Mercantile Bank Reports Mixed Q3 2024 Results with Increased Interest Income and Assets, Decline in Net Interest Income and Profitability

Mercantile Bank Corporation reported its financial results for the three and nine months ended September 30, 2024, showing a mixed performance compared to the same periods in 2023.

For the third quarter of 2024, interest income increased to $83.4 million, up 17.2% from $71.1 million in Q3 2023. However, total interest expense also rose significantly to $35.1 million, a 58.3% increase from $22.2 million in the prior year. This led to a slight decline in net interest income, which fell to $48.3 million from $49.0 million. The net interest margin decreased to 3.52%, down from 3.98% in Q3 2023. For the nine-month period, interest income reached $239 million, a 21.0% increase from $198 million, while net interest income decreased to $143 million from $145 million.

Net income for Q3 2024 was $19.6 million, or $1.22 per diluted share, compared to $20.9 million, or $1.30 per diluted share, in Q3 2023. For the nine months, net income totaled $60.0 million, down from $62.2 million in the same period last year. The decrease in profitability was attributed to increased overhead costs and a decline in net interest income.

Total noninterest income rose to $9.7 million in Q3 2024, up from $9.2 million, driven by higher mortgage banking income and treasury management fees. Noninterest expense increased to $32.3 million from $28.9 million, primarily due to higher compensation and data processing costs.

Mercantile Bank's total assets grew by $564 million to $5.92 billion as of September 30, 2024. Total loans increased by $249 million, with commercial loans rising by $233 million, reflecting an annualized growth rate of about 9%. The bank's total deposits also saw a significant increase of $555 million, totaling $4.46 billion, with a notable rise in money market accounts.

The allowance for credit losses stood at $56.6 million, representing 1.24% of total loans. Nonperforming loans increased to $9.9 million, or 0.22% of total loans, up from $3.4 million at the end of 2023.

Mercantile Bank Corporation maintained a well-capitalized status, with total shareholders' equity increasing to $583 million, supported by net income and an increase in the market value of available-for-sale securities. The bank's total risk-based capital ratio was reported at 13.9%, up from 13.4% at the end of 2023.

Overall, while Mercantile Bank Corporation experienced growth in interest income and total assets, challenges in net interest income and profitability were evident in the latest financial results.