MERCANTILE BANK CORPORATION (PARENT COMPANY ONLY) CONDENSED FINANCIAL STATEMENTS (Tables)

12 Months Ended

Dec. 31, 2013

Following are condensed parent company only financial statements:

CONDENSED BALANCE SHEETS


	2013		2012
ASSETS
Cash and cash equivalents	$	2,506,000	$	473,000
Investment in bank subsidiary		179,706,000		173,019,000
Other assets		4,740,000		7,433,000

Total assets	$	186,952,000	$	180,925,000

LIABILITIES AND SHAREHOLDERS’ EQUITY
Liabilities	$	637,000	$	1,345,000
Subordinated debentures		32,990,000		32,990,000
Shareholders’ equity		153,325,000		146,590,000

Total liabilities and shareholders’ equity	$	186,952,000	$	180,925,000

CONDENSED STATEMENTS OF INCOME


	2013			2012			2011
Income
Interest and dividends from subsidiaries	$	5,516,000		$	32,532,000		$	4,974,000

Total income		5,516,000			32,532,000			4,974,000
Expenses
Interest expense		1,213,000			884,000			847,000
Other operating expenses		2,773,000			1,048,000			1,059,000
Total expenses		3,986,000			1,932,000			1,906,000

Income before income tax expense (benefit) and equity in undistributed net income (loss) of subsidiary		1,530,000			30,600,000			3,068,000
Federal income tax benefit		(1,042,000	)		(665,000	)		(2,272,000	)
Equity in undistributed net income (loss) of subsidiary		14,461,000			(18,730,000	)		32,145,000

Net income		17,033,000			12,535,000			37,485,000
Preferred stock dividends and accretion		0			1,030,000			1,343,000

Net income attributable to common shares	$	17,033,000		$	11,505,000		$	36,142,000

CONDENSED STATEMENTS OF CASH FLOWS


	2013			2012			2011
Cash flows from operating activities
Net income	$	17,033,000		$	12,535,000		$	37,485,000
Adjustments to reconcile net income to net cash from (for) operating activities:
Equity in undistributed (income) loss of subsidiary		(14,461,000	)		18,730,000			(32,145,000	)
Stock-based compensation expense		473,000			54,000			61,000
Change in other assets		3,244,000			(3,006,000	)		(3,619,000	)
Change in other liabilities		(708,000	)		1,073,000			(956,000	)

Net cash from operating activities		5,581,000			29,386,000			826,000
Cash flows from investing activities
Net capital investment into subsidiaries		0			0			0

Net cash for investing activities		0			0			0
Cash flows from financing activities
Repurchase of preferred stock		0			(21,000,000	)		0
Repurchase of common stock warrant		0			(7,465,000	)		0
Stock option exercises, net of cashless exercises		289,000			227,000			55,000
Employee stock purchase plan		19,000			39,000			42,000
Dividend reinvestment plan		33,000			14,000			6,000
Cash dividends on preferred stock		0			(496,000	)		(1,620,000	)
Cash dividends on common stock		(3,889,000	)		(774,000	)		0

Net cash for financing activities		(3,548,000	)		(29,455,000	)		(1,517,000	)

Net change in cash and cash equivalents		2,033,000			(69,000	)		(691,000	)
Cash and cash equivalents at beginning of period		473,000			542,000			1,233,000

Cash and cash equivalents at end of period	$	2,506,000		$	473,000		$	542,000