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<SEC-DOCUMENT>0000950124-07-004360.txt : 20071119
<SEC-HEADER>0000950124-07-004360.hdr.sgml : 20071119
<ACCEPTANCE-DATETIME>20070817164314
<PRIVATE-TO-PUBLIC>
ACCESSION NUMBER:		0000950124-07-004360
CONFORMED SUBMISSION TYPE:	CORRESP
PUBLIC DOCUMENT COUNT:		1
FILED AS OF DATE:		20070817

FILER:

	COMPANY DATA:	
		COMPANY CONFORMED NAME:			MERCANTILE BANK CORP
		CENTRAL INDEX KEY:			0001042729
		STANDARD INDUSTRIAL CLASSIFICATION:	STATE COMMERCIAL BANKS [6022]
		IRS NUMBER:				383360865
		STATE OF INCORPORATION:			MI
		FISCAL YEAR END:			1231

	FILING VALUES:
		FORM TYPE:		CORRESP

	BUSINESS ADDRESS:	
		STREET 1:		5650 BYRON CENTER AVENUE S. W.
		CITY:			WYOMING
		STATE:			MI
		ZIP:			49509
		BUSINESS PHONE:		616 406-3777

	MAIL ADDRESS:	
		STREET 1:		5650 BYRON CENTER AVENUE S. W.
		CITY:			WYOMING
		STATE:			MI
		ZIP:			49509
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<DIV style="font-family: 'Times New Roman',Times,serif">


<DIV align="left" style="font-size: 10pt; margin-top: 12pt">August&nbsp;17, 2007
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Mr.&nbsp;Donald A. Walker, Jr.<BR>
Senior Assistant Chief Accountant<BR>
United States Securities and Exchange Commission<BR>
100 F. Street, N.E.<BR>
Washington, D.C. 20549

</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt">Dear Mr.&nbsp;Walker:
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">We are in receipt of your comment letter dated August&nbsp;9, 2007 regarding the review of Mercantile
Bank Corporation&#146;s Form 10-K for the fiscal year ended December&nbsp;31, 2006 and Form 10-Q for the
fiscal quarter ended March&nbsp;31, 2007 (File No.&nbsp;000-26719). Please allow this letter to serve as our
response.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><U><B>Management&#146;s Discussion and Analysis of Financial Condition and Results of Operations</B></U>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><U><B>Earning Assets, page F-6</B></U>
</DIV>


<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="left">1.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>We note your disclosure on page F-7 that nonperforming loans increased from $4.0&nbsp;million, or
0.26% of total loans, to $8.6&nbsp;million, or 0.49% of total loans, and that net charge-offs
increased from $1.1&nbsp;million, or 0.08% of total loans, to $4.9&nbsp;million, or 0.29% of total
loans. Despite loan growth during 2006 and of what appears to be a slight deterioration in
the credit quality of your portfolio, the ratio of allowance to loans and leases outstanding
at December&nbsp;31, 2006 was 0.08% lower compared to December&nbsp;31, 2005. Please tell us, and in
future filings disclose:</TD>
</TR>

</TABLE>
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>the underlying factors that led to the increase in nonperforming loans and net charge-offs;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>whether the increase in nonperforming loans and net charge-offs is a trend that is expected to continue in the future; and</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>the specific reasons that the allowance for loan loss as a percentage of total loans and leases outstanding is not
directionally consistent with loan growth and what appears to be deteriorated credit quality in the loan portfolio.</TD>
</TR>

</TABLE>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>Company Response</B>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Our credit policies establish guidelines to manage credit risk and asset quality. These guidelines
include loan review and early identification of problem loans and leases to provide effective loan
portfolio administration. The credit policies and procedures are meant to limit the risk and
uncertainties inherent in lending. In following these policies and procedures, we must rely on
estimates, appraisals and evaluations of loans and leases and the possibility that changes in these
could occur quickly because of changing economic conditions. Identified problem loans and leases,
which exhibit characteristics (financial or otherwise) that could cause the loans and leases to
become nonperforming or require restructuring in the future, are included on the internal &#147;watch
list.&#148; Senior management reviews this list regularly.
</DIV>


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</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">



<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Although the level of net loan and lease charge-offs and nonperforming assets increased during
2006, the quality of our loan and lease portfolio remains good. The levels of net loan and lease
charge-offs and nonperforming assets approximated banking industry averages during 2006, compared
to levels that were below banking industry averages in prior years. As of December&nbsp;31, 2006,
nonperforming assets totaled $9.6&nbsp;million, or 0.46% of total assets. At December&nbsp;31, 2005,
nonperforming assets totaled $4.0&nbsp;million, or 0.22% of total assets. Net loan and lease
charge-offs during 2006 totaled $4.9&nbsp;million, or 0.29% of average total loans and leases. During
2005, net loan and lease charge-offs totaled $1.1&nbsp;million, or 0.08% of average total loans and
leases. One of the primary factors that led to the increase in nonperforming assets during 2006
was a downturn in the Michigan economy and its manifestation on the commercial and residential real
estate markets. Approximately 50% of the increase in nonperforming assets from year-end 2005 to
year-end 2006 can be attributable to several commercial lending relationships that are directly
related to sales or rental of real estate. The remainder of the increase in nonperforming loans
and leases is primarily attributable to an apparent fraud situation whereby standard loan
underwriting documentation was either falsified or manipulated to deceive us during the loan
approval process.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">While we continuously strive to improve our loan and lease underwriting and administration
processes, we believe the recent increased level in nonperforming assets and net loan and lease
charge-offs experienced during 2006 in comparison to our historical levels will likely remain
through at least the remainder of 2007. Although net loan and lease charge-offs during the first
six months of 2007 equaled 0.23% of average total loans and leases on an annualized basis compared
to the 0.26% level during all of 2006, nonperforming assets were $14.4&nbsp;million higher as of June
30, 2007 when compared to the level as of December&nbsp;31, 2006. A vast majority of the increase in
nonperforming assets can be attributable to several commercial lending relationships that are
directly related to sales or rental of real estate, with two commercial real estate lending
relationships accounting for about 55% of the increase. While the real estate markets in the areas
we serve have not greatly improved, based upon a review of the current condition and recent trends
of our loan and lease portfolio, an analysis of the loan relationships on our internal watch list
and the pace of disposition of current nonperforming assets, we are cautiously optimistic that we
have reached a high point in nonperforming assets and net loan and lease losses.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Over 98% of the loan and lease portfolio consists of loans and leases extended directly to
companies or individuals doing business or residing within our markets. The remaining portion is
comprised of commercial loans participated with certain unaffiliated commercial banks outside of
our market areas, which are underwritten using the same loan criteria as though we were the
originating bank.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">The primary risk elements with respect to commercial loans and leases are the financial condition
of the borrower, the sufficiency of collateral and the lack of timely payment. We have a policy of
requesting and reviewing periodic financial statements from commercial loan and lease customers,
and we periodically review the existence of collateral and its value. The primary risk element
with respect to residential real estate loans and consumer loans is the lack of timely payment. We
have a reporting system that monitors past due loans and have adopted policies to pursue creditor&#146;s
rights in order to preserve our position.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">In each accounting period, we adjust the allowance for loan and lease losses (&#147;allowance&#148;) to the
amount we believe is necessary to maintain the allowance at adequate levels. Through our loan and
lease review and credit departments, we attempt to allocate specific portions of the allowance
based on specifically identifiable problem loans and leases. The evaluation of the allowance is
further based on, but not limited to, consideration of the internally prepared Reserve Analysis,
composition of the loan and lease portfolio, third party analysis of the loan and lease
administration processes and portfolio and general economic conditions. In addition, the
historically strong commercial loan and lease growth is taken into account.
</DIV>


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</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">
<DIV align="left" style="font-size: 10pt; margin-top: 6pt">The Reserve Analysis, used since our inception and completed monthly, applies reserve allocation
factors to outstanding loan and lease balances to calculate an overall allowance dollar amount.
For commercial loans and leases, which continue to comprise a vast majority of our total loans and
leases, reserve allocation factors are based upon the loan ratings as determined by our
standardized grade paradigms. For retail loans, reserve allocation factors are based upon the type
of credit. Adjustments for specific lending relationships, including impaired loans and leases,
are made on a case-by-case basis. The reserve allocation factors are primarily based on the recent
levels and historical trends on net loan and lease charge-offs and nonperforming assets, the
comparison of the recent levels and historical trends of net loan and lease charge-offs and
nonperforming assets with a customized peer group consisting of ten similarly-sized publicly traded
banking organizations conducting business in the states of Michigan, Illinois, Indiana or Ohio, the
review and consideration of our loan and lease migration analysis and the experience of senior
management making similar loans and leases for an extensive period of time. We regularly review
the Reserve Analysis and make adjustments periodically based upon identifiable trends and
experience.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Despite an increase in the level of nonperforming loans and leases during 2006, the allowance as a
percent of total loans and leases declined from 1.31% as of December&nbsp;31, 2005 to 1.23% as of
December&nbsp;31, 2006. During the course of 2006, in an effort to improve our identification of
embedded losses within the loan and lease portfolio, we began to elect SFAS No.&nbsp;114 treatment for
certain loans included on our watch list but not deemed to be impaired. In applying this
treatment, we had identified commercial loan relationships totaling approximately $18.0&nbsp;million in
which we calculated no loss exposure based on our collateral review. Had we not utilized the SFAS
No.&nbsp;114 treatment for these commercial loan relationships and thus not fully considering the
underlying collateral values, but instead used the reserve allocation pools based on the assigned
loan grade, our Reserve Analysis at December&nbsp;31, 2006 would have indicated the need to increase the
allowance by approximately $1.2&nbsp;million, and the allowance as a percent of total loans and leases
would have increased from 1.23% to 1.30%. While the SFAS No.&nbsp;114 treatment provided for a
reduction in the allowance as a percent of total loans and leases during the same time period we
experienced an increase in the level of nonperforming loans and leases and net loan and lease
charge-offs, we believe this application adequately, and more appropriately, measured and provided
for the estimated loss contained within these commercial loan relationships at December&nbsp;31, 2006.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">As of June&nbsp;30, 2007, our allowance as a percent of total loans and leases was 1.28%, up from the
1.23% at December&nbsp;31, 2006. The increase during the first six months of 2007 primarily reflects a
larger dollar volume of loans and leases on our internal watch list, which when applying the higher
reserve allocation percentages associated with those watch list grade categories necessitates a
larger allowance balance.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Although we believe that the allowance is adequate to cover losses as they arise, there can be no
assurance that we will not sustain losses in any given period that could be substantial in relation
to, or greater than, the size of the allowance.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><U><B>Liquidity, page F-21</B></U>
</DIV>


<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="left">2.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>In light of your heavy reliance on certificates of deposit to meet continued earning asset
growth combined with the fact that average rates on your time deposits in 2006 are higher than
all but 2% of total interest-bearing liabilities and the fact that approximately 75% of your
certificates of deposit mature within one year or less, please provide us with and in future
filings disclose the following information:</TD>
</TR>

</TABLE>
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>an enhanced discussion surrounding your reliance on brokered deposits
relative to other sources of funding;</TD>
</TR>

</TABLE>
</DIV>

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</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>how your reliance on brokered deposits is expected to impact your
overall cost of funds and profitability;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>alternative (i.e., back-up) liquidity plans in the event that the
market for brokered deposits shrinks; and</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>alternative plans to fund certificates of deposits maturing in one
year or less that do not rollover in the event that significant credit
deterioration occurs in your loan portfolio.</TD>
</TR>

</TABLE>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>Company Response</B>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Liquidity is measured by our ability to raise funds through deposits, borrowed funds, capital or
cash flow from the repayment of loans and investment securities. These funds are used to meet
deposit withdrawals, fund loans, maintain reserve requirements and operate our company. Liquidity
is primarily achieved through the growth of local and out-of-area deposits and liquid assets such
as securities available for sale, matured securities and federal funds sold. Asset and liability
management is the process of managing the balance sheet to achieve a mix of earning assets and
liabilities that maximizes profitability, while providing adequate liquidity.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Our primary liquidity strategy is to fund asset growth with deposits, repurchase agreements and
Federal Home Loan Bank of Indianapolis (&#147;FHLBI&#148;) advances and to maintain an adequate level of
short- and medium-term investments to meet typical daily loan and deposit activity. Although
deposit and repurchase agreement growth from customers located in our market areas has generally
consistently increased, this growth has not been sufficient to meet our historical substantial loan
growth and provide monies for additional investing activities. To assist in providing the
additional needed funds, we have regularly obtained monies from wholesale funding sources.
Wholesale funds, comprised of certificates of deposit from customers outside of our market areas
and advances from the FHLBI, totaled $1,144.4&nbsp;million, or 61.1% of combined deposits and borrowed
funds as of June&nbsp;30, 2007, compared to $1,108.8&nbsp;million, or 60.7% of combined deposits and borrowed
funds as of December&nbsp;31, 2006. As of December&nbsp;31, 2005, wholesale funds totaled $1,092.8&nbsp;million,
or 67.4% of combined deposits and borrowed funds.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Although local deposits have and are expected to increase as new business, governmental and
individual deposit relationships are established and as existing customers increase the balances in
their accounts, the relatively high reliance on wholesale funds will likely remain. Our primary
source of wholesale funds is out-of-area deposits. Out-of-area deposits consist primarily of
certificates of deposit placed by deposit brokers for a fee, but also include certificates of
deposit obtained from the deposit owners directly. Out-of-area deposits totaled $1,009.4&nbsp;million
as of June&nbsp;30, 2007, compared to $1,013.9&nbsp;million and $962.8&nbsp;million as of December&nbsp;31, 2006 and
December&nbsp;31, 2005, respectively. The owners of out-of-area deposits include individuals,
businesses and municipal governmental units located throughout the United States. Based upon data
compiled by the Federal Deposit Insurance Corporation, the brokered certificate of deposit market
has experienced strong growth over the past several years. Nationwide brokered certificates of
deposit totaled approximately $534.0&nbsp;billion as of December&nbsp;31, 2006, an increase of $52.0&nbsp;billion
during the previous twelve months and an increase of $249.0&nbsp;billion during the previous four years.
As part of our interest rate risk management strategy, a majority of our wholesale funds are
comprised of fixed rate certificates of deposit and FHLBI advances that mature within one year,
reflecting the fact that a majority of our loans and leases have a floating interest rate tied to
either the Prime rate or Libor. While this maturity strategy increases inherent liquidity risk, we
believe the increased liquidity risk is sufficiently mitigated by the benefits derived from an
interest rate risk management standpoint. In addition, we have developed a comprehensive
contingency funding plan which we believe further mitigates the increased liquidity risk.
</DIV>


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<DIV style="font-family: 'Times New Roman',Times,serif">
<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Wholesale funds are generally a lower all-in cost source of funds when compared to the interest
rates that would have to be offered in the local market to generate a sufficient level of funds.
During most of 2006 and the first six months of 2007, interest rates paid on new out-of-area
deposits and FHLBI advances were very similar to interest rates paid on new certificates of deposit
issued to local customers. In addition, the overhead costs associated with wholesale funds are
considerably less than the overhead costs that would be incurred to administer a similar level of
local deposits, especially if the estimated costs of a required expanded branching network were
taken into account. We believe the relatively low overhead costs reflecting our limited branch
network mitigate our high reliance on wholesale funds and resulting relatively low net interest
margin.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">As a member of the FHLBI, our bank has access to the FHLBI advance borrowing programs. FHLBI
advances totaled $135.0&nbsp;million as of June&nbsp;30, 2007, compared to $95.0&nbsp;million as of December&nbsp;31,
2006 and $130.0&nbsp;million as of December&nbsp;31, 2005. Based on available collateral as of June&nbsp;30,
2007, we could borrow an additional $167.9&nbsp;million. Our bank also has the ability to borrow money
on a daily basis through correspondent banks via established unsecured federal funds purchased
lines, totaling $72.0&nbsp;million as of June&nbsp;30, 2007. The average balance of federal funds purchased
during the first six months of 2007 equaled $4.6&nbsp;million, and equaled $3.7&nbsp;million during all of
2006.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">In addition to typical loan funding and deposit flow, we must maintain liquidity to meet the
demands of certain unfunded loan commitments and standby letters of credit. As of June&nbsp;30, 2007,
our bank had a total of $490.1&nbsp;million in unfunded loan commitments and $84.4&nbsp;million in unfunded
standby letters of credit. Of the total unfunded loan commitments, $413.6&nbsp;million were commitments
available as lines of credit to be drawn at any time as customers&#146; cash needs vary, and $76.5
million were for loan commitments expected to close and become funded within the next twelve
months. We monitor fluctuations in loan balances and commitment levels and include such data in
managing our overall liquidity.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">We monitor our liquidity position and funding strategies on an ongoing basis, but recognize that
unexpected events, economic or market conditions, earnings problems, declining capital levels or
situations beyond our control could cause either short or long term liquidity challenges. While we
believe it is unlikely that a funding crisis of any significant degree is likely to materialize, we
have developed a comprehensive contingency funding plan that provides a framework for meeting both
temporary and longer-term liquidity disruptions. Depending upon the particular circumstances of a
liquidity situation, possible strategies may include obtaining funds via one or a combination of
the following sources of funds: established lines of credit at correspondent banks and the FHLBI,
brokered certificate of deposit market, wholesale securities repurchase markets, issuance of term
debt, sale of assets or sale of common stock or other securities.
</DIV>


<DIV align="center" style="font-size: 10pt; margin-top: 18pt">* * * *
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">In connection with responding to your comment letter dated August&nbsp;9, 2007, we acknowledge that:
Mercantile Bank Corporation is responsible for the adequacy and accuracy of the disclosures in the
filing, Commission staff comments or changes to disclosure in response to Commission staff comments
do not foreclose the Commission from taking any action with respect to the filing and Mercantile
Bank Corporation may not assert Commission staff comments as a defense in any proceeding initiated
by the Commission or any person under the federal securities laws of the United States.
</DIV>


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<DIV style="font-family: 'Times New Roman',Times,serif">



<DIV align="left" style="font-size: 10pt; margin-top: 6pt">We trust that this response letter adequately addresses your requests included in your comment
letter dated August&nbsp;9, 2007, but please let us know if you need any additional information.
</DIV>

<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
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    <TD width="40%">&nbsp;</TD>
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    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">Sincerely,</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">/s/ Michael H. Price
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">/s/ Charles E. Christmas</TD>
</TR>
<TR style="font-size: 1px">
    <TD valign="top" style="border-top: 1px solid #000000"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top" style="border-top: 1px solid #000000">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">Michael H. Price
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Charles E. Christmas</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">Chairman, President &#038; CEO
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">SVP &#151; Chief Financial Officer</TD>
</TR>
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<P align="center" style="font-size: 10pt"><!-- Folio -->6<!-- /Folio -->
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