Second quarter 2025 net income of $38.0 million, decreased $38.4 million compared to second quarter of 2024 and decreased $20.3 million compared to the first quarter 2025, reflecting an increase in provision for credit losses of $43.1 million and $45.3 million, respectively.
An increase in provision for credit losses was primarily associated with estimated declines on multi-family property values after receiving new appraisals and the ongoing investigation of borrowers involved in mortgage fraud or suspected fraud.
Second quarter 2025 diluted earnings per common share of $0.60 decreased 60% compared to the second quarter of 2024 and decreased 35% compared to the first quarter of 2025.
Tangible book value per common share reached a record-high of $35.42 and increased 13% compared to $31.27 in the second quarter of 2024 and increased 1% compared to $34.90 in the first quarter of 2025.
As of June 30, 2025, the Company had $5.0 billion in unused borrowing capacity with the Federal Home Loan Bank and the Federal Reserve Discount window, representing 26% of total assets.
Total assets of $19.1 billion increased 2% compared to March 31, 2025 and December 31, 2024.
Loans receivable of $10.4 billion, net of allowance for credit losses on loans, increased $88.4 million, or 1%, compared to March 31, 2025, and increased $78.1 million compared to December 31, 2024.
Core deposits of $11.4 billion increased $744.6 million, or 7%, compared to March 31, 2025 and increased $2.0 billion, or 22%, compared to December 31, 2024. Core deposits now represent 90% of total deposits, reaching the highest level the Company has reported since March 2022.
Brokered deposits of $1.3 billion decreased $463.9 million, or 27%, compared to March 31, 2025, and decreased $1.3 billion, or 50%, compared to December 31, 2024.
On June 5, 2025, the Company completed a $373.3 million securitization of 18 multi-family mortgage loans through a Freddie Mac-sponsored Q-Series transaction.
CARMEL, Ind., July 28, 2025 /PRNewswire/ — Merchants Bancorp (the “Company” or “Merchants”) (Nasdaq: MBIN), parent company of Merchants Bank, today reported second quarter 2025 net income of $38.0 million, or diluted earnings per common share of $0.60. This compared to $76.4 million, or diluted earnings per common share of $1.49 in the second quarter of 2024, and compared to $58.2 million, or diluted earnings per common share of $0.93 in the first quarter of 2025.
“Despite a difficult second quarter, marked by an increase in our provision for credit losses and charge-offs largely associated with mortgage fraud or suspected fraud that has also impacted a number of other multi-family lenders, we are encouraged by the resilience of our underlying earnings, the significant increase in gain on sale of loans, and the continued growth in our tangible book value that reached an all-time high of $35.42 per share. We were also pleased to see a 17% reduction in total delinquencies and a 58% decline in loans receivable classified as special mention during the quarter,” said Michael F. Petrie, Chairman and CEO of Merchants.
Michael J. Dunlap, President and Chief Operating Officer of Merchants, added, “We have implemented strategies to address our asset quality issues and to enhance our overall risk management practices to ensure long-term resilience. We are optimistic about our future and confident that our collective efforts will drive the stability and growth of our institution.”
Net income of $38.0 million for the second quarter of 2025 decreased by $38.4 million, or 50%, compared to the second quarter of 2024, reflecting a $43.1 million, or 432%, increase in provision for credit losses. The increase was primarily associated with estimated declines on multi-family property values after receiving new appraisals and the ongoing investigation of borrowers involved in mortgage fraud or suspected fraud. Partially offsetting the higher provision expense was a $19.1 million, or 61%, increase in noninterest income driven by a robust gain on sale of loans that reached $23.3 million, as well as syndication and asset management fees of $9.7 million during the quarter.
Net income of $38.0 million for the second quarter 2025 decreased by $20.3 million, or 35%, compared to the first quarter of 2025, reflecting a $45.3 million, or 586%, increase in provision for credit losses for the second quarter of 2025. Partially offsetting the higher provision expense was a $26.8 million, or 113%, increase in noninterest income that was driven by a 101% increase in gain on sale of loans and a 186% increase in syndication and asset management fees.
Total Assets
Total assets of $19.1 billion at June 30, 2025 increased by $343.4 million, or 2%, compared to March 31, 2025, and $335.5 million compared to December 31, 2024. The increase compared to both periods was primarily driven by higher balances in the mortgage warehouse portfolios. Total loan balances grew by 2% even with two loan sale transactions in the second quarter totaling over $685.4 million related to securitizations.
Return on average assets was 0.80% for the second quarter of 2025 compared to 1.72% for the second quarter of 2024 and 1.31% for the first quarter of 2025.
Asset Quality
The allowance for credit losses on loans of $91.8 million, as of June 30, 2025, increased by $8.4 million, or 10%, compared to March 31, 2025, and increased by $7.4 million, or 9%, compared to December 31, 2024. The $8.4 million increase compared to March 31, 2025 was driven by $54.5 million increase in provision expense that was partially offset by $46.1 million in loan charge-offs. The increases in provision expenses and charge-offs compared to both periods were primarily associated with estimated declines on multi-family property values after receiving new appraisals and the ongoing investigation of borrowers involved in mortgage fraud or suspected fraud. The increases were also attributable to certain types of subordinated loans that the Company no longer offers to borrowers. These subordinated loans have been largely identified and evaluated for potential losses that have either been included in the provision for credit losses as specific reserves or charged off.
The Company recorded charge-offs for 14 customers, primarily in the multi-family loan portfolio, totaling $46.1 million, and no recoveries during the second quarter of 2025. This compares to $3.5 million in charge-offs and $15,000 in recoveries during the second quarter of 2024 and to $10.5 million in charge-offs and $28,000 of recoveries in the first quarter of 2025.
During the quarter, after months of seeking legal remedies, the Company obtained additional access and information, such as through court appointed receivers, to assess the collateral supporting its challenged loans. The evaluation of this information contributed to an increase in loans classified as substandard, bringing the total to $417.7 million compared to $323.6 million as of March 31, 2025. However, during the same period, loans classified as special mention declined by $236.4 million, or 58%, falling to $171.5 million. This decline reinforces the view that the frequency of migration to criticized status has subsided. Overall, criticized loans of $589.2 million declined by $142.4 million, or 19%, compared to March 31, 2025. Furthermore, total delinquencies declined by 17% compared to March 31, 2025.
As of June 30, 2025, all substandard loans have been evaluated for impairment and these loans have specific reserves of $30.8 million, of which $9.9 million was added during the second quarter of 2025, net of charge-offs. The Company believes that its loan portfolio remains well collateralized.
Non-performing loans also declined during the quarter, largely attributable to charge-offs. As of June 30, 2025, non-performing loans were $251.5 million, or 2.39% of loans receivable, compared to $284.6 million, or 2.73%, as of March 31, 2025, and $279.7 million, or 2.68%, as of December 31, 2024.
The Company has been making additional efforts to reduce its credit risk through loan sale and securitization activities since 2019. In 2023 and 2024, the Company strategically executed credit protection arrangements through a credit linked note and credit default swaps. The Company also upsized an existing credit default swap in June 2025. These credit protection arrangements totaled $3.7 billion in loans to reduce risk of losses, with incremental coverage ranging from 13-14% of the unpaid principal balances for each arrangement. Despite having credit protection on these loans, the Company also continues to carry an allowance for credit losses on loans held for investment. As of June 30, 2025, the balance of loans subject to credit protection arrangements was $2.8 billion.
Total Deposits
Total deposits of $12.7 billion at June 30, 2025 increased by $280.7 million, or 2%, compared to March 31, 2025, and increased by $766.9 million, or 6%, compared to December 31, 2024. The increase compared to both periods was primarily due to growth in core demand deposits and savings.
Core deposits of $11.4 billion at June 30, 2025 increased by $744.6 million, or 7%, from March 31, 2025 and increased by $2.0 billion, or 22%, from December 31, 2024. The increases were attributable primarily to growth in custodial deposits from warehouse customers. Core deposits represented 90% of total deposits at June 30, 2025, 86% of total deposits at March 31, 2025, and 79% of total deposits at December 31, 2024.
Total brokered deposits of $1.3 billion at June 30, 2025 decreased $463.9 million, or 27%, from March 31, 2025 and decreased $1.3 billion, or 50%, from December 31, 2024. As of June 30, 2025, brokered certificates of deposit had a weighted average remaining duration of 48 days.
Liquidity
Cash balances of $647.2 million as of June 30, 2025 increased by $125.9 million, or 24%, compared to March 31, 2025 and increased by $170.6 million, or 36%, compared to December 31, 2024. The Company continues to have significant borrowing capacity available, with unused lines of credit totaling $5.0 billion as of June 30, 2025 compared to $4.7 billion at March 31, 2025 and $4.3 billion at December 31, 2024.
The Company’s most liquid assets are in cash, short-term investments, including interest-bearing demand deposits, mortgage loans in process of securitization, loans held for sale, and warehouse lines of credit included in loans receivable. Taken together with its unused borrowing capacity of $5.0 billion described above, these totaled $11.9 billion, or 62%, of its $19.1 billion total assets at June 30, 2025. Furthermore, its $3.3 billion line of credit availability with the Federal Reserve Bank of Chicago alone could fund 106% of its uninsured deposits, which represented approximately 24% of total bank deposits as of June 30, 2025.
This liquidity enhances the Company’s 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
June 30, 2025 and 2024
Net Interest Income of $128.7 million remained essentially unchanged, compared to $128.1 million, reflecting lower interest expense on deposits that was partially offset by lower interest income and higher interest expense on borrowings.
Net interest margin of 2.83% decreased 16 basis points compared to 2.99%. The margin was negatively impacted by a significant shift in business mix, as highly profitable but lower-margin loans held for sale balances, consisting of primarily warehouse loans, grew by $622.7 million, or 18%, and warehouse repurchase agreements grew by $473.8 million, or 35%, while other higher-margin loans receivable balances contracted by a net of $964.1 million.
Interest rate spread of 2.33% decreased 12 basis points compared to 2.45%.
Interest Income of $304.4 million decreased $23.9 million, or 7%, compared to $328.3 million. The decrease primarily reflected lower average yields on higher average balances on loans and loans held for sale.
Average yields on loans and loans held for sale of 6.92% decreased 105 basis points compared to 7.97%.
Average balances of $14.8 billion for loans and loans held for sale increased $479.0 million, or 3% compared to $14.3 billion.
Interest Expense of $175.7 million decreased $24.5 million, or 12%, compared to $200.2 million. The decrease reflected lower average balances at lower average rates on certificates of deposit that were partially offset by higher average balances at lower average rates on borrowings.
Average interest rates on total interest-bearing liabilities of 4.35% decreased by 87 basis points compared to 5.22%.
Average balances of $3.1 billion for certificates of deposit decreased by $3.4 billion, or 53%, compared to $6.5 billion.
Average interest rates of 4.59% for certificates of deposit decreased by 84 basis points compared to 5.43%.
Average balances of $3.5 billion for borrowings increased by 235%, compared to $1.0 billion.
Average interest rates of 5.15% for borrowings decreased by 285 basis points compared to 8.00%.
Noninterest Income of $50.5 million increased $19.1 million, or 61%, compared to $31.4 million. The $19.1 increase reflected a $12.2 million, or 109%, increase in gain on sale of loans, a $6.5 million, or 200%, increase in syndication and asset management fees, and a $4.7 million, or 101%, increase in other income, partially offset by a $4.7 million, or 43%, decrease in loan servicing fees.
Gain on sale of loans increased $12.2 million, or 109%, reflecting higher volume in the multi-family loan portfolio, including a securitization through a Freddie Mac-sponsored Q-Series transaction.
Other income included a $4.3 million positive fair market value adjustment to the floor derivatives compared to a $215,000 positive fair market value adjustment in the prior period.
Loan servicing fees included a $258,000 positive fair market value adjustment to servicing rights, with a $487,000 negative adjustment in the Banking segment and a $745,000 positive adjustment in the Multi-family Mortgage Banking segment. This compared to a $5.1 million positive fair market value adjustment to servicing rights in the prior period with a $551,000 positive adjustment in the Banking segment and a $4.5 million positive adjustment in the Multi-family Mortgage Banking segment. The value of servicing rights generally increases in rising 10-year interest rate environments and declines in falling interest rate environments due to expected prepayments and earning rates on escrow deposits.
Noninterest Expense of $77.3 million increased $27.0 million, or 54%, compared to $50.4 million, primarily due to a $15.2 million, or 54%, increase in salaries and employee benefits to support business growth, including $5.8 million for expenses associated with the addition of production staff, which is expected to continue to elevate production, gain on sale, and expenses in future quarters as well. Also contributing to the higher expenses during the quarter, was a $7.1 million increase in other expenses primarily associated with taxes, insurance, receiver expenses, and legal fees for collateral preservation of nonperforming loans, a $2.5 million increase in credit risk transfer premium expense associated with ongoing credit default swaps that were executed in 2024, in addition to a swap upsize in June 2025, as well as a $1.6 million, or 28%, increase in deposit insurance expense, reflecting an increase in underperforming assets, coupled with an increase in total assets.
Comparison of Operating Results for the Three Months Ended
June 30, 2025 and March 31, 2025
Net Interest Income of $128.7 million increased $6.5 million, or 5%, compared to $122.2 million, primarily due to higher average balances on loans and loans held for sale, partially offset by higher average balances on interest-bearing checking accounts and borrowings.
Net interest margin of 2.83% decreased 6 basis points compared to 2.89%. The margin was negatively impacted by a shift in business mix, as highly profitable but lower-margin loans held for sale balances, consisting of primarily warehouse loans, grew by $122.3 million, or 3%, and warehouse repurchase agreements grew by $435.5 million, or 31%, while higher-margin loans receivable balances contracted by a net of $338.7 million during the quarter.
Interest rate spread of 2.33% decreased 5 basis points compared to 2.38%.
Interest Income of $304.4 million increased $17.2 million, or 6%, compared to $287.2 million, primarily reflecting an increase in average balances at lower yields on loans and loans held for sale.
Average balances of $14.8 billion for loans and loans held for sale increased 8%, compared to $13.8 billion.
Average yields on loans and loans held for sale of 6.92% decreased 14 basis points compared to 7.06%.
Interest Expense of $175.7 million increased $10.7 million, or 6% compared to $165.0 million. The increase was primarily driven by higher average balances on interest-bearing checking accounts, and higher average balances at lower rates on borrowings.
Average balances of $6.2 billion for interest-bearing checking accounts increased 20%, compared to $5.1 billion.
Average interest rates of 3.96% on interest-bearing checking accounts decreased 5 basis points compared to 4.01%.
Average balances of $3.5 billion for borrowings increased $328.0 million, or 10%, compared to $3.1 billion.
Average interest rates of 5.15% borrowings decreased 18 basis points compared to 5.33%.
Noninterest Income of $50.5 million increased $26.8 million, or 113%, compared to $23.7 million. The increase was primarily due to an $11.7 million, or 101%, increase in gain on sale of loans, a $6.3 million, or 186%, increase in syndication and asset management fees, a $6.1 million, or 193%, increase in other income, and a $2.1 million, or 53%, increase in loan servicing fees.
Gain on sale of loans increased $11.7 million, reflecting higher volume in the multi-family loan portfolio, including a securitization through a Freddie Mac-sponsored Q-Series transaction.
Other income included a $4.3 million positive fair market value adjustment to floor derivatives compared to a $2.3 million negative fair market value adjustment to derivatives in the prior period.
Loan servicing fees included a $258,000 positive fair market value adjustment to servicing rights, with a $487,000 negative adjustment in the Banking segment and a $745,000 positive adjustment in the Multi-family Mortgage Banking segment. This compared to a $754,000 negative fair market value adjustment to servicing rights in the prior period, with a $1.2 million negative adjustment in the Banking segment and a $449,000 positive adjustment in the Multi-family Mortgage Banking segment. The value of servicing rights generally increases in rising 10-year interest rate environments and declines in falling interest rate environments due to expected prepayments and earning rates on escrow deposits.
Noninterest Expense of $77.3 million increased $15.7 million, or 25%, compared to $61.7 million, primarily driven by a $7.1 million increase in salaries and employee benefits associated with the addition of production staff, which is expected to continue to elevate production, gain on sale, and expenses in future quarters as well. The increase also reflects a $6.9 million increase in other expenses primarily associated with taxes, insurance, receiver expenses, and legal fees for the collateral preservation of nonperforming loans, as well as an increase in credit risk transfer premium expense.
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 $19.1 billion in assets and $12.7 billion in deposits as of June 30, 2025, 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.
|
Consolidated Balance Sheets |
||||||||||
|
(Unaudited) |
||||||||||
|
(In thousands, except share data) |
||||||||||
|
June 30, |
March 31, |
December 31, |
September 30, |
June 30, |
||||||
|
2025 |
2025 |
2024 |
2024 |
2024 |
||||||
|
Assets |
||||||||||
|
Cash and due from banks |
$ 15,419 |
$ 15,609 |
$ 10,989 |
$ 12,214 |
$ 10,242 |
|||||
|
Interest-earning demand accounts |
631,746 |
505,687 |
465,621 |
589,692 |
530,640 |
|||||
|
Cash and cash equivalents |
647,165 |
521,296 |
476,610 |
601,906 |
540,882 |
|||||
|
Securities purchased under agreements to resell |
1,539 |
1,550 |
1,559 |
3,279 |
3,304 |
|||||
|
Mortgage loans in process of securitization |
402,427 |
389,797 |
428,206 |
430,966 |
209,244 |
|||||
|
Securities available for sale ($602,962, $626,271, $635,946, |
936,343 |
961,183 |
980,050 |
953,063 |
1,017,019 |
|||||
|
Securities held to maturity ($1,547,525, $1,605,151, $1,664,674, |
1,548,211 |
1,606,286 |
1,664,686 |
1,755,047 |
1,291,110 |
|||||
|
Federal Home Loan Bank (FHLB) stock and other equity securities |
217,850 |
217,850 |
217,804 |
184,050 |
67,499 |
|||||
|
Loans held for sale (includes $91,930, $75,920, $78,170, $91,084 |
4,105,765 |
3,983,452 |
3,771,510 |
3,808,234 |
3,483,076 |
|||||
|
Loans receivable, net of allowance for credit losses on loans |
10,432,117 |
10,343,724 |
10,354,002 |
10,261,890 |
10,933,189 |
|||||
|
Premises and equipment, net |
71,050 |
67,787 |
58,617 |
53,161 |
46,833 |
|||||
|
Servicing rights |
193,037 |
189,711 |
189,935 |
177,327 |
178,776 |
|||||
|
Interest receivable |
82,391 |
82,811 |
83,409 |
86,612 |
90,360 |
|||||
|
Goodwill |
8,014 |
8,014 |
8,014 |
8,014 |
8,014 |
|||||
|
Other assets and receivables |
495,295 |
424,339 |
571,330 |
329,427 |
343,116 |
|||||
|
Total assets |
$ 19,141,204 |
$ 18,797,800 |
$ 18,805,732 |
$ 18,652,976 |
$ 18,212,422 |
|||||
|
Liabilities and Shareholders’ Equity |
||||||||||
|
Liabilities |
||||||||||
|
Deposits |
||||||||||
|
Noninterest-bearing |
$ 315,523 |
$ 313,296 |
$ 239,005 |
$ 311,386 |
$ 383,260 |
|||||
|
Interest-bearing |
12,371,312 |
12,092,869 |
11,680,971 |
12,580,501 |
14,533,807 |
|||||
|
Total deposits |
12,686,835 |
12,406,165 |
11,919,976 |
12,891,887 |
14,917,067 |
|||||
|
Borrowings |
4,009,474 |
4,001,744 |
4,386,122 |
3,568,721 |
1,159,206 |
|||||
|
Deferred tax liabilities |
29,228 |
35,740 |
25,289 |
19,530 |
25,098 |
|||||
|
Other liabilities |
231,035 |
193,416 |
231,035 |
233,731 |
222,904 |
|||||
|
Total liabilities |
16,956,572 |
16,637,065 |
16,562,422 |
16,713,869 |
16,324,275 |
|||||
|
Commitments and Contingencies |
||||||||||
|
Shareholders’ Equity |
||||||||||
|
Common stock, without par value |
||||||||||
|
Authorized – 75,000,000 shares |
||||||||||
|
Issued and outstanding – 45,885,458 shares, 45,881,706 |
241,452 |
240,512 |
240,313 |
239,448 |
238,492 |
|||||
|
Preferred stock, without par value – 5,000,000 total shares |
||||||||||
|
6% Series B Preferred stock – $1,000 per share liquidation |
||||||||||
|
Authorized – no shares at June 30, 2025 and March 31, |
||||||||||
|
Issued and outstanding – no shares at June 30, 2025 and |
— |
— |
120,844 |
120,844 |
120,844 |
|||||
|
6% Series C Preferred stock – $1,000 per share liquidation |
||||||||||
|
Authorized – 200,000 shares |
||||||||||
|
Issued and outstanding – 196,181 shares (equivalent to |
191,084 |
191,084 |
191,084 |
191,084 |
191,084 |
|||||
|
8.25% Series D Preferred stock – $1,000 per share liquidation |
||||||||||
|
Authorized – 300,000 shares |
||||||||||
|
Issued and outstanding – 142,500 shares (equivalent to |
137,459 |
137,459 |
137,459 |
137,459 |
137,459 |
|||||
|
7.625% Series E Preferred stock – $1,000 per share |
||||||||||
|
Authorized – 230,000 shares |
||||||||||
|
Issued and outstanding – 230,000 shares (equivalent to |
222,748 |
222,748 |
222,748 |
— |
— |
|||||
|
Retained earnings |
1,392,136 |
1,369,009 |
1,330,995 |
1,250,176 |
1,200,778 |
|||||
|
Accumulated other comprehensive (loss) income |
(247) |
(77) |
(133) |
96 |
(510) |
|||||
|
Total shareholders’ equity |
2,184,632 |
2,160,735 |
2,243,310 |
1,939,107 |
1,888,147 |
|||||
|
Total liabilities and shareholders’ equity |
$ 19,141,204 |
$ 18,797,800 |
$ 18,805,732 |
$ 18,652,976 |
$ 18,212,422 |
|||||
|
Consolidated Statement of Income |
|||||||||||||
|
(Unaudited) |
|||||||||||||
|
(In thousands, except share data) |
|||||||||||||
|
Three Months Ended |
Change |
||||||||||||
|
June 30, |
March 31, |
June 30, |
2Q25 |
2Q25 |
|||||||||
|
2025 |
2025 |
2024 |
vs. 1Q25 |
vs. 2Q24 |
|||||||||
|
Interest Income |
|||||||||||||
|
Loans |
$ |
255,641 |
$ |
239,280 |
$ |
284,421 |
7 % |
-10 % |
|||||
|
Mortgage loans in process of securitization |
5,304 |
3,743 |
3,044 |
42 % |
74 % |
||||||||
|
Investment securities: |
|||||||||||||
|
Available for sale |
12,095 |
12,358 |
14,784 |
-2 % |
-18 % |
||||||||
|
Held to maturity |
23,166 |
24,358 |
19,799 |
-5 % |
17 % |
||||||||
|
FHLB stock and other equity securities (dividends) |
4,641 |
4,372 |
1,277 |
6 % |
263 % |
||||||||
|
Other |
3,552 |
3,093 |
4,948 |
15 % |
-28 % |
||||||||
|
Total interest income |
304,399 |
287,204 |
328,273 |
6 % |
-7 % |
||||||||
|
Interest Expense |
|||||||||||||
|
Deposits |
131,375 |
123,941 |
179,651 |
6 % |
-27 % |
||||||||
|
Short-term borrowings |
36,981 |
33,364 |
11,612 |
11 % |
218 % |
||||||||
|
Long-term borrowings |
7,324 |
7,703 |
8,891 |
-5 % |
-18 % |
||||||||
|
Total interest expense |
175,680 |
165,008 |
200,154 |
6 % |
-12 % |
||||||||
|
Net Interest Income |
128,719 |
122,196 |
128,119 |
5 % |
— |
||||||||
|
Provision for credit losses |
53,027 |
7,727 |
9,965 |
586 % |
432 % |
||||||||
|
Net Interest Income After Provision for Credit |
75,692 |
114,469 |
118,154 |
-34 % |
-36 % |
||||||||
|
Noninterest Income |
|||||||||||||
|
Gain on sale of loans |
23,342 |
11,619 |
11,168 |
101 % |
109 % |
||||||||
|
Loan servicing fees, net |
6,138 |
4,010 |
10,827 |
53 % |
-43 % |
||||||||
|
Mortgage warehouse fees |
2,039 |
1,513 |
1,524 |
35 % |
34 % |
||||||||
|
Syndication and asset management fees |
9,707 |
3,389 |
3,233 |
186 % |
200 % |
||||||||
|
Other income |
9,254 |
3,162 |
4,599 |
193 % |
101 % |
||||||||
|
Total noninterest income |
50,480 |
23,693 |
31,351 |
113 % |
61 % |
||||||||
|
Noninterest Expense |
|||||||||||||
|
Salaries and employee benefits |
43,566 |
36,419 |
28,373 |
20 % |
54 % |
||||||||
|
Loan expense |
1,142 |
798 |
993 |
43 % |
15 % |
||||||||
|
Occupancy and equipment |
2,494 |
2,351 |
2,239 |
6 % |
11 % |
||||||||
|
Professional fees |
3,159 |
2,894 |
3,556 |
9 % |
-11 % |
||||||||
|
Deposit insurance expense |
7,152 |
7,228 |
5,579 |
-1 % |
28 % |
||||||||
|
Technology expense |
2,446 |
2,374 |
1,859 |
3 % |
32 % |
||||||||
|
Credit risk transfer premium expense |
4,767 |
3,862 |
2,294 |
23 % |
108 % |
||||||||
|
Other expense |
12,611 |
5,738 |
5,487 |
120 % |
130 % |
||||||||
|
Total noninterest expense |
77,337 |
61,664 |
50,380 |
25 % |
54 % |
||||||||
|
Income Before Income Taxes |
48,835 |
76,498 |
99,125 |
-36 % |
-51 % |
||||||||
|
Provision for income taxes |
10,854 |
18,259 |
22,732 |
-41 % |
-52 % |
||||||||
|
Net Income |
$ |
37,981 |
$ |
58,239 |
$ |
76,393 |
-35 % |
-50 % |
|||||
|
Dividends on preferred stock |
(10,266) |
(10,265) |
(7,757) |
— |
32 % |
||||||||
|
Impact of preferred stock redemption |
— |
(5,371) |
(1,823) |
-100 % |
-100 % |
||||||||
|
Net Income Available to Common |
$ |
27,715 |
$ |
42,603 |
$ |
66,813 |
-35 % |
-59 % |
|||||
|
Basic Earnings Per Share |
$ |
0.60 |
$ |
0.93 |
$ |
1.50 |
-35 % |
-60 % |
|||||
|
Diluted Earnings Per Share |
$ |
0.60 |
$ |
0.93 |
$ |
1.49 |
-35 % |
-60 % |
|||||
|
Weighted-Average Shares Outstanding |
|||||||||||||
|
Basic |
45,883,644 |
45,824,022 |
44,569,345 |
||||||||||
|
Diluted |
45,929,563 |
45,914,083 |
44,698,324 |
||||||||||
|
Consolidated Statement of Income |
||||||||
|
(Unaudited) |
||||||||
|
(In thousands, except share data) |
||||||||
|
Six Months Ended |
||||||||
|
June 30, |
June 30, |
|||||||
|
2025 |
2024 |
Change |
||||||
|
Interest Income |
||||||||
|
Loans |
$ |
494,921 |
$ |
556,419 |
-11 % |
|||
|
Mortgage loans in process of securitization |
9,047 |
4,764 |
90 % |
|||||
|
Investment securities: |
||||||||
|
Available for sale |
24,453 |
29,172 |
-16 % |
|||||
|
Held to maturity |
47,524 |
40,321 |
18 % |
|||||
|
FHLB stock and other equity securities (dividends) |
9,013 |
2,121 |
325 % |
|||||
|
Other |
6,645 |
9,649 |
-31 % |
|||||
|
Total interest income |
591,603 |
642,446 |
-8 % |
|||||
|
Interest Expense |
||||||||
|
Deposits |
255,316 |
350,673 |
-27 % |
|||||
|
Short-term borrowings |
70,345 |
18,834 |
274 % |
|||||
|
Long-term borrowings |
15,027 |
17,764 |
-15 % |
|||||
|
Total interest expense |
340,688 |
387,271 |
-12 % |
|||||
|
Net Interest Income |
250,915 |
255,175 |
-2 % |
|||||
|
Provision for credit losses |
60,754 |
14,691 |
314 % |
|||||
|
Net Interest Income After Provision for Credit Losses |
190,161 |
240,484 |
-21 % |
|||||
|
Noninterest Income |
||||||||
|
Gain on sale of loans |
34,961 |
20,524 |
70 % |
|||||
|
Loan servicing fees, net |
10,148 |
30,229 |
-66 % |
|||||
|
Mortgage warehouse fees |
3,552 |
2,506 |
42 % |
|||||
|
Loss on sale of investments available for sale (1) |
— |
(108) |
100 % |
|||||
|
Syndication and asset management fees |
13,096 |
8,536 |
53 % |
|||||
|
Other income |
12,416 |
10,538 |
18 % |
|||||
|
Total noninterest income |
74,173 |
72,225 |
3 % |
|||||
|
Noninterest Expense |
||||||||
|
Salaries and employee benefits |
79,985 |
57,969 |
38 % |
|||||
|
Loan expense |
1,940 |
1,949 |
— |
|||||
|
Occupancy and equipment |
4,845 |
4,476 |
8 % |
|||||
|
Professional fees |
6,053 |
7,655 |
-21 % |
|||||
|
Deposit insurance expense |
14,380 |
10,704 |
34 % |
|||||
|
Technology expense |
4,820 |
3,713 |
30 % |
|||||
|
Credit risk transfer premium expense |
8,629 |
2,294 |
276 % |
|||||
|
Other expense |
18,349 |
10,532 |
74 % |
|||||
|
Total noninterest expense |
139,001 |
99,292 |
40 % |
|||||
|
Income Before Income Taxes |
125,333 |
213,417 |
-41 % |
|||||
|
Provision for income taxes (2) |
29,113 |
49,970 |
-42 % |
|||||
|
Net Income |
$ |
96,220 |
$ |
163,447 |
-41 % |
|||
|
Dividends on preferred stock |
(20,531) |
(16,424) |
25 % |
|||||
|
Impact of preferred stock redemption |
(5,371) |
(1,823) |
195 % |
|||||
|
Net Income Available to Common Shareholders |
$ |
70,318 |
$ |
145,200 |
-52 % |
|||
|
Basic Earnings Per Share |
$ |
1.53 |
$ |
3.30 |
-54 % |
|||
|
Diluted Earnings Per Share |
$ |
1.53 |
$ |
3.29 |
-53 % |
|||
|
Weighted-Average Shares Outstanding |
||||||||
|
Basic |
45,853,998 |
43,937,665 |
||||||
|
Diluted |
45,921,988 |
44,082,485 |
||||||
|
(1) Includes $0 and $(108) respectively, related to accumulated other comprehensive earnings reclassifications. |
||||||||
|
(2) Includes $0 and $26 respectively, related to income tax benefit for reclassification items. |
||||||||
|
Key Operating Results |
||||||||||||
|
(Unaudited) |
||||||||||||
|
($ in thousands, except share data) |
||||||||||||
|
Three Months Ended |
Change |
|||||||||||
|
June 30, |
March 31, |
June 30, |
2Q25 |
2Q25 |
||||||||
|
2025 |
2025 |
2024 |
vs. 1Q25 |
vs. 2Q24 |
||||||||
|
Noninterest expense |
$ 77,337 |
$ 61,664 |
$ 50,380 |
25 % |
54 % |
|||||||
|
Net interest income (before provision for credit losses) |
128,719 |
122,196 |
128,119 |
5 % |
— |
|||||||
|
Noninterest income |
50,480 |
23,693 |
31,351 |
113 % |
61 % |
|||||||
|
Total income |
$ 179,199 |
$ 145,889 |
$ 159,470 |
23 % |
12 % |
|||||||
|
Efficiency ratio |
43.16 % |
42.27 % |
31.59 % |
89 |
bps |
1,157 |
bps |
|||||
|
Average assets |
$ 18,984,925 |
$ 17,831,950 |
$ 17,814,191 |
6 % |
7 % |
|||||||
|
Net income |
37,981 |
58,239 |
76,393 |
-35 % |
-50 % |
|||||||
|
Return on average assets before annualizing |
0.20 % |
0.33 % |
0.43 % |
|||||||||
|
Annualization factor |
4.00 |
4.00 |
4.00 |
|||||||||
|
Return on average assets |
0.80 % |
1.31 % |
1.72 % |
(51) |
bps |
(92) |
bps |
|||||
|
Return on average tangible common shareholders’ equity (1) |
6.75 % |
10.65 % |
19.55 % |
(390) |
bps |
(1,280) |
bps |
|||||
|
Tangible book value per common share (1) |
$ 35.42 |
$ 34.90 |
$ 31.27 |
1 % |
13 % |
|||||||
|
Tangible common shareholders’ equity/tangible assets (1) |
8.49 % |
8.52 % |
7.86 % |
(3) |
bps |
63 |
bps |
|||||
|
Consolidated ratios |
||||||||||||
|
Total capital/risk-weighted assets(2) |
13.4 |
% |
13.0 |
% |
12.0 |
% |
||||||
|
Tier I capital/risk-weighted assets(2) |
12.8 |
% |
12.4 |
% |
11.4 |
% |
||||||
|
Common Equity Tier I capital/risk-weighted assets(2) |
9.5 |
% |
9.2 |
% |
8.7 |
% |
||||||
|
Tier I capital/average assets(2) |
11.5 |
% |
12.1 |
% |
10.6 |
% |
||||||
|
(1) Non-GAAP financial measure – see “Reconciliation of Non-GAAP Measures” below: |
||||||||||||
|
(2) As defined by regulatory agencies; June 30, 2025 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 dividends. 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, |
2Q25 |
2Q25 |
||||||||
|
2025 |
2025 |
2024 |
vs. 1Q25 |
vs. 2Q24 |
||||||||
|
Net income |
$ 37,981 |
$ 58,239 |
$ 76,393 |
-35 % |
-50 % |
|||||||
|
Less: preferred stock dividends |
(10,266) |
(10,265) |
(7,757) |
— |
32 % |
|||||||
|
Less: impact of preferred stock redemption |
– |
(5,371) |
(1,823) |
-100 % |
-100 % |
|||||||
|
Net income available to common shareholders |
$ 27,715 |
$ 42,603 |
$ 66,813 |
-35 % |
-59 % |
|||||||
|
Average shareholders’ equity |
$ 2,201,836 |
$ 2,160,169 |
$ 1,824,730 |
2 % |
21 % |
|||||||
|
Less: average goodwill & intangibles |
(8,065) |
(8,070) |
(8,140) |
— |
-1 % |
|||||||
|
Less: average preferred stock |
(551,290) |
(552,633) |
(449,387) |
— |
23 % |
|||||||
|
Average tangible common shareholders’ equity |
$ 1,642,481 |
$ 1,599,466 |
$ 1,367,203 |
3 % |
20 % |
|||||||
|
Annualization factor |
4.00 |
4.00 |
4.00 |
|||||||||
|
Return on average tangible common shareholders’ equity |
6.75 % |
10.65 % |
19.55 % |
(390) |
bps |
(1,280) |
bps |
|||||
|
Total equity |
$ 2,184,632 |
$ 2,160,735 |
$ 1,888,147 |
1 % |
16 % |
|||||||
|
Less: goodwill and intangibles |
(8,062) |
(8,068) |
(8,108) |
— |
-1 % |
|||||||
|
Less: preferred stock |
(551,291) |
(551,291) |
(449,387) |
— |
23 % |
|||||||
|
Tangible common shareholders’ equity |
$ 1,625,279 |
$ 1,601,376 |
$ 1,430,652 |
1 % |
14 % |
|||||||
|
Assets |
$ 19,141,204 |
$ 18,797,800 |
$ 18,212,422 |
2 % |
5 % |
|||||||
|
Less: goodwill and intangibles |
(8,062) |
(8,068) |
(8,108) |
— |
-1 % |
|||||||
|
Tangible assets |
$ 19,133,142 |
$ 18,789,732 |
$ 18,204,314 |
2 % |
5 % |
|||||||
|
Ending common shares |
45,885,458 |
45,881,706 |
45,757,567 |
|||||||||
|
Tangible book value per common share |
$ 35.42 |
$ 34.90 |
$ 31.27 |
1 % |
13 % |
|||||||
|
Tangible common shareholders’ equity/tangible assets |
8.49 % |
8.52 % |
7.86 % |
(3) |
bps |
63 |
bps |
|||||
|
Key Operating Results |
||||||||
|
(Unaudited) |
||||||||
|
($ in thousands, except share data) |
||||||||
|
Six Months Ended |
||||||||
|
June 30, |
June 30, |
|||||||
|
2025 |
2024 |
Change |
||||||
|
Noninterest expense |
$ 139,001 |
$ 99,292 |
40 % |
|||||
|
Net interest income (before provision for credit losses) |
250,915 |
255,175 |
-2 % |
|||||
|
Noninterest income |
74,173 |
72,225 |
3 % |
|||||
|
Total income |
$ 325,088 |
$ 327,400 |
-1 % |
|||||
|
Efficiency ratio |
42.76 % |
30.33 % |
1,243 |
bps |
||||
|
Average assets |
$ 18,411,623 |
$ 17,303,632 |
6 % |
|||||
|
Net income |
96,220 |
163,447 |
-41 % |
|||||
|
Return on average assets before annualizing |
0.52 % |
0.94 % |
||||||
|
Annualization factor |
2.00 |
2.00 |
||||||
|
Return on average assets |
1.05 % |
1.89 % |
(84) |
bps |
||||
|
Return on average tangible common shareholders’ equity (1) |
8.68 % |
22.30 % |
(1,362) |
bps |
||||
|
Tangible book value per common share (1) |
$ 35.42 |
$ 31.27 |
13 % |
|||||
|
Tangible common shareholders’ equity/tangible assets (1) |
8.49 % |
7.86 % |
63 |
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 dividends. 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, |
|||||||
|
2025 |
2024 |
Change |
||||||
|
Net income |
$ 96,220 |
$ 163,447 |
-41 % |
|||||
|
Less: preferred stock dividends |
(20,531) |
(16,424) |
25 % |
|||||
|
Less: impact of preferred stock redemption |
(5,371) |
(1,823) |
195 % |
|||||
|
Net income available to common shareholders |
$ 70,318 |
$ 145,200 |
-52 % |
|||||
|
Average shareholders’ equity |
$ 2,181,117 |
$ 1,786,195 |
22 % |
|||||
|
Less: average goodwill & intangibles |
(8,067) |
(9,317) |
-13 % |
|||||
|
Less: average preferred stock |
(551,958) |
(474,497) |
16 % |
|||||
|
Average tangible common shareholders’ equity |
$ 1,621,092 |
$ 1,302,381 |
24 % |
|||||
|
Annualization factor |
2.00 |
2.00 |
||||||
|
Return on average tangible common shareholders’ equity |
8.68 % |
22.30 % |
(1,362) |
bps |
||||
|
Total equity |
$ 2,184,632 |
$ 1,888,147 |
16 % |
|||||
|
Less: goodwill and intangibles |
(8,062) |
(8,108) |
-1 % |
|||||
|
Less: preferred stock |
(551,291) |
(449,387) |
23 % |
|||||
|
Tangible common shareholders’ equity |
$ 1,625,279 |
$ 1,430,652 |
14 % |
|||||
|
Assets |
$ 19,141,204 |
$ 18,212,422 |
5 % |
|||||
|
Less: goodwill and intangibles |
(8,062) |
(8,108) |
-1 % |
|||||
|
Tangible assets |
$ 19,133,142 |
$ 18,204,314 |
5 % |
|||||
|
Ending common shares |
45,885,458 |
45,757,567 |
||||||
|
Tangible book value per common share |
$ 35.42 |
$ 31.27 |
13 % |
|||||
|
Tangible common shareholders’ equity/tangible assets |
8.49 % |
7.86 % |
63 |
bps |
||||
|
Merchants Bancorp |
|||||||||||
|
Average Balance Analysis |
|||||||||||
|
($ in thousands) |
|||||||||||
|
(Unaudited) |
|||||||||||
|
Three Months Ended |
|||||||||||
|
June 30, 2025 |
March 31, 2025 |
June 30, 2024 |
|||||||||
|
Average |
Yield/ |
Average |
Yield/ |
Average |
Yield/ |
||||||
|
Balance |
Interest |
Rate |
Balance |
Interest |
Rate |
Balance |
Interest |
Rate |
|||
|
Assets: |
|||||||||||
|
Interest-earning deposits, and other interest or |
$ 539,357 |
$ 8,193 |
6.09 % |
$ 511,077 |
$ 7,465 |
5.92 % |
$ 438,445 |
$ 6,225 |
5.71 % |
||
|
Securities available for sale |
955,186 |
12,095 |
5.08 % |
961,065 |
12,358 |
5.21 % |
1,039,388 |
14,784 |
5.72 % |
||
|
Securities held to maturity |
1,572,186 |
23,166 |
5.91 % |
1,643,703 |
24,358 |
6.01 % |
1,160,170 |
19,799 |
6.86 % |
||
|
Mortgage loans in process of securitization |
376,904 |
5,304 |
5.64 % |
277,426 |
3,743 |
5.47 % |
234,706 |
3,044 |
5.22 % |
||
|
Loans and loans held for sale |
14,826,151 |
255,641 |
6.92 % |
13,751,197 |
239,280 |
7.06 % |
14,347,165 |
284,421 |
7.97 % |
||
|
Total interest-earning assets |
18,269,784 |
304,399 |
6.68 % |
17,144,468 |
287,204 |
6.79 % |
17,219,874 |
328,273 |
7.67 % |
||
|
Allowance for credit losses on loans |
(90,860) |
(86,711) |
(76,456) |
||||||||
|
Noninterest-earning assets |
806,001 |
774,193 |
670,773 |
||||||||
|
Total assets |
$ 18,984,925 |
$ 17,831,950 |
$ 17,814,191 |
||||||||
|
Liabilities & Shareholders’ Equity: |
|||||||||||
|
Interest-bearing checking |
$ 6,161,736 |
60,845 |
3.96 % |
$ 5,121,343 |
50,609 |
4.01 % |
4,935,123 |
58,128 |
4.74 % |
||
|
Savings deposits |
145,162 |
8 |
0.02 % |
146,359 |
15 |
0.04 % |
145,262 |
19 |
0.05 % |
||
|
Money market |
3,354,820 |
35,137 |
4.20 % |
3,398,469 |
34,506 |
4.12 % |
2,788,335 |
33,207 |
4.79 % |
||
|
Certificates of deposit |
3,090,250 |
35,385 |
4.59 % |
3,369,269 |
38,811 |
4.67 % |
6,535,651 |
88,297 |
5.43 % |
||
|
Total interest-bearing deposits |
12,751,968 |
131,375 |
4.13 % |
12,035,440 |
123,941 |
4.18 % |
14,404,371 |
179,651 |
5.02 % |
||
|
Borrowings |
3,453,960 |
44,305 |
5.15 % |
3,125,935 |
41,067 |
5.33 % |
1,031,180 |
20,503 |
8.00 % |
||
|
Total interest-bearing liabilities |
16,205,928 |
175,680 |
4.35 % |
15,161,375 |
165,008 |
4.41 % |
15,435,551 |
200,154 |
5.22 % |
||
|
Noninterest-bearing deposits |
376,217 |
294,248 |
331,246 |
||||||||
|
Noninterest-bearing liabilities |
200,944 |
216,158 |
222,664 |
||||||||
|
Total liabilities |
16,783,089 |
15,671,781 |
15,989,461 |
||||||||
|
Shareholders’ equity |
2,201,836 |
2,160,169 |
1,824,730 |
||||||||
|
Total liabilities and shareholders’ equity |
$ 18,984,925 |
$ 17,831,950 |
$ 17,814,191 |
||||||||
|
Net interest income |
$ 128,719 |
$ 122,196 |
$ 128,119 |
||||||||
|
Net interest spread |
2.33 % |
2.38 % |
2.45 % |
||||||||
|
Net interest-earning assets |
$ 2,063,856 |
$ 1,983,093 |
$ 1,784,323 |
||||||||
|
Net interest margin |
2.83 % |
2.89 % |
2.99 % |
||||||||
|
Average interest-earning assets to |
112.74 % |
113.08 % |
111.56 % |
||||||||
|
Supplemental Results |
||||||||||||||||
|
(Unaudited) |
||||||||||||||||
|
($ in thousands) |
||||||||||||||||
|
Net Income |
Net Income |
|||||||||||||||
|
Three Months Ended |
Six Months Ended |
|||||||||||||||
|
June 30, |
March 31, |
June 30, |
June 30, |
|||||||||||||
|
2025 |
2025 |
2024 |
2025 |
2024 |
||||||||||||
|
Segment |
||||||||||||||||
|
Multi-family Mortgage Banking |
$ 9,269 |
$ 3,413 |
$ 9,037 |
$ 12,682 |
$ 25,646 |
|||||||||||
|
Mortgage Warehousing |
22,986 |
15,398 |
22,270 |
38,384 |
42,460 |
|||||||||||
|
Banking |
14,574 |
47,107 |
52,378 |
61,681 |
108,803 |
|||||||||||
|
Other |
(8,848) |
(7,679) |
(7,292) |
(16,527) |
(13,462) |
|||||||||||
|
Total |
$ 37,981 |
$ 58,239 |
$ 76,393 |
$ 96,220 |
$ 163,447 |
|||||||||||
|
Total Assets |
||||||||||||||||
|
June 30, 2025 |
March 31, 2025 |
December 31, 2024 |
||||||||||||||
|
Amount |
% |
Amount |
% |
Amount |
% |
|||||||||||
|
Segment |
||||||||||||||||
|
Multi-family Mortgage Banking |
$ 487,853 |
2 % |
$ 460,441 |
3 % |
$ 479,099 |
2 % |
||||||||||
|
Mortgage Warehousing |
6,999,701 |
37 % |
5,902,165 |
31 % |
6,000,624 |
32 % |
||||||||||
|
Banking |
11,404,488 |
60 % |
12,002,564 |
64 % |
11,761,202 |
63 % |
||||||||||
|
Other |
249,162 |
1 % |
432,630 |
2 % |
564,807 |
3 % |
||||||||||
|
Total |
$ 19,141,204 |
100 % |
$ 18,797,800 |
100 % |
$ 18,805,732 |
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, |
|||||||||||||
|
2025 |
2025 |
2024 |
2025 |
2024 |
||||||||||||
|
Loan Type |
||||||||||||||||
|
Multi-family |
$ 19,815 |
$ 10,125 |
$ 9,083 |
$ 29,940 |
$ 17,506 |
|||||||||||
|
Single-family |
2,428 |
206 |
524 |
2,634 |
804 |
|||||||||||
|
Small Business Association (SBA) |
1,099 |
1,288 |
1,561 |
2,387 |
2,214 |
|||||||||||
|
Total |
$ 23,342 |
$ 11,619 |
$ 11,168 |
$ 34,961 |
$ 20,524 |
|||||||||||
|
Servicing Rights |
Servicing Rights |
|||||||||||||||
|
Three Months Ended |
Six Months Ended |
|||||||||||||||
|
June 30, |
March 31, |
June 30, |
June 30, |
|||||||||||||
|
2025 |
2025 |
2024 |
2025 |
2024 |
||||||||||||
|
Balance, beginning of period |
$ 189,711 |
$ 189,935 |
$ 172,200 |
$ 189,935 |
$ 158,457 |
|||||||||||
|
Additions |
||||||||||||||||
|
Purchased servicing |
70 |
– |
– |
70 |
– |
|||||||||||
|
Originated servicing |
5,244 |
3,338 |
3,761 |
8,582 |
5,927 |
|||||||||||
|
Subtractions |
||||||||||||||||
|
Paydowns |
(2,246) |
(2,808) |
(2,252) |
(5,054) |
(4,639) |
|||||||||||
|
Changes in fair value |
258 |
(754) |
5,067 |
(496) |
19,031 |
|||||||||||
|
Balance, end of period |
$ 193,037 |
$ 189,711 |
$ 178,776 |
$ 193,037 |
$ 178,776 |
|||||||||||
|
Supplemental Results |
|||||||||||
|
(Unaudited) |
|||||||||||
|
($ in thousands) |
|||||||||||
|
Loans Receivable and Loans Held for Sale |
|||||||||||
|
June 30, |
March 31, |
December 31, |
|||||||||
|
2025 |
2025 |
2024 |
|||||||||
|
Mortgage warehouse repurchase agreements |
$ 1,843,742 |
$ 1,408,239 |
$ 1,446,068 |
||||||||
|
Residential real estate (1) |
988,783 |
1,332,601 |
1,322,853 |
||||||||
|
Multi-family financing |
4,833,548 |
4,600,117 |
4,624,299 |
||||||||
|
Healthcare financing |
1,442,095 |
1,583,290 |
1,484,483 |
||||||||
|
Commercial and commercial real estate (2)(3) |
1,328,765 |
1,418,741 |
1,476,211 |
||||||||
|
Agricultural production and real estate |
82,425 |
79,190 |
77,631 |
||||||||
|
Consumer and margin loans |
4,570 |
4,959 |
6,843 |
||||||||
|
Loans receivable |
10,523,928 |
10,427,137 |
10,438,388 |
||||||||
|
Less: Allowance for credit losses on loans |
91,811 |
83,413 |
84,386 |
||||||||
|
Loans receivable, net |
$ 10,432,117 |
$ 10,343,724 |
$ 10,354,002 |
||||||||
|
Loans held for sale |
4,105,765 |
3,983,452 |
3,771,510 |
||||||||
|
Total loans, net of allowance |
$ 14,537,882 |
$ 14,327,176 |
$ 14,125,512 |
||||||||
|
(1) Includes $0.8 billion, $1.2 billion and $1.2 billion of All-In-One © first-lien home equity lines of credit as of June 30, 2025, March 31, |
|||||||||||
|
(2) Includes $0.8 billion, $0.8 billion and $0.9 billion of revolving lines of credit collateralized primarily by mortgage servicing rights as of |
|||||||||||
|
(3) Includes only $19.8 million, $19.5 million and $18.7 million of non-owner occupied commercial real estate as of June 30, 2025, |
|||||||||||
|
Loan Credit Risk Profile |
|||||||||||
|
June 30, 2025 |
March 31, 2025 |
December 31, 2024 |
|||||||||
|
Amount |
% |
Amount |
% |
Amount |
% |
||||||
|
Pass |
$ 9,934,759 |
94.4 % |
$ 9,695,595 |
93.0 % |
$ 9,741,087 |
93.3 % |
|||||
|
Special mention |
171,512 |
1.6 % |
407,895 |
3.9 % |
379,969 |
3.6 % |
|||||
|
Substandard |
417,657 |
4.0 % |
323,647 |
3.1 % |
317,332 |
3.0 % |
|||||
|
Doubtful |
— |
— |
— |
— |
— |
— |
|||||
|
Loans receivable |
$ 10,523,928 |
100.0 % |
$ 10,427,137 |
100.0 % |
$ 10,438,388 |
100.0 % |
|||||
|
Charge-offs (year-to-date) |
$ 56,570 |
$ 10,507 |
$ 10,587 |
||||||||
|
Recoveries (year-to-date) |
$ 28 |
$ 28 |
$ 136 |
||||||||
|
Nonperforming Loans |
|||||||||||
|
June 30, |
March 31, |
December 31, |
|||||||||
|
2025 |
2025 |
2024 |
|||||||||
|
Nonaccrual loans |
$ 250,818 |
$ 284,019 |
$ 279,716 |
||||||||
|
90 days past due and still accruing |
714 |
585 |
6 |
||||||||
|
Total nonperforming loans |
$ 251,532 |
$ 284,604 |
$ 279,722 |
||||||||
|
Other real estate owned |
$ 7,049 |
$ 7,049 |
$ 8,209 |
||||||||
|
Total nonperforming assets |
$ 258,581 |
$ 291,653 |
$ 287,931 |
||||||||
|
Nonperforming loans to total loans receivable |
2.39 % |
2.73 % |
2.68 % |
||||||||
|
Nonperforming assets to total assets |
1.35 % |
1.55 % |
1.53 % |
||||||||
|
Delinquent Loans |
|||||||||||
|
June 30, |
March 31, |
December 31, |
|||||||||
|
2025 |
2025 |
2024 |
|||||||||
|
Delinquent loans: |
|||||||||||
|
Loans receivable |
$ 279,009 |
$ 304,560 |
$ 292,263 |
||||||||
|
Loans held for sale |
– |
30,103 |
32,343 |
||||||||
|
Total delinquent loans |
$ 279,009 |
$ 334,663 |
$ 324,606 |
||||||||
|
Total loans receivable and loans held for sale |
$ 14,629,693 |
$ 14,410,589 |
$ 14,209,898 |
||||||||
|
Delinquent loans to total loans |
1.91 % |
2.32 % |
2.28 % |
||||||||
|
Supplemental Results |
||||||||||
|
(Unaudited) |
||||||||||
|
($ in thousands) |
||||||||||
|
Deposits |
||||||||||
|
June 30, |
March 31, |
December 31, |
||||||||
|
2025 |
2025 |
2024 |
||||||||
|
Noninterest-bearing deposits |
||||||||||
|
Core demand deposits |
$ 315,523 |
$ 313,296 |
$ 239,005 |
|||||||
|
Interest-bearing deposits |
||||||||||
|
Demand deposits: |
||||||||||
|
Core demand deposits |
$ 6,066,933 |
$ 5,432,133 |
$ 4,319,512 |
|||||||
|
Brokered demand deposits |
250,000 |
– |
– |
|||||||
|
Total interest-bearing demand deposits |
6,316,933 |
5,432,133 |
4,319,512 |
|||||||
|
Savings deposits: |
||||||||||
|
Core savings deposits |
3,703,270 |
3,618,210 |
3,442,111 |
|||||||
|
Brokered savings deposits |
358 |
353 |
859 |
|||||||
|
Total savings deposits |
3,703,628 |
3,618,563 |
3,442,970 |
|||||||
|
Certificates of deposit: |
||||||||||
|
Core certificates of deposits |
1,346,630 |
1,324,126 |
1,385,270 |
|||||||
|
Brokered certificates of deposits |
1,004,121 |
1,718,047 |
2,533,219 |
|||||||
|
Total certificates of deposits |
2,350,751 |
3,042,173 |
3,918,489 |
|||||||
|
Total interest-bearing deposits |
12,371,312 |
12,092,869 |
11,680,971 |
|||||||
|
Total deposits |
$ 12,686,835 |
$ 12,406,165 |
$ 11,919,976 |
|||||||
|
Total core deposits |
$ 11,432,356 |
$ 10,687,765 |
$ 9,385,898 |
|||||||
|
Total brokered deposits |
$ 1,254,479 |
$ 1,718,400 |
$ 2,534,078 |
|||||||
|
Total deposits |
$ 12,686,835 |
$ 12,406,165 |
$ 11,919,976 |
|||||||
SOURCE Merchants Bancorp
