Merchants Bancorp's Q2 net income drops 50%

Overview

• Merchants Bancorp Q2 net income falls 50% yr/yr due to higher credit loss provisions

• Diluted EPS for Q2 drops 60% yr/yr, impacted by mortgage fraud investigations

• Co's tangible book value per share hits record high, reflecting financial resilience

Outlook

• Company optimistic about future despite asset quality challenges

• Merchants Bancorp enhances risk management for long-term resilience

• Merchants Bancorp sees stability and growth through strategic efforts

Result Drivers

• CREDIT LOSS PROVISION - Increased provision for credit losses due to estimated declines in multi-family property values and mortgage fraud investigations

• NONINTEREST INCOME - Robust gain on sale of loans and syndication fees boosted noninterest income by 61%

• ASSET QUALITY STRATEGIES - Co has implemented strategies to address asset quality issues and improve risk management practices

Key Details

Analyst Coverage

• The current average analyst rating on the shares is "buy" and the breakdown of recommendations is 2 "strong buy" or "buy", 1 "hold" and no "sell" or "strong sell"

• The average consensus recommendation for the banks peer group is "buy"

• Wall Street's median 12-month price target for Merchants Bancorp is $41.00, about 15.4% above its July 25 closing price of $34.69

• The stock recently traded at 7 times the next 12-month earnings vs. a P/E of 7 three months ago

Press Release: ID:nPn1Vv65Na