Merchants Bancorp, the parent of Merchants Bank of Indiana, has authorized a $100 million stock repurchase program that will expire on December 31, 2027. The board has granted the company the flexibility to buy shares in the open market or through other means at prices, quantities, and terms it deems appropriate and in the best interest of shareholders, subject to applicable laws and regulations.
The company also reported its Q4 2025 earnings, posting diluted earnings per share of $1.28 versus the consensus estimate of $0.94—a beat of $0.34 or 36%. Revenue reached $185.3 million, up 7.8% from the $171.9 million estimate, and 4.4% lower than the $193.8 million earned in the same quarter a year earlier. Net income was $67.8 million, a 27.8 million drop from the $95.7 million of Q4 2024 but a 13.1 million increase over the $54.7 million of Q3 2025.
The earnings beat was driven largely by record gains on the sale of multi‑family loans, the highest in company history, and a sharp improvement in asset quality. Non‑performing loans fell nearly one‑third and criticized loans dropped 13%, while the net interest margin rose 7 basis points to 2.89% quarter‑over‑quarter. Cost control was also a factor: non‑interest expense rose due to higher credit‑risk transfer premium, salary, and collateral‑preservation costs, but the margin expansion from the loan sales offset these increases.
Year‑over‑year, the company’s revenue and net income declined, reflecting a 4.4% drop in revenue and a 28% decline in net income. However, the quarter‑over‑quarter improvement—net income up 32% and EPS up 32% from Q3 2025—shows a positive momentum that management attributes to stronger core deposits, which grew 20% year‑over‑year and now represent 87% of total deposits.
CEO Michael F. Petrie highlighted the company’s “decisive shift,” noting that the record tangible book value of $37.51 per share and the strongest quarterly gain on multi‑family loan sales position Merchants for growth in 2026. He emphasized that the repurchase program signals confidence in the stock’s valuation and a commitment to returning capital to shareholders while maintaining flexibility for future market conditions.
The combination of a robust earnings beat, improving asset quality, and a sizable buyback authorization suggests that management is confident in the company’s valuation and future prospects. The program provides a mechanism to return excess capital to shareholders, while the earnings performance underscores operational strength and a solid foundation for continued growth.
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