On January 28, 2025, Merchants Bancorp (MBIN, Financial) released its 8-K filing detailing its fourth quarter and full year 2024 financial results. Merchants Bancorp, a U.S.-based bank holding company, operates in FHA multi-family housing and healthcare facility financing, retail and correspondent residential mortgage banking, and traditional community banking. The company reported a record net income of $320.4 million for the full year 2024, marking a 15% increase from 2023, with diluted earnings per share (EPS) reaching $6.30, surpassing the annual estimate of $5.70.
Quarterly Performance Highlights
For the fourth quarter of 2024, Merchants Bancorp reported a net income of $95.7 million, a 23% increase from the same quarter in 2023, and a 56% increase from the third quarter of 2024. The diluted EPS for the quarter was $1.85, exceeding the analyst estimate of $1.24. This growth was primarily driven by a significant increase in noninterest income, which rose by 72% year-over-year, and a favorable fair market value adjustment to servicing rights and derivatives.
Financial Achievements and Industry Impact
Merchants Bancorp's total assets reached $18.8 billion, an 11% increase from the previous year, highlighting the company's robust asset growth. The tangible book value per share also increased by 25% to $34.15. These achievements underscore the company's effective capital management and its ability to deliver value to shareholders, which is crucial in the banking industry where asset growth and shareholder value are key performance indicators.
Income Statement and Key Metrics
The company's net interest income for the fourth quarter was $134.6 million, an 8% increase from the previous year, driven by higher interest income from increased average balances in loans and securities. Noninterest income saw a substantial rise to $59.1 million, reflecting gains in loan servicing fees and asset management fees. Despite a 20% increase in noninterest expenses, primarily due to higher salaries and deposit insurance expenses, the company's overall profitability remained strong.
Asset Quality and Risk Management
Merchants Bancorp reported an allowance for credit losses on loans of $84.4 million as of December 31, 2024, reflecting an 18% increase from the previous year. The company has strategically managed credit risk through credit protection arrangements and securitization activities, which have helped mitigate potential losses. Non-performing loans increased to $279.7 million, primarily due to challenges faced by multi-family and healthcare customers with variable rate loans.
Liquidity and Deposits
Total deposits decreased by 15% year-over-year to $11.9 billion, with core deposits representing 79% of total deposits. The company maintains significant liquidity with $476.6 million in cash and $4.3 billion in unused lines of credit, ensuring flexibility in managing interest expenses and asset levels.
Our record-breaking performance in 2024 demonstrates that our superior business model provides for growth and higher earnings in any environment," said Michael F. Petrie, Chairman and CEO of Merchants Bancorp.
Overall, Merchants Bancorp's strong financial performance in 2024, driven by strategic initiatives and effective risk management, positions the company well for continued growth in the banking sector. For more detailed financial data, visit Merchants Bancorp's Investor Relations page.
Explore the complete 8-K earnings release (here) from Merchants Bancorp for further details.
