Form 8-K - Current report

United States

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 8-K

CURRENT REPORT

PURSUANT TO SECTION 13 OR 15(d) OF THE

SECURITIES EXCHANGE ACT OF 1934

Date of Report (Date of earliest event reported): July 29, 2024

Merchants Bancorp

(Exact Name of Registrant as Specified in its Charter)

Indiana

001-38258

20-5747400

(State or Other Jurisdiction

of Incorporation)

(Commission

File Number)

(IRS Employer

Identification No.)

410 Monon Boulevard
Carmel, Indiana 46032
(Address of Principal Executive Offices) (Zip Code)

(317) 569-7420

(Registrant’s Telephone Number, Including Area Code)

Not Applicable
(Former name or former address, if changed since last report)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

¨	Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

¨	Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

¨	Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

¨	Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Securities registered pursuant to Section 12(b) of the Act:

Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Common Stock, without par value	MBIN	NASDAQ
Depositary Shares, each representing a 1/40th interest in a share of Series B Preferred Stock, without par value	MBINO	NASDAQ
Depositary Shares, each representing a 1/40th interest in a share of Series C Preferred Stock, without par value	MBINN	NASDAQ
Depositary Shares, each representing a 1/40th interest in a share of Series D Preferred Stock, without par value	MBINM	NASDAQ

Indicate by check mark whether the registrant is an emerging growth company as deﬁned in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).

Emerging growth company

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised ﬁnancial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ¨

Item 2.02. Results of Operations and Financial Condition.

On July 29, 2024, Merchants Bancorp issued a press release reporting its financial results for the second quarter of 2024. The press release is furnished as Exhibit 99.1 hereto and is incorporated herein by reference.

Item 9.01. Financial Statements and Exhibits.

(d) Exhibits.

Exhibit No.		Description

99.1		Press Release dated July 29, 2024 issued by Merchants Bancorp.
104		Cover Page Interactive Data File. The cover page XBRL tags are embedded within the inline XBRL document.

SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

	MERCHANTS BANCORP


Date: July 29, 2024	By:	/s/ John F. Macke
		Name: John F. Macke
		Title: Chief Financial Officer

Exhibit 99.1

PRESS RELEASE

Merchants Bancorp Reports Second Quarter 2024 Results

For Release July 29, 2024

●

Second quarter 2024 net income of $76.4 million, increased 17% compared to second quarter of 2023 and decreased 12% compared to the first quarter 2024.

●

Second quarter 2024 diluted earnings per common share of $1.49 increased 14% compared to the second quarter of 2023 and decreased 17% compared to the first quarter of 2024.

●

Total assets of $18.2 billion surpassed any level previously reported by the Company, increasing 2% compared to March 31, 2024 and increasing 7% compared to December 31, 2023.

●

On May 13, 2024, the Company completed a common stock offering of 2.4 million shares, resulting in net proceeds of $97.7 million, which contributed to the estimated 70 basis point increase in the common equity tier I capital ratio that reached 8.7% as of June 30, 2024.

●

Tangible book value per common share reached a record-high of $31.27 and increased 30% compared to $24.14 in the second quarter of 2023 and increased 7% compared to $29.26 in the first quarter of 2024.

●

As of June 30, 2024, the Company had $7.0 billion in unused borrowing capacity with the Federal Home Loan Bank and the Federal Reserve Discount window, representing 39% 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 $12.6 billion, or 69%, of the $18.2 billion in total assets as of June 30, 2024.

●

Loans receivable of $10.9 billion, net of allowance for credit losses on loans, increased $242.7 million, or 2%, compared to March 31, 2024, and increased $805.4 million, or 8%, compared to December 31, 2023.

●

The efficiency ratio was 31.59% in the second quarter of 2024 compared to 32.71% in the second quarter of 2023 and 29.13% in the first quarter of 2024.

●

On April 30, 2024, the Company completed a $324.6 million securitization of 13 multi-family mortgage loans through a Freddie Mac-sponsored Q-Series transaction.

●

The Company redeemed all outstanding shares of the Series A Preferred Stock for $52 million on April 1, 2024, at the liquidation preference of $25.00 per share.

CARMEL, Indiana – (PR Newswire) - Merchants Bancorp (the “Company” or “Merchants”) (Nasdaq: MBIN), parent company of Merchants Bank, today reported second quarter 2024 net income of $76.4 million, or diluted earnings per common share of $1.49. This compared to $65.3 million, or diluted earnings per common share of $1.31 in the second quarter of 2023, and compared to $87.1 million, or diluted earnings per common share of $1.80 in the first quarter of 2024.

“Results for the second quarter demonstrate our success in serving customers while also increasing shareholder value in any interest rate environment. Loan growth continued as we reached a new record of $18.2 billion in assets and we also achieved a record-high tangible book value of $31.27 per share, which reflected a 30% increase over the prior year. Our originate-to-sell business model that minimizes interest rate risk has proven to be successful, and our priorities remain unchanged. We have also focused on effectively managing our capital to execute our strategies for future growth by issuing common stock, entering into credit risk transfer transactions, and participating in securitizations.,” said Michael F. Petrie, Chairman and CEO of Merchants.

Michael J. Dunlap, President and Chief Operating Officer of Merchants, added, “The market leading positions we hold across our businesses is a testament to the resilience and creativity that our team has demonstrated while working with customers to find effective solutions to their lending needs. These strong relationships position us to be a lender of choice and provide us with significant growth opportunities.”

Net income of $76.4 million for the second quarter 2024 increased by $11.1 million, or 17%, compared to the second quarter of 2023, primarily driven by:

●

a $22.5 million, or 21%, increase in net interest income, and

●

a $12.6 million, or 56%, decrease in the provision for credit losses related to lower loan charge-offs and relative changes to qualitative factors, which were partially offset by

●

a $19.5 million, or 594%, increase in the provision for income tax, primarily due to a $13.0 million tax benefit recorded in the second quarter of 2023 that was related to tax refunds and changes in state tax apportionment calculations.

Net income of $76.4 million for the second quarter 2024 decreased by $10.7 million, or 12%, compared to the first quarter of 2024, primarily driven by:

●

an $8.9 million lower fair market value positive adjustment to servicing rights. Results for the second quarter of 2024 included a $5.1 million positive fair market value adjustment to servicing rights compared to a $14.0 million positive fair market value adjustment to servicing rights in the first quarter of 2024, and

●

a $5.2 million increase in the provision for credit losses that reflected higher loan charge-offs and specific reserves, as well as an increase in qualitative loss factors in the multi-family loan portfolio, which were offset by a decrease in loss rates of other portfolios during the second quarter of 2024.

Page | 2

Total Assets

Total assets of $18.2 billion at June 30, 2024 increased $389.8 million, or 2%, compared to March 31, 2024, and increased $1.3 billion, or 7%, compared to December 31, 2023. The increase compared to December 31, 2023 was primarily due to growth in the warehouse, multi-family, and healthcare loan portfolios.

Return on average assets was 1.72% for the second quarter of 2024 compared to 1.78% for the second quarter of 2023 and 2.07% for the first quarter of 2024.

Asset Quality

The allowance for credit losses on loans of $81.0 million, as of June 30, 2024, increased $5.3 million, or 7%, compared to March 31, 2024, and increased $9.3 million, or 13%, compared to December 31, 2023. The increase compared to both periods was primarily due to loan charge-offs, increases in specific reserves, loan growth, and changes to qualitative loss factors to reflect changes in industry conditions.

The Company recorded three charge-offs, primarily in the multi-family portfolio, for $3.5 million and recorded $15,000 of recoveries during the second quarter 2024. This compares to $9.5 million in charge-offs and $2,000 in recoveries during the second quarter of 2023 and to $0.9 million in charge-offs and $1,000 of recoveries in the first quarter of 2024.

As of June 30, 2024, non-performing loans were $143.5 million, or 1.30% of gross loans receivable, compared to $131.8 million, or 1.22%, as of March 31, 2024, and $82.0 million, or 0.80%, as of December 31, 2023. The increase in non-performing loans compared to both periods was primarily driven by multi-family and healthcare customers with delinquent payments on variable rate loans that have required higher payments due to interest rates remaining at elevated levels.

Securities Available for Sale

Total securities available for sale of $1.0 billion as of June 30, 2024 decreased $44.3 million, or 4%, compared to March 31, 2024, and decreased $96.7 million, or 9%, compared to December 31, 2023. The decrease was primarily due to maturities, sales, and repayments that were partially offset by purchases.

Page | 3

As of June 30, 2024, Accumulated Other Comprehensive Losses (“AOCL”) of $0.5 million, related to securities available for sale, decreased $0.7 million, or 57%, compared to March 31, 2024, and decreased $2.0 million, or 80%, compared to December 31, 2023. The $0.5 million of AOCL as of June 30, 2024 represented less than 1% of total equity and less than 1% of total investment securities.

Total Deposits

Total deposits of $14.9 billion at June 30, 2024 increased $941.4 million, or 7%, compared to March 31, 2024, and increased $855.6 million, or 6%, compared to December 31, 2023. The change compared to March 31, 2024 was primarily due to growth in core deposits, reflecting an increase in certificates of deposit and demand accounts. The change compared to December 31, 2023 was primarily due to growth in core deposit accounts, reflecting an increase in certificates of deposit accounts that was partially offset by a decrease in demand accounts.

Core deposits of $8.8 billion at June 30, 2024 increased $574.0 million, or 7%, from March 31, 2024 and increased $705.9 million, or 9%, from December 31, 2023. Core deposits represented 59% of total deposits at June 30, 2024 and March 31, 2024, and 58% of total deposits at December 31, 2023.

Total brokered deposits of $6.1 billion at June 30, 2024 increased $367.4 million, or 6%, from March 31, 2024 and increased $149.7 million, or 3%, from December 31, 2023. As of June 30, 2024, brokered certificates of deposit had a weighted average remaining duration of 70 days.

Liquidity

Cash balances of $540.9 million as of June 30, 2024 increased by $32.1 million compared to March 31, 2024 and decreased by $43.5 million compared to December 31, 2023. The Company continues to have significant borrowing capacity, with unused lines of credit totaling $7.0 billion as of June 30, 2024 compared to $5.6 billion at March 31, 2024 and $6.0 billion at December 31, 2023. Furthermore, its $2.8 billion line of credit with the Federal Reserve Board alone could fund 118% of its uninsured deposits, which represented approximately 15% of total deposits as of June 30, 2024.

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.

Page | 4

Comparison of Operating Results for the Three Months Ended

June 30, 2024 and 2023

Net Interest Income of $128.1 million increased $22.5 million, or 21%, compared to $105.6 million, primarily reflecting an increase in both average balances and yields on loans and loans held for sale, as well as higher average yields and balances of securities available for sale, which were partially offset by higher average balances and interest rates on deposits, as well as higher average balances on borrowings.

●

Net interest margin of 2.99% increased 2 basis points compared to 2.97%. The margin was negatively impacted by approximately 6 basis points in the second quarter of 2024 from the net reversal of $2.5 million in accrued interest income associated with the movement of loans into nonaccrual status.

●

Interest rate spread of 2.45% increased 4 basis points compared to 2.41%.

Interest Income of $328.3 million increased $70.2 million, or 27%, compared to $258.1 million, reflecting an increase in both average balances and higher yields of loans and loans held for sale, as well as securities available for sale.

●

Average balances of $14.3 billion for loans and loans held for sale increased 20% compared to $12.0 billion.

●

Average yield on loans and loans held for sale of 7.97% increased 30 basis points compared to 7.67%.

●

Average balances of $1.0 billion for securities available for sale increased 54% compared to $672.9 million.

●

Average yield on securities available for sale of 5.72% increased 240 basis points compared to 3.32%.

Interest Expense of $200.2 million increased $47.7 million, or 31%, compared to $152.5 million. The increase reflected an increase in both average balances and rates on certificates of deposit and interest-bearing checking, as well as higher average balances on borrowings.

●

Average balances of $6.5 billion for certificates of deposit increased 38% compared to $4.7 billion.

●

Average interest rates of 5.43% for certificates of deposit increased 45 basis points compared to 4.98%.

●

Average balances of $4.9 billion for interest-bearing checking increased 15% compared to $4.3 billion.

●

Average interest rates of 4.74% for interest-bearing checking increased 24 basis points compared to 4.50%.

●

Average balances of $1.0 billion for borrowings increased 74% compared to $591.3 million.

Page | 5

Noninterest Income of $31.4 million increased $1.5 million, or 5%, compared to $29.9 million, primarily due to a $2.2 million, or 26%, increase in net loan servicing fees and a $1.4 million, or 46%, increase in other income, partially offset by a $1.3 million, or 47%, decrease in mortgage warehouse fees.

●

Loan servicing fees included a $5.1 million positive fair market value adjustment to servicing rights, with a $0.6 million positive adjustment in the Banking segment and a $4.5 million positive adjustment in the Multi-family Mortgage Banking segment. This compared to a $3.4 million positive fair market value adjustment to mortgage servicing rights in the prior period, of which $1.3 million positive adjustment in the Banking segment and $2.1 million positive adjustment in the Multi-family Mortgage Banking segment.

Noninterest Expense of $50.4 million increased $6.1 million, or 14%, compared to $44.3 million reflecting increases in salaries and employee benefits to support business growth and increases in deposit insurance expenses. The higher noninterest expense also reflected a $1.6 million increase in other expenses primarily associated with ongoing premium expense for the credit default swap that was executed in March 2024.

●

The efficiency ratio of 31.59% decreased 112 basis points compared to 32.71%.

Comparison of Operating Results for the Three Months Ended

June 30, 2024 and March 31, 2024

Net Interest Income of $128.1 million increased 1%, compared to $127.1 million, primarily due to higher average balances on loans and loans held for sale, partially offset by higher average balances of deposits and on borrowings.

●

Net interest margin of 2.99% decreased 15 basis points compared to 3.14%, primarily due to a shift in business mix that reflected significant growth in the mortgage warehouse portfolio. The margin was also negatively impacted by approximately 6 basis points in the second quarter of 2024 from the net reversal of $2.5 million in accrued interest income associated with the movement of loans into nonaccrual status.

●

Interest rate spread of 2.45% decreased 13 basis points compared to 2.58%.

Page | 6

Interest Income of $328.3 million increased $14.1 million, or 4%, compared to $314.2 million, reflecting an increase in average balances on loans and loans held for sale, interest earning deposits, and mortgage loans in process or securitization. The increases in interest income were partially offset by a decrease in average yields on loans and loans held for sale.

●

Average balances of $14.3 billion for loans and loans held for sale increased 6% compared to $13.5 billion.

●

Average balances of $438.4 million on interest earning deposits increased 27% compared to $346.2 million.

●

Average balances of $234.7 million for mortgage loans in process of securitization increased 70% compared to $137.9 million.

●

Average yields on loans and loans held for sale of 7.97% decreased 14 basis points compared to 8.11%, reflecting a net $2.5 million reversal of accrued interest income associated with the movement of loans into nonaccrual status during the quarter.

Interest Expense of $200.2 million increased 7% compared to $187.1 million. The increase was primarily driven by higher average balances on certificate of deposit accounts and borrowings. These were partially offset by lower rates on borrowings, as well as lower average balances on interest-bearing checking accounts.

●

Average balances of $6.5 billion for certificate of deposit accounts increased 15% compared to $5.7 billion.

●

Average balances of $1.0 billion for borrowings increased 44% compared to $716.9 million.

●

Average interest rates of 8.00% for borrowings decreased 103 basis points compared to 9.03%.

●

Average balances of $4.9 billion for interest-bearing checking accounts decreased 3% compared to $5.1 billion.

Noninterest Income of $31.4 million decreased $9.5 million, or 23%, compared $40.9 million, primarily due to an $8.6 million, or 44%, decrease in net loan servicing fees and a $2.1 million, or 39%, decrease in syndication and asset management fees.

●

Loan servicing fees included a $5.1 million positive fair market value adjustment to servicing rights, with a $0.6 million positive adjustment in the Banking segment and a $4.5 million positive adjustment in the Multi-family Mortgage Banking segment. This compared to a $14.0 million positive fair market value adjustment to servicing rights in the prior period, with a $0.8 million positive adjustment in the Banking segment and a $13.2 million positive adjustment in the Multi-family Mortgage Banking segment.

Noninterest Expense of $50.4 million increased $1.5 million, or 3%, compared to $48.9 million, driven by a $2.7 million, or 54%, increase in other expenses associated with ongoing premium expense for the credit default swap that was executed in March 2024. This increase was partially offset by a $1.2 million decrease in salaries and employee benefits

●

The efficiency ratio of 31.59% increased 246 basis points compared to 29.13%.

Page | 7

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 segments, including Multi-family Mortgage Banking that primarily offers multi-family housing and healthcare facility financing and servicing (through this segment it also serves as a syndicator of low-income housing tax credit and debt funds); Mortgage Warehousing that offers mortgage warehouse financing, commercial loans, and deposit services; and Banking that offers retail and correspondent residential mortgage banking, agricultural lending, and traditional community banking. Merchants Bancorp, with $18.2 billion in assets and $14.9 billion in deposits as of June 30, 2024, conducts its business primarily through its direct and indirect subsidiaries, Merchants Bank of Indiana, Merchants Capital Corp., Merchants Capital Investments, LLC, Merchants Capital Servicing, LLC, Merchants Asset Management, 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. 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.

MEDIA CONTACT: REBECCA MARSH

Merchants Bancorp

Phone: (317) 805-4356

Email: rmarsh@merchantsbankofindiana.com

INVESTOR CONTACT: JOHN MACKE

Merchants Bancorp

Phone: (317) 536-7421

Email: jmacke@merchantsbankofindiana.com

Page | 8

Consolidated Balance Sheets

(Unaudited)

(In thousands, except share data)

	June 30,			March 31,			December 31,			September 30,			June 30,
	2024			2024			2023			2023			2023
Assets
Cash and due from banks	$	10,242		$	17,924		$	15,592		$	10,633		$	15,390
Interest-earning demand accounts		530,640			490,831			568,830			396,605			361,920
Cash and cash equivalents		540,882			508,755			584,422			407,238			377,310
Securities purchased under agreements to resell		3,304			3,329			3,349			3,385			3,412
Mortgage loans in process of securitization		209,244			142,629			110,599			476,047			298,907
Securities available for sale ($682,774, $700,640 and $722,497 utilizing fair value option at June 30, 2024, March 31, 2024 and December 31, 2023)		1,017,019			1,061,288			1,113,687			624,586			648,003
Securities held to maturity ($1,291,960, $1,176,178, $1,203,535, $1,010,745 and $1,058,590 at fair value, respectively)		1,291,110			1,175,167			1,204,217			1,012,801			1,062,017
Federal Home Loan Bank (FHLB) stock		67,499			64,215			48,578			48,219			39,130
Loans held for sale (includes $102,873, $84,513, $86,663, $90,875 and $82,931 at fair value, respectively)		3,483,076			3,503,131			3,144,756			3,477,036			3,058,013
Loans receivable, net of allowance for credit losses on loans of $81,028, $75,712, $71,752, $66,864 and $62,986, respectively		10,933,189			10,690,513			10,127,801			9,910,681			9,854,018
Premises and equipment, net		46,833			42,450			42,342			36,730			36,947
Servicing rights		178,776			172,200			158,457			162,141			147,288
Interest receivable		90,360			90,303			91,346			78,401			70,509
Goodwill		8,014			8,014			15,845			15,845			15,845
Other assets and receivables		343,116			360,582			307,117			242,126			263,473
Total assets	$	18,212,422		$	17,822,576		$	16,952,516		$	16,495,236		$	15,874,872
Liabilities and Shareholders' Equity
Liabilities
Deposits
Noninterest-bearing	$	383,260		$	319,872		$	520,070		$	287,846		$	349,387
Interest-bearing		14,533,807			13,655,789			13,541,390			12,719,492			12,710,477
Total deposits		14,917,067			13,975,661			14,061,460			13,007,338			13,059,864
Borrowings		1,159,206			1,835,985			964,127			1,654,075			1,016,836
Deferred and current tax liabilities, net		25,098			43,935			19,923			18,006			16,084
Other liabilities		222,904			190,527			205,922			183,102			221,788
Total liabilities		16,324,275			16,046,108			15,251,432			14,862,521			14,314,572
Commitments and Contingencies
Shareholders' Equity
Common stock, without par value
Authorized - 75,000,000 shares
Issued and outstanding - 45,757,567 shares, 43,354,718 shares, 43,242,928 shares, 43,240,212 shares and 43,237,300 shares		238,492			139,950			140,365			139,609			138,853
Preferred stock, without par value - 5,000,000 total shares authorized
7% Series A Preferred stock - $25 per share liquidation preference
Authorized - no shares at June 30, 2024 and 3,500,000 shares at March 31, 2024 and all prior periods presented
Issued and outstanding - no shares at June 30, 2024 and 2,081,800 shares at March 31, 2024 and all prior periods presented		—			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 - 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
8.25% Series D Preferred stock - $1,000 per share liquidation preference
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		1,200,778			1,138,083			1,063,599			998,252			928,875
Accumulated other comprehensive loss		(510	)		(1,173	)		(2,488	)		(4,754	)		(7,036	)
Total shareholders' equity		1,888,147			1,776,468			1,701,084			1,632,715			1,560,300
Total liabilities and shareholders' equity	$	18,212,422		$	17,822,576		$	16,952,516		$	16,495,236		$	15,874,872

Consolidated Statement of Income

(Unaudited)

(In thousands, except share data)

	Three Months Ended									Change
	June 30,			March 31,			June 30,			2Q24			2Q24
	2024			2024			2023			vs. 1Q24			vs. 2Q23
Interest Income
Loans	$	284,421		$	271,998		$	228,732			5	%		24	%
Mortgage loans in process of securitization		3,044			1,720			3,127			77	%		-3	%
Investment securities:
Available for sale		14,784			14,388			5,564			3	%		166	%
Held to maturity		19,799			20,522			17,311			-4	%		14	%
Federal Home Loan Bank stock		1,277			844			471			51	%		171	%
Other		4,948			4,701			2,864			5	%		73	%
Total interest income		328,273			314,173			258,069			4	%		27	%
Interest Expense
Deposits		179,651			171,022			137,801			5	%		30	%
Borrowed funds		20,503			16,095			14,651			27	%		40	%
Total interest expense		200,154			187,117			152,452			7	%		31	%
Net Interest Income		128,119			127,056			105,617			1	%		21	%
Provision for credit losses		9,965			4,726			22,603			111	%		-56	%
Net Interest Income After Provision for Credit Losses		118,154			122,330			83,014			-3	%		42	%
Noninterest Income
Gain on sale of loans		11,168			9,356			11,350			19	%		-2	%
Loan servicing fees, net		10,827			19,402			8,616			-44	%		26	%
Mortgage warehouse fees		1,524			982			2,865			55	%		-47	%
Loss on sale of investments available for sale ⁽¹⁾		—			(108	)		—			-100	%		—
Syndication and asset management fees		3,233			5,303			3,896			-39	%		-17	%
Other income		4,599			5,939			3,155			-23	%		46	%
Total noninterest income		31,351			40,874			29,882			-23	%		5	%
Noninterest Expense
Salaries and employee benefits		28,373			29,596			25,724			-4	%		10	%
Loan expenses		993			956			907			4	%		9	%
Occupancy and equipment		2,239			2,237			2,456			—			-9	%
Professional fees		3,556			4,099			3,723			-13	%		-4	%
Deposit insurance expense		5,579			5,125			3,806			9	%		47	%
Technology expense		1,859			1,854			1,571			—			18	%
Other expense		7,781			5,045			6,133			54	%		27	%
Total noninterest expense		50,380			48,912			44,320			3	%		14	%
Income Before Income Taxes		99,125			114,292			68,576			-13	%		45	%
Provision for income taxes ⁽²⁾		22,732			27,238			3,274			-17	%		594	%
Net Income	$	76,393		$	87,054		$	65,302			-12	%		17	%
Dividends on preferred stock		(7,757	)		(8,667	)		(8,668	)		-10	%		-11	%
Impact of preferred stock redemption		(1,823	)		—			—			-100	%		-100	%
Net Income Available to Common Shareholders	$	66,813		$	78,387		$	56,634			-15	%		18	%
Basic Earnings Per Share	$	1.50		$	1.81		$	1.31			-17	%		15	%
Diluted Earnings Per Share	$	1.49		$	1.80		$	1.31			-17	%		14	%
Weighted-Average Shares Outstanding
Basic		44,569,345			43,305,985			43,235,398
Diluted		44,698,324			43,466,647			43,309,393

⁽¹⁾Includes $0, $(108), and $0 respectively, related to accumulated other comprehensive losses reclassifications.

⁽²⁾Includes $0, $26, and $0 respectively, related to income tax benefit for reclassification items.

Consolidated Statement of Income

(Unaudited)

(In thousands, except share data)

	Six Months Ended
	June 30,			June 30,
	2024			2023			Change
Interest Income
Loans	$	556,419		$	418,182			33	%
Mortgage loans in process of securitization		4,764			4,775			—
Investment securities:
Available for sale		29,172			7,830			273	%
Held to maturity		40,321			33,065			22	%
Federal Home Loan Bank stock		2,121			898			136	%
Other		9,649			4,613			109	%
Total interest income		642,446			469,363			37	%
Interest Expense
Deposits		350,673			242,243			45	%
Borrowed funds		36,598			20,810			76	%
Total interest expense		387,271			263,053			47	%
Net Interest Income		255,175			206,310			24	%
Provision for credit losses		14,691			29,470			-50	%
Net Interest Income After Provision for Credit Losses		240,484			176,840			36	%
Noninterest Income
Gain on sale of loans		20,524			18,083			13	%
Loan servicing fees, net		30,229			10,976			175	%
Mortgage warehouse fees		2,506			3,893			-36	%
Loss on sale of investments available for sale ⁽¹⁾		(108	)		—			-100	%
Syndication and asset management fees		8,536			5,108			67	%
Other income		10,538			6,086			73	%
Total noninterest income		72,225			44,146			64	%
Noninterest Expense
Salaries and employee benefits		57,969			47,870			21	%
Loan expenses		1,949			1,711			14	%
Occupancy and equipment		4,476			4,688			-5	%
Professional fees		7,655			5,992			28	%
Deposit insurance expense		10,704			5,984			79	%
Technology expense		3,713			3,148			18	%
Other expense		12,826			9,699			32	%
Total noninterest expense		99,292			79,092			26	%
Income Before Income Taxes		213,417			141,894			50	%
Provision for income taxes ⁽²⁾		49,970			21,637			131	%
Net Income	$	163,447		$	120,257			36	%
Dividends on preferred stock		(16,424	)		(17,335	)		-5	%
Impact of preferred stock redemption		(1,823	)		—			-100	%
Net Income Available to Common Shareholders	$	145,200		$	102,922			41	%
Basic Earnings Per Share	$	3.30		$	2.38			39	%
Diluted Earnings Per Share	$	3.29		$	2.38			38	%
Weighted-Average Shares Outstanding
Basic		43,937,665			43,207,655
Diluted		44,082,485			43,300,240

⁽¹⁾ Includes $(108) and $0 respectively, related to accumulated other comprehensive earnings reclassifications.

⁽²⁾ Includes $26 and $0 respectively, related to income tax benefit for reclassification items.

Key Operating Results

(Unaudited)

($ in thousands, except share data)

	Three Months Ended									Change
	June 30,			March 31,			June 30,			2Q24			2Q24
	2024			2024			2023			vs. 1Q24			vs. 2Q23
Noninterest expense	$	50,380		$	48,912		$	44,320			3	%		14	%

Net interest income (before provision for credit losses)		128,119			127,056			105,617			1	%		21	%
Noninterest income		31,351			40,874			29,882			-23	%		5	%
Total income	$	159,470		$	167,930		$	135,499			-5	%		18	%

Efficiency ratio		31.59	%		29.13	%		32.71	%		246	bps		(112	)bps

Average assets	$	17,814,191		$	16,793,072		$	14,673,257			6	%		21	%
Net income		76,393			87,054			65,302			-12	%		17	%
Return on average assets before annualizing		0.43	%		0.52	%		0.45	%
Annualization factor		4.00			4.00			4.00
Return on average assets		1.72	%		2.07	%		1.78	%		(35	)bps		(6	)bps

Return on average tangible common shareholders' equity ⁽¹⁾		19.55	%		25.34	%		22.03	%		(579	)bps		(248	)bps

Tangible book value per common share ⁽¹⁾	$	31.27		$	29.26		$	24.14			7	%		30	%

Tangible common shareholders' equity/tangible assets ⁽¹⁾		7.86	%		7.12	%		6.58	%		74	bps		128	bps

Consolidated ratios
Total capital/risk-weighted assets⁽²⁾		12.0	%		11.7	%		11.3	%
Tier I capital/risk-weighted assets⁽²⁾		11.4	%		11.2	%		10.8	%
Common Equity Tier I capital/risk-weighted assets⁽²⁾		8.7	%		8.0	%		7.3	%
Tier I capital/average assets⁽²⁾		10.6	%		10.5	%		10.6	%

⁽¹⁾ Non-GAAP financial measure - see "Reconciliation of Non-GAAP Measures" below:

⁽²⁾ As defined by regulatory agencies; June 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
	June 30,			March 31,			June 30,			2Q24			2Q24
	2024			2024			2023			vs. 1Q24			vs. 2Q23
Net income	$	76,393		$	87,054		$	65,302			-12	%		17	%
Less: preferred stock dividends		(7,757	)		(8,667	)		(8,668	)		-10	%		-11	%
Less: preferred stock redemption		(1,823	)		-			-			-100	%		-100	%
Net income available to common shareholders	$	66,813		$	78,387		$	56,634			-15	%		18	%

Average shareholders' equity	$	1,824,730		$	1,747,660		$	1,544,976			4	%		18	%
Less: average goodwill & intangibles		(8,140	)		(10,494	)		(16,858	)		-22	%		-52	%
Less: average preferred stock		(449,387	)		(499,608	)		(499,608	)		-10	%		-10	%
Average tangible common shareholders' equity	$	1,367,203		$	1,237,558		$	1,028,510			10	%		33	%

Annualization factor		4.00			4.00			4.00
Return on average tangible common shareholders' equity		19.55	%		25.34	%		22.03	%		(579	)bps		(248	)bps

Total equity	$	1,888,147		$	1,776,468		$	1,560,300			6	%		21	%
Less: goodwill and intangibles		(8,108	)		(8,163	)		(16,794	)		-1	%		-52	%
Less: preferred stock		(449,387	)		(499,608	)		(499,608	)		-10	%		-10	%
Tangible common shareholders' equity	$	1,430,652		$	1,268,697		$	1,043,898			13	%		37	%

Assets	$	18,212,422		$	17,822,576		$	15,874,872			2	%		15	%
Less: goodwill and intangibles		(8,108	)		(8,163	)		(16,794	)		-1	%		-52	%
Tangible assets	$	18,204,314		$	17,814,413		$	15,858,078			2	%		15	%

Ending common shares		45,757,567			43,354,718			43,237,300

Tangible book value per common share	$	31.27		$	29.26		$	24.14			7	%		30	%
Tangible common shareholders' equity/tangible assets		7.86	%		7.12	%		6.58	%		74	bps		128	bps

Key Operating Results

(Unaudited)

($ in thousands, except share data)

	Six Months Ended
	June 30,			June 30,
	2024			2023			Change
Noninterest expense	$	99,292		$	79,092			26	%

Net interest income (before provision for credit losses)		255,175			206,310			24	%
Noninterest income		72,225			44,146			64	%
Total income	$	327,400		$	250,456			31	%

Efficiency ratio		30.33	%		31.58	%		(125	)bps

Average assets	$	17,303,632		$	13,784,434			26	%
Net income		163,447			120,257			36	%
Return on average assets before annualizing		0.94	%		0.87	%
Annualization factor		2.00			2.00
Return on average assets		1.89	%		1.74	%		15	bps

Return on average tangible common shareholders' equity ⁽¹⁾		22.30	%		20.49	%		181	bps

Tangible book value per common share ⁽¹⁾	$	31.27		$	24.14			30	%

Tangible common shareholders' equity/tangible assets ⁽¹⁾		7.86	%		6.58	%		128	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.

	Six Months Ended
	June 30,			June 30,
	2024			2023			Change
Net income	$	163,447		$	120,257			36	%
Less: preferred stock dividends		(16,424	)		(17,335	)		-5	%
Less: preferred stock redemption		(1,823	)		-			-100	%
Net income available to common shareholders	$	145,200		$	102,922			41	%

Average shareholders' equity	$	1,786,195		$	1,520,927			17	%
Less: average goodwill & intangibles		(9,317	)		(16,918	)		-45	%
Less: average preferred stock		(474,497	)		(499,608	)		-5	%
Average tangible common shareholders' equity	$	1,302,381		$	1,004,401			30	%

Annualization factor		2.00			2.00
Return on average tangible common shareholders' equity		22.30	%		20.49	%		181	bps

Total equity	$	1,888,147		$	1,560,300			21	%
Less: goodwill and intangibles		(8,108	)		(16,794	)		-52	%
Less: preferred stock		(449,387	)		(499,608	)		-10	%
Tangible common shareholders' equity	$	1,430,652		$	1,043,898			37	%

Assets	$	18,212,422		$	15,874,872			15	%
Less: goodwill and intangibles		(8,108	)		(16,794	)		-52	%
Tangible assets	$	18,204,314		$	15,858,078			15	%

Ending common shares		45,757,567			43,237,300

Tangible book value per common share	$	31.27		$	24.14			30	%
Tangible common shareholders' equity/tangible assets		7.86	%		6.58	%		128	bps

Merchants Bancorp

Average Balance Analysis

($ in thousands)

(Unaudited)

	Three Months Ended								Three Months Ended								Three Months Ended
	June 30, 2024								March 31, 2024								June 30, 2023
	Average					Yield/			Average					Yield/			Average					Yield/
	Balance			Interest		Rate			Balance			Interest		Rate			Balance			Interest		Rate
Assets:

Interest-bearing deposits, and other	$	438,445		$	6,225		5.71	%	$	346,150		$	5,545		6.44	%	$	249,722		$	3,335		5.36	%
Securities available for sale		1,039,388			14,784		5.72	%		1,085,114			14,388		5.33	%		672,887			5,564		3.32	%
Securities held to maturity		1,160,170			19,799		6.86	%		1,196,633			20,522		6.90	%		1,093,018			17,311		6.35	%
Mortgage loans in process of securitization		234,706			3,044		5.22	%		137,890			1,720		5.02	%		280,092			3,127		4.48	%
Loans and loans held for sale		14,347,165			284,421		7.97	%		13,494,961			271,998		8.11	%		11,968,565			228,732		7.67	%
Total interest-earning assets		17,219,874			328,273		7.67	%		16,260,748			314,173		7.77	%		14,264,284			258,069		7.26	%
Allowance for credit losses on loans		(76,456	)							(71,544	)							(54,411	)
Noninterest-earning assets		670,773								603,868								463,384

Total assets	$	17,814,191							$	16,793,072							$	14,673,257

Liabilities & Shareholders' Equity:

Interest-bearing checking	$	4,935,123			58,128		4.74	%	$	5,070,393			60,688		4.81	%	$	4,307,736			48,296		4.50	%
Savings deposits		145,262			19		0.05	%		201,860			219		0.44	%		236,012			299		0.51	%
Money market		2,788,335			33,207		4.79	%		2,817,382			33,644		4.80	%		2,749,594			30,521		4.45	%
Certificates of deposit		6,535,651			88,297		5.43	%		5,694,933			76,471		5.40	%		4,729,242			58,685		4.98	%
Total interest-bearing deposits		14,404,371			179,651		5.02	%		13,784,568			171,022		4.99	%		12,022,584			137,801		4.60	%

Borrowings		1,031,180			20,503		8.00	%		716,853			16,095		9.03	%		591,333			14,651		9.94	%
Total interest-bearing liabilities		15,435,551			200,154		5.22	%		14,501,421			187,117		5.19	%		12,613,917			152,452		4.85	%

Noninterest-bearing deposits		331,246								332,172								346,837
Noninterest-bearing liabilities		222,664								211,819								167,527
Total liabilities		15,989,461								15,045,412								13,128,281

Shareholders' equity		1,824,730								1,747,660								1,544,976

Total liabilities and shareholders' equity	$	17,814,191							$	16,793,072							$	14,673,257

Net interest income				$	128,119							$	127,056							$	105,617

Net interest spread							2.45	%							2.58	%							2.41	%

Net interest-earning assets	$	1,784,323							$	1,759,327							$	1,650,367

Net interest margin							2.99	%							3.14	%							2.97	%

Average interest-earning assets to average interest-bearing liabilities							111.56	%							112.13	%							113.08	%

Supplemental Results

(Unaudited)

($ in thousands)

	Net Income									Net Income
	Three Months Ended									Six Months Ended
	June 30,			March 31,			June 30,			June 30,
	2024			2024			2023			2024			2023
Segment
Multi-family Mortgage Banking	$	9,037		$	16,609		$	11,242		$	25,646		$	13,208
Mortgage Warehousing		22,270			20,190			18,596			42,460			27,237
Banking		52,378			56,425			42,650			108,803			91,957
Other		(7,292	)		(6,170	)		(7,186	)		(13,462	)		(12,145	)
Total	$	76,393		$	87,054		$	65,302		$	163,447		$	120,257

	Total Assets
	June 30, 2024					March 31, 2024					December 31, 2023
	Amount		%			Amount		%			Amount		%
Segment
Multi-family Mortgage Banking	$	428,299		2	%	$	416,454		2	%	$	411,097		2	%
Mortgage Warehousing		5,626,055		31	%		5,369,299		30	%		4,522,175		27	%
Banking		11,885,484		65	%		11,760,028		66	%		11,760,943		69	%
Other		272,584		2	%		276,795		2	%		258,301		2	%
Total	$	18,212,422		100	%	$	17,822,576		100	%	$	16,952,516		100	%

	Gain on Sale of Loans						Gain on Sale of Loans
	Three Months Ended						Six Months Ended
	June 30,		March 31,		June 30,		June 30,
	2024		2024		2023		2024		2023
Loan Type
Multi-family	$	9,083	$	8,423	$	10,361	$	17,506	$	15,281
Single-family		524		280		202		804		479
Small Business Association (SBA)		1,561		653		787		2,214		2,323
Total	$	11,168	$	9,356	$	11,350	$	20,524	$	18,083

Supplemental Results

(Unaudited)

($ in thousands)

	Loans Receivable and Loans Held for Sale
	June 30,		March 31,		December 31,
	2024		2024		2023
Mortgage warehouse repurchase agreements	$	1,369,965	$	1,142,994	$	752,468
Residential real estate ⁽¹⁾		1,345,656		1,321,300		1,324,305
Multi-family financing		4,160,420		4,096,606		4,006,160
Healthcare financing		2,495,910		2,464,685		2,356,689
Commercial and commercial real estate ⁽²⁾⁽³⁾		1,566,809		1,666,751		1,643,081
Agricultural production and real estate		70,244		65,977		103,150
Consumer and margin loans		5,213		7,912		13,700
		11,014,217		10,766,225		10,199,553
Less: Allowance for credit losses on loans		81,028		75,712		71,752
Loans receivable	$	10,933,189	$	10,690,513	$	10,127,801

Loans held for sale		3,483,076		3,503,131		3,144,756
Total loans, net of allowance	$	14,416,265	$	14,193,644	$	13,272,557

⁽¹⁾ Includes $1.2 billion, $1.2 billion and $1.2 billion of All-In-One © first-lien home equity lines of credit as of June 30, 2024, March 31, 2024 and December 31, 2023, respectively.

⁽²⁾ Includes $1.0 billion, $1.1 billion and $1.1 billion of revolving lines of credit collateralized primarily by mortgage servicing rights as of June 30, 2024, March 31, 2024 and December 31, 2023, respectively.

⁽³⁾ Includes only $6.8 million, $6.8 million and $8.4 million of non-owner occupied commerical real estate as of June 30, 2024, March 31, 2024 and December 31, 2023, respectively.

	Loan Credit Risk Profile
	June 30, 2024					March 31, 2024					December 31, 2023
	Amount		%			Amount		%			Amount		%
Pass	$	10,523,378		95.6	%	$	10,410,748		96.7	%	$	9,879,659		96.9	%
Special mention		244,000		2.2	%		232,122		2.2	%		191,267		1.9	%
Substandard		246,839		2.2	%		123,355		1.1	%		128,577		1.2	%
Doubtful		—		—			—		—			50		—
Loans receivable	$	11,014,217		100.0	%	$	10,766,225		100.0	%	$	10,199,553		100.0	%
Charge-offs (year-to-date)	$	4,377				$	925				$	9,791
Recoveries (year-to-date)	$	16				$	1				$	41

	Nonperforming Loans
	June 30,			March 31,			December 31,
	2024			2024			2023
Nonaccrual loans	$	143,319		$	78,804		$	73,847
90 days past due and still accruing		133			52,982			8,168
Total nonperforming loans	$	143,452		$	131,786		$	82,015
As a percentage of loans receivable		1.30	%		1.22	%		0.80	%

Cover	Jul. 29, 2024
Document Information [Line Items]
Document Type	8-K
Amendment Flag	false
Document Period End Date	Jul. 29, 2024
Entity File Number	001-38258
Entity Registrant Name	Merchants Bancorp
Entity Central Index Key	0001629019
Entity Tax Identification Number	20-5747400
Entity Incorporation, State or Country Code	IN
Entity Address, Address Line One	410 Monon Boulevard
Entity Address, City or Town	Carmel
Entity Address, State or Province	IN
Entity Address, Postal Zip Code	46032
City Area Code	317
Local Phone Number	569-7420
Written Communications	false
Soliciting Material	false
Pre-commencement Tender Offer	false
Pre-commencement Issuer Tender Offer	false
Entity Emerging Growth Company	false
Common Stock [Member]
Document Information [Line Items]
Title of 12(b) Security	Common Stock, without par value
Trading Symbol	MBIN
Security Exchange Name	NASDAQ
Series B Preferred Stock [Member]
Document Information [Line Items]
Title of 12(b) Security	Depositary Shares, each representing a 1/40th interest in a share of Series B Preferred Stock, without par value
Trading Symbol	MBINO
Security Exchange Name	NASDAQ
Series C Preferred Stock [Member]
Document Information [Line Items]
Title of 12(b) Security	Depositary Shares, each representing a 1/40th interest in a share of Series C Preferred Stock, without par value
Trading Symbol	MBINN
Security Exchange Name	NASDAQ
Series D Preferred Stock [Member]
Document Information [Line Items]
Title of 12(b) Security	Depositary Shares, each representing a 1/40th interest in a share of Series D Preferred Stock, without par value
Trading Symbol	MBINM
Security Exchange Name	NASDAQ