Mercantile Bank Corporation Announces Strong Fourth Quarter and Full-Year 2025 Results

GRAND RAPIDS, Mich., Jan. 20, 2026 — Mercantile Bank Corporation (NASDAQ: MBWM) (“Mercantile” or “the Company”), a leading community-based bank headquartered in Grand Rapids, Michigan, today reported robust financial results for the fourth quarter and full fiscal year ended December 31, 2025. The Company’s financial performance demonstrated strengthening revenue streams, improved asset quality, and continued success in strategic expansion, including a key acquisition completed at the end of 2025 that broadened its regional footprint and service capabilities.

This press release encompasses comprehensive financial results, operational highlights, strategic achievements, and forward-looking commentary from senior leadership at Mercantile Bank Corporation. The positive performance reflects the Company’s efforts to grow its core businesses, serve its communities, and deliver value to stakeholders amid a dynamic economic environment characterized by changing interest rates and competitive pressures.

Key Financial Highlights for Fourth Quarter and Full-Year 2025

Mercantile reported significant growth across key earnings metrics in the fourth quarter and full year of 2025 compared with the prior year. Key performance data include:

• Net Income (Q4 2025): $22.8 million, or $1.40 per diluted share, compared to $19.6 million, or $1.22 per diluted share, in the fourth quarter of 2024. This represents a meaningful year-over-year increase in profitability.
• Full-Year Net Income (2025): $88.8 million, or $5.47 per diluted share, compared with $79.6 million, or $4.93 per diluted share, in 2024, indicating sustained earnings growth.
• Net Revenue (Q4 2025): $62.1 million, up approximately 6% from $58.5 million in the same period a year earlier, driven by expansion in both interest and noninterest income.
• Net Revenue (Full-Year 2025): $243 million, up $11.2 million, or nearly 4.8% from 2024, reflecting the positive impact of higher net interest income and increased service-based fees.
• Net Interest Income: Increased to $51.0 million for Q4 2025 and $201 million for the full year, driven by growth in earning assets and effective cost of funds management.

These results highlight the Company’s strong operational performance and expanding revenue base. Growth in both interest income and noninterest fee-based income demonstrates balanced progress across Mercantile’s diversified banking activities.

Income Components and Trends

Net Interest Income is a core driver of Mercantile’s profitability. During the fourth quarter, net interest income increased by approximately 5.5% from the prior year’s period. This growth was driven by gains in earning assets and a slightly higher net interest margin, reflecting disciplined asset-liability management and effective deployment of loan and investment portfolios.

Noninterest Income, which includes fees from treasury management services, mortgage banking activities, bank-owned life insurance income, and payroll services fees, also increased year-over-year, expanding by nearly 9% in the fourth quarter. This increase highlights the Company’s success in diversifying its revenue streams beyond traditional interest income.

For the full year, noninterest income rose to $41.6 million, up from $40.4 million in 2024. Fee-based revenues continue to contribute significantly to Mercantile’s comprehensive financial profile, emphasizing an expanding suite of services tailored to the needs of businesses and individuals.

Balance Sheet and Asset Quality

Mercantile’s balance sheet remained resilient throughout 2025. Net interest margin, a key profitability indicator, was 3.43% in the fourth quarter of 2025, slightly above the prior year’s comparable period. Despite a lower overall yield on earning assets resulting from changes in loan composition and interest rate environments, the Company effectively controlled funding costs, resulting in a stable margin profile.

Loan and Deposit Metrics: Mercantile continued to strengthen credit quality and liquidity during 2025:

• Loan-to-Deposit Ratio: Declined from approximately 98% at year-end 2024 to roughly 95% at year-end 2025, reflecting robust local deposit growth. When including the impact of the Eastern Michigan Financial Corporation acquisition, the ratio further declined to approximately 91%, enhancing liquidity and funding flexibility.
• Asset Quality: Nonperforming assets, past due loans, and charge-offs remained at low levels throughout the year, underscoring disciplined credit risk management and effective underwriting practices.
• Capital Strength: Tangible book value per common share increased to $36.78 as of December 31, 2025, up roughly 11% from the prior year, demonstrating strong capital retention and shareholder equity growth.

These balance sheet metrics reflect Mercantile’s commitment to maintaining strong capital adequacy, funding stability, and credit quality across market cycles, which positions the organization to support continuing loan demand and client service needs.

Strategic Expansion and Acquisition of Eastern Michigan Financial Corporation

A significant event in 2025 for Mercantile Bank Corporation was the completion of its acquisition of Eastern Michigan Financial Corporation (“Eastern”), the former holding company for Eastern Michigan Bank, headquartered in Croswell, Michigan. This strategic transaction, completed on December 31, 2025, expanded Mercantile’s geographic presence in East and Southeast Michigan.

The addition of Eastern’s footprint, which included approximately $572 million in total assets, enhances Mercantile’s ability to serve a broader client base with an expanded suite of financial products and services. This acquisition supports the Company’s long-term strategic growth objectives by increasing scale, deepening community relationships, and introducing Mercantile’s capabilities to new markets.

Post-acquisition integration focus is on leveraging shared expertise, centralized systems, and cross-selling opportunities that benefit customers and shareholders alike. The acquisition also contributed to favorable tax outcomes during 2025, including a reduced effective tax rate, which supported improved net earnings.

Operational Performance in the Fourth Quarter of 2025

During the fourth quarter, Mercantile demonstrated strong operational performance in both core banking activities and support functions:

• Yield Metrics: The yield on average earning assets was approximately 5.52% in Q4 2025, slightly below the prior year due to variable commercial loan rates and portfolio mix shifts, including lower-yielding securities.
• Cost of Funds: Funding costs improved to about 2.09% in Q4 2025, down from 2.39% in the same period a year earlier, due largely to lower interest rates paid on deposits and optimized funding sources.
• Noninterest Expense Control: Despite market pressures, Mercantile restricted overhead cost growth while maintaining targeted investments in service platforms and client-support systems.

These results emphasize sound banking practices and meticulous oversight of interest rate risk, liquidity, and revenue diversification.

Leadership Commentary and Vision for the Future

Ray Reitsma, President and Chief Executive Officer of Mercantile Bank Corporation, expressed strong satisfaction with the Company’s performance throughout 2025. In his statement, he highlighted the organization’s resilience amid economic uncertainty, the value created through strategic decisions, and the Company’s future priorities focused on sustainable growth and community banking excellence.

According to Reitsma, Mercantile’s success during the year was supported by growing net interest income, increased fee-based income, disciplined credit risk management, and a strong deposit franchise. He also noted that the acquisition of Eastern Michigan Financial Corporation represented a meaningful milestone that enhanced Mercantile’s competitive positioning.

Looking forward, leadership highlighted key strategic objectives including:

• Further strengthening the loan portfolio while managing credit risk proactively.
• Enhancing digital and service platforms to improve client experience across all banking channels.
• Expanding community and commercial banking relationships through tailored financial solutions.
• Delivering consistent value to shareholders through disciplined financial management and sustainable growth initiatives.

Conference Call and Webcast Information

Mercantile Bank Corporation also hosted a live webcast and investor conference call to discuss the fourth quarter and full-year 2025 financial results. This event provided deeper insights into financial performance, strategic achievements, and management’s outlook for the coming year.

The earnings release and webcast were made available before markets opened on January 20, 2026, and the archived recording was accessible on the Company’s Investor Relations website.

2025 Financial Results Overview

In summary, Mercantile Bank Corporation delivered solid financial results for 2025 with notable growth across key performance indicators:

• Strong Profitability: Increased net income and earnings per share when compared with 2024.
• Revenue Growth: Higher net revenue and diversified income streams.
• Asset Expansion: Successful acquisition of Eastern Michigan Financial Corporation.
• Stable Balance Sheet: Improved loan-to-deposit ratio, resilient capital base, and strong asset quality.
• Operational Excellence: Effective management of interest rate impacts and noninterest costs.

These achievements underscore Mercantile’s commitment to disciplined financial management, community banking principles, and long-term value creation for shareholders and clients.