MBWM - Earnings call transcript Q3 2024 | Mercantile Bank Corporation

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Operator

Good morning, and welcome to the Mercantile Bank Corporation 2024 Third Quarter Earnings Conference Call. [Operator Instructions] Please note this event is being recorded. I would now like to turn the conference over to Nicole Klauder, first, Vice President, Chief Marketing Officer of Mercantile Bank. Please go ahead.

Nichole Kladder

Good morning, and thank you for joining us. the results cover quarter the will XXXX. of we company's for financial third Today, joining morning Chuck me President members Officer. team The this Executive President Chief as Vice and include Officer; well Executive as Christmas, and Financial Chief Reitsma, Ray

with will by remarks will begin Chuck covering this both our references to Our presentation and quarter's and prepared agenda Ray include results.

of today as the sent earlier by You merckbank.com. well can press as access the presentation a visiting copy release

your to will then open After our prepared call remarks, we the questions.

it as begin, in to capital made you forward-looking any revenue, Executive could filings. Commission update we due the statements today. meeting Reisman. responsibility our turn Before is certain the company's today to Chief business. made The any of President the inform statements over obligation I Ray? to objectives as and company's will Ray factors that now results my for differ during involve forward-looking on The may all call. no company described and materially forward-looking earnings latest is and actual the have structure well to from this projections and Securities Exchange Officer, call statements as statements plans such of I the assumes you That company's

Raymond Reitsma

My loan-to-deposit excellent Nicole. asset and will ratio, you, quality growth, income. comments significant local the our growth, loan Thank growing very focus deposit reduction in on strong strong local steadily noninterest

it and not years, growth deposit been commercial mortgage X loan has And last loan with growth. kept growth has growth the solid, loan while Over strong. pace been has

strong profile. contributing to We believe despite valuation to increased ratio our As XXXX. below the year-end is loan-to-deposit peer a loan-to-deposit result, ratio bank's return at the bank's factor elevated a XXX% a

we believe The following further ratio. reductions contribute will in summarize loan-to-deposit our the to comments strategies

ratio approach three-pronged deposit range the reducing objective the of a base the undertaken time. our building with into to loan-to-deposit mid-XX% have We over

borrowings. no entities deposits, broadened or have focus that on limited have our business we including First,

Second, strategic plan public existing to realm through this we governmental space. the with and additions in personnel grow in relationships

growth growing the as or focus are usage. XX% the the rate deposits fixed to quarter rates million, approximately of past increasing activity have retail $XXX annualized increase balances million we substantially customer X transactions led These deposits a environment. as on grown an first Local rather hurdles of the ARMs alone. efforts quarters on local based in over total opted as card third $XXX years rate. sheet XXXX the grew in few loans have in the to balance for Mortgage Third, opposed such borrowers in than

respective We rather portion have outcomes include successfully placed executed changes compared the increase in million production greater resulting a XXXX within banking programs of than first and being the in mortgage income nominal our balance sold in mortgage sheet. balance loans XXXX mortgage The our our X to increase portfolio on months mortgage of positive on year-to-date. $X our period a XX% during of sheet a

also Customer asset sales residential commercial the loan loan X% stands X trend quarter or and $XXX $XXX totals. million, flow loan quarters impacted reflecting line totaled at was funding The to million the cash commercial loans reductions annualized. growth the in of excess quarters XXXX below $XX Commitments in over current construction loans our from million the construction third of X pipeline quarter. or slightly $XXX Commercial $XXX balances last end. at established activity of fund the million first strong and million

expect in a slight we loan in immediate Taking deceleration into the these the commercial growth future. account, factors

effect deposit at growth to to ratio XXXX, year-to-date. ratio when balances. double year-end compared XX% The as Taken to reduces together, as these of loan-to-deposit XXXX growth account total XX, strategies produced XXX% approximately giving of was XXX% loan our a sweep September

funds wholesale balance decreased XX%, of ratio funding from sheet. demonstration XX% the the the the to period, side another strengthening of this to total of of funds During

be assets strong loans and totaled [ at representation XX real remains There commercial non-real exposure consisting estate basis asset no dollars borrowers as class of end points the this $XXX ORE. in million ] monitored estate due quarter or Nonowner-occupied loans. is very assets among in quality have XX% $X.X is and Asset well of commercial assets. points continue or represent performed outstanding The million X% and XX% no of loans. loans, residential total nonperforming there Past of office real is to XX closely. total estate nonperforming basis total

and standards our within underwriting deterioration our any vigilant portfolio. remain We monitoring to identify in

the to defense Our emerging first of areas and lenders are recognize line risk. of observation

environment cash risk and have not fashion. continued in begun any borrower flow, with to to finances. providing within That the our emphasis to results robust customers emerging Our rating prompt report systemic potential experience continue date a recessionary sensitivity model challenges impacts said, any current strong of on the borrowers' is to

grew the growth sell of originations offset to on to on on XX%, and based less with reduced transaction XX% accounts. greater based portion the grew XXXX accounts outlined income a and categories. first Total the strategies secondary XXXX during higher levels reported resulting reflecting the of charges Mortgage activity on and to X grew charges earnings and the market. several quarters in banking XX% first X ability of noninterest Service compared quarters growth earlier balances customer credit

the grew as continue build in marketplace. our services XX% Payroll offerings traction to

Income comments. adjusted the debit borrower's rate X% payment and from second credit our income now expectations. the turn demand over as card renewal with onetime That grew with my Visa X% protection associated I call by declined of the Chuck. for to swaps concludes rate interest of the will from future when a in contract receipt Finally, borrowers shifted quarter interest XXXX. for rate

Charles Christmas

of to $XX.X per per first the X of quarter of compared XXXX. share share the $X.XX This the for Net or share or diluted period. with third XXXX share respective during million $X.XX income XXXX million months Ray. the year net or $X.XX per we diluted Thanks, $XX $XX.X $XX.X compared $X.XX net or morning, diluted prior income first for of diluted announced of per income X million months during totaled million

noninterest income during residential first commercial loans. the periods, mortgage to income interest and XXXX impacted solid quarter first lower the months of increased rate as XXXX was increased expenses. XXXX quarter it third was income increased interest the compared the and XXXX. was expense period, to during and expected negatively during While noninterest and of X XXXX the when increased X income both third third reflecting was of loans of months during compared net net lower the . Provision environment during quarter on the months of year same Interest X the prior and growth in first by

increase of periods. of XX loan the the the having in basis floating largely and in commercial quarter commercial over with a of rate in third past than the The of XXXX XXXX, Our yield loans XXXX loan X/X during yield higher over rate quarter loan strong point the points with federal reflects July average funds combined loans XX improved the basis XX% the and respective along our was rate over higher growth XX environment. months interest a mortgage up third impact about of residential

on income rate compared federal year compared the and with comprised the during and quarter. mid-September, higher Reserve balance higher reduction growth reflecting Federal interest of deposit portfolio Chicago increased on the in a Interest to interest-earning period, of partially rate average for income which of income year increased also the deposits, higher funds yield. period on basis during the of securities in the also reflecting loan on and XXXX the an is mitigated in the environment. prior period period loans levels Interest XXXX funds the vast to the majority XX increased point interest The yield securities prior a Bank

X first time X the product and products. $XX.X deposit no deposits cost In and We interest $XX.X account of money in total, third months of to expense sweep the growth months and increased million environment, during on period, transfers prior quarter or increased XXXX market higher quarter during to products to compared period. rate in higher and reflecting compared the and interest of prior deposit the income respectively, low-cost the from deposits deposit year and was third interest our recorded XXXX, first million

reflecting was deposits up average a during than Interest similar rate. first quarter of Home the third Loan and Federal average average advances higher periods. quarter points Indianapolis cost during deposits with the and quarter that to quarter respective an Home XXXX balance the of Bank Interest months cost. of expense the Federal on third the was of average XXXX XX% balance the first XXXX, XXXX X months first basis XXXX higher X XX during over of than of Our about XXXX of higher the Bank lower Loan offsetting, the advances Indianapolis of during on expense average was higher of third reflecting

additional on expense $X.X total, exceeding income which and compared borrowed the deposit periods. during net during XXXX, is million other compared the first and quarter was $XX.X first strategic the prior monies loan purchase periods. XXXX periods. to expense funds during initiative ratio, the our prior to using X months period In of similar year million interest interest our to higher third the year and to deposit XXXX, lower of million the to $X.X third million quarter prior the X $XX.X margin the and growth months Net entails interest declined respectively, Impacting Interest was year growth and loan respectively, securities. generally

the products, securities purchased A the lower deposit growth large higher loan and while portion than market is deposit provide in costing of time a money products. yield

the margin XXXX points the XXXX. during third of to interest XX of declined quarter net quarter basis Our compared third

basis on was points basis up that increased yield XX funds period, Although earning our of XX points. time cost assets our during

did growth when our XXX Federal rapid July federal yield March asset the through in [ deposit until funds by move deposit deposit of when products. types XXXX rate the not latter points, materialize costing depositors begin for increased of no meaningful cost XXXX, lower to from raised and experienced to of increases we rates XXXX Reserve higher of and basis While began of period part ] deposit the during earning balances, costing to funds the competition to funds

latter interest part of stages Our during and XXXX. of peaked margin the early XXXX net

$XXX an our $XXX Advanced X% basis, We time same While grow net and first totaling period, use Home Federal million grew surplus Indianapolis loans X increased a months an Loan of basis on of months million million. or funds almost of surplus $XX the of XX% portfolio, that about million during during to securities portfolio annualized X Bank $XX deposits the XXXX. about funds our annualized net during reduced million XXXX, providing on of $XXX first or the

the with X the balance deposit with we deposit of Chicago of September remainder Federal The funds $X.X provision and of $X.X net million Bank on is a Reserve XX. months third quarter and XXXX, during of recorded respectively. expense surplus million totaling $XXX first of the million of the as

expense, provision necessitated XXXX problem the in quarter partially factor primarily payoffs reflects commercial calculated offset third by which larger stemming the in an allocations decreases The growth, net of loan allowance relationships. and from X an increase by were allocations lending environmental

for first along loan months recorded provision necessitated and The during of and to commercial months $X.X million second during allocations the third $X.X Noninterest and periods. during growth. relationships X expenses estate-related nonperforming X compared were the by with also prior quarter of respectively, XXXX, the quarters, expense first year XXXX million allocations net the established that includes were loan non-real X first specific higher

primarily The salary introduction salary of residential Higher levels, processing medical lower including transaction mortgage services. insurance the increased portion software noninterest also costs, market increases costs. lender pay costs, of data mortgage expense new management costs volumes benefit products higher reflecting increases, with and a residential adjustments, the support reflect cash commissions, and deferred comprise merit along costs notable and higher higher increased loan annual largely and

We remain regulatory well-capitalized strong in capital a and position.

quarter end as threshold of ratio bank's XXXX. categorized well not $XXX minimum at We $XX.X the the to during Our above of risk-based repurchase capitalized. total shares capital third million million the was third did be about the quarter,

available our plan. in have $X.X current We million repurchase

federal caveat share on basis rate points December assumptions conditions predicated rate latest On forecasting This that both metrics on of is we the X market key forecast and and presentation, making interest for Slide the a on difficult. XX environment quarter volatile effective our performance fourth of remain lower XX. being November with the XX funds the XXXX,

loan project growth of X% to range to We continue in the X%.

interest our margin We are a forecasting to range to be of in net X.XX%. X.XX%

pleased with further to earning and results expected to additional of reductions to income funds your condition closing, compression are challenges XXXX on our for continually, are That well remain positioned are yield by noninterest through assets institutions. cost we In reference. and Our believe also deposit provided the of to very myriad financial noninterest our of operating federal we and expense our all likely funds ongoing remarks. rate navigate for financial the initiatives. and prepared concludes and faced decline results with projected our the recent due successfully Expected growth due

question-and-answer to segment will of morning's We move call. the now this

Operator

question with Our Brendan first Nosal Instructions] from comes [Operator Hovde Group.

Brendan Nosal

out. start here quarter, just deeper beyond maybe sheet, and particularly approach laid off both the was loan [indiscernible], of the sheet Maybe little side kind the to three-pronged a digging growth really of on that balance bit on the guys this strong liability you sides

as of of since growth to it curious kind drivers mid-XXXX? the for particular, category that the of first quarter the quarter, this growth especially for balances, noninterest-bearing sequential relates deposit Just in

Raymond Reitsma

it that come characterized opportunities the that but acquisition with loan relationships predominantly is a And go it's Well, as by also new Yes. by those deposit purely to deposits matter driven opportunities and focus. well. aren't of opportunities, along and really client into necessarily by

loan and deposits I our vein at well. we to of the by and really as making where the you look the are, effort When beginning the you the predominantly we're look compared deeper over really mentioned, opportunities beginning year. year, tried opportunities categories a company, what budget and really is tend banking to what across we to of the of strength at the growth to all in our that is a go are bankers of this and the if business mean, go across the X the delivered that tap we've just Commercial it's concerted into entirety growth, expected, I deposit expected course but deposit spread that of of way where in

Charles Christmas

towards a on balance regards on bank year In a the to commercial I deposit tax up always comment be Chuck. all, tends of think start next building there reflective is factors to bonus in -- into lot . this of deposit deposit we volatility Brendan, balances daily and to I have And fund first early payments of the is payments basis. But accounts, seasonal question year. their as that noninterest-bearing think, end lot anticipated a the primarily -- and businesses the increase of

Brendan Nosal

me I Maybe helpful before one super That's color. more for step back.

Fed's how reacted curious cut, the at Just aftermath basis both kind in and XX own of the point for large. rate immediate deposit market of book pricing your just the

Charles Christmas

Yes.

was decline rate. positive I the as think basis It consistent items funds to accounts that down on the we the were market of went CD products in the about pricing Fed points, market. and XX reflective such similar pretty money

. we so see of And marketplace in lot currently. consistency a our

Operator

Raymond question Tamayo with next from The comes Daniel James.

Daniel Tamayo

Maybe on up Yes. and following into conversation the deposits just of further kind step on taking the on a NIM. then

last you third mention and and XX the the the over quarter the cost Just of in know lot mentioned but year-to-date months, what curious, of I on was information deposits you specifically? a deposits did

Charles Christmas

talking cost about the the of growth deposits? Are just overall you the or

Daniel Tamayo

Yes, the rate. just

Charles Christmas

X.XX I basis say, those Yes. were until that I the Fed came quarter, XX I that And Xs points. as down in the would probably say to, ] rates . reduced during mentioned, would just about rates closer then mid-September. the in rates low obviously, [

Daniel Tamayo

of kind -- about you're new with rates? So new those talking deposit costs

Charles Christmas

that for market, the CD Yes. cost the What I CD rates. reprice the move I we portfolio your since obviously, rates. was And what would say were entire of the new . we for whenever money comment would say was paying those rates, that

Daniel Tamayo

quarter. the just had rate blended curious of was I the in like third if deposits Yes. it. you Got

Charles Christmas

I can saw I was in money large don't Dan. front growth you. certainly to percent me, a have get as on, I would say that time as deposits. and of market commented you in that and the the we of

we cost. just is say in that also would . I of But noninterest-bearing going growth So we a would some deposits, as which, have the that overall on impact that help that, calculation. to big talked saw course, about, fact

Daniel Tamayo

Understood.

compression to on just quarter be how you some after expected the fourth kind thinking fourth looking And then the strategic around you compression loan-to-deposit due of ratio. put Great. of after the you're your comment additional about what type might Can NIM lowering quarter. your of Okay. at color

Charles Christmas

the quarter? After fourth

Daniel Tamayo

just just kind your I -- of NIM mean Yes. going what curious additional into was there about compression. comments

Charles Christmas

the simulation overall the I additional budget into and did happened Well, to we our is Fed is in my compression November going might comments think we or in the obviously months. in deposit I as on we going comments account would fourth we specifically of XXX quarter you X are when fact December, happen look guidance primarily balance in what basis, what we we or make to results as quarter, again, because right middle within at notwithstanding the just the the specific of together. an I taking mid-September will the Fed expect cut fourth would say want, and what today and our any future, knowledge think that growth, in our didn't which the think putting the points I the thought happen far in due Fed that do expect, that sheet as basis

to we're much throughout looking quarter points slower quarter fourth in market the at of I As what their saw look at is a this projecting Fed in than fourth we in equal pace what what expect year. the per has quarter basis which XX provided, next year. the currently, the is Obviously, and guidance,

steady. expect would the projection a out market margin perspective, next the to for now there the in that's relatively stay we rate With from year,

Daniel Tamayo

Okay. I that. All That's appreciate helpful. right.

-- clarification. comment appreciate guess misheard original I yes. lastly then the just was. your I And Sorry, I what

of reserves, the increase until stabilized [ in steady side that credit kind a XXX this on you Lastly, just kind of number. quarter where ] prior quarters around on

you it pretty Just looks like does a spot the economy here. in like for a decent number given that guys feel good is

any be Just levels would of kind have helpful. color on forward going reserve you

Charles Christmas

and all a reserve I'm sure an you of it out Yes. is to as Dan, as art company you know, the much science. -- talk than is of your more is there,

predicated blessed years, strong charge-off net XX-plus last on basically quality. credit a be We qualitative is in our to factors. continue of neutral We a with position the reserve over lot means are which very

comments, my specifically in mentioned C&I We I as at with segment the nothing qualitative an As know did increase well. drastic. factor our look associated our allocation credit was we factor, to updated one that we I adjust the of our provided slide deck in numbers. portfolio,

want slowed are overplay We coming some new such companies have which I we and to big it, impact a out, industry seeing on in big are the automotive has seeing manufacturers don't but die. as some, as softness tool models

decided So that going allocate in but to we had particular we degradation through that have was quarter paid of segment, additional some seen commercial Also, about third had accruing that relationships we as million we I released [indiscernible] reserve. mentioned, definitely the some off so process. loan in that one benefits rated, dollars in the $X

built obviously we account to So for time paid those they off. over reserve up that credits

give So back there. there was some

we nonaccruals, say levels of past strong the into possibly types ongoing health the loan management's the I as things. rules charge-offs of great dues, reserve as well intention assessment looking keeping the to our Obviously, at would overall with can. and deal as calculation of changes, have account portfolio, of taking we those it's that of as

Raymond Reitsma

profile. the But I X.XX to slide If automotive on The risk the currently that of change about lays XX underscore out. to comment group from I'd from XXXX X.XX. slight end that in particular moved Page the rating like on risk our Yes. Chuck's could, to

closely a in with some deterioration. the this environment, at that everything change magnitude. stood group looking of we and So that is recognize we're and this But out

point I change So wanted just about underscore there. kind slight of that to the

Charles Christmas

is And a watch for just list for us. perspective, X-rated

Raymond Reitsma

quality. credit . average as far as Yes,

Daniel Tamayo

to appreciate thanks And guys, of those give size that. that's a helpful Slide us color. great I all of XX, Well, that's for Okay. loans. sense that

Operator

Piper Sandler. from the Race And comes question Nathan with next

Nathan Race

cycle outlook Chuck, for of next time a still terms back XXXX? you fluid year. XXXX. that Just heard of I around the of kind thinking it's it's you previous question for likely a I the gradual into going stable forecast indicate a more correctly, appreciate margin if there's to of margin more did Fed about expectations But in if cutting

Charles Christmas

correct. that's Yes, . Exactly.

Nathan Race

like you your Okay. about some particular, you're thinking In the how guys the towards deposit in to money of market relative competitors of just rates, footprint. Great. curious posted are at when your seems some market prices. I I'm top look still it

So XX% the goal about pricing, fed cuts context particular, how we going around thinking loan-deposit in you're in product forward. the as curious consistently within that get the getting ratio additional just of forward going

Charles Christmas

Yes, great it's a question.

since tier always to opened, our in I of our been, competitive that are on growing base, deposit growth. think to asset top we good this the the be bring one strategies And our those we to deposits deposit that We pricing. be help has company was in of fund side loan very need we know base. to obviously at loan

as build to as pay bank. your tell also, entire of we and are you relationship our customers wallet going loan bring us. relationship, part that ourselves, we to what a we're to is know, And We our we you

all what definitely our I think markets transition coming to we growth seeing within of everybody's is still that months saw has money the out attention our want products. lower money we but some cost that of most of XX, see balance on competitive its that of industry lot from to slowed that And a ago, in obviously, deposits. and be has down That sheet. notwithstanding where continues XX So deposit is now we're

rate money the be with part, large when that funds about to this accounts to up their tied going that our when market opening customers, I rate. that think we're is to we them, talk we the of account one Fed talk things in

account agreement are that Reserve we depositors the of those we're But they're some do. fact, money of paying actually rate have market accounts -- Fed conversations even funds matter the not, with rate. by on tied may that heavily the a are our by As if those whatever influenced Federal would by be deposit to agreement

those So accepted I we we the by that indications rates And mentioned, from XX points. lower basis depositors. by did that was lower was I widely did -- think as all

continue if not look at to well. So expecting the market that's concern in Fed And for as to interest equal money we to rate that's will well, the any the have lower what XX, our do least as competitors lower seen continues we a rates, manner. -- fairly first again,

Nathan Race

That's X very it. Got helpful. for Great color. me. Maybe last just one

You clips. guys at build as trading peers. guys continue discount in to to capital comments, pretty prepared still alluded And Ray at strong his are you a to

So you buybacks potentially guys just thinking about curious, forward? maybe stock how going are

Charles Christmas

repeat predict, said that's and which in, capital. we much it's what when very practice I'll of that governance our difficult it's capital, maintain think we at in balance to capital to buffers probably a to environment significant potential always the to good we're just just capital it we as sheet If operating the downturn that company. positions. have have look kind our is makes good extra good before and anything our sense there's a in we've And strong think of economy,

the are buybacks there. stock think I So

plan. We have a

active an plan. have We

as we our seen that if rainy the got the some And have. least ability a loan pressure capital growth. sheet, But want we we back shares. pressure. Good puts about, to on sure balance current as is look buy have there environment, we've as at go enough We talked to that's well, But make day solid that at through course, coming. pressure we've ratios good to capital of

our course, a expensive of other make want we've commercial growth. more We which, types to especially growth, basis sure of risk-weighted is loan got that support on capital than growth, sufficient to

continue we pay we to cash return what our We continue is cash dividend and that well. shareholders an to as appropriate to believe to want maintain

good a It's every about that it's Board talks the executive management, something question. quarter. So

standpoint, think a now, think if from currently, stock with with in comfortable that step grow base where we're comfortable have to in the presents it's look at position. a valuation at any we'll And itself our we're good been. opportunity the And buy to ready I we time. price. are point right we current capital we But we're as continuing But capital clearly, our

Operator

question Damon KBW. next with from Our comes DelMonte

Damon Del Monte

Chuck, you. So just for

little wanted the bit on Just balance dynamic understand sheet the to a better here.

If you grow security it's over guys obviously growth, we cash deposits to balances and loan the higher the then and higher coming outpacing balances should be are of quarters? continuing pace forecasting

Charles Christmas

I should is exactly do, in Damon. the we as you is definitely of we expectation what see have Yes, is offset -- think securities the portfolio, you the can ratio. That building talked my to that's definitely obviously which as the about, been deck, part lowering loan-to-deposit

we're I'm we're $XXX over -- about that to million want keeping but monies Fed, not sure that excited So we effectively. using all those make the at .

time. a month. I point this at And that in So change don't I we're change expect growing much pretty our bet that pace. that to a obviously, we any we million at pace. can But securities portfolio, probably, would say $XX time about on

much of at is that because up the money one how that So bring Fed. the that -- I impacts we of have

Damon Del Monte

Got you.

Okay.

do feel hold you sheet pressure just like relatively then? NII of kind despite kind margin, of the guide maybe so flattish, the you kind can the of lower And some on given the the larger of balance ease

Charles Christmas

Yes.

I statement, think ratio actually still to increase looking has performance a strategy the you're we we negative the average at when margin, income net opportunity, bottom measures positive lower it on those pure line But actually just things. as assets, of such saw just on on return third our quarter, types impact the had the Clearly, loan as income the interest a income. has in impact net we could deposit number.

flip Fed pressure on . And all. is like expect timing our side, change that at to over air. to perspective, path opportunity reprice on and the of But rates, to will a on That continues if in meaningfully. which rate, side, maturities obviously securities the that we CDs degree And looks very down way. the so some the that I coming has wouldn't looking are yields. a in the while the certainly, things the next reprice year, we'll have bit current at and that several has average next and have should liability significant put to in on the on quite loan a that put those X.X% years they're up up lower portfolio also Obviously,

the have is to on but to a rate loans things next are that our lot, do a on that mature average we perspective, year, have And side books, put X.X% rate going loans in we fixed some don't especially currently. commercial

well So offset, side that yield in some opportunities, funds we the neutralize reduction that Fed pressure should some we believe repricing because opportunities rate. anyways, on as the any see good of

Damon Del Monte

great color. mature fixed you in on loans Do amount that to happen the That's it. have 'XX? rate to you a Got dollar expect

Charles Christmas

the Yes, and between have $XXX we $XXX at about liability million; deposits FHLB million advances, X.X%. side, time it's and on

Damon Del Monte

it. Got

Okay. Great. bit, little lastly, mortgage guess item lower winter of outlook that moving back appreciate then quarter. seasonality looking in positively? year? we here to will I color. were Or than it your stronger environment the normal we keep that spur I half activity do you line a over think seems guess, expect like rates rate months? for the what's this banking the just kind of down the was Do And with that this moving I enough

Raymond Reitsma

the a during that you then the the fall, bumped actually in It's here at because dropped It activity an given see occur. a rates experienced our season that up in Yes. notch. interesting expect was when typically year summer level. seasonality to And been peak typical the didn't mortgage we Michigan,

looks here similar what sit now right we as we the to this had So during backlog summer. today,

happens on was than we'll much fourth better, more when an so think the and with we saw typically see bit enough But rates. what guess, got stronger quarter, rates overwhelm depends to seasonal kind certainly and a we usual a fall, I So bit of late little seasonally would I uptick how pattern. strong it what's

Operator

the Nosal Brendan with And question Hovde next comes Group. from .

Brendan Nosal

on getting follow-up excess for ] X securities me. growth back [ to placed the for Just I your being. into guess, deposit being comments time

think meaningfully? you into more borrowings the how curious trade-off of kind -- versus investing about wholesale security Just reducing versus

Charles Christmas

Yes.

funds of a deposits on definitely funding I when need as at our balance think our don't we in those in bringing to have sheet were. looking as we're general we're Clearly, types much we reducing have portfolio. wholesale

been Like with doing the the of in balloons rate don't large offset to associated part, Bank the on portfolio but risk will we of lot loans. I do historically rate fixed advanced say, Home a that said, side. Loan one do typically X-year in things, Now the is loans, I part, fixed interest a Federal used some, is, rate commercial we

say, in do Home something do if events sheet wholesale And definitely we we to Federal have those, surplus fund don't them explained situation, retiring continue advances funds dynamic our we'll of obtain in will, need that that's occasionally the we maturity, those Loan a the we have general, to I match continue But go will balance we But look and I on that. really as books. if funds, new like, So a for quarter, we general, to at and X-year in you place. those our that see do. as up obviously, overall take the come to replacing with without Bank would look to funds. to That's third had

Operator

session. would Ray our Reitsma like closing over to remarks. This back question-and-answer turn conference concludes I the for any to

Raymond Reitsma

and today's today's your and Just thank call your call. for concludes interest want Thank Mercantile participation you. in . that you Bank, in to

Operator

Thank The attending conference today's has now for concluded. you presentation.

now disconnect. You may

Mercantile Bank (MBWM) 15 Oct 242024 Q3 Earnings call transcript