Mercantile Bank (MBWM) AI Stock Analysis

• Market Cap: $792.36M
• Dividend Yield: 3.05%
• Average Volume (3M): 62.10K
• Price to Earnings (P/E): 9.5
• Beta (1Y): 0.90
• Revenue Growth: 5.64%
• EPS Growth: 6.24%
• Country: US
• Employees: 662
• Sector: Financial
• Sector Strength: 70
• Industry: Banks - Regional
• EPS (TTM): 1.46
• Shares Outstanding: 16,253,600
• 10 Day Avg. Volume: 75,592
• 30 Day Avg. Volume: 62,105
• PEG Ratio: -2.31
• Price to Book (P/B): 1.23
• Price to Sales (P/S): 1.98
• P/FCF Ratio: 7.75
• Enterprise Value/Market Cap: 1.76
• Enterprise Value/Revenue: 3.80
• Enterprise Value/Gross Profit: 6.12
• Enterprise Value/Ebitda: 13.21
• 1Y Price Target: $55.17
• Price Target Upside: 9.86% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 3
• EPS Forecast (FY): N/A
• Revenue Forecast (FY): N/A

• Rating: 74 Outperform
• Price Target: $53.00 ▲(5.54% Upside)

The score is driven primarily by solid core profitability and a compelling valuation (low P/E and ~3.15% yield). Earnings-call details and the completed acquisition add support via stable margin and strong asset quality, while weaker cash-flow conversion and only mixed technical momentum temper the overall rating.

Positive Factors

Merger with Eastern Michigan Financial

The merger expands Mercantile's market presence and service offerings, enhancing its competitive position and long-term growth potential.

Revenue Growth

Consistent deposit growth indicates strong customer trust and supports Mercantile's ability to fund loans, driving future revenue expansion.

Asset Quality

Strong asset quality reflects effective risk management, ensuring financial stability and reducing potential losses from non-performing assets.

Negative Factors

Loan Contraction

Loan contraction may indicate challenges in maintaining loan growth, potentially impacting future interest income and revenue streams.

Higher Non-Interest Expenses

Rising non-interest expenses can pressure profit margins, reducing operational efficiency and potentially affecting long-term profitability.

Cash Flow Management

Declining free cash flow growth suggests challenges in converting income into cash, which may limit investment and growth opportunities.

Mercantile Bank Business Overview & Revenue Model

Company Description

Mercantile 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 Money

Mercantile Bank generates revenue primarily through net interest income, which is the difference between the interest earned on loans and the interest paid on deposits. Key revenue streams include commercial loans, consumer loans, and mortgage loans, which comprise a significant portion of the bank's loan portfolio. Additionally, the bank earns non-interest income through fees for services such as account maintenance, overdraft fees, and transaction fees from treasury management services. Partnerships with local businesses and community organizations enhance MBWM's reach and customer base, contributing to its overall profitability. The bank's prudent risk management practices and focus on community-oriented lending further bolster its financial performance.

Mercantile Bank Financial Statement Overview

Summary

Mercantile Bank demonstrates solid financial performance with consistent revenue growth and profitability. The balance sheet shows a balanced approach to leveraging, though the low equity ratio warrants caution. Cash flow management appears to be an area for improvement, particularly in enhancing cash conversion efficiency.

Income Statement

Mercantile Bank shows a consistent revenue growth trajectory with a TTM revenue growth rate of 1.34% and a strong gross profit margin of 62.03%. The net profit margin is healthy at 22.11%, indicating efficient cost management. However, there is a slight decline in EBIT and EBITDA margins over the years, suggesting potential pressure on operational efficiency.

Balance Sheet

The bank maintains a moderate debt-to-equity ratio of 1.17, which is typical for the industry but indicates a reliance on debt financing. The return on equity is solid at 13.52%, reflecting effective use of equity capital. However, the equity ratio is relatively low, which could pose risks in economic downturns.

Cash Flow

Cash flow analysis reveals a decline in free cash flow growth, with a negative rate of -37.34% in the TTM period. The operating cash flow to net income ratio is low at 0.81%, indicating potential challenges in converting income into cash. Despite this, the free cash flow to net income ratio remains robust at 75.36%, suggesting good cash generation relative to profits.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	368.20M	361.89M	303.50M	213.92M	198.66M	193.49M
Gross Profit	228.38M	224.07M	217.99M	183.77M	183.52M	153.37M
EBITDA	105.88M	108.79M	114.19M	88.73M	87.39M	64.27M
Net Income	81.40M	79.59M	82.22M	61.06M	59.02M	44.14M
Balance Sheet
Total Assets	6.18B	6.05B	5.35B	4.87B	5.26B	4.44B
Cash, Cash Equivalents and Short-Term Investments	867.19M	1.12B	747.63M	699.71M	1.57B	1.01B
Total Debt	739.16M	648.25M	836.26M	640.19M	693.35M	559.93M
Total Liabilities	5.55B	5.47B	4.83B	4.43B	4.80B	4.00B
Stockholders Equity	631.52M	584.53M	522.14M	441.41M	456.56M	441.55M
Cash Flow
Free Cash Flow	30.89M	92.59M	59.93M	116.84M	58.97M	28.89M
Operating Cash Flow	40.99M	101.12M	66.61M	119.86M	64.57M	37.88M
Investing Cash Flow	-434.12M	-425.44M	-395.93M	-555.00M	-495.51M	-398.81M
Financing Cash Flow	491.57M	586.79M	363.08M	-443.25M	780.09M	753.20M

Mercantile Bank Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 50.22
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Positive
• RSI: Neutral
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For MBWM, the sentiment is Positive. The current price of 50.22 is above the 20-day moving average (MA) of 48.86, above the 50-day MA of 46.54, and above the 200-day MA of 45.08, indicating a neutral trend. The MACD of 0.47 indicates Positive momentum. The RSI at 57.27 is Neutral, neither overbought nor oversold. The STOCH value of 64.39 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for MBWM.

Mercantile Bank Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
TRST	78 Outperform	$755.20M	14.08	8.35%	3.48%	5.75%	20.52%
HAFC	77 Outperform	$825.87M	11.63	9.49%	3.82%	3.34%	15.52%
CCBG	76 Outperform	$727.99M	12.12	11.90%	2.33%	9.43%	17.64%
MBWM	74 Outperform	$792.36M	9.52	13.79%	3.05%	5.64%	6.24%
MCBS	74 Outperform	$760.80M	10.46	15.62%	3.55%	-0.23%	10.95%
CCNE	69 Neutral	$762.55M	13.37	6.51%	2.68%	11.13%	-15.28%
Sector *	68 Neutral	$18.00B	11.42	9.92%	3.81%	9.73%	1.22%

Mercantile Bank Corporate Events

Mercantile Bank Completes Eastern Michigan Financial Acquisition

On December 24, 2025, Mercantile Bank Corporation entered into a $30 million term loan agreement with U.S. Bank National Association to help fund the purchase price and related expenses of its merger with Eastern Michigan Financial Corporation and for working capital, with the facility maturing on December 24, 2028 and subject to customary covenants on asset quality, capital ratios, and profitability that allow continued dividends and share repurchases so long as the bank remains well-capitalized and in compliance. On December 31, 2025, Mercantile completed the acquisition of Eastern Michigan Financial Corporation and its subsidiary Eastern Michigan Bank, appointed long-time Michigan finance executive and community leader Steve Schweihofer as an independent director and audit committee member, and outlined plans to operate Eastern Michigan Bank alongside Mercantile Bank until a planned consolidation in the first quarter of 2027, a combination that expands Mercantile’s presence in eastern Michigan and strengthens its position in the state’s banking market while providing Eastern shareholders with a mix of cash and stock consideration.

The most recent analyst rating on (MBWM) stock is a Buy with a $56.00 price target. To see the full list of analyst forecasts on Mercantile Bank stock, see the MBWM Stock Forecast page.

Mercantile Bank shareholders approve Eastern Michigan Financial merger

On December 19, 2025, shareholders of Eastern Michigan Financial Corporation approved a merger agreement under which the company will be acquired by Mercantile Bank Corporation via a subsidiary, Shamrock Merger Sub LLC. The transaction, expected to close on December 31, 2025 subject to customary closing conditions, will expand Mercantile’s footprint by integrating EFIN’s operations, with implications for both organizations’ customers, employees, and regional market presence as they prepare for combined operations.

The most recent analyst rating on (MBWM) stock is a Buy with a $56.00 price target. To see the full list of analyst forecasts on Mercantile Bank stock, see the MBWM Stock Forecast page.

Mercantile Bank Gains Approval for Merger Deal

On December 16, 2025, Mercantile Bank Corporation and Eastern Michigan Financial Corporation announced they had received all necessary regulatory approvals for their merger, initially agreed upon in July 2025. The merger, which is pending Eastern shareholder approval, is expected to close on December 31, 2025, positioning Mercantile as a two-bank holding company until the projected consolidation of Eastern Michigan Bank into Mercantile Bank by 2027. This strategic combination aims to enhance service offerings and create value for stakeholders, with leaders from both companies expressing optimism about the merger’s opportunities.

The most recent analyst rating on (MBWM) stock is a Buy with a $53.00 price target. To see the full list of analyst forecasts on Mercantile Bank stock, see the MBWM Stock Forecast page.

Mercantile Bank Reports Strong Q3 2025 Financial Results

On October 21, 2025, Mercantile Bank Corporation announced strong financial results for the third quarter of 2025, reporting a net income of $23.8 million, an increase from $19.6 million in the same period of 2024. The company’s performance was highlighted by growth in net interest income, a stable net interest margin, and significant local deposit growth, which contributed to a reduction in the loan-to-deposit ratio. Additionally, the company benefited from a decrease in federal income tax expense due to the acquisition of transferable energy tax credits. These results underscore Mercantile’s strategic focus on enhancing financial stability and operational efficiency amid uncertain macroeconomic conditions.

The most recent analyst rating on (MBWM) stock is a Buy with a $47.00 price target. To see the full list of analyst forecasts on Mercantile Bank stock, see the MBWM Stock Forecast page.