Merchants Bancorp reported its financial results for the third quarter and nine months ended September 30, 2024, highlighting significant changes in revenue, profitability, and strategic developments compared to the previous fiscal period.

For the three months ended September 30, 2024, Merchants Bancorp recorded a net income of $61.3 million, a decrease of 25% from $81.5 million in the same period of 2023. The diluted earnings per share fell to $1.17 from $1.68. In contrast, net income for the nine months ended September 30, 2024, increased to $224.7 million, up 11% from $201.8 million in the prior year. Total interest income for the third quarter rose to $338.9 million, a 14% increase from $296.7 million in 2023, while net interest income increased by 13% to $132.8 million.

The company’s total assets grew to $18.7 billion as of September 30, 2024, reflecting a 10% increase from $17.0 billion at the end of 2023. Loans receivable, net of allowance for credit losses, reached $10.3 billion, a slight increase of 1% from $10.1 billion at year-end 2023. However, total deposits decreased by 8% to $12.9 billion, primarily due to a decline in certificates of deposit and demand deposits.

Merchants Bancorp's strategic activities included the completion of a $324.6 million securitization of multi-family mortgage loans in April 2024 and a private securitization of $628.9 million in healthcare bridge loans in September 2024. The company also sold branches of Farmers-Merchants Bank of Illinois in January 2024, resulting in a net gain of $715,000.

The allowance for credit losses on loans increased to $84.5 million as of September 30, 2024, up 18% from $71.8 million at the end of 2023, attributed to loan growth and specific reserves for certain borrowers. Noninterest income for the third quarter decreased significantly to $16.7 million, down 54% from $36.1 million in the prior year, primarily due to a substantial drop in loan servicing fees.

The company’s efficiency ratio for the third quarter rose to 41.00%, compared to 27.97% in the same period of 2023, indicating increased operational costs. Noninterest expenses increased by 43% to $61.3 million, driven by higher salaries, employee benefits, and deposit insurance expenses.

As of September 30, 2024, total shareholders' equity increased to $1.9 billion, a 14% rise from $1.7 billion at the end of 2023, bolstered by net income and proceeds from a common stock offering. The company’s capital ratios remained strong, with a total capital ratio of 12.2%, exceeding the minimum required to be well-capitalized.