Mercantile Bank Corporation's (NASDAQ: MBWM) stock soared 5.17% on Tuesday as the bank reported robust financial results for the fourth quarter and full-year 2024, driving an increase in its quarterly dividend payout.

For the fourth quarter, Mercantile Bank reported net income of $19.6 million, or $1.22 per diluted share, beating analyst estimates of $1.15 per share. Revenue of $58.5 million also exceeded expectations of $57.38 million. The strong performance was driven by notable growth in commercial loans, local deposits, mortgage banking income, and treasury management fees.

The Michigan-based bank's asset quality remained healthy, with low levels of nonperforming loans and loan charge-offs. Additionally, Mercantile Bank maintained a strong capital position, with a total risk-based capital ratio of 14.17% as of December 31, 2024.

For the full year 2024, Mercantile Bank reported net income of $79.6 million, or $4.93 per diluted share, compared to $82.2 million, or $5.13 per share, in 2023. The bank's net interest margin declined to 3.58% from 4.05% in 2023, but was partially offset by growth in earning assets.

Reflecting its robust financial performance, the bank's board of directors raised the regular quarterly cash dividend to $0.37 per share, a 2.8% increase from the previous quarter and a 5.7% rise from the first quarter of 2024. The increased dividend, payable on March 19, 2025, represents an annual yield of approximately 3.4% based on Friday's closing price.

Analysts welcomed the bank's strong results and dividend hike, with some revising their earnings estimates higher. The positive outlook amid a challenging economic environment drove investors to bid up the stock, resulting in the 5.17% surge on Tuesday.