Merchants Bancorp(US:MBIN)2025-07-28 20:29Financial Performance - Second quarter 2025 net income was $38.0 million, a decrease of 50% compared to $76.4 million in the second quarter of 2024, and a decrease of 35% compared to $58.2 million in the first quarter of 2025[2][4] - Net income for Q2 2025 decreased to $37,981,000, down 35% from Q1 2025 and down 50% from Q2 2024[45] - Net income for the six months ended June 30, 2025, was $96,220, a decrease of 41% compared to $163,447 in 2024[56] - Net income available to common shareholders fell by 52% to $70,318,000 from $145,200,000 year-over-year[47] - Basic earnings per share for Q2 2025 was $0.60, down 35% from Q1 2025 and down 60% from Q2 2024[45] - Basic earnings per share decreased by 54% to $1.53 from $3.30 year-over-year[47] Credit Losses and Provisions - The provision for credit losses increased by $43.1 million, or 432%, compared to the second quarter of 2024, primarily due to estimated declines in multi-family property values and ongoing investigations into mortgage fraud[4][5] - Provision for credit losses surged to $53,027,000, reflecting a 586% increase from Q1 2025 and a 432% increase from Q2 2024[45] - The allowance for credit losses on loans increased to $91,811 as of June 30, 2025, from $83,413 as of March 31, 2025, marking a rise of 10.5%[64] - Charge-offs year-to-date were reported at $56,570 as of June 30, 2025, compared to $10,507 for the same period in the previous quarter[64] Asset and Deposit Growth - Total assets increased to $19.1 billion, a 2% increase compared to March 31, 2025, and December 31, 2024[7][15] - Total assets as of June 30, 2025, were $19,141,204, with the banking segment accounting for 60% of total assets[60] - Total deposits rose to $12,686,835 million, an increase of 2.27% from $12,406,165 million in the prior quarter[42] - Total deposits reached $12,686,835 as of June 30, 2025, compared to $12,406,165 as of March 31, 2025, reflecting an increase of 2.3%[66] - Core deposits rose to $11.4 billion, a 7% increase from March 31, 2025, and a 22% increase from December 31, 2024, representing 90% of total deposits[16] - Total core deposits reached $11,432,356 as of June 30, 2025, an increase from $10,687,765 as of March 31, 2025, representing a growth of 6.9%[66] Income and Expense Analysis - Noninterest income increased by $19.1 million, or 61%, driven by a robust gain on sale of loans reaching $23.3 million[4][27] - Total noninterest income rose to $50,480,000, a 113% increase compared to Q1 2025 and a 61% increase compared to Q2 2024[45] - Noninterest Expense increased by $15.7 million, or 25%, to $77.3 million, primarily due to higher salaries and employee benefits[36] - Total noninterest expense increased to $77,337,000, a 25% rise from Q1 2025 and a 54% rise from Q2 2024[45] Loan and Interest Metrics - Average balances of loans and loans held for sale increased by 8% to $14.8 billion compared to $13.8 billion[34] - Interest Income rose by $17.2 million, or 6%, to $304.4 million, primarily due to increased average balances at lower yields on loans[32] - Net Interest Income increased by $6.5 million, or 5%, to $128.7 million compared to $122.2 million, driven by higher average balances on loans[31] - Gain on sale of loans increased by $12.2 million, or 109%, reflecting higher volume in the multi-family loan portfolio[37] - Total interest income for Q2 2025 was $304,399,000, a 6% increase from Q1 2025 but a 7% decrease from Q2 2024[45] - Total interest expense was $175,680,000, a 6% increase from Q1 2025 but a 12% decrease from Q2 2024[45] Equity and Valuation - Tangible book value per common share reached a record-high of $35.42, an increase of 13% from $31.27 in the second quarter of 2024[1] - Shareholders' equity increased to $2,184,632 million, up from $2,160,735 million, reflecting a growth of 1.10%[42] - Average shareholders' equity increased by 22% to $2,181,117 from $1,786,195[56] - Return on average tangible common shareholders' equity dropped by 1,362 basis points to 8.68% from 22.30% year-over-year[55]