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GRAND RAPIDS, Mich. - Mercantile Bank Corporation (NASDAQ:MBWM) announced Tuesday it has entered into a definitive merger agreement to acquire Eastern Michigan Financial Corporation (OTCID:EFIN) in a cash and stock transaction valued at approximately $95.8 million. According to InvestingPro data, EFIN maintains a strong financial health score of GREAT and demonstrates remarkable stability with a low beta of 0.21.
The acquisition will strengthen Mercantile’s position as Michigan’s largest bank by total assets, according to the company’s press release. Based on June 30, 2025 financial data, the combined entity will have total assets of $6.7 billion, total loans of $4.9 billion, and total deposits of $5.2 billion.
Under the agreement terms, Mercantile will issue 0.7116 shares of its common stock plus $32.32 in cash for each outstanding share of EFIN. The transaction is expected to close during the fourth quarter of 2025, subject to regulatory approvals and EFIN shareholder approval. Based on InvestingPro analysis, EFIN currently trades at a modest 1.11x price-to-book ratio, suggesting a reasonably valued acquisition target. Unlock more valuable insights about merger valuations and financial metrics with an InvestingPro subscription.
Eastern Michigan Bank, headquartered in Croswell, Michigan, operates 12 branches across Sanilac, Huron, and St. Clair counties with assets of $505 million as of June 30, 2025. The bank maintains a 99% core deposit base with 28% being non-interest bearing. The bank has demonstrated strong growth momentum, with revenue increasing by 11.18% over the last twelve months.
"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.
The acquisition is expected to be approximately 11% accretive to Mercantile’s earnings per share once cost savings are fully implemented. Tangible book value dilution at closing is projected at approximately 5.8% with an estimated 3.6-year earn-back period.
Mercantile plans to operate Eastern under its existing bank charter until completing a core banking system transformation scheduled for the first quarter of 2027. One EFIN director will join Mercantile’s Board of Directors, and an advisory board comprising existing EFIN board members will be established post-closing.
Stephens Inc. served as financial advisor to Mercantile, while Piper Sandler & Co. advised EFIN on the transaction.
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