Mercantile Bank, Eastern Michigan Financial to combine in $95.8M transaction

Mercantile Bank (MBWM) and Eastern Michigan Financial jointly announced that they have entered into a definitive merger agreement pursuant to which EFIN and its wholly owned subsidiary, Eastern Michigan Bank, will combine with Mercantile in a cash and stock transaction valued at approximately $95.8M. Based on financial data as of June 30, the combined company will have total assets of $6.7B, total loans of $4.9B and total deposits of $5.2B. The acquisition adds 12 Eastern branches to Mercantile Bank’s growing 45-location network, expanding its presence in Eastern and Southeast Michigan-a target growth market for Mercantile Bank. EFIN, headquartered in Croswell, Michigan, is the holding company for Eastern, with total assets of $505M, loans of $208M, and deposits of $449M as of June 30. Mercantile Bank’s system transformation is scheduled to be completed within the first quarter of 2027. During the interim period, Mercantile Bank plans to operate Eastern under Eastern’s existing bank charter. Following the Jack Henry conversion, Mercantile plans to consolidate the bank charters of Mercantile Bank and Eastern. Eastern team members, including executive leadership and operations, will remain in place and continue operating in their roles in parallel to Mercantile Bank’s current organizational structure. Under the terms of the definitive merger agreement, at the closing of the transaction Mercantile will issue 0.7116 shares of its common stock plus $32.32 in cash for each outstanding share of EFIN. Based upon the closing price of Mercantile’s common stock of $48.75 on July 21, the transaction would result in aggregate consideration of $95.8M. Under the terms of the definitive merger agreement, the transaction is expected to be approximately 11% accretive to Mercantile’s dilutive earnings per share once cost savings are fully phased-in. In addition, tangible book value dilution at closing is expected to be approximately 5.8% and earned back in approximately 3.6 years. Post-closing, Mercantile Bank’s capital ratios are expected to exceed “well-capitalized” levels. One EFIN director will join Mercantile’s board of directors, and Mercantile will establish an advisory board post-closing, comprised of existing EFIN board members. The transaction has been approved by each company’s board of directors and is expected to close during the fourth quarter of 2025, subject to regulatory approvals, the approval of EFIN shareholders, and the satisfaction of certain other closing conditions.