Mercantile Bank Corp. reported first-quarter 2026 net income of $22.7 million, up from $19.5 million a year earlier, while diluted earnings per share rose to $1.32 from $1.21.
On the company’s adjusted basis, net income increased to $25.2 million from the prior-year quarter, and diluted EPS climbed to $1.46 from $1.21.
Net revenue reached $67.6 million, an increase of $10.3 million, or 18.1%, from $57.3 million in the first quarter of 2025. Net interest income rose 15.1% to $55.9 million from $48.5 million, while noninterest income jumped 34.3% to $11.7 million from $8.7 million.
The net interest margin widened to 3.55% from 3.47% a year earlier. The cost of funds fell to 1.87% from 2.26%, while the yield on average earning assets declined to 5.42% from 5.73%. Loan yields slipped to 6.04% from 6.28%, while securities yields increased to 3.27% from 2.73%.
Mercantile recorded a negative provision for credit losses of $1.8 million, compared with a positive provision of $2.1 million in the first quarter of 2025.
Noninterest expense increased to $42.1 million from $31.1 million. Excluding one-time acquisition and system conversion costs, expense still rose $7.8 million, or 25.0%, from the prior-year quarter.
The effective tax rate fell to 16.9% from 18.8%.
On the balance sheet, total assets increased to $6.95 billion at March 31, 2026, up $110 million from year-end 2025. Total loans declined $5.2 million, or 0.1%, from December 31, 2025, as a $22.6 million drop in residential mortgage loans outweighed growth in commercial loans and other consumer loans. Commercial loans increased $16.7 million, or an annualized 1.7%.
Deposits rose to $5.42 billion from $5.28 billion at December 31, 2025. Local deposits grew $185 million, or an annualized 14.6%, while brokered deposits fell $50.4 million. The loan-to-deposit ratio improved to 89% from 91% at year-end 2025 and 99% a year earlier.
Tangible book value per common share increased to $37.34 from $36.78 at December 31, 2025 and from $34.42 a year earlier, rising $0.56 sequentially and $2.92 year over year.
Return on average assets was 1.4% and return on average equity was 12.5%; on the adjusted basis, those figures were 1.5% and 14.0%. The market has reacted to these announcements by moving the company's shares 0.96% to a price of $49.78. For more information, read the company's full 8-K submission here.
