11-K

SECURITIES AND EXCHANGE COMMISSION

Washington, D. C. 20549

_________________

FORM 11-K

_________________

☑ ANNUAL REPORT Pursuant to Section 15 (d) of the Securities Exchange Act of 1934

OR

☐ TRANSITION REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the fiscal year ended December 31, 2021

Commission File No. 000-26719

Mercantile Bank of Michigan 401(k) Plan

Mercantile Bank Corporation

(Name of issuer of the securities held pursuant to the plan)

310 Leonard Street NW, Grand Rapids, Michigan, 49504

(full address of the executive office)

REQUIRED INFORMATION

THE MERCANTILE BANK OF MICHIGAN 401(K) PLAN IS SUBJECT TO THE EMPLOYEE RETIREMENT INCOME SECURITY ACT OF 1974 (ERISA). IN LIEU OF THE REQUIREMENTS OF ITEMS 1, 2 AND 3 OF FORM 11-K FOR ANNUAL REPORTS, THE FINANCIAL STATEMENTS AND SCHEDULES OF THE PLAN FOR THE TWO YEARS ENDED DECEMBER 31, 2021 AND 2020, WHICH HAVE BEEN PREPARED IN ACCORDANCE WITH THE FINANCIAL REPORTING REQUIREMENTS OF ERISA, ARE INCLUDED IN THIS REPORT.

Mercantile Bank of Michigan 401(k) Plan

Financial Statements and Supplemental Schedule

Years Ended December 31, 2021 and 2020

Mercantile Bank of Michigan 401(k) Plan

Contents

Independent Auditor’s Report	3-4
Financial Statements
Statements of Net Assets Available for Benefits as of December 31, 2021 and 2020	5
Statements of Changes in Net Assets Available for Benefits for the Years Ended December 31, 2021 and 2020	6
Notes to Financial Statements	7-11
ERISA Required Supplemental Schedule
Schedule H, Line 4i – Schedule of Assets (Held at End of Year) as of December 31, 2021	12
Exhibit List	13
Signatures	14
Consent of Independent Registered Public Accounting Firm

2

Mercantile Bank of Michigan 401(k) Plan

Independent Auditor’s Report

Plan Administrator and Participants

Mercantile Bank of Michigan 401(k) Plan

Grand Rapids, Michigan

Opinion on the Financial Statements

We have audited the accompanying statements of net assets available for benefits of the Mercantile Bank of Michigan 401(k) Plan (the “Plan”) as of December 31, 2021 and 2020, the related statement of changes in net assets available for benefits for the years then ended, and the related notes (collectively, the “financial statements”). In our opinion, the financial statements present fairly, in all material respects, the net assets available for benefits of the Plan as of December 31, 2021 and 2020, and the changes in net assets available for benefits for the years then ended, in conformity with accounting principles generally accepted in the United States of America.

Basis for Opinion

These financial statements are the responsibility of the Plan’s management. Our responsibility is to express an opinion on the Plan’s financial statements based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (“PCAOB”) and are required to be independent with respect to the Plan in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. The Plan is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audits we are required to obtain an understanding of internal control over financial reporting but not for the purpose of expressing an opinion on the effectiveness of the Plan’s internal control over financial reporting. Accordingly, we express no such opinion.

Our audits included performing procedures to assess the risk of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by the Plan’s management, as well as evaluating the overall presentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion.

BDO USA, LLP, a Delaware limited liability partnership, is the U.S. member of BDO International Limited, a UK company limited by guarantee, and forms part of the international BDO network of independent member firms.

BDO is the brand name for the BDO network and for each of the BDO Member Firms.

3

Mercantile Bank of Michigan 401(k) Plan

Supplemental Information

The supplemental information in the accompanying Schedule of Assets (Held at End of Year) as of December 31, 2021 has been subjected to audit procedures performed in conjunction with the audit of the Plan’s financial statements. The supplemental information is presented for the purpose of additional analysis and is not a required part of the financial statements but included supplemental information required by the Department of Labor’s Rules and Regulations for Reporting and Disclosure under the Employee Retirement Income Security Act of 1974. The supplemental information is the responsibility of the Plan’s management. Our audit procedures included determining whether the supplemental information reconciles to the financial statements or the underlying accounting and other records, as applicable, and performing procedures to test the completeness and accuracy of the information presented in the supplemental information. In forming our opinion on the supplemental information, we evaluated whether the supplemental information, including its form and content, is presented in conformity with the Department of Labor’s Rules and Regulations for Reporting and Disclosure under the Employee Retirement Income Security Act of 1974. In our opinion, the supplemental information is fairly stated, in all material respects, in relation to the financial statements as a whole.

/s/ BDO USA, LLP

We have served as the Plan’s auditor since 2006

Grand Rapids, Michigan

June 24, 2022

BDO USA, LLP, a Delaware limited liability partnership, is the U.S. member of BDO International Limited, a UK company limited by guarantee, and forms part of the international BDO network of independent member firms.

BDO is the brand name for the BDO network and for each of the BDO Member Firms.

4

Mercantile Bank of Michigan 401(k) Plan

Statements of Net Assets Available for Benefits

December 31,	2021		2020
Assets
Investments, at fair value
Mutual funds	$	73,459,706	$	62,297,916
Mercantile Bank Corporation common stock		16,213,951		12,711,430
Money market fund		3,428,701		3,621,543
Total Investments		93,102,358		78,630,889
Receivables
Employer receivables		-		56,234
Employee receivables		-		97,010
Total Receivables		-		153,244
Notes Receivable from Participants		795,476		735,205
Accrued Investment Income		23,424		10,503
Net Assets Available for Benefits	$	93,921,258	$	79,529,841

See accompanying notes to financial statements.

5

Mercantile Bank of Michigan 401(k) Plan

Statements of Changes in Net Assets Available for Benefits

Year ended December 31,	2021		2020
Additions
Investment income:
Net appreciation in fair value of investments	$	10,784,480	$	2,629,531
Interest and dividends		3,834,468		2,520,004
Total Investment Income		14,618,948		5,149,535
Contributions:
Employer		2,089,405		1,948,435
Employee		3,591,693		3,410,455
Rollover		1,033,787		210,698
Total Contributions		6,714,885		5,569,588
Interest from notes receivable		38,035		46,833
Total Additions		21,371,868		10,765,956
Deductions
Benefits paid to participants		6,750,939		5,616,300
Administrative expenses		229,512		178,430
Total Deductions		6,980,451		5,794,730
Net Increase		14,391,417		4,971,226
Net Assets Available for Benefits, beginning of year		79,529,841		74,558,615
Net Assets Available for Benefits, end of year	$	93,921,258	$	79,529,841

See accompanying notes to financial statements.

6

Mercantile Bank of Michigan 401(k) Plan

Notes to Financial Statements

1. Plan Description

The following description of Mercantile Bank of Michigan 401(k) Plan (Plan) provides only general information. Participants should refer to the Plan Agreement for a more complete description of the Plan’s provisions.

General

The Plan was established by the Plan Sponsor, Mercantile Bank of Michigan (Bank), effective January 1, 1998. The Plan was amended and restated effective January 1, 2019. The Plan is subject to the Employee Retirement Income Security Act of 1974 (ERISA).

Eligibility and Enrollment

The Plan is a defined contribution plan covering eligible employees who have completed a minimum of one hour of service. Eligible employees can enter the Plan on the first day of the month following date of hire. For newly eligible employees, the Plan provides automatic enrollment for the employee at an amount equal to 5% of compensation, until such time as the employee elects a different percentage or elects no contributions.

Contributions

Elective deferrals by participants under the Plan provisions are based on a percentage of their compensation, subject to certain limitations as defined by the Plan Agreement. Participants may also make after tax Roth contributions, and may roll over account balances from other qualified defined benefit or defined contribution plans into their account.

The Bank makes safe harbor matching contributions equal to 100% of the first 5% of compensation deferred by each participant subject to certain limitations as specified in the Plan Document. The Bank may also make a discretionary profit-sharing contribution subject to certain limitations as specified in the Plan Agreement. There were no profit-sharing contributions in 2021 or 2020.

Participant Accounts

Each participant’s account is credited with the participant’s contributions, allocations of the Bank’s matching contribution, and Plan earnings. Allocations are based on participant earnings or account balances, as defined. The benefit to which a participant is entitled is the benefit that can be provided from the participant’s account. Participants may direct the investment of their account balances into various investment options offered by the Plan.

Vesting

Participants are immediately vested in their elective deferrals and all employer contributions and earnings thereon.

7

Mercantile Bank of Michigan 401(k) Plan

Notes to Financial Statements

Notes Receivable from Participants

Participants may borrow from their accounts a minimum of $1,000 up to a maximum equal to the lesser of $50,000 or 50% of their account balance. The notes are secured by the balance in the participant’s account and bear interest at rates that are commensurate with local borrowing rates. Interest rates on notes receivable outstanding as of December 31, 2021 ranged from 4.25% to 6.50%. Principal and interest is paid ratably through payroll deductions over a period not to exceed five years, unless the notes were used to purchase a primary residence, in which case the note terms shall not exceed ten years.

Payment of Benefits

Upon separation of service, death, disability or retirement, a participant or his or her beneficiary will receive a distribution of the participant’s account as a lump-sum amount or an installment option. A participant may receive the portion of his or her account invested in Mercantile Bank Corporation common stock in either common shares or cash. Additionally, under certain circumstances of financial hardship, participants are allowed to withdraw funds from the Plan.

Administrative Expenses

Certain administrative expenses are paid by the Plan Sponsor. Certain fees incurred as a result of participant-directed transactions (e.g., participant loan origination and distribution fees) are passed on to the participant. A trustee fee is paid to the Plan’s trustee and recordkeeper, Greenleaf Trust, which is calculated quarterly based on the market value of the Plan assets and allocated to participant accounts on a quarterly basis.

2. Significant Accounting Policies

Basis of Accounting

The accompanying financial statements are prepared under the accrual method of accounting.

Use of Estimates

The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of net assets and changes therein. Actual results could differ from those estimates.

Risks and Uncertainties

The Plan invests in various investment securities. Investment securities are exposed to various risks such as interest rate, market and credit risks. Due to the level of risk associated with certain investment securities, it is at least reasonably possible that changes in the values of investment securities will occur in the near term and that such changes could materially affect participants’ account balances and the amounts reported in the financial statements.

There remains a significant amount of stress and uncertainty across national and global economies due to the ongoing pandemic of coronavirus disease 2019 (Covid-19) caused by severe acute respiratory syndrome coronavirus 2 (the Coronavirus Pandemic).  This uncertainty is heightened as certain geographic areas continue to experience surges in Covid-19 cases and governments at all levels continue to react to changes in circumstances, including supply chain disruptions and inflationary pressures.  The Coronavirus Pandemic is a highly unusual, unprecedented and evolving public health and economic crisis that may have a material negative financial impact on the Plan.

8

Mercantile Bank of Michigan 401(k) Plan

Notes to Financial Statements

Concentration of Credit Risk

At December 31, 2021 and 2020, approximately 17% and 16%, respectively, of the Plan’s assets were invested in Mercantile Bank Corporation common stock. A significant decline in the market value of the common stock would significantly affect the net assets available for benefits.

Investment Valuation and Income Recognition

The Plan’s investments are stated at estimated fair value. Fair value is the price that would be received to sell an asset (an exit price) in the principal or most advantageous market for the asset in an orderly transaction between market participants on the measurement date. See Note 3 for discussion of fair value measurements.

Purchases and sales of securities are recorded on a trade date basis. Interest income is recorded on the accrual basis. Dividends are recorded on the ex-dividend date. Net appreciation (depreciation) includes the Plan’s gains and losses on investments bought and sold as well as held during the year.

Notes Receivable – Participant Loans

Participant loans are classified as notes receivable from participants, and are measured at the unpaid principal balance plus unpaid accrued interest. Defaulted loans, if any, are reclassified as distributions based upon the terms of the Plan Document.

Payment of Benefits

Benefits are recorded when paid.

Subsequent Events

Subsequent events have been evaluated by management through June 24, 2022 the date these financial statements were available to be issued.

3. Investments

In accordance with ASC 820, Fair Value Measurements and Disclosures, the Plan utilizes a fair value hierarchy for valuation inputs that gives the highest priority to quoted prices in active markets for identical assets (Level 1 measurements) and the lowest priority to unobservable inputs (Level 3 measurements). A financial instrument’s level within the fair value hierarchy is based on the lowest level of any input that is significant to the fair value measurement. The three levels of the fair value hierarchy are described as follows:

Level 1 - Inputs to the valuation methodology are unadjusted quoted prices for identical assets in active markets.

Level 2 - Inputs to the valuation methodology include quoted prices for similar assets in active markets, quoted prices for identical or similar assets in inactive markets, and other inputs that are observable or can be corroborated by observable market data.

9

Mercantile Bank of Michigan 401(k) Plan

Notes to Financial Statements

Level 3 - Inputs to the valuation methodology are both significant to the fair value measurement and unobservable.

The following valuation methodologies were used to measure the fair value of the Plan’s investments. There were no changes in the methodologies used at December 31, 2021 or 2020.

Money Market and Mutual Funds - Valued at quoted market prices in an exchange and active market, which represent the net asset value of shares held by the Plan.

Mercantile Bank Corporation Common Stock - Valued at the closing price reported on the active market on which the security is traded.

The Plan’s valuation methods may result in a fair value calculation that may not be indicative of net realizable value or reflective of future fair values. Although Plan management believes the valuation methods are appropriate and consistent with the market participants, the use of different methodologies or assumptions to determine the fair value of certain financial instruments could result in a different fair value measurement at the reporting date.

The tables below set forth by level within the fair value hierarchy the Plan’s investments.

December 31, 2021
	Investments at Fair Value
	Level 1		Level 2		Level 3		Total
Mutual funds	$	73,459,706	$	-	$	-	$	73,459,706
Common stock		16,213,951		-		-		16,213,951
Money market fund		3,428,701		-		-		3,428,701
Investments, at fair value	$	93,102,358	$	-	$	-	$	93,102,358

December 31, 2020
	Investments at Fair Value
	Level 1		Level 2		Level 3		Total
Mutual funds	$	62,297,916	$	-	$	-	$	62,297,916
Common stock		12,711,430		-		-		12,711,430
Money market fund		3,621,543		-		-		3,621,543
Investments, at fair value	$	78,630,889	$	-	$	-	$	78,630,889

4. Related Party and Parties-In-Interest Transactions

Parties-in-interest are defined under Department of Labor regulations as any fiduciary of the Plan, any party rendering service to the Plan, the employer and certain other parties. Professional fees for the administration and audit of the Plan are paid by the Bank. Notes receivable from participants are also considered party-in interest transactions.

10

Mercantile Bank of Michigan 401(k) Plan

Notes to Financial Statements

The 462,859 and 467,848 shares of Mercantile Bank Corporation common stock held by the Plan as of December 31, 2021 and 2020, respectively, represent 2.92% and 2.86% of the Corporation’s outstanding shares as of December 31, 2021 and 2020, respectively.

Cash dividends of $537,692 and $471,443 were paid to the Plan by Mercantile Bank Corporation during 2021 and 2020, respectively.

5. Plan Termination

Although it has not expressed any intent to do so, the Bank has the right under the Plan to terminate the Plan, subject to the provisions of ERISA.

6. Tax Status

The Internal Revenue Service (IRS) determined and informed the Bank by a letter dated August 7, 2014 that the amended and restated Plan effective January 1, 2013 and related trust are designed in accordance with applicable sections of the Internal Revenue Code (IRC). The Plan has been amended since receiving the determination letter; however, the Plan Administrator believes that the Plan is designed and is being operated in compliance with the applicable requirements of the IRC. The related trust, therefore, is not subject to tax under present tax law.

Accounting principles generally accepted in the United States of America require Plan management to evaluate tax positions taken by the Plan and recognize a tax liability (or asset) if the Plan has taken an uncertain position that more likely than not would not be sustained upon examination by the IRS. The Plan is subject to routine audits by taxing jurisdictions; however, there currently are no audits for any tax periods in progress.

11

Mercantile Bank of Michigan 401(k) Plan

Schedule of Assets (Held at End of Year)

EIN: 38-3360868

Plan Number: 001

December 31, 2021
(a)	(b)	(c)	(d)	(e)
	Identity of Issuer, Borrower, Lessor or Similar Party	Description of Investment, Including Maturity Date, Rate of Interest, Collateral, Par or Maturity Value**	Cost**	Current Value
	Mutual Funds
	Blackrock Equity Dividend Fund	166,745 shares	**	$        3,611,707
	William Blair Large Cap RY	142,664 shares	**	3,732,091
	Wasatch Cor Growth Institutional	15,569 shares	**	1,490,353
	JPMorgan Mid Cap Value R6	25,902 shares	**	1,077,038
	Hartford International Opportunities Y	74,539 shares	**	1,501,978
	Delaware Small Cap Value R6	18,059 shares	**	1,472,912
	T Rowe Price Mid Cap Growth Fund	26,968 shares	**	3,166,384
	Vanguard 500 Index Admiral Shares	21,277 shares	**	9,358,620
	Vanguard Mid Cap Index Admiral Shares	7,605 shares	**	2,399,248
	Vanguard Small Cap Index Admiral Shares	20,927 shares	**	2,267,926
	Delaware Emerging Market	24,780 shares	**	604,403
	Matthews Pacific Tiger Fund	17,190 shares	**	472,745
	Vanguard Total International Index Admiral	60,550 shares	**	2,070,840
	T Rowe Price Balanced I Fund	59,678 shares	**	774,623
	T Rowe Price Spectrum Conservative Allocation Fund	56,213 shares	**	1,199,603
	T Rowe Price Retirement 2010 Fund	1,900 shares	**	25,594
	T Rowe Price Retirement 2015 Fund	27,520 shares	**	388,594
	T Rowe Price Retirement 2020 Fund	182,489 shares	**	2,709,975
	T Rowe Price Retirement 2030 Fund	717,231 shares	**	11,999,283
	T Rowe Price Retirement 2040 Fund	536,134 shares	**	9,671,874
	T Rowe Price Retirement 2045 Fund	213,254 shares	**	3,949,482
	T Rowe Price Retirement 2050 Fund	237,887 shares	**	4,396,171
	T Rowe Price Retirement 2060 Fund	39,260 shares	**	739,668
	Vanguard Intermediate Term Treasury Admiral	24,158 shares	**	273,234
	Vanguard Short Term Treasury ADM	49,283 shares	**	523,393
	Vanguard Short Term Invest Grade Fund Admiral	92,811 shares	**	999,584
	Vanguard Total Bond Market Admiral Shares	230,775 shares	**	2,582,383
	Total Mutual Funds			73,459,706
	Common Stock
	Mercantile Bank Corporation	462,859 shares	**	16,213,951
	Money Market Fund
	Northern Institutional Treasury Portfolio	3,428,701 shares	**	3,428,701
	Total Investments, at fair value	Participant loans at interest rates of 4.25% to 6.50% per annum, maturity dates through 01/19/2029		$     93,102,358
*	Participant Loans			$          795,476

* Party-in-interest, as defined by ERISA.

** The cost of participant-directed investments is not required to be disclosed.

12

Exhibit to Report on Form 11-K

Exhibit No. Description

23.1 Consent of Independent Registered Public Accounting Firm.

13

Signature

Pursuant to the requirements of the Securities Exchange Act of 1934, the trustees (or other persons who administer the employee benefit plan) have duly caused this annual report to be signed on its behalf by the undersigned hereunto duly authorized.

Date: June 24, 2022   Mercantile Bank of Michigan 401(k) Plan   /s/ Brett E. Hoover   Brett E. Hoover, Plan Administrator

14

EX-23.1

Exhibit 23.1

Consent of Independent Registered Public Accounting Firm

Mercantile Bank of Michigan 401(k) Plan

Grand Rapids, Michigan 49503

We hereby consent to the incorporation by reference in the Registration Statement on Form S-8 (333-170026, 333-117763 and 333-152254) of Mercantile Bank Corporation of our report dated June 24, 2022, relating to the financial statements and supplemental schedule of Mercantile Bank of Michigan 401(k) Plan which appear in this Form 11-K for the year ended December 31, 2021.

/s/ BDO USA, LLP

BDO USA, LLP

Grand Rapids, Michigan

June 24, 2022