Carmel-based Merchants Bancorp plans state’s first IPO since 2013

Carmel-based Merchants Bancorp late Monday filed for an initial public offering and said it hopes to raise $115 million.

If successful, the IPO would be the first for an Indiana-based company in four years.

Merchants Bancorp, the holding company for Merchants Bank of Indiana, intends to list its stock on the NASDAQ Capital Market under the ticker symbol MBIN.

Michael Petrie and Randall Rogers, alums of the former Merchants National Bank in Indianapolis, launched the business as P/R Mortgage in 1990, a year before that bank was acquired by Cleveland-based National City Corp. They decided to revive the Merchants moniker in 2009 after acquiring Greensfork Township State Bank in Lynn and Symphony Bank in Indianapolis.

The company, which started out as a mortgage banker focused on multifamily housing and senior living properties, over the years branched into other business lines, including health care facility financing, retail and residential mortgage banking, agricultural lending and community banking.

IBJ was unable to reach Merchants for comment late Monday.

The filing shows Merchants Bancorp has grown rapidly, with assets increasing from $936 million at the end of 2012 to $3.1 billion as of June 30. It employs 157 and has $2.8 billion in deposits and $227 million of shareholders’ equity.

The bank said the growth has come mostly from P/R Mortgage, whose activities include multifamily rental housing mortgages and health care facility financing and servicing; and from warehouse lending. It launched that business line, under which it provides lines of credit to mortgage originators, in 2009, in the aftermath of the Great Recession.

The company’s annual earnings have fluctuated significantly over the past five years, from a high of $43.1 million in 2012 to as low as $3.8 million in 2014. Its profit last year was $33.1 million.

Merchants Bancorp said it plans to use a portion of the IPO proceeds to buy Joy, Illinois-based Joy State Bank for $5.4 million.

Merchants agreed to buy Joy last year but later pulled out because "the timing and approval of the transaction was uncertain due to our capital position," the IPO filing says. Instead, Petrie and Rogers bought Joy in a deal that closed in May. Merchants plans to use IPO proceeds to acquire their shares.

Petrie, 63, is chairman and CEO of Merchants Bancorp, while Rogers, 71, is president and chief operating officer. The pair together own nearly 92 percent of the company.

With its plans to go public, Merchants Bank is an outlier among Hoosier companies: So far this year, no other Indiana-based company has signaled its intent to go public.

The state’s last IPOs occurred in 2013, when Indianapolis-based Stonegate Mortgage and Evansville-based financial company Springleaf Holdings Inc. went public. 

Stonegate’s run as a public company ended this year, when Michigan-based Home Point Financial Corp. bought it for $211 million. Springleaf changed its name to OneMain Holdings Inc. in 2015 after it acquired Maryland-based OneMain Financial.

Merchants Bancorp's IPO filing says the underwriters on its offering are Sandler O'Neill Partners LP, Stephens Inc., Raymond James and SunTrust Robinson Humphrey.

Its bankers are Indianapolis-based Krieg DeVault LLP and Washington, D.C.-based Covington & Burling LLP.


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