Merchants Bank Completes Private Securitization of $1.2 billion in Multifamily Loans

Rhea-AI Summary

On September 22, 2022, Merchants Bancorp (NASDAQ: MBIN) announced the successful completion of a $1.2 billion private securitization of first-lien floating-rate multifamily bridge loans through a real estate mortgage investment conduit (REMIC). Merchants Bank acquired approximately 86.6% of the senior certificates, while third-party investors purchased the remaining subordinated interests. This transaction is expected to reduce risk-weighted assets and provide capital relief under risk-based capital regulations. Merchants Bancorp holds $11.1 billion in assets and $8.3 billion in deposits as of June 30, 2022.

Positive

• Completed a successful private securitization of $1.2 billion in multifamily loans, enhancing capital structure.
• Acquired 86.6% of senior certificates, indicating strong institutional confidence.
• Expected reduction in risk-weighted assets, leading to capital relief under regulatory guidelines.

Negative

• None.

CARMEL, Ind., Sept. 22, 2022 /PRNewswire/ -- Merchants Bancorp ("Merchants") (NASDAQ: MBIN), parent company and registered bank holding company of Merchants Bank of Indiana ("Merchants Bank"), today announced that Merchants Bank completed a private securitization of $1.2 billion of first-lien floating-rate multifamily bridge loans via a real estate mortgage investment conduit (REMIC). In this transaction Merchants Bank acquired senior certificates representing approximately 86.6% of the beneficial interests and unaffiliated, third-party institutional investors purchased subordinate certificates representing the remaining interests. Merchants Bank's wholly owned subsidiary, Merchants Capital Corp., will continue to service the loans. Through this transaction it is expected that Merchants Bank will reduce its risk-weighted assets and receive capital relief under current risk-based capital rules.

About Merchants Bancorp

Ranked as a top performing U.S. public bank by S&P Global Market Intelligence, Merchants Bancorp is a diversified bank holding company headquartered in Carmel, Indiana operating multiple lines of business, including 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 $11.1 billion in assets and $8.3 billion in deposits as of June 30, 2022, conducts its business primarily through its direct and indirect subsidiaries, Merchants Bank of Indiana, Merchants Capital Corp., Merchants Asset Management, LLC, Merchants Capital Investments, LLC, 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 includes "forward-looking" statements as that term is defined in the United States Private Securities Litigation Reform Act of 1995, including with respect to the timing and size of the offering and the anticipated use of proceeds, which statements are subject to a number of risks, uncertainties and assumptions, including, but not limited to those that are described in the "Risk Factors" and "Management's Discussion and Analysis of Financial Condition and Results of Operations" sections of Merchant's Annual Report on Form 10-K for the fiscal year ended December 31, 2021, and other periodic filings with the SEC from time to time (which are available at www.sec.gov). Potential investors should note that the forward-looking statements included in this press release are not a guarantee of future events, and that actual events may differ materially from those made in or suggested by the forward-looking statements. 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," "will likely result," "anticipate," "seek," "estimate," "intend," "plan," "projection," "goal," "target," "outlook," "aim," "annualized," "would" 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 Merchant's industry, management's beliefs and certain assumptions made by Merchant's management, many of which, by their nature, are inherently uncertain and beyond Merchant's control. Any forward-looking statements presented herein are made only as of the date of this press release, and Merchants 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

FAQ

What did Merchants Bancorp announce on September 22, 2022?

Merchants Bancorp announced the completion of a $1.2 billion private securitization of multifamily bridge loans.

What percentage of the securitized loans did Merchants Bank acquire?

Merchants Bank acquired approximately 86.6% of the senior certificates in the securitization.

How will the securitization transaction affect Merchants Bancorp's risk profile?

The transaction is expected to reduce risk-weighted assets and provide capital relief under current regulations.

What are Merchants Bancorp's asset and deposit figures as of June 30, 2022?

As of June 30, 2022, Merchants Bancorp reported assets of $11.1 billion and deposits of $8.3 billion.

What type of loans were securitized by Merchants Bank?

Merchants Bank completed the securitization of first-lien floating-rate multifamily bridge loans.