Good morning everyone and welcome to the Mercantile Bank Second Quarter 2013 Earning Conference Call. All participants will be in a listen-only mode. (Operator Instructions). Please note that today’s event is being recorded. And that this time, I would like to turn the conference call over to Mr. Bob Burton. Mr. Burton, please go ahead.

Thank you, Jamie. Good morning everyone and thank you for joining Mercantile Bank Corporation’s conference call and webcast to discuss the Company’s financial results for the second quarter 2013. I’m Bob Burton with Lambert Edwards, Mercantile’s Investor Relations firm and joining me are members of their management team including Michael Price, Chairman, President and Chief Executive Officer; Robert Kaminski, Executive Vice President and Chief Operating Officer; and Chuck Christmas, Senior Vice President and Chief Financial Officer. We will begin the call with management’s prepared remarks and then open the call up to questions. However, before we begin today’s call, its my responsibility to inform you that this call may involve certain forward-looking statements, such as projections of revenue, earnings and capital structure, as well as statements on the plans and objectives of the Company’s business. The Company’s actual results could differ materially from any forward-looking statements made today, due to the important factors described in the company’s latest Securities and Exchange Commission filings. The Company assumes no obligation to update any forward-looking statements made during the call. If anyone does not already have a copy of the press release issued by Mercantile today, you can access it at the Company’s website www.mercbank.com. At this time, I would like to turn the call over to Mercantile’s CEO, Mike Price. Mike

Thank you, Bob. Good morning, everyone, and thank you for joining us to discuss our second quarter 2013 results, and other recent developments for Mercantile Bank Corporation. On the call today our Chief Financial Officer, Chuck Christmas will provide details on our financial results followed by Chief Operating Officer, Bob Kaminski, with his comments regarding asset quality and other operational successes for the quarter. Hopefully, you’ve all had chance to review our quarterly results, which were highlighted by new loan originations of approximately $76 million, improved profitability, a further decline in non-performing assets and a strengthened balance sheet. Our net interest margin improved slightly and our 30 to 89 day delinquent loans remained near zero. In this quarter, as we have over the past several years, our efforts were focused on reducing non-performing assets, maintaining our net interest margin and strengthening our capital position. As part of our improved capital position earlier today, we also announced another increase in our quarterly cash dividend from $0.11 to $0.12 per common share, the second increase this year. Our bank continues to grow stronger each quarter and we are proud of our many accomplishments. We’re convinced that our relationship based approach is essential to our success in gaining market share, while we’re gaining respective partners to our customers by adding long-term value for them and ultimately our shareholders. The success of these relationship building efforts was evident in our origination of approximately $58 million in new loans to new borrowers along with $18 million in new term loans to existing borrowers during the quarter. As we look ahead, the Michigan economy continues to gain strength and is being recognized both locally and nationally, not only for the rate of its recovery, but also for our future prospects in several key industries. Mercantile remains well positioned to continue our success as a leader in our markets and our strong capital position creates many opportunities for us to fully participate in these trends as they play out 2013. We will continue to do this while remaining focused on building our franchise and helping our communities prosper. At this time, I’m going to turn it over to Chuck.

Thanks Mike, good morning everybody. As you saw in the press release, this morning we announced net income attributable to common shares of $4 million for the second quarter of this year, a 22% increase over the $3.3 million earned during the second quarter 2012. Our net income attributable to common shares during the first six months of 2013 was $8.4 million, a 44% increase over the $5.8 million earned during the first six months of 2012. On a diluted earnings per share basis the $0.46 we earned during the second quarter of 2013, was an increase of 28% over the $0.36 we recorded during the second quarter of 2012, while the $0.97 we earned during the first six months of 2013, was an increase of 49% over the $0.65 we earned during the first six months of 2012. The quality of our loan portfolio continues to improve, allowing for negative provision expense and further significant reductions in problem asset administration cost. The level of non-performing assets has declined over $103 million or [88%] since the peak level at March 31, 2010 and is currently at its lowest dollar volume since March 31, 2007. Our improved earnings performance and financial condition also reflect the many positive steps we have taken over the past five years to not only mitigate the impact of asset quality related costs in the near-term, but to establish an improved foundation for our longer-term performance as well. We have increased our net interest margin to well above historical levels, strengthened our regulatory capital ratios and enhanced our liquidity position through dramatic reductions in our reliance on wholesale funding. In addition, our improved financial condition and operating results led to the resumption of a quarterly cash dividend on our common shares during the fourth quarter of 2012,…

Thank you, Chuck and good morning everyone. My comments this morning will focus on client acquisition, asset quality and general operations of the bank. The second quarter 2013 results posted by the Company today demonstrated a continued improvement in the bank’s asset quality. Plus some very positive developments in the area of loan funding. In our first quarter conference call, we comment that Mercantile has strong pipeline of loans schedule to fund in second quarter and that proves to be the case. Starting in April, continuing throughout the quarter we generated a steady flow of new loan closings. Additionally, the reduction of loans from the portfolio pruning and aggressive pricing strategies by our competitor banks was less of a factor in the second quarter than in prior quarters. A dedicated client relationship building efforts of our staff is the source of these results, with nearly $58 million in new client loans closed, plus another $18 million of loans funded to existing clients. The distribution of loans among loan types, provided a nice mix of C&I both lines of credit and term debt as well as mortgage debt both owner occupied and non-owner occupied. As we have commented for several quarters, mutually beneficial client relationships built on confidence and trust take time to develop. Our staff persistently introduces and demonstrates the Mercantile banking philosophy to prospects; these efforts are generating attractive new client opportunities, we are also seeing a few accelerated opportunities caused by personnel changes at some of our competitors. Regarding asset quality, Mercantile lending personnel continue to drive down non-performing asset totals producing a drop of 24% in NPAs from the first quarter and a [54%] reduction from the same period of 2012. Principal payments of $2 million, sales proceeds of $2.4 million, charge-offs of $0.3 million and evaluation…

Thanks Rob and thank you also Chuck. Operator at this time, we’d like to open it up for any questions that might be out there.

And at this time, we’ll begin the question-and-answer session. (Operator Instructions). At this time, we will pause momentarily to assemble our roster. And our first question comes from John Barber from KBW. Please go ahead with your question. John Barber – Keefe, Bruyette & Woods: Good morning.

Good morning John. John Barber – Keefe, Bruyette & Woods: I guess the first question I have was just related to asset quality. I was wondering if you guys had changed the calculation for your loan loss or if you’re still using the 12 quarter look back?

No, we are still using the 12 quarter migration, that we sold into at the end of 2012 and it still reflects what we see is the appropriate assessments of the asset quality in the portfolio. John Barber – Keefe, Bruyette & Woods: Okay thanks Bob. I was also wondering if you could talk a little bit more about the pipeline for loans and the outlook for the second half of the year and also if you had the origination number in the year ago quarter.

.: John Barber – Keefe, Bruyette & Woods: Okay thank you for the colorm and I was also just wondering what the long end of the curve rising, are you seeing any relief in CRE pricing?

This is Mike and I’ll sort of let Bob weigh in on it too. At this point it’s, the long end increase is still relatively recently, but we haven’t seen a lot of it, we continue though, to stick with our discipline and that’s why you see our margin hanging in there so well is that, we look at it each and every time and Chuck works closely with our lenders and when we are asked to especially quote on the long end of it, we just have some fairly significant de minimis levels that we aren’t really giving in on, but the competitors that we see out there, that are doing a lot of this long-term stuff are still in our opinion quoting some fairly unattractive rates, as far as we’re concern, very attractive to customers, but Bob I don’t know if you want to add to that.

Yeah, Mike makes a good point, it really relates to a discipline that we developed over the last couple of years with respected to pricing and it’s a risk-based pricing approach and if it doesn’t fit our template, then we tell the customer, the parameters that we are able to establish for a loan commitment and it really, we try to drive towards the whole theory of relationship banking and things that come with that, and certainly pricing is important part of the mix, but the focus with our customers tries to shy away from pricing as the front and foremost factor in a relationship and that’s we’ll offer a very competitive rate relative to the market and what the credit that deserves to be priced at, but its all about things that we can offer as value-added relationship banking that we talked about for several quarters now, that’s really the hallmark of what we do and how we market to our clients.

John Barber – Keefe, Bruyette & Woods: Great and the last one I had, I think OCI declined $2 million this quarter, are you guys looking at moving any securities into help the maturity?

No, our bond portfolio tends to be longer-term relative to the rest of the banking industry, we’ve always done it that way and that primarily reflects that we’ve got a lot of floating rate loans and obviously, as any bank CFO does is use the investment portfolio to help manage interest rate risk. So we don’t have any need to be moving it between available for sale and held to maturity, in the history of this Company we’ve never sold a security for liquidity purposes, we just let our Fed funds sold position, as well as our wholesale funding program, take care of any funding needs that we might have. And we as bankers were sitting for several years now with some pretty big gains in portfolio, well we still have a net gain in the portfolio, but certainly considerably lower and with the longer end of the curve to seven and ten year moving up like it did. Especially at the end of June when we priced our portfolio, it did have a pretty big impact. I would tell you that offsetting that to some degree is the swap we have in our trust preferred, that moved considerably as well in the opposite direction to helped negate that a little bit, and certainly rates have started to come back down a little bit, at least in the first part of the third quarter. So we’ve seen that kind of reverse itself a little bit, and we’ll just see where it goes, but on an overall basis, we’re pretty consistent with the investment portfolio and it’s doing what it needs to do. John Barber – Keefe, Bruyette & Woods: Okay. Thanks for the color.

Thanks, John.

(Operator Instructions). We do have an additional question; this comes from Daniel Cardenas from Raymond James. Please go with your question. Dan Cardenas – Raymond James Financial, Inc.: Good morning, guys.

Hi. Dan. Dan Cardenas – Raymond James Financial, Inc.: Now just a quick question, in terms of the loan growth that we saw, was that more market share grab still or is it, are you beginning to see signs of economic improvement in your footprint?

Yeah, its been a little bit of both, as I mentioned in my comments, there has been some clients that have experienced some of upheaval at the present institution giving us some opportunities there, but also there are some new projects that are on the drawing board and are getting going with some existing clients and some new client opportunities that is encouraging from an overall economic marketplace standpoint. So, its been a little bit of both. Dan Cardenas – Raymond James Financial, Inc.: Okay, good. And then on the margins side, are there any deposit re-pricing opportunities in the second half of the year that could potentially help starve off some of the headwinds that we’re facing right now, that the industry is facing right now?

Yeah Dan, this is Chuck. We have some opportunities, certainly not to the degree that we’ve had over the last several years, we are probably talking two may be a three basis points a quarter and reducing the cost of funding right now. But not a lot there is a little bit there but not much in regards to your non-maturing CDs, I think we’ve as long as with all the other banks I think we are about as low as we can go with those rates. So there’s going to be a little bit of relief, but not the significant relief that we saw just because everything, it’s kind of repriced down to the current rate environment. The nice thing to see from a margin perspective is, most of the compression in our margin is going to be related to new loans, just because the loans that we are putting on have a lower rate because of the current rate environment than what our average loan rate is right now which is right around 4.7%. But certainly with the growth itself we’ll hopefully offset any compression in the margin when it comes to the actual interest income component. Dan Cardenas – Raymond James Financial, Inc.: Okay, great. Thanks guys.

.:

(Operator Instructions) Gentlemen at this time, I’m showing no additional questions. I would like to turn the conference call back over to Mr. Price for any closing remarks.

Thank you, Jamie. While Mercantile’s momentum is increasing and our team continues to be very motivated and dedicated to build on our success. As I stated earlier, our longstanding relationships and proven excellence at community banking are serving us very well, as we continue on the path of achieving efficient and profitable growth. We thank you to all of you for joining us this morning for your interest in our Company and we look forward to talking with you again. At this time, we’ll end the call.

Ladies and gentlemen at this time, the conference call has concluded. You may now disconnect your telephone lines.