Merchants Bancorp Announces Launch of Common Stock Offering
Merchants Bancorp (Nasdaq: MBIN) announced an underwritten public offering of 2,400,000 shares of its common stock. Morgan Stanley is the lead bookrunning manager, with Piper Sandler and Raymond James as joint bookrunning managers. Merchants Bancorp will use the proceeds to support the balance sheet growth of its banking subsidiary, Merchants Bank of Indiana, and for other general corporate purposes. The offering is made pursuant to a registration statement on Form S-3 (File No. 333-266672) effective since August 17, 2022. The underwriters have a 30-day option to purchase additional shares.
- Public offering of 2,400,000 shares can provide significant capital.
- Morgan Stanley, Piper Sandler, and Raymond James as managers adds credibility.
- Proceeds will support balance sheet growth and general corporate purposes, indicating a strategic expansion.
- Dilution risk for existing shareholders due to the increase in the number of shares.
- Uncertainty in market reaction to the new stock issuance.
- Potential downward pressure on the stock price due to the increased supply of shares.
Insights
The announcement of Merchants Bancorp’s common stock offering presents a significant event for both the company and its investors. By issuing 2,400,000 shares, the company aims to raise capital for general corporate purposes, which includes bolstering the balance sheet of Merchants Bank of Indiana. This move suggests that the bank is looking to strengthen its financial position, possibly in anticipation of future growth opportunities or to cushion against potential economic uncertainties.
From a financial perspective, a common stock offering can dilute existing shareholders' equity, which might initially have a negative impact on the stock price. However, if the funds raised are invested wisely and lead to successful growth and expansion, the long-term impact could be positive. Investors should closely watch how the company plans to deploy the new capital and monitor any changes in key financial metrics such as earnings per share (EPS) and return on equity (ROE).
Given that Morgan Stanley, Piper Sandler and Raymond James are managing the offering, this adds a layer of credibility and suggests strong institutional support. Retail investors should consider both the immediate dilution risk and the potential for long-term value creation.
From a market perspective, launching a public offering could be seen as a strategic move to take advantage of current market conditions. Merchants Bancorp’s decision to use the proceeds for general corporate purposes indicates a flexible approach that could be directed towards various growth initiatives, including expanding loan portfolios or investing in new technology. This flexibility can be advantageous, allowing the company to adapt to changing market dynamics.
The involvement of reputable underwriters like Morgan Stanley, Piper Sandler and Raymond James will likely provide confidence to potential investors. It’s important to note that the market’s reception to this offering will depend heavily on the current investor sentiment and overall market conditions at the time of the offering.
For retail investors, understanding the macroeconomic environment, such as interest rates and economic growth projections, will be essential in evaluating the potential success of this stock offering. Adverse market conditions could dampen investor enthusiasm, whereas a stable or bullish market could enhance the offering's reception.
Morgan Stanley is serving as the lead bookrunning manager, and Piper Sandler and Raymond James are serving as joint bookrunning managers for the offering.
The Company intends to use the net proceeds of this offering of common stock for general corporate purposes including to support balance sheet growth of the Bank.
Additional Information Regarding the Offering
The offering of common stock is being made pursuant to a registration statement on Form S-3 (File No. 333-266672) that was declared effective by the Securities and Exchange Commission (the "SEC") on August 17, 2022. A preliminary prospectus supplement to which this communication relates has been filed with the SEC. Prospective investors should read the preliminary prospectus supplement and the accompanying prospectus and other documents the Company has filed with the SEC for more complete information about the Company and the offering. Copies of these documents are available at no charge by visiting the SEC's website at www.sec.gov. Alternatively, when available, copies of the preliminary prospectus supplement, the prospectus supplement and accompanying prospectus related to the offering may be obtained by contacting Morgan Stanley & Co. LLC, Attention: Prospectus Department, 180 Varick Street, 2nd Floor,
No Offer or Solicitation
This press release does not constitute an offer to sell, a solicitation of an offer to sell, or the solicitation of an offer to buy any securities. There will be no sale of securities in any jurisdiction in which such an offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such jurisdiction.
About Merchants Bancorp
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Forward-Looking Statements
This press release contains forward-looking statements which reflect management's current views with respect to, among other things, future events and financial performance. These statements are often, but not always, made through the use of words or phrases such as "may," "might," "should," "could," "predict," "potential," "believe," "expect," "continue," "will," "anticipate," "seek," "estimate," "intend," "plan," "projection," "goal," "target," "outlook," "aim," "would," "annualized" and "outlook," or the negative version of those words or other comparable words or phrases of a future or forward-looking nature. Forward-looking statements in this press release include, but are not limited to, statements regarding the offering. These forward-looking statements are not historical facts, and are based on current expectations, estimates and projections about the industry, management's beliefs and certain assumptions made by management, many of which, by their nature, are inherently uncertain and beyond our control. Accordingly, management cautions that any such forward-looking statements are not guarantees of future performance and are subject to risks, assumptions, estimates and uncertainties that are difficult to predict. Although the Company believes that the expectations reflected in these forward-looking statements are reasonable as of the date made, actual results may prove to be materially different from the results expressed or implied by the forward-looking statements. A number of important factors could cause actual results to differ materially from those indicated in these forward-looking statements, including the impacts of factors identified in "Risk Factors" or "Management's Discussion and Analysis of Financial Condition and Results of Operations" in the Company's Annual Report on Form 10-K and other periodic filings with the Securities and Exchange Commission. Any forward-looking statements presented herein are made only as of the date of this press release, and the Company does not undertake any obligation to update or revise any forward-looking statements to reflect changes in assumptions, the occurrence of unanticipated events, or otherwise.
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SOURCE Merchants Bancorp
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