How profitable a bank is affects its long-term survivability. A bank can retain its earnings, boosting its capital buffer, or put them to work addressing problematic loans, potentially making the bank more resilient in tough times. However, banks that are losing money are less able to do those things.
On Bankrate's earnings test, Mercantile Bank scored 22 out of a possible 30, better than the national average of 15.12.
Return on equity, calculated by dividing net income (profit, basically) by the total amount of equity, is one key measure of a bank's earnings. The most recent annualized quarterly return on equity for Mercantile Bank was 12.40 percent, above the national average of 8.10 percent.
For the twelve months ended December 31, 2017, the bank reported net income of $5.3 million on total equity of $42.2 million. The bank reported an annualized return on average assets, or ROA, of 1.18 percent, above the 1 percent deemed satisfactory in accordance with industry standards, and above the average for U.S. banks of 1.00 percent.