Merchants Bancorp Reports Third Quarter 2024 Results
Merchants Bancorp (MBIN) reported Q3 2024 net income of $61.3 million, down 25% year-over-year and 20% quarter-over-quarter. Diluted EPS was $1.17, decreasing 30% YoY. Results were impacted by $14.4 million in unfavorable fair market value adjustments. Total assets reached a record $18.7 billion, up 2% from Q2 2024. Non-performing loans increased to $210.9 million (2.04% of gross loans). The company maintained strong liquidity with $5.1 billion in unused borrowing capacity and achieved a record-high tangible book value per share of $32.38, up 25% YoY.
Merchants Bancorp (MBIN) ha riportato un utile netto per il terzo trimestre del 2024 di 61,3 milioni di dollari, in diminuzione del 25% rispetto all'anno precedente e del 20% rispetto al trimestre precedente. L'utile per azione diluito è stato di $1,17, con una diminuzione del 30% su base annua. I risultati sono stati influenzati da aggiustamenti sfavorevoli del valore di mercato pari a 14,4 milioni di dollari. Il totale degli attivi ha raggiunto un record di 18,7 miliardi di dollari, con un aumento del 2% rispetto al secondo trimestre del 2024. I prestiti in sofferenza sono aumentati a 210,9 milioni di dollari (2,04% dei prestiti lordi). L'azienda ha mantenuto una forte liquidità con 5,1 miliardi di dollari di capacità di indebitamento inutilizzata e ha raggiunto un valore contabile tangibile per azione di $32,38, in aumento del 25% su base annua.
Merchants Bancorp (MBIN) reportó un ingreso neto en el tercer trimestre de 2024 de 61.3 millones de dólares, una disminución del 25% en comparación con el año anterior y del 20% en comparación con el trimestre anterior. El EPS diluido fue de $1.17, disminuyendo un 30% interanual. Los resultados se vieron impactados por ajustes desfavorables del valor de mercado de $14.4 millones. El total de activos alcanzó un récord de 18.7 mil millones de dólares, un aumento del 2% respecto al segundo trimestre de 2024. Los préstamos no productivos aumentaron a 210.9 millones de dólares (2.04% de los préstamos brutos). La compañía mantuvo una sólida liquidez con una capacidad de endeudamiento no utilizada de 5.1 mil millones de dólares y alcanzó un valor contable tangible por acción de $32.38, un incremento del 25% interanual.
Merchants Bancorp (MBIN)는 2024년 3분기 순이익이 6130만 달러로, 지난해 대비 25%, 전분기 대비 20% 감소했다고 보고했습니다. 희석 주당순이익(EPS)은 1.17달러로, 30% 감소했습니다. 결과는 1440만 달러의 불리한 공정 시장 가치 조정의 영향을 받았습니다. 총 자산은 187억 달러로 증가하여 2024년 2분기 대비 2% 상승하였습니다. 부실대출은 2억 1090만 달러로 증가했습니다(총 대출의 2.04%). 회사는 51억 달러의 미사용 차입 능력을 보유하며 강력한 유동성을 유지했고, 주당 32.38달러로 기록적인 tangible book value를 달성하였습니다. 이는 지난해 대비 25% 증가한 수치입니다.
Merchants Bancorp (MBIN) a signalé un revenu net pour le troisième trimestre 2024 de 61,3 millions de dollars, en baisse de 25 % par rapport à l'année précédente et de 20 % par rapport au trimestre précédent. Le BPA dilué était de 1,17 $, en baisse de 30 % par rapport à l'année précédente. Les résultats ont été affectés par des ajustements défavorables de la juste valeur de 14,4 millions de dollars. Le total des actifs a atteint un niveau record de 18,7 milliards de dollars, en hausse de 2 % par rapport au deuxième trimestre de 2024. Les prêts non performants ont augmenté à 210,9 millions de dollars (2,04 % des prêts bruts). L'entreprise a maintenu une forte liquidité avec une capacité d'emprunt non utilisée de 5,1 milliards de dollars et a atteint un record de valeur comptable tangible par action de 32,38 $, en hausse de 25 % par rapport à l'année précédente.
Merchants Bancorp (MBIN) berichtete für das dritte Quartal 2024 einen Nettogewinn von 61,3 Millionen Dollar, was einem Rückgang von 25 % im Jahresvergleich und von 20 % im Quartalsvergleich entspricht. Der verwässerte Gewinn pro Aktie (EPS) betrug 1,17 Dollar, ein Rückgang um 30 % im Vergleich zum Vorjahr. Die Ergebnisse wurden von ungünstigen Anpassungen des Marktwerts in Höhe von 14,4 Millionen Dollar beeinflusst. Die Gesamtsumme der Vermögenswerte erreichte mit 18,7 Milliarden Dollar einen Rekord und stieg um 2 % im Vergleich zum zweiten Quartal 2024. Die nicht leistungsfähigen Kredite stiegen auf 210,9 Millionen Dollar (2,04 % der Bruttokredite). Das Unternehmen hielt eine starke Liquidität mit einer ungenutzten Kreditaufnahme von 5,1 Milliarden Dollar und erreichte einen rekordhohen buchwertbezogenen Wert von 32,38 Dollar pro Aktie, ein Anstieg von 25 % im Jahresvergleich.
- Record-high total assets of $18.7 billion, up 10% from December 2023
- Tangible book value per share reached record $32.38, up 25% YoY
- Strong liquidity position with $11.1 billion (59% of total assets) in liquid assets
- Net interest income increased 13% YoY to $132.8 million
- Core deposits grew 25% to $10.1 billion from December 2023
- Net income decreased 25% YoY to $61.3 million
- Diluted EPS declined 30% YoY to $1.17
- Non-performing loans increased to 2.04% of gross loans from 0.80% in December 2023
- Negative fair market value adjustments of $14.4 million impacted earnings
- Efficiency ratio deteriorated to 41.00% from 27.97% YoY
Insights
The Q3 2024 results show mixed performance with some concerning trends. Net income dropped
- Asset quality concerns emerged with non-performing loans increasing to
2.04% of gross loans, up from0.80% at year-end 2023 - Strong liquidity position with
$5.1 billion in unused borrowing capacity and$11.1 billion in liquid assets - Core deposits grew
25% year-over-year, reducing reliance on brokered deposits - Strategic risk management through
$629 million healthcare loan securitization
Despite challenges, the bank's fundamentals remain solid with record assets of
The deteriorating credit metrics require attention. Non-performing loans surged to
- Credit protection arrangements covering
$1.3 billion in loans - Strong loan loss coverage ratio - current reserves could absorb 13 years of losses at recent rates
- Well-collateralized positions despite classification increases
The recent interest rate decline could help stabilize credit quality, but continued vigilance is essential.
- Third quarter 2024 net income of
$61.3 million 25% compared to third quarter of 2023 and decreased20% compared to the second quarter 2024, reflecting unfavorable fair market value adjustments to derivatives and servicing rights, and an increase in specific reserves on loans as part of the allowance for credit losses. - Third quarter 2024 diluted earnings per common share of
$1.17 30% compared to the third quarter of 2023 and decreased21% compared to the second quarter of 2024. - Unfavorable fair market value adjustments to interest rate floor derivatives on loans and servicing rights of
$7.7 million $6.7 million $0.24 - Total assets of
$18.7 billion 2% compared to June 30, 2024, and increasing10% compared to December 31, 2023. - Tangible book value per common share reached a record-high of
$32.38 25% compared to$25.82 4% compared to$31.27 - As of September 30, 2024, the Company had
$5.1 billion 27% of total assets. - The Company's most liquid assets are in unrestricted cash, short-term investments, including interest-earning demand deposits, mortgage loans in process of securitization, loans held for sale, and warehouse repurchase agreements included in loans receivable. Taken together, with unused borrowing capacity, these totaled
$11.1 billion 59% , of the$18.7 billion - Loans receivable of
$10.3 billion $671.3 million 6% , compared to June 30, 2024, and increased$134.1 million 1% , compared to December 31, 2023. - In September 2024 the Company sold
$629 million $535 million 80% lower capital requirement than bridge loans.
"Despite a few isolated credit issues and unfavorable fair market value adjustments related to derivatives and servicing rights, our quarterly results underscore the robust, underlying strength of our core businesses. We surpassed several previous records, reaching
Michael J.
Net income of
- a
$15.4 million 13% , increase in net interest income, - a
$6.0 million 56% , increase in gain on sale of loans, - a
$5.0 million 20% , decrease in provision for income taxes, - an
$18.9 million 109% , decrease in loan servicing fees, primarily due to negative fair market value adjustments to servicing rights, - an
$18.4 million 43% , increase in noninterest expense, primarily driven by salaries and employee benefits that reflected higher commissions on higher production volume, increases in deposit insurance expenses, and ongoing premium expense associated with the credit default swap, - a
$5.6 million - a
$2.9 million 72% , increase in the provision for credit losses primarily related to increased specific reserves.
Net income of
- a
$5.6 million 50% , increase in gain on sale of loans, - a
$4.7 million 4% , increase in net interest income, - a
$3.1 million 31% , decrease in the provision for credit losses, - a
$2.7 million 12% , decrease in provision for income taxes, - a
$12.3 million 114% , decrease in loan servicing fees, primarily due to negative fair market value adjustments to servicing rights, - a
$10.9 million 22% , increase in noninterest expense, primarily driven by salaries and employee benefits that reflected higher commissions on higher production volume and increases in deposit insurance expenses, and - a
$6.5 million
Total Assets
Total assets of
Return on average assets was
Asset Quality
The allowance for credit losses on loans of
The
The Company recorded charge-offs for three customers, primarily in the multi-family loan portfolio, for
As of September 30, 2024, non-performing loans were
All substandard loans as of September 30, 2024 have been evaluated for impairment and these loans have specific reserves of
In addition to elevated reserves for credit losses on loans, the Company has been making additional efforts to minimize its credit risk through loan sale and securitization activities since 2019. In April 2023 and March 2024, the Company strategically entered into credit protection arrangements through a credit linked note and credit default swap, respectively, for
Securities Available for Sale
Total securities available for sale of
Securities Held to Maturity
Total securities held to maturity of
Total Deposits
Total deposits of
Core deposits of
Total brokered deposits of
Liquidity
Cash balances of
This liquidity enhances the ability to effectively manage interest expense and asset levels in the future. Additionally, the Company's business model is designed to continuously sell or securitize a significant portion of its loans, which provides flexibility in managing its liquidity.
Comparison of Operating Results for the Three Months Ended
September 30, 2024 and 2023
Net Interest Income of
- Net interest margin of
2.99% remained unchanged. The margin was negatively impacted by 6 basis points in the third quarter of 2024 from the net reversal of$2.9 million - Interest rate spread of
2.43% decreased 1 basis point compared to2.44% .
Interest Income of
- Average balances of
$14.6 billion 9% compared to$13.4 billion - Average yields on securities available for sale of
5.84% increased 210 basis points compared to3.74% . - Average balances of
$1.0 billion $354.6 million 54% , compared to$656.6 million
Interest Expense of
- Average balances of
$2.5 billion $1.8 billion 254% , compared to$711.9 million - Average balances of
$5.3 billion 9% compared to$4.9 billion - Average interest rates of
6.39% for borrowings decreased 271 basis points compared to9.10% . - Average interest rates of
5.47% for certificates of deposit increased 13 basis points compared to5.34% .
Noninterest Income of
- Loan servicing fees included a
$6.7 million $1.6 million $5.1 million $11.6 million $1.2 million $10.4 million - Other income included a
$7.7 million - Gain on sale of loans increased
$6.0 million
Noninterest Expense of
- The efficiency ratio of
41.00% increased 1,303 basis points compared to27.97% .
Comparison of Operating Results for the Three Months Ended
September 30, 2024 and June 30, 2024
Net Interest Income of
- Net interest margin of
2.99% remain unchanged. The margin was negatively impacted by 6 basis points in the third quarter of 2024 from the net reversal of$2.9 million $2.5 million - Interest rate spread of
2.43% decreased 2 basis points compared to2.45% .
Interest Income of
- Average balances of
$14.6 billion 2% compared to$14.3 billion - Average balances of
$1.3 billion 11% compared to$1.2 billion - Average yields on interest earning deposits and other interest or dividends of
6.30% increased 59 basis points compared to5.71% .
Interest Expense of
- Average balances of
$2.5 billion $1.5 billion 144% , compared to$1.0 billion - Average interest rates of
6.39% for borrowings decreased 161 basis points compared to8.00% . - Average balances of
$5.3 billion $363.8 million 7% , compared to$4.9 billion - Average balances of
$5.0 billion $1.5 billion 23% , compared to$6.5 billion
Noninterest Income of
- Loan servicing fees included a
$6.7 million $1.6 million $5.1 million $5.1 million $0.6 million $4.5 million - Other income included a
$7.7 million $0.2 million - Gain on sale of loans increased
$5.6 million
Noninterest Expense of
- The efficiency ratio of
41.00% increased 941 basis points compared to31.59% .
About Merchants Bancorp
Ranked as a top performing
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. 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.
Consolidated Balance Sheets | ||||||||||
(Unaudited) | ||||||||||
(In thousands, except share data) | ||||||||||
September 30, | June 30, | March 31, | December 31, | September 30, | ||||||
2024 | 2024 | 2024 | 2023 | 2023 | ||||||
Assets | ||||||||||
Cash and due from banks | $ 12,214 | $ 10,242 | $ 17,924 | $ 15,592 | $ 10,633 | |||||
Interest-earning demand accounts | 589,692 | 530,640 | 490,831 | 568,830 | 396,605 | |||||
Cash and cash equivalents | 601,906 | 540,882 | 508,755 | 584,422 | 407,238 | |||||
Securities purchased under agreements to resell | 3,279 | 3,304 | 3,329 | 3,349 | 3,385 | |||||
Mortgage loans in process of securitization | 430,966 | 209,244 | 142,629 | 110,599 | 476,047 | |||||
Securities available for sale ( | 953,063 | 1,017,019 | 1,061,288 | 1,113,687 | 624,586 | |||||
Securities held to maturity ( | 1,755,047 | 1,291,110 | 1,175,167 | 1,204,217 | 1,012,801 | |||||
Federal Home Loan Bank (FHLB) stock and other equity securities | 184,050 | 67,499 | 64,215 | 48,578 | 48,219 | |||||
Loans held for sale (includes | 3,808,234 | 3,483,076 | 3,503,131 | 3,144,756 | 3,477,036 | |||||
Loans receivable, net of allowance for credit losses on loans of | 10,261,890 | 10,933,189 | 10,690,513 | 10,127,801 | 9,910,681 | |||||
Premises and equipment, net | 53,161 | 46,833 | 42,450 | 42,342 | 36,730 | |||||
Servicing rights | 177,327 | 178,776 | 172,200 | 158,457 | 162,141 | |||||
Interest receivable | 86,612 | 90,360 | 90,303 | 91,346 | 78,401 | |||||
Goodwill | 8,014 | 8,014 | 8,014 | 15,845 | 15,845 | |||||
Other assets and receivables | 329,427 | 343,116 | 360,582 | 307,117 | 242,126 | |||||
Total assets | $ 18,652,976 | $ 18,212,422 | $ 17,822,576 | $ 16,952,516 | $ 16,495,236 | |||||
Liabilities and Shareholders' Equity | ||||||||||
Liabilities | ||||||||||
Deposits | ||||||||||
Noninterest-bearing | $ 311,386 | $ 383,260 | $ 319,872 | $ 520,070 | $ 287,846 | |||||
Interest-bearing | 12,580,501 | 14,533,807 | 13,655,789 | 13,541,390 | 12,719,492 | |||||
Total deposits | 12,891,887 | 14,917,067 | 13,975,661 | 14,061,460 | 13,007,338 | |||||
Borrowings | 3,568,721 | 1,159,206 | 1,835,985 | 964,127 | 1,654,075 | |||||
Deferred and current tax liabilities, net | 19,530 | 25,098 | 43,935 | 19,923 | 18,006 | |||||
Other liabilities | 233,731 | 222,904 | 190,527 | 205,922 | 183,102 | |||||
Total liabilities | 16,713,869 | 16,324,275 | 16,046,108 | 15,251,432 | 14,862,521 | |||||
Commitments and Contingencies | ||||||||||
Shareholders' Equity | ||||||||||
Common stock, without par value | ||||||||||
Authorized - 75,000,000 shares | ||||||||||
Issued and outstanding - 45,764,023 shares, 45,757,567 shares, 43,354,718 shares, 43,242,928 shares and 43,240,212 shares | 239,448 | 238,492 | 139,950 | 140,365 | 139,609 | |||||
Preferred stock, without par value - 5,000,000 total shares authorized | ||||||||||
Authorized - no shares at September 30, 2024 or June 30, 2024 and 3,500,000 shares at March 31, 2024 and all prior periods presented | ||||||||||
Issued and outstanding - no shares at September 30, 2024 or June 30, 2024 and 2,081,800 shares at March 31, 2024 and all prior periods presented | — | — | 50,221 | 50,221 | 50,221 | |||||
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 | |||||
Authorized - 200,000 shares | ||||||||||
Issued and outstanding - 196,181 shares (equivalent to 7,847,233 depositary shares) | 191,084 | 191,084 | 191,084 | 191,084 | 191,084 | |||||
Authorized - 300,000 shares | ||||||||||
Issued and outstanding - 142,500 shares (equivalent to 5,700,000 depositary shares) | 137,459 | 137,459 | 137,459 | 137,459 | 137,459 | |||||
Retained earnings | 1,250,176 | 1,200,778 | 1,138,083 | 1,063,599 | 998,252 | |||||
Accumulated other comprehensive income (loss) | 96 | (510) | (1,173) | (2,488) | (4,754) | |||||
Total shareholders' equity | 1,939,107 | 1,888,147 | 1,776,468 | 1,701,084 | 1,632,715 | |||||
Total liabilities and shareholders' equity | $ 18,652,976 | $ 18,212,422 | $ 17,822,576 | $ 16,952,516 | $ 16,495,236 | |||||
Consolidated Statement of Income | |||||||||||||
(Unaudited) | |||||||||||||
(In thousands, except share data) | |||||||||||||
Three Months Ended | Change | ||||||||||||
September 30, | June 30, | September 30, | 3Q24 | 3Q24 | |||||||||
2024 | 2024 | 2023 | vs. 2Q24 | vs. 3Q23 | |||||||||
Interest Income | |||||||||||||
Loans | $ | 290,259 | $ | 284,421 | $ | 266,561 | 2 % | 9 % | |||||
Mortgage loans in process of securitization | 4,062 | 3,044 | 2,583 | 33 % | 57 % | ||||||||
Investment securities: | |||||||||||||
Available for sale | 14,855 | 14,784 | 6,182 | — | 140 % | ||||||||
Held to maturity | 22,081 | 19,799 | 17,427 | 12 % | 27 % | ||||||||
FHLB stock and other equity securities (dividends) | 3,128 | 1,277 | 572 | 145 % | 447 % | ||||||||
Other | 4,543 | 4,948 | 3,351 | -8 % | 36 % | ||||||||
Total interest income | 338,928 | 328,273 | 296,676 | 3 % | 14 % | ||||||||
Interest Expense | |||||||||||||
Deposits | 165,675 | 179,651 | 162,906 | -8 % | 2 % | ||||||||
Borrowed funds | 40,432 | 20,503 | 16,334 | 97 % | 148 % | ||||||||
Total interest expense | 206,107 | 200,154 | 179,240 | 3 % | 15 % | ||||||||
Net Interest Income | 132,821 | 128,119 | 117,436 | 4 % | 13 % | ||||||||
Provision for credit losses | 6,898 | 9,965 | 4,014 | -31 % | 72 % | ||||||||
Net Interest Income After Provision for Credit Losses | 125,923 | 118,154 | 113,422 | 7 % | 11 % | ||||||||
Noninterest Income | |||||||||||||
Gain on sale of loans | 16,731 | 11,168 | 10,758 | 50 % | 56 % | ||||||||
Loan servicing fees, net | (1,509) | 10,827 | 17,384 | -114 % | -109 % | ||||||||
Mortgage warehouse fees | 1,620 | 1,524 | 1,858 | 6 % | -13 % | ||||||||
Syndication and asset management fees | 1,834 | 3,233 | 2,368 | -43 % | -23 % | ||||||||
Other income | (1,934) | 4,599 | 3,700 | -142 % | -152 % | ||||||||
Total noninterest income | 16,742 | 31,351 | 36,068 | -47 % | -54 % | ||||||||
Noninterest Expense | |||||||||||||
Salaries and employee benefits | 35,218 | 28,373 | 27,052 | 24 % | 30 % | ||||||||
Loan expense | 1,114 | 993 | 1,038 | 12 % | 7 % | ||||||||
Occupancy and equipment | 2,231 | 2,239 | 2,196 | — | 2 % | ||||||||
Professional fees | 3,439 | 3,556 | 2,555 | -3 % | 35 % | ||||||||
Deposit insurance expense | 8,981 | 5,579 | 3,568 | 61 % | 152 % | ||||||||
Technology expense | 2,068 | 1,859 | 1,609 | 11 % | 29 % | ||||||||
Other expense | 8,267 | 7,781 | 4,912 | 6 % | 68 % | ||||||||
Total noninterest expense | 61,318 | 50,380 | 42,930 | 22 % | 43 % | ||||||||
Income Before Income Taxes | 81,347 | 99,125 | 106,560 | -18 % | -24 % | ||||||||
Provision for income taxes | 20,074 | 22,732 | 25,056 | -12 % | -20 % | ||||||||
Net Income | $ | 61,273 | $ | 76,393 | $ | 81,504 | -20 % | -25 % | |||||
Dividends on preferred stock | (7,757) | (7,757) | (8,668) | — | -11 % | ||||||||
Impact of preferred stock redemption | — | (1,823) | — | 100 % | — | ||||||||
Net Income Available to Common Shareholders | $ | 53,516 | $ | 66,813 | $ | 72,836 | -20 % | -27 % | |||||
Basic Earnings Per Share | $ | 1.17 | $ | 1.50 | $ | 1.68 | -22 % | -30 % | |||||
Diluted Earnings Per Share | $ | 1.17 | $ | 1.49 | $ | 1.68 | -21 % | -30 % | |||||
Weighted-Average Shares Outstanding | |||||||||||||
Basic | 45,759,667 | 44,569,345 | 43,238,724 | ||||||||||
Diluted | 45,910,052 | 44,698,324 | 43,351,208 | ||||||||||
Consolidated Statement of Income | ||||||||
(Unaudited) | ||||||||
(In thousands, except share data) | ||||||||
Nine Months Ended | ||||||||
September 30, | September 30, | |||||||
2024 | 2023 | Change | ||||||
Interest Income | ||||||||
Loans | $ | 846,678 | $ | 684,743 | 24 % | |||
Mortgage loans in process of securitization | 8,826 | 7,358 | 20 % | |||||
Investment securities: | ||||||||
Available for sale | 44,027 | 14,012 | 214 % | |||||
Held to maturity | 62,402 | 50,492 | 24 % | |||||
FHLB stock and other equity securities (dividends) | 5,249 | 1,470 | 257 % | |||||
Other | 14,192 | 7,964 | 78 % | |||||
Total interest income | 981,374 | 766,039 | 28 % | |||||
Interest Expense | ||||||||
Deposits | 516,348 | 405,149 | 27 % | |||||
Borrowed funds | 77,030 | 37,144 | 107 % | |||||
Total interest expense | 593,378 | 442,293 | 34 % | |||||
Net Interest Income | 387,996 | 323,746 | 20 % | |||||
Provision for credit losses | 21,589 | 33,484 | -36 % | |||||
Net Interest Income After Provision for Credit Losses | 366,407 | 290,262 | 26 % | |||||
Noninterest Income | ||||||||
Gain on sale of loans | 37,255 | 28,841 | 29 % | |||||
Loan servicing fees, net | 28,720 | 28,360 | 1 % | |||||
Mortgage warehouse fees | 4,126 | 5,751 | -28 % | |||||
Loss on sale of investments available for sale (1) | (108) | — | -100 % | |||||
Syndication and asset management fees | 10,370 | 7,476 | 39 % | |||||
Other income | 8,604 | 9,786 | -12 % | |||||
Total noninterest income | 88,967 | 80,214 | 11 % | |||||
Noninterest Expense | ||||||||
Salaries and employee benefits | 93,187 | 74,922 | 24 % | |||||
Loan expense | 3,063 | 2,749 | 11 % | |||||
Occupancy and equipment | 6,707 | 6,884 | -3 % | |||||
Professional fees | 11,094 | 8,547 | 30 % | |||||
Deposit insurance expense | 19,685 | 9,552 | 106 % | |||||
Technology expense | 5,781 | 4,757 | 22 % | |||||
Other expense | 21,093 | 14,611 | 44 % | |||||
Total noninterest expense | 160,610 | 122,022 | 32 % | |||||
Income Before Income Taxes | 294,764 | 248,454 | 19 % | |||||
Provision for income taxes (2) | 70,044 | 46,693 | 50 % | |||||
Net Income | $ | 224,720 | $ | 201,761 | 11 % | |||
Dividends on preferred stock | (24,181) | (26,003) | -7 % | |||||
Impact of preferred stock redemption | (1,823) | — | -100 % | |||||
Net Income Available to Common Shareholders | $ | 198,716 | $ | 175,758 | 13 % | |||
Basic Earnings Per Share | $ | 4.46 | $ | 4.07 | 10 % | |||
Diluted Earnings Per Share | $ | 4.45 | $ | 4.06 | 10 % | |||
Weighted-Average Shares Outstanding | ||||||||
Basic | 44,549,432 | 43,218,125 | ||||||
Diluted | 44,696,107 | 43,317,343 | ||||||
(1) Includes | ||||||||
(2) Includes | ||||||||
Key Operating Results | ||||||||||||
(Unaudited) | ||||||||||||
($ in thousands, except share data) | ||||||||||||
Three Months Ended | Change | |||||||||||
September 30, | June 30, | September 30, | 3Q24 | 3Q24 | ||||||||
2024 | 2024 | 2023 | vs. 2Q24 | vs. 3Q23 | ||||||||
Noninterest expense | $ 61,318 | $ 50,380 | $ 42,930 | 22 % | 43 % | |||||||
Net interest income (before provision for credit losses) | 132,821 | 128,119 | 117,436 | 4 % | 13 % | |||||||
Noninterest income | 16,742 | 31,351 | 36,068 | -47 % | -54 % | |||||||
Total income | $ 149,563 | $ 159,470 | $ 153,504 | -6 % | -3 % | |||||||
Efficiency ratio | 41.00 % | 31.59 % | 27.97 % | 941 | bps | 1,303 | bps | |||||
Average assets | $ 18,311,393 | $ 17,814,191 | $ 16,031,015 | 3 % | 14 % | |||||||
Net income | 61,273 | 76,393 | 81,504 | -20 % | -25 % | |||||||
Return on average assets before annualizing | 0.33 % | 0.43 % | 0.51 % | |||||||||
Annualization factor | 4.00 | 4.00 | 4.00 | |||||||||
Return on average assets | 1.34 % | 1.72 % | 2.03 % | (38) | bps | (69) | bps | |||||
Return on average tangible common shareholders' equity (1) | 14.43 % | 19.55 % | 26.69 % | (512) | bps | (1,226) | bps | |||||
Tangible book value per common share (1) | $ 32.38 | $ 31.27 | $ 25.82 | 4 % | 25 % | |||||||
Tangible common shareholders' equity/tangible assets (1) | 7.95 % | 7.86 % | 6.78 % | 9 | bps | 117 | bps | |||||
Consolidated ratios | ||||||||||||
Total capital/risk-weighted assets(2) | 12.4 | % | 12.0 | % | 11.5 | % | ||||||
Tier I capital/risk-weighted assets(2) | 11.7 | % | 11.4 | % | 10.9 | % | ||||||
Common Equity Tier I capital/risk-weighted assets(2) | 9.0 | % | 8.7 | % | 7.6 | % | ||||||
Tier I capital/average assets(2) | 10.5 | % | 10.6 | % | 10.1 | % | ||||||
(1) Non-GAAP financial measure - see "Reconciliation of Non-GAAP Measures" below: | ||||||||||||
(2) As defined by regulatory agencies; September 30, 2024 shown as estimates and prior periods shown as reported. | ||||||||||||
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 shareholders' equity is calculated by excluding the balance of goodwill and other intangible assets and preferred stock from the calculation of total equity. Tangible Assets is calculated by excluding the balance of goodwill and intangible assets. Tangible book value per share is calculated by dividing tangible common shareholders' equity by the number of shares outstanding. | ||||||||||||
Three Months Ended | Change | |||||||||||
September 30, | June 30, | September 30, | 3Q24 | 3Q24 | ||||||||
2024 | 2024 | 2023 | vs. 2Q24 | vs. 3Q23 | ||||||||
Net income | $ 61,273 | $ 76,393 | $ 81,504 | -20 % | -25 % | |||||||
Less: preferred stock dividends | (7,757) | (7,757) | (8,668) | — | -11 % | |||||||
Less: preferred stock redemption | - | (1,823) | - | -100 % | — | |||||||
Net income available to common shareholders | $ 53,516 | $ 66,813 | $ 72,836 | -20 % | -27 % | |||||||
Average shareholders' equity | $ 1,941,026 | $ 1,824,730 | $ 1,607,779 | 6 % | 21 % | |||||||
Less: average goodwill & intangibles | (8,092) | (8,140) | (16,742) | -1 % | -52 % | |||||||
Less: average preferred stock | (449,387) | (449,387) | (499,608) | — | -10 % | |||||||
Average tangible common shareholders' equity | $ 1,483,547 | $ 1,367,203 | $ 1,091,429 | 9 % | 36 % | |||||||
Annualization factor | 4.00 | 4.00 | 4.00 | |||||||||
Return on average tangible common shareholders' equity | 14.43 % | 19.55 % | 26.69 % | (512) | bps | (1,226) | bps | |||||
Total equity | $ 1,939,107 | $ 1,888,147 | $ 1,632,715 | 3 % | 19 % | |||||||
Less: goodwill and intangibles | (8,079) | (8,108) | (16,676) | — | -52 % | |||||||
Less: preferred stock | (449,387) | (449,387) | (499,608) | — | -10 % | |||||||
Tangible common shareholders' equity | $ 1,481,641 | $ 1,430,652 | $ 1,116,431 | 4 % | 33 % | |||||||
Assets | $ 18,652,976 | $ 18,212,422 | $ 16,495,236 | 2 % | 13 % | |||||||
Less: goodwill and intangibles | (8,079) | (8,108) | (16,676) | — | -52 % | |||||||
Tangible assets | $ 18,644,897 | $ 18,204,314 | $ 16,478,560 | 2 % | 13 % | |||||||
Ending common shares | 45,764,023 | 45,757,567 | 43,240,212 | |||||||||
Tangible book value per common share | $ 32.38 | $ 31.27 | $ 25.82 | 4 % | 25 % | |||||||
Tangible common shareholders' equity/tangible assets | 7.95 % | 7.86 % | 6.78 % | 9 | bps | 117 | bps | |||||
Key Operating Results | ||||||||
(Unaudited) | ||||||||
($ in thousands, except share data) | ||||||||
Nine Months Ended | ||||||||
September 30, | September 30, | |||||||
2024 | 2023 | Change | ||||||
Noninterest expense | $ 160,610 | $ 122,022 | 32 % | |||||
Net interest income (before provision for credit losses) | 387,996 | 323,746 | 20 % | |||||
Noninterest income | 88,967 | 80,214 | 11 % | |||||
Total income | $ 476,963 | $ 403,960 | 18 % | |||||
Efficiency ratio | 33.67 % | 30.21 % | 346 | bps | ||||
Average assets | $ 17,642,004 | $ 14,541,523 | 21 % | |||||
Net income | 224,720 | 201,761 | 11 % | |||||
Return on average assets before annualizing | 1.27 % | 1.39 % | ||||||
Annualization factor | 1.33 | 1.33 | ||||||
Return on average assets | 1.69 % | 1.85 % | (16) | bps | ||||
Return on average tangible common shareholders' equity (1) | 19.39 % | 22.61 % | (322) | bps | ||||
Tangible book value per common share (1) | $ 32.38 | $ 25.82 | 25 % | |||||
Tangible common shareholders' equity/tangible assets (1) | 7.95 % | 6.78 % | 117 | bps | ||||
(1) Non-GAAP financial measure - see "Reconciliation of Non-GAAP Measures" below: | ||||||||
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. | ||||||||
Nine Months Ended | ||||||||
September 30, | September 30, | |||||||
2024 | 2023 | Change | ||||||
Net income | $ 224,720 | $ 201,761 | 11 % | |||||
Less: preferred stock dividends | (24,181) | (26,003) | -7 % | |||||
Less: preferred stock redemption | (1,823) | - | -100 % | |||||
Net income available to common shareholders | $ 198,716 | $ 175,758 | 13 % | |||||
Average shareholders' equity | $ 1,838,182 | $ 1,550,196 | 19 % | |||||
Less: average goodwill & intangibles | (8,906) | (16,859) | -47 % | |||||
Less: average preferred stock | (466,066) | (499,608) | -7 % | |||||
Average tangible common shareholders' equity | $ 1,363,210 | $ 1,033,729 | 32 % | |||||
Annualization factor | 1.33 | 1.33 | ||||||
Return on average tangible common shareholders' equity | 19.39 % | 22.61 % | (322) | bps | ||||
Total equity | $ 1,939,107 | $ 1,632,715 | 19 % | |||||
Less: goodwill and intangibles | (8,079) | (16,676) | -52 % | |||||
Less: preferred stock | (449,387) | (499,608) | -10 % | |||||
Tangible common shareholders' equity | $ 1,481,641 | $ 1,116,431 | 33 % | |||||
Assets | $ 18,652,976 | $ 16,495,236 | 13 % | |||||
Less: goodwill and intangibles | (8,079) | (16,676) | -52 % | |||||
Tangible assets | $ 18,644,897 | $ 16,478,560 | 13 % | |||||
Ending common shares | 45,764,023 | 43,240,212 | ||||||
Tangible book value per common share | $ 32.38 | $ 25.82 | 25 % | |||||
Tangible common shareholders' equity/tangible assets | 7.95 % | 6.78 % | 117 | bps | ||||
Merchants Bancorp | ||||||||||||
Average Balance Analysis | ||||||||||||
($ in thousands) | ||||||||||||
(Unaudited) | ||||||||||||
Three Months Ended | Three Months Ended | Three Months Ended | ||||||||||
September 30, 2024 | June 30, 2024 | September 30, 2023 | ||||||||||
Average | Yield/ | Average | Yield/ | Average | Yield/ | |||||||
Balance | Interest | Rate | Balance | Interest | Rate | Balance | Interest | Rate | ||||
Assets: | ||||||||||||
Interest-earning deposits, and other interest or dividends | $ 484,712 | $ 7,671 | 6.30 % | $ 438,445 | $ 6,225 | 5.71 % | $ 259,630 | $ 3,923 | 5.99 % | |||
Securities available for sale | 1,011,146 | 14,855 | 5.84 % | 1,039,388 | 14,784 | 5.72 % | 656,561 | 6,182 | 3.74 % | |||
Securities held to maturity | 1,288,466 | 22,081 | 6.82 % | 1,160,170 | 19,799 | 6.86 % | 1,040,070 | 17,427 | 6.65 % | |||
Mortgage loans in process of securitization | 308,362 | 4,062 | 5.24 % | 234,706 | 3,044 | 5.22 % | 208,767 | 2,583 | 4.91 % | |||
Loans and loans held for sale | 14,603,750 | 290,259 | 7.91 % | 14,347,165 | 284,421 | 7.97 % | 13,399,854 | 266,561 | 7.89 % | |||
Total interest-earning assets | 17,696,436 | 338,928 | 7.62 % | 17,219,874 | 328,273 | 7.67 % | 15,564,882 | 296,676 | 7.56 % | |||
Allowance for credit losses on loans | (81,178) | (76,456) | (63,449) | |||||||||
Noninterest-earning assets | 696,135 | 670,773 | 529,582 | |||||||||
Total assets | $ 18,311,393 | $ 17,814,191 | $ 16,031,015 | |||||||||
Liabilities & Shareholders' Equity: | ||||||||||||
Interest-bearing checking | $ 5,297,908 | 62,603 | 4.70 % | $ 4,935,123 | 58,128 | 4.74 % | $ 4,882,727 | 58,642 | 4.76 % | |||
Savings deposits | 145,305 | 17 | 0.05 % | # | 145,262 | 19 | 0.05 % | 241,861 | 340 | 0.56 % | ||
Money market | 2,816,906 | 33,858 | 4.78 % | # | 2,788,335 | 33,207 | 4.79 % | 2,798,325 | 33,235 | 4.71 % | ||
Certificates of deposit | 5,032,159 | 69,197 | 5.47 % | # | 6,535,651 | 88,297 | 5.43 % | 5,255,573 | 70,689 | 5.34 % | ||
Total interest-bearing deposits | 13,292,278 | 165,675 | 4.96 % | 14,404,371 | 179,651 | 5.02 % | 13,178,486 | 162,906 | 4.90 % | |||
Borrowings | 2,518,405 | 40,432 | 6.39 % | 1,031,180 | 20,503 | 8.00 % | 711,948 | 16,334 | 9.10 % | |||
Total interest-bearing liabilities | 15,810,683 | 206,107 | 5.19 % | 15,435,551 | 200,154 | 5.22 % | 13,890,434 | 179,240 | 5.12 % | |||
Noninterest-bearing deposits | 327,930 | 331,246 | 333,155 | |||||||||
Noninterest-bearing liabilities | 231,754 | 222,664 | 199,647 | |||||||||
Total liabilities | 16,370,367 | 15,989,461 | 14,423,236 | |||||||||
Shareholders' equity | 1,941,026 | 1,824,730 | 1,607,779 | |||||||||
Total liabilities and shareholders' equity | $ 18,311,393 | $ 17,814,191 | $ 16,031,015 | |||||||||
Net interest income | $ 132,821 | |||||||||||
Net interest spread | 2.43 % | 2.45 % | 2.44 % | |||||||||
Net interest-earning assets | $ 1,885,753 | $ 1,784,323 | $ 1,674,448 | |||||||||
Net interest margin | 2.99 % | 2.99 % | 2.99 % | |||||||||
Average interest-earning assets to average interest-bearing liabilities | 111.93 % | 111.56 % | 112.05 % | |||||||||
Supplemental Results | ||||||||||||||||
(Unaudited) | ||||||||||||||||
($ in thousands) | ||||||||||||||||
Net Income | Net Income | |||||||||||||||
Three Months Ended | Nine Months Ended | |||||||||||||||
September 30, | June 30, | September 30, | September 30, | |||||||||||||
2024 | 2024 | 2023 | 2024 | 2023 | ||||||||||||
Segment | ||||||||||||||||
Multi-family Mortgage Banking | $ 8,068 | $ 9,037 | $ 14,685 | $ 33,714 | $ 27,893 | |||||||||||
Mortgage Warehousing | 15,940 | 22,270 | 19,926 | 58,400 | 47,163 | |||||||||||
Banking | 44,983 | 52,378 | 52,445 | 153,786 | 144,402 | |||||||||||
Other | (7,718) | (7,292) | (5,552) | (21,180) | (17,697) | |||||||||||
Total | $ 61,273 | $ 76,393 | $ 81,504 | $ 224,720 | $ 201,761 | |||||||||||
Total Assets | ||||||||||||||||
September 30, 2024 | June 30, 2024 | December 31, 2023 | ||||||||||||||
Amount | % | Amount | % | Amount | % | |||||||||||
Segment | ||||||||||||||||
Multi-family Mortgage Banking | $ 453,281 | 2 % | $ 428,299 | 2 % | $ 411,097 | 2 % | ||||||||||
Mortgage Warehousing | 5,842,489 | 31 % | 5,626,055 | 31 % | 4,522,175 | 27 % | ||||||||||
Banking | 12,035,581 | 65 % | 11,885,484 | 65 % | 11,760,943 | 69 % | ||||||||||
Other | 321,625 | 2 % | 272,584 | 2 % | 258,301 | 2 % | ||||||||||
Total | $ 18,652,976 | 100 % | $ 18,212,422 | 100 % | $ 16,952,516 | 100 % | ||||||||||
Gain on Sale of Loans | Gain on Sale of Loans | |||||||||||||||
Three Months Ended | Nine Months Ended | |||||||||||||||
September 30, | June 30, | September 30, | September 30, | |||||||||||||
2024 | 2024 | 2023 | 2024 | 2023 | ||||||||||||
Loan Type | ||||||||||||||||
Multi-family | $ 15,302 | $ 9,083 | $ 8,616 | $ 32,808 | $ 23,897 | |||||||||||
Single-family | 690 | 524 | 951 | 1,494 | 1,430 | |||||||||||
Small Business Association (SBA) | 739 | 1,561 | 1,191 | 2,953 | 3,514 | |||||||||||
Total | $ 16,731 | $ 11,168 | $ 10,758 | $ 37,255 | $ 28,841 | |||||||||||
Supplemental Results | ||||||||||||||||
(Unaudited) | ||||||||||||||||
($ in thousands) | ||||||||||||||||
Loans Receivable and Loans Held for Sale | ||||||||||||||||
September 30, | June 30, | December 31, | ||||||||||||||
2024 | 2024 | 2023 | ||||||||||||||
Mortgage warehouse repurchase agreements | $ 1,213,429 | $ 1,369,965 | $ 752,468 | |||||||||||||
Residential real estate (1) | 1,317,234 | 1,345,656 | 1,324,305 | |||||||||||||
Multi-family financing | 4,456,129 | 4,160,420 | 4,006,160 | |||||||||||||
Healthcare financing | 1,733,674 | 2,495,910 | 2,356,689 | |||||||||||||
Commercial and commercial real estate (2)(3) | 1,548,689 | 1,566,809 | 1,643,081 | |||||||||||||
Agricultural production and real estate | 71,391 | 70,244 | 103,150 | |||||||||||||
Consumer and margin loans | 5,893 | 5,213 | 13,700 | |||||||||||||
10,346,439 | 11,014,217 | 10,199,553 | ||||||||||||||
Less: Allowance for credit losses on loans | 84,549 | 81,028 | 71,752 | |||||||||||||
Loans receivable | $ 10,261,890 | $ 10,933,189 | $ 10,127,801 | |||||||||||||
Loans held for sale | 3,808,234 | 3,483,076 | 3,144,756 | |||||||||||||
Total loans, net of allowance | $ 14,070,124 | $ 14,416,265 | $ 13,272,557 | |||||||||||||
(1) Includes | ||||||||||||||||
(2) Includes | ||||||||||||||||
(3) Includes only | ||||||||||||||||
Loan Credit Risk Profile | ||||||||||||||||
September 30, 2024 | June 30, 2024 | December 31, 2023 | ||||||||||||||
Amount | % | Amount | % | Amount | % | |||||||||||
Pass | $ 9,707,205 | 93.8 % | $ 10,523,378 | 95.6 % | $ 9,879,659 | 96.9 % | ||||||||||
Special mention | 351,407 | 3.4 % | 244,000 | 2.2 % | 191,267 | 1.9 % | ||||||||||
Substandard | 287,827 | 2.8 % | 246,839 | 2.2 % | 128,577 | 1.2 % | ||||||||||
Doubtful | — | — | — | — | 50 | — | ||||||||||
Loans receivable | $ 10,346,439 | 100.0 % | $ 11,014,217 | 100.0 % | $ 10,199,553 | 100.0 % | ||||||||||
Charge-offs (year-to-date) | $ 6,437 | $ 4,377 | $ 9,791 | |||||||||||||
Recoveries (year-to-date) | $ 23 | $ 16 | $ 41 | |||||||||||||
Nonperforming Loans | ||||||||||||||||
September 30, | June 30, | December 31, | ||||||||||||||
2024 | 2024 | 2023 | ||||||||||||||
Nonaccrual loans | $ 210,811 | $ 143,319 | $ 73,847 | |||||||||||||
90 days past due and still accruing | 91 | 133 | 8,168 | |||||||||||||
Total nonperforming loans | $ 210,902 | $ 143,452 | $ 82,015 | |||||||||||||
Other real estate owned | $ 896 | — | — | |||||||||||||
Total nonperforming assets | $ 211,798 | $ 143,452 | $ 82,015 | |||||||||||||
Nonperforming loans to total loans | 2.04 % | 1.30 % | 0.80 % | |||||||||||||
Nonperforming assets to total assets | 1.14 % | 0.79 % | 0.48 % | |||||||||||||
View original content to download multimedia:https://www.prnewswire.com/news-releases/merchants-bancorp-reports-third-quarter-2024-results-302288889.html
SOURCE Merchants Bancorp
FAQ
What was Merchants Bancorp's (MBIN) earnings per share in Q3 2024?
How much did MBIN's non-performing loans increase in Q3 2024?
What was Merchants Bancorp's (MBIN) total assets in Q3 2024?
How much unused borrowing capacity did MBIN have as of September 30, 2024?
