Merchants Bancorp

For the period ended Dec 31, 2023. Filed Mar 12, 2024.

About this filing

A company's yearly report to the SEC, with audited financial statements. It is the fullest account a company gives of its business, its finances and the risks it sees.

FY2023 · Filed Mar 12, 2024

MBIN$53.41+3.2%Stored close · as of Nov 9, 2026

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Contents

Item 6. Selected Financial Data

· · · · · · · · · · · · · · · ·
· · At or for the Year Ended December 31,
(Dollars in thousands, except per share data) · 2023 · 2022 · 2021 · 2020 · 2019
Balance Sheet Data: · · · · · · · · · · · · · · · ·
Total Assets	$16,952,516	$12,615,227	$11,278,638		$9,645,375		$6,371,928
Loans held for investment	10,199,553	7,470,872	5,782,663		5,535,426		3,028,310
Allowance for credit losses (1)	(71,752)	(44,014)	(31,344)		(27,500)		(15,842)
Loans held for sale	3,144,756	2,910,576	3,303,199		3,070,154		2,093,789
Deposits	14,061,460	10,071,345	8,982,613		7,408,066		5,478,075
Total liabilities	15,251,432	11,155,488	10,123,229		8,834,754		5,718,200
Total shareholders' equity	1,701,084	1,459,739	1,155,409		810,621		653,728
Tangible common shareholders' equity (non-GAAP)	1,184,889	943,100	775,708		579,847		421,438
Income Statement Data:
Interest Income	$1,077,798	$480,833	$311,886		$282,790		$211,995
Interest Expense	629,727	162,282	33,892		58,644		89,697
Net interest income	448,071	318,551	277,994		224,146		122,298
Provision for credit losses	40,231	17,295	5,012		11,838		3,940
Noninterest income	114,668	125,936	157,333		127,473		47,089
Noninterest expense	174,601	136,050	125,385		96,424		63,313
Income before taxes	347,907	291,142	304,930		243,357		102,134
Provision for income taxes	68,673	71,421	77,826		62,824		24,805
Net income	279,234	219,721	227,104		180,533		77,329
Preferred stock dividends	34,670	25,983	20,873		14,473		9,216
Net income available to common shareholders	$244,564	$193,738	$206,231		$166,060		$68,113
Credit Quality Data:
Nonperforming loans	$82,015	$26,683	$761		$6,321		$4,678
Nonperforming loans to total loans	0.80%	0.36%	0.01%		0.11%		0.15%
Nonperforming assets	$82,015	$26,683	$761		$6,321		$4,822
Nonperforming assets to total assets	0.48%	0.21%	0.01%		0.07%		0.08%
Allowance for credit losses to total loans	0.70%	0.59%	0.54%		0.50%		0.52%
Allowance for credit losses to nonperforming loans	87.49%	164.95%	4,118.79%		435.06%		338.65%
Net charge-offs/(recoveries) to average loans and loans held for sale	0.08%	0.01%	0.01%		0.00%		0.02%
Per Share Data (Common Stock):
Diluted earnings per share	$5.64	$4.47	$4.76		$3.85		$1.58
Dividends declared	$0.32	$0.28	$0.24		$0.21		$0.19
Tangible book value (non-GAAP)	$27.40	$21.88	$17.96		$13.45		$9.79
Weighted average shares outstanding
Basic	43,224,042	43,164,477	43,172,078		43,113,741		43,057,688
Diluted	43,345,799	43,316,904	43,325,303		43,167,113		43,118,561
Shares outstanding at period end	43,242,928	43,113,127	43,180,079		43,120,625		43,059,657
Performance Metrics:
Return on average assets	1.85%	1.99%	2.23%		2.12%		1.47%
Return on average equity	17.63%	17.21%	22.07%		25.09%		14.37%
Return on average tangible common equity (non-GAAP)	22.92%	22.50%	30.10%		34.02%		17.56%
Net interest margin	3.06%	2.97%	2.79%		2.69%		2.40%
Efficiency ratio (non-GAAP)	31.03%	30.61%	28.80%		27.42%		37.38%
Loans and loans held for sale to deposits	94.90%	103.08%	101.15%		116.17%		93.50%
Capital Ratios—Merchants Bancorp:
Tangible common equity to tangible assets (non-GAAP)	7.0%	7.5%	6.9%		6.0%		6.6%
Tier 1 common equity to risk-weighted assets	7.8%	7.7%	n/a	%	n/a	%	7.4%
Tier 1 leverage ratio/CBLR	10.1%	11.7%	10.4%		8.6%		9.4%
Tier 1 capital to risk-weighted assets	11.1%	11.7%	n/a	%	n/a	%	11.3%
Total capital to risk-weighted assets	11.6%	12.2%	n/a	%	n/a	%	11.6%
Capital Ratios—Merchants Bank Only:
Tier 1 common equity to risk-weighted assets	10.9%	11.3%	n/a	%	n/a	%	11.7%
Tier 1 capital to average assets	10.1%	11.3%	10.3%		8.7%		9.7%
Tier 1 capital to risk-weighted assets	10.9%	11.3%	n/a	%	n/a	%	11.7%
Total capital to risk-weighted assets	11.5%	11.7%	n/a	%	n/a	%	12.0%

(1)

The Company adopted FASB Accounting Standards Update (ASU) 2016-13, Financial Instruments—Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments (“CECL”) on January 1, 2022. ASU 2016-13 replaces the allowance for loan losses that used incurred loss impairment methodology in 2021-2019.

NON-GAAP FINANCIAL MEASURES

Some of the financial measures included in this report are not measures of financial performance recognized by GAAP. Our management uses these non-GAAP financial measures in its analysis of our performance. These non-GAAP financial measures include presentation of tangible common shareholders’ equity, tangible book value per share, tangible common shareholders’ equity to tangible assets, return on average tangible common equity, and efficiency ratio.

The reconciliation from shareholders’ equity per GAAP to tangible common shareholders’ equity is comprised of goodwill and intangibles totaling $16.6 million at December 31, 2023, $17.0 million at December 31, 2022, $17.6 million at December 31, 2021, $18.1 million at December 31, 2020 and $19.6 million for the year ended December 31, 2019, as well as preferred stock totaling $499.6 million at December 31, 2023, $499.6 million at December 31, 2022, $362.1 million at December 31, 2021, $212.6 million at December 31, 2020 and $212.6 million at December 31, 2019.

The reconciliation from consolidated assets per GAAP to tangible assets is comprised solely of consolidated assets less goodwill and intangibles totaling $16.6 million at December 31, 2023, $17.0 million at December 31, 2022, $17.6 million at December 31, 2021, $18.1 million at December 31, 2020 and $19.6 million for the year ended December 31, 2019.

The efficiency ratio represents noninterest expense divided by the sum of net interest income and noninterest income.

Tangible book value per common share represents tangible common shareholders’ equity divided by ending common shares.

Return on average tangible common equity represents net income available to common shareholders divided by average shareholders’ equity, less average goodwill, average intangibles, and average preferred stock.

We believe that these non-GAAP financial measures provide useful information to management and investors that is supplementary to our financial condition, results of operations and cash flows computed in accordance with GAAP; however, we acknowledge that the non-GAAP financial measures have a number of limitations. As such, you should not view these disclosures as a substitute for results determined in accordance with GAAP, and these disclosures are not necessarily comparable to non-GAAP financial measures that other companies use.

A reconciliation of GAAP to non-GAAP financial measures is as follows:


· · At December 31,
(Dollars in thousands) · 2023 · 2022 · 2021 · 2020 · 2019
Tangible common shareholders’ equity: · · · · · ·
Shareholders’ equity per GAAP	$1,701,084	$1,459,739	$1,155,409	$810,621	$653,728
Less: goodwill & intangibles	(16,587)	(17,031)	(17,552)	(18,128)	(19,644)
Tangible shareholders’ equity	1,684,497	1,442,708	1,137,857	792,493	634,084
Less: preferred stock	(499,608)	(499,608)	(362,149)	(212,646)	(212,646)
Tangible common shareholders’ equity	$1,184,889	$943,100	$775,708	$579,847	$421,438

Average tangible common shareholders’ equity:
Average shareholders’ equity per GAAP	$1,583,485	$1,276,443	$1,028,834	$719,630	$537,946
Less: average goodwill & intangibles	(16,801)	(17,293)	(17,841)	(18,899)	(20,243)
Less: average preferred stock	(499,608)	(398,182)	(325,904)	(212,646)	(129,881)
Average tangible common shareholders’ equity	$1,067,076	$860,968	$685,089	$488,085	$387,822

Tangible assets:
Assets per GAAP	$16,952,516	$12,615,227	$11,278,638	$9,645,375	$6,371,928
Less: goodwill & intangibles	(16,587)	(17,031)	(17,552)	(18,128)	(19,644)
Tangible assets	$16,935,929	$12,598,196	$11,261,086	$9,627,247	$6,352,284

Ending Common Shares	43,242,928	43,113,127	43,180,079	43,120,625	43,059,657

Tangible book value per common share	$27.40	$21.88	$17.96	$13.45	$9.79

Return on average tangible common equity	22.92%	22.50%	30.10%	34.02%	17.56%

Tangible common equity to tangible assets	7.0%	7.5%	6.9%	6.0%	6.6%


· · For the Year Ended ·
· · December 31, ·
· 2023 · 2022 · 2021 · 2020 · 2019 ·
Net income as reported per GAAP	$279,234	$219,721	$227,104	$180,533	$77,329
Less: preferred stock dividends	(34,670)	(25,983)	(20,873)	(14,473)	(9,216)
Net income available to common shareholders	$244,564	$193,738	$206,231	$166,060	$68,113

Efficiency ratio (based on all GAAP metrics):
Noninterest expense	$174,601	$136,050	$125,385	$96,424	$63,313
Net interest income (before provision for credit losses)	448,071	318,551	277,994	224,146	122,298
Noninterest income	114,668	125,936	157,333	127,473	47,089
Total revenues for efficiency ratio	$562,739	$444,487	$435,327	$351,619	$169,387
Efficiency ratio	31.03%	30.61%	28.80%	27.42%	37.38%

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