Mercantile Bank (MBWM) risk factors, FY2025 10-K

Mercantile Bank's FY2025 10-K, filed Feb 27, 2026, lists 118 risk factors. Against the prior year's 116: 32 new, 30 dropped, 70 substantially reworded.

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Risk factors listed
1180 groups
New this year
32vs 116 last year
Dropped
30since the prior 10-K
Substantially reworded
70of those kept
Section length
44k wordsItem 1A

What the changes say

  • Credit risk management relies on subjective estimates and appraisals during shifting economic conditions.
  • Liquidity must be maintained for large volumes of unfunded loan commitments and borrowings.
  • Interest income fluctuates due to changing asset yields and FOMC rate environments.

What changed since the prior 10-K

New

  • New

    $ 3,303,638 $ 1,095,473 $ 422,777 $ 4,821,888

    Lending policies rely on estimates and collateral evaluations that can change rapidly with economic conditions.

  • New

    41,271 3,918,662 1.05 4,843 0.12 852.18 2,098 0.06

    The allowance for credit losses and nonaccrual loans are distributed across various commercial and retail loan portfolios.

  • New

    $ 49,914 $ 4,303,758 1.16 % $ 3,415 0.08 % 1,461.61 % $ 32 0.00 %

    The ratio of the allowance for credit losses to nonperforming loans changed compared to prior periods.

  • New

    $ 9,958 $ 6,242 $ 3,716 $ (2,459 ) $ 5,927 $ (8,386 )

    Interest income increased due to asset growth despite lower average earning asset yields driven by FOMC rate cuts.

  • New

    1,191 2,061 811 1,141 5,204

    Unfunded loan commitments of $2.47 billion and standby letters of credit require ongoing liquidity management.

  • New

    $ 3,540,030 $ 306,745 $ 1,665,969 $ 847,103 $ 6,835,219

    Floating rate loans tied to interest rate floors are treated as fixed rate assets based on maturity dates.

  • New

    Critical Audit Matter Description

    Management estimates the allowance for credit losses using historical loss rates adjusted for macroeconomic forecasts.

  • New

    How the Critical Audit Matter was Addressed in the Audit

    Auditors test internal controls over management's determination of qualitative factor adjustments for credit losses.

  • New

    We have evaluated subsequent events for potential recognition and/or disclosure through the date these financial statements were issued

    Financial statement preparation requires subjective management estimates, particularly for credit losses and fair value measurements.

  • New

    $ (23,995 ) $ (49,825 ) $ (50,487 )

    Interest rate swap derivatives are used to manage interest rate risk but none were designated as hedges in 2025.

  • New

    $ 793,422 $ 737 $ (63,807 ) $ 730,352

    Securities held in various categories carry significant unrealized losses depending on the duration of the loss position.

  • New

    1-4 Family Mortgages: Residential mortgage loans are susceptible to weakening general economic conditions and increases in unemployment rates and declining real estate values

    Residential mortgages and consumer loans face risks from weak economic conditions, unemployment, and declining real estate values.

  • New

    3,918,662 81.3 3,707,304 80.6 5.7

  • New

    $ 4,821,888 100.0 % $ 4,600,781 100.0 % 4.8 %

  • New

    580 0 2,761 3,341 3,915,321 3,918,662 0

  • New

    $ 2,157 $ 449 $ 2,922 $ 5,528 $ 4,816,360 $ 4,821,888 $ 0

  • New

    $ 1,374,522 $ 117,373 $ 778,869 $ 1,110,674 $ 537,224

  • New

    $ 0 $ 0 $ 2,800 $ 0 $ 0 $ 0 $ 2,800 $ 0 $ 2,800

  • New

    $ 0 $ 4 $ 2,884 $ 0 $ 0 $ 0 $ 2,888 $ 7 $ 2,895

  • New

    $ 0 $ 7 $ 85 $ 22 $ 61 $ 3 $ 178 $ 0 $ 178

  • New

    $ 12,576 $ 478 $ 7,629 $ 15,074 $ 5,514 $ 14,199 $ 2,638 $ 83 $ 58,191

  • New

    $ 0 $ 9,250 $ 0 $ 0 $ 6,616 $ 0

  • New

    NOTE 8 - OTHER BORROWINGS

  • New

    Our unamortized debt issuance costs were $0.3 million and $0.7 million as of December 31, 2025 and 2024, respectively

  • New

    The statutory tax rate was 21% for 2025, 2024 and 2023. We did not record any state income taxes

  • New

    $ 27,050 $ 0 $ 27,050 $ 0

  • New

    NOTE 17 – BUSINESS COMBINATIONS

  • New

    51,467 31,090 20,377 38,902 34,428 4,474

  • New

    NOTE 21 – BUSINESS SEGMENT INFORMATION

  • New

    4.7 Description of Securities Registered Under Section 12 of the Exchange Act#

  • New

    10.23 2025 Mercantile Executive Officer Bonus Plan, incorporated by reference to exhibit 10.1 of our Form 8-K filed March 20, 2025*

  • New

    10.25 Form of Voting Agreement, incorporated by reference to our Form 8-K filed July 22, 2025

Dropped

  • Dropped

    Other consumer-related loans totaled $65.9 million, or 1.4% of total loans, at December 31, 2024. We expect this loan portfolio segment to remain relatively steady in dollar amount but decline as a percent of total loans in future periods as the commercial loan segment grows

  • Dropped

    $ 3,002,166 $ 1,101,671 $ 496,944 $ 4,600,781

  • Dropped

    28,040 3,131,830 0.90 6,272 0.20 447.07 (115 ) (0.00 )

  • Dropped

    $ 42,246 $ 3,916,619 1.08 % $ 7,728 0.20 % 546.66 % $ (733 ) (0.02 )%

  • Dropped

    $ (2,459 ) $ 5,008 $ (7,467 ) $ 35,301 $ 6,463 $ 28,838

  • Dropped

    1,053 2,256 1,727 1,037 6,073

  • Dropped

    $ 3,179,590 $ 227,883 $ 1,412,045 $ 863,458 $ 6,052,161

  • Dropped

    Allowance for Credit Losses – General Reserve

  • Dropped

    Change in Accounting Principle

  • Dropped

    Operating Segments: We conduct our operations through a single business segment, which derives interest and noninterest income through our banking products and services and investment securities. All of our income relates to our operations in the United States

  • Dropped

    $ 680,998 $ 2,206 $ (66,112 ) $ 617,092

  • Dropped

    Other Consumer Loans: Risks common to these loans include regulatory risks, unemployment, and changes in local economic conditions as well as the inability to monitor collateral consisting of personal property

    Consumer-related loan balances and scheduled fixed-rate loan repayments.

  • Dropped

    3,707,304 80.6 3,415,299 79.4 8.5

    Credit review guidelines and procedures meant to minimize lending risks.

  • Dropped

    $ 4,600,781 100.0 % $ 4,303,758 100.0 % 6.9 %

  • Dropped

    4 0 319 323 3,414,976 3,415,299 0

  • Dropped

    $ 1,254,586 $ 74,753 $ 717,667 $ 1,035,684 $ 332,609

  • Dropped

    $ 0 $ 0 $ 0 $ 0 $ 0 $ 0 $ 0 $ 218 $ 218

    Retail loan portfolio segment breakdowns and allowance metrics for 2024.

  • Dropped

    $ 0 $ 14 $ 0 $ 0 $ 0 $ 40 $ 54 $ 218 $ 272

    Ratio of allowance to nonperforming loans for 2024, 2023, and 2022.

  • Dropped

    $ 0 $ 174 $ 0 $ 0 $ 0 $ 240 $ 414 $ 0 $ 414

  • Dropped

    industrial construction occupied occupied rental mortgages loans Unallocated Total

  • Dropped

    $ 11,165 $ 367 $ 7,671 $ 10,919 $ 3,667 $ 18,702 $ 1,936 $ 27 $ 54,454

  • Dropped

    industrial construction occupied occupied rental mortgages and other Unallocated Total

  • Dropped

    $ 0 $ 6,616 $ 0 $ 0 $ 28,813 $ 0

    Interest income growth details for 2024 compared to 2023.

  • Dropped

    NOTE 8 - FEDERAL HOME LOAN BANK OF INDIANAPOLIS ADVANCES

  • Dropped

    NOTE 8 - FEDERAL HOME LOAN BANK OF INDIANAPOLIS ADVANCES (Continued)

  • Dropped

    The statutory tax rate was 21% for 2024, 2023 and 2022

    Unfunded loan commitments and standby letters of credit totals at year-end 2024.

  • Dropped

    In addition, stock grants to directors as retainer payments during the years 2020 through 2022 were from the Stock Incentive Plan of 2020, while stock grants to directors as retainer payments during 2024 and 2023 were from the Stock Incentive Plan of 2023

  • Dropped

    NOTE 17 – EARNINGS PER SHARE

  • Dropped

    NOTE 19 – SUBORDINATED NOTES

    Liability distributions and GAP percentages for 2024.

  • Dropped

    NOTE 20 – REGULATORY MATTERS (Continued)

Reworded

  • 100% rewritten

    NOTE 1 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)

    Replaced the use of estimates summary with revenue recognition policies under ASC Topic 606.

    Was: NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)

  • 100% rewritten

    NOTE 8 - OTHER BORROWINGS (Continued)

    Replaced time deposit maturity disclosures with details on FHLBI amortizing advances and scheduled principal payments.

    Was: NOTE 6 – DEPOSITS (Continued)

  • 100% rewritten

    $ 0 $ 4 $ 84 $ 0 $ 0 $ 0 $ 88 $ 7 $ 95

    Updated internal credit risk grade groupings and write-off figures for commercial real estate portfolios.

    Was: $ 0 $ 14 $ 0 $ 0 $ 0 $ 40 $ 54 $ 0 $ 54

  • 99% rewritten

    NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)

    Replaced off-balance-sheet financial instrument disclosures with debt securities classification and impairment policies.

  • 98% rewritten

    2025 2024 2023 2022 2021 Prior Term Total Loans Total

    Updated loan portfolio balances, credit quality grades, and gross write-off figures for commercial and industrial loans.

    Was: 2024 2023 2022 2021 2020 Prior Term Total Loans Total

  • 97% rewritten

    $ 0 $ 0 $ 0 $ 0 $ 0 $ 0 $ 0 $ 0 $ 0

    Updated credit risk grade distributions and balances for owner-occupied and non-owner-occupied real estate loans.

  • 95% rewritten

    Industrial Construction Occupied Occupied Rental

    Updated aggregate internal credit risk grade groupings across all commercial loan categories.

  • 94% rewritten

    Months Months Years Years Total

    Updated asset maturity schedules, available-for-sale securities, and interest-earning deposit figures for 2025.

  • 94% rewritten

    Net Charge-Offs to Average Loans

  • 93% rewritten

    $ 1,287,308 $ 66,936 $ 748,837 $ 1,128,404 $ 475,819

  • 92% rewritten

    NOTE 4 - PREMISES AND EQUIPMENT, NET

  • 89% rewritten

    17 0 864 881 3,706,423 3,707,304 0

  • 88% rewritten

    Provision for Credit Losses

  • 88% rewritten

    Out-of-area time deposits consist of deposits obtained from depositors outside of our primary market areas exclusively through deposit brokers

  • 87% rewritten

    NOTE 9 - FEDERAL INCOME TAXES

  • 87% rewritten

    Past Due Past Due Past Due Past Due Current Loans Accruing

  • 87% rewritten

    We recorded net income of $88.8 million, or $5.47 per basic and diluted share, for 2025, compared to net income of $79.6 million, or $4.93 per basic and diluted share, for 2024. Diluted earnings per share increased $0.54, or 11.0%, during 2025 compared to 2024

    Was: We recorded net income of $79.6 million, or $4.93 per basic and diluted share, for 2024, compared to net income of $82.2 million, or $5.13 per basic and diluted share, for 2023. Diluted earnings per share decreased $0.20, or 3.9%, during 2024 compared to 2023

  • 85% rewritten

    $ 0 $ 0 $ 0 $ 33 $ 0 $ 0 $ 33 $ 0 $ 33

  • 84% rewritten

    NOTE 19 - REGULATORY MATTERS (Continued)

    Was: NOTE 20 - REGULATORY MATTERS (Continued)

  • 83% rewritten

    $ 0 $ 0 $ 0 $ 0 $ 3,741 $ 0 $ 3,741 $ 9 $ 3,750

  • 83% rewritten

    ENVIRONMENTAL, SOCIAL, AND GOVERNANCE MATTERS

  • 83% rewritten

    ON INTERNAL CONTROL OVER FINANCIAL REPORTING

  • 82% rewritten

    NOTE 3 – LOANS AND ALLOWANCE FOR CREDIT LOSSES (Continued)

  • 81% rewritten

    NOTE 11 – RELATED PARTIES

  • 81% rewritten

    Supplemental disclosures of cash flows information

  • 81% rewritten

    NOTE 15 – FAIR VALUES OF FINANCIAL INSTRUMENTS

  • 80% rewritten

    28,047 3,415,299 0.82 319 0.01 8,792.16 (48 ) (0.00 )

  • 80% rewritten

    NOTE 10 – STOCK-BASED COMPENSATION

  • 79% rewritten

    Assets and Liabilities Measured at Fair Value on a Recurring Basis

  • 79% rewritten

    Custodial escrow balances, which are reported as deposits on the Consolidated Balance Sheets, maintained in connection with serviced loans were $14.5 million and $10.9 million as of December 31, 2025 and 2024, respectively

    Was: Custodial escrow balances, which are reported as deposits on the Consolidated Balance Sheets, maintained in connection with serviced loans were $10.9 million and $10.1 million as of December 31, 2024 and 2023, respectively

  • 78% rewritten

    There were no sales or purchases of Level 3 during 2025. The $0.4 million reduction in Level 3 municipal general obligation bonds during 2025 reflects the transfer to Level 2 due to a change in observable inputs

    Was: There were no sales, purchases or transfers in or out of Level 3 during 2024. The $0.1 million reduction in Level 3 municipal general obligation bonds during 2024 reflects the scheduled maturities of such bonds

  • 77% rewritten

    At year-end 2025 and 2024, the rates on existing off-balance sheet instruments were substantially equivalent to current market rates, considering the underlying credit standing of the counterparties

    Was: At year-end 2024 and 2023, the rates on existing off-balance sheet instruments were substantially equivalent to current market rates, considering the underlying credit standing of the counterparties

  • 77% rewritten

    See Note 1 - Significant Accounting Policies in this Annual Report for further detailed descriptions of our estimation process and methodology related to the allowance. See also Note 3 - Loans and Allowance for Credit Losses in this Annual Report for further information regarding our loan portfolio and allowance

    Was: See Note 1 - Significant Accounting Policies in this Form 10-K for further detailed descriptions of our estimation process and methodology related to the allowance. See also Note 3 - Loans and Allowance for Credit Losses in this Form 10-K for further information regarding our loan portfolio and allowance

  • 76% rewritten

    NOTE 9 - FEDERAL INCOME TAXES (Continued)

  • 76% rewritten

    NOTE 19 - REGULATORY MATTERS

    Was: NOTE 20 - REGULATORY MATTERS

  • 75% rewritten

    $ 88,753 $ 79,593 $ 82,217

    Was: $ 79,593 $ 82,217 $ 61,063

  • 73% rewritten

    Mortgage servicing rights result from our mortgage loan origination activities. Late and ancillary fees, included as part of mortgage banking income and reported as noninterest income in the Consolidated Statements of Income, aggregated less than $0.1 million during 2025 and 2024

    Was: Mortgage servicing rights result from our mortgage loan origination activities. Late and ancillary fees, included as part of mortgage banking income and reported as noninterest income in the Consolidated Statements of Income, aggregated less than $0.1 million during 2024 and 2023

  • 73% rewritten

    NOTE 22 – SUBSEQUENT EVENTS

  • 69% rewritten

    Advertising Costs: Advertising costs are expensed as incurred

  • 66% rewritten

    Although we believe the allowance is adequate to absorb loan losses in our originated loan portfolio as they arise, there can be no assurance that we will not sustain loan losses in any given period that could be substantial in relation to, or greater than, the size of the allowance

  • 66% rewritten

    No securities were sold during the last three years

  • 63% rewritten

    NOTE 5 – MORTGAGE LOAN SERVICING

  • 62% rewritten

    Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101)

  • 58% rewritten

    NOTE 18 – VARIABLE INTEREST ENTITIES (Continued)

  • 57% rewritten

    Federal Income Tax Expense

  • 51% rewritten

    Item 15. Exhibits and Financial Statement Schedules

  • 49% rewritten

    Shareholder Return Performance Graph

  • 49% rewritten

    Loans listed under Term Extension were generally granted a series of short-term maturity extensions as part of the workout process and associated forbearance agreement

  • 48% rewritten

    Opinion on the Consolidated Financial Statements

  • 47% rewritten

    Assets and Liabilities Measured at Fair Value on a Nonrecurring Basis

  • 44% rewritten

    President and Chief Executive Officer

  • 43% rewritten

    NOTE 7 – SECURITIES SOLD UNDER AGREEMENTS TO REPURCHASE

  • 43% rewritten

    NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

  • 43% rewritten

    Depreciation expense totaled $5.2 million for 2025, and $6.0 million for both 2024 and 2023

    Was: Depreciation expense totaled $6.0 million in 2024, 2023 and 2022

  • 43% rewritten

    Commitments to make commercial loans generally reflect our binding obligations to existing and prospective customers to extend credit, including line of credit facilities secured by accounts receivable and inventory, and term loans secured by either real estate or equipment

  • 43% rewritten

    Market Information and Holders

  • 41% rewritten

    Where applicable, we tested the accuracy and completeness of data used by management in the measurement of qualitative factor adjustments or vouched factors to relevant external data sources

  • 40% rewritten

    Definition and Limitations of Internal Control over Financial Reporting

  • 38% rewritten

    NOTE 18 – VARIABLE INTEREST ENTITIES

  • 34% rewritten

    There have been no significant changes in our internal control over financial reporting during the year ended December 31, 2025, that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting

    Was: There have been no significant changes in our internal control over financial reporting during the year ended December 31, 2024, that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting

  • 34% rewritten

    Local or regional conditions that depart from the conditions and forecasts for the entire country

  • 33% rewritten

    $ 2,472,603 $ 2,101,302 $ 2,113,504

    Was: $ 2,101,302 $ 2,113,504 $ 1,908,294

  • 33% rewritten

    NOTE 2 – SECURITIES (Continued)

  • 32% rewritten

    Notes to Consolidated Financial Statements

  • 30% rewritten

    Of the restricted stock shares granted in 2025 and 2023, a total of 16,589 shares and 25,239 shares, respectively, are performance-based awards made to our Named Executive Officers at the target level and are subject to the attainment of pre-determined performance goals. There were no shares granted in 2024

    Was: Of the restricted stock shares granted in 2023 and 2022, a total of 25,239 shares and 26,112 shares, respectively, are performance-based awards made to our Named Executive Officers at the target level and are subject to the attainment of pre-determined performance goals

  • 28% rewritten

    NOTE 14 – DERIVATIVES AND HEDGING ACTIVITIES

  • 28% rewritten

    Mortgage-backed securities are categorized by expected maturities based upon prepayment trends as of December 31, 2025

    Was: Mortgage-backed securities are categorized by expected maturities based upon prepayment trends as of December 31, 2024

  • 27% rewritten

    FORWARD-LOOKING STATEMENTS

  • 25% rewritten

    Opinion on Internal Control over Financial Reporting

  • 20% rewritten

    Issuer Purchases of Equity Securities

All 118 risk factors

Headings as the filing states them, in filing order.

Other

  1. 01Market Information and Holders43% rewritten
  2. 02Issuer Purchases of Equity Securities20% rewritten
  3. 03Shareholder Return Performance Graph49% rewritten
  4. 04Financial Statements and Supplementary Data
  5. 05There have been no significant changes in our internal control over financial reporting during the year ended December 31, 2025, that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting34% rewritten
  6. 06Directors, Executive Officers and Corporate Governance
  7. 07Item 15. Exhibits and Financial Statement Schedules51% rewritten
  8. 08Notes to Consolidated Financial Statements32% rewritten
  9. 09FORWARD-LOOKING STATEMENTS27% rewritten
  10. 10CRITICAL ACCOUNTING ESTIMATES
  11. 11ENVIRONMENTAL, SOCIAL, AND GOVERNANCE MATTERS83% rewritten
  12. 12$ 3,303,638 $ 1,095,473 $ 422,777 $ 4,821,888New
  13. 13Net Charge-Offs to Average Loans94% rewritten
  14. 1441,271 3,918,662 1.05 4,843 0.12 852.18 2,098 0.06New
  15. 1533,789 3,707,304 0.91 2,767 0.07 1,221.14 3,194 0.09
  16. 1628,047 3,415,299 0.82 319 0.01 8,792.16 (48 ) (0.00 )80% rewritten
  17. 17$ 49,914 $ 4,303,758 1.16 % $ 3,415 0.08 % 1,461.61 % $ 32 0.00 %New
  18. 18739.4 % 948.3 % 1,461.7 %
  19. 19See Note 1 - Significant Accounting Policies in this Annual Report for further detailed descriptions of our estimation process and methodology related to the allowance. See also Note 3 - Loans and Allowance for Credit Losses in this Annual Report for further information regarding our loan portfolio and allowance77% rewritten
  20. 20Although we believe the allowance is adequate to absorb loan losses in our originated loan portfolio as they arise, there can be no assurance that we will not sustain loan losses in any given period that could be substantial in relation to, or greater than, the size of the allowance66% rewritten
  21. 21We recorded net income of $88.8 million, or $5.47 per basic and diluted share, for 2025, compared to net income of $79.6 million, or $4.93 per basic and diluted share, for 2024. Diluted earnings per share increased $0.54, or 11.0%, during 2025 compared to 202487% rewritten
  22. 22$ 9,958 $ 6,242 $ 3,716 $ (2,459 ) $ 5,927 $ (8,386 )New
  23. 23Provision for Credit Losses88% rewritten
  24. 24Federal Income Tax Expense57% rewritten
  25. 251,191 2,061 811 1,141 5,204New
  26. 26$ 2,472,603 $ 2,101,302 $ 2,113,50433% rewritten
  27. 27Months Months Years Years Total94% rewritten
  28. 28$ 3,540,030 $ 306,745 $ 1,665,969 $ 847,103 $ 6,835,219New
  29. 29Mortgage-backed securities are categorized by expected maturities based upon prepayment trends as of December 31, 202528% rewritten
  30. 30Opinion on the Consolidated Financial Statements48% rewritten
  31. 31We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement, whether due to error or fraud
  32. 32Critical Audit Matter DescriptionNew
  33. 33How the Critical Audit Matter was Addressed in the AuditNew
  34. 34We obtained an understanding of management’s process for determining the need for qualitative factor adjustments, identifying appropriate factors, and measuring the direction and magnitude of the adjustment
  35. 35Where applicable, we tested the accuracy and completeness of data used by management in the measurement of qualitative factor adjustments or vouched factors to relevant external data sources41% rewritten
  36. 36Opinion on Internal Control over Financial Reporting25% rewritten
  37. 37Definition and Limitations of Internal Control over Financial Reporting40% rewritten
  38. 38ON INTERNAL CONTROL OVER FINANCIAL REPORTING83% rewritten
  39. 39$ 88,753 $ 79,593 $ 82,21775% rewritten
  40. 40Supplemental disclosures of cash flows information81% rewritten
  41. 41NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES43% rewritten
  42. 42We have evaluated subsequent events for potential recognition and/or disclosure through the date these financial statements were issuedNew
  43. 43NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)99% rewritten
  44. 44Local or regional conditions that depart from the conditions and forecasts for the entire country34% rewritten
  45. 45NOTE 1 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)100% rewritten
  46. 46Advertising Costs: Advertising costs are expensed as incurred69% rewritten
  47. 47$ (23,995 ) $ (49,825 ) $ (50,487 )New
  48. 48$ 793,422 $ 737 $ (63,807 ) $ 730,352New
  49. 49NOTE 2 – SECURITIES (Continued)33% rewritten
  50. 50No securities were sold during the last three years66% rewritten
  51. 51NOTE 3 – LOANS AND ALLOWANCE FOR CREDIT LOSSES
  52. 52Non-Owner Occupied Commercial Real Estate: Loans in this category are susceptible to declines in occupancy rates, business failure, and general economic conditions. Also, declines in real estate values and lack of suitable alternative use for the properties are risks for loans in this category
  53. 531-4 Family Mortgages: Residential mortgage loans are susceptible to weakening general economic conditions and increases in unemployment rates and declining real estate valuesNew
  54. 54NOTE 3 – LOANS AND ALLOWANCE FOR CREDIT LOSSES (Continued)82% rewritten
  55. 553,918,662 81.3 3,707,304 80.6 5.7New
  56. 56$ 4,821,888 100.0 % $ 4,600,781 100.0 % 4.8 %New
  57. 57Past Due Past Due Past Due Past Due Current Loans Accruing87% rewritten
  58. 58580 0 2,761 3,341 3,915,321 3,918,662 0New
  59. 59$ 2,157 $ 449 $ 2,922 $ 5,528 $ 4,816,360 $ 4,821,888 $ 0New
  60. 6017 0 864 881 3,706,423 3,707,304 089% rewritten
  61. 61Industrial Construction Occupied Occupied Rental95% rewritten
  62. 62$ 1,374,522 $ 117,373 $ 778,869 $ 1,110,674 $ 537,224New
  63. 63$ 1,287,308 $ 66,936 $ 748,837 $ 1,128,404 $ 475,81993% rewritten
  64. 64“Loss” Loans with this rating are considered uncollectable, and of such little value that continuance as an active asset is not warranted
  65. 652025 2024 2023 2022 2021 Prior Term Total Loans Total98% rewritten
  66. 66$ 0 $ 4 $ 84 $ 0 $ 0 $ 0 $ 88 $ 7 $ 95100% rewritten
  67. 67$ 0 $ 0 $ 0 $ 0 $ 0 $ 0 $ 0 $ 0 $ 097% rewritten
  68. 68$ 0 $ 0 $ 2,800 $ 0 $ 0 $ 0 $ 2,800 $ 0 $ 2,800New
  69. 69$ 0 $ 4 $ 2,884 $ 0 $ 0 $ 0 $ 2,888 $ 7 $ 2,895New
  70. 70$ 0 $ 7 $ 85 $ 22 $ 61 $ 3 $ 178 $ 0 $ 178New
  71. 71$ 0 $ 0 $ 0 $ 0 $ 3,741 $ 0 $ 3,741 $ 9 $ 3,75083% rewritten
  72. 72$ 0 $ 0 $ 0 $ 33 $ 0 $ 0 $ 33 $ 0 $ 3385% rewritten
  73. 73$ 12,576 $ 478 $ 7,629 $ 15,074 $ 5,514 $ 14,199 $ 2,638 $ 83 $ 58,191New
  74. 74$ 0 $ 9,250 $ 0 $ 0 $ 6,616 $ 0New
  75. 75Loans listed under Term Extension were generally granted a series of short-term maturity extensions as part of the workout process and associated forbearance agreement49% rewritten
  76. 76NOTE 4 - PREMISES AND EQUIPMENT, NET92% rewritten
  77. 77Depreciation expense totaled $5.2 million for 2025, and $6.0 million for both 2024 and 202343% rewritten
  78. 78NOTE 5 – MORTGAGE LOAN SERVICING63% rewritten
  79. 79Custodial escrow balances, which are reported as deposits on the Consolidated Balance Sheets, maintained in connection with serviced loans were $14.5 million and $10.9 million as of December 31, 2025 and 2024, respectively79% rewritten
  80. 80Mortgage servicing rights result from our mortgage loan origination activities. Late and ancillary fees, included as part of mortgage banking income and reported as noninterest income in the Consolidated Statements of Income, aggregated less than $0.1 million during 2025 and 202473% rewritten
  81. 81Out-of-area time deposits consist of deposits obtained from depositors outside of our primary market areas exclusively through deposit brokers88% rewritten
  82. 82NOTE 7 – SECURITIES SOLD UNDER AGREEMENTS TO REPURCHASE43% rewritten
  83. 83NOTE 8 - OTHER BORROWINGSNew
  84. 84NOTE 8 - OTHER BORROWINGS (Continued)100% rewritten
  85. 85Our unamortized debt issuance costs were $0.3 million and $0.7 million as of December 31, 2025 and 2024, respectivelyNew
  86. 86NOTE 9 - FEDERAL INCOME TAXES87% rewritten
  87. 87NOTE 9 - FEDERAL INCOME TAXES (Continued)76% rewritten
  88. 88The statutory tax rate was 21% for 2025, 2024 and 2023. We did not record any state income taxesNew
  89. 89NOTE 10 – STOCK-BASED COMPENSATION80% rewritten
  90. 90Of the restricted stock shares granted in 2025 and 2023, a total of 16,589 shares and 25,239 shares, respectively, are performance-based awards made to our Named Executive Officers at the target level and are subject to the attainment of pre-determined performance goals. There were no shares granted in 202430% rewritten
  91. 91NOTE 11 – RELATED PARTIES81% rewritten
  92. 92NOTE 12 – COMMITMENTS AND OFF-BALANCE-SHEET RISK
  93. 93At year-end 2025 and 2024, the rates on existing off-balance sheet instruments were substantially equivalent to current market rates, considering the underlying credit standing of the counterparties77% rewritten
  94. 94Commitments to make commercial loans generally reflect our binding obligations to existing and prospective customers to extend credit, including line of credit facilities secured by accounts receivable and inventory, and term loans secured by either real estate or equipment43% rewritten
  95. 95NOTE 14 – DERIVATIVES AND HEDGING ACTIVITIES28% rewritten
  96. 96NOTE 15 – FAIR VALUES OF FINANCIAL INSTRUMENTS81% rewritten
  97. 97It is not practical to determine the fair value of FHLBI stock due to transferability restrictions; therefore, fair value is estimated at carrying amount
  98. 98NOTE 16 – FAIR VALUE MEASUREMENTS
  99. 99Level 1: Quoted prices (unadjusted) for identical assets or liabilities in active markets that we have the ability to access as of the measurement date
  100. 100Level 3: Significant unobservable inputs that reflect our own estimates about the assumptions that market participants would use in pricing an asset or liability
  101. 101NOTE 16 – FAIR VALUE MEASUREMENTS (Continued)
  102. 102Assets and Liabilities Measured at Fair Value on a Recurring Basis79% rewritten
  103. 103There were no sales or purchases of Level 3 during 2025. The $0.4 million reduction in Level 3 municipal general obligation bonds during 2025 reflects the transfer to Level 2 due to a change in observable inputs78% rewritten
  104. 104$ 27,050 $ 0 $ 27,050 $ 0New
  105. 105Assets and Liabilities Measured at Fair Value on a Nonrecurring Basis47% rewritten
  106. 106NOTE 17 – BUSINESS COMBINATIONSNew
  107. 107NOTE 18 – VARIABLE INTEREST ENTITIES38% rewritten
  108. 108NOTE 18 – VARIABLE INTEREST ENTITIES (Continued)58% rewritten
  109. 10951,467 31,090 20,377 38,902 34,428 4,474New
  110. 110NOTE 19 - REGULATORY MATTERS76% rewritten
  111. 111NOTE 19 - REGULATORY MATTERS (Continued)84% rewritten
  112. 112NOTE 21 – BUSINESS SEGMENT INFORMATIONNew
  113. 113NOTE 22 – SUBSEQUENT EVENTS73% rewritten
  114. 1144.7 Description of Securities Registered Under Section 12 of the Exchange Act#New
  115. 11510.23 2025 Mercantile Executive Officer Bonus Plan, incorporated by reference to exhibit 10.1 of our Form 8-K filed March 20, 2025*New
  116. 11610.25 Form of Voting Agreement, incorporated by reference to our Form 8-K filed July 22, 2025New
  117. 117Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101)62% rewritten
  118. 118President and Chief Executive Officer44% rewritten

Other Mercantile Bank 10-Ks

  • FY2024 10-K risk factors
    116 risks

    The risk profile for Mercantile Bank Corporation centers around credit quality in commercial lending, interest rate fluctuations affecting net interest income, and liquidity management for unfunded commitments.

    Filed Mar 03, 2025

About this page

The headings are the filing's own. The one-line readings and the overview are automated and can be wrong: read Item 1A of the 10-K for the exact wording.