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].

Core Viewpoint - Robbins LLP is investigating Merchants Bancorp for potential violations of securities laws and breaches of fiduciary duties by its officers and directors [1] Group 1: Company Overview - Merchants Bancorp operates as a diversified bank holding company in the United States [1] Group 2: Legal Investigation - The investigation aims to determine if certain officers and directors of Merchants Bancorp have violated securities laws [1] - Shareholders who have lost money in their investment in Merchants Bancorp are encouraged to contact Robbins LLP for more information about their rights [1] Group 3: Robbins LLP Background - Robbins LLP is a recognized leader in shareholder rights litigation, dedicated to helping shareholders recover losses and improve corporate governance since 2002 [3] - The firm has obtained over $1 billion for shareholders since its inception [3]

Group 1 - The article discusses the importance of preferred stocks and their compliance scores, indicating that investors may have varying preferences for securities based on these scores [1] - Future articles will recap new IPOs and interesting preferred stock activities, suggesting ongoing monitoring of market developments [1]

Financial Performance - Net income for Q3 2024 was $61,273, a decrease of 24.8% compared to $81,504 in Q3 2023[9]. - Basic earnings per share for Q3 2024 was $1.17, down from $1.68 in Q3 2023, representing a decline of 30.4%[7]. - Total noninterest income for Q3 2024 was $16,742, a decrease of 53.5% from $36,068 in Q3 2023[7]. - Total noninterest expense increased to $61,318 in Q3 2024, up 42.5% from $42,930 in Q3 2023[7]. - Comprehensive income for Q3 2024 was $61,879, down from $83,786 in Q3 2023, reflecting a decrease of 26.1%[9]. - Net income for the nine months ended September 30, 2024, was $224.72 million, an increase from $201.76 million in the same period of 2023, representing an increase of approximately 11.4%[13]. - Net income available to common shareholders of $198.72 million for 2024, an increase from $175.76 million in 2023[192]. - Diluted earnings per share for 2024 were $4.45, compared to $4.06 in 2023, indicating a growth in profitability[192]. Asset and Liability Management - As of September 30, 2024, total assets increased to $18,652,976, up from $16,952,516 as of December 31, 2023, representing a growth of approximately 10.0%[5]. - Total liabilities increased to $16,713,869 from $15,251,432, representing a rise of about 9.6%[5]. - Total deposits decreased to $12,891,887 from $14,061,460, reflecting a decline of approximately 8.3%[5]. - Total shareholders' equity increased to $1.94 billion as of September 30, 2024, up from $1.63 billion a year earlier, reflecting a growth of approximately 18.8%[12]. - Cash and cash equivalents at the end of the period were $601.91 million, up from $407.24 million in the previous year, marking an increase of approximately 47.7%[13]. Loan Portfolio and Credit Quality - Loans held for sale rose to $3,808,234, compared to $3,144,756 at the end of 2023, indicating an increase of about 21.1%[5]. - Loans receivable totaled $10,261,890 thousand as of September 30, 2024, an increase from $10,127,801 thousand as of December 31, 2023[53]. - The allowance for credit losses on loans (ACL-Loans) increased to $84,549 thousand as of September 30, 2024, from $71,752 thousand as of December 31, 2023[53]. - The total charge-offs for the year were reported as $6,437 thousand, compared to $870 thousand in 2023, showing a significant increase[90]. - The total past due loans amounted to $257,459 thousand as of September 30, 2024, with $30,410 thousand in the 30-59 days past due category[95]. - The company reported a provision for credit losses of $21.6 million for the nine months ended September 30, 2024, which included $19.2 million for ACL-Loans[80]. Capital and Regulatory Compliance - The Company and Merchants Bank were categorized as well capitalized by the Federal Reserve and FDIC as of September 30, 2024, meeting all capital adequacy requirements[127]. - The Company’s total capital to risk-weighted assets ratio was 12.2% as of September 30, 2024, exceeding the minimum requirement of 10.5%[129]. - The Company’s Tier I capital to risk-weighted assets ratio was 11.6% as of September 30, 2024, above the minimum requirement of 8.5%[129]. - The Company’s Common Equity Tier I capital to risk-weighted assets ratio was 8.9% as of September 30, 2024, surpassing the minimum requirement of 7.0%[129]. - The Company’s total capital increased to $2.03 billion as of September 30, 2024, from $1.75 billion on December 31, 2023, reflecting a growth of 16.3%[129]. Securities and Investments - Securities available for sale decreased to $953,063 from $1,113,687, indicating a decline of approximately 14.4%[5]. - The Company reported a net unrealized gain on investment securities available for sale of $606 in Q3 2024, compared to $2,282 in Q3 2023[9]. - The Company recognized a $10.1 million deposit premium and extinguished $7.8 million in goodwill during the first quarter of 2024[21]. - The Company’s low-income housing tax credit investments totaled $147.5 million as of September 30, 2024, compared to $142.4 million on December 31, 2023, reflecting a 3.9% increase[117]. Derivative Instruments and Risk Management - The Company entered into a credit default swap to manage credit risk on multifamily mortgage loans, with collateral of $76.1 million posted by the protection seller[137]. - The Company reported a net loss of $3,196 from derivative instruments in the three months ended September 30, 2024[143]. - The fair value of derivative assets and liabilities related to back-to-back derivatives on behalf of customers was recorded at $723,966 as of September 30, 2024[145]. - The Company pledged $260,000 in collateral to secure its obligations under swap contracts as of September 30, 2024[147]. Shareholder Activities - The Company issued 2,400,000 shares of common stock at a public offering price of $43.00 per share, raising gross proceeds of $103.2 million, with net proceeds of $97.7 million after expenses[193]. - The Company redeemed all outstanding shares of Series A Preferred Stock on April 1, 2024, at a total cost of $52 million[195]. - The Company issued 5,200,000 shares of Series D Preferred Stock, raising gross proceeds of $130.0 million, with net proceeds of $125.4 million after expenses[201].

Core Insights - Merchants Bancorp (MBIN) reported a revenue of $149.56 million for Q3 2024, reflecting a year-over-year decline of 2.6% and an EPS of $1.17, down from $1.68 a year ago [1] - The revenue fell short of the Zacks Consensus Estimate of $156.13 million by 4.21%, while the EPS missed the consensus estimate of $1.42 by 17.61% [1] Financial Performance Metrics - Net interest margin stood at 3%, matching the three-analyst average estimate [3] - Average earning assets were reported at $17.70 billion, slightly above the three-analyst average estimate of $17.62 billion [3] - Total capital/risk-weighted assets ratio was 12.4%, exceeding the two-analyst average estimate of 12.1% [3] - Tier I capital/risk-weighted assets ratio was 11.7%, compared to the 11.6% average estimate from two analysts [3] - Loan servicing fees (costs), net, were -$1.51 million, significantly lower than the $2.94 million estimated by three analysts [3] - Syndication and asset management fees were $1.83 million, below the $3.24 million average estimate [3] - Other income reported was -$1.93 million, compared to the $4.47 million estimated by three analysts [3] - Mortgage warehouse fees were $1.62 million, below the $2.03 million average estimate [3] - Total noninterest income was $16.74 million, significantly lower than the three-analyst average estimate of $24.05 million [3] - Gain on sale of loans was $16.73 million, exceeding the three-analyst average estimate of $11.70 million [3] - Net interest income was reported at $132.82 million, slightly above the three-analyst average estimate of $132.42 million [3] Stock Performance - Shares of Merchants Bancorp have declined by 3.5% over the past month, contrasting with a 2% increase in the Zacks S&P 500 composite [4] - The stock currently holds a Zacks Rank 4 (Sell), indicating potential underperformance relative to the broader market in the near term [4]

Core Viewpoint - Merchants Bancorp reported quarterly earnings of $1.17 per share, missing the Zacks Consensus Estimate of $1.42 per share, and down from $1.68 per share a year ago, indicating a -17.61% earnings surprise [1][2] Financial Performance - The company posted revenues of $149.56 million for the quarter ended September 2024, missing the Zacks Consensus Estimate by 4.21%, and down from $153.5 million year-over-year [2] - Over the last four quarters, Merchants Bancorp has surpassed consensus EPS estimates two times and topped consensus revenue estimates two times [2] Stock Performance - Merchants Bancorp shares have increased by approximately 0.9% since the beginning of the year, while the S&P 500 has gained 21.8% [3] - The current Zacks Rank for the stock is 4 (Sell), indicating expected underperformance in the near future [6] Earnings Outlook - The current consensus EPS estimate for the coming quarter is $1.35 on revenues of $155.1 million, and for the current fiscal year, it is $6.08 on revenues of $638.3 million [7] - The estimate revisions trend for Merchants Bancorp is currently unfavorable, which may impact future stock movements [6] Industry Context - The Banks - Northeast industry, to which Merchants Bancorp belongs, is currently in the top 14% of over 250 Zacks industries, suggesting a favorable industry outlook [8]