Mercantile Bank Corp. (NASDAQ:MBWM) Q3 2019 Earnings Conference Call - Final Transcript

Oct 15, 2019 • 10:00 am ET


Mercantile Bank Corp. (NASDAQ:MBWM) Q3 2019 Earnings Conference Call - Final Transcript


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Good morning, and welcome to the Mercantile Bank Corporation Third Quarter 2019 Earnings Results Conference Call. All participants will be in listen-only mode. [Operator Instructions] Please note this event is being recorded.

I would now like to turn the conference over to Mike Houston of Investor Relations. Please go ahead.

Mike Houston

Thank you, Eileen. Good morning, everyone, and thank you for joining Mercantile Bank Corporation's conference call and webcast to discuss the company's financial results for the third quarter 2019. I'm Mike Houston with Lambert IR, Mercantile's Investor Relations firm. And joining me today are members of their management team, including Bob Kaminski, President and Chief Executive Officer; Chuck Christmas, Executive Vice President and Chief Financial Officer; and Ray Reitsma, President of Mercantile Bank, Michigan.

We'll begin the call with management's prepared remarks and then open the call up to questions. However, before we begin today's call, it is my responsibility to inform you that this call may involve certain forward-looking statements such as projections of revenue, earnings and capital structure as well as statements on the plans and objectives of the company's business.

The company's actual results could differ materially from any forward-looking statements made today due to the factors described in the company's latest Securities and Exchange Commission filings. The company assumes no obligation to update any forward-looking statements made during the call. If anyone does not already have a copy of the press release issued by Mercantile today, you can access it at the company's website,

At this time, I'd like to turn the call over to Mercantile's President and Chief Executive Officer, Bob Kaminski. Bob?

Robert B. Kaminski

Thanks, Mike, and good morning, everyone. Thank you all for joining us today. On the call, we'll provide an update on our overall performance and financial results, along with our key areas of strategic focus. At the conclusion of our comments, we'll open the call for a question-and-answer session.

We are pleased again to deliver solid operating results for the third quarter, continuing our year-to-date strength. The bank's strong financial condition, accelerating commercial and residential mortgage loan originations and solid loan pipelines give us confidence that the healthy results achieved during the first nine months of the year will provide the foundation for continued strong performance through the rest of 2019 and in future periods.

The third quarter operating performance includes growth in net interest income resulting primarily from a higher level of earning assets. Interest margin remains solid despite rate reductions by the FOMC, reflecting our ongoing emphasis on loan pricing discipline and sound underwriting. Chuck will discuss the margin in more detail later.

Our team's emphasis on building and cultivating value-added relationships continues to successfully attract new customers as well as retain existing clients. Increased non-interest income also led to improved earnings for the quarter. The increase in mortgage banking activity fees was primarily driven by the ongoing success of strategic initiatives that were put in place several quarters ago. Mortgage banking results were also boosted by increase in mortgage