Risk Grades
ANercantile | Commercial Credit risk profiled by internal credit risk grade: commercial conte comme peal ee encase & mer Occupied Non-Owner Occupied eer tay Grades 4 $528,288 000 s2aus,o00 | $240,800 | §562,617,00 $74,923,000 sates 57 $393,028000 $27,268,000 | $258,258.00 | §260.617,00 $56,066,000 r
Slide 9: Commercial Loan Portfolio Composition
AMercantile | Commercial oan Portfolio Composition Bank Corporation Commercial Loan Portfolio by Loan Type = Commercial & Industrial = Commercial Vacant Land, Land Development, & Residential Construction = Commercial Real Estate - Owner Occupied = Commercial Real Estate - Non-Owner Occupied = Commer
Slide 10: NAICS Composition: COVID-19 Impacted Industries
A Mercantile Bank Corporation | NAICS Composition COVID-19 Impacted Industries Motor vehicle and parts dealers Hotels/Motels/Lodging Nursing & assisted living Restaurants Construction Movie TheatersiEntertainment Other Retail Miscellaneous Food & Beverage Stores Gas Stations $121,000,000 $103,000,00
Slide 11: Programs to Support Clients and Communities
AMercantile Bank Corporation | Programs to Support Clients and Communities 1% Fs eS Interest Rate @ Forgiveness + 100% Foed program, inctud st . + Dole Repayment Terms + Defer ie ars used for payrol, interest payments on mertgage, rent and ities + 75% of forgiven amounts atinbutebe to payrol + The b
Slide 12: Programs to Support Clients and Communities
ANercantile | Programs to Support Clients and Communities O Interest Rate Borrow Dollar-For-Dollar of PPP Loans 0.36% Fixed + PPP Loans Serve as Collateral O Repayment Terms 24 months Paydowns required as forgiveness payments received from SBA Paydowns required as payments made by borrower
Slide 13: Consolidated Reports of Income
A™ercantile | Consolidated Reports of Income Bank Corporatio ineien NET INCOME 10,673,000 11,824,000 Basic earnings per share $0.65 $0.72 Diluted eamings per share $0.65 $0.72 ‘Average basic shares outstanding 16,350,281 16,429,571 ‘Average diluted shares outstanding 16,351,559 16,435,176
Slide 14: Consolidated Reports of Income
A™ercantile | Consolidated Reports of Income Bank Corporation ree INTEREST INCOME Loans, including fees: 33,442,000 Investment securities 4,017,000 Other interesteaming assets 475,000 Total interest income 37,934,000 4,641,000 INTEREST EXPENSE Deposits Short-term borrowings Federal Home Loan Bank ad
Slide 15: Consolidated Reports of Income
A™ercantile | Consolidated Reports of Income Bank Corporatio ree NONINTEREST INCOME Service charges on accounts 4,222,000 4,077,000 Crecit and debit card income 1,981,000 4,337,000 Mortgage banking income 2,627,000 4,087,000 Payroll services 577,000 505,000 Eamings on bank owned ife insurance 396,00
Slide 16: Consolidated Reports of Income
A™ercantile | Consolidated Reports of Income Bank Corporatio ree NONINTEREST EXPENSE Salaries and benefits 13,528,000 13,016,000 Ocoupancy 2,059,000 41,762,000 Fumiture and equipment 778,000 635,000 Data processing costs 2,483,000 2,216,000 Other expense 4,092,000 4,202,000 Total noninterest expense
Slide 17: Consolidated Financial Highlights
A™ercantile | Consolidated Financial Highlights Bank Corporatio ree (dolarsin thousands except per share data) 2020 2019 2019 4stQir 4th Qtr 3rd Qir___and tr YIELD ON ASSETS / COST OF FUNDS Yield on loans, 469% 5.01% 5.18% Yield on securities 473% 2.90% 2.85% Yield on other interest-earning assets 1
Slide 18: Consolidated Financial Highlights
A™ercantile Bank Corpor: tio Unaudited 2019 ath Qtr Consolidated Financial Highlights 2019) 3rd Qtr 2 2nd Qtr 2019 MORTGAGE BANKING ACTIVITY Total mortgage loans originated Purchase mortgage loans originated Refinance mortgage loans originated Mortgage loans originated with intent to sell Net gain o
Slide 19: Consolidated Financial Highlights
A™ercantile | Consolidated Financial Highlights Bank Corporation Unaudited Quarterly 2020 2019 2019 2019 2019 4stQir__4thQtr 3rd Qtr__2nd Qtr_tst ir CAPITAL Tangible equity to tangible assets 10.14% 10.15% 9.67% += 9.82% += 9.419% Tier 1 leverage capital ratio 11AT% 11.28% 11.08% 11.17% 11.16% Commo
Slide 20: Consolidated Financial Highlights
A™ercantile | Consolidated Financial Highlights Bank Corporatio ree 2020 «201920192019 2019 AstQr athe ard Qtr__2ndQ@tr__tst Qtr ASSET QUALITY Gross loan charge-offs 519 174 Recoveries Net loan charge-offs (recoveries) [Net loan charge-offs (recoveries) to average loans Allowance for loan losses All
Slide 21: Consolidated Financial Highlights
A™ercantile | Consolidated Financial Highlights Bank Corpor: tio Unaudited 201920192019 ath 3rd Qir___2nd Qtr 2019 Ast Qtr NONPERFORMING ASSETS - RECONCILIATION Beginning balance 3951 4,534 Additions Other activity Retumn to performing status Principal payments Sale proceeds Loan charge-offs Valuati
Slide 22: 2020 Outlook
AMercantile | 2920 Bank Corporation PROVISION OVERHEAD EXPENSE EXPENSE FEE INCOME NET INTEREST INCOME Libor Rate @ NetLoan Growth © Employee-Related Expenses @ Volume of Loan © Loan Collection Downgrades feats PPPIPPPLF Volume: PPP Loan Forgiven @ Volume of New Nonacerual Loans Reserve Environmental
Slide 23: Thank You For Your Interest In Our Company
THANK YOU FOR YOUR INTEREST IN OUR COMPANY NASDAQ Global Select Market Symbol:, MBWM. 310 Leonard Street NW Rapids, Mi 49504 6616 406 3000 or 800,453 8700-—