MERCANTILE BANK CORP 10-K

Item 5. Market for Registrant ’ s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities.   Market Information and Holders   Our common stock is traded on the Nasdaq Global Select Market under the symbol “MBWM.” At March 1, 2023, there were approximately 1,200 record holders of our common stock. In addition, we estimate that there were approximately 7,000 beneficial owners of our common stock who own their shares through brokers or banks.   Dividend Policy   The following table shows the high and low sales prices for our common stock as reported by the Nasdaq Global Select Market for the periods indicated and the quarterly cash dividends paid by us during those periods.       High     Low     Dividend   2022                         First Quarter   $ 40.01     $ 34.93     $ 0.31   Second Quarter     36.04       30.10       0.31   Third Quarter     39.03       29.26       0.32   Fourth Quarter     36.36       30.02       0.32                             2021                         First Quarter   $ 34.47     $ 26.75     $ 0.29   Second Quarter     33.41       29.65       0.29   Third Quarter     33.18       28.51       0.30   Fourth Quarter     37.33       32.13       0.30     22 Table of Contents   Holders of our common stock are entitled to receive dividends that the Board of Directors may declare from time to time. We may only pay dividends out of funds that are legally available for that purpose. We are a financial holding company and substantially all of our assets are held by our bank and its subsidiaries. Our ability to pay dividends to our shareholders depends primarily on our bank’s ability to pay dividends to us. Dividend payments and extensions of credit to us from our bank are subject to legal and regulatory limitations, generally based on capital levels and current and retained earnings, imposed by law and regulatory agencies with authority over our bank. The ability of our bank to pay dividends is also subject to its profitability, financial condition, capital expenditures and other cash flow requirements. In addition, under the terms of our subordinated debentures, we would be precluded from paying dividends on our common stock if an event of default has occurred and is continuing under the subordinated debentures, or if we exercised our right to defer payments of interest on the subordinated debentures, until the deferral ended.   We and our bank are subject to regulatory capital requirements administered by state and federal banking agencies. Failure to meet the various capital requirements can initiate regulatory action that could have a direct material effect on our financial statements. Our bank’s ability to pay cash and stock dividends or repurchase equity securities is subject to limitations under various laws and regulations and to prudent and sound banking practices.   On January 13, 2022, our Board of Directors declared a cash dividend on our common stock in the amount of $0.31 per share that was paid on March 16, 2022 to shareholders of record as of March 4, 2022. On April 14, 2022, our Board of Directors declared a cash dividend on our common stock in the amount of $0.31 per share that was paid on June 15, 2022 to shareholders of record as of June 3, 2022. On July 14, 2022, our Board of Directors declared a cash dividend on our common stock in the amount of $0.32 per share that was paid on September 14, 2022 to shareholders of record as of September 2, 2022. On October 13, 2022, our Board of Directors declared a cash dividend on our common stock in the amount of $0.32 per share that was paid on December 14, 2022 to shareholders of record as of December 2, 2022.   On January 14, 2021, our Board of Directors declared a cash dividend on our common stock in the amount of $0.29 per share that was paid on March 17, 2021 to shareholders of record as of March 5, 2021. On April 15, 2021, our Board of Directors declared a cash dividend on our common stock in the amount of $0.29 per share that was paid on June 16, 2021 to shareholders of record as of June 4, 2021. On July 15, 2021, our Board of Directors declared a cash dividend on our common stock in the amount of $0.30 per share that was paid on September 15, 2021 to shareholders of record as of September 3, 2021. On October 14, 2021, our Board of Directors declared a cash dividend on our common stock in the amount of $0.30 per share that was paid on December 15, 2021 to shareholders of record as of December 3, 2021.   On January 12, 2023, our Board of Directors declared a cash dividend on our common stock in the amount of $0.33 per share that will be paid on March 15, 2023 to shareholders of record as of March 3, 2023.   Issuer Purchases of Equity Securities   On May 27, 2021, we announced that our Board of Directors had authorized a program to repurchase up to $20.0 million of our common stock from time to time in open market transactions at prevailing market prices or by other means in accordance with applicable regulations. The actual timing, number and value of shares repurchased under the program will be determined by management in its discretion and will depend on a number of factors, including the market price of our stock, general market and economic conditions, our capital position, financial performance and alternative uses of capital, and applicable legal requirements. The program may be discontinued at any time. No shares were repurchased during 2022. Historically, stock repurchases have been funded from cash dividends paid to us from our bank. Additional repurchases may be made in future periods under the authorized plan or a new plan, which would also likely be funded from cash dividends paid to us from our bank. As of December 31, 2022, repurchases aggregating $6.8 million were available to be made under the current repurchase program.   23 Table of Contents   Repurchases made during the fourth quarter of 2022 are detailed in the table below.   Period   (a) Total Number of Shares Purchased     (b) Average Price Paid Per Share     (c) Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs     (d) Maximum Number of Shares or Approximate Dollar Value that May Yet Be Purchased Under the Plans or Programs   October 1 – 31     0   $ NA       0     $ 6,818,000   November 1 – 30     0     NA       0       6,818,000   December 1 – 31     0     NA       0       6,818,000   Total     0   $ NA       0     $ 6,818,000     24 Table of Contents   Shareholder Return Performance Graph   Set forth below is a line graph comparing the yearly percentage change in the cumulative total shareholder return on our common stock (based on the last reported sales price of the respective year) with the cumulative total return of the Nasdaq Composite Index and the SNL Bank Nasdaq Index from December 31, 2017 through December 31, 2022. The following is based on an investment of $100 on December 31, 2017 in our common stock, the Nasdaq Composite Index and the SNL Bank Nasdaq Index, with dividends reinvested where applicable.               Period Ending   Index   12/31/17     12/31/18     12/31/19     12/31/20     12/31/21     12/31/22   Mercantile Bank Corporation     100.00       84.26       112.35       87.59       117.18       116.19   NASDAQ Composite Index     100.00       97.16       132.81       192.47       235.15       158.65   KBW Bank NASDAQ Index     100.00       82.29       112.01       100.46       138.97       109.23     Item 6. Reserved.   Item 7. Management ’ s Discussion and Analysis of Financial Condition and Results of Operations.   Management’s Discussion and Analysis included in this Annual Report is incorporated here by reference.   Item 7A. Quantitative and Qualitative Disclosures About Market Risk.   The information under the heading “Market Risk Analysis” included in this Annual Report is incorporated here by reference.   25 Table of Contents