EX-99.1 2 ex_544484.htm EXHIBIT 99.1

Exhibit 99.1

Mercantile Bank Corporation Announces Strong Second Quarter 2023 Results

Significant year-over-year increase in net interest income, solid loan growth,

and ongoing strength in asset quality metrics highlight quarter

GRAND RAPIDS, Mich., July 18, 2023 – Mercantile Bank Corporation (NASDAQ: MBWM) ("Mercantile") reported net income of $20.4 million, or $1.27 per diluted share, for the second quarter of 2023, compared with net income of $11.7 million, or $0.74 per diluted share, for the respective prior-year period. Net income during the first six months of 2023 totaled $41.3 million, or $2.58 per diluted share, compared with net income of $23.2 million, or $1.47 per diluted share, during the first six months of 2022.

“We are very pleased to report another quarter of strong financial performance,” said Robert B. Kaminski, Jr., President and Chief Executive Officer of Mercantile. “Our robust operating results were driven by an approximately 39 percent increase in net interest income stemming from a higher net interest margin and solid loan growth. The sustained loan portfolio expansion and pristine asset quality metrics reflect our commitment to meeting the credit needs of our clients while utilizing sound underwriting practices and parameters. We believe our strong capital base positions us to withstand any challenges arising from changing economic conditions.”

Second quarter highlights include:

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

| ● | Notable increases in several key fee income categories

| ● | Annualized commercial loan growth of approximately 6 percent and continued residential mortgage loan portfolio expansion

| ● | Sustained strength in commercial loan pipeline

| ● | Ongoing low levels of nonperforming assets, past due loans, and loan charge-offs

| ● | Strong capital position

Operating Results

Total revenue, which consists of net interest income and noninterest income, was $55.2 million during the second quarter of 2023, up $13.1 million, or 31.2 percent, from $42.1 million during the prior-year second quarter. Net interest income during the second quarter of 2023 was $47.6 million, up $13.2 million, or 38.5 percent, from $34.4 million during the respective 2022 period, mainly due to increased yields on earning assets and loan growth. Noninterest income totaled $7.6 million during the second quarter of 2023, compared to $7.7 million during the second quarter of 2022. Excluding a bank owned life insurance claim recorded in the second quarter of 2022, noninterest income increased $0.4 million, or 6.0 percent, in the second quarter of 2023 compared with the prior-year second quarter primarily due to higher levels of interest rate swap income, credit and debit card income, and payroll processing fees.

The net interest margin was 4.05 percent in the second quarter of 2023, up from 2.88 percent in the prior-year second quarter. The yield on average earning assets was 5.61 percent during the current-year second quarter, an increase from 3.32 percent during the respective 2022 period. The higher yield on average earning assets primarily resulted from an increased yield on loans. The yield on loans was 6.19 percent during the second quarter of 2023, up from 3.97 percent during the second quarter of 2022 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 475 basis points during the period of May 2022 through May 2023. As of June 30, 2023, approximately 65 percent of the commercial loan portfolio consisted of variable-rate loans.

The cost of funds was 1.56 percent in the second quarter of 2023, up from 0.44 percent in the second quarter of 2022 primarily due to higher costs of deposits and borrowed funds, reflecting the impact of the rising interest rate environment, and a change in funding mix, consisting of a decrease in lower-cost non-time deposits and increases in higher-cost time deposits and borrowings as a percentage of interest-bearing liabilities. During the second quarter, a notable level of deposit funds migrated from lower-paying checking and savings accounts to higher-paying money market accounts and time deposits.

Mercantile recorded provisions for credit losses of $2.0 million and $0.5 million during the second quarters of 2023 and 2022, respectively. The provision expense recorded during the current-year second quarter mainly reflected allocations necessitated by net loan growth and adjustments to historical loss factors to better represent Mercantile’s expectations for future credit losses. The provision expense recorded during the second quarter of 2022 primarily reflected allocations necessitated by net commercial and residential mortgage loan growth, increased specific reserves for certain problem commercial loan relationships, and a higher reserve for residential mortgage loans.

Noninterest income during the second quarter of 2023 was $7.6 million, compared to $7.7 million during the respective 2022 period. Noninterest income during the second quarter of 2022 included a $0.5 million bank owned life insurance claim. Excluding the impact of this transaction, noninterest income increased $0.4 million, or 6.0 percent, during the second quarter of 2023 compared with the prior-year second quarter. The higher level of noninterest income primarily stemmed from increased interest rate swap income, credit and debit card income, and payroll servicing fees, which more than offset decreased service charges on accounts and mortgage banking income. The decline in service charges on accounts reflected increased earnings credit rates in response to the increasing interest rate environment.

Noninterest expense totaled $27.8 million during the second quarter of 2023, compared to $26.9 million during the prior-year second quarter. The increase in noninterest expense mainly resulted from larger compensation costs, including salary increases and a higher bonus and commercial lender incentive accrual, which outweighed a reduction in residential mortgage lender commissions. The higher level of salary expense primarily stemmed from annual merit pay increases and market adjustments, as well as lower residential mortgage loan deferred salary costs. The reduced residential mortgage lender commissions and incentives mainly resulted from decreased loan production. The increase in overhead costs during the second quarter of 2023 also resulted from the recording of an increased credit reserve for unfunded loan commitments and higher levels of Federal Deposit Insurance Corporation deposit insurance premiums, reflecting a higher industry-wide assessment rate, and interest rate swap credit reserves and associated collateral interest costs.

Mr. Kaminski commented, “The noteworthy increases in net interest income during the second quarter and first six months of 2023 compared to the respective 2022 periods mainly reflected vastly improved net interest margins and robust loan growth. We are pleased with the increases in several key fee income categories and remain focused on meeting growth objectives in a disciplined manner. Noninterest expense control continues to be a fundamental operating initiative, and we are continually examining our cost structure to identify further opportunities to enhance efficiency while still providing outstanding service to our customers.”

Balance Sheet

As of June 30, 2023, total assets were $5.14 billion, up $265 million from December 31, 2022. Total loans increased $135 million, or an annualized 6.9 percent, during the first six months of 2023, mainly reflecting growth in residential mortgage loans and commercial loans of $78.2 million and $56.8 million, respectively. Commercial loans and residential mortgage loans were up $48.2 million and $38.2 million, respectively, during the second quarter of 2023. Commercial loans increased despite the full payoffs and partial paydowns of certain larger relationships, which aggregated approximately $108 million and $174 million during the second quarter and first six months of 2023, respectively. The payoffs and paydowns mainly stemmed from customers refinancing debt on the secondary market and using excess cash flows generated within their operations to make unscheduled principal and line of credit payments. Interest-earning deposits increased $104 million during the first six months of 2023, in large part reflecting a strategic initiative to enhance on-balance sheet liquidity.

As of June 30, 2023, unfunded commitments on commercial construction and development loans, which are anticipated to be funded over the next 12 to 18 months, and residential construction loans, which are expected to be largely funded over the next 12 months, totaled $327 million and $58.6 million, respectively.

Ray Reitsma, President of Mercantile Bank, noted, “Although impeded by full and partial payoffs, commercial loan growth was solid during the second quarter of 2023. In addition to the payoffs stemming from customers refinancing debt on the secondary market and using excess cash flows to reduce debt, $12.8 million in payoffs related to borrowers that were experiencing financial duress and placed on our internal watch list occurred during the second quarter. Commercial and industrial loan growth accounted for approximately 80 percent of the increase in commercial loans during the second quarter, providing our lenders and treasury management personnel with additional opportunities to enhance commercial banking-related fee income and grow local deposits. Our healthy commercial loan pipeline and credit availability for commercial construction and development loans provide opportunities for future portfolio growth. As part of our efforts to meet commercial loan growth goals, we will continue to employ sound underwriting practices. Despite ongoing headwinds, including the higher interest rate environment and limited housing inventory levels, the residential mortgage loan portfolio expanded during the second quarter of 2023, as it did all throughout 2022 and the first three months of 2023.”

Commercial and industrial loans and owner-occupied commercial real estate loans combined represented approximately 59 percent of total commercial loans as of June 30, 2023, a level that has remained relatively consistent with prior periods and in line with Mercantile’s expectations.

Total deposits at June 30, 2023, were $3.76 billion, up $159 million, or 4.4 percent, from March 31, 2023, and $44.0 million, or 1.2 percent, from December 31, 2022. Local deposits increased $47.5 million and decreased $67.3 million during the second quarter and first six months of 2023, respectively, while brokered deposits grew $111 million during the first six months of 2023, all of which occurred during the second quarter. The net reduction in local deposits during the first six months of 2023 primarily reflected a customary level of customers’ tax and bonus payments and partnership distributions, as well as transfers to the sweep account product, during the first quarter. The growth in local deposits during the second quarter of 2023 mainly depicted the anticipated buildup in existing customers’ deposit balances that typically begins after the previously mentioned seasonal payments are made and generally continues during the remainder of each year. Wholesale funds, consisting of brokered deposits and Federal Home Loan Bank of Indianapolis advances, were $598 million, or approximately 13 percent of total funds, at June 30, 2023, compared with $308 million, or approximately 7 percent of total funds, at December 31, 2022. Wholesale funds totaling $311 million were obtained during the first six months of 2023 to increase on-balance sheet liquidity and offset loan growth, seasonal deposit withdrawals, and wholesale fund maturities.

Asset Quality

Nonperforming assets totaled $2.8 million, $8.4 million, $7.7 million, and $1.8 million, at June 30, 2023, March 31, 2023, December 31, 2022, and June 30, 2022, respectively, with each dollar amount representing less than 0.2 percent of total assets as of the respective dates. The decrease in nonperforming assets during the second quarter and first six months of 2023 primarily reflected the near full payoff of one large commercial loan relationship, which had been placed on nonaccrual during the fourth quarter of 2022; a charge-off of less than $0.1 million was recorded as part of the relationship’s resolution. A former branch facility, which was transferred into other real estate owned in the first quarter of 2023 and is under contract to be sold in the third quarter of 2023, accounted for approximately 22 percent of total nonperforming assets as of June 30, 2023.

The level of past due loans remains nominal, and the dollar volume of loan relationships on the internal watch list declined during the first six months of 2023. During the second quarter of 2023, loan charge-offs were $0.5 million, while recoveries of prior period loan charge-offs equaled $0.3 million, providing for net loan charge-offs of $0.2 million, or an annualized 0.02 percent of average total loans.

Mr. Reitsma commented, “Our asset quality measures remained strong during the second quarter, reflecting our ongoing commitment to underwriting loans in a sound and vigilant manner and our borrowers’ sustained abilities to effectively manage issues stemming from the current operating environment, including higher interest rates and associated increase in debt service requirements. Through our robust loan review program and emphasis on early recognition and reporting of deteriorating credit relationships, we believe we are well positioned to identify credit issues and limit their impact on our overall financial condition.”

Capital Position

Shareholders’ equity totaled $479 million as of June 30, 2023, up $37.3 million from year-end 2022. Mercantile Bank maintains a “well-capitalized” position, with its total risk-based capital ratio at 13.7 percent as of June 30, 2023, unchanged from December 31, 2022. At June 30, 2023, Mercantile Bank had approximately $177 million in excess of the 10 percent minimum regulatory threshold required to be categorized as a “well-capitalized” institution.

All of Mercantile’s investments are categorized as available-for-sale. As of June 30, 2023, the net unrealized loss on these investments totaled $77.9 million, resulting in an after-tax reduction to equity capital of $61.5 million. Although unrealized gains and losses on investments are excluded from regulatory capital ratio calculations, our excess capital over the minimum regulatory requirement to be considered a “well-capitalized” institution would approximate $115 million on an adjusted basis.

Mercantile reported 16,018,048 total shares outstanding at June 30, 2023.

Mr. Kaminski concluded, “As demonstrated by our Board of Directors’ declaration of an increased third quarter 2023 regular cash dividend, our sustained financial strength has allowed us to reward shareholders with competitive dividend yields while supporting loan portfolio expansion. We believe our strong overall financial condition, including solid capital levels, pristine asset quality measures, robust operating performance, and substantial loan origination opportunities, should allow us to successfully navigate through the myriad of challenges that could arise from changing economic conditions. While concerns about banks’ liquidity positions and the stability of banks’ deposit portfolios have eased, we continue to closely monitor our deposit base for any atypical activities, and to date believe that it remains stable. We increased our on-balance sheet liquidity during the second quarter of 2023 and believe our liquidity position remains sufficient to meet expected funding requirements. Our strong financial performance during the first six months of 2023 and anticipated loan growth give us confidence that robust operating results can be delivered during the remainder of the year and beyond as we continue our efforts to be a consistent and profitable performer.”

Investor Presentation

Mercantile has prepared presentation materials that management intends to use during its previously announced second quarter 2023 conference call on Tuesday, July 18, 2023, at 10:00 a.m. Eastern Time, and from time to time thereafter in presentations about the company’s operations and performance. These materials are available for viewing in the Investor Relations section of Mercantile’s website at www.mercbank.com, and have also been furnished to the U.S. Securities and Exchange Commission concurrently with this press release.

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 $5.1 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 or recession; significant declines in the value of commercial real estate; market volatility; demand for products and services; climate impacts; labor markets; the degree of competition by traditional and nontraditional financial services companies; changes in banking regulation or actions by bank regulators; changes in tax laws and other laws and regulations applicable to us; 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; the transition from LIBOR to SOFR; changes in the national and local economies; unstable political and economic environments; disease outbreaks, such as the COVID-19 pandemic or similar public health threats, and measures implemented to combat them; 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
Second Quarter 2023 Results
MERCANTILE BANK CORPORATION
CONSOLIDATED BALANCE SHEETS
(Unaudited)

|  | JUNE 30, |  |  | DECEMBER 31, |  |  | JUNE 30, |
|  | 2023 |  |  | 2022 |  |  | 2022 |
ASSETS |  |  |  |  |  |  |  |  |  |  |  |
Cash and due from banks |  | $ | 69,133,000 |  |  | $ | 61,894,000 |  |  | $ | 89,167,000 |
Other interest-earning assets |  |  | 138,663,000 |  |  |  | 34,878,000 |  |  |  | 389,938,000 |
Total cash and cash equivalents |  |  | 207,796,000 |  |  |  | 96,772,000 |  |  |  | 479,105,000 |
Securities available for sale |  |  | 608,972,000 |  |  |  | 602,936,000 |  |  |  | 603,638,000 |
Federal Home Loan Bank stock |  |  | 21,513,000 |  |  |  | 17,721,000 |  |  |  | 17,721,000 |
Mortgage loans held for sale |  |  | 11,942,000 |  |  |  | 3,565,000 |  |  |  | 12,964,000 |
Loans |  |  | 4,051,843,000 |  |  |  | 3,916,619,000 |  |  |  | 3,723,800,000 |
Allowance for credit losses |  |  | (44,721,000 | ) |  |  | (42,246,000 | ) |  |  | (35,974,000 | )
Loans, net |  |  | 4,007,122,000 |  |  |  | 3,874,373,000 |  |  |  | 3,687,826,000 |
Premises and equipment, net |  |  | 52,291,000 |  |  |  | 51,476,000 |  |  |  | 51,402,000 |
Bank owned life insurance |  |  | 81,500,000 |  |  |  | 80,727,000 |  |  |  | 75,664,000 |
Goodwill |  |  | 49,473,000 |  |  |  | 49,473,000 |  |  |  | 49,473,000 |
Core deposit intangible, net |  |  | 291,000 |  |  |  | 583,000 |  |  |  | 900,000 |
Other assets |  |  | 96,687,000 |  |  |  | 94,993,000 |  |  |  | 79,862,000 |
Total assets |  | $ | 5,137,587,000 |  |  | $ | 4,872,619,000 |  |  | $ | 5,058,555,000 |
LIABILITIES AND SHAREHOLDERS' EQUITY |  |  |  |  |  |  |  |  |  |  |  |
Deposits: |  |  |  |  |  |  |  |  |  |  |  |
Noninterest-bearing |  | $ | 1,371,633,000 |  |  | $ | 1,604,750,000 |  |  | $ | 1,740,432,000 |
Interest-bearing |  |  | 2,385,156,000 |  |  |  | 2,108,061,000 |  |  |  | 2,133,461,000 |
Total deposits |  |  | 3,756,789,000 |  |  |  | 3,712,811,000 |  |  |  | 3,873,893,000 |
Securities sold under agreements to repurchase |  |  | 219,457,000 |  |  |  | 194,340,000 |  |  |  | 203,339,000 |
Federal Home Loan Bank advances |  |  | 467,910,000 |  |  |  | 308,263,000 |  |  |  | 362,263,000 |
Subordinated debentures |  |  | 49,301,000 |  |  |  | 48,958,000 |  |  |  | 48,585,000 |
Subordinated notes |  |  | 88,800,000 |  |  |  | 88,628,000 |  |  |  | 88,457,000 |
Accrued interest and other liabilities |  |  | 76,628,000 |  |  |  | 78,211,000 |  |  |  | 53,035,000 |
Total liabilities |  |  | 4,658,885,000 |  |  |  | 4,431,211,000 |  |  |  | 4,629,572,000 |
SHAREHOLDERS' EQUITY |  |  |  |  |  |  |  |  |  |  |  |
Common stock |  |  | 292,906,000 |  |  |  | 290,436,000 |  |  |  | 288,199,000 |
Retained earnings |  |  | 247,313,000 |  |  |  | 216,313,000 |  |  |  | 188,452,000 |
Accumulated other comprehensive income/(loss) |  |  | (61,517,000 | ) |  |  | (65,341,000 | ) |  |  | (47,668,000 | )
Total shareholders' equity |  |  | 478,702,000 |  |  |  | 441,408,000 |  |  |  | 428,983,000 |
Total liabilities and shareholders' equity |  | $ | 5,137,587,000 |  |  | $ | 4,872,619,000 |  |  | $ | 5,058,555,000 |

Mercantile Bank Corporation
Second Quarter 2023 Results
MERCANTILE BANK CORPORATION
CONSOLIDATED REPORTS OF INCOME
(Unaudited)

|  | THREE MONTHS ENDED |  |  | THREE MONTHS ENDED |  |  | SIX MONTHS ENDED |  |  | SIX MONTHS ENDED |
|  | June 30, 2023 |  |  | June 30, 2022 |  |  | June 30, 2023 |  |  | June 30, 2022 |
INTEREST INCOME |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Loans, including fees |  | $ | 62,006,000 |  |  | $ | 36,003,000 |  |  | $ | 119,159,000 |  |  | $ | 69,254,000 |
Investment securities |  |  | 3,111,000 |  |  |  | 2,529,000 |  |  |  | 6,118,000 |  |  |  | 4,794,000 |
Other interest-earning assets |  |  | 801,000 |  |  |  | 1,018,000 |  |  |  | 1,125,000 |  |  |  | 1,384,000 |
Total interest income |  |  | 65,918,000 |  |  |  | 39,550,000 |  |  |  | 126,402,000 |  |  |  | 75,432,000 |
INTEREST EXPENSE |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Deposits |  |  | 12,379,000 |  |  |  | 1,873,000 |  |  |  | 20,286,000 |  |  |  | 3,698,000 |
Short-term borrowings |  |  | 914,000 |  |  |  | 49,000 |  |  |  | 1,373,000 |  |  |  | 99,000 |
Federal Home Loan Bank advances |  |  | 3,051,000 |  |  |  | 1,911,000 |  |  |  | 4,845,000 |  |  |  | 3,774,000 |
Other borrowed money |  |  | 2,023,000 |  |  |  | 1,391,000 |  |  |  | 3,963,000 |  |  |  | 2,650,000 |
Total interest expense |  |  | 18,367,000 |  |  |  | 5,224,000 |  |  |  | 30,467,000 |  |  |  | 10,221,000 |
Net interest income |  |  | 47,551,000 |  |  |  | 34,326,000 |  |  |  | 95,935,000 |  |  |  | 65,211,000 |
Provision for credit losses |  |  | 2,000,000 |  |  |  | 500,000 |  |  |  | 2,600,000 |  |  |  | 600,000 |
Net interest income after provision for credit losses |  |  | 45,551,000 |  |  |  | 33,826,000 |  |  |  | 93,335,000 |  |  |  | 64,611,000 |
NONINTEREST INCOME |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Service charges on accounts |  |  | 1,064,000 |  |  |  | 1,495,000 |  |  |  | 2,041,000 |  |  |  | 2,910,000 |
Credit and debit card income |  |  | 2,426,000 |  |  |  | 2,134,000 |  |  |  | 4,485,000 |  |  |  | 4,015,000 |
Mortgage banking income |  |  | 1,835,000 |  |  |  | 1,947,000 |  |  |  | 3,050,000 |  |  |  | 5,228,000 |
Interest rate swap income |  |  | 748,000 |  |  |  | 430,000 |  |  |  | 1,785,000 |  |  |  | 1,781,000 |
Payroll services |  |  | 572,000 |  |  |  | 464,000 |  |  |  | 1,317,000 |  |  |  | 1,102,000 |
Earnings on bank owned life insurance |  |  | 402,000 |  |  |  | 785,000 |  |  |  | 802,000 |  |  |  | 1,072,000 |
Other income |  |  | 598,000 |  |  |  | 486,000 |  |  |  | 1,117,000 |  |  |  | 910,000 |
Total noninterest income |  |  | 7,645,000 |  |  |  | 7,741,000 |  |  |  | 14,597,000 |  |  |  | 17,018,000 |
NONINTEREST EXPENSE |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Salaries and benefits |  |  | 16,461,000 |  |  |  | 15,676,000 |  |  |  | 33,143,000 |  |  |  | 31,186,000 |
Occupancy |  |  | 2,098,000 |  |  |  | 2,064,000 |  |  |  | 4,387,000 |  |  |  | 4,168,000 |
Furniture and equipment |  |  | 878,000 |  |  |  | 935,000 |  |  |  | 1,700,000 |  |  |  | 1,869,000 |
Data processing costs |  |  | 2,881,000 |  |  |  | 3,091,000 |  |  |  | 6,043,000 |  |  |  | 6,064,000 |
Charitable foundation contributions |  |  | 2,000 |  |  |  | 506,000 |  |  |  | 12,000 |  |  |  | 506,000 |
Other expense |  |  | 5,509,000 |  |  |  | 4,670,000 |  |  |  | 11,144,000 |  |  |  | 8,891,000 |
Total noninterest expense |  |  | 27,829,000 |  |  |  | 26,942,000 |  |  |  | 56,429,000 |  |  |  | 52,684,000 |
Income before federal income tax expense |  |  | 25,367,000 |  |  |  | 14,625,000 |  |  |  | 51,503,000 |  |  |  | 28,945,000 |
Federal income tax expense |  |  | 5,010,000 |  |  |  | 2,888,000 |  |  |  | 10,171,000 |  |  |  | 5,716,000 |
Net Income |  | $ | 20,357,000 |  |  | $ | 11,737,000 |  |  | $ | 41,332,000 |  |  | $ | 23,229,000 |
Basic earnings per share |  | $ | 1.27 |  |  | $ | 0.74 |  |  | $ | 2.58 |  |  | $ | 1.47 |
Diluted earnings per share |  | $ | 1.27 |  |  | $ | 0.74 |  |  | $ | 2.58 |  |  | $ | 1.47 |
Average basic shares outstanding |  |  | 16,003,372 |  |  |  | 15,848,681 |  |  |  | 15,999,775 |  |  |  | 15,844,763 |
Average diluted shares outstanding |  |  | 16,003,372 |  |  |  | 15,848,681 |  |  |  | 15,999,775 |  |  |  | 15,844,790 |

Mercantile Bank Corporation
Second Quarter 2023 Results
MERCANTILE BANK CORPORATION
CONSOLIDATED FINANCIAL HIGHLIGHTS
(Unaudited)

|  | Quarterly |  |  | Year-To-Date |
(dollars in thousands except per share data) |  | 2023 |  |  | 2023 |  |  | 2022 |  |  | 2022 |  |  | 2022 |  |  |  |  |  |  |  |  |
|  | 2nd Qtr |  |  | 1st Qtr |  |  | 4th Qtr |  |  | 3rd Qtr |  |  | 2nd Qtr |  |  | 2023 |  |  | 2022 |
EARNINGS |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Net interest income |  | $ | 47,551 |  |  |  | 48,384 |  |  |  | 50,657 |  |  |  | 42,376 |  |  |  | 34,326 |  |  |  | 95,935 |  |  |  | 65,211 |
Provision for credit losses |  | $ | 2,000 |  |  |  | 600 |  |  |  | 3,050 |  |  |  | 2,900 |  |  |  | 500 |  |  |  | 2,600 |  |  |  | 600 |
Noninterest income |  | $ | 7,645 |  |  |  | 6,951 |  |  |  | 7,805 |  |  |  | 7,253 |  |  |  | 7,741 |  |  |  | 14,597 |  |  |  | 17,018 |
Noninterest expense |  | $ | 27,829 |  |  |  | 28,599 |  |  |  | 28,541 |  |  |  | 26,756 |  |  |  | 26,942 |  |  |  | 56,429 |  |  |  | 52,684 |
Net income before federal income tax expense |  | $ | 25,367 |  |  |  | 26,136 |  |  |  | 26,871 |  |  |  | 19,973 |  |  |  | 14,625 |  |  |  | 51,503 |  |  |  | 28,945 |
Net income |  | $ | 20,357 |  |  |  | 20,974 |  |  |  | 21,803 |  |  |  | 16,030 |  |  |  | 11,737 |  |  |  | 41,332 |  |  |  | 23,229 |
Basic earnings per share |  | $ | 1.27 |  |  |  | 1.31 |  |  |  | 1.37 |  |  |  | 1.01 |  |  |  | 0.74 |  |  |  | 2.58 |  |  |  | 1.47 |
Diluted earnings per share |  | $ | 1.27 |  |  |  | 1.31 |  |  |  | 1.37 |  |  |  | 1.01 |  |  |  | 0.74 |  |  |  | 2.58 |  |  |  | 1.47 |
Average basic shares outstanding |  |  | 16,003,372 |  |  |  | 15,996,138 |  |  |  | 15,887,983 |  |  |  | 15,861,551 |  |  |  | 15,848,681 |  |  |  | 15,999,775 |  |  |  | 15,844,763 |
Average diluted shares outstanding |  |  | 16,003,372 |  |  |  | 15,996,138 |  |  |  | 15,887,983 |  |  |  | 15,861,551 |  |  |  | 15,848,681 |  |  |  | 15,999,775 |  |  |  | 15,844,790 |
PERFORMANCE RATIOS |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Return on average assets |  |  | 1.64 | % |  |  | 1.75 | % |  |  | 1.75 | % |  |  | 1.27 | % |  |  | 0.93 | % |  |  | 1.69 | % |  |  | 0.91 | %
Return on average equity |  |  | 17.23 | % |  |  | 18.76 | % |  |  | 20.26 | % |  |  | 14.79 | % |  |  | 10.98 | % |  |  | 17.97 | % |  |  | 10.66 | %
Net interest margin (fully tax-equivalent) |  |  | 4.05 | % |  |  | 4.28 | % |  |  | 4.30 | % |  |  | 3.56 | % |  |  | 2.88 | % |  |  | 4.16 | % |  |  | 2.73 | %
Efficiency ratio |  |  | 50.42 | % |  |  | 51.69 | % |  |  | 48.82 | % |  |  | 53.91 | % |  |  | 64.05 | % |  |  | 51.05 | % |  |  | 64.07 | %
Full-time equivalent employees |  |  | 665 |  |  |  | 633 |  |  |  | 630 |  |  |  | 635 |  |  |  | 651 |  |  |  | 665 |  |  |  | 651 |
YIELD ON ASSETS / COST OF FUNDS |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Yield on loans |  |  | 6.19 | % |  |  | 5.90 | % |  |  | 5.49 | % |  |  | 4.56 | % |  |  | 3.97 | % |  |  | 6.05 | % |  |  | 3.92 | %
Yield on securities |  |  | 2.00 | % |  |  | 1.95 | % |  |  | 1.91 | % |  |  | 1.79 | % |  |  | 1.68 | % |  |  | 1.98 | % |  |  | 1.60 | %
Yield on other interest-earning assets |  |  | 4.88 | % |  |  | 4.18 | % |  |  | 3.60 | % |  |  | 2.15 | % |  |  | 0.76 | % |  |  | 4.65 | % |  |  | 0.42 | %
Yield on total earning assets |  |  | 5.61 | % |  |  | 5.35 | % |  |  | 4.95 | % |  |  | 4.04 | % |  |  | 3.32 | % |  |  | 5.48 | % |  |  | 3.16 | %
Yield on total assets |  |  | 5.30 | % |  |  | 5.06 | % |  |  | 4.68 | % |  |  | 3.80 | % |  |  | 3.13 | % |  |  | 5.18 | % |  |  | 2.97 | %
Cost of deposits |  |  | 1.36 | % |  |  | 0.87 | % |  |  | 0.42 | % |  |  | 0.24 | % |  |  | 0.19 | % |  |  | 1.12 | % |  |  | 0.19 | %
Cost of borrowed funds |  |  | 2.90 | % |  |  | 2.51 | % |  |  | 2.13 | % |  |  | 1.99 | % |  |  | 1.90 | % |  |  | 2.73 | % |  |  | 1.86 | %
Cost of interest-bearing liabilities |  |  | 2.37 | % |  |  | 1.72 | % |  |  | 1.10 | % |  |  | 0.81 | % |  |  | 0.72 | % |  |  | 2.06 | % |  |  | 0.69 | %
Cost of funds (total earning assets) |  |  | 1.56 | % |  |  | 1.07 | % |  |  | 0.65 | % |  |  | 0.48 | % |  |  | 0.44 | % |  |  | 1.32 | % |  |  | 0.43 | %
Cost of funds (total assets) |  |  | 1.48 | % |  |  | 1.01 | % |  |  | 0.61 | % |  |  | 0.45 | % |  |  | 0.41 | % |  |  | 1.25 | % |  |  | 0.40 | %
MORTGAGE BANKING ACTIVITY |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Total mortgage loans originated |  | $ | 117,563 |  |  |  | 71,991 |  |  |  | 90,794 |  |  |  | 163,902 |  |  |  | 190,896 |  |  |  | 189,554 |  |  |  | 359,083 |
Purchase mortgage loans originated |  | $ | 100,941 |  |  |  | 56,728 |  |  |  | 79,604 |  |  |  | 140,898 |  |  |  | 157,423 |  |  |  | 157,669 |  |  |  | 258,832 |
Refinance mortgage loans originated |  | $ | 16,622 |  |  |  | 15,263 |  |  |  | 11,190 |  |  |  | 23,004 |  |  |  | 33,473 |  |  |  | 31,885 |  |  |  | 100,251 |
Total saleable mortgage loans |  | $ | 50,734 |  |  |  | 24,904 |  |  |  | 29,948 |  |  |  | 59,740 |  |  |  | 52,328 |  |  |  | 75,638 |  |  |  | 128,075 |
Income on sale of mortgage loans |  | $ | 1,570 |  |  |  | 950 |  |  |  | 1,401 |  |  |  | 1,779 |  |  |  | 1,751 |  |  |  | 2,520 |  |  |  | 4,955 |
CAPITAL |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Tangible equity to tangible assets |  |  | 8.43 | % |  |  | 8.61 | % |  |  | 8.12 | % |  |  | 7.37 | % |  |  | 7.56 | % |  |  | 8.43 | % |  |  | 7.56 | %
Tier 1 leverage capital ratio |  |  | 10.73 | % |  |  | 10.66 | % |  |  | 10.09 | % |  |  | 9.63 | % |  |  | 9.31 | % |  |  | 10.73 | % |  |  | 9.31 | %
Common equity risk-based capital ratio |  |  | 10.25 | % |  |  | 10.25 | % |  |  | 10.08 | % |  |  | 9.80 | % |  |  | 9.84 | % |  |  | 10.25 | % |  |  | 9.84 | %
Tier 1 risk-based capital ratio |  |  | 11.24 | % |  |  | 11.27 | % |  |  | 11.12 | % |  |  | 10.84 | % |  |  | 10.91 | % |  |  | 11.24 | % |  |  | 10.91 | %
Total risk-based capital ratio |  |  | 14.03 | % |  |  | 14.11 | % |  |  | 14.00 | % |  |  | 13.69 | % |  |  | 13.78 | % |  |  | 14.03 | % |  |  | 13.78 | %
Tier 1 capital |  | $ | 537,802 |  |  |  | 520,918 |  |  |  | 503,855 |  |  |  | 485,499 |  |  |  | 473,065 |  |  |  | 537,802 |  |  |  | 473,065 |
Tier 1 plus tier 2 capital |  | $ | 671,323 |  |  |  | 652,509 |  |  |  | 634,729 |  |  |  | 613,161 |  |  |  | 597,495 |  |  |  | 671,323 |  |  |  | 597,495 |
Total risk-weighted assets |  | $ | 4,784,428 |  |  |  | 4,623,631 |  |  |  | 4,533,091 |  |  |  | 4,479,176 |  |  |  | 4,337,040 |  |  |  | 4,784,428 |  |  |  | 4,337,040 |
Book value per common share |  | $ | 29.89 |  |  |  | 29.21 |  |  |  | 27.60 |  |  |  | 26.24 |  |  |  | 27.05 |  |  |  | 29.89 |  |  |  | 27.05 |
Tangible book value per common share |  | $ | 26.78 |  |  |  | 26.09 |  |  |  | 24.47 |  |  |  | 23.07 |  |  |  | 23.87 |  |  |  | 26.78 |  |  |  | 23.87 |
Cash dividend per common share |  | $ | 0.33 |  |  |  | 0.33 |  |  |  | 0.32 |  |  |  | 0.32 |  |  |  | 0.31 |  |  |  | 0.66 |  |  |  | 0.62 |
ASSET QUALITY |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Gross loan charge-offs |  | $ | 461 |  |  |  | 106 |  |  |  | 72 |  |  |  | 0 |  |  |  | 15 |  |  |  | 567 |  |  |  | 220 |
Recoveries |  | $ | 305 |  |  |  | 137 |  |  |  | 149 |  |  |  | 246 |  |  |  | 336 |  |  |  | 442 |  |  |  | 630 |
Net loan charge-offs (recoveries) |  | $ | 156 |  |  |  | (31 | ) |  |  | (77 | ) |  |  | (246 | ) |  |  | (321 | ) |  |  | 125 |  |  |  | (410 | )
Net loan charge-offs to average loans |  |  | 0.02 | % |  |  | (0.01 | %) |  |  | (0.01 | %) |  |  | (0.03 | %) |  |  | (0.04 | %) |  |  | 0.01 | % |  |  | (0.02 | %)
Allowance for credit losses |  | $ | 44,721 |  |  |  | 42,877 |  |  |  | 42,246 |  |  |  | 39,120 |  |  |  | 35,974 |  |  |  | 44,721 |  |  |  | 35,974 |
Allowance to loans |  |  | 1.10 | % |  |  | 1.08 | % |  |  | 1.08 | % |  |  | 1.01 | % |  |  | 0.97 | % |  |  | 1.10 | % |  |  | 0.97 | %
Nonperforming loans |  | $ | 2,099 |  |  |  | 7,782 |  |  |  | 7,728 |  |  |  | 1,416 |  |  |  | 1,787 |  |  |  | 2,099 |  |  |  | 1,787 |
Other real estate/repossessed assets |  | $ | 661 |  |  |  | 661 |  |  |  | 0 |  |  |  | 0 |  |  |  | 0 |  |  |  | 661 |  |  |  | 0 |
Nonperforming loans to total loans |  |  | 0.05 | % |  |  | 0.20 | % |  |  | 0.20 | % |  |  | 0.04 | % |  |  | 0.05 | % |  |  | 0.05 | % |  |  | 0.05 | %
Nonperforming assets to total assets |  |  | 0.05 | % |  |  | 0.17 | % |  |  | 0.16 | % |  |  | 0.03 | % |  |  | 0.04 | % |  |  | 0.05 | % |  |  | 0.04 | %
NONPERFORMING ASSETS - COMPOSITION |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Residential real estate: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Land development |  | $ | 2 |  |  |  | 8 |  |  |  | 29 |  |  |  | 30 |  |  |  | 30 |  |  |  | 2 |  |  |  | 30 |
Construction |  | $ | 0 |  |  |  | 0 |  |  |  | 124 |  |  |  | 0 |  |  |  | 0 |  |  |  | 0 |  |  |  | 0 |
Owner occupied / rental |  | $ | 1,793 |  |  |  | 1,952 |  |  |  | 1,304 |  |  |  | 1,138 |  |  |  | 1,508 |  |  |  | 1,793 |  |  |  | 1,508 |
Commercial real estate: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Land development |  | $ | 0 |  |  |  | 0 |  |  |  | 0 |  |  |  | 0 |  |  |  | 0 |  |  |  | 0 |  |  |  | 0 |
Construction |  | $ | 0 |  |  |  | 0 |  |  |  | 0 |  |  |  | 0 |  |  |  | 0 |  |  |  | 0 |  |  |  | 0 |
Owner occupied |  | $ | 716 |  |  |  | 829 |  |  |  | 248 |  |  |  | 0 |  |  |  | 0 |  |  |  | 716 |  |  |  | 0 |
Non-owner occupied |  | $ | 0 |  |  |  | 0 |  |  |  | 0 |  |  |  | 0 |  |  |  | 0 |  |  |  | 0 |  |  |  | 0 |
Non-real estate: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Commercial assets |  | $ | 249 |  |  |  | 5,654 |  |  |  | 6,023 |  |  |  | 248 |  |  |  | 248 |  |  |  | 249 |  |  |  | 248 |
Consumer assets |  | $ | 0 |  |  |  | 0 |  |  |  | 0 |  |  |  | 0 |  |  |  | 1 |  |  |  | 0 |  |  |  | 1 |
Total nonperforming assets |  | $ | 2,760 |  |  |  | 8,443 |  |  |  | 7,728 |  |  |  | 1,416 |  |  |  | 1,787 |  |  |  | 2,760 |  |  |  | 1,787 |
NONPERFORMING ASSETS - RECON |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Beginning balance |  | $ | 8,443 |  |  |  | 7,728 |  |  |  | 1,416 |  |  |  | 1,787 |  |  |  | 1,612 |  |  |  | 7,728 |  |  |  | 2,468 |
Additions |  | $ | 273 |  |  |  | 1,323 |  |  |  | 6,368 |  |  |  | 0 |  |  |  | 309 |  |  |  | 1,596 |  |  |  | 402 |
Return to performing status |  | $ | 0 |  |  |  | (31 | ) |  |  | 0 |  |  |  | (160 | ) |  |  | 0 |  |  |  | (31 | ) |  |  | (213 | )
Principal payments |  | $ | (5,526 | ) |  |  | (515 | ) |  |  | (56 | ) |  |  | (211 | ) |  |  | (134 | ) |  |  | (6,041 | ) |  |  | (775 | )
Sale proceeds |  | $ | 0 |  |  |  | 0 |  |  |  | 0 |  |  |  | 0 |  |  |  | 0 |  |  |  | 0 |  |  |  | 0 |
Loan charge-offs |  | $ | (430 | ) |  |  | (62 | ) |  |  | 0 |  |  |  | 0 |  |  |  | 0 |  |  |  | (492 | ) |  |  | (95 | )
Valuation write-downs |  | $ | 0 |  |  |  | 0 |  |  |  | 0 |  |  |  | 0 |  |  |  | 0 |  |  |  | 0 |  |  |  | 0 |
Ending balance |  | $ | 2,760 |  |  |  | 8,443 |  |  |  | 7,728 |  |  |  | 1,416 |  |  |  | 1,787 |  |  |  | 2,760 |  |  |  | 1,787 |
LOAN PORTFOLIO COMPOSITION |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Commercial: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Commercial & industrial |  | $ | 1,212,196 |  |  |  | 1,173,440 |  |  |  | 1,185,084 |  |  |  | 1,213,630 |  |  |  | 1,187,650 |  |  |  | 1,212,196 |  |  |  | 1,187,650 |
Land development & construction |  | $ | 72,682 |  |  |  | 66,233 |  |  |  | 61,873 |  |  |  | 60,970 |  |  |  | 57,808 |  |  |  | 72,682 |  |  |  | 57,808 |
Owner occupied comm'l R/E |  | $ | 659,201 |  |  |  | 630,186 |  |  |  | 639,192 |  |  |  | 643,577 |  |  |  | 598,593 |  |  |  | 659,201 |  |  |  | 598,593 |
Non-owner occupied comm'l R/E |  | $ | 957,221 |  |  |  | 975,735 |  |  |  | 979,214 |  |  |  | 963,144 |  |  |  | 974,009 |  |  |  | 957,221 |  |  |  | 974,009 |
Multi-family & residential rental |  | $ | 287,285 |  |  |  | 294,825 |  |  |  | 266,468 |  |  |  | 263,741 |  |  |  | 253,700 |  |  |  | 287,285 |  |  |  | 253,700 |
Total commercial |  | $ | 3,188,585 |  |  |  | 3,140,419 |  |  |  | 3,131,831 |  |  |  | 3,145,062 |  |  |  | 3,071,760 |  |  |  | 3,188,585 |  |  |  | 3,071,760 |
Retail: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
1-4 family mortgages & home equity |  | $ | 833,198 |  |  |  | 795,009 |  |  |  | 755,035 |  |  |  | 705,442 |  |  |  | 623,599 |  |  |  | 833,198 |  |  |  | 623,599 |
Other consumer |  | $ | 30,060 |  |  |  | 30,100 |  |  |  | 29,753 |  |  |  | 30,454 |  |  |  | 28,441 |  |  |  | 30,060 |  |  |  | 28,441 |
Total retail |  | $ | 863,258 |  |  |  | 825,109 |  |  |  | 784,788 |  |  |  | 735,896 |  |  |  | 652,040 |  |  |  | 863,258 |  |  |  | 652,040 |
Total loans |  | $ | 4,051,843 |  |  |  | 3,965,528 |  |  |  | 3,916,619 |  |  |  | 3,880,958 |  |  |  | 3,723,800 |  |  |  | 4,051,843 |  |  |  | 3,723,800 |
END OF PERIOD BALANCES |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Loans |  | $ | 4,051,843 |  |  |  | 3,965,528 |  |  |  | 3,916,619 |  |  |  | 3,880,958 |  |  |  | 3,723,800 |  |  |  | 4,051,843 |  |  |  | 3,723,800 |
Securities |  | $ | 630,485 |  |  |  | 637,694 |  |  |  | 620,657 |  |  |  | 600,720 |  |  |  | 621,359 |  |  |  | 630,485 |  |  |  | 621,359 |
Other interest-earning assets |  | $ | 138,663 |  |  |  | 10,787 |  |  |  | 34,878 |  |  |  | 220,909 |  |  |  | 389,938 |  |  |  | 138,663 |  |  |  | 389,938 |
Total earning assets (before allowance) |  | $ | 4,820,991 |  |  |  | 4,614,009 |  |  |  | 4,572,154 |  |  |  | 4,702,587 |  |  |  | 4,735,097 |  |  |  | 4,820,991 |  |  |  | 4,735,097 |
Total assets |  | $ | 5,137,587 |  |  |  | 4,895,874 |  |  |  | 4,872,619 |  |  |  | 5,016,934 |  |  |  | 5,058,555 |  |  |  | 5,137,587 |  |  |  | 5,058,555 |
Noninterest-bearing deposits |  | $ | 1,371,633 |  |  |  | 1,376,782 |  |  |  | 1,604,750 |  |  |  | 1,716,904 |  |  |  | 1,740,432 |  |  |  | 1,371,633 |  |  |  | 1,740,432 |
Interest-bearing deposits |  | $ | 2,385,156 |  |  |  | 2,221,236 |  |  |  | 2,108,061 |  |  |  | 2,129,181 |  |  |  | 2,133,461 |  |  |  | 2,385,156 |  |  |  | 2,133,461 |
Total deposits |  | $ | 3,756,789 |  |  |  | 3,598,018 |  |  |  | 3,712,811 |  |  |  | 3,846,085 |  |  |  | 3,873,893 |  |  |  | 3,756,789 |  |  |  | 3,873,893 |
Total borrowed funds |  | $ | 826,558 |  |  |  | 761,509 |  |  |  | 641,295 |  |  |  | 675,332 |  |  |  | 703,809 |  |  |  | 826,558 |  |  |  | 703,809 |
Total interest-bearing liabilities |  | $ | 3,211,714 |  |  |  | 2,982,745 |  |  |  | 2,749,356 |  |  |  | 2,804,513 |  |  |  | 2,837,270 |  |  |  | 3,211,714 |  |  |  | 2,837,270 |
Shareholders' equity |  | $ | 478,702 |  |  |  | 467,372 |  |  |  | 441,408 |  |  |  | 416,261 |  |  |  | 428,983 |  |  |  | 478,702 |  |  |  | 428,983 |
AVERAGE BALANCES |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Loans |  | $ | 4,017,690 |  |  |  | 3,928,329 |  |  |  | 3,887,967 |  |  |  | 3,814,338 |  |  |  | 3,633,587 |  |  |  | 3,973,256 |  |  |  | 3,559,461 |
Securities |  | $ | 634,607 |  |  |  | 627,628 |  |  |  | 606,390 |  |  |  | 618,043 |  |  |  | 615,733 |  |  |  | 631,137 |  |  |  | 614,532 |
Other interest-earning assets |  | $ | 64,958 |  |  |  | 31,081 |  |  |  | 179,507 |  |  |  | 294,969 |  |  |  | 530,571 |  |  |  | 48,113 |  |  |  | 656,682 |
Total earning assets (before allowance) |  | $ | 4,717,255 |  |  |  | 4,587,038 |  |  |  | 4,673,864 |  |  |  | 4,727,350 |  |  |  | 4,779,891 |  |  |  | 4,652,506 |  |  |  | 4,830,675 |
Total assets |  | $ | 4,988,413 |  |  |  | 4,855,877 |  |  |  | 4,949,868 |  |  |  | 5,025,998 |  |  |  | 5,077,458 |  |  |  | 4,922,511 |  |  |  | 5,122,758 |
Noninterest-bearing deposits |  | $ | 1,361,901 |  |  |  | 1,491,477 |  |  |  | 1,722,632 |  |  |  | 1,723,609 |  |  |  | 1,706,349 |  |  |  | 1,426,331 |  |  |  | 1,666,125 |
Interest-bearing deposits |  | $ | 2,278,877 |  |  |  | 2,184,406 |  |  |  | 2,077,547 |  |  |  | 2,144,047 |  |  |  | 2,201,797 |  |  |  | 2,231,902 |  |  |  | 2,282,667 |
Total deposits |  | $ | 3,640,778 |  |  |  | 3,675,883 |  |  |  | 3,800,179 |  |  |  | 3,867,656 |  |  |  | 3,908,146 |  |  |  | 3,658,233 |  |  |  | 3,948,792 |
Total borrowed funds |  | $ | 827,105 |  |  |  | 676,724 |  |  |  | 667,864 |  |  |  | 689,091 |  |  |  | 705,774 |  |  |  | 752,330 |  |  |  | 706,621 |
Total interest-bearing liabilities |  | $ | 3,105,982 |  |  |  | 2,861,130 |  |  |  | 2,745,411 |  |  |  | 2,833,138 |  |  |  | 2,907,571 |  |  |  | 2,984,232 |  |  |  | 2,989,288 |
Shareholders' equity |  | $ | 473,983 |  |  |  | 453,524 |  |  |  | 426,897 |  |  |  | 430,093 |  |  |  | 428,873 |  |  |  | 483,810 |  |  |  | 439,310 |