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                                                     Pursuant to Rule 424(b)(4)
                                                     Registration No. 333-33081
 
PROSPECTUS
 
                                1,300,000 SHARES
 
                      [MERCANTILE BANK CORPORATION LOGO]
 
                                  COMMON STOCK
                               ------------------
 
     Mercantile Bank Corporation, a Michigan corporation (the "Company"), is
offering for sale 1,300,000 shares of its Common Stock (the "Common Stock"). The
Company is a proposed bank holding company organized to own all of the common
stock of Mercantile Bank of West Michigan, a Michigan banking corporation (in
organization), to be located in Grand Rapids, Michigan (the "Bank"). Neither the
Company nor the Bank has ever conducted any business operations other than
matters related to their initial organization and the raising of capital. See
"Business." There has been no public trading market for the Common Stock. Roney
& Co., L.L.C. (the "Underwriter") has advised the Company that it anticipates
making a market in the Common Stock following completion of the offering,
although there can be no assurance that an active trading market will develop.
See "Underwriting" for a discussion of the factors considered in determining the
initial public offering price. The Company expects that the quotations for the
Common Stock will be reported on the OTC Bulletin Board. The organizers of the
Bank are expected to purchase at least 328,500 of the shares of Common Stock at
the public offering price.
                               ------------------
  THE COMMON STOCK OFFERED BY THIS PROSPECTUS INVOLVES A SIGNIFICANT AMOUNT OF
  RISK. INVESTORS SHOULD NOT INVEST ANY FUNDS IN THE OFFERING UNLESS THEY CAN
AFFORD TO LOSE THEIR ENTIRE INVESTMENT. SEE "RISK FACTORS" COMMENCING ON PAGE 5
  FOR CERTAIN CONSIDERATIONS RELEVANT TO AN INVESTMENT IN THE COMPANY'S COMMON
                                     STOCK.
 
 THESE SECURITIES ARE NOT SAVINGS ACCOUNTS OR SAVINGS DEPOSITS AND THEY ARE NOT
  INSURED BY THE FEDERAL DEPOSIT INSURANCE CORPORATION OR ANY OTHER GOVERNMENT
                                    AGENCY.
                               ------------------
  THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
 EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE SECURITIES
   AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE
ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A
                               CRIMINAL OFFENSE.
 


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                                                    PRICE TO               UNDERWRITING             PROCEEDS TO
                                                     PUBLIC              DISCOUNTS(1)(2)           COMPANY(2)(3)
- ----------------------------------------------------------------------------------------------------------------------
                                                                                     
- ----------------------------------------------------------------------------------------------------------------------
Per Share.................................           $10.00                   $0.70                    $9.30
- ----------------------------------------------------------------------------------------------------------------------
Total(2)..................................        $13,000,000                $910,000               $12,090,000
======================================================================================================================

 
                               ------------------
 
(1) The Company has agreed to indemnify the Underwriter against certain
    liabilities, including liabilities under the Securities Act of 1933, as
    amended (the "Securities Act"). See "Underwriting."
(2) The Company has granted the Underwriter a 30-day option to purchase up to
    195,000 additional shares of its Common Stock solely to cover
    over-allotments, if any. If the Underwriter exercises such option in full,
    the Price to Public, Underwriting Discounts, and Proceeds to Company will be
    approximately $14,950,000, $1,046,500 and $13,903,500, respectively. See
    "Underwriting." The Underwriter has agreed to limit the Underwriting
    Discounts to 1.5% of the public offering price for up to 328,500 shares sold
    by the Underwriter to organizers of the Bank or their immediate families.
    See "Underwriting." Organizers of the Bank have provided nonbinding
    expressions of interest to purchase a total of approximately 328,500 shares.
    If 328,500 shares are so purchased, Underwriting Discounts will be reduced
    by, and proceeds to the Company will be increased by, $180,675.
(3) Before deducting estimated offering expenses payable by the Company of
$248,000.
                               ------------------
 
     The shares of Common Stock are offered by the Underwriter subject to prior
sale, when, as and if delivered to and accepted by the Underwriter, and subject
to the right of the Underwriter to withdraw, cancel or modify such offer and to
reject orders in whole or in part. It is expected that delivery of the shares of
Common Stock will be made in Detroit, Michigan on or about October 29, 1997.
                               ------------------
 
                                RONEY & CO. LOGO
                THE DATE OF THIS PROSPECTUS IS OCTOBER 23, 1997.
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                                KENT COUNTY MAP
                            ------------------------
 
                             AVAILABLE INFORMATION
 
     The Company is not currently a reporting company pursuant to the Securities
Exchange Act of 1934, as amended (the "Exchange Act"), but will be required to
file reports pursuant to the Exchange Act following the completion of the
offering. The Company, which will use a December 31 fiscal year end, intends to
furnish its shareholders with annual reports containing audited financial
information and, for the first three quarters of each fiscal year, quarterly
reports containing unaudited financial information.
 
     Requests for such documents should be directed to Robert B. Kaminski,
Secretary, 216 North Division Avenue, Grand Rapids, Michigan 49503.
                            ------------------------
 
     CERTAIN PERSONS PARTICIPATING IN THIS OFFERING MAY ENGAGE IN TRANSACTIONS
THAT STABILIZE, MAINTAIN OR OTHERWISE AFFECT THE PRICE OF THE COMMON STOCK,
INCLUDING STABILIZING BIDS. SEE "UNDERWRITING."
 
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                               PROSPECTUS SUMMARY
 
     The following summary is qualified in its entirety by the more detailed
information and financial statements appearing elsewhere in this Prospectus.
Unless the context clearly suggests otherwise, references in this Prospectus to
the Company include the Bank. Except as otherwise indicated, all information in
this Prospectus assumes no exercise of the Underwriter's over-allotment option.
 
                                  THE COMPANY
 
     The Company was incorporated on July 15, 1997 under Michigan law and will
be a bank holding company owning all of the common stock of the Bank. The Bank
is organizing as a Michigan banking corporation with depository accounts to be
insured by the Bank Insurance Fund of the Federal Deposit Insurance Corporation
(the "FDIC"). The Bank intends to provide a range of commercial and consumer
banking services primarily in Kent County, Michigan, including Grand Rapids and
its suburbs. Those services will reflect the Bank's intended strategy of serving
small to medium size businesses, and individual customers in its market area.
The Bank's retail banking strategy will initially focus on providing products
and services, including automated teller machine, computer home banking,
telephone banking and automated bill paying services to individuals in the
Bank's market area. The Company and the Bank have received all bank regulatory
approvals necessary for the commencement of their business, subject to the
satisfaction of certain conditions that are customary in connection with such
regulatory approvals. These conditions will consist of matters including, but
not limited to, the Bank receiving at least $11,000,000 of capital, the Bank
filing its Certificate of Paid in Capital and Surplus with the Commissioner of
the Financial Institutions Bureau of the State of Michigan (the "FIB"), and the
Bank notifying the FIB of its proposed opening date so the FIB can conduct its
customary preopening investigation. The $11,000,000 or more of capital will be
contributed to the Bank from the proceeds of the offering promptly following its
completion. Management anticipates commencing business in the fourth quarter of
1997.
 
REASON FOR STARTING MERCANTILE BANK OF WEST MICHIGAN
 
     The liberalization of Michigan's branch banking laws, together with the
expansion of interstate banking, has led to substantial consolidation of the
banking industry in Michigan including the Bank's market area. In many cases,
when these consolidations occurred, local boards of directors were dissolved and
local management relocated or in some cases terminated.
 
     In the opinion of the Company's management, this situation has created a
favorable opportunity for a new commercial bank with local management and local
directors. Management believes that such a bank can be successful in attracting
small to medium sized businesses and individuals as customers who wish to
conduct business with a locally owned and managed institution that demonstrates
an active interest in their business and personal financial affairs. The Bank
will seek to take advantage of this opportunity by emphasizing in its marketing
plan the Bank's local management, their strong ties and active commitment to the
community.
 
MARKET AREA
 
     The Bank's primary service area will be Kent County, which includes the
City of Grand Rapids, the second largest city in the State of Michigan. Kent
County is comprised of 36 cities, villages or townships and ranks fourth in
population out of Michigan's 83 counties. Kent County covers 856 square miles.
According to available statistical data, Kent County has approximately 14,000
business establishments, an unemployment rate of approximately 3%, and a median
household income that is estimated to have grown approximately 40% from 1990 to
1996.
 
     Kent County is also a significant banking market in the State of Michigan.
According to available industry data, as of June 30, 1996, total deposits in
Kent County, including banks, thrifts and credit unions, were approximately $7.6
billion.
 
     The Bank's main office will be located in downtown Grand Rapids, and will
serve as the Company's corporate headquarters. The Company's address is 216
North Division Avenue, Grand Rapids, Michigan 49503. The Company's telephone
number is (616) 242-9000.
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MANAGEMENT
 
     Gerald Johnson, Jr., Chairman and Chief Executive Officer of the Company
and the Bank, has over 27 years experience in the financial services industry,
including 24 years of banking experience, 17 of which have been in the Grand
Rapids market area. Mr. Johnson was Chairman, President and Chief Executive
Officer of FMB -- First Michigan Bank -- Grand Rapids ("FMB-Grand Rapids"), a
Michigan banking corporation, from 1988 to May of 1997, and served as that
bank's President and Chief Executive Officer in 1987. FMB-Grand Rapids had total
assets of approximately $540 million at the time of Mr. Johnson's decision to
leave and start a new bank. FMB-Grand Rapids is a subsidiary of First Michigan
Bank Corporation, a bank holding company headquartered in Zeeland, Michigan with
total assets of over $3.6 billion as of June 30, 1997. Robert Kaminski will
serve as Senior Vice President and Secretary of the Company and the Bank, and is
expected to be responsible for credit, compliance and operations for the Bank.
Mr. Kaminski worked for FMB-Grand Rapids from 1984 to 1996 in various credit and
loan review positions and worked for First Michigan Bank Corporation as chief
credit manager for three subsidiary banks from 1996 until his decision to leave
the bank in June of 1997.
 
     During the tenure of Mr. Johnson at FMB-Grand Rapids, total average assets
grew from approximately $83 million at the beginning of 1987 to $540 million at
the time of his departure, while operating profits increased in each of those
years. From 1991 through 1996, FMB-Grand Rapids experienced a compound annual
growth in average assets of approximately 20%. Mr. Johnson has chosen to join
the Bank at a compensation level below what he earned in his previous position.
 
     Mr. Johnson has formed a Board of Directors comprised of individuals with a
broad background in business, real estate and law. In addition to Mr. Johnson,
current directors include Peter Cordes (business), John Gill (business), David
Hecht (law), Lawrence Larsen (business), Calvin Murdock (business), Dale Visser
(real estate) and Robert Wynalda (business). Messrs. Larsen and Visser are
former directors of FMB-Grand Rapids.
 
     Mr. Johnson, the other members of the Board of Directors, and Mr. Kaminski,
represent a significant asset to the Company and the Bank. These individuals
have many years of personal experience in the Kent County and Grand Rapids
market and in some cases, have worked together successfully at other financial
institutions. The directors and officers assembled by the Company represent a
wide range of business, banking and investment knowledge and experience. The
Company believes that these individuals and their relationships in the Kent
County area should offer the Bank a substantial opportunity to attract new
relationships.
 
     The Company anticipates that the organizers of the Bank, alone or with
their spouses, will purchase 328,500 shares of Common Stock in the offering at
the initial offering price. See "Principal Shareholders."
 
                                  THE OFFERING
 
Securities offered by the
Company.......................   1,300,000 shares of Common Stock. In addition,
                                 the Company has granted the Underwriter an
                                 option to purchase up to an additional 195,000
                                 shares to cover over-allotments. See
                                 "Description of Capital Stock."
 
Common Stock to be outstanding
after the offering(1).........   1,300,000 shares (1,495,000 shares if the
                                 over-allotment option is exercised in full).
 
Use of proceeds by the
Company.......................   Capitalization of the Bank and payment of
                                 organization and preopening expenses. See "Use
                                 of Proceeds."
 
NASD Over the Counter Bulletin
  Board Symbol................   MBWM
- -------------------------
(1) Does not include 45,000 shares issuable upon exercise of outstanding stock
    options under the Company's 1997 Employee Stock Option Plan.
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                                  RISK FACTORS
 
     The Common Stock offered hereby involves a high degree of risk and should
be considered only by persons who can afford the loss of their investment. The
following constitute some of the potential risks of an investment in the Common
Stock and should be carefully considered by prospective investors prior to
purchasing shares of Common Stock. The order of the following is not intended to
be indicative of the relative importance of any described risk nor is the
following intended to be inclusive of all risks of investment in the Common
Stock.
 
LACK OF OPERATING HISTORY
 
     Neither the Company nor the Bank has any operating history. The business of
the Company and the Bank is subject to the risks inherent in the establishment
of a new business enterprise. Because the Company is only recently formed, the
Bank has not commenced operations, and the Bank and the Company are in the
process of obtaining necessary regulatory approvals, prospective investors do
not have access to all of the information that, in assessing their proposed
investment, would be available to the purchasers of securities of a financial
institution with a history of operations.
 
SIGNIFICANT LOSSES EXPECTED
 
     As a result of the substantial start-up expenditures that must be incurred
by a new bank and the time it will take to develop its deposit base and loan
portfolio, it is expected that the Bank, and thus the Company, will operate at a
substantial loss during the start-up of the Bank. Accordingly, they are not
expected to be profitable for at least the first two years. Cumulative losses
during the first two years of operation are expected to exceed $1.4 million.
There is no assurance that the Bank or the Company will ever operate profitably.
As a result, it is anticipated that the book value of the Common Stock will
decrease accordingly. If the Company does not reach profitability and recover
its accumulated operating losses and the non-recoverable portion of its
investment in fixed assets, investors in the offering would likely suffer a
significant decline in the value of their shares of Common Stock.
 
DELAY IN COMMENCING OPERATIONS
 
     Although the Company and the Bank expect to receive all regulatory
approvals and commence business in the fourth quarter of 1997, there can be no
assurance as to when, if at all, these events will occur. Any delay in
commencing operations will increase pre-opening expenses and postpone
realization by the Bank of potential revenues. Absent the receipt of revenues
and commencement of profitable operations, the Company's accumulated deficit
will continue to increase (and book value per share decrease) as operating
expenses such as salaries and other administrative expenses continue to be
incurred.
 
GOVERNMENT REGULATION AND MONETARY POLICY
 
     The Bank has received all regulatory approvals required to organize and
establish the Bank, subject to the satisfaction of certain conditions. Those
conditions include, among other things, that: (i) beginning paid-in capital of
the Bank will be not less than $11 million; (ii) the Bank will maintain a ratio
of Tier 1 leverage capital to total assets for the first three years after
commencing business of at least 8% and an adequate valuation reserve; (iii) the
Bank will have its financial statements audited by a public accountant for at
least the first five years; (iv) the Bank will file its Certificate of Paid in
Capital and Surplus with the Commissioner and notify the FIB of its opening date
so the FIB can conduct its customary preopening investigation; and (v) any
changes in executive management of the Bank will be submitted to the bank
regulatory agencies in advance for their approval. Regulatory capital
requirements imposed on the Bank may have the effect of constraining future
growth, absent the infusion of additional capital.
 
     The Company and the Bank will be subject to extensive state and federal
government supervision and regulation. Existing state and federal banking laws
will subject the Bank to substantial limitations with respect to loans, purchase
of securities, payment of dividends and many other aspects of its banking
business. There can be no assurance that future legislation or government policy
will not adversely affect the banking industry
 
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or the operations of the Bank. Federal economic and monetary policy may affect
the Bank's ability to attract deposits, make loans and achieve satisfactory
interest spreads. See "Supervision and Regulation."
 
NO ASSURANCE OF DIVIDENDS
 
     It is anticipated that no dividends will be paid on the Common Stock for
the foreseeable future. The Company will be largely dependent upon dividends
paid by the Bank for funds to pay dividends on the Common Stock, if and when
such dividends are declared. No assurance can be given that future earnings of
the Bank, and resulting dividends to the Company, will be sufficient to permit
the legal payment of dividends to Company shareholders at any time in the
future. Even if the Company may legally declare dividends, the amount and timing
of such dividends will be at the discretion of the Company's Board of Directors.
The Board may in its sole discretion decide not to declare dividends. These
shares should not be purchased by persons who need or desire dividend income
from this investment. For a more detailed discussion of other regulatory
limitations on the payment of cash dividends by the Company, see "Dividend
Policy."
 
COMPETITION
 
     The Company and the Bank will face strong competition for deposits, loans
and other financial services from numerous banks, savings banks, thrifts, credit
unions and other financial institutions as well as other entities which provide
financial services, including consumer finance companies, securities brokerage
firms, mortgage brokers, insurance companies, mutual funds, and other lending
sources and investment alternatives. Some of the financial institutions and
financial services organizations with which the Bank will compete are not
subject to the same degree of regulation as the Bank. Many of the financial
institutions aggressively compete for business in the Bank's proposed market
area. Most of these competitors have been in business for many years, have
established customer bases, are larger, have substantially higher lending limits
than the Bank, and will be able to offer certain services that the Bank does not
expect to provide in the foreseeable future, including multiple branches, trust
services, and international banking services. In addition, most of these
entities have greater capital resources than the Bank, which, among other
things, may allow them to price their services at levels more favorable to the
customer and to provide larger credit facilities than could the Bank. See
"Business -- Market Area" and "Business -- Competition." Additionally, recently
effective legislation regarding interstate branching and banking may act to
increase competition in the future from larger out-of-state banks. See
"Supervision and Regulation -- Recent Regulatory Developments."
 
DEPENDENCE ON MANAGEMENT
 
     The Company is, and for the foreseeable future will be, dependent primarily
upon the services of Gerald R. Johnson, Jr., the Chairman of the Board and Chief
Executive Officer of the Company. If the services of Mr. Johnson were to become
unavailable to the Company for any reason, or if the Company were unable to hire
highly qualified and experienced personnel either to replace Mr. Johnson, or any
other proposed employee, or to staff the anticipated growth, the operating
results of the Company would be adversely affected. The Company and the Bank do
not have employment agreements with, or key man life insurance for, Mr. Johnson
or any other of its officers. See "Business -- Employees" and "Management."
 
DISCRETION IN USE OF PROCEEDS
 
     The offering is intended to raise funds to provide for the initial
capitalization of the Bank, purchase leasehold improvements, equipment and other
assets for the Bank's operations, fund loans, provide working capital for
general corporate purposes, and pay initial operating expenses. While management
currently has no such plans, if opportunities arise, some of the proceeds of the
offering could also be used to finance acquisitions of other financial
institutions, branches of other institutions, or expansion into other lines of
business closely related to banking. However, management will retain discretion
in employing the proceeds of the offering. See "Use of Proceeds."
 
LENDING RISKS AND LENDING LIMITS
 
     The risk of nonpayment of loans is inherent in commercial banking, and such
nonpayment, if it occurs, would likely have a material adverse effect on the
Company's earnings and overall financial condition as well
 
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as the value of the Common Stock. Because the Bank does not have an operating
history, none of the Bank's customers will have an established credit history
with the Bank. Management will attempt to minimize the Bank's credit exposure by
carefully monitoring the concentration of its loans within specific industries
and through prudent loan application and approval procedures, but there can be
no assurance that such monitoring and procedures will reduce such lending risks.
Credit losses can cause insolvency and failure of a financial institution, and
in such event, its shareholders could lose their entire investment.
 
     The Bank's general lending limit is expected to initially be approximately
$1.65 million; subject to a higher lending limit of $2.75 million in specific
cases with approval by two-thirds of the Bank's Board of Directors. Accordingly,
the size of the loans which the Bank can offer to potential customers is less
than the size of loans which most of the Bank's competitors with larger lending
limits are able to offer. This limit initially may affect the ability of the
Bank to seek relationships with the area's larger businesses. The Bank expects
to accommodate loan volumes in excess of its lending limit through the sale of
participations in such loans to other banks. However, there can be no assurance
that the Bank will be successful in attracting or maintaining customers seeking
larger loans or that the Bank will be able to engage in participations of such
loans on terms favorable to the Bank.
 
IMPACT OF INTEREST RATES AND ECONOMIC CONDITIONS
 
     The results of operations for financial institutions, including the Bank,
may be materially and adversely affected by changes in prevailing economic
conditions, including declines in real estate market values, rapid changes in
interest rates and the monetary and fiscal policies of the federal government.
See "Supervision and Regulation -- General" and "-- Recent Regulatory
Developments." The Bank's profitability is in part a function of the spread
between the interest rates earned on investments and loans and the interest
rates paid on deposits and other interest-bearing liabilities. In the early
1990s, many banking organizations experienced historically high interest rate
spreads. More recently, interest rate spreads have generally narrowed due to
changing market conditions and competitive pricing pressure, and there can be no
assurance that such factors will not continue to exert such pressure or that
such high interest rate spreads will return. Although economic conditions in the
Bank's market area have been generally favorable, there can be no assurance that
such conditions will continue to prevail. Substantially all the Bank's loans
will be to businesses and individuals in Western Michigan and any decline in the
economy of this area could have an adverse impact on the Bank. Like most banking
institutions, the Bank's net interest spread and margin will be affected by
general economic conditions and other factors that influence market interest
rates and the Bank's ability to respond to changes in such rates. At any given
time, the Bank's assets and liabilities will be such that they are affected
differently by a given change in interest rates. As a result, an increase or
decrease in rates could have a material adverse effect on the Bank's net income,
capital and liquidity. While management intends to take measures to guard
against interest rate risk, there can be no assurance that such measures will be
effective in minimizing the exposure to interest rate risk. See "Supervision and
Regulation."
 
NEED FOR TECHNOLOGICAL CHANGE
 
     The banking industry is undergoing rapid technological changes with
frequent introductions of new technology-driven products and services. In
addition to better serving customers, the effective use of technology increases
efficiency and enables financial institutions to reduce costs. The Company's
future success will depend in part on its ability to address the needs of its
customers by using technology to provide products and services that will satisfy
customer demands for convenience as well as to create additional efficiencies in
the Bank's operations. Many of the Bank's competitors have substantially greater
resources to invest in technological improvements. Such technology may permit
competitors to perform certain functions at a lower cost than the Bank. There
can be no assurance that the Bank will be able to effectively implement new
technology-driven products and services or be successful in marketing such
products and services to its customers. See "Business -- Business Strategy."
 
ANTI-TAKEOVER PROVISIONS
 
     Chapters 7A and 7B of the Michigan Business Corporation Act (the "MBCA")
provide for certain supermajority vote and other requirements on certain
business combinations with interested shareholders and
 
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limit voting rights of certain acquirers of control shares. Federal law requires
the approval of the Board of Governors of the Federal Reserve System (the
"Federal Reserve Board") prior to acquisition of "control" of a bank holding
company. The Company's Articles of Incorporation (i) provide for a Board of
Directors that is divided into three classes of directors, (ii) provide for
removal of directors only for cause, (iii) provide specific advance notice
procedures for shareholders who wish to nominate directors, (iv) prohibit
shareholder action by written consent without a meeting, and (v) require the
affirmative vote of holders of at least 66 2/3 of the voting stock of the
Company to change any of such provisions of the Articles of Incorporation. These
provisions may have the effect of delaying or preventing a change in control of
the Company. As a result, these provisions could adversely affect the price of
the Common Stock by, among other things, preventing a shareholder of the
Company's Common Stock from realizing a premium which might be paid as a result
of a change in control of the Company. See "Description of Capital Stock --
Certain Anti-Takeover Provisions."
 
INDEMNIFICATION OF DIRECTORS AND OFFICERS
 
     The Company's Articles of Incorporation and bylaws provide for the
indemnification of its officers and directors and insulate its officers and
directors from liability for certain breaches of the duty of care. It is
possible that the indemnification obligations imposed under these provisions
could result in a charge against the Company's earnings and thereby affect the
availability of funds for payment of dividends to the Company's shareholders.
See "Description of Capital Stock -- Indemnification of Directors and Officers."
 
DETERMINATION OF OFFERING PRICE; LIMITED TRADING MARKET EXPECTED
 
     The initial public offering price of $10.00 per share was determined by the
Company in consultation with the Underwriter. This price is not based upon
earnings or any history of operations and should not be construed as indicative
of the present or anticipated future value of the Common Stock. Prior to the
offering, there has been no public trading market for the Common Stock. The
price at which these shares are being offered to the public may be greater than
the market price for the Common Stock following the offering. The Underwriter
has advised the Company that, upon completion of the offering, it intends to use
reasonable efforts to initiate quotations of the Common Stock on the OTC
Bulletin Board and to act as a market maker in the Common Stock, subject to
applicable laws and regulatory requirements, although it is not obligated to do
so. Making a market in securities involves maintaining bid and ask quotations
and being able, as principal, to effect transactions in reasonable quantities at
those quoted prices, subject to various securities laws and other regulatory
requirements. The development of a public trading market depends, however, upon
the existence of willing buyers and sellers, the presence of which is not within
the control of the Company, the Bank or any market maker. Market makers on the
OTC Bulletin Board are not required to maintain a continuous two sided market,
are required to honor firm quotations for only a limited number of shares, and
are free to withdraw firm quotations at any time. Even with a market maker,
factors such as the limited size of the offering, the lack of earnings history
for the Company and the absence of a reasonable expectation of dividends within
the near future mean that there can be no assurance of an active and liquid
market for the Common Stock developing in the foreseeable future. Even if a
market develops, there can be no assurance that a market will continue, or that
shareholders will be able to sell their shares at or above the price at which
these shares are being offered to the public. Purchasers of Common Stock should
carefully consider the limited liquidity of their investment in the shares being
offered hereby.
 
REGULATORY RISK
 
     The banking industry is heavily regulated. Many of these regulations are
intended to protect depositors, the public, and the FDIC, not shareholders.
Applicable laws, regulations, interpretations and enforcement policies have been
subject to significant, and sometimes retroactively applied, changes in recent
years, and may be subject to significant future changes. There can be no
assurance that such future changes will not adversely affect the business of the
Company. In addition, the burden imposed by federal and state regulations may
place banks in general, and the Company specifically, at a competitive
disadvantage compared to less regulated competitors. See "Supervision and
Regulation."
 
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                                USE OF PROCEEDS
 
     The net proceeds to the Company from the sale of the 1,300,000 shares of
Common Stock offered hereby are estimated to be $12,090,000 ($13,903,500 if the
Underwriter's over-allotment option is exercised in full), after deduction of
the underwriting discounts, but before deducting estimated offering expenses of
$248,000. The Underwriter has agreed to limit the underwriting discounts to 1.5%
of the public offering price for the first 328,500 shares sold by the
Underwriter to organizers of the Bank or their immediate families. Such persons
have provided nonbinding expressions of interest to purchase approximately
328,500 shares. If such persons purchase 328,500 shares, underwriting discounts
will be reduced by, and proceeds to the Company will be increased by, $180,675.
 
     The Company expects to contribute approximately $11,000,000 of the net
proceeds of the offering to the Bank by purchasing all of the Bank's common
stock to be issued. This purchase of the Bank's stock is intended to provide the
Bank with the capital required by regulators to commence operations. The Bank
plans to use approximately $650,000 for leasehold improvements and related
architectural and engineering services, and approximately $850,000 to purchase
furniture, fixtures and equipment and other necessary assets for the Bank's
operations. The Company expects to use approximately $46,000 of the net proceeds
to pay for organizational expenses of the Bank. These organizational expenses,
and other preopening expenses, are being financed on an interim basis from loans
of approximately $835,500 made to the Company by members of its Board of
Directors. It is anticipated that this approximately $835,500 of loans will be
repaid by the Company promptly following the completion of the offering.
Preopening income may offset some of these expenses. It is currently anticipated
that the balance of the net proceeds received by the Bank will be used to fund
investments in loans and securities and for payment of operating expenses. The
remaining net proceeds (plus any net proceeds as a result of the exercise of the
Underwriter's over-allotment option) will initially be invested by the Company
in investment grade securities and otherwise held by the Company as working
capital for general corporate purposes and to pay operating expenses, as well as
for possible future capital contributions to the Bank. The funds will also be
available to finance possible acquisitions of other branches or expansion into
other lines of business closely related to banking, although the Company
presently has no plans to do so.
 
                                DIVIDEND POLICY
 
     The Company initially expects that Company and Bank earnings, if any, will
be retained to finance the growth of the Company and the Bank and that no cash
dividends will be paid for the foreseeable future. After the Bank achieves
profitability, recovers its operating deficit, and funds an adequate reserve for
loan and lease losses, the Company may consider payment of dividends. However,
the declaration of dividends is at the discretion of the Board of Directors, and
there is no assurance that dividends will be declared at any time. If and when
dividends are declared, the Company will be largely dependent upon dividends
paid by the Bank for funds to pay dividends on the Common Stock. It is also
possible, however, that the Company might at some time in the future pay
dividends generated from income or investments and from other activities of the
Company.
 
     Under Michigan law, the Bank will be restricted as to the maximum amount of
dividends it may pay on its Common Stock. A Michigan state bank may not declare
dividends except out of net profits then on hand after deducting its losses and
bad debts and then only if the bank will have a surplus amounting to at least
20% of its capital after the payment of the dividend. A Michigan state bank may
not declare or pay any cash dividend or dividend in kind until the cumulative
dividends on its preferred stock, if any, have been paid in full. If the surplus
of a Michigan state bank is at any time less than the amount of its capital,
before the declaration of a cash dividend or dividend in kind, it must transfer
to surplus not less than 10% of its net profits for the preceding half-year (in
the case of quarterly or semi-annual dividends) or the preceding two consecutive
half-year periods (in the case of annual dividends). The ability of the Company
and the Bank to pay dividends is also affected by various regulatory
requirements and policies, such as the requirement to maintain adequate capital
above regulatory guidelines. See "Supervision and Regulation." Such requirements
and policies may limit the Company's ability to obtain dividends from the Bank
for its cash needs, including funds for acquisitions, payment of dividends by
the Company, and the payment of operating expenses.
 
                                        9
   10
 
                                 CAPITALIZATION
 
     The following table sets forth the capitalization of the Company as it is
projected to be immediately after the sale of the 1,300,000 shares of Common
Stock offered hereby and the application of the estimated net proceeds. See "Use
of Proceeds."
 
                                                             
Short-term debt.............................................    $       -0-
Shareholders' equity:
  Preferred stock, no par value, 1,000,000 shares
     authorized, none issued................................    $       -0-
  Common Stock, no par value, 9,000,000 shares authorized,
     1,300,000 shares issued and outstanding................      1,300,000
  Additional Paid-in Capital................................     10,723,000
  Retained Earnings.........................................       (204,000)
  Organizational Expenses(1)................................        (46,000)
                                                                -----------
  Total Equity..............................................    $11,773,000
                                                                ===========


 
- -------------------------
(1) The organizational expenses will be amortized over a 60 month period.
 
                                       10
   11
 
                                    BUSINESS
 
BACKGROUND
 
     The liberalization of Michigan's branch banking laws, together with the
expansion of interstate banking, has led to substantial consolidation of the
banking industry in Michigan, including the West Michigan area, where the Bank
will be located. In the past, several of the financial institutions within the
primary market area of the Bank have either been acquired by or merged with
larger financial institutions or out-of-state financial institutions. In some
cases, when these consolidations occurred, local boards of directors were
dissolved and local management relocated or in some cases terminated. This has
in some cases resulted in policy and credit decisions being centralized away
from local management.
 
     In the opinion of the Company's management, this situation has created a
favorable opportunity for a new commercial bank with local management and
directors. Management of the Company believes that such a bank can attract those
customers who wish to conduct business with a locally managed institution that
demonstrates an active interest in their business and personal financial
affairs. The Company believes that a locally managed institution, in many cases,
will be able to deliver more timely responses to customer requests, provide
customized financial products and services, and offer the personal attention of
the Bank's senior banking officers. The Bank will seek to take advantage of this
opportunity by emphasizing in its marketing plan the Bank's local management and
the Bank's ties and commitment to its market area.
 
     After the offering, the Company will own all of the issued and outstanding
stock of the Bank. Following completion of the offering and before commencement
of operations, the Bank intends to complete the furnishing of its main office,
certain training of its staff and the purchase, lease and installation of
equipment necessary to transact a banking business. Correspondent banking
relationships and other arrangements for services will be completed as
necessary.
 
     The Company was incorporated as a Michigan business corporation on July 15,
1997. The Company was formed to acquire all of the Bank's issued and outstanding
stock and to engage in the business of a bank holding company under the federal
Bank Holding Company Act of 1956, as amended. On August 29, 1997, the
Commissioner of the FIB issued an order approving the application to establish
the Bank. On August 19, 1997, the Bank's application for FDIC deposit insurance
was approved. The Company's application to become a bank holding company for the
Bank was approved by the Federal Reserve Board on October 15, 1997. These
approvals were issued subject to the satisfaction of certain conditions that the
Company believes are customary in transactions of this type, including
conditions relating to capitalization of the Bank and continuing capital
adequacy. The Company and the Bank expect to satisfy such conditions and
commence business in the fourth quarter of 1997. See "Risk Factors -- Delay in
Commencing Operations" and "Risk Factors -- Government Regulation and Monetary
Policy."
 
     The Company's offices are located at 216 North Division Avenue, Grand
Rapids, Michigan 49503, telephone number (616) 242-9000.
 
BUSINESS STRATEGY
 
     The Bank intends to provide a range of business and consumer financial
services to serve small to medium-sized business customers and individuals. The
foundation of this strategy will be to emphasize local management and its
commitment to the Bank's primary market area. Gerald R. Johnson, Jr., Chairman
and Chief Executive Officer of the Company, has over 17 years of banking
experience in the Bank's market area. Mr. Johnson was President and Chief
Executive Officer of FMB, a Michigan banking corporation with more than $540
million of assets, at the time of his resignation from FMB to organize the Bank.
Mr. Johnson is assembling a staff that is expected to provide prompt customer
service and effective banking products. The Bank intends to compete aggressively
for its banking business through a systematic program of direct calling on both
customers and referral sources such as attorneys, accountants and other business
people.
 
     Business Financial Services. The Bank intends to offer products and
services consistent with its goal of attracting small to medium-sized business
customers as well as a variety of individuals. Commercial loans will be offered
on both a secured and unsecured basis and will be available for working capital
purposes, the purchase of equipment and machinery, financing of accounts
receivable and inventory and for the purchase of real estate, primarily owner
occupied real estate. As part of its banking business, the Bank may make loans
to
 
                                       11
   12
 
all types of borrowers secured by first and junior mortgages on various types of
real estate, including without limitation, single-family residential,
multi-family residential, mixed use, commercial, developed, and undeveloped. In
making such loans, the Bank will be subject to written policies, reviewed and
approved at least annually by the Bank's Board of Directors, pursuant to federal
law and regulations. Such policies will address loan portfolio diversification
and prudent underwriting standards, loan administration procedures, and
documentation, approval and reporting requirements. In addition, federal
regulations specify minimum supervisory loan-to-value ratios applicable to each
type of loan secured by real estate.
 
     The Bank will generally look to a borrower's business operations as the
principal source of repayment and will also seek, when appropriate, security
interests in the inventory, accounts receivable or other personal property of
the borrower, and personal guaranties. Although the Bank intends to be
aggressive in seeking new loan growth, it intends to stress high quality in its
loans. To promote such standards, the Board of Directors of the Bank intends to
establish strict lending policies, including specified lending authorities, loan
review policies and lending committees. In establishing such policies, the Board
of Directors will be required to conform to applicable bank regulatory
requirements. See "Supervision and Regulation."
 
     The Bank intends to actively pursue business checking accounts by offering
competitive rates, computerized banking, and other convenient services to its
business customers. In some cases the Bank will require its business borrowers
to maintain minimum balances. Management of the Bank also intends to establish
relationships with one or more correspondent banks and other independent
financial institutions to provide other services requested by its customers,
including loan participations where the requested loan amount exceeds the Bank's
legal lending limit.
 
     Consumer Financial Services. The Bank's retail banking strategy will
initially focus on providing attractive products and services, including
automated teller machine, computer home banking, telephone banking and automated
bill paying services to individuals in the Bank's market area. The Bank believes
that by offering these technologically advanced banking products it can attract
new deposits and loans without the necessity of expensive brick and mortar
branch operations.
 
     In addition, the Bank will originate residential real estate loans in the
form of first mortgages and home equity loans. The Bank intends to apply to the
Federal Home Loan Mortgage Corporation (Freddie Mac) for approval as a
seller-servicer of residential mortgage loans and intends to sell most of its
fixed rate mortgages into the secondary market. Most of its adjustable rate
loans and home equity loans, which will also be primarily adjustable rate, are
intended to be held in the Bank's portfolio.
 
     The Bank intends to offer other consumer lending services including credit
cards (through third-party providers), direct auto loans, and other personal
loan products on both a secured and unsecured basis.
 
     Management expects that the Bank's staff will have access to current
software and database systems selected to deliver high-quality products and
provide responsive service to clients. The Bank expects to enter into agreements
with third-party service providers to provide customers with convenient
electronic access to their accounts and other bank products through debit cards,
voice response and home banking. The use of third-party service providers is
intended to allow the Bank to remain at the forefront of technology while
minimizing the costs of delivery.
 
     Investments. The principal investment of the Company will be its purchase
of all of the common stock of the Bank. Funds retained by the Company from time
to time may be invested in various debt instruments, including but not limited
to obligations of or guaranteed by the United States, general obligations of a
state or political subdivision thereof, bankers' acceptances or certificates of
deposit of United States commercial banks, or commercial paper of United States
issuers rated in the highest category by a nationally-recognized investment
rating service. Although the Company is permitted to make limited portfolio
investments in equity securities and to make equity investments in subsidiary
corporations engaged in certain non-banking activities which may include real
estate-related activities, such as mortgage banking, community development, real
estate appraisals, arranging equity financing for commercial real estate, and
owning and operating real estate used substantially by the Bank or acquired for
its future use, the Company has no present plans to make any such equity
investment. See "Supervision and Regulation -- The Company -- Investments and
Activities." The Company's Board of Directors may alter the Company's investment
policy without shareholder approval.
 
                                       12
   13
 
     The Bank may invest its funds in a wide variety of debt instruments and may
participate in the federal funds market with other depository institutions.
Subject to certain exceptions, the Bank is prohibited from investing in equity
securities. Under one such exception, in certain circumstances and with the
prior approval of the FDIC, the Bank could invest up to 10% of its total assets
in the equity securities of a subsidiary corporation engaged in certain real
estate-related activities. The Bank has no present plans to make such an
investment. Real estate acquired by the Bank in satisfaction of or foreclosure
upon loans may be held by the Bank, subject to a determination by a majority of
the Bank's Board of Directors at least annually of the advisability of retaining
the property, for a period not exceeding 60 months after the date of
acquisition, or such longer period as the Commissioner may approve. The Bank is
also permitted to invest an aggregate amount not in excess of two-thirds of the
capital and surplus of the Bank in such real estate as is necessary for the
convenient transaction of its business. The Bank has no present plans to make
any such investment. The Bank's Board of Directors may alter the Bank's
investment policy without shareholder approval.
 
MARKET AREA
 
     Management believes that recent changes in the local banking industry,
including mergers and acquisitions involving commercial banks and thrift
institutions, have resulted in a decrease in the level of service for small to
medium-sized business customers in the Bank's market area. Management believes
that there continues to be the perception in some areas of the local business
community that many of the larger financial institutions are not as focused on
providing personal service to small to medium-sized businesses. Accordingly,
management believes that there are increased market opportunities for the Bank
to serve these businesses.
 
     The Bank's main office is located at 216 North Division Avenue between Lyon
Street and Michigan Street in downtown Grand Rapids, Michigan, not far from the
Butterworth Hospital Complex and Grand Rapids Community College. The Bank will
be leasing a building that is being renovated by the Bank.
 
     The Bank's primary service area will be Kent County which includes the City
of Grand Rapids, the second largest city in the State of Michigan. Kent County
is comprised of 36 cities, villages or townships and ranks fourth in population
out of Michigan's 83 counties. Kent County covers 856 square miles. According to
available statistical data, Kent County has approximately 14,000 business
establishments, an unemployment rate of approximately 3%, and a median household
income that is estimated to have grown approximately 40% from 1990 to 1996.
 
     Kent County is also a significant banking market in the State of Michigan.
According to available industry data, as of June 30, 1996 total deposits in Kent
County, including banks, thrifts and credit unions, were approximately $7.6
billion.
 
COMPETITION
 
     There are many thrift institution, credit union and bank offices located
within the Bank's primary market area. Most are branches of larger financial
institutions which, in management's view, are managed with a philosophy of
strong centralization. The Bank will face competition from thrift institutions,
credit unions, and other banks as well as finance companies, insurance
companies, mortgage companies, securities brokerage firms, money market funds
and other providers of financial services. Most of the Bank's competitors have
been in business a number of years, have established customer bases, are larger
and have higher lending limits than the Bank. The Bank will compete for loans
principally through its ability to communicate effectively with its customers
and understand and meet their needs. Management believes that its personal
service philosophy will enhance its ability to compete favorably in attracting
individuals and small businesses. The Bank will actively solicit retail
customers and will compete for deposits by offering customers personal
attention, professional service, computerized banking, and competitive interest
rates.
 
BANK PREMISES
 
     The Bank is leasing and renovating a one story building in downtown Grand
Rapids, Michigan for use as the Bank's main office and the Company's
headquarters. This building is of masonry construction and has approximately
11,000 square feet of usable space. The Bank believes that this space will be
adequate for its
 
                                       13
   14
 
present needs. As a result of the Bank's intended strategy of providing personal
customer service, the Bank does not intend to have teller windows inside the
Bank or drive through teller facilities. Instead, the Bank intends to utilize
customer services representatives who will service the Bank's customers at desks
conveniently located inside the Bank.
 
     The lease for the Bank's office has an initial term of 10 years and the
Bank has four, five year renewal options. The monthly lease payments begin at
$12,487 per month in the first year and increase each year during the term of
the lease by the greater of the annual percentage increase in the Consumer Price
Index or 3%. In addition, the Bank will be required to make payments for taxes,
insurance, and other operating expenses. The Bank expects to expend
approximately $650,000 for tenant improvements and related architectural and
engineering services, and additional funds for furniture, fixtures and other
equipment.
 
     The Bank's office is located at 216 North Division Avenue between Lyon
Street and Michigan Street in downtown Grand Rapids, Michigan, in a portion of
downtown Grand Rapids convenient to I-96. Access to the main office is available
to Kent County residents by utilizing I-196, US 131, Michigan Street, and Lyon
Street. The building is one of a few available locations in downtown Grand
Rapids with on-site parking. The parking consists of approximately 24 spaces,
with no parking meters. The Bank expects to commence its business in the fourth
quarter of 1997.
 
ACCOUNT PROCESSING SERVICES AGREEMENT
 
     The Bank has entered into an account processing services agreement with
Fiserv Solutions, Inc. ("Fiserv"). Pursuant to this agreement, Fiserv is
expected to provide the Bank with information and account processing services
and reports. The agreement has an initial term of three years, with optional
subsequent one year renewal terms. In the event of early termination of the
agreement by the Bank, at its option, or by Fiserv, as a result of any default
by the Bank, the Bank is required to pay Fiserv a termination fee and certain
other amounts. The termination fee varies depending on the circumstances under
which the termination occurs. In the case of a termination made at the option of
the Bank, the termination fee (subject to some reduction in certain cases) is an
amount approximately equal to 80% of the highest monthly amount previously
billed to the Bank by Fiserv for each specific service, times the number of
months remaining in the then current term of the agreement. In the case of a
termination made at the option of Fiserv following a default by the Bank, the
termination fee is an amount approximately equal to the present value of all
payments remaining to be made by the Bank during the then current term of the
agreement. All such amounts are required to be paid before Fiserv is obligated
to release to the Bank copies of the data that the Bank has provided to Fiserv.
 
EMPLOYEES
 
     The Bank is assembling a staff of experienced professionals and expects to
have approximately 18 full time employees, including approximately eight
officers and ten customer service and other support persons, within the first
few months of operations.
 
PLAN OF OPERATION
 
     The Company's plan of operation for the twelve months following the
completion of the offering does not contemplate the need to raise additional
funds during that period. Management has concluded, based on current pre-opening
growth projections, that the Bank is likely to have adequate funds to meet its
cash requirements for at least the next several years. Management has no
specific plans for product research or development which would be performed
within the next twelve months. Management plans to expend approximately $650,000
for leasehold improvements and related architectural and engineering services,
and approximately $850,000 for furniture, fixtures, equipment and other
necessary assets, prior to commencing operation. During the first twelve months
of operation, the Company does not anticipate requiring substantial additional
equipment. No significant changes in the number of employees is anticipated in
the first twelve months of operations after the Bank commences its business and
completes the hiring of its approximately 18 initial employees.
 
                                       14
   15
 
                                   MANAGEMENT
 
DIRECTORS AND OFFICERS
 
     The directors and senior officers of the Company as of the date hereof, and
their contemplated positions with the Bank upon completion of the offering, are
as follows:
 


                                                        POSITION WITH
                                                         THE COMPANY                   POSITION(S)
                 NAME                      AGE       (AND DIRECTOR CLASS)             WITH THE BANK
                 ----                      ---       --------------------             -------------
                                                                       
Peter A. Cordes........................    57     Director (Class II)           Director
C. John Gill...........................    63     Director (Class I)            Director
David M. Hecht.........................    60     Director (Class II)           Director
Gerald R. Johnson, Jr..................    50     Chairman of the Board,        Chairman of the Board,
                                                  Chief Executive Officer,      Chief Executive Officer,
                                                  and Director (Class I)        and Director
Lawrence W. Larsen.....................    58     Director (Class III)          Director
Calvin D. Murdock......................    58     Director (Class I)            Director
Dale J. Visser.........................    61     Director (Class III)          Director
Robert M. Wynalda......................    62     Director (Class II)           Director
Robert B. Kaminski.....................    35     Senior Vice President and     Senior Vice President and
                                                  Secretary                     Secretary

 
     Under federal law and regulations and subject to certain exceptions, the
addition or replacement of any director, or the employment, dismissal or
reassignment of a senior executive officer of the Bank or the Company at any
time that the Bank is not in compliance with applicable minimum capital
requirements, is otherwise in a troubled condition, or when the FDIC has
determined that such prior notice is appropriate, is subject to prior notice to
and disapproval by the FDIC.
 
     The Company's Articles of Incorporation provide that the number of
directors, as determined from time to time by the Board of Directors, shall be
no less than six and no more than fifteen. The Board of Directors has presently
fixed the number of directors at eight. The Articles of Incorporation further
provide that the directors shall be divided into three classes, Class I, Class
II, and Class III, with each class serving a staggered three-year term and with
the number of directors in each class being as nearly equal as possible. The
initial terms of the Class I, Class II, and Class III directors has been
established at one year, two years, and three years, respectively. The
subsequent terms of each class of director will be three years.
 
     It is anticipated that the entire Board of Directors of the Bank will be
elected annually by its shareholder, the Company.
 
     Officers of the Company and the Bank will be elected annually by their
respective Boards of Directors and perform such duties as are prescribed in the
bylaws or by the Board of Directors.
 
     There are no family relationships among any of the Company's directors,
officers or key personnel. Dale Visser, one of the directors, is the brother of
Bruce Visser, who is one of the organizers of the Bank.
 
     The Bank expects to have approximately 18 full time employees within a
relatively short period of time following the offering. Some of such employees
will be executive officers whose compensation and other terms of employment,
including the grant of stock options, will be determined by the Board of
Directors of the Company or the Bank.
 
EXPERIENCE OF DIRECTORS AND OFFICERS
 
     The experience and backgrounds of the directors and senior officers, and
their proposed positions with the Company, are summarized below.
 
     PETER A. CORDES (Director) Mr. Cordes has served as President and Chief
Executive Officer of GWI Engineering Inc. ("GWI") of Grand Rapids, Michigan
since 1991. GWI is engaged in the engineering and
 
                                       15
   16
 
manufacturing of custom assembly and welding equipment for customers in a
variety of industries in the Midwest. Mr. Cordes purchased GWI in 1991 and is
now the sole owner. Mr. Cordes is a 1966 graduate of St. Louis University with a
degree in aeronautics. He is a native of Traverse City, Michigan and has spent
the last eighteen years in West Michigan.
 
     C. JOHN GILL (Director) Mr. Gill is Chairman of the Board and one of the
owners of Gill Industries of Grand Rapids, Michigan. He has served in this
capacity since he started this business in 1963. Gill Industries is a
manufacturing company involved with sheet metal stampings and assemblies for the
automotive and appliance industries. Mr. Gill is a native of Lakeview, Michigan.
 
     DAVID M. HECHT (Director) Mr. Hecht is an attorney with the law firm, Hecht
& Lentz, in Grand Rapids, Michigan. He is Chairman and one of the owners of the
law firm. Mr. Hecht established the firm in 1993. Prior to this, he was a
partner in the Grand Rapids office of the law firm of Dickinson, Wright, Moon,
Van Dusen & Freeman. Mr. Hecht is a native of Grand Rapids and a graduate of the
University of Michigan and the University of Wisconsin. He has practiced law for
36 years, including the past 25 years in Grand Rapids. Mr. Hecht is on the Board
of Trustees of the Grand Valley University Foundation and a Director of Hospice
Foundation of Greater Grand Rapids.
 
     GERALD R. JOHNSON, JR. (Chairman of the Board, Chief Executive Officer, and
Director) has over 27 years experience in the financial service industry,
including 24 years of commercial banking experience. Mr. Johnson was appointed
President and Chief Executive Officer of FMB-Grand Rapids in 1986, and served as
Chairman, President and Chief Executive Officer from 1988 to May of 1997, when
he resigned to organize the Company. In the Grand Rapids market, prior to
joining FMB-Grand Rapids, Mr. Johnson was employed in various lending capacities
by Union Bank (now part of First Chicago NBD), Pacesetter Bank-Grand Rapids (now
part of Old Kent), and Manufacturers Bank (now part of Comerica Bank). Mr.
Johnson has been involved in charitable and community activities for many years.
He currently serves as a Vice Chairman of the Board of the Downtown YMCA,
Chairman of Residential Treatment of West Michigan, and is affiliated with Life
Guidance Services, American Heart Association of Greater Grand Rapids, Economic
Development Foundation, Grand Rapids Rotary Club, Michigan Trails Girl Scout
Council, and Junior League of Grand Rapids. Mr. Johnson also has past
affiliations with Hope Network, Project Rehab, and the Grand Rapids Area Chamber
of Commerce where he was a board member for six years.
 
     LAWRENCE W. LARSEN (Director) Mr. Larsen is President and owner of Central
Industrial Corporation of Grand Rapids, Michigan, and has served in that
capacity since he started that company in 1967. Central Industrial Corporation
is a wholesale distributor of industrial supplies. Mr. Larsen is also an owner
and director of Jet Products, Inc. of West Carrollton, Ohio. Jet Products, Inc.
designs, manufactures and sells hose reels and related products. Mr. Larsen is a
native of Wisconsin. He has spent the last 31 years in the Grand Rapids area.
Mr. Larsen is an active supporter of the Catholic secondary schools system in
Grand Rapids. Mr. Larsen served as a director of FMB-Grand Rapids from 1980
until June of 1997, and was a member of the Executive Loan Committee and the
Audit Committee.
 
     CALVIN D. MURDOCK (Director) Mr. Murdock is President of SF Electronics,
Inc. ("SFE") of Grand Rapids, Michigan. He has held this position since 1994.
From 1992 to 1994, he served as the General Manager of SFE, and in 1991, served
as SFE's Controller. SFE is a wholesale industrial electronics components
supplier. Mr. Murdock is a Michigan native and a graduate of Ferris State
University with a degree in accounting. Prior to joining SFE, Mr. Murdock owned
and operated businesses in the manufacturing and supply of automobile wash
equipment.
 
     DALE J. VISSER (Director) Mr. Visser is Treasurer and one of the owners of
Visser Brothers Construction of Grand Rapids, Michigan. He has served as
Treasurer of this company since 1960. Mr. Visser grew up in the construction
industry as his father started Visser Brothers in 1926. As an owner of the
company with his brother, Mr. Visser has also held the position of President.
Visser Brothers is a construction general contractor specializing in commercial
buildings. Mr. Visser also has an ownership interest in several real estate
projects in the Grand Rapids area including Eastbrook Mall and Breton Village
Shopping Center. Mr. Visser served as a director of FMB-Grand Rapids from 1972
until June of 1997. He is a Grand Rapids native and a graduate of
 
                                       16
   17
 
the University of Michigan with a degree in civil engineering. Mr. Visser is
active in the community having served on the boards for the Grand Rapids YMCA,
Christian Rest Home, and West Side Christian School.
 
     ROBERT M. WYNALDA (Director) Mr. Wynalda is Chief Executive Officer and an
owner of Wynalda Litho Inc. of Rockford, Michigan. Mr. Wynalda has held this
position since he founded the company in 1970. Wynalda Litho Inc. is a
commercial printing company serving customers from around the country. Mr.
Wynalda is a native of Grand Rapids and has spent 45 years in the printing
business. Mr. Wynalda serves on the Board of Trustees for Cornerstone College of
Grand Rapids, and formerly served as a director of a local financial
institution.
 
     ROBERT B. KAMINSKI (Senior Vice President and Secretary) Mr. Kaminski has
over 13 years of commercial banking experience, all with First Michigan Bank
Corporation and its subsidiaries. From 1984 to 1993, Mr. Kaminski worked for
FMB-Grand Rapids in various capacities in the areas of credit administration and
bank compliance. In 1993, Mr. Kaminski was appointed Vice President in charge of
Loan Review and Compliance for FMB-Grand Rapids. From 1996 through June of 1997,
when he resigned, Mr. Kaminski served as Vice President and Manager of the
Commercial Credit Department for three of First Michigan Bank Corporation's
subsidiaries. Mr. Kaminski serves on the Leadership Committee for the National
Kidney Foundation of Michigan in Grand Rapids, the Board of Directors for HELP
Pregnancy Crisis Aid, Inc., and is a career mentor for Aquinas College of Grand
Rapids.
 
DIRECTOR AND EXECUTIVE OFFICER COMPENSATION
 
     In the first year of operation, no compensation is expected to be paid to
any directors of the Company or the Bank for their services in such capacities.
Depending on the structure and operation of the Company, the operations of the
Bank and other factors, the Company's and the Bank's Boards of Directors may
thereafter determine that reasonable fees or compensation are appropriate. In
that event it is likely that directors of the Company and the Bank would receive
compensation, such as meeting fees, which would be consistent with the
compensation paid to directors of financial institution holding companies and
banks of similar size.
 
     Mr. Johnson, the Bank's Chairman, President, and Chief Executive Officer,
has chosen to join the Bank at a compensation level below what he earned in his
previous position. His interest in doing this is to reduce operating expenses in
the start up phase of the Bank. The annual compensation for Mr. Johnson for the
first year of operations is expected to be $150,000. His compensation in
subsequent years will be determined by the Company's and the Bank's Boards of
Directors. In making their determinations, it is expected that the Boards of
Directors will receive recommendations from their Compensation Committees, which
will be comprised of outside directors. Mr. Johnson and the other officers of
the Bank may participate in the Company's 1997 Employee Stock Option Plan.
Officers of the Bank may also participate in any benefit plans adopted for Bank
employees. The Bank expects to adopt a 401(k) plan for its employees. Neither
the Company nor the Bank has an employment agreement with any officer.
 
1997 EMPLOYEE STOCK OPTION PLAN
 
     The Board of Directors has adopted, and the sole shareholder of the Company
has approved, a 1997 Employee Stock Option Plan (the "Plan"). The Plan's
adoption is intended to enable the key employees of the Company or any
subsidiary to participate in any growth and profitability of the Company and
encourage their continuation as employees of the Company or a subsidiary to the
benefit of the Company and its shareholders. Pursuant to the Plan, stock options
may be granted which qualify under the Internal Revenue Code as incentive stock
options or as stock options that do not qualify as incentive stock options. The
Board is of the judgment that the interests of the Company and its shareholders
will be advanced by implementation of this Plan. The following is a summary of
the principal provisions of the Plan.
 
     Administration. The Plan will be administered by the Board of Directors of
the Company. The Board of Directors will make determinations with respect to the
officers and other key employees who will participate in the Plan and the extent
of their participation, including the type of option. In making such
determinations, the Board of Directors may consider the position and
responsibilities of the employee, the nature and value of his
 
                                       17
   18
 
or her services and accomplishments, the present and potential contribution of
the employee to the success of the Company, and such other factors as the Board
of Directors may deem relevant.
 
     Shares. The total number of shares of Common Stock which may be issued
under the Plan will not exceed 130,000 shares (subject to adjustment for certain
events as described below). The shares will be authorized but unissued shares
(including shares reacquired by the Company).
 
     Option Agreement. Each option granted under the Plan will be evidenced by
an agreement in such form as the Board of Directors shall from time to time
approve, which agreement must comply with and be subject to certain conditions
set forth in the Plan. Options granted under the Plan may be incentive stock
options or non-qualified options, as determined from time to time by the Board
of Directors for each optionee.
 
     Option Price. The option price will not be less than the fair market value
of the shares of Common Stock at the time the option is granted except in the
case of an incentive stock option granted to a 10% shareholder where the option
price will be equal to 110% of fair market value. For purposes of the Plan, fair
market value per share means the average of the published closing bid and asked
prices of the Common Stock on the OTC Bulletin Board (the "Bulletin Board"), or
if the Common Stock has become listed on The Nasdaq Stock Market ("Nasdaq"),
then on Nasdaq instead; or if the Common Stock is not quoted on either the
Bulletin Board or Nasdaq, a value determined by any fair and reasonable means
prescribed by the Board of Directors. The option price shall be paid in cash or
through the delivery of previously owned shares of the Company's Common Stock,
or by a combination of cash and Common Stock. For purposes of the grant of
options under the Plan, and not for any other purpose, the Board of Directors
has determined that $10 per share should be used as the market price for the
Common Stock prior to the completion of the offering.
 
     Duration of Options. The duration of each option will be determined by the
Board of Directors, except that (1) the maximum duration may not exceed ten
years from the date of grant, and (2) for incentive stock options granted to
persons who own 10% or more of the Company's stock, the duration of such options
may not exceed five years from the date of grant. The Board of Directors will
determine at the time of grant whether the option will be exercisable in full or
in cumulative installments.
 
     Except as hereinafter provided, an option may be exercised by an optionee
only while such optionee is in the employ of the Company or a subsidiary. In the
event that the employment of an optionee to whom an option has been granted
under the Plan terminates (except as set forth below) such option may be
exercised, to the extent that the option was exercisable on the date of
termination of employment, only until the earlier of three (3) months after such
termination or the original expiration date of the option; provided, however,
that if termination of employment results from death or total and permanent
disability, such three (3) month period will be extended to twelve (12) months.
 
     Adjustments. The Board of Directors may make appropriate adjustments in the
number of shares of Common Stock for which options may be granted or which may
be issued under the Plan and the price per share of each option if there is any
change in the Common Stock as a result of a stock dividend, stock split,
recapitalization or otherwise.
 
     Change in Control. In the case of a change in control (as defined in the
Plan) of the Company, each option then outstanding shall become exercisable in
full immediately prior to the change in control.
 
     Termination of Plan and Amendments. An option may not be granted pursuant
to the Plan after July 1, 2002. The Board of Directors may from time to time
amend or terminate the Plan, subject to shareholder approval to the extent
necessary to satisfy the requirements of Rule 16b-3 under the Exchange Act, or
any successor rule. No amendment or termination of the Plan will adversely
affect any option then outstanding under the Plan without the approval of the
optionee.
 
     Federal Income Tax Consequences. The grant of a non-qualified option or
incentive stock option has no federal tax consequences for the optionee or the
Company. Upon the exercise of a non-qualified option, the optionee is deemed to
realize taxable income to the extent that the fair market value of the shares of
Common Stock exceeds the option price. The Company is entitled to a tax
deduction for such amounts at the date of
 
                                       18
   19
 
exercise. If any stock received upon the exercise of a non-qualified option is
later sold, any excess of the sale price over the fair market value of the stock
at the date of exercise is taxable to the optionee.
 
     No taxable income results to the optionee upon the exercise of an incentive
stock option if the incentive stock option is exercised during the period of the
optionee's employment or within three months thereafter, except in the case of
disability or death. However, the amount by which the fair market value of the
stock acquired pursuant to an incentive stock option exceeds the option price is
a tax preference item which may result in the imposition on the optionee of an
alternative minimum tax. If no disposition of the shares is made within two
years from the date the incentive stock option was granted and one year from the
date of exercise, any profit realized upon disposition of the shares may be
treated as a long-term capital gain by the optionee. The Company will not be
entitled to a tax deduction upon such exercise of an incentive stock option, nor
upon a subsequent disposition of the shares unless such disposition occurs prior
to the expiration of the holding periods.
 
     Under the terms of the Plan the aggregate market value (determined at the
time the option is granted) of the stock with respect to which incentive stock
options are exercisable for the first time in any year by any optionee may not
exceed $100,000.
 
     As of September 1, 1997, the Company had outstanding two options to
purchase an aggregate of 45,000 shares of its Common Stock at an exercise price
of $10.00 per share pursuant to the Plan.
 
                           RELATED PARTY TRANSACTIONS
 
LOANS FROM ORGANIZERS
 
     Over the past several months, organizers of the Bank have loaned
approximately $835,500 in aggregate amount to the Company to cover
organizational and other preopening expenses of the Bank and the Company.
Interest is payable on the loans at the rate of 5% per annum. All of these loans
will be repaid by the Company from the net proceeds of the offering. Each of the
organizers who has loaned money to the Company is a member of the Company's
Board of Directors.
 
RENOVATION CONTRACT WITH VISSER BROTHERS CONSTRUCTION
 
     The Bank has entered into a contract with Visser Brothers Construction for
the renovation of the building at 216 North Division Avenue in Grand Rapids that
the Bank is leasing for its main office. Dale Visser and Bruce Visser, who are
brothers, are owners of a substantial majority of Visser Brothers Construction.
Dale Visser is a member of the Board of Directors of the Company, and it is
expected that he will become a member of the Board of Directors of the Bank.
Both Dale and Bruce Visser are organizers of the Bank. The contract provides for
the payment of approximately $450,000 to Visser Brothers Construction for
renovation work that it is to perform under its base bid. In addition, the
contract covers an additional approximately $150,000 for work that is specified
in the contract as being performed by a separate supplier. The contract provides
for the renovation to be performed in accordance with specifications provided by
the Bank's architect. The contract was awarded to Visser Brothers Construction
after being submitted for bids. While the price bid by Visser Brothers
Construction was approximately $11,000 more than the bid submitted by an
unrelated contractor, in the opinion of the Board of Directors of the Company,
with Dale Visser abstaining, the bid made by Visser Brothers Construction was
more favorable because of Visser Brothers Construction's prior experience in
building and remodeling offices for financial institutions and its willingness
to commit to a completion date in 1997.
 
BANKING TRANSACTIONS
 
     It is anticipated that the directors and officers of the Company and the
Bank and the companies with which they are associated will have banking and
other transactions with the Company and the Bank in the ordinary course of
business. Any loans and commitments to lend to such affiliated persons or
entities included in such transactions will be made in accordance with all
applicable laws and regulations and on substantially
 
                                       19
   20
 
the same terms, including interest rates and collateral, as those prevailing at
the time for comparable transactions with unaffiliated parties of similar
creditworthiness, and will not involve more than normal risk or present other
unfavorable features to the Company and the Bank. Transactions between the
Company or the Bank, and any officer, director, principal shareholder, or other
affiliate of the Company or the Bank will be on terms no less favorable to the
Company or the Bank than could be obtained on an arms-length basis from
unaffiliated independent third parties, and will be approved by a majority of
the Company's or the Bank's independent directors who do not have an interest in
the transaction and who have had access, at the Company's or the Bank's expense,
to the Company's legal counsel or independent legal counsel.
 
INDEMNIFICATION
 
     The Articles of Incorporation and bylaws of the Company provide for the
indemnification of directors and officers of the Company, including reasonable
legal fees, incurred by such directors and officers while acting for or on
behalf of the Company as a director or officer, subject to certain limitations.
See "Description of Capital Stock -- Indemnification of Directors and Officers."
The scope of such indemnification otherwise permitted by Michigan law may be
limited in certain circumstances by federal law and regulations. See "Recent
Regulatory Developments." The Company may purchase directors' and officers'
liability insurance for directors and officers of the Company and the Bank.
 
                             PRINCIPAL SHAREHOLDERS
 
     The Company has to date issued only one share of Common Stock. The
following table sets forth certain information with respect to the anticipated
beneficial ownership of the Company's Common Stock after the sale of shares
offered hereby, by (i) each person expected by the Company to beneficially own
more than 5% of the outstanding Common Stock; (ii) each of the current directors
and executive officers of the Company; and (iii) all such directors and
executive officers of the Company as a group. Pursuant to the Underwriting
Agreement between the Company and the Underwriter dated the date of this
Prospectus (the "Underwriting Agreement"), the Company will direct the
Underwriter to offer to sell the number of shares listed below to the directors
and executive officers listed below (each being an organizer of the Bank), and
50,000 shares to Bruce Visser, also an organizer of the Bank. All share numbers
are provided based upon such directions from the Company and non-binding
expressions of interest supplied by the persons listed below, and Bruce Visser.
 
                                       20
   21
 
Depending upon their individual circumstances at the time, each of such persons
may purchase a greater or fewer number of shares than indicated, and in fact may
purchase no shares.
 


                                                                                     PERCENTAGE OF
                                                               NUMBER OF SHARES       OUTSTANDING
                                                              BENEFICIALLY OWNED        SHARES
                      NAME AND ADDRESS                        AFTER OFFERING(1)    AFTER OFFERING(3)
                      ----------------                        ------------------   -----------------
                                                                             
Peter A. Cordes.............................................        25,000                1.9%
5447 Forest Bend Dr. S.E.
Ada, Michigan 49301
C. John Gill................................................        25,000                1.9%
4174 Winterwood Ct. N.E.
Grand Rapids, Michigan 49546
David M. Hecht..............................................        50,000                3.8%
2020 Robinson Rd. S.E.
Grand Rapids, Michigan 49506
Gerald R. Johnson...........................................        60,000(2)             4.6%
42 Deer Run Drive N.E.
Ada, Michigan 49301
Lawrence W. Larsen..........................................        13,500                1.0%
547 Kent Hills Rd., N.E.
Grand Rapids, Michigan 49505
Calvin D. Murdock...........................................        15,000                1.2%
2778 Walker Avenue N.W.
Grand Rapids, Michigan 49544
Dale J. Visser..............................................        50,000                3.8%
6872 Farrell Drive
Rockford, Michigan 49341
Robert M. Wynalda...........................................        50,000                3.8%
3395 Valley View Drive N.E.
Rockford, Michigan 49341
Directors and executive officers of the Company as a group
  (8 persons)(4)............................................       288,500(2)              22%

 
- -------------------------
(1) Some or all of the Common Stock listed may be held jointly with, or for the
    benefit of, spouses and children of, or various trusts established by, the
    person indicated.
 
(2) Includes 10,000 shares that such person has the right to acquire within 60
    days of September 1, 1997 pursuant to the Company's 1997 Employee Stock
    Option Plan. Such person also holds an option under such plan to purchase an
    additional 30,000 shares.
 
(3) The percentages shown are based on the 1,300,000 shares offered hereby plus
    the number of shares that the named person or group has the right to acquire
    within 60 days of September 1, 1997; and in each case assumes no exercise of
    the Underwriter's over-allotment option.
 
(4) Does not include 50,000 shares (3.8% of the outstanding shares after the
    offering) that Bruce Visser, who is Dale Visser's brother and one of the
    Bank's organizers, has expressed an interest in purchasing. These 50,000
    shares, together with the 278,500 shares shown in the table (calculated
    without taking into account shares referred to in footnote 2 above),
    comprise the 328,500 shares that the organizers of the Bank have expressed
    an interest in acquiring in the offering.
 
                                       21
   22
 
                           SUPERVISION AND REGULATION
 
GENERAL
 
     Financial institutions and their holding companies are extensively
regulated under federal and state law. Consequently, the growth and earnings
performance of the Company and the Bank can be affected not only by management
decisions and general economic conditions, but also by the statutes administered
by, and the regulations and policies of, various governmental regulatory
authorities. Those authorities include, but are not limited to, the Federal
Reserve Board, the FDIC, the Commissioner, the Internal Revenue Service, and
state taxing authorities. The effect of such statutes, regulations and policies
can be significant, and cannot be predicted with a high degree of certainty.
 
     Federal and state laws and regulations generally applicable to financial
institutions and their holding companies regulate, among other things, the scope
of business, investments, reserves against deposits, capital levels relative to
operations, lending activities and practices, the nature and amount of
collateral for loans, the establishment of branches, mergers, consolidations and
dividends. The system of supervision and regulation applicable to the Company
and the Bank establishes a comprehensive framework for their respective
operations and is intended primarily for the protection of the FDIC's deposit
insurance funds, the depositors of the Bank, and the public, rather than
shareholders of the Bank or the Company.
 
     Federal law and regulations, including provisions added by the Federal
Deposit Insurance Corporation Improvement Act of 1991 ("FDICIA") and regulations
promulgated thereunder, establish supervisory standards applicable to the
lending activities of the Bank, including internal controls, credit
underwriting, loan documentation, and loan-to-value ratios for loans secured by
real property. The Bank intends to comply with these requirements, and in some
cases may apply more restrictive standards.
 
     The following references to statutes and regulations are intended to
summarize certain government regulation of the business of the Company and the
Bank, and are qualified by reference to the text of such statutes and
regulations. Any change in government regulation may have a material effect on
the business of the Company and the Bank.
 
THE COMPANY
 
     General. The Company has received the approval of the Commissioner, and on
October 15, 1997, subject to the expiration of a 15 day statutory waiting
period, received the approval of the Federal Reserve Board, to acquire all of
the capital stock to be issued by the Bank in connection with its organization.
When the Company becomes the sole shareholder of the Bank, the Company will be a
bank holding company and, as such, will be required to register with, and will
be subject to regulation by, the Federal Reserve Board under the Bank Holding
Company Act, as amended (the "BHCA"). Under the BHCA, the Company will be
subject to periodic examination by the Federal Reserve Board and will be
required to file periodic reports of its operations and such additional
information as the Federal Reserve Board may require.
 
     In accordance with Federal Reserve Board policy, the Company will be
expected to act as a source of financial strength to the Bank and to commit
resources to support the Bank in circumstances where the Company might not do so
absent such policy. In addition, in certain circumstances a Michigan state bank
having impaired capital may be required by the Commissioner either to restore
the bank's capital by a special assessment upon its shareholders, or to initiate
the liquidation of the bank.
 
     Any capital loans by a bank holding company to a subsidiary bank are
subordinate in right of payment to deposits and to certain other indebtedness of
such subsidiary bank. In the event of a bank holding company's bankruptcy, any
commitment by the bank holding company to a federal bank regulatory agency to
maintain the capital of a subsidiary bank will be assumed by the bankruptcy
trustee and entitled to a priority of payment. This priority would also apply to
guarantees of capital plans under FDICIA.
 
     Investments and Activities. Under the BHCA, bank holding companies are
prohibited, with certain limited exceptions, from engaging in activities other
than those of banking or of managing or controlling banks and from acquiring or
retaining direct or indirect ownership or control of voting shares or assets of
any
 
                                       22
   23
 
company which is not a bank or bank holding company, other than subsidiary
companies furnishing services to or performing services for its subsidiaries,
and other subsidiaries engaged in activities which the Federal Reserve Board
determines to be so closely related to banking or managing or controlling banks
as to be a proper incident thereto. Since September, 1995, the BHCA has
permitted the Federal Reserve Board under specified circumstances to approve the
acquisition, by a bank holding company located in one state, of a bank or bank
holding company located in another state, without regard to any prohibition
contained in state law. See "Recent Regulatory Developments."
 
     In general, any direct or indirect acquisition by the Company of any voting
shares of any bank which would result in the Company's direct or indirect
ownership or control of more than 5% of any class of voting shares of such bank,
and any merger or consolidation of the Company with another bank holding
company, will require the prior written approval of the Federal Reserve Board
under the BHCA. In acting on such applications, the Federal Reserve Board must
consider various statutory factors, including among others, the effect of the
proposed transaction on competition in relevant geographic and product markets,
the convenience and needs of the communities to be served, and each party's
financial condition, managerial resources, and record of performance under the
Community Reinvestment Act.
 
     The merger or consolidation of an existing bank subsidiary of the Company
with another bank, or the acquisition by such a subsidiary of assets of another
bank, or the assumption of liability by such a subsidiary to pay any deposits in
another bank, will require the prior written approval of the responsible federal
depository institution regulatory agency under the Bank Merger Act, based upon a
consideration of statutory factors similar to those outlined above with respect
to the BHCA. In addition, in certain such cases an application to, and the prior
approval of, the Federal Reserve Board under the BHCA and/or the Commissioner
under the Michigan Banking Code, may be required.
 
     With certain limited exceptions, the BHCA prohibits bank holding companies
from acquiring direct or indirect ownership or control of voting shares or
assets of any company other than a bank, unless the company involved is engaged
solely in one or more activities which the Federal Reserve Board has determined
to be so closely related to banking or managing or controlling banks as to be a
proper incident thereto. Under current Federal Reserve Board regulations, such
permissible non-bank activities include such things as mortgage banking,
equipment leasing, securities brokerage, and consumer and commercial finance
company operations. As a result of recent amendments to the BHCA, many types of
such acquisitions may be effected by those bank holding companies which satisfy
certain statutory criteria concerning management, capitalization, and regulatory
compliance, if written notice is given to the Federal Reserve Board within 10
business days after the transaction. In other cases, prior written notice to the
Federal Reserve Board will be required.
 
     In evaluating a written notice of such an acquisition, the Federal Reserve
Board will consider various factors, including among others the financial and
managerial resources of the notifying bank holding company, and the relative
public benefits and adverse effects which may be expected to result from the
performance of the activity by an affiliate of such company. The Federal Reserve
Board may apply different standards to activities proposed to be commenced de
novo and activities commenced by acquisition, in whole or in part, of a going
concern. The required notice period may be extended by the Federal Reserve Board
under certain circumstances, including a notice for acquisition of a company
engaged in activities not previously approved by regulation of the Federal
Reserve Board. If such a proposed acquisition is not disapproved or subjected to
conditions by the Federal Reserve Board within the applicable notice period, it
is deemed approved by the Federal Reserve Board.
 
     Capital Requirements. The Federal Reserve Board uses capital adequacy
guidelines in its examination and regulation of bank holding companies. If
capital falls below minimum guidelines, a bank holding company may, among other
things, be denied approval to acquire or establish additional banks or non-bank
businesses.
 
     The Federal Reserve Board's capital guidelines establish the following
minimum regulatory capital requirements for bank holding companies: (i) a
leverage capital requirement expressed as a percentage of total assets, (ii) a
risk-based requirement expressed as a percentage of total risk-weighted assets,
and (iii) a Tier 1 leverage requirement expressed as a percentage of total
assets. The leverage capital requirement consists of a minimum ratio of total
capital to total assets of 6%, with an expressed expectation that banking
organizations
 
                                       23
   24
 
generally should operate above such minimum level. The risk-based requirement
consists of a minimum ratio of total capital to total risk-weighted assets of
8%, of which at least one-half must be Tier 1 capital (which consists
principally of shareholders' equity). The Tier 1 leverage requirement consists
of a minimum ratio of Tier 1 capital to total assets of 3% for the most highly
rated companies, with minimum requirements of 4% to 5% for all others. As the
Company must meet these capital guidelines, it is possible for these
requirements to limit future growth.
 
     The risk-based and leverage standards presently used by the Federal Reserve
Board are minimum requirements, and higher capital levels will be required if
warranted by the particular circumstances or risk profiles of individual banking
organizations. Further, any banking organization experiencing or anticipating
significant growth would be expected to maintain capital ratios, including
tangible capital positions (i.e., Tier 1 capital less all intangible assets),
well above the minimum levels.
 
     The Federal Reserve Board's regulations provide that the foregoing capital
requirements will generally be applied on a bank-only (rather than a
consolidated) basis in the case of a bank holding company with less than $150
million in total consolidated assets. Nonetheless, on a pro forma basis,
assuming the issuance and sale by the Company of the 1,300,000 shares of Common
Stock offered hereby at $10.00 per share, the Company's leverage capital ratio,
risk-based capital ratio and Tier 1 leverage ratio, in each case as calculated
on a consolidated basis under the Federal Reserve Board's capital guidelines,
would exceed the minimum requirements.
 
     FDICIA requires the federal bank regulatory agencies biennially to review
risk-based capital standards to ensure that they adequately address interest
rate risk, concentration of credit risk and risks from non-traditional
activities and, since adoption of the Riegle Community Development and
Regulatory Improvement Act of 1994 (the "Riegle Act"), to do so taking into
account the size and activities of depository institutions and the avoidance of
undue reporting burdens. See "Recent Regulatory Developments." In 1995, the
agencies adopted regulations requiring as part of the assessment of an
institution's capital adequacy the consideration of: (i) identified
concentrations of credit risks, (ii) the exposure of the institution to a
decline in the value of its capital due to changes in interest rates, and (iii)
the application of revised conversion factors and netting rules on the
institution's potential future exposure from derivative transactions. In
addition, the agencies in September 1996, adopted amendments to their respective
risk based capital standards to require banks and bank holding companies having
significant exposure to market risk arising from, among other things, trading of
debt instruments, (i) to measure that risk using an internal value-at-risk model
conforming to the parameters established in the agencies' standards, and (ii) to
maintain a commensurate amount of additional capital to reflect such risk. The
new rules were adopted effective January 1, 1997, with compliance mandatory from
and after January 1, 1998.
 
     Dividends. The Company is a corporation separate and distinct from the
Bank. Most of the Company's revenues will be received by it in the form of
dividends or interest paid by the Bank. The Bank is subject to statutory
restrictions on its ability to pay dividends. See "The Bank -- Dividends." The
Federal Reserve Board has issued a policy statement on the payment of cash
dividends by bank holding companies. In the policy statement, the Federal
Reserve Board expressed its view that a bank holding company should not pay cash
dividends exceeding its net income or which could only be funded in ways that
weakened the bank holding company's financial health, such as by borrowing.
Additionally, the Federal Reserve Board possesses enforcement powers over bank
holding companies and their non-bank subsidiaries to prevent or remedy actions
that represent unsafe or unsound practices or violations of applicable statutes
and regulations. Among these powers is the ability in appropriate cases to
proscribe the payment of dividends by banks and bank holding companies. Similar
enforcement powers over the Bank are possessed by the FDIC. It is also unlawful
for any insured depository institution to pay a dividend at a time when it is in
default of payment of any assessment to the FDIC. The "prompt corrective action"
provisions of FDICIA impose further restrictions on the payment of dividends by
insured banks which fail to meet specified capital levels and, in some cases,
their parent bank holding companies.
 
                                       24
   25
 
     In addition to the restrictions on dividends imposed by the Federal Reserve
Board, the MBCA imposes certain restrictions on the declaration and payment of
dividends by Michigan corporations such as the Company. See "Description of
Capital Stock -- Common Stock-Dividend Rights."
 
THE BANK
 
     General. Upon completion of its organization, the Bank will be a Michigan
banking corporation, and its deposit accounts will be insured by the Bank
Insurance Fund (the "BIF") of the FDIC. As a BIF-insured, Michigan chartered
bank, the Bank will be subject to the examination, supervision, reporting and
enforcement jurisdiction of the Commissioner, as the chartering authority for
Michigan banks, and the FDIC, as administrator of the BIF. These agencies and
federal and state law extensively regulate various aspects of the banking
business including, among other things, permissible types and amounts of loans,
investments and other activities, capital adequacy, branching, interest rates on
loans and on deposits, the maintenance of non-interest bearing reserves on
deposit accounts, and the safety and soundness of banking practices.
 
     Deposit Insurance. As an FDIC-insured institution, the Bank will be
required to pay deposit insurance premium assessments to the FDIC. Pursuant to
FDICIA, the FDIC adopted a risk-based assessment system under which all insured
depository institutions are placed into one of nine categories and assessed
insurance premiums based upon their level of capital and supervisory evaluation.
Institutions classified as well-capitalized (as defined by the FDIC) and not
exhibiting financial, operational or compliance weaknesses, pay the lowest
premium while institutions that are less than well-capitalized (as defined by
the FDIC) and exhibit such weaknesses in a moderately severe to unsatisfactory
degree pay the highest premium. Risk classification of all insured institutions
is made by the FDIC for each semi-annual assessment period.
 
     The Federal Deposit Insurance Act ("FDIA") requires the FDIC to establish
semi-annual assessment rates so as to maintain the ratio of the Deposit
Insurance Fund to total estimated insured deposits at not less than 1.25%.
Accordingly, the FDIC has established the schedule of BIF insurance assessments
for the first semi-annual assessment period of 1997, ranging from 0% of deposits
for institutions in the highest category to .27% of deposits for institutions in
the lowest category.
 
     The FDIC may terminate the deposit insurance of any insured depository
institution if the FDIC determines, after a hearing, that the institution or its
directors have engaged or are engaging in unsafe or unsound practices, or have
violated any applicable law, regulation, order, or any condition imposed in
writing by, or written agreement with, the FDIC, or if the institution is in an
unsafe or unsound condition to continue operations. The FDIC may also suspend
deposit insurance temporarily during the hearing process for a permanent
termination of insurance if the institution has no tangible capital.
 
     Capital Requirements. The FDIC has established the following minimum
capital standards for state-chartered, FDIC-insured non-member banks, such as
the Bank: a leverage requirement consisting of a minimum ratio of Tier 1 capital
to total assets of 3% for the most highly-rated banks with minimum requirements
of 4% to 5% for all others, and a risk-based capital requirement consisting of a
minimum ratio of total capital to total risk-weighted assets of 8%, at least
one-half of which must be Tier 1 capital. Tier 1 capital consists principally of
shareholders' equity. In addition, the FDIC has adopted requirements for each
state-chartered, non-member bank having trading activity as shown on its most
recent Consolidated Report of Condition and Income ("Call Report") in an amount
equal to 10% or more of its total assets, (i) to measure its market risk using
an internal value-at-risk model conforming to the FDIC's capital standards, and
(ii) to maintain a commensurate amount of additional capital to reflect such
risk. This regulation was adopted effective January 1, 1997, with compliance
mandatory on and after January 1, 1998.
 
     The capital requirements described above are minimum requirements. Higher
capital levels will be required if warranted by the particular circumstances or
risk profiles of individual institutions. As a condition to the regulatory
approvals of the Bank's formation, the Bank will be required to have an initial
capitalization sufficient to provide a ratio of Tier 1 capital to total
estimated assets of at least 8% at the end of the third year of operation.
 
                                       25
   26
 
     FDIA establishes five capital categories, and the federal depository
institution regulators, as directed by FDIA, have adopted, subject to certain
exceptions, the following minimum requirements for each of such categories:
 


                                            TOTAL          TIER 1
                                         RISK-BASED      RISK-BASED                LEVERAGE
                                        CAPITAL RATIO   CAPITAL RATIO                RATIO
                                        -------------   -------------              --------
                                                               
Well capitalized......................  10% or above    6% or above     5% or above
Adequately capitalized................  8% or above     4% or above     4% or above
Undercapitalized......................  Less than 8%    Less than 4%    Less than 4%
Significantly undercapitalized........  Less than 6%    Less than 3%    Less than 3%
Critically undercapitalized...........  --              --              A ratio of tangible equity to
                                                                        total assets of 2% or less

 
     Subject to certain exceptions, these capital ratios are generally
determined on the basis of Call Reports submitted by each depository institution
and the reports of examination by each institution's appropriate federal
depository institution regulatory agency.
 
     Among other things, FDIA requires the federal depository institution
regulators to take prompt corrective action in respect of depository
institutions that do not meet minimum capital requirements. The scope and degree
of regulatory intervention is linked to the capital category to which a
depository institution is assigned.
 
     Depending upon the capital category to which an institution is assigned,
the regulators' corrective powers include: requiring the submission of a capital
restoration plan; placing limits on asset growth and restrictions on activities;
requiring the institution to issue additional capital stock (including
additional voting stock) or to be acquired; restricting transactions with
affiliates; restricting the interest rate the institution may pay on deposits;
ordering a new election of directors of the institution; requiring that senior
executive officers or directors be dismissed; prohibiting the institution from
accepting deposits from correspondent banks; requiring the institution to divest
certain subsidiaries; prohibiting the payment of principal or interest on
subordinated debt; and ultimately, appointing a receiver for the institution.
 
     In general, a depository institution may be reclassified to a lower
category than is indicated by its capital position if the appropriate federal
depository institution regulatory agency determines the institution to be
otherwise in an unsafe or unsound condition or to be engaged in an unsafe or
unsound practice. This could include a failure by the institution, following
receipt of a less-than-satisfactory rating on its most recent examination
report, to correct the deficiency.
 
     Dividends. As a banking corporation organized under Michigan law, the Bank
will be restricted as to the maximum amount of dividends it may pay on its
Common Stock. The Bank may not pay dividends except out of net profits after
deducting its losses and bad debts. The Bank may not declare or pay a dividend
unless it will have a surplus amounting to at least 20% of its capital after the
payment of the dividend. If the Bank has a surplus less than the amount of its
capital it may not declare or pay any dividend until an amount equal to at least
10% of net profits for the preceding half year (in the case of quarterly or
semi-annual dividends) or full year (in the case of annual dividends) has been
transferred to surplus. The Bank may, with the approval of the Commissioner, by
vote of shareholders owning two-thirds of the stock eligible to vote increase
its capital stock by a declaration of a stock dividend, provided that after the
increase its surplus equals at least 20% of its capital stock, as increased. The
Bank may not declare or pay any dividend until the cumulative dividends on
preferred stock (should any such stock be issued and outstanding) have been paid
in full. The Bank has no present plans to issue preferred stock.
 
     FDIA generally prohibits a depository institution from making any capital
distribution (including payment of a dividend) or paying any management fee to
its holding company if the depository institution would thereafter be
undercapitalized. The FDIC may prevent an insured bank from paying dividends if
the bank is in default of payment of any assessment due to the FDIC. In
addition, payment of dividends by a bank may be prevented by the applicable
federal regulatory authority if such payment is determined, by reason of the
financial condition of such bank, to be an unsafe and unsound banking practice.
The Federal Reserve
 
                                       26
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Board has issued a policy statement providing that bank holding companies and
insured banks should generally only pay dividends out of current operating
earnings.
 
     Insider Transactions. The Bank is subject to certain restrictions imposed
by the Federal Reserve Act on any extensions of credit to the Company or its
subsidiaries, on investments in the stock or other securities of the Company or
its subsidiaries and the acceptance of the stock or other securities of the
Company or its subsidiaries as collateral for loans to any person. Certain
limitations and reporting requirements are also placed on extensions of credit
by the Bank to its directors and officers, to directors and officers of the
Company and its subsidiaries, to principal shareholders of the Company, and to
"related interests" of such directors, officers and principal shareholders. In
addition, such legislation and regulations may affect the terms upon which any
person becoming a director or officer of the Company or one of its subsidiaries
or a principal shareholder of the Company may obtain credit from banks with
which the Bank maintains a correspondent relationship.
 
     Safety and Soundness Standards. On July 10, 1995, the FDIC, the Office of
Thrift Supervision, the Federal Reserve Board and the Office of the Comptroller
of the Currency published final guidelines implementing the FDICIA requirement
that the federal banking agencies establish operational and managerial standards
to promote the safety and soundness of federally insured depository
institutions. The guidelines, which took effect on August 9, 1995, establish
standards for internal controls, information systems, internal audit systems,
loan documentation, credit underwriting, interest rate exposure, asset growth,
and compensation, fees and benefits. In general, the guidelines prescribe the
goals to be achieved in each area, and each institution will be responsible for
establishing its own procedures to achieve those goals. If an institution fails
to comply with any of the standards set forth in the guidelines, the
institution's primary federal regulator may require the institution to submit a
plan for achieving and maintaining compliance. The preamble to the guidelines
states that the agencies expect to require a compliance plan from an institution
whose failure to meet one or more of the standards is of such severity that it
could threaten the safe and sound operation of the institution. Failure to
submit an acceptable compliance plan, or failure to adhere to a compliance plan
that has been accepted by the appropriate regulator, would constitute grounds
for further enforcement action. Effective October 1, 1996, the agencies expanded
the guidelines to establish asset quality and earnings standards. As before, the
new guidelines make each depository institution responsible for establishing its
own procedures to meet such goals.
 
     State Bank Activities. Under FDICIA, as implemented by final regulations
adopted by the FDIC, FDIC-insured state banks are prohibited, subject to certain
exceptions, from making or retaining equity investments of a type, or in an
amount, that are not permissible for a national bank. FDICIA, as implemented by
FDIC regulations, also prohibits FDIC-insured state banks and their
subsidiaries, subject to certain exceptions, from engaging as principal in any
activity that is not permitted for a national bank or its subsidiary,
respectively, unless the bank meets, and continues to meet, its minimum
regulatory capital requirements and the FDIC determines the activity would not
pose a significant risk to the deposit insurance fund of which the bank is a
member. Impermissible investments and activities must be divested or
discontinued within certain time frames set by the FDIC in accordance with
FDICIA. These restrictions are not currently expected to have a material impact
on the operations of the Bank.
 
     Consumer Banking. The Bank's business will include making a variety of
types of loans to individuals. In making these loans, the Bank will be subject
to state usury and regulatory laws and to various federal statutes, such as the
Equal Credit Opportunity Act, Fair Credit Reporting Act, Truth in Lending Act,
Real Estate Settlement Procedures Act, and Home Mortgage Disclosure Act, and the
regulations promulgated thereunder, which prohibit discrimination, specify
disclosures to be made to borrowers regarding credit and settlement costs, and
regulate the mortgage loan servicing activities of the Bank, including the
maintenance and operation of escrow accounts and the transfer of mortgage loan
servicing. The Riegle Act imposed new escrow requirements on depository and
non-depository mortgage lenders and servicers under the National Flood Insurance
Program. See "Recent Regulatory Developments." In receiving deposits, the Bank
will be subject to extensive regulation under state and federal law and
regulations, including the Truth in Savings Act, the Expedited Funds
Availability Act, the Bank Secrecy Act, the Electronic Funds Transfer Act, and
the FDIA. Violation of these laws could result in the imposition of significant
damages and fines upon the Bank, its directors and officers.
 
                                       27
   28
 
RECENT REGULATORY DEVELOPMENTS
 
     In 1994, the Congress enacted two major pieces of banking legislation, the
Riegle Act and the Riegle-Neal Interstate Banking and Branching Efficiency Act
of 1994 (the "Riegle-Neal Act"). The Riegle Act addressed such varied issues as
the promotion of economic revitalization of defined urban and rural "qualified
distressed communities" through special purpose "Community Development Financial
Institutions," the expansion of consumer protection with respect to certain
loans secured by a consumer's home and reverse mortgages, and reductions in
compliance burdens regarding Currency Transaction Reports, in addition to reform
of the National Flood Insurance Program, the promotion of a secondary market for
small business loans and leases, and mandating specific changes to reduce
regulatory impositions on depository institutions and holding companies.
 
     The Riegle-Neal Act substantially changed the geographic constraints
applicable to the banking industry. Effective September 29, 1995, the
Riegle-Neal Act allows bank holding companies to acquire banks located in any
state in the United States without regard to geographic restrictions or
reciprocity requirements imposed by state law, but subject to certain
conditions, including limitations on the aggregate amount of deposits that may
be held by the acquiring holding company and all of its insured depository
institution affiliates. Effective June 1, 1997 (or earlier if expressly
authorized by applicable state law), the Riegle-Neal Act allows banks to
establish interstate branch networks through acquisitions of other banks,
subject to certain conditions, including certain limitations on the aggregate
amount of deposits that may be held by the surviving bank and all of its insured
depository institution affiliates. The establishment of de novo interstate
branches or the acquisition of individual branches of a bank in another state
(rather than the acquisition of an out-of-state bank in its entirety) is allowed
by the Riegle-Neal Act only if specifically authorized by state law. The
legislation allows individual states to "opt-out" of certain provisions of the
Riegle-Neal Act by enacting appropriate legislation prior to June 1, 1997.
 
     In November, 1995, Michigan exercised its right to opt-in early to the
Riegle-Neal Act, and permitted non-U.S. banks to establish branch offices in
Michigan. As further amended, effective October 21, 1996, and June 30, 1997, the
Michigan Banking Code now permits, in appropriate circumstances, (a) with the
approval of the Commissioner, (i) the acquisition of all or substantially all of
the assets of a Michigan-chartered bank by an FDIC-insured bank, savings bank,
or savings and loan association located in another state, (ii) the acquisition
by a Michigan-chartered bank of all or substantially all of the assets of an
FDIC-insured bank, savings bank or savings and loan association located in
another state, (iii) the consolidation of one or more Michigan-chartered banks
and FDIC-insured banks, savings banks or savings and loan associations located
in other states having laws permitting such consolidation, with the resulting
organization chartered by Michigan, (iv) the establishment by a foreign bank,
which has not previously designated any other state as its home state under the
International Banking Act of 1978, of branches located in Michigan, and (v) the
organization of a branch in Michigan by FDIC-insured banks located in other
states, the District of Columbia or U.S. territories or protectorates having
laws permitting a Michigan-chartered bank to establish a branch in such
jurisdiction, and (b) upon written notice to the Commissioner, (i) the
acquisition by a Michigan-chartered bank of one or more branches (not comprising
all or substantially all of the assets) of an FDIC-insured bank, savings bank or
savings and loan association located in another state, the District of Columbia,
or a U.S. territory or protectorate, (ii) the establishment by
Michigan-chartered banks of branches located in other states, the District of
Columbia, or U.S. territories or protectorates, and (iii) the consolidation of
one or more Michigan-chartered banks and FDIC-insured banks, savings banks or
savings and loan associations located in other states, with the resulting
organization chartered by one of such other states, and (c) the sale by a
Michigan-chartered bank of one or more of its branches (not comprising all or
substantially all of its assets) to an FDIC-insured bank, savings bank or
savings and loan association located in a state in which a Michigan-chartered
bank could purchase one or more branches of the purchasing entity. The amending
legislation also expanded the regulatory authority of the Commissioner and made
certain other changes.
 
     The Michigan Legislature has adopted, with effect from March 28, 1996, the
Credit Reform Act. This statute, together with amendments to other related laws,
permits regulated lenders, indirectly including Michigan-chartered banks, to
charge and collect higher rates of interest and increased fees on certain types
of loans to individuals and businesses. The laws prohibit "excessive fees and
charges," and authorize
 
                                       28
   29
 
governmental authorities and borrowers to bring actions for injunctive relief
and statutory and actual damages for violations by lenders. The statutes
specifically authorize class actions, and also civil money penalties for knowing
and willful, or persistent violations.
 
     FDIC regulations which became effective April 1, 1996, impose limitations
(and in certain cases, prohibitions) on (i) certain "golden parachute" severance
payments by troubled depository institutions and their affiliated holding
companies to institution-affiliated parties (primarily directors, officers,
employees, or principal shareholders of the institution), and (ii) certain
indemnification payments by a depository institution or its affiliated holding
company, regardless of financial condition, to institution-affiliated parties.
The FDIC regulations impose limitations on indemnification payments which could
restrict, in certain circumstances, payments by the Company or the Bank to their
respective directors or officers otherwise permitted under the MBCA or the
Michigan Banking Code, respectively. See "Description of Capital Stock --
Indemnification of Directors and Officers."
 
     The Omnibus Consolidated Appropriations Act, 1997 ("OCCA"), was enacted
September 30, 1996. It amended many of the principal federal laws regulating
banks and bank holding companies. As part of the projected conversion or closure
of all thrift institutions in the U.S., OCCA modified existing laws (a) to
impose a special, one-time assessment on all deposits insured by the Savings
Association Insurance Fund ("SAIF") of the FDIC to bring the SAIF reserves to
the statutory minimum ratio of 1.25% of all SAIF-insured deposits, (b) to permit
the Financing Corporation to impose (in the same manner as regular FDIC
insurance assessments) assessments upon commercial banks to fund repayment of
its bonds which had been issued to pay for losses resulting from widespread
failures of thrift institutions during the 1980's, (c) to prohibit shifting
deposits from SAIF insurance to BIF insurance, and (d) to merge, prospectively,
the BIF and SAIF into a single Deposit Insurance Fund ("DIF"). The merger of the
funds will occur on January 1, 1999, if no insured depository institution
remains a savings association on that date. There can be no assurance whether or
when the merger of the BIF and SAIF will in fact occur.
 
     OCCA also amended the BHCA (a) to eliminate the requirement of prior
written notice to the Federal Reserve Board by well-capitalized and well-managed
bank holding companies meeting certain statutory criteria wishing to engage de
novo (or in certain cases through acquisition) in a non-banking activity already
permitted by order or regulation of the Federal Reserve Board, (b) to shorten to
12 business days the prior written notice to the Federal Reserve Board required
from well-managed and well-capitalized bank holding companies meeting such
criteria for other acquisitions of non-banking companies engaged in non-banking
activities so permitted, and (c) to eliminate the opportunity for a hearing on
applications to the Federal Reserve Board for permission to engage in
non-banking activities (other than the acquisition of a savings association).
 
     Among the other changes made by OCCA, the statute (a) increased the number
of banks exempted from compliance with the record-keeping and reporting
requirements of the Home Mortgage Disclosure Act and eligible for an 18-month
cycle of regulatory examinations by increasing the total assets cut-off in each
case, (b) simplified the disclosure requirements for residential mortgage loans
by harmonizing the requirements of the Truth-in-Lending Act and Real Estate
Settlement Procedures Act, (c) substantially re-wrote the Fair Credit Reporting
Act, and (d) expanded the authority of the Federal Reserve Board under the
Consumer Leasing Act and directed the Board to issue model disclosure forms for
use in leasing personal property.
 
                          DESCRIPTION OF CAPITAL STOCK
 
     The Company's authorized capital stock consists of 9,000,000 shares of
Common Stock and 1,000,000 shares of Preferred Stock. As of the date of this
Prospectus, there is one share of Common Stock issued and outstanding. No shares
of Preferred Stock have been issued by the Company.
 
     Michigan law allows the Company's Board of Directors to issue additional
shares of stock up to the total amount of Common Stock and Preferred Stock
authorized without obtaining the prior approval of the shareholders. Issuances
of Preferred Stock, if any, will not be offered to members of the Board of
Directors except on the same terms as are offered to the public, unless approved
by a majority of the Company's
 
                                       29
   30
 
independent directors who do not have an interest in the transaction and who
have had access, at the Company's expense, to the Company's legal counsel or
independent legal counsel.
 
PREFERRED STOCK
 
     The Board of Directors of the Company is authorized to issue Preferred
Stock, in one or more series, from time to time, with such voting powers, full
or limited but not to exceed one vote per share, or without voting powers, and
with such designations, preferences and relative, participating, optional or
other special rights, and qualifications, limitations or restrictions thereof,
as may be provided in the resolution or resolutions adopted by the Board of
Directors. The authority of the Board of Directors includes, but is not limited
to, the determination or fixing of the following with respect to shares of such
class or any series thereof: (i) the number of shares and designation of such
series; (ii) the dividend rate and whether dividends are to be cumulative; (iii)
whether shares are to be redeemable, and, if so, whether redeemable for cash,
property or rights; (iv) the rights to which the holders of shares shall be
entitled, and the preferences, if any, over any other series; (v) whether the
shares shall be subject to the operation of a purchase, retirement or sinking
fund, and, if so, upon what conditions; (vi) whether the shares shall be
convertible into or exchangeable for shares of any other class or of any other
series of any class of capital stock and the terms and conditions of such
conversion or exchange; (vii) the voting powers, full or limited, if any, of the
shares; (viii) whether the issuance of any additional shares, or of any shares
of any other series, shall be subject to restrictions as to issuance, or as to
the powers, preferences or rights of any such other series; and (ix) any other
preferences, privileges and powers and relative, participating, optional or
other special rights and qualifications, limitations or restrictions.
 
COMMON STOCK
 
  Dividend Rights
 
     Subject to any prior rights of any holders of Preferred Stock then
outstanding, the holders of the Common Stock will be entitled to dividends when,
as and if declared by the Company's Board of Directors out of funds legally
available therefor. Under Michigan law, dividends may be legally declared or
paid only if after the distribution the corporation can pay its debts as they
come due in the usual course of business and the corporation's total assets
equal or exceed the sum of its liabilities plus the amount that would be needed
to satisfy the preferential rights upon dissolution of any holders of preferred
stock then outstanding whose preferential rights are superior to those receiving
the distribution.
 
     Funds for the payment of dividends by the Company are expected to be
obtained primarily from dividends of the Bank. There can be no assurance that
the Company will have funds available for dividends, or that if funds are
available, that dividends will be declared by the Company's Board of Directors.
As the Bank is not expected to be profitable during its start up period, the
Company does not expect to be in a position to declare dividends at any time in
the foreseeable future.
 
  Voting Rights
 
     Subject to the rights, if any, of holders of shares of Preferred Stock then
outstanding, all voting rights are vested in the holders of shares of Common
Stock. Each share of Common Stock entitles the holder thereof to one vote on all
matters, including the election of directors. Shareholders of the Company do not
have cumulative voting rights.
 
  Preemptive Rights
 
     Holders of Common Stock do not have preemptive rights.
 
  Liquidation Rights
 
     Subject to any rights of any Preferred Stock then outstanding, holders of
Common Stock are entitled to share on a pro rata basis in the net assets of the
Company which remain after satisfaction of all liabilities.
 
                                       30
   31
 
  Transfer Agent
 
     State Street Bank & Trust Company of Boston, Massachusetts, serves as the
transfer agent of the Company's Common Stock.
 
DESCRIPTION OF CERTAIN CHARTER PROVISIONS
 
     The following provisions of the Company's Articles of Incorporation may
delay, defer, prevent, or make it more difficult for a person to acquire the
Company or to change control of the Company's Board of Directors, thereby
reducing the Company's vulnerability to an unsolicited takeover attempt.
 
  Classification of the Board of Directors
 
     The Company's Articles of Incorporation provide for the Board of Directors
to be divided into three classes of directors, each class to be as nearly equal
in number as possible, and also provides that the number of directors shall be
fixed by majority of the Board at no fewer than six nor more than fifteen.
Pursuant to the Articles of Incorporation, the Company's directors have been
divided into three classes. Three Class I directors have been elected for a term
expiring at the 1998 annual meeting of shareholders, three Class II directors
have been elected for a term expiring at the 1999 annual meeting of
shareholders, and two Class III directors have been elected for a term expiring
at the 2000 annual meeting of shareholders (in each case, until their respective
successors are elected and qualified).
 
  Removal of Directors
 
     The MBCA provides that, unless the articles of incorporation otherwise
provide, shareholders may remove a director or the entire Board of Directors
with or without cause. The Company's Articles of Incorporation provide that a
director may be removed only for cause and only by the affirmative vote of the
holders of a majority of the voting power of all the shares of the Company
entitled to vote generally in the election of directors.
 
  Filling Vacancies on the Board of Directors
 
     The Company's Articles of Incorporation provide that a new director chosen
to fill a vacancy on the Board of Directors will serve for the remainder of the
full term of the class in which the vacancy occurred.
 
  Nominations of Director Candidates
 
     The Company's Articles of Incorporation include a provision governing
nominations of director candidates. Nominations for the election of directors
may be made by the Board of Directors, a nominating committee appointed by the
Board of Directors, or any shareholder entitled to vote for directors. In the
case of a shareholder nomination, the Articles of Incorporation provide certain
procedures that must be followed. A shareholder intending to nominate candidates
for election must deliver written notice containing certain specified
information to the Secretary of the Company at least sixty (60) days but not
more than ninety (90) days prior to the anniversary date of the immediately
preceding annual meeting of shareholders.
 
  Certain Shareholder Action
 
     The Company's Articles of Incorporation require that any shareholder action
must be taken at an annual or special meeting of shareholders, that any meeting
of shareholders must be called by the Board of Directors or the Chairman of the
Board, and, unless otherwise provided by law, prohibit shareholder action by
written consent. Shareholders of the Company are not permitted to call a special
meeting of shareholders or require that the Board call such a special meeting.
The MBCA permits shareholders holding 10% or more of all of the shares entitled
to vote at a meeting to request the Circuit Court of the County in which the
Company's principal place of business or registered office is located to order a
special meeting of shareholders for good cause shown.
 
                                       31
   32
 
  Increased Shareholders' Vote for Alteration, Amendment or Repeal of Article
Provisions
 
     The Company's Articles of Incorporation require the affirmative vote of the
holders of at least 66 2/3 percent of the voting stock of the Company entitled
to vote generally in the election of directors for the alteration, amendment or
repeal of, or the adoption of any provision inconsistent with the foregoing
provisions of the Company's Articles of Incorporation.
 
CERTAIN ANTI-TAKEOVER PROVISIONS
 
     Michigan Fair Price Act. Certain provisions of the MBCA establish a
statutory scheme similar to the supermajority and fair price provisions found in
many corporate charters (the "Fair Price Act"). The Fair Price Act provides that
a supermajority vote of 90 percent of the shareholders and no less than
two-thirds of the votes of noninterested shareholders must approve a "business
combination." The Fair Price Act defines a "business combination" to encompass
any merger, consolidation, share exchange, sale of assets, stock issue,
liquidation, or reclassification of securities involving an "interested
shareholder" or certain "affiliates." An "interested shareholder" is generally
any person who owns 10 percent or more of the outstanding voting shares of the
corporation. An "affiliate" is a person who directly or indirectly controls, is
controlled by, or is under common control with a specified person.
 
     The supermajority vote required by the Fair Price Act does not apply to
business combinations that satisfy certain conditions. These conditions include,
among others: (i) the purchase price to be paid for the shares of the
corporation in the business combination must be at least equal to the highest of
either (a) the market value of the shares or (b) the highest per share price
paid by the interested shareholder within the preceding two-year period or in
the transaction in which the shareholder became an interested shareholder,
whichever is higher; and (ii) once becoming an interested shareholder, the
person may not become the beneficial owner of any additional shares of the
corporation except as part of the transaction which resulted in the interested
shareholder becoming an interested shareholder or by virtue of proportionate
stock splits or stock dividends.
 
     The requirements of the Fair Price Act do not apply to business
combinations with an interested shareholder that the Board of Directors has
approved or exempted from the requirements of the Fair Price Act by resolution
prior to the time that the interested shareholder first became an interested
shareholder.
 
     Control Share Act. The MBCA regulates the acquisition of "control shares"
of large public Michigan corporations (the "Control Share Act"). Following
completion of the offering, the Control Share Act is expected to apply to the
Company and its shareholders.
 
     The Control Share Act establishes procedures governing "control share
acquisitions." A control share acquisition is defined as an acquisition of
shares by an acquiror which, when combined with other shares held by that person
or entity, would give the acquiror voting power, alone or as part of a group, at
or above any of the following thresholds: 20 percent, 33 1/3 percent or 50
percent. Under the Control Share Act, an acquiror may not vote "control shares"
unless the corporation's disinterested shareholders (defined to exclude the
acquiring person, officers of the target corporation, and directors of the
target corporation who are also employees of the corporation) vote to confer
voting rights on the control shares. The Control Share Act does not affect the
voting rights of shares owned by an acquiring person prior to the control share
acquisition.
 
     The Control Share Act entitles corporations to redeem control shares from
the acquiring person under certain circumstances. In other cases, the Control
Share Act confers dissenters' right upon all of the corporation's shareholders
except the acquiring person.
 
INDEMNIFICATION OF DIRECTORS AND OFFICERS
 
     The Company's Articles of Incorporation provide that the Company shall
indemnify its present and past directors, officers, and such other persons as
the Board of Directors may authorize, to the fullest extent permitted by law.
 
                                       32
   33
 
     The Company's Bylaws contain indemnification provisions concerning third
party actions as well as actions in the right of the Company. The Bylaws provide
that the Company shall indemnify any person who was or is a party or is
threatened to be made a party to any threatened, pending or completed action,
suit or proceeding, whether civil, criminal, administrative or investigative
(other than an action by or in the right of the Company) by reason of the fact
that he or she is or was a director or officer of the Company, or while serving
as such a director or officer, is or was serving at the request of the Company
as a director, officer, partner, trustee, employee or agent of another foreign
or domestic corporation, partnership, joint venture, trust or other enterprise,
whether for profit or not, against expenses (including attorney's fees),
judgments, penalties, fees and amounts paid in settlement actually and
reasonably incurred by him or her in connection with such action, suit or
proceeding if he or she acted in good faith and in a manner he or she reasonably
believed to be in or not opposed to the best interests of the Company or its
shareholders, and, with respect to any criminal action or proceeding, had no
reasonable cause to believe his or her conduct was unlawful.
 
     FDIC regulations impose limitations on indemnification payments which could
restrict, in certain circumstances, payments by the Company or the Bank to their
respective directors or officers otherwise permitted under the MBCA or the
Michigan Banking Code, respectively.
 
     With respect to derivative actions, the Bylaws provide that the Company
shall indemnify any person who was or is a party to or is threatened to be made
a party to any threatened, pending or completed action or suit by or in the
right of the Company to procure a judgment in its favor by reason of the fact
that he or she is or was a director or officer of the Company, or, while serving
as such a director or officer, is or was serving at the request of the Company
as a director, officer, partner, trustee, employee or agent of another foreign
or domestic corporation, partnership, joint venture, trust or other enterprise,
whether for profit or not, against expenses (including attorney's fees) and
amounts paid in settlement actually and reasonably incurred by him or her in
connection with the action or suit if he or she acted in good faith and in a
manner he or she reasonably believed to be in or not opposed to the best
interests of the Company or its shareholders. No indemnification is provided in
the Bylaws in respect of any claim, issue or matter in which such person has
been found liable to the Company except to the extent that a court of competent
jurisdiction determines upon application that, despite the adjudication of
liability but in view of all circumstances of the case, such person is fairly
and reasonably entitled to indemnity for such expenses which such court shall
deem proper.
 
     Insofar as indemnification for liabilities arising under the Securities Act
may be permitted to directors, officers and controlling persons of the Company
pursuant to the provisions discussed above or otherwise, the Company has been
advised that in the opinion of the Securities and Exchange Commission (the
"SEC") such indemnification is against public policy as expressed in the
Securities Act and is, therefore, unenforceable.
 
LIMITATION OF DIRECTOR LIABILITY
 
     The MBCA permits corporations to limit the personal liability of their
directors in certain circumstances. The Company's Articles of Incorporation
provide that a director of the Company shall not be personally liable to the
Company or its shareholders for monetary damages for breach of the director's
fiduciary duty. However, they do not eliminate or limit the liability of a
director for any breach of a duty, act or omission for which the elimination or
limitation of liability is not permitted by the MBCA, currently including,
without limitation, the following: (1) breach of the director's duty of loyalty
to the Company or its shareholders; (2) acts or omissions not in good faith or
that involve intentional misconduct or a knowing violation of law; (3) illegal
loans, distributions of dividends or assets, or stock purchases as described in
Section 551(1) of the MBCA; and (4) transactions from which the director derived
an improper personal benefit.
 
                        SHARES ELIGIBLE FOR FUTURE SALE
 
     As of September 1, 1997, the Company had one share of Common Stock
outstanding that was held by a member of the Board of Directors. Upon completion
of the offering, the Company expects to have 1,300,000 shares of its Common
Stock outstanding. The 1,300,000 shares of the Company's Common Stock sold in
the offering (plus any additional shares sold upon the Underwriter's exercise of
its over-allotment option) have been registered with the SEC under the
Securities Act and may generally be resold without registration under
 
                                       33
   34
 
the Securities Act unless they were acquired by directors, executive officers,
or other affiliates of the Company (collectively, "Affiliates"). Affiliates of
the Company may generally only sell shares of the Common Stock pursuant to Rule
144 under the Securities Act.
 
     In general, under Rule 144 as currently in effect, an affiliate (as defined
in Rule 144) of the Company may sell shares of Common Stock within any
three-month period in an amount limited to the greater of 1% of the outstanding
shares of the Company's Common Stock or the average weekly trading volume in the
Company's Common Stock during the four calendar weeks preceding such sale. Sales
under Rule 144 are also subject to certain manner-of-sale provisions, holding
periods for restricted shares, notice requirements, and the availability of
current public information about the Company.
 
     The Company, and the directors and officers of the Company, and Bruce
Visser, one of the organizers of the Bank (who are expected to hold an aggregate
of approximately 328,500 shares after the offering, excluding the shares that
Mr. Johnson and Mr. Kaminski have the right to acquire pursuant to options
granted to them under the Company's 1997 Employee Stock Option Plan), have
agreed, or will agree, that (a) they will not issue, offer for sale, sell,
transfer, grant options to purchase or otherwise dispose of any shares of Common
Stock without the prior written consent of the Underwriter, for a period of 150
days from the date of this Prospectus, except that (i) the Company may issue
shares upon the exercise of options under the Company's 1997 Employee Stock
Option Plan and (ii) the directors, officers and Mr. Visser may give Common
Stock owned by them to others who have agreed in writing to be bound by the same
agreement, and (b) they will not sell, transfer, assign, pledge, or hypothecate
any shares of Common Stock for a period of three months from the date of the
Prospectus acquired in connection with directions from the Company for issuer
directed securities.
 
     As of September 1, 1997, the Company had outstanding two options to
purchase an aggregate of 45,000 shares of its Common Stock at an exercise price
of $10 per share pursuant to the Company's 1997 Employee Stock Option Plan. Mr.
Johnson holds an option for 40,000 of these shares and Mr. Kaminski holds an
option for 5,000 of these shares.
 
     Prior to the offering, there has been no public trading market for the
Common Stock, and no predictions can be made as to the effect, if any, that
sales of shares or the availability of shares for sale will have on the
prevailing market price of the Common Stock after completion of the offering.
Nevertheless, sales of substantial amounts of Common Stock in the public market
could have an adverse effect on prevailing market prices.
 
                                  UNDERWRITING
 
     The Underwriter has agreed, subject to the terms and conditions of the
Underwriting Agreement, that it will purchase from the Company, on a firm
commitment basis, 1,300,000 shares of Common Stock. The Underwriting Agreement
provides that the obligations of the Underwriter thereunder are subject to
certain conditions and provides for the Company's payment of certain expenses
incurred in connection with the review of the underwriting arrangements for the
offering by the National Association of Securities Dealers, Inc. (the "NASD").
The Underwriter is obligated to purchase all 1,300,000 of the shares of Common
Stock offered hereby, excluding shares covered by the over-allotment option
granted to the Underwriter, if any are purchased.
 
     If the Underwriting Agreement is terminated, except in certain limited
cases, the Underwriting Agreement provides that the Company will reimburse the
Underwriter for all accountable out-of-pocket expenses incurred by it in
connection with the proposed purchase and sale of the Common Stock, up to a
maximum of $40,000. The Company has advanced $20,000 to the Underwriter in
connection with such expense reimbursement. The Underwriting Agreement provides
that in the event the accountable out-of-pocket expenses to be reimbursed upon
such termination total an amount less than $20,000, the Underwriter shall pay
such difference to the Company.
 
     The Company and the Underwriter have agreed that the Underwriter will
purchase the 1,300,000 shares of Common Stock offered hereunder at a price to
the public of $10.00 per share less underwriting discounts of
 
                                       34
   35
 
$.70 per share. However, the Underwriter has agreed to limit the underwriting
discounts to 1.5% of the public offering price ($.15 per share) with respect to
the first 328,500 shares sold to organizers of the Bank or their immediate
families. The Underwriter proposes to offer the Common Stock to selected dealers
who are members of the NASD at a price of $10.00 per share less a concession not
in excess of $.40 per share. The Underwriter may allow, and such dealers may
re-allow, concessions not in excess of $.10 per share to certain other brokers
and dealers. After the Common Stock is released for sale to the public, the
offering price and other selling terms may from time to time be varied by the
Underwriter.
 
     The Company, the directors and officers of the Company, and Bruce Visser,
an organizer of the Bank, have agreed to be subject to certain lock-up
restrictions as described above in "Shares Eligible for Future Sale."
 
     The Underwriter has informed the Company that the Underwriter does not
intend to make sales to any accounts over which the Underwriter exercises
discretionary authority.
 
     The Company has granted the Underwriter an option, exercisable within 30
days after the date of the offering, to purchase up to an additional 195,000
shares of Common Stock from the Company to cover over-allotments, if any, at the
same price per share as is to be paid by the Underwriter for the other shares
offered hereby. The Underwriter may purchase such shares only to cover
over-allotments, if any, in connection with the offering.
 
     The Underwriting Agreement contains indemnity provisions between the
Underwriter and the Company and the controlling persons thereof against certain
liabilities, including liabilities arising under the Securities Act. The Company
is generally obligated to indemnify the Underwriter and its controlling persons
in connection with losses or claims arising out of any untrue statement of a
material fact contained in this Prospectus or in related documents filed with
the Commission or with any state securities administrator, or any omission of
certain material facts from such documents.
 
     There has been no public trading market for the Common Stock. The price at
which the shares are being offered to the public was determined by negotiations
between the Company and the Underwriter. This price is not based upon earnings
or any history of operations and should not be construed as indicative of the
present or anticipated future value of the Common Stock. Several factors were
considered in determining the initial offering price of the Common Stock, among
them the size of the offering, the desire that the security being offered be
attractive to individuals and the Underwriter's experience in dealing with
initial public offerings for financial institutions.
 
                               LEGAL PROCEEDINGS
 
     Neither the Bank nor the Company is a party to any pending legal
proceedings or aware of any threatened legal proceedings where the Company or
the Bank may be exposed to any material loss.
 
                                 LEGAL MATTERS
 
     The legality of the Common Stock offered hereby will be passed upon for the
Company by Dickinson, Wright, Moon, Van Dusen & Freeman, Detroit, Michigan.
Honigman Miller Schwartz and Cohn, Detroit, Michigan, is acting as counsel for
the Underwriter in connection with certain legal matters relating to the shares
of Common Stock offered hereby.
 
                                    EXPERTS
 
     The financial statements of the Company included in this Prospectus have
been audited by Crowe, Chizek and Company LLP, independent public accountants,
as indicated in their report with respect thereto. Such financial statements and
their report have been included herein in reliance upon the authority of said
firm as experts in accounting and auditing.
 
                                       35
   36
 
                             ADDITIONAL INFORMATION
 
     The Company has filed with the SEC a Form SB-2 Registration Statement under
the Securities Act with respect to the Common Stock offered hereby. This
Prospectus does not contain all of the information set forth in the Registration
Statement, certain portions of which have been omitted as permitted by the Rules
and Regulations of the SEC. For further information pertaining to the shares of
Common Stock offered hereby and to the Company, reference is made to the
Registration Statement, including the Exhibits filed as a part thereof, copies
of which can be inspected at and copied at the Public Reference Section of the
SEC at 450 Fifth Street, N.W., Washington, D.C. 20549, and at the SEC's regional
offices located at Northwestern Atrium Center, 500 West Madison Street, Suite
1400, Chicago, Illinois 60661, and 7 World Trade Center, Suite 1300, New York
New York 10048. Copies of such materials can also be obtained on the SEC's Web
site at http://www.sec.gov and at prescribed rates by writing to the Public
Reference Section of the SEC at 450 Fifth Street, N.W., Washington, D.C. 20549.
 
                                       36
   37
 
                          MERCANTILE BANK CORPORATION
 
                              FINANCIAL STATEMENTS
                      (A COMPANY IN THE DEVELOPMENT STAGE)
 
                                     INDEX
 


                                                                PAGE NO.
                                                                --------
                                                             
Report of Independent Auditors..............................      F-2
Financial Statements
Balance Sheet...............................................      F-3
Statement of Shareholder's Equity...........................      F-4
Statement of Operations.....................................      F-5
Statement of Cash Flows.....................................      F-6
Notes to Financial Statements...............................      F-7

 
                                       F-1
   38
 
                               CROWE CHIZEK LOGO
 
                         REPORT OF INDEPENDENT AUDITORS
 
The Board of Directors
Mercantile Bank Corporation
Grand Rapids, Michigan
 
     We have audited the accompanying balance sheet of Mercantile Bank
Corporation (a Company in the development stage) as of July 21, 1997, and the
related statements of shareholder's equity, operations and cash flows for the
period from July 15, 1997 (inception) through July 21, 1997. These financial
statements are the responsibility of the Company's management. Our
responsibility is to express an opinion on these financial statements based on
our audit.
 
     We conducted our audit in accordance with generally accepted auditing
standards. Those standards require that we plan and perform our audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audit provides a reasonable basis for our opinion.
 
     In our opinion, the financial statements referred to above present fairly,
in all material respects, the financial position of Mercantile Bank Corporation
(a Company in the development stage) as of July 21, 1997, and the results of its
operations and cash flows for the period from July 15, 1997 (inception) through
July 21, 1997 in conformity with generally accepted accounting principles.
 
                                          CROWE, CHIZEK & COMPANY LLP
 
Grand Rapids, Michigan
July 22, 1997
 
                                       F-2
   39
 
                          MERCANTILE BANK CORPORATION
                      (A COMPANY IN THE DEVELOPMENT STAGE)
 
                                 BALANCE SHEET
                                 JULY 21, 1997
 
                                                             
ASSETS
  Cash......................................................    $232,940
  Organization costs........................................      25,560
  Deferred offering costs...................................      20,000
                                                                --------
                                                                $278,500
                                                                ========
LIABILITIES AND RETAINED EARNINGS
  Accounts payable..........................................    $ 27,732
  Related party notes payable (Note 2)......................     278,500
                                                                --------
                                                                 306,232
  Shareholder's equity
     Preferred stock, no par value; 1,000,000 shares
      authorized, none issued
     Common stock, no par value; 9,000,000 shares
      authorized, none issued
     Additional paid-in capital
     Deficit accumulated during the development stage.......     (27,732)
                                                                --------
       Total shareholder's equity...........................     (27,732)
                                                                --------
       Total liabilities and shareholder's equity...........    $278,500
                                                                ========


 
                 See accompanying notes to financial statements
 
                                       F-3
   40
 
                          MERCANTILE BANK CORPORATION
                      (A COMPANY IN THE DEVELOPMENT STAGE)
 
                       STATEMENT OF SHAREHOLDER'S EQUITY
             PERIOD FROM JULY 15, 1997 (INCEPTION) TO JULY 21, 1997
 


                                                                                  DEFICIT
                                                                                ACCUMULATED
                                                                   ADDITIONAL   DURING THE
                                             PREFERRED   COMMON     PAID-IN     DEVELOPMENT
                                               STOCK      STOCK     CAPITAL        STAGE       TOTAL
                                             ---------   ------    ----------   -----------    -----
                                                                               
Balance at July 15, 1997
Net loss...................................                                      $(27,732)    $(27,732)
                                                                                 --------     --------
Balance at July 21, 1997...................   $     0    $     0    $     0      $(27,732)    $(27,732)
                                              =======    =======    =======      ========     ========

 
                 See accompanying notes to financial statements
 
                                       F-4
   41
 
                          MERCANTILE BANK CORPORATION
                      (A COMPANY IN THE DEVELOPMENT STAGE)
 
                            STATEMENT OF OPERATIONS
             PERIOD FROM JULY 15, 1997 (INCEPTION) TO JULY 21, 1997
 
                                                             
Total operating income                                          $      0
Operating expenses
  Salaries and employee benefit.............................      24,817
  Other.....................................................       2,915
                                                                --------
                                                                  27,732
                                                                --------
Net loss....................................................    $(27,732)
                                                                ========


 
                 See accompanying notes to financial statements
 
                                       F-5
   42
 
                          MERCANTILE BANK CORPORATION
                      (A COMPANY IN THE DEVELOPMENT STAGE)
 
                            STATEMENT OF CASH FLOWS
             PERIOD FROM JULY 15, 1997 (INCEPTION) TO JULY 21, 1997
 
                                                           
CASH FLOWS FROM OPERATING ACTIVITIES FROM DEVELOPMENT STAGE
  OPERATIONS
  Net loss..................................................  $(27,732)
  Adjustments to reconcile net income from development stage
     operations to net cash provided by operating activities
     Increase in accounts payable...........................    27,732
                                                              --------
       Net cash from operating activities...................         0
CASH FLOWS FROM INVESTING ACTIVITIES
  Organizational costs......................................   (25,560)
                                                              --------
     Net cash from investing activities.....................   (25,560)
CASH FLOWS FROM FINANCING ACTIVITIES
  Proceeds from related party loans payable.................   278,500
  Deferred offering costs...................................   (20,000)
                                                              --------
     Net cash from financing activities.....................   258,500
                                                              --------
Net increase in cash........................................   232,940
Cash, beginning balance.....................................         0
                                                              --------
Cash, ending balance........................................  $232,940
                                                              ========


 
                 See accompanying notes to financial statements
 
                                       F-6
   43
 
                          MERCANTILE BANK CORPORATION
                      (A COMPANY IN THE DEVELOPMENT STAGE)
 
                         NOTES TO FINANCIAL STATEMENTS
                                 JULY 21, 1997
 
NOTE 1 -- SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
 
     Organization: Mercantile Bank Corporation (the "Company") was incorporated
on July 15, 1997 as a bank holding company to establish and operate a new bank,
Mercantile Bank of West Michigan (the "Bank") in Grand Rapids, Michigan. The
Company intends to raise a minimum of $12,023,000 in equity capital through the
sale of 1,300,000 shares of the Company's Common Stock at $10 per share, net of
underwriting discounts and offering costs. Proceeds from the offering will be
used to capitalize the Bank, lease facilities and provide working capital.
 
     Basis of Presentation: The preparation of financial statements in
conformity with generally accepted accounting principles requires management to
make estimates and assumptions that affect the amounts reported in the financial
statements and accompanying notes. Actual results could differ from those
estimates.
 
     Organization Costs: Organization costs represent incorporation costs,
salaries, legal and accounting costs and other costs relating to the
organization. Management anticipates that organization costs will approximate
$46,000 through commencement of operations.
 
     Income Taxes: The Company records income tax expense based on the amount of
taxes due on its tax return plus the change in deferred taxes computed based on
the future tax consequences of temporary differences between the carrying
amounts and tax bases of assets and liabilities, using enacted tax rates.
 
     Deferred Offering Costs: Deferred offering costs include legal, consulting
and accounting costs incurred in connection with the registration of the
Company's Common Stock. These costs will be charged against the stock proceeds
or, if the offering is not successful, charged to expense at that time.
 
NOTE 2 -- NOTES PAYABLE RELATED PARTIES
 
     Loans payable in the amount of $278,500 at 5% interest are outstanding to
members of the Board of Directors of the Company. Management intends to repay
the loans from the proceeds of the Common Stock offering and is required to
repay the loans on or before May 31, 1998.
 
NOTE 3 -- LEASE COMMITMENT
 
     The Company is currently in the process of negotiating a lease commitment
for a building located in downtown Grand Rapids for use as the Company's main
office. The terms of the lease are not yet finalized but management anticipates
that the initial term will be for 10 years at $150,000 per year with options to
extend for four successive five year periods. The lease also has an escalation
clause allowing for annual increases of the greater of 3% or the percentage
increase in the Consumer Price Index. The Company plans to make leasehold
improvements of approximately $650,000. The Company will be responsible for all
necessary utilities, etc.
 
NOTE 4 -- DATA PROCESSING AGREEMENT
 
     The Company is negotiating a contract with a data processing company to
outsource the Company's data processing. The terms of the contract are
anticipated to be for five years with continuing two year renewal periods. Data
processing services for the Company are expected to include Customer Information
Systems, Loan and Deposit processing, ACH processing, ATM processing, Asset
Liability Management software, Smart reports, etc.
 
                                       F-7
   44
 
NOTE 5 -- INCOME TAXES
 
     At July 21, 1997, the Company had approximately $28,000 of net operating
loss carryforwards. The tax benefit of these carryforwards ($9,500) has been
offset by a valuation allowance.
 
NOTE 6 -- SUBSEQUENT EVENTS
 
     On July 22, 1997, the Board of Directors of the Company adopted a 1997
Employee Stock Option Plan (the "Plan"). The Board has authorized 130,000 shares
for use by the Plan. The option price will not be less than the fair market
value of the shares at the time of grant, except as granted to a 10% shareholder
where the option price will be equal to 110% of fair market price. The Board has
determined the option price to be $10 for those options granted prior to the
completion of the public offering of the Company. The duration of each option
may not exceed ten years from the date of grant, for 10% shareholders the
duration is five years. The Plan will terminate on July 1, 2002.
 
     At the July 22, 1997 meeting, the Board granted a total of 45,000 options
to executive officers of the Company. These options have not yet been exercised.
 
                                       F-8
   45
 
=======================================================
 
     NO DEALER, SALESPERSON OR OTHER PERSON HAS BEEN AUTHORIZED TO GIVE ANY
INFORMATION OR MAKE ANY REPRESENTATIONS OTHER THAN THOSE CONTAINED IN THIS
PROSPECTUS IN CONNECTION WITH THE OFFER MADE BY THIS PROSPECTUS, AND IF GIVEN OR
MADE, SUCH INFORMATION OR REPRESENTATIONS MUST NOT BE RELIED UPON AS HAVING BEEN
AUTHORIZED BY THE COMPANY OR ANY UNDERWRITER. NEITHER THE DELIVERY OF THIS
PROSPECTUS NOR ANY SALE MADE HEREUNDER SHALL, UNDER ANY CIRCUMSTANCES, CREATE
ANY IMPLICATION THAT THE INFORMATION HEREIN IS CORRECT AS OF ANY TIME SUBSEQUENT
TO THE DATE HEREOF. THIS PROSPECTUS DOES NOT CONSTITUTE AN OFFER TO SELL OR A
SOLICITATION OF AN OFFER TO BUY ANY SECURITIES OFFERED HEREBY BY ANYONE IN ANY
JURISDICTION IN WHICH SUCH OFFER OR SOLICITATION IS NOT AUTHORIZED OR IN WHICH
THE PERSON MAKING SUCH OFFER OR SOLICITATION IS NOT QUALIFIED TO DO SO OR TO
ANYONE TO WHOM IT IS UNLAWFUL TO MAKE SUCH OFFER OR SOLICITATION.
 
                            ------------------------
 
                               TABLE OF CONTENTS
 


                                           PAGE
                                           ----
                                        
Available Information..................      2
Prospectus Summary.....................      3
Risk Factors...........................      5
Use of Proceeds........................      9
Dividend Policy........................      9
Capitalization.........................     10
Business...............................     11
Management.............................     15
Related Party Transactions.............     19
Principal Shareholders.................     20
Supervision and Regulation.............     22
Description of Capital Stock...........     29
Shares Eligible for Future Sale........     33
Underwriting...........................     34
Legal Proceedings......................     35
Legal Matters..........................     35
Experts................................     35
Additional Information.................     36
Index to Financial Statements..........    F-1

 
                            ------------------------
     UNTIL JANUARY 21, 1998 (90 DAYS AFTER THE EFFECTIVE DATE OF THE OFFERING),
ALL DEALERS EFFECTING TRANSACTIONS IN THE COMMON STOCK, WHETHER OR NOT
PARTICIPATING IN THIS DISTRIBUTION, MAY BE REQUIRED TO DELIVER A PROSPECTUS.
THIS DELIVERY REQUIREMENT IS IN ADDITION TO THE OBLIGATION OF DEALERS TO DELIVER
A PROSPECTUS WHEN ACTING AS UNDERWRITER AND WITH RESPECT TO THEIR UNSOLD
ALLOTMENTS OR SUBSCRIPTIONS.
=======================================================
=======================================================
 
                                1,300,000 SHARES
 
                      [MERCANTILE BANK CORPORATION LOGO]
 
                                  COMMON STOCK
                           --------------------------
 
                                   PROSPECTUS
                           --------------------------
                                RONEY & CO. LOGO
 
                                October 23, 1997
 
=======================================================