-----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, Mvik6jb/0q+IrDlj1E6VBZMO+2TIhPAHHEVuzq3yHyFdri3vv8sdi0XxFD0Ef1Gk vDYJlp0E0x/qf4X608IzHg== 0000950124-04-001513.txt : 20040408 0000950124-04-001513.hdr.sgml : 20040408 20040408092157 ACCESSION NUMBER: 0000950124-04-001513 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 20040408 ITEM INFORMATION: FILED AS OF DATE: 20040408 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: 04723595 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 k84355ae8vk.txt CURRENT REPORT, DATED APRIL 8, 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): APRIL 8, 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 April 8, 2004, Mercantile Bank Corporation issued a press release reporting earnings and other financial results for the quarter ended March 31, 2004. 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. 2 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: April 8, 2004 3 EXHIBIT INDEX Exhibit Number Description - -------------- ----------- 99.1 Press release of Mercantile Bank Corporation reporting financial results and earnings for the quarter ended March 31, 2004. 4 EX-99.1 3 k84355aexv99w1.txt PRESS RELEASE FOR THE QUARTER ENDED MARCH 31, 2004 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 ANNOUNCES FIRST QUARTER NET INCOME OF $3.0 MILLION, UP 33.1% First Quarter Loan Growth of $75.2 Million, Up 29% Annualized WYOMING, MICH., April 8, 2004 -- Mercantile Bank Corporation (Nasdaq: MBWM), a rapidly growing community banking organization, reported net income for the first quarter of 2004 of $3.0 million, up 33.1 percent from the $2.2 million reported in the first quarter of 2003. Diluted earnings per share were $0.43, an increase of 7.5 percent over the $0.40 reported for the prior-year period, reflecting the impact of a common stock offering completed in the fourth quarter of 2003, which increased average shares outstanding by 1.4 million, or 25.8 percent. Gerald R. Johnson, Jr., Chairman and CEO, commented, "This was an excellent quarter for Mercantile. We continue to report solid balance sheet and income growth. Despite weakness in our local economy, loan growth has been exceptionally strong, reflecting the high demand for our quality services; loans rose $75 million for the quarter, or 29% on an annualized basis. The strong loan growth required us to add substantially to reserves to maintain our reserve posture, thereby reducing the bottom line for this reporting period. However, current loan growth will contribute to high performance and sustain our profit stream into future quarters. We are extremely proud of Mercantile's organic growth rate; without acquisitions, we have reached $1.3 billion in assets since our inception in December of 1997. "The success of our strategy is based on a combination of high service, high credit quality and low overhead. We are pleased to maintain our strong expense discipline while building infrastructure at a rapid pace. Over the past year, our investment in premises and equipment has increased by one-third to keep up with the strong demand for our services. We now operate a full-service banking facility in Holland, and expect our new 30,000 square foot full-service banking center under construction there to be completed in late 2004. Construction of our new 60,000 square foot corporate headquarters in downtown Grand Rapids is progressing on schedule, with an estimated completion date of mid-2005. Despite these investments and the expense associated with facility openings over the last twelve months, we are operating with an efficiency ratio under 50 percent." Total revenue, comprised of net interest income and non-interest income, was $10.5 million in the first quarter of 2004, an increase of 35.5 percent over the $7.8 million earned during the prior-year period. Mr. Johnson noted, "Revenue growth continues to be the primary driver of our bottom line. Loan growth and margin expansion both contributed to the high level of revenue growth we experienced this quarter." Net interest income increased 39.9 percent to $9.5 million, reflecting a combination of 34.1 percent growth in average earning assets and a 9 basis point increase in the net interest margin, to 3.26 percent. Non-interest income, net of securities gains, declined 2.6 percent; growth in deposit service charges was offset by a decline in fees from the lower level of residential mortgage loan refinancings. Non-interest expense increased 27.9 percent to support Mercantile's growth above first quarter 2003. Primarily reflecting asset growth of 33.6 percent and an increase in FTE employees of 30.5 percent, salaries and benefits rose 31.5 percent for the same period. Occupancy and equipment expense also increased, largely as a result of the opening of the Holland banking office and Knapp Street branch in May, 2003. Mercantile's efficiency ratio improved to 49.0 percent for the first quarter of 2004 from 51.9 percent for last year's first quarter. Regarding Mercantile's asset quality, Mr. Johnson stated, "Net charge-offs remain modest compared to our peers. While we identified one new non-performing loan this quarter, our total non-performings remain at a low level." Non-performing loans were 0.28 percent of total loans at March 31, 2004, compared to 0.07 percent last year. Annualized net charge-offs for the quarter were 0.11 percent of average loans, compared to 0.06 percent for the prior-year period. The loan and lease loss provision was $1.2 million for the first quarter of 2004, an increase of 99.0 percent over the prior-year period, reflecting growth in the loan portfolio and the aforementioned charge-offs. The level of the allowance for loan and lease losses was $15.3 million, or 1.38 percent of total loans and leases at March 31, 2004. Total assets were $1.3 billion at March 31, 2004, an increase of $325.6 million, or 33.6 percent from the prior-year quarter. Loans rose $298.7 million, or 36.8 percent during the same time period, primarily funded by $194.2 million in deposits, $85.0 million in advances from the Federal Home Loan Bank, and $42.8 million in net proceeds from the sale of common stock. Shareholders' equity at March 31, 2004 was $133.1 million, a twelve-month increase of $51.5 million, or 63.2 percent. Mercantile's total risk-based capital ratio at quarter end was 13.2 percent. Mr. Johnson concluded, "We still see exceptional growth opportunities ahead, even as we await the eventual economic recovery in West Michigan. Our business model has been tested and successfully implemented by our experienced lending team, enabling us to be the lender of choice to an increasing number of small and mid-sized businesses in our market." 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 provides a wide variety of commercial banking services primarily to businesses, individuals, and governmental units through its five full-service offices in greater Grand Rapids, and its Holland, Michigan office 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 First Quarter 2004 Results MERCANTILE BANK CORPORATION CONSOLIDATED BALANCE SHEETS
MARCH 31, DECEMBER 31, MARCH 31, 2004 2003 2003 ---- ---- ---- (Unaudited) (Audited) (Unaudited) ASSETS Cash and due from banks $ 29,952,000 $ 16,309,000 $ 28,091,000 Short-term investments 717,000 255,000 203,000 Federal funds sold 5,000,000 0 0 --------------- --------------- --------------- Total cash and cash equivalents 35,669,000 16,564,000 28,294,000 Securities available for sale 64,974,000 71,421,000 61,465,000 Securities held to maturity 46,531,000 45,112,000 39,168,000 Federal Home Loan Bank stock 5,784,000 4,977,000 786,000 Total loans and leases 1,111,152,000 1,035,963,000 812,487,000 Allowance for loan and lease losses (15,337,000) (14,379,000) (11,406,000) --------------- --------------- --------------- Total loans and leases, net 1,095,815,000 1,021,584,000 801,081,000 Premises and equipment, net 16,580,000 15,305,000 12,459,000 Bank owned life insurance policies 16,618,000 16,441,000 15,384,000 Accrued interest receivable 4,824,000 4,098,000 3,860,000 Other assets 7,140,000 7,835,000 5,795,000 --------------- --------------- --------------- Total assets $ 1,293,935,000 $ 1,203,337,000 $ 968,292,000 =============== =============== =============== LIABILITIES AND STOCKHOLDERS' EQUITY Deposits: Noninterest-bearing $ 85,900,000 $ 76,579,000 $ 68,858,000 Interest-bearing 909,434,000 826,313,000 732,239,000 --------------- --------------- --------------- Total deposits 995,334,000 902,892,000 801,097,000 Securities sold under agreements to repurchase 41,613,000 49,545,000 45,238,000 Federal funds purchased 0 6,000,000 2,000,000 Federal Home Loan Bank advances 100,000,000 90,000,000 15,000,000 Subordinated debentures 16,495,000 16,495,000 16,495,000 Other borrowed money 1,361,000 1,114,000 839,000 Accrued expenses and other liabilities 6,057,000 7,090,000 6,093,000 --------------- --------------- --------------- Total liabilities 1,160,860,000 1,073,136,000 886,762,000 SHAREHOLDERS' EQUITY Common stock 118,684,000 118,560,000 75,560,000 Retained earnings 13,781,000 11,421,000 5,050,000 Accumulated other comprehensive income 610,000 220,000 920,000 --------------- --------------- --------------- Total shareholders' equity 133,075,000 130,201,000 81,530,000 Total liabilities and shareholders' equity $ 1,293,935,000 $ 1,203,337,000 $ 968,292,000 =============== =============== ===============
Mercantile Bank Corporation First Quarter 2004 Results MERCANTILE BANK CORPORATION CONSOLIDATED REPORTS OF INCOME
THREE MONTHS ENDED THREE MONTHS ENDED March 31, 2004 March 31, 2003 -------------- -------------- (Unaudited) (Unaudited) INTEREST INCOME Loans and leases, including fees $ 13,908,000 $ 11,443,000 Investment securities 1,426,000 1,216,000 Federal funds sold 19,000 16,000 Short-term investments 1,000 0 --------------- --------------- Total interest income 15,354,000 12,675,000 INTEREST EXPENSE Deposits 4,750,000 5,236,000 Short-term borrowings 170,000 171,000 Federal Home Loan Bank advances 529,000 74,000 Long-term borrowings 416,000 410,000 --------------- --------------- Total interest expense 5,865,000 5,891,000 --------------- --------------- Net interest income 9,489,000 6,784,000 Provision for loan and lease losses 1,244,000 625,000 --------------- --------------- Net interest income after provision for loan and lease losses 8,245,000 6,159,000 NON INTEREST INCOME Service charges on accounts 299,000 269,000 Net gain on sales of securities 78,000 0 Other income 662,000 718,000 --------------- --------------- Total non interest income 1,039,000 987,000 NON INTEREST EXPENSE Salaries and benefits 3,283,000 2,497,000 Occupancy 386,000 334,000 Furniture and equipment 273,000 221,000 Other expense 1,213,000 977,000 --------------- --------------- Total non interest expense 5,155,000 4,029,000 --------------- --------------- Income before federal income tax .. 4,129,000 3,117,000 Federal income tax expense 1,156,000 884,000 --------------- --------------- Net income $ 2,973,000 $ 2,233,000 =============== =============== Basic earnings per share $ 0.44 $ 0.41 Diluted earnings per share $ 0.43 $ 0.40 Average shares outstanding 6,818,067 5,412,521 Average diluted shares outstanding 6,965,835 5,535,167
Mercantile Bank Corporation First Quarter 2004 Results MERCANTILE BANK CORPORATION CONSOLIDATED FINANCIAL HIGHLIGHTS (Unaudited)
QUARTERLY ---------------------------------------------------------------------- 1ST QTR 4TH QTR 3RD QTR 2ND QTR 1ST QTR (dollars in thousands except per share data) 2004 2003 2003 2003 2003 ---------- ---------- ---------- ---------- ---------- EARNINGS Net interest income $ 9,489 8,939 8,047 7,501 6,784 Provision for loan and lease losses $ 1,244 950 1,380 845 625 NonInterest income $ 1,039 1,100 1,069 1,245 987 NonInterest expense $ 5,155 4,917 4,764 4,361 4,029 Net income $ 2,973 3,015 2,228 2,540 2,233 Basic earnings per share $ 0.44 0.45 0.40 0.47 0.41 Diluted earnings per share $ 0.43 0.44 0.39 0.46 0.40 Average shares outstanding 6,818,067 6,763,997 5,516,702 5,421,120 5,412,521 Average diluted shares outstanding 6,965,835 6,914,441 5,662,342 5,545,892 5,535,167 PERFORMANCE RATIOS Return on average assets 0.96% 1.02% 0.82% 1.02% 0.97% Return on average common equity 9.10% 9.38% 10.22% 12.36% 11.23% Net interest margin (fully tax-equivalent) 3.26% 3.26% 3.19% 3.24% 3.17% Efficiency ratio 48.96% 48.98% 52.26% 49.86% 51.85% Full-time equivalent employees 167 161 156 147 128 CAPITAL Average equity to average assets 10.50% 10.91% 7.99% 8.22% 8.59% Tier 1 leverage capital ratio 11.87% 12.49% 12.75% 9.86% 10.30% Tier 1 risk-based capital ratio 11.99% 12.60% 12.69% 10.13% 10.55% Total risk-based capital ratio 13.23% 13.84% 13.93% 11.38% 11.79% Book value per share $ 19.49 19.13 18.44 15.39 15.05 Cash dividend per share $ 0.09 0.08 0.08 0.08 0.08 ASSET QUALITY Gross loan charge-offs $ 299 72 95 297 132 Net loan charge-offs $ 286 53 56 93 109 Net loan charge-offs to average loans 0.11% 0.02% 0.02% 0.04% 0.06% Allowance for loan and lease losses $ 15,337 14,379 13,482 12,158 11,406 Allowance for loan losses to total loans 1.38% 1.39% 1.39% 1.40% 1.40% Past due and nonaccrual loans and leases $ 3,122 1,785 287 495 533 Past due and nonaccrual loans to total loans 0.28% 0.17% 0.03% 0.06% 0.07% Other real estate and repossessed assets $ 0 0 0 0 134 END OF PERIOD BALANCES Loans and leases $1,111,152 1,035,963 972,191 866,009 812,487 Total earning assets (before allowance) $1,234,158 1,157,728 1,092,171 972,963 914,190 Total assets $1,293,935 1,203,337 1,154,388 1,035,279 968,292 Deposits $ 995,334 902,892 889,581 843,587 801,097 Shareholder's equity $ 133,075 130,201 122,157 83,457 81,530 AVERAGE BALANCES Loans and leases $1,067,710 999,618 918,966 842,370 786,406 Total earning assets (before allowance) $1,196,936 1,115,960 1,029,203 953,851 892,660 Total assets $1,250,733 1,169,521 1,083,389 1,002,714 938,632 Deposits $ 946,562 886,299 867,291 809,986 774,836 Shareholder's equity $ 131,361 127,511 86,510 82,410 80,606
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