MBWM

This article first appeared on GuruFocus. Release Date: October 20, 2026 For the complete transcript of the earnings call, please refer to the full earnings call transcript. - Net interest margin improved to 3.73% in Q3 2026 from 3.49% in Q3 2025, driven by lower cost of funds and asset repricing. - Commercial loans increased 9% year-over-year, and total deposits grew 17%, with non-interest-bearing deposits up 22%. - Asset quality remains strong with non-performing assets at only 14 basis points of total assets and past due loans at 3 basis points of total loans. - Non-interest income rose 16% year-to-date, with service charges up 34% and card income up 22%. - Lending commitments reached a five-quarter high of $589 million, indicating a strong pipeline for future loan growth. - Adjusted diluted earnings per share decreased 5% in Q3 2026 compared to Q3 2025. - Non-interest expenses increased $8.8 million in Q3 2026, largely due to personnel investments and system conversion costs. - Loan yield declined 23 basis points year-over-year, reflecting the impact of lower fed funds rates. - Provision for credit losses was $0.7 million in Q3 2026, driven by specific allocations and loan growth. - Non-interest income is expected to decline in Q4 2026 due to seasonality in mortgage banking and lower swap income. - Warning! GuruFocus has detected 8 Warning Signs with MBWM. - Is MBWM fairly valued? Test your thesis with our free DCF calculator. Q: Nathan Race (Piper Sandler) asked about the margin outlook for next year, specifically whether 25 basis points of rate cuts would be margin neutral and what deposit and loan betas are expected.A: CFO Chuck Christmas explained that asset-side repricing is easy to model, but non-maturing deposit betas are difficult to predict and change over time. He noted deposit growth is concentrated in non-interest-bearing checking (tied to commercial loan expansion) and money market accounts, with some larger customers' money market rates directly tied to fed funds and repricing immediately. He said the September rate increase saw actual changes come in below modeled betas, a modest margin benefit. Overall, management aims to be rate-agnostic and expects the margin to remain relatively stable, possibly rising slightly over several quarters. Q: Nathan Race (Piper Sandler) asked about operating leverage for 2027whether the company will continue investing in personnel or shift to realizing returns on prior investments.A: President and CEO Ray Reitsma said the bank is always balancing investment against anticipated return. Given market disruption, it has added experienced commercial bankers from super-regional and national competitors, a treasury management succession hire (with a one-year overlap), and support staff in credit and risk. He acknowledged the bank could slow down and reap more near-term benefit, but said it will continue investing where long-term opportunities are convincing. Q: Nathan Race (Piper Sandler) asked for a finer point on 2027 expense growth, given the $600,000 cost reduction expected in Q2 2027 and possible opportunistic hires.A: CFO Chuck Christmas said overhead budgeting for next year is difficult and still in early stages, with formal 2027 guidance to come in January. He cited merit increases and promotions, continued opportunistic hiring, and real estate investments in Southeast Michiganthough expense impact from real estate likely won't appear until late 2027. He declined to give a specific range, calling salary and benefits the biggest unknown. Q: Brendan Nosal (Hovde Group) asked where average cash balances at the Fed will land in Q4 versus this quarter's roughly $425 million, since lower cash supports margin expansion.A: CFO Chuck Christmas said he expects the average to decline to the upper $300 million range in Q4, trending down through the quarter from a high starting point, which should help the margin. Q: Brendan Nosal (Hovde Group) asked for a play-by-play on the Southeast Michigan expansionwhere the bank started, where it stands, and the timeline for the group to become additive to earnings.A: CEO Ray Reitsma said the bank had a small number of commercial bankers in Southeast Michigan about two years ago and has ramped up to roughly half a dozen commercial callers, expecting further increases over the next year. He said the pace is nearly impossible to predict but expressed confidence in the quality and volume of ongoing talent discussions. Q: Damon DelMonte (KBW) asked about the expected step-down in non-interest income in Q4whether it reflects a weaker mortgage banking backdrop or lower swap fee income.A: CFO Chuck Christmas said both factors are at play. The mortgage decline is mostly seasonal, though production has been rising in a tough environment, which he views as market share gains. Swap income had a solid Q3 but may be hard to duplicate, as rising rates and priced-in rate cuts have made customers more hesitant to enter swaps. He also noted quarter-to-quarter lumpiness in swap timing. Q: Damon DelMonte (KBW) asked whether the bulk of payoff activity has peaked, given the 5%7% annualized Q4 loan growth guidance.A: CEO Ray Reitsma said visibility depends on the payoff type: company or asset sales are fairly predictable, but paydowns from excess cash flowwhich ramped up significantly this quarterare the hardest to forecast. He said the backlog is at a five-quarter high and origination levels are comfortable, with asset sales moderate versus recent experience. Excess cash flow generation is the biggest swing factor through year-end. Q: Damon DelMonte (KBW) asked for the spot margin as of September 30.A: CFO Chuck Christmas said the September margin was 3.74%, adding that it would have been higher as of September 30. Q: Matthew Breese (Stephens) asked whether the projected Q4 loan growth spills into 2027 and whether deposit growth will continue to outpace loan growth near term.A: CEO Ray Reitsma said he anticipates the originations will carry into 2027 and expects deposit growth to roughly parallel loan growth, which is the desired outcome. CFO Chuck Christmas added a caveat on seasonal public unit depositsstrong Michigan tax-collection inflows in Q3 with outflows continuing in October and Novemberbut said business deposit growth in 2026 has been very strong, with the business deposit pipeline roughly as strong as the loan pipeline. Q: Matthew Breese (Stephens) asked about near-term cash flows in the securities portfolio and when the gap between book yields and market rates will narrow meaningfully.A: CFO Chuck Christmas said the portfolio has about a four-year duration and follows a laddered maturity approach, with discounted agency bonds (bought at $0.85$0.95) providing protection in a sharp down-rate scenario. He cited repricing opportunities: $16 million at a 1.5% average rate in Q4 and another $100 million at 2.5% next year, plus nearly $60 million of fixed-rate CRE loans repricing this quarter and almost $200 million next year at just under 5%. He expects the ladder to continue improving yields as long as rates hold near current levels. Q: Matthew Breese (Stephens) asked whether the recurring Q4 pickup in charge-offs reflects a deliberate cleanup strategy or is coincidental.A: CFO Chuck Christmas said it is total coincidence. The bank works each credit individually and, like all banks, occasionally manages one or two larger commercial credits; specific reserves are established quarters earlier, with charge-offs taken as collection efforts conclude. He attributed the Q4 timing pattern to coincidence rather than strategy. Q: Nicholas Holowko (Raymond James) asked about business confidence among borrowers and their willingness to invest and expand, especially given the recent rise in interest rates.A: CEO Ray Reitsma said confidence has For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Mercantile Bank shares were up about 3% in Thursday trading, a confident move for a lender that just posted Q3 2026 earnings slightly below last quarter's per share profit but ahead on the metric that matters most for banks right now. Net interest margin, the spread Mercantile earns on loans and securities after funding costs, came in at 3.73%. That is where the real story sits. Short term traders are reacting to the headline beat on interest income. Long term investors are weighing whether a fatter margin can offset rising expenses and a busier balance sheet. Like the margin story at Mercantile Bank but uneasy about the cost creep that comes with a busier balance sheet? Check out the list of solid balance sheet and fundamentals stocks (25 results). - Total Revenue (Q3 2026 vs Q3 2025): US$72.503m vs. US$61.89m (up about 17.2%) - Net Income (Excl. Extra Items, Q3 2026 vs Q3 2025): US$24.072m vs. US$23.758m (up about 1.3%) - Basic EPS (Q3 2026 vs Q3 2025): US$1.39 vs. US$1.46 (down about 4.8%) - Net Interest Margin (Q3 2026 vs Q3 2025): 3.73% vs. 3.50% (up 0.23 percentage points) Tired of scrolling through walls of earnings tables and raw figures to understand Mercantile Bank? Get the full picture of its recent profitability and trends in one clean visual view with the company report for Mercantile Bank. Optimists see Mercantile Bank as a funding-stable lender that can use loan growth and tax credits to keep earnings resilient even as rates move around. "Analysts expect Mercantile Bank to continue using its match funded balance sheet, stable net interest margin range, and commercial loan growth to support a durable earnings profile that is less sensitive to rate moves." Q3 backs up parts of that script. Net interest margin at 3.73% is higher than a year ago and management expects it to remain relatively steady into 4Q, even with possible Fed cuts modelled. Commercial balances fed a 17% lift in revenue, while a roughly 17% tax rate from Low Income Housing Tax Credit activity supports after-tax profit resilience. The worry is that spending and expansion dilute those same advantages before the efficiency plan pays off. "Mercantile Bank is carrying higher noninterest expenses from expansion in Southeast Michigan and larger scale, and if these added salaries and related costs are not offset by stronger revenue or the planned efficiency gains, the cost base could stay elevated and compress net margins and earnings." Q3 shows this risk in motion. Noninterest expense moved higher with Southeast Michigan hiring, technology upgrades and Eastern Michigan Bank integration, while basic EPS fell to US$1.39 despite stronger revenue. Management now flags another US$1.9m of one-time conversion and integration costs through 1Q27, with only a projected US$0.6m quarterly processing reduction starting 2Q27, so the cost story is not yet through its peak. Not everyone reads the same price the same way. → See the higher figure this Narrative lands on, and how it gets there. Mercantile Bank just reminded you how much one quarter can move a story without fully resolving it. The real opportunity sits in finding stocks that could be undervalued before their fundamentals are fully priced in. - Company 1 - 34% below our estimate - taps constrained offshore vessel supply and consolidates acquired fleets to support higher day rates. - Company 2 - 26% below our estimate - sells injectable obesity and diabetes treatments that payers and patients are already adopting at scale. - Company 3 - 29% below our estimate - wins complex manufacturing programs as clients shift electronics production from internal operations to outsourced partners. That is three of the list. See the full list of 33 companies trading below our fair value estimates → This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned. Companies discussed in this article include MBWM. Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email [email protected]

Mercantile Bank (MBWM) came out with quarterly earnings of $1.42 per share, beating the Zacks Consensus Estimate of $1.35 per share. This compares to earnings of $1.46 per share a year ago. These figures are adjusted for non-recurring items. This quarterly report represents an earnings surprise of +5.19%. A quarter ago, it was expected that this holding company for Mercantile Bank of Michigan would post earnings of $1.34 per share when it actually produced earnings of $1.53, delivering a surprise of +14.18%. Over the last four quarters, the company has surpassed consensus EPS estimates four times. Mercantile Bank, which belongs to the Zacks Banks - Midwest industry, posted revenues of $73.2 million for the quarter ended September 2026, surpassing the Zacks Consensus Estimate by 3.72%. This compares to year-ago revenues of $62.39 million. The company has topped consensus revenue estimates three times over the last four quarters. The sustainability of the stock's immediate price movement based on the recently-released numbers and future earnings expectations will mostly depend on management's commentary on the earnings call. Mercantile Bank shares have added about 21.5% since the beginning of the year versus the S&P 500's gain of 12.4%. While Mercantile Bank has outperformed the market so far this year, the question that comes to investors' minds is: what's next for the stock? There are no easy answers to this key question, but one reliable measure that can help investors address this is the company's earnings outlook. Not only does this include current consensus earnings expectations for the coming quarter(s), but also how these expectations have changed lately. Empirical research shows a strong correlation between near-term stock movements and trends in earnings estimate revisions. Investors can track such revisions by themselves or rely on a tried-and-tested rating tool like the Zacks Rank, which has an impressive track record of harnessing the power of earnings estimate revisions. Ahead of this earnings release, the estimate revisions trend for Mercantile Bank was mixed. While the magnitude and direction of estimate revisions could change following the company's just-released earnings report, the current status translates into a Zacks Rank #3 (Hold) for the stock. So, the shares are expected to perform in line with the market in the near future. You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here. It will be interesting to see how estimates for the coming quarters and the current fiscal year change in the days ahead. The current consensus EPS estimate is $1.38 on $71.75 million in revenues for the coming quarter and $5.71 on $278.58 million in revenues for the current fiscal year. Investors should be mindful of the fact that the outlook for the industry can have a material impact on the performance of the stock as well. In terms of the Zacks Industry Rank, Banks - Midwest is currently in the top 23% of the 250 plus Zacks industries. Our research shows that the top 50% of the Zacks-ranked industries outperform the bottom 50% by a factor of more than 2 to 1. First Financial Corp. (THFF), another stock in the same industry, has yet to report results for the quarter ended September 2026. This holding company for First Financial Bank is expected to post quarterly earnings of $2.00 per share in its upcoming report, which represents a year-over-year change of +14.3%. The consensus EPS estimate for the quarter has remained unchanged over the last 30 days. First Financial Corp.'s revenues are expected to be $73 million, up 11% from the year-ago quarter. Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Mercantile Bank Corporation (MBWM) : Free Stock Analysis Report First Financial Corporation Indiana (THFF) : Free Stock Analysis Report This article originally published on Zacks Investment Research (zacks.com). Zacks Investment Research

Our analysts just identified a stock with the potential to be the next Nvidia. Tell us how you invest and we'll show you why it's our #1 pick. Tap here. - Net interest margin expansion to 3.73% was primarily driven by the Eastern Michigan acquisition and a strategic reduction in high-cost brokered deposits. - Commercial loans increased 9% from the prior year-end and quarter-end. was achieved despite elevated paydowns totaling $448 million, which management attributes to clients utilizing excess cash flow and asset sales. - Management is aggressively capitalizing on market disruption in Southeast Michigan by hiring experienced commercial bankers from super-regional and national competitors. - The bank is undergoing a significant multi-year investment phase in people and technology, specifically transitioning to a new core systems provider to enhance operational durability. - Asset quality remains a core strength, with nonperforming assets at just 14 basis points, reflecting a disciplined credit culture and a high-quality client base. - Deposit growth of 17% over the last 12 months was fueled by new commercial relationships and public fund development, successfully offsetting a $180 million decline in certificates of deposit. - Fourth quarter guidance assumes a stable federal funds rate, with net loan growth projected in the 5% to 7% annualized range supported by a 5-quarter high in lending commitments. - Management expects continued margin tailwinds from the repricing of approximately $200 million in fixed-rate commercial real estate loans and $100 million in securities maturing in 2027. - The bank aims to be interest rate agnostic, modeling a relatively stable margin even if the Federal Reserve implements incremental 25-basis point rate changes. - A projected $600,000 quarterly reduction in data and statement processing costs is expected to begin on April 1, 2027, following the completion of the core system conversion. - Strategic investments in Southeast Michigan personnel and real estate are expected to continue, though management noted that the exact timing of talent acquisition is difficult to predict. - Noninterest expenses were impacted by $2.4 million in one-time costs during Q3 related to personnel investments and system integration, with $1.2 million expected in Q4. - The effective tax rate increased to 16.8% due to a higher level of pretax income and lower net benefits from transferable energy tax credits compared to the prior year. - Loan loss reserves remain robust at 1.14% of total loans, with historical charge-off activity representing only one-third of the current reserve balance. - Management flagged 'excess cash flow' paydowns as the most volatile variable for loan growth forecasting, as it is less predictable than scheduled asset sales. One stock. Nvidia-level potential. 30M+ investors trust Moby to find it first. Get the pick. Tap here. - Management noted that while the asset side is easy to model, deposit betas are highly dependent on the aggressiveness of Fed rate changes. - The bank aims to remain 'durable' and agnostic to rate changes rather than relying on a specific rate direction to support the margin. - Management confirmed they will continue to prioritize long-term talent acquisition over short-term expense reduction if high-quality bankers become available due to market disruption. - Budgeting for 2027 overhead remains in the early stages, with a focus on balancing merit increases against opportunistic hiring. - The anticipated step-down is attributed to seasonal declines in mortgage banking and customer hesitancy in the swap market due to recent rate volatility. - Management emphasized that mortgage production has actually increased market share despite the tough environment. - Management expects to reduce cash held at the Fed from $425 million to the upper $300 million range in Q4 to help support margin expansion. - Deposit growth is expected to roughly parallel loan growth, excluding seasonal fluctuations in public unit tax collections.

- Interested in Mercantile Bank Corporation? Here are five stocks we like better. - Third-quarter net income rose slightly to $24.1 million, or $1.39 per diluted share, while first-nine-month net income increased to $72.7 million. Higher net interest and non-interest income offset increased operating and tax expenses, though adjusted quarterly EPS declined year over year. - Net interest margin expanded to 3.73% from 3.49% a year earlier, helped by lower funding costs, fewer brokered deposits and repricing of loans and securities. Commercial loans grew 9% from the prior year-end, deposits rose 17% year over year, and management expects fourth-quarter annualized loan growth of 5% to 7%. - Asset quality remained strong, with nonperforming assets declining to 14 basis points of total assets and past-due loans at 3 basis points. Expenses increased due to the Eastern Michigan Bank acquisition, Southeast Michigan hiring and banking-system conversion, but management expects related one-time costs to moderate through early 2027. Mercantile Bank (NASDAQ:MBWM) reported third-quarter 2026 net income of $24.1 million, or $1.39 per diluted share, compared with $23.8 million, or $1.46 per diluted share, in the third quarter of 2025. For the first nine months of 2026, net income rose to $72.7 million, or $4.21 per diluted share, from $65.9 million, or $4.06 per diluted share, a year earlier. Chief Financial Officer Chuck Christmas said the year-over-year growth in net income primarily reflected higher net interest income and non-interest income, which more than offset higher operating expenses and federal income tax expense. → Berkshire Just Backed This Little-Known Stock—Should You Chase It? Excluding costs tied to Mercantile's acquisition of Eastern Michigan Bank, its core and digital banking conversion, and other smaller one-time items, adjusted third-quarter net income was $24.5 million, or $1.42 per diluted share. That compared with adjusted net income of $24.3 million, or $1.50 per diluted share, a year earlier. Adjusted earnings per share declined about 5% year over year for the quarter but increased about 8% for the first nine months of 2026. President and CEO Ray Reitsma said the company's third-quarter results continued to reflect its commercial banking focus and a stronger return profile. Net interest margin increased to 3.73% in the third quarter from 3.49% in the prior-year period and was 3.62% for the first nine months of 2026, compared with 3.48% a year earlier. → These 3 Green Stocks Have a Growth Story That Goes Far Beyond Washington Reitsma attributed the margin improvement largely to lower funding costs following the Eastern Michigan Bank acquisition, a refinement of the deposit base, lower brokered deposits, and the repricing of fixed-rate loans and securities. He said Mercantile continues to see opportunities for asset repricing in 2026 and 2027. Net interest income increased $8.9 million year over year in the third quarter and rose $24 million over the first nine months. Average earning assets increased by $575 million to $6.52 billion in the quarter, driven primarily by the Eastern Michigan acquisition, loan growth and investment growth. → Broadcom's CEO Sees Years of AI Demand But Warns of a Bigger Threat to the Boom Interest expense declined $4.3 million from the prior-year quarter. The cost of all deposits was down 51 basis points year over year, while average interest-bearing deposits increased $389 million to $4 billion. During the question-and-answer session, Christmas said the bank expects its margin to remain relatively stable over several quarters in a changing-rate environment, with the potential for a modest increase. He noted that deposit pricing, particularly on money market accounts, remains the more difficult factor to model. Commercial loans, Mercantile's largest asset category, increased 9% from the prior year-end quarter. The growth contributed to a 17% increase in revenue from the third quarter of 2025, Reitsma said. The bank experienced elevated paydowns, however, totaling $448 million for the first nine months of 2026 from asset and business sales, excess cash flow and refinancings into secondary markets. That compared with $306 million in paydowns during the same 2025 period. Lending commitments, including unfunded construction loan commitments, reached a five-quarter high of $589 million at Sept. 30, up from $386 million a year earlier. For the fourth quarter, Mercantile projected net loan growth of 5% to 7% on an annualized basis, supported by a strong commercial pipeline but tempered by expected commercial loan payoffs. Reitsma said paydowns tied to asset sales are relatively visible, while repayment from borrowers' excess cash flow is harder to forecast. Total deposits increased 17% over the 12 months ended Sept. 30, including 22% growth in non-interest-bearing deposits and 15% growth in interest-bearing deposits. Management cited commercial relationship growth, public-funds relationships and the Eastern Michigan acquisition. Certificates of deposit declined by about $180 million over the period, primarily because of lower brokered CDs. Christmas said public-unit deposits are seasonal and expected to experience outflows during October and November, but added that the bank's business deposit pipeline remained strong. Mercantile reported nonperforming assets equal to 14 basis points of total assets at Sept. 30, compared with 16 basis points a year earlier. Past-due loans were 3 basis points of total loans. The company recorded a $700,000 provision for credit losses in the third quarter, after recording a negative $2.9 million provision for the first nine months. The quarterly provision included a $1.7 million increase in specific allocations and a $600,000 increase related to net loan growth, partially offset by a $1.5 million reduction linked to faster prepayments in the residential mortgage portfolio. The allowance for credit losses equaled 1.14% of total loans at Sept. 30. Christmas said specific reserve allocations totaled $2.6 million, or about 5% of the reserve balance. Reitsma characterized the modest change in nonperforming loans as isolated borrower-specific situations rather than evidence of systemic portfolio or economic issues. Non-interest income increased 16% for the first nine months of 2026. Service charges on accounts rose 34%, credit and debit card income increased 22%, and swap income grew 11%, with management citing growth in commercial relationships. Non-interest expenses increased $8.8 million in the third quarter and $25.8 million in the first nine months from a year earlier. Eastern Michigan Bank accounted for $4.1 million of third-quarter expenses and $12.1 million through nine months. The company also cited salary and benefit costs, personnel investments in Southeast Michigan, inflation, integration work and its core and digital banking conversion. Management said one-time expenses related to Southeast Michigan personnel investments, conversion incentives and Eastern Michigan integration totaled $2.4 million in the third quarter. It expects those costs to be $1.2 million in the fourth quarter and $700,000 in the first quarter of 2027. Beginning April 1, 2027, Mercantile projects a quarterly $600,000 reduction in data-processing and statement-processing costs. Reitsma said the bank had expanded its Southeast Michigan commercial banking staff to about a half dozen commercial callers, up from a relatively small team two years earlier. He said Mercantile would continue to evaluate hiring opportunities created by market disruption, particularly when it identifies talent that could provide a long-term benefit. Mercantile did not repurchase shares during the third quarter and had $6.8 million remaining under its current repurchase authorization. The company said both Mercantile and Eastern Michigan Bank remained well capitalized, reporting total risk-based capital ratios of 13.4% and 23.9%, respectively, at Sept. 30. Mercantile Bank Corporation is a bank holding company headquartered in Grand Rapids, Michigan. Through its subsidiary, Mercantile Bank, the company provides commercial and retail banking services to businesses, professionals and individuals. The bank primarily serves communities across Michigan, with a focus on relationship-based banking and locally oriented financial services. Mercantile Bank offers a range of deposit products, including checking, savings, money market and certificate of deposit accounts. This instant news alert was generated by narrative science technology and financial data from MarketBeat in order to provide readers with the fastest reporting and unbiased coverage. Please send any questions or comments about this story to [email protected]. The article "Mercantile Bank Q3 Earnings Call Highlights" was originally published by MarketBeat. View MarketBeat's top stocks for October 2026.

Net interest income growth, loan portfolio expansion, strong local deposit generation, and continued strength in asset quality metrics and capital levels highlight the quarter GRAND RAPIDS, Mich., Oct. 20, 2026 /PRNewswire/ -- Mercantile Bank Corporation (NASDAQ: MBWM) ("Mercantile") reported net income of $24.1 million, or $1.39 per diluted share, for the third quarter of 2026, compared with net income of $23.8 million, or $1.46 per diluted share, for the third quarter of 2025. Net income during the first nine months of 2026 totaled $72.7 million, or $4.21 per diluted share, compared with net income of $65.9 million, or $4.06 per diluted share, during the first nine months of 2025. Excluding non-recurring costs associated with the acquisition of Eastern Michigan Financial Corporation and core and digital banking system conversion and the impacts of other one-time items (non-GAAP measurements), adjusted net income was $24.5 million, or $1.42 per diluted share, for the third quarter of 2026, $24.3 million, or $1.50 per diluted share, for the third quarter of 2025, $76.1 million, or $4.41 per diluted share, for the first nine months of 2026, and $66.4 million, or $4.09 per diluted share, for the first nine months of 2025. Using these non-GAAP measures, adjusted earnings per diluted share increased $0.32, or 7.8 percent, in the first nine months of 2026 compared to the respective 2025 period. "Our financial performance metrics remained strong during the third quarter of 2026," said Ray Reitsma, President and Chief Executive Officer of Mercantile. "The robust operating results were fueled by net interest income expansion, reflecting solid earning asset growth and a higher net interest margin, a significant increase in treasury management fees, strong local deposit growth, a relatively low level of provision expense stemming from ongoing strength in asset quality measures, and the maintenance of a sound regulatory capital profile. As evidenced by the growth in the loan and local deposit portfolios, our team members have continued to meet the needs of existing customers and secure new client relationships. At the same time, we have devoted significant efforts and resources on core and digital banking system conversion-related activities to ensure a smooth transition that is expected to occur in the first quarter of 2027, which we believe will provide for a superior experience and a more durable platform for us and our customers. The notable net growth in local deposits provided for a further reduction in our loan-to-deposit ratio. We believe ample opportunities are available to us to expand our presence in Southeast Michigan, and as such, we have made meaningful investments in talented individuals to serve that area and gain market share." Third quarter highlights include: - Return on average assets of 1.4 percent and return on average equity of 12.6 percent - Tangible book value per common share of $37.81 as of September 30, 2026, up nearly 4 percent on an annualized basis since December 31, 2025 - Net revenue expansion of over 17 percent compared to the prior-year third quarter, including net interest income and noninterest income growth of approximately 17 percent and 18 percent, respectively - Improved net interest margin, primarily reflecting lower cost of funds, commercial loan growth, and ongoing upward repricing of matured fixed-rate loans and securities - Notable increase in treasury management fees of approximately 28 percent - Sustained strength in commercial loan pipeline - Continued low level of nonperforming assets and nominal past due loans and loan charge-offs - Substantial reduction in loan-to-deposit ratio from approximately 96 percent as of September 30, 2025, to approximately 88 percent as of September 30, 2026, primarily reflecting solid local deposit generation and the onboarding of Eastern Michigan Bank's deposit portfolio - Noteworthy decreases in brokered deposits of $110 million during the first nine months of 2026, and $159 million during the twelve months ended September 30, 2026, leaving a balance of only $20.1 million that is scheduled to mature in late 2026 - Strong tangible and regulatory capital positions Operating Results Net revenue, consisting of net interest income and noninterest income, was $73.2 million during the third quarter of 2026, an increase of $10.8 million, or 17.3 percent, from $62.4 million during the prior-year third quarter. Net interest income during the third quarter of 2026 was $60.9 million, up $8.9 million, or 17.1 percent, from $52.0 million during the respective 2025 period mainly due to growth in earning assets and a higher net interest margin. Eastern Michigan Bank's net interest income totaled $5.8 million during the third quarter of 2026. Noninterest income totaled $12.3 million during the current-year third quarter, up $1.9 million, or 18.4 percent, from $10.4 million during the third quarter of 2025 primarily due to increases in treasury management fees, interest rate swap income, and mortgage banking income. Eastern Michigan Bank generated $0.5 million in noninterest income during the third quarter of 2026, mainly consisting of deposit service charges. The net interest margin was 3.73 percent in the third quarter of 2026, up from 3.49 percent in the prior-year third quarter. The yield on average earning assets was 5.52 percent during the third quarter of 2026, a decrease from 5.74 percent during the respective 2025 period. The lower yield largely resulted from a reduced yield on loans, which more than offset an improved yield on securities resulting from the reinvestment of relatively low-yielding bonds and investment portfolio expansion activities, along with the positive impact stemming from the addition of Eastern Michigan Bank's securities portfolio. The yield on loans was 6.12 percent during the third quarter of 2026, down from 6.35 percent during the third quarter of 2025, mainly due to lower interest rates on variable-rate commercial loans resulting from the Federal Open Market Committee ("FOMC") reducing the targeted federal funds rate. The FOMC decreased the targeted federal funds rate by 25 basis points in each of September, October, and December of 2025, during which time average variable-rate commercial loans represented approximately 77 percent of average total commercial loans. The yield on securities equaled 3.43 percent during the third quarter of 2026, up from 2.90 percent during the prior-year third quarter. A change in earning asset mix, consisting of a decrease in higher-yielding loans as a percentage of earning assets and an increase in relatively lower-yielding securities as a percentage of earning assets and reflecting a strategic initiative to reduce the loan-to-deposit ratio and the onboarding of Eastern Michigan Bank's liquid balance sheet, and a lower yield on other interest-earning assets, reflecting the aforementioned decreased interest rate environment, negatively impacted the yield on average earning assets during the third quarter of 2026. During the third quarter of 2026, the cost of funds was 1.79 percent, down from 2.25 percent during the third quarter of 2025, primarily due to lower rates paid on money market accounts and time deposits, reflecting the decreased interest rate environment. An increase in low-cost deposit products as a percentage of total funding sources, mainly resulting from the addition of Eastern Michigan Bank's deposit base and successful client acquisition efforts, also contributed to the reduced cost of funds. Furthermore, the expansion of existing deposit relationships and a reduction in brokered deposits positively impacted the cost of funds during the third quarter of 2026. The latter reflects a strategy to refine the deposit base whereby the brokered deposit market will be accessed on a limited basis and reliance on other higher-priced deposit relationships will be lessened. Mercantile recorded provisions for credit losses of $0.7 million and $0.2 million during the third quarters of 2026 and 2025, respectively. The provision expense recorded during the current-year third quarter primarily reflected increases in specific and qualitative factor allocations of $1.7 million and $0.7 million, respectively, along with allocations of $0.6 million necessitated by net loan growth. These factors were partially offset by decreases in the required reserve of $1.5 million and $0.7 million stemming from an increase in residential mortgage and consumer loan prepayment speeds and a decline in baseline loss allocations, respectively. The recording of net loan recoveries and ongoing strength in loan quality metrics during both periods positively impacted necessary provision levels. Noninterest income totaled $12.3 million during the third quarter of 2026, up $1.9 million, or 18.4 percent, from $10.4 million during the prior-year third quarter. The increase primarily stemmed from growth in treasury management fees, interest rate swap income, and mortgage banking income. The rise in treasury management fees largely resulted from new commercial customer acquisitions and clients' expanded use of products and services. The growth in interest rate swap income, which can vary from period to period due to the timing of closing transactions, mainly reflected a higher volume of new swap transactions. Noninterest expense totaled $43.6 million during the third quarter of 2026, compared to $34.8 million during the third quarter of 2025. Costs related to the core and digital banking system conversion aggregated $0.4 million during the third quarter of 2026, while costs associated with the acquisition of Eastern Michigan Financial Corporation totaled $0.2 million and $0.6 million during the current-year third quarter and third quarter of 2025, respectively. Excluding these non-recurring costs, noninterest expense increased $8.8 million during the third quarter of 2026 compared to the prior-year third quarter. Eastern Michigan Bank's noninterest expense totaled $4.1 million during the third quarter of 2026, including salary and benefit costs of $1.7 million and core deposit intangible asset amortization of $0.9 million. The remaining increase in noninterest expense largely stemmed from higher salary and benefit costs, mainly reflecting increased bonus accruals, annual merit pay increases, market adjustments, and talent acquisitions to assist with the core and digital banking system conversion and expand deposit and loan market share in Southeast Michigan, along with cost inflation and a larger balance sheet. Federal income tax expense was $4.9 million during the third quarter of 2026, compared to $3.7 million during the prior-year third quarter. The increase in federal income tax expense mainly resulted from a higher level of income before federal income tax and a lower level of net benefits from transferable energy tax credits. Mercantile's effective tax rate, which equaled 16.8 percent and 13.4 percent during the third quarters of 2026 and 2025, respectively, has been positively impacted by tax benefits derived from the acquisition of transferable energy tax credits and low-income housing and historic tax credit investments. Mr. Reitsma commented, "The notable increase in net interest income during the third quarter of 2026 resulted from robust earning asset growth and a higher net interest margin, primarily reflecting a lower cost of funds and the upward repricing of matured fixed-rate loans and securities. We are pleased with the significant increase in treasury management fees, reflecting customers' expanded use of products and services and our ongoing success in cultivating new client relationships. Meeting asset growth objectives in a cost-effective manner while remaining focused on providing customers with excellent service and market-leading products and services remain important strategic objectives. Excluding costs related to the core and digital banking system conversion and acquisition of Eastern Michigan Financial Corporation, overhead costs as a percentage of net revenue during the third quarter of 2026 increased slightly compared to the third quarter of 2025, in part reflecting investments in personnel to assist with the core and digital banking system conversion and expansion activities in Southeast Michigan." Balance Sheet Total assets were $7.16 billion as of September 30, 2026, up $328 million from December 31, 2025. Total loans increased $37.4 million, or an annualized 3.0 percent, during the third quarter of 2026, and $131 million, or an annualized 3.6 percent, during the first nine months of 2026, primarily reflecting commercial loan portfolio expansion of $20.4 million, or an annualized 2.0 percent, and $152 million, or an annualized 5.2 percent, during the respective periods. Commercial loans grew in both 2026 periods notwithstanding the full payoffs and partial paydowns of certain larger relationships, which aggregated $147 million during the third quarter of 2026, and $448 million during the first nine months of 2026. The payoffs and paydowns, reflecting sales of assets, secondary market refinancings, and customers using excess cash flows generated within their operations to make line of credit reductions, remained above the historical average of approximately $50 million per quarter during the third quarter of 2026. Payoffs and paydowns during 2025 were also well above historical levels, totaling approximately $363 million and averaging about $91 million per quarter. Commercial loan originations, consisting of loans to new customers and growth in existing credit relationships, stayed strong across all segments during the first nine months of 2026. Residential mortgage loans increased $13.2 million during the third quarter of 2026 and declined $27.1 million during the first nine months of 2026, while other consumer loans were up $3.8 million and $6.1 million during the respective periods. During the first nine months of 2026, interest-earning deposits grew $151 million, and securities available for sale were down $4.2 million. The increase in interest-earning deposits primarily resulted from strong local deposit growth during the third quarter of 2026, while the reduction in securities available for sale mainly reflected an increase in the net unrealized loss on these securities stemming from the recent higher interest rate environment. As of September 30, 2026, unfunded commitments on commercial construction and development loans, which are expected to be funded over the next 12 to 18 months, and residential construction loans, which are expected to be largely funded over the next 12 months, totaled $266 million and $43.9 million, respectively. The unused balance on construction loans remains relatively stable as new construction loan opportunities are identified and as construction loans shift to term real estate loans upon completion of the projects. Commercial and industrial loans and owner-occupied commercial real estate loans combined represented approximately 55 percent of total commercial loans as of September 30, 2026, a level that has remained relatively consistent with prior periods and in line with our expectations. Total deposits equaled $5.61 billion as of September 30, 2026, compared to $5.28 billion as of December 31, 2025. Local deposits grew $438 million, or an annualized 11.4 percent, during the first nine months of 2026, while brokered deposits decreased $110 million. The growth in local deposits, which occurred despite the customary level of seasonal noninterest-bearing deposit withdrawals by customers to make bonus and tax payments and partnership distributions, reflected successful customer acquisition efforts and net growth in various existing deposit relationships. The loan-to-deposit ratio equaled 88.3 percent as of September 30, 2026, down from 92.8 percent and 91.2 percent as of June 30, 2026, and December 31, 2025, respectively, largely due to local deposit portfolio expansion. As of September 30, 2026, wholesale funds, consisting of Federal Home Loan Bank of Indianapolis advances and brokered deposits, were $325 million, or approximately 5 percent of total funds, compared to $457 million, or approximately 8 percent of total funds, as of December 31, 2025. Noninterest-bearing checking accounts represented approximately 26 percent of total deposits as of September 30, 2026, compared to about 25 percent as of year-end 2025. Mr. Reitsma noted, "The commercial loan portfolio grew during the third quarter and first nine months of 2026 despite elevated levels of payoffs and line of credit paydowns, reflecting ongoing strength in loan originations. Based on our current pipeline and continuing discussions with existing and prospective borrowers, we believe ample opportunities to book commercial loans will exist in upcoming periods. We are pleased with the noteworthy increase in local deposits during the third quarter of 2026 and related decline in our loan-to-deposit ratio and remain focused on funding loan originations and investment purchases through local deposit generation." Asset Quality Nonperforming assets totaled $9.8 million, or 0.1 percent of total assets, as of September 30, 2026, compared to $7.9 million, or 0.1 percent of total assets, as of December 31, 2025, and $9.8 million, or 0.2 percent of total assets, as of September 30, 2025. The level of past due loans remains nominal. During the third quarter of 2026, loan charge-offs were less than $0.1 million, while recoveries of prior period loan charge-offs equaled $0.3 million, providing for net loan recoveries of $0.3 million, or an annualized 0.02 percent of average total loans. Mr. Reitsma remarked, "Our asset quality measures remained strong during the third quarter of 2026 as evidenced by ongoing low levels of nonperforming assets, past due loans, and loan charge-offs. We remain steadfast in our commitment to underwrite loans across all portfolio segments cautiously and in adherence with internal policy guidelines and identify any weakening commercial loan relationships or emerging sector-specific or systemic credit issues as early as possible to minimize the impact of such on our overall financial condition. Our commercial borrowers have generally continued to operate effectively during the extended and continuing period of uncertain macro-economic conditions, and our residential mortgage loan and consumer loan portfolios have also continued to perform well." Capital Position Shareholders' equity totaled $744 million as of September 30, 2026, up $19.0 million from December 31, 2025. Positively impacting shareholders' equity during the first nine months of 2026 was net income of $72.7 million and activity related to the issuance and sale of common stock through various stock-based compensation programs and our dividend reinvestment plan totaling $4.1 million, which was partially offset by a $37.8 million after-tax decrease in the market value of our available for sale securities portfolio, generally reflecting the recent increase in market interest rates, and the payment of cash dividends totaling $20.1 million. Mercantile Bank and Eastern Michigan Bank each maintained "well-capitalized" positions as of September 30, 2026, with total risk-based capital ratios of 13.4 percent and 23.9 percent, respectively. As of September 30, 2026, Mercantile Bank and Eastern Michigan Bank had approximately $200 million and $39 million, respectively, in excess of the 10 percent minimum regulatory threshold required to be categorized as a "well-capitalized" institution. Mercantile reported 17,288,352 total shares outstanding as of September 30, 2026. Mr. Reitsma concluded, "Our ongoing financial strength enabled us to continue our regular cash dividend program and once again provide shareholders with meaningful cash returns on their investments. We believe we are well positioned to effectively address any issues emerging from the extended period of unstable economic and operating conditions as a result of sustained strength in our operating results, asset quality metrics, capital levels, and commercial loan funding opportunities, along with the anticipated attainment of solid financial performance in future periods. Our firm commitment to meeting clients' needs has been successful in retaining existing and fostering new relationships, and we believe the continuation of this commitment will present us with abundant opportunities to originate loans and generate local deposits in upcoming periods. Due to the outstanding efforts of our team members, we are making steady progress regarding the core and digital banking system conversion and expect it to be completed in the first quarter of 2027 as originally planned." Investor Presentation Mercantile has prepared presentation materials that management intends to use during its previously announced third quarter 2026 conference call on Tuesday, October 20, 2026, at 10:00 a.m. Eastern Time, and from time to time thereafter in presentations about the company's operations and performance. These materials, which are available for viewing in the Investor Relations section of Mercantile's website at www.mercbank.com, have been furnished to the U.S. Securities and Exchange Commission concurrently with this press release. About Mercantile Bank Corporation Based in Grand Rapids, Michigan, Mercantile Bank Corporation is the bank holding company for Mercantile Bank and Eastern Michigan Bank. Mercantile Bank and Eastern Michigan Bank provide financial products and services in a professional and personalized manner designed to make banking easier for businesses, individuals, and governmental units. Distinguished by exceptional service, knowledgeable staff, and a commitment to the communities they serve, Mercantile Bank and Eastern Michigan Bank together comprise one of the largest Michigan-based banking organizations with total combined assets of approximately $7.2 billion. Mercantile Bank Corporation's common stock is listed on the NASDAQ Global Select Market under the symbol "MBWM." For more information about Mercantile, visit www.mercbank.com, and follow us on Facebook, Instagram, X (formerly Twitter) @MercBank, and LinkedIn @merc-bank. Reconciliation of U.S. GAAP to Non-GAAP Financial Measures This news release contains certain non-GAAP financial measures, including adjusted net income and adjusted diluted earnings per share, each of which excludes costs associated with (i) Mercantile's acquisition of Eastern Michigan Financial Corporation that was completed during the fourth quarter of 2025 ($0.2 million and $0.5 million during the third quarter and first nine months of 2026, respectively), and (ii) the previously announced core and digital banking system conversion ($0.4 million and $3.9 million during the third quarter and first nine months of 2026, respectively), on an after-tax basis. These non-GAAP financial measures are identified in this news release where they appear. We believe that presenting these non-GAAP financial measures provides investors, analysts, and other interested parties with meaningful supplementary information to assess Mercantile's underlying operational performance by removing the effect of costs we consider to be non-recurring in nature and not reflective of Mercantile's core operating results. These non-GAAP financial measures are used by management to evaluate Mercantile's ongoing operations, for internal planning and forecasting purposes, and to assess period-over-period comparability. Management believes it is useful for the reader to review these non-GAAP adjusted measures alongside the GAAP measures. Our definition of these adjusted financial measures may differ from similarly named measures used by others. These non-GAAP measures have limitations as an analytical tool and should not be considered in isolation or as a substitute for our GAAP measures. Our net income and diluted earnings per share are presented on a GAAP-basis in the first paragraph of this release. Forward-Looking Statements This news release contains statements and information that may constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements can be identified by words such as: "anticipate," "intend," "plan," "goal," "seek," "believe," "project," "estimate," "expect," "endeavor," "strategy," "future," "likely," "may," "should," "will," and similar references to future periods. Any such statements are based on current expectations that involve a number of risks and uncertainties. Actual results may differ materially from the results expressed in forward-looking statements. Factors that might cause such a difference include difficulties and delays in the ongoing integration of Mercantile Bank and Eastern Michigan Bank and achieving anticipated synergies, cost savings and other benefits from the transaction; delays, cost overruns, disruptions, or other difficulties in completing the core and digital banking system conversion, or failure to realize its anticipated benefits; changes in interest rates and interest rate relationships; increasing rates of inflation and slower growth rates or recession; significant declines in the value of commercial real estate; market volatility; demand for products and services; climate impacts; labor markets; the degree of competition by traditional and nontraditional financial services companies; changes in banking regulation or actions by bank regulators; changes in tax laws and other laws and regulations applicable to us; changes in prices, levies, and assessments; the impact of technological advances; potential cyber-attacks, information security breaches and other criminal activities; litigation liabilities; governmental and regulatory policy changes; the outcomes of existing or future contingencies; trends in customer behavior as well as their ability to repay loans; changes in local real estate values; damage to our reputation resulting from adverse publicity, regulatory actions, litigation, operational failures, and the failure to meet client expectations and other factors; changes in the national and local economies; unstable political and economic environments; disease outbreaks, such as the COVID-19 pandemic or similar public health threats, and measures implemented to combat them; and other factors, including those expressed as risk factors, disclosed from time to time in filings made by Mercantile with the Securities and Exchange Commission. Mercantile undertakes no obligation to update or clarify forward-looking statements, whether as a result of new information, future events or otherwise, except as required by law. Investors are cautioned not to place undue reliance on any forward-looking statements contained herein. MERCANTILE BANK CORPORATION CONSOLIDATED BALANCE SHEETS (Unaudited) | | | | | | | | SEPTEMBER 30, | | DECEMBER 31, | | SEPTEMBER 30, | | 2026 | | 2025 | | 2025 ASSETS | | | | | | Cash and due from banks | $ | 56,105,000 | $ | 54,755,000 | $ | 58,593,000 Interest-earning deposits and Federal Funds sold | | 572,393,000 | | 418,569,000 | | 418,426,000 Total cash and cash equivalents | | 628,498,000 | | 473,324,000 | | 477,019,000 | | | | | | Securities available for sale | | 1,098,016,000 | | 1,102,230,000 | | 855,138,000 Mortgage loans held for sale | | 22,439,000 | | 17,160,000 | | 17,433,000 | | | | | | Loans | | 4,952,942,000 | | 4,821,888,000 | | 4,615,160,000 Allowance for credit losses | | (56,415,000) | | (58,191,000) | | (59,129,000) Loans, net | | 4,896,527,000 | | 4,763,697,000 | | 4,556,031,000 | | | | | | Premises and equipment, net | | 60,799,000 | | 62,468,000 | | 56,155,000 Bank owned life insurance | | 117,407,000 | | 105,342,000 | | 94,848,000 Goodwill | | 73,689,000 | | 72,656,000 | | 49,473,000 Core deposit intangible, net | | 16,442,000 | | 20,388,000 | | 0 Other assets | | 249,051,000 | | 217,954,000 | | 202,390,000 | | | | | | Total assets | $ | 7,162,868,000 | $ | 6,835,219,000 | $ | 6,308,487,000 | | | | | | | | | | | | LIABILITIES AND SHAREHOLDERS' EQUITY | | | | | | Deposits: | | | | | | Noninterest-bearing | $ | 1,446,357,000 | $ | 1,339,666,000 | $ | 1,182,775,000 Interest-bearing | | 4,165,919,000 | | 3,944,786,000 | | 3,629,038,000 Total deposits | | 5,612,276,000 | | 5,284,452,000 | | 4,811,813,000 | | | | | | Securities sold under agreements to repurchase | | 197,453,000 | | 232,291,000 | | 251,499,000 Federal Home Loan Bank advances | | 305,322,000 | | 326,221,000 | | 346,221,000 Subordinated debentures | | 51,529,000 | | 51,015,000 | | 50,844,000 Subordinated notes | | 89,914,000 | | 89,657,000 | | 89,571,000 Term note | | 22,500,000 | | 30,000,000 | | 0 Accrued interest and other liabilities | | 140,039,000 | | 96,699,000 | | 100,909,000 Total liabilities | | 6,419,033,000 | | 6,110,335,000 | | 5,650,857,000 | | | | | | SHAREHOLDERS' EQUITY | | | | | | Common stock | | 353,553,000 | | 349,431,000 | | 303,463,000 Retained earnings | | 452,046,000 | | 399,448,000 | | 382,679,000 Accumulated other comprehensive income/(loss) | | (61,764,000) | | (23,995,000) | | (28,512,000) Total shareholders' equity | | 743,835,000 | | 724,884,000 | | 657,630,000 | | | | | | Total liabilities and shareholders' equity | $ | 7,162,868,000 | $ | 6,835,219,000 | $ | 6,308,487,000 MERCANTILE BANK CORPORATION CONSOLIDATED REPORTS OF INCOME (Unaudited) | | | | | | | | | | | | | | | | | | | | | | | | | | | THREE MONTHS ENDED | | THREE MONTHS ENDED | NINE MONTHS ENDED | NINE MONTHS ENDED | September 30, 2026 | | September 30, 2025 | September 30, 2026 | September 30, 2025 INTEREST INCOME | | | | | | | | | | | | | Loans, including fees | $ | 76,630,000 | | | $ | 74,659,000 | | $ | 221,820,000 | | $ | 220,003,000 | Investment securities | | 9,345,000 | | | | 5,855,000 | | | 27,368,000 | | | 16,227,000 | Other interest-earning assets | | 4,294,000 | | | | 5,129,000 | | | 13,203,000 | | | 11,710,000 | Total interest income | | 90,269,000 | | | | 85,643,000 | | | 262,391,000 | | | 247,940,000 | | | | | | | | | | | | | | INTEREST EXPENSE | | | | | | | | | | | | | Deposits | | 23,121,000 | | | | 26,817,000 | | | 69,507,000 | | | 77,735,000 | Short-term borrowings | | 1,430,000 | | | | 1,974,000 | | | 4,396,000 | | | 5,656,000 | Federal Home Loan Bank advances | | 2,611,000 | | | | 2,895,000 | | | 7,762,000 | | | 8,689,000 | Other borrowed money | | 2,207,000 | | | | 1,955,000 | | | 6,666,000 | | | 5,831,000 | Total interest expense | | 29,369,000 | | | | 33,641,000 | | | 88,331,000 | | | 97,911,000 | | | | | | | | | | | | | | Net interest income | | 60,900,000 | | | | 52,002,000 | | | 174,060,000 | | | 150,029,000 | | | | | | | | | | | | | | Provision for credit losses | | 700,000 | | | | 200,000 | | | (2,900,000) | | | 3,900,000 | | | | | | | | | | | | | | Net interest income after | | | | | | | | | | | | | provision for credit losses | | 60,200,000 | | | | 51,802,000 | | | 176,960,000 | | | 146,129,000 | | | | | | | | | | | | | | NONINTEREST INCOME | | | | | | | | | | | | | Service charges on accounts | | 2,744,000 | | | | 2,064,000 | | | 7,874,000 | | | 5,871,000 | Mortgage banking income | | 3,359,000 | | | | 3,066,000 | | | 9,474,000 | | | 9,686,000 | Credit and debit card income | | 2,912,000 | | | | 2,371,000 | | | 8,421,000 | | | 6,922,000 | Interest rate swap income | | 774,000 | | | | 377,000 | | | 1,880,000 | | | 1,687,000 | Payroll services | | 851,000 | | | | 825,000 | | | 2,799,000 | | | 2,648,000 | Earnings on bank owned life insurance | | 789,000 | | | | 858,000 | | | 2,230,000 | | | 1,961,000 | Other income | | 874,000 | | | | 827,000 | | | 2,759,000 | | | 1,777,000 | Total noninterest income | | 12,303,000 | | | | 10,388,000 | | | 35,437,000 | | | 30,552,000 | | | | | | | | | | | | | | NONINTEREST EXPENSE | | | | | | | | | | | | | Salaries and benefits | | 26,853,000 | | | | 21,094,000 | | | 75,155,000 | | | 61,362,000 | Occupancy | | 2,308,000 | | | | 2,122,000 | | | 6,985,000 | | | 6,395,000 | Furniture and equipment | | 1,016,000 | | | | 846,000 | | | 2,967,000 | | | 2,458,000 | Data processing costs | | 4,829,000 | | | | 3,945,000 | | | 13,872,000 | | | 11,315,000 | Core conversion costs | | 438,000 | | | | 0 | | | 3,897,000 | | | 0 | Acquisition costs | | 153,000 | | | | 606,000 | | | 547,000 | | | 628,000 | Core deposit intangible amortization | | 865,000 | | | | 0 | | | 2,596,000 | | | 0 | Other expense | | 7,091,000 | | | | 6,137,000 | | | 18,964,000 | | | 17,075,000 | Total noninterest expense | | 43,553,000 | | | | 34,750,000 | | | 124,983,000 | | | 99,233,000 | | | | | | | | | | | | | | Income before federal income | | | | | | | | | | | | | tax expense | | 28,950,000 | | | | 27,440,000 | | | 87,414,000 | | | 77,448,000 | | | | | | | | | | | | | | Federal income tax expense | | 4,878,000 | | | | 3,682,000 | | | 14,729,000 | | | 11,535,000 | | | | | | | | | | | | | | Net Income | $ | 24,072,000 | | | $ | 23,758,000 | | $ | 72,685,000 | | $ | 65,913,000 | | | | | | | | | | | | | | Basic earnings per share | | $1.39 | | | | $1.46 | | | $4.21 | | | $4.06 | Diluted earnings per share | | $1.39 | | | | $1.46 | | | $4.21 | | | $4.06 | | | | | | | | | | | | | | Average basic shares outstanding | | 17,286,048 | | | | 16,249,267 | | | 17,267,297 | | | 16,229,243 | Average diluted shares outstanding | | 17,286,048 | | | | 16,249,267 | | | 17,267,297 | | | 16,229,243 | MERCANTILE BANK CORPORATION CONSOLIDATED FINANCIAL HIGHLIGHTS (Unaudited) | | | | | | | | | | | | | | | | Quarterly | | Year-To-Date (dollars in thousands except per share data) | | 2026 | | 2026 | | 2026 | | 2025 | | 2025 | | | | | | 3rd Qtr | | 2nd Qtr | | 1st Qtr | | 4th Qtr | | 3rd Qtr | | 2026 | | 2025 EARNINGS | | | | | | | | | | | | | | Net interest income | $ | 60,900 | | 57,258 | | 55,901 | | 51,015 | | 52,002 | | 174,060 | | 150,029 Provision for credit losses | $ | 700 | | (1,800) | | (1,800) | | (700) | | 200 | | (2,900) | | 3,900 Noninterest income | $ | 12,303 | | 11,498 | | 11,688 | | 11,056 | | 10,388 | | 35,437 | | 30,552 Noninterest expense | $ | 43,553 | | 39,375 | | 42,107 | | 36,726 | | 34,750 | | 124,983 | | 99,233 Net income before federal income | | | | | | | | | | | | | | tax expense | $ | 28,950 | | 31,181 | | 27,282 | | 26,045 | | 27,440 | | 87,414 | | 77,448 Net income | $ | 24,072 | | 25,927 | | 22,685 | | 22,841 | | 23,758 | | 72,685 | | 65,913 Basic earnings per share | $ | 1.39 | | 1.50 | | 1.32 | | 1.40 | | 1.46 | | 4.21 | | 4.06 Diluted earnings per share | $ | 1.39 | | 1.50 | | 1.32 | | 1.40 | | 1.46 | | 4.21 | | 4.06 Average basic shares outstanding | | 17,286,048 | | 17,278,057 | | 17,237,249 | | 16,263,884 | | 16,249,267 | | 17,267,297 | | 16,229,243 Average diluted shares outstanding | | 17,286,048 | | 17,278,057 | | 17,237,249 | | 16,263,884 | | 16,249,267 | | 17,267,297 | | 16,229,243 | | | | | | | | | | | | | | PERFORMANCE RATIOS | | | | | | | | | | | | | | Return on average assets | | 1.37 % | | 1.52 % | | 1.35 % | | 1.44 % | | 1.50 % | | 1.41 % | | 1.44 % Return on average equity | | 12.61 % | | 13.97 % | | 12.54 % | | 13.50 % | | 14.72 % | | 13.04 % | | 14.28 % Net interest margin (fully tax-equivalent) | | 3.73 % | | 3.59 % | | 3.55 % | | 3.43 % | | 3.49 % | | 3.62 % | | 3.48 % Efficiency ratio | | 59.50 % | | 57.27 % | | 62.30 % | | 59.17 % | | 55.70 % | | 59.66 % | | 54.95 % Full-time equivalent employees | | 812 | | 827 | | 766 | | 770 | | 683 | | 812 | | 683 | | | | | | | | | | | | | | YIELD ON ASSETS / COST OF FUNDS | | | | | | | | | | | | | | Yield on loans | | 6.12 % | | 6.01 % | | 6.04 % | | 6.12 % | | 6.35 % | | 6.06 % | | 6.31 % Yield on securities | | 3.43 % | | 3.36 % | | 3.27 % | | 2.96 % | | 2.90 % | | 3.35 % | | 2.82 % Yield on other interest-earning assets | | 3.96 % | | 4.04 % | | 4.00 % | | 4.25 % | | 4.63 % | | 4.00 % | | 4.75 % Yield on total earning assets | | 5.52 % | | 5.42 % | | 5.42 % | | 5.52 % | | 5.74 % | | 5.45 % | | 5.74 % Yield on total assets | | 5.16 % | | 5.09 % | | 5.09 % | | 5.20 % | | 5.41 % | | 5.11 % | | 5.43 % Cost of deposits | | 1.69 % | | 1.74 % | | 1.77 % | | 2.04 % | | 2.20 % | | 1.73 % | | 2.22 % Cost of borrowed funds | | 3.66 % | | 3.57 % | | 3.58 % | | 3.56 % | | 3.61 % | | 3.60 % | | 3.62 % Cost of interest-bearing liabilities | | 2.49 % | | 2.53 % | | 2.54 % | | 2.87 % | | 3.06 % | | 2.52 % | | 3.08 % Cost of funds (total earning assets) | | 1.79 % | | 1.83 % | | 1.87 % | | 2.09 % | | 2.25 % | | 1.83 % | | 2.26 % Cost of funds (total assets) | | 1.68 % | | 1.72 % | | 1.75 % | | 1.97 % | | 2.12 % | | 1.72 % | | 2.14 % | | | | | | | | | | | | | | MORTGAGE BANKING ACTIVITY | | | | | | | | | | | | | | Total mortgage loans originated | $ | 142,377 | | 159,105 | | 127,939 | | 141,451 | | 136,840 | | 429,421 | | 379,157 Purchase mortgage loans originated | $ | 117,615 | | 126,798 | | 68,769 | | 85,973 | | 107,993 | | 313,182 | | 300,734 Refinance mortgage loans originated | $ | 24,762 | | 32,307 | | 59,170 | | 55,478 | | 28,847 | | 116,239 | | 78,423 Mortgage loans originated with intent to sell | $ | 92,569 | | 107,447 | | 105,873 | | 116,886 | | 111,334 | | 305,889 | | 304,110 Income on sale of mortgage loans | $ | 3,215 | | 3,156 | | 3,049 | | 3,375 | | 3,482 | | 9,420 | | 9,156 | | | | | | | | | | | | | | CAPITAL | | | | | | | | | | | | | | Tangible equity to tangible assets | | 9.24 % | | 9.87 % | | 9.41 % | | 9.37 % | | 9.72 % | | 9.24 % | | 9.72 % Tier 1 leverage capital ratio | | 11.11 % | | 11.04 % | | 10.61 % | | 11.30 % | | 10.90 % | | 11.11 % | | 10.90 % Common equity risk-based capital ratio | | 11.44 % | | 11.44 % | | 11.27 % | | 11.01 % | | 11.33 % | | 11.44 % | | 11.33 % Tier 1 risk-based capital ratio | | 12.23 % | | 12.25 % | | 12.09 % | | 11.83 % | | 12.20 % | | 12.23 % | | 12.20 % Total risk-based capital ratio | | 14.60 % | | 14.65 % | | 14.59 % | | 14.35 % | | 14.87 % | | 14.60 % | | 14.87 % Tier 1 capital | $ | 768,377 | | 749,048 | | 723,395 | | 704,776 | | 685,440 | | 768,377 | | 685,440 Tier 1 plus tier 2 capital | $ | 917,167 | | 896,267 | | 872,668 | | 854,876 | | 835,263 | | 917,167 | | 835,263 Total risk-weighted assets | $ | 6,283,913 | | 6,116,615 | | 5,981,420 | | 5,958,763 | | 5,617,005 | | 6,283,913 | | 5,617,005 Book value per common share | $ | 43.03 | | 43.68 | | 42.66 | | 42.19 | | 40.46 | | 43.03 | | 40.46 Tangible book value per common share | $ | 37.81 | | 38.42 | | 37.34 | | 36.78 | | 37.41 | | 37.81 | | 37.41 Cash dividend per common share | $ | 0.40 | | 0.39 | | 0.39 | | 0.38 | | 0.38 | | 1.18 | | 1.12 | | | | | | | | | | | | | | ASSET QUALITY | | | | | | | | | | | | | | Gross loan charge-offs | $ | 46 | | 10 | | 5 | | 2,842 | | 172 | | 61 | | 273 Recoveries | $ | 319 | | 514 | | 351 | | 206 | | 726 | | 1,184 | | 1,048 Net loan charge-offs (recoveries) | $ | (273) | | (504) | | (346) | | 2,636 | | (554) | | (1,123) | | (775) Net loan charge-offs to average loans | | (0.02 %) | | (0.04 %) | | (0.03 %) | | 0.23 % | | (0.05 %) | | (0.03 %) | | (0.02 %) Allowance for credit losses | $ | 56,415 | | 55,441 | | 56,736 | | 58,191 | | 59,129 | | 56,415 | | 59,129 Allowance to loans | | 1.14 % | | 1.13 % | | 1.18 % | | 1.21 % | | 1.28 % | | 1.14 % | | 1.28 % Nonperforming loans | $ | 9,742 | | 5,803 | | 7,543 | | 7,870 | | 9,844 | | 9,742 | | 9,844 Other real estate/repossessed assets | $ | 82 | | 0 | | 0 | | 0 | | 0 | | 82 | | 0 Nonperforming loans to total loans | | 0.20 % | | 0.12 % | | 0.16 % | | 0.16 % | | 0.21 % | | 0.20 % | | 0.21 % Nonperforming assets to total assets | | 0.14 % | | 0.09 % | | 0.11 % | | 0.12 % | | 0.16 % | | 0.14 % | | 0.16 % | | | | | | | | | | | | | | NONPERFORMING ASSETS - COMPOSITION | | | | | | | | | | | | | Commercial: | | | | | | | | | | | | | | Commercial & industrial | $ | 2,880 | | 942 | | 1,122 | | 1,393 | | 1,509 | | 2,880 | | 1,509 Land development & construction | $ | 0 | | 0 | | 0 | | 201 | | 0 | | 0 | | 0 Owner occupied comm'l real estate | $ | 3,789 | | 953 | | 494 | | 517 | | 0 | | 3,789 | | 0 Nonowner occupied comm'l real estate | $ | 0 | | 0 | | 2,732 | | 2,732 | | 5,532 | | 0 | | 5,532 Multi-family & residential rental | $ | 0 | | 0 | | 0 | | 0 | | 0 | | 0 | | 0 Total commercial | $ | 6,669 | | 1,895 | | 4,348 | | 4,843 | | 7,041 | | 6,669 | | 7,041 Retail: | | | | | | | | | | | | | | 1-4 family mortgages | $ | 3,049 | | 3,811 | | 3,114 | | 2,971 | | 2,767 | | 3,049 | | 2,767 Other consumer | $ | 106 | | 97 | | 81 | | 56 | | 36 | | 106 | | 36 Total retail | $ | 3,155 | | 3,908 | | 3,195 | | 3,027 | | 2,803 | | 3,155 | | 2,803 Total nonperforming assets | $ | 9,824 | | 5,803 | | 7,543 | | 7,870 | | 9,844 | | 9,824 | | 9,844 | | | | | | | | | | | | | | | | | | | | | | | | | | | | NONPERFORMING ASSETS - RECON | | | | | | | | | | | | | | Beginning balance | $ | 5,803 | | 7,543 | | 7,870 | | 9,844 | | 9,743 | | 7,870 | | 5,743 Additions | $ | 6,136 | | 1,284 | | 410 | | 1,299 | | 426 | | 7,830 | | 6,641 Return to performing status | $ | 0 | | 0 | | (12) | | 0 | | (27) | | (12) | | (27) Principal payments | $ | (2,086) | | (3,016) | | (725) | | (466) | | (222) | | (5,827) | | (2,351) Sale proceeds | $ | 0 | | 0 | | 0 | | 0 | | 0 | | 0 | | 0 Loan charge-offs | $ | (29) | | (8) | | 0 | | (2,807) | | (76) | | (37) | | (162) Valuation write-downs | $ | 0 | | 0 | | 0 | | 0 | | 0 | | 0 | | 0 Ending balance | $ | 9,824 | | 5,803 | | 7,543 | | 7,870 | | 9,844 | | 9,824 | | 9,844 | | | | | | | | | | | | | | LOAN PORTFOLIO COMPOSITION | | | | | | | | | | | | | | Commercial: | | | | | | | | | | | | | | Commercial & industrial | $ | 1,499,086 | | 1,537,029 | | 1,429,830 | | 1,374,522 | | 1,337,729 | | 1,499,086 | | 1,337,729 Land development & construction | $ | 112,646 | | 119,386 | | 119,560 | | 117,373 | | 70,806 | | 112,646 | | 70,806 Owner occupied comm'l real estate | $ | 757,329 | | 803,884 | | 799,066 | | 778,869 | | 729,451 | | 757,329 | | 729,451 Nonowner occupied comm'l real estate | $ | 1,159,659 | | 1,091,844 | | 1,101,758 | | 1,110,674 | | 1,091,210 | | 1,159,659 | | 1,091,210 Multi-family & residential rental | $ | 542,058 | | 498,253 | | 485,175 | | 537,224 | | 521,111 | | 542,058 | | 521,111 Total commercial | $ | 4,070,778 | | 4,050,396 | | 3,935,389 | | 3,918,662 | | 3,750,307 | | 4,070,778 | | 3,750,307 Retail: | | | | | | | | | | | | | | 1-4 family mortgages | $ | 763,715 | | 750,526 | | 768,237 | | 790,857 | | 780,917 | | 763,715 | | 780,917 Other consumer | $ | 118,449 | | 114,631 | | 113,067 | | 112,369 | | 83,936 | | 118,449 | | 83,936 Total retail | $ | 882,164 | | 865,157 | | 881,304 | | 903,226 | | 864,853 | | 882,164 | | 864,853 Total loans | $ | 4,952,942 | | 4,915,553 | | 4,816,693 | | 4,821,888 | | 4,615,160 | | 4,952,942 | | 4,615,160 | | | | | | | | | | | | | | END OF PERIOD BALANCES | | | | | | | | | | | | | | Loans | $ | 4,952,942 | | 4,915,553 | | 4,816,693 | | 4,821,888 | | 4,615,160 | | 4,952,942 | | 4,615,160 Securities | $ | 1,098,016 | | 1,125,529 | | 1,125,433 | | 1,102,230 | | 855,138 | | 1,098,016 | | 855,138 Other interest-earning assets | $ | 619,830 | | 327,399 | | 577,619 | | 458,548 | | 457,373 | | 619,830 | | 457,373 Total earning assets (before allowance) | $ | 6,670,788 | | 6,368,481 | | 6,519,745 | | 6,382,666 | | 5,927,671 | | 6,670,788 | | 5,927,671 Total assets | $ | 7,162,868 | | 6,819,490 | | 6,945,035 | | 6,835,219 | | 6,308,487 | | 7,162,868 | | 6,308,487 Noninterest-bearing deposits | $ | 1,446,357 | | 1,420,591 | | 1,331,947 | | 1,339,666 | | 1,182,775 | | 1,446,357 | | 1,182,775 Interest-bearing deposits | $ | 4,165,919 | | 3,875,797 | | 4,087,571 | | 3,944,786 | | 3,629,038 | | 4,165,919 | | 3,629,038 Total deposits | $ | 5,612,276 | | 5,296,388 | | 5,419,518 | | 5,284,452 | | 4,811,813 | | 5,612,276 | | 4,811,813 Total borrowed funds | $ | 668,270 | | 690,554 | | 704,853 | | 730,778 | | 739,688 | | 668,270 | | 739,688 Total interest-bearing liabilities | $ | 4,834,189 | | 4,566,351 | | 4,792,424 | | 4,675,564 | | 4,368,726 | | 4,834,189 | | 4,368,726 Shareholders' equity | $ | 743,835 | | 755,124 | | 736,947 | | 724,884 | | 657,630 | | 743,835 | | 657,630 | | | | | | | | | | | | | | AVERAGE BALANCES | | | | | | | | | | | | | | Loans | $ | 4,967,799 | | 4,891,868 | | 4,828,031 | | 4,627,544 | | 4,668,173 | | 4,896,411 | | 4,664,356 Securities | $ | 1,126,018 | | 1,128,063 | | 1,119,988 | | 880,619 | | 841,853 | | 1,124,712 | | 803,026 Other interest-earning assets | $ | 424,354 | | 413,729 | | 467,991 | | 426,758 | | 433,055 | | 435,198 | | 324,920 Total earning assets (before allowance) | $ | 6,518,171 | | 6,433,660 | | 6,416,010 | | 5,934,921 | | 5,943,081 | | 6,456,321 | | 5,792,302 Total assets | $ | 6,957,917 | | 6,851,065 | | 6,837,239 | | 6,296,341 | | 6,294,841 | | 6,882,516 | | 6,125,953 Noninterest-bearing deposits | $ | 1,440,772 | | 1,376,108 | | 1,318,537 | | 1,227,100 | | 1,215,918 | | 1,378,920 | | 1,171,789 Interest-bearing deposits | $ | 3,999,140 | | 3,956,008 | | 3,999,141 | | 3,599,012 | | 3,610,600 | | 3,984,763 | | 3,506,005 Total deposits | $ | 5,439,912 | | 5,332,116 | | 5,317,678 | | 4,826,112 | | 4,826,518 | | 5,363,683 | | 4,677,794 Total borrowed funds | $ | 677,906 | | 707,080 | | 712,240 | | 720,499 | | 749,679 | | 698,949 | | 746,080 Total interest-bearing liabilities | $ | 4,677,046 | | 4,663,088 | | 4,711,381 | | 4,319,511 | | 4,360,279 | | 4,683,712 | | 4,252,085 Shareholders' equity | $ | 757,527 | | 744,193 | | 733,366 | | 671,029 | | 640,495 | | 745,117 | | 617,126 View original content to download multimedia:https://www.prnewswire.com/news-releases/mercantile-bank-corporation-announces-robust-third-quarter-2026-results-302912986.html

For the quarter ended September 2026, Mercantile Bank (MBWM) reported revenue of $73.2 million, up 17.3% over the same period last year. EPS came in at $1.42, compared to $1.46 in the year-ago quarter. The reported revenue represents a surprise of +3.72% over the Zacks Consensus Estimate of $70.58 million. With the consensus EPS estimate being $1.35, the EPS surprise was +5.19%. While investors scrutinize revenue and earnings changes year-over-year and how they compare with Wall Street expectations to determine their next move, some key metrics always offer a more accurate picture of a company's financial health. Since these metrics play a crucial role in driving the top- and bottom-line numbers, comparing them with the year-ago numbers and what analysts estimated about them helps investors better project a stock's price performance. Here is how Mercantile Bank performed in the just reported quarter in terms of the metrics most widely monitored and projected by Wall Street analysts: - Efficiency Ratio: 59.5% versus the four-analyst average estimate of 58.1%. - Net interest margin (fully tax-equivalent): 3.7% compared to the 3.6% average estimate based on four analysts. - Net loan charge-offs (recoveries) to average loans: -0% compared to the 0.1% average estimate based on three analysts. - Average Balances - Total earning assets (before allowance): $6.52 billion compared to the $6.48 billion average estimate based on three analysts. - Total Noninterest Income: $12.3 million versus the four-analyst average estimate of $11.68 million. - Net Interest Income: $60.9 million versus the four-analyst average estimate of $59.3 million. - Payroll services: $0.85 million compared to the $0.95 million average estimate based on two analysts. - Interest rate swap income: $0.77 million versus $0.43 million estimated by two analysts on average. - Credit and debit card income: $2.91 million versus $2.98 million estimated by two analysts on average. - Earnings on bank owned life insurance: $0.79 million versus $0.79 million estimated by two analysts on average. - Mortgage banking income: $3.36 million compared to the $3.25 million average estimate based on two analysts. - Other income: $0.87 million versus $0.68 million estimated by two analysts on average. View all Key Company Metrics for Mercantile Bank here>>> Shares of Mercantile Bank have returned -2.1% over the past month versus the Zacks S&P 500 composite's +0.7% change. The stock currently has a Zacks Rank #3 (Hold), indicating that it could perform in line with the broader market in the near term. Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Mercantile Bank Corporation (MBWM) : Free Stock Analysis Report This article originally published on Zacks Investment Research (zacks.com). Zacks Investment Research

Image source: The Motley Fool. Tue, Oct 20, 2026 - Chief Marketing Officer - Nichole Kladder - President and Chief Executive - Raymond E. Reitsma - Executive Vice President and Chief Financial Officer - Charles E. Christmas Need a quote from a Motley Fool analyst? Email [email protected] Operator: Good morning, and welcome to the Mercantile Bank Corporation 26 Third Quarter Earnings Results Conference Call. All participants will be in a listen-only mode. Should you need assistance, please signal a conference specialist by pressing the star key followed by 0. After today's presentation, there will be an opportunity to ask questions. Please note, this event is being recorded. I would now like to turn the conference call over to Nichole Kladder, chief marketing officer of Mercantile Bank. Please go ahead. Nichole Kladder: Hello, and thank you for joining us. Today, we will cover the company's financial results for the third quarter of 2026. Team members joining me this morning include Raymond E. Reitsma, president and chief executive as well as Chuck Christmas, executive vice president and chief financial officer. Our agenda will begin with prepared remarks by both Raymond and Chuck and will include references to our presentation, covering this quarter's results. You can access a copy of this presentation as well as the press release sent earlier today by visiting mercbank.com. After our prepared remarks, we will then open the call to your questions. Before we begin, it is my response to inform you that this call may involve certain forward looking statements such as projections of revenue, earnings, and capital structure, as well as statements on the plans and objectives of the company's business. The company's actual results could differ materially from any forward looking statements made today due to factors described in the company's latest Securities and Exchange Commission's filings. The company assumes no obligation to update any forward looking statements made during the call. Let's begin. Raymond? Raymond E. Reitsma: Thank you, Nicole. Our results from the third quarter continue to build on the theme of commercial expertise generating a strong return profile. My comments will focus on highlights around the net interest margin, loan and deposit growth, asset quality, noninterest income, and noninterest expense. Chuck will then follow with the specifics of the quarter. The net interest margin improved to 3.73 during the third quarter of 2026, from 3.49% during the third quarter of 2025. This improvement was driven largely by a reduction in the cost of funds resulting from the acquisition of Eastern and the refinement of our deposit base including a decrease in broker deposits and the repricing fixed rate loans and securities with continued opportunities for asset repricing in 2026 and 2027. In addition, the margin expansion occurred in a dynamic interest rate environment. From the third quarter of 2025 to the first quarter of 2026, SOFR declined by 67 basis points and our net interest margin increased by 6 basis points. From the first quarter of 2026 to the third quarter of 2026, SOFR was unchanged and our net interest margin increased by 18 basis points highlighting the impact of the actions listed above. The chart on page 11 of the investor presentation illustrates these dynamics. Turning to loans. Commercial loans, our largest asset class, increased 9% from the prior year-end and quarter-end and helped drive a 17% increase in revenue compared with the third quarter of 2025. That growth occurred despite elevated pay downs from asset and business sales excess cash flow, and refinancing to the secondary markets totaling $448 million for the 9 months ending 09/30/2026 compared to $306 million during the respective 2025 period. At the same time, lending commitments including unfunded portions of construction loans stand at a 5-quarter high of $589 million at 09/30/2026 compared to $386 million at 09/30/2025. Asset quality continues to be strong with nonperforming assets representing only 14 basis points and 16 basis points of total assets at 09/30/2026 and 09/30/2025 respectively. Past due loans stand at just 3 basis points of total loans as of 09/30/2026. C&I and owner occupied commercial real estate remain near our target of 55% of the commercial portfolio with appropriate granularity relative to loan type classifications. These solid metrics reflect continued discipline in underwriting standards, a strong credit culture, and the quality of our client base. On the funding side, our focus on deposits continues to produce results. Total deposits increased 17% over the last 12 months ending 09/30/2026. including 22% growth in noninterest bearing deposits and 15% growth in interest bearing deposits. This growth principally reflects growth in commercial relationships development of relationships in the public funds markets, and, of course, the acquisition of Eastern Michigan Bank. Importantly, overall deposit growth occurred as certificates of deposit declined by approximately $180 million over the same period. This decline primarily represents brokered CDs and as a result, the overall quality of our funding mix continues to improve while our reliance and higher cost term funding continues to decline. Non interest income in total increased 16% during the first 9 months of 2026 compared to the respective 2025 period. Including a 34% in service charges on accounts, a 22% increase credit and debit card income, and an 11% increase in swap income, in large part reflecting growth in commercial relationships. We have characterized 2026 as a year of investment around people and technology, including a change in our core systems provider, which is reflected in our noninterest expense. Investments in people include additional costs around the company in general and, in Southeast Michigan as we take the opportunity afforded by disruption in that market. Chuck will comment on what our normalized run rate will look like in upcoming quarters. We remain excited about our combination with Eastern and the opportunities to add customers and employees to our bank as we capitalize on disruptions to markets in Michigan, particularly Southeast Michigan. That concludes my remarks. I will now turn the call over to Chuck. Charles E. Christmas: Thanks, Raymond. Good morning, everyone. This morning, we announced net income of $24.1 million or $1.39 per diluted share for the third quarter of 2026, compared with net income of $23.8 million or $1.46 per diluted share for the third quarter of 2025. Net income during the first 9 months of 2026 totaled $72.7 million or $4.21 per diluted share compared to $65.9 million or $4.06 per diluted share during the first 9 months of 2025. Growth in net income during both time frames primarily reflected increased net interest income and noninterest income that more than offset higher noninterest expenses and federal income tax expense. Excluding nonrecurring costs associated with the year-end 2025 acquisition of Eastern Michigan, and the ongoing core and digital banking system conversion and the impacts of smaller onetime items, adjusted net income was $24.5 million or $1.42 per diluted share for the third quarter of 2026, $24.3 million or $1.50 per diluted share for the third quarter of 2025, $76.1 million or $4.41 per diluted share for the first 9 months of 2026 and $66.4 million or $4.09 per diluted share for the first 9 months of 2025. Adjusted diluted earnings per share decreased 8 cents or approximately 5% in the third quarter of 2026 compared to the third quarter of 2025, and increased $0.32 per diluted share or approximately 8% during the first 9 months of 2026 compared to the first 9 months of 2025. We believe using these non GAAP measurements reflects our core earnings performance and provides for a more accurate current period versus prior period comparisons. Interest income on loans increased during the third quarter and first 9 months of 2026 compared to the prior year periods, primarily reflecting loan growth that was partially offset by a lower yield on loans. Average loans totaled $4.97 billion during the third quarter of 2026, compared to $4.6 billion during the third quarter of 2025, an increase of $300 million Mercantile Bank experienced robust commercial loan fundings throughout 2026, but also received significant payoffs and partial paydowns of certain larger commercial loans aggregating $448 million. Our yield on loans during the third quarter of 2026 was 23 basis points lower than the third quarter of 2025, primarily reflecting the 75-basis point aggregate decline in the federal funds rate during the last 4 months of 2025. Interest income on securities increased during the third quarter and first 9 months of 2026 compared to the prior year periods, reflecting growth in the securities portfolio and a higher yield. The growth and higher yield reflect the acquisition of Eastern Michigan, along with ongoing portfolio expansion and the reinvestment of matured lower yielding investments at Mercantile Bank. Average balances were up $284 million and the average yield increased 53 basis points quarter over quarter. Interest income on other interest earning assets a large portion of which is comprised of funds on deposit with the Federal Reserve Bank of Chicago, declined during the third quarter of 2026 compared to the third quarter of 2025, but increased during the first 9 months of 2026 compared to the same time period in 2025. The average yield decreased 67 basis points quarter over quarter and 75 basis points year to date over year to date largely depicting the 75-basis point decrease in the fed funds rate during the last 4 months of 2025. The average balance was $9 million lower in the third quarter 2026 compared to the third quarter of 2025, was $110 million higher during the first 9 months of 2026 compared to the first 9 months of 2025. In total, interest income was $4.6 million and $14.5 million higher during the third quarter and first 9 months of 2026 compared to the respective prior year periods. Interest expense on deposits decreased during the third quarter and first 9 months of 2026 compared to the prior year periods, reflecting a lower cost of deposits that more than offset interest bearing deposit growth. The growth in interest bearing deposit balances and the lower cost of these funds reflected the acquisition of Eastern Michigan, along with growth and lower deposit costs at Mercantile Bank. Costs of interest bearing deposits at both banks were positively impacted by the decline in the fed funds rate in the latter part of 2025. Average interest bearing deposits totaled $4 billion during the third quarter 2026, compared to $3.61 billion during the third quarter of 2025, an increase of $389 million. The cost of all deposits was down 51 basis points during the third quarter of 2026 compared to the third quarter of 2025, and down 49 basis points during the first 9 months of 2026 compared to the same time period in 2025. Interest expense on Federal Home Loan Bank of Indian Indianapolis advances declined during the third quarter and first 9 months of 2026 compared to the prior periods largely reflecting a lower average balance that more than offset a higher average cost. Interest expense on other borrowed funds increased during the third quarter and first 9 months of 2026 compared to their prior year periods, largely reflecting the impact of a term loan we obtained in late 2025 to assist in the cash portion of the Eastern Michigan acquisition. In total, interest expense was $4.3 million and $9.6 million lower during the third quarter and first 9 months of 2026 compared to the prior year periods. Net interest income increased $8.9 million and $24 million during the third quarter and first 9 months of 2026, respectively, compared to the prior year periods primarily reflecting growth in earning assets and a higher net interest margin. Average earning assets totaled $6.52 billion during the third quarter of 2026, compared to $5.94 billion during the third quarter of 2025, an increase of $575 million. Average assets increased $664 million during the first 9 months of 2026 compared to the same time period in 2025. The growth in average earning assets during both time periods largely reflects the acquisition of Eastern Michigan at year end 2025 along with loan and investment growth at Mercantile Bank. The net interest margin was 3.73% during the third quarter of 2026, compared to 3.49% during the third quarter of 2025 and was 3.62% during the first 9 months of 2026 compared to 3.48% during the first 9 months of 2025. The improvement during both time periods is largely due to the Eastern Michigan acquisition. The yield on earning assets declined 22 basis points and 29 basis points during the third quarter and first 9 months of 2026 respectively, while the cost of funds declined 46 basis points and 43 basis points during the same 2026 time periods. We recorded provisions for credit losses of $700 thousand and negative $2.9 million for the third quarter and first 9 months of 2026, respectively. The third quarter provision expense mainly reflected a net increase of $1.7 million in specific allocations and an increase of $600 thousand associated with net loan growth, which was partially offset by a $1.5 million reduction resulting from faster prepayment speeds on the residential mortgage loan portfolio. The reserve balance increased $1 million during the third quarter of 2026 reflecting the $700 thousand provision expense and net loan recoveries of $300 thousand The reserve balance equaled 1.14% of total loans as of 09/30/2026, our sustained strength and loan quality metrics continues to be impactful to our loan loss reserve calculations. The baseline allowance largely determined from historical net loan charge off activity, represents only 1/3 of our current reserve balance, reflecting a low level of net loan charge off activity during our look back period from the beginning of 2011 through the end of the third quarter of 2026. Specific reserve allocations totaled just $2.6 million or about 5% of the reserve balance as of September 30. Noninterest expenses were $8.8 million and $25.8 million higher during the third quarter and first 9 months of 2026 respectively, compared to the prior year periods. Excluding onetime costs associated with the ongoing core and digital banking system conversion, and year end 2025 acquisition of Eastern Michigan, that aggregated $600 thousand and $4.4 million during the third quarter and first 9 months of 2026, respectively, and $600 thousand during both the third quarter and first 9 months of 2025, noninterest expenses increased $8.8 million and $21.9 million compared to the prior year periods. Eastern Michigan Bank's noninterest expenses totaled $4.1 million and $12.1 million during the third quarter and first 9 months of 2026, respectively. The increase in core operating costs largely reflects higher salary and benefit costs. Including expenses associated with personnel investments in Southeast Michigan and incentive accruals related to the ongoing core and digital banking system conversion and the integration of Eastern Michigan Bank. The remaining growth generally depicts inflation impacts and a larger balance sheet. Federal income tax expense was $1.2 million, $3.2 million higher during the third quarter and first 9 months of 2026, respectively, compared to the prior year periods, largely reflecting a higher level of pretax net income and a lower level of net benefits from transferable energy tax credits. The effective tax rate was 16.8% during both the third quarter first 9 months of 2026, compared to 13.4%, 14.9% during the respective time periods in 2025. The 2025 periods had higher levels of transferable energy tax credit activity given carryback opportunities. Additional acquisitions of Transferable Energy tax credits may be made from time to time subject to our investment policy, tax credit availability, and tax credits derived from our low income housing and historical tax credit activities. Both Mercantile and Eastern Michigan Bank have strong and well capitalized regulatory capital positions. Mercantile Bank's total risk based capital ratio was 13.4% at September 30, $200 million above the minimum threshold to be categorized as well capitalized. Eastern Michigan Bank's total risk based capital ratio was 23.9% as of September 30, $39 million above the minimum threshold to be categorized as well capitalized. We did not repurchase shares during the third quarter of 2026. We have $6.8 million available in our current repurchase plans. Regard to the fourth quarter, on Slide 27 of the investor presentation, we share our latest assumptions on the interest rate environment, and key performance metrics for the fourth quarter with the caveat that market conditions remain volatile making forecasting difficult. The forecast is predicated on no changes in the federal funds rate during the quarter, although we believe our net interest margin will remain relatively stable in a changing interest rate environment. We are projecting net loan growth in a range of 5% to 7% annualized which encompasses a strong commercial loan pipeline as well as expected commercial loan payoffs. We are forecasting a higher net interest margin during the quarter as we benefit from commercial loan growth lower levels of monies at the Federal Reserve Bank of Chicago, and maturing low yielding fixed rate commercial real estate loans and investments. We are projecting a federal tax rate of approximately 17% which encompasses continued growth in net benefits from our low income and historical tax credit activities along with additional transferable energy tax credit investments. Expected quarterly results for noninterest income and noninterest expense are also provided for your reference. Noninterest expense projections reflect ongoing personnel investments made in Southeast Michigan as well as to support operational areas as we switch core and digital banking providers to enhance the durability efficiency, and experience for our customers and employees. Non recurring costs associated with the core and digital banking system conversion, are not included. 1 time expenses associated with the recent personnel investments in Southeast Michigan and incentive accruals related to the ongoing core and digital banking system conversion and the integration of Eastern Michigan Bank totaled $2.4 million during the third quarter of 2 thousand 26. These costs are projected to aggregate $1.2 million during the fourth quarter of 2026, and $700 thousand during the first quarter of 2 thousand 27. Starting 04/01/2027, we project a $600 thousand quarterly reduction our data processing and statement processing costs. In closing, we are very pleased with our operating results during the third quarter and first 9 months of 2026. Continued strong financial condition, and believe we remain well positioned to successfully navigate through the myriad of challenges and uncertainties faced by all financial institutions. That concludes my remarks. I will now turn the call back to Raymond. Raymond E. Reitsma: Thank you, Chuck. That concludes the prepared comments from management. We will now move to the question-and-answer portion of the call. Operator: We will now begin the question and answer session. To ask a question, you may press star then 1 on your touch tone phone. If you are using a speakerphone, please pick up your handset before pressing the keys. To withdraw your question, please press star then 1 again. At this time, we will pause momentarily to assemble our roster. Your first question comes from the line of Brendan Nosal with Hovde Group. Your line is open. Please go ahead. A reminder that if you are muted locally to unmute your device. Your next question comes from the line of Nathan Race with Piper Sandler. Your line is open. Please go ahead. Nathan Race: Hey, guys. Good morning. Thanks for taking the questions. Raymond E. Reitsma: Hi, Nathan. Morning. Good morning. Hey. Nathan Race: Hey, Chuck. I was hoping to just start on the margin outlook. I appreciate the guide for 4Q. But as you look out to next year, I think in your comments, you alluded to you know, 25 basis points of rate cuts to the extent they occur next year, should be pretty margin neutral. I am just curious underpinning that, are you expecting pretty similar betas on both loans and deposits just perhaps given that some of the strong deposit growth you guys have generated over the last several quarters is maybe coming from some higher from some clients that maybe demand more around rate hikes or just any thoughts on just kind of deposit loan expectations in the next year? Charles E. Christmas: Yeah. Nathan, great question. I think, you know, what we look at is the asset side is pretty easy to model out when you are looking at rate changes. it is-- it is obviously the non maturing deposits, which is the tricky part. In trying to understand what the betas are going to look like. And I think those. Quite frankly, I think those change over time, and I think the attitudes change. A lot in regard to how aggressive or nonaggressive the Fed is. If they kind of do a drip, say, 25 basis points, these are all examples, you know, each quarter. I do not think they are. The depositors and the markets are as sensitive to changing rate. But if the Fed gets aggressive, maybe 2 changes, you know, 2 increases a quarter or maybe throwing a 50-basis point out there. I just think it makes more attention. And I do think it has an impact on the betas. So that is that is 1 of those things that just is impossible to really model accurately. You know, we. You know, I think there is really 2 areas that we have seen most of the deposit growth, and this is obviously excluding the Eastern Michigan deposit portfolio that came over, which is fantastic. Both in cost as well as durability. Non interest bearing check accounts, which is primarily related to you know, continued expansion of the commercial loan portfolio. Including those that maybe get a line of credit, but are generally net depositors. The bank obviously love those. And then the money market accounts, you know, I would certainly would agree with the spirit of your question that the, you know, the rates on money market accounts are probably going to be the most sensitive and certainly the most, immediate. That we have out there. We do have a product where some of our bigger customers are actually. Their rate is tied to the Fed funds rate. So those do immediately reprice. So those are pretty easy to model. But our money market product is tiered, based on balance and, obviously, different rates for different balances. I will say that the, at least in the first increase here in September, changes that we actually made were a little bit less than what we had baked out, so a little bit of a benefit to the margin there. But it is early yet. You know, everybody's trying to dissect within our markets of what is going on and, you know, looking at their own balance sheet. So it is a very dynamic Hopefully, we can, our betas. Our actual betas are going to be less than what we modeled. But it is way too early to tell and I. Actually, I think it is subject to ongoing change anyways. But on an overall basis, you know, the way we model it out, the way that we balance have managed our balance sheet. You know, this is certainly our goal and our expectation that, you know, certainly over several quarters, that our margin would remain relatively stable. Maybe a small increase we do show in our results a model of a slight increase, in our margin if rates do go up. But on an overall basis, we are trying to be agnostic to rate changes. We cannot control interest rates. Nobody can predict interest rates. So our goal is to make, I will not say bulletproof, but make ourselves very durable in any changing interest rate environment. And not having to hope because obviously that is not a good strategy for long term. In regards to our margin. Hopefully, that helps you, Nathan. Nathan Race: Yeah. Absolutely. that is really helpful. Thanks, Chuck. And maybe a larger, broader question for Ray. You know, just thinking about operating leverage for next year. You know, I think the last couple of years, there is been some substantial investments, you know, on the personnel side, particularly on deposit gathering, and you have obviously had success kinda getting the loan deposit ratio, you know, well below where it is been historically. So just curious if you think about, you know, kind of investments in personnel or additional production hires do you see additional opportunities on the rise? Or do you think 2027 is gonna be more of a year of kinda just realizing some of the investments that you have made and just generating overall more positive operating leverage into 2027. Raymond E. Reitsma: Yeah. it is. that is a great question as well. And we are always trying to balance the investment with the anticipated return. But when there is what you might call a high level of disruption, there is quite a bit of opportunity both to hire people and to add new customers. So we have added a number of experienced commercial bankers around the corporation in the last quarter. Really outstanding talent from the super regional and national banks that we compete with. We hired our succession leadership person for our treasury management group, and we have a 1-year transition where both of those people are on the staff lots of support people around the growth, including credit and risk management and the like. So your assessment is correct. And we could slow down and reap more than if we continue to invest. But for the long haul, if the opportunities are there to add people that we think will really do a great job for us, we will continue to invest. So it remains to be seen a little bit, We are very pleased with the level of success that we have had in adding talent to the bank. And when we are convinced of its long term positive effect, we will continue to do that. Nathan Race: Okay. Brett. And maybe 1 last 1 just for Chuck just to maybe put a finer point around what we can kind of think about a range for expenses for next year. You know, I appreciate the guide for, you know, $600 thousand of cost coming out in Q2 of next year. But, you know, just overall, just given that there could still be some opportunistic hires any thoughts on just overall expense growth next year? Any particular guideposts that you could point us toward Charles E. Christmas: I guess my general thought is that budgeting for overhead is going to be difficult for next year. And to be honest, we are just in the initial stages of that. Obviously, working through the quarter end here. We will get busy, you know, putting the budget together, obviously, give guidance in January for 2027. I am hesitant to give too much out there. You know, obviously, have merit increases, and promotions and those types of things that will, you know, result in increased salary and benefit expense. You know, obviously, we are a service company. that is our. 1 of our biggest expenses on the on the income statement besides interest expense and federal income tax expense. You know, kind of echoing what Raymond was saying is, like, you know, we wanna continue to be very opportunistic. You know, based on what we have seen so far, you know, I would say late last year into this year. I mean, what is going on in the markets, we certainly see an opportunity to be opportunistic, but, obviously, it is all about the people and finding them. And certainly would be happy to bring them on if it if it makes sense. I would say from a real estate standpoint, you know, we are making in our we have been making some investments in real estate. And continue to do so, especially in Southeast Michigan as we build out that market. I would say the actual costs are going to be somewhat limited in 2027. Maybe in the back half. As whether we do some new construction or maybe buy an existing or lease an existing facility that needs some build out that is going to take a few quarters to get done. So might see some investments on the balance sheet, but I do not think the expenses will be very much. If any, maybe in the fourth quarter of next year. And then just kind of the-- you know, everything else that is, you know, in the cost of running a bank. But I think, you know, certainly our biggest expense is the 1 that at this point is somewhat of an unknown given some opportunities that may be presented between now and the end of next year? But, definitely, we will, you know, be happy to give guidance in January when, you know, we have completed our budget process and gone through that thoughtful considerations. Nathan Race: For sure. Okay. Got it. I appreciate the color, guys. I will step back. Raymond E. Reitsma: Thanks. Thank you. Thanks, Brendan. Operator: Your next question comes from the line of Brendan Nosal With Hovde Group. Your line is open. Please go ahead. Brendan Nosal: Hey. Good morning, folks. Can you hear me now? Raymond E. Reitsma: Yes. We can. Brendan Nosal: Alright. Sorry about that. Apologies. Chuck, just to kind of circle back to maybe the balance of liquidity. You noted in your prepared remarks that part of next quarter's margin expansion would come from holding less cash at the Fed. Can you just help us with kind of where you see the average cash balance coming in, in the fourth quarter versus this quarter's level of like $425 million. Charles E. Christmas: I think we are, you know, we are hopeful to see that go down quite frankly. And, you know, obviously, will help the margin. I would say it is going to be a little bit lower than that, based on what we see and what our expect going forward. But I would say it is probably going to be still in the upper 300s. For the fourth quarter on an average basis. Brendan down during the quarter, but starting from a pretty high point. Yeah. Brendan Nosal: Okay. Okay. that is helpful. Maybe kind of digging into Southeast Michigan. A little bit more. Could you just kind of give us more of like a full play-by-play on where are you started, you know, where you are today, and then what you are still hoping to accomplish down in that market in terms of personnel additions And then any thoughts on kind of timelines to get that group additive to the bottom line? Raymond E. Reitsma: Yeah. Appreciate that question. it is it is a very difficult thing to predict exactly when we will be able to make talent acquisitions in the market. But we are very happy with the volume and the quality of the discussions that we have right now to add people to the team in addition to the ones we have already added. We had a fairly small number of commercial people in this Southeast Michigan say, 2 years ago. And we have ramped that team up to, you know, a good half-dozen commercial callers in that market. Now and expect that number to continue to increase over the next year. The pace of which is almost impossible to predict. But, again, we feel very good about the discussions that we have ongoing, the quality of those, and you know, the probability of success. But to quantify that as a nearly impossible task. Brendan Nosal: Yeah. That. that is fair, but it is still helpful to kind of hear where you started and where you are now. Okay. Brett. Thank you for taking my questions. You bet. Operator: Your next question comes from the line of Damon DelMonte with KBW. Your line is open. Please go ahead. Damon DelMonte: Hey. Good morning, guys. Hope you are all doing well. Thanks for taking my questions. So first 1, just on the outlook for the non interest income, obviously, a step down here from the third quarter. So I am just wondering if you could give a little bit more granularity on that. Is that kind of reflective of a more challenging mortgage banking backdrop, or is it maybe more from, like, swap fee income or any color on that would be great. Charles E. Christmas: Well, I think you hit both items. But, I think from a mortgage standpoint, I think it is more than anything else. We are actually, you know, very pleased with our mortgage group. If you look at our production, in a very tough environment, it is actually been going up. And, so incredible work by the entire team and as we continue to gain. You know, we look at that as gaining market share. In, again, a very tough environment. So I think that there is a decline in expected mortgage banking income, but I think it has more to. Yeah. I know it has far as projections go, it has more to do just with the seasonality and the set on of snow starting to fall here relatively soon. And I think we had a solid swap quarter and third quarter. Would like to duplicate that. Not sure we are going to get there. I think as rates have popped up and the market has been you know, pricing in additional rate cuts, it has certainly had a, you know, a noticeable impact on you know, 5, 7 year rates, you know, in the swap market. So it appears that our customers are a little more hesitant than they have been say, typically in the past to get into the swaps. But, you know, if they want a fixed rate, it is obviously a product that we can offer them. That will give them their desired fixed rate. But, again, that is that is 1 of those things that is also very difficult to predict. Not understanding what is going on in the marketplace, but just from timing as we were making commercial term loans and from quarter to quarter, you know, there is some lumpiness in there. But it is. You are spot on. it is those 2 items that are causing the expected reduction in the fourth quarter versus the third quarter. Damon DelMonte: Got it. Okay. And then with regards to the 5% to 7% loan growth here in fourth quarter, Do you guys feel like the bulk of the payoff activity that you have been dealing with is kind of like peaked and it is subsiding now. I guess, do you have a good visibility on that at this point of the quarter? Raymond E. Reitsma: So this is Raymond. To answer that question, I think you have to break down what some of those payoff, components are. You know, when there is a sale of a company or an asset, there is a really nice visibility to that, and we can predict what is going to happen in a quarter fairly accurately. The 1 that is very difficult to predict is the pay downs come from excess cash flow, and those have ramped up quite a bit in the quarter that we just completed. So if that continues to be true, that will be the toughest 1 to nail down. We feel good about our backlog. You can see it is at a 5-quarter high. And so the level of originations we are very comfortable with. The asset sale piece of it is I would call, moderate compared to recent experience. So the variable that will be toughest to define and will surprise us the most between here and the end of the year is what happens with excess cash flow generation. Damon DelMonte: Okay. that is great color. Thank you. And then just 1 last quick 1. Chuck, do you happen to have the spot margin for September 30? Charles E. Christmas: Oh, the spot margin for September 30. I can give you what it was in September. How's that? So Okay. Damon DelMonte: Fair enough. Charles E. Christmas: It was 3.74%. Damon DelMonte: Okay. Brett. that is all that I had. Charles E. Christmas: But I would make the comment that it, would have been higher as of September 30. Damon DelMonte: Got it. Okay. Understood. Thanks a lot. Appreciate it. Operator: Your next question comes from the line of Matthew Breese with Stephens Inc. Your line is open. Please go ahead. Matthew Breese: Hey. Good morning. Raymond E. Reitsma: Morning. Matthew Breese: Yeah. I hear you loud and clear on some of the loan growth components. I guess my question is just given some of-- given the pipeline and payoff dynamics, if you think the projected level of loan growth in 4Q spills, into 2027, and whether you expect deposit growth to continue to outpace loan growth near term. Raymond E. Reitsma: Yeah. I think, you know, those originations will come to rest at some point. So I guess the answer of will it spill I would anticipate that it would. I think deposit growth should roughly parallel loan growth And that would be the desired outcome. Charles E. Christmas: Yeah. The 1 caveat there is what the public unit deposits, which obviously is seasonal for all banks. You know, we get some really solid inflows. With tax collections here in Michigan. In the third quarter, we see some of. We. That. Some of the outflow already took place in September. But that will continue in October, November. But even excluding that, the deposit growth that we have had, you know, so far in 2026, is really strong growth in regards to business. And the pipeline on the deposit growth for businesses to Raymond's point, is, I would say, general, it is just as strong as the loan pipeline. Yep. Matthew Breese: Okay. And then maybe just touch on securities. Securities portfolio yields are still pretty far off from current market rates. Can you help me out with near term kind of cash flows on the securities portfolio and when we might see a more kind of significant shrinking of the gap between current yields and yields on the book. Charles E. Christmas: Yeah. I would say on an overall basis, our duration of our portfolio is about 4 years. And we stick and have always stuck to a laddered maturity approach. Now there is a lot of calls in there. And we definitely have set up the securities portfolio over the last few years. To predict this to protect us, excuse me, in a significant down rate environment. Of, you know, buying very discounted agency bonds, say, you know, between 85 and 95 cents on a dollar. That it would take probably 200 to 300 basis point rate reductions for those to start getting called. Which would be a good insurance policy at least for a limited time. In regards to what we would see in interest income on our commercial loan portfolio. So feel really good about that. You know? So that is the, you know, the major interest rate risk tool that we do with our securities portfolio. I would say here in the fourth quarter, and into off next year, we have got some really, solid repricing opportunities. You know, some solid dollars at low rates. And I think, on page 11 of the deck, we have that spelled out for you. You know, we have got, $16 million at an average rate of 1.5% here in the fourth quarter and another $100 million, 2.5% average rate Next year, and that is added on top of the fixed rate CRE loans that, you know, another almost $60 million this quarter and another almost $200 million next year with rates that are just under 5%. So, you know, we have been getting that benefit, you know, throughout this year, I believe, say, even last year. But definitely throughout this year. You know, clearly, rates are today, you know, every. Any bond that is gonna be maturing and any loan that is gonna be maturing is gonna be refinanced. Or renewed at a higher rate. So there is going to continue to be some head or some tails tailwind there. As long as rates stay where they are now. And, we will just. You know, from specific to the investment question you had, you know, we will let the laddered maturity approach do what it is supposed to do. And, you know, improve yields as we go forward. Matthew Breese: Okay. Last 1 for me. You know, if I look at the charge-off kind of patterns, the last couple of years have been really solid in the first 3 quarters of the year, but a little bit of a pickup in the fourth quarter. And I am curious if there is any strategy or intention to that. A lot of banks will kind of kitchen-sink or clean up stuff in the fourth quarter and whether or not that is expected to play out again this year? Charles E. Christmas: No. That is total coincidence. I mean, we work each credit you know, it seems like, we have incredibly strong ad asset quality, obviously. But, you know, like all banks, you are always kind of chasing 1 or 2 I would say, sized credits. Around on the commercial side. And it is just been total coincidence as far as when the charge off has taken place. I think if you go back a quarter or 2 quarters or 3 quarters prior to the charge off, you know, you would have seen us establishing the specific reserve and then obviously going through the collection period. And then when we get to the end of that collection period, or towards the, you know, the back half of the game, of the baseball game, you know, we are gonna take the charge once things become a little bit more finalized. So total coincidence that it. That they have taken place in the fourth quarter. Matthew Breese: Got it. I appreciate taking all my questions. I will leave it there. Thank you. Thank you. Operator: A reminder that if you would like to ask a question, you may press star then 1 on your touch tone phone. To withdraw your question, please press star then 1 again. Your next question comes from the line of Nichole Kladder with Raymond James. Your line is open. Please go ahead. Analyst: Hey. Good morning. Thanks for taking my questions. Raymond E. Reitsma: You bet. Analyst: Maybe just 1 follow-up on the on the lending environment. Obviously, sounds like you guys are seeing some pretty good growth in your pipeline, which should be encouraging for loan growth going forward. But maybe just in terms of the lay of the land, what you are hearing in terms of overall business confidence from your borrowers and their willingness to invest and expand at this point, especially given the recent rise in interest rates. If you could just give us an updated perspective on that, that would be great. Raymond E. Reitsma: Sure. I do not think confidence has changed mid materially. there is been a bit of uncertainty in the environment that been talking about for a number of years. And I think that persists but I would not say that there is been a marked decrease in willingness to invest or a decrease in optimism about the future. So I think it is it is just more of the same. Analyst: Okay. Brett. Thank you. And then, you know, obviously, you just kind of touched on credit, right before this, but know, just with the small pickup in nonperforming loans this quarter, anything to call out there? Obviously, remain at relatively low levels overall. But, if anything, the call out there, that would be great. Thank you. Raymond E. Reitsma: Yeah. I would just underscore your observation that, it is low levels. And, if we have any activity at all, it shows up as a change to a relatively low level. And so know, every once in a while, a few drops of rainfall from the sky, and that is what happens. Here. So we just continue to have similar experience where there is no systemic issues in the economy or our portfolio. Just from time to time, there is a management failure or a particular company becomes under a unique bit of stress that leads to those kinds of recognitions in our loan quality metrics. Analyst: Makes sense to me. Thank you very much. Raymond E. Reitsma: You are welcome. Operator: This concludes our question and answer session. I would like to turn the conference call over to Raymond Reitsma for any closing remarks. Raymond E. Reitsma: I would just like to thank you for your participation in today's call and for your interest in Mercantile Bank Corporation, and this concludes the call. Thank you. Operator: The conference has now concluded. Thank you for attending today's presentation. You may now disconnect. 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This article is a transcript of this conference call produced for The Motley Fool. While we strive for our Foolish Best, there may be errors, omissions, or inaccuracies in this transcript. As with all our articles, The Motley Fool does not assume any responsibility for your use of this content, and we strongly encourage you to do your own research, including listening to the call yourself and reading the company's SEC filings. Please see our Terms and Conditions for additional details, including our Obligatory Capitalized Disclaimers of Liability. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. Mercantile Bank (MBWM) Q3 2026 Earnings Call Transcript was originally published by The Motley Fool

Wall Street expects a year-over-year increase in earnings on higher revenues when Old National Bancorp (ONB) reports results for the quarter ended September 2026. While this widely-known consensus outlook is important in gauging the company's earnings picture, a powerful factor that could impact its near-term stock price is how the actual results compare to these estimates. The stock might move higher if these key numbers top expectations in the upcoming earnings report, which is expected to be released on October 21. On the other hand, if they miss, the stock may move lower. While the sustainability of the immediate price change and future earnings expectations will mostly depend on management's discussion of business conditions on the earnings call, it's worth handicapping the probability of a positive EPS surprise. This holding company for Old National Bank is expected to post quarterly earnings of $0.66 per share in its upcoming report, which represents a year-over-year change of +11.9%. Revenues are expected to be $735.94 million, up 3.2% from the year-ago quarter. The consensus EPS estimate for the quarter has been revised 0.32% lower over the last 30 days to the current level. This is essentially a reflection of how the covering analysts have collectively reassessed their initial estimates over this period. Investors should keep in mind that the direction of estimate revisions by each of the covering analysts may not always get reflected in the aggregate change. Price, Consensus and EPS Surprise Estimate revisions ahead of a company's earnings release offer clues to the business conditions for the period whose results are coming out. Our proprietary surprise prediction model -- the Zacks Earnings ESP (Expected Surprise Prediction) -- has this insight at its core. The Zacks Earnings ESP compares the Most Accurate Estimate to the Zacks Consensus Estimate for the quarter; the Most Accurate Estimate is a more recent version of the Zacks Consensus EPS estimate. The idea here is that analysts revising their estimates right before an earnings release have the latest information, which could potentially be more accurate than what they and others contributing to the consensus had predicted earlier. Thus, a positive or negative Earnings ESP reading theoretically indicates the likely deviation of the actual earnings from the consensus estimate. However, the model's predictive power is significant for positive ESP readings only. A positive Earnings ESP is a strong predictor of an earnings beat, particularly when combined with a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold). Our research shows that stocks with this combination produce a positive surprise nearly 70% of the time, and a solid Zacks Rank actually increases the predictive power of Earnings ESP. Please note that a negative Earnings ESP reading is not indicative of an earnings miss. Our research shows that it is difficult to predict an earnings beat with any degree of confidence for stocks with negative Earnings ESP readings and/or Zacks Rank of 4 (Sell) or 5 (Strong Sell). For Old National Bancorp, the Most Accurate Estimate is the same as the Zacks Consensus Estimate, suggesting that there are no recent analyst views which differ from what have been considered to derive the consensus estimate. This has resulted in an Earnings ESP of 0%. On the other hand, the stock currently carries a Zacks Rank of #2. So, this combination makes it difficult to conclusively predict that Old National Bancorp will beat the consensus EPS estimate. While calculating estimates for a company's future earnings, analysts often consider to what extent it has been able to match past consensus estimates. So, it's worth taking a look at the surprise history for gauging its influence on the upcoming number. For the last reported quarter, it was expected that Old National Bancorp would post earnings of $0.62 per share when it actually produced earnings of $0.65, delivering a surprise of +4.84%. Over the last four quarters, the company has beaten consensus EPS estimates four times. An earnings beat or miss may not be the sole basis for a stock moving higher or lower. Many stocks end up losing ground despite an earnings beat due to other factors that disappoint investors. Similarly, unforeseen catalysts help a number of stocks gain despite an earnings miss. That said, betting on stocks that are expected to beat earnings expectations does increase the odds of success. This is why it's worth checking a company's Earnings ESP and Zacks Rank ahead of its quarterly release. Make sure to utilize our Earnings ESP Filter to uncover the best stocks to buy or sell before they've reported. Old National Bancorp doesn't appear a compelling earnings-beat candidate. However, investors should pay attention to other factors too for betting on this stock or staying away from it ahead of its earnings release. Among the stocks in the Zacks Banks - Midwest industry, Mercantile Bank (MBWM), is soon expected to post earnings of $1.35 per share for the quarter ended September 2026. This estimate indicates a year-over-year change of -7.5%. This quarter's revenue is expected to be $70.58 million, up 13.1% from the year-ago quarter. Over the last 30 days, the consensus EPS estimate for Mercantile Bank has been revised 0.1% down to the current level. Nevertheless, the company now has an Earnings ESP of -1.12%, reflecting a lower Most Accurate Estimate. This Earnings ESP, combined with its Zacks Rank #3 (Hold), makes it difficult to conclusively predict that Mercantile Bank will beat the consensus EPS estimate. The company beat consensus EPS estimates in each of the trailing four quarters. Stay on top of upcoming earnings announcements with the Zacks Earnings Calendar. Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Old National Bancorp (ONB) : Free Stock Analysis Report Mercantile Bank Corporation (MBWM) : Free Stock Analysis Report This article originally published on Zacks Investment Research (zacks.com). Zacks Investment Research