Mercantile Bank Corporation (NASDAQ:MBWM) Q2 2024 Earnings Conference Call July 16, 2024 10:00 AM ET
Company Participants
Nichole Kladder - First VP & Chief Marketing Officer
Raymond Reitsma - President, CEO & Director
Charles Christmas - CFO, EVP, Treasurer of Mercantile, EVP & CFO
Conference Call Participants
Brendan Nosal - Hovde Group
Daniel Tomayo - Raymond James Financial
Nathan Race - Piper Sandler Companies
Damon DelMonte - KBW
Operator
Good morning and welcome to the Mercantile Bank Corporation 2024 Second Quarter Earnings Conference Call. [Operator Instructions]. Please note this event is being recorded. I would now like to turn the conference over to Nichole Kladder, First Vice President, Chief Marketing Officer of Mercantile Bank. Please go ahead.
Nichole Kladder
Good morning, and thank you for joining us. Today we will cover the company's financial results for the second quarter of 2024. The team members joining me this morning include Ray Reitsma, President and Chief Executive Officer; as well as Chuck Christmas, Executive Vice President, Chief Financial Officer.
Our agenda will begin with prepared remarks by both Ray and Chuck and will include references to our presentation covering this quarter's results. You may access a copy of the presentation as well as the press release published earlier today by visiting mercbank.com.
After our prepared remarks, we'll then open the call to your questions. Before we begin, 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 factors described in the company's latest Securities and Exchange Commission's filings. The company assumes no obligation to update any forward-looking statements made during the call. That is all I have for you today. I will now turn the meeting over to our President and Chief Executive Officer, Ray Reitsma. Ray?
Raymond Reitsma
Thank you, Nichole. My comments will focus on our loan-to-deposit ratio, deposit growth, loan growth, asset quality, and net interest income. Over the last three years, commercial loan growth and mortgage loan growth has been strong. And while our deposit growth has been solid, it has not kept pace with total loan growth.
As a result, the bank's loan to deposit ratio increased to 110% at year-end 2023 compared to 85% at year-end 2021 when deposits were elevated because of the PPP program and the resulting excess liquidity in the system. We believe the bank's elevated loan-to-deposit ratio is a contributing factor to our below peer valuation despite a strong return profile.