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January 2008
Safe Harbor Statement This presentation contains forward-looking statements within the meaning of the Private Securities L...
<ul><li>Multi-bank holding company based in Quincy, IL </li></ul><ul><li>$1.6 billion in assets </li></ul><ul><li>Over 450...
Background <ul><li>Mercantile Trust & Savings Bank founded in 1906 </li></ul><ul><li>Mercantile Bancorp, Inc. founded in 1...
Snapshot <ul><li>AMEX:  MBR </li></ul><ul><li>52-Week Range   $14.13-$17.77* </li></ul><ul><li>Price (12/31/07)     $17.45...
Redefining Community Banking Since 1983 *
Illinois Bank Holding Company Founded in 1983 <ul><li>Mercantile Bank   Quincy, IL 1983 </li></ul><ul><li>Marine Bank & Tr...
Three-Prong Growth Strategy <ul><li>To Generate Consistent Results with:  </li></ul><ul><li>Asset growth, stable returns f...
 
Core Bank Strategy
<ul><li>Maximize margins…maintain interest rate risk stability…allow for individual market economics to influence </li></u...
<ul><li>Expand market share </li></ul><ul><li>High levels of customer service win repeat business </li></ul><ul><li>Levera...
Non-Interest Income <ul><li>Establish trust department model in key banks: focus on life planning needs </li></ul><ul><li>...
<ul><li>Community bank focus, service culture </li></ul><ul><li>Local management expertise </li></ul><ul><li>Operating eff...
Entering New Markets Through Acquisition, Branching
<ul><li>Primary focus on: </li></ul><ul><li>Complementary operating characteristics </li></ul><ul><li>Compatible managemen...
MBR Acquisition, Branching Skills <ul><li>Management experience </li></ul><ul><li>Four acquisitions in eight years </li></...
2007 : HNB Financial Services <ul><li>Hannibal, Missouri-based institution </li></ul><ul><li>More than $186 million in ass...
Royal Palm Bank: Southwest Florida <ul><li>Naples-Marco Island MSA grew 27% (2000-2005) </li></ul><ul><li>Forecasted incre...
Heartland Bank: Kansas City MSA <ul><li>Kansas City MO-KS MSA ranked 26 th  in nation.    Total population 1,934,000.   (2...
De Novo Bank Investments
Bank Investments <ul><li>Integrity Bank Jupiter, FL </li></ul><ul><li>Premier Bancshares, Inc. Jefferson City, MO </li></u...
De Novo Bank Investment Strategy <ul><li>Strategic investments in growing banks serving growing markets </li></ul><ul><li>...
De Novo Investment Benefits <ul><li>Capital infusion from MBR fuels growth for selected bank investment </li></ul><ul><li>...
Our Performance
Growth Drivers <ul><li>Continuing demand for service-oriented community banks </li></ul><ul><li>MBR lending limit ability ...
Total Assets at December 31 (Shown in Million Dollars) *Unaudited
Total Loans at December 31 (Shown in Million Dollars) *Unaudited
Loan Portfolio  <ul><li>  Sept. 30, 2007 </li></ul><ul><li>  (Dollars in Millions) </li></ul><ul><li>Commercial and indust...
Loan Performance  (Shown in Thousand Dollars) 2003-2006 at December 31; 2007 at September 30, 2007
Total Deposits  at December 31  (Shown in Million Dollars) *Unaudited
Non-Interest Income at December 31  (Shown in Million Dollars) *Unaudited
<ul><li>Asset Management Services </li></ul><ul><li>Assets under management and non-interest   income grow in direct corre...
<ul><li>Brokerage Services </li></ul><ul><li>Reorganizing services under one   broker/dealer </li></ul><ul><li>Growth stra...
Net Income at December 31 (Shown in Million Dollars) *Unaudited
Return on Average Equity at December 31  *Unaudited
Stock Price Activity * Price adjusted for previous stock splits.
Price/Book Value Perspective <ul><li>MBR:  1.43x book value </li></ul><ul><li>NASDAQ Bank Index* 1.29x book value </li></u...
<ul><li>Our Goal </li></ul><ul><li>Seeking avenues to grow and executing performance as a company of community banks, whil...
 
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Mbr Presentation 1 08

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Mercantile Bancorp Investor Presentation - Fast Growing Multi-State Banking Holding Company - Interesting Investment Potential!

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Mbr Presentation 1 08

  1. 1. January 2008
  2. 2. Safe Harbor Statement This presentation contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Such statements include, but are not limited to, statements about Mercantile Bancorp Inc.’s plans, objectives, expectations and intentions and other statements that are not historical facts. Such statements are based upon the current beliefs and expectations of Mercantile’s management and are subject to significant risks and uncertainties. Actual results may differ materially from those set forth in the forward-looking statements.  The following factors, among others, could cause actual results to differ from those set forth in the forward-looking statements: changes in the interest rate environment; changes in the securities and real estate markets; increased competition and its effect on pricing, spending, third-party relationships and revenues; and the risk of new and changing regulation in the U.S. Additional factors that could cause the Company’s results to differ materially from those described in the forward-looking statements can be found in the 2006 Annual Report on Form 10-K, or on the September 30, 2007 Form 10-Q of Mercantile (included under the heading “Forward-Looking Statements”), filed with the Securities and Exchange Commission (“SEC”) and available at the SEC’s internet site ( http://www.sec.gov ). Any forward-looking statements today speak only as of today, and the Company assumes no obligation to update the forward-looking statements or to update the reasons why actual result could differ from those contained in the forward-looking statements.
  3. 3. <ul><li>Multi-bank holding company based in Quincy, IL </li></ul><ul><li>$1.6 billion in assets </li></ul><ul><li>Over 450 employees </li></ul><ul><li>31 locations in 23 communities throughout 4 states </li></ul><ul><li>Concentrated presence in West-Central Illinois and Northeastern Missouri </li></ul><ul><li>Dynamic, growing trust business </li></ul><ul><li>Startup bank investments offer equity gains and lending opportunities </li></ul><ul><li>Diversified income sources </li></ul>Overview
  4. 4. Background <ul><li>Mercantile Trust & Savings Bank founded in 1906 </li></ul><ul><li>Mercantile Bancorp, Inc. founded in 1983 </li></ul><ul><li>Began strategic investments in community banks in 1988 </li></ul><ul><li>Started trading publicly in early 2005 </li></ul><ul><li>Core holdings in West-Central Illinois, Northeast and Northwest Missouri, Northeast Kansas, and Southwest Florida, investments elsewhere </li></ul><ul><li>Acquired and integrated a total of eleven banking organizations since 1983 </li></ul>
  5. 5. Snapshot <ul><li>AMEX: MBR </li></ul><ul><li>52-Week Range $14.13-$17.77* </li></ul><ul><li>Price (12/31/07) $17.45 </li></ul><ul><li>Book Value Per Share (9/30/07) $12.18 </li></ul><ul><li>Price/Book 1.43X </li></ul><ul><li>Price/Earnings (ttm) 14.19X </li></ul><ul><li>Dividend (annualized) $ 0.24 </li></ul><ul><li>Shares Outstanding 8,709,727 </li></ul><ul><li>Market Cap $152.0 Million </li></ul>* Price adjusted for 3/2 split 12/28/07
  6. 6. Redefining Community Banking Since 1983 *
  7. 7. Illinois Bank Holding Company Founded in 1983 <ul><li>Mercantile Bank Quincy, IL 1983 </li></ul><ul><li>Marine Bank & Trust Carthage, IL 1991 </li></ul><ul><li>Perry State Bank Perry, MO 1994 </li></ul><ul><li>Brown County State Bank Mt. Sterling, IL 1997 </li></ul><ul><li>Farmers State Bank of No. Missouri Savannah, MO 1999 </li></ul><ul><li>Heartland Bank Leawood, KS 2004 </li></ul><ul><li>The Royal Palm Bank Naples, FL 2006 </li></ul><ul><li>HNB Bank Hannibal, MO 2007 </li></ul>
  8. 8. Three-Prong Growth Strategy <ul><li>To Generate Consistent Results with: </li></ul><ul><li>Asset growth, stable returns from wholly owned core banks </li></ul><ul><li>Revenue, asset and earnings growth enhancement through acquisition </li></ul><ul><li>Investment gains through minority equity positions in high-growth de novo banks </li></ul>
  9. 10. Core Bank Strategy
  10. 11. <ul><li>Maximize margins…maintain interest rate risk stability…allow for individual market economics to influence </li></ul><ul><li>New savings, checking products </li></ul><ul><li>Expand market share </li></ul><ul><li>Bring value to small business accounts </li></ul>Interest Income – Deposits
  11. 12. <ul><li>Expand market share </li></ul><ul><li>High levels of customer service win repeat business </li></ul><ul><li>Leverage startup bank relationships for loan participation </li></ul><ul><li>Maintain high credit quality standards to support steady asset growth and continued asset quality </li></ul>Interest Income – Loans
  12. 13. Non-Interest Income <ul><li>Establish trust department model in key banks: focus on life planning needs </li></ul><ul><li>Strategically expand in-bank brokerage </li></ul><ul><li>Focus on customer retention, stability </li></ul><ul><li>“ Our best customer is an asset management customer” </li></ul>
  13. 14. <ul><li>Community bank focus, service culture </li></ul><ul><li>Local management expertise </li></ul><ul><li>Operating efficiencies </li></ul><ul><li>Superior “Community Bank” service </li></ul><ul><li>“ Big bank” product offerings </li></ul><ul><li>Manage loans and investments to maximize margins, minimize interest rate risk </li></ul>Operating Philosophy – Core Banks
  14. 15. Entering New Markets Through Acquisition, Branching
  15. 16. <ul><li>Primary focus on: </li></ul><ul><li>Complementary operating characteristics </li></ul><ul><li>Compatible management, corporate culture </li></ul><ul><li>Growth potential of market </li></ul><ul><li>Market size, demographics we can serve </li></ul>Acquisition and Branching Strategy By focusing on operations, corporate culture and growth potential, we have the flexibility to target geographically diverse community banks serving growth markets
  16. 17. MBR Acquisition, Branching Skills <ul><li>Management experience </li></ul><ul><li>Four acquisitions in eight years </li></ul><ul><li>Acquired banks maintain individuality, employees and management </li></ul><ul><li>Transition team to smooth employee integration </li></ul><ul><li>Experienced technology & ops team </li></ul>
  17. 18. 2007 : HNB Financial Services <ul><li>Hannibal, Missouri-based institution </li></ul><ul><li>More than $186 million in assets (9/30/07) </li></ul><ul><li>Merging MBR-owned Perry State Bank into HNB creates efficiencies, market share opportunities </li></ul><ul><li>Creates continuous 100-mile banking presence from Quincy, IL to St. Louis area </li></ul><ul><li>All-cash transaction anticipated to be accretive in 12 months </li></ul>
  18. 19. Royal Palm Bank: Southwest Florida <ul><li>Naples-Marco Island MSA grew 27% (2000-2005) </li></ul><ul><li>Forecasted increase from 320,000 residents to 400,000 – 25% (2006-2010) </li></ul><ul><li>Serving Naples, Marco Island, Fort Myers </li></ul><ul><li>Avg. household income: $91,000 </li></ul>
  19. 20. Heartland Bank: Kansas City MSA <ul><li>Kansas City MO-KS MSA ranked 26 th in nation. Total population 1,934,000. (2005) </li></ul><ul><li>Johnson County, KS </li></ul><ul><ul><li>2006 population 517,000 – a 5% increase since 1990 census </li></ul></ul><ul><ul><li>2003 median household income $63,200 – 2005 figure is $68,200. </li></ul></ul><ul><li>Jackson County, MO </li></ul><ul><ul><li>2006 population 664,000 – a 5% increase since 1990 census. </li></ul></ul><ul><ul><li>Median household income $44,400 (2005) </li></ul></ul>
  20. 21. De Novo Bank Investments
  21. 22. Bank Investments <ul><li>Integrity Bank Jupiter, FL </li></ul><ul><li>Premier Bancshares, Inc. Jefferson City, MO </li></ul><ul><li>Premier Community Bank Crestview, FL of The Emerald Coast </li></ul><ul><li>Paragon National Bank Memphis, TN </li></ul><ul><li>Integrity Bancshares, Inc. Alpharetta, GA </li></ul><ul><li>Enterprise Financial Services * Clayton, MO </li></ul><ul><li>First Charter Corporation * Charlotte, NC </li></ul><ul><li>Solera National Bank Lakewood, CO </li></ul><ul><li>Brookhaven Bank Atlanta, GA </li></ul><ul><li>Manhattan Bancorp Los Angeles, CA </li></ul><ul><li>* Acquisition by divestiture of de novo bank </li></ul>
  22. 23. De Novo Bank Investment Strategy <ul><li>Strategic investments in growing banks serving growing markets </li></ul><ul><li>Unconstrained by geographical location of target investments </li></ul>
  23. 24. De Novo Investment Benefits <ul><li>Capital infusion from MBR fuels growth for selected bank investment </li></ul><ul><li>Possible loan participation with MBR opens doors to new lending opportunities </li></ul><ul><li>Affiliation with established community bank holding company </li></ul>To Target Investment To Mercantile Bancorp, Inc <ul><li>Investment position requires no active management involvement </li></ul><ul><li>Loan growth </li></ul><ul><li>Option to grow equity investment or sell investment, based on maximum shareholder benefit </li></ul>
  24. 25. Our Performance
  25. 26. Growth Drivers <ul><li>Continuing demand for service-oriented community banks </li></ul><ul><li>MBR lending limit ability due to our collective size </li></ul><ul><li>Small business growth continues to drive commercial lending </li></ul><ul><li>Robust growth in quality mid-sized markets </li></ul><ul><li>Expansion of asset and land management services </li></ul>
  26. 27. Total Assets at December 31 (Shown in Million Dollars) *Unaudited
  27. 28. Total Loans at December 31 (Shown in Million Dollars) *Unaudited
  28. 29. Loan Portfolio <ul><li> Sept. 30, 2007 </li></ul><ul><li> (Dollars in Millions) </li></ul><ul><li>Commercial and industrial $172 15% </li></ul><ul><li>Agricultural production 59 5% </li></ul><ul><li>Real estate – farmland 85 7% </li></ul><ul><li>Real estate – construction 190 16% </li></ul><ul><li>Real estate – commercial 211 18% </li></ul><ul><li>Real estate – residential 329 28% </li></ul><ul><li>Installment loans to individuals 136 11% </li></ul><ul><li>Total loans $1,182 100.0% </li></ul>
  29. 30. Loan Performance (Shown in Thousand Dollars) 2003-2006 at December 31; 2007 at September 30, 2007
  30. 31. Total Deposits at December 31 (Shown in Million Dollars) *Unaudited
  31. 32. Non-Interest Income at December 31 (Shown in Million Dollars) *Unaudited
  32. 33. <ul><li>Asset Management Services </li></ul><ul><li>Assets under management and non-interest income grow in direct correlation with one another </li></ul><ul><li>Growth strategy includes platforming through our affiliate banks to expand market share </li></ul><ul><li>Life Planning Strategies marketing approach to better transition business into asset management services as life cycle of customers mature </li></ul><ul><li>St. Charles, MO: opened trust office in 2005; EOY 2006 assets totaled $9.5 million; $14 million EOY 2007 </li></ul><ul><li>Agri-Business Services: Total Acreage Under Management ( Includes both trust and agency-managed acreage. ) </li></ul><ul><li>2004 23,400 Acres </li></ul><ul><li>2005 25,500 Acres </li></ul><ul><li>2006 26,400 Acres </li></ul><ul><li>2007 25,301 Acres </li></ul>* Unaudited, as of 12/31/07
  33. 34. <ul><li>Brokerage Services </li></ul><ul><li>Reorganizing services under one broker/dealer </li></ul><ul><li>Growth strategy includes platforming through affiliate banks to expand market share </li></ul><ul><li>Life Planning Strategies marketing approach to better transition business from retail banking throughout life cycle of customer </li></ul>* Unaudited, as of 12/31/07
  34. 35. Net Income at December 31 (Shown in Million Dollars) *Unaudited
  35. 36. Return on Average Equity at December 31 *Unaudited
  36. 37. Stock Price Activity * Price adjusted for previous stock splits.
  37. 38. Price/Book Value Perspective <ul><li>MBR: 1.43x book value </li></ul><ul><li>NASDAQ Bank Index* 1.29x book value </li></ul><ul><li>* Source Bloomberg 1/8/08 – ticker CBNK </li></ul>
  38. 39. <ul><li>Our Goal </li></ul><ul><li>Seeking avenues to grow and executing performance as a company of community banks, while raising awareness of MBR combines the potential to generate value for our investors. </li></ul>

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