Banking & Finance

Mercantile Bank and Firstbank shareholders approve merger

December 17, 2013
| By Pete Daly |
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Mercantile Bank merges with Firstbank
Mercantile Bank’s headquarters is in northwest Grand Rapids. Photo via fb.com

Mercantile Bank Corporation and Firstbank Corporation have announced that their respective shareholders have voted overwhelmingly in favor of the proposed merger of the two banks.

Mercantile, based in Grand Rapids, and Firstbank, based in Alma, announced their plan to merge in August, which they said would make the new Mercantile Bank one of the largest banking businesses headquartered in Michigan.

Mercantile said last week that more than 99 percent of its shares and 95 percent of the Firstbank shares voted to approve the Agreement and Plan of Merger.

In addition, Mercantile shareholders approved the issuance of shares of Mercantile common stock to Firstbank shareholders pursuant to the Agreement and Plan of Merger.

"We are very pleased to announce that Mercantile's shareholders have endorsed our proposed merger with Firstbank," said Michael Price, chairman of the board and CEO of Mercantile Bank. "This is a crucial milestone in bringing our companies together.”

Thomas Sullivan, CEO of Firstbank, said that bank’s shareholders “showed strong support for our collective efforts to combine two great community banks to create Michigan's premier community banking franchise.”

Federal investigation

A protest to the proposed merger was filed with the Federal Reserve System in October by Matthew R. Lee of the Bronx, N.Y., an attorney/activist who heads an online organization called the Inner City Press/Fair Finance Watch.

Lee’s protest, filed under the Community Reinvestment Act, alleges that Mercantile does not offer mortgages to African-Americans or Latinos.

The Federal Reserve Board’s investigation into the allegations led to Mercantile advising the SEC that the merger cannot be completed on Jan. 1, as originally planned.

A Federal Reserve Board spokesperson, Susan Stawick, previously told the Business Journal she could not comment on the board’s timetable for resolving the issue, but stated that the “Federal Reserve staff is performing due diligence regarding the concerns that have been expressed about the merger.”

“We continue to work toward satisfaction of all closing conditions and are working cooperatively with the Federal Reserve Board, as it conducts its review of the proposed combination,” Mercantile Bank’s Price said last week. “We remain confident that closing will occur in the first quarter of 2014."

Firstbank’s Sullivan said that “with integration planning well underway, we remain confident that our combined company will offer great opportunity for our customers, shareholders and employees."

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