Merchants Bancorp Reports Full Year and Fourth Quarter 2021 Results

Rhea-AI Summary

Merchants Bancorp (Nasdaq: MBIN) reported a fourth-quarter 2021 net income of $55.2 million or $1.71 per diluted share, a decline from $59.8 million in Q4 2020. Noninterest expenses rose 37% driven by higher salaries, impacting profitability. However, net interest income grew 5% year-over-year, reaching $72.7 million. Total assets increased to $11.3 billion, a 17% rise from the previous year. Despite challenges in income and expenses, the company noted strong growth in deposits and a solid business model focused on conservative underwriting.

Positive

• Net interest income increased by 5% year-over-year to $72.7 million.
• Total assets reached $11.3 billion, up 17% year-over-year.
• Total deposits rose to $9.0 billion, a 21% increase from last year.

Negative

• Net income decreased by 8% compared to Q4 2020, primarily due to a 37% rise in noninterest expenses.
• Noninterest income fell by 6% year-over-year, largely due to reduced mortgage warehouse fees.

CARMEL, Ind., Jan. 31, 2022 /PRNewswire/ -- Merchants Bancorp (the "Company" or "Merchants") (Nasdaq: MBIN), parent company of Merchants Bank of Indiana, today reported fourth quarter 2021 net income of $55.2 million, or diluted earnings per common share of $1.71 (or $1.14 after adjusting for its 3:2 stock split in January 2022).  This compared to $59.8 million, or diluted earnings per common share of $1.95 ($1.30 split adjusted) in the fourth quarter of 2020, and compared to $58.5 million, or diluted earnings per common share of $1.83 ($1.22 split adjusted) in the third quarter of 2021.

"Execution and growth were the hallmarks of our performance during 2021.  With record earnings and asset levels in a low interest rate environment, we have continued to demonstrate the strength of our business model that has focused on conservative underwriting, cost efficiency, and holding short-duration assets by originating loans to be sold in the secondary market," said Michael F. Petrie, Chairman and CEO of Merchants.  

Michael J. Dunlap, President and Chief Operating Officer of Merchants, added, "The entrepreneurial evolution of our businesses over the last year has resulted in Merchants becoming known as a one-stop-shop for borrowers with a broad array of product offerings that includes everything from multi-family, bridge, residential, SBA, agriculture, and mortgage warehouse financing, to traditional community banking and syndicated low-income housing tax credit and debt funds.  We have expanded our platform of offerings across all our businesses and see many opportunities for future growth."

Net income for the fourth quarter 2021 decreased by $4.6 million, or 8%, compared to the fourth quarter of 2020, primarily driven by a $10.2 million, or 37%, increase in noninterest expense that reflected a 53% increase in salaries and employee benefits, including commissions.  Also contributing to the lower net income was a $2.5 million, or 6%, decrease in noninterest income that reflected lower mortgage warehouse fees due to lower single family loan volume.  Partially offsetting these items was a $5.0 million, or 8%, increase in net interest income after provision for loan losses, and a $3.0 million lower tax provision.

Net income for the fourth quarter 2021 decreased by $3.3 million, or 6%, compared to the third quarter of 2021, primarily driven by an $8.2 million, or 28%, increase in noninterest expense that reflected a 26% increase in salaries and employee benefits, including commissions.  Also contributing to the lower net income was a $3.9 million, or 74%, decrease in loan servicing fees.  Partially offsetting these items was a $4.6 million, or 143%, increase in other income from low-income housing tax syndication fees, a $2.4 million increase in net interest income after provision for loan losses, and a $2.5 million lower tax provision.

Total Assets
Total assets of $11.3 billion at December 31, 2021 increased $326.6 million, or 3%, compared to September 30, 2021, and increased $1.6 billion, or 17%, compared to December 31, 2020.

Return on average assets was 2.02% for the fourth quarter of 2021 compared to 2.57% for the fourth quarter of 2020 and 2.29% for the third quarter of 2021. 

Asset Quality
The allowance for loan losses of $31.3 million at December 31, 2021 increased $2.2 million compared to September 30, 2021 and increased $3.8 million compared to December 31, 2020.  The increases compared to December 31, 2020 were primarily based on growth in the multi-family loan portfolio.  The portion of the allowance associated with the COVID-19 pandemic has remained relatively steady since September 30, 2020, at approximately $0.8 million.   As of December 31, 2021, the Company had only one loan remaining in a payment deferral arrangement, with an unpaid balance of $36.8 million.

Non-performing loans were $0.8 million, or 0.01%, of loans receivable at December 31, 2021, compared to $2.9 million, or 0.05% of loans receivable at September 30, 2021, and compared to $6.3 million, or 0.11% of loans receivable at December 31, 2020. 

Total Deposits
Total deposits of $9.0 billion at December 31, 2021 increased $35.3 million compared to September 30, 2021, and increased $1.6 billion, or 21%, compared to December 31, 2020. The increase compared to December 31, 2020 was primarily due to growth in savings accounts and brokered certificates of deposits.

Total brokered deposits of $2.2 billion at December 31, 2021 increased $493.3 million, or 30%, from September 30, 2021 and increased $986.1 million, or 84%, from December 31, 2020.   Brokered deposits represented 24% of total deposits at December 31, 2021 compared to 19% of total deposits at September 30, 2021 and 16% of total deposits at December 31, 2020.  The increases reflected a continuation of the Company's shift from borrowing at the Federal Home Loan Bank of Indianapolis after a change in their collateral policy to eliminate certain agency eligible mortgage loan participations during the third quarter of 2021.

Liquidity
Cash balances of $1.0 billion at December 31, 2021 increased by $230.0 million compared to September 30, 2021 and increased by $852.9 million compared to December 31, 2020.  The Company also continues to have significant borrowing capacity, with unused lines of credit at $2.4 billion at December 31, 2021 compared to $2.1 billion at September 30, 2021 and $2.6 billion at December 31, 2020.  This liquidity enhances the ability to effectively manage interest expense and asset levels in the future.

Net Interest Income
Net interest income of $72.7 million in the fourth quarter of 2021 increased $3.5 million, or 5%, compared to the fourth quarter of 2020 and increased $3.9 million, or 6%, compared to the third quarter of 2021. 

The 5% increase in net interest income compared to the fourth quarter of 2020 reflected a 6% increase in interest income from higher loan balances that was partially offset by a 20% increase in the cost of deposits. The interest rate spread of 2.62% for the fourth quarter of 2021 decreased 33 basis points compared to 2.95% in the fourth quarter of 2020. The net interest margin of 2.70% for the fourth quarter of 2021 decreased 31 basis points compared to 3.01% for the fourth quarter of 2020. The decrease in net interest margin compared to the fourth quarter of 2020 reflected higher loan balances that were outpaced by lower interest rates on loans.

The 6% increase in net interest income compared to the third quarter of 2021 reflected higher loan balances and a modest increase in average loan yields.  The interest rate spread of 2.62% for the fourth quarter of 2021 decreased 5 basis points compared to 2.67% in the third quarter of 2021.  The net interest margin of 2.70% for the fourth quarter of 2021 also decreased 3 basis points compared to 2.73% for the third quarter of 2021. 

Interest Income
Interest income of $82.6 million in the fourth quarter of 2021 increased $4.7 million, or 6%, compared to the fourth quarter of 2020 and increased $5.3 million, or 7%, compared to the third quarter of 2021. 

The 6% increase in interest income compared to the fourth quarter of 2020 was primarily due to significant loan growth that was partially offset by lower rates.  The higher interest income reflected a $923.3 million, or 11%, increase in the average balance of loans, including loans held for sale, which reached $9.1 billion for the fourth quarter of 2021. The average yield on loans and loans held for sale of 3.37% for the fourth quarter of 2021 decreased 27 basis points compared to 3.64% for the fourth quarter of 2020.

The 7% increase in interest income compared to the third quarter of 2021 reflected a $375.7 million, or 4%, increase in the average balance of loans, including loans held for sale, which reached $9.1 billion for the fourth quarter of 2021. The average yield on loans and loans held for sale of 3.37% for the fourth quarter of 2021 increased 4 basis points compared to 3.33% for the third quarter of 2021. 

Interest Expense
Total interest expense increased $1.2 million, or 13%, to $9.8 million for the fourth quarter of 2021 compared to the fourth quarter of 2020 and increased $1.4 million, or 17%, compared to the third quarter of 2021. Interest expense on deposits of $8.5 million for the fourth quarter of 2021 increased $1.4 million, or 20%, compared to the fourth quarter of 2020 and increased $1.5 million, or 22%, compared to the third quarter of 2021.

The 20% increase in interest expense on deposits compared to the fourth quarter of 2020 was primarily due to increases in average balances of money market accounts and certificates of deposits, which was partially offset by lower rates.  The average balance of interest-bearing deposits of $8.3 billion for the fourth quarter of 2021 increased $1.5 billion, or 21%, compared to the fourth quarter of 2020. The average yield of interest-bearing deposits was 0.41% for the fourth quarter of 2021, which was the same as the fourth quarter of 2020. 

The 22% increase in interest expense on deposits compared to the third quarter of 2021 was primarily due to higher balances of certificates of deposit and money market accounts, that were partially offset by lower rates on certificates of deposit.  The average balance of interest-bearing deposits of $8.3 billion for the fourth quarter of 2021 increased $481.7 million, or 6%, compared to the third quarter of 2021. The average yield of interest-bearing deposits was 0.41% for the fourth quarter of 2021, which was a 6 basis point increase compared to 0.35% in the third quarter of 2021. 

Noninterest Income
Noninterest income of $40.3 million for the fourth quarter of 2021 decreased $2.5 million, or 6%, compared to the fourth quarter of 2020 and was consistent with the third quarter of 2021.

The 6% decrease in noninterest income compared to the fourth quarter of 2020 was primarily due to a $3.5 million decrease in mortgage warehouse fees. Included in loan servicing fees for the fourth quarter of 2021 was a $1.9 million positive fair market value adjustment to servicing rights, which compared to a $2.1 million positive fair market value adjustment for the fourth quarter of 2020.

Noninterest income was consistent with the third quarter of 2021 but included a $4.6 million increase in other income from low-income housing tax credit syndication fees that was mostly offset by a $3.9 million decrease in loan servicing fees.  Included in loan servicing fees for the fourth quarter of 2021 was a $1.9 million positive fair market value adjustment to servicing rights, which compared to a $3.0 million positive fair market value adjustment for the third quarter of 2021.

At December 31, 2021, servicing rights were valued at $110.3 million, an increase of 34% compared to December 31, 2020 and an increase of 5% compared to September 30, 2021.  These increases were driven by higher loan balances of serviced assets and higher interest rates that impacted fair market value adjustments in the fourth quarter of 2021.  The value of servicing rights generally increases in rising interest rate environments and declines in falling interest rate environments.

Noninterest Expense
Noninterest expense of $37.6 million for the fourth quarter of 2021 increased $10.2 million, or 37%, compared to the fourth quarter of 2020 and increased $8.2 million, or 28%, compared to the third quarter of 2021. 

The 37% increase in noninterest expense compared to the fourth quarter of 2020 was due primarily to a $8.8 million, or 53%, increase in salaries and employee benefits, including commissions, to support higher loan production volumes.    The efficiency ratio of 33.3% for the fourth quarter of 2021 compared to 24.5% for the fourth quarter of 2020.

The 28% increase in noninterest expense compared to the third quarter of 2021 was primarily due to a $5.2 million, or 26%, increase in salaries and employee benefits that reflected higher commissions from higher loan volumes.  The efficiency ratio of 33.3% for the fourth quarter of 2021 compared to 27.0% for the third quarter of 2021.

Segments

Multi-family Mortgage Banking 
For the fourth quarter of 2021, net income of $14.1 million for Multi-family Mortgage Banking decreased 1% compared with the fourth quarter of 2020, primarily due to higher noninterest income from gain on sale of loans that was offset by higher noninterest expense from salaries and employee benefits, including commissions. Noninterest income reflected a positive fair market value adjustment of $1.0 million on servicing rights in the fourth quarter of 2021 compared to a positive fair market value adjustment of $2.7 million in the fourth quarter of 2020. 

Compared to the third quarter of 2021, net income for this segment decreased 2%, reflecting higher gain on sale of loans and other income from low-income housing tax credit syndication fees that were offset by higher noninterest expense from salaries and employee benefits, including commissions.  Included in loan servicing fees was a positive fair market value adjustment of $1.0 million on servicing rights in the fourth quarter of 2021 compared to a positive fair market value adjustment of $0.7 million in the third quarter of 2021.

Banking 
For the fourth quarter of 2021, net income of $22.6 million for Banking increased 38% from the fourth quarter of 2020, reflecting higher net interest income and lower salaries and employee benefits that were partially offset by lower noninterest income from gains on sale of loans. Included in noninterest income for the fourth quarter of 2021 was a $0.9 million positive fair market value adjustment to servicing rights, which compared to a $0.5 million negative fair market value adjustment for the fourth quarter of 2020. 

Net income for this segment decreased 4% from the third quarter of 2021 primarily due to lower noninterest income from gain on sale of loans that offset higher net interest income and lower salaries and employee benefits.  Included in loan servicing fees for the fourth quarter of 2021 was a $0.9 million positive fair market value adjustment to servicing rights, which compared to a $2.3 million positive fair market value adjustment for the third quarter of 2021.

Mortgage Warehousing 
For the fourth quarter of 2021, net income of $21.3 million for Mortgage Warehousing decreased 34% compared to the fourth quarter of 2020 and decreased 8% compared to the third quarter of 2021.  The decreases compared to the prior periods reflected lower net interest income and mortgage warehouse fees as industry volumes declined. 

About Merchants Bancorp
Merchants Bancorp is a diversified bank holding company headquartered in Carmel, Indiana operating multiple lines of business, including Federal Housing Administration ("FHA") multi-family housing and healthcare facility financing and servicing; mortgage warehouse financing; retail and correspondent residential mortgage banking; agricultural lending; and traditional community banking.  Merchants Bancorp, with $11.3 billion in assets and $9.0 billion in deposits as of December 31, 2021, conducts its business primarily through its direct and indirect subsidiaries, Merchants Bank of Indiana, Merchants Capital Corp., Farmers-Merchants Bank of Illinois, Merchants Capital Servicing, LLC, and Merchants Mortgage, a division of Merchants Bank of Indiana. For more information and financial data, please visit Merchants' Investor Relations page at investors.merchantsbancorp.com.

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. 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, such as the potential impacts of the COVID-19 pandemic. 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 the COVID-19 pandemic, such as the severity, magnitude, duration and businesses' and governments' responses thereto, on the Company's operations and personnel, and on activity and demand across its businesses, and other 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 we do not undertake any obligation to update or revise any forward-looking statements to reflect changes in assumptions, the occurrence of unanticipated events, or otherwise.

 

 

Consolidated Balance Sheets
(Unaudited)
(In thousands, except share data)
		December 31,		September 30,		June 30,		March 31,		December 31,
		2021		2021		2021		2021		2020
Assets
Cash and due from banks		$             14,030		$             14,352		$             13,745		$             12,003		$             10,063
Interest-earning demand accounts		1,018,584		788,224		388,304		257,436		169,665
Cash and cash equivalents		1,032,614		802,576		402,049		269,439		179,728
Securities purchased under agreements to resell		5,888		5,923		6,507		6,544		6,580
Mortgage loans in process of securitization		569,239		634,027		461,914		432,063		338,733
Available for sale securities		310,629		301,119		315,260		241,691		269,802
Federal Home Loan Bank (FHLB) stock		29,588		70,767		70,767		70,656		70,656
Loans held for sale (includes $48,583, $26,296, $26,623, $57,998 and $40,044, respectively, at fair value)		3,303,199		3,453,279		2,955,390		2,749,662		3,070,154
Loans receivable, net of allowance for loan losses of $31,344, $29,134, $28,696, $29,091 and $27,500, respectively		5,751,319		5,431,227		5,444,227		5,710,291		5,507,926
Premises and equipment, net		31,212		31,423		31,384		31,261		29,761
Servicing rights		110,348		105,473		98,331		96,215		82,604
Interest receivable		24,103		21,894		22,068		22,111		21,770
Goodwill		15,845		15,845		15,845		15,845		15,845
Intangible assets, net		1,707		1,843		1,990		2,136		2,283
Other assets and receivables		92,947		76,637		55,800		57,346		49,533
Total assets		$     11,278,638		$     10,952,033		$        9,881,532		$        9,705,260		$        9,645,375
Liabilities and Shareholders' Equity
Liabilities
Deposits
Noninterest-bearing		$           641,442		$           824,118		$           814,567		$           818,621		$           853,648
Interest-bearing		8,341,171		8,123,201		7,225,011		7,244,560		6,554,418
Total deposits		8,982,613		8,947,319		8,039,578		8,063,181		7,408,066
Borrowings		1,033,954		809,136		701,373		545,160		1,348,256
Deferred and current tax liabilities, net		19,170		21,681		18,819		41,610		20,405
Other liabilities		87,492		64,019		62,698		44,054		58,027
Total liabilities		10,123,229		9,842,155		8,822,468		8,694,005		8,834,754
Commitments and  Contingencies
Shareholders' Equity
Common stock, without par value
Authorized - 50,000,000 shares
Issued and outstanding prior to 2022 stock split - 28,786,719 shares, 28,785,374 shares, 28,783,599 shares, 28,782,139 shares, and 28,747,083 shares, respectively (as recast after 2022 stock split - 43,180,079 shares, 43,178,061 shares, 43,175,399 shares, 43,173,209 shares and 43,120,625 shares)		137,565		137,200		136,836		136,474		135,857
Preferred stock, without par value - 5,000,000 total shares authorized
8% Preferred stock - $1,000 per share liquidation preference
Authorized - 50,000 shares
Issued and outstanding - 0 shares, 0 shares, 0 shares, 41,625 shares and 41,625 shares.		—		—		—		41,581		41,581
7% Series A Preferred stock - $25 per share liquidation preference
Authorized - 3,500,000 shares
Issued and outstanding - 2,081,800 shares		50,221		50,221		50,221		50,221		50,221
6% Series B Preferred stock - $1,000 per share liquidation preference
Authorized - 125,000 shares
Issued and outstanding - 125,000 shares (equivalent to 5,000,000 depositary shares)		120,844		120,844		120,844		120,844		120,844
6% Series C Preferred stock - $1,000 per share liquidation preference
Authorized - 250,000 shares
Issued and outstanding - 196,181 shares, 196,181 shares, 196,181 shares, 150,000 shares, and 0 shares, respectively (equivalent to 7,847,233 depositary shares, 7,847,233 depositary shares, 7,847,233 depositary shares, 6,000,000 depositary shares, and 0 depositary shares)		191,084		191,084		191,084		144,925		—
Retained earnings		657,149		610,267		560,083		516,961		461,744
Accumulated other comprehensive income		(1,454)		262		(4)		249		374
Total shareholders' equity		1,155,409		1,109,878		1,059,064		1,011,255		810,621
Total liabilities and shareholders' equity		$     11,278,638		$     10,952,033		$        9,881,532		$        9,705,260		$        9,645,375

 

 

Consolidated Statement of Income
(Unaudited)
(In thousands, except share data)
		Three Months Ended									Twelve Months Ended
		December 31,			September 30,			December 31,			December 31,			December 31,
		2021			2021			2020			2021			2020
Interest Income
Loans		$	77,113		$	72,924		$	74,515		$	293,830		$	263,915
Mortgage loans in process of securitization			4,018			2,868			2,542			12,746			11,122
Investment securities:
Available for sale - taxable			1,007			1,115			422			3,309			3,147
Available for sale - tax exempt			9			12			11			41			123
Federal Home Loan Bank stock			177			190			341			1,143			1,558
Other			261			205			80			817			2,925
Total interest income			82,585			77,314			77,911			311,886			282,790
Interest Expense
Deposits			8,492			6,981			7,106			28,256			52,238
Borrowed funds			1,350			1,452			1,568			5,636			6,406
Total interest expense			9,842			8,433			8,674			33,892			58,644
Net Interest Income			72,743			68,881			69,237			277,994			224,146
Provision for loan losses			2,585			1,079			4,114			5,012			11,838
Net Interest Income After Provision for Loan Losses			70,158			67,802			65,123			272,982			212,308
Noninterest Income
Gain on sale of loans			28,430			29,013			28,830			111,185			96,578
Loan servicing fees, net			1,382			5,313			3,069			16,373			(1,801)
Mortgage warehouse fees			2,469			2,732			5,926			12,396			20,980
Gains on sale of investments available for sale (1)			191			—			—			191			441
Other income			7,799			3,213			4,901			17,188			11,275
Total noninterest income			40,271			40,271			42,726			157,333			127,473
Noninterest Expense
Salaries and employee benefits			25,387			20,197			16,565			85,727			59,200
Loan expenses			1,479			1,734			2,938			7,657			9,085
Occupancy and equipment			2,069			1,861			1,438			7,365			5,733
Professional fees			3,325			901			1,657			5,427			3,664
Deposit insurance expense			705			664			759			2,691			5,800
Technology expense			1,123			1,169			832			4,200			3,061
Other expense			3,558			2,946			3,276			12,318			9,881
Total noninterest expense			37,646			29,472			27,465			125,385			96,424
Income Before Income Taxes			72,783			78,601			80,384			304,930			243,357
Provision for income taxes (2)			17,582			20,098			20,598			77,826			62,824
Net Income		$	55,201		$	58,503		$	59,786		$	227,104		$	180,533
Dividends on preferred stock			(5,728)			(5,729)			(3,618)			(20,873)			(14,473)
Net Income Allocated to Common Shareholders		$	49,473		$	52,774		$	56,168		$	206,231		$	166,060
As reported prior to 2022 stock split:
Weighted-average diluted shares			28,932,709			28,876,503			28,812,009			28,883,535			28,778,075
Diluted earnings per common share		$	1.71		$	1.83		$	1.95		$	7.14		$	5.77
As recast after 2022 stock split:
Weighted-average diluted shares			43,399,064			43,314,755			43,218,014			43,325,303			43,167,113
Diluted earnings per common share		$	1.14		$	1.22		$	1.30		$	4.76		$	3.85
(1)Includes $191, $0, $0, $191, and $441, respectively, related to accumulated other comprehensive earnings reclassifications.
(2) Includes $(46), $0, $0, $(46) and $(97), respectively, related to income tax (expense)/benefit for reclassification items.

 

 

Key Operating Results
(Unaudited)
($ in thousands, except share data)
			Three Months Ended						Twelve Months Ended
			December 31,		September 30,		December 31,		December 31,		December 31,
			2021		2021		2020		2021		2020
Noninterest expense			$          37,646		$         29,472		$          27,465		$        125,385		$          96,424
Net interest income (before provision for losses)			72,743		68,881		69,237		277,994		224,146
Noninterest income			40,271		40,271		42,726		157,333		127,473
Total income			$        113,014		$       109,152		$        111,963		$        435,327		$        351,619
Efficiency ratio			33.31%		27.00%		24.53%		28.80%		27.42%
Average assets			$  10,945,026		$ 10,236,491		$    9,317,570		$  10,188,953		$    8,509,847
Net income			$         55,201		$         58,503		$          59,786		$        227,104		$        180,533
Return on average assets before annualizing			0.50%		0.57%		0.64%		2.23%		2.12%
Annualization factor			4.00		4.00		4.00		1.00		1.00
Return on average assets			2.02%		2.29%		2.57%		2.23%		2.12%
Return on average tangible common shareholders' equity (1)			26.04%		29.83%		40.64%		30.10%		34.02%
Tangible book value per common share as reported prior to 2022 stock split (1)			$            26.95		$           25.36		$            20.17		$            26.95		$            20.17
Tangible book value per common share as recast after 2022 stock split (1)			$            17.96		$           16.91		$            13.45		$            17.96		$            13.45
Tangible common shareholders' equity/tangible assets (1)			6.89%		6.68%		6.02%		6.89%		6.02%
(1) Non-GAAP financial measure - see "Reconciliation of Non-GAAP Measures"
(1) Reconciliation of Non-GAAP Financial Measures
Certain non-GAAP financial measures provide useful information to management and investors that is supplementary to the company's financial condition, results of operations and cash flows computed in accordance with GAAP; however, they do have a number of limitations.  As such, the reader should not view these disclosures as a substitute for results determined in accordance with GAAP, and they are not necessarily comparable  to non-GAAP financial measures that other companies use.  A reconciliation of GAAP to non-GAAP financial measures is below.  Net Income Available to Common Shareholders excludes preferred stock.  Tangible common equity is calculated by excluding the balance of goodwill and other intangible assets and preferred stock from the calculation of total assets.  Tangible Assets is calculated by excluding the balance of goodwill and intangible assets.  Tangible book value per share is calculated by dividing tangible common equity by the number of shares outstanding.
			Three Months Ended						Twelve Months Ended
			December 31,		September 30,		December 31,		December 31,		December 31,
			2021		2021		2020		2021		2020
Net income			$          55,201		$         58,503		$          59,786		$        227,104		$        180,533
Less: preferred stock dividends			(5,728)		(5,729)		(3,618)		(20,873)		(14,473)
Net income available to common shareholders			$          49,473		$         52,774		$          56,168		$        206,231		$        166,060
Average shareholders' equity			$     1,139,714		$    1,087,675		$        783,837		$    1,028,834		$        719,630
Less: average goodwill & intangibles			(17,626)		(17,770)		(18,334)		(17,841)		(18,899)
Less: average preferred stock			(362,149)		(362,149)		(212,646)		(325,904)		(212,646)
Tangible common shareholders' equity			$        759,939		$       707,756		$        552,857		$        685,089		$        488,085
Annualization factor			4.00		4.00		4.00		1.00		1.00
Return on average tangible common shareholders' equity			26.04%		29.83%		40.64%		30.10%		34.02%
Total equity			$    1,155,409		$    1,109,878		$        810,621		$    1,155,409		$        810,621
Less: goodwill and intangibles			(17,552)		(17,688)		(18,128)		(17,552)		(18,128)
Less: preferred stock			(362,149)		(362,149)		(212,646)		(362,149)		(212,646)
Tangible common shareholders' equity			$        775,708		$       730,041		$        579,847		$        775,708		$        579,847
Assets			$  11,278,638		$ 10,952,033		$    9,645,375		$  11,278,638		$    9,645,375
Less: goodwill and intangibles			(17,552)		(17,688)		(18,128)		(17,552)		(18,128)
Tangible assets			$  11,261,086		$ 10,934,345		$    9,627,247		$  11,261,086		$    9,627,247
Ending common shares as reported prior to 2022 stock split			28,786,719		28,785,374		28,747,083		28,786,719		28,747,083
Ending common shares as recast after 2022 stock split			43,180,079		43,178,061		43,120,625		43,180,079		43,120,625
Tangible book value per common share as reported prior to 2022 stock split			$            26.95		$           25.36		$            20.17		$            26.95		$            20.17
Tangible book value per common share as recast after 2022 stock split			$            17.96		$           16.91		$            13.45		$            17.96		$            13.45
Tangible common shareholders' equity/tangible assets			6.89%		6.68%		6.02%		6.89%		6.02%

 

 

Merchants Bancorp
Average Balance Analysis
($ in thousands)
(Unaudited)
	Three Months Ended				Three Months Ended				Three Months Ended
	December 31, 2021				September 30, 2021				December 31, 2020
	Average		Yield/		Average		Yield/		Average		Yield/
	Balance	Interest	Rate		Balance	Interest	Rate		Balance	Interest	Rate
Assets:
Interest-bearing deposits, and other	$      698,263	$      438	0.25%		$      580,397	$       395	0.27%		$        328,635	$       421	0.51%
Securities available for sale - taxable	308,581	1,007	1.29%		308,476	1,115	1.43%		276,358	422	0.61%
Securities available for sale - tax exempt	1,204	9	2.97%		1,361	12	3.50%		1,368	11	3.20%
Mortgage loans in process of securitization	621,946	4,018	2.56%		437,601	2,868	2.60%		397,237	2,542	2.55%
Loans and loans held for sale	9,064,880	77,113	3.37%		8,689,144	72,924	3.33%		8,141,559	74,515	3.64%
Total interest-earning assets	10,694,874	82,585	3.06%		10,016,979	77,314	3.06%		9,145,157	77,911	3.39%
Allowance for loan losses	(29,801)				(28,679)				(24,684)
Noninterest-earning assets	279,953				248,191				197,097
Total assets	$  10,945,026				$ 10,236,491				$     9,317,570
Liabilities & Shareholders' Equity:
Interest-bearing checking	4,325,991	2,094	0.19%		4,754,633	1,561	0.13%		4,301,607	1,256	0.12%
Savings deposits	223,912	35	0.06%		211,494	39	0.07%		185,515	41	0.09%
Money market	2,528,453	5,018	0.79%		2,259,786	4,394	0.77%		1,734,321	4,312	0.99%
Certificates of deposit	1,220,392	1,345	0.44%		591,093	987	0.66%		616,493	1,497	0.97%
Total interest-bearing deposits	8,298,748	8,492	0.41%		7,817,006	6,981	0.35%		6,837,936	7,106	0.41%
Borrowings	620,173	1,350	0.86%		677,201	1,452	0.85%		990,707	1,568	0.63%
Total interest-bearing liabilities	8,918,921	9,842	0.44%		8,494,207	8,433	0.39%		7,828,643	8,674	0.44%
Noninterest-bearing deposits	795,704				586,981				634,231
Noninterest-bearing liabilities	90,687				67,628				70,859
Total liabilities	9,805,312				9,148,816				8,533,733
Shareholders' equity	1,139,714				1,087,675				783,837
Total liabilities and shareholders' equity	$  10,945,026				$ 10,236,491				$     9,317,570
Net interest income		$ 72,743				$  68,881				$  69,237
Net interest spread			2.62%				2.67%				2.95%
Net interest-earning assets	$   1,775,953				$   1,522,772				$     1,316,514
Net interest margin			2.70%				2.73%				3.01%
Average interest-earning assets to average interest-bearing liabilities			119.91%				117.93%				116.82%

 

 

Supplemental Results
(Unaudited)
($ in thousands)
				Net Income						Net Income
				Three Months Ended						Twelve Months Ended
				December 31,		September 30,		December 31,		December 31,
				2021		2021		2020		2021		2020
Segment
Multi-family Mortgage Banking				$           14,124		$         14,448		$            14,231		$        51,504		$        29,172
Mortgage Warehousing				21,311		23,217		32,387		95,159		106,329
Banking				22,629		23,463		16,389		90,858		53,637
Other				(2,863)		(2,625)		(3,221)		(10,417)		(8,605)
Total				$           55,201		$         58,503		$            59,786		$     227,104		$     180,533
				Total Assets
				December 31,		September 30,		December 31,
				2021		2021		2020
Segment
Multi-family Mortgage Banking				$         296,129		$       280,927		$          210,714
Mortgage Warehousing				3,977,537		4,685,037		4,893,513
Banking				6,929,565		5,950,316		4,498,880
Other				75,407		35,753		42,268
Total				$    11,278,638		$ 10,952,033		$      9,645,375
				Gain on Sale of Loans						Gain on Sale of Loans
				Three Months Ended						Twelve Months Ended
				December 31,		September 30,		December 31,		December 31,
				2021		2021		2020		2021		2020
Loan Type
Multi-family				$           24,797		$         24,309		$            17,070		$        93,350		$        57,633
Single-family				1,086		1,592		10,902		8,763		37,127
Small Business Association (SBA)				2,547		3,112		858		9,072		1,818
Total				$           28,430		$         29,013		$            28,830		$     111,185		$        96,578
				Loans Receivable and Loans Held for Sale
				December 31,		September 30,		December 31,
				2021		2021		2020
Mortgage warehouse lines of credit				$         781,437		$       891,605		$      1,605,745
Residential real estate				843,101		828,950		678,848
Multi-family and healthcare financing				3,528,199		3,244,442		2,749,020
Commercial and commercial real estate				520,199		391,562		387,294
Agricultural production and real estate				97,060		92,113		101,268
Consumer and margin loans				12,667		11,689		13,251
				5,782,663		5,460,361		5,535,426
Less: Allowance for loan losses				31,344		29,134		27,500
Loans receivable				$      5,751,319		$    5,431,227		$      5,507,926
Loans held for sale				3,303,199		3,453,279		3,070,154
Total loans, net of allowance				$      9,054,518		$    8,884,506		$      8,578,080

 

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SOURCE Merchants Bancorp

FAQ

What was Merchants Bancorp's net income for Q4 2021?

Merchants Bancorp reported a net income of $55.2 million for Q4 2021.

How did the net interest income change in Q4 2021 for MBIN?

Net interest income for MBIN increased by 5% year-over-year, totaling $72.7 million.

What were the total assets of Merchants Bancorp as of December 31, 2021?

The total assets of Merchants Bancorp were $11.3 billion as of December 31, 2021.

Did Merchants Bancorp experience a rise in deposits in Q4 2021?

Yes, total deposits increased to $9.0 billion, marking a 21% year-over-year growth.

What caused the decrease in Merchants Bancorp's net income?

The decrease in net income was primarily due to a significant rise in noninterest expenses and lower noninterest income.