Why Merchants Bancorp (MBIN) Stock Is Trading Up Today

Diversified bank holding company Merchants Bancorp (NASDAQCM:MBIN) beat Wall Street’s revenue expectations in Q4 CY2025, but sales fell by 4.4% year on year to $185.3 million. Its GAAP profit of $1.28 per share was 32% above analysts’ consensus estimates.

Merchants Bancorp (MBIN) Q4 CY2025 Highlights:

• Net Interest Income: $138.1 million vs analyst estimates of $129.7 million (2.6% year-on-year growth, 6.5% beat)
• Net Interest Margin: 2.9% vs analyst estimates of 2.8% (8.5 basis point beat)
• Revenue: $185.3 million vs analyst estimates of $171.9 million (4.4% year-on-year decline, 7.8% beat)
• Efficiency Ratio: 45.1% vs analyst estimates of 45.9% (71 basis point beat)
• EPS (GAAP): $1.28 vs analyst estimates of $0.97 (32% beat)
• Tangible Book Value per Share: $37.51 vs analyst estimates of $37.18 (9.8% year-on-year growth, 0.9% beat)
• Market Capitalization: $1.62 billion

"This quarter reflects a decisive shift for Merchants. Asset quality improved meaningfully, with criticized loans down 13% and nonperforming loans reduced by nearly one-third during the quarter. We also achieved a record tangible book value of $37.51 per share and the strongest quarterly gain on sale of multi-family loans in our history. While total assets increased to $19.4 billion—the highest level reported in company history—the real story is the progress we've made in strengthening credit quality and positioning the company for growth in 2026," said Michael F. Petrie, Chairman and CEO of Merchants.

Company Overview

With a strategic focus on low-risk, government-backed lending programs, Merchants Bancorp (NASDAQCM:MBIN) is an Indiana-based bank holding company specializing in multi-family mortgage banking, mortgage warehousing, and traditional banking services.

Sales Growth

Two primary revenue streams drive bank earnings. While net interest income, which is earned by charging higher rates on loans than paid on deposits, forms the foundation, fee-based services across banking, credit, wealth management, and trading operations provide additional income. Over the last five years, Merchants Bancorp grew its revenue at an impressive 14.1% compounded annual growth rate. Its growth beat the average banking company and shows its offerings resonate with customers.

We at StockStory place the most emphasis on long-term growth, but within financials, a half-decade historical view may miss recent interest rate changes, market returns, and industry trends. Merchants Bancorp’s annualized revenue growth of 10% over the last two years is below its five-year trend, but we still think the results were respectable.

This quarter, Merchants Bancorp’s revenue fell by 4.4% year on year to $185.3 million but beat Wall Street’s estimates by 7.8%.

Net interest income made up 74% of the company’s total revenue during the last five years, meaning lending operations are Merchants Bancorp’s largest source of revenue.

Net interest income commands greater market attention due to its reliability and consistency, whereas non-interest income is often seen as lower-quality revenue that lacks the same dependable characteristics.

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Tangible Book Value Per Share (TBVPS)

Banks profit by intermediating between depositors and borrowers, making them fundamentally balance sheet-driven enterprises. Market participants emphasize balance sheet quality and sustained book value growth when evaluating these institutions.

Because of this, tangible book value per share (TBVPS) emerges as the critical performance benchmark. By excluding intangible assets with uncertain liquidation values, this metric captures real, liquid net worth per share. EPS can become murky due to acquisition impacts or accounting flexibility around loan provisions, and TBVPS resists financial engineering manipulation.

Merchants Bancorp’s TBVPS grew at an incredible 22.8% annual clip over the last five years. TBVPS growth has recently decelerated to 17% annual growth over the last two years (from $27.40 to $37.51 per share).

Over the next 12 months, Consensus estimates call for Merchants Bancorp’s TBVPS to grow by 11.2% to $41.71, mediocre growth rate.

Key Takeaways from Merchants Bancorp’s Q4 Results

It was good to see Merchants Bancorp beat analysts’ EPS expectations this quarter. We were also excited its net interest income outperformed Wall Street’s estimates by a wide margin. Zooming out, we think this was a good print with some key areas of upside. The stock remained flat at $34.98 immediately after reporting.

Is Merchants Bancorp an attractive investment opportunity at the current price? When making that decision, it’s important to consider its valuation, business qualities, as well as what has happened in the latest quarter. We cover that in our actionable full research report which you can read here (it’s free).

Diversified bank holding company Merchants Bancorp (NASDAQCM:MBIN) will be reporting earnings this Wednesday after the bell. Here’s what you need to know.

Merchants Bancorp beat analysts’ revenue expectations by 3% last quarter, reporting revenues of $171.1 million, up 14.4% year on year. It was a very strong quarter for the company, with a beat of analysts’ EPS estimates and a solid beat of analysts’ revenue estimates.

Is Merchants Bancorp a buy or sell going into earnings? Read our full analysis here, it’s free for active Edge members.

This quarter, analysts are expecting Merchants Bancorp’s revenue to decline 11.3% year on year to $171.9 million, a reversal from the 22% increase it recorded in the same quarter last year. Adjusted earnings are expected to come in at $0.94 per share.

Analysts covering the company have generally reconfirmed their estimates over the last 30 days, suggesting they anticipate the business to stay the course heading into earnings. Merchants Bancorp has missed Wall Street’s revenue estimates three times over the last two years.

Looking at Merchants Bancorp’s peers in the regional banks segment, some have already reported their Q4 results, giving us a hint as to what we can expect. ServisFirst Bancshares delivered year-on-year revenue growth of 20.7%, beating analysts’ expectations by 5%, and Dime Community Bancshares reported revenues up 24.5%, topping estimates by 5.2%. ServisFirst Bancshares traded up 14.6% following the results while Dime Community Bancshares was also up 12.5%.

Read our full analysis of ServisFirst Bancshares’s results here and Dime Community Bancshares’s results here.

There has been positive sentiment among investors in the regional banks segment, with share prices up 3.1% on average over the last month. Merchants Bancorp is up 5.8% during the same time and is heading into earnings with an average analyst price target of $41.33 (compared to the current share price of $35.35).

What Happened?

A number of stocks jumped in the afternoon session after comments from a key Federal Reserve official boosted hopes for an interest rate cut. New York Federal Reserve President John Williams stated he sees “room for a further adjustment” in the near term, sparking a significant market rally. Following his remarks, the probability of the central bank cutting rates at its December meeting jumped from 39% to over 73%, according to the CME FedWatch tool. This positive sentiment provided relief to markets amid concerns over high valuations, particularly in AI-related stocks.

The stock market overreacts to news, and big price drops can present good opportunities to buy high-quality stocks.

Among others, the following stocks were impacted:

• Regional Banks company Merchants Bancorp jumped 3.9%. Is now the time to buy Merchants Bancorp? Access our full analysis report here, it’s free for active Edge members.
• Regional Banks company First Financial Bankshares jumped 3.8%. Is now the time to buy First Financial Bankshares? Access our full analysis report here, it’s free for active Edge members.
• Regional Banks company First Commonwealth Financial jumped 3.9%. Is now the time to buy First Commonwealth Financial? Access our full analysis report here, it’s free for active Edge members.
• Regional Banks company F.N.B. Corporation jumped 3.9%. Is now the time to buy F.N.B. Corporation? Access our full analysis report here, it’s free for active Edge members.
• Regional Banks company 1st Source jumped 3.9%. Is now the time to buy 1st Source? Access our full analysis report here, it’s free for active Edge members.

Zooming In On 1st Source (SRCE)

1st Source’s shares are not very volatile and have only had 3 moves greater than 5% over the last year. In that context, today’s move indicates the market considers this news meaningful, although it might not be something that would fundamentally change its perception of the business.

The previous big move we wrote about was 28 days ago when the stock gained 3.4% on the news that a cooler-than-expected inflation report fueled optimism for potential Federal Reserve interest rate cuts. 

The September Consumer Price Index (CPI) report indicated a 3.0% year-over-year increase in prices, just below the 3.1% that economists had forecast. While still above the Federal Reserve's 2% target, investors interpreted this softer inflation reading as a sign that price pressures are easing. This development increases the likelihood that the central bank may move to cut interest rates. Lower interest rates can benefit banks by reducing their cost of funding and potentially stimulating loan demand from businesses and consumers. The positive sentiment was widespread, contributing to a broader market rally that saw the S&P 500, Dow, and Nasdaq all reach new record highs.

1st Source is up 7.6% since the beginning of the year, and at $62.18 per share, it is trading close to its 52-week high of $67.65 from February 2025. Investors who bought $1,000 worth of 1st Source’s shares 5 years ago would now be looking at an investment worth $1,617.

As the Q3 earnings season wraps, let’s dig into this quarter’s best and worst performers in the regional banks industry, including Merchants Bancorp and its peers.

Regional banks, financial institutions operating within specific geographic areas, serve as intermediaries between local depositors and borrowers. They benefit from rising interest rates that improve net interest margins (the difference between loan yields and deposit costs), digital transformation reducing operational expenses, and local economic growth driving loan demand. However, these banks face headwinds from fintech competition, deposit outflows to higher-yielding alternatives, credit deterioration (increasing loan defaults) during economic slowdowns, and regulatory compliance costs. Recent concerns about regional bank stability following high-profile failures and significant commercial real estate exposure present additional challenges.

The 94 regional banks stocks we track reported a satisfactory Q3. As a group, revenues missed analysts’ consensus estimates by 1.1%.

In light of this news, share prices of the companies have held steady. On average, they are relatively unchanged since the latest earnings results.

Merchants Bancorp

With a strategic focus on low-risk, government-backed lending programs, Merchants Bancorp (NASDAQCM:MBIN) is an Indiana-based bank holding company specializing in multi-family mortgage banking, mortgage warehousing, and traditional banking services.

Merchants Bancorp reported revenues of $171.1 million, up 14.4% year on year. This print exceeded analysts’ expectations by 3%. Overall, it was a very strong quarter for the company with a beat of analysts’ EPS and revenue estimates.

Unsurprisingly, the stock is down 2.4% since reporting and currently trades at $31.59.

Is now the time to buy Merchants Bancorp? Access our full analysis of the earnings results here, it’s free for active Edge members.

Best Q3: Customers Bancorp

Originally founded with a "high-tech, high-touch" branch-light banking strategy, Customers Bancorp is a bank holding company that provides commercial and consumer banking services through its Customers Bank subsidiary, with a focus on business lending and digital banking.

Customers Bancorp reported revenues of $232.1 million, up 38.5% year on year, outperforming analysts’ expectations by 7%. The business had a stunning quarter with an impressive beat of analysts’ net interest income estimates and a solid beat of analysts’ revenue estimates.

The market seems content with the results as the stock is up 2.2% since reporting. It currently trades at $66.99.

Is now the time to buy Customers Bancorp? Access our full analysis of the earnings results here, it’s free for active Edge members.

Weakest Q3: The Bancorp

Operating behind the scenes of many popular fintech apps and prepaid cards you might use daily, The Bancorp is a bank holding company that specializes in providing banking services to fintech companies and offering specialty lending products.

The Bancorp reported revenues of $174.6 million, up 38.8% year on year, falling short of analysts’ expectations by 10%. It was a disappointing quarter as it posted a significant miss of analysts’ revenue and net interest income estimates.

As expected, the stock is down 20% since the results and currently trades at $61.62.

Read our full analysis of The Bancorp’s results here.

First Busey

Tracing its roots back to 1868 during America's post-Civil War reconstruction era, First Busey is a bank holding company that provides commercial and retail banking, wealth management, and payment technology solutions across Illinois, Missouri, Florida, and Indiana.

First Busey reported revenues of $196.3 million, up 66.8% year on year. This result met analysts’ expectations. Zooming out, it was a mixed quarter as it also produced an impressive beat of analysts’ tangible book value per share estimates but a narrow beat of analysts’ EPS estimates.

The stock is flat since reporting and currently trades at $23.27.

Read our full, actionable report on First Busey here, it’s free for active Edge members.

Texas Capital Bank

Founded during the Texas banking renaissance of the 1990s with an entrepreneurial spirit, Texas Capital Bancshares is a financial services firm that provides banking, wealth management, and investment banking services to businesses and individuals across Texas and beyond.

Texas Capital Bank reported revenues of $340.4 million, up 11.6% year on year. This number surpassed analysts’ expectations by 4.1%. It was an exceptional quarter as it also recorded a beat of analysts’ EPS estimates and an impressive beat of analysts’ revenue estimates.

The stock is up 3.1% since reporting and currently trades at $84.65.

Read our full, actionable report on Texas Capital Bank here, it’s free for active Edge members.

Market Update

As a result of the Fed’s rate hikes in 2022 and 2023, inflation has come down from frothy levels post-pandemic. The general rise in the price of goods and services is trending towards the Fed’s 2% goal as of late, which is good news. The higher rates that fought inflation also didn't slow economic activity enough to catalyze a recession. So far, soft landing. This, combined with recent rate cuts (half a percent in September 2024 and a quarter percent in November 2024) have led to strong stock market performance in 2024. The icing on the cake for 2024 returns was Donald Trump’s victory in the U.S. Presidential Election in early November, sending major indices to all-time highs in the week following the election. Still, debates around the health of the economy and the impact of potential tariffs and corporate tax cuts remain, leaving much uncertainty around 2025.