Though credit quality continued to be an issue at its Kansas and Florida banks, Mercantile Bancorp Inc. of Quincy, Ill., nearly halved its first-quarter loss compared with a year earlier.
The $1.8 billion-asset company said Tuesday that its six banks remained well capitalized, but that it is looking into raising capital after the $876,000 quarterly loss.
It set aside $3.18 million as a provision for loan losses, about a third less than a year earlier.
However, nonperforming loans more than doubled, to $51 million, and other nonperforming assets also more than doubled, to $10.3 million.
Chargeoffs totaled $4.7 million, up from $436,000 in the first quarter of last year.
Mercantile, the majority owner of banks in four states, said that 28% of its nonperforming loans were at Heartland Bank in Kansas.
It said that it continues to work closely with Heartland's management and that it has infused the bank with an unspecified amount of capital.
Ted T. Awerkamp, Mercantile's president and chief executive officer, said in a press release that the company's Royal Palm Bank of Florida unit in Naples also continued to struggle in the first quarter and is likely to do so until the economy rebounds.
Mercantile did not provide data for the individual banks, but Awerkamp said its Illinois and Missouri banks had "solid" quarterly results.
To preserve capital, the company said it would once again refrain from paying a dividend.
It also said it is examining options for restructuring debt and getting more capital. In February shareholders gave the company permission to issue more preferred or common stock.
