Document and Entity Information
Document and Entity Information - shares | 9 Months Ended | |
Sep. 30, 2021 | Nov. 01, 2021 | |
Document Information | ||
Entity Registrant Name | MERCHANTS BANCORP | |
Document Type | 10-Q | |
Document Quarterly Report | true | |
Document Period End Date | Sep. 30, 2021 | |
Document Transition Report | false | |
Entity File Number | 001-38258 | |
Amendment Flag | false | |
Entity Incorporation, State or Country Code | IN | |
Entity Tax Identification Number | 20-5747400 | |
Entity Address, Address Line One | 410 Monon Blvd | |
Entity Address, City or Town | Carmel | |
Entity Address, State or Province | IN | |
Entity Address, Postal Zip Code | 46032 | |
City Area Code | 317 | |
Local Phone Number | 569-7420 | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Accelerated Filer | |
Entity Small Business | false | |
Entity Emerging Growth Company | true | |
Entity Ex Transition Period | false | |
Entity Shell Company | false | |
Entity Common Stock, Shares Outstanding | 28,785,374 | |
Entity Central Index Key | 0001629019 | |
Current Fiscal Year End Date | --12-31 | |
Document Fiscal Year Focus | 2021 | |
Document Fiscal Period Focus | Q3 | |
Common Stock | ||
Document Information | ||
Title of 12(b) Security | Common Stock, without par value | |
Trading Symbol | MBIN | |
Security Exchange Name | NASDAQ | |
Series A Preferred Stock | ||
Document Information | ||
Title of 12(b) Security | Series A Preferred Stock, without par value | |
Trading Symbol | MBINP | |
Security Exchange Name | NASDAQ | |
Series B Preferred Stock | ||
Document Information | ||
Title of 12(b) Security | Depositary Shares, each representing a 1/40th interest in a share of Series B Preferred Stock, without par value | |
Trading Symbol | MBINO | |
Security Exchange Name | NASDAQ | |
Series C Preferred Stock | ||
Document Information | ||
Title of 12(b) Security | Depositary Shares, each representing a 1/40th interest in a share of Series C Preferred Stock, without par value | |
Trading Symbol | MBINN | |
Security Exchange Name | NASDAQ |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets - USD ($) $ in Thousands | Sep. 30, 2021 | Dec. 31, 2020 |
Assets | ||
Cash and due from banks | $ 14,352 | $ 10,063 |
Interest-earning demand accounts | 788,224 | 169,665 |
Cash and cash equivalents | 802,576 | 179,728 |
Securities purchased under agreements to resell | 5,923 | 6,580 |
Mortgage loans in process of securitization | 634,027 | 338,733 |
Available for sale securities | 301,119 | 269,802 |
Federal Home Loan Bank (FHLB) stock | 70,767 | 70,656 |
Loans held for sale (includes $26,296 and $40,044, respectively at fair value) | 3,453,279 | 3,070,154 |
Loans receivable, net of allowance for loan losses of $29,134 and $27,500, respectively | 5,431,227 | 5,507,926 |
Premises and equipment, net | 31,423 | 29,761 |
Servicing rights | 105,473 | 82,604 |
Interest receivable | 21,894 | 21,770 |
Goodwill | 15,845 | 15,845 |
Intangible assets, net | 1,843 | 2,283 |
Other assets and receivables | 76,637 | 49,533 |
Total assets | 10,952,033 | 9,645,375 |
Deposits | ||
Noninterest-bearing | 824,118 | 853,648 |
Interest-bearing | 8,123,201 | 6,554,418 |
Total deposits | 8,947,319 | 7,408,066 |
Borrowings | 809,136 | 1,348,256 |
Deferred and current tax liabilities, net | 21,681 | 20,405 |
Other liabilities | 64,019 | 58,027 |
Total liabilities | 9,842,155 | 8,834,754 |
Commitments and Contingencies | ||
Shareholders' Equity | ||
Common stock, without par value Authorized - 50,000,000 shares Issued and outstanding - 28,785,374 shares at September 30, 2021 and 28,747,083 shares at December 31, 2020 | 137,200 | 135,857 |
Retained earnings | 610,267 | 461,744 |
Accumulated other comprehensive income | 262 | 374 |
Total shareholders' equity | 1,109,878 | 810,621 |
Total liabilities and shareholders' equity | 10,952,033 | 9,645,375 |
8% Preferred Stock | ||
Shareholders' Equity | ||
Preferred stock | 41,581 | |
7% Preferred Stock | ||
Shareholders' Equity | ||
Preferred stock | 50,221 | 50,221 |
6% Series B Preferred Stock | ||
Shareholders' Equity | ||
Preferred stock | 120,844 | $ 120,844 |
6% Series C Preferred Stock | ||
Shareholders' Equity | ||
Preferred stock | $ 191,084 |
Condensed Consolidated Balanc_2
Condensed Consolidated Balance Sheets (Parenthetical) - USD ($) $ in Thousands | 9 Months Ended | 12 Months Ended |
Sep. 30, 2021 | Dec. 31, 2020 | |
Loans held for sale at fair value | $ 26,296 | $ 40,044 |
Allowance for loans losses | $ 29,134 | $ 27,500 |
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 | 28,785,374 | 28,747,083 |
Common stock, shares outstanding | 28,785,374 | 28,747,083 |
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 | 0 | 41,625 |
Preferred stock, shares outstanding | 0 | 41,625 |
7% Preferred Stock | ||
Stockholders' Equity: | ||
Preferred stock, dividend rate (as a percent) | 7.00% | 7.00% |
Preferred stock liquidation preference (in dollars per share) | $ 25 | $ 25 |
Preferred stock, shares authorized | 3,500,000 | 3,500,000 |
Preferred stock, shares issued | 2,081,800 | 2,081,800 |
Preferred stock, shares outstanding | 2,081,800 | 2,081,800 |
6% Series B Preferred Stock | ||
Stockholders' Equity: | ||
Preferred stock, dividend rate (as a percent) | 6.00% | 6.00% |
Preferred stock liquidation preference (in dollars per share) | $ 1,000 | $ 1,000 |
Preferred stock, shares authorized | 125,000 | 125,000 |
Preferred stock, shares issued | 125,000 | 125,000 |
Preferred stock, shares outstanding | 125,000 | 125,000 |
Depositary shares | 5,000,000 | 5,000,000 |
6% Series C 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 | 250,000 | |
Preferred stock, shares issued | 196,181 | |
Preferred stock, shares outstanding | 196,181 | |
Depositary shares | 7,847,233 |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Income - USD ($) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2021 | Sep. 30, 2020 | Sep. 30, 2021 | Sep. 30, 2020 | |
Interest Income | ||||
Loans | $ 72,924,000 | $ 71,857,000 | $ 216,717,000 | $ 189,400,000 |
Mortgage loans in process of securitization | 2,868,000 | 3,250,000 | 8,728,000 | 8,580,000 |
Investment securities: | ||||
Available for sale - taxable | 1,115,000 | 431,000 | 2,302,000 | 2,725,000 |
Available for sale - tax exempt | 12,000 | 37,000 | 32,000 | 112,000 |
Federal Home Loan Bank stock | 190,000 | 531,000 | 966,000 | 1,217,000 |
Other | 205,000 | 152,000 | 556,000 | 2,845,000 |
Total interest income | 77,314,000 | 76,258,000 | 229,301,000 | 204,879,000 |
Interest Expense | ||||
Deposits | 6,981,000 | 9,104,000 | 19,764,000 | 45,132,000 |
Borrowed funds | 1,452,000 | 1,832,000 | 4,286,000 | 4,838,000 |
Total interest expense | 8,433,000 | 10,936,000 | 24,050,000 | 49,970,000 |
Net Interest Income | 68,881,000 | 65,322,000 | 205,251,000 | 154,909,000 |
Provision for loan losses | 1,079,000 | 2,981,000 | 2,427,000 | 7,724,000 |
Net Interest Income After Provision for Loan Losses | 67,802,000 | 62,341,000 | 202,824,000 | 147,185,000 |
Noninterest Income | ||||
Gain on sale of loans | 29,013,000 | 29,498,000 | 82,755,000 | 67,748,000 |
Loan servicing fees, net | 5,313,000 | (643,000) | 14,991,000 | (4,870,000) |
Mortgage warehouse fees | 2,732,000 | 6,833,000 | 9,927,000 | 15,054,000 |
Gains on sale of investments available for sale (includes $0, $441, $0 and $441, respectively, related to accumulated other comprehensive earnings reclassifications) | 441,000 | 441,000 | ||
Other income | 3,213,000 | 2,528,000 | 9,389,000 | 6,374,000 |
Total noninterest income | 40,271,000 | 38,657,000 | 117,062,000 | 84,747,000 |
Noninterest Expense | ||||
Salaries and employee benefits | 20,197,000 | 16,567,000 | 60,340,000 | 42,635,000 |
Loan expenses | 1,734,000 | 2,944,000 | 6,178,000 | 6,147,000 |
Occupancy and equipment | 1,861,000 | 1,420,000 | 5,296,000 | 4,295,000 |
Professional fees | 901,000 | 712,000 | 2,102,000 | 2,007,000 |
Deposit insurance expense | 664,000 | 1,404,000 | 1,986,000 | 5,041,000 |
Technology expense | 1,169,000 | 903,000 | 3,077,000 | 2,229,000 |
Other expense | 2,946,000 | 2,434,000 | 8,760,000 | 6,605,000 |
Total noninterest expense | 29,472,000 | 26,384,000 | 87,739,000 | 68,959,000 |
Income Before Income Taxes | 78,601,000 | 74,614,000 | 232,147,000 | 162,973,000 |
Provision for income taxes (includes $0, $(97), $0, and $(97), respectively, related to income tax (expense)/benefit for reclassification items) | 20,098,000 | 19,612,000 | 60,244,000 | 42,226,000 |
Net Income | 58,503,000 | 55,002,000 | 171,903,000 | 120,747,000 |
Dividends on preferred stock | (5,729,000) | (3,618,000) | (15,145,000) | (10,855,000) |
Net Income Allocated to Common Shareholders | $ 52,774,000 | $ 51,384,000 | $ 156,758,000 | $ 109,892,000 |
Basic Earnings Per Share | $ 1.83 | $ 1.79 | $ 5.45 | $ 3.82 |
Diluted Earnings Per Share | $ 1.83 | $ 1.79 | $ 5.43 | $ 3.82 |
Basic (in Shares) | 28,784,197 | 28,745,614 | 28,779,745 | 28,741,395 |
Diluted (in Shares) | 28,876,503 | 28,778,462 | 28,867,125 | 28,766,756 |
Consolidated Statements of Inco
Consolidated Statements of Income (Parenthetical) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2021 | Sep. 30, 2020 | Sep. 30, 2021 | Sep. 30, 2020 | |
Condensed Consolidated Statements of Income | ||||
Reclassifications included in gains/(losses) on sale of investment available for sale | $ 0 | $ 441 | $ 0 | $ 441 |
Provision for income taxes related to income tax (expense)/benefit for reclassification items | $ 0 | $ (97) | $ 0 | $ (97) |
Condensed Consolidated Statem_2
Condensed Consolidated Statements of Comprehensive Income - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2021 | Sep. 30, 2020 | Sep. 30, 2021 | Sep. 30, 2020 | |
Condensed Consolidated Statements of Comprehensive Income | ||||
Net Income | $ 58,503 | $ 55,002 | $ 171,903 | $ 120,747 |
Other Comprehensive Income (Loss): | ||||
Net change in unrealized gains/(losses) on investment securities available for sale, net of tax (expense)/benefits of $(96), $(22), $34 and $(91), respectively | 266 | 43 | (112) | 293 |
Less: Reclassification adjustment for gains included in net income, net of tax (expense)/benefits of $0, $(97), $0, and $(97), respectively | 344 | 344 | ||
Other comprehensive income (loss) for the period | 266 | (301) | (112) | (51) |
Comprehensive Income | $ 58,769 | $ 54,701 | $ 171,791 | $ 120,696 |
Condensed Consolidated Statem_3
Condensed Consolidated Statements of Comprehensive Income (Parenthetical) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2021 | Sep. 30, 2020 | Sep. 30, 2021 | Sep. 30, 2020 | |
Condensed Consolidated Statements of Comprehensive Income | ||||
Tax (expense)/benefits on net change in unrealized gains/(losses) on investment securities available for sale | $ (96) | $ (22) | $ 34 | $ (91) |
Less: Reclassification adjustment for gains included in net income, net of tax (expense)/benefits of $(97), $(117), and $0, respectively | $ 0 | $ (97) | $ 0 | $ (97) |
Condensed Consolidated Statem_4
Condensed Consolidated Statements of Shareholders' Equity - USD ($) $ in Thousands | Common Stock | Preferred Stock8% Preferred Stock | Preferred Stock7% Preferred Stock | Preferred Stock6% Series B Preferred Stock | Preferred Stock6% Series C Preferred StockPrivate Placement | Preferred Stock6% Series C Preferred Stock | Retained Earnings6% Series B Preferred Stock | Retained Earnings6% Series C Preferred Stock | Retained Earnings | Accumulated Other Comprehensive Income (Loss) | Total |
Condensed Consolidated Statements of Shareholders' Equity | |||||||||||
Balance beginning of period | $ 135,640 | $ 41,581 | $ 50,221 | $ 304,984 | $ 458 | ||||||
Balance beginning of period (in shares) | 28,706,438 | 41,625 | 2,081,800 | 125,000 | |||||||
Balance at end of the period | $ 135,640 | $ 41,581 | $ 50,221 | 304,984 | 458 | ||||||
Balance at end of the period (in shares) | 28,706,438 | 41,625 | 2,081,800 | 125,000 | |||||||
Net income | 120,747 | $ 120,747 | |||||||||
Shares issued for stock compensation plans, net of taxes | $ 463 | ||||||||||
Shares issued for stock compensation plans, net of taxes (in shares) | 39,176 | ||||||||||
Dividends on 8% preferred stock, annually | (2,498) | ||||||||||
Dividends on 7% preferred stock, annually | (2,732) | ||||||||||
Dividends on 6% preferred stock, annually | $ (5,625) | ||||||||||
Dividends on common stock, annually | (6,897) | ||||||||||
Other comprehensive income (loss) | (51) | (51) | |||||||||
Balance beginning of period | $ 135,949 | $ 41,581 | $ 50,221 | $ 120,844 | 358,895 | 708 | |||||
Balance beginning of period (in shares) | 28,745,614 | 41,625 | 2,081,800 | 125,000 | |||||||
Balance at end of the period | $ 135,949 | $ 41,581 | $ 50,221 | $ 120,844 | 358,895 | 708 | |||||
Balance at end of the period (in shares) | 28,745,614 | 41,625 | 2,081,800 | 125,000 | |||||||
Net income | 55,002 | 55,002 | |||||||||
Shares issued for stock compensation plans, net of taxes | $ 154 | ||||||||||
Dividends on 8% preferred stock, annually | (832) | ||||||||||
Dividends on 7% preferred stock, annually | (911) | ||||||||||
Dividends on 6% preferred stock, annually | (1,875) | ||||||||||
Dividends on common stock, annually | (2,300) | ||||||||||
Other comprehensive income (loss) | (301) | (301) | |||||||||
Balance beginning of period | $ 136,103 | $ 41,581 | $ 50,221 | $ 120,844 | 407,979 | 407 | 757,135 | ||||
Balance beginning of period (in shares) | 28,745,614 | 41,625 | 2,081,800 | 125,000 | |||||||
Balance at end of the period | $ 136,103 | $ 41,581 | $ 50,221 | $ 120,844 | 407,979 | 407 | 757,135 | ||||
Balance at end of the period (in shares) | 28,745,614 | 41,625 | 2,081,800 | 125,000 | |||||||
Balance beginning of period | $ 135,857 | $ 41,581 | $ 50,221 | $ 120,844 | 461,744 | 374 | 810,621 | ||||
Balance beginning of period (in shares) | 28,747,083 | 41,625 | 2,081,800 | 125,000 | |||||||
Balance at end of the period | $ 135,857 | $ 41,581 | $ 50,221 | $ 120,844 | 461,744 | 374 | 810,621 | ||||
Balance at end of the period (in shares) | 28,747,083 | 41,625 | 2,081,800 | 125,000 | |||||||
Net income | 171,903 | 171,903 | |||||||||
Distribution to employee stock ownership plan | $ 537 | ||||||||||
Distribution to employee stock ownership plan (in shares) | 19,433 | ||||||||||
Shares issued for stock compensation plans, net of taxes | $ 806 | ||||||||||
Shares issued for stock compensation plans, net of taxes (in shares) | 18,858 | ||||||||||
Redemption of 8% preferred stock | $ (41,581) | (45) | |||||||||
Redemption of 8% preferred stock (in shares) | (41,625) | ||||||||||
Issuance of shares, net of offering expenses | $ 46,158 | $ 144,926 | |||||||||
Issuance of shares, net of offering expenses (in shares) | 46,181 | 150,000 | |||||||||
Dividends on 8% preferred stock, annually | (833) | ||||||||||
Final dividend for redemption of 8% preferred stock | (139) | ||||||||||
Dividends on 7% preferred stock, annually | (2,732) | ||||||||||
Dividends on 6% preferred stock, annually | (5,625) | $ (5,816) | |||||||||
Dividends on common stock, annually | (7,771) | ||||||||||
Deconsolidation of entities | (419) | ||||||||||
Other comprehensive income (loss) | (112) | (112) | |||||||||
Balance beginning of period | $ 136,836 | $ 50,221 | $ 120,844 | $ 191,084 | 560,083 | (4) | |||||
Balance beginning of period (in shares) | 28,783,599 | 2,081,800 | 125,000 | 196,181 | |||||||
Balance at end of the period | $ 136,836 | $ 50,221 | $ 120,844 | $ 191,084 | 560,083 | (4) | |||||
Balance at end of the period (in shares) | 28,783,599 | 2,081,800 | 125,000 | 196,181 | |||||||
Net income | 58,503 | 58,503 | |||||||||
Shares issued for stock compensation plans, net of taxes | $ 364 | ||||||||||
Shares issued for stock compensation plans, net of taxes (in shares) | 1,775 | ||||||||||
Dividends on 7% preferred stock, annually | (911) | ||||||||||
Dividends on 6% preferred stock, annually | $ (1,875) | $ (2,943) | |||||||||
Dividends on common stock, annually | (2,590) | ||||||||||
Other comprehensive income (loss) | 266 | 266 | |||||||||
Balance beginning of period | $ 137,200 | $ 50,221 | $ 120,844 | $ 191,084 | 610,267 | 262 | 1,109,878 | ||||
Balance beginning of period (in shares) | 28,785,374 | 2,081,800 | 125,000 | 196,181 | |||||||
Balance at end of the period | $ 137,200 | $ 50,221 | $ 120,844 | $ 191,084 | $ 610,267 | $ 262 | $ 1,109,878 | ||||
Balance at end of the period (in shares) | 28,785,374 | 2,081,800 | 125,000 | 196,181 |
Condensed Consolidated Statem_5
Condensed Consolidated Statements of Shareholders' Equity (Parenthetical) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2021 | Sep. 30, 2020 | Sep. 30, 2021 | Sep. 30, 2020 | |
Dividends on common stock per share | $ 0.36 | $ 0.32 | $ 0.36 | $ 0.32 |
8% Preferred Stock | ||||
Preferred stock, dividend rate (as a percent) | 8.00% | |||
8% Preferred Stock | Preferred Stock | ||||
Preferred stock, dividend rate (as a percent) | 8.00% | 8.00% | 8.00% | 8.00% |
Dividends on preferred stock per share | $ 80 | $ 80 | $ 80 | $ 80 |
Final dividend for redemption of preferred stock per share | $ 3.33 | $ 3.33 | $ 3.33 | $ 3.33 |
7% Preferred Stock | ||||
Preferred stock, dividend rate (as a percent) | 7.00% | |||
7% Preferred Stock | Preferred Stock | ||||
Preferred stock, dividend rate (as a percent) | 7.00% | 7.00% | 7.00% | 7.00% |
Dividends on preferred stock per share | $ 1.75 | $ 1.75 | $ 1.75 | $ 1.75 |
6% Series B Preferred Stock | ||||
Preferred stock, dividend rate (as a percent) | 6.00% | |||
6% Series B Preferred Stock | Preferred Stock | ||||
Preferred stock, dividend rate (as a percent) | 6.00% | 6.00% | 6.00% | 6.00% |
Dividends on preferred stock per share | $ 60 | $ 60 | $ 60 | $ 60 |
6% Series C Preferred Stock | ||||
Preferred stock, dividend rate (as a percent) | 6.00% | |||
6% Series C Preferred Stock | Preferred Stock | ||||
Preferred stock, dividend rate (as a percent) | 6.00% | 6.00% | 6.00% | 6.00% |
Dividends on preferred stock per share | $ 60 | $ 60 | $ 60 | $ 60 |
Offering expenses on issuance of stock | $ 5,100,000 | $ 5,100,000 | $ 5,100,000 | $ 5,100,000 |
Condensed Consolidated Statem_6
Condensed Consolidated Statements of Cash Flows - USD ($) $ in Thousands | 9 Months Ended | |
Sep. 30, 2021 | Sep. 30, 2020 | |
Operating activities: | ||
Net income | $ 171,903 | $ 120,747 |
Adjustments to reconcile net income to net cash provided by operating activities: | ||
Depreciation | 1,616 | 1,409 |
Provision for loan losses | 2,427 | 7,724 |
Gain on sale of securities | (441) | |
Gain on sale of loans | (82,755) | (67,748) |
Proceeds from sales of loans | 44,276,199 | 63,058,544 |
Loans and participations originated and purchased for sale | (44,463,275) | (64,230,337) |
Change in servicing rights for paydowns and fair value adjustments | 526 | 13,021 |
Net change in: | ||
Mortgage loans in process of securitization | (295,294) | (104,830) |
Other assets and receivables | (1,209) | (20,576) |
Other liabilities | 3,007 | 12,314 |
Other | (980) | 1,947 |
Net cash (used in) operating activities | (387,835) | (1,208,226) |
Investing activities: | ||
Net change in securities purchased under agreements to resell | 657 | 107 |
Purchases of available for sale securities | (195,206) | (434,331) |
Proceeds from the sale of available for sale securities | 34,469 | 4,347 |
Proceeds from calls, maturities and paydowns of available for sale securities | 128,502 | 441,181 |
Purchases of loans | (312,992) | (236,358) |
Net change in loans receivable | (16,240) | (1,614,787) |
Proceeds from sale of loans receivable | 262,086 | |
Purchase of FHLB stock | (111) | (50,854) |
Proceeds from sale of FHLB stock | 567 | |
Proceeds from sale of mortgage servicing rights | 438 | |
Purchases of premises and equipment | (3,281) | (1,430) |
Cash (paid) received in deconsolidation of subsidiary | (464) | |
Purchase of limited partnership interests and other tax credits | (12,149) | (2,074) |
Other investing activities | 404 | (730) |
Net cash (used in) investing activities | (113,887) | (1,894,362) |
Financing activities: | ||
Net change in deposits | 1,537,148 | 1,606,572 |
Proceeds from borrowings | 28,803,270 | 31,577,468 |
Repayment of borrowings | (29,342,391) | (30,143,465) |
Proceeds from notes payable | 2,759 | |
Proceeds from issuance of preferred stock | 191,084 | |
Redemption of preferred stock | (41,625) | |
Payments of contingent consideration | (501) | |
Dividends | (22,916) | (17,752) |
Net cash provided by financing activities | 1,124,570 | 3,025,081 |
Net Change in Cash and Cash Equivalents | 622,848 | (77,507) |
Cash and Cash Equivalents, Beginning of Period | 179,728 | 506,709 |
Cash and Cash Equivalents, End of Period | 802,576 | 429,202 |
Additional Cash Flows Information: | ||
Interest paid | 23,049 | 57,940 |
Income taxes paid | 57,692 | $ 35,522 |
Transfer of loans from loans receivable to loans held for sale | $ 131,563 |
Basis of Presentation
Basis of Presentation | 9 Months Ended |
Sep. 30, 2021 | |
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”), Farmers-Merchants Bank of Illinois (“FMBI”) and Merchants Asset Management, LLC (“MAM”). Merchants Bank’s primary operating subsidiaries include Merchants Capital Corp. (‘MCC”), Merchants Capital Servicing, LLC (“MCS”), and Merchants Capital Investments, LLC (“MCI”). All direct and indirectly owned subsidiaries owned by Merchants Bancorp are collectively referred to as the “Company”. The accompanying unaudited condensed consolidated balance sheet of the Company as of December 31, 2020, which has been derived from audited financial statements, and unaudited condensed consolidated financial statements of the Company as of September 30, 2021 and for the three and nine months ended September 30, 2021 and 2020, 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, 2020 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, 2021 Principles of Consolidation The unaudited condensed consolidated financial statements as of and for the period ended September 30, 2021 and 2020 include results from the Company, and its wholly owned subsidiaries, Merchants Bank, FMBI and MAM. Also included are Merchants Bank’s primary operating subsidiaries, MCC, MCS and MCI, as well as all 100% directly and indirectly owned subsidiaries owned by Merchants Bancorp. In addition, when the Company makes an equity investment in an entity for which it holds a variable interest, it is evaluated for consolidation requirements under Accounting Standards Update of Topic 810. Accordingly, the entity is assessed for potential consolidation under the variable interest entity (“VIE”) model and would only consolidate those entities for which it is a primary beneficiary. A primary beneficiary is defined as the party that has both the power to direct the activities that most significantly impact the entity, and an interest that could be significant to the entity. To determine if an interest could be significant to the entity, both qualitative and quantitative factors regarding the nature, size and form of our involvement with the entity are evaluated. Alternatively, under the voting interest model, it would only consolidate those entities for which it has a controlling interest. Because the variable interest investments held by the Company as of September 30, 2021 are not deemed to be primary beneficiaries or controlling interests, the entities are not consolidated and the equity method or proportional method of accounting has been applied. The Company will analyze whether its entities are the primary beneficiary on an ongoing basis. Changes in facts and circumstances occurring since the previous primary beneficiary determination will be considered as part of this ongoing assessment. See Note 5: Variable Interest Entities (VIEs) for additional information about VIEs. All significant intercompany accounts and transactions have been eliminated in consolidation. Deconsolidation The unaudited condensed consolidated financial statements included consolidated results from certain entities primarily involved in single-family debt financing until January 30, 2021, while the Company was deemed to be a primary beneficiary. On February 1, 2021, the Company’s debt fund entities were restructured in such a way that its ownership and participation was significantly reduced with the inclusion of additional, unrelated investors and the Company was no longer classified as a primary beneficiary. Accordingly, results from these entities were no longer consolidated after this date, in accordance with the consolidation guidelines of the Accounting Standards Update of Topic 810. Following the deconsolidation, the carrying value of assets and liabilities of these entities were removed from the consolidated balance sheet, and the continuing investments were recorded at fair value at the date of deconsolidation. The total amount deconsolidated from the balance sheet included net assets of approximately $10 million, consisting primarily of $66.6 million in loans receivable, and $52.7 million in borrowings with Merchants Bank that was previously eliminated in consolidation. The fair value of its continuing investments was approximately $10 million on the deconsolidation date and has been reported in Other Assets after deconsolidation. The estimated fair value was determined based on third-party evaluations of similar assets in the underlying business. The difference between the fair value of these deconsolidated entities and their carrying value was deemed to be immaterial, resulting in no gain or loss on deconsolidation. These continuing investments after deconsolidation are classified as variable interest entities, have not been consolidated, and are accounted for under the equity method of accounting. See Note 5: Variable Interest Entities (VIEs) 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, servicing rights and fair values of financial instruments. The uncertainties related to the COVID-19 pandemic could cause significant changes to these estimates compared to what was known at the time these financial statements were prepared. Reclassifications Certain reclassifications may have been made to the 2020 financial statements to conform to the financial statement presentation as of and for the three and nine months ended September 30, 2021. These reclassifications had no effect on net income. |
Securities Available For Sale
Securities Available For Sale | 9 Months Ended |
Sep. 30, 2021 | |
Securities Available For Sale | |
Securities Available For Sale | Note 2: 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, 2021 Gross Gross Amortized Unrealized Unrealized Fair Cost Gains Losses Value (In thousands) Available for sale securities: Treasury notes $ 5,002 $ 7 $ 3 $ 5,006 Federal agencies 244,966 1 196 244,771 Municipals 5,929 92 — 6,021 Mortgage-backed - Government-sponsored entity (GSE) 44,889 432 — 45,321 Total available for sale securities $ 300,786 $ 532 $ 199 $ 301,119 December 31, 2020 Gross Gross Amortized Unrealized Unrealized Fair Cost Gains Losses Value (In thousands) Available for sale securities: Treasury notes $ 6,535 $ 24 $ — $ 6,559 Federal agencies 234,954 103 17 235,040 Municipals 5,935 90 — 6,025 Mortgage-backed - Government-sponsored entity (GSE) 21,899 279 — 22,178 Total available for sale securities $ 269,323 $ 496 $ 17 $ 269,802 Mortgage-backed securities in the table above for September 30, 2021 include securities purchased from Freddie Mac following the loan sale and securitization arrangement with Freddie Mac described in Note 4: Loans and Allowance for Loan Losses. The amortized cost and fair value of available for sale securities at September 30, 2021 and December 31, 2020, 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, 2021 December 31, 2020 Amortized Fair Amortized Fair Cost Value Cost Value Contractual Maturity (In thousands) Within one year $ 7,054 $ 7,054 $ 6,288 $ 6,302 After one through five years 247,987 247,822 239,770 239,877 After five through ten years 512 547 515 549 After ten years 344 375 851 896 255,897 255,798 247,424 247,624 Mortgage-backed - Government-sponsored entity (GSE) 44,889 45,321 21,899 22,178 $ 300,786 $ 301,119 $ 269,323 $ 269,802 During the three and nine months ended September 30, 2021 proceeds from sales of $34.5 million securities available for sale were sold, and no gain or loss was recognized. During the three and nine months ended September 30 2020, proceeds from sales of securities available for sale were $4.3 million, and a net gain of $441,000 was recognized, consisting of $441,000 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, 2021 and December 31, 2020: September 30, 2021 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 $ 1,997 $ 3 $ — $ — $ 1,997 $ 3 Federal agencies 219,772 196 — — 219,772 196 $ 221,769 $ 199 $ — $ — $ 221,769 $ 199 December 31, 2020 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: Federal agencies $ 69,939 $ 17 $ — $ — $ 69,939 $ 17 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. |
Mortgage Loans in Process of Se
Mortgage Loans in Process of Securitization | 9 Months Ended |
Sep. 30, 2021 | |
Mortgage Loans in Process of Securitization. | |
Mortgage Loans in Process of Securitization | Note 3: Mortgage Loans in Process of Securitization Mortgage loans in process of securitization are recorded at fair value with changes in fair value recorded in earnings. These include multi-family rental real estate loan originations to be sold as Government National Mortgage Association (“Ginnie Mae”) mortgage-backed securities and Federal National Mortgage Association (“Fannie Mae”) and Federal Home Loan Mortgage Corporation (“Freddie Mac”) participation certificates, all of which are pending settlement with firm investor commitments to purchase the securities, typically occurring within 30 days. The fair value increases recorded in earnings for mortgage loans in process of securitization totaled $4.9 million and $3.2 million at September 30, 2021 and 2020, respectively. |
Loans and Allowance for Loan Lo
Loans and Allowance for Loan Losses | 9 Months Ended |
Sep. 30, 2021 | |
Loans and Allowance for Loan Losses | |
Loans and Allowance for Loan Losses | Note 4: 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 at amortized 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 collected 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 for accrued interest 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. The Company offers warehouse loans or credit to fund mortgage loans held for sale from closing until sale to an investor. Under a warehousing arrangement the Company funds a mortgage loan as secured financing. The warehousing arrangement is secured by the underlying mortgages and a combination of deposits, personal guarantees and advance rates. The Company typically holds the collateral until it is sent under a bailee arrangement instructing the investor to send proceeds to the Company. Typical investors are large financial institutions or government agencies. Interest earned from the time of funding to the time of sale is recognized as interest income as accrued. Fees earned agreements are recognized when collected as noninterest income. Loan Sale and Freddie Mac Q Series Securitization On May 7, 2021, the Company entered into an arrangement through a third-party trust and Freddie Mac, by which a $262.0 million portfolio of multi-family loans were sold to the trust and ultimately securitized through Freddie Mac and sold to investors. The Company purchased two of the securities for a total of $28.7 million. The transfer of these loans was accounted for as a sale for financial reporting purposes, in accordance with ASC 860, and a $676,000 net loss on sale was recognized, which included the impact of establishing a risk share allowance and servicing rights associated with this transaction. Beyond holding the two securities, the Company’s ongoing involvement in this transaction is limited to customary obligations of loan sales, including any material breach in representation. In connection with the securitization and purchase of one of the securities, Merchants maintains a first loss position in the underlying loan portfolio not to exceed 10% of the unpaid principal amount of the loans comprising the securitization pool at settlement, or approximately $26.2 million. Therefore, a reserve of $1.4 million for estimated losses was established with respect to the first loss obligation at May 7, 2021, which was included in other liabilities on the consolidated balance sheets. These estimated losses were consistent with the amount in allowance for loan losses that was released when the loans were sold. If the Company sells one of the securities, this first loss obligation would be eliminated. As part of the securitization transaction, Merchants released all mortgage servicing obligations and rights to Freddie Mac who was designated as the Master Servicer. As Master Servicer, Freddie Mac appointed the Company with sub-servicing obligations, which include obligations to collect and remit payments of principal and interest, manage payments of taxes and insurance, and otherwise administer the underlying loans. Accordingly, the company recognized a Loan Portfolio Summary Loans receivable at September 30, 2021 and December 31, 2020 include: September 30, December 31, 2021 2020 (In thousands) Mortgage warehouse lines of credit $ 891,605 $ 1,605,745 Residential real estate 828,950 678,848 Multi-family and healthcare financing 3,244,442 2,749,020 Commercial and commercial real estate 391,562 387,294 Agricultural production and real estate 92,113 101,268 Consumer and margin loans 11,689 13,251 5,460,361 5,535,426 Less: Allowance for loan losses 29,134 27,500 Loans Receivable $ 5,431,227 $ 5,507,926 In response to the COVID-19 global pandemic, the Coronavirus Aid, Relief and Economic Security Act (“CARES Act”) established the Paycheck Protection Program (“PPP”) to provide loans for eligible business/not-for-profits. These loans qualify for forgiveness when used for qualifying expenses during the appropriate period. Loans funded through the PPP are fully guaranteed by the U.S. government. Commercial and commercial real estate loans at September 30, 2021 and December 31, 2020 include PPP loans with principal balances of $13.0 million and $60.2 million, respectively, that had not yet been forgiven. As of September 30, 2021, only 12% of the $104.7 million total PPP loans granted were yet to be forgiven. 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 repurchase agreement, 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, or mortgage note rate plus or minus 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. First-lien HELOC mortgages included in this segment typically carry a base rate of 30-day LIBOR, plus a margin. Multi-Family and Healthcare Financing (MF RE): obtained. These loans are considered to be higher risk than single-family 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 servicing rights and loan sale proceeds 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. PPP loans and Small Business Association (“SBA”) loans are included in this category. 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 from 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 the 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 a provision for loan loss. 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, 2021 and 2020 and the recorded investment in loans and impairment method as of September 30, 2021: At or For the Three Months Ended September 30, 2021 MTG WHLOC RES RE MF RE CML & CRE AG & AGRE CON & MAR TOTAL (In thousands) Allowance for loan losses Balance, beginning of period $ 2,935 $ 3,969 $ 15,782 $ 5,239 $ 611 $ 160 $ 28,696 Provision (credit) for loan losses (705) 105 1,429 296 (2) (44) 1,079 Loans charged to the allowance — — — (650) — — (650) Recoveries of loans previously charged off — — — — — 9 9 Balance, end of period $ 2,230 $ 4,074 $ 17,211 $ 4,885 $ 609 $ 125 $ 29,134 Ending balance: individually evaluated for impairment $ — $ — $ — $ 1,175 $ — $ — $ 1,175 Ending balance: collectively evaluated for impairment $ 2,230 $ 4,074 $ 17,211 $ 3,710 $ 609 $ 125 $ 27,959 Loans Ending balance $ 891,605 $ 828,950 $ 3,244,442 $ 391,562 $ 92,113 $ 11,689 $ 5,460,361 Ending balance individually evaluated for impairment $ — $ 780 $ 36,760 $ 6,416 $ 158 $ 6 $ 44,120 Ending balance collectively evaluated for impairment $ 891,605 $ 828,170 $ 3,207,682 $ 385,146 $ 91,955 $ 11,683 $ 5,416,241 For the Three Months Ended September 30, 2020 MTG WHLOC RES RE MF RE CML & CRE AG & AGRE CON & MAR TOTAL (In thousands) Allowance for loan losses Balance, beginning of period $ 3,203 $ 2,310 $ 9,878 $ 4,343 $ 610 $ 153 $ 20,497 Provision (credit) for loan losses 874 504 1,566 13 21 3 2,981 Loans charged to the allowance — — — (94) — (10) (104) Recoveries of loans previously charged off — — — 62 — — 62 Balance, end of period $ 4,077 $ 2,814 $ 11,444 $ 4,324 $ 631 $ 146 $ 23,436 For the Nine Months Ended September 30, 2021 MTG WHLOC RES RE MF RE CML & CRE AG & AGRE CON & MAR TOTAL (In thousands) Allowance for loan losses Balance, beginning of period $ 4,018 $ 3,334 $ 14,731 $ 4,641 $ 636 $ 140 $ 27,500 Provision for loan losses (1,788) 742 2,480 1,046 (27) (26) 2,427 Loans charged to the allowance — (2) — (802) — (6) (810) Recoveries of loans previously charged off — — — — — 17 17 Balance, end of period $ 2,230 $ 4,074 $ 17,211 $ 4,885 $ 609 $ 125 $ 29,134 For the Nine Months Ended September 30, 2020 MTG WHLOC RES RE MF RE CML & CRE AG & AGRE CON & MAR TOTAL (In thousands) Allowance for loan losses Balance, beginning of period $ 1,913 $ 2,042 $ 7,018 $ 4,173 $ 523 $ 173 $ 15,842 Provision (credit) for loan losses 2,164 772 4,426 270 108 (16) 7,724 Loans charged to the allowance — — — (225) — (11) (236) Recoveries of loans previously charged off — — — 106 — — 106 Balance, end of period $ 4,077 $ 2,814 $ 11,444 $ 4,324 $ 631 $ 146 $ 23,436 The following table presents the allowance for loan losses and the recorded investment in loans and impairment method as of December 31, 2020: December 31, 2020 MTG WHLOC RES RE MF RE CML & CRE AG & AGRE CON & MAR TOTAL (In thousands) Allowance for loan losses Balance, December 31, 2020 $ 4,018 $ 3,334 $ 14,731 $ 4,641 $ 636 $ 140 $ 27,500 Ending balance: individually evaluated for impairment $ — $ 7 $ — $ 1,606 $ — $ — $ 1,613 Ending balance: collectively evaluated for impairment $ 4,018 $ 3,327 $ 14,731 $ 3,035 $ 636 $ 140 $ 25,887 Loans Balance, December 31, 2020 $ 1,605,745 $ 678,848 $ 2,749,020 $ 387,294 $ 101,268 $ 13,251 $ 5,535,426 Ending balance individually evaluated for impairment $ — $ 2,761 $ — $ 9,591 $ 2,100 $ 12 $ 14,464 Ending balance collectively evaluated for impairment $ 1,605,745 $ 676,087 $ 2,749,020 $ 377,703 $ 99,168 $ 13,239 $ 5,520,962 Internal Risk Categories In adherence with policy, the Company uses the following internal risk grading categories and definitions for loans: Average or above Acceptable – Special Mention (Watch) – This is a loan that is sound and collectable but contains potential 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. Special Mention (Watch) – COVID-19 Deferrals – This is a loan that is sound and collectable but contains potential risk because the borrower has requested to defer payments, typically for 90 days, in response to COVID-related hardships. Interest is still accruing on these loans and they were not more than 30 days late at the time the deferral was granted. 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. This category includes only those loans that were not already in the Traditional Special Mention (Watch) or Substandard categories. Substandard Doubtful 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, 2021 and December 31, 2020: September 30, 2021 MTG WHLOC RES RE MF RE CML & CRE AG & AGRE CON & MAR TOTAL (In thousands) Special Mention (Watch) $ — $ 823 $ 78,979 $ 3,652 $ 3,942 $ 4 $ 87,400 Special Mention (Watch) - COVID-19 Deferrals — 77 185 — — — 262 Substandard — 780 36,760 6,416 158 6 44,120 Acceptable and Above 891,605 827,270 3,128,518 381,494 88,013 11,679 5,328,579 Total $ 891,605 $ 828,950 $ 3,244,442 $ 391,562 $ 92,113 $ 11,689 $ 5,460,361 December 31, 2020 MTG WHLOC RES RE MF RE CML & CRE AG & AGRE CON & MAR TOTAL (In thousands) Special Mention (Watch) $ 222 $ 853 $ 145,050 $ 2,620 $ 4,160 $ 34 $ 152,939 Special Mention (Watch) - COVID-19 Deferrals — 383 185 110 — — 678 Substandard — 2,761 — 9,591 2,100 12 14,464 Acceptable and Above 1,605,523 674,851 2,603,785 374,973 95,008 13,205 5,367,345 Total $ 1,605,745 $ 678,848 $ 2,749,020 $ 387,294 $ 101,268 $ 13,251 $ 5,535,426 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. Delinquent Loans The following tables present the Company’s loan portfolio aging analysis of the recorded investment in loans as of September 30, 2021 and December 31, 2020. There were 3 loans totaling $37.0 million at September 30, 2021 that have been modified in accordance with the CARES Act and therefore not classified as delinquent. These loans have been granted extended dates to make payments and no payments were due as of September 30, 2021. September 30, 2021 30-59 Days 60-89 Days Greater Than Total Total Past Due Past Due 90 Days Past Due Current Loans (In thousands) MTG WHLOC $ — $ — $ — $ — $ 891,605 $ 891,605 RES RE 377 196 141 714 828,236 828,950 MF RE — — — — 3,244,442 3,244,442 CML & CRE 361 46 2,224 2,631 388,931 391,562 AG & AGRE 103 — — 103 92,010 92,113 CON & MAR 1 34 20 55 11,634 11,689 $ 842 $ 276 $ 2,385 $ 3,503 $ 5,456,858 $ 5,460,361 December 31, 2020 30-59 Days 60-89 Days Greater Than Total Total Past Due Past Due 90 Days Past Due Current Loans (In thousands) MTG WHLOC $ — $ — $ — $ — $ 1,605,745 $ 1,605,745 RES RE 364 80 630 1,074 677,774 678,848 MF RE — 36,760 — 36,760 2,712,260 2,749,020 CML & CRE 608 76 3,582 4,266 383,028 387,294 AG & AGRE 3,769 — 1,934 5,703 95,565 101,268 CON & MAR 7 — 19 26 13,225 13,251 $ 4,748 $ 36,916 $ 6,165 $ 47,829 $ 5,487,597 $ 5,535,426 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 TDRs. Impaired Loans The following tables present impaired loans and specific valuation allowance information based on class level as of September 30, 2021 and December 31, 2020: September 30, 2021 MTG WHLOC RES RE MF RE CML & CRE AG & AGRE CON & MAR TOTAL (In thousands) Impaired loans without a specific allowance: Recorded investment $ — $ 780 $ 36,760 $ 4,455 $ 158 $ 6 $ 42,159 Unpaid principal balance — 780 36,760 4,455 158 6 42,159 Impaired loans with a specific allowance: Recorded investment — — — 1,961 — — 1,961 Unpaid principal balance — — — 1,961 — — 1,961 Specific allowance — — — 1,175 — — 1,175 Total impaired loans: Recorded investment — 780 36,760 6,416 158 6 44,120 Unpaid principal balance — 780 36,760 6,416 158 6 44,120 Specific allowance — — — 1,175 — — 1,175 December 31, 2020 MTG WHLOC RES RE MF RE CML & CRE AG & AGRE CON & MAR TOTAL (In thousands) Impaired loans without a specific allowance: Recorded investment $ — $ 2,704 $ — $ 3,319 $ 2,100 $ 7 $ 8,130 Unpaid principal balance — 2,704 — 3,319 2,100 7 8,130 Impaired loans with a specific allowance: — Recorded investment — 57 — 6,272 — 5 6,334 Unpaid principal balance — 57 — 6,272 — 5 6,334 Specific allowance — 7 — 1,606 — — 1,613 Total impaired loans: Recorded investment — 2,761 — 9,591 2,100 12 14,464 Unpaid principal balance — 2,761 — 9,591 2,100 12 14,464 Specific allowance — 7 — 1,606 — — 1,613 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, 2021 and 2020: MTG WHLOC RES RE MF RE CML & CRE AG & AGRE CON & MAR TOTAL (In thousands) Three Months Ended September 30, 2021 Average recorded investment in impaired loans $ — $ 595 $ 9,190 $ 6,731 $ 158 $ 6 $ 16,680 Interest income recognized — 30 — 82 — — 112 Three Months Ended September 30, 2020 Average recorded investment in impaired loans $ — $ 2,892 $ — $ 10,061 $ 2,231 $ 14 $ 15,198 Interest income recognized — 7 — 90 — — 97 MTG WHLOC RES RE MF RE CML & CRE AG & AGRE CON & MAR TOTAL (In thousands) Nine Months Ended September 30, 2021 Average recorded investment in impaired loans $ — $ 1,885 $ 7,352 $ 7,307 $ 747 $ 7 $ 17,298 Interest income recognized — 57 — 341 — — 398 Nine Months Ended September 30, 2020 Average recorded investment in impaired loans $ 138 $ 2,892 $ — $ 9,747 $ 1,506 $ 17 $ 14,300 Interest income recognized — 42 — 305 — 1 348 Nonperforming Loans The following table presents the Company’s nonaccrual loans and loans past due 90 days or more and still accruing at September 30, 2021 and December 31, 2020. September 30, December 31, 2021 2020 Total Loans > Total Loans > 90 Days & 90 Days & Nonaccrual Accruing Nonaccrual Accruing (In thousands) RES RE $ 472 $ 16 $ 578 $ 69 CML & CRE 2,174 50 2,052 1,240 AG & AGRE 158 — 181 2,181 CON & MAR 6 14 12 8 $ 2,810 $ 80 $ 2,823 $ 3,498 No troubled loans were restructured during the three or nine months ended September 30, 2021 or 2020. No restructured loans defaulted during the three or nine months ended September 30, 2021 or 2020. Loan modifications or forbearances related to the COVID-19 pandemic will generally not be considered TDRs. The CARES Act included several provisions designed to help financial institutions like the Company in working with their customers. Section 4013 of the CARES Act, as extended, allows a financial institution to elect to suspend generally accepted accounting principles and regulatory determinations with respect to qualifying loan modifications related to COVID-19 that would otherwise be categorized as a TDR until January 1, 2022. The Company has taken advantage of this provision to extend certain payment modifications to loan customers in need. As of September 30, 2021, the Company has There were no residential loans in process of foreclosure as of September 30, 2021 and 2020. |
Variable Interest Entities (VIE
Variable Interest Entities (VIEs) | 9 Months Ended |
Sep. 30, 2021 | |
Variable Interest Entities (VIEs). | |
Variable Interest Entities (VIEs) | Note 5: Variable Interest Entities (VIEs) A VIE is a corporation, partnership, limited liability company, or any other legal structure used to conduct activities or hold assets generally that either: ● Does not have equity investors with voting rights that can directly or indirectly make decisions about the entity’s activities through those voting rights or similar rights; or ● Has equity investors that do not provide sufficient equity for the entity to finance its activities without additional subordinated financial support. The Company has invested in single-family and multi-family debt financing entities that are deemed to be VIEs. Accordingly, the entities were assessed for potential consolidation under the VIE model that requires primary beneficiaries to consolidate the entity’s results. A primary beneficiary is defined as the party that has both the power to direct the activities that most significantly impact the entity, and an interest that could be significant to the entity. To determine if an interest could be significant to the entity, both qualitative and quantitative factors regarding the nature, size and form of our involvement with the entity are evaluated. At September 30, 2021 the Company determined it was not the primary beneficiary of its VIEs primarily because the Company did not have the obligation to absorb losses or the rights to receive benefits from the VIE that could potentially be significant to the VIE. Evaluation and assessment of VIEs for consolidation is performed on an ongoing basis by management. Any changes in facts and circumstances occurring since the previous primary beneficiary determination will be considered as part of this ongoing assessment. The Company’s maximum exposure to loss associated with its VIEs consists of the capital invested plus any unfunded equity commitments. These investments are recorded in “other assets” and “other liabilities” on our balance sheet. The table below reflects the size of the VIEs as well as our maximum exposure to loss in connection with these investments at September 30, 2021, and December 31, 2020. Unconsolidated VIEs Total Total Maximum Assets ($ in thousands) Assets Liabilities Exposure to Loss (In thousands) September 30, 2021 Single-family and multi-family debt financing investments $ 25,338 $ 12,334 $ 25,163 December 31, 2020 Single-family and multi-family debt financing investments $ — $ — $ — |
Borrowings
Borrowings | 9 Months Ended |
Sep. 30, 2021 | |
Borrowings | |
Borrowings | Note 6: Borrowings The Company joined the American Financial Exchange (“AFX”) in January of 2021. During the nine months ended September 30, 2021, the Company utilized unsecured overnight lending arrangements to borrow from other AFX members through extensions of credit. At September 30, 2021, members of the AFX offered a combined borrowing limit of $325.0 million, but availability fluctuates daily. As of September 30, 2021, the outstanding balance was $225.0 million with a rate of 0.07% to 0.08%. Rates are set daily by participating members and may vary by lending member. |
Regulatory Matters
Regulatory Matters | 9 Months Ended |
Sep. 30, 2021 | |
Regulatory Matters | |
Regulatory Matters | Note 7: 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’s, 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, 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. On November 13, 2019, the federal regulators finalized and adopted a regulatory capital rule establishing a new community bank leverage ratio (“CBLR”), which became effective on January 1, 2020. The intent of CBLR is to provide a simple alternative measure of capital adequacy for electing qualifying depository institutions and depository institution holding companies, as directed under the Economic Growth, Regulatory Relief, and Consumer Protection Act. Under CBLR, if a qualifying depository institution or depository institution holding company elects to use such measure, such institution or holding company will be considered well capitalized if its ratio of Tier 1 capital to average total consolidated assets (i.e., leverage ratio) exceeds a 9% threshold, subject to a limited two quarter grace period, during which the leverage ratio cannot go 100 basis points below the then applicable threshold, and will not be required to calculate and report risk-based capital ratios. Eligibility criteria to utilize CBLR includes the following: ● Total assets of less than $10 billion, ● Total trading assets plus liabilities of 5% or less of consolidated assets, ● Total off-balance sheet exposures of 25% or less of consolidated assets, ● Cannot be an advanced approaches banking organization, and ● Leverage ratio greater than 9%, or temporarily prescribed threshold established in response to COVID-19. In April 2020, under the CARES Act, the 9% leverage ratio threshold was temporarily reduced to 8% in response to the COVID-19 pandemic. The threshold increased to 8.5% in 2021 and will return to 9% in 2022. The Company, Merchants Bank, and FMBI elected to begin using CBLR in the first quarter of 2020 and all intend to utilize this measure for the foreseeable future and thus will not calculate or report risk-based capital ratios. On December 2, 2020 the Federal Deposit Insurance Corporation (“FDIC”) issued an interim final rule related to COVID-19 as it pertains to eligibility to utilize CBLR. The rule allows organizations with less than $10 billion in total assets as of December 31, 2019, to use the assets on that date to determine the applicability of various regulatory asset thresholds during 2020 and 2021. If total assets exceed $10 billion after the dates provided in the interim rule, the Company is prepared to address the additional regulatory requirements and does not expect it to have significant financial implications. Management believes, as of September 30, 2021 and December 31, 2020, that the Company, Merchants Bank, and FMBI met all the regulatory capital adequacy requirements with CBLR to be classified as well-capitalized, and management is not aware of any conditions or events since the most recent regulatory notification that would change the Company’s, Merchants Bank’s, or FMBI’s category. As of September 30, 2021 and December 31, 2020, 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 FDIC categorized Merchants Bank and FMBI as well capitalized under the regulatory framework for prompt corrective action. There are no conditions or events since that notification that management believes have changed the Company’s, Merchants Bank’s, or FMBI’s category. The Company’s, Merchants Bank’s, and FMBI’s actual capital amounts and ratios are presented in the following tables. Minimum Amount To Be Well Actual Capitalized (1) Amount Ratio Amount Ratio (Dollars in thousands) September 30, 2021 CBLR (Tier 1) capital (1) (i.e., CBLR - leverage ratio) Company $ 1,090,870 10.7 % $ 866,269 > 8.5 % Merchants Bank 1,052,260 10.6 % 840,748 > 8.5 % FMBI 27,714 9.6 % 24,538 > 8.5 % (1) As defined by regulatory agencies. Minimum Amount To Be Well Actual Capitalized (1) Amount Ratio Amount Ratio (Dollars in thousands) December 31, 2020 CBLR (Tier 1) capital (1) (i.e., CBLR - leverage ratio) Company $ 792,456 8.6 % $ 738,019 > 8 % Merchants Bank 781,221 8.7 % 718,120 > 8 % FMBI 24,456 9.8 % 19,979 > 8 % (1) As defined by regulatory agencies. Failure to exceed the leverage ratio thresholds required under CBLR in the future, subject to any applicable grace period, would require the Company, Merchants Bank, and/or FMBI to return to the risk-based capital ratio thresholds previously utilized under the fully phased-in Basel III Capital Rules to determine capital adequacy. |
Derivative Financial Instrument
Derivative Financial Instruments | 9 Months Ended |
Sep. 30, 2021 | |
Derivative Financial Instruments | |
Derivative Financial Instruments | Note 8: 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 lock commitments 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, 2021 and December 31, 2020. Notional Fair Value Amount Balance Sheet Location Asset Liability September 30, 2021 (In thousands) (In thousands) Interest rate lock commitments $ 106,948 Other assets/liabilities $ 207 $ 465 Forward contracts $ 107,789 Other assets/liabilities 529 16 $ 736 $ 481 Notional Fair Value Amount Balance Sheet Location Asset Liability December 31, 2020 (In thousands) (In thousands) Interest rate lock commitments $ 412,043 Other assets/liabilities $ 6,131 $ — Forward contracts $ 304,024 Other assets/liabilities — 2,682 $ 6,131 $ 2,682 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, 2021 and 2020. Three Months Ended Nine Months Ended September 30, September 30, 2021 2020 2021 2020 (In thousands) (In thousands) Interest rate lock commitments $ (691) $ 2,407 $ (6,389) $ 7,963 Forward contracts (includes pair-off settlements) (322) (3,515) 5,785 (7,473) Net derivative gains (loss) $ (1,013) $ (1,108) $ (604) $ 490 Derivatives on Behalf of Customers The Company offers derivative contracts to some customers in connection with their risk management needs. 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, 2021 $ 105,992 Other assets/liabilities $ 1,718 $ 1,718 December 31, 2020 $ 82,726 Other assets/liabilities $ 3,170 $ 3,170 If there is a net gain or loss, the gross gains and losses on these derivative assets and liabilities are recorded in Other Noninterest income and Other Noninterest expense in the condensed consolidated statements of income. Three Months Ended Nine Months Ended September 30, September 30, 2021 2020 2021 2020 (In thousands) (In thousands) Gross swap gains $ 371 $ (289) $ 1,452 $ 3,048 Gross swap losses (371) 289 (1,452) (3,048) Net swap gains (losses) $ — $ — $ — $ — The Company pledged $3.9 million and $3.9 million in collateral to secure its obligations under swap contracts at September 30, 2021 and December 31, 2020, respectively. |
Disclosures about Fair Value of
Disclosures about Fair Value of Assets and Liabilities | 9 Months Ended |
Sep. 30, 2021 | |
Disclosures about Fair Value of Assets and Liabilities | |
Disclosures about Fair Value of Assets and Liabilities | Note 9: 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 Level 2 Level 3 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, 2021 and December 31, 2020: 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, 2021 Mortgage loans in process of securitization $ 634,027 $ — $ 634,027 $ — Available for sale securities: Treasury notes 5,006 5,006 — — Federal agencies 244,771 — 244,771 — Municipals 6,021 — 6,021 — Mortgage-backed - Government-sponsored entity (GSE) 45,321 — 45,321 — Loans held for sale 26,296 — 26,296 — Servicing rights 105,473 — — 105,473 Derivative assets - interest rate lock commitments 207 — — 207 Derivative assets - forward contracts 529 — 529 — Derivative assets - interest rate swaps 1,718 — 1,718 — Derivative liabilities - interest rate lock commitments 465 — — 465 Derivative liabilities - forward contracts 16 — 16 — Derivative liabilities - interest rate swaps 1,718 — 1,718 — December 31, 2020 Mortgage loans in process of securitization $ 338,733 $ — $ 338,733 $ — Available for sale securities: Treasury notes 6,559 6,559 — — Federal agencies 235,040 — 235,040 — Municipals 6,025 — 6,025 — Mortgage-backed - Government-sponsored entity (GSE) 22,178 — 22,178 — Loans held for sale 40,044 — 40,044 — Servicing rights 82,604 — — 82,604 Derivative assets - interest rate lock commitments 6,131 — — 6,131 Derivative asset - interest rate swap 3,170 — 3,170 — Derivative liabilities - forward contracts 2,682 — 2,682 — Derivative liabilities - interest rate swap 3,170 — 3,170 — 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, 2021 and the year ended December 31, 2020. For assets classified within Level 3 of the fair value hierarchy, the process used to develop the reported fair value is described below. Mortgage Loans in Process of Securitization 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, municipal securities 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. Servicing Rights 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, 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 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 expenses 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, 2021 2020 2021 2020 (In thousands) (In thousands) Servicing rights Balance, beginning of period $ 98,331 $ 72,889 $ 82,604 $ 74,387 Additions Originated and purchased servicing 7,125 6,462 23,833 14,406 Subtractions Paydowns (2,955) (2,608) (11,030) (5,070) Sales of servicing — (438) Changes in fair value due to changes in valuation inputs or assumptions used in the valuation model 2,972 (971) 10,504 (7,951) Balance, end of period $ 105,473 $ 75,772 $ 105,473 $ 75,772 Derivative Assets - interest rate lock commitments Balance, beginning of period $ 487 $ 5,742 $ 6,131 $ 186 Changes in fair value (280) 2,408 (5,924) 7,964 Balance, end of period $ 207 $ 8,150 $ 207 $ 8,150 Derivative Liabilities - interest rate lock commitments Balance, beginning of period $ 54 $ — $ — $ — Changes in fair value 411 1 465 1 Balance, end of period $ 465 $ 1 $ 465 $ 1 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, 2021 and December 31, 2020. 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, 2021 Impaired loans (collateral-dependent) $ 4,129 $ — $ — $ 4,129 December 31, 2020 Impaired loans (collateral-dependent) $ 4,059 $ — $ — $ 4,059 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 Weighted Fair Value Technique Unobservable Inputs Range Average (In thousands) At September 30, 2021: Collateral-dependent impaired loans $ 4,129 Market comparable properties Marketability discount 77% 77% Servicing rights - Multi-family $ 81,661 Discounted cash flow Discount rate 8% - 13% 9% Constant prepayment rate 0% - 50% 5% Servicing rights - Single-family $ 21,610 Discounted cash flow Discount rate 9% - 10% 9% Constant prepayment rate 11% - 13% 11% Servicing rights - SBA $ 2,202 Discounted cash flow Discount rate 16% 16% Constant prepayment rate 9% - 44% 12% Derivative assets - interest rate lock commitments $ 207 Discounted cash flow Loan closing rates 54% - 99% 85% Derivative liabilities - interest rate lock commitments $ 465 Discounted cash flow Loan closing rates 54% - 99% 85% At December 31, 2020: Collateral-dependent impaired loans $ 4,059 Market comparable properties Marketability discount 43% 43% Servicing rights - Multi-family $ 73,569 Discounted cash flow Discount rate 8% - 13% 9% Constant prepayment rate 2% - 43% 4% Servicing rights - Single-family $ 9,035 Discounted cash flow Discount rate 11% 11% Constant prepayment rate 8% - 35% 16% Derivative assets - interest rate lock commitments $ 6,131 Discounted cash flow Loan closing rates 55% - 99% 75% 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. Servicing Rights The most significant unobservable inputs used in the fair value measurement of the Company’s servicing rights are discount rates and constant prepayment rates. These two inputs can drive a significant amount of a market participant’s valuation of servicing rights. Significant increases (decreases) in the discount rate or assumed constant prepayment rates used to value servicing rights would decrease (increase) the value derived. 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, 2021 and December 31, 2020. 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, 2021 Financial assets: Cash and cash equivalents $ 802,576 $ 802,576 $ 802,576 $ — $ — Securities purchased under agreements to resell 5,923 5,923 — 5,923 — FHLB stock 70,767 70,767 — 70,767 — Loans held for sale 3,426,983 3,426,983 — 3,426,983 — Loans, net 5,431,227 5,389,595 — — 5,389,595 Interest receivable 21,894 21,894 — 21,894 — Financial liabilities: Deposits 8,947,319 8,948,327 7,707,121 1,241,206 — Short-term subordinated debt 17,000 17,000 — 17,000 — FHLB advances 556,979 556,992 — 556,992 — Other borrowing 235,157 235,157 — 235,157 — Interest payable 2,477 2,477 — 2,477 — December 31, 2020 Financial assets: Cash and cash equivalents $ 179,728 $ 179,728 $ 179,728 $ — $ — Securities purchased under agreements to resell 6,580 6,580 — 6,580 — FHLB stock 70,656 70,656 — 70,656 — Loans held for sale 3,030,110 3,030,110 — 3,030,110 — Loans, net 5,507,926 5,484,824 — — 5,484,824 Interest receivable 21,770 21,770 — 21,770 — Financial liabilities: Deposits 7,408,066 7,410,759 7,051,413 359,346 — Short-term subordinated debt 14,960 14,960 — 14,960 — FHLB advances 1,221,071 1,221,870 — 1,221,870 — Federal Reserve discount window/PPPLF advances 112,225 112,225 — 112,225 — Interest payable 1,476 1,476 — 1,476 — |
Earnings Per Share
Earnings Per Share | 9 Months Ended |
Sep. 30, 2021 | |
Earnings Per Share | |
Earnings Per Share | Note 10: Earnings Per Share Earnings per share were computed as follows: Three Month Periods Ended September 30, 2021 2020 Weighted- Per Weighted- Per Net Average Share Net Average Share Income Shares Amount Income Shares Amount (In thousands) (In thousands) Net income $ 58,503 $ 55,002 Dividends on preferred stock (5,729) (3,618) Net income allocated to common shareholders $ 52,774 $ 51,384 Basic earnings per share 28,784,197 $ 1.83 28,745,614 $ 1.79 Effect of dilutive securities-restricted stock awards 92,306 32,848 Diluted earnings per share 28,876,503 $ 1.83 28,778,462 $ 1.79 Nine Month Periods Ended September 30, 2021 2020 Weighted- Per Weighted- Per Net Average Share Net Average Share Income Shares Amount Income Shares Amount (In thousands) (In thousands) Net income $ 171,903 $ 120,747 Dividends on preferred stock (15,145) (10,855) Net income allocated to common shareholders $ 156,758 $ 109,892 Basic earnings per share 28,779,745 $ 5.45 28,741,395 $ 3.82 Effect of dilutive securities-restricted stock awards 87,380 25,361 Diluted earnings per share 28,867,125 $ 5.43 28,766,756 $ 3.82 |
Share-Based Payment Plans
Share-Based Payment Plans | 9 Months Ended |
Sep. 30, 2021 | |
Share-Based Payment Plans | |
Share-Based Payment Plans | Note 11: 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 plan until the time it is no longer outstanding. During the three months ended September 30, 2021 and 2020, the Company did no t issue any shares pursuant to awards issued under these plans. During the nine months ended September 30, 2021 and 2020, the Company issued 35,056 and 36,046 shares, respectively, pursuant to plans. 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. In January 2021, the Board of Directors amended the plan for nonexecutive directors to receive a portion of their annual fees, issued quarterly, in the form of restricted common stock equal to $50,000 per member, rounded up to the nearest whole share, to be effective after the Company’s annual meeting of shareholders held in May 2021. There were 1,775 and 3,235 shares issued to non-executive directors during the three and nine months ended September 30, 2021, respectively and there were 0 and 3,130 shares issued to non-executive directors during the three and nine months ended September 30, 2020, respectively. |
Segment Information
Segment Information | 9 Months Ended |
Sep. 30, 2021 | |
Segment Information | |
Segment Information | Note 12: Segment Information Our Company’s 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, 2021 and 2020. Multi-family Mortgage Mortgage Banking Warehousing Banking Other Total (In thousands) Three Months Ended September 30, 2021 Interest income $ 272 $ 33,153 $ 42,561 $ 1,328 $ 77,314 Interest expense — 2,334 6,904 (805) 8,433 Net interest income 272 30,819 35,657 2,133 68,881 Provision for loan losses — (585) 1,664 — 1,079 Net interest income after provision for loan losses 272 31,404 33,993 2,133 67,802 Noninterest income 35,022 2,734 3,803 (1,288) 40,271 Noninterest expense 15,569 2,971 6,304 4,628 29,472 Income before income taxes 19,725 31,167 31,492 (3,783) 78,601 Income taxes 5,277 7,950 8,029 (1,158) 20,098 Net income (loss) $ 14,448 $ 23,217 $ 23,463 $ (2,625) $ 58,503 Total assets $ 280,927 $ 4,685,037 $ 5,950,316 $ 35,753 $ 10,952,033 Multi-family Mortgage Mortgage Banking Warehousing Banking Other Total (In thousands) Three Months Ended September 30, 2020 Interest income $ 245 $ 47,321 $ 27,628 $ 1,064 $ 76,258 Interest expense — 4,546 7,139 (749) 10,936 Net interest income 245 42,775 20,489 1,813 65,322 Provision for loan losses — 691 2,290 — 2,981 Net interest income after provision for loan losses 245 42,084 18,199 1,813 62,341 Noninterest income 20,471 6,834 12,374 (1,022) 38,657 Noninterest expense 11,955 3,534 7,145 3,750 26,384 Income before income taxes 8,761 45,384 23,428 (2,959) 74,614 Income taxes 2,870 11,591 5,942 (791) 19,612 Net income (loss) $ 5,891 $ 33,793 $ 17,486 $ (2,168) $ 55,002 Total assets $ 194,624 $ 5,179,664 $ 4,111,984 $ 44,203 $ 9,530,475 Multi-family Mortgage Mortgage Banking Warehousing Banking Other Total (In thousands) Nine Months Ended September 30, 2021 Interest income $ 683 $ 101,675 $ 123,084 $ 3,859 $ 229,301 Interest expense — 5,657 20,559 (2,166) 24,050 Net interest income 683 96,018 102,525 6,025 205,251 Provision for loan losses — (1,709) 4,136 — 2,427 Net interest income after provision for loan losses 683 97,727 98,389 6,025 202,824 Noninterest income 96,828 9,930 14,094 (3,790) 117,062 Noninterest expense 45,639 8,570 20,925 12,605 87,739 Income before income taxes 51,872 99,087 91,558 (10,370) 232,147 Income taxes 14,492 25,239 23,329 (2,816) 60,244 Net income $ 37,380 $ 73,848 $ 68,229 $ (7,554) $ 171,903 Total assets $ 280,927 $ 4,685,037 $ 5,950,316 $ 35,753 $ 10,952,033 Multi-family Mortgage Mortgage Banking Warehousing Banking Other Total (In thousands) Nine Months Ended September 30, 2020 Interest income $ 925 $ 119,464 $ 82,541 $ 1,949 $ 204,879 Interest expense — 24,417 29,323 (3,770) 49,970 Net interest income 925 95,047 53,218 5,719 154,909 Provision for loan losses — 1,071 6,653 — 7,724 Net interest income after provision for loan losses 925 93,976 46,565 5,719 147,185 Noninterest income 50,160 15,236 22,236 (2,885) 84,747 Noninterest expense 29,771 10,074 18,930 10,184 68,959 Income before income taxes 21,314 99,138 49,871 (7,350) 162,973 Income taxes 6,373 25,196 12,623 (1,966) 42,226 Net income $ 14,941 $ 73,942 $ 37,248 $ (5,384) $ 120,747 Total assets $ 194,624 $ 5,179,664 $ 4,111,984 $ 44,203 $ 9,530,475 |
Preferred Stock Offerings
Preferred Stock Offerings | 9 Months Ended |
Sep. 30, 2021 | |
Preferred Stock Offerings | |
Preferred Stock Offerings | Note 13: Preferred Stock Offerings 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, and with a liquidation preference of $25.00 per share (the “Series A Preferred Stock”). 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 additional $2.0 million in net proceeds, after deducting $41,000 in 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. approval of the appropriate federal banking agency, at the liquidation preference, plus any declared and unpaid dividends (without regard to any undeclared dividends) to, but excluding, the date of redemption. On August 19, 2019, the Company issued 5,000,000 depositary shares, each representing a 1/40 th On March 23, 2021, the Company issued 6,000,000 depositary shares, each representing a 1/40 th per depositary share). The aggregate gross offering proceeds for the shares issued by the Company was million. The Series C Preferred Stock have no voting rights with respect to matters that generally require the approval of our common shareholders. Dividends on the Series C Preferred Stock, to the extent declared by the Company’s board, are payable quarterly. The Company may redeem the Series C Preferred Stock, in whole or in part, at our option, on any dividend payment date on or after April 1, 2026, subject to the approval of the appropriate federal banking agency, at the liquidation preference, plus any declared and unpaid dividends (without regard to any undeclared dividends) to, but excluding, the date of redemption. Private Placement Offerings of Preferred Stock The Company previously issued a total of 41,625 shares of 8% Non-Cumulative, Perpetual Preferred Stock, without par value, with a liquidation preference of $1,000.00 per share (8% Preferred Stock”) in private placement offerings. The Company was able to redeem this Preferred Stock, in whole or in part, at its option, on any dividend payment date on or after December 31, 2020, subject to the approval of the appropriate federal banking agency, at the liquidation preference, plus any declared and unpaid dividends (without regard to any undeclared dividends) to, but excluding, the date of redemption. 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. On April 15, 2021, all 41,625 shares of the 8% Preferred Stock were redeemed for $41.6 million, plus unpaid dividends of $139,000. On May 6, 2021 the 8% Preferred Stock shareholders participated in a private offering to replace their redeemed shares with Series C Preferred Stock. Accordingly, 46,181 shares (1,847,233 depositary shares) of Series C Preferred Stock were issued at a price of $25 per depositary share. The total capital raised from the private offering was $46.2 million, net of $23,000 in expenses. Repurchase/Redemption of Preferred Stock: On September 23, 2019 the Company repurchased and subsequently retired 874,000 shares of its 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. On April 15, 2021, all 41,625 shares of the 8% Preferred Stock were redeemed for $41.6 million, plus unpaid dividends of $139,000. |
Recent Accounting Pronouncement
Recent Accounting Pronouncements | 9 Months Ended |
Sep. 30, 2021 | |
Recent Accounting Pronouncements | |
Recent Accounting Pronouncements | Note 14: Recent Accounting Pronouncements The Company is an emerging growth company and as such will be subject to the effective dates noted for private companies if they differ from the effective dates noted for public companies. FASB ASU 2016-02, Leases In February 2016, the Financial Accounting Standards Board (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 for fiscal years beginning after December 15, 2021, and for interim periods for years beginning after January 1, 2022. 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, including interim periods within those fiscal years. Because the Company’s status as an emerging growth company is expected to expire on December 31, 2022, this standard will 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 with 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. The Company 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, and is progressing towards determining the magnitude of any such one-time adjustment or the overall impact of the new guidance on the Company’s consolidated financial statements. FASB ASU 2019-12 - Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes In December 2019, the FASB issued ASU No. 2019-12. This ASU removes specific exceptions to the general principles in Topic 740 in GAAP. It eliminates the need for an organization to analyze whether the following apply in a given period: (1) exception to the incremental approach for intraperiod tax allocation; (2) exceptions to accounting for basis differences when there are ownership changes in foreign investments; and (3) exception in interim period income tax accounting for year-to-date losses that exceed anticipated losses. The ASU also improves financial statement preparers’ application of income tax-related guidance and simplifies GAAP for: (1) franchise taxes that are partially based on income; (2) transactions with a government that result in a step up in the tax basis of goodwill; (3) separate financial statements of legal entities that are not subject to tax; and (4) enacted changes in tax laws in interim periods. As an emerging growth company, the amendments in this update become effective for fiscal years beginning after December 15, 2021, and interim periods within those fiscal years. Early adoption is permitted. The Company is currently evaluating the impact of adopting the new guidance but does not expect it to have a material impact on the consolidated financial statements. FASB ASU 2020-04 - Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting In March 2020, the FASB issued ASU 2020-04, Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting ● A change in a contract’s reference interest rate would be accounted for as a continuation of that contract rather than as the creation of a new one for contracts, including loans, debt, leases, and other arrangements, that meet specific criteria. ● When updating its hedging strategies in response to reference rate reform, an entity would be allowed to preserve its hedge accounting. Entities may apply this ASU as of the beginning of an interim period that includes the March 12, 2020 issuance date of the ASU, through December 31, 2022. The Company is in the process of implementing a transition plan to identify and modify its loans and other financial instruments with attributes that are either directly or indirectly influenced by LIBOR. The Company believes the adoption of this guidance on activities subsequent to December 31, 2020 through December 31, 2022 would not have a material impact on the consolidated financial statements. |
Basis of Presentation (Policies
Basis of Presentation (Policies) | 9 Months Ended |
Sep. 30, 2021 | |
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”), Farmers-Merchants Bank of Illinois (“FMBI”) and Merchants Asset Management, LLC (“MAM”). Merchants Bank’s primary operating subsidiaries include Merchants Capital Corp. (‘MCC”), Merchants Capital Servicing, LLC (“MCS”), and Merchants Capital Investments, LLC (“MCI”). All direct and indirectly owned subsidiaries owned by Merchants Bancorp are collectively referred to as the “Company”. The accompanying unaudited condensed consolidated balance sheet of the Company as of December 31, 2020, which has been derived from audited financial statements, and unaudited condensed consolidated financial statements of the Company as of September 30, 2021 and for the three and nine months ended September 30, 2021 and 2020, 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, 2020 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, 2021 |
Principles of Consolidation | Principles of Consolidation The unaudited condensed consolidated financial statements as of and for the period ended September 30, 2021 and 2020 include results from the Company, and its wholly owned subsidiaries, Merchants Bank, FMBI and MAM. Also included are Merchants Bank’s primary operating subsidiaries, MCC, MCS and MCI, as well as all 100% directly and indirectly owned subsidiaries owned by Merchants Bancorp. In addition, when the Company makes an equity investment in an entity for which it holds a variable interest, it is evaluated for consolidation requirements under Accounting Standards Update of Topic 810. Accordingly, the entity is assessed for potential consolidation under the variable interest entity (“VIE”) model and would only consolidate those entities for which it is a primary beneficiary. A primary beneficiary is defined as the party that has both the power to direct the activities that most significantly impact the entity, and an interest that could be significant to the entity. To determine if an interest could be significant to the entity, both qualitative and quantitative factors regarding the nature, size and form of our involvement with the entity are evaluated. Alternatively, under the voting interest model, it would only consolidate those entities for which it has a controlling interest. Because the variable interest investments held by the Company as of September 30, 2021 are not deemed to be primary beneficiaries or controlling interests, the entities are not consolidated and the equity method or proportional method of accounting has been applied. The Company will analyze whether its entities are the primary beneficiary on an ongoing basis. Changes in facts and circumstances occurring since the previous primary beneficiary determination will be considered as part of this ongoing assessment. See Note 5: Variable Interest Entities (VIEs) for additional information about VIEs. All significant intercompany accounts and transactions have been eliminated in consolidation. |
Deconsolidation | Deconsolidation The unaudited condensed consolidated financial statements included consolidated results from certain entities primarily involved in single-family debt financing until January 30, 2021, while the Company was deemed to be a primary beneficiary. On February 1, 2021, the Company’s debt fund entities were restructured in such a way that its ownership and participation was significantly reduced with the inclusion of additional, unrelated investors and the Company was no longer classified as a primary beneficiary. Accordingly, results from these entities were no longer consolidated after this date, in accordance with the consolidation guidelines of the Accounting Standards Update of Topic 810. Following the deconsolidation, the carrying value of assets and liabilities of these entities were removed from the consolidated balance sheet, and the continuing investments were recorded at fair value at the date of deconsolidation. The total amount deconsolidated from the balance sheet included net assets of approximately $10 million, consisting primarily of $66.6 million in loans receivable, and $52.7 million in borrowings with Merchants Bank that was previously eliminated in consolidation. The fair value of its continuing investments was approximately $10 million on the deconsolidation date and has been reported in Other Assets after deconsolidation. The estimated fair value was determined based on third-party evaluations of similar assets in the underlying business. The difference between the fair value of these deconsolidated entities and their carrying value was deemed to be immaterial, resulting in no gain or loss on deconsolidation. These continuing investments after deconsolidation are classified as variable interest entities, have not been consolidated, and are accounted for under the equity method of accounting. See Note 5: Variable Interest Entities (VIEs) |
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. |
Reclassifications | Reclassifications Certain reclassifications may have been made to the 2020 financial statements to conform to the financial statement presentation as of and for the three and nine months ended September 30, 2021. These reclassifications had no effect on net income. |
Securities Available For Sale (
Securities Available For Sale (Tables) | 9 Months Ended |
Sep. 30, 2021 | |
Securities Available For Sale | |
Schedule of amortized cost and approximate fair values, together with gross unrealized gains and losses | September 30, 2021 Gross Gross Amortized Unrealized Unrealized Fair Cost Gains Losses Value (In thousands) Available for sale securities: Treasury notes $ 5,002 $ 7 $ 3 $ 5,006 Federal agencies 244,966 1 196 244,771 Municipals 5,929 92 — 6,021 Mortgage-backed - Government-sponsored entity (GSE) 44,889 432 — 45,321 Total available for sale securities $ 300,786 $ 532 $ 199 $ 301,119 December 31, 2020 Gross Gross Amortized Unrealized Unrealized Fair Cost Gains Losses Value (In thousands) Available for sale securities: Treasury notes $ 6,535 $ 24 $ — $ 6,559 Federal agencies 234,954 103 17 235,040 Municipals 5,935 90 — 6,025 Mortgage-backed - Government-sponsored entity (GSE) 21,899 279 — 22,178 Total available for sale securities $ 269,323 $ 496 $ 17 $ 269,802 Mortgage-backed securities in the table above for September 30, 2021 include securities purchased from Freddie Mac following the loan sale and securitization arrangement with Freddie Mac described in Note 4: Loans and Allowance for Loan Losses. |
Schedule of amortized cost and fair value of available-for-sale securities by contractual maturity | September 30, 2021 December 31, 2020 Amortized Fair Amortized Fair Cost Value Cost Value Contractual Maturity (In thousands) Within one year $ 7,054 $ 7,054 $ 6,288 $ 6,302 After one through five years 247,987 247,822 239,770 239,877 After five through ten years 512 547 515 549 After ten years 344 375 851 896 255,897 255,798 247,424 247,624 Mortgage-backed - Government-sponsored entity (GSE) 44,889 45,321 21,899 22,178 $ 300,786 $ 301,119 $ 269,323 $ 269,802 |
Schedule of gross unrealized losses and fair value of investments with unrealized losses have been in continuous | September 30, 2021 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 $ 1,997 $ 3 $ — $ — $ 1,997 $ 3 Federal agencies 219,772 196 — — 219,772 196 $ 221,769 $ 199 $ — $ — $ 221,769 $ 199 December 31, 2020 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: Federal agencies $ 69,939 $ 17 $ — $ — $ 69,939 $ 17 |
Loans and Allowance for Loan _2
Loans and Allowance for Loan Losses (Tables) | 9 Months Ended |
Sep. 30, 2021 | |
Loans and Allowance for Loan Losses | |
Summary of loans | September 30, December 31, 2021 2020 (In thousands) Mortgage warehouse lines of credit $ 891,605 $ 1,605,745 Residential real estate 828,950 678,848 Multi-family and healthcare financing 3,244,442 2,749,020 Commercial and commercial real estate 391,562 387,294 Agricultural production and real estate 92,113 101,268 Consumer and margin loans 11,689 13,251 5,460,361 5,535,426 Less: Allowance for loan losses 29,134 27,500 Loans Receivable $ 5,431,227 $ 5,507,926 |
Summary of activity in the allowance for loans and recorded investment by loan portfolio | At or For the Three Months Ended September 30, 2021 MTG WHLOC RES RE MF RE CML & CRE AG & AGRE CON & MAR TOTAL (In thousands) Allowance for loan losses Balance, beginning of period $ 2,935 $ 3,969 $ 15,782 $ 5,239 $ 611 $ 160 $ 28,696 Provision (credit) for loan losses (705) 105 1,429 296 (2) (44) 1,079 Loans charged to the allowance — — — (650) — — (650) Recoveries of loans previously charged off — — — — — 9 9 Balance, end of period $ 2,230 $ 4,074 $ 17,211 $ 4,885 $ 609 $ 125 $ 29,134 Ending balance: individually evaluated for impairment $ — $ — $ — $ 1,175 $ — $ — $ 1,175 Ending balance: collectively evaluated for impairment $ 2,230 $ 4,074 $ 17,211 $ 3,710 $ 609 $ 125 $ 27,959 Loans Ending balance $ 891,605 $ 828,950 $ 3,244,442 $ 391,562 $ 92,113 $ 11,689 $ 5,460,361 Ending balance individually evaluated for impairment $ — $ 780 $ 36,760 $ 6,416 $ 158 $ 6 $ 44,120 Ending balance collectively evaluated for impairment $ 891,605 $ 828,170 $ 3,207,682 $ 385,146 $ 91,955 $ 11,683 $ 5,416,241 For the Three Months Ended September 30, 2020 MTG WHLOC RES RE MF RE CML & CRE AG & AGRE CON & MAR TOTAL (In thousands) Allowance for loan losses Balance, beginning of period $ 3,203 $ 2,310 $ 9,878 $ 4,343 $ 610 $ 153 $ 20,497 Provision (credit) for loan losses 874 504 1,566 13 21 3 2,981 Loans charged to the allowance — — — (94) — (10) (104) Recoveries of loans previously charged off — — — 62 — — 62 Balance, end of period $ 4,077 $ 2,814 $ 11,444 $ 4,324 $ 631 $ 146 $ 23,436 For the Nine Months Ended September 30, 2021 MTG WHLOC RES RE MF RE CML & CRE AG & AGRE CON & MAR TOTAL (In thousands) Allowance for loan losses Balance, beginning of period $ 4,018 $ 3,334 $ 14,731 $ 4,641 $ 636 $ 140 $ 27,500 Provision for loan losses (1,788) 742 2,480 1,046 (27) (26) 2,427 Loans charged to the allowance — (2) — (802) — (6) (810) Recoveries of loans previously charged off — — — — — 17 17 Balance, end of period $ 2,230 $ 4,074 $ 17,211 $ 4,885 $ 609 $ 125 $ 29,134 For the Nine Months Ended September 30, 2020 MTG WHLOC RES RE MF RE CML & CRE AG & AGRE CON & MAR TOTAL (In thousands) Allowance for loan losses Balance, beginning of period $ 1,913 $ 2,042 $ 7,018 $ 4,173 $ 523 $ 173 $ 15,842 Provision (credit) for loan losses 2,164 772 4,426 270 108 (16) 7,724 Loans charged to the allowance — — — (225) — (11) (236) Recoveries of loans previously charged off — — — 106 — — 106 Balance, end of period $ 4,077 $ 2,814 $ 11,444 $ 4,324 $ 631 $ 146 $ 23,436 |
Summary of activity in the allowance for loan losses | December 31, 2020 MTG WHLOC RES RE MF RE CML & CRE AG & AGRE CON & MAR TOTAL (In thousands) Allowance for loan losses Balance, December 31, 2020 $ 4,018 $ 3,334 $ 14,731 $ 4,641 $ 636 $ 140 $ 27,500 Ending balance: individually evaluated for impairment $ — $ 7 $ — $ 1,606 $ — $ — $ 1,613 Ending balance: collectively evaluated for impairment $ 4,018 $ 3,327 $ 14,731 $ 3,035 $ 636 $ 140 $ 25,887 Loans Balance, December 31, 2020 $ 1,605,745 $ 678,848 $ 2,749,020 $ 387,294 $ 101,268 $ 13,251 $ 5,535,426 Ending balance individually evaluated for impairment $ — $ 2,761 $ — $ 9,591 $ 2,100 $ 12 $ 14,464 Ending balance collectively evaluated for impairment $ 1,605,745 $ 676,087 $ 2,749,020 $ 377,703 $ 99,168 $ 13,239 $ 5,520,962 |
Schedule of credit risk profile of loan portfolio | September 30, 2021 MTG WHLOC RES RE MF RE CML & CRE AG & AGRE CON & MAR TOTAL (In thousands) Special Mention (Watch) $ — $ 823 $ 78,979 $ 3,652 $ 3,942 $ 4 $ 87,400 Special Mention (Watch) - COVID-19 Deferrals — 77 185 — — — 262 Substandard — 780 36,760 6,416 158 6 44,120 Acceptable and Above 891,605 827,270 3,128,518 381,494 88,013 11,679 5,328,579 Total $ 891,605 $ 828,950 $ 3,244,442 $ 391,562 $ 92,113 $ 11,689 $ 5,460,361 December 31, 2020 MTG WHLOC RES RE MF RE CML & CRE AG & AGRE CON & MAR TOTAL (In thousands) Special Mention (Watch) $ 222 $ 853 $ 145,050 $ 2,620 $ 4,160 $ 34 $ 152,939 Special Mention (Watch) - COVID-19 Deferrals — 383 185 110 — — 678 Substandard — 2,761 — 9,591 2,100 12 14,464 Acceptable and Above 1,605,523 674,851 2,603,785 374,973 95,008 13,205 5,367,345 Total $ 1,605,745 $ 678,848 $ 2,749,020 $ 387,294 $ 101,268 $ 13,251 $ 5,535,426 |
Schedule of aging analysis of the recorded investment in loans | September 30, 2021 30-59 Days 60-89 Days Greater Than Total Total Past Due Past Due 90 Days Past Due Current Loans (In thousands) MTG WHLOC $ — $ — $ — $ — $ 891,605 $ 891,605 RES RE 377 196 141 714 828,236 828,950 MF RE — — — — 3,244,442 3,244,442 CML & CRE 361 46 2,224 2,631 388,931 391,562 AG & AGRE 103 — — 103 92,010 92,113 CON & MAR 1 34 20 55 11,634 11,689 $ 842 $ 276 $ 2,385 $ 3,503 $ 5,456,858 $ 5,460,361 December 31, 2020 30-59 Days 60-89 Days Greater Than Total Total Past Due Past Due 90 Days Past Due Current Loans (In thousands) MTG WHLOC $ — $ — $ — $ — $ 1,605,745 $ 1,605,745 RES RE 364 80 630 1,074 677,774 678,848 MF RE — 36,760 — 36,760 2,712,260 2,749,020 CML & CRE 608 76 3,582 4,266 383,028 387,294 AG & AGRE 3,769 — 1,934 5,703 95,565 101,268 CON & MAR 7 — 19 26 13,225 13,251 $ 4,748 $ 36,916 $ 6,165 $ 47,829 $ 5,487,597 $ 5,535,426 |
Schedule of components of impaired loans and specific valuation allowance | September 30, 2021 MTG WHLOC RES RE MF RE CML & CRE AG & AGRE CON & MAR TOTAL (In thousands) Impaired loans without a specific allowance: Recorded investment $ — $ 780 $ 36,760 $ 4,455 $ 158 $ 6 $ 42,159 Unpaid principal balance — 780 36,760 4,455 158 6 42,159 Impaired loans with a specific allowance: Recorded investment — — — 1,961 — — 1,961 Unpaid principal balance — — — 1,961 — — 1,961 Specific allowance — — — 1,175 — — 1,175 Total impaired loans: Recorded investment — 780 36,760 6,416 158 6 44,120 Unpaid principal balance — 780 36,760 6,416 158 6 44,120 Specific allowance — — — 1,175 — — 1,175 December 31, 2020 MTG WHLOC RES RE MF RE CML & CRE AG & AGRE CON & MAR TOTAL (In thousands) Impaired loans without a specific allowance: Recorded investment $ — $ 2,704 $ — $ 3,319 $ 2,100 $ 7 $ 8,130 Unpaid principal balance — 2,704 — 3,319 2,100 7 8,130 Impaired loans with a specific allowance: — Recorded investment — 57 — 6,272 — 5 6,334 Unpaid principal balance — 57 — 6,272 — 5 6,334 Specific allowance — 7 — 1,606 — — 1,613 Total impaired loans: Recorded investment — 2,761 — 9,591 2,100 12 14,464 Unpaid principal balance — 2,761 — 9,591 2,100 12 14,464 Specific allowance — 7 — 1,606 — — 1,613 |
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, 2021 Average recorded investment in impaired loans $ — $ 595 $ 9,190 $ 6,731 $ 158 $ 6 $ 16,680 Interest income recognized — 30 — 82 — — 112 Three Months Ended September 30, 2020 Average recorded investment in impaired loans $ — $ 2,892 $ — $ 10,061 $ 2,231 $ 14 $ 15,198 Interest income recognized — 7 — 90 — — 97 MTG WHLOC RES RE MF RE CML & CRE AG & AGRE CON & MAR TOTAL (In thousands) Nine Months Ended September 30, 2021 Average recorded investment in impaired loans $ — $ 1,885 $ 7,352 $ 7,307 $ 747 $ 7 $ 17,298 Interest income recognized — 57 — 341 — — 398 Nine Months Ended September 30, 2020 Average recorded investment in impaired loans $ 138 $ 2,892 $ — $ 9,747 $ 1,506 $ 17 $ 14,300 Interest income recognized — 42 — 305 — 1 348 |
Variable Interest Entities (V_2
Variable Interest Entities (VIEs) (Tables) | 9 Months Ended |
Sep. 30, 2021 | |
Variable Interest Entities (VIEs). | |
Schedule reflects the size of VIEs as well as maximum exposure to loss in connection with investments | Unconsolidated VIEs Total Total Maximum Assets ($ in thousands) Assets Liabilities Exposure to Loss (In thousands) September 30, 2021 Single-family and multi-family debt financing investments $ 25,338 $ 12,334 $ 25,163 December 31, 2020 Single-family and multi-family debt financing investments $ — $ — $ — |
Regulatory Matters (Tables)
Regulatory Matters (Tables) | 9 Months Ended |
Sep. 30, 2021 | |
Regulatory Matters | |
Summary of bank's actual capital amounts and ratios | The Company’s, Merchants Bank’s, and FMBI’s actual capital amounts and ratios are presented in the following tables. Minimum Amount To Be Well Actual Capitalized (1) Amount Ratio Amount Ratio (Dollars in thousands) September 30, 2021 CBLR (Tier 1) capital (1) (i.e., CBLR - leverage ratio) Company $ 1,090,870 10.7 % $ 866,269 > 8.5 % Merchants Bank 1,052,260 10.6 % 840,748 > 8.5 % FMBI 27,714 9.6 % 24,538 > 8.5 % (1) As defined by regulatory agencies. Minimum Amount To Be Well Actual Capitalized (1) Amount Ratio Amount Ratio (Dollars in thousands) December 31, 2020 CBLR (Tier 1) capital (1) (i.e., CBLR - leverage ratio) Company $ 792,456 8.6 % $ 738,019 > 8 % Merchants Bank 781,221 8.7 % 718,120 > 8 % FMBI 24,456 9.8 % 19,979 > 8 % (1) As defined by regulatory agencies. |
Derivative Financial Instrume_2
Derivative Financial Instruments (Tables) | 9 Months Ended |
Sep. 30, 2021 | |
Derivative Financial Instruments | |
Summary of notional amount and fair value of derivative assets and liabilities | Notional Fair Value Amount Balance Sheet Location Asset Liability September 30, 2021 (In thousands) (In thousands) Interest rate lock commitments $ 106,948 Other assets/liabilities $ 207 $ 465 Forward contracts $ 107,789 Other assets/liabilities 529 16 $ 736 $ 481 Notional Fair Value Amount Balance Sheet Location Asset Liability December 31, 2020 (In thousands) (In thousands) Interest rate lock commitments $ 412,043 Other assets/liabilities $ 6,131 $ — Forward contracts $ 304,024 Other assets/liabilities — 2,682 $ 6,131 $ 2,682 |
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, 2021 2020 2021 2020 (In thousands) (In thousands) Interest rate lock commitments $ (691) $ 2,407 $ (6,389) $ 7,963 Forward contracts (includes pair-off settlements) (322) (3,515) 5,785 (7,473) Net derivative gains (loss) $ (1,013) $ (1,108) $ (604) $ 490 |
Interest rate swaps | |
Derivative Financial Instruments | |
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, 2021 $ 105,992 Other assets/liabilities $ 1,718 $ 1,718 December 31, 2020 $ 82,726 Other assets/liabilities $ 3,170 $ 3,170 |
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, 2021 2020 2021 2020 (In thousands) (In thousands) Gross swap gains $ 371 $ (289) $ 1,452 $ 3,048 Gross swap losses (371) 289 (1,452) (3,048) Net swap gains (losses) $ — $ — $ — $ — |
Disclosures about Fair Value _2
Disclosures about Fair Value of Assets and Liabilities (Tables) | 9 Months Ended |
Sep. 30, 2021 | |
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, 2021 Mortgage loans in process of securitization $ 634,027 $ — $ 634,027 $ — Available for sale securities: Treasury notes 5,006 5,006 — — Federal agencies 244,771 — 244,771 — Municipals 6,021 — 6,021 — Mortgage-backed - Government-sponsored entity (GSE) 45,321 — 45,321 — Loans held for sale 26,296 — 26,296 — Servicing rights 105,473 — — 105,473 Derivative assets - interest rate lock commitments 207 — — 207 Derivative assets - forward contracts 529 — 529 — Derivative assets - interest rate swaps 1,718 — 1,718 — Derivative liabilities - interest rate lock commitments 465 — — 465 Derivative liabilities - forward contracts 16 — 16 — Derivative liabilities - interest rate swaps 1,718 — 1,718 — December 31, 2020 Mortgage loans in process of securitization $ 338,733 $ — $ 338,733 $ — Available for sale securities: Treasury notes 6,559 6,559 — — Federal agencies 235,040 — 235,040 — Municipals 6,025 — 6,025 — Mortgage-backed - Government-sponsored entity (GSE) 22,178 — 22,178 — Loans held for sale 40,044 — 40,044 — Servicing rights 82,604 — — 82,604 Derivative assets - interest rate lock commitments 6,131 — — 6,131 Derivative asset - interest rate swap 3,170 — 3,170 — Derivative liabilities - forward contracts 2,682 — 2,682 — Derivative liabilities - interest rate swap 3,170 — 3,170 — |
Schedule of Level 3 reconciliation of recurring fair value measurements | Three Months Ended September 30, Nine Months Ended September 30, 2021 2020 2021 2020 (In thousands) (In thousands) Servicing rights Balance, beginning of period $ 98,331 $ 72,889 $ 82,604 $ 74,387 Additions Originated and purchased servicing 7,125 6,462 23,833 14,406 Subtractions Paydowns (2,955) (2,608) (11,030) (5,070) Sales of servicing — (438) Changes in fair value due to changes in valuation inputs or assumptions used in the valuation model 2,972 (971) 10,504 (7,951) Balance, end of period $ 105,473 $ 75,772 $ 105,473 $ 75,772 Derivative Assets - interest rate lock commitments Balance, beginning of period $ 487 $ 5,742 $ 6,131 $ 186 Changes in fair value (280) 2,408 (5,924) 7,964 Balance, end of period $ 207 $ 8,150 $ 207 $ 8,150 Derivative Liabilities - interest rate lock commitments Balance, beginning of period $ 54 $ — $ — $ — Changes in fair value 411 1 465 1 Balance, end of period $ 465 $ 1 $ 465 $ 1 |
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, 2021 Impaired loans (collateral-dependent) $ 4,129 $ — $ — $ 4,129 December 31, 2020 Impaired loans (collateral-dependent) $ 4,059 $ — $ — $ 4,059 |
Schedule of quantitative information about unobservable inputs used in recurring and nonrecurring Level 3 fair value measurements other than goodwill | Valuation Weighted Fair Value Technique Unobservable Inputs Range Average (In thousands) At September 30, 2021: Collateral-dependent impaired loans $ 4,129 Market comparable properties Marketability discount 77% 77% Servicing rights - Multi-family $ 81,661 Discounted cash flow Discount rate 8% - 13% 9% Constant prepayment rate 0% - 50% 5% Servicing rights - Single-family $ 21,610 Discounted cash flow Discount rate 9% - 10% 9% Constant prepayment rate 11% - 13% 11% Servicing rights - SBA $ 2,202 Discounted cash flow Discount rate 16% 16% Constant prepayment rate 9% - 44% 12% Derivative assets - interest rate lock commitments $ 207 Discounted cash flow Loan closing rates 54% - 99% 85% Derivative liabilities - interest rate lock commitments $ 465 Discounted cash flow Loan closing rates 54% - 99% 85% At December 31, 2020: Collateral-dependent impaired loans $ 4,059 Market comparable properties Marketability discount 43% 43% Servicing rights - Multi-family $ 73,569 Discounted cash flow Discount rate 8% - 13% 9% Constant prepayment rate 2% - 43% 4% Servicing rights - Single-family $ 9,035 Discounted cash flow Discount rate 11% 11% Constant prepayment rate 8% - 35% 16% Derivative assets - interest rate lock commitments $ 6,131 Discounted cash flow Loan closing rates 55% - 99% 75% |
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, 2021 Financial assets: Cash and cash equivalents $ 802,576 $ 802,576 $ 802,576 $ — $ — Securities purchased under agreements to resell 5,923 5,923 — 5,923 — FHLB stock 70,767 70,767 — 70,767 — Loans held for sale 3,426,983 3,426,983 — 3,426,983 — Loans, net 5,431,227 5,389,595 — — 5,389,595 Interest receivable 21,894 21,894 — 21,894 — Financial liabilities: Deposits 8,947,319 8,948,327 7,707,121 1,241,206 — Short-term subordinated debt 17,000 17,000 — 17,000 — FHLB advances 556,979 556,992 — 556,992 — Other borrowing 235,157 235,157 — 235,157 — Interest payable 2,477 2,477 — 2,477 — December 31, 2020 Financial assets: Cash and cash equivalents $ 179,728 $ 179,728 $ 179,728 $ — $ — Securities purchased under agreements to resell 6,580 6,580 — 6,580 — FHLB stock 70,656 70,656 — 70,656 — Loans held for sale 3,030,110 3,030,110 — 3,030,110 — Loans, net 5,507,926 5,484,824 — — 5,484,824 Interest receivable 21,770 21,770 — 21,770 — Financial liabilities: Deposits 7,408,066 7,410,759 7,051,413 359,346 — Short-term subordinated debt 14,960 14,960 — 14,960 — FHLB advances 1,221,071 1,221,870 — 1,221,870 — Federal Reserve discount window/PPPLF advances 112,225 112,225 — 112,225 — Interest payable 1,476 1,476 — 1,476 — |
Earnings Per Share (Tables)
Earnings Per Share (Tables) | 9 Months Ended |
Sep. 30, 2021 | |
Earnings Per Share | |
Schedule of computation of earnings per share | Three Month Periods Ended September 30, 2021 2020 Weighted- Per Weighted- Per Net Average Share Net Average Share Income Shares Amount Income Shares Amount (In thousands) (In thousands) Net income $ 58,503 $ 55,002 Dividends on preferred stock (5,729) (3,618) Net income allocated to common shareholders $ 52,774 $ 51,384 Basic earnings per share 28,784,197 $ 1.83 28,745,614 $ 1.79 Effect of dilutive securities-restricted stock awards 92,306 32,848 Diluted earnings per share 28,876,503 $ 1.83 28,778,462 $ 1.79 Nine Month Periods Ended September 30, 2021 2020 Weighted- Per Weighted- Per Net Average Share Net Average Share Income Shares Amount Income Shares Amount (In thousands) (In thousands) Net income $ 171,903 $ 120,747 Dividends on preferred stock (15,145) (10,855) Net income allocated to common shareholders $ 156,758 $ 109,892 Basic earnings per share 28,779,745 $ 5.45 28,741,395 $ 3.82 Effect of dilutive securities-restricted stock awards 87,380 25,361 Diluted earnings per share 28,867,125 $ 5.43 28,766,756 $ 3.82 |
Segment Information (Tables)
Segment Information (Tables) | 9 Months Ended |
Sep. 30, 2021 | |
Segment Information | |
Schedule of business segment financial information | Multi-family Mortgage Mortgage Banking Warehousing Banking Other Total (In thousands) Three Months Ended September 30, 2021 Interest income $ 272 $ 33,153 $ 42,561 $ 1,328 $ 77,314 Interest expense — 2,334 6,904 (805) 8,433 Net interest income 272 30,819 35,657 2,133 68,881 Provision for loan losses — (585) 1,664 — 1,079 Net interest income after provision for loan losses 272 31,404 33,993 2,133 67,802 Noninterest income 35,022 2,734 3,803 (1,288) 40,271 Noninterest expense 15,569 2,971 6,304 4,628 29,472 Income before income taxes 19,725 31,167 31,492 (3,783) 78,601 Income taxes 5,277 7,950 8,029 (1,158) 20,098 Net income (loss) $ 14,448 $ 23,217 $ 23,463 $ (2,625) $ 58,503 Total assets $ 280,927 $ 4,685,037 $ 5,950,316 $ 35,753 $ 10,952,033 Multi-family Mortgage Mortgage Banking Warehousing Banking Other Total (In thousands) Three Months Ended September 30, 2020 Interest income $ 245 $ 47,321 $ 27,628 $ 1,064 $ 76,258 Interest expense — 4,546 7,139 (749) 10,936 Net interest income 245 42,775 20,489 1,813 65,322 Provision for loan losses — 691 2,290 — 2,981 Net interest income after provision for loan losses 245 42,084 18,199 1,813 62,341 Noninterest income 20,471 6,834 12,374 (1,022) 38,657 Noninterest expense 11,955 3,534 7,145 3,750 26,384 Income before income taxes 8,761 45,384 23,428 (2,959) 74,614 Income taxes 2,870 11,591 5,942 (791) 19,612 Net income (loss) $ 5,891 $ 33,793 $ 17,486 $ (2,168) $ 55,002 Total assets $ 194,624 $ 5,179,664 $ 4,111,984 $ 44,203 $ 9,530,475 Multi-family Mortgage Mortgage Banking Warehousing Banking Other Total (In thousands) Nine Months Ended September 30, 2021 Interest income $ 683 $ 101,675 $ 123,084 $ 3,859 $ 229,301 Interest expense — 5,657 20,559 (2,166) 24,050 Net interest income 683 96,018 102,525 6,025 205,251 Provision for loan losses — (1,709) 4,136 — 2,427 Net interest income after provision for loan losses 683 97,727 98,389 6,025 202,824 Noninterest income 96,828 9,930 14,094 (3,790) 117,062 Noninterest expense 45,639 8,570 20,925 12,605 87,739 Income before income taxes 51,872 99,087 91,558 (10,370) 232,147 Income taxes 14,492 25,239 23,329 (2,816) 60,244 Net income $ 37,380 $ 73,848 $ 68,229 $ (7,554) $ 171,903 Total assets $ 280,927 $ 4,685,037 $ 5,950,316 $ 35,753 $ 10,952,033 Multi-family Mortgage Mortgage Banking Warehousing Banking Other Total (In thousands) Nine Months Ended September 30, 2020 Interest income $ 925 $ 119,464 $ 82,541 $ 1,949 $ 204,879 Interest expense — 24,417 29,323 (3,770) 49,970 Net interest income 925 95,047 53,218 5,719 154,909 Provision for loan losses — 1,071 6,653 — 7,724 Net interest income after provision for loan losses 925 93,976 46,565 5,719 147,185 Noninterest income 50,160 15,236 22,236 (2,885) 84,747 Noninterest expense 29,771 10,074 18,930 10,184 68,959 Income before income taxes 21,314 99,138 49,871 (7,350) 162,973 Income taxes 6,373 25,196 12,623 (1,966) 42,226 Net income $ 14,941 $ 73,942 $ 37,248 $ (5,384) $ 120,747 Total assets $ 194,624 $ 5,179,664 $ 4,111,984 $ 44,203 $ 9,530,475 |
Basis of Presentation - Princip
Basis of Presentation - Principles of Consolidation (Details) $ in Millions | 9 Months Ended |
Sep. 30, 2021USD ($) | |
Net assets deconsolidated | $ 10 |
Loans receivable deconsolidated | 66.6 |
Borrowings deconsolidated | 52.7 |
Gain or loss on deconsolidation | 0 |
Other assets, net | |
Fair value of continuing investments after deconsolidation | $ 10 |
Securities Available For Sale -
Securities Available For Sale - Amortized Cost to Approximate Fair Value (Details) - USD ($) $ in Thousands | May 07, 2021 | Sep. 30, 2021 | Sep. 30, 2020 | Dec. 31, 2020 |
Available-for-sale securities: | ||||
Amortized Cost | $ 300,786 | $ 269,323 | ||
Gross Unrealized Gains | 532 | 496 | ||
Gross Unrealized Losses | 199 | 17 | ||
Fair Value of available for sale securities | 301,119 | 269,802 | ||
Purchases of available for sale securities | 195,206 | $ 434,331 | ||
Treasury notes | ||||
Available-for-sale securities: | ||||
Amortized Cost | 5,002 | 6,535 | ||
Gross Unrealized Gains | 7 | 24 | ||
Gross Unrealized Losses | 3 | |||
Fair Value of available for sale securities | 5,006 | 6,559 | ||
Federal agencies | ||||
Available-for-sale securities: | ||||
Amortized Cost | 244,966 | 234,954 | ||
Gross Unrealized Gains | 1 | 103 | ||
Gross Unrealized Losses | 196 | 17 | ||
Fair Value of available for sale securities | 244,771 | 235,040 | ||
Municipals | ||||
Available-for-sale securities: | ||||
Amortized Cost | 5,929 | 5,935 | ||
Gross Unrealized Gains | 92 | 90 | ||
Fair Value of available for sale securities | 6,021 | 6,025 | ||
Mortgage-backed - Government-sponsored entity (GSE) | ||||
Available-for-sale securities: | ||||
Amortized Cost | 44,889 | 21,899 | ||
Gross Unrealized Gains | 432 | 279 | ||
Fair Value of available for sale securities | 45,321 | $ 22,178 | ||
Mortgage-backed Securities, Purchased from Freddie Mac | Loan Sale and Freddie Mac Q Series Securitization | ||||
Available-for-sale securities: | ||||
Fair Value of available for sale securities | $ 24,700 | |||
Purchases of available for sale securities | $ 28,700 |
Securities Available For Sale_2
Securities Available For Sale - Contractual Maturities (Details) - USD ($) $ in Thousands | Sep. 30, 2021 | Dec. 31, 2020 |
Contractual Maturities, Amortized Cost | ||
Within one year | $ 7,054 | $ 6,288 |
After one through five years | 247,987 | 239,770 |
After five through ten years | 512 | 515 |
After ten years | 344 | 851 |
Amortized Costs, Gross | 255,897 | 247,424 |
Amortized Costs, Net | 300,786 | 269,323 |
Contractual Maturities, Fair Value | ||
Within one year | 7,054 | 6,302 |
After one through five years | 247,822 | 239,877 |
After five through ten years | 547 | 549 |
After ten years | 375 | 896 |
Fair Value, Gross | 255,798 | 247,624 |
Available-for-sale Securities, Debt Securities, Total | 301,119 | 269,802 |
Mortgage-backed - Government-sponsored entity (GSE) | ||
Contractual Maturities, Amortized Cost | ||
Amortized Costs, Mortgage-backed - Government-sponsored entity (GSE) - residential | 44,889 | 21,899 |
Amortized Costs, Net | 44,889 | 21,899 |
Contractual Maturities, Fair Value | ||
Fair Value, Mortgage-backed - Government-sponsored entity (GSE) - residential | 45,321 | 22,178 |
Available-for-sale Securities, Debt Securities, Total | $ 45,321 | $ 22,178 |
Securities Available For Sale_3
Securities Available For Sale - Sale of securities (Details) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2021 | Sep. 30, 2020 | Sep. 30, 2021 | Sep. 30, 2020 | |
Securities Available For Sale | ||||
Proceeds from the sale of available for sale securities | $ 34,500,000 | $ 4,300,000 | $ 34,469,000 | $ 4,347,000 |
Net gain on sale of securities available for sale | 441,000 | 441,000 | ||
Gains on sale of securities available for sale | $ 441,000 | $ 441,000 | ||
Gain loss recognized | $ 0 | $ 0 |
Securities Available For Sale_4
Securities Available For Sale - Continuous Unrealized Loss Position (Details) - USD ($) $ in Thousands | Sep. 30, 2021 | Dec. 31, 2020 |
Available-for-sale securities, Continuous Unrealized Loss Position, Fair Value | ||
Available-for-sale securities, Continuous Unrealized Loss Position, Fair Value, Less than 12 Months | $ 221,769 | |
Available-for-sale Securities, Continuous Unrealized Loss Position, Fair Value, Total | 221,769 | |
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 | 199 | |
Available-for-sale securities, Continuous Unrealized Loss Position, Gross Unrealized Losses, Total | 199 | |
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 | 1,997 | |
Available-for-sale Securities, Continuous Unrealized Loss Position, Fair Value, Total | 1,997 | |
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 | |
Available-for-sale securities, Continuous Unrealized Loss Position, Gross Unrealized Losses, Total | 3 | |
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 | 219,772 | $ 69,939 |
Available-for-sale Securities, Continuous Unrealized Loss Position, Fair Value, Total | 219,772 | 69,939 |
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 | 196 | 17 |
Available-for-sale securities, Continuous Unrealized Loss Position, Gross Unrealized Losses, Total | $ 196 | $ 17 |
Mortgage Loans in Process of _2
Mortgage Loans in Process of Securitization (Details) - USD ($) $ in Millions | 9 Months Ended | |
Sep. 30, 2021 | Sep. 30, 2020 | |
Mortgage Loans in Process of Securitization | ||
Unrealized gains included in mortgage loans | $ 4.9 | $ 3.2 |
Loans and Allowance for Loan _3
Loans and Allowance for Loan Losses - Narrative (Details) | May 07, 2021USD ($)security | Sep. 30, 2021USD ($) | Sep. 30, 2020USD ($) | Dec. 31, 2020USD ($) |
Loans and Leases Receivable Disclosure [Line Items] | ||||
Proceeds from sale of loans receivable | $ 262,086,000 | |||
Purchases of available for sale securities | 195,206,000 | $ 434,331,000 | ||
Servicing rights | $ 105,473,000 | $ 82,604,000 | ||
Loan Sale and Freddie Mac Q Series Securitization | ||||
Loans and Leases Receivable Disclosure [Line Items] | ||||
Net loss on sale of loans | $ 676,000 | |||
First loss position in loan portfolio, maximum securitization pool, percentage | 10.00% | |||
First loss position in loan portfolio, maximum securitization pool, amount | $ 26,200,000 | |||
First loss position in loan portfolio, reserves for losses | 1,400,000 | |||
Servicing rights | $ 730,000 | |||
Loan Sale and Freddie Mac Q Series Securitization | Mortgage-backed Securities, Purchased from Freddie Mac | ||||
Loans and Leases Receivable Disclosure [Line Items] | ||||
Number of securities purchased | security | 2 | |||
Purchases of available for sale securities | $ 28,700,000 | |||
Multi-family and healthcare financing | Loan Sale and Freddie Mac Q Series Securitization | ||||
Loans and Leases Receivable Disclosure [Line Items] | ||||
Proceeds from sale of loans receivable | $ 262,000,000 |
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, 2021 | Sep. 30, 2020 | Sep. 30, 2021 | Sep. 30, 2020 | Dec. 31, 2020 | |
Allowance for loan losses | |||||
Balance, beginning of period | $ 28,696 | $ 20,497 | $ 27,500 | $ 15,842 | |
Provision (credit) for loan losses | 1,079 | 2,981 | 2,427 | 7,724 | |
Loans charged to the allowance | (650) | (104) | (810) | (236) | |
Recoveries of loans previously charged off | 9 | 62 | 17 | 106 | |
Balance, end of period | 29,134 | 23,436 | 29,134 | 23,436 | |
Ending balance: individually evaluated for impairment | 1,175 | 1,175 | $ 1,613 | ||
Ending balance: collectively evaluated for impairment | 27,959 | 27,959 | 25,887 | ||
Loans | |||||
Ending balance | 5,460,361 | 5,460,361 | 5,535,426 | ||
Ending balance individually evaluated for impairment | 44,120 | 44,120 | 14,464 | ||
Ending balance: collectively evaluated for impairment | 5,416,241 | 5,416,241 | 5,520,962 | ||
Mortgage warehouse lines of credit | |||||
Allowance for loan losses | |||||
Balance, beginning of period | 2,935 | 3,203 | 4,018 | 1,913 | |
Provision (credit) for loan losses | (705) | 874 | (1,788) | 2,164 | |
Balance, end of period | 2,230 | 4,077 | 2,230 | 4,077 | |
Ending balance: collectively evaluated for impairment | 2,230 | 2,230 | 4,018 | ||
Loans | |||||
Ending balance | 891,605 | 891,605 | 1,605,745 | ||
Ending balance: collectively evaluated for impairment | 891,605 | 891,605 | 1,605,745 | ||
Residential real estate | |||||
Allowance for loan losses | |||||
Balance, beginning of period | 3,969 | 2,310 | 3,334 | 2,042 | |
Provision (credit) for loan losses | 105 | 504 | 742 | 772 | |
Loans charged to the allowance | (2) | ||||
Balance, end of period | 4,074 | 2,814 | 4,074 | 2,814 | |
Ending balance: individually evaluated for impairment | 7 | ||||
Ending balance: collectively evaluated for impairment | 4,074 | 4,074 | 3,327 | ||
Loans | |||||
Ending balance | 828,950 | 828,950 | 678,848 | ||
Ending balance individually evaluated for impairment | 780 | 780 | 2,761 | ||
Ending balance: collectively evaluated for impairment | 828,170 | 828,170 | 676,087 | ||
Multi-family and healthcare financing | |||||
Allowance for loan losses | |||||
Balance, beginning of period | 15,782 | 9,878 | 14,731 | 7,018 | |
Provision (credit) for loan losses | 1,429 | 1,566 | 2,480 | 4,426 | |
Balance, end of period | 17,211 | 11,444 | 17,211 | 11,444 | |
Ending balance: collectively evaluated for impairment | 17,211 | 17,211 | 14,731 | ||
Loans | |||||
Ending balance | 3,244,442 | 3,244,442 | 2,749,020 | ||
Ending balance individually evaluated for impairment | 36,760 | 36,760 | |||
Ending balance: collectively evaluated for impairment | 3,207,682 | 3,207,682 | 2,749,020 | ||
Commercial and commercial real estate | |||||
Allowance for loan losses | |||||
Balance, beginning of period | 5,239 | 4,343 | 4,641 | 4,173 | |
Provision (credit) for loan losses | 296 | 13 | 1,046 | 270 | |
Loans charged to the allowance | (650) | (94) | (802) | (225) | |
Recoveries of loans previously charged off | 62 | 106 | |||
Balance, end of period | 4,885 | 4,324 | 4,885 | 4,324 | |
Ending balance: individually evaluated for impairment | 1,175 | 1,175 | 1,606 | ||
Ending balance: collectively evaluated for impairment | 3,710 | 3,710 | 3,035 | ||
Loans | |||||
Ending balance | 391,562 | 391,562 | 387,294 | ||
Ending balance individually evaluated for impairment | 6,416 | 6,416 | 9,591 | ||
Ending balance: collectively evaluated for impairment | 385,146 | 385,146 | 377,703 | ||
Agricultural production and real estate | |||||
Allowance for loan losses | |||||
Balance, beginning of period | 611 | 610 | 636 | 523 | |
Provision (credit) for loan losses | (2) | 21 | (27) | 108 | |
Balance, end of period | 609 | 631 | 609 | 631 | |
Ending balance: collectively evaluated for impairment | 609 | 609 | 636 | ||
Loans | |||||
Ending balance | 92,113 | 92,113 | 101,268 | ||
Ending balance individually evaluated for impairment | 158 | 158 | 2,100 | ||
Ending balance: collectively evaluated for impairment | 91,955 | 91,955 | 99,168 | ||
Consumer and margin loans | |||||
Allowance for loan losses | |||||
Balance, beginning of period | 160 | 153 | 140 | 173 | |
Provision (credit) for loan losses | (44) | 3 | (26) | (16) | |
Loans charged to the allowance | (10) | (6) | (11) | ||
Recoveries of loans previously charged off | 9 | 17 | |||
Balance, end of period | 125 | $ 146 | 125 | $ 146 | |
Ending balance: collectively evaluated for impairment | 125 | 125 | 140 | ||
Loans | |||||
Ending balance | 11,689 | 11,689 | 13,251 | ||
Ending balance individually evaluated for impairment | 6 | 6 | 12 | ||
Ending balance: collectively evaluated for impairment | $ 11,683 | $ 11,683 | $ 13,239 |
Loans and Allowance for Loan _5
Loans and Allowance for Loan Losses - Credit Risk Profile of Loan Portfolio (Details) - USD ($) $ in Thousands | Sep. 30, 2021 | Dec. 31, 2020 |
Credit risk profile of portfolio | ||
Loans | $ 5,460,361 | $ 5,535,426 |
Special Mention (Watch) | ||
Credit risk profile of portfolio | ||
Loans | 87,400 | 152,939 |
Substandard | ||
Credit risk profile of portfolio | ||
Loans | 44,120 | 14,464 |
Acceptable and Above | ||
Credit risk profile of portfolio | ||
Loans | 5,328,579 | 5,367,345 |
Covid 19 | Special Mention (Watch) | ||
Credit risk profile of portfolio | ||
Loans | 262 | 678 |
Mortgage warehouse lines of credit | ||
Credit risk profile of portfolio | ||
Loans | 891,605 | 1,605,745 |
Mortgage warehouse lines of credit | Special Mention (Watch) | ||
Credit risk profile of portfolio | ||
Loans | 222 | |
Mortgage warehouse lines of credit | Acceptable and Above | ||
Credit risk profile of portfolio | ||
Loans | 891,605 | 1,605,523 |
Residential real estate | ||
Credit risk profile of portfolio | ||
Loans | 828,950 | 678,848 |
Residential real estate | Special Mention (Watch) | ||
Credit risk profile of portfolio | ||
Loans | 823 | 853 |
Residential real estate | Substandard | ||
Credit risk profile of portfolio | ||
Loans | 780 | 2,761 |
Residential real estate | Acceptable and Above | ||
Credit risk profile of portfolio | ||
Loans | 827,270 | 674,851 |
Residential real estate | Covid 19 | Special Mention (Watch) | ||
Credit risk profile of portfolio | ||
Loans | 77 | 383 |
Multi-family and healthcare financing | ||
Credit risk profile of portfolio | ||
Loans | 3,244,442 | 2,749,020 |
Multi-family and healthcare financing | Special Mention (Watch) | ||
Credit risk profile of portfolio | ||
Loans | 78,979 | 145,050 |
Multi-family and healthcare financing | Substandard | ||
Credit risk profile of portfolio | ||
Loans | 36,760 | |
Multi-family and healthcare financing | Acceptable and Above | ||
Credit risk profile of portfolio | ||
Loans | 3,128,518 | 2,603,785 |
Multi-family and healthcare financing | Covid 19 | Special Mention (Watch) | ||
Credit risk profile of portfolio | ||
Loans | 185 | 185 |
Commercial and commercial real estate | ||
Credit risk profile of portfolio | ||
Loans | 391,562 | 387,294 |
Commercial and commercial real estate | Special Mention (Watch) | ||
Credit risk profile of portfolio | ||
Loans | 3,652 | 2,620 |
Commercial and commercial real estate | Substandard | ||
Credit risk profile of portfolio | ||
Loans | 6,416 | 9,591 |
Commercial and commercial real estate | Acceptable and Above | ||
Credit risk profile of portfolio | ||
Loans | 381,494 | 374,973 |
Commercial and commercial real estate | Covid 19 | Special Mention (Watch) | ||
Credit risk profile of portfolio | ||
Loans | 110 | |
Agricultural production and real estate | ||
Credit risk profile of portfolio | ||
Loans | 92,113 | 101,268 |
Agricultural production and real estate | Special Mention (Watch) | ||
Credit risk profile of portfolio | ||
Loans | 3,942 | 4,160 |
Agricultural production and real estate | Substandard | ||
Credit risk profile of portfolio | ||
Loans | 158 | 2,100 |
Agricultural production and real estate | Acceptable and Above | ||
Credit risk profile of portfolio | ||
Loans | 88,013 | 95,008 |
Consumer and margin loans | ||
Credit risk profile of portfolio | ||
Loans | 11,689 | 13,251 |
Consumer and margin loans | Special Mention (Watch) | ||
Credit risk profile of portfolio | ||
Loans | 4 | 34 |
Consumer and margin loans | Substandard | ||
Credit risk profile of portfolio | ||
Loans | 6 | 12 |
Consumer and margin loans | Acceptable and Above | ||
Credit risk profile of portfolio | ||
Loans | $ 11,679 | $ 13,205 |
Loans and Allowance for Loan _6
Loans and Allowance for Loan Losses - Aging Analysis Of The Recorded Investment In Loans (Details) $ in Thousands | Sep. 30, 2021USD ($)loan | Dec. 31, 2020USD ($) |
Aging analysis of loan portfolio | ||
Past due loans | $ 3,503 | $ 47,829 |
Current loans | 5,456,858 | 5,487,597 |
Loans and Leases Receivable, Net of Deferred Income, Total | $ 5,460,361 | 5,535,426 |
Number of loans modified in accordance with CARES Act | loan | 3 | |
Amount of outstanding loans modified in accordance with CARES Act | $ 37,000 | |
Loans modified in accordance with CARES Act, payments due | 0 | |
30-59 Days Past Due | ||
Aging analysis of loan portfolio | ||
Past due loans | 842 | 4,748 |
60-89 Days Past Due | ||
Aging analysis of loan portfolio | ||
Past due loans | 276 | 36,916 |
Greater Than 90 Days | ||
Aging analysis of loan portfolio | ||
Past due loans | 2,385 | 6,165 |
Mortgage warehouse lines of credit | ||
Aging analysis of loan portfolio | ||
Current loans | 891,605 | 1,605,745 |
Loans and Leases Receivable, Net of Deferred Income, Total | 891,605 | 1,605,745 |
Residential real estate | ||
Aging analysis of loan portfolio | ||
Past due loans | 714 | 1,074 |
Current loans | 828,236 | 677,774 |
Loans and Leases Receivable, Net of Deferred Income, Total | 828,950 | 678,848 |
Residential real estate | 30-59 Days Past Due | ||
Aging analysis of loan portfolio | ||
Past due loans | 377 | 364 |
Residential real estate | 60-89 Days Past Due | ||
Aging analysis of loan portfolio | ||
Past due loans | 196 | 80 |
Residential real estate | Greater Than 90 Days | ||
Aging analysis of loan portfolio | ||
Past due loans | 141 | 630 |
Multi-family and healthcare financing | ||
Aging analysis of loan portfolio | ||
Past due loans | 36,760 | |
Current loans | 3,244,442 | 2,712,260 |
Loans and Leases Receivable, Net of Deferred Income, Total | 3,244,442 | 2,749,020 |
Multi-family and healthcare financing | 60-89 Days Past Due | ||
Aging analysis of loan portfolio | ||
Past due loans | 36,760 | |
Commercial and commercial real estate | ||
Aging analysis of loan portfolio | ||
Past due loans | 2,631 | 4,266 |
Current loans | 388,931 | 383,028 |
Loans and Leases Receivable, Net of Deferred Income, Total | 391,562 | 387,294 |
Commercial and commercial real estate | 30-59 Days Past Due | ||
Aging analysis of loan portfolio | ||
Past due loans | 361 | 608 |
Commercial and commercial real estate | 60-89 Days Past Due | ||
Aging analysis of loan portfolio | ||
Past due loans | 46 | 76 |
Commercial and commercial real estate | Greater Than 90 Days | ||
Aging analysis of loan portfolio | ||
Past due loans | 2,224 | 3,582 |
Agricultural production and real estate | ||
Aging analysis of loan portfolio | ||
Past due loans | 103 | 5,703 |
Current loans | 92,010 | 95,565 |
Loans and Leases Receivable, Net of Deferred Income, Total | 92,113 | 101,268 |
Agricultural production and real estate | 30-59 Days Past Due | ||
Aging analysis of loan portfolio | ||
Past due loans | 103 | 3,769 |
Agricultural production and real estate | Greater Than 90 Days | ||
Aging analysis of loan portfolio | ||
Past due loans | 1,934 | |
Consumer and margin loans | ||
Aging analysis of loan portfolio | ||
Past due loans | 55 | 26 |
Current loans | 11,634 | 13,225 |
Loans and Leases Receivable, Net of Deferred Income, Total | 11,689 | 13,251 |
Consumer and margin loans | 30-59 Days Past Due | ||
Aging analysis of loan portfolio | ||
Past due loans | 1 | 7 |
Consumer and margin loans | 60-89 Days Past Due | ||
Aging analysis of loan portfolio | ||
Past due loans | 34 | |
Consumer and margin loans | Greater Than 90 Days | ||
Aging analysis of loan portfolio | ||
Past due loans | $ 20 | $ 19 |
Loans and Allowance for Loan _7
Loans and Allowance for Loan Losses - Impaired Loans and Specific Valuation Allowance (Details) - USD ($) $ in Thousands | Sep. 30, 2021 | Dec. 31, 2020 |
Impaired loans without a specific allowance: | ||
Recorded investment | $ 42,159 | $ 8,130 |
Unpaid principal balance | 42,159 | 8,130 |
Impaired loans with a specific allowance: | ||
Recorded investment | 1,961 | 6,334 |
Unpaid principal balance | 1,961 | 6,334 |
Specific allowance | 1,175 | 1,613 |
Total impaired loans: | ||
Recorded investments | 44,120 | 14,464 |
Unpaid principal balance | 44,120 | 14,464 |
Specific allowance | 1,175 | 1,613 |
Residential real estate | ||
Impaired loans without a specific allowance: | ||
Recorded investment | 780 | 2,704 |
Unpaid principal balance | 780 | 2,704 |
Impaired loans with a specific allowance: | ||
Recorded investment | 57 | |
Unpaid principal balance | 57 | |
Specific allowance | 7 | |
Total impaired loans: | ||
Recorded investments | 780 | 2,761 |
Unpaid principal balance | 780 | 2,761 |
Specific allowance | 7 | |
Multi-family and healthcare financing | ||
Impaired loans without a specific allowance: | ||
Recorded investment | 36,760 | |
Unpaid principal balance | 36,760 | |
Total impaired loans: | ||
Recorded investments | 36,760 | |
Unpaid principal balance | 36,760 | |
Commercial and commercial real estate | ||
Impaired loans without a specific allowance: | ||
Recorded investment | 4,455 | 3,319 |
Unpaid principal balance | 4,455 | 3,319 |
Impaired loans with a specific allowance: | ||
Recorded investment | 1,961 | 6,272 |
Unpaid principal balance | 1,961 | 6,272 |
Specific allowance | 1,175 | 1,606 |
Total impaired loans: | ||
Recorded investments | 6,416 | 9,591 |
Unpaid principal balance | 6,416 | 9,591 |
Specific allowance | 1,175 | 1,606 |
Agricultural production and real estate | ||
Impaired loans without a specific allowance: | ||
Recorded investment | 158 | 2,100 |
Unpaid principal balance | 158 | 2,100 |
Total impaired loans: | ||
Recorded investments | 158 | 2,100 |
Unpaid principal balance | 158 | 2,100 |
Consumer and margin loans | ||
Impaired loans without a specific allowance: | ||
Recorded investment | 6 | 7 |
Unpaid principal balance | 6 | 7 |
Impaired loans with a specific allowance: | ||
Recorded investment | 5 | |
Unpaid principal balance | 5 | |
Total impaired loans: | ||
Recorded investments | 6 | 12 |
Unpaid principal balance | $ 6 | $ 12 |
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, 2021 | Sep. 30, 2020 | Sep. 30, 2021 | Sep. 30, 2020 | |
Impaired Loans | ||||
Average recorded investment in impaired loans | $ 16,680 | $ 15,198 | $ 17,298 | $ 14,300 |
Interest income recognized | 112 | 398 | 348 | |
Interest income recognized | 97 | |||
Mortgage warehouse lines of credit | ||||
Impaired Loans | ||||
Average recorded investment in impaired loans | 138 | |||
Residential real estate | ||||
Impaired Loans | ||||
Average recorded investment in impaired loans | 595 | 2,892 | 1,885 | 2,892 |
Interest income recognized | 30 | 57 | 42 | |
Interest income recognized | 7 | |||
Multi-family and healthcare financing | ||||
Impaired Loans | ||||
Average recorded investment in impaired loans | 9,190 | 7,352 | ||
Commercial and commercial real estate | ||||
Impaired Loans | ||||
Average recorded investment in impaired loans | 6,731 | 10,061 | 7,307 | 9,747 |
Interest income recognized | 82 | 341 | 305 | |
Interest income recognized | 90 | |||
Agricultural production and real estate | ||||
Impaired Loans | ||||
Average recorded investment in impaired loans | 158 | 2,231 | 747 | 1,506 |
Consumer and margin loans | ||||
Impaired Loans | ||||
Average recorded investment in impaired loans | $ 6 | $ 14 | $ 7 | 17 |
Interest income recognized | $ 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, 2021 | Dec. 31, 2020 |
Loan portfolio past due loans | ||
Nonaccrual | $ 2,810 | $ 2,823 |
Total Loans Greater than 90 Days & Accruing | 80 | 3,498 |
Residential real estate | ||
Loan portfolio past due loans | ||
Nonaccrual | 472 | 578 |
Total Loans Greater than 90 Days & Accruing | 16 | 69 |
Commercial and commercial real estate | ||
Loan portfolio past due loans | ||
Nonaccrual | 2,174 | 2,052 |
Total Loans Greater than 90 Days & Accruing | 50 | 1,240 |
Agricultural production and real estate | ||
Loan portfolio past due loans | ||
Nonaccrual | 158 | 181 |
Total Loans Greater than 90 Days & Accruing | 2,181 | |
Consumer and margin loans | ||
Loan portfolio past due loans | ||
Nonaccrual | 6 | 12 |
Total Loans Greater than 90 Days & Accruing | $ 14 | $ 8 |
Loans and Allowance for Loan_10
Loans and Allowance for Loan Losses - Summary of Loans By Classification (Details) $ in Thousands | 9 Months Ended | |||||
Sep. 30, 2021USD ($) | Jun. 30, 2021USD ($) | Dec. 31, 2020USD ($) | Sep. 30, 2020USD ($) | Jun. 30, 2020USD ($) | Dec. 31, 2019USD ($) | |
Loans and Allowance for Loan Losses | ||||||
Loans | $ 5,460,361 | $ 5,535,426 | ||||
Allowance for loan losses | 29,134 | $ 28,696 | 27,500 | $ 23,436 | $ 20,497 | $ 15,842 |
Loans and Leases Receivable, Net Amount, Total | $ 5,431,227 | 5,507,926 | ||||
Loans funded through PPP, CARES Act | ||||||
Loans and Allowance for Loan Losses | ||||||
Percentage of loans to be forgiven | 12 | |||||
Loans receivable to be forgiven | $ 104,700 | |||||
Mortgage warehouse lines of credit | ||||||
Loans and Allowance for Loan Losses | ||||||
Loans | 891,605 | 1,605,745 | ||||
Allowance for loan losses | 2,230 | 2,935 | 4,018 | 4,077 | 3,203 | 1,913 |
Residential real estate | ||||||
Loans and Allowance for Loan Losses | ||||||
Loans | 828,950 | 678,848 | ||||
Allowance for loan losses | 4,074 | 3,969 | 3,334 | 2,814 | 2,310 | 2,042 |
Multi-family and healthcare financing | ||||||
Loans and Allowance for Loan Losses | ||||||
Loans | 3,244,442 | 2,749,020 | ||||
Allowance for loan losses | 17,211 | 15,782 | 14,731 | 11,444 | 9,878 | 7,018 |
Commercial and commercial real estate | ||||||
Loans and Allowance for Loan Losses | ||||||
Loans | 391,562 | 387,294 | ||||
Allowance for loan losses | 4,885 | 5,239 | 4,641 | 4,324 | 4,343 | 4,173 |
Commercial and commercial real estate | Loans funded through PPP, CARES Act | ||||||
Loans and Allowance for Loan Losses | ||||||
Loans | 13,000 | 60,200 | ||||
Agricultural production and real estate | ||||||
Loans and Allowance for Loan Losses | ||||||
Loans | 92,113 | 101,268 | ||||
Allowance for loan losses | 609 | 611 | 636 | 631 | 610 | 523 |
Consumer and margin loans | ||||||
Loans and Allowance for Loan Losses | ||||||
Loans | 11,689 | 13,251 | ||||
Allowance for loan losses | $ 125 | $ 160 | $ 140 | $ 146 | $ 153 | $ 173 |
Loans and Allowance for Loan_11
Loans and Allowance for Loan Losses - Troubled Debt and Modifications (Details) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2021USD ($)itemloan | Sep. 30, 2020loanitem | Sep. 30, 2021USD ($)loanitem | Sep. 30, 2020itemloan | |
Troubled debt and modifications | ||||
Number of troubled debt restructuring | 0 | 0 | 0 | 0 |
Number of loans restructured defaulted | item | 0 | 0 | 0 | 0 |
Amount of outstanding loans modified in accordance with CARES Act | $ | $ 37 | $ 37 | ||
Residential real estate | ||||
Troubled debt and modifications | ||||
Number of loans in the process of foreclosure | 0 | 0 |
Variable Interest Entities (V_3
Variable Interest Entities (VIEs) (Details) - USD ($) $ in Thousands | Sep. 30, 2021 | Dec. 31, 2020 | Sep. 30, 2020 |
Variable Interest Entities (VIEs) | |||
Total Assets | $ 10,952,033 | $ 9,645,375 | $ 9,530,475 |
Total Liabilities | 9,842,155 | $ 8,834,754 | |
Single Family and Multi-Family Debt Financing Investments | Variable Interest Entity, Not Primary Beneficiary | |||
Variable Interest Entities (VIEs) | |||
Total Assets | 25,338 | ||
Total Liabilities | 12,334 | ||
Maximum Exposure to Loss | $ 25,163 |
Borrowings - Other borrowings (
Borrowings - Other borrowings (Details) - American Financial Exchange, Extensions of Credit $ in Millions | Sep. 30, 2021USD ($) |
Borrowings | |
Maximum borrowing capacity | $ 325 |
Outstanding balance | $ 225 |
Minimum | |
Borrowings | |
Fixed rate (as a percent) | 0.07% |
Maximum | |
Borrowings | |
Fixed rate (as a percent) | 0.08% |
Regulatory Matters (Details)
Regulatory Matters (Details) $ in Thousands | Sep. 30, 2021USD ($) | Dec. 31, 2020USD ($) |
Company | ||
Tier 1 Capital (to average assets) | ||
Tier 1 Capital, Actual, Capital Amount | $ 1,090,870 | $ 792,456 |
Tier 1 Capital (to average assets), Actual, Ratio (as a percent) | 10.7 | 8.6 |
Tier 1 Capital, Minimum Amount To Be Well Capitalized, Capital Amount | $ 866,269 | $ 738,019 |
Company | Minimum | ||
Tier 1 Capital (to average assets) | ||
Tier 1 Capital (to average assets), Minimum Amount To Be Well Capitalized, Ratio (as a percent) | 8.5 | 8 |
Merchants Bank | ||
Tier 1 Capital (to average assets) | ||
Tier 1 Capital, Actual, Capital Amount | $ 1,052,260 | $ 781,221 |
Tier 1 Capital (to average assets), Actual, Ratio (as a percent) | 10.6 | 8.7 |
Tier 1 Capital, Minimum Amount To Be Well Capitalized, Capital Amount | $ 840,748 | $ 718,120 |
Merchants Bank | Minimum | ||
Tier 1 Capital (to average assets) | ||
Tier 1 Capital (to average assets), Minimum Amount To Be Well Capitalized, Ratio (as a percent) | 8.5 | 8 |
FMBI | ||
Tier 1 Capital (to average assets) | ||
Tier 1 Capital, Actual, Capital Amount | $ 27,714 | $ 24,456 |
Tier 1 Capital (to average assets), Actual, Ratio (as a percent) | 9.6 | 9.8 |
Tier 1 Capital, Minimum Amount To Be Well Capitalized, Capital Amount | $ 24,538 | $ 19,979 |
FMBI | Minimum | ||
Tier 1 Capital (to average assets) | ||
Tier 1 Capital (to average assets), Minimum Amount To Be Well Capitalized, Ratio (as a percent) | 8.5 | 8 |
Derivative Financial Instrume_3
Derivative Financial Instruments (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2021 | Sep. 30, 2020 | Sep. 30, 2021 | Sep. 30, 2020 | Dec. 31, 2020 | |
The periodic changes in the fair value of the derivative financial instruments on the condensed consolidated statements of income | |||||
Net derivative gains (losses) | $ (1,013) | $ (1,108) | $ (604) | $ 490 | |
Pledged in collateral | 3,900 | 3,900 | $ 3,900 | ||
Derivative assets | |||||
Derivative Financial Instruments | |||||
Derivative assets, fair value | 736 | 736 | 6,131 | ||
Derivative liabilities | |||||
Derivative Financial Instruments | |||||
Derivative liabilities, fair value | 481 | 481 | 2,682 | ||
Interest Rate Lock Commitments | |||||
Derivative Financial Instruments | |||||
Notional amount | 106,948 | 106,948 | 412,043 | ||
The periodic changes in the fair value of the derivative financial instruments on the condensed consolidated statements of income | |||||
Net derivative gains (losses) | (691) | 2,407 | (6,389) | 7,963 | |
Interest Rate Lock Commitments | Derivative assets | |||||
Derivative Financial Instruments | |||||
Derivative assets, fair value | 207 | 207 | 6,131 | ||
Interest Rate Lock Commitments | Derivative liabilities | |||||
Derivative Financial Instruments | |||||
Derivative liabilities, fair value | 465 | 465 | |||
Forward Contracts | |||||
Derivative Financial Instruments | |||||
Notional amount | 107,789 | 107,789 | 304,024 | ||
The periodic changes in the fair value of the derivative financial instruments on the condensed consolidated statements of income | |||||
Net derivative gains (losses) | (322) | (3,515) | 5,785 | (7,473) | |
Forward Contracts | Derivative assets | |||||
Derivative Financial Instruments | |||||
Derivative assets, fair value | 529 | 529 | |||
Forward Contracts | Derivative liabilities | |||||
Derivative Financial Instruments | |||||
Derivative liabilities, fair value | 16 | 16 | 2,682 | ||
Interest rate swaps | |||||
Derivative Financial Instruments | |||||
Notional amount | 105,992 | 105,992 | 82,726 | ||
The periodic changes in the fair value of the derivative financial instruments on the condensed consolidated statements of income | |||||
Gross swap gains | 371 | (289) | 1,452 | 3,048 | |
Gross swap losses | (371) | $ 289 | (1,452) | $ (3,048) | |
Interest rate swaps | Derivative assets | |||||
Derivative Financial Instruments | |||||
Derivative assets, fair value | 1,718 | 1,718 | 3,170 | ||
Interest rate swaps | Derivative liabilities | |||||
Derivative Financial Instruments | |||||
Derivative liabilities, fair value | $ 1,718 | $ 1,718 | $ 3,170 |
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, 2021 | Dec. 31, 2020 |
Disclosures about Fair Value of Assets and Liabilities | ||
Mortgage loans in process of securitization | $ 634,027 | $ 338,733 |
Available for sale securities | 301,119 | 269,802 |
Loans held for sale | 26,296 | 40,044 |
Servicing rights | 105,473 | 82,604 |
Recurring | ||
Disclosures about Fair Value of Assets and Liabilities | ||
Mortgage loans in process of securitization | 634,027 | 338,733 |
Loans held for sale | 26,296 | 40,044 |
Servicing rights | 105,473 | 82,604 |
Recurring | Interest Rate Lock Commitments | ||
Disclosures about Fair Value of Assets and Liabilities | ||
Derivative assets | 207 | 6,131 |
Derivative liabilities | 465 | |
Recurring | Forward Contracts | ||
Disclosures about Fair Value of Assets and Liabilities | ||
Derivative assets | 529 | |
Derivative liabilities | 16 | 2,682 |
Recurring | Interest rate swaps | ||
Disclosures about Fair Value of Assets and Liabilities | ||
Derivative assets | 1,718 | 3,170 |
Derivative liabilities | 1,718 | 3,170 |
Level 2 | Recurring | ||
Disclosures about Fair Value of Assets and Liabilities | ||
Mortgage loans in process of securitization | 634,027 | 338,733 |
Loans held for sale | 26,296 | 40,044 |
Level 2 | Recurring | Forward Contracts | ||
Disclosures about Fair Value of Assets and Liabilities | ||
Derivative assets | 529 | |
Derivative liabilities | 16 | 2,682 |
Level 2 | Recurring | Interest rate swaps | ||
Disclosures about Fair Value of Assets and Liabilities | ||
Derivative assets | 1,718 | 3,170 |
Derivative liabilities | 1,718 | 3,170 |
Level 3 | Interest Rate Lock Commitments | ||
Disclosures about Fair Value of Assets and Liabilities | ||
Derivative assets | 207 | 6,131 |
Derivative liabilities | 465 | |
Level 3 | Recurring | ||
Disclosures about Fair Value of Assets and Liabilities | ||
Servicing rights | 105,473 | 82,604 |
Level 3 | Recurring | Interest Rate Lock Commitments | ||
Disclosures about Fair Value of Assets and Liabilities | ||
Derivative assets | 207 | 6,131 |
Derivative liabilities | 465 | |
Treasury notes | ||
Disclosures about Fair Value of Assets and Liabilities | ||
Available for sale securities | 5,006 | 6,559 |
Treasury notes | Recurring | ||
Disclosures about Fair Value of Assets and Liabilities | ||
Available for sale securities | 5,006 | 6,559 |
Treasury notes | Level 1 | Recurring | ||
Disclosures about Fair Value of Assets and Liabilities | ||
Available for sale securities | 5,006 | 6,559 |
Federal agencies | ||
Disclosures about Fair Value of Assets and Liabilities | ||
Available for sale securities | 244,771 | 235,040 |
Federal agencies | Recurring | ||
Disclosures about Fair Value of Assets and Liabilities | ||
Available for sale securities | 244,771 | 235,040 |
Federal agencies | Level 2 | Recurring | ||
Disclosures about Fair Value of Assets and Liabilities | ||
Available for sale securities | 244,771 | 235,040 |
Municipals | Recurring | ||
Disclosures about Fair Value of Assets and Liabilities | ||
Available for sale securities | 6,021 | 6,025 |
Municipals | Level 2 | Recurring | ||
Disclosures about Fair Value of Assets and Liabilities | ||
Available for sale securities | 6,021 | 6,025 |
Mortgage-backed - Government-sponsored entity (GSE) | ||
Disclosures about Fair Value of Assets and Liabilities | ||
Available for sale securities | 45,321 | 22,178 |
Mortgage-backed - Government-sponsored entity (GSE) | Recurring | ||
Disclosures about Fair Value of Assets and Liabilities | ||
Available for sale securities | 45,321 | 22,178 |
Mortgage-backed - Government-sponsored entity (GSE) | Level 2 | Recurring | ||
Disclosures about Fair Value of Assets and Liabilities | ||
Available for sale securities | $ 45,321 | $ 22,178 |
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, 2021 | Sep. 30, 2020 | Sep. 30, 2021 | Sep. 30, 2020 | |
Subtractions | ||||
Sales of servicing | $ (438) | |||
Derivative liabilities | Interest Rate Lock Commitments | ||||
Reconciliation of significant unobservable inputs, liabilities: | ||||
Balance, beginning of period | $ 54 | |||
Changes in fair value | 411 | $ 1 | 465 | $ 1 |
Balance, end of period | 465 | 1 | 465 | 1 |
Servicing rights. | ||||
Reconciliation of significant unobservable inputs, assets: | ||||
Balance, beginning of period | 98,331 | 72,889 | 82,604 | 74,387 |
Additions | ||||
Originated and purchased servicing | 7,125 | 6,462 | 23,833 | 14,406 |
Subtractions | ||||
Paydowns | (2,955) | (2,608) | (11,030) | (5,070) |
Changes in fair value due to changes in valuation inputs or assumptions used in the valuation model | 2,972 | (971) | 10,504 | (7,951) |
Balance, end of period | 105,473 | 75,772 | 105,473 | 75,772 |
Derivative assets | Interest Rate Lock Commitments | ||||
Reconciliation of significant unobservable inputs, assets: | ||||
Balance, beginning of period | 487 | 5,742 | 6,131 | 186 |
Subtractions | ||||
Changes in fair value | (280) | 2,408 | (5,924) | 7,964 |
Balance, end of period | $ 207 | $ 8,150 | $ 207 | $ 8,150 |
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, 2021 | Dec. 31, 2020 |
Disclosures about Fair Value of Assets and Liabilities | ||
Impaired loans (collateral dependent) | $ 4,129 | $ 4,059 |
Level 3 | ||
Disclosures about Fair Value of Assets and Liabilities | ||
Impaired loans (collateral dependent) | $ 4,129 | $ 4,059 |
Disclosures about Fair Value _6
Disclosures about Fair Value of Assets and Liabilities - Quantitative Information about Unobservable Inputs (Details) | Sep. 30, 2021USD ($) | Dec. 31, 2020USD ($) |
Quantitative information about unobservable inputs | ||
Servicing rights | $ 105,473,000 | $ 82,604,000 |
Level 3 | Servicing rights | Loans funded through PPP, CARES Act | ||
Quantitative information about unobservable inputs | ||
Servicing rights | $ 2,202,000 | |
Level 3 | Servicing rights | Loans funded through PPP, CARES Act | Discount Rate | ||
Quantitative information about unobservable inputs | ||
Servicing asset, measurement input | 0.16 | |
Level 3 | Servicing rights | Loans funded through PPP, CARES Act | Discount Rate | Weighted average | ||
Quantitative information about unobservable inputs | ||
Servicing asset, measurement input | 0.16 | |
Level 3 | Servicing rights | Loans funded through PPP, CARES Act | Constant Prepayment Rate | Minimum | ||
Quantitative information about unobservable inputs | ||
Servicing asset, measurement input | 0.09 | |
Level 3 | Servicing rights | Loans funded through PPP, CARES Act | Constant Prepayment Rate | Maximum | ||
Quantitative information about unobservable inputs | ||
Servicing asset, measurement input | 0.44 | |
Level 3 | Servicing rights | Loans funded through PPP, CARES Act | Constant Prepayment Rate | Weighted average | ||
Quantitative information about unobservable inputs | ||
Servicing asset, measurement input | 0.12 | |
Level 3 | Servicing rights | Single Family | ||
Quantitative information about unobservable inputs | ||
Servicing rights | $ 21,610,000 | $ 9,035,000 |
Level 3 | Servicing rights | Single Family | Discount Rate | ||
Quantitative information about unobservable inputs | ||
Servicing asset, measurement input | 0.11 | |
Level 3 | Servicing rights | Single Family | Discount Rate | Weighted average | ||
Quantitative information about unobservable inputs | ||
Servicing asset, measurement input | 0.11 | |
Level 3 | Servicing rights | Single Family | Constant Prepayment Rate | Minimum | ||
Quantitative information about unobservable inputs | ||
Servicing asset, measurement input | 0.11 | 0.08 |
Level 3 | Servicing rights | Single Family | Constant Prepayment Rate | Maximum | ||
Quantitative information about unobservable inputs | ||
Servicing asset, measurement input | 0.13 | 0.35 |
Level 3 | Servicing rights | Single Family | Constant Prepayment Rate | Weighted average | ||
Quantitative information about unobservable inputs | ||
Servicing asset, measurement input | 0.11 | 0.16 |
Level 3 | Servicing rights | Single Family | Mortgage Yield | Minimum | ||
Quantitative information about unobservable inputs | ||
Servicing asset, measurement input | 0.09 | |
Level 3 | Servicing rights | Single Family | Mortgage Yield | Maximum | ||
Quantitative information about unobservable inputs | ||
Servicing asset, measurement input | 0.10 | |
Level 3 | Servicing rights | Single Family | Mortgage Yield | Weighted average | ||
Quantitative information about unobservable inputs | ||
Servicing asset, measurement input | 0.09 | |
Level 3 | Servicing rights | Multi-family | ||
Quantitative information about unobservable inputs | ||
Servicing rights | $ 81,661,000 | $ 73,569,000 |
Level 3 | Servicing rights | Multi-family | Discount Rate | Minimum | ||
Quantitative information about unobservable inputs | ||
Servicing asset, measurement input | 0.08 | 0.08 |
Level 3 | Servicing rights | Multi-family | Discount Rate | Maximum | ||
Quantitative information about unobservable inputs | ||
Servicing asset, measurement input | 0.13 | 0.13 |
Level 3 | Servicing rights | Multi-family | Discount Rate | Weighted average | ||
Quantitative information about unobservable inputs | ||
Servicing asset, measurement input | 0.09 | 0.09 |
Level 3 | Servicing rights | Multi-family | Constant Prepayment Rate | Minimum | ||
Quantitative information about unobservable inputs | ||
Servicing asset, measurement input | 0 | 0.02 |
Level 3 | Servicing rights | Multi-family | Constant Prepayment Rate | Maximum | ||
Quantitative information about unobservable inputs | ||
Servicing asset, measurement input | 0.50 | 0.43 |
Level 3 | Servicing rights | Multi-family | Constant Prepayment Rate | Weighted average | ||
Quantitative information about unobservable inputs | ||
Servicing asset, measurement input | 0.05 | 0.04 |
Level 3 | Collateral-dependent impaired loans | ||
Quantitative information about unobservable inputs | ||
Collateral-dependent impaired loans | $ 4,129,000 | $ 4,059,000 |
Marketability discount (as a percent) | 0.77 | 0.43 |
Level 3 | Collateral-dependent impaired loans | Minimum | ||
Quantitative information about unobservable inputs | ||
Marketability discount (as a percent) | 0.43 | |
Level 3 | Collateral-dependent impaired loans | Weighted average | ||
Quantitative information about unobservable inputs | ||
Marketability discount (as a percent) | 0.77 | 0.43 |
Level 3 | Interest Rate Lock Commitments | ||
Quantitative information about unobservable inputs | ||
Derivative assets | $ 207,000 | $ 6,131,000 |
Derivative liabilities | $ 465,000 | |
Level 3 | Interest Rate Lock Commitments | Measurement Input, Maturity | Minimum | ||
Quantitative information about unobservable inputs | ||
Loan closing rates (as a percent) | 0.54 | 0.55 |
Loan closing rates (as a percent) | 0.54 | |
Level 3 | Interest Rate Lock Commitments | Measurement Input, Maturity | Maximum | ||
Quantitative information about unobservable inputs | ||
Loan closing rates (as a percent) | 0.99 | 0.99 |
Loan closing rates (as a percent) | 0.99 | |
Level 3 | Interest Rate Lock Commitments | Measurement Input, Maturity | Weighted average | ||
Quantitative information about unobservable inputs | ||
Loan closing rates (as a percent) | 0.85 | 0.75 |
Loan closing rates (as a percent) | 0.85 |
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, 2021 | Dec. 31, 2020 |
Financial assets: | ||
Loans held for sale | $ 26,296 | $ 40,044 |
Carrying Value | ||
Financial assets: | ||
Cash and cash equivalents | 802,576 | 179,728 |
Securities purchased under agreements to resell | 5,923 | 6,580 |
FHLB stock | 70,767 | 70,656 |
Loans held for sale | 3,426,983 | 3,030,110 |
Loans, net | 5,431,227 | 5,507,926 |
Interest receivable | 21,894 | 21,770 |
Financial liabilities: | ||
Deposits | 8,947,319 | 7,408,066 |
Short-term subordinated debt | 17,000 | 14,960 |
FHLB advances | 556,979 | 1,221,071 |
Other borrowing | 235,157 | |
Federal Reserve discount window/PPPLF advances | 112,225 | |
Interest payable | 2,477 | 1,476 |
Fair Value | ||
Financial assets: | ||
Cash and cash equivalents | 802,576 | 179,728 |
Securities purchased under agreements to resell | 5,923 | 6,580 |
FHLB stock | 70,767 | 70,656 |
Loans held for sale | 3,426,983 | 3,030,110 |
Loans, net | 5,389,595 | 5,484,824 |
Interest receivable | 21,894 | 21,770 |
Financial liabilities: | ||
Deposits | 8,948,327 | 7,410,759 |
Short-term subordinated debt | 17,000 | 14,960 |
FHLB advances | 556,992 | 1,221,870 |
Other borrowing | 235,157 | |
Federal Reserve discount window/PPPLF advances | 112,225 | |
Interest payable | 2,477 | 1,476 |
Level 1 | Fair Value | ||
Financial assets: | ||
Cash and cash equivalents | 802,576 | 179,728 |
Financial liabilities: | ||
Deposits | 7,707,121 | 7,051,413 |
Level 2 | Fair Value | ||
Financial assets: | ||
Securities purchased under agreements to resell | 5,923 | 6,580 |
FHLB stock | 70,767 | 70,656 |
Loans held for sale | 3,426,983 | 3,030,110 |
Interest receivable | 21,894 | 21,770 |
Financial liabilities: | ||
Deposits | 1,241,206 | 359,346 |
Short-term subordinated debt | 17,000 | 14,960 |
FHLB advances | 556,992 | 1,221,870 |
Other borrowing | 235,157 | |
Federal Reserve discount window/PPPLF advances | 112,225 | |
Interest payable | 2,477 | 1,476 |
Level 3 | Fair Value | ||
Financial assets: | ||
Loans, net | $ 5,389,595 | $ 5,484,824 |
Earnings Per Share (Details)
Earnings Per Share (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2021 | Sep. 30, 2020 | Sep. 30, 2021 | Sep. 30, 2020 | |
Net Income | ||||
Net income | $ 58,503 | $ 55,002 | $ 171,903 | $ 120,747 |
Dividends on preferred stock | (5,729) | (3,618) | (15,145) | (10,855) |
Net Income Allocated to Common Shareholders | $ 52,774 | $ 51,384 | $ 156,758 | $ 109,892 |
Weighted-Average Shares | ||||
Weighted average shares - Basic | 28,784,197 | 28,745,614 | 28,779,745 | 28,741,395 |
Effect of dilutive securities-restricted stock awards | 92,306 | 32,848 | 87,380 | 25,361 |
Weighted average shares - diluted | 28,876,503 | 28,778,462 | 28,867,125 | 28,766,756 |
Per Share Amount | ||||
Basic earnings per share | $ 1.83 | $ 1.79 | $ 5.45 | $ 3.82 |
Diluted earnings per share | $ 1.83 | $ 1.79 | $ 5.43 | $ 3.82 |
Share-Based Payment Plans (Deta
Share-Based Payment Plans (Details) - USD ($) | 1 Months Ended | 3 Months Ended | 9 Months Ended | 12 Months Ended | ||
Jan. 31, 2021 | Sep. 30, 2021 | Sep. 30, 2020 | Sep. 30, 2021 | Sep. 30, 2020 | Dec. 31, 2018 | |
Non executive directors | ||||||
Plan disclosures | ||||||
Shares issued | 1,775 | 0 | 3,235 | 3,130 | ||
Value of shares available for issuance for compensation related to annual fees | $ 50,000 | $ 10,000 | ||||
2017 Plan | Restricted stock | ||||||
Plan disclosures | ||||||
Shares issued | 0 | 0 | 35,056 | 36,046 |
Segment Information (Details)
Segment Information (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2021 | Sep. 30, 2020 | Sep. 30, 2021 | Sep. 30, 2020 | Dec. 31, 2020 | |
Segment Information | |||||
Interest income | $ 77,314 | $ 76,258 | $ 229,301 | $ 204,879 | |
Interest expense | 8,433 | 10,936 | 24,050 | 49,970 | |
Net Interest Income | 68,881 | 65,322 | 205,251 | 154,909 | |
Provision for loan losses | 1,079 | 2,981 | 2,427 | 7,724 | |
Net Interest Income After Provision for Loan Losses | 67,802 | 62,341 | 202,824 | 147,185 | |
Noninterest income | 40,271 | 38,657 | 117,062 | 84,747 | |
Noninterest expense | 29,472 | 26,384 | 87,739 | 68,959 | |
Income Before Income Taxes | 78,601 | 74,614 | 232,147 | 162,973 | |
Income taxes | 20,098 | 19,612 | 60,244 | 42,226 | |
Net Income | 58,503 | 55,002 | 171,903 | 120,747 | |
Total assets | 10,952,033 | 9,530,475 | 10,952,033 | 9,530,475 | $ 9,645,375 |
Other | |||||
Segment Information | |||||
Interest income | 1,328 | 1,064 | 3,859 | 1,949 | |
Interest expense | (805) | (749) | (2,166) | (3,770) | |
Net Interest Income | 2,133 | 1,813 | 6,025 | 5,719 | |
Net Interest Income After Provision for Loan Losses | 2,133 | 1,813 | 6,025 | 5,719 | |
Noninterest income | (1,288) | (1,022) | (3,790) | (2,885) | |
Noninterest expense | 4,628 | 3,750 | 12,605 | 10,184 | |
Income Before Income Taxes | (3,783) | (2,959) | (10,370) | (7,350) | |
Income taxes | (1,158) | (791) | (2,816) | (1,966) | |
Net Income | (2,625) | (2,168) | (7,554) | (5,384) | |
Total assets | 35,753 | 44,203 | 35,753 | 44,203 | |
Multifamily | Operating Segments | |||||
Segment Information | |||||
Interest income | 272 | 245 | 683 | 925 | |
Net Interest Income | 272 | 245 | 683 | 925 | |
Net Interest Income After Provision for Loan Losses | 272 | 245 | 683 | 925 | |
Noninterest income | 35,022 | 20,471 | 96,828 | 50,160 | |
Noninterest expense | 15,569 | 11,955 | 45,639 | 29,771 | |
Income Before Income Taxes | 19,725 | 8,761 | 51,872 | 21,314 | |
Income taxes | 5,277 | 2,870 | 14,492 | 6,373 | |
Net Income | 14,448 | 5,891 | 37,380 | 14,941 | |
Total assets | 280,927 | 194,624 | 280,927 | 194,624 | |
Mortgage Warehousing | Operating Segments | |||||
Segment Information | |||||
Interest income | 33,153 | 47,321 | 101,675 | 119,464 | |
Interest expense | 2,334 | 4,546 | 5,657 | 24,417 | |
Net Interest Income | 30,819 | 42,775 | 96,018 | 95,047 | |
Provision for loan losses | (585) | 691 | (1,709) | 1,071 | |
Net Interest Income After Provision for Loan Losses | 31,404 | 42,084 | 97,727 | 93,976 | |
Noninterest income | 2,734 | 6,834 | 9,930 | 15,236 | |
Noninterest expense | 2,971 | 3,534 | 8,570 | 10,074 | |
Income Before Income Taxes | 31,167 | 45,384 | 99,087 | 99,138 | |
Income taxes | 7,950 | 11,591 | 25,239 | 25,196 | |
Net Income | 23,217 | 33,793 | 73,848 | 73,942 | |
Total assets | 4,685,037 | 5,179,664 | 4,685,037 | 5,179,664 | |
Banking | Operating Segments | |||||
Segment Information | |||||
Interest income | 42,561 | 27,628 | 123,084 | 82,541 | |
Interest expense | 6,904 | 7,139 | 20,559 | 29,323 | |
Net Interest Income | 35,657 | 20,489 | 102,525 | 53,218 | |
Provision for loan losses | 1,664 | 2,290 | 4,136 | 6,653 | |
Net Interest Income After Provision for Loan Losses | 33,993 | 18,199 | 98,389 | 46,565 | |
Noninterest income | 3,803 | 12,374 | 14,094 | 22,236 | |
Noninterest expense | 6,304 | 7,145 | 20,925 | 18,930 | |
Income Before Income Taxes | 31,492 | 23,428 | 91,558 | 49,871 | |
Income taxes | 8,029 | 5,942 | 23,329 | 12,623 | |
Net Income | 23,463 | 17,486 | 68,229 | 37,248 | |
Total assets | $ 5,950,316 | $ 4,111,984 | $ 5,950,316 | $ 4,111,984 |
Preferred Stock Offerings (Deta
Preferred Stock Offerings (Details) | May 06, 2021USD ($)$ / sharesshares | Apr. 15, 2021USD ($)shares | Mar. 23, 2021USD ($)$ / sharesshares | Sep. 23, 2019USD ($)$ / sharesshares | Aug. 19, 2019USD ($)$ / sharesshares | Jun. 27, 2019USD ($)$ / sharesshares | Apr. 12, 2019USD ($)shares | Mar. 28, 2019USD ($)$ / sharesshares | Sep. 30, 2021USD ($)$ / shares | Sep. 30, 2020USD ($) | Sep. 30, 2021USD ($)$ / sharesshares | Sep. 30, 2020USD ($) | Dec. 31, 2020$ / shares | Dec. 31, 2016$ / shares | Dec. 31, 2015$ / shares | Dec. 31, 2016$ / sharesshares |
Public Offering of Preferred Stock | ||||||||||||||||
Redemption of preferred stock | $ 41,625,000 | |||||||||||||||
Net proceeds | $ 191,084,000 | |||||||||||||||
8% Preferred Stock | ||||||||||||||||
Public Offering of Preferred Stock | ||||||||||||||||
Redemption of 8% preferred stock (in shares) | shares | 41,625 | |||||||||||||||
Redemption of 8% preferred stock | $ 41,600,000 | |||||||||||||||
Preferred stock, dividend rate (as a percent) | 8.00% | 8.00% | 8.00% | 8.00% | ||||||||||||
Preferred stock liquidation preference (in dollars per share) | $ / shares | $ 1,000 | $ 1,000 | $ 1,000 | |||||||||||||
Final dividend for redemption of 8% preferred stock | $ 139,000 | |||||||||||||||
8% Preferred Stock | Private Placement | ||||||||||||||||
Public Offering of Preferred Stock | ||||||||||||||||
Shares issued (in shares) | shares | 41,625 | |||||||||||||||
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 | 874,000 | |||||||||||||||
Preferred stock, dividend rate (as a percent) | 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 | $ 21,850,000 | |||||||||||||||
Brokerage fees | $ 0 | |||||||||||||||
7% Preferred Stock | Public Offering | ||||||||||||||||
Public Offering of Preferred Stock | ||||||||||||||||
Shares issued (in shares) | shares | 81,800 | 2,000,000 | ||||||||||||||
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 | $ 50,000,000 | |||||||||||||||
Net proceeds | $ 2,000,000 | 48,300,000 | ||||||||||||||
Offering costs | $ 1,700,000 | |||||||||||||||
Underwriting discounts | $ 41,000 | |||||||||||||||
7% Preferred Stock | Private Placement | ||||||||||||||||
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% Series B Preferred Stock | ||||||||||||||||
Public Offering of Preferred Stock | ||||||||||||||||
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 | |||||||||||||
6% Series B Preferred Stock | Public Offering | ||||||||||||||||
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% | |||||||||||||||
Preferred stock liquidation preference (in dollars per share) | $ / shares | $ 1,000 | |||||||||||||||
Depositary share, preferred stock liquidation preference (in dollars per share) | $ / shares | $ 25 | |||||||||||||||
Aggregate gross offering proceeds for the shares issued | $ 125,000,000 | |||||||||||||||
Net proceeds | 120,800,000 | |||||||||||||||
Offering costs | $ 4,200,000 | |||||||||||||||
6% Series C Preferred Stock | ||||||||||||||||
Public Offering of Preferred Stock | ||||||||||||||||
Shares issued (in shares) | shares | 46,181 | |||||||||||||||
Depositary shares issued (in shares) | shares | 1,847,233 | |||||||||||||||
Depositary share price (in dollars per share) | $ / shares | $ 25 | |||||||||||||||
Preferred stock, dividend rate (as a percent) | 6.00% | |||||||||||||||
Preferred stock liquidation preference (in dollars per share) | $ / shares | $ 1,000 | $ 1,000 | ||||||||||||||
Net proceeds | $ 46,200,000 | |||||||||||||||
Offering costs | $ 23,000 | |||||||||||||||
6% Series C Preferred Stock | Public Offering | ||||||||||||||||
Public Offering of Preferred Stock | ||||||||||||||||
Depositary shares issued (in shares) | shares | 6,000,000 | |||||||||||||||
Depositary shares equivalent preferred stock interest per share | 0.025 | |||||||||||||||
Preferred stock, dividend rate (as a percent) | 6.00% | |||||||||||||||
Preferred stock liquidation preference (in dollars per share) | $ / shares | $ 1,000 | |||||||||||||||
Depositary share, preferred stock liquidation preference (in dollars per share) | $ / shares | $ 25 | |||||||||||||||
Net proceeds | $ 144,900,000 | |||||||||||||||
Offering costs | 150,000,000 | |||||||||||||||
Underwriting discounts | $ 5,100,000 | |||||||||||||||
Preferred Stock | 8% Preferred Stock | ||||||||||||||||
Public Offering of Preferred Stock | ||||||||||||||||
Redemption of 8% preferred stock (in shares) | shares | (41,625) | |||||||||||||||
Redemption of 8% preferred stock | $ (41,581,000) | |||||||||||||||
Preferred stock, dividend rate (as a percent) | 8.00% | 8.00% | 8.00% | 8.00% | ||||||||||||
Preferred Stock | 7% Preferred Stock | ||||||||||||||||
Public Offering of Preferred Stock | ||||||||||||||||
Preferred stock, dividend rate (as a percent) | 7.00% | 7.00% | 7.00% | 7.00% | ||||||||||||
Preferred Stock | 6% Series B Preferred Stock | ||||||||||||||||
Public Offering of Preferred Stock | ||||||||||||||||
Preferred stock, dividend rate (as a percent) | 6.00% | 6.00% | 6.00% | 6.00% | ||||||||||||
Preferred Stock | 6% Series C Preferred Stock | ||||||||||||||||
Public Offering of Preferred Stock | ||||||||||||||||
Shares issued (in shares) | shares | 150,000 | |||||||||||||||
Preferred stock, dividend rate (as a percent) | 6.00% | 6.00% | 6.00% | 6.00% | ||||||||||||
Offering costs | $ 5,100,000 | $ 5,100,000 | $ 5,100,000 | $ 5,100,000 | ||||||||||||
Preferred Stock | 6% Series C Preferred Stock | Private Placement | ||||||||||||||||
Public Offering of Preferred Stock | ||||||||||||||||
Shares issued (in shares) | shares | 46,181 | |||||||||||||||
Preferred stock, dividend rate (as a percent) | 6.00% | 6.00% | 6.00% | 6.00% | ||||||||||||
Offering costs | $ 23,000 | $ 23,000 | $ 23,000 | $ 23,000 |