CARMEL, Ind., Aug. 1, 2024 /PRNewswire/ -- (Nasdaq: MBIN) Leading financial services provider Merchants Capital today announced the execution of a $543.5 million Credit Risk Transfer (CRT), secured by 41 performing multifamily bridge loans. This is the second multifamily CRT and the third overall completed by Merchants' Capital Markets platform, which has executed nearly $4 billion in securitizations. The transaction, which closed in March, was structured as a Credit Default Swap (CDS), with $76 million in ...

Core Insights - Merchants Bancorp reported revenue of $159.47 million for the quarter ended June 2024, reflecting a year-over-year increase of 17.7% [5] - The reported revenue was a surprise of -0.77% compared to the Zacks Consensus Estimate of $160.7 million, with an EPS of $1.49, which was -5.10% below the consensus estimate of $1.57 [1][5] Financial Metrics - Efficiency Ratio stood at 31.6%, slightly better than the average estimate of 31.7% [3] - Average Earning Assets were reported at $17.22 billion, compared to the estimated $17.33 billion [3] - Net interest margin was 3%, below the estimated 3.1% [3] - Loan servicing fees were $10.83 million, significantly higher than the estimated $5.50 million [3] - Other income reached $4.60 million, exceeding the average estimate of $3.60 million [3] - Net Interest Income was $128.12 million, lower than the estimated $135.02 million [3] - Syndication and asset management fees were $3.23 million, slightly below the estimated $3.50 million [3] - Gain on Sale of Loans was $11.17 million, above the estimated $10.60 million [3] - Mortgage warehouse fees were $1.52 million, lower than the estimated $1.97 million [3] - Total Noninterest Income was $31.35 million, surpassing the average estimate of $25.67 million [3] Stock Performance - Over the past month, shares of Merchants Bancorp have returned +29.7%, contrasting with the Zacks S&P 500 composite's -0.2% change [4] - The stock currently holds a Zacks Rank 3 (Hold), suggesting it may perform in line with the broader market in the near term [4]

This quarterly report represents an earnings surprise of -5.10%. A quarter ago, it was expected that this bank holding company would post earnings of $1.38 per share when it actually produced earnings of $1.80, delivering a surprise of 30.43%. What's Next for Merchants Bancorp? Ahead of this earnings release, the estimate revisions trend for Merchants Bancorp: mixed. While the magnitude and direction of estimate revisions could change following the company's just-released earnings report, the current status ...

Financial Performance - Net income for Q2 2024 was $76.4 million, an increase of $11.1 million, or 17%, compared to Q2 2023, but a decrease of $10.7 million, or 12%, compared to Q1 2024[24][55]. - Second quarter 2024 diluted earnings per common share were $1.49, a 14% increase compared to Q2 2023, but a 17% decrease from Q1 2024[64]. - Net income for the six months ended June 30, 2024, was $163,447, a 36% increase compared to the same period in 2023[80]. - Net income available to common shareholders increased by 41% to $145,200 thousand compared to $102,922 thousand in the prior year[89]. - Net income available to common shareholders decreased by 15% to $66,813 compared to Q1 2024, but increased by 18% from Q2 2023[78]. Assets and Deposits - Total assets reached $18.2 billion, an increase of $389.8 million, or 2%, from March 31, 2024, and $1.3 billion, or 7%, from December 31, 2023[27][56]. - Total deposits reached $14.9 billion as of June 30, 2024, increasing by $941.4 million, or 7%, from March 31, 2024, and by $855.6 million, or 6%, from December 31, 2023[5]. - As of June 30, 2024, the Company reported total assets of $18.2 billion, with liquid assets totaling $12.6 billion, representing 69% of total assets[58]. - Total assets increased to $18,212,422 thousand as of June 30, 2024, up from $17,822,576 thousand in March 2024, representing a growth of 2.2%[86]. Loans and Credit Quality - Average balances for loans and loans held for sale increased to $14.3 billion, a 20% increase compared to $12.0 billion[14]. - Loans receivable increased by $242.7 million, or 2%, compared to Q1 2024, and by $805.4 million, or 8%, compared to December 31, 2023[67]. - The allowance for credit losses on loans was $81.0 million, an increase of $5.3 million, or 7%, compared to March 31, 2024[28]. - Nonperforming loans totaled $143,452, which is 1.30% of loans receivable, compared to 0.80% in the previous quarter[84]. - The allowance for credit losses on loans increased to $81,028 from $75,712 in the previous quarter[84]. Income and Expenses - Net interest income for Q2 2024 was $128.1 million, an increase of $22.5 million, or 21%, compared to $105.6 million in Q2 2023[11]. - Noninterest expense was $50.4 million, an increase of $6.1 million, or 14%, compared to $44.3 million, driven by higher salaries and employee benefits[45]. - Total noninterest expense increased by 26% to $99,292 thousand compared to $79,092 thousand in the prior year[89]. - Net interest income after provision for credit losses rose by 36% to $240,484 thousand from $176,840 thousand year-over-year[89]. Capital and Equity - Tangible book value per common share reached a record-high of $31.27, increasing 30% compared to $24.14 in Q2 2023[57]. - Total equity increased by 6% to $1,888,147 compared to Q1 2024 and by 21% year-over-year from Q2 2023[78]. - Average tangible common shareholders' equity increased by 10% to $1,367,203 compared to Q1 2024 and by 33% year-over-year from Q2 2023[78]. - The Company completed a common stock offering of 2.4 million shares, resulting in net proceeds of $97.7 million, contributing to an increase in the common equity tier I capital ratio to 8.7%[65]. Efficiency and Ratios - The efficiency ratio improved to 31.59%, a decrease of 112 basis points compared to 32.71%[46]. - The efficiency ratio improved to 31.59% in Q2 2024 from 32.71% in Q2 2023, but increased from 29.13% in Q1 2024[59]. - Return on average tangible common shareholders' equity decreased to 19.55%, down 579 basis points from Q1 2024 and 248 basis points from Q2 2023[78]. - Return on average assets decreased to 1.72% from 2.07% year-over-year[90].

Core Viewpoint - Merchants Bancorp (MBIN) is positioned for growth due to its diversified client base, strong liquidity, capital base, and a solid loan pipeline, alongside initiatives to mitigate interest rate risks [1] Earnings Growth - Merchants Bancorp has experienced earnings growth of 34.32% over the past three to five years, significantly outperforming the industry average of 6.76% [3] - The Zacks Consensus Estimate indicates a year-over-year earnings growth of 13.1% for 2024 [5] - The company has a strong earnings surprise history, surpassing the Zacks Consensus Estimate in each of the last four quarters with an average beat of 18.48% [4] Revenue Strength - Revenues have shown a compound annual growth rate (CAGR) of 35% from 2019 to 2023, driven by growth in both non-interest and net interest income [6] - Net loans and total deposits have also seen a CAGR of 35.4% and 26.6%, respectively, over the same period [6] - The Zacks Consensus Estimate forecasts revenue growth of 16.5% for 2024 and 2.7% for 2025 [8] Strong Balance Sheet - As of March 31, 2024, total cash and cash equivalents were $508.8 million, with other liabilities at $190.5 million, indicating a solid liquidity position [8] - The tier 1 risk-based capital ratio and common equity tier-1 capital ratio were 11.1% and 7.8%, respectively, both exceeding regulatory requirements [9] Valuation Metrics - MBIN's price-to-cash-flow and price-to-earnings (F1) ratios are 5.99 and 6.13, respectively, which are below the industry averages of 7.83 and 9.96, suggesting the stock is undervalued compared to peers [10][11] Return on Equity - The trailing 12-month return on equity (ROE) for Merchants Bancorp is 26.65%, significantly higher than the industry average of 8.61%, indicating effective utilization of shareholders' funds [11]

Understanding Hammer Chart and the Technique to Trade It Here's What Makes the Trend Reversal More Likely for MBIN An upward trend in earnings estimate revisions that MBIN has been witnessing lately can certainly be considered a bullish indicator on the fundamental side. That's because empirical research shows that trends in earnings estimate revisions are strongly correlated with near-term stock price movements. The formation of a hammer pattern is considered a technical indication of nearing a bottom with ...

CARMEL, Ind., May 16, 2024 /PRNewswire/ -- Merchants Bancorp ("Merchants") (Nasdaq: MBIN), parent company and registered bank holding company of Merchants Bank of Indiana ("Merchants Bank"), today announced that its Board of Directors declared the following quarterly cash dividends for the second quarter of 2024, in each case to shareholders of record on June 14, 2024, payable on July 1, 2024: A dividend of $0.09 per share on the Company's outstanding shares of its common stock (NASDAQ:MBIN); A dividend of ...

CARMEL, Ind., May 13, 2024 /PRNewswire/ -- Merchants Bancorp (Nasdaq: MBIN) ("Merchants" or the "Company"), a holding company that operates through its wholly owned banking subsidiary, Merchants Bank of Indiana (the "Bank"), announced today the pricing of the previously announced underwritten public offering of 2,400,000 shares of its common stock, without par value, at a public offering price of $43.00 per share. The expected proceeds to the Company, after deducting underwriting discounts and commissions b ...

PART I – FINANCIAL INFORMATION [Item 1. Interim Financial Statements (Unaudited)](index=4&type=section&id=Item%201%20Interim%20Financial%20Statements%20(Unaudited)) This section presents the unaudited condensed consolidated financial statements for the period ending March 31, 2024 [Condensed Consolidated Balance Sheets](index=4&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) Total assets grew to $17.82 billion, driven by increases in loans, while liabilities rose due to higher borrowings Condensed Consolidated Balance Sheet Highlights (in thousands) | Account | March 31, 2024 | December 31, 2023 | | :--- | :--- | :--- | | **Total Assets** | **$17,822,576** | **$16,952,516** | | Cash and cash equivalents | $508,755 | $584,422 | | Loans held for sale | $3,503,131 | $3,144,756 | | Loans receivable, net | $10,690,513 | $10,127,801 | | **Total Liabilities** | **$16,046,108** | **$15,251,432** | | Total deposits | $13,975,661 | $14,061,460 | | Borrowings | $1,835,985 | $964,127 | | **Total Shareholders' Equity** | **$1,776,468** | **$1,701,084** | [Condensed Consolidated Statements of Income](index=6&type=section&id=Condensed%20Consolidated%20Statements%20of%20Income) Net income increased to $87.1 million for the quarter, driven by growth in both net interest and noninterest income Condensed Consolidated Statements of Income Highlights (in thousands, except per share data) | Metric | Three Months Ended March 31, 2024 | Three Months Ended March 31, 2023 | | :--- | :--- | :--- | | Total Interest Income | $314,173 | $211,294 | | Total Interest Expense | $187,117 | $110,601 | | **Net Interest Income** | **$127,056** | **$100,693** | | Provision for credit losses | $4,726 | $6,867 | | Total Noninterest Income | $40,874 | $14,264 | | Total Noninterest Expense | $48,912 | $34,772 | | **Net Income** | **$87,054** | **$54,955** | | **Diluted Earnings Per Share** | **$1.80** | **$1.07** | [Notes to Condensed Consolidated Financial Statements](index=11&type=section&id=Notes%20to%20Condensed%20Consolidated%20Financial%20Statements) Notes detail key events including a branch sale, loan portfolio composition, and the redemption of Series A Preferred Stock - On January 26, 2024, the company completed the sale of its Farmers-Merchants Bank of Illinois branches, selling approximately **$60.8 million in assets** and **$230.6 million in liabilities**, recognizing a **net gain of $715,000**[20](index=20&type=chunk)[21](index=21&type=chunk)[22](index=22&type=chunk) - The Allowance for Credit Losses on Loans (ACL-Loans) increased to **$75.7 million** at March 31, 2024, from $71.8 million at year-end 2023[82](index=82&type=chunk) - The company redeemed all outstanding shares of its **7% Series A Preferred Stock** on April 1, 2024, at its liquidation preference of **$25.00 per share**[196](index=196&type=chunk)[214](index=214&type=chunk) Loan Portfolio Summary (in thousands) | Loan Category | March 31, 2024 | December 31, 2023 | | :--- | :--- | :--- | | Mortgage warehouse repurchase agreements | $1,142,994 | $752,468 | | Residential real estate | $1,321,300 | $1,324,305 | | Multi-family financing | $4,096,606 | $4,006,160 | | Healthcare financing | $2,464,685 | $2,356,689 | | Commercial and commercial real estate | $1,666,751 | $1,643,081 | | **Total Loans** | **$10,766,225** | **$10,199,553** | [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=63&type=section&id=Item%202%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management analyzes Q1 2024 performance, highlighting significant net income growth, balance sheet expansion, and strong liquidity - **Net income for Q1 2024 was $87.1 million**, a **58% increase** from Q1 2023, driven by a $26.4 million increase in net interest income and a $17.0 million increase in loan servicing fees[226](index=226&type=chunk)[267](index=267&type=chunk) - **Total assets reached $17.8 billion**, a **5% increase** from December 31, 2023, primarily due to growth in warehouse, healthcare, and multi-family loan portfolios[235](index=235&type=chunk) - The company maintains strong liquidity with **$10.9 billion in liquid assets** and unused borrowing capacity, representing **61% of total assets**[311](index=311&type=chunk)[312](index=312&type=chunk) - **Nonperforming loans increased to $131.8 million**, or **1.22% of loans receivable**, up from 0.80% at year-end 2023, attributed to three specific customers[263](index=263&type=chunk) [Financial Condition](index=65&type=section&id=Financial%20Condition) Total assets grew 5% to $17.8 billion, funded by a 6% increase in loans and a 90% surge in borrowings - The increase in net loans was driven by a **$390.5 million (52%) rise** in mortgage warehouse repurchase agreements and growth in healthcare and multi-family financing[244](index=244&type=chunk)[245](index=245&type=chunk)[248](index=248&type=chunk) - The significant increase in borrowings was primarily due to a **$654.9 million rise in FHLB advances** and new borrowings used as a liquidity management alternative[260](index=260&type=chunk) Key Balance Sheet Changes (Q1 2024 vs YE 2023) | Account | Change ($M) | Change (%) | | :--- | :--- | :--- | | Total Assets | +$870.1 | +5% | | Loans Receivable, Net | +$562.7 | +6% | | Loans Held for Sale | +$358.4 | +11% | | Deposits | -$85.8 | -1% | | Borrowings | +$871.9 | +90% | | Shareholders' Equity | +$75.4 | +4% | [Results of Operations](index=68&type=section&id=Results%20of%20Operations) Q1 2024 net income rose 58% year-over-year, fueled by a 26% increase in net interest income and a 187% surge in noninterest income - The significant increase in noninterest income was primarily driven by a **$17.0 million rise in loan servicing fees**, which included a **$14.0 million positive fair market value adjustment** on servicing rights[290](index=290&type=chunk)[291](index=291&type=chunk) - The **41% increase in noninterest expense** was mainly due to a **$7.5 million rise in salaries and benefits** from higher production commissions and a **$2.9 million increase in FDIC deposit insurance expenses**[293](index=293&type=chunk) Key Operating Results (Q1 2024 vs Q1 2023) | Metric | Q1 2024 | Q1 2023 | Change (%) | | :--- | :--- | :--- | :--- | | Net Interest Income | $127.1M | $100.7M | +26% | | Net Interest Margin | 3.14% | 3.27% | -13 bps | | Provision for Credit Losses | $4.7M | $6.9M | -31% | | Noninterest Income | $40.9M | $14.3M | +187% | | Noninterest Expense | $48.9M | $34.8M | +41% | | Net Income | $87.1M | $55.0M | +58% | [Segment Performance](index=75&type=section&id=Segment%20Performance) All business segments reported significant year-over-year net income growth, led by mortgage banking and warehousing - The Multi-family Mortgage Banking segment's performance was boosted by a **$13.2 million positive fair value adjustment** on servicing rights in Q1 2024[303](index=303&type=chunk) - The Mortgage Warehousing segment's loan volume **grew 46% to $7.9 billion**, significantly outperforming the 13% industry average increase[305](index=305&type=chunk) Net Income by Segment (in thousands) | Segment | Q1 2024 | Q1 2023 | Change (%) | | :--- | :--- | :--- | :--- | | Multi-family Mortgage Banking | $16,609 | $1,966 | +745% | | Mortgage Warehousing | $20,190 | $8,641 | +134% | | Banking | $56,425 | $49,307 | +14% | | **Total Net Income** | **$87,054** | **$54,955** | **+58%** | [Item 3. Quantitative and Qualitative Disclosures About Market Risk](index=84&type=section&id=Item%203%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) The company manages interest rate risk using NII and EVE models, with all simulations remaining within policy limits - The company's strategy to mitigate interest rate risk involves originating fixed-rate loans for sale while retaining adjustable-rate loans for investment[344](index=344&type=chunk) Net Interest Income (NII) Sensitivity at March 31, 2024 | Rate Change (bps) | Dollar Change ($ thousands) | Percent Change | | :--- | :--- | :--- | | +200 | $56,508 | +10.9% | | +100 | $29,134 | +5.6% | | -100 | $(37,381) | -7.2% | | -200 | $(75,217) | -14.5% | Economic Value of Equity (EVE) Sensitivity at March 31, 2024 | Rate Change (bps) | Dollar Change ($ thousands) | Percent Change | | :--- | :--- | :--- | | +200 | $(77,259) | -4.6% | | +100 | $(31,781) | -1.9% | | -100 | $90,058 | +5.3% | | -200 | $173,967 | +10.2% | [Item 4. Controls and Procedures](index=87&type=section&id=Item%204%20Controls%20and%20Procedures) Management concluded that disclosure controls and procedures were effective with no material changes to internal controls - The CEO and CFO concluded that the company's disclosure controls and procedures were **effective** as of the end of the period covered by the report[358](index=358&type=chunk) - **No changes** in internal control over financial reporting occurred during the quarter that materially affected, or are reasonably likely to materially affect, the company's internal controls[359](index=359&type=chunk) PART II – OTHER INFORMATION [Item 1. Legal Proceedings](index=88&type=section&id=Item%201%20Legal%20Proceedings) No material legal proceedings were reported during the period - None[362](index=362&type=chunk) [Item 1A. Risk Factors](index=88&type=section&id=Item%201A%20Risk%20Factors) No material changes were made to the risk factors disclosed in the 2023 Annual Report on Form 10-K - No material changes from the risk factors disclosed in the Annual Report on Form 10-K for the year ended December 31, 2023[363](index=363&type=chunk) [Item 2. Unregistered Sales of Equity Securities and Use of Proceeds](index=88&type=section&id=Item%202%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) No unregistered sales of equity securities or use of proceeds occurred during the period - None[364](index=364&type=chunk) [Item 5. Other Information](index=88&type=section&id=Item%205%20Other%20Information) No other material information was required to be disclosed for the period - None[367](index=367&type=chunk) [Item 6. Exhibits](index=89&type=section&id=Item%206%20Exhibits) This section lists all exhibits filed with the Form 10-Q, including required CEO and CFO certifications - The report includes CEO and CFO certifications under Sections 302 and 906 of the Sarbanes-Oxley Act, along with XBRL interactive data files[369](index=369&type=chunk)

Merchants Bancorp (MBIN) could be a solid addition to your portfolio given a notable revision in the company's earnings estimates. While the stock has been gaining lately, the trend might continue since its earnings outlook is still improving.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 trends in earnings es ...