Mercantile Bank Corporation · NASDAQ:MBWM
Mercantile Bank — Q4 2025 Earnings Presentation
41 slides from Mercantile Bank's earnings presentation, Jan 20, 2026
Slide 1: Investor Presentation
Investor Presentation January 2026
Slide 2: Forward-Looking Statements
Investor Presentation Forward-Looking Statements This presentation contains statements or demand for products and services; climate information that may constitute forward-looking impact; labor markets; the degree of statements within the meaning of the Private competition by traditional and nontrad
Slide 3: Executive Management Team
Investor Presentation Executive Management Team RAYMOND REITSMA CHARLES CHRISTMAS PRESIDENT AND EVP, CHIEF FINANCIAL OFFICER, CHIEF EXECUTIVE OFFICER AND TREASURER Mr. Reitsma was appointed Mr. Christmas has served as Chief President and Chief Executive Financial Officer at Mercantile since Officer
Slide 4: Financial Performance 2025
VIVIVIWVIWV/. WANVININ Wi, \ Financial Performance 2025
Slide 5: 2025 Performance Highlights
Financial Performance • 11% EPS growth year-over-year • EPS of $5.47 in 2025 versus $4.93 in 2024 EARNINGS • 1.4% ROAA and 14.1% ROAE in 2025 • Net interest margin of 3.47% in 2025 versus 3.58% in 2024 NET INTEREST • Adjustment driven by changes in earning asset mix MARGIN AND NET • The lower intere
Slide 6: ROAA Trend and ROAE Trend
Financial Performance 2025: Continued stability in profitability metrics driven by asset growth, margin stability, solid asset quality, and prudent tax strategies 2024: Shift in profitability metrics driven by significant growth in higher cost deposits due to strategic initiative to reduce loan to d
Slide 7: Historical Trends and Shareholder Value
Company Overview Total Assets Total Loans 9.0% CAGR 8.6% CAGR $8 6.8 $6 6.1 4.6 4.8 5.4 $5 4.3 $6 5.3 4.9 3.9 4.4 $4 3.2 3.5 Billions Billions $4 $3 $2 $2 $1 $0 $0 Historical Trends 2020 2021 2022 2023 2024 2025 2020 2021 2022 2023 2024 2025 and Shareholder Total Deposits TBVPS Value 9.2% CAGR 9.0%
Slide 8: Acquisition of Eastern Michigan Financial Corporation
Company Overview Goodwill Reconciliation Consideration: Acquisition of Cash $ 50,900 Eastern Michigan Common stock (925,013 shares issued at $48.55 per share) Total consideration $ 44,900 95,800 Financial Identifiable assets acquired Corporation Cash and due from banks $ 62,400 Interest-earning depo
Slide 9: Loan to Deposit Ratio
Financial Performance 105% $5,500 99.7% 100% 99.0% Loan to Deposit 97.9% $5,000 Ratio* 95.9% (In millions) 95% Multi year strategic initiative to 91.2% reduce loan-to-deposit ratio $4,500 • Reduced to 91% from 98% over last 90% twelve months 85% $4,000 4Q24 1Q25 2Q25 3Q25 4Q25 Loan to Deposit Ratio
Slide 10: Stable margin and net interest income in a declining interest rate environment
Financial Performance $52mm $51mm $49mm $49mm $50mm $48mm 6% $40mm 4.69% 5% 4.35% 4.34% 4.35% $30mm Stable margin and 4.01% net interest income in 3.41% 3.47% 3.48% 3.49% 3.43% 4% $20mm a declining interest rate environment 3% $10mm $0mm 2% 4Q24 1Q25 2Q25 3Q25 4Q25 Net Interest Income SOFR 90-Day Av
Slide 11: Net Interest Income and Deposits
Financial Performance Change in asset mix as on balance sheet liquidity grows $5.7 $5.9 $5.9 $5.6 $5.7 $90mm $6B $80mm $8.7 $8.0 $10.6 $10.9 $5B $8.3 $70mm Interest Income $60mm $4B Assets $50mm $3B $40mm $75 $74 $72 $74 $71 $30mm $2B $20mm $1B $10mm $0mm $0B 4Q24 1Q25 2Q25 3Q25 4Q25 Net Interest In
Slide 12: Net Interest Margin Reconciliation
Financial Performance 7.0% $55 $52 $51 6.5% $49 $49 $48 $50 6.0% Net Interest Income 5.5% $45 5.80% 5.73% 5.75% 5.74% Net Interest Margin 5.0% 5.52% In millions $40 4.5% Earning Asset Yield 4.69% $35 4.0% 4.35% 4.34% 4.35% 3.5% 4.01% Cost of Funds $30 3.0% 3.41% 3.47% 3.48% 3.49% 3.43% SOFR 90-Day 2
Slide 13: Noninterest Income
Financial Performance Service charges on accounts (+19%) Payroll services (+14%) Mortgage banking income (+6%) Credit and debit card income (+4%) Interest rate swap income (-39%) Earnings on bank owned life insurance (+29%) Other income (-30%) (%) Reflects full year 2025 compared to full year 2024 $
Slide 14: Mortgage Loan Activity
Financial Performance MORTGAGE LOAN ORIGINATIONS $160,000 $140,000 $120,000 (In thousands) $100,000 $80,000 $60,000 Mortgage Loan $40,000 $20,000 Activity $0 4th Qtr 1st Qtr 2nd Qtr 3rd Qtr 4th Qtr 2024 2025 2025 2025 2025 Purchase mortgage loans originated Refinance mortgage loans originated Stable
Slide 15: Noninterest Expense
Financial Performance 57.8% 59.2% $40mm 54.3% 54.8% 55.7% 60% 50% $30mm 40% $20mm 30% 20% $10mm Noninterest 10% Expense $0mm 4Q24 1Q25 2Q25 3Q25 4Q25 0% Other expense Acquisition Costs Data processing costs Furniture and equipment Occupancy Salaries and benefits Efficiency Ratio Overall stable cost
Slide 16: Transferable Energy Tax Credits
Financial Performance $48.4mm Transferable Energy $44.9mm Tax Credits Closed five transferable tax credit deals for a tax benefit of $3.5 million in 2025 Additional benefit driven by investments in tax credit structures $6.8mm $5.1mm $3.5mm $1.7mm Investments in Tax Ammortization Tax Benefit from Tr
Slide 17: Loan Growth
Financial Performance Quarter end core commercial loan growth trends $4.0B $3.92B $3.9B $3.82B $3.8B $3.75B $3.75B $3.71B $3.7B Loan Growth $3.6B Dec-24 Mar-25 Jun-25 Sep-25 Dec-25 Consistent Fundings • Commercial loan focused • Solid historical growth Total Loan Portfolio Growth Trends* • Top tier
Slide 18: Asset Quality
Financial Performance Quarterly Asset Quality Metrics 4th Qtr 1st Qtr 2nd Qtr 3rd Qtr 4th Qtr ($ in thousands) 2024 2025 2025 2025 2025 Gross loan charge-offs $ 3,800 100 0 200 2,800 Recoveries $ 200 200 100 700 200 Asset Quality Net loan charge-offs (recoveries) $ 3,600 (100) (100) (500) 2,600 Net
Slide 19: Loan Portfolio Rate Type and Repricing
Financial Performance Total Loan Portfolio Total Loan Portfolio Rate Type Repricing Breakdown $3.0B $2.5B 0 – 12 Months $2.0B 1 – 5 Years Fixed Rate Loans: 23% $1.5B Over 5 Years Funding sources $1.0B $0.5B designed to match $0.0B Retail Retail Commercial Commercial asset repricing Variable Rate cha
Slide 20: Investment Portfolio
Financial Performance Total Investment Portfolio Composition As of December 31, 2025 As of December 31, 2024 $800,000mm $600mm Unrealized Losses $700,000mm Unrealized Gains $500mm $600,000mm Amortized Cost $500,000mm $400mm Fair Value $400,000mm $300mm $300,000mm $200mm Investment $200,000mm $100mm
Slide 21: Deposits and Sweep Accounts
Financial Performance Deposits and Sweep Accounts $6.0B $5.0B $4.0B $3.0B $2.0B $1.0B $0.0B 4Q24 1Q25 2Q25 3Q25 4Q25 Money Market (+16%) Noninterest-Bearing Checking (+0.1%) Interest-Bearing Checking (+7%) Savings (-7%) Local Time $100,000 & Over (+5%) Local Time Under $100,000 (+7%) Sweep Accounts
Slide 22: Deposit Balances
Financial Performance Personal 35% Business 65% Deposit Balances* ($ in thousands) December 31, 2025 December 31, 2024 Deposits comprised primarily of business accounts Personal Business Personal Business Noninterest-Bearing Checking $ 216,100 1,123,700 194,300 1,070,200 Interest Checking $ 249,800
Slide 23: Large Depositors
Financial Performance Stable Large Depositors Depositors with over $5 million as of December 31, 2025 Total – 87 relationships aggregating $1.6 billion Business/Individual – 65 relationships aggregating $1.5 billion Governmental – 22 relationships aggregating $0.1 billion Large Depositors (Includes
Slide 24: Capital Ratios
Financial Performance Mercantile Bank Corporation Consolidated Capital Ratios 16.00% Capital Ratios 14.00% 12.00% 10.00% Both of Mercantile Bank Corp’s subsidiaries, Mercantile Bank and Eastern Michigan Bank, 8.00% have regulatory capital levels in excess of the amounts necessary to be categorized a
Slide 25: Sources of Liquidity
Financial Performance Availability Sources of Source ($ in thousands) Liquidity* Unsecured Federal Funds Lines of Credit $ 50,000 FHLB of Indianapolis Advance Program $ 777,000 Unpledged Investments $ 491,000 Federal Reserve Discount Window $ 157,000 *As of December 31, 2025 25
Slide 26: Thoughts on 2026
Financial Performance Thoughts on 2026 PRIME / SOFR RATES • No rate changes during 2026 PERFORMANCE METRICS 1st QUARTER 2nd QUARTER 3rd QUARTER 4th QUARTER Loan Growth 5.00%-7.00% 5.00%-7.00% 5.00%-7.00% 5.00%-7.00% (annualized) Net Interest Margin 3.55%-3.65% 3.60%-3.70% 3.65%-3.75% 3.70%-3.80% Fee
Slide 27: Loan Portfolio Characteristics
Loan Portfolio Characteristics Strong Credit Culture Diversified Lending
Slide 28: Total Loans
Strong Credit Culture Total Loans* ($ in thousands) Balance Percentage COMMERCIAL LOANS Commercial and Industrial $ 1,374,500 29% Real Estate – NonOwner Occupied $ 1,110,700 23% Real Estate – Owner Occupied $ 778,900 16% Real Estate – Multi-Family & Residential Rental $ 537,200 11% Real Estate – Lan
Slide 29: Asset Quality Metrics
Strong Credit Culture Asset Quality Metrics Quarter Trends ($ in thousands) • Continued strong asset quality metrics • 12 basis points nonperforming assets to total assets as of December 31, 2025 12/31/24 3/31/25 6/30/25 9/30/25 12/31/25 Net loan charge-offs (recoveries) $ 3,600 (100) (100) (500) 2,
Slide 30: Lending Commitments
Strong Credit Culture Lending Commitments ($ in millions) *Commitments to make loans generally reflect our binding obligations to existing and prospective commercial customers to extend credit, including line of credit facilities secured by accounts receivable and inventory, and term debt secured by
Slide 31: Composition – Commercial Loans
Strong Credit Culture Composition – Commercial Loans* Commercial Wholesale Trade Real Estate - 5% Retail Trade 5% Multi-Family & Transportation & Commercial Residential Warehousing 2% Real Estate - Rental Manufacturing Non-Owner 13% 18% Information Occupied <1% 28% Finance & Construction Insurance 3
Slide 32: Rate Type – Commercial Loans
Strong Credit Culture 22% 78% Floating Rate Commercial Loans Fixed Rate Commercial Loans Rate Type – Commercial Loans* RATE TYPE BREAKDOWN ($ in millions) Balance Floating Rate Commercial Loans $ 3,046,800 Fixed Rate Commercial Loans $ 871,900 Total Commercial Loans $ 3,918,700 *As of December 31, 2
Slide 33: Past Due Loans
Strong Credit Culture Past Due Loans Commercial and Retail Past Due Loans* ($ in millions) Recorded 30–59 60–89 > 89 Balance > Days Past Days Past Days Total Total 89 Days & Due Due Past Due Past Due Current Loans Accruing Commercial and 0.3 – – 0.3 1,374.2 1,374.5 – Industrial $ Vacant Land, Land D
Slide 34: Past Due Loans in Millions
Strong Credit Culture $8.0 11 bps* $7.0 $6.0 as % of $5.0 Total Loans $4.0 Past Due Loans Millions $3.0 $2.0 $1.0 $0.0 30-89 Days Past Due 90 Days & Over Past Due Over 89 Days Past Due & Accruing *As of December 31, 2025 34
Slide 35: FDIC Commercial Real Estate Lending Concentration
Strong Credit Culture FDIC Commercial Real Estate Lending 300% Concentration 290% Guideline for 280% Mercantile Bank 270% 260% 250% Commercial Real Estate Loans / 240% Total Regulatory Capital 230% Generally not to exceed 300% 220% 210% 200% 12/31/2024 3/31/2025 6/30/2025 9/30/2025 12/31/2025 35
Slide 36: Non-Owner Occupied Commercial Real Estate Lending
Strong Credit Culture Non-Owner Occupied Commercial Current NOO CRE Composition Real Estate Lending* Industrial 7% 5% Office 5% • 87% of office NOO CRE is located in Michigan Retail 3% 1% • 34% of office is medical Hotel 1% • Increase in nonperforming NOO CRE loans related to Assisted Living one com
Slide 37: Company Overview
VIVIVIWVIWV/. WANVININ Wi, \ Company Overview
Slide 38: The largest bank founded, headquartered, and serving in Michigan
Company Overview The largest bank founded, headquartered, and MB EMB (1) serving in Michigan. OVERVIEW • Founded in 1997 in Grand Rapids, MI. • $6.8 billion in total assets. • Acquisition of Eastern Michigan Financial Corporation closed December 31, 2025 • More than 750 employees and over 50 locatio
Slide 39: Strategic Areas of Focus
Company Overview Strategic Areas of Focus CLIENT EXPERIENCE • Expand presence in Southeast • Explore use cases for artificial • Deploy new client onboarding and Michigan intelligence deployment servicing technologies • Deploy new and upgraded • Enhance existing technology PEOPLE AND CULTURE software
Slide 40: Product Offering
Company Overview Product Offering Highly competitive commercial and retail capabilities. PEER PRODUCT MBWM BAC JPM FITB CMA Autobooks for Small Business with Electronic Invoicing and Receivables Bill Payment and ACH Cash Management Credit Card Rewards Electric Vehicle
Slide 41: YIN INN INN
YIN INN INN A Mercantile Bank’