Merchants Bancorp Reports Third Quarter of 2026 Results
Key Highlights
- ➤Net income $105.2 million, up 92% year over year
- ➤Diluted EPS $2.06, up 112% year over year
- ➤Tangible book value reached record $41.64 per share
- ➤Nonperforming loans fell 12% sequentially to $180.3 million
- ➤The Loan Exchange acquired for $13.9 million, potentially initially dilutive
Expert Statements
Michael F. Petrie, Chairman and CEO of Merchants Bancorp
“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”
Michael J. Dunlap, President and Chief Operating Officer of Merchants Bancorp
“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.”
Merchants Bancorp Reports Third Quarter of 2026 Results PR Newswire
* 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.
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