-----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, B3nWHK6dPJ7vNtOQObPomM0uTiIGaFzXrINThnEGNitTTYf7yUJX+h1GTfdEVIhE OEJXDcU9xjjzojy43pvcZg== 0000950124-06-005878.txt : 20061011 0000950124-06-005878.hdr.sgml : 20061011 20061011085617 ACCESSION NUMBER: 0000950124-06-005878 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 20061011 ITEM INFORMATION: Results of Operations and Financial Condition ITEM INFORMATION: Financial Statements and Exhibits FILED AS OF DATE: 20061011 DATE AS OF CHANGE: 20061011 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: 061139162 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 k09034e8vk.txt CURRENT REPORT, DATED OCTOBER 11, 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): OCTOBER 11, 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 October 11, 2006, Mercantile Bank Corporation issued a press release announcing earnings and other financial results for the quarter ended September 30, 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 September 30, 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/ Charles E. Christmas ------------------------------------ Charles E. Christmas Senior Vice President, Chief Financial Officer and Treasurer Date: October 11, 2006 3 EXHIBIT INDEX
Exhibit Number Description - -------------- ----------- 99.1 Press release of Mercantile Bank Corporation reporting financial results and earnings for the quarter ended September 30, 2006.
4 EX-99.1 2 k09034exv99w1.txt PRESS RELEASE Exhibit 99.1 (MERCANTILE BANK CORPORATION(R) 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 CORP. REPORTS THIRD QUARTER 2006 EPS OF $0.64, UP 20.8% ASSETS SURPASS $2 BILLION Grand Rapids, MI - October 11, 2006 -- Mercantile Bank Corporation (Nasdaq: MBWM) reported net income for the third quarter of 2006 of $5.2 million, an increase of 21.0 percent from the $4.3 million reported for the third quarter of 2005. Diluted earnings per share were $0.64 compared with $0.53 reported for the year-ago quarter, an increase of 20.8 percent. Results reflect solid growth in earning assets and disciplined control of expenses, partially offset by the impact of rising funding costs and higher provision expense. For the first nine months of 2006, Mercantile reported net income of $15.2 million, an increase of 14.2 percent from the $13.4 million reported in the prior-year period. Diluted earnings per share were $1.88, an increase of 14.6 percent from the first nine months of 2005. Gerald R. Johnson, Jr., Chairman and CEO, commented, "Our Company continues to expand at a dynamic pace, despite the extremely competitive environment in which we operate. This quarter, we surpassed the $2.0 billion milestone in total assets. All of our growth since we opened for business late in 1997 has been organic. We reached the $1.0 billion asset mark in June 2003, and our annual compound asset growth rate since that time has been approximately 26 percent. More recently, our growth has moderated somewhat as our competition has demonstrated an increasing willingness to compromise on loan structure and pricing to retain market share, compromises which we have found unacceptable to the extent that we have declined a number of credit requests which we would have otherwise approved under normal circumstances. Total revenue, comprised of net interest income and non-interest income, was $16.9 million for the third quarter of 2006, an increase of 9.8 percent over the $15.4 million reported for the third quarter of 2005. Net interest income increased 10.5 percent over the prior-year third quarter to $15.6 million, reflecting average earning asset growth of 14.2 percent, offset by a 12 basis point decline in net interest margin to 3.34 percent from year-ago levels. Year-to-date, net interest margin is 3.44 percent, a four basis point decline compared with 3.48 percent for the first nine months of 2005. Mr. Johnson continued, "Although the majority of our loans are tied to prime, this rate was unchanged during the third quarter, while our deposits continued to price upward." Non-interest income for the third quarter of 2006 was $1.4 million, a 2.4 percent increase over the third quarter of 2005. Overhead expenses remain well controlled, with operating expenses (annualized) declining quarterly as a percent of average assets throughout 2006, from 1.73 percent in the first quarter to 1.61 percent for the most recent quarter. Mercantile's expansion activities were completed by year-end 2005, and for the past three quarters, non-interest expense has remained extremely stable at $8.0 million per quarter, while total assets increased since year-end at an annualized rate of 13.7 percent. The efficiency ratio was 47.5 percent for the third quarter of 2006 compared with 54.0 percent for the year-ago quarter, and 52.2 percent for fourth quarter 2005. For the first nine months of 2006, the ratio was 48.0 percent compared with 50.6 percent for the prior-year period. Asset quality has been relatively stable throughout 2006, although quality remains below the exceptional levels reported in prior years. Net loan charge-offs for the third quarter of 2006 were $920,000, equivalent to 0.22 percent of average loans on an annualized basis; this compares with $988,000 or 0.24 percent of average loans in the second quarter of 2006, and $756,000 or 0.19 percent for the first quarter of this year. Non-performing assets were $9.4 million, or 0.47 percent of total assets at September 30, 2006, compared with $8.7 million, or 0.44 percent of assets at June 30, 2006, and $8.8 million or 0.46 percent of assets at March 31, 2006. Loan and lease loss reserves were $21.9 million, or 1.28 percent of total loans and leases at September 30, 2006. Total assets were $2.03 billion at September 30, 2006, an increase of $230.1 million, or 12.8 percent, from September 30, 2005. Earning asset growth was $220.8 million, or 13.0 percent, during this twelve-month period, with loans up $221.3 million, or 14.9 percent. The composition of the loan portfolio remains basically unchanged from the previous quarter, and from the 2005 third quarter. Growth in earning assets was primarily funded by a $217.4 million, or 15.6 percent, increase in deposits. Local funds currently comprise 35.7 percent of total funds at September 30, 2006 compared to 31.3 percent at September 30, 2005. Shareholders' equity at September 30, 2006 was $167.5 million, a twelve-month increase of $15.2 million, or 10.0 percent. Total shares outstanding at quarter-end were 8,018,680. Mercantile remains well-capitalized, with a total risk-based capital ratio of 11.6 percent at quarter-end. Mr. Johnson concluded, "We continue to be selective about growth opportunities in this current environment. Our reputation for lending expertise and service excellence has placed us in a preferred position with small- to medium-sized businesses in the communities we serve. We are pleased with our current rate of growth as we address the uncertainties in today's business and banking climate." 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 Global 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 Third Quarter 2006 Results MERCANTILE BANK CORPORATION CONSOLIDATED REPORTS OF INCOME
THREE MONTHS ENDED THREE MONTHS ENDED NINE MONTHS ENDED NINE MONTHS ENDED September 30, 2006 September 30, 2005 September 30, 2006 September 30, 2005 ------------------ ------------------ ------------------ ------------------ (Unaudited) (Unaudited) (Unaudited) (Unaudited) INTEREST INCOME Loans and leases, including fees $33,261,000 $24,570,000 $ 93,292,000 $66,592,000 Investment securities 2,335,000 2,113,000 6,871,000 6,036,000 Federal funds sold 76,000 76,000 347,000 176,000 Short-term investments 3,000 5,000 10,000 11,000 ----------- ----------- ------------ ----------- Total interest income 35,675,000 26,764,000 100,520,000 72,815,000 INTEREST EXPENSE Deposits 17,268,000 10,554,000 46,111,000 26,886,000 Short-term borrowings 707,000 475,000 2,028,000 1,188,000 Federal Home Loan Bank advances 1,452,000 1,148,000 4,136,000 3,011,000 Long-term borrowings 701,000 515,000 1,953,000 1,395,000 ----------- ----------- ------------ ----------- Total interest expense 20,128,000 12,692,000 54,228,000 32,480,000 ----------- ----------- ------------ ----------- Net interest income 15,547,000 14,072,000 46,292,000 40,335,000 Provision for loan and lease losses 1,350,000 895,000 4,075,000 2,520,000 ----------- ----------- ------------ ----------- Net interest income after provision for loan and lease losses 14,197,000 13,177,000 42,217,000 37,815,000 NON INTEREST INCOME Service charges on accounts 361,000 369,000 1,006,000 1,048,000 Net gain on sales of commercial loans 0 56,000 29,000 84,000 Other income 1,001,000 905,000 2,845,000 2,626,000 ----------- ----------- ------------ ----------- Total non interest income 1,362,000 1,330,000 3,880,000 3,758,000 NON INTEREST EXPENSE Salaries and benefits 4,731,000 4,983,000 14,179,000 13,547,000 Occupancy 802,000 805,000 2,404,000 1,889,000 Furniture and equipment 513,000 459,000 1,550,000 1,109,000 Other expense 1,982,000 2,073,000 5,932,000 5,770,000 ----------- ----------- ------------ ----------- Total non interest expense 8,028,000 8,320,000 24,065,000 22,315,000 ----------- ----------- ------------ ----------- Income before federal income tax expense 7,531,000 6,187,000 22,032,000 19,258,000 Federal income tax expense 2,329,000 1,887,000 6,790,000 5,906,000 ----------- ----------- ------------ ----------- Net income $ 5,202,000 $ 4,300,000 $ 15,242,000 $13,352,000 =========== =========== ============ =========== Basic earnings per share $ 0.65 $ 0.54 $ 1.91 $ 1.68 Diluted earnings per share $ 0.64 $ 0.53 $ 1.88 $ 1.64 Average shares outstanding * 8,016,016 7,965,172 7,997,187 7,956,205 Average diluted shares outstanding * 8,118,206 8,115,575 8,117,709 8,134,657
* - Adjusted for 5% stock dividend paid on May 16, 2006 Mercantile Bank Corporation Third Quarter 2006 Results MERCANTILE BANK CORPORATION CONSOLIDATED BALANCE SHEETS
SEPTEMBER 30, DECEMBER 31, SEPTEMBER 30, 2006 2005 2005 -------------- -------------- -------------- (Unaudited) (Audited) (Unaudited) ASSETS Cash and due from banks $ 39,100,000 $ 36,208,000 $ 38,894,000 Short-term investments 176,000 545,000 392,000 Federal funds sold 16,000,000 0 33,800,000 -------------- -------------- -------------- Total cash and cash equivalents 55,276,000 36,753,000 73,086,000 Securities available for sale 125,746,000 112,961,000 109,966,000 Securities held to maturity 62,097,000 60,766,000 60,271,000 Federal Home Loan Bank stock 7,764,000 7,887,000 7,887,000 Total loans and leases 1,710,268,000 1,561,812,000 1,488,959,000 Allowance for loan and lease losses (21,938,000) (20,527,000) (19,571,000) -------------- -------------- -------------- Total Loans and leases, net 1,688,330,000 1,541,285,000 1,469,388,000 Premises and equipment, net 32,309,000 30,206,000 30,791,000 Bank owned life insurance policies 30,150,000 28,071,000 26,075,000 Accrued interest receivable 10,438,000 8,274,000 8,039,000 Other assets 14,724,000 12,007,000 11,267,000 -------------- -------------- -------------- Total assets $2,026,834,000 $1,838,210,000 $1,796,770,000 ============== ============== ============== LIABILITIES AND STOCKHOLDERS' EQUITY Deposits: Noninterest-bearing $ 115,269,000 $ 120,828,000 $ 116,107,000 Interest-bearing 1,499,434,000 1,298,524,000 1,281,173,000 -------------- -------------- -------------- Total deposits 1,614,703,000 1,419,352,000 1,397,280,000 Securities sold under agreement to repurchase 74,111,000 72,201,000 62,994,000 Federal funds purchased 0 9,600,000 0 Federal Home Loan Bank advances 115,000,000 130,000,000 135,000,000 Subordinated debentures 32,990,000 32,990,000 32,990,000 Other borrowed money 3,147,000 2,347,000 2,211,000 Accrued expenses and other liabilities 19,335,000 16,595,000 13,975,000 -------------- -------------- -------------- Total liabilities 1,859,286,000 1,683,085,000 1,644,450,000 SHAREHOLDERS' EQUITY Common stock 161,045,000 148,533,000 148,472,000 Retained earnings 8,230,000 8,000,000 4,287,000 Accumulated other comprehensive income (loss) (1,727,000) (1,408,000) (439,000) -------------- -------------- -------------- Total shareholders' equity 167,548,000 155,125,000 152,320,000 Total liabilities and shareholders' equity $2,026,834,000 $1,838,210,000 $1,796,770,000 ============== ============== ==============
Mercantile Bank Corporation Third Quarter 2006 Results MERCANTILE BANK CORPORATION CONSOLIDATED FINANCIAL HIGHLIGHTS (Unaudited)
QUARTERLY YEAR-TO-DATE ---------------------------------------------------------- --------------------- (dollars in thousands except per share 2006 2006 2006 2005 2005 data) 3RD QTR 2ND QTR 1ST QTR 4TH QTR 3RD QTR 2006 2005 ---------- --------- --------- --------- --------- --------- --------- EARNINGS Net interest income $ 15,547 15,646 15,099 14,957 14,072 46,292 40,335 Provision for loan and lease losses $ 1,350 1,500 1,225 1,270 895 4,075 2,520 NonInterest income $ 1,362 1,275 1,243 1,903 1,330 3,880 3,758 NonInterest expense $ 8,028 8,031 8,006 8,802 8,320 24,065 22,315 Net income $ 5,202 5,111 4,929 4,549 4,300 15,242 13,352 Basic earnings per share $ 0.65 0.64 0.62 0.57 0.54 1.91 1.68 Diluted earnings per share $ 0.64 0.63 0.61 0.56 0.53 1.88 1.64 Average shares outstanding * 8,016,016 8,000,998 7,974,180 7,968,632 7,965,172 7,997,187 7,956,205 Average diluted shares outstanding * 8,118,206 8,119,820 8,102,052 8,102,195 8,115,575 8,117,709 8,134,657 PERFORMANCE RATIOS Return on average assets 1.04% 1.06% 1.07% 1.00% 0.98% 1.05% 1.07% Return on average common equity 12.54% 12.81% 12.74% 11.76% 11.33% 12.69% 12.15% Net interest margin (fully tax-equivalent) 3.34% 3.47% 3.51% 3.54% 3.46% 3.44% 3.48% Efficiency ratio 47.48% 47.46% 48.99% 52.21% 54.02% 47.97% 50.61% Full-time equivalent employees 284 277 275 273 263 284 263 CAPITAL Period-ending equity to assets 8.27% 8.21% 8.37% 8.44% 8.48% 8.27% 8.48% Tier 1 leverage capital ratio 10.14% 10.15% 10.29% 10.45% 10.62% 10.14% 10.62% Tier 1 risk-based capital ratio 10.47% 10.52% 10.74% 10.82% 11.07% 10.47% 11.07% Total risk-based capital ratio 11.61% 11.66% 11.91% 12.00% 12.24% 11.61% 12.24% Book value per share $ 20.89 20.17 19.86 19.42 19.08 20.89 19.08 Cash dividend per share $ 0.13 0.13 0.12 0.11 0.11 0.38 0.32 ASSET QUALITY Gross loan charge-offs $ 1,250 1,083 780 350 338 3,113 1,042 Net loan charge-offs $ 920 988 756 315 181 2,664 768 Net loan charge-offs to average loans 0.22% 0.24% 0.19% 0.08% 0.05% 0.22% 0.07% Allowance for loan and lease losses $ 21,938 21,507 20,995 20,527 19,571 21,938 19,571 Allowance for losses to total loans 1.28% 1.29% 1.30% 1.31% 1.31% 1.28% 1.31% Nonperforming loans $ 9,017 8,530 8,791 3,995 1,926 9,017 1,926 Other real estate and repossessed assets $ 421 150 0 0 195 421 195 Nonperforming assets to total assets 0.47% 0.44% 0.46% 0.22% 0.12% 0.47% 0.12% END OF PERIOD BALANCES Loans and leases $1,710,268 1,670,471 1,612,351 1,561,812 1,488,959 1,710,268 1,488,959 Total earning assets (before allowance) $1,922,051 1,859,411 1,800,909 1,743,971 1,701,275 1,922,051 1,701,275 Total assets $2,026,834 1,969,429 1,896,974 1,838,210 1,796,770 2,026,834 1,796,770 Deposits $1,614,703 1,547,912 1,482,219 1,419,352 1,397,280 1,614,703 1,397,280 Shareholders' equity $ 167,548 161,660 158,910 155,125 152,320 167,548 152,320 AVERAGE BALANCES Loans and leases $1,684,700 1,643,022 1,581,617 1,519,616 1,460,792 1,636,824 1,403,289 Total earning assets (before allowance) $1,881,873 1,841,666 1,778,694 1,709,612 1,647,294 1,834,455 1,581,042 Total assets $1,984,199 1,939,413 1,871,945 1,804,067 1,740,203 1,932,264 1,667,600 Deposits $1,569,614 1,521,037 1,459,266 1,394,023 1,339,486 1,517,043 1,279,132 Shareholders' equity $ 164,560 160,039 156,901 153,522 150,540 160,533 146,926
* - Adjusted for 5% stock dividend paid on May 16, 2006 -----END PRIVACY-ENHANCED MESSAGE-----