Mercantile Bank's Tough Quarter: Fool by Numbers

• Email
• Share
• Print

On Oct. 11, Mercantile Bank (Nasdaq: MBWM) released earnings for the third quarter ended Sept. 30.

• Net interest income decreased almost 10% for the quarter. Loans increased 5.1% and deposits increased slightly -- 1.6%.
• Non-interest revenue increased 15%. Non-interest expenses rose 19.2% thanks to increases in salaries and benefits expenses.
• The company said it will expand, opening its ninth bank during the fourth quarter.
• Mercantile Bank is given our lowest Motley Fool CAPS rating -- one star. That isn't far off from banking peers like Fifth Third Bancorp (Nasdaq: FITB) and Macatawa Bank (Nasdaq: MCBC), which also carry one star, and Huntington Bancshares (Nasdaq: HBAN), with two stars. CAPS is completely free, so join today to give us your Foolish opinion.

(Figures in thousands, except per-share data)

Income Statement Highlights

	Q3 2007	Q3 2006	Change
Total Revenue	$15,600	$16,900	(8.0%)
Net Interest Income	$14,051	$15,547	(9.6%)
Net Profit	$2,367	$5,202	(54.5%)
EPS*	$0.28	$0.61	(54.1%)

*Non-GAAP EPS as reported by the company.

Get back to basics with a look at the income statement.

Ratio Checkup

	Q3 2007	Q3 2006	Change*
Net Interest Margin	2.86%	3.34%	(0.48%)
Efficiency Ratio	61.51%	47.48%	14.03%
Nonperforming Assets / Assets	1.23%	0.47%	0.76%
Return on Average Assets	0.45%	1.04%	(0.59%)
Return on Average Equity	5.32%	12.54%	(7.22%)

*Expressed in percentage points.

Find out more about bank performance ratios.

Balance Sheet Highlights

Assets	Q3 2007	Q3 2006	Change
Investments	$208,174	$211,783	(1.7%)
Loans	$1,796,962	$1,710,268	5.1%

Liabilities	Q3 2007	Q3 2006	Change
Deposits	$1,640,984	$1,614,703	1.6%
Total Liabilities	$1,928,703	$1,859,286	3.7%

Learn about bank assets and bank liabilities.

Related Foolishness:

•  More M&A for M&I
•  The Bank That Didn't Go Subprime 
•  Quick Take: First Horizon Limits Its Horizons