Mercantile Bank Corporation Announces Strong Second Quarter 2026 Results

GRAND RAPIDS, Mich. , July 21, 2026 /PRNewswire/ -- Mercantile Bank Corporation (NASDAQ: MBWM ) ("Mercantile") reported net income of $25.9 million, or $1.50 per diluted share, for the second quarter of 2026, compared with net income of $22.6 million, or $1.39 per diluted share, for the second quarter of 2025. Net income during the first six months of 2026 totaled $48.6 million, or $2.82 per diluted share, compared with net income of $42.2 million, or $2.60 per diluted share, during the first six months of 2025. Excluding non-recurring costs associated with the acquisition of Eastern Michigan Financial Corporation and the previously announced core and digital banking system conversion (a non-GAAP measurement), adjusted net income was $26.4 million, or $1.53 per diluted share, for the second quarter of 2026, and $51.7 million, or $2.99 per diluted share, for the first six months of 2026. Using these non-GAAP measures, adjusted earnings per diluted share increased $0.14, or 10 percent, in the second quarter of 2026, and $0.39, or 15 percent, in the first six months of 2026, compared to the respective 2025 periods. "We are very pleased to report another quarter of strong financial performance as we continue to successfully navigate our way through the extended and ongoing period of uncertain global economic conditions and heightened geopolitical concerns," said Ray Reitsma, President and Chief Executive Officer of Mercantile. "Our robust operating results were driven by increased net interest income, reflecting strong commercial loan growth and a higher net interest margin, a negative provision for credit losses, a significant increase in treasury management fees, a reduction in wholesale funds, and continuing strength in asset quality metrics. As evidenced by the ongoing expansion of local deposits, we remain committed to funding earning asset growth with local deposit generation." Second quarter highlights include: Return on average assets of 1.5 percent and return on average equity of 14.0 percent Tangible book value per common share of $38.42 as of June 30, 2026, up 9 percent (annualized) and over 7 percent since December 31, 2025, and June 30, 2025, respectively Net revenue growth of nearly 13 percent compared to the prior-year second quarter, including net interest income expansion of nearly 16 percent Improved net interest margin, largely reflecting lower cost of funds, commercial loan growth, and continued upward repricing of matured fixed-rate loans and securities Noteworthy increases in treasury management fees and payroll services fees of approximately 29 percent and 9 percent, respectively Continued strength in commercial loan pipeline Ongoing low level of nonperforming assets and nominal past due loans and loan charge-offs Significant reduction in loan-to-deposit ratio from approximately 100 percent as of June 30, 2025, to approximately 93 percent as of June 30, 2026, primarily reflecting strong local deposit generation and the onboarding of Eastern Michigan Bank's deposit portfolio Notable decreases in brokered deposits of $110 million during the first six months of 2026, and $179 million during the twelve months ended June 30, 2026, leaving a balance of only $20.1 million that is scheduled to mature in late 2026 Robust tangible and regulatory capital positions Operating Results Net revenue, consisting of net interest income and noninterest income, was $68.8 million during the second quarter of 2026, up $7.8 million, or 12.8 percent, from $61.0 million during the prior-year second quarter. Net interest income during the current-year second quarter was $57.3 million, up $7.8 million, or 15.7 percent, from $49.5 million during the respective 2025 period mainly due to growth in earning assets and a higher net interest margin. Eastern Michigan Bank's net interest income t...