Mercantile Bank Corporation Announces TARP Repurchase Repurchases $10.5 Million, or Half of Issued Preferred Stock
GRAND RAPIDS, Mich., April 4, 2012 /PRNewswire/ -- Mercantile Bank Corporation (NASDAQ: MBWM) ("Mercantile") announced today that it has repurchased 50 percent of the $21 million in non-voting preferred stock issued in May 2009 to the U.S. Department of the Treasury under the Treasury's Capital Purchase Program ("CPP"), as part of the Troubled Asset Relief Program.
"We are pleased to repurchase a significant portion of our outstanding preferred stock under the CPP without the need to issue any additional stock or debt, and while maintaining our well capitalized status," commented Michael Price, Chairman and CEO of Mercantile Bank Corporation. "Our ability to complete this repurchase transaction solely with internally generated funds illustrates Mercantile's strong capital position achieved through a return to profitability and effective balance sheet management over the past several years. While participating in the program provided an additional cushion during the 'Great Recession,' we are now in a healthy financial position to support future growth."
Mercantile consummated the repurchase of its preferred stock from the Treasury Department following approval from the Federal Reserve and consultation with the Federal Deposit Insurance Corporation. As part of the repurchase of the preferred stock, Mercantile expects to record a reduction of retained earnings of approximately $300,000 in its second-quarter 2012 results for the accelerated discount on the preferred stock which was being amortized over an original period of five years from the issuance date of May 15, 2009. As a result of the preferred stock repurchase, Mercantile's Tier 1 Leverage Capital Ratio will be reduced by approximately 75 basis points; however, the Bank will remain "well capitalized" for regulatory purposes.
About Mercantile Bank Corporation
Based in Grand Rapids, Michigan, Mercantile Bank Corporation is the bank holding company for Mercantile Bank of Michigan. Founded in 1997 to provide banking services to businesses, individuals and governmental units, the Bank differentiates itself on the basis of service quality and the expertise of its banking staff. Mercantile has seven full-service banking offices in Grand Rapids, Holland and Lansing, Michigan. Mercantile Bank Corporation's common stock is listed on the NASDAQ Global Select Market under the symbol "MBWM."
This news release contains comments or information that constitute forward-looking statements (within the meaning of the Private Securities Litigation Reform Act of 1995) that are based on current expectations that involve a number of risks and uncertainties. Actual results may differ materially from the results expressed in forward-looking statements. Factors that might cause such a difference include changes in interest rates and interest rate relationships; demand for products and services; the degree of competition by traditional and nontraditional competitors; changes in banking regulation or actions by bank regulators; changes in tax laws; changes in prices, levies, and assessments; the impact of technological advances; governmental and regulatory policy changes; the outcomes of contingencies; trends in customer behavior as well as their ability to repay loans; changes in local real estate values; changes in the national and local economies; and other factors, including risk factors, disclosed from time to time in filings made by Mercantile with the Securities and Exchange Commission. Mercantile undertakes no obligation to update or clarify forward-looking statements, whether as a result of new information, future events or otherwise.
SOURCE Mercantile Bank Corporation