1 unchanged sentence
CONSOLIDATED BALANCE SHEETS
+Added: September 30,
(Dollars in thousands)
1 unchanged sentence
$ 58,593 $ 56,991
−Removed: Interest-earning assets
+Added: Interest-earning deposits
418,426 336,019
43 unchanged sentences
40,000,000 shares authorized;
−Removed: 16,248,694 shares issued and outstanding at June 30, 2025 and 16,146,374 shares issued and outstanding at December 31, 2024
+Added: 16,253,544 shares issued and outstanding at September 30, 2025 and 16,146,374 shares issued and outstanding at December 31, 2024
303,463 299,705
11 unchanged sentences
(Dollars in thousands except per share amounts)
−Removed: June 30, 2025
−Removed: June 30, 2024
−Removed: June 30, 2025
−Removed: June 30, 2024
+Added: September 30, 2025
+Added: September 30, 2024
+Added: September 30, 2025
+Added: September 30, 2024
Interest income
5 unchanged sentences
1,259 1,056 3,611 3,001
−Removed: Interest-earning assets
+Added: Interest-earning deposits
4,303 3,900 9,374 8,369
42 unchanged sentences
Charitable foundation contributions
+Added: 300 0 306 707
+Added: Acquisition costs
Other expense
19 unchanged sentences
(Dollars in thousands)
−Removed: June 30, 2025
−Removed: June 30, 2024
−Removed: June 30, 2025
−Removed: June 30, 2024
+Added: September 30, 2025
+Added: September 30, 2024
+Added: September 30, 2025
+Added: September 30, 2024
$ 23,758 $ 19,618 $ 65,913 $ 59,967
16 unchanged sentences
Income (Loss)
−Removed: Balances, April 1, 2025
+Added: Balances, July 1, 2025
$ 0 $ 302,294 $ 364,991 $ ( 35,766 ) $ 631,519
5 unchanged sentences
( 6,070 ) ( 6,070 )
−Removed: Net income for the three months ended June 30, 2025
+Added: Net income for the three months ended September 30, 2025
23,758 23,758
Change in net unrealized holding gain (loss) on securities available for sale, net of tax effect
−Removed: Balances, June 30, 2025
+Added: Balances, September 30, 2025
$ 0 $ 303,463 $ 382,679 $ ( 28,512 ) $ 657,630
15 unchanged sentences
( 17,880 ) ( 17,880 )
−Removed: Net income for the six months ended June 30, 2025
+Added: Net income for the nine months ended September 30, 2025
65,913 65,913
1 unchanged sentence
21,313 21,313
−Removed: Balances, June 30, 2025
+Added: Balances, September 30, 2025
$ 0 $ 303,463 $ 382,679 $ ( 28,512 ) $ 657,630
7 unchanged sentences
Income (Loss)
−Removed: Balances, April 1, 2024
+Added: Balances, July 1, 2024
$ 0 $ 297,591 $ 306,804 $ ( 53,244 ) $ 551,151
1 unchanged sentence
Dividend reinvestment plan ( 4,531 shares)
−Removed: Stock grants to directors for retainer fees ( 11,247 shares)
Stock-based compensation expense
1 unchanged sentence
( 5,700 ) ( 5,700 )
−Removed: Net income for the three months ended June 30, 2024
+Added: Net income for the three months ended September 30, 2024
19,618 19,618
1 unchanged sentence
17,129 17,129
−Removed: Balances, June 30, 2024
+Added: Balances, September 30, 2024
$ 0 $ 298,704 $ 320,722 $ ( 36,115 ) $ 583,311
15 unchanged sentences
( 16,771 ) ( 16,771 )
−Removed: Net income for the six months ended June 30, 2024
+Added: Net income for the nine months ended September 30, 2024
59,967 59,967
1 unchanged sentence
14,372 14,372
−Removed: Balances, June 30, 2024
+Added: Balances, September 30, 2024
$ 0 $ 298,704 $ 320,722 $ ( 36,115 ) $ 583,311
3 unchanged sentences
(Dollars in thousands)
−Removed: June 30, 2025
−Removed: June 30, 2024
+Added: September 30, 2025 September 30, 2024
Cash flows from operating activities
+Added: $ 65,913 $ 59,967
Adjustments to reconcile net income to net cash from operating activities
4 unchanged sentences
Proceeds from sales of mortgage loans held for sale
+Added: 313,224 269,166
Origination of mortgage loans held for sale
+Added: ( 305,622 ) ( 271,789 )
Net gain from sales of mortgage loans held for sale
+Added: ( 9,211 ) ( 8,030 )
Net gain from sales and valuation write-downs of foreclosed assets
1 unchanged sentence
Earnings on bank owned life insurance
−Removed: Net (gain) loss on instruments designated at fair value and related derivatives
+Added: ( 1,961 ) ( 2,058 )
+Added: Net loss on instruments designated at fair value and related derivatives
Net change in:
Accrued interest receivable
+Added: ( 1,445 ) ( 2,608 )
+Added: ( 41,402 ) ( 24,233 )
Accrued interest payable and other liabilities
−Removed: Net cash from (for) operating activities
+Added: ( 18,731 ) 4,069
+Added: Net cash from operating activities
+Added: 12,324 41,260
Cash flows from investing activities
Loan originations and payments, net
+Added: ( 13,604 ) ( 248,484 )
Purchases of securities available for sale
+Added: ( 143,155 ) ( 104,523 )
Proceeds from maturities, calls and repayments of securities available for sale
+Added: 48,574 36,542
Proceeds from sales of foreclosed assets
2 unchanged sentences
Net purchases of premises and equipment and lease activity
+Added: ( 6,537 ) ( 7,940 )
Net cash for investing activities
+Added: ( 113,660 ) ( 322,475 )
See accompanying notes to consolidated financial statements.
2 unchanged sentences
(Dollars in thousands)
−Removed: June 30, 2025
−Removed: June 30, 2024
+Added: September 30, 2025 September 30, 2024
Cash flows from financing activities
Net increase in time deposits
−Removed: Net increase (decrease) in all other deposits
+Added: 29,341 93,620
+Added: Net increase in all other deposits
+Added: 84,106 461,360
Net increase (decrease) in securities sold under agreements to repurchase
+Added: 129,978 ( 8,798 )
Payoffs and paydowns of Federal Home Loan Bank advances
+Added: ( 60,862 ) ( 60,827 )
Proceeds from Federal Home Loan Bank advances
+Added: 20,000 10,000
Employee stock purchase plan
1 unchanged sentence
Payment of cash dividends to common shareholders
+Added: ( 17,880 ) ( 16,771 )
Net cash from financing activities
+Added: 185,345 479,228
Net change in cash and cash equivalents
+Added: 84,009 198,013
Cash and cash equivalents at beginning of period
+Added: 393,010 130,533
Cash and cash equivalents at end of period
+Added: $ 477,019 $ 328,546
Supplemental disclosures of cash flows information
Cash paid during the period for:
+Added: $ 98,010 $ 95,035
Federal income tax
4 unchanged sentences
Basis of Presentation :
−Removed: The unaudited financial statements for the six months ended June 30, 2025 include the consolidated results of operations of Mercantile Bank Corporation and its consolidated subsidiaries.
+Added: The unaudited financial statements for the nine months ended September 30, 2025 include the consolidated results of operations of Mercantile Bank Corporation and its consolidated subsidiaries.
These subsidiaries include Mercantile Community Partners, LLC ("MCP") and Mercantile Bank (“our bank”) and its subsidiaries, including Mercantile Insurance Center, Inc.
1 unchanged sentence
In the opinion of management, the information reflects all adjustments (consisting only of normal recurring adjustments) which are necessary in order to make the financial statements not misleading and for a fair presentation of the results of operations for such periods.
−Removed: The results for the period ended June 30, 2025 should not be considered as indicative of results for a full year.
+Added: The results for the period ended September 30, 2025 should not be considered as indicative of results for a full year.
For further information, refer to the consolidated financial statements and footnotes included in our annual report on Form 10 -K for the year ended December 31, 2024 .
2 unchanged sentences
The trusts are not consolidated, but instead we report the subordinated debentures issued to the trusts as a liability.
+Added: Recent Events:
+Added: On July 22, 2025, we entered into a definitive merger agreement ("Merger Agreement") with Eastern Michigan Financial Corporation (“EFIN”), pursuant to which EFIN will merge with and into an acquisition subsidiary of Mercantile, with the acquisition subsidiary as the surviving corporation (the “Merger”).
+Added: Following the Merger, Mercantile will operate for a period of time as a two -bank holding company.
+Added: The newly acquired Eastern Michigan Bank will operate alongside Mercantile’s existing bank, Mercantile Bank, until the first quarter of 2027 at which time Mercantile plans to consolidate Eastern Michigan Bank into Mercantile Bank.
+Added: Under the terms of the agreement, each outstanding share of EFIN’s common stock will be converted into the right to receive $ 32.32 in cash and 0.7116 shares of Mercantile common stock, for an aggregate transaction value of approximately $ 90.3 million based upon the closing price of Mercantile's common stock of $ 43.14 on October 16, 2025.
+Added: The Merger Agreement has been approved by the boards of directors of each of Mercantile and EFIN.
+Added: The parties anticipate that the Merger will close in the fourth quarter of 2025, subject to receiving approval of the Merger Agreement by EFIN’s shareholders and applicable regulatory agencies, and the fulfillment of other customary closing conditions.
Operating Segments:
7 unchanged sentences
In the event of a net loss, our unvested restricted shares are excluded from the calculation of both basic and diluted earnings per share.
−Removed: Approximately 277,000 unvested restricted shares were included in determining both basic and diluted earnings per share for the three and six months ended June 30, 2025 .
−Removed: Approximately 303,000 unvested restricted shares were included in determining both basic and diluted earnings per share for the three and six months ended June 30, 2024 .
+Added: Approximately 277,000 unvested restricted shares were included in determining both basic and diluted earnings per share for the three and nine months ended September 30, 2025 .
+Added: Approximately 311,000 unvested restricted shares were included in determining both basic and diluted earnings per share for the three and nine months ended September 30, 2024 .
+Added: MERCANTILE BANK CORPORATION
+Added: NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
+Added: SIGNIFICANT ACCOUNTING POLICIES (Continued)
Debt Securities :
11 unchanged sentences
Losses are charged against the allowance when the collectability of an available for sale debt security is confirmed or when either of the criteria regarding intent or requirement to sell is met.
−Removed: At June 30, 2025 , and December 31, 2024 , there was no allowance related to the available for sale debt securities portfolio.
+Added: At September 30, 2025 , and December 31, 2024 , there was no allowance related to the available for sale debt securities portfolio.
Interest income includes amortization of purchase premiums and accretion of discounts.
4 unchanged sentences
Federal Home Loan Bank of Indianapolis (“FHLBI”) stock is carried at cost, classified as a restricted security, and periodically evaluated for impairment based on ultimate recovery of par value.
−Removed: MERCANTILE BANK CORPORATION
−Removed: NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
−Removed: SIGNIFICANT ACCOUNTING POLICIES (Continued)
Loans that we have the intent and ability to hold for the foreseeable future or until maturity or payoff are reported at the principal balance outstanding, net of deferred loan fees and costs.
1 unchanged sentence
Loan origination fees, net of certain direct origination costs, are deferred and recognized in interest income using the level-yield method without anticipating prepayments.
−Removed: Net unamortized deferred loan costs amounted to $ 1.8 million and $ 2.2 million at June 30, 2025 , and December 31, 2024 , respectively.
+Added: Net unamortized deferred loan costs amounted to $ 1.7 million and $ 2.2 million at September 30, 2025 , and December 31, 2024 , respectively.
Interest income on commercial loans and mortgage loans is discontinued at the time the loan is 90 days delinquent unless the loan is well-secured and in process of collection.
9 unchanged sentences
Net unrealized losses, if any, are recorded as a valuation allowance and charged to earnings.
−Removed: As of June 30, 2025 and December 31, 2024 , we determined that the fair value of our mortgage loans held for sale totaled $ 28.1 million and $ 16.0 million, respectively.
+Added: As of September 30, 2025 and December 31, 2024 , we determined that the fair value of our mortgage loans held for sale totaled $ 17.7 million and $ 16.0 million, respectively.
Mortgage loans held for sale are generally sold with servicing rights retained.
40 unchanged sentences
Due to the relatively low level of loan losses during the look-back period, we have established a historical loss information factor that has been included in the qualitative factors that are included in the estimation of future credit losses in the periods presented.
−Removed: We recorded a provision for credit losses of $ 3.7 million and $ 4.8 million during the six months ended June 30, 2025 and 2024 , respectively.
−Removed: The provision expense recorded during the first six months of 2025 primarily reflected a net increase in individual allocations, allocations necessitated by net loan growth, and the net impact of changes to the economic forecast.
−Removed: The provision expense recorded during the first six months of 2024 primarily reflected a net increase in individual allocations and allocations required by net loan growth.
−Removed: Accrued interest receivable on loans totaling $ 17.2 million and $ 17.3 million as of June 30, 2025 and December 31, 2024 , respectively, is included in other assets on the Consolidated Balance Sheets.
+Added: We recorded a provision for credit losses of $ 3.9 million and $ 5.9 million during the nine months ended September 30, 2025 and 2024 , respectively.
+Added: The provision expense recorded during the first nine months of 2025 primarily reflected a net increase in specific allocations, changes to the economic forecast, and a net increase in qualitative factors stemming from changes in the makeup of the loan portfolio.
+Added: The impacts of these factors were partially offset by reductions in the reserve related to faster residential mortgage and consumer loan prepayment speeds and the associated reduced average lives of the portfolios and changes in baseline loss rates.
+Added: The provision expense recorded during the first nine months of 2024 primarily reflected a specific allocation for a nonperforming commercial loan relationship, allocations necessitated by net loan growth, a change in the volume and severity of past due loans, nonaccrual loans and adversely classified loans for commercial and industrial loans and a change in the historical loss information qualitative factor for commercial loans, which more than offset the impacts of an improved economic forecast and changes to the loan portfolio composition.
+Added: Accrued interest receivable on loans totaling $ 16.7 million and $ 17.3 million as of September 30, 2025 and December 31, 2024 , respectively, is included in other assets on the Consolidated Balance Sheets.
We elected not to measure an allowance for accrued interest receivable and instead elected to reverse interest income on loans that are placed on nonaccrual status, which is generally when loans become 90 days past due, or earlier if we believe the collection of interest is doubtful.
21 unchanged sentences
Mortgage Banking Activities :
−Removed: Mortgage loans serviced for others totaled $ 1.59 billion and $ 1.55 billion as of June 30, 2025 and December 31, 2024 , respectively.
−Removed: Mortgage loan servicing rights are recognized as assets based on the allocated value of retained servicing rights on mortgage loans sold and totaled $ 12.8 million and $ 12.5 million as of June 30, 2025 and December 31, 2024 , respectively.
+Added: Mortgage loans serviced for others totaled $ 1.62 billion and $ 1.55 billion as of September 30, 2025 and December 31, 2024 , respectively.
+Added: Mortgage loan servicing rights are recognized as assets based on the allocated value of retained servicing rights on mortgage loans sold and totaled $ 13.1 million and $ 12.5 million as of September 30, 2025 and December 31, 2024 , respectively.
Mortgage loan servicing rights are carried at the lower of amortized cost or fair value and are expensed in proportion to, and over the period of, estimated net servicing revenues.
1 unchanged sentence
Any impairment of a grouping is reported as a valuation allowance.
−Removed: The fair value of mortgage servicing rights totaled $ 21.6 million and $ 21.0 million as of June 30, 2025 and December 31, 2024 , respectively.
+Added: The fair value of mortgage servicing rights totaled $ 21.7 million and $ 21.0 million as of September 30, 2025 and December 31, 2024 , respectively.
Servicing fee income is recorded for fees earned for servicing mortgage loans.
9 unchanged sentences
If hedge accounting does not apply, changes in the fair value of derivatives are recognized immediately in current earnings as interest income or expense.
−Removed: We had no derivative instruments designated as hedges as of June 30, 2025 , and December 31, 2024 .
+Added: We had no derivative instruments designated as hedges as of September 30, 2025 , and December 31, 2024 .
The acquisition method of accounting requires that assets and liabilities acquired in a business combination be recorded at fair value as of the acquisition date.
1 unchanged sentence
This typically results in goodwill, the amount by which the cost of net assets acquired in a business combination exceeds their fair value, which is subject to impairment testing at least annually.
−Removed: We review goodwill for impairment on an annual basis as of October 1 or more often if events or circumstances indicate that it is more-likely-than- not that the fair value of a reporting unit is below its carrying value.
−Removed: Based on our annual impairment analysis of goodwill as of October 1, it was determined that the fair value was in excess of its respective carrying value as of October 1, 2024; therefore, goodwill is considered not impaired.
+Added: We review goodwill for impairment on an annual basis as of October 1 during the fourth quarter or more often if events or circumstances indicate that it is more-likely-than- not that the fair value of a reporting unit is below its carrying value.
+Added: Based on our annual impairment analysis of goodwill as of October 1 during the fourth quarter, it was determined that the fair value was in excess of its respective carrying value as of October 1, 2024; therefore, goodwill is considered not impaired.
MERCANTILE BANK CORPORATION
14 unchanged sentences
(Dollars in thousands)
−Removed: June 30, 2025
−Removed: June 30, 2024
−Removed: June 30, 2025
−Removed: June 30, 2024
+Added: September 30, 2025
+Added: September 30, 2024
+Added: September 30, 2025
+Added: September 30, 2024
Service charges on deposit and sweep accounts
38 unchanged sentences
Cost Gains Losses Value
−Removed: June 30, 2025
+Added: September 30, 2025
Government agency debt obligations
19 unchanged sentences
$ 793,422 $ 737 $ ( 63,807 ) $ 730,352
−Removed: Securities with unrealized losses at June 30, 2025 , aggregated by investment category and length of time that individual securities have been in a continuous loss position, are as follows:
+Added: Securities with unrealized losses at September 30, 2025 , aggregated by investment category and length of time that individual securities have been in a continuous loss position, are as follows:
Less than 12 Months
2 unchanged sentences
Value Loss Value Loss Value Loss
−Removed: June 30, 2025
+Added: September 30, 2025
Government agency debt obligations
31 unchanged sentences
In analyzing an issuer’s financial condition, we may consider whether the securities are issued by the federal government or its agencies, whether downgrades by bond rating agencies have occurred and the results of reviews of the issuer’s financial condition.
−Removed: At June 30, 2025 , 747 debt securities with estimated fair values totaling $ 604 million had unrealized losses aggregating $ 48.2 million.
+Added: At September 30, 2025 , 643 debt securities with estimated fair values totaling $ 537 million had unrealized losses aggregating $ 41.0 million.
At December 31, 2024 , 843 debt securities with estimated fair values totaling $ 680 million had unrealized losses aggregating $ 63.8 million.
−Removed: At June 30, 2025 , unrealized losses aggregating $ 38.8 million were attributable to bonds issued or guaranteed by agencies of the U.S.
+Added: At September 30, 2025 , unrealized losses aggregating $ 34.4 million were attributable to bonds issued or guaranteed by agencies of the U.S.
Federal Government, while unrealized losses totaling $ 6.6 million were associated with bonds issued by state-based municipalities.
6 unchanged sentences
SECURITIES (Continued)
−Removed: The amortized cost and fair value of debt securities at June 30, 2025 , by maturity, are shown in the following table.
+Added: The amortized cost and fair value of debt securities at September 30, 2025 , by maturity, are shown in the following table.
The contractual maturity is utilized for U.S.
15 unchanged sentences
$ 891,228 $ 855,138
−Removed: No securities were sold during the first six months of 2025 or the full-year 2024 .
−Removed: Securities issued by the State of Michigan and all its political subdivisions had combined amortized costs of $ 223 million and $ 219 million as of June 30, 2025 , and December 31, 2024 , respectively, with estimated market values of $ 214 million and $ 209 million at the respective dates.
−Removed: We had no securities issued by all other states and their political subdivisions as of June 30, 2025 , and December 31, 2024 .
+Added: No securities were sold during the first nine months of 2025 or the full-year 2024 .
+Added: Securities issued by the State of Michigan and all its political subdivisions had combined amortized costs of $ 229 million and $ 219 million as of September 30, 2025 , and December 31, 2024 , respectively, with estimated market values of $ 224 million and $ 209 million at the respective dates.
+Added: We had no securities issued by all other states and their political subdivisions as of September 30, 2025 , and December 31, 2024 .
Total securities of any other specific issuer, other than the U.S.
1 unchanged sentence
The carrying value of U.S.
−Removed: Government agency debt obligation securities that are pledged to secure repurchase agreements was $ 243 million and $ 122 million at June 30, 2025 , and December 31, 2024 , respectively.
+Added: Government agency debt obligation securities that are pledged to secure repurchase agreements was $ 251 million and $ 122 million at September 30, 2025 , and December 31, 2024 , respectively.
The carrying value of U.S.
−Removed: Government agency debt obligation securities that are pledged to secure specific customer deposits was $ 12.3 million and $ 11.7 million at June 30, 2025 , and December 31, 2024 , respectively.
+Added: Government agency debt obligation securities that are pledged to secure specific customer deposits was $ 12.5 million and $ 11.7 million at September 30, 2025 , and December 31, 2024 , respectively.
MERCANTILE BANK CORPORATION
5 unchanged sentences
Our allowance for credit loss pools are consistent with those used for loan note disclosure purposes.
−Removed: Our loan portfolio segments as of both June 30, 2025 and December 31, 2024 were as follows:
+Added: Our loan portfolio segments as of both September 30, 2025 and December 31, 2024 were as follows:
Commercial Loans
25 unchanged sentences
LOANS AND ALLOWANCE FOR CREDIT LOSSES (Continued)
−Removed: Our total loans at June 30, 2025 were $ 4.70 billion compared to $ 4.60 billion at December 31, 2024 , an increase of $ 97.2 million, or 2.1 %.
−Removed: The components of our loan portfolio disaggregated by class of loan within the loan portfolio segments at June 30, 2025 and December 31, 2024 , and the percentage change in loans from the end of 2024 to the end of the second quarter of 2025 , are as follows:
−Removed: June 30, 2025
+Added: Our total loans at September 30, 2025 were $ 4.62 billion compared to $ 4.60 billion at December 31, 2024 , an increase of $ 14.4 million, or 0.3 %.
+Added: The components of our loan portfolio disaggregated by class of loan within the loan portfolio segments at September 30, 2025 and December 31, 2024 , and the percentage change in loans from the end of 2024 to the end of the third quarter of 2025 , are as follows:
+Added: September 30, 2025
December 31, 2024
21 unchanged sentences
LOANS AND ALLOWANCE FOR CREDIT LOSSES (Continued)
−Removed: An age analysis of past due loans is as follows as of June 30, 2025 :
+Added: An age analysis of past due loans is as follows as of September 30, 2025 :
30 – 59 60 – 89 Than 89
49 unchanged sentences
LOANS AND ALLOWANCE FOR CREDIT LOSSES (Continued)
−Removed: Nonaccrual loans as of June 30, 2025 were as follows:
+Added: Nonaccrual loans as of September 30, 2025 were as follows:
(Dollars in thousands)
27 unchanged sentences
Nonaccrual loans represent the entire balance of collateral dependent loans.
−Removed: As of June 30, 2025 and December 31, 2024 , all collateral dependent loans were secured by real estate, with the exception of those classified as commercial and industrial, which were secured by accounts receivable, inventory, and equipment.
−Removed: Interest income recognized on nonaccrual loans totaled $ 0.3 million and $ 0.4 million during the six months ended June 30, 2025 and 2024 , respectively, reflecting the collection of interest at the time of principal pay-off.
+Added: As of September 30, 2025 and December 31, 2024 , all collateral dependent loans were secured by real estate, with the exception of those classified as commercial and industrial, which were secured by accounts receivable, inventory, and equipment.
+Added: Interest income recognized on nonaccrual loans totaled $ 0.5 million during both the nine months ended September 30, 2025 and 2024 , reflecting the collection of interest at the time of principal pay off.
MERCANTILE BANK CORPORATION
64 unchanged sentences
LOANS AND ALLOWANCE FOR CREDIT LOSSES (Continued)
−Removed: The following table reflects amortized cost basis of loans as of June 30, 2025 and loan charge-offs during the six months ended June 30, 2025 based on year of origination:
+Added: The following table reflects amortized cost basis of loans as of September 30, 2025 and loan charge-offs during the nine months ended September 30, 2025 based on year of origination:
(Dollars in thousands)
59 unchanged sentences
$ 2 $ 6 $ 167 $ 22 $ 61 $ 3 $ 261 $ 12 $ 273
−Removed: There were lines of credit with principal balances of $ 0.6 million that were converted to term loans during the first six months of 2025 .
+Added: There were lines of credit with principal balances of $ 1.3 million that were converted to term loans during the first nine months of 2025 .
MERCANTILE BANK CORPORATION
1 unchanged sentence
LOANS AND ALLOWANCE FOR CREDIT LOSSES (Continued)
−Removed: The following table reflects amortized cost basis of loans as of December 31, 2024 and loan charge-offs during the six months ended June 30, 2024 based on year of origination:
+Added: The following table reflects amortized cost basis of loans as of December 31, 2024 and loan charge-offs during the nine months ended September 30, 2024 based on year of origination:
(Dollars in thousands)
66 unchanged sentences
The look-back period represents the number of data periods that will be used to calculate a baseline loss rate for each loan portfolio segment.
−Removed: We determined that the look-back period commencing on January 1, 2011 through the current reporting date was reasonable and appropriate, which was used in the calculation of both the June 30, 2025 , and December 31, 2024 allowance for credit losses.
+Added: We determined that the look-back period commencing on January 1, 2011 through the current reporting date was reasonable and appropriate, which was used in the calculation of both the September 30, 2025 , and December 31, 2024 allowance for credit losses.
Our historical loss rate is then applied to future loan balances at the instrument level based on remaining contractual life adjusted for amortization, prepayment and default to develop a baseline lifetime loss.
Our prepayment speed assumptions are developed at the loan segment level based upon the consideration of all relevant data which we believe could impact anticipated customer behavior, including changes in interest rates, economic conditions, and underlying property valuations.
−Removed: For the commercial portfolio segments, we assumed a 2.0 % prepayment speed as of both June 30, 2025 and December 31, 2024 as we deemed there to be no considerable changes from historical experience.
−Removed: For the retail 1 - 4 family mortgage and retail other consumer portfolios, we used a prepayment speed of 7.8 % as of June 30, 2025 and December 31, 2024 .
+Added: For the commercial portfolio segments, we assumed a 2.0 % prepayment speed as of both September 30, 2025 and December 31, 2024 as we deemed there to be no considerable changes from historical experience.
+Added: For the retail 1 - 4 family mortgage and retail other consumer portfolios, we used a prepayment speed of 9.5 % as of September 30, 2025 and 7.8 % as of December 31, 2024 .
During each reporting period, we also consider the need to adjust the historical loss rates as determined to reflect the extent to which we expect current conditions and reasonable and supportable economic forecasts to differ from the conditions that existed for the period over which the historical loss information was determined.
These qualitative adjustments may increase or decrease our estimate of expected future credit losses.
−Removed: As of June 30, 2025 and December 31, 2024 , we used a one -year reasonable and supportable economic forecast period, with a six -month straight-line reversion period for all loan segments.
−Removed: The economic forecasts used for our June 30, 2025 allowance calculation reflected a $ 0.1 million allowance balance reduction.
+Added: As of September 30, 2025 and December 31, 2024 , we used a one -year reasonable and supportable economic forecast period, with a six -month straight-line reversion period for all loan segments.
+Added: The economic forecasts used for our September 30, 2025 allowance calculation reflected a $ 0.1 million allowance balance reduction.
The forecasts used for our December 31, 2024 allowance calculation reflected a $ 2.2 million allowance balance reduction.
−Removed: Individual loans exhibiting unique risk characteristics, which differentiated the loans from other loans within the loan segments and were evaluated for expected credit losses on an individual basis, totaled $ 11.2 million and $ 7.4 million as of June 30, 2025 and December 31, 2024 , respectively.
−Removed: Individual allowance allocations totaled $ 3.9 million and $ 2.2 million as of June 30, 2025 and December 31, 2024 , respectively.
−Removed: Activity in the allowance for credit losses during the three and six months ended June 30, 2025 is as follows:
+Added: Individual loans exhibiting unique risk characteristics, which differentiated the loans from other loans within the loan segments and were evaluated for expected credit losses on an individual basis, totaled $ 9.8 million and $ 7.4 million as of September 30, 2025 and December 31, 2024 , respectively.
+Added: Individual allowance allocations totaled $ 6.8 million and $ 2.2 million as of September 30, 2025 and December 31, 2024 , respectively.
+Added: Activity in the allowance for credit losses during the three and nine months ended September 30, 2025 is as follows:
(Dollars in thousands)
20 unchanged sentences
LOANS AND ALLOWANCE FOR CREDIT LOSSES (Continued)
−Removed: Activity in the allowance for credit losses during the three and six months ended June 30, 2024 is as follows:
+Added: Activity in the allowance for credit losses during the three and nine months ended September 30, 2024 is as follows:
(Dollars in thousands)
22 unchanged sentences
$ 14,914 $ 354 $ 7,528 $ 10,600 $ 3,224 $ 18,192 $ 1,725 $ 53 $ 56,590
−Removed: There were no loan modifications to borrowers experiencing financial difficulty during the three months ended March 31, 2025.
−Removed: The following table presents the period-end amortized cost basis of modifications to borrowers experiencing financial difficulty by type of modification made during the three months ended June 30, 2025 :
+Added: The following table presents the period-end amortized cost basis of modifications to borrowers experiencing financial difficulty by type of modification made during the three months ended September 30, 2025 :
Interest Rate
2 unchanged sentences
Commercial and industrial
+Added: $ 0 $ 9,590 $ 0
Vacant land, land development and residential construction
3 unchanged sentences
Total commercial
+Added: $ 0 $ 9,590 $ 0
1-4 family mortgages
Other consumer loans
+Added: $ 0 $ 9,590 $ 0
+Added: The following table presents the period-end amortized cost basis of modifications to borrowers experiencing financial difficulty by type of modification made during the nine months ended September 30, 2025 :
+Added: Interest Rate
+Added: (Dollars in thousands)
+Added: Term Extension
+Added: Commercial and industrial
+Added: $ 0 $ 9,596 $ 0
+Added: Vacant land, land development and residential construction
+Added: Real estate – owner occupied
+Added: Real estate – non-owner occupied
+Added: Real estate – multi-family and residential rental
+Added: Total commercial
+Added: $ 0 $ 9,596 $ 0
+Added: 1-4 family mortgages
+Added: Other consumer loans
+Added: $ 0 $ 9,596 $ 0
MERCANTILE BANK CORPORATION
1 unchanged sentence
LOANS AND ALLOWANCE FOR CREDIT LOSSES (Continued)
−Removed: The following table presents the period-end amortized cost basis of modifications to borrowers experiencing financial difficulty by type of modification made during the three months ended June 30, 2024 :
+Added: The following table presents the period-end amortized cost basis of modifications to borrowers experiencing financial difficulty by type of modification made during the three months ended September 30, 2024 :
Interest Rate
12 unchanged sentences
$ 0 $ 5,670 $ 0
−Removed: The following table presents the period-end amortized cost basis of modifications to borrowers experiencing financial difficulty by type of modification made during the six months ended June 30, 2024 :
+Added: The following table presents the period-end amortized cost basis of modifications to borrowers experiencing financial difficulty by type of modification made during the nine months ended September 30, 2024 :
Interest Rate
13 unchanged sentences
Loans listed under Term Extension were generally granted a series of short-term maturity extensions as part of the workout process and associated forbearance agreements.
−Removed: The following table presents the amortized cost basis of loans that have been modified in the past twelve months to borrowers experiencing financial difficulty by payment status and loan segment as of June 30, 2025 :
+Added: The following table presents the amortized cost basis of loans that have been modified in the past twelve months to borrowers experiencing financial difficulty by payment status and loan segment as of September 30, 2025 :
(Dollars in thousands)
15 unchanged sentences
Premises and equipment are comprised of the following:
+Added: September 30,
(Dollars in thousands)
9 unchanged sentences
$ 56,155 $ 53,427
−Removed: Depreciation expense totaled $ 1.3 million and $ 1.5 million during the second quarters of 2025 and 2024 , respectively.
+Added: Depreciation expense totaled $ 1.3 million and $ 1.5 million during the third quarters of 2025 and 2024 , respectively.
+Added: Depreciation expense totaled $ 3.8 million and $ 4.6 million during the first nine months of 2025 and 2024, respectively.
We enter into facility leases in the normal course of business.
−Removed: As of June 30, 2025 , we were under lease contracts for eleven of our banking facilities.
−Removed: The leases have maturity dates ranging from November, 2025 through May, 2048, with a weighted average life of 9.3 years as of June 30, 2025 .
+Added: As of September 30, 2025 , we were under lease contracts for eleven of our banking facilities.
+Added: The leases have maturity dates ranging from November, 2025 through May, 2048, with a weighted average life of 9.3 years as of September 30, 2025 .
All of our leases have multiple three - to five -year extensions;
5 unchanged sentences
We use our incremental borrowing rate, on a collateralized basis, at lease commencement to calculate the present value of lease payments.
−Removed: The weighted average discount rate for leases was 6.53 % as of June 30, 2025 .
−Removed: The right-of-use assets, included in premises and equipment, net on our Consolidated Balance Sheets, and the lease liabilities, included in other liabilities on our Consolidated Balance Sheets, totaled $ 4.2 million and $ 4.4 million as of June 30, 2025 , and December 31, 2024 , respectively.
+Added: The weighted average discount rate for leases was 6.53 % as of September 30, 2025 .
+Added: The right-of-use assets, included in premises and equipment, net on our Consolidated Balance Sheets, and the lease liabilities, included in other liabilities on our Consolidated Balance Sheets, totaled $ 4.0 million and $ 4.4 million as of September 30, 2025 , and December 31, 2024 , respectively.
As permitted by applicable accounting standards, we have elected not to recognize short-term leases with original terms of twelve months or less on our Consolidated Balance Sheets.
−Removed: Total operating lease expense associated with the leases aggregated $ 0.3 million during the second quarter of 2025 and $ 0.4 million during the second quarter of 2024 .
+Added: Total operating lease expense associated with the leases aggregated $ 0.3 million during the third quarter of 2025 and $ 0.4 million during the third quarter of 2024 .
MERCANTILE BANK CORPORATION
1 unchanged sentence
PREMISES AND EQUIPMENT, NET (Continued)
−Removed: Future lease payments were as follows as of June 30, 2025 :
+Added: Future lease payments were as follows as of September 30, 2025 :
(Dollars in thousands)
2 unchanged sentences
Present value of future lease payments (lease liability)
−Removed: Our total deposits at June 30, 2025 were $ 4.71 billion, an increase of $ 12.1 million, or 0.3 %, from December 31, 2024 .
−Removed: The components of our outstanding balances at June 30, 2025 and December 31, 2024 , and percentage change in deposits from the end of 2024 to the end of the second quarter of 2025 , are as follows:
−Removed: June 30, 2025
+Added: Our total deposits at September 30, 2025 were $ 4.81 billion, an increase of $ 113 million, or 2.4 %, from December 31, 2024 .
+Added: The components of our outstanding balances at September 30, 2025 and December 31, 2024 , and percentage change in deposits from the end of 2024 to the end of the third quarter of 2025 , are as follows:
+Added: September 30, 2025
December 31, 2024
6 unchanged sentences
214,953 4.5 221,900 4.7 ( 3.1 )
−Removed: Time, under $100,000
−Removed: 219,935 4.7 207,534 4.4 6.0
−Removed: Time, $100,000 and over
+Added: Time Deposits
807,641 16.8 807,517 17.2 0.0
10 unchanged sentences
Information relating to our repurchase agreements is as follows:
−Removed: Six Months Ended
+Added: Nine Months Ended
Twelve Months Ended
(Dollars in thousands)
−Removed: June 30, 2025
+Added: September 30, 2025
December 31, 2024
15 unchanged sentences
FEDERAL HOME LOAN BANK OF INDIANAPOLIS ADVANCES
−Removed: FHLBI bullet advances totaled $ 330 million at June 30, 2025 , and were scheduled to mature at varying dates from September 2025 through June 2030 , with fixed rates of interest from 0.82 % to 4.50 % and averaging 3.25 %.
+Added: FHLBI bullet advances totaled $ 320 million at September 30, 2025 , and were scheduled to mature at varying dates from October 2025 through June 2030 , with fixed rates of interest from 0.82 % to 4.50 % and averaging 3.22 %.
FHLBI bullet advances totaled $ 360 million at December 31, 2024 , and were scheduled to mature at varying dates from January 2025 through June 2030 , with fixed rates of interest from 0.70 % to 4.54 % and averaging 3.10 %.
−Removed: Maturities of FHLBI bullet advances as of June 30, 2025 were as follows:
+Added: Maturities of FHLBI bullet advances as of September 30, 2025 were as follows:
(Dollars in thousands)
−Removed: FHLBI amortizing advances totaled $ 26.2 million as of June 30, 2025 , with an average rate of 2.52 % and with final maturities in 2042 .
+Added: FHLBI amortizing advances totaled $ 26.2 million as of September 30, 2025 , with an average rate of 2.52 % and with final maturities in 2042 .
FHLBI amortizing advances totaled $ 27.1 million as of December 31, 2024 , with an average rate of 2.52 % and with final maturities in 2042 .
3 unchanged sentences
FEDERAL HOME LOAN BANK OF INDIANAPOLIS ADVANCES (Continued)
−Removed: Scheduled principal payments on FHLBI amortizing advances as of June 30, 2025 were as follows:
+Added: Scheduled principal payments on FHLBI amortizing advances as of September 30, 2025 were as follows:
(Dollars in thousands)
1 unchanged sentence
The advances are collateralized by residential mortgage loans, first mortgage liens on multi-family residential property loans, first mortgage liens on commercial real estate property loans, and substantially all other assets of our bank under a blanket lien arrangement.
−Removed: Our borrowing line of credit as of June 30, 2025 totaled $ 1.06 billion, with remaining availability based on collateral of $ 698 million.
+Added: Our borrowing line of credit as of September 30, 2025 totaled $ 1.08 billion, with remaining availability based on collateral of $ 725 million.
STOCK-BASED COMPENSATION
3 unchanged sentences
$ 2.5 million during the
−Removed: six months ended June 30, 2025 and 2024 , respectively.
+Added: nine months ended September 30, 2025 and 2024 , respectively.
The Stock Incentive Plan of
11 unchanged sentences
no restricted stock grants during the
−Removed: six months ended June 30, 2024 .
−Removed: A summary of restricted stock activity during the six months ended June 30, 2025 , is as follows:
+Added: nine months ended September 30, 2024 .
+Added: A summary of restricted stock activity during the nine months ended September 30, 2025 , is as follows:
Nonvested at beginning of the period
7 unchanged sentences
STOCK-BASED COMPENSATION (Continued)
−Removed: Of the restricted stock shares granted during the six months ended June 30, 2025 , 24,910 shares are performance-based awards made to our Named Executive Officers at the target level and are subject to the attainment of pre-determined performance goals.
−Removed: As of June 30, 2025 , there were approximately 290,000 shares authorized for future incentive awards, and as of December 31, 2024 , there were approximately 383,000 shares authorized for future incentive awards.
+Added: Of the restricted stock shares granted during the nine months ended September 30, 2025 , 24,910 shares are performance-based awards made to our Named Executive Officers at the target level and are subject to the attainment of pre-determined performance goals.
+Added: As of September 30, 2025 , there were approximately 290,000 shares authorized for future incentive awards, and as of December 31, 2024 , there were approximately 383,000 shares authorized for future incentive awards.
We periodically grant shares of common stock to our Corporate and Bank Board Directors for retainer payments with the related expense being recorded over the period of the Directors' service, as summarized below:
12 unchanged sentences
Each offering period spans three months, with the first offering period beginning on July 1, 2025.
−Removed: As of June 30, 2025, 200,000 shares were reserved for future issuance under the ESPP.
+Added: As of September 30, 2025 , 200,000 shares were reserved for future issuance under the ESPP.
COMMITMENTS AND OFF-BALANCE SHEET RISK
15 unchanged sentences
For commitments to make loans, we determine an allowance by applying the expected loss allocation factor to the amount expected to be funded.
−Removed: The calculated allowance aggregated $ 0.9 million and $ 1.0 million as of June 30, 2025 and December 31, 2024 , respectively.
+Added: The calculated allowance aggregated $ 1.1 million and $ 1.0 million as of September 30, 2025 and December 31, 2024 , respectively.
We do not reserve for residential mortgage construction loans, as the loans are for one year or less and draws are governed by the receipt and satisfactory review of contractor and subcontractor sworn statements, lien waivers and title insurance company endorsements.
3 unchanged sentences
COMMITMENTS AND OFF-BALANCE SHEET RISK (Continued)
−Removed: At June 30, 2025 , and December 31, 2024 , the rates on existing off-balance sheet instruments were substantially equivalent to current market rates, considering the underlying credit standing of the counterparties.
−Removed: A summary of the contractual amounts of our financial instruments with off-balance sheet risk at June 30, 2025 and December 31, 2024 is as follows:
+Added: At September 30, 2025 , and December 31, 2024 , the rates on existing off-balance sheet instruments were substantially equivalent to current market rates, considering the underlying credit standing of the counterparties.
+Added: A summary of the contractual amounts of our financial instruments with off-balance sheet risk at September 30, 2025 and December 31, 2024 is as follows:
+Added: September 30,
(Dollars in thousands)
22 unchanged sentences
Fees paid to us by the correspondent banks are recognized as noninterest income on our Consolidated Statements of Income on the settlement date.
−Removed: The fair values of derivative instruments as of June 30, 2025 , are reflected in the following table.
+Added: The fair values of derivative instruments as of September 30, 2025 , are reflected in the following table.
Balance Sheet
10 unchanged sentences
DERIVATIVES AND HEDGING ACTIVITIES (Continued)
−Removed: The effect of interest rate swaps that are not designated as hedging instruments resulted in expense of $ 0.2 million during the six months ended June 30, 2025 that was recorded in other noninterest expense on our Consolidated Statements of Income.
+Added: The effect of interest rate swaps that are not designated as hedging instruments resulted in expense of $ 0.2 million during the nine months ended September 30, 2025 that was recorded in other noninterest expense on our Consolidated Statements of Income.
We have master netting arrangements with our correspondent banks that allow us to net receivables and payables.
1 unchanged sentence
We have elected to not offset these transactions on the Consolidated Balance Sheets.
−Removed: The netting of derivative instruments as of June 30, 2025 is presented in the following table.
+Added: The netting of derivative instruments as of September 30, 2025 is presented in the following table.
Gross Amounts Not Offset on the Consolidated Balance Sheet
19 unchanged sentences
864,130 Other Liabilities
−Removed: The effect of interest rate swaps that are not designated as hedging instruments resulted in income of $ 0.1 million during the six months ended June 30, 2024 that was recorded in other noninterest expense on our Consolidated Statements of Income.
+Added: The effect of interest rate swaps that are not designated as hedging instruments resulted in expense of $ 0.1 million during the nine months ended September 30, 2024 that was recorded in other noninterest expense on our Consolidated Statements of Income.
The netting of derivative instruments as of December 31, 2024 is presented in the following table.
13 unchanged sentences
FAIR VALUES OF FINANCIAL INSTRUMENTS
−Removed: The carrying amounts, estimated fair values and level within the fair value hierarchy of financial instruments were as follows as of June 30, 2025 and December 31, 2024 :
−Removed: June 30, 2025
+Added: The carrying amounts, estimated fair values and level within the fair value hierarchy of financial instruments were as follows as of September 30, 2025 and December 31, 2024 :
+Added: September 30, 2025
December 31, 2024
70 unchanged sentences
We carry these bonds at historical cost, which we believe approximates fair value, unless our periodic financial analysis or other information that becomes known to us necessitates an impairment.
−Removed: There was no such impairment as of June 30, 2025 , or December 31, 2024 .
+Added: There was no such impairment as of September 30, 2025 , or December 31, 2024 .
We have no Level 1 securities available for sale.
8 unchanged sentences
Fair value is based on independent quoted market prices, where applicable, or the prices for other mortgage whole loans with similar characteristics.
−Removed: As of June 30, 2025 and December 31, 2024 , we determined the fair value of our mortgage loans held for sale to be $ 28.1 million and $ 16.0 million, respectively.
+Added: As of September 30, 2025 and December 31, 2024 , we determined the fair value of our mortgage loans held for sale to be $ 17.7 million and $ 16.0 million, respectively.
We do not record loans at fair value on a recurring basis.
9 unchanged sentences
Assets and Liabilities Measured at Fair Value on a Recurring Basis
−Removed: The balances of assets and liabilities measured at fair value on a recurring basis as of June 30, 2025 are as follows:
+Added: The balances of assets and liabilities measured at fair value on a recurring basis as of September 30, 2025 are as follows:
(Dollars in thousands)
17 unchanged sentences
$ 25,515 $ 0 $ 25,515 $ 0
−Removed: There were no sales, purchases or transfers in or out of Level 3 during the six months ended June 30, 2025 .
−Removed: The insignificant reduction in Level 3 municipal general obligation bonds during the six months ended June 30, 2025 reflects the scheduled maturities of such bonds.
+Added: There were no sales, purchases or transfers in or out of Level 3 during the nine months ended September 30, 2025 .
+Added: The insignificant reduction in Level 3 municipal general obligation bonds during the nine months ended September 30, 2025 reflects the scheduled maturities of such bonds.
MERCANTILE BANK CORPORATION
22 unchanged sentences
Assets and Liabilities Measured at Fair Value on a Nonrecurring Basis
−Removed: The balances of assets and liabilities measured at fair value on a nonrecurring basis as of June 30, 2025 are as follows:
+Added: The balances of assets and liabilities measured at fair value on a nonrecurring basis as of September 30, 2025 are as follows:
(Dollars in thousands)
27 unchanged sentences
In addition, further specific types of restrictions may be imposed on the institution at the discretion of the federal regulator.
−Removed: As of June 30, 2025 and December 31, 2024 , our bank was in the well capitalized category under the regulatory framework for prompt corrective action.
−Removed: There are no conditions or events since June 30, 2025 , that we believe have changed our bank’s categorization.
+Added: As of September 30, 2025 and December 31, 2024 , our bank was in the well capitalized category under the regulatory framework for prompt corrective action.
+Added: There are no conditions or events since September 30, 2025 , that we believe have changed our bank’s categorization.
MERCANTILE BANK CORPORATION
9 unchanged sentences
(Dollars in thousands)
−Removed: June 30, 2025
+Added: September 30, 2025
Total capital (to risk weighted assets)
26 unchanged sentences
REGULATORY MATTERS (Continued)
−Removed: Our consolidated capital levels as of both June 30, 2025 and December 31, 2024 include $ 48.3 million of trust preferred securities.
+Added: Our consolidated capital levels as of September 30, 2025 and December 31, 2024 include $ 48.8 million and $ 48.3 million of trust preferred securities, respectively.
Under applicable Federal Reserve guidelines, the trust preferred securities constitute a restricted core capital element.
1 unchanged sentence
Our ability to include the trust preferred securities in Tier 1 capital in accordance with the guidelines is not affected by the provision of the Dodd-Frank Act generally restricting such treatment, because (i) the trust preferred securities were issued before May 19, 2010, and (ii) our total consolidated assets as of December 31, 2009 were less than $ 15.0 billion.
−Removed: As of both June 30, 2025 and December 31, 2024 , all $ 48.3 million of the trust preferred securities were included in our consolidated Tier 1 capital.
+Added: As of September 30, 2025 and December 31, 2024 , $ 48.8 million and $ 48.3 million of the trust preferred securities, respectively, were included in our consolidated Tier 1 capital.
Under the final BASEL III capital rules that became effective on January 1, 2015, there is a requirement for a common equity Tier 1 capital conservation buffer of 2.5 % of risk-weighted assets which is in addition to the other minimum risk-based capital standards in the rule.
2 unchanged sentences
The capital buffer requirement raised the minimum required common equity Tier 1 capital ratio to 7.0 %, the Tier 1 capital ratio to 8.5 % and the total capital ratio to 10.5 % on a fully phased-in basis on January 1, 2019.
−Removed: We believe that, as of June 30, 2025 , our bank meets all capital adequacy requirements under the BASEL III capital rules on a fully phased-in basis.
+Added: We believe that, as of September 30, 2025 , our bank meets all capital adequacy requirements under the BASEL III capital rules on a fully phased-in basis.
Our and our bank’s ability to pay cash and stock dividends is subject to limitations under various laws and regulations and to prudent and sound banking practices.
1 unchanged sentence
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 .
−Removed: As of June 30, 2025 , we had the ability to repurchase up to $ 6.8 million in common stock shares from time to time in open market transactions at prevailing market prices or by other means in accordance with applicable regulations as part of a $ 20.0 million common stock repurchase program announced in May 2021.
−Removed: No shares were repurchased during the first six months of 2025 .
+Added: 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 .
+Added: As of September 30, 2025 , we had the ability to repurchase up to $ 6.8 million in common stock shares from time to time in open market transactions at prevailing market prices or by other means in accordance with applicable regulations as part of a $ 20.0 million common stock repurchase program announced in May 2021.
+Added: No shares were repurchased during the first nine months of 2025 .
Historically, stock repurchases have been funded from cash dividends paid to us from our bank.
2 unchanged sentences
SUBSEQUENT EVENTS
−Removed: 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 will be paid on September 17, 2025 , to shareholders of record as of September 5, 2025 .
−Removed: On July 22, 2025, we entered into a definitive merger agreement ("Merger Agreement") with Eastern Michigan Financial Corporation (“EFIN”), pursuant to which EFIN will merge with and into an acquisition subsidiary of Mercantile, with the acquisition subsidiary as the surviving corporation (the “Merger”).
−Removed: Following the Merger, Mercantile will operate for a period of time as a two -bank holding company.
−Removed: The newly acquired Eastern Michigan Bank will operate alongside Mercantile’s existing bank, Mercantile Bank, until the first quarter of 2027 at which time Mercantile plans to consolidate Eastern Michigan Bank into Mercantile Bank.
−Removed: Under the terms of the agreement, each outstanding share of EFIN’s common stock will be converted into the right to receive $ 32.32 in cash and 0.7116 shares of Mercantile common stock, for an aggregate transaction value of approximately $ 95.8 million based upon the closing price of Mercantile's common stock of $ 48.75 on July 21, 2025.
−Removed: The Merger Agreement has been approved by the boards of directors of each of Mercantile and EFIN.
−Removed: The parties anticipate that the Merger will close in the fourth quarter of 2025, subject to receiving approval of the Merger Agreement by EFIN’s shareholders and applicable regulatory agencies, and the fulfillment of other customary closing conditions.
+Added: 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 will be paid on December 17, 2025 , to shareholders of record as of December 5, 2025 .
MERCANTILE BANK CORPORATION
6 unchanged sentences
We undertake no obligation to update, amend, or clarify forward-looking statements, whether as a result of new information, future events (whether anticipated or unanticipated), or otherwise.
−Removed: Future Factors include, among others, our inability to successfully combine with Eastern Michigan Financial Corporation;
+Added: Future Factors include, among others, our ability to successfully combine with Eastern Michigan Financial Corporation;
+Added: our ability to maintain adequate levels of allowance for credit losses;
adverse changes in interest rates and interest rate relationships;
23 unchanged sentences
The following discussion compares the financial condition of Mercantile Bank Corporation and its consolidated subsidiaries, including Mercantile Community Partners, LLC ("MCP") and Mercantile Bank (“our bank”) and its subsidiaries, including Mercantile Insurance Center, Inc.
−Removed: at June 30, 2025 and December 31, 2024 and the results of operations for the three and six months ended June 30, 2025 and 2024.
+Added: at September 30, 2025 and December 31, 2024 and the results of operations for the three and nine months ended September 30, 2025 and 2024.
This discussion should be read in conjunction with the interim consolidated financial statements and footnotes included in this report.
38 unchanged sentences
Financial Overview
−Removed: We reported net income of $22.6 million, or $1.39 per diluted share, for the second quarter of 2025, compared with net income of $18.8 million, or $1.17 per diluted share, during the second quarter of 2024.
−Removed: Net income during the first six months of 2025 totaled $42.2 million, or $2.60 per diluted share, compared to $40.3 million, or $2.50 per diluted share, during the first six months of 2024.
−Removed: Growth in net income during both time frames reflected increased net interest income, lower provision expense and reduced federal income tax expense, which more than offset increased overhead costs.
−Removed: A higher level of noninterest income also contributed to the increase in net income during the second quarter of 2025.
−Removed: Commercial loans increased $114 million during the first six months of 2025, providing for an annualized growth rate of about 6%.
−Removed: Commercial and industrial loans grew $88.1 million and multi-family and residential rental property loans increased $43.3 million, largely reflecting enhanced use of lines of credit and draws on multi-family construction loans, respectively.
−Removed: Non-owner occupied commercial real estate (“CRE”) loans grew $5.6 million while owner occupied CRE loans were down $23.7 million;
−Removed: both CRE loan segments were impacted by the full payoffs and partial paydowns of certain larger relationships largely stemming from sales of the underlying properties.
+Added: We reported net income of $23.8 million, or $1.46 per diluted share, for the third quarter of 2025, compared with net income of $19.6 million, or $1.22 per diluted share, during the third quarter of 2024.
+Added: Net income during the first nine months of 2025 totaled $65.9 million, or $4.06 per diluted share, compared to $60.0 million, or $3.72 per diluted share, during the first nine months of 2024.
+Added: Growth in net income during both time frames reflected increased net interest income and noninterest income, lower provision expense and reduced federal income tax expense, which more than offset increased overhead costs.
+Added: Commercial loans increased $43.0 million during the first nine months of 2025, providing for an annualized growth rate of about 2%.
+Added: Commercial and industrial loans grew $50.4 million and multi-family and residential rental property loans increased $45.3 million.
+Added: Non-owner occupied commercial real estate (“CRE”) loans declined $37.2 million while owner occupied CRE loans were down $19.4 million;
+Added: both CRE loan segments were impacted by the payoffs of several larger relationships largely stemming from sales of the underlying properties and refinancings to the secondary market.
Land development and construction loans expanded by $3.9 million.
−Removed: As a percent of total commercial loans, commercial and industrial loans and owner occupied CRE loans combined equaled 55.0% as of June 30, 2025, compared to 54.9% as of December 31, 2024.
−Removed: The commercial loan pipeline remains strong, and as of June 30, 2025, we had $237 million in unfunded loan commitments on commercial construction and development loans that are in the construction phase.
−Removed: We do anticipate several relatively large CRE-related loan payoffs that will negatively impact commercial loan growth during the remainder of 2025.
−Removed: Residential mortgage loans decreased $28.2 million during the first six months of 2025, as aggregate payoffs and scheduled monthly payments exceeded new loans added to the portfolio.
−Removed: Residential mortgage loan originations totaled $242 million during the first six months of 2025, of which about 80% were originated with the intent to sell.
−Removed: The overall quality of our loan portfolio remains strong, with nonperforming loans equaling 0.21% of total loans as of June 30, 2025.
+Added: As a percent of total commercial loans, commercial and industrial loans and owner occupied CRE loans combined equaled 55.1% as of September 30, 2025, compared to 54.9% as of December 31, 2024.
+Added: The commercial loan pipeline remains strong, and as of September 30, 2025, we had $216 million in unfunded loan commitments on commercial construction and development loans that are in the construction phase.
+Added: As anticipated, we did experience several relatively large CRE-related loan payoffs, as well as a reduction in line of credit usage, both of which negatively impacted commercial loan growth during the third quarter of 2025.
+Added: Residential mortgage loans decreased $46.7 million during the first nine months of 2025, as aggregate payoffs and scheduled monthly payments exceeded new loans added to the portfolio.
+Added: Residential mortgage loan originations totaled $379 million during the first nine months of 2025, of which about 80% were originated with the intent to sell.
+Added: The overall quality of our loan portfolio remains strong, with nonperforming loans equaling 0.21% of total loans as of September 30, 2025.
Accruing loans past due 30 to 89 days remain very low, and we had no foreclosed properties at quarter end.
−Removed: Gross loan charge-offs totaled $0.1 million during the first six months of 2025, while recoveries of prior period loan charge-offs aggregated $0.3 million, providing for a net loan recovery of $0.2 million.
−Removed: We recorded provision expense of $3.7 million during the first six months of 2025, primarily reflecting increased allocations on specific financially stressed lending relationships, changes to the economic forecast and loan growth.
−Removed: Interest-earning assets, a vast majority of which is comprised of funds on deposit with the Federal Reserve Bank of Chicago, averaged $230 million during the first six months of 2025, compared to $166 million during the first six months of 2024.
−Removed: The higher average balance primarily reflects our strategy to reduce the loan-to-deposit ratio via local deposit growth exceeding loan and investment growth, as well as our desire to maintain higher levels of on balance sheet liquidity.
+Added: Gross loan charge-offs totaled $0.3 million during the first nine months of 2025, while recoveries of prior period loan charge-offs aggregated $1.1 million, providing for a net loan recovery of $0.8 million.
+Added: We recorded provision expense of $3.9 million during the first nine months of 2025, primarily reflecting a $4.6 million net increase in specific allocations driven by $5.5 million in total allocations for a commercial construction loan relationship that was placed on nonaccrual during the second quarter of 2025, a $1.9 million reserve increase related to changes to the economic forecast, and a $1.7 million net increase in qualitative factors stemming from changes in the makeup of the loan portfolio.
+Added: Interest-earning deposits, a vast majority of which is comprised of funds on deposit with the Federal Reserve Bank of Chicago, averaged $284 million and $206 million during the first nine months of 2025 and 2024, or almost 5% and 4% of average total assets, respectively.
+Added: We have generally operated with about 1% to 2% of total assets comprised of interest-earning deposits.
+Added: The higher average balance of interest-earning deposits primarily reflects our strategy to reduce the loan-to-deposit ratio via local deposit growth exceeding loan and investment growth, as well as our desire to maintain higher levels of on balance sheet liquidity.
MERCANTILE BANK CORPORATION
−Removed: Total deposits increased $12.1 million during the first six months of 2025.
−Removed: Aggregate net growth in almost all interest-bearing deposit types offset a significant portion of the reduction in business noninterest-bearing and interest-bearing checking accounts primarily reflecting seasonal and customary customers' tax and bonus payments and partnership distributions.
−Removed: Securities sold under agreements to repurchase (“sweep accounts”) increased $121 million during the first six months of 2025, largely reflecting the return of funds that had been withdrawn during the fourth quarter of 2024.
−Removed: Federal Home Loan Bank of Indianapolis (“FHLBI”) advances declined $30.9 million during the first six months of 2025.
−Removed: Wholesale funds, comprised of out-of-area deposits and FHLBI advances, totaled $555 million, or about 10% of total funds, as of June 30, 2025, compared to $537 million, or about 10% of total funds, as of December 31, 2024.
−Removed: Net interest income increased $2.4 million and $3.6 million during the second quarter and first six months of 2025, respectively, compared to the same prior-year time periods, reflecting the net impact of $3.1 million and $6.7 million increases in interest income and $0.7 million and $3.1 million increases in interest expense, during the respective periods.
−Removed: Our net interest margin declined 14 basis points and 19 basis points during the second quarter and first six months of 2025, respectively, compared to the same prior-year time periods.
−Removed: Our yield on earning assets declined 30 basis points during both the second quarter and first six months of 2025, and our cost of funds declined 16 basis points and 11 basis points during those respective time periods.
−Removed: The lower yield on earning assets largely reflected the aggregate 100 basis point reduction in the federal funds rate during the last four months of 2024.
−Removed: Despite the reduction in the net interest margin, net interest income increased primarily due to solid loan growth between the second quarters of 2024 and 2025.
−Removed: Total loans averaged $4.70 billion and $4.40 billion during the second quarters of 2025 and 2024, respectively, reflecting growth of $299 million, or about 7%.
−Removed: Noninterest income totaled $11.5 million and $20.2 million during the second quarter and first six months of 2025, respectively, compared to $9.7 million and $20.5 million during the second quarter and first six months of 2024, respectively.
−Removed: We recorded increased service charges on accounts, primarily reflecting growth in treasury management activity, mortgage banking income, credit and debit card fees and payroll services income during both time periods.
−Removed: Interest rate swap income was higher during the second quarter of 2025 compared to the second quarter of 2024, but was lower during the first six months of 2025 compared to the first six months of 2024.
−Removed: Noninterest income during the first six months of 2024 was also enhanced from bank owned life insurance benefit claims and higher revenue associated with a private equity investment.
−Removed: Noninterest expense totaled $33.4 million and $64.5 million during the second quarter and first six months of 2025, respectively, compared to $29.7 million and $59.7 million during the second quarter and first six months of 2024, respectively.
+Added: Total deposits increased $113 million during the first nine months of 2025.
+Added: Aggregate growth in money market deposit accounts totaled $149 million, and interest-bearing checking accounts grew $23.5 million.
+Added: Noninterest-bearing checking accounts declined $81.7 million;
+Added: however, excluding the expected withdrawal of funds in early January that had been deposited by a single depositor near the end of 2024, these accounts increased by about $10 million.
+Added: Securities sold under agreements to repurchase (“sweep accounts”) increased $130 million during the first nine months of 2025, largely reflecting the return of funds that had been withdrawn during the fourth quarter of 2024.
+Added: Federal Home Loan Bank of Indianapolis (“FHLBI”) advances declined $40.9 million during the first nine months of 2025.
+Added: Wholesale funds, comprised of out-of-area deposits and FHLBI advances, totaled $525 million, or about 10% of total funds, as of September 30, 2025, compared to $537 million, or about 10% of total funds, as of December 31, 2024.
+Added: Net interest income increased $3.7 million and $7.3 million during the third quarter and first nine months of 2025, respectively, compared to the same prior-year time periods.
+Added: Interest income increased $2.2 million and $8.9 million during third quarter and first nine months of 2025, respectively, compared to the same prior-year time periods, while interest expense declined $1.5 million during the third quarter of 2025 compared to the third quarter of 2024 and increased $1.6 million during the first nine months of 2025 compared to the first nine months of 2024.
+Added: Our net interest margin declined 2 basis points and 13 basis points during the third quarter and first nine months of 2025, respectively, compared to the same prior-year time periods.
+Added: Our yield on earning assets declined 33 basis points and 30 basis points during the third quarter and first nine months of 2025 during those same respective time periods, while our cost of funds declined 31 basis points and 17 basis points, respectively.
+Added: The lower yield on earning assets largely reflected the aggregate 100 basis point reduction in the federal funds rate during the last four months of 2024, along with an additional 25 basis point reduction in mid-September of 2025.
+Added: Despite the reductions in the net interest margin, net interest income increased during the 2025 periods primarily due to solid loan growth between the third quarters of 2024 and 2025.
+Added: Total loans averaged $4.67 billion and $4.47 billion during the third quarters of 2025 and 2024, respectively, reflecting growth of $201 million, or 4.5%.
+Added: Noninterest income totaled $10.4 million and $30.6 million during the third quarter and first nine months of 2025, respectively, compared to $9.7 million and $30.2 million during the third quarter and first nine months of 2024, respectively.
+Added: We recorded increased service charges on accounts, primarily reflecting growth in treasury management activity, credit and debit card fees and payroll services income during both time periods.
+Added: Mortgage banking income was $0.3 million lower during the third quarter of 2025 compared to the third quarter of 2024, but was $1.0 million higher during the first nine months of 2025 compared to the first nine months of 2024.
+Added: The level of mortgage banking income is generally reflective of the volume of loans originated with the intent to sell, but quarter-end fair value calculations associated with residential mortgage loan commitments can also play a notable role as it did during the second and third quarters of 2025.
+Added: Interest rate swap income declined during both time periods in 2025 compared to the respective 2024 time frames, generally reflecting a lower volume of new swap transactions.
+Added: Noninterest expense totaled $34.8 million and $99.2 million during the third quarter and first nine months of 2025, respectively, compared to $32.3 million and $92.0 million during the third quarter and first nine months of 2024, respectively.
The higher level of noninterest expense during both time periods primarily resulted from increased compensation and benefit costs along with higher data processing expenses.
−Removed: Federal income tax expense totaled $3.3 million and $7.9 million during the second quarter and first six months of 2025, respectively, compared to $4.7 million and $10.2 million during the second quarter and first six months of 2024, respectively.
−Removed: The effective tax rate was 12.9% and 15.7% during the second quarter and first six months of 2025, respectively, compared to 20.1% during both the second quarter and first six months of 2024.
−Removed: The reduction during the 2025 periods compared to the respective 2024 periods reflects the acquisition of transferable energy tax credits during the second quarter of 2025, which provided for a $1.5 million reduction in federal income tax expense.
+Added: Expenses associated with the planned acquisition of Eastern Michigan Financial Corporation totaled $0.6 million during the third quarter and first nine months of 2025.
+Added: Federal income tax expense totaled $3.7 million and $11.5 million during the third quarter and first nine months of 2025, respectively, compared to $4.9 million and $15.1 million during the third quarter and first nine months of 2024, respectively.
+Added: The effective tax rate was 13.4% and 14.9% during the third quarter and first nine months of 2025, respectively, compared to 20.1% during both the third quarter and first nine months of 2024.
+Added: The reduction during the 2025 periods compared to the respective 2024 periods primarily reflects the acquisition of transferable energy tax credits during the second and third quarters of 2025, which provided for a $2.6 million reduction in federal income tax expense.
MERCANTILE BANK CORPORATION
Financial Condition
−Removed: Our total assets increased $129 million during the first six months of 2025, and totaled $6.18 billion as of June 30, 2025.
−Removed: Total loans grew $97.2 million, securities available for sale increased $96.1 million and other assets were up $22.1 million, while interest-earning assets declined $139 million during the first six months of 2025.
−Removed: Sweep accounts grew $121 million and total deposits increased $12.1 million, while FHLBI advances decreased $30.9 million during the first six months of 2025.
−Removed: Commercial loans increased $114 million during the first six months of 2025, providing for an annualized growth rate of about 6%.
−Removed: Commercial and industrial loans grew $88.1 million and multi-family and residential rental property loans increased $43.3 million, largely reflecting enhanced use of lines of credit and draws on multi-family construction loans, respectively.
−Removed: Non-owner occupied CRE loans grew $5.6 million while owner occupied CRE loans were down $23.7 million;
−Removed: both CRE loan segments were impacted by the full payoffs and partial paydowns of certain larger relationships largely stemming from sales of the underlying properties.
+Added: Our total assets increased $256 million during the first nine months of 2025, and totaled $6.31 billion as of September 30, 2025.
+Added: Loans grew $14.4 million, securities available for sale increased $125 million and interest-earning deposits were up $82.4 million during the first nine months of 2025.
+Added: Deposits increased $113 million and sweep accounts grew $130 million, while FHLBI advances decreased $40.9 million during the first nine months of 2025.
+Added: Commercial loans increased $43.0 million during the first nine months of 2025, providing for an annualized growth rate of about 2%.
+Added: Commercial and industrial loans grew $50.4 million and multi-family and residential rental property loans increased $45.3 million.
+Added: Non-owner occupied CRE loans declined $37.2 million while owner occupied CRE loans were down $19.4 million;
+Added: both CRE loan segments were impacted by the payoffs of several larger relationships largely stemming from sales of the underlying properties and refinancings to the secondary market.
Land development and construction loans expanded by $3.9 million.
−Removed: As a percent of total commercial loans, commercial and industrial loans and owner occupied CRE loans combined equaled 55.0% as of June 30, 2025, compared to 54.9% as of December 31, 2024.
−Removed: Commercial loans totaled $3.82 billion, or 81.3% of total loans, as of June 30, 2025, compared to $3.71 billion, or 80.6% of total loans, as of December 31, 2024.
−Removed: We had $237 million in unfunded loan commitments on commercial construction and development loans that are in the construction phase as of June 30, 2025, which we expect to be drawn over the next 12 to 18 months.
+Added: As a percent of total commercial loans, commercial and industrial loans and owner occupied CRE loans combined equaled 55.1% as of September 30, 2025, compared to 54.9% as of December 31, 2024.
+Added: Commercial loans totaled $3.75 billion, or 81.3% of total loans, as of September 30, 2025, compared to $3.71 billion, or 80.6% of total loans, as of December 31, 2024.
+Added: As anticipated, we did experience several relatively large CRE-related loan payoffs, as well as a reduction in line of credit usage, which negatively impacted commercial loan growth during the third quarter of 2025.
+Added: We had $216 million in unfunded loan commitments on commercial construction and development loans that were in the construction phase as of September 30, 2025, which we expect to be drawn over the next 12 to 18 months.
Our current pipeline reports indicate approximately $307 million in new lending opportunities of which we expect a majority to be accepted and funded over the next 12 to 18 months.
We remain committed to prudent underwriting standards that provide for an appropriate yield and risk relationship, as well as concentration limits we have established within our commercial loan portfolio.
−Removed: Usage of existing commercial lines of credit averaged about 45% during the first six months of 2025, compared to approximately 42% during all of 2024.
−Removed: Residential mortgage loans totaled $799 million, or 17.0% of total loans, as of June 30, 2025.
−Removed: Residential mortgage loans decreased $28.2 million during the first six months of 2025, as aggregate payoffs and scheduled monthly payments exceeded new loans added to the portfolio.
−Removed: Residential mortgage loan originations totaled $242 million during the first six months of 2025, of which about 80% were originated with the intent to sell.
−Removed: Other consumer-related loans, primarily comprised of home equity lines of credit, totaled $77.4 million, or 1.7% of total loans, as of June 30, 2025, compared to $65.9 million, or 1.4% of total loans, as of December 31, 2024.
+Added: Usage of existing commercial lines of credit averaged about 45% during the first nine months of 2025, compared to approximately 42% during all of 2024.
+Added: Residential mortgage loans totaled $781 million, or 16.9% of total loans, as of September 30, 2025.
+Added: Residential mortgage loans decreased $46.7 million during the first nine months of 2025, as aggregate payoffs and scheduled monthly payments exceeded new loans added to the portfolio.
+Added: Residential mortgage loan originations totaled $379 million during the first nine months of 2025, of which about 80% were originated with the intent to sell.
+Added: Other consumer-related loans, primarily comprised of home equity lines of credit, totaled $83.9 million, or 1.9% of total loans, as of September 30, 2025, compared to $65.9 million, or 1.4% of total loans, as of December 31, 2024.
We expect this loan portfolio segment to remain relatively stable in dollar amount but decline as a percentage of total loans in future periods as the commercial loan segment grows.
11 unchanged sentences
In addition, we may discount certain appraised and internal value estimates to address distressed market conditions.
−Removed: Nonperforming loans totaled $9.7 million, or 0.2% of total loans, as of June 30, 2025, compared to $5.7 million, or 0.1% of total loans, as of December 31, 2024.
−Removed: We had no loans past due 90 days or more and accruing interest or foreclosed properties as of June 30, 2025, or December 31, 2024.
+Added: Nonperforming loans totaled $9.8 million, or 0.2% of total loans, as of September 30, 2025, compared to $5.7 million, or 0.1% of total loans, as of December 31, 2024.
+Added: We had no loans past due 90 days or more and accruing interest or foreclosed properties as of September 30, 2025, or December 31, 2024.
The volume of nonperforming loans has remained under 0.3% of total loans since year-end 2015.
Given the low levels of nonperforming loans and accruing loans delinquent 30 to 89 days, combined with what we believe are strong credit administration practices, we are pleased with the overall quality of the loan portfolio.
−Removed: Gross loan charge-offs totaled $0.1 million during the first six months of 2025, while recoveries of prior period loan charge-offs aggregated $0.3 million, providing for a net loan recovery of $0.2 million.
+Added: Gross loan charge-offs totaled $0.3 million during the first nine months of 2025, while recoveries of prior period loan charge-offs aggregated $1.1 million, providing for a net loan recovery of $0.8 million.
We continue our collection efforts on charged-off loans and expect to record recoveries in future periods;
however, given the nature of these efforts, it is not practical to forecast the dollar amount and timing of the recoveries.
−Removed: We recorded provision expense of $3.7 million during the first six months of 2025, primarily reflecting increased allocations on specific financially stressed lending relationships, changes to the economic forecast and loan growth.
+Added: We recorded provision expense of $3.9 million during the first nine months of 2025, primarily reflecting a $4.6 million net increase in specific allocations driven by $5.5 million in total allocations for a commercial construction loan relationship that was placed on nonaccrual during the second quarter of 2025, a $1.9 million reserve increase related to changes to the economic forecast, and a $1.7 million net increase in qualitative factors stemming from changes in the makeup of the loan portfolio.
The primary risk elements with respect to commercial loans are the financial condition of the borrower, the sufficiency of collateral, and timeliness of scheduled payments.
5 unchanged sentences
MERCANTILE BANK CORPORATION
−Removed: The allowance equaled $58.4 million, or 1.24% of total loans and 599% of nonperforming loans, as of June 30, 2025.
−Removed: The allowance was comprised of $54.5 million in general reserves relating to performing loans and $3.9 million in specific reserves on other loans, primarily nonperforming loans, as of June 30, 2025.
−Removed: Loans with an aggregate carrying value of $0.4 million as of June 30, 2025 had been subject to previous partial charge-offs aggregating $4.1 million over the past several years.
−Removed: There were no specific reserves allocated to loans that had been subject to a previous partial charge-off as of June 30, 2025.
+Added: The allowance equaled $59.1 million, or 1.28% of total loans and 601% of nonperforming loans, as of September 30, 2025.
+Added: The allowance was comprised of $52.3 million in general reserves relating to performing loans and $6.8 million in specific reserves on other loans, primarily nonperforming loans, as of September 30, 2025.
+Added: Loans with an aggregate carrying value of $0.8 million as of September 30, 2025 had been subject to previous partial charge-offs aggregating $0.5 million over the past several years.
+Added: There were no specific reserves allocated to loans that had been subject to a previous partial charge-off as of September 30, 2025.
Although we believe the allowance is adequate to absorb loan losses in our loan portfolio as they arise, there can be no assurance that we will not sustain loan losses in any given period that could be substantial in relation to, or greater than, the size of the allowance.
−Removed: The following table reflects the composition of our allowance for credit losses, nonaccrual loans, and net charge-offs as of and for the six months ended June 30, 2025.
+Added: The following table reflects the composition of our allowance for credit losses, nonaccrual loans, and net charge-offs as of and for the nine months ended September 30, 2025.
(Dollars in thousands)
15 unchanged sentences
MERCANTILE BANK CORPORATION
−Removed: Securities available for sale increased $96.1 million during the first six months of 2025, totaling $826 million, or 13.4% of total assets, as of June 30, 2025.
+Added: Securities available for sale increased $125 million during the first nine months of 2025, totaling $855 million, or 13.6% of total assets, as of September 30, 2025.
Purchases of U.S.
−Removed: Government agency bonds during the first six months of 2025 aggregated $91.7 million, while proceeds from maturities and calls totaled $18.0 million.
+Added: Government agency bonds during the first nine months of 2025 aggregated $122 million, while proceeds from maturities and calls totaled $36.0 million.
There were no purchases of U.S.
−Removed: Government agency guaranteed mortgage-backed securities during the first six months of 2025, while proceeds from principal paydowns aggregated $1.8 million.
−Removed: Purchases of municipal bonds totaled $12.9 million during the first six months of 2025, while maturities totaled $8.4 million.
−Removed: As of June 30, 2025, the portfolio was primarily comprised of U.S.
+Added: Government agency guaranteed mortgage-backed securities during the first nine months of 2025, while proceeds from principal paydowns aggregated $3.1 million.
+Added: Purchases of municipal bonds totaled $20.8 million during the first nine months of 2025, while maturities totaled $9.5 million.
+Added: As of September 30, 2025, the portfolio was primarily comprised of U.S.
Government agency bonds (71%), municipal bonds (26%) and U.S.
1 unchanged sentence
All of our securities are currently designated as available for sale, and are therefore stated at fair value.
−Removed: The fair value of securities designated as available for sale as of June 30, 2025 totaled $826 million, including a net unrealized loss of $45.3 million.
+Added: The fair value of securities designated as available for sale as of September 30, 2025 totaled $855 million, including a net unrealized loss of $36.1 million.
The net unrealized loss equaled $63.1 million as of December 31, 2024.
11 unchanged sentences
We believe our valuation methodology provides for a reasonable estimation of market value, and that it is consistent with the requirements of accounting guidelines.
−Removed: FHLBI stock totaled $21.5 million as of June 30, 2025, unchanged from December 31, 2024.
+Added: FHLBI stock totaled $21.5 million as of September 30, 2025, unchanged from December 31, 2024.
Our investment in FHLBI stock is necessary to engage in the FHLBI’s advance and other financing programs.
We have regularly received quarterly cash dividends, and we expect a cash dividend will continue to be paid in future quarterly periods.
−Removed: Interest-earning assets, a vast majority of which is comprised of funds on deposit with the Federal Reserve Bank of Chicago, averaged $230 million during the first six months of 2025, compared to $166 million during the first six months of 2024.
−Removed: The higher average balance primarily reflects our strategy to reduce the loan-to-deposit ratio via local deposit growth exceeding loan and investment growth, as well as our desire to maintain higher levels of on balance sheet liquidity.
−Removed: Net premises and equipment equaled $54.8 million as of June 30, 2025, compared to $53.4 million as of December 31, 2024.
−Removed: Depreciation expense totaled $2.5 million during the first six months of 2025, while investments associated with renovations of existing facilities and equipment purchases aggregated $3.9 million.
−Removed: Other assets totaled $170 million as of June 30, 2025, compared to $148 million as of December 31, 2024.
−Removed: The increase during the period was primarily attributable to an increase of $13.5 million in Low-Income Housing Tax Credit and Historic Tax Credit entity investments and an increase of $9.4 million in federal income tax receivable generated from our investments in transferable energy tax credits.
+Added: Interest-earning deposits, a vast majority of which is comprised of funds on deposit with the Federal Reserve Bank of Chicago, averaged $284 million and $206 million during the first nine months of 2025 and 2024, or almost 5% and 4% of average total assets, respectively.
+Added: We have generally operated with about 1% to 2% of total assets comprised of interest-earning deposits.
+Added: The higher average balance of interest-earning deposits primarily reflects our strategy to reduce the loan-to-deposit ratio via local deposit growth exceeding loan and investment growth, as well as our desire to maintain higher levels of on-balance sheet liquidity.
+Added: Net premises and equipment equaled $56.2 million as of September 30, 2025, compared to $53.4 million as of December 31, 2024.
+Added: Depreciation expense totaled $3.8 million during the first nine months of 2025, while investments associated with renovations of existing facilities and equipment purchases aggregated $6.6 million.
MERCANTILE BANK CORPORATION
−Removed: Total deposits increased $12.1 million during the first six months of 2025.
−Removed: Aggregate net growth in almost all interest-bearing deposit types offset a significant portion of the reduction in business noninterest-bearing and interest-bearing checking accounts primarily reflecting seasonal and customary customers' tax and bonus payments and partnership distributions.
−Removed: Sweep accounts increased $121 million during the first six months of 2025, largely reflecting the return of funds that had been withdrawn during the fourth quarter of 2024.
−Removed: FHLBI advances declined $30.9 million during the first six months of 2025.
−Removed: Wholesale funds, comprised of out-of-area deposits and FHLBI advances, totaled $555 million, or about 10% of total funds, as of June 30, 2025, compared to $537 million, or about 10% of total funds, as of December 31, 2024.
−Removed: Uninsured deposits totaled approximately $2.4 billion, or about 52% of total deposits, as of June 30, 2025, compared to approximately $2.2 billion, or 46% of total deposits, as of December 31, 2024.
−Removed: The uninsured amounts are estimates based on the methodologies and assumptions we use for regulatory reporting requirements.
−Removed: Sweep accounts increased $121 million during the first six months of 2025, largely reflecting the return of funds that had been withdrawn during the fourth quarter of 2024.
−Removed: In addition, the aggregate balance of sweep accounts is subject to relatively large daily fluctuations given the nature of the customers utilizing this product and the sizable balances that many of the customers maintain.
−Removed: The average balance of sweep accounts equaled $232 million during the first six months of 2025, with a high daily balance of $286 million and a low daily balance of $115 million.
+Added: Total deposits increased $113 million during the first nine months of 2025.
+Added: Aggregate growth in money market deposit accounts totaled $149 million, and interest-bearing checking accounts grew $23.5 million.
+Added: Noninterest-bearing checking accounts declined $81.7 million;
+Added: however, these accounts increased about $10 million excluding the expected withdrawal of funds in early January that had been deposited by a single depositor near the end of 2024.
+Added: Sweep accounts increased $130 million during the first nine months of 2025, largely reflecting the return of funds that had been withdrawn during the fourth quarter of 2024.
+Added: FHLBI advances declined $40.9 million during the first nine months of 2025.
+Added: Wholesale funds, comprised of out-of-area deposits and FHLBI advances, totaled $525 million, or about 10% of total funds, as of September 30, 2025, compared to $537 million, or about 10% of total funds, as of December 31, 2024.
+Added: Uninsured deposits totaled approximately $2.6 billion, or about 54% of total deposits, as of September 30, 2025, compared to approximately $2.2 billion, or 46% of total deposits, as of December 31, 2024.
+Added: The uninsured amounts are estimates based on the methodologies and assumptions we use for bank regulatory reporting requirements.
+Added: Sweep accounts increased $130 million during the first nine months of 2025, largely reflecting the return of funds in early 2025 that had been withdrawn during the fourth quarter of 2024.
+Added: The aggregate balance of sweep accounts is subject to relatively large daily fluctuations given the nature of the customers utilizing this product and the sizable balances that many of the customers maintain.
+Added: The average balance of sweep accounts equaled $239 million during the first nine months of 2025, with a high daily balance of $286 million and a low daily balance of $115 million.
Our sweep account program entails transferring collected funds from certain business noninterest-bearing checking accounts and savings deposits into overnight interest-bearing repurchase agreements.
1 unchanged sentence
All of our repurchase agreements are accounted for as secured borrowings.
−Removed: FHLBI advances declined $30.9 million during the first six months of 2025, totaling $356 million as of June 30, 2025.
−Removed: New bullet advances totaled $20.0 million, while bullet advance maturities aggregated $50.0 million during the first six months of 2025.
+Added: FHLBI advances declined $40.9 million during the first nine months of 2025, totaling $346 million as of September 30, 2025.
+Added: New bullet advances totaled $20.0 million, while bullet advance maturities aggregated $60.0 million during the first nine months of 2025.
Payments on amortizing FHLBI advances totaled $0.9 million.
−Removed: Bullet FHLBI advances are generally obtained to provide funds for loan growth and are used to assist in managing interest rate risk, while amortizing FHLBI advances are generally acquired to match-fund specific longer-term fixed rate commercial loans, with the dollar amount and amortization structure of the underlying advances reflective of the associated commercial loans.
+Added: Bullet FHLBI advances are generally obtained to provide funds for loan growth and are used to assist in managing interest rate risk, while amortizing FHLBI advances are generally acquired to match-fund specific longer-term fixed rate commercial loans, with the dollar amounts and amortization structures of the underlying advances reflective of the associated commercial loans.
FHLBI advances are collateralized by residential mortgage loans, first mortgage liens on multi-family residential property loans, first mortgage liens on commercial real estate property loans, and substantially all other assets of our bank, under a blanket lien arrangement.
−Removed: Our borrowing line of credit totaled $1.06 billion, with remaining availability based on collateral equaling $698 million, as of June 30, 2025.
−Removed: Shareholders’ equity increased $47.0 million during the first six months of 2025, equaling $632 million as of June 30, 2025.
−Removed: Positively impacting shareholders’ equity during the first six months of 2025 was net income of $42.2 million, which was partially offset by the payment of cash dividends totaling $11.8 million.
+Added: Our borrowing line of credit totaled $1.08 billion, with remaining availability based on collateral equaling $725 million, as of September 30, 2025.
+Added: Shareholders’ equity increased $73.1 million during the first nine months of 2025, equaling $658 million as of September 30, 2025.
+Added: Positively impacting shareholders’ equity during the first nine months of 2025 was net income of $65.9 million, which was partially offset by the payment of cash dividends totaling $17.9 million.
Activity relating to the issuance and sale of common stock through various stock-based compensation programs and our dividend reinvestment plan positively impacted shareholders’ equity by $3.8 million.
−Removed: A $14.1 million after-tax increase in the market value of our available for sale securities portfolio, reflecting a decline in market interest rates, positively impacted shareholders’ equity during the first six months of 2025.
+Added: A $21.3 million after-tax increase in the market value of our available for sale securities portfolio, reflecting a decline in market interest rates, also positively impacted shareholders’ equity during the first nine months of 2025.
MERCANTILE BANK CORPORATION
4 unchanged sentences
To assist in providing needed funds and managing interest rate risk, we periodically obtain monies from wholesale funding sources.
−Removed: Wholesale funds, comprised of out-of-area deposits and FHLBI advances, totaled $555 million, or about 10% of total funds, as of June 30, 2025, compared to $537 million, or about 10% of total funds, as of December 31, 2024.
−Removed: Sweep accounts increased $121 million during the first six months of 2025, largely reflecting the return of funds that had been withdrawn during the fourth quarter of 2024.
−Removed: In addition, the aggregate balance of sweep accounts is subject to relatively large daily fluctuations given the nature of the customers utilizing this product and the sizable balances that many of the customers maintain.
−Removed: The average balance of sweep accounts equaled $232 million during the first six months of 2025, with a high daily balance of $286 million and a low daily balance of $115 million.
+Added: Wholesale funds, comprised of out-of-area deposits and FHLBI advances, totaled $525 million, or about 10% of total funds, as of September 30, 2025, compared to $537 million, or about 10% of total funds, as of December 31, 2024.
+Added: Sweep accounts increased $130 million during the first nine months of 2025, largely reflecting the return of funds in early 2025 that had been withdrawn during the fourth quarter of 2024.
+Added: The aggregate balance of sweep accounts is subject to relatively large daily fluctuations given the nature of the customers utilizing this product and the sizable balances that many of the customers maintain.
+Added: The average balance of sweep accounts equaled $239 million during the first nine months of 2025, with a high daily balance of $286 million and a low daily balance of $115 million.
Our sweep account program entails transferring collected funds from certain business noninterest-bearing checking accounts and savings deposits into overnight interest-bearing repurchase agreements.
1 unchanged sentence
All of our repurchase agreements are accounted for as secured borrowings.
−Removed: Information regarding our repurchase agreements as of June 30, 2025 and during the first six months of 2025 is as follows:
+Added: Information regarding our repurchase agreements as of September 30, 2025 and during the first nine months of 2025 is as follows:
(Dollars in thousands)
−Removed: Outstanding balance at June 30, 2025
−Removed: Weighted average interest rate at June 30, 2025
−Removed: Maximum daily balance six months ended June 30, 2025
−Removed: Average daily balance for six months ended June 30, 2025
−Removed: Weighted average interest rate for six months ended June 30, 2025
−Removed: FHLBI advances declined $30.9 million during the first six months of 2025, totaling $356 million as of June 30, 2025.
−Removed: New bullet advances totaled $20.0 million, while bullet advance maturities aggregated $50.0 million during the first six months of 2025.
+Added: Outstanding balance at September 30, 2025
+Added: Weighted average interest rate at September 30, 2025
+Added: Maximum daily balance nine months ended September 30, 2025
+Added: Average daily balance for nine months ended September 30, 2025
+Added: Weighted average interest rate for nine months ended September 30, 2025
+Added: FHLBI advances declined $40.9 million during the first nine months of 2025, totaling $346 million as of September 30, 2025.
+Added: New bullet advances totaled $20.0 million, while bullet advance maturities aggregated $60.0 million during the first nine months of 2025.
Payments on amortizing FHLBI advances totaled $0.9 million.
−Removed: Bullet FHLBI advances are generally obtained to provide funds for loan growth and are used to assist in managing interest rate risk, while amortizing FHLBI advances are generally acquired to match-fund specific longer-term fixed rate commercial loans, with the dollar amount and amortization structure of the underlying advances reflective of the associated commercial loans.
+Added: Bullet FHLBI advances are generally obtained to provide funds for loan growth and are used to assist in managing interest rate risk, while amortizing FHLBI advances are generally acquired to match-fund specific longer-term fixed rate commercial loans, with the dollar amounts and amortization structures of the underlying advances reflective of the associated commercial loans.
FHLBI advances are collateralized by residential mortgage loans, first mortgage liens on multi-family residential property loans, first mortgage liens on commercial real estate property loans, and substantially all other assets of our bank, under a blanket lien arrangement.
−Removed: Our borrowing line of credit totaled $1.06 billion, with remaining availability based on collateral equaling $698 million, as of June 30, 2025.
+Added: Our borrowing line of credit totaled $1.08 billion, with remaining availability based on collateral equaling $725 million, as of September 30, 2025.
We also have the ability to borrow up to an aggregate $70.0 million on a daily basis through correspondent banks using established unsecured federal funds purchased lines of credit.
−Removed: We had limited activity on these lines of credit during the first six months of 2025.
−Removed: In contrast, our interest-earning deposit balance with the Federal Reserve Bank of Chicago averaged $208 million during the first six months of 2025.
+Added: Draws on these lines of credit during the first nine months of 2025 averaged less than $0.1 million.
+Added: In contrast, our interest-earning deposit balance with the Federal Reserve Bank of Chicago averaged $260 million during the first nine months of 2025.
We also have a line of credit through the Discount Window of the Federal Reserve Bank of Chicago.
−Removed: Using certain municipal bonds as collateral, we could have borrowed up to $153 million as of June 30, 2025.
−Removed: We did not utilize this line of credit during the first six months of 2025 or at any time during the previous 16 fiscal years, and do not plan to access this line of credit in future periods.
+Added: Using certain municipal bonds as collateral, we could have borrowed up to $156 million as of September 30, 2025.
+Added: We did not utilize this line of credit during the first nine months of 2025 or at any time during the previous 16 fiscal years, and do not plan to access this line of credit in future periods.
MERCANTILE BANK CORPORATION
−Removed: The following table reflects, as of June 30, 2025, significant fixed and determinable contractual obligations to third parties by payment date, excluding accrued interest:
+Added: The following table reflects, as of September 30, 2025, significant fixed and determinable contractual obligations to third parties by payment date, excluding accrued interest:
(Dollars in thousands)
7 unchanged sentences
Premises and equipment leases
−Removed: The balance of certificates of deposit exceeding the FDIC insured limit and their maturity profile as of June 30, 2025 and December 31, 2024 were as follows:
+Added: The balance of certificates of deposit exceeding the FDIC insured limit and their maturity profile as of September 30, 2025 and December 31, 2024 were as follows:
(Dollars in thousands)
−Removed: June 30, 2025
+Added: September 30, 2025
December 31, 2024
5 unchanged sentences
In addition to normal loan funding and deposit flow, we must maintain liquidity to meet the demands of certain unfunded loan commitments and standby letters of credit.
−Removed: As of June 30, 2025, we had a total of $1.99 billion in unfunded loan commitments and $26.4 million in unfunded standby letters of credit.
+Added: As of September 30, 2025, we had a total of $2.19 billion in unfunded loan commitments and $26.3 million in unfunded standby letters of credit.
Of the total unfunded loan commitments, $1.89 billion were commitments available as lines of credit to be drawn at any time as customers’ cash needs vary, and $307 million were for loan commitments generally expected to close and become funded within the next 12 to 18 months.
3 unchanged sentences
Capital Resources
−Removed: Shareholders’ equity increased $47.0 million during the first six months of 2025, equaling $632 million as of June 30, 2025.
−Removed: Positively impacting shareholders’ equity during the first six months of 2025 was net income of $42.2 million, which was partially offset by the payment of cash dividends totaling $11.8 million.
+Added: Shareholders’ equity increased $73.1 million during the first nine months of 2025, equaling $658 million as of September 30, 2025.
+Added: Positively impacting shareholders’ equity during the first nine months of 2025 was net income of $65.9 million, which was partially offset by the payment of cash dividends totaling $17.9 million.
Activity relating to the issuance and sale of common stock through various stock-based compensation programs and our dividend reinvestment plan positively impacted shareholders’ equity by $3.8 million.
−Removed: A $14.1 million after-tax increase in the market value of our available for sale securities portfolio, reflecting a decline in market interest rates, positively impacted shareholders’ equity during the first six months of 2025.
+Added: A $21.3 million after-tax increase in the market value of our available for sale securities portfolio, reflecting a decline in market interest rates, also positively impacted shareholders’ equity during the first nine months of 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 the financial statements.
−Removed: As of June 30, 2025, our bank’s total risk-based capital ratio was 13.9%, unchanged from December 31, 2024.
−Removed: Our bank’s total regulatory capital increased $20.1 million during the first six months of 2025, in large part reflecting net income totaling $47.5 million, which was partially offset by cash dividends paid to us aggregating $31.2 million.
−Removed: As of June 30, 2025, our bank’s total regulatory capital equaled $779 million, or $218 million in excess of the 10.0% minimum that is among the requirements to be categorized as “well capitalized.” Our and our bank’s capital ratios as of June 30, 2025 and December 31, 2024 are disclosed in Note 13 of the Notes to Consolidated Financial Statements.
+Added: As of September 30, 2025, our bank’s total risk-based capital ratio was 14.3%, compared to 13.9% as of December 31, 2024.
+Added: Our bank’s total regulatory capital increased $33.4 million during the first nine months of 2025, in large part reflecting net income totaling $74.1 million, which was partially offset by cash dividends paid to us aggregating $45.5 million.
+Added: As of September 30, 2025, our bank’s total regulatory capital equaled $793 million, or $236 million in excess of the 10.0% minimum that is among the requirements to be categorized as “well capitalized.” Our and our bank’s capital ratios as of September 30, 2025 and December 31, 2024 are disclosed in Note 13 of the Notes to Consolidated Financial Statements.
MERCANTILE BANK CORPORATION
Results of Operations
−Removed: We recorded net income of $22.6 million, or $1.39 per basic and diluted share, for the second quarter of 2025, compared with net income of $18.8 million, or $1.17 per basic and diluted share, for the second quarter of 2024.
−Removed: We recorded net income of $42.2 million, or $2.60 per basic and diluted share, for the first six months of 2025, compared with net income of $40.3 million, or $2.50 per basic and diluted share, for the first six months of 2024.
−Removed: Diluted earnings per share increased $0.22, or 18.8%, during the second quarter of 2025, and $0.10, or 4.0%, during the first six months of 2025, compared with the respective prior-year periods.
−Removed: The increases in net income during the 2025 periods compared to the respective 2024 periods primarily reflected growth in net interest income, reduced federal income tax expense, and lower provision expense, which more than offset higher noninterest expense.
−Removed: A higher level of noninterest income, mainly reflecting growth in mortgage banking income, interest rate swap income, treasury management fees, and payroll service fees, also contributed to the increase in net income during the second quarter of 2025.
+Added: We recorded net income of $23.8 million, or $1.46 per basic and diluted share, for the third quarter of 2025, compared with net income of $19.6 million, or $1.22 per basic and diluted share, for the third quarter of 2024.
+Added: We recorded net income of $65.9 million, or $4.06 per basic and diluted share, for the first nine months of 2025, compared with net income of $60.0 million, or $3.72 per basic and diluted share, for the first nine months of 2024.
+Added: Diluted earnings per share increased $0.24, or 19.7%, during the third quarter of 2025, and $0.34, or 9.1%, during the first nine months of 2025, compared with the respective prior-year periods.
+Added: The increases in net income during the 2025 periods compared to the respective 2024 periods primarily reflected growth in net interest income and lower levels of federal income tax expense and provisions for credit losses, which more than offset increased noninterest expense.
+Added: Higher levels of noninterest income, mainly reflecting growth in treasury management fees and payroll services fees during both 2025 periods and an increase in mortgage banking income during the first nine months of 2025, also contributed to the increases in net income.
Net interest income increased as earning asset expansion and a decrease in the cost of funds outweighed a lower yield on earning assets and growth in interest-bearing liabilities.
−Removed: The decreases in federal income tax expense primarily resulted from the recognition of tax benefits stemming from the acquisition of transferable energy tax credits during the second quarter of 2025.
−Removed: The provision expense recorded during the 2025 periods mainly reflected a net increase in individual allocations driven by a commercial construction loan that was placed on nonaccrual during the second quarter and allocations necessitated by loan growth;
−Removed: the net impact of changes to the economic forecast also contributed to the provision expense recorded during the first six months of 2025.
+Added: The decreases in federal income tax expense primarily resulted from the recognition of tax benefits stemming from the acquisition of transferable energy tax credits during the second quarter and third quarter of 2025;
+Added: net benefits from investments in tax credit structures also positively impacted federal income tax expense during the current-year third quarter.
+Added: The provisions for credit losses recorded during the 2025 periods mainly reflected a net increase in specific allocations driven by a commercial construction loan that was placed on nonaccrual during the second quarter and a net increase in qualitative factor allocations reflecting changes in the composition of the loan portfolio.
+Added: The net impact of changes to the economic forecast also contributed to the provision expense recorded during the first nine months of 2025.
Noninterest expense increased during the 2025 periods primarily due to higher levels of salary and benefit and data processing costs and allocations to the reserve for unfunded loan commitments.
−Removed: Interest income during the second quarter of 2025 was $82.0 million, an increase of $3.1 million, or 3.9%, from the $78.9 million earned during the second quarter of 2024.
+Added: Acquisition costs related to the previously announced partnership with Eastern Michigan Bank Corporation also contributed to the increases in noninterest expense during the 2025 periods.
+Added: Interest income during the third quarter of 2025 was $85.6 million, an increase of $2.2 million, or 2.7%, from the $83.4 million earned during the third quarter of 2024.
The increase resulted from growth in average earning assets, which more than offset a lower yield on average earning assets.
−Removed: Average earning assets equaled $5.71 billion during the second quarter of 2025, up $494 million, or 9.5%, from the level of $5.22 billion during the prior-year second quarter; average loans were up $299 million, average securities increased $184 million, and average interest-earning assets grew $11.0 million.
−Removed: The yield on average earning assets was 5.77% during the current-year second quarter, a decrease from 6.07% during the respective 2024 period.
−Removed: The lower yield mainly resulted from a decreased yield on loans and a change in earning asset mix, which more than offset an enhanced yield on securities stemming from reinvestment and portfolio expansion activities in a higher interest rate environment.
−Removed: The yield on loans was 6.32% during the second quarter of 2025, down from 6.64% during the second quarter of 2024 primarily due to lower interest rates on variable-rate commercial loans resulting from the Federal Open Market Committee (“FOMC”) lowering the targeted federal funds rate.
+Added: Average earning assets equaled $5.92 billion during the third quarter of 2025, up $469 million, or 8.6%, from the level of $5.45 billion during the prior-year third quarter; average loans were up $201 million, average securities increased $163 million, and average interest-earning deposits grew $105 million.
+Added: The yield on average earning assets was 5.75% during the current-year third quarter, a decrease from 6.08% during the respective 2024 period.
+Added: The lower yield mainly stemmed from a reduced yield on loans and a change in earning asset mix, which more than offset an improved yield on securities resulting from the reinvestment of relatively low-yielding bonds and portfolio expansion activities.
+Added: The yield on loans was 6.38% during the third quarter of 2025, down from 6.69% during the third quarter of 2024 primarily due to lower interest rates on variable-rate commercial loans resulting from the FOMC lowering the targeted federal funds rate.
The FOMC decreased the targeted federal funds rate by 50 basis points in September of 2024 and 25 basis points in each of November and December of 2024, during which time average variable-rate commercial loans represented approximately 73% of average total commercial loans.
−Removed: Reflecting the success of a strategic initiative to reduce the loan-to-deposit ratio and increase on-balance sheet liquidity, higher-yielding loans represented a decreased percentage of earning assets and lower-yielding securities accounted for an increased percentage of earning assets in the second quarter of 2025 compared to the second quarter of 2024.
−Removed: The yield on securities equaled 2.97% during the second quarter of 2025, up from 2.30% during the prior-year second quarter.
−Removed: Interest income during the first six months of 2025 was $162 million, an increase of $6.7 million, or 4.3%, from the $156 million earned during the first six months of 2024.
+Added: A further 25 basis point reduction in the targeted federal funds, which was approved by the FOMC in September of 2025, also contributed to the reduced loan yield.
+Added: Signifying the success of a strategic initiative to lower the loan-to-deposit ratio and increase on-balance sheet liquidity, higher-yielding loans represented a decreased percentage of earning assets and lower-yielding securities accounted for an increased percentage of earning assets in the third quarter of 2025 compared to the third quarter of 2024.
+Added: A lower yield on interest-earning deposits, reflecting the decreased interest rate environment, also contributed to the reduced yield on average earning assets.
+Added: The yield on securities equaled 3.04% during the third quarter of 2025, up from 2.43% during the prior-year third quarter.
+Added: Interest income during the first nine months of 2025 was $248 million, an increase of $8.9 million, or 3.7%, from the $239 million earned during the first nine months of 2024.
The increase resulted from a higher level of average earning assets, which more than offset a lower yield on average earning assets.
−Removed: Average earning assets equaled $5.70 billion during the first six months of 2025, up $546 million, or 10.6%, from the level of $5.15 billion during the respective 2024 period;
−Removed: average loans increased $315 million, average securities grew $167 million, and average interest-earning assets were up $63.6 million.
−Removed: The yield on average earning assets was 5.76% during the first six months of 2025, a decline from 6.06% during the first six months of 2024.
−Removed: The decreased yield mainly resulted from a lower yield on loans and a change in earning asset mix, which more than offset an improved yield on securities reflecting reinvestment and portfolio expansion activities in a higher interest rate environment.
−Removed: The yield on loans was 6.31% during the first six months of 2025, down from 6.65% during the respective prior-year period largely due to reduced interest rates on variable-rate commercial loans stemming from the aforementioned FOMC interest rate cuts.
−Removed: Higher-yielding loans accounted for a decreased percentage of earning assets and lower-yielding securities and other interest-earning assets represented increased percentages of earning assets in the first six months of 2025 compared to the first six months of 2024.
−Removed: The yield on securities equaled 2.93% during the first six months of 2025, up from 2.25% during the respective 2024 period.
+Added: Average earning assets equaled $5.77 billion during the first nine months of 2025, up $520 million, or 9.9%, from the level of $5.25 billion during the first nine months of 2024; average loans increased $276 million, average securities grew $166 million, and average interest-earning deposits were up $77.7 million.
+Added: The yield on average earning assets was 5.76% during the first nine months of 2025, a decline from 6.06% during the respective 2024 period.
+Added: The decreased yield mainly resulted from a lower yield on loans and a change in earning asset mix, which more than offset an improved yield on securities reflecting the reinvestment of relatively low-yielding bonds and portfolio expansion activities.
+Added: The yield on loans was 6.33% during the first nine months of 2025, down from 6.66% during the first nine months of 2024 largely due to reduced interest rates on variable-rate commercial loans stemming from the aforementioned FOMC interest rate cuts.
+Added: Higher-yielding loans accounted for a decreased percentage of earning assets and lower-yielding securities and interest-earning deposits represented increased percentages of earning assets in the first nine months of 2025 compared to the first nine months of 2024.
+Added: A decreased yield on interest-earning deposits, reflecting the lower interest rate environment, also contributed to the reduced yield on average earning assets.
+Added: The yield on securities equaled 2.97% during the first nine months of 2025, up from 2.31% during the respective 2024 period.
MERCANTILE BANK CORPORATION
−Removed: Interest expense during the second quarter of 2025 was $32.5 million, an increase of $0.7 million, or 2.1%, from the $31.8 million expensed during the second quarter of 2024.
−Removed: The higher level of interest expense resulted from growth in average interest-bearing liabilities, which more than offset a decline in the weighted average cost of these funds.
−Removed: Average interest-bearing liabilities totaled $4.21 billion during the second quarter of 2025, compared to $3.76 billion during the prior-year second quarter, representing an increase of $455 million, or 12.1%.
−Removed: The weighted average cost of interest-bearing liabilities declined from 3.40% during the second quarter of 2024 to 3.09% during the second quarter of 2025 mainly due to lower rates paid on money market accounts and time deposits, reflecting the decreased interest rate environment that began in September of 2024 in conjunction with the FOMC’s lowering of the targeted federal funds rate.
−Removed: A change in funding mix, primarily consisting of decreases in average noninterest-bearing checking accounts and lower-cost non-time deposits and increases in average higher-cost money market accounts and time deposits as a percentage of total funding sources, negatively impacted the weighted average cost of interest-bearing liabilities during the second quarter of 2025.
−Removed: The increases in money market accounts and time deposits reflected new deposit relationships, growth in existing deposit relationships, and deposit migration.
−Removed: Interest expense during the first six months of 2025 was $64.3 million, an increase of $3.1 million, or 5.1%, from the $61.2 million expensed during the first six months of 2024.
+Added: Interest expense during the third quarter of 2025 was $33.6 million, a decrease of $1.5 million, or 4.2%, from the $35.1 million expensed during the third quarter of 2024.
+Added: The lower level of interest expense resulted from a decrease in the weighted average cost of average interest-bearing liabilities, which more than offset growth in these funds.
+Added: The average weighted cost of interest-bearing liabilities declined from 3.53% during the third quarter of 2024 to 3.06% during the third quarter of 2025 mainly due to lower rates paid on money market accounts and time deposits, reflecting the decreased interest rate environment that began in September of 2024 in conjunction with the FOMC’s lowering of the targeted federal funds rate.
+Added: Average interest-bearing liabilities totaled $4.36 billion during the third quarter of 2025, compared to $3.94 billion during the prior-year third quarter, representing an increase of $418 million, or 10.6%.
+Added: Interest expense during the first nine months of 2025 was $97.9 million, an increase of $1.6 million, or 1.7%, from the $96.3 million expensed during the first nine months of 2024.
The increased interest expense reflected growth in average interest-bearing liabilities, which more than offset a reduction in the weighted average cost of these funds.
−Removed: Average interest-bearing liabilities totaled $4.20 billion during the first six months of 2025, compared to $3.68 billion during the respective 2024 period, representing an increase of $515 million, or 14.0%.
−Removed: The weighted average cost of interest-bearing liabilities decreased from 3.33% during the first six months of 2024 to 3.09% during the first six months of 2025 mainly due to lower rates paid on money market accounts and time deposits, reflecting the decreased interest rate environment starting in September of 2024 and coinciding with the FOMC’s lowering of the targeted federal funds rate.
−Removed: Increases in average higher-cost money market accounts and time deposits as a percentage of total funding sources negatively impacted the cost of funds during the first six months of 2025.
−Removed: Net interest income during the second quarter of 2025 was $49.5 million, an increase of $2.4 million, or 5.1%, from the $47.1 million earned during the respective 2024 period.
−Removed: The increase reflected growth in earning assets, which more than offset a lower net interest margin.
−Removed: The net interest margin was 3.49% in the current-year second quarter, down from 3.63% in the second quarter of 2024 due to a decreased yield on average earning assets, which more than offset a decline in the cost of funds.
+Added: Average interest-bearing liabilities totaled $4.25 billion during the first nine months of 2025, compared to $3.77 billion during the respective 2024 period, representing an increase of $483 million, or 12.8%.
+Added: The average weighted cost of interest-bearing liabilities decreased from 3.40% during the first nine months of 2024 to 3.08% during the first nine months of 2025 mainly due to lower rates paid on money market accounts and time deposits, reflecting the decreased interest rate environment starting in September of 2024 and coinciding with the FOMC’s lowering of the targeted federal funds rate.
+Added: A change in funding mix, primarily consisting of decreases in average noninterest-bearing checking accounts and lower-cost non-time deposits and increases in average higher-cost money market accounts and time deposits as a percentage of total funding sources, negatively impacted the weighted average cost of interest-bearing liabilities during the first nine months of 2025.
+Added: The increases in money market accounts and time deposits reflected new deposit relationships, growth in existing deposit relationships, and deposit migration.
+Added: Net interest income during the third quarter of 2025 was $52.0 million, an increase of $3.7 million, or 7.7%, from the $48.3 million earned during the respective 2024 period.
+Added: The increase reflected growth in earning assets, which more than offset a slightly lower net interest margin.
+Added: The net interest margin was 3.50% in the current-year third quarter, down from 3.52% in the third quarter of 2024 due to a decreased yield on average earning assets, which more than offset a decline in the cost of funds.
The lower yield on average earning assets mainly resulted from a decreased yield on commercial loans, largely reflecting the impact of the previously mentioned FOMC rate cuts.
−Removed: The cost of funds equaled 2.28% in the second quarter of 2025, down from 2.44% in the prior-year second quarter primarily due to lower costs of money market accounts and time deposits, reflecting the decreasing interest rate environment over the last four months of 2024.
−Removed: Net interest income during the first six months of 2025 was $98.0 million, an increase of $3.6 million, or 3.8%, from the $94.4 million earned during the respective 2024 period.
+Added: The cost of funds equaled 2.25% in the third quarter of 2025, down from 2.56% in the prior-year third quarter primarily due to lower costs of money market accounts and time deposits, largely reflecting the decreasing interest rate environment over the last four months of 2024.
+Added: Net interest income during the first nine months of 2025 was $150 million, an increase of $7.3 million, or 5.1%, from the $143 million earned during the respective 2024 period.
The increase reflected earning asset expansion, which more than offset a decreased net interest margin.
−Removed: The net interest margin was 3.49% in the first six months of 2025, down from 3.68% in the first six months of 2024 due to a lower yield on earning assets, which outweighed a decreased cost of funds.
+Added: The net interest margin was 3.49% in the first nine months of 2025, down from 3.62% in the first nine months of 2024 due to a lower yield on earning assets, which outweighed a decreased cost of funds.
The reduced yield on average earning assets primarily reflected a decreased yield on commercial loans, in large part stemming from the aforementioned FOMC rate cuts.
−Removed: The cost of funds equaled 2.27% in the first six months of 2025, down from 2.38% in the respective 2024 period mainly due to lower rates paid on money market accounts and time deposits, reflecting the decreasing interest rate environment during the last four months of 2024.
−Removed: The following tables set forth certain information relating to our consolidated average interest-earning assets and interest-bearing liabilities and reflect the average yield on assets and average cost of liabilities for the second quarters and first six months of 2025 and 2024.
+Added: The cost of funds equaled 2.27% in the first nine months of 2025, down from 2.44% in the respective 2024 period mainly due to lower rates paid on money market accounts and time deposits, in large part reflecting the decreasing interest rate environment during the last four months of 2024.
+Added: The following tables set forth certain information relating to our consolidated average interest-earning assets and interest-bearing liabilities and reflect the average yield on assets and average cost of liabilities for the third quarters and first nine months of 2025 and 2024.
Such yields and costs are derived by dividing income or expense by the average daily balance of assets or liabilities, respectively, for the period presented.
−Removed: Tax-exempt securities interest income and yield for the second quarters and first six months of 2025 and 2024 have been computed on a tax equivalent basis using a marginal tax rate of 21.0%.
−Removed: Securities interest income was increased by $255,000 and $60,000 in the second quarters of 2025 and 2024, respectively, and $510,000 and $120,000 in the first six months of 2025 and 2024, respectively, for this non-GAAP, but industry standard, adjustment.
+Added: Tax-exempt securities interest income and yield for the third quarters and first nine months of 2025 and 2024 have been computed on a tax equivalent basis using a marginal tax rate of 21.0%.
+Added: Securities interest income was increased by $255,000 and $60,000 in the third quarters of 2025 and 2024, respectively, and $765,000 and $180,000 in the first nine months of 2025 and 2024, respectively, for this non-GAAP, but industry standard, adjustment.
These adjustments equated to increases in our net interest margin of approximately two basis points for each of the 2025 periods and less than one basis point for each of the 2024 periods.
MERCANTILE BANK CORPORATION
−Removed: Quarters ended June 30,
+Added: Quarters ended September 30,
(dollars in thousands)
Investment securities
−Removed: Interest-earning assets
+Added: Interest-earning deposits
Total interest - earning assets
15 unchanged sentences
MERCANTILE BANK CORPORATION
−Removed: Six months ended June 30,
+Added: Nine months ended September 30,
(dollars in thousands)
Investment securities
−Removed: Interest-earning assets
+Added: Interest-earning deposits
Total interest - earning assets
15 unchanged sentences
MERCANTILE BANK CORPORATION
−Removed: Provisions for credit losses of $1.6 million and $3.5 million were recorded during the second quarters of 2025 and 2024, respectively, and $3.7 million and $4.8 million during the first six months of 2025 and 2024, respectively.
−Removed: The provision expense recorded during the second quarter of 2025 mainly reflected an individual allocation of $2.5 million associated with a commercial construction loan relationship that was placed on nonaccrual during the quarter and allocations of $0.7 million necessitated by net loan growth, which more than offset an aggregate reduction of $1.0 million in individual allocations related to nonperforming loan relationships resulting from full payoffs and partial paydowns.
−Removed: The provision expense recorded during the first six months of 2025 primarily reflected a net increase in individual allocations driven by the aforementioned commercial construction loan that was placed on nonaccrual during the second quarter, allocations necessitated by net loan growth, and the net impact of changes to the economic forecast.
−Removed: The provision expense recorded during the second quarter of 2024 primarily reflected an individual allocation for a nonperforming nonreal-estate-related commercial loan relationship and allocations necessitated by net loan growth, while the provision expense recorded during the first six months of 2024 mainly reflected the aforementioned individual allocation, an individual allocation for a different nonperforming nonreal-estate-related commercial loan relationship during the first quarter, and allocations required by net loan growth.
−Removed: Ongoing strong loan quality metrics, including low levels of loan charge-offs, during the 2025 and 2024 periods largely mitigated additional reserves associated with the previously mentioned factors.
−Removed: Noninterest income totaled $11.5 million during the second quarter of 2025, up $1.8 million, or 18.4%, from $9.7 million during the respective 2024 period.
−Removed: The increase primarily stemmed from growth in mortgage banking income, interest rate swap income, treasury management fees, bank owned life insurance income, and payroll service fees, along with the recognition of tax credit syndication fees, which more than offset a decrease in revenue generated from investments in private equity funds.
−Removed: The higher level of mortgage banking income mainly resulted from increases in the percentage of loans originated with the intent to sell, which equaled approximately 79% during the current-year second quarter compared to approximately 75% during the second quarter of 2024, and total loan originations, which were up approximately 16% during the second quarter of 2025 compared to the corresponding 2024 period.
+Added: Provisions for credit losses of $0.2 million and $1.1 million were recorded during the third quarters of 2025 and 2024, respectively, and $3.9 million and $5.9 million during the first nine months of 2025 and 2024, respectively.
+Added: The provision expense recorded during the current-year third quarter mainly reflected a $2.9 million net increase in specific allocations, largely reflecting a $3.1 million increase in the specific allocation for a commercial construction loan relationship that was placed on nonaccrual during the second quarter of 2025, and a $0.9 million net increase in qualitative factor allocations resulting from changes in the composition of the loan portfolio.
+Added: The impacts of these factors were partially offset by $2.3 million and $0.9 million reductions in the reserve related to faster residential mortgage and consumer loan prepayment speeds and the associated shortened average lives of the portfolios and a net decline in the loan portfolio, respectively.
+Added: The provision expense recorded during the first nine months of 2025 primarily reflected a $4.6 million net increase in specific allocations driven by $5.5 million in total allocations for the aforementioned commercial construction loan, a $1.9 million reserve increase related to changes to the economic forecast, and a $1.7 million net increase in qualitative factors stemming from changes in the makeup of the loan portfolio.
+Added: The impacts of these factors were partially offset by $2.3 million and $1.2 million reductions in the reserve related to faster residential mortgage and consumer loan prepayment speeds and the associated reduced average lives of the portfolios and changes in baseline loss rates, respectively.
+Added: The provision expense recorded during the third quarter of 2024 mainly reflected an increase in environmental factor allocations and allocations necessitated by net loan growth, which were partially offset by reductions in the calculated allowance due primarily from the payoffs of two larger problem commercial lending relationships previously included in the collective evaluation.
+Added: The provision expense recorded during the first nine months of 2024 primarily reflected specific allocations for two different nonperforming nonreal-estate-related commercial loan relationships and allocations necessitated by net loan growth, which were partly offset by the previously mentioned decrease in the calculated allowance.
+Added: The recording of net loan recoveries and sustained strength in loan quality metrics during the 2025 and 2024 periods positively impacted necessary provision levels.
+Added: Noninterest income totaled $10.4 million during the third quarter of 2025, up $0.7 million, or 7.5%, from $9.7 million during the respective 2024 period.
+Added: The increase mainly stemmed from growth in treasury management fees, payroll services fees, and earnings on bank owned life insurance, which more than offset a reduction in mortgage banking income.
+Added: The increases in treasury management and payroll services fees primarily reflected clients’ expanded use of products and services and new customer acquisition, while the lower level of mortgage banking income mainly resulted from a change in the quarter-end fair value of commitments to originate salable residential mortgage loans.
+Added: Noninterest income during the third quarter of 2025 included bank owned life insurance death benefit claims totaling $0.3 million.
+Added: Noninterest income totaled $30.6 million during the first nine months of 2025, compared to $30.2 million during the first nine months of 2024.
+Added: Bank owned life insurance death benefit claims totaling $0.3 million and $0.7 million were recorded during the first nine months of 2025 and 2024, respectively.
+Added: Noninterest income during the first nine months of 2024 also included gains on the sales of other real estate owned totaling $0.4 million.
+Added: Excluding these transactions, noninterest income increased $1.2 million, or 4.0%, in the first nine months of 2025 compared to the respective 2024 period.
+Added: The growth primarily reflected higher levels of treasury management fees and payroll services fees, largely resulting from customers’ increased use of products and services and successful client acquisition efforts, and mortgage banking income, mainly reflecting increases in the percentage of loans originated with the intent to sell and total loan production, which more than offset decreases in revenue generated from investments in private equity funds and interest rate swap income.
+Added: The percentage of mortgage loans originated with the intent to sell increased from approximately 77% during the first nine months of 2024 to approximately 80% during the first nine months of 2025, and total mortgage loan originations were up approximately 4% during the respective periods.
Interest rate swap income can vary greatly from period to period due to the timing of closing transactions.
−Removed: The increases in treasury management and payroll service fees primarily reflected clients’ expanded use of products and services and successful marketing efforts.
−Removed: Noninterest income during the second quarter of 2024 included gains on the sales of other real estate owned totaling $0.3 million.
−Removed: Noninterest income totaled $20.2 million during the first six months of 2025, compared to $20.5 million during the first six months of 2024.
−Removed: Noninterest income during the first six months of 2024 included bank owned life insurance death benefit claims and gains on the sales of other real estate owned totaling $0.7 million and $0.4 million, respectively.
−Removed: Excluding these transactions, noninterest income increased $0.7 million, or 3.8%, in the first six months of 2025 compared to the respective 2024 period.
−Removed: The growth mainly reflected higher levels of mortgage banking income, mainly stemming from increases in the percentage of loans originated with the intent to sell and total loan production, and treasury management and payroll service fees, in large part reflecting customers’ increased use of products and services and new client acquisition, along with the recording of tax credit syndication fees, which more than offset declines in revenue generated from investments in private equity funds and interest rate swap income.
−Removed: The percentage of mortgage loans originated with the intent to sell increased from approximately 74% during the first six months of 2024 to approximately 80% during the first six months of 2025, and total mortgage loan originations were up nearly 20% during the respective periods.
−Removed: Noninterest expense totaled $33.4 million during the second quarter of 2025, up from $29.7 million during the prior-year second quarter.
−Removed: Noninterest expense totaled $64.5 million during the first six months of 2025, compared to $59.7 million during the first six months of 2024.
−Removed: The increases primarily resulted from higher salary and benefit costs, mainly reflecting annual merit pay increases, market adjustments, larger bonus accruals, lower residential mortgage loan deferred salary costs, higher health insurance claims, and increased payroll taxes.
−Removed: Higher allocations to the reserve for unfunded loan commitments, largely stemming from an increase in commercial loan commitments, and data processing costs, primarily reflecting increased software support costs, also contributed to the rises in noninterest expense.
+Added: Noninterest expense totaled $34.8 million during the third quarter of 2025, up from $32.3 million during the prior-year third quarter.
+Added: Noninterest expense totaled $99.2 million during the first nine months of 2025, compared to $92.0 million during the first nine months of 2024.
+Added: The increases primarily resulted from higher salary and benefit costs, mainly reflecting annual merit pay increases, market adjustments, and lower residential mortgage loan deferred salary costs;
+Added: a larger bonus accrual and higher levels of payroll taxes and retirement costs also contributed to the increase in salary and benefit expenses during the first nine months of 2025.
+Added: Increased data processing costs, primarily reflecting increased software support costs, and allocations to the reserve for unfunded loan commitments, largely stemming from an increase in commercial loan commitments, also contributed to the rises in noninterest expense during the 2025 periods.
Lower depreciation expense, mainly reflecting facility expansion and leasehold improvement projects becoming fully depreciated during 2024, positively impacted noninterest expense during both 2025 periods.
−Removed: Noninterest expense during the first six months of 2024 included contributions to The Mercantile Bank Foundation totaling $0.7 million.
−Removed: During the second quarter of 2025, we recorded income before federal income tax of $26.0 million and a federal income tax expense of $3.3 million.
−Removed: During the second quarter of 2024, we recorded income before federal income tax of $23.5 million and a federal income tax expense of $4.7 million.
−Removed: During the first six months of 2025, we recorded income before federal income tax of $50.0 million and a federal income tax expense of $7.8 million.
−Removed: During the first six months of 2024, we recorded income before federal income tax of $50.5 million and a federal income tax expense of $10.2 million.
−Removed: The decreases in federal income tax expense during the 2025 periods primarily reflected the acquisition of transferable energy tax credits during the second quarter, which provided for an aggregate $1.5 million tax benefit.
−Removed: The recording of the tax benefit positively impacted our effective tax rate, which equaled 12.9% and 15.7% in the second quarter and first six months of 2025, respectively, compared to 20.1% in the respective 2024 periods.
−Removed: The previously mentioned bank owned life insurance death benefit claims, substantially all of which were nontaxable, positively impacted the effective tax rate in the first six months of 2024.
+Added: Contributions to The Mercantile Bank Foundation totaled $0.3 million during the third quarter of 2025 and $0.3 million and $0.7 million during the first nine months of 2025 and 2024, respectively, while acquisition costs related to the planned partnership with Eastern Michigan Financial Corporation totaled $0.6 million during the third quarter and first nine months of 2025.
+Added: During the third quarter of 2025, we recorded income before federal income tax of $27.5 million and federal income tax expense of $3.7 million.
+Added: During the third quarter of 2024, we recorded income before federal income tax of $24.5 million and federal income tax expense of $4.9 million.
+Added: During the first nine months of 2025, we recorded income before federal income tax of $77.4 million and federal income tax expense of $11.5 million.
+Added: During the first nine months of 2024, we recorded income before federal income tax of $75.1 million and federal income tax expense of $15.1 million.
+Added: The decreases in federal income tax expense during the 2025 periods primarily reflected the acquisition of transferable energy tax credits during the second and third quarters of 2025, which provided for aggregate tax benefits of $1.0 million and $2.6 million during the current-year third quarter and first nine months of 2025, respectively.
+Added: Net benefits from investments in tax credit structures provided for aggregate tax benefits of $0.7 million and $1.2 million during the third quarter and first nine months of 2025, respectively.
+Added: The recording of tax benefits positively impacted our effective tax rate, which equaled 13.4% and 14.9% in the third quarter and first nine months of 2025, respectively, compared to 20.1% in the respective 2024 periods.
+Added: The previously mentioned bank owned life insurance death benefit claims, substantially all of which were nontaxable, positively impacted the effective tax rates in the third quarter and first nine months of 2025 and first nine months of 2024.
MERCANTILE BANK CORPORATION
Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.