In late 2011, the Bank Makes Statements To The SEC That Reveal A Deliberate Neutral Policy Intended To Shrink Commercial Lending. As early as late 2011, in public filings to the SEC, Mercantile alluded to a deliberate effort to shrink non-owner occupied commercial lending. In the first quarter of 2012, Mercantile described this effort in greater detail. In subsequent filings with the SEC, Mercantile made the following statements to the SEC and the public:
During the period of 2009 through 2011, we had made a concerted effort to reduce our non-owner occupied CRE [Commercial Real Estate] and construction lending segments, and the sluggishness of business activity in our markets resulted in fewer opportunities to make quality loans. We employed a systematic approach to reduce our exposure to certain non-owner occupied CRE and construction businesses given the nature of that type of lending and depressed economic conditions. We believed that such a reduction was in our best interest when taking into account the increased inherent risk and nominal deposit balances associated with the targeted borrowing relationships. Mercantile Bank Corporation SEC Form 10Q at 55 (Sept. 30, 2013).
Despite the dates in this public statement, Mercantile has not taken a concrete position on exactly when the “concerted effort” and “systematic approach” actually began.
Third Amended complaint in the United States District Court, Western District of Michigan, Southern Division.