NASDAQ$MBWM

Mercantile Bank Corporation · Q3 2024 earnings

Q3 2024 earnings · · Investor relations

Briefing

Mercantile Bank reported strong financial performance driven by local deposit and commercial loan growth and sustained strength in asset quality metrics.

Mercantile Bank Corporation reported a net income of $19.6 million for the third quarter of 2024, a slight decrease compared to $20.9 million in the same period last year. The bank saw growth in local deposits and commercial loans, reflecting a focus on relationship banking. Net revenue remained relatively stable, with a slight decrease in net interest income offset by an increase in noninterest income.

  • Net income was $19.6 million, or $1.22 per diluted share, compared to $20.9 million, or $1.30 per diluted share, for the third quarter of 2023.
  • Net revenue was $58.0 million, slightly down from $58.2 million in the prior-year quarter.
  • Total deposits increased by $309 million during the third quarter of 2024.
  • Nonperforming assets totaled $9.9 million, or 0.2% of total assets.

Headline financials

Total Revenue

$58M

Previous: $58.2M-0.4%
EPS

$1.22

Previous: $1.30-6.2%
Net interest margin

3.5%

Previous: 4.0%-11.6%
Efficiency ratio

55.7%

No prior period
Return on avg assets

1.4%

No prior period
Return on avg equity

13.7%

No prior period
Yield on loans

6.7%

Previous: 6.4%+5.0%
Yield on securities

2.4%

No prior period
Yield on earning assets

6.1%

No prior period
Yield on total assets

5.7%

No prior period
Cost of deposits

2.5%

No prior period
Cost of borrowed funds

3.8%

No prior period
Cost of interest liabilities

3.5%

No prior period
Cost of funds (earning)

2.6%

No prior period
Cost of funds (total)

2.4%

No prior period
Tangible equity/assets

9.1%

No prior period
Tier 1 leverage ratio

10.7%

No prior period
Common equity risk ratio

10.5%

No prior period
Tier 1 risk capital ratio

11.4%

No prior period
Total risk capital ratio

14.1%

Previous: 13.9%+1.7%
Net loan charge-offs

-0.0%

No prior period
Nonperforming loans/loans

0.2%

No prior period
Nonperforming assets/assets

0.2%

No prior period
Loan to deposit ratio

102

No prior period
Capital Expenditures

-$5.61M

Previous: -$1.46M-284.0%
Free Cash Flow

$19.6M

Previous: $20.9M-5.9%
Net Income

$19.6M

Previous: $20.9M-5.9%
Operating Income

$16.5M

Previous: $27.9M-40.8%
Gross Profit

$56.9M

Previous: $54.9M+3.6%
Cash & Equivalents

$329M

Previous: $266M+23.5%
Total Assets

$5.92B

Previous: $5.25B+12.7%
Stock-Based Comp

$898K

Previous: $824K+9.0%

Revenue & EPS history

Mercantile Bank · Revenue · Quarterly

$58M

Q3 2024-0.4%vs Q3 2023
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 continued commercial loan portfolio expansion and focuses on lowering the loan-to-deposit ratio. They expect solid originations in future periods, supported by a strong commercial loan pipeline.

Tailwinds

  • Strength in financial performance enabled continuation of regular cash dividend program.
  • Strong capital levels and operating results.
  • Anticipated commercial loan portfolio expansion.
  • Success in retaining existing customers and attracting new clients.
  • Community banking approach and focus on developing mutually beneficial relationships.

Headwinds

  • Challenges arising from recent economic and operating environments.
  • Impact of higher interest rates and related increase in debt service requirements.
  • Potential for systemic weakness in the commercial loan portfolio.
  • Uncertainties in the economic environment.
  • Shift in economic and operating environments

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 Q3 2024

Historical avgQ3 2024

+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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