Merchants Bancorp stock: Q3 profit rises 92% to USD 105.2 million

Merchants Bancorp reported third-quarter 2026 net income of USD 105.2 million on October 28, up from USD 54.7 million a year earlier. In the company announcement carried by Financial Times, diluted earnings per common share reached USD 2.06, compared with USD 0.97 in the third quarter of 2025.

Fees and valuations lift earnings

Net interest income rose 13 percent year over year to USD 144.2 million, while noninterest income increased 88 percent to USD 80.8 million. The result included a USD 28.2 million positive fair-value adjustment to servicing rights and a USD 19.1 million positive adjustment to floor derivatives. Those gains helped offset a 23 percent decline in gain-on-sale income.

The provision for credit losses fell 59 percent year over year to USD 12.0 million. Nonperforming loans declined 12 percent from June 30 to USD 180.3 million, or 1.47 percent of loans receivable. Criticized loans, however, rose 3 percent to USD 460.1 million, leaving asset quality an important issue for investors.

Acquisition adds mortgage capacity

Merchants Bancorp completed its acquisition of The Loan Exchange on September 14 for USD 13.9 million and recognized approximately USD 11.1 million of goodwill. Management said the deal is intended to strengthen single-family mortgage production, expand gain-on-sale opportunities and broaden the company's jumbo-lending footprint. The acquired operations may initially increase expenses and dilute earnings while production ramps up and integration proceeds.

Tangible book value per common share reached USD 41.64, a record high for the 31st consecutive quarter. Deposits rose 6 percent from June to USD 15.0 billion, while available liquidity stood at USD 13.0 billion, equal to 62 percent of total assets.

Specialist lender faces broad competition

Merchants Bancorp is a Carmel, Indiana-based bank holding company with multi-family mortgage banking, mortgage warehousing and banking operations, including residential mortgage, agricultural, commercial and deposit services, according to its investor relations profile. Its mortgage and warehouse businesses operate nationally, while its traditional banking base is centered in Indiana. In these specialist markets, BankingNewsAI identifies Texas Capital Bancshares, Western Alliance Bancorporation and Customers Bancorp as warehouse-lending rivals, while Walker & Dunlop and Wells Fargo compete in multifamily lending and servicing; Merchants is positioned as a focused specialist rather than a broad national bank.

US regional banks remain sensitive to interest rates, funding costs and credit trends; follow the S&P 500 market environment for the broader backdrop.

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