Merchants Bancorp reported its financial results for the third quarter and the first nine months of 2025, revealing a net income of $54.7 million for the three months ended September 30, 2025, a decrease of 11% from $61.3 million in the same period last year. The diluted earnings per share also fell to $0.97, down 17% from $1.17 in the prior year. For the nine months ended September 30, 2025, net income was $150.9 million, a significant decline of 33% compared to $224.7 million for the same period in 2024. The decrease in profitability was attributed to a higher provision for credit losses, which rose to $90 million, reflecting challenges in the multi-family property market and ongoing investigations into borrower fraud.
Total assets increased to $19.4 billion as of September 30, 2025, up 3% from $18.8 billion at the end of 2024. This growth was primarily driven by an increase in loans held for sale, which rose to $4.1 billion, and a slight increase in loans receivable, net of allowance for credit losses, which reached $10.5 billion. Core deposits also saw a notable increase, rising by 36% to $12.8 billion, representing 92% of total deposits. However, brokered deposits decreased significantly by 55% to $1.1 billion, indicating a strategic shift towards more stable funding sources.
Operationally, the company experienced a 33% increase in the volume of warehouse loans funded during the third quarter, amounting to $17.4 billion. The multi-family mortgage banking segment reported a 12% increase in loan origination volume, totaling $2 billion for the quarter. Additionally, the company executed a credit default swap on a $557.1 million pool of healthcare mortgage loans to provide credit protection and reduce risk-based capital requirements.
Looking ahead, Merchants Bancorp remains focused on managing its credit risk and enhancing its capital position. The company has significant unused borrowing capacity of $5.9 billion, which provides a buffer against market fluctuations. The management anticipates that the strategic initiatives implemented will support future growth and profitability, despite the current challenges in the market. The company continues to monitor its asset quality closely, with a particular focus on the multi-family and healthcare financing sectors, as it navigates the evolving economic landscape.
About Merchants Bancorp
Merchants Bancorp is a diversified bank holding company providing community banking, mortgage banking, and mortgage warehousing services. It specializes in multi-family and healthcare facility financing, affordable housing, SBA lending, and residential mortgage origination and servicing. Serving national and regional markets, it leverages government programs, syndications, and a broad product suite to offer low-risk, tailored financial solutions with a focus on long-term growth and ESG commitments.
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