Mercantile Bank reported net income of $22.8 million, or $1.40 per diluted share, for the fourth quarter of 2025, up from $19.6 million, or $1.22 per diluted share, in the same period a year earlier. Net revenue rose 6.0% to $62.1 million, driven by a 5.5% increase in net interest income to $51.0 million and an 8.7% gain in noninterest income to $11.1 million. The bank’s net interest margin expanded slightly to 3.43%, bolstered by growth in earning assets and marginally higher yields on securities, even as loan yields edged lower due to rate cuts. The effective cost of funds declined to 2.09%, reflecting lower funding costs on deposits.

For the full year, Mercantile Bank delivered net income of $88.8 million, or $5.47 per diluted share, compared with $79.6 million, or $4.93 per share, in 2024. Total net revenue climbed 4.8% to $243 million, with net interest income up 5.2% to $201 million and noninterest income rising 3.0% to $41.6 million. Return on average assets reached 1.4%, and return on average equity stood at 14.1%. Tangible book value per common share increased 11% year-over-year to $36.78, underpinned by net interest income expansion and growth in fee-based services such as treasury management, mortgage banking and payroll services.

Mercantile maintained low levels of nonperforming assets, past-due loans and charge-offs throughout 2025, supported by a negative provision for credit losses of $0.7 million in Q4 following improved economic forecasts and favorable loan mix shifts. The bank reduced its loan-to-deposit ratio from 98% at year-end 2024 to 95% by December 31, 2025 (91% including the impact of its December 31 acquisition of Eastern Michigan Financial Corporation). Eastern brought $572 million in assets and expands Mercantile’s footprint in East and Southeast Michigan. Regulatory and tangible capital ratios remained well above regulatory minimums, bolstering the bank’s capacity for organic growth and future M&A opportunities.