NasdaqGS:MBWM

Stock Analysis Report

Executive Summary

Mercantile Bank Corporation operates as the bank holding company for Mercantile Bank of Michigan that provides commercial and retail banking services for small- to medium-sized businesses and individuals in the United States.


Snowflake Analysis

Flawless balance sheet with solid track record and pays a dividend.


Similar Companies

Share Price & News

How has Mercantile Bank's share price performed over time and what events caused price changes?


Latest Share Price and Events

Stable Share Price: MBWM has not had significant price volatility in the past 3 months.


Market Performance


7 Day Return

-4.2%

MBWM

-7.4%

US Banks

-7.4%

US Market


1 Year Return

-9.9%

MBWM

2.3%

US Banks

10.5%

US Market

Return vs Industry: MBWM underperformed the US Banks industry which returned 2.3% over the past year.

Return vs Market: MBWM underperformed the US Market which returned 10.5% over the past year.


Shareholder returns

MBWMIndustryMarket
7 Day-4.2%-7.4%-7.4%
30 Day-7.1%-5.8%-3.6%
90 Day-11.7%-8.1%-0.6%
1 Year-6.9%-9.9%5.3%2.3%12.8%10.5%
3 Year3.4%-7.3%12.6%4.5%37.4%28.6%
5 Year95.0%63.7%60.7%42.5%61.3%43.6%

Price Volatility Vs. Market

How volatile is Mercantile Bank's share price compared to the market and industry in the last 5 years?


Simply Wall St News

Valuation

Is Mercantile Bank undervalued compared to its fair value and its price relative to the market?

16.7%

Undervalued compared to fair value


Share Price vs. Fair Value

Below Fair Value: MBWM ($31.34) is trading below our estimate of fair value ($37.6)

Significantly Below Fair Value: MBWM is trading below fair value, but not by a significant amount.


Price To Earnings Ratio

PE vs Industry: MBWM is good value based on its PE Ratio (10.4x) compared to the Banks industry average (12.2x).

PE vs Market: MBWM is good value based on its PE Ratio (10.4x) compared to the US market (17.2x).


Price to Earnings Growth Ratio

PEG Ratio: MBWM's earnings are forecast to decline next year, so we can't calculate its PEG ratio.


Price to Book Ratio

PB vs Industry: MBWM is overvalued based on its PB Ratio (1.2x) compared to the US Banks industry average (1.2x).


Next Steps

Future Growth

How is Mercantile Bank forecast to perform in the next 1 to 3 years based on estimates from 5 analysts?

-7.3%

Forecasted annual earnings growth


Earnings and Revenue Growth Forecasts


Analyst Future Growth Forecasts

Earnings vs Savings Rate: MBWM's earnings are forecast to decline over the next 3 years (-7.3% per year).

Earnings vs Market: MBWM's earnings are forecast to decline over the next 3 years (-7.3% per year).

High Growth Earnings: MBWM's earnings are forecast to decline over the next 3 years.

Revenue vs Market: MBWM's revenue (2.2% per year) is forecast to grow slower than the US market (7.6% per year).

High Growth Revenue: MBWM's revenue (2.2% per year) is forecast to grow slower than 20% per year.


Earnings per Share Growth Forecasts


Future Return on Equity

Future ROE: MBWM's Return on Equity is forecast to be low in 3 years time (9.5%).


Next Steps

Past Performance

How has Mercantile Bank performed over the past 5 years?

15.8%

Historical annual earnings growth


Earnings and Revenue History

Quality Earnings: MBWM has high quality earnings.

Growing Profit Margin: MBWM's current net profit margins (33.6%) are higher than last year (30.7%).


Past Earnings Growth Analysis

Earnings Trend: MBWM's earnings have grown by 15.8% per year over the past 5 years.

Accelerating Growth: MBWM's earnings growth over the past year (17.7%) exceeds its 5-year average (15.8% per year).

Earnings vs Industry: MBWM earnings growth over the past year (17.7%) exceeded the Banks industry 12%.


Return on Equity

High ROE: MBWM's Return on Equity (11.9%) is considered low.


Return on Assets


Return on Capital Employed


Next Steps

Financial Health

How is Mercantile Bank's financial position? (This company is analysed differently as a bank or financial institution)


Financial Position Analysis


Debt to Equity History and Analysis


Balance Sheet

Inventory Level: MBWM has a low level of unsold assets or inventory.

Debt Coverage by Assets: MBWM's debt is not covered by short term assets (assets are 0.5x debt).


Financial Institutions Analysis

Asset Level: MBWM's level of assets compared to its equity is low.

Allowance for Bad Loans: MBWM has a sufficient allowance for bad loans.

Low Risk Liabilities: MBWM's liabilities are made up of primarily low risk sources of funding.

Loan Level: MBWM has an acceptable proportion of non-loan assets held.

Low Risk Deposits: MBWM's loans are broadly funded by customer deposits.

Level of Bad Loans: MBWM has an appropriate level of bad loans (0.08%)


Next Steps

Dividend

What is Mercantile Bank's current dividend yield, its reliability and sustainability?

3.57%

Current Dividend Yield


Upcoming Dividend Payment

Purchase Mercantile Bank before the 'Buy Limit' to receive their next dividend payment.


Dividend Yield vs Market

company3.6%marketbottom25%1.5%markettop25%3.9%industryaverage3.1%forecastin3Years3.7%

Current dividend yield vs market & industry

Notable Dividend: MBWM's dividend (3.57%) is higher than the bottom 25% of dividend payers in the US market (1.52%).

High Dividend: MBWM's dividend (3.57%) is low compared to the top 25% of dividend payers in the US market (3.9%).


Stability and Growth of Payments

Stable Dividend: MBWM's dividend payments have been volatile in the past 10 years.

Growing Dividend: MBWM's dividend payments have increased over the past 10 years.


Current Payout to Shareholders

Dividend Coverage: With its reasonably low payout ratio (35.2%), MBWM's dividend payments are well covered by earnings.


Future Payout to Shareholders

Future Dividend Coverage: MBWM's dividends in 3 years are forecast to be well covered by earnings (44.8% payout ratio).


Next Steps

Management

How experienced are the management team and are they aligned to shareholders interests?

3.1yrs

Average management tenure


CEO

Bob Kaminski (57yo)

3.1yrs

Tenure

US$951,266

Compensation

Mr. Robert B. Kaminski, Jr., also known as Bob, has been the President and Chief Executive Officer of Mercantile Bank Corporation since January 1, 2017. Mr. Kaminski has been the Chief Executive Officer of ...


CEO Compensation Analysis

Compensation vs Market: Bob's total compensation ($USD951.27K) is below average for companies of similar size in the US market ($USD1.73M).

Compensation vs Earnings: Bob's compensation has been consistent with company performance over the past year.


Leadership Team

NamePositionTenureCompensationOwnership
Robert Kaminski
President3.1yrsUS$951.27k0.49% $2.6m
Charles Christmas
Executive VP21.1yrsUS$692.44k0.49% $2.6m
Robert Worthington
Senior VP3.1yrsUS$449.31k0.18% $920.0k
Lonna Wiersma
Senior VP & Human Resource Director1.8yrsUS$462.58k0.22% $1.1m
Raymond Reitsma
Senior Vice President1.8yrsUS$676.86k0.20% $1.1m
Mark Augustyn
Chief Lending Officer0yrsno datano data
Jeff Kaiser
Senior VP & Head of Risk Management Department0yrsno datano data

3.1yrs

Average Tenure

54.5yo

Average Age

Experienced Management: MBWM's management team is considered experienced (3.1 years average tenure).


Board Members

NamePositionTenureCompensationOwnership
Robert Kaminski
President3.1yrsUS$951.27k0.49% $2.6m
Michael Price
Chairman of the Board0yrsUS$286.42k0.41% $2.2m
Edward Clark
Independent Director4.8yrsUS$70.36k0.34% $1.8m
Edward Grant
Independent Director5.7yrsUS$68.97k0.12% $643.4k
David Cassard
Independent Director19.1yrsUS$66.40k0.17% $885.1k
Jeff Gardner
Independent Director5.7yrsUS$59.97k0.64% $3.3m
Michelle Eldridge
Independent Director3.2yrsUS$57.99k0.070% $367.0k

5.2yrs

Average Tenure

65yo

Average Age

Experienced Board: MBWM's board of directors are considered experienced (5.2 years average tenure).


Ownership

Who are the major shareholders and have insiders been buying or selling?


Insider Trading Volume

Insider Buying: Insufficient data to determine if insiders have bought more shares than they have sold in the past 3 months.


Recent Insider Transactions

Ownership Breakdown

Dilution of Shares: Shareholders have not been meaningfully diluted in the past year.


Top Shareholders

Company Information

Mercantile Bank Corporation's company bio, employee growth, exchange listings and data sources


Key Information

  • Name: Mercantile Bank Corporation
  • Ticker: MBWM
  • Exchange: NasdaqGS
  • Founded: 1997
  • Industry: Regional Banks
  • Sector: Banks
  • Market Cap: US$524.783m
  • Shares outstanding: 16.43m
  • Website: https://www.mercbank.com

Number of Employees


Location

  • Mercantile Bank Corporation
  • 310 Leonard Street NW
  • Grand Rapids
  • Michigan
  • 49504
  • United States

Listings

TickerExchangePrimary SecuritySecurity TypeCountryCurrencyListed on
MBWMNasdaqGS (Nasdaq Global Select)YesCommon StockUSUSDOct 1997

Biography

Mercantile Bank Corporation operates as the bank holding company for Mercantile Bank of Michigan that provides commercial and retail banking services for small- to medium-sized businesses and individuals in the United States. It accepts various deposit products, including checking, savings, and term certificate accounts; time deposits; and certificates of deposit. The company also offers commercial and industrial loans; vacant land, land development, and residential construction loans; owner occupied real estate, non-owner occupied real estate, and multi-family and residential rental property loans; single-family residential real estate loans; home equity line of credit programs; and consumer loans, such as loans for new and used automobiles, boats, and credit cards, as well as overdraft protection services. In addition, it provides courier services and safe deposit facilities; repurchase agreements; and insurance products, such as private passenger automobile, homeowners, personal inland marine, boat owners, recreational vehicle, dwelling fire, umbrella policies, small business, and life insurance products, as well as operates and 40 automated teller machines. The company operates 46 banking offices. Mercantile Bank Corporation was founded in 1997 and is headquartered in Grand Rapids, Michigan. 


Company Analysis and Financial Data Status

All financial data provided by Standard & Poor's Capital IQ.
DataLast Updated (UTC time)
Company Analysis2020/02/26 00:08
End of Day Share Price2020/02/25 00:00
Earnings2019/12/31
Annual Earnings2019/12/31


Unless specified all financial data is based on a yearly period but updated quarterly. This is known as Trailing Twelve Month (TTM) or Last Twelve Month (LTM) Data. Learn more here.