Mercantile Bank Corporation (MBWM) Bundle
A Brief History of Mercantile Bank Corporation
Mercantile Bank Corporation has established itself as a significant player in the banking sector, particularly in the Midwest region of the United States. As of 2024, the bank has demonstrated consistent growth in various financial metrics.
Financial Performance Overview
For the third quarter of 2024, Mercantile Bank reported a net income of $19.6 million, which translates to $1.22 per diluted share. This represents a decrease from the $20.9 million, or $1.30 per diluted share, recorded in the third quarter of 2023. Over the first nine months of 2024, net income totaled $60.0 million, or $3.72 per diluted share, compared to $62.2 million, or $3.89 per diluted share, for the same period in 2023.
Loan Growth and Portfolio Quality
Throughout the first nine months of 2024, commercial loans surged by $233 million, reflecting an annualized growth rate of approximately 9%. Notably, multi-family and residential rental property loans rose by $93.8 million, largely due to increased activity in multi-family construction loans.
The overall quality of the loan portfolio remains robust, with nonperforming loans constituting 0.22% of total loans as of September 30, 2024. Additionally, gross loan charge-offs were minimal, totaling less than $0.1 million during the first nine months.
| Metric | Q3 2024 | Q3 2023 | 9M 2024 | 9M 2023 |
|---|---|---|---|---|
| Net Income | $19.6 million | $20.9 million | $60.0 million | $62.2 million |
| Earnings per Share | $1.22 | $1.30 | $3.72 | $3.89 |
| Commercial Loan Growth | $233 million | N/A | N/A | N/A |
| Nonperforming Loans Ratio | 0.22% | N/A | N/A | N/A |
Interest Income and Expense Trends
Interest income for the third quarter of 2024 reached $83.4 million, marking an increase of 17.2% compared to $71.1 million in the third quarter of 2023. The yield on average earning assets was 6.08% in Q3 2024, up from 5.78% in Q3 2023.
Conversely, net interest income for the first nine months of 2024 was $143 million, a decline of 1.5% from $145 million in the same period of 2023. This decline was attributed to a lower net interest margin, which fell from 4.10% in 2023 to 3.62% in 2024.
| Metric | Q3 2024 | Q3 2023 | 9M 2024 | 9M 2023 |
|---|---|---|---|---|
| Interest Income | $83.4 million | $71.1 million | $239 million | $198 million |
| Net Interest Income | $142.9 million | $145.1 million | $143 million | $145 million |
| Yield on Earning Assets | 6.08% | 5.78% | 6.06% | 5.59% |
| Net Interest Margin | 3.62% | 4.10% | 3.62% | 4.10% |
Shareholders' Equity and Capital Ratios
As of September 30, 2024, shareholders' equity stood at $583 million, an increase of $61.2 million compared to December 31, 2023. The total risk-based capital ratio was reported at 13.9%, up from 13.4% at the end of 2023.
The bank's capital ratios continue to exceed regulatory requirements, ensuring a strong capital base to support future growth and stability in operations.
| Metric | September 30, 2024 | December 31, 2023 |
|---|---|---|
| Shareholders' Equity | $583 million | $521 million |
| Total Risk-Based Capital Ratio | 13.9% | 13.4% |
A Who Owns Mercantile Bank Corporation (MBWM)
Shareholder Composition
As of 2024, the ownership structure of Mercantile Bank Corporation (MBWM) is characterized by a diverse base of institutional and retail investors. The largest shareholders include various institutional investors, mutual funds, and individual stakeholders. Below is a table detailing the major shareholders and their respective ownership percentages:
| Shareholder | Ownership Percentage |
|---|---|
| BlackRock, Inc. | 9.2% |
| The Vanguard Group, Inc. | 7.8% |
| State Street Corporation | 5.4% |
| Dimensional Fund Advisors LP | 4.6% |
| Wellington Management Group LLP | 4.1% |
| Individual and Other Investors | 64.9% |
Stock Performance and Market Capitalization
As of September 30, 2024, Mercantile Bank Corporation's stock price was approximately $39.50 per share, reflecting a market capitalization of around $600 million. This represents a year-to-date increase of approximately 12% compared to the previous year. The stock has shown resilience amidst fluctuating market conditions, with a 52-week range of $32.00 to $41.00.
Financial Overview
In the third quarter of 2024, Mercantile Bank Corporation reported net income of $19.6 million, or $1.22 per diluted share. For the first nine months of 2024, net income totaled $60.0 million, or $3.72 per diluted share, compared to $62.2 million, or $3.89 per diluted share, for the same period in the previous year. The decrease in net income was attributed to increased overhead costs and decreased net interest income.
Shareholders' Equity
As of September 30, 2024, total shareholders' equity for Mercantile Bank Corporation was reported at $583 million, an increase of $61.2 million during the first nine months of 2024. This growth was driven by net income generation and stock-based compensation activities, partially offset by cash dividend payments totaling $16.8 million during the same period.
Recent Developments
In 2024, the bank has focused on expanding its commercial lending portfolio, which saw an increase of $233 million, representing an annualized growth rate of about 9%. The total loans outstanding as of September 30, 2024, reached $4.55 billion, up from $4.30 billion at the end of 2023.
Dividend History
Mercantile Bank Corporation has consistently paid dividends, with cash dividends of $0.34 per share declared in January 2024, $0.35 per share in April 2024, and $0.36 per share in July 2024. The total cash dividends paid in the first nine months of 2024 amounted to $16.8 million.
Regulatory Capital Ratios
As of September 30, 2024, the total risk-based capital ratio for Mercantile Bank Corporation stood at 13.9%, compared to 13.4% at the end of 2023. The bank's regulatory capital increased by $52.6 million during the first nine months of 2024, reflecting strong earnings and prudent capital management.
Conclusion
The ownership and financial metrics of Mercantile Bank Corporation illustrate a well-managed institution with a solid shareholder base and a focus on growth in key lending areas. The bank's commitment to maintaining robust capital ratios and consistent dividend payments further underscores its stability in the financial sector.
Mercantile Bank Corporation (MBWM) Mission Statement
Overview
As of 2024, Mercantile Bank Corporation (MBWM) emphasizes its commitment to providing exceptional banking services tailored to the needs of its customers, while simultaneously fostering community development and sustaining a strong financial performance.
Financial Performance
For the third quarter of 2024, Mercantile Bank reported a net income of $19.6 million, or $1.22 per diluted share, down from $20.9 million or $1.30 per diluted share in the same period of 2023. Year-to-date net income for the first nine months of 2024 totaled $60.0 million, or $3.72 per diluted share, compared to $62.2 million or $3.89 per diluted share in 2023.
Key Financial Metrics
| Metric | Q3 2024 | Q3 2023 | 9M 2024 | 9M 2023 |
|---|---|---|---|---|
| Net Income | $19.6 million | $20.9 million | $60.0 million | $62.2 million |
| Earnings Per Share | $1.22 | $1.30 | $3.72 | $3.89 |
| Net Interest Income | $142.9 million | $145.1 million | $143.0 million | $145.0 million |
| Noninterest Income | $9.7 million | $9.3 million | $29.0 million | $27.6 million |
| Total Assets | $5.57 billion | $5.01 billion | $5.57 billion | $5.01 billion |
Loan Portfolio
As of September 30, 2024, total loans were $4.55 billion, an increase of $249 million or 5.8% from December 31, 2023. The breakdown of the loan portfolio is as follows:
| Loan Type | Balance (Sept 30, 2024) | Balance (Dec 31, 2023) | Increase (%) |
|---|---|---|---|
| Commercial and Industrial | $1.31 billion | $1.25 billion | 4.6% |
| Real Estate – Owner Occupied | $746.7 million | $717.7 million | 4.0% |
| Real Estate – Non-Owner Occupied | $1.10 billion | $1.04 billion | 5.8% |
| Multi-Family and Residential Rental | $426.4 million | $332.6 million | 28.2% |
Deposit Growth
Total deposits increased by $555 million or 14.2% during the first nine months of 2024, totaling $4.46 billion as of September 30, 2024. The composition of deposits is as follows:
| Deposit Type | Balance (Sept 30, 2024) | Balance (Dec 31, 2023) | Increase (%) |
|---|---|---|---|
| Noninterest-Bearing Deposits | $1.19 billion | $1.36 billion | -12.3% |
| Interest-Bearing Deposits | $3.15 billion | $2.31 billion | 36.2% |
Community Commitment
Mercantile Bank Corporation continues to prioritize community engagement through various initiatives, including funding local projects and supporting economic development in the regions it serves.
Regulatory Capital Ratios
As of September 30, 2024, the bank's total risk-based capital ratio was 13.9%, compared to 13.4% at the end of 2023. This ratio indicates that the bank remains well-capitalized according to regulatory standards.
Conclusion
The mission of Mercantile Bank Corporation remains focused on delivering tailored financial solutions while ensuring a robust financial foundation that supports its growth and community initiatives.
How Mercantile Bank Corporation (MBWM) Works
Financial Performance Overview
As of September 30, 2024, Mercantile Bank Corporation reported total assets of $5.92 billion, an increase of $564 million from the previous year. The bank's total loans rose by $249 million, while interest-earning deposits increased by $181 million and securities available for sale grew by $86.3 million.
| Financial Metric | Value (2024) | Value (2023) | Change (%) |
|---|---|---|---|
| Total Assets | $5.92 billion | $5.36 billion | +10.5% |
| Total Loans | $4.55 billion | $4.30 billion | +5.8% |
| Interest-Earning Deposits | $1.04 billion | $0.86 billion | +21.0% |
| Securities Available for Sale | $703 million | $616 million | +14.1% |
Earnings Report
In the third quarter of 2024, Mercantile Bank reported net income of $19.6 million, or $1.22 per diluted share, compared to $20.9 million, or $1.30 per diluted share in the same quarter of 2023. For the first nine months of 2024, net income totaled $60.0 million, or $3.72 per diluted share, down from $62.2 million, or $3.89 per diluted share in the prior year.
Net Interest Income and Margin
Net interest income for the first nine months of 2024 was $143 million, a decline of $2.2 million from $145 million in 2023. The net interest margin decreased to 3.62% from 4.10% year-over-year.
| Period | Net Interest Income | Net Interest Margin (%) | Cost of Funds (%) |
|---|---|---|---|
| Q3 2024 | $48.4 million | 3.62% | 2.56% |
| Q3 2023 | $49.0 million | 4.10% | 1.80% |
Loan Portfolio Composition
The bank's loan portfolio remains diversified, with commercial loans increasing by $233 million in the first nine months of 2024, providing an annualized growth rate of about 9%. Residential mortgage loans grew by $6.7 million during the same period.
| Loan Type | Value (2024) | Value (2023) | Change (%) |
|---|---|---|---|
| Commercial Loans | $2.73 billion | $2.50 billion | +9.3% |
| Residential Loans | $470 million | $463 million | +1.5% |
| Consumer Loans | $60.6 million | $51.1 million | +18.5% |
Deposits and Funding
Total deposits increased by $555 million during the first nine months of 2024, representing an annualized growth rate of approximately 19%. The bank's funding mix has shifted, with an increase in higher-cost money market accounts and time deposits.
| Deposit Type | Value (2024) | Value (2023) | Change (%) |
|---|---|---|---|
| Total Deposits | $4.46 billion | $3.90 billion | +14.2% |
| Noninterest-Bearing Deposits | $1.19 billion | $1.36 billion | -12.3% |
| Interest-Bearing Deposits | $3.15 billion | $2.47 billion | +27.6% |
Noninterest Income and Expenses
Noninterest income was $30.2 million for the first nine months of 2024, compared to $23.8 million in 2023, driven by increased mortgage banking income and treasury management fees. Noninterest expenses increased to $92.0 million from $85.3 million, primarily due to higher salary costs and operational expenses.
| Period | Noninterest Income | Noninterest Expenses |
|---|---|---|
| First 9 Months 2024 | $30.2 million | $92.0 million |
| First 9 Months 2023 | $23.8 million | $85.3 million |
Asset Quality and Provisions for Credit Losses
As of September 30, 2024, nonperforming loans accounted for 0.22% of total loans. The allowance for credit losses stood at $56.6 million, or 1.24% of total loans, with a provision expense of $1.1 million recorded in the third quarter of 2024.
| Metric | Value (2024) | Value (2023) |
|---|---|---|
| Nonperforming Loans (%) | 0.22% | 0.25% |
| Allowance for Credit Losses ($) | $56.6 million | $53.5 million |
| Provision Expense ($) | $1.1 million | $3.3 million |
How Mercantile Bank Corporation (MBWM) Makes Money
Interest Income
Mercantile Bank Corporation generates a significant portion of its revenue from interest income, which is derived from loans and interest-earning assets. In the third quarter of 2024, the bank reported interest income of $83.4 million, an increase of 17.2% from $71.1 million in the third quarter of 2023. For the first nine months of 2024, total interest income was $239 million, up 21.0% from $198 million in the same period of 2023.
Key components of interest income include:
- Loans: The average yield on loans was 6.69% in Q3 2024, compared to 6.37% in Q3 2023.
- Investment securities: Interest income from securities was $4.3 million in Q3 2024, up from $3.3 million in Q3 2023.
- Interest-earning deposits: These contributed $3.9 million in Q3 2024, compared to $2.8 million in Q3 2023.
| Period | Interest Income ($ millions) | Average Yield on Loans (%) | Average Yield on Earning Assets (%) |
|---|---|---|---|
| Q3 2024 | 83.4 | 6.69 | 6.08 |
| Q3 2023 | 71.1 | 6.37 | 5.78 |
| First 9 months 2024 | 239.0 | 6.66 | 6.06 |
| First 9 months 2023 | 198.0 | 6.16 | 5.59 |
Net Interest Income
Net interest income, which is calculated as the difference between interest income and interest expense, is a crucial metric for MBWM. In Q3 2024, net interest income was $48.3 million, slightly down from $48.9 million in Q3 2023. For the first nine months of 2024, net interest income totaled $142.7 million, compared to $144.9 million in the same period of 2023.
The net interest margin (NIM) was 3.52% for the nine months ended September 30, 2024, down from 3.98% in the previous year, primarily due to rising costs of funds.
| Period | Net Interest Income ($ millions) | Net Interest Margin (%) |
|---|---|---|
| Q3 2024 | 48.3 | 3.52 |
| Q3 2023 | 48.9 | 3.98 |
| First 9 months 2024 | 142.7 | 3.62 |
| First 9 months 2023 | 144.9 | 4.10 |
Noninterest Income
Noninterest income is another vital revenue stream for Mercantile Bank, comprising fees from various banking services. In Q3 2024, noninterest income was $9.7 million, an increase of 4.6% from $9.2 million in Q3 2023. For the first nine months of 2024, noninterest income totaled $30.2 million, compared to $23.8 million in the same period of 2023.
Major contributors to noninterest income include:
- Mortgage banking income: Increased to $8.7 million in the first nine months of 2024 from $5.8 million in 2023.
- Treasury management fees: Grew significantly as customers expanded their use of cash management products.
- Payroll service income: Increased to $2.3 million in the first nine months of 2024 from $1.9 million in 2023.
| Period | Noninterest Income ($ millions) |
|---|---|
| Q3 2024 | 9.7 |
| Q3 2023 | 9.2 |
| First 9 months 2024 | 30.2 |
| First 9 months 2023 | 23.8 |
Cost of Funds
The cost of funds has risen significantly due to the higher interest rate environment. In Q3 2024, the cost of funds was 2.56%, up from 1.80% in Q3 2023. This increase reflects a shift in funding mix, with higher-cost money market accounts and time deposits becoming more prevalent.
Interest expense for the third quarter of 2024 increased to $35.1 million, up from $22.2 million in Q3 2023. The increase in interest expense was driven by higher rates on deposits and borrowings.
| Period | Cost of Funds (%) | Interest Expense ($ millions) |
|---|---|---|
| Q3 2024 | 2.56 | 35.1 |
| Q3 2023 | 1.80 | 22.2 |
| First 9 months 2024 | 2.44 | 96.3 |
| First 9 months 2023 | 1.49 | 52.7 |
Loan Portfolio Growth
Mercantile Bank has experienced significant growth in its loan portfolio. Total loans increased by $249 million during the first nine months of 2024, driven by commercial loans, which increased by $233 million, reflecting a strong demand for financing. This growth is accompanied by a low nonperforming loans ratio of 0.22%.
Loan originations for residential mortgages totaled $364 million in the first nine months of 2024, with approximately 77% originated with the intent to sell.
| Loan Type | Increase ($ millions) | Percentage of Total Loans (%) |
|---|---|---|
| Commercial Loans | 233 | 56.5 |
| Residential Mortgages | 6.7 | 1.3 |
| Total Loans | 249 | N/A |
Operating Expenses
Operating expenses have increased, impacting profitability. Noninterest expenses totaled $32.3 million in Q3 2024, compared to $28.9 million in Q3 2023. For the first nine months of 2024, noninterest expenses were $92.0 million, up from $85.3 million in the previous year.
Salary and benefits costs have risen due to merit pay increases and higher commissions for residential mortgage lenders.
| Period | Noninterest Expense ($ millions) |
|---|---|
| Q3 2024 | 32.3 |
| Q3 2023 | 28.9 |
| First 9 months 2024 | 92.0 |
| First 9 months 2023 | 85.3 |
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Article updated on 8 Nov 2024
Resources:
- Mercantile Bank Corporation (MBWM) Financial Statements – Access the full quarterly financial statements for Q3 2024 to get an in-depth view of Mercantile Bank Corporation (MBWM)' financial performance, including balance sheets, income statements, and cash flow statements.
- SEC Filings – View Mercantile Bank Corporation (MBWM)' latest filings with the U.S. Securities and Exchange Commission (SEC) for regulatory reports, annual and quarterly filings, and other essential disclosures.