Merchants Bancorp shares rise in trading debut after IPO

Shares of Carmel-based Merchants Bancorp made their debut on the Nasdaq stock market and rose 5 percent Friday morning as the bank became the first central Indiana firm to go public since 2013.

The firm raised $100 million in its initial public offering on Thursday, selling 6.25 million shares at $16 apiece. That was a bit below the $17 to $19 per share range it had initially expected.

Under the ticker symbol MBIN, Merchants’ shares reached $16.80 late Friday morning. Chairman and CEO Michael F. Petrie was expected to ring Nasdaq's closing bell in the afternoon.

Merchants Bancorp is the holding company for Merchants Bank of Indiana. 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.

Merchants’ filing in September for its IPO shows the firm 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 has 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.

Rogers, 71, and Petrie, 63, together own nearly 92 percent of Merchants. Rogers is president and chief operating officer.

Central Indiana’s last IPO occurred in 2013, when Indianapolis-based Stonegate Mortgage went public. Stonegate’s run as a public company ended this year, when Michigan-based Home Point Financial Corp. bought it for $211 million.