MBWM

Mercantile Bank Corporation recently reported past second-quarter 2026 results showing higher net interest income of US$57.26 million and net income of US$25.93 million, alongside basic and diluted earnings per share of US$1.50 from continuing operations, all up from the same period a year earlier. Alongside this earnings improvement, the bank also declared a quarterly dividend of US$0.40 per share, signaling confidence in its ability to return more cash to shareholders while maintaining operational strength. Next, we’ll examine how this earnings growth and higher dividend fit into Mercantile Bank’s longer-term investment narrative and risk profile. The best AI stocks today may lie beyond giants like Nvidia and Microsoft. Find the next big opportunity with these 16 smaller AI-focused companies with strong growth potential through early-stage innovation in machine learning, automation, and data intelligence that could fund your retirement. To own Mercantile Bank, you need to believe it can keep translating disciplined lending, digital investment and regional expansion into resilient earnings and a sustainable dividend. The latest quarter’s higher net interest income and profit support that narrative, but the key near term catalyst remains execution on its digital and core banking upgrade, while the main risk is that any stumble in credit quality or integration efforts could pressure margins and returns; this news does not materially change that balance. The most relevant update here is the increased quarterly dividend of US$0.40 per share, which sits alongside rising earnings. For investors watching catalysts, a progressively higher dividend supported by high quality earnings can reinforce confidence in the bank’s ability to fund digital initiatives and potential market expansion while still returning cash, even as the relatively new board and ongoing systems transition keep execution risk in focus. Yet even with higher earnings and a bigger dividend, investors should be aware that the real test will come if credit quality or the core system transition were to... Read the full narrative on Mercantile Bank (it's free!) Mercantile Bank's narrative projects $332.2 million revenue and $108.9 million earnings by 2029. This requires 9.5% yearly revenue growth and an earnings increase of about $17 million from $91.9 million today. Uncover how Mercantile Bank's forecasts yield a $59.33 fair value, in line with its current price. The single fair value estimate from the Simply Wall St Community sits at US$59.33, highlighting how even one private view can differ from market pricing. You can weigh that against the current focus on digital transformation as a key catalyst and consider how execution on that shift might influence your own expectations for Mercantile Bank’s performance over time. Explore another fair value estimate on Mercantile Bank - why the stock might be worth as much as $59.33! Disagree with existing narratives? Extraordinary investment returns rarely come from following the herd, so go with your instincts. A great starting point for your Mercantile Bank research is our analysis highlighting 4 key rewards that could impact your investment decision. Our free Mercantile Bank research report provides a comprehensive fundamental analysis summarized in a single visual - the Snowflake - making it easy to evaluate Mercantile Bank's overall financial health at a glance. The market won't wait. These fast-moving stocks are hot now. Grab the list before they run: Invest in the nuclear renaissance through our list of 90 elite nuclear energy infrastructure plays powering the global AI revolution. Capitalize on the AI infrastructure supercycle with our selection of the 56 best 'picks and shovels' of the AI gold rush converting record-breaking demand into massive cash flow. This technology could replace computers: discover 25 stocks that are working to make quantum computing a reality. 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]

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. Management attributes top-quartile ROA performance to a durable net interest margin, which expanded by 11 basis points over five quarters despite a 71-basis-point drop in the SOFR 90-day average. The acquisition of Eastern Michigan on 12/31/2025 is cited as a primary driver for improved on-balance sheet liquidity, lowering the loan-to-deposit ratio to 93% from 110% in late 2023. Performance was bolstered by a 35% increase in treasury management service charges, driven by a strategic focus on commercial deposit relationships and C&I loan growth. Asset quality remains a core pillar of the narrative, with nonperforming assets at just 9 basis points of total assets, which management credits to long-standing underwriting discipline. Operational expenses increased primarily due to strategic investments in the Southeast Michigan market and a core banking system conversion aimed at long-term efficiency. Management refutes the notion of high asset sensitivity, explaining that match funding of assets and liabilities has successfully insulated the margin from interest rate volatility. Loan growth is projected to remain in the mid-single-digit range for 2026, supported by a strong commercial pipeline and an expected moderation in loan payoffs. Net interest margin is forecasted to improve in the second half of 2026 as the bank redeploys excess cash from the Federal Reserve into higher-yielding commercial loans. Management assumes no changes in the federal funds rate for the remainder of 2026 but maintains that the balance sheet is positioned to remain 'agnostic' to rate shifts. The core and digital banking system conversion is scheduled for February 2027, with significant contract-level cost savings expected to begin in the second quarter of 2027. The bank expects to exit the brokered CD market by the end of 2026, relying on local deposit growth and the Eastern Michigan integration to replace higher-cost funding. Adjusted earnings exclude $600,000 in nonrecurring costs during Q2 related to the Eastern Michigan acquisition and the ongoing core system conversion. A negative provision for credit losses of $1.8 million was recorded, primarily reflecting the resolution of a specific nonperforming commercial construction loan. The effective tax rate increased to 16.9% due to higher pretax income and a lower level of transferable energy tax credit benefits compared to the prior year. Management highlighted a $1.4 million decrease in the reserve for unfunded loan commitments, resulting from a high volume of commercial loan fundings during the quarter. One stock. Nvidia-level potential. 30M+ investors trust Moby to find it first. Get the pick. Tap here. Management explained they are intentionally overstaffed in operational areas to ensure a smooth core system conversion and comprehensive employee training. The Southeast Michigan expansion is a major growth driver, with recent hires in commercial and treasury roles already contributing net growth that offsets payoffs in other markets. Management expects the reserve-to-loan ratio to stabilize in the mid-1.10% range, assuming a steady economic environment. They noted that the CECL model's focus on duration makes it difficult to build higher reserves for commercial loans, which typically have shorter contractual lives of around two years. Subordinated notes become callable and flip to a floating rate in January 2027; management is comfortable letting them float for at least a year given the favorable spread. Share repurchases remain an option, but the current priority is maintaining high capital ratios to fund organic loan growth and potential future acquisitions. Confidence in moderating payoffs stems from direct communication with borrowers who have indicated a slowdown in refinancing or exit activities. Management noted that while they cannot guarantee borrower behavior, the 'spate of payoffs' seen over the last four quarters appears to be subsiding.

Find your next quality investment with Simply Wall St's easy and powerful screener, trusted by over 7 million individual investors worldwide. Mercantile Bank (MBWM) shares are in focus after the company reported second quarter and first half 2026 results, with higher net interest income and net income compared with the same periods last year. See our latest analysis for Mercantile Bank. The latest earnings report appears to have been well received, with Mercantile Bank’s share price up 3.50% on the day and a 30 day share price return of 11.03%. Momentum looks strong in the context of a 25.35% year to date share price return and a 5 year total shareholder return of 127.88%, which points to investors gradually reassessing both growth prospects and risk around the stock. If Mercantile Bank’s recent move has you thinking about what else is working in financials, this could be a good moment to broaden your search with 18 top founder-led companies After this strong run and with Mercantile Bank trading only slightly below the latest analyst price target, the key issue now is whether most of the easy upside has already played out or if the current valuation still leaves meaningful room ahead. Mercantile Bank is trading at $59.68 against a narrative fair value of $59.33, so the current share price is slightly above that estimate. Read the complete narrative. Curious what kind of revenue path and margin profile could underpin that fair value, and how a higher future P/E fits into the story? The most followed narrative leans heavily on a specific growth glide path, a detailed earnings bridge and assumptions about how investors might price the stock a few years from now. Result: Fair Value of $59.33 (OVERVALUED) Have a read of the narrative in full and understand what's behind the forecasts. However, Mercantile Bank’s story could still shift if planned digital upgrades deliver meaningful cost savings, or if the Eastern Michigan Bank partnership scales faster than expected. Find out about the key risks to this Mercantile Bank narrative. The fair value narrative suggests Mercantile Bank is slightly overvalued at $59.68 versus a $59.33 estimate, yet the current P/E of 10.8x screens as good value against a fair ratio of 11.4x, the US Banks industry on 12.3x and peers at 13.8x. Is the risk that the market has already closed most of that valuation gap, or that it could still move closer to those higher reference points? See what the numbers say about this price — find out in our valuation breakdown. The overall tone around Mercantile Bank is constructive, but the real edge comes from testing the numbers yourself and challenging the current narratives. If you want a quick way to see what the optimism is built on, start by reviewing the 5 key rewards. If Mercantile Bank has sharpened your focus, do not stop here. Widen your opportunity set with a few targeted ways to source fresh stocks. Start with quality by hunting for companies that pair prudent leverage with dependable fundamentals through the solid balance sheet and fundamentals stocks screener (48 results). Target price dislocations by scanning for stocks where fundamentals and current pricing look out of sync using the 50 high quality undervalued stocks. Prioritize resilience by reviewing companies that score well on stability with the 81 resilient stocks with low risk scores. 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]

Interested in Mercantile Bank Corporation? Here are five stocks we like better. Mercantile Bank reported higher Q2 2026 profit, with net income of $25.9 million, or $1.50 per diluted share, up from $22.6 million a year earlier. Adjusted earnings were also stronger after excluding acquisition and system-conversion costs. Net interest income rose as the Eastern Michigan acquisition boosted earning assets and helped lift the net interest margin to 3.59% from 3.48% a year ago. Management expects margin to stay relatively stable and improve modestly in the second half of 2026. Loan and deposit trends remained solid, with commercial loan growth of $115 million in the quarter and 12.4% deposit growth over the past year. Credit quality stayed strong, with non-performing assets at just 9 basis points of total assets and the bank recording a negative provision for credit losses. Mercantile Bank (NASDAQ:MBWM) reported higher second-quarter earnings and said its year-end 2025 acquisition of Eastern Michigan contributed to stronger deposits, improved liquidity and a stable net interest margin. Executive Vice President and Chief Financial Officer Chuck Christmas said the company earned net income of $25.9 million, or $1.50 per diluted share, for the second quarter of 2026. That compared with net income of $22.6 million, or $1.39 per diluted share, in the second quarter of 2025. For the first six months of 2026, net income totaled $48.6 million, or $2.82 per diluted share, compared with $42.2 million, or $2.60 per diluted share, in the same period last year. → Buyback Boom: These 3 Companies Are Betting Billions on Their Own Stocks Excluding non-recurring costs tied to the Eastern Michigan acquisition and the company’s previously announced core and digital banking system conversion, adjusted net income was $26.4 million, or $1.53 per diluted share, in the quarter. Adjusted net income for the first half of 2026 was $51.7 million, or $2.99 per diluted share. President and Chief Executive Officer Ray Reitsma said the quarter continued to reflect the company’s “commercial expertise generating a strong return profile.” He highlighted a 1.52% return on average assets, 14% return on average equity and 10% year-over-year earnings-per-share growth in the second quarter. → Cybersecurity Stocks Are Holding Up as the AI Trade Starts to Crack Christmas said net interest income increased by $7.8 million in the second quarter and $15.1 million in the first six months of 2026 compared with the respective prior-year periods. The increase primarily reflected growth in earning assets and a higher net interest margin. Average earning assets totaled $6.43 billion in the second quarter, up from $5.73 billion a year earlier. The net interest margin was 3.59%, compared with 3.48% in the second quarter of 2025. Christmas said the improvement was “largely due to the Eastern Michigan acquisition.” → Strait of Hormuz Tensions Spike Tanker Trade: These 2 Stocks Are Set to Benefit Reitsma said the company’s margin performance showed that Mercantile had effectively matched funding of assets and liabilities. He noted that over the last five quarters, the 90-day average SOFR rate fell 71 basis points while the company’s margin increased 11 basis points to 3.59%. Christmas said management expects a higher net interest margin in the second half of 2026 compared with the first half, citing expected commercial loan growth, lower balances at the Federal Reserve Bank of Chicago and the maturity of low-yielding fixed-rate commercial real estate loans and investments. Reitsma said commercial loan growth in the second quarter totaled $115 million, an annualized rate of 11.7%. He said loan payoffs moderated from the prior four quarters, falling by $60 million compared with the previous quarter. Commitments to make new commercial loans totaled $224 million at June 30, while commitments to fund existing commercial and residential construction loans totaled $283 million. Both were at or near five-quarter highs. The company expects loan growth for 2026 to fall within its prior guidance range of mid-single-digit percentages. Christmas later said the company is projecting annualized loan growth of 5% to 7% in each quarter for the remainder of 2026. Deposits also grew. Reitsma said deposit growth for the 12 months ended June 30 was 12.4%, with growth in non-interest-bearing accounts outpacing interest-bearing accounts. The loan-to-deposit ratio was 93% at the end of the second quarter, compared with 100% at June 30, 2025, and 110% at the end of 2023. Mercantile’s deposit mix at quarter-end included 27% non-interest-bearing deposits and 24% lower-cost deposits, up from 25% and 20%, respectively, a year earlier. Reitsma said the Eastern Michigan acquisition contributed positively to these measures. Management emphasized asset quality throughout the call. Reitsma said non-performing assets were nine basis points of total assets as of June 30, while non-performing loans to total loans had averaged 12 basis points over the last six and a half years. The allowance for credit losses stood at 1.13% of total loans and was nearly 10 times the dollar amount of non-performing loans. Christmas said Mercantile recorded negative provisions for credit losses of $1.8 million in the second quarter and $3.6 million in the first half of 2026. The second-quarter negative provision mainly reflected the elimination of a $2.7 million specific allocation after resolution of a non-performing commercial construction loan. That was partially offset by changes in the economic forecast, allocations tied to net loan growth and higher qualitative factor allocations. During the question-and-answer session, Christmas said the reserve ratio has generally been between the current 1.13% level and the low 120-basis-point range for some time. Barring a significant change in the economy, he said he would expect the coverage ratio to remain around the mid-teens to low-120s basis-point range. Reitsma said growth in commercial deposit relationships helped drive a 35% increase in service charges on accounts during the second quarter compared with the year-earlier period. Credit and debit card offerings grew 21% in the first six months of 2026 compared with the same period in 2025. Non-interest expenses rose by $6.0 million in the quarter and $17.0 million in the first half compared with the prior-year periods. Excluding one-time costs related to the core and digital banking conversion and Eastern Michigan acquisition, non-interest expenses increased by $5.4 million in the quarter and $13.1 million in the first half. Christmas said the increase in core operating costs largely reflected higher salary and benefit costs, as well as inflation and a larger balance sheet. In response to an analyst question, he said the company had been hiring aggressively in operational areas to support the core conversion and training, while also investing in Southeast Michigan commercial and treasury management personnel. Christmas said both Mercantile Bank and Eastern Michigan Bank remained well-capitalized. Mercantile Bank’s total risk-based capital ratio was 13.5% at June 30, while Eastern Michigan Bank’s ratio was 23.1%. The company did not repurchase shares during the quarter and had $6.8 million remaining under its current repurchase plan. Management’s outlook assumes no changes in the federal funds rate for the remainder of 2026, though Christmas said Mercantile expects its margin to remain relatively stable even in a changing rate environment. He said the company has used match funding and balance sheet management to reduce the impact of rate changes. In the Q&A, Christmas said Mercantile expects to exit the brokered CD market by the end of 2026, with only about $20 million remaining in two certificates of deposit that mature in December. He also said excess cash of roughly $100 million to $125 million could be redeployed into loans by early next year, if not by year-end, depending on net commercial loan growth. Reitsma said the Southeast Michigan market remains an important growth opportunity, but he added that loan originations are spread across the company’s footprint, including Grand Rapids, West Michigan, Central Michigan and Northern Michigan. Mercantile Bank Corporation (NASDAQ: MBWM) is the bank holding company for Mercantile Bank of Michigan, a full-service commercial bank headquartered in Grand Rapids, Michigan. Through its state-chartered subsidiary, the company provides a broad range of financial products and services to small and mid-sized businesses, professionals and consumers across West and Central Michigan. The bank's core offerings include deposit products such as checking, savings and money market accounts, alongside commercial and consumer loan portfolios. 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 Q2 Earnings Call Highlights" was originally published by MarketBeat. View MarketBeat's top stocks for July 2026.

Mercantile Bank (MBWM) came out with quarterly earnings of $1.53 per share, beating the Zacks Consensus Estimate of $1.34 per share. This compares to earnings of $1.39 per share a year ago. These figures are adjusted for non-recurring items. This quarterly report represents an earnings surprise of +14.18%. A quarter ago, it was expected that this holding company for Mercantile Bank of Michigan would post earnings of $1.33 per share when it actually produced earnings of $1.46, delivering a surprise of +9.77%. 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 $68.76 million for the quarter ended June 2026, missing the Zacks Consensus Estimate by 0.74%. This compares to year-ago revenues of $60.94 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 19.9% since the beginning of the year versus the S&P 500's gain of 8.7%. 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 $1.41 on $71.27 million in revenues for the coming quarter and $5.63 on $280.17 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 31% 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. Another stock from the same industry, German American Bancorp (GABC), has yet to report results for the quarter ended June 2026. This financial services holding company is expected to post quarterly earnings of $0.92 per share in its upcoming report, which represents a year-over-year change of +7%. The consensus EPS estimate for the quarter has been revised 0.4% higher over the last 30 days to the current level. German American Bancorp's revenues are expected to be $98.43 million, up 9.5% 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 German American Bancorp, Inc. (GABC) : Free Stock Analysis Report This article originally published on Zacks Investment Research (zacks.com). Zacks Investment Research

Mercantile Bank (MBWM) reported $68.76 million in revenue for the quarter ended June 2026, representing a year-over-year increase of 12.8%. EPS of $1.53 for the same period compares to $1.39 a year ago. The reported revenue represents a surprise of -0.74% over the Zacks Consensus Estimate of $69.27 million. With the consensus EPS estimate being $1.34, the EPS surprise was +14.18%. While investors closely watch year-over-year changes in headline numbers -- revenue and earnings -- and how they compare to Wall Street expectations to determine their next course of action, some key metrics always provide a better insight into a company's underlying performance. 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: 57.3% versus 56.9% estimated by three analysts on average. Net interest margin (fully tax-equivalent): 3.6% compared to the 3.6% average estimate based on three analysts. Net loan charge-offs (recoveries) to average loans: -0% compared to the 0.1% average estimate based on two analysts. Average Balances - Total earning assets (before allowance): $6.43 billion versus $6.49 billion estimated by two analysts on average. Total Noninterest Income: $11.5 million compared to the $11.82 million average estimate based on three analysts. Net Interest Income: $57.26 million versus $57.44 million estimated by three analysts on average. Payroll services: $0.85 million versus the two-analyst average estimate of $0.93 million. Interest rate swap income: $0.44 million versus $0.54 million estimated by two analysts on average. Credit and debit card income: $2.92 million versus the two-analyst average estimate of $2.61 million. Earnings on bank owned life insurance: $0.78 million versus the two-analyst average estimate of $0.69 million. Mortgage banking income: $3.19 million versus the two-analyst average estimate of $3.5 million. Other income: $0.65 million compared to the $1.05 million average estimate based on two analysts. View all Key Company Metrics for Mercantile Bank here>>> Shares of Mercantile Bank have returned +6.9% over the past month versus the Zacks S&P 500 composite's -0.6% 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

This article first appeared on GuruFocus. Net Income: $25.9 million or $1.50 per diluted share for Q2 2026, compared to $22.6 million or $1.39 per diluted share for Q2 2025. Adjusted Net Income: $26.4 million or $1.53 per diluted share for Q2 2026. Net Interest Margin: Increased by 11 basis points to 3.59% in Q2 2026. Loan-to-Deposit Ratio: 93% as of June 30, 2026, compared to 100% on June 30, 2025. Commercial Loan Growth: $115 million in Q2 2026, an annualized growth rate of 11.7%. Deposit Growth: 12.4% during the 12 months ended June 30, 2026. Net Revenue Growth: 15.3% to $136.3 million during the first six months of 2026. Return on Average Assets: 1.52% in Q2 2026. Return on Average Equity: 14% in Q2 2026. Tangible Book Value Per Share Growth: Annualized 11.6% increase in Q2 2026 compared to Q1 2026. Non-Performing Assets: 9 basis points of total assets as of June 30, 2026. Allowance for Credit Losses: 1.13% of total loans as of June 30, 2026. Service Charges Growth: 35% increase in Q2 2026 compared to Q2 2025. Credit and Debit Card Growth: 21% in the first six months of 2026 compared to the same period in 2025. Effective Tax Rate: 16.9% during Q2 2026. Warning! GuruFocus has detected 7 Warning Signs with MBWM. Is MBWM fairly valued? Test your thesis with our free DCF calculator. Release Date: July 21, 2026 For the complete transcript of the earnings call, please refer to the full earnings call transcript. Mercantile Bank Corp (NASDAQ:MBWM) reported a strong return on assets (ROA) of 1.52% and a return on equity (ROE) of 14% for the second quarter of 2026. The acquisition of Eastern Michigan contributed positively to deposit growth, with a 12.4% increase in deposits over the past year. Commercial loan growth was robust, with an annualized growth rate of 11.7% in the second quarter of 2026. Net interest margin improved to 3.59% during the second quarter of 2026, up from 3.48% in the same period of 2025. The company demonstrated strong asset quality, with non-performing assets at only 9 basis points of total assets as of June 30, 2026. Interest income on loans was relatively unchanged due to a lower yield on loans, despite loan growth. Non-interest expenses increased by $6.0 million during the second quarter of 2026 compared to the prior year, partly due to costs associated with the acquisition of Eastern Michigan. The cost of interest-bearing deposits increased, reflecting growth in interest-bearing deposit balances. The company faced challenges with significant levels of commercial loan payoffs and partial paydowns, which mitigated loan growth. Federal income tax expenses increased by $1.9 million during the second quarter of 2026 compared to the prior year, impacting net income. Q: Can you elaborate on the expense increase related to personnel investments and the core conversion in Southeast Michigan? A: Charles Christmas, CFO, explained that the costs associated with the core conversion are significant, and they have been aggressive in hiring to ensure effective training and implementation. The expansion in Southeast Michigan has been a focus, with exceptional personnel hired to support growth in that market. The additional expenses are primarily due to these strategic investments. Q: What are the expected savings post-core conversion, and when will they materialize? A: Charles Christmas noted that savings from the core conversion are expected to start in the second quarter of next year. While it's difficult to specify exact savings due to various moving parts, the core contract itself offers significant savings. However, it will take time to fully realize these savings. Q: How do you see the loan loss reserves stabilizing, and when might the loan loss provision turn positive? A: Charles Christmas mentioned that the current low level of specific reserves reflects strong loan underwriting and collateral. The reserve balance is expected to remain stable, around the current range of 1.13% to low 120s, unless significant economic changes occur. Q: Can you update us on the competitive landscape for core funding and deposit growth expectations? A: Charles Christmas stated that the competitive landscape for core funding has been stable, with no significant changes in deposit rates. They expect solid local deposit growth in the third quarter due to seasonality and strong commercial lending activities, particularly in non-interest-bearing accounts. Q: What are the main drivers for the expected net interest margin (NIM) expansion in the coming quarters? A: Charles Christmas highlighted that the NIM expansion will be driven by the repricing of fixed-rate commercial real estate loans and agency bonds, as well as the reduction of excess funds at the Federal Reserve, which will be redirected to higher-yielding loans. For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Net interest income expansion, strong commercial loan growth, and sustained strength in asset quality metrics and capital levels highlight the quarter GRAND RAPIDS, Mich., July 21, 2026 /PRNewswire/ -- Mercantile Bank Corporation (NASDAQ: MBWM) ("Mercantile") reported net income of $25.9 million, or $1.50 per diluted share, for the second quarter of 2026, compared with net income of $22.6 million, or $1.39 per diluted share, for the second quarter of 2025. Net income during the first six months of 2026 totaled $48.6 million, or $2.82 per diluted share, compared with net income of $42.2 million, or $2.60 per diluted share, during the first six months of 2025. Excluding non-recurring costs associated with the acquisition of Eastern Michigan Financial Corporation and the previously announced core and digital banking system conversion (a non-GAAP measurement), adjusted net income was $26.4 million, or $1.53 per diluted share, for the second quarter of 2026, and $51.7 million, or $2.99 per diluted share, for the first six months of 2026. Using these non-GAAP measures, adjusted earnings per diluted share increased $0.14, or 10 percent, in the second quarter of 2026, and $0.39, or 15 percent, in the first six months of 2026, compared to the respective 2025 periods. "We are very pleased to report another quarter of strong financial performance as we continue to successfully navigate our way through the extended and ongoing period of uncertain global economic conditions and heightened geopolitical concerns," said Ray Reitsma, President and Chief Executive Officer of Mercantile. "Our robust operating results were driven by increased net interest income, reflecting strong commercial loan growth and a higher net interest margin, a negative provision for credit losses, a significant increase in treasury management fees, a reduction in wholesale funds, and continuing strength in asset quality metrics. As evidenced by the ongoing expansion of local deposits, we remain committed to funding earning asset growth with local deposit generation." Second quarter highlights include: Return on average assets of 1.5 percent and return on average equity of 14.0 percent Tangible book value per common share of $38.42 as of June 30, 2026, up 9 percent (annualized) and over 7 percent since December 31, 2025, and June 30, 2025, respectively Net revenue growth of nearly 13 percent compared to the prior-year second quarter, including net interest income expansion of nearly 16 percent Improved net interest margin, largely reflecting lower cost of funds, commercial loan growth, and continued upward repricing of matured fixed-rate loans and securities Noteworthy increases in treasury management fees and payroll services fees of approximately 29 percent and 9 percent, respectively Continued strength in commercial loan pipeline Ongoing low level of nonperforming assets and nominal past due loans and loan charge-offs Significant reduction in loan-to-deposit ratio from approximately 100 percent as of June 30, 2025, to approximately 93 percent as of June 30, 2026, primarily reflecting strong local deposit generation and the onboarding of Eastern Michigan Bank's deposit portfolio Notable decreases in brokered deposits of $110 million during the first six months of 2026, and $179 million during the twelve months ended June 30, 2026, leaving a balance of only $20.1 million that is scheduled to mature in late 2026 Robust tangible and regulatory capital positions Operating Results Net revenue, consisting of net interest income and noninterest income, was $68.8 million during the second quarter of 2026, up $7.8 million, or 12.8 percent, from $61.0 million during the prior-year second quarter. Net interest income during the current-year second quarter was $57.3 million, up $7.8 million, or 15.7 percent, from $49.5 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 $5.9 million during the second quarter of 2026. Noninterest income totaled $11.5 million during the second quarter of 2026, virtually unchanged from the level recorded during the second quarter of 2025; increases in treasury management fees, bank owned life insurance income, and payroll services fees were offset by reductions in interest rate swap and mortgage banking income. Eastern Michigan Bank generated $0.6 million in noninterest income during the second quarter of 2026, primarily consisting of deposit service charges. The net interest margin was 3.59 percent in the second quarter of 2026, up from 3.48 percent in the prior-year second quarter. The yield on average earning assets was 5.42 percent during the current-year second quarter, a decline from 5.75 percent during the respective 2025 period. The decreased yield largely stemmed from a lower yield on loans and a change in earning asset mix, which more than offset an improved yield on securities resulting from the reinvestment of relatively low-yielding bonds and portfolio expansion activities, along with the positive impact resulting from the addition of Eastern Michigan Bank's securities portfolio. The yield on loans was 6.01 percent during the second quarter of 2026, down from 6.29 percent during the second quarter of 2025, mainly due to reduced interest rates on variable-rate commercial loans resulting from the Federal Open Market Committee ("FOMC") lowering 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. Reflecting a strategic initiative to lower the loan-to-deposit ratio and the impact of Eastern Michigan Bank's liquid balance sheet, relatively higher-yielding loans represented a decreased percentage of earning assets and relatively lower-yielding securities accounted for an increased percentage of earning assets in the second quarter of 2026 compared to the second quarter of 2025. The yield on securities equaled 3.36 percent during the second quarter of 2026, up from 2.82 percent during the prior-year second quarter. The yield on other interest-earning assets, primarily consisting of funds on deposit with the Federal Reserve Bank of Chicago, declined from 4.91 percent during the second quarter of 2025 to 4.04 percent during the respective 2026 period, reflecting the decreased interest rate environment. During the second quarter of 2026, the cost of funds was 1.83 percent, down from 2.27 percent during the second quarter of 2025, mainly due to lower rates paid on money market accounts and time deposits, reflecting the decreased interest rate environment. An increase in low-cost deposit products as a percentage of total funding sources, primarily stemming from the addition of Eastern Michigan Bank's deposit base, and a reduction in brokered deposits also contributed to the reduced cost of funds. The latter reflects a strategy to refine the deposit base whereby the reliance on the brokered deposit market and other higher-priced deposit-only relationships is reduced. Mercantile recorded provisions for credit losses of negative $1.8 million and positive $1.6 million during the second quarters of 2026 and 2025, respectively. The negative provision expense recorded during the current-year second quarter mainly reflected the elimination of a $2.7 million specific allocation associated with the resolution of a nonperforming commercial construction loan, which was partially offset by changes in the economic forecast, allocations necessitated by net loan growth, and an increase in qualitative factor allocations. The recording of net loan recoveries and sustained strength in loan quality metrics during both periods positively impacted necessary provision levels. Noninterest income totaled $11.5 million during the second quarter of 2026, up slightly from the level recorded during the prior-year second quarter. Growth in treasury management fees, bank owned life insurance income, and payroll services fees was offset by lower levels of interest rate swap and mortgage banking income. The increases in treasury management and payroll services fees largely resulted from new commercial customer acquisitions and customers' expanded use of products and services, as well as a modified fee schedule. The reduction in interest rate swap income primarily reflected a lower volume of new swap transactions, while the decrease in mortgage banking income mainly resulted from accelerated mortgage servicing rights amortization resulting from an increased level of payoffs, a change in the quarter-end fair value of commitments to originate salable residential mortgage loans and a lower percentage of loans originated with the intent to sell. Noninterest expense totaled $39.4 million during the second quarter of 2026, compared to $33.4 million during the second quarter of 2025. Excluding non-recurring costs aggregating $0.5 million related to the core and digital banking system conversion and $0.1 million associated with the acquisition of Eastern Michigan Financial Corporation, noninterest expense increased $5.4 million during the current-year second quarter compared to the respective 2025 period. Eastern Michigan Bank's noninterest expense totaled $4.0 million during the second quarter of 2026, including salary and benefit costs of $1.8 million and core deposit intangible asset amortization of $0.9 million. The remaining increase in noninterest expense largely reflected higher salary and benefit costs, along with cost inflation and an expanded balance sheet and branch network. A $1.4 million decrease in allocations to the reserve for unfunded loan commitments, mainly reflecting a lower level of commercial loan commitments that have been accepted by customers, positively impacted noninterest expense during the second quarter of 2026. Federal income tax expense was $5.3 million during the second quarter of 2026, compared to $3.3 million during the prior-year second quarter. The increase in federal income tax expense primarily 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 16.9 percent and 12.9 percent during the second 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 robust increase in net interest income during the second quarter of 2026 resulted from strong commercial loan growth and an improved net interest margin, which was largely driven by a reduced cost of funds and the upward repricing of matured fixed-rate loans and securities. As demonstrated by the solid growth in treasury management and payroll services fees, we continue to be successful in our efforts to cultivate new customer relationships and further develop existing clients' relationships. We remain focused on expanding our balance sheet in a cost-effective fashion while continuing to deliver excellent service and market-leading products and services to our clients. Total overhead expense, excluding costs associated with the core and digital banking system conversion and acquisition of Eastern Michigan Financial Corporation, as a percentage of net revenue during the second quarter of 2026 approximated the level during the prior-year second quarter." Balance Sheet Total assets were $6.82 billion as of June 30, 2026, down $15.7 million from December 31, 2025. Total loans increased $98.9 million, or an annualized 8.2 percent, during the second quarter of 2026, and $93.7 million, or an annualized 3.9 percent, during the first six months of 2026, primarily reflecting commercial loan portfolio expansion of $115 million, or an annualized 11.7 percent, and $132 million, or an annualized 6.8 percent, during the respective periods. Commercial loans grew in both 2026 periods despite the full payoffs and partial paydowns of certain larger relationships, which aggregated $121 million during the second quarter of 2026, and $301 million during the first six months of 2026. The payoffs and paydowns, which mainly resulted from sales of assets, secondary market refinancings, and customers using excess cash flows generated within their operations to make line of credit reductions, subsided as anticipated during the second quarter of 2026 compared to the first quarter of 2026, although remaining above the historical average of approximately $50 million per quarter. 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 increases in existing credit relationships, remained strong across all segments during the first six months of 2026. Residential mortgage loans were down $17.7 million and $40.3 million during the second quarter and first six months of 2026, respectively, while other consumer loans increased $1.6 million and $2.3 million during the respective periods. During the first six months of 2026, interest-earning deposits declined $149 million, and securities available for sale were up $23.3 million. The reduction in interest-earning deposits primarily resulted from funds being used to originate loans, purchase securities, and payoff matured brokered deposits and Federal Home Loan Bank of Indianapolis ("FHLBI") advances. As of June 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 $236 million and $47.4 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 58 percent of total commercial loans as of June 30, 2026, a level that has remained relatively consistent with prior periods and in line with our expectations. Total deposits equaled $5.30 billion as of June 30, 2026, compared to $5.28 billion as of December 31, 2025. Local deposits grew $122 million, or an annualized 4.8 percent, during the first six months of 2026, while brokered deposits decreased $110 million. The increase in local deposits, which occurred despite the normal level of seasonal noninterest-bearing deposit withdrawals by customers to make bonus and tax payments and partnership distributions, reflected successful client acquisition efforts and net growth in various existing deposit relationships. The loan-to-deposit ratio equaled 93 percent as of June 30, 2026, down from 100 percent as of June 30, 2025, largely due to an increase in local deposits. As of June 30, 2026, wholesale funds, consisting of FHLBI advances and brokered deposits, were $325 million, or approximately 6 percent of total funds, compared to approximately 8 percent and 10 percent as of December 31, 2025, and June 30, 2025, respectively. Noninterest-bearing checking accounts represented approximately 27 percent of total deposits as of June 30, 2026. Mr. Reitsma noted, "We are very pleased with the growth in the commercial loan portfolio during the second quarter and first six months of 2026, especially when factoring in the level of payoffs and line of credit paydowns during the periods. Our commercial loan pipeline remains robust, which combined with ongoing conversations with existing and potential borrowers, should provide us with meaningful opportunities to originate loans in forthcoming periods. We remain committed to funding lending opportunities with local deposit generation." Asset Quality Nonperforming assets totaled $5.8 million, or 0.1 percent of total assets, as of June 30, 2026, compared to $7.9 million, or 0.1 percent of total assets, as of December 31, 2025, and $9.7 million, or 0.2 percent of total assets, as of June 30, 2025. The decreases in nonperforming assets during the first six months of 2026 and twelve months ended June 30, 2026, mainly reflected the resolution of a nonperforming commercial construction loan, which had been placed on nonaccrual during the second quarter of 2025 and represented approximately 57 percent and 35 percent of total nonperforming assets as of June 30, 2025, and December 31, 2025, respectively. Specific allocations totaling $5.5 million and ultimately equaling the full loan balance were made during the second and third quarters of 2025, with the loan balance charged down by $2.8 million during the fourth quarter of 2025. During the second quarter of 2026, the loan's remaining book balance of $2.7 million was paid off, eliminating the remaining specific allocation balance, and a recovery of $0.2 million was recorded. The level of past due loans remains minimal. During the second quarter of 2026, loan charge-offs were nominal, while recoveries of prior period loan charge-offs equaled $0.5 million, providing for net loan recoveries of $0.5 million, or an annualized 0.04 percent of average total loans. Mr. Reitsma remarked, "As reflected by ongoing low levels of nonperforming assets, past due loans, and loan charge-offs, our asset quality metrics remained robust during the second quarter of 2026. We remain committed to underwriting all loan types in a disciplined manner and identifying any deteriorating commercial loan relationships or emerging systemic or sector-specific credit problems as soon as possible to limit the impact of such on our overall financial health. Our sound collection and conservative charge-off practices were evident during the current-year second quarter with the full resolution of a significant nonperforming commercial construction loan, which represented our largest nonperforming loan as of March 31, 2026. The resiliency of our commercial loan clients during the extended and ongoing period of uncertain macro-economic conditions has been noteworthy." Capital Position Shareholders' equity totaled $755 million as of June 30, 2026, up $30.2 million from December 31, 2025. Mercantile Bank and Eastern Michigan Bank each maintained "well-capitalized" positions as of June 30, 2026, with total risk-based capital ratios of 13.5 percent and 23.1 percent, respectively. As of June 30, 2026, Mercantile Bank and Eastern Michigan Bank had approximately $205 million and $36.3 million, respectively, in excess of the 10 percent minimum regulatory threshold required to be categorized as a "well-capitalized" institution. Mercantile reported 17,285,911 total shares outstanding as of June 30, 2026. Mr. Reitsma concluded, "Our ongoing strong financial condition enabled us to continue our regular cash dividend program, and as demonstrated by our announcement of an increased third quarter 2026 cash dividend, we remain committed to building shareholder value through meaningful cash returns. Based on the continuing strength of our operating results, asset quality measures, capital levels and loan funding opportunities, along with the expected realization of solid financial performance in upcoming periods, we believe we are positioned to successfully address any challenges arising from the prolonged and ongoing period of unstable economic and operating conditions. Our steadfast focus on meeting customers' needs has been instrumental in retaining established relationships and fostering new relationships, and we believe a similar focus in future periods as planned should provide us with ample opportunities to originate loans and generate local deposits." Investor Presentation Mercantile has prepared presentation materials that management intends to use during its previously announced second quarter 2026 conference call on Tuesday, July 21, 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 $6.8 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 ($0.1 million and $0.4 million during the second quarter and first six months of 2026, respectively), and (ii) the previously announced core and digital banking system conversion ($0.5 million and $3.5 million during the second quarter and first six 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; 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. 2.24 % 1.76 %2.23 % Cost of borrowed funds3.57 %3.58 %3.56 %3.61 %3.61 %3.57 %3.62 % Cost of interest-bearing liabilities2.53 %2.54 %2.87 %3.06 %3.09 %2.54 %3.09 % Cost of funds (total earning assets)1.83 %1.87 %2.09 %2.25 %2.27 %1.85 %2.27 % Cost of funds (total assets)1.72 %1.75 %1.97 %2.12 %2.15 %1.74 %2.15 %MORTGAGE BANKING ACTIVITY Total mortgage loans originated$159,105127,939141,451136,840141,921287,044242,317 Purchase mortgage loans originated$126,79868,76985,973107,993111,247195,567192,741 Refinance mortgage loans originated$32,30759,17055,47828,84730,67491,47749,576 Mortgage loans originated with intent to sell$107,447105,873116,886111,334112,323213,320192,776 Income on sale of mortgage loans$3,1563,0493,3753,4823,2196,2055,674CAPITAL Tangible equity to tangible assets9.87 %9.41 %9.37 %9.72 %9.49 %9.87 %9.49 % Tier 1 leverage capital ratio11.04 %10.61 %11.30 %10.90 %10.93 %11.04 %10.93 % Common equity risk-based capital ratio11.44 %11.27 %11.01 %11.33 %10.90 %11.44 %10.90 % Tier 1 risk-based capital ratio12.25 %12.09 %11.83 %12.20 %11.75 %12.25 %11.75 % Total risk-based capital ratio14.65 %14.59 %14.35 %14.87 %14.37 %14.65 %14.37 % Tier 1 capital$749,048723,395704,776685,440666,068749,048666,068 Tier 1 plus tier 2 capital$896,267872,668854,876835,263814,796896,267814,796 Total risk-weighted assets$6,116,6155,981,4205,958,7635,617,0055,670,5716,116,6155,670,571 Book value per common share$43.6842.6642.1940.4638.8743.6838.87 Tangible book value per common share$38.4237.3436.7837.4135.8238.4235.82 Cash dividend per common share$0.390.390.380.380.370.780.74ASSET QUALITY Gross loan charge-offs$1052,8421723815101 Recoveries$514351206726147865322 Net loan charge-offs (recoveries)$(504)(346)2,636(554)(109)(850)(221) Net loan charge-offs to average loans(0.04 %)(0.03 %)0.23 %(0.05 %)(0.01 %)(0.04 %)(0.01 %) Allowance for credit losses$55,44156,73658,19159,12958,37555,44158,375 Allowance to loans1.13 %1.18 %1.21 %1.28 %1.24 %1.13 %1.24 % Nonperforming loans$5,8037,5437,8709,8449,7435,8039,743 Other real estate/repossessed assets$0000000 Nonperforming loans to total loans0.12 %0.16 %0.16 %0.21 %0.21 %0.12 %0.21 % Nonperforming assets to total assets0.09 %0.11 %0.12 %0.16 %0.16 %0.09 %0.16 %NONPERFORMING ASSETS - COMPOSITION Commercial: Commercial & industrial$9421,1221,3931,5091,7279421,727 Land development & construction$002010000 Owner occupied comm'l real estate$953494517009530 Nonowner occupied comm'l real estate$02,7322,7325,5325,53205,532 Multi-family & residential rental$0000000 Total commercial$1,8954,3484,8437,0417,2591,8957,259 Retail: 1-4 family mortgages$3,8113,1142,9712,7672,4843,8112,484 Other consumer$978156360970 Total retail$3,9083,1953,0272,8032,4843,9082,484 Total nonperforming assets$5,8037,5437,8709,8449,7435,8039,743NONPERFORMING ASSETS - RECON Beginning balance$7,5437,8709,8449,7435,3617,8705,743 Additions$1,2844101,2994265,7921,6946,215 Return to performing status$0(12)0(27)0(12)0 Principal payments$(3,016)(725)(466)(222)(1,385)(3,741)(2,129) Sale proceeds$0000000 Loan charge-offs$(8)0(2,807)(76)(25)(8)(86) Valuation write-downs$0000000 Ending balance$5,8037,5437,8709,8449,7435,8039,743LOAN PORTFOLIO COMPOSITION Commercial: Commercial & industrial$1,537,0291,429,8301,374,5221,337,7291,375,3681,537,0291,375,368 Land development & construction$119,386119,560117,37370,80667,520119,38667,520 Owner occupied comm'l real estate$803,884799,066778,869729,451725,106803,884725,106 Nonowner occupied comm'l real estate$1,091,8441,101,7581,110,6741,091,2101,134,0121,091,8441,134,012 Multi-family & residential rental$498,253485,175537,224521,111519,152498,253519,152 Total commercial$4,050,3963,935,3893,918,6623,750,3073,821,1584,050,3963,821,158 Retail: 1-4 family mortgages$750,526768,237790,857780,917799,426750,526799,426 Other consumer$114,631113,067112,36983,93677,435114,63177,435 Total retail$865,157881,304903,226864,853876,861865,157876,861Total loans$4,915,5534,816,6934,821,8884,615,1604,698,0194,915,5534,698,019END OF PERIOD BALANCES Loans$4,915,5534,816,6934,821,8884,615,1604,698,0194,915,5534,698,019 Securities$1,125,5291,125,4331,102,230855,138826,4151,125,529826,415 Other interest-earning assets$327,399577,619458,548457,373246,254327,399246,254 Total earning assets (before allowance)$6,368,4816,519,7456,382,6665,927,6715,770,6886,368,4815,770,688 Total assets$6,819,4906,945,0356,835,2196,308,4876,180,9886,819,4906,180,988 Noninterest-bearing deposits$1,420,5911,331,9471,339,6661,182,7751,180,8011,420,5911,180,801 Interest-bearing deposits$3,875,7974,087,5713,944,7863,629,0383,529,6713,875,7973,529,671 Total deposits$5,296,3885,419,5185,284,4524,811,8134,710,4725,296,3884,710,472 Total borrowed funds$690,554704,853730,778739,688740,685690,554740,685 Total interest-bearing liabilities$4,566,3514,792,4244,675,5644,368,7264,270,3564,566,3514,270,356 Shareholders' equity$755,124736,947724,884657,630631,519755,124631,519AVERAGE BALANCES Loans$4,891,8684,828,0314,627,5444,668,1734,695,3674,860,1264,662,415 Securities$1,128,0631,119,988880,619841,853803,2641,124,048783,291 Other interest-earning assets$413,729467,991426,758433,055235,965440,710269,956 Total earning assets (before allowance)$6,433,6606,416,0105,934,9215,943,0815,734,5966,424,8845,715,662 Total assets$6,851,0656,837,2396,296,3416,294,8416,061,8196,844,1906,040,109 Noninterest-bearing deposits$1,376,1081,318,5371,227,1001,215,9181,152,6311,347,4811,149,359 Interest-bearing deposits$3,956,0083,999,1413,599,0123,610,6003,463,0673,977,4563,452,840 Total deposits$5,332,1165,317,6784,826,1124,826,5184,615,6985,324,9374,602,199 Total borrowed funds$707,080712,240720,499749,679749,811709,645744,250 Total interest-bearing liabilities$4,663,0884,711,3814,319,5114,360,2794,212,8784,687,1014,197,090 Shareholders' equity$744,193733,366671,029640,495616,229738,809605,248 View original content to download multimedia:https://www.prnewswire.com/news-releases/mercantile-bank-corporation-announces-strong-second-quarter-2026-results-302829894.html

Wall Street expects a year-over-year increase in earnings on higher revenues when Old Second Bancorp (OSBC) reports results for the quarter ended June 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 earnings report, which is expected to be released on July 22, might help the stock move higher if these key numbers are better than expectations. 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 financial holding company is expected to post quarterly earnings of $0.54 per share in its upcoming report, which represents a year-over-year change of +12.5%. Revenues are expected to be $95.1 million, up 26.6% from the year-ago quarter. The consensus EPS estimate for the quarter has been revised 1.75% 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 an aggregate change may not always reflect the direction of estimate revisions by each of the covering analysts. 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 Second Bancorp, the Most Accurate Estimate is lower than the Zacks Consensus Estimate, suggesting that analysts have recently become bearish on the company's earnings prospects. This has resulted in an Earnings ESP of -2.30%. On the other hand, the stock currently carries a Zacks Rank of #2. So, this combination makes it difficult to conclusively predict that Old Second Bancorp will beat the consensus EPS estimate. Analysts often consider to what extent a company has been able to match consensus estimates in the past while calculating their estimates for its future earnings. 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 Second Bancorp would post earnings of $0.52 per share when it actually produced earnings of $0.49, delivering a surprise of -5.77%. Over the last four quarters, the company has beaten consensus EPS estimates two 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 Second 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 $1.34 per share for the quarter ended June 2026. This estimate indicates a year-over-year change of -3.6%. This quarter's revenue is expected to be $69.27 million, up 13.7% from the year-ago quarter. The consensus EPS estimate for Mercantile Bank has remained unchanged over the last 30 days. However, a lower Most Accurate Estimate has resulted in an Earnings ESP of -0.75%. 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 Second Bancorp, Inc. (OSBC) : 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