Weekly Real Estate News
Merchants Bancorp reported third-quarter 2026 net income of $105.2 million, up 92% from a year earlier, as mortgage servicing and derivative valuations boosted noninterest income.
The Carmel, Indiana-based company said in its October 28 earnings release that it acquired The Loan Exchange on September 14 for $13.9 million. The September acquisition is intended to strengthen Merchants’ single-family mortgage production and expand its presence in jumbo lending; it was not a transaction that closed October 28.
Results benefited from $28.2 million in positive fair-value adjustments to servicing rights and $19.1 million from a floor derivative. These gains are important to distinguish from recurring mortgage origination income, particularly when comparing quarterly profitability.
Nonperforming loans declined 12% from the second quarter to $180.3 million, while criticized loans rose 3% to $460.1 million. The bank reported a $12 million provision for credit losses.
Management cautioned that integrating the acquired mortgage operations could raise near-term expenses and dilute earnings during the initial ramp-up. Merchants’ results highlight how servicing and hedging values can offset pressure on mortgage production and gain-on-sale revenue.
Primary source: Company announcement and financial disclosure.
