Financial Highlights for the Three Months Ended March 31, 2025

Merchants Bancorp

Overview

Merchants Bancorp is a diversified bank holding company headquartered in Carmel, Indiana. The company operates in multiple business segments, including Multi-family Mortgage Banking, Mortgage Warehousing, and Banking.

Key Financial Highlights

• Net income decreased $28.8 million (33%) to $58.2 million compared to the same period in 2024.
• Diluted earnings per share decreased 48% to $0.93.
• The decrease in net income was primarily driven by a $17.2 million (42%) decrease in noninterest income, a $12.8 million (26%) increase in noninterest expense, a $4.9 million (4%) decrease in net interest income, and a $3.0 million (63%) increase in provision for credit losses.
• Tangible book value per common share increased 19% to $34.90.
• The company had $4.7 billion in unused borrowing capacity as of March 31, 2025.
• Total assets were $18.8 billion, up 5% from March 31, 2024.
• Loans receivable decreased 3% to $10.3 billion, while core deposits increased 30% to $10.7 billion.
• Net interest margin decreased 25 basis points to 2.89%.
• The efficiency ratio increased to 42.27% from 29.13% in the prior year period.

Financial Condition

• Total assets of $18.8 billion were essentially unchanged from December 31, 2024.
• Loans receivable, net decreased $10.3 million to $10.3 billion.
• Deposits increased $486.2 million (4%) to $12.4 billion, with core deposits increasing $1.3 billion (14%) to $10.7 billion.
• Borrowings decreased $384.4 million (9%) to $4.0 billion.
• Tangible book value per common share increased to $34.90 from $29.26 a year earlier.

Asset Quality

• Nonperforming loans increased to 2.73% of total loans from 1.22% a year earlier.
• The allowance for credit losses on loans was 29% of nonperforming loans, down from 57% a year earlier.
• The company has executed credit protection arrangements on $2.2 billion in loans to reduce risk of losses.

Segment Performance

• Multi-family Mortgage Banking net income decreased 79% to $3.4 million.
• Mortgage Warehousing net income decreased 24% to $15.4 million.
• Banking net income decreased 17% to $47.1 million.

Liquidity and Capital

• The company had $4.7 billion in unused borrowing capacity as of March 31, 2025.
• Liquid assets and borrowing capacity totaled $11.0 billion, or 58% of total assets.
• The company redeemed all outstanding shares of its 6% Series B Preferred Stock for $125 million.
• The company issued $230 million of 7.625% Series E Preferred Stock.
• Capital ratios remained well above regulatory minimums, with the company’s common equity tier 1 ratio at 9.2%.

Overall, Merchants Bancorp experienced a decline in profitability in the first quarter of 2025 compared to the prior year, driven by lower noninterest income, higher expenses, and an increase in credit costs. The company continues to maintain a strong capital position and ample liquidity to support its diversified business model.