NASDAQ$MBWM

Mercantile Bank Corporation · Q2 2022 earnings

Q2 2022 earnings · · Investor relations

Briefing

Reported solid operating performance with robust loan growth and sustained strength in asset quality metrics.

Mercantile Bank Corporation reported a net income of $11.7 million, or $0.74 per diluted share, for the second quarter of 2022. The results reflect growth in core commercial and residential mortgage loans, an increase in net interest income, and growth in key fee income revenue streams, which offset a decrease in mortgage banking income.

  • Annualized net core commercial loan growth of approximately 10 percent.
  • Significant increase in residential mortgage loan portfolio.
  • Net interest income expansion reflecting loan growth and improved net interest margin.
  • Sustained low levels of nonperforming assets and loan charge-offs.

Headline financials

Total Revenue

$42.1M

Previous: $45.4M-7.4%
EPS (adj)

$0.74

Previous: $1.12-33.9%
Net interest margin

2.9%

Previous: 2.8%+4.3%
Free Cash Flow

$11.7M

Previous: $18.1M-35.1%
Net Income

$11.7M

Previous: $18.1M-35.1%
Operating Income

$31.8M

Previous: $37.1M-14.1%
Gross Profit

$41.6M

Previous: $45.4M-8.5%
Cash & Equivalents

$479M

Previous: $760M-36.9%
Total Assets

$5.06B

Previous: $4.76B+6.3%
Stock-Based Comp

$797K

Previous: $634K+25.7%

Revenue & EPS history

Mercantile Bank · Revenue · Quarterly

$42.1M

Q2 2022-7.4%vs Q2 2021
Beat estimate in 13 of 16 quarters(81%)
ActualEstimate

Revenue by segment

Mercantile Bank · $14.3M total across 1 segment · Q4 2020

  • Mortgage banking
    $14.3M+95.9%

Forward guidance

Mercantile anticipates that its balance sheet structure will enhance the net interest margin if the FOMC continues to raise the targeted federal funds rate. Mercantile expects strong operating results can be achieved during the remainder of the year and beyond as Mercantile continues its efforts to be a consistent and profitable performer.

Tailwinds

  • Potential to enhance net interest income from likely additional FOMC rate increases.
  • Robust overall financial condition, including solid capital levels.
  • Pristine asset quality metrics.
  • Strong operating performance.
  • Significant loan funding opportunities.

Headwinds

  • Potential negative impacts from a downturn in economic conditions.
  • High levels of inflation.
  • Supply chain disruptions.
  • Tight labor market conditions.
  • Decline in mortgage banking income stemming from changed market conditions.

Historical earnings impact

How earnings announcements have historically affected this stock's price.

Avg. return before/after earnings

Based on 20 quarterly earnings reports · overlaid with Q2 2022

Historical avgQ2 2022

+0.8%

Avg return

Earnings day

+2.0%

Avg return

5 days after

+2.9%

Avg return

30 days after

55%

36 / 66 earnings

Positive

+15.7%

Q2 2023

Best reaction

-12.5%

Q2 2011

Worst reaction

Earnings price reactions
QuarterReport dateReaction (Day 0)+5 days+30 days
Q1 2026-3.7%-5.0%-1.5%
Q4 2025+0.8%+1.8%+6.8%
Q3 2025+0.6%+2.1%-1.2%
Q2 2025-0.0%-0.4%+1.2%
Q1 2025+3.5%+3.9%+10.0%
Q4 2024+9.7%+11.3%+9.6%
Q3 2024+7.0%+4.6%+13.9%
Q2 2024+12.2%+8.7%-2.8%
Q1 2024-5.2%+1.7%+12.7%
Q4 2023+0.4%+3.2%+2.9%
Q3 2023+5.2%+2.1%+17.2%
Q2 2023+15.7%+14.8%+14.6%
Q1 2023-2.2%-2.5%-10.2%
Q4 2022-5.3%-4.9%-1.0%
Q3 2022+2.4%-0.1%+6.7%
Q2 2022+5.0%+4.7%+14.2%
Q1 2022+1.5%-2.7%-12.2%
Q4 2021+3.3%+1.4%-0.3%
Q3 2021+5.9%+5.6%+8.5%
Q2 2021+5.4%+5.8%+6.9%
Q1 2021-2.3%-0.6%-1.7%
Q4 2020-0.2%+2.0%+0.9%
Q3 2020+4.7%+13.5%+12.3%
Q2 2020+4.9%+6.9%+0.4%
Q1 2020-2.8%-0.4%-2.1%
Q4 2019-1.8%-4.0%-7.2%
Q3 2019+5.9%+6.1%+8.2%
Q2 2019-0.1%+0.3%-2.6%
Q1 2019+0.1%-0.9%-1.3%
Q4 2018+6.0%+6.8%+10.0%
Q3 2018-0.3%-3.5%-0.1%
Q2 2018-2.9%-2.3%-4.3%
Q1 2018+2.0%+2.5%+4.2%
Q4 2017-2.7%-2.6%-7.3%
Q3 2017+6.0%+5.2%-0.5%
Q2 2017+0.3%-0.3%-4.5%
Q1 2017+0.5%+2.8%-4.0%
Q4 2016-9.0%-10.5%-9.0%
Q3 2016+3.8%+3.5%+23.8%
Q2 2016-0.0%-0.2%+3.3%
Q1 2016+12.0%
Q4 2015-0.9%
Q3 2015-0.0%
Q2 2015-3.7%
Q1 2015+1.0%
Q4 2014-5.5%
Q3 2014-1.6%
Q2 2014-3.1%
Q1 2014-4.2%
Q4 2013+6.4%
Q3 2013+4.6%
Q2 2013+2.8%
Q1 2013+0.2%
Q1 2010-2.7%
Q4 2012+0.4%
Q3 2012-4.8%
Q2 2012-0.3%
Q1 2011+0.3%
Q1 2012+1.9%
Q4 2009-1.3%
Q4 2011-1.3%
Q4 2010-1.3%
Q3 2011+2.4%
Q3 2010+2.4%
Q2 2010-12.5%
Q2 2011-12.5%

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