Mercantile Bank Corporation (MBWM) Earnings Call Transcript & Summary

Good morning, and welcome to Mercantile Bank Corporation's Annual Meeting of Shareholders. I am Ray Reitsma, President and Chief Executive Officer of Mercantile and of the bank. Today's virtual-only meeting is a live webcast. We believe in engaging with our shareholders and it is our hope that this virtual meeting will maximize the participation of shareholders regardless of their location. Thank you very much to those who are participating in our virtual meeting today. And please note that the meeting is being recorded. I would like to call the formal portion of this meeting to order. Like to draw your attention to the rules of conduct set forth for this meeting. They are available on the company's website under Investor Relations, select overview and then governance documents. Shareholder ability to comment or ask questions is available via the virtual meeting platform Q&A section. Shareholders attending on the telephone may view and follow along with the meeting presentation material separately as they are also posted on the company's website under the Company Reports tab. The Board of Directors has appointed Amy Kam and Scott Setlock to act as inspectors for this meeting. I would like to ask Mr. Setlock to also serve as the secretary of the meeting. Mr. Setlock is Executive Vice President and Chief Operating Officer of Mercantile Bank Corporation and Mercantile Bank. Ms. Kam is our First Vice President and Executive Operations Manager. If you need a copy of the annual report or the proxy statement, the links to those documents are provided online on the Investor Relations page of our website. I would now like to introduce our directors who are present. Michael S. Davenport, Thomas D. Dickinson, Michelle L. Eldridge, Joseph D. Jones; Richard D. MacDonald, Michael H. Price, David B. Ramaker, Raymond E. Reitsma, Nelson F. Sanchez, Sara A. Schmidt, Amy L. Sparks and Shoran R. Williams. I would also like to acknowledge two of our directors who are retiring from the Mercantile and Bank Boards at the conclusion of this annual meeting. Mr. Dickinson with 11 years of service, and Mr. Kaminski with 12 years of service. We thank you for your invaluable contributions to our company. I'd also like to introduce Robert Bondy of Plante Moran PLLC, our accounting firm and Brad Wyatt of Dickinson Wright PLLC, our legal counsel. Mr. Bondy has been given an opportunity to make a statement if you would like.

I have no statement to make.

Thank you. At the end of the meeting, Mr. Bondy and Mr. Wyatt will be available to answer questions. Michael Davenport and Michael Price are serving as proxies for shareholders who voted by proxy. The Board of Directors set the close of business on March 28, 2025 is the record date for this meeting. A list of the shareholders as of the record date is available to view upon request by any Mercantile shareholder. If you wish to review the list, please send an e-mail to the secretary of mercbank.com, and he will be contacted to arrange the time to do the list. I have been advised by inspectors that 12,616,881 of the 16,235,384 shares that are entitled to vote are present by proxy. Since the majority of the shares are represented, a quorum is present, the business of the meeting may proceed. Notice of this meeting was sent to each shareholder. A copy of the notice and proxy statement is also available on our website under the Investor Relations section. Minutes of the 2024 Annual Meeting of Mercantile shareholders were made available on the company's website under Investor Relations, select overview, then governance documents. I would accept the motion approving the minutes. I would suggest that one of the proxies make the motion.

My name is Michael Davenport. I move that the minutes of the 2024 annual meetings of the Mercantile shareholders be approved as presented to this meeting.

Is there a second for the motion?

My name is Mike Price. I second the motion.

We will now vote on the motion to approve the minutes. All in favor please say aye.

Aye.

Motion is carried. The minutes of the 2024 Annual Meeting of Mercantile shareholders are approved as presented at this meeting. Mr. Davenport, Mr. Price, as proxies were among the person voting for the motion. . The first item of business is the election of 11 directors. Each will serve a 1-year term expiring at the 2026 Annual Meeting or until the election and due qualification of their successors. The proxy statement lists the 11 nominees proposed by our Board of Directors. These nominees are: Mike S. Davenport, Michelle L. Eldridge, Joseph D. Jones, Richard D. MacDonald, Michael H. Price, David B. Ramaker, Raymond E. Reitsma, Nelson F. Sanchez, Sara A. Schmidt, Amy L. Sparks, Shoran R. Williams. In accordance with the bylaws of the company, the shareholders are required to provide advanced notice of their intent to nominate candidates for directors. No such notice was received. Therefore, I declare the nominations closed. I would accept the motion regarding the election of directors. I would suggest that one of the proxies make the motion.

I move that the following resolution be adopted, resolved that Michael S. Davenport, Michelle L. Eldridge, Joseph D. Jones, Richard D. MacDonald, Michael H. Price, David B. Ramaker, Raymond E. Reitsma, Nelson F. Sanchez, Sara A. Schmidt, Amy L. Sparks and Shoran R. Williams are hereby elected as Directors of Mercantile Bank Corporation to serve 1-year terms expiring at the Annual Meeting in the year 2026 or upon the election and qualification of their successors.

Is there a second for the motion?

I second the motion.

The second item of business is the approval of the Mercantile Bank Corporation employee stock purchase plan of 2025, which permits eligible employees to purchase company stock at a 5% discount off the fair market value. The copy of the Mercantile Bank Corporation employee stock purchase plan in 2025 was included as Appendix A in the proxy statement. I would accept the motion to approve the Mercantile Bank Corporation employee stock purchase plan 2025 with a 5% discount. I would suggest that one of the proxies make the motion.

I move that the following resolution be adopted. Resolved, the shareholders approve the Mercantile Bank Corporation's employee stock purchase plan of 2025 with a 5% discount, substantially in the form provided in the Appendix A to the proxy statement.

Is there a second for the motion? .

I second the motion.

The third item of business is the ratification of the appointment of Plante Moran PLLC as our independent registered public accounting firm for 2025. I would accept the motion to ratify the appointment of Plante Moran, PLLC as our accountants for 2025, I would suggest that one of the proxies make the motion.

I move that the following resolution be adopted. Resolved that the appointment of Plante Moran, PLLC as Mercantile Bank Corporation's independent registered public accounting firm for 2025 is ratified.

Is there a second for the motion? .

I second the motion.

The fourth item of business is an advisory vote to approve the compensation of our executives. I would accept the motion to approve on an advisory basis the compensation of our named executive officers. I would suggest that one of the proxies make the motion. .

I move that the following resolution be adopted, resolved that the shareholders approve on an advisory basis, the compensation of Mercantile Bank Corporation's executives as disclosed in the compensation, discussion and analysis, the compensation tables and the related disclosures contained in the proxy statement.

Is there a second for the motion? .

I second the motion.

The fifth and final item of business is an advisory vote on the frequency of the advisory approval of the compensation of our named executive officers. I would accept the motion to approve on an advisory basis, the frequency of the advisory approval of the compensation of our named executive officers as the option that receives the highest number of votes cast once for every year, 2 years or 3 years. I would suggest that one of the proxies make the motion.

I move that the following resolution be adopted. Resolved that the option of once every 1 year, 2 years or 3 years that receives the highest number of votes cast for this resolution will be determined to be the preferred frequency with which the company used to hold a stockholder vote to approve the compensation of the named executive officers as disclosed pursuant to the compensation disclosure rules of the Securities and Exchange Commission, including the compensation discussion and analysis, the compensation tables and the other related disclosure. .

Is there a second for the motion? .

I second the motion.

Polls are now open. The proxies have submitted their proxy votes to the inspectors and the motions. [Voting]

The polls are now closed. As a reminder, if you have any questions for either of our legal counsel or our public accounting firm, please enter your questions in the Q&A section on your screen. Those have been counted according to the election of directors, the inspectors report that more than 96% of the shares represented at the meeting have voted for each nominee. Accordingly, Michael S. Davenport, Michelle L. Eldridge, Joseph D. Jones, Richard D. MacDonald, Michael H. Price, David B. Ramaker, [indiscernible] Sara A. Schmidt, Amy L. Sparks, and Shoran R. Williams have been elected directors of Mercantile to serve 1-year terms. 1-year terms will expire at our Annual Meeting in the year 2026 for upon election and due qualification of their successors. Regarding the motion to approve Mercantile Bank Corporation employee stock purchase plan of 2025 with a 5% discount. The majority of the shares voted were for approval of the plan. The preliminary tally shows 9,703,647 shares voted for the approval, 166,762 shares voted against the approval and 15,153 shares abstained from voting. Based on the vote the Mercantile Bank Corporation employees stock purchase plan 2025, with a 5% discount is approved. Regarding the motion to ratify the appointment of Plante Moran PLLC as our accounts for 2025, we expect to report that a majority of the shares were voted for the ratification. Preliminary tally shows 12,485,556 shares voted for ratification 115,325 shares voted against ratification and 16,000 shares have abstained for voting. Based on the vote the appointment of Plante Moran PLLC has been ratified. Regarding the advisory vote on our named executive officers' compensation. We expect to report that a majority of the shares voted were for approval. The preliminary tally shows 9,104,379 shares voted for approving compensation, 680,593 shares voted against the approval and 100,591 shares abstained from voting. Accordingly, the compensation of our executives has been approved on an advisory basis. Regarding the advisory vote on the frequency of advisory approval of our executive compensation, inspectors report that a majority of the shares voted were for approval of one year. The preliminary tally shows 8,703,735 shares voted for 1 year, 105,478 shares voted for 2 years, [indiscernible] shares voted for 3 years and 28,415 shares abstained from voting. Accordingly, the frequency of the advisory vote and advisory approval of executive compensation has been approved for one year on an advisory basis. Inspectors will furnish the secretary with a written report of the final count and this will be made available online in the next few days. Our accountants and legal counsel are now available to answer questions. After the formal portion of the meeting, there will be a question-and-answer period where you may ask questions of our officers. Do we have questions for accountants or counsel? Zero. So if there are no further business to come before the meeting, I would accept a motion for adjournment with one of the proxies make the motion.

I move that the meeting be adjourned. I second the motion.

You've heard the motion to adjourn. One of the proxies may speak on behalf of the shareholders. All those in favor say, aye.

Aye.

Motion is carried. The meeting is adjourned. There will now be a brief question-and-answer period with our executive officers. You may submit your questions by using the Q&A section on your screen. Please note that we will adhere to the rules of conduct in answering the questions.

All right. If there are no questions, the question-and-answer session is now concluded. Thank you for joining us for the meeting and for your interest in our company. Now we move on to the Annual Meeting of Shareholders.