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 September 30, 2023 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) ...

PART I – FINANCIAL INFORMATION [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 periods ended June 30, 2023 [Condensed Consolidated Balance Sheets](index=4&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) Total assets grew to $15.9 billion, driven by increases in loans and funded by a significant rise in total deposits **Condensed Consolidated Balance Sheets (in thousands)** | | June 30, 2023 | December 31, 2022 | | :--- | :--- | :--- | | **Total assets** | **$ 15,874,872** | **$ 12,615,227** | | Cash and cash equivalents | $ 377,310 | $ 226,164 | | Loans held for sale | $ 3,058,013 | $ 2,910,576 | | Loans receivable, net | $ 9,854,018 | $ 7,426,858 | | **Total liabilities** | **$ 14,314,572** | **$ 11,155,488** | | Total deposits | $ 13,059,864 | $ 10,071,345 | | Borrowings | $ 1,016,836 | $ 930,392 | | **Total shareholders' equity** | **$ 1,560,300** | **$ 1,459,739** | [Condensed Consolidated Statements of Income](index=5&type=section&id=Condensed%20Consolidated%20Statements%20of%20Income) Net income rose for Q2 and the six-month period, driven by higher net interest income despite increased credit loss provisions **Financial Performance Summary (in thousands, except per share data)** | | Three Months Ended June 30, 2023 | Three Months Ended June 30, 2022 | Six Months Ended June 30, 2023 | Six Months Ended June 30, 2022 | | :--- | :--- | :--- | :--- | :--- | | Net Interest Income | $ 105,617 | $ 72,031 | $ 206,310 | $ 137,756 | | Provision for credit losses | $ 22,603 | $ 6,212 | $ 29,470 | $ 8,663 | | Total noninterest income | $ 29,882 | $ 39,171 | $ 44,146 | $ 73,768 | | Total noninterest expense | $ 44,320 | $ 32,957 | $ 79,092 | $ 63,990 | | **Net Income** | **$ 65,302** | **$ 53,935** | **$ 120,257** | **$ 104,077** | | **Diluted Earnings Per Share** | **$ 1.31** | **$ 1.11** | **$ 2.38** | **$ 2.14** | [Condensed Consolidated Statements of Comprehensive Income](index=6&type=section&id=Condensed%20Consolidated%20Statements%20of%20Comprehensive%20Income) Comprehensive income increased year-over-year, primarily due to higher net income and smaller other comprehensive losses **Comprehensive Income (in thousands)** | | Three Months Ended June 30, 2023 | Three Months Ended June 30, 2022 | Six Months Ended June 30, 2023 | Six Months Ended June 30, 2022 | | :--- | :--- | :--- | :--- | :--- | | Net Income | $ 65,302 | $ 53,935 | $120,257 | $104,077 | | Other comprehensive income (loss) | 693 | (1,766) | 3,485 | (6,616) | | **Comprehensive Income** | **$ 65,995** | **$ 52,169** | **$123,742** | **$ 97,461** | [Condensed Consolidated Statements of Cash Flows](index=8&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) Cash from financing activities increased significantly, offsetting cash used in operating and investing activities **Cash Flow Summary (in thousands)** | | Six Months Ended June 30, 2023 | Six Months Ended June 30, 2022 | | :--- | :--- | :--- | | Net cash (used in) provided by operating activities | $ (543,020) | $ 874,775 | | Net cash used in investing activities | $ (2,356,545) | $ (1,351,878) | | Net cash provided by (used in) financing activities | $ 3,050,711 | $ (297,365) | | **Net Change in Cash and Cash Equivalents** | **$ 151,146** | **$ (774,468)** | [Notes to Condensed Consolidated Financial Statements](index=9&type=section&id=Notes%20to%20Condensed%20Consolidated%20Financial%20Statements) This section details accounting policies, segment information, and data composition for the financial statements - The Company adopted the Current Expected Credit Losses (CECL) standard on January 1, 2022, which resulted in a **$3.6 million decrease to retained earnings**, net of taxes[28](index=28&type=chunk)[30](index=30&type=chunk) - The company's loan portfolio is segmented into Mortgage warehouse, Residential real estate, Multi-family, Healthcare, Commercial, Agricultural, and Consumer loans[58](index=58&type=chunk)[77](index=77&type=chunk) - The company operates in three primary business segments: **Multi-family Mortgage Banking, Mortgage Warehousing, and Banking**[169](index=169&type=chunk) [Management's Discussion and Analysis of Financial Condition and Results of Operations (MD&A)](index=54&type=section&id=Item%202%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management discusses strong growth in net income and assets, driven by increased net interest income [Financial Highlights](index=57&type=section&id=Financial%20Highlights) Q2 2023 net income and total assets grew significantly, supported by strong liquidity and manageable uninsured deposit levels - Net income for Q2 2023 rose **21% YoY to $65.3 million**, with diluted EPS up 18% to $1.31[186](index=186&type=chunk) - Total assets reached **$15.9 billion**, a 26% increase from December 31, 2022[186](index=186&type=chunk) - The company maintained strong liquidity with **$5.3 billion in unused borrowing capacity** and uninsured deposits accounting for less than 20% of total deposits[186](index=186&type=chunk) [Financial Condition](index=58&type=section&id=Financial%20Condition) Asset growth was driven by a $2.4 billion increase in loans receivable, funded by a $3.0 billion rise in deposits - Total assets increased by **$3.3 billion (26%) to $15.9 billion** at June 30, 2023, from December 31, 2022, driven by loan growth[196](index=196&type=chunk) - Loans receivable grew by **$2.4 billion (33%)**, with significant increases in mortgage warehouse lines of credit (+$737.1M), multi-family financing (+$610.8M), and healthcare financing (+$524.0M)[203](index=203&type=chunk)[206](index=206&type=chunk)[207](index=207&type=chunk) - Total deposits increased by **$3.0 billion (30%)**, fueled by a $2.2 billion increase in certificates of deposit, including a $2.0 billion rise in brokered deposits[215](index=215&type=chunk)[217](index=217&type=chunk)[222](index=222&type=chunk) - The Allowance for Credit Losses on Loans (ACL-Loans) increased by **$19.0 million to $63.0 million**, mainly due to loan growth and economic forecasts[208](index=208&type=chunk)[212](index=212&type=chunk) [Asset Quality](index=65&type=section&id=Asset%20Quality) Asset quality metrics showed some deterioration, with an increase in nonperforming loans and net charge-offs - Total nonperforming loans rose to **$68.4 million (0.69% of total loans)** at June 30, 2023, up from $26.7 million (0.36%) at Dec 31, 2022, mainly attributed to 3 customers[225](index=225&type=chunk) - Net charge-offs for Q2 2023 were **$9.5 million**, compared to net recoveries of $604,000 in Q2 2022[227](index=227&type=chunk) - Special Mention (Watch) loans increased to **$188.5 million** from $137.8 million at year-end 2022[227](index=227&type=chunk) [Results of Operations](index=65&type=section&id=Results%20of%20Operations) Net income growth was driven by higher net interest income, partially offset by lower noninterest income and a higher credit provision - For Q2 2023, net income increased **21% YoY to $65.3 million**, driven by a 47% rise in net interest income to $105.6 million[229](index=229&type=chunk)[230](index=230&type=chunk) - The provision for credit losses for Q2 2023 was **$22.6 million**, a significant increase from $6.2 million in Q2 2022, due to loan growth and specific reserves[253](index=253&type=chunk)[256](index=256&type=chunk) - Noninterest income for Q2 2023 decreased **24% to $29.9 million**, mainly due to a $10.2 million (47%) drop in gain on sale of loans[255](index=255&type=chunk) - A tax benefit of **$13.0 million** was recorded in Q2 2023 related to changes in state tax apportionment calculations, reducing the effective tax rate for the quarter to 4.8%[260](index=260&type=chunk)[261](index=261&type=chunk)[262](index=262&type=chunk) [Segment Analysis](index=79&type=section&id=Segment%20Analysis) The Banking and Mortgage Warehousing segments reported strong net income growth, while the Multi-family Mortgage Banking segment declined **Net Income by Segment (in thousands)** | Segment | Q2 2023 | Q2 2022 | YTD 2023 | YTD 2022 | | :--- | :--- | :--- | :--- | :--- | | Multi-family Mortgage Banking | $ 11,242 | $ 19,556 | $ 13,208 | $ 31,048 | | Mortgage Warehousing | $ 18,596 | $ 11,868 | $ 27,237 | $ 25,027 | | Banking | $ 42,650 | $ 25,932 | $ 91,957 | $ 54,696 | | Other | $ (7,186) | $ (3,421) | $ (12,145) | $ (6,694) | | **Total** | **$ 65,302** | **$ 53,935** | **$ 120,257** | **$ 104,077** | - **Multi-family Mortgage Banking:** Net income **fell 43% in Q2 2023** due to a $19.2 million decrease in gain on sale of loans, despite a 64% increase in loan origination volume[304](index=304&type=chunk)[306](index=306&type=chunk) - **Mortgage Warehousing:** Net income **grew 57% in Q2 2023**, driven by a $41.0 million increase in interest income from higher yields and volumes[310](index=310&type=chunk)[312](index=312&type=chunk) - **Banking:** Net income **surged 64% in Q2 2023**, fueled by a $28.6 million increase in net interest income and a $9.0 million increase in gain on sale of loans[315](index=315&type=chunk) [Liquidity and Capital Resources](index=83&type=section&id=Liquidity%20and%20Capital%20Resources) The company maintains a strong liquidity position and capital ratios well above regulatory requirements - At June 30, 2023, the company had **$5.3 billion in unused borrowing capacity** with the FHLB and Federal Reserve[322](index=322&type=chunk) - Uninsured deposits totaled approximately **$2.0 billion**, representing less than 20% of total deposits[324](index=324&type=chunk) - Shareholders' equity increased by **$100.6 million** since year-end 2022 to $1.6 billion, primarily from net income[333](index=333&type=chunk) **Company Capital Ratios as of June 30, 2023** | Ratio | Actual | Minimum for Adequately Capitalized | | :--- | :--- | :--- | | Total capital (to risk-weighted assets) | 11.3 % | 8.0 % | | Tier I capital (to risk-weighted assets) | 10.8 % | 6.0 % | | Common Equity Tier I capital (to risk-weighted assets) | 7.3 % | 4.5 % | | Tier I capital (to average assets) | 10.6 % | 4.0 % | [Quantitative and Qualitative Disclosures About Market Risk](index=92&type=section&id=Item%203%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) The company's primary market risk is interest rate risk, which is managed within established policy limits - The company's primary market risk is **interest rate risk**, arising from timing differences in repricing assets and liabilities[356](index=356&type=chunk) **Net Interest Income (NII) Sensitivity Analysis (June 30, 2023)** | Rate Shock | Dollar Change (in thousands) | Percent Change | | :--- | :--- | :--- | | +200 bps | $ 60,629 | 13.7 % | | +100 bps | $ 32,156 | 7.3 % | | -100 bps | $ (46,622) | (10.5)% | | -200 bps | $ (93,023) | (21.0)% | **Economic Value of Equity (EVE) Sensitivity Analysis (June 30, 2023)** | Rate Shock | Dollar Change (in thousands) | Percent Change | | :--- | :--- | :--- | | +200 bps | $ (23,514) | (1.6)% | | +100 bps | $ (3,703) | (0.3)% | | -100 bps | $ 1,024 | 0.1 % | | -200 bps | $ 1,101 | 0.1 % | [Controls and Procedures](index=94&type=section&id=Item%204%20Controls%20and%20Procedures) Management concluded that disclosure controls and procedures were effective, with no material changes to internal controls - Based on an evaluation by management, the Chief Executive Officer and Chief Financial Officer concluded that the Company's **disclosure controls and procedures were effective** as of June 30, 2023[371](index=371&type=chunk) - **No material changes** in the Company's internal control over financial reporting occurred during the quarter[372](index=372&type=chunk) PART II – OTHER INFORMATION [Legal Proceedings](index=95&type=section&id=Item%201%20Legal%20Proceedings) The company reports no legal proceedings - None[375](index=375&type=chunk) [Risk Factors](index=95&type=section&id=Item%201A%20Risk%20Factors) No material changes to risk factors have been identified since the last annual report - **No material changes** from the risk factors disclosed in the Annual Report on Form 10-K for the year ended December 31, 2022[376](index=376&type=chunk) [Unregistered Sales of Equity Securities and Use of Proceeds](index=95&type=section&id=Item%202%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) The company reports no unregistered sales of equity securities or use of proceeds - None[377](index=377&type=chunk) [Exhibits](index=96&type=section&id=Item%206%20Exhibits) This section lists the exhibits filed with the Form 10-Q, including CEO and CFO certifications - Exhibits filed include **CEO and CFO certifications** under Sarbanes-Oxley Sections 302 and 906, and XBRL interactive data files[380](index=380&type=chunk)

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, 2023 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 ...

OR Table of Contents UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-K [Mark One] ☒ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the fiscal year ended December 31, 2022 ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from _______ to _______ Commission file number 001-38258 MERCHANTS BANCORP (Exact name of Registrant as specified in its charter) | INDIANA | 20-57474 ...