Merchants Bancorp Profit Surges 106% as Asset Quality Improves
Merchants Bancorp reported a sharp increase in second-quarter net income to $78.3 million, a 106% jump from a year ago. The Carmel, Indiana-based firm attributed the growth to a significant reduction in credit loss provisions and record-breaking asset levels, which reached $21.2 billion by the end of June.
The company’s performance highlights a successful period of portfolio management, with criticized loans falling 12% to $444.7 million compared to the previous quarter. This marks the fifth consecutive quarter of declines in troubled assets, signaling a stabilization in the lender's credit risk profile. Diluted earnings per common share reached $1.48, representing a 147% increase over the same period in 2025.
Strong liquidity remains a cornerstone of the firm's balance sheet, with $13.0 billion in available funds supported by $5.5 billion in unused borrowing capacity. While high interest rates have pressured gain-on-sale revenue in the short term, the company has offset these impacts through growth in core deposits—which now represent 91% of total deposits—and positive fair market value adjustments to its servicing rights. CEO Michael F. Petrie noted that these metrics reflect the resilience of the company’s diversified business model in a challenging rate environment.
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