#United States #financial results #Carmel #Merchants Bancorp #asset quality

Merchants Bancorp Demonstrates Growth in Q4 2025

Merchants Bancorp, the parent company of Merchants Bank, has disclosed its financial results for the fourth quarter of 2025, revealing a marked increase in net income and enhancements in asset quality. The results portray a favorable outlook for the upcoming year, as the company continues to capitalize on its strategic initiatives.

Financial Highlights

During the fourth quarter of 2025, Merchants Bancorp reported a net income of $67.8 million. This figure represents an increase of $13.1 million, or 24%, compared to the third quarter of the same year. However, it is a decline of $27.8 million, or 29%, when compared to the fourth quarter of 2024.

In terms of earnings per share, diluted earnings stood at $1.28, a 32% increase from $0.97 in the previous quarter and a 31% decrease from $1.85 in the corresponding quarter last year. The overall net income for the full year totaled $218.8 million, down 32% compared to 2024.

Improvement in Asset Quality

One of the most significant revelations from the report is the substantial improvement in asset quality. The company reported a notable decline in criticized loans, which fell by 13% from the previous quarter and by 27% year-over-year. Delinquent loans also saw a decrease of 38% compared to the previous quarter, further emphasizing the progress made in credit quality management.

Merchants Bancorp’s total assets reached a record $19.4 billion, up by 3% from the previous year and slightly higher than the figure reported at the end of September 2025. This upward trend is buoyed by growth in multifamily and warehouse portfolios, indicating the firm's effective market strategies.

Liquidity and Capital Ratios

The company's liquidity remains robust, with approximately $5.3 billion in unused borrowing capacity, a significant increase compared to the previous year. Figure also denotes a healthy capital ratio, reinforcing the company's stability amidst fluctuating market conditions.

Chairman and CEO Michael F. Petrie expressed optimism regarding these results, indicating that they symbolize a crucial shift for Merchants. He emphasized the importance of asset quality and the historic performance of multi-family loans, which achieved the highest sales in company history during this quarter.

In addition, core deposits rose by 20%, totaling $11.3 billion for the year. This surge in core deposits demonstrates solid customer confidence and an expanding customer base, as the bank continues to enhance its offerings.

Operational Performance

Expenses have also risen, reflecting the company's ongoing commitment to operational excellence and risk management. Noninterest expenses climbed by 32% year-over-year, driven largely by increases in salaries, benefits, and credit risk transfer premiums associated with credit default swaps. Despite these challenges, the efficiency ratio remained commendable at 45.14%.

Merchants Bancorp announced its intention to focus on sustainable growth strategies while maintaining strong liquidity levels and enhancing overall credit quality. The disciplined approach to portfolio management is aimed at reducing credit risks further, thus paving the way for a promising future.

Conclusion

As the dust settles on 2025, Merchants Bancorp finds itself in a position of strength. With an enhanced asset quality, solid financial metrics, and a strong growth trajectory, the company has laid a robust foundation for success in 2026. Merchants continues to adapt and thrive in a dynamic financial landscape, ensuring long-term value for its shareholders and communities.

For further insights and updates on Merchants Bancorp’s performance and strategic initiatives, visit their Investor Relations page.