Mercantile Bank Corp (MBWM) Reports Robust Q3 2023 Results with Significant Year-Over-Year ...
Mercantile Bank Corp (NASDAQ:MBWM) reported a net income of $20.9 million for Q3 2023, up from $16.0 million in the same period last year.
Net interest income rose nearly 16% in Q3 2023 compared to the same period in 2022, primarily due to a higher net interest margin and growth in the commercial loan and residential mortgage loan portfolios.
Total revenue for Q3 2023 was $58.2 million, up 17.2% from $49.6 million in Q3 2022.
Mercantile Bank Corp (NASDAQ:MBWM) maintains a "well-capitalized" position, with its total risk-based capital ratio at 13.9% as of September 30, 2023.
Released on October 17, 2023, Mercantile Bank Corp (NASDAQ:MBWM) announced its third-quarter financial results for 2023. The company reported a net income of $20.9 million, or $1.30 per diluted share, compared to $16.0 million, or $1.01 per diluted share, for the same period in 2022. The robust financial results were driven by a nearly 16% increase in net interest income, primarily due to a higher net interest margin and growth in the commercial loan and residential mortgage loan portfolios.
Operating Results
Total revenue for Q3 2023 was $58.2 million, up 17.2% from $49.6 million in Q3 2022. Net interest income for the quarter was $49.0 million, up 15.5% from $42.4 million in the same period in 2022. This increase was 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. The net interest margin was 3.98% in the third quarter of 2023, up from 3.56% in the prior-year third quarter.
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.
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.
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.
Robert B. Kaminski, Jr., President and Chief Executive Officer of Mercantile, commented on the results,
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. 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."
The company also announced the appointment of new members to the Corporate and Bank Boards of Directors, further strengthening its governance and strategic oversight.
This article first appeared on GuruFocus.
