0001104659-26-021549
SEC filingMerchants Bancorp reported net income of $218.8 million for FY 2025, a decrease from $320.4 million in FY 2024. Net interest income was $517.1 million, down from $522.6 million the prior year, while total interest income declined to $1.20 billion from $1.30 billion. Noninterest income increased to $164.4 million from $148.1 million, driven by a higher gain on sale of loans ($85.4 million vs. $62.3 million). The provision for credit losses increased significantly to $117.8 million from $24.3 million. Total assets grew to $19.45 billion from $18.81 billion, with total deposits at $13.04 billion and total shareholders' equity at $2.28 billion. Net cash used in operating activities was $341.2 million, while net cash provided by financing activities was $272.5 million.
Merchants Bancorp reported net income of $218.8 million for the fiscal year ended December 31, 2025, a decrease of $101.6 million (31.7%) from $320.4 million in FY 2024. Total interest income declined to $1.20 billion from $1.30 billion, while total interest expense decreased to $683.8 million from $780.1 million, resulting in net interest income of $517.1 million, down $5.6 million from the prior year. The provision for credit losses increased substantially to $117.8 million from $24.3 million. Noninterest income improved to $164.4 million from $148.1 million, primarily due to higher gain on sale of loans ($85.4 million vs. $62.3 million). Noninterest expense increased to $299.9 million from $223.8 million. Basic and diluted earnings per share were $4.00, compared to $6.32 and $6.30 respectively in FY 2024.
Total revenue, represented by total interest income plus total noninterest income, was $1.37 billion for FY 2025, a decrease from $1.45 billion in FY 2024. Interest income from loans was $1.01 billion, down from $1.11 billion. Mortgage loans in process of securitization contributed $21.1 million in interest income. Investment securities interest income totaled $158.6 million, with $47.5 million from available-for-sale securities and $93.1 million from held-to-maturity securities. Noninterest income of $164.4 million was driven by gain on sale of loans ($85.4 million), syndication and asset management fees ($23.6 million), other income ($25.9 million), loan servicing fees net ($22.4 million), and mortgage warehouse fees ($7.1 million).
Net interest margin, calculated as net interest income divided by average earning assets, is not explicitly provided. The company's operating margin (income before income taxes divided by total revenue) was 22.0% for FY 2025, down from 29.1% in FY 2024. The decrease in profitability was primarily due to the significant increase in provision for credit losses and higher noninterest expenses. Noninterest expense increased by $76.1 million (34.0%), with salaries and employee benefits rising to $166.5 million from $130.7 million, deposit insurance expense increasing to $31.8 million from $26.2 million, and credit risk transfer premium expense rising to $21.0 million from $6.3 million.
Net cash used in operating activities was $341.2 million for FY 2025, compared to $835.3 million used in FY 2024. The operating cash flow was impacted by proceeds from sales of loans held for sale of $45.07 billion and loans and participations originated and purchased for sale of $45.31 billion. Net cash used in investing activities was $195.7 million, while net cash provided by financing activities was $272.5 million. Total assets increased to $19.45 billion from $18.81 billion. Loans receivable net of allowance for credit losses were $10.95 billion. Total deposits were $13.04 billion, with interest-bearing deposits of $12.44 billion. Total shareholders' equity was $2.28 billion. The company had borrowings of $3.84 billion.
The filing does not contain explicit forward-looking guidance or management projections for future periods. However, the company notes in its business description that it operates in multiple segments including Multi-family Mortgage Banking, Mortgage Warehousing, and Banking. The company's strategy focuses on complementary segments that diversify net income and provide synergies. Risk factors include credit risk, interest rate risk, and regulatory requirements. The company entered into a Memorandum of Understanding with the FDIC and IDFI in June 2025, agreeing to maintain certain capital thresholds and manage asset concentrations.