Table of Contents UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D. C. 20549 FORM 10-Q (Mark One) ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended March 31, 2025 OR ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from ____________ to _______________ Commission File No. 001-38258 MERCHANTS BANCORP (Exact name of registrant as specified in its charter) Indi ...

Core Insights - Merchants Bancorp reported a revenue of $145.89 million for the quarter ended March 2025, reflecting a 13.1% decline year-over-year and falling short of the Zacks Consensus Estimate of $167.04 million by 12.66% [1] - The company's earnings per share (EPS) was $0.93, down from $1.80 in the same quarter last year, and also below the consensus estimate of $1.25, resulting in an EPS surprise of -25.60% [1] Financial Performance Metrics - Efficiency Ratio was reported at 42.3%, higher than the three-analyst average estimate of 38% [4] - Net interest margin stood at 2.9%, slightly below the estimated 3% by three analysts [4] - Average Earning Assets were $17.14 billion, lower than the average estimate of $18.15 billion [4] - Tier I capital/risk-weighted assets Ratio was 12.4%, exceeding the two-analyst average estimate of 12% [4] - Total capital/risk-weighted assets Ratio was 13%, slightly above the estimated 12.9% by two analysts [4] - Loan servicing fees (costs), net, were $4.01 million, higher than the average estimate of $3.17 million [4] - Syndication and asset management fees were $3.39 million, below the average estimate of $5.08 million [4] - Other income was reported at $3.16 million, compared to the average estimate of $4.80 million [4] - Mortgage warehouse fees were $1.51 million, exceeding the average estimate of $1.24 million [4] - Total Noninterest Income was $23.69 million, significantly lower than the average estimate of $34.95 million [4] - Gain on Sale of Loans was $11.62 million, compared to the average estimate of $20.67 million [4] - Net Interest Income was reported at $122.20 million, below the average estimate of $132.11 million [4] Stock Performance - Shares of Merchants Bancorp have declined by 12.4% over the past month, while the Zacks S&P 500 composite decreased by 4.3% [3] - The stock currently holds a Zacks Rank 3 (Hold), indicating potential performance in line with the broader market in the near term [3]

Group 1: Earnings Performance - Merchants Bancorp reported quarterly earnings of $0.93 per share, missing the Zacks Consensus Estimate of $1.25 per share, and down from $1.80 per share a year ago, representing an earnings surprise of -25.60% [1] - The company posted revenues of $145.89 million for the quarter, missing the Zacks Consensus Estimate by 12.66%, and down from $167.93 million year-over-year [2] Group 2: Stock Performance and Outlook - Merchants Bancorp shares have declined approximately 11.1% since the beginning of the year, compared to a decline of -6.1% for the S&P 500 [3] - The current consensus EPS estimate for the upcoming quarter is $1.36 on revenues of $171.38 million, and for the current fiscal year, it is $5.42 on revenues of $692.7 million [7] Group 3: Industry Context - The Banks - Northeast industry, to which Merchants Bancorp belongs, is currently in the top 23% of over 250 Zacks industries, indicating a favorable outlook compared to the bottom 50% [8] - Camden National, another bank in the same industry, is expected to report quarterly earnings of $0.99 per share, reflecting a year-over-year increase of +15.1%, with revenues expected to be $57.16 million, up 37.4% from the previous year [9]

Exhibit 99.1 PRESS RELEASE Merchants Bancorp Reports First Quarter 2025 Results For Release April 28, 2025 · First quarter 2025 net income of $58.2 million, decreased $28.8 million compared to first quarter of 2024 and decreased $37.4 million compared to the fourth quarter 2024, reflecting market uncertainty that delayed origination closings and permanent loan conversions in a growing pipeline, which negatively impacted the recognition of gain on sale and net interest margin. The decrease in net income was ...

First quarter 2025 net income of $58.2 million, decreased $28.8 million compared to first quarter of 2024 and decreased $37.4 million compared to the fourth quarter 2024, reflecting market uncertainty that delayed origination closings and permanent loan conversions in a growing pipeline, which negatively impacted the recognition of gain on sale and net interest margin. The decrease in net income was also impacted by unfavorable fair market value adjustments to servicing rights and derivatives compared to p ...

Employee Relations and Engagement - As of December 31, 2024, the company had approximately 663 employees, with 388 located in Central Indiana[46] - The company achieved a turnover rate of only 9% in 2024, reflecting positive employee relations[47] - The company was recognized as one of the "Best Places to Work in Indiana" from 2016 to 2023 and as a "Top Workplace" by The Indianapolis Star in 2023 and 2024[47] - The company has established an Employee Stock Ownership Plan (ESOP) to align employee interests with shareholders, contributing 3% of eligible compensation under the 401(k) plan[47] - The company is committed to employee engagement and inclusion initiatives, fostering creativity and innovation[53] Financial Performance - Net income for 2024 reached $320,386, an increase of 14.7% compared to $279,234 in 2023[472] - Total interest income increased to $1,302,720 in 2024, up 20.8% from $1,077,798 in 2023[470] - Net interest income after provision for credit losses was $498,342, reflecting a 22.2% increase from $407,840 in 2023[470] - Noninterest income rose to $148,112, a 29.1% increase compared to $114,668 in 2023[470] - Total noninterest expense increased to $223,812, up 28.2% from $174,601 in 2023[470] - Basic earnings per share for 2024 was $6.32, compared to $5.66 in 2023, representing an increase of 11.6%[470] - Comprehensive income for 2024 was $322,741, an increase from $287,267 in 2023, reflecting an increase of 12.4%[472] Asset and Liability Management - The total assets of Merchants Bancorp as of December 31, 2024, were $18.81 billion, an increase from $16.95 billion in 2023, representing a growth of approximately 10.9%[467] - The loan portfolio totaled $10.4 billion as of December 31, 2024, with an allowance for credit losses (ACL) of $84.4 million, indicating a ratio of approximately 0.81%[460] - Total deposits decreased to $11.92 billion in 2024 from $14.06 billion in 2023, reflecting a decline of about 15.2%[467] - Shareholders' equity increased to $2.24 billion in 2024, up from $1.70 billion in 2023, marking a growth of approximately 31.9%[467] - The total borrowings increased significantly to $4.39 billion in 2024 from $964.1 million in 2023, reflecting a rise of approximately 355.5%[467] Regulatory Environment - The company is subject to extensive regulation under federal and state laws, impacting its growth and earnings performance[56] - The company has been continuously monitored since exceeding $10 billion in total assets, affecting its operations and results[58] - Merchants Bank was categorized as "well capitalized" as of December 31, 2024, meeting all regulatory capital requirements[86] - The bank's total risk-based capital ratio is at least 10.5%, with a Tier 1 risk-based capital ratio of at least 8.5% under Basel III standards[85] - The Dodd-Frank Act has imposed more stringent capital requirements on bank holding companies, affecting operational practices and potential revenue[99] Interest Rate Risk Management - Interest rate risk management is a priority, with the objective to limit changes in net interest income to 20% for +/- 100 basis points and 30% for +/- 200 basis points[447] - As of December 31, 2024, the projected dollar change in net interest income sensitivity for a +200 basis point shift is $68,263, reflecting a 13.1% increase[447] - The Economic Value of Equity (EVE) is projected to decrease by $2,990 for a +200 basis point shift in interest rates as of December 31, 2024[449] - The company’s Asset-Liability Committee meets quarterly to monitor interest rate risk sensitivity and ensure compliance with board-approved limits[442] - The company has identified two primary sources of market risk: interest rate risk and price risk related to market demand[439] Mortgage and Loan Operations - The company reported a significant increase in mortgage loans in process of securitization, rising to $428.2 million in 2024 from $110.6 million in 2023[467] - Provision for credit losses decreased to $24,278 in 2024 from $40,231 in 2023, a reduction of 39.7%[470] - The company recognizes gains on loan sales in noninterest income, which may include placement and origination fees, capitalized servicing rights, and trading gains[505] - The Company holds mortgage loans at the lower of cost or fair value, with net unrealized losses recognized through a valuation allowance included in noninterest income[504] Compliance and Legal Matters - The company must comply with various federal consumer protection laws, including the Fair Debt Collection Practices Act and the Truth in Lending Act, which regulate consumer interactions and disclosures[110] - The company does not anticipate significant operational impacts from the CFPB's rules, aside from increased compliance costs[105] - The company has emphasized the importance of maintaining strong internal controls over financial reporting as of December 31, 2024, to ensure compliance and accuracy[455] Cash Flow and Financing Activities - Net cash used in operating activities was $(835,278) in 2024, compared to $(356,402) in 2023, indicating a decline in cash flow from operations[1] - The company reported a net cash provided by financing activities of $1,601,741 in 2024, down from $3,974,741 in 2023[1] - Cash and cash equivalents at the end of the period decreased to $476,610 in 2024 from $584,422 in 2023, a decline of 18.4%[1] Tax and Accounting Policies - The Company adopted the Current Expected Credit Loss (CECL) model on January 1, 2022, which replaced the previous standard for measuring credit losses[514] - The Company recognizes interest and penalties related to uncertain tax positions as other noninterest expense[545] - The updates in FASB ASU 2023-09 regarding income tax disclosures will be effective for annual periods beginning after December 15, 2024[558]

Core Insights - Merchants Bancorp (MBIN) reported a revenue of $193.77 million for the quarter ended December 2024, marking a 22% increase year-over-year, with an EPS of $1.85 compared to $1.58 in the same quarter last year [1] - The revenue exceeded the Zacks Consensus Estimate of $159.8 million by 21.26%, and the EPS surpassed the consensus estimate of $1.27 by 45.67% [1] Financial Performance Metrics - Net interest margin was reported at 3%, above the average estimate of 2.9% from three analysts [4] - Average earning assets totaled $17.89 billion, slightly higher than the $17.76 billion average estimate from three analysts [4] - Total capital/risk-weighted assets ratio was 13.6%, exceeding the average estimate of 11.5% from two analysts [4] - Tier I capital/risk-weighted assets ratio stood at 13%, above the average estimate of 11.1% from two analysts [4] - Loan servicing fees (costs), net, were $14.95 million, significantly higher than the average estimate of $6.60 million from three analysts [4] - Syndication and asset management fees reached $9.32 million, compared to the average estimate of $3.12 million from three analysts [4] - Other income was reported at $8.44 million, exceeding the average estimate of $4.77 million from three analysts [4] - Total noninterest income was $59.15 million, far surpassing the average estimate of $28.96 million from three analysts [4] - Gain on sale of loans was $25.02 million, compared to the average estimate of $12.83 million from three analysts [4] - Net interest income was reported at $134.62 million, above the average estimate of $131.17 million from three analysts [4] Stock Performance - Shares of Merchants Bancorp have returned +11.1% over the past month, outperforming the Zacks S&P 500 composite's +0.8% change [3] - The stock currently holds a Zacks Rank 5 (Strong Sell), indicating potential underperformance in the near term [3]

Core Viewpoint - Merchants Bancorp (MBIN) reported quarterly earnings of $1.85 per share, significantly exceeding the Zacks Consensus Estimate of $1.27 per share, marking a 45.67% earnings surprise [1][2] Financial Performance - The company achieved revenues of $193.77 million for the quarter ended December 2024, surpassing the Zacks Consensus Estimate by 21.26%, compared to $158.78 million in the same quarter last year [2] - Over the last four quarters, Merchants Bancorp has exceeded consensus EPS estimates two times and revenue estimates two times [2] Stock Performance - Merchants Bancorp shares have increased approximately 11% since the beginning of the year, outperforming the S&P 500's gain of 2.2% [3] Future Outlook - The current consensus EPS estimate for the upcoming quarter is $1.16 on revenues of $157.34 million, and for the current fiscal year, it is $5.17 on revenues of $655.2 million [7] - The estimate revisions trend for Merchants Bancorp is currently unfavorable, resulting in a Zacks Rank 5 (Strong Sell), indicating expected underperformance in the near future [6] Industry Context - The Banks - Northeast industry, to which Merchants Bancorp belongs, is currently ranked in the top 9% of over 250 Zacks industries, suggesting a favorable outlook compared to lower-ranked industries [8]

Financial Performance - Full year 2024 net income reached $320.4 million, a 15% increase compared to 2023[1] - Fourth quarter 2024 net income was $95.7 million, up 23% from the fourth quarter of 2023 and 56% from the third quarter of 2024[2] - Net income for Q4 2024 reached $95,666, representing a 56% increase from Q3 2024 and a 23% increase from Q4 2023[47] - Net income available to common shareholders for the twelve months ended December 31, 2024, was $283,654,000, reflecting a 16% increase compared to $244,564,000 in 2023[56] - Total net income for the three months ended December 31, 2024, was $95,666 thousand, an increase from $61,273 thousand in the previous quarter[60] Assets and Liabilities - Total assets increased to $18.8 billion, an 11% rise compared to December 31, 2023[1] - Total assets increased to $18,805,732 thousand as of December 31, 2024, up from $16,952,516 thousand a year earlier, representing a growth of 10.9%[44] - Total liabilities decreased slightly to $16,562,422 thousand from $15,251,432 thousand, indicating a year-over-year increase of 8.6%[44] - Shareholders' equity increased to $2,243,310 thousand, up from $1,701,084 thousand, marking a growth of 31.9% year-over-year[45] Deposits and Loans - Core deposits increased by $1.3 billion to $9.4 billion compared to December 31, 2023, while brokered deposits decreased by $3.4 billion to $2.5 billion[1] - Total deposits decreased to $11,919,976 thousand from $14,061,460 thousand, a decline of 15.3% compared to the previous year[44] - Non-performing loans increased to $279.7 million, or 2.68% of gross loans receivable, compared to 0.80% as of December 31, 2023[12] - Loans receivable, net of allowance, increased to $10,354,002 thousand as of December 31, 2024, from $10,261,890 thousand in the previous quarter[62] Income and Expenses - Noninterest income for the fourth quarter of 2024 increased by $24.7 million, or 72%, primarily driven by higher loan servicing fees and gains on loan sales[4] - Noninterest Expense increased by $10.6 million, or 20%, to $63.2 million, primarily due to higher salaries and a 61% increase in deposit insurance expenses[30] - Net Interest Income rose by $1.8 million, or 1%, to $134.6 million, driven by higher average balances on borrowings at lower interest rates[32] - Total interest income for Q4 2024 was $321,346, a decrease of 5% from Q3 2024 but an increase of 3% from Q4 2023[47] - Total interest expense decreased to $186,722 in Q4 2024, down 9% from Q3 2024[47] Efficiency and Ratios - The efficiency ratio improved to 32.62%, a decrease of 838 basis points compared to 41.00%[38] - Return on average tangible common shareholders' equity for the twelve months ended December 31, 2024, was 20.16%, down 276 basis points from 22.92% in 2023[56] - Efficiency ratio for the twelve months ended December 31, 2024, was 33.37%, an increase of 234 basis points from 31.03% in 2023[55] Other Key Metrics - Tangible book value per common share reached $34.15, a 25% increase from $27.40 in the fourth quarter of 2023[1] - Noninterest income surged to $59,145 in Q4 2024, a 253% increase from Q3 2024 and a 72% increase from Q4 2023[51] - Provision for credit losses significantly decreased by 61% to $2,689 in Q4 2024 compared to Q3 2024[47] - The company executed a credit default swap on a $1.2 billion pool of warehouse loans to reduce risk-based capital requirements[5]

Summary of Merchants Bancorp Earnings Outlook Core Viewpoint - Wall Street anticipates a year-over-year decline in earnings for Merchants Bancorp despite an increase in revenues, with actual results being crucial for stock price movement [1][2]. Financial Expectations - The expected quarterly earnings per share (EPS) for Merchants Bancorp is $1.27, reflecting a year-over-year decrease of 19.6% [3]. - Revenues are projected to be $159.8 million, which is a slight increase of 0.6% compared to the same quarter last year [3]. Estimate Revisions - The consensus EPS estimate has been revised down by 8.16% over the last 30 days, indicating a reassessment by analysts [4]. - The Most Accurate Estimate for Merchants Bancorp is higher than the Zacks Consensus Estimate, resulting in a positive Earnings ESP of +3.28% [10][11]. Earnings Surprise Prediction - The Zacks Earnings ESP model suggests that a positive reading indicates a potential earnings beat, particularly when combined with a strong Zacks Rank [8]. - However, Merchants Bancorp currently holds a Zacks Rank of 5, complicating the prediction of an earnings beat despite the positive Earnings ESP [11]. Historical Performance - In the last reported quarter, Merchants Bancorp was expected to post earnings of $1.42 per share but only achieved $1.17, resulting in a surprise of -17.61% [12]. - Over the past four quarters, the company has beaten consensus EPS estimates twice [13]. Conclusion - While the company does not appear to be a strong candidate for an earnings beat, investors should consider other factors before making investment decisions [16].