StockStory Questions Merchants Bancorp’s Growth and Capital Position

Merchants Bancorp shares gained 10.8% over six months but trailed the S&P 500’s 16.6% return, according to StockStory. The publisher said slowing revenue growth and the bank’s capital position underpin its cautious view.

Annualized revenue growth was 5.6% over the past two years, below the company’s five-year trend, StockStory said. The publisher also reported an average Tier 1 capital ratio of 9.4% across that period, which it called unsafe if economic or market conditions deteriorate.

The article says rules require a 4.5% minimum, with added buffers meaning firms generally need to maintain 7% to 10%, depending on scale, risk profile and other classifications. StockStory said Merchants Bancorp trades at 1.1 times forward price-to-book, with shares at $49.03 in the article. It called the valuation fair but said potential upside was limited relative to downside.