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Section 1: 8-K (8-K)

 

 

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

 


 

FORM 8-K

 


 

CURRENT REPORT

PURSUANT TO SECTION 13 OR 15(d) OF THE

SECURITIES EXCHANGE ACT OF 1934

 

Date of Report (Date of earliest event reported): January 30, 2019

 


 

Merchants Bancorp

(Exact Name of Registrant as Specified in its Charter)

 


 

Indiana

 

001-38258

 

20-5747400

(State or Other Jurisdiction
of Incorporation)

 

(Commission
File Number)

 

(IRS Employer
Identification No.)

 

11555 North Meridian Street, Suite 400

Carmel, Indiana 46032

(Address of Principal Executive Offices) (Zip Code)

 

(317) 569-7420

(Registrant’s Telephone Number, Including Area Code)

 

Not Applicable

(Former name or former address, if changed since last report)

 


 

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

 

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

 

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

 

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

 

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

 

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

 

Emerging growth company               x

 

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

 

 

 


 

Item 2.02. Results of Operations and Financial Condition.

 

On January 30, 2019, Merchants Bancorp issued a press release reporting its financial results for the 2018 fourth quarter and fiscal year. The press release is furnished as Exhibit 99.1 hereto and is incorporated herein by reference.

 

Item 9.01. Financial Statements and Exhibits.

 

(d) Exhibits.

 

Exhibit
No.

 

Description

 

 

 

99.1

 

Press Release dated January 30, 2019 issued by Merchants Bancorp

 

2


 

SIGNATURE

 

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

 

 

MERCHANTS BANCORP

 

 

 

 

Date: January 30, 2019

By:

/s/ John F. Macke

 

 

Name: John F. Macke

 

 

Title: Chief Financial Officer

 

3


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Section 2: EX-99.1 (EX-99.1)

Exhibit 99.1

 

 

PRESS RELEASE

 

Merchants Bancorp Reports Full Year and Fourth Quarter 2018 Results

 

For Release January 30, 2019

 

·                  Return on average assets of 1.71% and 1.61% for twelve and three months ended December 31, 2018, respectively

 

·                  Total assets of $3.9 billion increased $491.0 million, or 14%, compared with December 31, 2017

 

·                  Gross loans receivable of $2.1 billion increased 50% compared with December 31, 2017

 

·                  Pre-tax net income of $84.0 million increased 9% during the twelve months ended December 2018 and decreased 2%, to $21.1 million, in the fourth quarter of 2018 compared with the fourth quarter of 2017

 

·                  Closed on the acquisitions of Farmers-Merchants Bank of Paxton on October 1, 2018 and the assets of NattyMac, LLC on December 31, 2018.

 

CARMEL, Indiana — (PR Newswire) - Merchants Bancorp (the “Company” or “Merchants”) (Nasdaq: MBIN), parent company of Merchants Bank of Indiana, today reported fourth quarter 2018 net income of $15.4 million, or $0.51 per common share, compared with $20.3 million, or $0.73 per common share in the fourth quarter of 2017. The decrease in earnings per common share was primarily due to the additional common shares associated with the Company’s initial public offering in October of 2017, as well as the $6.9 million one-time benefit in the fourth quarter of 2017 associated with lower tax rates under federal income tax reform legislation.

 

The Company also reported net income of $62.9 million for the twelve months ended December 31, 2018, a 15% increase compared with $54.7 million in the comparable period of 2017.  Earnings per common share of $2.07 for the twelve months ended December 31, 2018 compared with $2.28 per common share in the comparable period of 2017.  The results for 2017 included a 6.2 million lower share count, and a $6.9 million one-time benefit associated with lower tax rates under federal income tax reform legislation.

 


 

“Our underlying results during the fourth quarter reflected strength in all business segments, with strong loan growth, high asset quality metrics across the board, and a demonstrated ability to effectively manage a rising interest rate environment. We delivered on our commitment to effectively utilize the capital raised from our IPO, by growing our loan portfolio by 50% over the last year.  We have also positioned ourselves to continue the trajectory of profitable growth into 2019,” said Michael Petrie, Chairman and CEO of Merchants. “I could not be prouder of all that our team accomplished during 2018 and in our first full year as a public company,” added Petrie.

 

Total Assets

 

Total assets increased $491.0 million, or 14%, to $3.9 billion at December 31, 2018, compared with $3.4 billion at December 31, 2017. The increase was due primarily to loan growth.  Return on average assets was 1.61% for the three months ended December 31, 2018, compared with 2.54% for the three months ended December 31, 2017.

 

Total loans receivable before allowance for loan losses increased $683.5 million, or 50%, to $2.1 billion at December 31, 2018, compared with $1.4 billion at December 31, 2017. This increase was primarily a result of growth in multi-family and healthcare financing, as well as mortgage warehouse lines of credit.

 

Asset Quality

 

The allowance for loan losses increased by $4.4 million, to $12.7 million, at December 31, 2018, compared with $8.3 million at December 31, 2017, reflecting growth in loans held for investment.  Non-performing loans were $3.6 million, or 0.18% of total loans at December 31, 2018, compared with $3.1 million, or 0.23% of total loans at December 31, 2017.

 

Total Deposits

 

Total deposits increased $287.5 million, or 10%, to $3.2 billion at December 31, 2018, compared with $2.9 billion at December 31, 2017. The increase was due primarily to growth in demand deposits and certificates of deposit during 2018.  Total short-term brokered deposits increased by 5%, to $988.2 million, or 31% of total deposits at December 31, 2018, compared with 32% at December 31, 2017.

 

Interest Income

 

Interest income increased $12.9 million, or 48%, to $39.8 million for the three months ended December 31, 2018, compared with $26.9 million for the three months ended December 31, 2017. This increase was due to both higher loan yields and loan growth.  The average yield on loans increased 59 basis points, to 4.93%, for the three months ended December 31, 2018, compared with

 


 

4.34% for the three months ended December 31, 2017.  The average balance of loans, including loans held for sale, during the three months ended December 31, 2018, increased by $622.2 million, or 29%, to $2.7 billion, compared with $2.1 billion for the three months ended December 31, 2017.

 

Interest Expense

 

Total interest expense increased $7.7 million, or 97%, to $15.7 million for the three months ended December 31, 2018, compared with the three months ended December 31, 2017. Interest expense on deposits increased $8.0 million, or 136%, to $13.8 million for the three months ended December 31, 2018, compared with the three months ended December 31, 2017. The increase in the cost of deposits was due primarily to the higher volume of interest-bearing checking and certificates of deposits, but also the overall increase in interest rates since last year. There was a 68 basis point increase in the average cost of interest-bearing deposits, to 1.81%, for the three months ended December 31, 2018, compared with 1.13% for the same period in 2017, and an increase in the average balance of interest-bearing deposits of $976.3 million, or 48%, to $3.0 billion for the three months ended December 31, 2018.

 

Net Interest Income

 

Net interest income increased $5.2 million, or 28%, to $24.2 million for the three months ended December 31, 2018 compared to the three months ended December 31, 2017.  The increase was primarily due to the growth in loans and loans held for sale and a 32 basis point increase in the interest rate spread, to 2.28%, for the three months ended December 31, 2018, from 1.96% for the three months ended December 31, 2017.  The net interest margin increased 17 basis points to 2.60% for the three months ended December 31, 2018, from 2.43% for the three months ended December 31, 2017.

 

Noninterest Income

 

Noninterest income decreased by $172,000, or 1%, to $14.7 million for the three months ended December 31, 2018, compared with the three months ended December 31, 2017. The decrease was primarily due to a $2.3 million decrease in loan servicing fees that reflected a positive fair market value adjustment in mortgage servicing rights of $436,000 in the fourth quarter of 2018 and $3.7 million in the fourth quarter of 2017. Gain on sale of loans increased $1.7 million, or 17%, primarily associated with higher multi-family loan sales in the secondary market.

 


 

Noninterest Expense

 

Noninterest expense increased $5.4 million, or 50%, to $16.2 million for the three months ended December 31, 2018, compared with $10.8 million for the three months ended December 31, 2017.  The increase was due primarily to a $3.6 million, or 51%, increase in salaries and employee benefits.  The increase in salaries and employee benefits was due primarily to an increase in the number of employees resulting from business growth and higher commissions related to higher multi-family volume.  The efficiency ratio grew to 41.6% in the fourth quarter of 2018, compared with 31.9% for the fourth quarter of 2017.

 

Income Taxes

 

Income tax expense increased $4.4 million, or 328%, to $5.7 million for the three months ended December 31, 2018, compared with the three months ended December 31, 2017.  The increase was due primarily to the one-time benefit of $6.9 million in the fourth quarter of 2017 from federal income tax reform legislation.  The effective tax rate was 27.0% for the three months ended December 31, 2018 compared with 6.1% for the three months ended December 31, 2017.

 

Segments

 

For the three months ended December 31, 2018, net income increased 16% for Mortgage Warehousing and 156% for Banking, compared with the fourth quarter of 2017. The increase in Banking reflected an increase in net interest income and a $1.0 million one-time expense associated with federal income tax reform legislation in the fourth quarter of 2017.  During the same period, Multi-family Mortgage Banking decreased 68%, primarily due to a $7.9 million one-time benefit associated with federal income tax reform legislation in the fourth quarter of 2017 and higher commissions on loan growth in the fourth quarter of 2018.

 

About Merchants Bancorp

 

Merchants Bancorp is a diversified bank holding company headquartered in Carmel, Indiana operating multiple lines of business with a focus on 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 $3.9 billion in assets and $3.2 billion in deposits as of December 31, 2018, conducts its business through its direct and indirect subsidiaries, Merchants Bank of Indiana, Merchants Capital Corp. (formerly known as P/R Mortgage and Investment Corp. prior to October 1, 2018), Farmers-Merchants Bank of Illinois (formerly known as Joy State Bank prior to October 22, 2018 and includes the October 1, 2018 acquisition of Farmers-Merchants National Bank of Paxton, Illinois), Merchants Capital Servicing, LLC (formerly known as RICHMAC Funding LLC prior to November 1, 2018), and Merchants Mortgage, a division of Merchants Bank of Indiana. For

 


 

more information and financial data, please visit Merchants’ Investor Relations page at investors.merchantsbankofindiana.com.

 

Forward-Looking Statements

 

This press release contains forward-looking statements which reflect our current views with respect to, among other things, future events and our 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 our industry, management’s beliefs and certain assumptions made by management, many of which, by their nature, are inherently uncertain and beyond our control. Accordingly, we caution you 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 we believe 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 our actual results to differ materially from those indicated in these forward-looking statements, including those factors identified in “Risk Factors” or “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in our 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.

 

Media Contact: Rebecca Marsh

 

Merchants Bancorp

Phone: (317) 805-4356

Email: [email protected]

 

Investor Contact: John Macke

 

Merchants Bancorp

Phone: (317) 536-7421

Email: [email protected]

 


 

Consolidated Balance Sheets

(Unaudited)

(In thousands, except share data)

 

 

 

December 31,

 

December 31,

 

 

 

2018

 

2017

 

Assets

 

 

 

 

 

Cash and due from banks

 

$

25,855

 

$

18,905

 

Interest-earning demand accounts

 

310,669

 

340,614

 

Cash and cash equivalents

 

336,524

 

359,519

 

Securities purchased under agreements to resell

 

6,875

 

7,043

 

Trading securities

 

163,419

 

140,837

 

Available for sale securities

 

331,071

 

408,371

 

Federal Home Loan Bank (FHLB) stock

 

7,974

 

7,539

 

Loans held for sale (includes $11,886, at fair value for 2018)

 

832,455

 

995,319

 

Loans receivable, net of allowance for loan losses of $12,704 and $8,311, respectively

 

2,045,423

 

1,366,349

 

Premises and equipment, net

 

15,136

 

5,354

 

Mortgage servicing rights

 

77,844

 

66,079

 

Interest receivable

 

13,827

 

8,326

 

Goodwill

 

17,477

 

3,902

 

Intangible assets, net

 

3,542

 

1,512

 

Other assets and receivables

 

32,596

 

22,983

 

Total assets

 

$

3,884,163

 

$

3,393,133

 

Liabilities and Shareholders’ Equity

 

 

 

 

 

Liabilities

 

 

 

 

 

Deposits

 

 

 

 

 

Noninterest bearing

 

$

182,879

 

$

620,700

 

Interest bearing

 

3,048,207

 

2,322,861

 

Total deposits

 

3,231,086

 

2,943,561

 

Borrowings

 

195,453

 

56,612

 

Deferred and current tax liabilities, net

 

15,444

 

12,422

 

Other liabilities

 

20,943

 

13,064

 

Total liabilities

 

3,462,926

 

3,025,659

 

Commitments and Contingencies

 

 

 

 

 

Shareholders’ Equity

 

 

 

 

 

Common stock, without par value Authorized - 50,000,000 shares Issued and outstanding - 28,694,036 shares at December 31, 2018 and 28,685,167 shares at December 31, 2017

 

135,057

 

134,891

 

Preferred stock - $1,000 per share, without par value Authorized - 5,000,000 shares Issued and outstanding - 41,625 shares

 

41,581

 

41,581

 

Retained earnings

 

244,909

 

192,008

 

Accumulated other comprehensive loss

 

(310

)

(1,006

)

Total shareholders’ equity

 

421,237

 

367,474

 

Total liabilities and shareholders’ equity

 

$

3,884,163

 

$

3,393,133

 

 


 

Consolidated Statement of Income

(Unaudited)

(In thousands, except share data)

 

 

 

Three Months Ended

 

Twelve Months Ended

 

 

 

December 31,

 

December 31,

 

 

 

2018

 

2017

 

2018

 

2017

 

Interest Income

 

 

 

 

 

 

 

 

 

Loans

 

$

33,999

 

$

23,101

 

$

119,457

 

$

79,922

 

Investment securities:

 

 

 

 

 

 

 

 

 

Trading

 

1,235

 

1,063

 

5,012

 

5,187

 

Available for sale

 

1,740

 

1,356

 

6,448

 

4,531

 

Federal Home Loan Bank stock

 

88

 

81

 

385

 

321

 

Other

 

2,763

 

1,309

 

9,261

 

4,426

 

Total interest income

 

39,825

 

26,910

 

140,563

 

94,387

 

Interest Expense

 

 

 

 

 

 

 

 

 

Deposits

 

13,789

 

5,833

 

42,216

 

20,003

 

Borrowed funds

 

1,861

 

2,125

 

8,376

 

7,787

 

Total interest expense

 

15,650

 

7,958

 

50,592

 

27,790

 

Net Interest Income

 

24,175

 

18,952

 

89,971

 

66,597

 

Provision for loan losses

 

1,608

 

1,400

 

4,629

 

2,472

 

 

 

 

 

 

 

 

 

 

 

Net Interest Income After Provision for Loan Losses

 

22,567

 

17,552

 

85,342

 

64,125

 

Noninterest Income

 

 

 

 

 

 

 

 

 

Gain on sale of loans

 

11,718

 

9,977

 

39,266

 

37,790

 

Loan servicing fees, net

 

1,657

 

3,972

 

5,741

 

6,273

 

Mortgage warehouse fees

 

602

 

601

 

2,550

 

2,608

 

Other income

 

758

 

357

 

2,028

 

1,009

 

Total noninterest income

 

14,735

 

14,907

 

49,585

 

47,680

 

Noninterest Expense

 

 

 

 

 

 

 

 

 

Salaries and employee benefits

 

10,643

 

7,055

 

32,240

 

21,472

 

Loan expenses

 

1,109

 

1,025

 

4,621

 

4,097

 

Occupancy and equipment

 

726

 

522

 

2,788

 

1,602

 

Professional fees

 

830

 

425

 

2,585

 

1,516

 

Deposit insurance expense

 

273

 

226

 

1,024

 

930

 

Technology expense

 

548

 

340

 

1,544

 

1,171

 

Other expense

 

2,052

 

1,207

 

6,098

 

3,856

 

Total noninterest expense

 

16,181

 

10,800

 

50,900

 

34,644

 

Income Before Income Taxes

 

21,121

 

21,659

 

84,027

 

77,161

 

Provision for Income Taxes

 

5,699

 

1,330

 

21,153

 

22,477

 

Net Income

 

$

15,422

 

$

20,329

 

$

62,874

 

$

54,684

 

Dividends on preferred stock

 

(832

)

(833

)

(3,330

)

(3,330

)

Net Income Allocated to Common Shareholders

 

14,590

 

19,496

 

59,544

 

51,354

 

Basic Earnings Per Share

 

$

0.51

 

$

0.73

 

$

2.08

 

$

2.28

 

Diluted Earnings Per Share

 

$

0.51

 

$

0.73

 

$

2.07

 

$

2.28

 

Weighted-Average Shares Outstanding

 

 

 

 

 

 

 

 

 

Basic

 

28,694,036

 

26,619,950

 

28,692,955

 

22,551,452

 

Diluted

 

28,738,444

 

26,646,338

 

28,724,419

 

22,568,154

 

Dividends Per Share

 

$

0.06

 

$

0.05

 

$

0.24

 

$

0.20

 

 


 

Key Operating Results

(Unaudited)

($ in thousands)

 

 

 

Three Months Ended

 

Twelve Months Ended

 

 

 

December 31,

 

September 30,

 

December 31,

 

December 31,

 

December 31,

 

 

 

2018

 

2018

 

2017

 

2018

 

2017

 

 

 

 

 

 

 

 

 

 

 

 

 

Noninterest Expense

 

16,181

 

12,449

 

10,800

 

50,900

 

34,644

 

 

 

 

 

 

 

 

 

 

 

 

 

Net Interest Income (before provision for losses)

 

24,175

 

23,482

 

18,952

 

89,971

 

66,597

 

Noninterest Income

 

14,735

 

11,907

 

14,907

 

49,585

 

47,680

 

Total Income

 

38,910

 

35,389

 

33,859

 

139,556

 

114,277

 

 

 

 

 

 

 

 

 

 

 

 

 

Efficiency Ratio

 

41.59

%

35.18

%

31.90

%

36.47

%

30.32

%

 

 

 

 

 

 

 

 

 

 

 

 

Average Assets

 

3,839,594

 

3,829,172

 

3,204,591

 

3,680,934

 

2,973,589

 

Net Income

 

15,422

 

16,739

 

20,329

 

62,874

 

54,684

 

Return on Average Assets before annualizing

 

0.40

%

0.44

%

0.63

%

1.71

%

1.84

%

Annualization Factor

 

4.00

 

4.00

 

4.00

 

1.00

 

1.00

 

Return on Average Assets

 

1.61

%

1.75

%

2.54

%

1.71

%

1.84

%

 

 

 

 

 

 

 

 

 

 

 

 

Return on Average Tangible Common Equity (1)

 

16.24

%

17.92

%

28.60

%

17.23

%

25.14

%

 

 

 

 

 

 

 

 

 

 

 

 

Tangible Book Value Per Common Share (1)

 

$

12.50

 

$

12.50

 

$

11.17

 

$

12.50

 

$

11.17

 

 

 

 

 

 

 

 

 

 

 

 

 

Tangible Common Equity/Tangible Assets (1)

 

9.28

%

9.44

%

9.46

%

9.28

%

9.46

%

 


(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,

 

 

 

2018

 

2018

 

2017

 

2018

 

2017

 

 

 

 

 

 

 

 

 

 

 

 

 

Net Income

 

15,422

 

16,739

 

20,329

 

62,874

 

54,684

 

Less: Preferred Stock Dividends

 

(832

)

(833

)

(833

)

(3,330

)

(3,330

)

Net Income Available to Common Shareholders

 

14,590

 

15,906

 

19,496

 

59,544

 

51,354

 

 

 

 

 

 

 

 

 

 

 

 

 

Average Shareholders Equity

 

417,072

 

403,757

 

321,785

 

396,350

 

248,515

 

Less: Average Goodwill & Intangibles

 

(16,127

)

(7,120

)

(7,552

)

(9,265

)

(2,662

)

Less: Average Preferred Stock

 

(41,581

)

(41,581

)

(41,581

)

(41,581

)

(41,581

)

Average Tangible Common Shareholder’s Equity

 

359,364

 

355,056

 

272,652

 

345,504

 

204,272

 

 

 

 

 

 

 

 

 

 

 

 

 

Annualization Factor

 

4.00

 

4.00

 

4.00

 

1.00

 

1.00

 

Return on Average Tangible Common Equity

 

16.24

%

17.92

%

28.60

%

17.23

%

25.14

%

 

 

 

 

 

 

 

 

 

 

 

 

Total Equity

 

421,237

 

407,346

 

367,474

 

421,237

 

367,474

 

Less: Goodwill and Intangibles

 

(21,019

)

(7,065

)

(5,414

)

(21,019

)

(5,414

)

Less: Preferrd Stock

 

(41,581

)

(41,581

)

(41,581

)

(41,581

)

(41,581

)

Tangible Common Equity

 

358,637

 

358,700

 

320,479

 

358,637

 

320,479

 

 

 

 

 

 

 

 

 

 

 

 

 

Assets

 

3,884,163

 

3,806,949

 

3,393,133

 

3,884,163

 

3,393,133

 

Less: Goodwill and Intangibles

 

(21,019

)

(7,065

)

(5,414

)

(21,019

)

(5,414

)

Tangible Assets

 

3,863,144

 

3,799,884

 

3,387,719

 

3,863,144

 

3,387,719

 

 

 

 

 

 

 

 

 

 

 

 

 

Ending Common Shares

 

28,694,036

 

28,694,036

 

28,685,167

 

28,694,036

 

28,685,167

 

 

 

 

 

 

 

 

 

 

 

 

 

Tangible Book Value per Common Share

 

$

12.50

 

$

12.50

 

$

11.17

 

$

12.50

 

$

11.17

 

Tangible Common Equity/Tangible Assets

 

9.28

%

9.44

%

9.46

%

9.28

%

9.46

%

 


 

Merchants Bancorp

Average Balance Analysis

($ in thousands)

(Unaudited)

 

 

 

Three Months Ended

 

Three Months Ended

 

Three Months Ended

 

 

 

December 31, 2018

 

September 30, 2018

 

December 31, 2017

 

 

 

Average

 

 

 

Yield/

 

Average

 

 

 

Yield/

 

Average

 

 

 

Yield/

 

 

 

Balance

 

Int.

 

Rate

 

Balance

 

Int.

 

Rate

 

Balance

 

Int.

 

Rate

 

Assets:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest bearing deposits, and other

 

$

490,189

 

$

2,851

 

2.31

%

$

510,115

 

$

2,681

 

2.09

%

$

442,789

 

$

1,390

 

1.25

%

Securities available for sale

 

331,613

 

1,740

 

2.08

%

355,564

 

1,541

 

1.72

%

414,895

 

1,356

 

1.30

%

Trading securities

 

125,582

 

1,235

 

3.90

%

137,351

 

1,299

 

3.75

%

119,220

 

1,063

 

3.54

%

Loans and loans held for sale

 

2,736,228

 

33,999

 

4.93

%

2,677,449

 

32,056

 

4.75

%

2,114,048

 

23,101

 

4.34

%

Total Interest Earning Assets

 

3,683,612

 

39,825

 

4.29

%

3,680,479

 

37,577

 

4.05

%

3,090,952

 

26,910

 

3.45

%

Allowance for loan losses

 

(11,495

)

 

 

 

 

(10,695

)

 

 

 

 

(7,551

)

 

 

 

 

Noninterest earning assets

 

167,477

 

 

 

 

 

159,388

 

 

 

 

 

121,190

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total assets

 

$

3,839,594

 

 

 

 

 

$

3,829,172

 

 

 

 

 

$

3,204,591

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Liabilities/Equity:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest bearing checking

 

1,335,051

 

6,122

 

1.82

%

853,066

 

4,471

 

2.08

%

612,674

 

2,153

 

1.39

%

Savings deposits

 

159,724

 

100

 

0.25

%

148,348

 

109

 

0.29

%

357,363

 

143

 

0.16

%

Money market

 

904,838

 

4,234

 

1.86

%

997,046

 

4,294

 

1.71

%

778,837

 

2,582

 

1.32

%

Certificates of deposit

 

617,659

 

3,333

 

2.14

%

577,233

 

2,796

 

1.92

%

292,142

 

955

 

1.30

%

Total interest bearing deposits

 

3,017,272

 

13,789

 

1.81

%

2,575,693

 

11,670

 

1.80

%

2,041,016

 

5,833

 

1.13

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Borrowings

 

74,072

 

1,861

 

9.97

%

74,227

 

2,425

 

12.96

%

76,505

 

2,125

 

11.02

%

Total Interest Bearing Liabilities

 

3,091,344

 

15,650

 

2.01

%

2,649,920

 

14,095

 

2.11

%

2,117,521

 

7,958

 

1.49

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Noninterest bearing deposits

 

293,197

 

 

 

 

 

748,312

 

 

 

 

 

730,936

 

 

 

 

 

Noninterest bearing liabilities

 

37,981

 

 

 

 

 

27,183

 

 

 

 

 

34,349

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total liabilities

 

3,422,522

 

 

 

 

 

3,425,415

 

 

 

 

 

2,882,806

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Equity

 

417,072

 

 

 

 

 

403,757

 

 

 

 

 

321,785

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total liabilities and equity

 

$

3,839,594

 

 

 

 

 

$

3,829,172

 

 

 

 

 

$

3,204,591

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net Interest Income

 

 

 

$

24,175

 

 

 

 

 

$

23,482

 

 

 

 

 

$

18,952

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest Rate Spread

 

 

 

 

 

2.28

%

 

 

 

 

1.94

%

 

 

 

 

1.96

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net Interest Earning Assets

 

$

592,268

 

 

 

 

 

$

1,030,559

 

 

 

 

 

$

973,431

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net Interest Margin

 

 

 

 

 

2.60

%

 

 

 

 

2.53

%

 

 

 

 

2.43

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Average Interest Earning Assets to Average Interest Bearing Liabilities

 

 

 

 

 

119.16

%

 

 

 

 

138.89

%

 

 

 

 

145.97

%

 


 

Segment Results

(Unaudited)

($ in thousands)

 

 

 

Net Income

 

Net Income

 

 

 

 

 

 

 

Three Months Ended

 

Twelve Months Ended

 

Total Assets

 

 

 

December 31,

 

December 31,

 

December 31,

 

December 31,

 

 

 

2018

 

2017

 

2018

 

2017

 

2018

 

2017

 

Segment

 

 

 

 

 

 

 

 

 

 

 

 

 

Multi-family Mortgage Banking

 

$

4,698

 

$

14,871

 

$

19,810

 

$

28,661

 

$

166,102

 

$

134,390

 

Mortgage Warehousing

 

4,942

 

4,277

 

21,000

 

18,241

 

1,430,776

 

1,352,748

 

Banking

 

6,703

 

2,617

 

26,269

 

11,410

 

2,237,588

 

1,889,140

 

Other

 

(921

)

(1,436

)

(4,205

)

(3,628

)

49,697

 

16,855

 

Total

 

$

15,422

 

$

20,329

 

$

62,874

 

$

54,684

 

$

3,884,163

 

$

3,393,133

 

 


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