Merchants Bancorp Reports Third Quarter of 2026 Results

Core deposits represented 95% of total deposits, compared with 91% at June 30 and 87% at December 31, 2025.

Rhea-AI Summary

Merchants Bancorp (MBIN) reported third-quarter 2026 net income of $105.2 million, up 92% from the same quarter a year earlier. Diluted earnings per common share rose 112% year over year to $2.06. Net income increased 34% from the second quarter. Results included positive fair value adjustments of $28.2 million on servicing rights and $19.1 million on floor derivatives. Net interest income rose 13% year over year to $144.2 million.

Nonperforming loans fell 12% from June 30 to $180.3 million, while criticized loans rose 3% to $460.1 million. Deposits reached $15.0 billion, up 6% sequentially; available liquidity totaled $13.0 billion. Tangible book value per common share reached $41.64, up 15% year over year. Merchants acquired The Loan Exchange on September 14, 2026, for $13.9 million. The company expects elevated operating expenses during the initial ramp-up, with possible earnings dilution.

26 points · 1 major

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Positive

• Major pointThird-quarter net income of $105.2 million increased 92% year over year and 34% sequentially.
• Moderate pointNet interest income of $144.2 million rose 13% year over year and 6% sequentially.
• Moderate pointNoninterest income of $80.8 million increased 88% year over year and 77% sequentially.
• Moderate pointEfficiency ratio of 35.35% improved from 45.16% a year earlier and 40.20% in the second quarter.
• Moderate pointTangible book value per common share of $41.64 increased 15% year over year and 4% sequentially.
• Moderate pointNonperforming loans of $180.3 million decreased 12% from June 30 and 9% from December 31, 2025.
• Moderate pointCharge-offs of $3.9 million fell from $16.5 million sequentially and $29.5 million a year earlier.
• Moderate pointCredit-loss provision of $12.0 million decreased $17.2 million year over year but increased $2.8 million sequentially.
• Moderate pointTotal deposits of $15.0 billion increased 6% from June 30 and 15% from December 31, 2025.
• Moderate pointCore deposits of $14.3 billion increased 11% sequentially and 27% since year-end, reaching 95% of deposits.
• Moderate pointAvailable liquidity of $13.0 billion represented 62% of total assets at September 30, 2026.

15 minor points

• Minor pointDiluted EPS of $2.06 increased 112% year over year and 39% sequentially.
• Minor pointNet interest margin of 2.83% increased one basis point year over year and two basis points sequentially.
• Minor pointInterest rate spread of 2.44% increased 11 basis points year over year.
• Minor pointServicing-rights valuation gain of $28.2 million compared with a $2.1 million gain a year earlier.
• Minor pointFloor-derivative valuation gain of $19.1 million compared with a $770,000 loss a year earlier.
• Minor pointSpecial-mention loans, an early credit-warning category, fell to $181.4 million, down 16% sequentially and 11% since year-end.
• Minor pointBrokered deposits of $723.5 million decreased 44% from June 30 and 59% from December 31, 2025.
• Minor pointUnused borrowing capacity of $6.3 billion increased from $5.5 billion sequentially and $5.3 billion at year-end.
• Minor pointTotal risk-based capital ratio was 13.3% at September 30, 2026.
• Minor point. Forward-looking: it has not happened yet and may not happen.The Loan Exchange acquisition closed for $13.9 million; Merchants intends to expand mortgage production and jumbo lending.
• Minor pointInterest expense of $167.0 million decreased 4% year over year.
• Minor pointCertificate-of-deposit rates of 3.85% decreased 72 basis points year over year.
• Minor pointInterest-bearing checking rates of 3.52% decreased 50 basis points year over year.
• Minor pointDeposit insurance expense decreased $3.4 million year over year.
• Minor pointProfessional fees decreased $1.6 million year over year.

Negative

• Moderate pointCriticized loans, indicating credit concerns, reached $460.1 million, up 3% sequentially but down 9% since year-end.
• Moderate pointSubstandard loans increased $48.8 million from June 30, primarily reflecting migration within criticized classifications.
• Moderate pointLoan-loss allowance of $82.1 million rose 8% sequentially, primarily reflecting higher specific reserves and interest-rate-related adjustments.
• Moderate pointGain on sale of loans decreased $5.6 million, or 23%, year over year.
• Moderate pointNoninterest expense of $79.5 million increased 3% year over year and 9% sequentially.
• Moderate pointIncome-tax provision increased $18.4 million, or 186%, year over year and $6.8 million, or 31%, sequentially.
• Moderate pointLoan and held-for-sale loan yields of 6.40% decreased 48 basis points year over year.
• Moderate pointInterest expense increased $9.5 million, or 6%, from the second quarter.

4 minor points

• Minor pointDelinquent loans of $215.6 million increased 4% from June 30, primarily in the single-family portfolio.
• Minor point. Forward-looking: it has not happened yet and may not happen.The Loan Exchange operations are expected to elevate expenses and may dilute earnings during the initial ramp-up.
• Minor pointCredit risk transfer premium expense increased $2.9 million year over year.
• Minor pointInterest-earning deposit and other interest or dividend yields of 4.63% decreased 111 basis points year over year.

Key Figures

Net income: $105.2 million Diluted EPS: $2.06 Tangible book value per common share: $41.64 +5 more

Net income

$105.2 million

Q3 2026; up 92% year over year and 34% sequentially

Diluted EPS

$2.06

Q3 2026; up 112% year over year and 39% sequentially

Tangible book value per common share

$41.64

Record high for the 31st consecutive quarter

Provision for credit losses

$12.0 million

Q3 2026; down $17.2 million year over year

Available liquidity

$13.0 billion, or 62% of total assets

As of September 30, 2026

Servicing-rights fair value adjustment

$28.2 million

Q3 2026; positive adjustment to servicing rights

Floor-derivative fair value adjustment

$19.1 million

Q3 2026; positive adjustment to floor derivatives

The Loan Exchange acquisition consideration

$13.9 million

Acquisition completed September 14, 2026

Historical Context

2 past events · Latest: Jul 28

2 events

1. Jul 28

   2Q26 earnings

   24h Move

   +11.3%

   Net income and diluted EPS rose year over year, with lower credit-loss provision.

2. Apr 28

   1Q26 earnings

   24h Move

   -9.3%

   Reported $67.7 million net income and $1.25 diluted EPS, with criticized loans down 31%.

24h Move is the share-price change in the day after each event; other market factors may also have contributed.

Key Terms

net interest margin, credit default swaps, securitization, floor derivatives, +1 more

5 terms

net interest margin financial

"Net interest margin of 2.83% increased one basis point compared to 2.82%."

Net interest margin measures how much a bank earns from lending and investing compared with what it pays for funding, expressed as a percentage of its interest-earning assets. Think of it like a grocery store’s markup: it shows the gap between buying cost and selling price per dollar of goods — here, the cost is interest paid and the sale is interest received. Investors watch it because a higher margin usually means a bank is more profitable and better at managing interest rate and credit conditions.

credit default swaps financial

"As of September 30, 2026, 6% of the criticized loans were covered by credit default swaps."

A credit default swap is a contract where one party pays a regular fee to another in exchange for a payout if a borrower (like a company or government) fails to repay its debt—think of it as an insurance policy on a loan. Investors use these contracts to protect against losses, to express views on a borrower’s financial health, or to speculate, and heavy buying or selling of this protection can change bond prices and signal rising or falling credit risk.

securitization financial

"The Company has taken additional steps to reduce credit risk through loan sale and securitization activities since 2019."

Securitization is when a bank or company takes a bunch of loans or assets, like mortgages or car loans, and bundles them together into a single package. They then sell pieces of this package to investors, who receive regular payments from the borrowers. This process helps the original lender get money quickly and spreads the risk among many investors.

floor derivatives financial

"Other noninterest income included a $19.1 million positive fair value adjustment to floor derivatives"

A floor derivative is a financial contract that guarantees a minimum interest payment by paying the holder whenever a reference interest rate falls below an agreed level. Think of it like insurance that tops up interest income when rates drop, helping investors or lenders protect cash flow and the value of income-sensitive positions. Its cost and payoff affect portfolio risk and yield calculations.

special mention financial

"Loans classified as special mention, which often serve as an earlier-stage indicator of potential credit deterioration"

A supervisory credit classification used by banks and regulators to flag a loan, asset, or borrower that shows potential weakness or risk that could lead to deterioration if not corrected; it means the problem is not yet severe enough to be classified as substandard, doubtful, or nonperforming but requires closer monitoring and possibly corrective action. The designation prompts more frequent review and documentation by the lender and can be escalated to a more adverse classification if the borrower’s condition worsens or mitigating steps are not taken.

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• Net income of $105.2 million in the third quarter of 2026 increased $50.5 million, or 92%, compared to the third quarter of 2025, and increased $26.9 million, or 34%, compared to the second quarter of 2026.
• Diluted earnings per common share of $2.06 in the third quarter of 2026 increased 112% compared to the third quarter of 2025 and increased 39% compared to the second quarter of 2026.
• Tangible book value per common share increased to $41.64, a record high for the 31st consecutive quarter, rising 15% from $36.31 at September 30, 2025, and 4% from $39.93 at June 30, 2026.
• Total assets were $20.9 billion at September 30, 2026, a decrease of 2% from June 30, 2026, and an increase of 7% from December 31, 2025.
• Available liquidity remained strong at $13.0 billion, or 62% of total assets, supported by $6.3 billion of unused borrowing capacity with the Federal Home Loan Bank and Federal Reserve Discount Window and a diversified mix of highly liquid assets.
• Capital ratios remained strong, with a total risk-based capital ratio of 13.3%, reflecting the Company's continued emphasis on financial strength and balance sheet resilience.
• Results benefited from positive fair value adjustments in noninterest income, including $28.2 million from servicing rights and $19.1 million from a floor derivative, reflecting the natural hedge within the Company's diversified business model. As higher rates pressure mortgage production and gain on sale revenue, they generally support servicing and derivative valuations.
• The efficiency ratio of 35.35% in the third quarter of 2026 decreased compared to 45.16% in the third quarter of 2025 and 40.20% in the second quarter of 2026, reflecting the positive valuation adjustments in noninterest income.
• Nonperforming loans decreased $25.4 million, or 12%, to $180.3 million from June 30, 2026, while criticized loans increased $15.4 million, or 3%, to $460.1 million. Compared with December 31, 2025, nonperforming loans decreased $17.5 million, or 9%, and criticized loans decreased $48.1 million, or 9%.
• The provision for credit losses was $12.0 million, a decrease of $17.2 million from the third quarter of 2025 and an increase of $2.8 million from the second quarter of 2026, primarily reflecting higher specific reserves. Charge-offs were $3.9 million in the third quarter of 2026, compared with $16.5 million in the second quarter of 2026 and $29.5 million in the third quarter of 2025.
• Total deposits of $15.0 billion increased $787.5 million, or 6%, from June 30, 2026 and $2.0 billion, or 15%, from December 31, 2025. Core deposits of $14.3 billion increased $1.4 billion, or 11%, from June 30, 2026, and represented 95% of total deposits.
• On September 14, 2026, the Company acquired The Loan Exchange for total consideration of $13.9 million, resulting in the recognition of approximately $11.1 million of goodwill. During the initial ramp-up period, the acquired operations are expected to result in elevated operating expenses and may be dilutive to earnings as production increases and integration activities progress. The acquisition is intended to enhance the Company's single-family mortgage production platform, provide additional opportunities to generate gain on sale revenue and expand its footprint in the jumbo lending market.

CARMEL, Ind., Oct. 28, 2026 /PRNewswire/ -- Merchants Bancorp (the "Company" or "Merchants") (Nasdaq: MBIN), parent company of Merchants Bank, today reported third quarter of 2026 net income of $105.2 million, or diluted earnings per common share of $2.06. This compared to $54.7 million, or diluted earnings per common share of $0.97 in the third quarter of 2025, and compared to $78.3 million, or diluted earnings per common share of $1.48 in the second quarter of 2026.

"Our third-quarter results demonstrate the strength of our diversified business model and disciplined execution across the Company. Earnings increased significantly, tangible book value per common share reached a record high for the 31st consecutive quarter, and we reported lower nonperforming loans and substantially lower charge-offs. While we remain focused on the migration within criticized loan classifications, our strong capital and liquidity position provides the flexibility to support our clients and pursue disciplined growth," said Michael F. Petrie, Chairman and CEO of Merchants.

Michael J. Dunlap, President and Chief Operating Officer of Merchants, added, "We delivered strong operating performance during the quarter, with higher servicing rights and derivative valuations that provide an earnings hedge to pressure on gain on sale revenue in the current interest rate environment. Our recently completed acquisition expands our single-family mortgage production capabilities and presence in jumbo lending, creating additional opportunities to generate gain on sale revenue as the platform scales. Although the acquired operations may be dilutive during the initial ramp-up period, we remain focused on effective integration and believe the transaction will support earnings growth over time."

Net income for the third quarter of 2026 was $105.2 million, an increase of $50.5 million, or 92%, compared to $54.7 million in the third quarter of 2025. The increase was driven by a $37.8 million, or 88%, increase in noninterest income, and a $33.3 million, or 34%, increase in net interest income after provision for credit losses. These were partially offset by an $18.4 million, or 186%, increase in provision for income taxes, and a $2.3 million, or 3% increase in noninterest expense.

Net income for the third quarter of 2026 increased $26.9 million, or 34%, from $78.3 million in the second quarter of 2026. The improvement was primarily driven by a $35.1 million, or 77%, increase in noninterest income, which was partially offset by a $6.8 million, or 31%, increase in provision for income taxes, and a $6.3 million, or 9%, increase in noninterest expense.

Total Assets

Total assets of $20.9 billion at September 30, 2026 decreased $346.5 million, or 2%, compared to June 30, 2026, and increased $1.4 billion, or 7%, compared to December 31, 2025. The increase compared to December 31, 2025 was primarily due to higher balances in the multi-family portfolio, revolving lines of credit collateralized by mortgage servicing rights that are included in the commercial and commercial real estate portfolio, and the warehouse portfolio.

Asset Quality

As of September 30, 2026, the allowance for credit losses on loans was $82.1 million. The allowance increased $6.3 million, or 8%, from June 30, 2026, primarily due to higher specific reserves and adjustments to qualitative factors related to rising interest rates. Compared with December 31, 2025, the allowance decreased $1.2 million, or 1%.

During the third quarter of 2026, the Company recorded $3.9 million of charge-offs and $0.2 million of recoveries, compared with $16.5 million of charge-offs and $4.8 million of recoveries in the second quarter of 2026 and $29.5 million of charge-offs and $23,000 of recoveries in the third quarter of 2025.

As of September 30, 2026, nonperforming loans were $180.3 million, or 1.47% of loans receivable, compared with $205.6 million, or 1.67%, as of June 30, 2026, and $197.8 million, or 1.79%, as of December 31, 2025. Nonperforming loans decreased $25.4 million, or 12%, from June 30, 2026, primarily due to loan payoffs and the transfer of one loan to other real estate owned.

Overall, criticized loans receivable of $460.1 million increased $15.4 million, or 3%, compared to June 30, 2026, and decreased $48.1 million, or 9%, compared to December 31, 2025. As of September 30, 2026, 6% of the criticized loans were covered by credit default swaps.

Loans classified as special mention, which often serve as an earlier-stage indicator of potential credit deterioration, declined to $181.4 million as of September 30, 2026, from $214.8 million as of June 30, 2026 and $204.9 million as of December 31, 2025. The decreases of $33.4 million, or 16%, from June 30, 2026 and $23.5 million, or 11%, from December 31, 2025 indicate moderation in earlier-stage criticized classifications. Substandard loans increased $48.8 million from June 30, 2026, primarily reflecting migration within criticized classifications, and contributed to the sequential increase in total criticized loans. Management continues to monitor these relationships individually, including borrower performance, collateral values, and expected resolution strategies.

As of September 30, 2026, all substandard loans have been individually evaluated for expected credit losses, resulting in specific reserves of $6.6 million. Based on its current evaluations, the Company believes the loan portfolio remains well collateralized.

Total delinquent loans of $215.6 million increased $7.6 million, or 4%, compared to June 30, 2026, primarily in the single-family portfolio, while delinquency in the multi-family portfolio declined. As of September 30, 2026, 10% of the delinquent loans were covered by credit default swaps.

The Company has taken additional steps to reduce credit risk through loan sale and securitization activities since 2019. Since 2023, the Company has also entered into credit protection arrangements through credit default swaps and a credit-linked note to reduce potential loss exposure, with coverage ranging from 13% to 15% of the unpaid principal balance for each arrangement. Although these loans are subject to credit protection, the Company is required to maintain an allowance for credit losses on loans held for investment. As of September 30, 2026, the remaining balance of loans protected by credit default swaps was $2.1 billion.

Total Deposits

Total deposits of $15.0 billion at September 30, 2026, increased $787.5 million, or 6%, compared to June 30, 2026, and $2.0 billion, or 15%, compared to December 31, 2025. The increase in both periods primarily reflected the growth in core deposits.

Core deposits of $14.3 billion at September 30, 2026, reflected increases of $1.4 billion, or 11%, from June 30, 2026, and $3.0 billion, or 27%, from December 31, 2025. Core deposits represented 95% of total deposits at September 30, 2026, 91% of total deposits at June 30, 2026, and 87% of total deposits at December 31, 2025.

Brokered deposits of $723.5 million at September 30, 2026 decreased $574.3 million, or 44%, from June 30, 2026, and $1.0 billion, or 59%, from December 31, 2025. As of September 30, 2026, brokered certificates of deposit had a weighted average remaining maturity of 41 days.

Liquidity

The Company maintained strong liquidity, supported by substantial borrowing capacity, including unused lines of credit totaling $6.3 billion as of September 30, 2026, compared to $5.5 billion at June 30, 2026, and $5.3 billion at December 31, 2025.

The Company's most liquid assets include cash and cash equivalents, short-term investments, including interest-earning demand deposits, mortgage loans in process of securitization, loans held for sale, and warehouse lines of credit included in loans receivable. Combined with unused borrowing capacity of $6.3 billion, these totaled $13.0 billion, or 62%, of its $20.9 billion of total assets as of September 30, 2026.

This liquidity position provides the Company with flexibility to manage funding costs, interest expense, and asset levels. In addition, the Company's business model is designed to continuously sell or securitize a significant portion of its loans, which provides flexibility in managing its liquidity.

Comparison of Operating Results for the Three Months Ended

September 30, 2026 and 2025

Net Interest Income of $144.2 million increased $16.1 million, or 13%, compared to $128.1 million. The increase reflected a $9.4 million, or 3%, increase in interest income and a $6.7 million, or 4%, decrease in interest expense.

• Net interest margin of 2.83% increased one basis point compared to 2.82%.
• Interest rate spread of 2.44% increased 11 basis points compared to 2.33%.

Interest Income of $311.2 million increased $9.4 million, or 3%, from $301.8 million. The increase primarily reflected higher average balances of loans and loans held for sale and of interest-earning deposits, and other interest or dividends, partially offset by lower average yields.

• Average balances of $16.2 billion for loans and loans held for sale increased 11%, compared to $14.7 billion.
• Average balances of $1.3 billion for interest-earning deposits, and other interest or dividends increased $704.4 million, or 126%, compared to $556.9 million.
• Average yields on loans and loans held for sale of 6.40% decreased 48 basis points compared to 6.88%.
• Average yields on interest-earning deposits, and other interest or dividends of 4.63% decreased 111 basis points compared to 5.74%.

Interest Expense of $167.0 million decreased $6.7 million, or 4%, compared to $173.7 million. The decrease primarily reflected lower average balances on certificates of deposit at lower rates, which were partially offset by higher average balances on interest-bearing checking accounts at lower average rates.

• Average balances of $1.1 billion for certificates of deposit decreased $1.1 billion, or 50%, compared to $2.2 billion.
• Average interest rates of 3.85% on certificates of deposit decreased 72 basis points compared to 4.57%.
• Average interest rates of 3.52% for interest-bearing checking accounts decreased 50 basis points compared to 4.02%.
• Average balances on interest-bearing checking accounts of $9.4 billion increased $1.9 billion, or 26%, compared to $7.5 billion.

Provision for Credit Losses was $12.0 million, a decrease of $17.2 million, or 59%, compared to $29.2 million, reflecting improved asset quality, including lower charge-offs.

Noninterest Income of $80.8 million increased $37.8 million, or 88%, compared to $43.0 million. The increase was primarily due to an increase of $26.2 million, or 329%, in loan servicing fees, and an increase of $16.0 million, or 426%, in other noninterest income, partially offset by a $5.6 million, or 23%, decrease in gain on sale of loans.

• Loan servicing fees included a $28.2 million positive fair value adjustment to servicing rights, with a $5.0 million positive adjustment in the Banking segment and a $23.2 million positive adjustment in the Multi-family Mortgage Banking segment. This compared to a $2.1 million positive fair value adjustment to servicing rights in the prior period with a $394,000 negative adjustment in the Banking segment and a $2.5 million positive adjustment in the Multi-family Mortgage Banking segment. Higher interest rates increased the fair value of servicing rights during the period, driven primarily by higher earnings on escrow and custodial balances. These earnings are an ongoing source of servicing income and represent a recurring economic benefit of a higher-rate environment. To a lesser degree, the increase also reflected slower expected prepayments on certain loans, which extend the period over which servicing income is earned.
• Other noninterest income included a $19.1 million positive fair value adjustment to floor derivatives, reflected in the Warehouse segment, compared to a $770,000 negative fair value adjustment in the prior period.

Noninterest Expense of $79.5 million increased $2.3 million, or 3%, from $77.3 million. The increase primarily reflected a $2.9 million increase in credit risk transfer premium expense and higher other noninterest and technology expenses, partially offset by decreases of $3.4 million in deposit insurance expense and $1.6 million in professional fees.

Comparison of Operating Results for the Three Months Ended

September 30, 2026 and June 30, 2026

Net Interest Income of $144.2 million increased $7.7 million, or 6%, compared to $136.5 million. The increase reflected a $17.1 million, or 6%, increase in interest income, partially offset by a $9.5 million, or 6%, increase in interest expense.

• Net interest margin of 2.83% increased two basis points compared to 2.81%.
• Interest rate spread of 2.44% increased one basis point compared to 2.43%.

Interest Income of $311.2 million increased $17.1 million, or 6%, from $294.1 million. The increase primarily reflected higher average yields on loans and loans held for sale, as well as higher average balances at lower yields on interest-earning deposits and other interest or dividends.

• Average yields on loans and loans held for sale of 6.40% increased 14 basis points compared to 6.26%.
• Average balances of $1.3 billion for interest-earning deposits, and other interest or dividends increased $571.8 million, or 83%, compared to $689.5 million.
• Average yields on interest-earning deposits, and other interest or dividends were 4.63%, a decrease of 86 basis points from 5.49%.

Interest Expense of $167.0 million increased $9.5 million, or 6%, compared to $157.5 million. The increase was primarily driven by higher average balances at higher average rates on interest-bearing checking accounts.

• Average balances of $9.4 billion for interest-bearing checking accounts increased $1.5 billion, or 19%, compared to $7.9 billion.
• Average interest rates on interest-bearing checking accounts of 3.52% increased by nine basis points compared to 3.43%.

Provision for Credit Losses increased $2.8 million, or 31%, to $12.0 million from $9.2 million, primarily due to higher specific reserves.

Noninterest Income of $80.8 million increased $35.1 million, or 77%, from $45.7 million. The increase reflected a $22.2 million, or 185%, increase in loan servicing fees, an $8.0 million, or 68%, increase in other noninterest income, and a $5.9 million, or 45%, increase in gain on sale of loans.

• Loan servicing fees included a $28.2 million positive fair value adjustment to servicing rights, consisting of a $5.0 million positive adjustment in the Banking segment and a $23.2 million positive adjustment in the Multi-family Mortgage Banking segment. This compared with a $6.0 million positive fair value adjustment in the prior quarter, consisting of a $1.4 million positive adjustment in the Banking segment and a $4.6 million positive adjustment in the Multi-family Mortgage Banking segment. Higher interest rates increased the fair value of servicing rights during the period, driven primarily by higher earnings on escrow and custodial balances. These earnings are an ongoing source of servicing income and represent a recurring economic benefit of a higher-rate environment. To a lesser degree, the increase also reflected slower expected prepayments on certain loans, which extend the period over which servicing income is earned.
• Other noninterest income included a $19.1 million positive fair value adjustment to floor derivatives, reflected in the Warehouse segment, compared to a $1.9 million positive fair value adjustment to derivatives in the prior period.

Noninterest Expense of $79.5 million increased $6.3 million, or 9%, from $73.2 million, primarily due to a $5.7 million increase in salaries and employee benefits, including higher commissions associated with increased production volume.

About Merchants Bancorp

Merchants Bancorp is a diversified bank holding company headquartered in Carmel, Indiana operating multiple segments, including Multi-family Mortgage Banking that primarily offers multi-family housing and healthcare facility financing and servicing (through this segment it also serves as a syndicator of low-income housing tax credit and debt funds); Mortgage Warehousing that offers mortgage warehouse financing, commercial loans, and deposit services; and Banking that offers retail and correspondent residential mortgage banking, agricultural lending, and traditional community banking. Merchants Bancorp, with $20.9 billion in assets and $15.0 billion in deposits as of September 30, 2026, conducts its business primarily through its direct and indirect subsidiaries, Merchants Bank of Indiana, Merchants Capital Corp., Merchants Capital Investments, LLC, Merchants Capital Servicing, LLC, Merchants Investment Partners, LLC, and Merchants Mortgage, a division of Merchants Bank of Indiana. For more information and financial data, please visit Merchants' Investor Relations page at investors.merchantsbancorp.com.

Forward-Looking Statements

This press release contains forward-looking statements which reflect management's current views with respect to, among other things, future events and financial performance. These statements are often, but not always, made through the use of words or phrases such as "may," "might," "should," "could," "predict," "potential," "believe," "expect," "continue," "will," "anticipate," "seek," "estimate," "intend," "plan," "projection," "goal," "target," "aim," "would," "annualized" and "outlook," or the negative version of those words or other comparable words or phrases of a future or forward-looking nature. These forward-looking statements are not historical facts, and are based on current expectations, estimates and projections about the industry, management's beliefs and certain assumptions made by management, many of which, by their nature, are inherently uncertain and beyond our control. Accordingly, management cautions that any such forward-looking statements are not guarantees of future performance and are subject to risks, assumptions, estimates and uncertainties that are difficult to predict. Although the Company believes that the expectations reflected in these forward-looking statements are reasonable as of the date made, actual results may prove to be materially different from the results expressed or implied by the forward-looking statements. A number of important factors could cause actual results to differ materially from those indicated in these forward-looking statements, including the impacts of factors identified in "Risk Factors" or "Management's Discussion and Analysis of Financial Condition and Results of Operations" in the Company's Annual Report on Form 10-K and other periodic filings with the Securities and Exchange Commission. Any forward-looking statements presented herein are made only as of the date of this press release, and the Company does not undertake any obligation to update or revise any forward-looking statements to reflect changes in assumptions, the occurrence of unanticipated events, or otherwise.

 

Consolidated Balance Sheets
(Unaudited)
(In thousands, except share data)
		September 30,			June 30,			March 31,			December 31,			September 30,
		2026			2026			2026			2025			2025
Assets
Cash and due from banks		$	11,906		$	17,875		$	19,642		$	15,844		$	11,566
Interest-earning demand accounts			307,938			296,828			63,573			196,358			586,470
Cash and cash equivalents			319,844			314,703			83,215			212,202			598,036
Securities purchased under agreements to resell			1,489			1,501			1,511			1,520			1,529
Mortgage loans in process of securitization			447,905			407,418			437,001			620,094			414,786
Securities available for sale (includes $496,567, $527,676, $550,207, $571,314 and $591,379 at fair value)			787,423			820,105			843,896			865,058			885,070
Securities held to maturity (fair value of $1,535,615, $1,353,543, $1,426,444, $1,543,554 and $1,670,306)			1,535,361			1,354,885			1,425,982			1,543,659			1,670,555
Federal Home Loan Bank (FHLB) stock and other equity securities			227,589			227,589			227,589			227,589			217,850
Loans held for sale (includes $169,774, $148,368, $163,426, $76,980 and $112,832 at fair value)			4,043,914			4,615,894			4,709,688			3,873,012			4,129,329
Loans receivable (includes $41,548, $46,024, $46,427, $47,318 and $0 at fair value), net of allowance for credit losses on loans of $82,130, $75,803, $76,831, $83,301 and $93,330			12,184,623			12,262,800			11,399,882			10,951,381			10,515,221
Premises and equipment, net			76,704			74,664			73,695			73,929			75,148
Servicing rights			267,613			236,949			229,576			217,296			213,156
Interest receivable			81,042			82,078			77,326			81,807			82,445
Goodwill			19,144			8,014			8,014			8,014			8,014
Other real estate owned			91,696			72,389			60,226			60,145			4,347
Other assets and receivables			799,152			750,993			744,181			713,237			539,161
Total assets		$	20,883,499		$	21,229,982		$	20,321,782		$	19,448,943		$	19,354,647
Liabilities and Shareholders' Equity
Liabilities
Deposits
Noninterest-bearing		$	531,108		$	606,682		$	501,864		$	604,081		$	399,814
Interest-bearing			14,510,687			13,647,632			12,449,889			12,437,111			13,534,891
Total deposits			15,041,795			14,254,314			12,951,753			13,041,192			13,934,705
Borrowings			3,017,581			4,282,597			4,773,490			3,842,592			2,902,631
Deferred and current tax liabilities, net			60,462			50,140			46,403			33,900			28,973
Other liabilities			280,364			249,127			219,833			250,500			262,904
Total liabilities			18,400,202			18,836,178			17,991,479			17,168,184			17,129,213
Commitments and  Contingencies
Shareholders' Equity
Common stock, without par value
Authorized - 75,000,000 shares
Issued and outstanding  - 45,940,371 shares, 45,938,075 shares, 45,935,408 shares, 45,893,172 shares and 45,889,238 shares			245,265			244,345			243,433			243,310			242,371
Preferred stock, without par value - 5,000,000 total shares authorized
6% Series C Preferred stock - $1,000 per share liquidation preference
Authorized - 200,000 shares
Issued and outstanding - 196,181 shares (equivalent to 7,847,233 depositary shares)			191,084			191,084			191,084			191,084			191,084
8.25% Series D Preferred stock - $1,000 per share liquidation preference
Authorized - 300,000 shares
Issued and outstanding - 142,500 shares (equivalent to 5,700,000 depositary shares)			137,459			137,459			137,459			137,459			137,459
7.625% Series E Preferred stock - $1,000 per share liquidation preference
Authorized - 230,000 shares
Issued and outstanding - 230,000 shares (equivalent to 9,200,000 depositary shares)			222,748			222,748			222,748			222,748			222,748
Retained earnings			1,689,230			1,599,367			1,536,383			1,486,191			1,431,983
Accumulated other comprehensive loss			(2,489)			(1,199)			(804)			(33)			(211)
Total shareholders' equity			2,483,297			2,393,804			2,330,303			2,280,759			2,225,434
Total liabilities and shareholders' equity		$	20,883,499		$	21,229,982		$	20,321,782		$	19,448,943		$	19,354,647

 

Consolidated Statement of Income
(Unaudited)
(In thousands, except share data)
		Three Months Ended									Change
		September 30,			June 30,			September 30,			3Q26		3Q26
		2026			2026			2025			vs. 2Q26		vs. 3Q25
Interest Income
Loans		$	261,789		$	252,546		$	254,101		4 %		3 %
Mortgage loans in process of securitization			5,240			4,455			5,308		18 %		(1) %
Investment securities:
Available for sale			9,377			9,562			11,880		(2) %		(21) %
Held to maturity			20,056			18,076			22,427		11 %		(11) %
FHLB stock and other equity securities (dividends)			4,866			4,979			4,265		(2) %		14 %
Other			9,858			4,454			3,798		121 %		160 %
Total interest income			311,186			294,072			301,779		6 %		3 %
Interest Expense
Deposits			129,627			116,839			139,744		11 %		(7) %
Short-term borrowings			34,715			37,608			25,926		(8) %		34 %
Long-term borrowings			2,675			3,089			8,051		(13) %		(67) %
Total interest expense			167,017			157,536			173,721		6 %		(4) %
Net Interest Income			144,169			136,536			128,058		6 %		13 %
Provision for credit losses			12,003			9,184			29,239		31 %		(59) %
Net Interest Income After Provision for Credit Losses			132,166			127,352			98,819		4 %		34 %
Noninterest Income
Gain on sale of loans			19,045			13,160			24,671		45 %		(23) %
Loan servicing fees, net			34,225			11,992			7,986		185 %		329 %
Mortgage warehouse fees			1,698			1,857			1,736		(9) %		(2) %
Syndication and asset management fees			6,050			6,933			4,864		(13) %		24 %
Other income			19,754			11,738			3,757		68 %		426 %
Total noninterest income			80,772			45,680			43,014		77 %		88 %
Noninterest Expense
Salaries and employee benefits			44,999			39,345			44,152		14 %		2 %
Loan expense			998			1,177			1,263		(15) %		(21) %
Occupancy and equipment			3,360			3,462			2,453		(3) %		37 %
Professional fees			1,793			3,328			3,371		(46) %		(47) %
Deposit insurance expense			5,972			5,893			9,376		1 %		(36) %
Technology expense			3,959			2,893			2,608		37 %		52 %
Credit risk transfer premium expense			7,106			6,100			4,194		16 %		69 %
Other expense			11,333			11,050			9,833		3 %		15 %
Total noninterest expense			79,520			73,248			77,250		9 %		3 %
Income Before Income Taxes			133,418			99,784			64,583		34 %		107 %
Provision for income taxes			28,237			21,481			9,882		31 %		186 %
Net Income		$	105,181		$	78,303		$	54,701		34 %		92 %
Dividends on preferred stock			(10,265)			(10,266)			(10,265)		—		—
Net Income Available to Common Shareholders		$	94,916		$	68,037		$	44,436		40 %		114 %
Basic Earnings Per Share		$	2.07		$	1.48		$	0.97		40 %		113 %
Diluted Earnings Per Share		$	2.06		$	1.48		$	0.97		39 %		112 %
Weighted-Average Shares Outstanding
Basic			45,939,123			45,936,610			45,887,143
Diluted			46,032,977			46,005,938			45,950,216

 

Consolidated Statement of Income
(Unaudited)
(In thousands, except share data)
		Nine Months Ended
		September 30,			September 30,
		2026			2025			Change
Interest Income
Loans		$	744,604		$	749,022		(1) %
Mortgage loans in process of securitization			14,082			14,355		(2) %
Investment securities:
Available for sale			28,881			36,333		(21) %
Held to maturity			57,611			69,951		(18) %
FHLB stock and other equity securities (dividends)			14,239			13,278		7 %
Other			16,352			10,443		57 %
Total interest income			875,769			893,382		(2) %
Interest Expense
Deposits			356,315			395,060		(10) %
Short-term borrowings			101,260			96,271		5 %
Long-term borrowings			8,841			23,078		(62) %
Total interest expense			466,416			514,409		(9) %
Net Interest Income			409,353			378,973		8 %
Provision for credit losses			36,486			89,993		(59) %
Net Interest Income After Provision for Credit Losses			372,867			288,980		29 %
Noninterest Income
Gain on sale of loans			45,711			59,632		(23) %
Loan servicing fees, net			61,316			18,134		238 %
Mortgage warehouse fees			5,175			5,288		(2) %
Syndication and asset management fees			16,100			17,960		(10) %
Other income			44,749			16,173		177 %
Total noninterest income			173,051			117,187		48 %
Noninterest Expense
Salaries and employee benefits			122,909			124,137		(1) %
Loan expense			3,360			3,203		5 %
Occupancy and equipment			9,903			7,298		36 %
Professional fees			7,888			9,424		(16) %
Deposit insurance expense			20,273			23,756		(15) %
Technology expense			9,531			7,428		28 %
Credit risk transfer premium expense			18,970			12,823		48 %
Other expense			35,576			28,182		26 %
Total noninterest expense			228,410			216,251		6 %
Income Before Income Taxes			317,508			189,916		67 %
Provision for income taxes			66,292			38,995		70 %
Net Income		$	251,216		$	150,921		66 %
Dividends on preferred stock			(30,796)			(30,796)		—
Impact of preferred stock redemption			—			(5,371)		(100) %
Net Income Available to Common Shareholders		$	220,420		$	114,754		92 %
Basic Earnings Per Share		$	4.80		$	2.50		92 %
Diluted Earnings Per Share		$	4.79		$	2.50		92 %
Weighted-Average Shares Outstanding
Basic			45,935,256			45,865,167
Diluted			46,012,252			45,931,518

 

Key Operating Results
(Unaudited)
($ in thousands, except share data)
		Three Months Ended										Change
		September 30,			June 30,			September 30,				3Q26		3Q26
		2026			2026			2025				vs. 2Q26		vs. 3Q25
Noninterest expense		$	79,520		$	73,248		$	77,250			9 %		3 %
Net interest income (before provision for credit losses)			144,169			136,536			128,058			6 %		13 %
Noninterest income			80,772			45,680			43,014			77 %		88 %
Total income		$	224,941		$	182,216		$	171,072			23 %		31 %
Efficiency ratio			35.35	%		40.20	%		45.16	%		(485)	bps	(981)	bps
Average assets		$	21,389,646		$	20,578,875		$	18,813,165			4 %		14 %
Net income			105,181			78,303			54,701			34 %		92 %
Return on average assets before annualizing			0.49	%		0.38	%		0.29	%
Annualization factor			4.00			4.00			4.00
Return on average assets			1.97	%		1.52	%		1.16	%		45	bps	81	bps
Return on average tangible common shareholders' equity (1)			20.11	%		14.95	%		10.69	%		516	bps	942	bps
Tangible book value per common share (1)		$	41.64		$	39.93		$	36.31			4 %		15 %
Tangible common shareholders' equity/tangible assets (1)			9.17	%		8.64	%		8.61	%		53	bps	56	bps
Consolidated ratios
Total capital/risk-weighted assets(2)			13.3	%		12.5	%		13.6	%
Tier I capital/risk-weighted assets(2)			12.8	%		12.1	%		13.0	%
Common Equity Tier I capital/risk-weighted assets(2)			9.9	%		9.3	%		9.8	%
Tier I capital/average assets(2)			11.5	%		11.6	%		11.8	%

(1)   Non-GAAP financial measure - see "Reconciliation of Non-GAAP Measures" below:
(2)   As defined by regulatory agencies; September 30, 2026 shown as estimates and prior periods shown as reported.
Certain non-GAAP financial measures provide useful information to management and investors that is supplementary to the Company's financial condition, results of operations and cash flows computed in accordance with GAAP; however, they do have a number of limitations.  As such, the reader should not view these disclosures as a substitute for results determined in accordance with GAAP, and they are not necessarily comparable  to non-GAAP financial measures that other companies use.  A reconciliation of GAAP to non-GAAP financial measures is below.  Net Income Available to Common Shareholders excludes preferred stock dividends.  Tangible common shareholders' equity is calculated by excluding the balance of goodwill and other intangible assets and preferred stock from the calculation of total equity.  Tangible assets is calculated by excluding the balance of goodwill and intangible assets.  Tangible book value per share is calculated by dividing tangible common shareholders' equity by the number of shares outstanding.

		Three Months Ended										Change
		September 30,			June 30,			September 30,				3Q26		3Q26
		2026			2026			2025				vs. 2Q26		vs. 3Q25
Average shareholders' equity		$	2,447,619		$	2,379,573		$	2,221,677			3 %		10 %
Less: average goodwill & intangibles			(8,163)			(8,043)			(8,059)			1 %		1 %
Less: average preferred stock			(551,291)			(551,291)			(551,291)			—		—
Average tangible common shareholders' equity		$	1,888,165		$	1,820,239		$	1,662,327			4 %		14 %
Annualization factor			4.00			4.00			4.00
Return on average tangible common shareholders' equity			20.11	%		14.95	%		10.69	%		516	bps	942	bps
Total equity		$	2,483,297		$	2,393,804		$	2,225,434			4 %		12 %
Less: goodwill and intangibles			(19,179)			(8,040)			(8,056)			139 %		138 %
Less: preferred stock			(551,291)			(551,291)			(551,291)			—		—
Tangible common shareholders' equity		$	1,912,827		$	1,834,473		$	1,666,087			4 %		15 %
Assets		$	20,883,499		$	21,229,982		$	19,354,647			(2) %		8 %
Less: goodwill and intangibles			(19,179)			(8,040)			(8,056)			139 %		138 %
Tangible assets		$	20,864,320		$	21,221,942		$	19,346,591			(2) %		8 %
Ending common shares			45,940,371			45,938,075			45,889,238
Tangible book value per common share		$	41.64		$	39.93		$	36.31			4 %		15 %
Tangible common shareholders' equity/tangible assets			9.17	%		8.64	%		8.61	%		53	bps	56	bps

 

Key Operating Results
(Unaudited)
($ in thousands, except share data)
		Nine Months Ended
		September 30,				September 30,
		2026				2025				Change
Noninterest expense		$	228,410			$	216,251			6 %
Net interest income (before provision for credit losses)			409,353				378,973			8 %
Noninterest income			173,051				117,187			48 %
Total income		$	582,404			$	496,160			17 %
Efficiency ratio			39.22	%			43.58	%		(436)	bps
Average assets		$	20,316,082			$	18,546,941			10 %
Net income			251,216				150,921			66 %
Return on average assets before annualizing			1.24	%			0.81	%
Annualization factor			1.33				1.33
Return on average assets			1.64	%			1.08	%		56	bps
Return on average tangible common shareholders' equity (1)			16.06	%			9.33	%		673	bps
Tangible book value per common share (1)		$	41.64			$	36.31			15 %
Tangible common shareholders' equity/tangible assets (1)			9.17	%			8.61	%		56	bps

 

(1) Non-GAAP financial measure - see "Reconciliation of Non-GAAP Measures" below:
Certain non-GAAP financial measures provide useful information to management and investors that is supplementary to the Company's financial condition, results of operations and cash flows computed in accordance with GAAP; however, they do have a number of limitations.  As such, the reader should not view these disclosures as a substitute for results determined in accordance with GAAP, and they are not necessarily comparable to non-GAAP financial measures that other companies use.  A reconciliation of GAAP to non-GAAP financial measures is below.  Net Income Available to Common Shareholders excludes preferred stock dividends.  Tangible common shareholders' equity is calculated by excluding the balance of goodwill and other intangible assets and preferred stock from the calculation of total equity.  Tangible assets is calculated by excluding the balance of goodwill and intangible assets.  Tangible book value per share is calculated by dividing tangible common shareholders' equity by the number of shares outstanding.

		Nine Months Ended
		September 30,				September 30,
		2026				2025				Change
Average shareholders' equity		$	2,384,971			$	2,194,786			9 %
Less: average goodwill & intangibles			(8,085)				(8,065)			—
Less: average preferred stock			(551,291)				(551,733)			—
Average tangible common shareholders' equity		$	1,825,595			$	1,634,988			12 %
Annualization factor			1.33				1.33
Return on average tangible common shareholders' equity			16.06	%			9.33	%		673	bps
Total equity		$	2,483,297			$	2,225,434			12 %
Less: goodwill and intangibles			(19,179)				(8,056)			138 %
Less: preferred stock			(551,291)				(551,291)			—
Tangible common shareholders' equity		$	1,912,827			$	1,666,087			15 %
Assets		$	20,883,499			$	19,354,647			8 %
Less: goodwill and intangibles			(19,179)				(8,056)			138 %
Tangible assets		$	20,864,320			$	19,346,591			8 %
Ending common shares			45,940,371				45,889,238
Tangible book value per common share		$	41.64			$	36.31			15 %
Tangible common shareholders' equity/tangible assets			9.17	%			8.61	%		56	bps

 

Merchants Bancorp
Average Balance Analysis
($ in thousands)
(Unaudited)
	Three Months Ended
	September 30, 2026						June 30, 2026						September 30, 2025
		Average			Yield/			Average			Yield/			Average			Yield/
		Balance		Interest	Rate			Balance		Interest	Rate			Balance		Interest	Rate
Assets:
Interest-earning deposits, and other interest or dividends	$	1,261,259	$	14,724	4.63 %		$	689,479	$	9,433	5.49 %		$	556,894	$	8,063	5.74 %
Securities available for sale		811,347		9,377	4.59 %			832,715		9,562	4.61 %			923,603		11,880	5.10 %
Securities held to maturity		1,547,486		20,056	5.14 %			1,398,098		18,076	5.19 %			1,510,857		22,427	5.89 %
Mortgage loans in process of securitization		385,028		5,240	5.40 %			353,297		4,455	5.06 %			395,388		5,308	5.33 %
Loans and loans held for sale		16,223,620		261,789	6.40 %			16,185,486		252,546	6.26 %			14,654,535		254,101	6.88 %
Total interest-earning assets		20,228,740		311,186	6.10 %			19,459,075		294,072	6.06 %			18,041,277		301,779	6.64 %
Allowance for credit losses on loans		(75,220)						(80,566)						(105,347)
Noninterest-earning assets		1,236,126						1,200,366						877,235
Total assets	$	21,389,646					$	20,578,875					$	18,813,165
Liabilities & Shareholders' Equity:
Interest-bearing checking	$	9,374,540		83,186	3.52 %		$	7,891,368		67,395	3.43 %		$	7,451,868		75,415	4.02 %
Money market/savings deposits		3,966,775		35,540	3.55 %			4,117,113		36,120	3.52 %			3,806,731		38,547	4.02 %
Certificates of deposit		1,123,002		10,901	3.85 %			1,386,717		13,324	3.85 %			2,238,401		25,782	4.57 %
Total interest-bearing deposits		14,464,317		129,627	3.56 %			13,395,198		116,839	3.50 %			13,497,000		139,744	4.11 %
Borrowings		3,641,885		37,390	4.07 %			4,017,881		40,697	4.06 %			2,476,365		33,977	5.44 %
Total interest-bearing liabilities		18,106,202		167,017	3.66 %			17,413,079		157,536	3.63 %			15,973,365		173,721	4.31 %
Noninterest-bearing deposits		562,897						542,526						392,569
Noninterest-bearing liabilities		272,928						243,697						225,554
Total liabilities		18,942,027						18,199,302						16,591,488
Shareholders' equity		2,447,619						2,379,573						2,221,677
Total liabilities and shareholders' equity	$	21,389,646					$	20,578,875					$	18,813,165
Net interest income			$	144,169					$	136,536					$	128,058
Net interest spread					2.44 %						2.43 %						2.33 %
Net interest-earning assets	$	2,122,538					$	2,045,996					$	2,067,912
Net interest margin					2.83 %						2.81 %						2.82 %
Average interest-earning assets to average interest-bearing liabilities					111.72 %						111.75 %						112.95 %

 

Supplemental Results
(Unaudited)
($ in thousands)
				Net Income												Net Income
				Three Months Ended													Nine Months Ended
				September 30,				June 30,				September 30,				September 30,
				2026				2026				2025				2026			2025
Segment
Multi-family Mortgage Banking				$	30,817			$	10,336			$	12,076			$	52,167		$	24,758
Mortgage Warehousing					44,550				30,599				23,564				103,797			61,948
Banking					43,774				47,337				29,551				129,091			91,232
Other					(13,960)				(9,969)				(10,490)				(33,839)			(27,017)
Total				$	105,181			$	78,303			$	54,701			$	251,216		$	150,921

 

				Total Assets
				September 30, 2026				June 30, 2026				December 31, 2025
				Amount		%		Amount		%		Amount		%
Segment
Multi-family Mortgage Banking				$	579,955	3 %		$	567,941	2 %		$	526,423	3 %
Mortgage Warehousing					8,086,866	39 %			8,647,738	41 %			7,251,653	37 %
Banking					11,760,899	56 %			11,581,635	55 %			11,307,401	58 %
Other					455,779	2 %			432,668	2 %			363,466	2 %
Total				$	20,883,499	100 %		$	21,229,982	100 %		$	19,448,943	100 %

 

				Gain on Sale of Loans												Gain on Sale of Loans
				Three Months Ended												Nine Months Ended
				September 30,				June 30,				September 30,				September 30,
				2026				2026				2025				2026			2025
Loan Type
Multi-family				$	18,583			$	11,755			$	22,458			$	41,760		$	52,398
Single-family					(403)				489				775				474			3,409
Small Business Association (SBA)					865				916				1,438				3,477			3,825
Total				$	19,045			$	13,160			$	24,671			$	45,711		$	59,632

 

				Servicing Rights												Servicing Rights
				Three Months Ended												Nine Months Ended
				September 30,				June 30,				September 30,				September 30,
				2026				2026				2025				2026			2025
Balance, beginning of period				$	236,949			$	229,576			$	193,037			$	217,296		$	189,935
Additions
Purchased servicing					110				-				12,858				235			12,928
Originated servicing					5,422				4,010				7,588				15,181			16,170
Subtractions
Paydowns					(3,019)				(2,652)				(2,450)				(8,203)			(7,504)
Changes in fair value					28,151				6,015				2,123				43,104			1,627
Balance, end of period				$	267,613			$	236,949			$	213,156			$	267,613		$	213,156

 

Supplemental Results
(Unaudited)
($ in thousands)
			Loans Receivable and Loans Held for Sale
			September 30,					June 30,					December 31,
			2026					2026					2025
Mortgage warehouse repurchase agreements (4)			$	1,901,659				$	2,168,175				$	1,600,285
Residential real estate (1)				1,044,688					1,078,358					1,018,780
Multi-family financing				6,088,475					5,855,477					5,332,680
Healthcare financing				1,160,189					1,303,597					1,385,359
Commercial and commercial real estate (2)(3)(4)				1,972,519					1,837,427					1,603,551
Agricultural production and real estate				95,392					91,609					92,077
Consumer and margin loans				3,831					3,960					1,950
Loans receivable				12,266,753					12,338,603					11,034,682
Less: Allowance for credit losses on loans				82,130					75,803					83,301
Loans receivable, net			$	12,184,623				$	12,262,800				$	10,951,381
Loans held for sale (4)				4,043,914					4,615,894					3,873,012
Total loans, net of allowance			$	16,228,537				$	16,878,694				$	14,824,393

(1)	Includes $0.8 billion of All-In-One © first-lien home equity lines of credit as of September 30, 2026, June 30, 2026 and December 31, 2025.
(2)	Includes $1.2 billion, $1.2 billion and $0.9 billion of revolving  lines of credit collateralized primarily by mortgage servicing rights as of September 30, June 30, 2026 and December 31, 2025, respectively.
(3)	Includes only $6.9 million, $19.0 million and $19.5 million of non-owner occupied commercial real estate as of September 30, 2026, June 30, 2026 and December 31, 2025, respectively.
(4)	The warehouse portfolio is exclusively made up of loans to residential and multi-family mortgage bankers that are funding agency-eligible mortgages and commercial loans, which represent all of the Company's loans to non-depository institutions.

			Loan Credit Risk Profile
			September 30, 2026					June 30, 2026					December 31, 2025
			Amount			%		Amount			%		Amount			%
Pass			$	11,806,653		96.2 %		$	11,893,874		96.4 %		$	10,526,493		95.4 %
Special mention				181,402		1.5 %			214,786		1.7 %			204,918		1.9 %
Substandard				278,698		2.3 %			229,943		1.9 %			303,271		2.7 %
Criticized loans				460,100		3.8 %			444,729		3.6 %			508,189		4.6 %
Total loans receivable			$	12,266,753		100.0 %		$	12,338,603		100.0 %		$	11,034,682		100.0 %
Charge-offs (year-to-date)			$	43,398				$	39,511				$	124,116
Recoveries (year-to-date)			$	5,612				$	5,405				$	127

 

			Nonperforming Loans
			September 30,					June 30,					December 31,
			2026					2026					2025
Nonaccrual loans			$	177,568				$	205,545				$	197,812
90 days past due and still accruing				2,710					87					—
Total nonperforming loans			$	180,278				$	205,632				$	197,812
Other real estate owned				91,696					72,389					60,145
Total nonperforming assets			$	271,974				$	278,021				$	257,957
Nonperforming loans to total loans receivable				1.47	%				1.67	%				1.79	%
Nonperforming assets to total assets				1.30	%				1.31	%				1.33	%

 

			Delinquent Loans
			September 30,					June 30,					December 31,
			2026					2026					2025
Delinquent loans:
Loans receivable			$	215,560				$	207,700				$	206,561
Loans held for sale				—					263					265
Total delinquent loans			$	215,560				$	207,963				$	206,826
Total loans receivable and loans held for sale			$	16,310,667				$	16,954,497				$	14,907,694
Delinquent loans to total loans				1.32	%				1.23	%				1.39	%

 

Supplemental Results
(Unaudited)
($ in thousands)
			Deposits
			September 30,			June 30,			December 31,
			2026			2026			2025
Noninterest-bearing deposits
Core demand deposits			$	531,108		$	606,682		$	604,081
Interest-bearing deposits
Demand deposits:
Core demand deposits			$	9,329,208		$	7,820,104		$	6,207,814
Brokered demand deposits				350,321			503,257			600,000
Total interest-bearing demand deposits				9,679,529			8,323,361			6,807,814
Money market/savings deposits:
Core money market/savings deposits				3,993,613			3,944,677			3,566,523
Brokered money market/savings deposits				381			2,912			201,010
Total money market/savings deposits				3,993,994			3,947,589			3,767,533
Certificates of deposit:
Core certificates of deposits				464,364			585,061			905,448
Brokered certificates of deposits				372,800			791,621			956,316
Total certificates of deposits				837,164			1,376,682			1,861,764
Total interest-bearing deposits				14,510,687			13,647,632			12,437,111
Total deposits			$	15,041,795		$	14,254,314		$	13,041,192
Total core deposits			$	14,318,293		$	12,956,524		$	11,283,866
Total brokered deposits				723,502			1,297,790			1,757,326
Total deposits			$	15,041,795		$	14,254,314		$	13,041,192

 

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SOURCE Merchants Bancorp

FAQ

AI-generated questions and answers. How Rhea-AI works. Not financial advice.

What were Merchants Bancorp's third-quarter 2026 earnings?

Merchants Bancorp reported $105.2 million in net income and diluted earnings per common share of $2.06. Net income increased 92% from the third quarter of 2025 and 34% from the second quarter of 2026. Diluted earnings per common share increased 112% and 39%, respectively.

How much did Merchants Bancorp pay for The Loan Exchange?

Merchants Bancorp acquired The Loan Exchange for $13.9 million on September 14, 2026. The transaction resulted in approximately $11.1 million of goodwill. Merchants expects elevated operating expenses during the initial ramp-up, and the acquired operations may dilute earnings as production increases and integration progresses.

How much of Merchants Bancorp's loan portfolio had credit-default-swap protection?

The remaining balance of loans protected by credit default swaps, arrangements that reduce potential credit losses, was $2.1 billion at September 30, 2026. Such protection covered 6% of criticized loans and 10% of delinquent loans. Merchants must still maintain a credit-loss allowance on protected loans held for investment.

Why did Merchants Bancorp's nonperforming loans decline in the third quarter of 2026?

Nonperforming loans declined primarily because of loan payoffs and the transfer of one loan to other real estate owned. They represented 1.47% of loans receivable at September 30, 2026, compared with 1.67% at June 30, 2026, and 1.79% at December 31, 2025.