Education
About Us
Working with TipRanks
Follow Us
Mercantile Bank Corp. (MBWM)
NASDAQ:MBWM
Top Page
Mercantile Bank
(NASDAQ:MBWM)
73Outperform
Mercantile Bank (MBWM) vs. S&P 500 (SPY)
Market Cap
$653.64M
Dividend Yield3.58%
Average Volume (3M)64.31K
Price to Earnings (P/E)8.2
Beta (1Y)1.01
Revenue Growth19.24%
EPS Growth-3.88%
CountryUS
Employees648
SectorFinancial
Sector Strength76
IndustryBanks - Regional
Share Statistics
EPS (TTM)4.93
Shares Outstanding16,235,384
10 Day Avg. Volume64,170
30 Day Avg. Volume64,306
Financial Highlights & Ratios
PEG RatioN/A
Price to Book (P/B)N/A
Price to Sales (P/S)3.21
Price to Cash Flow (P/CF)3.00
P/FCF Ratio1.30
Enterprise Value/Market CapN/A
Enterprise Value/RevenueN/A
Enterprise Value/Gross ProfitN/A
Enterprise Value/EbitdaN/A
Forecast
1Y Price Target
$55.50Price Target Upside33.19% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering0
Mercantile Bank Business Overview & Revenue Model
Company DescriptionMercantile Bank Corporation operates as the bank holding company for Mercantile Bank of Michigan that provides commercial and retail banking services to small- to medium-sized businesses and individuals in the United States. It accepts various deposit products, including checking, savings, and term certificate accounts; time deposits; and certificates of deposit. The company also offers commercial and industrial loans; vacant land, land development, and residential construction loans; owner and non-owner-occupied real estate loans; multi-family and residential rental property loans; single-family residential real estate loans; home equity line of credit programs; and consumer loans, such as new and used automobile and boat loans, and credit cards, as well as overdraft protection services; and residential mortgage and instalment loans. In addition, it provides courier services and safe deposit facilities; and insurance products, such as private passenger automobile, homeowners, personal inland marine, boat owners, recreational vehicle, dwelling fire, umbrella policies, small business, and life insurance products, as well as owns 22 automated teller machines and 19 video banking machines. As of January 18, 2022, the company operated 44 banking offices. Mercantile Bank Corporation was incorporated in 1997 and is headquartered in Grand Rapids, Michigan.
How the Company Makes MoneyMercantile Bank makes money through a diverse set of revenue streams primarily centered around its banking operations. The company earns interest income from loans and mortgages provided to individuals and businesses. It also generates revenue from fees associated with account maintenance, transactional services, and specialized financial services such as wealth management and treasury solutions. Additionally, Mercantile Bank benefits from partnerships with financial technology providers that enhance its service offerings and customer reach, contributing to its overall earnings. The bank's focus on community engagement and relationship banking helps in maintaining a strong customer base, which is pivotal for its financial performance.
Mercantile Bank Financial Statement Overview
Summary
Mercantile Bank shows strong revenue growth and operational efficiency, with improvements in EBIT and ROE metrics. The balance sheet indicates reduced leverage and a solid equity base, enhancing financial stability. However, cash flow analysis reveals potential liquidity challenges, requiring strategic attention despite overall strong financial health.Income Statement
Mercantile Bank has demonstrated strong revenue growth with a 47.5% increase from 2023 to 2024. The gross profit margin remains at 100%, reflecting stable operations. However, the net profit margin slightly decreased to 24.8%, indicating potential cost pressures or increased expenses. The EBIT margin improved significantly to 99.5%, showcasing operational efficiency. Despite the absence of EBITDA data for 2024, the overall income statement reflects a robust performance with a strong growth trajectory.78
Positive
Balance Sheet
The debt-to-equity ratio decreased to 0.15 in 2024 from the previous year, indicating an improved financial structure with lower leverage. Return on equity is strong at 53.2%, reflecting effective utilization of shareholder funds. The equity ratio improved to 27.9%, highlighting a solid capital base. Despite the improvements, the overall liabilities remain significant, implying ongoing financial obligations that need careful management.72
Positive
Cash Flow
Free cash flow decreased significantly by 66.5% from 2023 to 2024, highlighting potential challenges in cash generation. The operating cash flow to net income ratio is low at 0.25, suggesting limited cash conversion efficiency. However, the free cash flow to net income ratio stands at 0.25, indicating some level of cash generation relative to net income. Overall, the cash flow statement suggests potential liquidity constraints that could impact future operations.65
Positive
| Breakdown | ||||
| Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 |
|---|---|---|---|---|
| Income Statement | Total Revenue | |||
| 321.50M | 217.99M | 190.32M | 179.22M | 167.42M | Gross Profit |
| 321.50M | 217.99M | 190.32M | 179.22M | 167.42M | EBIT |
| 319.90M | 102.70M | 99.39M | 73.72M | 54.85M | EBITDA |
| 0.00 | 114.19M | 88.73M | 87.39M | 64.27M | Net Income Common Stockholders |
| 79.59M | 82.22M | 61.06M | 59.02M | 44.14M |
| Balance Sheet | Cash, Cash Equivalents and Short-Term Investments | |||
| 60.22M | 130.53M | 699.71M | 1.57B | 1.01B | Total Assets |
| 5.35B | 5.35B | 4.87B | 5.26B | 4.44B | Total Debt |
| 224.90M | 606.52M | 445.85M | 495.89M | 441.56M | Net Debt |
| 164.67M | 475.99M | 349.08M | -479.27M | -184.44M | Total Liabilities |
| 3.85B | 4.83B | 4.43B | 4.80B | 4.00B | Stockholders Equity |
| 1.50B | 522.14M | 441.41M | 456.56M | 441.55M |
| Cash Flow | Free Cash Flow | |||
| 20.06M | 59.93M | 116.84M | 58.97M | 28.89M | Operating Cash Flow |
| 20.06M | 66.61M | 119.86M | 64.57M | 37.88M | Investing Cash Flow |
| -425.44M | -395.93M | -555.00M | -495.51M | -398.81M | Financing Cash Flow |
| -21.61M | 363.08M | -443.25M | 780.09M | 753.20M |
Mercantile Bank Technical Analysis
Neutral
41.67
Price Trends
44.43
Negative
45.66
Negative
44.79
Negative
Market Momentum
-1.19
Negative
48.76
Neutral
66.55
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For MBWM, the sentiment is Neutral. The current price of 41.67 is above the 20-day moving average (MA) of 41.38, below the 50-day MA of 44.43, and below the 200-day MA of 44.79, indicating a neutral trend. The MACD of -1.19 indicates Negative momentum. The RSI at 48.76 is Neutral, neither overbought nor oversold. The STOCH value of 66.55 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Neutral sentiment for MBWM.
Mercantile Bank Risk Analysis
Mercantile Bank disclosed 25 risk factors in its most recent earnings report. Mercantile Bank reported the most risks in the “Finance & Corporate” category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks
Mercantile Bank Peers Comparison
Overall Rating
UnderperformOutperform
Sector (63)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
73 Outperform | $667.52M | 15.39 | 20.04% | 0.79% | 17.55% | 5.05% | |
73 Outperform | $653.64M | 8.16 | 14.38% | 3.58% | 19.24% | -3.88% | |
72 Outperform | $680.51M | 10.99 | 8.60% | 4.73% | 8.33% | -21.76% | |
68 Neutral | $698.83M | 10.68 | 16.05% | 3.19% | 8.80% | 30.31% | |
67 Neutral | $685.76M | 12.86 | 10.25% | 4.15% | 6.13% | -9.06% | |
67 Neutral | $687.56M | 10.30 | 9.02% | 2.49% | 18.42% | -12.79% | |
63 Neutral | $12.07B | 9.35 | 8.15% | 79.57% | 12.85% | -5.13% |
* Financial Sector Average
Performance Comparison
MBWM
Mercantile Bank
41.67
5.97
16.72%
CPF
Central Pacific Financial
26.13
6.95
36.24%
HAFC
Hanmi Financial
22.52
8.14
56.61%
ESQ
Esquire Financial Holdings
82.78
36.29
78.06%
BFST
Business First Bancshares
23.25
1.71
7.94%
MCBS
MetroCity Bankshares
28.41
4.79
20.28%
Mercantile Bank Earnings Call Summary
Earnings Call Date: Apr 22, 2025 | % Change Since: 3.50% | Next Earnings Date: Jul 22, 2025
Earnings Call Sentiment Neutral
The earnings call reveals a mixed performance for Mercantile Bank. While there are significant achievements in deposit growth, asset quality, and non-interest income, challenges such as a decline in net income, a lower loan growth outlook, and increased expenses present a balanced outlook. The bank's strategic focus on managing the balance sheet amid uncertain conditions is evident, but the economic environment presents potential headwinds.Highlights
Deposit Growth and Loan-to-Deposit Ratio Improvement
Business deposits increased by 24% and personal deposits by 9% for the twelve-month period ended March 31, 2025. The loan-to-deposit ratio was reduced from 108% at the end of Q1 2024 to 99% at the end of Q1 2025.
Strong Asset Quality
Non-performing assets totaled $5.4 million at March 31, 2025, or nine basis points of total assets. Past due loans in dollars represent three basis points of total loans, with no outstanding ORE.
Increase in Non-Interest Income
Total non-interest income grew 12% in Q1 2025 compared to Q1 2024, with mortgage banking income up 13%, service charges up 20%, and payroll services up 16%.
Net Interest Margin Improvement
Despite a 100 basis point decrease in the federal funds rate, the net interest margin increased by six basis points compared to Q4 2024.
Strong Capital Position
The bank's total risk-based capital ratio was 14.0% at the end of Q1 2025, $217 million above the minimum threshold to be categorized as well-capitalized.
Lowlights
Decline in Net Income
Net income decreased to $19.5 million from $21.6 million in the same period last year, attributed to lower non-interest income, increased non-interest costs, and a higher provision expense.
Lower Loan Growth Outlook
Commercial loan growth is expected to reduce slightly from the recent pace due to decreased commitments and ongoing discussions amid environmental uncertainty.
Interest Margin Pressure
The net interest margin declined 27 basis points compared to the prior year period, due to the impact of lower yielding assets and a higher cost of money market and time deposit products.
Higher Non-Interest Expenses
Non-interest expenses increased by $1.2 million compared to the prior year, reflecting higher salary and benefit costs, and increased data processing costs.
Company Guidance
In the Mercantile Bank Corporation's first-quarter 2025 earnings call, the company presented a detailed overview of its financial performance and strategic initiatives. Key metrics highlighted included a reduction in the loan-to-deposit ratio from 110% at the end of 2023 to 99% by the first quarter of 2025, driven by a strategic three-pronged approach to deposit growth. Despite seasonal patterns, first-quarter deposits increased, reflecting a secular growth trend. Commercial loans grew at an annualized rate of nearly 5%, while mortgage banking income rose by 13% year-over-year. The company maintained strong asset quality, with non-performing assets at $5.4 million or nine basis points of total assets. Total non-interest income increased by 12%, with significant contributions from mortgage banking, service charges, and payroll services. The net interest margin rose by six basis points following a 100 basis point rate cut by the Fed, and the bank achieved a tangible book value growth rate of 8.4% over five years. Net income for the quarter was $19.5 million or $1.21 per diluted share, with average loans totaling $4.63 billion, reflecting strong loan growth despite a lower yield. The bank remains well-capitalized, with a total risk-based capital ratio of 14.0%, and projects 3%-5% loan growth for the remainder of 2025, maintaining a cautious outlook given market volatility.Mercantile Bank Corporate Events
Executive/Board ChangesBusiness Operations and Strategy
Mercantile Bank Adopts New Executive Bonus Plan
Neutral
Mar 20, 2025
On March 20, 2025, Mercantile Bank Corporation’s Board of Directors adopted a new executive officer bonus plan for 2025. The plan outlines cash bonuses for key executives based on performance metrics such as earnings per share and return on assets. The bonus pool is determined by achieving specific targets, with the potential for increased bonuses if performance exceeds these targets. The plan aims to align executive incentives with company performance, impacting the company’s operational focus and stakeholder interests.
Business Operations and Strategy
Mercantile Bank Introduces New Vesting Strategy for 2025
Neutral
Feb 6, 2025
On February 6, 2025, Mercantile Bank Corporation’s Compensation Committee granted restricted stock to its executive officers, continuing a strategy initiated in 2018 of using performance metrics for vesting. However, for the 2025 grants, the Committee introduced a time-based vesting component, where 35% of the shares will vest after three years irrespective of performance. The remaining 65% will vest based on performance goals compared to a new Comparative Index of similar-sized bank holding companies, with metrics including total shareholder return, return on average assets, and earnings per share changes. Executive officers’ potential awards are calculated based on their base salary and the company’s performance relative to these goals, with the possibility of earning between 0% and 150% of the target award.
Glossary
OutperformA stock rated as "Outperform" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock is likely to deliver higher returns compared to the average returns of other stocks in the same sector or market index. Investors might consider this stock a good buying opportunity.
NeutralA stock rated as "Neutral" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly attractive nor unattractive for investment. Investors may consider holding onto the stock, as it is not expected to either significantly outperform or underperform the market.
UnderperformA stock rated as "Underperform" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock may deliver lower returns compared to the average returns of other stocks in the same sector or market index. Investors might consider selling the stock or avoiding it as an investment.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.