Merchants Bancorp (MBIN) AI Stock Analysis

• Market Cap: $1.41B
• Dividend Yield: 1.23%
• Average Volume (3M): 194.00K
• Price to Earnings (P/E): 5.7
• Beta (1Y): 0.91
• Revenue Growth: 9.00%
• EPS Growth: -14.72%
• Country: US
• Employees: 663
• Sector: Financial
• Sector Strength: 86
• Industry: Banks - Regional
• EPS (TTM): 0.93
• Shares Outstanding: 45,881,706
• 10 Day Avg. Volume: 199,553
• 30 Day Avg. Volume: 194,000
• PEG Ratio: N/A
• Price to Book (P/B): N/A
• Price to Sales (P/S): 0.00
• Price to Cash Flow (P/CF): 0.00
• P/FCF Ratio: 0.00
• Enterprise Value/Market Cap: 4.43
• Enterprise Value/Revenue: N/A
• Enterprise Value/Gross Profit: 4.79
• Enterprise Value/Ebitda: N/A
• 1Y Price Target: $45.00
• Price Target Upside: 42.99% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 3

Merchants Bancorp scores well in financial performance due to strong revenue growth and a solid balance sheet, though liquidity risks from negative cash flows are a concern. The technical analysis indicates bearish trends, with oversold signals suggesting potential volatility. Valuation is a strong point, with a low P/E ratio indicating the stock may be undervalued. The recent appointment of a new Chief Accounting Officer could improve operational efficiency, but its immediate impact on stock performance is limited.

Positive Factors

Fee income

Core fees of $46M beat consensus estimates of $27M driven by higher gain on sale/syndication & asset management fees.

Financial performance

Reported EPS of $1.85 beat MS/consensus estimates of $1.34/$1.27 on higher fees/NII and lower provision partially offset by higher expenses.

Negative Factors

Credit quality

Credit was weaker in the quarter with the NCO ratio coming in above consensus estimates.

Earnings

1Q25 EPS came in below estimates driven by lower NII and fees.

Loan growth

Loan growth was weaker, with average loans down and IB deposits decreasing.

Merchants Bancorp Business Overview & Revenue Model

Company Description

Merchants Bancorp (MBIN) is a diversified bank holding company based in the United States. It operates primarily through its subsidiaries, Merchants Bank of Indiana and Merchants Capital, offering a range of commercial and retail banking products and services. The company focuses on mortgage banking, agricultural lending, small business loans, and deposit services. Additionally, it provides financing solutions for multifamily housing and healthcare facilities through its real estate lending and servicing segment.

How the Company Makes Money

Merchants Bancorp makes money through several key revenue streams, including interest income from loans and leasing activities, fee income from mortgage banking operations, and servicing income from its real estate lending and servicing division. The company's primary source of revenue is generated from interest earned on its loan portfolio, which includes commercial and residential real estate loans, as well as consumer and business loans. Merchants Bancorp also earns substantial fee income by originating, selling, and servicing mortgage loans, with a significant focus on multifamily and healthcare facility financing. The bank's strategic partnerships with government-sponsored enterprises and other financial institutions enhance its ability to provide competitive loan products and expand its market reach.

Merchants Bancorp Financial Statement Overview

Summary

Merchants Bancorp demonstrates strong revenue growth and stable profitability with a high net profit margin. The balance sheet is robust, featuring no debt and rising equity, though the return on equity has decreased. However, significant cash flow challenges are present, with negative operating and free cash flows suggesting liquidity risks. Improvements in cash flow management are necessary for sustained growth.

Income Statement

Merchants Bancorp has demonstrated strong revenue growth, with a significant increase in total revenue from 2019 to 2024. The gross profit margin remains high due to the absence of cost of goods sold, typical for banks. Net profit margin has slightly improved from 46.7% in 2019 to 24.6% in 2024, indicating stable profitability. The EBIT margin is consistently high, reflecting efficient operations. However, EBITDA data is missing for 2024, limiting some analysis.

Balance Sheet

The company's balance sheet shows strong equity growth with stockholders' equity increasing from $653.7 million in 2019 to $2.24 billion in 2024. Debt-to-equity ratio has improved significantly with total debt eliminated by 2024, showcasing strong financial management. The equity ratio has increased, indicating robust capitalization. However, the return on equity has decreased from 11.8% in 2019 to 14.3% in 2024, suggesting potential efficiency issues in using equity to generate profits.

Cash Flow

Merchants Bancorp's cash flow statement reveals challenges, with negative operating cash flow in recent years. Free cash flow remains negative, indicating potential liquidity issues. The operating cash flow to net income ratio and free cash flow to net income ratio are concerning, reflecting issues in converting income into cash. Despite improvements in financing activities, the overall cash flow position suggests caution.

Breakdown
Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement		Total Revenue
1.30B	522.51M	427.19M	430.31M	339.78M
	Gross Profit
1.30B	522.51M	427.19M	430.31M	339.78M
	EBIT
1.29B	347.91M	294.61M	307.62M	249.16M
	EBITDA
0.00	0.00	293.63M	307.12M	245.25M
	Net Income Common Stockholders
320.39M	279.23M	219.72M	227.10M	180.53M
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
991.04M	584.42M	345.51M	1.34B	449.53M
	Total Assets
18.81B	16.95B	12.62B	11.28B	9.65B
	Total Debt
4.34B	964.13M	960.39M	1.03B	1.35B
	Net Debt
-10.99M	379.70M	734.23M	1.34M	1.17B
	Total Liabilities
16.56B	15.25B	11.16B	10.12B	1.37B
	Stockholders Equity
2.24B	1.70B	1.46B	1.16B	810.62M
Cash Flow		Free Cash Flow
-835.28M	-363.93M	966.96M	-52.86M	-878.51M
	Operating Cash Flow
-835.28M	-356.40M	975.77M	-49.22M	-874.89M
	Investing Cash Flow
-874.27M	-3.26B	-2.86B	-474.26M	-2.53B
	Financing Cash Flow
1.60B	3.97B	1.08B	1.38B	3.08B

Merchants Bancorp Technical Analysis

• Technical Analysis Sentiment: Negative
• Last Price: 31.47
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Negative
• MACD: Negative
• RSI: Neutral
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For MBIN, the sentiment is Negative. The current price of 31.47 is below the 20-day moving average (MA) of 31.68, below the 50-day MA of 35.15, and below the 200-day MA of 39.87, indicating a bearish trend. The MACD of -1.25 indicates Negative momentum. The RSI at 44.09 is Neutral, neither overbought nor oversold. The STOCH value of 52.76 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for MBIN.

Merchants Bancorp Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
OFG	79 Outperform	$1.86B	9.87	15.46%	2.57%	7.84%	6.82%
NIC	78 Outperform	$1.81B	14.53	11.47%	0.93%	10.78%	28.31%
CASH	75 Outperform	$1.95B	11.06	22.88%	0.24%	3.25%	11.22%
CHCO	70 Outperform	$1.71B	14.61	16.25%	2.65%	8.80%	0.22%
FBNC	69 Neutral	$1.71B	19.58	6.04%	2.13%	-2.00%	-23.84%
MBIN	67 Neutral	$1.41B	5.72	14.81%	1.23%	9.00%	-14.72%
Sector *	64 Neutral	$12.54B	9.79	7.92%	16985.69%	12.58%	-6.07%

Merchants Bancorp Corporate Events

Merchants Bancorp Appoints New Chief Accounting Officer

On March 17, 2025, Merchants Bancorp appointed Darin Thomas as its Chief Accounting Officer, taking over the principal accounting officer responsibilities from the current CFO, Sean A. Sievers. Mr. Thomas, previously a Controller at Barclays’ United States Consumer Bank, brings extensive experience in financial processes, which could enhance the company’s financial management and reporting capabilities.