EX-99.1 2 ex_432588.htm EXHIBIT 99.1

Exhibit 99.1

Mercantile Bank Corporation Announces Robust Third Quarter 2022 Results

Significant increase in net interest income, solid loan growth, and ongoing strength in asset quality metrics highlight quarter

GRAND RAPIDS, Mich., October 18, 2022 – Mercantile Bank Corporation (NASDAQ: MBWM) ("Mercantile") reported net income of $16.0 million, or $1.01 per diluted share, for the third quarter of 2022, compared with net income of $15.1 million, or $0.95 per diluted share, for the respective prior-year period. Net income during the first nine months of 2022 totaled $39.3 million, or $2.48 per diluted share, compared to $47.4 million, or $2.95 per diluted share, during the first nine months of 2021.

“We are very pleased with our third quarter operating results,” said Robert B. Kaminski, Jr., President and Chief Executive Officer of Mercantile. “Substantial growth in net interest income, primarily reflecting an improved net interest margin, continued loan growth, increases in certain key fee income categories and a manageable overhead cost structure, have more than offset a significantly reduced level of mortgage banking income stemming from unfavorable market conditions. Our continuing efforts to meet the credit needs of existing clients and attract new loan relationships, while adhering to our underwriting standards, have been successful as evidenced by the significant growth in commercial loans and residential mortgage loans and persistent strength in asset quality metrics. We take pride in our role as a trusted consultant and assisting our customers in dealing with the challenges posed by the current economic environment and associated operating conditions, including elevated inflation levels, supply chain disruptions, increasing interest rates, and staffing issues.”

Third quarter highlights include:

| ● | Significant increase in net interest income reflecting net interest margin expansion and loan growth

| ● | Notable increases in several key fee income categories

| ● | Substantial commercial loan and residential mortgage loan growth

| ● | Sustained strength in commercial loan pipeline

| ● | Ongoing low level of nonperforming assets, no loan charge-offs, and no loans placed on nonaccrual status

| ● | Strong capital position

Operating Results

Total revenue, which consists of net interest income and noninterest income, was $49.6 million during the third quarter of 2022, compared to $46.7 million during the prior-year third quarter. Net interest income during the current-year third quarter was $42.4 million, up $11.3 million, or approximately 36 percent, from $31.1 million during the respective 2021 period, reflecting continued earning asset growth and net interest margin expansion. Noninterest income totaled $7.3 million during the third quarter of 2022, down from $15.6 million during the third quarter of 2021 mainly due to decreased mortgage banking income and interest rate swap income, which more than offset noteworthy increases in several key fee income categories.

The net interest margin was 3.56 percent in the third quarter of 2022, up from 2.88 percent in the second quarter of 2022 and 2.71 percent in the prior-year third quarter. The yield on average earning assets was 4.04 percent during the current-year third quarter, up from 3.32 percent during the second quarter of 2022 and 3.13 percent during the third quarter of 2021. The increased yield on average earning assets primarily resulted from a higher yield on loans, a change in earning asset mix, comprised of a decrease in lower-yielding interest-earning deposits and an increase in higher-yielding loans as a percentage of earning assets, and an increased yield on other interest-earning assets. The yield on loans was 4.56 percent during the third quarter of 2022, up from 3.97 percent during the second quarter of 2022 and 4.07 percent during the prior-year third quarter mainly due to higher interest rates on variable-rate commercial loans stemming from the Federal Open Market Committee (“FOMC”) significantly raising the targeted federal funds rate in an effort to curb elevated inflation levels. The FOMC increased the targeted federal funds rate by 300 basis points during the period of March 2022 through September 2022. The increase in loan yield during the third quarter of 2022 compared to the respective 2021 period was achieved despite a significant reduction in Paycheck Protection Program net loan fee accretion. As of September 30, 2022, approximately 64 percent of the commercial loan portfolio consisted of variable-rate loans.

The cost of funds was 0.48 percent in the third quarter of 2022, up from 0.42 percent in the prior-year third quarter primarily due to higher costs of trust preferred securities and deposits, reflecting the impact of the rising interest rate environment, and the issuance of $90.0 million in subordinated notes in December of 2021 and January of 2022. Subordinated note issuance proceeds of $85.0 million were injected into Mercantile Bank as an increase to equity capital to support anticipated loan growth. The cost of funds during the current-year third quarter increased slightly from the second quarter of 2022.

The persistence of a significant volume of excess on-balance sheet liquidity, which initially surfaced in the second quarter of 2020 as a result of the COVID-19 environment, negatively impacted the yield on average earning assets by 10 basis points and 51 basis points during the third quarters of 2022 and 2021, respectively, and the net interest margin by 7 basis points and 44 basis points during the respective periods. The excess funds, consisting almost entirely of low-yielding deposits with the Federal Reserve Bank of Chicago, are mainly a product of local deposit growth and Paycheck Protection Program loan forgiveness activities.

Mercantile recorded a provision for credit losses of $2.9 million during the third quarter of 2022, compared to a provision expense of $1.9 million during the third quarter of 2021. The provision expense recorded during the current-year third quarter mainly reflected allocations necessitated by commercial loan and residential mortgage loan growth, an increased specific reserve for a distressed commercial loan relationship, and a decline in forecasted economic conditions. The provision expense recorded during the prior-year third quarter primarily reflected allocations associated with commercial loan growth. Mercantile’s adoption of Accounting Standards Update No. 2016-13, Measurement of Credit Losses on Financial Instruments, on January 1, 2022, resulted in a $0.4 million one-time reduction to the allowance for credit losses.

Noninterest income during the third quarter of 2022 was $7.3 million, compared to $15.6 million during the respective 2021 period. The lower level of noninterest income almost entirely stemmed from decreased mortgage banking income and interest rate swap income, which more than offset growth in several key fee income revenue streams, including service charges on accounts, credit and debit card income, and payroll servicing fees. Ongoing strength in purchase residential mortgage loan originations during the third quarter of 2022 partially mitigated the negative impacts of higher interest rates, lower refinance activity, a reduced sold percentage, and a decreased gain on sale rate on mortgage banking income during the period when compared to the prior-year third quarter. The residential mortgage loan sold percentage declined from approximately 69 percent during the third quarter of 2021 to about 36 percent during the current-year third quarter, in large part reflecting customers’ preferences for adjustable-rate loans in the current interest rate environment and construction loans representing a higher percentage of overall mortgage loan production.

Noninterest expense totaled $26.8 million during the third quarter of 2022, compared to $26.2 million during the prior-year third quarter. The slight growth in noninterest expense mainly resulted from increased salary costs, reflecting a larger bonus accrual and annual employee merit pay increases, which more than offset higher residential mortgage loan deferred salary costs as well as decreased residential mortgage lender commissions and associated incentives.

Mr. Kaminski commented, “Our net interest income increased substantially during the third quarter and first nine months of 2022 as a result of net interest margin expansion and loan growth, and we believe our balance sheet structure will provide for additional growth in net interest income in future periods as the FOMC is expected to continue to raise interest rates in an effort to curb inflation. We are pleased that the increase in net interest income, coupled with loan growth and increases in several key fee income categories, have outweighed the significant reduction in mortgage banking income resulting from various headwinds, including higher residential mortgage loan interest rates and the associated lower level of refinance activity. We remain focused on growing in a disciplined manner and are continually examining our operating costs to help identify further opportunities to augment efficiency.”

Balance Sheet

As of September 30, 2022, total assets were $5.02 billion, down $241 million from December 31, 2021. Total loans increased $427 million during the first nine months of 2022, reflecting growth in core commercial loans of $232 million and residential mortgage loans of $233 million, which more than offset a reduction in Paycheck Protection Program loans of $37.5 million. Core commercial loans and residential mortgage loans grew $73.6 million and $81.8 million, respectively, during the third quarter of 2022. The increases in core commercial loans during the third quarter and first nine months of 2022 equated to annualized growth rates of nearly 10 percent and 11 percent, respectively. As of September 30, 2022, unfunded commitments on commercial construction and development loans, which are expected to be funded over the next 12 to 18 months, and residential construction loans, which are anticipated to be largely funded over the next 12 months, totaled $169 million and $84.0 million, respectively. Interest-earning deposits decreased $695 million during the first nine months of 2022 as excess overnight funds were used to fund loan growth and wholesale fund maturities, as well as securities purchases. In addition, a customer’s withdrawal of a majority of funds that were deposited in late 2021 following the sale of a business, as well as other fund withdrawals by customers to make routine tax payments, contributed to the reduced level of interest-earning deposits.

Ray Reitsma, President of Mercantile Bank, noted, “Our ongoing efforts to expand the loan portfolio were once again successful and provided for solid growth in commercial loans and residential mortgage loans during the third quarter of 2022. The growth in commercial loans during the third quarter and first nine months of 2022 occurred in spite of payoffs of certain larger relationships aggregating approximately $34 million and $158 million during the respective timeframes. The payoffs stemmed from customers’ sales of businesses and assets and the refinancing of debt with U.S. government agencies, with about $27 million of the payoffs during the year-to-date period being related to customers that were enduring financial difficulties. Increases in commercial and industrial loans represented approximately one-third and one-half of the growth in commercial loans during the third quarter and first nine months of the current year, respectively, affording our sales team additional opportunities to market treasury management products and enhance commercial banking-related income. We are pleased with the level of residential mortgage loan production, especially when considering the ongoing headwinds that have limited market opportunities. We believe the continuing strength of our commercial loan pipeline and solid levels of credit availability on commercial construction and development loans and residential mortgage construction loans provide momentum as we conclude 2022 and head into 2023.”

Commercial and industrial loans and owner-occupied commercial real estate loans together represented approximately 59 percent of total commercial loans as of September 30, 2022, a level that has remained relatively consistent with prior periods and in line with our expectations.

Total deposits at September 30, 2022, were $3.85 billion, down $237 million, or 5.8 percent, from December 31, 2021. Local deposits and brokered deposits decreased $213 million and $23.9 million, respectively, during the first nine months of 2022. The decline in local deposits primarily reflected the previously mentioned customer withdrawal of funds and customers’ normal tax payment levels. Wholesale funds were $338 million, or approximately 8 percent of total funds, at September 30, 2022, compared to $398 million, or approximately 9 percent of total funds, at December 31, 2021.

Asset Quality

Nonperforming assets totaled $1.4 million, $2.5 million, and $2.9 million at September 30, 2022, December 31, 2021, and September 30, 2021, respectively, with each dollar amount representing less than 0.1 percent of total assets as of the respective dates. The level of past due loans remains nominal. During the third quarter of 2022, no loan charge-offs were recorded, while recoveries of prior period loan charge-offs were $0.2 million, providing for net loan recoveries of $0.2 million, or an annualized 0.03 percent of average total loans.

Mr. Reitsma commented, “Our unwavering focus on sound loan underwriting has enabled us to once again report strong asset quality metrics. As our borrowers continue to operate in an economic environment full of challenges, including elevated levels of inflation, unfavorable labor market conditions, and ongoing supply chain issues, we remain committed to diligently monitoring our loan portfolio for any signals of deterioration and quickly implementing corrective measures to alleviate the impact of any identified credit weakness on our overall financial condition.”

Capital Position

Shareholders’ equity totaled $416 million as of September 30, 2022, down from $457 million at year-end 2021 mainly due to a $68.7 million increase in the after-tax net unrealized holding loss on securities available for sale resulting from higher market interest rates. Mercantile Bank’s capital position remains “well-capitalized” with a total risk-based capital ratio of 13.4 percent as of September 30, 2022, compared to 13.6 percent at December 31, 2021. At September 30, 2022, Mercantile Bank had approximately $150 million in excess of the 10.0 percent minimum regulatory threshold required to be considered a “well-capitalized” institution. Mercantile reported 15,866,243 total shares outstanding at September 30, 2022.

Mr. Kaminski concluded, “Our sustained financial strength has allowed us to continue our regular cash dividend program and provide shareholders with competitive returns on their investments while supporting the ongoing growth in our loan portfolio. In light of our strong overall financial condition, including solid capital levels, outstanding asset quality metrics, robust operating performance, including the possibility of augmenting net interest income from probable further FOMC rate hikes, and considerable loan origination opportunities, we believe we are well positioned to withstand the negative impacts associated with a likely weakened economic environment. We remain focused on being a consistent and profitable performer.”

Investor Presentation

Mercantile has prepared presentation materials that management intends to use during its previously announced third quarter 2022 conference call on Tuesday, October 18, 2022, at 10:00 a.m. Eastern Time, and from time to time thereafter in presentations about the Company’s operations and performance. These materials have been furnished to the U.S. Securities and Exchange Commission concurrently with this press release, and are also available on Mercantile’s website at www.mercbank.com.

About Mercantile Bank Corporation

Based in Grand Rapids, Michigan, Mercantile Bank Corporation is the bank holding company for Mercantile Bank. Mercantile provides banking services to businesses, individuals and governmental units, and differentiates itself on the basis of service quality and the expertise of its banking staff. Mercantile has assets of approximately $5.0 billion and operates 46 banking offices. Mercantile Bank Corporation’s common stock is listed on the NASDAQ Global Select Market under the symbol “MBWM.” For more information about Mercantile, visit www.mercbank.com, and follow us on Facebook, Instagram and Twitter @MercBank and on LinkedIn at www.linkedin.com/company/merc-bank.

Forward-Looking Statements

This news release contains statements or information 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,” “plan,” “goal,” “seek,” “believe,” “project,” “estimate,” “expect,” “strategy,” “future,” “likely,” “may,” “should,” “will,” and similar references to future periods. Any such statements are based on current expectations that involve a number of risks and uncertainties. Actual results may differ materially from the results expressed in forward-looking statements. Factors that might cause such a difference include changes in interest rates and interest rate relationships; increasing rates of inflation and slower growth rates; significant declines in the value of commercial real estate; market volatility; demand for products and services; the degree of competition by traditional and nontraditional financial services companies; changes in banking regulation or actions by bank regulators; changes in tax laws; changes in prices, levies, and assessments; the impact of technological advances; potential cyber-attacks, information security breaches and other criminal activities; litigation liabilities; governmental and regulatory policy changes; the outcomes of existing or future contingencies; trends in customer behavior as well as their ability to repay loans; changes in local real estate values; damage to our reputation resulting from adverse publicity, regulatory actions, litigation, operational failures, and the failure to meet client expectations and other facts; changes in the method of determining Libor and the phase-out of Libor; changes in the national and local economies, including the ongoing disruption to financial markets and other economic activity caused by the COVID-19 pandemic and unstable political and economic environments; and other factors, including those expressed as risk factors, disclosed from time to time in filings made by Mercantile with the Securities and Exchange Commission. Mercantile undertakes no obligation to update or clarify forward-looking statements, whether as a result of new information, future events or otherwise. Investors are cautioned not to place undue reliance on any forward-looking statements contained herein.

FOR FURTHER INFORMATION:

| Robert B. Kaminski, Jr. |  | Charles Christmas
| President and CEO |  | Executive Vice President and CFO
| 616-726-1502 |  | 616-726-1202
| rkaminski@mercbank.com |  | cchristmas@mercbank.com

MERCANTILE BANK CORPORATION
CONSOLIDATED BALANCE SHEETS
(Unaudited)

|  | SEPTEMBER 30, |  |  | DECEMBER 31, |  |  | SEPTEMBER 30, |
|  | 2022 |  |  | 2021 |  |  | 2021 |
ASSETS |  |  |  |  |  |  |  |  |  |  |  |
Cash and due from banks |  | $ | 63,105,000 |  |  | $ | 59,405,000 |  |  | $ | 83,804,000 |
Interest-earning deposits |  |  | 220,909,000 |  |  |  | 915,755,000 |  |  |  | 741,557,000 |
Total cash and cash equivalents |  |  | 284,014,000 |  |  |  | 975,160,000 |  |  |  | 825,361,000 |
Securities available for sale |  |  | 582,999,000 |  |  |  | 592,743,000 |  |  |  | 559,564,000 |
Federal Home Loan Bank stock |  |  | 17,721,000 |  |  |  | 18,002,000 |  |  |  | 18,002,000 |
Mortgage loans held for sale |  |  | 14,411,000 |  |  |  | 16,117,000 |  |  |  | 47,247,000 |
Loans |  |  | 3,880,958,000 |  |  |  | 3,453,459,000 |  |  |  | 3,313,709,000 |
Allowance for credit losses |  |  | (39,120,000 | ) |  |  | (35,363,000 | ) |  |  | (37,423,000 | )
Loans, net |  |  | 3,841,838,000 |  |  |  | 3,418,096,000 |  |  |  | 3,276,286,000 |
Premises and equipment, net |  |  | 52,117,000 |  |  |  | 57,298,000 |  |  |  | 57,465,000 |
Bank owned life insurance |  |  | 75,880,000 |  |  |  | 75,242,000 |  |  |  | 72,963,000 |
Goodwill |  |  | 49,473,000 |  |  |  | 49,473,000 |  |  |  | 49,473,000 |
Core deposit intangible, net |  |  | 741,000 |  |  |  | 1,351,000 |  |  |  | 1,589,000 |
Other assets |  |  | 97,740,000 |  |  |  | 54,267,000 |  |  |  | 56,462,000 |
Total assets |  | $ | 5,016,934,000 |  |  | $ | 5,257,749,000 |  |  | $ | 4,964,412,000 |
LIABILITIES AND SHAREHOLDERS' EQUITY |  |  |  |  |  |  |  |  |  |  |  |
Deposits: |  |  |  |  |  |  |  |  |  |  |  |
Noninterest-bearing |  | $ | 1,716,904,000 |  |  | $ | 1,677,952,000 |  |  | $ | 1,647,380,000 |
Interest-bearing |  |  | 2,129,181,000 |  |  |  | 2,405,241,000 |  |  |  | 2,221,611,000 |
Total deposits |  |  | 3,846,085,000 |  |  |  | 4,083,193,000 |  |  |  | 3,868,991,000 |
Securities sold under agreements to repurchase |  |  | 198,605,000 |  |  |  | 197,463,000 |  |  |  | 175,850,000 |
Federal Home Loan Bank advances |  |  | 338,263,000 |  |  |  | 374,000,000 |  |  |  | 394,000,000 |
Subordinated debentures |  |  | 48,787,000 |  |  |  | 48,244,000 |  |  |  | 48,074,000 |
Subordinated notes |  |  | 88,542,000 |  |  |  | 73,646,000 |  |  |  | 0 |
Accrued interest and other liabilities |  |  | 80,391,000 |  |  |  | 24,644,000 |  |  |  | 25,219,000 |
Total liabilities |  |  | 4,600,673,000 |  |  |  | 4,801,190,000 |  |  |  | 4,512,134,000 |
SHAREHOLDERS' EQUITY |  |  |  |  |  |  |  |  |  |  |  |
Common stock |  |  | 289,219,000 |  |  |  | 285,752,000 |  |  |  | 285,033,000 |
Retained earnings |  |  | 199,505,000 |  |  |  | 174,536,000 |  |  |  | 167,541,000 |
Accumulated other comprehensive income/(loss) |  |  | (72,463,000 | ) |  |  | (3,729,000 | ) |  |  | (296,000 | )
Total shareholders' equity |  |  | 416,261,000 |  |  |  | 456,559,000 |  |  |  | 452,278,000 |
Total liabilities and shareholders' equity |  | $ | 5,016,934,000 |  |  | $ | 5,257,749,000 |  |  | $ | 4,964,412,000 |

MERCANTILE BANK CORPORATION
CONSOLIDATED REPORTS OF INCOME
(Unaudited)

|  | THREE MONTHS ENDED |  |  | THREE MONTHS ENDED |  |  | NINE MONTHS ENDED |  |  | NINE MONTHS ENDED |
|  | September 30, 2022 |  |  | September 30, 2021 |  |  | September 30, 2022 |  |  | September 30, 2021 |
INTEREST INCOME |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Loans, including fees |  | $ | 43,807,000 |  |  | $ | 33,656,000 |  |  | $ | 113,061,000 |  |  | $ | 100,430,000 |
Investment securities |  |  | 2,702,000 |  |  |  | 1,941,000 |  |  |  | 7,496,000 |  |  |  | 5,375,000 |
Other interest-earning assets |  |  | 1,620,000 |  |  |  | 291,000 |  |  |  | 3,004,000 |  |  |  | 642,000 |
Total interest income |  |  | 48,129,000 |  |  |  | 35,888,000 |  |  |  | 123,561,000 |  |  |  | 106,447,000 |
INTEREST EXPENSE |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Deposits |  |  | 2,299,000 |  |  |  | 2,184,000 |  |  |  | 5,997,000 |  |  |  | 7,247,000 |
Short-term borrowings |  |  | 53,000 |  |  |  | 46,000 |  |  |  | 153,000 |  |  |  | 122,000 |
Federal Home Loan Bank advances |  |  | 1,755,000 |  |  |  | 2,072,000 |  |  |  | 5,530,000 |  |  |  | 6,149,000 |
Other borrowed money |  |  | 1,646,000 |  |  |  | 462,000 |  |  |  | 4,294,000 |  |  |  | 1,401,000 |
Total interest expense |  |  | 5,753,000 |  |  |  | 4,764,000 |  |  |  | 15,974,000 |  |  |  | 14,919,000 |
Net interest income |  |  | 42,376,000 |  |  |  | 31,124,000 |  |  |  | 107,587,000 |  |  |  | 91,528,000 |
Provision for credit losses |  |  | 2,900,000 |  |  |  | 1,900,000 |  |  |  | 3,500,000 |  |  |  | (900,000 | )
Net interest income after provision for credit losses |  |  | 39,476,000 |  |  |  | 29,224,000 |  |  |  | 104,087,000 |  |  |  | 92,428,000 |
NONINTEREST INCOME |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Service charges on accounts |  |  | 1,579,000 |  |  |  | 1,324,000 |  |  |  | 4,489,000 |  |  |  | 3,687,000 |
Credit and debit card income |  |  | 2,086,000 |  |  |  | 1,947,000 |  |  |  | 6,101,000 |  |  |  | 5,545,000 |
Mortgage banking income |  |  | 1,764,000 |  |  |  | 6,554,000 |  |  |  | 6,991,000 |  |  |  | 23,049,000 |
Interest rate swap income |  |  | 566,000 |  |  |  | 3,938,000 |  |  |  | 2,347,000 |  |  |  | 6,086,000 |
Payroll services |  |  | 533,000 |  |  |  | 412,000 |  |  |  | 1,635,000 |  |  |  | 1,374,000 |
Earnings on bank owned life insurance |  |  | 238,000 |  |  |  | 298,000 |  |  |  | 1,310,000 |  |  |  | 872,000 |
Gain on sale of branch |  |  | 0 |  |  |  | 0 |  |  |  | 0 |  |  |  | 1,058,000 |
Other income |  |  | 487,000 |  |  |  | 1,095,000 |  |  |  | 1,399,000 |  |  |  | 1,916,000 |
Total noninterest income |  |  | 7,253,000 |  |  |  | 15,568,000 |  |  |  | 24,272,000 |  |  |  | 43,587,000 |
NONINTEREST EXPENSE |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Salaries and benefits |  |  | 16,656,000 |  |  |  | 15,975,000 |  |  |  | 47,842,000 |  |  |  | 47,255,000 |
Occupancy |  |  | 2,001,000 |  |  |  | 2,030,000 |  |  |  | 6,168,000 |  |  |  | 6,021,000 |
Furniture and equipment |  |  | 953,000 |  |  |  | 929,000 |  |  |  | 2,822,000 |  |  |  | 2,719,000 |
Data processing costs |  |  | 3,139,000 |  |  |  | 2,746,000 |  |  |  | 9,203,000 |  |  |  | 8,138,000 |
Charitable foundation contribution |  |  | 4,000 |  |  |  | 0 |  |  |  | 509,000 |  |  |  | 0 |
Other expense |  |  | 4,003,000 |  |  |  | 4,530,000 |  |  |  | 12,896,000 |  |  |  | 13,386,000 |
Total noninterest expense |  |  | 26,756,000 |  |  |  | 26,210,000 |  |  |  | 79,440,000 |  |  |  | 77,519,000 |
Income before federal income tax expense |  |  | 19,973,000 |  |  |  | 18,582,000 |  |  |  | 48,919,000 |  |  |  | 58,496,000 |
Federal income tax expense |  |  | 3,943,000 |  |  |  | 3,531,000 |  |  |  | 9,659,000 |  |  |  | 11,114,000 |
Net Income |  | $ | 16,030,000 |  |  | $ | 15,051,000 |  |  | $ | 39,260,000 |  |  | $ | 47,382,000 |
Basic earnings per share |  | $ | 1.01 |  |  | $ | 0.95 |  |  | $ | 2.48 |  |  | $ | 2.95 |
Diluted earnings per share |  | $ | 1.01 |  |  | $ | 0.95 |  |  | $ | 2.48 |  |  | $ | 2.95 |
Average basic shares outstanding |  |  | 15,861,551 |  |  |  | 15,859,955 |  |  |  | 15,850,422 |  |  |  | 16,084,806 |
Average diluted shares outstanding |  |  | 15,861,551 |  |  |  | 15,860,314 |  |  |  | 15,850,439 |  |  |  | 16,085,274 |

MERCANTILE BANK CORPORATION
CONSOLIDATED FINANCIAL HIGHLIGHTS
(Unaudited)

|  | Quarterly |  |  | Year-To-Date |
(dollars in thousands except per share data) |  | 2022 |  |  | 2022 |  |  | 2022 |  |  | 2021 |  |  | 2021 |  |  |  |  |  |  |  |  |
|  | 3rd Qtr |  |  | 2nd Qtr |  |  | 1st Qtr |  |  | 4th Qtr |  |  | 3rd Qtr |  |  | 2022 |  |  | 2021 |
EARNINGS |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Net interest income |  | $ | 42,376 |  |  |  | 34,326 |  |  |  | 30,885 |  |  |  | 32,534 |  |  |  | 31,124 |  |  |  | 107,587 |  |  |  | 91,528 |
Provision for credit losses |  | $ | 2,900 |  |  |  | 500 |  |  |  | 100 |  |  |  | (3,400 | ) |  |  | 1,900 |  |  |  | 3,500 |  |  |  | (900 | )
Noninterest income |  | $ | 7,253 |  |  |  | 7,741 |  |  |  | 9,277 |  |  |  | 12,632 |  |  |  | 15,568 |  |  |  | 24,272 |  |  |  | 43,587 |
Noninterest expense |  | $ | 26,756 |  |  |  | 26,942 |  |  |  | 25,742 |  |  |  | 33,347 |  |  |  | 26,210 |  |  |  | 79,440 |  |  |  | 77,519 |
Net income before federal income tax expense |  | $ | 19,973 |  |  |  | 14,625 |  |  |  | 14,320 |  |  |  | 15,219 |  |  |  | 18,582 |  |  |  | 48,919 |  |  |  | 58,496 |
Net income |  | $ | 16,030 |  |  |  | 11,737 |  |  |  | 11,492 |  |  |  | 11,639 |  |  |  | 15,051 |  |  |  | 39,260 |  |  |  | 47,382 |
Basic earnings per share |  | $ | 1.01 |  |  |  | 0.74 |  |  |  | 0.73 |  |  |  | 0.74 |  |  |  | 0.95 |  |  |  | 2.48 |  |  |  | 2.95 |
Diluted earnings per share |  | $ | 1.01 |  |  |  | 0.74 |  |  |  | 0.73 |  |  |  | 0.74 |  |  |  | 0.95 |  |  |  | 2.48 |  |  |  | 2.95 |
Average basic shares outstanding |  |  | 15,861,551 |  |  |  | 15,848,681 |  |  |  | 15,840,801 |  |  |  | 15,696,204 |  |  |  | 15,859,955 |  |  |  | 15,850,422 |  |  |  | 16,084,806 |
Average diluted shares outstanding |  |  | 15,861,551 |  |  |  | 15,848,681 |  |  |  | 15,841,037 |  |  |  | 15,696,451 |  |  |  | 15,860,314 |  |  |  | 15,850,439 |  |  |  | 16,085,274 |
PERFORMANCE RATIOS |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Return on average assets |  |  | 1.27 | % |  |  | 0.93 | % |  |  | 0.90 | % |  |  | 0.92 | % |  |  | 1.23 | % |  |  | 1.03 | % |  |  | 1.34 | %
Return on average equity |  |  | 14.79 | % |  |  | 10.98 | % |  |  | 10.36 | % |  |  | 10.15 | % |  |  | 13.10 | % |  |  | 12.03 | % |  |  | 14.12 | %
Net interest margin (fully tax-equivalent) |  |  | 3.56 | % |  |  | 2.88 | % |  |  | 2.57 | % |  |  | 2.74 | % |  |  | 2.71 | % |  |  | 3.00 | % |  |  | 2.76 | %
Efficiency ratio |  |  | 53.91 | % |  |  | 64.05 | % |  |  | 64.10 | % |  |  | 73.83 | % |  |  | 56.13 | % |  |  | 60.25 | % |  |  | 57.37 | %
Full-time equivalent employees |  |  | 635 |  |  |  | 651 |  |  |  | 630 |  |  |  | 627 |  |  |  | 629 |  |  |  | 635 |  |  |  | 629 |
YIELD ON ASSETS / COST OF FUNDS |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Yield on loans |  |  | 4.56 | % |  |  | 3.97 | % |  |  | 3.87 | % |  |  | 4.07 | % |  |  | 4.07 | % |  |  | 4.15 | % |  |  | 4.06 | %
Yield on securities |  |  | 1.79 | % |  |  | 1.68 | % |  |  | 1.52 | % |  |  | 1.46 | % |  |  | 1.46 | % |  |  | 1.66 | % |  |  | 1.53 | %
Yield on other interest-earning assets |  |  | 2.15 | % |  |  | 0.76 | % |  |  | 0.19 | % |  |  | 0.15 | % |  |  | 0.16 | % |  |  | 0.75 | % |  |  | 0.13 | %
Yield on total earning assets |  |  | 4.04 | % |  |  | 3.32 | % |  |  | 2.99 | % |  |  | 3.12 | % |  |  | 3.13 | % |  |  | 3.45 | % |  |  | 3.21 | %
Yield on total assets |  |  | 3.80 | % |  |  | 3.13 | % |  |  | 2.82 | % |  |  | 2.94 | % |  |  | 2.94 | % |  |  | 3.25 | % |  |  | 3.01 | %
Cost of deposits |  |  | 0.24 | % |  |  | 0.19 | % |  |  | 0.19 | % |  |  | 0.19 | % |  |  | 0.23 | % |  |  | 0.20 | % |  |  | 0.26 | %
Cost of borrowed funds |  |  | 1.99 | % |  |  | 1.90 | % |  |  | 1.82 | % |  |  | 1.66 | % |  |  | 1.67 | % |  |  | 1.90 | % |  |  | 1.72 | %
Cost of interest-bearing liabilities |  |  | 0.81 | % |  |  | 0.72 | % |  |  | 0.66 | % |  |  | 0.63 | % |  |  | 0.69 | % |  |  | 0.73 | % |  |  | 0.75 | %
Cost of funds (total earning assets) |  |  | 0.48 | % |  |  | 0.44 | % |  |  | 0.42 | % |  |  | 0.38 | % |  |  | 0.42 | % |  |  | 0.45 | % |  |  | 0.45 | %
Cost of funds (total assets) |  |  | 0.45 | % |  |  | 0.41 | % |  |  | 0.39 | % |  |  | 0.36 | % |  |  | 0.39 | % |  |  | 0.42 | % |  |  | 0.42 | %
MORTGAGE BANKING ACTIVITY |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Total mortgage loans originated |  | $ | 163,902 |  |  |  | 190,896 |  |  |  | 168,187 |  |  |  | 210,228 |  |  |  | 259,512 |  |  |  | 522,985 |  |  |  | 742,011 |
Purchase mortgage loans originated |  | $ | 140,898 |  |  |  | 157,423 |  |  |  | 101,409 |  |  |  | 124,557 |  |  |  | 143,635 |  |  |  | 399,730 |  |  |  | 369,640 |
Refinance mortgage loans originated |  | $ | 23,004 |  |  |  | 33,473 |  |  |  | 66,778 |  |  |  | 85,671 |  |  |  | 115,877 |  |  |  | 123,255 |  |  |  | 372,371 |
Total saleable mortgage loans |  | $ | 59,740 |  |  |  | 52,328 |  |  |  | 75,747 |  |  |  | 129,546 |  |  |  | 177,837 |  |  |  | 187,815 |  |  |  | 513,989 |
Income on sale of mortgage loans |  | $ | 1,779 |  |  |  | 1,751 |  |  |  | 3,204 |  |  |  | 6,850 |  |  |  | 6,659 |  |  |  | 6,734 |  |  |  | 23,531 |
CAPITAL |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Tangible equity to tangible assets |  |  | 7.37 | % |  |  | 7.56 | % |  |  | 7.53 | % |  |  | 7.79 | % |  |  | 8.17 | % |  |  | 7.37 | % |  |  | 8.17 | %
Tier 1 leverage capital ratio |  |  | 9.63 | % |  |  | 9.31 | % |  |  | 9.04 | % |  |  | 9.19 | % |  |  | 9.33 | % |  |  | 9.63 | % |  |  | 9.33 | %
Common equity risk-based capital ratio |  |  | 9.81 | % |  |  | 9.84 | % |  |  | 10.02 | % |  |  | 10.12 | % |  |  | 10.34 | % |  |  | 9.81 | % |  |  | 10.34 | %
Tier 1 risk-based capital ratio |  |  | 10.86 | % |  |  | 10.91 | % |  |  | 11.13 | % |  |  | 11.26 | % |  |  | 11.53 | % |  |  | 10.86 | % |  |  | 11.53 | %
Total risk-based capital ratio |  |  | 13.71 | % |  |  | 13.78 | % |  |  | 14.09 | % |  |  | 13.95 | % |  |  | 12.47 | % |  |  | 13.71 | % |  |  | 12.47 | %
Tier 1 capital |  | $ | 485,499 |  |  |  | 473,065 |  |  |  | 464,396 |  |  |  | 456,133 |  |  |  | 448,010 |  |  |  | 485,499 |  |  |  | 448,010 |
Tier 1 plus tier 2 capital |  | $ | 613,161 |  |  |  | 597,495 |  |  |  | 587,976 |  |  |  | 565,143 |  |  |  | 484,594 |  |  |  | 613,161 |  |  |  | 484,594 |
Total risk-weighted assets |  | $ | 4,471,939 |  |  |  | 4,337,040 |  |  |  | 4,173,590 |  |  |  | 4,051,253 |  |  |  | 3,884,999 |  |  |  | 4,471,939 |  |  |  | 3,884,999 |
Book value per common share |  | $ | 26.24 |  |  |  | 27.05 |  |  |  | 27.55 |  |  |  | 28.82 |  |  |  | 28.78 |  |  |  | 26.24 |  |  |  | 28.78 |
Tangible book value per common share |  | $ | 23.07 |  |  |  | 23.87 |  |  |  | 24.36 |  |  |  | 25.61 |  |  |  | 25.53 |  |  |  | 23.07 |  |  |  | 25.53 |
Cash dividend per common share |  | $ | 0.32 |  |  |  | 0.31 |  |  |  | 0.31 |  |  |  | 0.30 |  |  |  | 0.30 |  |  |  | 0.94 |  |  |  | 0.88 |
ASSET QUALITY |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Gross loan charge-offs |  | $ | 0 |  |  |  | 15 |  |  |  | 205 |  |  |  | 179 |  |  |  | 744 |  |  |  | 220 |  |  |  | 865 |
Recoveries |  | $ | 246 |  |  |  | 336 |  |  |  | 294 |  |  |  | 1,519 |  |  |  | 354 |  |  |  | 876 |  |  |  | 1,221 |
Net loan charge-offs (recoveries) |  | $ | (246 | ) |  |  | (321 | ) |  |  | (89 | ) |  |  | (1,340 | ) |  |  | 390 |  |  |  | (656 | ) |  |  | (356 | )
Net loan charge-offs to average loans |  |  | (0.03% | ) |  |  | (0.04% | ) |  |  | (0.01% | ) |  |  | (0.16% | ) |  |  | 0.05 | % |  |  | (0.02% | ) |  |  | (0.01% | )
Allowance for credit losses |  | $ | 39,120 |  |  |  | 35,974 |  |  |  | 35,153 |  |  |  | 35,363 |  |  |  | 37,423 |  |  |  | 39,120 |  |  |  | 37,423 |
Allowance to loans |  |  | 1.01 | % |  |  | 0.97 | % |  |  | 0.99 | % |  |  | 1.02 | % |  |  | 1.13 | % |  |  | 1.01 | % |  |  | 1.13 | %
Nonperforming loans |  | $ | 1,416 |  |  |  | 1,787 |  |  |  | 1,612 |  |  |  | 2,468 |  |  |  | 2,766 |  |  |  | 1,416 |  |  |  | 2,766 |
Other real estate/repossessed assets |  | $ | 0 |  |  |  | 0 |  |  |  | 0 |  |  |  | 0 |  |  |  | 111 |  |  |  | 0 |  |  |  | 111 |
Nonperforming loans to total loans |  |  | 0.04 | % |  |  | 0.05 | % |  |  | 0.05 | % |  |  | 0.07 | % |  |  | 0.08 | % |  |  | 0.04 | % |  |  | 0.08 | %
Nonperforming assets to total assets |  |  | 0.03 | % |  |  | 0.04 | % |  |  | 0.03 | % |  |  | 0.05 | % |  |  | 0.06 | % |  |  | 0.03 | % |  |  | 0.06 | %
NONPERFORMING ASSETS - COMPOSITION |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Residential real estate: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Land development |  | $ | 30 |  |  |  | 30 |  |  |  | 31 |  |  |  | 32 |  |  |  | 33 |  |  |  | 30 |  |  |  | 33 |
Construction |  | $ | 0 |  |  |  | 0 |  |  |  | 0 |  |  |  | 0 |  |  |  | 0 |  |  |  | 0 |  |  |  | 0 |
Owner occupied / rental |  | $ | 1,138 |  |  |  | 1,508 |  |  |  | 1,579 |  |  |  | 1,768 |  |  |  | 2,063 |  |  |  | 1,138 |  |  |  | 2,063 |
Commercial real estate: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Land development |  | $ | 0 |  |  |  | 0 |  |  |  | 0 |  |  |  | 0 |  |  |  | 0 |  |  |  | 0 |  |  |  | 0 |
Construction |  | $ | 0 |  |  |  | 0 |  |  |  | 0 |  |  |  | 0 |  |  |  | 0 |  |  |  | 0 |  |  |  | 0 |
Owner occupied |  | $ | 0 |  |  |  | 0 |  |  |  | 0 |  |  |  | 0 |  |  |  | 100 |  |  |  | 0 |  |  |  | 100 |
Non-owner occupied |  | $ | 0 |  |  |  | 0 |  |  |  | 0 |  |  |  | 0 |  |  |  | 0 |  |  |  | 0 |  |  |  | 0 |
Non-real estate: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Commercial assets |  | $ | 248 |  |  |  | 248 |  |  |  | 0 |  |  |  | 662 |  |  |  | 673 |  |  |  | 248 |  |  |  | 673 |
Consumer assets |  | $ | 0 |  |  |  | 1 |  |  |  | 2 |  |  |  | 6 |  |  |  | 8 |  |  |  | 0 |  |  |  | 8 |
Total nonperforming assets |  |  | 1,416 |  |  |  | 1,787 |  |  |  | 1,612 |  |  |  | 2,468 |  |  |  | 2,877 |  |  |  | 1,416 |  |  |  | 2,877 |
NONPERFORMING ASSETS - RECON |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Beginning balance |  | $ | 1,787 |  |  |  | 1,612 |  |  |  | 2,468 |  |  |  | 2,877 |  |  |  | 3,150 |  |  |  | 2,468 |  |  |  | 4,085 |
Additions |  | $ | 0 |  |  |  | 309 |  |  |  | 93 |  |  |  | 218 |  |  |  | 361 |  |  |  | 402 |  |  |  | 999 |
Return to performing status |  | $ | (160 | ) |  |  | 0 |  |  |  | (213 | ) |  |  | 0 |  |  |  | (50 | ) |  |  | (373 | ) |  |  | (165 | )
Principal payments |  | $ | (211 | ) |  |  | (134 | ) |  |  | (641 | ) |  |  | (377 | ) |  |  | (291 | ) |  |  | (986 | ) |  |  | (1,334 | )
Sale proceeds |  | $ | 0 |  |  |  | 0 |  |  |  | 0 |  |  |  | (111 | ) |  |  | (209 | ) |  |  | 0 |  |  |  | (286 | )
Loan charge-offs |  | $ | 0 |  |  |  | 0 |  |  |  | (95 | ) |  |  | (139 | ) |  |  | 0 |  |  |  | (95 | ) |  |  | (88 | )
Valuation write-downs |  | $ | 0 |  |  |  | 0 |  |  |  | 0 |  |  |  | 0 |  |  |  | (84 | ) |  |  | 0 |  |  |  | (334 | )
Ending balance |  | $ | 1,416 |  |  |  | 1,787 |  |  |  | 1,612 |  |  |  | 2,468 |  |  |  | 2,877 |  |  |  | 1,416 |  |  |  | 2,877 |
LOAN PORTFOLIO COMPOSITION |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Commercial: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Commercial & industrial |  | $ | 1,213,630 |  |  |  | 1,187,650 |  |  |  | 1,153,814 |  |  |  | 1,137,419 |  |  |  | 1,074,394 |  |  |  | 1,213,630 |  |  |  | 1,074,394 |
Land development & construction |  | $ | 60,970 |  |  |  | 57,808 |  |  |  | 52,693 |  |  |  | 43,240 |  |  |  | 38,380 |  |  |  | 60,970 |  |  |  | 38,380 |
Owner occupied comm'l R/E |  | $ | 643,577 |  |  |  | 598,593 |  |  |  | 582,732 |  |  |  | 565,758 |  |  |  | 551,762 |  |  |  | 643,577 |  |  |  | 551,762 |
Non-owner occupied comm'l R/E |  | $ | 1,002,638 |  |  |  | 1,003,118 |  |  |  | 1,007,361 |  |  |  | 1,027,415 |  |  |  | 998,697 |  |  |  | 1,002,638 |  |  |  | 998,697 |
Multi-family & residential rental |  | $ | 224,247 |  |  |  | 224,591 |  |  |  | 207,962 |  |  |  | 176,593 |  |  |  | 179,126 |  |  |  | 224,247 |  |  |  | 179,126 |
Total commercial |  | $ | 3,145,062 |  |  |  | 3,071,760 |  |  |  | 3,004,562 |  |  |  | 2,950,425 |  |  |  | 2,842,359 |  |  |  | 3,145,062 |  |  |  | 2,842,359 |
Retail: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
1-4 family mortgages |  | $ | 705,442 |  |  |  | 623,599 |  |  |  | 522,556 |  |  |  | 442,546 |  |  |  | 411,618 |  |  |  | 705,442 |  |  |  | 411,618 |
Home equity & other consumer |  | $ | 30,454 |  |  |  | 28,441 |  |  |  | 28,672 |  |  |  | 60,488 |  |  |  | 59,732 |  |  |  | 30,454 |  |  |  | 59,732 |
Total retail |  | $ | 735,896 |  |  |  | 652,040 |  |  |  | 551,228 |  |  |  | 503,034 |  |  |  | 471,350 |  |  |  | 735,896 |  |  |  | 471,350 |
Total loans |  | $ | 3,880,958 |  |  |  | 3,723,800 |  |  |  | 3,555,790 |  |  |  | 3,453,459 |  |  |  | 3,313,709 |  |  |  | 3,880,958 |  |  |  | 3,313,709 |
END OF PERIOD BALANCES |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Loans |  | $ | 3,880,958 |  |  |  | 3,723,800 |  |  |  | 3,555,790 |  |  |  | 3,453,459 |  |  |  | 3,313,709 |  |  |  | 3,880,958 |  |  |  | 3,313,709 |
Securities |  | $ | 600,720 |  |  |  | 621,359 |  |  |  | 623,382 |  |  |  | 610,745 |  |  |  | 577,566 |  |  |  | 600,720 |  |  |  | 577,566 |
Other interest-earning assets |  | $ | 220,909 |  |  |  | 389,938 |  |  |  | 698,724 |  |  |  | 915,755 |  |  |  | 741,557 |  |  |  | 220,909 |  |  |  | 741,557 |
Total earning assets (before allowance) |  | $ | 4,702,587 |  |  |  | 4,735,097 |  |  |  | 4,877,896 |  |  |  | 4,979,959 |  |  |  | 4,632,832 |  |  |  | 4,702,587 |  |  |  | 4,632,832 |
Total assets |  | $ | 5,016,934 |  |  |  | 5,058,555 |  |  |  | 5,175,899 |  |  |  | 5,257,749 |  |  |  | 4,964,412 |  |  |  | 5,016,934 |  |  |  | 4,964,412 |
Noninterest-bearing deposits |  | $ | 1,716,904 |  |  |  | 1,740,432 |  |  |  | 1,686,203 |  |  |  | 1,677,952 |  |  |  | 1,647,380 |  |  |  | 1,716,904 |  |  |  | 1,647,380 |
Interest-bearing deposits |  | $ | 2,129,181 |  |  |  | 2,133,461 |  |  |  | 2,290,048 |  |  |  | 2,405,241 |  |  |  | 2,221,611 |  |  |  | 2,129,181 |  |  |  | 2,221,611 |
Total deposits |  | $ | 3,846,085 |  |  |  | 3,873,893 |  |  |  | 3,976,251 |  |  |  | 4,083,193 |  |  |  | 3,868,991 |  |  |  | 3,846,085 |  |  |  | 3,868,991 |
Total borrowed funds |  | $ | 675,332 |  |  |  | 703,809 |  |  |  | 724,578 |  |  |  | 694,588 |  |  |  | 619,441 |  |  |  | 675,332 |  |  |  | 619,441 |
Total interest-bearing liabilities |  | $ | 2,804,513 |  |  |  | 2,837,270 |  |  |  | 3,014,626 |  |  |  | 3,099,829 |  |  |  | 2,841,052 |  |  |  | 2,804,513 |  |  |  | 2,841,052 |
Shareholders' equity |  | $ | 416,261 |  |  |  | 428,983 |  |  |  | 436,471 |  |  |  | 456,559 |  |  |  | 452,278 |  |  |  | 416,261 |  |  |  | 452,278 |
AVERAGE BALANCES |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Loans |  | $ | 3,814,338 |  |  |  | 3,633,587 |  |  |  | 3,484,511 |  |  |  | 3,373,551 |  |  |  | 3,276,863 |  |  |  | 3,645,353 |  |  |  | 3,308,119 |
Securities |  | $ | 618,043 |  |  |  | 615,733 |  |  |  | 613,317 |  |  |  | 600,852 |  |  |  | 547,336 |  |  |  | 615,715 |  |  |  | 484,020 |
Other interest-earning assets |  | $ | 294,969 |  |  |  | 530,571 |  |  |  | 784,193 |  |  |  | 738,328 |  |  |  | 733,801 |  |  |  | 534,786 |  |  |  | 648,780 |
Total earning assets (before allowance) |  | $ | 4,727,350 |  |  |  | 4,779,891 |  |  |  | 4,882,021 |  |  |  | 4,712,731 |  |  |  | 4,558,000 |  |  |  | 4,795,854 |  |  |  | 4,440,919 |
Total assets |  | $ | 5,025,998 |  |  |  | 5,077,458 |  |  |  | 5,168,562 |  |  |  | 5,010,786 |  |  |  | 4,856,611 |  |  |  | 5,090,150 |  |  |  | 4,730,482 |
Noninterest-bearing deposits |  | $ | 1,723,609 |  |  |  | 1,706,349 |  |  |  | 1,625,453 |  |  |  | 1,708,052 |  |  |  | 1,641,158 |  |  |  | 1,685,497 |  |  |  | 1,590,969 |
Interest-bearing deposits |  | $ | 2,144,047 |  |  |  | 2,201,797 |  |  |  | 2,364,437 |  |  |  | 2,194,644 |  |  |  | 2,125,920 |  |  |  | 2,235,952 |  |  |  | 2,076,221 |
Total deposits |  | $ | 3,867,656 |  |  |  | 3,908,146 |  |  |  | 3,989,890 |  |  |  | 3,902,696 |  |  |  | 3,767,078 |  |  |  | 3,921,449 |  |  |  | 3,667,190 |
Total borrowed funds |  | $ | 689,091 |  |  |  | 705,774 |  |  |  | 707,478 |  |  |  | 632,036 |  |  |  | 614,061 |  |  |  | 700,713 |  |  |  | 595,105 |
Total interest-bearing liabilities |  | $ | 2,833,138 |  |  |  | 2,907,571 |  |  |  | 3,071,915 |  |  |  | 2,826,680 |  |  |  | 2,739,981 |  |  |  | 2,936,665 |  |  |  | 2,671,326 |
Shareholders' equity |  | $ | 430,093 |  |  |  | 428,873 |  |  |  | 449,863 |  |  |  | 455,084 |  |  |  | 455,902 |  |  |  | 436,204 |  |  |  | 448,516 |