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News

Merchants Bancorp Reports Full Year and Fourth Quarter 2021 Results

gbafNews28

CARMEL, Ind., Jan. 31, 2022 /PRNewswire/ — Merchants Bancorp (the “Company” or “Merchants”) (Nasdaq: MBIN), parent company of Merchants Bank of Indiana, today reported fourth quarter 2021 net income of $55.2 million, or diluted earnings per common share of $1.71 (or $1.14 after adjusting for its 3:2 stock split in January 2022).  This compared to $59.8 million, or diluted earnings per common share of $1.95 ($1.30 split adjusted) in the fourth quarter of 2020, and compared to $58.5 million, or diluted earnings per common share of $1.83 ($1.22 split adjusted) in the third quarter of 2021.

“Execution and growth were the hallmarks of our performance during 2021.  With record earnings and asset levels in a low interest rate environment, we have continued to demonstrate the strength of our business model that has focused on conservative underwriting, cost efficiency, and holding short-duration assets by originating loans to be sold in the secondary market,” said Michael F. Petrie, Chairman and CEO of Merchants.  

Michael J. Dunlap, President and Chief Operating Officer of Merchants, added, “The entrepreneurial evolution of our businesses over the last year has resulted in Merchants becoming known as a one-stop-shop for borrowers with a broad array of product offerings that includes everything from multi-family, bridge, residential, SBA, agriculture, and mortgage warehouse financing, to traditional community banking and syndicated low-income housing tax credit and debt funds.  We have expanded our platform of offerings across all our businesses and see many opportunities for future growth.”

Net income for the fourth quarter 2021 decreased by $4.6 million, or 8%, compared to the fourth quarter of 2020, primarily driven by a $10.2 million, or 37%, increase in noninterest expense that reflected a 53% increase in salaries and employee benefits, including commissions.  Also contributing to the lower net income was a $2.5 million, or 6%, decrease in noninterest income that reflected lower mortgage warehouse fees due to lower single family loan volume.  Partially offsetting these items was a $5.0 million, or 8%, increase in net interest income after provision for loan losses, and a $3.0 million lower tax provision.

Net income for the fourth quarter 2021 decreased by $3.3 million, or 6%, compared to the third quarter of 2021, primarily driven by an $8.2 million, or 28%, increase in noninterest expense that reflected a 26% increase in salaries and employee benefits, including commissions.  Also contributing to the lower net income was a $3.9 million, or 74%, decrease in loan servicing fees.  Partially offsetting these items was a $4.6 million, or 143%, increase in other income from low-income housing tax syndication fees, a $2.4 million increase in net interest income after provision for loan losses, and a $2.5 million lower tax provision.

Total Assets
Total assets of $11.3 billion at December 31, 2021 increased $326.6 million, or 3%, compared to September 30, 2021, and increased $1.6 billion, or 17%, compared to December 31, 2020.

Return on average assets was 2.02% for the fourth quarter of 2021 compared to 2.57% for the fourth quarter of 2020 and 2.29% for the third quarter of 2021. 

Asset Quality
The allowance for loan losses of $31.3 million at December 31, 2021 increased $2.2 million compared to September 30, 2021 and increased $3.8 million compared to December 31, 2020.  The increases compared to December 31, 2020 were primarily based on growth in the multi-family loan portfolio.  The portion of the allowance associated with the COVID-19 pandemic has remained relatively steady since September 30, 2020, at approximately $0.8 million.   As of December 31, 2021, the Company had only one loan remaining in a payment deferral arrangement, with an unpaid balance of $36.8 million.

Non-performing loans were $0.8 million, or 0.01%, of loans receivable at December 31, 2021, compared to $2.9 million, or 0.05% of loans receivable at September 30, 2021, and compared to $6.3 million, or 0.11% of loans receivable at December 31, 2020. 

Total Deposits
Total deposits of $9.0 billion at December 31, 2021 increased $35.3 million compared to September 30, 2021, and increased $1.6 billion, or 21%, compared to December 31, 2020. The increase compared to December 31, 2020 was primarily due to growth in savings accounts and brokered certificates of deposits.

Total brokered deposits of $2.2 billion at December 31, 2021 increased $493.3 million, or 30%, from September 30, 2021 and increased $986.1 million, or 84%, from December 31, 2020.   Brokered deposits represented 24% of total deposits at December 31, 2021 compared to 19% of total deposits at September 30, 2021 and 16% of total deposits at December 31, 2020.  The increases reflected a continuation of the Company's shift from borrowing at the Federal Home Loan Bank of Indianapolis after a change in their collateral policy to eliminate certain agency eligible mortgage loan participations during the third quarter of 2021.

Liquidity
Cash balances of $1.0 billion at December 31, 2021 increased by $230.0 million compared to September 30, 2021 and increased by $852.9 million compared to December 31, 2020.  The Company also continues to have significant borrowing capacity, with unused lines of credit at $2.4 billion at December 31, 2021 compared to $2.1 billion at September 30, 2021 and $2.6 billion at December 31, 2020.  This liquidity enhances the ability to effectively manage interest expense and asset levels in the future.

Net Interest Income
Net interest income of $72.7 million in the fourth quarter of 2021 increased $3.5 million, or 5%, compared to the fourth quarter of 2020 and increased $3.9 million, or 6%, compared to the third quarter of 2021. 

The 5% increase in net interest income compared to the fourth quarter of 2020 reflected a 6% increase in interest income from higher loan balances that was partially offset by a 20% increase in the cost of deposits. The interest rate spread of 2.62% for the fourth quarter of 2021 decreased 33 basis points compared to 2.95% in the fourth quarter of 2020. The net interest margin of 2.70% for the fourth quarter of 2021 decreased 31 basis points compared to 3.01% for the fourth quarter of 2020. The decrease in net interest margin compared to the fourth quarter of 2020 reflected higher loan balances that were outpaced by lower interest rates on loans.

The 6% increase in net interest income compared to the third quarter of 2021 reflected higher loan balances and a modest increase in average loan yields.  The interest rate spread of 2.62% for the fourth quarter of 2021 decreased 5 basis points compared to 2.67% in the third quarter of 2021.  The net interest margin of 2.70% for the fourth quarter of 2021 also decreased 3 basis points compared to 2.73% for the third quarter of 2021. 

Interest Income
Interest income of $82.6 million in the fourth quarter of 2021 increased $4.7 million, or 6%, compared to the fourth quarter of 2020 and increased $5.3 million, or 7%, compared to the third quarter of 2021. 

The 6% increase in interest income compared to the fourth quarter of 2020 was primarily due to significant loan growth that was partially offset by lower rates.  The higher interest income reflected a $923.3 million, or 11%, increase in the average balance of loans, including loans held for sale, which reached $9.1 billion for the fourth quarter of 2021. The average yield on loans and loans held for sale of 3.37% for the fourth quarter of 2021 decreased 27 basis points compared to 3.64% for the fourth quarter of 2020.

The 7% increase in interest income compared to the third quarter of 2021 reflected a $375.7 million, or 4%, increase in the average balance of loans, including loans held for sale, which reached $9.1 billion for the fourth quarter of 2021. The average yield on loans and loans held for sale of 3.37% for the fourth quarter of 2021 increased 4 basis points compared to 3.33% for the third quarter of 2021. 

Interest Expense
Total interest expense increased $1.2 million, or 13%, to $9.8 million for the fourth quarter of 2021 compared to the fourth quarter of 2020 and increased $1.4 million, or 17%, compared to the third quarter of 2021. Interest expense on deposits of $8.5 million for the fourth quarter of 2021 increased $1.4 million, or 20%, compared to the fourth quarter of 2020 and increased $1.5 million, or 22%, compared to the third quarter of 2021.

The 20% increase in interest expense on deposits compared to the fourth quarter of 2020 was primarily due to increases in average balances of money market accounts and certificates of deposits, which was partially offset by lower rates.  The average balance of interest-bearing deposits of $8.3 billion for the fourth quarter of 2021 increased $1.5 billion, or 21%, compared to the fourth quarter of 2020. The average yield of interest-bearing deposits was 0.41% for the fourth quarter of 2021, which was the same as the fourth quarter of 2020. 

The 22% increase in interest expense on deposits compared to the third quarter of 2021 was primarily due to higher balances of certificates of deposit and money market accounts, that were partially offset by lower rates on certificates of deposit.  The average balance of interest-bearing deposits of $8.3 billion for the fourth quarter of 2021 increased $481.7 million, or 6%, compared to the third quarter of 2021. The average yield of interest-bearing deposits was 0.41% for the fourth quarter of 2021, which was a 6 basis point increase compared to 0.35% in the third quarter of 2021. 

Noninterest Income
Noninterest income of $40.3 million for the fourth quarter of 2021 decreased $2.5 million, or 6%, compared to the fourth quarter of 2020 and was consistent with the third quarter of 2021.

The 6% decrease in noninterest income compared to the fourth quarter of 2020 was primarily due to a $3.5 million decrease in mortgage warehouse fees. Included in loan servicing fees for the fourth quarter of 2021 was a $1.9 million positive fair market value adjustment to servicing rights, which compared to a $2.1 million positive fair market value adjustment for the fourth quarter of 2020.

Noninterest income was consistent with the third quarter of 2021 but included a $4.6 million increase in other income from low-income housing tax credit syndication fees that was mostly offset by a $3.9 million decrease in loan servicing fees.  Included in loan servicing fees for the fourth quarter of 2021 was a $1.9 million positive fair market value adjustment to servicing rights, which compared to a $3.0 million positive fair market value adjustment for the third quarter of 2021.

At December 31, 2021, servicing rights were valued at $110.3 million, an increase of 34% compared to December 31, 2020 and an increase of 5% compared to September 30, 2021.  These increases were driven by higher loan balances of serviced assets and higher interest rates that impacted fair market value adjustments in the fourth quarter of 2021.  The value of servicing rights generally increases in rising interest rate environments and declines in falling interest rate environments.

Noninterest Expense
Noninterest expense of $37.6 million for the fourth quarter of 2021 increased $10.2 million, or 37%, compared to the fourth quarter of 2020 and increased $8.2 million, or 28%, compared to the third quarter of 2021. 

The 37% increase in noninterest expense compared to the fourth quarter of 2020 was due primarily to a $8.8 million, or 53%, increase in salaries and employee benefits, including commissions, to support higher loan production volumes.    The efficiency ratio of 33.3% for the fourth quarter of 2021 compared to 24.5% for the fourth quarter of 2020.

The 28% increase in noninterest expense compared to the third quarter of 2021 was primarily due to a $5.2 million, or 26%, increase in salaries and employee benefits that reflected higher commissions from higher loan volumes.  The efficiency ratio of 33.3% for the fourth quarter of 2021 compared to 27.0% for the third quarter of 2021.

Segments

Multi-family Mortgage Banking 
For the fourth quarter of 2021, net income of $14.1 million for Multi-family Mortgage Banking decreased 1% compared with the fourth quarter of 2020, primarily due to higher noninterest income from gain on sale of loans that was offset by higher noninterest expense from salaries and employee benefits, including commissions. Noninterest income reflected a positive fair market value adjustment of $1.0 million on servicing rights in the fourth quarter of 2021 compared to a positive fair market value adjustment of $2.7 million in the fourth quarter of 2020. 

Compared to the third quarter of 2021, net income for this segment decreased 2%, reflecting higher gain on sale of loans and other income from low-income housing tax credit syndication fees that were offset by higher noninterest expense from salaries and employee benefits, including commissions.  Included in loan servicing fees was a positive fair market value adjustment of $1.0 million on servicing rights in the fourth quarter of 2021 compared to a positive fair market value adjustment of $0.7 million in the third quarter of 2021.

Banking 
For the fourth quarter of 2021, net income of $22.6 million for Banking increased 38% from the fourth quarter of 2020, reflecting higher net interest income and lower salaries and employee benefits that were partially offset by lower noninterest income from gains on sale of loans. Included in noninterest income for the fourth quarter of 2021 was a $0.9 million positive fair market value adjustment to servicing rights, which compared to a $0.5 million negative fair market value adjustment for the fourth quarter of 2020. 

Net income for this segment decreased 4% from the third quarter of 2021 primarily due to lower noninterest income from gain on sale of loans that offset higher net interest income and lower salaries and employee benefits.  Included in loan servicing fees for the fourth quarter of 2021 was a $0.9 million positive fair market value adjustment to servicing rights, which compared to a $2.3 million positive fair market value adjustment for the third quarter of 2021.

Mortgage Warehousing 
For the fourth quarter of 2021, net income of $21.3 million for Mortgage Warehousing decreased 34% compared to the fourth quarter of 2020 and decreased 8% compared to the third quarter of 2021.  The decreases compared to the prior periods reflected lower net interest income and mortgage warehouse fees as industry volumes declined. 

About Merchants Bancorp
Merchants Bancorp is a diversified bank holding company headquartered in Carmel, Indiana operating multiple lines of business, including Federal Housing Administration (“FHA”) multi-family housing and healthcare facility financing and servicing; mortgage warehouse financing; retail and correspondent residential mortgage banking; agricultural lending; and traditional community banking.  Merchants Bancorp, with $11.3 billion in assets and $9.0 billion in deposits as of December 31, 2021, conducts its business primarily through its direct and indirect subsidiaries, Merchants Bank of Indiana, Merchants Capital Corp., Farmers-Merchants Bank of Illinois, Merchants Capital Servicing, LLC, and Merchants Mortgage, a division of Merchants Bank of Indiana. For more information and financial data, please visit Merchants' Investor Relations page at investors.merchantsbancorp.com.

Forward-Looking Statements 
This press release 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, such as the potential impacts of the COVID-19 pandemic. 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 the COVID-19 pandemic, such as the severity, magnitude, duration and businesses' and governments' responses thereto, on the Company's operations and personnel, and on activity and demand across its businesses, and other 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 we do 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)

December 31,

September 30,

June 30, 

March 31, 

December 31,

2021

2021

2021

2021

2020

Assets

Cash and due from banks

$             14,030

$             14,352

$             13,745

$             12,003

$             10,063

Interest-earning demand accounts

1,018,584

788,224

388,304

257,436

169,665

Cash and cash equivalents

1,032,614

802,576

402,049

269,439

179,728

Securities purchased under agreements to resell

5,888

5,923

6,507

6,544

6,580

Mortgage loans in process of securitization

569,239

634,027

461,914

432,063

338,733

Available for sale securities

310,629

301,119

315,260

241,691

269,802

Federal Home Loan Bank (FHLB) stock

29,588

70,767

70,767

70,656

70,656

Loans held for sale (includes $48,583, $26,296, $26,623,
$57,998 and $40,044, respectively, at fair value)

3,303,199

3,453,279

2,955,390

2,749,662

3,070,154

Loans receivable, net of allowance for loan losses of $31,344,
$29,134, $28,696, $29,091 and $27,500, respectively

5,751,319

5,431,227

5,444,227

5,710,291

5,507,926

Premises and equipment, net

31,212

31,423

31,384

31,261

29,761

Servicing rights

110,348

105,473

98,331

96,215

82,604

Interest receivable

24,103

21,894

22,068

22,111

21,770

Goodwill 

15,845

15,845

15,845

15,845

15,845

Intangible assets, net

1,707

1,843

1,990

2,136

2,283

Other assets and receivables

92,947

76,637

55,800

57,346

49,533

Total assets

$     11,278,638

$     10,952,033

$        9,881,532

$        9,705,260

$        9,645,375

Liabilities and Shareholders' Equity

  Liabilities

Deposits

Noninterest-bearing

$           641,442

$           824,118

$           814,567

$           818,621

$           853,648

Interest-bearing

8,341,171

8,123,201

7,225,011

7,244,560

6,554,418

Total deposits

8,982,613

8,947,319

8,039,578

8,063,181

7,408,066

Borrowings 

1,033,954

809,136

701,373

545,160

1,348,256

Deferred and current tax liabilities, net

19,170

21,681

18,819

41,610

20,405

Other liabilities

87,492

64,019

62,698

44,054

58,027

Total liabilities

10,123,229

9,842,155

8,822,468

8,694,005

8,834,754

Commitments and  Contingencies

Shareholders' Equity

Common stock, without par value

Authorized – 50,000,000 shares

Issued and outstanding prior to 2022 stock split – 28,786,719
shares, 28,785,374 shares, 28,783,599 shares, 28,782,139
shares, and 28,747,083 shares, respectively (as recast after
2022 stock split – 43,180,079 shares, 43,178,061 shares,
43,175,399 shares, 43,173,209 shares and 43,120,625 shares)

137,565

137,200

136,836

136,474

135,857

Preferred stock, without par value – 5,000,000 total shares authorized

8% Preferred stock – $1,000 per share liquidation preference

Authorized – 50,000 shares

Issued and outstanding – 0 shares, 0 shares, 0 shares, 41,625 shares and 41,625 shares.

41,581

41,581

7% Series A Preferred stock – $25 per share liquidation preference

Authorized – 3,500,000 shares

Issued and outstanding – 2,081,800 shares

50,221

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 – 250,000 shares

Issued and outstanding – 196,181 shares, 196,181 shares,
196,181 shares, 150,000 shares, and 0 shares, respectively
(equivalent to 7,847,233 depositary shares, 7,847,233
depositary shares, 7,847,233 depositary shares, 6,000,000
depositary shares, and 0 depositary shares)

191,084

191,084

191,084

144,925

Retained earnings

657,149

610,267

560,083

516,961

461,744

Accumulated other comprehensive income

(1,454)

262

(4)

249

374

Total shareholders' equity

1,155,409

1,109,878

1,059,064

1,011,255

810,621

Total liabilities and shareholders' equity

$     11,278,638

$     10,952,033

$        9,881,532

$        9,705,260

$        9,645,375

 

 

Consolidated Statement of Income

(Unaudited)

(In thousands, except share data)

Three Months Ended

Twelve Months Ended

December 31,

September 30,

December 31,

December 31,

December 31,

2021

2021

2020

2021

2020

Interest Income

Loans

$

77,113

$

72,924

$

74,515

$

293,830

$

263,915

Mortgage loans in process of securitization

4,018

2,868

2,542

12,746

11,122

Investment securities:

Available for sale – taxable

1,007

1,115

422

3,309

3,147

Available for sale – tax exempt

9

12

11

41

123

Federal Home Loan Bank stock

177

190

341

1,143

1,558

Other

261

205

80

817

2,925

Total interest income

82,585

77,314

77,911

311,886

282,790

Interest Expense

Deposits

8,492

6,981

7,106

28,256

52,238

Borrowed funds

1,350

1,452

1,568

5,636

6,406

Total interest expense

9,842

8,433

8,674

33,892

58,644

Net Interest Income

72,743

68,881

69,237

277,994

224,146

Provision for loan losses

2,585

1,079

4,114

5,012

11,838

Net Interest Income After Provision for Loan Losses

70,158

67,802

65,123

272,982

212,308

Noninterest Income

Gain on sale of loans

28,430

29,013

28,830

111,185

96,578

Loan servicing fees, net

1,382

5,313

3,069

16,373

(1,801)

Mortgage warehouse fees

2,469

2,732

5,926

12,396

20,980

Gains on sale of investments available for sale (1)

191

191

441

Other income

7,799

3,213

4,901

17,188

11,275

Total noninterest income

40,271

40,271

42,726

157,333

127,473

Noninterest Expense

Salaries and employee benefits

25,387

20,197

16,565

85,727

59,200

Loan expenses

1,479

1,734

2,938

7,657

9,085

Occupancy and equipment

2,069

1,861

1,438

7,365

5,733

Professional fees

3,325

901

1,657

5,427

3,664

Deposit insurance expense

705

664

759

2,691

5,800

Technology expense

1,123

1,169

832

4,200

3,061

Other expense

3,558

2,946

3,276

12,318

9,881

Total noninterest expense

37,646

29,472

27,465

125,385

96,424

Income Before Income Taxes

72,783

78,601

80,384

304,930

243,357

Provision for income taxes (2)

17,582

20,098

20,598

77,826

62,824

Net Income

$

55,201

$

58,503

$

59,786

$

227,104

$

180,533

   Dividends on preferred stock

(5,728)

(5,729)

(3,618)

(20,873)

(14,473)

Net Income Allocated to Common Shareholders

$

49,473

$

52,774

$

56,168

$

206,231

$

166,060

As reported prior to 2022 stock split:

   Weighted-average diluted shares

28,932,709

28,876,503

28,812,009

28,883,535

28,778,075

   Diluted earnings per common share

$

1.71

$

1.83

$

1.95

$

7.14

$

5.77

As recast after 2022 stock split:

   Weighted-average diluted shares

43,399,064

43,314,755

43,218,014

43,325,303

43,167,113

   Diluted earnings per common share

$

1.14

$

1.22

$

1.30

$

4.76

$

3.85

(1)Includes $191, $0, $0, $191, and $441, respectively, related to accumulated other comprehensive earnings reclassifications.

(2) Includes $(46), $0, $0, $(46) and $(97), respectively, related to income tax (expense)/benefit for reclassification items.

 

 

Key Operating Results

(Unaudited)

($ in thousands, except share data)

Three Months Ended

Twelve Months Ended

December 31,

September 30,

December 31,

December 31,

December 31,

2021

2021

2020

2021

2020

Noninterest expense

$          37,646

$         29,472

$          27,465

$        125,385

$          96,424

Net interest income (before provision for losses)

72,743

68,881

69,237

277,994

224,146

Noninterest income

40,271

40,271

42,726

157,333

127,473

Total income

$        113,014

$       109,152

$        111,963

$        435,327

$        351,619

Efficiency ratio

33.31%

27.00%

24.53%

28.80%

27.42%

Average assets

$  10,945,026

$ 10,236,491

$    9,317,570

$  10,188,953

$    8,509,847

Net income

$         55,201

$         58,503

$          59,786

$        227,104

$        180,533

Return on average assets before annualizing

0.50%

0.57%

0.64%

2.23%

2.12%

Annualization factor

4.00

4.00

4.00

1.00

1.00

Return on average assets

2.02%

2.29%

2.57%

2.23%

2.12%

Return on average tangible common shareholders' equity (1)

26.04%

29.83%

40.64%

30.10%

34.02%

Tangible book value per common share as reported prior to 2022 stock split (1)

$            26.95

$           25.36

$            20.17

$            26.95

$            20.17

Tangible book value per common share as recast after 2022 stock split (1)

$            17.96

$           16.91

$            13.45

$            17.96

$            13.45

Tangible common shareholders' equity/tangible assets (1)

6.89%

6.68%

6.02%

6.89%

6.02%

(1) Non-GAAP financial measure – see “Reconciliation of Non-GAAP Measures” 

(1) Reconciliation of Non-GAAP Financial Measures

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.     

Three Months Ended

Twelve Months Ended

December 31,

September 30,

December 31,

December 31,

December 31,

2021

2021

2020

2021

2020

Net income

$          55,201

$         58,503

$          59,786

$        227,104

$        180,533

Less: preferred stock dividends  

(5,728)

(5,729)

(3,618)

(20,873)

(14,473)

Net income available to common shareholders

$          49,473

$         52,774

$          56,168

$        206,231

$        166,060

Average shareholders' equity

$     1,139,714

$    1,087,675

$        783,837

$    1,028,834

$        719,630

Less: average goodwill & intangibles

(17,626)

(17,770)

(18,334)

(17,841)

(18,899)

Less: average preferred stock

(362,149)

(362,149)

(212,646)

(325,904)

(212,646)

Tangible common shareholders' equity

$        759,939

$       707,756

$        552,857

$        685,089

$        488,085

Annualization factor

4.00

4.00

4.00

1.00

1.00

Return on average tangible common shareholders' equity

26.04%

29.83%

40.64%

30.10%

34.02%

Total equity

$    1,155,409

$    1,109,878

$        810,621

$    1,155,409

$        810,621

Less: goodwill and intangibles

(17,552)

(17,688)

(18,128)

(17,552)

(18,128)

Less: preferred stock

(362,149)

(362,149)

(212,646)

(362,149)

(212,646)

Tangible common shareholders' equity

$        775,708

$       730,041

$        579,847

$        775,708

$        579,847

Assets

$  11,278,638

$ 10,952,033

$    9,645,375

$  11,278,638

$    9,645,375

Less: goodwill and intangibles

(17,552)

(17,688)

(18,128)

(17,552)

(18,128)

Tangible assets

$  11,261,086

$ 10,934,345

$    9,627,247

$  11,261,086

$    9,627,247

Ending common shares as reported prior to 2022 stock split

28,786,719

28,785,374

28,747,083

28,786,719

28,747,083

Ending common shares as recast after 2022 stock split

43,180,079

43,178,061

43,120,625

43,180,079

43,120,625

Tangible book value per common share as reported prior to 2022 stock split

$            26.95

$           25.36

$            20.17

$            26.95

$            20.17

Tangible book value per common share as recast after 2022 stock split

$            17.96

$           16.91

$            13.45

$            17.96

$            13.45

Tangible common shareholders' equity/tangible assets

6.89%

6.68%

6.02%

6.89%

6.02%

 

 

Merchants Bancorp

Average Balance Analysis

($ in thousands)

(Unaudited)

Three Months Ended

Three Months Ended

Three Months Ended

December 31, 2021

September 30, 2021

December 31, 2020

Average

Yield/

Average

Yield/

Average

Yield/

Balance

Interest

Rate 

Balance

Interest

Rate 

Balance

Interest

Rate 

Assets:

Interest-bearing deposits, and other

$      698,263

$      438

0.25%

$      580,397

$       395

0.27%

$        328,635

$       421

0.51%

Securities available for sale – taxable

308,581

1,007

1.29%

308,476

1,115

1.43%

276,358

422

0.61%

Securities available for sale – tax exempt

1,204

9

2.97%

1,361

12

3.50%

1,368

11

3.20%

Mortgage loans in process of securitization

621,946

4,018

2.56%

437,601

2,868

2.60%

397,237

2,542

2.55%

Loans and loans held for sale

9,064,880

77,113

3.37%

8,689,144

72,924

3.33%

8,141,559

74,515

3.64%

     Total interest-earning assets

10,694,874

82,585

3.06%

10,016,979

77,314

3.06%

9,145,157

77,911

3.39%

Allowance for loan losses

(29,801)

(28,679)

(24,684)

Noninterest-earning assets

279,953

248,191

197,097

Total assets

$  10,945,026

$ 10,236,491

$     9,317,570

Liabilities & Shareholders' Equity:

Interest-bearing checking

4,325,991

2,094

0.19%

4,754,633

1,561

0.13%

4,301,607

1,256

0.12%

Savings deposits

223,912

35

0.06%

211,494

39

0.07%

185,515

41

0.09%

Money market 

2,528,453

5,018

0.79%

2,259,786

4,394

0.77%

1,734,321

4,312

0.99%

Certificates of deposit

1,220,392

1,345

0.44%

591,093

987

0.66%

616,493

1,497

0.97%

    Total interest-bearing deposits

8,298,748

8,492

0.41%

7,817,006

6,981

0.35%

6,837,936

7,106

0.41%

Borrowings

620,173

1,350

0.86%

677,201

1,452

0.85%

990,707

1,568

0.63%

    Total interest-bearing liabilities

8,918,921

9,842

0.44%

8,494,207

8,433

0.39%

7,828,643

8,674

0.44%

Noninterest-bearing deposits

795,704

586,981

634,231

Noninterest-bearing liabilities

90,687

67,628

70,859

    Total liabilities

9,805,312

9,148,816

8,533,733

    Shareholders' equity

1,139,714

1,087,675

783,837

Total liabilities and shareholders' equity

$  10,945,026

$ 10,236,491

$     9,317,570

Net interest income

$ 72,743

$  68,881

$  69,237

Net interest spread

2.62%

2.67%

2.95%

Net interest-earning assets

$   1,775,953

$   1,522,772

$     1,316,514

Net interest margin

2.70%

2.73%

3.01%

Average interest-earning assets to average interest-bearing liabilities

119.91%

117.93%

116.82%

 

 

Supplemental Results

(Unaudited)

($ in thousands)

Net Income

Net Income

Three Months Ended

Twelve Months Ended

December 31,

September 30,

December 31,

December 31,

2021

2021

2020

2021

2020

Segment

Multi-family Mortgage Banking

$           14,124

$         14,448

$            14,231

$        51,504

$        29,172

Mortgage Warehousing

21,311

23,217

32,387

95,159

106,329

Banking

22,629

23,463

16,389

90,858

53,637

Other

(2,863)

(2,625)

(3,221)

(10,417)

(8,605)

Total

$           55,201

$         58,503

$            59,786

$     227,104

$     180,533

Total Assets

December 31,

September 30,

December 31,

2021

2021

2020

Segment

Multi-family Mortgage Banking

$         296,129

$       280,927

$          210,714

Mortgage Warehousing

3,977,537

4,685,037

4,893,513

Banking

6,929,565

5,950,316

4,498,880

Other

75,407

35,753

42,268

Total

$    11,278,638

$ 10,952,033

$      9,645,375

Gain on Sale of Loans

Gain on Sale of Loans

Three Months Ended

Twelve Months Ended

December 31,

September 30,

December 31,

December 31,

2021

2021

2020

2021

2020

Loan Type

Multi-family

$           24,797

$         24,309

$            17,070

$        93,350

$        57,633

Single-family

1,086

1,592

10,902

8,763

37,127

Small Business Association (SBA)

2,547

3,112

858

9,072

1,818

Total

$           28,430

$         29,013

$            28,830

$     111,185

$        96,578

Loans Receivable and Loans Held for Sale

December 31,

September 30,

December 31,

2021

2021

2020

Mortgage warehouse lines of credit

$         781,437

$       891,605

$      1,605,745

Residential real estate

843,101

828,950

678,848

Multi-family and healthcare financing

3,528,199

3,244,442

2,749,020

Commercial and commercial real estate

520,199

391,562

387,294

Agricultural production and real estate

97,060

92,113

101,268

Consumer and margin loans

12,667

11,689

13,251

5,782,663

5,460,361

5,535,426

    Less: Allowance for loan losses

31,344

29,134

27,500

Loans receivable

$      5,751,319

$    5,431,227

$      5,507,926

Loans held for sale

3,303,199

3,453,279

3,070,154

Total loans, net of allowance

$      9,054,518

$    8,884,506

$      8,578,080

 

Cision View original content to download multimedia:https://www.prnewswire.com/news-releases/merchants-bancorp-reports-full-year-and-fourth-quarter-2021-results-301471840.html

SOURCE Merchants Bancorp

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