-----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, EoUJwBStsHw82YDmnmnXvhAM35cjVJEY7/ECVdDfvrGMTP0hbs/shcZBkX2a+WJB 60sIqdvXozkZfxX5nF2D3g== 0000950124-06-001880.txt : 20060412 0000950124-06-001880.hdr.sgml : 20060412 20060412083107 ACCESSION NUMBER: 0000950124-06-001880 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 20060412 ITEM INFORMATION: Results of Operations and Financial Condition ITEM INFORMATION: Financial Statements and Exhibits FILED AS OF DATE: 20060412 DATE AS OF CHANGE: 20060412 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: 06754778 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 k04249e8vk.txt CURRENT REPORT, DATED APRI1 12, 2006 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 12, 2006 -------------------- 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) 310 LEONARD STREET NW, GRAND RAPIDS, MICHIGAN 49504 (Address of principal executive offices) (Zip Code) Registrant's telephone number, including area code 616-406-3000 Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below): [ ] Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) [ ] Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) [ ] Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) [ ] Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) ITEM 2.02 RESULTS OF OPERATIONS AND FINANCIAL CONDITION. Earnings Release. On April 12, 2006, Mercantile Bank Corporation issued a press release announcing earnings and other financial results for the quarter ended March 31, 2006. A copy of the press release is furnished as Exhibit 99.1 to this report and incorporated here by reference. In accordance with General Instruction B.2 of Form 8-K, the information in this Current Report on Form 8-K, including Exhibit 99.1, shall not be deemed to be "filed" for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the "Exchange Act"), or otherwise subject to the liability of that section, and shall not be incorporated by reference into any registration statement or other document filed under the Securities Act of 1933, as amended, or the Exchange Act, except as shall be expressly set forth by specific reference in such filing. ITEM 9.01 FINANCIAL STATEMENTS AND EXHIBITS. (d) Exhibits.
Exhibit Number Description - -------------- ----------- 99.1 Press release of Mercantile Bank Corporation reporting financial results and earnings for the quarter ended March 31, 2006.
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/ Gerald R. Johnson, Jr. ------------------------------ Gerald R. Johnson, Jr. Chairman of the Board and Chief Executive Officer Date: April 12, 2006 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, 2006.
4 EX-99.1 2 k04249exv99w1.txt PRESS RELEASE EXHIBIT 99.1 [MERCANTILE LOGO] FOR FURTHER INFORMATION: AT MERCANTILE BANK CORPORATION: Gerald R. Johnson, Jr. Charles Christmas Chairman & CEO Chief Financial Officer 616-726-1200 616-726-1202 gjohnson@mercbank.com cchristmas@mercbank.com MERCANTILE BANK CORPORATION ANNOUNCES FIRST QUARTER NET INCOME OF $4.9 MILLION, UP 13.0% Grand Rapids, MI - April 12, 2006 -- Mercantile Bank Corporation (Nasdaq: MBWM) reported net income for the first quarter of 2006 of $4.9 million, an increase of 13.0 percent from the $4.4 million reported for the first quarter of 2005. Diluted earnings per share were $0.64 compared with $0.57 reported for the year-ago quarter, an increase of 12.3 percent. Gerald R. Johnson, Jr., Mercantile's Chairman and CEO, stated, "We are pleased to report strong operating results amidst our ongoing expansion eastward into Lansing and Ann Arbor. While these initiatives have increased expenses near-term, we believe the growth opportunities to be generated will repay our investment many times over. Loan growth remains strong, our margin is stable, and we are already returning to efficiency levels more historically in line with previous performance." Total revenue, comprised of net interest income and non-interest income, was $16.3 million for the first quarter of 2006, an increase of 17.9 percent over the $13.9 million reported for the prior-year first quarter. Net interest income increased 19.3 percent over the 2005 period to $15.1 million, reflecting a combination of 17.6 percent growth in average earning assets and a five basis point improvement in the net interest margin to 3.51 percent. Mr. Johnson noted that the Company's net interest margin over the last twelve months has remained relatively stable, within a narrow band, despite deposit rate pressures and competition for quality loans. Non-interest income for the first quarter of 2006 was $1.2 million, a 2.7 percent increase over the first quarter of 2005. Non-interest expense for the first quarter of 2006 was $8.0 million, an increase of $1.2 million, or 16.9 percent, over the prior year period. The increase supported extensive infrastructure expansion, in particular for the investment in two new full-service banking offices in Lansing and Ann Arbor, as well as the recently-opened headquarters building in Grand Rapids. Salaries and benefits, up $0.6 million, or 14.6 percent, accounted for about half of the dollar increase; Mercantile added 63 full-time equivalent employees (an increase of 29.7 percent, to 275) over the past twelve months. The remainder of the increase consisted predominantly of occupancy, equipment and furniture expense, which together rose 67.7 percent, also in support of infrastructure expansion. The efficiency ratio was 48.99 percent for the first quarter of 2006, a 322 basis point improvement from the 52.21 percent reported in the fourth quarter of 2005, and a 42 basis point improvement from the year-ago quarter. Mr. Johnson continued, "We have completed the major expansionary phase of our operations for the near future, marked by an improvement in our operating efficiency reflective of our highly disciplined cost controls. We believe it is significant to note that, in the first quarter of 2005, we had incurred no expenses relative to our moves to our new corporate headquarters and into the Lansing and Ann Arbor markets." According to Mr. Johnson, "Overall asset quality remains strong. Compared with our peer group, our portfolio continues to perform well above average." However, during the quarter, Mercantile identified eleven related loans totaling approximately $2.6 million that had been requested to finance the purchase of vacant residential real estate, where the purpose, collateral and structure of the loans does not appear to coincide with what was portrayed to the Bank in the loan application process. These loans have been placed on non-accrual. The Bank is currently pursuing various legal remedies against the multiple parties to these transactions and expects the real estate collateral it received in connection with the loans to eventually be liquidated as part of the collection process. While it is still early in the litigation and evaluation process, management has allocated a portion of the allowance for loan losses to these specific credits based on their current assessment of the value of the collateral and the other collection avenues being pursued. Net charge-offs for the first quarter of 2006 were $0.8 million, or an annualized 0.19 percent of average loans, compared with $0.4 million, or an annualized 0.13 percent, for the first quarter of 2005. Non-performing assets were $8.8 million, or 0.46 percent of total assets at March 31, 2006, compared with $4.0 million, or 0.22 percent of assets, at December 31, 2005, and $5.2 million, or 0.31 percent, at March 31, 2005. Loan and lease loss reserves were $21.0 million, or 1.30 percent of total loans and leases at March 31, 2006. Total assets were $1.90 billion at March 31, 2006, an increase of $232.1 million, or 13.9 percent, from March 31, 2005. Earning asset growth was $225.2 million, or 14.3 percent, during this twelve-month period, with loans increasing $237.8 million, or 17.3 percent. The increase in earning assets was primarily funded by a $192.2 million, or 14.9 percent, increase in deposits. Shareholders' equity at March 31, 2006 was $158.9 million, a twelve-month increase of $14.4 million, or 9.9 percent. Total shares outstanding at quarter-end were 7,596,980. Mercantile's total risk-based capital ratio was 11.91 percent at quarter-end. Mr. Johnson concluded, "We look forward to leveraging the new opportunities that arise from our growing reputation in the Ann Arbor and Lansing markets. We are committed to establishing Mercantile as the premier provider of financial services in all of our markets." ABOUT MERCANTILE BANK CORPORATION Mercantile Bank Corporation is the bank holding company for Mercantile Bank of Michigan. Headquartered in Grand Rapids, the Bank provides a wide variety of commercial banking services through its five full-service banking offices in greater Grand Rapids, and its full-service banking offices in Holland, Lansing, and Ann Arbor, Michigan. 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, disclosed 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 2006 Results MERCANTILE BANK CORPORATION CONSOLIDATED BALANCE SHEETS
MARCH 31, DECEMBER 31, MARCH 31, 2006 2005 2005 ------------------ ----------------- --------------- (Unaudited) (Audited) (Unaudited) ASSETS Cash and due from banks $ 38,251,000 $ 36,208,000 $ 39,255,000 Short-term investments 389,000 545,000 942,000 Federal funds sold 0 0 33,400,000 ------------------ ----------------- --------------- Total cash and cash equivalents 38,640,000 36,753,000 73,597,000 Securities available for sale 118,103,000 112,961,000 102,733,000 Securities held to maturity 62,179,000 60,766,000 57,023,000 Federal Home Loan Bank stock 7,887,000 7,887,000 7,022,000 Total loans and leases 1,612,351,000 1,561,812,000 1,374,577,000 Allowance for loan and lease losses (20,995,000) (20,527,000) (18,097,000) ------------------ ----------------- --------------- Total loans and leases, net 1,591,356,000 1,541,285,000 1,356,480,000 Premises and equipment, net 29,885,000 30,206,000 26,576,000 Bank owned life insurance policies 28,360,000 28,071,000 23,986,000 Accrued interest receivable 9,374,000 8,274,000 6,883,000 Other assets 11,194,000 12,007,000 10,576,000 ------------------ ----------------- --------------- Total assets $ 1,896,978,000 $ 1,838,210,000 $ 1,664,876,000 ================== ================= =============== LIABILITIES AND STOCKHOLDERS' EQUITY Deposits: Noninterest-bearing $ 114,880,000 $ 120,828,000 $ 135,544,000 Interest-bearing 1,367,339,000 1,298,524,000 1,154,473,000 ------------------ ----------------- --------------- Total deposits 1,482,219,000 1,419,352,000 1,290,017,000 Securities sold under agreements to repurchase 67,956,000 72,201,000 60,208,000 Federal funds purchased 6,600,000 9,600,000 0 Federal Home Loan Bank advances 130,000,000 130,000,000 125,000,000 Subordinated debentures 32,990,000 32,990,000 32,990,000 Other borrowed money 2,791,000 2,347,000 1,916,000 Accrued expenses and other liabilities 15,559,000 16,595,000 10,244,000 ------------------ ----------------- --------------- Total liabilities 1,738,115,000 1,683,085,000 1,520,375,000 SHAREHOLDERS' EQUITY Common stock 148,583,000 148,533,000 131,113,000 Retained earnings 12,018,000 8,000,000 14,116,000 Accumulated other comprehensive income (loss) (1,738,000) (1,408,000) (728,000) ------------------ ----------------- --------------- Total shareholders' equity 158,863,000 155,125,000 144,501,000 Total liabilities and shareholders' equity $ 1,896,978,000 $ 1,838,210,000 $ 1,664,876,000 ================== ================= ===============
Mercantile Bank Corporation First Quarter 2006 Results MERCANTILE BANK CORPORATION CONSOLIDATED REPORTS OF INCOME
THREE MONTHS ENDED THREE MONTHS ENDED March 31, 2006 March 31, 2005 ------------------ ------------------ (Unaudited) (Unaudited) INTEREST INCOME Loans and leases, including fees $ 28,727,000 $ 19,772,000 Investment securities 2,237,000 1,887,000 Federal funds sold 132,000 44,000 Short-term investments 3,000 2,000 ------------------ ------------------ Total interest income 31,099,000 21,705,000 INTEREST EXPENSE Deposits 13,485,000 7,440,000 Short-term borrowings 601,000 338,000 Federal Home Loan Bank advances 1,315,000 857,000 Long-term borrowings 599,000 415,000 ------------------ ------------------ Total interest expense 16,000,000 9,050,000 ------------------ ------------------ Net interest income 15,099,000 12,655,000 Provision for loan and lease losses 1,225,000 725,000 ------------------ ------------------ Net interest income after provision for loan and lease losses 13,874,000 11,930,000 NON INTEREST INCOME Service charges on accounts 316,000 338,000 Net gain on sales of securities 0 0 Net gain on sales of commercial loans 29,000 0 Other income 898,000 872,000 ------------------ ------------------ Total non interest income 1,243,000 1,210,000 NON INTEREST EXPENSE Salaries and benefits 4,765,000 4,159,000 Occupancy 830,000 518,000 Furniture and equipment 522,000 288,000 Other expense 1,889,000 1,885,000 ------------------ ------------------ Total non interest expense 8,006,000 6,850,000 ------------------ ------------------ Income before federal income tax 7,111,000 6,290,000 Federal income tax expense 2,182,000 1,928,000 ------------------ ------------------ Net income $ 4,929,000 $ 4,362,000 ================== ================== Basic earnings per share $ 0.65 $ 0.58 Diluted earnings per share $ 0.64 $ 0.57 Average shares outstanding 7,594,458 7,566,638 Average diluted shares outstanding 7,715,316 7,712,820
Mercantile Bank Corporation First Quarter 2006 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) 2006 2005 2005 2005 2005 --------------- --------- --------- --------- --------- EARNINGS Net interest income $ 15,099 14,957 14,072 13,608 12,655 Provision for loan and lease losses $ 1,225 1,270 895 900 725 NonInterest income $ 1,243 1,903 1,330 1,218 1,210 NonInterest expense $ 8,006 8,802 8,320 7,145 6,850 Net income $ 4,929 4,549 4,300 4,690 4,362 Basic earnings per share $ 0.65 0.60 0.57 0.62 0.58 Diluted earnings per share $ 0.64 0.59 0.56 0.61 0.57 Average shares outstanding 7,594,458 7,589,174 7,585,879 7,579,437 7,566,638 Average diluted shares outstanding 7,715,316 7,718,076 7,732,872 7,720,821 7,712,820 PERFORMANCE RATIOS Return on average assets 1.07% 1.00% 0.98% 1.13% 1.11% Return on average common equity 12.74% 11.76% 11.33% 12.80% 12.36% Net interest margin (fully tax-equivalent) 3.51% 3.54% 3.46% 3.52% 3.46% Efficiency ratio 48.99% 52.21% 54.02% 48.19% 49.41% Full-time equivalent employees 275 273 263 237 212 CAPITAL Period-ending equity to assets 8.37% 8.44% 8.48% 8.73% 8.68% Tier 1 leverage capital ratio 10.29% 10.45% 10.62% 10.86% 11.13% Tier 1 risk-based capital ratio 10.74% 10.82% 11.07% 11.40% 11.53% Total risk-based capital ratio 11.91% 12.00% 12.24% 12.58% 12.71% Book value per share $ 20.91 20.44 20.08 19.63 19.04 Cash dividend per share $ 0.13 0.11 0.11 0.11 0.10 ASSET QUALITY Gross loan charge-offs $ 780 350 338 211 493 Net loan charge-offs $ 756 315 181 140 447 Net loan charge-offs to average loans 0.19% 0.08% 0.05% 0.04% 0.13% Allowance for loan and lease losses $ 20,995 20,527 19,571 18,856 18,097 Allowance for loan losses to total loans 1.30% 1.31% 1.31% 1.32% 1.32% Nonperforming loans $ 8,791 3,995 1,926 2,535 4,016 Other real estate and repossessed assets $ 0 0 195 1,177 1,177 Nonperforming assets to total assets 0.46% 0.22% 0.12% 0.22% 0.31% END OF PERIOD BALANCES Loans and leases $ 1,612,351 1,561,812 1,488,959 1,424,463 1,374,577 Total earning assets (before allowance) $ 1,800,909 1,743,971 1,701,275 1,620,632 1,575,697 Total assets $ 1,896,978 1,838,210 1,796,770 1,709,153 1,664,876 Deposits $ 1,482,219 1,419,352 1,397,280 1,321,844 1,290,017 Shareholder's equity $ 158,863 155,125 152,320 149,200 144,501 AVERAGE BALANCES Loans and leases $ 1,581,617 1,519,616 1,460,792 1,402,469 1,345,336 Total earning assets (before allowance) $ 1,778,694 1,709,612 1,647,294 1,582,453 1,511,891 Total assets $ 1,871,945 1,804,067 1,740,203 1,669,202 1,591,764 Deposits $ 1,459,266 1,394,023 1,339,486 1,281,652 1,214,890 Shareholder's equity $ 156,901 153,522 150,540 146,997 143,169
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