Merchants Bancorp Q1 2026: EPS Edges Up to $1.25 as Core Deposits Hold Firm and MOU Ends

Earnings at a glance

MBIN reported first quarter 2026 net income of $67.7 million, yielding diluted earnings per common share (EPS) of $1.25. That compares with $58.2 million and $0.93 per share in the first quarter of 2025, and it sits just shy of the $1.28 per share recorded in the fourth quarter of 2025. In other words, the company’s quarterly earnings profile moved higher year over year but held steady versus the prior quarter.

• EPS: $1.25, up from $0.93 in Q1 2025; Q4 2025 EPS was $1.28.
• Net income: $67.7 million for the quarter, up about 16% year over year.
• Revenue context: the press release provides earnings and asset metrics but does not present a formal revenue forecast or explicit EPS consensus from analysts within the release.

Balance sheet and capital quality

The company tallies total assets of $20.3 billion, the highest level ever reported by Merchants Bancorp, reflecting an 8% increase versus March 31, 2025 and a 4% rise versus December 31, 2025. Tangible book value per common share reached a new peak of $38.55, up 10% from March 31, 2025 and 3% from December 31, 2025.

Key capital metrics remain robust, with the total capital ratio at 12.8%. The combination of durable capitalization and asset quality improvements supports a disciplined balance-sheet stance as the bank navigates dynamic rate environments.

Asset quality and liquidity dynamics

Asset quality continued to stabilize: criticized loans receivable stood at $505.5 million, down 31% from March 31, 2025, and essentially flat on a sequential basis. Liquidity remains ample, with $11.1 billion in liquid assets—roughly 55% of total assets—comprising unused borrowing capacity of $3.9 billion through the Federal Home Loan Bank and the Federal Reserve Discount Window, along with cash, short-term investments, and other liquid assets.

Loans receivable, net of allowance for credit losses, totaled $11.4 billion, rising 10% year over year and 4% quarter over quarter. Total deposits were $13.0 billion, up 4% from March 31, 2025, while core deposits of $12.1 billion grew 7% in the quarter. Brokered deposits declined about 50% to $886.5 million, helping core deposits represent 93% of total deposits.

On the funding side, the company repurchased 73,164 shares for $3.0 million under its previously authorized program. The liquidity and deposit mix shift toward core funding reduces reliance on brokered sources and aligns with prudence in a higher-rate environment.

Regulatory status and near-term catalysts

The quarter also included the termination of Merchants’ Memorandum of Understanding (MOU) with the FDIC and the Iowa Division of Financial Institutions (IDFI) in mid-2025, signaling regulatory clearance to focus on organic growth and capital deployment rather than remediation steps. This milestone can clear a path for higher efficiency and modest capital returns going forward, subject to earnings stability and credit quality.

What it might portend for Merchants and peers

From a strategic standpoint, MBIN’s results underscore a few recurring themes in mid-sized banks: durable EPS growth driven by loan growth and disciplined cost of funds, a deposit profile leaning heavily on core funding, and a capital position that remains comfortably above regulatory minimums. The 93% core deposit composition—paired with a substantial liquidity cushion—gives Merchants a buffer to navigate potential rate volatility and evolving funding costs, a dynamic factor for sector peers facing similar liquidity considerations.

For investors and rivals, the salient questions center on how MBIN uses its strong liquidity and capital to fund attractive loan opportunities, whether fee growth from other banking lines will offset any margin compression, and how the bank manages credit risk as asset mixes shift in a higher-rate, higher-competition landscape. The absence of an explicit revenue forecast or EPS consensus in the release means the market will likely turn to guidance or commentary in subsequent filings and calls to gauge forward momentum.

Takeaways for investors

MBIN offers a tidy combination of earnings resilience, balance-sheet strength, and regulatory clearance. The Q1 2026 numbers show the earnings engine continuing to chug along, with a notable uptick in EPS versus a year ago and a stable sequential rhythm. The improvement in asset quality, combined with a robust deposit base and ample liquidity, points to a bank that can weather modest slower growth with less disruption to earnings power. The next step is watching for any forward-looking commentary on lending momentum, margin trajectory, and capital deployment—critical inputs to a credible revenue forecast and an informed view on whether there is any earnings surprise potential relative to consensus expectations.

SEO note for the curious: ticker MBIN, EPS, earnings surprise, EPS consensus, and revenue forecast are all in play as terms readers will use to frame the quarter’s significance. The absence of explicit consensus data in the release doesn’t mean consensus doesn’t exist; it simply hasn’t been published here. The real test will come with guidance on retuning capital, potential buybacks, or dividend adjustments as the regulatory backdrop normalizes and the bank weighs growth opportunities against risk controls.