EX-99.1 2 ex_581307.htm EXHIBIT 99.1

Exhibit 99.1

Mercantile Bank Corporation Announces Robust Third Quarter 2023 Results

Substantial year-over-year increase in net interest income, ongoing loan portfolio expansion, and sustained strength in asset quality metrics highlight quarter

Mercantile Bank Corporation also announces newly appointed members to Corporate and Bank Boards of Directors

GRAND RAPIDS, Mich., October 17, 2023 – Mercantile Bank Corporation (NASDAQ: MBWM) ("Mercantile") reported net income of $20.9 million, or $1.30 per diluted share, for the third quarter of 2023, compared with net income of $16.0 million, or $1.01 per diluted share, for the respective prior-year period. Net income during the first nine months of 2023 totaled $62.2 million, or $3.89 per diluted share, compared with net income of $39.3 million, or $2.48 per diluted share, during the first nine months of 2022.

“We are very pleased with our third quarter financial results, especially when considering the challenging operating conditions and uncertain economic environment that we continued to face,” said Robert B. Kaminski, Jr., President and Chief Executive Officer of Mercantile. “Our strong operating results were propelled by enhanced net interest income, which was up nearly 16 percent in the third quarter of 2023 compared to the respective prior-year period primarily due to a higher net interest margin and growth in the commercial loan and residential mortgage loan portfolios. As evidenced by the ongoing loan portfolio expansion and strength in asset quality metrics, we remain committed to employing sound underwriting standards to meet the credit needs of our existing customers and foster loan relationships with new clients. We believe our strong capital position will allow us to endure any issues stemming from shifting economic conditions.”

Third quarter highlights include:

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

| ● | Noteworthy increases in several key fee income categories

| ● | Ongoing growth in commercial loan and residential mortgage loan portfolios

| ● | Continuing strength in commercial loan pipeline

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

| ● | Strong capital position

Operating Results

Total revenue, consisting of net interest income and noninterest income, was $58.2 million during the third quarter of 2023, up $8.6 million, or 17.2 percent, from $49.6 million during the prior-year third quarter. Net interest income during the third quarter of 2023 was $49.0 million, up $6.6 million, or 15.5 percent, from $42.4 million during the respective 2022 period, primarily due to increased yields on earning assets and loan growth. Noninterest income totaled $9.2 million during the third quarter of 2023, compared to $7.3 million during the third quarter of 2022. Excluding a gain on the sale of other real estate owned, noninterest income increased $1.6 million, or nearly 22 percent, in the third quarter of 2023 compared with the prior-year third quarter mainly due to higher levels of mortgage banking income, interest rate swap income, bank owned life insurance income, credit and debit card income, and payroll processing fees.

The net interest margin was 3.98 percent in the third quarter of 2023, up from 3.56 percent in the prior-year third quarter. The yield on average earning assets was 5.78 percent during the current-year third quarter, an increase from 4.04 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 6.37 percent during the third quarter of 2023, up from 4.56 percent during the third quarter of 2022 mainly due to higher interest rates on variable-rate commercial loans resulting from the Federal Open Market Committee (“FOMC”) substantially raising the targeted federal funds rate in an effort to reduce elevated inflation levels. The FOMC increased the targeted federal funds rate by 375 basis points during the period of July 2022 through July 2023, during which time average variable-rate commercial loans represented approximately 65 percent of average total commercial loans.

The cost of funds was 1.80 percent in the third quarter of 2023, up from 0.48 percent in the third 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 noninterest-bearing and lower-cost deposits and an increase in higher-cost money market accounts and time deposits, reflecting deposit migration and new deposit relationships.

Mercantile recorded provisions for credit losses of $3.3 million and $2.9 million during the third quarters of 2023 and 2022, respectively. The provision expense recorded during the current-year third quarter mainly reflected the establishment of a specific reserve for a distressed commercial loan relationship, a qualitative factor assessment for local economic conditions reflecting the ongoing United Auto Workers strike, and allocations necessitated by net loan growth. The provision expense recorded during the third quarter of 2022 primarily 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.

Noninterest income during the third quarter of 2023 was $9.2 million, compared to $7.3 million during the respective 2022 period. Noninterest income during the third quarter of 2023 included a $0.4 million gain on the sale of other real estate owned. Excluding the impact of this transaction, noninterest income increased $1.6 million, or approximately 22 percent, during the third quarter of 2023 compared with the prior-year third quarter. The higher level of noninterest income mainly stemmed from increased mortgage banking income, interest rate swap income, bank owned life insurance income, credit and debit card income, and payroll servicing fees, which more than offset decreased service charges on accounts. The increase in mortgage banking income largely reflected a higher loan sold percentage, which increased from approximately 36 percent in the second quarter of 2022 to approximately 64 percent in the third quarter of 2023. The growth in interest rate swap income, credit and debit card income, and payroll servicing fees primarily resulted from the successful marketing of products and services to existing and new customers. The decline in service charges on accounts reflected increased earnings credit rates in response to the increasing interest rate environment.

Noninterest expense totaled $28.9 million during the third quarter of 2023, compared to $26.8 million during the prior-year third quarter. The increase in noninterest expense primarily stemmed from larger salary costs, which outweighed decreased residential mortgage lender commissions and incentives and a lower bonus accrual. The higher level of salary expense mainly resulted from annual merit pay increases and market adjustments, as well as lower residential mortgage loan deferred salary costs. The decreased residential mortgage lender commissions and incentives primarily stemmed from reduced loan production. The increase in overhead costs during the third quarter of 2023 also resulted from higher levels of Federal Deposit Insurance Corporation deposit insurance premiums, reflecting an increased industry-wide assessment rate, contributions to The Mercantile Bank Foundation, and interest rate swap collateral holding costs.

Mr. Kaminski commented, “The notable upticks in net interest income during the third quarter and first nine months of 2023 compared to the respective 2022 periods mainly reflected significant net interest margin expansion and ongoing loan growth. We are pleased with the increases in several key fee income revenue streams, including mortgage banking income, which grew in large part due to the success of a strategic initiative that was implemented to enhance the residential mortgage loan sold percentage. As part of our efforts to control overhead costs while meeting balance sheet growth objectives, we are constantly reviewing and scrutinizing our operating expenses, including those associated with our branch footprint, to identify additional opportunities to improve efficiency while maintaining our customer service standards.”

Balance Sheet

As of September 30, 2023, total assets were $5.25 billion, up $378 million from December 31, 2022. Total loans increased $188 million, or an annualized 6.4 percent, during the first nine months of 2023, mainly reflecting growth in residential mortgage loans and commercial loans of $99.1 million and $87.0 million, respectively. Commercial loans and residential mortgage loans were up $30.2 million and $21.0 million, respectively, during the third quarter of 2023. Commercial loans increased despite the full payoffs and partial paydowns of certain larger relationships, which aggregated approximately $73 million and $246 million during the third quarter and first nine months of 2023, respectively. The payoffs and paydowns mainly stemmed from customers using excess cash flows generated within their operations to make line of credit and unscheduled principal paydowns, as well as from refinancing debt on the secondary market. Interest-earning deposits increased $167 million during the first nine months of 2023, in large part reflecting a strategic initiative to enhance on-balance sheet liquidity.

As of September 30, 2023, 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 expected to be largely funded over the next 12 months, totaled $379 million and $54.0 million, respectively.

Ray Reitsma, President of Mercantile Bank, noted, “We are pleased with the growth in the commercial loan portfolio during the third quarter and first nine months of 2023, which was achieved despite elevated levels of full and partial payoffs and paydowns. Our strong commercial loan pipeline and credit availability for commercial construction and development loans provide opportunities for future portfolio expansion. The residential mortgage loan portfolio grew once again, as it did during all of 2022 and the first six months of 2023, in spite of sustained challenging market conditions, including the higher interest rate environment and limited housing inventory levels.”

Commercial and industrial loans and owner-occupied commercial real estate loans combined represented approximately 57 percent of total commercial loans as of September 30, 2023, a level that has remained relatively consistent with prior periods and in line with Mercantile’s expectations.

Total deposits at September 30, 2023, were $3.90 billion, up $144 million, or 3.8 percent, from June 30, 2023, and $188 million, or 5.1 percent, from December 31, 2022. Local deposits increased $144 million and $76.6 million during the third quarter and first nine months of 2023, respectively, while brokered deposits grew $111 million during the first nine months of 2023, all of which occurred during the second quarter. The growth in local deposits during the first nine months of 2023 mainly depicted the anticipated buildup in existing customers’ deposit balances that began after they made customary tax and bonus payments and partnership distributions during the first quarter of 2023, along with deposit generation from new client relationships. Wholesale funds, consisting of brokered deposits and Federal Home Loan Bank of Indianapolis advances, were $569 million, or approximately 13 percent of total funds, at September 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 nine months of 2023 to increase on-balance sheet liquidity and offset loan growth, seasonal deposit withdrawals, and wholesale fund maturities. Noninterest-bearing checking accounts comprised about 34 percent of total deposits as of September 30, 2023.

Asset Quality

Nonperforming assets totaled $5.9 million at September 30, 2023, compared to $2.8 million, $8.4 million, $7.7 million, and $1.4 million at June 30, 2023, March 31, 2023, December 31, 2022, and September 30, 2022, respectively, with each dollar amount representing less than 0.2 percent of total assets as of the respective dates. The increase in nonperforming assets during the third quarter of 2023 primarily reflected the deterioration of one commercial loan relationship, which was placed on nonaccrual during the current quarter; this relationship accounted for approximately 62 percent of total nonperforming assets as of September 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 nine months of 2023. During the third quarter of 2023, loan charge-offs of $0.2 million slightly exceeded recoveries of prior period loan charge-offs, providing for a negligible level of net loan charge-offs.

Mr. Reitsma remarked, “Our unwavering focus on underwriting loans in a sound and cautious manner is reflected in our consistently strong asset quality metrics. We continue to judiciously monitor our commercial loan portfolio for any signs of distress resulting from the current operating environment, such as the negative impact of higher interest rates on borrowers’ debt service coverage ratios. As evidenced by ongoing low levels of past due loans and loan charge-offs, our commercial borrowers are demonstrating the ability to successfully navigate through various operating challenges and meet increased debt service requirements. Our credit monitoring tools, including a vigorous loan review program and early identification and reporting of stressed credit relationships, should allow us to limit the impact of any recognized credit issues on our overall financial performance and standing. We have not witnessed any signs of systemic credit deterioration, such as increased delinquency levels, in our residential mortgage loan and consumer loan portfolios and continue to be pleased with the performance of both portfolios.”

Capital Position

Shareholders’ equity totaled $483 million as of September 30, 2023, up $41.8 million from year-end 2022. Mercantile Bank maintains a “well-capitalized” position, with its total risk-based capital ratio at 13.9 percent as of September 30, 2023, compared to 13.7 percent on December 31, 2022. At September 30, 2023, Mercantile Bank had approximately $189 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 September 30, 2023, the net unrealized loss on these investments totaled $93.1 million, resulting in an after-tax reduction to equity capital of $73.6 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 16,023,350 total shares outstanding at September 30, 2023.

Mr. Kaminski remarked, “Our sustained strong financial performance has enabled us to continue our regular cash dividend program and consistently provide shareholders with meaningful cash returns on their investments while supporting ongoing loan growth. We believe our solid capital levels, outstanding asset quality metrics, strong operating performance, and continued strength in our commercial loan pipeline will enable us to withstand any issues arising from changing economic conditions and deliver sound financial results during the fourth quarter of 2023 and beyond as we strive to remain a steady and profitable performer.”

Newly Appointed Mercantile and Mercantile Bank Board of Director Members

Mr. Kaminski stated, “I am very pleased to announce additions to both Mercantile’s and Mercantile Bank’s Board of Directors. Amy Sparks and Ray Reitsma, who are currently serving as board members of Mercantile Bank’s Directorate and will continue to do so, have been appointed to Mercantile’s Board of Directors, while Sara Schmidt and Richard MacDonald have been selected to serve on Mercantile Bank’s Board of Directors.”

Ms. Sparks, who joined Mercantile Bank’s Board in 2022, is the Owner, President, and Chief Executive Officer of Nuvar, Inc., a Michigan-based manufacturing company specializing in finished product contract manufacturing for the office furniture, health care, education, appliance, and transportation industries. Ms. Sparks is also a Certified Public Accountant and has nearly three decades of demonstrated expertise and success in solidifying financial performance, enhancing organizational development, diversifying into new markets, and increasing employee engagement.

Mr. Reitsma has served in many vital roles for Mercantile and Mercantile Bank, currently serving as Chief Operating Officer and Executive Vice President of Mercantile, positions he has held since January 1, 2022, and May 24, 2018, respectively, and President of Mercantile Bank, a position he was appointed to on January 1, 2017. Mr. Reitsma’s areas of responsibility have included commercial lending, treasury and cash management, mortgage lending, operations, risk management, retail and branch activities, and credit administration. Mr. Reitsma was also very instrumental in the preparation, transition and integration periods surrounding the merger with Firstbank Corporation in 2014.

Ms. Schmidt is Senior Vice President and Chief Information Security Officer for US Foods, which is a leading foodservice distributor that provides customers with a broad and innovative food offering and comprehensive suite of e-commerce, technology, and business solutions. Ms. Schmidt has over twenty years of leadership experience in the field of information and cyber security across diverse industries and has also served as a Branch Chief for the National Security Agency (U.S. Department of Defense). Ms. Schmidt received her Bachelor of Science in Mathematics from Aquinas College and her Master of Science in Applied and Computational Mathematics from Johns Hopkins University, Whiting School of Engineering. She holds the designation of Certified Information Systems Security Professional (CISSP).

Mr. MacDonald has been with The Hinman Company, a commercial real estate investment, development, and management company, since 1989, currently serving as Chief Operating Officer. Mr. MacDonald has been involved in significant land assemblages, acquisitions, and developments, including urban and suburban, multi-family apartments, shopping centers, office buildings, hotels, mixed-use, technology and research, historic redevelopment, and high-rise projects. Mr. MacDonald graduated from Western Michigan University with a BBA in Accountancy and a minor in Finance.

Mr. Kaminski concluded, “The diverse backgrounds of these individuals and their demonstrated business acumen will assist both Boards in fulfilling their corporate responsibilities. We are thrilled that they have joined our already high-functioning Boards and are excited to see the positive impacts they will have on our Boards’ activities and oversight duties.”

Investor Presentation

Mercantile has prepared presentation materials that management intends to use during its previously announced third quarter 2023 conference call on Tuesday, October 17, 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 $5.2 billion and operates 45 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

Third Quarter 2023 Results

MERCANTILE BANK CORPORATION

CONSOLIDATED BALANCE SHEETS

(Unaudited)

|  | SEPTEMBER 30, |  |  | DECEMBER 31, |  |  | SEPTEMBER 30, |
|  | 2023 |  |  | 2022 |  |  | 2022 |
ASSETS |  |  |  |  |  |  |  |  |  |  |  |
Cash and due from banks |  | $ | 64,551,000 |  |  | $ | 61,894,000 |  |  | $ | 63,105,000 |
Other interest-earning assets |  |  | 201,436,000 |  |  |  | 34,878,000 |  |  |  | 220,909,000 |
Total cash and cash equivalents |  |  | 265,987,000 |  |  |  | 96,772,000 |  |  |  | 284,014,000 |
Securities available for sale |  |  | 592,305,000 |  |  |  | 602,936,000 |  |  |  | 582,999,000 |
Federal Home Loan Bank stock |  |  | 21,513,000 |  |  |  | 17,721,000 |  |  |  | 17,721,000 |
Mortgage loans held for sale |  |  | 10,171,000 |  |  |  | 3,565,000 |  |  |  | 14,411,000 |
Loans |  |  | 4,104,376,000 |  |  |  | 3,916,619,000 |  |  |  | 3,880,958,000 |
Allowance for credit losses |  |  | (48,008,000 | ) |  |  | (42,246,000 | ) |  |  | (39,120,000 | )
Loans, net |  |  | 4,056,368,000 |  |  |  | 3,874,373,000 |  |  |  | 3,841,838,000 |
Premises and equipment, net |  |  | 52,231,000 |  |  |  | 51,476,000 |  |  |  | 52,117,000 |
Bank owned life insurance |  |  | 81,907,000 |  |  |  | 80,727,000 |  |  |  | 75,880,000 |
Goodwill |  |  | 49,473,000 |  |  |  | 49,473,000 |  |  |  | 49,473,000 |
Core deposit intangible, net |  |  | 212,000 |  |  |  | 583,000 |  |  |  | 741,000 |
Other assets |  |  | 120,845,000 |  |  |  | 94,993,000 |  |  |  | 97,740,000 |
Total assets |  | $ | 5,251,012,000 |  |  | $ | 4,872,619,000 |  |  | $ | 5,016,934,000 |
LIABILITIES AND SHAREHOLDERS' EQUITY |  |  |  |  |  |  |  |  |  |  |  |
Deposits: |  |  |  |  |  |  |  |  |  |  |  |
Noninterest-bearing |  | $ | 1,309,672,000 |  |  | $ | 1,604,750,000 |  |  | $ | 1,716,904,000 |
Interest-bearing |  |  | 2,591,063,000 |  |  |  | 2,108,061,000 |  |  |  | 2,129,181,000 |
Total deposits |  |  | 3,900,735,000 |  |  |  | 3,712,811,000 |  |  |  | 3,846,085,000 |
Securities sold under agreements to repurchase |  |  | 164,082,000 |  |  |  | 194,340,000 |  |  |  | 198,605,000 |
Federal Home Loan Bank advances |  |  | 457,910,000 |  |  |  | 308,263,000 |  |  |  | 338,263,000 |
Subordinated debentures |  |  | 49,473,000 |  |  |  | 48,958,000 |  |  |  | 48,787,000 |
Subordinated notes |  |  | 88,885,000 |  |  |  | 88,628,000 |  |  |  | 88,542,000 |
Accrued interest and other liabilities |  |  | 106,716,000 |  |  |  | 78,211,000 |  |  |  | 80,391,000 |
Total liabilities |  |  | 4,767,801,000 |  |  |  | 4,431,211,000 |  |  |  | 4,600,673,000 |
SHAREHOLDERS' EQUITY |  |  |  |  |  |  |  |  |  |  |  |
Common stock |  |  | 293,961,000 |  |  |  | 290,436,000 |  |  |  | 289,219,000 |
Retained earnings |  |  | 262,838,000 |  |  |  | 216,313,000 |  |  |  | 199,505,000 |
Accumulated other comprehensive income/(loss) |  |  | (73,588,000 | ) |  |  | (65,341,000 | ) |  |  | (72,463,000 | )
Total shareholders' equity |  |  | 483,211,000 |  |  |  | 441,408,000 |  |  |  | 416,261,000 |
Total liabilities and shareholders' equity |  | $ | 5,251,012,000 |  |  | $ | 4,872,619,000 |  |  | $ | 5,016,934,000 |

Mercantile Bank Corporation

Third Quarter 2023 Results

MERCANTILE BANK CORPORATION

CONSOLIDATED REPORTS OF INCOME

(Unaudited)

|  | THREE MONTHS ENDED |  |  | THREE MONTHS ENDED |  |  | NINE MONTHS ENDED |  |  | NINE MONTHS ENDED |
|  | September 30, 2023 |  |  | September 30, 2022 |  |  | September 30, 2023 |  |  | September 30, 2022 |
INTEREST INCOME |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Loans, including fees |  | $ | 65,073,000 |  |  | $ | 43,807,000 |  |  | $ | 184,232,000 |  |  | $ | 113,061,000 |
Investment securities |  |  | 3,273,000 |  |  |  | 2,702,000 |  |  |  | 9,392,000 |  |  |  | 7,496,000 |
Other interest-earning assets |  |  | 2,807,000 |  |  |  | 1,620,000 |  |  |  | 3,932,000 |  |  |  | 3,004,000 |
Total interest income |  |  | 71,153,000 |  |  |  | 48,129,000 |  |  |  | 197,556,000 |  |  |  | 123,561,000 |
INTEREST EXPENSE |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Deposits |  |  | 16,143,000 |  |  |  | 2,299,000 |  |  |  | 36,429,000 |  |  |  | 5,997,000 |
Short-term borrowings |  |  | 693,000 |  |  |  | 53,000 |  |  |  | 2,066,000 |  |  |  | 153,000 |
Federal Home Loan Bank advances |  |  | 3,270,000 |  |  |  | 1,755,000 |  |  |  | 8,115,000 |  |  |  | 5,530,000 |
Other borrowed money |  |  | 2,086,000 |  |  |  | 1,646,000 |  |  |  | 6,049,000 |  |  |  | 4,294,000 |
Total interest expense |  |  | 22,192,000 |  |  |  | 5,753,000 |  |  |  | 52,659,000 |  |  |  | 15,974,000 |
Net interest income |  |  | 48,961,000 |  |  |  | 42,376,000 |  |  |  | 144,897,000 |  |  |  | 107,587,000 |
Provision for credit losses |  |  | 3,300,000 |  |  |  | 2,900,000 |  |  |  | 5,900,000 |  |  |  | 3,500,000 |
Net interest income after provision for credit losses |  |  | 45,661,000 |  |  |  | 39,476,000 |  |  |  | 138,997,000 |  |  |  | 104,087,000 |
NONINTEREST INCOME |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Service charges on accounts |  |  | 1,370,000 |  |  |  | 1,579,000 |  |  |  | 3,411,000 |  |  |  | 4,489,000 |
Credit and debit card income |  |  | 2,232,000 |  |  |  | 2,086,000 |  |  |  | 6,717,000 |  |  |  | 6,101,000 |
Mortgage banking income |  |  | 2,779,000 |  |  |  | 1,764,000 |  |  |  | 5,829,000 |  |  |  | 6,991,000 |
Interest rate swap income |  |  | 937,000 |  |  |  | 566,000 |  |  |  | 2,722,000 |  |  |  | 2,347,000 |
Payroll services |  |  | 591,000 |  |  |  | 533,000 |  |  |  | 1,908,000 |  |  |  | 1,635,000 |
Earnings on bank owned life insurance |  |  | 422,000 |  |  |  | 238,000 |  |  |  | 1,224,000 |  |  |  | 1,310,000 |
Gain on sale of other real estate owned |  |  | 391,000 |  |  |  | 27,000 |  |  |  | 391,000 |  |  |  | 47,000 |
Other income |  |  | 524,000 |  |  |  | 487,000 |  |  |  | 1,640,000 |  |  |  | 1,399,000 |
Total noninterest income |  |  | 9,246,000 |  |  |  | 7,280,000 |  |  |  | 23,842,000 |  |  |  | 24,319,000 |
NONINTEREST EXPENSE |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Salaries and benefits |  |  | 17,258,000 |  |  |  | 16,656,000 |  |  |  | 50,401,000 |  |  |  | 47,842,000 |
Occupancy |  |  | 2,241,000 |  |  |  | 2,001,000 |  |  |  | 6,629,000 |  |  |  | 6,168,000 |
Furniture and equipment |  |  | 894,000 |  |  |  | 953,000 |  |  |  | 2,594,000 |  |  |  | 2,822,000 |
Data processing costs |  |  | 3,038,000 |  |  |  | 3,139,000 |  |  |  | 9,081,000 |  |  |  | 9,203,000 |
Charitable foundation contributions |  |  | 404,000 |  |  |  | 4,000 |  |  |  | 416,000 |  |  |  | 509,000 |
Other expense |  |  | 5,085,000 |  |  |  | 4,030,000 |  |  |  | 16,228,000 |  |  |  | 12,943,000 |
Total noninterest expense |  |  | 28,920,000 |  |  |  | 26,783,000 |  |  |  | 85,349,000 |  |  |  | 79,487,000 |
Income before federal income tax expense |  |  | 25,987,000 |  |  |  | 19,973,000 |  |  |  | 77,490,000 |  |  |  | 48,919,000 |
Federal income tax expense |  |  | 5,132,000 |  |  |  | 3,943,000 |  |  |  | 15,303,000 |  |  |  | 9,659,000 |
Net Income |  | $ | 20,855,000 |  |  | $ | 16,030,000 |  |  | $ | 62,187,000 |  |  | $ | 39,260,000 |
Basic earnings per share |  | $ | 1.30 |  |  | $ | 1.01 |  |  | $ | 3.89 |  |  | $ | 2.48 |
Diluted earnings per share |  | $ | 1.30 |  |  | $ | 1.01 |  |  | $ | 3.89 |  |  | $ | 2.48 |
Average basic shares outstanding |  |  | 16,018,419 |  |  |  | 15,861,551 |  |  |  | 16,006,058 |  |  |  | 15,850,422 |
Average diluted shares outstanding |  |  | 16,018,419 |  |  |  | 15,861,551 |  |  |  | 16,006,058 |  |  |  | 15,850,439 |

Mercantile Bank Corporation

Third Quarter 2023 Results

MERCANTILE BANK CORPORATION

CONSOLIDATED FINANCIAL HIGHLIGHTS

(Unaudited)

|  | Quarterly |  |  | Year-To-Date |
|  | 2023 |  |  | 2023 |  |  | 2023 |  |  | 2022 |  |  | 2022 |  |  |  |  |  |  |
|  | 3rd Qtr |  |  | 2nd Qtr |  |  | 1st Qtr |  |  | 4th Qtr |  |  | 3rd Qtr |  |  | 2023 |  |  | 2022 |
EARNINGS |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Net interest income |  | $ | 48,961 |  |  |  | 47,551 |  |  |  | 48,384 |  |  |  | 50,657 |  |  |  | 42,376 |  |  |  | 144,897 |  |  |  | 107,587 |
Provision for credit losses |  | $ | 3,300 |  |  |  | 2,000 |  |  |  | 600 |  |  |  | 3,050 |  |  |  | 2,900 |  |  |  | 5,900 |  |  |  | 3,500 |
Noninterest income |  | $ | 9,246 |  |  |  | 7,645 |  |  |  | 6,951 |  |  |  | 7,805 |  |  |  | 7,280 |  |  |  | 23,842 |  |  |  | 24,319 |
Noninterest expense |  | $ | 28,920 |  |  |  | 27,829 |  |  |  | 28,599 |  |  |  | 28,541 |  |  |  | 26,783 |  |  |  | 85,349 |  |  |  | 79,487 |
Net income before federal income tax expense |  | $ | 25,987 |  |  |  | 25,367 |  |  |  | 26,136 |  |  |  | 26,871 |  |  |  | 19,973 |  |  |  | 77,490 |  |  |  | 48,919 |
Net income |  | $ | 20,855 |  |  |  | 20,357 |  |  |  | 20,974 |  |  |  | 21,803 |  |  |  | 16,030 |  |  |  | 62,187 |  |  |  | 39,260 |
Basic earnings per share |  | $ | 1.30 |  |  |  | 1.27 |  |  |  | 1.31 |  |  |  | 1.37 |  |  |  | 1.01 |  |  |  | 3.89 |  |  |  | 2.48 |
Diluted earnings per share |  | $ | 1.30 |  |  |  | 1.27 |  |  |  | 1.31 |  |  |  | 1.37 |  |  |  | 1.01 |  |  |  | 3.89 |  |  |  | 2.48 |
Average basic shares outstanding |  |  | 16,018,419 |  |  |  | 16,003,372 |  |  |  | 15,996,138 |  |  |  | 15,887,983 |  |  |  | 15,861,551 |  |  |  | 16,006,058 |  |  |  | 15,850,422 |
Average diluted shares outstanding |  |  | 16,018,419 |  |  |  | 16,003,372 |  |  |  | 15,996,138 |  |  |  | 15,887,983 |  |  |  | 15,861,551 |  |  |  | 16,006,058 |  |  |  | 15,850,439 |
PERFORMANCE RATIOS |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Return on average assets |  |  | 1.60 | % |  |  | 1.64 | % |  |  | 1.75 | % |  |  | 1.75 | % |  |  | 1.27 | % |  |  | 1.66 | % |  |  | 1.03 | %
Return on average equity |  |  | 17.07 | % |  |  | 17.23 | % |  |  | 18.76 | % |  |  | 20.26 | % |  |  | 14.79 | % |  |  | 17.66 | % |  |  | 12.03 | %
Net interest margin (fully tax-equivalent) |  |  | 3.98 | % |  |  | 4.05 | % |  |  | 4.28 | % |  |  | 4.30 | % |  |  | 3.56 | % |  |  | 4.10 | % |  |  | 3.00 | %
Efficiency ratio |  |  | 49.68 | % |  |  | 50.42 | % |  |  | 51.69 | % |  |  | 48.82 | % |  |  | 53.91 | % |  |  | 50.58 | % |  |  | 60.25 | %
Full-time equivalent employees |  |  | 643 |  |  |  | 665 |  |  |  | 633 |  |  |  | 630 |  |  |  | 635 |  |  |  | 643 |  |  |  | 635 |
YIELD ON ASSETS / COST OF FUNDS |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Yield on loans |  |  | 6.37 | % |  |  | 6.19 | % |  |  | 5.90 | % |  |  | 5.49 | % |  |  | 4.56 | % |  |  | 6.16 | % |  |  | 4.15 | %
Yield on securities |  |  | 2.13 | % |  |  | 2.00 | % |  |  | 1.95 | % |  |  | 1.91 | % |  |  | 1.79 | % |  |  | 2.03 | % |  |  | 1.66 | %
Yield on other interest-earning assets |  |  | 5.26 | % |  |  | 4.88 | % |  |  | 4.18 | % |  |  | 3.60 | % |  |  | 2.15 | % |  |  | 5.07 | % |  |  | 0.75 | %
Yield on total earning assets |  |  | 5.78 | % |  |  | 5.61 | % |  |  | 5.35 | % |  |  | 4.95 | % |  |  | 4.04 | % |  |  | 5.59 | % |  |  | 3.45 | %
Yield on total assets |  |  | 5.45 | % |  |  | 5.30 | % |  |  | 5.06 | % |  |  | 4.68 | % |  |  | 3.80 | % |  |  | 5.28 | % |  |  | 3.25 | %
Cost of deposits |  |  | 1.67 | % |  |  | 1.36 | % |  |  | 0.87 | % |  |  | 0.42 | % |  |  | 0.24 | % |  |  | 1.31 | % |  |  | 0.20 | %
Cost of borrowed funds |  |  | 2.98 | % |  |  | 2.90 | % |  |  | 2.51 | % |  |  | 2.13 | % |  |  | 1.99 | % |  |  | 2.82 | % |  |  | 1.90 | %
Cost of interest-bearing liabilities |  |  | 2.69 | % |  |  | 2.37 | % |  |  | 1.72 | % |  |  | 1.10 | % |  |  | 0.81 | % |  |  | 2.28 | % |  |  | 0.73 | %
Cost of funds (total earning assets) |  |  | 1.80 | % |  |  | 1.56 | % |  |  | 1.07 | % |  |  | 0.65 | % |  |  | 0.48 | % |  |  | 1.49 | % |  |  | 0.45 | %
Cost of funds (total assets) |  |  | 1.70 | % |  |  | 1.48 | % |  |  | 1.01 | % |  |  | 0.61 | % |  |  | 0.45 | % |  |  | 1.41 | % |  |  | 0.42 | %
MORTGAGE BANKING ACTIVITY |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Total mortgage loans originated |  | $ | 108,602 |  |  |  | 117,563 |  |  |  | 71,991 |  |  |  | 90,794 |  |  |  | 163,902 |  |  |  | 298,156 |  |  |  | 522,985 |
Purchase mortgage loans originated |  | $ | 93,520 |  |  |  | 100,941 |  |  |  | 56,728 |  |  |  | 79,604 |  |  |  | 140,898 |  |  |  | 251,189 |  |  |  | 399,730 |
Refinance mortgage loans originated |  | $ | 15,082 |  |  |  | 16,622 |  |  |  | 15,263 |  |  |  | 11,190 |  |  |  | 23,004 |  |  |  | 46,967 |  |  |  | 123,255 |
Total saleable mortgage loans |  | $ | 69,305 |  |  |  | 50,734 |  |  |  | 24,904 |  |  |  | 29,948 |  |  |  | 59,740 |  |  |  | 144,943 |  |  |  | 187,815 |
Income on sale of mortgage loans |  | $ | 2,386 |  |  |  | 1,570 |  |  |  | 950 |  |  |  | 1,401 |  |  |  | 1,779 |  |  |  | 4,906 |  |  |  | 6,734 |
CAPITAL |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Tangible equity to tangible assets |  |  | 8.33 | % |  |  | 8.43 | % |  |  | 8.61 | % |  |  | 8.12 | % |  |  | 7.37 | % |  |  | 8.33 | % |  |  | 7.37 | %
Tier 1 leverage capital ratio |  |  | 10.64 | % |  |  | 10.73 | % |  |  | 10.66 | % |  |  | 10.09 | % |  |  | 9.63 | % |  |  | 10.64 | % |  |  | 9.63 | %
Common equity risk-based capital ratio |  |  | 10.41 | % |  |  | 10.25 | % |  |  | 10.25 | % |  |  | 10.08 | % |  |  | 9.80 | % |  |  | 10.41 | % |  |  | 9.80 | %
Tier 1 risk-based capital ratio |  |  | 11.38 | % |  |  | 11.24 | % |  |  | 11.27 | % |  |  | 11.12 | % |  |  | 10.84 | % |  |  | 11.38 | % |  |  | 10.84 | %
Total risk-based capital ratio |  |  | 14.21 | % |  |  | 14.03 | % |  |  | 14.11 | % |  |  | 14.00 | % |  |  | 13.69 | % |  |  | 14.21 | % |  |  | 13.69 | %
Tier 1 capital |  | $ | 554,634 |  |  |  | 537,802 |  |  |  | 520,918 |  |  |  | 503,855 |  |  |  | 485,499 |  |  |  | 554,634 |  |  |  | 485,499 |
Tier 1 plus tier 2 capital |  | $ | 692,252 |  |  |  | 671,323 |  |  |  | 652,509 |  |  |  | 634,729 |  |  |  | 613,161 |  |  |  | 692,252 |  |  |  | 613,161 |
Total risk-weighted assets |  | $ | 4,872,424 |  |  |  | 4,784,428 |  |  |  | 4,623,631 |  |  |  | 4,533,091 |  |  |  | 4,479,176 |  |  |  | 4,872,424 |  |  |  | 4,479,176 |
Book value per common share |  | $ | 30.16 |  |  |  | 29.89 |  |  |  | 29.21 |  |  |  | 27.60 |  |  |  | 26.24 |  |  |  | 30.16 |  |  |  | 26.24 |
Tangible book value per common share |  | $ | 27.06 |  |  |  | 26.78 |  |  |  | 26.09 |  |  |  | 24.47 |  |  |  | 23.07 |  |  |  | 27.06 |  |  |  | 23.07 |
Cash dividend per common share |  | $ | 0.34 |  |  |  | 0.33 |  |  |  | 0.33 |  |  |  | 0.32 |  |  |  | 0.32 |  |  |  | 1.00 |  |  |  | 0.94 |
ASSET QUALITY |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Gross loan charge-offs |  | $ | 243 |  |  |  | 461 |  |  |  | 106 |  |  |  | 72 |  |  |  | 0 |  |  |  | 810 |  |  |  | 220 |
Recoveries |  | $ | 230 |  |  |  | 305 |  |  |  | 137 |  |  |  | 149 |  |  |  | 246 |  |  |  | 672 |  |  |  | 876 |
Net loan charge-offs (recoveries) |  | $ | 13 |  |  |  | 156 |  |  |  | (31 | ) |  |  | (77 | ) |  |  | (246 | ) |  |  | 138 |  |  |  | (656 | )
Net loan charge-offs to average loans |  | < 0.01% |  |  |  | 0.02 | % |  |  | (0.01% | ) |  |  | (0.01% | ) |  |  | (0.03% | ) |  |  | 0.01 | % |  |  | (0.02% | )
Allowance for credit losses |  | $ | 48,008 |  |  |  | 44,721 |  |  |  | 42,877 |  |  |  | 42,246 |  |  |  | 39,120 |  |  |  | 48,008 |  |  |  | 39,120 |
Allowance to loans |  |  | 1.17 | % |  |  | 1.10 | % |  |  | 1.08 | % |  |  | 1.08 | % |  |  | 1.01 | % |  |  | 1.17 | % |  |  | 1.01 | %
Nonperforming loans |  | $ | 5,889 |  |  |  | 2,099 |  |  |  | 7,782 |  |  |  | 7,728 |  |  |  | 1,416 |  |  |  | 5,889 |  |  |  | 1,416 |
Other real estate/repossessed assets |  | $ | 51 |  |  |  | 661 |  |  |  | 661 |  |  |  | 0 |  |  |  | 0 |  |  |  | 51 |  |  |  | 0 |
Nonperforming loans to total loans |  |  | 0.14 | % |  |  | 0.05 | % |  |  | 0.20 | % |  |  | 0.20 | % |  |  | 0.04 | % |  |  | 0.14 | % |  |  | 0.04 | %
Nonperforming assets to total assets |  |  | 0.11 | % |  |  | 0.05 | % |  |  | 0.17 | % |  |  | 0.16 | % |  |  | 0.03 | % |  |  | 0.11 | % |  |  | 0.03 | %
NONPERFORMING ASSETS - COMPOSITION |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Residential real estate: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Land development |  | $ | 1 |  |  |  | 2 |  |  |  | 8 |  |  |  | 29 |  |  |  | 30 |  |  |  | 1 |  |  |  | 30 |
Construction |  | $ | 0 |  |  |  | 0 |  |  |  | 0 |  |  |  | 124 |  |  |  | 0 |  |  |  | 0 |  |  |  | 0 |
Owner occupied / rental |  | $ | 1,913 |  |  |  | 1,793 |  |  |  | 1,952 |  |  |  | 1,304 |  |  |  | 1,138 |  |  |  | 1,913 |  |  |  | 1,138 |
Commercial real estate: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Land development |  | $ | 0 |  |  |  | 0 |  |  |  | 0 |  |  |  | 0 |  |  |  | 0 |  |  |  | 0 |  |  |  | 0 |
Construction |  | $ | 0 |  |  |  | 0 |  |  |  | 0 |  |  |  | 0 |  |  |  | 0 |  |  |  | 0 |  |  |  | 0 |
Owner occupied |  | $ | 738 |  |  |  | 716 |  |  |  | 829 |  |  |  | 248 |  |  |  | 0 |  |  |  | 738 |  |  |  | 0 |
Non-owner occupied |  | $ | 0 |  |  |  | 0 |  |  |  | 0 |  |  |  | 0 |  |  |  | 0 |  |  |  | 0 |  |  |  | 0 |
Non-real estate: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Commercial assets |  | $ | 3,288 |  |  |  | 249 |  |  |  | 5,654 |  |  |  | 6,023 |  |  |  | 248 |  |  |  | 3,288 |  |  |  | 248 |
Consumer assets |  | $ | 0 |  |  |  | 0 |  |  |  | 0 |  |  |  | 0 |  |  |  | 0 |  |  |  | 0 |  |  |  | 0 |
Total nonperforming assets |  | $ | 5,940 |  |  |  | 2,760 |  |  |  | 8,443 |  |  |  | 7,728 |  |  |  | 1,416 |  |  |  | 5,940 |  |  |  | 1,416 |
NONPERFORMING ASSETS - RECON |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Beginning balance |  | $ | 2,760 |  |  |  | 8,443 |  |  |  | 7,728 |  |  |  | 1,416 |  |  |  | 1,787 |  |  |  | 7,728 |  |  |  | 2,468 |
Additions |  | $ | 4,163 |  |  |  | 273 |  |  |  | 1,323 |  |  |  | 6,368 |  |  |  | 0 |  |  |  | 5,759 |  |  |  | 402 |
Return to performing status |  | $ | 0 |  |  |  | 0 |  |  |  | (31 | ) |  |  | 0 |  |  |  | (160 | ) |  |  | (31 | ) |  |  | (373 | )
Principal payments |  | $ | (166 | ) |  |  | (5,526 | ) |  |  | (515 | ) |  |  | (56 | ) |  |  | (211 | ) |  |  | (6,207 | ) |  |  | (986 | )
Sale proceeds |  | $ | (661 | ) |  |  | 0 |  |  |  | 0 |  |  |  | 0 |  |  |  | 0 |  |  |  | (661 | ) |  |  | 0 |
Loan charge-offs |  | $ | (156 | ) |  |  | (430 | ) |  |  | (62 | ) |  |  | 0 |  |  |  | 0 |  |  |  | (648 | ) |  |  | (95 | )
Valuation write-downs |  | $ | 0 |  |  |  | 0 |  |  |  | 0 |  |  |  | 0 |  |  |  | 0 |  |  |  | 0 |  |  |  | 0 |
Ending balance |  | $ | 5,940 |  |  |  | 2,760 |  |  |  | 8,443 |  |  |  | 7,728 |  |  |  | 1,416 |  |  |  | 5,940 |  |  |  | 1,416 |
LOAN PORTFOLIO COMPOSITION |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Commercial: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Commercial & industrial |  | $ | 1,166,187 |  |  |  | 1,212,196 |  |  |  | 1,173,440 |  |  |  | 1,185,084 |  |  |  | 1,213,630 |  |  |  | 1,166,187 |  |  |  | 1,213,630 |
Land development & construction |  | $ | 72,921 |  |  |  | 72,682 |  |  |  | 66,233 |  |  |  | 61,873 |  |  |  | 60,970 |  |  |  | 72,921 |  |  |  | 60,970 |
Owner occupied comm'l R/E |  | $ | 671,083 |  |  |  | 659,201 |  |  |  | 630,186 |  |  |  | 639,192 |  |  |  | 643,577 |  |  |  | 671,083 |  |  |  | 643,577 |
Non-owner occupied comm'l R/E |  | $ | 1,000,411 |  |  |  | 957,221 |  |  |  | 975,735 |  |  |  | 979,214 |  |  |  | 963,144 |  |  |  | 1,000,411 |  |  |  | 963,144 |
Multi-family & residential rental |  | $ | 308,229 |  |  |  | 287,285 |  |  |  | 294,825 |  |  |  | 266,468 |  |  |  | 263,741 |  |  |  | 308,229 |  |  |  | 263,741 |
Total commercial |  | $ | 3,218,831 |  |  |  | 3,188,585 |  |  |  | 3,140,419 |  |  |  | 3,131,831 |  |  |  | 3,145,062 |  |  |  | 3,218,831 |  |  |  | 3,145,062 |
Retail: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
1-4 family mortgages & home equity |  | $ | 854,174 |  |  |  | 833,198 |  |  |  | 795,009 |  |  |  | 755,035 |  |  |  | 705,442 |  |  |  | 854,174 |  |  |  | 705,442 |
Other consumer |  | $ | 31,371 |  |  |  | 30,060 |  |  |  | 30,100 |  |  |  | 29,753 |  |  |  | 30,454 |  |  |  | 31,371 |  |  |  | 30,454 |
Total retail |  | $ | 885,545 |  |  |  | 863,258 |  |  |  | 825,109 |  |  |  | 784,788 |  |  |  | 735,896 |  |  |  | 885,545 |  |  |  | 735,896 |
Total loans |  | $ | 4,104,376 |  |  |  | 4,051,843 |  |  |  | 3,965,528 |  |  |  | 3,916,619 |  |  |  | 3,880,958 |  |  |  | 4,104,376 |  |  |  | 3,880,958 |
END OF PERIOD BALANCES |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Loans |  | $ | 4,104,376 |  |  |  | 4,051,843 |  |  |  | 3,965,528 |  |  |  | 3,916,619 |  |  |  | 3,880,958 |  |  |  | 4,104,376 |  |  |  | 3,880,958 |
Securities |  | $ | 613,818 |  |  |  | 630,485 |  |  |  | 637,694 |  |  |  | 620,657 |  |  |  | 600,720 |  |  |  | 613,818 |  |  |  | 600,720 |
Other interest-earning assets |  | $ | 201,436 |  |  |  | 138,663 |  |  |  | 10,787 |  |  |  | 34,878 |  |  |  | 220,909 |  |  |  | 201,436 |  |  |  | 220,909 |
Total earning assets (before allowance) |  | $ | 4,919,630 |  |  |  | 4,820,991 |  |  |  | 4,614,009 |  |  |  | 4,572,154 |  |  |  | 4,702,587 |  |  |  | 4,919,630 |  |  |  | 4,702,587 |
Total assets |  | $ | 5,251,012 |  |  |  | 5,137,587 |  |  |  | 4,895,874 |  |  |  | 4,872,619 |  |  |  | 5,016,934 |  |  |  | 5,251,012 |  |  |  | 5,016,934 |
Noninterest-bearing deposits |  | $ | 1,309,672 |  |  |  | 1,371,633 |  |  |  | 1,376,782 |  |  |  | 1,604,750 |  |  |  | 1,716,904 |  |  |  | 1,309,672 |  |  |  | 1,716,904 |
Interest-bearing deposits |  | $ | 2,591,063 |  |  |  | 2,385,156 |  |  |  | 2,221,236 |  |  |  | 2,108,061 |  |  |  | 2,129,181 |  |  |  | 2,591,063 |  |  |  | 2,129,181 |
Total deposits |  | $ | 3,900,735 |  |  |  | 3,756,789 |  |  |  | 3,598,018 |  |  |  | 3,712,811 |  |  |  | 3,846,085 |  |  |  | 3,900,735 |  |  |  | 3,846,085 |
Total borrowed funds |  | $ | 761,431 |  |  |  | 826,558 |  |  |  | 761,509 |  |  |  | 641,295 |  |  |  | 675,332 |  |  |  | 761,431 |  |  |  | 675,332 |
Total interest-bearing liabilities |  | $ | 3,352,494 |  |  |  | 3,211,714 |  |  |  | 2,982,745 |  |  |  | 2,749,356 |  |  |  | 2,804,513 |  |  |  | 3,352,494 |  |  |  | 2,804,513 |
Shareholders' equity |  | $ | 483,211 |  |  |  | 478,702 |  |  |  | 467,372 |  |  |  | 441,408 |  |  |  | 416,261 |  |  |  | 483,211 |  |  |  | 416,261 |
AVERAGE BALANCES |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Loans |  | $ | 4,054,279 |  |  |  | 4,017,690 |  |  |  | 3,928,329 |  |  |  | 3,887,967 |  |  |  | 3,814,338 |  |  |  | 4,000,561 |  |  |  | 3,645,353 |
Securities |  | $ | 626,714 |  |  |  | 634,607 |  |  |  | 627,628 |  |  |  | 606,390 |  |  |  | 618,043 |  |  |  | 629,646 |  |  |  | 615,715 |
Other interest-earning assets |  | $ | 208,932 |  |  |  | 64,958 |  |  |  | 31,081 |  |  |  | 179,507 |  |  |  | 294,969 |  |  |  | 102,309 |  |  |  | 534,786 |
Total earning assets (before allowance) |  | $ | 4,889,925 |  |  |  | 4,717,255 |  |  |  | 4,587,038 |  |  |  | 4,673,864 |  |  |  | 4,727,350 |  |  |  | 4,732,516 |  |  |  | 4,795,854 |
Total assets |  | $ | 5,180,847 |  |  |  | 4,988,413 |  |  |  | 4,855,877 |  |  |  | 4,949,868 |  |  |  | 5,025,998 |  |  |  | 5,009,590 |  |  |  | 5,090,150 |
Noninterest-bearing deposits |  | $ | 1,359,238 |  |  |  | 1,361,901 |  |  |  | 1,491,477 |  |  |  | 1,722,632 |  |  |  | 1,723,609 |  |  |  | 1,403,721 |  |  |  | 1,685,497 |
Interest-bearing deposits |  | $ | 2,466,834 |  |  |  | 2,278,877 |  |  |  | 2,184,406 |  |  |  | 2,077,547 |  |  |  | 2,144,047 |  |  |  | 2,311,073 |  |  |  | 2,235,952 |
Total deposits |  | $ | 3,826,072 |  |  |  | 3,640,778 |  |  |  | 3,675,883 |  |  |  | 3,800,179 |  |  |  | 3,867,656 |  |  |  | 3,714,794 |  |  |  | 3,921,449 |
Total borrowed funds |  | $ | 806,376 |  |  |  | 827,105 |  |  |  | 676,724 |  |  |  | 667,864 |  |  |  | 689,091 |  |  |  | 770,543 |  |  |  | 700,713 |
Total interest-bearing liabilities |  | $ | 3,273,210 |  |  |  | 3,105,982 |  |  |  | 2,861,130 |  |  |  | 2,745,411 |  |  |  | 2,833,138 |  |  |  | 3,081,616 |  |  |  | 2,936,665 |
Shareholders' equity |  | $ | 484,624 |  |  |  | 473,983 |  |  |  | 453,524 |  |  |  | 426,897 |  |  |  | 430,093 |  |  |  | 470,824 |  |  |  | 436,204 |