What happened?
Shares of diversified bank holding company Merchants Bancorp (NASDAQCM:MBIN) jumped 6.9% in the afternoon session after the company reported third-quarter diluted earnings per common share and revenue above analyst expectations. According to a company press release, Merchants Bancorp reported net income of $105.2 million, or $2.06 per diluted common share. That compared with $54.7 million, or 97 cents, a year earlier, and $78.3 million, or $1.48, in the second quarter. Diluted earnings per common share was above the consensus estimate of $1.39, and revenue of $224.94 million was above the consensus estimate of $182.95 million. Results included positive fair value adjustments of $28.2 million on servicing rights and $19.1 million on a floor derivative. Tangible book value per common share rose to a record $41.64.
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What is the market telling us
Merchants Bancorp’s shares are not very volatile and have only had 4 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 biggest move we wrote about over the last year was 9 months ago when the stock gained 16.3% on the news that the company reported fourth-quarter 2025 results that surpassed Wall Street's expectations for both earnings and revenue. The bank posted earnings per share of $1.28, easily clearing the analyst consensus of $0.97. Revenue for the quarter came in at $185.3 million, topping the $171.9 million analysts had forecast, though this represented a 4.4% decline from the previous year. The strong performance was driven by better-than-expected net interest income, a key measure of a bank's core lending profitability. Additionally, the company's tangible book value per share, a critical metric for bank valuation, grew by 9.8% year-over-year to $37.51, reflecting underlying value creation for shareholders.
Merchants Bancorp is up 58% since the beginning of the year, and at $52.42 per share, it is trading close to its 52-week high of $55.72 from August 2026. Investors who bought $1,000 worth of Merchants Bancorp’s shares 5 years ago would now be looking at an investment worth $1,770.
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