Note 21 - Business Segment Information

12 Months Ended

Dec. 31, 2025

Notes to Financial Statements

Segment Reporting Disclosure [Text Block]

NOTE 21 – BUSINESS SEGMENT INFORMATION

Pursuant to Financial Accounting Standards Codification 280,  Segment Reporting, operating segments represent components of an enterprise for which separate financial information is available that is regularly evaluated by the chief operating decision makers in determining how to allocate resources and assessing performance.

Prior to our acquisition of Eastern Michigan Financial Corporation on December 31, 2025, our chief operating decision makers, which include our Chief Executive Officer, Chief Financial Officer, and Chief Operating Officer, evaluated interest and noninterest income streams and credit losses from our various products and services, while expense activities, including interest expense and noninterest expense, were managed, and financial performance was evaluated, on a Company-wide basis. As a result, detailed profitability information for each interest and noninterest income stream was  not used by our chief operating decision makers to allocate resources or in assessing performance. Rather, our chief operating decision makers used consolidated net income to assess performance by comparing it to and monitoring against budgeted and prior-year results. This information was used to manage resources to drive business and net income growth, including investment in key strategic priorities, as well as determine our ability to return capital to shareholders.

Subsequent to our acquisition of Eastern Michigan Financial Corporation on December 31, 2025, our chief operating decision makers now evaluate interest and noninterest income streams, credit losses, expense activities, and financial performance through our two wholly owned subsidiary banks, Mercantile Bank and Eastern Michigan Bank. Each of these operating segments offer similar products and services, but are managed separately due to different pricing, product demand, and consumer markets. Both segments derive interest and noninterest income through their banking products and services and investment securities. All of our income relates to our operations in the United States. Our chief operating decision makers use subsidiary level net income to assess performance by comparing it to and monitoring against budgeted and prior-year results. This information is used to manage resources to drive business and net income growth, including investment in key strategic priorities, as well as determine our ability to return capital to shareholders.

Segment net income represented net income on our Consolidated Statements of Income during and for the years ended December 31, 2025, 2024 and 2023. Segment assets represented total assets and goodwill represented total goodwill on our Consolidated Balance Sheets as of December 31, 2024. Goodwill, core deposit intangible, and total assets by segment as of December 31, 2025 were as follows:

(Dollars in thousands)	Mercantile Bank		Eastern Michigan Bank		All Other		Intercompany Eliminations			Consolidated Total
Goodwill	$	32,171	$	23,183	$	17,302	$	-		$	72,656
Core deposit intangible		-		20,388		-		-			20,388
Total assets		6,241,994		571,776		1,014,523		(993,074	)		6,835,219