Merchants Bancorp Reports First Quarter 2026 Results

Merchants Bancorp Reports First Quarter 2026 Results CARMEL, Ind., April 28, 2026 /PRNewswire/ -- Merchants Bancorp (the "Company" or "Merchants") (Nasdaq: MBIN), parent company of Merchants Bank, today reported first quarter 2026 net income of $67.7 million, or diluted earnings per common share of $1.25. This compared to $58.2 million, or diluted earnings per common share of $0.93 in the first quarter of 2025, and compared to $67.8 million, or diluted earnings per common share of $1.28 in the fourth quarter of 2025.

"Achieving record‑high assets of $20.3 billion and a record tangible book value of $38.55 per share in the same quarter underscores the strength of our balance sheet and the momentum we are building. Just as important, asset quality continues to stabilize, positioning us exceptionally well as we move forward with confidence," said Michael F. Petrie, Chairman and CEO of Merchants.

Michael J. Dunlap, President and Chief Operating Officer of Merchants, added, "Our results during the quarter reflected the dedication and resilience of our team. Our people remain accountable, collaborative, and disciplined in their work, reinforcing the culture that defines our organization while supporting the continued execution of our strategic plan."

Net income for the first quarter of 2026 was $67.7 million, representing an increase of $9.5 million, or 16%, compared to the first quarter of 2025. The improvement was primarily attributable to a $22.9 million, or 97%, increase in noninterest income driven principally by higher positive fair value adjustments to mortgage servicing rights and certain derivatives. Net income also benefited from a $6.5 million, or 5%, increase in net interest income. These increases were partially offset by a $14.0 million, or 23%, increase in noninterest expense and a $7.6 million increase in the provision for credit losses.

Net income of $67.7 million for the first quarter of 2026 remained relatively consistent with the fourth quarter of 2025. Results reflected a $12.5 million, or 45%, decrease in the provision for credit losses and an $8.0 million, or 10%, decrease in noninterest expense, primarily attributable to lower costs associated with credit risk transfer premiums and salaries and employee benefits. These increases to net income were offset by a $9.4 million, or 7%, decrease in net interest income, and a $10.5 million, or 175%, increase in the provision for income taxes, reflecting lower utilization of tax credits compared to the prior quarter. While noninterest income was relatively flat during the quarter, a $12.2 million decrease in gain on sale of loans was nearly offset by the $10.9 million increase in loan servicing fees that reflected higher fair market value adjustments for mortgage servicing rights.

Total Assets

Total assets were $20.3 billion at March 31, 2026, increasing $1.5 billion, or 8%, compared to March 31, 2025, and $872.8 million, or 4%, compared to December 31, 2025. The increases for both periods were primarily due to higher balances in the multi-family and warehouse portfolios, including those held for sale and held for investment. These were partially offset by lower balances in the healthcare loan portfolio.

Asset Quality

The allowance for credit losses on loans of $76.8 million, as of March 31, 2026, decreased by $6.6 million, or 8%, compared to March 31, 2025, and $6.5 million, or 8%, compared to December 31, 2025. The decreases for both periods were primarily attributable to charge-offs on loans with specific reserves.

During the first quarter of 2026, the Company recorded charge-offs across seven relationships, primarily in the healthcare and multi-family loan portfolios, totaling $23.0 million, and had $616,000 in recoveries. Nearly 75% of the charge-offs in the first quarter of 2026 were associated with two loan relationships. This compares to $10.5 million in charge-offs and $28,000 in recoveries during the first quarter of 2025 and $38.0 million in charge-offs and $76,000 in recoveries in the fourth quarter of 2025.

The increases to provision for credit losses for the last several quarters were largely associated with declines on certain multi-family property values after receiving new appraisals and the ongoing investigation of borrowers involved in mortgage fraud or suspected fraud, as well as loan growth. The increases were also attributable to certain types of subordinated loans that the Company no longer offers to borrowers. These underperforming loans have been largely identified and evaluated for potential losses that have either been included in the allowance for credit losses on loans as specific reserves or charged off.

Overall, criticized loans receivable of $505.5 million declined by $226.0 million, or 31%, compared to March 31, 2025, and declined by $2.7 million, or 1% compared to December 31, 2025. This decline reinforces the view that the frequency of migration to criticized status would stabilize and eventually subside, driven by favorable market conditions and the Company's efforts with proactive portfolio management. As of March 31, 2026, 6% of the criticized loans were covered by credit default swaps.

As of March 31, 2026, all substandard loans have been evaluated for impairment, and these loans have specific reserves of $11.7 million. The Company believes that the remaining loan portfolio remains well collateralized. Non-performing loans increased $50.0 million, or 25%, during the quarter, primarily attributable to four relationships in the multi-family portfolio. As of March 31, 2026, non-performing loans were $247.5 million, or 2.16% of loans receivable, compared to $284.6 million, or 2.73%, as of March 31, 2025, and $197.8 million, or 1.79%, as of December 31, 2025.

Total delinquent loans declined 28%, from $334.7 million as of March 31, 2025, to $242.5 million as of March 31, 2026 and increased 17% from December 31, 2025. As of March 31, 2026, 11% of the delinquent loans were covered by credit default swaps.

The Company has been making additional efforts to reduce its credit risk through loan sale and securitization activities since 2019. Since 2023, the Company has strategically executed credit protection arrangements through credit default swaps and a credit-linked note to reduce risk of losses, with coverage ranging from 13-15% of the unpaid principal balances for each arrangement. Despite having credit protection on these loans, the Company is required to carry an allowance for credit losses on loans held for investment. As of March 31, 2026, the credit- linked note was repaid in full and the remaining balance of loans protected by credit default swaps was $2.5 billion.

Total Deposits

Total deposits of $13.0 billion at March 31, 2026 increased by $545.6 million, or 4%, compared to March 31, 2025, and remained relatively unchanged compared to December 31, 2025. The increase compared to March 31, 2025 primarily reflects the growth in core deposits.

Core deposits of $12.1 billion at March 31, 2026 reflected increases of $1.4 billion, or 13%, from March 31, 2025 and $781.4 million, or 7%, from December 31, 2025. Core deposits represented 93% of total deposits at March 31, 2026, 86% of total deposits at March 31, 2025, and 87% of total deposits at December 31, 2025.

Brokered deposits of $886.5 million at March 31, 2026 decreased $831.9 million, or 48%, from March 31, 2025 and $870.8 million, or 50%, from December 31, 2025. As of March 31, 2026, brokered certificates of deposit had a weighted average remaining duration of 88 days.

Liquidity

The Company maintains exceptional liquidity, supported by substantial borrowing capacity, including unused lines of credit totaling $3.9 billion as of March 31, 2026, compared to $4.7 billion at March 31, 2025 and $5.3 billion at December 31, 2025.

The Company's most liquid assets are in 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 $3.9 billion, these totaled $11.1 billion, or 55%, of its $20.3 billion total assets as of March 31, 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

March 31, 2026 and 2025

Net Interest Income of $128.6 million increased $6.5 million, or 5%, reflecting lower interest expense on certificates of deposits and borrowings, partially offset by higher interest expense on interest-bearing checking accounts and lower interest income on loans and loans held for sale.

Interest Income of $270.5 million decreased $16.7 million, or 6%, compared to $287.2 million. The decrease was primarily attributable to lower average yields on higher average balances on loans and loans held for sale, as well as lower average yields on lower average balances on securities held to maturity.

Interest Expense of $141.9 million decreased $23.1 million, or 14%, compared to $165.0 million. The decrease reflected lower average balances at lower average rates on certificates of deposit, and lower average rates on borrowings, which were partially offset by higher average balances at lower average rates on interest-bearing checking accounts.

Noninterest Income of $46.6 million increased $22.9 million, or 97%, compared to $23.7 million. The $22.9 million increase reflected an $11.1 million, or 277%, increase in loan servicing fees, a $10.1 million, or 319% increase in other noninterest income, and a $1.9 million, or 16%, increase in gain on sale of loans.

Noninterest Expense of $75.6 million increased $14.0 million, or 23%, primarily due to a $7.5 million increase in other noninterest expense that included $3.1 million in collateral preservation expenses associated with taxes, insurance, property expenses, and legal fees related to nonperforming assets. The increase also reflects a $2.1 million, or 6%, increase in salaries and employee benefits to support business growth, a $1.9 million increase in credit risk transfer premium expense associated with credit default swaps, as well as $1.2 million, or 16%, increase in deposit insurance expense primarily associated with asset quality.

Comparison of Operating Results for the Three Months Ended

March 31, 2026 and December 31, 2025

Net Interest Income of $128.6 million decreased $9.4 million, or 7%, reflecting lower interest income on loans and loans held for sale, partially offset by lower interest expense on deposits and borrowing.

Interest Income of $270.5 million decreased $37.0 million, or 12%, compared to $307.5 million, primarily reflecting lower average yields on lower average balances on loans and loans held for sale.

Interest Expense of $141.9 million decreased $27.5 million, or 16% compared to $169.4 million. The decrease was primarily driven by lower average rates on lower average balances on interest-bearing checking accounts and borrowings.

Noninterest Income of $46.6 million declined slightly compared to $47.2 million. Results reflected a $12.2 million, or 48%, decrease in gain on sale of loans and a $2.6 million, or 45%, decrease in syndication and asset management fees. This was partially offset by a $10.9 million, or 257%, increase in loan servicing fees and a $3.5 million, or 36%, increase in other income.

Noninterest Expense of $75.6 million decreased $8.0 million, or 10%, compared to $83.6 million, primarily due to a $3.8 million, or 9%, decrease in salaries and employee benefits that reflected lower commissions on lower noninterest income, a $2.4 million, or 30%, decrease in credit risk transfer premium expense associated with credit default swaps, and a $1.4 million, or 10%, decrease in other expenses.

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 $20.3 billion in assets and $13.0 billion in deposits as of March 31, 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," "outlook," "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)

March 31,

December 31,

September 30,

June 30,

March 31,

2026

2025

Assets

Cash and due from banks

$ 19,642

$ 15,844

$ 11,566

$ 15,419

$ 15,609

Interest-earning demand accounts

63,573

196,358

586,470

631,746

505,687

Cash and cash equivalents

83,215

212,202

598,036

647,165

521,296

Securities purchased under agreements to resell

1,511

1,520

1,529

1,539

1,550

Mortgage loans in process of securitization

437,001

620,094

414,786

402,427

389,797

Securities available for sale (includes $550,207, $571,314,

$591,379, $602,962 and $626,271 at fair value)

843,896

865,058

885,070

936,343

961,183

Securities held to maturity (fair value of $1,426,444, $1,543,554,

$1,670,306, $1,547,525 and $1,605,151)

1,425,982

1,543,659

1,670,555

1,548,211

1,606,286

Federal Home Loan Bank (FHLB) stock and other equity securities

227,589

217,850

Loans held for sale (includes $163,426, $76,980, $112,832,

$91,930 and $75,920 at fair value)

4,709,688

3,873,012

4,129,329

4,105,765

3,983,452

Loans receivable (includes $46,427, $47,318, $0, $0 and $0 at fair

value), net of allowance for credit losses on loans of $76,831,

$83,301, $93,330, $91,811 and $83,413

11,399,882

10,951,381

10,515,221

10,432,117

10,343,724

Premises and equipment, net

73,695

73,929

75,148

71,050

67,787

Servicing rights

229,576

217,296

213,156

193,037

189,711

Interest receivable

77,326

81,807

82,445

82,391

82,811

Goodwill

8,014

Other real estate owned

60,226

60,145

4,347

7,049

Other assets and receivables

744,181

713,237

539,161

488,246

417,290

Total assets

$ 20,321,782

$ 19,448,943

$ 19,354,647

$ 19,141,204

$ 18,797,800

Liabilities and Shareholders' Equity

Liabilities

Deposits

Noninterest-bearing

$ 501,864

$ 604,081

$ 399,814

$ 315,523

$ 313,296

Interest-bearing

12,449,889

12,437,111

13,534,891

12,371,312

12,092,869

Total deposits

12,951,753

13,041,192

13,934,705

12,686,835

12,406,165

Borrowings

4,773,490

3,842,592

2,902,631

4,009,474

4,001,744

Deferred and current tax liabilities, net

46,403

33,900

28,973

29,228

35,740

Other liabilities

219,833

250,500

262,904

231,035

193,416

Total liabilities

17,991,479

17,168,184

17,129,213

16,956,572

16,637,065

Commitments and Contingencies

Shareholders' Equity

Common stock, without par value

Authorized - 75,000,000 shares

Issued and outstanding - 45,935,408 shares, 45,893,172 shares,

45,889,238 shares, 45,885,458 shares and 45,881,706 shares

243,433

243,310

242,371

241,452

240,512

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

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

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

Retained earnings

1,536,383

1,486,191

1,431,983

1,392,136

1,369,009

Accumulated other comprehensive loss

(804)

(33)

(211)

(247)

(77)

Total shareholders' equity

2,330,303

2,280,759

2,225,434

2,184,632

2,160,735

Total liabilities and shareholders' equity

$ 20,321,782

$ 19,448,943

$ 19,354,647

$ 19,141,204

$ 18,797,800

Consolidated Statement of Income

(Unaudited)

(In thousands, except share data)

Three Months Ended

Change

March 31,

December 31,

March 31,

1Q26

2026

2025

vs. 4Q25

vs. 1Q25

Interest Income

Loans

230,269

258,090

239,280

-11 %

-4 %

Mortgage loans in process of securitization

4,387

6,719

3,743

-35 %

17 %

Investment securities:

Available for sale

9,942

11,178

12,358

-11 %

-20 %

Held to maturity

19,479

23,182

24,358

-16 %

-20 %

FHLB stock and other equity securities (dividends)

4,394

4,723

4,372

-7 %

1 %

Other

2,040

3,577

3,093

-43 %

-34 %

Total interest income

270,511

307,469

287,204

-12 %

-6 %

Interest Expense

Deposits

109,849

126,288

123,941

-13 %

-11 %

Short-term borrowings

28,937

34,283

33,364

-16 %

-13 %

Long-term borrowings

3,077

8,812

7,703

-65 %

-60 %

Total interest expense

141,863

169,383

165,008

-16 %

-14 %

Net Interest Income

128,648

138,086

122,196

-7 %

5 %

Provision for credit losses

15,299

27,761

7,727

-45 %

98 %

Net Interest Income After Provision for Credit Losses

113,349

110,325

114,469

3 %

-1 %

Noninterest Income

Gain on sale of loans

13,506

25,730

11,619

-48 %

16 %

Loan servicing fees, net

15,099

4,235

4,010

257 %

277 %

Mortgage warehouse fees

1,620

1,801

1,513

-10 %

7 %

Syndication and asset management fees

3,117

5,680

3,389

-45 %

-8 %

Other income

13,257

9,755

3,162

36 %

319 %

Total noninterest income

46,599

47,201

23,693

-1 %

97 %

Noninterest Expense

Salaries and employee benefits

38,565

42,375

36,419

-9 %

6 %

Loan expense

1,185

1,004

798

18 %

48 %

Occupancy and equipment

3,081

3,382

2,351

-9 %

31 %

Professional fees

2,767

3,436

2,894

-19 %

-4 %

Deposit insurance expense

8,408

8,040

7,228

5 %

16 %

Technology expense

2,679

2,611

2,374

3 %

13 %

Credit risk transfer premium expense

5,764

8,198

3,862

-30 %

49 %

Other expense

13,193

14,596

5,738

-10 %

130 %

Total noninterest expense

75,642

83,642

61,664

-10 %

23 %

Income Before Income Taxes

84,306

73,884

76,498

14 %

10 %

Provision for income taxes

16,574

6,035

18,259

175 %

-9 %

Net Income

67,732

67,849

58,239

—

16 %

Dividends on preferred stock

(10,265)

(10,266)

(10,265)

—

Impact of preferred stock redemption

—

1,215

(5,371)

-100 %

Net Income Available to Common Shareholders

57,467

58,798

42,603

-2 %

35 %

Basic Earnings Per Share

1.25

1.28

0.93

-2 %

34 %

Diluted Earnings Per Share

1.25

1.28

0.93

-2 %

34 %

Weighted-Average Shares Outstanding

Basic

45,929,936

45,891,077

45,824,022

Diluted

45,997,744

45,976,153

45,914,083

Key Operating Results

(Unaudited)

($ in thousands, except share data)

Three Months Ended

Change

March 31,

December 31,

March 31,

1Q26

2026

2025

vs. 4Q25

vs. 1Q25

Noninterest expense

$ 75,642

$ 83,642

$ 61,664

-10 %

23 %

Net interest income (before provision for credit losses)

128,648

138,086

122,196

-7 %

5 %

Noninterest income

46,599

47,201

23,693

-1 %

97 %

Total income

$ 175,247

$ 185,287

$ 145,889

-5 %

20 %

Efficiency ratio

43.16

45.14

42.27

(198)

bps

Average assets

$ 18,952,948

$ 19,815,940

$ 17,831,950

-4 %

6 %

Net income

67,732

67,849

58,239

—

16 %

Return on average assets before annualizing

0.36

0.34

0.33

Annualization factor

4.00

Return on average assets

1.43

1.37

1.31

bps

Return on average tangible common shareholders' equity (1)

13.01

13.76

10.65

(75)

bps

236

bps

Tangible book value per common share (1)

$ 38.55

$ 37.51

$ 34.90

3 %

10 %

Tangible common shareholders' equity/tangible assets (1)

8.72

8.85

8.52

(13)

bps

Consolidated ratios

Total capital/risk-weighted assets (2)

12.8

13.6

13.0

Tier I capital/risk-weighted assets (2)

12.3

13.1

12.4

Common Equity Tier I capital/risk-weighted assets (2)

9.4

9.9

9.2

Tier I capital/average assets (2)

12.3

11.5

12.1

(1) Non-GAAP financial measure - see "Reconciliation of Non-GAAP Measures" below:

(2) As defined by regulatory agencies; March 31, 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

March 31,

December 31,

March 31,

1Q26

2026

2025

vs. 4Q25

vs. 1Q25

Average shareholders' equity

$ 2,326,390

$ 2,268,832

$ 2,160,169

3 %

8 %

Less: average goodwill & intangibles

(8,048)

(8,054)

(8,070)

—

Less: average preferred stock

(551,291)

(552,633)

—

Average tangible common shareholders' equity

$ 1,767,051

$ 1,709,487

$ 1,599,466

3 %

10 %

Annualization factor

4.00

Return on average tangible common shareholders' equity

13.01

13.76

10.65

(75)

bps

236

bps

Total equity

$ 2,330,303

$ 2,280,759

$ 2,160,735

2 %

8 %

Less: goodwill and intangibles

(8,045)

(8,051)

(8,068)

—

Less: preferred stock

(551,291)

—

Tangible common shareholders' equity

$ 1,770,967

$ 1,721,417

$ 1,601,376

3 %

11 %

Assets

$ 20,321,782

$ 19,448,943

$ 18,797,800

4 %

8 %

Less: goodwill and intangibles

(8,045)

(8,051)

(8,068)

—

Tangible assets

$ 20,313,737

$ 19,440,892

$ 18,789,732

4 %

8 %

Ending common shares

45,935,408

45,893,172

45,881,706

Tangible book value per common share

$ 38.55

$ 37.51

$ 34.90

3 %

10 %

Tangible common shareholders' equity/tangible assets

8.72

8.85

8.52

(13)

bps

Merchants Bancorp

Average Balance Analysis

($ in thousands)

(Unaudited)

Three Months Ended

March 31, 2026

December 31, 2025

March 31, 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

$ 433,306

$ 6,434

6.02 %

$ 556,453

$ 8,300

5.92 %

$ 511,077

$ 7,465

5.92 %

Securities available for sale

856,846

9,942

4.71 %

870,949

11,178

5.09 %

961,065

12,358

5.21 %

Securities held to maturity

1,493,185

19,479

5.29 %

1,627,341

23,182

5.65 %

1,643,703

24,358

6.01 %

Mortgage loans in process of securitization

338,052

4,387

5.26 %

506,704

6,719

5.26 %

277,426

3,743

5.47 %

Loans and loans held for sale

14,741,304

230,269

6.34 %

15,368,719

258,090

6.66 %

13,751,197

239,280

7.06 %

Total interest-earning assets

17,862,693

270,511

6.14 %

18,930,166

307,469

6.44 %

17,144,468

287,204

6.79 %

Allowance for credit losses on loans

(85,226)

(99,349)

(86,711)

Noninterest-earning assets

1,175,481

985,123

774,193

Total assets

$ 18,952,948

$ 19,815,940

$ 17,831,950

Liabilities & Shareholders' Equity:

Interest-bearing checking

$ 7,199,340

60,763

3.42 %

$ 7,625,489

71,599

3.73 %

$ 5,121,343

50,609

4.01 %

Money market /savings deposits

3,925,326

34,000

3.51 %

3,870,411

35,743

3.66 %

3,544,828

34,521

3.95 %

Certificates of deposit

1,562,186

15,086

3.92 %

1,818,058

18,946

4.13 %

3,369,269

38,811

4.67 %

Total interest-bearing deposits

12,686,852

109,849

3.51 %

13,313,958

126,288

3.76 %

12,035,440

123,941

4.18 %

Borrowings

3,137,379

32,014

4.14 %

3,505,903

43,095

4.88 %

3,125,935

41,067

5.33 %

Total interest-bearing liabilities

15,824,231

141,863

3.64 %

16,819,861

169,383

4.00 %

15,161,375

165,008

4.41 %

Noninterest-bearing deposits

560,176

492,650

294,248

Noninterest-bearing liabilities

242,151

234,597

216,158

Total liabilities

16,626,558

17,547,108

15,671,781

Shareholders' equity

2,326,390

2,268,832

2,160,169

Total liabilities and shareholders' equity

$ 18,952,948

$ 19,815,940

$ 17,831,950

Net interest income

$ 128,648

$ 138,086

$ 122,196

Net interest spread

2.50 %

2.44 %

2.38 %

Net interest-earning assets

$ 2,038,462

$ 2,110,305

$ 1,983,093

Net interest margin

2.92 %

2.89 %

Average interest-earning assets to average

interest-bearing liabilities

112.88 %

112.55 %

113.08 %

Supplemental Results

(Unaudited)

($ in thousands)

Net Income

Three Months Ended

March 31,

December 31,

March 31,

2026

2025

Segment

Multi-family Mortgage Banking

$ 11,014

$ 15,397

$ 3,413

Mortgage Warehousing

28,648

34,996

15,398

Banking

37,980

30,773

47,107

Other

(9,910)

(13,317)

(7,679)

Total

$ 67,732

$ 67,849

$ 58,239

Total Assets

March 31, 2026

December 31, 2025

March 31, 2025

Amount

Segment

Multi-family Mortgage Banking

$ 522,976

3 %

$ 526,423

3 %

$ 460,441

3 %

Mortgage Warehousing

8,544,107

42 %

7,251,653

37 %

5,902,165

31 %

Banking

10,850,657

53 %

11,307,401

58 %

12,002,564

64 %

Other

404,042

2 %

363,466

2 %

432,630

2 %

Total

$ 20,321,782

100 %

$ 19,448,943

100 %

$ 18,797,800

100 %

Gain on Sale of Loans

Three Months Ended

March 31,

December 31,

March 31,

2026

2025

Loan Type

Multi-family

$ 11,422

$ 24,823

$ 10,125

Single-family

388

(328)

206

Small Business Association (SBA)

1,696

1,235

1,288

Total

$ 13,506

$ 25,730

$ 11,619

Servicing Rights

Three Months Ended

March 31,

December 31,

March 31,

2026

2025

Balance, beginning of period

$ 217,296

$ 213,156

$ 189,935

Additions

Purchased servicing

125

1,554

—

Originated servicing

5,749

7,484

3,338

Subtractions

Paydowns

(2,532)

(4,719)

(2,808)

Changes in fair value

8,938

(179)

(754)

Balance, end of period

$ 229,576

$ 217,296

$ 189,711

Supplemental Results

(Unaudited)

($ in thousands)

Loans Receivable and Loans Held for Sale

March 31,

December 31,

March 31,

2026

2025

Mortgage warehouse repurchase agreements (4)

$ 1,982,411

$ 1,600,285

$ 1,408,239

Residential real estate (1)

1,038,724

1,018,780

1,332,601

Multi-family financing

5,537,711

5,332,680

4,600,117

Healthcare financing

1,260,821

1,385,359

1,583,290

Commercial and commercial real estate (2)(3)(4)

1,560,788

1,603,551

1,418,741

Agricultural production and real estate

92,527

92,077

79,190

Consumer and margin loans

3,731

1,950

4,959

Loans receivable

11,476,713

11,034,682

10,427,137

Less: Allowance for credit losses on loans

76,831

83,301

83,413

Loans receivable, net

$ 11,399,882

$ 10,951,381

$ 10,343,724

Loans held for sale (4)

4,709,688

3,873,012

3,983,452

Total loans, net of allowance

$ 16,109,570

$ 14,824,393

$ 14,327,176

(1) Includes $0.8 billion, $0.8 billion and $1.2 billion of All-In-One © first-lien home equity lines of credit as of March 31, 2026, December 31, 2025 and March 31, 2025, respectively.

(2) Includes $0.9 billion, $0.9 billion and $0.8 billion of revolving lines of credit collateralized primarily by mortgage servicing rights as of March 31, 2026, December 31, 2025 and March 31, 2025, respectively.

(3) Includes only $19.7 million, $19.5 million and $19.5 million of non-owner occupied commercial real estate as of March 31, 2026, December 31, 2025 and March 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

March 31, 2026

December 31, 2025

March 31, 2025

Amount

Pass

$ 10,971,183

95.6 %

$ 10,526,493

95.4 %

$ 9,695,595

93.0 %

Special mention

234,346

2.0 %

204,918

1.9 %

407,895

3.9 %

Substandard

271,184

2.4 %

303,271

2.7 %

323,647

3.1 %

Criticized loans

505,530

4.4 %

508,189

4.6 %

731,542

7.0 %

Total loans receivable

$ 11,476,713

100.0 %

$ 11,034,682

100.0 %

$ 10,427,137

100.0 %

Charge-offs (year-to-date)

$ 22,979

$ 124,116

$ 10,507

Recoveries (year-to-date)

$ 616

$ 127

$ 28

Nonperforming Loans

March 31,

December 31,

March 31,

2026

2025

Nonaccrual loans

$ 239,108

$ 197,812

$ 284,019

90 days past due and still accruing

8,350

585

Total nonperforming loans

$ 247,458

$ 197,812

$ 284,604

Other real estate owned

60,226

60,145

7,049

Total nonperforming assets

$ 307,684

$ 257,957

$ 291,653

Nonperforming loans to total loans receivable

2.16

1.79

2.73

Nonperforming assets to total assets

1.51

1.33

1.55

Delinquent Loans

March 31,

December 31,

March 31,

2026

2025

Delinquent loans:

Loans receivable

$ 242,271

$ 206,561

$ 304,560

Loans held for sale

264

265

30,103

Total delinquent loans

$ 242,535

$ 206,826

$ 334,663

Total loans receivable and loans held for sale

$ 16,186,401

$ 14,907,694

$ 14,410,589

Delinquent loans to total loans

1.50

1.39

2.32

Supplemental Results

(Unaudited)

($ in thousands)

Deposits

March 31,

December 31,

March 31,

2026

2025

Noninterest-bearing deposits

Core demand deposits

$ 501,864

$ 604,081

$ 313,296

Interest-bearing deposits

Demand deposits:

Core demand deposits

$ 6,949,611

$ 6,207,814

$ 5,432,133

Brokered demand deposits

301,111

600,000

—

Total interest-bearing demand deposits

7,250,722

6,807,814

5,432,133

Money market/savings deposits:

Core money market/savings deposits

3,872,344

3,566,523

3,618,210

Brokered money market/savings deposits

200,867

201,010

353

Total money market/savings deposits

4,073,211

3,767,533

3,618,563

Certificates of deposit:

Core certificates of deposits

741,452

905,448

1,324,126

Brokered certificates of deposits

384,504

956,316

1,718,047

Total certificates of deposits

1,125,956

1,861,764

3,042,173

Total interest-bearing deposits

12,449,889

12,437,111

12,092,869

Total deposits

$ 12,951,753

$ 13,041,192

$ 12,406,165

Total core deposits

$ 12,065,271

$ 11,283,866

$ 10,687,765

Total brokered deposits

886,482

1,757,326

1,718,400

Total deposits

$ 12,951,753

$ 13,041,192

$ 12,406,165

SOURCE Merchants Bancorp