Partnership strengthens Mercantile‘s position as Michigan‘s largest bank by total assets, enhances core deposit base and liquidity, and accelerates growth in key markets
Mercantile Bank Corporation (“Mercantile”) and Eastern Michigan Financial Corporation (“EFIN”) jointly announced that they have entered into a definitive merger agreement pursuant to which EFIN and its wholly owned subsidiary, Eastern Michigan Bank (“Eastern”), will combine with Mercantile in a cash and stock transaction valued at approximately $95.8 million, as detailed below. Based on financial data as of June 30, 2025, the combined company will have total assets of $6.7 billion, total loans of $4.9 billion, and total deposits of $5.2 billion.
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The partnership presents a unique opportunity to combine two culturally aligned franchises and strengthens Mercantile Bank’s position as the largest bank founded, headquartered, and operated in Michigan, as measured by total assets. The partnership strategically expands Mercantile Bank’s operating footprint with a partner that possesses an exceptional deposit franchise (42 bps cost of deposits)—number one ranked deposit franchise in the state—with substantial excess liquidity (46% loan-to-deposit ratio). The acquisition adds 12 Eastern branches to Mercantile Bank’s growing 45-location network, significantly expanding its presence in Eastern and Southeast Michigan—a target growth market for Mercantile Bank. This increased coverage aligns with Mercantile’s statewide growth strategy.
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EFIN, headquartered in Croswell, Michigan, is the holding company for Eastern, with total assets of $505 million, loans of $208 million, and deposits of $449 million as of June 30, 2025. With a longstanding presence in its communities, Eastern serves Sanilac, Huron, and St. Clair counties with a full range of retail and commercial banking services. Eastern maintains a strong deposit base—99% core and 28% noninterest bearing—and benefits from well-established and long-tenured depositor relationships that support its stable funding and liquidity profile.
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“We are pleased to add this high-quality franchise that aligns with our strategy of being the premiere franchise in the State of Michigan. Eastern brings an incredible core deposit base, with a cost of deposits less than 0.50%, and substantial liquidity, that further enhances our balance sheet flexibility. Both Mercantile Bank and Eastern were founded here in Michigan, and that local focus remains at the core of who we are,” said Ray Reitsma, President and CEO of Mercantile Bank Corporation. “The combination provides an improved loan-to-deposit ratio, a broader deposit base, and a reduced cost of funds. These enhancements support more efficient capital deployment and further positions the bank for sustained, profitable growth. This expansion isn’t just about growth it’s about deepening our commitment to the communities we call home. We’re proud to be able to serve our fellow residents of Michigan.”
“Today marks an exciting new chapter for Eastern Michigan Bank. Joining forces with Mercantile Bank allows us to expand our reach and enhance the services we provide to our customers and communities. We’re proud of our legacy and are confident that Mercantile shares our values, our commitment to local relationships, and our vision for the future. This partnership strengthens our ability to deliver even greater value while honoring the trust our customers have placed in us,” said William Oldford, CEO of Eastern Michigan Bank.
Operational Integration and Core Banking Expertise
In addition to the acquisition, Mercantile Bank will begin the process of a full core banking system transformation later this year in partnership with Jack Henry, an industry leading financial technology provider. While the technology system will be new to Mercantile Bank, Eastern brings over 40 years of operational experience on the Jack Henry platform, offering valuable expertise to support a smooth and effective system transition. The unified platform will enhance operational efficiency and improve customer experience.
“Our team brings deep, hands-on experience with the Jack Henry platform, and we’re proud to contribute that expertise to support Mercantile Bank’s system transformation,” said Oldford. “At the same time, becoming part of Mercantile Bank gives us the resources, scale, and support to grow beyond what we could achieve alone opening the door to new opportunities for our customers, employees, and the communities we serve.”
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.
Aligned Culture and Shared Values
Both institutions share deep Michigan roots and a commitment to the communities they serve. The organizations are aligned in mission—to deliver financial solutions that empower people—and are guided by shared values: accountability, collaboration, excellence, inclusivity, and innovation. This cultural alignment will help ensure a seamless integration for the Eastern Michigan community.
“We’re not just growing our footprint—we’re gaining a team of skilled professionals who know these communities and share our commitment to service,” said Scott Setlock, Chief Operating Officer of Mercantile Bank. “It’s a partnership built on mutual respect, and we’re excited about the road ahead.”
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. Oldford will serve as Regional Market President, reporting directly to Mercantile Bank President and CEO, Ray Reitsma. Similarly, functional areas such as accounting, operations, and branch management will adopt a coordinated reporting structure designed to maintain continuity and alignment across the combined organization.
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Source: PRnewswire