Merchants Bancorp Segments Disclosure
Note 23: Segment Information
For the year ended December 31, 2024, the Company adopted ASU 2023-07 - Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures that required disclosures to include additional details on reportable segments so financial statement users may better understand an entity’s overall performance and assist in assessing potential future cash flows. The new guidance required public entities to present information regarding significant segment expenses that are regularly provided to the CODM as well as details regarding segment’s profit and loss. The update did not have a material impact on the Company’s financial position or results of operations but did require the expansion of the segment disclosures below.
The Company’s three reportable business segments are defined as Multi-family Mortgage Banking, Mortgage Warehousing, and Banking. The reportable business segments are consistent with the internal reporting and evaluation of the principal lines of business of the Company. The Multi-family Mortgage Banking segment originates and services government sponsored mortgages for multi-family and healthcare facilities. It is also a fully integrated syndicator of low-income housing tax credit and debt funds. The Mortgage Warehousing segment funds agency eligible residential loans from the date of origination or purchase, until the date of sale in the secondary market, as well as commercial loans to non-depository financial institutions. The Banking segment provides a wide range of financial products and services to consumers and businesses, including retail banking, commercial lending, agricultural lending, retail and correspondent residential mortgage banking, and SBA lending. The Other segment includes general and administrative expenses that provide services to all segments; internal funds transfer pricing offsets resulting from allocations to/from the other segments, certain elimination entries and investments in qualified affordable housing limited partnerships or LLCs and certain debt funds. All operations are domestic.
The Company’s segments diversify the net income of Merchants Bank and provide synergies across the segments. Strategic opportunities come from MCC and MCS, where loans are funded by the Banking segment and the Banking segment provides Ginnie Mae custodial services to MCC and MCS. Low-income tax credit syndication and debt fund offerings complement the lending activities of new and existing multi-family mortgage customers. The securities available for sale and held to maturity funded by MCC custodial deposits or purchases of securitized loans originated by MCC are pledged to the FHLB to provide borrowing capacity during periods of high residential loan volume for Mortgage Warehousing. Mortgage Warehousing provides leads to Correspondent Lending in the Banking segment. Retail and commercial customers provide cross selling opportunities within the Banking segment. Merchants Mortgage is a risk mitigant to Mortgage Warehousing because it provides the Company with a ready platform to sell or refinance the underlying collateral to secure repayment. These and other synergies form a part of the Company’s strategic plan.
The reportable business segments are strategic business units that offer distinct, but complimentary, products and services. Due to the specialized nature of each segment and different resource requirements, they are managed
separately. The accounting policies of the segments are the same as those described in the summary of significant accounting policies. See Note 1: Nature of Operations and Summary of Significant Accounting Policies for more details.
The Company’s CODM is the president and chief operating officer. The CODM evaluates performance for all reportable segments based on net interest income, noninterest income, noninterest expense, salary and employee benefits, and net income (loss). The CODM uses the above-mentioned metrics, along with total assets, in deciding how to allocate capital and both human and financial resources among the segments. Major decisions are also made with input from segment leadership, the Board, and various management committees, as appropriate.
The tables below present selected business segment financial information for the years ended December 31, 2025, 2024, and 2023.
Multi-family | |
| |||||||||||||
Mortgage | Mortgage |
| |||||||||||||
| Banking | | Warehousing | | Banking | | Other | | Total | ||||||
(In thousands) | |||||||||||||||
Year Ended December 31, 2025 | |||||||||||||||
Interest income | $ | 4,613 | $ | 413,656 | $ | 767,786 | $ | 14,796 |
| $ | 1,200,851 | ||||
Interest expense |
| 80 |
| 274,031 |
| 412,964 |
| (3,283) |
|
| 683,792 | ||||
Net interest income |
| 4,533 |
| 139,625 |
| 354,822 |
| 18,079 |
|
| 517,059 | ||||
Provision for credit losses |
| (403) |
| 3,020 |
| 115,137 |
| — |
|
| 117,754 | ||||
Net interest income after provision for credit losses |
| 4,936 |
| 136,605 |
| 239,685 |
| 18,079 |
|
| 399,305 | ||||
Noninterest income |
| 168,874 |
| 12,596 |
| 933 |
| (18,015) |
|
| 164,388 | ||||
Noninterest expense |
| |
| |
| |
| |
|
| | ||||
Salaries and employee benefits |
| 103,504 |
| 8,107 |
| 24,765 |
| 30,136 |
|
| 166,512 | ||||
Other noninterest expense |
| 18,314 |
| 24,661 |
| 69,589 |
| 20,817 |
|
| 133,381 | ||||
Total noninterest expense |
| 121,818 |
| 32,768 |
| 94,354 |
| 50,953 |
|
| 299,893 | ||||
Income (loss) before income taxes |
| 51,992 |
| 116,433 |
| 146,264 |
| (50,889) |
|
| 263,800 | ||||
Income tax expense (benefit) |
| 11,837 |
| 19,489 |
| 24,259 |
| (10,555) |
|
| 45,030 | ||||
Net income (loss) | $ | 40,155 | $ | 96,944 | $ | 122,005 | $ | (40,334) |
| $ | 218,770 | ||||
Total assets | $ | 526,423 | $ | 7,251,653 | $ | 11,307,401 | $ | 363,466 |
| $ | 19,448,943 | ||||
Significant non-cash items: | |||||||||||||||
Included in other noninterest income: | |||||||||||||||
Servicing rights fair value adjustments | $ | 3,807 | $ | — | $ | (2,359) | $ | — |
| $ | 1,448 | ||||
Derivative fair value adjustments | — | 5,496 | — | — |
| 5,496 | |||||||||
Multi-family |
| ||||||||||||||
Mortgage | Mortgage |
| |||||||||||||
| Banking | | Warehousing | | Banking | | Other | | Total | ||||||
(In thousands) | |||||||||||||||
Year Ended December 31, 2024 | |||||||||||||||
Interest income | $ | 5,239 | $ | 391,743 | $ | 891,490 | $ | 14,248 |
| $ | 1,302,720 | ||||
Interest expense |
| 80 |
| 262,149 |
| 521,030 |
| (3,159) |
|
| 780,100 | ||||
Net interest income |
| 5,159 |
| 129,594 |
| 370,460 |
| 17,407 |
|
| 522,620 | ||||
Provision for credit losses |
| (1,003) |
| 1,466 |
| 23,815 |
| — |
|
| 24,278 | ||||
Net interest income after provision for credit losses |
| 6,162 |
| 128,128 |
| 346,645 |
| 17,407 |
|
| 498,342 | ||||
Noninterest income |
| 168,028 |
| 3,016 |
| (8,523) |
| (14,409) |
|
| 148,112 | ||||
Noninterest expense |
| |
| |
| |
| |
|
| | ||||
Salaries and employee benefits |
| 77,685 |
| 8,115 |
| 19,437 |
| 25,486 |
|
| 130,723 | ||||
Other noninterest expense |
| 20,228 |
| 13,818 |
| 43,230 |
| 15,813 |
|
| 93,089 | ||||
Total noninterest expense |
| 97,913 |
| 21,933 |
| 62,667 |
| 41,299 |
|
| 223,812 | ||||
Income (loss) before income taxes |
| 76,277 |
| 109,211 |
| 275,455 |
| (38,301) |
|
| 422,642 | ||||
Income tax expense (benefit) |
| 20,380 |
| 26,409 |
| 65,382 |
| (9,915) |
|
| 102,256 | ||||
Net income (loss) | $ | 55,897 | $ | 82,802 | $ | 210,073 | $ | (28,386) |
| $ | 320,386 | ||||
Total assets | $ | 479,099 | $ | 6,000,624 | $ | 11,761,202 | $ | 564,807 |
| $ | 18,805,732 | ||||
Significant non-cash items: | |||||||||||||||
Included in other noninterest income: | |||||||||||||||
Servicing rights fair value adjustments | $ | 20,487 | $ | — | $ | 2,222 | $ | — |
| $ | 22,709 | ||||
Derivative fair value adjustments | — | (2,533) | — | — |
| (2,533) | |||||||||
Multi-family |
| ||||||||||||||
Mortgage | Mortgage |
| |||||||||||||
| Banking | | Warehousing | | Banking | | Other | | Total | ||||||
(In thousands) | |||||||||||||||
Year Ended December 31, 2023 | |||||||||||||||
Interest income | $ | 5,718 | $ | 276,366 | $ | 789,399 | $ | 6,315 |
| $ | 1,077,798 | ||||
Interest expense |
| 52 |
| 184,486 |
| 451,952 |
| (6,763) |
|
| 629,727 | ||||
Net interest income |
| 5,666 |
| 91,880 |
| 337,447 |
| 13,078 |
|
| 448,071 | ||||
Provision for credit losses |
| — |
| 2,782 |
| 37,449 |
| — |
|
| 40,231 | ||||
Net interest income after provision for credit losses |
| 5,666 |
| 89,098 |
| 299,998 |
| 13,078 |
|
| 407,840 | ||||
Noninterest income |
| 123,980 |
| 14,315 |
| (12,527) |
| (11,100) |
|
| 114,668 | ||||
Noninterest expense |
| |
| |
| |
| |
|
| | ||||
Salaries and employee benefits |
| 64,453 |
| 6,026 |
| 16,192 |
| 21,510 |
|
| 108,181 | ||||
Other noninterest expense |
| 19,409 |
| 7,977 |
| 26,619 |
| 12,415 |
|
| 66,420 | ||||
Total noninterest expense |
| 83,862 |
| 14,003 |
| 42,811 |
| 33,925 |
|
| 174,601 | ||||
Income (loss) before income taxes |
| 45,784 |
| 89,410 |
| 244,660 |
| (31,947) |
|
| 347,907 | ||||
Income tax expense (benefit) |
| 9,311 |
| 15,885 |
| 50,262 |
| (6,785) |
|
| 68,673 | ||||
Net income (loss) | $ | 36,473 | $ | 73,525 | $ | 194,398 | $ | (25,162) |
| $ | 279,234 | ||||
Total assets | $ | 411,097 | $ | 4,522,175 | $ | 11,760,943 | $ | 258,301 |
| $ | 16,952,516 | ||||
Significant non-cash items: | |||||||||||||||
Included in other noninterest income: | |||||||||||||||
Servicing rights fair value adjustments | $ | 3,874 | $ | — | $ | 688 | $ | — |
| $ | 4,562 | ||||
Derivative fair value adjustments | — | 6,576 | — | — |
| 6,576 | |||||||||
Historical Timeline
| Fiscal Year | Filed | |
|---|---|---|
| 2025 | Feb 27, 2026 | Showing above |
| 2024 | Feb 28, 2025 | |
| 2023 | Mar 12, 2024 | |
| 2022 | Mar 16, 2023 | |
| 2021 | Mar 4, 2022 | |
| 2020 | Mar 5, 2021 | |
| 2019 | Mar 16, 2020 | |
| 2018 | Mar 15, 2019 | |
| 2017 | Mar 28, 2018 | |
About Segments Disclosures
Segment disclosures break a company into its reportable operating units, revealing revenue, profit, and asset allocation that consolidated financial statements obscure. Under ASC 280, segments must match how the chief operating decision maker views the business, providing a window into internal management structure and resource allocation priorities.
Key signals: compare segment margins to identify which units drive profitability and which destroy value. Watch for changes in the number of reportable segments — segment aggregation or disaggregation often coincides with strategic shifts or attempts to obscure declining performance. Intersegment elimination patterns reveal internal pricing practices. The reconciliation between segment totals and consolidated figures exposes corporate overhead allocation and unallocated items. Geographic revenue concentration highlights regulatory and currency exposure. Compare segment-level capital expenditure against segment revenue to assess where management is investing for future growth versus harvesting existing assets.