MERCANTIL COMMERCEBANK POSTS THIRD QUARTER 2009 RESULTS
Coral Gables, FL - October 30, 2009
Mercantil Commercebank, one of the largest banks headquartered in Florida, announced today its 2009 third quarter results.
The bank’s total assets increased 4.3% to $5.9 billion, from $5.6 billion the previous quarter. Net loans remained steady during the quarter to close at $3.0 billion, while investment securities increased 14.4% to $2.6 billion, up from $2.3 billion the previous quarter. The bank’s investment securities portfolio continues to provide a high level of liquidity as well as exceptional asset quality.
As a result of the continuing decline in the value of residential and commercial real estate properties, which serve as collateral for the loan portfolio, the Bank set aside $47.6 million in Loan Provisions for the third quarter, a nearly identical amount as in the previous quarter ($47.8 million), which led to a third quarter loss of $18.0 million.
The non-accrual loans to total loans ratio, chiefly real estate-driven, increased from 10.2% the previous quarter to 14.1% in the current quarter, while the non-performing assets to total assets ratio increased to 7.8% from 6.0%. “The non-performing assets ratio, which includes foreclosed properties, is a better indicator of bank balance sheet condition, especially in the case of Mercantil Commercebank, since it factors in our large high quality investment securities portfolio” commented Millar Wilson, President and CEO. “The Bank’s risk management policies have continuously sought to diversify the risks in its balance sheet. At September 30th the Bank’s loans to total assets ratio was 52.8%, which is lower than its national peer group average of 65.7% (as of June 30th for banks greater than $3 billion in total assets) and significantly lower than most banks domiciled in the state of Florida”.
The Bank has traditionally been very active in lending to large corporations and small businesses and as a result maintains a lower percentage of its total loan portfolio in real estate secured loans when compared with other banks domiciled in Florida. Approximately 56% of the Bank’s loans are secured by real estate, while the state average is in excess of 80% and the national peer group average is 64%.
“The downward pressure of depressed real estate values, which continue double-digit decreases from the same period last year, require ongoing loan provisions which continue to impact our bottom line,” said Millar Wilson, President and CEO. “And while the loss is disappointing, our core results remain sound and our capitalization levels are excellent. Before loan provisions and taxes the Bank had a profit for the quarter of $20.2 million, compared to a profit of $17.4 million the same quarter last year”. The core results have been improved by ongoing efforts to increase efficiencies and reduce operating expenses. For the first nine months of the year operating expenses are down $6.3 million, or 5.9%, compared to the same period the prior year, despite an increase of almost $5.0 million in FDIC premiums. The Bank enjoys one of the lowest operating expense to assets ratio in the state of Florida, at 2.27% vs. the state average of 3.30%, and also figures very well compared to the national peer group average of 2.76%. The Bank’s Tier 1 Capital ratio averaged 9.65% during the third quarter, while 5% is the regulatory threshold for a bank to be considered “well capitalized”.
Period ended Sept. 30th |
2009 |
2008 |
| Total Assets |
$5,852.9 |
$6,266.1 |
| Total Loans (gross) |
$3,092.7 |
$3,347.5 |
| Non-performing Assets to Assets |
7.8% |
4.2% |
| Total Deposits |
$4,179.9 |
$4,273.4 |
| Capital |
$604.9 |
$543.9 |
| 3rd Quarter Net Results |
$(18.0) |
$5.2 |
| |
Before Provisions and Taxes |
$20.2 |
$17.4 |
| 3rd Quarter Return on Assets |
(1.22)% |
0.34% |
| ($'s in millions) |
ABOUT MERCANTIL COMMERCEBANK:
Mercantil Commercebank N.A. is one of the largest privately held banks in South Florida serving its community for 30 years. Mercantil Servicios Financieros (MSF), a Venezuelan company, beneficially owns the Bank through U.S. bank holding companies. MSF is the largest provider of financial services in Venezuela, with more than 80 years of experience. Mercantil Commercebank has assets of $5.9 billion. The Bank is headquartered in Coral Gables, Florida, and has 17 Banking Centers, 15 in South Florida; one in Manhattan, New York; and one in Houston, Texas. Mercantil Commercebank is a recipient of the “100 Top Business Minority Awards,” and is ranked as a Top Community Bank in South Florida. The Bank offers a wide variety of domestic, international, personal, and commercial banking services, including investment, trust, and estate planning through its subsidiaries, Mercantil Commercebank Investment Services, Inc. and Mercantil Commercebank Trust Company, N.A. For more information, please visit www.mercantilcb.com.
Editor’s Note: There’s another bank in South Florida whose moniker includes the word ‘Mercantile.’ Please note that we are MERCANTIL COMMERCEBANK. Thank you.
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