Mercantile Bank (MBWM) AI Stock Analysis

• Market Cap: $777.02M
• Dividend Yield: 3.78%
• Average Volume (3M): 94.28K
• Price to Earnings (P/E): 9.5
• Beta (1Y): 1.00
• Revenue Growth: 8.72%
• EPS Growth: -0.45%
• Country: US
• Employees: 662
• Sector: Financial
• Sector Strength: 76
• Industry: Banks - Regional
• EPS (TTM): 1.39
• Shares Outstanding: 16,235,209
• 10 Day Avg. Volume: 104,363
• 30 Day Avg. Volume: 94,282
• PEG Ratio: -3.85
• Price to Book (P/B): 1.29
• Price to Sales (P/S): 0.00
• P/FCF Ratio: 15.96
• Enterprise Value/Market Cap: 1.47
• Enterprise Value/Revenue: 0.80
• Enterprise Value/Gross Profit: 5.12
• Enterprise Value/Ebitda: 2.60
• 1Y Price Target: $56.00
• Price Target Upside: 17.01% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 3

• Rating: 78 Outperform
• Price Target: $55.00 ▲(14.92%Upside)

Mercantile Bank's stock is well-positioned with strong financial performance, attractive valuation, and a strategic merger that enhances growth prospects. While technical indicators support a positive outlook, potential challenges in earnings and loan growth need monitoring. The balance across these factors results in a robust overall stock score.

Mercantile Bank Business Overview & Revenue Model

Company Description

Mercantile Bank Corporation (MBWM) is a financial holding company primarily engaged in the commercial banking sector. Headquartered in Grand Rapids, Michigan, it operates through its principal subsidiary, Mercantile Bank of Michigan. The bank offers a comprehensive range of financial services to individuals, small to medium-sized businesses, and governmental entities. These services include commercial lending, personal banking, mortgage services, and treasury management solutions.

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 demonstrates solid financial health with consistent revenue growth and strong cash flow generation. The company maintains a good balance between equity and debt, although careful monitoring of debt levels is advisable. Profitability remains strong despite minor fluctuations in margins. The bank is well-positioned for future growth, provided it continues to manage its resources prudently and adapts to evolving market conditions.

Income Statement

Mercantile Bank has shown impressive revenue growth over the past years, with a notable increase from 2022 to TTM 2025. The gross profit margin remains strong, indicating effective cost management. However, the net profit margin has slightly decreased in TTM 2025, reflecting potential cost pressures or increased expenses. Overall, profitability is commendable with stable EBIT and EBITDA margins, although there is a small decline in EBIT performance in the latest period.

Balance Sheet

The company's balance sheet reveals a stable financial structure with a modest debt-to-equity ratio, suggesting a balanced approach to leverage. Stockholders' equity has consistently grown, contributing to a favorable equity ratio. However, the slight increase in total debt in TTM 2025 may indicate a reliance on borrowed funds, which could pose risks if not managed carefully. Overall, the balance sheet reflects a sound financial position with room for improvement in debt management.

Cash Flow

Mercantile Bank's cash flow performance is robust, as illustrated by the positive free cash flow growth from 2024 to TTM 2025. The operating cash flow to net income ratio has decreased, suggesting efficiency in converting income into cash, but still reflects a healthy cash-generating capability. The free cash flow to net income ratio is strong, supporting the company's ability to sustain operations and pursue growth opportunities without relying heavily on external financing.

Breakdown	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	361.89M	303.50M	213.92M	198.66M	193.49M
Gross Profit	224.07M	217.99M	183.77M	183.52M	153.37M
EBITDA	108.79M	114.19M	88.73M	87.39M	64.27M
Net Income	79.59M	82.22M	61.06M	59.02M	44.14M
Balance Sheet
Total Assets	6.05B	5.35B	4.87B	5.26B	4.44B
Cash, Cash Equivalents and Short-Term Investments	1.12B	747.63M	699.71M	1.57B	1.01B
Total Debt	648.25M	836.26M	640.19M	693.35M	559.93M
Total Liabilities	5.48B	4.83B	4.43B	4.80B	4.00B
Stockholders Equity	584.53M	522.14M	441.41M	456.56M	441.55M
Cash Flow
Free Cash Flow	92.59M	59.93M	116.84M	58.97M	28.89M
Operating Cash Flow	101.12M	66.61M	119.86M	64.57M	37.88M
Investing Cash Flow	-425.44M	-395.93M	-555.00M	-495.51M	-398.81M
Financing Cash Flow	586.79M	363.08M	-443.25M	780.09M	753.20M

Mercantile Bank Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 47.86
• 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 47.86 is below the 20-day moving average (MA) of 48.05, above the 50-day MA of 45.82, and above the 200-day MA of 45.06, indicating a neutral trend. The MACD of 0.91 indicates Positive momentum. The RSI at 53.13 is Neutral, neither overbought nor oversold. The STOCH value of 35.25 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
ESQ	79 Outperform	$871.87M	19.52	19.66%	0.63%	16.18%	13.78%
MBWM	78 Outperform	$777.02M	9.51	13.77%	3.78%	8.72%	-0.45%
BFST	78 Outperform	$776.43M	10.73	9.77%	2.14%	18.39%	-4.12%
HAFC	75 Outperform	$783.40M	12.15	8.82%	3.98%	5.20%	-11.06%
MCBS	73 Outperform	$773.22M	11.86	15.67%	3.58%	4.94%	20.77%
CPF	71 Outperform	$768.27M	13.30	10.94%	4.63%	4.38%	4.94%
Sector *	68 Neutral	$16.93B	11.67	9.79%	3.89%	11.83%	-7.56%

Mercantile Bank Corporate Events

Mercantile Bank Announces Merger with Eastern Michigan Financial

On July 22, 2025, Mercantile Bank Corporation announced a merger agreement with Eastern Michigan Financial Corporation, valued at approximately $95.8 million. The merger, expected to close in the fourth quarter of 2025, will initially result in a two-bank holding structure, with plans to consolidate by 2027. This strategic move aims to strengthen Mercantile’s market position and achieve strategic goals such as lowering the loan-to-deposit ratio and expanding its regional presence. Mercantile also reported robust financial results for the second quarter of 2025, with a net income of $22.6 million, reflecting growth in net interest income and noninterest income, despite a declining net interest margin. The bank’s strong performance was supported by commercial loan expansion, improved asset quality metrics, and a reduced federal income tax expense.

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 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.