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What changed in MERCANTILE BANK CORP's 10-K — 2024 vs 2025

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Paragraph-level year-over-year comparison of MERCANTILE BANK CORP's 2024 and 2025 10-K annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2025 report.

+128 added−101 removedSource: 10-K (2026-02-27) vs 10-K (2025-03-03)

Top changes in MERCANTILE BANK CORP's 2025 10-K

128 paragraphs added · 101 removed · 95 edited across 5 sections

Item 1. Business

Business — how the company describes what it does

47 edited+11 added−4 removed70 unchanged
Biggest changeHighlights for 2024 included expanding the impact of Mercantile Community Partners LLC to facilitate low-income housing tax credits, completion and posting of the 2024 Corporate Sustainability Report, hiring a fulltime Director of Enterprise Excellence at the end of 2024 to oversee all ongoing ESG and sustainability efforts, implementation of a sustainability reporting platform, increased support of first-time home buyers mortgage programs, and over 27,500 hours of volunteering in the community completed by employees.
Biggest changeHighlights for 2025 included continued growth of MCP to facilitate low-income housing tax credits and our investment in energy tax credits, completion of the Enterprise Excellence Report, full utilization of a sustainability reporting platform for data tracking, continued support of first-time home buyer mortgage programs, and over 28,000 hours of volunteering in the community completed by employees. 5 Table of Contents Lending Policy As a routine part of our business, we make loans to businesses and individuals located within our market areas.
It is not possible to predict the nature and impact of future changes in monetary and fiscal policies. Regulation and Supervision Banks and bank holding companies, like many other financial institutions, are regulated under a variety of federal and state statutes and the regulations that implement those statutes.
It is not possible to predict the nature and impact of future changes in monetary and fiscal policies. Regulation and Supervision Bank holding companies and banks, like many other financial institutions, are regulated under a variety of federal and state statutes and the regulations that implement those statutes.
During the third quarter of 2013, we filed an election to become a financial holding company, which election became effective April 14, 2014. Mercantile Insurance Center, Inc. (“our insurance company”), a subsidiary of our bank, commenced operations during 2002 to offer insurance products.
During the third quarter of 2013, we filed an election to become a financial holding company, which election became effective April 14, 2014. Mercantile Insurance Center, Inc. (“our insurance company”), a subsidiary of Mercantile Bank, commenced operations during 2002 to offer insurance products.
The permitted non-banking activities generally include those limited activities that the Federal Reserve Board has determined, by order or regulation as of the day prior to enactment of the Gramm-Leach-Bliley Act, to be so closely related to banking as to be a proper incident to banking.
The permitted non-banking activities generally include limited activities that the Federal Reserve Board has determined, by order or regulation as of the day prior to enactment of the Gramm-Leach-Bliley Act, to be so closely related to banking as to be a proper incident to banking.
We hire people who connect with, listen to and deliver the best solutions to customers and team members. Through a personalized and systematic recruiting process, our experienced team of Human Resources Business Partners are devoted to working with Hiring Managers and matching candidate skills and experience to a position where they can thrive.
We hire people who connect with, listen to and deliver the best solutions to customers and team members. Through a personalized and systematic recruiting process, our experienced team of Human Resources Business Partners is devoted to working with Hiring Managers and matching candidate skills and experience to a position where they can thrive.
In addition, the policy provides general guidelines as to environmental analysis, loans to employees, executive officers and directors, problem loan identification, maintenance of an allowance for credit losses, loan review and grading, mortgage and consumer lending, and other matters relating to our lending practices. The Board of Directors has delegated significant lending authority to officers of our bank.
In addition, the policy provides general guidelines as to environmental analysis, loans to employees, executive officers and directors, problem loan identification, maintenance of an allowance for credit losses, loan review and grading, mortgage and consumer lending, and other matters relating to our lending practices. The Board of Directors has delegated significant lending authority to officers of our banks.
Approximately 87% of our eligible employees participate in our medical benefit plans, which include a health savings account plan in which we pay the full monthly premiums. We offer our employees generous paid time off for vacations, holidays, sick time and bereavement, along with pay-it-forward initiatives and paid volunteer time.
Approximately 82% of our eligible employees participate in our medical benefit plans, which include a health savings account plan in which we pay the full monthly premiums. We offer our employees generous paid time off for vacations, holidays, sick time and bereavement, along with pay-it-forward initiatives and paid volunteer time.
However, on May 24, 2018, EGRRCPA amended certain provisions of the Dodd-Frank Act to tailor them to the specific circumstances of various categories of financial institutions and transactions. Many of the statutes and regulations under which we and our bank operate may change in the future, which may significantly impact our business.
However, on May 24, 2018, EGRRCPA amended certain provisions of the Dodd-Frank Act to tailor them to the specific circumstances of various categories of financial institutions and transactions. Many of the statutes and regulations under which we and our banks operate may change in the future, which may significantly impact our business.
Among the equity investments permitted for our bank under various conditions and subject in some instances to amount limitations, are shares of a subsidiary insurance agency, mortgage company, real estate company, or Michigan business and industrial development company, such as our insurance company.
Among the equity investments permitted for our banks under various conditions and subject in some instances to amount limitations, are shares of a subsidiary insurance agency, mortgage company, real estate company, or Michigan business and industrial development company, such as our insurance company.
Subject to the limitations of the Bank Holding Company Act, we are also permitted to make portfolio investments in equity securities and to make equity investments in subsidiaries engaged in a variety of non-banking activities, which include real estate-related activities such as community development, real estate appraisals, arranging equity financing for commercial real estate, and owning and operating real estate used substantially by our bank or acquired for its future use.
Subject to the limitations of the Bank Holding Company Act, we are also permitted to make portfolio investments in equity securities and to make equity investments in subsidiaries engaged in a variety of non-banking activities, which include real estate-related activities such as community development, real estate appraisals, arranging equity financing for commercial real estate, and owning and operating real estate used substantially by our banks or acquired for their future use.
The net proceeds from the issuance of the floating rate notes were used for a variety of purposes, including contributions to our bank as capital to provide support for asset growth and the funding of stock repurchase programs and certain acquisitions.
The net proceeds from the issuance of the floating rate notes were used for a variety of purposes, including contributions to Mercantile Bank as capital to provide support for asset growth and the funding of stock repurchase programs and certain acquisitions.
Hiring long-term successful team members is critical to our success. We believe our successful hiring practices are reflected in our annual turnover rate of 10%, which is consistently below our peers. 4 Table of Contents Employee Safety and Health.
Hiring long-term successful team members is critical to our success. We believe our successful hiring practices are reflected in our annual turnover rate of 12%, which is consistently below our peers. 4 Table of Contents Employee Safety and Health.
Federal law restricts our ability to borrow from our bank by limiting the aggregate amount we may borrow and by requiring that all loans to us be secured in designated amounts by specified forms of collateral.
Federal law restricts our ability to borrow from our banks by limiting the aggregate amount we may borrow and by requiring that all loans to us be secured in designated amounts by specified forms of collateral.
Our growth and earnings performance may be impacted by the statutes administered by, and the regulations and policies of, various governmental regulatory authorities. Those regulatory authorities include, but are not limited to, the Federal Reserve Board, the FDIC, the Michigan Department of Insurance and Financial Services, the Internal Revenue Service and state taxing authorities.
Our growth and earnings performance may be impacted by the statutes administered by, and the regulations and policies of, various governmental regulatory authorities. Those regulatory authorities include, but are not limited to, the FDIC, the Michigan Department of Insurance and Financial Services, the Internal Revenue Service and state taxing authorities.
These permitted non-banking activities include, among other things: operating a mortgage company, finance company, or factoring company; performing certain data processing operations; providing certain investment and financial advice; acting as an insurance agent for certain types of credit-related insurance; leasing property on a full-payout, nonoperating basis; and providing discount securities brokerage services for customers.
These permitted non-banking activities include, among other things: operating a mortgage company (engaged in certain limited functions), finance company, or factoring company; performing certain data processing operations; providing certain investment and financial advice; acting as an insurance agent for certain types of credit-related insurance; leasing property on a full-payout, nonoperating basis; and providing discount securities brokerage services for customers.
We were organized on July 15, 1997, under the laws of the State of Michigan, primarily for the purpose of holding all of the stock of Mercantile Bank (“our bank”), and of such other subsidiaries as we may acquire or establish. Our bank commenced business on December 15, 1997.
We were organized on July 15, 1997, under the laws of the State of Michigan, primarily for the purpose of holding all of the stock of Mercantile Bank, and of such other subsidiaries as we may acquire or establish. Mercantile Bank commenced business on December 15, 1997.
Consumer loans generally have shorter terms and higher interest rates and usually involve more credit risk than single-family residential real estate loans because of the type and nature of the collateral. Our bank has a home equity line of credit program.
Consumer loans generally have shorter terms and higher interest rates and usually involve more credit risk than single-family residential real estate loans because of the type and nature of the collateral. Our banks have a home equity line of credit program.
Under another such exception, in certain circumstances and with prior notice to or approval of the FDIC, our bank could invest up to 10% of its total assets in the equity securities of a subsidiary corporation engaged in the acquisition and development of real property for sale or the improvement of real property by construction or rehabilitation of residential or commercial units for sale or lease.
Under another such exception, in certain circumstances and with prior notice to or approval of the FDIC, our banks could invest up to 10% of their total assets in the equity securities of a subsidiary corporation engaged in the acquisition and development of real property for sale or the improvement of real property by construction or rehabilitation of residential or commercial units for sale or lease.
The principal investments of our bank holding company are the investments in the common stock of our bank, the common securities of our trusts, and the community development tax credit investments made by MCP. Other funds of our bank holding company may be invested from time to time in various debt instruments.
The principal investments of our bank holding company are the investments in the common stocks of our banks, the common securities of our trusts, and the community development tax credit investments made by MCP. Other funds of our bank holding company may be invested from time to time in various debt instruments.
While our insurance company is permitted to engage in the insurance agency activities described above by virtue of our financial holding company status, neither we nor any of our subsidiaries currently engage in these expanded activities. 3 Table of Contents Our bank is subject to restrictions imposed by federal and state laws and regulations.
While our insurance company is permitted to engage in the insurance agency activities described above by virtue of our financial holding company status, neither we nor any of our subsidiaries currently engage in these expanded activities. 3 Table of Contents Mercantile Bank and Eastern Michigan Bank are subject to restrictions imposed by federal and state laws and regulations.
These lending authorities, however, are typically used only in rare circumstances where timing is of the essence. Loan requests exceeding $5.0 million require approval by the Officers Loan Committee, and loan requests exceeding $15.0 million, up to the legal lending limit of $101.4 million, require approval by our bank’s Board of Directors.
These lending authorities, however, are typically used only in rare circumstances where timing is of the essence. At Mercantile Bank, loan requests exceeding $5.0 million require approval by the Officers Loan Committee, and loan requests exceeding $15.0 million, up to Mercantile Bank's legal lending limit of $101.4 million, require approval by Mercantile Bank's Board of Directors.
The Board of Directors believes this empowerment, supported by our strong credit culture and the significant experience of our commercial lending staff, enables us to be responsive to our customers. The loan policy specifies lending authority for our lending officers with amounts based on the experience level and ability of each lender.
The Board of Directors believes this empowerment, supported by our strong credit culture and the significant experience of our commercial lending staff, enables us to be responsive to our customers. Our loan policies specify lending authority for our lending officers with amounts based on the experience level and ability of each lender.
Among other things, these restrictions limit the transactions our bank conducts with us, our other subsidiaries or other affiliates, limit our securities borrowing or lending, derivatives, and repurchase transactions with us, our other subsidiaries or other affiliates, limit investments in stock or other securities that we issue, limit the taking of such stock or securities as collateral for loans to any borrower, and limit acquisitions of assets or services from, and sales of certain types of assets to, us, our other subsidiaries or other affiliates.
Among other things, these restrictions limit the transactions Mercantile Bank and Eastern Michigan Bank conduct with us, our other subsidiaries or other affiliates, limit our securities borrowing or lending, derivatives, and repurchase transactions with us, our other subsidiaries or other affiliates, limit investments in stock or other securities that we issue, limit the taking of such stock or securities as collateral for loans to any borrower, and limit acquisitions of assets or services from, and sales of certain types of assets to, us, our other subsidiaries or other affiliates.
Our loan officers and loan managers are generally able to approve loans ranging from $0.25 million to $2.5 million. We have established higher approval limits for our bank’s President and Chief Executive Officer and Chief Lending Officer, ranging from $4.0 million up to $10.0 million.
Our loan officers and loan managers are generally able to approve loans ranging from $0.25 million to $2.5 million. We have established higher approval limits for Mercantile Bank's President and Chief Executive Officer and Mercantile Bank's Chief Commercial Banking Officer, ranging from $4.0 million up to $10.0 million.
Our bank’s Board of Directors may alter our bank’s investment policy without shareholder approval at any time. Additional detail and information relative to the securities portfolio is incorporated by reference to Management’s Discussion and Analysis and Note 2 of the Notes to Consolidated Financial Statements included in this Annual Report. Available Information We maintain an internet website at www.mercbank.com.
Our banks' Boards of Directors may alter our banks' investment policies without shareholder approval at any time. Additional detail and information relative to the securities portfolio is incorporated by reference to Management’s Discussion and Analysis and Note 2 of the Notes to Consolidated Financial Statements included in this Annual Report. Available Information We maintain an internet website at www.mercbank.com.
Total commercial real estate loans (as defined in the guidance) represented 256% and 247% of total regulatory capital as of December 31, 2024 and 2023, respectively, with both ratios being below the maximum guideline of 300%.
Total commercial real estate loans (as defined in the guidance) represented 253% and 256% of total regulatory capital as of December 31, 2025 and 2024, respectively, with both ratios being below the maximum guideline of 300%.
We are also subject to periodic examinations by the Federal Reserve Board. The Bank Holding Company Act limits the activities of bank holding companies to banking and the management of banking organizations and to certain permitted non-banking activities.
We are also subject to periodic examinations by the Federal Reserve Board. The Bank Holding Company Act limits the activities of bank holding companies and their subsidiaries to banking and the management of banks and to certain permitted non-banking activities.
The financial services industry is also likely to become more competitive as further technological advances enable more companies to provide financial services. We also face new competition as a result of expansion into new markets. Human Capital As of December 31, 2024, we employed 648 full-time and 34 part-time persons.
The financial services industry is also likely to become more competitive as further technological advances enable more companies to provide financial services. We also face new competition as a result of expansion into new markets. Human Capital As of December 31, 2025, we employed 744 full-time and 42 part-time persons.
As of December 31, 2024, loans placed in nonaccrual status totaled $5.7 million, or 0.1% of total loans, compared to $3.4 million, or 0.1% of total loans, at December 31, 2023. We had no loans past due 90 days or more and still accruing interest at year-end 2024 or 2023.
As of December 31, 2025, loans placed in nonaccrual status totaled $7.9 million, or 0.2% of total loans, compared to $5.7 million, or 0.1% of total loans, at December 31, 2024. We had no loans past due 90 days or more and still accruing interest at year-end 2025 or 2024.
Commercial real estate loans, consisting of non-owner occupied, owner occupied, multi-family and residential rental, and vacant land, land development, and residential construction loans, totaled 52.6% and 50.2% of our total loans as of December 31, 2024 and 2023, respectively.
Commercial real estate loans, consisting of non-owner occupied, owner occupied, multi-family and residential rental, and vacant land, land development, and residential construction loans, totaled 52.8% and 52.6% of our total loans as of December 31, 2025 and 2024, respectively.
The majority of our commercial real estate portfolio is located within our primary geographic footprint within the state of Michigan. As of December 31, 2024 and 2023, 90.7% and 90.3%, respectively, of our commercial real estate loans were for projects located within the state of Michigan.
The majority of our commercial real estate portfolio is located within our primary geographic footprint within the state of Michigan. As of December 31, 2025 and 2024, 91.0% and 90.7%, respectively, of our commercial real estate loans were for projects located within the state of Michigan.
Our bank has no present plans to make such an investment. Real estate acquired by our bank in satisfaction of or foreclosure upon loans may be held by our bank for specified periods. Our bank is also permitted to invest in such real estate as is necessary for the convenient transaction of its business.
Our banks have no present plans to make such an investment. Real estate acquired by our banks in satisfaction of or foreclosure upon loans may be held by our banks for specified periods. Our banks are also permitted to invest in such real estate as is necessary for the convenient transaction of their business.
Our Bank ’ s Investments . Our bank may invest its funds in a wide variety of debt instruments and may participate in the federal funds market with other depository institutions. Subject to certain exceptions, our bank is prohibited from investing in equity securities.
Our Bank s' Investments . Our banks may invest their funds in a wide variety of debt instruments and may participate in the federal funds market with other depository institutions. Subject to certain exceptions, our banks are prohibited from investing in equity securities.
An Agency and Institution Agreement was entered into among our insurance company, our bank and Hub International for the purpose of providing programs of mass marketed personal lines of insurance.
Our Insurance Company Our insurance company acquired an existing shelf insurance agency effective April 15, 2002. An Agency and Institution Agreement was entered into among our insurance company, Mercantile Bank and Hub International for the purpose of providing programs of mass marketed personal lines of insurance.
These statutes include, among others, the Dodd-Frank Wall Street Reform and Consumer Protection Act (the “Dodd-Frank Act”), the Economic Growth, Regulatory Relief, and Consumer Protection Act (“EGRRCPA”), the Truth in Lending Act, the Truth in Savings Act, the Equal Credit Opportunity Act, the Fair Credit Reporting Act, the Expedited Funds Availability Act, the Community Reinvestment Act, the Real Estate Settlement Procedures Act, the USA PATRIOT Act, the FACT Act, the Gramm-Leach-Bliley Act, the Sarbanes Oxley Act, the Bank Secrecy Act, electronic funds transfer laws, redlining laws, predatory lending laws, antitrust laws, environmental laws, money laundering laws, privacy laws, state usury statutes, and statutes relating to fiduciaries.
These statutes include, among others, the Bank Holding Company Act, the Dodd-Frank Wall Street Reform and Consumer Protection Act (the “Dodd-Frank Act”), the Economic Growth, Regulatory Relief, and Consumer Protection Act (“EGRRCPA”), the Truth in Lending Act, the Truth in Savings Act, the Equal Credit Opportunity Act, the Fair Credit Reporting Act, the Expedited Funds Availability Act, the Community Reinvestment Act, the Real Estate Settlement Procedures Act, the FACT Act, the Gramm-Leach-Bliley Act, the Sarbanes Oxley Act, the Bank Secrecy Act of 1970, as amended by Title III of the Uniting and Strengthening America by Providing Appropriate Tools Required to Intercept and Obstruct Terrorism Act of 2001, electronic funds transfer laws, redlining laws, predatory lending laws, antitrust laws, environmental laws, anti-money laundering laws, privacy laws, state usury statutes, and statutes relating to fiduciaries.
In order to maintain our status as a financial holding company, we and our bank must satisfy statutory requirements regarding capitalization, management and compliance with the Community Reinvestment Act. As a financial holding company, we are permitted to engage in a broader range of activities under the Bank Holding Company Act that are permitted for bank holding companies.
In order to maintain our status as a financial holding company, we, Mercantile Bank, and Eastern Michigan Bank, must satisfy statutory requirements regarding capitalization, management and compliance with the Community Reinvestment Act.
The loan review function works closely with senior management, although it functionally reports to the Board of Directors. Using a risk-based approach to selecting credits for review, our loan review program covered approximately 69% of total commercial loans outstanding during 2024. In addition, a random sampling of retail loans is reviewed each quarter.
Using a risk-based approach to selecting credits for review, our loan review program covered approximately 65% of total commercial loans outstanding during 2025. In addition, a random sampling of retail loans is reviewed each quarter.
The eStatement adoption rate continues to grow, and we were approaching above 61% adoption at year-end 2024. Our online accounts payable system has also enabled us to significantly reduce paper and printing, and saves time. Every effort is made to recycle all paper, and we continue to offer community paper shredding events.
Our online accounts payable system has also enabled us to significantly reduce paper and printing and save time. Every effort is made to recycle all paper, and we continue to offer periodic community secure paper shredding events.
The following table presents the composition of the commercial real estate portion of the total loan portfolio as of December 31, 2024 and 2023: (Dollars in thousands) December 31, 2024 December 31, 2023 Balance % Balance % Real estate – owner occupied Industrial $ 364,327 7.9 % $ 347,923 8.1 % Automotive 109,408 2.4 117,076 2.7 Office 66,354 1.4 72,498 1.7 Retail 63,303 1.4 46,202 1.1 Medical Office 33,997 0.7 34,641 0.8 Restaurants 32,946 0.7 30,482 0.7 Other 78,502 1.8 68,845 1.6 Subtotal 748,837 16.3 717,667 16.7 Real estate – non-owner occupied Office 265,774 5.8 271,448 6.3 Retail 249,239 5.4 256,338 6.0 Industrial 315,867 6.9 233,503 5.4 Assisted Living 102,480 2.2 131,426 3.1 Hotel 152,591 3.3 100,594 2.3 Other 42,453 0.9 42,375 1.0 Subtotal 1,128,404 24.5 1,035,684 24.1 Vacant land, land development, and residential construction 66,936 1.5 74,753 1.7 Real estate – multi-family and residential rental 475,819 10.3 332,609 7.7 Total $ 2,419,996 52.6 % $ 2,160,713 50.2 % 7 Table of Contents Single-Family Residential Real Estate Loans.
The following table presents the composition of the commercial real estate portion of the total loan portfolio as of December 31, 2025 and 2024: (Dollars in thousands) December 31, 2025 December 31, 2024 Balance % Balance % Real estate – owner occupied Industrial $ 369,576 7.7 % $ 364,327 7.9 % Automotive 103,852 2.2 109,408 2.4 Office 75,943 1.6 66,354 1.4 Retail 75,921 1.6 63,303 1.4 Medical Office 38,367 0.8 33,997 0.7 Restaurants 20,270 0.4 32,946 0.7 Other 94,940 1.9 78,502 1.8 Subtotal 778,869 16.2 748,837 16.3 Real estate – non-owner occupied Office 245,998 5.1 265,774 5.8 Retail 240,206 5.0 249,239 5.4 Industrial 341,479 7.1 315,867 6.9 Assisted Living 69,771 1.4 102,480 2.2 Hotel 152,299 3.2 152,591 3.3 Other 60,921 1.2 42,453 0.9 Subtotal 1,110,674 23.0 1,128,404 24.5 Vacant land, land development, and residential construction 117,373 2.4 66,936 1.5 Real estate – multi-family and residential rental 537,224 11.2 475,819 10.3 Total $ 2,544,140 52.8 % $ 2,419,996 52.6 % 7 Table of Contents Single-Family Residential Real Estate Loans.
Loans are originated for general business purposes, including working capital, accounts receivable financing, machinery and equipment acquisition, and commercial real estate financing, including new construction and land development.
Lending Activity Commercial Loans. Our commercial lending group originates commercial loans primarily in our market areas. Our commercial lenders have extensive commercial lending experience, with most having at least ten years’ experience. Loans are originated for general business purposes, including working capital, accounts receivable financing, machinery and equipment acquisition, and commercial real estate financing, including new construction and land development.
The Sustainability Committee is a cross-functional management committee, with oversight from the Governance and Nominating Committee and the Board of Directors, that assists us in: (1) setting general strategies relating to ESG matters; (2) developing, implementing, and monitoring initiatives and policies based on those strategies; (3) recommending communications with employees, investors, and shareholders with respect to ESG matters; and (4) monitoring and assessing developments relating to, and improving our understanding of, ESG matters.
The Enterprise Excellence Committee is a cross-functional management committee, with oversight from the Governance and Nominating Committee and the Board of Directors, that assists us in: (1) establishing a cadence of improvement throughout our banks for process efficiency and effectiveness, (2) monitoring and assessing developments related to improving our banks' understanding and execution of governance, environment, and community matters, and (3) recommending communications with employees, investors and stakeholders with respect to governance, environment, and community matters.
Additionally, we have implemented recycling stations at all of our office locations to divert cardboard, plastic and metal items from landfills. Water bottle refill stations also aid to reduce plastic bottle usage. Our Sustainability Committee supports our ongoing commitment to environmental, health and safety, corporate social responsibility, corporate governance, sustainability, and other public policy matters relevant to our organization.
Additionally, we have implemented an employee battery recycling program at larger office locations and recycling stations at many of our office locations to divert cardboard, plastic, and metal items from landfills. Water bottle refill stations also aid to reduce plastic bottle usage.
Over the past five years, we have reduced our use of natural gas by 35% and electricity by 40%. All renovation and expansion projects involve the donation of former office furniture to non-profit organizations. We continue to strive for the reduction of mail and paper usage through the promotion of customer eStatement adoption.
When applicable, renovation and expansion projects involve the donation of former office furniture to non-profit organizations. We continue to strive for the reduction of mail and paper usage through the promotion of customer eStatement adoption. The eStatement adoption rate is holding steady at 61% as of year-end 2025.
Courier service is provided to certain commercial customers, and safe deposit boxes are available at a vast majority of our office locations. Our bank does not have trust powers. Our Insurance Company Our insurance company acquired an existing shelf insurance agency effective April 15, 2002.
Our banks also enable their customers to conduct certain loan and deposit transactions by personal computer and through mobile applications. Courier service is provided to certain commercial customers, and safe deposit boxes are available at a vast majority of our office locations. Our banks do not have trust powers.
Our bank, through its 43 office locations, provides commercial banking services primarily to small- to medium-sized businesses and retail banking services. Our bank’s main office is located in Grand Rapids, Michigan, and our operations are centered around the West and Central portions of Michigan.
Mercantile Bank’s main office is located in Grand Rapids, Michigan, and its operations are centered around the West and Central portions of Michigan. Mercantile Bank also has banking offices located in the metropolitan Detroit area, Traverse City, Petoskey, and Midland. Eastern Michigan Bank's main office is located in Croswell, Michigan, and its operations are centered around Eastern Michigan.
Our Bank Our bank is a state banking company that operates under the laws of the State of Michigan, pursuant to a charter issued by the Michigan Department of Insurance and Financial Services. Our bank’s deposits are insured to the maximum extent permitted by law by the Federal Deposit Insurance Corporation (“FDIC”).
Our principal source of future operating funds is expected to be dividends from our banks. Our Banks Our banks are state banking companies that operate under the laws of the State of Michigan, pursuant to charters issued by the Michigan Department of Insurance and Financial Services.
Our bank owns 11 automated teller machines ("ATM") and 33 video banking machines at a majority of our office locations that participate in the ACCEL/EXCHANGE and PLUS regional network systems, as well as other ATM networks throughout the country. Our bank also enables customers to conduct certain loan and deposit transactions by personal computer and through mobile applications.
Our banks make secured and unsecured commercial, construction, mortgage and consumer loans, and accept checking, savings and time deposits. Our banks collectively own 16 automated teller machines ("ATM") and 37 video banking machines, which are located at our office locations that participate in the ACCEL/EXCHANGE and PLUS regional network systems, as well as other ATM networks throughout the country.
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Mercantile Community Partners ("MCP"), our subsidiary, began operations during 2023 to invest in community development tax credit investments. Our expenses have generally been paid using cash dividends from our bank. Our principal source of future operating funds is expected to be dividends from our bank.
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Mercantile Community Partners ("MCP"), our subsidiary, began operations during 2023 to invest in community development tax credit investments. On July 22, 2025, we entered into a merger agreement with Eastern Michigan Financial Corporation, the bank holding company for Eastern Michigan Bank.
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We also have banking offices located in the metropolitan Detroit, Michigan area, Traverse City, Michigan, Petoskey, Michigan, Saginaw, Michigan, and Midland, Michigan. Our bank makes secured and unsecured commercial, construction, mortgage and consumer loans, and accepts checking, savings and time deposits.
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Eastern Michigan Financial Corporation shareholders had the right to receive 0.7116 shares of Mercantile Bank Corporation stock and $32.32 in exchange for each share of Eastern Michigan Financial Corporation stock they owned. The merger was completed on December 31, 2025, and Eastern Michigan Bank operates alongside Mercantile Bank Corporation’s existing bank, Mercantile Bank (collectively, “our banks”).
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Our bank maintains a Clawback Policy; an Insider Trading Policy; Code of Ethics; Corporate Governance Guidelines; an Anti-Bribery and Anti-Corruption Policy; an Anti-Money Laundering, Bank Secrecy Act, Customer Identification and Due Diligence Programs Letter; Vendor and Supplier Code of Conduct; Environmental Policy; Human Rights Policy; and Supplier Diversity Program Policy, which are reviewed and approved by our Board of Directors at least annually and can be found on our website. 5 Table of Contents Lending Policy As a routine part of our business, we make loans to businesses and individuals located within our market areas.
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We plan for our banks to operate alongside each other until the conversion of our core processor is completed in the first quarter of 2027, at which time we plan to consolidate Eastern Michigan Bank into Mercantile Bank.
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We generally apply an in-house lending limit that is significantly less than our bank’s legal lending limit. Lending Activity Commercial Loans. Our commercial lending group originates commercial loans primarily in our market areas. Our commercial lenders have extensive commercial lending experience, with most having at least ten years’ experience.
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Prior to completing the merger, we were required to obtain approval from the Federal Reserve Board, which we did on December 16, 2025. See Note 17 – Business Combinations for additional information regarding the merger. Our expenses have generally been paid using cash dividends from Mercantile Bank.
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Our banks' deposits are insured to the maximum extent permitted by law by the Federal Deposit Insurance Corporation (“FDIC”). Our banks, through their combined 54 office locations, provide commercial banking services, primarily to small- to medium-sized businesses, and retail banking services.
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As a financial holding company, we are permitted to engage in a broader range of activities under the Bank Holding Company Act than are permitted for bank holding companies.
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As a member bank of the Federal Reserve System, Eastern Michigan Bank is subject to comprehensive regulation and supervision by the Federal Reserve Board and, as applicable, state banking authorities. Eastern Michigan Bank's operations are governed by the Federal Reserve Act and related regulations, including capital adequacy, liquidity, affiliate transaction, insider lending, and safety and soundness requirements.
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It is also subject to applicable federal and state consumer protection laws, the Bank Secrecy Act and anti-money laundering regulations, and, as an FDIC-insured institution, deposit insurance assessments and related requirements. These regulatory requirements may affect Eastern Michigan Bank's business operations, growth strategies, and financial performance.
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Our Enterprise Excellence Committee supports our ongoing commitment to environmental, health and safety, corporate social responsibility, corporate governance, sustainability, and other public policy matters relevant to our organization.
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The Enterprise Excellence Committee met three times during 2025.
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At Eastern Michigan Bank, loan requests exceeding $1.5 million require approval by the Officers Credit Committee, and loan requests exceeding $6.0 million, up to Eastern Michigan Bank's legal lending limit of $23.9 million, require approval by Eastern Michigan Bank's Board of Directors. We generally apply in-house lending limits that are significantly less than our banks' legal lending limits.

Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

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Biggest changeFailure to observe such guidance may result in supervisory identification of unsafe or unsound practices or other deficiencies in risk management or other areas that do not constitute violations of law or regulation. Regulatory Risks We are subject to significant government regulation, and any regulatory changes may adversely affect us.
Biggest changeFailure to observe such guidance may result in supervisory identification of unsafe or unsound practices or other deficiencies in risk management or other areas that do not constitute violations of law or regulation. 15 Table of Contents Risks Related to the Acquisition of Eastern Michigan Financial Corporation We may not be able to successfully integrate the business of Eastern Michigan Financial Corporation The success of the acquisition of Eastern Michigan Financial Corporation completed on December 31, 2025 depends, in part, on our ability to successfully integrate the operations, systems, and personnel of the acquired business with our own.
To date, we have not experienced a significant compromise, significant data loss or any material financial losses related to cybersecurity attacks, but our systems and those of our customers and third-party service providers are under constant threat, and it is possible that we could experience a significant event in the future.
To date, we have not experienced a significant compromise, significant data loss or any material financial losses related to cybersecurity attacks, but our systems and those of our customers and third-party service providers are under constant threat, and it is possible that we could experience a significant event in the future.
The unanticipated loss of our executive officers, or any of our other senior managers, could have an adverse effect on our growth and performance. In addition, we continue to depend on our key commercial loan officers. Several of our commercial loan officers are responsible, or share responsibility, for generating and managing a significant portion of our commercial loan portfolio.
The unanticipated loss of our executive officers, or any of our other senior managers, could have an adverse effect on our growth and performance. In addition, we continue to depend on our key commercial bankers. Several of our commercial bankers are responsible, or share responsibility, for generating and managing a significant portion of our commercial loan portfolio.
While our risk management framework monitors various types of risks and applies risk mitigation techniques including for environmental risks, and while we have been conscious of our own carbon footprint and have established a Sustainability Committee, introduction of new climate-related legislation and related compliance costs as well as the unpredictable effects of climate change on us or our customers could have a negative impact on our business, financial condition and results of operations, even if temporary in nature. 13 Table of Contents Failure to meet the rapidly changing ESG expectations or standards, or achieve our ESG goals, could adversely affect our business, results of operations, financial condition or stock price.
While our risk management framework monitors various types of risks and applies risk mitigation techniques including for environmental risks, and while we have been conscious of our own carbon footprint and have established a Enterprise Excellence Committee, introduction of new climate-related legislation and related compliance costs as well as the unpredictable effects of climate change on us or our customers could have a negative impact on our business, financial condition and results of operations, even if temporary in nature. 13 Table of Contents Failure to meet the rapidly changing ESG expectations or standards, or achieve our ESG goals, could adversely affect our business, results of operations, financial condition or stock price.
Our focus on commercial lending may result in a larger concentration of loans to small businesses. As a result, we may assume different or greater lending risks than other banks. We make various assumptions and judgments about the collectibility of our loan portfolio and provide an allowance for credit losses based on several factors.
Our focus on commercial lending may result in a larger concentration of loans to small businesses. As a result, we may assume different or greater lending risks than other banks. We make various assumptions and judgments about the collectability of our loan portfolio and provide an allowance for credit losses based on several factors.
The loss of any of these commercial loan officers could adversely affect our loan portfolio and performance, and our ability to generate new loans. Many of our key employees have signed agreements with us agreeing not to compete with us in one or more of our markets for specified time periods if they leave employment with us.
The loss of any of these commercial bankers could adversely affect our loan portfolio and performance, and our ability to generate new loans. Many of our key employees have signed agreements with us agreeing not to compete with us in one or more of our markets for specified time periods if they leave employment with us.
If any of these developments has a material effect on our reputation, our business will suffer. Our business is subject to operational risks. We, like most financial institutions, are exposed to many types of operational risks, including the risk of fraud by employees or outsiders, unauthorized transactions by employees or operational errors.
If any of these developments have a material effect on our reputation, our business will suffer. Our business is subject to operational risks. We, like most financial institutions, are exposed to many types of operational risks, including the risk of fraud by employees or outsiders, unauthorized transactions by employees or operational errors.
If we were to fail to enter into such an agreement, or fail to comply with the terms of such agreement, the Federal Reserve may impose more severe restrictions on our activities, including requiring us to cease and desist activities permitted under the Bank Holding Company Act of 1956.
If we were to fail to enter into such an agreement or fail to comply with the terms of such agreement, the Federal Reserve Board may impose more severe restrictions on our activities, including requiring us to cease and desist activities permitted under the Bank Holding Company Act.
Although we maintain a system of controls designed to keep operational risks at appropriate levels, there can be no assurance that we will not suffer losses from operational risks in the future that may be material in amount. 15 Table of Contents We face the risk of cyber-attack to our computer systems.
Although we maintain a system of controls designed to keep operational risks at appropriate levels, there can be no assurance that we will not suffer losses from operational risks in the future that may be material in amount. We face the risk of cyber-attack to our computer systems.
If our bank were to fail to maintain its status of “well-capitalized” under the applicable regulatory capital regulations, we may lose our status as a financial holding company and be subjected to a consent agreement requiring us to bring our bank back to a “well-capitalized” status. Such an agreement may impose restrictions on our activities.
If our banks were to fail to maintain their status of “well-capitalized” under the applicable regulatory capital regulations, we may lose our status as a financial holding company and be subjected to a consent agreement requiring us to bring our banks back to a “well-capitalized” status. Such an agreement may impose restrictions on our activities.
As of December 31, 2024, approximately 54% of our deposits were uninsured, and we rely on these deposits for liquidity.
As of December 31, 2025, approximately 54% of our deposits were uninsured, and we rely on these deposits for liquidity.
For additional information, see “Critical Accounting Estimates” beginning on page F-3 of this Annual Report and “Note 1 – Summary of Significant Accounting Policies” beginning on page F-36 of this Annual Report. 14 Table of Contents We continually encounter technological change, and we may have fewer resources than our competitors to continue to invest in technological improvements.
For additional information, see “Critical Accounting Estimates” beginning on page F-3 of this Annual Report and “Note 1 – Summary of Significant Accounting Policies” beginning on page F-35 of this Annual Report. We continually encounter technological change, and we may have fewer resources than our competitors to continue to invest in technological improvements.
Damage to our reputation could materially harm our business. Our relationship with many of our clients is predicated upon our reputation as a fiduciary and a service provider that adheres to the highest standards of ethics, service quality and regulatory compliance.
Our relationship with many of our clients is predicated upon our reputation as a fiduciary and a service provider that adheres to the highest standards of ethics, service quality and regulatory compliance.
In addition, our implementation of certain new technologies, such as those related to artificial intelligence, automation and algorithms, in our business processes may have unintended consequences due to their limitations or our failure to use them effectively. Failure to successfully manage technological changes could have a material adverse effect on our business, financial condition and results of operations.
In addition, our implementation of certain new technologies, such as those related to artificial intelligence, automation and algorithms, in our business processes may have unintended consequences due to their limitations or our failure to use them effectively.
The implementation, amendment or repeal of federal financial services laws or regulations may limit our business opportunities, impose additional costs on us, impact our revenues or the value of our assets, or otherwise adversely affect our business, financial condition or results of operations. 16 Table of Contents Minimum capital requirements may adversely affect our ability (and that of our bank) to pay cash dividends, reduce our profitability, or otherwise adversely affect our business, financial condition or results of operations.
The implementation, amendment or repeal of federal financial services laws or regulations may limit our business opportunities, impose additional costs on us, impact our revenues or the value of our assets, or otherwise adversely affect our business, financial condition or results of operations.
If the manner in which SOFR is calculated is changed, that change may result in a change in the amount of interest that accrues on the SOFR-linked instruments.
There can be no assurance that SOFR will not be discontinued or fundamentally altered in a manner that is materially adverse to the interests of investors in SOFR-linked instruments. If the manner in which SOFR is calculated is changed, that change may result in a change in the amount of interest that accrues on the SOFR-linked instruments.
We are subject to extensive capital regulations imposed by federal and state banking regulations. These regulations, among other things, establish minimum requirements to qualify as a “well-capitalized” institution.
Minimum capital requirements may adversely affect our ability (and that of our banks) to pay cash dividends, reduce our profitability, or otherwise adversely affect our business, financial condition or results of operations. We are subject to extensive capital regulations imposed by federal and state banking regulations. These regulations, among other things, establish minimum requirements to qualify as a “well-capitalized” institution.
Effective January 1, 2022, we replaced the 30-Day Libor Rate with the CME Term SOFR Rate for all new floating rate commercial loan commitments. On or about June 30, 2023, all commercial loans tied to the 30-Day Libor Rate converted to an equivalent fallback SOFR Rate.
Changes in SOFR could adversely affect the amount of interest that accrues on SOFR-linked instruments. Effective January 1, 2022, we replaced the 30-Day Libor Rate with the CME Term SOFR Rate for all new floating rate commercial loan commitments.
Given our commitment to ESG, we actively manage these issues and have established and publicly announced certain goals, commitments and targets which we may refine or even expand further in the future. These goals, commitments and targets reflect our current plans and aspirations and are not guarantees that we will be able to achieve them.
Any goals, commitments or targets that we publish reflect our current plans and aspirations and are not guarantees that we will be able to achieve them.
Because SOFR is published by the Federal Reserve Bank of New York ("FRBNY") based on data received from other sources, we have no control over its determination, calculation or publication. There can be no assurance that SOFR will not be discontinued or fundamentally altered in a manner that is materially adverse to the interests of investors in SOFR-linked instruments.
On or about June 30, 2023, all commercial loans tied to the 30-Day Libor Rate converted to an equivalent fallback SOFR Rate. Because SOFR is published by the Federal Reserve Bank of New York ("FRBNY") based on data received from other sources, we have no control over its determination, calculation or publication.
The banking industry is undergoing technological changes with frequent introductions of new technology-driven products and services, such as those related to artificial intelligence, automation and algorithms. In addition to better serving customers, the effective use of technology increases efficiency and enables financial institutions to reduce costs.
The banking industry is undergoing technological changes with frequent introductions of new technology-driven products and services. We are subject to intense competition from both other financial institutions and from non-bank entities, including FinTech companies.
Removed
Further, there is uncertainty around the accounting standards and climate-related disclosures associated with emerging laws and reporting requirements and the related costs to comply with the emerging regulations. Changes in SOFR could adversely affect the amount of interest that accrues on SOFR-linked instruments.
Added
Given our commitment to ESG, we annually publish an Enterprise Excellence Report, which reports on certain goals, commitments and achievements related to ESG, and more broadly to enterprise excellence. Our ESG program and our Enterprise Excellent Report are continually evolving and may change in focus, content or scope in the future.
Added
Technology has lowered the barriers to entry, with customers having a growing variety of traditional and nontraditional alternatives, such as crowdfunding, digital wallets, cryptocurrencies, and money transfer services.
Added
Failure to successfully manage technological changes could have a material adverse effect on our business, financial condition and results of operations. 14 Table of Contents Damage to our reputation could materially harm our business.
Added
The integration process may involve operational complexities, potential customer confusion or dissatisfaction, technology and system modifications, and the risk of service interruptions.
Added
There is no assurance that the integration process, including the core processor transition, alignment of debit card programs, and alignment of employee benefit programs, will proceed as planned or that we will achieve the anticipated benefits and synergies of the acquisition.
Added
Unanticipated issues, delays, or costs may arise, and we may encounter obstacles that could prevent us from realizing the expected advantages of the transaction. If we are unable to effectively integrate the acquired business, our business, financial condition, and results of operations could be materially and adversely affected.
Added
The integration of the acquired operations will require significant time and attention from our management team The process of integrating Eastern Michigan Financial Corporation and its subsidiaries involves significant efforts and resources from our management and employees. These integration activities include aligning systems, procedures, and personnel, as well as harmonizing corporate cultures and business practices.
Added
As a result, our management team and staff may be required to devote substantial time and attention to integration matters, which could detract from their ability to focus on the day-to-day management and operation of our business.
Added
This diversion of resources and attention may result in missed business opportunities, reduced productivity, or delays in responding to market developments and customer needs. In addition, integration efforts may create uncertainty or dissatisfaction among customers, employees, or other stakeholders, which could negatively impact our relationships and retention rates.
Added
If the integration process is not managed effectively, or if unforeseen challenges arise, our business, financial condition, and results of operations could be materially and adversely affected.
Added
We may not be able to realize all of the benefits of the acquisition We may not realize the anticipated benefits of the acquisition, including potential synergies, cost savings, growth opportunities, or enhanced competitive position. The failure to achieve these benefits could adversely affect our business, financial condition, and results of operations.
Added
We have incurred indebtedness in connection with the acquisition We entered into a credit agreement with U.S. Bank National Association for a $30 million term loan to fund a portion of the purchase price and related expenses of the acquisition.
Added
This senior indebtedness requires us to dedicate a portion of our cash flows to debt service payments, which reduces the funds available for other operational needs, capital expenditures, and strategic opportunities.
Added
This increased debt level also makes us more vulnerable to adverse changes in general economic, industry, or competitive conditions, and exposes us to the risk of rising interest rates since the indebtedness bears variable interest.
Added
Furthermore, our indebtedness may limit our flexibility in responding to changes in our business environment and could place us at a competitive disadvantage compared to other companies with less debt. It may also restrict our ability to obtain additional financing on favorable terms, or at all, should the need arise.
Added
Our ability to meet our debt obligations will depend on our future performance, which is subject to a range of factors, including general economic, regulatory, and competitive conditions, many of which are beyond our control.
Added
If we are unable to generate sufficient cash flow to service our debt or to refinance our indebtedness as it matures, our business, financial condition, and results of operations could be materially and adversely affected.
Added
We are in the process of converting our core processing system We have initiated the transfer of our core processing system to Jack Henry & Associates, the core processor used by Eastern Michigan Financial Corporation and Eastern Michigan Bank. This conversion is a complex and resource-intensive project that is not expected to be completed until the first quarter of 2027.
Added
During this period, we may encounter operational challenges, including potential disruptions to daily banking activities, data migration errors, or delays in integrating systems and processes. There is also a risk of temporary interruptions in customer service or inadvertent disclosure of sensitive customer information as a result of the system conversion.
Added
Any such disruptions or errors could negatively impact customer relationships, cause reputational harm, and result in additional costs. Moreover, the successful completion of the conversion depends on the effective coordination of our personnel, vendors, and third-party service providers.
Added
Failure to complete the core processing system conversion in a timely and efficient manner, or to realize the anticipated benefits of the new system, could adversely affect our business, financial condition, and results of operations. 16 Table of Contents Regulatory Risks We are subject to significant government regulation, and any regulatory changes may adversely affect us.

Item 1C. Cybersecurity

Cybersecurity — threats and controls disclosure

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Biggest changeThe Board of Directors is responsible for reviewing and approving the ICSPP and ICSIRP at least annually and monitoring material risks facing our company. The Board recently added a member who possesses specialized expertise in cybersecurity matters. Director Sara A.
Biggest changeOur Board of Directors is responsible for reviewing and approving the ICSPP and ICSIRP at least annually and monitoring material risks facing our company. In January 2025, our Board of Directors added a member who possesses specialized expertise in cybersecurity matters. Director Sara A.
For more information on how cybersecurity risk could materially affect our company's business strategy, results of operations, or financial condition, please refer to Item 1A Risk Factors. Governance Our company recognizes the importance of safeguarding company and customer information. Therefore, the Board of Directors recognizes that the protection of this information ranks as one of our highest priorities.
For more information on how cybersecurity risk could materially affect our company's business strategy, results of operations, or financial condition, please refer to Item 1A Risk Factors. Governance Our company recognizes the importance of safeguarding company and customer information. Therefore, our Board of Directors recognizes that the protection of this information ranks as one of our highest priorities.
As part of its oversight responsibilities, the Board of Directors is responsible for discussing with the SMT our company’s major risk exposures, such as cybersecurity, and the steps management has taken to monitor and control those exposures, including our risk assessment and risk management policies.
As part of its oversight responsibilities, our Board of Directors is responsible for discussing with the SMT our company’s major risk exposures, such as cybersecurity, and the steps management has taken to monitor and control those exposures, including our risk assessment and risk management policies.
The Board of Directors also monitors our compliance with legal and regulatory requirements and the risks associated therewith. On a regular basis, our Tech Oversight Committee reviews with the SMT significant areas of risk exposure involving cybersecurity.
Our Board of Directors also monitors our compliance with legal and regulatory requirements and the risks associated therewith. On a regular basis, our Tech Oversight Committee reviews with the SMT significant areas of risk exposure involving cybersecurity.
Our Chief Information Security Officer (the "CISO") is primarily responsible for this cybersecurity component and is a key member of the risk management organization, reporting directly to the Senior Management Team (“SMT”) and our Tech Oversight Committee. Our Tech Oversight Committee includes members of our Board and management.
Our Chief Information Security Officer (the "CISO") is primarily responsible for this cybersecurity component and is a key member of the risk management organization, reporting directly to the Senior Management Team (“SMT”) and our Tech Oversight Committee. Our Tech Oversight Committee includes members of our Board of Directors and management.
The CISO prepares reports on IT general controls and cybersecurity metrics for the SMT and Tech Oversight Committee periodically. The Board of Directors meets with the CISO periodically to discuss cybersecurity. 19 Table of Contents
The CISO prepares reports on IT general controls and cybersecurity metrics for the SMT and Tech Oversight Committee periodically. Our Board of Directors meets with the CISO periodically to discuss cybersecurity. 19 Table of Contents
Schmidt currently serves as chief information security officer for US Foods and executive sponsor of the West Michigan Cyber Security Consortium. The Board has tasked the SMT with overseeing efforts to develop, implement and maintain an effective information and cybersecurity program. The SMT designates the CISO who also serves as the IRT leader.
Schmidt currently serves as chief information security officer for US Foods and executive sponsor of the West Michigan Cyber Security Consortium. Our Board of Directors has tasked the SMT with overseeing efforts to develop, implement and maintain an effective information and cybersecurity program. The SMT designates the CISO, who also serves as the IRT leader.

Item 2. Properties

Properties — owned and leased real estate

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Biggest changeWe have larger banking facilities in Kalamazoo, Lansing, Mt. Pleasant and West Branch. The remaining banking offices generally range in size from 1,200 to 3,200 square feet, based on the location and number of employees located at the facility. All of our banking offices are owned by our bank except for ten that are rented under various operating lease agreements.
Biggest changeMercantile Bank has larger banking facilities in Kalamazoo, Lansing, Mt. Pleasant and West Branch. In addition, certain functions operate out of our standalone facility located in Alma. The remaining banking offices generally range in size from 1,200 to 3,200 square feet, based on the location and number of employees located at the facility.
Item 2. Properties. Our headquarters is located in our bank’s main office facility in Grand Rapids, Michigan. Our bank operates 43 banking offices primarily concentrated throughout Western and Central Michigan, most of which are full-service facilities. We also have banking offices located in the metropolitan Detroit, Michigan area, Traverse City, Michigan, Petoskey, Michigan, Saginaw, Michigan, and Midland, Michigan.
Item 2. Properties. Our headquarters is located in Mercantile Bank’s main office facility in Grand Rapids, Michigan. Mercantile Bank operates 43 banking offices primarily concentrated throughout Western and Central Michigan, most of which are full-service facilities. Mercantile Bank also has banking offices located in the metropolitan Detroit area, Traverse City, Petoskey, and Midland.
In addition, certain functions operate out of our standalone facility located in Alma, Michigan. We consider our properties and equipment to be well maintained, in good operating condition and capable of accommodating current growth forecasts.
Eastern Michigan Bank operates 11 banking offices throughout Eastern Michigan, most of which are full-service facilities. All of our banking offices are owned by our banks except for ten that are rented under various operating lease agreements. We consider our properties and equipment to be well maintained, in good operating condition and capable of accommodating current growth forecasts.

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

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Biggest changeHigh Low Dividend 2024 First Quarter $ 42.82 $ 34.25 $ 0.35 Second Quarter 41.11 33.46 0.35 Third Quarter 51.21 38.02 0.36 Fourth Quarter 52.98 40.85 0.36 2023 First Quarter $ 37.00 $ 29.39 $ 0.33 Second Quarter 31.56 23.89 0.33 Third Quarter 36.73 26.95 0.34 Fourth Quarter 41.93 30.12 0.34 20 Table of Contents Holders of our common stock are entitled to receive dividends that the Board of Directors may declare from time to time.
Biggest changeHigh Low Dividend 2025 First Quarter $ 51.89 $ 40.57 $ 0.37 Second Quarter 47.82 37.76 0.37 Third Quarter 50.52 43.71 0.38 Fourth Quarter 50.41 42.75 0.38 2024 First Quarter $ 42.82 $ 34.25 $ 0.35 Second Quarter 41.11 33.46 0.35 Third Quarter 51.21 38.02 0.36 Fourth Quarter 52.98 40.85 0.36 20 Table of Contents Holders of our common stock are entitled to receive dividends that the Board of Directors may declare from time to time.
As of December 31, 2024, repurchases aggregating $6.8 million were available to be made under the current repurchase program. 21 Table of Contents Repurchases made during the fourth quarter of 2024 are detailed in the table below. The approximate dollar value that may yet be purchased under the plans or programs is presented in thousands.
As of December 31, 2025, repurchases aggregating $6.8 million were available to be made under the current repurchase program. 21 Table of Contents Repurchases made during the fourth quarter of 2025 are detailed in the table below. The approximate dollar value that may yet be purchased under the plans or programs is presented in thousands.
(d) Maximum Number of (c) Total Shares or Number of Approximate Shares Dollar Value Purchased that May Yet as Part of Be (a) Total Publicly Purchased Number of (b) Average Announced Under the Shares Price Paid Plans or Plans or Period Purchased Per Share Programs Programs October 1 – 31 0 $ NA 0 $ 6,818 November 1 – 30 0 NA 0 6,818 December 1 – 31 0 NA 0 6,818 Total 0 $ NA 0 $ 6,818 22 Table of Contents Shareholder Return Performance Graph Set forth below is a line graph comparing the yearly percentage change in the cumulative total shareholder return on our common stock (based on the last reported sales price of the respective year) with the cumulative total return of the Nasdaq Composite Index and the KBW Nasdaq Bank Index from December 31, 2019 through December 31, 2024.
(d) Maximum Number of (c) Total Shares or Number of Approximate Shares Dollar Value Purchased that May Yet as Part of Be (a) Total Publicly Purchased Number of (b) Average Announced Under the Shares Price Paid Plans or Plans or Period Purchased Per Share Programs Programs October 1 – 31 0 $ NA 0 $ 6,818 November 1 – 30 0 NA 0 6,818 December 1 – 31 0 NA 0 6,818 Total 0 $ NA 0 $ 6,818 22 Table of Contents Shareholder Return Performance Graph Set forth below is a line graph comparing the yearly percentage change in the cumulative total shareholder return on our common stock (based on the last reported sales price of the respective year) with the cumulative total return of the Nasdaq Composite Index and the KBW Nasdaq Bank Index from December 31, 2020 through December 31, 2025.
We and our bank are subject to regulatory capital requirements administered by state and federal banking agencies. Failure to meet the various capital requirements can initiate regulatory action that could have a direct material effect on our financial statements.
We and our banks are subject to regulatory capital requirements administered by state and federal banking agencies. Failure to meet the various capital requirements can initiate regulatory action that could have a direct material effect on our financial statements.
Dividend payments and extensions of credit to us from our bank are subject to legal and regulatory limitations, generally based on capital levels and current and retained earnings, imposed by law and regulatory agencies with authority over our bank.
Dividend payments and extensions of credit to us from our banks are subject to legal and regulatory limitations, generally based on capital levels and current and retained earnings, imposed by law and regulatory agencies with authority over our banks.
The following is based on an investment of $100 on December 31, 2019 in our common stock, the Nasdaq Composite Index and the KBW Nasdaq Bank Index, with dividends reinvested where applicable.
The following is based on an investment of $100 on December 31, 2020 in our common stock, the Nasdaq Composite Index and the KBW Nasdaq Bank Index, with dividends reinvested where applicable.
In addition, we estimate that there were approximately 7,000 beneficial owners of our common stock who own their shares through brokers or banks.
In addition, we estimate that there were approximately 7,500 beneficial owners of our common stock who own their shares through brokers or banks.
On January 16, 2025, our Board of Directors declared a cash dividend on our common stock in the amount of $0.37 per share that will be paid on March 19, 2025 to shareholders of record as of March 7, 2025.
On January 16, 2025, our Board of Directors declared a cash dividend on our common stock in the amount of $0.37 per share that was paid on March 19, 2025, to shareholders of record as of March 7, 2025.
Additional repurchases may be made in future periods under the authorized plan or a new plan, which would also likely be funded from cash dividends paid to us from our bank.
Additional repurchases may be made in future periods under the authorized plan or a new plan, which would likely be funded from cash dividends paid to us from our banks.
The program may be discontinued at any time. No shares were repurchased during 2023 or 2024. Historically, stock repurchases have been funded from cash dividends paid to us from our bank.
The program may be discontinued at any time. No shares were repurchased during 2024 or 2025. Historically, stock repurchases have been funded from cash dividends paid to us from Mercantile Bank.
We may only pay dividends out of funds that are legally available for that purpose. We are a financial holding company and substantially all of our assets are held by our bank. Our ability to pay dividends to our shareholders depends primarily on our bank’s ability to pay dividends to us.
We may only pay dividends out of funds that are legally available for that purpose. We are a financial holding company and substantially all of our assets are held by our banks. Our ability to pay dividends to our shareholders depends primarily on our banks’ abilities to pay dividends to us.
Item 5. Market for Registrant ’ s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities. Market Information and Holders Our common stock is traded on the Nasdaq Global Select Market under the symbol “MBWM.” At February 28, 2025, there were approximately 1,200 record holders of our common stock.
Item 5. Market for Registrant ’ s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities. Market Information and Holders Our common stock is traded on the Nasdaq Global Select Market under the symbol “MBWM.” As of February 20, 2026, there were approximately 1,200 record holders of our common stock.
On July 13, 2023, our Board of Directors declared a cash dividend on our common stock in the amount of $0.34 per share that was paid on September 13, 2023 to shareholders of record as of September 1, 2023.
On July 17, 2025, our Board of Directors declared a cash dividend on our common stock in the amount of $0.38 per share that was paid on September 17, 2025, to shareholders of record as of September 5, 2025.
On April 13, 2023, our Board of Directors declared a cash dividend on our common stock in the amount of $0.33 per share that was paid on June 14, 2023 to shareholders of record as of June 2, 2023.
On April 17, 2025, our Board of Directors declared a cash dividend on our common stock in the amount of $0.37 per share that was paid on June 18, 2025, to shareholders of record as of June 6, 2025.
On October 12, 2023, our Board of Directors declared a cash dividend on our common stock in the amount of $0.34 per share that was paid on December 13, 2023 to shareholders of record as of December 1, 2023.
On October 16, 2025, our Board of Directors declared a cash dividend on our common stock in the amount of $0.38 per share that was paid on December 17, 2025, to shareholders of record as of December 5, 2025.
On January 12, 2023, our Board of Directors declared a cash dividend on our common stock in the amount of $0.33 per share that was paid on March 15, 2023 to shareholders of record as of March 3, 2023.
On January 15, 2026, our Board of Directors declared a cash dividend on our common stock in the amount of $0.39 per share that will be paid on March 18, 2026, to shareholders of record as of March 6, 2026.
The ability of our bank to pay dividends is also subject to its profitability, financial condition, capital expenditures and other cash flow requirements.
The abilities of our banks to pay dividends are also subject to their profitability, financial condition, capital expenditures and other cash flow requirements.
Removed
Period Ending Index 12/31/19 12/31/20 12/31/21 12/31/22 12/31/23 12/31/24 Mercantile Bank Corporation 100.00 77.96 104.30 103.42 130.12 148.38 NASDAQ Composite Index 100.00 144.92 177.06 119.45 172.77 223.87 KBW NASDAQ Bank Index 100.00 89.69 124.06 97.52 96.65 132.60
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Period Ending Index 12/31/20 12/31/21 12/31/22 12/31/23 12/31/24 12/31/25 Mercantile Bank Corporation 100.00 133.79 132.66 166.90 190.32 212.56 NASDAQ Composite Index 100.00 122.18 82.43 119.22 154.48 187.14 KBW NASDAQ Bank Index 100.00 138.33 108.73 107.76 147.85 196.00

Other MBWM 10-K year-over-year comparisons