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Mercantile Bank Corporation (MBWM) has reported a 10.93 percent fall in profit for the quarter ended Mar. 31, 2017. The company has earned $7.62 million, or $0.46 a share in the quarter, compared with $8.55 million, or $0.52 a share for the same period last year.
Revenue during the quarter dropped 4.97 percent to $30.76 million from $32.37 million in the previous year period. Net interest income for the quarter dropped 1.44 percent over the prior year period to $25.51 million. Non-interest income for the quarter fell 17.43 percent over the last year period to $5.85 million.
Net interest margin contracted 19 basis points to 3.73 percent in the quarter from 3.92 percent in the last year period. Efficiency ratio for the quarter deteriorated to 63.06 percent from 60.26 percent in the previous year period. A rise in efficiency ratio suggests a fall in profitability.
"We are very excited to begin 2017 with a healthy quarter that reflects sustained strength in profitability and loan originations," said Robert B. Kaminski, Jr., president and chief executive officer of Mercantile. "Our strong financial performance reflects a sound net interest margin, increased fee income, and reduced overhead costs. We are pleased with the net loan growth that was achieved during the quarter, and based on our current commercial loan pipeline, we are confident that solid loan growth can be realized in future periods."
Liabilities outpace assets growth
Total assets stood at $3,018.92 million as on Mar. 31, 2017, up 3.17 percent compared with $2,926.06 million on Mar. 31, 2016. On the other hand, total liabilities stood at $2,670.87 million as on Mar. 31, 2017, up 3.22 percent from $2,587.50 million on Mar. 31, 2016.
Loans outpace deposit growth
Net loans stood at $2,423.04 million as on Mar. 31, 2017, up 6.30 percent compared with $2,279.41 million on Mar. 31, 2016. Deposits stood at $2,278.02 million as on Mar. 31, 2017, up 0.57 percent compared with $2,265.12 million on Mar. 31, 2016. Noninterest-bearing deposit liabilities were $757.71 million or 33.26 percent of total deposits on Mar. 31, 2017, compared with $678.10 million or 29.94 percent of total deposits on Mar. 31, 2016.
Investments stood at $332.44 million as on Mar. 31, 2017, down 3.31 percent or $11.36 million from year-ago. Shareholders equity stood at $348.05 million as on Mar. 31, 2017, up 2.81 percent or $9.50 million from year-ago.
Return on average assets moved down 17 basis points to 1.02 percent in the quarter from 1.19 percent in the last year period. At the same time, return on average equity decreased 119 basis points to 8.99 percent in the quarter from 10.18 percent in the last year period.
Nonperforming assets moved up 23.21 percent or $1.47 million to $7.79 million on Mar. 31, 2017 from $6.32 million on Mar. 31, 2016. Meanwhile, nonperforming assets to total assets was 0.26 percent in the quarter, up from 0.22 percent in the last year period.
Book value per share was $21.13 for the quarter, up 1.29 percent or $0.27 compared to $20.86 for the same period last year.
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