Merchants Bancorp(MBIN) - 2024 Q3 - Quarterly Report

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].