How profitable a bank is has an effect on its safety and soundness. A bank can retain its earnings, giving a boost to its capital cushion, or put them to work addressing problematic loans, potentially making the bank better able to withstand economic trouble. Losses, on the other hand, take away from a bank's ability to do those things.
Mercantile Bank of Michigan did above-average on Bankrate's earnings test, achieving a score of 18 out of a possible 30.
Return on equity, calculated by dividing net income (essentially, profit) by the total amount of equity, is one important measure of a bank's earnings. The most recent annualized quarterly return on equity for Mercantile Bank of Michigan was 8.84 percent, above the national average of 8.10 percent.
For the twelve months ended December 31, 2017, the bank reported net income of $33.3 million on total equity of $383.9 million. The bank reported an annualized return on average assets, or ROA, of 1.06 percent, above the 1 percent deemed satisfactory in accordance with industry standards, and above the average for U.S. banks of 1.00 percent.