Company Overview - Mercantile Bank (MBWM) is headquartered in Grand Rapids and has experienced a price change of 2.23% this year [3] - The company is currently paying a dividend of $0.38 per share, resulting in a dividend yield of 3.34%, which is higher than the Banks - Midwest industry's yield of 3.28% and the S&P 500's yield of 1.49% [3] Dividend Performance - The current annualized dividend of Mercantile Bank is $1.52, reflecting a 7% increase from the previous year [4] - Over the past five years, the company has increased its dividend five times, achieving an average annual increase of 6.33% [4] - The current payout ratio is 29%, indicating that the company paid out 29% of its trailing 12-month earnings per share as dividends [4] Earnings Growth and Future Outlook - The Zacks Consensus Estimate for 2025 projects earnings of $5.23 per share, representing a year-over-year growth rate of 6.09% [5] - Future dividend growth will depend on earnings growth and the payout ratio [4] Investment Considerations - Mercantile Bank is considered a strong dividend play and is currently rated with a Zacks Rank of 3 (Hold) [6] - The company is positioned as a compelling investment opportunity, especially for income investors [6]

Company Overview - Mercantile Bank (MBWM) is headquartered in Grand Rapids and has experienced a price change of 0.97% this year [3] - The company currently pays a dividend of $0.38 per share, resulting in a dividend yield of 3.38%, which is higher than the Banks - Midwest industry's yield of 3.04% and the S&P 500's yield of 1.49% [3] Dividend Performance - The current annualized dividend of Mercantile Bank is $1.52, reflecting a 7% increase from the previous year [4] - Over the last five years, the company has increased its dividend five times, achieving an average annual increase of 6.33% [4] - The current payout ratio is 29%, indicating that the company paid out 29% of its trailing 12-month earnings per share as dividends [4] Earnings Growth Expectations - For the fiscal year 2025, the Zacks Consensus Estimate projects earnings of $5.23 per share, representing a 6.09% increase from the previous year [5] - The company is positioned as a strong dividend play, appealing to income investors due to its solid earnings growth expectations [6] Investment Considerations - High-growth firms and tech start-ups typically do not offer dividends, while established companies like Mercantile Bank are viewed as better dividend options [6] - The stock currently holds a Zacks Rank of 3 (Hold), indicating a stable investment opportunity [6]

Core Points - Mercantile Bank Corporation will host a conference call on October 21, 2025, at 10 a.m. ET to discuss its third quarter 2025 financial results [1][2] - The earnings release for the third quarter will be available before market opening on the same day [1] - Mercantile Bank Corporation is based in Grand Rapids, Michigan, and has approximately $6.0 billion in assets, making it one of the largest Michigan-based banks [3] Company Information - Mercantile Bank Corporation is the bank holding company for Mercantile Bank, providing financial products and services tailored for businesses, individuals, and governmental units [3] - The company emphasizes exceptional service and community commitment, with its common stock listed on NASDAQ under the symbol "MBWM" [3] - For further information, the company can be followed on various social media platforms and its website [3]

Core Insights - Mercantile Bank, Michigan's largest community bank with approximately $6.2 billion in assets, has selected Jack Henry to enhance its technology infrastructure and support long-term growth strategies [1][6]. - The partnership aims to streamline operations, automate manual processes, and improve system integration through Jack Henry's core processing platform and Enterprise Workflow solution [3][4]. Company Overview - Mercantile Bank, founded in 1997, operates nearly 50 locations across Michigan and offers a diverse range of banking services, including commercial, consumer, municipal, nonprofit, and agricultural banking [2][6]. - Jack Henry, an S&P 500 company, provides financial technology solutions to approximately 7,400 clients, focusing on innovation, collaboration, and user-centric services [5]. Strategic Goals - The collaboration with Jack Henry is expected to facilitate Mercantile Bank's organic growth, market expansion, and strategic acquisitions [4]. - The technology upgrade is designed to enhance customer service and operational efficiency, aligning with Mercantile's mission-driven approach and commitment to community service [4][6].

Company Overview - Mercantile Bank (MBWM) is headquartered in Grand Rapids and operates in the Finance sector, with a stock price change of 8.65% since the beginning of the year [3]. Dividend Information - The company currently pays a dividend of $0.38 per share, resulting in a dividend yield of 3.14%, which is higher than the Banks - Midwest industry's yield of 2.94% and the S&P 500's yield of 1.49% [3]. - The annualized dividend of $1.52 represents a 7% increase from the previous year, with a historical average annual increase of 6.33% over the last five years [4]. - The current payout ratio is 29%, indicating that the company pays out 29% of its trailing 12-month earnings per share as dividends [4]. Earnings Growth Expectations - For the fiscal year, MBWM anticipates solid earnings growth, with the Zacks Consensus Estimate for 2025 at $5.23 per share, reflecting a 6.09% increase from the previous year [5]. Investment Appeal - Dividends are favored by investors as they enhance stock investing profits, reduce overall portfolio risk, and offer tax advantages [5]. - MBWM is characterized as an attractive dividend play and a compelling investment opportunity, holding a Zacks Rank of 1 (Strong Buy) [6].

Company Overview - Mercantile Bank (MBWM) is headquartered in Grand Rapids and has experienced a price change of 0.09% this year [3] - The company currently pays a dividend of $0.37 per share, resulting in a dividend yield of 3.32%, which is higher than the Banks - Midwest industry's yield of 3.19% and the S&P 500's yield of 1.53% [3] Dividend Performance - The annualized dividend of Mercantile Bank is $1.48, reflecting a 4.2% increase from the previous year [4] - Over the past 5 years, the company has increased its dividend 5 times, achieving an average annual increase of 6.33% [4] - The current payout ratio is 29%, indicating that the company pays out 29% of its trailing 12-month earnings per share as dividends [4] Earnings Growth - The Zacks Consensus Estimate for Mercantile Bank's earnings in 2025 is $5.23 per share, with an expected increase of 6.09% from the previous year [5] - The company is viewed as an attractive dividend play and a compelling investment opportunity, holding a Zacks Rank of 1 (Strong Buy) [6]

Part I. Financial Information [Item 1. Financial Statements](index=3&type=section&id=Item%201.%20Financial%20Statements) This section presents the unaudited consolidated financial statements for Mercantile Bank Corporation as of June 30, 2025, and for the three and six-month periods then ended [Consolidated Balance Sheets](index=3&type=section&id=Consolidated%20Balance%20Sheets) As of June 30, 2025, total assets increased to **$6.18 billion** from **$6.05 billion** at year-end 2024, driven by growth in loans and securities available for sale Consolidated Balance Sheet Highlights (in thousands) | Account | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | **Total Assets** | **$6,180,988** | **$6,052,161** | | Loans, net | $4,639,644 | $4,546,327 | | Securities available for sale | $826,415 | $730,352 | | Total cash and cash equivalents | $296,072 | $393,010 | | **Total Liabilities** | **$5,549,469** | **$5,467,635** | | Total deposits | $4,710,472 | $4,698,366 | | Federal Home Loan Bank advances | $356,221 | $387,083 | | **Total Shareholders' Equity** | **$631,519** | **$584,526** | [Consolidated Statements of Income](index=4&type=section&id=Consolidated%20Statements%20of%20Income) For the second quarter of 2025, net income was **$22.6 million**, an increase from **$18.8 million** in Q2 2024, driven by higher net interest income and lower provision for credit losses Key Income Statement Data (in thousands, except per share amounts) | Metric | Q2 2025 | Q2 2024 | H1 2025 | H1 2024 | | :--- | :--- | :--- | :--- | :--- | | Net Interest Income | $49,479 | $47,072 | $98,027 | $94,434 | | Provision for credit losses | $1,600 | $3,500 | $3,700 | $4,800 | | **Net Income** | **$22,618** | **$18,786** | **$42,155** | **$40,348** | | Diluted EPS | $1.39 | $1.17 | $2.60 | $2.50 | [Consolidated Statements of Comprehensive Income (Loss)](index=6&type=section&id=Consolidated%20Statements%20of%20Comprehensive%20Income%20%28Loss%29) Comprehensive income for the first six months of 2025 was **$56.2 million**, a significant increase from **$37.6 million** in the same period of 2024, primarily due to higher net income and positive changes in unrealized gains on securities Comprehensive Income (in thousands) | Metric | Q2 2025 | Q2 2024 | H1 2025 | H1 2024 | | :--- | :--- | :--- | :--- | :--- | | Net Income | $22,618 | $18,786 | $42,155 | $40,348 | | Other comprehensive income (loss), net of tax | $4,901 | $(269) | $14,059 | $(2,757) | | **Comprehensive Income (Loss)** | **$27,519** | **$18,517** | **$56,214** | **$37,591** | [Consolidated Statements of Changes in Shareholders' Equity](index=7&type=section&id=Consolidated%20Statements%20of%20Changes%20in%20Shareholders%27%20Equity) Shareholders' equity increased from **$584.5 million** at the beginning of 2025 to **$631.5 million** at June 30, 2025, primarily due to **$42.2 million** in net income and a **$14.1 million** positive change in accumulated other comprehensive income, partially offset by **$11.8 million** in cash dividends - Key drivers for the increase in shareholders' equity in the first six months of 2025 were net income and a favorable change in net unrealized gains on securities available for sale[21](index=21&type=chunk) [Consolidated Statements of Cash Flows](index=11&type=section&id=Consolidated%20Statements%20of%20Cash%20Flows) For the six months ended June 30, 2025, net cash used in operating activities was **$10.8 million**, and net cash used in investing activities was **$177.3 million**, primarily due to loan originations and securities purchases, resulting in a net decrease in cash and cash equivalents of **$96.9 million** Cash Flow Summary for Six Months Ended June 30 (in thousands) | Cash Flow Category | 2025 | 2024 | | :--- | :--- | :--- | | Net cash from (for) operating activities | $(10,781) | $49,349 | | Net cash for investing activities | $(177,287) | $(168,605) | | Net cash from financing activities | $91,130 | $186,352 | | **Net change in cash and cash equivalents** | **$(96,938)** | **$67,096** | [Notes to Consolidated Financial Statements](index=13&type=section&id=Notes%20to%20Consolidated%20Financial%20Statements) The notes detail accounting policies, financial components, and a significant subsequent merger event, highlighting a **$3.7 million** provision for credit losses in H1 2025, a **$45.3 million** net unrealized loss on securities, and the bank's 'well capitalized' regulatory status - The provision for credit losses was **$3.7 million** for the first six months of 2025, primarily reflecting a net increase in individual allocations, net loan growth, and changes in the economic forecast[60](index=60&type=chunk) - As of June 30, 2025, the bank was categorized as 'well capitalized' under the regulatory framework for prompt corrective action[182](index=182&type=chunk) - On July 22, 2025, the company entered into a definitive merger agreement to acquire Eastern Michigan Financial Corporation (EFIN) for an aggregate transaction value of approximately **$95.8 million**[192](index=192&type=chunk)[193](index=193&type=chunk) [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=54&type=section&id=Item%202.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management attributes strong H1 2025 performance to increased net interest income, lower provision expense, and reduced federal income tax, with total assets growing to **$6.18 billion**, commercial loans increasing by **$114 million**, and nonperforming loans at **0.21%** of total loans, while highlighting the pending merger with Eastern Michigan Financial Corporation - Net income for Q2 2025 was **$22.6 million** (**$1.39** per diluted share), up from **$18.8 million** (**$1.17** per diluted share) in Q2 2024, with H1 2025 net income at **$42.2 million**, up from **$40.3 million** in H1 2024[204](index=204&type=chunk) - Commercial loans grew by **$114 million** in the first six months of 2025, an annualized rate of about **6%**, with a strong commercial loan pipeline of **$237 million** in unfunded commitments[205](index=205&type=chunk) - The overall quality of the loan portfolio remains strong, with nonperforming loans at **0.21%** of total loans as of June 30, 2025[207](index=207&type=chunk) - The effective tax rate for H1 2025 was **15.7%**, down from **20.1%** in H1 2024, primarily due to a **$1.5 million** benefit from the acquisition of transferable energy tax credits[214](index=214&type=chunk) [Item 3. Quantitative and Qualitative Disclosures About Market Risk](index=71&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) The company's primary market risk is interest rate risk, managed through GAP analysis and NII simulation, which indicates a **2.7%** increase in NII for a **100 basis point** rate rise and a **2.9%** decrease for a **100 basis point** rate drop over 12 months - The primary market risk exposure is identified as interest rate risk, with all transactions denominated in U.S. dollars[268](index=268&type=chunk) Net Interest Income Sensitivity Analysis (as of June 30, 2025) | Interest Rate Scenario | Dollar Change (in thousands) | Percent Change | | :--- | :--- | :--- | | Down 400 bps | $(29,500) | (13.1)% | | Down 200 bps | $(15,000) | (6.6)% | | Down 100 bps | $(6,600) | (2.9)% | | Up 100 bps | $6,200 | 2.7% | | Up 200 bps | $12,800 | 5.7% | | Up 300 bps | $19,000 | 8.4% | [Item 4. Controls and Procedures](index=73&type=section&id=Item%204.%20Controls%20and%20Procedures) Management concluded that disclosure controls and procedures were effective as of June 30, 2025, with no material changes to internal control over financial reporting during the quarter - Management concluded that disclosure controls and procedures were effective as of June 30, 2025[280](index=280&type=chunk) - No material changes to internal control over financial reporting occurred during the quarter ended June 30, 2025[281](index=281&type=chunk) Part II. Other Information [Item 1. Legal Proceedings](index=74&type=section&id=Item%201.%20Legal%20Proceedings) The company reports no involvement in any legal proceedings considered material to its financial condition - The company is not involved in any material legal proceedings[283](index=283&type=chunk) [Item 1A. Risk Factors](index=74&type=section&id=Item%201A.%20Risk%20Factors) This section updates risk factors to include those related to the definitive merger agreement with Eastern Michigan Financial Corporation, covering potential non-consummation, integration difficulties, business uncertainties, and substantial transaction costs - On July 22, 2025, Mercantile announced a definitive merger agreement to acquire Eastern Michigan Financial Corporation[285](index=285&type=chunk) - Risks associated with the merger include: - The merger may not be consummated due to failure to meet closing conditions, such as shareholder and regulatory approvals[286](index=286&type=chunk) - Integration may be more difficult, costly, or time-consuming than expected, and anticipated benefits may not be realized[288](index=288&type=chunk) - Uncertainty about the merger's effect could adversely impact business relationships and employee retention[290](index=290&type=chunk) - Substantial non-recurring transaction costs are expected, regardless of whether the merger is completed[292](index=292&type=chunk) [Item 2. Unregistered Sales of Equity Securities and Use of Proceeds](index=76&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) No unregistered sales of equity securities or share repurchases occurred in Q2 2025, with **$6.8 million** remaining available under the existing stock repurchase program - No unregistered sales of equity securities were made in Q2 2025[293](index=293&type=chunk) - No shares were repurchased during the second quarter of 2025. As of June 30, 2025, **$6.8 million** remains available under the existing stock repurchase program[294](index=294&type=chunk)[296](index=296&type=chunk) [Item 6. Exhibits](index=77&type=section&id=Item%206.%20Exhibits) This section lists the exhibits filed with the Form 10-Q, including corporate governance documents, security holder rights instruments, CEO/CFO certifications, and Inline XBRL financial statements

Core Viewpoint - Mercantile Bank (MBWM) has been upgraded to a Zacks Rank 1 (Strong Buy), indicating a positive outlook based on rising earnings estimates, which significantly influence stock prices [1][4][6]. Earnings Estimates and Ratings - The Zacks rating system is solely based on a company's changing earnings picture, tracking the Zacks Consensus Estimate for EPS from sell-side analysts [2]. - The Zacks rating upgrade for Mercantile Bank reflects an improvement in its earnings outlook, which is expected to positively impact its stock price [4][6]. Impact of Earnings Estimate Revisions - There is a strong correlation between changes in earnings estimates and near-term stock price movements, with institutional investors using these estimates to determine fair value [5][7]. - For Mercantile Bank, a 5.4% increase in the Zacks Consensus Estimate over the past three months indicates a positive trend in earnings expectations [9]. Zacks Rank System - The Zacks Rank system classifies stocks into five groups based on earnings estimates, with Zacks Rank 1 stocks historically generating an average annual return of +25% since 1988 [8]. - The upgrade of Mercantile Bank to Zacks Rank 1 places it in the top 5% of Zacks-covered stocks, suggesting potential for market-beating returns in the near term [10][11].

Group 1: Edenred SE (EDNMY) - Edenred is a digital platform for services and payments for companies, employees, and merchants [1] - The company has a Zacks Rank of 1 and a Value Score of B [1] - The Zacks Consensus Estimate for its current year earnings has increased by 2.9% over the last 60 days [1] - Edenred has a price-to-earnings ratio (P/E) of 11.12, significantly lower than the industry average of 32.80 [1] Group 2: Tenet Healthcare Corporation (THC) - Tenet Healthcare is a diversified healthcare services company [2] - The company holds a Zacks Rank of 1 and a Value Score of A [2] - The Zacks Consensus Estimate for its current year earnings has increased nearly 3% over the last 60 days [2] - Tenet Healthcare has a price-to-earnings ratio (P/E) of 12.11, compared to 23.85 for the S&P 500 [2] Group 3: Mercantile Bank Corporation (MBWM) - Mercantile Bank is a bank holding company for Mercantile Bank of Michigan [3] - The company carries a Zacks Rank of 1 and a Value Score of B [3] - The Zacks Consensus Estimate for its current year earnings has increased by 2.9% over the last 60 days [3] - Mercantile Bank has a price-to-earnings ratio (P/E) of 9.81, which is lower than the S&P 500 average of 23.85 [3]

Core Viewpoint - Mercantile Bank Corporation is conducting its Q2 2025 earnings conference call to discuss financial results and future projections [1][3]. Group 1: Company Overview - The conference call features key participants including Nichole Kladder (Chief Marketing Officer), Raymond Reitsma (President and CEO), and Charles Christmas (Executive VP and CFO) [1][3]. - The agenda includes prepared remarks from the CEO and CFO, followed by a Q&A session [4]. Group 2: Financial Results Discussion - The company will present its financial results for the second quarter of 2025, with a focus on revenue, earnings, and capital structure [4].