Company: MBINL
Filing Date: 2025-02-14
Form Type: CORRESP
Source: 0001104659-25-013544
Chunk: 1

Company: Merchants Bancorp
Filing Date: 2025-02-14
Form: CORRESP
Chunk 1
---
                                                                
 Blvd., Carmel, IN 46032 | PHONE 317.324.4660 | WEB www.bankmerchants.com |

Response:

While the Multi-family and Healthcare financing loan portfolios are
national in scope, there are no material concentrations by industry. However, future filings will contain geographic concentrations for
these portfolios, and we will monitor for emerging industry concentrations, if any, for future disclosure.

Note 14-Credit Linked Notes, page 110

3. We note your disclosure of the credit linked notes issued in 2023. Please tell us how you considered the disclosures required under ASC 815-10-50-4K regarding any credit derivatives or embedded credit derivatives, such as the maximum potential amount of future payments (undiscounted) that you could be required to make under the credit derivative and the fair value of the credit derivative as of the balance sheet date. Please also revise future filings, if necessary.

Response:

The disclosures required under ASC 815-10-50-4K were considered as
they pertain to the credit linked note that was executed in 2023. However, the Company was the buyer of credit protection rather than
the seller of the credit protection, as we will be receiving a reduction in the principal amount of the note in the event of defaults
in the referenced portfolio. Therefore, in accordance with ASC 815-10-50-4J, management believes these disclosures are not applicable.

Form 10-Q for the Quarterly Period Ended September 30, 2024

Condensed Consolidated Statements of Income, page 4

4. We note you disclosed $16.1 million in losses on derivative put options in Note 8 for the quarter ended September 30, 2024. In future filings, please separately disclose this loss on the face of the consolidated statements of income in the other income section. We note Item 14 of Rule 9-04 of Regulation S-X.

Noninterest Income, page 60.

Response:

By design, the derivative put options provide substantially equal and
offsetting protection for changes in fair value on certain securities available for sale that the Company elected to account for under
the fair value option, with changes in fair value reflected in earnings. The gain in fair value on the security was $16.9 million, while
the loss in fair value on the related put option derivative was $16.9 million, both of which were recorded in Other Noninterest Income
on the Statement of Income, resulting in no net