Achieves third consecutive profitable quarter while asset quality ratios continue to improve

Coral Gables, FL - July 28, 2010

Mercantil Commercebank, one of the largest banks headquartered in Florida, today announced a profit before taxes of $3.5 million for the second quarter of 2010. On an after tax basis the profit was $2.3 million, compared with $1.3 million in the first quarter and a $14.9 million loss in the second quarter of 2009. The net profit for the quarter represents an increase of 79% over the prior quarter and the third consecutive quarter of positive results.

Total assets reached $6.4 billion, an increase of 7% over the first quarter and a 15% increase over the second quarter of 2009. Deposits and other interest bearing accounts increased to $4.5 billion, up by 3% and 11% from the previous quarter and the second quarter of 2009, respectively.

Net loans grew during the quarter by 15% to close at $3.6 billion, compared with $3.2 billion in the first quarter and $3.0 billion in the same period last year. This growth is primarily due to lending strategies implemented at the start of the year aimed at meeting the evolving financial needs of customers and was supported by the Bank’s deposit growth, high level of liquidity and strong capital base. Investments, comprised mainly of high credit quality short-term bonds, decreased slightly to end the quarter at $2.5 billion. Capital closed at $665 million, 7% higher than the same period last year principally as a result of the fourth quarter 2009 capital contribution; the Bank continues to maintain a capital ratio that is double the regulatory benchmark to be considered “well capitalized.”

The loan provision during the quarter totaled $13.5 million, increasing slightly from $11.9 million in the previous quarter; however, it represents a substantial decrease from the $47.8 million reported a year earlier. The ratio of non-performing assets to total assets showed a significant improvement, decreasing to 6.4% from 7.5% reported in the first quarter. Similarly, the ratio of non-performing loans to total loans decreased significantly to 10.2% compared to 13.2% the previous quarter.

“We are extremely pleased to report a third consecutive profitable quarter,” said Millar Wilson, President and CEO. “We view our financial results, particularly the growth in the loan portfolio for the quarter, as a positive sign that the economic recovery is gradually gaining traction and as an indication that the decrease in real estate values which South Florida has experienced continues to moderate. Also, the significant improvement we were able to achieve in the loan quality ratios validates the effectiveness of the actions we have been taking to manage our stressed assets.”

Net interest income improved slightly to close the quarter at $34.9 million, compared to $33.6 million in the previous quarter; however, it is down 17% from the same period last year as a result of the prolonged negative effect of the low interest rate environment, particularly for short-term placements. The Bank continues to maintain a significant portion of its assets, $2.5 billion, or more than 39%, in short-term placements and a securities portfolio of U.S. Government and Government Sponsored bonds. While this high level of liquidity has continued to provide the Bank with ample flexibility to increase its lending activities, it has also reduced its interest income.

“During the second half of the year, we will remain focused on our core strategies and on fulfilling our customers’ financial needs through this challenging economic environment,” continued Wilson. “With our capital strength, new credit products for commercial customers, such as the MCB Business Credit Line, and attractive new personal deposit products, we stand ready to assist our customers in taking advantage of the new opportunities that will arise in the recovering economy.”

Period ended		Jun 30, 2010	Mar 31, 2010	Dec 31, 2009	Jun 30, 2009
Total Assets		$6,435.4	$6,011.3	$5,991.0	$5,611.2
Total Loans, Net		$3,622.9	$3,159.6	$3,247.9	$3,020.5
Non-Accruing Loans		$376.8	$425.4	$421.3	$322.9
Repossessed Assets		$38.0	$24.9	$26.8	$19.0
Non-Performing Assets to Assets		6.4%	7.5%	7.5%	6.1%
Non-Accruing Loans to Total Loans		10.2%	13.2%	12.7%	10.4%
Total Deposits		$4,480.2	$4,354.7	$4,399.7	$4,043.0
Capital		$665.0	$659.5	$654.5	$619.7
Results
Quarter Ended, Net Profit (Loss)		$2.3	$1.3	$6.2	$(14.9)
	Return on Assets	0.14%	0.08%	0.39%	(1.03)%
	Before Provisions and Taxes	$17.6	$13.9	$27.9	$25.1
YTD Net Income (Loss)		3.5			$(13.9)
	Return on Assets	0.11%			(0.46)%
	Before Provisions and Taxes	$31.5			$45.2
($'s in millions)

ABOUT MERCANTIL COMMERCEBANK:
Mercantil Commercebank N.A. is one of the largest 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 85 years of experience. Mercantil Commercebank has assets of $6.4 billion. The Bank is headquartered in Coral Gables, Florida and has 17 Banking Centers - 15 located in South Florida; one in Manhattan, New York; and one in Houston, Texas. 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: Please note that we are MERCANTIL COMMERCEBANK. There is no "E" at the end of Mercantil as is common with other banks with the similar name. Thank you.