Slides
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Investor Presentation January 2026
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Forward-Looking Statements This presentation contains statements or 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: “anticipates,” “intends,” “plans,” “goal,” “seeks,” “believes,” “projects,” “estimates,” “expects,” “indicates,” “strategy,” “future,” “is likely,” “may,” “should,” “will,” and variations of such words and similar references to future periods. Any such statements are based on current expectations that involve a number of risks, uncertainties and assumptions (“Future Factors”) that are difficult to predict with regard to timing, extent, likelihood and degree of occurrence. We undertake no obligation to update, amend or clarify forward- looking statements, whether as a result of new information, future events (whether anticipated or unanticipated), or otherwise. Therefore, actual results and outcomes may differ materially from the results expressed or forecasted in such forward-looking statements. Future factors include, among others, difficulties and delays in the integration of Mercantile and Eastern and achieving anticipated synergies, cost savings and other benefits from the transaction; adverse 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 impact; 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 facts; 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 risk factors described in our annual report on Form 10-K for the year ended December 31, 2024, including those disclosed from time to time in filings made by Mercantile with the Securities and Exchange Commission. Investors are cautioned not to place undue reliance on any forward-looking statements contained herein. Investor Presentation
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3 Executive Management Team Investor Presentation RAYMOND REITSMA PRESIDENT AND CHIEF EXECUTIVE OFFICER Mr. Reitsma was appointed President and Chief Executive Officer of Mercantile effective June 1, 2024, and has been with the Bank for over 20 years, beginning with his initial role as a Commercial Loan Manager in 2003, including holding the title of Senior Lender for eight years and President for seven years. CHARLES CHRISTMAS EVP, CHIEF FINANCIAL OFFICER, AND TREASURER Mr. Christmas has served as Chief Financial Officer at Mercantile since 1998. Prior to joining Mercantile, Mr. Christmas was a bank examiner for the Federal Deposit Insurance Corporation.
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2025 Financial Performance
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5 2025 Performance Highlights Financial Performance EARNINGS • 11% EPS growth year-over-year • EPS of $5.47 in 2025 versus $4.93 in 2024 • 1.4% ROAA and 14.1% ROAE in 2025 NET INTEREST MARGIN AND NET INTEREST INCOME • Net interest margin of 3.47% in 2025 versus 3.58% in 2024 • Adjustment driven by changes in earning asset mix • The lower interest rate environment had little impact on margin as a lower asset yield was largely offset by lower funding rates COMMERCIAL LOAN PORTFOLIO • Commercial loans increased 6% when including acquisition • Excluding the acquisition, commercial loans increased 2% • Elevated payoffs offset solid originations • C&I and Owner Occupied CRE combined represented 55% of the portfolio ASSET QUALITY • Nonperforming assets to total assets ratio of 0.12% at the end of 2025 • Net loan charge-offs to average loans of 0.04% in 2025 DEPOSIT AND FUNDING • Continued focus on building local deposit base • Total deposits increased 12% (2% growth excluding deposits gained from the acquisition) • Loan-to-deposit ratio at 91% at YE 2025 versus 98% at YE 2024 CAPITAL • CET1 capital ratio of 11.0% at the end of 2025 versus 10.7% at the end of 2024 • Total risk-based capital ratio of 14.3% at the end of 2025 versus 14.2% at the end of 2024 • Tangible book value per share of $36.78 at the end of 2025 versus $33.14 at the end of 2024
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6 Profitability Trends Financial Performance Track record of solid profitability metrics • Of the top 200 exchange traded banks, MBWM ranked among the top 25 banks for ROAA during 2024 11.33% 12.52% 10.32% 13.11% 14.07% 17.24% 14.35% 14.07% 0% 2% 4% 6% 8% 10% 12% 14% 16% 18% $0mm $100mm $200mm $300mm $400mm $500mm $600mm $700mm 2018 2019 2020 2021 2022 2023 2024 2025 Average Shareholders' Equity ROAE 1.28% 1.39% 1.07% 1.23% 1.21% 1.62% 1.40% 1.44% 0.0% 0.2% 0.4% 0.6% 0.8% 1.0% 1.2% 1.4% 1.6% $0mm $1,000mm $2,000mm $3,000mm $4,000mm $5,000mm $6,000mm $7,000mm 2018 2019 2020 2021 2022 2023 2024 2025 Average Total Assets ROAA ROAA TrendROAE Trend 2023: Improvement in profitability metrics driven by strategic balance sheet shift to shorten loan duration and align with funding sources to better manage changing interest rate environments 2024: Shift in profitability metrics driven by significant growth in higher cost deposits due to strategic initiative to reduce loan to deposit ratio. The strategy drove asset growth which helped offset margin compression from the intentional change in earning assets mix. 2025: Continued stability in profitability metrics driven by asset growth, margin stability, solid asset quality, and prudent tax strategies
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7 Historical Trends and Shareholder Value Company Overview Track record of delivering shareholder value Solid Earnings and Balance Sheet Growth Trends 4.4 5.3 4.9 5.4 6.1 6.8 $0 $2 $4 $6 $8 2020 2021 2022 2023 2024 2025 Billions Total Assets 9.0% CAGR 3.2 3.5 3.9 4.3 4.6 4.8 $0 $1 $2 $3 $4 $5 $6 2020 2021 2022 2023 2024 2025 Billions Total Loans 8.6% CAGR 3.4 4.1 3.7 3.9 4.7 5.3 $0 $1 $2 $3 $4 $5 $6 2020 2021 2022 2023 2024 2025 Billions Total Deposits 9.2% CAGR 2.71 3.69 3.85 5.13 4.93 5.47 $0 $1 $2 $3 $4 $5 $6 2020 2021 2022 2023 2024 2025 EPS 15.1% CAGR 23.86 25.61 24.47 29.31 33.14 36.78 $0 $10 $20 $30 $40 2020 2021 2022 2023 2024 2025 TBVPS 9.0% CAGR 1.12 1.18 1.26 1.34 1.42 1.50 $0.0 $0.2 $0.4 $0.6 $0.8 $1.0 $1.2 $1.4 $1.6 2020 2021 2022 2023 2024 2025 Cash Dividends 6.0% CAGR
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8 Acquisition of Eastern Michigan Financial Corporation Company Overview Unique and Attractive Partner • Closed December 31, 2025 • Top-Tier Deposit Franchise • Strong History of Profitability • Extremely Low Cost of Funding • Great Liquidity • Strong Asset Quality Goodwill Reconciliation Consideration: Cash $ 50,900 Common stock (925,013 shares issued at $48.55 per share) 44,900 Total consideration $ 95,800 Identifiable assets acquired Cash and due from banks $ 62,400 Interest-earning deposits 42,100 Securities available for sale 198,400 Loans, net 201,300 Premises and equipment 7,400 Core deposit intangible 20,400 Other assets 16,600 Total identifiable assets acquired 548,600 Identifiable liabilities assumed Deposits $ 474,900 Other liabilities 1,100 Total identifiable liabilities acquired 476,000 Net identifiable assets acquired $ 72,600 Goodwill $ 23,200
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9 Loan to Deposit Ratio* Financial Performance Multi year strategic initiative to reduce loan -to-deposit ratio • Reduced to 91% from 98% over last twelve months *Reflects end of quarter balances 97.9% 99.0% 99.7% 95.9% 91.2% $4,000 $4,500 $5,000 $5,500 85% 90% 95% 100% 105% 4Q24 1Q25 2Q25 3Q25 4Q25 (In millions) Loan to Deposit Ratio Total Loans Total Deposits
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10 Stable margin and net interest income in a declining interest rate environment Financial Performance $48mm $49mm $49mm $52mm $51mm 4.69% 4.35% 4.34% 4.35% 4.01% 3.41% 3.47% 3.48% 3.49% 3.43% 2% 3% 4% 5% 6% $0mm $10mm $20mm $30mm $40mm $50mm 4Q24 1Q25 2Q25 3Q25 4Q25 Net Interest Income SOFR 90-Day Average Net Interest Margin
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11 Net Interest Income Solid net interest income in a lower interest rate environment • Despite lower interest rate environment, net interest income continues to be solid driven by: • YOY Asset growth • Active match funding initiatives • Higher yield on investments as fixed rate securities reprice • Repricing of fixed rate loans • Repricing of deposit rates • Stable noninterest bearing deposit Financial Performance $74 $72 $74 $75 $71 $8.7 $8.3 $8.0 $10.6 $10.9 $5.6 $5.7 $5.7 $5.9 $5.9 $0B $1B $2B $3B $4B $5B $6B $0mm $10mm $20mm $30mm $40mm $50mm $60mm $70mm $80mm $90mm 4Q24 1Q25 2Q25 3Q25 4Q25 Assets Interest Income Interest on Loans, including fees Interest on Securities and Deposits Average Earning Assets $27 $25 $26 $27 $25 $7 $7 $7 $7 $6 $3.3 $3.4 $3.5 $3.6 $3.6 $0.0 $0.5 $1.0 $1.5 $2.0 $2.5 $3.0 $3.5 $4.0 $0 $5 $10 $15 $20 $25 $30 $35 $40 $45 4Q24 1Q25 2Q25 3Q25 4Q25 Deposits ($ in billions) Expense ($ in millions) Interest on Deposits Other Interest Expense Avg. Interest-Bearing Deposits 27% 25% 25% 25% 25% 20% 21% 20% 20% 24% 50% 51% 51% 51% 48% 3% 3% 4% 4% 2% 0.0% 20.0% 40.0% 60.0% 80.0% 100.0% Dec-24 Mar-25 Jun-25 Sep-25 Dec-25 % of Total Deposits Non-interest bearing deposits Lower-cost deposits Higher-cost deposits Brokered deposits Change in asset mix as on balance sheet liquidity grows Costs stable as deposit balances grow Significant low/no cost deposits
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12 Net Interest Margin Stabilizing net interest margin • Proactive balance sheet management strategies that support margin stabilization include: o Matched funding fixed rate commercial loans and deposit mix strategies/management o Commercial loan back-to-back interest rate swap program o Laddered maturities in investment portfolio and purchases of heavily discounted callable agency bonds Financial Performance $48 $49 $49 $52 $51 3.41% 3.47% 3.48% 3.49% 3.43% 5.80% 5.73% 5.75% 5.74% 5.52% 2.39% 2.26% 2.27% 2.25% 2.09% 4.69% 4.35% 4.34% 4.35% 4.01% $20 $25 $30 $35 $40 $45 $50 $55 2.0% 2.5% 3.0% 3.5% 4.0% 4.5% 5.0% 5.5% 6.0% 6.5% 7.0% 4th Qtr 2024 1st Qtr 2025 2nd Qtr 2025 3rd Qtr 2025 4th Qtr 2025 In millions Net Interest Income Net Interest Margin Earning Asset Yield Cost of Funds SOFR 90-Day Average Qtr-over Qtr Margin Reconciliation 4th Qtr 2024 Impact from Change in Asset Mix Impact from Change in Asset Yield Impact from Change in Funding Mix Impact from Change in Funding Rates 4th Qtr 2025 3.41% -0.05% -0.23% -0.01% 0.31% 3.43% $191 $201 3.58% 3.47% 6.01% 5.69% 2.43% 2.22% 5.27% 4.35% $20 $40 $60 $80 $100 $120 $140 $160 $180 $200 0.00% 1.00% 2.00% 3.00% 4.00% 5.00% 6.00% 7.00% 2024 Actual 2025 Actual In millions Net Interest Income Net Interest Margin Earning Asset Yield Cost of Funds SOFR 90-Day Average Year -over Year Margin Reconciliation 2024 Impact from Change in Asset Mix Impact from Change in Asset Yield Impact from Change in Funding Mix Impact from Change in Funding Rates 2025 3.58% -0.05% -0.27% -0.06% 0.27% 3.47% Change in margin from 2024 to 2025 -11 bps Net impact on margin from changes in MIX: -11 bps Net impact on margin from changes in RATES: 0 bps
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13 Noninterest Income Financial Performance $0mm $2mm $4mm $6mm $8mm $10mm $12mm 4Q24 1Q25 2Q25 3Q25 4Q25 Service charges on accounts (+19%) Payroll services (+14%) Mortgage banking income (+6%) Credit and debit card income (+4%) Interest rate swap income (-39%) Earnings on bank owned life insurance (+29%) Other income (-30%) Stable fee income (%) Reflects full year 2025 compared to full year 2024
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14 Mortgage Loan Activity Financial Performance Stable income and solid originations $0 $20,000 $40,000 $60,000 $80,000 $100,000 $120,000 $140,000 $160,000 4th Qtr 2024 1st Qtr 2025 2nd Qtr 2025 3rd Qtr 2025 4th Qtr 2025 (In thousands) Purchase mortgage loans originated Refinance mortgage loans originated MORTGAGE LOAN ORIGINATIONS MORTGAGE LOAN SALES $0 $500 $1,000 $1,500 $2,000 $2,500 $3,000 $3,500 $4,000 $0 $20,000 $40,000 $60,000 $80,000 $100,000 $120,000 $140,000 4th Qtr 2024 1st Qtr 2025 2nd Qtr 2025 3rd Qtr 2025 4th Qtr 2025 Income on Sale of Mortgage Loans (in thousands) Loans originated with intent to sell (in thousands) Total saleable mortgage loans Income on sale of mortgage loans
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15 Noninterest Expense Financial Performance Overall stable cost structure • Increase in medical expenses, and salary and benefit costs commensurate with asset growth • Additional increase driven by acquisition costs 57.8% 54.3% 54.8% 55.7% 59.2% 0% 10% 20% 30% 40% 50% 60% $0mm $10mm $20mm $30mm $40mm 4Q24 1Q25 2Q25 3Q25 4Q25 Other expense Acquisition Costs Data processing costs Furniture and equipment Occupancy Salaries and benefits Efficiency Ratio 2.25% 2.10% 2.21% 2.21% 2.31% 1.90% 2.00% 2.10% 2.20% 2.30% 2.40% 4Q24 1Q25 2Q25 3Q25 4Q25 Noninterest expense to average assets (annualized)
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16 Transferable Energy Tax Credits Financial Performance Closed five transferable tax credit deals for a tax benefit of $3.5 million in 2025 Additional benefit driven by investments in tax credit structures $6.8mm $5.1mm $1.7mm $48.4mm $44.9mm $3.5mm Investments in Tax Credit Structures Ammortization Tax Benefit from TC Structure Investments Transferable Tax Credit Investments in Transferable Tax Investments Tax Benefit from Transferable Tax credits
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17 Loan Growth Financial Performance Consistent Fundings • Commercial loan focused • Solid historical growth • Top tier asset quality • Linked quarter commercial loans contraction driven by: o Lines of credit paydowns due to excess cash o Assets Sales o Refinanced Nonowner Occupied CRE o Pay offs concentrated in back half of the year offset solid originations • Increased reserve for unfunded commitment by $1 million in 4Q25 *reflects year end totals $3.71B $3.75B $3.82B $3.75B $3.92B $3.6B $3.7B $3.8B $3.9B $4.0B Dec-24 Mar-25 Jun-25 Sep-25 Dec-25 Quarter end core commercial loan growth trends $1.1B $1.1B $1.2B $1.3B $1.3B $1.4B $0.1B $0.0B $0.1B $0.1B $0.1B $0.1B$0.5B $0.6B $0.6B $0.7B $0.7B $0.8B $0.9B $1.0B $1.0B $1.0B $1.1B $1.1B$0.1B $0.2B $0.3B $0.3B $0.5B $0.5B $0.4B $0.5B $0.8B $0.9B $0.9B $0.9B $0.0B $1.0B $2.0B $3.0B $4.0B $5.0B $6.0B 2020 2021 2022 2023 2024 2025 Commercial & industrial Land development & construction Owner occupied comm'l R/E Non-owner occupied comm'l R/E Multi-family & residential rental Total retail Total Loan Portfolio Growth Trends*
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18 Asset Quality Financial Performance Asset quality measures remain strong • Reflects ongoing commitment to soundly and vigilantly underwrite and administer loans and strength of borrowers • Continuing to build reserve for credit losses *Reflects period ends. ($ in thousands) 4th Qtr 2024 1st Qtr 2025 2nd Qtr 2025 3rd Qtr 2025 4th Qtr 2025 Gross loan charge-offs $ 3,800 100 0 200 2,800 Recoveries $ 200 200 100 700 200 Net loan charge-offs (recoveries) $ 3,600 (100) (100) (500) 2,600 Net loan charge-offs (recoveries) to average loans 0.31% (0.01%) (0.01%) (0.05%) 0.23% Provision for credit losses $ 1,500 2,100 1,600 200 (700) Allowance for credit losses $ 54,500 56,700 58,400 59,100 58,200 Allowance to loans 1.18% 1.22% 1.24% 1.28% 1.21% Nonperforming loans $ 5,700 5,400 9,700 9,800 7,900 Other real estate/repossessed assets $ 0 0 0 0 0 Nonperforming loans to total loans 0.12% 0.12% 0.21% 0.21% 0.16% Nonperforming assets to total assets 0.09% 0.09% 0.16% 0.16% 0.12% 0.11% 0.07% 0.20% 0.08% 0.12% 0.16% 0.00% 0.50% 1.00% 2020 2021 2022 2023 2024 2025 Nonperforming Loans/Total Loans Historical Nonperforming Loans to Total Loans* Quarterly Asset Quality Metrics
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19 Funding sources designed to match asset repricing characteristics* Floating rate: • Shorten balance sheet duration • Align with funding sources (of which a proportional amount has short durations and floating rates) to mitigate interest rate risk Fixed rate: • Match funded with fixed rate liabilities • Fixed-rate loans and securities provide a natural hedge in a declining-rate environment. *As of December 31, 2025 Financial Performance Variable Rate Loans: 77% Fixed Rate Loans: 23% Total Loan Portfolio Rate Type Total Floating Rate Assets and Funding Sources $0.0B $1.0B $2.0B $3.0B $4.0B $5.0B Floating Rate Assets Liability Funding Sources Interest-Earning Deposits Variable Rate Retail Loans Variable Rate Commercial Loans Sweep Accounts Non-Maturity Deposit $0.0B $0.5B $1.0B $1.5B $2.0B $2.5B $3.0B Commercial Commercial Retail Retail Variable Rate Loans Fixed Rate Loans Variable Rate Loans Fixed Rate Loans 0 – 12 Months 1 – 5 Years Over 5 Years Total Loan Portfolio Repricing Breakdown $0.0B $0.5B $1.0B $1.5B $2.0B $2.5B $3.0B $3.5B $4.0B $4.5B $5.0B Fixed Rate Assets Liability Funding Sources Fixed Rate Securities Fixed Rate Retail Loans Fixed Rate Commercial Loans FHLBI Advances Time Deposits Total Fixed Rate Asset and Funding Sources
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20 Investment Portfolio Financial Performance • Net unrealized losses (before tax) equaled $31 million as of December 31, 2025 compared to $63 million as of December 31, 2024 • Investment portfolio mix remains relatively unchanged, dominated by U.S Agency bonds • Continue to build the U.S Agency portfolio as part of the strategy to reduce loan to deposit ratio and mitigate interest rate risk • Increased portfolio yield given higher rate environment • Laddered maturities but concentration on bond purchases with maturities in 3-5 years ($100,000mm) $0mm $100,000mm $200,000mm $300,000mm $400,000mm $500,000mm $600,000mm $700,000mm $800,000mm As of December 31, 2025 Unrealized Losses Unrealized Gains Amortized Cost Fair Value ($100mm) $0mm $100mm $200mm $300mm $400mm $500mm $600mm U.S. Gov't Agency Bonds Municipal Bonds Mortgage-Backed Securities As of December 31, 2024 Total Investment Portfolio Composition U.S. Agency Bond Segment Profile 1.28% 2.68% 3.42% 0.00% 0.50% 1.00% 1.50% 2.00% 2.50% 3.00% 3.50% 4.00% $0mm $50mm $100mm $150mm $200mm $250mm $300mm $350mm $400mm One year or less Over one through five years Over five through ten years Amortized Cost Maturity Schedule* Amortized Cost Average Yield *As of December 31, 2025 0.00% 0.50% 1.00% 1.50% 2.00% 2.50% 3.00% 3.50% ($100mm) $0mm $100mm $200mm $300mm $400mm $500mm $600mm $700mm $800mm 12/31/24 6/30/25 12/31/2025 Net Unrealized Loss ($) Book Value ($) Average Yield (%) Segment Growth
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21 Deposits and Sweep Accounts Financial Performance $0.0B $1.0B $2.0B $3.0B $4.0B $5.0B $6.0B 4Q24 1Q25 2Q25 3Q25 4Q25 Money Market (+16%) Noninterest-Bearing Checking (+0.1%) Interest-Bearing Checking (+7%) Savings (-7%) Local Time $100,000 & Over (+5%) Local Time Under $100,000 (+7%) Sweep Accounts (+14%) Brokered Deposits (+45%) (%) Reflects full year 2025 compared to full year 2024
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22 Deposit Balances* Financial Performance Deposits comprised primarily of business accounts *As of December 31, 2025, excludes brokered deposits ($ in thousands) December 31, 2025 December 31, 2024 Personal Business Personal Business Noninterest-Bearing Checking $ 216,100 1,123,700 194,300 1,070,200 Interest Checking $ 249,800 707,700 183,200 555,100 Savings $ 269,900 40,400 190,300 31,600 Money Market $ 505,400 1,192,200 421,300 1,095,200 Certificates of Deposit $ 558,600 290,200 514,900 292,600 Total Deposits $ 1,799,800 3,354,200 1,504,000 3,044,700 Personal 35% Business 65%
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23 Large Depositors (Includes Sweep Account Balances) Financial Performance Stable Large Depositors Depositors with over $5 million as of December 31, 2025 Business/Individual – 65 relationships aggregating $1.5 billion Governmental – 22 relationships aggregating $0.1 billion Total – 87 relationships aggregating $1.6 billion Depositors with over $5 million as of December 31, 2020 (5 years ago), consisted of 66 relationships aggregating $959 million Aggregate Balance of the 50 Depositors ($ millions) $501 $1,085 $0 $200 $400 $600 $800 $1,000 $1,200 December 31, 2020 December 31, 2025 46 relationships still maintain deposits over $5 million as of December 31, 2025
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24 Capital Ratios Financial Performance Both of Mercantile Bank Corp’s subsidiaries, Mercantile Bank and Eastern Michigan Bank, have regulatory capital levels in excess of the amounts necessary to be categorized as “well capitalized.” 0.00% 2.00% 4.00% 6.00% 8.00% 10.00% 12.00% 14.00% 16.00% 4th Qtr 2024 1st Qtr 2025 2nd Qtr 2025 3rd Qtr 2025 4th Qtr 2025 Mercantile Bank Corporation Consolidated Capital Ratios Tier 1 leverage capital ratio Common equity risk-based capital ratio Tier 1 risk-based capital ratio Total risk-based capital ratio
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25 Sources of Liquidity* Financial Performance *As of December 31, 2025 Source Availability ($ in thousands) Unsecured Federal Funds Lines of Credit $ 50,000 FHLB of Indianapolis Advance Program $ 777,000 Unpledged Investments $ 491,000 Federal Reserve Discount Window $ 157,000
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26 Financial Performance 1st QUARTER 2nd QUARTER 3rd QUARTER 4th QUARTER Loan Growth (annualized) 5.00%-7.00% 5.00%-7.00% 5.00%-7.00% 5.00%-7.00% Net Interest Margin 3.55%-3.65% 3.60%-3.70% 3.65%-3.75% 3.70%-3.80% Fee Income $10.0MM – $11.0MM $11.0MM – $12.0MM $11.0MM – $12.0MM $10.5MM – $11.5MM Overhead Costs1 $37.5MM – $38.5MM $39.0MM – $40.0MM $39.0MM – $40.0MM $39.0MM – $40.0MM Federal Tax Rate2 17% 17% 17% 17% PERFORMANCE METRICS PRIME / SOFR RATES • No rate changes during 2026 Thoughts on 2026 1. Excludes anticipated costs associated with core conversion 2. Reflects expected transferable energy tax credits acquisitions
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Strong Credit Culture Diversified Lending Loan Portfolio Characteristics
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28 Strong Credit Culture *As of December 31, 2025 RETAIL LOANS 1 – 4 Family Mortgages $ 790,900 17% Other Consumer $ 112,300 2% Total Retail Loans $ 903,200 19% TOTAL LOANS $ 4,821,900 100% ($ in thousands) Balance Percentage COMMERCIAL LOANS Commercial and Industrial $ 1,374,500 29% Real Estate – NonOwner Occupied $ 1,110,700 23% Real Estate – Owner Occupied $ 778,900 16% Real Estate – Multi-Family & Residential Rental $ 537,200 11% Real Estate – Land Development & Residential Construction $ 117,400 2% Total Commercial Loans $ 3,918,700 81% Total Loans*
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29 Asset Quality Metrics Quarter Trends ($ in thousands) • Continued strong asset quality metrics • 12 basis points nonperforming assets to total assets as of December 31, 2025 Strong Credit Culture 12/31/24 3/31/25 6/30/25 9/30/25 12/31/25 Net loan charge-offs (recoveries) $ 3,600 (100) (100) (500) 2,600 Net loan charge-offs (recoveries) to average loans (annualized) 0.31% (0.01%) (0.01%) (0.05%) 0.23% Allowance to loans 1.18% 1.22% 1.24% 1.28% 1.21% Nonperforming loans to total loans 0.12% 0.12% 0.21% 0.21% 0.16% Nonperforming assets to total assets 0.09% 0.09% 0.16% 0.16% 0.12%
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30 Lending Commitments ($ in millions) *Commitments to make loans generally reflect our binding obligations to existing and prospective commercial customers to extend credit, including line of credit facilities secured by accounts receivable and inventory, and term debt secured by either real estate or equipment. Strong Credit Culture 12/31/24 3/31/25 6/30/25 9/30/25 12/31/25 CONSTRUCTION LOANS Commercial $ 245 210 237 216 237 Residential $ 30 30 35 37 34 COMMITMENTS TO MAKE LOANS* $ 296 234 165 307 297 TOTAL $ 571 474 437 560 568 In 4Q25, the reserve for unfunded commitment increased by $1 million
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31 Strong Credit Culture *As of December 31, 2025 Composition – Commercial Loans* Internal Credit Risk Grade Groupings Commercial & Industrial Commercial Vacant Land, Land Dev., & Residential Construction Commercial Real Estate – Owner Occupied Commercial Real Estate – Non-Owner Occupied Commercial Real Estate – Multi-Family & Residential Rental Grades 1-4 $ 655.4 55.9 493.7 434.7 151.5 Grades 5-7 $ 704.7 61.3 277.7 673.3 385.7 Grades 8-9 $ 14.4 0.2 7.5 2.7 0.0 Total Commercial $ 1,374.5 117.4 778.9 1,110.7 537.2 CREDIT RISK PROFILE BY INTERNAL CREDIT RISK GRADES ($ in millions) Real Estate, Rental & Leasing 40% Agriculture, Oil & Gas Extraction & Utilities 1% Services 19% Construction 6% Manufacturing 18% Wholesale Trade 5% Retail Trade 5% Transportation & Warehousing 2% Information <1% Finance & Insurance 3% Commercial & Industrial 36% Commercial Vacant Land, Land Development & Residential Construction 3% Commercial Real Estate - Owner Occupied 20% Commercial Real Estate - Non-Owner Occupied 28% Commercial Real Estate - Multi-Family & Residential Rental 13%
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32 Rate Type – Commercial Loans* ($ in millions) Strong Credit Culture *As of December 31, 2025 Balance Floating Rate Commercial Loans $ 3,046,800 Fixed Rate Commercial Loans $ 871,900 Total Commercial Loans $ 3,918,700 RATE TYPE BREAKDOWN 78% 22% Floating Rate Commercial Loans Fixed Rate Commercial Loans
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33 Past Due Loans Strong Credit Culture Commercial and Retail Past Due Loans* ($ in millions) *As of December 31, 2025. Excludes current non-accrual loans. 30–59 Days Past Due 60–89 Days Past Due > 89 Days Past Due Total Past Due Current Total Loans Recorded Balance > 89 Days & Accruing Commercial and Industrial $ 0.3 – – 0.3 1,374.2 1,374.5 – Vacant Land, Land Development, Residential Construction $ 0.1 – – 0.1 117.3 117.4 – Real Estate – Owner Occupied $ 0.2 – – 0.2 778.7 778.9 – Real Estate – Non-Owner Occupied $ – – 2.7 2.7 1,108.0 1,110.7 – Real Estate – Multi-Family and Residential Rental $ – – – – 537.2 537.2 – Total Commercial $ 0.6 - 2.7 3.3 3,915.3 3,918.7 – 1–4 Family Mortgages $ 1.0 0.4 0.2 1.6 789.3 790.9 – Other Consumer Loans $ 0.6 – – 0.6 111.7 112.3 – Total Retail $ 1.6 0.4 0.2 2.2 901.0 903.2 – Total Past Due Loans $ 2.2 0.4 2.9 5.5 4,816.4 4,821.9 –
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34 Strong Credit Culture *As of December 31, 2025 $0.0 $1.0 $2.0 $3.0 $4.0 $5.0 $6.0 $7.0 $8.0 Millions 30-89 Days Past Due 90 Days & Over Past Due Over 89 Days Past Due & Accruing Past Due Loans 11 bps* as % of Total Loans
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35 FDIC Commercial Real Estate Lending Concentration Guideline for Mercantile Bank Strong Credit Culture Commercial Real Estate Loans / Total Regulatory Capital Generally not to exceed 300% 200% 210% 220% 230% 240% 250% 260% 270% 280% 290% 300% 12/31/20259/30/20256/30/20253/31/202512/31/2024
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36 Non-Owner Occupied Commercial Real Estate Lending* Strong Credit Culture • 87% of office NOO CRE is located in Michigan • 34% of office is medical • Increase in nonperforming NOO CRE loans related to one commercial loan relationship *As of December 31, 2025 **Retail is defined using S&P GICS classifications for the Retailing Industry, in addition to restaurants and NOO- CRE with direct exposure to multi use retailing businesses. 7% 5% 5% 3% 1% 1% Current NOO CRE Composition Industrial Office Retail Hotel Assisted Living Other Remainder of Total Loans ($ in thousands) Balance % of NOO CRE % of Total Loans Industrial $ 341,500 31% 7% Office $ 246,000 22% 5% Retail** $ 240,200 22% 5% Hotel $ 152,300 14% 3% Assisted Living $ 69,800 6% 2% Other $ 60,900 5% 1% Total $ 1,110,700 100% 23% $0 $1,000 $2,000 $3,000 $4,000 $5,000 $6,000 Historical NonPerforming NOO CRE (ending balance, $ in thousands) NonPerforming NOO CRE ($ in thousands)
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Company Overview
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38 The largest bank founded, headquartered, and serving in Michigan. Company Overview OVERVIEW • Founded in 1997 in Grand Rapids, MI. • $6.8 billion in total assets. • Acquisition of Eastern Michigan Financial Corporation closed December 31, 2025 • More than 750 employees and over 50 locations . • Offers more than 75 products and services supporting commercial, business, governmental, educational, nonprofit, treasury and personal banking needs. WE INVEST IN OUR COMMUNITIES BY: • Volunteering more than 24,000 hours supporting more than 900 organizations. • Teaching more than 300 financial wellness classes. • Donating over $1,000,000 to local non-profits and fundraisers. • Employing 40+ interns each year, investing in the next generation. MB EMB (1) (1) Excludes one loan production office (66 N. Howard Ave, Croswell).
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39 Company Overview Strategic Areas of Focus CLIENT EXPERIENCE • Deploy new client onboarding and servicing technologies • Enhance existing technology solutions • Equip all sales personnel with the training, tools, and resources necessary to serve clients • Enhance understanding of client behaviors and needs GROWTH • Increase local deposits • Build robust business banking reputation and portfolio • Expand reach of traditional and digital marketing • Grow commercial loan portfolio in prudent fashion • Evaluate complementary M&A targets • Expand presence in Southeast Michigan PEOPLE AND CULTURE • Foster culture where all employees feel valued and empowered • Build breadth and depth of employee training program • Create an engaging workplace • Enhance inter-departmental communications • Maintain competitive compensation and benefit packages • Amplify the Banks’ impact on the communities they serve EFFICIENCY • Deploy data analytics and robotic process automation • Pursue process efficiency in all functional areas • Explore use cases for artificial intelligence deployment • Deploy new and upgraded software RISK MANAGEMENT • Maintain and enhance existing credit culture • Continued enhancement of interest rate risk management principles and associated reporting • Maintain effective compliance management practices • Expand enterprise risk management practices, monitoring, and reporting
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40 Product Offering Company Overview Highly competitive commercial and retail capabilities. PEER PRODUCT MBWM BAC JPM FITB CMA Autobooks for Small Business with Electronic Invoicing and Receivables Bill Payment and ACH Cash Management Credit Card Rewards Electric Vehicle Car Loan Health Savings Account In-House Payroll Services and Human Capital Management Solutions Integrated Payables Integrated Receivables Merchant Services Personal Finance Management (Within Online and Mobile Banking) Remote Deposit Capture