Merchants Bancorp (MBIN) 10-Q 8 Nov 19 2019 Q3 Quarterly report Financial data

Document and Entity Information

Document and Entity Information - shares	9 Months Ended
	Sep. 30, 2019	Nov. 05, 2019
Document and Entity Information
Entity Registrant Name	MERCHANTS BANCORP
Entity Central Index Key	0001629019
Document Type	10-Q
Document Period End Date	Sep. 30, 2019
Amendment Flag	false
Current Fiscal Year End Date	--12-31
Entity Current Reporting Status	Yes
Entity Filer Category	Accelerated Filer
Entity Emerging Growth Company	true
Entity Ex Transition Period	false
Entity Small Business	false
Entity Shell Company	false
Entity Common Stock, Shares Outstanding		28,706,438
Document Fiscal Year Focus	2019
Document Fiscal Period Focus	Q3

Condensed Consolidated Balance

Condensed Consolidated Balance Sheets - USD ($) $ in Thousands	Sep. 30, 2019	Dec. 31, 2018
Assets
Cash and due from banks	$ 15,614	$ 25,855
Interest-earning demand accounts	349,362	310,669
Cash and cash equivalents	364,976	336,524
Securities purchased under agreements to resell	6,760	6,875
Trading securities	227,914	163,419
Available for sale securities	308,673	331,071
Federal Home Loan Bank (FHLB) stock	18,808	7,974
Loans held for sale (includes $23,357 and $11,886, respectively at fair value)	2,498,538	832,455
Loans receivable, net of allowance for loan losses of $13,705 and $12,704, respectively	2,742,088	2,045,423
Premises and equipment, net	29,211	15,136
Mortgage servicing rights	71,989	77,844
Interest receivable	18,780	13,827
Goodwill	15,574	17,477
Intangible assets, net	4,182	3,542
Other assets and receivables	29,693	32,596
Total assets	6,337,186	3,884,163
Deposits
Noninterest-bearing	198,843	182,879
Interest-bearing	5,300,806	3,048,207
Total deposits	5,499,649	3,231,086
Borrowings	159,673	195,453
Other liabilities	48,425	36,387
Total liabilities	5,707,747	3,462,926
Commitments and Contingencies
Shareholders' Equity
Common stock, without par value Authorized - 50,000,000 shares Issued and outstanding - 28,706,438 shares at September 30, 2019 and 28,694,036 shares at December 31, 2018	135,507	135,057
Retained earnings	280,551	244,909
Accumulated other comprehensive income (loss)	692	(310)
Total shareholders' equity	629,439	421,237
Total liabilities and shareholders' equity	6,337,186	3,884,163
8% Preferred Stock
Shareholders' Equity
Preferred stock	41,581	$ 41,581
7% Preferred Stock
Shareholders' Equity
Preferred stock	50,245
6% Preferred Stock
Shareholders' Equity
Preferred stock	$ 120,863

Condensed Consolidated Balanc_2

Condensed Consolidated Balance Sheets (Parenthetical) - USD ($) $ in Thousands	9 Months Ended	12 Months Ended
	Sep. 30, 2019	Dec. 31, 2018
Loans held for sale at fair value	$ 23,357	$ 11,886
Allowance for loans losses	$ 13,705	$ 12,704
Stockholders' Equity:
Common stock, without par value (in dollars per share)
Common stock, shares authorized	50,000,000	50,000,000
Common stock, shares issued	28,706,438	28,694,036
Common stock, shares outstanding	28,706,438	28,694,036
Preferred stock, without par value (in dollars per share)
Preferred stock, shares authorized	5,000,000	5,000,000
8% Preferred Stock
Stockholders' Equity:
Preferred stock, dividend rate (as a percent)	8.00%	8.00%
Preferred stock liquidation preference (in dollars per share)	$ 1,000	$ 1,000
Preferred stock, shares authorized	50,000	50,000
Preferred stock, shares issued	41,625	41,625
Preferred stock, shares outstanding	41,625	41,625
7% Preferred Stock
Stockholders' Equity:
Preferred stock, dividend rate (as a percent)	7.00%
Preferred stock liquidation preference (in dollars per share)	$ 25
Preferred stock, shares authorized	3,500,000
Preferred stock, shares issued	2,081,800
Preferred stock, shares outstanding	2,081,800
6% Preferred Stock
Stockholders' Equity:
Preferred stock, dividend rate (as a percent)	6.00%
Preferred stock liquidation preference (in dollars per share)	$ 1,000
Preferred stock, shares authorized	125,000
Preferred stock, shares issued	125,000
Preferred stock, shares outstanding	125,000
Depositary shares	5,000,000

Condensed Consolidated Statemen

Condensed Consolidated Statements of Income - USD ($)	3 Months Ended		9 Months Ended
	Sep. 30, 2019	Sep. 30, 2018	Sep. 30, 2019	Sep. 30, 2018
Interest Income
Loans	$ 52,779,000	$ 32,056,000	$ 129,599,000	$ 85,458,000
Investment securities:
Trading	1,422,000	1,299,000	4,434,000	3,777,000
Available for sale - taxable	1,604,000	1,541,000	4,632,000	4,708,000
Available for sale - tax exempt	68,000		217,000
Federal Home Loan Bank stock	262,000	87,000	742,000	297,000
Other	3,626,000	2,594,000	8,572,000	6,498,000
Total interest income	59,761,000	37,577,000	148,196,000	100,738,000
Interest Expense
Deposits	26,039,000	11,670,000	59,610,000	28,427,000
Borrowed funds	1,098,000	2,425,000	3,909,000	6,515,000
Total interest expense	27,137,000	14,095,000	63,519,000	34,942,000
Net Interest Income	32,624,000	23,482,000	84,677,000	65,796,000
Provision for loan losses	1,193,000	617,000	1,947,000	3,021,000
Net Interest Income After Provision for Loan Losses	31,431,000	22,865,000	82,730,000	62,775,000
Noninterest Income
Gain on sale of loans	8,312,000	8,825,000	20,059,000	27,548,000
Loan servicing fees, net	(1,410,000)	1,851,000	(3,318,000)	4,084,000
Mortgage warehouse fees	2,699,000	778,000	4,590,000	1,948,000
Gains/(losses) on sale of investments available for sale (includes $0, $0, $124, and $0, respectively, related to accumulated other comprehensive earnings reclassifications)			124,000
Other income	1,251,000	453,000	2,931,000	1,270,000
Total noninterest income	10,852,000	11,907,000	24,386,000	34,850,000
Noninterest Expense
Salaries and employee benefits	9,139,000	7,842,000	27,671,000	21,597,000
Loan expenses	1,248,000	1,254,000	3,527,000	3,512,000
Occupancy and equipment	994,000	736,000	2,816,000	2,062,000
Professional fees	508,000	590,000	1,500,000	1,755,000
Deposit insurance expense	859,000	269,000	1,354,000	751,000
Technology expense	674,000	412,000	1,775,000	996,000
Other expense	2,100,000	1,346,000	5,834,000	4,046,000
Total noninterest expense	15,522,000	12,449,000	44,477,000	34,719,000
Income Before Income Taxes	26,761,000	22,323,000	62,639,000	62,906,000
Provision for income taxes (includes $0, $0, $(31) and $0, respectively, related to income tax (expense)/benefit for reclassification items)	6,502,000	5,584,000	15,371,000	15,454,000
Net Income	20,259,000	16,739,000	47,268,000	47,452,000
Dividends on preferred stock	(3,022,000)	(833,000)	(5,598,000)	(2,498,000)
Net Income Allocated to Common Shareholders	$ 17,237,000	$ 15,906,000	$ 41,670,000	$ 44,954,000
Basic Earnings Per Share (in dollar per share)	$ 0.60	$ 0.55	$ 1.45	$ 1.57
Diluted Earnings Per Share (in dollar per share)	$ 0.60	$ 0.55	$ 1.45	$ 1.57
Weighted-Average Shares Outstanding Basic (in Shares)	28,706,438	28,694,036	28,704,682	28,692,591
Weighted-Average Shares Outstanding Diluted (in Shares)	28,744,953	28,727,822	28,742,911	28,719,740

Condensed Consolidated Statem_2

Condensed Consolidated Statements of Income (Parenthetical) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2019	Sep. 30, 2018	Sep. 30, 2019	Sep. 30, 2018
Consolidated Statements of Income
Reclassifications included in gains/(losses) on sale of investments	$ 0	$ 0	$ 124	$ 0
Provision for income taxes related to income tax (expense)/benefit for reclassification items	$ 0	$ 0	$ (31)	$ 0

Condensed Consolidated Statem_3

Condensed Consolidated Statements of Comprehensive Income - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2019	Sep. 30, 2018	Sep. 30, 2019	Sep. 30, 2018
Consolidated Statements of Comprehensive Income
Net Income	$ 20,259	$ 16,739	$ 47,268	$ 47,452
Other Comprehensive Income (Loss):
Net change in unrealized gains/(losses) on investment securities available for sale, net of tax (expense)/benefits of $(7), $(58), $(352), and $(15), respectively	52	173	1,095	(48)
Less: Reclassification adjustment for gains/(losses) included in net income, net of tax (expense)/benefits of $0, $0, $(31), and $0, respectively			93
Other comprehensive income (loss) for the period	52	173	1,002	(48)
Comprehensive Income	$ 20,311	$ 16,912	$ 48,270	$ 47,404

Condensed Consolidated Statem_4

Condensed Consolidated Statements of Comprehensive Income (Parenthetical) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2019	Sep. 30, 2018	Sep. 30, 2019	Sep. 30, 2018
Consolidated Statements of Comprehensive Income
Net change in unrealized gains/(losses) on investment securities available for sale, net of tax (expense)/ benefits	$ (7)	$ (58)	$ (352)	$ (15)
Reclassification adjustment for gains/(losses) included in net income, tax (expense)/benefits	$ 0	$ 0	$ (31)	$ 0

Condensed Consolidated Statem_5

Condensed Consolidated Statement of Shareholders' Equity - USD ($) $ in Thousands	Common Stock	Preferred Stock8% Preferred Stock	Preferred Stock7% Preferred Stock	Preferred Stock6% Preferred Stock	Retained Earnings	Accumulated Other Comprehensive Income (Loss)	8% Preferred Stock	7% Preferred Stock	6% Preferred Stock	Total
Balance at beginning of the period at Dec. 31, 2017	$ 134,891				$ 192,008	$ (1,006)	$ 41,581			$ 367,474
Balance at beginning of the period (in shares) at Dec. 31, 2017	28,685,167						41,625
Condensed Consolidated Statements of Shareholders’ Equity
Net income					15,061					15,061
Shares issued for stock compensation plans	$ 50									50
Shares issued for stock compensation plans (in shares)	7,039
Dividends on 8% preferred stock					(833)					(833)
Dividends on common stock					(1,721)					(1,721)
Reclassification of deferred tax asset due to tax reform					243	(243)
Other comprehensive income (loss)						(318)				(318)
Balance at end of the period at Mar. 31, 2018	$ 134,941				204,758	(1,567)	$ 41,581			379,713
Balance at end of the period (in shares) at Mar. 31, 2018	28,692,206						41,625
Balance at beginning of the period at Dec. 31, 2017	$ 134,891				192,008	(1,006)	$ 41,581			367,474
Balance at beginning of the period (in shares) at Dec. 31, 2017	28,685,167						41,625
Condensed Consolidated Statements of Shareholders’ Equity
Net income										47,452
Other comprehensive income (loss)										(48)
Balance at end of the period at Sep. 30, 2018	$ 135,021				232,041	(1,297)	$ 41,581			407,346
Balance at end of the period (in shares) at Sep. 30, 2018	28,694,036						41,625
Balance at beginning of the period at Mar. 31, 2018	$ 134,941				204,758	(1,567)	$ 41,581			379,713
Balance at beginning of the period (in shares) at Mar. 31, 2018	28,692,206						41,625
Condensed Consolidated Statements of Shareholders’ Equity
Net income					15,652					15,652
Shares issued for stock compensation plans	$ 11									11
Shares issued for stock compensation plans (in shares)	1,830
Dividends on 8% preferred stock					(832)					(832)
Dividends on common stock					(1,722)					(1,722)
Other comprehensive income (loss)						97				97
Balance at end of the period at Jun. 30, 2018	$ 134,952				217,856	(1,470)	$ 41,581			392,919
Balance at end of the period (in shares) at Jun. 30, 2018	28,694,036						41,625
Condensed Consolidated Statements of Shareholders’ Equity
Net income					16,739					16,739
Shares issued for stock compensation plans	$ 69									69
Dividends on 8% preferred stock					(833)					(833)
Dividends on common stock					(1,721)					(1,721)
Other comprehensive income (loss)						173				173
Balance at end of the period at Sep. 30, 2018	$ 135,021				232,041	(1,297)	$ 41,581			407,346
Balance at end of the period (in shares) at Sep. 30, 2018	28,694,036						41,625
Balance at beginning of the period at Dec. 31, 2018	$ 135,057	$ 41,581			244,909	(310)				421,237
Balance at beginning of the period (in shares) at Dec. 31, 2018	28,694,036	41,625
Condensed Consolidated Statements of Shareholders’ Equity
Net income					10,570					10,570
Shares issued for stock compensation plans	$ 133									133
Shares issued for stock compensation plans (in shares)	10,127
Issuance of shares			$ 48,269							48,269
Issuance of shares (in shares)			2,000,000
Dividends on 8% preferred stock					(833)					(833)
Dividends on common stock					(2,009)					(2,009)
Other comprehensive income (loss)						464				464
Balance at end of the period at Mar. 31, 2019	$ 135,190	$ 41,581	$ 48,269		252,637	154				477,831
Balance at end of the period (in shares) at Mar. 31, 2019	28,704,163	41,625	2,000,000
Balance at beginning of the period at Dec. 31, 2018	$ 135,057	$ 41,581			244,909	(310)				421,237
Balance at beginning of the period (in shares) at Dec. 31, 2018	28,694,036	41,625
Condensed Consolidated Statements of Shareholders’ Equity
Net income										47,268
Other comprehensive income (loss)										1,002
Balance at end of the period at Sep. 30, 2019	$ 135,507	$ 41,581	$ 50,245	$ 120,863	280,551	692				629,439
Balance at end of the period (in shares) at Sep. 30, 2019	28,706,438	41,625	2,081,800	125,000
Balance at beginning of the period at Mar. 31, 2019	$ 135,190	$ 41,581	$ 48,269		252,637	154				477,831
Balance at beginning of the period (in shares) at Mar. 31, 2019	28,704,163	41,625	2,000,000
Condensed Consolidated Statements of Shareholders’ Equity
Net income					16,439					16,439
Shares issued for stock compensation plans	$ 184									184
Shares issued for stock compensation plans (in shares)	2,275
Issuance of shares			$ 23,826							23,826
Issuance of shares (in shares)			955,800
Dividends on 8% preferred stock					(832)					(832)
Dividends on 7% preferred stock					(911)					(911)
Dividends on common stock					(2,010)					(2,010)
Other comprehensive income (loss)						486				486
Balance at end of the period at Jun. 30, 2019	$ 135,374	$ 41,581	$ 72,095		265,323	640				515,013
Balance at end of the period (in shares) at Jun. 30, 2019	28,706,438	41,625	2,955,800
Condensed Consolidated Statements of Shareholders’ Equity
Net income					20,259					20,259
Shares issued for stock compensation plans	$ 133									133
Issuance of shares				$ 120,863					$ 120,863
Issuance of shares (in shares)				125,000
Repurchase of Preferred Stock			$ (21,850)					$ (21,850)
Repurchase of Preferred Stock (in shares)			(874,000)
Dividends on 8% preferred stock					(833)					(833)
Dividends on 7% preferred stock					(1,293)					(1,293)
Dividends on 6% preferred stock					(896)					(896)
Dividends on common stock					(2,009)					(2,009)
Other comprehensive income (loss)						52				52
Balance at end of the period at Sep. 30, 2019	$ 135,507	$ 41,581	$ 50,245	$ 120,863	$ 280,551	$ 692				$ 629,439
Balance at end of the period (in shares) at Sep. 30, 2019	28,706,438	41,625	2,081,800	125,000

Condensed Consolidated Statem_6

Condensed Consolidated Statement of Shareholders' Equity (Parenthetical) - USD ($)	3 Months Ended
	Sep. 30, 2019	Jun. 30, 2019	Mar. 31, 2019	Sep. 30, 2018	Jun. 30, 2018	Mar. 31, 2018
Common stock, shares authorized	50,000,000
Dividends on common stock per share	$ 0.07	$ 0.07	$ 0.07	$ 0.06	$ 0.06	$ 0.06
8% Preferred Stock
Dividends on preferred stock per share	20	20	$ 20	$ 20	$ 20	$ 20
7% Preferred Stock
Dividends on preferred stock per share	0.4375	$ 0.4375
Offering expenses on issuance of stock		$ 69,000	$ 1,731,000
6% Preferred Stock
Dividends on preferred stock per share	$ 7.166667
Offering expenses on issuance of stock	$ 4.138

Condensed Consolidated Statem_7

Condensed Consolidated Statements of Cash Flows - USD ($)	9 Months Ended
	Sep. 30, 2019	Sep. 30, 2018
Operating activities:
Net income	$ 47,268,000	$ 47,452,000
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation	436,000	336,000
Provision for loan losses	1,947,000	3,021,000
Gain on sale of securities	(124,000)
Gain on sale of loans	(20,059,000)	(27,548,000)
Proceeds from sales of loans	20,483,906,000	13,387,330,000
Loans and participations originated and purchased for sale	(22,133,767,000)	(13,374,161,000)
Change in mortgage servicing rights for paydowns and fair value adjustments	10,492,000	1,854,000
Net change in:
Trading securities	(64,495,000)	66,721,000
Other assets and receivables	(4,839,000)	(4,718,000)
Other liabilities	9,979,000	3,441,000
Other	4,249,000	1,050,000
Net cash provided by (used in) operating activities	(1,665,007,000)	104,778,000
Investing activities:
Net change in securities purchased under agreements to resell	115,000	130,000
Purchases of available-for-sale securities	(382,385,000)	(36,284,000)
Proceeds from the sale of available-for-sale securities	31,083,000	6,431,000
Proceeds from calls, maturities and paydowns of available-for-sale securities	375,095,000	171,319,000
Purchases of loans	(61,848,000)	(112,219,000)
Net change in loans receivable	(637,957,000)	(403,900,000)
Purchase of Federal Home Loan Bank stock	(14,085,000)	(233,000)
Proceeds from sale of Federal Home Loan Bank stock	3,251,000	218,000
Proceeds from sale of assets		10,000
Purchases of premises and equipment	(12,273,000)	(5,440,000)
Purchases of mortgage servicing rights		(790,000)
Purchase of limited partnership interests		(3,005,000)
Cash received in acquisition of subsidiary		6,505,000
Other investing activities	124,000	(74,000)
Net cash used in investing activities	(698,880,000)	(377,332,000)
Financing activities:
Net change in deposits	2,268,637,000	321,931,000
Proceeds from Federal Home Loan Bank borrowings	6,887,077,000	536,367,000
Repayment of Federal Home Loan Bank borrowings	(6,899,275,000)	(536,379,000)
Proceeds from notes payable	6,118,000	9,534,000
Payments on notes payable	(29,700,000)
Proceeds from issuance of preferred stock	192,958,000
Redemption of preferred stock	(21,850,000)
Dividends	(11,626,000)	(7,662,000)
Net cash provided by financing activities	2,392,339,000	323,791,000
Net Change in Cash and Cash Equivalents	28,452,000	51,237,000
Cash and Cash Equivalents, Beginning of Period	336,524,000	359,519,000
Cash and Cash Equivalents, End of Period	364,976,000	410,756,000
Additional Cash Flows Information:
Interest paid	54,522,000	31,694,000
Income taxes paid	$ 13,871,000	13,023,000
The Company purchased all of the capital stock of FMBI on January 2, 2018 for $5,472. In conjunction with the acquisitions, liabilities were assumed as follows:
Fair value of assets acquired		44,217,000
Cash paid for the capital stock/fair value common stock issued		5,472,000
Fair value of liabilities assumed		$ 38,745,000

Basis of Presentation

Basis of Presentation	9 Months Ended
	Sep. 30, 2019
Basis of Presentation
Basis of Presentation	Note 1: Basis of Presentation The accompanying unaudited condensed consolidated financial statements include the accounts of Merchants Bancorp, a registered bank holding company (the “Company”) and its wholly owned subsidiaries, Merchants Bank of Indiana (“Merchants Bank”) and Farmers-Merchants Bank of Illinois (“FMBI”). Merchants Bank’s direct and indirect subsidiaries include Merchants Capital Corp. (“MCC”), Merchants Capital Servicing, LLC (“MCS”), Ash Realty Holdings, LLC (“Ash Realty”), MBI Midtown West, LLC (“MMW”), Natty Mac Funding, Inc. (“NMF”), and OneTrust Funding, Inc. The Company also acquired Farmers-Merchants National Bank of Paxton (‘FMNBP”) on October 1, 2018 through a merger with FMBI, with FMBI as the surviving entity. All these entities are collectively referred to as the “Company”. The accompanying unaudited condensed consolidated balance sheet of the Company as of December 31, 2018, which has been derived from audited financial statements, and unaudited condensed consolidated financial statements of the Company as of September 30, 2019 and for the three and nine months ended September 30, 2019 and 2018, were prepared in accordance with the instructions for Form 10‑Q and Article 10 of Regulation S-X and, therefore, do not include information or footnotes necessary for a complete presentation of financial position, results of operations and cash flows in conformity with accounting principles generally accepted in the United States of America. Accordingly, these condensed financial statements should be read in conjunction with the audited financial statements and notes thereto of the Company as of and for the year ended December 31, 2018 in its Annual Report on Form 10-K. Reference is made to the accounting policies of the Company described in the Notes to the Financial Statements contained in the Annual Report on Form 10-K. In the opinion of management, all adjustments (consisting only of normal recurring adjustments) which are necessary for a fair presentation of the unaudited financial statements have been included to present fairly the financial position as of September 30, 2019 and the results of operations for the three and nine months ended September 30, 2019 and 2018, and cash flows for the nine months ended September 30, 2019 and 2018. All interim amounts have not been audited and the results of operations for the three and nine months ended September 30, 2019, herein are not necessarily indicative of the results of operations to be expected for the entire year. Principles of Consolidation The unaudited condensed consolidated financial statements as of and for the period ended September 30, 2019 include the Company, and its wholly owned subsidiaries, Merchants Bank, and FMBI. Also included are Merchants Bank’s wholly owned subsidiaries, MCC, MCC’s wholly owned subsidiary, MCS, Ash Realty, NMF, MMW, and OneTrust Funding, Inc. The unaudited condensed consolidated financial statements as of and for the period ended September 30, 2018, include the Company and its wholly owned subsidiary, Merchants Bank, and Merchants Bank’s wholly owned subsidiaries, FMBI (after being acquired on January 2, 2018 and excluding results from FMNBP, which was acquired on October 1, 2018), MCC, MCC’s wholly owned subsidiary, MCS, Ash Realty, NMF, and MMW. All significant intercompany accounts and transactions have been eliminated in consolidation. Use of Estimates The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. Material estimates that are particularly susceptible to significant change relate to the determination of the allowance for loan losses, loan servicing rights and fair values of financial instruments. Public Offerings of Preferred Stock On March 28, 2019 the Company issued 2,000,000 shares of 7.00% Fixed-to-Floating Rate Series A Non-Cumulative Perpetual Preferred Stock, without par value (the “Series A Preferred Stock”), and with a liquidation preference of $25.00 per share. The aggregate gross offering proceeds for the shares issued by the Company was $50.0 million, and after deducting underwriting discounts and commissions and offering expenses of approximately $1.7 million paid to third parties, the Company received total net proceeds of $48.3 million. On April 12, 2019, the Company issued an additional 81,800 shares of Series A Preferred Stock to the underwriters related to their exercise of an option to purchase additional shares under the associated underwriting agreement, resulting in an addition $2.0 million in net proceeds, after deducting $41,000 underwriting discounts. The Series A Preferred Stock have no voting rights with respect to matters that generally require the approval of our common shareholders. Dividends on the Series A Preferred Stock, to the extent declared by the Company’s board, are payable quarterly. On August 19, 2019 the Company issued 5,000,000 depositary shares, each representing a 1/40 th interest in a share of its 6.00% Fixed-to-Floating Rate Series B Non-Cumulative Perpetual Preferred Stock, without par value (the “Series B Preferred Stock”), and with a liquidation preference of $1,000.00 per share (equivalent to $25.00 per depositary share). The aggregate gross offering proceeds for the shares issued by the Company was $125.0 million, and after deducting underwriting discounts and commissions and offering expenses of approximately $4.1 million paid to third parties, the Company received total net proceeds of $120.9 million. The Series B Preferred Stock have no voting rights with respect to matters that generally require the approval of our common shareholders. Dividends on the Series B Preferred Stock, to the extent declared by the Company’s board, are payable quarterly. Private Placement Offering of Preferred Stock On June 27, 2019 the Company issued an additional 874,000 shares of its 7.00% Series A Preferred Stock, without par value and with a liquidation preference of $25.00 per share, for aggregate proceeds of $21.85 million. No underwriter or placement agent was involved in this private placement and the Company did not pay any brokerage or underwriting fees or discounts in connection with the issuance of such shares. The shares were purchased primarily by related parties, including Michael Petrie, Chairman and Chief Executive Officer; Randall Rogers, Vice Chairman and a director and members of his family; Michael Dury, President of Merchants Capital; and other accredited investors. Repurchase of Preferred Stock On September 23, 2019 the Company repurchased and subsequently retired 874,000 shares of its 7.00% Series A Preferred Stock, for its liquidation preference of $25 per share, at an aggregate cost of $21.85 million. There were no brokerage fees in connection with the transaction. Acquisitions On May 8, 2017, the Company entered into a Stock Purchase Agreement to acquire FMBI (formerly known as Joy State Bank). The acquisition closed on January 2, 2018 at a total cost of approximately $5.5 million. At December 31, 2017 Joy State Bank had $43 million in assets. The Company recorded goodwill and intangible assets totaling $988,000 and $478,000, respectively, in connection with the acquisition. The intangible assets consisted of core deposit intangibles that are being amortized over 10 years on an accelerated basis. The acquired time deposits of $16.7 million were recorded at a fair value of $16.9 million. The fair value premium of $185,000 is being accreted against interest expense over 20 months. The acquired loan portfolio of $27.9 million was recorded at a fair value of $27.5 million. The fair value discount of $458,000 is being accreted to interest income on a straight-line basis over an average of 39 months in accordance with ASC 310-20. While there were some loans identified for potential classification under ASC 310-30, they were not material to the transaction. On October 22, 2018, the Company changed the name of Joy State Bank to Farmers-Merchants Bank of Illinois (“FMBI”). As a result of the acquisition, the Company increased its deposit base and benefited from economies of scale. The acquisition did not materially impact the Company’s financial position, results of operations or cash flows. On October 1, 2018, the Company acquired FM Bancorp, Inc., a bank holding company, and its wholly owned subsidiary, Farmers-Merchants National Bank of Paxton (“FMNBP”). On that date, FM Bancorp, Inc. ultimately merged with and into the Company, with the Company as the surviving entity, and FMNBP merged with and into Joy State Bank, with Joy State Bank as the surviving bank. Effective October 22, 2018, Joy State Bank’s name changed to Farmers-Merchants Bank of Illinois (“FMBI”). Under the terms of the merger agreement, shareholders of the 27,537 outstanding shares of FM Bancorp, Inc. were compensated $795.29 per share, for a total purchase price of $21.9 million. As of September 30, 2018, FM Bancorp, Inc. and FMNBP had total assets of approximately $110.0 million, available for sale securities of $66.3 million, deposits of approximately $95.7 million, and net loan receivables of approximately $35.0 million. The Company recorded goodwill and intangible assets totaling $6.9 million and $1.9 million. The intangible assets consisted of core deposit intangibles that are being amortized over 10 years on an accelerated basis. The acquired available for sale securities of $66.3 million were recorded at fair value. A fair value discount associated with securities of $1.0 million is being accreted into interest income, in accordance with ASC 310-20. While there were some loans identified for potential classification under ASC 310-30, they were not material to the transaction. The acquired gross loan portfolio of $35.4 million was recorded at a fair value of $34.8 million. The fair value discount of $625,000 included a discount related to interest assumptions for $279,000 and to credit assumptions for $346,000. The portion related to interest assumptions is being accreted into interest income on a straight-line basis over an average of 72 months in accordance with ASC 310-20. The discount portion related to credit assumptions is being accreted into interest income over the life of the loan. The acquired deposits of $95.7 million were recorded at a fair value of $95.7 million. As a result of the acquisition, the Company increased its deposit base and benefited from economies of scale. The acquisition did not materially impact the Company’s financial position, results of operations or cash flows. On December 31, 2018, the Company acquired the assets of NattyMac, LLC, a warehouse lender operating out of Clearwater, Florida, from Home Point Financial Corporation (“Home Point”). The Company also fully repaid Home Point the balance of, and all interest owed on, the $30 million subordinated debt it had previously invested in the Company. Goodwill and intangible assets of $3.4 million and $1.6 million, respectively, were recorded by the Company. The intangible assets consisted of customer lists that are being amortized over 21 months on a straight-line basis. As a result of the acquisition, the Company expects to increase its geographic footprint in the warehouse business, reduce its costs of borrowing, increase the earnings generated from its warehouse business, and benefit from its experienced talent pool. The acquisition did not materially impact the Company’s financial position, results of operations or cash flows. Given the impact of the acquisitions was immaterial to the Company and its results of operations, pro forma information has not been included. Reclassifications Certain reclassifications have been made to the 2018 financial statements to conform to the financial statement presentation as of and for the three and nine months ended September 30, 2019. These reclassifications had no effect on net income.

Securities

Securities	9 Months Ended
	Sep. 30, 2019
Securities
Securities	Note 2: Securities Trading Securities Securities that are held principally for resale in the near term are recorded as trading securities at fair value with changes in fair value recorded in earnings. Trading securities include FHA and conventional Fannie Mae and Freddie Mac participation certificates. The unrealized gains included in trading securities totaled $1.7 million and $661,000 at September 30, 2019 and 2018, respectively. Securities Available-For-Sale The amortized cost and approximate fair values, together with gross unrealized gains and losses, of securities were as follows: September 30, 2019 Gross Gross Amortized Unrealized Unrealized Fair Cost Gains Losses Value (In thousands) Available-for-sale securities: Treasury notes $ 2,743 $ 22 $ — $ 2,765 Federal agencies 257,572 9 193 257,388 Municipals 11,976 784 — 12,760 Mortgage-backed - Government-sponsored entity (GSE) - residential 35,517 246 3 35,760 Total available-for-sale securities $ 307,808 $ 1,061 $ 196 $ 308,673 December 31, 2018 Gross Gross Amortized Unrealized Unrealized Fair Cost Gains Losses Value (In thousands) Available-for-sale securities: Treasury notes $ 11,928 $ 26 $ 13 $ 11,941 Federal agencies 237,894 8 972 236,930 Municipals 21,014 336 18 21,332 Mortgage-backed - Government-sponsored entity (GSE) - residential 60,693 254 79 60,868 Total available-for-sale securities $ 331,529 $ 624 $ 1,082 $ 331,071 The amortized cost and fair value of available-for-sale securities at September 30, 2019 and December 31, 2018, by contractual maturity, are shown below. Expected maturities will differ from contractual maturities because issuers may have the right to call or prepay obligations with or without call or prepayment penalties. Securities not due at a single maturity date are shown separately. September 30, 2019 December 31, 2018 Amortized Fair Amortized Fair Cost Value Cost Value Contractual Maturity (In thousands) Within one year $ 16,248 $ 16,247 $ 179,323 $ 178,581 After one through five years 246,533 246,480 72,470 72,282 After five through ten years 1,587 1,686 7,087 7,203 After ten years 7,923 8,500 11,956 12,137 272,291 272,913 270,836 270,203 Mortgage-backed - Government-sponsored entity (GSE) - residential 35,517 35,760 60,693 60,868 $ 307,808 $ 308,673 $ 331,529 $ 331,071 During the three months ended September 30, 2019, there were no sales of securities available for sale. During the nine months ended September 30, 2019, proceeds from sales of securities available for sale were $31.1 million, and a net gain of $124,000 was recognized, consisting of $361,000 in gains and $237,000 of losses. During the three and nine months ended September 30, 2018, $6.4 million securities available-for-sale were sold and no gain or loss was recognized. The following tables show the Company’s investments’ gross unrealized losses and fair value of the Company’s investments with unrealized losses that are not deemed to be other-than-temporarily impaired, aggregated by investment class and length of time that individual securities have been in a continuous unrealized loss position at September 30, 2019 and December 31, 2018: September 30, 2019 12 Months or Less than 12 Months Longer Total Gross Gross Gross Fair Unrealized Fair Unrealized Fair Unrealized Value Losses Value Losses Value Losses (In thousands) Available-for-sale securities: Treasury notes $ — $ — $ — $ — $ — $ — Federal agencies 121,552 190 14,996 3 136,548 193 Mortgage-backed - Government-sponsored entity (GSE) - residential 1,114 3 — — 1,114 3 $ 122,666 $ 193 $ 14,996 $ 3 $ 137,662 $ 196 December 31, 2018 12 Months or Less than 12 Months Longer Total Gross Gross Gross Fair Unrealized Fair Unrealized Fair Unrealized Value Losses Value Losses Value Losses (In thousands) Available-for-sale securities: Treasury notes $ 1,990 $ 8 $ 995 $ 5 $ 2,985 $ 13 Federal agencies 28,296 97 191,280 875 219,576 $ 972 Municipals 2,051 18 — — 2,051 $ 18 Mortgage-backed - Government-sponsored entity (GSE) - residential 15,543 79 — — 15,543 79 $ 47,880 $ 202 $ 192,275 $ 880 $ 240,155 $ 1,082 Other-than-temporary Impairment Unrealized losses on securities have not been recognized to income because the Company has the intent and ability to hold the securities for the foreseeable future, and the decline in fair value is primarily due to increased market interest rates. The fair value is expected to recover as the securities approach the maturity date.

Loans and Allowance for Loan Lo

Loans and Allowance for Loan Losses	9 Months Ended
	Sep. 30, 2019
Loans and Allowance for Loan Losses
Loans and Allowance for Loan Losses	Note 3: Loans and Allowance for Loan Losses Loans that management has the intent and ability to hold for the foreseeable future or until maturity or payoff are reported at their outstanding principal balances adjusted for unearned income, charge-offs, the allowance for loan losses, any unamortized deferred fees or costs on originated loans and unamortized premiums or discounts on purchased loans. For loans amortized at cost, interest income is accrued based on the unpaid principal balance. The accrual of interest on loans is discontinued at the time the loan is 90 days past due unless the credit is well-secured and in process of collection. Past-due status is based on contractual terms of the loan. In all cases, loans are placed on nonaccrual or charged off at an earlier date if collection of principal or interest is considered doubtful. All interest accrued but not collected for loans that are placed on nonaccrual or charged off is reversed against interest income. The interest on these loans is applied to the principal balance until the loan can be returned to an accrual status. Loans are returned to accrual status when all the principal and interest amounts contractually due are brought current and future payments are reasonably assured. For all loan portfolio segments, the Company promptly charges off loans, or portions thereof, when available information confirms that specific loans are uncollectable based on information that includes, but is not limited to, (1) the deteriorating financial condition of the borrower, (2) declining collateral values, and/or (3) legal action, including bankruptcy, that impairs the borrower’s ability to adequately meet its obligations. For impaired loans that are considered to be solely collateral dependent, a partial charge-off is recorded when a loss has been confirmed by an updated appraisal or other appropriate valuation of the collateral. When cash payments are received on impaired loans in each loan class, the Company records the payment as interest income unless collection of the remaining recorded principal amount is doubtful, at which time payments are used to reduce the principal balance of the loan. Troubled debt restructured loans recognize interest income on an accrual basis at the renegotiated rate if the loan is in compliance with the modified terms. Loans receivable at September 30, 2019 and December 31, 2018 include: September 30, December 31, 2019 2018 (In thousands) Mortgage warehouse lines of credit $ 796,344 $ 337,332 Residential real estate 410,550 410,871 Multi-family and healthcare financing 1,145,646 914,393 Commercial and commercial real estate 297,788 299,194 Agricultural production and real estate 85,737 79,255 Consumer and margin loans 19,728 17,082 2,755,793 2,058,127 Less Allowance for loan losses 13,705 12,704 Loans Receivable $ 2,742,088 $ 2,045,423 Risk characteristics applicable to each segment of the loan portfolio are described as follows. Mortgage Warehouse Lines of Credit (MTG WHLOC): Under its warehouse program, the Company provides warehouse financing arrangements to approved mortgage companies for the origination and sale of residential mortgage loans and to a lesser extent multi-family loans. Agency eligible, governmental and jumbo residential mortgage loans that are secured by mortgages placed on existing one-to-four family dwellings may be originated or purchased and placed on each mortgage warehouse line. As a secured line of credit, collateral pledged to the Company secures each individual mortgage until the lender sells the loan in the secondary market. A traditional secured warehouse line of credit typically carries a base interest rate of 30 day LIBOR, plus a margin, or mortgage note rate, less a margin. Risk is evident if there is a change in the fair value of mortgage loans originated by mortgage bankers in warehouse, the sale of which is the expected source of repayment of the borrowings under a warehouse line of credit. Residential Real Estate Loans (RES RE): Real estate loans are secured by owner-occupied 1‑4 family residences. Repayment of residential real estate loans is primarily dependent on the personal income and credit rating of the borrowers. All-in-One mortgages included in this segment typically carry a base rate of 30-day LIBOR, plus a margin. Multi-Family and Healthcare Financing (MF RE): The Company engages in multi-family and healthcare financing, including construction loans, specializing in originating and servicing loans for multi-family rental and senior living properties. In addition, the Company originates loans secured by an assignment of federal income tax credits by partnerships invested in multi-family real estate projects. Construction and land loans are generally based upon estimates of costs and estimated value of the completed project and include independent appraisal reviews and a financial analysis of the developers and property owners. Sources of repayment of these loans may include permanent loans, sales of developed property or an interim loan commitment from the Company until permanent agency-eligible financing is obtained. These loans are considered to be higher risk than other real estate loans due to their ultimate repayment being sensitive to interest rate changes, general economic conditions and the availability of long-term financing. Credit risk in these loans may be impacted by the creditworthiness of a borrower, property values and the local economy in the Company’s market area. Repayment of these loans depends on the successful operation of a business or property and the borrower’s cash flows. Commercial Lending and Commercial Real Estate Loans (CML & CRE): The commercial lending and commercial real estate portfolio includes loans to commercial customers for use in financing working capital needs, equipment purchases and expansions, as well as loans to commercial customers to finance land and improvements. It also includes loans collateralized by mortgage servicing rights of mortgage warehouse customers. The loans in this category are repaid primarily from the cash flow of a borrower’s principal business operation. Credit risk in these loans is driven by creditworthiness of a borrower and the economic conditions that impact the cash flow stability from business operations. Agricultural Production and Real Estate Loans (AG & AGRE): Agricultural production loans are generally comprised of seasonal operating lines of credit to grain farmers to plant and harvest corn and soybeans and term loans to fund the purchase of equipment. The Company also offers long term financing to purchase agricultural real estate. Specific underwriting standards have been established for agricultural-related loans including the establishment of projections for each operating year based on industry-developed estimates of farm input costs and expected commodity yields and prices. Operating lines are typically written for one year and secured by the crop and other farm assets as considered necessary. The Company is approved to sell agricultural loans in the secondary market through the Federal Agricultural Mortgage Corporation and uses this relationship to manage interest rate risk within the portfolio. Consumer and Margin Loans (CON & MAR): Consumer loans are those loans secured by household assets. Margin loans are those loans secured by marketable securities. The term and maximum amount for these loans are determined by considering the purpose of the loan, the margin (advance percentage against value) in all collateral, the primary source of repayment, and the borrower’s other related cash flow. Allowance for Loan Losses: The allowance for loan losses is established as losses are estimated to have occurred through a provision for loan losses charged to net interest income. Loan losses are charged against the allowance when management believes the uncollectability of a loan balance is confirmed. Subsequent recoveries, if any, are credited to the allowance. The allowance for loan losses is evaluated on a regular basis by management and is based upon management’s periodic review of the collectability of the loans in light of historical experience, the nature and volume of the loan portfolio, adverse situations that may affect the borrower’s ability to repay, estimated value of any underlying collateral and prevailing economic conditions. This evaluation is inherently subjective as it requires estimates that are susceptible to significant revision as more information becomes available. The allowance consists of allocated and general components. The allocated component relates to loans that are classified as impaired. For those loans that are classified as impaired, an allowance is established when the discounted cash flows, collateral value, or observable market price of the impaired loan is lower than the carrying value of that loan. The general component covers non-impaired loans and is based on historical charge-off experience and expected loss given default derived from the Company’s internal risk rating process. Other adjustments may be made to the allowance for pools of loans after an assessment of internal or external influences on credit quality that are not fully reflected in the historical loss or risk rating data. A loan is considered impaired when, based on current information and events, it is probable that the Company will be unable to collect the scheduled payments of principal or interest when due according to the contractual terms of the loan agreement. Factors considered by management in determining impairment include payment status, collateral value and the probability of collecting scheduled principal and interest payments when due. Loans that experience insignificant payment delays and payment shortfalls generally are not classified as impaired. Management determines the significance of payment delays and payment shortfalls on a case-by-case basis, taking into consideration all of the circumstances surrounding the loan and the borrower, including the length of the delay, the reasons for the delay, the borrower’s prior payment record and the amount of the shortfall in relation to the principal and interest owed. Impairment is measured on a loan-by-loan basis for commercial and construction loans by the fair value of the collateral if the loan is collateral dependent, the loan’s obtainable market price, or present value of expected future cash flows discounted at the loan’s effective interest rate. For impaired loans where the Company utilizes discounted cash flows to determine the level of impairment, the Company includes the entire change in the present value of cash flows as bad debt expense. Groups of loans with similar risk characteristics are collectively evaluated for impairment based on the group’s historical loss experience adjusted for changes in trends, conditions and other relevant factors that affect repayment of the loans. Accordingly, the Company does not separately identify individual consumer and residential loans for impairment measurements, unless such loans are the subject of a restructuring agreement due to financial difficulties of the borrower. In the course of working with borrowers, the Company may choose to restructure the contractual terms of certain loans. In restructuring the loan, the Company attempts to work out an alternative payment schedule with the borrower in order to optimize collectability of the loan. A troubled debt restructuring (TDR) occurs when, for economic or legal reasons related to a borrower’s financial difficulties, the Company grants a concession to the borrower that it would not otherwise consider. Terms may be modified to fit the ability of the borrower to repay in line with its current financial status, and the restructuring of the loan may include the transfer of assets from the borrower to satisfy the debt, a modification of loan terms, or a combination of the two. Nonaccrual loans, including TDRs that have not met the six month minimum performance criterion, are reported as nonperforming loans. For all loan classes, it is the Company’s policy to have any restructured loans which are on nonaccrual status prior to being restructured remain on nonaccrual status until three months of satisfactory borrower performance, at which time management would consider its return to accrual status. A loan is generally classified as nonaccrual when the Company believes that receipt of principal and interest is doubtful under the terms of the loan agreement. Most generally, this is at 90 or more days past due. With regard to determination of the amount of the allowance for credit losses, restructured loans are considered to be impaired. As a result, the determination of the amount of impaired loans for each loan portfolio segment within troubled debt restructurings is the same as detailed previously above. The following tables present, by loan portfolio segment, the activity in the allowance for loan losses for the three and nine months ended September 30, 2019 and 2018 and the recorded investment in loans and impairment method as of September 30, 2019: At or For the Three Months Ended September 30, 2019 MTG WHLOC RES RE MF RE CML & CRE AG & AGRE CON & MAR TOTAL (In thousands) Allowance for loan losses Balance, beginning of period $ 1,565 $ 1,929 $ 5,144 $ 3,271 $ 515 $ 180 $ 12,604 Provision (credit) for loan losses 533 63 753 (174) 14 4 1,193 Loans charged to the allowance (107) — — — — — (107) Recoveries of loans previously charged off — — — 15 — — 15 Balance, end of period $ 1,991 $ 1,992 $ 5,897 $ 3,112 $ 529 $ 184 $ 13,705 Ending balance: individually evaluated for impairment $ — 14 — 544 27 8 $ 593 Ending balance: collectively evaluated for impairment $ 1,991 $ 1,978 $ 5,897 $ 2,568 $ 502 $ 176 $ 13,112 Loans Ending balance $ 796,344 $ 410,550 $ 1,145,646 $ 297,788 $ 85,737 $ 19,728 $ 2,755,793 Ending balance individually evaluated for impairment $ 237 $ 5,161 $ — $ 8,437 $ 214 $ 25 $ 14,074 Ending balance collectively evaluated for impairment $ 796,107 $ 405,389 $ 1,145,646 $ 289,351 $ 85,523 $ 19,703 $ 2,741,719 For the Three Months Ended September 30, 2018 MTG WHLOC RES RE MF RE CML & CRE AG & AGRE CON & MAR TOTAL (In thousands) Allowance for loan losses Balance, beginning of period $ 646 $ 1,812 $ 4,662 $ 2,803 $ 392 $ 273 $ 10,588 Provision (credit) for loan losses 73 96 240 184 35 (11) 617 Loans charged to the allowance — — — 46 — 28 74 Recoveries of loans previously charged off — (16) — (1) — (19) (36) Balance, end of period $ 719 $ 1,892 $ 4,902 $ 3,032 $ 427 $ 271 $ 11,243 For the Nine Months Ended September 30, 2019 MTG WHLOC RES RE MF RE CML & CRE AG & AGRE CON & MAR TOTAL (In thousands) Allowance for loan losses Balance, beginning of period $ 1,068 $ 1,986 $ 6,030 $ 3,051 $ 429 $ 140 $ 12,704 Provision for loan losses 1,030 6 (133) 900 100 44 1,947 Loans charged to the allowance (107) — — (854) (3) — (964) Recoveries of loans previously charged off — — — 15 3 — 18 Balance, end of period $ 1,991 $ 1,992 $ 5,897 $ 3,112 $ 529 $ 184 $ 13,705 For the Nine Months Ended September 30, 2018 MTG WHLOC RES RE MF RE CML & CRE AG & AGRE CON & MAR TOTAL (In thousands) Allowance for loan losses Balance, beginning of period $ 283 $ 1,587 $ 3,502 $ 2,362 $ 320 $ 257 $ 8,311 Provision (credit) for loan losses 436 305 1,400 759 107 14 3,021 Loans charged to the allowance — — — (89) — — (89) Recoveries of loans previously charged off — — — — — — — Balance, end of period $ 719 $ 1,892 $ 4,902 $ 3,032 $ 427 $ 271 $ 11,243 The following table presents the allowance for loan losses and the recorded investment in loans and impairment method as of December 31, 2018: December 31, 2018 MTG WHLOC RES RE MF RE CML & CRE AG & AGRE CON & MAR TOTAL (In thousands) Allowance for loan losses Balance, December 31, 2018 $ 1,068 $ 1,986 $ 6,030 $ 3,051 $ 429 $ 140 $ 12,704 Ending balance: individually evaluated for impairment $ 225 $ — $ — $ 400 $ 20 $ — $ 645 Ending balance: collectively evaluated for impairment $ 843 $ 1,986 $ 6,030 $ 2,651 $ 409 $ 140 $ 12,059 Loans Balance, December 31, 2018 $ 337,332 $ 410,871 $ 914,393 $ 299,194 $ 79,255 $ 17,082 $ 2,058,127 Ending balance individually evaluated for impairment $ 575 $ 1,606 $ — $ 8,576 $ 370 $ 58 $ 11,185 Ending balance collectively evaluated for impairment $ 336,757 $ 409,265 $ 914,393 $ 290,618 $ 78,885 $ 17,024 $ 2,046,942 Internal Risk Categories In adherence with policy, the Company uses the following internal risk grading categories and definitions for loans: Average or above – Loans to borrowers of satisfactory financial strength or better. Earnings performance is consistent with primary and secondary sources of repayment that are well defined and adequate to retire the debt in a timely and orderly fashion. These businesses would generally exhibit satisfactory asset quality and liquidity with moderate leverage, average performance to their peer group and experienced management in key positions. These loans are disclosed as “Acceptable and Above” in the following table. Acceptable – Loans to borrowers involving more than average risk and which contain certain characteristics that require some supervision and attention by the lender. Asset quality is acceptable, but debt capacity is modest and little excess liquidity is available. The borrower may be fully leveraged and unable to sustain major setbacks. Covenants are structured to ensure adequate protection. Borrower’s management may have limited experience and depth. This category includes loans which are highly leveraged due to regulatory constraints, as well as loans involving reasonable exceptions to policy. These loans are disclosed as “Acceptable and Above” in the following table. Special Mention (Watch) – This is a loan that is sound and collectable but contains considerable risk. Loans classified as special mention have a potential weakness that deserves management’s close attention. If left uncorrected, these potential weaknesses may result in deterioration of the repayment prospects for the loan or of the institution’s credit position at some future date. Substandard - Loans classified as substandard are inadequately protected by the current net worth and paying capacity of the obligor or of the collateral pledged, if any. Loans so classified have a well-defined weakness or weaknesses that jeopardize the liquidation of the debt. They are characterized by the distinct possibility that the institution will sustain some loss if the deficiencies are not corrected. Doubtful - Loans classified as doubtful have all the weaknesses inherent in those classified as substandard, with the added characteristic that the weaknesses make collection or liquidation in full, on the basis of currently existing facts, conditions, and values, highly questionable and improbable. The following tables present the credit risk profile of the Company’s loan portfolio based on internal rating category and payment activity as of September 30, 2019 and December 31, 2018: September 30, 2019 MTG WHLOC RES RE MF RE CML & CRE AG & AGRE CON & MAR TOTAL (In thousands) Special Mention (Watch) $ — $ 674 $ 38,999 $ 11,259 $ 5,116 $ 38 $ 56,086 Substandard 237 5,161 — 8,437 214 25 14,074 Doubtful — — — — — — — Acceptable and Above 796,107 404,715 1,106,647 278,092 80,407 19,665 2,685,633 Total $ 796,344 $ 410,550 $ 1,145,646 $ 297,788 $ 85,737 $ 19,728 $ 2,755,793 December 31, 2018 MTG WHLOC RES RE MF RE CML & CRE AG & AGRE CON & MAR TOTAL (In thousands) Special Mention (Watch) $ — $ 443 $ 71,734 $ 14,650 $ 3,096 $ 681 $ 90,604 Substandard 575 1,606 — 8,576 370 58 11,185 Doubtful — — — — — — — Acceptable and Above 336,757 408,822 842,659 275,968 75,789 16,343 1,956,338 Total $ 337,332 $ 410,871 $ 914,393 $ 299,194 $ 79,255 $ 17,082 $ 2,058,127 The Company evaluates the loan risk grading system definitions and allowance for loan loss methodology on an ongoing basis. No significant changes were made to either during the past year. The following tables present the Company’s loan portfolio aging analysis of the recorded investment in loans as of September 30, 2019 and December 31, 2018: September 30, 2019 30-59 Days 60-89 Days Greater Than Total Total Past Due Past Due 90 Days Past Due Current Loans (In thousands) MTG WHLOC $ — $ — $ — $ — $ 796,344 $ 796,344 RES RE 438 548 3,206 4,192 406,358 410,550 MF RE — — — — 1,145,646 1,145,646 CML & CRE 2,443 111 1,664 4,218 293,570 297,788 AG & AGRE 159 — 601 760 84,977 85,737 CON & MAR 25 22 27 74 19,654 19,728 $ 3,065 $ 681 $ 5,498 $ 9,244 $ 2,746,549 $ 2,755,793 December 31, 2018 30-59 Days 60-89 Days Greater Than Total Total Past Due Past Due 90 Days Past Due Current Loans (In thousands) MTG WHLOC $ — $ — $ 324 $ 324 $ 337,008 $ 337,332 RES RE 579 178 825 1,582 409,289 410,871 MF RE — — — — 914,393 914,393 CML & CRE 245 52 253 550 298,644 299,194 AG & AGRE 91 — 588 679 78,576 79,255 CON & MAR 2 52 28 82 17,000 17,082 $ 917 $ 282 $ 2,018 $ 3,217 $ 2,054,910 $ 2,058,127 A loan is considered impaired, in accordance with the impairment accounting guidance (ASC 310-10-35-16), when based on current information and events, it is probable the Company will be unable to collect all amounts due from the borrower in accordance with the contractual terms of the loan. Impaired loans include nonperforming commercial loans but also include loans modified in troubled debt restructurings. The following tables present impaired loans and specific valuation allowance information based on class level as of September 30, 2019 and December 31, 2018: September 30, 2019 MTG WHLOC RES RE MF RE CML & CRE AG & AGRE CON & MAR TOTAL (In thousands) Impaired loans without a specific allowance: Recorded investment $ 237 $ 5,016 $ — $ 6,019 $ — $ 14 $ 11,286 Unpaid principal balance 237 5,016 — 6,019 — 14 11,286 Impaired loans with a specific allowance: Recorded investment — 145 — 2,418 214 11 2,788 Unpaid principal balance — 145 — 2,418 214 11 2,788 Specific allowance — 14 — 544 27 8 593 Total impaired loans: Recorded investment 237 5,161 — 8,437 214 25 14,074 Unpaid principal balance 237 5,161 — 8,437 214 25 14,074 Specific allowance — 14 — 544 27 8 593 December 31, 2018 MTG WHLOC RES RE MF RE CML & CRE AG & AGRE CON & MAR TOTAL (In thousands) Impaired loans without a specific allowance: Recorded investment $ 251 $ 1,606 $ — $ 5,636 $ 88 $ 58 $ 7,639 Unpaid principal balance 251 1,606 — 5,636 88 58 7,639 Impaired loans with a specific allowance: Recorded investment 324 — — 2,940 282 — 3,546 Unpaid principal balance 324 — — 2,940 282 — 3,546 Specific allowance 225 — — 400 20 — 645 Total impaired loans: Recorded investment 575 1,606 — 8,576 370 58 11,185 Unpaid principal balance 575 1,606 — 8,576 370 58 11,185 Specific allowance 225 — — 400 20 — 645 The following tables present by portfolio class, information related to the average recorded investment and interest income recognized on impaired loans for the three and nine month periods ended September 30, 2019 and 2018: MTG WHLOC RES RE MF RE CML & CRE AG & AGRE CON & MAR TOTAL (In thousands) Three Months Ended September 30, 2019 Average recorded investment in impaired loans $ 239 $ 5,172 $ — $ 8,264 $ 214 $ 26 $ 13,915 Interest income recognized — 9 — 127 — — 136 Three Months Ended September 30, 2018 Average recorded investment in impaired loans $ 691 $ 1,042 $ 109 $ 7,254 $ 425 $ 187 $ 9,708 Interest income recognized 26 21 6 98 4 — 155 MTG WHLOC RES RE MF RE CML & CRE AG & AGRE CON & MAR TOTAL (In thousands) Nine Months Ended September 30, 2019 Average recorded investment in impaired loans $ 244 $ 5,206 $ — $ 8,351 $ 239 $ 28 $ 14,068 Interest income recognized — 62 — 375 — 1 438 Nine Months Ended September 30, 2018 Average recorded investment in impaired loans $ 1,030 $ 1,097 $ 113 $ 7,556 $ 525 $ 184 $ 10,505 Interest income recognized 66 51 8 177 43 1 346 The following table presents the Company’s nonaccrual loans and loans past due 90 days or more and still accruing at September 30, 2019 and December 31, 2018. September 30, December 31, 2019 2018 Total Loans > Total Loans > 90 Days & 90 Days & Nonaccrual Accruing Nonaccrual Accruing (In thousands) MTG WHLOC $ 237 $ — $ 575 $ — RES RE 833 2,772 893 74 MF RE — — — — CML & CRE 858 805 136 117 AG & AGRE 214 386 282 307 CON & MAR 18 10 18 9 $ 2,160 $ 3,973 $ 1,904 $ 507 No troubled loans were restructured during the three or nine months ended September 30, 2019 or 2018. No restructured loans defaulted during the three or nine months ended September 30, 2019 or 2018. There was one customer with a residential loan balance of $725,000 in the process of foreclosure at September 30, 2019 and there were no residential loans in the process of foreclosure at December 31, 2018.

Regulatory Matters

Regulatory Matters	9 Months Ended
	Sep. 30, 2019
Regulatory Matters
Regulatory Matters	Note 4: Regulatory Matters The Company, Merchants Bank, and FMBI are subject to various regulatory capital requirements administered by the federal banking agencies. Failure to meet minimum capital requirements can initiate certain mandatory, and possibly additional discretionary, actions by federal and state banking regulators that, if undertaken, could have a direct material effect on the Company’s financial statements. Under capital adequacy guidelines and the regulatory framework for prompt corrective action, the Company, Merchants Bank, and FMBI must meet specific capital guidelines that involve quantitative measures of the Company’s, Merchants Bank, and FMBI’s assets, liabilities and certain off-balance-sheet items as calculated under regulatory accounting practices. The Company’s, Merchants Bank’s, and FMBI’s capital amounts and classification are also subject to qualitative judgments by the regulators about components, risk weightings and other factors. Furthermore, the Company’s, Merchants Bank’s, and FMBI’s regulators could require adjustments to regulatory capital not reflected in these financial statements. Quantitative measures established by regulation to ensure capital adequacy require the Company, Merchants Bank, and FMBI to maintain minimum amounts and ratios (set forth in the table below). Management believes, as of September 30, 2019 and December 31, 2018, that the Company, Merchants Bank, and FMBI met all capital adequacy requirements to which they were subject. As of September 30, 2019 and December 31, 2018, the most recent notifications from the Board of Governors of the Federal Reserve System (“Federal Reserve”) categorized the Company as well capitalized and most recent notifications from the Federal Deposit Insurance Corporation (“FDIC”) categorized Merchants Bank and FMBI as well capitalized under the regulatory framework for prompt corrective action. To be categorized as well capitalized, a company must maintain minimum total risk-based, Tier I risk-based and Tier I leverage ratios as set forth in the table. There are no conditions or events since that notification that management believes have changed the Company, Merchants Bank, or FMBI’s category. The Company, Merchants Bank, and FMBI’s actual capital amounts and ratios are also presented in the following tables. Minimum Amount Required for Minimum Amount Adequately To Be Well Actual Capitalized (1) Capitalized (1) Amount Ratio Amount Ratio Amount Ratio (Dollars in thousands) September 30, 2019 Total capital (1) (to risk-weighted assets) Company $ 609,995 10.8 % $ 450,589 8.0 % $ — N/A Merchants Bank 613,387 11.2 % 439,405 8.0 % 549,257 10.0 % FMBI 20,154 14.2 % 11,315 8.0 % 14,144 10.0 % Tier 1 capital (1) (to risk-weighted assets) Company 596,290 10.6 % 337,942 6.0 % — N/A Merchants Bank 600,164 10.9 % 329,554 6.0 % 439,405 8.0 % FMBI 19,672 13.9 % 8,486 6.0 % 11,315 8.0 % Common Equity Tier 1 capital (1) (to risk-weighted assets) Company 383,602 6.8 % 253,457 4.5 % — N/A Merchants Bank 600,164 10.9 % 247,166 4.5 % 357,017 6.5 % FMBI 19,672 13.9 % 6,365 4.5 % 9,194 6.5 % Tier 1 capital (1) (to average assets) Company 596,290 10.0 % 239,096 4.0 % — N/A Merchants Bank 600,164 10.3 % 232,749 4.0 % 290,937 5.0 % FMBI 19,672 11.5 % 6,845 4.0 % 8,556 5.0 % Minimum Minimum Amount Required Amount To Be for Adequately Well Actual Capitalized (1) Capitalized (1) Amount Ratio Amount Ratio Amount Ratio (Dollars in thousands) December 31, 2018 Total capital (1) (to risk-weighted assets) Company $ 393,654 12.3 % $ 255,884 8.0 % $ — N/A Merchants Bank 412,386 13.3 % 248,290 8.0 % 310,363 10.0 % FMBI 17,537 18.6 % 7,559 8.0 % 9,448 10.0 % Tier 1 capital (1) (to risk-weighted assets) Company 380,950 11.9 % 191,913 6.0 % — N/A Merchants Bank 399,815 12.9 % 186,218 6.0 % 248,290 8.0 % FMBI 17,404 18.4 % 5,669 6.0 % 7,559 8.0 % Common Equity Tier 1 capital (1) (to risk-weighted assets) Company 339,369 10.6 % 143,935 4.5 % — N/A Merchants Bank 399,815 12.9 % 139,663 4.5 % 201,736 6.5 % FMBI 17,404 18.4 % 4,252 4.5 % 6,141 6.5 % Tier 1 capital (1) (to average assets) Company 380,950 10.0 % 152,081 4.0 % — N/A Merchants Bank 399,815 11.0 % 145,723 4.0 % 182,154 5.0 % FMBI 17,404 10.8 % 6,453 4.0 % 8,066 5.0 % 1 As defined by regulatory agencies. Beginning January 1, 2015, the Basel III Capital Rule applied to Merchants Bank. The following table lists the capital categories and ratios determined by the Board of Governors of the Federal Reserve System and the FDIC. Common Equity Total Risk-based Tier 1 Risk-based Tier 1 Risk-based Tier 1 Capital Category Capital ratio Capital ratio Capital ratio Leverage ratio Well capitalized 10 % 8 % 6.5 % 5 % Adequately capitalized 8 6 4.5 4 Undercapitalized <8 <6 <4.5 <4 Significantly undercapitalized <6 <4 <3 <3 Critically undercapitalized Tangible Equity/Total Assets </= 2% The Basel III Capital Rules, among other things, (i) introduced a new capital measure called “Common Equity Tier 1” (CET1), (ii) specified that Tier 1 capital consist of CET1 and “Additional Tier 1 Capital” instruments meeting specified requirements, (iii) defined CET1 narrowly by requiring that most deductions/adjustments to regulatory capital measures be made to CET1 and not to the other components of capital and (iv) expanded the scope of the deductions/adjustments as compared to existing regulations. Implementation of the deductions and other adjustments to CET1 began on January 1, 2015, and were phased in over a four-year period, becoming fully phased in on January 1, 2019. Additionally, under the Basel III Capital Rules, in order to avoid limitations on capital distributions of dividend payments and certain discretionary bonus payments to executive officers, a banking organization must hold a capital conservation buffer composed of capital above its minimum risk-based capital requirements. On January 1, 2019 the capital conservation buffer became fully phased in at 2.5%.

Derivative Financial Instrument

Derivative Financial Instruments	9 Months Ended
	Sep. 30, 2019
Derivative Financial Instruments
Derivative Financial Instruments	Note 5: Derivative Financial Instruments The Company uses derivative financial instruments to help manage exposure to interest rate risk and the effects that changes in interest rates may have on net income and the fair value of assets and liabilities. Forward Sales Commitments and Interest Rate Lock Commitments The Company enters into forward contracts for the future delivery of mortgage loans to third party investors and enters into interest rate locks with potential borrowers to fund specific mortgage loans that will be sold into the secondary market. The forward contracts are entered into in order to economically hedge the effect of changes in interest rates resulting from the Company’s commitment to fund the loans. Each of these items are considered derivatives, but are not designated as accounting hedges, and are recorded at fair value with changes in fair value reflected in noninterest income on the condensed consolidated statements of income. The fair value of derivative instruments with a positive fair value are reported in other assets in the condensed consolidated balance sheets while derivative instruments with a negative fair value are reported in other liabilities in the condensed consolidated balance sheets. The following table presents the notional amount and fair value of interest rate locks and forward contracts utilized by the Company at September 30, 2019 and December 31, 2018. Notional Fair Value Amount Balance Sheet Location Asset Liability September 30, 2019 (In thousands) (In thousands) Interest rate lock commitments $ 46,846 Other assets/liabilities $ 296 $ 8 Forward contracts 67,698 Other assets/liabilities 14 16 $ 310 $ 24 Notional Fair Value Amount Balance Sheet Location Asset Liability December 31, 2018 (In thousands) (In thousands) Interest rate lock commitments $ 8,812 Other assets/liabilities $ 70 $ — Forward contracts 19,640 Other assets/liabilities — 9 $ 70 $ 9 Fair values of these derivative financial instruments were estimated using changes in mortgage interest rates from the date the Company entered into the interest rate lock commitment and the balance sheet date. The following table summarizes the periodic changes in the fair value of the derivative financial instruments on the condensed consolidated statements of income for the three and nine months ended September 30, 2019 and 2018. Three Months Ended Nine Months Ended September 30, September 30, 2019 2018 2019 2018 (In thousands) (In thousands) Interest rate lock commitments $ 144 $ (95) $ 218 $ 68 Forward contracts (includes pair-off settlements) (25) 16 (80) (76) Net derivative gains (losses) $ 119 $ (79) 138 $ (8) Derivatives on Behalf of Customers The Company began offering derivative contracts to some customers in connection with their risk management needs during the three months ended September 30, 2019. These derivatives include interest rate swaps. The Company manages the risk associated with these contracts by entering into an equal and offsetting derivative with a third-party dealer. These derivatives generally work together as an economic interest rate hedge, but the Company does not designate them for hedge accounting treatment. Consequently, changes in fair value of the corresponding derivative financial asset or liability were recorded as either a charge or credit to current earnings during the period in which the changes occurred, typically resulting in no net earnings impact. The fair values of derivative assets and liabilities related to derivatives for customers with interest rate swaps were recorded in the condensed consolidated balance sheets as follows: Notional Fair Value Amount Balance Sheet Location Asset Liability (In thousands) (In thousands) September 30, 2019 $ 4,400 Other assets/liabilities $ 48 $ 48 December 31, 2018 — Other assets/liabilities $ — $ — The gross gains and losses on these derivative assets and liabilities recorded in Other Noninterest income and Other Noninterest expense in the condensed consolidated statements of income as follows: Three Months Ended Nine Months Ended September 30, September 30, 2019 2018 2019 2018 (In thousands) (In thousands) Gross swap gains $ — $ — $ — $ — Gross swap losses — — — — Net swap gains (losses) $ — $ — — $ — The Company pledged no collateral to secure its obligations under these contracts at September 30, 2019 and September 30, 2018, respectively.

Disclosures about Fair Value of

Disclosures about Fair Value of Assets and Liabilities	9 Months Ended
	Sep. 30, 2019
Disclosures about Fair Value of Assets and Liabilities
Disclosures about Fair Value of Assets and Liabilities	Note 6: Disclosures about Fair Value of Assets and Liabilities Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. Fair value measurements must maximize the use of observable inputs and minimize the use of unobservable inputs. There is a hierarchy of three levels of inputs that may be used to measure fair value: Level 1 Quoted prices in active markets for identical assets or liabilities Level 2 Observable inputs other than Level 1 prices, such as quoted prices for similar assets or liabilities; quoted prices in markets that are not active; or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities Level 3 Unobservable inputs supported by little or no market activity and are significant to the fair value of the assets or liabilities Recurring Measurements The following tables present the fair value measurements of assets and liabilities recognized in the accompanying balance sheets measured at fair value on a recurring basis and the level within the fair value hierarchy in which the fair value measurements fall at September 30, 2019 and December 31, 2018: Fair Value Measurements Using Quoted Prices in Significant Active Markets Other Significant for Identical Observable Unobservable Fair Assets Inputs Inputs Assets Value (Level 1) (Level 2) (Level 3) (In thousands) September 30, 2019 Trading securities $ 227,914 $ — $ 227,914 $ — Available-for-sale securities: Treasury notes 2,765 2,765 — — Federal agencies 257,388 — 257,388 — Municipals 12,760 — 12,760 — Mortgage-backed - Government-sponsored entity (GSE) - residential 35,760 — 35,760 — Loans held for sale 23,357 — 23,357 — Mortgage servicing rights 71,989 — — 71,989 Derivative assets - interest rate lock commitments 296 — — 296 Derivative assets - forward contracts 14 — 14 — Derivative assets - interest rate swaps 48 — 48 — Derivative liabilities - interest rate lock commitments 8 — — 8 Derivative liabilities - forward contracts 16 — 16 — Derivative liabilities - interest rate swaps 48 — 48 — December 31, 2018 Trading securities $ 163,419 $ — $ 163,419 $ — Available-for-sale securities: Treasury notes 11,941 11,941 — — Federal agencies 236,930 — 236,930 — Municipals 21,332 — 21,332 — Mortgage-backed - Government-sponsored entity (GSE) - residential 60,868 — 60,868 — Loans held for sale 11,886 — 11,886 — Mortgage servicing rights 77,844 — — 77,844 Derivative assets - interest rate lock commitments 70 — — 70 Derivative liabilities - forward contracts 9 — 9 — Following is a description of the valuation methodologies and inputs used for assets measured at fair value on a recurring basis and recognized in the accompanying balance sheets, as well as the general classification of such assets pursuant to the valuation hierarchy. There have been no significant changes in the valuation techniques during the nine months ended September 30, 2019 and the year ended December 31, 2018. For assets classified within Level 3 of the fair value hierarchy, the process used to develop the reported fair value is described below. Trading and Available-for-Sale Securities Where quoted market prices are available in an active market, securities such as U.S. Treasuries are classified within Level 1 of the valuation hierarchy. If quoted market prices are not available, then fair values are estimated by using quoted prices of securities with similar characteristics or independent asset pricing services and pricing models, the inputs of which are market-based or independently sourced market parameters, including, but not limited to, yield curves, interest rates, volatilities, prepayments, defaults, cumulative loss projections and cash flows. Such securities are classified in Level 2 of the valuation hierarchy including federal agencies, mortgage-backed securities, equities, and Federal Housing Administration participation certificates. In certain cases where Level 1 or Level 2 inputs are not available, securities are classified within Level 3 of the hierarchy. Loans Held for Sale Certain loans held for sale at fair value are saleable into the secondary mortgage markets and their fair values are estimated using observable quoted market or contracted prices, or market price equivalents, which would be used by other market participants. These saleable loans are considered Level 2. Mortgage Servicing Rights Mortgage servicing rights do not trade in an active, open market with readily observable prices. Accordingly, fair value is estimated using discounted cash flow models having significant inputs of discount rate, prepayment speed and default rate. Due to the nature of the valuation inputs, mortgage servicing rights are classified within Level 3 of the hierarchy. The Chief Financial Officer’s (CFO) office contracts with a pricing specialist to generate fair value estimates on a quarterly basis. The CFO’s office challenges the reasonableness of the assumptions used and reviews the methodology to ensure the estimated fair value complies with accounting standards generally accepted in the United States. Derivative Financial Instruments The Company estimates the fair value of interest rate lock commitments based on the value of the underlying mortgage loan, quoted mortgage backed security prices, estimates of the fair value of the mortgage servicing rights, and an estimate of the probability that the mortgage loan will fund within the terms of the interest rate lock commitment, net of expenses. With respect to its interest rate lock commitments, management determined that a Level 3 classification was most appropriate based on the various significant unobservable inputs utilized in estimating the fair value of its interest rate lock commitments. The Company estimates the fair value of forward sales commitments based on market quotes of mortgage backed security prices for securities similar to the ones used, which are considered Level 2. The fair value of interest rate swaps is based on prices that are obtained from a third-party that uses observable market inputs, thereby supporting a Level 2 classification. Changes in fair value of the Company’s derivative financial instruments are recognized through noninterest income and/or noninterest expense on its condensed consolidated statement of income. Level 3 Reconciliation The following is a reconciliation of the beginning and ending balances of recurring fair value measurements recognized in the accompanying balance sheets using significant unobservable (Level 3) inputs: Three Months Ended September 30, Nine Months Ended September 30, 2019 2018 2019 2018 (In thousands) (In thousands) Mortgage servicing rights Balance, beginning of period $ 74,550 $ 70,085 $ 77,844 $ 66,079 Additions Originated and purchased servicing 1,356 1,563 4,637 7,265 Subtractions Paydowns (2,438) (658) (4,627) (3,267) Changes in fair value due to changes in valuation inputs or assumptions used in the valuation model (1,479) 500 (5,865) 1,413 Balance, end of period $ 71,989 $ 71,490 $ 71,989 $ 71,490 Available-for-sale securities - Municipals Balance, beginning of period $ — $ 6,431 $ — $ 6,688 Additions Purchased securities — — — — Subtractions Paydowns — — — (257) Sales — (6,431) — (6,431) Unrealized gains (losses) included in other comprehensive income — — — — Balance, end of period $ — $ — $ — $ — Derivative Assets - interest rate lock commitments Balance, beginning of period $ 147 $ 170 $ 70 $ — Changes in fair value 149 (102) 226 68 Balance, end of period $ 296 $ 68 $ 296 $ 68 Derivative Liabilities - interest rate lock commitments Balance, beginning of period $ 3 $ 7 $ — $ — Changes in fair value 5 (7) 8 — Balance, end of period $ 8 $ — $ 8 — Nonrecurring Measurements The following table presents the fair value measurement of assets measured at fair value on a nonrecurring basis and the level within the fair value hierarchy in which the fair value measurements fall at September 30, 2019 and December 31, 2018. Fair Value Measurements Using Quoted Prices in Significant Active Markets Other Significant for Identical Observable Unobservable Fair Assets Inputs Inputs Assets Value (Level 1) (Level 2) (Level 3) (In thousands) September 30, 2019 Impaired loans (collateral-dependent) $ 1,600 $ — $ — $ 1,600 December 31, 2018 Impaired loans (collateral-dependent) $ 2,639 $ — $ — $ 2,639 Following is a description of the valuation methodologies and inputs used for assets measured at fair value on a nonrecurring basis and recognized in the accompanying balance sheet, as well as the general classification of such assets pursuant to the valuation hierarchy. For assets classified within Level 3 of the fair value hierarchy, the process used to develop the reported fair value is described below. Collateral-Dependent Impaired Loans, Net of Allowance for Loan Losses The estimated fair value of collateral-dependent impaired loans is based on the appraised fair value of the collateral, less estimated cost to sell. Collateral-dependent impaired loans are classified within Level 3 of the fair value hierarchy. The Company considers the appraisal or evaluation as the starting point for determining fair value and then considers other factors and events in the environment that may affect the fair value. Appraisals of the collateral underlying collateral-dependent loans are obtained when the loan is determined to be collateral-dependent and subsequently as deemed necessary by the Company’s Chief Credit Officer’s (CCO) office. Appraisals are reviewed for accuracy and consistency by the CCO’s office. Appraisers are selected from the list of approved appraisers maintained by management. The appraised values are reduced by discounts to consider lack of marketability and estimated cost to sell if repayment or satisfaction of the loan is dependent on the sale of the collateral. These discounts and estimates are developed by the CCO’s office by comparison to historical results. Unobservable (Level 3) Inputs: The following table presents quantitative information about unobservable inputs used in recurring and nonrecurring Level 3 fair value measurements other than goodwill. Valuation Fair Value Technique Unobservable Inputs Range (In thousands) At September 30, 2019: Collateral-dependent impaired loans $ 1,600 Market comparable properties Marketability discount 37% Mortgage servicing rights $ 71,989 Discounted cash flow Discount rate 8% - 13% Constant prepayment rate 1% - 39% Derivative assets - interest rate lock commitments $ 296 Discounted cash flow loan closing rates 73-99% Derivative liabilities - interest rate lock commitments $ 8 Discounted cash flow loan closing rates 73-99% At December 31, 2018: Collateral-dependent impaired loans $ 2,639 Market comparable properties Marketability discount 17%-59% Mortgage servicing rights $ 77,844 Discounted cash flow Discount rate 8% - 13% Constant prepayment rate 1% - 30% Derivative assets - interest rate lock commitments $ 70 Discounted cash flow loan closing rates 95-100% Sensitivity of Significant Unobservable Inputs The following is a discussion of the sensitivity of significant unobservable inputs, the interrelationships between those inputs and other unobservable inputs used in recurring fair value measurement and of how those inputs might magnify or mitigate the effect of changes in the unobservable inputs on the fair value measurement. Mortgage Servicing Rights The significant unobservable inputs used in the fair value measurement of the Company’s mortgage servicing rights are discount rates and constant prepayment rates. Significant increases or decreases in any of those inputs in isolation would result in a significantly different fair value measurement. Fair Value of Financial Instruments The following table presents the carrying amount and estimated fair values of the Company’s financial instruments not carried at fair value and the level within the fair value hierarchy in which the fair value measurements fall at September 30, 2019 and December 31, 2018. Fair Value Measurements Using Quoted Prices in Significant Active Markets Other Significant for Identical Observable Unobservable Carrying Fair Assets Inputs Inputs Assets Value Value (Level 1) (Level 2) (Level 3) (In thousands) September 30, 2019 Financial assets: Cash and cash equivalents $ 364,976 $ 364,976 $ 364,976 $ — $ — Securities purchased under agreements to resell 6,760 6,760 — 6,760 — FHLB stock 18,808 18,808 — 18,808 — Loans held for sale 2,475,181 2,475,181 — 2,475,181 — Loans, net 2,742,088 2,728,683 — — 2,728,683 Interest receivable 18,780 18,780 — 18,780 — Financial liabilities: Deposits 5,499,649 5,500,297 3,248,689 2,251,608 — Lines of credit — — — — — Short-term subordinated debt 12,000 12,000 — 12,000 — FHLB advances 147,673 147,772 — 147,772 — Interest payable 13,130 13,130 — 13,130 — December 31, 2018 Financial assets: Cash and cash equivalents $ 336,524 $ 336,524 $ 336,524 $ — $ — Securities purchased under agreements to resell 6,875 6,875 — 6,875 — FHLB stock 7,974 7,974 — 7,974 — Loans held for sale 820,569 820,569 — 820,569 — Loans, net 2,045,423 2,041,772 — — 2,041,772 Interest receivable 13,827 13,827 — 13,827 — Financial liabilities: Deposits 3,231,086 3,230,397 2,550,632 679,765 — Lines of credit 33,150 33,150 — 33,150 — Short-term subordinated debt 10,582 10,582 — 10,582 — FHLB advances 151,721 151,723 — 151,723 — Interest payable 4,132 4,132 — 4,132 — The following methods were used to estimate the fair value of all other financial instruments recognized in the accompanying balance sheets at amounts other than fair value. Cash and Cash Equivalents and Securities Purchased Under Agreement to Resell The carrying amount approximates fair value. Federal Home Loan Bank Stock The fair value of Federal Home Loan Bank of Indianapolis and Federal Home Loan Bank of Chicago (“FHLB”) stock is based on the price at which it may be sold to the FHLB. Loans Held For Sale The carrying amount approximates fair value due to the insignificant time between origination and date of sale. Loans Fair value is estimated by discounting the future cash flows using the market rates at which similar notes would be made to borrowers with similar credit ratings and for the same remaining maturities. The market rates used are based on current rates the Company would impose for similar loans and reflect a market participant assumption about risks associated with nonperformance, illiquidity, and the structure and term of the loans along with local economic and market conditions. Interest Receivable and Payable The carrying amount approximates fair value. The carrying amount is determined using the interest rate, balance and last payment date. Deposits The fair values of noninterest-bearing demand and savings accounts are equal to the amount payable on demand at the balance sheet date. Fair values for fixed-rate certificates and time deposits are estimated using a discounted cash flow calculation that applies interest rates currently being offered on certificates to a schedule of expected monthly maturities on such time deposits. Line of Credit and Short-term Subordinated Debt The carrying amount approximates fair value. Federal Home Loan Bank Advances Fair value is estimated by discounting the future cash flows using rates of similar advances with similar maturities. These rates were obtained from current rates offered by the FHLB. Off-Balance Sheet Commitments Commitments include commitments to purchase and originate mortgage loans, commitments to sell mortgage loans and standby letters of credit and are generally of a short-term nature. The fair value of such commitments are based on fees currently charged to similar agreements, taking into account the remaining terms of the agreements and the counterparties’ credit standing. The fair value of commitments to extend credit and letters of credit is not presented in the previous table since the fair value is considered to be insignificant.

Earnings Per Share

Earnings Per Share	9 Months Ended
	Sep. 30, 2019
Earnings Per Share
Earnings Per Share	Note 7: Earnings Per Share Earnings per share were computed as follows: Three Month Periods Ended September 30, 2019 2018 Weighted- Per Weighted- Per Net Average Share Net Average Share Income Shares Amount Income Shares Amount (In thousands) (In thousands) Net income $ 20,259 $ 16,739 Dividends on preferred stock (3,022) (833) Net income allocated to common shareholders $ 17,237 $ 15,906 Basic earnings per share 28,706,438 $ 0.60 28,694,036 $ 0.55 Effect of dilutive securities-restricted stock awards 38,515 33,786 Diluted earnings per share 28,744,953 $ 0.60 28,727,822 $ 0.55 Nine Month Periods Ended September 30, 2019 2018 Weighted- Per Weighted- Per Net Average Share Net Average Share Income Shares Amount Income Shares Amount (In thousands) (In thousands) Net income $ 47,268 $ 47,452 Dividends on preferred stock (5,598) (2,498) Net income allocated to common shareholders $ 41,670 $ 44,954 Basic earnings per share 28,704,682 $ 1.45 28,692,591 $ 1.57 Effect of dilutive securities-restricted stock awards 38,229 27,149 Diluted earnings per share 28,742,911 $ 1.45 28,719,740 $ 1.57

Share-Based Payment Plans

Share-Based Payment Plans	9 Months Ended
	Sep. 30, 2019
Share-Based Payment Plans
Share-Based Payment Plans	Note 8: Share-Based Payment Plans Equity-based incentive awards are currently issued pursuant to the 2017 Equity Incentive Plan (the “2017 Incentive Plan”). Prior to the adoption of the 2017 Incentive Plan, the equity awards issued historically consisted of restricted stock awards issued pursuant to the Incentive Plan for Merchants Bank Executive Officers (the “Prior Incentive Plan”). As of the effective date of the 2017 Equity Incentive Plan, no further awards will be granted under the Prior Incentive Plan. However, any previously outstanding incentive award granted under the Prior Incentive Plan remains subject to the terms of such plans until the time it is no longer outstanding. During the three months ended September 30, 2019 and 2018, the Company did not issue any shares pursuant to awards issued under these plans. During the nine months ended September 30, 2019 and 2018, the Company issued 10,127 and 7,039 shares, respectively, pursuant to the Prior Incentive Plan. As of September 30, 2019, the Company has not issued any shares pursuant to the 2017 Equity Incentive Plan. During 2018, the Compensation Committee of the Board of Directors approved a plan for non-executive directors to receive a portion of their annual retainer fees in the form of shares of common stock equal to $10,000, rounded up to the nearest whole share. There were no shares issued to non-executive directors during the three months ended September 30, 2019 or 2018, respectively. There were 2,275 and 1,830 shares issued to non-executive directors during the nine months ended September 30, 2019 and 2018, respectively.

Segment Information

Segment Information	9 Months Ended
	Sep. 30, 2019
Segment Information
Segment Information	Note 9: Segment Information Our business segments are defined as Multi-family Mortgage Banking, Mortgage Warehousing, and Banking. The reportable business segments are consistent with the internal reporting and evaluation of the principal lines of business of the Company. The Multi-family Mortgage Banking segment originates and services government sponsored mortgages for multi-family and healthcare facilities. The Mortgage Warehousing segment funds agency eligible residential loans from the date of origination or purchase, until the date of sale in the secondary market, as well as commercial loans to non-depository financial institutions. The Banking segment provides a wide range of financial products and services to consumers and businesses, including retail banking, commercial lending, agricultural lending, retail and correspondent residential mortgage banking, and Small Business Administration (“SBA”) lending. Other includes general and administrative expenses that provide services to all segments; internal funds transfer pricing offsets resulting from allocations to/from the other segments; certain elimination entries and investments in qualified affordable housing limited partnerships. All operations are domestic. The tables below present selected business segment financial information for the three and nine months ended September 30, 2019 and 2018. Multi-family Mortgage Mortgage Banking Warehousing Banking Other Total (In thousands) Three Months Ended September 30, 2019 Total interest income $ 335 $ 30,946 $ 27,963 $ 517 $ 59,761 Total interest expense — 16,157 12,738 (1,758) 27,137 Net interest income 335 14,789 15,225 2,275 32,624 Provision for loan losses — 415 778 — 1,193 Net interest income after provision for loan losses 335 14,374 14,447 2,275 31,431 Total noninterest income 9,759 2,699 (867) (739) 10,852 Total noninterest expense 6,088 2,829 3,708 2,897 15,522 Income before income taxes 4,006 14,244 9,872 (1,361) 26,761 Income taxes 1,265 3,320 2,223 (306) 6,502 Net income (loss) $ 2,741 $ 10,924 $ 7,649 $ (1,055) $ 20,259 Total assets $ 169,283 $ 3,529,267 $ 2,596,313 $ 42,323 $ 6,337,186 Multi-family Mortgage Mortgage Banking Warehousing Banking Other Total (In thousands) Three Months Ended September 30, 2018 Total interest income $ 201 $ 16,335 $ 20,341 $ 700 $ 37,577 Total interest expense — 7,289 7,835 (1,029) 14,095 Net interest income 201 9,046 12,506 1,729 23,482 Provision for loan losses — 227 390 — 617 Net interest income after provision for loan losses 201 8,819 12,116 1,729 22,865 Total noninterest income 10,874 779 818 (564) 11,907 Noninterest expense 4,346 1,998 3,740 2,365 12,449 Income before income taxes 6,729 7,600 9,194 (1,200) 22,323 Income taxes 1,866 1,946 2,093 (321) 5,584 Net income (loss) $ 4,863 $ 5,654 $ 7,101 $ (879) $ 16,739 Total assets $ 152,035 $ 1,624,375 $ 2,010,485 20,054 $ 3,806,949 Multi-family Mortgage Mortgage Banking Warehousing Banking Other Total (In thousands) Nine Months Ended September 30, 2019 Total interest income $ 1,000 $ 67,276 $ 78,439 $ 1,481 $ 148,196 Total interest expense — 35,281 32,929 (4,691) 63,519 Net interest income 1,000 31,995 45,510 6,172 84,677 Provision for loan losses — 875 1,072 — 1,947 Net interest income after provision for loan losses 1,000 31,120 44,438 6,172 82,730 Total noninterest income 20,868 4,593 1,015 (2,090) 24,386 Total noninterest expense 15,392 7,955 12,690 8,440 44,477 Income before income taxes 6,476 27,758 32,763 (4,358) 62,639 Income taxes 1,930 6,682 7,937 (1,178) 15,371 Net income $ 4,546 $ 21,076 $ 24,826 $ (3,180) $ 47,268 Total assets $ 169,283 $ 3,529,267 $ 2,596,313 $ 42,323 $ 6,337,186 Multi-family Mortgage Mortgage Banking Warehousing Banking Other Total (In thousands) Nine Months Ended September 30, 2018 Total interest income $ 472 $ 42,850 $ 56,122 $ 1,294 $ 100,738 Total interest expense — 16,499 20,748 (2,305) 34,942 Net interest income 472 26,351 35,374 3,599 65,796 Provision for loan losses — 1,185 1,836 — 3,021 Net interest income after provision for loan losses 472 25,166 33,538 3,599 62,775 Total noninterest income 32,000 1,949 2,333 (1,432) 34,850 Noninterest expense 11,946 5,919 10,373 6,481 34,719 Income before income taxes 20,526 21,196 25,498 (4,314) 62,906 Income taxes 5,414 5,138 5,932 (1,030) 15,454 Net income $ 15,112 $ 16,058 $ 19,566 $ (3,284) $ 47,452 Total assets $ 152,035 $ 1,624,375 $ 2,010,485 $ 20,054 $ 3,806,949

Recent Accounting Pronouncement

Recent Accounting Pronouncements	9 Months Ended
	Sep. 30, 2019
Recent Accounting Pronouncements
Recent Accounting Pronouncements	Note 10: Recent Accounting Pronouncements The Company is an emerging growth company and as such will be subject to the effective dates noted for the private companies if they differ from the effective dates noted for public companies. FASB ASU 2014‑09, Revenue from Contracts with Customers In May 2014, the Financial Accounting Standards Board (the “FASB”) issued Accounting Standards Update (“ASU”) 2014‑09, “Revenue from Contracts with Customers,” which requires an entity to recognize the amount of revenue to which it expects to be entitled for the transfer of promised goods or services to customers. The ASU will replace most existing revenue recognition guidance in U.S. GAAP when it becomes effective. In March 2016 the FASB issued ASU 2016‑08, “Principal versus Agent Considerations (Reporting Revenue Gross versus Net),” which clarifies the guidance in determining revenue recognition as principal versus agent. In April 2016, the FASB issued ASU 2016‑10, “Identifying Performance Obligations and Licensing,” which provides guidance in accounting for immaterial performance obligations and shipping and handling. In May 2016, the FASB issued ASU 2016‑12, “Narrow‑Scope Improvements and Practical Expedients,” which provides clarification on assessing the collectability criterion, presentation of sales taxes, measurement date for noncash consideration and completed contracts at transition. This ASU also provides a practical expedient for contract modifications. As an emerging growth company, these amendments are effective for annual reporting periods beginning after December 15, 2018, and for interim periods within annual periods beginning after December 15, 2019. The Company’s revenue is primarily comprised of net interest income on financial assets and financial liabilities, which is explicitly excluded from the scope of ASU 2014-09. The Company has evaluated the impact of adopting ASU 2014-09 and does not expect it to have a material impact on the Company’s financial position or results of operations. FASB ASU 2016‑01, Recognition and Measurement of Financial Assets and Financial Liabilities In January 2016, the FASB issued ASU 2016‑01, “Recognition and Measurement of Financial Assets and Financial Liabilities.” For public business entities, the amendments in this update include the elimination of the requirement to disclose the method(s) and significant assumptions used to estimate fair value that is required to be disclosed for financial instruments measured at amortized cost on the balance sheet, the requirement to use the exit price notion when measuring fair value of financial instruments for disclosure purposes, the requirement to present separately in other comprehensive income the portion of the total change in the fair value of a liability resulting from a change in the instrument‑specific credit risk when the entity has elected to measure the liability at fair value in accordance with the fair value option for financial instruments, the requirement for separate presentation of financial assets and financial liabilities by measurement category and form of financial asset (that is, securities or loans and receivables) on the balance sheet or accompanying notes to the financial statements, and the amendments clarify that an entity should evaluate the need for a valuation allowance on a deferred tax asset related to available‑for‑sale securities in combination with the entity’s other deferred tax assets. An entity should apply the amendments to this update by means of a cumulative‑effect adjustment to the balance sheet as of the beginning of the fiscal year of adoption. As an emerging growth company, the amendments in this update are effective for fiscal years beginning after December 15, 2018, and interim periods within years beginning after December 15, 2019. Early adoption of the amendments in the update is not permitted, except that early application by public business entities to financial statements of fiscal years or interim periods that have not yet been issued or, by all other entities, that have not yet been made available for issuance, are permitted as of the beginning of the fiscal year of adoption for the following amendment: An entity should present separately in other comprehensive income the portion of the total change in the fair value of a liability at fair value in accordance with the fair value option for financial instruments. An entity should apply the amendments to this update by means of a cumulative-effect adjustment to the balance sheet as of the beginning of the fiscal year of adoption. The Company is continuing to evaluate the impact of adopting this new guidance, but does not expect the adoption of ASU 2016-01 to have a material impact on the Company’s financial position or results of operation. FASB ASU 2016‑02, Leases In February 2016, the FASB issued ASU 2016‑02, “Leases.” Under the new guidance, lessees will be required to recognize the following for all leases (with the exception of short‑term leases) at the commencement date: · A lease liability, which is a lessee’s obligation to make lease payments arising from a lease, measured on a discounted basis; and · A right‑of‑use asset, which is an asset that represents the lessee’s right to use, or control the use of, a specified asset for the lease term. Under the new guidance, lessor accounting is largely unchanged. Certain targeted improvements were made to align, where necessary, lessor accounting with the lessee accounting model and Topic 606, “Revenue from Contracts with Customers.” The new lease guidance simplified the accounting for sale and leaseback transactions primarily because lessees must recognize lease assets and lease liabilities. Lessees will no longer be provided with a source of off‑balance sheet financing. Lessees (for capital and operating leases) and lessors (for sales‑type, direct financing, and operating leases) must apply a modified retrospective transition approach for leases existing at, or entered into after, the beginning of the earliest comparative period presented in the financial statements. The modified retrospective approach would not require any transition accounting for leases that expired before the earliest comparative period presented. Lessees and lessors may not apply a full retrospective transition approach. As an emerging growth company, the amendments in ASU 2016‑02 are effective, as an emerging growth company, beginning after December 15, 2020, and for interim periods for years beginning after January 1, 2021. The Company is continuing to evaluate the impact of adopting this new guidance, but it does not expect the adoption to have a material impact on the Company’s financial position or results of operations. FASB ASU 2016‑13, Financial Instruments—Credit Losses In June 2016, the FASB issued ASU 2016‑13, “Financial Instruments—Credit Losses”, commonly referred to as “CECL”. The amendments in this ASU replace the incurred loss model with a methodology that reflects the “current expected credit losses” over the life of the loan and requires consideration of a broader range of reasonable and supportable information to calculate credit loss estimates. ASU 2016‑13 replaces the incurred loss impairment methodology with a new methodology that reflects expected credit losses over the lives of the loans and requires consideration of a broader range of information to form credit loss estimates. The ASU requires an organization to estimate all expected credit losses for financial assets measured at amortized cost, including loans and held‑to‑maturity debt securities, based on historical experience, current conditions, and reasonable and supportable forecasts. Additional disclosures are required. As an emerging growth company, the amendments in ASU 2016‑13 are effective for fiscal years beginning after December 15, 2022, and interim periods within those fiscal years beginning after December 15, 2022. Because the Company’s status as an emerging growth company is expected to expire on December 31, 2022, this standard will likely be implemented by December 31, 2022. The Company has established a cross-functional committee that has developed a project plan to review modeling data currently available and technology needed to ensure compliance of this standard. The committee has contracted with a vendor to assist in generating specific loan level details within our core systems, as well as compiling peer and industry data that would be useful in our modeling forecasts. While the Company generally expects to recognize a one-time cumulative effect adjustment to the allowance for loan losses as of the beginning of the first reporting period in which the new standard is effective, the Company cannot yet determine the magnitude of any such one-time adjustment or the overall impact of the new guidance on the Company’s consolidated financial statements. Management continues to recognize that the implementation of this ASU may increase the balance of the allowance for loan losses and is continuing to evaluate the potential impact on the Company’s financial position and results of operations. FASB ASU No. 2017‑04, Intangibles—Goodwill and Other (Topic 350) In January 2017, the FASB issued ASU 2017‑04, “Intangibles—Goodwill and Other (Topic 350).” This ASU simplifies the test for goodwill impairment. Specifically, these amendments eliminate Step 2 from the goodwill impairment test, and also eliminate the requirements for any reporting unit with a zero or negative carrying amount to perform a qualitative assessment and, if it fails that qualitative test, to perform Step 2 of the goodwill impairment test. As an emerging growth company, the amendments in this ASU are effective for annual goodwill impairment tests in fiscal years beginning after December 15, 2021. Management continues to believe that the changes will not have a material effect on the Company’s financial position and results of operations.

Basis of Presentation (Policies

Basis of Presentation (Policies)	9 Months Ended
	Sep. 30, 2019
Basis of Presentation
Basis of Presentation	The accompanying unaudited condensed consolidated financial statements include the accounts of Merchants Bancorp, a registered bank holding company (the “Company”) and its wholly owned subsidiaries, Merchants Bank of Indiana (“Merchants Bank”) and Farmers-Merchants Bank of Illinois (“FMBI”). Merchants Bank’s direct and indirect subsidiaries include Merchants Capital Corp. (“MCC”), Merchants Capital Servicing, LLC (“MCS”), Ash Realty Holdings, LLC (“Ash Realty”), MBI Midtown West, LLC (“MMW”), Natty Mac Funding, Inc. (“NMF”), and OneTrust Funding, Inc. The Company also acquired Farmers-Merchants National Bank of Paxton (‘FMNBP”) on October 1, 2018 through a merger with FMBI, with FMBI as the surviving entity. All these entities are collectively referred to as the “Company”. The accompanying unaudited condensed consolidated balance sheet of the Company as of December 31, 2018, which has been derived from audited financial statements, and unaudited condensed consolidated financial statements of the Company as of September 30, 2019 and for the three and nine months ended September 30, 2019 and 2018, were prepared in accordance with the instructions for Form 10‑Q and Article 10 of Regulation S-X and, therefore, do not include information or footnotes necessary for a complete presentation of financial position, results of operations and cash flows in conformity with accounting principles generally accepted in the United States of America. Accordingly, these condensed financial statements should be read in conjunction with the audited financial statements and notes thereto of the Company as of and for the year ended December 31, 2018 in its Annual Report on Form 10-K. Reference is made to the accounting policies of the Company described in the Notes to the Financial Statements contained in the Annual Report on Form 10-K. In the opinion of management, all adjustments (consisting only of normal recurring adjustments) which are necessary for a fair presentation of the unaudited financial statements have been included to present fairly the financial position as of September 30, 2019 and the results of operations for the three and nine months ended September 30, 2019 and 2018, and cash flows for the nine months ended September 30, 2019 and 2018. All interim amounts have not been audited and the results of operations for the three and nine months ended September 30, 2019, herein are not necessarily indicative of the results of operations to be expected for the entire year.
Principles of Consolidation	Principles of Consolidation The unaudited condensed consolidated financial statements as of and for the period ended September 30, 2019 include the Company, and its wholly owned subsidiaries, Merchants Bank, and FMBI. Also included are Merchants Bank’s wholly owned subsidiaries, MCC, MCC’s wholly owned subsidiary, MCS, Ash Realty, NMF, MMW, and OneTrust Funding, Inc. The unaudited condensed consolidated financial statements as of and for the period ended September 30, 2018, include the Company and its wholly owned subsidiary, Merchants Bank, and Merchants Bank’s wholly owned subsidiaries, FMBI (after being acquired on January 2, 2018 and excluding results from FMNBP, which was acquired on October 1, 2018), MCC, MCC’s wholly owned subsidiary, MCS, Ash Realty, NMF, and MMW. All significant intercompany accounts and transactions have been eliminated in consolidation.
Use of Estimates	Use of Estimates The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. Material estimates that are particularly susceptible to significant change relate to the determination of the allowance for loan losses, loan servicing rights and fair values of financial instruments.
Reclassifications	Reclassifications Certain reclassifications have been made to the 2018 financial statements to conform to the financial statement presentation as of and for the three and nine months ended September 30, 2019. These reclassifications had no effect on net income.

Securities (Tables)

Securities (Tables)	9 Months Ended
	Sep. 30, 2019
Securities
Schedule of amortized cost and approximate fair values, together with gross unrealized gains and losses	September 30, 2019 Gross Gross Amortized Unrealized Unrealized Fair Cost Gains Losses Value (In thousands) Available-for-sale securities: Treasury notes $ 2,743 $ 22 $ — $ 2,765 Federal agencies 257,572 9 193 257,388 Municipals 11,976 784 — 12,760 Mortgage-backed - Government-sponsored entity (GSE) - residential 35,517 246 3 35,760 Total available-for-sale securities $ 307,808 $ 1,061 $ 196 $ 308,673 December 31, 2018 Gross Gross Amortized Unrealized Unrealized Fair Cost Gains Losses Value (In thousands) Available-for-sale securities: Treasury notes $ 11,928 $ 26 $ 13 $ 11,941 Federal agencies 237,894 8 972 236,930 Municipals 21,014 336 18 21,332 Mortgage-backed - Government-sponsored entity (GSE) - residential 60,693 254 79 60,868 Total available-for-sale securities $ 331,529 $ 624 $ 1,082 $ 331,071
Schedule of amortized cost and fair value of available-for-sale securities by contractual maturity	September 30, 2019 December 31, 2018 Amortized Fair Amortized Fair Cost Value Cost Value Contractual Maturity (In thousands) Within one year $ 16,248 $ 16,247 $ 179,323 $ 178,581 After one through five years 246,533 246,480 72,470 72,282 After five through ten years 1,587 1,686 7,087 7,203 After ten years 7,923 8,500 11,956 12,137 272,291 272,913 270,836 270,203 Mortgage-backed - Government-sponsored entity (GSE) - residential 35,517 35,760 60,693 60,868 $ 307,808 $ 308,673 $ 331,529 $ 331,071
Schedule of gross unrealized losses and fair value of investments with unrealized losses have been in continuous	September 30, 2019 12 Months or Less than 12 Months Longer Total Gross Gross Gross Fair Unrealized Fair Unrealized Fair Unrealized Value Losses Value Losses Value Losses (In thousands) Available-for-sale securities: Treasury notes $ — $ — $ — $ — $ — $ — Federal agencies 121,552 190 14,996 3 136,548 193 Mortgage-backed - Government-sponsored entity (GSE) - residential 1,114 3 — — 1,114 3 $ 122,666 $ 193 $ 14,996 $ 3 $ 137,662 $ 196 December 31, 2018 12 Months or Less than 12 Months Longer Total Gross Gross Gross Fair Unrealized Fair Unrealized Fair Unrealized Value Losses Value Losses Value Losses (In thousands) Available-for-sale securities: Treasury notes $ 1,990 $ 8 $ 995 $ 5 $ 2,985 $ 13 Federal agencies 28,296 97 191,280 875 219,576 $ 972 Municipals 2,051 18 — — 2,051 $ 18 Mortgage-backed - Government-sponsored entity (GSE) - residential 15,543 79 — — 15,543 79 $ 47,880 $ 202 $ 192,275 $ 880 $ 240,155 $ 1,082

Loans and Allowance for Loan _2

Loans and Allowance for Loan Losses (Tables)	9 Months Ended
	Sep. 30, 2019
Loans and Allowance for Loan Losses
Summary of loans	September 30, December 31, 2019 2018 (In thousands) Mortgage warehouse lines of credit $ 796,344 $ 337,332 Residential real estate 410,550 410,871 Multi-family and healthcare financing 1,145,646 914,393 Commercial and commercial real estate 297,788 299,194 Agricultural production and real estate 85,737 79,255 Consumer and margin loans 19,728 17,082 2,755,793 2,058,127 Less Allowance for loan losses 13,705 12,704 Loans Receivable $ 2,742,088 $ 2,045,423
Summary of activity in the allowance for loans and recorded investment by loan portfolio	At or For the Three Months Ended September 30, 2019 MTG WHLOC RES RE MF RE CML & CRE AG & AGRE CON & MAR TOTAL (In thousands) Allowance for loan losses Balance, beginning of period $ 1,565 $ 1,929 $ 5,144 $ 3,271 $ 515 $ 180 $ 12,604 Provision (credit) for loan losses 533 63 753 (174) 14 4 1,193 Loans charged to the allowance (107) — — — — — (107) Recoveries of loans previously charged off — — — 15 — — 15 Balance, end of period $ 1,991 $ 1,992 $ 5,897 $ 3,112 $ 529 $ 184 $ 13,705 Ending balance: individually evaluated for impairment $ — 14 — 544 27 8 $ 593 Ending balance: collectively evaluated for impairment $ 1,991 $ 1,978 $ 5,897 $ 2,568 $ 502 $ 176 $ 13,112 Loans Ending balance $ 796,344 $ 410,550 $ 1,145,646 $ 297,788 $ 85,737 $ 19,728 $ 2,755,793 Ending balance individually evaluated for impairment $ 237 $ 5,161 $ — $ 8,437 $ 214 $ 25 $ 14,074 Ending balance collectively evaluated for impairment $ 796,107 $ 405,389 $ 1,145,646 $ 289,351 $ 85,523 $ 19,703 $ 2,741,719 For the Three Months Ended September 30, 2018 MTG WHLOC RES RE MF RE CML & CRE AG & AGRE CON & MAR TOTAL (In thousands) Allowance for loan losses Balance, beginning of period $ 646 $ 1,812 $ 4,662 $ 2,803 $ 392 $ 273 $ 10,588 Provision (credit) for loan losses 73 96 240 184 35 (11) 617 Loans charged to the allowance — — — 46 — 28 74 Recoveries of loans previously charged off — (16) — (1) — (19) (36) Balance, end of period $ 719 $ 1,892 $ 4,902 $ 3,032 $ 427 $ 271 $ 11,243 For the Nine Months Ended September 30, 2019 MTG WHLOC RES RE MF RE CML & CRE AG & AGRE CON & MAR TOTAL (In thousands) Allowance for loan losses Balance, beginning of period $ 1,068 $ 1,986 $ 6,030 $ 3,051 $ 429 $ 140 $ 12,704 Provision for loan losses 1,030 6 (133) 900 100 44 1,947 Loans charged to the allowance (107) — — (854) (3) — (964) Recoveries of loans previously charged off — — — 15 3 — 18 Balance, end of period $ 1,991 $ 1,992 $ 5,897 $ 3,112 $ 529 $ 184 $ 13,705 For the Nine Months Ended September 30, 2018 MTG WHLOC RES RE MF RE CML & CRE AG & AGRE CON & MAR TOTAL (In thousands) Allowance for loan losses Balance, beginning of period $ 283 $ 1,587 $ 3,502 $ 2,362 $ 320 $ 257 $ 8,311 Provision (credit) for loan losses 436 305 1,400 759 107 14 3,021 Loans charged to the allowance — — — (89) — — (89) Recoveries of loans previously charged off — — — — — — — Balance, end of period $ 719 $ 1,892 $ 4,902 $ 3,032 $ 427 $ 271 $ 11,243
Summary of activity in the allowance for loan losses	December 31, 2018 MTG WHLOC RES RE MF RE CML & CRE AG & AGRE CON & MAR TOTAL (In thousands) Allowance for loan losses Balance, December 31, 2018 $ 1,068 $ 1,986 $ 6,030 $ 3,051 $ 429 $ 140 $ 12,704 Ending balance: individually evaluated for impairment $ 225 $ — $ — $ 400 $ 20 $ — $ 645 Ending balance: collectively evaluated for impairment $ 843 $ 1,986 $ 6,030 $ 2,651 $ 409 $ 140 $ 12,059 Loans Balance, December 31, 2018 $ 337,332 $ 410,871 $ 914,393 $ 299,194 $ 79,255 $ 17,082 $ 2,058,127 Ending balance individually evaluated for impairment $ 575 $ 1,606 $ — $ 8,576 $ 370 $ 58 $ 11,185 Ending balance collectively evaluated for impairment $ 336,757 $ 409,265 $ 914,393 $ 290,618 $ 78,885 $ 17,024 $ 2,046,942
Schedule of credit risk profile of loan portfolio	September 30, 2019 MTG WHLOC RES RE MF RE CML & CRE AG & AGRE CON & MAR TOTAL (In thousands) Special Mention (Watch) $ — $ 674 $ 38,999 $ 11,259 $ 5,116 $ 38 $ 56,086 Substandard 237 5,161 — 8,437 214 25 14,074 Doubtful — — — — — — — Acceptable and Above 796,107 404,715 1,106,647 278,092 80,407 19,665 2,685,633 Total $ 796,344 $ 410,550 $ 1,145,646 $ 297,788 $ 85,737 $ 19,728 $ 2,755,793 December 31, 2018 MTG WHLOC RES RE MF RE CML & CRE AG & AGRE CON & MAR TOTAL (In thousands) Special Mention (Watch) $ — $ 443 $ 71,734 $ 14,650 $ 3,096 $ 681 $ 90,604 Substandard 575 1,606 — 8,576 370 58 11,185 Doubtful — — — — — — — Acceptable and Above 336,757 408,822 842,659 275,968 75,789 16,343 1,956,338 Total $ 337,332 $ 410,871 $ 914,393 $ 299,194 $ 79,255 $ 17,082 $ 2,058,127
Schedule of aging analysis of the recorded investment in loans	September 30, 2019 30-59 Days 60-89 Days Greater Than Total Total Past Due Past Due 90 Days Past Due Current Loans (In thousands) MTG WHLOC $ — $ — $ — $ — $ 796,344 $ 796,344 RES RE 438 548 3,206 4,192 406,358 410,550 MF RE — — — — 1,145,646 1,145,646 CML & CRE 2,443 111 1,664 4,218 293,570 297,788 AG & AGRE 159 — 601 760 84,977 85,737 CON & MAR 25 22 27 74 19,654 19,728 $ 3,065 $ 681 $ 5,498 $ 9,244 $ 2,746,549 $ 2,755,793 December 31, 2018 30-59 Days 60-89 Days Greater Than Total Total Past Due Past Due 90 Days Past Due Current Loans (In thousands) MTG WHLOC $ — $ — $ 324 $ 324 $ 337,008 $ 337,332 RES RE 579 178 825 1,582 409,289 410,871 MF RE — — — — 914,393 914,393 CML & CRE 245 52 253 550 298,644 299,194 AG & AGRE 91 — 588 679 78,576 79,255 CON & MAR 2 52 28 82 17,000 17,082 $ 917 $ 282 $ 2,018 $ 3,217 $ 2,054,910 $ 2,058,127
Schedule of components of impaired loans and specific valuation allowance	September 30, 2019 MTG WHLOC RES RE MF RE CML & CRE AG & AGRE CON & MAR TOTAL (In thousands) Impaired loans without a specific allowance: Recorded investment $ 237 $ 5,016 $ — $ 6,019 $ — $ 14 $ 11,286 Unpaid principal balance 237 5,016 — 6,019 — 14 11,286 Impaired loans with a specific allowance: Recorded investment — 145 — 2,418 214 11 2,788 Unpaid principal balance — 145 — 2,418 214 11 2,788 Specific allowance — 14 — 544 27 8 593 Total impaired loans: Recorded investment 237 5,161 — 8,437 214 25 14,074 Unpaid principal balance 237 5,161 — 8,437 214 25 14,074 Specific allowance — 14 — 544 27 8 593 December 31, 2018 MTG WHLOC RES RE MF RE CML & CRE AG & AGRE CON & MAR TOTAL (In thousands) Impaired loans without a specific allowance: Recorded investment $ 251 $ 1,606 $ — $ 5,636 $ 88 $ 58 $ 7,639 Unpaid principal balance 251 1,606 — 5,636 88 58 7,639 Impaired loans with a specific allowance: Recorded investment 324 — — 2,940 282 — 3,546 Unpaid principal balance 324 — — 2,940 282 — 3,546 Specific allowance 225 — — 400 20 — 645 Total impaired loans: Recorded investment 575 1,606 — 8,576 370 58 11,185 Unpaid principal balance 575 1,606 — 8,576 370 58 11,185 Specific allowance 225 — — 400 20 — 645
Schedule of average recorded investment and interest income recognized in impaired loans	MTG WHLOC RES RE MF RE CML & CRE AG & AGRE CON & MAR TOTAL (In thousands) Three Months Ended September 30, 2019 Average recorded investment in impaired loans $ 239 $ 5,172 $ — $ 8,264 $ 214 $ 26 $ 13,915 Interest income recognized — 9 — 127 — — 136 Three Months Ended September 30, 2018 Average recorded investment in impaired loans $ 691 $ 1,042 $ 109 $ 7,254 $ 425 $ 187 $ 9,708 Interest income recognized 26 21 6 98 4 — 155 MTG WHLOC RES RE MF RE CML & CRE AG & AGRE CON & MAR TOTAL (In thousands) Nine Months Ended September 30, 2019 Average recorded investment in impaired loans $ 244 $ 5,206 $ — $ 8,351 $ 239 $ 28 $ 14,068 Interest income recognized — 62 — 375 — 1 438 Nine Months Ended September 30, 2018 Average recorded investment in impaired loans $ 1,030 $ 1,097 $ 113 $ 7,556 $ 525 $ 184 $ 10,505 Interest income recognized 66 51 8 177 43 1 346
Schedule of nonaccrual loans and loans past due 90 days or more and still accruing	September 30, December 31, 2019 2018 Total Loans > Total Loans > 90 Days & 90 Days & Nonaccrual Accruing Nonaccrual Accruing (In thousands) MTG WHLOC $ 237 $ — $ 575 $ — RES RE 833 2,772 893 74 MF RE — — — — CML & CRE 858 805 136 117 AG & AGRE 214 386 282 307 CON & MAR 18 10 18 9 $ 2,160 $ 3,973 $ 1,904 $ 507

Regulatory Matters (Tables)

Regulatory Matters (Tables)	9 Months Ended
	Sep. 30, 2019
Regulatory Matters
Summary of bank's actual capital amounts and ratios	The Company, Merchants Bank, and FMBI’s actual capital amounts and ratios are also presented in the following tables. Minimum Amount Required for Minimum Amount Adequately To Be Well Actual Capitalized (1) Capitalized (1) Amount Ratio Amount Ratio Amount Ratio (Dollars in thousands) September 30, 2019 Total capital (1) (to risk-weighted assets) Company $ 609,995 10.8 % $ 450,589 8.0 % $ — N/A Merchants Bank 613,387 11.2 % 439,405 8.0 % 549,257 10.0 % FMBI 20,154 14.2 % 11,315 8.0 % 14,144 10.0 % Tier 1 capital (1) (to risk-weighted assets) Company 596,290 10.6 % 337,942 6.0 % — N/A Merchants Bank 600,164 10.9 % 329,554 6.0 % 439,405 8.0 % FMBI 19,672 13.9 % 8,486 6.0 % 11,315 8.0 % Common Equity Tier 1 capital (1) (to risk-weighted assets) Company 383,602 6.8 % 253,457 4.5 % — N/A Merchants Bank 600,164 10.9 % 247,166 4.5 % 357,017 6.5 % FMBI 19,672 13.9 % 6,365 4.5 % 9,194 6.5 % Tier 1 capital (1) (to average assets) Company 596,290 10.0 % 239,096 4.0 % — N/A Merchants Bank 600,164 10.3 % 232,749 4.0 % 290,937 5.0 % FMBI 19,672 11.5 % 6,845 4.0 % 8,556 5.0 % Minimum Minimum Amount Required Amount To Be for Adequately Well Actual Capitalized (1) Capitalized (1) Amount Ratio Amount Ratio Amount Ratio (Dollars in thousands) December 31, 2018 Total capital (1) (to risk-weighted assets) Company $ 393,654 12.3 % $ 255,884 8.0 % $ — N/A Merchants Bank 412,386 13.3 % 248,290 8.0 % 310,363 10.0 % FMBI 17,537 18.6 % 7,559 8.0 % 9,448 10.0 % Tier 1 capital (1) (to risk-weighted assets) Company 380,950 11.9 % 191,913 6.0 % — N/A Merchants Bank 399,815 12.9 % 186,218 6.0 % 248,290 8.0 % FMBI 17,404 18.4 % 5,669 6.0 % 7,559 8.0 % Common Equity Tier 1 capital (1) (to risk-weighted assets) Company 339,369 10.6 % 143,935 4.5 % — N/A Merchants Bank 399,815 12.9 % 139,663 4.5 % 201,736 6.5 % FMBI 17,404 18.4 % 4,252 4.5 % 6,141 6.5 % Tier 1 capital (1) (to average assets) Company 380,950 10.0 % 152,081 4.0 % — N/A Merchants Bank 399,815 11.0 % 145,723 4.0 % 182,154 5.0 % FMBI 17,404 10.8 % 6,453 4.0 % 8,066 5.0 % 1 As defined by regulatory agencies. Beginning January 1, 2015, the Basel III Capital Rule applied to Merchants Bank. The following table lists the capital categories and ratios determined by the Board of Governors of the Federal Reserve System and the FDIC. Common Equity Total Risk-based Tier 1 Risk-based Tier 1 Risk-based Tier 1 Capital Category Capital ratio Capital ratio Capital ratio Leverage ratio Well capitalized 10 % 8 % 6.5 % 5 % Adequately capitalized 8 6 4.5 4 Undercapitalized <8 <6 <4.5 <4 Significantly undercapitalized <6 <4 <3 <3 Critically undercapitalized Tangible Equity/Total Assets </= 2%

Derivative Financial Instrume_2

Derivative Financial Instruments (Tables)	9 Months Ended
	Sep. 30, 2019
Derivative [Line Items]
Summary of notional amount and fair value of derivative assets and liabilities	Notional Fair Value Amount Balance Sheet Location Asset Liability September 30, 2019 (In thousands) (In thousands) Interest rate lock commitments $ 46,846 Other assets/liabilities $ 296 $ 8 Forward contracts 67,698 Other assets/liabilities 14 16 $ 310 $ 24 Notional Fair Value Amount Balance Sheet Location Asset Liability December 31, 2018 (In thousands) (In thousands) Interest rate lock commitments $ 8,812 Other assets/liabilities $ 70 $ — Forward contracts 19,640 Other assets/liabilities — 9 $ 70 $ 9
Summarizes the periodic changes in the fair value of the derivative financial instruments on the condensed consolidated statements of income	Three Months Ended Nine Months Ended September 30, September 30, 2019 2018 2019 2018 (In thousands) (In thousands) Interest rate lock commitments $ 144 $ (95) $ 218 $ 68 Forward contracts (includes pair-off settlements) (25) 16 (80) (76) Net derivative gains (losses) $ 119 $ (79) 138 $ (8)
Interest rate swaps
Derivative [Line Items]
Summary of notional amount and fair value of derivative assets and liabilities	Notional Fair Value Amount Balance Sheet Location Asset Liability (In thousands) (In thousands) September 30, 2019 $ 4,400 Other assets/liabilities $ 48 $ 48 December 31, 2018 — Other assets/liabilities $ — $ —
Summarizes the periodic changes in the fair value of the derivative financial instruments on the condensed consolidated statements of income	Three Months Ended Nine Months Ended September 30, September 30, 2019 2018 2019 2018 (In thousands) (In thousands) Gross swap gains $ — $ — $ — $ — Gross swap losses — — — — Net swap gains (losses) $ — $ — — $ —

Disclosures about Fair Value _2

Disclosures about Fair Value of Assets and Liabilities (Tables)	9 Months Ended
	Sep. 30, 2019
Disclosures about Fair Value of Assets and Liabilities
Schedule of fair value measurement of assets measured at fair value on recurring basis	Fair Value Measurements Using Quoted Prices in Significant Active Markets Other Significant for Identical Observable Unobservable Fair Assets Inputs Inputs Assets Value (Level 1) (Level 2) (Level 3) (In thousands) September 30, 2019 Trading securities $ 227,914 $ — $ 227,914 $ — Available-for-sale securities: Treasury notes 2,765 2,765 — — Federal agencies 257,388 — 257,388 — Municipals 12,760 — 12,760 — Mortgage-backed - Government-sponsored entity (GSE) - residential 35,760 — 35,760 — Loans held for sale 23,357 — 23,357 — Mortgage servicing rights 71,989 — — 71,989 Derivative assets - interest rate lock commitments 296 — — 296 Derivative assets - forward contracts 14 — 14 — Derivative assets - interest rate swaps 48 — 48 — Derivative liabilities - interest rate lock commitments 8 — — 8 Derivative liabilities - forward contracts 16 — 16 — Derivative liabilities - interest rate swaps 48 — 48 — December 31, 2018 Trading securities $ 163,419 $ — $ 163,419 $ — Available-for-sale securities: Treasury notes 11,941 11,941 — — Federal agencies 236,930 — 236,930 — Municipals 21,332 — 21,332 — Mortgage-backed - Government-sponsored entity (GSE) - residential 60,868 — 60,868 — Loans held for sale 11,886 — 11,886 — Mortgage servicing rights 77,844 — — 77,844 Derivative assets - interest rate lock commitments 70 — — 70 Derivative liabilities - forward contracts 9 — 9 —
Schedule of Level 3 reconciliation of recurring fair value measurements	Three Months Ended September 30, Nine Months Ended September 30, 2019 2018 2019 2018 (In thousands) (In thousands) Mortgage servicing rights Balance, beginning of period $ 74,550 $ 70,085 $ 77,844 $ 66,079 Additions Originated and purchased servicing 1,356 1,563 4,637 7,265 Subtractions Paydowns (2,438) (658) (4,627) (3,267) Changes in fair value due to changes in valuation inputs or assumptions used in the valuation model (1,479) 500 (5,865) 1,413 Balance, end of period $ 71,989 $ 71,490 $ 71,989 $ 71,490 Available-for-sale securities - Municipals Balance, beginning of period $ — $ 6,431 $ — $ 6,688 Additions Purchased securities — — — — Subtractions Paydowns — — — (257) Sales — (6,431) — (6,431) Unrealized gains (losses) included in other comprehensive income — — — — Balance, end of period $ — $ — $ — $ — Derivative Assets - interest rate lock commitments Balance, beginning of period $ 147 $ 170 $ 70 $ — Changes in fair value 149 (102) 226 68 Balance, end of period $ 296 $ 68 $ 296 $ 68 Derivative Liabilities - interest rate lock commitments Balance, beginning of period $ 3 $ 7 $ — $ — Changes in fair value 5 (7) 8 — Balance, end of period $ 8 $ — $ 8 —
Schedule of fair value measurement of assets and liabilities measured at fair value on nonrecurring basis	Fair Value Measurements Using Quoted Prices in Significant Active Markets Other Significant for Identical Observable Unobservable Fair Assets Inputs Inputs Assets Value (Level 1) (Level 2) (Level 3) (In thousands) September 30, 2019 Impaired loans (collateral-dependent) $ 1,600 $ — $ — $ 1,600 December 31, 2018 Impaired loans (collateral-dependent) $ 2,639 $ — $ — $ 2,639
Schedule of quantitative information about unobservable inputs used in recurring and nonrecurring Level 3 fair value measurements other than goodwill	Valuation Fair Value Technique Unobservable Inputs Range (In thousands) At September 30, 2019: Collateral-dependent impaired loans $ 1,600 Market comparable properties Marketability discount 37% Mortgage servicing rights $ 71,989 Discounted cash flow Discount rate 8% - 13% Constant prepayment rate 1% - 39% Derivative assets - interest rate lock commitments $ 296 Discounted cash flow loan closing rates 73-99% Derivative liabilities - interest rate lock commitments $ 8 Discounted cash flow loan closing rates 73-99% At December 31, 2018: Collateral-dependent impaired loans $ 2,639 Market comparable properties Marketability discount 17%-59% Mortgage servicing rights $ 77,844 Discounted cash flow Discount rate 8% - 13% Constant prepayment rate 1% - 30% Derivative assets - interest rate lock commitments $ 70 Discounted cash flow loan closing rates 95-100%
Schedule of carrying amount and estimated fair value of financial instruments	Fair Value Measurements Using Quoted Prices in Significant Active Markets Other Significant for Identical Observable Unobservable Carrying Fair Assets Inputs Inputs Assets Value Value (Level 1) (Level 2) (Level 3) (In thousands) September 30, 2019 Financial assets: Cash and cash equivalents $ 364,976 $ 364,976 $ 364,976 $ — $ — Securities purchased under agreements to resell 6,760 6,760 — 6,760 — FHLB stock 18,808 18,808 — 18,808 — Loans held for sale 2,475,181 2,475,181 — 2,475,181 — Loans, net 2,742,088 2,728,683 — — 2,728,683 Interest receivable 18,780 18,780 — 18,780 — Financial liabilities: Deposits 5,499,649 5,500,297 3,248,689 2,251,608 — Lines of credit — — — — — Short-term subordinated debt 12,000 12,000 — 12,000 — FHLB advances 147,673 147,772 — 147,772 — Interest payable 13,130 13,130 — 13,130 — December 31, 2018 Financial assets: Cash and cash equivalents $ 336,524 $ 336,524 $ 336,524 $ — $ — Securities purchased under agreements to resell 6,875 6,875 — 6,875 — FHLB stock 7,974 7,974 — 7,974 — Loans held for sale 820,569 820,569 — 820,569 — Loans, net 2,045,423 2,041,772 — — 2,041,772 Interest receivable 13,827 13,827 — 13,827 — Financial liabilities: Deposits 3,231,086 3,230,397 2,550,632 679,765 — Lines of credit 33,150 33,150 — 33,150 — Short-term subordinated debt 10,582 10,582 — 10,582 — FHLB advances 151,721 151,723 — 151,723 — Interest payable 4,132 4,132 — 4,132 —

Earnings Per Share (Tables)

Earnings Per Share (Tables)	9 Months Ended
	Sep. 30, 2019
Earnings Per Share
Schedule of computation of earnings per share	Three Month Periods Ended September 30, 2019 2018 Weighted- Per Weighted- Per Net Average Share Net Average Share Income Shares Amount Income Shares Amount (In thousands) (In thousands) Net income $ 20,259 $ 16,739 Dividends on preferred stock (3,022) (833) Net income allocated to common shareholders $ 17,237 $ 15,906 Basic earnings per share 28,706,438 $ 0.60 28,694,036 $ 0.55 Effect of dilutive securities-restricted stock awards 38,515 33,786 Diluted earnings per share 28,744,953 $ 0.60 28,727,822 $ 0.55 Nine Month Periods Ended September 30, 2019 2018 Weighted- Per Weighted- Per Net Average Share Net Average Share Income Shares Amount Income Shares Amount (In thousands) (In thousands) Net income $ 47,268 $ 47,452 Dividends on preferred stock (5,598) (2,498) Net income allocated to common shareholders $ 41,670 $ 44,954 Basic earnings per share 28,704,682 $ 1.45 28,692,591 $ 1.57 Effect of dilutive securities-restricted stock awards 38,229 27,149 Diluted earnings per share 28,742,911 $ 1.45 28,719,740 $ 1.57

Segment Information (Tables)

Segment Information (Tables)	9 Months Ended
	Sep. 30, 2019
Segment Information
Schedule of business segment financial information	Multi-family Mortgage Mortgage Banking Warehousing Banking Other Total (In thousands) Three Months Ended September 30, 2019 Total interest income $ 335 $ 30,946 $ 27,963 $ 517 $ 59,761 Total interest expense — 16,157 12,738 (1,758) 27,137 Net interest income 335 14,789 15,225 2,275 32,624 Provision for loan losses — 415 778 — 1,193 Net interest income after provision for loan losses 335 14,374 14,447 2,275 31,431 Total noninterest income 9,759 2,699 (867) (739) 10,852 Total noninterest expense 6,088 2,829 3,708 2,897 15,522 Income before income taxes 4,006 14,244 9,872 (1,361) 26,761 Income taxes 1,265 3,320 2,223 (306) 6,502 Net income (loss) $ 2,741 $ 10,924 $ 7,649 $ (1,055) $ 20,259 Total assets $ 169,283 $ 3,529,267 $ 2,596,313 $ 42,323 $ 6,337,186 Multi-family Mortgage Mortgage Banking Warehousing Banking Other Total (In thousands) Three Months Ended September 30, 2018 Total interest income $ 201 $ 16,335 $ 20,341 $ 700 $ 37,577 Total interest expense — 7,289 7,835 (1,029) 14,095 Net interest income 201 9,046 12,506 1,729 23,482 Provision for loan losses — 227 390 — 617 Net interest income after provision for loan losses 201 8,819 12,116 1,729 22,865 Total noninterest income 10,874 779 818 (564) 11,907 Noninterest expense 4,346 1,998 3,740 2,365 12,449 Income before income taxes 6,729 7,600 9,194 (1,200) 22,323 Income taxes 1,866 1,946 2,093 (321) 5,584 Net income (loss) $ 4,863 $ 5,654 $ 7,101 $ (879) $ 16,739 Total assets $ 152,035 $ 1,624,375 $ 2,010,485 20,054 $ 3,806,949 Multi-family Mortgage Mortgage Banking Warehousing Banking Other Total (In thousands) Nine Months Ended September 30, 2019 Total interest income $ 1,000 $ 67,276 $ 78,439 $ 1,481 $ 148,196 Total interest expense — 35,281 32,929 (4,691) 63,519 Net interest income 1,000 31,995 45,510 6,172 84,677 Provision for loan losses — 875 1,072 — 1,947 Net interest income after provision for loan losses 1,000 31,120 44,438 6,172 82,730 Total noninterest income 20,868 4,593 1,015 (2,090) 24,386 Total noninterest expense 15,392 7,955 12,690 8,440 44,477 Income before income taxes 6,476 27,758 32,763 (4,358) 62,639 Income taxes 1,930 6,682 7,937 (1,178) 15,371 Net income $ 4,546 $ 21,076 $ 24,826 $ (3,180) $ 47,268 Total assets $ 169,283 $ 3,529,267 $ 2,596,313 $ 42,323 $ 6,337,186 Multi-family Mortgage Mortgage Banking Warehousing Banking Other Total (In thousands) Nine Months Ended September 30, 2018 Total interest income $ 472 $ 42,850 $ 56,122 $ 1,294 $ 100,738 Total interest expense — 16,499 20,748 (2,305) 34,942 Net interest income 472 26,351 35,374 3,599 65,796 Provision for loan losses — 1,185 1,836 — 3,021 Net interest income after provision for loan losses 472 25,166 33,538 3,599 62,775 Total noninterest income 32,000 1,949 2,333 (1,432) 34,850 Noninterest expense 11,946 5,919 10,373 6,481 34,719 Income before income taxes 20,526 21,196 25,498 (4,314) 62,906 Income taxes 5,414 5,138 5,932 (1,030) 15,454 Net income $ 15,112 $ 16,058 $ 19,566 $ (3,284) $ 47,452 Total assets $ 152,035 $ 1,624,375 $ 2,010,485 $ 20,054 $ 3,806,949

Basis of Presentation - Offerin

Basis of Presentation - Offering of Preferred Stock (Details)	Sep. 23, 2019USD ($)	Aug. 19, 2019USD ($)$ / sharesshares	Jun. 27, 2019USD ($)$ / sharesshares	Apr. 12, 2019USD ($)shares	Mar. 28, 2019USD ($)$ / sharesshares	Mar. 23, 2019USD ($)$ / sharesshares	Sep. 30, 2019USD ($)$ / shares	Jun. 30, 2019USD ($)	Mar. 31, 2019USD ($)	Sep. 30, 2019USD ($)$ / shares	Dec. 31, 2018$ / shares
Public Offering of Preferred Stock
Net proceeds										$ 192,958,000
Series A preferred stock
Public Offering of Preferred Stock
Shares issued (in shares) | shares				81,800
Net proceeds				$ 2,000,000
Underwriting discounts				$ 41,000
8% Preferred Stock
Public Offering of Preferred Stock
Preferred stock, dividend rate (as a percent)										8.00%	8.00%
Preferred stock liquidation preference (in dollars per share) | $ / shares							$ 1,000			$ 1,000	$ 1,000
7% Preferred Stock
Public Offering of Preferred Stock
Shares issued (in shares) | shares					2,000,000
Shares redeemed (in shares) | shares						874,000
Preferred stock, dividend rate (as a percent)					7.00%	7.00%				7.00%
Preferred stock liquidation preference (in dollars per share) | $ / shares					$ 25	$ 25	25			$ 25
Aggregate gross offering proceeds for the shares issued					$ 50,000,000
Aggregate cost						$ 21,850,000
Offering costs					1,700,000			$ 69,000	$ 1,731,000
Net proceeds					$ 48,300,000
Brokerage fees	$ 0
7% Preferred Stock | Private Placement Offering
Public Offering of Preferred Stock
Shares issued (in shares) | shares			874,000
Preferred stock, dividend rate (as a percent)			7.00%
Preferred stock liquidation preference (in dollars per share) | $ / shares			$ 25
Aggregate gross offering proceeds for the shares issued			$ 21,850,000
6% Preferred Stock
Public Offering of Preferred Stock
Depositary shares issued (in shares) | shares		5,000,000
Depositary shares equivalent preferred stock interest per share		0.025
Preferred stock, dividend rate (as a percent)		6.00%								6.00%
Preferred stock liquidation preference (in dollars per share) | $ / shares		$ 1,000					$ 1,000			$ 1,000
Depositary share, preferred stock liquidation preference (in dollars per share) | $ / shares		$ 25
Offering costs		$ 125,000,000					$ 4.138
Net proceeds		120,900,000
Underwriting discounts		$ 4,100,000

Basis of Presentation - Recent

Basis of Presentation - Recent Acquisitions (Details) - USD ($)	Oct. 01, 2018	Jan. 02, 2018	Dec. 31, 2018	Sep. 30, 2019	Sep. 30, 2018
Acquisitions
Goodwill			$ 17,477,000	$ 15,574,000
Total assets			3,884,163,000	6,337,186,000	$ 3,806,949,000
Fair Value of available for sale securities			331,071,000	308,673,000
Deposits			3,231,086,000	5,499,649,000
FMBI | Stock Purchase Agreement
Acquisitions
Total cost		$ 5,500,000
Goodwill		988,000
Intangible assets		478,000
Time deposits		16,700,000
Time deposits at fair value		16,900,000
Fair value premium of acquired time deposits		$ 185,000
Time deposits, fair value premium, accretion period		20 months
Acquired loan portfolio		$ 27,900,000
Acquired loan portfolio at fair value		27,500,000
Fair value discount on acquired loan portfolio		$ 458,000
FMBI | Core Deposits | Stock Purchase Agreement
Acquisitions
Useful life		10 years
FM Bancorp, Inc
Acquisitions
Outstanding shares of the acquiree	27,537
Share price per share	$ 795.29
Total cost	$ 21,900,000
Goodwill	6,900,000
Intangible assets	1,900,000
Fair Value of available for sale securities	66,300,000
Fair value discount on available for sale securities	1,000,000
Time deposits	95,700,000
Time deposits at fair value	95,700,000
Acquired loan portfolio	35,400,000
Acquired loan portfolio at fair value	34,800,000
Fair value discount on acquired loan portfolio	625,000
Discount related to interest assumption	279,000
Discount related to credit assumption	$ 346,000
Acquired loan portfolio, fair value discount, accretion period	72 months
FM Bancorp, Inc | Core Deposits
Acquisitions
Useful life	10 years
NattyMac, LLC
Acquisitions
Goodwill			3,400,000
Intangible assets			1,600,000
Repayments of subordinated debt			$ 30,000,000
NattyMac, LLC | Customer Lists
Acquisitions
Useful life			21 months
FMBI
Acquisitions
Total assets			$ 43,000,000
FMBI | Stock Purchase Agreement
Acquisitions
Acquired loan portfolio, fair value discount, accretion period		39 months
FM Bancorp
Acquisitions
Total assets				110,000,000
Fair Value of available for sale securities				66,300,000
Time deposits				95,700,000
Net loans receivable				$ 35,000,000

Securities - Trading Securities

Securities - Trading Securities (Details) - USD ($)	9 Months Ended
	Sep. 30, 2019	Sep. 30, 2018
Trading Securities
Unrealized gains included in trading securities	$ 1,700,000	$ 661,000

Securities - Amortized Cost to

Securities - Amortized Cost to Approximate Fair Value (Details) - USD ($) $ in Thousands	Sep. 30, 2019	Dec. 31, 2018
Available-for-sale securities:
Amortized Cost	$ 307,808	$ 331,529
Gross Unrealized Gains	1,061	624
Gross Unrealized Losses	196	1,082
Fair Value of available for sale securities	308,673	331,071
Treasury notes
Available-for-sale securities:
Amortized Cost	2,743	11,928
Gross Unrealized Gains	22	26
Gross Unrealized Losses		13
Fair Value of available for sale securities	2,765	11,941
Federal agencies
Available-for-sale securities:
Amortized Cost	257,572	237,894
Gross Unrealized Gains	9	8
Gross Unrealized Losses	193	972
Fair Value of available for sale securities	257,388	236,930
Municipals
Available-for-sale securities:
Amortized Cost	11,976	21,014
Gross Unrealized Gains	784	336
Gross Unrealized Losses		18
Fair Value of available for sale securities	12,760	21,332
Mortgage-backed - Government-sponsored entity (GSE) - residential
Available-for-sale securities:
Amortized Cost	35,517	60,693
Gross Unrealized Gains	246	254
Gross Unrealized Losses	3	79
Fair Value of available for sale securities	$ 35,760	$ 60,868

Securities - Contractual Maturi

Securities - Contractual Maturities (Details) - USD ($) $ in Thousands	Sep. 30, 2019	Dec. 31, 2018
Contractual Maturities, Amortized Cost
Within one year	$ 16,248	$ 179,323
After one through five years	246,533	72,470
After five through ten years	1,587	7,087
After ten years	7,923	11,956
Amortized Costs, Gross	272,291	270,836
Amortized Costs, Net	307,808	331,529
Contractual Maturities, Fair Value
Within one year	16,247	178,581
After one through five years	246,480	72,282
After five through ten years	1,686	7,203
After ten years	8,500	12,137
Fair Value, Gross	272,913	270,203
Fair Value, Net	308,673	331,071
Available-for-sale Securities, Continuous Unrealized Loss Position, Fair Value	137,662	240,155
Mortgage-backed - Government-sponsored entity (GSE) - residential
Contractual Maturities, Amortized Cost
Amortized Costs, Mortgage-backed - Government-sponsored entity (GSE) - residential	35,517	60,693
Amortized Costs, Net	35,517	60,693
Contractual Maturities, Fair Value
Fair Value, Mortgage-backed - Government-sponsored entity (GSE) - residential	35,760	60,868
Fair Value, Net	35,760	60,868
Available-for-sale Securities, Continuous Unrealized Loss Position, Fair Value	$ 1,114	$ 15,543

Securities - Sale of securities

Securities - Sale of securities (Details) - USD ($)	3 Months Ended		9 Months Ended
	Sep. 30, 2019	Sep. 30, 2018	Sep. 30, 2019	Sep. 30, 2018
Securities
Proceeds from the sale of available-for-sale securities	$ 0		$ 31,083,000	$ 6,431,000
Net gain on sale of securities available for sale			124,000
Gains on sale of securities available for sale			361,000
Losses on sale of securities available for sale			$ 237,000
Gain loss recognized		$ 0		$ 0

Securities - Continuous Unreali

Securities - Continuous Unrealized Loss Position (Details) - USD ($) $ in Thousands	Sep. 30, 2019	Dec. 31, 2018
Available-for-sale securities, Continuous Unrealized Loss Position, Fair Value
Available-for-sale securities, Continuous Unrealized Loss Position, Fair Value, Less than 12 Months	$ 122,666	$ 47,880
Available-for-sale securities, Continuous Unrealized Loss Position, Fair Value, 12 Months or Longer	14,996	192,275
Available-for-sale Securities, Continuous Unrealized Loss Position, Fair Value, Total	137,662	240,155
Available-for-sale securities, Continuous Unrealized Loss Position, Gross Unrealized Losses
Available-for-sale securities, Continuous Unrealized Loss Position, Gross Unrealized Losses, Less than 12 Months	193	202
Available-for-sale securities, Continuous Unrealized Loss Position, Gross Unrealized Losses, 12 Months or Longer	3	880
Available-for-sale securities, Continuous Unrealized Loss Position, Gross Unrealized Losses, Total	196	1,082
Treasury notes
Available-for-sale securities, Continuous Unrealized Loss Position, Fair Value
Available-for-sale securities, Continuous Unrealized Loss Position, Fair Value, Less than 12 Months		1,990
Available-for-sale securities, Continuous Unrealized Loss Position, Fair Value, 12 Months or Longer		995
Available-for-sale Securities, Continuous Unrealized Loss Position, Fair Value, Total		2,985
Available-for-sale securities, Continuous Unrealized Loss Position, Gross Unrealized Losses
Available-for-sale securities, Continuous Unrealized Loss Position, Gross Unrealized Losses, Less than 12 Months		8
Available-for-sale securities, Continuous Unrealized Loss Position, Gross Unrealized Losses, 12 Months or Longer		5
Available-for-sale securities, Continuous Unrealized Loss Position, Gross Unrealized Losses, Total		13
Federal agencies
Available-for-sale securities, Continuous Unrealized Loss Position, Fair Value
Available-for-sale securities, Continuous Unrealized Loss Position, Fair Value, Less than 12 Months	121,552	28,296
Available-for-sale securities, Continuous Unrealized Loss Position, Fair Value, 12 Months or Longer	14,996	191,280
Available-for-sale Securities, Continuous Unrealized Loss Position, Fair Value, Total	136,548	219,576
Available-for-sale securities, Continuous Unrealized Loss Position, Gross Unrealized Losses
Available-for-sale securities, Continuous Unrealized Loss Position, Gross Unrealized Losses, Less than 12 Months	190	97
Available-for-sale securities, Continuous Unrealized Loss Position, Gross Unrealized Losses, 12 Months or Longer	3	875
Available-for-sale securities, Continuous Unrealized Loss Position, Gross Unrealized Losses, Total	193	972
Municipals
Available-for-sale securities, Continuous Unrealized Loss Position, Fair Value
Available-for-sale securities, Continuous Unrealized Loss Position, Fair Value, Less than 12 Months		2,051
Available-for-sale Securities, Continuous Unrealized Loss Position, Fair Value, Total		2,051
Available-for-sale securities, Continuous Unrealized Loss Position, Gross Unrealized Losses
Available-for-sale securities, Continuous Unrealized Loss Position, Gross Unrealized Losses, Less than 12 Months		18
Available-for-sale securities, Continuous Unrealized Loss Position, Gross Unrealized Losses, Total		18
Mortgage-backed - Government-sponsored entity (GSE) - residential
Available-for-sale securities, Continuous Unrealized Loss Position, Fair Value
Available-for-sale securities, Continuous Unrealized Loss Position, Fair Value, Less than 12 Months	1,114	15,543
Available-for-sale Securities, Continuous Unrealized Loss Position, Fair Value, Total	1,114	15,543
Available-for-sale securities, Continuous Unrealized Loss Position, Gross Unrealized Losses
Available-for-sale securities, Continuous Unrealized Loss Position, Gross Unrealized Losses, Less than 12 Months	3	79
Available-for-sale securities, Continuous Unrealized Loss Position, Gross Unrealized Losses, Total	$ 3	$ 79

Loans and Allowance for Loan _3

Loans and Allowance for Loan Losses - Summary of Loans By Classification (Details) - USD ($) $ in Thousands	Sep. 30, 2019	Jun. 30, 2019	Dec. 31, 2018	Sep. 30, 2018	Jun. 30, 2018	Dec. 31, 2017
Loans and Allowance for Loan Losses
Loans	$ 2,755,793		$ 2,058,127
Allowance for loan losses	13,705	$ 12,604	12,704	$ 11,243	$ 10,588	$ 8,311
Loans and Leases Receivable, Net Amount, Total	2,742,088		2,045,423
Mortgage warehouse lines of credit
Loans and Allowance for Loan Losses
Loans	796,344		337,332
Allowance for loan losses	1,991	1,565	1,068	719	646	283
Residential real estate
Loans and Allowance for Loan Losses
Loans	410,550		410,871
Allowance for loan losses	1,992	1,929	1,986	1,892	1,812	1,587
Multi-family and healthcare financing
Loans and Allowance for Loan Losses
Loans	1,145,646		914,393
Allowance for loan losses	5,897	5,144	6,030	4,902	4,662	3,502
Commercial and commercial real estate
Loans and Allowance for Loan Losses
Loans	297,788		299,194
Allowance for loan losses	3,112	3,271	3,051	3,032	2,803	2,362
Agricultural production and real estate
Loans and Allowance for Loan Losses
Loans	85,737		79,255
Allowance for loan losses	529	515	429	427	392	320
Consumer and margin loans
Loans and Allowance for Loan Losses
Loans	19,728		17,082
Allowance for loan losses	$ 184	$ 180	$ 140	$ 271	$ 273	$ 257

Loans and Allowance for Loan _4

Loans and Allowance for Loan Losses - Allowance For Loan Losses (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2019	Sep. 30, 2018	Sep. 30, 2019	Sep. 30, 2018	Dec. 31, 2018
Allowance for loan losses
Balance, beginning of period	$ 12,604	$ 10,588	$ 12,704	$ 8,311
Provision (credit) for loan losses	1,193	617	1,947	3,021
Loans charged to the allowance	(107)	74	(964)	(89)
Recoveries of loans previously charged off	15	(36)	18
Balance, end of period	13,705	11,243	13,705	11,243
Ending balance: individually evaluated for impairment	593		593		$ 645
Ending balance: collectively evaluated for impairment	13,112		13,112		12,059
Loans
Ending balance	2,755,793		2,755,793		2,058,127
Ending balance individually evaluated for impairment	14,074		14,074		11,185
Ending balance: collectively evaluated for impairment	2,741,719		2,741,719		2,046,942
Mortgage warehouse lines of credit
Allowance for loan losses
Balance, beginning of period	1,565	646	1,068	283
Provision (credit) for loan losses	533	73	1,030	436
Loans charged to the allowance	(107)		(107)
Balance, end of period	1,991	719	1,991	719
Ending balance: individually evaluated for impairment					225
Ending balance: collectively evaluated for impairment	1,991		1,991		843
Loans
Ending balance	796,344		796,344		337,332
Ending balance individually evaluated for impairment	237		237		575
Ending balance: collectively evaluated for impairment	796,107		796,107		336,757
Residential real estate
Allowance for loan losses
Balance, beginning of period	1,929	1,812	1,986	1,587
Provision (credit) for loan losses	63	96	6	305
Recoveries of loans previously charged off		(16)
Balance, end of period	1,992	1,892	1,992	1,892
Ending balance: individually evaluated for impairment	14		14
Ending balance: collectively evaluated for impairment	1,978		1,978		1,986
Loans
Ending balance	410,550		410,550		410,871
Ending balance individually evaluated for impairment	5,161		5,161		1,606
Ending balance: collectively evaluated for impairment	405,389		405,389		409,265
Multi-family and healthcare financing
Allowance for loan losses
Balance, beginning of period	5,144	4,662	6,030	3,502
Provision (credit) for loan losses	753	240	(133)	1,400
Balance, end of period	5,897	4,902	5,897	4,902
Ending balance: collectively evaluated for impairment	5,897		5,897		6,030
Loans
Ending balance	1,145,646		1,145,646		914,393
Ending balance: collectively evaluated for impairment	1,145,646		1,145,646		914,393
Commercial and commercial real estate
Allowance for loan losses
Balance, beginning of period	3,271	2,803	3,051	2,362
Provision (credit) for loan losses	(174)	184	900	759
Loans charged to the allowance		46	(854)	(89)
Recoveries of loans previously charged off	15	(1)	15
Balance, end of period	3,112	3,032	3,112	3,032
Ending balance: individually evaluated for impairment	544		544		400
Ending balance: collectively evaluated for impairment	2,568		2,568		2,651
Loans
Ending balance	297,788		297,788		299,194
Ending balance individually evaluated for impairment	8,437		8,437		8,576
Ending balance: collectively evaluated for impairment	289,351		289,351		290,618
Agricultural production and real estate
Allowance for loan losses
Balance, beginning of period	515	392	429	320
Provision (credit) for loan losses	14	35	100	107
Loans charged to the allowance			(3)
Recoveries of loans previously charged off			3
Balance, end of period	529	427	529	427
Ending balance: individually evaluated for impairment	27		27		20
Ending balance: collectively evaluated for impairment	502		502		409
Loans
Ending balance	85,737		85,737		79,255
Ending balance individually evaluated for impairment	214		214		370
Ending balance: collectively evaluated for impairment	85,523		85,523		78,885
Consumer and margin loans
Allowance for loan losses
Balance, beginning of period	180	273	140	257
Provision (credit) for loan losses	4	(11)	44	14
Loans charged to the allowance		28
Recoveries of loans previously charged off		(19)
Balance, end of period	184	$ 271	184	$ 271
Ending balance: individually evaluated for impairment	8		8
Ending balance: collectively evaluated for impairment	176		176		140
Loans
Ending balance	19,728		19,728		17,082
Ending balance individually evaluated for impairment	25		25		58
Ending balance: collectively evaluated for impairment	$ 19,703		$ 19,703		$ 17,024

Loans and Allowance for Loan _5

Loans and Allowance for Loan Losses - Credit Risk Profile of Loan Portfolio (Details) - USD ($) $ in Thousands	Sep. 30, 2019	Dec. 31, 2018
Credit risk profile of portfolio
Loans	$ 2,755,793	$ 2,058,127
Special Mention (Watch)
Credit risk profile of portfolio
Loans	56,086	90,604
Substandard
Credit risk profile of portfolio
Loans	14,074	11,185
Acceptable and Above
Credit risk profile of portfolio
Loans	2,685,633	1,956,338
Mortgage warehouse lines of credit
Credit risk profile of portfolio
Loans	796,344	337,332
Mortgage warehouse lines of credit | Substandard
Credit risk profile of portfolio
Loans	237	575
Mortgage warehouse lines of credit | Acceptable and Above
Credit risk profile of portfolio
Loans	796,107	336,757
Residential real estate
Credit risk profile of portfolio
Loans	410,550	410,871
Residential real estate | Special Mention (Watch)
Credit risk profile of portfolio
Loans	674	443
Residential real estate | Substandard
Credit risk profile of portfolio
Loans	5,161	1,606
Residential real estate | Acceptable and Above
Credit risk profile of portfolio
Loans	404,715	408,822
Multi-family and healthcare financing
Credit risk profile of portfolio
Loans	1,145,646	914,393
Multi-family and healthcare financing | Special Mention (Watch)
Credit risk profile of portfolio
Loans	38,999	71,734
Multi-family and healthcare financing | Acceptable and Above
Credit risk profile of portfolio
Loans	1,106,647	842,659
Commercial and commercial real estate
Credit risk profile of portfolio
Loans	297,788	299,194
Commercial and commercial real estate | Special Mention (Watch)
Credit risk profile of portfolio
Loans	11,259	14,650
Commercial and commercial real estate | Substandard
Credit risk profile of portfolio
Loans	8,437	8,576
Commercial and commercial real estate | Acceptable and Above
Credit risk profile of portfolio
Loans	278,092	275,968
Agricultural production and real estate
Credit risk profile of portfolio
Loans	85,737	79,255
Agricultural production and real estate | Special Mention (Watch)
Credit risk profile of portfolio
Loans	5,116	3,096
Agricultural production and real estate | Substandard
Credit risk profile of portfolio
Loans	214	370
Agricultural production and real estate | Acceptable and Above
Credit risk profile of portfolio
Loans	80,407	75,789
Consumer and margin loans
Credit risk profile of portfolio
Loans	19,728	17,082
Consumer and margin loans | Special Mention (Watch)
Credit risk profile of portfolio
Loans	38	681
Consumer and margin loans | Substandard
Credit risk profile of portfolio
Loans	25	58
Consumer and margin loans | Acceptable and Above
Credit risk profile of portfolio
Loans	$ 19,665	$ 16,343

Loans and Allowance for Loan _6

Loans and Allowance for Loan Losses - Aging Analysis Of The Recorded Investment In Loans (Details) - USD ($) $ in Thousands	Sep. 30, 2019	Dec. 31, 2018
Aging analysis of loan portfolio
Past due loans	$ 9,244	$ 3,217
Current loans	2,746,549	2,054,910
Loans and Leases Receivable, Net of Deferred Income, Total	2,755,793	2,058,127
30-59 Days Past Due
Aging analysis of loan portfolio
Past due loans	3,065	917
60-89 Days Past Due
Aging analysis of loan portfolio
Past due loans	681	282
Greater Than 90 Days
Aging analysis of loan portfolio
Past due loans	5,498	2,018
Mortgage warehouse lines of credit
Aging analysis of loan portfolio
Past due loans		324
Current loans	796,344	337,008
Loans and Leases Receivable, Net of Deferred Income, Total	796,344	337,332
Mortgage warehouse lines of credit | Greater Than 90 Days
Aging analysis of loan portfolio
Past due loans		324
Residential real estate
Aging analysis of loan portfolio
Past due loans	4,192	1,582
Current loans	406,358	409,289
Loans and Leases Receivable, Net of Deferred Income, Total	410,550	410,871
Residential real estate | 30-59 Days Past Due
Aging analysis of loan portfolio
Past due loans	438	579
Residential real estate | 60-89 Days Past Due
Aging analysis of loan portfolio
Past due loans	548	178
Residential real estate | Greater Than 90 Days
Aging analysis of loan portfolio
Past due loans	3,206	825
Multi-family and healthcare financing
Aging analysis of loan portfolio
Current loans	1,145,646	914,393
Loans and Leases Receivable, Net of Deferred Income, Total	1,145,646	914,393
Commercial and commercial real estate
Aging analysis of loan portfolio
Past due loans	4,218	550
Current loans	293,570	298,644
Loans and Leases Receivable, Net of Deferred Income, Total	297,788	299,194
Commercial and commercial real estate | 30-59 Days Past Due
Aging analysis of loan portfolio
Past due loans	2,443	245
Commercial and commercial real estate | 60-89 Days Past Due
Aging analysis of loan portfolio
Past due loans	111	52
Commercial and commercial real estate | Greater Than 90 Days
Aging analysis of loan portfolio
Past due loans	1,664	253
Agricultural production and real estate
Aging analysis of loan portfolio
Past due loans	760	679
Current loans	84,977	78,576
Loans and Leases Receivable, Net of Deferred Income, Total	85,737	79,255
Agricultural production and real estate | 30-59 Days Past Due
Aging analysis of loan portfolio
Past due loans	159	91
Agricultural production and real estate | Greater Than 90 Days
Aging analysis of loan portfolio
Past due loans	601	588
Consumer and margin loans
Aging analysis of loan portfolio
Past due loans	74	82
Current loans	19,654	17,000
Loans and Leases Receivable, Net of Deferred Income, Total	19,728	17,082
Consumer and margin loans | 30-59 Days Past Due
Aging analysis of loan portfolio
Past due loans	25	2
Consumer and margin loans | 60-89 Days Past Due
Aging analysis of loan portfolio
Past due loans	22	52
Consumer and margin loans | Greater Than 90 Days
Aging analysis of loan portfolio
Past due loans	$ 27	$ 28

Loans and Allowance for Loan _7

Loans and Allowance for Loan Losses - Impaired Loans and Specific Valuation Allowance (Details) - USD ($) $ in Thousands	Sep. 30, 2019	Dec. 31, 2018
Impaired loans without a specific allowance:
Recorded investment	$ 11,286	$ 7,639
Unpaid principal balance	11,286	7,639
Impaired loans with a specific allowance:
Recorded investment	2,788	3,546
Unpaid principal balance	2,788	3,546
Specific allowance	593	645
Total impaired loans:
Recorded investments	14,074	11,185
Unpaid principal balance	14,074	11,185
Specific allowance	593	645
Mortgage warehouse lines of credit
Impaired loans without a specific allowance:
Recorded investment	237	251
Unpaid principal balance	237	251
Impaired loans with a specific allowance:
Recorded investment		324
Unpaid principal balance		324
Specific allowance		225
Total impaired loans:
Recorded investments	237	575
Unpaid principal balance	237	575
Specific allowance		225
Residential real estate
Impaired loans without a specific allowance:
Recorded investment	5,016	1,606
Unpaid principal balance	5,016	1,606
Impaired loans with a specific allowance:
Recorded investment	145
Unpaid principal balance	145
Specific allowance	14
Total impaired loans:
Recorded investments	5,161	1,606
Unpaid principal balance	5,161	1,606
Specific allowance	14
Commercial and commercial real estate
Impaired loans without a specific allowance:
Recorded investment	6,019	5,636
Unpaid principal balance	6,019	5,636
Impaired loans with a specific allowance:
Recorded investment	2,418	2,940
Unpaid principal balance	2,418	2,940
Specific allowance	544	400
Total impaired loans:
Recorded investments	8,437	8,576
Unpaid principal balance	8,437	8,576
Specific allowance	544	400
Agricultural production and real estate
Impaired loans without a specific allowance:
Recorded investment		88
Unpaid principal balance		88
Impaired loans with a specific allowance:
Recorded investment	214	282
Unpaid principal balance	214	282
Specific allowance	27	20
Total impaired loans:
Recorded investments	214	370
Unpaid principal balance	214	370
Specific allowance	27	20
Consumer and margin loans
Impaired loans without a specific allowance:
Recorded investment	14	58
Unpaid principal balance	14	58
Impaired loans with a specific allowance:
Recorded investment	11
Unpaid principal balance	11
Specific allowance	8
Total impaired loans:
Recorded investments	25	58
Unpaid principal balance	25	$ 58
Specific allowance	$ 8

Loans and Allowance for Loan _8

Loans and Allowance for Loan Losses - Average Recorded Investment and Interest Income Recognized (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2019	Sep. 30, 2018	Sep. 30, 2019	Sep. 30, 2018
Impaired Loans
Average recorded investment in impaired loans	$ 13,915	$ 9,708	$ 14,068	$ 10,505
Interest income recognized	136		438	346
Interest income recognized		155
Mortgage warehouse lines of credit
Impaired Loans
Average recorded investment in impaired loans	239	691	244	1,030
Interest income recognized				66
Interest income recognized		26
Residential real estate
Impaired Loans
Average recorded investment in impaired loans	5,172	1,042	5,206	1,097
Interest income recognized	9		62	51
Interest income recognized		21
Multi-family and healthcare financing
Impaired Loans
Average recorded investment in impaired loans		109		113
Interest income recognized				8
Interest income recognized		6
Commercial and commercial real estate
Impaired Loans
Average recorded investment in impaired loans	8,264	7,254	8,351	7,556
Interest income recognized	127		375	177
Interest income recognized		98
Agricultural production and real estate
Impaired Loans
Average recorded investment in impaired loans	214	425	239	525
Interest income recognized				43
Interest income recognized		4
Consumer and margin loans
Impaired Loans
Average recorded investment in impaired loans	$ 26	$ 187	28	184
Interest income recognized			$ 1	$ 1

Loans and Allowance for Loan _9

Loans and Allowance for Loan Losses - Non Accrual Loans and Loans Past Due 90 Days Or More and Still Accruing (Details) - USD ($) $ in Thousands	Sep. 30, 2019	Dec. 31, 2018
Loan portfolio past due loans
Nonaccrual	$ 2,160	$ 1,904
Total Loans Greater than 90 Days & Accruing	3,973	507
Mortgage warehouse lines of credit
Loan portfolio past due loans
Nonaccrual	237	575
Residential real estate
Loan portfolio past due loans
Nonaccrual	833	893
Total Loans Greater than 90 Days & Accruing	2,772	74
Commercial and commercial real estate
Loan portfolio past due loans
Nonaccrual	858	136
Total Loans Greater than 90 Days & Accruing	805	117
Agricultural production and real estate
Loan portfolio past due loans
Nonaccrual	214	282
Total Loans Greater than 90 Days & Accruing	386	307
Consumer and margin loans
Loan portfolio past due loans
Nonaccrual	18	18
Total Loans Greater than 90 Days & Accruing	$ 10	$ 9

Loans and Allowance for Loan_10

Loans and Allowance for Loan Losses - Troubled Debt and Modifications (Details)	3 Months Ended		9 Months Ended		12 Months Ended
	Sep. 30, 2019USD ($)item	Sep. 30, 2018item	Sep. 30, 2019USD ($)item	Sep. 30, 2018item	Dec. 31, 2018USD ($)
Troubled debt and modifications
Number of troubled debt restructuring | item	0	0	0	0
Number of loans restructured during the last twelve months that defaulted during the period | item	0	0	0	0
Residential real estate
Troubled debt and modifications
Number of loans in the process of foreclosure | $					0
Value of residential loans in process of foreclosure | $	$ 725,000		$ 725,000

Regulatory Matters (Details)

Regulatory Matters (Details) - USD ($) $ in Thousands	9 Months Ended
	Sep. 30, 2019	Dec. 31, 2018
Company
Total Capital (to risk-weighted assets)
Total Capital (to risk-weighted assets), Actual, Capital Amount	$ 609,995	$ 393,654
Total Capital (to risk weighted assets), Actual, Ratio (as a percent)	10.80%	12.30%
Total Capital, Minimum Amount Required for Adequately Capitalized, Capital Amount	$ 450,589	$ 255,884
Total Capital (to risk weighted assets), Minimum Amount Required for Adequately Capitalized, Ratio (as a percent)	8.00%	8.00%
Tier I Capital (to risk-weighted assets)
Tier I Capital, (to risk-weighted assets), Actual, Capital Amount	$ 596,290	$ 380,950
Tier I Capital (to risk weighted assets), Actual, Ratio (as a percent)	10.60%	11.90%
Tier I Capital, Minimum Amount Required for Adequately Capitalized, Capital Amount	$ 337,942	$ 191,913
Tier I Capital (to risk weighted assets), Minimum Amount Required for Adequately Capitalized, Ratio (as a percent)	6.00%	6.00%
Common Equity Tier I Capital 1 (to risk-weighted assets)
Common Equity Tier I Capital 1, Actual, Capital Amount	$ 383,602	$ 339,369
Common Equity Tier I Capital 1 (to risk weighted assets), Ratio (as a percent)	6.80%	10.60%
Common Equity Tier I Capital 1, Minimum Amount Required for Adequately Capitalized, Capital Amount	$ 253,457	$ 143,935
Common Equity Tier I Capital 1 (to risk weighted assets, Minimum Amount Required for Adequately Capitalized, Ratio (as a percent)	4.50%	4.50%
Tier 1 Capital (to average assets)
Tier 1 Capital, Actual, Capital Amount	$ 596,290	$ 380,950
Tier 1 Capital (to average assets), Actual, Ratio (as a percent)	10.00%	10.00%
Tier 1 Capital, Minimum Amount Required for Adequately Capitalized, Capital Amount	$ 239,096	$ 152,081
Tier 1 Capital (to average assets), Minimum Amount Required for Adequately Capitalized, Ratio (as a percent)	4.00%	4.00%
Federal Deposit Corporation And Federal Reserve Board | Rules Effective January 1, 2015
Tier 1 Capital (to average assets)
Basel III Capital Rules related to CET1, period (in years)	4 years
Additional capital conservation buffer requirement subsequent years Ratio	2.50%
Merchants Bank
Total Capital (to risk-weighted assets)
Total Capital (to risk-weighted assets), Actual, Capital Amount	$ 613,387	$ 412,386
Total Capital (to risk weighted assets), Actual, Ratio (as a percent)	11.20%	13.30%
Total Capital, Minimum Amount Required for Adequately Capitalized, Capital Amount	$ 439,405	$ 248,290
Total Capital (to risk weighted assets), Minimum Amount Required for Adequately Capitalized, Ratio (as a percent)	8.00%	8.00%
Total capital, Minimum Amount To Be Well Capitalized, Capital Amount	$ 549,257	$ 310,363
Total Capital (to risk weighted assets), Minimum Amount To Be Well Capitalized, Ratio (as a percent)	10.00%	10.00%
Tier I Capital (to risk-weighted assets)
Tier I Capital, (to risk-weighted assets), Actual, Capital Amount	$ 600,164	$ 399,815
Tier I Capital (to risk weighted assets), Actual, Ratio (as a percent)	10.90%	12.90%
Tier I Capital, Minimum Amount Required for Adequately Capitalized, Capital Amount	$ 329,554	$ 186,218
Tier I Capital (to risk weighted assets), Minimum Amount Required for Adequately Capitalized, Ratio (as a percent)	6.00%	6.00%
Tier I Capital, Minimum Amount To Be Well Capitalized, Capital Amount	$ 439,405	$ 248,290
Tier I Capital (to risk weighted assets), Minimum Amount To Be Well Capitalized, Ratio (as a percent)	8.00%	8.00%
Common Equity Tier I Capital 1 (to risk-weighted assets)
Common Equity Tier I Capital 1, Actual, Capital Amount	$ 600,164	$ 399,815
Common Equity Tier I Capital 1 (to risk weighted assets), Ratio (as a percent)	10.90%	12.90%
Common Equity Tier I Capital 1, Minimum Amount Required for Adequately Capitalized, Capital Amount	$ 247,166	$ 139,663
Common Equity Tier I Capital 1 (to risk weighted assets, Minimum Amount Required for Adequately Capitalized, Ratio (as a percent)	4.50%	4.50%
Common Equity Tier I Capital 1, Minimum Amount To Be Well Capitalized, Capital Amount	$ 357,017	$ 201,736
Common Equity Tier I Capital 1 (to risk weighted assets), Minimum Amount To Be Well Capitalized, Ratio (as a percent)	6.50%	6.50%
Tier 1 Capital (to average assets)
Tier 1 Capital, Actual, Capital Amount	$ 600,164	$ 399,815
Tier 1 Capital (to average assets), Actual, Ratio (as a percent)	10.30%	11.00%
Tier 1 Capital, Minimum Amount Required for Adequately Capitalized, Capital Amount	$ 232,749	$ 145,723
Tier 1 Capital (to average assets), Minimum Amount Required for Adequately Capitalized, Ratio (as a percent)	4.00%	4.00%
Tier 1 Capital, Minimum Amount To Be Well Capitalized, Capital Amount	$ 290,937	$ 182,154
Tier 1 Capital (to average assets), Minimum Amount To Be Well Capitalized, Ratio (as a percent)	5.00%	5.00%
FMBI
Total Capital (to risk-weighted assets)
Total Capital (to risk-weighted assets), Actual, Capital Amount	$ 20,154	$ 17,537
Total Capital (to risk weighted assets), Actual, Ratio (as a percent)	14.20%	18.60%
Total Capital, Minimum Amount Required for Adequately Capitalized, Capital Amount	$ 11,315	$ 7,559
Total Capital (to risk weighted assets), Minimum Amount Required for Adequately Capitalized, Ratio (as a percent)	8.00%	8.00%
Total capital, Minimum Amount To Be Well Capitalized, Capital Amount	$ 14,144	$ 9,448
Total Capital (to risk weighted assets), Minimum Amount To Be Well Capitalized, Ratio (as a percent)	10.00%	10.00%
Tier I Capital (to risk-weighted assets)
Tier I Capital, (to risk-weighted assets), Actual, Capital Amount	$ 19,672	$ 17,404
Tier I Capital (to risk weighted assets), Actual, Ratio (as a percent)	13.90%	18.40%
Tier I Capital, Minimum Amount Required for Adequately Capitalized, Capital Amount	$ 8,486	$ 5,669
Tier I Capital (to risk weighted assets), Minimum Amount Required for Adequately Capitalized, Ratio (as a percent)	6.00%	6.00%
Tier I Capital, Minimum Amount To Be Well Capitalized, Capital Amount	$ 11,315	$ 7,559
Tier I Capital (to risk weighted assets), Minimum Amount To Be Well Capitalized, Ratio (as a percent)	8.00%	8.00%
Common Equity Tier I Capital 1 (to risk-weighted assets)
Common Equity Tier I Capital 1, Actual, Capital Amount	$ 19,672	$ 17,404
Common Equity Tier I Capital 1 (to risk weighted assets), Ratio (as a percent)	13.90%	18.40%
Common Equity Tier I Capital 1, Minimum Amount Required for Adequately Capitalized, Capital Amount	$ 6,365	$ 4,252
Common Equity Tier I Capital 1 (to risk weighted assets, Minimum Amount Required for Adequately Capitalized, Ratio (as a percent)	4.50%	4.50%
Common Equity Tier I Capital 1, Minimum Amount To Be Well Capitalized, Capital Amount	$ 9,194	$ 6,141
Common Equity Tier I Capital 1 (to risk weighted assets), Minimum Amount To Be Well Capitalized, Ratio (as a percent)	6.50%	6.50%
Tier 1 Capital (to average assets)
Tier 1 Capital, Actual, Capital Amount	$ 19,672	$ 17,404
Tier 1 Capital (to average assets), Actual, Ratio (as a percent)	11.50%	10.80%
Tier 1 Capital, Minimum Amount Required for Adequately Capitalized, Capital Amount	$ 6,845	$ 6,453
Tier 1 Capital (to average assets), Minimum Amount Required for Adequately Capitalized, Ratio (as a percent)	4.00%	4.00%
Tier 1 Capital, Minimum Amount To Be Well Capitalized, Capital Amount	$ 8,556	$ 8,066
Tier 1 Capital (to average assets), Minimum Amount To Be Well Capitalized, Ratio (as a percent)	5.00%	5.00%

Derivative Financial Instrume_3

Derivative Financial Instruments (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2019	Sep. 30, 2018	Sep. 30, 2019	Sep. 30, 2018	Dec. 31, 2018
The periodic changes in the fair value of the derivative financial instruments on the condensed consolidated statements of income
Net derivative gains (losses)	$ 119	$ (79)	$ 138	$ (8)
Derivative assets
Derivative Financial Instruments
Derivative assets, fair value	310		310		$ 70
Derivative liabilities
Derivative Financial Instruments
Derivative liabilities, fair value	24		24		9
Interest Rate Lock Commitments
Derivative Financial Instruments
Notional amount	46,846		46,846		8,812
The periodic changes in the fair value of the derivative financial instruments on the condensed consolidated statements of income
Net derivative gains (losses)	144	(95)	218	68
Interest Rate Lock Commitments | Derivative assets
Derivative Financial Instruments
Derivative assets, fair value	296		296		70
Interest Rate Lock Commitments | Derivative liabilities
Derivative Financial Instruments
Derivative liabilities, fair value	8		8
Forward Contracts
Derivative Financial Instruments
Notional amount	67,698		67,698		19,640
The periodic changes in the fair value of the derivative financial instruments on the condensed consolidated statements of income
Net derivative gains (losses)	(25)	$ 16	(80)	$ (76)
Forward Contracts | Derivative assets
Derivative Financial Instruments
Derivative assets, fair value	14		14
Forward Contracts | Derivative liabilities
Derivative Financial Instruments
Derivative liabilities, fair value	16		16		$ 9
Interest rate swaps
Derivative Financial Instruments
Notional amount	4,400		4,400
Interest rate swaps | Derivative assets
Derivative Financial Instruments
Derivative assets, fair value	48		48
Interest rate swaps | Derivative liabilities
Derivative Financial Instruments
Derivative liabilities, fair value	$ 48		$ 48

Disclosures about Fair Value _3

Disclosures about Fair Value of Assets and Liabilities - Assets and Liabilities Measured at Fair Value on Recurring Basis (Details) - USD ($) $ in Thousands	Sep. 30, 2019	Dec. 31, 2018
Disclosures about Fair Value of Assets and Liabilities
Trading securities	$ 227,914	$ 163,419
Available for sale securities	308,673	331,071
Loans held for sale	23,357	11,886
Mortgage servicing rights	71,989	77,844
Recurring
Disclosures about Fair Value of Assets and Liabilities
Trading securities	227,914	163,419
Loans held for sale	23,357	11,886
Mortgage servicing rights	71,989	77,844
Recurring | Interest Rate Lock Commitments
Disclosures about Fair Value of Assets and Liabilities
Derivative assets	296	70
Derivative liabilities	8
Recurring | Forward Contracts
Disclosures about Fair Value of Assets and Liabilities
Derivative assets	14
Derivative liabilities	16	9
Recurring | Interest rate swaps
Disclosures about Fair Value of Assets and Liabilities
Derivative assets	48
Derivative liabilities	48
Level 2 | Recurring
Disclosures about Fair Value of Assets and Liabilities
Trading securities	227,914	163,419
Loans held for sale	23,357	11,886
Level 2 | Recurring | Forward Contracts
Disclosures about Fair Value of Assets and Liabilities
Derivative assets	14
Derivative liabilities	16	9
Level 2 | Recurring | Interest rate swaps
Disclosures about Fair Value of Assets and Liabilities
Derivative assets	48
Derivative liabilities	48
Level 3 | Interest Rate Lock Commitments
Disclosures about Fair Value of Assets and Liabilities
Derivative assets	296	70
Derivative liabilities	8
Level 3 | Recurring
Disclosures about Fair Value of Assets and Liabilities
Mortgage servicing rights	71,989	77,844
Level 3 | Recurring | Interest Rate Lock Commitments
Disclosures about Fair Value of Assets and Liabilities
Derivative assets	296	70
Derivative liabilities	8
Treasury notes | Recurring
Disclosures about Fair Value of Assets and Liabilities
Available for sale securities	2,765	11,941
Treasury notes | Level 1 | Recurring
Disclosures about Fair Value of Assets and Liabilities
Available for sale securities	2,765	11,941
Federal agencies
Disclosures about Fair Value of Assets and Liabilities
Available for sale securities	257,388	236,930
Federal agencies | Recurring
Disclosures about Fair Value of Assets and Liabilities
Available for sale securities	257,388	236,930
Federal agencies | Level 2 | Recurring
Disclosures about Fair Value of Assets and Liabilities
Available for sale securities	257,388	236,930
Municipals | Recurring
Disclosures about Fair Value of Assets and Liabilities
Available for sale securities	12,760	21,332
Municipals | Level 2 | Recurring
Disclosures about Fair Value of Assets and Liabilities
Available for sale securities	12,760	21,332
Mortgage-backed - Government-sponsored entity (GSE) - residential
Disclosures about Fair Value of Assets and Liabilities
Available for sale securities	35,760	60,868
Mortgage-backed - Government-sponsored entity (GSE) - residential | Recurring
Disclosures about Fair Value of Assets and Liabilities
Available for sale securities	35,760	60,868
Mortgage-backed - Government-sponsored entity (GSE) - residential | Level 2 | Recurring
Disclosures about Fair Value of Assets and Liabilities
Available for sale securities	$ 35,760	$ 60,868

Disclosures about Fair Value _4

Disclosures about Fair Value of Assets and Liabilities - Reconciliation of Unobservable Inputs (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2019	Sep. 30, 2018	Sep. 30, 2019	Sep. 30, 2018
Derivative liabilities | Interest Rate Lock Commitments
Reconciliation of significant unobservable inputs, liabilities:
Balance, beginning of period	$ 3	$ 7
Changes in fair value	5	(7)	$ 8
Balance, end of period	8		8
Mortgage servicing rights
Reconciliation of significant unobservable inputs, assets:
Balance, beginning of period	74,550	70,085	77,844	$ 66,079
Additions
Originated and purchased servicing	1,356	1,563	4,637	7,265
Subtractions
Sales	(2,438)	(658)	(4,627)	(3,267)
Changes in fair value due to changes in valuation inputs or assumptions used in the valuation model	(1,479)	500	(5,865)	1,413
Balance, end of period	71,989	71,490	71,989	71,490
Available-for-sale Securities | Municipals
Reconciliation of significant unobservable inputs, assets:
Balance, beginning of period		6,431		6,688
Subtractions
Paydown				(257)
Sales		(6,431)		(6,431)
Derivative assets | Interest Rate Lock Commitments
Reconciliation of significant unobservable inputs, assets:
Balance, beginning of period	147	170	70
Subtractions
Changes in fair value	149	(102)	226	68
Balance, end of period	$ 296	$ 68	$ 296	$ 68

Disclosures about Fair Value _5

Disclosures about Fair Value of Assets and Liabilities - Assets and Liabilities Measured at Fair Value on Nonrecurring Basis (Details) - Nonrecurring - USD ($) $ in Thousands	Sep. 30, 2019	Dec. 31, 2018
Disclosures about Fair Value of Assets and Liabilities
Impaired loans (collateral dependent)	$ 1,600	$ 2,639
Level 3
Disclosures about Fair Value of Assets and Liabilities
Impaired loans (collateral dependent)	$ 1,600	$ 2,639

Disclosures about Fair Value _6

Disclosures about Fair Value of Assets and Liabilities - Quantitative Information about Unobservable Inputs (Details) $ in Thousands	Sep. 30, 2019USD ($)item	Dec. 31, 2018USD ($)item
Quantitative information about unobservable inputs
Mortgage servicing rights | $	$ 71,989	$ 77,844
Mortgage servicing rights | Level 3
Quantitative information about unobservable inputs
Mortgage servicing rights | $	71,989	77,844
Collateral-dependent impaired loans | Level 3
Quantitative information about unobservable inputs
Collateral-dependent impaired loans | $	$ 1,600	$ 2,639
Marketability discount (as a percent)	0.37
Collateral-dependent impaired loans | Level 3 | Minimum
Quantitative information about unobservable inputs
Marketability discount (as a percent)		0.17
Collateral-dependent impaired loans | Level 3 | Maximum
Quantitative information about unobservable inputs
Marketability discount (as a percent)		0.59
Discount Rate | Mortgage servicing rights | Level 3 | Minimum
Quantitative information about unobservable inputs
Servicing asset, measurement input	0.08	0.08
Discount Rate | Mortgage servicing rights | Level 3 | Maximum
Quantitative information about unobservable inputs
Servicing asset, measurement input	0.13	0.13
Constant Prepayment Rate | Mortgage servicing rights | Level 3 | Minimum
Quantitative information about unobservable inputs
Servicing asset, measurement input	0.01	0.01
Constant Prepayment Rate | Mortgage servicing rights | Level 3 | Maximum
Quantitative information about unobservable inputs
Servicing asset, measurement input	0.39	0.30
Interest Rate Lock Commitments | Level 3
Quantitative information about unobservable inputs
Derivative assets | $	$ 296	$ 70
Derivative liabilities | $	$ 8
Interest Rate Lock Commitments | Measurement Input, Maturity | Level 3 | Minimum
Quantitative information about unobservable inputs
Loan closing rates (as a percent)	0.73	0.95
Loan closing rates (as a percent)	0.73
Interest Rate Lock Commitments | Measurement Input, Maturity | Level 3 | Maximum
Quantitative information about unobservable inputs
Loan closing rates (as a percent)	0.99	1
Loan closing rates (as a percent)	0.99

Disclosures about Fair Value _7

Disclosures about Fair Value of Assets and Liabilities - Carrying Value and Estimated Fair Value (Details) - USD ($) $ in Thousands	Sep. 30, 2019	Dec. 31, 2018
Financial assets:
Loans held for sale	$ 23,357	$ 11,886
Carrying Value
Financial assets:
Cash and cash equivalents	364,976	336,524
Securities purchased under agreements to resell	6,760	6,875
FHLB stock	18,808	7,974
Loans held for sale	2,475,181	820,569
Loans, net	2,742,088	2,045,423
Interest receivable	18,780	13,827
Financial liabilities:
Deposits	5,499,649	3,231,086
Lines of credit		33,150
Short-term subordinated debt	12,000	10,582
FHLB advances	147,673	151,721
Interest payable	13,130	4,132
Fair Value
Financial assets:
Cash and cash equivalents	364,976	336,524
Securities purchased under agreements to resell	6,760	6,875
FHLB stock	18,808	7,974
Loans held for sale	2,475,181	820,569
Loans, net	2,728,683	2,041,772
Interest receivable	18,780	13,827
Financial liabilities:
Deposits	5,500,297	3,230,397
Lines of credit		33,150
Short-term subordinated debt	12,000	10,582
FHLB advances	147,772	151,723
Interest payable	13,130	4,132
Level 1 | Fair Value
Financial assets:
Cash and cash equivalents	364,976	336,524
Financial liabilities:
Deposits	3,248,689	2,550,632
Level 2 | Fair Value
Financial assets:
Securities purchased under agreements to resell	6,760	6,875
FHLB stock	18,808	7,974
Loans held for sale	2,475,181	820,569
Interest receivable	18,780	13,827
Financial liabilities:
Deposits	2,251,608	679,765
Lines of credit		33,150
Short-term subordinated debt	12,000	10,582
FHLB advances	147,772	151,723
Interest payable	13,130	4,132
Level 3 | Fair Value
Financial assets:
Loans, net	$ 2,728,683	$ 2,041,772

Earnings Per Share (Details)

Earnings Per Share (Details) - USD ($) $ / shares in Units, $ in Thousands	3 Months Ended						9 Months Ended
	Sep. 30, 2019	Jun. 30, 2019	Mar. 31, 2019	Sep. 30, 2018	Jun. 30, 2018	Mar. 31, 2018	Sep. 30, 2019	Sep. 30, 2018
Net Income
Net income	$ 20,259	$ 16,439	$ 10,570	$ 16,739	$ 15,652	$ 15,061	$ 47,268	$ 47,452
Dividends on preferred stock	(3,022)			(833)			(5,598)	(2,498)
Net Income Allocated to Common Shareholders	$ 17,237			$ 15,906			$ 41,670	$ 44,954
Weighted-Average Shares
Weighted average shares - Basic	28,706,438			28,694,036			28,704,682	28,692,591
Effect of dilutive securities-restricted stock awards	38,515			33,786			38,229	27,149
Weighted average shares - diluted	28,744,953			28,727,822			28,742,911	28,719,740
Per Share Amount
Basic earnings per share	$ 0.60			$ 0.55			$ 1.45	$ 1.57
Diluted earnings per share	$ 0.60			$ 0.55			$ 1.45	$ 1.57

Share-Based Payment Plans (Deta

Share-Based Payment Plans (Details) - USD ($)	3 Months Ended		9 Months Ended		12 Months Ended
	Sep. 30, 2019	Sep. 30, 2018	Sep. 30, 2019	Sep. 30, 2018	Dec. 31, 2018
Non executive directors
Plan disclosures
Shares issued	0	0	2,275	1,830
Value of shares available for issuance for compensation related to annual fees					$ 10,000
2016 Plan | Restricted stock
Plan disclosures
Shares issued	0	0	10,127	7,039
2017 Plan | Restricted stock
Plan disclosures
Shares issued			0

Segment Information (Details)

Segment Information (Details) - USD ($) $ in Thousands	3 Months Ended						9 Months Ended
	Sep. 30, 2019	Jun. 30, 2019	Mar. 31, 2019	Sep. 30, 2018	Jun. 30, 2018	Mar. 31, 2018	Sep. 30, 2019	Sep. 30, 2018	Dec. 31, 2018
Segment Information
Total interest income	$ 59,761			$ 37,577			$ 148,196	$ 100,738
Total interest expense	27,137			14,095			63,519	34,942
Net Interest Income	32,624			23,482			84,677	65,796
Provision for loan losses	1,193			617			1,947	3,021
Net Interest Income After Provision for Loan Losses	31,431			22,865			82,730	62,775
Total noninterest income	10,852			11,907			24,386	34,850
Total noninterest expense	15,522			12,449			44,477	34,719
Income Before Income Taxes	26,761			22,323			62,639	62,906
Income taxes	6,502			5,584			15,371	15,454
Net Income	20,259	$ 16,439	$ 10,570	16,739	$ 15,652	$ 15,061	47,268	47,452
Total assets	6,337,186			3,806,949			6,337,186	3,806,949	$ 3,884,163
Other
Segment Information
Total interest income	517			700			1,481	1,294
Total interest expense	(1,758)			(1,029)			(4,691)	(2,305)
Net Interest Income	2,275			1,729			6,172	3,599
Net Interest Income After Provision for Loan Losses	2,275			1,729			6,172	3,599
Total noninterest income	(739)			(564)			(2,090)	(1,432)
Total noninterest expense	2,897			2,365			8,440	6,481
Income Before Income Taxes	(1,361)			(1,200)			(4,358)	(4,314)
Income taxes	(306)			(321)			(1,178)	(1,030)
Net Income	(1,055)			(879)			(3,180)	(3,284)
Total assets	42,323			20,054			42,323	20,054
Multifamily | Operating Segments
Segment Information
Total interest income	335			201			1,000	472
Net Interest Income	335			201			1,000	472
Net Interest Income After Provision for Loan Losses	335			201			1,000	472
Total noninterest income	9,759			10,874			20,868	32,000
Total noninterest expense	6,088			4,346			15,392	11,946
Income Before Income Taxes	4,006			6,729			6,476	20,526
Income taxes	1,265			1,866			1,930	5,414
Net Income	2,741			4,863			4,546	15,112
Total assets	169,283			152,035			169,283	152,035
Mortgage Warehousing | Operating Segments
Segment Information
Total interest income	30,946			16,335			67,276	42,850
Total interest expense	16,157			7,289			35,281	16,499
Net Interest Income	14,789			9,046			31,995	26,351
Provision for loan losses	415			227			875	1,185
Net Interest Income After Provision for Loan Losses	14,374			8,819			31,120	25,166
Total noninterest income	2,699			779			4,593	1,949
Total noninterest expense	2,829			1,998			7,955	5,919
Income Before Income Taxes	14,244			7,600			27,758	21,196
Income taxes	3,320			1,946			6,682	5,138
Net Income	10,924			5,654			21,076	16,058
Total assets	3,529,267			1,624,375			3,529,267	1,624,375
Banking | Operating Segments
Segment Information
Total interest income	27,963			20,341			78,439	56,122
Total interest expense	12,738			7,835			32,929	20,748
Net Interest Income	15,225			12,506			45,510	35,374
Provision for loan losses	778			390			1,072	1,836
Net Interest Income After Provision for Loan Losses	14,447			12,116			44,438	33,538
Total noninterest income	(867)			818			1,015	2,333
Total noninterest expense	3,708			3,740			12,690	10,373
Income Before Income Taxes	9,872			9,194			32,763	25,498
Income taxes	2,223			2,093			7,937	5,932
Net Income	7,649			7,101			24,826	19,566
Total assets	$ 2,596,313			$ 2,010,485			$ 2,596,313	$ 2,010,485