Note 16 - Hedging Activities	12 Months Ended
Dec. 31, 2018
Notes to Financial Statements
Derivative Instruments and Hedging Activities Disclosure [Text Block]	NOTE 16 – HEDGING ACTIVITIES Our interest rate risk policy includes guidelines for measuring and monitoring interest rate risk. Within these guidelines, parameters have been established for maximum fluctuations in net interest income. Possible fluctuations are measured and monitored using net interest income simulation. Our policy provides for the use of certain derivative instruments and hedging activities to aid in managing interest rate risk to within policy parameters. In February 2012, we entered into an interest rate swap agreement with a correspondent bank to hedge the floating rate on the subordinated debentures issued to Mercantile Bank Capital Trust I, which became effective in January 2013 and matured in January 2018. The $32.0 million of subordinated debentures have a rate equal to the 90 -Day Libor Rate plus a fixed spread of 218 basis points, and are subject to repricing quarterly. The interest rate swap agreement provided for us to pay our correspondent bank a fixed rate, while our correspondent bank paid us the 90 -Day Libor Rate on a $32.0 million notional amount. The quarterly re-set dates for the floating rate on the interest rate swap agreement were the same as the re-set dates for the floating rate on the subordinated debentures. The interest rate swap agreement was accounted for under hedge accounting guidelines; therefore, fluctuations in the fair value of the interest rate swap agreement, net of tax effect, were recorded in other comprehensive income. Effective January 26, 2016, the notional amount of the interest rate swap agreement was reduced from $32.0 million down to $21.0 million, reflecting the $11.0 million repurchase of the associated trust preferred securities on that date. We recorded interest expense of approximately $0.2 million in January 2016 as part of the transaction, in large part reflecting the market value of the interest rate swap on that date of the $11.0 million portion.

NOTE

– HEDGING ACTIVITIES

Our interest rate risk policy includes guidelines for measuring and monitoring interest rate risk. Within these guidelines, parameters have been established for maximum fluctuations in net interest income. Possible fluctuations are measured and monitored using net interest income simulation. Our policy provides for the use of certain derivative instruments and hedging activities to aid in managing interest rate risk to within policy parameters.

February 2012,

we entered into an interest rate swap agreement with a correspondent bank to hedge the floating rate on the subordinated debentures issued to Mercantile Bank Capital Trust I, which became effective in

January 2013

and matured in

January 2018.

The

$32.0

million of subordinated debentures have a rate equal to the

-Day Libor Rate plus a fixed spread of

218

basis points, and are subject to repricing quarterly. The interest rate swap agreement provided for us to pay our correspondent bank a fixed rate, while our correspondent bank paid us the

-Day Libor Rate on a

$32.0

million notional amount. The quarterly re-set dates for the floating rate on the interest rate swap agreement were the same as the re-set dates for the floating rate on the subordinated debentures. The interest rate swap agreement was accounted for under hedge accounting guidelines; therefore, fluctuations in the fair value of the interest rate swap agreement, net of tax effect, were recorded in other comprehensive income. Effective

January 26, 2016,

the notional amount of the interest rate swap agreement was reduced from

$32.0

million down to

$21.0

million, reflecting the

$11.0

million repurchase of the associated trust preferred securities on that date. We recorded interest expense of approximately

$0.2

million in

January 2016

as part of the transaction, in large part reflecting the market value of the interest rate swap on that date of the

$11.0

million portion.