Mercantile Bank (MBWM) AI Stock Analysis

• Market Cap: $776.21M
• Dividend Yield: 3.1%
• Average Volume (3M): 65.33K
• Price to Earnings (P/E): 10.0
• Beta (1Y): 0.96
• Revenue Growth: 12.26%
• EPS Growth: -6.93%
• Country: US
• Employees: 662
• Sector: Financial
• Sector Strength: 81
• Industry: Banks - Regional
• EPS (TTM): 1.21
• Shares Outstanding: 16,235,209
• 10 Day Avg. Volume: 80,373
• 30 Day Avg. Volume: 65,331
• PEG Ratio: 2.01
• Price to Book (P/B): 1.20
• Price to Sales (P/S): 0.00
• P/FCF Ratio: 4.54
• Enterprise Value/Market Cap: 1.13
• Enterprise Value/Revenue: 0.71
• Enterprise Value/Gross Profit: 3.06
• Enterprise Value/Ebitda: 2.02
• 1Y Price Target: $50.25
• Price Target Upside: 2.61% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 2

• Rating: 73 Outperform
• Price Target: $55.00 ▲(12.31%Upside)

Mercantile Bank's overall stock score is driven primarily by its solid financial performance and reasonable valuation. The technical indicators suggest a strong upward trend, although caution is advised due to overbought signals. The earnings call highlights both achievements and challenges, reflecting a balanced outlook. The company's strategic initiatives and governance support provide additional confidence in its future prospects.

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 Corporation generates revenue through a variety of financial services and products. Its primary revenue streams are derived from interest income on loans and investments, as well as non-interest income from fees and service charges. The bank's commercial lending activities, which include loans for real estate, construction, and business operations, are a significant contributor to its interest income. Additionally, the bank earns interest from its investment portfolio, which consists of government and agency securities. Non-interest income is generated through service charges on deposit accounts, mortgage banking income, and fees for treasury management services. Strategic partnerships and customer relationships in its regional market also play a vital role in driving its earnings and growth.

Mercantile Bank Financial Statement Overview

Summary

Mercantile Bank exhibits strong revenue growth and operational efficiency, as evidenced by improvements in EBIT and ROE metrics. The balance sheet reflects reduced leverage and a solid equity base, enhancing financial stability. However, the cash flow analysis reveals potential liquidity challenges that may require strategic attention.

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.

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.

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.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	287.75M	321.50M	217.99M	190.32M	179.22M	167.42M
Gross Profit	287.74M	321.50M	217.99M	190.32M	179.22M	167.42M
EBITDA	103.08M	0.00	114.19M	88.73M	87.39M	64.27M
Net Income	77.57M	79.59M	82.22M	61.06M	59.02M	44.14M
Balance Sheet
Total Assets	6.14B	6.05B	5.35B	4.87B	5.26B	4.44B
Cash, Cash Equivalents and Short-Term Investments	857.90M	60.22M	130.53M	699.71M	1.57B	1.01B
Total Debt	506.12M	526.73M	606.52M	445.85M	495.89M	441.56M
Total Liabilities	5.53B	5.48B	4.83B	4.43B	4.80B	4.00B
Stockholders Equity	608.35M	584.53M	522.14M	441.41M	456.56M	441.55M
Cash Flow
Free Cash Flow	62.74M	92.59M	59.93M	116.84M	58.97M	28.89M
Operating Cash Flow	69.81M	101.12M	66.61M	119.86M	64.57M	37.88M
Investing Cash Flow	-421.20M	-425.44M	-395.93M	-555.00M	-495.51M	-398.81M
Financing Cash Flow	584.62M	586.79M	363.08M	-443.25M	780.09M	753.20M

Mercantile Bank Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 48.97
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Negative
• RSI: Negative
• STOCH: Negative

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 48.97 is above the 20-day moving average (MA) of 44.68, above the 50-day MA of 43.93, and above the 200-day MA of 44.63, indicating a bullish trend. The MACD of 0.73 indicates Negative momentum. The RSI at 71.29 is Negative, neither overbought nor oversold. The STOCH value of 89.72 is Negative, 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
ESQ	79 Outperform	$824.91M	18.47	19.66%	0.74%	16.18%	13.78%
HAFC	75 Outperform	$769.80M	11.94	8.82%	4.24%	5.20%	-11.06%
BFST	75 Outperform	$754.25M	10.43	9.77%	2.27%	18.39%	-4.12%
MBWM	73 Outperform	$776.21M	9.95	13.55%	3.10%	12.26%	-6.93%
CPF	71 Outperform	$776.91M	13.45	10.94%	3.75%	4.38%	4.94%
MCBS	70 Outperform	$747.06M	11.40	16.05%	3.13%	10.06%	30.39%
Sector *	61 Neutral	C$14.62B	6.19	20.17%	5.67%	26.93%	-38.21%

Mercantile Bank Corporate Events

Mercantile Bank Shareholders Approve Key Governance Matters

At the annual meeting held on May 22, 2025, Mercantile Bank‘s shareholders voted on several key matters, including the election of eleven directors for a one-year term, the implementation of an Employee Stock Purchase Plan (ESPP) with a 5% discount, the ratification of Plante & Moran, PLLC as the independent registered public accounting firm for 2025, and advisory votes on executive compensation and its frequency. The votes resulted in the approval of all proposed matters, reflecting shareholder support for the company’s governance and strategic initiatives.

The most recent analyst rating on (MBWM) stock is a Buy with a $51.00 price target. To see the full list of analyst forecasts on Mercantile Bank stock, see the MBWM Stock Forecast page.

Mercantile Bank Reports Strong Q1 2025 Financial Results

Mercantile Bank Corporation reported strong financial results for the first quarter of 2025, with net income of $19.5 million, despite a slight decline from the previous year. The company experienced growth in net interest income and noninterest income categories such as treasury management and mortgage banking, while maintaining low levels of nonperforming assets and a solid capital position. The bank’s strategic initiatives to enhance deposit relationships and reduce the loan-to-deposit ratio contributed to its robust performance. The company also managed to offset the impact of a lower net interest margin through growth in earning assets, reflecting its ability to navigate economic uncertainties effectively.