A multifamily and mortgage-warehouse specialist posting record assets and tangible book value for a 30th straight quarter, whose short-duration, securitisation-driven model is built on process speed, with no disclosed AI programme.
How is Merchants Bank of Indiana using AI?
Merchants Bancorp, the Carmel, Indiana parent of Merchants Bank of Indiana, is a different animal from the community banks around it in the Federal Reserve's ranking: its three segments are multifamily mortgage banking, which originates, services and securitises multifamily and healthcare-facility loans and syndicates low-income housing tax credit funds, mortgage warehousing, which finances other lenders' pipelines, and banking, which holds portfolio loans and correspondent residential mortgages. That model produced second-quarter 2026 net income of $78.3 million, up 106% from a year earlier, or $1.48 per diluted share, up 147%, total assets of $21.2 billion, a fifth consecutive quarterly record, tangible book value per share of $39.93, a 30th consecutive record, liquidity of $13.0 billion, or 61% of assets, and a fifth straight quarterly decline in criticised loans after a 2025 in which net income had fallen 32% on a credit-provision spike. Chairman and CEO Michael Petrie credited 'the strength of our balance sheet, the benefit of improved credit metrics, and ongoing momentum in our business', and president and COO Michael Dunlap said the 'diversified business model continues to create multiple sources of earnings support in the current rate environment' with 10-year Treasury rates elevated. American Banker's top-performer analysis attributes the returns to a deliberately short-duration book across multifamily and warehouse lending. The company's filings and releases describe technology only in generic terms; there is no AI programme, leader, vendor or budget in them, and its customer content is wire-fraud guidance and rate promotions. Information technology sits under Kevin Langford, executive vice president and chief administrative officer, and the 2026 proxy names no chief information, data or AI officer. Its 2025 10-K does carry a risk factor headed 'Adoption of AI may present significant challenges relating to compliance risk, credit risk, reputation risk, and operational risk', but it has been in the filings since the 2023 10-K and describes the industry's AI use cases (chatbots, fraud detection, credit scoring) rather than any of its own. The Q2 2026 10-Q does not mention AI at all. The technology deals on record are not AI: in June 2025 the bank selected Clarifire's workflow-automation platform for loss mitigation, in August 2025 Alkami reported that MANTL-based online account opening raised more than $500 million of deposits in six weeks, and in September 2025 its mortgage division went live on Blue Sage's cloud digital lending platform for a new jumbo correspondent programme, with wholesale and retail channels to follow, and in August 2026 Blue Sage reported that jumbo correspondent volume had grown more than 200% since mid-2025, which it credits to workflow automation and standardised processes rather than AI. Merchants Bank of Indiana is an Indiana state nonmember bank supervised by the FDIC and the Indiana Department of Financial Institutions, with which it held a memorandum of understanding from 30 June 2025 until early 2026 after mortgage-fraud-related credit losses; its Ginnie Mae, Fannie Mae and Freddie Mac programmes also bring agency counterparty requirements. Treat this as a thin AI record for a bank whose edge is balance-sheet velocity.
Thin public record: No earnings-call transcripts or AI remarks found for its last four quarters, a 10-K whose only AI passage is a generic risk factor repeated since the 2023 filing, no named AI leader, vendor or budget, and three disclosed technology deals (Blue Sage, Clarifire, Alkami with MANTL), none described as AI.
Lead bank
Merchants Bank of Indiana
Assets (lead bank, Jun 30, 2026)
$21 billion
Charter
Indiana state nonmember bank (FDIC)
Headquarters
Carmel, IN
AI leadership
Michael F. Petrie · Michael J. Dunlap · Jerry Koors · Kevin T. Langford
- No AI programme, leader, vendor or budget disclosed; the 2025 10-K's AI risk factor is generic and names no AI use of its own.
- Model: multifamily and healthcare mortgage banking with securitisation, mortgage warehousing and portfolio banking; short-duration assets.
- Q2 2026 net income $78.3 million ($1.48 per share, +147% year on year); total assets a record $21.2 billion; tangible book value $39.93, a 30th consecutive record.
- Liquidity of $13.0 billion (61% of assets) with $5.5 billion of unused FHLB and discount-window capacity.
- Credit repair: fifth consecutive quarterly decline in criticised loans after 2025 net income fell 32% on provisions.
- Dividend raised 10% in February 2026, the eighth consecutive annual increase.
- Blue Sage digital lending platform live for jumbo correspondent lending since September 2025; rollout to wholesale and retail channels planned.
- The AI risk factor ('Adoption of AI may present significant challenges...') first appeared in the 10-K for 2023, filed 12 March 2024, and is repeated in the 2024 and 2025 10-Ks; the 2022 10-K had no AI passage and the Q2 2026 10-Q has none.
- Mortgage Warehousing funded $33.0 billion of loan principal in 2023, $45.6 billion in 2024 and $66.3 billion in 2025, and $42.5 billion in the first half of 2026; loans are typically held under 30 days before sale to an investor.
- Servicing portfolio at 30 June 2026: $21.5 billion serviced for others and $4.3 billion sub-serviced, primarily Ginnie Mae, Fannie Mae and Freddie Mac loans; the 10-K calls Merchants Capital one of the largest agency servicers.
- Information technology, consumer and commercial banking, marketing and project delivery report to Kevin Langford, executive vice president and chief administrative officer, who was chief information officer at First Financial Bank before joining in 2017; no chief data, AI or technology officer is named in filings.
- Mortgage fraud and suspected fraud among multifamily borrowers drove a $43.1 million rise in the Q2 2025 provision and $46.1 million of charge-offs; the bank signed a memorandum of understanding with the FDIC and Indiana regulator on 30 June 2025, terminated in the first quarter of 2026.
- Headcount rose from 618 (2023) to 663 (2024) and 735 (2025) employees, 424 of them in central Indiana, while the 10-K says core processing, mortgage servicing, wire, mobile and online banking, web hosting and deposit processing are bought from third parties.
What has Merchants Bank of Indiana done on AI, and when?
- Aug 27, 2026
Blue Sage reports 200%+ jumbo correspondent volume growth[8]
Vendor-reported: correspondent volume up more than 200% since the mid-2025 implementation, handled by the existing team through workflow automation and standardised processes; no AI is claimed.
- Aug 7, 2026
Second-quarter 2026 10-Q has no AI language[20]
The filing reports $42.5 billion of warehouse funding and $21.5 billion of loans serviced for others at 30 June 2026 and does not mention AI.
- Jul 28, 2026
Second-quarter 2026 results[3]
Net income $78.3 million; record assets and tangible book value; criticised loans down again.
- May 7, 2026
First-quarter 2026 10-Q[19]
'AI' appears only in the abbreviations list; there is no discussion of AI use or risk.
- Apr 28, 2026
First-quarter 2026 results[18]
Net income $67.7 million; $1.25 per diluted share; the 2025 memorandum of understanding with the FDIC and Indiana regulator was terminated during the quarter.
- Apr 10, 2026
2026 proxy names the executive who oversees technology[17]
Kevin Langford, executive vice president and chief administrative officer since 2017, oversees information technology and the project delivery team; the executive-officer list has no chief information, data or AI officer.
- Feb 27, 2026
2025 10-K repeats the AI risk factor[6]
AI adoption 'may present significant challenges' across compliance, credit, reputation and operational risk; the passage cites accountability, explainability, bias, privacy and third-party risks but describes no AI use by the company. Headcount 735; an Information Security Officer under the chief administrative officer runs a CIS- and NIST-based programme overseen by an IT committee that includes the president and COO.
- Feb 19, 2026
- Jan 28, 2026
Fourth-quarter 2025 results[4]
Total assets a record $19.4 billion; criticised loans down 13%; record multifamily gain on sale.
- Dec 18, 2025
HousingWire reports Merchants Bank chose Clarifire for loss mitigation[16]
The bank selected the Clarifire workflow platform for real-time rules application and automation in loss-mitigation and default processes; the article's AI features (call transcription) are a vendor product, and the bank has not said it uses them.
- Sep 17, 2025
Blue Sage digital lending platform goes live[5]
Powers a newly launched jumbo correspondent lending programme from loan registration through purchase, with a seller/TPO portal; the bank plans to extend it to wholesale and retail lending.
- Aug 21, 2025
Alkami reports Merchants Bank online account-opening results[14]
Vendor case study: more than $500 million of deposits in six weeks and $680 million in under a year, account-opening cost down 60%, with stronger fraud prevention and back-office automation; no AI is claimed.
- Jul 28, 2025
Second-quarter 2025 results: mortgage-fraud provisions[13]
Net income $38.0 million, down 50%; provision up $43.1 million on lower multifamily property values and the investigation of borrowers involved in mortgage fraud or suspected fraud; Dunlap said the bank was enhancing its risk management practices.
- Jul 24, 2025
Named among top-performing banks for lending niches[2]
Short-duration multifamily and warehouse strategy cited.
- Jun 30, 2025
- Feb 28, 2025
2024 10-K repeats the AI risk factor[12]
Same passage, with the glossary now defining 'AI'; headcount 663, of whom 388 in central Indiana; no AI use of its own described.
- Dec 11, 2024
Wire-transfer fraud guidance[1]
Customer education on spotting fraudulent payment requests.
- Mar 12, 2024
Where does Merchants Bank of Indiana use AI today?
| System | What it does | Status | Use case |
|---|---|---|---|
| Multifamily and healthcare mortgage banking with securitisation[3][2] | Origination, servicing and agency securitisation; LIHTC fund syndication. | In production | Credit scoring & underwriting |
| Mortgage warehouse financing[2] | Pipeline finance for other lenders, a process-intensive business. | In production | Third-party & vendor AI |
| Wire-fraud customer education[1] | Guidance on verifying payment instructions. | In production | Fraud detection |
| No disclosed AI deployment[3] | Earnings materials silent on AI. | Announced | AI governance (general) |
| AI risk-factor disclosure[6] | The 10-K lists lack of accountability and explainability, reliance on large volumes of data, potential bias, privacy, third-party, cybersecurity and consumer-protection concerns as risks of AI adoption. | In production | Model risk management |
| Information security programme under an IT committee[6] | Controls based on the CIS Critical Security Controls and the NIST Cybersecurity Framework, coordinated by an Information Security Officer; a board-established IT committee that includes the president and COO meets quarterly. | In production | Cybersecurity |
| Blue Sage Digital Lending Platform (not AI)[5][8] | Cloud loan-origination and purchase platform with automated workflow for jumbo correspondent lending; Blue Sage reports correspondent volume up more than 200% since mid-2025 without a matching increase in staff. Workflow automation, not AI. | In production | Third-party & vendor AI |
| Clarifire workflow automation for loss mitigation (not AI)[16] | SaaS rules and workflow platform selected for servicing loss-mitigation and default processes; HousingWire describes real-time rules application and workflow automation. The vendor's AI transcription is not stated to be in use at the bank. | Announced | Third-party & vendor AI |
| Alkami and MANTL online account opening (vendor-reported, not AI)[14] | Alkami reports that a new online account-opening approach raised more than $500 million of deposits in six weeks and $680 million in under a year, cut account-opening cost by 60% and strengthened fraud prevention; the case study claims automation, not AI. | In production | Third-party & vendor AI |
| Mortgage-fraud exposure in multifamily lending[13][18][6] | Mortgage fraud or suspected fraud by borrowers contributed to a $43.1 million rise in the Q2 2025 provision and $46.1 million of charge-offs; management said it was enhancing risk management practices. No detection technology is named, and the 10-K lists fraud detection only as an industry AI use case. | In production | Fraud detection |
| Regulatory memorandum of understanding, 2025 to 2026[15][19] | A confidential agreement with the FDIC and Indiana regulator from 30 June 2025 covered capital thresholds, asset concentrations and risk-mitigation plans; it ended in the first quarter of 2026. It does not mention AI. | In production | AI governance (general) |
| Credit risk transfer on multifamily and healthcare pools[3] | Credit default swaps and a credit-linked note since 2023, covering 13% to 15% of each pool; $2.2 billion of loans were protected at 30 June 2026, including a $169.9 million multifamily pool in June 2026. The release names no model or AI. | In production | Credit scoring & underwriting |
Use-case links open the tracker's rules-by-use-case matrix: which documents govern each system type.
What has Merchants Bank of Indiana disclosed in numbers?
| Metric | Value | As of |
|---|---|---|
| Q2 2026 net income / diluted EPS | $78.3 million (+106% year on year) / $1.48 (+147%)[3] | Jul 28, 2026 |
| Total assets / tangible book value per share | $21.2 billion (record) / $39.93 (30th consecutive record)[3] | Jun 30, 2026 |
| Liquidity | $13.0 billion (61% of assets); $5.5 billion unused borrowing capacity[3] | Jun 30, 2026 |
| Total capital ratio | 12.5%[3] | Jun 30, 2026 |
| Mortgage Warehousing funded loan principal | $33.0 billion (2023); $45.6 billion (2024); $66.3 billion (2025); $42.5 billion (first half of 2026)[6][20] | Jun 30, 2026 |
| Servicing portfolio | $21.5 billion serviced for others; $4.3 billion sub-serviced; $1.2 billion other[20] | Jun 30, 2026 |
| Employees | 735 (424 in central Indiana) at year-end 2025; 663 in 2024; 618 in 2023[6][12][11] | Dec 31, 2025 |
| Loans protected by credit default swaps | $2.2 billion, including a $169.9 million multifamily pool added in June 2026[3] | Jun 30, 2026 |
| Q2 2025 provision increase and charge-offs | Provision up $43.1 million (432%) to $53.0 million; $46.1 million of charge-offs on 14 customers, linked to appraisals and mortgage fraud[13][3] | Jun 30, 2025 |
| Alkami-reported deposit growth from online account opening | $500 million+ in six weeks; $680 million in under a year; account-opening cost down 60% (vendor-reported)[14] | Aug 21, 2025 |
“These results demonstrate the strength of our balance sheet, the benefit of improved credit metrics, and ongoing momentum in our business.”[3]
Michael F. Petrie · Chairman and CEO · Jul 28, 2026
“With 10-year Treasury rates remaining elevated, our diversified business model continues to create multiple sources of earnings support in the current rate environment.”[3]
Michael J. Dunlap · President and Chief Operating Officer · Jul 28, 2026
“The automation, transparency and flexibility of the platform gives our sellers a competitive advantage and gives us the confidence to expand further.”[5]
Jerry Koors · President of Mortgage · Sep 17, 2025
“We have implemented strategies to address our asset quality issues and to enhance our overall risk management practices to ensure long-term resilience.”[13]
Michael J. Dunlap · President and Chief Operating Officer · Jul 28, 2025
“marked by an increase in our provision for credit losses and charge-offs largely associated with mortgage fraud or suspected fraud that has also impacted a number of other multi-family lenders”[13]
Michael F. Petrie · Chairman and CEO · Jul 28, 2025
“Automation, standardized workflows, and greater operational visibility have allowed our existing team to manage substantially higher loan volume without a corresponding increase in staffing.”[8]
Jerry Koors · President of Mortgage · Aug 27, 2026
“Adoption of AI may present significant challenges relating to compliance risk, credit risk, reputation risk, and operational risk.”[6]
Merchants Bancorp · Form 10-K risk factor heading · Feb 27, 2026
Who runs AI at Merchants Bank of Indiana?
What AI roles is Merchants Bank of Indiana hiring for?
Data as of · 1 AI-titled posting · read from Merchants Bank of Indiana's own careers site, re-checked weekly
1 open AI-related posting on Merchants Bank of Indiana's careers site as of Oct 14, 2026. A snapshot of current openings, not a source: postings close. Compare with other banks on which banks are hiring for AI.
Carmel, Indiana · posted
Which regulators govern Merchants Bank of Indiana's AI?
| Authority | Why it matters here | Documents |
|---|---|---|
| FDIC | Merchants Bank of Indiana is a state nonmember bank; FDIC model-risk and third-party guidance would govern any AI in underwriting or warehouse operations. | FDIC FIL-29-2023 FDIC FIL-15-2026 |
| Federal Reserve | Holding-company oversight of a securitisation-heavy, agency-dependent model. | SR 11-7 SR 23-4 |
| CFPB | Correspondent residential mortgage banking brings adverse-action and servicing duties to any automated decisioning. | ECOA / Regulation B adverse action (15 U.S.C. 1691(d); 12 CFR 1002.9) |
Side by side: SR 11-7 vs SR 26-2 · PRA SS1/23 vs SR 26-2 · MAS AI Risk Management Guidelines vs SR 26-2 · OCC vs CFPB on AI lending · all comparisons.
What does the public record suggest about Merchants Bank of Indiana's AI strategy?
Analysis by BankingNewsAI from the sources cited on this page. Observations, not advice.
01
Warehouse lending is document automation waiting to happen
Funding other lenders' pipelines is a high-volume, document-heavy process where AI classification and exception handling pay quickly; nothing has been said.
02
Agency securitisation sets the data standard
Ginnie, Fannie and Freddie programmes already force structured loan data, a base most community banks lack for models.
03
Credit surveillance is the priority after 2025
A provision-driven earnings drop argues for early-warning analytics on multifamily and healthcare credits before anything customer-facing.
04
Velocity, not cost, is the AI case
A bank that earns on turnover would use AI to shorten cycle times rather than cut headcount.
Where does the Merchants Bank of Indiana record go deeper?
Which leader rankings does Merchants Bank of Indiana appear in?
2 of the computed leaders rankings include Merchants Bank of Indiana, each ranked from the same sourced bank pages.
How does Merchants Bank of Indiana compare with its peers?
- How does Merchants Bancorp compare with its peers on AI and technology?
- Merchants Bancorp competitors and alternatives, by business line
Its peer group on this site, by business model and size:
Does Merchants Bank of Indiana use AI?
Merchants Bancorp has not disclosed an AI programme, leader, vendor or budget. Its business is multifamily and healthcare mortgage banking with securitisation, mortgage warehousing and portfolio banking, and its customer content is limited to fraud guidance and rate promotions. Its 2025 10-K includes a generic AI risk factor, and its disclosed technology deals are non-AI: Blue Sage's digital lending platform for jumbo correspondent loans, Clarifire workflow automation for loss mitigation and Alkami with MANTL for online account opening.
How is Merchants Bancorp performing?
Second-quarter 2026 net income was $78.3 million, or $1.48 per diluted share, up 147% from a year earlier, with record total assets of $21.2 billion and a 30th consecutive record in tangible book value per share at $39.93, following a 2025 in which net income fell 32% on higher credit provisions.
Who leads AI at Merchants Bancorp?
No AI leader is named. Merchants Bancorp has no disclosed chief AI, data or technology officer. Its 2026 proxy gives information technology to Kevin Langford, executive vice president and chief administrative officer since 2017, who was chief information officer at First Financial Bank. The 10-K says the president and COO, Michael Dunlap, sits on the IT committee that governs cyber risk, and an unnamed Information Security Officer reports through Langford.
How has mortgage fraud affected Merchants Bancorp's risk management?
In the second quarter of 2025 the provision for credit losses rose $43.1 million to $53.0 million and charge-offs reached $46.1 million, largely on lower multifamily property values and borrowers involved in mortgage fraud or suspected fraud. Net income fell 50% year on year to $38.0 million. On 30 June 2025 Merchants Bank signed a memorandum of understanding with the FDIC and Indiana regulator covering capital and asset concentrations; it was terminated in the first quarter of 2026. Criticised loans have since fallen five quarters in a row to $444.7 million. No fraud-detection technology is named.
Which technology vendors does Merchants Bank of Indiana use?
Three third-party deployments are public, and none is described as AI. Blue Sage's cloud lending platform has run jumbo correspondent lending since September 2025, and Blue Sage reports volume up more than 200%. Clarifire's workflow platform was chosen for loss mitigation, according to HousingWire in December 2025. Alkami, with MANTL, reports online account opening that raised more than $500 million of deposits in six weeks. The 10-K adds that core processing, servicing, wires and mobile banking are outsourced, without naming providers.
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