Question-and-Answer Session
Operator
(Operator Instructions) Your first question comes from Jon Arfstrom from RBC Capital Markets.
Jon Arfstrom - RBC Capital Markets
I just have a quick housekeeping question for you Chuck; did you say 18% of your loans are tied to LIBOR or 18% of floating rate loans?
Chuck Christmas
I said 18% of floating rate.
Jon Arfstrom - RBC Capital Markets
In your prepared comments you talked about deposit competition at other banks up to 100 basis points higher than the local markets. I am guessing you wouldn’t name names, but can you just talk a little bit about the profile of the banks? Are they larger banks, smaller banks, community banks?
Chuck Christmas
I definitely don’t want to name names in this venue, but I would say it’s the larger organizations, but smaller ones in a large degree are being forced to follow. We haven’t chosen to do that and there is an increased reliance on the wholesale funds. Obviously we don’t want to increase the reliance, but we certainly don’t want to pay 50 to 100 basis points more for the money either.
Jon Arfstrom - RBC Capital Markets
Then you talked a little bit about one of the reasons for a reduction in your local deposits was some FDIC insurance limits and I am just wondering if raising that cap or I guess it’s really an unlimited amount for non-interest bearing, does that change your appetite at all? Does that allow you to do different things?
Chuck Christmas
Yes, hopefully certain depositors in all banks that certainly haven’t escaped it have been very worried about the banking industry as a whole and have taken money out of Mercantile and placed it with other institutions locally. We also, I think is notable, we have a partnership with Raymond James brokerage and our brokerage area has gotten quite a bit of that money and has placed it into the brokered market for those customers, hopefully just for a short term period. We can get that back. Certainly the increase on the $100,000, that $250,000 helps us because it just means that depositors will be willing to put more money with Mercantile Bank.
With regards to the non-interest proposal this morning, I haven’t had a chance to look at it totally. I do know that it does look like there is going to be fees associated with the FDIC assessment, so we will have to take a look at that.
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