NASDAQ$MBWM

Mercantile Bank Corporation · Q2 2023 earnings

Q2 2023 earnings · · Investor relations

Briefing

Reported strong financial results driven by net interest income increase and solid loan growth.

Mercantile Bank Corporation reported a strong second quarter of 2023, with net income increasing to $20.4 million, or $1.27 per diluted share, driven by a significant rise in net interest income and solid loan growth. The company's asset quality remained strong, and its capital position remained well-capitalized.

  • Net interest income increased significantly due to net interest margin expansion and loan growth.
  • Key fee income categories experienced notable increases.
  • Commercial loan growth annualized at approximately 6 percent, with continued residential mortgage loan portfolio expansion.
  • Asset quality remained strong with low levels of nonperforming assets and loan charge-offs.

Headline financials

Total Revenue

$55.2M

Previous: $42.1M+31.2%
EPS (adj)

$1.27

Previous: $0.74+71.6%
Net interest margin

4.0%

Previous: 2.9%+40.6%
Efficiency ratio

50.4%

No prior period
Total risk capital ratio

13.7%

No prior period
Free Cash Flow

$20.4M

Previous: $11.7M+73.4%
Net Income

$20.4M

Previous: $11.7M+73.4%
Operating Income

$30.3M

Previous: $31.8M-4.8%
Gross Profit

$53.2M

Previous: $41.6M+28.0%
Cash & Equivalents

$208M

Previous: $479M-56.6%
Total Assets

$5.14B

Previous: $5.06B+1.6%
Stock-Based Comp

$828K

Previous: $797K+3.9%

Revenue & EPS history

Mercantile Bank · Revenue · Quarterly

$55.2M

Q2 2023+31.2%vs Q2 2022
Beat estimate in 13 of 15 quarters(87%)
ActualEstimate

Revenue by segment

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

  • Mortgage banking
    $14.3M+95.9%

Forward guidance

Mercantile Bank anticipates delivering robust operating results for the remainder of the year and beyond, driven by strong financial performance in the first six months of 2023 and anticipated loan growth.

Tailwinds

  • Sustained financial strength allows for rewarding shareholders with competitive dividend yields.
  • Strong overall financial condition, including solid capital levels.
  • Pristine asset quality measures.
  • Robust operating performance.
  • Substantial loan origination opportunities.

Headwinds

  • Concerns about banks’ liquidity positions and the stability of banks’ deposit portfolios.
  • Close monitoring of deposit base for any atypical activities.
  • Potential challenges arising from changing economic conditions.
  • Higher interest rate environment.
  • Limited housing inventory levels.

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 2023

Historical avgQ2 2023

+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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