Mercantile Bank (MBWM) investor relations material

Executive summary

• Net income for Q2 2026 was $25.9M ($1.50/diluted share), up from $22.6M ($1.39/diluted share) in Q2 2025; adjusted net income excluding non-recurring items was $26.4M ($1.53/share).

• Achieved strong financial performance in Q2 2026, driven by commercial expertise, strategic acquisition of Eastern Michigan, and robust asset quality.

• Tangible book value per share rose to $38.42, up over 7% year-over-year.

• Integration of Eastern Michigan is progressing well, supporting deposit and loan growth, and margin stability.

• Maintained top-quartile ROA and strong returns on equity, with continued focus on commercial loan and deposit growth.

Financial highlights

• Net interest income increased by $7.8M (15.7%) in Q2 2026 compared to Q2 2025, driven by asset growth and higher margin.

• Net interest margin increased to 3.59% in Q2 2026 from 3.48% in Q2 2025.

• Return on average assets was 1.5%, and return on average equity was 14.0%.

• Noninterest income was $11.5M in Q2 2026, with treasury management and payroll services fees up significantly year-over-year.

• Noninterest expense was $39.4M in Q2 2026, up from $33.4M, mainly due to higher salaries, benefits, and expansion costs.

Outlook and guidance

• Projecting loan growth of 5%-7% annualized per quarter for the remainder of 2026, with a strong commercial pipeline.

• Net interest margin projected at 3.60–3.70% for the remainder of 2026.

• Management expects continued opportunities for commercial loan origination and local deposit growth, supported by a robust loan pipeline.

• Federal tax rate forecasted at 17%, with continued benefits from tax credit activities.

• Non-interest expense projections reflect ongoing personnel investments and operational expansion.