Mercantile Bank Corporation Reports $22.6 Million Net Income for Q2 2025, Announces Merger with Eastern Michigan Financial

Mercantile Bank Corporation reported a net income of $22.6 million, or $1.39 per diluted share, for the second quarter of 2025, marking an increase from $18.8 million, or $1.17 per diluted share, in the same period last year. For the first half of 2025, net income totaled $42.2 million, or $2.60 per diluted share, compared to $40.3 million, or $2.50 per diluted share, in the first half of 2024. The growth in net income was attributed to increased net interest income, lower provision expenses, and reduced federal income tax expenses, which outweighed higher overhead costs. Additionally, noninterest income rose due to growth in mortgage banking income and other service fees.

Total assets for Mercantile Bank increased by $129 million to $6.18 billion as of June 30, 2025. The bank's loan portfolio grew by $97.2 million, with commercial loans increasing by $114 million, reflecting a 6% annualized growth rate. Notably, commercial and industrial loans rose by $88.1 million, while multi-family and residential rental property loans increased by $43.3 million. However, residential mortgage loans decreased by $28.2 million during the same period, as payoffs and scheduled payments outpaced new loan originations.

The bank's total deposits rose by $12.1 million, reaching $4.71 billion, with significant growth in interest-bearing deposit types. Securities sold under agreements to repurchase increased by $121 million, reflecting a return of funds previously withdrawn. Federal Home Loan Bank advances decreased by $30.9 million, totaling $356 million as of June 30, 2025. The bank's liquidity position remains strong, with a borrowing line of credit totaling $1.06 billion and a significant amount of unfunded loan commitments.

In terms of operational metrics, the bank's nonperforming loans represented 0.21% of total loans, with no loans past due for 90 days or more. The allowance for credit losses stood at $58.4 million, or 1.24% of total loans, indicating a strong coverage ratio of 599% for nonperforming loans. The bank's management remains optimistic about future growth, particularly in the commercial loan sector, despite anticipating some large commercial real estate-related loan payoffs that may impact growth in the latter half of 2025. The bank also announced a definitive merger agreement with Eastern Michigan Financial Corporation, expected to close in the fourth quarter of 2025, which will further enhance its market presence.