News Release


Mercantile Bancorp, Inc. Announces Basic Earnings Per Share increase of 25.1%

QUINCY, Il. -- (BUSINESS WIRE) - October 12, 2005 -- Today, Mercantile Bancorp, Inc. (Amex: MBR) reported unaudited third quarter basic earnings of $1.34 per share, compared to $.82 per share for the third quarter of 2004. Basic earnings per share for the nine months ended September 30, 2005 were $3.59, compared to $2.87 for the same period in 2004, an increase of 25.1%. Net income was $2,622,000 for the third quarter of 2005, an increase of $1,000,000 over the third quarter of 2004, and $7,041,000 for the nine months ended September 30, 2005, an increase of $1,401,000 over the same period in 2004.

In commenting on earnings performance, Chairman, President & CEO Dan S. Dugan said: "Earnings were 25.1% higher than the comparable date last year, as we have managed net interest income with the opportunity the interest rate cycle has provided. We are also managing expense well, and both factors are contributing to our solid performance this year.”

For the nine months ended September 30, 2005, the annualized return on average equity was 10.6% and the annualized return on average assets was .88%. Comparing September 30, 2005 balances to December 31, 2004, total assets increased 6.95% to $1,112,891,000. Total loans, including loans held for sale, grew 6.7% to $823,621,000. Total deposits increased 6.6% to $931,286,000. During the same period, stockholders' equity increased 6.3% to $91,426,000, or 8.2% of total assets.

The Quincy, Illinois based bank holding company's majority-owned subsidiaries consists of 6 banks in Illinois, 2 banks in Missouri and 1 bank in Kansas, where the Company conducts full-service commercial and consumer banking business, engages in mortgage banking, trust services and asset management, and provides other financial services and products. In addition, the Company has minority investments in 4 community banks in Missouri, Georgia and Florida. Further information is available on the Company's website at www.mercbanx.com.

FINANCIAL SUMMARY
(in thousands, except per share data)
(unaudited)
     
 
September 30, 2005
December 31, 2004
Balance sheet information:    

   Loans
$823,621
$772,089

   Investment Securities
169,212
173,371

   Total Assets

1,112,891
1,040,553

   Deposits
931,286
873,427

   Stockholders' Equity

91,426
85,982

   Book Value Per Share

$46.74
$43.79
     
 
Three Months Ended
Three Months Ended
 
September 30, 2005
September 30, 2004
Statement of Income Information:

   Total Interest Income

$15,390
$12,571

   Total Interest Expense

6,479
4,615

   Net Interest Income

8,911
7,956

   Provision for Loan Losses
451
422

   Noninterest Income

2,073
1,809

   Noninterest Expense

6,975
7,069

   Minority Interest

302
30

   Income Taxes

634
622

   Net Income

2,622
1,622

   Basic Earnings Per Share
$1.34
$0.82
     
 
Nine Months Ended
Nine Months Ended
 
September 30, 2005
September 30, 2004
Statement of Income Information:

   Total Interest Income

$43,511
$36,326

   Total Interest Expense

17,387
13,093

   Net Interest Income

26,124
23,233

   Provision for Loan Losses
1,680
1,222

   Noninterest Income

6,042
5,791

   Noninterest Expense

20,465
19,742

   Minority Interest

529
82

   Income Taxes

2,451
2,338

   Net Income

7,041
5,640

   Basic Earnings Per Share
$3.59
$2.87

This release contains information and “forward-looking statements” that relate to matters that are not historical facts and which are usually preceded by the words “may,” “will,” “should,” “could,” “would,” “plan,” “potential,” “estimate,” “project,” “believe,” “intend,” “anticipate,” “except,” “target” and similar expressions. These forward-looking statements are subject to significant risks, assumptions and uncertainties. Because of these and other uncertainties, our actual results may be materially different from those described in these forward-looking statements. The forward-looking statements in this release speak only as of the date of the release, and we do not assume any obligation to update the forward-looking statements or to update the reasons why actual results could differ from those contained in the forward-looking statements.

Questions regarding this information should be directed to Mr. Dugan at (217) 223-7300, or by e-mail at investor.relations@mercbanx.com