Mercantile Bank (MBWM) Investor Presentation summary

Strategic rationale and fit

• Eastern Michigan Financial offers a top-ranked deposit franchise in Michigan, directly supporting strategic priorities and liquidity needs.

• The transaction enables market expansion into Eastern Michigan, leveraging an established franchise and public funds expertise.

• Cultural alignment, manageable asset size, and clean asset quality minimize integration risk.

• Eastern's Jack Henry expertise supports Mercantile's planned core conversion in 2027.

• Double-digit earnings accretion and strong pro forma capital ratios are expected.

Financial highlights and deposit franchise

• Eastern Michigan Financial has $505M in assets, $449M in deposits, and a 0.42% cost of deposits.

• 99% of deposits are core, with a 46% loans-to-deposits ratio and 28% noninterest-bearing deposits.

• The deposit base is highly stable, with 20+ year average relationships among top depositors.

• Asset quality is strong, with 0.20% NPAs/assets and negative net charge-offs.

• The franchise offers reliable, low-cost liquidity, including $100M in long-tenured public fund accounts.

Transaction structure and financial impact

• Aggregate transaction value is approximately $95.8M, with a 52% stock/48% cash mix.

• Purchase price equals 1.65x tangible book value and 12.9x LTM GAAP earnings.

• Fully phased-in GAAP EPS accretion is ~11%, with tangible book value dilution of ~6% at close.

• Cost savings of $5.4M pre-tax are expected, with most realized by 2027.

• Pro forma TCE and TRBC ratios are projected at ~9% and ~14%, respectively.