It’s not easy in today’s low-interest-rate environment to find preferreds that offer attractive yields and good value. This one has current yield of 5.71%. At the current price of $26.25 it is meaningfully below our Fair Value estimate of $26.80, suggests Marty Fridson, editor of Fridson/Forbes Income Securities Investor.
Merchants Bancorp (MBIN) is a community bank holding company and the parent of Merchants Bank of Indiana. As of 06/30/21 MBIN had approximately $10.0 billion in total assets.
The company operates multiple lines of business that include multi-family lending, healthcare facility financing, mortgage warehouse financing, retail and correspondent residential mortgage banking, agricultural lending, and traditional community banking services.
Merchants Bancorp; 6.00% Fixed Rate, Non-Cumulative, Series C Perpetual (MBINN) is callable on 04/01/26, or any dividend payment date thereafter, at par plus any declared and unpaid dividends.
Profitability and financial strength have been on the upswing at Merchants Bancorp. In 3Q 2021, return on assets increased to 2.26% from 1.90% in the year-earlier period. Total debt/earnings before interest and taxes declined to 2.59x from 7.99x.
Exchange: NASDAQ. Annual Cash Dividend: $1.50. Pay Cycle: Quarterly. CUSIP: 58844R702. Website: (www.merchantsbankofindiana.com).
MBIN’s preferred dividends are qualified and taxed at the 15%-20% rate. This investment is suitable for medium-risk taxable portfolios.