Mercantile Bank (MBWM) of Grand Rapids, Mich., has repurchased about $10.5 million of the preferred stock it issued to the Treasury Department as part of the Troubled Asset Relief Program.
The $1.4 billion-asset company said Wednesday that it used "internally generated funds" to complete the deal without issuing additional stock or debt. The bank issued about $21 million in preferred shares to the Treasury Department in May 2009. The company did not say when it intends to buy back the remaining shares.
Mercantile expects the partial repayment to reduce earnings in the second quarter by about $300,000. In January, the company reported that it earned $30 million in the fourth quarter with $27.4 million coming from the reversal of its valuation allowance against its deferred tax asset.