Merchants Bancorp Reports Full Year and Fourth Quarter 2020 Results

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CARMEL, Ind., Jan. 28, 2021 /PRNewswire/ -- Merchants Bancorp (the "Company" or "Merchants") MBIN, parent company of Merchants Bank of Indiana, today reported fourth quarter 2020 net income of $59.8 million, or diluted earnings per share of $1.95.  This compared to $30.1 million, or diluted earnings per share of $0.92 in the fourth quarter of 2019, and compared to $55.0 million, or diluted earnings per share of $1.79 in the third quarter of 2020.

The $29.7 million, or 99%, increase in net income for the fourth quarter 2020 compared to the fourth quarter of 2019 was driven by a $31.6 million, or 84%, increase in net interest income that reflected significant growth in mortgage warehouse loans, and an 88% increase in gain on sale of loans, primarily from higher growth in both single-family and multi-family mortgages. 

The $4.8 million, or 9%, increase in net income for the fourth quarter 2020 compared to the third quarter of 2020 was primarily driven by a $3.9 million, or 6%, increase in net interest income that also reflected significant growth in mortgage warehouse loans and a 20 basis point increase in the net interest margin.

"The continued strength of our results in the fourth quarter capped off a year of record-setting performance that defied the economic challenges of a global pandemic. Our investments in technology, talent, and home-grown synergistic businesses, along with conservative underwriting, allowed us to capitalize on historically low interest rates to generate a 133% increase in net income during 2020.  We also saw our earnings per share grow by 143% and assets grow by 51% compared to 2019.  Additionally, during the fourth quarter we delivered a return on average assets of 2.57%, a return on average tangible shareholders' equity of 40.6%, a tangible book value of $20.17 per share, and an industry-leading efficiency ratio of 24.5%," said Michael F. Petrie, Chairman and CEO of Merchants.  

Michael J. Dunlap, President and Chief Operating Officer of Merchants, added, "We are entering 2021 in a strong position to deliver financial solutions within our unique and successful business model.  We remain optimistic about our future because of the hard work and dedication of our employees."

Total Assets
Total assets of $9.6 billion at December 31, 2020 increased $3.3 billion, or 51%, compared to December 31, 2019, and increased $114.9 million, or 1%, compared to September 30, 2020.

The 51% increase compared to December 31, 2019 was primarily due to growth in loans held for sale and loans receivable, which increased a combined total of $3.5 billion, or 68%.  The increase reflected the significant loan growth generated from mortgage warehouse business, primarily resulting from lower interest rates that increased the origination volume and refinancing in the single-family mortgage market, as well as higher loan volume generated in multi-family business. 

Return on average assets was 2.57% for the fourth quarter of 2020 compared to 1.81% for the fourth quarter of 2019 and 2.34% for the third quarter of 2020. 

Asset Quality
The allowance for loan losses of $27.5 million at December 31, 2020 increased $11.7 million compared to December 31, 2019 and increased $4.1 million compared to September 30, 2020.  The increases were primarily based on growth in the loan portfolio, but also reflected uncertainties surrounding the COVID-19 pandemic.  Approximately 87% of the $11.7 million increase compared to December 31, 2019, was related primarily to loan growth, while an additional provision associated with the COVID-19 pandemic represented approximately $0.6 million, or 5%, of the increase.   Because it is still too early to know the full extent of potential future losses associated with the impact of COVID-19, the Company continues to monitor the situation and may need to adjust future expectations as developments occur.

Merchants believes it has minimal direct exposure to consumer, commercial and other small businesses that may be negatively impacted by COVID-19 but continues to assist customers facing financial setbacks.  As of December 31, 2020, the Company had only 11 loans remaining in payment deferral arrangements, with unpaid balances of $0.9 million that represented 0.01% of total loans and loans held for sale. This compared favorably to the unpaid balances of $1.6 million at September 30, 2020.

Non-performing loans were $6.3 million, or 0.11%, of loans receivable at December 31, 2020, compared to $4.7 million, or 0.15% of loans receivable at December 31, 2019, and compared to $7.9 million, or 0.16% of loans receivable at September 30, 2020.  The increase in non-performing loans compared to December 31, 2019 was primarily related to one collateralized agricultural loan that was delinquent greater than 90 days, with repayment still anticipated.

Total Deposits
Total deposits of $7.4 billion at December 31, 2020 increased $1.9 billion, or 35%, compared to December 31, 2019, and increased $323.4 million, or 5%, compared to September 30, 2020. The increases compared to both periods were primarily due to growth in traditional demand accounts, as the Company significantly reduced its balances of brokered certificates of deposits.

Total brokered deposits of $1.2 billion at December 31, 2020 decreased $983.3 million, or 46%, from December 31, 2019 and decreased $554.2 million from September 30, 2020.   Brokered deposits represented 16% of total deposits at December 31, 2020 compared to 39% of total deposits at December 31, 2019 and 24% of total deposits at September 30, 2020.

Liquidity
The Company continues to have significant borrowing capacity, with unused lines of credit at $2.6 billion at December 31, 2020.  This liquidity enhances the ability to effectively manage interest expense and assets levels in the future.  The Company began utilizing the Federal Reserve's discount window during the second quarter of 2020 and the Paycheck Protection Program Liquidity Facility ("PPPLF") during the third quarter of 2020, which have contributed to lower interest expenses and increased borrowing capacity.

Net Interest Income
Net interest income of $69.2 million in the fourth quarter of 2020 increased $31.6 million, or 84%, compared to the fourth quarter of 2019 and increased $3.9 million, or 6%, compared to the third quarter of 2020. 

The 84% increase in net interest income compared to the fourth quarter of 2019 reflected significantly higher loan growth and a higher net interest margin.  The interest rate spread of 2.95% for the fourth quarter of 2020 increased 88 basis points compared to 2.07% in the fourth quarter of 2019. The net interest margin of 3.01% for the fourth quarter of 2020 increased 70 basis points compared to 2.31% for the fourth quarter of 2019. The increase in net interest margin compared to the fourth quarter of 2019 reflected lower funding costs that outpaced the lower interest rates on loans.

The 6% increase in net interest income compared to the third quarter of 2020 reflected an interest rate spread of 2.95% that increased 21 basis points compared to 2.74% in the third quarter of 2020.  The net interest margin of 3.01% for the fourth quarter of 2020 also increased 20 basis points compared to 2.81% for the third quarter of 2020.  The increase in net interest margin compared to the third quarter of 2020 reflected lower funding costs and modestly higher interest rates on loans.

Interest Income
Interest income of $77.9 million in the fourth quarter of 2020 increased $14.1 million, or 22%, compared to the fourth quarter of 2019 and increased $1.6 million, or 2%, compared to the third quarter of 2020. 

The 22% increase in interest income compared to the fourth quarter of 2019 was primarily due to significant loan growth that was partially offset by lower rates.  The higher interest income reflected a $3.0 billion, or 57%, increase in the average balance of loans, including loans held for sale, which reached $8.1 billion for the fourth quarter of 2020. The average yield on loans and loans held for sale of 3.64% for the fourth quarter of 2020 decreased 71 basis points compared to 4.35% for the fourth quarter of 2019. The decline in average yields reflected higher loan volume and lower overall interest rates in the fourth quarter of 2020.

The 2% increase in interest income compared to the third quarter of 2020 reflected a $217.8 million, or 3%, increase in the average balance of loans, including loans held for sale, which reached $8.1 billion for the fourth quarter of 2020. The average yield on loans and loans held for sale of 3.64% for the fourth quarter of 2020 increased 3 basis points compared to 3.61% for the third quarter of 2020. 

Interest Expense
Total interest expense of $8.7 million for the fourth quarter of 2020 decreased $17.5 million, or 67%, compared to the fourth quarter of 2019 and decreased $2.3 million, or 21%, compared to the third quarter of 2020. Interest expense on deposits of $7.1 million for the fourth quarter of 2020 decreased $17.9 million, or 72%, compared to the fourth quarter of 2019 and decreased $2.0 million, or 22%, compared to the third quarter of 2020.

The 72% decrease in interest expense on deposits compared to the fourth quarter of 2019 was primarily due to significant decreases in balances and rates of brokered certificates of deposits, as well as higher balances of custodial interest-bearing checking accounts with warehouse customers that are tied to short-term LIBOR rates, which declined significantly. The average balance of interest-bearing deposits of $6.8 billion for the fourth quarter of 2020 increased $1.3 billion, or 23%, compared to the fourth quarter of 2019. The average cost of interest-bearing deposits was 0.41% for the fourth quarter of 2020, which was a 137 basis point decrease compared to 1.78% for the fourth quarter of 2019. 

The 22% decrease in interest expense on deposits compared to the third quarter of 2020 was primarily due to the decreases in balances of brokered certificates of deposits.  The average balance of interest-bearing deposits of $6.8 billion for the fourth quarter of 2020 decreased $402.7 million, or 6%, compared to the third quarter of 2020. The average cost of interest-bearing deposits was 0.41% for the fourth quarter of 2020, which was a 9 basis point decrease compared to 0.50% in the third quarter of 2020. 

Noninterest Income
Noninterest income of $42.7 million for the fourth quarter of 2020 increased $20.0 million, or 88%, compared to the fourth quarter of 2019 and increased $4.1 million, or 11%, compared to the third quarter of 2020.

The 88% increase in noninterest income compared to the fourth quarter of 2019 was primarily due to a $13.5 million, or 88%, increase in gain on sale of loans and a $3.4 million increase in mortgage warehouse fees. Noninterest income for the fourth quarter of 2020 included a $2.1 million positive fair market value adjustment to mortgage servicing rights, which compared to a $1.1 million positive fair market value adjustment for the fourth quarter of 2019.

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The 11% increase in noninterest income compared to the third quarter of 2020 was primarily due to a $3.7 million increase in loan servicing fees.   Included in loan servicing fees for the fourth quarter of 2020 was a $2.1 million positive fair market value adjustment to mortgage servicing rights, which compared to a $1.0 million negative fair market value adjustment for the third quarter of 2020.

At December 31, 2020, the mortgage servicing rights asset was valued at $82.6 million, an increase of 11% compared to December 31, 2019 and an increase of 9% compared to September 30, 2020.  The value of mortgage servicing rights generally increases in rising interest rate environments and declines in falling interest rate environments.

Noninterest Expense
Noninterest expense of $27.5 million for the fourth quarter of 2020 increased $8.6 million, or 46%, compared to the fourth quarter of 2019 and increased $1.1 million, or 4%, compared to the third quarter of 2020. 

The 46% increase in noninterest expense compared to the fourth quarter of 2019 was due primarily to a $6.1 million, or 59%, increase in salaries and employee benefits to support business growth and a $1.9 million, or 192%, increase in loan expenses.    The efficiency ratio of 24.5% for the fourth quarter of 2020 compared to 31.2% for the fourth quarter of 2019.

The 4% increase in noninterest expense compared to the third quarter of 2020 was primarily due to a $0.9 million, or 133%, increase in professional fees.  The efficiency ratio of 24.5% for the fourth quarter of 2020 compared to 25.4% for the third quarter of 2020.

Segments
For the fourth quarter of 2020, net income for Mortgage Warehousing increased 137% compared to the fourth quarter of 2019, reflecting significant growth in net interest income from higher loan volume.

For the fourth quarter of 2020, net income for Multi-family Mortgage Banking increased 39% compared with the fourth quarter of 2019, primarily due to higher gain on sale of loans that was partially offset by higher salaries and benefit expenses to support growth. The segment increased 142% compared to the third quarter of 2020, primarily due to higher noninterest income from gain on sale of loans and loan servicing fees that reflected a positive fair market value adjustment. 

For the fourth quarter of 2020, net income for Banking increased 133% compared to the fourth quarter of 2019, reflecting higher net interest income and gain on sale of loans in the single-family mortgage business.

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 $9.6 billion in assets and $7.4 billion in deposits as of December 31, 2020, 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,



2020


2020


2020


2020


2019

Assets











Cash and due from banks


$                10,063


$                  9,276


$                13,830


$                  8,168


$                13,909

Interest-earning demand accounts


169,665


419,926


389,357


559,914


492,800

Cash and cash equivalents


179,728


429,202


403,187


568,082


506,709

Securities purchased under agreements to resell


6,580


6,616


6,651


6,685


6,723

Mortgage loans in process of securitization


338,733


374,721


518,788


465,157


269,891

Available for sale securities


269,802


278,861


259,656


339,053


290,243

Federal Home Loan Bank (FHLB) stock


70,656


70,656


53,224


46,156


20,369

Loans held for sale (includes $40,044, $41,418, $42,000,
    $18,938 and $19,592, respectively, at fair value)


3,070,154


3,319,619


3,877,769


2,796,008


2,093,789

Loans receivable, net of allowance for loan losses of $27,500,
    $23,436, $20,497, $18,883 and $15,842, respectively


5,507,926


4,857,554


4,133,315


3,501,770


3,012,468

Premises and equipment, net


29,761


29,261


29,362


29,415


29,274

Mortgage servicing rights


82,604


75,772


72,889


69,978


74,387

Interest receivable


21,770


19,130


18,574


18,139


18,359

Goodwill


15,845


15,845


15,845


15,845


15,845

Intangible assets, net


2,283


2,657


3,038


3,419


3,799

Other assets and receivables


49,533


50,581


47,102


48,691


30,072

Total assets


$           9,645,375


$           9,530,475


$           9,439,400


$           7,908,398


$           6,371,928

Liabilities and Shareholders' Equity











  Liabilities











Deposits











Noninterest-bearing


$              853,648


$              666,081


$              601,265


$              327,805


$              272,037

Interest-bearing


6,554,418


6,418,566


6,307,363


6,394,900


5,206,038

Total deposits


7,408,066


7,084,647


6,908,628


6,722,705


5,478,075

Borrowings


1,348,256


1,618,201


1,761,113


444,567


181,439

Deferred and current tax liabilities, net


20,405


22,405


21,020


25,013


16,917

Other liabilities


58,027


48,087


40,441


43,144


41,769

Total liabilities


8,834,754


8,773,340


8,731,202


7,235,429


5,718,200

Commitments and  Contingencies











Shareholders' Equity











Common stock, without par value











Authorized - 50,000,000 shares











Issued and outstanding - 28,747,083 shares, 28,745,614
         shares, 28,745,614 shares, 28,742,484 shares and
         28,706,438 shares, respectively


135,857


136,103


135,949


135,746


135,640

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 - 41,625 shares


41,581


41,581


41,581


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 (all equivalent 
to 5,000,000 depositary shares)


120,844


120,844


120,844


120,844


120,844

Retained earnings


461,744


407,979


358,895


323,651


304,984

Accumulated other comprehensive income


374


407


708


926


458

Total shareholders' equity


810,621


757,135


708,198


672,969


653,728

Total liabilities and shareholders' equity


$           9,645,375


$           9,530,475


$           9,439,400


$           7,908,398


$           6,371,928












 

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,



2020


2020


2019


2020


2019

Interest Income















Loans


$

74,515


$

71,857


$

56,829


$

263,915


$

186,428

Mortgage loans in process of securitization



2,542



3,250



2,256



11,122



6,690

Investment securities:
















Available for sale - taxable



422



431



1,576



3,147



6,208

Available for sale - tax exempt



11



37



55



123



272

Federal Home Loan Bank stock



341



531



190



1,558



932

Other



80



152



2,893



2,925



11,465

Total interest income



77,911



76,258



63,799



282,790



211,995

Interest Expense
















Deposits



7,106



9,104



25,051



52,238



84,661

Borrowed funds



1,568



1,832



1,127



6,406



5,036

Total interest expense



8,674



10,936



26,178



58,644



89,697

Net Interest Income



69,237



65,322



37,621



224,146



122,298

Provision for loan losses



4,114



2,981



1,993



11,838



3,940

Net Interest Income After Provision for Loan Losses



65,123



62,341



35,628



212,308



118,358

Noninterest Income
















Gain on sale of loans



28,830



29,498



15,352



96,578



35,411

Loan servicing fees, net



3,069



(643)



2,200



(1,801)



(1,118)

Mortgage warehouse fees



5,926



6,833



2,555



20,980



7,145

Gains on sale of investments available for sale (1)





441



352



441



476

Other income



4,901



2,528



2,244



11,275



5,175

Total noninterest income



42,726



38,657



22,703



127,473



47,089

Noninterest Expense
















Salaries and employee benefits



16,565



16,567



10,422



59,200



38,093

Loan expenses



2,938



2,944



1,007



9,085



4,534

Occupancy and equipment



1,438



1,420



1,793



5,733



4,609

Professional fees



1,657



712



826



3,664



2,326

Deposit insurance expense



759



1,404



1,393



5,800



2,747

Technology expense



832



903



848



3,061



2,623

Other expense



3,276



2,434



2,547



9,881



8,381

Total noninterest expense



27,465



26,384



18,836



96,424



63,313

Income Before Income Taxes



80,384



74,614



39,495



243,357



102,134

Provision for income taxes (2)



20,598



19,612



9,434



62,824



24,805

Net Income


$

59,786


$

55,002


$

30,061


$

180,533


$

77,329

   Dividends on preferred stock



(3,618)



(3,618)



(3,618)



(14,473)



(9,216)

Net Income Allocated to Common Shareholders



56,168



51,384



26,443



166,060



68,113

Basic Earnings Per Share


$

1.95


$

1.79


$

0.92


$

5.78


$

2.37

Diluted Earnings Per Share


$

1.95


$

1.79


$

0.92


$

5.77


$

2.37

Weighted-Average Shares Outstanding
















Basic



28,745,767



28,745,614



28,706,438



28,742,494



28,705,125

Diluted



28,812,009



28,778,462



28,754,078



28,778,075



28,745,707

















(1) Includes $0, $441, $352, $441, and $476, respectively, related to accumulated other comprehensive earnings reclassifications.





(2) Includes $0, $(97), $(86), $(97), and $(117), 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,




2020


2020


2019


2020


2019













Noninterest expense



$             27,465


$            26,384


$             18,836


$             96,424


$             63,313













Net interest income (before provision for losses)



69,237


65,322


37,621


224,146


122,298

Noninterest income



42,726


38,657


22,703


127,473


47,089

Total income



$           111,963


$          103,979


$             60,324


$           351,619


$           169,387













Efficiency ratio



24.53%


25.37%


31.22%


27.42%


37.38%

























Average assets



$        9,317,570


$       9,409,450


$        6,639,736


$        8,509,847


$        5,262,300

Net income



$             59,786


$            55,002


$             30,061


$           180,533


$             77,329

Return on average assets before annualizing



0.64%


0.58%


0.45%


2.12%


1.47%

Annualization factor



4.00


4.00


4.00


1.00


1.00

Return on average assets



2.57%


2.34%


1.81%


2.12%


1.47%













Return on average tangible common shareholders' equity (1)



40.64%


41.01%


25.65%


34.02%


17.56%













Tangible book value per common share (1)



$               20.17


$              18.30


$               14.68


$               20.17


$               14.68













Tangible common shareholders' equity/tangible assets (1)



6.02%


5.53%


6.63%


6.02%


6.63%













(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,




2020


2020


2019


2020


2019













Net income



$             59,786


$            55,002


$             30,061


$           180,533


$             77,329

Less: preferred stock dividends 



(3,618)


(3,618)


(3,618)


(14,473)


(9,216)

Net income available to common shareholders



$             56,168


$            51,384


$             26,443


$           166,060


$             68,113













Average shareholders' equity



$           783,837


$          732,533


$           644,588


$           719,630


$           537,946

Less: average goodwill & intangibles



(18,334)


(18,707)


(19,607)


(18,899)


(20,243)

Less: average preferred stock



(212,646)


(212,646)


(212,675)


(212,646)


(129,881)

Tangible common shareholders' equity



$           552,857


$          501,180


$           412,306


$           488,085


$           387,822













Annualization factor



4.00


4.00


4.00


1.00


1.00

Return on average tangible common shareholders' equity



40.64%


41.01%


25.65%


34.02%


17.56%

























Total equity



$           810,621


$          757,135


$           653,728


$           810,621


$           653,728

Less: goodwill and intangibles



(18,128)


(18,502)


(19,644)


(18,128)


(19,644)

Less: preferred stock



(212,646)


(212,646)


(212,646)


(212,646)


(212,646)

Tangible common shareholders' equity



$           579,847


$          525,987


$           421,438


$           579,847


$           421,438













Assets



$        9,645,375


$       9,530,475


$        6,371,928


$        9,645,375


$        6,371,928

Less: goodwill and intangibles



(18,128)


(18,502)


(19,644)


(18,128)


(19,644)

Tangible assets



$        9,627,247


$       9,511,973


$        6,352,284


$        9,627,247


$        6,352,284













Ending common shares



28,747,083


28,745,614


28,706,438


28,747,083


28,706,438













Tangible book value per common share



$               20.17


$              18.30


$               14.68


$               20.17


$               14.68

Tangible common shareholders' equity/tangible assets



6.02%


5.53%


6.63%


6.02%


6.63%

 

Merchants Bancorp

Average Balance Analysis

($ in thousands)

(Unaudited)














Three Months Ended


Three Months Ended


Three Months Ended


December 31, 2020


September 30, 2020


December 31, 2019


Average


Yield/


Average


Yield/


Average


Yield/


Balance

Interest

Rate


Balance

Interest

Rate


Balance

Interest

Rate

Assets:
























Interest-bearing deposits, and other

$      328,635

$      421

0.51%


$      587,804

$       683

0.46%


$        702,706

$    3,083

1.74%

Securities available for sale - taxable

276,358

422

0.61%


269,896

431

0.64%


288,935

1,576

2.16%

Securities available for sale - tax exempt

1,368

11

3.20%


5,145

37

2.86%


7,527

55

2.90%

Mortgage loans in process of securitization

397,237

2,542

2.55%


449,336

3,250

2.88%


286,712

2,256

3.12%

Loans and loans held for sale

8,141,559

74,515

3.64%


7,923,726

71,857

3.61%


5,182,530

56,829

4.35%

     Total interest-earning assets

9,145,157

77,911

3.39%


9,235,907

76,258

3.28%


6,468,410

63,799

3.91%

Allowance for loan losses

(24,684)




(21,585)




(14,126)



Noninterest-earning assets

197,097




195,128




185,452















Total assets

$    9,317,570




$   9,409,450




$     6,639,736



























Liabilities & Shareholders' Equity:
























Interest-bearing checking

4,301,607

1,256

0.12%


3,890,865

1,368

0.14%


1,971,710

7,652

1.54%

Savings deposits

185,515

41

0.09%


180,931

34

0.07%


154,997

76

0.19%

Money market

1,734,321

4,312

0.99%


1,578,956

3,861

0.97%


1,000,971

4,339

1.72%

Certificates of deposit

616,493

1,497

0.97%


1,589,852

3,841

0.96%


2,453,211

12,984

2.10%

    Total interest-bearing deposits

6,837,936

7,106

0.41%


7,240,604

9,104

0.50%


5,580,889

25,051

1.78%













Borrowings

990,707

1,568

0.63%


800,021

1,832

0.91%


69,556

1,127

6.43%

    Total interest-bearing liabilities

7,828,643

8,674

0.44%


8,040,625

10,936

0.54%


5,650,445

26,178

1.84%













Noninterest-bearing deposits

634,231




579,145




278,447



Noninterest-bearing liabilities

70,859




57,147




66,256















    Total liabilities

8,533,733




8,676,917




5,995,148















    Shareholders' equity

783,837




732,533




644,588















Total liabilities and shareholders' equity

$    9,317,570




$   9,409,450




$     6,639,736















Net interest income


$  69,237




$   65,322




$   37,621














Net interest spread



2.95%




2.74%




2.07%













Net interest-earning assets

$    1,316,514




$   1,195,282




$        817,965















Net interest margin



3.01%




2.81%




2.31%













Average interest-earning assets to average
interest-bearing liabilities



116.82%




114.87%




114.48%













 

Supplemental Results

(Unaudited)

($ in thousands)



















Net Income


Net Income






Three Months Ended


Twelve Months Ended






December 31,


September 30,


December 31,


December 31,






2020


2020


2019


2020


2019


Segment














Multi-family Mortgage Banking




$              14,231


$              5,891


$               10,217


$          29,172


$          14,763


Mortgage Warehousing




32,387


33,793


13,690


106,329


34,766


Banking




16,389


17,486


7,028


53,637


31,854


Other




(3,221)


(2,168)


(874)


(8,605)


(4,054)


Total




$              59,786


$            55,002


$               30,061


$        180,533


$          77,329


































Total Assets










December 31,


September 30,


December 31,










2020


2020


2019






Segment














Multi-family Mortgage Banking




$            210,714


$          194,624


$             188,866






Mortgage Warehousing




4,893,513


5,179,664


3,124,684






Banking




4,498,880


4,111,984


3,018,568






Other




42,268


44,203


39,810






Total




$         9,645,375


$       9,530,475


$          6,371,928






































Gain on Sale of Loans


Gain on Sale of Loans






Three Months Ended


Twelve Months Ended






December 31,


September 30,


December 31,


December 31,






2020


2020


2019


2020


2019


Loan Type














Multi-family




$              17,070


$            14,872


$               14,177


$          57,633


$          32,891


Single-family




10,902


14,093


1,171


37,127


2,451


Small Business Association (SBA)



858


533


4


1,818


69


Total




$              28,830


$            29,498


$               15,352


$          96,578


$          35,411


































Loans Receivable and Loans Held for Sale










December 31,


September 30,


December 31,










2020


2020


2019




















Mortgage warehouse lines of credit



$         1,605,745


$       1,647,521


$             765,151






Residential real estate




678,848


572,527


413,835






Multi-family and healthcare financing


2,749,020


2,125,516


1,347,125






Commercial and commercial real estate

387,294


419,812


398,601






Agricultural production and real estate

101,268


101,636


85,210






Consumer and margin loans




13,251


13,978


18,388










5,535,426


4,880,990


3,028,310






    Less: Allowance for loan losses



27,500


23,436


15,842






Loans receivable




$         5,507,926


$       4,857,554


$          3,012,468




















Loans held for sale




3,070,154


3,319,619


2,093,789






Total loans, net of allowance




$         8,578,080


$       8,177,173


$          5,106,257




















 

SOURCE Merchants Bancorp

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