Mercantile Bank Acquires Eastern Michigan Bank in $95.8M Deal

Mercantile Bank Corporation has entered a merger agreement with Eastern Michigan Financial Corporation and Eastern Michigan Bank, valued at approximately $95.8 million. The combined company will have total assets of $6.7 billion, total loans of $4.9 billion, and total deposits of $5.2 billion. The merger strengthens Mercantile's position as Michigan's largest bank and enhances its core deposit base and liquidity, while accelerating growth in key markets.

Mercantile Bank Corporation (NASDAQ: MBWM) and Eastern Michigan Financial Corporation (OTCID: EFIN) have entered into a definitive merger agreement, valued at approximately $95.8 million. This strategic move aims to strengthen Mercantile's position as Michigan's largest bank by total assets and enhance its core deposit base and liquidity. The combined company will have total assets of $6.7 billion, total loans of $4.9 billion, and total deposits of $5.2 billion [1].

The merger will expand Mercantile's operating footprint by adding 12 Eastern branches to its existing 45-location network, significantly increasing its presence in Eastern and Southeast Michigan. This move aligns with Mercantile's statewide growth strategy. Eastern Michigan Financial Corporation, headquartered in Croswell, Michigan, brings an exceptional deposit franchise with a cost of deposits of 42 basis points and substantial excess liquidity, as measured by a loan-to-deposit ratio of 46% [1].

The acquisition will also benefit from Eastern's strong deposit base—99% core and 28% noninterest bearing—and its well-established and long-tenured depositor relationships, supporting a stable funding and liquidity profile. "We are pleased to add this high-quality franchise that aligns with our strategy of being the premiere franchise in the State of Michigan," said Ray Reitsma, President and CEO of Mercantile Bank Corporation [1].

Operational integration and core banking expertise will also be a key aspect of the merger. Mercantile Bank will begin a full core banking system transformation later this year in partnership with Jack Henry, an industry-leading financial technology provider. Eastern Michigan Bank brings over 40 years of operational experience on the Jack Henry platform, offering valuable expertise to support a smooth and effective system transition [1].

Both institutions share deep Michigan roots and a commitment to the communities they serve. They are guided by shared values of accountability, collaboration, excellence, inclusivity, and innovation, which will help ensure a seamless integration for the Eastern Michigan community [1].

The merger is expected to be accretive to Mercantile's earnings per share once cost savings are fully phased in. The transaction is subject to regulatory approvals, the approval of EFIN shareholders, and the satisfaction of certain other closing conditions. It is expected to close during the fourth quarter of 2025 [1].

References:
[1] https://www.marketscreener.com/news/mercantile-bank-corporation-and-eastern-michigan-financial-corporation-announce-definitive-merger-ag-ce7c5cdcde8ef521