The company reported net income of $2.3 million for 2002’s fourth quarter, up 57 percent over 2001 fourth quarter net income of $1.5 million.
Diluted earnings per share for the fiscal year were $1.48, compared with $1.15 for fiscal 2001.
Earnings per share were 43 cents for 2002’s fourth quarter, compared with 29 cents for the fourth quarter of 2001.
Chairman and CEO Gerald Johnson Jr. said 2002 was the bank’s best year in a series of “excellent” years.
The bank ended the year with $922 million in assets, representing an increase of $223 million, or 32 percent, over year-end 2001 levels.
Johnson pointed out that the increase was larger than most banks in the state of Michigan experienced.
“On Dec. 15, 1997, our wholly owned subsidiary Mercantile Bank of West Michigan opened its doors for business. During the ensuing five years I believe we certainly have demonstrated a seldom-replicated ability to generate outstanding earnings and asset growth while maintaining exceptionally high asset quality.
“We have also successfully managed our net interest margin through stable rates, rising rates and falling rates using a funding strategy initially questioned by several.
“We have also demonstrated an ability to increase non-interest income, and this has been not only through growth but by developing new products and services for our business customers.”
The company further announced Tuesday its third consecutive 5 percent stock dividend. The 5 percent stock dividend increases the bank’s outstanding shares of common stock to 5.4 million.
Tuesday also marked another milestone for Mercantile — the declaration of a cash dividend.
Johnson said the 8-cent quarterly dividend represents an annualized payout of 22 percent of 2002 earnings per share and an annualized dividend yield of approximately 1.32 percent.
“We are declaring this cash dividend and paying it, notwithstanding our continued growth, due to the fact that our projections for future earnings, coupled with our current strong capital position, have enabled us to begin paying cash dividends earlier than originally anticipated.”
Johnson said the payment of a cash dividend is a good strategic move for the bank.
“It’s our belief that in 2003 and beyond, stocks — including growth stocks such as ours — that pay dividends will outperform those that do not.”