Mercantile Bank Corporation

Good morning and welcome to the Mercantile Bank Corporation second quarter 2021 earnings results conference call. All participants will be in listen-only mode. Should you need assistance, please signal a conference specialist by pressing the star key followed by zero. After today's presentation, there will be an opportunity to ask questions. To ask a question, you may press star then one on your telephone keypad. To withdraw your question, please press star, then two. Please note, this event is being recorded. I would now like to turn the conference over to Jeff Shaneborn, Lambert Investor Relations. Please go ahead.

Thanks, Gary. 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 second quarter of 2021. Joining me today are members of Mercantile's management team, including Bob Kaminski, President and Chief Executive Officer, Chuck Christmas, Executive Vice President and Chief Financial Officer, and Ray Reitzma, President of Mercantile Bank Michigan. We will review the call with management's prepared remarks and presentation to review the quarter's results, then open the call up to questions. However, before we can 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 second quarter 2021 press release and presentation deck issued by Mercantile today, you can access it at the company's website, www.mercantilbank.com. At this time, I would like to turn the call over to Mercantile's president and chief executive officer, Bob Kaminski. Bob?

Thanks, Jeff, and good morning, everyone. On the call this morning, we will provide you with detailed information on the company's performance in the second quarter. Mercantile has once again accomplished a strong quarter, and along with progress being made with the COVID-19 pandemic, including widespread availability of vaccinations across the country and a reopening of the Michigan economy specifically, we remain very optimistic about our future performance. Although we have spent the better part of the last year and a half working remotely, our dedicated teams did not miss a beat. As we continue to return to an environment of normalcy in our communities, the extraordinary work that was done by our team into 2021 has set the stage to allow us to remain intensely focused on our mission of acquiring new customers and servicing existing ones to the highest level of standards. With businesses working to reopen more fully as they strive to return to pre-pandemic performance, We continue to closely monitor COVID-19 related developments while always prioritizing the health and safety of our customers and employees. We seek to consistently find ways to operate effectively within whatever the current conditions and environment may be. Our full timeline of COVID-19 related activities can be found on slide 10 of our deck. Our teams demonstrate continued resiliency and adaptability as we close out the second quarter, delivering another very strong period of financial performance. We achieved net income of $18.1 million and per share earnings of $1.12, which includes a negative provision for loan losses for the quarter, reflecting the continuing improvements in both current and forecasted economic conditions. Our focus on achieving strong and sustained growth has positioned us well for ongoing creation of shareholder value. Today, we also announced the third quarter cash dividend of 30 cents per share as we remain committed to delivering the consistent high performance our shareholders have come to expect. During the second quarter, we also continued with purchases under our stock buyback program. Chuck will dive deeper into the details of our financial statements for the quarter, which again highlight our ongoing strength in mortgage banking income, sound asset quality, strong growth in core commercial loans, as well as managed overhead costs. We remain persistent in identifying new ways to improve our fee income, especially while growing the bank to create additional value for all of our stakeholders. especially in light of improving COVID-19 conditions, we have been able to leverage our strategic initiatives that are designed to increase market share. Over the past few months, we have seen great progress achieved by our cities and communities to resume economic activity as the effects of the pandemic subside. We remain encouraged by these steps and are enthused about our ability to meet the changing needs of our customers as we have prioritized our efforts to further strengthen our relationships within these markets in support of transitions toward economic growth and recovery. Throughout the quarter, we demonstrated strong core loan growth by meeting the credit needs of our existing customers while fostering relationships with our new and prospective clients. Our loan pipelines remain solid and our asset quality continues to be extremely strong. our mortgage banking team continues their incredible performance in the second quarter. While refinance activity remains robust, our volume of loans to finance home purchase exceeded refinances during the quarter. We believe we are well positioned to capture an even greater share of the mortgage banking market in upcoming periods as a result of our team's proven record of fast, effective delivery of mortgage products to our markets, supplemented by our recent strategic hires of seasoned lenders, both in our current and new markets. Ray will provide you with the highlights of the operations of our company in his comments. We are pleased with our ongoing activities to adapt industry best practices while leveraging available data to capture efficiencies, customize unique client interactions, and refine our internal systems. The success of our commercial loan interest rate swap program delivers value to our clients, and helps position us to improve our long-term loan yields. Our sustained growth in other key fee income categories and the increase in debit and credit card income above pre-pandemic levels demonstrates our focus on non-interest income, revenue streams, and our continual efforts to gain additional profitability for our company. Digital delivery remains a primary focus for Mercantile Bank, as we look to leverage the momentum built during closures necessitated during the pandemic when alternative delivery channels were fully implemented and successfully served our client base. We have prudently invested in technology over the years, which continues to serve us well as we meet and exceed the evolving needs and expectations of our clients. We strive to transform our locations into customer relationship centers where routine transactions can be performed efficiently allowing staff to focus on relationship building with all clients, including the exploration and fulfillment of financial service needs. Our current footprint can be viewed on slide three of the deck. In closing, I want to express my thanks and appreciation to the Mercantile staff for their dedication and excellent work during the first half of 2021. We remain committed as an organization to seizing the wide range of opportunities before us, so that we may continue our successes for the benefit of our customers, communities, and shareholders for the balance of this year and beyond. Those are my introductory remarks. I'll now turn the call over to Ray.