Financial Highlights

Merchants Bancorp had strong financial performance in the first quarter of 2024, with increases in net income, earnings per share, tangible book value per share, total assets, and loans compared to the prior year period.

• Net income increased 58% to $87.1 million
• Earnings per share increased 68% to $1.80
• Tangible book value per share increased 28% to $29.26
• Total assets increased 25% to $17.8 billion
• Loans increased 25% to $10.7 billion

The company has significant liquidity, with $10.9 billion in cash, liquid assets, and unused borrowing capacity. This provides flexibility to manage funding needs.

Revenue Growth

Total revenue, comprised of net interest income and noninterest income, increased 36% compared to the first quarter of 2023.

• Net interest income increased 26% to $127.1 million, driven by loan growth and higher interest rates.
• Noninterest income increased 187% to $40.9 million, primarily due to higher servicing fees and syndication fees.

Profitability

Profits grew substantially from the prior year period.

• Return on average assets was 2.08% compared to 1.71%
• Return on average equity was 19.94% compared to 14.75%

The efficiency ratio improved to 29.1% from 30.3%.

Loan Portfolios

Loans held for investment grew across key portfolios:

• Warehouse lending increased 52%
• Healthcare loans increased 5%
• Multi-family loans increased 2%

This demonstrates strong origination volume and asset growth.

Credit Quality

Asset quality metrics remain strong.

• Nonperforming loans were 1.22% of total loans, up from 0.80%
• Net charge-offs remained low at 0.03% of average loans

The allowance for loan losses increased to 0.70% of total loans, providing coverage for potential future losses.

Capital Levels

Capital levels remained strong with ratios well above regulatory minimums.

• Total risk-based capital ratio was 11.7%
• Tier 1 capital ratio was 11.2%
• Common equity Tier 1 ratio was 8.0%

This capital provides a buffer to support growth.

Segment Analysis

All three business segments generated double digit returns and grew net income over 20% compared to the prior year period.

Segment	Net Income	Return on Equity
Multi-Family	$16.6 million	45%
Warehouse	$20.2 million	41%
Banking	$56.4 million	13%

This demonstrates the success of the diversified business model.

Outlook

With strong profitability, liquidity and capital, Merchants Bancorp is well-positioned for continued growth and success in 2024. The diversified business lines provide multiple channels for generating assets, revenue and shareholder returns.