8-K

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 8-K

CURRENT REPORT

Pursuant to Section 13 or 15(d)

of the Securities Exchange Act of 1934

Date of Report (Date of earliest event reported): November 18, 2013

MERCANTILE BANK CORPORATION

(Exact name of registrant as specified in its charter)

Michigan	000-26719	38-3360865
(State or other jurisdiction of incorporation)	(Commission File Number)	(IRS Employer Identification no.)

310 Leonard St., N.W. Grand Rapids, Michigan	49504
(Address of principal executive offices)	(Zip Code)

Registrant’s telephone number, including area code: (616) 406-3000

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the Registrant under any of the following provisions:

x Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425).

¨ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12).

¨ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)).

¨ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)).

Item 1.01. Entry into a Material Definitive Agreement

On November 18, 2013, Mercantile Bank Corporation (“Mercantile” or the “Company) entered into a loan commitment letter agreement (the “Commitment Letter”) with U.S. Bank N.A. (“U.S. Bank”) pursuant to which U.S. Bank has committed to provide Mercantile with a credit facility up to the maximum principal amount of $11 million (the “Credit Facility”). The Credit Facility will consist of a three-year term loan, the proceeds of which are expected to be used to pay a portion of the special cash dividend of $2.00 per share to Mercantile shareholders, which the Mercantile board of directors expects to declare and pay prior to the effective time of the Company’s proposed merger with Firstbank Corporation, subject to the satisfaction of the closing conditions set forth in the merger agreement. Proceeds of the loan may also be used to pay expenses relating to the proposed merger.

The Commitment Letter provides that the term loan will be repaid in quarterly installments of principal and interest at a rate of interest to be determined as follows, at the Company’s option:

• a floating rate option of 1-month rounded LIBOR plus 2.75%; or

• a fixed rate option determined by U.S. Bank as of the date of initial funding.

The loan will be unsecured. The provision of the Credit Facility contemplated by the Commitment Letter is subject to a number of conditions set forth in the Commitment Letter.

The foregoing description of the Commitment Letter is not complete and is qualified in its entirety by reference to the Commitment Letter, which is attached as Exhibit 10.1 to this Current Report and is incorporated herein by reference.

Important Information for Investors

Communications in this Current Report on Form 8-K do not constitute an offer to sell or the solicitation of an offer to buy any securities or a solicitation of any vote or approval. The proposed Merger and the issuance of Mercantile common stock in connection with the proposed Merger will be submitted to Mercantile’s shareholders for their consideration, and the proposed Merger will be submitted to Firstbank’s shareholders for their consideration. In connection therewith, on September 17, 2013 Mercantile filed a registration statement on Form S-4 which includes a joint proxy statement to be used by Mercantile and Firstbank to solicit the required approval of their shareholders in connection with the proposed Merger and which constitutes a prospectus of Mercantile. Mercantile and Firstbank may also file other documents with the SEC concerning the proposed Merger. INVESTORS AND SECURITY HOLDERS OF MERCANTILE ARE URGED TO READ THE JOINT PROXY STATEMENT AND PROSPECTUS REGARDING THE PROPOSED MERGER AND OTHER RELEVANT DOCUMENTS THAT HAVE BEEN FILED WITH THE SEC CAREFULLY AND IN THEIR ENTIRETY BECAUSE THEY CONTAIN IMPORTANT INFORMATION ABOUT THE PROPOSED MERGER. Investors and security holders may obtain a free copy of the joint proxy statement and prospectus and other documents containing important information about

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Mercantile and Firstbank through the website maintained by the SEC at www.sec.gov. Copies of the documents filed with the SEC by Mercantile will be available free of charge on Mercantile’s website at www.mercbank.com on the “Investor Relations” page. Copies of the documents filed with the SEC by Firstbank will be available free of charge on Firstbank’s website at www.firstbankmi.com.

Participants in the Solicitation

Mercantile, Firstbank, and certain of their respective directors and executive officers may be deemed to be participants in the solicitation of proxies from the shareholders of Mercantile and the shareholders of Firstbank in connection with the proposed Merger. Information about the directors and executive officers of Mercantile is set forth in its proxy statement for its 2013 annual meeting of shareholders, which was filed with the SEC on March 15, 2013. Information about the directors and executive officers of Firstbank is set forth in its proxy statement for its 2013 annual meeting of shareholders, which was filed with the SEC on March 15, 2013. These documents can be obtained free of charge from the sources indicated above. Other information regarding the participants in the proxy solicitation and a description of their direct and indirect interests, by security holdings or otherwise, will be contained in the joint proxy statement and prospectus and other relevant materials to be filed with the SEC when they become available.

Cautionary Statement Regarding Forward-Looking Statements

This Current Report on Form 8-K contains “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities and Exchange Act of 1934. These include statements preceded by, followed by or that otherwise include the words “expects” or similar expressions. Forward-looking statements relating to expectations about future results or events are based upon information available to Mercantile and Firstbank as of today’s date and are not guarantees of the future performance of Mercantile, Firstbank or the combined company, and actual results may vary materially from the results and expectations discussed. There is no assurance that the parties will complete the proposed Merger. Payment of the contemplated special dividend is subject to the satisfaction of the closing conditions in the merger agreement, not all of which are within the control of Mercantile and Firstbank. The Merger Agreement may be terminated if the companies do not receive the necessary approval of their respective shareholders or government approvals or if either Mercantile or Firstbank fails to satisfy all conditions to closing stated in the Merger Agreement. Additional risks and uncertainties related to the proposed Merger include, but are not limited to, the successful integration of Mercantile’ and Firstbank’s businesses and the combined company’s ability to compete in the highly competitive banking and financial services industries.

Mercantile cautions that the foregoing list of risks and uncertainties is not exclusive. Additional information concerning these and other risks is contained in Mercantile’ and Firstbank’s most recently filed Annual Reports on Form 10-K, subsequent Quarterly Reports on Form 10-Q, recent Current Reports on Form 8-K and other SEC filings. Mercantile undertakes no obligation to publicly update any of these forward-looking statements to reflect events or circumstances that may arise after the date of this Current Report.

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Item 9.01. Financial Statements and Exhibits.

(d) Exhibits: The following documents are attached as exhibits to this report on Form 8-K:

2.1	Agreement and Plan of Merger dated August 14, 2013. Previously filed as an exhibit to the Company’s Current Report on Form 8-K filed August 15, 2013 and incorporated herein by reference.
10.1	Commitment Letter between Mercantile Bank Corporation and U.S. Bank N.A.

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SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

Date: November 21, 2013	MERCANTILE BANK CORPORATION
	By	/s/ Charles E. Christmas
		Charles E. Christmas
		Senior Vice President, Chief Financial Officer, and Treasurer

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EXHIBIT INDEX

Exhibit Number	Document
2.1	Agreement and Plan of Merger dated August 14, 2013. Previously filed as an exhibit to the Company’s Current Report on Form 8-K filed August 15, 2013 and incorporated herein by reference.
10.1	Commitment Letter between Mercantile Bank Corporation and U.S. Bank N.A.

EX-10.1

Exhibit 10.1

COMMITMENT COVER LETTER

November 7, 2013

Mr. Michael H. Price

Chief Executive Officer

Mercantile Bank Corporation

310 Leonard ST. NW

Grand Rapids, Ml 49504

Mr. Charles E. Christmas

Mercantile Bank Corporation

310 Leonard ST. NW

Grand Rapids, Ml 49504

Dear Mr. Price and Mr. Christmas:

U.S. Bank National Association (“U.S. Bank”) is pleased to commit to provide Mercantile Bank Corporation a credit facility up to the maximum principal amount of $11,000,000.00.

Such loan facility would be provided pursuant to commercial loan documents incorporating provisions deemed by U.S. Bank to be customary and appropriate in transactions of this type. A summary of such provisions is set forth in the attached “Principal Terms and Conditions”. If any other material business or legal issues arise prior to initial funding, such issues may cause changes or additions to the Principal Terms and Conditions and must be resolved to the satisfaction of U.S. Bank or this commitment will become null and void. The loan documents shall contain all of the terms of the credit facility, and such terms shall supersede this commitment and the Principal Terms and Conditions.

If the terms outlined in the attached Principal Terms and Conditions are acceptable to you, please execute and return a copy of the Principal Terms and Conditions by facsimile, delivery or mail to be received by U.S. Bank prior to the close of business on November 30, 2013, or this commitment will automatically expire. In the event the Borrower does not fulfill its commitment to close and fund this transaction or the conditions set forth above are not fulfilled to the complete satisfaction of U.S. Bank on or before January 15, 2014, U.S. Bank may elect not to proceed with this transaction upon notice to the Borrower, but the applicable fees, reimbursement and indemnity obligations described above and/or in the Principal Terms and Conditions shall survive such termination.

This commitment is for your benefit only. It is not assignable and may not be disclosed to nor relied upon by any third party without the prior written approval of U.S. Bank.

We at U.S. Bank appreciate your business and look forward to this new opportunity.

Very truly yours,

U.S. BANK NATIONAL ASSOCIATION

Tammy K. Randa

Vice President

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PRINCIPAL TERMS AND CONDITIONS

Borrower: Mercantile Bank Corporation

A. Credit Terms

Term Loan Facility:

Permitted Use of Funds:	Special Dividend and merger related expenses
Loan Amount:	$11,000,000.00
Length of Facility:	Three Years
Principal Payments:	Combined principal and interest due per quarter amortized over three years
Interest:	1)	A floating rate option of one month rounded LIBOR. Rate reset monthly + 2.75%
	2)	A fixed rate option determined by U.S. Bank as of the date of initial funding. An example of such rate, if funded as of October 16, 2013, would be 3.45% per annum (COF + 275bps + 4 bps prepayment waiver)
Prepayment	Permitted
Closing Fee:	25 basis points of Term Loan Amount

B. Collateral

Facility will be unsecured, but as a condition of closing, Mercantile Bank Corporation shall agree to provide a negative pledge on all subsidiary bank stock now owned or owned in the future.

C. Warranties and Covenants

Loan documentation will include, without limitation, standard U.S. Bank warranties and covenants pertaining to accuracy of information; organization; change in control; material litigation; business activities; use of proceeds; compliance with laws; restrictions on indebtedness, liens and contingent liabilities; payment of taxes; environmental matters; maintenance of insurance/lender’s loss payee; financial reporting; inspection of properties and records;

plus

• Minimum Fixed Charge Coverage Ratio of 1.25, to be measured quarterly on a trailing twelve month basis for Mercantile Bank Corporation (parent company only level). To be measured starting at 3/31/2014.

• Minimum Loan Loss Reserve to Non-Performing Loans Ratio of 80.00% to be measured quarterly on a combined bank basis.

• Maximum Non Performing Loans plus Other Real Estate to Primary Capital of 18.00% to be measured quarterly on a combined bank basis.

• Well Capitalized status at each subsidiary bank, and on a consolidated basis.

• Minimum Total Risk Based Capital Ratio of 12.00% to be measured quarterly at each subsidiary bank.

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Where,

Non-performing loans are defined as total non-accrual loans plus 90+ days and still accruing.

Non-performing assets are defined as non-performing loans plus other real estate owned.

Tangible capital is defined as total common equity plus reserve for loan losses less intangible assets.

Fixed Charge Coverage is defined as parent level net income plus parent level interest expense plus parent level non-cash expenses minus non-cash income minus shareholder dividends divided by parent level interest expense plus contractual principal and interest on USB term loan plus 1/5^th of the commitment amount of any U.S. Bank debt plus contractual principal payment(s) required on non U.S. Bank debt at the parent level only.

Other requirements will include, but not be limited to:

1. The primary subsidiary banks’ (Mercantile and Firstbank) inability to pay dividends without prior regulatory approval will constitute an event of default.

2. No additional debt at the holding company without U.S. Bank’s prior approval.

D. Defaults, Rights and Remedies

Loan documentation will include, without limitation, standard U.S. Bank provisions pertaining to failure to make payment when due, nonperformance or breach of terms, conditions, warranties or covenants, misrepresentation, default of third-party obligations, cessation of a guaranty, bankruptcy, adverse change and insecurity. U.S. Bank’s rights and remedies will include, in part, setoff, choice of law and forum, waiver of jury trial and other rights as provided by law.

E. Conditions Precedent to Closing

• All information provided by the Borrower and any guarantor(s) to U.S. Bank is accurate in all respects.

• The Borrower and/or any guarantor(s) is/are not in violation or breach of any other agreement with U.S. Bank of any type or amount or of any third party obligation in excess of $10,000.

• Due authorization and proper execution of U.S. Bank loan documentation detailing the terms and conditions of the financing, all to be in form and substance satisfactory to U.S. Bank and its internal or external counsel.

• Evidence of the Borrower’s legal status and good standing and such other documentation as U.S. Bank might deem appropriate for this transaction and transactions of this type.

• As determined solely by U.S. Bank in accordance with its business expertise, no material adverse change has occurred in either the Borrower’s or in any guarantors’ business, financial condition or performance as reflected in the financial statements provided to U.S. Bank dated September 30, 2013; nor has there been any material adverse change in Borrower or in any guarantor’s collateral and property or in any other matters which U.S. Bank analyzed in conjunction with this credit request; including, without limitation, no change in the structure of the transaction initially presented to and agreed upon by U.S. Bank.

F. Expenses/Indemnification

The Borrower shall reimburse U.S. Bank for all costs and fees (including outside counsel fees) incurred by U.S. Bank in connection with the preparation, due diligence, negotiation and execution of loan documents. In addition, the Borrower shall indemnify U.S. Bank against any loss, claim, liability or expense including, without limitation, legal fees and disbursements incurred by it in connection with, arising out of, or in any way related to the execution, delivery, enforcement or defense of the commitment letter or of any of the transactions contemplated hereby. U.S. Bank shall in no case be liable for any special, indirect or consequential damages arising from any breach of any obligations of U.S. Bank.

G. Acceptance/Closing and Funding

This commitment must be accepted by the Borrower and the transaction closed and funded no later than the dates specified in the Commitment Cover Letter.

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H. ORAL AGREEMENTS OR COMMITMENTS TO LOAN MONEY, EXTEND CREDIT OR TO FORBEAR FROM ENFORCING REPAYMENT OF A DEBT INCLUDING PROMISES TO EXTEND OR RENEW SUCH DEBT ARE NOT ENFORCEABLE. TO PROTECT YOU (BORROWER) AND US (BANK) FROM MISUNDERSTANDING OR DISAPPOINTMENT, ANY AGREEMENTS WE REACH COVERING SUCH MATTERS ARE CONTAINED IN THIS WRITING, WHICH IS THE COMPLETE AND EXCLUSIVE STATEMENT OF THE AGREEMENT BETWEEN US, EXCEPT AS WE MAY LATER AGREE IN WRITING TO MODIFY IT; AND, IN ANY EVENT, AS SUPERSEDED BY LOAN DOCUMENTS SIGNED BY YOU AND ACCEPTED BY US.

Agreed to:		Agreed to:
Mercantile Bank Corporation		U.S. BANK NATIONAL ASSOCIATION
/s/ Charles E. Christmas
By:	Charles E. Christmas	By:	Tammy K. Randa
Its:	Chief Financial Officer	Its:	Vice President
Dated:	November 18, 2013	Dated:	November 7, 2013

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