Core Viewpoint - Merchants Bancorp will replace TreeHouse Foods in the S&P SmallCap 600 index effective February 11, 2026, due to an acquisition of TreeHouse Foods by Investindustrial S.A. and its affiliates [1]. Group 1: Index Changes - Effective Date: February 11, 2026 - Index Name: S&P SmallCap 600 - Action: Addition of Merchants Bancorp (Ticker: MBIN) in the Financial sector [1]. - Action: Deletion of TreeHouse Foods (Ticker: THS) in the Consumer Staples sector [1].

Merchants Bancorp (MBIN) appears an attractive pick given a noticeable improvement in the company's earnings outlook. The stock has been a strong performer lately, and the momentum might continue with analysts still raising their earnings estimates for the company.The rising trend in estimate revisions, which is a result of growing analyst optimism on the earnings prospects of this bank holding company, should get reflected in its stock price. After all, empirical research shows a strong correlation between ...

Core Insights - Merchants Bancorp (MBIN) reported a revenue of $185.29 million for the quarter ended December 2025, reflecting a decrease of 4.4% year-over-year, while EPS was $1.28 compared to $1.85 in the same quarter last year [1] - The reported revenue exceeded the Zacks Consensus Estimate of $171.87 million by 7.81%, and the EPS surpassed the consensus estimate of $0.94 by 36.17% [1] Financial Performance Metrics - Efficiency Ratio stood at 45.1%, slightly better than the average estimate of 45.6% from three analysts [4] - Net interest margin was reported at 2.9%, above the average estimate of 2.8% from three analysts [4] - Average Earning Assets totaled $18.93 billion, exceeding the average estimate of $18.3 billion from three analysts [4] - Tier I capital/risk-weighted assets Ratio was 13.1%, compared to the estimated 13% by two analysts [4] - Total capital/risk-weighted assets Ratio was 13.6%, slightly below the estimated 13.7% by two analysts [4] - Net Interest Income reached $138.09 million, surpassing the average estimate of $129.39 million from three analysts [4] - Gain on Sale of Loans was $25.73 million, exceeding the average estimate of $24.82 million from three analysts [4] - Total Noninterest Income was reported at $47.2 million, above the average estimate of $42.49 million from three analysts [4] - Other income was $9.76 million, significantly higher than the average estimate of $4.62 million from three analysts [4] Stock Performance - Shares of Merchants Bancorp have returned +4.9% over the past month, outperforming the Zacks S&P 500 composite's +0.8% change [3] - The stock currently holds a Zacks Rank 3 (Hold), indicating potential performance in line with the broader market in the near term [3]

Merchants Bancorp (MBIN) came out with quarterly earnings of $1.28 per share, beating the Zacks Consensus Estimate of $0.94 per share. This compares to earnings of $1.85 per share a year ago. These figures are adjusted for non-recurring items.This quarterly report represents an earnings surprise of +36.17%. A quarter ago, it was expected that this bank holding company would post earnings of $0.79 per share when it actually produced earnings of $0.97, delivering a surprise of +22.78%.Over the last four quart ...

Core Viewpoint - Merchants Bancorp has announced a stock repurchase program of up to $100 million, set to expire on December 31, 2027, aimed at enhancing shareholder value [1]. Group 1: Stock Repurchase Program - The stock repurchase program allows Merchants to buy back shares in the open market or through other means, with management determining the appropriate prices, quantities, and terms [2]. - The program is not mandatory and can be modified, suspended, or discontinued at the discretion of the Board of Directors [2]. - Repurchases will be influenced by various factors, including market conditions and the financial and regulatory status of Merchants [3]. Group 2: Company Overview - Merchants Bancorp is a diversified bank holding company based in Carmel, Indiana, recognized as a top-performing U.S. public bank by S&P Global Market Intelligence [4]. - The company operates multiple segments, including Multi-family Mortgage Banking, Mortgage Warehousing, and traditional community banking, with total assets of $19.4 billion and deposits of $13.0 billion as of December 31, 2025 [4].

Financial Performance - Full year 2025 net income was $218.8 million, a decrease of $101.6 million, or 32%, compared to 2024[1] - Fourth quarter 2025 net income of $67.8 million decreased by $27.8 million, or 29%, compared to Q4 2024[5] - Net income for Q4 2025 was $67,849,000, representing a 24% increase from Q3 2025 but a 29% decrease from Q4 2024[46] - The company reported a net income available to common shareholders of $58,798,000, a 32% increase from Q3 2025 but a 31% decrease from Q4 2024[46] - Net income available to common shareholders fell by 39% to $173,552,000 compared to $283,654,000[48] - Total net income for the year ended December 31, 2025, was $218,770 thousand, a decrease from $320,386 thousand in 2024[60] Asset and Liability Management - Total assets reached a record-high of $19.4 billion, up $643.2 million, or 3%, compared to December 31, 2024[1] - Total assets increased to $19,448,943 million as of December 31, 2025, up from $19,354,647 million in the previous quarter, representing a growth of 0.49%[43] - Total liabilities rose to $17,168,184 million, compared to $17,129,213 million, an increase of 0.23%[43] - Total liabilities increased to $17,547,108 thousand in Q4 2025 from $16,591,488 thousand in Q3 2025[58] Loan Performance - Criticized loans receivable decreased by 13% to $508.2 million compared to September 30, 2025, and by 27% compared to December 31, 2024[10] - Total loan delinquencies fell by 38% to $206.8 million compared to September 30, 2025[14] - Non-performing loans decreased by 34% to $197.8 million, or 1.79% of loans receivable, compared to September 30, 2025[13] - Total loans receivable increased to $11,034,682 million as of December 31, 2025, up from $10,608,551 million in the previous quarter, representing a growth of 4.0%[62] - The net loans receivable after allowance for credit losses was $10,951,381 million, compared to $10,515,221 million as of September 30, 2025, indicating a quarter-over-quarter increase of 4.1%[62] - Nonperforming loans decreased to $197,812 million, down from $298,268 million in the previous quarter, reflecting a reduction of 33.6%[65] Deposit Trends - Deposits grew by 9% in 2025, reaching $13.0 billion, while core deposits increased by 20% to $11.3 billion[1] - Total deposits decreased to $13,041,192 million from $13,934,705 million, a decline of 6.40% quarter-over-quarter[43] - Core demand deposits increased significantly to $604,081 million from $399,814 million in the previous quarter, marking a growth of 51.1%[67] - Total interest-bearing deposits decreased to $12,437,111 million from $13,534,891 million in the previous quarter, a decline of 8.1%[67] Income and Expense Analysis - Noninterest income decreased by $11.9 million, or 20%, to $47.2 million compared to Q4 2024[28] - Noninterest income increased by 11% to $164,388,000 from $148,112,000[55] - Total noninterest expense rose by 34% to $299,893,000 from $223,812,000[55] - Noninterest Expense of $83.6 million increased $6.4 million, or 8%, primarily reflecting a $4.8 million, or 48%, increase in other expenses[37] Equity and Book Value - Tangible book value per common share increased to $37.51, a 10% rise from $34.15 in Q4 2024[1] - Average shareholders' equity increased by 16% to $2,213,449 thousand in 2025 from $1,900,130 thousand in 2024[56] - Common stock issued and outstanding reached 45,893,172 shares, slightly up from 45,889,238 shares[43] - Goodwill remained stable at $8,014 million, unchanged from previous quarters[43] Credit Quality - Provision for credit losses decreased by 5% to $27,761,000 compared to Q3 2025, but increased significantly by 932% compared to Q4 2024[46] - The allowance for credit losses on loans was $83,301 million, down from $93,330 million in the previous quarter, indicating a decrease of 10.8%[62] - The percentage of pass loans improved to 95.4% of total loans receivable, up from 94.5% in the previous quarter[65] - The company reported year-to-date charge-offs of $124,116 million, compared to $86,070 million in the previous year, reflecting an increase of 44.3%[65]

Core Insights - Merchants Bancorp reported a fourth quarter 2025 net income of $67.8 million, a decrease of 29% compared to the same quarter in 2024, but an increase of 24% from the third quarter of 2025 [1][5]. Financial Performance - The company achieved a record tangible book value of $37.51 per share, up 10% from $34.15 in Q4 2024 and 3% from $36.31 in Q3 2025 [4]. - Total assets reached $19.4 billion, marking a 3% increase from $18.8 billion at the end of 2024 [4][6]. - Net interest income for Q4 2025 was $138.1 million, a 3% increase from Q4 2024, driven by lower interest expenses [22][28]. - Noninterest income decreased by 20% to $47.2 million, primarily due to a significant drop in loan servicing fees [26][33]. Asset Quality - Criticized loans decreased by 13% to $508.2 million compared to Q3 2025 and by 27% compared to Q4 2024 [10][12]. - Non-performing loans fell by 34% during the quarter, totaling $197.8 million, or 1.79% of loans receivable [12][13]. - Total delinquent loans decreased by 38% to $206.8 million compared to Q3 2025 [13]. Deposits and Liquidity - Total deposits were $13.0 billion, a 9% increase from the previous year but a 6% decrease from Q3 2025 [15][16]. - Core deposits represented 87% of total deposits, with a 20% increase year-over-year [16]. - The company maintained strong liquidity with $5.3 billion in unused borrowing capacity, representing 27% of total assets [19][20]. Operational Efficiency - Noninterest expenses increased by 32% to $83.6 million, largely due to higher credit risk transfer premiums and employee benefits [27][34]. - The company recorded a significant decrease in provision for credit losses, reflecting improved asset quality [5][31]. Strategic Outlook - The management expressed confidence in the company's growth trajectory for 2026, emphasizing the importance of credit quality improvements and operational performance [2][3].

Group 1 - The focus is on income-producing asset classes such as REITs, ETFs, Preferreds, and 'Dividend Champions' that target premium dividend yields up to 10% [1][2] - The iREIT®+HOYA Capital service aims to provide sustainable portfolio income, diversification, and inflation hedging for investors [2] - The investment research covers various asset classes including REITs, ETFs, closed-end funds, preferreds, and dividend champions, helping investors achieve dependable monthly income [2]

Group 1 - The focus is on income-producing asset classes such as REITs, ETFs, Preferreds, and 'Dividend Champions' that target premium dividend yields up to 10% [1][2] - The iREIT®+HOYA Capital service aims to provide sustainable portfolio income, diversification, and inflation hedging for investors [2] - The investment research covers various asset classes including REITs, ETFs, closed-end funds, preferreds, and dividend champions, helping investors achieve dependable monthly income [2]

Core Thesis - Merchants Bancorp (MBIN) is currently undervalued, trading below book value despite strong historical performance metrics, including a long-term average ROE of 21% and significant growth in BVPS and EPS [2][4] Financial Performance - As of November 26th, MBIN's share price was $32.82, with a trailing P/E of 7.54 [1] - The company has experienced a surge in delinquent loans due to a fraud scheme, but the losses are primarily in government-backed multifamily and healthcare portfolios, which limits long-term damage [2][3] - MBIN continues to generate substantial pre-tax, pre-provision earnings, providing a buffer against losses while remaining profitable [4] Growth Potential - The multifamily segment has shown an impressive 11.6% ROA, which translates into triple-digit ROE when leveraged, driven by gain-on-sale economics [3] - If book value compounds to $60 by 2028 and the market assigns a 1.5x multiple, shares could approach $90, indicating a potential tripling in value over three years [5] Management and Ownership - Founders Michael Petrie and Randall Rogers own approximately 40% of the company and have a strong track record in capital-constrained niches [3] - The potential for a future sale of the company is considered a reasonable upside scenario as the founders near retirement [5] Market Sentiment - Despite the negative sentiment surrounding delinquency headlines, the stock is seen as embedding overly pessimistic assumptions, trading at 0.9x book value and roughly 4-5x normalized earnings [4]