Mercantile Bancorp Inc. of Quincy, Ill., said Wednesday that it swung to a fourth-quarter loss of $6.7 million, or 77 cents a share, on loan problems in once-hot real estate markets in the Southeast.
The $1.8 billion-asset company reported a profit of $2.5 million, or 29 cents a share, for the fourth quarter of 2007. In the 2008 quarter its loan-loss provision surged 1,063% from a year earlier, to $12.8 million.
This was primarily attributed to the company's Florida operations and loan participations in Atlanta purchased by a Kansas bank subsidiary.
Nonperforming assets rose 65%, to $38 million, and made up 2.8% of total loans, against 1.9% a year earlier. Nearly a third of the nonperformers came from the Royal Palm Bank of Florida unit in Naples. Ted T. Awerkamp, Mercantile's president and chief executive, said in a press release that Royal Palm's management was replaced a year ago and that the new team has made strides in identifying problems and strengthening credit.