THE CORPORATE LIBRARY

Related Party Transactions and Outside Related Director Information

Mercantile Bank Corp. (MBWM)

3/15/2006 Proxy Information

The Bank has had, and expects in the future to have, loan and other financial transactions in the ordinary course of business with Mercantile's directors, executive officers, and principal shareholders (and their associates) on substantially the same terms as those prevailing for comparable transactions with others. All such transactions (i) were made in the ordinary course of business, (ii) were made on substantially the same terms, including interest rates and collateral on loans, as those prevailing at the time for comparable transactions with other persons, and (iii) in the opinion of management did not involve more than the normal risk of collectibility or present other unfavorable features.

As of December 31, 2005, the Bank had outstanding 63 loans to the directors or executive officers of Mercantile, or their associates, totaling approximately $8.9 million in aggregate amount, under commitments totaling approximately $14.0 million.

Mercantile Bank Real Estate Co., L.L.C., a subsidiary of the Bank, contracted with Visser Brothers Inc. in November, 2003 to be the general contractor for the construction of the Bank's new main office in the City of Grand Rapids. This project was awarded after being submitted for competitive bids. Construction began in November, 2003 and was completed in June of 2005. The contracted amount for this project, including change orders, was $7,928,042. Dale J. Visser is a member of the Board of Directors of Mercantile and the Bank, and Chairman and one of the owners of Visser Brothers Inc.

In 2005, the Bank also utilized the services of Visser Development for the identification of leaseable office locations in Lansing and Ann Arbor for the expansion of the Bank into these markets. As a result of leases secured on premises in Lansing and Ann Arbor, Visser Development earned commissions of $6,721 and $22,500 respectively for these transactions. These commissions were directly paid by the property owners. Dale J. Visser is also one of the owners of Visser Development.

The Bank purchased in 2005 approximately $171,000 in office furniture either directly from The American Seating Company or through a distributor. The furniture was purchased for use in various Mercantile locations. Edward J. Clark is a member of the Board of Directors of Mercantile and the Bank, and Chairman, Chief Executive Officer, and the majority shareholder of The American Seating Company.

During 2005, Susan Johnson, the spouse of Mr. Johnson, Mercantile's Chairman and Chief Executive Officer, and Chairman of the Bank, provided marketing and related services to the Bank, and received payments from the Bank for these services of $67,545. Mrs. Johnson is also providing marketing and related services to the Bank in 2006; the amount of which, though expected to be less than in 2005, has not been determined.

The Bank has a number of relationships with affiliates of JPMorgan Chase & Co. ("JPMorgan"). JPMorgan reported this year that it and several of its wholly owned subsidiaries beneficially own in aggregate more than 5% of Mercantile's outstanding common stock. JPMorgan Chase Bank, N.A., a wholly owned subsidiary of JPMorgan, including banks acquired by it, have since 1997 been the Bank's primary correspondent bank. The Bank obtains check clearing, wire transfer, securities safekeeping, and many other services from JPMorgan Chase Bank. During 2005, the Bank's correspondent bank checking account with JPMorgan Chase Bank had balances ranging from approximately $4.3 million to $61.2 million. During 2005, the Bank had an unsecured federal funds purchase line of credit with JPMorgan Chase Bank of $50 million. In 2005, the Bank paid JPMorgan Chase Bank approximately $124,000 for correspondent banking services, and approximately $197,000 in interest under the federal funds purchase line of credit. For 2005, the Bank received from JPMorgan Chase Bank approximately $266,000 in interest for federal funds purchased from the Bank. During 2005, the Bank purchased from JPMorgan Securities, Inc., a wholly owned subsidiary of JPMorgan, approximately $14.7 million of securities for the Bank's own account. The Bank expects to continue its relationships with JPMorgan and its subsidiaries in 2006, and to have transactions with them in 2006 that are similar in nature and size to those that occurred in 2005, though varying with the needs and best interests of the Bank.

3/15/2005 Proxy Information

The Bank has had, and expects in the future to have, loan and other financial transactions in the ordinary course of business with Mercantile's directors, executive officers, and principal shareholders (and their associates) on substantially the same terms as those prevailing for comparable transactions with others. All such transactions (i) were made in the ordinary course of business, (ii) were made on substantially the same terms, including interest rates and collateral on loans, as those prevailing at the time for comparable transactions with other persons, and (iii) in the opinion of management did not involve more than the normal risk of collectibility or present other unfavorable features.

As of December 31, 2004, the Bank had outstanding 65 loans to the directors or executive officers of Mercantile, or their associates, totaling approximately $10.2 million in aggregate amount, under commitments totaling approximately $14.2 million.

Mercantile Bank Real Estate Co., L.L.C., a subsidiary of the Bank, contracted with Visser Brothers Inc. in November, 2003 to be the general contractor for the construction of the Bank's new main office in the City of Grand Rapids. This project was awarded after being submitted for competitive bids. Construction began in November, 2003 and the current completion date is projected to be in the second quarter of 2005. The contracted amount for this project, including change orders, is $7,685,371. Dale J. Visser is a member of the Board of Directors of Mercantile and the Bank, and Chairman and one of the owners of Visser Brothers Inc.

The Bank has a number of relationships with affiliates of JPMorgan Chase & Co. ("JPMorgan"). JPMorgan reported this year that it and several of its wholly owned subsidiaries beneficially own in aggregate more than 5% of Mercantile's outstanding common stock. JPMorgan Chase Bank, N.A., a wholly owned subsidiary of JPMorgan, including banks acquired by it, have since 1997 been the Bank's primary correspondent bank. The Bank obtains check clearing, wire transfer, securities safekeeping, and many other services from JPMorgan Chase Bank. During 2004, the Bank's correspondent bank checking account with JPMorgan Chase Bank had balances ranging from approximately $2.6 million to $47.5 million. During 2004, the Bank had an unsecured federal funds purchase line of credit with JPMorgan Chase Bank which was increased from $35 million to $50 million in November of 2004, and currently remains in effect. In 2004, the Bank paid JPMorgan Chase Bank approximately $108,000 for correspondent banking services, and approximately $96,000 in interest under the federal funds purchase line of credit. For 2004, the Bank received from JPMorgan Chase Bank approximately $75,000 in interest for federal funds purchased from the Bank. During 2004, the Bank purchased from JPMorgan Securities, Inc., a wholly owned subsidiary of JPMorgan, approximately $19.9 million of securities for the Bank's own account. The Bank expects to continue its relationships with JPMorgan and its subsidiaries in 2005, and to have transactions with them in 2005 that are similar in nature and size to those that occurred in 2004, though varying with the needs and best interests of the Bank.