On July 11, Mercantile Bank (NASDAQ:MBWM) released second-quarter earnings for the period ended June 30.

  • Net earnings fell by 56.5%, largely because of a near-doubling of non-performing assets.
  • On the bright side, Mercantile's loans increased 6.6% year over year. Yippee.
  • Mercantile carries the lowest Motley Fool CAPS rating available: one star. Misery loves company, though, and it's no surprise to find competitors Fifth Third Bancorp (NASDAQ:FITB) and Macatawa Bank (NASDAQ:MCBC) similarly sporting bottom-rung one-star ratings.

(Figures in thousands, except per-share data)

Income Statement Highlights

Q2 2007

Q2 2006

Change

Total Revenue*

 $15,369   

 $16,900

(9.2%)

Net Interest Income

 $13,948

 $15,646

(10.9%)

Net Profit

 $2,221

 $5,111

(56.5%)

EPS

 $0.26

 $0.60

(56.7%)

*Includes interest earned and non-interest income.

Get back to basics with a look at the income statement.

Ratio Checkup

Q2 2007

Q2 2006

Change*

Net Interest Margin

2.9%

3.5%

(0.6%)

Efficiency Ratio

65.3%

47.5%

17.9%

Nonperforming Assets/Assets

1.1%

0.4%

0.7%

Return on Average Assets

0.4%

1.1%

(0.6%)

Return on Average Equity

5.1%

12.8%

(7.7%)

*Expressed in percentage points.

Find out more about bank performance ratios.

Balance Sheet Highlights

Assets

Q2 2007

Q2 2006

Change

Investments

 $251,000

 $271,000

(7.4%)

Loans

 $1,776,026

 $1,670,471

6.3%

Liabilities

Q2 2007

Q2 2006

Change

Deposits

 $1,639,010

 $1,547,912

5.9%

Total Liabilities

 $1,928,989

 $1,807,769

6.7%

Learn about bank assets and bank liabilities.

Related Foolishness:

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