-----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, PpTDvxoxtfDbhpzKkVZhkQsJ6G2nzEmqTpkgvo5Qw8Ty3+yoONf+ZVJ2C0//gUIP 3Op1/v7jRYpZ5/6xU3SR1Q== 0000950124-04-000017.txt : 20040107 0000950124-04-000017.hdr.sgml : 20040107 20040107084949 ACCESSION NUMBER: 0000950124-04-000017 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 20040107 ITEM INFORMATION: FILED AS OF DATE: 20040107 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: 04511731 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 k81880e8vk.txt CURRENT REPORT DATED JANUARY 7, 2004 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): JANUARY 7, 2004 -------------------- 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 12. RESULTS OF OPERATIONS AND FINANCIAL CONDITION. Earnings Release. On January 7, 2004, Mercantile Bank Corporation issued a press release reporting earnings and other financial results for the quarter and year ended December 31, 2003. A copy of the press release is attached as Exhibit 99.1 and incorporated here by reference. The information in this Current Report on Form 8-K, including Exhibit 99.1, shall not be deemed "filed" for purposes of Section 18 of the Securities Exchange Act of 1934 or otherwise subject to the liability of that section, nor shall it be deemed incorporated by reference in any filing under the Securities Act of 1933. 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: January 7, 2004 EXHIBIT INDEX Exhibit Number Description 99.1 Press release of Mercantile Bank Corporation reporting financial results and earnings for the quarter and year ended December 31, 2003. EX-99.1 3 k81880exv99w1.txt PRESS RELEASE OF MERCANTILE BANK CORP . . . [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 ANNOUNCES 2003 NET INCOME OF $10.0 MILLION, UP 29.1%; Fourth Quarter Net Increases 32.2% WYOMING, MICH., January 7, 2004 -- Mercantile Bank Corporation (Nasdaq: MBWM), a rapidly growing community banking organization, reported record 2003 net income of $10.0 million, up 29.1 percent from the $7.8 million reported in the 2002 fiscal year. Diluted earnings per share were $1.69, an increase of 19.9 percent over the $1.41 reported for the prior fiscal year. Diluted earnings per share growth reflects the impact of a common stock offering completed on October 22, 2003, which increased average shares outstanding by 1.2 million, and largely contributed to the 7.6 percent increase in average diluted shares outstanding compared to 2002. For the fourth quarter of 2003, net income was $3.0 million, an increase of 32.2 percent over the $2.3 million reported in the prior-year fourth quarter. Diluted earnings per share were $0.44, up 7.3 percent from the $0.41 reported in the fourth quarter of 2002. Diluted earnings per share growth again reflects the impact of the common stock offering completed in 2003, which increased fourth quarter average diluted shares outstanding by 25.6 percent. Gerald R. Johnson, Jr., Chairman and CEO, commented, "We continue to sustain the combination of strong loan and deposit growth, exceptional asset quality and well-controlled operating costs that are the hallmarks of Mercantile's performance excellence. Our business model has proven itself with yet another record year, despite a West Michigan economy that has not yet regained significant momentum. Our loan portfolio grew over 34 percent this past year, driven largely by market share gains. Mercantile has become a lender of choice among small and mid-sized businesses seeking our combination of lending expertise and unparalleled service. "We continue to invest in infrastructure to support our growing customer base. This past December, we broke ground on a 60,000 square foot corporate headquarters in downtown Grand Rapids, which is scheduled for completion in mid-2005. We also began construction on a 20,000 square foot full-service banking center in Holland, Michigan, which will replace our current retail mortgage loan production office by late fall of 2004. The City President in charge of our Holland expansion is already in place, and we are in the process of hiring branch, lending and support staff." Total revenue, comprised of net interest income and non-interest income, totaled $35.7 million in 2003, an increase of 33.6 percent over the $26.7 million earned during 2002. Net interest income increased 32.4 percent to $31.3 million, reflecting a combination of 31.2 percent growth in average earning assets and a 3 basis point increase in the net interest margin to 3.22 percent for the year. Mr. Johnson noted, "The quality customers we attract continue to drive top-line growth. As the economy improves and our clients' businesses strengthen, we look forward to expanding the many new relationships with an additional layer of organic loan growth." Non-interest income net of securities gains was up 45.2 percent, benefiting from growth in deposit relationships, residential mortgage loan refinancings and the purchase of bank-owned life insurance in August of 2002. Non-interest expense increased 41.4 percent to support Mercantile's growth; the majority of the dollar increase related to salaries and benefits from the 37.6 percent growth in FTE employees, including several experienced commercial lenders, during the course of the year. Occupancy and equipment expense increased as a result of the opening of the Holland loan production office and Knapp Street branch in May, 2003, as well as the Kentwood office in December of 2002. Mercantile's efficiency ratio was 50.7 percent for the year, up from 47.9 percent in 2002. Mr. Johnson noted that Mercantile's efficiency ratio is superior to its peer group average, and in light of Mercantile's continued investment in infrastructure over a relatively brief time-frame, he is quite pleased with the ratio at its current level. Longer-term, it is the Company's goal to drive the ratio below 50 percent. Regarding Mercantile's asset quality, Mr. Johnson stated, "Our charge-off performance remains exceptional." Non-performing loans were equivalent to 0.17 percent of total loans at year-end 2003 compared to 0.10 at prior-year end. The level of loan and lease loss reserve was $14.4 million, or 1.39 percent of total loans and leases at December 31, 2003. The loan and lease loss provision increased 26.6 percent in 2003, to $3.8 million, mirroring growth in the loan portfolio. Net charge-offs for the year were 0.04 percent of average loans, compared to 0.09 percent for 2002. Total assets were $1.2 billion at December 31, 2003, an increase of $281.0 million, or 30.5 percent from the prior year-end. Loans were up $264.4 million, or 34.3 percent, during the same time period, primarily funded by increases of $148.8 million in deposits and repurchase agreements, $75.0 million in advances from the Federal Home Loan Bank, and $42.8 million in net proceeds from the sale of common stock. Shareholders' equity ended the year at $130.2 million, a twelve-month increase of $50.4 million, or 63.1 percent. Mercantile remains a "well-capitalized" institution; the total risk-based capital ratio at December 31, 2003 was 13.8 percent. At year-end, Mercantile had 6,805,914 million shares of common stock outstanding. Mr. Johnson concluded, "After six years of exceptional growth, Mercantile has a 9.1 percent share of this $9.2 billion deposit market; we still see outstanding growth opportunities ahead. The Mercantile team remains committed to its proven business strategy." About the Company 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 Fourth Quarter 2003 Results MERCANTILE BANK CORPORATION CONSOLIDATED BALANCE SHEETS
DECEMBER 31, DECEMBER 31, DECEMBER 31, 2003 2002 2001 ----- ----- ---- (Unaudited) (Audited) (Audited) ASSETS Cash and due from banks $ 16,309,000 $ 23,404,000 $ 14,467,000 Short term investments 255,000 213,000 171,000 Federal funds sold 0 4,500,000 5,300,000 ----------------- ----------------- ----------------- Total cash and cash equivalents 16,564,000 28,117,000 19,938,000 Securities available for sale 71,421,000 59,614,000 52,054,000 Securities held to maturity 45,112,000 36,493,000 25,979,000 Federal Home Loan Bank stock 4,977,000 786,000 785,000 Total loans and leases 1,035,963,000 771,554,000 587,248,000 Allowance for loan and lease losses (14,379,000) (10,890,000) (8,494,000) ----------------- ----------------- ----------------- Total Loans and leases, net 1,021,584,000 760,664,000 578,754,000 Premises and equipment, net 15,305,000 12,174,000 9,557,000 Bank owned life insurance policies 16,441,000 14,876,000 3,991,000 Accrued interest receivable 4,098,000 3,336,000 2,811,000 Other assets 7,330,000 5,795,000 4,813,000 ----------------- ----------------- ----------------- Total assets $ 1,202,832,000 $ 921,855,000 $ 698,682,000 ================= ================= ================= LIABILITIES AND SHAREHOLDERS' EQUITY Deposits: Noninterest-bearing $ 76,579,000 $ 62,405,000 $ 43,162,000 Interest-bearing 826,313,000 691,708,000 525,915,000 ----------------- ----------------- ----------------- Total deposits 902,892,000 754,113,000 569,077,000 Securities sold under agreement to repurchase 49,545,000 50,335,000 36,485,000 Federal funds purchased 6,000,000 0 0 Federal Home Loan Bank advances 90,000,000 15,000,000 0 Other borrowed money 1,114,000 576,000 239,000 Accrued expenses and other liabilities 7,080,000 5,997,000 5,418,000 Subordinated debentures 16,000,000 16,000,000 16,000,000 ----------------- ----------------- ----------------- Total liabilities 1,072,631,000 842,021,000 627,219,000 SHAREHOLDERS' EQUITY Common stock 118,560,000 75,530,000 69,406,000 Retained earnings 11,421,000 3,250,000 1,649,000 Accumulated other comprehensive income 220,000 1,054,000 408,000 ----------------- ----------------- ----------------- Total shareholders' equity 130,201,000 79,834,000 71,463,000 Total liabilities and shareholders' equity $ 1,202,832,000 $ 921,855,000 $ 698,682,000 ================= ================= =================
Mercantile Bank Corporation Fourth Quarter 2003 Results MERCANTILE BANK CORPORATION CONSOLIDATED REPORTS OF INCOME
THREE MONTHS ENDED THREE MONTHS ENDED TWELVE MONTHS ENDED TWELVE MONTHS ENDED December 31, December 31, December 31, December 31, 2003 2002 2003 2002 ------------ ------------ ------------ ------------ (Unaudited) (Unaudited) (Unaudited) (Unaudited) INTEREST INCOME Loans and leases, including fees $13,355,000 $11,479,000 $49,700,000 $43,032,000 Investment securities 1,334,000 1,124,000 4,900,000 4,468,000 Federal funds sold 7,000 32,000 57,000 130,000 Short-term investments 0 0 1,000 2,000 ----------- ----------- ----------- ----------- Total interest income 14,696,000 12,635,000 54,658,000 47,632,000 INTEREST EXPENSE Deposits 4,754,000 5,382,000 20,107,000 21,468,000 Short-term borrowings 200,000 231,000 712,000 899,000 Federal Home Loan Bank advances 390,000 20,000 921,000 20,000 Long-term borrowings 403,000 399,000 1,607,000 1,591,000 ----------- ----------- ----------- ----------- Total interest expense 5,747,000 6,032,000 23,347,000 23,978,000 ----------- ----------- ----------- ----------- Net interest income 8,949,000 6,603,000 31,311,000 23,654,000 Provision for loan and lease losses 950,000 980,000 3,800,000 3,002,000 ----------- ----------- ----------- ----------- Net interest income after provision for loan and lease losses 7,999,000 5,623,000 27,511,000 20,652,000 NON INTEREST INCOME Service charges on accounts 326,000 255,000 1,178,000 915,000 Net gain on sales of securities 50,000 0 321,000 270,000 Other income 714,000 749,000 2,862,000 1,868,000 ----------- ----------- ----------- ----------- Total non interest income 1,090,000 1,004,000 4,361,000 3,053,000 NON INTEREST EXPENSE Salaries and benefits 3,086,000 2,123,000 11,371,000 7,771,000 Occupancy 354,000 273,000 1,386,000 1,069,000 Furniture and equipment 271,000 204,000 1,009,000 749,000 Other expense 1,206,000 864,000 4,305,000 3,192,000 ----------- ----------- ----------- ----------- Total non interest expense 4,917,000 3,464,000 18,071,000 12,781,000 ----------- ----------- ----------- ----------- Income before federal income tax 4,172,000 3,163,000 13,801,000 10,924,000 Federal income tax expense 1,157,000 882,000 3,785,000 3,167,000 ----------- ----------- ----------- ----------- Net income $ 3,015,000 $ 2,281,000 $10,016,000 $ 7,757,000 =========== =========== =========== =========== Basic earnings per share $ 0.45 $ 0.42 $ 1.73 $ 1.43 Diluted earnings per share $ 0.44 $ 0.41 $ 1.69 $ 1.41 Average shares outstanding * 6,763,997 5,405,759 5,781,570 5,405,703 Average diluted shares outstanding * 6,914,441 5,507,165 5,919,675 5,503,323 * - Adjusted for 5% stock dividend paid on February 3, 2003
Mercantile Bank Corporation Fourth Quarter 2003 Results MERCANTILE BANK CORPORATION CONSOLIDATED FINANCIAL HIGHLIGHTS (Unaudited)
QUARTERLY YEAR-TO-DATE ---------------------------------------------------- ------------------------- 2003 2003 2003 2003 2002 (dollars in thousands except per share data) 4TH QTR 3RD QTR 2ND QTR 1ST QTR 4TH QTR 2003 2002 -------- ------- ------- ------- ------- ---- ---- EARNINGS Net interest income $ 8,949 8,057 7,511 6,794 6,603 31,311 23,654 Provision for loan and lease losses $ 950 1,380 845 625 980 3,800 3,002 NonInterest income $ 1,090 1,059 1,235 977 1,004 4,361 3,053 NonInterest expense $ 4,917 4,764 4,361 4,029 3,464 18,071 12,781 Net income $ 3,015 2,228 2,540 2,233 2,281 10,016 7,757 Basic earnings per share $ 0.45 0.40 0.47 0.41 0.42 1.73 1.43 Diluted earnings per share $ 0.44 0.39 0.46 0.40 0.41 1.69 1.41 Average shares outstanding * 6,763,997 5,516,702 5,421,120 5,412,521 5,405,759 5,781,570 5,405,703 Average diluted shares outstanding * 6,914,441 5,662,342 5,545,892 5,535,167 5,507,165 5,919,675 5,503,323 PERFORMANCE RATIOS Return on average assets 1.02% 0.82% 1.02% 0.97% 1.02% 0.96% 0.97% Return on average common equity 9.38% 10.22% 12.36% 11.23% 11.52% 10.61% 10.30% Net interest margin (fully tax-equivalent) 3.26% 3.19% 3.24% 3.17% 3.21% 3.22% 3.19% Efficiency ratio 48.98% 52.26% 49.86% 51.85% 45.54% 50.66% 47.86% Full-time equivalent employees 161 156 147 128 117 161 117 CAPITAL Average equity to average assets 10.91% 7.99% 8.22% 8.59% 8.89% 9.00% 9.45% Tier 1 leverage capital ratio 12.49% 12.75% 9.86% 10.30% 10.72% 12.49% 10.72% Tier 1 risk-based capital ratio 12.60% 12.69% 10.13% 10.55% 10.85% 12.60% 10.85% Total risk-based capital ratio 13.84% 13.93% 11.38% 11.79% 12.10% 13.84% 12.10% Book value per share $ 19.13 18.44 15.39 15.05 14.77 19.13 14.77 Cash dividend per share $ 0.08 0.08 0.08 0.08 NA 0.32 NA ASSET QUALITY Gross loan charge-offs $ 72 95 297 132 287 596 706 Net loan charge-offs $ 53 56 93 109 283 311 606 Net loan charge-offs to average loans 0.02% 0.02% 0.04% 0.06% 0.15% 0.04% 0.09% Allowance for loan and lease losses $ 14,379 13,482 12,158 11,406 10,890 14,379 10,890 Allowance for losses to total loans 1.39% 1.39% 1.40% 1.40% 1.41% 1.39% 1.41% Past due and nonaccrual loans $ 1,785 287 495 533 796 1,785 796 Past due and nonaccrual loans to total loans 0.17% 0.03% 0.06% 0.07% 0.10% 0.17% 0.10% Other real estate and repossessed assets $ 0 0 0 134 100 0 100 END OF PERIOD BALANCES Loans and leases $1,035,963 972,191 866,009 812,487 771,554 1,035,963 771,554 Total earning assets (before allowance) $1,157,728 1,092,171 972,963 914,109 873,160 1,157,728 873,160 Total assets $1,202,832 1,153,883 1,034,774 967,787 921,855 1,202,832 921,855 Deposits $ 902,892 889,581 843,587 801,097 754,113 902,892 754,113 Shareholders' equity $ 130,201 122,157 83,457 81,530 79,834 130,201 79,834 AVERAGE BALANCES Loans and leases $ 999,618 918,966 842,370 786,406 736,029 887,512 669,781 Total earning assets (before allowance) $1,115,960 1,029,203 953,851 892,660 836,809 998,616 761,341 Total assets $1,168,902 1,082,826 1,002,087 938,043 883,860 1,048,692 797,161 Deposits $ 886,299 867,291 809,986 774,836 725,145 834,998 654,314 Shareholders' equity $ 127,511 86,510 82,410 80,606 78,590 94,366 75,305
* - Adjusted for 5% stock dividend paid on February 3, 2003 -----END PRIVACY-ENHANCED MESSAGE-----