Mercantile Bank Corporation · NASDAQ:MBWM
Mercantile Bank — Q1 2026 Earnings Presentation
38 slides from Mercantile Bank's earnings presentation, Apr 21, 2026
Slide 1: Investor Presentation April 2026
Investor Presentation April 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 First Quarter 2026
Financial Performance First Quarter 2026
Slide 5: 1Q26 Performance Highlights
Financial Performance • 9% EPS growth quarter-over-quarter • EPS of $1.32 in 1Q26 vs. $1.21 in 1Q25 EARNINGS1 • 1.4% ROAA and 12.5% ROAE in 1Q26 vs. 1.3% ROAA and 13.3% ROAE in 1Q25 • Net interest margin of 3.55% in 1Q26 vs. 3.47% in 1Q25 NET INTEREST • Driven by lower costs of funds relating to EMB
Slide 6: Historical Trends and Shareholder Value
Financial Performance Total Assets Total Loans 9.0% CAGR 8.6% CAGR $8 6.8 $6 6.1 4.6 4.8 $5 4.3 $6 5.3 5.4 3.9 4.9 3.5 4.4 $4 3.2 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
Slide 7: Loan-to-Deposit Ratio
Financial Performance 105% $5,500 99.7% 100% 99.0% Loan-to-Deposit 95.9% $5,000 Ratio* 95% (In millions) 91.2% 90% 88.9% Multi-year strategic initiative to reduce loan-to-deposit ratio $4,500 • Reduced to 89% from 99% over last twelve months 85% 80% $4,000 1Q25 2Q25 3Q25 4Q25 1Q26 Loan to Deposit Ra
Slide 8: Interest Rate Scenarios
Financial Performance Interest Rate Scenarios Balance Sheet Structure $100mm 50% Supports Stable Net Interest $80mm 40% Income Across Rate Environments $60mm 30% $40mm 20% • Purchases of highly discounted 5.6% 6.7% 7.3% $20mm 2.3% 4.8% 10% callable agency bonds provide -3.5% -2.9% additional protect
Slide 9: Stable margin and net interest income in a declining interest rate environment
Financial Performance $56 8.0% $55 Stable margin and $52 $51 $49 net interest income in 7.0% $50 $49 a declining interest 6.0% 5.73% 5.75% 5.74% 5.52% 5.42% $45 rate environment 5.0% 4.35% 4.35% In millions 4.34% $40 Stable net interest margin 4.01% 4.0% 3.68% • Proactive balance sheet $35 managemen
Slide 10: Solid net interest income in a lower interest rate environment
Financial Performance Change in asset mix as on balance sheet liquidity grows $6.4 $5.7 $5.7 $5.9 $5.9 $90mm $6B $80mm $8 $11 $11 $14 $8 $5B $70mm Interest Income $60mm $4B Assets $50mm $3B $40mm $75 $72 $74 $71 $72 $30mm $2B $20mm $1B $10mm $0mm $0B 1Q25 2Q25 3Q25 4Q25 1Q26 Net Interest Income Inte
Slide 11: Noninterest Income
Financial Performance Service charges on accounts (+35%) Payroll services (+5%) Mortgage banking income (+12%) Credit and debit card income (+17%) Interest rate swap income (+729%) Earnings on bank owned life insurance (+23%) Other income (+249%) (%) Reflects 1Q 2026 compared to 1Q 2025 $12mm $10mm
Slide 12: Mortgage Loan Activity
Financial Performance MORTGAGE LOAN ORIGINATIONS $160,000 $140,000 30,700 28,800 $120,000 55,500 (In thousands) $100,000 59,200 18,900 $80,000 $60,000 111,200 108,000 Mortgage Loan $40,000 81,500 86,000 68,800 $20,000 Activity $0 1st Qtr 2nd Qtr 3rd Qtr 4th Qtr 1st Qtr 2025 2025 2025 2025 2026 Purch
Slide 13: Noninterest Expense
Financial Performance 62% $40mm 59% 55% 56% 60% 54% $30mm 50% 40% $20mm 30% 20% $10mm 10% Noninterest $0mm 0% Expense 1Q25 2Q25 3Q25 4Q25 1Q26 Salaries and benefits Occupancy Furniture and equipment Data processing costs Stable Core Costs Core conversion costs Acquisition costs • Increase in salary
Slide 14: Loan Growth
Financial Performance Quarter End Core Commercial Loan Growth Trends (reflects period end balances) $4.0B 3.94 3.92 $3.9B 3.82 $3.8B 3.75 3.75 $3.7B Loan Growth $3.6B Mar-25 Jun-25 Sep-25 Dec-25 Mar-26 Consistent Fundings • Commercial loan focused • Solid historical growth Total Loan Portfolio Growt
Slide 15: Asset Quality
Financial Performance Quarterly Asset Quality Metrics 1st Qtr 2nd Qtr 3rd Qtr 4th Qtr 1st Qtr ($ in thousands) 2025 2025 2025 2025 2026 Gross loan charge-offs $ 100 0 200 2,800 0 Recoveries $ 200 100 700 200 400 Asset Quality Net loan charge-offs (recoveries) $ (100) (100) (500) 2,600 (400) Net loan
Slide 16: Commercial Total Loan Portfolio Rate Type Repricing Breakdown
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 17: Investment Portfolio Composition
Financial Performance Total Investment Portfolio Composition As of March 31, 2026 As of December 31, 2025 $800mm $800mm Unrealized Losses $700mm $700mm Unrealized Gains $600mm $600mm Amortized Cost $500mm Fair Value $500mm $400mm $400mm $300mm $300mm Investment $200mm $100mm $200mm $100mm Portfolio
Slide 18: Deposits and Sweep Accounts
Financial Performance $6.0B $5.0B Deposits and $4.0B Sweep Accounts* $3.0B $2.0B • 10% growth (annualized) in total deposits in the first quarter 2026 • 15% growth (annualized) in local $1.0B deposits in the first quarter 2026 • Continued reduction in wholesale funding $0.0B 1Q25 2Q25 3Q25 4Q25 1Q26
Slide 19: Deposit Balances
Financial Performance Personal 35% Business 65% Deposit Balances* ($ in thousands) March 31, 2026 December 31, 2025 Deposits comprised primarily of business accounts Personal Business Personal Business Noninterest-Bearing Checking $ 241,100 1,090,900 216,100 1,123,700 Interest Checking $ 253,900 760
Slide 20: Large Depositors
Financial Performance Stable Large Depositors Depositors with over $5 million as of March 31, 2026 Total – 93 relationships aggregating $1.9 billion Business/Individual – 64 relationships aggregating $1.6 billion Governmental – 29 relationships aggregating $0.3 billion Large Depositors (Includes Swe
Slide 21: Capital Ratios
Financial Performance Mercantile Bank Corporation Consolidated Capital Ratios 16.00% Capital Ratios 14.00% 12.00% 10.00% Both of Mercantile Bank Corp’s subsidiaries, Mercantile Bank and Eastern Michigan Bank, 8.00% have regulatory capital levels in excess of the amounts necessary to be categorized a
Slide 22: Sources of Liquidity
Financial Performance Availability Sources of Source ($ in thousands) Liquidity* Unsecured Federal Funds Lines of Credit $ 50,000 FHLB of Indianapolis Advance Program $ 837,000 Unpledged Investments $ 752,000 Federal Reserve Discount Window $ 153,000 *As of March 31, 2026 22
Slide 23: Thoughts on 2026
Financial Performance Thoughts on 2026 PRIME / SOFR RATES • No rate changes during 2026 PERFORMANCE METRICS 2nd QUARTER 3rd QUARTER 4th QUARTER Loan Growth 5.00%-7.00% 5.00%-7.00% 5.00%-7.00% (annualized) Net Interest Margin 3.50%-3.60% 3.55%-3.65% 3.60%-3.70% Fee Income $11.0MM-$12.0MM $11.0MM-$12.
Slide 24: Loan Portfolio Characteristics
Loan Portfolio Characteristics Strong Credit Culture Diversified Lending
Slide 25: Total Loans
Loan Portfolio Characteristics Total Loans* ($ in thousands) Balance Percentage COMMERCIAL LOANS Commercial and Industrial $ 1,429,800 30% Real Estate – NonOwner Occupied $ 1,101,800 23% Real Estate – Owner Occupied $ 799,100 17% Real Estate – Multi-Family & Residential Rental $ 485,200 10% Real Est
Slide 26: Asset Quality Metrics
Loan Portfolio Characteristics Asset Quality Metrics Quarter Trends ($ in thousands) • Continued strong asset quality metrics • 11 basis points nonperforming assets to total assets as of March 31, 2026 3/31/25 6/30/25 9/30/25 12/31/25 3/31/26 Net loan charge-offs (recoveries) $ (100) (100) (500) 2,6
Slide 27: Lending Commitments
Loan Portfolio Characteristics 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 s
Slide 28: Composition – Commercial Loans
Loan Portfolio Characteristics Composition – Commercial Loans 1,2 Wholesale Trade 5% Retail Trade 6% Commercial Real Estate - Transportation & Manufacturing Multi-Family & Warehousing 1% Commercial 19% Residential Real Estate - Information Rental Non-Owner 13% <1% Occupied 28% Construction 7% Financ
Slide 29: Rate Type – Commercial Loans
Strong Credit Culture 23% 77% Floating Rate Commercial Loans Fixed Rate Commercial Loans Rate Type – Commercial Loans* RATE TYPE BREAKDOWN ($ in millions) Balance Floating Rate Commercial Loans $ 3,026,400 Fixed Rate Commercial Loans $ 909,000 Total Commercial Loans $ 3,935,400 *As of March 31, 2026
Slide 30: Past Due Loans
Loan Portfolio Characteristics 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 $ 0.2 – – 0.2 1,429.6 1,429.8 – Industrial Vacant Lan
Slide 31: Past Due Loans
Loan Portfolio Characteristics $8.0 10 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 March 31, 2026 31
Slide 32: FDIC Commercial Real Estate Lending Concentration
Loan Portfolio Characteristics 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% 3/31/2025 6/30/2025 9/30/2025 12/31/2025 3/31/202
Slide 33: Non-Owner Occupied Commercial Real Estate Lending
Loan Portfolio Characteristics Non-Owner Occupied Commercial Current NOO CRE Composition Real Estate Lending* Industrial 7% 5% Retail 5% • 100% of office NOO CRE is located in Michigan Office 3% 2% • 33% of office is medical Hotel 1% • Increase in nonperforming NOO CRE loans related to Assisted Livi
Slide 34: Company Overview
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Slide 35: 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. • $6.9 billion in total assets. • Acquisition of Eastern Michigan Financial Corporation closed December 31, 2025 • More than 760 employees and over 50 locatio
Slide 36: 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 37: 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 38: YIN INN INN
YIN INN INN A Mercantile Bank’