Mercantile Bank Corp (MBWM) 2026 Q1 法說會逐字稿

Good morning, and welcome to the Mercantile Bank Corporation 2026 first quarter earnings results conference call. (Operator Instructions) Please note, this event is being recorded.

早安，歡迎參加 Mercantile Bank Corporation 2026 年第一季財報結果電話會議。（接線員指示）請注意，本活動將被錄音。

I would now like to turn the conference over to Nichole Kladder, Chief Marketing Officer of Mercantile Bank. Please go ahead.

現在我想將會議交給 Mercantile Bank 行銷長 Nichole Kladder。請開始。

Hello, and thank you for joining us. Today, we will cover the company's financial results for the first quarter of 2026. The team members joining me this morning include Ray Reitsma, President and Chief Executive Officer; as well as Chuck Christmas, Executive Vice President and Chief Financial Officer.

各位好，感謝加入我們。今天我們將說明公司 2026 年第一季的財務結果。今天早上與我一同出席的團隊成員包括總裁兼執行長 Ray Reitsma，以及執行副總裁兼財務長 Chuck Christmas。

Our agenda will begin with prepared remarks by both Ray and Chuck and will include references to our presentation covering this quarter's results. You can access a copy of the presentation as well as the press release sent earlier today by visiting mercbank.com.

我們的議程將先由 Ray 與 Chuck 進行事先準備的發言，並會引用我們涵蓋本季結果的簡報內容。您可造訪 mercbank.com 取得簡報副本，以及今天稍早發布的新聞稿。

After our prepared remarks, we will then open the call to your questions. Before we begin, it is my responsibility to inform you that this call may involve certain forward-looking statements such as projections of revenue, earnings, and capital structure as well as statements on the plans and objectives of the company's business.

在事先準備的發言之後，我們將開放提問。在開始之前，我有責任提醒各位，本次電話會議可能包含某些前瞻性陳述，例如對營收、獲利與資本結構的預測，以及關於公司業務計畫與目標的陳述。

The company's actual results could differ materially from any forward-looking statements made today due to factors described in the company's latest Securities and Exchange Commission's filings. The company assumes no obligation to update any forward-looking statements made during the call.

由於公司最新向美國證券交易委員會（SEC）提交之文件中所述因素，公司實際結果可能與今日所作任何前瞻性陳述存在重大差異。公司不承擔更新本次電話會議中任何前瞻性陳述之義務。

Let's begin. Ray?

我們開始吧。Ray？

Thanks, Nichole. Our results for the first quarter of 2026 continue to build on the theme of commercial expertise generating a strong return profile. The consummation of the purchase of Eastern Michigan on December 31, 2025, represents execution of our strategic objectives around deposit growth, loan growth, and margin stability paired with strong asset quality and overall financial performance.

謝謝你，Nichole。我們 2026 年第一季的結果延續了「以商業專業能力帶動強勁報酬特徵」的主軸。於 2025 年 12 月 31 日完成對 Eastern Michigan 的收購，展現我們在存款成長、放款成長與利差穩定等策略目標上的執行力，同時兼顧優異的資產品質與整體財務表現。

We continue to demonstrate top cortile return on asset performance relative to our peers built upon the following traits: trait number one, a strong and durable net interest margin. Over the last five quarters, the SOFR 90-day average rate has dropped 67 basis points while our margin increased by 8 basis points to 3.55%. This illustrates effective execution of our strategic objective to maintain a steady margin by matched funding of our assets and liabilities and refutes the notion that we have an asset-sensitive balance sheet despite the relatively large portion of floating our proportion of floating rate assets.

相較同業，我們持續展現資產報酬率（ROA）位居同業前四分位（top quartile）的表現，建立在以下特質之上：特質一，強勁且具韌性的淨利差。過去五個季度，SOFR 90 日平均利率下滑 67 個基點，而我們的利差反而增加 8 個基點至 3.55%。這顯示我們透過資產與負債的配對融資，有效執行維持利差穩定的策略目標，也反駁了外界認為我們資產負債表對利率變動敏感（asset-sensitive）的看法，儘管我們浮動利率資產占比相對較高。

Trait number two, very strong asset quality. Non-performing assets to total assets remain at the low levels typical of our company at 11 basis points of total assets as of March 31, 2026. Non-performing loans to total loans over the past 6.25 years averaged 12 basis points. The allowance for credit losses stands at 1.18% of total loans as of March 31, 2026, nearly 10 times NPAs providing very strong coverage relative to past due and non-performing loan levels. These numbers demonstrate our long-term commitment to excellence in underwriting and loan administration.

特質二，資產品質非常強勁。截至 2026 年 3 月 31 日，不良資產占總資產比率仍維持在本公司一貫的低水準，為總資產的 11 個基點。過去 6.25 年，不良放款占總放款比率平均為 12 個基點。截至 2026 年 3 月 31 日，信用損失準備金（allowance for credit losses）占總放款比率為 1.18%，幾乎是不良資產（NPA）的 10 倍，對逾期與不良放款水準提供非常強的覆蓋。這些數據展現我們長期致力於卓越的授信審核與放款管理。

Trait number three, improved on-balance sheet liquidity and loan-to-deposit ratio. At the end of the first quarter of 2026, our own to-deposit ratio stood at 89% compared to 91% on December 31, 2025, and 98% in December 31, 2024, and 110% on December 31, 2023. As of March 31, 2026, our loan -- our deposit mix included 25% and non-interest-bearing deposits and 25% lower cost deposits, unchanged from year-end to 2025, but up from 20% at the end of the third quarter of 2025, which has contributed to the stability of our net interest margin.

特質三，表內流動性改善以及放款對存款比率下降。於 2026 年第一季末，我們的放款對存款比率為 89%，相較 2025 年 12 月 31 日的 91%、2024 年 12 月 31 日的 98%，以及 2023 年 12 月 31 日的 110% 均有所下降。截至 2026 年 3 月 31 日，我們的存款結構包含 25% 的無息存款以及 25% 的低成本存款，較 2025 年底持平，但高於 2025 年第三季末的 20%，這也有助於我們淨利差的穩定。

Our acquisition of Eastern Michigan contributed positively to these measures. Deposit growth for the first quarter of 2026 compared to the first quarter of 2025 was 15.8%. The growth was roughly proportional in non-interest-bearing to interest-bearing accounts.

我們收購 Eastern Michigan 對上述指標帶來正面貢獻。2026 年第一季相較 2025 年第一季的存款成長為 15.8%。其中，無息與計息帳戶的成長大致呈比例分布。

Trait number four, strong deposit and loan compounded annual growth rates. Our recent focus on deposit growth is not new to our bank. In fact, the last five year in periods demonstrate a deposit compounded annual growth rate of 9.2%. Over the same time period, total loans demonstrate a compounded annual growth rate of 8.6%.

特質四，存款與放款的強勁複合年成長率。我們近期對存款成長的聚焦並非新策略。事實上，過去五年期間的存款複合年成長率為 9.2%。同一期間，總放款的複合年成長率為 8.6%。

As foreshadowed -- in prior quarter's commentary, loan growth was impacted by an elevated level of loan payoffs compared to historical norms in the first quarter of 2026. Payoffs from borrower sales of assets were over $40 million above the elevated quarterly average experience in 2025 and planned refinancing of multifamily projects to the secondary markets, were nearly 5 times the quarterly average amount in 2025 or nearly $40 million in gross dollar terms.

如同先前季度評論所預示，2026 年第一季的放款成長受到放款提前清償（payoffs）水準高於歷史常態的影響。由借款人出售資產所帶來的清償金額，較 2025 年偏高的季度平均水準高出逾 4,000 萬美元；而多戶住宅專案規劃轉至次級市場再融資所造成的清償，幾乎是 2025 年季度平均金額的 5 倍，以總額計亦接近 4,000 萬美元。

However, March 31, 2026, commitments to make new commercial loans totaled $289 million and commitments to fund existing commercial and residential construction loans totaled $272 million with each amount representing five quarter highs. We expect that loan payoffs will moderate in upcoming quarters and net loan growth for 2026 will follow within the range of previously defined expectations of mid-single-digit percentages. Quarter-to-date loan growth is well aligned with our year-end expectations.

然而，截至 2026 年 3 月 31 日，新承作商業放款的承諾額合計 2.89 億美元，而既有商業與住宅建築放款的撥款承諾額合計 2.72 億美元，兩者皆創下五個季度新高。我們預期未來幾季放款清償將趨於緩和，2026 年淨放款成長將落在先前所界定的中個位數百分比區間內。迄今為止的季度內放款成長與我們的年末預期相當一致。

Trait number five, continued strong growth in key fee income categories. Growth in commercial deposit relationships has supported growth in treasury management services resulting in a 35% increase in service charges on accounts during the first quarter of '26 compared to the first quarter of 2025.

特質五，關鍵手續費收入類別持續強勁成長。商業存款往來關係的成長帶動財資管理（treasury management）服務的成長，使 2026 年第一季的帳戶服務費收入較 2025 年第一季增加 35%。

Our credit and debit card offerings report growth of 17.6% in the first three months of 2026 compared to the respective 2025 period. Our mortgage team continues to build market share and generate a higher proportion of salable loans contributing to 12.4% growth in mortgage banking income during the first quarter of '26 compared to the prior year first quarter.

我們的信用卡與簽帳金融卡產品在 2026 年前三個月較 2025 年同期成長 17.6%。我們的房貸團隊持續擴大市占並提高可出售貸款的占比，帶動 2026 年第一季的房貸銀行業務收入較去年第一季成長 12.4%。

Trait number six, well-managed expenses. Net revenue, defined as net interest income plus noninterest income grew 18.1% to $67.6 million during the first quarter of 2026, from $57.3 million in the respective 2025 period. Occupancy costs and data processing costs were virtually unchanged as a percentage of net revenue. And salaries and benefits increased from 34.2% to 35% of net revenue, primarily reflecting our investment in the Southeast Michigan market.

特質六，費用管理得宜。淨營收（定義為淨利息收入加上非利息收入）在 2026 年第一季成長 18.1% 至 6,760 萬美元，較 2025 年同期的 5,730 萬美元增加。場地占用成本與資料處理成本占淨營收比重幾乎不變。薪資與福利占淨營收比重由 34.2% 上升至 35%，主要反映我們對密西根州東南部市場的投資。

Other expenses include a $1.2 million increase in allocations to reserve for unfunded loan commitments compared to the respective 2025 period, reflecting the growth in our loan backlog and a $0.9 million increase in the core deposit intangible asset amortization account arising from the acquisition of Eastern Michigan.

其他費用包含：相較 2025 年同期，對未撥款放款承諾準備金的提列增加 120 萬美元，反映我們放款待撥餘額（loan backlog）的成長；以及因收購 Eastern Michigan 而產生的核心存款無形資產攤銷費用增加 90 萬美元。

In sum, these trades have allowed us to report a quarter-over-quarter earnings per share growth rate of 9%, a 1.4% return on average assets, and a 12.5% return on average equity for the first quarter of 2026 and an increase in tangible book value per share over the prior quarter. Additionally, our 5-year tangible value per share a growth rate of 9% and 5-year earnings per share, compounded annual growth rate of 15.1% historically placed us in the top tier of our proxy group.

總結而言，這些特質使我們在 2026 年第一季得以呈報：每股盈餘季增 9%、平均資產報酬率 1.4%、平均股東權益報酬率 12.5%，且每股有形帳面價值較前一季上升。此外，我們過去 5 年每股有形帳面價值成長率為 9%，以及過去 5 年每股盈餘複合年成長率為 15.1%，歷史表現使我們在同業比較組（proxy group）中名列前段班。

We remain excited about our recently completed combination with Eastern Michigan Financial Corporation. The integration of operations is well underway and the cultures have meshed very well in the early stages of the process.

我們對近期完成與 Eastern Michigan Financial Corporation 的合併仍感到振奮。營運整合正順利推進，且在流程初期雙方文化已非常良好地融合。

That concludes my remarks. I will now turn the call over to Chuck.

以上是我的發言。接下來我把電話交給 Chuck。

Thanks, Ray, and good morning to everybody. This morning, we announced net income of $22.7 million or $1.32 per diluted share for the first quarter of 2026 compared with net income of $19.5 million or $1.21 per diluted share for the first quarter of 2025.

謝謝你，Ray，也向各位道早安。今天早上，我們公布 2026 年第一季淨利為 2,270 萬美元，稀釋後每股盈餘為 1.32 美元；相較之下，2025 年第一季淨利為 1,950 萬美元，稀釋後每股盈餘為 1.21 美元。

Higher net interest income and non-interest income, combined with lower provision expense more than offset increased overhead costs. Excluding after-tax onetime costs associated with the year-end 2025 acquisition of Eastern Michigan and previously announced core and digital banking system conversion, net income improved to $25.2 million or $1.46 per diluted share for the first quarter of 2026.

較高的淨利息收入與非利息收入，加上較低的提存費用，足以抵銷營運費用增加的影響。若排除與 2025 年底收購 Eastern Michigan 以及先前已公告之核心與數位銀行系統轉換相關的稅後一次性成本，2026 年第一季淨利改善至 2,520 萬美元，或每股稀釋盈餘 1.46 美元。

Using this non-GAAP basis, which we believe more accurately reflects our core earnings performance. Interest income on loans increased slightly by $0.2 million during the first quarter of 2026 compared to the prior year first quarter, reflecting loan growth that offset a lower yield on loans. Average loans totaled $4.83 billion during the first quarter of 2026 compared to $4.63 billion during the first quarter of 2025, an increase of $199 million that largely reflects the acquisition of Eastern Michigan at year-end 2025.

採用此一非 GAAP 基礎（我們認為其更能準確反映我們的核心獲利表現）。2026 年第一季放款利息收入較前一年同期小幅增加 20 萬美元，反映放款成長抵銷了放款收益率下降的影響。2026 年第一季平均放款總額為 48.3 億美元，較 2025 年第一季的 46.3 億美元增加 1.99 億美元，該增幅主要反映 2025 年底收購 Eastern Michigan。

Mercantile Bank's robust commercial loan fundings during most of 2025 and -- in the first quarter of 2026 were largely mitigated by significant levels of payoffs and partial paydowns of certain larger commercial loans during those periods. Our yield on loans during the first quarter of 2026 was 24 basis points lower than the first quarter of 2025, primarily reflecting the aggregate a 75 basis point decrease in the Fed funds rate during the last four months of 2025.

Mercantile Bank 在 2025 年大部分期間以及 2026 年第一季強勁的商業放款撥款，於上述期間在很大程度上被若干較大型商業放款的大量清償與部分償還所抵銷。2026 年第一季我們的放款收益率較 2025 年第一季低 24 個基點，主要反映 2025 年最後四個月聯邦基金利率合計下調 75 個基點的影響。

Interest income on securities increased $3.9 million during the first quarter of 2026 compared to the prior year quarter, reflecting growth in the securities portfolio and a higher yield. The growth in higher yield reflect the acquisition of Eastern Michigan, along with the ongoing portfolio growth and the reinvestment of maturing lower-yielding investments at Mercantile Bank. Average balances were up $357 million, and the average yield increased 54 basis points quarter over quarter.

2026 年第一季證券利息收入較前一年同期增加 390 萬美元，反映證券投資組合成長及收益率提高。較高收益率的成長反映收購 Eastern Michigan，以及 Mercantile Bank 持續的投資組合擴張，並將到期的低收益投資再投資於較高收益資產。平均餘額增加 3.57 億美元，平均收益率較上一季提高 54 個基點。

Interest income on other interest earning assets, a large portion of which is comprised of funds on deposit with the Federal Reserve Bank of Chicago, increased $1 million during the first quarter of 2026 compared to the prior year first quarter, reflecting a higher average [balance] that more than offset in lower average yield.

其他生息資產的利息收入（其中很大一部分為存放於芝加哥聯邦準備銀行的存款資金）在 2026 年第一季較前一年同期增加 100 萬美元，反映較高的平均餘額，且其增幅超過平均收益率下降的影響。

The quarter-over-quarter growth of $226 million largely reflects the acquisition of Eastern Michigan and deposit growth outpacing loan growth at Mercantile Bank, while the 80 basis point decline in yield primarily reflects the aggregate 75 basis point decrease in the federal funds rate during the last four months of 2025. In total, interest income was $5.1 million higher during the first quarter of 2026 compared to the prior year first quarter.

季對季增加 2.26 億美元主要反映收購 Eastern Michigan，以及 Mercantile Bank 存款成長快於放款成長；而收益率下降 80 個基點主要反映 2025 年最後四個月聯邦基金利率合計下調 75 個基點的影響。整體而言，2026 年第一季利息收入較前一年同期增加 510 萬美元。

Interest expense on deposits decreased $1.9 million during the first quarter of 2026 compared to the prior year first quarter, reflecting a lower cost of deposits that more than offset interest bearing deposit growth. The growth in interest-bearing deposit balances and the lower cost of these funds reflect the acquisition of Eastern Michigan, along with growth and lower deposit costs at Mercantile Bank.

2026 年第一季存款利息費用較前一年同期減少 190 萬美元，反映存款成本下降，其降幅超過付息存款成長的影響。付息存款餘額的成長與資金成本下降，反映收購 Eastern Michigan，以及 Mercantile Bank 的存款成長與存款成本降低。

Cost of interest-bearing deposits at both banks were positively impacted by the aforementioned decline in the federal funds rate during the latter part of 2025. Average interest-bearing deposits totaled $4 billion during the first quarter of 2026 compared to $3.44 billion during the first quarter of 2025, an increase of $555 million. The cost of all deposits was down 46 basis points during the first quarter of 2026 compared to the first quarter of 2025.

兩家銀行的付息存款成本均受益於前述 2025 年後期聯邦基金利率下降。2026 年第一季平均付息存款總額為 40 億美元，較 2025 年第一季的 34.4 億美元增加 5.55 億美元。2026 年第一季所有存款的成本較 2025 年第一季下降 46 個基點。

Interest expense on Federal Home Loan Bank of Indianapolis advances declined $0.3 million during the first quarter of 2026 compared to the prior year first quarter, largely reflecting a lower average balance. And interest expense on other borrowed funds increased $0.3 million during the first quarter of 2026 compared to the prior year first quarter, largely reflecting the impact of a $30 million term loan we obtained late in 2025 to assist in the cash portion of the Eastern Michigan acquisition.

2026 年第一季向印第安納波利斯聯邦住房貸款銀行（Federal Home Loan Bank of Indianapolis）借款的利息費用較前一年同期減少 30 萬美元，主要反映平均餘額較低。而其他借款的利息費用在 2026 年第一季較前一年同期增加 30 萬美元，主要反映我們於 2025 年底取得 3,000 萬美元定期貸款之影響，用以支應收購 Eastern Michigan 的現金對價部分。

In total, interest expense was $2.3 million lower during the first quarter of 2026 compared to the prior year first quarter. Net interest income increased $7.4 million during the first quarter of 2026 compared to the prior year first quarter, primarily reflecting growth in earning assets and a higher net interest margin.

整體而言，2026 年第一季利息費用較前一年同期減少 230 萬美元。2026 年第一季淨利息收入較前一年同期增加 740 萬美元，主要反映生息資產成長及淨利差提高。

Average earning assets totaled $6.42 billion during the first quarter of 2026 compared to $5.70 billion during the first quarter of 2025, an increase of $719 million that largely reflects the acquisition of Eastern Michigan at year-end 2025, along with securities and overnight funds growth at Mercantile Bank.

2026 年第一季平均生息資產總額為 64.2 億美元，較 2025 年第一季的 57.0 億美元增加 7.19 億美元，該增幅主要反映 2025 年底收購 Eastern Michigan，以及 Mercantile Bank 的證券與隔夜資金成長。

The net interest margin was 3.55% during the first quarter of 2026 compared to 3.47% during the first quarter of 2025. The improvement is largely due to the Eastern Michigan acquisition. The yield on earning assets declined 31 basis points, while the cost of funds declined 39 basis points during the first quarter of 2026 compared to the prior year first quarter.

2026 年第一季淨利差為 3.55%，相較 2025 年第一季的 3.47%。改善主要來自收購 Eastern Michigan。2026 年第一季生息資產收益率較前一年同期下降 31 個基點，而資金成本下降 39 個基點。

Impact on our net interest margin over the past couple of years was our strategic initiative to lower the loan-to-deposit ratio, which generally entailed deposit growth exceeding loan growth and using additional monies to purchase securities. A large portion of deposit growth was in the higher costing money market and time deposit products, while the purchased securities provided a lower yield than loan products.

過去幾年影響我們淨利差的一項因素，是我們降低放款對存款比率的策略性措施；該措施通常意味著存款成長超過放款成長，並將額外資金用於購買證券。存款成長中有相當大一部分來自成本較高的貨幣市場與定期存款產品，而所購買的證券收益率低於放款產品。

Despite that strategic initiative and declines in the federal funds rate during the latter parts of 2025 and 2024, our quarterly net interest margin was relatively stable during that time period ranging from a high of 3.52% to a low of 3.41% and averaging 3.47%. We remain committed to managing our balance sheet in a manner that minimizes the impact of changing interest rate environment on our net interest margin. Basic funds management practices such as matched funding, combined with scheduled maturities of lower-yielding fixed-rate commercial loans and securities and a higher rate time deposits along with the scheduled rate adjustments on residential mortgage loans should provide for (inaudible) will be stable net interest margin in future periods.

儘管有該策略性措施，以及 2025 年與 2024 年後期聯邦基金利率下調，我們在該期間的季度淨利差仍相對穩定，介於最高 3.52% 與最低 3.41% 之間，平均為 3.47%。我們仍致力於以可將利率環境變動對淨利差影響降至最低的方式管理資產負債表。基本的資金管理作法（例如期限匹配融資），結合低收益固定利率商業放款與證券的到期安排，以及較高利率定期存款的到期安排，再加上住宅抵押貸款的既定利率調整，應可提供（聽不清楚）未來期間穩定的淨利差。

We recorded a negative provision expense of $1.8 million during the first quarter of 2026, compared to a positive provision expense of $2.1 million during the prior year first quarter. The first quarter negative provision expense was primarily comprised of improved economic forecast, changes in loan mix, a reduction in the residential mortgage loan portfolio, a decline in specific allocations and limited net growth in commercial loans due to the significant volume of loan payoff and partial paydowns.

2026 年第一季我們認列負的提存費用 180 萬美元，相較前一年同期為正的提存費用 210 萬美元。第一季負的提存費用主要由經濟預測改善、放款組合變動、住宅抵押貸款投資組合縮減、特定提存配置下降，以及因大量放款清償與部分償還導致商業放款淨成長有限所構成。

The reserve balance decreased $1.5 million during the first quarter of 2026, reflecting the net impact of the negative $1.8 million provision expense and net loan recoveries of $0.3 million. The reserve balance equaled 1.18% of total loans as of March 31, 2026, and compared to 1.21% at year-end 2025.

2026 年第一季備抵餘額減少 150 萬美元，反映負的提存費用 180 萬美元與淨放款回收 30 萬美元的綜合影響。截至 2026 年 3 月 31 日，備抵餘額占放款總額的 1.18%，相較 2025 年底為 1.21%。

Non-interest expenses were $11 million higher during the first quarter of 2026 compared to the prior year first quarter, excluding onetime costs associated with the year-end 2025 acquisition of Eastern Michigan and previously announced core and digital banking system conversion that aggregated $3.2 million, non-interest expenses increased $7.8 million. The increase in core operating costs largely reflects higher salary and benefit costs.

2026 年第一季非利息費用較前一年同期增加 1,100 萬美元；若排除與 2025 年底收購 Eastern Michigan 以及先前已公告之核心與數位銀行系統轉換相關、合計 320 萬美元的一次性成本，非利息費用增加 780 萬美元。核心營運成本的增加主要反映薪資與福利成本上升。

In addition, we recorded a $1.2 million increase in allocations to the reserve for unfunded loan commitments primarily reflecting a significantly higher level of commercial loan commitments that have been accepted by customers.

此外，我們對未動用放款承諾準備金的提列增加 120 萬美元，主要反映已被客戶接受的商業放款承諾水準顯著提高。

The remaining increase in non-interest expense quarter over quarter generally depicts the cost of inflation and the increased cost of a larger balance sheet and office network. Eastern Michigan Bank's non-interest expenses totaled $4 million during the first quarter of 2026.

非利息費用其餘的季對季增加，通常反映通膨成本，以及更大規模的資產負債表與辦公據點網絡所帶來的成本上升。Eastern Michigan Bank 於 2026 年第一季的非利息費用合計為 400 萬美元。

Despite a $3.2 million increase in pretax income during the first quarter of 2026 compared to the prior year first quarter, our federal income tax expense increased only $0.1 million. The acquisition of transferable energy credits and net benefits associated with our low income housing and historical tax credit activities equaled $0.8 million during the first quarter of 2026.

儘管2026年第一季稅前所得較前一年同期增加320萬美元，我們的聯邦所得稅費用僅增加10萬美元。2026年第一季，收購可轉讓能源抵免以及與我們低收入住宅與歷史稅額抵免活動相關的淨效益合計為80萬美元。

The tax benefit resulting from these activities, along with our tax exempt [municipal balance] and bank-owned life insurance portfolios provided for an effective tax rate of 16.9% during the first quarter 2026. Additional acquisitions of [transferable] energy tax credits maybe made from time to time, subject to investor policy, tax credit availability, and tax credits derived from our low-income housing and historical tax credit activities. Both Mercantile Bank and Eastern Michigan Bank have strong and well-capitalized (inaudible). Mercantile Bank's total risk-based capital ratio was $13.8 million as of March 31, 2026, $215 million above the minimum threshold to be categorized as well capitalized.

這些活動所產生的稅務效益，加上我們的免稅[市政餘額]與銀行持有的人壽保險投資組合，使我們在2026年第一季的有效稅率為16.9%。在符合投資人政策、稅額抵免可得性，以及源自我們低收入住宅與歷史稅額抵免活動之稅額抵免的前提下，我們可能不時進一步收購[可轉讓]能源稅額抵免。Mercantile Bank與Eastern Michigan Bank皆具備強健且資本充足（聽不清）。截至2026年3月31日，Mercantile Bank的總風險基礎資本比率為1,380萬美元，較被歸類為資本充足（well capitalized）的最低門檻高出2.15億美元。

Eastern Michigan Bank's total risk-based capital ratio was 20.5% as of March 31, 2026, $30 million above the minimum threshold to be categorized as well capitalized. We did not repurchase shares during the first quarter of 2026. We have $6.8 million available in our current repurchase plan.

截至2026年3月31日，Eastern Michigan Bank的總風險基礎資本比率為20.5%，較被歸類為資本充足（well capitalized）的最低門檻高出3,000萬美元。我們在2026年第一季未進行庫藏股回購。我們目前的回購計畫尚有680萬美元可用額度。

On slide 23 of the investor presentation, we share our latest assumptions on the interest rate environment and key performance metrics for the remainder of 2026 with the caveat that market conditions remain volatile making forecasting difficult. This forecast is predicated on no changes in the federal funds rate during the remainder of 2026, although we believe our net interest margin will remain relatively stable in a changing interest rate environment as it did during the latter part of 2024 and throughout 2025.

在投資人簡報第23頁，我們分享對2026年剩餘期間利率環境與關鍵績效指標的最新假設，但需注意市場狀況仍然波動，使得預測困難。此預測假設2026年剩餘期間聯邦基金利率不變；不過，我們相信在利率變動環境下，我們的淨利差將維持相對穩定，正如2024年後段及整個2025年所呈現的情況。

We are projecting loan growth in a range of 5% to 7% annualized during each quarter, which encompasses a strong commercial loan pipeline as well as fewer commercial payoffs during the remainder of the year. We are forecasting our second quarter net interest margin to be similar to that of the first quarter with steady increases throughout the last half of the year as we benefit from commercial loan growth, lower levels of monies at the Federal Reserve Bank of Chicago, and maturing low-yielding fixed rate commercial real estate loans and investments, along with higher costing time deposits.

我們預估每一季貸款成長年化介於5%至7%，其中包含強勁的商業貸款案源（pipeline），以及今年剩餘期間較少的商業貸款清償。我們預測第二季淨利差將與第一季相近，並在下半年隨著商業貸款成長、存放於芝加哥聯邦準備銀行的資金水位下降、低收益固定利率商用不動產貸款與投資到期，以及高成本定期存款增加等因素而逐步上升。

We are projecting a federal tax rate of 17%, which encompasses continued growth in net benefits from our low income housing and historical tax credit activities along with additional transferable energy tax investments.

我們預估聯邦稅率為17%，其中包含我們低收入住宅與歷史稅額抵免活動所帶來的淨效益持續成長，以及額外的可轉讓能源稅額抵免投資。

Expected quarterly results for non-interest income and non-interest expense are also provided for your reference. Non-interest expense projections reflect personnel investments that were made in the latter part of 2025, first quarter of 2026, and expected during the remainder of 2026 and to support expansion in Southeast Michigan as well as to support operational areas as we switch core and digital banking providers to enhance the durability, the efficiency, and experience for customers and employees. One-time-type costs associated with the core and digital banking system conversion are not included.

我們也提供非利息收入與非利息費用的預期季度結果供您參考。非利息費用的預估反映了我們在2025年後段、2026年第一季已進行，以及預計在2026年剩餘期間將進行的人員投資，以支持在密西根州東南部的擴張，並在我們更換核心系統與數位銀行服務供應商時支援營運部門，以提升對客戶與員工而言的穩健性、效率與體驗。與核心系統與數位銀行系統轉換相關的一次性成本未納入。

In closing, we are very pleased with our operating results during the first quarter of 2026 and continued strong financial condition and believe we remain well positioned to continue to successfully navigate through the myriad of challenges and uncertainties faced by all financial institutions.

最後，我們對2026年第一季的營運成果與持續強健的財務狀況感到非常滿意，並相信我們仍具備良好定位，能持續成功因應所有金融機構所面臨的各種挑戰與不確定性。

That concludes my prepared remarks. I'll now turn the call back to Ray.

以上為我事先準備的發言。接下來我把電話交回給Ray。

Thank you, Chuck. That concludes the prepared remarks from management. We will now move to the question-and-answer portion of the call.

謝謝你，Chuck。管理階層的事先準備發言到此結束。我們現在進入問答環節。

(Operator Instructions)

（接線員指示）

Brendan Nosal, Hovde Group.

Brendan Nosal，Hovde Group。

Maybe just starting off here on the net interest margin. I guess this quarter came in towards the lower end of the guided range. It looks like you tempered the range for the remainder of the year by 10 basis points or so. I guess we haven't gotten any more rate cuts, and you're still not forecasting any in your outlook. So just kind of curious, what were the main drivers of that change to how you see the margin trend due to the balance of the year?

我先從淨利差開始。這一季的結果似乎落在指引區間的較低端。看起來你們把今年剩餘期間的區間下調了大約10個基點左右。我想我們並沒有看到更多降息，而你們在展望中也仍未預測會降息。所以我有點好奇，促使你們改變對今年剩餘期間利差走勢看法的主要驅動因素是什麼？

Yes. And the change -- Brendan, it's a good question. I'm glad you asked it because I wanted to make sure everybody understood that is a reflection of the change in our balance sheet mix. We are expecting -- and really because of the deposit growth that we've seen, I mean, as we talked about, as you saw in our release, we had incredibly strong deposit growth. The growth numbers themselves were incredibly strong, but that comes on the top of -- we typically lose anywhere from $80 million to $100 million in deposits in the first part of the quarter, as our commercial customers pay taxes, bonuses, partnership distributions.

是的。這個變化——Brendan，這是個好問題。我很高興你問到，因為我想確保大家理解，這反映的是我們資產負債表組合的變化。我們預期——其實主要是因為我們看到的存款成長。正如我們討論過、你也在新聞稿中看到的，我們的存款成長非常強勁。成長數字本身非常亮眼，但這是在——我們通常在季度前段會流失約8,000萬到1億美元存款之上，因為我們的商業客戶會支付稅款、獎金、合夥分配等。

So typically, you don't see net growth in the first quarter. I can show you that our customers still paid all those items but yet we were able to demonstrate very, very strong deposit growth. And that deposit growth was throughout the different types of products and the types of customers, business, public unit, and personal. And so what we saw was that increase in deposits came at the same time, we saw the paydowns in the commercial loans that didn't allow for commercial loan growth. So really all of that deposit growth went to the Federal Reserve Bank of Chicago. Obviously, a lower yield than what we would have expected on the loan portfolio.

因此通常第一季不會看到淨成長。我可以告訴你，我們的客戶仍然支付了所有這些項目，但我們仍能展現非常、非常強勁的存款成長。而且這些存款成長分布在不同產品類型與不同客群，包括企業、公共部門與個人。因此我們看到存款增加的同時，也看到商業貸款的償還（paydowns），使得商業貸款無法成長。所以實際上，這些存款成長都流向芝加哥聯邦準備銀行。很明顯，其收益率低於我們原本預期在貸款投資組合上能取得的水準。

Going forward, we do expect, as I mentioned, that the margin will continue to improve pretty much at the same pace as what the expectations were originally back in January with the guidance, but we're just kind of starting at a lower spot. And I would say that we still expect deposit growth to continue at our budgeted pace, obviously, which makes for a very strong year.

展望未來，如我提到的，我們預期利差將持續改善，改善速度大致與1月提出指引時的原先預期相同，只是我們是從較低的起點開始。我也會說，我們仍預期存款成長會以我們預算的步調持續進行，這當然會讓今年成為非常強勁的一年。

We do think with our commercial loan pipeline that despite the minimal level of net growth that we had in the first quarter that we will catch back up during the last nine months of the quarter, and get to where we expected to be. So we're kind of ending with more deposits than what we thought we were, which results in a higher balance of the Fed, which has a small compression effect on our margins.

我們確實認為，憑藉我們的商業貸款案源，儘管第一季淨成長幅度很小，但在接下來九個月我們會追趕回來，達到原先預期的水準。因此我們期末的存款會比原本想像的更多，導致聯準會存放餘額更高，對我們的利差造成些微的壓縮效果。

So a lot going on there with the margin, but I think it's -- at the bottom line is just more deposits same level of loans, so those more deposit balances are going into the lower-yielding accounting at the Federal Reserve.

所以利差方面有很多因素在作用，但我認為——歸根結底就是存款更多、貸款水準相同，因此更多的存款餘額進入聯準會的低收益帳戶。

Okay. Chuck, that's really helpful color. Perhaps one more for me, just kind of pivoting. Can you just update us on the Southeast Michigan initiative you have ongoing with the new team down there?

好的。Chuck，這些說明非常有幫助。也許我再問一個，稍微轉個方向。你能否更新一下你們在密西根州東南部推動的計畫，以及那邊新團隊的進展？

And then on a related note, any updated thoughts on opportunities to capitalize on M&A dislocation across the state?

另外相關的一點，對於全州因併購（M&A）造成的市場錯位所帶來的機會，你們是否有任何更新的看法？

Sure. This is Ray. We've added some commercial banking talent on the east side of the state, and they have gained some traction and are performing very well relative to our expectations, growing their book, not only on the asset side, but doing a very nice job on the liability side as well.

當然。這裡是Ray。我們在州的東側增添了一些商業銀行人才，他們已取得一些進展，表現相較於我們的預期非常好，擴大其業務規模，不僅在資產端，也在負債端做得非常出色。

We plan to continue to add more talent in that part of the state as we move through this year and beyond, so we think we can continue to build on momentum there. From an M&A standpoint, our position really hasn't changed from prior quarters that, you know, we've done two transactions in our company's history, just completed one. We'll be looking for the same things in future opportunities that we look for in past opportunities and things like [congruent culture], the ability to prudently grow assets with outstanding asset quality, to continue and improve deposit characteristics of our corporation and be very profitable. So very similar objectives we've always had.

我們計畫在今年及之後持續在州的那個區域增添更多人才，因此我們認為可以在那裡持續累積動能。就併購而言，我們的立場與前幾季並沒有真正改變；你知道，我們公司歷史上做過兩筆交易，剛完成其中一筆。未來若有機會，我們仍會尋找與過去相同的要素，例如[文化契合]、能夠在維持卓越資產品質的前提下審慎擴張資產、持續改善我們公司的存款特性，並且具備很高的獲利能力。因此目標與我們一向以來的目標非常一致。

Damon Del Monte, KBW.

Damon Del Monte，KBW。

Hey, good morning guys. Hope everybody's doing well.

嘿，各位早安。希望大家都一切順利。

Just to circle, morning, just to circle back on the margin, Chuck, real quick. Is there much in the way of fair value accretion in your reported margin number?

我想回到利差的問題上，Chuck，很快問一下。在你們公布的利差數字裡，公允價值增值攤銷（fair value accretion）的影響大嗎？

No, I think if you look at, it's about, if you exclude the securities portfolio, which really is an accretion, it's only about a one basis point impact to our margin. Now, we did get the fair value Eastern securities portfolio, which did enhance the securities yield as we go forward. But from a loan and deposit standpoint, it's about one basis point.

不，我認為如果你看一下，大概是——如果你排除證券投資組合（那其實就是增值攤銷），對我們利差的影響大概只有 1 個基點。當然，我們確實取得了 Eastern 的公允價值證券投資組合，這會在未來提升證券收益率。但就貸款與存款的角度來看，大概是 1 個基點。

Thank you. Thanks for that clarification. And then I guess. With regards to, the loan growth outlook and some of the payoffs you saw this quarter, were those payoffs from like Legacy Mercantile or were those some loans that you guys maybe were kind of, working out from the Eastern Michigan side that you didn't want to keep on balance sheet?

謝謝。感謝這個釐清。然後我想問，關於貸款成長展望以及你們本季看到的一些提前清償（payoffs），那些清償是來自像是 Legacy Mercantile 的部分，還是說有些貸款可能是你們在 Eastern Michigan 那邊在處理、你們不想留在資產負債表上的？

No, it was entirely the former, not the latter.

不，完全是前者，不是後者。

Okay, got it. And then I guess, lastly, on, credit continues to be pristine. Very minimal NPAs and continue to kind of book some net recoveries. The reserve has come down the last couple quarters with negative provisions. How do we think about the provision going forward with the growth coming on? I mean, do you feel that, you have room to kind of grow into a loan loss reserve and let that drift a little bit lower as you get this loan growth? Just looking for a little guidance on the provision line, basically.

好的，了解。最後一點，信用狀況仍然非常乾淨。不良資產（NPA）非常少，而且持續有一些淨回收（net recoveries）。準備金在過去幾季因為負提存而下降。隨著成長進來，我們該如何看待未來的提存？我的意思是，你是否覺得你們有空間讓貸款損失準備金隨著貸款成長而「長進去」，讓準備金率再往下漂一點？基本上想請你對提存費用這條線給一點指引。

Yes. I think when you look at whether it's a negative, whether it's positive and over the last couple of quarters, as you mentioned, it has been negative it's been negative because of the lack of net loan growth onto our balance sheet. As you know, CECL has put banks into a corner in regards to how it calculates its loan loss reserve and how it manages it.

是的。我認為你看提存是負的還是正的——如你提到的，過去幾季確實是負的——之所以為負，是因為我們資產負債表上缺乏淨貸款成長。如你所知，CECL 在貸款損失準備金的計算與管理方式上，讓銀行處於相當受限的狀態。

With Mercantile having basically minimal losses since coming out of the great recession, we rely really heavily on qualitative factors. As a matter of fact, if you look at the composition of our reserve, about 60% of our reserve balance is supported by qualitative versus quantitative of course, quantitative primarily driven by lost history performance.

Mercantile 自大衰退後基本上損失極少，因此我們非常依賴質化因素。事實上，如果你看我們準備金的組成，大約 60% 的準備金餘額是由質化因素支撐，而非量化因素；量化當然主要是由歷史損失表現所驅動。

So it's always a battle. We like to have -- we like strong capital. We also like a very strong reserve. We're very comfortable with the balance of our reserve. Ray already mentioned it relative to our NPAs, which themselves and to your point, Damon, have been pretty pristine for a very, very long time.

所以這一直是一場拉鋸。我們喜歡——我們喜歡強健的資本，同時也喜歡非常強健的準備金。我們對目前準備金的水準非常放心。Ray 也已經提到，對照我們的不良資產（NPA）來看——正如你所說，Damon——我們的資產品質在非常、非常長的一段時間裡都相當乾淨。

So I think kind of back to your specific question, I think when we certainly expect to have given our guidance, some very strong loan growth, at least through the remainder of 2026, notwithstanding any other major impacts to our measurements within CECL, we certainly would expect a positive provision expense going forward.

所以回到你具體的問題，我認為在我們的指引之下，我們確實預期會有非常強勁的貸款成長，至少到 2026 年剩餘期間為止；在不考慮 CECL 衡量指標出現其他重大影響的前提下，我們未來當然會預期提存費用轉為正數。

The wildcard is the economic forecast on an overall basis, the American United States economy continues to do well. And so we really don't see much. We haven't seen much change in economic conditions have an impact on our reserve for quite a while now. Just a little bit of positives and minuses as we go quarter-to-quarter. We don't really see a lot of changes in our qualitative measurements.

不確定因素在於整體的經濟預測。美國整體經濟仍然表現良好，所以我們其實看不到太多變化。我們也已經有一段時間沒有看到經濟狀況的變動對我們準備金造成影響了。每季之間只是一些小幅的正負變動。我們在質化衡量上並沒有看到太多改變。

A lot of that is levels of NPA, the way that we administer portfolios, those types of things. I don't see really any changes there.

其中很多是 NPA 的水準、我們管理投資組合的方式等等。我不認為那裡會有什麼變化。

So I think the driver of our provision expense is loan growth. As long as we can keep the pristine asset quality, which we think certainly that we can. So future provision, I think, is going to be really dictated by loan growth. And for our comments this morning, we expect to have very solid loan growth for the rest of this year and certainly into the future periods as well.

所以我認為提存費用的驅動因素是貸款成長。只要我們能維持乾淨的資產品質——我們也確實認為可以——那麼未來的提存我想就會主要由貸款成長所決定。就我們今天早上的評論而言，我們預期今年剩餘時間會有非常穩健的貸款成長，未來期間也同樣如此。

Nathan Race, Piper Sandler.

Nathan Race，Piper Sandler。

Chuck, just thinking about the level of cash or excess liquidity, you're looking at run rate going forward. Can you just get some light in terms of how much export liquidity you want to keep on the balance sheet maybe versus redeploying the securities portfolio. And within that context, curious if you're pretty content with the size of this book at this point, just based on the initiatives from the last several quarters. Or is kind of thought just to run with higher excess liquidity just given the loan growth guide?

Chuck，想請教你們未來打算維持的現金或超額流動性水準。你能否說明一下，你們希望在資產負債表上保留多少超額流動性，相較於把資金重新部署到證券投資組合？在這個脈絡下，也想了解你們是否對目前這本投資組合的規模感到滿意——基於過去幾季的各項措施——或者你們的想法是，在貸款成長指引之下，乾脆維持較高的超額流動性？

Yes. I think it's a combination of both. It's a really good question. I think our securities, we're right around 16% of total assets now and the plan is to keep it there. Again, with commercial loan growth, that would drive total assets, which of case will drive the size of the securities portfolio.

是的。我認為兩者都有。這是個很好的問題。我們的證券投資組合目前大約占總資產的 16%，計畫是維持在這個水準。同樣地，商業貸款成長會推動總資產，而總資產又會帶動證券投資組合的規模。

So we'll have to grow that in congruence with the growth and the rest of the balance sheet, primarily the commercial loan portfolio. Obviously, we love the deposit growth. We'd love to put it into the commercial loan portfolio or residential mortgage portfolio for that matter as soon as we can. But obviously, the deposit growth.

因此我們必須讓它與資產負債表其他部分的成長同步，主要是商業貸款投資組合。顯然，我們很喜歡存款成長，也希望能盡快把它投入商業貸款投資組合，或就此而言投入住宅房貸投資組合。但很明顯，存款成長——

We came into the year especially with Eastern joining us with a lot of excess cash sitting at the Federal Reserve, if you will. And that only grew because of the deposit growth and lack of net loan growth in the first quarter. We think that's going to turn. But I think on an overall basis, we'll keep a higher level than historical dollars at the Federal Reserve. But I think it will -- our expectation is it will be less because we do expect to fund loan growth.

我們進入今年時，特別是 Eastern 加入後，有大量超額現金放在聯準會（Federal Reserve），如果你這麼說的話。而由於存款成長以及第一季缺乏淨貸款成長，這個水位只會更高。我們認為這會扭轉。但整體而言，我們會在聯準會維持比歷史金額更高的水準；不過我認為——我們的預期是它會下降，因為我們確實預期要為貸款成長提供資金。

And with that, we'll have to increase somewhat the size of the securities portfolio. And where that ends with our reserve -- our balance at the Federal Reserve, it's hard to know with all those numbers. Certainly, we expect it to be quite a bit lower than what it has been. But I would say the balance -- my expectation of that balance is to be well much, much higher than historical norms. And I would say historical norm is probably closer to $80 million, maybe $100 million.

而在那樣的情況下，我們也必須在某種程度上增加證券投資組合的規模。至於最後我們在聯準會的準備金——也就是我們在聯準會的餘額——會落在哪裡，因為牽涉到這些數字，很難精確判斷。我們當然預期會比目前低很多。但我會說，我對那個餘額的預期會遠遠、遠遠高於歷史常態。我認為歷史常態大概更接近 8,000 萬美元，也許 1 億美元。

So I would expect the balance to be well over $200 million at the end of the year.

所以我預期年底時的餘額會遠高於 2 億美元。

Okay. Got it. That's really helpful. And Chuck, you mentioned, I think, fixed rate loan repricing is a margin tailwind as we get in the back half of this year. Can you just help us with the yield pickup that you have on that portfolio over the next few quarters?

好的，了解。這很有幫助。Chuck，你提到我想是固定利率貸款的重訂價（repricing）會在今年下半年成為利差的順風。你能否協助我們了解，未來幾季那個投資組合的收益率提升幅度？

Yes. It's based on the time frame on that is the rest of this year and into next year. And going from memory, I don't have it in front of me. I think the rate is about 5% on that portfolio, what's repricing.

是的。那個時間範圍是今年剩餘時間以及明年。憑記憶說，我手邊沒有資料。我認為那個正在重訂價的投資組合利率大概是 5%。

And then is it fair to assume new loans on a blended basis are coming on 6.5% these days or?

那麼是否可以合理假設，新承作貸款以加權平均來看，現在大概是 6.5% 左右，或是？

Yes, upper 6% is around 7%.

是的，6% 後段，大約到 7%。

Okay. Great. And then just lastly, do you have the spot rate cost of deposits in March and just generally how you're thinking about deposit costs trending if the Federal remains on pause this year?

好的，很好。最後一個問題，你們在 3 月的存款成本即期水準（spot rate）是多少？以及如果聯準會今年維持暫停升降息，你們大致上如何看待存款成本的走勢？

Can you just repeat that second one about the cost? I don't quite get that question.

你可以再重複一下第二個關於成本的問題嗎？我不太理解那個問題。

Yes. I was just wondering if you had the spot cost of the deposits in the -- in March and just how you're thinking about the trajectory of deposit costs if the Fed remains on pause this year?

好的。我只是想問你是否有 3 月的存款即期成本（spot cost），以及如果聯準會今年維持暫停升降息，你們如何看待存款成本的變化軌跡？

I brought all this stuff with me, but I didn't bring it on a monthly basis. So I think, as I mentioned, we've seen the growth throughout almost all the categories, and we're down a little bit non-interest-bearing if you look at our balance sheet. But again, that's where a significant portion of those tax bonus payments and partnership distributions come out of.

我把這些資料都帶來了，但我沒有帶到按月的資料。所以我想，如我提到的，我們幾乎在所有類別都看到成長；如果你看我們的資產負債表，無息存款（non-interest-bearing）略有下降。但同樣地，那也是相當大一部分稅務獎金支付以及合夥分配（partnership distributions）支出的來源。

As Ray mentioned, the Southeast Michigan, they brought almost as much deposits as they have loans. And a lot of those deposits are coming with the loan relationships, so they tend to be operating accounts, which obviously, we love.

如 Ray 所提到的，東南密西根那邊帶來的存款幾乎和他們的放款一樣多。而且其中很多存款是隨著放款關係一起帶進來的，所以通常是營運帳戶，這點當然是我們很喜歡的。

So I would say it's a blend of all the different deposits from zero to non-interest-bearing, 1% or 1.5% on interest checking, not much in savings. And then our money market account is in the 3s, depending on the type and the size of the balance.

所以我會說這是各種不同存款的混合，從零利率到無息存款、計息支票約 1% 或 1.5%，儲蓄存款不多。然後我們的貨幣市場帳戶利率在 3% 多，視類型與餘額規模而定。

So I think it's pretty well a blend. We're not looking for any -- if you look at non-maturity deposits or everything but time deposits, we're not really looking for -- we're not certainly not budgeting for any change in rates on any of those things. And I think the growth will be relatively consistent within those buckets to provide for a steady cost of those types of deposits for the rest of the year.

所以我認為基本上是相當均衡的組合。我們並沒有在尋求任何——如果你看非到期存款或除定期存款以外的所有存款，我們其實沒有在尋求——我們當然也沒有在預算中假設這些項目的利率會有任何變動。我認為在今年剩餘時間內，這些類別中的成長會相對一致，從而讓這類存款的成本維持穩定。

Okay. That's really helpful. If I could just actually sneak one more in. Could you just update us in terms of how much of expenses do you expect to come out of the run rate in the first quarter next year following the core conversion?

好的。這真的很有幫助。如果我可以再偷偷問一個問題：核心系統轉換完成後，明年第一季的費用 run rate 中，你們預期會有多少費用可以被移除（節省）？

We're looking for some pretty sizable savings, especially in regards to the new contract on our core. It will be sizable. Maybe that's something that -- that's still something that we're calculating, trying to figure out what this new core looks like, what we need from a personnel standpoint. Maybe we can continue to work on that and give you some better guidance in July.

我們預期會有相當可觀的節省，特別是與我們核心系統新合約相關的部分，會很可觀。也許這是——我們仍在計算的事情，正在釐清新的核心系統會是什麼樣子、從人力配置角度我們需要什麼。也許我們可以繼續努力，並在 7 月給你更好的指引。

Daniel Tamayo, Raymond James.

Daniel Tamayo，Raymond James。

Great. Maybe just to go back to the NIM guide and the loan growth, curious if you can kind of walk us through what may be downside risk given the reduction in margin guidance we saw -- we saw it today, but you did explain it with the deposits which I get. But if the payoffs kind of remain elevated throughout the year or for the next few quarters, curious, I guess, what's driving the confidence that, that will slow. But then if they don't, what kind of impact do you think that would have on the margin and NII?

很好。回到淨利差（NIM）指引與放款成長這塊，我想請你們帶我們走一遍：在你們下調利差指引的情況下，可能的下行風險是什麼？我們今天看到下調了，但你們用存款端做了解釋，我理解。但如果提前清償（payoffs）在今年或接下來幾季仍維持在高檔，我想知道你們對它會放緩的信心來源是什麼？如果它沒有放緩，你們認為對利差與淨利息收入（NII）會有什麼影響？

Yes. Clear, Daniel, this is Chuck. And clearly, it depends on the magnitude. I think to kind of put things in perspective, we had started to talk about -- because we saw and we were starting to report on in this conference I think at least in July or probably not even April of last year that we saw some pretty big payoffs coming. Clearly, our bankers are talking to the borrowers all the time and understanding whether they were going to put a project in the secondary market, whether they were going to sell their businesses.

是的。Daniel，我很清楚，你好，我是 Chuck。這顯然取決於規模。為了讓事情更有脈絡，我們其實早就開始談——因為我們看到，而且我想我們至少在 7 月、甚至可能在去年 4 月的這場會議上就開始提到——我們看到有一些相當大的提前清償即將發生。很明顯，我們的銀行客戶經理一直在和借款人溝通，了解他們是否要把專案放到次級市場、是否要出售他們的企業。

We usually have a pretty -- some advanced notice where we become aware of the payoffs, especially the bigger ones get everybody's attention. And that has always been that way for whatever reason, the last three or four quarters, however you want to calculate it, we have seen -- we've talked about it, a pretty high level of payoffs. They're all unrelated to each other. It's just more of a timing coincidence than anything else.

通常我們會提前得到相當——一些預先通知，讓我們知道會有提前清償，尤其是較大的案子會引起所有人的注意。一直以來都是如此。只是因為某些原因，過去三到四個季度——不管你怎麼計算——我們確實看到、也談到過，提前清償水準相當高。這些事件彼此之間都沒有關聯，更多只是時間點上的巧合，而不是其他因素。

Now payoffs, refinancings to the secondary market are a normal part of what we see. And so, we do expect those to continue. But we do expect them to continue more at a normal or -- I would say, normal a typical level that you talked about and put in the release.

現在，提前清償、再融資到次級市場，是我們所見到的正常現象之一。因此，我們預期這些仍會持續。但我們也預期它們會回到較正常、或我會說是你在新聞稿中提到並納入的那種典型水準。

When we look at our pipeline report, we're not only looking at loan fundings, but we're also looking at paydowns. We look at our pipeline on a net basis and taking the same process that we've always used, that we've always reported, always taken into account and managing the balance sheet, we just don't see -- maybe that could change, but we just don't see the same level of payoffs that we've seen more recently, at least for the remainder of 2026. Again, we will see some. We know there's some out there, just not to the level that we've seen.

當我們看我們的 pipeline 報告時，我們不只看放款撥付（fundings），也看還款/減少（paydowns）。我們以淨額基礎來看 pipeline，沿用我們一直以來使用、一直以來揭露、也一直納入並用來管理資產負債表的同一套流程，我們就是沒有看到——當然未來可能會改變——但至少在 2026 年剩餘時間，我們沒有看到像近期那樣高水準的提前清償。再說一次，我們會看到一些，我們知道外面確實有一些，只是不會到我們近期看到的那個程度。

Now having said that, as we reported, we had $180 million, and I'll call it pay downs. There's various categories there in the first quarter alone. That's just on the larger credits. Now we also have, call it, $15 million, $20 million of month just a normal amortization. You put all that together, we funded well over $200 million in commercial loans during the quarter.

話雖如此，如我們所揭露的，僅第一季我們就有 1.8 億美元，我把它稱為 pay downs（本金減少/提前償還），其中包含不同類別——這只是較大型授信案的部分。另外我們每月還有大約 1,500 萬到 2,000 萬美元的正常攤還。把這些加總起來，本季我們撥付的商業放款超過 2 億美元。

And that's reflective of a very strong pipeline. And our pipeline right now is even stronger than it was at the end of 2025. So we feel very confident about the level of loan fundings that we're going to have executive management team feels confident on payoffs, given the history that our commercial bankers have shown to be on top of these types of things as they work with their borrowers day in and day out.

這反映出非常強勁的 pipeline。而我們目前的 pipeline 甚至比 2025 年底時更強。因此，對於我們將會有的放款撥付水準，我們非常有信心；管理團隊也對提前清償的情況有信心，因為從過往經驗來看，我們的商業銀行團隊在日常與借款人合作時，一直都能掌握這類事項。

So we feel very confident sitting here that we're going to see some strong 5% to 7% annualized growth. That's a forecast. I think the surprise would be not in the funding side, but we'd be in the payoff side. If somebody suddenly find there's a rational payoffs coming up. And we see the same level of deposit growth as we're budgeting.

所以我們坐在這裡非常有信心，我們將看到年化 5% 到 7% 的強勁成長。這是一個預測。我認為意外不會出現在撥付端，而會出現在提前清償端——如果突然有人發現有一波合理的提前清償即將到來。同時，我們也會看到與預算一致的存款成長水準。

Yes, we would end up with a higher level of money sitting at the Federal Reserve, which would put a damper some compression on our margin.

是的，那樣的話，我們最終會有更高水位的資金放在聯準會（Federal Reserve），這會對我們的利差造成一些抑制、帶來一些壓縮。

Again, the size is going to drive, whether that's 2 basis points, 5 basis points or something like that. So I would kind of put it in kind of what I would see as maybe a normalization of some higher levels of payoffs, I would say, maybe 2 to 5 basis points of margin compression below what the guidance is not from where we are today. But that's kind of a guess as far as that 2 to 5 basis points. But hopefully, my explanation of what we would look at and what the -- what would drive the impact, hopefully made some sense for you.

同樣地，影響幅度取決於規模——可能是 2 個基點、5 個基點或類似的程度。所以我會把它視為：如果提前清償維持在較高水準並趨於常態化，我會說利差可能會比指引再低 2 到 5 個基點——不是相對於我們今天的水準，而是相對於指引。這個 2 到 5 個基點某種程度上是猜測。但希望我對我們會看什麼、以及什麼會驅動影響的說明，對你有幫助。

No, that's helpful, Chunk. And remind us, I think last -- sorry, did you have anything else? Just remind us -- Okay. On the rate sensitivity, I know you have the table in the deck, but still not much impact from a 25 basis point rate cut perspective on your guidance?

不，這很有幫助，Chuck。再提醒我們一下，我想上次——抱歉，你還有要補充的嗎？再提醒我們——好的。關於利率敏感度，我知道你們在簡報裡有表格，但從你們的指引來看，降息 25 個基點對你們的影響仍然不大嗎？

Now. I think there's a -- we're pretty well matched on the balance sheet. We do have the repricing, as we mentioned, the commercial loan, fixed rates, the securities and even some time deposits that would reprice lower. We think that puts us in a pretty balanced position.

是的。我認為——我們的資產負債表匹配得相當好。如我們提到的，我們確實有一些會重新定價的項目：商業放款、固定利率項目、證券，甚至部分定期存款也會以較低利率重新定價。我們認為這讓我們處於相當平衡的位置。

Okay. I guess just to go back to my original question, if you were in that position where loan growth ended up being a little bit slower than expected due to payoffs remaining elevated, would that put you in a position to utilize the buyback authorization in the remainder of the year? Or is that something that you're looking at kind of separate from the loan growth conversation?

好的。我想回到我最初的問題：如果你們處於那種情況——因為提前清償維持在高檔，導致放款成長比預期慢一些——這會讓你們在今年剩餘時間更可能動用股票回購授權嗎？還是你們把這件事與放款成長的討論分開看？

Well, I think the loan growth is part of that. I think there's definitely other things to consider when we look at our capital position, where we want it to be relative to certainly the growth. We know that we're a growth company, we need growth to continue to enhance our earnings performance. And certainly, we want to make sure we got enough capital to support the level of growth opportunities that we see, which obviously from our comments this morning, we're very high on. So that's first and foremost.

嗯，我認為放款成長是其中一部分。我想在評估資本部位時，確實還有其他因素要考量，包括我們希望資本水準相對於成長應該落在哪裡。我們知道我們是一家成長型公司，我們需要成長持續，才能提升我們的獲利表現。而且我們當然要確保有足夠的資本，來支持我們所看到的成長機會水準——從我們今天早上的評論也很明顯，我們對此非常看好。所以這是首要之務。

Clearly, we would look at our stock price. The bigger the discount to what we think is appropriate. We will get a bigger appetite. We're also looking at the proposed change in risk-based capital calculations. I'm sure everybody is going through and trying to figure out what that impact would be on the capital calculations.

很明顯地，我們也會看股價。相對於我們認為合理的價值，折價越大，我們的意願就會越高。我們也在關注風險加權資本計算方式的擬議變更。我相信大家都在逐一檢視並試著弄清楚，這會對資本計算造成什麼影響。

We're also a little bit -- kind of looking to maybe understand how the investing community and the regulators are going to look at that. Clearly, the proposed changes provide for higher capital ratios. Does that just set the new bar? Or do we really get the, spend that and use that?

我們也有點——算是在觀察，想了解投資社群以及監管機構會如何看待這件事。很明顯，所提議的變更會帶來更高的資本比率。那是否只是把門檻提高到新的水準？還是我們真的可以把它花掉並加以運用？

Our initial calculations under a proposal put all those caveats out there. We're looking at about a -- I'm going to put a number out there, but obviously, it's going to be a ranger owned it. Our CET1 ratio would increase by about 75 basis points in our total risk-based capital ratio by as much as 1%. So we're looking at some meaningful increases there. Clearly, that would have an impact on how we think about buying back stock. And then just all the other normal things. There's a lot going on in the world.

我們在該提案下的初步計算——先把所有但書都放在這裡。我們看到大約——我會先拋出一個數字，但顯然這會有一個區間。我們的 CET1 比率將提高約 75 個基點，而我們的總風險基礎資本比率最多可提高 1%。所以我們看到的是一些相當有意義的提升。很明顯，這會影響我們如何思考回購股票。然後還有其他所有一般性的事項。世界上正在發生很多事情。

The American United States economy has been incredibly resilient. It usually is, but there's a lot going on. The level of uncertainty is still very, very strong and evident that's out there. So this company has always been pretty cautious when it comes to managing its capital position. But we certainly do understand and appreciate the benefits that could present itself with stock buybacks.

美國經濟一直非常有韌性。通常都是如此，但現在有很多事情在發生。不確定性的程度仍然非常、非常高，而且顯而易見地存在。因此，這家公司在管理資本部位方面一向相當謹慎。但我們當然也理解並重視股票回購可能帶來的好處。

So it's always on the table. We regularly talk to our Board about that. Obviously, we haven't bought back any in quite a while now, but it's something that's toys on the stope top.

所以這一直都在考量範圍內。我們也會定期和董事會討論這件事。顯然，我們已經有一段時間沒有回購了，但這仍然是放在檯面上的議題。

(Operator Instructions)

（接線員指示）

Matthew Breese, Stephens Inc.

Matthew Breese，Stephens Inc.

I just first wanted to start with securities. Maybe help me walk through the anticipated maturities and cash flows of securities for the balance of the year. And what are some of the roll off versus roll on dynamics of securities?

我想先從證券開始。能否協助我梳理一下今年剩餘期間證券預期到期與現金流的情況？以及證券到期退出（roll off）與新增投入（roll on）的動態是什麼？

Yes, I'm looking at the deck trying to remember if we have that in there. I thought we do. Yes, we do have that on slide 17, and we start talking a little bit about the portfolio there. So most of the benefit there is in our agency portfolio. And so we're looking at, I think, another $50 million this year.

好的，我正在看簡報，想確認我們是否有放在裡面。我以為有。是的，我們在第 17 頁有提到，並在那裡開始談一些投資組合的內容。所以那裡的大部分效益來自我們的機構（agency）投資組合。因此我們預期今年還有，我想，大約 5,000 萬美元。

That's got our average rate of, I think, just under 1% that does in the dollar amounts, but also the average rate do increase over time. But if you look at where rates are today, the types of bonds that we buy today, which I would say give us a yield of, call it, around 3.5%.

那部分的平均利率我記得略低於 1%，這會反映在金額上，但平均利率也會隨時間上升。不過如果看今天的利率水準、以及我們今天會買的債券類型，我會說其殖利率大概在 3.5% 左右。

I'm not sure if you look at on an annual basis if we had -- maybe if we go way out. But I would say certainly within the next five years, if not the next seven years, we don't have a year where the average yield is higher than 3.5%. Now that yield -- that average yield does increase over time. Like I said, it's a little under 1% for the rest of the year. I think it's like 1.5% or so next year and then it continues to increase.

我不確定如果你用年度基礎來看——也許要拉得很長。但我會說，至少在未來五年、甚至未來七年內，我們沒有任何一年平均殖利率會高於 3.5%。不過那個殖利率——平均殖利率確實會隨時間上升。如我所說，今年剩餘期間大概略低於 1%。我想明年大概是 1.5% 左右，之後會持續上升。

The dollars, we continue to be very diligent with a laddered approach. If you look at our mature -- not this year, but if you lay out the next five years, we have about $100 million a year maturing and then it slides off a little bit over that over the next four or five years. But so we have lots -- I'm being somebody base because I don't have exactly the numbers in front of me, but there is some solid repricing opportunities in that portfolio, along with the commercial loans that we talked about earlier.

在金額方面，我們持續以階梯式（laddered）的方式非常謹慎地管理。如果你看我們的到期——不是今年，但如果把未來五年攤開來看，我們每年大約有 1 億美元到期，之後在接下來四到五年會稍微下降一些。不過我們有很多——我現在只能給個大概，因為手邊沒有精確數字——但該投資組合確實有一些扎實的重新定價機會，另外也包括我們先前提到的商業貸款。

So it's give or take $50 million for the year?

所以今年大概是 5,000 萬美元上下？

There's $50 million maturing this year yet, but there's $100 million maturing every year for the next five.

今年還有 5,000 萬美元會到期，但接下來五年每年都有 1 億美元到期。

Got it. Okay. And then I guess back to Nate's question on cash liquidity. The first part of my question is just around seasonality. Is there anything -- I guess, it will be determined by the deposit side of the balance sheet.

了解。好。那接著回到 Nate 關於現金流動性的問題。我問題的第一部分是關於季節性。是否有任何——我想這會取決於資產負債表的存款端。

But anything seasonal in the second quarter that draws down cash a little bit more than usual?

但第二季是否有任何季節性因素，會讓現金比平常多下降一些？

And then secondly, I think you had said we should anticipate running north of $200 million in cash by the end of the year. So is it -- we're standing at like $580 million in total cash right now, that's going to come down by a few hundred million by the end of the year. Is that the right message?

第二點，我想你提到我們到年底應該會維持在 2 億美元以上的現金水位。所以——我們目前總現金大約是 5.8 億美元，到年底會下降幾億美元。這樣理解對嗎？

Yes. So I think from a seasonality standpoint, we talked about what happens in the first quarter, which we were able to overcome and then some. We do see some declines here in April as the final tax payments are being made. So April is usually a south a down month, not as dramatic as the first quarter, but there generally is some decline here in April. But there are really no other seasonality for the second quarter.

是的。就季節性而言，我們談過第一季會發生什麼事，我們不但克服了，還超出一些。我們確實會在四月看到一些下降，因為最後一批稅款會在那時繳納。所以四月通常是偏弱、偏下滑的月份，沒有第一季那麼劇烈，但一般而言四月會有一些下滑。不過第二季沒有其他真正的季節性因素。

We will see seasonality in the third quarter with our public units as they start collecting their summer taxes. And -- but I would say that when we think about seasonality here, it's the first part of the first quarter, first part of the second quarter, and throughout the third quarter.

第三季我們會看到季節性，因為我們的公共單位（public units）開始收取夏季稅款。——但我會說，當我們談季節性時，主要是在第一季的前段、第二季的前段，以及整個第三季。

But yes, I think where the cash ends up at the Federal Reserve is anybody's guess. Again, it's going to be driven by both sides of the balance sheet, right? What continued deposit growth we get but certainly more so on the commercial lending side, residential mortgage side, trying to grow that portfolio or at least hold it steady, I should say, going forward and the growth in the securities book, as we keep that ratio at 16%. So that's all going to work out to whatever we keep at the Fed at the end of the day.

不過是的，我認為年底在聯準會（Federal Reserve）那邊會留下多少現金，誰也說不準。再說一次，這會由資產負債表兩端共同驅動，對吧？我們能持續獲得多少存款成長，但更重要的是商業放款端、住宅房貸端——我們會努力讓該投資組合成長，或至少我應該說，未來要把它維持穩定——以及證券簿的成長，因為我們會把那個比率維持在 16%。所以最後在聯準會保留多少現金，就會取決於這些因素如何發展。

Got it. Okay. Last one for me. I think you had mentioned that incremental loan yields are in the high 6s, low 7s. Would love some color just on competitive conditions, both sides of balance sheet lending and deposits.

了解。好。最後一題。我想你提到新增放款殖利率大概在 6% 高段到 7% 低段。很希望你能談談競爭狀況，資產負債表兩端——放款與存款——各自的情況。

And if anything is changing spread-wise?

以及利差方面是否有任何變化？

Okay. I'll take deposits and let Ray chime in on the loan side. We have -- deposit rates have been very, very quiet. I would say, all year. Obviously, we battled the credit unions, and we won't get on that setback this morning.

好。我先談存款，貸款端讓 Ray 補充。我們——存款利率一直非常、非常平靜。我會說，今年以來都是如此。顯然，我們也和信用合作社競爭，但我們今天早上就不在這裡展開那個話題了。

But I think from a banking standpoint, rates have been very consistent. We don't see a lot of specials going on right now. And I would say everybody is, in my opinion, kind of everybody is behaving what they're offering out there makes sense from what they're getting on the asset side. And the stability is relatively easy to work through.

但我認為就銀行業而言，利率一直很一致。我們目前沒有看到很多特別優惠（specials）。而且我會說，在我看來，大家的行為都算理性——他們在市場上提供的利率，與他們在資產端能取得的報酬是相符的。這種穩定性也相對容易因應。

And on the loan side, we have target spreads that we like to achieve relative to risk levels. And as we look across that continuum, there I'd say the competitive pressure there really hasn't changed for some time. It's been the normal level of competition that we've come to know and love in the banking industry.

至於貸款端，我們有一套相對於風險水準、希望達成的目標利差。當我們沿著那個光譜來看，我會說競爭壓力其實已經有一段時間沒有改變了。就是我們在銀行業一直熟悉的、正常水準的競爭。

This concludes our question-and-answer session. I would like to turn the conference back over to Ray Reitsma for closing remarks.

問答環節到此結束。我想把電話會議交回給 Ray Reitsma 作結語。

Thank you for your participation in today's call and for your interest in Mercantile Bank Corporation. The call has now concluded. Thank you.

感謝各位參與今天的電話會議，並關注 Mercantile Bank Corporation。本次會議到此結束。謝謝。

This concludes our conference. Thank you for attending today's presentation.

本次電話會議到此結束。感謝各位出席今天的簡報。