-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, TTvMFZO3WRN46Qpa3L2C/ZHu0Vv6BRG1MyOC7K2bIOHmCNRiw/gJ+bX5vDBhtgSW qfG9AF9AK2vHYV3r2Y/D/g== 0000950124-03-003175.txt : 20031007 0000950124-03-003175.hdr.sgml : 20031007 20031007093748 ACCESSION NUMBER: 0000950124-03-003175 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 20031007 ITEM INFORMATION: ITEM INFORMATION: Financial statements and exhibits FILED AS OF DATE: 20031007 FILER: COMPANY DATA: COMPANY CONFORMED NAME: MERCANTILE BANK CORP CENTRAL INDEX KEY: 0001042729 STANDARD INDUSTRIAL CLASSIFICATION: STATE COMMERCIAL BANKS [6022] IRS NUMBER: 383360865 STATE OF INCORPORATION: MI FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 8-K SEC ACT: 1934 Act SEC FILE NUMBER: 000-26719 FILM NUMBER: 03930605 BUSINESS ADDRESS: STREET 1: 5650 BYRON CENTER AVENUE S. W. CITY: WYOMING STATE: MI ZIP: 49509 BUSINESS PHONE: 616 406-3777 MAIL ADDRESS: STREET 1: 5650 BYRON CENTER AVENUE S. W. CITY: WYOMING STATE: MI ZIP: 49509 8-K 1 k79970e8vk.txt CURRENT REPORT UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 ---------------- FORM 8-K CURRENT REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 DATE OF REPORT (DATE OF EARLIEST EVENT REPORTED): OCTOBER 7, 2003 -------------------- MERCANTILE BANK CORPORATION (Exact name of registrant as specified in its charter) MICHIGAN 000-26719 38-3360865 (State or other jurisdiction (Commission File (IRS Employer of incorporation) Number) Identification Number) 5650 BYRON CENTER AVENUE SW, WYOMING, MICHIGAN 49509 (Address of principal executive offices) (Zip Code) Registrant's telephone number, including area code 616-406-3777 ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS. (c) Exhibits. Exhibit Number Description 99.1 Press release of Mercantile Bank Corporation reporting financial results and earnings for the third quarter of 2003 ITEM 12. RESULTS OF OPERATIONS AND FINANCIAL CONDITION. Earnings Release. On October 7, 2003, Mercantile Bank Corporation issued a press release reporting earnings and other financial results for its third quarter of 2003. A copy of the press release is attached as Exhibit 99.1. The information in this Current Report on Form 8-K, including Exhibit 99.1, shall be considered "filed" under the Securities Exchange Act of 1934. SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized. MERCANTILE BANK CORPORATION By: /s/ Charles E. Christmas --------------------------------------- Charles E. Christmas Senior Vice President, Chief Financial Officer and Treasurer Date: October 7, 2003 EXHIBIT INDEX Exhibit Number Description 99.1 Press release of Mercantile Bank Corporation reporting financial results and earnings for the third quarter of 2003 EX-99.1 3 k79970exv99w1.txt PRESS RELEASE EXHIBIT 99.1 [MERCANTILE BANK CORPORATION LOGO] FOR FURTHER INFORMATION: AT MERCANTILE BANK CORPORATION: FOR MEDIA: Gerald R. Johnson, Jr. Charles Christmas Linda Margolin Chairman & CEO Chief Financial Officer Margolin & Associates, Inc. 616-406-3700 616-406-3750 216-765-0953 gjohnson@mercbank.com cchristmas@mercbank.com lmm@margolinIR.com MERCANTILE BANK CORPORATION REPORTS THIRD QUARTER EPS OF $0.39 LOANS UP $106.2 MILLION, OR 12.3%, FOR THE QUARTER WYOMING, Mich., October 7 -- Mercantile Bank Corporation (Nasdaq: MBWM), a rapidly growing community banking organization, reported third quarter 2003 net income of $2.23 million, an increase of 3.3 percent over the $2.16 million reported in the prior year third quarter. Diluted earnings per share were $0.39, unchanged from the prior year third quarter. Nine months year-to-date net income of $7.0 million increased 27.8 percent over the $5.5 million reported for the first nine months of 2002. Diluted per share earnings were $1.25, a 25.0 percent increase over the $1.00 from the prior year-to-date period. Third quarter 2003 earnings per share were impacted by the sale of approximately 1.2 million shares of common stock on September 19, which increased average diluted shares outstanding by 3.0 percent. In addition, there was a 56.8 percent increase in the loan loss provision to $1.4 million to reflect loan growth of $106.2 million, or 12.3 percent sequentially, during the third quarter. Asset quality continues to be strong. Gerald R. Johnson, Jr., Chairman and CEO, commented, "We are pleased to report our largest growth quarter since the inception of the Company. Our continued strong growth this quarter underscores our continued investment in people and infrastructure, enabling us to deliver quality banking services to the Grand Rapids and Holland communities. Our focus has been, and continues to be, sustainable long-term earnings growth, and our investments support this strategy. Our strong commercial origination volumes were primarily market share-driven and resulted from the successful efforts of our quality lenders and support staff, including new lenders hired during the year to meet the strong demand for our services. "Substantial loan growth has historically had a short-term impact on our earnings during the quarter, and this quarter is no different due to the additional loan loss provision required to support this growth. We are now positioned to take advantage of the results of this significant growth during future periods." Total revenue, comprised of net interest income and non-interest income, was $9.1 million for the third quarter of 2003, an increase of 26.6 percent over the $7.2 million reported in the third quarter of 2002. Net interest income increased 28.3 percent to $8.1 million, primarily resulting from a 31.5 percent increase in average earning assets. Mr. Johnson noted, "Our growth in net interest income reflects the addition of new business relationships as well as the success of our asset/liability management; we have maintained our net interest margin within a 10-basis point range over the last four quarters." For the third quarter of 2003, non-interest income rose 15.2 percent above the prior year third quarter. Excluding securities gains recorded in both quarters, non-interest income rose 25.3 percent to $1.0 million this quarter. New and existing business relationships continue to drive growth in fee income, while mortgage activity has moderated somewhat. Non-interest expense for the third quarter of this year increased 45.6 percent from the year-ago quarter, again reflecting overall growth in the company. During the last twelve months, Mercantile opened two full-service branches, and a loan production office. Salaries and benefits increased 50.0 percent as FTE employees grew 38.1 percent to 156. The Company's efficiency ratio was 52.3 percent in the third quarter of 2003 compared to 45.4 percent in the third quarter of 2002. Total assets were $1.15 billion at September 30, 2003, an increase of $283.5 million, or 32.6 percent, from the prior year quarter-end. Loans were up $255.0 million, or 35.6 percent. Total deposits, including repurchase agreements, grew by $167.6 million, or 21.8 percent. Over the past year, $70.0 million in FHLB advances were added to the funding base. Asset quality continues to be strong. Net charge-offs declined throughout 2003, and were 0.02 percent of average loans for the third quarter, down from 0.04 percent for the second quarter of 2003 and from 0.14 percent for the third quarter of 2002. For the fifth straight quarter, past due and non-accrual loans declined, and at September 30, 2003, totaled $287,000, or 0.03 percent of total loans. The ratio of loan loss reserves to total loans was 1.39% at quarter-end. Shareholders' equity ended the quarter at $122.2 million, a twelve-month increase of $44.6 million, or 57.5 percent. On September 19, 2003, Mercantile sold 1,195,310 shares of common stock in an underwritten public offering at a per share price of $33.26. Net proceeds were $37.4 million. The offering further strengthens Mercantile's well-capitalized status; its risk-based capital ratio at September 30, 2003 totaled 13.9 percent. At quarter-end, Mercantile had 6,624,868 shares of common stock outstanding, an increase of 22.2 percent from June 30, 2003. The company paid a cash dividend of $0.08 per share in the third quarter of this year. About Mercantile Bank Corporation Mercantile Bank Corporation is the bank holding company for Mercantile Bank of West Michigan. The Bank's primary service area is the Kent and Ottawa County area of West Michigan, which includes the City of Grand Rapids, the second-largest city in the State of Michigan. The Bank, through its main office and four full-service branches in greater Grand Rapids, provides a wide variety of commercial banking services primarily to businesses, individuals and governmental units. In addition, a retail mortgage loan production office is located in Holland, Michigan, a community located thirty miles southwest of Grand Rapids. Mercantile Bank Corporation's common stock is listed on the Nasdaq National Market under the symbol "MBWM." Forward-Looking Statements This news release contains comments or information that constitute forward-looking statements (within the meaning of the Private Securities Litigation Reform Act of 1995) that are based on current expectations that involve a number of risks and uncertainties. Actual results may differ materially from the results expressed in forward-looking statements. Factors that might cause such a difference include changes in interest rates and interest rate relationships; demand for products and services; the degree of competition by traditional and non-traditional competitors; changes in banking regulation; changes in tax laws; changes in prices, levies, and assessments; the impact of technological advances; governmental and regulatory policy changes; the outcomes of contingencies; trends in customer behavior as well as their ability to repay loans; changes in the national and local economy; and other factors, including risk factors, referred to from time to time in filings made by Mercantile with the Securities and Exchange Commission. Mercantile undertakes no obligation to update or clarify forward-looking statements, whether as a result of new information, future events or otherwise. Mercantile Bank Corporation Third Quarter 2003 Results MERCANTILE BANK CORPORATION CONSOLIDATED BALANCE SHEETS
SEPTEMBER 30, DECEMBER 31, SEPTEMBER 30, 2003 2002 2002 ---- ---- ---- (Unaudited) (Audited) (Unaudited) ASSETS Cash and due from banks $ 32,600,000 $ 23,404,000 $ 29,429,000 Short term investments 230,000 213,000 207,000 Federal funds sold 11,800,000 4,500,000 12,000,000 --------------- --------------- --------------- Total cash and cash equivalents 44,630,000 28,117,000 41,636,000 Securities available for sale 61,579,000 59,614,000 55,119,000 Securities held to maturity 42,444,000 36,493,000 31,140,000 Federal Home Loan Bank stock 3,927,000 786,000 786,000 Total loans and leases 972,191,000 771,554,000 717,199,000 Allowance for loan and lease losses (13,482,000) (10,890,000) (10,193,000) --------------- --------------- --------------- Total Loans and leases, net 958,709,000 760,664,000 707,006,000 Premises and equipment, net 15,229,000 12,174,000 11,328,000 Bank owned life insurance policies 16,013,000 14,876,000 14,673,000 Accrued interest receivable 4,142,000 3,336,000 3,444,000 Other assets 7,210,000 5,795,000 5,250,000 --------------- --------------- --------------- Total assets $ 1,153,883,000 $ 921,855,000 $ 870,382,000 =============== =============== =============== LIABILITIES AND STOCKHOLDERS' EQUITY Deposits: Noninterest-bearing $ 77,448,000 $ 62,405,000 $ 67,831,000 Interest-bearing 812,133,000 691,708,000 654,319,000 --------------- --------------- --------------- Total deposits 889,581,000 754,113,000 722,150,000 Securities sold under agreement to repurchase 48,310,000 50,335,000 48,135,000 Federal Home Loan Bank advances 70,000,000 15,000,000 0 Other borrowed money 1,012,000 576,000 516,000 Accrued expenses and other liabilities 6,823,000 5,997,000 6,001,000 Trust preferred securities 16,000,000 16,000,000 16,000,000 --------------- --------------- --------------- Total liabilities 1,031,726,000 842,021,000 792,802,000 STOCKHOLDERS' EQUITY Common stock 113,118,000 75,530,000 69,375,000 Retained earnings 8,951,000 3,250,000 7,125,000 Accumulated other comprehensive income 88,000 1,054,000 1,080,000 --------------- --------------- --------------- Total stockholders' equity 122,157,000 79,834,000 77,580,000 Total liabilities and stockholders' equity $ 1,153,883,000 $ 921,855,000 $ 870,382,000 =============== =============== ===============
Mercantile Bank Corporation Third Quarter 2003 Results MERCANTILE BANK CORPORATION CONSOLIDATED REPORTS OF INCOME
THREE MONTHS ENDED THREE MONTHS ENDED NINE MONTHS ENDED NINE MONTHS ENDED September 30, 2003 September 30, 2002 September 30, 2003 September 30, 2002 ------------------ ------------------ ------------------ ------------------ (Unaudited) (Unaudited) (Unaudited) (Unaudited) INTEREST INCOME Loans and leases, including fees $12,679,000 $11,132,000 $36,345,000 $31,553,000 Investment securities 1,164,000 1,144,000 3,566,000 3,344,000 Federal funds sold 11,000 41,000 50,000 98,000 Short-term investments 0 1,000 1,000 2,000 ----------- ----------- ----------- ----------- Total interest income 13,854,000 12,318,000 39,962,000 34,997,000 INTEREST EXPENSE Deposits 4,952,000 5,396,000 15,353,000 16,086,000 Short-term borrowings 168,000 242,000 512,000 668,000 Federal Home Loan Bank advances 274,000 0 531,000 0 Long-term borrowings 403,000 398,000 1,204,000 1,192,000 ----------- ----------- ----------- ----------- Total interest expense 5,797,000 6,036,000 17,600,000 17,946,000 ----------- ----------- ----------- ----------- Net interest income 8,057,000 6,282,000 22,362,000 17,051,000 Provision for loan and lease losses 1,380,000 880,000 2,850,000 2,022,000 ----------- ----------- ----------- ----------- Net interest income after provision for loan and lease losses 6,677,000 5,402,000 19,512,000 15,029,000 NON INTEREST INCOME Service charges on accounts 303,000 243,000 852,000 660,000 Net gain on sales of securities 59,000 121,000 271,000 270,000 Other income 697,000 555,000 2,148,000 1,119,000 ----------- ----------- ----------- ----------- Total non interest income 1,059,000 919,000 3,271,000 2,049,000 NON INTEREST EXPENSE Salaries and benefits 3,029,000 2,020,000 8,285,000 5,648,000 Occupancy 353,000 265,000 1,032,000 796,000 Furniture and equipment 272,000 183,000 738,000 545,000 Other expense 1,110,000 803,000 3,099,000 2,328,000 ----------- ----------- ----------- ----------- Total non interest expense 4,764,000 3,271,000 13,154,000 9,317,000 ----------- ----------- ----------- ----------- Income before federal income tax expense 2,972,000 3,050,000 9,629,000 7,761,000 Federal income tax expense 744,000 894,000 2,628,000 2,285,000 ----------- ----------- ----------- ----------- Net income $ 2,228,000 $ 2,156,000 $ 7,001,000 $ 5,476,000 =========== =========== =========== =========== Basic earnings per share $ 0.40 $ 0.40 $ 1.28 $ 1.01 Diluted earnings per share $ 0.39 $ 0.39 $ 1.25 $ 1.00 Average shares outstanding * 5,516,702 5,405,759 5,450,496 5,405,685 Average diluted shares outstanding * 5,662,342 5,500,028 5,583,471 5,502,697
* - Adjusted for 5% stock dividend paid on February 3, 2003 Mercantile Bank Corporation Third Quarter 2003 Results MERCANTILE BANK CORPORATION CONSOLIDATED FINANCIAL HIGHLIGHTS (Unaudited)
QUARTERLY ------------------------------------------------------------------------- 2003 2003 2003 2002 2002 (dollars in thousands except per share data) 3RD QTR 2ND QTR 1ST QTR 4TH QTR 3RD QTR ----------- ------------ ------------- ------------ ------------ EARNINGS Net interest income $ 8,057 7,511 6,794 6,603 6,282 Provision for loan and lease losses $ 1,380 845 625 980 880 NonInterest income $ 1,059 1,235 977 1,004 919 NonInterest expense $ 4,764 4,361 4,029 3,464 3,271 Net income $ 2,228 2,540 2,233 2,281 2,156 Basic earnings per share $ 0.40 0.47 0.41 0.42 0.40 Diluted earnings per share $ 0.39 0.46 0.40 0.41 0.39 Average shares outstanding * 5,516,702 5,421,120 5,412,521 5,405,759 5,405,759 Average diluted shares outstanding * 5,662,342 5,545,892 5,535,167 5,507,165 5,500,028 PERFORMANCE RATIOS Return on average assets 0.82% 1.02% 0.97% 1.02% 1.04% Return on average common equity 10.22% 12.36% 11.23% 11.52% 11.20% Net interest margin (fully tax-equivalent) 3.19% 3.24% 3.17% 3.21% 3.27% Efficiency ratio 52.26% 49.86% 51.85% 45.54% 45.42% Full-time equivalent employees 156 147 128 117 113 CAPITAL Average equity to average assets 7.99% 8.22% 8.59% 8.89% 9.30% Tier 1 leverage capital ratio 12.75% 9.86% 10.30% 10.72% 11.26% Tier 1 risk-based capital ratio 12.69% 10.13% 10.55% 10.85% 11.24% Total risk-based capital ratio 13.93% 11.38% 11.79% 12.10% 12.48% Book value per share $ 18.44 15.39 15.05 14.77 14.35 Cash dividend per share $ 0.08 0.08 0.08 NA NA ASSET QUALITY Gross loan charge-offs $ 95 297 132 287 250 Net loan charge-offs $ 56 93 109 283 249 Net loan charge-offs to average loans 0.02% 0.04% 0.06% 0.15% 0.14% Allowance for loan and lease losses $ 13,482 12,158 11,406 10,890 10,193 Allowance for losses to total loans 1.39% 1.40% 1.40% 1.41% 1.42% Past due and nonaccrual loans $ 287 495 533 796 994 Past due and nonaccrual loans to total loans 0.03% 0.06% 0.07% 0.10% 0.14% Other real estate and repossessed assets$ 0 0 134 100 0 END OF PERIOD BALANCES Loans and leases $ 972,191 866,009 812,487 771,554 717,199 Total earning assets (before allowance) $ 1,092,171 972,963 914,109 873,160 816,451 Total assets $ 1,153,883 1,034,774 967,787 921,856 870,382 Deposits $ 889,581 843,587 801,097 754,113 722,150 Shareholders' equity $ 122,157 83,457 81,530 79,835 77,580 AVERAGE BALANCES Loans and leases $ 918,966 842,370 786,406 736,029 688,550 Total earning assets (before allowance) $ 1,029,203 953,851 892,660 836,809 782,435 Total assets $ 1,082,826 1,002,087 938,043 883,860 821,149 Deposits $ 867,291 809,986 774,836 725,145 676,661 Shareholders' equity $ 86,510 82,410 80,606 78,590 76,350 YEAR-TO-DATE -------------------------- (dollars in thousands except per share data) 2003 2002 ----------- ------------ EARNINGS Net interest income 22,362 17,051 Provision for loan and lease losses 2,850 2,022 NonInterest income 3,271 2,049 NonInterest expense 13,154 9,317 Net income 7,001 5,476 Basic earnings per share 1.28 1.01 Diluted earnings per share 1.25 1.00 Average shares outstanding * 5,450,496 5,405,685 Average diluted shares outstanding * 5,583,471 5,502,697 PERFORMANCE RATIOS Return on average assets 0.93% 0.95% Return on average common equity 11.25% 9.87% Net interest margin (fully tax-equivalent) 3.20% 3.18% Efficiency ratio 51.32% 48.80% Full-time equivalent employees 156 113 CAPITAL Average equity to average assets 8.25% 9.66% Tier 1 leverage capital ratio 12.75% 11.26% Tier 1 risk-based capital ratio 12.69% 11.24% Total risk-based capital ratio 13.93% 12.48% Book value per share 18.44 14.35 Cash dividend per share 0.24 NA ASSET QUALITY Gross loan charge-offs 524 419 Net loan charge-offs 258 323 Net loan charge-offs to average loans 0.04% 0.07% Allowance for loan and lease losses 13,482 10,193 Allowance for losses to total loans 1.39% 1.42% Past due and nonaccrual loans 287 994 Past due and nonaccrual loans to total loans 0.03% 0.14% Other real estate and repossessed assets$ 0 0 END OF PERIOD BALANCES Loans and leases 972,191 717,199 Total earning assets (before allowance) $ 1,092,171 816,451 Total assets 1,153,883 870,382 Deposits 889,581 722,150 Shareholders' equity 122,157 77,580 AVERAGE BALANCES Loans and leases 849,733 647,455 Total earning assets (before allowance) $ 959,072 735,909 Total assets 1,008,182 767,944 Deposits 817,709 630,444 Shareholders' equity 83,197 74,198
* - Adjusted for 5% stock dividend paid on February 3, 2003 -----END PRIVACY-ENHANCED MESSAGE-----