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Published in Finance

Mercantile Bank records strong Q3 commercial loan growth with new clients

BY Wednesday, October 20, 2021 09:24am

GRAND RAPIDS — Mercantile Bank Corp. recorded strong loan growth in the third quarter with an earnings increase of more than 40 percent from a year earlier.

The Grand Rapids-based Mercantile Bank (Nasdaq: MBWM) grew net core commercial loans by $162 million in the July-to-September period for an annualized rate of 25 percent, according to bank President Ray Reitsma. 

Through the first nine months of the year, the bank’s commercial loans have grown $298 million, or at an annualized rate of about 16 percent on the year.

Reitsma told investors Tuesday that Mercantile Bank had a “very strong” backlog going into the present fourth quarter.

The commercial loan growth came from the bank attracting new clients, he said.

“So the activity continues, I’d say unabated from what we have recorded in the historical quarter, and it’s largely comprised of adding new relationships to the roster,” Reitsma said during a conference call with analysts to discuss quarterly results. “Our existing customer base is growing to some degree, but the lion’s share of the growth comes from adding new relationships. ... That relationship banking approach and the ability to deliver that in spite of a challenging environment has just resonated very well in the communities that we serve.”

 

Mercantile Bank recorded $15 million in net income for the third quarter, or 95 cents per diluted share. That compares to $10.6 million, or 66 cents per diluted share, in the same period in 2020.

Net income for the first nine months of the year totaled $47.3 million, or $2.95 per diluted share, versus $30 million, or $1.84 per diluted share, through three quarters in 2020.

“We have a strong foundation (and) momentum headed into the fourth quarter and 2022, and are prepared to capitalize on the ongoing M&A-related disruption in our markets, all in terms of attracting talent and expanding client relationships,” President and CEO Robert Kaminski Jr. said.

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